[Federal Register Volume 62, Number 19 (Wednesday, January 29, 1997)]
[Notices]
[Pages 4360-4365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2162]


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NUCLEAR REGULATORY COMMISSION
[Docket Nos. 50-255 and 72-7]


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

    Notice is hereby given that the Acting Director, Office of Nuclear 
Reactor Regulation, has issued a Director's Decision concerning a 
Petition dated September 19, 1995, as amended on September 30, 1996, 
filed by Don't Waste Michigan and Lake Michigan Federation 
(Petitioners) under Section 2.206 of Title 10 of the Code of Federal 
Regulations (10 CFR 2.206). The Petition requested that the NRC (1) 
find that Consumers Power Company (licensee) violated NRC requirements 
related to unloading procedures for dry storage casks for spent nuclear 
fuel, (2) suspend the licensee's use of the general license provisions 
related to dry cask storage of spent nuclear fuel, (3) require a 
substantial penalty be paid by the licensee, and (4) conduct hearings 
related to unloading procedures for dry storage casks at Palisades.
    The Acting Director of the Office of Nuclear Reactor Regulation has 
determined that Petition should be granted in part and denied in part 
for the reasons stated in the ``Director's Decision Under 10 CFR 
2.206'' (DD-97-01), the complete text of which follows this notice. The 
decision and documents cited in the decision are available for public 
inspection and copying in the Commission's Public Document Room, the 
Gelman Building, 2120 L Street, NW, Washington, DC, and at the local 
public document room located in the Van Wylen Library at Hope College 
in Holland, Michigan.
    A copy of this decision has been filed with the Secretary of the 
Commission for the Commission's review in accordance with 10 CFR 
2.206(c). As provided therein, this decision will become the final 
action of the Commission 25 days after issuance unless the Commission, 
on its own motion, institutes review of the decision within that time.

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

    For the Nuclear Regulatory Commission.
Frank J. Miraglia,
Acting Director, Office of Nuclear Reactor Regulation.

Director's Decision Under 10 CFR 2.206

I. Introduction

    On September 19, 1995, the organizations Don't Waste Michigan and 
Lake Michigan Federation (Petitioners) filed a Petition pursuant to 
Section 2.206 of Title 10 of the Code of Federal Regulations (10 CFR 
2.206) requesting that the U.S. Nuclear Regulatory Commission (NRC) (1) 
find that Consumers Power Company (licensee) violated NRC requirements 
related to unloading procedures for dry storage casks for spent nuclear 
fuel, (2) suspend the licensee's use of the general license provisions 
related to dry cask storage of spent nuclear fuel, (3) require a 
substantial penalty be paid by the licensee, and (4) conduct hearings 
related to unloading procedures for dry storage casks at Palisades.
    On September 30, 1996, the Petitioners amended the Petition by 
including additional information in support of their position that the 
licensee did not have a workable unloading procedure before loading the 
13 dry storage casks currently in the Palisades independent spent fuel 
storage installation (ISFSI).
    The Petition has been referred to me pursuant to 10 CFR 2.206. The 
NRC letter dated October 24, 1995, to Dr. Sinclair and Mr. Skavroneck, 
on behalf of the Petitioners, acknowledged receipt of the Petition. 
Notice of receipt was published in the Federal Register on October 31, 
1995 (60 FR 55388).
    On the basis of the NRC staff's evaluation of the issues and for 
the reasons given below, the Petitioners' requests are granted in part 
and denied in part.

II. Background

    NRC regulations contain a general license that authorizes nuclear 
power plants licensed by the NRC, such as Palisades, to store spent 
nuclear fuel at the reactor site in storage casks approved by the NRC. 
(See 10 CFR part 72, subpart K.) In regard to dry cask storage of spent 
nuclear fuel at Palisades, the licensee opted to use the VSC-24 Cask 
Storage System designed by Sierra Nuclear Corporation. The VSC-24 Cask 
Storage System was added to the list of NRC certified casks in May 1993 
(58 FR 17948). The associated certificate of compliance, Certificate 
Number 1007, specifies the conditions for use of VSC-24 casks under the 
general license provisions of 10 CFR part 72. Section 1.1.2, 
``Operating Procedures,'' in the certificate of compliance for the VSC-
24 casks, requires that licensees prepare an operating procedure 
related to cask unloading. Specifically, the condition states

