[Federal Register Volume 63, Number 109 (Monday, June 8, 1998)]
[Notices]
[Pages 31234-31237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15139]


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NUCLEAR REGULATORY COMMISSION

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


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

    Notice is hereby given that the Director, Office of Nuclear Reactor 
Regulation, has issued a Director's Decision with regard to a Petition 
dated February 2, 1998, filed by Ms. Deborah Katz, Ms. Rosemary 
Bassilakis, and Mr. Paul Gunter on behalf of the Citizens Awareness 
Network (CAN) and the Nuclear Information and Resource Service (NIRS) 
(Petitioners). The Petition pertains to the Millstone Nuclear Power 
Station, Units 1, 2, and 3.
    The Petitioners requested that the NRC immediately: (1) revoke 
Northeast Utilities' (NU's, the licensee's) license to operate 
Millstone Units 1, 2, and 3 as the result of ongoing intimidation and 
harassment of its workforce by NU management; (2) revoke NU's license 
to operate Millstone Units 1, 2, and 3 as the result of persistent 
licensee defiance of NRC regulations and directives to create a 
``questioning attitude'' for its workers to challenge management on 
nuclear safety issues without fear of harassment, intimidation, or 
reprisals by NU; and (3) refer the Nuclear Oversight Department's Focus 
98 List and the reported NU management attempt to destroy the list to 
the Department of Justice for investigation of a potential coverup.
    As the bases for these assertions, the Petition states that an NU 
document (Nuclear Oversight Department's Focus 98 List, dated January 
11, 1998) directs the group to address areas needing improvement by 
focusing on the ``inability to ``isolate'' cynics from the group 
culture'' and ``pockets of negativism.'' The Petition further states 
that the list demonstrates the sustained and unrelenting policy of NU's 
senior management to undermine a safety-conscious workplace at 
Millstone, and that despite 2 years of increased regulatory scrutiny of 
the managerial mistreatment of its workers and the corporation's 
mismanagement of its employees' safety concerns program, a ``chilled 
atmosphere'' remains intact and entrenched.
    As a basis for the Petitioners' request for a Department of Justice 
investigation, the Petition makes the following statement: ``Since it 
has been reported that NU management employees attempted to destroy the 
list, NRC has a duty to refer this apparent deliberate attempt to evade 
the otherwise lawful exercise of authority by NRC to the Department of 
Justice for complete investigation. This alleged attempt to cover up 
wrong doing by NRC's licensee is a potential obstruction of justice 
that should be fully and fairly investigated.''
    The Director of the Office of Nuclear Reactor Regulation has denied 
the Petition. The reasons for this denial are explained in the 
``Director's Decision Pursuant to 10 CFR 2.206'' (DD-98-04), the 
complete text of which follows this notice and is available for public 
inspection at the Commission's Public Document Room, the Gelman 
Building, 2120 L Street, NW., Washington, DC, and at the local public 
document rooms located at the Learning Resources Center, Three Rivers 
Community-Technical College, New London Turnpike, Norwich, Connecticut, 
and at the Waterford Library, 49 Rope Ferry Road, Waterford, 
Connecticut.
    A copy of the Director's Decision will be filed with the Secretary 
of the Commission for the Commission's review in accordance with 10 CFR 
2.206(c) of the Commission's regulations. As provided for by this 
regulation, the Decision will constitute the final action of the 
Commission 25 days after the date of issuance unless the Commission, on 
its own motion, institutes a review of the Decision in that time.

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

    For the Nuclear Regulatory Commission.
Samuel J. Collins,
Director, Office of Nuclear Reactor Regulation.

Director's Decision Pursuant to 10 CFR 2.206

[DD-98-04]

