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

NUCLEAR REGULATORY COMMISSION

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

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

and 3, Haddam Neck Plant; Issuance of Director's Decision Under 10 CFR

2.206

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

Regulation, has issued a director's decision with regard to a Petition

dated March 3, 1997, filed by Mr. Albert A. Cizek, hereinafter referred

to as ``Petitioner.'' The Petition pertains to the Millstone Nuclear

Power Station, Units 1, 2, and 3, and the Haddam Neck Plant.

The Petitioner requested that the NRC:

1. Within 30 calendar days of receiving a total of three license

violations from the U.S. Nuclear Regulatory Commission [NRC] during

any [3-year] period, irrespective of the violation level, the

operating license of the facility shall be suspended for a period of

not less than 90 days and not more than 180 days.

2. Within 30 calendar days of receiving a total of three

violations of 10 CFR Part 50, including all applicable appendices,

from the [NRC] during any [3-year] period, irrespective of the

violation level, the operating license of the facility shall be

suspended for a period of not less than 90 days and not more than

180 days.

3. Within 30 calendar days of receiving a total of three

violations of the UFSAR [Updated Final Safety Analysis Report] from

the [NRC] during any [3-year] period, irrespective of the violation

level, the operating license of the facility shall be suspended for

a period of not less than 90 days and not more than 180 days.

4. Within 30 calendar days of receiving any harassment,

intimidation and discrimination (``HI&D'') finding by the U.S.

Nuclear Regulatory Commission, the U.S. Department of Labor, or any

[S]tate or [F]ederal court of competent jurisdiction, the operating

license of the facility shall be suspended for a period of not less

than 90 days and not more than 180 days.

5. If, within [5] years of a license suspension based on

paragraphs 1 through 4 above, the licensee receives a total of three

license violations from the [NRC], irrespective of the violation

level; receives a total of three violations of 10 CFR Part 50,

including all applicable appendices, from the [NRC], irrespective of

violation level;

[[Page 8698]]

receives a total of three violations of the UFSAR from the [NRC],

irrespective of violation level; or receives any HI&D finding by the

[NRC], the U.S. Department of Labor, or any [S]tate or [F]ederal

court of competent jurisdiction, the operating license of that

facility shall be permanently revoked within 90 calendar days.

6. In the event that the license of a facility is revoked

pursuant to paragraph 5, no operation of that facility for the

purpose of generating electric power shall be permitted during the

pendency of any administrative or judicial processes or appeals

related to such revocation.

7. In the event that the license of a facility is suspended or

revoked under paragraphs [1] through [5], the [NRC] shall designate

an appropriate licensee to maintain the facility in shutdown mode

for the duration of the suspension or until such time as a new

licensee is found to operate the facility. [Footnote omitted] NU

[Northeast Utilities] shall be responsible for all expenses related

to the operation of the facility during such shutdown. NU shall be

required to post a bond in the amount of $500,000,000 ([5] hundred

million) as reasonable assurance that it can fulfill this

requirement.

The Petitioner further requested that these license conditions be

imposed on the operating licenses of Millstone Units 1, 2, and 3 before

Commission approval to restart any of those plants, and further

requested that these license conditions be imposed on the operating

license of Haddam Neck before any decommissioning of that plant.

The Director of the Office of Nuclear Reactor Regulation has denied

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

``Director's Decision Pursuant to 10 CFR 2.206'' (DD-98-01), the

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

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

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

document rooms located at the Learning Resources Center, Three Rivers

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

and at the Waterford Library, ATTN: Vince Juliano, 49 Rope Ferry Road,

Waterford, Connecticut, for Millstone Units 1, 2, and 3; and at the

Russell Library, 123 Broad Street, Middletown, Connecticut, for the

Haddam Neck Plant.

A copy of the director's decision will be filed with the Secretary

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

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

regulation, the decision will constitute the final action of the

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

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

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

For the Nuclear Regulatory Commission.

Samuel J. Collins,

Director, Office of Nuclear Reactor Regulation.

DD-98-01

Director's Decision Pursuant To 10 CFR 2.206

I. Introduction

On March 3, 1997, Ernest C. Hadley, Esq., filed with the U.S.

