ML20138J024

Proposed Findings of Fact for Reopened Phase II Hearing. Certificate of Svc Encl

ML20138J024
Person / Time
Site:	South Texas
Issue date:	12/13/1985
From:	HOUSTON LIGHTING & POWER CO.
To:
References
CON-#485-499 OL, NUDOCS 8512170414
Download: ML20138J024 (25)

Text

. N

+

6' 00LKETED UNITED STATES OF AMERICA UiNPC NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOEdD DEC 16 A11 :15 GFF.a 0 SECRt T/<

00CETING & SERV.f:

In the' Matter of ) BR A t<CH

)

. HOUSTON LIGHTING & POWER ) Docket Nos. 50-498 OL COMPANY, EI E. ) 50-499 OL

)

(South Texas Project, Units 1 )

and 2) )

APPLICANTS' PROPOSED FINDINGS OF FACT FOR REOPENED PHASE II HEARING I. Procedural Backaround

1. After the close of the record in Phase II of this proceeding CCANP filed three separate motions to reopen the record to admit into evidence various documents. 1/ It subse -

quently moved to withdraw its Motion III. 2/ Except with respect to a portion of Motion I, Applicants opposed Motions I and II. 3/

1/ CCANP Motion for Board Ordered Production of Documents, to Reopen the Record, for New Contention, for Discovery, and for Extensions of Time, dated September 30, 1985 (Motion I);

CCANP Motion to Reopen the Phase II Record: II, dated October 16, 1985 (Motion II); CCANP Motion to Reopen the Phase II Record: III and for Discovery, dated October 16, 1985 (Motion III).

2/ CCANP Motion to Withdraw Motion, dated October 29, 1985.

-3/ Applicants' Response In Opposition to CCANP Motion Dated September 30, 1985, dated October 10, 1985. Applicants'-

Response in Opposition to "CCANP Motion to Reopen the Phase II Record: II," dated October 31, 1985.

8512170414 851213 PDR ADOCK 05000498 3Sc3

. 4 .

The Staff opposed both Motions I and II in all respects. 4/ We granted a portion of CCANP's Motion I admitting CCANP Exh. 148,

-and the parties were authorized to address that document in'their proposed or reply findings. 5/ No party chose to do so. We also granted CCANP's motion to withdraw its Motion'III, and as discussed below, granted in part CCANP's Motion II. 6/

'.. In its Motion II and in its proposed findings (CCANP FOF, 1 III.205), 7/ CCANP contended that HL&P's reasons for commissioning the Quadrex Report included, at least in significant part, preparation for the Phase I hearing. CCANP also contended that HL&P decided not to utilize.the Report in its Phase I testimony, and not to provide it to the Board, because of its negative conclusions. Motion II at 6. CCANP further contended that HL&P witnesses committed perjury when'they testified that they did not believe the Quadrex Report was relevant to the Phase I issues. Motion II at 7. As basis for these charges, CCANP relied upon notes by the Secretary of the i

4/ NRC Staff Response to CCANP Motion for Production of Documents, Reopening the Record, Admission of New Contention, and Discovery, dated October 15, 1985. NRC Staff Response to CCANP Motions to Reopen.the Phase II Record

II & III, dated November 5, 1985.

5/ . Memorandum and Order, LBP-85-42, 22 NRC (November 5, 1985).

6/ Memorandum and Order (CCANP Motions II and III to Reopen Record), LBP-85-45, 22 NRC (November 14, 1985). .

i

-7/ Applicants deferred replying to CCANP F0F, 1 III.205 until the conclusion.of the reopened hearing. Egg Applicants' Reply Findings, V RI.1, n.3. These proposed findings

include Applicants' reply to CCANP FOF, 1 III.205.

1 1

e STP Management Committee (Mr. Thrash) of its meetings on December 4, 1980 and February 19 and 20, 1981, contending that they

't demonstrate that Mr. Goldberg and Mr. Barker made statements (in the presence of Messrs. Jordan and Oprea) showing that a purpose

~

underlying the engineering (or Quadrex) review was to answer questions anticipated to arise in testimony in the Phase I hearing. Motion II at 4.

3. We granted, in part, CCANP's Motion II because it appeared that the new information could potentially alter the result we would otherwise reach on Contention 10, and because the documents appeared to raise questions regarding the completeness of certain evidence now before us for decision. We acknowledged, ,

however, as pointed out by the Staff, that these notes were capable of a variety of interpretations, and therefore required explanation in order to be meaningful for the record.

Accordingly, we decided to admit into the record three of the documents proferred by CCANP's Motion II and to receive additional testimony concerning the relationship of the Quadrex review to the Phase I hearings. LBP-85-45, 22 NRC , slip gg.

at 10-11 (Nov. 14, 1985).