    Written operating procedures shall be prepared for cask 
handling, loading, movement, surveillance, and maintenance. The 
operating procedures suggested generically in the SAR (safety 
analysis report) are considered appropriate, as discussed in Section 
11.0 of the SER (safety evaluation report), and should provide the 
basis for the user's written operating procedures. The following 
additional written procedures shall also be developed as part of the 
user operating procedures:
    1. A procedure shall be developed for cask unloading, assuming 
damaged fuel. If fuel needs to be removed from the multi-assembly 
sealed basket (MSB), either at the end of service life or for 
inspection after an accident, precautions must be taken against the 
potential for the presence of oxidized fuel and to prevent 
radiological exposure to personnel during this operation. This 
activity can be achieved by the use of the Swagelok valves, which 
permit a determination of the atmosphere within the MSB before the 
removal of the structural and shield lids. If the atmosphere within 
the MSB is helium, then operations should proceed normally, with 
fuel removal, either via the transfer cask or in the pool. However, 
if air is present within the MSB, then appropriate filters should be 
in place to permit the flushing of any potential airborne 
radioactive particulate from the MSB, via the Swagelok valves. This 
action will protect both personnel and the operations area from 
potential contamination. For the accident case, personnel protection 
in the form of respirators or supplied air should be

[[Page 4361]]

considered in accordance with the licensee's Radiation Protection 
Program.

    The licensee for Palisades began loading casks in May 1993 after 
implementing pertinent certificate conditions, including those in 
Section 1.1.2.
    In July 1994, the licensee discovered radiographic indications of 
possible defects in a weld in multi-assembly sealed basket (MSB) No. 4. 
MSB No. 4 had been loaded with spent fuel earlier that month and 
placed, inside a ventilated concrete cask, on the ISFSI storage pad. 
The licensee evaluated the flaw indications and determined that the MSB 
continued to meet its design basis and was capable of safely storing 
spent fuel for the duration of the certificate (20 years). 
Nevertheless, the licensee stated that MSB No. 4 would be unloaded to 
support additional inspections and evaluations related to its future 
use.<SUP>1 In preparation for the unloading of MSB No. 4, the licensee 
reviewed the unloading procedure issued in May 1993 (Revision 0) and 
identified several technical questions. A revision of the unloading 
procedure (Revision 1) was subsequently developed to resolve the 
identified technical questions.
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    \1\ The schedule for unloading MSB No. 4 remains indefinite. The 
staff has recently learned that the licensee may postpone the 
unloading until a multi-purpose cask is available. This would allow 
the spent fuel currently stored in MSB No. 4 to be transferred to a 
cask that would support both storage and transportation of the spent 
fuel. The NRC staff is reviewing this plan and will initiate 
discussions pertaining to this matter with the licensee and other 
affected parties.
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    The technical questions and the associated procedural changes were 
discussed during meetings with the NRC staff, and additional 
information was provided in submittals from the licensee to the NRC. 
Evaluation of the revised unloading procedure by the NRC staff was 
initially made through the review of submittals from the licensee and 
has continued through an inspection of the licensee's revised unloading 
procedure.
    As a result of its inspections and reviews, the NRC staff 
recognized that some licensees, including Consumers Power Company, had 
developed unloading procedures that tended to be simplistic and lacked 
sufficient details and contingencies. In order to address these issues, 
an item related to cask loading and unloading procedures was added to 
the NRC dry cask storage action plan that was implemented in July 1995. 
Some issues, such as the thermal-hydraulic behavior of casks during the 
unloading process, were included largely as a result of questions 
related to the original unloading procedure at Palisades. Experience at 
other facilities using storage and transportation casks resulted in the 
identification of other issues. For example, as a result of the 
turbidity of the spent fuel pool during the unloading of a 
transportation cask at the Shearon Harris Nuclear Power Plant, the NRC 
staff assessed the potential for and significance of deposits on fuel 
assembly surfaces becoming loose during the unloading of dry storage 
casks. Evaluations and inspections were used to resolve these issues 
for specific facilities and revisions to NRC guidance documents have 
been prepared to resolve generic concerns.
    Completion of the NRC inspection of the revised unloading procedure 
for Palisades was postponed following an event at the Point Beach 
Nuclear Plant.<SUP>2 Following the hydrogen ignition event at Point 
Beach, the NRC issued confirmatory action letters (CALs) to those 
licensees using or planning to use VSC-24 casks for the storage of 
spent nuclear fuel (i.e., licensees for Point Beach, Palisades, and 
Arkansas Nuclear One). The CALs document the licensees' commitments not 
to load or unload a VSC-24 cask without resolution of material 
compatibility issues identified in NRC Bulletin 96-04, ``Chemical, 
Galvanic, or Other Reactions in Spent Fuel Storage and Transportation 
Casks,'' and confirmation of corrective actions by the NRC.<SUP>3
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    \2\ On May 28, 1996, a hydrogen gas ignition occurred during the 
welding of the shield lid on a VSC-24 cask at the Point Beach 
Nuclear Plant. The hydrogen was formed by a chemical reaction 
between a zinc-based coating (Carbo Zinc 11) and the borated water 
in the spent fuel pool.
    \3\ On December 3, 1996, the NRC staff informed the licensee for 
the Arkansas Nuclear One facility in Russellville, Arkansas, that it 
had completed its reviews and inspections associated with that 
facility and found that the licensee had satisfactorily completed 
the commitments documented in the CAL. Shortly thereafter, the 
licensee initiated cask-loading activities.
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    The NRC staff is continuing to review the bulletin responses and 
corrective actions for the Palisades facility, and, therefore, the 
licensee is restrained from loading or unloading additional VSC-24 
casks. Completion of the ongoing NRC inspection of the revised 
unloading procedure at Palisades will be coordinated with the staff's 
review of the licensee's response to the bulletin. Further, the NRC has 
committed to State officials and members of the public that the exit 
meeting for the inspection at Palisades will be open to the public, the 
meeting will be noticed sufficiently in advance to allow interested 
parties to attend, and the NRC staff will allocate time to discuss 
issues with the public following the meeting with the licensee.

