[Federal Register Volume 62, Number 56 (Monday, March 24, 1997)]
[Notices]
[Pages 13908-13915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7317]
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NUCLEAR REGULATORY COMMISSION
[Docket Nos. 50-424 and 50-425]
Georgia Power Company, et al. Vogtle Electric Generating Plant,
Units 1 and 2; Issuance of Director's Decision Under 10 CFR 2.206
Notice is hereby given that the Acting Director, Office of Nuclear
Reactor Regulation, has taken action with regard to a Petition dated
September 11, 1990, by Michael D. Kohn, Esquire, on behalf of Messrs.
Marvin Hobby and Allen Mosbaugh (Petitioners), pursuant to Section
2.206 of Title 10 of the Code of Federal Regulations (10 CFR 2.206).
The Petition was supplemented by submittals made on September 21 and
October 1, 1990, and July 8, 1991. The Petition pertains the Vogtle
Electric Generating Plant, Units 1 and 2.
The Petition contained allegations regarding: the management of the
Georgia Power Company (GPC) nuclear facilities; illegal transfer of GPC
operating licenses to Southern Nuclear Operating Company (SONOPCO);
intentional false statements to the NRC regarding GPC's organizational
chain of command and the reliability of a diesel generator; perjured
testimony submitted by a GPC executive during a DOL proceeding under
Section 210 of the Energy Reorganization Act; repeated abuse at the
Vogtle facility of Technical Specification 3.0.3; repeated willful
technical specification violations at the Vogtle facility; repeated
concealment of safeguards problems from the NRC; operation of
radioactive waste systems and facilities at Vogtle in gross violation
of NRC requirements; routine nonconservative and questionable
management practices; and retaliation by GPC against managers who make
their regulatory concerns known to GPC or SONOPCO management. The
supplements to the Petition of September 21 and October 1, 1990,
forwarded exhibits and provided additional information regarding the
alleged illegal transfer of operating licenses. Based on these
allegations, Petitioners requested that the NRC institute proceedings
and take swift and immediate action.
The July 8, 1991, supplement to the Petition repeated several of
the earlier allegations, and also alleged that GPC's Executive Vice
President made material false statements in GPC's April 1, 1991,
submittal to the NRC that responded to allegations in the original
Petition. The supplement also alleged that false statements had been
made to the NRC by the same individual during a transcribed meeting on
January 11, 1991, to discuss the formation and operation of SONOPCO.
Based on these allegations, Petitioners requested the NRC to take
immediate steps to determine if GPC's current management has the
requisite character, competence, fundamental trustworthiness, and
commitment to safety to continue operating a nuclear facility.
Several issues in the Petition were further defined and reviewed in
connection with the licensing proceeding before the Atomic Safety and
Licensing Board (Docket Nos. 50-424-OLA-3; 50-425-OLA-3) regarding
GPC's application for license amendments to transfer operating
authority of the Vogtle facility to Southern Nuclear Operating Company
(SONOPCO), and proceedings before the U.S. Department of Labor (DOL) as
a result of separate discrimination suites filed by Messrs. Hobby (DOL
Case No. 90-ERA-30) and Mosbaugh (DOL Case Nos. 91-ERA-001 and 91-ER-A-
011). Although the licensing proceeding concluded without a final Board
decision when the parties settled and Mr. Mosbaugh withdrew as sole
intervenor, the NRC staff has considered the evidence for the common
issues in reaching decisions on the 10 CFR 2.206 Petition. The NRC
staff recognizes that Mr. Mosbaugh has withdrawn his interest in the
Petition. Nevertheless, the interest of Mr. Hobby in the joint Petition
remains and is the purpose for the Acting Director's action to address
the Petition. The decisions of the Secretary of Labor regarding the
discrimination suites of Messrs. Hobby and Mosbaugh have been addressed
by the NRC by means of enforcement action.
As discussed in the Director's Decision, certain concerns raised by
the Petitioners are partially substantiated. Violations of regulatory
requirements have occurred in the operation of the Vogtle facility. A
number of violations were identified and three civil penalties have
been issued to GPC for certain of these violations. The three civil
penalties resulted from (1) opening a valve when it was required to be
closed by the Vogtle Technical Specifications to protect against a
potential ``boron dilution'' event (2) providing inaccurate and
incomplete information to the NRC regarding diesel generator testing,
and (3) violating 10 CFR 50.7, ``Employee Protection,'' by
discriminating against Messrs. Hobby and Mosbaugh for engaging in
protected activities. The NRC has issued letters to GPC and to several
GPC and SONOPCO individuals reminding them of their obligations to
provide information to the NRC that is complete and accurate in all
material respects, and of the need to ensure a proper environment in
which employees can express regulatory concerns without fear of
retaliation, harassment, intimidation, or discrimination. The licensee
has committed to provide special training and notify the NRC before the
individual who in 1990 was the Vogtle General Manager will be permitted
to participate in licensed activities. As previously mentioned,
Petitioner's request for proceedings has been
[[Page 13909]]
accomplished in large measure through the licensing transfer proceeding
and through separate actions before DOL, the results of which are
recognized by the NRC. To this extent, the Petitioners' request for
action pursuant to 10 CFR 2.206 is granted.
However, it has been determined that no unauthorized transfer of
the Vogtle operating licenses has occurred, and that the GPC nuclear
facilities are being operated in accordance with NRC regulations and do
not endanger the health and safety of the public. Additionally, based
on the staff's review of extensive information available to date,
including the results of relevant enforcement actions, it is concluded
that none of the issues call into question the licensee's character,
competence, fundamental trustworthiness, or commitment to safety in the
operation of its nuclear facilities. Therefore, the Acting Director for
the Office of Nuclear Reactor Regulation declines to take any further
action with respect to the issues raised in the Petition. To this
extent, the Petitioners' request for action pursuant to 10 CFR 2.206 is
denied.
