Consumers Power Co., Palisades Nuclear Plant, License Nos. DPR- 20; Issuance of Director's Decision Under 10 CFR 2.206

NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-255 and 72-7]

Consumers Power Co., Palisades Nuclear Plant, License Nos. DPR-

20; Issuance of Director's Decision Under 10 CFR 2.206

Notice is hereby given that the Acting Director, Office of Nuclear

Reactor Regulation, has issued a Director's Decision concerning a

Petition dated September 19, 1995, as amended on September 30, 1996,

filed by Don't Waste Michigan and Lake Michigan Federation

(Petitioners) under Section 2.206 of Title 10 of the Code of Federal

Regulations (10 CFR 2.206). The Petition requested that the NRC (1)

find that Consumers Power Company (licensee) violated NRC requirements

related to unloading procedures for dry storage casks for spent nuclear

fuel, (2) suspend the licensee's use of the general license provisions

related to dry cask storage of spent nuclear fuel, (3) require a

substantial penalty be paid by the licensee, and (4) conduct hearings

related to unloading procedures for dry storage casks at Palisades.

The Acting Director of the Office of Nuclear Reactor Regulation has

determined that Petition should be granted in part and denied in part

for the reasons stated in the ``Director's Decision Under 10 CFR

2.206'' (DD-97-01), the complete text of which follows this notice. The

decision and documents cited in the decision are available for public

inspection and copying in the Commission's Public Document Room, the

Gelman Building, 2120 L Street, NW, Washington, DC, and at the local

public document room located in the Van Wylen Library at Hope College

in Holland, Michigan.

A copy of this decision has been filed with the Secretary of the

Commission for the Commission's review in accordance with 10 CFR

2.206(c). As provided therein, this decision will become the final

action of the Commission 25 days after issuance unless the Commission,

on its own motion, institutes review of the decision within that time.

Dated at Rockville, MD., this 23d day of January 1997.

For the Nuclear Regulatory Commission.

Frank J. Miraglia,

Acting Director, Office of Nuclear Reactor Regulation.

Director's Decision Under 10 CFR 2.206

I. Introduction

On September 19, 1995, the organizations Don't Waste Michigan and

Lake Michigan Federation (Petitioners) filed a Petition pursuant to

Section 2.206 of Title 10 of the Code of Federal Regulations (10 CFR

2.206) requesting that the U.S. Nuclear Regulatory Commission (NRC) (1)

find that Consumers Power Company (licensee) violated NRC requirements

related to unloading procedures for dry storage casks for spent nuclear

fuel, (2) suspend the licensee's use of the general license provisions

related to dry cask storage of spent nuclear fuel, (3) require a

substantial penalty be paid by the licensee, and (4) conduct hearings

related to unloading procedures for dry storage casks at Palisades.

On September 30, 1996, the Petitioners amended the Petition by

including additional information in support of their position that the

licensee did not have a workable unloading procedure before loading the

13 dry storage casks currently in the Palisades independent spent fuel

storage installation (ISFSI).

The Petition has been referred to me pursuant to 10 CFR 2.206. The

NRC letter dated October 24, 1995, to Dr. Sinclair and Mr. Skavroneck,

on behalf of the Petitioners, acknowledged receipt of the Petition.

Notice of receipt was published in the Federal Register on October 31,

1995 (60 FR 55388).

On the basis of the NRC staff's evaluation of the issues and for

the reasons given below, the Petitioners' requests are granted in part

and denied in part.

II. Background

NRC regulations contain a general license that authorizes nuclear

power plants licensed by the NRC, such as Palisades, to store spent

nuclear fuel at the reactor site in storage casks approved by the NRC.

(See 10 CFR part 72, subpart K.) In regard to dry cask storage of spent

nuclear fuel at Palisades, the licensee opted to use the VSC-24 Cask

Storage System designed by Sierra Nuclear Corporation. The VSC-24 Cask

Storage System was added to the list of NRC certified casks in May 1993

(58 FR 17948). The associated certificate of compliance, Certificate

Number 1007, specifies the conditions for use of VSC-24 casks under the

general license provisions of 10 CFR part 72. Section 1.1.2,

``Operating Procedures,'' in the certificate of compliance for the VSC-

24 casks, requires that licensees prepare an operating procedure

related to cask unloading. Specifically, the condition states

Written operating procedures shall be prepared for cask

handling, loading, movement, surveillance, and maintenance. The

operating procedures suggested generically in the SAR (safety

analysis report) are considered appropriate, as discussed in Section

11.0 of the SER (safety evaluation report), and should provide the

basis for the user's written operating procedures. The following

additional written procedures shall also be developed as part of the

user operating procedures:

1. A procedure shall be developed for cask unloading, assuming

damaged fuel. If fuel needs to be removed from the multi-assembly

sealed basket (MSB), either at the end of service life or for

inspection after an accident, precautions must be taken against the

potential for the presence of oxidized fuel and to prevent

radiological exposure to personnel during this operation. This

activity can be achieved by the use of the Swagelok valves, which

permit a determination of the atmosphere within the MSB before the

removal of the structural and shield lids. If the atmosphere within

the MSB is helium, then operations should proceed normally, with

fuel removal, either via the transfer cask or in the pool. However,

if air is present within the MSB, then appropriate filters should be

in place to permit the flushing of any potential airborne

radioactive particulate from the MSB, via the Swagelok valves. This

action will protect both personnel and the operations area from

potential contamination. For the accident case, personnel protection

in the form of respirators or supplied air should be

[[Page 4361]]

considered in accordance with the licensee's Radiation Protection

Program.

The licensee for Palisades began loading casks in May 1993 after

implementing pertinent certificate conditions, including those in

Section 1.1.2.

In July 1994, the licensee discovered radiographic indications of

possible defects in a weld in multi-assembly sealed basket (MSB) No. 4.

MSB No. 4 had been loaded with spent fuel earlier that month and

placed, inside a ventilated concrete cask, on the ISFSI storage pad.

The licensee evaluated the flaw indications and determined that the MSB

continued to meet its design basis and was capable of safely storing

spent fuel for the duration of the certificate (20 years).

Nevertheless, the licensee stated that MSB No. 4 would be unloaded to

support additional inspections and evaluations related to its future

use.1 In preparation for the unloading of MSB No. 4, the licensee

reviewed the unloading procedure issued in May 1993 (Revision 0) and

identified several technical questions. A revision of the unloading

procedure (Revision 1) was subsequently developed to resolve the

identified technical questions.

---------------------------------------------------------------------------

\1\ The schedule for unloading MSB No. 4 remains indefinite. The

staff has recently learned that the licensee may postpone the

unloading until a multi-purpose cask is available. This would allow

the spent fuel currently stored in MSB No. 4 to be transferred to a

cask that would support both storage and transportation of the spent

fuel. The NRC staff is reviewing this plan and will initiate

discussions pertaining to this matter with the licensee and other

affected parties.

---------------------------------------------------------------------------

The technical questions and the associated procedural changes were

discussed during meetings with the NRC staff, and additional

information was provided in submittals from the licensee to the NRC.

Evaluation of the revised unloading procedure by the NRC staff was

initially made through the review of submittals from the licensee and

has continued through an inspection of the licensee's revised unloading

procedure.

As a result of its inspections and reviews, the NRC staff

recognized that some licensees, including Consumers Power Company, had

developed unloading procedures that tended to be simplistic and lacked

sufficient details and contingencies. In order to address these issues,

an item related to cask loading and unloading procedures was added to

the NRC dry cask storage action plan that was implemented in July 1995.

Some issues, such as the thermal-hydraulic behavior of casks during the

unloading process, were included largely as a result of questions

related to the original unloading procedure at Palisades. Experience at

other facilities using storage and transportation casks resulted in the

identification of other issues. For example, as a result of the

turbidity of the spent fuel pool during the unloading of a

transportation cask at the Shearon Harris Nuclear Power Plant, the NRC

staff assessed the potential for and significance of deposits on fuel

assembly surfaces becoming loose during the unloading of dry storage

casks. Evaluations and inspections were used to resolve these issues

for specific facilities and revisions to NRC guidance documents have

been prepared to resolve generic concerns.

Completion of the NRC inspection of the revised unloading procedure

for Palisades was postponed following an event at the Point Beach

Nuclear Plant.2 Following the hydrogen ignition event at Point

Beach, the NRC issued confirmatory action letters (CALs) to those

licensees using or planning to use VSC-24 casks for the storage of

spent nuclear fuel (i.e., licensees for Point Beach, Palisades, and

Arkansas Nuclear One). The CALs document the licensees' commitments not

to load or unload a VSC-24 cask without resolution of material

compatibility issues identified in NRC Bulletin 96-04, ``Chemical,

Galvanic, or Other Reactions in Spent Fuel Storage and Transportation

Casks,'' and confirmation of corrective actions by the NRC.3

---------------------------------------------------------------------------

\2\ On May 28, 1996, a hydrogen gas ignition occurred during the

welding of the shield lid on a VSC-24 cask at the Point Beach

Nuclear Plant. The hydrogen was formed by a chemical reaction

between a zinc-based coating (Carbo Zinc 11) and the borated water

in the spent fuel pool.