III. Discussion

    The Petition requests four actions by the NRC on the basis of the 
contention that the original unloading procedure (Revision 0) 
implemented by the licensee was inadequate, and therefore, the licensee 
violated NRC regulations requiring the licensee, prior to using an 
approved cask, to establish that all conditions in a dry storage cask 
certificate of compliance have been met (see 10 CFR 72.212(b)(2)).
(1) Determine That the Licensee Violated NRC Requirements
    In support of the Petition's contention that the licensee violated 
NRC requirements related to the original unloading procedure, the 
Petitioners claim that issues identified in licensee documents dated 
November 11, 1994, and June 2, 1995, regarding revisions to the 
unloading procedure to support the planned unloading of Cask No. 4, 
demonstrate that the original procedure was inadequate. The amendment 
to the Petition filed on September 30, 1996, included issues related to 
material compatibility identified in NRC Bulletin 96-04 as additional 
evidence that the licensee's original unloading procedure was 
inadequate.
    The primary information offered by the Petitioners in support of 
their claim that the original procedure violated NRC requirements is 
identified in the licensee's document dated November 11, 1994. Although 
the issues identified by the Petitioners have been represented by the 
licensee as improvements or enhancements to the original unloading 
procedure to support the planned unloading of Cask No. 4 at Palisades, 
a potential inference that might be drawn from the November 11 document 
is that the original unloading procedure could not adequately support 
the unloading of Cask No. 4. However, the licensee's letter dated 
December 29, 1994, affirmed the licensee's position that the original 
unloading procedure was adequate, and therefore complied with the 
certificate of compliance. Additional information, including the 
revised unloading procedure and the supporting engineering analyses, 
was provided in the licensee's submittal to the NRC dated June 2, 1995. 
The NRC staff requested additional information from the licensee, and 
that information was provided by the licensee in submittals dated 
October 16, 1995, December 20, 1995, and July 19, 1996.
    On the basis of its review, the NRC staff concluded that, had the 
licensee attempted to unload a cask using the

[[Page 4362]]

