APPEAL FROM THE UNITED STATES NUCLEAR REGULATORY COMMISSION (Docket No. 50-289 SP)
Before: SEITZ, ADAMS, and STAPLETON, Circuit Judges
STAPLETON, Circuit Judge.
Three Mile Island Nuclear Station has two units, TMI-1 and TMI-2*fn1 On March 28, 1979, an accident severely damaged TMI-2. Prior to the accident, TMI-1 had been shut down for normal refuelling and maintenance. On July 2, 1979, the Nuclear Regulatory Commission ("NRC") issued an immediately effective order requiring that TMI-1 remain shut down until the Commission, after a public hearing, determined that there was reasonable assurance that the licensee could restart and operate the unit without endangering the health and safety of the public. 44 Fed. Reg. 40,461 (July 10, 1979). On August 9, 1979, the NRC issued a further order specifying the procedural and substantive format for the hearing. Metropolitan Edison Co. (Three Mile Island Nuclear Station, Unit No. 1), CLI-79-8, 10 NRC 141 (1979).
The petitioners in this review proceeding are the Commonwealth of Pennsylvania (the "Commonwealth"), Three Mile Island Alert, Inc. ("TMIA"), the Union of Concerned Scientists ("UCS"), and Norman and Marjorie Aamodt (the "Aamodts"). These petitioners intervened before the Commission and participated actively and effectively in the extensive hearings conducted pursuant to the August 9, 1979 order. While the issues addressed in these hearings remained under advisement at various levels of the administrative process, several motions were filed asking that the hearing record be reopened. While the record was reopened to receive some additional evidence, the Commission denied motions of these petitioners.
On May 29, 1985, the Commission decided that TMI-1 could be safely restarted under certain stipulated conditions and ordered that the 1979 immediately effective suspension of the TMI-1 operating license be lifted. Petitioners insist that the Commission could not legally take this action without holding an adjudicatory hearing on the issues raised in their motions to reopen the administrative record. Some of the petitioners also contend that the decision reflected in the Commission's May 29th Order is arbitrary and capricious. We conclude that the May 29th Order is not arbitrary, capricious, or contrary to law and that, accordingly, the petitions for review should be denied.
I. SUMMARY OF THE PROCEEDING
The proceeding that gives rise to these petitions for review is one of the most comprehensive adjudicatory proceedings ever conducted by the NRC. The procedural history of this matter is described in detail by the Commission in its May 29, 1985 order, CLI-85-9, 21 NRC , and will not be repeated here in full. Nevertheless, a summary of that complex history is a prerequisite to an understanding of the issues raised by petitioners.
The Commission's August 9, 1979 "Order and Notice of Hearing" ("Order") called for an adjudicatory hearing to commence within 180 days of publication of the Order and established a Licensing Board, consisting of one lawyer and two scientists,*fn2 to conduct the hearing. CLI-79-8, 44 Fed. Reg. 47821, 10 NRC 141 (1979). The proceedings conducted pursuant to the Order are hereafter referred to as the "Restart Proceedings." The purpose of the hearing was to determine "whether any further operation [of TMI-1 would] . . . be permitted and, if so, under what conditions." 10 NRC at 142. The Commission directed the Licensing Board to answer two questions:
(1) Whether the "short term actions" recommended by the Director of Nuclear Reactor Regulation ... are necessary and sufficient to provide reasonable assurance that the Three Mile Island Unit 1 facility can be operated without endangering the health and safety of the public, and should be required before resumption of operation should be permitted.
(2) Whether the "long-term actions" recommended by the Director of Nuclear Reactor Regulation ... are necessary and sufficient to provide reasonable assurance that the facility can be operated for the long term without endangering the health and safety of the public, and should be required of the licensee as soon as practicable.
The Order required the licensee, Metropolitan Edison Company ("Met Ed"), to maintain TMI-1 in a "cold shutdown condition" until (1) satisfaction of such short-term actions as the Commission ultimately determined, "after review of the Licensing Board's decision, to be necessary and sufficient to provide adequate protection of the public health and safety" and (2) reasonable progress toward the long-term actions that the Commission determined to be necessary and sufficient to satisfy the same standard. 10 NRC at 146. The NRC also requested the Director of its staff to determine outside of the adjudicatory proceeding whether the short-term conditions ultimately imposed had been satisfactorily completed. Restart was prohibited until the Director certified to the Commission that all such conditions had been met.
