ML13081A681
| ML13081A681 | |
| Person / Time | |
|---|---|
| Site: | Indian Point  |
| Issue date: | 03/22/2013 |
| From: | Mizuno B NRC/OGC |
| To: | Atomic Safety and Licensing Board Panel |
| SECY RAS | |
| References | |
| RAS 24265, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01 | |
| Download: ML13081A681 (52) | |
Text
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
)
ENTERGY NUCLEAR OPERATIONS, INC. ) Docket Nos. 50-247-LR/ 50-286-LR
)
(Indian Point Nuclear Generating )
Units 2 and 3) )
NRC STAFFS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW PART 7:
NEW YORK STATE CONTENTIONS NYS-17, NYS-17A and NYS-17B (REAL ESTATE VALUES)
Beth N. Mizuno Counsel for NRC Staff March 22, 2013
ii Table of Contents I. BACKGROUND AND INTRODUCTION .............................................................................. A. Contention NYS-17..................................................................................................... B. Contention NYS-17A .................................................................................................. C. Entergys Motion for Summary Disposition ................................................................. D. Contention NYS-17B .................................................................................................. E. Statutory and Regulatory Background ........................................................................ F. Legal Standard ......................................................................................................... II. FINDINGS OF FACT .................................................................................................... A. Witnesses Presented................................................................................................ B. The Environmental Reports Analysis of Off-site Land Use Impacts ......................... C. The Analysis of Off-site Land Use Impacts in the DSEIS .......................................... D. The Analysis of Off-Site Land Use Impacts in the FSEIS .......................................... E. Analysis of Land Use Impacts in the No-Action Alternative ....................................... F. Property Value Impacts as Calculated by Entergy .................................................... G. Property Value Impacts as Calculated by New York ................................................. H. Deficiencies in Dr. Sheppards December 2011 Analysis.......................................... 1. Failure to Establish Causation ............................................................................... 2. Incorrect Treatment Period (1974-1976) ................................................................ 3. Failure to Control for Confounding Events ............................................................. 4. Unsupported Testimony Regarding a Rebound in Property Values ........................ 5. Additional Errors in Dr. Sheppards December 2011 Analysis ................................ I. Decommissioning Schedules .................................................................................... J. Summary of Findings................................................................................................ III. CONCLUSIONS OF LAW ...............................................................................................
March 22, 2013 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
)
ENTERGY NUCLEAR OPERATIONS, INC. ) Docket Nos. 50-247-LR/ 50-286-LR
)
(Indian Point Nuclear Generating )
Units 2 and 3) )
NRC STAFFS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW PART 7:
NEW YORK STATE CONTENTIONS NYS-17, NYS-17A and NYS-17B (REAL ESTATE VALUES)
In accordance with 10 C.F.R. § 2.1209 and the Atomic Safety and Licensing Boards Orders, 1 the NRC Staff (Staff) hereby submits its proposed findings of fact and conclusions of law (Proposed Findings or PFF) regarding the nine contested Track I contentions in this proceeding. The Staffs Proposed Findings are set forth in ten separate filings, as follows:
Part 1: Overview and Regulatory Standards; Part 2: Contention NYS-5 (Buried Piping and Tanks);
Part 3: Contention NYS-6/7 (Inaccessible Non-EQ Medium and Low Voltage Cables);
Part 4: Contention NYS-8 (Transformers);
Part 5: Contention NYS-12C (Severe Accident Mitigation Alternatives (SAMA) Analysis Decontamination and Cleanup Costs);
Part 6: Contention NYS-16B (SAMA Analysis Population Estimates);
Part 7: Contention NYS-17B (Real Estate Values);
1 See (1) Scheduling Order (July 1, 2010), at 19; and (2) Order (Scheduling Post-Hearing Matters and Ruling on Motions to File Additional Exhibits) (Jan. 15, 2013) at 1.
Part 8: Contention NYS-37 (No-Action Alternative);
Part 9: Contention RK-TC-2 (Flow Accelerated Corrosion); and Part 10: Contention CW-EC-3A (Environmental Justice). 2 In Part 7 of the Staffs Proposed Findings, set forth below, the Staff addresses the issues raised in Contention NYS-17, NYS-17A and NYS-17B (Real Estate Values). For the reasons set forth herein, the Staff submits that the contentions should be resolved in favor of license renewal for Indian Point Nuclear Generating Units 2 and 3.
I. BACKGROUND AND INTRODUCTION 7.1 These findings and rulings address all outstanding issues with respect to the Contentions NYS-17, NYS-17A, and NYS-17B (consolidated) filed by the State of New York (New York), challenging the analysis of the analysis of off-site land use in the Environmental Report (ER) filed by Entergy Nuclear Operations, Inc. (Entergy or the Applicant) in its license renewal application (LRA) for Indian Point Nuclear Generating Units 2 and 3 (Indian Point), the Draft Generic Environmental Impact Statement for License Renewal of Nuclear Plants, Supplement 38, Regarding Indian Point Nuclear Generating Unit Nos. 2 and 3 (Draft SEIS or DSEIS), and the Final Generic Environmental Impact Statement for License Renewal of Nuclear Plants, Supplement 38, Regarding Indian Point Nuclear Generating Unit Nos. 2 and 3 (Final SEIS or FSEIS). An overview of this proceeding and the regulatory standards that govern consideration of the Indian Point LRA and the Staffs Draft and Final SEISs are set forth in Part 1 of the Staffs Proposed Findings, submitted simultaneously herewith. To avoid unnecessary duplication, the Staff hereby incorporates Part 1 of its Proposed Findings by reference herein.
2 The Staff utilized a unique number designator for each separate Part of the Proposed Findings, whereby all paragraphs in Part 1 are consecutively numbered 1.__; all paragraphs in Part 2 are consecutively numbered 2.__, etc. Accordingly, all paragraph numbers in this Part commence with the number 7.
A. Contention NYS-17 7.2 On November 30, 2007, New York filed Contention NYS-17 which alleges:
The Environmental Report fails to include an analysis of adverse impacts on off-site land use of license renewal and thus erroneously concludes that relicensing of IP2 [Indian Point Unit 2] and IP3 [Indian Point Unit 3]
will have a significant positive impact on the communities surrounding the station (ER Section 8.5) and understates the adverse impact on off-site land use (ER Sections 4.18.4 and 4.18.5) in violation of 10 C.F.R. Part 51, subpart A, Appendix B. 3 7.3 In support of this contention, New York asserted that the analysis of land use impacts in the ER was deficient because it ignores the positive impact on land use and land value from denial of the license extension. 4 New York stated that the ER looks only at tax-driven and population-driven impacts and completely ignor[es] the impact on adjacent lands of the unexpected continued operation of a nuclear generating facility. 5 Further, New York asserted that property values in the vicinity of the Indian Point site would rise if the licenses were not renewed, relying on the Declaration of Stephen C. Sheppard and a report which he had authored. 6 Both the Applicant and the Staff opposed the admission of Contention 17. 7 The Board admitted Contention NYS-17 stating that Entergy should have considered the impact on real estate values that would be caused by license renewal or non-renewal. 8 3
New York State Notice of Intention to Participate and Petition to Intervene (2007 New York Petition or 2007 Petition), filed November 30, 2007 at 167.
4 Id. at 168.
5 Id. at 169.
6 Id. at 172-74.
7 NRC Staffs Response to Petitions for Leave to Intervene Filed by (1) Connecticut Attorney General Richard Blumenthal, (2) Connecticut Residents Opposed to Relicensing of Indian Point, and Nancy Burton, (3) Hudson River Sloop Clearwater, Inc., (4) the State of New York, (5) Riverkeeper, Inc., (6) the Town of Cortlandt, and (7) Westerchester County, filed January 22, 2008, at 58-59; Answer of Entergy Nuclear Operations, Inc. Opposing New York State Notice of Intention to Participate and Petition to Intervene, filed January 22, 2008, at 113-18.
8 Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3), LBP-08-13, 68 NRC 43, 217 (2008).
B. Contention NYS-17A 7.4 In December 2008, the Staff issued the DSEIS. 9 In the DSEIS, the Staff provided a preliminary analysis of the environmental impacts of license renewal and alternatives thereto. Like the Applicants ER, the DSEIS considered population-related and tax-revenue-related off-site land use impacts, and it concluded that there would be no population-related or tax- revenue-related land use impacts during the license renewal term beyond those already being experienced. 10 Further, however, the Draft SEIS explicitly evaluated the impact on property values that might result from non-renewal of the licenses, and concluded as follows:
The shutdown of IP2 and IP3 may result in increased property values of the homes in the communities surrounding the site (Levitan and Associates, Inc. 2005). This would result in some increases in tax revenues. However, to fully offset the revenues lost from the shutdown of IP2 and IP3, taxing jurisdictions most likely would have to compensate with higher property taxes. The combined increase in property values and increased taxes could have a noticeable effect on some area homeowners and business, though Levitan and Associates did not indicate the magnitude of this effect and whether the net effect would be positive or negative.
Revenue losses from Indian Point operation would likely affect only the communities closest to and most reliant on the plants tax revenue and PILOT [Payment-In-Lieu-Of-Taxes]. If property values and property tax revenues increase, some of these effects would be smaller. The NRC staff concludes that the socioeconomic impacts of plant shutdown would likely be SMALL to MODERATE (MODERATE effects for the Hendrick Hudson Central School District, Village of Buchanan, Town of Cortlandt, and the Verplanck Fire District). See Appendix J to NUREG-0586, Supplement 1 (NRC 2002), for additional discussion of the potential impacts of plant shutdown. 11 7.5 The Staff determined that land use impacts resulting from plant shutdown would be SMALL, as defined in the Generic Environmental Impact Statement (GEIS) NUREG-1437, 9
DSEIS (Ex. NYS000132A through D).
10 DSEIS (Ex. NYS000132B) § 4.4.3, at 4 4-41.
11 Id. at 8 8-30 (emphasis added).
Vol. 1 (May 1996) (Ex. NYS000131A) at 1-4. 12 The Staff addressed the impacts (including the impacts on off-site land use) of the no-action alternative, in which the operating licenses of IP2 and IP3 are not renewed. 13 In this regard, the Staff observed that full dismantling of structures and site decontamination may not occur for up to 60 years after plant shutdown, DSEIS at 8-25, the land use impacts would be similar regardless of whether decommissioning occurs after 40 or 60 years of operation, DSEIS at 8-27, and the land use impacts of plant shutdown would be SMALL. Id.
7.6 Upon issuance of the DSEIS, New York submitted Contention NYS-17A, which alleges:
The DSEIS fails to address the impact of the continued operation of IP2 and IP3 for another 20 years on off-site land use, including real estate values in the surrounding area in violation of 10 C.F.R. §§ 51.71(a),
51.71(d), 51.95(c)(1) and 51.95(c)(4). 14 7.7 NYS asserted that if the licenses are not renewed, the plants would be decommissioned in 6 years such that the site would be available for unrestricted use and all the nuclear wastes at the site would be gone by 2025. 15 7.8 The Board admitted NYS-17A and consolidated it with NYS-17, finding that NYS-17A updates the original [contention] to reflect that New York contends that the NRC Staff erred in a similar manner to Entergy and that the original contention is relevant to the Draft SEIS as well as to the ER. 16 12 Id. at 8-27.
13 Id. at 8-25 to 31.
14 State of New York Supplemental Contentions Concerning NRC Staffs Draft Supplemental Environmental Impact Statement (New Yorks Supplemental Contentions), filed February 27, 2009, at 14.
