ML041190081

Blue Ridge Environmental Defense League'S Proposed Hearing Schedule and Request for Reconsideration of Aslb'S Internal Deadline of August 2004 for Issuing a Decision in This Proceeding

ML041190081
Person / Time
Site:	Catawba
Issue date:	04/19/2004
From:	Curran D Blue Ridge Environmental Defense League, Harmon, Curran, Harmon, Curran, Spielberg & Eisenberg, LLP
To:	Atomic Safety and Licensing Board Panel
Byrdsong A T
References
50-413-OLA, 50-414-OLA, ASLBP 03-815-03-OLA, RAS 7663
Download: ML041190081 (37)

Text

-tRS -7663 April 19, 2004 UNITED STATES OF AMERICA DOCKETED NUCLEAR REGULATORY COMMISSION USNRC Aprl 27, 2004 (11:08AM)

BEFORE THE ATOMIC SAFETY AND LICENSING BOARD OFFICE OF SECRETARY RULEMAKINGS AND ADJUDICATIONS STAFF In the Matter of: )

Docket Nos. 50-413-OLA DUKE ENERGY CORPORATION 50-414-OLA (Catawba Nuclear Station, )

Units 1 and 2) )

BLUE RIDGE ENVIRONMENTAL DEFENSE LEAGUE'S PROPOSED HEARING SCHEDULE AND REQUEST FOR RECONSIDERATION OF ASLB'S INTERNAL DEADLINE OF AUGUST 2004 FOR ISSUING A DECISION IN THIS PROCEEEDING I. INTRODUCTION In preparation for discussion of litigation scheduling issues at a telephone conference on April 20, 2004, Blue Ridge Environmental Defense League ("BREDL") hereby proposes a schedule for litigation of security issues and Contention III. BREDL also proposes minor modifications to the schedule established by the Atomic Safety and Licensing Board ("ASLB")

for litigation of Contentions I and II in its March 30, 2004, Order (Confirming Matters Addressed at March 25 Telephone Conference).

The time frame for BREDL's proposed schedule is based on a goal of allowing the ASLB to issue a decision regarding Contentions I, II, and III, by September of 2004; and on Security Contention 5 by March of 2005. BREDL does not believe it is possible or necessary to litigate its admitted contentions in time for reach its stated goal of issuing a completed decision in this grenp (ote-ecy-ey/

proceeding by August of 2004. Thus, BREDL's proposal includes a request that the ASLB reconsider the August 2004 goal.

II. FACTUAL BACKGROUND A. Schedule for Testing of Plutonium Fuel Assemblies at Catawba This proceeding relates to Duke Energy Corporation's ("Duke's) application for a license amendment allowing it to test plutonium mixed oxide ("MOX") lead test assemblies ("LTAs") in the Catawba nuclear power plant. In its License Amendment Request ("LAR") of February 27, 2003, Duke stated that "[t]he current lead assembly fabrication schedule will support the insertion of MOX fuel lead assemblies into either McGuire Unit 2 or Catawba Unit 1 during the Spring 2005 refueling outage for the selected units." Id., cover letter at 1.

Although Duke does not explain the statement, it appears to be based in part on the U.S.

Department of Energy's ("DOE's") schedule for fabrication of plutonium LTAs in France. On October 1, 2003, the DOE submitted to the U.S. Nuclear Regulatory Commission ("NRC" or "Commission") an application for an export license to ship plutonium to France for processing into LTAs. Letter from Edward J. Siskin, DOE, to Deputy Director, Office of Nuclear Programs.2 According to the export license application, the plutonium will be shipped to France in July or August of 2004, and processed into MOX fuel rods at the Cadarache fuel fabrication facility for assembly into LTAs at the M&lox facility. Id., Attachment to NRC Form 7. The export license application contemplates that the completed LTAs will be shipped back to the U.S. and delivered to Catawba in the "general timeframe" of the first half of 2005. Id. at 2. The DOE subsequently stated that "the summer 2004 shipping date must be met" in order to allow sufficient time to manufacture the LTAs before Cadarache is permanently shut down in July I Duke later restricted its application to the Catawba plant.

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2005. Declaration of Edward J. Siskin, par. 5 (December 30, 2003), submitted in support of Opposition of Department of Energy in Response to Request for Hearing, Petition to Intervene and Request for Waiver by Greenpeace International, Charleston Peace, and Blue Ridge Environmental Defense League (December 31, 2003).3 The French government has decided to close Cadarache because its seismic design is inadequate. Ann MacLachlan, "Cogema's Cadarache Plant Ends Commercial Work, Will Shut in 2006;" Nuclear Fuel (August 18, 2004).

A copy is attached as Exhibit 2.

The testing of plutonium LTAs at Catawba is part of a much broader program to dispose of the U.S.'s stockpile of surplus weapons-grade plutonium. Under a treaty with Russia, the U.S.

is proceeding in parallel with Russia to develop and implement programs for the disposition of weapons-grade plutonium. The U.S. program for implementation of the MOX program has been set back a year by delays in the design and construction of a MOX fabrication facility at the Savannah River Site. Letter from Alex S. Polonsky to Administrative Judge Thomas S. Moore re: Notice of Delay in Construction of the MOX Fuel Fabrication Facility; Duke Cogema Stone and Webster (Savannah River Mixed Oxide Fuel Fabrication Facility), Docket No. 70-3098-ML (February 10, 2004) (hereinafter "DCS Letter"). A copy is attached as Exhibit 3. According to the DCS Letter:

2 A copy of the DOE export license application is attached as Exhibit 1.

3 0n November 26, 2003, BREDL, together with Greenpeace International and Charleston Peace, requested a hearing on DOE's export license application, as well as a waiver of NRC security standards governing exports of nuclear materials to foreign countries. Request for Hearing and Petition to Intervene and Request for Waiver by Greenpeace International, Charleston Peace, and Blue Ridge Environmental Defense League; Request for Waiver of 10 C.F.R. § 110.44 by Greenpeace International, Charleston Peace, and Blue Ridge Environmental Defense League. Their requests are still pending before the Commission.

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the U.S. Department of Energy has officially notified Duke Cogema Stone & Webster LLC (DCS) that the start of construction of the MOX Facility at the Savannah River Site will be postponed from July 2004 until approximately May 2005.

Moreover, the schedule for parallel implementation of the MOX program has been thrown into doubt by the failure of the parties to come to an agreement on liability issues. The National Nuclear Security Administration's ("NNSA's") FY 2005 budget request to Congress indicates that construction of the proposed MOX Facility may be delayed much longer than the ten months represented in the DCS Letter. Department of Energy FY 2005 Congressional Budget Request, National Nuclear Security Administration, Office of the Administrator, Weapons Activities, Defense Nuclear Nonproliferation, Naval Reactors (February 2004)

(hereinafter "NNSA Budget Request") (February 2, 2004). Copies of relevant pages are appended as Exhibit 4.

The Budget Request shows that the May 2005 date is a "target" date, not an estimate, because:

uncertainties associated with the international contributions to the Russian program together with Congressional requirements for parallel progress in both nations make estimation of key schedule milestones inappropriateat this time. The targets in 2004 and beyond assume the issue of liability will be resolved by April 1, 2004.4 Id. at 480 (emphasis added). May 2005 is also described as the "earliest possible date" for commencement of construction." Id. at 503. In his recent annual report to Congress regarding progress on the MOX Facility, the Secretary of Energy provided no further assurance that the 4 Id. Similarly, at page 481, the Budget Request explains that technical work on the design and licensing of the U.S. plutonium disposition facilities to be located at the Savannah River Site "has progressed to the point that DOE is ready to start construction of the Mixed Oxide Fuel Fabrication Facility in May of FY 2005." But in the same paragraph, the Budget Document states that "the Congressional requirement that both the U.S. and Russian program proceed in parallel may impact this schedule." Id. Later in the document, the NNSA indicates that the delay is caused by the lack of resolution of "liability issues." Id. at 487.

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DOE could meet the new construction schedule. His statement can only be described as noncommittal:

Accordingly, pursuant to section 3182(a)(3) of the Bob Stump National Defense Authorization Act for Fiscal Year 2003, I certify that it remains possible to meet the MOX production objective by January 2009, if there is no further significant delay in the start of construction due to liability issues and if the annual funding requirements that will be requested by the President in the outyears are made available by Congress.

