ML13081A742

Entergys Proposed Findings of Fact and Conclusions of Law for Contention NYS-8 (Electrical Transformers)

ML13081A742
Person / Time
Site:	Indian Point
Issue date:	03/22/2013
From:	Bessette P, Dennis W, Glew W, Sutton K, O'Neill M Entergy Nuclear Operations, Morgan, Morgan, Lewis & Bockius, LLP, Entergy Services
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 24269, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
Download: ML13081A742 (91)

Text

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of

)

Docket Nos. 50-247-LR and

)

50-286-LR ENTERGY NUCLEAR OPERATIONS, INC.

)

)

(Indian Point Nuclear Generating Units 2 and 3)

)

)

March 22, 2013 ENTERGYS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW FOR CONTENTION NYS-8 (ELECTRICAL TRANSFORMERS)

William B. Glew, Jr., Esq.

Kathryn M. Sutton, Esq.

William C. Dennis, Esq.

Paul M. Bessette, Esq.

ENTERGY NUCLEAR OPERATIONS, INC.

MORGAN, LEWIS & BOCKIUS LLP 440 Hamilton Avenue 1111 Pennsylvania Avenue, NW White Plains, NY 10601 Washington, DC 20004 Phone: (914) 272-3202 Phone: (202) 739-3000 Fax: (914) 272-3205 Fax:

(202) 739-3001 E-mail: wglew@entergy.com E-mail: ksutton@morganlewis.com E-mail: wdennis@entergy.com E-mail: pbessette@morganlewis.com Martin J. ONeill, Esq.

MORGAN, LEWIS & BOCKIUS LLP 1000 Louisiana Street Suite 4000 Houston, TX 77002 Phone: (713) 890-5710 Fax:

(713) 890-5001 E-mail: martin.oneill@morganlewis.com COUNSEL FOR ENTERGY NUCLEAR OPERATIONS, INC.

TABLE OF CONTENTS Page

- i -

I.

INTRODUCTION............................................................................................................. 1 II.

PROCEDURAL HISTORY OF CONTENTION NYS-8................................................. 2 A.

Application Submittal and Contention NYS-8...................................................... 2 B.

Entergys August 2009 Motion for Summary Disposition of NYS-8................... 8 C.

The Parties Pre-filed Submissions and Written Testimony................................ 10 D.

Other Prehearing Procedural Matters................................................................... 15 E.

The December 2012 Evidentiary Hearing........................................................... 20 III.

APPLICABLE LEGAL AND REGULATORY STANDARDS.................................... 21 A.

Scope of License Renewal Review Under 10 C.F.R. Part 54.............................. 21 B.

Relevant NRC Regulatory Requirements............................................................ 22 C.

Reasonable Assurance Standard.......................................................................... 24 D.

Commission Guidance Relevant to Electrical Transformers: The Statements of Consideration................................................................................ 25 E.

Relevant NRC Staff and Industry Guidance Documents..................................... 29 F.

Burden of Proof.................................................................................................... 32 IV.

FACTUAL FINDINGS AND LEGAL CONCLUSIONS............................................... 33 A.

Witnesses and Evidence Presented...................................................................... 33

1.

Entergys Expert Witnesses..................................................................... 33

2.

NRC Staffs Expert Witnesses................................................................. 37

3.

New Yorks Expert Witness.................................................................... 38 B.

Under 10 C.F.R. § 54.21 and Consistent With Commission Guidance Construing That Regulation, Transformers Are Excluded from AMR, Because They Do Not Perform Their Intended Function Without Moving Parts or Without a Change in Configuration or Properties................................ 40 C.

Exclusion of Transformers from AMR Is Supported by Technical Testimony and Evidence Regarding the Intended Function of Transformers........................................................................................................ 43 D.

A Transformers Key Properties Include Its Internal Magnetic Field and Terminal Voltages and Currents.......................................................................... 45 E.

Contrary to New Yorks Claim, Terminal Voltage and Current and Magnetic Field Are Not Properties of Electricity or Power Passing Through a Transformer........................................................................................ 48

TABLE OF CONTENTS (continued)

Page

- ii -

F.

A Transformers Internal Magnetic Field and Terminal Voltages and Currents Are Properties That Change as the Transformer Performs Its Intended Function................................................................................................ 50 G.

Changes in a Transformers Terminal Voltages and Currents Can Be Directly Monitored During Transformer Operation............................................ 51 H.

Transformers Are More Similar to the AMR-Excluded Component Examples Listed in 10 C.F.R. § 54.21(a)(1)(i) Than to AMR-Included Examples, and Are Therefore Properly Excluded From AMR............................ 53 I.

Transformer Operation and Performance Are Governed by 10 C.F.R. Part 50 Requirements and Subject to Ongoing NRC Regulatory Oversight............... 65 J.

Alleged Deficiencies in Entergys 10 C.F.R. Part 50 Transformer Monitoring and Maintenance Programs Do Not Mandate Implementation of a 10 C.F.R. Part 54 AMP................................................................................. 68 K.

New Yorks Criticisms of Entergys IPEC-Specific Transformer Monitoring and Maintenance Programs Lack Merit............................................ 73 V.

SUMMARY

OF FINDINGS OF FACT AND CONCLUSIONS OF LAW................... 84 VI.

ORDER............................................................................................................................ 86

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of

)

Docket Nos. 50-247-LR and

)

50-286-LR ENTERGY NUCLEAR OPERATIONS, INC.

)

)

(Indian Point Nuclear Generating Units 2 and 3)

)

)

March 22, 2013 ENTERGYS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW FOR CONTENTIONS NYS-8 (ELECTRICAL TRANSFORMERS)

Pursuant to 10 C.F.R. § 2.1209, and the Atomic Safety and Licensing Boards (Board)

February 28, 2013 Order,1 Entergy Nuclear Operations, Inc. (Entergy) submits its Proposed Findings of Fact and Conclusions of Law (Proposed Findings and Conclusions) on New York State (New York) Contention NYS-8 (NYS-8).

The Proposed Findings and Conclusions are based on the evidentiary record in this proceeding, and are submitted in the form of a proposed Partial Initial Decision by the Board.

The Proposed Findings and Conclusions are set out in numbered paragraphs, with corresponding citations to the record of this proceeding I.

INTRODUCTION

1.

This Partial Initial Decision presents the Boards Findings of Fact and Conclusions of Law on Contention NYS-8. As admitted, that contention alleges that the license renewal application (LRA) for the Indian Point Energy Center (IPEC) Unit 2 and Unit 3 (IP2 and IP3) operating license requires, and lacks, an aging management program (AMP) 1 Licensing Board Order (Granting Parties Joint Motion for Alteration of Filing Schedule) at 1 (Feb. 28, 2013)

(unpublished).

for safety-related electrical transformers that are required for compliance with 10 C.F.R.

§§ 50.48 and 50.63.2

2.

The Board finds that Entergy has carried its burden of proof to demonstrate that transformers are properly excluded from an aging management review (AMR) and, therefore, do not require an AMP under 10 C.F.R. Part 54. As described further below, New Yorks position is contrary to well established U.S. Nuclear Regulatory Commission (NRC or Commission) guidance and regulatory precedent, which have long classified transformers as active components that are excluded from AMR. Indeed, the NRC has never reached a different conclusion in approving renewed operating licenses for over seventy reactors to date. Recently, in Seabrook, the Commission reviewed some of the relevant guidance in overturning the admission of a materially identical contention specifically involving transformers.3 Although the procedural posture here differs from Seabrook in that the contention in this matter was admitted and testimony was received, the applicable legal and regulatory principles are the same, and the testimony in this matter confirmed that the longstanding NRC and regulatory guidance stands on sound technical bases. For these reasons and those described further below, the Board thus enters a ruling on the merits of the contention in favor of Entergy.

II.

PROCEDURAL HISTORY OF CONTENTION NYS-8 A.

Application Submittal and Contention NYS-8

3.

On April 23, 2007, Entergy applied to renew the IP2 and IP3 operating licenses for twenty years beyond their current expiration dates of September 28, 2013, and December 12, 2

Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 & 3), LBP-08-13, 68 NRC 43, 89, 218 (2008).

3 NextEra Energy Seabrook, LLC (Seabrook Station, Unit 1), CLI-12-05, 75 NRC __, slip op. at 24 (Mar. 8, 2012).

2015, respectively.4 As relevant here, the IPEC LRA describes the process by which Entergy conducted screening activities, pursuant to 10 C.F.R. § 54.4, to determine which in-scope electrical structures and components are subject to AMR as set forth in 10 C.F.R. § 54.21.5 It also reflects Entergys conclusion that, because transformers perform active intended functions, they are not subject to an AMR, and therefore do not require an AMP, as otherwise required by the NRCs Part 54 regulations.6 As the Commission explained in its official published Statement of Consideration (SOC) accompanying the Commissions 1995 revisions to Part 54, the existing regulatory process, existing licensee programs and activities, and the maintenance rule provide the basis for generically excluding structures and components that perform active functions from an [AMR].7 Consequently, a Part 54 AMR does not encompass all aging-related issues, but only aging-related degradation of passive structures and components that perform qualified intended functions.8 The fundamental reason for this approach and for this distinction is that passive components perform their intended functions in a manner that is less amenable to direct monitoring.9 The aging effects of active 4

Entergy Nuclear Operations, Inc., Indian Point Nuclear Generating Unit Nos. 2 and 3; Notice of Acceptance for Docketing of the Application and Notice of Opportunity for Hearing Regarding Renewal of Facility Operating License Nos. DPR-26 and DPR-64 for an Additional 20-Year Period, 72 Fed. Reg. 42,134 (Aug. 1, 2007) (Hearing Notice).

5 License Renewal Application, Indian Point Energy Center at 2.0-1 to 2.5-6 (Apr. 23, 2007) (LRA)

(ENT00015A).

6 Id.

7 Nuclear Power Plant License Renewal; Revisions, 60 Fed. Reg. 22,461, 22,476 (May 8, 1995) (1995 License Renewal SOC) (NYS000016) (emphasis added).

8 Id.

9 Official Transcript of Proceedings, Indian Point Generating Units 2 & 3 at 4222:23-4223:7 (Dec. 13, 2012)

(Craig) (Dec. 13, 2012 Tr.) ([T]hat distinction between active and passive as the Commission describes in the SOC is based on how directly the performance of the intended function can be monitored....).

components, by contrast, are expected to be addressed by the facilitys current licensing basis (CLB) and by the maintenance rule, just as during the forty year period of the initial license.10

4.

In accordance with Part 54 requirements and the relevant guidance documents, Entergy conducted screening to determine which in-scope electrical structures and components are subject to AMR.11 As part of this process, and to identify passive component types, Entergy compared a complete list of IP2 and IP3 electrical and instrumentation and control (I&C) component types to those listed in NEI 95-10, Appendix B, which is an NRC-endorsed document.12 That document provides the complete list of potential passive components, and indicates that transformers do not meet the 10 C.F.R. § 54.21(a)(1)(i) criterion for a passive component.13 Consistent with these principles and guidance, Entergy concluded that any potentially-covered transformers at IP2 and IP3 are not subject to AMR.14

5.

10.