\3\ On December 3, 1996, the NRC staff informed the licensee for

the Arkansas Nuclear One facility in Russellville, Arkansas, that it

had completed its reviews and inspections associated with that

facility and found that the licensee had satisfactorily completed

the commitments documented in the CAL. Shortly thereafter, the

licensee initiated cask-loading activities.

---------------------------------------------------------------------------

The NRC staff is continuing to review the bulletin responses and

corrective actions for the Palisades facility, and, therefore, the

licensee is restrained from loading or unloading additional VSC-24

casks. Completion of the ongoing NRC inspection of the revised

unloading procedure at Palisades will be coordinated with the staff's

review of the licensee's response to the bulletin. Further, the NRC has

committed to State officials and members of the public that the exit

meeting for the inspection at Palisades will be open to the public, the

meeting will be noticed sufficiently in advance to allow interested

parties to attend, and the NRC staff will allocate time to discuss

issues with the public following the meeting with the licensee.

III. Discussion

The Petition requests four actions by the NRC on the basis of the

contention that the original unloading procedure (Revision 0)

implemented by the licensee was inadequate, and therefore, the licensee

violated NRC regulations requiring the licensee, prior to using an

approved cask, to establish that all conditions in a dry storage cask

certificate of compliance have been met (see 10 CFR 72.212(b)(2)).

(1) Determine That the Licensee Violated NRC Requirements

In support of the Petition's contention that the licensee violated

NRC requirements related to the original unloading procedure, the

Petitioners claim that issues identified in licensee documents dated

November 11, 1994, and June 2, 1995, regarding revisions to the

unloading procedure to support the planned unloading of Cask No. 4,

demonstrate that the original procedure was inadequate. The amendment

to the Petition filed on September 30, 1996, included issues related to

material compatibility identified in NRC Bulletin 96-04 as additional

evidence that the licensee's original unloading procedure was

inadequate.

The primary information offered by the Petitioners in support of

their claim that the original procedure violated NRC requirements is

identified in the licensee's document dated November 11, 1994. Although

the issues identified by the Petitioners have been represented by the

licensee as improvements or enhancements to the original unloading

procedure to support the planned unloading of Cask No. 4 at Palisades,

a potential inference that might be drawn from the November 11 document

is that the original unloading procedure could not adequately support

the unloading of Cask No. 4. However, the licensee's letter dated

December 29, 1994, affirmed the licensee's position that the original

unloading procedure was adequate, and therefore complied with the

certificate of compliance. Additional information, including the

revised unloading procedure and the supporting engineering analyses,

was provided in the licensee's submittal to the NRC dated June 2, 1995.

The NRC staff requested additional information from the licensee, and

that information was provided by the licensee in submittals dated

October 16, 1995, December 20, 1995, and July 19, 1996.

On the basis of its review, the NRC staff concluded that, had the

licensee attempted to unload a cask using the

[[Page 4362]]

original unloading procedure, certain deficiencies associated with the

original procedure would have prevented completion of the unloading

process. The original unloading procedure's administrative limit for

maximum cask pressure would have prevented the licensee from

establishing a continuous cooling cycle because the internal cask

pressure would not have been sufficient to force steam to the outlet of

the discharge piping at the bottom of the spent fuel pool. Other

weaknesses in the original unloading procedure that would have hampered

cask unloading included a restrictive venting capacity due to reliance

upon a small vent line with an installed Swagelok fitting, scant

guidance for personnel performing tasks such as drawing a gas sample

from the MSB to check for damaged fuel, and several examples of

references to the wrong step within the procedure. Such deficiencies

and weaknesses would have required the licensee to suspend activities

at one or more times during the unloading process in order to evaluate

the problems encountered and implement necessary revisions to the

procedure. Therefore, because the original unloading procedure would

have required revision in order to complete the unloading process, this

was a violation of requirements that all activities affecting quality

be prescribed by procedures appropriate for the circumstances and that

procedures are reviewed for adequacy. (See Criteria V and VI in

Appendix B to 10 CFR Part 50.) 4 However, the staff also

determined that the deficiencies in the original unloading procedure

would not have challenged the integrity of the cask or fuel contained

in the cask and that the licensee would have ultimately been able to

safely unload a cask. Thus, given the limited safety significance of

the procedural deficiencies and the fact that the licensee identified

and corrected the deficiencies, the NRC exercised its discretion to

refrain from issuing a Notice of Violation or a civil penalty for the

violation.

