ML20198K278

Responds to Dl Schlemmer 860204 2.206 Petition Requesting Closure of Facility & Independent Verification.Petition Should Be Denied

ML20198K278
Person / Time
Site:	Perry
Issue date:	02/18/1986
From:	Glasspiegel J CLEVELAND ELECTRIC ILLUMINATING CO., SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	Asselstine J, Palladino N, Roberts T NRC COMMISSION (OCM)
Shared Package
ML20198K265	List: IR 05000440/1985084 ML20198K262 ML20198K278 ML20198K286
References
FOIA-86-254 2.206, NUDOCS 8606030386
Download: ML20198K278 (14)

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February 18, 1986 Chairman Nunzio J. Palladino Commissioner James K. Asselstine U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C. 20555 Washington, D.C. 20555 Commissioner Thomas M. Roberts Commissioner Frederick M. Bernthal U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C. 20555 Washington, D.C. 20555 Commissioner Lando W. Zech, Jr.

U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re: The Cleveland Electric Illuminating Co.

(Perry Nuclear Power Plant Units 1 and 2)-

Docket Nos. 50-440 and 50-441

Dear Commissioners:

This letter is in response to the February 4, 1986 peti-tion of Mr. Donald L. Schlemmer, submitted on behalf of Western Reserve Alliance ("WRA") pursuant to 10 C.F.R. $ 2.206, regard-ing the Ferry Nuclear Power Plant (" Perry"). WRA's Petition requests the NRC to take the following actions:

1. Require the complete and permanent closure of the Perry nuclear plants because of the Perry plants' inadequate seismic design.

CEI and the NRC set the standards for the Perry plants' ability to withstand gravita-tional forces well-below the actual gravi '

tational forces that the plants are being .

subjected to during actual earthquakes.

This was clearly demonstrated during the earthquake of January 31, 1986.

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SHAw, PITMAN POTT 5 & TROWBRIDGE

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Chairman Nunzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 2

2. Require an independent design and construc-tion verification program (IDVCP) to assess the integrity of the Perry One and Perry Two site quality assurance (QA) programs and i ts implementation because the Cleveland Illuminating Company [ sic] (CEI) and its contractors have failed to imple-ment an acceptable design and construction program for the Perry One and Perry Two nuclear plants that meet the requirements of 10 C.F.R. 50, Appendix B.

3. Review the Application before the Securi-ties and Exchange Commission (SEC) of Cen-terior Energy Corporation (CEC) (formerly North Holding Company), which seeks, by its -

application, the SEC's approval to acquire all of the outstanding shares of the Cleveland Electric Illuminating Company (CEI) and Toledo Edison (TE), Ohio corpora- '

tions, and approval of the related mergers by which the transactions will be effectu-ated."

For the reasons discussed below, WRA's 5 2.206 Petition is without basis and should be denied in all respects.

I. Section 2.206 Requirements WRA's Petition ic filed under 6 2.206 of the Commission's regulations. Section 2.206 permits any person to file a re-quest for the NRC Staffl/ to institute a proceeding pursuant to 5 2.202 to modify, suspend or revoke a license,.or for such 1/ Section 2.206 provides for requests to be "addres' sed to the Director of Nuclear Reactor Regulation, Director of Nuclear Material Safety and Safeguards, the Director, Office of Inspec-tion and Enforcement, as appropriate." See 10 C.F.R.

$ 2.206(a). Thus, WRA's Petition should not have been addressed to NRC Commissioners in the first instance.

Si Aw, Pn TMAN. POTTS 6 TROWBRIDGE

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Chairman Munzio J. Palladino Commissioner Thomas M. Roberts  ;

Commissioner James K. Asselstine l Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 3 other action as may be proper. 10 C.F.R. $ 2.206(a). Section 2.206(a) states that "[t]he requests shall specify.the action requested and set forth the facts that constitute the basis for the request." Id. (emphasis added).

As demonstrated below, WRA's Petition is grounded on unsupported, unspecified assertions. The Petition fails to set forth " facts that constitute the basis for the request," as re-quired by 10 C.F.R. 5 2.206. Nor does the Petition provide a basis to believe that there are violations of Commission reg-ulations, potentially hazardous conditions, or other facts which would constitute sufficient grounds for the Staff to in-stitute a $ 2.202 proceeding.