On August 1, 2007, the NRC published in the Federal Register a Notice of Acceptance for Docketing of the Application and Notice of Opportunity for Hearing.15 The Hearing Notice stated that any person wishing to participate as a party must file a petition for leave to intervene within sixty days of the Notice (i.e., October 1, 2007),16 a deadline later extended until November 30, 2007.17 10 Testimony of Applicant Witnesses Roger Rucker, Steven Dobbs, John Craig, and Thomas McCaffrey Regarding Contention NYS-8 (Electrical Transformers) at 23-24 (A36) (Mar. 30, 2012) (Entergy Testimony) (ENTR00091).

11 Id. at 25 (A40).

12 Id.

13 Id.; NEI 95-10, Rev. 6, Industry Guideline for Implementing the Requirements of 10 CFR Part 54 - The License Renewal Rule at B-14 item 104 (June 2005) (NEI 95-10, Rev. 6) (ENT000098).

14 Entergy Testimony at 26 (A40) (ENTR00091).

15 Hearing Notice, 72 Fed. Reg. at 42,134.

16 Id.

17 Entergy Nuclear Operations, Inc., Indian Point Nuclear Generating Unit Nos. 2 and 3; Notice of Opportunity for Hearing Regarding Renewal of Facility Operating License Nos. DPR-26 and DPR-64 for an Additional 20-

6.

11.

New York submitted Contention NYS-8 in its November 30, 2007 Petition to Intervene.18 As proffered, NYS-8 alleged that the LRA violates 10 C.F.R. §§ 54.21(a) and 54.29 because it does not include an AMP for each electrical transformer whose proper function is important for plant safety.19 As support, New York originally relied on the declaration of Mr. Paul Blanch,20 who claimed that there are numerous transformers that perform a function described in 10 C.F.R. § 54.4(a)(1)-(3), and that [t]transformers function without moving parts or without a change in configuration or properties.21 Mr. Blanch and New York further claimed that a failure to properly manage transformer aging may compromise: (1) the integrity of the reactor coolant pressure boundary; (2) the capability to shut down the reactor and maintain it in a safe shutdown condition; or (3) the ability to prevent or mitigate the consequences of accidents.22

7.

Entergy and the NRC Staff filed Answers opposing the admission of NYS-8.23 Entergy and the NRC cited the list of AMR-excluded components in Section 54.21(a)(1)(i), and longstanding Staff guidance and regulatory practice, and explained that transformers do not Year Period: Extension of Time for Filing of Requests for Hearing or Petitions for Leave To Intervene in the License Renewal Proceeding, 72 Fed. Reg. 55,834 (Oct. 1, 2007).

18 See New York State Notice of Intention to Participate and Petition to Intervene (Nov. 30, 2007) (New York Petition), available at ADAMS Accession No. ML073400187.

19 Id. at 103.

20 See Declaration of Paul Blanch (Nov. 28, 2007) (Nov. 2007 Blanch Decl.), available at ADAMS Accession No. ML073400205. Although Mr. Blanch submitted declarations in support of New Yorks original contention and its opposition to Entergys 2009 motion for summary disposition of that contention, he did not sponsor any testimony on NYS-8 or participate in the evidentiary hearing.

21 Id. at 5; see also New York Petition at 103.

22 Nov. 2007 Blanch Decl. at 5-6; see also New York Petition at 103-04.

23 Answer of Entergy Nuclear Operations, Inc. Opposing New York State Notice of Intention to Participate and Petition to Intervene at 69-73 (Jan. 22, 2008) (Entergy Answer), available at ADAMS Accession No. ML080300149; 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) Westchester County at 44-46 (Jan. 22, 2008) (NRC Staff Answer), available at ADAMS Accession No. ML080230543.

require an AMR or AMP under Part 54.24 First, not all transformers would even potentially be subject to an AMPas Entergy stated, only certain IPEC transformers (i.e., those that are safety-related or necessary for compliance with 10 C.F.R. §§ 50.48 and 50.63) would perform functions that fall within the scope of 10 C.F.R. Part 54, as defined in Section 54.4.25 Second, even for those structures, systems, and components (SSCs) that perform potentially qualifying intended functions, the particular SSC will be excluded if it is properly determined to be active.26 As Entergy explained, NEI 95-10, Rev. 6, which is an NRC-endorsed guidance document, identifies transformers as active components that are excluded from AMR.27 Entergy also noted that IPEC transformers are managed under Entergys maintenance rule programs in accordance with 10 C.F.R. § 50.65.28 The Staff stated that NUREG-1800, Standard Review Plan for Review of License Renewal Applications for Nuclear Power Plants (NUREG-1800), an agency guidance document, concludes that transformers are excluded from an AMR under 10 C.F.R.

§ 54.21(a)(1)(i).29

8.

The Board admitted NYS-8 to the extent that it questions the need for an AMP for safety-related electrical transformers that are required for compliance with 10 C.F.R.

§§ 50.48 and 50.63.30 In that ruling, the Board noted that the omission of transformers from the 24 Entergy Answer at 70 (citing NEI 95-10, Rev. 6 (ENT000098)); NRC Staff Answer at 45 (citing NUREG-1800, Rev. 1, Standard Review Plan for Review of License Renewal Applications for Nuclear Power Plants at 21-23 (Sept. 2005) (NUREG-1800, Rev. 1) (NYS000195)).

25 Entergy Answer at 69.

26 Id. at 70.

27 Id.

28 Id.

29 Staff Answer at 45 (citing NUREG-1800, Rev. 1 (NYS000195)).

30 Indian Point, LBP-08-13, 68 NRC at 89. As the uncontroverted evidence adduced at the hearing subsequently established, there are, in fact, no safety related transformers at IP2 or IP3. Dec. 13, 2012 Tr. at 4451:17-4453:24 (McCaffrey). That is because at IP2 and IP3 (unlike many other nuclear power plants), the power that would need to be used for accident mitigation is already at the same level as loads used for other purposes i.e., the voltage does not need to be stepped up or down, the power does not need to be transformed, and no

list of excluded components at 10 C.F.R. § 54.21(a)(1)(i) could not automatically be assumed to be the natural result of a necessarily incomplete list of examples.31 The Board further observed that the authority and guidance upon which Entergy and the Staff relied was not legally binding, and that the parties competing characterizations of the functioning of transformers constituted a genuine dispute of material fact.32 Given that 10 C.F.R. § 54.21(a)(1)(i) lists specific components that are subject to, and excluded from AMR, but does not specifically list transformers in either category, the Board solicited representations from the parties to help

[it] determine whether transformers are more similar to the included, or to the excluded, component examples.33 The Board also cited the need for the parties to explain how a transformer changes its configuration or properties in performing its functions.34

9.

The NRC Staff published its Safety Evaluation Report (SER) for the IPEC LRA in 2009.35 The SER documents the Staffs review of the scoping and screening methodology described by Entergy in LRA Section 2.36 The Staff concluded that Entergy had adequately identified those systems and components within the scope of license renewal, as required by 10 C.F.R. 54.4(a), and those subject to an AMR, as required by 10 C.F.R. 54.21(a)(1).37 Thus, transformers are involved. Read literally, then, there are no transformers at all that fall within the scope of NYS-8 as admitted, and that is an alternative and sufficient ground for a ruling in Entergys favor. The evidence did confirm that there are seven transformers at IP2 required to perform station blackout functions under 10 C.F.R. § 50.63, and none for alternative safe shutdown under 10 C.F.R. § 50.48. At IP3, there are two transformers associated with 10 C.F.R. § 50.48, and seven for alternative safe shutdown under 10 C.F.R.

§ 50.63. Dec. 13, 2012 Tr. at 4455:2-16 (McCaffrey).

31 Indian Point, LBP-08-13, 68 NRC at 88.

32 Id. at 89.

33 Id.

34 Id.

35 NUREG-1930, Vol. 1, Safety Evaluation Report Related to the License Renewal of Indian Point Nuclear Generating Unit Nos. 2 and 3, Docket Nos. 50-247 and 50-286, Entergy Nuclear Operations, Inc. (Nov. 2009)

(NYS00326A-F).

36 See id. at 2-1 (NYS00326A); see generally id. at 2-1 to -232 (NYS00326A-B).

37 Id. at 2-231 to -232 (NYS00326B).

the Staff approved Entergys determination that transformers are not subject to AMR. The Staff did not revisit or alter this conclusion in its August 2011 SER Supplement.38 B.

Entergys August 2009 Motion for Summary Disposition of NYS-8

10.

In August 2009, Entergy filed a motion for summary disposition of NYS-8, supported by three expert declarations.39 Entergy explained that 10 C.F.R. § 54.21(a)(1)(i) excludes from AMR those structures and components that perform their intended functions through a chance in configuration or properties, and that the Commission had made clear in its 1995 SOC that a change in configuration or properties should be interpreted to include a change in state.40 Entergy explained that, as a technical matter, all transformers perform their intended functions through a change in state, namely, changes in their voltage and current properties.

Transformers are thus properly excluded from the AMR requirements in Part 54.41 Entergy further explained that, like all other AMR-excluded electrical components, a transformers ability to perform its intended function is directly indicated by one or more measurable properties.42 Finally, Entergy noted that the exclusion of transformers from AMR under Part 54 is a settled and longstanding NRC Staff and Commission position, and consistent with the 38 See NUREG-1930, Supp. 1, Safety Evaluation Report Related to the License Renewal of Indian Point Nuclear Generating Unit Nos. 2 and 3 (Aug. 2011) (NYS000160).

39 Applicants Motion for Summary Disposition of New York States Contention 8 (Electrical Transformers)

(Aug. 14, 2009) (Entergy Summary Disposition Motion), available at ADAMS Accession No. ML092330784; Declaration of Steven E. Dobbs in Support of Entergys Motion for Summary Disposition of New York State Contention 8 (Aug. 12, 2009), available at ADAMS Accession No. ML092330784; Declaration of Roger B. Rucker in Support of Entergys Motion for Summary Disposition of New York State Contention 8 (Aug. 12, 2009), available at ADAMS Accession No. ML092330784; Declaration of John W.

Craig in Support of Entergys Motion for Summary Disposition of New York State Contention 8 (Aug. 12, 2009), available at ADAMS Accession No. ML092330784.

40 Entergy Summary Disposition Motion at 2 (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,476 (NYS000016)).

41 Id.

42 Id. at 22.

regulatory intent of the license renewal rule.43 Entergy cited the specific Staff guidance to the effect that [t]ransformers perform their intended function through a change in state similar to switchgear, power supplies, battery chargers, and power inverters, which have been excluded in

§ 54.21(a)(1)(i) from an [AMR]. Any degradation of the transformers ability to perform its intended function is readily monitorable by a change in the electrical performance of the transformer and the associated circuits.44

11.

The NRC Staff fully supported Entergys motion.45 New York opposed Entergys motion, again relying on a declaration by its former consultant, Mr. Blanch.46 New York continued to assert that transformers perform passive intended functions, and that current NRC-mandated monitoring programs (in lieu of AMPs) cannot effectively address the effects of aging-related degradation.47

12.

The Board denied Entergys summary disposition motion, finding that there remained a genuine issue of material fact; i.e., whether transformers perform their intended function without a change in their configuration or properties.48 Citing differences in the competing expert opinions proffered by the parties, the Board stated that it was presented with a 43 Id. at 24.