---------------------------------------------------------------------------

\4\ Section 1.1.3 of the certificate of compliance for the VSC-

24 cask states that activities at the ISFSI shall be conducted in

accordance with the requirements of 10 CFR part 50, appendix B.

Requirements related to quality assurance for ISFSIs are also

contained in subpart G to 10 CFR part 72. The requirements of

Criteria V and VI in appendix B to 10 CFR part 50 are the same as

the requirements stated in 10 CFR 72.150 and 10 CFR 72.152. In the

case of the original cask unloading procedure at Palisades, the

number of problems in the original procedure and the failure of the

licensee to identify these problems during reviews performed prior

to approval of the procedure resulted in the finding that a

violation of NRC regulations had occurred. This finding is

documented in NRC Inspection Report 50-255/96014.

---------------------------------------------------------------------------

The purpose and objective of the NRC's enforcement program are

focused on using enforcement actions (1) as a deterrent to emphasize

the importance of compliance with requirements, and (2) to encourage

prompt identification and prompt, comprehensive correction of

violations. Mitigation of enforcement sanctions, such as refraining

from issuing a civil penalty and/or a Notice of Violation, is described

in Section VII.B of the ``General Statement of Policy and Procedures

for NRC Enforcement Actions (Enforcement Policy),'' for those cases in

which a licensee identifies a problem and corrects it within a

reasonable time. These mitigating factors were applicable to the

subject Severity Level IV violation pertaining to the original

unloading procedure at Palisades and the violation was, therefore,

dispositioned as a Non-Cited Violation.5

---------------------------------------------------------------------------

\5\ Although the NRC staff has identified weaknesses and

deficiencies in the unloading procedure developed by the licensee,

these problems resulted from the licensee giving insufficient

consideration to the complexity of the activity. As part of its

evaluation pertaining to the mitigation of enforcement sanctions,

the NRC staff concluded that the licensee had not knowingly and

willfully violated NRC requirements related to having an unloading

procedure for dry storage casks as was claimed by the Petitioners.

---------------------------------------------------------------------------

As noted, the licensee, in various correspondence, took the

position that the original unloading procedure was adequate and that

subsequent changes incorporated into the revised procedure were

enhancements based on lessons learned from operating experience and

additional evaluations. Several statements in the licensee's

correspondence appear to assert that unloading procedures for dry

storage casks do not need to maintain fuel integrity during the

unloading process in order to satisfy requirements of the certificate

of compliance or NRC regulations. The NRC staff disagrees with this

interpretation. NRC requirements mandate that the unloading process

should be developed with due consideration to maintaining fuel

integrity (see 10 CFR 72.122(h), 72.122(l), and 72.236(h)). Unloading

activities are required to prevent gross ruptures of the fuel cladding

in order to prevent operational safety problems. Unloading procedures

are also required to include contingencies in case fuel cladding has

degraded during storage such that additional measures are necessary to

address increased radiological hazards during the unloading process.

The NRC staff has concluded that the original unloading procedure would

have supported unloading of undamaged fuel assemblies without causing a

significant loss of fuel cladding integrity.

The issues identified by the licensee in the document of November

11, 1994, and for which the Petitioners claim that the original

unloading procedure was inadequate, are addressed below.

MSB Cooling Skid

The licensee modified the configuration of the fill and vent piping

and components from that used in the original unloading procedure. An

increase in the venting capacity and the use of the previous vent path

for instrumentation necessitated these modifications. The original

unloading procedure included steps to remove a gas sample for analysis,

connect the venting arrangement to the spent fuel pool, and connect the

cooling water supply from the spent fuel pool to the vacuum drying

system water pump and the MSB drain line. Neither the Petitioners nor

the NRC staff have identified fundamental safety concerns with the

arrangement used in the original unloading procedure.