I. Introduction

    On February 2, 1998, Ms. Deborah Katz, Ms. Rosemary Bassilakis, and 
Mr. Paul Gunter filed a Petition, pursuant to Section 2.206 of Title 10 
of the Code of Federal Regulations (10 CFR 2.206), on behalf of the 
Citizens Awareness Network (CAN) and the Nuclear Information and 
Resource Service (NIRS) (Petitioners).
    The Petitioners requested that the NRC take the following immediate 
actions: (1) revoke Northeast Utilities' (NU's or the licensee's) 
license to operate Millstone Units 1, 2, and 3 as the result of ongoing 
intimidation and harassment of its workforce by NU management; (2) 
revoke NU's license to operate Millstone Units 1, 2, and 3 as the 
result of persistent licensee defiance of NRC regulations and 
directives to create a ``questioning attitude'' for its workers to 
challenge management on nuclear safety issues without fear of 
harassment, intimidation, or reprisals by NU; and (3) refer the Nuclear 
Oversight Focus 98 List and the reported NU management attempt to 
destroy the list to the Department of Justice for investigation of a 
potential coverup.
    As bases for the Petitioners' assertions, the Petition states that 
an NU document (Nuclear Oversight Department's Focus 98 List, dated 
January 11, 1998) directs the Nuclear Oversight group to address areas 
needing improvement by focusing on the ``inability to `isolate' cynics 
from the group culture'' and ``pockets of negativism.'' The Petition 
further states that the list demonstrates the sustained and unrelenting 
policy of NU's senior management to undermine a safety-conscious 
workplace at Millstone, and that despite 2 years of increased 
regulatory scrutiny of the managerial mistreatment of its workers and 
the corporation's mismanagement of its

[[Page 31235]]

employees' safety concerns program, a ``chilled atmosphere'' remains 
intact and entrenched.
    As a basis for the Petitioners' request for a Department of Justice 
investigation, the Petition states that ``[s]ince it has been reported 
that NU management employees attempted to destroy the list, NRC has a 
duty to refer this apparent deliberate attempt to evade the otherwise 
lawful exercise of authority by NRC to the Department of Justice for 
complete investigation. This alleged attempt to cover up wrong doing by 
NRC's licensee is a potential obstruction of justice that should be 
fully and fairly investigated.''
    On March 11, 1998, the NRC acknowledged receipt of the Petition and 
informed the Petitioners that the Petition had been assigned to the 
Office of Nuclear Reactor Regulation to prepare a response and that 
action would be taken within a reasonable time regarding the specific 
concerns raised in the Petition. The Petitioners were also informed 
that their request for immediate action to revoke the operating license 
and refer the incident to the Department of Justice was denied because, 
due to the three Millstone units being shut down, protection of public 
health and safety did not warrant immediate action. The Petitioners 
were also informed that the NRC would consider the licensee's response 
to the staff's February 10, 1998, request for information concerning 
the incident before the Commission allows restart of any Millstone 
unit. To this extent, the Petitioners' request for immediate action was 
partially granted.

II. Discussion

    The NRC staff has completed its evaluation of the Petitioners' 
requests. The following discussion is based on information provided by 
the licensee and information independently obtained by the NRC staff. 
The Petitioners' first two requests are similar in nature and are 
addressed in Section II.A. The third request is addressed in Section 
II.B.

