[Federal Register Volume 62, Number 56 (Monday, March 24, 1997)]
[Notices]
[Pages 13908-13915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7317]


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

NUCLEAR REGULATORY COMMISSION
[Docket Nos. 50-424 and 50-425]


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

    Notice is hereby given that the Acting Director, Office of Nuclear 
Reactor Regulation, has taken action with regard to a Petition dated 
September 11, 1990, by Michael D. Kohn, Esquire, on behalf of Messrs. 
Marvin Hobby and Allen Mosbaugh (Petitioners), pursuant to Section 
2.206 of Title 10 of the Code of Federal Regulations (10 CFR 2.206). 
The Petition was supplemented by submittals made on September 21 and 
October 1, 1990, and July 8, 1991. The Petition pertains the Vogtle 
Electric Generating Plant, Units 1 and 2.
    The Petition contained allegations regarding: the management of the 
Georgia Power Company (GPC) nuclear facilities; illegal transfer of GPC 
operating licenses to Southern Nuclear Operating Company (SONOPCO); 
intentional false statements to the NRC regarding GPC's organizational 
chain of command and the reliability of a diesel generator; perjured 
testimony submitted by a GPC executive during a DOL proceeding under 
Section 210 of the Energy Reorganization Act; repeated abuse at the 
Vogtle facility of Technical Specification 3.0.3; repeated willful 
technical specification violations at the Vogtle facility; repeated 
concealment of safeguards problems from the NRC; operation of 
radioactive waste systems and facilities at Vogtle in gross violation 
of NRC requirements; routine nonconservative and questionable 
management practices; and retaliation by GPC against managers who make 
their regulatory concerns known to GPC or SONOPCO management. The 
supplements to the Petition of September 21 and October 1, 1990, 
forwarded exhibits and provided additional information regarding the 
alleged illegal transfer of operating licenses. Based on these 
allegations, Petitioners requested that the NRC institute proceedings 
and take swift and immediate action.
    The July 8, 1991, supplement to the Petition repeated several of 
the earlier allegations, and also alleged that GPC's Executive Vice 
President made material false statements in GPC's April 1, 1991, 
submittal to the NRC that responded to allegations in the original 
Petition. The supplement also alleged that false statements had been 
made to the NRC by the same individual during a transcribed meeting on 
January 11, 1991, to discuss the formation and operation of SONOPCO. 
Based on these allegations, Petitioners requested the NRC to take 
immediate steps to determine if GPC's current management has the 
requisite character, competence, fundamental trustworthiness, and 
commitment to safety to continue operating a nuclear facility.
    Several issues in the Petition were further defined and reviewed in 
connection with the licensing proceeding before the Atomic Safety and 
Licensing Board (Docket Nos. 50-424-OLA-3; 50-425-OLA-3) regarding 
GPC's application for license amendments to transfer operating 
authority of the Vogtle facility to Southern Nuclear Operating Company 
(SONOPCO), and proceedings before the U.S. Department of Labor (DOL) as 
a result of separate discrimination suites filed by Messrs. Hobby (DOL 
Case No. 90-ERA-30) and Mosbaugh (DOL Case Nos. 91-ERA-001 and 91-ER-A-
011). Although the licensing proceeding concluded without a final Board 
decision when the parties settled and Mr. Mosbaugh withdrew as sole 
intervenor, the NRC staff has considered the evidence for the common 
issues in reaching decisions on the 10 CFR 2.206 Petition. The NRC 
staff recognizes that Mr. Mosbaugh has withdrawn his interest in the 
Petition. Nevertheless, the interest of Mr. Hobby in the joint Petition 
remains and is the purpose for the Acting Director's action to address 
the Petition. The decisions of the Secretary of Labor regarding the 
discrimination suites of Messrs. Hobby and Mosbaugh have been addressed 
by the NRC by means of enforcement action.
    As discussed in the Director's Decision, certain concerns raised by 
the Petitioners are partially substantiated. Violations of regulatory 
requirements have occurred in the operation of the Vogtle facility. A 
number of violations were identified and three civil penalties have 
been issued to GPC for certain of these violations. The three civil 
penalties resulted from (1) opening a valve when it was required to be 
closed by the Vogtle Technical Specifications to protect against a 
potential ``boron dilution'' event (2) providing inaccurate and 
incomplete information to the NRC regarding diesel generator testing, 
and (3) violating 10 CFR 50.7, ``Employee Protection,'' by 
discriminating against Messrs. Hobby and Mosbaugh for engaging in 
protected activities. The NRC has issued letters to GPC and to several 
GPC and SONOPCO individuals reminding them of their obligations to 
provide information to the NRC that is complete and accurate in all 
material respects, and of the need to ensure a proper environment in 
which employees can express regulatory concerns without fear of 
retaliation, harassment, intimidation, or discrimination. The licensee 
has committed to provide special training and notify the NRC before the 
individual who in 1990 was the Vogtle General Manager will be permitted 
to participate in licensed activities. As previously mentioned, 
Petitioner's request for proceedings has been

[[Page 13909]]

accomplished in large measure through the licensing transfer proceeding 
and through separate actions before DOL, the results of which are 
recognized by the NRC. To this extent, the Petitioners' request for 
action pursuant to 10 CFR 2.206 is granted.
    However, it has been determined that no unauthorized transfer of 
the Vogtle operating licenses has occurred, and that the GPC nuclear 
facilities are being operated in accordance with NRC regulations and do 
not endanger the health and safety of the public. Additionally, based 
on the staff's review of extensive information available to date, 
including the results of relevant enforcement actions, it is concluded 
that none of the issues call into question the licensee's character, 
competence, fundamental trustworthiness, or commitment to safety in the 
operation of its nuclear facilities. Therefore, the Acting Director for 
the Office of Nuclear Reactor Regulation declines to take any further 
action with respect to the issues raised in the Petition. To this 
extent, the Petitioners' request for action pursuant to 10 CFR 2.206 is 
denied.
    The reasons for this denial are explained in the ``Director's 
Decision Under 10 CFR 2.206'' (DD-97-06), a summary of which follows 
this notice. The complete text of DD-97-06 is available for public 
inspection at the Commission's Public Document Room, the Gelman 
Building, 2120 L Street, NW., Washington, DC, and at the local public 
document room at the Burke County Library, 412 Fourth Street, 
Waynesboro, Georgia.

