ML19344A284

Util Opposition to Intervenors',Other than Dow Chemical Co, 780802 Motion to Suspend Const.Motion Was Prompted by Recently Executed Renegotiated Contracts Between Util & Dow. Motion Should Be Denied.Certificate of Svc Encl

ML19344A284
Person / Time
Site:	Midland
Issue date:	08/21/1978
From:	Gibbs M, Mark Miller CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.), ISHAM, LINCOLN & BEALE
To:	Atomic Safety and Licensing Board Panel
References
NUDOCS 8008070663
Download: ML19344A284 (12)

Text

, \ W11

'b y  %?$$ s 4

UNITED STATES OF AMERICA ,y y g/B >

NUCLEAR REGULATORY , COMMISSION ~, bU -

c - w ., m* ,= >c * .. ~.S wj,, y y -

Before the Atomic Safety and Licensing Board g

- 4 y

)

In the Matter of )

)

CONSUMERS POWER COMPANY ) Docket Nos. 50-329

) 50-330 (Midland Plant, Units 1 and 2) )

)

)

OPPOSITION OF CONSUMERS POWER COMPANY TO MOTION TO SUSPEND CONSTRUCTION On August 2, 1978 All Intervenors other than The Dow Chemical Company ("Intervenors") moved this Atomic 4

Safety and Licensing Board (" Licensing Board") to promptly direct Consumers Power Company (" Consumers Power" or "Licen-see") to halt further construction of the Midland Plant.

That motion was prompted by the recently executed renegotiated contracts between Consumers Power and The Dow Chemical Company ("Dow") . For the reasons set forth below, Consumers Power opposes the motion to suspend construction.

I. THIS LICENSING BOARD LACKS JURISDICTION TO GRANT THE RELIEF REQUESTED BY INTER-VENORS As the complex history of the Midland Plant pro-ceedings has been set forth at length in previous pleadings

- and decisions, it will not be repeated here. The salient points to be kept in mind are, first, that the United States 80080'50 $6 } h _

Y F w- v

,/, *

, m -

o I

Supreme Court.on; April 3, 1978 reversed the Court of Appeals'

. decision in Aeschliman v. Nuclear Regulatory Comm'n, 547 ,

F.2d 622 -(D.C. Cir.1976), which had caused the Nuclear

. Regulatory Commission (the "NRC" or the " Commission") to l direct this Licensing Board to hold hearings on various issues related to the construction permits for the Midland Plant. Second, by Order dated April 10, 1973 the Commission requested that the parties state their views as to what issues, if any, remain for further NRC consideration in light of the Supreme Court's decision. All parties except i

, Dow submitted briefs on that question, which is now awaiting .

, determination by the NRC. ,

In view of the procedural posture of this case, 1

Intervenors have brought.their motion to the wrong tribunal.

As the suspension hearings'have long been concluded and there are no other proceedings pending before this Licensing Board, there is no authority for the Licensing Board to

, suspend construction of the Midland Plant or to take,any

1. Other action regarding Licensee. See. Houston Lighting and N 1

Power Company (South Texas Project, Unit Nos.1 and 2),

ALAB-381,.5 NRC 582 ~ (1977). - Rather, the Commission is now

, vested with _ jurisdiction over whatever remains of the p construction permit proceeding by virtue of its April 10, '

- 1978_ order, and 'it. is to that _ body that Intervenors should have presented their motion. .

- 2.-

I I I e M- "-e m

• ur g m e +ny arWt

_--...~;

-~. . . - - - . . .

) .

Despite the fact that Intervenors' motion must be

~

I denied on jurisdictional grounds, Licensee will address the o

[ substance of that pleading to demonstrata that the motion L  :

lacks any merit and would not be. granted even if it were i before the proper tribunal.

