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SECY-99-018

January 14, 1999

INTRODUCTION

At the NRC, the Commission alone is authorized to review the decisions of presiding officers and Atomic Safety and Licensing Boards in agency adjudications. The Office of Commission Appellate Adjudication (OCAA) assists the Commission in this role. The Commission may exercise its appellate authority to review Board (or presiding officer) decisions either when a dissatisfied party seeks review or when the Commission, on its own initiative, determines that review is warranted. The Commission also has original jurisdiction to offer guidance, at any time, on novel or significant questions and to resolve occasional legal matters that must or should be resolved in the first instance directly by the Commission.

As part of OCAA's monitoring role over adjudicatory matters, I am providing the Commission this annual report on agency adjudications for calendar year 1998. This report updates information contained in the last report (SECY-98-014, Jan. 30, 1998), and is based upon the information in the attached charts. Chart 1 presents information regarding the twenty-five substantive decisions (CLIs) issued by the Commission in 1998, Chart 2 identifies the twenty final decisions issued by presiding officers or Licensing Boards in 1998, and Chart 3 lists and describes the twenty-four new proceedings that the Commission referred to the Atomic Safety and Licensing Board Panel (ASLBP) in 1998. Chart 4 provides a numerical breakdown of the proceedings referred to the ASLBP since OCAA's inception in July 1991 -- divided into substantive and procedural categories. Finally, Chart 5 provides a breakdown of Commission decisions issued during that same period, divided into substantive and jurisdictional categories.⁽¹⁾

GENERAL OBSERVATIONS AND TRENDS

The past year, 1998, saw a dramatic increase in the adjudicatory workload of both the Commission and the ASLBP, continuing a trend that started in 1997. The number of new proceedings referred to the ASLBP (24, almost double last year's total of 13) was by far the highest since OCAA's inception in 1991, and the number of CLIs issued by the Commission (25, up from 15 last year) was the second highest. The 33 LBPs, including non-final orders, were the most in four years. Finally, the number of final Board (or presiding officer) decisions in 1998 (20), although lower than 1997's all-time high of 23, still equaled or exceeded all other annual totals since the inception of OCAA.

1.  The ASLBP's Caseload

Although for some years we have reported regularly that the ASLBP's caseload continued to shift from reactor licensing matters to enforcement and materials licensing cases, this pattern reversed itself in 1998. The enforcement and materials categories remained essentially unchanged, while the number of reactor licensing matters increased ninefold. And though still small in number, reactor operator license proceedings tripled in the last year.

In all, a total of 12 reactor-related cases got started in 1998. In no prior year since OCAA's establishment in 1991 had the number exceeded 3. By contrast, the number of new enforcement and materials cases conformed to recent experience. There were 5 new enforcement cases in 1998 (the same as in 1997) and 6 new materials cases (there were 7 in 1997). If these patterns persist, of course, reactor adjudications will surge in the immediate future and enforcement and materials cases will merely tread water.

2.  The Commission's Caseload

As the following figures indicate, the trends in the Commission's caseload largely track those of the ASLBP -- an increase in total published orders (LBPs and CLIs), a marked increase in reactor-related cases, and a general leveling-off of materials and enforcement actions.

The Commission's own caseload (as reflected in the number of CLIs it issued) took a marked turn upward, jumping from 15 to 25 CLIs, the most since 1993. This upswing was largely attributable to two cases -- the Hydro Resources materials licensing case, which generated 5 orders and the Calvert Cliffs relicensing proceeding, which generated 4. Like the ASLBP's caseload, the Commission's cases reflected the arrival of a brand-new kind of case -- the reactor relicensing proceedings (5 CLIs in '98 involving the Calvert Cliffs and Oconee plants) -- as well as an increase in reactor license amendment decisions (4 in '98 compared with 0, 2 and 7 in '97, '96 and '95, respectively).

Looking at the increase in the Commission's own workload from a procedural perspective, the increase in CLIs is largely attributable to huge increases in appeals as of right under section 2.714a (7 this year, compared to 2, 1 and 1 during '97, '96 and '95, respectively) and in matters involving the Commission's actions on matters of original jurisdiction (10 this year, compared with 2, 2 and 5 during '97, '96 and '95, respectively). Similarly (though less important numerically), the Commission considered more discretionary appeals (4 in '98, compared with 0, 0 and 5 in '97, '96 and '95, respectively) and sua sponte matters (2 in '98, compared with 0, 1 and 1 in '97, '96 and '95, respectively). Notably, just 2 of the Commission's 1998 decisions could be characterized as "merits" decisions (as compared to 11 last year). The remainder addressed various procedural or threshold matters.

