ML102380578

NRC Staff'S Answer to Applicant Appeal of Atomic Safety and Licensing Board Decision (LBP-10-15)

ML102380578
Person / Time
Site:	Diablo Canyon
Issue date:	08/26/2010
From:	Catherine Kanatas NRC/OGC
To:	NRC/OCM
SECY RAS
References
50-275-LR, 50-323-LR, ASLBP 10-900-01-LR-BD01, LBP-10-15, RAS 18467
Download: ML102380578 (26)

Text

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION In the Matter of )

)

PACIFIC GAS & ELECTRIC COMPANY ) Docket Nos. 50-275-LR

) 50-323-LR (Diablo Canyon Nuclear Power Plant, )

Units 1 and 2) )

NRC STAFFS ANSWER TO APPLICANTS APPEAL OF ATOMIC SAFETY AND LICENSING BOARD DECISION (LBP-10-15)

Catherine E. Kanatas Maxwell C. Smith Lloyd B. Subin Susan Uttal Counsel for NRC Staff August 26, 2010

TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ........................................................................................................... ii INTRODUCTION .......................................................................................................................... 1 PROCEDURAL HISTORY ............................................................................................................ 2 DISCUSSION ................................................................................................................................ 2 I. Contention TC-1 is Outside the Scope of License Renewal and Lacks an Adequate Basis ................................................................................................................................. 2 II. Contention EC-1 Demonstrates a Genuine Dispute on Information Omitted in the Application......................................................................................................................... 5 A. In Part, Contention EC-1 Lacks a Sufficient Basis ...................................................... 6 B. 40 C.F.R. § 1502.22 Does Not Apply in this License Renewal Proceeding................ 7 III. Contention EC-2 Lacks an Adequate Basis ...................................................................... 8 IV. Admission of Contention EC-4 Contravenes Commission Precedent............................. 15 CONCLUSION ............................................................................................................................ 19

TABLE OF AUTHORITIES Page JUDICIAL DECISIONS Augusta Mut. Ins. v. Mason, 274 Va. 199 (2007) .......................................................................... 5 Marsh v. Oregon Natural Resources Council, 489 U.S. 360 (1989) ............................................. 9 New Jersey Department of Environmental Protection v. NRC, 561 F.3d 132 (3d Cir 2009)....... 16 No GWEN Alliance of Lane County, Inc. v. Aldridge, 855 F.2d 1380 (9th Cir.1988) .................. 16 SLOMFP v. NRC, 449 F.3d 1016 (9th Cir. 2006) .................................................................. 16-18 Town of Winthrop v. FAA, 535 F.3d 1 (1st Cir. 2008) .................................................................... 7 Weinberger v. Catholic Action of Hawaii/Peace Educ. Project, 454 U.S. 139 (1981) ................. 18 ADMINISTRATIVE DECISIONS Commission AmerGen Energy Co. (Oyster Creek Nuclear Generating Station), CLI-07-8, 65 NRC 124 (2007) ................................................................................................................ 15-18 Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3),

CLI-04-36, 60 NRC 631 (2004) ................................................................................................... 12 Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3),

CLI-05-24, 62 NRC 551 (2005) ..................................................................................................... 8 Duke Energy Corp. (McGuire Nuclear Station, Units 1 and 2; Catawba Nuclear Station, Units 1 and 2), CLI-02-17, 56 NRC 1 (2002) ........................................................................ 11, 12 Duke Energy Corp. (McGuire Nuclear Station, Units 1 and 2; Catawba Nuclear Station, Units 1 and 2), CLI-02-28, 56 NRC 373 (2002) ............................................................................ 7 Entergy Nuclear Vermont Yankee LLC and Entergy Nuclear Operations, Inc. (Vermont Yankee Nuclear Power Station), Entergy Nuclear Generation Co. & Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), CLI-07-03, 65 NRC 13 (2007) ...................... 10 Entergy Nuclear Generating Company and Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), CLI-10-11, 71 NRC __ (Mar. 26, 2010)(slip op.) .................................... 7 Florida Power & Light Co. (Turkey Point Nuclear Generating Plant, Units 3 and 4),

CLI-01-17, 54 NRC 3 (2001) ........................................................................................... 13, 15, 17

- iii -

Pacific Gas & Elec. Co. (Diablo Canyon Power Plant Independent Spent Fuel Storage Installation), CLI-08-1, 67 NRC 1 (2008) .................................................................................... 18 Pacific Gas & Elec. Co. (Diablo Canyon Power Plant Independent Spent Fuel Storage Installation), CLI-08-26, 68 NRC 509 (2008) .............................................................................. 18 Private Fuel Storage, L.L.C.(Independent Spent Fuel Storage Installation), CLI-04-22, 60 NRC 125 (2004) ..................................................................................................................... 11 Progress Energy Carolinas, Inc. (Shearon Harris Nuclear Power Plant, Units 2 and 3),

CLI-09-08, 69 NRC 317 (2009) ................................................................................................... 12 Atomic Safety and Licensing Board Pacific Gas & Electric Co. (Diablo Canyon Nuclear Power Plant, Units 1 and 2),

LBP-10-15, 72 NRC __ (Aug. 4, 2010)(slip op.) ..................................................................passim Entergy Nuclear Operations, (Indian Point Nuclear Generating Station, Units 2 and 3),

LBP-08-13, 68 NRC 43 (2008) ...................................................................................................... 7 REGULATIONS 10 C.F.R. § 2.309........................................................................................................................ 13 10 C.F.R. § 2.309(f)(1) ................................................................................................................ 12 10 C.F.R. § 2.309(f)(1)(ii) ...................................................................................................... 11, 12 10 C.F.R. § 2.309(f)(1)(v) ............................................................................................................ 12 10 C.F.R. § 2.309(f)(1)(vi) ..................................................................................................... 11, 12 10 C.F.R. § 2.311(a) ..................................................................................................................... 1 10 C.F.R. § 2.311(c) ..................................................................................................................... 1 10 C.F.R. § 2.311(d)(1) ................................................................................................................. 2 10 C.F.R. § 2.323(f)(1) ........................................................................................................ 2, 9, 16 10 C.F.R. § 2.335...................................................................................................................... 2, 8 10 C.F.R. § 2.335(a) ................................................................................................................. 2, 8 10 C.F.R. §§ 2.335(a)-(b) ............................................................................................................ 12 10 C.F.R. § 2.335(c) ..................................................................................................................... 2 10 C.F.R. § 2.335(d) ........................................................................................................... 2, 9, 10

