ML20117A391

Petition for Reconsideration of CLI-85-1 Re ASLB 841029 Ruling LBP-84-45.Commission Decision Erroneous.State & County Denied Right to Fair Hearing.Events Subsequent to CLI-85-1 Provide Addl & Irrefutable Bases for Reversal

ML20117A391
Person / Time
Site:	Shoreham File:Long Island Lighting Company icon.png
Issue date:	05/07/1985
From:	Letsche K, Palomino F KIRKPATRICK & LOCKHART, NEW YORK, STATE OF, SUFFOLK COUNTY, NY
To:	NRC COMMISSION (OCM)
Shared Package
ML20117A379	List: ML20117A375 ML20117A391 ML20117A411
References
ALAB-800, CLI-85-01, CLI-85-1, LBP-84-45, OL-4, NUDOCS 8505080209
Download: ML20117A391 (42)

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UNITED STATES OF AMERICA NUCIEAR REGJIATORY CONISSICN Before the Omnission 00tdETET USNRC

'85 MAY -7 P 3 :20

)

In the Matter of ) .j , ; c n ,< .

) CCCf ETM ^ SUr' '

IfNG ISLAND LIGfrING CCMPANY ) Ddc3OIbb. 50-322-OL-4

) (Iow Ibwer)

(Shorehan Nuclear Ebwer Station, )

Unit 1) )

)

)

SLFEDUC COURTY AND STATE OF NEW YORK PETITION ECR RECCNSIIERATION OF CLI-85-1 Pursuant to the Ormission's April 23, 1985 Order for Review of AIAB-800, Suffolk 03tnty and the State of New York hereby petition the Ormission to re-consider, and to reverse, its decision in CLI-85-1, which male effective the October 29, 1984 ruling of the Miller Licensing Board (LBP-84-45, 20 NRC 1343) that LIIro satisfied the requirments for an exenption frcm cmpliance with the NRC's regulations under 10 CFR $ 50.12(a) . The Omnission's decision is errone-ous for three reasons: (1) the Miller Board and in CLI-85-1 the Ctmnission, de-nied the State and Oatnty their right to a fair hearing guaranteed by the U.S.

Constitution, the Administrative Procedure Act and the Atcmic Ehergy Act; (2) a full and fair consideration of the merits of the Cbtnty's and State's evidence and the applicable law makes it impossible to find in LIIro's favor on the pub-lic interest, exigent ciretmstances, and "as safe as" issues; and (3) events subsequent to the issuance of CLI-85-1 provide additional and irrefutable bases for reversire that decision.l_/

l_/ In accordance with past practice in this proceeding (see e.g., Om-mission Order dated January 7,1985), the State and Cbtnty have 85050B0209 850507 (Ebotnote cont'd next page)

PDR ADOCK 05000322 O PDR

I. We Miller Ebard Proceeding, and the Omnission's Approval 'Ihereof in CLI-65-1, Violated the State's and Gotnty's @nstitutional and Statutory Rights It has lorg been a principle of administrative and constitutional law that the right to a hearirg, which is guaranteed to the State and @tnty by Section 189a of the Atcznic Ehergy Act (42 U.S.C. $ 2239(a)), necessarily includes the right to introduce relevant evidence on material issues and the right to have those issues decided on the basis of the evidence subnitted. As the Suprene Court observed more than half a century ago, he provision for a hearing implies both the privilege of introducing evidence and the duty of deciding in accordance with it. To refuse to consider evidence introduced or to make an essential finding without supporting evidence is ar-bitrary action.

We micago Junction Ose, 264 U.S. 258, 265 (1924); see Union of Gncerned Scientists v. NRC, 735 F.2d 1437,1444 (D.C. Cir.1984), cert. denied,105 S.

Ct. 815 (1985) (' Wen a statute requires a 'hearirg' in an adjtdicatory matter, such as licensing, the agency must generally provide an ogporttnity for (Ebotnote cont'd fran Irevious page) filed a joint Petition. hus, the applicable page limitation of 25

, pages per party is canbined herein. Nevertheless, even this 50 page conbined limit is not enough to permit us to portray the diolesale inequities of the Miller Board's decision that require its reversal.

We bases of the State's and 6tnty's appeal on the merits are set forth in detail in the Brief in Support of Appeal of October 29, 1984 ASIB Decision on LIIf0's Exenption Request (Dec. 11, 1984) filed with the Appeal Board, and pages 6-49, 109-21 of the tran-script of the Febrtary 11, 1985 oral argunent before the Appeal Board. We refer the Omnission to those docunents.

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subnission and challege of evidence as to any and all issues of material  !

fact.") .M  !

Above all, the right to a hearing includes the right of the parties to be treated equally in their opporttnities to present relevant evidence to the trier I of fact. It is wholly unacceptable, and a violation of statutory and cx>nstitu-tional guarantees, for a decision-maker systematically to pennit one party to introduce evidence on material issues, and then to deny other parties the right to present opposing evidence on those same issues. "[M]anifestly there is no hearing den [a] party . . . is not given an opporttnity to test, explain or re-fute." ICC v. Louisville & N. Ry. Co., 227 U.S.f 88, 93_ (1913).M 'Ihis is _

-2/ See also, e.g. , Northern Pacific Ry. v. Dep't of Public M>rks, 268 U.S. 39, 44-45 (1925) ("An order based tpon a finding made without evidence . . . is an arbitrary act . . . [and] a denial of due pro-cess"); Golden Grain Macaroni (b. v. PIC, 472 F.2d 882, 886 (9th Cir.1972) ("[I]f an issue was not litigated, and the party proceeded against was not given an opporttnity to defend himself, an adverse finding on that issue by the agency does violate due pro-cess"), cert. denied, 412 U.S. 918 (1973); Scenic findson Preservation Conf. v. FIC, 354 F.2d 608, 620 (2d Cir.1%5) ("'Ihe Ccmnission has an affirmative duty to inquire into and consider all relevant facts"), cert. denied, 384 U.S. 941 (1966). In the last case cited, an FIC licensing 7ecision was set aside because, as was true in this case, the Otanission had imIroperly failed to conpile a record sufficient to support its decision, and ignored certain factors and evidence on matters which, under the controlling statute ard its own intergretations of that statute, it was required to con-sider.

-3/ See also, e.g., Miller v. Poretsky, 595 F.2d 780, 785 (D.C. Cir.

l'ff8Fadinission of appellees' witnesses testifying to their free-dan fran discrimination and the exclusion of appellant's witness testifying to the contrary was . . . an abuse of discretion");

Bowden v. McKenna, 600 F.2d 282, 284-85 (1st Cir.1979) (cnce plain-tiff was allowed to testify on a relevant matter, " defendants were plainly entitled to rebut"), cert. denied, 444 U.S. 899 (1979);

l United States v. 478.34 Acres of Iand, 578 F.2d 156 (6th Cir.1978).

particularly true Were, as here, the parties who are denied the opportmity to present evidence <m material issues are representatives of the public, and one of the dispositive issues actually is the public's interest. As the U.S. Court of Appeals for the District of Cblunbia Circuit observed only last year, the NRC's " discretion to limit public participation in resolving the matters it deens relevant is more circunscribed as a result of section 189(a)'s hearing re-quirenents." Union of Cbncerned Scientists v. NRC, 735 F.2d at 1437. See also 10 CFR { 2.715(c) .

In this case, as detailed in our brief to the Appeal Board and sunnarized below, the Miller Board ignored these fundanental ginciples by denyirg the Comty and the State the right to present clearly relevant and probative evi-dence on every one of the critical issues in the exenption proceeding, and then relied solely on the evidence presented by LIICO on these issues or relied on no evidence at all. We Omnission itself then participated in and conpundei these violations of statutory and constitutional rights by issuing CLI-85-1, in which it sidestepped the pervasive Miller Board errors and pennitted then to stand.4/ hus:

-4/ 'Ihe 0:mnission's attenpt to " excuse" or "renedy" the Miller Board errors by saying that the Ctanission would not consider LIICO's evi-dence on particular issues, is no " solution" (see, e.g. , CLI-85-1, at 3-4 ) . Wis (kmnission tactic simply ignores the fact that the conpelling evidence of Suffolk Comty and the State of New York was never permitted to be introduced at all and thus the " record" upon which CLI-85-1 purprts to be based was conpiled in violation of law and can support no la'wful decision in LIICO's favor. W e point is that the Comty's Qnd State's evidence affirmatively requires denial of an exenptien. Were is no excuse for the Cimnission to block this relevant evidence fran the proceeding. R1rthermore, as (Ebotnote cont'd next page)

- Although the (btnty and State are by law the representatives of the pub-lic, virttally all the testimcny they. sought to introduce to show the exemption was not in the public's interest was excitded Wile the Miller Board instead relied upon the "public interest" evidence subnitted by two LIICO employees.