Further, petitions filed pursuant to 5 2.206 which are grounded on late-filed allegations are governed by the Commis-sion's Statement ~of Policy: Handling of Late Allegations, 50 Fed. Reg. 11030 (1985). See Union Electric Company (Callaway Plant, Unit 1), DD-85-7, 21 N.R.C. 1552 (1985). As discussed below, WRA's late-filed allegations, set forth in Secti'on III of the Petition, were not promptly . raised.2/ The allegations raise issues that "are not material to any licensing decision or which on their face or after initial inquiry are determined to be frivolous or too vague or general in nature to provide sufficient information for the staff to investigate,"3/ as well as issues that are not "new in the sense of raising a matter not previously considered or tending to corroborate previously received but not yet resolved allegations."4/ Thus, WRA's 2/ See 50 Fed. Reg. at 11031.

3/ Id. See Attachment 1, Exhibit A, items 1%14, 18-22, 24-28, 30, 32-33, 35, 38-39, 41-47 (raising frivolous, vague or general allegations without sufficient information to investi-gate); items 23, 29, 34, 37 (raising commercial or other issues unrelated to licensing).

4/ Id. See Attachment 1, Exhibit A, items 15-17, 31, 36, 40, 48 (raising issues that were previously investigated and re-solved by CEI and the NRC).

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SHAw, PITTM AN. PoTTs 6. TRoWBRIDGE

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Chairman Nunzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 4 allegations are neither material nor new, as defined by the Commission's Statement of Policy, and therefore do not merit further review.

~

Even if the Staff were to apply the screening criteria for further review of new and material issues, set forth in the Statement of Policy, for the reasons discussed below and in Attachment I hereto, the allegations are not " correct," under screening criterion No. 1.5/ Similarly, for the reasons set forth in CEI's responses to WRA's allegations, WRA has failed to raise a significant safety concern. Accordingly, there is no basis for the Staff to give " prompt consideration of the al-legation recognizing the public interest in avoiding undue delay," under screening criterion No. 2 of the Policy State-ment. p/

Thus, for the reasons set forth in this letter, WRA has failed to satisfy the applicable Commission regulations and Policy Statement governing 5 2.206 petitions and late-filed al-legations. ,

5/ Under screening criterion No. 1 of the Statement of Poli-cy, the Staff is to assess "[t]he likelihood that the allega-tion is correct, taking into consideration all available information including the apparent level of knowledge, exper- l tise and reliability of the individual submitting the allega-tion in terms of the allegation submitted and the possible ex-istence of more credible contrary information." 50 Fed. Reg.

at 11031. WRA's bare, unsupported, unsworn allegations do not even attempt to establish the level of knowledge, expertise and reliability of the individual submitting the allegations. As i

discussed below, WRA's failure to submit timely its allegations further calls into question its credibility in raising allega-tions at this late date. The extensive CEI and NRC information available, as identified in the attached affidavit of Timothy A. Boss, constitutes "more credible contrary information," id. ,

demonstrating that WRA's allegations are not correct.

p/ 50 Fed. Reg. at 11032.

SHAw, PITTMAN, POTTs & TmowsRIDGE l I

Chairman Nunzio J. Palladino l Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 5 II. Seismic Design WRA makes a number of unsupported claims with respect to an earthquake that occurred in the vicinity of the Perry Plant on January 31, 1986. WRA asserts the following:

1. The Perry plants were designed to withstand extremely minimal gravitational forces (.15). The earthquake of January 31, 1986 subjected the Perry plants to substantially greater gravitational forces than the plants were designed to withstand (.19; .23; .25).

2. The epicenter of the January 31, 1985 [ sic] earth-quake was extremely close to the Perry nuclear plants.

3. The Perry plant site is literally on a fault line.

4.

CEI filled scar.

a glacial the fault line with cement and said it was

5. CEI built the plant at this dangerous location over the objections of consumer groups who raised the earthquake and fault line issue most vigorously.

6. A fault line can move at any time no matter how new or old.

7. Because of the vibration and ground acceleration, the soil conditions at the Perry site subject the plant to greater degrees of gravitational forces than would occur in other parts of the world.

Petition at 4 n.2.

statement:

The Petition also contains the following The Perry nuclear plants are built on a fault line that WRA contends is not a glacial scar. WRA contends that there will be more earthquakes of a greater magnitude.

The epicenters of these quakes may be even closer to the Perry plants. The current

SHAw, PITTMAN, PoTTs & TaowaRIDGE

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Chairman Nunzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 6 de. lay in determining what the devices are that measure the gravitional forces is in-dicative of the shoddy attitude with which CEI constructed these plants. The current reports that these devices can only be read and interpreted by the vendors is most dis-turbing. Also, the delay in getting this information makes a reasonable person highly suspicious of the credibility of both CEI and the NRC.

Petition at 6. The Petition contains no technical support of justification for these assertions, which are without basis.

