[Federal Register Volume 63, Number 34 (Friday, February 20, 1998)]
[Notices]
[Pages 8697-8702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4325]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-245, 50-336, 50-423, 50-213]


Northeast Utilities; Millstone Nuclear Power Station, Units 1, 2, 
and 3, Haddam Neck Plant; Issuance of Director's Decision Under 10 CFR 
2.206

    Notice is hereby given that the Director, Office of Nuclear Reactor 
Regulation, has issued a director's decision with regard to a Petition 
dated March 3, 1997, filed by Mr. Albert A. Cizek, hereinafter referred 
to as ``Petitioner.'' The Petition pertains to the Millstone Nuclear 
Power Station, Units 1, 2, and 3, and the Haddam Neck Plant.
    The Petitioner requested that the NRC:

    1. Within 30 calendar days of receiving a total of three license 
violations from the U.S. Nuclear Regulatory Commission [NRC] during 
any [3-year] period, irrespective of the violation level, the 
operating license of the facility shall be suspended for a period of 
not less than 90 days and not more than 180 days.
    2. Within 30 calendar days of receiving a total of three 
violations of 10 CFR Part 50, including all applicable appendices, 
from the [NRC] during any [3-year] period, irrespective of the 
violation level, the operating license of the facility shall be 
suspended for a period of not less than 90 days and not more than 
180 days.
    3. Within 30 calendar days of receiving a total of three 
violations of the UFSAR [Updated Final Safety Analysis Report] from 
the [NRC] during any [3-year] period, irrespective of the violation 
level, the operating license of the facility shall be suspended for 
a period of not less than 90 days and not more than 180 days.
    4. Within 30 calendar days of receiving any harassment, 
intimidation and discrimination (``HI&D'') finding by the U.S. 
Nuclear Regulatory Commission, the U.S. Department of Labor, or any 
[S]tate or [F]ederal court of competent jurisdiction, the operating 
license of the facility shall be suspended for a period of not less 
than 90 days and not more than 180 days.
    5. If, within [5] years of a license suspension based on 
paragraphs 1 through 4 above, the licensee receives a total of three 
license violations from the [NRC], irrespective of the violation 
level; receives a total of three violations of 10 CFR Part 50, 
including all applicable appendices, from the [NRC], irrespective of 
violation level;

[[Page 8698]]

receives a total of three violations of the UFSAR from the [NRC], 
irrespective of violation level; or receives any HI&D finding by the 
[NRC], the U.S. Department of Labor, or any [S]tate or [F]ederal 
court of competent jurisdiction, the operating license of that 
facility shall be permanently revoked within 90 calendar days.
    6. In the event that the license of a facility is revoked 
pursuant to paragraph 5, no operation of that facility for the 
purpose of generating electric power shall be permitted during the 
pendency of any administrative or judicial processes or appeals 
related to such revocation.
    7. In the event that the license of a facility is suspended or 
revoked under paragraphs [1] through [5], the [NRC] shall designate 
an appropriate licensee to maintain the facility in shutdown mode 
for the duration of the suspension or until such time as a new 
licensee is found to operate the facility. [Footnote omitted] NU 
[Northeast Utilities] shall be responsible for all expenses related 
to the operation of the facility during such shutdown. NU shall be 
required to post a bond in the amount of $500,000,000 ([5] hundred 
million) as reasonable assurance that it can fulfill this 
requirement.

    The Petitioner further requested that these license conditions be 
imposed on the operating licenses of Millstone Units 1, 2, and 3 before 
Commission approval to restart any of those plants, and further 
requested that these license conditions be imposed on the operating 
license of Haddam Neck before any decommissioning of that plant.
    The Director of the Office of Nuclear Reactor Regulation has denied 
the Petition. The reasons for this denial are explained in the 
``Director's Decision Pursuant to 10 CFR 2.206'' (DD-98-01), the 
complete text of which follows this notice and is available for public 
inspection at the Commission's Public Document Room, the Gelman 
Building, 2120 L Street, NW., Washington, DC, at the local public 
document rooms located at the Learning Resources Center, Three Rivers 
Community-Technical College, New London Turnpike, Norwich, Connecticut, 
and at the Waterford Library, ATTN: Vince Juliano, 49 Rope Ferry Road, 
Waterford, Connecticut, for Millstone Units 1, 2, and 3; and at the 
Russell Library, 123 Broad Street, Middletown, Connecticut, for the 
Haddam Neck Plant.
    A 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 for by this 
regulation, the 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 decision in that time.