15 Id. at 15.
16 Order (Ruling on New York States New and Amended Contention) (June 16, 2009) (unpublished order) at 8.
C. Entergys Motion for Summary Disposition 7.9 On February 26, 2010, Entergy moved for summary disposition of NYS-17 and NYS-17A. 17 The Board denied the motion, finding that there was a genuine dispute of material fact regarding the impact of license renewal and non-renewal on land use in the area surrounding Indian Point. 18 The Board rejected the Staffs argument that the DSEIS mooted NYS-17. 19 The Board found that there remained a genuine issue of material fact regarding the DSEIS analysis of the impact of non-renewal on property values and that summary disposition was, therefore, inappropriate. 20 D. Contention NYS-17B 7.10 In December of 2010, the Staff published the FSEIS. 21 As in the Applicants ER and the DSEIS, the FSEIS considered population-related and tax revenue-related offsite land use impacts, and it concluded that there would be no population-related or tax revenue-related land use impacts during the license renewal term beyond those already being experienced. 22 The FSEIS evaluated the impact on property values that might result from non-renewal of the licenses, and concluded as follows:
The shutdown of IP2 and IP3 may result in increased property values of the homes in the communities surrounding the site (Levitan and Associates, Inc. 2005). This would result in some increases in tax revenues. However, to fully offset the revenues lost from the shutdown of IP2 and IP3, taxing jurisdictions most likely would have to compensate with higher property taxes (Levitan and Associates, Inc. 2005). The 17 Entergy Nuclear Operations, Inc. Motion for Summary Disposition of New York State Contention 17/17A (Property Values) (Feb. 26, 2010).
18 Memorandum and Order (Denying Entergys Motion for Summary Disposition of NYS Contention 17/17A) (April 22, 2010) (unpublished order) at 11-13.
19 Id. at 15-17.
20 Id. at 13-15.
21 FSEIS (Ex. NYS000133A through D).
22 FSEIS (Ex. NYS000133B) at 4-45 to 4-47.
combined increase in property values and increased taxes could have a noticeable effect on some area homeowners and business, though Levitan and Associates did not indicate the magnitude of this effect and whether the net effect would be positive or negative.
Revenue losses from Indian Point operation would affect the communities closest to and most reliant on the plants tax revenue and PILOT
[Payment-In-Lieu-Of-Taxes]. If property values and property tax revenues increase, some of these effects would be smaller. The NRC staff concludes that the socioeconomic impacts of plant shutdown would likely be SMALL to MODERATE (MODERATE effects for the Hendrick Hudson Central School District, Village of Buchanan, Town of Cortlandt, and the Verplanck Fire District). See Appendix J to NUREG-0586, Supplement 1 (NRC 2002), for additional discussion of the potential impacts of plant shutdown. 23 7.11 As in the DSEIS, the Staff determined that the magnitude of land use impacts resulting from plant shutdown would be SMALL, as defined in the Generic Environmental Impact Statement (GEIS). 24 7.12 The Staff also considered the land use impacts of the no-action alternative, in which the operating licenses of IP2 and IP3 are not renewed. As in the DSEIS, the Staff observed that [f]ull dismantling of structures and decontamination of the site may not occur for up to 60 years after plant shutdown, id. at 8-20; the land use impacts would be similar regardless of whether decommissioning occurs after 40 or 60 years of operation, id.; and the land use impacts of plant shutdown would be SMALL. Id. at 8-22.
7.13 On December 23, 2010, the Commission issued its Waste Confidence Decision Update and, in a parallel rulemaking, its amendments to the Waste Confidence Rule. 25 Therein, the Commission revised the second and fourth findings in its Waste Confidence Decision to reflect its reasonable assurance that a mined geologic repository will be available 23 Id. at 8-25.
24 Id. at 8-22.
25 Final Rule, Consideration of Environmental Impacts of Temporary Storage of Spent Fuel After Cessation of Reactor Operation, 75 Fed. Reg. 81,032 (Dec. 23, 2010) (to be codified at 10 C.F.R.
§ 51.23(a) (effective Jan. 24, 2011)); Waste Confidence Decision Update, 75 Fed. Reg. 81,037 (Dec.
23, 2010).
when necessary and that spent fuel can be stored safely without significant environmental impacts for at least 60 years beyond the licensed life of a reactor (including the term of a renewed or revised license).
7.14 On January 24, 2011, NYS submitted Contention NYS-17B, which alleges:
The FSEIS fails to address the impact of the continued operation of IP2 and IP3 for another 20 years on off-site land use, including real estate values in the surrounding area in violation of 10 C.F.R. §§ 51.71(a),
51.71(d), 51.95(c)(1) and 51.95(c)(4). 26 7.15 Contention NYS-17B was accompanied by a motion for leave to file amended bases arising from the Waste Confidence Decision Update and a petition for waiver or exemption. 27 7.16 While the Staff did not oppose Contention NYS-17B to the extent that it updated Contentions 17 and 17A to refer to the FSEIS, the Staff opposed the new contention on the grounds that it constituted an impermissible challenge to the regulation governing the storage of spent fuel, lacked an adequate basis, and was untimely. 28 7.17 The Board admitted Contention NYS-17B in part. The Board rejected the contentions claim with respect to the environmental impacts of long-term storage of spent fuel as specifically barred. 29 The Board, however, admitted the contention to the extent that it raised an issue with respect to the impact of [Indian Point] components long-term on-site 26 State of New York Contention 17B (Jan. 24, 2011).
27 State of New York Motion for Leave to File Timely Amended Bases to Contention 17A (Now to Be Designated Contention 17B) (Jan. 24, 2011) and State of New Yorks Request for a Determination that the Proposed Amended Bases for Contention 17A Are Not Barred by 10 C.F.R. § 51.23(b), or that Exemption From the Requirements of 10 C.F.R. § 51.23(b) Should Be Granted, or that the State Has Made a Prima Facie Case that § 51.23(b) Should Be Waived as Applied to Contention 17B (Jan. 24, 2011).
28 NRC Staffs Answer to the State of New Yorks Motion for Leave to File Amended Bases to Contention 17A (to Be Designated 17B) and Request for an Exemption or Waiver (Feb. 18, 2011) at 15-30.
29 Memorandum and Order (Ruling on Pending Motions for Leave to File New and Amended Contentions)
(July 6, 2011) (unpublished order) at 16-18.
existence upon surrounding property values. 30 The Board found it unnecessary to rule on New Yorks request for exemption or waiver. 31 E. Statutory and Regulatory Background 7.18 Contention NYS-17B arises under the National Environmental Policy Act of 1969, as amended (NEPA), and the NRCs regulations that implement this statute. 42 U.S.C.
§§ 4321 et seq; 10 C.F.R. Part 51. Under NEPA, the NRC is required to take a hard look at the environmental impacts of a proposed action, as well as reasonable alternatives to that action. See Louisiana Energy Servs., L.P. (Claiborne Enrichment Center), CLI-98-3, 47 NRC 77, 87-88 (1998). This hard look is tempered by a rule of reason that requires agencies to address only impacts that are reasonably foreseeable - not remote and speculative. See, e.g.,
Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1), ALAB-156, 6 AEC 831, 836 (1973). NEPA does not call for certainty or precision, but an estimate of anticipated (not unduly speculative) impacts. Louisiana Energy Services, L.P. (National Enrichment Facility), CLI 20, 62 NRC 523, 536 (2005) (emphasis in original). Neither does it call for the impossible. The Supreme Court observed that where it is not possible for an agency to analyze environmental consequences for a proposed action or alternatives to it, requiring such analysis would have no factual predicate and held that under those circumstances an EIS was not required. Kleppe v.
Sierra Club, 427 U.S. 390, 401-02 (1976).
7.19 In similar vein, the Commission has held that where an impact is not amenable to quantitative analysis, an applicant and the Staff are expected to address the impact in qualitative terms. Pacific Gas and Electric Company (Diablo Canyon Power Plant Independent 30 Id. Hereinafter all references to Contention NYS-17B, include Contentions NYS-17 and NYS-17A.
31 Id. at 18-19. In response to a motion by Entergy for clarification of the order admitting Contention NYS-17B, the Board explained the impact of IP2s and IP3s components on nearby property values may be litigated in this proceeding, but impacts attributed solely to the presence of spent fuel itself may not be litigated in this proceeding. Memorandum and Order (Granting Entergys Request for Clarification)
(August 10, 2011) (unpublished order) at 5.
Spent Fuel Storage Installation), CLI-08-26, 68 NRC 509, 521 (2008); see also Entergy Nuclear Generation Co. and Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), CLI 22, 72 NRC 202, 208 (2010).
7.20 Further, NEPA gives agencies broad discretion to keep their inquiries within appropriate and manageable boundaries. Louisiana Energy Servs., L.P., CLI-98-3, 47 NRC at 103 (citation omitted). The Commission observed, An environmental impact statement is not intended to be a research document. Pilgrim, CLI-10-22, 72 NRC at 208 (2010).
7.21 Ultimately, the test is whether an EIS contains a reasonably thorough discussion of the significant aspects of the probable environmental consequences . . . and a rational connection between the facts found and the choice made. Save the Peaks Coalition v. U.S.
Forest Service, 669 F.3d 1025, 1035 (9th Cir. 2012) (internal citations and quotation marks omitted). Where a brief statement of the issue will suffice to address an issue, no more is required. The agency may limit its discussion of environmental impact to a brief statement, when that is the case, that the alternative course involves no effect on the environment, or that their effect, briefly described, is simply not significant. Natural Resources Defense Council v.
Morton, 458 F.2d 827, 834 (D.C. Cir. 1972). Similarly, [w]hen alternatives are rejected from consideration in an EIS, there is no duty to perform in-depth analyses of these alternatives.
Appellees had no duty to conduct an in-depth analysis of those rejected alternatives in the FEIS. Citizens for Smart Growth v. Secretary of Department of Transportation, 669 F.3d 1203, 1213 (11th Cir. 2012).
7.22 The regulation in 10 C.F.R. § 51.53(c)(ii)(I) states than an applicant must provide an assessment of land use impacts in its ER for license renewal. Specifically, this regulation requires the applicant to assess the impact of the proposed action [license renewal] on . . . land use . . . within the vicinity of the plant[.]
7.23 The regulation in 10 C.F.R. § 51.71(d) describes the requirements for preparing the DSEIS and requires the Staff to analyze issues identified as Category 2 issues.
Unless excepted in this paragraph or § 51.75, the draft environmental impact statement will include a preliminary analysis that considers and weighs the environmental effects of the proposed action; the environmental impacts of alternatives to the proposed action; and alternatives available for reducing or avoiding adverse environmental effects and consideration of the economic, technical, and other benefits and costs of the proposed action and alternatives and indicate what other interests and considerations of Federal policy, including factors not related to environmental quality if applicable, are relevant to the consideration of environmental effects of the proposed action identified under paragraph (a) of this section. The draft supplemental environmental impact statement prepared at the license renewal stage under § 51.95(c) need not discuss the economic or technical benefits and costs of either the proposed action or alternatives except if benefits and costs are either essential for a determination regarding the inclusion of an alternative in the range of alternatives considered or relevant to mitigation . . . The draft supplemental environmental impact statement for license renewal prepared under § 51.95(c) will rely on conclusions as amplified by the supporting information in the GEIS [Generic Environmental Impact Statement] for issues designated as Category 1 in appendix B to subpart A of this part. The draft supplemental environmental impact statement must contain an analysis of those issues identified as Category 2 in appendix B to subpart A of this part that are open for the proposed action.
7.24 Off-site land use is identified as a Category 2 issue. 10 C.F.R. Part 51, Subpart A, Appendix B, Table B-1 (Table B-1). Because off-site land use is a Category 2 issue, the regulation requires that the Staff address the issue in the DSEIS.
7.25 The regulation in 10 C.F.R. § 51.95(c) describes the requirements the Staff must meet in the FSEIS, including the requirement to address issues as required by 10 C.F.R.
