UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
MASSACHUSETTS, ARKANSAS POWER & LIGHT CO., et
al., Intervenors 1984.CDC.146
Petition for Review of an Order of the Nuclear Regulatory Commission.
Wald and Ginsburg, Circuit Judges, and MacKinnon, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge Wald. Dissenting opinion filed by Senior Circuit Judge MacKinnon. MacKinnon, Senior Circuit Judge (dissenting).
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WALD
The Union of Concerned Scientists petitions for review of a rule promulgated by the Nuclear Regulatory Commission (NRC or Commission) providing that an atomic safety and licensing board (licensing board) need not consider the results of emergency preparedness exercises in a licensing hearing before authorizing a full power license to operate a nuclear power plant. The rule provides, in lieu thereof, that final NRC issuance of the license must be preceded by satisfactory completion of an emergency preparedness exercise, and a conclusion by the NRC, based on this exercise, that there is reasonable assurance that adequate protective measures can and will be taken in the event of a radiological emergency. UCS contends that this rule denies its statutory right to a hearing on a material issue in licensing proceedings, under Section 189(a)(1) of the Atomic Energy Act (AEA or Act), 42 U.S.C. § 2239(a)(1) (1976). Additionally, UCS also contends that the Commission acted arbitrarily and capriciously in promulgating the rule, in violation of the Administrative Procedure Act , 5 U.S.C. § 706(2)(1982).
We find that because the rule denies a right to a hearing on a material factor relied upon by the Commission in making its licensing decisions, the rule was issued in excess of the Commission's authority under section 189(a), and must be vacated. I. BACKGROUND
A. Statutory and Regulatory Background
In authorizing the NRC to issue licenses for nuclear power plant operation, the AEA delegates to the Commission broad discretion to decide what information it requires in making the licensing decision. *fn1 The Act provides that "the applicant shall state such technical specifications . . . as the Commission may, by rule or regulation, deem necessary in order to enable it to find that the [applicant's activity] . . . will provide adequate protection to the health and safety of the public." 42 U.S.C. § 2232 (1976).
The Act itself establishes a two step licensing procedure. An applicant for a nuclear power plant operating license must first obtain a construction permit. Section 189(a) of the Act mandates a public hearing before a construction permit can be issued. *fn2 After a permit is issued, the prospective operator must apply for a license. The Act requires a hearing before the license is issued only if requested by an interested party.
If a hearing is requested, the Commission, under its regulations, designates a licensing board to conduct the proceeding. The licensing board, however, determines only whether the issuance of a license is authorized; the Commission actually issues the license at a later date. 10 C.F.R. §§ 2.760, 2.760a (1983). To authorize a license, the board must find that "there is reasonable assurance that the activities to be authorized by the operating license can be conducted without endangering the health and safety of the public . . . ." 10 C.F.R. § 2.104 (1983). The scope of the board's hearing is determined by the specific issues material to that determination that are raised by the requesting party.
If the licensing board authorizes a license, prior to its issuance the NRC staff conducts preoperational testing to ensure that the operation of the completed plant comports with the expectations underlying the authorization. If in the course of this final review significant safety hazards are discovered, then additional hearings may be held at the Commission's discretion. See generally Pacific Gas & Electric Co. (Diablo Canyon Nuclear Power Plant, Units 1 and 2), 14 NRC 950 (1981).
B. History of Emergency Preparedness Exercises
After the 1979 accident at Three Mile Island the Commission, for the first time, required offsite emergency plans as a condition of a nuclear reactor operating license. Up to that time, state and local governments prepared such emergency plans on a voluntary basis, if at all. Following the TMI incident, the President's Commission on the Accident at Three Mile Island found that "the [emergency offsite] response was dominated by an atmosphere of almost total confusion." Report of the President's Commission on the Accident at Three Mile Island -- The Need for Change: The Legacy of TMI 17 (1979). The President's Commission recommended that in the future before a utility was granted an operating license, offsite emergency response plans should be developed by state authorities, evaluated by the Federal Emergency Management Agency , and the means for implementing them put in place.
The TMI episode also produced a shift in the NRC's attitude about offsite emergency planning. After the accident, the Commission announced that it now "view[ed] emergency planning as equivalent to . . . siting and design in public protection." 44 Fed. Reg. 75169 (1979) (proposed rule on emergency response plans). In 1980, after rulemaking proceedings, the Commission published its first final rule addressing offsite emergency preparedness. This rule provides:
No operating license for a nuclear power reactor will be issued unless a finding is made by NRC that the state of onsite and offsite emergency preparedness provides reasonable assurance that adequate protective measures can and will be taken in the event of a radiological emergency.
10 C.F.R. § 50.47(a)(1) (1983). Pursuant to the rule, FEMA is to make findings and determinations on whether offsite "emergency plans are adequate and whether there is reasonable assurance that they can be implemented." 10 C.F.R. 50.47(a)(2) (1983). The Commission in turn will base its findings on the state of emergency preparedness on FEMA's findings, which constitute a rebuttable presumption as to the adequacy and implementation capability of the emergency plans. Id.
The rule, however, expressly conditions licensing of plants on satisfaction of sixteen specific standards for emergency preparedness plans. One of those standards requires that
periodic exercises are (will be) conducted to evaluate major portions of emergency response capabilities, periodic drills are (will be) conducted to develop and maintain key skills, and deficiencies identified as a result of exercises are (will be) corrected. *fn3
10 C.F.R. § 50.47(b)(14) (1983). For new plants,
a full scale exercise which tests as much of the licensee, State and local [onsite and offsite] emergency plans as is reasonably achievable without mandatory public participation shall be conducted . . . within one year ...