A. Request To Revoke the Operating License for Millstone Units 1, 2, 
and 3

    The Petitioners based this request on their assertion of ongoing 
intimidation and harassment of the workforce by NU management and 
persistent licensee defiance of NRC regulations and directives to 
create a ``questioning attitude'' for its workers to challenge 
management on nuclear safety issues without fear of harassment, 
intimidation, or reprisals. As support for their assertions, the 
Petitioners referred to the wording in a document prepared by NU's 
Nuclear Oversight Department titled ``Focus 98: Director/VP View of 
Nuclear Oversight (1/11/98).'' The document listed seven ``Positive 
Qualities of Nuclear Oversight'' and seven ``Areas Needing 
Improvement.'' Within ``Areas Needing Improvement'' was a category 
entitled ``Current SCWE [safety-conscious work environment] and 
issues.'' One of the six areas listed in this category was ``inability 
to ``isolate'' cynics from group culture.''
    On January 29, 1998, the U.S. Nuclear Regulatory Commission (NRC) 
became aware of the Nuclear Oversight Department's Focus 98 document. 
The NRC was concerned that language contained in the document was not 
consistent with encouraging a questioning attitude necessary for 
fostering a safety-conscious work environment. As a result, the NRC 
required the licensee, in a February 10, 1998, letter, to describe in 
writing, under oath or affirmation (1) the circumstances surrounding 
the creation and distribution of the document and whether the events 
constitute a violation of 10 CFR 50.7; (2) how this document came into 
existence, in light of NU's efforts to create a safety-conscious work 
environment, and NU's assessment of the document's effect on the 
willingness of employees to raise concerns with the Company; and (3) 
any remedial actions needed to prevent recurrence.
    NU responded to the NRC's request in March 12, March 26, and April 
24, 1998, letters. NU's March 12, 1998, response included reference to 
an NU-directed investigation into the circumstances surrounding the 
creation and distribution of the Focus 98 document. The March 12, 1998, 
response also contained a redacted copy of a survey conducted in 
February 1998 by consultants Nilsson and Associates to determine 
whether the events that the Petitioners complained about negatively 
impacted the Millstone workforce and had created any reluctance to 
raise safety issues at the Millstone facility. The investigation report 
was transmitted to the NRC by the March 26, 1998, letter. The April 24, 
1998, letter provided additional information regarding the collection 
of the Focus 98 document. In its submittals, NU described two Nuclear 
Oversight Department meetings relevant to the development of the Focus 
98 document, its use, and its distribution.
    The first meeting was held on January 11, 1998, and involved the 
Vice President--Nuclear Oversight, his three Directors, the Executive 
Assistant to the Vice President, and a consultant to the Vice 
President. The meeting was held to prepare for an upcoming Nuclear 
Oversight management team-building session and explore the strengths 
and weaknesses of the Nuclear Oversight organization for discussion at 
that meeting. Each of the six participants brought to the meeting 
approximately three strengths and three weaknesses that each considered 
applicable to Nuclear Oversight, and it was from these inputs that the 
Focus 98 document list of ``Positive Qualities of Nuclear Oversight'' 
and ``Areas Needing Improvement'' was developed. The inputs from the 
meeting participants were recorded and grouped, and the licensee's 
consultant used this information to prepare the one-page Focus 98 
document. Prior to the January 21, 1998, team-building session, the 
Focus 98 document had been distributed to the January 11, 1998, meeting 
participants for review and had generated no comments. NU concluded 
from its investigation, including interviews with each of the meeting 
participants, that the participants did not intend for the wording to 
convey the notion that Nuclear Oversight management should seek to 
isolate individuals who have raised concerns in the past, nor did 
management intend to send the signal that it views people who raise 
concerns as ``cynics'' or bad influences on the organization. NU 
concluded that the phrases in the document ``isolation of `cynics,'' ' 
``too much negative energy (personnel issues),'' and ``pockets of 
negativism'' were poorly chosen words that were intended to convey the 
belief that the Nuclear Oversight organization recognizes that there 
are people who have ill feelings toward NU and who are seeking to 
impose their views on others who may disagree, and that this imposition 
was affecting the organization. NU pointed out in its submittal that 
the document was intended to generate discussion and did not represent 
policy or direction of Nuclear Oversight management.
    The second meeting was held on January 21, 1998, and involved 
Nuclear Oversight management ranging from first-line supervisors to the 
Vice President--Nuclear Oversight. The purpose of the meeting was 
Nuclear Oversight team building and one topic on the agenda was a 
discussion of the organization's strengths and weaknesses. The Focus 98 
document was distributed when the organization's strengths and 
weaknesses were to be discussed. NU states that soon after the Focus 98 
document was distributed, several managers/supervisors objected to the 
included phrase ``inability to

[[Page 31236]]

