TO save money, a Connecticut nuclear plant has repeatedly violated its operating license, and the plant's owner lied to federal regulators - saying the plant had safety features that didn't exist, according to a senior engineer at Northeast Utilities. The allegations are significant not only for the safety breaches but because, says one federal official, this may be the first time a utility employee has sought government help to close the nuclear plant he helps oversee. In a petition filed with the Nuclear Regulatory Commission (NRC) on Aug. 21, George Galatis, an engineer in the nuclear engineering department of the plant's owner, Northeast Utilities, alleges that for 20 years NU consistently allowed the Millstone 1 plant near Waterford, Conn., to offload its reactor's entire complement of fuel during scheduled outages. The 580 fuel assemblies were kept in a spent-fuel pool authorized to hold only one-third that number. Moreover, when the utility sought license amendments to increase the pool's capacity, it claimed the pool had safety features that didn't exist and on which approval of the amendments hinged, according to the petition. If, during a planned maintenance outage, an earthquake had occurred or the facility had been subject to other structural stresses it supposedly was designed to withstand, Mr. Galatis says, the water covering the fuel could have boiled off and the fuel likely would have melted, releasing dangerous amounts of radiation. In addition to Millstone 1, NU operates two other reactors at Millstone, the Haddam Neck plant near Haddam Neck, Conn., and the Seabrook nuclear power plant in New Hampshire, just north of the Massachusetts border. ''Given the history of this, it's fair to ask whether other Northeast Utility plants are being run the same way,'' adds Ernest Hadley, an attorney representing Galatis, a 13-year veteran at NU. Richard Gallagher, a NU spokesman, says: ''We take this very seriously and will evaluate it on its merits.'' NU is asking the NRC to amend its license, he adds, to allow it to offload the reactor's full fuel load. The plant's next scheduled refueling outage is this fall. The allegations come at a time when cost pressures on nuclear utilities are growing. States around the country are deregulating utilities, opening the field to unprecedented competition. Indeed, Galatis says, NU's alleged license violations are cost-driven. He says the utility would have to spend between $5 million and $15 million to bring its spent-fuel pool up to licensing standards. Instead of making those modifications, the utility claimed credit for ancillary cooling equipment, although that equipment could not meet safety criteria without modifications either. By offloading the entire fuel load, the utility could save about $18 million in expenses and 30 days in down time. The allegations also come at a time when the NRC is struggling with how to conduct its activities in the face of tighter budgets, a regulation-leery Congress, and increasing numbers of aging nuclear plants. For example, in an internal report the Monitor obtained evaluating the agency's effectiveness in overseeing the South Texas Project, an NRC task force cited inspectors' tendencies to inspect documents rather than hardware. Often NRC evaluations were more favorable than those conducted by third parties such as private contractors or the Institute for Nuclear Power Operations, an industry-supported monitoring group in Atlanta. At Millstone 1, according to the petition, the NRC merely reviewed the utility's own safety-evaluation documents in granting license amendments for the spent-fuel pool. No inspector actually checked to see if the pool met requirements. Galatis says he first raised the issue internally in 1992. But he filed a formal petition only after he became frustrated with responses from the utility and from the NRC. ''The NRC did not come out and look,'' Galatis says. ''And we had three opportunities to identify what we were really doing versus what we said we were doing. This says that if you're a utility, you can say what your doing on paper, not do it, and get away with it.'' He asks that the utility's license be suspended for 60 days and that its latest license-amendment request be denied. The petition also was filed on behalf of We the People Inc., a clearinghouse for nuclear whistle-blowers in Rowley, Mass. ''This is not so much Millstone as the NRC not doing its job,'' says Stephen Comley of We the People. ''The NRC seems to be more interested in being a consultant to the nuclear industry than a regulator.''