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SECY-00-0005

January 5, 2000

• INTRODUCTION
• GENERAL OBSERVATIONS AND TRENDS
• 1. The ASLBP's Caseload
• 2. The Commission's Caseload
• 3. Speed in Resolving Cases
• 4. Future Agency Caseload
• SIGNIFICANT DECISIONS IN 1999
• SIGNIFICANT ISSUES CURRENTLY PENDING BEFORE THE COMMISSION
• SUMMARY OF ACTIVITIES OF THE ATOMIC SAFETY AND LICENSING BOARD PANEL

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 these trial-level decisions either when a dissatisfied party to an NRC adjudicatory proceeding seeks review, or when the Commission, on its own initiative, determines that review is warranted. The Commission also has original jurisdiction to offer the Licensing Board guidance on significant novel questions raised in a proceeding and to resolve those occasional legal matters that appropriately should be resolved in the first instance directly by the Commission. Moreover, for the last year, the Commission has had original jurisdiction over all reactor license transfer proceedings -- another matter on which OCAA assists the Commission.

As part of OCAA's monitoring role over adjudicatory matters, I am providing the Commission this annual report on agency adjudications for calender year 1999. This report updates information contained in the last report (SECY-99-018, Jan. 14, 1998), and is based upon the information in the attached charts. Chart 1 presents information regarding the thirty substantive decisions (CLIs) issued by the Commission in 1999, Chart 2 identifies the twenty-one final decisions issued by presiding officers or Licensing Boards in 1999, and Chart 3 lists and describes the twelve new proceedings that the Commission referred to the Atomic Safety and Licensing Board Panel (ASLBP) in 1999. 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.

GENERAL OBSERVATIONS AND TRENDS

The year 1999 saw a continuation of 1998's dramatic increase in the adjudicatory workload of both the Commission and the ASLBP, extending a trend that started in 1997. The number of CLIs issued by the Commission (30) continued its dramatic recent rise (up from 25 in 1998 and 15 in 1997) and reached the highest level since 1983. The ASLBP's 46 LBPs (including non-final orders) were the most since 1990, topping last year's total of 33. The number of final Board (or presiding officer) decisions in 1999 (21) was also impressive -- it was the second-highest since OCAA began keeping these records in 1991. The only significant arena in which the numbers did not increase was the number of new proceedings referred to the ASLBP (12), which dropped back to its usual level of around a dozen from last year's aberrational high of 24. However, this number of referrals is deceptive because it does not include 7 reactor license transfer applications -- a category of proceeding over which the Commission has accorded itself direct jurisdiction. In all, then, 19 new adjudications began in 1999.

1.  The ASLBP's Caseload

The number of new enforcement cases decreased from 5 to 1. The new reactor-related cases (license amendment, license renewal and operator license proceedings) returned to their more typical level of 2, after an aberrational jump to 12 in 1998. By contrast, the number of new materials cases continued their climb to 9, from 7 in 1998 and 6 in 1997. For the first time since the inception of the informal Subpart L rules, the Board in 1999 processed the bulk of its new caseload using those procedures (9 cases) rather than the formal Subpart G procedural rules (3 cases).

2.  The Commission's Caseload

The increase in the number of CLIs the Commission issued in 1999 is largely attributable to one proceeding (the Hydro Resources materials licensing case which generated 6 CLIs in 1999) and to the reactor transfer proceedings (11 CLIs in 1999). Due in large part to the decisions in Hydro Resources, the number of materials license CLIs remained static at 10 -- compared with 10 in 1998 and 9 in 1997. Similarly, the number of reactor license amendment decisions remained at its average level of 3 since 1995. Likewise, the enforcement CLIs remained at 1 -- the same as in 1998 and tied for the lowest figure since OCAA began keeping records in 1991. The number of reactor relicensing orders dropped from 5 CLIs in '98 down to 1 in 1999. The Commission also issued 3 CLIs addressing import or export license applications and 1 CLI involving an ISFSI application.

Looking at the Commission's 1999 orders from a procedural perspective, the rise in CLIs is principally attributable to the 17 CLIs issued under the Commission's original jurisdiction (up from 10, 2, 2, and 5 in '98, '97, '96, and '95, respectively). The Commission issued 11 of these 17 CLIs in the new Subpart M license transfer proceedings -- an area that promises continued activity for years to come. (The 17 CLI's also included an unusually high 3 orders involving applications to import or export nuclear material under Part 110.)

