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

NUCLEAR REGULATORY COMMISSION

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

Northeast Utilities (Millstone Nuclear Power Station, Units 1, 2,

and 3); Issuance of Director's Decision Under 10 CFR 2.206

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

Regulation, has issued a Director's Decision with regard to a Petition

dated February 2, 1998, filed by Ms. Deborah Katz, Ms. Rosemary

Bassilakis, and Mr. Paul Gunter on behalf of the Citizens Awareness

Network (CAN) and the Nuclear Information and Resource Service (NIRS)

(Petitioners). The Petition pertains to the Millstone Nuclear Power

Station, Units 1, 2, and 3.

The Petitioners requested that the NRC immediately: (1) revoke

Northeast Utilities' (NU's, the licensee's) license to operate

Millstone Units 1, 2, and 3 as the result of ongoing intimidation and

harassment of its workforce by NU management; (2) revoke NU's license

to operate Millstone Units 1, 2, and 3 as the result of persistent

licensee defiance of NRC regulations and directives to create a

``questioning attitude'' for its workers to challenge management on

nuclear safety issues without fear of harassment, intimidation, or

reprisals by NU; and (3) refer the Nuclear Oversight Department's Focus

98 List and the reported NU management attempt to destroy the list to

the Department of Justice for investigation of a potential coverup.

As the bases for these assertions, the Petition states that an NU

document (Nuclear Oversight Department's Focus 98 List, dated January

11, 1998) directs the group to address areas needing improvement by

focusing on the ``inability to ``isolate'' cynics from the group

culture'' and ``pockets of negativism.'' The Petition further states

that the list demonstrates the sustained and unrelenting policy of NU's

senior management to undermine a safety-conscious workplace at

Millstone, and that despite 2 years of increased regulatory scrutiny of

the managerial mistreatment of its workers and the corporation's

mismanagement of its employees' safety concerns program, a ``chilled

atmosphere'' remains intact and entrenched.

As a basis for the Petitioners' request for a Department of Justice

investigation, the Petition makes the following statement: ``Since it

has been reported that NU management employees attempted to destroy the

list, NRC has a duty to refer this apparent deliberate attempt to evade

the otherwise lawful exercise of authority by NRC to the Department of

Justice for complete investigation. This alleged attempt to cover up

wrong doing by NRC's licensee is a potential obstruction of justice

that should be fully and fairly investigated.''

The Director of the Office of Nuclear Reactor Regulation has denied

the Petition. The reasons for this denial are explained in the

``Director's Decision Pursuant to 10 CFR 2.206'' (DD-98-04), the

complete text of which follows this notice and is available for public

inspection at the Commission's Public Document Room, the Gelman

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

document rooms located at the Learning Resources Center, Three Rivers

Community-Technical College, New London Turnpike, Norwich, Connecticut,

and at the Waterford Library, 49 Rope Ferry Road, Waterford,

Connecticut.

A copy of the Director's Decision will be filed with the Secretary

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

2.206(c) of the Commission's regulations. As provided for by this

regulation, the Decision will constitute the final action of the

Commission 25 days after the date of issuance unless the Commission, on

its own motion, institutes a review of the Decision in that time.

Dated at Rockville, Maryland, this 1st day of June 1998.

For the Nuclear Regulatory Commission.

Samuel J. Collins,

Director, Office of Nuclear Reactor Regulation.

Director's Decision Pursuant to 10 CFR 2.206

[DD-98-04]

I. Introduction

On February 2, 1998, Ms. Deborah Katz, Ms. Rosemary Bassilakis, and

Mr. Paul Gunter filed a Petition, pursuant to Section 2.206 of Title 10

of the Code of Federal Regulations (10 CFR 2.206), on behalf of the

Citizens Awareness Network (CAN) and the Nuclear Information and

Resource Service (NIRS) (Petitioners).

The Petitioners requested that the NRC take the following immediate

actions: (1) revoke Northeast Utilities' (NU's or the licensee's)

license to operate Millstone Units 1, 2, and 3 as the result of ongoing

intimidation and harassment of its workforce by NU management; (2)

revoke NU's license to operate Millstone Units 1, 2, and 3 as the

result of persistent licensee defiance of NRC regulations and

directives to create a ``questioning attitude'' for its workers to

challenge management on nuclear safety issues without fear of

harassment, intimidation, or reprisals by NU; and (3) refer the Nuclear

Oversight Focus 98 List and the reported NU management attempt to

destroy the list to the Department of Justice for investigation of a

potential coverup.