`isolate' cynics from group culture.'' NU further states that the Vice 
President and Directors were initially surprised by the reaction, and 
ultimately agreed that the words had been poorly chosen and were not 
reflective of management's position.
    On the basis of its investigation, NU concluded that the 
circumstances of the creation of the Focus 98 document indicated that 
no one in management intended to encourage any form of discrimination 
against anyone engaging in protected activity. NU also responded that 
no action took place because of the document's existence and, thus, no 
person who had engaged in protected activity suffered any adverse 
employment action.
    The NRC staff reviewed NU's responses to the NRC's February 10, 
1998, letter, including the investigation report, and separately 
interviewed eight people involved in the preparation, use, and 
distribution of the Focus 98 document. The staff determined that the 
Focus 98 document had been developed as material for establishing 
talking points for a then-upcoming January 21, 1998, management team-
building session. The staff also determined that points listed in the 
Focus 98 document under ``Areas Needing Improvement'' were intended by 
those participating in the January 11, 1998, meeting to convey 
potential organizational weaknesses as points for discussion, and not 
to represent current or future management policy. The staff also found 
that the Focus 98 document had been developed informally, with no 
formal review and approval process, for use as a handout at an upcoming 
Nuclear Oversight Department team-building session.
    The NRC staff's reviews, including interviews with NU staff 
involved in the incident, confirmed that the general purpose of the 
Nuclear Oversight management team meeting on January 21, 1998, was to 
improve Nuclear Oversight organizational interactions. Furthermore, the 
NRC staff found that the Focus 98 document was intended to facilitate 
the discussion of one of many topic areas to be covered at the all-day 
meeting. The NRC staff's inquiries confirmed that Nuclear Oversight 
management was surprised by the immediate reaction and concern of the 
January 21, 1998, meeting participants regarding certain language in 
the Focus 98 document, and that following a discussion of the wording, 
management recognized the unintended implication of the words. After 
reviewing the available information, the NRC staff concludes that the 
wording at issue used in the Focus 98 document was no more than poorly 
selected terminology intended to convey a perceived Nuclear Oversight 
organizational weakness.
    In its March 12, 1998, response, NU stated that once it became 
apparent that non-supervisory employees in the Nuclear Oversight 
Department, who had not attended either the January 11 or January 21, 
1998, meetings, knew about the troubling language in the Focus 98 
document, NU took several actions to mitigate and assess the potential 
consequences to ensure that the release of the Focus 98 document and 
surrounding circumstances did not cause a chilling effect on the 
organization. On January 29, 1998, the Vice President--Nuclear 
Oversight held an all-hands meeting with members of his organization at 
which he apologized for the language in the document and assured the 
organization that he and the Directors were not trying to discourage 
anyone from voicing concerns. That same day, the President and Chief 
Executive Officer of Millstone and the Vice President--Nuclear 
Oversight met with the Millstone leadership team and described the 
circumstances surrounding the document. On January 30, 1998, NU issued 
a site-wide communication discussing the two meetings in detail. NU 
also assessed the effect of the document on the workforce through 
investigations and surveys. NU directed the consulting firm Nilsson and 
Associates to conduct an in-depth assessment of the document's effect 
on Nuclear Oversight Department employees and on employees who interact 
with the Nuclear Oversight Department. The assessment found that none 
of the 56 people interviewed indicated that the document has made them 
reluctant to raise concerns.
    The Petitioners also refer generally, as a basis for their request, 
to ongoing NU intimidation and harassment of its workforce and 
persistent licensee defiance of NRC regulations and directives to 
create a safety-conscious work environment. NU performance in these 
areas has been extensively assessed. An NRC Order issued on October 24, 
1996, required NU to take specific actions to resolve problems in its 
processes for handling employee safety concerns at the Millstone 
station. As required by the Order, NU developed and implemented a 
comprehensive plan for reviewing and dispositioning safety issues 
raised by its employees, and for ensuring that employees who raise 
safety concerns can raise them without fear of retaliation. NU's plan 
included elements to (1) improve the operation of its Employee Concerns 
Program organization; (2) enhance management and employee training 
related to establishing and maintaining a safety-conscious work 
environment; (3) form an Employee Concerns Oversight Panel; and (4) 
identify and respond to organizational safety-conscious work 
environment challenges. NU began implementing the plan in February 
1997, and substantially completed implementation by January 1998. As 
required by the Order, NU also submitted for NRC approval a proposed 
independent third-party oversight program organization to oversee 
implementation of its comprehensive plan. Little Harbor Consultants 
Inc. (LHC) was approved by the NRC as the third-party oversight 
organization and has been performing that function since April 1997.
    LHC's assessments of NU's programs to improve the safety-conscious 
work environment at Millstone station have noted significant 
improvements in the past year. Based on information gained from 
interviews with NU staff, program reviews, and assessment of licensee 
responses to emerging personnel issues, LHC concluded at an April 7, 
1998, meeting with NRC and NU that programs have improved and are at an 
acceptable level. As reported in an LHC quarterly report for the first 
3 months of 1998, transmitted to the NRC on April 22, 1998, LHC's 
interviews with 298 NU employees, conducted in February 1998, showed an 
improved work environment. LHC concluded from the results of these 
interviews that at Millstone improvements have been made regarding the 
willingness of the workforce to raise concerns, the confidence of the 
workforce that safety concerns will be handled properly, the existence 
of a questioning attitude, and the lack of any chilling effect.
    The NRC has monitored and assessed LHC's oversight activities and 
independently assessed NU's actions to upgrade its Employee Concerns 
Program and improve the safety-conscious work environment at the 
Millstone station. The NRC's April 21, 1998, letter to John Beck, 
President, LHC, documents the NRC staff's evaluation of LHC's oversight 
of NU's programs for handling employee concerns. The staff found that 
LHC's oversight activities have been thorough and complete and that LHC 
has effectively carried out its oversight activities. The NRC's April 
20, 1998, letter to NU forwarded the results of the NRC staff's 
evaluation of the Employee Concerns Program and safety-conscious work 
environment at the Millstone station. The NRC staff's assessment of 
these NU programs found that they were improved and functioning 
effectively.
    Based on the above, the Petitioners' request that the NRC revoke 
Millstone's operating licenses for workforce

[[Page 31237]]

intimidation and actions to prevent the establishment of a 
``questioning attitude'' with regard to employees voicing safety 
concerns is denied.