    Dated at Rockville, Maryland, this 18th day of March 1997.

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

Summary of Director's Decision Under 10 CFR 2.206

I. Introduction

    This is a summary of the final Director's Decision on the petition 
of Messrs. Marvin B. Hobby and Allen L. Mosbaugh (Petitioners) dated 
September 11, 1990, as supplemented October 1, 1990, and July 8, 1991, 
pursuant to 10 CFR 2.206 (Petition). In CLI-93-15, 38 NRC 1 (1993), the 
Commission vacated and remanded a partial decision on the Petition, DD-
93-8, 37 NRC 314 (1993), dated April 23, 1993, and directed that the 
NRC staff consider the outcome of a pending licensing transfer 
proceeding on the Vogtle facility before acting on the Petition, due to 
the overlap in issues. After closure of the evidentiary record and 
before issuance of a decision, the Licensing Board terminated the 
Vogtle licensing transfer proceeding based upon a settlement agreement 
between Georgia Power Company (GPC or the licensee) and the sole 
intervenor, Mr. Mosbaugh. The final Director's Decision addresses the 
matters considered in the partial Director's Decision and the balance 
of the Petition in light of the information disclosed in the licensing 
transfer amendment proceeding, in NRC inspections, investigations, and 
enforcement actions, and decisions by the Department of Labor.
    Although Mr. Mosbaugh has withdrawn his interest in the 10 CFR 
2.206 Petition, Mr. Hobby's request is still pending before the NRC. 
Inasmuch as the Petition was jointly filed by Messrs. Mosbaugh and 
Hobby and it is difficult to segregate their concerns, the final 
Director's Decision addresses all matters raised in the Petition, as 
supplemented by the hearing record.

II. Discussion

    The Petitioners made a number of allegations about the management 
of the GPC nuclear facilities (Hatch and Vogtle). Specifically, they 
alleged that:
    1. GPC illegally transferred its operating licenses to Southern 
Nuclear;
    2. GPC knowingly included misrepresentations in its response to 
concerns of a Commissioner about the chain of command for the Vogtle 
facility;
    3. GPC made intentional false statements to the NRC about the 
reliability of a diesel generator (DG) whose failure had resulted in a 
Site Area Emergency (SAE) at Vogtle;
    4. A GPC executive submitted perjured testimony during a DOL 
proceeding under Section 210 of the Energy Reorganization Act;
    5. GPC repeatedly abused Technical Specification (TS) 3.0.3 at the 
Vogtle facility;
    6. GPC repeatedly and willfully violated Technical Specifications 
(TSs) at the Vogtle facility;
    7. GPC repeatedly concealed safeguards problems from the NRC;
    8. GPC operated radioactive waste systems and facilities at Vogtle 
in gross violation of NRC requirements;
    9. GPC routinely used nonconservative and questionable management 
practices at its nuclear facilities; and,
    10. GPC retaliated against managers who made their regulatory 
concerns known to GPC or Southern Nuclear management.
    Mr. Mosbaugh had previously informed NRC's Office of Investigations 
(OI) of some of these allegations. The Petitioners requested the NRC to 
institute proceedings and take swift and immediate action based on 
these allegations. On October 23, 1990, Dr. Thomas E. Murley, who was 
then the Director, NRR, acknowledged receiving the Petition and 
concluded that no immediate action was necessary regarding these 
matters. He made this determination based on completed and continuing 
NRC inspections and investigations of the licensee and particularly of 
the operation of the Vogtle facility.
    On July 8, 1991, the Petitioners submitted ``Amendments to 
Petitioners Marvin Hobby's and Allen Mosbaugh's September 11, 1990, 
Petition; and Response to Georgia Power Company's April 1, 1991, 
Submission by its Executive Vice President, Mr. R. P. McDonald'' 
(Supplement). In the Supplement the Petitioners alleged that:
    1. GPC's Executive Vice President made material false statements in 
GPC's April 1, 1991, submittal to the NRC regarding the participants in 
an April 19, 1990, telephone conference call; and,
    2. This same Executive Vice President made false statements to the 
NRC at a transcribed meeting on January 11, 1991, which discussed the 
formation and operation of Southern Nuclear.
    The Petitioners requested that the NRC take immediate steps to 
determine if GPC's current management has the requisite character and 
competence to operate a nuclear facility. On August 26, 1991, Dr. 
Murley acknowledged receiving the Supplement and informed the 
Petitioners that no immediate action was required and that the specific 
issues raised in the Supplement would be addressed in a Director's 
Decision (DD).
    On October 22, 1992, in response to a Federal Register notice of 
the proposed issuance of these license amendments (57 FR 47135, October 
14, 1992), Messrs. Mosbaugh and Hobby filed a petition for leave to 
intervene and request for hearing. Mr. Hobby was denied intervenor 
status for lack of standing. In LBP-93-5, 37 NRC 96 (February 18, 
1993), Mr. Mosbaugh was admitted as an intervenor along with a single 
contention:

    The license to operate the Vogtle Electric Generating Plant, 
Units 1 and 2, should not be transferred to Southern Nuclear 
Operating Company, Inc., because it lacks the requisite character, 
competence and integrity, as well as the necessary candor, 
truthfulness and willingness to abide by regulatory requirements.