1 j' II. INTERVENORS HAVE NOT PRESENTED ANY ARGUMENT

WHICH WOULD JUSTIFY SUSPENDING CONSTRUCTION

. OR REOPENING THE RECORD Intervenors have moved "to~ halt all further con-struction of the Midland nuclear plant pending further inquiry into the terms of and circumstances surrounding the l

t revised Consumers-Dow contract of which a copy was trans-mitted to the Commission under date of June 26, 1978." This

} is essentially an attempt to reopen the evidentiary record l

l of the 1976-77 suspension hearing on the issue of the Dow-l l Consumers Power contractual relationship. For several ,

. reasons, which Licensee will discuss below, such an attempt

.is doomed to failure. -

i- .

A. The Commission Has the Necessary Information 4

Consumers: Power has already provided the Commission l

J

.with copies of the recently. signed renegotiated contracts between Licensee and Dow. Thus,.the NRC now possesses all 4

the information required,ano here is no-need to reopen the record for further inquiry.

Intervenors, however, have relied upon'this fact to create a false impression.. The motion states,-in reference *

, _--:--.~,,---

F' i -

2;1 m, -_,; m.. ,

. ~ __ - _

-.C v.

4 to the fact'that: Licensee transmitted-copies'of the rene-l lgotiated contracts to the-Commission, that "Intervenors C

agree with Consumers that'the Dow issue continues to be s

-- vitally [important in this case." This is~most certainly not

-the position of. Consumers Power. Rather, Licensee's - trans-

.'mitta10 1etter of June 26, 1978 sets forth the history ~of-the

. Midland-Plant construction permit proceedings and notes-that the question of whatLissues, if any, remain'for further-(-

consideration in light of the Supreme' Court's decision is presently before the' Commission. It was in this context that Licensee stated that'the. Commission should be aware of' r the recently' renegotiated contracts between Consumers Power and Dow.

As this-Licensing Board is' aware, parties to NRC proceedings have an affirmative duty to keep the appropriate

. tribunal, and other parties,. abreast of changing ~ circum-stances which bear on their cases. See Duke: Power Co.

(Catawba Nuclear Station, Units 1 and 2) , ALAB-355, 4 NRC:

397:'(1976)' and Duke Power Co. (William 1B. McGuire Nuclear -

~

Station, Units 1.and.2), ALAB-143, 6 AEC 623 (1973). .Be-cause'ofithis' obligation Consumers Power' transmitted copies o '~ -of'the-contracts'to the Commission andlto everyone on the.

l l service lists.offboth the construction. permit and operating L

' license proceedings. This~ action.in no way.-negated:or l-

altered'the position'ofl Consumers Power, as expressed in its.

c April 24,-1978 brief to the Commission, that "nothing remains 1

1 -

?

4- l 1I'

,.~ = - - * * ' " * " ~ ~ ' ~ ~ ' '

7

, n - - - - .

.;L , , . ...;. . - ,-- - - - - - ~

• i

-to be' considered regarding the Dow-consumers Power contractual relationship," Licensee Brief at 19.

- B .' : Th'ere is No'Significant Issue Requiring Reopening the Record Int'ervenors have'not-even attempted to allege-the 3

+

type ofJ facts necessary to justify reopening the record in fthe suspension proceeding, for Commission precedent is clear that.that is.an unusual step. Decisions by the Atomic

- Safety and Licensing Appeal Board (" Appeal Board") have

~

l ' established that the propo'nent of a motion to reopen the record has a heavy-burden, and that the motion must be both 4 -timely presensed and addressed to a significant safety or environmental issue. Kansas Gas and Electric Company (Wolf-Creek Generating Station, Unit No.1) , ALAB-4 62, 7 NRC 320, 332 (1978);LVermont Yankee Nuclear Power Corporation (Vermont Yankee Nuclear Power Station), ALAB-167, 6-JAEC 1151, 1152 -

(1973); Georgia Power Company' (Alvin W. Vogtle Nuclear Plant, Units 1 and 2), ALAB-291,'2 NRC 404, 409 (1975).

In addition,.it.must be established that a different result , .