The reasons for this denial are explained in the ``Director's
Decision Under 10 CFR 2.206'' (DD-97-06), a summary of which follows
this notice. The complete text of DD-97-06 is available for public
inspection at the Commission's Public Document Room, the Gelman
Building, 2120 L Street, NW., Washington, DC, and at the local public
document room at the Burke County Library, 412 Fourth Street,
Waynesboro, Georgia.
Dated at Rockville, Maryland, this 18th day of March 1997.
For The Nuclear Regulatory Commission.
Frank J. Miraglia, Jr.,
Acting Director, Office of Nuclear Reactor Regulation.
Summary of Director's Decision Under 10 CFR 2.206
I. Introduction
This is a summary of the final Director's Decision on the petition
of Messrs. Marvin B. Hobby and Allen L. Mosbaugh (Petitioners) dated
September 11, 1990, as supplemented October 1, 1990, and July 8, 1991,
pursuant to 10 CFR 2.206 (Petition). In CLI-93-15, 38 NRC 1 (1993), the
Commission vacated and remanded a partial decision on the Petition, DD-
93-8, 37 NRC 314 (1993), dated April 23, 1993, and directed that the
NRC staff consider the outcome of a pending licensing transfer
proceeding on the Vogtle facility before acting on the Petition, due to
the overlap in issues. After closure of the evidentiary record and
before issuance of a decision, the Licensing Board terminated the
Vogtle licensing transfer proceeding based upon a settlement agreement
between Georgia Power Company (GPC or the licensee) and the sole
intervenor, Mr. Mosbaugh. The final Director's Decision addresses the
matters considered in the partial Director's Decision and the balance
of the Petition in light of the information disclosed in the licensing
transfer amendment proceeding, in NRC inspections, investigations, and
enforcement actions, and decisions by the Department of Labor.
Although Mr. Mosbaugh has withdrawn his interest in the 10 CFR
2.206 Petition, Mr. Hobby's request is still pending before the NRC.
Inasmuch as the Petition was jointly filed by Messrs. Mosbaugh and
Hobby and it is difficult to segregate their concerns, the final
Director's Decision addresses all matters raised in the Petition, as
supplemented by the hearing record.
II. Discussion
The Petitioners made a number of allegations about the management
of the GPC nuclear facilities (Hatch and Vogtle). Specifically, they
alleged that:
1. GPC illegally transferred its operating licenses to Southern
Nuclear;
2. GPC knowingly included misrepresentations in its response to
concerns of a Commissioner about the chain of command for the Vogtle
facility;
3. GPC made intentional false statements to the NRC about the
reliability of a diesel generator (DG) whose failure had resulted in a
Site Area Emergency (SAE) at Vogtle;
4. A GPC executive submitted perjured testimony during a DOL
proceeding under Section 210 of the Energy Reorganization Act;
5. GPC repeatedly abused Technical Specification (TS) 3.0.3 at the
Vogtle facility;
6. GPC repeatedly and willfully violated Technical Specifications
(TSs) at the Vogtle facility;
7. GPC repeatedly concealed safeguards problems from the NRC;
8. GPC operated radioactive waste systems and facilities at Vogtle
in gross violation of NRC requirements;
9. GPC routinely used nonconservative and questionable management
practices at its nuclear facilities; and,
10. GPC retaliated against managers who made their regulatory
concerns known to GPC or Southern Nuclear management.
Mr. Mosbaugh had previously informed NRC's Office of Investigations
(OI) of some of these allegations. The Petitioners requested the NRC to
institute proceedings and take swift and immediate action based on
these allegations. On October 23, 1990, Dr. Thomas E. Murley, who was
then the Director, NRR, acknowledged receiving the Petition and
concluded that no immediate action was necessary regarding these
matters. He made this determination based on completed and continuing
NRC inspections and investigations of the licensee and particularly of
the operation of the Vogtle facility.
On July 8, 1991, the Petitioners submitted ``Amendments to
Petitioners Marvin Hobby's and Allen Mosbaugh's September 11, 1990,
Petition; and Response to Georgia Power Company's April 1, 1991,
Submission by its Executive Vice President, Mr. R. P. McDonald''
(Supplement). In the Supplement the Petitioners alleged that:
1. GPC's Executive Vice President made material false statements in
GPC's April 1, 1991, submittal to the NRC regarding the participants in
an April 19, 1990, telephone conference call; and,
2. This same Executive Vice President made false statements to the
NRC at a transcribed meeting on January 11, 1991, which discussed the
formation and operation of Southern Nuclear.
The Petitioners requested that the NRC take immediate steps to
determine if GPC's current management has the requisite character and
competence to operate a nuclear facility. On August 26, 1991, Dr.
Murley acknowledged receiving the Supplement and informed the
Petitioners that no immediate action was required and that the specific
issues raised in the Supplement would be addressed in a Director's
Decision (DD).
On October 22, 1992, in response to a Federal Register notice of
the proposed issuance of these license amendments (57 FR 47135, October
14, 1992), Messrs. Mosbaugh and Hobby filed a petition for leave to
intervene and request for hearing. Mr. Hobby was denied intervenor
status for lack of standing. In LBP-93-5, 37 NRC 96 (February 18,
1993), Mr. Mosbaugh was admitted as an intervenor along with a single
contention:
The license to operate the Vogtle Electric Generating Plant,
Units 1 and 2, should not be transferred to Southern Nuclear
Operating Company, Inc., because it lacks the requisite character,
competence and integrity, as well as the necessary candor,
truthfulness and willingness to abide by regulatory requirements.