- iv -

10 C.F.R. § 2.341(f))(2) ................................................................................................................. 2 10 C.F.R. §50.92........................................................................................................................... 9 10 C.F.R. Part 51 .............................................................................................................. 8, 10, 17 10 C.F.R. § 51.53(c)(3)(ii)(L) ................................................................................................. 5, 6, 7 10 C.F.R. Part 54 .................................................................................................................... 3, 17 10 C.F.R. § 54.29...................................................................................................................... 3, 5 10 C.F.R. § 54.29(a) ..................................................................................................................... 3 40 C.F.R. § 1502.22.................................................................................................................. 5, 7 MISCELLANEOUS Applicants Notice of Appeal of LBP-10-15 (Aug. 16, 2010)

(ADAMS Accession No. ML102280603) ..............................................................................passim License Renewal Application, Diablo Canyon Power Plant Unit 1 and Unit 2, Facility Operating License Nos. DPR-80 and DPR-82, Appendix E (2009)

(ADAMS Accession No. ML0933401263) ............................................................................... 6, 17 NRC Staffs Answer to the San Luis Obispo Mothers for Peace Request for Hearing and Petition to Intervene, at 14-26 (Apr. 16, 2010) (ADAMS Accession No. ML101060667) .....passim NRC Staffs Petition for Interlocutory Review of Atomic Safety and Licensing Board Decision (LBP-10-15) Admitting an Out of Scope Safety Contention and Improperly Recasting an Environmental Contention (August 19, 2010)(ADAMS Accession No. ML102310565) .......passim NRC Staffs Response to the Petition for Waiver of Commission Regulations Filed by San Luis Obispo Mothers for Peace (April 16, 2010)

(ADAMS Accession No. ML1010606570) ............................................................................... 9, 11 NUREG-1437 "Generic Environmental Impact Statement (GEIS) for License Renewal of Nuclear Plants" (May 1996)(ADAMS Accession No. ML040690705) ..............................passim Request for Hearing and Petition to Intervene by San Luis Obispo Mothers for Peace (Mar. 22, 2010) (ADAMS Accession No. ML100810441) ....................................................passim San Luis Obispo Mothers for Peaces Brief Regarding Waiver Standard (May 13, 2010) (ADAMS Accession No. ML1013306290) ............................................................ 9 Transcript of Diablo Canyon Nuclear Plant Oral Arguments (May 26, 2010)

(ADAMS Accession No. ML101590109) ............................................................................... 16, 17

August 26, 2010 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION In the Matter of )

)

PACIFIC GAS & ELECTRIC COMPANY ) Docket Nos. 50-275-LR

) 50-323-LR (Diablo Canyon Nuclear Power Plant, )

Units 1 and 2) )

NRC STAFFS ANSWER TO APPLICANTS APPEAL OF ATOMIC SAFETY AND LICENSING BOARD DECISION (LBP-10-15)

INTRODUCTION On August 16, 2010, Pacific Gas and Electric Company (PG&E or Applicant),

pursuant to 10 C.F.R. §§ 2.311(a) and (c), filed an appeal from the Atomic Safety and Licensing Boards (Board) August 4, 2010 decision1 granting a request for hearing and permitting the San Luis Obispo Mothers for Peace (SLOMFP) to intervene in the proceeding for the renewal of the Diablo Canyon Nuclear Power Plant (DCNPP), Units 1 and 2, operating licenses.2 The Nuclear Regulatory Commission (NRC) staff (Staff) hereby files its answer to the Applicants Appeal.

As set forth below, the Staff agrees in part, and disagrees in part, with the positions reflected in PG&Es Appeal.

1 Pacific Gas & Electric Co. (Diablo Canyon Nuclear Power Plant, Units 1 and 2), LBP-10-15, 72 NRC __ (Aug. 4, 2010)(slip op.) (Order).

2 Applicants Notice of Appeal of LBP-10-15; Applicants Brief in Support of Appeal from LBP 15 ((Aug. 16, 2010) Agency Document Access & Management System (ADAMS) Accession No. ML102280603) (Appeal).

PROCEDURAL HISTORY SLOMFP filed five contentions related to the application to renew the operating licenses for DCNPP Units 1 and 2.3 The Board admitted four contentions (Technical Contention 1 (TC-1), Environmental Contention 1 (EC-1), Environmental Contention 2 (EC-2) and Environmental Contention 4 (EC-4)), referred EC-2 to the Commission for a ruling on waiver of a rule of general applicability under 10 C.F.R. § 2.335,4 denied admission of EC-3, and referred several novel legal and policy questions to the Commission with regard to EC-4, pursuant to 10 C.F.R. § 2.323(f)(1).5 On August 16, 2010, PG&E appealed the admission of all four contentions under 10 C.F.R. § 2.311(d)(1).6 DISCUSSION I. Contention TC-1 is Outside the Scope of License Renewal and Lacks an Adequate Basis In its Appeal, PG&E asserts that TC-1, which challenges PG&Es ability to manage aging in light of recent inspection reports regarding the DCNPP licensing basis, raises current 3

Request for Hearing and Petition to Intervene by San Luis Obispo Mothers for Peace (Mar. 22, 2010) (ADAMS Accession No. ML100810441) (Petition to Intervene).

4 Contention EC-2 challenges NRCs Part 51 regulations. Under 10 C.F.R. § 2.335(a), no rule or regulation of the Commission is subject to attack in any adjudicatory proceeding absent a waiver or exception. SLOMFP submitted a waiver petition, and the Board determined that SLOMFP made a prima facie case for waiver under 10 C.F.R. § 2.335(c). Therefore, the Board certified the issue to the Commission under 10 C.F.R. § 2.335(d) for a determination of whether a waiver is warranted.