Letter from Spencer Abraham, Secretary of Energy, to Hon. John Warner, Chairman, Senate Committee on Armed Services (February 17, 2004). A copy is attached as Exhibit 5. Thus, the targeted construction commencement date of May 2005 was based on the hope that liability issues would have been resolved by April 1, 2004. Since these issues were not resolved by that date, then one must anticipate that construction will be delayed even longer than NNSA projected earlier this year. A recent article in the Nuclear Monitor reports that the DOE's internal deadline for determining whether it can meet its targets for the MOX program has been moved to July of 2004. "No Solution to Liability Issue Yet, but Pu Program Schedule Still Valid," Nuclear Weapons and Materials Monitor at 1 (April 12, 2004). A copy is attached as Exhibit 6.

B. Schedule for Litigation of BREDL's Contentions On March 5, 2004, the ASLB admitted three contentions submitted by BREDL regarding the adequacy of BREDL's application with respect to safety and environmental issues:

Contentions I and II (relating to Duke's safety analysis), and Contention III (relating to Environmental Report's discussion of alternatives). LBP-04-04, Memorandum and Order (Ruling on Standing and Contentions). On March 15, 2004, Duke appealed the admission of the contentions. Memorandum of Law in Support of Duke Energy Corporation's Appeal from the 5

Atomic Safety and Licensing Board's memorandum and Order LBP-04-04 (Ruling on Standing and Contentions). Duke's appeal is still pending.

On March 15, 2004, Duke also filed a motion to dismiss Contention III. Duke Energy Corporation's Motion to Dismiss Contention III. Duke also objected to a question in BREDL's first set of discovery requests regarding Contention III. Duke Energy Corporation's Objections to Blue Ridge Environmental Defense League's First Discovery Requests at 8 (April 2, 2004).

Duke's objection is still pending before the ASLB. See Order (Confirming Matters Addressed at April 6 Telephone Conference) at 3 (April 8, 2004).

On April 12, 2004, the ASLB admitted BREDL's Security Contention 5, regarding the adequacy of numerous aspects of Duke's application for an exemption from certain NRC security requirements for Category I special nuclear materials facilities. Memorandum and Order (Ruling on Security-Related Contentions). On April 8, 2004, BREDL submitted proposed revisions to its security contentions, based on new information in Duke's responses to the NRC Staffs Request for Additional Information on security issues. Blue Ridge Environmental Defense League's Amended Contentions on Duke's Security Plan Submittal.

III. REQUEST FOR RECONSIDERATION OF ASLB'S GOAL OF COMPLETING ITS DECISION BY AUGUST 2004 BREDL requests that the ASLB reconsider its goal of completing its decision on the Catawba LTA proceeding by August of 2004, because it is neither feasible nor necessary to adhere to that schedule. First, it is not feasible to add litigation of any additional issues to the already-compressed litigation schedule that the ASLB has established for Contentions I, II and III. The current litigation schedule is extremely tight, and will require a tremendous concentration of effort and resources to complete testimony by the end of May, as well as to prepare for an oral hearing in mid-June. BREDL does not believe it is possible for the ASLB to 6

provide it with a "meaningful" opportunity for a hearing, as required by Section 189a of the Atomic Energy Act, if the ASLB adheres to a schedule calling for a decision by August. 5 Union of Concerned Scientists v. NRC, 735 F.2d 1437, 1446 (D.C. Cir.1984), cert. denied, 469 U.S.

1132 (1985), quoting Bellotti v. NRC, 725 F.2d 1380, 1389 (D.C. Cir. 1983)

Second, even if it were lawful for the ASLB to sacrifice the statutory hearing required by Section 189a of the Atomic Energy Act to Duke's schedule for LTA production, Duke has not provided any compelling reasons for doing so. The only reason to decide the case by August 2004 is so that Duke can know, before the plutonium is shipped to France, whether or under what conditions it will receive a license to use the LTAs. While this level of certainty may be useful to Duke, it is not required.

In addition, as discussed in Section II.A above, the MOX program has been delayed by a year to date, and may be delayed even further if the U.S. and Russia do not resolve their disagreements over liability issues. The delays provide the DOE with additional time to seek alternative European and U.S. locations for manufacturing the LTAs, other than a French plant that should not be operating at all because of its lack of seismic qualification. 6 5 In this context, BREDL notes that the time frame of 44 days for completing discovery on Contentions I, II and III is about half the amount of time allotted by NRC regulations for expedited proceedings on expansion of spent fuel storage capacity at nuclear power plants. See 10 C.F.R. § 2.1111 (setting a 90-day discovery period for expanded spent fuel storage cases), 10 C.F.R. § 2.1101 (explaining that these procedures "are intended to encourage and expedite onsite expansion of spent nuclear fuel storage capacity.") While Subpart K does not establish time frames for submitting evidentiary presentations following the close of discovery, one ASLB order in a 1999 Subpart K proceeding gave the parties 50 days after the close of discovery for submission of "written summaries" containing testimony and legal briefs on two technical contentions. See Memorandum and Order (Granting Request to Invoke 10 C.F.R. Part 2, Subpart K Procedures and Establishing Schedule) at 2-3. In contrast, the parties to this case have been given 11 days after the close of discovery in which to file their written testimony.

For instance, France has a much larger and more recently constructed MOX fuel fabrication plant known as M6lox. The MOX fuel rods that would be fabricated at Cadarache are already scheduled for shipment to M6lox to be assembled into LTAs. While the ASLB obviously has no 7

IV. PROPOSED SCHEDULE Below, BREDL proposes minor alterations to the schedule for the conclusion of the litigation of Contentions I, II, and III; and a schedule for litigation of BREDL's Security Contention 5. The schedule balances BREDL's need for a meaningful opportunity to prepare its case against Duke's desire to obtain a decision as soon as possible. Thus, while the time frames are longer than originally proposed by the ASLB, they are equivalent to or shorter than timeframes that are generally established in Subpart K proceedings. See note 5, supra.

BREDL proposes that the hearing on Contentions I, II and III should be held the second week of June. If the hearing is held that week, the extremely short time frame for filing testimony and rebuttal testimony can be relaxed slightly, to allow more time for preparation.

BREDL believes this change will allow the parties a minimally adequate opportunity to prepare their cases. Moreover, if the ASLB is not able to issue a ruling on Duke's motion to dismiss Contention HI shortly, BREDL recommends that litigation of Contention III be included with litigation of BREDL's security contention.

BREDL also proposes a schedule for litigation of Security Contention 5 which involves holding a hearing in November 2004. This schedule will allow the ASLB to make a decision by early March of 2005. The schedule anticipates that discovery on the security contention will begin after the parties have finished litigating Contentions I, II and III.

BREDL proposes the following schedule:

May 28 Prefiled written testimony on Contentions I, II, and III (Contention III to be postponed if ASLB does not rule soon on Duke's Motion to Dismiss) control over DOE, it does not need to sacrifice its own hearing process to DOE's or Duke's insistence that fabrication of the LTAs at the Cadarache plant is the only alternative open to them.

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June 9 Prefiled written rebuttal testimony on Contentions I, II and III June 14-18 Hearing on Contentions I, II and III July 16 Proposed Findings of Fact and Conclusions of Law July 30 Proposed Reply Findings of Fact and Conclusions of Law September 30 Goal for decision on Contentions I, II and III June 21-Sept. 20 Discovery on Security Contention 5 (all discovery responses must be completed by 9/20)

October 29 Prefiled initial testimony on Security Cont. 5 November 10 Prefiled rebuttal testimony by all parties November 15-19 Hearing on Security Contention 5 December 17 Proposed Findings of Fact and Conclusions of Law January 7, 2005 Proposed Reply Findings of Fact and Conclusions of Law March 8 Goal for decision on Security Contention 5 BREDL requests that the ASLB adopt this schedule for the conduct of this proceeding.

Respectfully submitted, Diane Curran Harmon, Curran, Spielberg, & Eisenberg, L.L.P.

1726 M Street N.W., Suite 600 Washington, D.C. 20036 202/328-3500 e-mail: dcurran(harmoncurran.com April 19, 2004 9

-- A E 1 Exhibit 1 Department of Energy National Nuclear Security Administration Washington, DC 20585 K5A14 o3321-October 1, 2003 // o69qo Deputy Director Office of International Programs U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Enclosed for review and approval is a U.S. Department of Energy (DOE) application to the NRC for a license to export of up to 140 kg of weapon-grade plutonium oxide to France under the provisions of 10 CFRI 10, "Export and Import of Nuclear Equipment and Material." Export of this material is needed to support mixed oxide (MOX) fuel qualification efforts for the Department's surplus plutonium disposition program. The material will be used to fabricate MOX fuel lead assemblies (LAs) for irradiation in a U.S. commercial nuclear reactor.