original unloading procedure, certain deficiencies associated with the 
original procedure would have prevented completion of the unloading 
process. The original unloading procedure's administrative limit for 
maximum cask pressure would have prevented the licensee from 
establishing a continuous cooling cycle because the internal cask 
pressure would not have been sufficient to force steam to the outlet of 
the discharge piping at the bottom of the spent fuel pool. Other 
weaknesses in the original unloading procedure that would have hampered 
cask unloading included a restrictive venting capacity due to reliance 
upon a small vent line with an installed Swagelok fitting, scant 
guidance for personnel performing tasks such as drawing a gas sample 
from the MSB to check for damaged fuel, and several examples of 
references to the wrong step within the procedure. Such deficiencies 
and weaknesses would have required the licensee to suspend activities 
at one or more times during the unloading process in order to evaluate 
the problems encountered and implement necessary revisions to the 
procedure. Therefore, because the original unloading procedure would 
have required revision in order to complete the unloading process, this 
was a violation of requirements that all activities affecting quality 
be prescribed by procedures appropriate for the circumstances and that 
procedures are reviewed for adequacy. (See Criteria V and VI in 
Appendix B to 10 CFR Part 50.) <SUP>4 However, the staff also 
determined that the deficiencies in the original unloading procedure 
would not have challenged the integrity of the cask or fuel contained 
in the cask and that the licensee would have ultimately been able to 
safely unload a cask. Thus, given the limited safety significance of 
the procedural deficiencies and the fact that the licensee identified 
and corrected the deficiencies, the NRC exercised its discretion to 
refrain from issuing a Notice of Violation or a civil penalty for the 
violation.
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    \4\ Section 1.1.3 of the certificate of compliance for the VSC-
24 cask states that activities at the ISFSI shall be conducted in 
accordance with the requirements of 10 CFR part 50, appendix B. 
Requirements related to quality assurance for ISFSIs are also 
contained in subpart G to 10 CFR part 72. The requirements of 
Criteria V and VI in appendix B to 10 CFR part 50 are the same as 
the requirements stated in 10 CFR 72.150 and 10 CFR 72.152. In the 
case of the original cask unloading procedure at Palisades, the 
number of problems in the original procedure and the failure of the 
licensee to identify these problems during reviews performed prior 
to approval of the procedure resulted in the finding that a 
violation of NRC regulations had occurred. This finding is 
documented in NRC Inspection Report 50-255/96014.
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    The purpose and objective of the NRC's enforcement program are 
focused on using enforcement actions (1) as a deterrent to emphasize 
the importance of compliance with requirements, and (2) to encourage 
prompt identification and prompt, comprehensive correction of 
violations. Mitigation of enforcement sanctions, such as refraining 
from issuing a civil penalty and/or a Notice of Violation, is described 
in Section VII.B of the ``General Statement of Policy and Procedures 
for NRC Enforcement Actions (Enforcement Policy),'' for those cases in 
which a licensee identifies a problem and corrects it within a 
reasonable time. These mitigating factors were applicable to the 
subject Severity Level IV violation pertaining to the original 
unloading procedure at Palisades and the violation was, therefore, 
dispositioned as a Non-Cited Violation.<SUP>5
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    \5\ Although the NRC staff has identified weaknesses and 
deficiencies in the unloading procedure developed by the licensee, 
these problems resulted from the licensee giving insufficient 
consideration to the complexity of the activity. As part of its 
evaluation pertaining to the mitigation of enforcement sanctions, 
the NRC staff concluded that the licensee had not knowingly and 
willfully violated NRC requirements related to having an unloading 
procedure for dry storage casks as was claimed by the Petitioners.
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    As noted, the licensee, in various correspondence, took the 
position that the original unloading procedure was adequate and that 
subsequent changes incorporated into the revised procedure were 
enhancements based on lessons learned from operating experience and 
additional evaluations. Several statements in the licensee's 
correspondence appear to assert that unloading procedures for dry 
storage casks do not need to maintain fuel integrity during the 
unloading process in order to satisfy requirements of the certificate 
of compliance or NRC regulations. The NRC staff disagrees with this 
interpretation. NRC requirements mandate that the unloading process 
should be developed with due consideration to maintaining fuel 
integrity (see 10 CFR 72.122(h), 72.122(l), and 72.236(h)). Unloading 
activities are required to prevent gross ruptures of the fuel cladding 
in order to prevent operational safety problems. Unloading procedures 
are also required to include contingencies in case fuel cladding has 
degraded during storage such that additional measures are necessary to 
address increased radiological hazards during the unloading process. 
The NRC staff has concluded that the original unloading procedure would 
have supported unloading of undamaged fuel assemblies without causing a 
significant loss of fuel cladding integrity.
    The issues identified by the licensee in the document of November 
11, 1994, and for which the Petitioners claim that the original 
unloading procedure was inadequate, are addressed below.

MSB Cooling Skid

    The licensee modified the configuration of the fill and vent piping 
and components from that used in the original unloading procedure. An 
increase in the venting capacity and the use of the previous vent path 
for instrumentation necessitated these modifications. The original 
unloading procedure included steps to remove a gas sample for analysis, 
connect the venting arrangement to the spent fuel pool, and connect the 
cooling water supply from the spent fuel pool to the vacuum drying 
system water pump and the MSB drain line. Neither the Petitioners nor 
the NRC staff have identified fundamental safety concerns with the 
arrangement used in the original unloading procedure.