    Dated at Rockville, Maryland, this 11th day of February 1998.

    For the Nuclear Regulatory Commission.
Samuel J. Collins,
Director, Office of Nuclear Reactor Regulation.

DD-98-01

Director's Decision Pursuant To 10 CFR 2.206

I. Introduction

    On March 3, 1997, Ernest C. Hadley, Esq., filed with the U.S. 
Nuclear Regulatory Commission (NRC or Commission) a Petition pursuant 
to Section 2.206 of Title 10 of the Code of Federal Regulations (10 CFR 
2.206), on behalf of Mr. Albert A. Cizek, hereinafter, referred to as 
Petitioner. This submittal will hereinafter be referred to as the 
Petition. The Petition was filed with the Executive Director for 
Operations of the NRC. The Petition was referred to the Director of the 
Office of Nuclear Reactor Regulations for preparation of a response.
    The Petitioner requested that the NRC impose the following license 
conditions on the operating licenses of Millstone Nuclear Power 
Station, Units 1, 2, and 3, and the Haddam Neck Plant held by Northeast 
Nuclear Energy Company (NNECO or Licensee):

    1. Within 30 calendar days of receiving a total of three license 
violations from the U.S. Nuclear Regulatory Commission [NRC] during 
any [3-year] period, irrespective of the violation level, the 
operating license of the facility shall be suspended for a period of 
not less than 90 days and not more than 180 days.
    2. Within 30 calendar days of receiving a total of three 
violations of 10 [CFR] Part 50, including all applicable appendices, 
from the [NRC] during any [3-year] period, irrespective of the 
violation level, the operating license of the facility shall be 
suspended for a period of not less than 90 days and not more than 
180 days.
    3. Within 30 calendar days of receiving a total of three 
violations of the UFSAR [Updated Final Safety Analysis Report] from 
the [NRC] during any [3-year] period, irrespective of the violation 
level, the operating license of the facility shall be suspended for 
a period of not less than 90 days and not more than 180 days.
    4. Within 30 calendar days of receiving any harassment, 
intimidation and discrimination (``HI&D'') finding by the [NRC], the 
U.S. Department of Labor, or any [S]tate or [F]ederal court of 
competent jurisdiction, the operating license of the facility shall 
be suspended for a period of not less than 90 days and not more than 
180 days.
    5. If, within [5] years of a license suspension based on 
paragraphs 1 through 4 above, the licensee receives a total of three 
license violations from the [NRC], irrespective of the violation 
level; receives a total of three violations of 10 [CFR] Part 50, 
including all applicable appendices, from the [NRC], irrespective of 
the violation level; receives a total of three violations of the 
UFSAR from the [NRC], irrespective of violation level; or receives 
any HI&D finding by the [NRC], the U.S. Department of Labor, or any 
[S]tate or [F]ederal court of competent jurisdiction, the operating 
license of that facility shall be permanently revoked within 90 
calendar days.
    6. In the event that the license of a facility is revoked 
pursuant to paragraph 5, no operation of that facility for the 
purpose of generating electric power shall be permitted during the 
pendency of any administrative or judicial processes or appeals 
related to such revocation.
    7. In the event that the license of a facility is suspended or 
revoked under paragraphs [1] through [5], the [NRC] shall designate 
an appropriate licensee to maintain the facility in shutdown mode 
for the duration of the suspension or until such time as a new 
licensee is found to operate the facility. [Footnote omitted] NU 
[Northeast Utilities] shall be responsible for all expenses related 
to the operation of the facility during such shutdown. NU shall be 
required to post a bond in the amount of $500,000,000 ([5] hundred 
million) as reasonable assurance that it can fulfill this 
requirement.