3.  Increased Speed in Resolving Cases

Another caseload-related development is that the agency as a whole is resolving adjudicatory proceedings faster. Of the 15 cases referred to the Board prior to Labor Day in 1998, 12 were closed by year's end -- 1 on the merits, 6 by settlement, withdrawal or default, and 5 by denial of intervention. (By comparison, the Board and Commission closed 5 of 9 cases, 6 of 7 cases, and 0 of 3 cases in '97, '96 and '95, respectively.)

Although the Commission cannot control many of the factors that govern the speed with which its cases are resolved (e.g., the number and complexity of the issues, the willingness of parties to settle, the pace with which the Department of Justice pursues parallel criminal actions), nevertheless the increased speed with which the Commission has decided cases this year clearly reflects its heightened emphasis on both the importance of adjudications and the need for their expeditious resolution -- both of which concepts were reflected in the recent Statement of Policy on Conduct of Adjudicatory Proceedings, CLI-98-12. The Commission's willingness to become involved in cases earlier, to set proposed schedules for adjudications, to monitor Board action (or inaction) more closely, and generally to take a more active supervisory role has been effective in moving forward the agency's proceedings.

The Commission's heightened involvement in adjudications is reflected in its repeated offering of guidance to the Board (e.g., Calvert Cliffs, CLI-98-14; Oconee, CLI-98-17) and its taking sua sponte review of more Board orders (Seabrook, CLI-98-18; Hydro Resources, CLI-98-16). OCAA will continue to monitor the adjudicatory caseload and be on the lookout for opportunities where the Commission may appropriately exercise its supervisory role.

Assuming that the presiding officers and Boards follow the principles and guidelines enunciated in the Policy Statement (and also in the referral orders in the Calvert Cliffs and Oconee reactor license renewal proceedings (CLI-98-14 and -17)), we would anticipate that adjudicatory proceedings will be resolved even more quickly in the future. In the wake of the Louisiana Enrichment Services proceeding, which terminated in 1998 after 7 years of litigation, the ASLBP has committed itself to issuing decisions within sixty days after the parties file their closing pleading. Similarly, in our operating plan, OCAA has undertaken to complete its drafts of Commission decisions within sixty days of receipt of the final appellate brief (except in extremely complex proceedings), and more quickly than that if OCAA resources and the nature of the issues permit.

Moreover, the recent promulgation of streamlined procedural rules for hearings on license transfer applications (Subpart M) promises rapid resolution of those cases as well. Subpart M applications may strain OCAA resources, however, as Subpart M contemplates that the Commission itself will resolve contested applications on the merits, after a hearing; OCAA ordinarily provides drafting assistance to the Commission on such matters. Such applications are not referred to the ASLBP in the first instance. We are working with OGC to develop the most expeditious means of handling and staffing Subpart M cases.

Finally as to the Commission's expeditious treatment of cases, it is worth noting that, in four instances, the Commission issued orders almost immediately after being asked to do so -- in only 4, 3, 2, and 1 day (CLI-98-9, -19, -15, and -4, respectively). Such rapid turnaround times, however, are possible only in cases where the issues are not complex and the Commission's views are clear. OCAA plans to continue its emphasis on issuing speedy decisions whenever possible. Our effort to increase speed and efficiency, however, ought not necessitate a decrease in either decisionmaking quality or procedural fairness -- a point the Commission has made repeatedly in recent months (CLI-98-12, -14, -17).

4.  Future Agency Caseload

We anticipate a continuing increase in the number of cases involving reactor relicensing and reactor decommissioning,⁽²⁾ together with the advent of reactor transfer proceedings (to be adjudicated under the Commission's new Subpart M rules). The age of many currently-operating reactors makes an upswing in the first two categories quite likely, and the restructuring of the electric industry makes a significant number of the third category highly probable.⁽³⁾ Also, the Commission's caseload could rise were Congress to assign the NRC additional responsibilities, such as regulating DOE nuclear facilities. The future materials and enforcement caseloads are difficult to predict, as they seem to rise and fall erratically over the years. Much depends on the level of controversy attendant to particular NRC actions.

Another unknown future variable is possible reform of the NRC's hearing process. A move toward more informal proceedings, for example, perhaps on the Subpart L or Subpart M models, might generate additional proceedings as members of the public become aware that participation in the NRC process need not be overly costly or complex.

SIGNIFICANT DECISIONS IN 1998

In 1998, the Commission issued far more than the usual number of CLIs addressing significant issues:

Louisiana Energy Services, L.P., CLI-98-3, 47 NRC 77. The Commission addressed environmental justice, an issue of first impression before the agency, and concluded that NEPA does not require the NRC to consider a claim of discriminatory motives. Instead, "disparate impact" analysis is the agency's principal tool for advancing environmental justice under NEPA. The Commission also addressed and resolved other NEPA issues.

