First, I asked him the status of DOJ's request that the
Commissioners be available for Grand Jury testimony on
October 3 & 4, 1985. He advised me that those dates were
out, because of problems with the Grand Jury. He further
advised me that the situation was the same now as it was on
September 11 when we last spoke: no decision had yet been
made regarding whether to call the Commissioners before the
Grand Jury. He assured me again (as he had on 9/11) that he
would give the Commission enough advance notice so that the
Commissioners could, if they so desired, discuss the matter
directly with appropriate levels at the Department of
Justice. He made it clear that in his view such a
discussion was to be a direct NRC/DOJ discussion without any
outside political pressure. I told him that that was all
anyone at the Commission had ever suggested to me.
informed me that he would be discussing with Barry Blyvus,
the decision not to call the Grand Jury for October 3 & 4.
He also asked me to request SECY to seek from the
Commissioners a range of dates in October when they would be
available to testify before the Grand Jury, if his decision
were to have them do so. I assured him that I would pass
that information along to SECY. I advised him that the
Chairman and Commissioner Bernthal would be in Europe from
Wednesday, September 18 to approximately October 2.
Accordingly, I advised him that it would not be

He

inconvenient, from the Commission's perspective, for him to
take until at least October 2 to decide whether he wanted
the Commissioners to testify before the Grand Jury.
seemed happy to be able to have the extra time.

He

Secondly, I read to John the letter confirming our
September 11 telephone discussion regarding the enforcement

2

matters which the Commission is sitting on because of the Grand Jury investigation. He assured me that letter was perfectly appropriate and he would have no objection at all to receiving it. He also advised me to add a sentence to the letter stating that "you have advised me that you will be responding with your views in the near future."

Third, John asked me whether I had sent him the memo to file which I had received from Mac Cutchin. I told him that I had sent the memo by express mail yesterday afternoon, September 16, 1985.

Mr. GEJDENSON. I yield to the gentleman from Oregon, Mr. DeFazio.

Mr. DEFAZIO. Thank you, Mr. Chairman.

I would like to go back to Chairman Zech and pursue a statement with which certainly I would agree, but I just want to examine the performance of the agency in a particular instance. That was where you talked about keeping the industry at arms length. I would like to pursue Appendix R, the Fire Protection Standards, a little bit.

I realize that some of this predates your service on the Commission and I would certainly ask Mr. Asselstine or anyone else who was there at the time to either augment or supplement or, if they feel it necessary, correct their answers.

Again, this predates your time, but the NRC did issue a final rule, appendix R to part 50, 1981. That basic fact we can agree on. Mr. ZECH. Yes, sir.

Mr. DEFAZIO. And the rule established fire safety standards for nuclear powerplants and, for the most part, I would assume that this rule was promulgated in response to the Browns Ferry fire; is that correct?

Mr. ZECH. Yes, sir. That is correct.

Mr. DEFAZIO. Now, the Browns Ferry fire, I guess, when you compare accidents, probably it has been eclipsed by Three Mile Island, but it certainly was a very serious occurrence and we did. have a problem of near criticality and potential disastrous consequences at that time. So it was serious rulemaking.

Mr. ZECH. Yes, sir.

Mr. DEFAZIO. The NRC proposed regulations and received public comments before the final rule was issued. That is normal procedure. And a number of utilities brought a lawsuit to contest that rulemaking; is that correct?

Mr. ZECH. Yes, sir. That is my understanding.

Mr. DEFAZIO. The NRC was in fact successful and prevailed in the courts. As I recall, it was a judgment written by Judge Mikla, and he found that the rule, although he questioned some of the time lines and other things, he said that you had met the letter of the law and it was in fact upheld.

Mr. ZECH. Yes, sir. That is my understanding, too.

Mr. DEFAZIO. Now, that is, I guess, where we begin to perhaps diverge from the arms length rulemaking and regulation. And this is where I have some questions.

The utilities were not successful in court, but as I understand it, a number of utilities subsequently came to the NRC to seek relief from the standards which had been promulgated. A final rule had been issued and had been upheld in court. Some utilities were having problems with compliance and they came to the NRC and asked for some relief under those rules; is that correct? Mr. ZECH. That is my understanding.

Mr. DEFAZIO. And that was probably early 1984?

Mr. ZECH. I am not sure of the date.

Mr. ASSELSTINE. That is correct, Mr. DeFazio. In fact, if I could add one other element to fill in on the historical perspective a bit, after the Browns Ferry fire, the NRC staff began to try to improve fire protection around the country and do it without adopting

rules, but instead to do it through reviews of individual plants and establishing technical positions by the NRC staff.

What they found was that there was a group of utilities that was strongly resistant to changing the plants and adopting improvements in the fire protection area, and the results were very inconsistent. There was a lack of uniformity.