§ 51.71. Thus, the FSEIS is required to address the environmental impacts of license renewal on off-site land use. The regulation in 10 C.F.R. § 51.95(c) provides as follows:
In connection with the renewal of an operating license or combined license for a nuclear power plant under parts 52 or 54 of this chapter, the Commission shall prepare an environmental impact statement, which is a supplement to the Commissions NUREG-1437, Generic Environmental Impact Statement for License Renewal of Nuclear Plants" (May 1996), which is available in the NRC Public Document Room, 11555 Rockville Pike, Rockville, Maryland.
(1) The supplemental environmental impact statement for the operating license renewal stage shall address those issues as required by
§ 51.71. In addition, the NRC staff must comply with 40 CFR 1506.6(b)(3) in conducting the additional scoping process as required by § 51.71(a).
(2) The supplemental environmental impact statement for license renewal is not required to include discussion of need for power or the economic costs and economic benefits of the proposed action or of alternatives to the proposed action except insofar as such benefits and costs are either essential for a determination regarding the inclusion of an alternative in the range of alternatives considered or relevant to mitigation. In addition, the supplemental environmental impact statement prepared at the license renewal stage need not discuss other issues not related to the environmental effects of the proposed action and the alternatives, or any aspect of the storage of spent fuel for the facility within the scope of the generic determination in § 51.23(a) and in accordance with § 51.23(b). The analysis of alternatives in the supplemental environmental impact statement should be limited to the environmental impacts of such alternatives and should otherwise be prepared in accordance with § 51.71 and Appendix A to subpart A of this part.
(3) The supplemental environmental impact statement shall be issued as a final impact statement in accordance with §§ 51.91 and 51.93 after considering any significant new information relevant to the proposed action contained in the supplement or incorporated by reference.
(4) The supplemental environmental impact statement must contain the NRC staff's recommendation regarding the environmental acceptability of the license renewal action. In order to make its recommendation and final conclusion on the proposed action, the NRC staff, adjudicatory officers, and Commission shall integrate the conclusions, as amplified by the supporting information in the generic environmental impact statement for issues designated Category 1 (with the exception of offsite radiological impacts for collective effects and the disposal of spent fuel and high level waste) or resolved Category 2, information developed for those open Category 2 issues applicable to the plant in accordance with § 51.53(c)(3)(ii), and any significant new information. Given this information, the NRC staff, adjudicatory officers, and Commission shall determine whether or not the adverse environmental impacts of license renewal are so great that preserving the option of license renewal for energy planning decisionmakers would be unreasonable.
7.26 In the GEIS, the Commission determined that the environmental impacts of license renewal in the area of off-site land use ranged from SMALL to LARGE, depending on the extent to which license renewal resulted in population or tax revenue changes. GEIS (Ex.
NYS000131A) at 3-20 to 22; see also Table B-1. The Commission found, [d]uring the renewal term, new land-use impacts could result from plant-related population growth or from the use by local governments of the plants tax payments to provide public services that encourage
development. GEIS (Ex. NYS000131B) at 4-108. This finding is reflected in Table B-1, where the entry for off-site land use findings provides: Significant changes in land use may be associated with population and tax revenue changes resulting from license renewal.
7.27 Separately from land use impacts, the Commission addressed the impact of license renewal on housing. The Commission determined that the environmental impacts of license renewal in the area of housing impacts would also range from SMALL to LARGE, depending on population density. Table B-1. The Commission concluded that housing impacts associated with license renewal would be SMALL in high population areas. Id. In Table B-1, the Commission stated that Housing impacts are expected to be of small significance at plants located in a medium or high population area and not in an area where growth control measures that limit housing development are in effect.
Moderate or large housing impacts of the workforce associated with refurbishment may be associated with plants located in sparsely populated areas or in areas with growth control measures that limit housing development. See § 51.53(c)(3)(ii)(I).
7.28 In the GEIS, the Commission analyzed three types of housing impacts: housing impacts related to workers demand for housing due to (1) the in-migration of additional plant operations workers; (2) workers demand for housing associated with periodic plant outages for refueling and maintenance; and (3) the continuing impact of the plant on housing value and marketability. GEIS (Ex. NYS000131B) at 4-101.
7.29 With respect to housing value and marketability, the Commission found that nuclear power plants have had little if any effect on the marketability or value of homes in the vicinity of the plants. Id. at 4-103. The Commission based its finding on seven case studies of past impacts related to plant operations. Id. at 4-99.
7.30 The case studies examined the socioeconomic impacts of license renewal for seven plants, chosen to reflect a broad range of population remoteness, geographic location, and plant age. GEIS (Ex. NYS000131F) at C-5. Indian Point was included in the study because it is located in an area with high population and in close proximity to New York City.
Id. The GEIS explained that there are two types of housing impacts: impacts related to the in-migration of additional plant workers and continuing impacts related to the housing demands of workers involved in periodic plant outages for refueling and maintenance. GEIS (NYS000131B) at 4-101. But the GEIS went on to discuss a third impact unrelated to worker demands - the impact of continued operations associated with license renewal. That impact was addressed in the GEIS as an impact on housing. With respect to housing impacts, the GEIS found:
The prevailing belief of realtors and planners in communities surrounding the case study plants is that the plants have had little if any effect on the marketability or value of homes in the vicinity. Housing choices of local residents are rarely affected by the presence of the plant. However, buyers from outside the community are occasionally averse to purchasing properties close to a nuclear power plant. Housing markets have not been affected by this situation because of its infrequency. The value of housing units in close proximity to the plants has experienced only small impacts. A slight negative impact did result because of the accident at Three Mile Island Unit 2; the price of houses in two small subdivisions close to the plant dropped slightly below fair market value after the accident and stayed that way for a brief period following it. At some sites, housing values have increased slightly because of amenities such as sewer systems and improved school systems that were made possible because of tax payments by the nuclear plant.
The license renewal term of the plants will be very much like the original operations period but will include additional safety and maintenance activities. Thus, impacts on housing marketability and values that have occurred during operations will continue during the license renewal term.
At all case study sites, only small impacts on housing value and marketability are projected to continue.
Id. at 4-103.
7.31 The Indian Point case study, GEIS (Ex. NYS000131G) at C-77 through 94, found that housing values had not been deflated because of the presence of the plant, that the market has not slowed as a result, that homes in the area were moderately priced and selling very quickly, and that plant operations had not inhibited residential growth. Id. at C-83. The case study observed that low property taxes and a good school district encouraged residential development and a fast-paced real estate market. Id. at C-83 through 84.
Most local planners and realtors believe that the operation of the Indian Point plants has not inhibited residential growth in neighboring
communities of Buchanan, Peekskill, and Verplank, and the town of Cortlandt. Rather, the low property taxes and good school district have served to encourage residential development and facilitate the quick sale of existing housing. Local residents express no reluctance about living near the plants, although occasionally an outside buyer is deterred from the area because of the plants. However, there are always other buyers for the property, so the housing market has not slowed. Conversely, one realtor maintains that more development in communities neighboring Indian Point would have occurred had it not been for Indian Point.
Local realtors agree that housing values in communities neighboring the plant have not been deflated because of the presence of Indian Point.
Homes in the immediate area are moderate priced and are currently selling very fast on the market. Developments within 3 km (2 miles) of the plant include homes in the $400,000 to $600,000 range. Representatives of the Westchester County Office of Community Development believe otherwise, however, and indicated that the presence of the plant had perpetuated the image of these communities being low to middle class.
Id.
7.32 The case study concluded: it appears that neither construction nor operation of the Indian Point plants has considerably affected housing in the communities neighboring the plants or in the whole of Westchester and Dutchess counties. Id. at C-84.
7.33 The Indian Point case study also examined the potential impacts of license renewal on off-site land use and determined that they would be SMALL based on the high population density of the area and existing zoning patterns. Id. at C-89 through 91. The study projected that refurbishment-related population growth would be less than 0.1 percent of Westchester Countys population and would thus have no impact on residential development.
Id. at C-90. The study noted that much of the land in the plants vicinity was zoned for industrial use and that the industrial land use pattern was well-established in the area. The study thus projected that the area would continue to attract industrial development. The study concluded, Because the residential and industrial land-use patterns that exist in Buchanan have been established for many years, Indian Points new direct land-use impacts are expected to be small. Id. at C-91.
F. Legal Standard 7.34 The legal standard for determining the sufficiency of the Final SEISs analysis of the impacts of license renewal on off-site land use is whether that analysis constitutes a reasonable analysis and meets applicable regulatory requirements.
II. FINDINGS OF FACT A. Witnesses Presented 7.35 Evidentiary hearings on this contention were held on October 24, 2012 in Tarrytown, New York, and on November 28, 2012 in Rockville, Maryland. A total of seven witnesses appeared on behalf of Entergy, New York, and the Staff, as set forth below. Prefiled testimony and exhibits were submitted by each of the witnesses. In addition, New York proffered rebuttal testimony and exhibits. All of the witnesses were available to provide oral testimony in response to questioning by the Board and the parties.
7.36 The Applicant presented a panel of three witnesses in support of its license renewal application: Donald Cleary, C. William Reamer, and George Tolley.
7.37 Applicant witness Donald Cleary is an Environmental Safety Consultant with Talisman International, LLC. Mr. Cleary has 38 years of experience in the nuclear regulation industry. Since 2001, he has provided consulting services in the areas of environmental impacts, power and alternate energy sources, and regional socioeconomic impacts. Prior to joining Talisman, he was member of the U.S. Nuclear Regulatory Commission regulatory staff from 1973 to 2001. During his tenure at the NRC, he developed and applied methodologies to assess various topics covered in environmental impact statements for nuclear power plant construction and operation, including such topics as the need for power (electrical generating capacity), alternative energy sources, and regional socioeconomic impacts. Furthermore, as Task Manager for the GEIS (Ex. NYS00131A-I), and the license renewal rulemaking, he was directly involved in license renewal environmental impact studies addressing socioeconomics
impacts and energy alternatives. In addition to his work on the GEIS, Mr. Cleary worked on the following major documents articulating the NRCs requirements and guidance: the Commissions environmental protection regulations in 10 C.F.R. Part 51; Regulatory Guide 4.2, Supplement 1, Preparation of Supplemental Environmental Reports for Application to Renew Nuclear Power Plant Operating Licenses (Sept. 2000) (Regulatory Guide 4.2, Supp. 1)
(excerpts attached as Ex. ENT000136); and NUREG-1555, Supplement 1, Standard Review Plans for Environmental Reviews for Nuclear Power Plants: Environmental Standard Review Plan for Operating License Renewal (Mar. 2000) (NUREG-1555, Supp. 1) (Ex. ENT00019B).
Mr. Cleary holds a Bachelor of Arts degree in Economics from the University of Massachusetts, Amherst and a Master of Arts degree in Economics from the University of Florida. Donald Cleary Curriculum Vitae (Ex. ENT000133); Testimony of Entergy Witnesses Donald P. Cleary, C. William Reamer, and George S. Tolley Regarding Contention NYS-17B (Property Values)
(Ex. ENT000132) (Entergy Testimony on NYS-17B) at 1-5.
7.38 Applicant witness C. William Reamer is a Senior Regulatory and Nuclear Safety Consultant with Talisman International, LLC. Since 2006, he has provided consulting services in the areas of environmental protection, decommissioning of nuclear facilities and sites, and waste management. Prior to joining Talisman, he served as the Director of the Nuclear Regulatory Commissions High-Level Waste Repository Safety Division, where he led the establishment of the NRCs regulatory framework for a possible Yucca Mountain repository. As Deputy Director of the NRCs Division of Waste Management, he oversaw programs on environmental protection, decommissioning of nuclear facilities and sites, and low-level waste management. As an attorney manager in the NRCs Office of General Counsel, he provided advice on licensing, certification, and regulation of spent nuclear fuel transportation, storage, and disposal, and the NRCs Waste Confidence Rule. He was also involved in early legal proceedings involving the NRCs general license for spent fuel storage. Mr. Reamer holds a Bachelor of Arts in Political Science from Ohio University, a J.D. from Duke University, and an
L.L.M. from the University of California at Berkeley. C. William Reamer Curriculum Vitae (Ex.