5 Order at 96.

6 Appeal at 1. PG&E incorrectly cited 10 C.F.R. § 2.311(c) instead of 10 C.F.R. § 2.311(d)(1). On August 19, 2010, the Staff filed an appeal of the Boards decision as to the admission of TC-1 and EC-1, pursuant to 10 C.F.R. § 2.341(f)(2). NRC Staffs Petition for Interlocutory Review of Atomic Safety and Licensing Board Decision (LBP-10-15) Admitting an Out of Scope Safety Contention and Improperly Recasting an Environmental Contention (August 19, 2010) (ADAMS Accession No. ML102310565)

(Petition).

operating issues that are outside the scope of license renewal.7 As discussed in the Staffs petition for interlocutory review8 and answer opposing admission of TC-1 before the Board,9 the Staff also believes that TC-1 is outside the scope of + license renewal. The Commission has clearly indicated that the scope of license renewal is limited to evaluating the adequacy of an applicants plans to manage aging. The license renewal review does not examine past instances of non-compliance with operating requirements to predict whether an applicant will effectively implement those plans. Rather, the applicants implementation of the aging management plans is left to the NRCs usual oversight process.10 Therefore, the Staff supports the portion of PG&Es Appeal that contends TC-1 is out of scope.11 PG&E also contends that TC-1, as admitted by the Board, lacks a sufficient basis.12 The Staff agrees that TC-1 lacks a sufficient basis, but for reasons other than those stated by PG&E.

PG&E contends that, assuming the Board was correct about the scope of license renewal, it 7

Appeal at 2-11.

8 Petition at 8-18.

9 NRC Staffs Answer to the San Luis Obispo Mothers for Peace Request for Hearing and Petition to Intervene, at 15-22 (Apr. 16, 2010) (ADAMS Accession No. ML101060667) (Answer).

10 Petition at 8-18; Answer at 15-22.

11 However, the Staff does not agree with PG&Es assertion that the Board accurately interpreted 10 C.F.R. § 54.29(a) to require a predictive finding. Appeal at 5-6. PG&Es interpretation of § 54.29(a) appears internally inconsistent: PG&E states that the regulation requires the NRC to predict whether aging management activities have been or will be taken, but also asserts that the relevant inquiry under Part 54 is not whether those programs will be implemented. While the Staff agrees that § 54.29(a) only requires the NRC to judge the adequacy of an applicants aging management program (AMP), as discussed in the Staffs Petition, the most logical way to read § 54.29 is to interpret the word will to indicate a statement of intent - not a statement about what will actually occur in the future. Petition at 17-18 & n. 65. This creates a more natural reading of the regulation, in keeping with Commission precedent, which requires the Staff to judge the adequacy of the AMPs as intended for implementation, not to predict whether an applicant will actually implement an AMP. Id. at 18. Whether the applicant actually implements the AMP is left to the Staffs usual oversight process, which involves no such guess-work. Id.

12 Appeal at 11-14.

nonetheless failed to link the issues raised by TC-1 to that scope.13 The Board held that in narrow circumstances an applicants ability to implement an AMP and/or manage aging in accordance with the [current licensing basis (CLB)] during the [period of extended operation (PEO)] can be informed by the applicants past performance.14 The Board concluded that TC-1 presented such narrow circumstances because it raised issues related to PG&Es ability to recognize, understand, and manage DCNPPs design/licensing basis.15 The Staff asserted that TC-1 lacks an adequate basis because it does not provide sufficient facts to challenge a finding of reasonable assurance that PG&E will comply with the CLB during the PEO.16 TC-1 asserts that in light of the identified inspection findings, PG&E has not demonstrated that its plan is sufficient to provide reasonable assurance that it will comply with the CLB during the PEO.17 But, the inspection findings themselves, while significant, are simply not of the quantity or magnitude that could undermine a Staff finding of reasonable assurance.18 The Boards response to this argument was that it went to the merits of the case.19 But the Boards response misinterpreted the Staffs argument. The Staffs argument was akin to a common law demurrer: even assuming all the facts alleged by SLOMFP were correct, 13 Id. at 11.

14 Order at 89-90.

15 Id. at 91-92.

16 Answer at 22.

17 Id. See also Petition to Intervene at 5-6.

18 Answer at 22-26.

19 Order at 84.

SLOMFP could still not prevail on TC-1.20 The issues TC-1 raises, without more, are not material to an NRC finding of reasonable assurance for purposes of license renewal for DCNPP. Consequently, these conclusions do not prevent the NRC from making the necessary finding required by 10 C.F.R. § 54.29 for license renewal.

II. Contention EC-1 Demonstrates a Genuine Dispute on Information Omitted in the Application As admitted and recast by the Board, EC-1 states that the Environmental Report (ER) does not contain sufficient information to demonstrate that PG&Es severe accident mitigation alternatives (SAMA) analysis meets the requirements of 40 C.F.R. § 1502.22, the National Environmental Policy Act (NEPA), or the Commissions regulations implementing NEPA, specifically 10 C.F.R. § 51.53(c)(3)(ii)(L).21 Specifically, EC-1 alleges that the SAMA analysis does not adequately account for the newly-discovered Shoreline Fault near DCNPP. PG&E states that the contention does not establish a genuine dispute with the SAMA analysis; that 40 C.F.R. § 1502.22 does not apply to this license renewal proceeding; and even if 40 C.F.R. § 1502.22 were applicable, consideration of the Shoreline Fault is not essential to a choice among alternatives.22 As explained in the Staffs Answer to SLOMFPs Petition for a hearing, EC-1 is a contention of omission because the SAMA evaluation contained in the ER omits a discussion of the Shoreline Fault.23 As a result, the SAMA analysis did not satisfy NRC implementing 20 See Augusta Mut. Ins. Co. v. Mason, 274 Va. 199, 204, 645 S.E.2d 290, 293 (2007) (stating that a demurrer challenges whether a pleading states a cause of action upon which a court may grant relief, assuming all pleaded facts are true).