4. The reopened hearing was conducted on December 5 and 6, 1985, in Houston, Texas. CCANP, Applicants and the NRC Staff were each represented by counsel in the hearing. Appli-cants presented six witnesses in the reopened hearing. No witnesses were called by the other parties. In addition seven 1

exhibits were admitted into evidence (App. Exhs. 79-85). Upon

r 8

O I the motion of CCANP, 8/ and without objection from any party, the Board ordered the witnesses sequestered. By agreement of the.

parties, one witness, however, was designated as a Company representative and permitted to be present throughout the hearing l

except for a brief portion of the Board's questioning of another witness. Egg Tr. 15392-93, 15394-95, 15424.

l II. Purpose of the Ouadrex Review

5. The evidence admitted in the reopened hearing clearly rebuts the premise of CCANP's Motion II, and demonstrates that the Quadrex review was conducted for HL&P's Project manage-l ment purposes (to assess the status of B&R engineering) and not for hearing preparation. At the time HL&P decided to undertake the third party review of B&R engineering, the NRC enforcement I actions in 1980 had resulted in a virtual cessation of STP l

construction during that year. Tr. 15450-52, 15471-72, 15477-78 (Thrash); Tr. 15509-10 (Goldberg); Tr. 15654, 15660-61 (Barker);

Tr. 15697 (Sumpter). As the corrective actions were being implemented and the owners anticipated substantial construction progress, concerns were expressed at Management Committee meetings about whether B&R engineering could support the planned construction effort. 9/ Tr. 15450-52, 15459-61, 15471-72, l

8/ Intervenor Motion to Sequester Witnesses, dated November 27, 1985.

[ 9/ Mr. Thrash testified that B&R's difficulty in resolving

engineering problems (which he distinguished from " defects")

l in 1980 gave rise to doubts about the ability of B&R engineering to support construction. Tr. 15450-51, 15459-60 (footnote continued) l l

l L

15477-78 (Thrash); Tr. 15667-68 (Barker); Tr. 15616-18, 15636-37 (Oprea). The Management Committee gave extensive consideration during late 1980 and early 1981 to Project engineering problems, relating both to production and to correction of past problems, including past Section 50.55(e) items. Tr. 15616-18 (Oprea); ggg also App. Exh. 79 (notes of Dec. 4, 1980 meeting, re " hanger design", " pipe whip analysis" (at 80224), " beam [to column connections]" (at 80225)); App. Exh. 80 (notes of Feb. 19, 1981, meeting, re " constraints [on Project schedule) will be in eng[ineering]." (at 81036), " cable trays" (at 81038)); App. Exh.

81 (notes of Feb. 20, 1981 meeting, re " Pipe hangers, supports, restraints," " Conduit Separation," " Soil-str[ucture]

interaction," " Cable Tray Supports," (at 81052); " reactor cavity ... vent prob [lem]" (at 81053); "Eng[ineering) is limiting," "eng[ineering] will be barely ahead of constr[uction)"

(at 81054)).

6. Upon assuming responsibility on October 20, 1980 as HL&P's Vice President, Nuclear Engineering and Construction (Tr. 15504 (Goldberg)), Mr. Goldberg was informed by his staff of (footnote continued from previous page)

(Thrash). Mr. Barker testified that while there were some 10 C.F.R. S 50.55(e) items, concerns with the productivity of B&R engineering motivated his desire for an engineering review in late 1980. Tr. 15667-70 (Barker). Previously, Mr. Oprea had cited B&R's inability to meet the 1979 baseline schedule as a reason that in mid-1980 he felt an engineering review was needed. Tr. 14100 (Oprea). The statements of these witnesses, though focusing on different aspects of the then-existing concerns with B&R engineering, are generally consistent and reflect Project-related problems w1olly unrelated to the forthcoming Phase I hearings.

various concerns regarding B&R engineering. Goldberg, ff. Tr.

11491, at 4-5; Tr. 11572 (Goldberg); Tr. 12763-66 (Sumpter). He discussed with Mr. Barker, then HL&P Project Manager for STP, various approaches to assess the status of B&R engineering. Tr.

15644-46, 15663-64, 15666-68, 15691-92 (Barker); agg also, App.

Exh. 85. During late 1980, Mr. Goldberg concluded.that HL&P should retain a consulting firm to perform an independent review of B&R engineering. Goldberg, ff. Tr. 11491, at 4-5; Tr. 15504-05 (Goldberg); Sumpter, ff. Tr. 12699, at 4; Tr. 15645 (Barker);

Tr. 15598-99 (Oprea). Mr. Goldberg gave responsibility for coordinating the review to Dr. J.R. Sumpter, then HL&P's Manager-Nuclear Services. Goldberg, ff. Tr. 11491, at 7-8; Tr.