We Ommission effectively ignored this error in CLI-85-1.

1 - Although LIIro was pemitted to introduce evidence that its efforts to cmply with GDC 17 were exceptional enough to justify an exenption, the Cbtnty was denied the opporttnity to rebut that evidence, or to show why the balance of equities weighed against a finding of exigent circunstances sufficient to justi-fy an exenption. Again the Omnission effectively ignored this error in _

CLI-85-1. How could LIICO's purported "recent good faith efforts" groperly be considered (CLI-85-1, at 3-4) Wen the Cotnty was barred frm groving that even LIICO's recent efforts were seriously deficient?

- Finally, the Miller Ebard excluded highly relevant evidence subnitted by I the Cotnty on the "as safe as" issue, and then proceeded to resolve that issue l

solely in accordance with the evidence subnittad by LIICO. We Omnission dis-j missed this error with no reasoned explanation at all. See CLI-85-1, at 2-3.

I In short, the Miller Board simply ignored the constitutional and statutory rights of the (btnty and State to a fair hearing, and for this reason its deci-sion arising frm those proceedings must be reversed. Furthermore, as we (Ebotnote cont'd fran Irevious page) discussed in more detail below, this Omnission tactic also results in so-called "firdings" and conclusions based on no evidence at all.

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dernonstrate below, the 0mnission's conclusions in CLI-85-1 following its limited effectiveness review are just as erroneous.

A. 'Ihe Miller Board Systematically Excluded the State and Cbmty Evidence on the "Public Interest" Issue, While Simultaneously Admitting and Relying on LIICO's Evidence on the Same Issue Section 50.12(a) exEressly requires a finding that an exenption is "in the public interest."5/ In late 1903, the Qmunission regresented to the U.S. Court of Appeals that in determining where the public interest lies, the Omnission will give " great weight" to the views of the state goverment which regresents the affected gopulation.6/ In that case, the Governor of California had supported the result desired by the NRC. In contrast, here the Miller Board not only gave no weight to the views of the State and Cbunty goverrunents that it was 5/ LIICO has argued that the public interest finding required by Sec-tion 50.12(a) is limited to one of timing only. It has asserted that the only proper public interest consideration in the LIICO w enption proceeding was whether it is in the public interest to issue i

a low power license to LIICO now (i.e., pursuant to an exemption),

rather than later (i.e., at a time when LIICO allegedly could achieve conpliance with all NRC regulations) . Clearly, there is no basis for such a limitation; Section 50.12 does not limit or define I

the public interest considerations that the ominission may address

! in ruling on an exenption request. Indeed, LIIro's suggested defi-l nition is premised on a presunption that LIIrc is entitled to a low power license, which assunes away the very issue presented by LIIf0's exenption application. In essence, the issue here is not whether LIIf0 is " entitled" to an exenption, but whether it is qualified for one under the Omnissions's own regulations. Clearly,

, it is not so qualified.

l 6] See NRC Opposition to Bnergency Motion for Stay (Novenber 10, 1983),

at 34 filed in San Luis Cbispo Mothers for Peace v. NRC, 751 F.2d 1287 (D.C. Cir. 1984). See also 10 CFR 9 2.715(c) .

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not in the public interest to grant an exenption to LIICO, but also systenatically excluded as " irrelevant" virtually all the evidence that the Cotnty and State attenpted to introduce on that issue. Simultaneously, however, the Board admitted, and relied in its decision upon, the evidence subnitted by 4 LIIro on that issue. In CLI-85-1, the Ctmnission effectively did the same.

For example, the Miller Board refused to consider the Cbtnty's testimcny that there would be an econanic penalty to the public of arproximately $100 mil-lion if the exenption were granted and Shoreham were contaminated by low power testing, and then full power authorization did not follow. h e Miller Board also excitded as " irrelevant" testimcny by the Chairman of the New York State Constaner Protection Board and the (btnty's expert witnesses: (1) that granting the exenption could have an adverse impact on LIIrO's ability to service its custcrners; (2) that low power testing produces no electricity and therefore granting the exenption results in no public benefit; and, (3) that since the electrical power fran Shoreham is not needed for at least 10 years, there is no public benefit to be gained by granting the exenption, even if full power operation were to be authorized eventually.7_/

-7/ 'Ihe excluded testimcny of Messrs. Madan and Dirmeier on behalf of the (btnty was Attachnent 5 to the Suffolk (btnty and State of New York C%munents Cbncerning (%mnission Review of LIIf0's Exenption Re-quest (Novenber 29,1984) (hereafter, "Nov. 29 Ccmnents") . 'Ihe Miller Board's ruling excitding it is at Tr. 2145-48. 'Ihe testimcny of Mr. Kessel on behalf of New York, marked to reflect the Board's rulings, was Attachnent 6 to the Nov. 29 Ccmnents. The Board's ruling is at Tr. 2893-2905.

At the sane time, the Miller R>ard admitted, over the objection of the State and Cbsmty, testimony by two LIICO employees that granting the exenption was in the public interest because they believe it could reduce dependence on foreign oil and could result in an $8 million benefit to be realized by LIICO's ratepayers in 1997. Significantly, hcwever, they testified that neither of these benefits would ever be achieved miess Shoreham began full power operation. Tr . 1235-36, 1249-50, 1330, 1372, 1405-10. 21s was the only testi-i mmy offered by LIICO on the public interest issue, and it, along with the i Enderlying prestanption that full power operation would occur, provided the sole basis for the Miller Board's finding that the public interest requirement of .

l Section 50.12(a) was met. 20 NRC at 1378. We Miller Board's arbitrary refusal to consider the evidence subnitted by the Cbmty and State, which dancmstrated that the public interest requires denial of the exenption, constitutes a clear denial of due process and a violation of Section 189(a) .

We ominission's treatment of the dispositive public interest issue in CLI-85-1 was as arbitrary, and as lacking in legal and logical justification, as the Miller Board's. First, in CLI-85-1, the ominission in fact never made the required public interest finding at all. Indeed, it expressly "gave no weight" in its review to the only so-called public interest " benefits" relied upon by the Miller Board to find that granting the exenption was in the public interest (i.e., the gredicted econanic benefits to ratepayers fran earlier full pwer operation testified to by LIICO's witnesses) . CLI-85-1, at 4. R us, that order is on its face deficient, because (a) it fails to make the affirmative public

interest firx11ng that under Section 50.12(a) is a prerequisite to the grant of an exenption, and (b) it fails to justify why it failed to make the required public interest findirxJ. See Guard v.15tc, 753 F.2d 1144, 1148-49 (D.C. Cir.

1985) (deference to agency interrretation of its own regulation "is appropriate only so long as the agency's interrretation does no violence to the plain mean-ing of the provision at issue," quoting San Inis (bispo lethers for Peace v.

NRC, 751 F.2d 1287,1310 (D.C. Cir.1984)); Natural Resources Defense Comcil, Inc. v. NRC, 695 F.2d 623 (D.C. Cir.1982) (NRC Order granting Section 50.12 ex-enption reversed where NRC failed to make findings it had held were necessary to grant of Section 50.12 exenption and provided no explanation for deviation) . _

Second, in CLI-85-1 (at 4), the acromission exIressly "gave no weight" to the State's and (bmty's public interest evidence that granting the exsuption would hann the public if full Iower operation did not occur. And, as did the Miller Board, the Omnission simply ignored the proffered evidence that granting the exenption would adversely affect LIICO's ability to service its custczners.

'Ihus,- the State's and Cbmty's public interest evidence, which the Miller Board excluded, was treatal exactly the same way by the Omnission in CLI-85-1. Had the C%mnission considered the State's and (bunty's proferred evidence, the Om l mission would have been required to find that the public interest conpels denial of the exenption.

Finally, the Omnission's evasive explanation of why the State's and Cbm-t~ ty's public interest evidence was denied any consideration (id. at 4, n.2) is absurd. First, contrary to the Omnission's assertion, the State and 03mty do I

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not suggest that their views on the public interest should be treated as

" conclusive." We have merely cited the Ctmnission's own words in the Diablo Canyon (burt of Appeals case in arguing that the views of the public's elected regresentatives concerning where the public's interest lies should be accorded

" great weight."