21 Order at 25-26.

22 Appeal at 14-20.

23 Answer at 28-29.

regulation 10 C.F.R. § 51.53(c)(3)(ii)(L). Therefore the omission is material. Contrary to PG&Es assertion, the Staff does not mistakenly assume or presume that there is an omission.

Although PG&E asserts that its ER addressed the seismic risks associated with the Shoreline Fault,24 PG&Es SAMA analysis did not indicate how or whether PG&Es ER considered the effects of the Shoreline Fault in deriving the SAMA analysis.25 Moreover, PG&Es bounding arguments go to the merits in scoping the SAMA, not on what was considered for purposes of NEPAs hard-look consideration.

A. In Part, Contention EC-1 Lacks a Sufficient Basis However, the Staff agrees with PG&E that the remainder of EC-1, suggesting that a complete NEPA analysis must await the results of future studies, is inadmissible for lack of a sufficient basis.26 Specifically, PG&E points out that the Boards reasoning appears to hinge on the fact that current studies of the Shoreline Fault are preliminary and further studies will reveal something significant to the analysis.27 The Staff, in its answer to SLOMFPs Petition for a hearing, opposed awaiting further study of the fault before acting in this proceeding because SLOMFP did not demonstrate that the results of future studies will likely impact PG&Es SAMA analysis.28 PG&E cites Commission precedent for the assertion that, The question is not whether 24 Appeal at 16.

25 License Renewal Application, Diablo Canyon Power Plant Unit 1 and Unit 2, Facility Operating License Nos. DPR-80 and DPR-82, Appendix E, Attachment F (2009) (ADAMS Accession No. ML093340123 (Environmental Report).

26 Answer at 28, 30-33.

27 Appeal at 19 citing Order at 25.

28 Answer at 28.

the SAMA analysis can be refined further, but rather whether the Petitioner has demonstrated that potentially cost-beneficial SAMAs have been overlooked.29 This statement may be correct with respect to SAMAs in general, but where, as here, the Applicant has failed to include relevant information in a SAMA analysis, the Staff is of the view that such omissions must be subject to challenge for 10 C.F.R. § 51.53(c)(3)(ii)(L) to have any meaning.30 PG&E notes that a sensitivity study indicates that the seismic risk could significantly increase, yet it would not alter the results of the SAMA analysis.31 This may be so, but without any demonstration that the Shoreline Fault itself was considered in the SAMA analysis, the application is incomplete.

Moreover, the Commission has also stated that agencies have the discretion to draw the line and move forward with decision making.32 In this case, the Staff is of the view that more information is needed before the line may be drawn.33 B. 40 C.F.R. § 1502.22 Does Not Apply in this License Renewal Proceeding As stated in the Staffs Petition, the Staff agrees with PG&E that 40 C.F.R. § 1502.22, the regulation promulgated by the Council on Environmental Quality (CEQ), does not apply to 29 Appeal at 16 (citing Entergy Nuclear Generating Company and Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), CLI-10-11, 71 NRC __ (Mar. 26, 2010)(slip op. at 37).

30 See Duke Energy Corp. (McGuire Nuclear Station, Units 1 and 2; Catawba Nuclear Station, Units 1 and 2), CLI-02-28, 56 NRC 373, 382 (2002) (stating that intervenors original admitted contention challenged the failure to discuss the Sandia study).

31 Appeal at 19.

32 Pilgrim, CLI-10-11, 71 NRC ___ (slip op. at 37) (quoting Town of Winthrop v. FAA, 535 F.3d 1, 11-13 (1st Cir. 2008)).

33 Cf. Entergy Nuclear Operations, (Indian Point Nuclear Generating Station, Units 2 and 3), LBP-08-13, 68 NRC 43, 105-110 (2008) (finding that a SAMA analysis need not address new seismic contentions when the NRC Staff opposed the contention because it failed to demonstrate that new information about seismic activity would change the SAMA analysis and the Petitioners did not explain why the most recent information was sufficiently different from the earlier data to make a material change in the conclusions of the seismic SAMA analysis).

this license renewal proceeding.34 The NRC is not bound by substantive CEQ regulations.35 However, the Staff disagrees with PG&Es assertion that even if the CEQ regulations were applicable, the omitted information is not essential.36 A complete SAMA analysis, required by Part 51, is not possible until the Staff receives this information. Therefore, consideration of the Shoreline Fault is essential to determine its effect on the current SAMA analysis.37 III. Contention EC-2 Lacks an Adequate Basis In its Appeal, PG&E asserts that under 10 C.F.R. § 2.335, the Boards recommendation of a waiver of a rule of general applicability is automatically certified to the Commission and is not a subject of PG&Es appeal.38 The Staff agrees that the Boards recommendation is automatically certified to the Commission, but notes that the Boards Order creates uncertainty in how SLOMFP can meet the fourth Millstone factor. In the Millstone proceeding, the Commission established a four-factor test for waiving a rule of general applicability under 10 C.F.R. § 2.335, which states that absent a waiver or exception, a rule or regulation of the Commission is not subject to challenge in an adjudication.39 The fourth Millstone factor requires a demonstration that waiver of a regulation is necessary to reach a significant safety problem.40 Because EC-2 raises environmental issues, and Millstones fourth factor currently only 34 Petition at 21-25.

35 Answer at 26 n.22.

36 Appeal at 18-20.

37 Answer at 29.

38 Appeal at 20.

39 Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3), CLI 24, 62 NRC 551, 559-60 (2005) (outlining four factors). See also 10 C.F.R. § 2.335(a).