ENT000140); Entergy Testimony on NYS-17B (Ex. ENT000132) at 5-7.
7.39 Applicant witness George S. Tolley is President of RCF Economic & Financial Consulting, Inc., an economic and financial consulting firm. He is a Professor Emeritus of Economics at the University of Chicago, where he teaches courses in urban economics, environmental economics, and energy policy. Of particular interest for the purposes of Contention NYS-17B, he teaches hedonic modeling of property values and supervises research studies using hedonic techniques. Dr. Tolley has more than 50 years of professional experience in the practice of economics and has authored or co-authored 17 books and over 100 articles in professional journals. He directed National Science Foundation and U.S.
Environmental Protection Agency projects on estimation of economic benefits and costs from environmental impacts. He has held positions in the Federal government, including as the Deputy Assistant Secretary of the Treasury for Tax Policy and the Director of the Economic Development Division of the U.S. Department of Agriculture. Dr. Tolley holds a Bachelor of Arts degree in Economics from American University, Master and Doctorate degrees in Economics from the University of Chicago, and an Honorary Doctoral degree from North Carolina State University. Dr. George Tolley Curriculum Vitae (Ex. ENT000143); Entergy Testimony on NYS-17B (Ex. ENT000132) at 7-8.
7.40 Based on their demonstrated knowledge, skill, experience, and education, we find that Applicants witnesses, Mr. Cleary, Mr. Reamer, and Dr. Tolley, are qualified to provide expert opinion on the areas addressed in their testimony.
7.41 The Staff presented three witnesses concerning this contention.
7.42 Staff witness Jeffrey J. Rikhoff is a Senior Environmental Scientist/Socioeconomist in the Division of License Renewal, Office of Nuclear Reactor Regulation (NRR), U.S. Nuclear Regulatory Commission (NRC), in Washington, D.C. Mr.
Rikhoff has been working on NEPA environmental reviews for 23 years. Prior to working for the
NRC, Mr. Rikhoff worked for over 17 years as a government contractor preparing environmental NEPA documentation for the U.S. Department of Energy (DOE) and Department of Defense (DoD). He specializes in preparing environmental impact statements (EISs) and environmental assessments (EAs); cost analyses; socioeconomics and environmental justice impact analyses; comprehensive land-use and facility development planning studies; regulatory review and permitting; and consultations with American Indian tribal representatives. He has been with the NRC for over 6 years. In his current position as a Senior Environmental Scientist/Socioeconomist, Mr. Rikhoff conducts land use, socioeconomic, cultural resource, and environmental justice impact assessments in support of license renewal environmental reviews.
Mr. Rikhoff is currently involved in the revisions to NUREG-1437, the Generic Environmental Impact Statement for License Renewal of Nuclear Plants (May 1996) (GEIS) (Ex.
NYS00131A-I). Mr. Rikhoff has also been involved in revisions to NUREG-1555, Supplement 1, Standard Review Plans for Environmental Reviews for Nuclear Power Plants: Operating License Renewal (Oct. 1999) (Ex. ENT00019B) and Regulatory Guide 4.2, Supplement 1, Preparation of Supplemental Environmental Reports for Application to Renew Nuclear Power Plant Operating Licenses (Sept. 2000) (Ex. ENT000136). Mr. Rikhoff holds a Bachelor of Arts degree in English from DePauw University and a Master of Science degree in International Economic Development and Appropriate Technology from the University of Pennsylvania. Mr.
Rikhoff also holds a Master of Regional Planning degree with a concentration in Regional Environmental Planning from the University of Pennsylvania. Jeffrey J. Rikhoff Curriculum Vitae (Ex. NRC000082); NRC Staffs Testimony of Jeffrey J. Rikhoff, Andrew L. Stuyvenberg, and John P. Boska Concerning Contentions NYS-17, 17A and 17B (Land Use) (Ex. NRCR00031)
(Staff Testimony on NYS-17B) at 1, 2, 4.
7.43 From February of 2008 through October of 2011, Staff witness Andrew Stuyvenberg managed the environmental review for the proposed license renewal of Indian Point Nuclear Generating Unit Nos. 2 and 3. He coordinated the preparation and publication of
both the Draft and Final SEISs for Indian Point. From April 2007 until the Final SEIS was published in December of 2010, he was also responsible for the alternatives analysis, including the No-Action alternatives analysis. At the NRC, Mr. Stuyvenberg has provided analyses of potential alternatives to license renewal for NRC environmental impact statements. He has performed, overseen, or reviewed alternatives analyses in nineteen NRC staff environmental impact statements that either have been published or are currently in progress. He also provided environmental expertise to agency processes, including the update of the Generic Environmental Impact Statement for License Renewal of Nuclear Plants, issues identified by the Fukushima Site Team, and proposed actions by the Japan Lessons-Learned Directorate.
Recently, he has worked with other NRC staff members to develop guidance on how to address greenhouse gas impacts in agency environmental impact statements, how to consider terrorism in reviews of projects located in the 9th Circuit, and how to address Severe Accident Mitigation Alternatives (SAMA) reviews at the license-renewal stage for facilities that have completed a design-stage SAMA review. He has also overseen the need-for-power analysis for the proposed operation of Watts Bar Unit 2. Finally, he is a credentialed agency meeting facilitator, in which capacity he assists agency staff with planning and facilitating public and internal meetings. Mr. Stuyvenberg has a Bachelor of Science Degree from Marquette University and a Masters Degree in Environmental Management in Environmental Economics and Policy from Duke Universitys Nicholas School of the Environmental and Earth Studies. He is currently a Juris Doctor candidate at the Georgetown University Law Center. Andrew L. Stuyvenberg Curriculum Vitae (Ex. NRC000134); Staff Testimony on NYS-17B (Ex. NRCR00081) at 1, 2-3, 4.
7.44 Staff witness John Boska is a Senior Project Manager in the Division of Operating Reactor Licensing in the Office of Nuclear Reactor Regulation, NRC. He served as the licensing project manager for Indian Point for almost 7 years between 2005 and 2012. As the Iicensing project manager for Indian Point, Mr. Boska issued the NRC review of the Indian
Point decommissioning cost estimate. In April 2012, he was assigned to serve as the licensing project manager for Oconee Nuclear Station Units 1, 2 and 3. Mr. Boska is a graduate of the U.S. Navy Officer Nuclear Power School and holds a Bachelor of Arts degree in Physics from the University of North Carolina, a Bachelor of Science degree in Nuclear Science from the University of Maryland, and a Masters of Science degree in Electrical Engineering from the University of Pittsburgh. John P. Boska, Statement of Professional Qualifications (Ex.
NRC000084); Staff Testimony on NYS-17B (Ex. NRCR000081) at 1, 3-5.
7.45 Based on their demonstrated knowledge, skill, experience, and education, we find that Staff witnesses, Mr. Rikhoff, Mr. Stuyvenberg, and Mr. Boska, are qualified to provide expert opinion on the areas addressed in their testimony.
7.46 New York presented one witness, Dr. Stephen C. Sheppard, in support of its contention. Dr. Sheppard holds a Ph.D. and a Masters Degree in economics from Washington University in St. Louis, Missouri, and a Bachelors of Science Degree in Economics from the University of Utah in Salt Lake City, Utah. He has conducted research, written, lectured, and taught on topics such as microeconomic theory, urban economics, land use regulation, housing markets, and environmental economics for over 36 years. See generally Pre-Filed Written Testimony of Dr. Stephen Sheppard, Ph.D. Regarding Contention NYS-16/16A/16B (Ex.
NYS000207) at 2; Stephen Charles Sheppard Curriculum Vitae (Ex. NYS000208.) Based on his demonstrated knowledge, skill, experience, training, and education, we find that Dr.
Sheppard is qualified to provide expert opinion testimony on economic theory and the impact of land use on housing values.
7.47 However, we afford little weight to Dr. Sheppards testimony on issues related to the Staffs analysis of the impacts of license renewal on off-site land use. Parties bear the burden of demonstrating the expert qualifications of their witnesses, which they do by pointing to relevant knowledge, skill, experience, training, or education. Duke Energy Corp. (Catawba Nuclear Station, Units 1 and 2), CLI-04-21, 60 NRC 21, 27-28 (2004). Dr. Sheppard does not
have any demonstrated experience in preparing or analyzing environmental impact statements discussion of the impacts of license renewal on off-site land use. Therefore, we give little weight to Dr. Sheppards testimony on these issues.
B. The Environmental Reports Analysis of Off-site Land Use Impacts 7.48 New York asserted that Entergys Environmental Report was deficient for failing to address the impact of license renewal on the value of adjacent land and thus on land use.
2007 Petition at 170.
7.49 Entergy witness Donald Cleary testified that in Section 4.18 of the ER, Entergy addressed the off-site land use impacts of license renewal consistent with regulatory requirements and guidance. Entergy Testimony on NYS-17B (Ex. ENT000132) at 35. Mr.
Cleary explained that, consistent with the GEIS and regulatory guidance, Entergy examined the impact of population growth and tax revenues to local jurisdictions associated with license renewal. Id. He stated that the ER found that plant-related population growth impacts associated with license renewal would likely be SMALL because Entergy did not plan to add additional workers during the license renewal period. Id. He stated that, while tax payments represent a significant portion of local tax revenues, the impacts from tax-related license renewal would likely have a SMALL impact on land use because pre-established land use development patterns were expected to continue. Id. at 36. He also cited public service and regulatory controls in place that support and guide land use and development. Id.
7.50 Mr. Cleary also testified that in Section 4.14 of the ER Entergy addressed the impacts of license renewal on housing, consistent with the GEIS and regulatory guidance. Id. at
- 37. The ER concluded that the impact of license renewal on housing would be SMALL because the plant is located in a high population density area; Entergy does not anticipate increasing the size of the Indian Point workforce; that workforce makes up a very small percentage of the local population; and vacancy rates and new housing creation have kept pace with low to moderate growth in the areas population. Id. at 37-38.
7.51 Testimony from Staff witness Jeffrey Rikhoff confirmed Mr. Clearys testimony regarding Entergys discussion of the land use impacts of license renewal. Mr. Rikhoff testified that Entergy provided an assessment of the impacts of license renewal on land use within the vicinity of the plant in Section 4.18 of the ER and that the ERs discussion of off-site land use was adequate because it met the requirements in 10 C.F.R. § 51.53(c)(3)(ii)(I). Staff Testimony on NYS-17B (Ex. NRCR00081) at 8.
7.52 Mr. Rikhoff also testified that the ERs assessment of land use impacts was consistent with the guidance the Staff provides to license renewal applicants on the format and content of environmental reports. Id. at 9.
7.53 Further, Mr. Rikhoff testified that Regulatory Guide 4.2, Supplement 1 (Ex.
ENT000136), provides guidance to license renewal applicants on the format and content of the ER, and that Section 4.17, Offsite Land Use, describes the information and analysis content of the assessment to be conducted and submitted in the ER with respect to off-site land use impacts. Id. at 8. He explained that the primary focus of the assessment is on potential population and tax revenue changes resulting from license renewal. Id. He stated that Entergy provided this information in section 4.18 of its ER. Id.
7.54 Based on the foregoing testimony and evidence, we find that Entergys Environmental Report discussed the off-site land use impacts of license renewal.
7.55 We note that, in the GEIS, the Commission addressed the impacts of license renewal on off-site land use and identified the two factors (population growth and tax-related revenue changes) that varied from site to site and precluded the Commission from making a generic determination on off-site land use.