44 Id. (quoting Letter from Christopher I. Grimes, Director, Office of Nuclear Reactor Regulation, to Douglas J.

Walters, Nuclear Energy Institute (NEI), Determination of Aging Management Review for Electrical Components, Attach. at 1-4 (Sept. 19, 1997) (Grimes Letter) (ENT000097)).

45 NRC Staffs Answer to Applicants Motion for Summary Disposition of New York Contention 8 (Sept. 14, 2009), available at ADAMS Accession No. ML092580042 (concluding that Entergys statement of material facts is correct and agreeing that no genuine issue of material fact remains concerning contention NYS-8).

46 See Response of the State of New York to Entergys Summary Disposition Motion and NRC Staffs Supporting Answer (New York Response to Entergy Summary Disposition Motion) (Sept. 23, 2009); Decl.

of Paul Blanch (Sept. 22, 2009); The State of New Yorks Counter-Statement of Material Facts (Sept. 23, 2009), available at ADAMS Accession No. ML092930142.

47 New York Response to Entergy Summary Disposition Motion at 10.

48 Licensing Board Memorandum and Order (Ruling on Motions for Summary Disposition) at 6 (Nov. 3, 2009)

(unpublished).

battle of the experts and could not weigh the evidence at the summary disposition stage.49 Therefore, we denied Entergys Motion without evaluating the relative strength of either partys argument.

C.

The Parties Pre-filed Submissions and Written Testimony

13.

On December 12, 2011, pursuant to the Boards Order Granting Unopposed Motion by the State of New York and Riverkeeper, Inc. (Riverkeeper) to Amend the Scheduling Order,50 New York filed its initial Statement of Position, the prefiled testimony and report of Dr. Robert Degeneff (who replaced Mr. Blanch as New Yorks consultant), and exhibits related to NYS-8.51 In sum, New York argued that generalnon-nuclear and non-NRCindustry technical sources describe transformers as static, which New York equated with a passive characterization for NRC license renewal purposes.52 New York also argued that transformers were more similar to SSCs for which AMR is required than to SSCs for which it is not,53 and argued that age-related degradation in transformers is not readily monitored.54 New York cited the 1995 License Renewal SOC and contended that that document actually 49 Id. at 7.

50 Licensing Board Order (Granting Unopposed Motion by the State of New York and Riverkeeper, Inc. to Amend the Scheduling Order) at 1 (Nov. 17, 2011) (unpublished).

51 See State of New York Initial Statement of Position Contention NYS-8 (Dec. 12, 2011) (New York Position Statement) (NYS000002); Pre-Filed Written Testimony of Dr. Robert C. Degeneff Regarding Contention NYS-8 (Dec. 9, 2011) (New York Direct Testimony) (NYS000003); Report of Dr. Robert C. Degeneff in Support of Contention NYS-8, at 23 (Dec. 12, 2011) (Degeneff Report) (NYS000005); see also Exhs.

NYS000006 through NYS000044.

52 Degeneff Report at 6 (NYS000005); New York Direct Testimony at 6:8-11 (NYS000003); New York Position Statement at 9 (NYS000002).

53 New York Position Statement at 9-13 (NYS000002); New York Direct Testimony at 16:22-17:12 (NYS000003); Degeneff Report at 8-13 (NYS000005).

54 New York Position Statement at 16-21 (NYS000002); New York Direct Testimony at 29:5-14 (NYS000003);

Degeneff Report at 14-17 (NYS000005).

supported New Yorks arguments.55 Finally, New York also attempted to invoke certain examples of unanticipated industry transformer failures in support of its position.56

14.

Entergy filed its Statement of Position, written testimony, and supporting exhibits for contention NYS-8 on March 29, 2012.57 Entergy submitted written testimony prepared by a panel of four witnesses: Mr. Roger Rucker, Dr. Steven Dobbs, Mr. John Craig, and Mr. Thomas McCaffrey. Entergy, again, pointed to longstanding NRC guidance, including the 1995 License Renewal SOC that clarified the focus of license renewal AMP on managing the effect of aging on functionality.58 Entergy also pointed to longstanding and oft-applied Staff guidance from 1997 that specifically considered whether electrical transformers were subject to AMR, and concluded, definitively, that they were not.59 In addition, however, Entergy also provided detailed technical testimony explaining how transformers function by changing their state, how that change is readily monitored, and how transformers are like excluded active components listed in 10 C.F.R. § 54.21(a)(1)(i), and unlike excluded passive components under that section.60 Entergy also explained the maintenance rule and its application to transformers at IP2 and IP3,61 and, finally, explained how transformer failures in the industry cited by New York were irrelevant, for reasons that included the fact that such transformers were not analogous to 55 New York Position Statement at 7 (NYS000002); New York Testimony at 13:14-14:11 (NYS000003).

56 New York Position Statement at 16-18 (NYS000002); New York Direct Testimony at 38:5-18 (NYS000003);

Degeneff Report at 18-22 (NYS000005).

57 See Applicants Statement of Position Regarding Contention NYS-8 (Electrical Transformers) (Mar. 28, 2012)

(Entergy Position Statement) (ENT000090); Testimony of Applicant Witnesses Roger Rucker, Steven Dobbs, John Craig, and Thomas McCaffrey Regarding Contention NYS-8 (Electrical Transformers) (Mar. 29, 2012) (ENT000091); see also Exhs. ENT00015A-B and ENT000092 through ENT000130A-B. Entergy filed a revised version of its prefiled testimony on March 30, 2012 to correct an administrative error in the document. Entergy Testimony (ENTR00091).

58 Entergy Testimony at 23 (A35) (ENTR00091) (quoting 1995 License Renewal SOC, 60 Fed. Reg. at 22,475-76).

59 Id. at 13-14 (A24) (citing Grimes Letter (ENT00000097)).

60 Id. at 26-49 (A42-64).

61 Id. at 86-90 (A96-98).

transformers that might potentially be subject to license renewal, and that several of the cited failures were not age-related.62

15.

The NRC Staff also filed its Statement of Position, written testimony, and supporting exhibits for contention NYS-8 on March 29, 2012.63 The NRC Staff filed testimony prepared by a panel of two witnesses: Mr. Roy Mathew and Ms. Sheila Ray. NRC Staffs position was that NYS-8 was incorrect and unsustainable, for reasons that included the fact that transformers are active components whose function is readily monitorable, and that degradation in transformers is also readily monitorable.64 Accordingly, Staff concluded that transformers were not subject to AMR and were not required to be addressed by an AMP.65

16.

On June 29, 2012, New York filed a Revised Statement of Position, written rebuttal testimony, and several new exhibits.66 Again, New York relied only on its new consultant, Dr. Degeneff, but revised its arguments by including three additional examples of purported transformer failuresa June 27, 2011 event at the Prairie Island Nuclear Generating Plant, a January 30, 2012 event at the Byron Station, and a February 28, 2012 event also at Byron.67 On August 6, 2012, as a result of consultations among the parties regarding a potential Entergy motion in limine to strike the new proposed exhibits and related testimony, New York filed revised versions of its June 29, 2012 Position Statement and rebuttal testimony that 62 Id. at 105-06 (A115).

63 NRC Staffs Initial Statement of Position on Contention NYS-8 (Transformers) (Mar. 29, 2012) (NRC Position Statement) (NRC000030); NRC Staffs Testimony of Roy Mathew and Sheila Ray Concerning Contention NYS-8 (Transformers) (Mar. 29, 2012) (NRC Staff Testimony) (NRC000031); see also Exhs.

NRC000034 through NRC000038.

64 NRC Staff Position Statement at 1 (NRC000030).

65 Id. at 15-16.

66 State of New York Revised Statement of Position Contention NYS-8 (June 29, 2012) (NYS000413); Rebuttal Testimony of Dr. Robert C. Degeneff, D. Eng. Regarding Contention NYS-8 (June 28, 2012) (NYS000414);

see also New York Exhs. NYS000415 and NYS000416.

67 Rebuttal Testimony of Dr. Robert C. Degeneff, D. Eng. Regarding Contention NYS-8, at 43:21-45:23 (June 28, 2012) (NYS000414).

excluded statements by Dr. Degeneff and two exhibits (proposed exhibits NYS000417 and NYS000418)68 relating to the three additional examples of purported transformer failures.

New York and Dr. Degeneff agreed to withdraw the testimony and exhibits in question after Entergy explained that none of the cited events involved actual transformer failures.69

17.

Notably, in their prefiled position statements, the parties discussed the Commissions decision in Seabrook.70 In CLI-12-05, the Commission reversed another licensing boards admission of a contention that Entergy has described as essentially identical to NYS-8, albeit after this Board admitted NYS-8 and after New York filed its direct testimony on that contention.71 As Entergy explains, the Seabrook ruling is nevertheless instructive in two significant respects.

18.

First, CLI-12-05 underscores the importance of the 1995 License Renewal SOC in construing and applying 10 C.F.R. § 54.21, and in understanding the distinction between passive and active functions, as specifically intended by the Commission.72 The Commission emphasized that it had devoted significant discussion in the SOC to defining a passive component as one that performs an intended function without moving parts or without a change 68 State of New York Revised Statement of Position Contention NYS-8 (Revised: Aug. 6, 2012) (New York Revised Position Statement) (NYSR00413); Rebuttal Testimony of Dr. Robert C. Degeneff, D. Eng.

Regarding Contention NYS-8 (Revised: Aug. 6, 2012) (NYSR00414) (New York Rebuttal Testimony).

69 See Letter from Janice A. Dean, Counsel for New York, to Administrative Judges (Aug. 6, 2012), available at ADAMS Accession No. ML12219A140.

70 Entergy Position Statement at 16-18 (ENT000090); NRC Staff Position Statement at 3-4 (NRC000030); New York Revised Position Statement at 3 (NYSR00413).

71 Entergy Position Statement at 16 (ENT000090). The Seabrook petitioners relied on an October 18, 2010 declaration that was prepared by New Yorks former consultant in this matter, Mr. Blanch. NextEra Energy Seabrook, LLC (Seabrook Station, Unit 1), LBP-11-2, 73 NRC 28, 58 (2011), revd in part, affd in part, CLI-12-05, slip op. Insofar as it relates to transformers, that declaration appears to be materially indistinguishable from the declaration relied upon by New York to support the admission of NYS-8. See Seabrook, CLI-12-05, slip op. at 18-27; compare 2007 Blanch Decl. at ¶ 21-24, with Declaration of Paul Blanch at ¶ 28-31 (Oct. 18, 2010). The Commission described Mr. Blanchs Seabrook declaration as containing conclusory statements.

Seabrook, CLI-12-05, slip op. at 24. The Seabrook Board also cited our decision to admit NYS-8. See Seabrook, LBP-11-2, 73 NRC at 58.

72 Seabrook, CLI-12-05, slip op. at 19-20.

in configuration or properties and for which aging degradation is not readily monitored.73 NRCs license renewal review focuses on so-called passive structures and components because structures and components performing passive functions generally do not have performance or condition characteristics that are as readily observable as those performing active functions.