40 Millstone, CLI-05-24, 62 NRC 551, 559-60 (2005) (emphasis added).

addresses safety issues, Staff and SLOMFP proposed separate approaches for modifying the fourth Millstone factor to include environmental issues.41 The Boards Order expanded the Commissions Millstone test to include environmental issues in the fourth factor.42 The Board, however, did not indicate whether it was adopting SLOMFPs interpretation for modifying the Millstone test, or the Staffs interpretation. Instead, the Board merely indicated it agreed with SLOMFP and the Staff that a showing must be made to justify a waiver.43 Since SLOMFP and Staff did not agree as to how or why the Millstone test should be modified to address EC-2, the Boards Order creates uncertainty in how to address this issue.44 PG&E also contends that the Board contravened Commission regulations by considering the admissibility of Contention EC-2 in conjunction with the waiver request.45 Under 10 C.F.R. § 2.335(d), once the Board determines a prima facie case for waiver has been made, the Board must certify the matter directly to the Commission, before ruling on the petition. Thus, the Staff 41 SLOMFP proposed modifying Millstones fourth factor to make it consistent with 10 C.F.R. § 50.92 and Marsh v. Oregon Natural Resources Council, 489 U.S. 360 (1989), and to include new and significant information (also modifying Millstones second factor). San Luis Obispo Mothers for Peaces Brief Regarding Waiver Standard, at 2-3, 5 (May 13, 2010) (ADAMS Accession No. ML1013306290)

(SLOMFPs Waiver Brief). The Staffs more limited argument was that the Commission was concerned with waiving its rules only for substantive, significant issues, and that Millstone should be liberally construed to also permit waiver of regulations to reach environmental issues that are significant. NRC Staffs Response to the Petition for Waiver of Commission Regulations Filed by San Luis Obispo Mothers for Peace, at 4 n.3 (April 16, 2010) (ADAMS Accession No. ML1010606570) (Staff Waiver Response).

42 Order at 44 n. 56. See also SLOMFPs Waiver Brief at 3. See Staff Waiver Response at 4 n.3.

Under Millstone, the Commission stated that it would only waive application of a rule if a party demonstrated that the waiver was necessary to reach a significant safety problem. See supra note 40.

43 Order at 44 n.56.

44 Notably, the Boards Order expanded Commission precedent, using interpretive arguments made by SLOMFP and the Staff. The Board, however, did not consider this to present novel legal or policy issues that would benefit from Commission review. 10 C.F.R. § 2.323(f)(1).

45 Appeal at 21 n. 16. PG&E cited 10 C.F.R. § 2.335(c) for this proposition. The correct citation is 10 C.F.R. § 2.335(d).

agrees that a ruling on EC-2 should be held in abeyance pending the Commissions ruling on waiver.46 Additionally, PG&E asserts that during its improper admissibility analysis, the Board failed to recognize that SLOMFP did not present information challenging the analysis and conclusions in the ER related to spent fuel pool accidents.47 PG&E notes that the ER incorporated the conclusions of the 1996 Generic Environmental Impact Statement48 (GEIS) by reference.49 Typically, an intervenor may only challenge those findings by seeking a waiver.50 PG&E notes that the spent fuel impacts analysis in the GEIS would not be eliminated if a waiver were granted.51 Instead, a waiver would only permit SLOMFP to offer a contention challenging conclusions in the ER regarding spent fuel pool accidents.52 Because SLOMFP 46 Appeal at 21 n.16. Under 10 C.F.R. § 2.335(d), after finding a prima facie case for waiver, the presiding officer shall, before ruling on the petition, certify the matter directly to the Commission.

(emphasis added). Moreover, the Commission may, among other things, on the basis of the petition, affidavits, and any response, determine whether the application of the specified rule or regulation (or provision thereof) should be waived or an exception be made. The Commission may direct further proceedings as it considers appropriate to aid its determination.

47 Appeal at 21 (noting that Board made a threshold error during its assessment of admissibility).

48 NUREG-1437, Vol. 1, Generic Environmental Impact Statement for License Renewal of Nuclear Plants (May 1996)(ADAMS Accession No. ML040690705).

49 Appeal at 21. The GEIS findings have been expressly incorporated into Part 51 of NRCs regulations. Therefore, the environmental analysis in the GEIS may not be challenged in litigation unless the rule is waived by the Commission for a particular proceeding or the rule itself is suspended or altered in a rulemaking proceeding. Entergy Nuclear Vermont Yankee LLC and Entergy Nuclear Operations, Inc.

(Vermont Yankee Nuclear Power Station), Entergy Nuclear Generation Co. & Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), CLI-07-03, 65 NRC 13, 17-18 (2007).

50 Vermont Yankee, CLI-07-03, 65 NRC at 17-18.

51 Appeal at 21. A waiver would only waive Table B in App. B of Subpt. A. of Part 51 (i.e.,

Commission approval of a rule waiver could allow litigation of a contention on a Category 1 issue).

Vermont Yankee, CLI-07-03, 65 NRC at 20. The analysis underlying the regulation, however, would remain and would have to be challenged.

failed to dispute the analysis, conclusions, or findings in the GEIS as to the probability or impacts of spent fuel pool accidents, PG&E argues that EC-2 is inadmissible under 10 C.F.R. § 2.309(f)(1)(ii) and (vi).53 The Staff agrees that SLOMFP did not provide information that undermined the analysis and conclusions in the GEIS.54 While SLOMFP did argue that Diablo Canyon was excluded from consideration in the 2009 Draft GEIS,55 SLOMFP did not show how this challenged the conclusions in the GEIS, which considered all reactors56 and on which PG&E relied in the ER.57 The Commission has clearly stated that evidence must be more than mere assertions for a contention to be admissible.58 SLOMFP only asserted that the GEISs analysis of the environmental impacts of on-site spent fuel storage was inadequate, and did not produce any evidence or testimony to demonstrate that the discussion in the GEIS is insufficient.59 Rather, SLOMFP argued that the 2009 Draft GEIS did not adequately assess the risks of seismic

(. . .continued) 52 Appeal at 21.

53 Id. at 21-22.

54 Answer at 35-39 (noting that SLOMFPs discussion in support of EC-2 fails to claim any deficiency in GEIS itself).

55 Order at 28-29.

56 GEIS at iii. (The analyses in the GEIS encompass all operating light-water reactors).

57 Order at 42-43 (Board agrees with Staff that the 1996 GEIS is a controlling document analyzing generic environmental impacts for license renewal). See Staff Waiver Response at 10; Answer at 36.