Thermal Hydraulic Modeling

    In order to verify that undamaged fuel could be safely removed from 
MSB No. 4 and to support preparing the revised unloading procedure, the 
licensee performed multiple analyses by modeling the thermal hydraulic 
behavior of the cask during the cooling process. These analyses were 
used to estimate the pressure response of the cask, to estimate the 
time requirements for cooling the cask, and to select the appropriate 
venting capacity in the revised unloading procedure. The analyses 
performed by the licensee showed that the venting capacity available 
for the original unloading procedure would have supported the cooling 
and refill of the MSB. These analyses also showed that cask unloading 
using the original procedure would have taken significantly longer than 
the time estimated for the revised procedure. However, no violations of 
regulatory requirements would have resulted from taking longer to 
complete the unloading process. The licensee's performance of the 
analyses during preparation of the revised unloading procedure 
highlighted the lack of supporting analyses or evaluations for the 
original version of the unloading procedure and contributed to the 
staff's finding that the licensee had violated the requirements of 
Criterion VI of appendix B to 10 CFR part 50 by issuing the original 
procedure without sufficient reviews to determine its adequacy.

[[Page 4363]]

Maximum Allowable Pressurization

    During its review of the unloading procedure, the licensee 
determined that the cask should be limited to 38.3 psig in order to 
satisfy criteria established by the American Society of Mechanical 
Engineers Boiler and Pressure Vessel Code. This value is conservative 
with respect to the pressure that would challenge the structural 
integrity of the MSB. The original unloading procedure included 
precautions to maintain the internal pressure less than 10 psig and 
thus was bounded by the subsequent evaluations and the acceptable 
conditions specified in the revised procedure.
    However, the staff has concluded that the procedural limitation of 
10 psig in the original unloading procedure would have introduced 
problems in establishing the cooling cycle because the pressure would 
have been too low to force steam or water from the MSB to the coolant 
discharge at the bottom of the spent fuel pool. These problems, in 
turn, likely would have prevented completion of cask unloading without 
revising the procedure. However, the problems would not have challenged 
the integrity of the cask or otherwise introduced a safety concern. 
Rather, upon identifying the problems caused by the administrative 
limit of 10 psig, the licensee could have revised the procedure, 
proceeded to establish the desired cooling cycle, and completed 
unloading of a cask.

Fuel Integrity During Cooling

    In support of preparing the revised unloading procedure, the 
licensee, with support from the nuclear fuel supplier, analyzed the 
allowable temperature differences between fuel assembly components and 
cooling water. Additional analyses determined maximum expected fuel 
temperatures before establishing the cooling flow to the MSB. These 
evaluations and the expected thermal response of the MSB and fuel 
assemblies following the introduction of coolant during the unloading 
procedure confirmed that thermal shocking would not challenge the 
integrity of the fuel assemblies in the MSB.

Fuel Heatup While the MSB is in the Transport Cask

    As previously mentioned, the licensee and the contractors analyzed 
the maximum fuel temperatures that could be experienced during the time 
that the MSB is in the transfer cask before establishing the cooling 
flow from the spent fuel pool to the MSB interior. These analyses were 
performed for various heat loads and time periods and included 
conservative analysis assumptions. The analyses showed that fuel 
temperature limits would not be exceeded before establishing the 
cooling flow from the spent fuel pool using the original (or the 
revised) unloading procedure.

MSB Lid Removal

    The revised unloading procedure uses more advanced cutting 
technologies in order to incorporate operating experience, ease lid 
removal, and minimize personnel exposure. The capability of the 
original unloading procedure to control removal of the MSB lid was 
verified by the licensee during mockups before loading casks at 
Palisades. Some of the improvements in the revised procedure are 
related to problems experienced during that exercise. However, the 
licensee has demonstrated that techniques for lid removal in the 
original unloading procedure were adequate to remove the lids and 
provide access to the fuel assemblies in compliance with NRC 
requirements.

Criticality Prevention

    The original unloading procedure included steps for sampling the 
spent fuel pool boron concentration and establishing time limits for 
lid removal following termination of recirculation flow. The NRC staff 
considers the original procedure's lack of a detailed contingency for 
preventing bulk boiling, as was incorporated into the revised 
procedure, a procedural weakness. However, the weakness does not 
translate into a concern related to public health and safety or 
personnel exposure because of the inherent conservatisms related to 
reactivity control for storage casks, such as assuming nonirradiated 
fuel assemblies in supporting calculations, and the time that would be 
available for the licensee to implement compensatory actions.

10 CFR 50.59 Evaluation Related to the MSB Cooling Skid

    Modifications to the MSB cooling skid led the licensee to question 
whether an unreviewed safety question was introduced by a possible 
break of the return line to the spent fuel pool. Upon further review, 
the licensee determined that the cooling system configuration did not 
create the possibility for an accident or a malfunction of a different 
type than any evaluated previously in the facility's final safety 
analysis report or otherwise exceed the criteria that define an 
unreviewed safety question under 10 CFR 50.59. The licensee has stated 
that this conclusion is also applicable for the original unloading 
procedure. Neither the Petitioners nor the NRC staff have identified a 
safety or compliance issue regarding the licensee's conclusion.