15510 (Goldberg); Sumpter, ff. Tr. 12699, at 8; Tr. 15646 (Barker). Mr. Goldberg wanted such a review to make himself knowledgeable about the status of B&R engineering so that he could better fulfill his responsibilities as the HL&P officer responsible for those activities including, as the testimony reflects, to judge what improvements were needed. Tr. 15505 (Goldberg); ggg alan Tr. 15409 (Jordan). After considering several potential consulting firms HL&P ultimately selected Quadrex Corporation. 10/ Goldberg, ff. Tr. 11491, at 4-6; 10/ HL&P's initial contact with Quadrex concerning the review was a telephone conversation between Dr. J.R. Sumpter and Mr. L. Stanley. Mr. Stanley's notes of the conversation (App. Exh. 86 for identification) include "May 81 hearing -

NRC." Dr. Sumpter testified that he may have mentioned the hearing to Mr. Stanley either as part of the background information about the project, or in a discussion of the schedule of the review. Tr. 15697 (Sumpter). He also (footnote continued)

Sumpter, ff. Tr. 12699, at 5; Tr. 12779-81 (Sumpter); Tr. 15645-

'46, 15675-76 (Barker).

7. Every witness in the reopened hearing testified that preparation for dealing with the issues to be heard in the Phase II hearing was not a purpose of the Quadrex Review. Tr.

15398-400 (Jordan); Tr. 15451-53, 15495-96 (Thrash); Tr. 15506-10, 15523, 15554, 15559-60, 15569-70 (Goldberg); Tr. 15589, 15623 (Oprea); Tr. 15646-47 (Barker);.Tr. 15697-98 (Sumpter). Each such witness had personal knowledge based on actual involvement in the initiation of the review or participation in discussions during 1980-81 concerning the rationale for undertaking the review.

8. In addition to providing him with information he believed necessary to properly perform his job, including the management of the Project, Mr. Goldberg also expected the review to assist in discussions about the status of the Project with HL&P management, the co-owners and regulatory authorities. As he explained in his 1982 sworn statement to the NRC during the 82-02 investigation (CCANP Exh. 87), the Quadrex review was initiated to make himself more knowledgeable about the status of engineering to be able to carry out his responsibilities; particularly since he had much information about the status of construction, but little about engineering. Tr. 15519-21, (footnote continued from previous page) testified that hearing preparation was not a purpose of the Quadrex review and that he did not tell Mr. Stanley that it was. Tr. 15697-98 (Sumpter).

o

~.

15541-43 (Goldberg). Compare, CCANP FOF, 1 III.205. Tr. 15505, 15548 (Goldberg); Goldberg, ff. Tr. 11491, at 4-5. He pointed out that. independent third party review of the technical ~ adequacy of the work of contractors is a technique HL&P has regularly employed in its management of STP to obtain "an extra feeling of certainty as to where we are," and that such reviews are not normally provided to a Licensing Board unless directly related to a hearing issue or requested by the Board. Tr. 15564-66 (Goldberg). In fact, HL&P obtained a similar third-party review of its Allena Creek project (which reached favorable conclusions on the status of engineering), and did not provide a copy of that report to the Allens Creek Licensing Board until an issue arose in that hearing directly~related to the review. Id.

9. Mr. Goldberg's testimony was fully corroborated by all of the other witnesses. Mr. Barker testified that he discussed with Mr. Goldberg over a period of several weeks the need for a review of the status of B&R engineering, and that the decision to undertake the Quadrex review was the outgrowth of these discussions. Tr. 15644-46 (Barker); see ale 2, Tr. 15535 (Goldberg). Mr. Oprea described his discussions with Mr. Goldberg and his concurrence in the need for such a design review, pointing out that it was appropriate for a new officer to inquire about the status of engineering and that initiation of such a review had been under consideration by HL&P much earlier in 1980. Tr. 15598-99 (Oprea). Mr. Jordan testified regarding his discussions with Mr. Oprea and Mr. Goldberg and his

5 d

concurrence in the decision to perform such a review because it was a tool Mr. Goldberg felt he needed in order to perform his job. 11/ Tr. 15409 (Jordan); att also, Tr. 12166-67 (Jordan).

Mr. Thrash testified to his general recollection that the purpose of the engineering (or Quadrex) review was discussed in the Management Committee meetings as being to determine whether, from an engineering standpoint, B&R could support the Project. Tr.

15450-53 (Thrash).