    The bases for the admitted contention alleged that (1) the license 
transfers had already taken place because Southern Nuclear had assumed 
control of the

[[Page 13910]]

operation of the Vogtle facility without prior approval from the NRC, 
and (2) officials of the SONOPCO Project (the predecessor organization 
to Southern Nuclear) conspired to submit false information to the NRC 
concerning safety-related information regarding DG testing following 
the March 1990 SAE.
    On April 23, 1993, the Director, NRR, issued DD-93-8, NRC 314, in 
which he resolved several matters. In summary, the Director determined 
that:
    1. No unauthorized transfer of the Vogtle licenses had occurred;
    2. There is no information beyond the Petitioners' opinions to 
support the position that GPC's omission from a description of their 
chain of command at a Commission meeting on March 30, 1989, was 
intentional;
    3. GPC does not routinely threaten the safe operation of the Vogtle 
facility by allowing entry into TS 3.0.3;
    4. Although TS violations had occurred, Petitioners' claim that 
they were willful was not substantiated;
    5. Failures to make timely reports to the NRC of safeguards 
problems were due to GPC's cumbersome system for evaluating security 
findings, rather than being due to any willful attempt to impede the 
reporting process;
    6. The relevant facts do not support a conclusion that GPC wilfully 
violated NRC requirements or wilfully operated the radioactive waste 
system in a manner to endanger public health and safety; and,
    7. The GPC nuclear facilities were being operated in accordance 
with NRC regulations and do not endanger public health and safety.
    Decisions on the Petitioners' issues of intentional false 
statements to the NRC regarding DG reliability, perjured testimony by a 
GPC executive in a DOL proceeding, and discrimination against managers 
who raised regulatory concerns were deferred pending the completion of 
OI investigations and the issuance of a DOL decision.
    In CLI-93-15, 38 NRC 1 (July 14, 1993), the Commission vacated and 
remanded DD-93-8, and directed that the staff consider the outcome of 
the Vogtle license amendment proceeding before acting on the Petition 
due to the overlap in issues.
    Several extensive reviews of the above concerns have been conducted 
by the NRC. The NRC performed special inspections, OI performed 
investigations, an Atomic Safety and Licensing Board (ASLB) held 
hearings on the contention challenging Southern Nuclear's character, 
and the Department of Labor (DOL) held hearings concerning alleged 
discrimination against Messrs. Hobby and Mosbaugh by licensee 
management.
    Litigation concerning the contention in the license amendment 
proceeding was extensive and included over 35 prehearing depositions, 
over 12,500 pages of hearing transcripts, and nearly 600 documentary 
exhibits. After the hearings were completed and prior to issuance of an 
ASLB decision on the contention, Mr. Mosbaugh and licensee arrived at a 
settlement agreement that resulted in, among other things, Mr. Mosbaugh 
withdrawing his contention and filing a joint motion (with the 
licensee) requesting that the Board terminate the proceeding without 
issuance of a Board order setting forth its findings and conclusions. 
The Board granted the request and dismissed the contention (LBP-96-16, 
44 NRC 59 (August 19, 1996)).
    The dismissal of the contention did not address the potential 
safety implications of the 2.206 Petition as supplemented by the 
hearing record. The staff has considered the testimony of staff 
witnesses, including staff engineers, supervisors, and senior managers, 
the technical issues raised, and the staff's observations and 
assessments of licensee performance to resolve the issues raised by the 
Petition. The following is a summary of the conclusions in the 
Director's Decision.

A. Illegal License Transfers, and Misrepresentations of Management 
Control

1. Illegal License Transfers
    The Petition alleged that GPC improperly transferred control of its 
nuclear licenses to Southern Nuclear in that Mr. Joseph M. Farley (who 
was an officer of GPC's parent company, Southern Company, and its 
subsidiary, Southern Company Services) acted as Chief Executive Officer 
(CEO) of SONOPCO and was responsible for operating the GPC nuclear 
facilities and made or influenced budget and hiring decisions, 
beginning with the first of three phases in the planned transition to 
Southern Nuclear. The Petitioners state that the nuclear officers in 
SONOPCO Project reported to Mr. Farley, rather than to Mr. Dahlberg, 
GPC's CEO, and that Mr. Farley controlled the Vogtle facility based 
upon his involvement in (1) controlling daily operations, (2) 
establishing and implementing nuclear policy decisions, (3) employing, 
supervising, and dismissing nuclear personnel, and (4) controlling 
costs. Intervenor also asserts that numerous documents and statements 
provided to the NRC regarding the organizational structure and 
responsibilities for managerial control of the Vogtle facility were 
inaccurate or incomplete because they do not show Mr. McDonald 
reporting to Mr. Farley or Mr. Farley functioning as the de facto Chief 
Executive Officer of the SONOPCO Project.
    The staff's review concluded that Intervenor's assertion that Mr. 
Farley functioned as the de facto Chief Executive Officer of the 
SONOPCO Project is not supported by the record. Mr. McDonald did not 
report to Mr. Farley regarding GPC licensed activities. The items cited 
do not demonstrate that Mr. Farley exercised control over licensed 
activities at GPC's nuclear facilities during his involvement in the 
SONOPCO Project. Rather, the record shows that GPC controlled the daily 
operations of the Vogtle facility in accordance with a chain of command 
extending from the Vogtle General Manager, through the Vice President 
of the Vogtle facility, through the Senior Vice President--Nuclear 
Operations, through the Executive Vice President--Nuclear Operations, 
to the President and CEO of GPC. A Nuclear Operations Overview 
Committee of the GPC Board of Directors conducted periodic reviews of 
the regulatory and operational performance of GPC's nuclear plants. The 
hearing record shows that nuclear policy decisions for the Vogtle 
facility were established and implemented by GPC, and there was no 
evidence that Mr. Farley established the outage philosophy or any other 
operational policies for the Vogtle facility. Mr. Farley's limited 
involvement in a 1989 rate case matter before the Georgia Public 
Service Commission (i.e., his review of draft testimony regarding 
alternative performance standards) did not indicate any control of 
GPC's nuclear operations or licensed activities. Intervenor also 
provided no information that The Southern Company Management Council 
acted as the SONOPCO Project board of directors until the Project was 
incorporated.
    Regarding the assertions that Mr. Farley controlled the Vogtle 
facility through personnel decisions, the record does not show that Mr. 
Farley controlled GPC nuclear facilities by employing, supervising, and 
dismissing nuclear personnel, or that GPC provided inaccurate 
information to the NRC regarding Mr. Farley's involvement with 
personnel matters.
    The hearing record does not support a conclusion that GPC 
misrepresented its budgets affecting the operation of GPC licensed 
facilities. There is no basis to conclude that the particular process 
GPC used to develop its budget showed that Mr. Farley, The Southern 
Company,