The bases for the admitted contention alleged that (1) the license
transfers had already taken place because Southern Nuclear had assumed
control of the
[[Page 13910]]
operation of the Vogtle facility without prior approval from the NRC,
and (2) officials of the SONOPCO Project (the predecessor organization
to Southern Nuclear) conspired to submit false information to the NRC
concerning safety-related information regarding DG testing following
the March 1990 SAE.
On April 23, 1993, the Director, NRR, issued DD-93-8, NRC 314, in
which he resolved several matters. In summary, the Director determined
that:
1. No unauthorized transfer of the Vogtle licenses had occurred;
2. There is no information beyond the Petitioners' opinions to
support the position that GPC's omission from a description of their
chain of command at a Commission meeting on March 30, 1989, was
intentional;
3. GPC does not routinely threaten the safe operation of the Vogtle
facility by allowing entry into TS 3.0.3;
4. Although TS violations had occurred, Petitioners' claim that
they were willful was not substantiated;
5. Failures to make timely reports to the NRC of safeguards
problems were due to GPC's cumbersome system for evaluating security
findings, rather than being due to any willful attempt to impede the
reporting process;
6. The relevant facts do not support a conclusion that GPC wilfully
violated NRC requirements or wilfully operated the radioactive waste
system in a manner to endanger public health and safety; and,
7. The GPC nuclear facilities were being operated in accordance
with NRC regulations and do not endanger public health and safety.
Decisions on the Petitioners' issues of intentional false
statements to the NRC regarding DG reliability, perjured testimony by a
GPC executive in a DOL proceeding, and discrimination against managers
who raised regulatory concerns were deferred pending the completion of
OI investigations and the issuance of a DOL decision.
In CLI-93-15, 38 NRC 1 (July 14, 1993), the Commission vacated and
remanded DD-93-8, and directed that the staff consider the outcome of
the Vogtle license amendment proceeding before acting on the Petition
due to the overlap in issues.
Several extensive reviews of the above concerns have been conducted
by the NRC. The NRC performed special inspections, OI performed
investigations, an Atomic Safety and Licensing Board (ASLB) held
hearings on the contention challenging Southern Nuclear's character,
and the Department of Labor (DOL) held hearings concerning alleged
discrimination against Messrs. Hobby and Mosbaugh by licensee
management.
Litigation concerning the contention in the license amendment
proceeding was extensive and included over 35 prehearing depositions,
over 12,500 pages of hearing transcripts, and nearly 600 documentary
exhibits. After the hearings were completed and prior to issuance of an
ASLB decision on the contention, Mr. Mosbaugh and licensee arrived at a
settlement agreement that resulted in, among other things, Mr. Mosbaugh
withdrawing his contention and filing a joint motion (with the
licensee) requesting that the Board terminate the proceeding without
issuance of a Board order setting forth its findings and conclusions.
The Board granted the request and dismissed the contention (LBP-96-16,
44 NRC 59 (August 19, 1996)).
The dismissal of the contention did not address the potential
safety implications of the 2.206 Petition as supplemented by the
hearing record. The staff has considered the testimony of staff
witnesses, including staff engineers, supervisors, and senior managers,
the technical issues raised, and the staff's observations and
assessments of licensee performance to resolve the issues raised by the
Petition. The following is a summary of the conclusions in the
Director's Decision.
A. Illegal License Transfers, and Misrepresentations of Management
Control
1. Illegal License Transfers
The Petition alleged that GPC improperly transferred control of its
nuclear licenses to Southern Nuclear in that Mr. Joseph M. Farley (who
was an officer of GPC's parent company, Southern Company, and its
subsidiary, Southern Company Services) acted as Chief Executive Officer
(CEO) of SONOPCO and was responsible for operating the GPC nuclear
facilities and made or influenced budget and hiring decisions,
beginning with the first of three phases in the planned transition to
Southern Nuclear. The Petitioners state that the nuclear officers in
SONOPCO Project reported to Mr. Farley, rather than to Mr. Dahlberg,
GPC's CEO, and that Mr. Farley controlled the Vogtle facility based
upon his involvement in (1) controlling daily operations, (2)
establishing and implementing nuclear policy decisions, (3) employing,
supervising, and dismissing nuclear personnel, and (4) controlling
costs. Intervenor also asserts that numerous documents and statements
provided to the NRC regarding the organizational structure and
responsibilities for managerial control of the Vogtle facility were
inaccurate or incomplete because they do not show Mr. McDonald
reporting to Mr. Farley or Mr. Farley functioning as the de facto Chief
Executive Officer of the SONOPCO Project.
The staff's review concluded that Intervenor's assertion that Mr.
Farley functioned as the de facto Chief Executive Officer of the
SONOPCO Project is not supported by the record. Mr. McDonald did not
report to Mr. Farley regarding GPC licensed activities. The items cited
do not demonstrate that Mr. Farley exercised control over licensed
activities at GPC's nuclear facilities during his involvement in the
SONOPCO Project. Rather, the record shows that GPC controlled the daily
operations of the Vogtle facility in accordance with a chain of command
extending from the Vogtle General Manager, through the Vice President
of the Vogtle facility, through the Senior Vice President--Nuclear
Operations, through the Executive Vice President--Nuclear Operations,
to the President and CEO of GPC. A Nuclear Operations Overview
Committee of the GPC Board of Directors conducted periodic reviews of
the regulatory and operational performance of GPC's nuclear plants. The
hearing record shows that nuclear policy decisions for the Vogtle
facility were established and implemented by GPC, and there was no
evidence that Mr. Farley established the outage philosophy or any other
operational policies for the Vogtle facility. Mr. Farley's limited
involvement in a 1989 rate case matter before the Georgia Public
Service Commission (i.e., his review of draft testimony regarding
alternative performance standards) did not indicate any control of
GPC's nuclear operations or licensed activities. Intervenor also
provided no information that The Southern Company Management Council
acted as the SONOPCO Project board of directors until the Project was
incorporated.