10. The witnesses testified that the Quadrex Review was performed for Project-related purposes; namely to assess the status of B&R engineering and to determine whether improvements were needed to complete the Project successfully. (Tr. 15398 (Jordan); Tr. 15451-52, 15471 (Thrash); Tr. 15505, 15548, 15567-70 (Goldberg); Tr. 15588-89 (Oprea); Tr. 15646 (Barker). The ,

possible use of the information as a basis for answering 7

potential questions on engineering if they arose at the Phase I hearing was perceived only as an incidental benefit of the review  ;

by Mr. Goldberg, and the recollection of all the witnesses was consistent on this point. Tr. 15495-96 (Thrash); Tr. 15507, 15512-13, 15554-56, 15559-60 (Goldberg); Tr. 15589, 15623-24 (Oprea); Tr. 15647 (Barker); Tr. 15697-98 (Sumpter).

11/ Several witnesses were questioned about whether Mr. Goldberg l needed approval from either Mr. Jordan, Mr. Oprea or the Management Committee to initiate the engineering review.

l The record shows that although Mr. Goldberg had authority to initiate the review, he discussed his plan for the review >

with Messrs. Oprea, Jordan and the Management Committee i before the review was undertaken. Tr. 15489-90 (Thrash);

l Tr. 15544-48, 15557-59 (Goldberg); Tr. 15607, 15610-11, j 15614-15, 15618, 15624-25 (Oprea); Ett ElA2, Tr. 15410-14 l (Jordan).

III. The Notes of the Manaaement Committee-Meetinas ,

11. Mr. Thrash testified regarding his notes of Management Committee meetings. Such meetings are somewhat informal, and discussion can wander from the topics covered in the agenda. Tr. 15455 (Thrash); Tr. 15602-03 (Oprea). As secretary to the Management Committee, Mr. Thrash took notes of the discussion to use to refresh his recollection when he wrote the minutes of the meeting a few days or weeks later. Tr.

15442-43 (Thrash). Ha testified that he was able to write only a small part of the discussion (10-20%), and that he made no effort to " capture the give and take" of the discussions. Tr. 15443-44 (Thrash). He explained that his notes are " fragmentary" and that the fact that something is not mentioned in his notes is not evidence that it was not caid. Tr. 15479-80 (Thrash). He also mentioned that, as a lawyer, he may have tended to pay greater attention when hearings were mentioned. Tr. 15453 (Thrash). In addition, we note that although the minutes were reviewed and revised as necessary by the Management Committee, Mr. Thrash's notes were not subject to such review. Tr. 12659-60 (Goldberg);

RER ala2, Tr. 14120 (Oprea); Tr. 14216 (Poston).

A. Meetino of December a t_1980

12. In the notes of the Management Committee meeting of December 4, 1980, a remark attributed to Mr. Goldberg Indicates "constr[uction) errors will raise eng(ineering]

l q[uestion]s." Another remark attributed to Mr. Goldberg says

"need overview by more exper[lenced] eng[inee]rs -- then can provide strong test [imony] at OL hearing." App. Exh. 79 at 2052. 12/ CCANP contends that these remarks show Mr. Goldberg viewed engineering questions as closely related to construction and that Mr. Goldberg believed that the Quadrex review was necessary to provide testimony in the Phase I hearing. Motion II at 2-3. Finally, a remark attributed to Mr. Oprea states that an NRC inspection was anticipated for early 1981. App. Exh. 79, at 2052. CCANP suggested that HL&P may have expected an inspection of B&R engineering, and have initiated the Quadrex review to address potential NRC engineering concerns. Tr. 15601-02.

13. Although he did not recall the specific dis-cussion', Mr. Goldberg testified that he may have said that construction errors would raise engineering questions. Tr. 15511 (Goldberg). He explained that Mr. Thrash's notes showed that the topic under discussion at that point was the reforecast of the Project schedule (see App. Exh. 82, at 2, item 2.e), and his remark was intended to point out that an additional task, not accounted for in the schedule, would be the need for B&R 12/ In our November 14, 1985 Order we noted that in Mr. Oprea's testimony in response to a question regarding when the Management Committee was first informed of the decision to hire Quadrex, he did not mention the meeting on December 4, 1980. LBP-85-45, slip op. at 10. Mr. Oprea explained that during his testimony he did not recall the discussion on December 4, 1980. Tr. 15592-93 (Oprea). We find it not surprising that a witness would not recall the details or dates of discussions that happened almost five years ago, particularly where those dates and details had previously not been put into issue and there was no reason for the witness to have refreshed his recollection of such information prior to testifying.

a engineers."to field the technical implications of future errors,"

thereby constituting a further potential constraint on the availability of B&R's engineering resources. Tr. 15511-12 (Goldberg). His statement expressed neither any expectation that engineering problems would be a hearing concern nor that they would be_the subject of NRC inspections.