[[Page 13911]]

or SONOPCO Project controlled the operation of the Vogtle facility. 
Rather, the record shows that GPC was responsible for the costs of the 
Vogtle facility. After review by GPC's Management Council, the 
operating and capital budgets were approved by GPC's President and CEO, 
and the capital budget was also approved by the GPC Board of Directors. 
The record does not support that Messrs. Farley and Edward L. Addison, 
the President and CEO of The Southern Company, approved GPC's nuclear 
budgets. As an Executive Vice President of The Southern Company, Mr. 
Farley was involved in reviewing the nuclear budgets as part of the 
normal process for preparing annual budgets in the Southern system. 
Given The Southern Company's holding company status, Mr. Addison's 
involvement in reviewing and providing guidelines and requirements for 
adequate earnings and reasonable capital needs was appropriate.
    The record shows that GPC provided some inaccurate or incomplete 
information to the NRC when describing its organization and plans to 
form Southern Nuclear, and when responding to the Petition. This 
information involved (1) the omission of Mr. Hairston when Mr. McDonald 
described the Vogtle chain of command during a March 30, 1989, meeting, 
(2) a 1989 FSAR organizational chart showing the position of Mr. 
Dahlberg as ``Chairman and CEO'' rather than ``President and CEO'', and 
(3) GPC's April 1991 written response to the Petition indicating that 
the GPC Management Council included all Senior Vice Presidents (which 
was inaccurate because Mr. Hairston was not a member), and indicating 
Mr. Farley's title in 1988 to be Executive Vice President--Nuclear of 
The Southern Company (a position he did not assume until March 1, 
1989). This inaccurate or incomplete information was of minor safety 
significance in terms of NRC understanding of the proposed transfers, 
did not mislead the NRC, and was not sufficient to warrant NRC 
enforcement action nor conclusions that (1) GPC concealed an 
unauthorized role of Mr. Farley or a de facto, unauthorized 
organization for control of GPC nuclear facilities, or (2) GPC lacks 
the requisite character and integrity to be a licensee.
    The staff has reviewed the Vogtle Final Safety Analysis Report 
(FSAR), the Vogtle licenses, records of an NRC Special Inspection 
conducted to review the SONOPCO management organization, and testimony 
of key officials taken under oath in the license amendment proceeding, 
as well as the evidence proffered by the Intervenor in the license 
amendment proceeding. This information established that the 
responsibility for decisions affecting the operation of the GPC plants 
rested with GPC's Senior Vice President--Nuclear Operations, who at the 
time was Mr. Hairston. The Petitioners' concerns do not warrant the 
conclusion that SONOPCO was in control. Rather, the staff finds that 
during the period of time in question, the chain of command was from 
the respective vice presidents for the Vogtle and Hatch facilities to 
Mr. Hairston. Mr. Hairston reported to Mr. McDonald, who reported to 
Mr. Dahlberg, President of GPC. Each of these individuals was an 
elected officer of GPC, and the reporting chain at that time progressed 
up to the President of GPC.
    Therefore, the staff concludes that GPC did not transfer control of 
the operating licenses for the Vogtle facility without the prior 
consent of the NRC and that GPC did not mislead the NRC in any material 
respect regarding control of the operation of the Vogtle facility.
2. Chain of Command Misrepresentations at a Commission Meeting
    The Petitioners stated that during a Commission meeting to vote on 
the full power operating license for Vogtle Unit 2 on March 30, 1989, 
GPC misled the Commission about the chain of command from the Vogtle 
Plant Manager to the CEO during their response to a question from one 
of the Commissioners.
    Shortly after reading the transcript of the meeting, Mr. W.G. 
Hairston, on May 1, 1989, sent the NRC a letter that corrected the 
meeting transcript, and noted that GPC had inadvertently omitted him in 
the management chain in their reply to the Commissioner. The letter 
further stated that the organization was as described on figures 
13.1.1-1 and 13.1.1-2 of the FSAR. The NRC previously had been apprised 
of the GPC organization, including Mr. Hairston's position, by an FSAR 
amendment dated November 23, 1988, and NRC staff members present at the 
Commission meeting were aware of the correct information. The staff has 
no basis to conclude that GPC's omission of the Senior VP position in 
their oral remarks was intentional. The staff concluded, after 
consultation with the Commission, that GPC's omission was not 
significant because the information would not likely have caused the 
Commission to reach a different decision regarding the Unit 2 license 
application. In addition, the staff had previously been provided and 
was aware of the correct information. Thus, enforcement action was not 
appropriate.
3. Misrepresentations Concerning the SONOPCO Project
    The Petition asserted that GPC (Mr. McDonald) falsely stated during 
a transcribed meeting with the staff on January 11, 1991, that Mr. 
Farley had no responsibilities for administrative matters related to 
the SONOPCO Project. Mr. Farley claims he had been involved in SONOPCO 
administrative matters since the SONOPCO Project was formed in November 
1988.
    Based on the meeting transcript and his testimony during the ASLB 
hearing, Mr. McDonald's January 11, 1991, statement was not inaccurate 
in terms of the functions depicted on the charts discussed during the 
meeting. Mr. McDonald testified during the hearing that his statement 
was that prior to the incorporation of Southern Nuclear, Mr. Farley had 
been performing as a Vice President of The Southern Company, had been 
providing certain services to him under a contract with SCS, and had no 
responsibility for certain other administrative support that was 
depicted on organization charts discussed during the meeting. 
Administrative support was being performed by the Southern Company 
Services Vice President for Administrative Services (Mr. McCrary) for 
Mr. McDonald pursuant to the April 24, 1989, agreement. While Mr. 
McCrary provided administrative services to support Mr. Farley's role 
in guiding the formation of Southern Nuclear and Mr. Farley's general 
industry activities, Mr. McCrary did not report to Mr. Farley with 
respect to the administrative support function for the Vogtle facility.