CEI and its geological, seismological, structural and equipment consultants have completed a detailed analysis of the January 31, 1986 earthquake, including an analysis of the im-pact of the earthquake on Perry plant structures and components and on the design capability of the Plant. A copy of CEI's report on the results of its reviews has been filed with the NRC Staff and placed on the Perry docket. See Seismic Event Evaluation Report, Perry Nuclear Power Plant, Docket Nos. .

50-440; 50-441, The Cleveland Electric Illuminating Company (February 1986) (" Seismic Event Evaluation"). CEI orally presented its findings to the NRC Staff on February 11, 1986, and to the Advisory Committee on Reactor Safeguards on February 12 and 13.

As set forth in CEI's Seismic Event Evaluation, the earth-quake

1) did not adversely affect the plant structures, systems or components,

2) was within the design capability of the Perry Nuclear Power Plant, and '

(3) does not change the licensing basis or conclusions regarding the site geolo-gy, seismology or design basis earth-quake. ,

l I

SHaw, PITTMAN. PoTTs 6. TnowantoGE

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4 Chairman thanzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 7 Seismic Event Evaluation at $ 1.0. As discussed in CEI's report, the earthquake was of smaller magnitude (4.96, based on USGS data) and intensity (VI, based on preliminary evaluation of survey data) than the postulated earthquake used as the basis for the plant's seismic design (intensity 5.3 + .5 and magnitude VII). The many safety and non-safety related systems which were operating or energized at the time of the earthquake responded in accordance with this design. Extensive plant walkdowns and inspections revealed no structural or equipment damage. And while certain recorded response spectra exceeded the design response spectra in the high frequency range, ex-coedances are expected given the analytical methods of Regula-tory Guide 1.60 and are of no engineering significance.

WRA's alleged " fault line" on the Perry site that CEI

" filled in . . . with cement and said it was a glacial scar" was examined in detail both at the construction permit stage and at the operating license stage. During the site excava-tion, CEI discovered and reported to the NRC geologic anomalies consisting of a series of minor folds and shallow faults.

Based on thorough examination, CEI, the NRC Staff, and geolo-gists from the USGS and the Corps of Engineers unanimously con-cluded that these geologic structures were nontectonic and are unrelated to any deep-seated crustal origin. Therefore, we conclude that these features pose no safety threat to the facility.

Supp. 3 to the NRC Staff Safety Evaluation (November 1975).

The Atomic Safety and Licensing Appeal Board agreed, finding that the geologic anomalies (a) are non-tectonic in origin, (b)'are the result of glacial activity, and (c) cannot be expected to cause earthquakes.

Cleveland Electric Illuminating Co. (Perry Nuclear Power Plant), ALAB-449, 6 N.R.C. 884 (1977). The Staff has restated this conclusion in the operating license stage Safety Evalua- ,

tion report, NUREG-0887 (May 1982) at 2 2-23. The January 31 earthquake provides nothing which would change this

SHAw, PsTTMAN, PoTTs 6. Taowsmioot

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Chairman Nunzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 8 conclusion. Certainly, WRA has pointed to no basis for challenging the scientific and technical opinions reached by CEI, its consultants, the NRC Staff, the USGS, the Corps of En-gineers and the Atomic Safety and Licensing Appeal Board.7/

III. Integrity of the Perry Quality Assurance Program WRA's last-minute allegations regarding the Perry con-struction quality assurance / quality control ("QA/QC") program (Petition at 6-11) are untimely and without any basis.Section III of the Petition states that it contains "a list of allega-tions and documentation 8/ given to GAP 9/ by various whis-tieblower., through the course of its investigations regarding the Perry plants." Petition at 6 (emphasis added). Thus, WRA does not even attempt to demonstrate that it has satisfied its duty under the Commission's Statement of Policy to bring its 7/ See Public Service Company of Indiana, Inc. (Marble Hill Nuclear Generating Station, Units 1 and 2), DD-79-21, 10 N.R.C.

717, 719 n.3 (1979) (parties must be prevented from using 10 C.F.R. 5 2.206 procedures as a vehicle for reconsideration of.

issues previously decided).

8/ Applicants obtained a copy of WRA's Petition after reading about it in Ohio newspapers and requesting a copy from Mr.

Schlemmer and from the NRC Staff. Applicants received copies of Mr. Schlemmer's letter from Mr. Schlemmer and from the Staff. The copies received contain no " documentation" other  ;

than Mr. Schlemmer's ll-page letter. Although the letter contains references to " affidavits" (Petition at 7) and to i

" documentation" submitted by the Government Accountability l Project (" GAP") (Petition at 4 n.1), Applicants have no knowl-edge concerning any such affidavits or documentation.