58 Duke Energy Corp. (McGuire Nuclear Station, Units 1 and 2; Catawba Nuclear Station, Units 1 and 2), CLI-02-17, 56 NRC 1, 8 (2002). Answer at 31, 33. See also Private Fuel Storage, L.L.C.(Independent Spent Fuel Storage Installation), CLI-04-22. 60 NRC 125, 139 (2004)(noting that while Commission does not expect petitioner to prove its contention at pleading stage, Commission does require petitioner to show genuine dispute warranting hearing).

59 Answer at 38. Petition to Intervene at 16-20.

accidents at spent fuel pools (SFP). But, SLOMFP failed to link any deficiencies in the 2009 Draft GEIS to the 1996 GEIS cited in PG&Es application. Therefore, under the Commissions regulations and precedent, SLOMFP did not meet its burden as a petitioner60 to provide a sufficient basis to support EC-2, namely by making some demonstration that the SFP accident analysis in the 1996 GEIS is invalid, non-conservative, or otherwise faulty.61 Thus, EC-2 is inadmissible under 10 C.F.R. § 2.309(f)(1) because SLOMFP did not demonstrate a deficiency in the current, applicable GEIS.62 Notably, the Boards Order recognizes that SLOMFP has the burden of providing evidence that the GEIS is invalid.63 But, the Boards Order then improperly places the burden on PG&E and the Staff to provide evidence that the GEIS remains valid.64 Elsewhere in the Order, the Board stated:

[i]n the absence of evidence that the 1996 GEIS relies on sufficient information to reach a conclusion applicable to DCNPP regarding the impacts of a seismically-induced SFP accident, we find that SLOMFP has made at least a prima facie showing that special circumstances exist at DCNPP that render the generic SFP conclusions inapplicable to DCNPP, but only with regard to seismically-induced SFP accidents.65 60 Progress Energy Carolinas, Inc. (Shearon Harris Nuclear Power Plant, Units 2 and 3), CLI 08, 69 NRC 317, 325 (2009) ([T]he initial burden of showing whether the contention meets our admissibility standards still lies with the petitioner.) See 10 C.F.R. §§ 2.335(a)-(b) (outlining partys duty to submit petition sufficient to show special circumstances exist to waive specified Commission rule or regulation). See also Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3), CLI-04-36, 60 NRC 631 (2004); McGuire/Catawba, CLI-02-17, 56 NRC at 8.

61 10 C.F.R. §§ 2.335(a),(b); 10 C.F.R. §§ 2.309(f)(1)(v),(vi). See also Millstone, CLI-04-36, 60 NRC at 631; McGuire/Catawba, CLI-02-17, 56 NRC at 8.

62 Answer at 35-39. The Staff disagrees with PG&E only as to which parts of 10 C.F.R. § 2.309(f)(1) SLOMFP failed to meet. Specifically, the Staff argued that SLOMFP fails to meet 10 C.F.R. §§ 2.309(f)(1)(v) and (vi). Answer at 35-39. In contrast, PG&E argues that SLOMFP fails to meet 10 C.F.R.

§§ 2.309(f)(1)(ii) and (vi). Appeal at 22.

63 Order at 50 n. 65, 66.

64 Id. at 43.

65 Id.

This language suggests that the Board confused who held the burden of proof with respect to EC-2. As in the waiver analysis, in the contention admissibility analysis the burden rested on SLOMFP to show that the GEIS, relied on by the ER, was deficient. But, the Boards ruling regarding waiver and contention admissibility suggests that the burden rested with PG&E and the Staff to demonstrate that the 1996 GEIS was still valid. With this ruling, the Board fundamentally altered the burden of proof for waivers and contention admissibility under the Commissions regulations, and improperly admitted a contention that did not meet the requirements of 10 C.F.R. § 2.309. Thus, the Boards ruling is clearly erroneous.

PG&E asserts that the Boards Order improperly found that bounding analyses cannot satisfy NEPA.66 PG&E points out that the GEIS concluded that the environmental impacts of SFP accidents are bounded by reactor accidents at full power, and that the likelihood of a fuel cladding fire is remote, even under a severe seismically generated accident causing a catastrophic failure of the pool.67 Further, PG&E notes that these GEIS findings are supported by Commission precedent and numerous studies regarding the risks of spent fuel pool accidents.68 PG&E notes that a bounding analysis comports with an approach that the Board implied would be acceptable (i.e., that a proper analysis could demonstrate that an event is remote and speculative).69 The Staff agrees that the GEIS contains a SFP accident analysis adequate to satisfy 66 Appeal at 24 (The Board erred in finding that a bounding analysis is unacceptable under NEPA).

67 Id. at 26 (citing GEIS at 6-72, 6-75).

68 Id. at 23-26. Florida Power & Light Co. (Turkey Point Nuclear Generating Plant, Units 3 and 4), CLI-01-17, 54 NRC 3, 22 n. 11 (2001).

69 Appeal at 26. Order at 49.

NEPA, and notes that the NRC studies cited by PG&E confirm that this analysis is robust. The Staff does not, however, read the Boards Order as finding that a bounding analysis is unacceptable under NEPA. Instead, the Staff reads the Boards Order as finding the bounding analysis in the GEIS unacceptable in this particular instance, given new information in the 2009 Draft GEIS and related to the Shoreline Fault.70 Therefore, the Staff opposes the portion of PG&Es appeal construing the Boards ruling to hold that a bounding analysis is unacceptable under NEPA. Regardless, the Staff agrees with PG&E that the Board erred in admitting EC-2, because SLOMFP did not show how the GEISs bounding analysis related to spent fuel pool impacts was undermined by the 2009 Draft GEIS or information related to the Shoreline Fault.

Finally, the Staff does not agree with PG&Es argument that EC-2 is completely a SAMA contention.71 Instead, the Staff agrees with the Board that EC-2 raises both SAMA and non-SAMA issues.72 Most of the language in EC-2 focuses on the ER in general. The contention asserts that [t]he analysis should consider a full spectrum of potential causes including seismic contributors and the consequences of those contributors including not only health effects but economic and societal effects.73 But, in other places, EC-2 appears to also assert a SAMA contention, In addition, the [ER] should address alternatives for avoiding or mitigating those impacts.74 Therefore, to the extent EC-2 is a SAMA contention, the Staff agrees that EC-2 is 70 Order at 41-44.