7.56 We find that the Environmental Reports discussion of these two factors, population growth and tax-related revenue changes, are consistent with the approach taken in the GEIS.
7.57 We therefore find that the Environmental Report was consistent with the regulatory requirements in 10 C.F.R. § 51.53(c)(3)(ii)(I) and the GEIS.
7.58 Finally, we find that the Environmental Report was consistent with the regulatory guidance provided in Regulatory Guide 4.2, Supplement 1.
C. The Analysis of Off-site Land Use Impacts in the DSEIS 7.59 New York asserted that the DSEISs analysis of off-site land use impacts, which addressed only plant-related population growth and tax revenues associated with the plant, was inadequate. New Yorks Supplemental Contentions at 15. New York stated that the DSEISs analysis ignored the positive impact on land use and land value from denial of the license extension for IP2 and IP3. Id.
7.60 Staff witness Jeffrey Rikhoff testified that the Staffs analysis of off-site land use impacts in Section 4.4.3 of the DSEIS meets the requirements of 10 C.F.R. § 51.71(d). Staff Testimony on NYS-37 (Ex. NRCR00081) at 9.
7.61 Mr. Rikhoff further testified that the Staffs assessment of off-site land use impacts is consistent with NRC Staff guidance in NUREG-1555, Supplement 1, Section 4.4.3 Offsite Land Use During Operations. Staff Testimony on NYS-37 (Ex. NRCR00081) at 9-10.
7.62 He explained that the Staff conducted a plant-specific environmental review of off-site land use impacts resulting from continued nuclear plant operations during the license renewal term due to potential changes in population (resulting from changes in the workforce at IP2 and IP3) and changes in tax revenue paid to local jurisdictions. Id. at 10.
7.63 Mr. Rikhoff testified that the Staff found that there would be no offsite land use impacts as a result of population changes associated with license renewal at Indian Point, because Entergy did not plan to increase the number of workers at IP2 and IP3 during the license renewal term. Id.
7.64 He testified that the Staff also found that land use conditions in those jurisdictions had not changed because of Entergys property tax payments and that this suggested that Entergys property tax payments have had little or no effect on off-site land use. Id. He stated that because Entergy was not planning any new construction or other improvements in connection with license renewal, the assessed value of the Indian Point property and its property tax payments would remain relatively unchanged. Id. Therefore, he stated, the Staff concluded that there would be no tax revenue related impacts on off-site land use as a result of license renewal. Id.
D. The Analysis of Off-Site Land Use Impacts in the FSEIS 7.65 New Yorks criticism of the FSEIS was identical to its criticism of the DSEIS:
New York asserted that the FSEISs evaluation of land use impacts is deficient because it fails to adequately evaluate the positive impact on land use and land value from denial of the license extension for IP2 and IP3 and that the FSEIS improperly limited its analysis of the land use impacts of relicensing to plant-related population growth or to land development driven by tax revenues generated by the plant. State of New York Contention 17B, January 24, 2011, at 2.
7.66 Staff witness Jeffrey Rikhoff testified that the Staffs analysis of off-site land use impacts in Section 4.4.3 of the FSEIS meets the requirements of 10 C.F.R. § 51.95(c). Staff Testimony on NYS-37 (Ex. NRCR00081) at 10.
7.67 Mr. Rikhoff further testified that the Staffs assessment of off-site land use impacts is consistent with NRC Staff guidance in NUREG-1555, Supplement 1, Section 4.4.3 Offsite Land Use During Operations. Id. at 11-12.
7.68 He explained that because the factual basis for the Staffs analysis had not changed between the issuance of the DSEIS and the FSEIS, the analysis and conclusions in the FSEIS were the same as in the DSEIS. Id. at 12. He stated that, in the FSEIS, the Staff found that since there would be no increase in employment or new construction or other
improvements during the license renewal term, there would be no population or tax revenue-related impacts on off-site land use as a result of license renewal. Id.
7.69 In the FSEIS in Section 4.4.3, the Staff concluded that the additional number of refueling outage workers would not cause any permanent population-related land use changes in the immediate vicinity of IP2 and IP3. FSEIS (Ex. NYS000133B) at 4-46. With respect to tax revenue-related impacts, the Staff wrote:
Entergy has indicated that it plans no license-renewal-related construction activities to support the continued operation of IP2 and IP3 during the license renewal period. Accordingly, the NRC staff expects that there would be no increase in the assessed value of IP2 and IP3 and that the annual payment-in-lieu-of-taxes and property taxes paid to the Town of Cortlandt, the Hendrick Hudson Central School District, and the Village of Buchanan would remain relatively unchanged throughout the license renewal period.
Id. The Staff noted that Entergy might replace the IP2 and IP3 reactor vessel heads and control rod drive mechanisms but that they would not likely increase the assessed value of IP2 and IP3, and property tax payments would remain unchanged. Id. at 4-47.
7.70 The Staff in the FSEIS in Section 4.4.1 also analyzed housing impacts associated with license renewal. Id. at 4-43 to 45. The Staff observed that Indian Point was located in a high density population area and that no growth control measures were in effect and, therefore, any changes in the level of employment at Indian Point would have little noticeable effect on housing availability. Id. at 4-44. The Staff noted that Entergy did not plan to hire additional workers; therefore, there would likely be no additional demand for permanent housing. Id. The Staff also noted that available housing had kept pace with or exceeded population growth in the area. Id. The Staff concluded that there would be no impact on permanent housing during the license renewal term beyond what is currently being experienced. Id.
7.71 Staff witness Jeffrey Rikhoff testified that Entergy and the Staff were not required to address the impact of license renewal on property values for property in the area surrounding
Indian Point. Staff Testimony on NYS-17B (Ex. NRCR00081) at 7-8, 14. He explained that in the GEIS, the offsite land use issue only considers the impact of license renewal on the use of offsite land (e.g., the use of the land for agricultural, residential, commercial, or industrial purposes), not its value. Id. at 7. He stated that the issue is whether continued operations will cause off-site land use to change and gave the example of agricultural land being converted to residential use or commercial use. Id. at 7-8.
7.72 Mr. Rikhoff also pointed out that the GEIS concluded that [h]ousing impacts related to housing value and marketability that occur during the license renewal term are the same as those currently being experienced. Id. at 15, quoting GEIS (Ex. NYS000131G) at C-
- 85. This, he said, supported his statement that [b]ecause any impact to property values would have occurred prior to or during plant construction, that impact is already reflected in existing property values. Id.
7.73 Based on the foregoing testimony and evidence, we find that the FSEIS discussed the off-site land use impacts of license renewal.
7.74 Based on our review of the GEIS, we find that the GEIS addressed the impact of license renewal on housing value and marketability.
7.75 We find that the FSEISs discussion of the effects of population growth and tax-related revenue changes on nearby property is consistent with the approach taken in the GEIS.
7.76 We therefore find that the FSEIS was consistent with the regulatory requirements in 10 C.F.R. § 51.95 and the GEIS.
7.77 We also find that the FSEIS was consistent with the regulatory guidance provided in NUREG-1555, Supplement 1.
E. Analysis of Land Use Impacts in the No-Action Alternative 7.78 New York witness Dr. Sheppard testified that his analysis suggested that denial of the license renewal application would result in a rebound in excess of $1 billion in property
values for properties near Indian Point and asserted that this impact should have been discussed as a socioeconomic land use impact. New York Testimony on NYS-17B (Ex.
NYSR00224) at 7.
7.79 Staff witness Andrew Stuyvenberg testified, however, that the Staff found that plant shut-down could result in increased property values for homes near Indian Point. Staff Testimony on NYS-17B (Ex. NRCR00081) at 19. Mr. Stuyvenberg stated that this impact was discussed in the FSEIS in Section 8.2 as part of the Staffs No-Action Alternative. Id. He stated that it was discussed by the Applicant in its Environmental Report in Section 7.4 and Section 8.
Id. at 16-17.
7.80 Mr. Stuyvenberg explained that in section 7.4 of the ER, Entergy adopted the GEIS analysis of decommissioning impacts from the 1,155 MW Columbia Nuclear Power Plant for its analysis of decommissioning impacts. Id. at 16. He testified that the GEIS concluded that the socioeconomic impact from decommissioning is a Category 1 issue. Id. He observed that in the ER, Entergy stated that the impacts from decommissioning under the no-action alternative were not substantially different than those occurring after license renewal. Id. at 16-17. This last conclusion, he stated, was consistent with the GEIS findings at 7-25, in section 7-4, Conclusions. Id. at 17, citing GEIS (Ex. NYS000131D) at 7-25.
7.81 He testified that in Chapter 8 of the ER, Entergy evaluated the impacts of land use for each of the alternatives to license renewal that it deemed to be reasonable: coal with closed-cycle cooling, coal with open-cycle cooling, natural gas with closed-cycle cooling, gas with open-cycle cooling, new nuclear with closed-cycle cooling, and new nuclear with open-cycle cooling. Staff Testimony on NYS-17B (Ex. NRCR00081) at 17. He noted that Entergy also considered land-use impacts from closed-cycle cooling retrofit at the existing Indian Point units. Id.
7.82 Mr. Stuyvenberg stated that the Entergy ER provided an assessment of impacts from plant shutdown beginning in section 8.4. Id. He testified that the applicant discussed
resource-specific impacts and noted that the the short-term impacts would include loss of Payment-in-Lieu-of-Taxes (PILOT) for Westchester County and the other counties surrounding the site, due to loss of revenue to vendors and contractors, loss of employment, and secondary impacts. Id.
7.83 He stated that Entergy considered the land-use impacts from no action through its adoption of the GEISs analysis of socioeconomic impacts from decommissioning and its consideration of land-use impacts that could result from various types of replacement power. Id.
He also stated that Entergy provided an assessment of impacts from plant shutdown that addressed the potential for changes to revenue for local governmental units which, he stated, was a driver of land-use impacts. Id.
7.84 Mr. Stuyvenberg testified that in the FSEIS in Section 8.2 (Ex. NYS000133C) at 8-22 through 25, the Staff analyzed the impact of the No-Action alternative on off-site land use for land near the plant. Staff Testimony on NYS-17B (Ex. NRCR00081) at 17-18. There, he testified, the Staff stated that long term impacts on off-site land use resulting from Indian Point shutdown may include the removal of transmission lines, the failure to maintain transmission line right-of-ways, and the possibility that those right-of-ways could be made available for some other use. Id. at 18. Mr. Stuyvenberg stated that the Staff also noted that a reduction in uranium-mining land-use may occur. Id. He testified that population-driven changes to off-site land use under the No-Action Alternative were not viewed as significant and that any socioeconomic impacts from the loss of jobs associated with plant shutdown (out-migration) would be absorbed by the general surrounding population and housing base. Id.
7.85 In the FSEIS, the Staff concluded that [o]nsite land use will not be affected immediately by plant shutdowns. Plant structures and other facilities are likely to remain in place until decommissioning. FSEIS (Ex. NYS000133C) at 8-22.
7.86 Mr. Stuyvenberg testified that in the FSEIS the Staff recognized that the No-Action Alternative could result in loss of tax and other payments, but that the loss would only
have a noticeable impact on specific local jurisdictions (Hendrick Hudson Central School District, Village of Buchanan, Town of Cortlandt, and the Verplanck Fire District). Staff Testimony on NYS-17B (Ex. NRCR00081) at 18. He quoted the FSEIS: The shutdown of IP2 and IP3 may result in increased property values of the homes in the communities surrounding the site. Id. He said that the Staff noted that these increases could trigger compensatory tax revenues to replace some of those lost from shutdown of IP2 and IP3, but that some taxing jurisdictions may have to raise tax rates to fully compensate for the losses. Id. He explained that this conclusion was based on a 2005 report developed by Levitan and Associates for Westchester County (Levitan Report) (Ex. NYS000056). He stated that the Levitan Report did not indicate the overall magnitude of the property value and tax effect or whether the net effect on tax revenues would be positive or negative. Staff Testimony on NYS-17B (Ex. NRCR00081) at 18.