It is our understanding that DOE will not need an import license to bring the finished lead assemblies and left over material in the form of fuel rods back into the United States.

However, if this understanding is not correct, this letter is also a request to import the finished lead assemblies and left over material under the general license for import provisions of 10 CFR1 10.27.

It is also our understanding that a new Environmental Report is not required for this export license. If this understanding is not correct, please notify us as soon as possible sow, that we can submit the appropriate information in a timely manner. 8 :2 Lead assemblies are to be tested to confirm fuel performance and to demonstrate the I United States' capability to receive, inspect, store, and load the fuel assemblies at o1s rnM commercial reactors. In addition, the LA program is necessary to obtain NRC approval , C-for large-scale use of weapon-grade MOX fuel in commercial reactors. Reactor-based plutonium disposition using MOX fuel is the basis for the September 2000 U.S./Russia :

Plutonium Management and Disposition Agreement, under which each country will Jr disposition 34 metric tons of surplus weapon-grade plutonium for nonproliferation purposes.

DOE and its contractor, Duke Cogema Stone and Webster (DCS), have evaluated alternatives for the early fabrication of the LAs. It has been decided to have the LAs fabricated and assembled in Cogema's Cadarache and MELOX facilities in France. DCS has contracted with Cogema to provide fuel fabrication services for the LAs. A total of 0 PrWed with soy ticon rfcycldpper

X3MI, 0 33 2-2 four lead assemblies will be fabricated. Implementation of this decision will require the export of up to 140 kg of weapon grade plutonium oxide powder to France for use in fabrication of the LAs.

To support the plutonium disposition program schedule, DOE requests that NRC complete its review of the enclosed application by June 15, 2004.

If you have any questions, please feel free to call me at 202-586-2695, or Dave Nulton of my staff at 202-5864513.

Sincerely, EdwaJ Sin Assis eputy Administrator Office of Fissile Materials Disposition Enclosure cc: J. David Nulton, NA-261 Joseph Olencz, NA-261 Patrick T. Rhoads, NA-261 David Alberstein, NA-26 Richard Goorevich, NA-24 Kathleen Martin, OGC Robert Newton, OGC Arvid M. Jensen, DCS cr Janice Dunn Lee, USNRC IP m in

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/5A/Mo 33 2-t Attachment to NRC Form 7 // 0 65 '('1o Application for License to Export Nuclear Material and Equipment Submitted by U.S. Department of Energy October 1, 2003 Item No. 23: Additional Information on Consignees. End Uses, and Product Description After the end of the Cold War, both the United States and the Russian Federation designated large inventories of weapon-grade plutonium surplus to defense needs. The United States and Russia completed an agreement in September 2000 for the management and disposition of such plutonium. It commits each to dispose of 34 metric tons (MI) of weapon-grade plutonium. This will be accomplished in the U.S. by using the surplus plutonium to fabricate mixed oxide (MOX) nuclear reactor fuel and irradiating the fuel in commercial reactors. Effectively and transparently changing such readily usable weapons plutonium into forms unusable for weapons is a high priority national security objective to advance important nonproliferation and other policy interests.

For the program in the U.S., a prototypical set of reactor fuel (called "lead assemblies" or LAs) is to be tested in a Duke Energy reactor to confirm fuel performance and to demonstrate the United States' capability to receive, inspect, store, and load the fuel assemblies at commercial reactors. In addition, the LA program is necessary to obtain U.S. Nuclear Regulatory Commission (NRC) approval for large-scale use of weapon-grade MOX fuel in commercial reactors.

The U.S. Department of Energy (DOE) and its contractor, Duke Cogema Stone and Webster (DCS), have evaluated alternatives for the early fabrication ofthe LAs. It has been decided to have the LAs fabricated and assembled in Cogema's Cadarache and MELOX facilities in France. DCS has contracted with Cogema to provide fuel fabrication services for the LAs. A total of four lead assemblies will be fabricated. Implementation of this decision will require the export of up to 140 kg of weapon grade plutonium oxide powder to France for use in fabrication of the LAs.

Title to the plutonium oxide required for the LAs is held by DOE. Accordingly, thea H application for the license to export the material is being submitted by DOE. Title to the mierirb and to the fabricated assemblies will remain with DOE until the LAs are inserted into the reatorZ for irradiation. 0- <

M The plutonium oxide is being purified at Los Alamos National Laboratory, where it@ .

currently stored. Transportation by land of the plutonium oxide from Los Alamos to the , ,,

Charleston Naval Weapons Station (NWS) on the East Coast will be provided using the SafE' Secure Transport (SST) system operated by the DOE Office of Safeguards Transportation (OS1) At the Charleston NWS the material will be loaded onto Pacific Nuclear Transport, Ltd.

(PNTL) ships. The material will be contained in eight or nine FS 47 shipping packages, each of which contains five containers of plutonium oxide. The material will be transported by sea to Cherbourg, France, where it will be unloaded for overland shipment to the Cadarache fabrication facility. The general timeframe for this activity is July/August 2004. S5 6 NV 9 1:0 (0BZ dIO 03AI333S I

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// oof'f Upon completion of lead assembly fabrication, the completed assemblies, along with archive and extra material, will be returned to Cherbourg via overland shipment and loaded onto the PNTL ships. Left over feed material in France will be pelletized in the form of MOX fuel, inserted into fuel rods, and welded closed as is the practice with other fuel rods. The left over material, as well as spare and archive fuel rods, will be returned to the US in the same shipment as the finished LAs. The assemblies and other material will be contained in six FS 65 shipping packages. These packages will be transported by sea back to the United States in the PNTL ships. The packages will be unloaded at the Charleston NWS for overland shipment via SST to the reactor in which the assemblies will be irradiated. In the case of the extra material, it will be shipped by SST to either Los Alamos, Y-12 at Oak Ridge, or the Savannah River Site for temporary storage until the MOX Fuel Fabrication Facility at SRS is operational. The general timeframe for this activity is the first half of 2005.

Contractual arrangements and payment for use of the PNTL ships will be made directly between DOE's contractor, DCS, and the PNTL operating company. These parties will also, under DOE programmatic oversight and review, determine technical details regarding handling of the materials and the required equipment. Applications for Certification of Competent Authority for the FS 47 and FS 65 shipping packages, both of which are of French design, will be filed with the Department of Transportation and the NRC by DCS. An application for an amendment to the operating license of the McGuire and Catawba nuclear power stations, to allow insertion of the lead assemblies into a reactor at either station, was filed with the NRC by Duke Energy in February 2003. Duke Energy recently amended the application by withdrawing McGuire from consideration for lead assembly irradiation.

The transfer of the plutonium oxide powder to Europe and the return of the fabricated lead assemblies and left over material will take place pursuant to the U.S.-EURATOM peaceful nuclear agreement. Safeguards will be implemented by the EURATOM Safeguards Inspectorate, which is very similar to the IAEA system.

For sea transport, the system of two armed PNTL ships sailing in convoy for mutual protection will be used. This system has been reviewed and approved by U.S. authorities for MOX fuel transport from Europe to Japan in recent years. The basic security philosophy behind the two-ship convoy is that each armed ship escorts and protects the other. In the judgment of all the U.S. agencies involved in the earlier review processes, the PNTL MOX transportation system, with its two armed vessels, provides an acceptable level of protection. This system has been used as recently as the summer of 2002 for the shipment of MOX fuel from Japan back to the UK.

Physical protection measures in France will be decided by the Government of France, in full compliance with the relevant IAEA recommendations, including INFCIRC 225, "Physical Protection of Nuclear Material and Nuclear Facilities." Actual physical protection measures implemented in the fuel fabrication facilities and during transportation are classified, such classification being an important element of their effectiveness. They include armed guards and close connection with the national response forces. These measures are comparable to those used in the U.S. for land transportation and processing of such materials and are subject to periodic review by the DOE Office of Export Control. 5 130 Wi dIO 03AI33 i 2

a a Exhibit 2 Inside NRC article Copyright 2003 The McGraw-Hill companies, Inc.

www.mcgraw-hill.com All rights reserved Nuclear Fuel August 18, 2003 HEADLINE: Cogema's cadarache plant ends commercial work, will shut in 2006 BYLINE: Ann MacLachlan, Paris BODY:

Cogema's ATPu mixed-oxide (Mox) fuel production plant at Cadarache ended commercial production as expected last month, but the company says the plant will remain active through 2006 to allow conditioning of scrap as well as

'research and development work.