    The Petitioner further requested that these license conditions be 
imposed on the operating licenses of Millstone Units 1, 2, and 3 before 
Commission approval to restart any of those plants, and further 
requested that these license conditions be imposed on the operating 
license of Haddam Neck before any decommissioning of that plant.
    Additionally, the Petitioner requested that public hearings on the 
Petition be scheduled in the immediate vicinity of the Millstone and 
Haddam Neck reactors for the presentation of further evidence in 
support of the Petition. The Petitioner specifically requested that 
these public hearings be held and that a decision on this Petition be 
issued before restart or decommissioning of any of these units.
    The Petitioner sought the above license conditions on the basis of 
the following contentions:

    1. NU has knowingly, willingly and recklessly operated Millstone 
Unit 1, Unit 2, Unit 3 at Waterford, [Connecticut], and its 
Connecticut Yankee Nuclear Power Plant [i.e., Haddam Neck Plant] at 
Haddam Neck, [Connecticut], in violation of their respective 
operating licenses, the regulations of the NRC, and their respective 
UFSARs for a prolonged period of time, which unnecessarily but 
significantly compromised public health and safety by eroding the 
required defense in depth philosophy.
    2. NU has knowingly, willingly and intentionally harassed, 
intimidated and discriminated against its employees who raise safety 
concerns in violation of United States statutes and NRC regulations 
for a prolonged period of time, which unnecessarily but 
significantly compromised

[[Page 8699]]

public health and safety by eroding the required defense in depth 
philosophy.
    3. In the absence of express license conditions, there is no 
reasonable assurance that NU will cease and desist from engaging in 
these activities in the future.

    A letter acknowledging receipt of the Petition was sent to the 
Petitioner on April 8, 1997. In that letter, the NRC staff informed the 
Petitioner that the NRC staff had decided not to hold a public hearing 
as requested by the Petitioner. Instead, the NRC staff requested that 
the Petitioner promptly supply, in writing, any additional information 
relevant to the Petition. In letters of April 16 and July 19, 1997, the 
Petitioner reiterated his request for an informal public hearing. In a 
letter dated August 7, 1997, the NRC staff responded to the 
Petitioner's letters of April 16 and July 19, 1997, and provided its 
detailed basis for concluding that an informal public hearing as 
requested by the Petitioner was not warranted. The NRC staff also noted 
that the Petitioner had a public forum to raise his concerns through 
the regularly scheduled public meetings held in the vicinity of the 
Millstone site. The Petitioner did not provide the staff with any 
additional evidence in support of the Petition.

II. Discussion

    The NRC staff has reviewed the Petition and has not found any 
information regarding either the Millstone or the Haddam Neck 
facilities of which it was not already aware prior to receipt of the 
Petition. As discussed below, these facilities have been the subject of 
close NRC scrutiny for several years.