Second, it is specious to suggest that penuitting the State and Cbunty to subnit evidence on the public interest issue - as they are entitled to do under law - and according that evidence great weight as to that issue - as the Ctm-mission did in the Diablo Canyon case -- constitutes an imgroper " delegation" of NRC responsibility. he point at issue here has nothing to do with the Ctmnis-sion delegating anything, but only with whether the Ctenission is exercising its duties responsibly.

Wird, the assertions that the " equitable considerations supporting the Ccmnission's decision in this case are within the special knowledge and expertise of the Chtunission since they arise directly fran the conduct of the NRC's own licensing process" and that those considcations " bear directly on the national interest in effective and efficient nuclear safety regulation" are ab-solutely baseless. We "rublic's interest," and all the equities relating to the requested exenption, are clearly not uniquely "within the core of the Ctm-mission's expertise." See Guard v. NRC, 753 F.2d at 1149-50. Further, whether all the considerations the Omnission decidal to rely upon do or not do derive fran the NRC's licensing process is irrelevant; the fact is that all other equi-table considerations that could have weighed against granting the exenption were

not considered at all. And, even if the considerations chosen by the Ommission relate to " efficient" nuclear safety regulation, that does not justify the Osn-mission's actions, under the guise of " efficient regulation," that in fact vio-late the plain wrds of its own regulations and Irecedents and other applicable law. Self-styled " efficiency" is not a label with which to paper over the deni-al of the State's and Cbmty's constitutional rights.

Finally, in ignoring the evidence proffered by the State and Cbtnty, the Ccumission is effectively repudiating Cbngress. In Section 274(1) of the Atcmic Energy Act, Congress mandated that the Ommission "shall afford reasonable op-portmity for State regesentatives to offer evidence . . . and advise the C%m-mission" as to license applications. In this proceeding, the State, as well as the Comty, have been barred by the Chrmission frcm exercising these statutory rights.

B. 'Ihe Miller Board Systenatically Excluded the State and Cbmty Evidence on the " Exigent Circtnstances" Issue, While Simultaneously Admitting and Relying on LIICO's Evidence on the Same Issue In CLI-84-8, the Ommission stated that "a finding of exceptional cireta-stances . . . governs the availability of an exenption," and that such relief is

" extraordinary." 19 NRC at 1156 n.3. See also Natural Resources Defense Comcil, Inc. v. NRC, 695 F.2d at 625, n.5 (NRC's stated " policy regarding granting of exenptions . . . pursuant to 50.12(a) [is] cne of grantirg such ex-emptions sparirgly and only in cases of undue hardship") . As with the public interest determination, however, the Miller Board based its finding that LIICO had dencnstrated sufficient exigent ciretastances to justify the grant of an

, _ - . - -,. .m . - . . . - . - , - - , _. - - - - - --. ,

exenption on LIICO's evidence, much of which was irrelevant, but refused to admit the evidence sutmitted by the Oatnty and State discussing facts ard equities that weighed against granting the exenption. See 20 NRC at 1377-82, 1401; Tr. 2385-89. And in CLI-85-1, the C%mnission as content to ignore that unlawful conduct.

1. One-Sided Evidence on IRuities Relating to LIICO's Efforts to Omply With CDC 17

'Ihe Miller Board excitded as " irrelevant" the Cbtnty's and State's testimo-ny that: LIICO had failai to take reasonable and approgriate actions to casure that the TDI diesels ccznplied with GDC 17; LIIf0's failures continued throughout the early 1980's and involved the very quality assurance and pre-operational -

testirg efforts which were discussed in LIIro's testimcny; and since the need for the exenption was the result of LIIf0's own failures (rather than fortuitous events beyond LIICO's control), the public's interest in ecmpliance with safety regulations weighed against rewarding LIICO's failures by granting an exenp-tion.8_/

At the same time, the Miller Ibard admitted, over the objections of the Cotnty and State, testimony by a LIIro employee that amcng LIIro's " good faith" efforts which constituted exceptional ciretznstances justifying the grant of an exenption were: LIICO's quality assurance efforts relating to the procurement, design and installation of the TDI diesels; its pre-operational testirg program; 8/

'Ihe referenced Cbtnty testimcny by Messrs. Bridenbatgh and Ilibbard was Attachnent 4 to the Nov. 29 ccmnents. 'Ihe Miller Board's ruling excitding that testimcny is at Tr. 2385-89.

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and its efforts following the catastrophic failure of one of the TDI diesels.

Tr. 1703-15. here can be no basis for permitting one party to present testimo-ny on an issue and to deirive an adverse party the right to subnit evidence on the same subject. See cases discussed at pages 2 - 4 above.

We prejudicial impact of the Miller Ibard's inconsistent rulings on the admissibility of evidence is clearly manifest in its decision. he Miller Board relied heavily on LIICO's purprted quality assurance program and pre-oprational test program -- as to which the Cbtnty's orposing testimcny was excluded - in finding that "LIICO's efforts as described in detail constitute the good faith to be considered in evaluating the equities, and support the grant of an exenption." 20 NRC at 1381,1398-1400. Clearly, no " reasoned" weighing of the pertinent equities could have occurred in the presence of only LIICO's one-sided evidence: the Ibard had refused to have before it any evi-dence which could have weighed on any but LIICO's side of the scales.

We O:mnission's assertion in CLI-85-1 (at 3) that it " considered what Suffolk asserts to be LIICO's negligence in bringing on itself the need for the exenption," does nothing to "remely" or render harmless the Miller Board's error. Indeed, the 0:mnission's assertion that "LIICO's recent good faith ef-l forts to cure the problens outweigh or balance any possible past negligence" (id. at 4) is directly contradicted by the State's and Cbtnty's evidence which l was denied admission. Wat evidence discussed and fotnd fault with LIICO's "re-cent" efforts in 1983 and 1984 as well as those in the past. See, e.g. , Ibbbard and Bridenbatx3h testimcny at 1%30.9/ Wus, the 0:mnission did exactly what the 9f he Ctmnission's " finding" also directly contradicts the finding of two Administrative Law Judges of the New York Public Service Ctmnis-(Ebotnote cont'd next page)

Miller Ibard did - it ignored evidence subnitted by the (bmty and State on a dispositive issue, and relied in its decision only on that subnitted by LIICO.

Furthermore, the Cimnission's statenent that LIICO's recent efforts " outweigh or balance" the fact that its need for the exenption as the result of LIICO's own failures, is contrary to the Cimnission's ultimate findig that LIICO's good 9

faith efforts favor granting the exenption. CLI-85-1, at 3, 4.10,/

(Ebotnote cont'd fran Irevious page) sion t o ruled on March 13, 1985 that LIIro has " mismanaged" the Shorehan Iroject in the amomt of $1.2 billion, with specific refer-ence to LIICO's conduct concerning the TDI diesels and their re-placanent. See Remmi: hied Decision, PSC Case No. 27563, Iong Is- -

land Lighting ChnInny, Shorehan Prtriency Investigation, March 13, 1985.

"-~10/ Any attenpt to rationalize the Miller Board's exclusion or the 02n-mission's blithe disnissal of the State's and Cbtnty's evidence relatim to LIIf0's efforts to conply with GDC 17, based on an al-leged distinction between a " good faith" issue and the legal defini-tion of " negligence," is baseless. In ruling on LIICO's exenption request, the Miller Board and the Ocnnission were required to make a finding of fact. After a reasoned weighirx3 of all equities, including those related to LIICO's efforts to couply with GDC 17, they had to determine whether LIICO had shown the existence of suf-ficiently exceptional circunstances to justify the grant of an ex-

, snption. However, findings of fact and legal conclusions that l LIIro's efforts were made in good faith, that they outweighed equi-table considerations in favor of requiring full canpliance with the regulations, or that they constituted sufficiently exceptional cir-l cunstances to justify an exenption, cannot be made in a factual vac-

! uun. Regardless of the particular adjectives used by technical ex-pert witnesses in testimcny, and the legal definitions and conclu-sions that lawyers may ascribe to those words, the Board and the tw=ai== ion can only make the required exceptional circunstances finding based on factual evidence in the record before it. 'Ihere is no rational or reasonable justification, nor has one ever been offered, for the Miller Board's or the Omnission's determinations j that (1) it need consider only LIICO's one-sided and clearly in-l couplete description and interIretation of facts relating to its ef-(Footnote cont'd next page) l

2. Imgroper Beliance Upon Evidence (bncerning the Iangth and Cbsts to LIICO of the Shoreham

. Licensing Proceeding

'Ihe Miller Board also relied on irrelevant LIICO testimcny concerning the length and costs of the NRC licensing proceeding in finding that exigent cirettn-stances existed to justify an exenption.ll./ In its testimony, LIIf0: (a) cxzn-plained that the Shorehan groceeding has lasted fbr several pars; (b) alleged that the Staff has imposed extra and technically unjustified burdens en LIICO; andi (c) cx2nplained that LIICO has had to expend a great deal of resources in pursuing its quest for a license. SeeTr.1680-92.l2/

(Ebotnote cont'd frczn grevious page) forts to ccznply with GDC 17; or (2) it could simply ignore the addi-tional facts and interiretations on the same subject proffered by -

the State and Omty to show that the equities weigh against a find-ing that LIICO's efforts justified the extraordinary step of permit-ting a nuclear plant to operate without ecznpliance with an important safety regulation.

g/ 'Ihe State and (bmty moved to strike this testimony as irrelevant (Tr. 1715-31) and the NRC Staff supported the motion to strike.