B. Reporting of DG Reliability

    The Petitioners alleged that GPC made intentional false statements 
to the NRC about the reliability of a DG whose failure had resulted in 
an SAE at Vogtle. OI conducted an investigation and issued a report on 
December 17, 1993. Based on its evaluation of the evidence gathered by 
OI, and other information, the NRC staff determined that, contrary to 
the requirements of 10 CFR 50.9, the licensee had failed on four 
occasions to provide information concerning DG start counts (and the 
reasons for errors in those counts) to the NRC that was complete and 
accurate in all material respects. An examination of how the 
performance failures of licensee staff, supervisors and managers 
contributed to these errors resulted in the violations being judged by 
the NRC to collectively represent a very significant regulatory 
concern. Enforcement action was taken by the issuance of a Modified 
Notice of Violation and Imposition of Civil

[[Page 13912]]

Penalties (Notice) (EA 93-304, February 13, 1995) which characterized 
the violations as a Severity Level II problem. The licensee paid a 
$200,000 civil penalty on March 1, 1995. Corrective actions taken by 
licensee management have included:
    1. Making the initial notice of violation available to all 
employees and committing to posting an NRC Order if one is issued;
    2. A letter from the Senior Vice President to the Vice Presidents 
for Hatch and Vogtle regarding the importance of thorough record 
keeping during off-normal hours;
    3. Counseling of specific individuals by the Senior Vice President, 
and the issuance of an ``Oral Reminder'' pursuant to the licensee's 
Positive Discipline System;
    4. A letter from the Executive Vice President--Nuclear Operations 
to nuclear operations employees that stressed the importance of 
effective communications and the effective resolution of concerns;
    5. Posting copies of 10 CFR 50.9 and encouraging employees to read 
it;
    6. Meetings held by the Senior Vice President--Nuclear Operations 
with employees at the Hatch and Vogtle sites to discuss GPC's policy of 
open, complete and accurate communications with the NRC, and a letter 
to all employees on the same subject;
    7. Management observation of communications with the NRC to ensure 
that the enforcement action does not adversely affect the completeness 
of statements; and,
    8. Posting a notice to all employees of the availability of GPC's 
reply to the initial notice of violation.
    The staff reviewed the licensee's corrective actions and concluded 
that the actions were sufficient.
    The staff's evaluation also resulted in Demands for Information 
(DFIs) being issued to the licensee and six individuals who 
acknowledged their roles and responsibilities in the activities that 
were the bases for the enforcement action. The performance of the 
Vogtle General Manager (GM) through August 1990 contributed directly to 
each of the failures to meet 10 CFR 50.9. GPC and that individual 
acknowledged his role and responsibility in the events underlying the 
enforcement action and informed the staff in separate letters dated 
February 1, 1995, that the individual had requested, and his current 
employer (Southern Nuclear) had agreed to implement a personal training 
program to strengthen his ability to perform any future line management 
role in support of licensed activities. Southern Nuclear and GPC 
committed that the former GM would not assume a line management 
position for a GPC or Southern Nuclear plant unless he had 
satisfactorily completed training in management communications and 
responsibilities, and the NRC received 60 days prior written notice of 
the assignment. As documented in the February 13, 1995, Modified Notice 
of Violation and Imposition of Civil Penalties, the staff concluded 
that, in light of these commitments, the staff had no present concerns 
with the character and integrity of the individuals or the licensee 
arising out of these events, and no further enforcement action was 
necessary.

C. DOL Testimony

    The Petitioners asserted that (1) GPC's Executive Vice President 
knowingly submitted false testimony in a DOL proceeding involving the 
discrimination complaints of two GPC employees and (2) that Mr. Hobby 
advised GPC's counsel before the DOL hearing that the proposed 
testimony was false and that GPC's counsel responded by advising him 
that the testimony would have to be changed.
    The DOL case resulted in a Decision and Remand Order (Decision) by 
the Secretary of Labor (Secretary) on August 4, 1995. The Secretary 
found that GPC had discriminated against Mr. Hobby for engaging in 
protected activities, and stated, in relevant part: ``Because I found 
other evidence sufficient to establish that Complainant [Mr. Hobby] 
engaged in protected activity on January 2, [1989 (the pre-hearing 
meeting),] it was unnecessary to consider at that juncture whether 
counsel attempted to suborn Complainant to perjury. Even if counsel 
did, that evidence would not alter this decision.''
    As discussed more fully below, based on the Secretary's Decision, 
and a similar Decision in a proceeding regarding an alleged unlawful 
termination of Mr. Mosbaugh's employment, the staff issued two Severity 
Level I Notices of Violation to GPC. The staff also issued individual 
letters to certain senior corporate managers admonishing them to ensure 
that a proper environment is maintained in which employees can express 
regulatory concerns without fear of retaliation, harassment, 
intimidation, or discrimination.