Regarding the assertions that Mr. Farley controlled the Vogtle
facility through personnel decisions, the record does not show that Mr.
Farley controlled GPC nuclear facilities by employing, supervising, and
dismissing nuclear personnel, or that GPC provided inaccurate
information to the NRC regarding Mr. Farley's involvement with
personnel matters.
The hearing record does not support a conclusion that GPC
misrepresented its budgets affecting the operation of GPC licensed
facilities. There is no basis to conclude that the particular process
GPC used to develop its budget showed that Mr. Farley, The Southern
Company,
[[Page 13911]]
or SONOPCO Project controlled the operation of the Vogtle facility.
Rather, the record shows that GPC was responsible for the costs of the
Vogtle facility. After review by GPC's Management Council, the
operating and capital budgets were approved by GPC's President and CEO,
and the capital budget was also approved by the GPC Board of Directors.
The record does not support that Messrs. Farley and Edward L. Addison,
the President and CEO of The Southern Company, approved GPC's nuclear
budgets. As an Executive Vice President of The Southern Company, Mr.
Farley was involved in reviewing the nuclear budgets as part of the
normal process for preparing annual budgets in the Southern system.
Given The Southern Company's holding company status, Mr. Addison's
involvement in reviewing and providing guidelines and requirements for
adequate earnings and reasonable capital needs was appropriate.
The record shows that GPC provided some inaccurate or incomplete
information to the NRC when describing its organization and plans to
form Southern Nuclear, and when responding to the Petition. This
information involved (1) the omission of Mr. Hairston when Mr. McDonald
described the Vogtle chain of command during a March 30, 1989, meeting,
(2) a 1989 FSAR organizational chart showing the position of Mr.
Dahlberg as ``Chairman and CEO'' rather than ``President and CEO'', and
(3) GPC's April 1991 written response to the Petition indicating that
the GPC Management Council included all Senior Vice Presidents (which
was inaccurate because Mr. Hairston was not a member), and indicating
Mr. Farley's title in 1988 to be Executive Vice President--Nuclear of
The Southern Company (a position he did not assume until March 1,
1989). This inaccurate or incomplete information was of minor safety
significance in terms of NRC understanding of the proposed transfers,
did not mislead the NRC, and was not sufficient to warrant NRC
enforcement action nor conclusions that (1) GPC concealed an
unauthorized role of Mr. Farley or a de facto, unauthorized
organization for control of GPC nuclear facilities, or (2) GPC lacks
the requisite character and integrity to be a licensee.
The staff has reviewed the Vogtle Final Safety Analysis Report
(FSAR), the Vogtle licenses, records of an NRC Special Inspection
conducted to review the SONOPCO management organization, and testimony
of key officials taken under oath in the license amendment proceeding,
as well as the evidence proffered by the Intervenor in the license
amendment proceeding. This information established that the
responsibility for decisions affecting the operation of the GPC plants
rested with GPC's Senior Vice President--Nuclear Operations, who at the
time was Mr. Hairston. The Petitioners' concerns do not warrant the
conclusion that SONOPCO was in control. Rather, the staff finds that
during the period of time in question, the chain of command was from
the respective vice presidents for the Vogtle and Hatch facilities to
Mr. Hairston. Mr. Hairston reported to Mr. McDonald, who reported to
Mr. Dahlberg, President of GPC. Each of these individuals was an
elected officer of GPC, and the reporting chain at that time progressed
up to the President of GPC.
Therefore, the staff concludes that GPC did not transfer control of
the operating licenses for the Vogtle facility without the prior
consent of the NRC and that GPC did not mislead the NRC in any material
respect regarding control of the operation of the Vogtle facility.
2. Chain of Command Misrepresentations at a Commission Meeting
The Petitioners stated that during a Commission meeting to vote on
the full power operating license for Vogtle Unit 2 on March 30, 1989,
GPC misled the Commission about the chain of command from the Vogtle
Plant Manager to the CEO during their response to a question from one
of the Commissioners.
Shortly after reading the transcript of the meeting, Mr. W.G.
Hairston, on May 1, 1989, sent the NRC a letter that corrected the
meeting transcript, and noted that GPC had inadvertently omitted him in
the management chain in their reply to the Commissioner. The letter
further stated that the organization was as described on figures
13.1.1-1 and 13.1.1-2 of the FSAR. The NRC previously had been apprised
of the GPC organization, including Mr. Hairston's position, by an FSAR
amendment dated November 23, 1988, and NRC staff members present at the
Commission meeting were aware of the correct information. The staff has
no basis to conclude that GPC's omission of the Senior VP position in
their oral remarks was intentional. The staff concluded, after
consultation with the Commission, that GPC's omission was not
significant because the information would not likely have caused the
Commission to reach a different decision regarding the Unit 2 license
application. In addition, the staff had previously been provided and
was aware of the correct information. Thus, enforcement action was not
appropriate.
3. Misrepresentations Concerning the SONOPCO Project
The Petition asserted that GPC (Mr. McDonald) falsely stated during
a transcribed meeting with the staff on January 11, 1991, that Mr.