Tr. 1693.

12] One major ccznponent of this LIIf0 conplaint concerns the (bmty's and the State's decision not to adopt or implenent an emergency plan

for Shoreham and their opposition to LIIf0's substitute plan. Ibw-ever, the U.S. District Court for the Eastern District of New York ruled on March 18, 1985 that the Gmty's decision not to adopt a j plan for Shorehen was rational, the New York Suprene (burt ruled on l

February 20, 1985 that LIIf0's plan is illegal under state law, and l on April 17, 1985 the NRC's Licensing Board ruled that the state's laws which prevent LIIf0 frcin implenenting its plan are not preenpted. See also Section III below. 'Ihus, the length of this case boils down to something of LIIf0's own doing -- its continued pursuit of an unlawful objective.

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9 here is no indication in any Ocnnission precedent that such " evidence" (even if believed) would support the extraordinary relief of an exenption. The LIICO testimcny amotnted to nothing but an assertion of LIICO's apparent belief that it has a right to receive a license -- and here an exenption - frm the NRC. In fact, however, it is clear that all persons who apply for IRC licenses do so at their own risk and subject themselves to the NRC's rules and regula-tions, to the rulings of Licensing Boards and the Ctanission, and to the techni-cal jtrigments and reWrenents of the NRC Staff. LIICO's emplaints about the NRC licensing process, actions of the NRC Staff, and the length of, or costs incurred by LIIf0 during, the licensing Iroceeding are absolutely irrelevant.

Further, there is no basis for LIIf0's atriacious non sequitur that because it has been involved in a contested NRC licensing proceeding convened to test LIICO's empliance with NRC safety requirements, " fairness requires" that it should now be granted an exenption frcrn conplying with those very NRC safety re-quirenents.

Nonetheless, the Miller Board relied heavily upon this LIIf0 testimcmy in its Decision.l.3_/ here is no legal, factual, or logical basis for the Board's M/ h e Board held:

he costs of unusually heavy and Irotracted litiga-

) tion may also properly be considered in evaluating l

financial or econonic hardship as an equity in this l

exenption Iroceeding . . . .

I te tnusually heavy financial and econonic hardships associated with the very protracted Shorehan licens-ing Iroceedings constitute a significant equity, which we hold can reasonably be held to amotnt to (Rx)tnote cont'd next page) 1

cenclusion that LIIro's litigation costs constitute exigent circunstances which justify an exenption fran canpliance with important safety regulations.14/ me Ibard's reliance upon LIlCO's irrelevant testimony, as well as its consideration only of the alleged financial and econanic hardship borne by LIIf0 and its re-fusal even to consider those put forth by the State and the Q)mty which would be borne by the public, constitute clear error.

Once again, in CLI-85-1 the Omnission comtitted exactly the same error as the Miller Ibard -- it too fomd that "the unusual length and cost of thic whole licensing proceeding" was entitled to "special weight" as an " equity" in favor of granting the exenption. CLI-85-1 at 3, 4. his onnission finding is just ,o as illegal and illogical as the Miller Board's, and it cannot withstand jtdicial (Ebotnote cont'd fran previous page) exceptional circunstances in the context of granting a low power exenption.

20 NRC at 1378-79 (enphasis added) . See also id. at 1377.

-14/ 'Ihe Staff and the Omnission's Licensing Ibards are required to make specific findings concerning the safety of a nuclear plant, and they undertake whatever reviews are necessary to enable then to make the requisite findings. We fact that for Shoreham extensive Staff re-view and hearings on contentions admitted by Licensing Boards have been necessary to enable the Staff and Boards to make the findings required mder the regulations, does not constitute the kind of "ex-igent circunstances" which justify the grant of an exenption or the issuance of a license. 'Ihe fact is that Shoreham has been a deeply troubled plant because of LIlCO's own doing. Indeed, as noted above, a recent New York Public Service Omnission ruling confirmed this fact by ruling that over 25% of the cost of the plant cannot go into LIlCO's rate base because it is a result of LIILO misman-agenent. See note 9.

scrutiny. Indeed, the Oxmission itself is playing a part in the "musual l length and cost" of the proceeding by failing to terminate this proceeding sua f sponte, even thotgh two courts and the NRC's own licensing board have made it clear that Shoreham can never be licensed to operate. See note 12 above and Section III below.

3. Imtroper (bnsideration of Prior Staff Practices as Basis for Finding Exigent Circunstances to Support Exenption In purportedly " weighing the equities" and detennining that exigent circtm-stances exist, the Miller Ebard also relied upon alleged Irior Staff practices in pennittirg the issuance of licenses despite noncanpliance with safety regula-tions. See 20 NRC at 1379-80. The information apparently relied tpon by the the Miller Board concernirs such prior Staff practices, however, was not in the evidentiary record and was never available to be cross-examined. The State and Comty had no opportmity to challenge the relevance, similarity or applicabili-ty to the facts at issue in this proceeding of whatever information formed the basis of the Miller Board finding. Basing a decision upon such extra-record in-formation is clear error, and a blatant abuse of due process.

Further, the Miller Board's suggestion that the Staff's behavior in situa-tions involving other utilities or regulations sanehow justifies the issuance of l

a license in the face of LILCO's non-cx2npliance which is at issue in this pro-ceeding is patently absurd. Whatever the Staff may have dme prior, or even subsequent, to the Ocnnission's Shoreham rulings with respect to other plants, and whether such actions were right or wrong, cannot change the Ommission's 7 9-----,- - - , - - -,u.-,-,-,--e -

ruling that in the face of LIICO's nonocmpliance with GX: 17, LIICO nust meet the Section 50.12 standards as enmciated in the my 16 Order. W e Board's unexplained and msupported " finding" that allege 31y " inconsistent" Staff prac-tices constitute an exigent circunstance that justifies granting LIICO's exenp-tion request is without any legal or factual basis and is clearly erroneous.

In CLI-85-1, the Ommission repeated this clear error by once again assignirg "special weight" to irrelevant and clearly improper considerations:

"that LIICO's request for low power authorization cane while NRC practice and policy in the granting of exenptions was in a period of transition, and LIICO was confronted with scne uncertainty regardirg how non-canpliance with GDC-17 were to be reviewed and resolved." CLI-85-1 at 3. First, these Ommission as-sertions are factually incorrect. We sc>-called " period of transition" for BBC practice and policy regarding exenptions did not begin until after LIICO annomced its desire to do scnething mprecedented in NRC history - i.e., oper-ate a plant without an on-site source of AC power as required by GDC 17. In-deed, it seens clear that LIICO's proposal to operate Shorehan in non-cnnpliance with such a significant safety regulation actually caused the NRC to begin its

" transition" of exenption policies and practices, as it becane more and more ob-vious that under longstanding NRC precedent, policy and practice, LIICO's re-quest could not legally be granted. hus, there was no "mcertainty" as to how LIICO's non-canpliance with GDC 17 cnuld lawfully be resolved; the only uncer-i

tainty was how the Miller Board could get around the plain facts, realities, and legal rules and regulations that mandated the denial of LIICO's request.

l l l l

- ---v - -

Clearly, the only way to reach the result desired by LIICO was to deny the comty and State their right to a hearing and to ignore the realities and facts involval in this case.