Nuclear Regulatory Commission (NRC or Commission) a Petition pursuant

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

2.206), on behalf of Mr. Albert A. Cizek, hereinafter, referred to as

Petitioner. This submittal will hereinafter be referred to as the

Petition. The Petition was filed with the Executive Director for

Operations of the NRC. The Petition was referred to the Director of the

Office of Nuclear Reactor Regulations for preparation of a response.

The Petitioner requested that the NRC impose the following license

conditions on the operating licenses of Millstone Nuclear Power

Station, Units 1, 2, and 3, and the Haddam Neck Plant held by Northeast

Nuclear Energy Company (NNECO or Licensee):

1. Within 30 calendar days of receiving a total of three license

violations from the U.S. Nuclear Regulatory Commission [NRC] during

any [3-year] period, irrespective of the violation level, the

operating license of the facility shall be suspended for a period of

not less than 90 days and not more than 180 days.

2. Within 30 calendar days of receiving a total of three

violations of 10 [CFR] Part 50, including all applicable appendices,

from the [NRC] during any [3-year] period, irrespective of the

violation level, the operating license of the facility shall be

suspended for a period of not less than 90 days and not more than

180 days.

3. Within 30 calendar days of receiving a total of three

violations of the UFSAR [Updated Final Safety Analysis Report] from

the [NRC] during any [3-year] period, irrespective of the violation

level, the operating license of the facility shall be suspended for

a period of not less than 90 days and not more than 180 days.

4. Within 30 calendar days of receiving any harassment,

intimidation and discrimination (``HI&D'') finding by the [NRC], the

U.S. Department of Labor, or any [S]tate or [F]ederal court of

competent jurisdiction, the operating license of the facility shall

be suspended for a period of not less than 90 days and not more than

180 days.

5. If, within [5] years of a license suspension based on

paragraphs 1 through 4 above, the licensee receives a total of three

license violations from the [NRC], irrespective of the violation

level; receives a total of three violations of 10 [CFR] Part 50,

including all applicable appendices, from the [NRC], irrespective of

the violation level; receives a total of three violations of the

UFSAR from the [NRC], irrespective of violation level; or receives

any HI&D finding by the [NRC], the U.S. Department of Labor, or any

[S]tate or [F]ederal court of competent jurisdiction, the operating

license of that facility shall be permanently revoked within 90

calendar days.

6. In the event that the license of a facility is revoked

pursuant to paragraph 5, no operation of that facility for the

purpose of generating electric power shall be permitted during the

pendency of any administrative or judicial processes or appeals

related to such revocation.

7. In the event that the license of a facility is suspended or

revoked under paragraphs [1] through [5], the [NRC] shall designate

an appropriate licensee to maintain the facility in shutdown mode

for the duration of the suspension or until such time as a new

licensee is found to operate the facility. [Footnote omitted] NU

[Northeast Utilities] shall be responsible for all expenses related

to the operation of the facility during such shutdown. NU shall be

required to post a bond in the amount of $500,000,000 ([5] hundred

million) as reasonable assurance that it can fulfill this

requirement.

The Petitioner further requested that these license conditions be

imposed on the operating licenses of Millstone Units 1, 2, and 3 before

Commission approval to restart any of those plants, and further

requested that these license conditions be imposed on the operating

license of Haddam Neck before any decommissioning of that plant.

Additionally, the Petitioner requested that public hearings on the

Petition be scheduled in the immediate vicinity of the Millstone and

Haddam Neck reactors for the presentation of further evidence in

support of the Petition. The Petitioner specifically requested that

these public hearings be held and that a decision on this Petition be

issued before restart or decommissioning of any of these units.

The Petitioner sought the above license conditions on the basis of

the following contentions:

1. NU has knowingly, willingly and recklessly operated Millstone

Unit 1, Unit 2, Unit 3 at Waterford, [Connecticut], and its

Connecticut Yankee Nuclear Power Plant [i.e., Haddam Neck Plant] at

Haddam Neck, [Connecticut], in violation of their respective

operating licenses, the regulations of the NRC, and their respective

UFSARs for a prolonged period of time, which unnecessarily but

significantly compromised public health and safety by eroding the

required defense in depth philosophy.