The Commission intended the capability and integrity of the licensee's operating and managerial personnel (the "management competence" issues) to be important issues in the restart proceedings. Among the "short-term" actions proposed by the Director and subject to adjudication before the Licensing Board were that the licensee, with respect to TMI-1:
Augment the retraining of all Reactor Operators and Senior Reactor Operators assigned to the control room including training in the areas of natural circulation and small break loss of coolant accidents including revised procedures and the TMI-2 accident. All operators will also receive training at the B&W simulator on the TMI-2 accident and the licensee will conduct a 100 percent reexamination of all operators in these areas. NRC will administer complete examinations to all licensed personnel in accordance with 10 CFR 55.20-23.
The licensee shall demonstrate his managerial capability and resources to operate Unit 1 while maintaining Unit 2 in a safe configuration and carrying out planned decontamination and/or restoration activities. Issues to be addressed include the adequacy of groups providing safety review and operational advice, the management and technical capability and training of operations staff, the adequacy of the operational Quality Assurance program and the facility procedures, and the capability of important support organizations such as Health Physics and Plant Maintenance.
Before the hearing commenced, the Commission entered a supplementary order, CLI-80-5, 11 NRC 408 (March 6, 1980), which gave the Licensing Board further guidance regarding the management competence issues:
In determining whether Metropolitan Edison is capable of operating Unit 1 safely, the Board is directed to examine the following broad issues: (1) whether Metropolitan Edison's management is sufficiently staffed, has sufficient resources and is appropriately organized to operate Unit 1 safely; (2) whether facts revealed by the accident at Three Mile Island Unit 2 present questions concerning management competence which must be resolved before Metropolitan Edison can be found competent to operate Unit 1 safely; and (3) whether Metropolitan Edison is capable of operating Unit 1 safely while simultaneously conducting the clean-up operation at Unit 2.
In the course of examining these broad questions, the Licensing Board should examine the following specific issues:
(1) whether Metropolitan Edison's command and administrative structure, at both the plant and corporate levels, is appropriately organized to assure safe operation of Unit 1;
(2) whether the operations and technical staff of Unit (sic) is qualified to operate Unit 1 safely (the adequacy of the facility's maintenance program should be among the matters considered by the Board);
(3) What (sic) are the views of the NRC inspectors regarding the quality of the management of TMI Unit 1 and the corporate management, staffing, organization and resources of Metropolitan Edison;
(7) whether Metropolitan Edison has made adequate provision for groups of qualified individuals to provide safety review of and operational advice regarding Unit 1;
(8) what, if any, conclusions regarding Metropolitan Edison's ability to operate Unit 1 safely can be drawn from a comparison of the number and type of past infractions of NRC regulations attributable to the Three Mile Island Units with industry-wide infraction statistics;
(9) what, if any, conclusions regarding Metropolitan Edison's ability to operate Unit 1 safely can be drawn from a comparison of the number and type of past Licensee Event Reports ("LER") and the licensee's operating experience at the Three Mile Island Units with industry-wide statistics on LER's (sic) and operating experience;
(10) whether the actions of Metropolitan Edison's corporate or plant management (or any part or individual member thereof) in connection with the accident at Unit 2 reveal deficiencies in the corporate or plant management that must be corrected before Unit 1 can be operated safely. . . .
CLI-80-5, 11 NRC 408, 409 (1980).
The August 9, 1979 Order required the Licensing Board to render decisions on these issues and to certify the record to the Commission for final decision.*fn3 The Order further provided for an unusual two-track review of the Licensing Board's decision.*fn4 In addition to appellate review of Licensing Board decisions by the Commission, the Order created an "effectiveness review" to determine whether to lift the immediate effectiveness of the shutdown orders and to permit operation of the plant prior to completion of the appellate review.
The Licensing Board thereafter conducted formal hearings that in their detail and complexity far exceeded the Commission's original expectations. Whereas the Commission anticipated that the hearings would take 60 days and that the Licensing Board would render its decision eleven months after the August, 1979 Order, the Licensing Board ultimately held 155 days of hearings and, six years after the TMI-1 shutdown orders, has yet to issue the final installment of its decision.