As bases for the Petitioners' assertions, the Petition states that

an NU document (Nuclear Oversight Department's Focus 98 List, dated

January 11, 1998) directs the Nuclear Oversight group to address areas

needing improvement by focusing on the ``inability to `isolate' cynics

from the group culture'' and ``pockets of negativism.'' The Petition

further states that the list demonstrates the sustained and unrelenting

policy of NU's senior management to undermine a safety-conscious

workplace at Millstone, and that despite 2 years of increased

regulatory scrutiny of the managerial mistreatment of its workers and

the corporation's mismanagement of its

[[Page 31235]]

employees' safety concerns program, a ``chilled atmosphere'' remains

intact and entrenched.

As a basis for the Petitioners' request for a Department of Justice

investigation, the Petition states that ``[s]ince it has been reported

that NU management employees attempted to destroy the list, NRC has a

duty to refer this apparent deliberate attempt to evade the otherwise

lawful exercise of authority by NRC to the Department of Justice for

complete investigation. This alleged attempt to cover up wrong doing by

NRC's licensee is a potential obstruction of justice that should be

fully and fairly investigated.''

On March 11, 1998, the NRC acknowledged receipt of the Petition and

informed the Petitioners that the Petition had been assigned to the

Office of Nuclear Reactor Regulation to prepare a response and that

action would be taken within a reasonable time regarding the specific

concerns raised in the Petition. The Petitioners were also informed

that their request for immediate action to revoke the operating license

and refer the incident to the Department of Justice was denied because,

due to the three Millstone units being shut down, protection of public

health and safety did not warrant immediate action. The Petitioners

were also informed that the NRC would consider the licensee's response

to the staff's February 10, 1998, request for information concerning

the incident before the Commission allows restart of any Millstone

unit. To this extent, the Petitioners' request for immediate action was

partially granted.

II. Discussion

The NRC staff has completed its evaluation of the Petitioners'

requests. The following discussion is based on information provided by

the licensee and information independently obtained by the NRC staff.

The Petitioners' first two requests are similar in nature and are

addressed in Section II.A. The third request is addressed in Section

II.B.

A. Request To Revoke the Operating License for Millstone Units 1, 2,

and 3

The Petitioners based this request on their assertion of ongoing

intimidation and harassment of the workforce by NU management and

persistent licensee defiance of NRC regulations and directives to

create a ``questioning attitude'' for its workers to challenge

management on nuclear safety issues without fear of harassment,

intimidation, or reprisals. As support for their assertions, the

Petitioners referred to the wording in a document prepared by NU's

Nuclear Oversight Department titled ``Focus 98: Director/VP View of

Nuclear Oversight (1/11/98).'' The document listed seven ``Positive

Qualities of Nuclear Oversight'' and seven ``Areas Needing

Improvement.'' Within ``Areas Needing Improvement'' was a category

entitled ``Current SCWE [safety-conscious work environment] and

issues.'' One of the six areas listed in this category was ``inability

to ``isolate'' cynics from group culture.''

On January 29, 1998, the U.S. Nuclear Regulatory Commission (NRC)

became aware of the Nuclear Oversight Department's Focus 98 document.

The NRC was concerned that language contained in the document was not

consistent with encouraging a questioning attitude necessary for

fostering a safety-conscious work environment. As a result, the NRC

required the licensee, in a February 10, 1998, letter, to describe in

writing, under oath or affirmation (1) the circumstances surrounding

the creation and distribution of the document and whether the events

constitute a violation of 10 CFR 50.7; (2) how this document came into

existence, in light of NU's efforts to create a safety-conscious work

environment, and NU's assessment of the document's effect on the

willingness of employees to raise concerns with the Company; and (3)

any remedial actions needed to prevent recurrence.