2. NU has knowingly, willingly and intentionally harassed,

intimidated and discriminated against its employees who raise safety

concerns in violation of United States statutes and NRC regulations

for a prolonged period of time, which unnecessarily but

significantly compromised

[[Page 8699]]

public health and safety by eroding the required defense in depth

philosophy.

3. In the absence of express license conditions, there is no

reasonable assurance that NU will cease and desist from engaging in

these activities in the future.

A letter acknowledging receipt of the Petition was sent to the

Petitioner on April 8, 1997. In that letter, the NRC staff informed the

Petitioner that the NRC staff had decided not to hold a public hearing

as requested by the Petitioner. Instead, the NRC staff requested that

the Petitioner promptly supply, in writing, any additional information

relevant to the Petition. In letters of April 16 and July 19, 1997, the

Petitioner reiterated his request for an informal public hearing. In a

letter dated August 7, 1997, the NRC staff responded to the

Petitioner's letters of April 16 and July 19, 1997, and provided its

detailed basis for concluding that an informal public hearing as

requested by the Petitioner was not warranted. The NRC staff also noted

that the Petitioner had a public forum to raise his concerns through

the regularly scheduled public meetings held in the vicinity of the

Millstone site. The Petitioner did not provide the staff with any

additional evidence in support of the Petition.

II. Discussion

The NRC staff has reviewed the Petition and has not found any

information regarding either the Millstone or the Haddam Neck

facilities of which it was not already aware prior to receipt of the

Petition. As discussed below, these facilities have been the subject of

close NRC scrutiny for several years.

Millstone Facility

With regard to the Millstone units, the NRC staff has been

concerned for the last several years about the number and duration of

violations at the Millstone site in the broad programmatic areas of

design and licensing bases, testing, and radiological controls.

Programmatic concerns in these areas, along with concerns in other

areas, were major contributors to the decline in performance at the

Millstone site. In the cover letter to the most recent systematic

assessment of licensee performance (SALP) report of August 26, 1994,

the NRC staff stated that it had noted several performance weaknesses,

common to all three Millstone units. Among these were continuing

problems with procedure quality and implementation, the informality in

several maintenance and engineering programs (contributing to instances

of poor performance), and the failure to resolve several longstanding

problems at the site. In addition to these programmatic problems, the

Licensee has had significant problems in dealing with employee concerns

involving safety issues at the site.

On November 4, 1995, the Licensee shut down Millstone Unit 1 for a

scheduled refueling outage. The NRC sent a letter to the Licensee on

December 13, 1995, requiring the Licensee, before restarting Millstone

Unit 1, to inform NRC, pursuant to Section 182a of the Atomic Energy

Act of 1954, as amended (the Act), and 10 CFR 50.54(f), of the actions

taken to ensure that, in the future, the Licensee would operate that

facility according to the terms and conditions of the unit's operating

license, the Commission's regulations, and the unit's Final Safety

Analysis Report (FSAR).

In January 1996, NRC designated the three Millstone units as

Category 2 on the NRC's Watch List. Plants on the Watch List in this

category have weaknesses that warrant increased NRC attention until the

licensees demonstrate improved performance for an extended period of

time.

On February 20, 1996, the Licensee shut down Millstone Unit 2 when

it declared both trains of the high-pressure safety-injection (HPSI)

system inoperable because of a design issue. There was a potential that

the HPSI throttle valves could become plugged with debris when taking

suction from the sump during the recirculation mode.

On March 30, 1996, the Licensee shut down Millstone Unit 3 after

finding that containment isolation valves for the auxiliary feedwater

turbine-driven pump were inoperable because the valves did not meet NRC

requirements. In response to a Licensee root cause analysis of

inaccuracies in the Millstone Unit 1 FSAR, identifying the potential

for similar configuration control problems at Millstone Units 2 and 3

and the existing design configuration issues identified at these units,

NRC sent 10 CFR 50.54(f) letters to the Licensee on March 7 and April

4, 1996. These letters required that the Licensee inform the NRC of the

corrective actions taken regarding design configuration issues at

Millstone Units 2 and 3 before the restart of each unit.