D. Use of TS 3.0.3

    The Petitioners asserted that GPC engaged in unsafe practices in 
that (1) GPC repeatedly allowed the Vogtle facility to enter TS 3.0.3 
by rendering both trains of safety-related load sequencers for the DGs 
inoperable, (2) GPC did not make the required notifications to the NRC 
when TS 3.0.3 was entered, and (3) GPC failed to recognize that the 
loss of a load sequencer resulted in entry into TS 3.0.3.
    The staff reviewed entries into TS 3.0.3 through inspections 
conducted by region-based inspectors and the observations of the 
resident inspectors. The staff also reviewed the completed maintenance 
work orders performed on the load sequencers and the related 
surveillance tests. The staff found several instances in which the work 
performed would have required the load sequencers to be de-energized. 
However, the associated unit was found not to have been in Modes 1, 2, 
3, or 4 at the time this work was performed and thus, no TS LCO 
applied. The surveillance test review did not reveal any examples of 
the load sequencers having been de-energized while in Modes 1 through 4 
at the time the test was performed and thus, no TS LCOs applied. Based 
on its review, the staff concluded that GPC did not routinely allow the 
Vogtle facility to enter TS 3.0.3 by rendering both trains of safety-
related load sequencers for the DGs inoperable.
    In accordance with 10 CFR 50.72, Immediate Notification 
Requirements for Operating Nuclear Power Reactors, licensees are 
required to make immediate (i.e., within 1 or 4 hours, depending on the 
circumstances) reports to the NRC of any declaration of an emergency 
class specified in the Emergency Plan, and certain non-emergency 
events. Non-emergency events include such items as the initiation of 
any nuclear plant shutdown required by the TS, any deviation from the 
TS authorized by 10 CFR 50.54(x), any condition where the nuclear power 
plant (including its principle safety barriers) becomes seriously 
degraded, and any natural phenomenon or other external condition that 
poses an actual threat to the safety of the nuclear plant or 
significantly hampers site personnel in the performance of duties 
necessary for the safe operation of the plant. In 10 CFR 50.73, 
Licensee Event Report System, events are identified for which written 
reports will be made to the NRC within 30 days. These events include 
several of the events requiring immediate reports pursuant to 10 CFR 
50.72, plus additional events such as any event or condition that alone 
could have prevented the fulfillment of the safety function of certain 
structures or systems. The Commission's regulations do not contain an 
explicit requirement that an entry into TS 3.0.3, in and of itself, be 
reported. Licensees are

[[Page 13913]]

required by 10 CFR 50.72 to notify the NRC within 1 hour of the 
initiation of any plant shutdown required by the plant's TS. Thus, the 
NRC is promptly notified of entries into TS 3.0.3 if the plant 
initiates a shutdown as a result of the problem that caused entry into 
the TS. There is no requirement to notify the NRC of entries into TS 
3.0.3 if a shutdown is not initiated. The staff has no basis to 
conclude that the licensee's activities constituted unsafe practices or 
that these activities indicated that the character of the licensee, 
including those GPC individuals who will be employed by Southern 
Nuclear after the licenses are transferred, was unsuitable for 
operating a nuclear power plant.

E. Willful TS Violations

    The Petitioners stated that GPC willfully and knowingly violated 
Vogtle Unit 1 TSs during the October 1988 refueling outage by opening 
boron dilution valves required to be locked closed by TSs. The 
Petitioners claimed that (1) the valves were opened while the coolant 
level in the reactor vessel was lowered to the mid-loop level, and that 
this placed the plant in an unanalyzed condition creating the risk of 
an uncontrolled boron dilution accident and an inadvertent criticality, 
(2) the valves were opened to expedite the outage so the plant could be 
placed back on line according to the schedule, and (3) the violation of 
TSs to stay on schedule was due, in part, to a senior management 
philosophy that outages must be scheduled assuming that everything goes 
right and that contingency or extra time is not to be included in the 
schedule.
    After reviewing OI Report 2-90-001 and responses to four DFIs, and 
after an enforcement conference, the staff sent letters to the 
Operations Manager, the Operations Superintendent, and the Shift 
Supervisor stating that no actions would be taken regarding their 
individual NRC licenses. The staff also stated that, although their 
actions did not meet NRC expectations, the evidence was insufficient to 
support a conclusion that their actions constituted an attempt to 
intentionally circumvent the TSs. On December 31, 1991, after 
consultation with the Commission, the staff issued a Severity Level III 
Notice of Violation and Proposed Imposition of Civil Penalty (EA 91-
141). GPC paid a $100,000 civil penalty on July 9, 1992.
    With respect to the placement of the plant in a condition that 
could have resulted in an uncontrolled dilution event and inadvertent 
reactor criticality, the staff reviewed an analysis of this event that 
Westinghouse later performed for GPC. The staff concluded that, 
although the TSs in effect at the time were violated, the actual 
opening of the valves was of insufficient duration to create a 
criticality event and did not endanger public health and safety.
    With respect to the Petitioners' claim that the valves were opened 
to expedite the outage, the staff, based on its review, did not find 
sufficient basis to conclude that this evolution had been performed to 
meet the outage schedule. The NRC did not require chemical cleaning 
before the utility restarted the reactor, and cleaning expended time 
during the outage.
    On February 26, 1990, the staff found that the dilution valves 
identified above were required to be locked closed, but were not locked 
while at mid-loop as required by the TSs. The Petitioners assert that 
this is another example of a willful violation of TSs by Vogtle senior 
management. Instead of installing a mechanism to mechanically secure 
this valve, the licensee had placed a hold tag on the valve, which 
provided only administrative control to preclude valve operation. GPC 
subsequently agreed that this method was unacceptable and took action 
to install a mechanical locking device. On April 26, 1990, the staff 
issued Notice of Violation, 50-424,425/90-05-01, ``Failure to 
Mechanically Secure Valve 1-1208-U4-176 During Mode 5 As Required By TS 
3.4.1.4.2.C'' (Severity Level IV). The staff concluded that, although a 
violation occurred, the error in TS interpretation was not an example 
of a willful violation of TSs by Vogtle senior management. Thus, there 
is no basis to conclude that GPC willfully and knowingly violated the 
TSs.