That work could include fabrication of lead test assemblies (LTAS) from ex-weapons plutonium destined for irradiation in a Duke Power reactor, under the u.s. plutonium disposition program. A Cogema spokesman confirmed last week that the company had replied to a call for bids on the LTA fabrication, saying it was awaiting the result of the bid competition. The other bidder is known to be Belgonucleaire, although the Belgian fabricator has not publicly confirmed its bid. The proposal, known as Eurofab, was made after LTA manufacture at Los Alamos National Laboratory was ruled out.

The last MOX pins were fabricated in ATPu on July 16, ahead of the Jul 31 deadline set by cogema after French safety authorities warned the old plant wouldn't be allowed to operate beyond mid-2003. ATPu, which entered into production in 1962, wasn't up to modern seismic safety standards and Cogema opted not to do the major reconstruction work required to bring it into conformance with today s standards. Cogema in 2000 proposed transferring the cadarache MOX fabrication to its newer Melox plant in Marcoule; the French government finally authorized Cogema to expand production at Melox to accommodate the ATPu business.

Cadarache was responsible for Cogema's MOX business for German customers. with the prospect of a production stop, Cogema Cadarache began downsizing its workforce in 2001. From a high of 300 employees, the site is now down to a staff of 166, the company said.

Cogema said that fabricating the MOX LTAs would not pose safet problems,because there would be only a small quantity of plutonium, less than a tenth of what was there when the plant operated at full capacity. The director general of French nuclear regulatory agency DGSNR has confirmed that the source term for the MOX LTA production would be so small that it wouldn't represent a threat even given the plant's seismic weaknesses. The fabrication of four LTAs is expected to take less than three months.

In a report prepared for Greenpeace France and released last month, WISE-Paris said that Cogema has informed safety authorities it intends to shortly submit a licensing request for shipping casks for the U.S. plutonium and the LTAS. Neither French safety authorities nor the French government has announced a decision on the status of the LTA program.

WISE-Paris argued that the French government would have trouble explaining to the French public why a plant that is too unsafe for fabrication of French or German MOX made from reactor-grade plutonium...is safe enough for fabrication of weapons-grade MOX for the U.s. The consultancy argued that the flimsy

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Inside NRC article regulatory framework of the cadarache plant, as well as of Belgonucleaire's PO plant at Dessel that is still in operation, does not guarantee an appropriate licensing procedure for the LTAs. ATPu was not formally licensed at the beginning of its life, but its operating conditions currently require a fertile plutonium content of 17%, and an exemption would be required for manufacture of the LTAS. PO's license has allowed it to work with weapons-grade plutonium from the beginning.

The report also insisted that the public should be involved in any decision and that plans for the sea shipment of weapons plutonium from the u.S. to Europe should be revealed and publicly discussed. The cost of the U.S. LTA program should also be revealed, WISE-Paris said.

The consultants also claimed that transport casks and fabrication lines...have never demonstrated that they can handle such reactive materials,

that is, plutonium with a high Pu-239 content that presents a higher criticality sensitivity than the Pu normally put through the cadarache plant. They said the potential consequences of a terrorist attack or accident in transport of the 150 kilograms of U.S. Pu should be thoroughly assessed

before any decision is taken on the future of the Eurofab plan.

Page 2

U mM Exhibit 3 Morgan, Lewis & Bockius LLP 11 11 Pennsylvania Avenue, NW Washington, DC 20004 M organ Lewls MOrgLR AT LAW Tel: 202.739.3000 Fax: 202.739.3001 www.morganlewis.com Donald J. Silverman 202.739.5502 dsilverman~morganfewis.com February 10, 2004 Administrative Judge Thomas S. Moore Chairman, Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re: Notice of Delay in Construction Schedule for the MOX Facility; Duke Cogema Stone and Webster (Savannah River Mixed Oxide Fuel Fabrication Facility). Docket No. 70-3098- ML

Dear Judge Moore:

This is to inform the Licensing Board and the parties of a change in the schedule for the construction of the MOX Fuel Fabrication Facility (MOX Facility). Specifically, the U.S. Department of Energy has officially notified Duke Cogema Stone & Webster LLC (DCS) that the start of construction of the MOX Facility at the Savannah River Site will be postponed from July 2004 until approximately May 2005. This change to the construction schedule does not directly affect the schedule for design of the MOX Facility or the three contentions remaining in this proceeding. Accordingly, DCS hopes the Licensing Board will rule on DCS's existing dispositive motions so any uncertainties that may affect the MOX Facility's design may be addressed at the earliest possible time.

Respectfully submitted, Alex S. Polonsky cc: Service List Philadelphia Washington NewYork LosAngeles Miami Harrisburg Pittsburgh l-WA/2131341.1 Princeton NorthernVirginia London Brussels Frankfurt Tokyo

a a Exhibit 4 DOE/ME-0032 Volume I Department of; Energy FY 2005 Congressional Budget Request National Nuclear Security Administration Office of the Administrator Weapons Activities Defense Nuclear Nonproliferation Naval Reactors UA Office of Management, Budget February 2004 and Evaluation/CFO Volume 1

):; W.Cl 3'

Defense Nuclear lNonproliferation Page 399

Annual Performance Results and Targets FY2000 Results FY 2001 Results FY 2002 Results I FY 2003 Results t Te I There were no related targets. There were no related targets.

Developed a plan for U.S. and Russian Complete Title II (detailed) design of the Mixed plutonium disposition that is politically, fiscally, Oxide Fuel Fabrication Facility for the and technically feasible, and obtain White disposition of excess US weapons-grade House approval. (MET GOAL) plutonium, and commence down blending of off-specification highly enriched uranium at the Savannah River Site. (MET LESS THAN 80%

OF TARGET)

Annual Performance Results and Targets Endpoint Performance Indicators FY 2003 FY 2004 IFY 2005 I FY 2006 l FY 2007 l FY 2008 FY 2009 Date Pementane of the desian and Completed 60% Complete 85% Complete 100% Begin

• Continue ' Continue *Complete EOY FY 2013 construction of the Pit Disassembly of the detailed of the detailed of the detailed construction of construction of coristruction of construction of and Conversion Facility (PDCF) design of the design of the design of the the U.S. Pit the U.S. Pit theRU.S. Pit U.S. Pit completed U.S. Pit U.S. Pit

• U.S. Pit Disassembly Disassembly Dit;assembly Disassembly &

Disassembly Disassembly Disassembly and Conversion and Conversion anIdConversion Conversion and Conversion and Conversion and Conversion Facility WSB. Facility WSB. Facility WSB. Facility WSB.

Facility. Facility. Facility. Award Auiard Start Begin design of construction construction Construction of PDCF Waste management anagement PDCF complex.

Solidification contract for ccntract for Building. WSB. Pt )CF complex.

Accomplish all site preparation activities, including site clearing, grading, installation of utilities and installation of infrastructure support.

Percentage of the design and Completed 75% Complete the

• Begin site 'Continue the *tontinue the 'Continue the Complete the FY 2009 construction of the MOX Fuel of the detailed last 25% of the preparation and construction of construction of construction of construction of Fabrication Facility completed. design of the U.S. MOX Fuel construction of the U.S. MOX the U.S. MOX the U.S. MOX the U.S. MOX U.S. MOX Fuel Fabrication the U.S. MOX Fuel Fabrication Fuel Fabrication Fuel Fabrication Fuel Fabrication Fabrication Facility detailed facility and Facility. Facility. Facility. Facility Facility. design (total of initiate 100% procurement of complete). long lead equipment.

Defense Nuclear Nonproliferation/

Fissile Materials Disposition FY 2005 Congressional Budget

I I .

I I - I Performance Indicators Amount of HEU shipped to the United States Enrichment FY 2003 Processed the equivalent of FY 2004 Ship an additional 11MT FY 2005 Complete U.S.

50 MT HEU I FY 2006 Complete shipments of NIA FY 2007 N/A FY 2008 N/A FY 2009 Endpoint Target Date FY 2006 Corporation (USEC) for down- 11 MT @40% of of surplus HEU shipments to compensation blending. surplus HEU for to USEC for USEC. Begin HEU to USEC.

shipment to down-blending shipments of (EFFICIENCY MEASURE)

USEC. to LEU. A compensation grand total of HEU to USEC.

