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Dr. Harold R. DentonSeptember 28, 1979Page Two

Report-Construction Permit Stage, which contained a discussionof the Company's need for the proposed plant. Following thepreparation and distribution of a draft environmental impactstatement, the NRC staff issued a Final Environnental Statementon the application in March, 1975. In its FES, the staff founda need for the applicant to provide an additional 2240 MWe ofgenerating capacity to its service area. The staff also stated:

If developments in the next year or two were toindicate tentative demand projections to be too high,the applicant could stretch out the plant construc-tion schedule, if desired, with insubstantial costpenalty inasmuch as the increased interest chargasof a longer schedule would tend to be compensatedby the savings in construction costs due to anearlier starting date, since construction costs areprojected to increase rather sharply during the nextseveral years. Finally, even if conservation ofenergy measures are effective in reducing the demandfor electricity in the 1980's, adding nuclear capa-city is desirable in order to reduce the amount offuel consumed by gas- or coal-fired units, thusincreasing the availability of that resource forwhicn there are no available substitutes. (Emphasisadded.)

NUREG-75/Oll at page 8-16.

An Atomic Safety and Licensing Board was designatedto conduct hearings on the application, which was contasted byseveral intervenors. The Missouri Public Service Commissionbecame a party to the proceeding pursuant to 10 C.F.R. S 2.715 (c) .Among the contentions raised by the intervenors were allegationsthat in various ways the applicant's and the staff's assessmentsof the need.for the proposed facilities were inadequate. In itsPartial Initial Decision-Envircraental and Site Suitability Deter-minations, the Licensing Board found that applicant's load fore-cast was reasonable, and that construction of the plant foroperation on the schedule proposed was required to rueet theneed for electric power. LBP-75-47, 2 N.R.C. 319 at 327, 340(1975). Pursuant ta 10 C.F.R. S 50.10 (e) (1) , a Linited WorkAuthorization was issued on August 14, 1975, and constructionbegan shortly thereafter.

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Dr. Harold R. DentonSeptember 28, 1979Page Three

In its Initial Decision (Construction Permit) , LBP-76-15,3 N.R.C. 445 (1976), the Licensing Board authorized the issuanceof construction permits, and on April 16, 1976, ConstructionPermits CPPR-139 and CPPR-140 were issued to Union ElectricCompany for Callaway Plant, Units 1 and 2. No appeal was takenfrom the Licensing Board's findings on the need for the plant,and in its reviewing decision, ALAB-347, 4 N.R.C. 216 (1976), theAtomic Safety and Licensing Appeal Board found no errors en thisissue warranting correction. 4 N.R.C. at 223, n.15.

Union Electric Company also filed in 1974 an applicationwith the Missouri Public Service Commission for permission andauthority to construct, operate and maintain the twc-unit Calla-way Plant. Pursuant to state law, the PSC must give its permis-sion and approval before an electric utility may begin construc-tion of an electrical plant. In addition, the PSC must approveall financings issued by the Company for the construction of aplant.

In hearings on the application before the PSC, theCompany's load projections were challenged by intervenors andby the PSC's staff. In its Report and Order of March 14, 1975,in Case No. 18,117 (a copy of which apparently was attached tothe instant Request), the PSC found that the Company's forecastsof peak load demand were reasonable, and that the proposed plantwas needed if the Company is to continue to meet the electricalneeds of its customers. Slip op. at 24. The PSC, in that Reportand Order, authorized Union Electric Company to construct,operate and maintain Callaway Plant, Units 1 and 2. The PSC'sReport and Order was affirmed in subsequent judicial review pro-ceedings. See State ex rel. Utility Consumers Council of Missouriv. Public Service Commission of Missouri, et al., 562 S.W.2d68d (Mo. Ct. App. 1978), cert. denied, U.S. 99 S.Ct.,192 (1978).

II. Status of Callaway Plant, Unit 2

When the Atomic Safety and Licensing Board made itsfindings on the need for the Callaway Plant, Unit 2 was scheduledfor commercial operation on April 1, 1983. The projected com-mercial operation date for Callaway Plant, Unit 2, now is April 1,

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Dr. Harold R. DentonSeptember 28, 1979Page Four

1987. This adjustment in the construction schedule for Unit 2was announced by the Company on February 11, 1977. The Commissionwas advised of this change in the letter from Mr. Bryan (UE) toMr. Rusche (NRC) of February 15, 1977 (ULNRC-183).

Callaway Plant Unit 2 construction is presently 0.7%complete. Construction expenditures for the unit throughJune 30, 1979, exclusive of nuclear fuel charges, were approxi-mately $40 million.