F. Safeguards Problems

    The Petitioners alleged that (1) GPC personnel, including a Vice 
President and General Manager, and a Southern Company Services Manager, 
knowingly and repeatedly hid safeguards problems from the NRC and 
willfully refused to comply with reporting requirements, (2) the GPC 
Vice President made false statements to the NRC during an Enforcement 
Conference about the status of safeguards materials, and that the false 
statements probably influenced a subsequent civil penalty action taken 
by the NRC, (3) on July 23, 1990, plant and SONOPCO senior management 
prevented the Site Security Manager from making a notification within 1 
hour as required by 10 CFR 73.71, and (4) the manager was prevented 
from making the call in order to delay or defuse the NRC's knowledge of 
programmatic problems on the part of the licensee regarding the 
handling of safeguards documents.
    OI investigated the allegation that GPC knowingly and repeatedly 
hid safeguards problems from the NRC and willfully refused to comply 
with mandatory reporting requirements. OI also investigated the 
allegation that the GPC Vice President made false statements to the NRC 
in an Enforcement Conference concerning the status of safeguards 
material. The investigations did not substantiate that GPC withheld 
pertinent information from the NRC at the time of the Enforcement 
Conference or that GPC management impeded the reporting of safeguards 
events. On the basis of the OI investigations, the staff concluded that 
the Severity Level II violation and $50,000 civil penalty issued by the 
staff on June 27, 1990, for failing to properly secure safeguards 
information was appropriate for the volume and content of the 
safeguards information involved. GPC paid the civil penalty on July 27, 
1990.
    OI also investigated the allegation that plant and SONOPCO senior 
management prevented the Site Security Manager from making 
notifications within 1 hour as required by 10 CFR 73.71 in two 
instances. After reviewing OI's investigation results, the staff 
concluded that both of the failures to make timely reports were due to 
the GPC's cumbersome system for evaluating corporate security findings 
through the site security organization, rather than due to any willful 
attempt to impede the reporting process.

G. Operation of Radioactive Waste Systems

    The Petitioners asserted that GPC endangered public health and 
safety by operating a temporary radioactive waste system known to be in 
gross violation of NRC requirements. The Petitioners also state that 
Vogtle's General Manager (GM) had intimidated the members of the Plant 
Review Board (PRB) when they attempted to consider if the use of the 
waste system should be resumed.
    An NRC Special Inspection Team reviewed these items and discussed 
its findings in Supplement 1 to Inspection Report 50-424,425/90-19, 
dated November 1, 1991. The licensee's operation of the radwaste 
systems was found to be acceptable. The inspection team concluded that 
although the system was originally installed without an adequate safety 
evaluation and did not meet regulatory guidance, the subsequent safety 
evaluations were acceptable for the system's use. One issue was 
identified in the inspection report as warranting further review by the 
licensee under the provisions of 10 CFR 50.59.

[[Page 13914]]

    Regarding the assertion that the GM had intimidated PRB members, 
the inspection team found one case where a voting PRB member felt 
intimidated and feared retribution because the GM was present at the 
meeting. The staff concluded that the allegation was substantiated. 
However, the PRB member stated that he did not change his vote in 
response to GM pressure, and the GM subsequently met with the PRB 
members to allay their fears. Since the level of intimidation perceived 
by the PRB member was insufficient to have any affect on the PRB 
member's safety decision, and the GM subsequently addressed the 
intimidation concern with the PRB, further regulatory action based on 
this event was not warranted.

H. GPC Statement On Management Participation in a Telephone Call

    The Intervenor contended that GPC, in their April 1, 1991, response 
to the Petition, intentionally tried to conceal the participation of 
the Senior VP--Nuclear Operations in an April 19, 1990, conference call 
regarding a Licensee Event Report (LER).
    The Senior VP participated in one of at least two conference calls 
known to have taken place on April 19, 1990, before the LER was issued 
that same day. However, there is no evidence that the GPC corporate 
official who signed the April 1, 1991, Petition response (the GPC 
Executive Vice President) was aware of the fact that the Senior VP had 
participated in one of the April 19 conference calls. The staff review 
of a transcript of Mr. Mosbaugh's surreptitiously recorded audio tape 
of the calls, that was admitted as evidence in the licensing 
proceeding, shows that the Senior VP joined one call after decisions 
were made on how to convey the DG start count information in the LER, 
and the Senior VP did not participate in a second conference call that 
finalized the LER language. The staff has determined that there is 
insufficient basis to conclude that GPC, in their April 1, 1991, 
response to the Petition, intentionally tried to conceal the 
participation of the Senior VP--Nuclear Operations in an April 19, 
1990, conference call regarding the preparation of the LER.

I. Management Retaliation

    The Petition alleged that GPC retaliated against managers who made 
their regulatory concerns known to GPC or SONOPCO management.
    As noted previously, in 1990, Messrs. Hobby and Mosbaugh each filed 
a complaint with DOL alleging, in part, that their employment 
terminations constituted unlawful discrimination against them for 
engaging in protected activities (i.e., expressing safety concerns). 
The Secretary found that the terminations of employment resulted from 
unlawful discrimination by senior licensee management personnel. The 
NRC reviewed the Secretary's decisions and determined that violations 
of 10 CFR 50.7, (Employee Protection) had occurred. Two Severity Level 
I Notices of Violation were issued to the licensee as provided for by 
the NRC's Enforcement Policy. Although the NRC took no enforcement 
actions directly against the individuals involved, the NRC did issue 
letters to several senior management personnel to emphasize that 
harassment, intimidation and discrimination against licensee employees 
for engaging in protected activities is unacceptable.
    GPC corrective actions included emphasizing to employees that they 
are encouraged to raise safety concerns and that harassment, 
intimidation and discrimination against employees for raising those 
concerns is contrary to a strongly supported management policy 
prohibiting such retaliatory measures. Licensee corporate management 
communicated this message in writing, and at special meetings with site 
employees to focus on this concern.
    The staff concludes that the significant enforcement action by the 
NRC, in addition to ASLB hearing activities and the DOL Orders, is 
likely to sensitize licensee management to the seriousness of problems 
of this nature and ensure a proper environment in which employees can 
express regulatory concerns without fear of retaliation, harassment, 
intimidation, or discrimination.