45MT has been shipped.

Amount of off-specification HEU Completed Down-blend off- Down-blend off- Down-blend off- Complete U.S. N/A N/A FY 2007 down-blended. capital specification specification at specification HEU/LEU improvements HEU at SRS SRS and deliver HEU atSRS shipments to at SRS for off- and deliver resulting LEU and deliver TVA.

specification resulting LEU and surplus resulting LEU HEU down- and surplus HEU to TVA and surplus blending and HEU to TVA (equivalent to - HEUtoTVA deliver resulting (equivalent to - 9.OMT of HEU (equivalent to -

LEU and 9.0MTofHEU for a cumulative 6.0MT of HEU surplus HEU to for a cumulative total of 21.7 for a cumulative TVA (equivalent total of 12.7 MT). total of 27.7 to -2.4MT of MT). MT).

HEU).

Russianize the design and construct Finalized Complete 60% Complete 100% Complete 40% Complete 80% Complete 100% FY 2008 the MOX Fuel Fabrication Facility in decisions on the of the Russianization of the construction of construction of Russia. technical path Russianization of the U.S. construction of the Russian the Russian forward for of the design, MOX Fuel the Russian MOX Fuel MOX Fuel disposing of Fabrication MOX Fuel . Fabrication Fabrication surplus Russian Facility. Fabrication Facility. Facility.

weapon-grade Begin Facility.

characterization Complete 100%

plutonium. characterization of Russian MOX site. of Russian Began and MOX site.

completed 10% Begin site of the preparation and Russianization construction of of U.S. MOX the Russian facility design. MaX Fuel Fabrication Facility.

• Uncertainties associated with the international contributions to the Russian program together with Congressional requirements for parallel progress in both nations make estimation of key schedule milestones inappropriate at this time. The targets in 2004 and beyond assume the issue of liability will be resolved by April 1, 2004.

Defense Nuclear Nonproliferation/

Fissile Materials Disposition FY 2005 Congressional Budget

Detailed Justification (dollars in thousands) l FY 2003 l FY 2004 l FY 2005 U.S. Plutonium Disposition DOE is responsible for disposing of 34 metric tons of U.S. surplus weapons grade plutonium, in accordance with a September 2000 U.S.-Russia Plutonium Management and Disposition Agreement and Congressional direction to conduct both disposition programs (U.S. and Russia) in parallel. Two key facilities will be built at the Savannah River Site: a Pit Disassembly and Conversion Facility, which will primarily disassemble nuclear weapons pits and convert the resulting plutonium metal to an oxide form, and a MOX Fuel Fabrication Facility which will mix the plutonium oxide with depleted uranium oxide to produce mixed oxide (MOX) fuel for subsequent irradiation in existing domestic reactors.

Technical work on the design and licensing of the U.S. plutonium disposition facilities to be located at the Savannah River Site (SRS) has progressed to the point that the DOE is ready to start construction of the Mixed Oxide Fuel Fabrication Facility in May of FY 2005. Equipment procurement will be initiated in FY 2005. However, the Congressional requirement that both the U.S. and Russian program proceed in parallel may impact this schedule (see section dealing with the Russian Fissile Material Disposition).

Reactor-Based Technologies ....... ............... 57400 36,750 38,600 Reactor Based Technologies activities include work necessary to convert weapons grade plutonium oxide into finished MOX fuel assemblies to be irradiated to the spent fuel standard in commercial reactors.

As part of fuel qualification activities, continue the implementation of the Lead Assembly (LA) work, including initiation of fuel fabrication and completion of the fabrication and insertion of lead assemblies into a mission reactor. Continue fuel transportation and packaging activities, including submitting certification documents to the Nuclear Regulatory Commission (NRC). Develop information and responses to NRC questions to assure NRC approval of the operating license for the MOX FFF, continue modifications to the commercial nuclear reactors, complete irradiation of last test specimens, and perform the bulk of post-irradiation examination of all the test specimens. Begin operations planning activities in support of the MOX FFF, including recruiting, training, manual and procedure development, and personnel costs.

The increase in FY2005 relative to FY 2004 is due to the increasedcosts for expansion of operational supportlevels as the design effort matures, partiallyoffset by the decreased costs relatingto the completion of the fabricationand insertion of lead assemblies into a mission reactor.

Defense Nuclear Nonproliferation/

Fissile Materials Disposition Page 481 FY 2005 Congressional Budget

(dollars in thousands)

FY 2003 FY 2004 FY 2005 J1Russian Fissile Materials Disposition

]Russian Plutonium Disposition (funds spent in Russia)

The 1998 U.S.-Russia Joint Scientific and Technical Cooperation Agreement, which provided limited liability protection for technical work (pre-construction) in support of plutonium disposition, expired in July 2003. Senior officials in both countries are now working to develop satisfactory liability provisions for the September 2000 U.S.-Russia Plutonium Management and Disposition Agreement. This Agreement covers design, construction and operation of facilities required for plutonium disposition.

Given that preliminary site characterization work in Russia will not start until the spring of 2004 and the U. S. and Russia must exchange detailed technical engineering data to Russianize the design of the MOX Facility, the start of construction in both countries will now begin in FY 2005.

As specified in the U.S.-Russia Plutonium Management and Disposition Agreement, funding from new budget authority continues the work initiated in FY 2002 and 2003. As soon as the U.S. and Russia resolve the liability issues and inform Congress of the revised path forward, the available prior year balances mandated for work in Russia as specified will be obligated.

The Plutonium Conversion and MOX Fuel Fabrication activities and budget, which appeared under this heading in previous years, have been consolidated and placed in a new task entitled "Implementation of MOX FFF Design". Given that Russia has accepted the offer of the design of the U.S.MOX Facility prepared by Duke Engineering Services, COGEMA, Inc. and Stone & Webster (DCS), this task includes both a Russian and a U.S. component.

VVER-1000 Reactors ............... 1,700 2,500 3,500 This effort involves modifying Russian VVER-1000 power reactors to utilize MOX fuel. FY 2005 efforts include: develop reactor physics data for insertion of MOX fuel lead test assemblies. Complete the MOX core design and design for reactor modifications for the lead test assemblies. Upgrade the VVER-1000 safety basis and submit MOX fuel licensing documents to GAN. Obtain licenses for experimental fuel and prepare for the insertion of the lead test assemblies.

The increase will be used to support the modifications to the VVER-1000 reactorsfor use of MOX, and preparationof licensing documents.

BN-600 Reactor ............... 1,300 2,500 3,500 This effort involves converting the BN-600 fast neutron breeder reactor into a net burner of plutonium.

FY 2005 efforts include: completing the BN-600 uranium core with reflector/shield safety analyses and submit the licensing package to GAN for approval of the blanket replacement. Complete the design upgrade of photo-neutron source and control/shutdown rods and other plant modifications. Fabricate reflector/shield components.

Defense Nuclear Nonproliferation/

Fissile Materials Disposition Page 487 FY 2005 Congressional Budget

99-D-143, Mixed Oxide Fuel Fabrication Facility, Savannah River Site, Aiken, South Carolina Significant Changes The schedule for starting construction of Mixed Oxide Fuel Fabrication Facilities (MOX FFF) in the U.S.

and Russia has been adjusted to allow time for resolution of issues regarding Russian tax exemptions and liability. Given the political realities and impacts of these issues, the earliest possible date that construction can begin on the two facilities is May 2005. Despite this delay in the start of construction, the NNSA has structured the program to minimize adverse impacts. The overall program and project costs will be updated in the Program's annual report to Congress.

This schedule adjustment will allow the U.S. to transfer the domestic MOX FFF design to Russia for use in processing Russian surplus plutonium. This approach was proposed to the Russians in April 2002 and accepted in December 2002. It eliminates the 2 to 3 years of time required for Russia to develop their own MOX facility design, and will, ultimately, minimize the cost and schedule of both programs. It will also allow the Congressional requirements for parallel progress in the U.S. and Russia to be met.

1. Construction Schedule History FY 2000 Budget Request 4Q2001 1Q 2002 4Q 2005 2Q 1999 a (A-E and technical design only)

FY 2001 Budget Request 3Q 2002 4Q 2002 1Q 2006 20 1999 (Preliminary Estimate) ...........

FY 2002 Budget Request 2Q 1999 4Q 2002 2Q 2003 1Q 2007 a (Preliminary Estimate) ...........