It depended, first, on how hard the utility fought and, second, how effective the staff reviewer was in gaining commitments and concessions from the licensees. That was a fundamental part in the agency's decision, in fact, the staff's proposal to the Commission, that regulations were needed. Once and for all, we needed something on the books so that the requirements would be there, they would be enforceable, and there would be consistency and uniformity throughout the industry.

Mr. DEFAZIO. In fact, that almost goes to Chairman Zech's desire that we should have a uniform plant design and standard. It would be easier to administer, and it would certainly be more expeditious in construction and monitoring.

So would you agree that a desirable way to handle this sort of problem would be to have uniform standards for what is potentially a most serious problem?

Mr. ASSELSTINE. Yes, sir. I certainly would.

Mr. DEFAZIO. I thank you for filling that in.

Now, when the utilities came forward, as I understand it, they first approached technical staff and technical staff was not amenable to reinterpreting or altering the regulations; is that correct?

Mr. ZECH. I am not sure if that is correct or not. I would have to ask for somebody who was there when that happened to respond. Mr. ASSELSTINE. I can help, Mr. DeFazio.

What happened was, after the rule was adopted, again this sort of hard core group of utilities that had been upset about the rule challenged it in court, and after the decision in court, these utilities continued to argue that the rule wasn't clear; that it wasn't clear what was expected of them; that some of the elements of the rule were somewhat gray or ambiguous and that they needed additional guidance.

So as a result of that, the NRC staff developed additional guidance in a Generic Letter, and it was issued in 1983. It is Generic Letter 83-33. That Generic Letter was developed by the technical staff, the experts, our fire protection engineers. It was reviewed formally throughout the NRC staff through the normal review processes. It was formally approved by the NRC staff, and it was issued as further guidance to the industry on what needed to be done to satisfy the requirements of the rule.

It turns out that this small hard core group of utilities that had been recalcitrant throughout this process still wasn't satisfied. At that point, it wasn't that the guidance wasn't clear. It is just that they didn't like the guidance. And they came back to the NRC staff asking for relief from the current requirements.

They didn't go to the technical reviewers, the experts, the fire protection engineers; they jumped the chain of command and went up to senior staff management with their appeal.

Mr. DEFAZIO. Was that to see Mr. Stello?

Mr. ASSELSTINE. That is right. They had two meetings, as I understand it. I interviewed the people who were involved in these meetings. They had two meetings back to back in one day. The first meeting was with the Deputy Division Director in charge of the Fire Protection area, and they essentially informed him that if they didn't get satisfaction from him, that they had a meeting scheduled with Mr. Stello immediately after that, and they all trooped from one office over to Mr. Stello's office.

Mr. DEFAZIO. And then Mr. Stello, I understand at that point, did react to the utilities' request and in fact instructed an attorney to develop an interpretation?

Mr. ASSELSTINE. That is my understanding based upon the people who participated in that meeting; that Mr. Stello basically said I want you to write up an interpretation document that satisfies what they are asking for.

Mr. DEFAZIO. Satisfies what they are asking for. Now, we have had a rule promulgated. The rule has been contested. Mr. Zech, I am going to address this to you, but do you know whether or not that is an accurate statement that Mr. Štello made in that direction to staff?

Mr. ZECH. I don't know, sir.

Mr. DEFAZIO. But given the representation of Mr. Asselstine, would you consider that to be, given the fact we had a rule, the rule was publicly noticed, it was heard, it was promulgated in final form, it was tested in court, it was subsequently clarified in Generic Letter 83-33, and then Mr. Stello asked that these utilities be accommodated, some small group of utilities. I believe it was some five operators.

Is that a regulatory attitude?

Mr. ZECH. Mr. DeFazio, if I may interject, Mr. Stello is here. If you would care to address that question to him, he could answer you directly.

Mr. DEFAZIO. That would be fine. Was he also sworn, Mr. Chairman?

Mr. GEJDENSON. No, he wasn't. Why don't we do it the way we have been doing it? We can have Mr. Stello tell the Chairman, and then Chairman Zech can tell us.

Mr. DEFAZIO. I think it will take me about 10 more minutes. Then we have a vote.

Mr. GEJDENSON. Why don't we recess at this point? You can consult with Mr. Stello, and then-

Mr. ZECH. Mr. Chairman, I would be happy to do that, but I would respectfully suggest that you probably would get a better answer if you hear from him directly rather than for me to try to restate what he is going to tell me.

Mr. GEJDENSON. We would prefer, Mr. Chairman, with all due consideration, that we deal with the Commissioners.

Mr. ZECH. I will do the best I can.

Mr. GEJDENSON. We understand the limits on that. And then you go back and deal with your folks. We can maybe help you set up your own chain of command there. We will give you that time to consult. We will be back here, hopefully in less than 10 minutes. The committee will recess.