NU responded to the NRC's request in March 12, March 26, and April

24, 1998, letters. NU's March 12, 1998, response included reference to

an NU-directed investigation into the circumstances surrounding the

creation and distribution of the Focus 98 document. The March 12, 1998,

response also contained a redacted copy of a survey conducted in

February 1998 by consultants Nilsson and Associates to determine

whether the events that the Petitioners complained about negatively

impacted the Millstone workforce and had created any reluctance to

raise safety issues at the Millstone facility. The investigation report

was transmitted to the NRC by the March 26, 1998, letter. The April 24,

1998, letter provided additional information regarding the collection

of the Focus 98 document. In its submittals, NU described two Nuclear

Oversight Department meetings relevant to the development of the Focus

98 document, its use, and its distribution.

The first meeting was held on January 11, 1998, and involved the

Vice President--Nuclear Oversight, his three Directors, the Executive

Assistant to the Vice President, and a consultant to the Vice

President. The meeting was held to prepare for an upcoming Nuclear

Oversight management team-building session and explore the strengths

and weaknesses of the Nuclear Oversight organization for discussion at

that meeting. Each of the six participants brought to the meeting

approximately three strengths and three weaknesses that each considered

applicable to Nuclear Oversight, and it was from these inputs that the

Focus 98 document list of ``Positive Qualities of Nuclear Oversight''

and ``Areas Needing Improvement'' was developed. The inputs from the

meeting participants were recorded and grouped, and the licensee's

consultant used this information to prepare the one-page Focus 98

document. Prior to the January 21, 1998, team-building session, the

Focus 98 document had been distributed to the January 11, 1998, meeting

participants for review and had generated no comments. NU concluded

from its investigation, including interviews with each of the meeting

participants, that the participants did not intend for the wording to

convey the notion that Nuclear Oversight management should seek to

isolate individuals who have raised concerns in the past, nor did

management intend to send the signal that it views people who raise

concerns as ``cynics'' or bad influences on the organization. NU

concluded that the phrases in the document ``isolation of `cynics,'' '

``too much negative energy (personnel issues),'' and ``pockets of

negativism'' were poorly chosen words that were intended to convey the

belief that the Nuclear Oversight organization recognizes that there

are people who have ill feelings toward NU and who are seeking to

impose their views on others who may disagree, and that this imposition

was affecting the organization. NU pointed out in its submittal that

the document was intended to generate discussion and did not represent

policy or direction of Nuclear Oversight management.

The second meeting was held on January 21, 1998, and involved

Nuclear Oversight management ranging from first-line supervisors to the

Vice President--Nuclear Oversight. The purpose of the meeting was

Nuclear Oversight team building and one topic on the agenda was a

discussion of the organization's strengths and weaknesses. The Focus 98

document was distributed when the organization's strengths and

weaknesses were to be discussed. NU states that soon after the Focus 98

document was distributed, several managers/supervisors objected to the

included phrase ``inability to

[[Page 31236]]

`isolate' cynics from group culture.'' NU further states that the Vice

President and Directors were initially surprised by the reaction, and

ultimately agreed that the words had been poorly chosen and were not

reflective of management's position.

On the basis of its investigation, NU concluded that the

circumstances of the creation of the Focus 98 document indicated that

no one in management intended to encourage any form of discrimination

against anyone engaging in protected activity. NU also responded that

no action took place because of the document's existence and, thus, no

person who had engaged in protected activity suffered any adverse

employment action.

The NRC staff reviewed NU's responses to the NRC's February 10,

1998, letter, including the investigation report, and separately

interviewed eight people involved in the preparation, use, and

distribution of the Focus 98 document. The staff determined that the

Focus 98 document had been developed as material for establishing

talking points for a then-upcoming January 21, 1998, management team-

building session. The staff also determined that points listed in the

Focus 98 document under ``Areas Needing Improvement'' were intended by

those participating in the January 11, 1998, meeting to convey

potential organizational weaknesses as points for discussion, and not

to represent current or future management policy. The staff also found

that the Focus 98 document had been developed informally, with no

formal review and approval process, for use as a handout at an upcoming

Nuclear Oversight Department team-building session.