In June 1996, the NRC designated the three units at Millstone as

Category 3 on the NRC's Watch List. Plants in this category have

significant weaknesses that warrant maintaining them in a shutdown

condition until the licensee can demonstrate to NRC that it has taken

adequate corrective actions to ensure substantial improvement. This

category also requires Commission approval before operations can be

resumed.

On August 14, 1996, the NRC issued a confirmatory order directing

the Licensee to contract with a third party to implement an independent

corrective action verification program (ICAVP) to confirm the adequacy

of its efforts to reestablish the design basis and configuration

controls for each of the three Millstone units. The ICAVP is intended

to provide additional assurance, before a unit restart, that the

Licensee has identified and corrected existing problems in the design

and configuration control processes for that unit.

On April 16, 1997, the NRC sent another 10 CFR 50.54(f) letter,

which superseded the earlier 10 CFR 50.54(f) letters and consolidated

its requests for information and periodic updates. The following

information was requested: (1) significant items that needed to be

accomplished before restart; (2) items that are to be deferred until

after restart; (3) NU's process and rationale for deferring items; and

(4) actions to be taken by NU to ensure that future operation will be

conducted in accordance with the terms and conditions of the operating

licenses, the Commission's regulations, and the FSARs. In a letter

dated May 29, 1997, the Licensee submitted the initial information

requested. Additional information and updates will be submitted in

accordance with the time intervals specified in the 10 CFR 50.54(f)

letter.

During eight NRC inspections conducted between October 1995 and

August 1996, more than 60 apparent violations of NRC requirements were

found at the Millstone site. These apparent violations were discussed

at a public predecisional enforcement conference held at the Millstone

site on December 5, 1996. During the meeting, the Licensee stated that

management had failed to give clear direction and oversight,

performance standards were low, management expectations were weak, and

station priorities were inappropriate. A notice of violation and

proposed imposition of civil penalties in the amount of $2,100,000 was

issued to the Licensee on December 10, 1997. This is the largest civil

penalty ever proposed by the NRC. In the enforcement action, the NRC

staff identified violations relating to inadequate engineering,

inadequate corrective actions, technical specifications violations, and

quality assurance violations.

Additionally, the Licensee has had a chronic problem of not dealing

effectively with employee concerns at

[[Page 8700]]

the Millstone site. On December 12, 1995, the NRC set up a review group

to conduct an independent evaluation of the history of the Licensee's

handling of employee concerns related to licensed activities at the

Millstone facility. The review group determined that, in general, an

unhealthy work environment, which did not tolerate dissenting views and

did not welcome or promote questioning attitudes, has existed at the

Millstone facility for the last several years. To address this problem,

the NRC issued an order on October 24, 1996, directing NU to devise and

implement a comprehensive plan for handling safety concerns raised by

Millstone employees and to ensure an environment free from retaliation

or discrimination. In addition, the order required NU to have an

independent third party oversee its employee concerns program. The

third-party is responsible for providing periodic reports to NU and NRC

detailing its findings and recommendations. The third-party findings

and the NU responses to them will be assessed by the NRC staff for any

restart issues.

The conduct of NRC regulatory oversight at the Millstone site is

based on the recognition that the Licensee bears primary responsibility

to demonstrate that corrective actions have been effectively

implemented. Thus, before the NRC staff can recommend that the

Commission approve the restart of any Millstone unit, the Licensee must

determine that a unit is in conformance with applicable NRC

regulations, its license conditions, and its FSAR, and that applicable

licensing commitments have been met. The Licensee's conformance with

NRC regulations, license conditions, and licensing commitments is

fundamental to NRC's confidence in the safety of licensed activities.

In short, the Licensee has the primary responsibility for the safe

operation of its facilities.