7.87 He testified that the Staff also addressed potential land-use impacts from other alternatives to Indian Pointwhich are potential consequences of no actionincluding natural-gas combined-cycle capacity at the Indian Point site, a new site, or a repowered site; conservation/energy efficiency; and two combination alternatives. Id.
7.88 Mr. Stuyvenberg stated that the Staff noted that revenue losses from Indian Point operation would affect the communities closest to and most reliant on the plants tax revenue and PILOT. Id. at 19. He pointed out that if property values and property tax revenues increased, then some of these effects would be smaller. Id. He explained that the Staff concluded that the socioeconomic impacts of plant shutdown would likely be SMALL to MODERATE (with MODERATE effects for some local jurisdiction, including the Hendrick Hudson Central School District, Village of Buchanan, Town of Cortlandt, and the Verplanck Fire District). Id.
7.89 Mr. Stuyvenberg testified that the Staff also addressed the impact of the No-Action Alternative on off-site property values for the area around Indian Point. Id. He stated
that in FSEIS (Ex. NYS000133C) Section 8.2, No-Action Alternative, Socioeconomics subsection, on page 8-24 to 8-25, the Staff indicated that the shutdown of IP2 and IP3 may result in increased property values of the homes in the communities surrounding the site. Id.
Mr. Stuyvenberg explained that the Staff based that statement on the Levitan Report.
7.90 The Levitan Report was a 2005 report commissioned by Westchester County and the County of Westchester Public Utility Service Agency to identify retirement options for Indian Point. Levitan Report (Ex. NYS000056) at OAG10000197_002. The report stated:
If IP were retired and not replaced it is likely that property values for homeowners would increase even if the IP site stores SNF [spent nuclear fuel]. However, that impact might be offset by higher property tax rates to compensate for the decrease in PILOT payments, and the corresponding tax rate increase for other taxpayers. In any event, such impacts would be relatively confined to Buchanan. LAI [Levitan & Associates, Inc.] did not speculate as to the net effect of local property values for the purposes of this assignment.
Id. at OAGI0000197_130.
7.91 In the FSEIS, the Staff cited the Levitan Report and concluded that
[t]he shutdown of IP2 and IP3 may result in increased property values of the homes in the communities surrounding the site (Levitan and Associates, Inc. 2005). This would result in some increases in tax revenues. However, to fully offset the revenues lost from the shutdown of IP2 and IP3, taxing jurisdictions most likely would have to compensate with higher property taxes (Levitan and Associates, Inc. 2005). The combined increase in property values and increased taxes could have a noticeable effect on some area homeowners and business, though Levitan and Associates did not indicate the magnitude of this effect and whether the net effect would be positive or negative.
FSEIS (Ex. NYS000133C) at 8-25.
7.92 Based on the testimony and evidence in the record, we find that the Staff addressed the impact of the No-Action Alternative on off-site land use and property values.
7.93 We also find that while the Staff was not able to quantify the impact of denial of license renewal on off-site property values, the Staff did discuss the impact in its FSEIS and found that denial of license renewal could result in an increase in property values.
7.94 For the reasons set forth below with respect to Dr. Sheppards reliance on unsupported assumptions and vague, varied and contradictory positions regarding the timing and magnitude of the alleged rebound in property values, the deficiencies in his analysis (regarding causation, definition of the event that figured prominently in his analysis, and confounding events) and the confusion in his analysis regarding the decommissioning schedule, we accord little weight to Dr. Sheppards analysis that found that nearby property values would rebound by over $1 billion under the No-Action Alternative.
F. Property Value Impacts as Calculated by Entergy 7.95 Entergy witness Dr. Tolley conducted a study of the impact of Indian Point on nearby property values, applying hedonic modeling principles to July 2011 asking prices from the Multiple Listing Service. Entergy Testimony on NYS-17B (Ex. ENT000132) at 70-75; Transcript (Tr.) at 2589-90. He found that proximity to the Indian Point site is not a disamenity and thus, Indian Point does not adversely impact property values. Entergy Testimony on NYS-17B (Ex. ENT000132) at 75.
7.96 He also reviewed eight studies of the impact of power plants on nearby property values and concluded: the weight of the evidence from these studies indicates that there is no reliable basis for concluding that proximity to nuclear power plants causes lower property values. Entergy Testimony on NYS-17B (Ex. ENT000132) at 63-67.
7.97 Dr. Tolley testified that hedonic modeling is the accepted method for determining property value impacts; it is viewed as reliable and is widely used. Id. at 62-64; Tr. at 2589, 2649. In contrast, he testified, the resale sales and event analysis utilized by Dr. Sheppard is rarely used. Tr. at 2649-50.
7.98 Dr. Tolleys testimony regarding the extensive use of hedonic modeling was not contravened by the testimony of any other witness.
7.99 Given that hedonic modeling is well-accepted and widely used, we give substantial weight to Dr. Tolleys hedonic model and the models conclusion that there is no basis for asserting that proximity to a nuclear power plant causes a decrease in property values.
G. Property Value Impacts as Calculated by New York 7.100 New York witness Dr. Sheppard originally stated that Indian Points adverse impact on property values was $576 million. Potential Impacts of Indian Point Relicensing on Property Values (Ex. NYS000226) (2007 Sheppard Report) at 2. Dr. Sheppard derived this figure by applying an impact factor from a prior hedonic analysis to 2000 census data for the area around Indian Point. Id. at 2-6. He concluded that removal of the impacts of the Indian Point Nuclear plant would increase property values by $576,026,601[.] Id. at 6.
7.101 Dr. Sheppard also asserted that the increase in property values would result in a change in land use. Id. at 2.
7.102 In his 2009 report, Dr. Sheppard stated that relicensing of IP2 and IP3 would impose additional burdens of $300 -$340 million on adjacent properties. Potential Impacts of Indian Point Relicensing with Delayed Site Reclamation, (Ex. NYS000227) (2009 Sheppard Report) at 5.
7.103 In a report he produced in January 2011, Dr. Sheppard stated that license renewal with delayed removal of waste and site reclamation imposes a burden on the communities that is equivalent to an immediate charge of between $169 million and $237 million. January 24, 2011 Report of Dr. Stephen C. Sheppard in connection with Contention 17B (Ex. NYS000230) (January 2011 Sheppard Report) at 6.
7.104 In a December 2011 report, Dr. Sheppard stated that the adverse impact of Indian Point on property values was over $1 billion. Impacts of the Indian Point Energy Center on Property Values, December 11, 2011 (Ex. NYSR000231) (December 2011 Sheppard Report), at 1, 12.
7.105 While his prior reports were based on hedonic model studies, Dr. Sheppards December 2011 report was based on a resale price analysis tied to a specific event, the commencement of operations of Indian Point Units 2 and 3. Entergy Testimony on NYS-17B (Ex. ENT000132) at 82, 107, 129.
7.106 Dr. Sheppard explained that in his December 2011 report, he determined the impact on property values by employ[ing] a resale price analysis in which you track properties over time and observe the purchase price and sale price of the property, and estimate the impact on property values at the time that a possible source of disamenity emerges. Tr. at 2558. He used data from real estate transactions, including addresses, sale dates, and sale prices for properties near Indian Point during the period May 1999 through June 2009.
December 2011 Sheppard Report (Ex. NYSR000231) at 5.
7.107 In his analysis, Dr. Sheppard used a disamenity event that began in 1974 and ended in 1976, based on the commencement of operations at Indian Point Units 2 and 3. Id. at 8; New York Testimony on NYS-17B (Ex. NYSR00224) at 14, 29. He explained that he used this time period because it provides a way of identifying the residential property asset ownership periods that would have been directly affected by the arrival of IPEC [Indian Point Energy Center]. December 2011 Sheppard Report (Ex. NYSR000231) at 8. Dr. Sheppard testified that [t]he 1974 construction of Unit 2 and the 1976 construction of Unit 3 created a treatment group that allows the measurement of the change in property values as a result of the event that occurred from 1974 to 1976. For our purposes, the event was the commencement of operations of the two units. New York Testimony on NYS-17B (Ex.
NYSR00224) at 29.
7.108 Dr. Sheppard posited that the value of properties purchased and sold prior to 1974 or purchased and sold after 1976 escaped the Indian Point treatment and those values were not affected by plant operations; but that properties that were purchased prior to 1974 and sold after 1976 were affected by the plant operations. Id. at 29-30; Tr. at 2557-62; 2581-82. Dr.
Sheppard testified that his objective has been to estimate how much residential land value might increase when IPEC is decommissioned and the site is returned for use. New York Testimony on NYS-17B (Ex. NYSR000224) at 39. At the hearing, he testified that he was trying to figure out what will be the impact of when it stops. Lets look at what the impact was when it started. And then when it stops, we can hypothesize, I hypothesize that the effect will undo itself. Tr. at 2585; see also 2613-14.
7.109 Dr. Sheppard has attempted to calculate the impact of the cessation of operations at Indian Point Units 2 and 3 by examining its opposite: the commencement of operations at those units. Tr. at 2559-64; 2582. While this approach has some logical appeal, it founders on the unavoidable facts and circumstances here. When Indian Point Unit 2 commenced operations, Indian Point Unit 1 had already been constructed and had been operating for many years; yet Dr. Sheppard failed to address the impact of Unit 1 on property values. At the other end of the spectrum, at the cessation of operations, Dr. Sheppard failed to address the impact of the continued presence on the Indian Point site of structures and components during the subsequent 60 year period of SAFSTOR and decommissioning. These are just two examples of the considerations that could affect Dr. Sheppards analysis and which he has not addressed. Because, as set forth below, Dr. Sheppard failed to establish causation, and failed to address confounding factors and other issues and their impact on his analysis, we accord his analysis little weight.
7.110 We also accord Dr. Sheppards analysis limited weight because of its reliance on unsupported assumptions and its vague, varied, and contradictory positions regarding the timing and magnitude of the alleged rebound in property values.
H. Deficiencies in Dr. Sheppards December 2011 Analysis
- 1. Failure to Establish Causation 7.111 Staff and Entergy witnesses asserted that Dr. Sheppards December 2011 analysis was deficient for failure to establish a link between changes in property value and
changes in land use. Dr. Sheppard stated, without evidence or citation, It is well-established that, within regulatory bounds, land uses are determined by property values and the uses that tend to generate the highest values. 2007 Sheppard Report (Ex. NYS000226) at 2. Staff witness Andrew Stuyvenberg testified: Dr. Sheppard connects this mathematically derived effect on housing values to land use only by his opinion; he presents no evidence to support his assertion. Staff Testimony on NYS-17B (Ex. NRCR00081) at 27. Entergy witness Dr. Tolley similarly testified that Dr. Sheppard simply assumes that these asserted property value impacts cause land use impacts. . . . Dr. Sheppard simply equates land use impacts with his postulated property value impacts without evidentiary support. Entergy Testimony on NYS-17B (Ex. ENT 000132) at 79, 80, and 83. Dr. Tolley testified that offsite land use is determined by a number of factors: historic land use patterns, current land use regulations and zoning restrictions, tax effects both positive and negative, population trends, and development plans. Id. at 80. Dr.
Sheppard agreed, in his rebuttal testimony, that regulatory controls, local public expenditures and tax rates and environmental amenities and disamenities affect land use. New York Rebuttal Testimony on NYS-17B (Ex. NYS000434) at 8-9. While Dr. Sheppard insisted that land values were a major driver of land use, he failed to cite any references directly supportive of his claim. 32 7.112 We find, based on the testimony and evidence proffered in this proceeding, that Dr. Sheppard has not provided a factual basis for his assumption that changes in land values will result in changes in land use in these circumstances, given the number and variety of other forces that, even he acknowledges, are at work.