Second, the Omnission's apparent belief that LIICO's inability to cmply with the regulations should be either rewarded or excused because of NRC ac-tions, its past or future practices, or sme nebulous "mcertainty," is contrary to basic principles of law and logic, and violates the Qmnission's obligation to enforce its regulations and to protect the public's safety.

4. Errors on the Public Interest Issue Omnpound the Prejudice fran Errors on the Exigent Circunstances Issue

'Ihe Miller Board's refusal to consider the State's and Gomty's evidence that the public's interest requires denial of the exenption, magnifies the prej-udice to the State and Comty fran the Board's refusal to consider any equities relating to the grant of an exenption other than those self-serving and largely irrelevant ones asserted by LIICO. 'Ihe evidence that the State and (bmty unsuccessfully sought to introduce went not only to the public interest require-ment of Section 50.12(a), but also denonstrated that the balance of equities underlying the " exigent circunstances" requirenent weighed heavily - if not to-l tally - against the grant of an exenption to LIICO. 'Ihus, the potential $100 million econonic detrimmt to LIICO's ratepayers, the fact that given the stage of the plant's construction granting the exenption muld result in contaminating a plant that will never produce any public benefit, the adverse impact of the exenption on LIIro's ability to service its custaners, the fact that electric l

l I

I l

1 power fran moreham is not needed for at least 10 years, and the public's interest in having safety regulations unifonnly and impartially applied by the ,

NRC, clearly are equities which must be weighed in any reasoned jtrigmmt con-cerning the grant of the extraordinary relief regresented by an exenption. We Miller Board's rulings, however, kept such facts out of the record altogether.

We Omanission's purported "balaneirg of the equities" in CLI-85-1 was no more justifiable than the Miller Board's. Indeed, in sane respects, the Ormis-sion's ruling on this issue was perhaps even more arbitrary and cagricious than the Board's. For exanple, the Omsnission asserted that in balancing equities to find they favored an exenption it "gave no weight to any asserted econanic ad-vantages or disadvantages . . . associated with grant (sic) of the exenption, where these assertions were prenised on assunptions that full power licensing would or muld not be authorized in the future." CLI-85-1, at 4. In fact, CLI-85-1 clearly is based on an assunption that full power oseration will occur.

Ccmnissioner Bernthal said so expressly:

[T]he Oranission has a responsibility to proceed in good faith under the assunption -- and we said this in the order -- that a j plant will eventually operate. For us to do otherwise, I think I is simply not a good faith procedure for this 0mnission to op-erate under, and therefore we should not seek reasons that a plant should not operate -- whether it's the assunption that it eventually may or may not reach full power or for sane other reason.

Transcript of February 12 Ccmnission meetirg, at 14-15 (enphasis supplied) .

! And, even a cursory review of the " equitable considerations" purportedly relied i

upon by the Ommission reveals that implicitly they all are based on the assunption that Shoreham will operate at full power.15] Werefore, the i

l 15] Ebr exanple, there can be no value, " intrinsic" or otherwise, to l

"early discovery of problens during lower power testing" (CLI-65-1 i

(Ebotnote cont'd next page)

M._ _

l suggestion in CLI-65-1 that no assumptions one my or the other were made about i

full power operation is contradicted by the Omnission's own wrds. hat order  ;

cannot be sustained as rational decision-making.M/

Moreover, even if accepted it face value, the Omnission's assertion that its balancing of " equitable considerations" ignored assunptions one my or the other about full power operation, is itself without rational basis or justifica-tion. It is undisputed that low power testing has no purpose, and results in no benefit to the public or to anyone standirx3 alone. Rather, the only purpse of such testing is "to ready the reactor for future operation."E/ h us, the jus-tification for, and the public's purprted interest in, pennitting low power testing pursuant to an exenption can rationally only be looked at in connection with what will follow that testing. Ibw can exigent circunstances be found to (Ebotnote cont'd fran trevious page) at 3) miess the plant is eventually going to operate. Similarly, the finding that "the GT-17 cx2npliance issue arose late in the re-view process when the plant was almost conplete" wighs in favor of granting the exenption, clearly has as its prenise that plant can-pletion means ultimate operation. Id.

g/ In light of the acknowledged Iresunption that full power operation will occur, the Ocmnission's refusal tc consider the adverse econon-ic, environnental, and custaner service impetr of granting the ex-enption if Shorehan does not receive a full power license, regard-less of its purported disregard of LIICO's evidence on the opposite pranise, is a repetition of the Miller Board's denial of the State's and (bmty's right to a fair hearing on the public interest and exi-gent circunstances determinations.

E/ NRC Staff Response to Suffolk Cbmty and State of New York Brief in Support of Appeal of October 29, 1984 ASIB Decision on LIIf0's Ex-enption Request at 35 (Jan. 22,1985).

_ _ _i

4 justify the extraordinary relief of an exenption if the testing to be permitted, which serves no purpse by itself, is looked at in isolation - that is, without

. considerire whether or dien full power operation will occur? 'Ihus, the Omnis-3 sion's refusal to consider any facts relating to Shorehan's full p3wer operation

' i in pur; irting to apply Section 50.12(a) - if taken at face value - acrnpletely invalidates its decision in CLI-85-1. See Guard v. tRC, 753 F.2d at 1146 (NRC may not interget its regulation "as meaning scznething other than what those words, in the context'of a nuclear power plant [ regulation], may rationally con-vey"); ObransE v. 01H, 699 F.2d 1263,1269 (D.C. Cir.1983) (OIN interpreted statute "in a manner that is plainly at odds with the statute's meaning. And it did so conclusorily, without giving any consideration to the contrary view 1his at once vitiates whatever deference would otherwise be due the ad-ministrative intergetation . . . .") .

Finally, the Omnission purported to " place special weight" on "the intrin-sie value to early discovery of probleus during low power testirr;." CLI-85-1 at

3. None of the parties even discussed, much less presented evidence on that matter during the Miller Board proceeding, and the Omnission has absolutely no evidentiary or other basis for " finding" such a "value," giving it "special weight," or finding that it weighs in favor of granting an exenption.l.8/ And, l

g/ Indeed, in discussing a draft of the Febrmry 12 Order with the Q2n-mission, Mr. Malach characterized this portion of the Order as fol-l laws:

l In the middle of the Enge we took accomt of an equity which we had not specifically taken into adcomt of before, that is the value to early discovery of problens during low power testing.

(Ebotnote cont'd nht page) 23 -

l

. . l l

]

l 1

had the State and (bety been given an opportmity, they would have denenstrated that any such so-called "value" is inconsequential. See Affidavit of Dale G.

Bridenbaugh and Gregory C. Minor in Response to Affidavit of John D. Iacnard, Jr., attached hereto. Bis 02mnission action as just as imgroper as all the Miller Board's violations of the Cbmty's and State's right to a fair hear-ing.19/

C. Se Miller Ibard Excluded the Cbtnty's Evidence on the "As Safe As" Issue, While Sisnultaneously Admitting and Relying on LIICO's Evidence on the Same Issue he Miller Board fotnd that LIICO satisfied the Q2mtission's "as safe as" requirenent only by arbitrarily excluding evidence on this issue stianitted by

~

the Cbmty, ignoring evidence in the record that contradicted its conclusion, and then also ignoring the fact that its own findings were on their face incon-sistent with the Q2mnission's "as safe as" standard.

4 (Ebotnote cont'd fran Irevious page)

Feb.12,1985 Tr. at 11 (enphasis added) .

19] his Cbmmission action in CLI-85-1 also violates the NRC's own case law,

'which requires that " W ere a party prosecutes its case on one theory, a trial board cannot decide it on another without having given the oIgonents a fair opportmity to rebut the new theory with argtanent and evidence."

Public Service (b. of Indiana (Mrble Hill Maclear Generating Station, Uhits 1 and 2), 7 NRC 179,186 (1978), citing Niagara Whawk Ibwer Cbrp.,1 NRC 347, 353-55 (1975). Accord, Pennsylvania Ibwer and Light Q3. ,

I (Susquehanna Steam Electric Station, thits 1 and 2),15 NRC 771, 781-82 (1982).