Rigging Procedures

    The licensee investigated several minor changes to the rigging 
process during the development of the revised unloading procedure. 
These changes are intended to ease the operations and reduce personnel 
radiation exposures. However, the staff determined that the guidance 
provided by the original procedure, combined with expected skill of 
licensee personnel, would have been adequate to control the lifting of 
the various loads associated with unloading a cask.

Helium Sampling

    During the development of the revised unloading procedure, the 
licensee recognized possible difficulties in drawing a gas sample from 
the MSB before initiating the cooling operation. The original unloading 
procedure included a step to ``remove a gas sample from the cask,'' but 
did not include the more detailed guidance that is incorporated into 
the revised procedure. This lack of guidance in the original procedure 
may have resulted in licensee personnel underestimating the helium 
concentration in the MSB. The original unloading procedure included 
provisions to suspend the unloading process if the sampling indicated 
air within the MSB. Therefore, this potential weakness in the original 
unloading procedure would not have introduced adverse safety 
consequences but instead may have erroneously caused the licensee to 
suspend cask unloading activities in order to conduct management 
briefings and determine compensatory measures due to the potential 
oxidation of the fuel cladding.

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

    On the basis of its evaluation of the licensee's original unloading 
procedure, the NRC staff affirmed the licensee's determination that the 
procedure had numerous weaknesses. The staff believes that the 
administrative limit of 10 psig for maximum cask pressure and other 
identified weaknesses in the original unloading procedure would have 
required the licensee to suspend activities at one or more times during 
the unloading process in order to evaluate the problems encountered and 
implement necessary revisions to the procedure. Given the number of 
weaknesses in the original unloading procedure and the licensee's 
failure to

[[Page 4364]]