-would have been reached initially had the new information .

'been considered. Wolf Creek, supra; Northern Indiana Public Service Company, (Bailly[ Generating Station, Nuclear-1) ,

ALAB-227, 8-AEC 416, 418f(1974)..

, .Not only have1Intervenors failed to come: forward

., :with this type 'of :a - showing', but it should also be noted

,that thetquestion.of:thelDow-Consumers Power relationship

..:S -

• W E F_' _ . > _u----- _ _ .

w. - _

y.e. w + g ,'

-rwI w - +m--. -, e- r .t ,--.--,w- - , - , - , -

e 4 s w _-. _4 -

, n, -'

does not. involve a. safety issue, and as the Appeal Board pointed out in its February 1978 decision concerning the Midland. Plant, no environmental or NEPA issue is presented by the Dow-Consumers Power situation. Conseners Power Co.

(Midland Plant, Units .1 and 2) , ALAB-458, 7 NRC 155, 167 (1978) (hereinafter " Midland Plant").

Turning to the substance of Intervenors' argument, it,quickly becomes apparent that their assertions regarding

the renegotiated contracts are without merit and that nothing in those contracts justfies reopening the record of the suspension proceeding. First, the fact-that Dow has culmin-ated months of-negotiations by executing the new contracts is-proof that that company continues to be vitally interested in participating in the Midland Plant, for businessmen do not enter-into such complex and important agreements lightly.

The Appeal Board, in assessing Dow's intentions regarding the former contracts in a February 1978 decision, found that j " extensive probing on this point at the suspension hearing

yielded convincing evidence that Dow's present intention is -

to adhere to the contract's terms." Furthermore, as the Appeal-Board state'd, "

(w]e must take Dow's present intention as' controlling ._. . . , " Midland Plant, ALAB-458, 7 NRC at

_ 167 n.45, 168. To find that Dow's current intentions, as to i contracts which were executed less than two months ago and which resolved- the parties' many disputes, is somehow "specu-lative" when the Appeal Board has already determined that l -

.. _ _ . . . ~ _

m -

.Dow intended to honor the old contracts, would be patently ludicrous.

Intervenors rely heavily on the fact that.the new contracts give Dow the option of terminating its participa-tion in the Midland Plant to bolster their argument that Dow's participation is " speculative." This theory-is'errone-ous in two respects. First, while it is true that Dow may withdraw from the project under several different. conditions,-

it is equally true-that the contract requires Dow to pay a substantial sum of money (an amount totalling mi' lions of dollars) to Consumers Power in order to terminate.

The practical result of that fact is that Dow would not terminate its participation in the Midland Plant

-except'for the most drastic of reasons. Including a termina-tion provision in a contract does not indicate that the parties lack confidence in either each other or the venture -

itself. -Instead, it is the act of rational businessmen who attempt to provide in their contracts for contingencies that may occur, even'if remote.

~

Intervenors also ignore the fact that the previous Dow-Consumers Power contracts, executed in December 1967.and January-1974,-also contained provisions which enabled Dow to withdraw from the project. Although the withdrawal provisions are different'in the 1967, 1974 and 1978. contracts, the important = fact is that each of those contracts did contain Eterms allowing Dow to cease its participation in the Midland b

o

... _ _ . - - - _ _ __ _ -. m . m -.

m -

4-Plant. The Commission reviewed the 1974 contracts, which included withdrawal provisions, and concluded that there

, were no changed circumstances which warranted reopening the construction permit proceedings. Consumers Power Co.

. (Midland Plant, Units 1 and 2), CLI-74-15, 7 AEC 311 (1974).