The comprehensiveness of the NRC proceeding can be measured in part by the enormity of its record. The administrative record currently consists of more than 100,000 pages, including approximately 33,000 transcribed pages of testimony and argument and thousands of additional pages of exhibits and written testimony. The Licensing and Appeal Boards and the Commission have published opinions filling 1,500 pages in the NRC's official reports. The commission itself has heard oral presentations from the parties on five different occasions, has held a meeting in Harrisburg, Pennsylvania, to hear from members of the public, and has issued more than 26 substantive orders.
At the hearings themselves, all parties had the opportunity to cross-examine witnesses and offer rebuttal evidence. The Licensing Board conducted an extensive inquiry regarding the management competence issues. The licensee produced its management and technical personnel at the hearing, and petitioners and other intervenors, as well as the Board, examined them at length. LBP-81-32, 14 NRC 381, 401 (August 27, 1981). Moreover, at a supplementary hearing before a Special Master on allegations that TMI-1 plant operators had cheated on tests, the operators testified under a sequestration order and were thoroughly examined. LBP-82-56, 16 NRC 281, 291 (July 27, 1982).
The Licensing Board has issued four partial initial decisions, each of which--after imposing certain conditions on restart--concludes that TMI-1 may be restarted. In its first decision, issued August 27, 1981, the Board addressed several management-related issues, including licensee's management structure, the adequacy of licensee's training program, licensee's response to the accident at TMI-2, and licensee's capability and resources. LBP-81-32, 14 NRC 381 (1981). The Board concluded that the Director's recommendations governing management competence were necessary and sufficient to ensure public safety, but retained jurisdiction to consider the effect on its decision of an ongoing investigation of allegations of operator cheating on licensing exams.*fn5 The Board noted that because it lacked sufficient information, it had not considered in its decision the subject matter of a United States Department of Justice criminal investigation of alleged falsification by TMI-2 operators of safety-related leak rate tests. On October 2, 1981, the Board reopened the record on the implications of the alleged operator cheating and appointed a Special Master to hear the relevant evidence.
The Licensing Board issued its second initial decision on December 14, 1981, covering hardware and design issues, the separation of Units 1 and 2,*fn6 and emergency planning. LBP-81-59, 14 NRC 1211 (1981). Again, the Board found that the licensee satisfied NRC short-term requirements, subject to correction of several deficiencies in design, procedures and planning. These corrections, "in the form of Licensee commitments, NRC Staff requirements and Board-imposed conditions," provided reasonable assurance that TMI-1 could be operated without endangering the health and safety of the public. 14 NRC at 1711. The Board also determined that licensee had made reasonable progress toward the Director's recommended long-term actions.
Before the Licensing Board issued its next partial initial decision, licensee undertook a reorganization that resulted in Met Ed being replaced by GPU Nuclear Corporation ("GPUN") as the operator of TMI-1. GPUN was a newly-created subsidiary of General Public Utilities Corporation ("GPU") whose sole responsibility is management of GPU's three nuclear power plants.*fn7
The Board's third partial initial decision, issued on July 27, 1982, addressed the allegations of cheating in response to which it had reopened the record the previous October. LBP-82-56, 16 NRC 281 (1982). This decision reviewed the Special Master's report, which had been submitted on April 28, 1982, LBP-82-34B, 15 NRC 918 (1982), imposed five new conditions on the restart of TMI-1, and concluded that the favorable determinations of the first and second partial initial decisions remained in effect. 16 NRC at 385.
After the Licensing Board rendered its third partial initial decision, litigation between GPU and Babcock & Wilcox Co., the manufacturer of the TMI-2 reactor, produced information that petitioners believe highly relevant to the management competency issues. That information, according to petitioners, indicates that the licensee made false statements to the NRC in its response to a Commission Notice of Violation for misconduct related to the TMI-2 accident. On April 18, 1983, the NRC staff announced it was "revalidating" its earlier position on management competence.*fn8
Soon thereafter, GPUN committed to make three significant organizational changes. On June 10, 1983, it announced it would realign personnel to minimize involvement at TMI-1 of employees who had preaccident involvement at TMI-2, add full-time, on-shift operational quality assurance coverage by degreed engineers, and realign functions within the office of the president of GPUN.
On August 31, 1983, the Appeal Board decided to reopen the record for further hearings on the impact of the leak rate falsification charges on management competence. ALAB-738, 18 NRC 177 (1983). The Commission, in an October 7, 1983 unpublished order, took review of the Appeal Board's determination and stayed any hearings into the matter.