Thermal Hydraulic Modeling

In order to verify that undamaged fuel could be safely removed from

MSB No. 4 and to support preparing the revised unloading procedure, the

licensee performed multiple analyses by modeling the thermal hydraulic

behavior of the cask during the cooling process. These analyses were

used to estimate the pressure response of the cask, to estimate the

time requirements for cooling the cask, and to select the appropriate

venting capacity in the revised unloading procedure. The analyses

performed by the licensee showed that the venting capacity available

for the original unloading procedure would have supported the cooling

and refill of the MSB. These analyses also showed that cask unloading

using the original procedure would have taken significantly longer than

the time estimated for the revised procedure. However, no violations of

regulatory requirements would have resulted from taking longer to

complete the unloading process. The licensee's performance of the

analyses during preparation of the revised unloading procedure

highlighted the lack of supporting analyses or evaluations for the

original version of the unloading procedure and contributed to the

staff's finding that the licensee had violated the requirements of

Criterion VI of appendix B to 10 CFR part 50 by issuing the original

procedure without sufficient reviews to determine its adequacy.

[[Page 4363]]

Maximum Allowable Pressurization

During its review of the unloading procedure, the licensee

determined that the cask should be limited to 38.3 psig in order to

satisfy criteria established by the American Society of Mechanical

Engineers Boiler and Pressure Vessel Code. This value is conservative

with respect to the pressure that would challenge the structural

integrity of the MSB. The original unloading procedure included

precautions to maintain the internal pressure less than 10 psig and

thus was bounded by the subsequent evaluations and the acceptable

conditions specified in the revised procedure.

However, the staff has concluded that the procedural limitation of

10 psig in the original unloading procedure would have introduced

problems in establishing the cooling cycle because the pressure would

have been too low to force steam or water from the MSB to the coolant

discharge at the bottom of the spent fuel pool. These problems, in

turn, likely would have prevented completion of cask unloading without

revising the procedure. However, the problems would not have challenged

the integrity of the cask or otherwise introduced a safety concern.

Rather, upon identifying the problems caused by the administrative

limit of 10 psig, the licensee could have revised the procedure,

proceeded to establish the desired cooling cycle, and completed

unloading of a cask.

Fuel Integrity During Cooling

In support of preparing the revised unloading procedure, the

licensee, with support from the nuclear fuel supplier, analyzed the

allowable temperature differences between fuel assembly components and

cooling water. Additional analyses determined maximum expected fuel

temperatures before establishing the cooling flow to the MSB. These

evaluations and the expected thermal response of the MSB and fuel

assemblies following the introduction of coolant during the unloading

procedure confirmed that thermal shocking would not challenge the

integrity of the fuel assemblies in the MSB.

Fuel Heatup While the MSB is in the Transport Cask

As previously mentioned, the licensee and the contractors analyzed

the maximum fuel temperatures that could be experienced during the time

that the MSB is in the transfer cask before establishing the cooling

flow from the spent fuel pool to the MSB interior. These analyses were

performed for various heat loads and time periods and included

conservative analysis assumptions. The analyses showed that fuel

temperature limits would not be exceeded before establishing the

cooling flow from the spent fuel pool using the original (or the

revised) unloading procedure.

MSB Lid Removal

The revised unloading procedure uses more advanced cutting

technologies in order to incorporate operating experience, ease lid

removal, and minimize personnel exposure. The capability of the

original unloading procedure to control removal of the MSB lid was

verified by the licensee during mockups before loading casks at

Palisades. Some of the improvements in the revised procedure are

related to problems experienced during that exercise. However, the

licensee has demonstrated that techniques for lid removal in the

original unloading procedure were adequate to remove the lids and

provide access to the fuel assemblies in compliance with NRC

requirements.

Criticality Prevention

The original unloading procedure included steps for sampling the

spent fuel pool boron concentration and establishing time limits for

lid removal following termination of recirculation flow. The NRC staff

considers the original procedure's lack of a detailed contingency for

preventing bulk boiling, as was incorporated into the revised

procedure, a procedural weakness. However, the weakness does not

translate into a concern related to public health and safety or

personnel exposure because of the inherent conservatisms related to

reactivity control for storage casks, such as assuming nonirradiated

fuel assemblies in supporting calculations, and the time that would be

available for the licensee to implement compensatory actions.

10 CFR 50.59 Evaluation Related to the MSB Cooling Skid

Modifications to the MSB cooling skid led the licensee to question

whether an unreviewed safety question was introduced by a possible

break of the return line to the spent fuel pool. Upon further review,

the licensee determined that the cooling system configuration did not

create the possibility for an accident or a malfunction of a different

type than any evaluated previously in the facility's final safety

analysis report or otherwise exceed the criteria that define an

unreviewed safety question under 10 CFR 50.59. The licensee has stated

that this conclusion is also applicable for the original unloading

procedure. Neither the Petitioners nor the NRC staff have identified a

safety or compliance issue regarding the licensee's conclusion.