Put another way, structures and components with active functions generally can be directly verified. As such, the existing regulatory process, existing licensee programs and activities, and the maintenance rule provide the basis for generically excluding from an AMR those structures and components that perform active functions. As reflected in the SOC for the 1995 License Renewal Rule, [f]unctional degradation resulting from the effects of aging on active functions is more readily determinable, and existing programs and requirements are expected to directly detect the effects of aging.74

19.

Second, the Commission acknowledged that [l]ongstanding Staff guidance directly addresses the classification of electrical transformers for the purposes of license renewal, and has found them to be active components.75 That longstanding guidance is the 1997 Grimes Letter, the resulting amended NEI 95-10, and Table 2.1-5 of NUREG 1800. As the Commission further noted, the Staff recommended in 1997 that NEI revise its guidance to indicate that transformers (among other components) do not require an AMR.76 NEIs current guidance reflects the Staffs position on transformers.77 We discuss the relevant Commission, Staff, and industry guidance further in Sections III.D and III.E below.

73 Id. at 20 (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,477).

74 Id. at 19-20 (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,472) (emphasis added).

75 Id. at 23-24.

76 Id. at 20-21.

77 See NEI 95-10, Rev. 6, at B-14 (ENT000098).

D.

Other Prehearing Procedural Matters

20.

On August 8, 2012, New York filed a Motion with respect to its seven Track 1 contentions,78 seeking to invoke its purported statutorily-granted cross-examination rights under Section 274(l) of the Atomic Energy Act (AEA), 42 U.S.C. § 2021(l).79 Specifically, New York claimed that as the host state to IPEC, Section 274(l) confers upon it expansive cross-examination rights that take precedence over the restrictive cross-examination rights allowed pursuant to 10 C.F.R. §§ 2.315(c) and 2.1204(b)(3).80 It argued that the 2004 modifications to the NRCs Administrative Procedure Act-compliant regulations, which it contended generally restrict the use of cross-examination by most parties, do not purport to address the rights preserved to the States in [Section 2021(l)].81 Thus, New York asserted, 10 C.F.R. §§ 2.315(c) and 2.1204(b)(3) do not apply to it as a host state and do not restrict its right to interrogate witnesses.82

21.

Both Entergy and the NRC Staff opposed New Yorks Motion, stating that it lacked a legal basis,83 arguing that New York mischaracterized as an absolute right what is actually a reasonable opportunity to cross-examine witnesses.84 78 Track 1 contentions consist of Riverkeeper TC-2 (Flow-Accelerated Corrosion), NYS-12C (SAMA Analysis -

Decontamination Costs), NYS-16B (SAMA Analysis - Population Estimate), NYS-17B (Land Values), NYS-37 (Energy Alternatives), Clearwater EC-3A (Environmental Justice), NYS-5 (Buried Piping), NYS-6/7 (Non-EQ Cables), and NYS-8 (Transformers). Prior to the October 2012 hearings, the parties settled another Track 1 contention, Riverkeeper EC-3/Clearwater EC-1 (Spent Fuel Pool Leaks to Groundwater). The Board approved that settlement agreement on October 17, 2012. Licensing Board Consent Order (Approving Settlement of Consolidated Contention Riverkeeper EC-3 and Clearwater EC-1) (Oct. 17, 2012) (unpublished).

79 State of New York Motion to Implement Statutorily-Granted Cross-Examination Rights Under Atomic Energy Act § 274(l) at 1 (Aug. 8, 2012), available at ADAMS Accession No. ML12221A483.

80 Id. at 14-15, 19.

81 Id. at 14.

82 Id. at 15.

83 Entergys Answer Opposing New York States Motion to Cross-Examine (Aug. 20, 2012) (Entergy Answer Opposing New York Motion), available at ADAMS Accession No. ML12233A371; NRC Staffs Answer to State of New Yorks Motion to Implement Statutorily-Granted Cross-Examination Rights under Atomic

22.

On August 29, 2012, in accordance with 10 C.F.R. § 2.1207(a)(3) and the Boards Scheduling Order, Entergy (and the other parties) submitted in camera proposed questions for the Board to consider asking to the other parties witnesses on Contention NYS-8.85

23.

In an Order issued on September 21, 2012, the Board granted, in part, New Yorks August 8, 2012 Motion for cross-examination of witnesses during the evidentiary hearings.86 The Board found that New Yorks opportunity to cross-examine witnesses is bound by the same 10 C.F.R. Part 2 regulations that govern all parties to this proceeding.87 As a result, the Board found it unnecessary to address whether and if so to what extent, in some theoretical sense, the right to cross-examination granted to host states by the AEA may be different from those provided to parties under 10 C.F.R. Part 2.88 Citing 10 C.F.R. § 2.1204(b)(1), the Board noted that in any oral hearing under Subpart L, a party may file a motion (accompanied by a cross-examination plan) seeking cross-examination by the parties on particular admitted contentions or issues.89 Pursuant to 10 C.F.R. § 2.1204(b)(3), the presiding officer may allow cross-examination by the parties only if the presiding officer determines that cross-examination by the parties is necessary to ensure the development of an adequate record for decision.90

24.

The Board concluded that New York had complied with 10 C.F.R. § 2.1204(b) by filing a Motion for cross-examination and proposed examination questions by the August 29, Entergy Act § 274(l) (Aug. 20, 2012) (Staff Answer Opposing New York Motion), available at ADAMS Accession No. ML12233A742.

84 Entergy Answer Opposing New York Motion at 3-4; Staff Answer Opposing New York Motion at 9.

85 10 C.F.R. § 2.1207(a)(3)(iii).

86 Licensing Board Order (Order Granting, in part, New Yorks Motion for Cross Examination) (Sept. 21, 2012)

(Sept. 21, 2012 Order) (unpublished); see also Licensing Board Errata (Regarding Order Granting, in part, New Yorks Motion for Cross Examination) (Sept. 25, 2012) (unpublished).

87 Sept. 21, 2012 Order at 5.

88 Id. at 5-6.

89 Id. at 6.

90 Id. (quoting 10 C.F.R. § 2.1204(b)(3)).

2012, deadline for those submittals.91 Citing the voluminous and technical nature of the parties evidentiary submissions, the Board has determined that granting New Yorks request for cross-examination was necessary to ensure development of an adequate record for this proceeding.92 It thus ruled that during the hearing, New York could examine witnesses following the Boards examination, as long as New Yorks questions were relevant, reasonable, and non-repetitive.93

25.

On September 24, 2012, the Board discussed its Order in a pre-hearing conference call in response to questions from the NRC Staff and Entergy.94 During that conference, Chairman McDade confirmed that New York would have the opportunity to examine witnesses on areas that the Board missed in its own witness examinations.95 He also stated that other parties would have a reasonable opportunity to interrogate witnesses on discrete issues through oral motions at the hearing if they made a sufficiently compelling request and avoided repetitive questions.96

26.

Later, on September 28, 2012, Entergy filed an emergency petition for interlocutory review of the Boards Order with the Commission.97 Entergy requested, and was 91 Id.

92 Id.

93 Id. at 6-7.

94 Official Transcript of Proceedings, Indian Point Nuclear Generating Units 1 & 2 [sic2 & 3] at 1238:1-23 (Sept. 24, 2012) (McDade).

95 Id. at 1238:1-6.

96 Id. at 1239:21-1240:10 (McDade).

97 Entergys Emergency Petition for Interlocutory Review of Board Order Granting Cross-Examination to New York State and Request for Expedited Briefing (Sept. 28, 2012), available at ADAMS Accession No. ML12272A363; Commission Order (Oct. 2, 2012) (unpublished).

granted, expedited briefing on its petition.98 New York opposed Entergys petition99 and the Staff supported it.100

27.

On October 12, 2012, the Commission issued an Order denying Entergys request for interlocutory review, noting that the Board has the responsibility in the first instance to oversee the development of an adequate case record.101 In so ruling, the Commission cited Chairman McDades assurances, made during the September 24, 2012 prehearing conference call, that the Board would prohibit open-ended, lengthy, repetitive, and immaterial cross-examination, and allow all parties a full and fair opportunity to request cross-examination.102 The Commission further stated its expectation that the Board would act on cross-examination requests fairly and evenhandedly, rigorously oversee any cross-examination it allows, and limit the cross-examination to supplemental and genuinely material inquiries, necessary to develop an adequate and fair record.103

28.

During the hearing on the first contention (Riverkeeper TC-2), the Board indicated that it would allow questioning of the witnesses by the petitioner (there, Riverkeeper),

Entergy, and the NRC Staff.104 Entergy objected to examination of witnesses by any party, and 98 See Commission Order (Oct. 2, 2012) (unpublished).

99 State of New York Combined Opposition to Entergys Requests for Emergency Stay and Interlocutory Review of the Board Order Granting Limited Cross Examination (Oct. 1, 2012), available at ADAMS Accession No. ML12275A327. Entergy replied in opposition to New Yorks answer. See Entergys Reply to New York States Opposition to Entergys Emergency Petition for Interlocutory Review (Oct. 8, 2012), available at ADAMS Accession No. ML12282A002.

100 NRC Staffs Answer to Entergys Emergency Petition for Interlocutory Review, and Application for Stay, of the Boards Order of September 21, 2012 (Oct. 5, 2012), available at ADAMS Accession No. ML12279A309.

101 Entergy Nuclear Generation Co. (Indian Point Nuclear Generating Units 2 and 3), CLI-12-18, 76 NRC __, slip op. at 6 (Oct. 12, 2012).

102 Id. at 3-4.

103 Id. at 7.

104 Official Transcript of Proceedings, Indian Point Nuclear Generating Units 2 & 3 at 1797:16-24 (Oct. 17, 2012)

(Judge McDade).

requested that the Board close the record.105 In support of its position, Entergy: (1) noted that Riverkeeper had not made, nor been required to make, the sort of showing contemplated by the Subpart L regulations, which was a circumstance that the Commission had found troubling; (2) argued that no sufficient constraints had been placed on examination by parties; (3) noted that the procedure, rather than constituting the rare occurrence contemplated by the Commission, was apparently being undertaken as the norm for these proceedings; and (4) argued that, with two full days of Board questioning, additional questioning by the parties was not truly necessary, as mandated by the Commission.106 In the alternative, Entergy requested reciprocal treatment; i.e., that it be afforded the same direct and cross-examination rights as the other parties.107

29.

The Board denied Entergys motion to preclude party examination of witnesses, stating any additional showing need not be articulated, and that the Board envisioned allowing Riverkeeper, then Entergy, and then the Staff brief opportunities to conduct limited interrogation of the witnesses.108 During hearing on the second contention (NYS-12C), Entergy reiterated its objection, which was again denied by the Board, and Entergy asked that the Board recognize Entergys standing objection on such grounds with respect to all remaining contentions.109 Upon that basis, Entergy rested upon its standing objection and did not repeat its procedural arguments in connection with NYS-8 or subsequent contentions.

105 Id. at 1794:11-1797:15 (Fagg).

106 Id. (Fagg).

107 Id. at 1797:8-14 (Fagg).

108 Id. at 1797:16-1798:9 (McDade).

109 Official Transcript of Proceedings, Indian Point Nuclear Generating Units 2 & 3 at 2315:17-2316:2 (Oct. 18, 2012) (Bessette).

E.

The December 2012 Evidentiary Hearing

30.

