33 LETTER: WISCONSIN PUBLIC SERVICE COMMISSION/ CHAIRMAN, AEC STATE OF WISCONSIN PUBLIC SERVICE COMMISSION, Hon. JAMES R. SCHLESINGER, Madison, Wis., October 18, 1971. Chairman, U.S. Atomic Energy Commission, GENTLEMEN: The purpose of this letter is to express our deep concern over the potential electric power shortage and realized and future increased cost of electric service facing the citizens and industries of Wisconsin due to delays in the availability of the Point Beach Power Plant-Unit No. 2 constructed by Wisconsin Electric Power Company and Wisconsin Michigan Power Company. As you know, issuance of an operating license for this plant is presently being contested by several interested groups. As the AEC liaison agency for the State of Wisconsin, we have been following the developments in this case and note the apparent lack of progress in resolving the important questions involved. This plant was originally planned for completion in the spring of 1971. Due to construction delays, the plant was rescheduled to be on line this fall. We understand that construction is now essentially completed and the plant has been ready for fuel loading since August 1971. We have reviewed the capability, demand and reserve data for the Wisconsin Upper Michigan System as projected into 1972. The utilities of this power pool serve the major portion of the State of Wisconsin. The capacity represented by Point Beach Unit No. 2 is required now to provide adequate reliable electric service at reasonable rates and will be urgently needed to meet the expected summer peak demands in the Midwest in 1972. Without this plant, critically deficient reserve margins will result and can seriously threaten power supply reliability in this area. The problem is compounded in that excess capacity available for purchases from neighboring systems is also expected to be in short supply. Another aspect of the problem that we view with considerable apprehension is the fact that each month of delay costs the company an estimated $1,500,000 in purchased power and related expenses. The additional costs will either be reflected in higher rates to the company's customers, adding to the already serious economic dilemma of the consumer, or reflected in further reductions in earnings of the companies, thus impairing their ability to secure capital required for meeting customers' requirements, environmental improvements and modernization at reasonable cost. Additionally, the installed cost of Point Beach Unit 2 is being increased monthly, because of delays in securing the operating license, by capital carrying charges of approximately $300,000. This additional recorded investment will increase the cost of providing service throughout the life of the plant through increased depreciation, property and income taxes, insurance, and return requirement. Further, the involved companies are currently carrying a nonproductive investment in fuel of $15,000,000 and incurring property taxes of $1,900,000 annually on the unusable plant. In view of the fact that Point Beach Unit 1 has been operating for approximately one year without demonstrated harmful effects, we urge that your Commission issue a temporary operating license for Point Beach Unit 2 at this time, with continuance of your present environmental investigations. Any changes required in plant construction and operation as a result of these investigations could be made upon completion of your investigation. If such action is not possible at this time in order to meet the requirements of Wisconsin citizens and industry for adequate reliable electric service at reasonable rates, we feel that every effort should be made to expedite your proposed licensing procedures so that the issues raised can be resolved at the earliest possible date so as to avoid the possibility of power shortages and protect electric consumers from present and future unwarranted increases in cost of electric energy. Very truly yours, WILLIAM F. EICH, Chairman. 34 REMARKS BY WILLIAM O. DOUB, COMMISSIONER, U.S. ATOMIC ENERGY COMMISSION AT THE 1971 ANNUAL CONFERENCE OF THE ATOMIG INDUSTRIAL FORUM, BAL HARBOUR, FLORIDA, OCTOBER 18, 1971 "THE RIGHT TO BE HEARD"-LAYING IT ON THE LINE It is a distinct honor and pleasure for me to be here today. The Forum brings together an unusually stimulating and perceptive segment of the nuclear community, and I look forward to meeting many of you personally. The topic for your symposium session is "The Crisis in the Licensing and Regulation of Nuclear Power Plants." While there may be divergent viewpoints as to the aptness of the word "crisis" for describing the present situation, there is an undeniable and widely shared concern as to the ability of the nuclear licensing process to cope with the demands which are being placed upon it-a problem to which I am devoting a substantial amount of my time together with my fellow Commissioners. At a time when the Nation is demanding more electrical power and when nuclear facilities are being called upon to meet a constantly mounting share of that energy demand, we have been encountering vexing and frankly untenable-delays in completing the licensing consideration of nuclear power plants. There is, to be sure, a complex mix of factors which enter into the overall "delay" picture. A full survey of these matters is plainly not feasible within the scope of my brief remarks this afternoon. Instead, following the enjoinder to "particularize," which I hope will soon become the hallmark of our licensing hearings. I am going to focus on one element in this mix, that of public participation in decisionmaking on nuclear plant siting, construction, and operation. This is not to imply that other important parts of the regulatory program are not receiving vigorous review, and I intend to comment briefly on some of these aspects also. So that there will be no mistaking the guiding premise of my approach to this subject, let me state my basic and fundamental belief at the outset. In my judgment there are sound practical and social reasons why the public properly claims and is afforded the right to be heard in our licensing proceedings. Public participation is a cornerstone of administrative law and is an inherent and necessary factor in the regulatory processes of a public agency such as the Atomic Energy Commission. As far as I am concerned, this right of the public to be heard is non-negotiable and should not be the subject of timeconsuming debate. For in the final analysis, it is the public which derives the very real benefits from the safe operation of well designed and constructed