Millstone Facility

    With regard to the Millstone units, the NRC staff has been 
concerned for the last several years about the number and duration of 
violations at the Millstone site in the broad programmatic areas of 
design and licensing bases, testing, and radiological controls. 
Programmatic concerns in these areas, along with concerns in other 
areas, were major contributors to the decline in performance at the 
Millstone site. In the cover letter to the most recent systematic 
assessment of licensee performance (SALP) report of August 26, 1994, 
the NRC staff stated that it had noted several performance weaknesses, 
common to all three Millstone units. Among these were continuing 
problems with procedure quality and implementation, the informality in 
several maintenance and engineering programs (contributing to instances 
of poor performance), and the failure to resolve several longstanding 
problems at the site. In addition to these programmatic problems, the 
Licensee has had significant problems in dealing with employee concerns 
involving safety issues at the site.
    On November 4, 1995, the Licensee shut down Millstone Unit 1 for a 
scheduled refueling outage. The NRC sent a letter to the Licensee on 
December 13, 1995, requiring the Licensee, before restarting Millstone 
Unit 1, to inform NRC, pursuant to Section 182a of the Atomic Energy 
Act of 1954, as amended (the Act), and 10 CFR 50.54(f), of the actions 
taken to ensure that, in the future, the Licensee would operate that 
facility according to the terms and conditions of the unit's operating 
license, the Commission's regulations, and the unit's Final Safety 
Analysis Report (FSAR).
    In January 1996, NRC designated the three Millstone units as 
Category 2 on the NRC's Watch List. Plants on the Watch List in this 
category have weaknesses that warrant increased NRC attention until the 
licensees demonstrate improved performance for an extended period of 
time.
    On February 20, 1996, the Licensee shut down Millstone Unit 2 when 
it declared both trains of the high-pressure safety-injection (HPSI) 
system inoperable because of a design issue. There was a potential that 
the HPSI throttle valves could become plugged with debris when taking 
suction from the sump during the recirculation mode.
    On March 30, 1996, the Licensee shut down Millstone Unit 3 after 
finding that containment isolation valves for the auxiliary feedwater 
turbine-driven pump were inoperable because the valves did not meet NRC 
requirements. In response to a Licensee root cause analysis of 
inaccuracies in the Millstone Unit 1 FSAR, identifying the potential 
for similar configuration control problems at Millstone Units 2 and 3 
and the existing design configuration issues identified at these units, 
NRC sent 10 CFR 50.54(f) letters to the Licensee on March 7 and April 
4, 1996. These letters required that the Licensee inform the NRC of the 
corrective actions taken regarding design configuration issues at 
Millstone Units 2 and 3 before the restart of each unit.
    In June 1996, the NRC designated the three units at Millstone as 
Category 3 on the NRC's Watch List. Plants in this category have 
significant weaknesses that warrant maintaining them in a shutdown 
condition until the licensee can demonstrate to NRC that it has taken 
adequate corrective actions to ensure substantial improvement. This 
category also requires Commission approval before operations can be 
resumed.
    On August 14, 1996, the NRC issued a confirmatory order directing 
the Licensee to contract with a third party to implement an independent 
corrective action verification program (ICAVP) to confirm the adequacy 
of its efforts to reestablish the design basis and configuration 
controls for each of the three Millstone units. The ICAVP is intended 
to provide additional assurance, before a unit restart, that the 
Licensee has identified and corrected existing problems in the design 
and configuration control processes for that unit.
    On April 16, 1997, the NRC sent another 10 CFR 50.54(f) letter, 
which superseded the earlier 10 CFR 50.54(f) letters and consolidated 
its requests for information and periodic updates. The following 
information was requested: (1) significant items that needed to be 
accomplished before restart; (2) items that are to be deferred until 
after restart; (3) NU's process and rationale for deferring items; and 
(4) actions to be taken by NU to ensure that future operation will be 
conducted in accordance with the terms and conditions of the operating 
licenses, the Commission's regulations, and the FSARs. In a letter 
dated May 29, 1997, the Licensee submitted the initial information 
requested. Additional information and updates will be submitted in 
accordance with the time intervals specified in the 10 CFR 50.54(f) 
letter.
    During eight NRC inspections conducted between October 1995 and 
August 1996, more than 60 apparent violations of NRC requirements were 
found at the Millstone site. These apparent violations were discussed 
at a public predecisional enforcement conference held at the Millstone 
site on December 5, 1996. During the meeting, the Licensee stated that 
management had failed to give clear direction and oversight, 
performance standards were low, management expectations were weak, and 
station priorities were inappropriate. A notice of violation and 
proposed imposition of civil penalties in the amount of $2,100,000 was 
issued to the Licensee on December 10, 1997. This is the largest civil 
penalty ever proposed by the NRC. In the enforcement action, the NRC 
staff identified violations relating to inadequate engineering, 
inadequate corrective actions, technical specifications violations, and 
quality assurance violations.
    Additionally, the Licensee has had a chronic problem of not dealing 
effectively with employee concerns at

[[Page 8700]]

