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UNITED STATESNUCLEAR REGULATORY COMMISSION

WASHINGTON, D. C. 20555

Mr. Byron S. GeorgiouDeputy Legal Affairs SecretaryState of California Governor's OfficeSacramento, Cali fornia 95814

Dear Mr. Georgiou:

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Thank you for your August 22, 1980 letter enclosing a copy of Mr. R. D.Hershey Jr.'s column "Washington Watch" which appeared on August 18, 1980in the New York Times. Mr. Hershey's statement that the "Commission'sAtomic Safety and Licensing Board is expected to recommend that thePacific Gas and Electric Com an be iven a license to load and test atp y glow power..." represents his own speculation of future events. He-oaen~ea~r-4he-NR4-siakf~~wr~he-Board&ha~u~ul eon&hi s

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B d Ii p -TNtgidthe NRC staff is requiring all applicants for new operating licensesto modify the design and operation of their nuclear plants to conform '~ ''i'~ p,to new, TMI-related, requirements. NUREG-0694, published in June 1980,identifies these requirements (as they apply to fuel loading and low r-.~0„~.power testing, and to full power licenses) and provides a schedule bywhich they must be implemented. A copy of this document is enclosed.

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~II~fgW-1 review the record The NRC staff has examined PG8E's conformanto NUREG-0694 requireme ts as they apply to fuel loading and low powertesting. As the Safety Evaluation Report (SER) Supplement indicates,while some low power te t items require final resolution (for instance,PGEE is awaiting the t sting of its plant operators and the factoringof the results of the equoyah low power tests into its testing program)the NRC staff believe that the application is substantially completedand that therefore t e Board and parties should begin the process ofconsideration of th adequacy of PG8E's low power test proposal.

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Mr. Byron S. Georgiou'I

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Hershey correctly notes,~the risk associated with low powertesting is extremely small '~p~m~ Moreover,, $ c 9<

+T the fission product inventory for such operation will be less than onetenth of one percent of that generated by the plant during one year ofoperation at full power. ~pwctll~ ~

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e e.l V p~dd:measure of assurance that the public health and safety will not be ,

piCi~i"'ompromised.As a party to the Diablo Canyon hearings, we are addressing

all of the matters you mention in your letter. I am confident that the $ 1

Hearing Board decision with respect to a fuel loading and low powerlicense request by PG8E will be based on a'fully developed record.

J4A4,I appreciate the spirit of cooperation expressed in your letter and would h

agree that'the task of keeping the public fully informed is not an easy >>pie)+one. Only a public better informed of the fact that the NRC is whollyneutral and is standing firm in applying the regulations to ensure thepublic health and safety, can provide the key to our mutual success forthe benefit of the nation, and the citizens in the state of California.

Sincerely,

Encl osur e iNUREG-0694

Harold R. Denton, DirectorOffice of Nuclear Reactor Regulation

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0DISTRIBUTION:Courtesy Copy . n >s '. Heltemes, AEOD

Docket File w/incoming OELD

NRC PDR w/incoming G. Ertter (EDO-9523)Local PDR w/incoming S. Cavanaugh (EDO-9523)EDO Reading E. HughesNRR Reading M. Fudge D. RossLB3 Reading J. Lee S. Hanauer

Mrm Byron S. Georgiou OELD KJabbour F. Schroeder

Deputy Legal Affairs Secretary D. Eisenhut R. Miraglia B. Shapar

State of California Governor's Office R P«pie H. Denton, W. DircksSacramento, California 95814 T. Novak E. Case

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Tedesco B. SnyderDear Mr. Georgiou: G. Lainas B. Gr imes

J. 01 s hins ki R. VollmerThank you for your August 22, 1980 letter enclosing a copy offer. R. D.Hershey Jr.'s column "Washington Watch" which appeared onPogust 18, 1980in the New York Times. Nr. Hershey's statement that the+Commission's oggAtomic Safety and Licensing Board is expected to recompound.that thepacific Gas and Electric .Company be given a license 1d load and test atlow power "..represents his own speculation of fuPire events. Hecannot speak for the NRC staff or for the Board hat must rule on thismatter.