71 Appeal at 26-27.

72 Order at 47 (It is not clear whether EC-2 is a SAMA contention.). See also Order at 48 n. 64.

73 Petition to Intervene at 18.

74 Id. at 19.

inadmissible because it is contrary to Commission precedent.75 Further, to the extent EC-2 is a non-SAMA contention, the Staff believes the Board erred in admitting EC-2, as SLOMFP did not meet their burden of providing evidence that the GEISs SFP accident analysis is inadequate.

Thus, because EC-2 contravenes Commission precedent and regulations and improperly changes the burdens of proof Staff and applicants must meet, the Boards ruling on EC-2 is erroneous.

IV. Admission of Contention EC-4 Contravenes Commission Precedent In its Appeal, PG&E asserts that EC-4 is inadmissible because it contravenes established Commission precedent on the scope of analysis required to satisfy NEPA.76 Specifically, in Oyster Creek, the Commission determined that the Staffs discretionary consideration of terrorism in the license renewal context was adequate to satisfy NEPA.77 In this license renewal proceeding, the Boards Order requires additional analyses from PG&E and Staff, including the impact of additional initiating events (terrorist attacks) upon the Core Damage Frequency and the cost-benefit analyses regarding mitigative (preventative as well as palliative) alternatives.78 The Staff agrees that EC-4 is inadmissible because it contravenes the Commissions Oyster Creek decision, and supports the portion of PG&Es appeal that contends that the Board 75 Turkey Point, CLI-01-17, 54 NRC at 21.

76 Appeal at 27-29 (citing Amergen Energy Co. (Oyster Creek Nuclear Generating Station), CLI-07-8, 65 NRC 124 (2007)).

77 Oyster Creek, CLI-07-8, 65 NRC at 131-32. See Answer at 46-49.

78 Order at 66. Appeal at 28. Notably, the Board recognized that these additional analyses were problematic and posed significant policy and/or legal issues. See Order at 69.

erred in admitting EC-4 on this ground.79 However, the Staff disagrees with PG&Es position that the Third Circuits decision affirming Oyster Creek is directly applicable in this case.80 The Third Circuits holding regarding the sufficiency of Staffs NEPA-terrorism analysis, while persuasive, is not binding precedent in this proceeding, which could be appealed to the Ninth Circuit.81 PG&E also contends that terrorism contentions are beyond the scope of a license renewal proceeding because they are directly related to security and thus unrelated to the detrimental effects of aging.82 But, this is not accurate as to proceedings in the Ninth Circuit.

While as a general rule the NRC does not consider terrorist acts within the scope of NRCs NEPA analysis, in the Ninth Circuit, the NRC is required to consider the effects of terrorism following the decision in SLOMFP v. NRC.83 In that proceeding, for the construction and 79 Appeal at 27-30. The Board referred EC-4 to the Commission under 10 C.F.R. § 2.323(f)(1),

citing novel or legal policy issues. Order at 69. The Staff does not believe there is a novel legal issue, as Oyster Creek is directly on point.

80 Appeal at 29. The Boards Order inaccurately states that the Staff urged the Board to follow the Third Circuits decision in New Jersey Department of Environmental Protection v. NRC, 561 F.3d 132 (3d Cir 2009). Order at 61-63. In fact, the Staff repeatedly urged the Board to follow the Commissions Oyster Creek decision. Answer at 46-47; Transcript of Diablo Canyon Nuclear Plant Oral Arguments, at 44-45, 345 (May 26, 2010) (ADAMS Accession No. ML101590109) (Tr.)).

81 The Third Circuit also held, contrary to SLOMFP v. NRC, 449 F.3d 1016 (9th Cir. 2006), that there is no reasonably close causal relationship between NRCs licensing action and the environmental effects of terrorist attacks. NJDEP v. NRC, 561 F.3d at 142.

82 Appeal at 28-29.

83 The Commission, consistent with Supreme Court NEPA doctrine, considers terrorist acts outside the scope of the Staffs NEPA review because there simply is no proximate cause link between an NRC licensing action, and any altered risk of terrorist attack. Oyster Creek, CLI-07-8, 65 NRC at 129-30. However, in SLOMFP v. NRC, the Ninth Circuit determined that Supreme Court precedent was inapplicable in an independent spent fuel storage installation (ISFSI) proceeding, and that the appropriate analysis was that in No GWEN Alliance of Lane County, Inc. v. Aldridge, 855 F.2d 1380 (9th Cir.1988). SLOMFP v. NRC, 449 F.3d at 1029. The Commission continues to reject this analysis outside of the Ninth Circuit.

licensing of an independent spent fuel storage installation (ISFSI),84 the Staff had not prepared an EA or EIS discussing the effects of terrorism, and the application did not contain a terrorism discussion. The Ninth Circuit held that it was unreasonable under NEPA for the Staff to categorically refuse to consider the environmental effects of a terrorist attack.85 Moreover, unlike the NRCs separate Part 54 safety analysis in license renewal, the NRCs Part 51 NEPA analysis is not limited to the detrimental effects of aging.86 In this license renewal proceeding, the Staff has considered the environmental effects of a terrorist attack generically in the GEIS, and the applicants ER relies on the analysis in the GEIS in its discussion of terrorism.87 Consequently, Staff has met the SLOMFP v. NRC requirement to consider terrorism.88 Further, in Oyster Creek, the Commission determined that the Staffs consideration of these effects in the GEIS was adequate to satisfy NEPA.89 Thus, admission of EC-4 is contrary to Commission precedent.

84 Notably, the construction of an ISFSI creates a new target for terrorists, whereas here, in license renewal, there is no construction and no new target for terrorists.

85 SLOMFP v. NRC, 449 F.3d at 1028, 1035.

86 See Turkey Point, CLI-01-17, 54 NRC 3, 7, 13 (2001).

87 See ER at § 4.20 & Attachment F. Staff is preparing a SEIS for DCNPP, which will contain a site-specific analysis of the effects of terrorism. The draft SEIS is scheduled for publication in Oct. 2010.