Appeals as of right under section 2.714a backed off a bit to 5 from its post-1990 record level of 7 in 1998; still, this is considerably above the levels of the three prior years -- 2, 1 and 1 during '97, '96 and '95, respectively. The Commission considered roughly the same number of discretionary appeals in 1999 (3) as in previous recent years (4, 0, 0 and 5 in '98, '97, '96 and '95, respectively). The same was true for sua sponte matters 1 in 1999, compared with 2, 0, 1 and 1 in '98, '97, '96 and '95, respectively. For the second straight year, the Commission issued markedly fewer final "merits" decisions than in prior years: 4 (along with 2 in 1998), compared with 11, 9 and 5 in '97, '96 and '95, respectively.

3.  Speed in Resolving Cases

Another caseload-related matter is the speed with which the agency as a whole is resolving adjudicatory proceedings. Of the 12 cases referred to the Board prior to Labor Day in 1999, the Board and Commission had closed 3 by year's end -- 2 by settlement or withdrawal and 1 by denial of intervention. (These numbers compare unfavorably with those from the preceding three years: 12 of 15 such cases closed in 1998, 5 of 9 such cases in 1997, and 6 of 7 such cases in 1996.) However, the Commission should not read too much into these raw numbers. Neither the Commission nor the Boards can control many of the factors that govern the speed with which these 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 speed with which the agency decides cases will be viewed by some outside the Commission as a reflection of its level of emphasis on both the importance of adjudications and the need for their expeditious resolution. The Commission's continued 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 should assist in moving proceedings forward at the Board level. OCAA will continue to monitor the Board's adjudicatory caseload and be on the lookout for opportunities where the Commission may appropriately exercise its supervisory role.

The ASLBP has committed itself to issuing decisions within sixty days after the parties file their closing pleading. Similarly, OCAA has undertaken to complete its drafts of Commission decisions within 60 days of receipt of the final appellate document whenever possible, and more quickly than that whenever OCAA's resources and the nature of the issues permit. OCAA has been quite successful in this regard, getting its draft CLIs to the Commission an average of only 20 calendar days after receipt of the last salient document, with more than half submitted in less than a week. Only three draft orders (in Hydro Resources, IUSA and Zion -- all highly complex cases) took longer than 60 days to produce.

With the recent arrival of a much-needed third attorney, OCAA should be in an even better position than before to promptly provide the Commission with draft orders. Moreover, the streamlined procedural rules for hearings on license transfer applications under Subpart M promises rapid resolution of those cases as well. However, Subpart M applications could strain the recently-enhanced resources of OCAA if any of these proceedings actually go to hearing. (So far, none has.) This is because Subpart M contemplates that the Commission itself (rather than the Board) will in the first instance resolve contested applications on the merits, after a hearing, with OCAA ordinarily providing drafting assistance to the Commission.

4.  Future Agency Caseload

As OCAA noted in its 1998 Annual Report, we anticipate an increase in the number of adjudications involving reactor relicensing, reactor decommissioning,⁽¹⁾ and reactor license transfers. 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.⁽²⁾ With Phase I of the Hydro Resources proceeding winding down, the Commission will probably review fewer materials licensing LBPs and issue fewer such CLIs than in the recent past. Likewise, the Commission can expect a continued lower-than-average enforcement caseload.

Another factor that could affect the Commission's future caseload is the anticipated reform of the NRC's hearing process. The potential impact here is unpredictable. A reformed system may succeed in reducing threshold procedural disputes and winnowing out insubstantial claims -- thus saving adjudicatory time by the Commission and its staff. On the other hand, the Commission's current interest in moving toward more informal proceedings could generate additional proceedings and an increased workload, as members of the public become aware that participation in the NRC process need not be overly costly or complex.

SIGNIFICANT DECISIONS IN 1999

In 1999, the Commission issued the following CLIs addressing significant issues:

North Atlantic Energy Service Corp. (Seabrook Station, Unit 1), CLI-99-6, 49 NRC 201 (3/5/99), where the Commission for the first time set a Subpart M case for hearing and addressed numerous procedural issues of first impression.