Let me assure you that the NRC:staff .has abated and will continue to act'nfull compliance with the Nuclear Regula/tory Commission's rules, „

regulations and post-TMI guidance. Based on this post-TMI guidance,the NRC staff is requiring all applicynts for new operating licensesto modify the design and operation of'heir nuclear plants to conformto new, TMI-telated, requirements. NUREG-0694, published in June 1980,identifies these requirements (a they apply to fuel loading and lowpower testing, and to full powe licenses) and provides a schedule bywhich they must be implemente . A copy of this document .is enclosed.

Before the NRC staff can ipsue a license to the Pacific Gas and ElectricCompany (PGEE) to load fugal and conduct low power (below 5X,) tests atDiablo, each one of these requirements must be met, the Atomic Safetyand Licensing Board mqst rule favorably, and the Commission itselfwill review the record. The NRC staff has examined PGBE's conformanceto NUREG-0694 requir'ements as they apply to fuel loading and low powertesting. As the Safety Evaluation Report (SER) Supplement 'indicates,while some low ppi(er test items require final resolution (for instance,PGKE is awaiting the testing of its plant operators and the factoringof the result+of the Sequoyah low power tests into its testing program)the NRC sta believes that the application is substantially completedand that t erefore the Board and parties should begin the process ofconsiderat on of the adequacy of PGSE's low power test proposal.

OFFICE PSURNAME

OATEINRC FORM 318 (9-76) NRCM 0240 O'U.S. GOVERNMENT PRINTING OFFICE: 1979.289-369

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Hr. Byron S. Georgiou

As Hr. Hershey correctly notes, the risk associated with low powertesting is extremely small as discussed in our SER supplement. Horeover,the fission product inventory for such operation will be less than onetenth of one percent of that generated by the plant during one year ofoperation'at full power.

4

It is my belief that the adjudicatory process itself provides an additionalmeasure of assurance that the public hea'ith and safety will not becompromised. As a party to the Diablo Canyon hearings, we are addressingall of the matters you mention in your letter. I am confident that theHearing Board decision with respect to a fuel loading and low powerlicense request by PGBE will be based on a fully developed record.

'appreciate the spirit of cooperation expressed in your letter and would

agree that the task of keeping the public ful"!y informed is not an easy,one. Only a public better informed of the~fact that the NRC is whollyneutral and is standing firm in applyingithe regulations to ensure thepublic health and safety, can provide the key to our mutual success forthe benefit of the nation, and the citizens in the state of California.

/: Sincerely,

Enclosure;NUREG-0694

Harold R. Denton, DirectorOffice of Nuclear Reactor Regulation

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WITED STATESNUCLEAR REGULATORY COMMISSION

WASHINGTON, D. C. 20555

Note to: Kahtan Jabbour

LETTER ON DIABLO CANYON TO BYRON GEORGIOU

I have reviewed the letter proposed to besent to Byron S. Georgiou and concur sub-ject to the replacement of the firstsentence in para. 3 p. 1 with the following:

Before a license to load fuel andconduct low power (below 5/) testscan be issued to the. Pacific Gasand Electric Company, the NUREG-0694requirements must be met and theissues now pending before the AtomicSafety and Licensing Board,and theAtomic Safety and Licensing AppealBoard must be resolved.

In addition, I have sent the package toTom Rehm to consider whether the EDO shouldsign the letter since it refers to mattersdiscussed in a meeting th the EDO.

W lliam J. Olmstead

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FROM:

Byron S. GeorgiouDeputy Legal Affairs SecreState of Cal'ifornia

To'

Ilil1 i am Dircks

ACTION CONTROL DATESCOMPL DEADLINE 9 /80ACKNOWLEDGMENTINTERIM REPLY

FINALREPLY BFILE LOCATION ~ /

09523DATE OF DOCUMENT

3$ 2gR 8/22 8PREPARE FOR SIGNATUREOF:P CHAIRMAN0 EXECUTIVE DIRECTOR

DESCRIPTION Q LETTER 0 MEMO Q REPORT p OTHER

Comments re article from the New YorkTimes portraying NRC staff as advocates oflicensing Diablo Canyon to load and testat low power

SPECIAL INSTRUCTIONS OR REMARKS

DOCUMENT/COPY NO.

iVUMiBEROF PAGES

POSTAL REGISTRY NO.