Private Fuel Storage, L.L.C., CLI-98-7, 47 NRC 307. Citing the interests of expediency and efficiency, the Commission reversed the Chief Judge's ruling which had created a separate Licensing Board to address issues involving the applicant's physical security plan.

Hydro Resources, Inc., CLI-98-9, 47 NRC 261. The Commission addressed an issue of first impression -- what standards does the Commission apply when determining whether to disqualify a Presiding Officer in a Subpart L proceeding.

Quivira Mining Co., CLI-98-11, 48 NRC 1 and International Uranium (USA) Corp., CLI-98-23, 48 NRC ___. In these two orders, the Commission rejected Envirocare's claim of standing to challenge a competitor's license amendment. The Commission found that neither NEPA nor the AEA provided statutory protection for economic harm unrelated to radiological or environmental effects.

Statement of Policy on Conduct of Adjudicatory Proceedings, CLI-98-12, 48 NRC 18. The Commission issued its first policy statement on this subject in more than seventeen years. The Policy Statement addressed the need to provide both fair and expeditious adjudications, and offered the Licensing Boards specific guidance regarding contentions, hearing schedules, the parties' obligations, and discovery management.

Private Fuel Storage, L.L.C., CLI-98-13, 48 NRC 26. Amplifying earlier statements on environmental justice, the Commission clarified that "discrimination in the site selection process" is not a cognizable claim in our adjudicatory proceedings. The Commission also clarified that Part 50 financial qualifications are not applicable in toto to Part 72 ISFSI applicants, but should merely be used as guidance. Finally, the Commission affirmed the Licensing Board's rulings on standing and intervention.

Baltimore Gas & Elec. Co., CLI-98-14, 48 NRC 39 and Duke Energy Corp., CLI-98-17, 48 NRC 123. In these decisions referring the first two license renewal proceedings to the Licensing Board, the Commission established a proposed schedule for the proceedings and offered guidance to the Board.

Baltimore Gas & Elec. Co., CLI-98-15, 48 NRC 45. Here, the Commission definitively resolved issues regarding its inherent supervisory authority over adjudications -- particularly its authority to offer guidance and to set expedited schedules and customize procedures for individual proceedings.

Hydro Resources, Inc., CLI-98-16, 48 NRC 119. Exercising its inherent supervisory authority, the Commission issued a decision excluding from an NRC adjudicatory proceeding a controversy over the permitting authority of the Navajo Nation. The Commission reasoned that other regulatory bodies, such as the Navajo Nation, the states, or the EPA, are responsible for policing their own requirements.

Yankee Atomic Elec. Co., CLI-98-21, 48 NRC 185. The Commission set forth for the first time the scope of a License Termination Plan amendment proceeding, and explained how such a proceeding relates to decommissioning and ISFSI proceedings and to license terminations. After laying this groundwork, the Commission affirmed the Board's rejection of one petition to intervene and, in the alternative, dismissed the same petitioner's appeal on procedural grounds. The Commission reversed the Board's rejection of the remaining two intervention petitions. Finally, the Commission narrowed the issues that could be appropriately considered in this proceeding and offered guidance to the Board.

Baltimore Gas & Elec. Co., CLI-98-25, 48 NRC ___. In this first reactor license renewal proceeding, the Commission justified its decision to treat license renewal applications expeditiously and then upheld the Board's rejection of a petitioner on grounds that it had failed either to submit timely contentions or to meet the late-filed standards for its two untimely contentions. The Commission also explained why it had authority to modify its procedures either by Policy Statement or on a case-by-case basis.

SIGNIFICANT ISSUES CURRENTLY PENDING BEFORE THE COMMISSION

The Commission currently has before it an appeal of a Licensing Board decision (LBP-98-24) refusing to allow intervention in a Zion license amendment proceeding. Moreover, an appeal is expected imminently challenging the Board's December 29^th decision (LBP-98-33) denying intervention in the proceeding on Duke Energy Corporation's request to renew the reactor license for its Oconee Nuclear Station. This proceeding involves the second reactor license renewal application received by the Commission. OCAA anticipates additional appeals or petitions for review in the next 30-60 days challenging expected Board or presiding officer decisions in the Ben-Haim, Hydro Resources, Private Fuels Storage, Yankee Atomic and other cases.

In addition, the Commission has recently received its first license transfer case under the new Subpart M (Seabrook), and we expect that the Commission will receive another such case (involving Pilgrim) soon. Each of these cases will require one or more adjudicatory decisions, each to be handled under the Commission's original jurisdiction..

SIGNIFICANT ISSUES CURRENTLY BEFORE THE ASLBP THAT MAY REACH THE COMMISSION

Private Fuel Storage (ISFSI). Private Fuel Storage seeks a license under 10 C.F.R. Part 72 to construct an independent spent fuel storage facility on the tribal land of the Skull Valley Band of Goshute Indians. This lengthy and complex proceeding currently involves 5 admitted parties, including Native American groups who oppose the Skull Valley Band's agreement with Private Fuel Storage, and the state of Utah, which is vigorously contesting the facility. Contested issues include financial qualifications, environmental justice, NEPA matters, the security plan, and numerous technical questions.