14. Mr. Goldberg also explained that the other remark attributed to him ("then can provide strong testimony at OL hearing") was consistent with his view that as a side benefit of undertaking the engineering review he would be in a position to more knowledgeably respond to any questions that might arise regarding the status of engineering. Tr. 15512-13 (Goldberg).

As the new Vice President for Construction and Engineering, and knowing that Licensing Boards have broad latitude in the questions they may ask, Mr. Goldberg believed that there was a possibility that he would be asked for his observations regarding the' status of engineering. Tr. 15552-53 (Goldberg). He saw as a side benefit to the engineering review an opportunity to prepare himself for such questions. Tr. 15507, 15512-13, 15554-56, 15559-60 (Goldberg).

15. The testimony of the other witnesses concerning the statements attributed to Mr. Goldberg in the notes of the December 4, 1980, meeting, was consistent with Mr. Goldberg's explanation. 13/ Tr. 15461 (Thrash); Tr. 15623 (Oprea); Tr.

13/ In the litigation between the STP owners and B&R/Halliburton, Mr. Thrash had previously read his notes (footnote continued)

15646-47 (Barker); Tr. 15697-99 (Sumpter).

16. With respect to Mr. Oprea's statement on the anticipated major NRC inspection, he testified that the l l inspection would have related to implementation of Show Cause commitments or to HL&P's preparations for eventual Plant operation. Tr. 15601-03 (Oprea); 111 also Tr. 15528-29 (Goldberg). The NRC did, in fact, inspect HL&P's preparations for Plant operations in early 1981. Tr. 15529-31 (Goldberg);

App. Exh. 80 at 81038; App. Exh. 81 at 81051. Mr. Thrash explained that in the reference in his notes in connection with l

the anticipated inspection ("of what; - engr?"), the question i

I mark represented.his own uncertainty as to what Mr. Oprea said at the meeting. Tr. 15463-64 (Thrash).

B. February 19, 1981 Meetina

17. Mr. Thrash's notes of a discussion regarding the Quadrex review during the Management committee meeting on February 19, 1981, indicate that in response to a question regarding the potential effect of "an adverse audit" on the "OL hear [ing)", Mr. Goldberg replied "can only disclose and explain solution." App. Eth. 80 at 81037. The notes attribute to (footnote continued from previous page) and their apparent meaning into the transcript of his deposition on July 18, 1984. Egg App. Exh. 84. Mr. Thrash explained that he had no recollection of those particular statements either during his 1984 deposition or now. Tr.

15445-48, 15460-61 (Thrash). However, his notes of the Management Committee meetings did not affect his general recollection of the discussions of the subject, which was consistent with Mr. Goldberg's testimony. Tr. 15450-53, 15460-61 (Thrash).

t

_ 14 _

Mr. Oprea the comment that he "didn't think [an adverse audit) would affect [the] May hearings." 14 The notes also attribute to Mr. Goldberg a statement to the effect that in a hearing the Licensing Board would not believe a utility or its contractor, but would believe " people we've hired." Id. 14/

18. Mr. Goldberg testified that he believed the question about the effect of an adverse Quadrex review on the licensing hearing (and his response), was more generally directed to its effect on the overall licensing process, rather than its relationship to the hearing process. Tr. 15515-16, 15533 15550 (Goldberg). In any event, his reply regarding the disclosure of adverse findings should be understood as reflecting his intent to comply with the notice requirements of 10 C.F.R. S 50.55(e), and not as suggesting that the Report might have to be provided to the Licensing Board, except as it received copies of such notices. Tr. 15515-16 (Goldberg); agg Alan Tr. 15625-26 (Oprea).

Mr. Goldberg testified that he did not expect that the Quadrex findings, limited to engineering matters, would be germane to the Phase I licensing hearing. Tr. 15515-16 (Goldberg). He viewed

-~/

14 CCANP also questioned witnesses about the statement attri-buted to Mr. Oprea in the notes of the February 19, meeting that B&R had "tried to do end around & avoid whole thing?"

Mr. Oprea explained that such a statement would have indicated that D&R had contacted himself or one of the other owners to request cancellation of the Quadrex review to avoid the potential impact on the progress of design. Tr.