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,,... . . . . , , . - , . . ~ . . .. .._..-- _ ,_.- ..--., .--_ -.--__ . . _ - _ - . - - - . . . _ _ . - . _ _ . , . - . _ , _ .-

Se Miller Board excludai as " irrelevant" evidence subnitted by the Cbtnty which docunented that LIICO's prognsed low power operation muld be quantifiably less safe than with a qualified on-site power source. W e excluded evidence established that a loss of off-site power event during low power operation of Shorehan is seven times more likely to lead to a core vulnerable condition with the prognsed alternate configuration than with a fully qualified source of on-site AC power; and, that the likelihood that Shorehan would experience an event leading to core vulnerability during low power operation is two and a half times greater under the alternate configuration than it would be under a quali-fled configuration.2,,q/

We excluded (btnty testimcny discussed precisely the safety cantarison mandated by the Omnission for the exenption proceeding. It was based on data derived through accepted probabilistic analytical techniques, and there was ab-mlutely no basis for the Board's refusal to admit it into evidence.E/

20/ We referenced testimony of Messrs. Weatherwax and Minor on behalf of the

~

Cotnty was Attachnent 7 to the Nov. 29 Ccmnents. We Board's ruling excitriing it is at Tr. 2857-59.

21/ In denying the admissibility of this evidence, the Miller Ibard stated that a probabilistic risk assessment ("PRA") is not a " proper method to be used in this proceeding." Tr. 2858. h is is incorrect. PRAs have been required by the NRC Staff in licensing Iroceedings, and a PRA perfonned by LIICO has been reviewed by the Staff and as considered at length in liti-gation before an NRC Licensing Ibard and Appeal Board (see AIAB-788, 20 NRC 1102, 1128-32 (1984)). Indeed, the NRC itself uses data obtained through probabilistic techniques in the specific context of reviewing exenption re-quests. See e.g. , 50 Fed. Reg. 16,507 (1985) (Proposed Rule on Exenptions)

("In recent years when probabilistic quantitative assessment techniques have been available, these techniques, alcng with engineering jtrigment, have been used to ensure that the exenption involved was acceptable fran a safety standpoint.") .

We Miller Board also ignored tncontradicted evidence in the record which proved that LIIf0's proposed low power operation would not be as safe as operation with a qualified on-site power source because operating safety mar-gins, and the defense in depth protection inherent in the IRC's regulatory re-quirenents, would be substantially reduced.22/ h us, the evidence showed that:

- the alternate configuration provides less backup and less redtndance because it includes only two potential par sources, whereas the qualified configuration includes three (Tr.1869);

- the alternate systen is vulnerable to events and failures that would incapacitate the entire alternate configura-tion, and sane sources of failure of the normal offsite power systen would also incapacitate the alternate sys+.en, whereas each of the three qualified diesel generators is independent, physically isolatai fran the other two, and fully independent of the offsite power systen (Tr. 359, 1858, 1886, 2354-55, 2437, 2582);

operation of the proposed alternate configuration requires many manual operations in several different locations, giving rise to many opporttnities for time delays and htsnan error, whereas a qualified systen is fully autanatic (Tr.1830, 2534, 2605-609);

22/ he Ocnnission's requirement (19 NRC 1154,1156) that the safety of operation under each configuration be the same is reasonable, and is par-ticularly critical in the context of low power operation, which is at issue l here. We Ctanission's regulations pennitting low power operation without l an approved off-site energency plan (10 CFR $ 50.47(d)) are premised on there being a margin of safety during low power operation that is greater than that present during full power operation. See 47 Fed. Reg. 30,234 l (July 13, 1982). Clearly, any reduction in safety margins during low power l

operation due to the use of the alternate AC power configuration would l

undercut conpletely the rationale underlying 10 CFR $50.47(d), and thus

! render it illegal for the NRC to authorize a low power licenae for l

Shorehan, particularly since the NRC has fotnd that LIICO does not have an l adequate implenentable offsite energency plan.

l l

l

- the alternate configuration is more vulnerable to fire and i explosions but has substantially less fire detectica and fire mitigation equipnent than does a qualified systan i (Tr.1183, 2492, 2591-96);

- the alanns which signal abnormal conditions in the alternate configuration are less conprehensive than those associated with qualified equipnet, and are not annmciated to control roon operators in the control roon as are those associated with quali(ied equipnent (Tr. 2498-2500, 2600-604, 2615) ._2_3_f Apart fran the fact that it excluded highly probative evidence sub-

' mitted by the Cbmty on the "as safe as" issue and ignored other evidence that docunented that operation under the exenption would be less safe, the Miller Board decision is also fatally flawed because it reached flatly contradictory conclusions. On the one hand, it concitried that the "as safe as" standard was met. 20 NRC at 1400. On the other, it con-

' cluded that "there is unquestionably a lesser margin of safety provided by LIICO's alternative power systen" Id,. at 1359. 'Ihere is simply no explanation for these flatly contradictory conclusions. See Guard v.

NRC, 753 F.2d 1144 (D.C. Cir.1985) (agency interiretation cannot be upheld when it does violence to the plain meaning of the provision at issue) .2,,4,/

2_3]

3 'Ihe evidence also established, but the Miller Board fomd " irrelevant,"

that a qualified systen could rovide I energency power within 15 seconds,

! whereas the alternate configuration could require up to 30 minutes to sup-ply power. 20 NRC at 1359-60. There are 55 minutes to restore power be-fore reactor core danage occurs during low power operation. Id. at 1360.

Since the non-safety grade equipnent in the alternate configuration, by l

definition, is less reliable (and therefore more subject to failure) than l safety-grade equipnent, the need to use 30 minutes, as oIposed to 15 sec-onds, of only 55 available minutes to restore power or even to know whether power will be available, clearly evidences a reducal margin of safety.

24/ ~ 'Ihe State and (bmty never suggested in the exenption proceeding that to be "as safe," the alternate 'equipnent needed to be identical in every respect i (Ebotnote cont'd next page) r

'Ihe hi== ion reached the same contradictory and msupportable con-l clusions in CLI-85-1. 'Ihus, despite its acknowledgenent that "the Board 1 identified certain areas of specific cmparison diere cmponents of l LIIro's alternate AC systen may have lesser safety margins than corre-l sponding cmponents of the permanent systen," it als) asserted that the Miller Ibard's finding that operation with the alternate systen would be as safe as operation would have been with a fully qualified system "ap.-

peared" to be " correct." CLI-85-1 at 2. Clearly, operation cannot at the sane time be both "as safe" and "less safe." 'Ihe Omnission's casual

" affirmance" of the Miller Ibard's contradictory findings -- Articularly by means of endorsing a superficial "agpearance" - cannot qualify as ra-tional decision-naking.

Further, the 0:mnission's stenary disnissal of the acknowledged safety reduction inherent in LIIf0's proInsed Shoreham operation is also irrational. 'Ihe "as safe as" standard of protection for the public can-not be reduced to a question of what the Miller Board arbitrarily, and in blatant disregard of facts in evidence, termed " sufficient redmdancy, capacity, testability and reliability," as the 0:mnission did in CLI-85-1 (Ebotnote cont'd frm grevious page) to qualified equipnent. Sme equipnent differences would net impact safe-ty. If differences between the alternate and the qualified systens have an impact upon the reliability, vulnerability to failure, or safety margins of operation, however, those differences are significant and cannot be ig-nored, as the Miller Board did, under the Omnission's "as safe as" stan-dard.

(

e

(at 2). Se fact that LIICO cannot comply with the NRC's safety reguircions, and instead has cone up with ever-dianging Ribe Goldberg substitutes for qualified nuclear grade equipnent, cannot rationally be used to justify any reduction whatsoever in the level of safety provided to the public aromd the Shoreham plant.

Finally, the Omanission's attenpt to " correct" the Miller Board's clear error in denying admission to the (bmty's evidence on the safety issue, by a one sentence disuissal of that evidence, is contrary to the requirenent for reasoned decision-naking. First, the Cimanission's state-ment on its face is illogical: "Suffolk Cbmty's probabilistic risk ---

analysis tends to confinn rather than contradict the essential safety equivalence of LIICO's alternate PC systen." Id. at 3. Had the Cbttnis-sion chosen to consider fairly the proffered evidence, it would know that it states precisely the opposite -- operation under the alternate config-uration would be seven times less safe than operation with a qualified systen. Second, the Omunission's "re-interpretation" of the plain facts set forth in the proferred testimony, clearly has no basis in the eviden-tiary record. That evidence as excluded by the Miller Board and there are no facts properly before the Om nission that could be used to reinteriret or contradict the facts set forth in the (bmty's evidence.