CLASSIFIED DATACLASSIFICATION

CATEGORY

0 NSI QRD 0 FRD

ASSIGNED TO: DATE INFORMATIONROUTING LEGALREVIEIN 0 FINAI. 0 COPY

E hut826 80 Shapar

DentonCase

'nyder

Grimes

RossHanaueSchroe

ASSIGNED TO: DATE NO.LEGAL OBJECTIONSNOTIFY:

0 EDO ADMINCI CORRES BREXT.

COMMENTS, NOT IFY:

EXT.JCAE NOTIFICATIONRECOMMENDED: 0 YES Q NO

NRC FORM 232(11 75)

EXECUTIVE DIRECTOR FOR OPERATIONS

PRlNCIPAL CORRESPONDENCE CONTROLDO NOT REIi1OVE THIS COPY

FROM

Byron S. GeorgiouDeputy Legal Affai,rs SecreState of California

ACTION CONTROL

COMPL DEADLINE

ACKNOWLEDGMENTINTERIM REPLY

DATES

9/ 80CONTROL NO

09523DATE OF DOCUMENT

@RgR 8/22 8TO:

William Dircks FINAL REPLY

FILE LOCATION ~ I .M

PREPARE FOR SIGNATUREOF:

Q CHAIRMANQ EXECUTIVE DIRECTOR

DESCRIPTION Q LETTER Q MEMO Q REPORT Q OTHER

Comments re article. from the New YorkTimes portraying NRC staff as advocates oflicensing Diablo Canyon to load and testat low power

SPECIAL INSTRUCTIONS OR REMARKS

DOCUMENT/COPY NO;

'IUMBER OF PAGES

POSTAL REGISTRY NO.

CLASSIFIED DATACLASSIFICATION

CATEGORY

Q NSI QRD Q FRD

I

t

ASSIGNED TO: DATE INFORMATIONROUTING LEGALREVIEW Q FINAL Q COIY

E hut826 80 Shapal

RoDenton

~.... HanauerSchroe

SnyderGrimes

ASSIGNED TO: DATE NO,LEGAL OBJECTIONSNOTIF Y:

Q EDO ADMIN4 CORRES BREXT.

COMMENTS, NOT IF Y:

EXT.

Q YES Q NOJCAE NOTIFICATIONRECOMMENDED

IIRC FORM 232(11-75)

IEXECUTIVE DIRECTOR FOR OPERATIONS DO IVOT REMOVE THIS COPY

PRINClPAL CORRESPONDENCE CONTROLF

oe

4 ~.~aiiot+'hrs

af SnlifoI.aimGOVERNOR'S OFFICE

SACRAMENTO 95814

EDMuND G. BROWN JR.COVKRNOR

916/445-0873

August 22, l980

William DircksExecutive Director for OperationsU. S. Nuclear Regulatory CommissionWashington, D. C. 20555

Dear Bill:Enclosed is a c'lip on Diablo from the New York Times thatappeared on Monday, the day we met. I guess Hershey reads the;,present staff response to PGGE's low power application the samj,way I do, as recommending-fuel. loading and low power testing eventhough the seismic, security, and emergency planning issues remainunresolved.

With all respect, stories like this one, which portray the NRCstaff as advocates of licensing Diablo despite significant,deeply troubling, unanswered safety questions, diminish the al-ready tarnished post-TMI reputation of the agency. Publicityof this nature makes much more difficult our mutual task ofconvincing the affected California public that the NRC views itsmission as ensuring that nuclear power production only occur un-der circumstances that do not compromise the general health andsafety, and operates through a staff wholly neutral and dis-interested in whether a particular proposed plant, such asDiablo, is or is not ultimately licensed.

I send this letter in a spirit of cooperation as we continue towork together during the course of this proceeding as therespective designated representatives of the citizens of ournation and my state.

I look forward to seeing you again soon.

Sincerely,

Byron S. GeorgiouDeputy Legal Affairs

Secretary

Enclosurecc: Howard Shaper, Executive Legal Director

Harold Denton, Director of Nuclear Reactor Regulation

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D2 THB NBW YORK TIMBSp MONDAY, AUGUST 18, 1980l

OD. s'obertD. Hershey Jr.