In October, 1979, Union Electric Company will file withthe NRC an mnendment to its application which will seek theissuance of an operating license for Callaway Plant, Unit 1.Recognizing the extended construction schedule for Unit 2, theCompany is limiting its submission on that unit to the techni-cal information required for the staff's safety review and theenvironmental information necessary to consider, in evaluatingthe Unit 1 application, the combined environmental effects ofa two-unit plant. An operating license for Unit 2 will be soughtat a later date consistent with the scheduled completion of con-struction of that unit.

III. Standards Relevant to the Request *

In its Request of August 14, 1979, the Missouri PublicService Commission seeks the initiation of a proceeding pursuantto 10 C.F.R. S 2.202 to issue a shcw cause order to suspendConstruction Permit CPPR-140 for Callaway Plant, Unit 2. Asgrounds for its request, the PSC states that a preliminary re-port by the PSC's staff indicates the peak demand forecast ofthe Ccmpany may be in serioua error. The PSC staff's forecastof the Company's peak demand in 1987 is 7030 MW. The Company'sown forecast of the most likely peak demand in 1987 is 7790 MW(the PSC staff's report erroneously states the Company's fore-cast to be 7930 MW).

The standards applicable to a request to suspend a con-struction permit on the basis of a revised load forecast werewell stated in the April 13, 1979 Director's Denial of a 10 C.F.R.S 2.206 request to suspend Georgia Power Company's constructionpermits for the Alvin W. Vogtle Nuclear Plant, Unit Nos. 1 and 2,docket nos. 50-424 and 50-425. As the Director there stated,

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Dr. Harold R. DentonSeptember 28, 1979Page Five

the question of need for the generating capacity of a nuclearpower plant is relevant to the Commission's responsibilities underthe National Environmental Policy Act of 1969, where it mustbalance the benefits of its actions (here, the electricity tobe generated) against the environmental costs. Director'sDenial in Vogtle, 9 N.R.C. (1979), slip op. at 2,3.

The NRC's staff and the Atomic Safety and LicensingBoard, in the proceedings described above to consider the Com-pany's construction permit application, found that the electricityto be generated by Unit 2 of the Callaway Plant is needed, and thatits benefits outweighed the environmental costs. This finding,undisturbed by the Atomic Safety and Licensing Appeal Board, re-presents the Commission's final action on the question, reachedthrough its adjudicatory process. The PSC now seeks to revivethe question of the "need for power" from Callaway Plant, Unit 2outside of the context of a construction permit or operatinglicense proceeding on that unit. The implication in the PSC'sRequest is that circumstances have changed so dramatically sincethe Commission issued the construction permit for Unit 2 thata new proceeding should be held to consider the issue of its need.

NEPA does not require that decisions based on environ-mental impact statements be reconsidered whenever informationdeveloped subsequent to the action becomes available. OgunquitVillage Corp. v. Davis, 553 F.2d 243 (1st Cir. 1977). While theCommission clearly has the authority to reconsider its decision,it is unnecessary for an agency to reopen the NEPA record unlessthe new information would clearly mandate a change in result.Greene County Planning Board v. Federal Power Commission, 559F.2d 1227 (2nd Cir. 1976), cert. denied, 434 U.S. 1086 (1978).Here, even accepting for the moment the validity of the PSCstaff's preliminary forecast, the disagreement in 1987 peakdemand is only 760 MW, whereas this 1150 MW facility, if itis *_ censed tc do so, is expected to operate for over 30 years.This new information, then, would nut clearly mandate a changein the Commission's decision and does not justify the reopeningof the NEPA record.

The PSC asserts, in its Request, that "the requestedsuspension will not act to the detriment of the Company." Wedisagree; but, in any case, the burden here is on the movingparty to persuade the Commission, after a decision has been

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Dr. Harold R. DentonSeptember 28, 1979Page Six

rendered, to reconsider the need for power issue on the basisof new evidence. This burden has been described by the AtomicSafety and Licensing Appeal Board as a " difficult" one. Cleve-land Electric Illuminating Company, et al. (Perry Nuclear PowerPlant, Units 1 and 2) ALAB-443, 6 N.R.C. 741, 750-751 (1977)(denying a motion to reopen the record on need for power) . It isnot the Company's burden to prove that it would not be harmedby the requested suspension. Here, the moving party has not metits burden.