FY 2003 Budget Request 2Q 1999 40 2003 2Q 2004 40 2007 a (Preliminary Estimate) ...........

FY 2004 Budget Request 2Q 1999 1Q 2004 2 Q2 0 0 4 b 4Q 20 07 b 1,622,000a 1,842,0003 (Preliminary Estimate) ..........

FY 2005 Budget Request (Current Estimate)................. 2Q 1999 30 2004 30 2 0 05 b 2Q 2009 " TBDab TBD1 a Total Estimate Cost (TEC) and Total Project Cost (TPC) estimates will be updated when the Project Performance Baseline is established in FY 2004.

b The Report to Congress: Disposition of Surplus Defense Plutonium at Savannah River Site dated February 12, 2002, cites a Physical Construction Start date of FY2004, a Physical Construction Completion date of FY 2007, and the first fabrication of MOX fuel in FY2008. These dates will be revised in the 2004 report to Congress.

Defense Nuclear Nonproliferation/

Fissile Materials Disposition/

99-D-143 Mixed Oxide Fuel (MOX) Page 503 Fabrication Facility FY 2005 Congressional Budget

& Webster (DCS) on March 22, 1999 for the design of a MOX FFF to be built at the DOE Savannah River Site (SRS) and licensed by the Nuclear Regulatory Commission.

The MOX FFF will produce completed MOX fuel assemblies for use in existing domestic, commercial nuclear power reactors. The MOX FFF will be designed to receive and process 3.5 MT per year of plutonium powder from the Pit Disassembly and Conversion Facility (PDCF) and other selected inventories of weapon-grade plutonium oxide available within the DOE complex and accommodate about two-years storage for the incoming plutonium powder. The MOX FFF is capable of expanding throughput to 4 MT per year to meet provisions in the Russian agreement. The facility's operating life is expected to be approximately 12 years.

Design of the MOX FFF is based on processes and facilities currently being successfully operated in Europe, specifically the MELOX and La Hague facilities in France. The MOX fuel fabrication design will replicate the automated MELOX equipment and facility design and will include lessons learned from operations and maintenance experiences. The MOX FFF will be designed and built to meet U.S.

conventions, codes, standards, and regulatory requirements (Americanization process). After completing its mission, the facility will be deactivated, decontaminated, and decommissioned over a three- to four-year period.

The MOX FFF will require approximately 366,000 square feet to perform all material processing and fabrication operations to produce MOX fuel. Specific MOX FFF operations include the following:

aqueous polishing (to purify plutonium before fabrication into fuel); blending and milling; pelletizing; sintering; grinding; fuel rod fabrication; fuel bundle assembly; storage of feed material, pellets, and fuel assemblies; a laboratory; and space for use by International Atomic Energy Agency (IAEA). The facility also requires 120,000 square feet of structures adjacent to the MOX process areas for secure shipping and receiving, material receipt, utilities, and technical support.

Cost and Schedule The TEC for the MOX FFF is TBD due to FY 05 budget changes. These changes require a revision to the overall cost and schedule estimates for the MOX FFF. Cost and schedule estimates in this Data Sheet are preliminary. The revised cost and schedule will be completed by June 2004.

The overall process and facility design (also known as base design) is 75% complete as of September 1, 2003. Title I (preliminary) design began in mid FY 1999 and was completed in December 2000. Title 11 (detailed design) began in January 2001 and will be completed in 2004. The Title II design has taken longer than planned due to scope changes to accommodate impure plutonium previously destined for immobilization and delays dictated by the Russian program. In order to maintain project schedule and reflect industry experience, glove box and equipment design efforts were initiated in FY 2002.

FY 2004 and FY 2005 Description of Activities The main FY 2004 activities include completing the base design of the MOX FFF and continuing the manufacturing design activities of the process equipment units. In the base design, the structural design will be completed to develop construction bid packages to support construction commencement in May 2005. The remaining design packages (mechanical, electrical, etc.) will also be completed in FY 2004 to Defense Nuclear Nonproliferation/

Fissile Materials Disposition/

99-D-143 Mixed Oxide Fuel (MOX) Page 505 Fabrication Facility FY 2005 Congressional Budget

support the construction schedule in FY 2005 and beyond. Construction planning will fully commence in FY 2004 with the finalizing of Construction Management Plans.

For FY 2005, the initial suite of construction work packages will be issued to support the schedule and site preparation activities and will include land clearing and grading, temporary road construction, and establishment of temporary construction services. Procurement of the MOX FFF structural subcontract nd will begin in 2 quarter FY 2005 with award in the third quarter. Initial mobilization and material procurement will begin in FY 2005 with MOX FFF building excavation scheduled in early FY 2006.

The FY 2005 construction TEC activities will also cover finalization of manufacturing design and continuation of software design for process equipment. Initiation of long lead equipment procurement and equipment fabrication will commence.

4. Details of Cost Estimate a (dollars in thousands)

Current Previous Estimate Estimate Design Phase Preliminary and Final Design costs (Design Drawings and Specifications) .......... ............ 163,300 153,300 Contingencies (4.7% of TEC) ......................... ........................................... 8,000 18,018 Total, Design Phase (TBD% of TEC) ............................................. ........................ 171,300 171,318 Construction Phase Improvements to Land ..................................................................... TBD N/A Buildings........................................................................................................................ TBD N/A Other Structures ............................................................... . ... TBD N/A Utilities........................................................................................................................... TBD N/A Standard Equipment .................................................................... TBD N/A FY03 Procurment Engineering and Site Preparation ................................ ....................... TBD 53,993 FY04 Procurment Engineering and Site Preparation ............................... ........................ TBD 74,000 FY03 Physical Construction and Long Lead Procurments .................... ........................... TBD 328,000 Removal less salvage .................................................................... TBD N/A Inspection, design and project liaison, testing, checkout and and acceptance (0.0% of TEC) ............................. ....................................... TBD NIA Construction Management (0.0% of TEC) .................................................................... TBD N/A Project Management (0.Ox% of TEC) ............................................................. ....... TBD N/A Total, Construction Costs (72.7% of TEC) ..................................................................... 0 455,993 Contingencies..................................................................................................................... TBD NIA Design Phase (0.0% of TEC) ...................... .............................................. TBD N/A Construction Phase (0.Ox% of TEC) ...................................... ............................... TBD NIA Total, Contingencies (0.0% of TEC) ................................... 00..........................

Total, Line Item Costs (TEC) .................................................................... 171,300 627,311 a Amounts and schedules to be finalized by June 2004.

Defense Nuclear Nonproliferation/

Fissile Materials Disposition/

99-D-143 Mixed Oxide Fuel (MOX) Page 506 Fabrication Facility FY 2005 Congressional Budget

a a Exhibit 5 The Secretary of Energy Washington, DC 20585 February 17, 2004 The honorabc Jorin Warner Chainnan Comrnittee on Arimed Services Unitcd Sratcs Senate Washington, DC 205 10

Dear Mr. Chairman:

Section 3182(a)(3) of the Bob Srunp National Defrnse Aurhorizatioci Acr for Fiscal Year 2003 (Pub. L No. 107-314) requires the Departmnir of Energy to submit to Congress, not later than February 15 of each year beginning in 2004, a report on the implementation of the February 2003 plan for dtc constmction and operation of the mruxed oxide fuel (MOX) facility at The Savannah River Sitc, Aikcn, South Carolina. The report is ro include `(i) an assc~ssmcnr ofcomptrance with tbe schedules included with th pla. ,.and (ii) a cemiicanion whether or nor teMOXproducron objective can be mer .byJanuary209."

,Schedul A-essment i the Congressional Report on The Plar for Cotstrucon andi Opcration of MOX Facility that was submitted in February 2003, the Depaxrmcnr listed its kcy milcstoncs, which included the st of construcuon of the facility in FY 2004 and the initial Fabricaon ofpluronum into MOX fucl in FY 2008. This straregy for U.S plutontum disposinon was based on conrinuing work in Russia without interruption and on obtaining the estimated annual funding requirements that were presented in the report to Congress, Disposition ofSurplas Defense Pluionium at SavannaA River Stre daredfebruary2002.