Rigging Procedures

The licensee investigated several minor changes to the rigging

process during the development of the revised unloading procedure.

These changes are intended to ease the operations and reduce personnel

radiation exposures. However, the staff determined that the guidance

provided by the original procedure, combined with expected skill of

licensee personnel, would have been adequate to control the lifting of

the various loads associated with unloading a cask.

Helium Sampling

During the development of the revised unloading procedure, the

licensee recognized possible difficulties in drawing a gas sample from

the MSB before initiating the cooling operation. The original unloading

procedure included a step to ``remove a gas sample from the cask,'' but

did not include the more detailed guidance that is incorporated into

the revised procedure. This lack of guidance in the original procedure

may have resulted in licensee personnel underestimating the helium

concentration in the MSB. The original unloading procedure included

provisions to suspend the unloading process if the sampling indicated

air within the MSB. Therefore, this potential weakness in the original

unloading procedure would not have introduced adverse safety

consequences but instead may have erroneously caused the licensee to

suspend cask unloading activities in order to conduct management

briefings and determine compensatory measures due to the potential

oxidation of the fuel cladding.

Summary for (1) ``Determine That the Licensee Violated NRC

Requirements''

On the basis of its evaluation of the licensee's original unloading

procedure, the NRC staff affirmed the licensee's determination that the

procedure had numerous weaknesses. The staff believes that the

administrative limit of 10 psig for maximum cask pressure and other

identified weaknesses in the original unloading procedure would have

required the licensee to suspend activities at one or more times during

the unloading process in order to evaluate the problems encountered and

implement necessary revisions to the procedure. Given the number of

weaknesses in the original unloading procedure and the licensee's

failure to

[[Page 4364]]

perform the necessary levels of review and analysis to have determined

its adequacy prior to its issuance, the NRC staff found that the

licensee violated NRC requirements contained in Criteria V and VI of

appendix B to 10 CFR part 50. The first request in the Petition, to

find that the licensee violated NRC requirements related to unloading

procedures for dry storage casks for spent nuclear fuel, is therefore

granted. The violation was dispositioned as a Non-Cited Violation

consistent with the NRC Enforcement Policy.

The Petitioners' amendment to the Petition dated September 30,

1996, claims that the original unloading procedure was inadequate

because of its lack of controls related to the generation of hydrogen

gas from a chemical reaction between coatings used on the VSC-24 casks

and the borated water in the spent fuel pool. The chemical reactions

and hydrogen issue were identified following an event that occurred

during welding of the shield lid on a spent fuel storage cask at the

Point Beach plant on May 28, 1996. The need to include special

precautions in the unloading procedures for VSC-24 casks in order to

prevent ignition of hydrogen gas had not been recognized by the cask

vendor, licensees, or the NRC staff prior to the event at Point Beach.

The licensee's original unloading procedure was developed before the

event at Point Beach caused the recognition of the potential for

ignition of hydrogen gas during the unloading of a VSC-24 cask.

Accordingly, the NRC cannot reasonably fault the licensee, by taking

enforcement action, for not having accounted for an issue that was not

known to the NRC staff, the vendor, or the licensee.

(2) Suspend the Licensee's Use of the General License

On the basis of the contention that the licensee's unloading

procedure was inadequate, the Petitioners requested that the licensee's

use of the general license provisions of 10 CFR part 72 be suspended

until such time as the significant issues described in the licensee's

document of June 2, 1995, have been resolved, the NRC has documented

its review, approved the licensee's revised procedure, and Cask No. 4

has been safely unloaded.

The licensee's submittal of June 2, 1995, provided Revision 1 of

the unloading procedure and supporting engineering analyses. The

Petition includes specific questions and comments regarding the

licensee's submittal of June 2, 1995, in support of the Petitioners'

position that actions taken by the licensee had not resolved

significant safety issues. In response to questions from the NRC staff,

the licensee provided additional information related to the submittal

dated June 2, 1995. The subsequent submittals were dated October 16,

and December 20, 1995.6 In addition, the NRC staff was reviewing

and will continue to review the issues included in the submittal dated

June 2, 1995, as part of the ongoing NRC inspection of the revised

unloading procedure. Further, as described above, the NRC staff has

already concluded that the deficiencies in the original unloading

procedure violated NRC requirements, and that the violation should be

treated as a Non-Cited Violation because of the limited safety

significance of the procedural deficiencies and consideration of

mitigating factors defined in the NRC Enforcement Policy.