The Commission heard oral presentations from all parties on November 28 and December 5 regarding the reorganization of the licensee. At the November hearing, GPU announced further changes in its organization. Besides verifying that the June 10th plan had been implemented, the company announced that three outside directors had been added to the GPUN Board of Directors, and that they would comprise a separately staffed and funded Nuclear Safety and Compliance Committee. GPU also announced that the President of GPUN, Robert Arnold, had resigned. On February 6, 1984, GPU announced further personnel changes, including one affecting Herman Dieckamp, who, while continuing to serve as GPU's President, would no longer serve as Chairman and Chief Executive Officer of GPUN.*fn9
The cumulative effect of personnel changes at TMI-1 since the TMI-2 accident was to significantly alter the GPUN workforce. Of the twelve senior GPUN officers, eight joined the GPU system after the TMI-2 accident, and three of the remaining four had no connection with Met Ed. Of 435 key personnel at GPUN, 235 joined GPUN after the accident, and 100 preaccident employees had never worked with Met Ed. The number of full-time employees who are to work at TMI-1 is almost triple the number employed when Met Ed operated it (915 to 315). Finally, GPUN employs nearly eight times as many employees responsible for training as did Met Ed (55 to 7). CLI-85-09, 21 NRC , n.39 (1985).
On February 28, 1984, Met Ed pled guilty to criminal falsification of leak rate data. A Statement of Facts submitted to the Court by the United States Attorney in connection with the sentencing specified that although "the evidence would establish that a number of employees of the Metropolitan Edison Company engaged in the criminal activities charged in the indictment," "the evidence presented to the grand jury and developed by the United States Attorney does not indicate that any" of the directors or officers of GPUN from its inception in 1982 "participated in, directed, condoned, or was aware of the acts or omissions that are the subject of the indictment.
On May 24, 1984, the Appeal Board reversed the Licensing Board's third partial initial decision and reopened the record on three issues. ALAB-772, 19 NRC 1193 (1984). These were the effect of the cheating incidents on training, the truthfulness of a mailgram sent by GPU President Herman Dieckamp to Congressman Morris Udall shortly after the accident, and the possibility of improper leak rate practices at TMI-1. 19 NRC at 1279-80.
The Commission on February 25, 1985, reversed the Appeal Board's decision to reopen the record: CLI-85-2, 21 NRC 282 (1985). After considering the numerous contentions raised by the parties, the Commission found that none of those contentions warranted further hearings in the restart proceeding. The Commission in particular addressed the petitioners' claim that leak rate falsifications at TMI-2 raised sufficient doubts regarding management competence as to require reopening of the record. It concluded that personnel changes by the licensee mooted the immediate significance of the TMI-2 leak rate manipulation and, to provide added assurance, imposed the following conditions on the licensee:
(1) No pre-accident TMI-2 operator, shift supervisor, shift foreman, or any other individual both in the operating crew and on shift for training as a licensed operator at TMI-2 prior to the accident shall be employed at TMI-1 in a responsible management or operational position without specific Commission approval.
"Operational position" as used here includes any position involving actual operation of the plant, the direction or supervision of operators, or independent oversight of operations.
This condition shall also apply to the pre-accident Vice President, Generation, TMI-2 Station Manager, TMI-2 Supervisor of Technical Support (from January 1977 to November 1978), TMI-2 Supervisor of Technical Support (from December 1978 to the accident), and TMI-2 Supervisor of Operations. This condition shall not apply to Michael Ross, and Brian Mehler may continue in his present position consistent with this condition.
(2) Licensee, in the absence of Commission authorization to the contrary, is to retain its expanded Board of Directors and its Nuclear Safety and Compliance Committee.
The Commission's February 25th order also initiated a new proceeding to consider disciplining employees, other than those explicitly cleared by the United States Attorney in his Statement of Facts, possibly involved in leak rate falsification at TMI-2.*fn10 21 NRC at 287. Finally, the Commission directed the Licensing Board to issue decisions on the training and Dieckamp mailgram issues, on which the Board already had completed evidentiary hearings.
The Licensing Board issued its fourth partial initial decision on May 3, 1985. LBP-85-15, 21 NRC (1985). This decision reviewed the adequacy of licensee's training programs in light of the cheating incidents. The Board, after requiring the licensee to implement a plan for ...