We complered overall design of the MOX fvabncauon facility on schedulc by the end of F Y 2003 Since the 2003 plan was submitted, howevcr, chc U S anid thi-Russian Federation have disagreed on liability protections for work done in Russia. This disagreement bas resulted in the interruption of critical work in Russia, which (m light of the Administraion's and congressional intent that the two programs proceed in rough paralll), has dclayed the start of constrUction of botb MOX facilitnes aud delay of a number of tie interim milestones identified in the 2003 plan. The lability problem remains unrcsolved, HowVecr, we arc deterimmed to resolvc this issue in rime to prevent slippages that will prevent us from meeting oar 2009 commitments.

I'ArW On 1MIWA Dpttr

2 While The 5t of construction will be dclaycd due to our Ongoing disagreerrient with ?.ussia regarding hability, we are confident that we will be ablt to meet overall proir= objectives - the elimination of enough weapon-gmad plutonium for thousands for nuclear weapons. Wc are till reviewing how to minimn2e any impacts that this delay Tnight have on the,overall programn milestones and cost.

We will notfy Congress if it bccomcs nccssary to rnoify program schvdulc or zo adjust hch finding profile.

Accordingly, pursuant to scmon 3182(a)(3) of the Bob Stump Nanonal Defense Auhorizaion Act for Fiscal Year 2003, I certify that it remains possible to meet the MOX producrion objective by January 2009, iftherm is no tbrher signiffcint o abiity issues and if The annual funding delay in the start of construction du wi requirements that will be requested by the President in the ouiyears are made avaJlable by Congress.

I apprcciat your continued support for this importarn nonproliferanon prograrn.

if you have any further questions please con=t Mr. Phuk A.

Dearbom,

Assiswtm Secxeuiy for Congressional and Intrgovacnnl Affgir, at (202) 58&5450.

Sincerely, Spencer Abraham cc: The Honorable Carl Levin Ranking Minority Member

M Exhibit 6 l~IA~ Fri nID IWW 0N M-3rm FA:W*V:,ATBA =A'9=AR i1FLL'J41'1J j J 'Aill11 km U.S. National Nuclear Security Administration + Russian Ministry of Atomic Energy

.. plus International Nonproliferation Initiatives (State, DoD, G-8, IAEA)

• Uranium Enrichment Volume 8 No. 16 April 12, 2004 II

- INSIDE HIGHLIGHTS -

The transfer of some environmental management The Service Employees International Union is charging in responsibilities to NNSA is not likely to be affected-at a new report that the Wackenhut Corporation is failing "to least in the near-term-by the resignations last week of properly secure some of our nation's most sensitive sites" DOE Under Secretary Robert Card and Assistant within the Department of Energy weapons complex. . . . 7 Secretary for Environment, Safety and Health Beverly Cook ................................ 2 Uranium Enrichment Report ....... ............ 8 Iran pledged to IAEA Director General Mohamed At the Weapons Labs/DOE Site ...... ........... 9 ElBaradei April 6 that it would step up its cooperation with the Agency to deal with the outstanding issues Wrap Up (NW&MM) .9................... 9 surrounding its nuclear program................. 2 As the international community is struggling with how to restructure the international nonproliferation regime, it now faces an interesting dilemma, with Brazil refusing to allow Russia is concerned by the U.S.' plans to research IAEA officials to thoroughly inspect a yet-to-be completed nuclear weapon concepts such as the robust nuclear uranium enrichment facility. ..................... 3 earth penetrator, warned Russian Defense Minister Sergei Ivanov during an April 7 speech ........... 10 The United States has sanctioned 13 entities from seven countries for assisting Iran's alleged programs to develop Wrap Up (P-SN&DM) ........................ 11 weapons of mass destruction ...................... 4 Calendar ............................... 1 Los Alamos and Lawrence Livermore national laboratories "have yet to fully implement the actions taken to counteract mission support problems found prior to 2001," a new General Accounting Office report concludes. ..... 5...

I I III 1 NO SOLUTION TO LIABILITY ISSUE YET, BUT Pu PROGRAM SCHEDULE STILL VALID But One-Year Delay Expected If There Is No Resolution by July The U.S.-Russian joint plutonium disposition program will still stay on schedule to start construction on the Russian Mixed-Oxide Fuel Fabrication Facility in FY05, even though the Dept. of Energy missed a self-imposed April 1 deadline to resolve the contractor liability issue. The April I deadline comes from the DOE FY05 budget request, which sets out the target dates for major milestones in the program assuming that "the issue of liability will be resolved by April 1, 2004." However, from what NW&M Monitor has learned, the schedule will be significantly delayed-as much as a year-if both sides do not come to an agreement by July. This is the message DOE officials are delivering to Congress.

(See Pu Disposition on Pg. 10)

Nuclear Weapons & Materials Monitor.A Business Service of EXCHANGEMONiTOR PUBLICATmNS, INC.

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• Washington, DC20006* 800-776-1314

• subservices@exchangernonitorcom COPYRIGHTC'20/)) EXrCHA4NGEI tMONJ70Rn PUB/il AtT9'A), INC.Al righis reserved Nopari ojflhiLpvbicalion may be reprodiced by any means vilhoulshe wril'enperfimssionof .1 publisher

il V I' 1 (Pu Dispositionfrom Pg. 1)

The April I deadline was pushed back to July because DOE was able to reach an agreement with the Russian side that is allowing U.S. officials to perform some technical evaluation and pre-licensing work that the Department previously believed would have to wait until the liability issue was resolved. However, ifthe liability dispute is not resolved by July, all of the projected milestones for the program will be moved back by one year, as it would be impossible to begin essential components of the work in 2004 due to the Russian winter.U RUSSIA DEFENSE CHIEF CRITICAL OF U.S. WORK ON NEW WEAPONS Russia is concerned by the U.S.' plans to research nuclear weapon concepts such as the robust nuclear earth penetrator, warned Russian Defense Minister Sergei Ivanov during an April 7 speech in Washington, D.C. hosted by the Center for Defense Information. According to Ivanov, it is "quite enough" to attack terrorists using conventional weapons. The new weapons concepts being studied by the U.S. are unnecessary and run the risk of "letting the genie out of the bottle" by lowering the nuclear threshold, he asserted. Much of Ivanov's speech was devoted to criticizing the expansion ofNATO to include three former Soviet states-Estonia, Latvia and Lithuania-a move he warned could prompt Russia to reevaluate its nuclear weapons doctrine. In response to questions after the speech, Ivanov also defended the necessity of the U.S.-Russia Cooperative Threat Reduction program, though at the same time stressing that Russian nuclear materials are secure.

New Weapons Would 'Destabilize' NPT Regime Ivanov said that he viewed the U.S. weapons research as "a rather dangerous thing," adding that "I think that we can actually go ahead, go along without any [new] nuclear weapons." He argued that "such weapons ... can actually destabilizethe whole regimes and controls currently in placeofproliferation."Ivanov assertedthatconventional weapons would suffice in dealing with hard and deeply buried targets, noting that research on such weapons was being conducted.

At the same time, however, Ivanov asserted that nuclear weapons continue to be necessary. "There is a lot of talk about the need to scrap strategic nuclear weapons which will allegedly deepen the partnership [between the U.S. and Russia].

The proponents of this idea are wrong, I'm afraid," Ivanov said. "I believe that the phenomenon which the political scientists call recital strategic deterrence plays in fact a positive role. ... So let us guard this heritage, especially when it is a cornerstone of strategic stability."

Continued Existence of NATO Questioned lvanov said Russia's stance on NATO expansion "is calm, but negative." In an op-ed in the New York Times expressing arguments similar to those he offered in his address, Ivanov asked "why is an organization (NATO) that was designed to oppose the Soviet Union and its allies in Eastern Europe still necessary in today's world?" Ivanov notes in the op-ed that "the alliance is gaining greater ability to control and monitor Russian territory," adding that Russia "cannot turn a blind eye as NATO's air and military bases get much closer to cities and defense complexes in European Russia."

In his CDI speech, he asserted that there is still a "window of opportunity" to improve Russian-NATO relations, but he said it was up to the United States and the alliance to do so, adding that any improvement would have to be based on mutual concessions. "If the Alliance needs partnership with Russia, it should not be built upon the disregard of Russian legitimate interests. Mutually acceptable concessions haveto be made," he said. He warned, though, that"sincethe Baltic states are now included into the alliance, should any military infrastructure be created on their territory, Russia will conduct its policy and military policy-planning based on the principles of self defense." The issue of the NATO expansion was also one of several discussed last week during a meeting between U.S. Secretary of State Colin Powell Powell and Ivanov held in Washington, State Department deputy spokesman Adam Ereli said during a press briefing earlier this month. "It was a very broad and free-flowing exchange," Ereli said.