In a June 20, 1996, letter to NRC, the Licensee described its

Configuration Management Plan (CMP), which is its principal program to

provide reasonable assurance that weaknesses at the Millstone units

have been effectively corrected. The CMP includes efforts to understand

and correct the licensing and design-bases issues that led NRC to send

the 10 CFR 50.54(f) letters and order actions to prevent recurrence of

those issues. The Licensee stated that the objective of the CMP was to

document and meet the licensing and design-bases requirements of each

unit and to ensure that adequate programs and processes are in place to

maintain control of these requirements. The Licensee's CMP must either

correct each FSAR deficiency or evaluate it to ensure that the change

to the facility does not involve any unreviewed safety question or

change to the facility TSs. NU has documented a large number of

deficiencies, which vary in scope and safety significance for each

unit. These lists contain significant deficiencies that must be

corrected before restart and others that the Licensee is planning to

correct after restart. In its continuing reviews of the deficiency

lists, the NRC staff will determine whether the Licensee has

appropriately scheduled safety-significant items for completion before

restart and whether those items that the Licensee will defer until

after restart are appropriate for each unit. The results of these

efforts will be documented in NRC inspection reports.

The NRC's regulatory oversight of the Licensee's corrective actions

requires extensive planning and program integration. To focus more

regulatory attention on all of the restart issues related to the

Millstone units, NRC has established a Special Projects Office (SPO)

within the Office of Nuclear Reactor Regulation to oversee these

activities. The SPO has developed a comprehensive and multifaceted

oversight program to verify the adequacy of NU's corrective actions,

programs, and processes. The breadth and significance of the problems

identified at the Millstone site require this program. The SPO has

developed a Restart Assessment Plan (assessment plan) for each of the

Millstone units, which includes (1) the appropriate aspects of NRC

Inspection Manual, Manual Chapter (MC) 0350, ``Staff Guidelines for

Restart Approval''; (2) oversight of NU's ICAVP; and (3) oversight of

NU's corrective actions relating to employee concerns involving safety

issues. The activities associated with the assessment plan are in

addition to the normal inspection and licensing activities being

carried out at the Millstone site.

MC 0350 establishes the guidelines for approving the restart of a

nuclear power plant after a shutdown resulting from a significant

event, a complex hardware problem, or serious management deficiencies.

The primary objective of the guidelines in MC 0350 is to ensure that

NRC's restart review efforts are appropriate for the individual

circumstances, are reviewed and approved by the appropriate NRC

management levels, and provide objective measures of restart readiness.

The assessment plan for each unit includes those issues listed in

MC 0350 that the NRC staff has identified as relevant to the shutdown

of the unit. Each assessment plan also includes additional issues

determined to be applicable to the specific situation. The assessment

plans include all actions the NRC expects NU to take before the NRC

staff recommends to the Commission that a unit be permitted to restart.

Accordingly, the staff will use the assessment plan for each Millstone

unit to track and monitor all significant actions necessary to support

a decision on restart approval of the unit.

The assessment plan for each Millstone unit includes the

requirement to review the NU Operational Readiness Plan, the deficiency

lists associated with the assessment plan, including restart and

deferred items, the corrective action program, work planning and

controls, the procedures upgrade program, the nuclear oversight

function (quality assurance), outstanding enforcement items, and a

Significant Issues List (SIL), which includes issues identified by both

NU and NRC as issues requiring resolution before restart. NRC MC 93802,

``Operational Safety Team Inspection'' (OSTI), provides the framework

for a team inspection to be performed during the later stages of the

restart process. The inspection will be structured to focus on the

pertinent issues at each of the Millstone units.

Within the SPO, a Millstone Restart Assessment Panel (RAP) has been

formed in accordance with MC 0350. The RAP meets to assess the

Licensee's performance and its progress in completing the designated

restart activities. The RAP is composed of the Director, SPO

(chairman); the Deputy Directors of Licensing, Inspections, and

Independent Corrective Action Verification Program Oversight; the

project managers for the three Millstone units; the Inspection Branch

Chief; the senior resident inspectors for the three Millstone units;

and the appointed Division of Reactor Safety representative. The RAP

holds periodic meetings with the Licensee to discuss the Licensee's

corrective actions and schedules of each Millstone unit. Notices of the

meetings with the licensee are issued and the meetings are open to the

public. Additionally, NRC holds frequent meetings with the public near

the Millstone facility that include a summary of the latest meeting

with the Licensee, updates on NRC activities, and questions and

comments from the public.