the Millstone site. On December 12, 1995, the NRC set up a review group 
to conduct an independent evaluation of the history of the Licensee's 
handling of employee concerns related to licensed activities at the 
Millstone facility. The review group determined that, in general, an 
unhealthy work environment, which did not tolerate dissenting views and 
did not welcome or promote questioning attitudes, has existed at the 
Millstone facility for the last several years. To address this problem, 
the NRC issued an order on October 24, 1996, directing NU to devise and 
implement a comprehensive plan for handling safety concerns raised by 
Millstone employees and to ensure an environment free from retaliation 
or discrimination. In addition, the order required NU to have an 
independent third party oversee its employee concerns program. The 
third-party is responsible for providing periodic reports to NU and NRC 
detailing its findings and recommendations. The third-party findings 
and the NU responses to them will be assessed by the NRC staff for any 
restart issues.
    The conduct of NRC regulatory oversight at the Millstone site is 
based on the recognition that the Licensee bears primary responsibility 
to demonstrate that corrective actions have been effectively 
implemented. Thus, before the NRC staff can recommend that the 
Commission approve the restart of any Millstone unit, the Licensee must 
determine that a unit is in conformance with applicable NRC 
regulations, its license conditions, and its FSAR, and that applicable 
licensing commitments have been met. The Licensee's conformance with 
NRC regulations, license conditions, and licensing commitments is 
fundamental to NRC's confidence in the safety of licensed activities. 
In short, the Licensee has the primary responsibility for the safe 
operation of its facilities.
    In a June 20, 1996, letter to NRC, the Licensee described its 
Configuration Management Plan (CMP), which is its principal program to 
provide reasonable assurance that weaknesses at the Millstone units 
have been effectively corrected. The CMP includes efforts to understand 
and correct the licensing and design-bases issues that led NRC to send 
the 10 CFR 50.54(f) letters and order actions to prevent recurrence of 
those issues. The Licensee stated that the objective of the CMP was to 
document and meet the licensing and design-bases requirements of each 
unit and to ensure that adequate programs and processes are in place to 
maintain control of these requirements. The Licensee's CMP must either 
correct each FSAR deficiency or evaluate it to ensure that the change 
to the facility does not involve any unreviewed safety question or 
change to the facility TSs. NU has documented a large number of 
deficiencies, which vary in scope and safety significance for each 
unit. These lists contain significant deficiencies that must be 
corrected before restart and others that the Licensee is planning to 
correct after restart. In its continuing reviews of the deficiency 
lists, the NRC staff will determine whether the Licensee has 
appropriately scheduled safety-significant items for completion before 
restart and whether those items that the Licensee will defer until 
after restart are appropriate for each unit. The results of these 
efforts will be documented in NRC inspection reports.
    The NRC's regulatory oversight of the Licensee's corrective actions 
requires extensive planning and program integration. To focus more 
regulatory attention on all of the restart issues related to the 
Millstone units, NRC has established a Special Projects Office (SPO) 
within the Office of Nuclear Reactor Regulation to oversee these 
activities. The SPO has developed a comprehensive and multifaceted 
oversight program to verify the adequacy of NU's corrective actions, 
programs, and processes. The breadth and significance of the problems 
identified at the Millstone site require this program. The SPO has 
developed a Restart Assessment Plan (assessment plan) for each of the 
Millstone units, which includes (1) the appropriate aspects of NRC 
Inspection Manual, Manual Chapter (MC) 0350, ``Staff Guidelines for 
Restart Approval''; (2) oversight of NU's ICAVP; and (3) oversight of 
NU's corrective actions relating to employee concerns involving safety 
issues. The activities associated with the assessment plan are in 
addition to the normal inspection and licensing activities being 
carried out at the Millstone site.
    MC 0350 establishes the guidelines for approving the restart of a 
nuclear power plant after a shutdown resulting from a significant 
event, a complex hardware problem, or serious management deficiencies. 
The primary objective of the guidelines in MC 0350 is to ensure that 
NRC's restart review efforts are appropriate for the individual 
circumstances, are reviewed and approved by the appropriate NRC 
management levels, and provide objective measures of restart readiness.
    The assessment plan for each unit includes those issues listed in 
MC 0350 that the NRC staff has identified as relevant to the shutdown 
of the unit. Each assessment plan also includes additional issues 
determined to be applicable to the specific situation. The assessment 
plans include all actions the NRC expects NU to take before the NRC 
staff recommends to the Commission that a unit be permitted to restart. 
Accordingly, the staff will use the assessment plan for each Millstone 
unit to track and monitor all significant actions necessary to support 
a decision on restart approval of the unit.
    The assessment plan for each Millstone unit includes the 
requirement to review the NU Operational Readiness Plan, the deficiency 
lists associated with the assessment plan, including restart and 
deferred items, the corrective action program, work planning and 
controls, the procedures upgrade program, the nuclear oversight 
function (quality assurance), outstanding enforcement items, and a 
Significant Issues List (SIL), which includes issues identified by both 
NU and NRC as issues requiring resolution before restart. NRC MC 93802, 
``Operational Safety Team Inspection'' (OSTI), provides the framework 
for a team inspection to be performed during the later stages of the 
restart process. The inspection will be structured to focus on the 
pertinent issues at each of the Millstone units.
    Within the SPO, a Millstone Restart Assessment Panel (RAP) has been 
formed in accordance with MC 0350. The RAP meets to assess the 
Licensee's performance and its progress in completing the designated 
restart activities. The RAP is composed of the Director, SPO 
(chairman); the Deputy Directors of Licensing, Inspections, and 
Independent Corrective Action Verification Program Oversight; the 
project managers for the three Millstone units; the Inspection Branch 
Chief; the senior resident inspectors for the three Millstone units; 
and the appointed Division of Reactor Safety representative. The RAP 
holds periodic meetings with the Licensee to discuss the Licensee's 
corrective actions and schedules of each Millstone unit. Notices of the 
meetings with the licensee are issued and the meetings are open to the 
public. Additionally, NRC holds frequent meetings with the public near 
the Millstone facility that include a summary of the latest meeting 
with the Licensee, updates on NRC activities, and questions and 
comments from the public.
    The purpose of the ICAVP, as stated in the confirmatory order, is 
to confirm that the plant's physical and functional characteristics are 
in conformance with its licensing and design bases. The ICAVP audit 
required by NRC is expected to provide independent verification, beyond 
NU's quality