10 Post-Soviet Nuclear & Defense Monitor

• EXCHANGEMONITOR PUBLICATIONS, INC. April 12, 2004

UNITED STATES OF AMERICA . ..

& . _ _ . l ' ,

NUCLEAR REGULATORY COMMISSION .:

ATOMIC SAFETY AND LICENSING BOARD 39 ,)I;!. 29 P3 :31 Before Administrative Judges:

G. Paul Bollwerk, 111, Chairman '

L,

.1; Frederick J. Shon q,  :...

/-!.:&.

Dr. Peter S. Lam '.

c In the Matter of Docket No. 50-400-LA CAROLINA POWER & LIGHT COMPANY ASLBP NO. 99-762-02-LA (Shearon Harris Nuclear July 29, 1999 Power Plant)

MEMORANDUM AND ORDER (Granting Request to Invoke 10 C.F.R. Part 2, Subpart K Procedures and Establishing Schedule)

In response to the Licensing Board's July 12, 1999 memorandum and order admitting petitioner Board of Commissioners of Orange County, North Carolina, (BCOC) as a party to this proceeding, see LBP-99-25, 5 0 NRC -

(July 12, 1999), in a filing dated July 21, 1999, applicant Carolina Power and Light Company (CP&L) has requested that this proceeding be conducted in accordance with the hybrid hearing procedures of 10 C.F.R. Part 2, Subpart K. In addition, CP&L has proposed a schedule for t h e ninety-day discovery period permitted under 10 C.F.R. § 2.1111, submitting the written summaries provided for under section 2.1113(a), and holding the oral argument mandated by section 2.1113(a) concerning whether there are disputed 5EC+ oa

issues of law or fact that require resolution in an evidentiary hearing. In its request, CP&L also indicated that while the staff agrees with this schedule, which would culminate in an oral argument in mid-December 1999, intervenor BCOC was unable to agree or disagree because of the unavailability of one of its experts, To obtain more information regarding BCOC's position, on July 27, 1999, we conducted a telephone conference with the parties. Citing scheduling problems regarding the availability of its experts and its counsel, BCOC suggested a schedule under which the oral argument be held in mid-January 2 0 0 0 . Both CP&L and the staff objected to this request, asserting the BCOC had failed to demonstrate sufficient grounds for its alternative schedule.

Under section 2.1109(a) (l), a timely request by any party to a spent fuel storage expansion proceeding to invoke the Subpart K hybrid hearing procedures must be approved.

Accordingly, we arant the July 21, 1999 CP&L request to proceed under Subpart K. Further, bearing in mind the various parties' concerns about scheduling as expressed during the July 27 telephone conference, we establish the following timetable for utilizing the Subpart K procedures:

Discovery Begins Monday, August 2, 1999 Discovery Ends Sunday, October 31, 1999 Written Summaries Filed Monday, December 20, 1999

Oral Argument Tuesday, January 4 , 2000 Relative to this schedule, we make the following additional observations. Although we explored with the parties the utility of using informal discovery methods (e.g.,document exchanges and witness interviews) during the first portion of the discovery period, CP&L suggested that given the limited time period involved, this would not result in any significant time or resource savings. Neither BCOC nor the staff voiced strong objections to this position. Accordingly, we will p,ermit the ab initio use of the formal discovery techniques set forth in 10 C.F.R.

§§ 2.740--744. As we noted during the telephone conference, however, we expect that all the parties will attempt to be as specific as possible in their information requests and provide access to requested documents and knowledgeable individuals to the maximum degree possible.

In connection with the discovery process, the parties also are advised of the following limitations and guidelines:

1. Absent prior leave of the Board or written stipulation, relative to each admitted contention each party may serve on the other two parties not more than fifteen interrogatories per party, including all discrete subparts, and not more than three deposition notices per party.

2. To be timely, a discovery request must permit a timely response on or before the day the discovery period closes.1 Likewise, depositions should be scheduled to conclude on or before the date discovery closes.

3, Absent some other agreement of the parties, discovery requests and responses (including requests for admissions) should be served on the Board (if required by agency rules) and the other parties by e-mail, facsimile transmission, or other means that will ensure receipt on the day of filing, with conforming paper copies to follow.

4. As part of any motion to compel/motion f o r protective order, counsel f o r the moving party shall provide a certification that he or she previously has (a) provided the opposing party to whom the motion is directed a clear and concise written statement of the asserted deficiencies or objections and the requested action relative to the discovery request; and (b) after providing this statement, consulted with that partys counsel in an attempt to resolve all the disputed matters without Board action.

Finally, for planning purposes, the parties should be aware that the Board intends to conduct the Subpart K oral 1 The filing deadlines specified f o r interrogatory, admission, and document production responses can be extended by agreement of the parties involved so long as the response does not run beyond the scheduled discovery cut-off date.

The filing deadline f o r motions to compel can be extended only by leave of the Board.

argument in the Atomic Safety and Licensing Board Panel Hearing Room at NRC Headquarters in Rockville, Maryland. In addition, the parties are advised that the Board intends to conduct one or more sessions to receive 10 C.F.R. § 2.715(a) limited appearance statements in the vicinity of the Shearon Harris facility during the first half of December 1999.

Additional details on these sessions will be provided at a later time.

It is so ORDERED.

FOR THE ATOMIC SAFETY AND LICENSING BOARD^

& i&< 3 G. Paul Bollwerk, 111 ADMINISTRATIVE JUDGE Rockville, Maryland July 29, 1999

• If the parties have any suggestions regarding potential appropriate venues for limited appearance sessions, they should contact Licensing Board Panel administrative director Jack Whetstine at (301) 415-7319 on or before Fridav, Auaust 13, 1999.

Copies of this memorandum and order were sent this date by Internet e-mail transmission to counsel for (1) applicant CP&L; (2) petitioner BCOC; and (3) the staff.

CERTIFICATE OF SERVICE I hereby certify that on April 19,2004, copies of Blue Ridge Environmental Defense Leagues Proposed Hearing Schedule and Request for Reconsideration of ASLBs Internal Deadline of August 2004 for Issuing a Decision in This Proceeding were served on the following by e-mail and/or first-class mail, as indicated below. In addition, copies of the exhibits were served by FAX.

Ann Marshall Young, Chair Susan L. Uttal, Esq.

Administrative Judge Antonio Fernandez, Esq.

Atomic Safety and Licensing Board Kathleen A. Kannler, Esq.

U.S. Nuclear Regulatory Commission Office of the General Counsel Mail Stop: T-3F23 Mail Stop 15 D2 1 Washington, D.C. 20555 U.S. Nuclear Regulatory Commission E-mail: AMY@nrc.gov Washington, D.C. 20555-0001 E-mail: s l u @ n r c.gov axf 2@nrc.gov, Anthony J. Baratta KAKl@nrc.sov Administrative Judge Atomic Safety and Licensing Board Mary Olson U.S. Nuclear Regulatory Commission Southeast Office, Nuclear Information and Mail Stop: T-3F23 Resource Service Washington, D.C. 20555 P . 0 Box 7586 E-mail: AJB5@nrc.gov Asheville, NC 28802 E-mail: n i r s .se@rnindsPrins.corn Office of Commission Appellate Adjudication U.S. Nuclear Regulatory Commission Lisa F. Vaughn, Esq.

Mail Stop: 0-16C1 Legal Dept. (PBO5E)

Washington, D.C. 20555 Duke Energy Corporation 526 South Church Street (EC11X)

Thomas S. Elleman Charlotte, NC 28201-1006 Administrative Judge E-mail: 1f Vaughn@duke- e n e r g y . corn Atomic Safety and Licensing Board 4760 East Country Villa Drive Janet Marsh Zeller, Executive Director Tucson, AZ 85718 Blue Ridge Environmental Defense League E-mail: ellernan@eos.n c s u . edu P.O. Box 88 Glendale Springs, NC 28629 E-mail: BREDL@skybest.corn I David A. Repka, Esq.

, Anne W. Cottingham, Esq.

Winston & Strawn, LLP 1400 L Street, N.W.

Washington, D.C. 20005-3502 E-mail: drepka@winston.corn acottim@winston.com

2 Office of the Secretary (original and two copies)

ATTN: Docketing and Service U.S. Nuclear Regulatory Commission Mail Stop: 0-16C1 Washington, D.C. 20555 E-mail: HEARINGDOCKETanrc .go7 Diane Curran