The purpose of the ICAVP, as stated in the confirmatory order, is

to confirm that the plant's physical and functional characteristics are

in conformance with its licensing and design bases. The ICAVP audit

required by NRC is expected to provide independent verification, beyond

NU's quality

[[Page 8701]]

assurance and management oversight, that the Licensee has identified

and satisfactorily resolved existing nonconformances with the design

and licensing bases; documented and utilized the licensing and design

bases to resolve nonconformances; and established programs, processes,

and procedures for effective configuration management in the future. NU

has started programs to identify and understand the root causes of the

licensing and design-bases issues that led to NRC issuance of the 10

CFR 50.54(f) letters to NU and to implement corrective actions to

ensure that NU maintains the design configuration and that each unit is

in conformance with its licensing basis. NU has indicated that the

scope of its corrective programs will include those systems that it has

categorized as either Group 1 (safety-related and risk-significant) or

Group 2 (safety-related or risk-significant). The ICAVP audit must

provide insights into the effectiveness of NU's programs so that the

results can be reasonably extrapolated to the structures, systems, and

components that were not reviewed in the audit.

The NRC staff has developed a comprehensive and multifaceted

oversight process to provide a high level of confidence that the

Licensee has implemented required corrective actions and that all of

the issues on the SILs have been resolved. The independent third-party

evaluations required by NRC will be used to enhance NRC confidence that

the Licensee's corrective action programs have been effectively

implemented at each unit.

NRC activities (including oversight of the ICAVP) to ensure that

effective corrective actions are being taken by the Licensee will

provide additional assurance that the Licensee's corrective action

programs have been effectively implemented. These activities will

include in-process reviews of the ICAVP contractor's activities,

reviews of the ICAVP results, and additional independent reviews of

compliance with the design and licensing bases of selected systems. The

State of Connecticut's Nuclear Energy Advisory Council has provided

input to the NRC staff for selecting the systems that will be reviewed

by the ICAVP contractor and has been invited to observe the NRC staff's

ICAVP inspections.

When the restart review process has identified, corrected, and

reviewed relevant issues regarding each Millstone unit, a restart

authorization process will be initiated for that unit. Upon receipt of

an NRC staff recommendation and a briefing on any ongoing

investigations, the Commission will meet to assess the recommendation

and vote on whether to allow the restart of the unit. The same process

will be followed for the remaining units.

It is important to note that the Licensee and NRC are continuing to

identify problems at the Millstone site, as documented in inspection

reports issued after this Petition was filed. These findings indicate

that the corrective actions required to restart the Millstone units

have not yet been fully implemented. The NRC staff will not recommend

that the Commission allow the restart of a Millstone unit until the NRC

staff has determined, in accordance with the assessment plan, that the

necessary corrective actions have been effectively implemented for the

unit. Following any positive Commission vote for restart, the unit will

remain on NRC's watchlist, in Category 2, and will continue to be

subject to a high level of NRC oversight. The unit will remain as a

Category 2 watchlist plant until the NRC determines that the Licensee's

performance warrants a normal level of NRC oversight.

Haddam Neck Facility

The Licensee shut down the Haddam Neck facility on July 22, 1996,

as required by the facility's TSs, because of concerns that service

water piping for the air recirculation fans in the containment may

exceed design loads during certain accident scenarios. The Licensee

determined that these concerns and other hardware and programmatic

problems identified before and during the forced outage should be

resolved before restarting the plant. Thus, the Licensee decided to

begin Refueling Outage 19 on August 17, 1996. On October 9, 1996, the

owners of the Haddam Neck Plant stated that a permanent shutdown of the

plant was being considered by the Board of Trustees as a result of an

economic analysis of operations, expenses, and the cost of replacement

power. Subsequently, all fuel assemblies were removed from the reactor

and placed in the spent fuel pool.