perform the necessary levels of review and analysis to have determined 
its adequacy prior to its issuance, the NRC staff found that the 
licensee violated NRC requirements contained in Criteria V and VI of 
appendix B to 10 CFR part 50. The first request in the Petition, to 
find that the licensee violated NRC requirements related to unloading 
procedures for dry storage casks for spent nuclear fuel, is therefore 
granted. The violation was dispositioned as a Non-Cited Violation 
consistent with the NRC Enforcement Policy.
    The Petitioners' amendment to the Petition dated September 30, 
1996, claims that the original unloading procedure was inadequate 
because of its lack of controls related to the generation of hydrogen 
gas from a chemical reaction between coatings used on the VSC-24 casks 
and the borated water in the spent fuel pool. The chemical reactions 
and hydrogen issue were identified following an event that occurred 
during welding of the shield lid on a spent fuel storage cask at the 
Point Beach plant on May 28, 1996. The need to include special 
precautions in the unloading procedures for VSC-24 casks in order to 
prevent ignition of hydrogen gas had not been recognized by the cask 
vendor, licensees, or the NRC staff prior to the event at Point Beach. 
The licensee's original unloading procedure was developed before the 
event at Point Beach caused the recognition of the potential for 
ignition of hydrogen gas during the unloading of a VSC-24 cask. 
Accordingly, the NRC cannot reasonably fault the licensee, by taking 
enforcement action, for not having accounted for an issue that was not 
known to the NRC staff, the vendor, or the licensee.
(2) Suspend the Licensee's Use of the General License
    On the basis of the contention that the licensee's unloading 
procedure was inadequate, the Petitioners requested that the licensee's 
use of the general license provisions of 10 CFR part 72 be suspended 
until such time as the significant issues described in the licensee's 
document of June 2, 1995, have been resolved, the NRC has documented 
its review, approved the licensee's revised procedure, and Cask No. 4 
has been safely unloaded.
    The licensee's submittal of June 2, 1995, provided Revision 1 of 
the unloading procedure and supporting engineering analyses. The 
Petition includes specific questions and comments regarding the 
licensee's submittal of June 2, 1995, in support of the Petitioners' 
position that actions taken by the licensee had not resolved 
significant safety issues. In response to questions from the NRC staff, 
the licensee provided additional information related to the submittal 
dated June 2, 1995. The subsequent submittals were dated October 16, 
and December 20, 1995.<SUP>6 In addition, the NRC staff was reviewing 
and will continue to review the issues included in the submittal dated 
June 2, 1995, as part of the ongoing NRC inspection of the revised 
unloading procedure. Further, as described above, the NRC staff has 
already concluded that the deficiencies in the original unloading 
procedure violated NRC requirements, and that the violation should be 
treated as a Non-Cited Violation because of the limited safety 
significance of the procedural deficiencies and consideration of 
mitigating factors defined in the NRC Enforcement Policy.
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    \6\ These documents, like all others identified in this 
decision, are available to the public at the NRC Public Document 
Room, the Gelman Building, 2120 L Street, NW, Washington, DC, and 
from the local public document room located in the Van Wylen Library 
at Hope College in Holland, Michigan.
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    On June 3, 1996, the NRC issued CALs to the licensee and other 
users of the VSC-24 cask system. The CALs confirmed a commitment made 
by each licensee to the NRC staff to refrain from loading or unloading 
a VSC-24 cask pending completion of investigations and implementation 
of corrective actions. On June 27, 1996, a supplement to the CAL was 
issued to confirm a further commitment by the licensee to refrain from 
placing a VSC-24 cask into the spent fuel pool until after the NRC has 
reviewed and accepted applicable responses to NRC Bulletin 96-04 and 
verified corrective actions taken in response to the bulletin. CALs are 
among the administrative mechanisms that the NRC uses to supplement 
Notices of Violation, civil penalties, and orders in its enforcement 
program. CALs may be issued to confirm an agreement by a licensee or 
vendor to take certain actions to remove significant concerns about 
health, safety, safeguards, or the environment. The NRC expects 
licensees and vendors to adhere to stated obligations or commitments 
included in a CAL and will not hesitate to issue appropriate orders to 
ensure that such obligations or commitments are met.
    The NRC issued the CALs and Bulletin 96-04 in recognition of the 
fact that the generation of hydrogen gas during the loading of VSC-24 
casks at Point Beach was evidence that possible material compatibility 
issues were not fully addressed during the design or certification 
reviews associated with some spent fuel storage and transportation 
casks. It is not unusual for the NRC to use such administrative 
mechanisms to address generic issues. Given that the generation of 
flammable gases was a particular concern for the users of the VSC-24 
cask system, those licensees, including Consumers Power Company, were 
issued CALs to confirm that VSC-24 casks would not be loaded, unloaded, 
or otherwise placed in a spent fuel pool before the resolution of 
issues identified in NRC Bulletin 96-04.
    In regard to those issues contained in the amendment to the 
Petition, the existing CAL documents the licensee's commitment to 
refrain from loading, unloading, or otherwise placing a VSC-24 cask 
into the spent fuel pool pending verification of corrective actions 
related to NRC Bulletin 96-04. Given the licensee's commitment not to 
load or unload a cask, the NRC does not, in this instance, envision the 
need to issue an order as requested by the Petitioners.
    Those portions of the Petition that address NRC's approval of the 
revised unloading procedure and include the unloading of Cask No. 4 as 
a condition for resuming normal activities under the general license 
are denied. The NRC staff does not generally review and approve 
specific procedures developed by licensees. NRC regulations, facility 
licenses, and NRC-approved quality assurance programs require licensees 
to establish and maintain a formal process for the preparation and 
issuance of procedures and changes thereto. NRC assessments of licensee 
procedures are generally conducted as part of the NRC's inspection 
program. In this instance, given the licensee's commitment to refrain 
from action until completion of NRC's inspections, the inspections will 
confirm that applicable regulatory requirements are satisfied before 
use of the licensee's revised unloading procedure. As previously 
mentioned, the NRC staff will resume its inspection activities related 
to the revised unloading procedure when the licensee has resolved the 
issues identified in NRC Bulletin 96-04. If, and provided that, there 
is satisfactory resolution of the issues identified in NRC Bulletin 96-
04 and any other questions that may arise during the inspection of the 
licensee's revised unloading procedure, then the NRC will have 
reasonable assurance of the licensee's compliance with regulatory 
requirements. Accordingly, the staff would not have any basis or reason 
to require the licensee to unload Cask No. 4 before resuming normal 
activities under the general license at Palisades. Thus, following 
resolution of all issues to the satisfaction of the NRC staff, the 
determination of the sequence of events

[[Page 4365]]