9/ The Petition states that " GAP has been advising'and as-sisting WRA in regard to dealing with the numerous allegations  ;

made by the large number of whistleblowers that contacted WRA," 1 and that GAP is playing "the lead role . . . in investigating and submitting the allegations and documentation regarding the Perry site." Petition at 4 & n.l.

i SHAw, PITT MAN, PoTTs & TnowsRIDGE  !

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Chairman Nunzio J. Palladino l Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 9 purported safety concerns "promptly to the attention of the applicant or licensee," or "directly to the NRC."10/ Nor are the allegations " specific and documented to the fullest extent possible,"11/ as the Policy Statement requires. Indeed, as noted above, many of the allegations are so vague as to pre-clude any but the most general response.

Last year, after reading press reports discussing allega-tions by Mr. Schlemmer, CEI's " Call For Quality" Ombudsman 12/

wrote to Mr. Schlemmer on July 9, 1985, to request details con-cerning the allegations. CEI's Ombudsman stressed the impor-tance of examining the claimed defects in the construction of the plant, and emphasized that it was not necessary for WRA to identify the individuals who may have provided information to WRA. See Attachment I and Exhibit "C" hereto. Mr. Schlemmer and Ms. Billie Pirner Garde of GAP responded to the Ombudsman's letter but refused to supply further details. See Attachment 1, Exhibits "D" and "E".

The Ombudsman made a second request to 1, Mr. Schlemmer Exhibit and Ms. Garde for information (see Attachment "F" hereto), but received no response. '

10/ 50 Fed. Reg. at 11031, 11/ Id.

12/ CEI's Call for Quality program, instituted in 1984, en-courages workers to contact the Perry Plant Ombudsman on a con-fidential basis if the workers are aware of any conditions which they believe might affect the safety of the plant. See Attachment "1" and Exhibit "F" hereto (Affidavit and letter of Timothy A. Boss). The Call For Quality Program was instituted prior to the Commission's official endorsement of such programs in Statement of Policy: Handling of Late Allegations'. See 50 Fed. Reg. at 11031 n.1. ("The Commission encourages the estab-lishment of programs by utilities for the purpose of identi-fying and resolving allegations affecting safety in a timely manner as design and constructior, of a nuclear facility pro-ceeds.")

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SHAw. PITTMAN, PoTTs & TROWBRIDGE

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i Chairman Nunzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 10 Thus, the timing of WRA's Petition is highly suspect and seems to be little more than a thinly disguised attempt to delay fuel load.  !

Since WRA and GAP have apparently known of  !

allegations concerning the Perry construction program for some j time, there is no justification for their failure to have dis-closed any concerns to CEI and the Commission prior to the com-pletion of construction, so that CEI and the NRC-could have in-vestigated the concerns and taken any necessary corrective j action.

Such considerations are the basis for the Commission's '

requirement in its Statement of Policy that allegations be proinptly disclosed to the applicant or to the NRC.13/

The WRA/ GAP excuse for failing to disclose safety concerns to CEI, i.e., that management cannot be trusted to respond in good faith to safety concerns, see Attachment 1, Exhibits D and E,

is unsupported by facts supplied by WRA in its Petition and is belied by the record of management responsiveness and con-cern for quality at Perry. Moreover, the Atomic Safety and Li-censing Board, after hearing extensive testimony on CEI's qual-ity assurance program, concluded that the program "has prevented, and will continue to prevent, unsafe conditions at the plant."14/

This well-founded conclusion contradicts WRA's unsupported allegations concerning CEI's management of hte QA/QC program at Perry.

For these reasons, and for the reasons discussed in Sec-tion I of this letter, and in Attachment I and Exhibit A hereto, the allegations in WRA's Petition (1) are not timely; (2) f ail to raise material or new issues; and (3) are incor-rect, and fail to raise safety issues. Thus, contrary to WRA's assertion at pages 1, 5 of the Petition, there is no basis for the Staff to require a further design and construction re-view 15/ to assess the integrity of the Perry QA/QC program.

13/ 50 Fed. Reg. at 11031 & n.1.

14/ See LBP-83-77, 18 N.R.C. 1365 (1983), affirmed ALAB-802, 21 N.R.C. 490 (1985).  !