15603-05, 15613 (Oprea); gig glan Tr. 15533-34 (Goldberg);

Tr. 15676-77 (Darker). Mr. Oprea testified that B&R did not try to impede the review. Tr. 15613-14 (Oprea). In any event, we fail to see the significance of this point to the lasues before us.

the comment attributed in the notes to Mr. Oprea as consistent with his own view that the Report was not relevant to the issues before the Licensing Board in Phase I. Tr. 15516 (Goldberg).

Mr. Oprea's testimony agreed with Mr. Goldberg's on this point.

Tr. 15593-94, 15625-26 (Oprea); att also Tr. 15408-09 (Jordan).

19. Mr. Goldberg also testified regarding the comment attributed to him concerning the credibility of testimony from third party witnesses. He explained that such a statement was probably in the context of discussing the side benefit of the Quadrex review, should engineering questions arise at the hearing. Tr. 15516-17 (Goldberg). It did not reflect any expectation that such questions would actually come up, but was premised on his understanding that Licensing Boards have wide latitude in questioning a witness, and might ask questions beyond the specific hearing issues. Tr. 15507, 15551-53 (Goldberg).

C. February 20, 1981 Meetina

20. Mr. Thrash's notes of the february 20, 1981, Management Committee meeting attribute to Mr. Barker several ntatements regarding the Quadrex review, including the statements that the review was scheduled for April, 1981, that there was a need to have the information to meet licensing hearing questions, and that there would be an impact on the 1981 work plan, but the review was critical and must be done. App. Exh. 81 at 81051.

21. Mr. Barker did not recall his statement about the need to have the information to meet licensing hearing questions, but testified that this statement was probably based on the statements of Mr. Goldberg regarding the side benefits of the review at the previous Management Committee meetings. Tr.

15679-81 (Barker). Ein A112 Tr. 15562 (Goldberg).

i D. Summary t

22. Mr. Thrash's notes of the Management Committee meetings do not fully describe the motivation for the Quadrex review, although they do allude to the side benefit, testified to by others (aga 1 10, supra) of being better able to testify at the hearing on engineering questions if they arose. App. Exhs.

79-81. Several witnesses were asked to explain why the notes did not record completely the otherwise universally understood l underlying purpose of the study expressed by all of the I witnesses. Mr. Thrash explained that his notes represent only a small fraction of what is said at the meetings (Tr. 15443-44 (Thrash)), and he pointed out that during the meeting of February 19, 1981, which was the lengthiest discussion of the engineering review, his notes indicate that he was absent during the first few minutes of the discussion (Tr. 15493-94). Mr. Goldberg [

l testified that he did explain the reasons for the engineering review to the Management Committee, and that enhancing his ability to answer questions at the Phase I hearing was mentioned I only as a side benefit of the review. Mr. Thrash suggested that, j

l

.17 - ,

l l

being a lawyer, he would tend to pay greater attention in his notes to discussions of legal proceedings, such as the pending hearing. Tr. 15453 (Thrash); Att A112, Tr. 15523-24 (Goldberg).

Mr. Barker testified that in his presentation at the February 20, 1981, Management Committee meeting he also would have explained the purpose of the Quadrex Review, and that that part of his presentation is represented in Mr. Thrash's notes by the line "need indep[endent) review of B&R eng[ineering]." Tr. 15683-84 (Barker).  ;

23. The record is clear that Mr. Thrash's notes are not a complete account of the discussions at the Management Committee meetings. The Board finds that the absence from those notes of a detailed explanation of the purpose for conducting the Quadrex review, as explained by the witnesses, neither casts any significant doubt on the consistent and uncontested testimony of the witnesses as to the purpose of the Quadrex review nor indicates that the purpose differs from the witnesses' expla-nations during the Phase II hearings.

IV. LBP-85-45 Scenario

24. In our Memorandum and Order reopening the record i

to receive the notes of the three Management Committee meetings, I

we acknowledged, as the NRC Staff had pointed out, that the notes were capable of a variety of interpretations and we hypothesized a scenarlo that might be consistent with one interpretation. Our hypothesis included the following speculations:

i

c i

(1)- The Phase I issues, as adopted in the prehearing conference of November 19, 1980, were discussed at the December 4, 1980, Management Committee meeting; l.