Farley had no responsibilities for administrative matters related to
the SONOPCO Project. Mr. Farley claims he had been involved in SONOPCO
administrative matters since the SONOPCO Project was formed in November
1988.
Based on the meeting transcript and his testimony during the ASLB
hearing, Mr. McDonald's January 11, 1991, statement was not inaccurate
in terms of the functions depicted on the charts discussed during the
meeting. Mr. McDonald testified during the hearing that his statement
was that prior to the incorporation of Southern Nuclear, Mr. Farley had
been performing as a Vice President of The Southern Company, had been
providing certain services to him under a contract with SCS, and had no
responsibility for certain other administrative support that was
depicted on organization charts discussed during the meeting.
Administrative support was being performed by the Southern Company
Services Vice President for Administrative Services (Mr. McCrary) for
Mr. McDonald pursuant to the April 24, 1989, agreement. While Mr.
McCrary provided administrative services to support Mr. Farley's role
in guiding the formation of Southern Nuclear and Mr. Farley's general
industry activities, Mr. McCrary did not report to Mr. Farley with
respect to the administrative support function for the Vogtle facility.
B. Reporting of DG Reliability
The Petitioners alleged that GPC made intentional false statements
to the NRC about the reliability of a DG whose failure had resulted in
an SAE at Vogtle. OI conducted an investigation and issued a report on
December 17, 1993. Based on its evaluation of the evidence gathered by
OI, and other information, the NRC staff determined that, contrary to
the requirements of 10 CFR 50.9, the licensee had failed on four
occasions to provide information concerning DG start counts (and the
reasons for errors in those counts) to the NRC that was complete and
accurate in all material respects. An examination of how the
performance failures of licensee staff, supervisors and managers
contributed to these errors resulted in the violations being judged by
the NRC to collectively represent a very significant regulatory
concern. Enforcement action was taken by the issuance of a Modified
Notice of Violation and Imposition of Civil
[[Page 13912]]
Penalties (Notice) (EA 93-304, February 13, 1995) which characterized
the violations as a Severity Level II problem. The licensee paid a
$200,000 civil penalty on March 1, 1995. Corrective actions taken by
licensee management have included:
1. Making the initial notice of violation available to all
employees and committing to posting an NRC Order if one is issued;
2. A letter from the Senior Vice President to the Vice Presidents
for Hatch and Vogtle regarding the importance of thorough record
keeping during off-normal hours;
3. Counseling of specific individuals by the Senior Vice President,
and the issuance of an ``Oral Reminder'' pursuant to the licensee's
Positive Discipline System;
4. A letter from the Executive Vice President--Nuclear Operations
to nuclear operations employees that stressed the importance of
effective communications and the effective resolution of concerns;
5. Posting copies of 10 CFR 50.9 and encouraging employees to read
it;
6. Meetings held by the Senior Vice President--Nuclear Operations
with employees at the Hatch and Vogtle sites to discuss GPC's policy of
open, complete and accurate communications with the NRC, and a letter
to all employees on the same subject;
7. Management observation of communications with the NRC to ensure
that the enforcement action does not adversely affect the completeness
of statements; and,
8. Posting a notice to all employees of the availability of GPC's
reply to the initial notice of violation.
The staff reviewed the licensee's corrective actions and concluded
that the actions were sufficient.
The staff's evaluation also resulted in Demands for Information
(DFIs) being issued to the licensee and six individuals who
acknowledged their roles and responsibilities in the activities that
were the bases for the enforcement action. The performance of the
Vogtle General Manager (GM) through August 1990 contributed directly to
each of the failures to meet 10 CFR 50.9. GPC and that individual
acknowledged his role and responsibility in the events underlying the
enforcement action and informed the staff in separate letters dated
February 1, 1995, that the individual had requested, and his current
employer (Southern Nuclear) had agreed to implement a personal training
program to strengthen his ability to perform any future line management
role in support of licensed activities. Southern Nuclear and GPC
committed that the former GM would not assume a line management
position for a GPC or Southern Nuclear plant unless he had
satisfactorily completed training in management communications and
responsibilities, and the NRC received 60 days prior written notice of
the assignment. As documented in the February 13, 1995, Modified Notice
of Violation and Imposition of Civil Penalties, the staff concluded
that, in light of these commitments, the staff had no present concerns
with the character and integrity of the individuals or the licensee
arising out of these events, and no further enforcement action was
necessary.
C. DOL Testimony
The Petitioners asserted that (1) GPC's Executive Vice President
knowingly submitted false testimony in a DOL proceeding involving the
discrimination complaints of two GPC employees and (2) that Mr. Hobby
advised GPC's counsel before the DOL hearing that the proposed
testimony was false and that GPC's counsel responded by advising him
that the testimony would have to be changed.
The DOL case resulted in a Decision and Remand Order (Decision) by
the Secretary of Labor (Secretary) on August 4, 1995. The Secretary
found that GPC had discriminated against Mr. Hobby for engaging in
protected activities, and stated, in relevant part: ``Because I found
other evidence sufficient to establish that Complainant [Mr. Hobby]
engaged in protected activity on January 2, [1989 (the pre-hearing
meeting),] it was unnecessary to consider at that juncture whether
counsel attempted to suborn Complainant to perjury. Even if counsel
did, that evidence would not alter this decision.''
As discussed more fully below, based on the Secretary's Decision,
and a similar Decision in a proceeding regarding an alleged unlawful
termination of Mr. Mosbaugh's employment, the staff issued two Severity
Level I Notices of Violation to GPC. The staff also issued individual
letters to certain senior corporate managers admonishing them to ensure
that a proper environment is maintained in which employees can express
regulatory concerns without fear of retaliation, harassment,
intimidation, or discrimination.