nuclear power plants and which must as a corollary of that benefit shoulder the associated environmental costs. I recognize that many thoughtful observers are disquieted by the fact that the systematic environmental inquiry, which is an integral part of the nuclear licensing process, is singularly absent (at least at the Federal level) when it comes to the construction of fossil-fueled plants which concededly have appreciable environmental consequences of their own. Some environmentalist and other concerned groups are seeking to fill this "gap," using legislation such as the National Environmental Policy Act (NEPA) to require broad-gauged environmental reviews in individual cases, like that of the Four Corners project in the Southwest. More broadly, power plant siting legislation now pending in the Congress would provide a national structure for thermal plant environmental reviews on an across-the-board basis. But whatever the future may hold in the non-nuclear sphere, in the nuclear area we are presently operating within the demanding framework of existing law, and of court decisions applying that law. The Calvert Cliffs decision,1 regardless of individual personal opinions as to its merits, leaves no doubt as to its "holding" and I believe that the AEC is being responsive to its clear definition of the agency's responsibilities under NEPA. Nuclear plants are now subject to a plenary environmental review prior to the issuance of a construction permit and then again before operation-and at each stage affected segments of the public have the legal right to be heard in a quasijudicial proceeding. Of course, as I am continually discovering, stating these obvious requirements is one thing; translating them into a viable regulatory process one which keeps step with a dynamic technology and equally dynamic social patterns is quite another matter. And nowhere is this more evident than with the hearing phase of the process. We are confronted today with formidable problems in restructuring our hearing procedures so as to meet not only our obligation to the participating public but also our responsibility to the general public-a responsibility to arrive at sound decisions in a timely fashion. This present broad-gauged AEC responsibility demands a total in-depth review of the AEC licensing program with equal attention to the past approach of industry intervenors, and the utilities in the process. My initial reaction-which is more than just an impression-is that there is need for considerable improvement across the board. The dimensions of problems are reflected in the increasingly lengthy proceedings which we are seeing in plant licensing. In some instances, hearing times are beginning to be measured in years not simply weeks or even months. Parenthetically, as we all know, the time factor between the filing of an application and the granting of a construction permit or operating license has been increasing in recent years of the average of something in excess of 20% annually. And a look to the future with the additional review responsibilities stemming from the Calvert Cliffs decision, serves only to underline the potential scope and the seriousness of these matters. 1 Calvert Cliffs' Coordinating Committee, Inc., et al v. United States Atomic Energy Commission, et al. (Nos. 24,839 and 24,871, D.C. Cir., July 23, 1971) What are some ways that the hearing procedures and the actual conduct of the hearings can be improved? This is the focus of our attention this afternoon. In approaching the matter, I should like to put to one side the legis lative proposals affecting plant siting-nuclear and otherwise—now before the Congress. We have, whatever their outcome, an independent administrative obligation to act now with the means we presently possess. Moreover, I am not disposed to be pessimistic about the possibilities for substantial progress through changes which are within our present capabilities: changes which build on concepts which have been subjected to intensive reexamination in recent months by the Commission. I would like to share with you some of these possibilities this afternoon. While the majority of my suggestions-particularly the ones for procedural change--are within the domain of the AEC, before I conclude these remarks I should like to discuss several suggestions for changes which the industry itself might undertake and also some observations for those environmental groups which have taken an active interest in our licensing proceedings. * * * Let me turn first to the licensing hearing itself, the ground rules under which it is conducted, and the role and responsibilities—of the respective parties in a contested proceeding. I see no inconsistency between active public participation in the decision-making process and the legal prerequisite that this participation take place in a reasonably ordered manner. Indeed, if it cannot, the concept of public participation will be on a collision course with another concept-that of the necessity for the administrative process to permit decision-making on a basis timely enough to serve vital public needs. I am not willing to concede that there is any inherent incompatibility between these two concepts. Hearings, of course, take time; but agencies, like courts, are not with out means to so structure a proceed. ing as to accomplish its purpose with the maximum possible dispatch. The Commission recently issued proposed amendments to its procedural guidelines (Appendix A to Part 2) which were designed to take account of the fact that reactor licensing had passed from an era of essentially uncontested hearings, where public education was a primary function of the licensing proceeding, to one contested hearings, where the settlement of disputed matters was the central purpose of our adjudicatory process. The recent Calvert Cliffs decision clearly called for a reexamination of the matters dealt with in those proposed guidelines; and we are now in the process of recasting them as well as some of the basic procedural rules in Part 2 itself to take account of Calvert Cliffs and also of suggestions received from industry, environmental groups, and some further thoughts of our own. I might add that we expect shortly to complete a new draft issuance of Part 2 and its appendix and that we plan to discuss our proposals with representatives of industry and environmental organizations and to assess their further comments prior to adoption of new procedures. As to our present thinking, let me outline briefly some of the procedural changes we are considering. Functionally, these changes are |