(2) in this hypothesized discussion of the Phase I issues, the review of B&R engineering.was discussed as a method for demonstrating at the OL hearing that HL&P had not abdicated to B&R its responsibilities for L design of the STP; (3) in the February, 1981, Management Committee l

l meetings there was a disagreement between Mr. Goldberg l and Mr. Oprea regarding the relevance of the Quadrex f

review to the OL hearings; and (4) because of the negative character of the Quadrex Report, Appilcants decided to adopt Mr. Oprea's L view that the Report was not relevant. LBP-85-45, 3113 i

l g3. at 7-9.

l As discussed below, the testimony addressed each of these l

[ hypotheses.

l l 25. Mr Thrash's notes of the December 4, 1980, L

meeting do not contain any discussion of the issues adopted by the Board at.the November 19, 1980, prehearing conference. As discussed in 1 11, gusta, absence of a subject from the notes does not show that it was not discussed. In this case, however, none of the witnesses who attended the December 4, 1980, meeting recalled any such discussion. Tr. 15487-88 (Thrash); Tr. 15510

- 19 _

(Goldberg); Tr. 15590 (Oprea). The absence of such discussion is consistent with Mr. Thrash's testimony that in the late 1980 -

early 1981 timeframe the Management Committee focused its attention on the lack of construction and engineering progress, and not on licensing. Tr. 15452-53 (Thrash). Moreover, an update on the OL proceeding was a separate item on the proposed agenda for the meeting (App. Exh. 82, at 1, item I.G), which was not reached at the meeting. Tr. 15454-55 (Thrash).

t 26. Present and former HL&P executive managers testified that they did not undertake the Quadrex review in order to demonstrate that HL&P was not abdicating its responsibility as l an NRC licensee in the area of engineering. 15/ Tr. 15399-400 (Jordan); Tr. 15508 (Goldberg); Tr. 15590-91, 15622-23 (Oprea).

Mr. Jordan testified that he viewed the review as an offensive, rather than a defensive action, and that the review was under-taken to aid in HL&P's management of the Project, and not to defend HL&P's actions in licensing proceedings. Tr. 15434 (Jordan). Mr. Goldberg testified that the motivation for the review was to get an understanding of the status of B&R engineering, and whether improvements were needed. Tr. 15554 (Goldberg). He explained that HL&P had a large staff vigorously monitoring B&R engineering activities and could hardly be charged with abdication of its responsibilities as a licensee for i

l l

15/ Messrs. Jordan, Oprea and Goldberg also testified that the third party review of engineering was not viewed as a corrective action in response to the Show cause Order. Tr.

15399 (Jordan); Tr. 15590 (0prea); Tr. 15508 (Goldberg). i

engineering. Tr. 15508 (Goldberg); att also Tr. 15620-21 (Oprea). He also pointed out that the review was focused on areas of potential weakness on the Project, and that a review undertaken to prove that HL&P was properly discharging its responsibilities would not have been so focused. Tr. 15561 (Goldberg). Mr. Oprea also testified that he did not view the Quadrex review as having any relationship to the Phase I hearing (Tr. 15593-94 (Oprea)), and that HL&P had shouldered its respon-sibility in accordance with its commitments (Tr. 15620-21 (Oprea)). Similarly, Mr. Barker testified that he discussed with Mr. Goldberg the need for an engineering review over a period of several weeks in November, 1980, and that the review was under-taken by HL&P as part of its efforts to manage the Project, and r.ot for purposes of hearing preparation. Tr. 15644-47 (Barker).

He pointed out that various types of reviews of engineering were considered and that some of these reviews were undertaken by B&R and HL&P, but that Mr. Goldberg also decided to initiate an independent review done off-Project. Tr. 15645-46 (Barker); ggg AAAA APP. Exh. 85.

27. WLth respect to our hypothesis that there was a disagreement between Mr. Goldberg and Mr. Oprea regarding the relevance of the Quadrex review to the Phase I hearing, all of the witnesses who were present at the February 19, 1981, meeting testified that there was no such disagreement. Tr. 15408-09 (Jordan); Tr. 15496-97 (Thrash); Tr. 15516 (Goldberg); Tr. 15594 Oprea; Tr. 15689-90 (Barker). In particular Mr. Goldberg

testified that he never believed that the Quadrex review was relevant to the Phase I issues, and that in the discussion regarding.the potential need to disclose adverse review results (App. Exh. 80 at 81037), he would have had in mind 10 C.F.R.

S 50.55(e), not any obligation to notify this Board except to the

- extent that the Board received copies of Section 50.55(e) reports in the ordinary course of business. Tr. 15506-07, 15515-16, 15523 (Goldberg).

28. Finally, Mr. Goldberg reiterated that the decision not to provide the Quadrex Report to this Board was based on his understanding of the Phase I issues and his opinion that the Report was not relevant to those issues; the negative character of the Report did not figure in this decision. There was no discussion among Messrs. Goldberg, Oprea and Jordan as to whether the Report should be provided to the Board since all indepen-dently concluded that it had nothing to do with Phase I issues.