D. Use of TS 3.0.3
The Petitioners asserted that GPC engaged in unsafe practices in
that (1) GPC repeatedly allowed the Vogtle facility to enter TS 3.0.3
by rendering both trains of safety-related load sequencers for the DGs
inoperable, (2) GPC did not make the required notifications to the NRC
when TS 3.0.3 was entered, and (3) GPC failed to recognize that the
loss of a load sequencer resulted in entry into TS 3.0.3.
The staff reviewed entries into TS 3.0.3 through inspections
conducted by region-based inspectors and the observations of the
resident inspectors. The staff also reviewed the completed maintenance
work orders performed on the load sequencers and the related
surveillance tests. The staff found several instances in which the work
performed would have required the load sequencers to be de-energized.
However, the associated unit was found not to have been in Modes 1, 2,
3, or 4 at the time this work was performed and thus, no TS LCO
applied. The surveillance test review did not reveal any examples of
the load sequencers having been de-energized while in Modes 1 through 4
at the time the test was performed and thus, no TS LCOs applied. Based
on its review, the staff concluded that GPC did not routinely allow the
Vogtle facility to enter TS 3.0.3 by rendering both trains of safety-
related load sequencers for the DGs inoperable.
In accordance with 10 CFR 50.72, Immediate Notification
Requirements for Operating Nuclear Power Reactors, licensees are
required to make immediate (i.e., within 1 or 4 hours, depending on the
circumstances) reports to the NRC of any declaration of an emergency
class specified in the Emergency Plan, and certain non-emergency
events. Non-emergency events include such items as the initiation of
any nuclear plant shutdown required by the TS, any deviation from the
TS authorized by 10 CFR 50.54(x), any condition where the nuclear power
plant (including its principle safety barriers) becomes seriously
degraded, and any natural phenomenon or other external condition that
poses an actual threat to the safety of the nuclear plant or
significantly hampers site personnel in the performance of duties
necessary for the safe operation of the plant. In 10 CFR 50.73,
Licensee Event Report System, events are identified for which written
reports will be made to the NRC within 30 days. These events include
several of the events requiring immediate reports pursuant to 10 CFR
50.72, plus additional events such as any event or condition that alone
could have prevented the fulfillment of the safety function of certain
structures or systems. The Commission's regulations do not contain an
explicit requirement that an entry into TS 3.0.3, in and of itself, be
reported. Licensees are
[[Page 13913]]
required by 10 CFR 50.72 to notify the NRC within 1 hour of the
initiation of any plant shutdown required by the plant's TS. Thus, the
NRC is promptly notified of entries into TS 3.0.3 if the plant
initiates a shutdown as a result of the problem that caused entry into
the TS. There is no requirement to notify the NRC of entries into TS
3.0.3 if a shutdown is not initiated. The staff has no basis to
conclude that the licensee's activities constituted unsafe practices or
that these activities indicated that the character of the licensee,
including those GPC individuals who will be employed by Southern
Nuclear after the licenses are transferred, was unsuitable for
operating a nuclear power plant.
E. Willful TS Violations
The Petitioners stated that GPC willfully and knowingly violated
Vogtle Unit 1 TSs during the October 1988 refueling outage by opening
boron dilution valves required to be locked closed by TSs. The
Petitioners claimed that (1) the valves were opened while the coolant
level in the reactor vessel was lowered to the mid-loop level, and that
this placed the plant in an unanalyzed condition creating the risk of
an uncontrolled boron dilution accident and an inadvertent criticality,
(2) the valves were opened to expedite the outage so the plant could be
placed back on line according to the schedule, and (3) the violation of
TSs to stay on schedule was due, in part, to a senior management
philosophy that outages must be scheduled assuming that everything goes
right and that contingency or extra time is not to be included in the
schedule.
After reviewing OI Report 2-90-001 and responses to four DFIs, and
after an enforcement conference, the staff sent letters to the
Operations Manager, the Operations Superintendent, and the Shift
Supervisor stating that no actions would be taken regarding their
individual NRC licenses. The staff also stated that, although their
actions did not meet NRC expectations, the evidence was insufficient to
support a conclusion that their actions constituted an attempt to
intentionally circumvent the TSs. On December 31, 1991, after
consultation with the Commission, the staff issued a Severity Level III
Notice of Violation and Proposed Imposition of Civil Penalty (EA 91-
141). GPC paid a $100,000 civil penalty on July 9, 1992.
With respect to the placement of the plant in a condition that
could have resulted in an uncontrolled dilution event and inadvertent
reactor criticality, the staff reviewed an analysis of this event that
Westinghouse later performed for GPC. The staff concluded that,
although the TSs in effect at the time were violated, the actual
opening of the valves was of insufficient duration to create a
criticality event and did not endanger public health and safety.
With respect to the Petitioners' claim that the valves were opened
to expedite the outage, the staff, based on its review, did not find
sufficient basis to conclude that this evolution had been performed to
meet the outage schedule. The NRC did not require chemical cleaning
before the utility restarted the reactor, and cleaning expended time
during the outage.
On February 26, 1990, the staff found that the dilution valves
identified above were required to be locked closed, but were not locked
while at mid-loop as required by the TSs. The Petitioners assert that
this is another example of a willful violation of TSs by Vogtle senior
management. Instead of installing a mechanism to mechanically secure
this valve, the licensee had placed a hold tag on the valve, which
provided only administrative control to preclude valve operation. GPC
subsequently agreed that this method was unacceptable and took action
to install a mechanical locking device. On April 26, 1990, the staff
issued Notice of Violation, 50-424,425/90-05-01, ``Failure to
Mechanically Secure Valve 1-1208-U4-176 During Mode 5 As Required By TS
3.4.1.4.2.C'' (Severity Level IV). The staff concluded that, although a
violation occurred, the error in TS interpretation was not an example
of a willful violation of TSs by Vogtle senior management. Thus, there
is no basis to conclude that GPC willfully and knowingly violated the
TSs.