- 2. Incorrect Treatment Period (1974-1976) 7.113 Both the Staff and Entergy challenge Dr. Sheppards use of the period 1974 to 1976 as the period of time during which Indian Point allegedly exerted a negative effect on local property values.
32 Dr. Sheppards citation, id. at 8, to a book co-authored by Dr. Tolley was not directly on point.
7.114 Staff witness Andrew Stuyvenberg observed that in 1971, Indian Point Unit 1 was in operation and that construction for IP2 was substantially complete and that Unit 2 had been cleared for fuel loading and subcritical testing. Staff Testimony on NYS-17B (Ex. NRCR00081) at 23-24. He pointed out that Unit 1s superheater stack was one of the most visible structures at the Indian Point site and remains so today. Id. at 24. He stated that Unit 3 was approved for construction in 1969 and was substantially complete by the time its operating license was issued in late 1975. Id. Mr. Stuyvenberg disagreed with Dr. Sheppards choice of the 1974-76 event window, or treatment period, and concluded that evaluating the change in prices for homes sold both prior to 1974 and after 1976 does not appear to capture the effect of Indian Points conversion to a nuclear power plant site or the introduction of plant structures to the site. Id.
7.115 Dr. Tolley, testifying for Entergy, also disapproved of Dr. Sheppards use of the period 1974 to 1976 to define the Indian Point treatment period. Dr. Tolley testified that the use of the 1974 to 1976 time period ignored anticipatory considerations. Entergy Testimony on NYS-17B (Ex. ENT000132) at 124. Dr. Tolley cited studies that demonstrated that housing prices go up and down in response to news reports leading to anticipation of construction and in advance of actual construction of facilities. Id. He concluded, Dr. Sheppard makes no attempt to define the correct event as when there would have been such property value effects (i.e., the time when the public became aware that IP2 and IP3 would be constructed). Id. at 125.
7.116 At the hearing, Dr. Sheppard acknowledged that there may have been early stage disamenities associated with Indian Point and its construction. Tr. at 2561-62, 2586-87.
7.117 We find that Dr. Sheppards use of the 1974 to 1976 time period for his resale sales analysis is not supported by the facts.
- 3. Failure to Control for Confounding Events 7.118 Dr. Tolley disagreed with Dr. Sheppards use of a resale price analysis tied to a two year-long event. Dr. Tolley testified that while the hedonic analysis that he used (and that
Dr. Sheppard himself relied on in his first four studies) was used overwhelmingly and was well-accepted, the resale price/event analysis was very rarely used; and Dr. Sheppard was only able to supply two examples of such analyses. Entergy Testimony on NYS-17 (Ex. ENT000132) at 126, see also Tr. at 2649-50. Dr. Tolley explained that this was because event studies, by their nature, can be properly applied only under certain limited circumstances. Event studies are most common in financial analysis to estimate a discrete events impact on security prices (e.g.,
how an announcement that two firms will merge affects their stock prices). Entergy Testimony on NYS-17 (Ex. ENT000132) at 126.
7.119 Dr. Tolley explained the limited utility of event studies. He stated that even a well-designed event study cannot be validly applied to an event unless the event occupies a very small time window and can be unambiguously defined. Id. Dr. Tolley explained that the longer the event window, the more difficult it is to control for confounding events[.] Id. at 127.
At the hearing, he testified:
If you are using an event study, its loud and clear what you need to do is hold everything else constant. Thats the whole idea. All the houses, all the residences need to be affected by the same thing and very similarly, because the whole idea is to just separate out this one thing that youre trying to measure. And if you allow all these other events in, then its not valid.
Tr. at 2578-79.
7.120 Dr. Tolley explained that a typical event study used a sampling interval of a day and that using even a month-long interval risked introduction of noise sufficient to overwhelm the results of the study. Entergy Testimony on NYS-17B (Ex. ENT000132) at 127. He opined, consistent with studies he cited, that a year was too long an event and that Sheppards use of a two year event period rendered his report unreliable. Id. at 126-128.
7.121 At the hearing, Dr. Sheppard admitted Im not trying to capture every disamenity that may or may not be associated with the plant. Im trying to focus in on that disamenity that
will - that disamenity, if any, that will cease once the plant ceases commercial operation. Id. at 2569.
7.122 When asked how he controlled against the impacts of high interest rates and high unemployment, Dr. Sheppard answered that his use of the two year event period was intended to control for those extraneous effects. Tr. at 2563. He did not, however, explain how the use of the two year period eliminated the effect of extraneous events.
7.123 When he was asked about the effect on his analysis of other facilities or entities that could be considered disamenities, Dr. Sheppard acknowledged that there were other industrial land uses and land changes occurring during the time period of his analysis, but he asserted that his focus on a specific time period and a specific location prevented any serious skewing of his results. Id. at 2576-77.
7.124 Dr. Sheppard also admitted that his analysis may be adversely affected by early stage disamenities associated with Indian Point and its construction. Tr. at 2561-62, 2586-89.
7.125 With respect to late stage disamenities, Dr. Sheppard admitted that some disamenity could remain after the cessation of operations. Tr. at 2638.
7.126 We find, based on the testimony and evidenced adduced in this proceeding, that Dr. Sheppards study is entitled to limited weight because of its inability to control for the effect of confounding events.
- 4. Unsupported Testimony Regarding a Rebound in Property Values 7.127 Staff witness John Boska testified that decommissioning at Indian Point must be completed by 2073 for IP2 and 2075 for IP3 if the licenses are not renewed and by 2093 for IP2 and 2095 for IP3 if the licenses are renewed. Staff Testimony on NYS-17B (Ex. NRCR00081) at 21.
7.128 Mr. Boska stated that decommissioning includes the removal of radioactive structures and components; it does not include removal of all structures and components, and it does not require restoration of the site to unrestricted or greenfield status. Id. at 20-21.
7.129 Mr. Reamer, for Entergy, testified that the local jurisdictions land use planning document indicated that after cessation of operations the Indian Point site would continue to be zoned for heavy industry, except for a small treed area. Tr. at 2615. He also testified that most of the decommissioning activity would take place during the end of the decommissioning period.
Tr. at 2635-36. He stated that, during the 60 year decommissioning period the site would still be restricted, spent fuel would remain on site and structures and components would also remain on site, affecting the view. Tr. at 2617.
7.130 Dr. Sheppard posited seven different decommissioning completion dates, ranging from 2025 through 2137. See 2007 Sheppard Report (Ex. NYS000226); 2009 Sheppard Report (Ex. NYS000227) at 1, 2; January 2011 Sheppard Report (Ex. NYS000230) at 3-6.
7.131 And while he asserted that property values would rebound after the cessation of operations at Indian Point, Tr. at 2585, Dr. Sheppard did not state when that rebound would occur. He assumed that the impact of operations would cease when operations cease and assumed that the impact or Indian Point treatment would undo itself. Id. However, he did not fix that point in time, or even estimate when that would be. Nowhere in his pre-filed testimony, or in the many reports he wrote, did Dr. Sheppard state when property values would rebound.
7.132 Dr. Sheppard testified that he did not undertake an analysis of the dynamic process of drawdown of disamenity or increase in property values. Tr. at 2639.
7.133 Nevertheless, later at the hearing, Dr. Sheppard reversed course and gave a time period for the rebound in property values that he posited would occur: he testified that property values would rebound roughly within 10 years of cessation of operations. Tr. at 2640.
He testified that he believed that the rebound would occur even though significant disamenities might still be associated with the site. Id.
7.134 Dr. Sheppard provided no basis, no studies, and no references in support of his testimony at the hearing that property values would rebound within 10 years.
7.135 Given the fact that in his prior testimony Dr. Sheppard did not provide a date by which property values would rebound and given the lack of support for his testimony to that effect at the hearing, we afford little weight to his testimony that property values would rebound by $1 billion within ten years of the cessation of operations at Indian Point.
- 5. Additional Errors in Dr. Sheppards December 2011 Analysis 7.136 Dr. Tolley for Entergy, testified that his review of Dr. Sheppards data revealed a number of errors: the inclusion of sales of an empty lot and its subsequent sale as a completed residence (which distorts the net return on holding the property by leaving out a major expense);
the inclusion of properties in which the residence was destroyed by fire (again, distorting the net return by ignoring a major loss); the inclusion of non-arms length transactions (transactions between family members and foreclosures and auctions); sales of commercial properties; sales prices marked as unverified and not indicative of market value; typographical errors; and transactions involving large purchases of land that were subsequently subdivided and developed into residential properties. Entergy Testimony on NYS-17B (Ex. ENT000132) at 114-15.
7.137 Dr. Tolley also pointed out that Dr. Sheppard failed to account for payments-in-lieu-of-taxes and tax payments. Id. at 111. These payments were sufficient, in Dr. Tolleys analyses, to swamp all the worst case negative effects the December 2011 Sheppard Report posits. Id. at 113.
7.138 Dr. Tolley asserted that Dr. Sheppards use of a constant rate of return in his analysis failed to take into account the impact of periods of unusually high returns. Id. at 116.
Specifically, periods of unusually high returns in years long after 1974 to 1976 that affected the control group more than the treatment group attest to the importance of this problem. Id. at 116-17.
7.139 Staff witness Andrew Stuyvenberg criticized Dr. Sheppards analysis for presenting historical impacts as current impacts. Staff Testimony on NYS-17B (Ex.
NRCR00081) at 24. Mr. Stuyvenberg stated that, under Dr. Sheppards rubric, properties purchased after 1976 were likely less expensive for buyers than they would have been if Indian Point had not been there. Id. at 24-25. Mr. Stuyvenberg explained that the effect - loss of value - that Dr. Sheppard identified would have affected those sellers who made the first post-1976 sale and that most of the first post-1976 sales would have taken place from the late-1970s and through the 1980s. Id. at 25. Mr. Stuyvenberg pointed out that Dr. Sheppard acknowledged that this claimed loss in value occurred in 1976, and that he used a price index to carry the losses forward to January 2011 housing values. Id., citing New York Testimony on NYS-17B (Ex. NYS000434) at 35. Mr. Stuyvenberg stated that these losses were not realized by homeowners in January 2011 or on an ongoing basis, but would likely have been realized 20 or more years before January of 2011. Id. The homeowners who purchased a home after 1976 received an average return of nine percent on their initial home investment, a return that Dr.
Sheppard indicated an investor would consider good. Id. According to Mr. Stuyvenberg, the proper time to account for any losses, then, was either when the losses occurred to home owners (in the first post-1976 sale) or in 1976, when Dr. Sheppard indicated the effect occurred.
In either case, Mr. Stuyvenberg explained, license renewal would not impose new losses on existing homeowners unless they happen to be one of the very few remaining owners who have owned a home since 1976 or earlier. Id. Mr. Stuyvenberg concluded that because it is likely that almost all homeowners in the area have purchased their homes since 1976 (a 35-year homeownership period is more than 3 standard deviations from Dr. Sheppards mean homeownership period), Dr. Sheppards analysis indicated that virtually no current homeowners would experience any loss. Id.
7.140 Mr. Stuyvenberg also took issue with Dr. Sheppards analysis of property values through mid-2009. Id. at 25-26. Mr. Stuyvenberg testified that Dr. Sheppard failed to use the most-recent home sales data, which would have better reflected the effects of the recent real-
estate collapse. Id. Mr. Stuyvenberg asserted that if Dr. Sheppard had included sales from 2010, his overall claims of housing value gains would have been smaller. Id. at 26.
7.141 We find that Dr. Sheppards December 2011 analysis suffers from numerous deficiencies, as outlined above, and we therefore decline to give it much weight.