The NRC staff's reviews, including interviews with NU staff

involved in the incident, confirmed that the general purpose of the

Nuclear Oversight management team meeting on January 21, 1998, was to

improve Nuclear Oversight organizational interactions. Furthermore, the

NRC staff found that the Focus 98 document was intended to facilitate

the discussion of one of many topic areas to be covered at the all-day

meeting. The NRC staff's inquiries confirmed that Nuclear Oversight

management was surprised by the immediate reaction and concern of the

January 21, 1998, meeting participants regarding certain language in

the Focus 98 document, and that following a discussion of the wording,

management recognized the unintended implication of the words. After

reviewing the available information, the NRC staff concludes that the

wording at issue used in the Focus 98 document was no more than poorly

selected terminology intended to convey a perceived Nuclear Oversight

organizational weakness.

In its March 12, 1998, response, NU stated that once it became

apparent that non-supervisory employees in the Nuclear Oversight

Department, who had not attended either the January 11 or January 21,

1998, meetings, knew about the troubling language in the Focus 98

document, NU took several actions to mitigate and assess the potential

consequences to ensure that the release of the Focus 98 document and

surrounding circumstances did not cause a chilling effect on the

organization. On January 29, 1998, the Vice President--Nuclear

Oversight held an all-hands meeting with members of his organization at

which he apologized for the language in the document and assured the

organization that he and the Directors were not trying to discourage

anyone from voicing concerns. That same day, the President and Chief

Executive Officer of Millstone and the Vice President--Nuclear

Oversight met with the Millstone leadership team and described the

circumstances surrounding the document. On January 30, 1998, NU issued

a site-wide communication discussing the two meetings in detail. NU

also assessed the effect of the document on the workforce through

investigations and surveys. NU directed the consulting firm Nilsson and

Associates to conduct an in-depth assessment of the document's effect

on Nuclear Oversight Department employees and on employees who interact

with the Nuclear Oversight Department. The assessment found that none

of the 56 people interviewed indicated that the document has made them

reluctant to raise concerns.

The Petitioners also refer generally, as a basis for their request,

to ongoing NU intimidation and harassment of its workforce and

persistent licensee defiance of NRC regulations and directives to

create a safety-conscious work environment. NU performance in these

areas has been extensively assessed. An NRC Order issued on October 24,

1996, required NU to take specific actions to resolve problems in its

processes for handling employee safety concerns at the Millstone

station. As required by the Order, NU developed and implemented a

comprehensive plan for reviewing and dispositioning safety issues

raised by its employees, and for ensuring that employees who raise

safety concerns can raise them without fear of retaliation. NU's plan

included elements to (1) improve the operation of its Employee Concerns

Program organization; (2) enhance management and employee training

related to establishing and maintaining a safety-conscious work

environment; (3) form an Employee Concerns Oversight Panel; and (4)

identify and respond to organizational safety-conscious work

environment challenges. NU began implementing the plan in February

1997, and substantially completed implementation by January 1998. As

required by the Order, NU also submitted for NRC approval a proposed

independent third-party oversight program organization to oversee

implementation of its comprehensive plan. Little Harbor Consultants

Inc. (LHC) was approved by the NRC as the third-party oversight

organization and has been performing that function since April 1997.

LHC's assessments of NU's programs to improve the safety-conscious

work environment at Millstone station have noted significant

improvements in the past year. Based on information gained from

interviews with NU staff, program reviews, and assessment of licensee

responses to emerging personnel issues, LHC concluded at an April 7,

1998, meeting with NRC and NU that programs have improved and are at an

acceptable level. As reported in an LHC quarterly report for the first

3 months of 1998, transmitted to the NRC on April 22, 1998, LHC's

interviews with 298 NU employees, conducted in February 1998, showed an

improved work environment. LHC concluded from the results of these

interviews that at Millstone improvements have been made regarding the

willingness of the workforce to raise concerns, the confidence of the

workforce that safety concerns will be handled properly, the existence

of a questioning attitude, and the lack of any chilling effect.

The NRC has monitored and assessed LHC's oversight activities and

independently assessed NU's actions to upgrade its Employee Concerns

Program and improve the safety-conscious work environment at the

Millstone station. The NRC's April 21, 1998, letter to John Beck,

President, LHC, documents the NRC staff's evaluation of LHC's oversight

of NU's programs for handling employee concerns. The staff found that

LHC's oversight activities have been thorough and complete and that LHC

has effectively carried out its oversight activities. The NRC's April

20, 1998, letter to NU forwarded the results of the NRC staff's

evaluation of the Employee Concerns Program and safety-conscious work

environment at the Millstone station. The NRC staff's assessment of

these NU programs found that they were improved and functioning

effectively.