F. Safeguards Problems
The Petitioners alleged that (1) GPC personnel, including a Vice
President and General Manager, and a Southern Company Services Manager,
knowingly and repeatedly hid safeguards problems from the NRC and
willfully refused to comply with reporting requirements, (2) the GPC
Vice President made false statements to the NRC during an Enforcement
Conference about the status of safeguards materials, and that the false
statements probably influenced a subsequent civil penalty action taken
by the NRC, (3) on July 23, 1990, plant and SONOPCO senior management
prevented the Site Security Manager from making a notification within 1
hour as required by 10 CFR 73.71, and (4) the manager was prevented
from making the call in order to delay or defuse the NRC's knowledge of
programmatic problems on the part of the licensee regarding the
handling of safeguards documents.
OI investigated the allegation that GPC knowingly and repeatedly
hid safeguards problems from the NRC and willfully refused to comply
with mandatory reporting requirements. OI also investigated the
allegation that the GPC Vice President made false statements to the NRC
in an Enforcement Conference concerning the status of safeguards
material. The investigations did not substantiate that GPC withheld
pertinent information from the NRC at the time of the Enforcement
Conference or that GPC management impeded the reporting of safeguards
events. On the basis of the OI investigations, the staff concluded that
the Severity Level II violation and $50,000 civil penalty issued by the
staff on June 27, 1990, for failing to properly secure safeguards
information was appropriate for the volume and content of the
safeguards information involved. GPC paid the civil penalty on July 27,
1990.
OI also investigated the allegation that plant and SONOPCO senior
management prevented the Site Security Manager from making
notifications within 1 hour as required by 10 CFR 73.71 in two
instances. After reviewing OI's investigation results, the staff
concluded that both of the failures to make timely reports were due to
the GPC's cumbersome system for evaluating corporate security findings
through the site security organization, rather than due to any willful
attempt to impede the reporting process.
G. Operation of Radioactive Waste Systems
The Petitioners asserted that GPC endangered public health and
safety by operating a temporary radioactive waste system known to be in
gross violation of NRC requirements. The Petitioners also state that
Vogtle's General Manager (GM) had intimidated the members of the Plant
Review Board (PRB) when they attempted to consider if the use of the
waste system should be resumed.
An NRC Special Inspection Team reviewed these items and discussed
its findings in Supplement 1 to Inspection Report 50-424,425/90-19,
dated November 1, 1991. The licensee's operation of the radwaste
systems was found to be acceptable. The inspection team concluded that
although the system was originally installed without an adequate safety
evaluation and did not meet regulatory guidance, the subsequent safety
evaluations were acceptable for the system's use. One issue was
identified in the inspection report as warranting further review by the
licensee under the provisions of 10 CFR 50.59.
[[Page 13914]]
Regarding the assertion that the GM had intimidated PRB members,
the inspection team found one case where a voting PRB member felt
intimidated and feared retribution because the GM was present at the
meeting. The staff concluded that the allegation was substantiated.
However, the PRB member stated that he did not change his vote in
response to GM pressure, and the GM subsequently met with the PRB
members to allay their fears. Since the level of intimidation perceived
by the PRB member was insufficient to have any affect on the PRB
member's safety decision, and the GM subsequently addressed the
intimidation concern with the PRB, further regulatory action based on
this event was not warranted.
H. GPC Statement On Management Participation in a Telephone Call
The Intervenor contended that GPC, in their April 1, 1991, response
to the Petition, intentionally tried to conceal the participation of
the Senior VP--Nuclear Operations in an April 19, 1990, conference call
regarding a Licensee Event Report (LER).
The Senior VP participated in one of at least two conference calls
known to have taken place on April 19, 1990, before the LER was issued
that same day. However, there is no evidence that the GPC corporate
official who signed the April 1, 1991, Petition response (the GPC
Executive Vice President) was aware of the fact that the Senior VP had
participated in one of the April 19 conference calls. The staff review
of a transcript of Mr. Mosbaugh's surreptitiously recorded audio tape
of the calls, that was admitted as evidence in the licensing
proceeding, shows that the Senior VP joined one call after decisions
were made on how to convey the DG start count information in the LER,
and the Senior VP did not participate in a second conference call that
finalized the LER language. The staff has determined that there is
insufficient basis to conclude that GPC, in their April 1, 1991,
response to the Petition, intentionally tried to conceal the
participation of the Senior VP--Nuclear Operations in an April 19,
1990, conference call regarding the preparation of the LER.
I. Management Retaliation
The Petition alleged that GPC retaliated against managers who made
their regulatory concerns known to GPC or SONOPCO management.
As noted previously, in 1990, Messrs. Hobby and Mosbaugh each filed
a complaint with DOL alleging, in part, that their employment
terminations constituted unlawful discrimination against them for
engaging in protected activities (i.e., expressing safety concerns).
The Secretary found that the terminations of employment resulted from
unlawful discrimination by senior licensee management personnel. The
NRC reviewed the Secretary's decisions and determined that violations
of 10 CFR 50.7, (Employee Protection) had occurred. Two Severity Level
I Notices of Violation were issued to the licensee as provided for by
the NRC's Enforcement Policy. Although the NRC took no enforcement
actions directly against the individuals involved, the NRC did issue
letters to several senior management personnel to emphasize that
harassment, intimidation and discrimination against licensee employees
for engaging in protected activities is unacceptable.