International Uranium (USA) Corp. (MLA-4 and -5). In the first of these two proceedings, the state of Utah, an admitted party, opposes a materials license amendment, issued June 1998, authorizing IUSA to receive, possess, and dispose of uranium-bearing material from the Ashland 2 FUSRAP (Formerly Utilized Sites Remedial Action Program) in New York. Utah's principal argument is that the license amendment does not comply with NRC requirements under 10 C.F.R. Part 40 and that IUSA's primary purpose in obtaining the material is to receive a "disposal fee" and thereby to act as a disposal facility, not to extract source material. A similar proceeding, MLA-5, is also ongoing and concerns IUSA's request for a license amendment to receive uranium-bearing material from the Ashland 1 and Seaway Area D FUSRAP sites. Various parties have sought to intervene.

Hydro Resources Inc. In this extremely complex Subpart L proceeding, various intervenors challenge an NRC license obtained by Hydro Resources, Inc., to conduct in situ uranium mining at a site in New Mexico. The intervenors raise numerous issues, including NEPA questions, environmental justice concerns, groundwater safety and the very validity of the unusual "performance-based" license issued by the NRC staff. The license is in effect, as the presiding officer and the Commission each denied a stay in the first half of 1998. The presiding officer has broken the proceeding into parts and likely will issue a series of merits decisions beginning in March.

SUMMARY OF ACTIVITIES OF THE ATOMIC SAFETY AND LICENSING BOARD PANEL

• The Board Panel issued 20 final decisions.
  
  
• The Board Panel established 24 new proceedings, 12 of which have been terminated.
  
  
• 14 cases were pending before the Board Panel as of 12/31/98:

Hydro Resources, Inc.
Yankee Atomic Elec. Co. (Yankee Nuclear Power Station)
Advanced Medical Systems (two consolidated cases)
Aharon Ben-Haim, Ph.D.
Private Fuel Storage, LLC
International Uranium (USA) Corp. (MLA-4)
International Uranium (USA) Corp. (MLA-5)
Shaun P. O'Hern
Michael A. Philippon
Cabot Performance Materials (MLA)
Cabot Performance Materials (MLA-2)
Special Testing Laboratories, Inc.
Shieldalloy Metallurgical Corp.

If the Commissioners would like any additional information on this memorandum or on any adjudicatory proceeding, I would be happy to provide it.

Enclosures: Charts 1-5

CHART 1

CHART 2

CHART 3

CHART 4

PROCEEDINGS DECIDED AND REFERRED TO THE ATOMIC SAFETY & LICENSING BOARD -- CY-1998

CHART 5

COMMISSION DECISIONS ON ADJUDICATORY MATTERS -- CY-1998

1. From last year's group of six charts, we are dropping what used to be Chart 4, entitled "NRC Proceedings Referred to the ASLBP, July 1991 - [present]." We do not intend to update it in the future unless the Commission directs otherwise. As its title indicated, the old Chart 4 offered an historical listing (and description) of all adjudicatory cases since OCAA's inception in July of 1991. As such, its historical focus was different from that of an annual report. While historical information can be useful, the yearly revision of old Chart 4 took considerable OCAA resources each year (several days of attorney effort), and the chart itself was becoming increasingly (and, in our view, unduly) lengthy -- it comprised more than a third of last year's Annual Report. OCAA currently lacks the resources to maintain the old Chart 4.

2. Although the Commission's recent decommissioning rulemaking removes decommissioning itself from the adjudicatory process, the process of decommissioning nonetheless will likely "spin off" adjudications. E.g., Yankee Atomic Elec. Co., LBP-98-12, 47 NRC 343, aff'd in part and rev'd in part, CLI-98-21, 48 NRC 85 (1998).

3. A series of license transfer applications seems likely. For example, Entergy Corp. agreed in November to buy Boston Edison's Pilgrim nuclear power plant -- a move that already is drawing opposition from some in the local area. Entergy also announced in mid-December that there is a "reasonable chance" it will close a deal by the end of the year to acquire another U.S. nuclear power plant. Illinova has been talking with both Entergy and Peco Energy as potential buyers for the Clinton nuclear power plant in Illinois. And Alliant Utilities and three other Midwest utilities announced in late November that they are exploring the advantages of forming a single organization to service or possibly operate seven nuclear power plants in the region. One challenge to a license transfer, involving the Seabrook plant, is already in-house.

4. Includes all decision or orders deciding the merits of a case, terminating a proceeding, or denying party status to a person.