On December 10, 2012, the Board commenced the second round of the evidentiary hearing on the Track 1 contentions at the DoubleTree Hotel located at 455 South Broadway, Tarrytown, NY 10591,110 and admitted into evidence the exhibits proffered by the parties.111 We held the evidentiary hearing on Contention NYS-8 on December 13, 2012.112

31.

The hearing lasted a full day and concluded on December 13, 2012. The parties jointly submitted proposed corrections to the hearing transcripts on February 5, 2013.113 The Board issued an Order on February 28, 2013, adopting the parties proposed transcript corrections with some minor revisions.114

32.

On March 22, 2013, the parties submitted proposed findings of fact and conclusions of law in the form of a proposed Initial Decision by the Board.

110 On October 15-24, 2012, we held the first round of the evidentiary hearing on Track 1 contentions Riverkeeper TC-2 (Flow-Accelerated Corrosion), NYS-12C (SAMA Analysis - Decontamination Costs), NYS-16B (SAMA Analysis - Population Estimate), NYS-17B (Land Values), NYS-37 (Energy Alternatives), and Clearwater EC-3A (Environmental Justice). In December 2012, we held the second round of the evidentiary hearing on Track 1 Contentions NYS-5 (Buried Piping), NYS-6/7 (Non-EQ Cables), and NYS-8 (Transformers).

111 Official Transcript of Proceedings, Indian Point Nuclear Generating Units 2 & 3 at 3282:2-3287:21 (Dec. 10, 2012) (McDade).

112 Dec. 13, 2012 Tr. at 4218:24-4465:20 (McDade).

113 Letter from Counsel for Entergy Nuclear Operations, Inc., Counsel for Riverkeeper, Inc., Counsel for the State of New York, Counsel for the NRC Staff, and Counsel for Hudson [River] Sloop Clearwater, Inc., to Lawrence G. McDade, Chairman, Dr. Michael F. Kennedy, and Dr. Richard Wardwell, Atomic Safety and Licensing Board (Feb. 5, 2013), available at ADAMS Accession No. ML13036A437.

114 Licensing Board Order (Adopting Proposed Transcript Corrections and Resolving Contested Corrections)

(Feb. 28, 2013) (unpublished). In an earlier Order issued on December 27, 2012, the Board stated that it would issue an order closing the evidentiary record for Track 1 contentions at a later date. Licensing Board Order (Adopting Proposed Transcript Corrections with Minor Edits) (Dec. 27, 2012) (unpublished).

III.

APPLICABLE LEGAL AND REGULATORY STANDARDS A.

Scope of License Renewal Review Under 10 C.F.R. Part 54

33.

In the context of license renewal, the Commission has specifically limited its safety review of LRAs to the matters specified in 10 C.F.R. §§ 54.21 and 54.29(a)(2), which focus on the aging management of certain SSCs.115 The Commissions license renewal regulations deliberately reflect the distinction between 10 C.F.R. Part 54 aging management issues on the one hand, and the ongoing 10 C.F.R. Part 50 regulatory process (e.g., security and emergency planning issues) on the other.116 The NRCs longstanding regulatory framework is premised upon the notion that, with the exception of aging management issues, the NRCs ongoing regulatory process is adequate to ensure that the CLB of an operating plant provides and maintains an acceptable level of safety.117

34.

Consequently, the matters before the Board in this proceeding are limited to whether IP2 and IP3 can be safely operated in the period of extended operation, that is, beyond the current expiration of the licenses in 2013 and 2015, respectively.118 Issues regarding the adequacy of the design, construction, and operation of the facility are, therefore, outside the scope of matters appropriately considered here.119 115 See Fla. Power & Light Co. (Turkey Point Nuclear Generating Plant, Units 3 & 4), CLI-01-17, 54 NRC 3, 7-8 (2001); Duke Energy Corp. (McGuire Nuclear Station, Units 1 & 2), CLI-02-26, 56 NRC 358, 363 (2002).

116 Turkey Point, CLI-01-17, 54 NRC at 7.

117 See Final Rule, Nuclear Power Plant License Renewal; Revisions, 56 Fed. Reg. 64,943, 64,946 (Dec. 13, 1991)

(1991 License Renewal Revisions).

118 Turkey Point, CLI-01-17, 54 NRC at 8.

119 In that regard, when the Commission issues an initial license, it makes a comprehensive determination that the design, construction, and proposed operation of the facility satisfied the Commissions requirements and provided reasonable assurance of adequate protection to the public health and safety and common defense and security. 1991 License Renewal Revisions, 56 Fed. Reg. at 64,947.

B.

Relevant NRC Regulatory Requirements

35.

10 C.F.R. § 54.4(a)(1)-(3) outline the three general categories of SSCs within the scope of license renewal. The first category consists of safety-related SSCs.120 These are SSCs relied upon to remain functional during and following design-basis events to ensure the integrity of the reactor coolant pressure boundary, the capability to shut down the reactor and maintain it in a safe shutdown condition, or the capability to prevent or mitigate the consequences of accidents which could result in potential offsite exposures comparable to those referred to in 10 C.F.R. §§ 50.34(a)(1), 50.67(b)(2), or 100.11.121

36.

The second category of SSCs within the scope of license renewal consists of all non-safety-related SSCs whose failure could prevent satisfactory accomplishment of any of the safety functions identified above.122 For example, SSCs in this category would include non-safety auxiliary systems whose failure could impact the function of safety-related systems.123

37.

The third category consists of all SSCs relied on in safety analyses or plant evaluations to perform a function that demonstrates compliance with the NRCs regulations for fire protection (10 C.F.R. § 50.48), environmental qualification (10 C.F.R. § 50.49), pressurized thermal shock (10 C.F.R. § 50.61), anticipated transients without scram (10 C.F.R. § 50.62), and station blackout (10 C.F.R. § 50.63).124 These SSCs would include, for example, equipment necessary to meet these regulations, as defined in a plants final safety analysis report, such as a plants fire protection systems.125 120 10 C.F.R. § 54.4(a)(1).

121 See 10 C.F.R. § 50.2 (defining safety-related); Entergy Testimony at 15 (A26) (ENTR00091).

122 10 C.F.R. § 54.4(a)(2).

123 Entergy Testimony at 15 (A26) (ENTR00091).

124 10 C.F.R. § 54.4(a)(3).

125 Entergy Testimony at 15 (A26) (ENTR00091).

38.

From among these three categories of in-scope SSCs, applicants must identify and list, in an integrated plant assessment (IPA), those structures and components subject to AMR.126 If a structure or component performs no license renewal intended function as defined in 10 C.F.R. § 54.4(a)(1)-(3), then it is not subject to AMR.127 Section 54.21(a)(1)(i), in turn, further limits the structures and components subject to AMR to those structures and components that perform an intended function [as defined in § 54.4(a)(1)-(3)]... without moving parts or without a change in configuration or properties and that are not subject to replacement based on a qualified life or specified time period.128

39.

Given the foregoing requirements, LRA preparation involves the following sequential, two-step process: (1) identification of the SSCs within the scope of the license renewal rule (as defined in 10 C.F.R. § 54.4) (also known as scoping) and then, among those in-scope SSCs, (2) identification of the structures and components that are subject to AMR (also known as screening).129 Screening is part of an applicants IPA as defined in 10 C.F.R.

§ 54.21(a) and is performed to determine which structures and components in the scope of license renewal require an AMR.130 As discussed further below, 10 C.F.R. § 54.21(a)(1)(i) also provides, as examples, non-exhaustive lists of structures and components that do and do not require AMR under that regulation (referred to herein as the AMR-included and AMR-excluded lists).131 126 10 C.F.R. § 54.21(a).

127 10 C.F.R. § 54.4(b); Entergy Testimony at 16 (A27) (ENTR00091); see Seabrook, CLI-12-05, slip op. at 2-3 (stating that [l]icense renewal applicants must conduct [AMRs] for any SSC which performs the functions listed in 10 C.F.R. § 54.4(a)(1)-(3)).

128 10 C.F.R. § 54.21(a)(1)(i)-(ii); Entergy Testimony at 16 (A27) (ENTR00091).

129 Entergy Testimony at 16 (A27) (ENTR00091).

130 Id.

131 10 C.F.R. § 54.21(a)(1)(i); see also Entergy Testimony at 16-17 tbl. 1 (A28) (ENTR00091).

C.

Reasonable Assurance Standard

40.

For safety issues, pursuant to 10 C.F.R. § 54.29(a), the NRC will issue a renewed license if it finds that actions have been identified and have been or will be taken by the applicant, such that there is reasonable assurance that the activities authorized by the renewed license will continue to be conducted in accordance with the CLB.132

41.

Longstanding Commission and judicial precedent makes clear that the reasonable assurance standard does not require an applicant to meet an absolute or beyond a reasonable doubt standard.133 Rather, the Commission evaluates an application on a case-by-case approach, applying sound technical judgment and verifying the applicants compliance with Commission regulations.134 A touchstone for determining whether the reasonable assurance standard is satisfied is compliance with Commission regulations.135

42.

The NRC Staff verifies compliance with the NRCs license renewal regulations through its comprehensive LRA review process, which includes, among other things, review of the LRA and updated final safety analysis report (UFSAR) supplement, the issuance of requests for additional information, the conduct of onsite audits and inspections, and the preparation of a detailed SER.136 To determine whether an LRA complies with Commission 132 Entergy Testimony at 18 (A29) (ENTR00091); NRC Staff Testimony at 10 (A14) (NRC000030); New York Direct Testimony at 3:17-21 (NYSR00003).

133 AmerGen Energy Co. LLC (License Renewal for Oyster Creek Generating Station), CLI-09-7, 69 NRC 235, 263-64 (2009), affd sub nom. N.J. Envtl. Fedn v. NRC, 645 F.3d 220 (3d Cir. 2011); Commonwealth Edison Co. (Zion Station, Units 1 & 2), ALAB-616, 12 NRC 419, 421 (1980); N. Anna Envtl. Coal. v. NRC, 533 F.2d 655, 667-68 (D.C. Cir. 1976) (rejecting the argument that reasonable assurance requires proof beyond a reasonable doubt and noting that the licensing board equated reasonable assurance with a clear preponderance of the evidence).

134 See Oyster Creek, CLI-09-7, 69 NRC at 263; Entergy Nuclear Generation Co. (Pilgrim Nuclear Power Station), CLI-10-14, 71 NRC 449, 465-66 (2010).

135 See Me. Yankee Atomic Power Co. (Me. Yankee Atomic Power Station), ALAB-161, 6 AEC 1003, 1009 (1973).

136 See Official Transcript of Proceedings, Indian Point Nuclear Generating Units 2 & 3 at 1418:8-18 (Oct. 15, 2012) (Hiser).

regulations, the NRC Staff reviews an LRA against the requirements set forth in 10 C.F.R. Part 54, as well as Staff guidance contained in NUREG-1800.137 D.

Commission Guidance Relevant to Electrical Transformers: The Statements of Consideration

43.

The Commission publishes SOCs for major rules and amendments.138 Language in the SOC addressing a regulation, having been endorsed by the Commission itself, is entitled to special weight.139

44.