Third, the Omsnission's misinterpretation or revision of the Cbmty's proferred testimony, by concluiing that it means precisely the opposite of what it says, is a further denial of the Cbunty's due process right to present evidence on material issues. We Cbtnty's witnesses were never even given an opportmity to present, much less explain, the facts set -

forth in their pre-filed testimcny. Clearly, the (btnty and its witness-es are entitlei to explain for thanselves what their own testimcny means, without having the (butission bar the Cbtmty's explanation, and instead I adopt the Omnission's unilateral misintersretation as the basis of an exenption decision.

D. 'Ihe Reasoning and Iblings in CLI-65-1 Would Not Withstand Judicial Scrutiny For all the reasons discussed in thisSection I, the State and Cbtn-i ty sttunit that a (burt would not accept or defer to CLI-85-1 cr its rea-

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soning 'as rectifying or rendering harmicas the Miller Board's errors. A Court must " ensure 'both that [the agency] has adequately considered all relevant factors . . . and that it has denonstrated "a rational connec-l tion between the facts fotnd and the choices male."'" Independent U.S.

Tanker CWners Omanittee v. Inwis, . 690 F.2d 908, 922 (D.C. Cir.1982) (ci-tations cznitted) . 'Ihus, despite the normal rule that an agency is enti-tied to a certain anomt of deference, "a reviewing court does not serve i

as a mere rtbber stamp for agency decisions." Imad Industries Ass'n Inc.

v. EPA, 647 F.2d 1130, 1145 (D.C. Cir.) , cert. denied, 449 U.S. 1042 (1980). Accord, Anerican Paper Institute v. Train, 543 F.2d 328, 338 (D.C. Cir.), cert. disnissed, 429 U.S. %7 (1976) . Clearly, in this case, as in Guard v. BRC, the reasoning in CLI-85-1 cannot be accordai any deference and would be reversed upon Cburt review. See Federal 1

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Elec+irwt Oman. v. Denocratic Senatorial Ca;npaign Omn., 454 U.S. 27, 37-(1981) ("the thoroughness, validity, and consistency of an agency's rea-soning are factors that bear on the amomt of deference to be given an agency's ruling"); Burlington Truck Lines, Inc. v. Iktited States, 371 U.S.156,167-68 (1%2) (agency order reversed because there were "no findings and no analysis . . . to justify the choice made, no indication of the basis on Wtich the Omnission exercised its expert discretion

. . . . Ihe agency must make findings that support its decision, and those findings must be supported by sit >stantial evidence."); SEC v.

Chenery Corp., 318 U.S. 80, 94 (1943) (agency action "cannot be upheld merely because findings might have been made and considerations disclosed which would justify its order . . . . 'Ihere must be such a responsible finding"); Obrenski v. OEM, 699 F.2d at 1269 (the rule of jtrlicial defer-ence "asstanes an adequately articulated administrative decision inter-preting the relevant statutory law within a range of reasonableness . . . -

. Ihe jtzlicial role is not so limited Qtere . . . the agency intergreta-tion under review is poorly reasoned and eminently out of accord.") .

II. A Full Review of the Merits of the Cbtnty's and State's Evidence and Argunents Can Only Result in a Denial of LIICO's Exeraption Request -

We demmstrate below that if the Cbtnty's and State's evidace that.

was excitzled by the Miller Ebard were fairly considered by the Omnis-sion, it would be impossible to make the findings necessary to grant an exenption under $50.12(a) .

A. It Is Impssible to Find that Granting the Exenption leuld Be In the Public Interest As noted, the only evidence relied upon by the Miller Ibard in find-ing that granting the exenption would be in the public interest was LIICO's testimcmy about two alleged econcmic benefits to rateplers, both prenised on earlier full pwer operation of Shoreham. We (btnty and State evidence tMt was excitried, however, established not only that eco-ncmic hann to ratepayers would result if the exenption were granted and full pwer operation did not occur, but also that econcmic and non-econcmic hann to the public would result regardless whether full power operation occurs. hus, even if the (%mnission were to ignore all the public interest-relatei evidence that was prenised on either the occur-rence or non-occurrence of full pwer operation (as it did, improperly, in its review preceding CLI-85-1), an affirmative finding that granting the exenption would benefit the public could not be made. W e evidence which would renain, if thnt relating to the occurrence of full power operation were ignored, shows only the opposite: granting the exenption would be contrary to the public's interest.

Moreover, if all the evidence were considered, the affirmative pub-lic interest finding required by Section 50.12(a) could not be made ei-ther. LIICO's so-called public benefits, even asstaning arguendo that full power operation would occur, are wholly speculative; whether they would materialize at all, ard their magnitide if they did, is entirely dependent on the econany, ratenaking decisions, international politics, 4

and oil Iroduction and availability. On the other hand, the Cbmty and State evidence dancmstrates several definite harms which muld result di-rectly and innediately fran the low power operation that muld be pennit-ted by the grant of the exenption. %ose harms are not speculative.

Scene would materialize only if it were assuned arguendo that full power operation would not occur (e.g., decontamination expenses); however, given that assunption, there is no question that they will occur. Others will ocur innediately (e.g., adverse impact on custaner service)

• ether or not full power operation is ever authorized. Se non-speculative harm to the public identified by the Cbunty and State, whose views on the pub-lic's interest are, by the NRC's own prior admission, entitled to " great weight," prohibits a findire that granting the exenption would be in the public interest.

B. It Is Impassible to Find hat Were are Exigent Circunstances h at Justify the Extraordinary Relief of an Exenption in this Case Again, a fair consideration of all the sutxnitted evidence concerning the weighing of equities to determine whether exigent circunstances exist, requires a denial of the exenption request in this case.

First, the fact that granting an exenption muld result in contami-nation of a plant that is likely never to produce any public benefit be-cause it cannot be authorized to operate at power levels higher that 5 percent, can only weigh against a finding that an exenption should be granted. We fact that Shoreham will Iroduce no public benefit, which

- w-. _ _ _ _

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l was in the (bmty and State evidence excitded by the Miller &mrd, was recently ccmfinned in the April 17, 1985 ASIB decision on emergency plan-ning, which fotnd that LIICO does not have an effective or implenentable l

offsite emergency plan. See Section III below. Wat finding is an abso-lute bar to the issuance of a full pwer license, and thus precitdes the possibility that shoreham will ever produce electricity, the only con-ceivable public benefit that could weigh against the adverse impct of the contamination and costs of low power operation. he Chmtission can-not ignore this fact, the implications of which clearly outweigh any pri-vate gain LIICO might posit in favor of granting the exenption.

Second, .the fact that electric power frcm Shoreham is not needed for at least ten years, which is uncontroverted in the evidentiary record, can only be found to weigh heavily against a finding that exigent ciretm-stances exist to justify the grant of an exenption. What conceivable

" benefit" or " exigent ciretmstances" could possibly justify the rush to contaminate an unneeded plant which does not conply with the safety regu-lations applicable to low power (GDC 17), and which cannot saticfy full power emergency planning requirenents? 'Ihere is none, nor has any ever l

been suggested.

Wird, the Cbmty and State evidence that granting the exenption would have a serious adverse impct on LIICO's ability to service its customers also can only weigh against a finding that exigent ciretastanc-es exist to justify the grant of an exenption.

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None of these three " equities" Qtich weigh against the grant of an exenption is comtered anywhere in the evidentiary record. In light of then, there is no basis for finding the existence of exigent circunstanc-es to justify the extraordinary relief request by LIICO.

Furthermore, the evidence concerning LIICO's alleged good faith ef-forts to conply with GDC 17 cannot be cited to justify an exenption.

Clearly, the 03mty and State believe, and their excitried evidence established, that because the need for the exenption is solely a result of LIICO's om failures, there is no basis to remrd the utility by granting it extraordinary relief. It is just as clear that LIICO believes that its efforts do merit relief. Even giving LIIf0 the benefit of every do@t, however, a review of both the LIICO evidence and that of the Comty and State on this subject cannot support an affirmative find-ing that LIICO's efforts are so extraordinary that they justify an exenp-tion. 'Ihus, even if gratuitously viewd in the light most favorable to LIICO, which is not the proper standard since LIICO has the burden of proof, the testimony on this " equity" at best is a " wash." It cannot be used to tip the scales in favor of an exenption.

None of the other so-called " equities" which the Miller Board and the Ozmission in CLI-85-1 fomd to justify the grant of an exenption constitutes a proper or legitimate consideration in an exenption context.