~

A final area in which Intervenors err in their analysis of the Dow-Consumers Power contractual relationship concerns the emphasis which the motion places upon whether the contracts are economically advantageous to Dow. Once again, Intervenors have chosen to ignore a decision directly

, on point which runs counter to their theories. The Appeal Board disposed of this economic argument once and for all when it held that economic analysis had no place in a NEPA cost-benefit analysis of the Midland Plant once it had been established that the nuclear plant was the environmentally-preferable alternative. As the Appeal Board stated in its -

February 14, 1978 decision: ~

At the suspension hearing and in that Board's decision, extraordinary attention was paid to the relative financial costs .

of various alternatives. But there was' no serious. suggestion that any-of.those alternatives was preferable to Midland

from lui environmental standpoint. . . .

This being so, we do not perceive that financial matters are.as crucial as the Board below-thought they were. Unless the proposed. nuclear plant:has environ-mental disadvantages'in comparison to possible alternatives, differences in financial l cost are of little concern ~ ,

to us. . . . Midland Plant, ALAB-458,.

l 7 NRC~at 161-62. '

l l

l j

x - . -

+ ..,  ;

. :----~.-. ..~- =. . - - .

f i' ,. o Furthermore, the. Appeal-Board made specific refer-ence to'the question of the economics'of the Midland Plant from Dow's. perspective when it commented:

3 s

4-Whether er not it is_.in Dow's best finan-cial. interests to honor its contract is not for us but for Dow to determine.-

- Midland Plant, ALAB-458, 7 NRC.at 168.

It must be remembered:that the Appeal Board's decision is the " law of the case" for any further proceed-4

~ing's regarding the construction permits.* Therefore,

'Intervenors' argument regarding the economics of the Midland j Plant is without' merit, j

In addition to the fact that Intervenors have not i-

^

demonstrated that there is any justification for suspending construction and~ reopening.the record, Intervenors have ignored a : strong _ reason for not doing so. The Supreme

Court's-April 3,--1978 opinion in Vermont Yankee Nuclear

Power'Coro. v. Natural Resources Defense Council, which essentially upheld the 1972 grant of construction permits

~

l for-the_ Midland. Plant, has resolved the Dow question. In

reference to the brief' statement in Aeschliman concerning i

"The, rule.of the law of the case is a rule of_ practice, based upon' sound'-policy that when an issue is once litigated

'and decided, that should be~an end of the matter." U.S. v.

= United States Smelting-Refin..& M. Co.,;339 U.S. 186, 198 (1950). -This doctrine has been held to have a " rightful and 7 . reasonable application to the_ workings of administrative agencies," Retail Clerks Union v. NLRB, . 463 F.2d 316, 322 (D.C' Cir. 19 7 2) . .

4 8

t

- , w wg ,, ___ -.- WN-3.F'- . -- - ' ' '"

- -,r .- , ,

~""",M-

r Dow,** the Supreme Court found that this was not an independ-ent basis-for. remanding the' grant of the construction permits

~

! and, furthermore,1that.the Commission had reconsidered the

~

" changed circumstances" and had refused to reopen the pro-

-ceedings on that ground. LThe Commission's actions in this

, regardiwere approved by the Court, which disposed of the Dow topic in a: footnote, Vermont Yankee, slip op, at 33 n. 22.

Because the Dow-Consumers ~ Power relationship has already been considered at levels from the Commission to the United j States Supreme Court,.and because_the NRC already has copies

of-the. renegotiated' contracts, there is no need to order a re-examination.-

i Finally, much of Intervenors' argument that con-

-struction of the Midland Plant should be suspended is based i

upon the fact that' the Commission ordered a suspension of i

construction activities at another nuclear facility in .

i Public Service Comoany of New Hamoshire .(Seabrook Station,  ;

\

Units 1.and 2) , CLI-78 __, . 7 NRC (June 30, 1978) . ** The ]

f Seabrook decision is totally inapplicable, however,_for ,l

'there-the Commission ordered a-suspension while the still l

• "As this matter requires' remand and~ reopening of the issues of energy conservation, alternatives as well as re-calculation of costs and benefits, we-assume that the com-mission-will take~into account the changed circumstances iregarding Dow's need for process steam, and the intended continued operation of Dow's* fossil-fuel generating.facil-i tie s .' " 547 F.2d at4 632f (footno'te 'omitted) .