I. Decommissioning Schedules 7.142 New York witness Dr. Sheppard has proffered several different calculations of the adverse effect he alleges that Indian Point has had on the value of adjacent property.
Those calculations incorporated various assumptions regarding the decommissioning schedule for Indian Point.
7.143 Dr. Sheppard, in his 2007 report, Potential Impacts of Indian Point Relicensing on Property Values (Ex. NYS000226), assumed that if a renewed license issued, Indian Point would be fully restored no later than 30 years after the renewed licenses expired -- i.e. by 2065. 33 He did not make this clear in his 2007 report, but in a subsequent report he explained that this was his assumption. 34 7.144 He opined that the highest and best use of the Indian Point site upon decommissioning would be a combination of attractive riverfront development that would include employment and other attractive locations. 2007 Sheppard Report (Ex. NYS000226) at 3.
7.145 Dr. Sheppard produced another report in 2009, titled Potential Impacts of Indian Point Relicensing with Delayed Site Reclamation, (Ex. NYS000227). In the 2009 Sheppard Report, he stated that he had been advised that waste generated by Indian Point operations may remain on the site for much longer and perhaps indefinitely. Id. at 1. As a result, he 33 Potential Impacts of Indian Point Relicensing with Delayed Site Reclamation (Ex. NYS000227) (2009 Sheppard Report) at 1.
34 Dr. Sheppard wrote, In my initial report submitted on November 29, 2007, I reviewed a variety of studies. In that analysis I assumed that if license renewal were approved, the additional wastes generated by license renewal would be gone from the site and the site would be fully restored no later than 30 years after the renewed license expired - i.e., by 2065. Id.
stated that if relicensed, Indian Point would not be decommissioned for 60 years, or until 2095.
Id. at 2.
7.146 In contrast, he posited that if not relicensed, Indian Point would be decommissioned by 2025. Id.
7.147 Dr. Sheppard prepared yet another report in January 2011, and in it, he put forward five different decommissioning scenarios: a No-Action scenario with decommissioning completed by 2047; a No-Action scenario with delayed decommissioning completed by 2077; license renewal with decommissioning completed by 2077; license renewal with delayed decommissioning completed by 2107; and license renewal with a 60 year delay in decommissioning completed by 2137. January 2011 Sheppard Report (Ex. NYS000230) at 3-4.
7.148 In all, Dr. Sheppard has posited seven different decommissioning completion dates: 2025, 2047, 2065, 2077, 2095, 2107, and 2137. See 2007 Sheppard Report (Ex.
NYS000226); 2009 Sheppard Report (Ex. NYS000227) at 1, 2; January 2011 Sheppard Report (Ex. NYS000230) at 3-6.
7.149 Staff witness John Boska, however, testified that if license renewal is denied, decommissioning at Indian Point must be completed by 2073 for IP2 and 2075 for IP3. Staff Testimony on NYS-17B (Ex. NRCR00081) at 21.
7.150 Mr. Boska further testified that if the licenses are renewed, then decommissioning must be completed by 2093 for IP2 and 2095 for IP3. Id.
7.151 Mr. Boska explained that the regulations in 10 CFR § 50.82 and 10 CFR
§§ 20.1401 through 20.1406 (10 CFR 20 Subpart E) require Entergy to remove radioactive material as part of decommissioning. Id. at 20. He testified that Entergy has decided to use the delayed decommissioning option, which the NRC refers to as SAFSTOR. Id.; see also Entergy Testimony on NYS-17B (Ex. ENT000132) at 95.
7.152 SAFSTOR, an option permitted by 10 CFR § 50.82, allows Entergy to delay decommissioning activities as long as decommissioning is completed within 60 years of the
permanent cessation of operations. Staff Testimony on NYS-17B (Ex. NRCR00081) at 20; Entergy Testimony on NYS-17B (Ex. ENT000132) at 95.
7.153 Mr. Boska explained that, factoring in the SAFSTOR option, if Entergy is issued a renewed license, decommissioning of IP2 must be completed by the end of 60 years following the cessation of operations in 2033, or by the end of 2093. Staff Testimony on NYS-17B (Ex.
NRCR00081) at 21. He stated that if Entergys license is not renewed, decommissioning of IP2 must be completed by the end of 60 years following the cessation of operations. Id.; Entergy Testimony on NYS-17B (Ex. ENT000132) at 95-96. Mr. Boska noted that this would normally mean that decommissioning would have to be completed by 2073. Staff Testimony on NYS-17B (Ex. NRCR00081) at 21. 35 7.154 Although IP3s license extends about 2 years past IP2s license, Mr. Boska stated that Entergys current plan is to decommission IP1, IP2, and IP3 within the required dates set for IP2. Id.
7.155 Mr. Boska explained that there is an independent spent fuel storage installation at Indian Point with about 19 dry storage casks loaded with spent fuel. Id. at 22. He stated that 5 of the casks contain spent fuel from IP1 and that the other 14 casks contain spent fuel from IP2. Id.
7.156 He stated that the spent fuel will be removed after the Department of Energy (DOE) takes possession of the spent fuel and that Entergy currently estimates that DOE will finish taking possession of all the spent fuel from Indian Point in 2047, but, he warned, there was substantial uncertainty regarding that date. Id. at 22-23.
35 However, he pointed out, under the timely renewal provisions of 10 CFR 2.109(b), if the license renewal proceedings have not been completed by the current expiration date of IP2s operating license, the Indian Point plant will be permitted to continue to operate until the license renewal application has been finally determined. Id. at 20-21. This would mean that the decommissioning completion date of 60 years following the cessation of operations would be adjusted based on the actual day that plant operation is terminated. Id.
7.157 Mr. Boska explained that NRC regulations in 10 CFR 20, Subpart E, only cover radiological decommissioning, or the removal of radioactive material; they do not cover or require the removal of all structures and buildings. Id. NRC regulations do not require that the plant site be converted to greenfield (unrestricted use) status; they only require that radioactive materials (excluding spent fuel) be removed from the site such that radiation exposure for a typical user of the site would not exceed 25 millirem per year, or some higher value if approved by the NRC. Id. at 20-21.
7.158 We find that the failure to identify the correct date for the completion of decommissioning, which information has been publicly available for three years, reflects poorly on the rigor of Dr. Sheppards analysis and calls into question the weight to be accorded it.
J. Summary of Findings 7.159 Having considered the testimony and other evidence presented by the parties, we find that the evidence supports a conclusion that the Final SEIS constitutes a reasonably thorough discussion of the significant impacts on off-site land use associated with the issuance of renewed licenses for Indian Point Nuclear Generating Units 2 and 3. We also find that the Final SEIS includes a reasonably thorough discussion of the impacts of the No-Action Alternative on off-site land use. We find that Entergys Environmental Report discussed the off-site land use impacts of license renewal, was consistent with the regulatory requirements in 10 C.F.R. § 51.53(c)(3)(ii)(I) and the GEIS, and was consistent with the relevant regulatory guidance. We accord substantial weight to the results of Dr. Tolleys study because it utilizes a hedonic analysis that is widely-accepted and respected and because Dr. Tolley was able to provide support for his assumptions. We accord little weight to Dr. Sheppards various studies and conclusions because they incorporate unsupported assumptions and utilized a resale and event-based analysis that suffers from numerous deficiencies, as outlined above.
III. CONCLUSIONS OF LAW 7.160 The Licensing Board has considered all of the evidence presented by the parties on Contentions NYS-17, NYS-17A, and NYS-17B. Based upon a review of the entire record in this proceeding and the proposed findings of fact and conclusions of law submitted by the parties, and based upon the findings of fact set forth above, which are supported by reliable, probative and substantial evidence in the record, the Board has decided all matters in controversy concerning this contention and reaches the following conclusions.
7.161 We conclude that Entergys Environmental Report met the regulatory requirements of 10 C.F.R. § 51.53(c)(3)(ii)(I) and was not legally deficient for failure to meet regulatory requirements.
7.162 We conclude that the Staffs Final SEIS contains a reasonably thorough discussion of the significant impacts on off-site land use associated with the issuance of renewed licenses for Indian Point Nuclear Generating Units 2 and 3 and that the FSEIS thus meets the requirements of the National Environmental Policy Act.
7.163 The Final SEIS was also consistent with the regulatory requirements in 10 C.F.R.
§ 51.95(c) and was, therefore, not legally deficient for failure to meet regulatory requirements.
7.164 The Staffs analysis was not rendered invalid because the Staff was unable to quantify the impact of license renewal on property values for real estate adjacent to the plant. .
Pacific Gas and Electric Company (Diablo Canyon Power Plant Independent Spent Fuel Storage Installation), CLI-08-26, 68 NRC 509, 521 (2008); see also Entergy Nuclear Generation Co. and Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), CLI-10-22, 72 NRC 202, 208 (2010). The Staff was entitled to rely on an existing study that addressed, inter alia, off-site land use impacts; the fact that that study was unable to quantify the net effect of potential increases in property values and property taxes and potential decreases in payments-in-lieu-of-taxes did not render that study invalid or render it unreliable.
7.165 Moreover, the Staff was not obligated to undertake or commission independent research on the issue whether license renewal will affect property values such as that proffered by Entergy and New York in this proceeding. Pilgrim, CLI-10-22, 72 NRC 202, 208 (2010).
7.166 This is especially so given the Commissions determinations in the GEIS. We acknowledge that the GEIS controls. Its determination that license renewal would have only small impacts on housing value and marketability provides a separate basis for rejecting Contention NYS-17B, particularly as the GEISs determination is supported by a case study of the impact on housing value and marketability at Indian Point. In addition, the GEIS identified the factors that generated off-site land use impacts: changes in population and changes in tax revenue. Absent new and significant information that contravenes the GEIS, no other factors will be entertained.
7.167 We note that New York did not assert that it had new and significant information that contravened the GEISs conclusions regarding the impact of license renewal on housing value and marketability and did not seek a waiver of the GEIS pursuant to 10 C.F.R. § 2.335(b).
7.168 After consideration of all relevant evidence in the record, the Board finds that, contrary to the claims in Contentions NYS-17, NYS-17A, and NYS-17B, the NRC Staff and the Applicant have met their burden of demonstrating that the Applicants analysis of off-site land use impacts in the Environmental Report and the Staffs analysis of off-site land use impacts in the Final SEIS are adequate under NEPA. We conclude, therefore, as a matter of law, that the Staff and the Applicant have complied with NEPA and the Commissions regulations in 10 C.F.R. Part 51 with respect to the matters raised in Contentions NYS-17, NYS-17A, and NYS-17B.
Respectfully submitted
/Signed Electronically by/
Beth N. Mizuno Counsel for NRC Staff U.S. Nuclear Regulatory Commission Mail Stop O-15 D21 Washington, DC 20555-0001 Telephone: (301) 415-3122 E-mail: Beth.Mizuno@NRC.gov Dated at Rockville, Maryland this 22nd day of March 2013
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
)
ENTERGY NUCLEAR OPERATIONS, INC. ) Docket Nos. 50-247-LR/ 50-286-LR
)
(Indian Point Nuclear Generating )
Units 2 and 3) )
CERTIFICATE OF SERVICE Pursuant to 10 C.F.R § 2.305 (as revised), I hereby certify that copies of the foregoing NRC STAFFS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW, PART 7:
NEW YORK STATE CONTENTIONS NYS-17, NYS-17A and NYS-17B (REAL ESTATE VALUES) dated March 22, 2013, have been served upon the Electronic Information Exchange (the NRCs E-Filing System), in the above- captioned proceeding, this 22nd day of March, 2013.
/Signed (electronically) by/
Beth N. Mizuno Counsel for NRC Staff U. S. Nuclear Regulatory Commission Office of the General Counsel Mail Stop - O-15D21 Washington, DC 20555 Telephone: (301) 415-3122 Email: Beth.Mizuno@nrc.gov