IV. Conclusions and Recommendations

The PSC, as we have stated above, issued a certificateof public convenience and necessity for Callaway Plant, Unit 2.The PSC, as stated at page 3 of its Request, asserts the authorityto withdraw the certificate upon a finding that Unit 2 is notneeded to maintain the Company's electric plant for safe andadequate service at reasonable rates. The PSC, upon its ownmotion, has ordered an investigation and set hearings on theCompany's generation expansion program. The hearings are tocommence on April 7, 1980. In view of the preliminary natureof the PSC staff's report and the schedule set by the PSC toconsider the matter, it is unclear, from the body of the Request,why this Commission should be asked at this time to suspend theconstruction permit for Callaway Plant, Unit 2.

Nevertheless, the Commission has given " great weight"to evidence introduced by a state public utilities commission,recognizing the expertise of such bodies and their legal dutyto insure that the utilities within their jurisdiction fulfillthe legal obligation to meet customer demands. See CarolinaPower & Light Company (Shearon Harris Nuclear Power Plant, Units1, 2, 3 and 4), ALAB-490, 8 N.R.C. 234, 240-241 (1978), aff'd,CLI-79 __, 9 N.R.C. (May 2, 1979) (denying motion to reopenrecord on need for power). Here, if the Missouri Public ServiceComission decides to rescind the certificate it issued forUnit 2, the question will be decided and there would be nopurpose served by a reopened NEPA proceeding to duplicate thelitigation in both state and federal forums.

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Dr. Harold R. DentonSeptember 28, 1979Page Seven

In a similar case, Rochester Gas and Electric Corpora-tion, et al. (Sterling Power Project, Nuclear Unit No. 1),ALAB-502, 8 N.R.C. 383 (1978), the Atomic Safety and LicensingAppeal Board was asked to reopen the record on need for poweron the basis of a new state report indicating lower demandgrowth. Similarly, the New York State Board on ElectricGeneration Siting and the Environment, which earlier had issuedthe requisite state certificate for the plant, had entered anorder directing a reopening of its proceeding to reconsider theissue of the need for the plant. 8 N.R.C. at 387-388. The AppealBoard, while noting that it was under no legal compulsion to doso, decided to withhold its own decision on the need for powerquestion to await the siting board's ruling:

[I] t appears to us that little useful purpose. . .would be served were we now to undertake a duplicationof the inquiry being made by the State body into thesignificance of the disclosures in the Section 149-breport. We have been given no cause to believe thatthe siting board . lacks either the capability. .or the willingness to explore the matter thoroughlyand to make an informed judgment on it.

[A]lthough in many situa' ions a deferral of. . .one licensing body's decision to await that ofanother might cause prejudicial delay, we perceiveno significant risk of that happening in this instance.

Once the siting board has ruled, we will expectthe applicants promptly to bring its decision to ourattention. Should the decision be adverse to theapplicants (and not overturned on any subsequentjudicial review which might be available), that mostlikely would be the end of the matter. For, accordingto our understanding of New York law, the grant bythe siting board of a certificate of environmentalcompatibility and public need is a condition precedentto plant construction no matter what this Commissionmight conclude regarding the need for the plant.

8 N.R.C. at 388-389 (footnote omitted).

We believe that the situation is the same in Missouri,that the principles articulated by the Appeal Board in Sterlingare wise, and that the Director should apply them to the instantrequest by the Missouri Public Service Conmission.

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Dr. Harold R. DentonSeptember 28, 1979Page Eight

Union Electric Company recommends that the Directordefer any ruling on the Request under 10 C.F.R. S 2.206 until theMissouri Public Service Commission reaches its own determination,in the proceeding it has initiated, on Callaway Plant, Unit 2.

Sincerely,

L4AXGerald CharnoffThomas A. Baxter

Counsel for Union Electric Company

cc: Mr. John K. BryanVice President, NuclearUnion Electric CompanyP.O. Box 149St. Louis, Missouri 63166

Mr. Nicholas A. PetrickExecutive DirectorSNUPPSP.O. Box 60715740 Shady Grove RoadGaithersburg, Maryland 20760

Mr. Terry RehmaA-95 CoordinatorOffice of AdministrationDivision of State Planning & AnalysisP.O. Box 809, State CapitolJefferson City, Missouri 65101

Treva J. Hearne, Esq.Assistant General CounselMissouri Public Service CommissionP.O. Box 360Jefferson City, Missouri 65101

Honorable Paul H. MurphyPresidinq JudgeCallaway County CourtFulton, Missouri 65251

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Dr. Harold R. DentonSeptember 28, 1979Page Nine .

EIS coordinator, Region VIIU.S. Environmental Protection Agency1735 Baltimore AvenueKansas City, Missouri 64108

Mr. Norton SavageEconomic Regulatory AdministrationPower Supply & Reliability DivisionU.S. Deparment of Energy (RG-752)1726 M Street, N.W., Room 850Washington, D.C. 20036

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