[[Page 8701]]

assurance and management oversight, that the Licensee has identified 
and satisfactorily resolved existing nonconformances with the design 
and licensing bases; documented and utilized the licensing and design 
bases to resolve nonconformances; and established programs, processes, 
and procedures for effective configuration management in the future. NU 
has started programs to identify and understand the root causes of the 
licensing and design-bases issues that led to NRC issuance of the 10 
CFR 50.54(f) letters to NU and to implement corrective actions to 
ensure that NU maintains the design configuration and that each unit is 
in conformance with its licensing basis. NU has indicated that the 
scope of its corrective programs will include those systems that it has 
categorized as either Group 1 (safety-related and risk-significant) or 
Group 2 (safety-related or risk-significant). The ICAVP audit must 
provide insights into the effectiveness of NU's programs so that the 
results can be reasonably extrapolated to the structures, systems, and 
components that were not reviewed in the audit.
    The NRC staff has developed a comprehensive and multifaceted 
oversight process to provide a high level of confidence that the 
Licensee has implemented required corrective actions and that all of 
the issues on the SILs have been resolved. The independent third-party 
evaluations required by NRC will be used to enhance NRC confidence that 
the Licensee's corrective action programs have been effectively 
implemented at each unit.
    NRC activities (including oversight of the ICAVP) to ensure that 
effective corrective actions are being taken by the Licensee will 
provide additional assurance that the Licensee's corrective action 
programs have been effectively implemented. These activities will 
include in-process reviews of the ICAVP contractor's activities, 
reviews of the ICAVP results, and additional independent reviews of 
compliance with the design and licensing bases of selected systems. The 
State of Connecticut's Nuclear Energy Advisory Council has provided 
input to the NRC staff for selecting the systems that will be reviewed 
by the ICAVP contractor and has been invited to observe the NRC staff's 
ICAVP inspections.
    When the restart review process has identified, corrected, and 
reviewed relevant issues regarding each Millstone unit, a restart 
authorization process will be initiated for that unit. Upon receipt of 
an NRC staff recommendation and a briefing on any ongoing 
investigations, the Commission will meet to assess the recommendation 
and vote on whether to allow the restart of the unit. The same process 
will be followed for the remaining units.
    It is important to note that the Licensee and NRC are continuing to 
identify problems at the Millstone site, as documented in inspection 
reports issued after this Petition was filed. These findings indicate 
that the corrective actions required to restart the Millstone units 
have not yet been fully implemented. The NRC staff will not recommend 
that the Commission allow the restart of a Millstone unit until the NRC 
staff has determined, in accordance with the assessment plan, that the 
necessary corrective actions have been effectively implemented for the 
unit. Following any positive Commission vote for restart, the unit will 
remain on NRC's watchlist, in Category 2, and will continue to be 
subject to a high level of NRC oversight. The unit will remain as a 
Category 2 watchlist plant until the NRC determines that the Licensee's 
performance warrants a normal level of NRC oversight.