The 1995 License Renewal SOC makes clear that the objective of the license renewal rule is to supplement the regulatory process, if warranted, to provide sufficient assurance that adequate safety will be assured during the extended period of operation.140 Licensees are required by Part 50 to develop and implement programs that ensure that conditions adverse to quality, including degraded SSCs, are promptly identified and corrected.141 These licensee programs include self-inspection, maintenance, and technical specification surveillance programs that monitor performance and condition of plant SSCs.142

45.

The Commission concluded in the SOC that the existing regulatory process, existing licensee programs and activities, and the maintenance rule provide the basis for 137 NUREG-1800, Rev. 1 (NYS000195); Entergy Testimony at 18 (A30) (ENTR00091); Official Transcript of Proceedings, Indian Point Nuclear Generating Units 2 & 3 at 4358:13-14 (Oct. 12, 2012) (Mathew).

138 See Entergy Testimony at 21-22 (A33) (ENTR00091); Electric Power Research Institute (EPRI), EPRI 1013475, Rev. 1 to EPRI Report 1003057, Plant Support Engineering: License Renewal Electric Handbook at xxii; see also id. at 2-1, 5-9 to -10, 8-6, B-10 to -11, B-18 to -19 (Feb. 2007) (EPRI 1013475) (ENT000100);

NUREG-1800, Rev. 1 at 2.1-6 to 2.1-10 (NYS000195).

139 Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1), ALAB-900, 28 NRC 275, 290-91 (1988),

review declined, CLI-88-11, 28 NRC 603 (1988).

140 1995 License Renewal SOC, 60 Fed. Reg. at 22,464 (NYS000016). See Entergy Testimony at 96 (A107)

(ENTR00091).

141 1995 License Renewal SOC, 60 Fed. Reg. at 22,475 (NYS000016); Entergy Testimony at 23 (A35)

(ENTR00091).

142 1995 License Renewal SOC, 60 Fed. Reg. at 22,475 (NYS000016); Entergy Testimony at 23 (A35)

(ENTR00091).

generically excluding structures and components that perform active functions from an

[AMR].143 The maintenance rule, 10 C.F.R. § 50.65, requires that power reactor licensees monitor the performance or condition of certain SSCs against licensee-established goals to provide reasonable assurance that such SSCs are capable of fulfilling their intended functions.

Maintenance activities include activities associated with the planning, scheduling, post-maintenance testing, return-to-service for surveillance, and preventive and corrective maintenance.144 Section 50.65 requires licensees to establish goals and monitor equipment performance to identify trends, and to identify the causes of equipment performance degradation.145

46.

The Commission expects existing programs and requirements, including required maintenance programs, to directly detect the effects of aging on structures and components performing active required functions.146 Consequently, a Part 54 AMR does not encompass all aging-related issues, but only aging-related degradation of passive structures and components that perform intended functions.147 Structures and components are properly categorized as passive only if they perform their intended function without moving parts or without a change 143 1995 License Renewal SOC, 60 Fed. Reg. at 22,476 (NYS000016) (emphasis added); Entergy Testimony at 23-24 (A36) (ENTR00091).

144 10 C.F.R. § 50.65(a)(1); Entergy Testimony at 22 (A34) (ENTR00091); NRC Staff Testimony at 18-20 (A26)

(NRC000031).

145 10 C.F.R. § 50.65(a)(1); Entergy Testimony at 22 (A34) (ENTR00091); NRC Staff Testimony at 18-20 (A26)

(NRC000031).

146 Pilgrim, CLI-10-14, 71 NRC at 454 (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,472 (NYS000016))

(describing the scope of the NRCs 10 C.F.R. Part 54 license renewal safety review); Entergy Testimony at 24 (A37) (ENTR00091).

147 Pilgrim, CLI-10-14, 71 NRC at 454; Entergy Testimony at 24 (A37) (ENTR00091).

in configuration or properties and the effects of aging degradation for these components are not readily monitorable.148

47.

Importantly for present purposes, the Commission emphasized that traditional electrical engineering (i.e., non-license renewal) concepts or definitions of passive structures and components do not accurately describe the structures and components that should be subject to an AMR for license renewal.149 In the 1995 License Renewal SOC, the Commission explained that it had reviewed several industry concepts of passive structures and components, and determined that they do not accurately describe the structures and components that should be subject to an [AMR] for license renewal.150 It emphasized that its description of passive structures and components has been incorporated into 10 C.F.R. § 54.21(a) and should be used only in connection with the IPA review in the license renewal process.151

48.

As noted above, the Commission defined passive structures and components as those that perform their intended functions without moving parts or without a change in configuration or properties, and for which the aging degradation effects are not readily monitorable.152 The Commission provided the following additional explanation.

Performance and condition monitoring for systems, structures, and components typically involves functional verification, either directly 148 1995 License Renewal SOC 60 Fed. Reg. at 22,477 (NYS000016) (emphasis added); see also Pilgrim, CLI 14, 71 NRC at 454 (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,471-72, 22,476-77 (NYS000016))

(Detrimental effects of aging on passive functions of structures and components are less apparent than aging effects on active functions of structures and components.); Entergy Testimony at 10 (A23), 13-14 (A24)

(ENTR00091); NRC Staff Testimony at 8 (A12) (NRC000031).

149 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016); Entergy Testimony at 12 (A24)

(ENTR000091).

150 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016); Entergy Testimony at 12 (A24)

(ENTR000091).

151 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016) (emphasis added); Entergy Testimony at 12 (A24) (ENTR000091).

152 Entergy Testimony at 37-40 (A56) (quoting 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016)).

or indirectly. Direct verification is practical for active functions such as pump flow, valve stroke time, or relay actuation where the parameter of concern (required function), including any design margins, can be directly measured or observed. For passive functions, the relationship between the measurable parameters and the required function is less directly verified. Passive functions, such as pressure boundary and structural integrity are generally verified indirectly, by confirmation of physical dimensions or component physical condition (e.g., piping structural integrity can be predicted based on measured wall thickness and condition of structural supports, but its seismic resistance capability cannot be verified by inspection alone).153

49.

In defining active (AMR-excluded) and passive (AMR-included) components, the Commission explained that active functions include those functions where the parameter of concern (required function), including any design margins, can be directly measured or observed.154 For example, an electrical relay can change its configuration (through parts that move to open and close electrical contacts) and a battery experiences monitorable changes in its terminal voltages.155 Therefore, the performance or condition of these components is readily monitored and would not be captured by the description of AMR-included components in Section 54.21(a)(1)(i).156 For passive components, the relationship between the measurable parameters and the required function is less directly verified.157 For example, the integrity of piping can be predicted based on wall thickness measurements, but its seismic resistance capability cannot be verified by inspection alone.158 153 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (NYS000016) (emphasis added).

154 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (NYS000016); Entergy Testimony at 14 (A24)

(ENTR00091); NRC Staff Testimony at 8 (A11) (NRC000031).

155 Pilgrim, CLI-10-14, 71 NRC at 454 n.17 (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,472 (NYS000016)).

156 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016); Entergy Testimony at 24 (A37)

(ENTR00091); NRC Staff Testimony at 8-10 (A14) (NRC000031).

157 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (NYS000016); Entergy Testimony at 51 (A65)

(ENTR00091).

158 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (NYS000016).

50.

In summary, in the 1995 SOC, the Commission emphasized its reliance on licensee monitoring and maintenance programs and its associated shift in focus from managing aging mechanisms to managing the effects of aging on functionality.159 Structures and components are classified as active if changes in their properties can be directly measured or observed.160 Structures and components are classified as passive if aging-related changes in their properties are not readily monitor[ed].161 Only passive components require AMR under 10 C.F.R. Part 54.

E.

Relevant NRC Staff and Industry Guidance Documents

51.

Following implementation of the 1995 License Renewal Rule, NEI developed guidelines for use by applicants in developing LRAs that would comply with the rule.162 During the initial development of those guidelines, questions arose as to whether certain electrical components were, in fact, subject to an AMR under the rule.163 Transformers were among the components discussed.

52.

In a 1997 letter to NEI signed by the Director of the License Renewal Project Directorate, the NRC Staff provided additional guidance that addressed specifically whether transformers (among other electrical components) are subject to an AMR.164 In that guidance, the Staff observed that, although 10 C.F.R. § 54.21(a)(1)(i) expressly excludes various electrical and I&C components from an AMR, this exclusion is not limited to only those components.165 159 Id. at 22,476 (emphasis added).

160 Id. at 22,471.

161 Id. at 22,477.

162 NEI 95-10, Rev. 6 (ENT000098); Entergy Testimony at 18-19 (A30) (ENTR00091).

163 Entergy Testimony at 20 (ENTR00091); NEI 95-10, Rev. 6, at C-10 (ENT000098).

164 Grimes Letter, Attach. at 1-4 (ENT000097) see also Entergy Testimony at 20 (ENTR00091).

165 Grimes Letter, Attach. at 1 (ENT000097); Entergy Testimony at 20 (A32) (ENTR00091); NRC Staff Testimony at 10 (A14), 13-14 (A20) (NRC000031).

The NRC Staff further stated that it had considered AMR requirements for transformers (among other components), and concluded that transformers are not subject to an AMR.166

53.

Relying on the considerable discussion provided by the Commission in the 1995 License Renewal SOC, the Staff explained the technical basis for its conclusion as follows:

Transformers perform their intended function through a change in state by stepping down voltage from a higher to a lower value, stepping up voltage to a higher value, or providing isolation to a load.

Transformers perform their intended function through a change in state similar to switchgear, power supplies, battery chargers, and power inverters, which have been excluded in §54.21(a)(1)(i) from an

[AMR]. Any degradation of the transformers ability to perform its intended function is readily monitorable by a change in the electrical performance of the transformer and the associated circuits. Trending electrical parameters measured during transformer surveillance and maintenance such as Doble test results, and advanced monitoring methods such as infrared thermography, and electrical circuit characterization and diagnosis provide a direct indication of the performance of the transformer. Therefore, transformers are not subject to an AMR.167

54.

Based on this determination, the Staff recommended that NEI revise its guidance to indicate that transformers (among other components) do not require an AMR.168 Accordingly, since 1997, NRC Staff and industry guidance has reflected the Staffs position that transformers do not require an AMR as part of Part 54 license renewal.169

55.

As noted earlier, the NRC Staff reviews LRAs in accordance with the requirements in 10 C.F.R. Part 54 using Staff guidance contained in NUREG-1800. The NRC 166 Grimes Letter, Attach. at 1 (ENT000097); Entergy Testimony at 20 (A32) (ENTR00091).

167 1997 Grimes Letter at 1-2 (ENT000097) (emphasis added).

168 Id.; Entergy Testimony at 20 (A32) (ENTR00091); NRC Staff Testimony at 10 (A14), 13-14 (A20)

(NRC000031).

169 Entergy Testimony at 10 (A23), 19 (A30) (ENTR00091); see also NUREG-1800, Rev. 1 at 2.1-23 tbl 2.1-5 item 104 (NYS000195); NUREG-1800, Rev. 2, Standard Review Plan for Review of License Renewal Applications for Nuclear Power Plants, at 2.1-26 (Table 2.1-5, Item 104) (Dec. 2012) (NUREG-1800, Rev.

2) (NYS000161); NEI 95-10, Rev. 6, at B-14 (ENT000098); Dec. 13, 2012 Tr. at 4358:16-18 (Mathew) (So there is longstanding guidance provided by the NRC in this to say that transformer is an active device.).