From November 21, 1995, to November 22, 1996, NRC conducted

numerous inspections at the Haddam Neck Plant to review several facets

of plant performance. These inspections included a special team

inspection by NRC headquarters staff focused on engineering

performance; a special augmented inspection team (AIT) inspection of a

reactor vessel nitrogen intrusion event in late August and early

September 1996, which lowered the reactor vessel water level; a special

radiation protection inspection of a significant contamination event in

November 1996; an emergency preparedness inspection to observe the

Licensee's response during an emergency exercise held in August 1996;

and several resident inspections. Numerous violations, as well as

several significant regulatory concerns, were identified during these

inspections. Most of the violations were discussed at a transcribed

public predecisional enforcement conference at the Millstone training

building in Waterford, Connecticut, on December 4, 1996. That

conference was open to the public and focused on the broader

programmatic deficiencies underlying the violations that contributed to

the problems at Haddam Neck. A notice of violation and proposed

imposition of civil penalties in the amount of $650,000 was issued on

May 12, 1997, and was subsequently paid by the Licensee.

By letter dated December 5, 1996, the Licensee certified to the

NRC, pursuant to 10 CFR 50.82(a)(1)(i) and 10 CFR 50.82(a)(1)(ii), that

it had decided to permanently cease operations at the Haddam Neck Plant

and had permanently removed the fuel from the reactor. The Licensee

further noted that a post-shutdown decommissioning activities report

(PSDAR) and a site-specific decommissioning cost estimate would be

submitted in accordance with 10 CFR 50.82, ``Termination of License.''

Therefore, the NRC's restart process oversight described for the three

Millstone units is not applicable to the Haddam Neck Plant. However,

the NRC staff has taken pertinent actions at the Haddam Neck Plant.

A confirmatory action letter (CAL) was issued to the Licensee on

March 4, 1997, concerning radiological-control problems at the Haddam

Neck Plant to ensure that the limited activities at the site will be

conducted in a safe manner and in accordance with regulatory

requirements. The CAL confirms the Licensee's commitment to not perform

any radiological work, except that required to maintain the plant in a

safe configuration until the corrective actions identified in the CAL

have been implemented.1

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\1\ In a November 17, 1997, letter, the NRC staff confirmed

certain modifications of the Licensee's commitments on the conduct

of radiological work at the Haddam Neck Plant. The modification

allows the Licensee to remove an 8-foot section of piping associated

with the reactor coolant system to allow vendors to determine the

best method for eventual decontamination of the entire reactor

coolant system.

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As with the Millstone site, it is important to note that the

Licensee and NRC continue to identify problems at the Haddam Neck

Plant, as documented in inspection reports issued after this

[[Page 8702]]

Petition was filed. These findings indicate that the corrective actions

required to be completed before conducting significant decommissioning

activities have not yet been fully implemented. The NRC staff will

continue to closely monitor the Licensee's activities until the staff

has determined that the necessary corrective actions have been

effectively implemented for the unit.

III. NRC Response to Requested Actions

The Petitioner requested that a mechanistic enforcement approach be

used at the Millstone and Haddam Neck plants to preclude recurrence of

the problems.

The NRC's enforcement policy, which has been revised many times

since the March 9, 1982, policy was first issued, continues to

recognize that the regulation of nuclear activities does not lend

itself to a mechanistic treatment. The NRC staff's extensive experience

shows that judgment and discretion must be exercised in determining the

severity levels of the violations and the appropriate enforcement

sanctions.

The latest staff assessment of the NRC's enforcement policy was

completed in 1997 (NUREG-1622 2). This assessment also

contained a discussion of a suggestion from the public 3

recommending that the enforcement policy be modified to eliminate what

was viewed as subjective enforcement based on performance issues. In

particular, the commenter recommended that the NRC staff consistently

impose a civil penalty every time a licensee fails to meet a

requirement, regardless of a licensee's performance or ability to meet

requirements in other areas. The NRC staff's assessment concluded, in

part, that ``the staff does not believe that the enforcement policy

should be reduced to a formula for rigid application. Few cases are

entirely straightforward, and the NRC must always apply judgment in

determining whether to give credit for the licensee's actions.'' The

Petitioner requested that mechanistic enforcement-related license

conditions be added to the Millstone and Haddam Neck licenses. As noted

above, the NRC staff has long experience in the enforcement of its

requirements. That experience shows that judgment and discretion based

on the facts at hand are key elements in any enforcement decision. A

fair and reasonable enforcement decision cannot be made without an

understanding of the nature of the violations involved and the context

in which the violations occurred. The Petitioner's approach calls for

specific and severe sanctions based on unknown future events of unknown

significance occurring in an unknown context. Such an approach is

unreasonable and could very well be found as arbitrary and capricious

and thus legally unsound. It is not an approach that the NRC staff

would apply in any case and so it would not be applied in the case of

the Millstone and Haddam Neck units as requested by the Petitioner.