Based on the above, the Petitioners' request that the NRC revoke

Millstone's operating licenses for workforce

[[Page 31237]]

intimidation and actions to prevent the establishment of a

``questioning attitude'' with regard to employees voicing safety

concerns is denied.

B. Request for Investigation of NU Attempt To Destroy Focus 98 Document

The Petitioners also request that the NRC refer the Focus 98

document and NU's attempt to destroy the document to the Department of

Justice for investigation of a potential coverup. The Petitioners base

this request on reports that NU management attempted to destroy the

document. The Petitioners consider the NRC to have a duty to refer this

apparently deliberate attempt to evade the otherwise lawful exercise of

authority by the NRC to the Department of Justice for a complete

investigation.

In its March 12, 1998, letter to the NRC, NU states that

participants at the January 21, 1998, management team meeting agreed

that the words in the document were poorly chosen and, at the

suggestion of a consultant who was facilitating the meeting, the

participants agreed that the Focus 98 document should not be

distributed further because of the deficient wording. NU states that

most meeting participants dropped off their copy of the document with

the consultant when the meeting was over at the end of the day, and

others left it on tables in the room before they left. NU stated that

no one attempted to ensure that all the Focus 98 documents were

returned, counted the returned documents to determine if some had not

been turned in, or ordered the participants to turn in the documents.

The NRC staff reviewed NU's responses to the NRC's February 10,

1998, letter, including NU's investigation report, and conducted

separate interviews of individuals involved with the distribution and

collection of the Focus 98 document. Information from interviews

conducted by the staff confirmed that meeting participants generally

concluded that certain wording in the Focus 98 document was

inappropriate and susceptible to misinterpretation. Also, the staff's

information was consistent with NU's report that there was general

agreement by meeting participants to leave the document at the meeting.

The staff concludes that NU's actions to address the Focus 98 document

were not inappropriate. Therefore, the Petitioners' request to refer

the Focus 98 document and its recall and destruction to the Department

of Justice is denied.

III. Conclusion

The NRC staff has determined, for the reasons provided in the above

discussion, that the incident involving preparation and distribution of

the Focus 98 document does not represent action by NU to discriminate

against persons in the Nuclear Oversight Department. Although wording

in the document may have been inappropriate, the process for

preparation of the document, the informal nature of the document, and

the use of the document as discussion points on organizational

strengths and weaknesses, all indicate that the language in question in

the document involved a matter of poor word choice. The NRC staff also

has determined that efforts to collect the Focus 98 document after its

distribution at the end of the January 21, 1998, Nuclear Oversight

Department team-building session were not inappropriate, and that NU,

given the nature and use of the document, had no regulatory obligation

to provide it to the NRC or inform the NRC of its existence. As

discussed previously, the NRC was concerned that a document prepared

for use at an NU organizational function could contain such

inappropriate language, even if unintended. The NRC was further

concerned that the document could have a ``chilling effect'' on the NU

workforce. The NRC's February 10, 1998, letter to NU required NU to

respond to these NRC concerns. Based on the NRC staff's review of NU's

response and the NRC's own independent assessment of the event, the NRC

staff is satisfied with the actions taken by the licensee to assess the

chilling effect of the incident and to prevent recurrence. Accordingly,

the Petitioners' requests for revocation of NU's license to operate

Millstone Units 1, 2, and 3 for reasons associated with development of

the Focus 98 document are denied. The Petitioners' request that the NRC

refer the matter of the document's collection and destruction to the

Department of Justice for investigation is also denied.

As provided for in 10 CFR 2.206(c), a copy of this Director's

Decision will be filed with the Secretary of the Commission for the

Commission's review. This Decision will constitute the final action of

the Commission 25 days after issuance unless the Commission, on its own

motion, institutes review of the Decision in that time.

Dated at Rockville, Maryland, this 1st day of June 1998.

For the Nuclear Regulatory Commission.

Samuel J. Collins,

Director, Office of Nuclear Reactor Regulation.

[FR Doc. 98-15139 Filed 6-5-98; 8:45 am]

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