A fair decision-naker could not find that they justify the grant of an exenption even standing alone; when "balancal" against all the equities which mandate the denial of an exenption, there is no question that an exigent circunstance finding in favor of LIICO is imgessible. l

'Ihus, the fact that despite big expenditures of mcney and lergthy adjuiicatory proceedings LIICO still is unable to emply with the NRC's safety regulations cannot be said to justify a decision excusing LIIc0 fran such empliance. 'Ihe Miller Board's and the 02mnission's imIroper reliance upon LIICO's complaints about the length and cost of the Shoreham proceeding clearly cannot support an exigent circunstances find-ing. 'Ihe NRC Staff agreed that consideration of such matters by the Miller Board was improper.

Similarly, the Miller Board's and the Omnission's improper consid-eration of alleged prior Staff practices, " transitions" or "mcertainties" in permitting the issuance of licenses despite noncoupliance with NRC regulations, cannot support a fair or rational finding of exigent circunstances to justify an exenption in this case.

Whatever " facts" the Miller Board relied upon were never in the eviaenti-ary record and were never subject to the adjudicatory process. Moreover, the treatment of other license applicants, even if different fran that afforded to LIICO, has abelutely no relevance to this proceedirs where the safety of the citizens of Suffolk Cbmty is at stake. Prior Staff mistakes or failures to enforce Ocnnission regulations or undefined

" uncertainties" relating to other plants cannot be used to excuse LIIf0's i

failure to conply with an important safety regulation.

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. _ - - - , ._..,,.,__._v -.,_--_,,.--.--4 _. , , , _ _ . - . _ _ . . _ . - . _ _ . , _ ,4

he Miller Board's finding that "the granting of a low power exenp-tion would send a positive signal to the capital markets" constituted "an equity" weighing in favor of the exenption is absolutely prohibited by law. See Power Reactor Developnent (b. v. International Uhion of Electrical, Radio & Machine Workers, 367 U.S. 3%, 415 (1%1). he omn.-

mission's assertion in CLI-85-1 that it did not rely on this plainly im-proper consideration (at 4) is belied by its ultimate conclusion. Were is no legitimate basis for granting LIICO an exenption, so the only raa-son for the Cimnission's decision appears to be sympathy with LIICO's search for a " signal" to Wall Street. _

Finally, any suggestion that early discovery of probleus during low power testing constitutes an " equity" which weighs in favor of granting an exenption -- even thotx3h the Miller Board did not rely upon such an equity in its decision -- nust also be rejected for the reasons discussed in Section I.B.4 above. here is no evidentiary or other basis for find-ing that such an " equity" exists or that it weighs in favor of granting an exenption. Indeed, as denenstrated in the attached Affidavit of Dale G. Bridenbaugh and Gregory C. Minor, the opposite is true.

C. It Is Inpossible to Find 'Ihat Operation With T. Tim's Alternate AC Power Configuration Would Be As Safe As Operaticn With a Fully Qualifed AC Pdwer Source Even based upon the evidence it admitted into the record, the Miller Board was constrained to. find that T. Tim's proposed node of operating Shoreham would provide a " lesser margin of safety" than operation with a fully qualified AC power source. In light of the ammission's May 16 -

Order establishing the "as safe as" standard, this Miller Board finding alone requires the reversal of the exenption decision. Wreover, if the excluded evidence subnitted by the County concerning the relative safety of operation were considered, it would clearly be inpossible for the Otzn- _

mission to find that the "as safe as" standard is satisfied in this case.

The excluded evidence denenstrates that operation with the proposed alternate configuration would be quantifiably less safe than operation with a qualified system. A fair review of all the subnitted evidence en the "as safe as" issue could result cnly in a finding that the exenption request nust be denied.

III. Recent Events Uhderscore the Necessity for Denying T. Tim's Exenption Request On April 22, 1985, the NRC Licensing Board charged with review of T. Tim's proposed offsite emergency plan for Shoreham rendered a partial initialdecision.2,5/ 'Ihe Board held that "the LII4D Plan cannot and will 2y Partial Initial Decision on Dnergency Planning, IEP-85-12, dated April 17, 1985.

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not be implemented as required by regulation."21/ Wis ruling consti-tutes an absolute bar to the issuance of a full power license for operation of Shorehan, and confirms the similar rulings by the New York State Sugrene (burt and the U.S. District (burt for the Eastern Di, strict of New York concerning the illegality of LIICO's proposed energency plan and the proEriety of Suffolk (bmty's position that an energency plan cannot be implenented to protect adequately the health and safety of its citizens.2,,7/

Re significance of these consistent findings, which have now been rendered in every available forun, is clear: there is no basis or justi-fication for authorizing low power operation of Shoreham, with its atten-dant irradiation and contamination of the reactor and its fuel, when the Shorehm plant cannot be authorized to operate at any higher power levels and will not produce electricity. See attached Affidavit of Dale G.

Bridenbatgh and Gregory C. Minor.

tere is no conceivable basis for the Chunission at this point to persist in its view that the denial of a full pur license for Shoreham is "too speculative" to merit consideration. See e.g. , CLI-83-17, 17 NRC j

2 Id. at 426.

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7 See Cucano v. LIICO, Civ. tb. 84-4616, slip op. (N.Y. Sup. Ct. Feb. 20, 1985); Citizens for an Orderly Ehergy Iblicy, Inc. v. Cotrity of Suffolk, No. CV-83-4966, slip op. (E.D.N.Y. March 18, 1985). te New York Suprene Court's opinion es attached to the Suffolk Cbmty and State of New York Reneel of Request for NRC Supplanentation of the Shorehan FEIS as Required l by NEPA, which was filmi with the Ctmnission on tetrch 4, 1985.

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1032, 1033-34 (1983); CLI-84-9, 19 NRC 1323, 1327 (1984); CLI-85-1 at 4-5; Order dated February 14, 1985 (unpublished); letter dated Ap,ril 18, 1985 to Herbert H. Brown frm Sanuel Chilk. Se Ocmnission nust recog-nize reality: every legal avenue for full power operation of Stc,reham -

under the NRC's regulations - i.e., an inplementable State, Cbunty, or utility offsite emergency plan - has now been eliminated. Se mly con-ceivable " speculation" on the subject is whether LIILD can devise a way to have the New York law, federal law, the U.S. (bnstitution, and the NRC's regulations danged to pew.t LIICO to get around the fact that what it desires is illegal.

Mus, in ruling cn LIIID's exenpticn request this Cbmmission cannot ignore the findings of its own licensing board and the courts. In the face of those findings, the Ctanission cannot find that low power operation of the Shoreham plant would te in the public interest, or that there exist any " exigent circuastances" other tian those that weigh f* against the grant of an exemption to authorize low power operation. We s' Licensing Board's emergency planning decision confinns and makes even more conpelling the public interest and exigent circumstances evidence e,ubnitted by the County and State to the Miller Board, all of which can

- only support the denial of the exenption. It is time for the Ccmnission 9

finally to acknowledge that the assertions and " reasoning" contained in paragraph 4 of CLI-85-1 are contrary to fact.

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4 Moreover, in light of the recent mergency planning decision, and those of the state and federal courts, this Ommission cannot fashion any argunent to sidestep the mandate of the National Ehvircnnetal Policy Act (NEPA). 'Ib grant an exenption in the face of the NRC's clear violation of NEPA would be contrary to the Section 50.12(a) requirenent that an ex-anption must be " authorized by law." 'Iherefore, before low power operation can lawfully even be considered, the NRC must supplanent the Shorehm EIS to analyze the environnental costs of such an action and to weigh those costs against the conplete lack of benefit resulting fran such operation. Accordirgly, the Cbtmty ani State reiterate their danand that the Omnission take a hard look at the realities of the situation at Shorehen, deny the exenption, and, if the Shoreham license proceeding is to ccntinue, supplanent the Shoreham EIS.

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4 IV. Conclusion For the foregoing reasons, the Ommission should reconsider CLI-85-1 and reverse the Miller Board's decision Mtich fomd that LIICO had satisfied the requirenents for an exenption under Section 50.12(a) .

Respectfully subnitted, Martin Bradley Ashare Suffolk Comty Department of Iaw Veterans Memorial Highway liauppauge, New York 11788 7

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He @rt H. Brown Lawrence Coe Ian er Karla J. Iatsche Michael S. Miller KIRKPATRICK & IOCMiART 1900 M Street, N.W.

Washington, D.C. 20006 Attorneys for Suffolk (bmty Fabian G. Palonino Special Cbmsel to the Governor of the State of New York Executive Chamber, Poon 229 Capitol Railding Albany, New York 12224 Attorney for Mario M. Cuano, Governor of the State of New York Dated: May 7, 1985