:='he Magnet'-For-Lobbyists,o „4

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WASHINGTONHE Federal work force may have stopped.growing, but the Government's vast fmpact onbusiness continues to act as a magnet forlobby-

~. Jstsand other representatives ofspecial interests.'t: ~ Wasldngton now contains the headquarters of far

; ': more trade and professfonal associations than any: ',"'"other dty, and one or two new ones arrive every

-"";~t"week.About 2,000 assodatfons employing at least

50,000'eople

stand guard here over their particular fnter-'t .~ests, turning Washington from a "on~mpany"

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town fnto a corporate stamping ground. Three years'.ago there were 1,700 assocfatfons employing 42,600

people, according to a conservative estimate by the: ~ Greater Washfngton Board ofTrade.

,",.„. "The main attraction Is the lobbying," a Board ofTrade official declared. "The Government in thepast decade has gotten more and more fnto regulat-

et "fngprlvateenterprlseof aH kinds."

.'.I Much of Washington's gain is at the expense ofNew Yoik,which skidded to second place In the mid-

' '1970 se

The foHowfng table shows how the actfon has~ .---shifted to Washington, by percentage of assocfa-

, tfons:1972 1974 1978 1980

Washfngton . 24 24 27 28

New York ~ 26 25 22 21

It . Chicago - - 16 17 16 14.Elsewhere 34 34 35 37

Meanwhfle, the share of the labor force employedby natfonal, state and local government fn the Wash-

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.r'ngton

area has fallen fmm about one;third to littlemore than oneNquarter;

Better HousekeepingNobody fs saying the Government's cash manage-

ment willnow be as effident as, say, Exxon's. But athree-year proJect to collect debts quicker, put idlemoney to work and stop paying bHls early may saveUncle Sam as much as $1.14 bHHon a year.

A joint Federal and privatmector task force hasmade more than 80 adminfstratlve improvements at20 departments and agencies to streamline the han-dling of money. This has led to savings of more than$450 milliona year ln interest payments, assuming arate of 7 percent.

In addftfon, the Government hopes to save $695mfflfonmore a year by speeding collection of tax re-ceipts. Legisla on for much of tlds, however, fs un-certain becaus of opposHion from major companiesand individuals who know how to use a sharp pencHthemselves.

One of the key measures adopted was torequire'he

biggest 4 percent ofemployers to make more fre-quent deposits of withheld income taxes, begfrudngJan. 1, 1981.

The only significant item directly affecting indi-viduals Is a proposal to raise to 85 percent from 80percent the portion of total tax HabHitfes that mustbe covered by estimated payments. But an Office o!Management and Budget offfdal conceded that thishad only a "slim chance" of being passed. Becauseoutside volunteers were used, the cost of the cashmanagement project was heId to $500,000.

Diablo Canyon TestThe Nudear Regulatory Commission, no stranger

to controversy, may be stlddng fts neck out again,'e commission's Atomic Safety and LicensingBoard fs expecteff shortly to recommend that the Pa-dffcGas and Electric Com any be@van.alfcen~se oIo~aand„tgSt aQovt.pow new nuclear 'units atDiablo Canyon, Calif., near the Hosgri Fault, +forequestions of seIsmic safetK andyecurfty pmceduresa ratstelBVA~nappe paneott rhe commtsston hasrecently reopened hearings on these fssues,

Opponents of the Diablo Canyon instaflatlon, one ofwhose two mdts has been awaiting operating lfcensesforabout fiveyears, say granting a low-power test H-

- cense is risky 'and virtually irreversible. 33ut~ecommhsfon staff Qdnks the testing.shoul~droceed."The rlsSlnvotved at tow-power operattons are ea.tremelysmaH," oneoffldal insisted.

Briefcaseso The CivilAemnautfcs Board has removed, effec-

tive Sept. 6, aH restrictions on chartered cargofllghts. In addition, charters of cargo on scheduledflightwillbe permitted.

o The renomlnatfon of John Truesdale to the Na-tional Labor Relations Board, opposed by businessgroups, maybe filibustered in the Senate.

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