15/ See Attachment 1, Exhibit A, items 1, 2, 21-22, 38, 41, 43 '

discussing examples of the extensive, multi-layered CEI and NRC '

(Continued next page)  ;

SHAw. PITTMAN. PoTTs & TnowansoGE

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Chairman Nunzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 11 IV. 10 CFR Part 140 The third part of WRA's letter requests NRC to review the application pending before the Securities and Exchange Commis-sion to penmit the formation of a holding company (Centerior Energy Corporation) which will own all the common stock of CEI and The Toledo Edison Company (TE). WRA argues without support that the proposed application between CEI and TE "will result in the violation of 10 CFR Part 140."

CEI has kept the NRC Staff fully informed as to the pro-posed CEI-TE affiliation. By letters dated August 14, 1985, November 13, 1985, January 8, 1986, January 31, 1986 and February 13, 1986, we have forwarded to the NRC the relevant CEI and TE filings with the SEC. By letter to the NRC Staff dated December 20, 1985, CEI further explained how the proposed affiliation would affect the management of the Perry plant.

WRA's allegations lack both specifics and an awareness of the requirements of 10 CFR Part 140. These regulations re-quire, for an operating nuclear power reactor, that the licensee maintain $160 million in financial protection plus secondary financial protection in the form of private liability insurance available under an industry retrospective rating plan providing for deferred premiums. CEI has in force liability insurance policies ( American Nuclear Insurers Policy No. NF 291 and Mutual Atomic Energy Liability Underwriters Policy No. MF 124) which provide for $160 million in financial protection.

An indemnity agreement with the NRC (No. B-98) was issued on March 7, 1985 and will be amended on the date the operating license is issued. CEI has also submitted to the NRC Certifi-cates of Insurance for deferred premiums under. Nuclear Energy Liability Insurance Association / Mutual Atomic Energy Liability Underwriters Master Policy No. 1. This insurance provides an (Continued) inspections which have been carried out, and which have con-firmed the adequacy of the Perry QA/QC program; see also ASLB and ALAB decisions cited at n.14 supra.

SHAw, PITTMAN, PoTTs 6. TROWBRIDGE

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Chairman Nunzio J. Palladino Commissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 12 aggregate of $30 million per event in the event that utilities are unable to meet deferred premium obligations. CEI, and the co-owners of the Perry Plant, will also submit to NRC the cer-tified financial statements provided for by 10 CFR 5 140.21(e),

as CEI and Toledo Edison have annually done with respect to the Davis-Besse plant.

There is simply no relationship between the proposed CEI-TE affiliation and compliance with Part 140. Of course, TE as the operating licensee for the Davis-Besse facility is also meeting the same Part 140 requirements.

In connection with WRA's Part 140 allegations, it is worth recalling that the Director, Office of Nuclear Reactor Regula-tion, has already considered an earlier petition under 10 CFR

$ 2.206 which claimed that the Perry co-owners were not finan-cially qualified. The Director denied the petition.

Cleveland Electric Illuminating Co. (Perry and 2), DD-85-14, 22 N.R.C. 635 (1985).

Nuclear Power Plant, Units 1 The Director's Deci-sion explicitly noted that the proposed affiliation would not alter the Staff's conclusion on financial qualifications. The Director stated:

The Staff is aware that CEI and TE are con-sidering a merger. That fact does not alter the analyses set forth in this Deci-sion of the Perry Licensees' financial qualifications. One stated purpose of the possible merger is to strengthen the com-bined financial position of CEI and TE.

22 N.R.C. at 641 n.3. WRA has provided no information to the 1 contrary. In language that applies equally here, the Director  ;

held: " Mere speculation that financial pressures will under-  :

mine the safety of licensed activities is not enough/"

i H.R.C. at 637. 22  !

WRA has not even shown " mere speculation."

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SHAw. PITTMAN, PoTTs & TmowsRIDGC

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Chairman Nunzio J.-Palladino Conmissioner Thomas M. Roberts Commissioner James K. Asselstine Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

February 18, 1986 Page 13 VI. Conclusion For the reasons set forth in this letter and in the Attachment nied.

and Exhibits hereto, WRA's Petition should be de-Respectfully submitted, Shaw, _Pittman, Potts & Trowbridge By: 4ffY_ .

W[N(

Jay E. S41 berg; P . C ." /

Harry H/ Glasspiegel Counsel for The Cleveland Electric Illuminating Company, for itself and as Agent for the Duquesne Light Company',

Ohio Edison Company, Pennsylvania Power Company, and The Toledo Edison Company (Applicants)

Enclosures cc: Harold R. Denten (Director, NRC Office of Reactor Regulation)

James G. Keppler (NRC Regional Administrator. .

Region III)

Chief, NRC Docketing and '

Service Branch t

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I ATTAcuggny 3 1

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