GPC corrective actions included emphasizing to employees that they
are encouraged to raise safety concerns and that harassment,
intimidation and discrimination against employees for raising those
concerns is contrary to a strongly supported management policy
prohibiting such retaliatory measures. Licensee corporate management
communicated this message in writing, and at special meetings with site
employees to focus on this concern.
The staff concludes that the significant enforcement action by the
NRC, in addition to ASLB hearing activities and the DOL Orders, is
likely to sensitize licensee management to the seriousness of problems
of this nature and ensure a proper environment in which employees can
express regulatory concerns without fear of retaliation, harassment,
intimidation, or discrimination.
J. Management Practices
The Petitioners stated that GPC routinely used nonconservative and
questionable management practices at its nuclear facilities. Examples
provided by the Petitioner include the improper use of TS 3.0.3 (see D.
above), willful TS violations (see E. above), safeguards problems (see
F. above), and operation of a radioactive waste system known to be in
violation of NRC requirements (see G. above). To address the
Petitioners' general characterization of licensee management practices
as being nonconservative and questionable, NRC witnesses, including
staff engineers, supervisors, and senior managers provided testimony
during the ASLB proceeding on several technical issues in addition to
observations and assessments of GPC's performance from several
perspectives.
The staff concluded that GPC's performance problems were not
sufficient to establish that Southern Nuclear (and the GPC employees
who will work for that company if the transfers were granted) lack the
requisite character to be a licensee. The staff cited GPC's overall
performance in keeping the NRC informed of DG post-repair and trouble
shooting activities, GPC's technical competence in addressing those
matters and the efforts of the GPC Senior Vice President--Nuclear
Operations to keep the NRC informed of errors as GPC became aware of
them.
In a letter, dated December 23, 1996, Southern Nuclear and GPC
iterated their 1995 commitment that the former GM would not assume a
line management position for a GPC or Southern Nuclear plant unless he
had satisfactorily completed training in management communications and
responsibilities, and the NRC received 60 days prior written notice of
the assignment. The staff has relied on this commitment in evaluating
the proposed transfers. A condition has been included in the Order
authorizing these license transfers that the staff will receive 60 days
prior written notice of the licensee's intent to assign the individual
to a line management position at Vogtle.
The staff has concluded that, although significant violations were
identified against GPC in the past, corrective actions have been
implemented. There has been no showing that Southern Nuclear or GPC
(including the GPC employees who will work for Southern Nuclear if the
transfers were granted) lacks the requisite character to be a licensee.
In light of the various regulatory actions that have already been taken
by the NRC on issues raised in the Petition, including the Order
provision regarding the former Vogtle General Manager, and corrective
actions taken by the licensee, no further action is necessary.
III. Conclusion
As summarized above, NRC has conducted several inspections,
investigations, and technical reviews regarding the concerns in the
Petition, and proceedings before NRC and DOL have been conducted
regarding most of the concerns. Some of the concerns raised by the
Petitioners were substantiated. Violations of regulatory requirements
have occurred. Notices of Violation and civil penalties have been
issued to the licensee, letters have been issued to several
individuals, and certain conditions regarding one individual are being
imposed by NRC in conjunction with the license transfers. To this
extent, the Petitioners' request
[[Page 13915]]
for action pursuant to 10 CFR 2.206 has been granted.
On the basis of the NRC staff's review and the record of the Vogtle
license transfer amendment proceeding, I conclude that no unauthorized
transfer of the Vogtle or Hatch operating licenses occurred, and that
the GPC nuclear facilities are being operated in accordance with NRC
regulations and do not endanger the health and safety of the public. On
balance, the evidence does not support the conclusion that GPC, SONOPCO
Project, or Southern Nuclear deliberately provided false or misleading
information to the NRC or that Southern Nuclear or GPC (including the
GPC employees that would be employed by Southern Nuclear if the
proposed license transfer is authorized) lack the requisite character
and integrity to be an NRC licensee as required by section 182 of the
Atomic Energy Act, 42 U.S.C 2232, and 10 CFR 50.80. Thus, there is no
basis upon which to grant Petitioners' request that the operation of
the facility be modified, suspended or revoked.
With respect to Petitioners' request that the NRC institute
proceedings and impose civil penalties based on the matters addressed
in the Petition, the issues in the Petition that give rise to
substantial health and safety issues have, in fact, been the subject of
a lengthy proceeding and escalated enforcement actions by the NRC.
Also, based upon the findings of the DOL, the NRC has addressed both
Petitioners' specific concerns that they were discriminated against for
engaging in protected activities (and the associated allegation that
GPC retaliates against managers who make their regulatory concerns
known) by taking escalated enforcement actions against GPC. Based on
actions already taken by the NRC staff and the licensee, there is
reasonable assurance that the GPC facilities operate with adequate
protection of the public health and safety. Therefore, I decline to
take any further action with respect to matters raised in the Petition.
To this extent, the Petitioners' request for action pursuant to 10 CFR
2.206 is denied.
A complete copy of the Director's Decision will be filed with the
Secretary of the Commission for the Commission's review in accordance
with 10 CFR 2.206(c) of the Commission's regulations. As provided by
this regulation, the Director's Decision will constitute the final
action of the Commission 25 days after the date of issuance unless the
Commission, on its own motion, institutes a review of the Director's
Decision in that time.
Dated at Rockville, Maryland, this 18th day of March 1997.
[FR Doc. 97-7317 Filed 3-21-97; 8:45 am]
BILLING CODE 7590-01-P