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

    The Petitioners also request that the NRC refer the Focus 98 
document and NU's attempt to destroy the document to the Department of 
Justice for investigation of a potential coverup. The Petitioners base 
this request on reports that NU management attempted to destroy the 
document. The Petitioners consider the NRC to have a duty to refer this 
apparently deliberate attempt to evade the otherwise lawful exercise of 
authority by the NRC to the Department of Justice for a complete 
investigation.
    In its March 12, 1998, letter to the NRC, NU states that 
participants at the January 21, 1998, management team meeting agreed 
that the words in the document were poorly chosen and, at the 
suggestion of a consultant who was facilitating the meeting, the 
participants agreed that the Focus 98 document should not be 
distributed further because of the deficient wording. NU states that 
most meeting participants dropped off their copy of the document with 
the consultant when the meeting was over at the end of the day, and 
others left it on tables in the room before they left. NU stated that 
no one attempted to ensure that all the Focus 98 documents were 
returned, counted the returned documents to determine if some had not 
been turned in, or ordered the participants to turn in the documents.
    The NRC staff reviewed NU's responses to the NRC's February 10, 
1998, letter, including NU's investigation report, and conducted 
separate interviews of individuals involved with the distribution and 
collection of the Focus 98 document. Information from interviews 
conducted by the staff confirmed that meeting participants generally 
concluded that certain wording in the Focus 98 document was 
inappropriate and susceptible to misinterpretation. Also, the staff's 
information was consistent with NU's report that there was general 
agreement by meeting participants to leave the document at the meeting. 
The staff concludes that NU's actions to address the Focus 98 document 
were not inappropriate. Therefore, the Petitioners' request to refer 
the Focus 98 document and its recall and destruction to the Department 
of Justice is denied.

III. Conclusion

    The NRC staff has determined, for the reasons provided in the above 
discussion, that the incident involving preparation and distribution of 
the Focus 98 document does not represent action by NU to discriminate 
against persons in the Nuclear Oversight Department. Although wording 
in the document may have been inappropriate, the process for 
preparation of the document, the informal nature of the document, and 
the use of the document as discussion points on organizational 
strengths and weaknesses, all indicate that the language in question in 
the document involved a matter of poor word choice. The NRC staff also 
has determined that efforts to collect the Focus 98 document after its 
distribution at the end of the January 21, 1998, Nuclear Oversight 
Department team-building session were not inappropriate, and that NU, 
given the nature and use of the document, had no regulatory obligation 
to provide it to the NRC or inform the NRC of its existence. As 
discussed previously, the NRC was concerned that a document prepared 
for use at an NU organizational function could contain such 
inappropriate language, even if unintended. The NRC was further 
concerned that the document could have a ``chilling effect'' on the NU 
workforce. The NRC's February 10, 1998, letter to NU required NU to 
respond to these NRC concerns. Based on the NRC staff's review of NU's 
response and the NRC's own independent assessment of the event, the NRC 
staff is satisfied with the actions taken by the licensee to assess the 
chilling effect of the incident and to prevent recurrence. Accordingly, 
the Petitioners' requests for revocation of NU's license to operate 
Millstone Units 1, 2, and 3 for reasons associated with development of 
the Focus 98 document are denied. The Petitioners' request that the NRC 
refer the matter of the document's collection and destruction to the 
Department of Justice for investigation is also denied.
    As provided for in 10 CFR 2.206(c), a copy of this Director's 
Decision will be filed with the Secretary of the Commission for the 
Commission's review. This Decision will constitute the final action of 
the Commission 25 days after issuance unless the Commission, on its own 
motion, institutes review of the Decision in that time.

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

    For the Nuclear Regulatory Commission.
Samuel J. Collins,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 98-15139 Filed 6-5-98; 8:45 am]
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