Kansas Gas & Electric Co. (Wolf Creek Generating Station , Unit 1), CLI-99-19, 49 NRC 441 (6/18/99), in which the Commission concluded that the Atomic Energy Act does not require or even authorize antitrust reviews of post-operating-license transfer applications and further that such reviews are inadvisable from a policy perspective.

Hydro Resources, Inc., CLI-99-22, 50 NRC 3 (7/23/99), where the Commission upheld the Presiding Officer's rulings on waste disposal issues, historic preservation and performance-based licensing, and a portion of his rulings on financial assurance.

Duke Energy Corp., CLI-99-11, 49 NRC 328 (4/15/99), in which the Commission emphasized that contentions must rest on more than references to Requests for Additional Information issued by the NRC staff to the licensee.

SIGNIFICANT ISSUES CURRENTLY PENDING BEFORE THE COMMISSION

The Commission currently has before it two draft orders addressing significant issues. First, the Commission is considering a petition for review of a Partial Initial Decision in Hydro Resources Inc., LBP-99-13, 49 NRC 233 (3/9/99), raising issues of first impression regarding "financial assurance." Second, International Uranium (USA) Corp., LBP-99-5, 49 NRC 107 (2/9/99), addressing the definition of § 11e.(2) byproduct material under the Atomic Energy Act. OCAA also is reviewing a number of other pending appeals and petitions for review, including potentially significant ones in Hydro Resources (regarding LBP-99-18, -19 and -30), Private Fuel Storage and Sequoyah Fuels Corp.

SUMMARY OF ACTIVITIES OF THE ATOMIC SAFETY AND LICENSING BOARD PANEL

• The Board Panel issued 21 final decisions.
  
  
• The Board Panel established 12 new proceedings, 3 of which have been terminated.
  
  
• 16 cases were pending before the Board Panel as of 12/31/99:

Atlas Corp. (MLA-3)
Atlas Corp. (MLA-4)
Cabot Performance Materials (MLA)
Cabot Performance materials (MLA-2)
Carolina Power & Light Co. (Shearon Harris)
Fansteel, Inc. (MLA)
General Electric Co. (Vallecitos Nuclear Center)
Hydro Resources Inc. (in abeyance)
International Uranium (USA) Corp. (MLA-4)
International Uranium (USA) Corp. (MLA-5)
International Uranium (USA) Corp. (MLA-6)
Molycorp.
Northeast Nuclear Energy Corp. (Millstone, Unit 3) (LA-3)
Private Fuel Storage
Sequoyah Fuels Corp. (MLA-4)
U.S. Department of the Army

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-1999

CHART 5

COMMISSION DECISIONS ON ADJUDICATORY MATTERS -- CY-1999

1. Although the Commission by rulemaking has removed decommissioning itself from the adjudicatory process, the process of decommissioning nonetheless will likely "spin off" occasional 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).

2. For example, AmerGen Energy Company shows every indication of continuing its nuclear power plant buying spree -- it has already acquired TMI Unit 1 and Clinton in 1999 and is currently attempting three other acquisitions (Nine Mile Point, Vermont Yankee and Oyster Creek). Entergy Corporation (AmerGen's principal competitor in the nuclear reactor market) has announced that it expects to buy five more nuclear plants. And Constellation Energy Group (parent of Baltimore Gas & Electric Company) has indicated its intention to buy nuclear plants. These three (and other) potential buyers will have no shortage of plants on which to bid. Consolidated Edison Inc. announced in December that it is considering the sale of Indian Point Unit 2, and the New York State Power Authority announced in November that it is negotiating to sell both Indian Point 3 and FitzPatrick. Meanwhile, reactor licensees continue to merge or fragment at a rapid rate, with both actions requiring NRC approval. For instance, Carolina Power & Light Company plans to split itself into subsidiaries under a new holding company; PECO Energy Company has proposed to merge with Unicom Corp.; and Consolidated Edison is acquiring Northeast Utilities.

3. Includes all decisions or orders which are designated as either an "Initial Decision" or "Partial Initial Decision" on the merits of part or all of a case and are therefore subject to a petition for review; which terminate a proceeding and are therefore subject to a petition for review; or which deny party status to a person and are therefore subject to an appeal as of right.