88 Notably, in SLOMFP v. NRC, the Ninth Circuit made clear that its decision that the NRC could not categorically refuse to consider the possibility of terrorist attacks did not constrain the NRCs consideration of the merits on remand, or circumscribe the procedures that the NRC used in conducting its NEPA-terrorism analysis. SLOMFP v. NRC, 449 F.3d at 1035. Further, the Ninth Circuit indicated it was not prejudging the NRCs selected alternatives or the merits of the NRCs inquiry. Id.

89 Oyster Creek, CLI-07-8, 65 NRC 124, 131-32 (2007). Thus, the entire field of terrorism has not been neglected. Order at 63; Tr. at 326. The NRC has selected a reasonable procedure for analyzing the environmental effects of terrorism in license renewal proceedings, which the Commission approved.

Moreover, the Boards reading of SLOMFP v. NRC90 erroneously expands the requirements placed on the applicant and Staff in the Ninth Circuit.91 The Boards ruling opens the possibility of site-specific litigation of which terrorist scenarios should be considered.92 The Commission has clearly stated that this type of adjudicatory inquiry into the essentially limitless range of conceivable, but highly unlikely, terrorist-attack scenarios should be avoided.93 Rather, the Commission found that the Staffs usual evaluation of the national security information that would necessarily underlie such a contention, without judicial oversight or agency hearings, satisfied NEPA.94 Therefore, the admission of EC-4 by the Board contravenes Commission precedent and erroneously expands the requirements Staff and applicants must meet in the Ninth Circuit. Thus, the Boards ruling on EC-4 is in error.

90 Order at 66-69.

91 See supra notes 81, 83, 85 (SLOMFP v. NRC only held that NRC could not categorically refuse to consider effects of terrorism in its Ninth Circuit proceedings).

92 This is precisely what happened on remand in the SLOMFP v. NRC ISFSI proceeding. See e.g., Pacific Gas & Elec. Co. (Diablo Canyon Power Plant Independent Spent Fuel Storage Installation),

CLI-08-1, 67 NRC 1 (2008) and Pacific Gas & Elec. Co. (Diablo Canyon Power Plant Independent Spent Fuel Storage Installation), CLI-08-26, 68 NRC 509 (2008).

93 Diablo Canyon ISFSI, CLI-08-1, 67 NRC at 20 (internal footnotes omitted) (We do not understand the Ninth Circuits remand decision - which expressly recognized NRC security concerns and suggested the possibility of a limited proceeding - to require a contested adjudicatory inquiry into the credibility of various hypothetical terrorist attacks against the Diablo Canyon ISFSI. Adjudicating alternate terrorist scenarios is impracticable. The range of conceivable (albeit highly unlikely) terrorist scenarios is essentially limitless, confined only by the limits of human ingenuity).

94 Id. at 21 (citing Weinberger v. Catholic Action of Hawaii/Peace Educ. Project, 454 U.S. 139, 146 (1981).

CONCLUSION For the reasons set forth above, the Staff respectfully supports and in part disagrees with PG&Es appeal of the Boards opinion in LBP-10-15.

/Signed (electronically) by/

Catherine E. Kanatas Counsel for NRC Staff U.S. Nuclear Regulatory Commission Mail Stop O-15D21 Washington, DC 20555-0001 (301) 415-2321 Catherine.Kanatas@nrc.gov Executed in Accord with 10 CFR 2.304(d)

Maxwell C. Smith Counsel for NRC Staff U.S. Nuclear Regulatory Commission (301) 415-1246 Maxwell.Smith@nrc.gov Executed in Accord with 10 CFR 2.304(d)

Lloyd B. Subin Counsel for NRC Staff U.S. Nuclear Regulatory Commission (301) 415-1988 Lloyd.Subin@nrc.gov

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION In the Matter of )

)

PACIFIC GAS AND ELECTRIC COMPANY ) Docket Nos. 50-275-LR/ 50-323-LR

)

(Diablo Canyon Nuclear Power Plant, )

Units 1 and 2) )

CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing NRC STAFFS ANSWER TO APPLICANTS APPEAL OF ATOMIC SAFETY AND LICENSING BOARD DECISION (LBP-10-15), dated August 26, 2010, have been served upon the following by the Electronic Information Exchange, this 26th day of August, 2010:

Administrative Judge Office of Commission Appellate Alex S. Karlin, Chair Adjudication Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Mail Stop - T-3 F23 Mail Stop - O-16G4 U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Washington, DC 20555-0001 E-mail: ocaamail@nrc.gov E-mail: ask2@nrc.gov Administrative Judge Office of the Secretary Nicholas G. Trikouros Attn: Rulemakings and Adjudications Staff Atomic Safety and Licensing Board Panel Mail Stop: O-16G4 Mail Stop - T-3 F23 U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Washington, DC 20555-0001 E-mail: HEARINGDOCKET@nrc.gov E-mail: ngt@nrc.gov Administrative Judge David A. Repka, Esq.

Paul B. Abramson Tyson Smith, Esq.

Atomic Safety and Licensing Board Panel Carlos Sisco Mail Stop - T-3 F23 Winston & Strawn LLP U.S. Nuclear Regulatory Commission 101 California Street Washington, DC 20555-0001 San Francisco, CA 94111-5802 E-mail: pba@nrc.gov E-mail: drepka@winston.com trsmith@winston.com CSisco@winston.com

Jill ZamEk, Esq. Diane Curran, Esq.

San Luis Obispo Mothers for Peace Harmon, Curran, Spielberg, and Eisenberg 1123 Flora Road 1726 M Street NW Arroyo Grande, CA 93420 Suite 600 E-mail: jzk@charter.net Washington, DC 20036 E-mail: dcurran@harmoncurran.com

/Signed (electronically) by/

Catherine E. Kanatas Counsel for NRC Staff U.S. Nuclear Regulatory Commission Mail Stop O-15D21 Washington, DC 20555-0001 (301) 415-2321 Catherine.Kanatas@nrc.gov