Staff issued Revision 1 of NUREG-1800 in September 2005170 and Revision 2 in December 2012.171

56.

Table 2.1-5 of NUREG-1800 (Revisions 1 and 2) lists structures and components and indicates whether they meet the 10 C.F.R. § 54.21(a)(1)(i) criterion for AMR-included components (i.e., perform an intended function without moving parts or a change in configuration or properties). Table 2.1-5 of NUREG-1800 indicates that transformers do not meet the criterion and, as such, are excluded from AMR under Part 54.172

57.

The principal industry guidance document is NEI 95-10, Rev. 6. NEI 95-10, Rev. 6 is referenced in NUREG-1800173 and has been endorsed by the NRC Staff in Regulatory Guide 1.188.174 Appendix B to NEI 95-10, Rev. 6 lists structures and components and indicates whether they meet the 10 C.F.R. § 54.21(a)(1)(i) criterion for AMR-included components.175 Like Table 2.1-5 of NUREG-1800, Appendix B to NEI 95-10, Rev. 6 indicates that transformers do not meet that criterion.176

58.

Also relevant here, the Electric Power Research Institute (EPRI) has issued Report 1013475,177 which addresses all phases of the license renewal electrical review process.

EPRIs handbook is based on nuclear industry equipment aging experience and LRA review 170 NUREG-1800, Rev. 1 (NYS000195).

171 NUREG-1800, Rev. 2 (NYS000161).

172 NUREG-1800, Rev. 1 at 2.1-23 (Table 2.1-5, Item 104) (NYS000195); NUREG-1800, Rev. 2 at 2.1-26 tbl.

2.1-5 item 104 (NYS000161); Entergy Testimony at 19 (A31) (ENTR00091).

173 See, e.g., NUREG-1800, Rev. 1 at 2.1-11 (NYS000195); NUREG-1800, Rev. 2 at 2.1-11 (NYS000161).

174 Regulatory Guide 1.188, Rev. 1, Standard Format and Content for Applications to Renew Nuclear Power Plant Operating Nuclear Power Plant Operating Licenses at 4 (Sept. 2005) (ENT000099); Dec. 13, 2012 Tr. at 4362:10-12 (Ray).

175 NEI 95-10, Rev. 6, at App. B (ENT000098); Entergy Testimony at 19 (ENTR00091).

176 NEI 95-10, Rev. 6, at B-14 (ENT000098). Appendix B to NEI 95-10, Rev. 6 references the 1997 Grimes Letter (ENT000097), which is included in Appendix C of NEI 95-10. NEI 95-10, Rev. 6, at App. C (ENT000098).

177 EPRI 1013475 (ENT000100); Entergy Testimony at 19 (A30) (ENTR00091).

experience.178 EPRI 1013475 briefly describes the manner in which a transformer performs its intended function of inducing voltage in a separate electrical circuit. It states that because transformers perform their intended functions by changing their physical properties (i.e., their terminal characteristics or properties), transformers are not subject to AMR based on the criteria of 10 C.F.R. § 54.21(a)(1)(i).179

59.

In summary, all existing NRC Staff and industry guidance relevant to the issue raised in NYS-8 treats transformers as components that perform active intended functions and are excluded from an AMR under 10 C.F.R. Part 54. This longstanding NRC Staff position is further reflected in the fact that no prior recipients of renewed operating licenses have been required to develop Part 54 AMPs for electrical transformers.

F.

Burden of Proof

60.

At the hearing stage, an intervenor has the initial burden of going forward; i.e.,

it must provide sufficient evidence to support the claims made in the admitted contention.180 The mere admission of the contention does not satisfy that burden. Moreover, an intervenor cannot meet its burden by relying on unsupported allegations and speculation.181 Rather, it must 178 EPRI 1013475 at 1-1 (ENT000100); Entergy Testimony at 19 (A30) (ENTR00091).

179 EPRI 1013475 at B-9 (ENT000100); Entergy Testimony at 19 (A30) (ENTR00091).

180 Oyster Creek, CLI-09-7, 69 NRC at 269 (quoting Consumers Power Co. (Midland Plant, Units 1 & 2), ALAB-123, 6 AEC 331, 345 (1973)) (The ultimate burden of proof on the question of whether the permit or license should be issued is... upon the applicant. But where... one of the other parties contends that, for a specific reason... the permit or license should be denied, that party has the burden of going forward with evidence to buttress that contention. Once he has introduced sufficient evidence to establish a prima facie case, the burden then shifts to the applicant who, as part of his overall burden of proof, must provide a sufficient rebuttal to satisfy the Board that it should reject the contention as a basis for denial of the permit or license.) (emphasis in original); see also Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, 435 U.S. 519, 554 (1978)

(upholding this threshold test for intervenor participation in licensing proceedings); Phila. Elec. Co. (Limerick Generating Station, Units 1 & 2), ALAB-262, 1 NRC 163, 191 (1975) (holding that the intervenors had the burden of introducing evidence to demonstrate that the basis for their contention was more than theoretical).

181 See Oyster Creek, CLI-09-7, 69 NRC at 268-70; see also Phila. Elec. Co. (Limerick Generating station, Units 1 & 2), ALAB-857, 25 NRC 7, 13 (1987) (stating that an intervenor may not merely assert a need for more current information without having raised any questions concerning the accuracy of the applicants submitted facts).

introduce sufficient evidence during the hearing phase to establish a prima facie case.182 If it does so, then the burden shifts to the applicant to provide sufficient evidence to rebut the intervenors contention.183 From an evidentiary standpoint, the applicants position must be supported by a preponderance of the evidence.184

61.

In weighing the evidence relative to the parties respective burdens of proof, the Board is mindful that NYS-8 raises an issue that is not unique to the IPEC facility or LRA.

NYS-8, at its core, challenges the NRC Staffs long-established position that transformers do not require a Part 54 AMR. As Entergy noted, that position is reflected in the LRAs and NRC SERs for each of the seventy-one renewed operating licenses issued by the Commission to date.185 In this regard, New York bears an especially high burden in asking the Board to render a decision that would contravene approximately fifteen years of consistent NRC regulatory practice.

IV.

FACTUAL FINDINGS AND LEGAL CONCLUSIONS A.

Witnesses and Evidence Presented

1.

Entergys Expert Witnesses

62.

Entergy presented four witnesses who submitted direct testimony and testified at the evidentiary hearing regarding Contention NYS-8: (1) Mr. Rucker; (2) Mr. McCaffrey; (3) Dr. Dobbs, and (4) Mr. Craig.186 182 See Oyster Creek, CLI-9-07, 69 NRC at 268-70.

183 See, e.g., 10 C.F.R. § 2.325; La. Power & Light Co. (Waterford Steam Electric Station, Unit 3), ALAB-732, 17 NRC 1076, 1093 (1983) (citing Midland, ALAB-123, 6 AEC at 345).

184 See Pac. Gas & Elec. Co. (Diablo Canyon Nuclear Power Plant, Units 1 & 2), ALAB-763, 19 NRC 571, 577 (1984) (In order to prevail..., the applicants position must be supported by a preponderance of the evidence.). A preponderance of the evidence requires the trier of fact to believe that the existence of a fact is more probable than its nonexistence. Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal., 508 U.S. 602 (1993) (internal quotation marks omitted).

185 See Entergy Testimony at 86 (A96), 95 (A106) (ENTR00091).

186 See generally id.

63.

Mr. Rucker is an independent Engineering Consultant in Russellville, Arkansas who focuses on I&C applications in nuclear power plants, particularly as they relate to operating license renewal. He holds a Bachelor of Science degree in Electrical Engineering from the University of Arkansas. Mr. Rucker is a licensed Professional Engineer in the State of Arkansas with over twenty-two years of experience. He provides technical services to Entergys License Renewal Services Division at its Arkansas Nuclear One office. He is the License Renewal Electrical Lead for several Entergy nuclear power plant license renewals (including IPEC license renewal).187

64.

Mr. Rucker prepared several documents that support the LRA. Those documents include the electrical AMR report, as well as the electrical portions of the (1) AMP evaluation report, (2) scoping and screening report, and (3) operating experience review reports. His testimony focused on the processes that Entergy used to identify IPEC SSCs within the scope of the license renewal rule, and to determine which in-scope structures and components are subject to AMR.

65.

Dr. Dobbs is an independent Engineering Consultant in Russellville, Arkansas who provides engineering consulting services with respect to electronics and computer applications, including their use in nuclear power plants. Dr. Dobbs holds a Bachelor of Science degree in Physics from Arkansas Tech University, a Master of Science degree in Electrophysics from George Washington University, and a Doctor of Philosophy in Electrical Engineering from the University of Arkansas.188 187 Mr. Ruckers professional qualifications are provided in his statement of qualifications (ENT000092) and summarized in his testimony. See Entergy Testimony at 2 (A3) (ENTR00091).

188 Dr. Dobbs professional qualifications are provided in his statement of qualifications (ENT000093) and summarized in his testimony. See Entergy Testimony at 3-4 (A7) (ENTR00091).

66.

Dr. Dobbs has over thirty-five years of work experience, including sixteen years of experience in the nuclear power industry. Dr. Dobbs was a faculty member in the Engineering Department at Arkansas Tech University from 1977 until 1990. He taught classroom and laboratory courses in electrical machinery that covered the theory and operation of transformers, motors, and generators. From 1990 to 2004, Dr. Dobbs worked as an electrical engineer at Arkansas Nuclear One, where he worked in the Computer Support, Systems Engineering, and Design Engineering groups and attained the position of Senior Staff Engineer. Since 2004, Dr. Dobbs has worked principally as an independent Engineering Consultant on matters involving electronics and computer applications. Since January 2007, much of his consulting work has involved electrical and computer systems at nuclear power plants.

67.

Dr. Dobbs provided extensive written and oral testimony on Contention NYS-8.

His testimony focused on why, in his expert opinion, transformers are properly classified as AMR-excluded components, and why this classification comports with the meanings of active and passive components, as those terms are used in the Commissions 1995 License Renewal SOC and implemented in 10 C.F.R. § 54.21.

68.

Mr. McCaffrey is the Design Engineering Manager at IPEC.189 In that capacity, he manages the design engineering staff that maintains the IP2 and IP3 design bases and performs plant modifications for the station. He holds a Bachelor of Engineering degree in Electrical Engineering from the State University of New York - Maritime College. He also is a licensed Professional Engineer in the State of New York.

69.

Mr. McCaffrey has approximately twenty years of work experience, most of which has been in the nuclear power industry. Mr. McCaffrey worked in Consolidated Edisons 189 Mr. McCaffreys professional qualifications are provided in his statement of qualifications (ENT000095) and summarized in his testimony. See Entergy Testimony at 5-6 (A12-13) (ENTR00091).

Distribution Business before working at IPEC as an electrical system engineer responsible for the stations medium and high-voltage electrical systems. He was subsequently promoted to Electrical/I&C Systems Supervisor (2000-2003) and Systems Manager (2003-2005) and assumed oversight responsibility for numerous engineers involved in all aspects of the IPEC electrical and I&C systems. From 2005 to 2007, he spent two years working at the Institute of Nuclear Power Operations, where he reviewed nuclear power plant equipment performance. He assumed his current position, Design Engineering Manager, in July 2007.