Haddam Neck Facility

    The Licensee shut down the Haddam Neck facility on July 22, 1996, 
as required by the facility's TSs, because of concerns that service 
water piping for the air recirculation fans in the containment may 
exceed design loads during certain accident scenarios. The Licensee 
determined that these concerns and other hardware and programmatic 
problems identified before and during the forced outage should be 
resolved before restarting the plant. Thus, the Licensee decided to 
begin Refueling Outage 19 on August 17, 1996. On October 9, 1996, the 
owners of the Haddam Neck Plant stated that a permanent shutdown of the 
plant was being considered by the Board of Trustees as a result of an 
economic analysis of operations, expenses, and the cost of replacement 
power. Subsequently, all fuel assemblies were removed from the reactor 
and placed in the spent fuel pool.
    From November 21, 1995, to November 22, 1996, NRC conducted 
numerous inspections at the Haddam Neck Plant to review several facets 
of plant performance. These inspections included a special team 
inspection by NRC headquarters staff focused on engineering 
performance; a special augmented inspection team (AIT) inspection of a 
reactor vessel nitrogen intrusion event in late August and early 
September 1996, which lowered the reactor vessel water level; a special 
radiation protection inspection of a significant contamination event in 
November 1996; an emergency preparedness inspection to observe the 
Licensee's response during an emergency exercise held in August 1996; 
and several resident inspections. Numerous violations, as well as 
several significant regulatory concerns, were identified during these 
inspections. Most of the violations were discussed at a transcribed 
public predecisional enforcement conference at the Millstone training 
building in Waterford, Connecticut, on December 4, 1996. That 
conference was open to the public and focused on the broader 
programmatic deficiencies underlying the violations that contributed to 
the problems at Haddam Neck. A notice of violation and proposed 
imposition of civil penalties in the amount of $650,000 was issued on 
May 12, 1997, and was subsequently paid by the Licensee.
    By letter dated December 5, 1996, the Licensee certified to the 
NRC, pursuant to 10 CFR 50.82(a)(1)(i) and 10 CFR 50.82(a)(1)(ii), that 
it had decided to permanently cease operations at the Haddam Neck Plant 
and had permanently removed the fuel from the reactor. The Licensee 
further noted that a post-shutdown decommissioning activities report 
(PSDAR) and a site-specific decommissioning cost estimate would be 
submitted in accordance with 10 CFR 50.82, ``Termination of License.'' 
Therefore, the NRC's restart process oversight described for the three 
Millstone units is not applicable to the Haddam Neck Plant. However, 
the NRC staff has taken pertinent actions at the Haddam Neck Plant.
    A confirmatory action letter (CAL) was issued to the Licensee on 
March 4, 1997, concerning radiological-control problems at the Haddam 
Neck Plant to ensure that the limited activities at the site will be 
conducted in a safe manner and in accordance with regulatory 
requirements. The CAL confirms the Licensee's commitment to not perform 
any radiological work, except that required to maintain the plant in a 
safe configuration until the corrective actions identified in the CAL 
have been implemented.1
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    \1\ In a November 17, 1997, letter, the NRC staff confirmed 
certain modifications of the Licensee's commitments on the conduct 
of radiological work at the Haddam Neck Plant. The modification 
allows the Licensee to remove an 8-foot section of piping associated 
with the reactor coolant system to allow vendors to determine the 
best method for eventual decontamination of the entire reactor 
coolant system.
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    As with the Millstone site, it is important to note that the 
Licensee and NRC continue to identify problems at the Haddam Neck 
Plant, as documented in inspection reports issued after this

[[Page 8702]]

Petition was filed. These findings indicate that the corrective actions 
required to be completed before conducting significant decommissioning 
activities have not yet been fully implemented. The NRC staff will 
continue to closely monitor the Licensee's activities until the staff 
has determined that the necessary corrective actions have been 
effectively implemented for the unit.

III. NRC Response to Requested Actions

    The Petitioner requested that a mechanistic enforcement approach be 
used at the Millstone and Haddam Neck plants to preclude recurrence of 
the problems.
    The NRC's enforcement policy, which has been revised many times 
since the March 9, 1982, policy was first issued, continues to 
recognize that the regulation of nuclear activities does not lend 
itself to a mechanistic treatment. The NRC staff's extensive experience 
shows that judgment and discretion must be exercised in determining the 
severity levels of the violations and the appropriate enforcement 
sanctions.
    The latest staff assessment of the NRC's enforcement policy was 
completed in 1997 (NUREG-1622 2). This assessment also 
contained a discussion of a suggestion from the public 3 
recommending that the enforcement policy be modified to eliminate what 
was viewed as subjective enforcement based on performance issues. In 
particular, the commenter recommended that the NRC staff consistently 
impose a civil penalty every time a licensee fails to meet a 
requirement, regardless of a licensee's performance or ability to meet 
requirements in other areas. The NRC staff's assessment concluded, in 
part, that ``the staff does not believe that the enforcement policy 
should be reduced to a formula for rigid application. Few cases are 
entirely straightforward, and the NRC must always apply judgment in 
determining whether to give credit for the licensee's actions.'' The 
Petitioner requested that mechanistic enforcement-related license 
conditions be added to the Millstone and Haddam Neck licenses. As noted 
above, the NRC staff has long experience in the enforcement of its 
requirements. That experience shows that judgment and discretion based 
on the facts at hand are key elements in any enforcement decision. A 
fair and reasonable enforcement decision cannot be made without an 
understanding of the nature of the violations involved and the context 
in which the violations occurred. The Petitioner's approach calls for 
specific and severe sanctions based on unknown future events of unknown 
significance occurring in an unknown context. Such an approach is 
unreasonable and could very well be found as arbitrary and capricious 
and thus legally unsound. It is not an approach that the NRC staff 
would apply in any case and so it would not be applied in the case of 
the Millstone and Haddam Neck units as requested by the Petitioner.
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    \2\ As of the date of this Director's Decision, this NUREG has 
not been issued. It is expected to be issued shortly.
    \3\ September 9, 1997, letter from David A. Lochbaum of the 
Union of Concerned Scientists.
---------------------------------------------------------------------------