Tr. 15399-400 (Jordan); Tr. 15564-66 (Goldberg); Tr. 15605-06 (Oprea). Several witnesses'also testified that the results of the Quadrex review did not reflect any' abdication of responsi-bility by HL&P. Mr. Goldberg explained that HL&P directed Quadrex to focus on areas in which it had misgivings about the B&R design or was known to present difficult nuclear engineering challenges. Nothing in the results of the review suggested to any of the witnesses that HL&P had abdicated its responsibility for the Project design. Tr. 15517-18 (Goldberg); 11g also Tr.

15400 (Jordan); Tr. 15594 (Oprea).

r

,- . ..-.-..w.< ...% . -. . - - - _..-_,.____.o_, ~._-q,._,-----------.._m__... , . . . - - . _ - _ - . ,_..--.._ _

r. . . . _ - - - - . - ,--...y_.__y.,my. , _

l

29. On the basis of the persuasive and uncontested evidence, we find that the notes do not support our hypothetical scenario and that the events included in our scenario did not occur.

V. Conclusions

30. We reopened the record to permit Applicants to elucidate the statements contained in Applicants' Exhibits 79-81.

Applicants' witnesses provided satisfactory, complete and consistent testimony to the effect that the motivation for the Quadrex. review was the desire to assess the status of B&R engineering, and no testimony to the contrary was presented. For the reasons expressed above (S III, supra), we find that the three exhibits are not inconsistent with Applicants' prior testimony before us and do not reflect adversely on the candor of Applicants' witnesses.

31. Our earlier ruling that HL&P violated its McGuire obligations by not providing the Quadrex Report to us until September, 1981 (LBP 85-6, 21 NRC at 461-62), was premised on our understanding that the Quadrex Report focused on design quality assurance issues. The evidence in Phase II persuaded us that quality assurance matters are addressed by the Report only to a limited extent. CCANP's Motion II prompted our inquiry into whether the Quadrex Report was relevant to perhaps a broader Phase I issue; 121., whether HL&P had abdicated its responsi-bility as a licensee for the adequacy of the design of the

Project. The evidence in the reopened Phase II, including the~

unanimous and consistent testimony of the witnesses, shows that the Quadrex Report was not relevant to the Phase I issues, viewed even in this broader perspective.

4 UNITED STATES OF AMERICA

• OM hE TE r.

NUCLEAR REGULATORY COMMISSION tsyf' BEFORE'THE ATOMIC SAFETY AND LICENSING BOARD 35 CEC 16 All:15 In the Matter of )

)

0FFit ._ SECRt:i/e r

00C AEllhG i SEPvmi.

HOUSTON LIGHTING & POWER ) Docket Nos. 50-498 OL BRANCH COMPANY, ET AL. ) 50-499 OL

)

(South Texas Project, Units 1 )

and 2) )

CERTIFICATE OF SERVICE I hereby certify that copies of " Applicants' Proposed Findings Of Fact For Reopened Phase II Hearing" have been served on the following individuals and entities by deposit in the United States mail, first class, postage prepaid on this 13th day of December, 1985.

Charles Bechhoefer, Esq. Brian Berwick, Esq.

Cha'irman, Administrative Judge Assistant Attorney General Atomic Safety and Licensing For the State of Texas Board Panel Environmental Protection U.S. Nuclear Regulatory Division Commission P.O. Box 12548, . Capitol Washington, D.C. 20555 Station Austin, TX 78711 3 Dr. James C. Lamb, III Administrative Judge Kim Eastman, Co-coordinator 313 Woodhaven Road Barbara A. Miller Chapel Hill, NC 27514 Pat Coy Citizens Concerned About Frederick J. Shon Nuclear Administrative Judge Power i-U.S. Nuclear Regulatory 5106 Casa Oro Commission San Antonio, TX 78233 Washington, D.C. 20555 Lanny Alan Sinkin Mrs. Peggy Buchorn c/o Public Citizen Executive Director 1611 East First Street Citizens for Equitable Austin, TX 78702-4455 Utilities, Inc. '

Route 1, Box 1684 Ray Goldstein, Esq.

Brazoria, TX 77422 Gray, Allison & Becker 1001 Vaughn Building 807 Brazos Austin, TX 78701-2553

r Oreste Russ Pirfo, Esq.

~ Robert G.'Perlis, Esq.

Office of the Executive Legal ~

-Director U.S. Nuclear Regulatory Commission

' Washington, D.C. 20555 Atomic Safety and Licensing' Board

'U.S. Nuclear Regulatory Commission Washington,-D.C. 20555

' Atomic Safety and Licensi~ng Appeal Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Docketing and Service Section Office.of the Secretary U.S. Nuclear. Regulatory Commission Washington, D.C. 20555 n_ __

s 6

4

[-

.?

~?

i t

LC 3 -,

l-