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\2\ As of the date of this Director's Decision, this NUREG has

not been issued. It is expected to be issued shortly.

\3\ September 9, 1997, letter from David A. Lochbaum of the

Union of Concerned Scientists.

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As noted in the Discussion section above, the NRC staff is aware of

the significant performance problems at the Licensee's facilities.

These performance problems have led the NRC staff to increase its

oversight activities at these facilities. The Millstone plants will not

be allowed to restart until the NRC staff is satisfied that sufficient

corrective action has taken place and until Commission approval is

granted. After restart, the plants will continue to be subject to a

high level of NRC oversight until the NRC determines that the

Licensee's performance warrants a normal level of NRC oversight. The

decommissioning of the Haddam Neck Plant will not be allowed to proceed

until the NRC staff determines that the applicable performance problems

noted there have been corrected. The Licensee has also made significant

management changes at each of these facilities. In the NRC staff's

judgment, the scope of actions taken by the Licensee and the NRC

regarding these facilities is extensive.

Furthermore, the NRC staff has had significant experience in

overseeing licensees that have either been ordered to or have

volunteered to shut down their facilities because of performance

problems. For example, in NRC's Region I alone, the Pilgrim, Peach

Bottom, Nine Mile Point, Calvert Cliffs, FitzPatrick, and Indian Point

Unit 3 plants have been shut down while significant problems were

corrected. Despite their significant problems, these plants have been

able to perform corrective actions that have significantly improved the

performance of these facilities. On the basis of the special

circumstances involved with overseeing the restart of plants shut down

for performance problems, the NRC staff developed MC 0350 (for more

detail about this document, see Discussion section). Thus, the NRC

staff has a considerable amount of experience overseeing facilities

shut down because of significant enforcement problems; the NRC staff

has seen numerous examples of licensees that have successfully improved

their performance to a level acceptable for restart and continued

operation; and, the NRC staff has a tested procedure in place to safely

oversee the restart of such facilities.

Regarding the Haddam Neck Plant, the risks to the public from a

permanently shutdown facility are significantly less than those from an

operating power plant. Additionally, as noted in the preceding

discussion, the NRC staff is closely observing the Licensee's actions

until confidence in the Licensee is restored.

IV. Conclusion

In summary, a mechanistic enforcement approach will not be applied

by the NRC staff in this matter. Such an approach is neither necessary

nor appropriate to assure regulatory compliance and safe conduct of

activities at the Millstone and Haddam Neck facilities. Extensive

efforts have been and are being taken by the Licensee to assure that

future operation of the Millstone units and decommissioning of the

Haddam Neck Plant are accomplished safely. The NRC staff has in place

an extensive oversight program to assure that the Licensee meets its

objectives. The NRC staff also has extensive experience with other

facilities in assessing major corrective action programs providing

assurance that its oversight of the Licensee's corrective action

efforts will be sound and will assure that the Commission receives a

sound NRC staff recommendation before the Commission itself determines

whether restart of the Millstone units is warranted. After restart, the

plants will continue to be subject to a high level of NRC oversight

until the NRC determines that the Licensee's performance warrants a

normal level of NRC oversight. Accordingly, the Petitioner's request

for specific enforcement-related license conditions at the Millstone

and Haddam Neck facilities is denied.

As provided for in 10 CFR 2.206(c), a copy of this decision will be

filed with the Secretary of the Commission for the Commission's review.

This director's decision will constitute the final action of the

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

motion, institutes review of the decision in that time.

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

For the Nuclear Regulatory Commission.

Samuel J. Collins,

Director, Office of Nuclear Reactor Regulation.

[FR Doc. 98-4325 Filed 2-19-98; 8:45 am]

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