---------------------------------------------------------------------------

\6\ These documents, like all others identified in this

decision, are available to the public at the NRC Public Document

Room, the Gelman Building, 2120 L Street, NW, Washington, DC, and

from the local public document room located in the Van Wylen Library

at Hope College in Holland, Michigan.

---------------------------------------------------------------------------

On June 3, 1996, the NRC issued CALs to the licensee and other

users of the VSC-24 cask system. The CALs confirmed a commitment made

by each licensee to the NRC staff to refrain from loading or unloading

a VSC-24 cask pending completion of investigations and implementation

of corrective actions. On June 27, 1996, a supplement to the CAL was

issued to confirm a further commitment by the licensee to refrain from

placing a VSC-24 cask into the spent fuel pool until after the NRC has

reviewed and accepted applicable responses to NRC Bulletin 96-04 and

verified corrective actions taken in response to the bulletin. CALs are

among the administrative mechanisms that the NRC uses to supplement

Notices of Violation, civil penalties, and orders in its enforcement

program. CALs may be issued to confirm an agreement by a licensee or

vendor to take certain actions to remove significant concerns about

health, safety, safeguards, or the environment. The NRC expects

licensees and vendors to adhere to stated obligations or commitments

included in a CAL and will not hesitate to issue appropriate orders to

ensure that such obligations or commitments are met.

The NRC issued the CALs and Bulletin 96-04 in recognition of the

fact that the generation of hydrogen gas during the loading of VSC-24

casks at Point Beach was evidence that possible material compatibility

issues were not fully addressed during the design or certification

reviews associated with some spent fuel storage and transportation

casks. It is not unusual for the NRC to use such administrative

mechanisms to address generic issues. Given that the generation of

flammable gases was a particular concern for the users of the VSC-24

cask system, those licensees, including Consumers Power Company, were

issued CALs to confirm that VSC-24 casks would not be loaded, unloaded,

or otherwise placed in a spent fuel pool before the resolution of

issues identified in NRC Bulletin 96-04.

In regard to those issues contained in the amendment to the

Petition, the existing CAL documents the licensee's commitment to

refrain from loading, unloading, or otherwise placing a VSC-24 cask

into the spent fuel pool pending verification of corrective actions

related to NRC Bulletin 96-04. Given the licensee's commitment not to

load or unload a cask, the NRC does not, in this instance, envision the

need to issue an order as requested by the Petitioners.

Those portions of the Petition that address NRC's approval of the

revised unloading procedure and include the unloading of Cask No. 4 as

a condition for resuming normal activities under the general license

are denied. The NRC staff does not generally review and approve

specific procedures developed by licensees. NRC regulations, facility

licenses, and NRC-approved quality assurance programs require licensees

to establish and maintain a formal process for the preparation and

issuance of procedures and changes thereto. NRC assessments of licensee

procedures are generally conducted as part of the NRC's inspection

program. In this instance, given the licensee's commitment to refrain

from action until completion of NRC's inspections, the inspections will

confirm that applicable regulatory requirements are satisfied before

use of the licensee's revised unloading procedure. As previously

mentioned, the NRC staff will resume its inspection activities related

to the revised unloading procedure when the licensee has resolved the

issues identified in NRC Bulletin 96-04. If, and provided that, there

is satisfactory resolution of the issues identified in NRC Bulletin 96-

04 and any other questions that may arise during the inspection of the

licensee's revised unloading procedure, then the NRC will have

reasonable assurance of the licensee's compliance with regulatory

requirements. Accordingly, the staff would not have any basis or reason

to require the licensee to unload Cask No. 4 before resuming normal

activities under the general license at Palisades. Thus, following

resolution of all issues to the satisfaction of the NRC staff, the

determination of the sequence of events

[[Page 4365]]

related to the planned unloading of Cask No. 4 and the loading of

additional casks at Palisades will be at the discretion of the

licensee. As noted above, the NRC staff has committed to open the exit

meeting with the licensee to the public at the conclusion of the

ongoing inspection and will document its review in an inspection report

that will be available for public review.