related to the planned unloading of Cask No. 4 and the loading of 
additional casks at Palisades will be at the discretion of the 
licensee. As noted above, the NRC staff has committed to open the exit 
meeting with the licensee to the public at the conclusion of the 
ongoing inspection and will document its review in an inspection report 
that will be available for public review.
(3) Require the Licensee to Pay a Substantial Penalty
    On the basis of the contention that the licensee's original 
unloading procedure was inadequate, the Petitioners requested that the 
NRC levy a monetary penalty of $1.3 million against the licensee. As 
previously mentioned, the NRC staff determined that, although finding 
that the deficiencies in the original unloading procedure violated NRC 
requirements, the violation satisfied the criteria to be treated as a 
Non-Cited Violation because of the limited safety significance of the 
procedural deficiencies and consideration of mitigating factors defined 
in the NRC Enforcement Policy. Enforcement sanctions, including 
issuance of civil penalties and orders, are normally used as a 
deterrent to emphasize the importance of compliance with requirements, 
and to encourage prompt identification and prompt, comprehensive 
correction of violations. In this case, the licensee identified the 
deficiencies that constituted the violation of NRC requirements and 
subsequently revised the unloading procedure to resolve the identified 
technical issues. It was the judgement of the NRC staff that the 
violation should be dispositioned as a Non-Cited Violation in order to 
convey the appropriate regulatory message in this case. Further, even 
if the violation had been cited, it is the NRC staff's judgment that it 
would have been categorized at a Severity Level IV, for which a civil 
penalty would not ordinarily be issued.
    In regard to the hydrogen issues identified in the amendment to the 
Petition, the NRC staff has utilized an administrative mechanism in its 
enforcement policy (CALs) to ensure that the licensee takes certain 
actions to resolve this safety concern. As previously mentioned, the 
specific contentions raised by the Petitioners pertaining to hydrogen 
issues and the original unloading procedure do not warrant additional 
enforcement actions by the NRC.
(4) Allow Petitioners to Review Procedure, Require NRC to Hold 
Hearings, and Allow Petitioners to Participate in Proceedings
    The original unloading procedure and the first revision of the 
unloading procedure have been provided to the Petitioners. In addition, 
correspondence between the NRC and the licensee regarding the 
procedures have been furnished to the Petitioners. Further, due to the 
course of events following the licensee's decision to unload Cask No. 
4--including the licensee's evaluation of the original unloading 
procedure, identification of improvements to the unloading process, and 
the submittal of this Petition--the original and first revision of the 
unloading procedure and related documentation have been available for 
public review. Accordingly, Petitioners have had the opportunity to 
review the unloading procedure. Further, as noted elsewhere, it is the 
NRC staff's intention to hold a public meeting in the vicinity of the 
Palisades Nuclear Plant at the conclusion of its ongoing inspection of 
the licensee's revised unloading procedure.
    The Petitioners' request for hearings and participation in 
proceedings has been addressed in previous correspondence with the 
Petitioners and the Attorney General for the State of Michigan. In that 
correspondence, the NRC staff explained that neither the general 
licensing provisions of 10 CFR part 72 nor the petition process 
described in 10 CFR 2.206 require the NRC to institute a proceeding. 
Under Sec. 2.206, the NRC office director responsible for the subject 
matter of the request ``shall either institute the requested proceeding 
in accordance with this subpart or shall advise the person who made the 
request in writing that no proceeding will be instituted in whole or in 
part, with respect to the request, and the reasons for the decision.''
    As set forth in this Director's Decision, the NRC has determined 
not to institute the proceeding as requested by the Petition.
IV. Conclusion
    Petitioners requested that the NRC determine that Consumers Power 
Company violated NRC requirements, suspend the licensee's use of the 
general license, impose a substantial penalty, and hold hearings 
related to the licensee's unloading procedure for dry storage casks. In 
response, the NRC determined the licensee violated NRC requirements 
insofar as the original unloading procedure (Revision 0) would have 
required revision in order to have completed the unloading process. 
Further, NRC staff determined that the violation, which was identified 
and corrected by the licensee, should be treated as a Non-Cited 
Violation consistent with the NRC's Enforcement Policy. Therefore, to 
this extent, Petitioners' request for a determination that the licensee 
violated NRC requirements is granted. The available information is 
sufficient to conclude, however, that no substantial safety issue has 
been raised regarding the operation of Palisades or its associated 
ISFSI given the licensee's commitment not to load or unload a cask 
until the NRC staff is satisfied that the licensee's procedures are 
adequate. Therefore, the NRC has determined that no adequate basis 
exists for granting Petitioners' requests for suspension of Consumers 
Power Company's use of the general license for dry cask storage of 
spent nuclear fuel at Palisades or imposition of a civil penalty.
    A copy of this decision will be filed with the Secretary of the 
Commission for the Commission to review in accordance with 10 CFR 
2.206(c).
    As provided by this regulation, this decision will constitute the 
final action of the Commission 25 days after issuance, unless the 
Commission, on its own motion, institutes a review of the decision 
within that time.

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

    For the Nuclear Regulatory Commission.
Frank J. Miraglia,
Acting Director, Office of Nuclear Reactor Regulation.
[FR Doc. 97-2162 Filed 1-28-97; 8:45 am]
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