Georgia Power Company, et al. Vogtle Electric Generating Plant, Units 1 and 2; Issuance of Director's Decision Under 10 CFR 2.206

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