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UNITED STATES y
NUCLEAR REGULATORY COMMISSION w AsHINGTON. D.C. 20$55
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OPPICE OF THE
' February 26, 1982 comissl0NER MEMORANDUM FOR:
SAMUEL J. CHILK SECRETARY FROM:
William J. Manni
SUBJECT:
DIABLO CANYON MATERIAL FALSE STATEMENT Please serve Commissioner Gilinsky's additional views on the Diablo Canyon material false statement (attached) on the parties to this case.
Please insure that these views are printed with the Commission's February 10, 1982, decision in the NRC Issuances.
Attachment cc:
Chairman Palladino Commissioner Bradford Commissioner Ahearne Commissioner Roberts OGC OPE I
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION f
COMMISSIONERS:
Nunzio J. Palladino, Chairman Victor Gilinsky Peter A. Bradford John F. Ahearne Thomas M. Roberts
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In the Matter of
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PACIFIC GAS AND ELECTRIC CO. )
Docket No. 50-275 0.L.
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50-323 0.L.
(Diablo Canyon Nuclear Power )
Plant, Units 1 & 2)
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ADDITIONAL VIEWS OF COMMISSIONER GILINSKY REGARDING PACIFIC GAS AND ELECTRIC'S MATERIAL FALSE STATEMENT On February 10, 1982, the Nuclear Regulatory Commission charged Pacific Gas and Electric with making a material false statement in discussions of the Diablo Canyon seismic design with the NRC.
The Commission's Order was brief to the point of being telegraphic, and I sense that the public was left wondering about the Commission's finding as well as its significance in view of the com ission's failure to impose a civil penalty.
What follows is my own view of the matter:
Last September, PG&E informed the NRC that errors had been discovered in the seisnic design of the Diablo Canyon nuclear power plant, which had just received NRC permission for tent and low power operation.
The NRC suspended the low
power license and required a reverification of the plant's seismic design.
On November 3, the NRC met with PG&E officials, led by the Company President, Barton W.
Shackelford, and with PG&E's consultant, Robert L. Cloud, to discuss the seismic reverification program being conducted by Dr. Cloud's firm.
As a result of questi'ons raised by other parties to the case and in Congress, NRC was becoming increasingly interested in the extent to which Dr. Cloud's review would be conducted independently of PG&E.
The Company naturally had a strong interest in emphasi:ing Dr. Cloud's independence since NRC's early acceptance of him as an independent reviewer might have speeded up the reverification program which stood in the way of the power plant's startup.
At the meeting, Harold Denton, NRC's Director of Nuclear Reactor Regulation, asked whether NRC would receive the same i
reports which Dr. Cloud gave to PG&E.
George Maneatis, a PG&E Senior Vice President, responded "You just got it.
And i
I have to say, Mr. Denton, that some of these things have just been disclosed to me, so you got it almost the same time I did."
Bruce Norton, PG&E's attorney in the Diablo Canyon case, stated "I night add we do not have it (Cloud's report).
It's not a question of us reviewing it.
We don't have it w
l either.
It just hasn't been done yet...."
He then added, with considerable force, "I frankly resent the implication that Dr. Cloud is not an independent reviewer because he is...The report itself hasn't been prepared.
If you want a copy of it before we get it, fine, or simultaneously.
It is an independent consultant, and you know, I don't know how we can show you that more than to give you the reports when they are prepared."
In fact, as NRC pieced together later, at the time these statements were made PG&E had aircady reviewed and commented on two separate drafts of Dr. Cloud's report and, unbeknownst to NRC, was about to receive the third d. raft.
The NRC's subsequent investigation revealed that six of the PGLE officials at the November 3 meeting, including Donald A. Brand, the Vice President of Engineering, who was responsible for handling the Cloud contract, knew of PG&E's review of the Cloud reports.
The Company's officials failed to correct the false statements made in the meeting.
Perhaps more importantly, neither the Company nor Dr. Cloud corrected these statements after the meeting although they had ample opportunity to do so.
Mr. Norton, who had insisted et the November 3 meeting that PG&E had no access to Cloud's reports, told NRC investigators that he did not learn about drafts of the Cloud repcrt submitted to PG&E until Decehber 14.
He had
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asked PGEE before the November 3 meeting about the status of l
Cloud's report and was apparently misinformed by his clients.
He told the NRC investigators that. "If I had 4
i known the report of October 21st had been received by PGEE, I would not hdve said what I said because when I used the term report, I was encompassing any report whether it be preliminary, interim, final, whatever..."
Mr. Maneatis told the NRC investigators that, at the meeting, he was referring to Dr. Cloud's oral report of November 3 to the NRC.
Mr. Maneatis explained that he did not know that PG&E had received written drafts of the Cloud report until he was told of such reports by the NRC on j
December 10.
The other PG&E exployees and Dr. Cloud have l
i' said that they assumed that the questions raised related to the final report, not to the draft reports.
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This last artificial distinction won't wash.
Even PG&E's General Counsel, Malcolm Turbush, agreed that the Company's a
statements "appear to be incorrect" and said that, "Had I j
known about those reports, I would have said something at the meeting."
In fact, in this context, the draft reports are inherently more significant; it is the drafting which i
determines what will be emphasized and what will not.
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Where does this leave us?
It is troubling that a company 4
4 which seeks permicsion to operate nuclear power plants j
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should be so insensitive to its obligation to inforn federal 4
regulators-and the public.
The issue is not the circulation of the reports but the false portrayal of PG&E's n
relationship with Dr. Cloud's firm.
When we grant a utility the authority to operate a nuclear power plant we must be confident that its officials will be forthright with us.
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l That is why the Commission's finding that PG&E had made a i
material false statement is so important, j
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.i I would have gone beyond the terms of the Commission's Order and i posed a civil penalty to underline the seriousness j
with which the Commission views PG&E's actions.
1 Nevertheless, the Commission did require the top management i
of PG&E to meet with NRC officials to discuss ways of i
ensuring that this problem will not recur.
A meeting I
between the Chairman of the Board of PG&E and the NRC l
Director of Inspection and Enforcement and the NRC Regional Administrator is scheduled to take place in the near future.
F PGEE should lose no time in acting to restore confidence in 4
its integrity.
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As for Dr. Cloud, we cannot, in my view, simply ignore the 1
i f.act that he also had an obligation to inform the NRC that 1
l his draft reports were being reviewed by PG&E.
Again, it is not the circulation of the report which is of concern, but I
j the failure to disclose the interactions between Dr. Cloud's
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firm and PG&E when the question was raised by NRC.
The only 4
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t reasonable course, at.this point, is to regard his report t
l as, in effect, a PG&E report and to look to someone else to i
perform the independent audit of the revarification program.
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