J. Management Practices

    The Petitioners stated that GPC routinely used nonconservative and 
questionable management practices at its nuclear facilities. Examples 
provided by the Petitioner include the improper use of TS 3.0.3 (see D. 
above), willful TS violations (see E. above), safeguards problems (see 
F. above), and operation of a radioactive waste system known to be in 
violation of NRC requirements (see G. above). To address the 
Petitioners' general characterization of licensee management practices 
as being nonconservative and questionable, NRC witnesses, including 
staff engineers, supervisors, and senior managers provided testimony 
during the ASLB proceeding on several technical issues in addition to 
observations and assessments of GPC's performance from several 
perspectives.
    The staff concluded that GPC's performance problems were not 
sufficient to establish that Southern Nuclear (and the GPC employees 
who will work for that company if the transfers were granted) lack the 
requisite character to be a licensee. The staff cited GPC's overall 
performance in keeping the NRC informed of DG post-repair and trouble 
shooting activities, GPC's technical competence in addressing those 
matters and the efforts of the GPC Senior Vice President--Nuclear 
Operations to keep the NRC informed of errors as GPC became aware of 
them.
    In a letter, dated December 23, 1996, Southern Nuclear and GPC 
iterated their 1995 commitment that the former GM would not assume a 
line management position for a GPC or Southern Nuclear plant unless he 
had satisfactorily completed training in management communications and 
responsibilities, and the NRC received 60 days prior written notice of 
the assignment. The staff has relied on this commitment in evaluating 
the proposed transfers. A condition has been included in the Order 
authorizing these license transfers that the staff will receive 60 days 
prior written notice of the licensee's intent to assign the individual 
to a line management position at Vogtle.
    The staff has concluded that, although significant violations were 
identified against GPC in the past, corrective actions have been 
implemented. There has been no showing that Southern Nuclear or GPC 
(including the GPC employees who will work for Southern Nuclear if the 
transfers were granted) lacks the requisite character to be a licensee. 
In light of the various regulatory actions that have already been taken 
by the NRC on issues raised in the Petition, including the Order 
provision regarding the former Vogtle General Manager, and corrective 
actions taken by the licensee, no further action is necessary.

III. Conclusion

    As summarized above, NRC has conducted several inspections, 
investigations, and technical reviews regarding the concerns in the 
Petition, and proceedings before NRC and DOL have been conducted 
regarding most of the concerns. Some of the concerns raised by the 
Petitioners were substantiated. Violations of regulatory requirements 
have occurred. Notices of Violation and civil penalties have been 
issued to the licensee, letters have been issued to several 
individuals, and certain conditions regarding one individual are being 
imposed by NRC in conjunction with the license transfers. To this 
extent, the Petitioners' request

[[Page 13915]]

for action pursuant to 10 CFR 2.206 has been granted.
    On the basis of the NRC staff's review and the record of the Vogtle 
license transfer amendment proceeding, I conclude that no unauthorized 
transfer of the Vogtle or Hatch operating licenses occurred, and that 
the GPC nuclear facilities are being operated in accordance with NRC 
regulations and do not endanger the health and safety of the public. On 
balance, the evidence does not support the conclusion that GPC, SONOPCO 
Project, or Southern Nuclear deliberately provided false or misleading 
information to the NRC or that Southern Nuclear or GPC (including the 
GPC employees that would be employed by Southern Nuclear if the 
proposed license transfer is authorized) lack the requisite character 
and integrity to be an NRC licensee as required by section 182 of the 
Atomic Energy Act, 42 U.S.C 2232, and 10 CFR 50.80. Thus, there is no 
basis upon which to grant Petitioners' request that the operation of 
the facility be modified, suspended or revoked.
    With respect to Petitioners' request that the NRC institute 
proceedings and impose civil penalties based on the matters addressed 
in the Petition, the issues in the Petition that give rise to 
substantial health and safety issues have, in fact, been the subject of 
a lengthy proceeding and escalated enforcement actions by the NRC. 
Also, based upon the findings of the DOL, the NRC has addressed both 
Petitioners' specific concerns that they were discriminated against for 
engaging in protected activities (and the associated allegation that 
GPC retaliates against managers who make their regulatory concerns 
known) by taking escalated enforcement actions against GPC. Based on 
actions already taken by the NRC staff and the licensee, there is 
reasonable assurance that the GPC facilities operate with adequate 
protection of the public health and safety. Therefore, I decline to 
take any further action with respect to matters raised in the Petition. 
To this extent, the Petitioners' request for action pursuant to 10 CFR 
2.206 is denied.
    A complete copy of the Director's Decision will be filed with the 
Secretary of the Commission for the Commission's review in accordance 
with 10 CFR 2.206(c) of the Commission's regulations. As provided by 
this regulation, the Director's Decision will constitute the final 
action of the Commission 25 days after the date of issuance unless the 
Commission, on its own motion, institutes a review of the Director's 
Decision in that time.

    Dated at Rockville, Maryland, this 18th day of March 1997.
[FR Doc. 97-7317 Filed 3-21-97; 8:45 am]
BILLING CODE 7590-01-P