(3) Require the Licensee to Pay a Substantial Penalty

On the basis of the contention that the licensee's original

unloading procedure was inadequate, the Petitioners requested that the

NRC levy a monetary penalty of $1.3 million against the licensee. As

previously mentioned, the NRC staff determined that, although finding

that the deficiencies in the original unloading procedure violated NRC

requirements, the violation satisfied the criteria to be treated as a

Non-Cited Violation because of the limited safety significance of the

procedural deficiencies and consideration of mitigating factors defined

in the NRC Enforcement Policy. Enforcement sanctions, including

issuance of civil penalties and orders, are normally used as a

deterrent to emphasize the importance of compliance with requirements,

and to encourage prompt identification and prompt, comprehensive

correction of violations. In this case, the licensee identified the

deficiencies that constituted the violation of NRC requirements and

subsequently revised the unloading procedure to resolve the identified

technical issues. It was the judgement of the NRC staff that the

violation should be dispositioned as a Non-Cited Violation in order to

convey the appropriate regulatory message in this case. Further, even

if the violation had been cited, it is the NRC staff's judgment that it

would have been categorized at a Severity Level IV, for which a civil

penalty would not ordinarily be issued.

In regard to the hydrogen issues identified in the amendment to the

Petition, the NRC staff has utilized an administrative mechanism in its

enforcement policy (CALs) to ensure that the licensee takes certain

actions to resolve this safety concern. As previously mentioned, the

specific contentions raised by the Petitioners pertaining to hydrogen

issues and the original unloading procedure do not warrant additional

enforcement actions by the NRC.

(4) Allow Petitioners to Review Procedure, Require NRC to Hold

Hearings, and Allow Petitioners to Participate in Proceedings

The original unloading procedure and the first revision of the

unloading procedure have been provided to the Petitioners. In addition,

correspondence between the NRC and the licensee regarding the

procedures have been furnished to the Petitioners. Further, due to the

course of events following the licensee's decision to unload Cask No.

4--including the licensee's evaluation of the original unloading

procedure, identification of improvements to the unloading process, and

the submittal of this Petition--the original and first revision of the

unloading procedure and related documentation have been available for

public review. Accordingly, Petitioners have had the opportunity to

review the unloading procedure. Further, as noted elsewhere, it is the

NRC staff's intention to hold a public meeting in the vicinity of the

Palisades Nuclear Plant at the conclusion of its ongoing inspection of

the licensee's revised unloading procedure.

The Petitioners' request for hearings and participation in

proceedings has been addressed in previous correspondence with the

Petitioners and the Attorney General for the State of Michigan. In that

correspondence, the NRC staff explained that neither the general

licensing provisions of 10 CFR part 72 nor the petition process

described in 10 CFR 2.206 require the NRC to institute a proceeding.

Under Sec. 2.206, the NRC office director responsible for the subject

matter of the request ``shall either institute the requested proceeding

in accordance with this subpart or shall advise the person who made the

request in writing that no proceeding will be instituted in whole or in

part, with respect to the request, and the reasons for the decision.''

As set forth in this Director's Decision, the NRC has determined

not to institute the proceeding as requested by the Petition.

IV. Conclusion

Petitioners requested that the NRC determine that Consumers Power

Company violated NRC requirements, suspend the licensee's use of the

general license, impose a substantial penalty, and hold hearings

related to the licensee's unloading procedure for dry storage casks. In

response, the NRC determined the licensee violated NRC requirements

insofar as the original unloading procedure (Revision 0) would have

required revision in order to have completed the unloading process.

Further, NRC staff determined that the violation, which was identified

and corrected by the licensee, should be treated as a Non-Cited

Violation consistent with the NRC's Enforcement Policy. Therefore, to

this extent, Petitioners' request for a determination that the licensee

violated NRC requirements is granted. The available information is

sufficient to conclude, however, that no substantial safety issue has

been raised regarding the operation of Palisades or its associated

ISFSI given the licensee's commitment not to load or unload a cask

until the NRC staff is satisfied that the licensee's procedures are

adequate. Therefore, the NRC has determined that no adequate basis

exists for granting Petitioners' requests for suspension of Consumers

Power Company's use of the general license for dry cask storage of

spent nuclear fuel at Palisades or imposition of a civil penalty.

A copy of this decision will be filed with the Secretary of the

Commission for the Commission to review in accordance with 10 CFR

2.206(c).

As provided by this regulation, this decision will constitute the

final action of the Commission 25 days after issuance, unless the

Commission, on its own motion, institutes a review of the decision

within that time.

Dated at Rockville, Md., this 23d day of January 1997.

For the Nuclear Regulatory Commission.

Frank J. Miraglia,

Acting Director, Office of Nuclear Reactor Regulation.

[FR Doc. 97-2162 Filed 1-28-97; 8:45 am]

BILLING CODE 7690-01-P