    As noted in the Discussion section above, the NRC staff is aware of 
the significant performance problems at the Licensee's facilities. 
These performance problems have led the NRC staff to increase its 
oversight activities at these facilities. The Millstone plants will not 
be allowed to restart until the NRC staff is satisfied that sufficient 
corrective action has taken place and until Commission approval is 
granted. After restart, the plants will continue to be subject to a 
high level of NRC oversight until the NRC determines that the 
Licensee's performance warrants a normal level of NRC oversight. The 
decommissioning of the Haddam Neck Plant will not be allowed to proceed 
until the NRC staff determines that the applicable performance problems 
noted there have been corrected. The Licensee has also made significant 
management changes at each of these facilities. In the NRC staff's 
judgment, the scope of actions taken by the Licensee and the NRC 
regarding these facilities is extensive.
    Furthermore, the NRC staff has had significant experience in 
overseeing licensees that have either been ordered to or have 
volunteered to shut down their facilities because of performance 
problems. For example, in NRC's Region I alone, the Pilgrim, Peach 
Bottom, Nine Mile Point, Calvert Cliffs, FitzPatrick, and Indian Point 
Unit 3 plants have been shut down while significant problems were 
corrected. Despite their significant problems, these plants have been 
able to perform corrective actions that have significantly improved the 
performance of these facilities. On the basis of the special 
circumstances involved with overseeing the restart of plants shut down 
for performance problems, the NRC staff developed MC 0350 (for more 
detail about this document, see Discussion section). Thus, the NRC 
staff has a considerable amount of experience overseeing facilities 
shut down because of significant enforcement problems; the NRC staff 
has seen numerous examples of licensees that have successfully improved 
their performance to a level acceptable for restart and continued 
operation; and, the NRC staff has a tested procedure in place to safely 
oversee the restart of such facilities.
    Regarding the Haddam Neck Plant, the risks to the public from a 
permanently shutdown facility are significantly less than those from an 
operating power plant. Additionally, as noted in the preceding 
discussion, the NRC staff is closely observing the Licensee's actions 
until confidence in the Licensee is restored.

IV. Conclusion

    In summary, a mechanistic enforcement approach will not be applied 
by the NRC staff in this matter. Such an approach is neither necessary 
nor appropriate to assure regulatory compliance and safe conduct of 
activities at the Millstone and Haddam Neck facilities. Extensive 
efforts have been and are being taken by the Licensee to assure that 
future operation of the Millstone units and decommissioning of the 
Haddam Neck Plant are accomplished safely. The NRC staff has in place 
an extensive oversight program to assure that the Licensee meets its 
objectives. The NRC staff also has extensive experience with other 
facilities in assessing major corrective action programs providing 
assurance that its oversight of the Licensee's corrective action 
efforts will be sound and will assure that the Commission receives a 
sound NRC staff recommendation before the Commission itself determines 
whether restart of the Millstone units is warranted. After restart, the 
plants will continue to be subject to a high level of NRC oversight 
until the NRC determines that the Licensee's performance warrants a 
normal level of NRC oversight. Accordingly, the Petitioner's request 
for specific enforcement-related license conditions at the Millstone 
and Haddam Neck facilities is denied.
    As provided for in 10 CFR 2.206(c), a copy of this decision will be 
filed with the Secretary of the Commission for the Commission's review. 
This director's decision will constitute the final action of the 
Commission 25 days after issuance unless the Commission, on its own 
motion, institutes review of the decision in that time.

    Dated at Rockville, Maryland, this 11th day of February 1998.

    For the Nuclear Regulatory Commission.
Samuel J. Collins,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 98-4325 Filed 2-19-98; 8:45 am]
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