• • The commission! lifted _the suspension by-an Order dated August 10, 1978. _

9

. - - . . , +.

ux x . u.-__ w. a . . _ 1. . - _: .,, .

., n uncompleted construction permit proceedings were remanded to

~

~

correct various deficiencies in the comparison'of alternatives

~

mandated by NEPA. -

The grant of construction' permits for the Midland Plant,- on the other-hand, was approved by an Appeal ~ Board,.

became.'the final action of the Commission when that body declined to review the decision, and was upheld by the United States Supreme Court. :Thus, there has been a valid _ assessment of alternatives under NEPA for the Midland Plant.- Furthermore, the~Dow questien is not an NEPA issue. Therefore, comparison of-the. proceedings.regarding Midland Plant and Seabrook Station indicates that Intervenors-have both misread and

_ misapplied the Commission's decision in the latter case'in a vain-attempt to support an argument that is without merit. ,

CONCLUSION In summary, Consumers Power believes that this Licens.'ng. Board is without jurisdiction to grant the relief sought by Intervenors. However, even if the motion were before the-appropriate. tribunal it would have to be denied

.I for the reasons' set forth above.

Respectfully submitted,

{C0 hY Michael I. Miller- (

NW j

A .- 1

}Q L

C., -

-Martha E. Gib W

[ab(

'ISHAM,LLINCOLN &>BEALE'

'One First National Plaza- -

' Chicago,? Illinois- 60603. '

.)

(312) 786-7500 I lu -

q ,, y y y y-9.

. - . . - , - - ~. .. ,

..- ~ -

o-

' UNITED STATES OF. AMERICA o NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and' Licensing Board

~

4

> )

In the Matter'Of )

) ..

-CONSUMERS POWER COMPAHY. ) Docket Nos. 50-329

) 50-330 (Midland Plant, Units 1 and 2)- )

)

l )

l CERTIFICATE OF SERVICE 1

i*

I hereby certify that copics of the attached

" OPPOSITION OF CONSUMERS-POWER COMPANY TO MOTION-TO SUSPEND CONSTRUCTION" in the above-captioned proceeding, have been served on the following' parties by united States ~ Mail, first-class postage prepaid,.this 17th day of August,-1978:

i Marshal E. Miller,_Esq. Atomic Safety and Licensing i Chairman Board Panel

-Atomic Safety and Licensing U.S. Nuclear Regulatory Comm.

. Board Panel Washington,-D.C. 20555 U.S. Nuclear Regulatory Comm. ..

. Washington,.D.C.- 20555' Mr. C. R. Stephens Chief, Docketing & Service

. Atomic Safety and Licensing Section

' Office of the Secretary of Appeal Board:

U.S. Nuclear Regulatory Comm. the Commission

. Washington,'D.' C. 20555 U.S. Nuclear Regulatory Comm.

Washington, D. C. 20555~

Richard Hoefling, Esq.- ..

-Counsel-for NRC Staff Dr. J. Venn Leeds, Jr.

] .U.S. Nuclear Regulatory Comm. 10807 Atwell Washington, D.:C. 20555- Houston, Texas 77096

[ Dr. Emmeth A. Luebke L. W. Pribila, Esq.

i Atomic' Safety and Licensing Legal-Department Dow Chemical U.S.A.

4 Board Panel: .

U.S. Nuclear Regulatory Comm. Michigan Division, Bldg.#47

.W ashington',!D. C. '20555 Midland,-Michigan. 48640 JMyron M. Cherry,-Esq.

4 Suite 74501, One IBM Plaza .

--Chicago,-Illinois _'60611

%9 - d

[ ,

%-k g . . 6Iov$ ,

Martha E. Gibbs '

2 . ___ __ . _ _ _ _

z--_

<- +-w - - - , .e ,-, ,. ., , - - - + - p.,-, , y a