70.

In his testimony, Mr. McCaffrey identified which IPEC transformers perform license-renewal intended functions and fall within the scope of contention NYS-5, as admitted by the Board. Mr. McCaffrey also described Entergys IPEC preventive maintenance and performance monitoring programs for large power transformers, as implemented under the NRCs maintenance rule (10 C.F.R. § 50.65), and responded to New Yorks related criticisms.

He also discussed historical transformer failures at IPEC, including the causes of those failures and Entergys associated corrective actions.

71.

Mr. Craig is a Senior Nuclear Safety Consultant with Talisman International, LLC in Washington, D.C. Mr. Craig holds a Bachelor of Science degree in Nuclear Engineering from the University of Maryland, and has over thirty-five years of experience in nuclear regulatory and safety matters, including positions with the NRC and in the U.S. Navys nuclear power program.190

72.

Mr. Craig worked at the NRC from 1976 to 2005 and held numerous technical and management positions. He was the Director of the License Renewal and Environmental Project Directorate responsible for managing license renewal activities in the Office of Nuclear 190 Mr. Craigs professional qualifications are provided in his statement of qualifications (ENT000094) and summarized in his testimony. See Entergy Testimony at 4-5 (A10) (ENTR000091).

Reactor Regulation (NRR). Among other responsibilities, he managed NRR license renewal activities, including the development and issuance of the initial license renewal rule (10 C.F.R.

Part 54) and regulatory guidance documents for license renewal, including both the safety and environmental aspects of the rule. Mr. Craig later served as Associate Director for Inspection and Programs in NRR, where he was responsible for management of NRC inspection and oversight activities for all civilian nuclear power reactors and non-power reactors in the U.S.

Mr. Craig joined Talisman International, LLC as a Senior Nuclear Safety Consultant in 2006.

73.

Mr. Craigs testimony focused on the classification of transformers under 10 C.F.R. Part 54, with particular emphasis on the origin, evolution, and application of relevant Commission and NRC Staff guidance. Mr. Craig also testified about current 10 C.F.R. Part 50 requirements (including the maintenance rule in 10 C.F.R. § 50.65) and ongoing NRC regulatory oversight programs implemented under 10 C.F.R. Part 50, including their relationship to 10 C.F.R. Part 54 and their applicability to electrical transformers.

74.

Based on the foregoing and the respective backgrounds and experience of Mr. Rucker, Mr. McCaffrey, Dr. Dobbs, and Mr. Craig, the Board finds that all four Entergy witnesses are qualified to testify as expert witnesses relative to the issues raised in NYS-8.

2.

NRC Staffs Expert Witnesses

75.

NRC Staff presented two witnesses who submitted direct testimony and testified at the evidentiary hearing regarding Contention NYS-8: (1) Mr. Mathew; and (2) Ms. Ray.191

76.

Mr. Mathew is a Team Leader in the Electrical Engineering Branch in the Division of Engineering in NRR. Mr. Mathew served as a principal Staff reviewer of the electrical component-related portions of the IPEC LRA and provided input to the Staffs SER in 191 See generally NRC Staff Testimony (NRC000031).

the areas of scoping and screening and aging management of electrical and I&C systems. He has provided inputs and participated in International Atomic Energy Agency (IAEA) technical meetings concerning cable aging management issues. He assisted in the preparation of NRC Information Notice 2009-010, Transformer Failures - Recent Operating Experience (NYS000019), a document that the Board discusses further below.192

77.

Ms. Ray is an Electrical Engineer in NRR and the project manager for Confirmatory Research on Equipment Qualification. Before she moved to the research division, she was employed as an Electrical Engineer in the Division of Engineering in NRR, where she conducted reviews of LRAs, specifically focusing on aging management of electrical components. Ms. Ray provided input to the electrical scoping and screening portions of the Staffs SER for IPEC license renewal. She has participated in IAEA technical meetings related to cable aging management issues.193

78.

Mr. Mathew and Ms. Ray provided testimony concerning the technical and regulatory bases for the NRC Staffs conclusion that electrical transformers are active components and thus are properly excluded from AMR under 10 C.F.R. Part 54.

79.

Based on the foregoing and the respective backgrounds and experience of Mr. Mathew and Ms. Ray, the Board finds that both NRC Staff witnesses are qualified to testify as expert witnesses relative to the issues raised in NYS-8.

3.

New Yorks Expert Witness

80.

New York witness Dr. Degeneff provided written direct and rebuttal testimony and oral testimony at the evidentiary hearing regarding Contention NYS-8.

192 Mr. Mathews professional qualifications are provided in his statement of qualifications (NRC000032) and summarized in his testimony. See NRC Staff Testimony at 1-3 (A1-3) (NRC000031).

193 Ms. Rays professional qualifications are provided in his statement of qualifications (NRC000033) and summarized in his testimony. See NRC Staff Testimony at 1-3 (A1-3) (NRC000031).

81.

Dr. Degeneff holds a Doctorate of Engineering, a Master of Science degree in Electrical Power Engineering, and a Bachelors degree in Mechanical Engineering.

Dr. Degeneff has worked, taught, and researched in the power engineering field, with an emphasis on the electrical behavior and design of power transformers, for over forty years.194

82.

Dr. Degeneff is the owner of Utility Systems Technologies, Inc. (UST), a company located in Latham, New York, that develops electronic voltage regulators and sag mitigation equipment used for power quality improvement in utility and industrial power systems. Among other things, UST designs and builds equipment, including transformers, to improve power quality. Dr. Degeneff has published more than eighty papers on topics relating to transformer design and performance and power system design and holds eight patents relating to transformer winding design and electronic tap changer design.195

83.

Dr. Degeneffs testimony focused on explaining why, in his professional opinion, transformers are passive or static devices that are more similar to the AMR-included components in 10 C.F.R. § 54.21(a)(1)(i), such that an AMP for transformers should be required.

Dr. Degeneff also provided testimony on transformer age-related degradation mechanisms, operating experience, and monitoring/testing methods.

84.

Based on the foregoing and Dr. Degeneffs background and experience, the Board finds that Dr. Degeneff is qualified to testify an as expert witnesses relative to the issues raised in NYS-8.

194 Dr. Degeneffs professional qualifications are provided in his statement of qualifications (NYS000004) and summarized in his testimony. See New York Direct Testimony at 2:5-14 (NYSR00003).

195 Id. at 1:19-2:14.

B.

Under 10 C.F.R. § 54.21 and Consistent With Commission Guidance Construing That Regulation, Transformers Are Excluded from AMR, Because They Do Not Perform Their Intended Function Without Moving Parts or Without a Change in Configuration or Properties

85.

As described above, the 1995 License Renewal SOC provides extensive guidance regarding active and passive components, for these purposes. Also as described above, the 1995 License Renewal SOC makes clear that standard industry concepts of passive structures and components do not accurately describe the structures and components that should be subject to an [AMR] for license renewal,196 and the Commission emphasized that its own description of passive structures and components has been incorporated into 10 C.F.R. § 54.21(a) and should be used only in connection with the IPA review in the license renewal process.197

86.

Nevertheless, New York and Dr. Degeneff rely upon just such demonstrably irrelevant standard industry concepts. In his prefiled direct testimony and report, for example, Dr. Degeneff asserted that transformers are static or passive devices, and used the terms passive and static interchangeably.198 He further claimed that every authority he has reviewed characterizes transformers as such,199 stating that [t]he transformer is a static device as defined by the [Institute of Electrical and Electronics Engineers (IEEE)] and its Transformers Committee.200 The term static, however, appears nowhere in 10 C.F.R. Part 54 or its regulatory history, or in any NRC guidance implementing 10 C.F.R. § 54.21(a)(1)(i).201 196 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016); Entergy Testimony at 12 (A24), 51-52 (A65) (ENTR00091).

197 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016) (emphasis added); Entergy Testimony at 12 (A24), 51-52 (A65) (ENTR00091).

198 See, e.g., New York Direct Testimony at 8:19-20 (NYSR00003) (Transformers are passive, or static, devices, the properties of which do not change during operation.).

199 Id. at 6:8-12:11; Degeneff Report at 1-3, 23 32 (NYSR00005).

200 New York Direct Testimony at 42:12-14 (NYSR00003).

201 Dec. 13, 2012 Tr. at 4220:21-22 (Dobbs); Entergy Testimony at 108 (A118) (ENTR00091).

87.

Indeed, as Entergys expert Dr. Dobbs noted, the IEEE dictionary, which describes transformers as static, also describes semiconductor diodes, thyristors, transistors, electron tubes, magnetic amplifiers, and battery chargers as static components.202 However, transistors and battery chargers are expressly excluded from AMR by NRC regulation.203 Further, Dr. Degeneff himself later referred to transistors and other active electric devices like electric tubes, magnetic amplifiers, breakers.204 These, however, are items that the IEEE dictionary describes as static devices.205 As the Commission cautioned in the 1995 License Renewal SOC, the Board cannot look to IEEE sources for guidance on the meaning or classification of active and passive components under 10 C.F.R. Part 54.206

88.

Although New York itself invoked the 1995 License Renewal SOC in its Position Statement dated December 12, 2011,207 New York has also argued, inconsistently, that because the criteria in 10 C.F.R. § 54.21 are allegedly clear on the face of the regulation, the Board may not look to agency guidance for additional criteria.208 The Board does not agree. First, the SOC accompanying a regulation, having been endorsed by the Commission itself, is entitled to 202 Entergy Testimony at 53 (A67) (ENTR00091); see also Dec. 13, 2012 Tr. at 4414:10-15 (Dobbs) ([A]

transistor is a static, active device. So just because these references refer to a transformer as static, it does not help us in classifying a transformer.).

203 10 C.F.R. § 54.21(a)(1)(i).

204 Degeneff Report at 12 (NYSR00005) (emphasis added).

205 IEEE Standard Dictionary of Electrical and Electronics Terms (Frank Jay 2d ed. May 12, 1978) (NYS000415).

206 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016) (stating that the Commission reviewed industry concepts of passive structures and components and determined that they do not accurately describe the structures and components that should be subject to an [AMR] for license renewal).

207 New York Position Statement at 7-8 (NYS000002).

208 New York Revised Position Statement at 6-7 (NYSR00413) (quoting Christensen v. Harris Cnty., 529 U.S.

576, 588 (2000)) (Deference to an agencys interpretation of its own regulation is not warranted when the language of the regulation is unambiguous. In such a situation, [t]o defer to the agency's position would be to permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation.).

special weight.209 Second, as all parties acknowledge, the non-exclusive lists included in the text of the regulation itself do not include transformers, either as an included or excluded component,210 and so the Board by necessity must go outside of the regulation to resolve New Yorks claims. In this case, the Commissions SOC clarifies the intended meaning and application of 10 C.F.R. § 54.21, including the important distinction between passive and active SSCs.211 Contrary to New Yorks claim, the SOCwhich New Yorks own witness relies ondoes not create de facto a new regulation.212 The Board sees no conflicts or inconsistencies between the rule and the 1995 License Renewal SOC, particularly given the Commissions own reliance on the SOC in its recent Seabrook decision.213

89.

In addition and also as described above, there is longstanding specific Staff guidance to the effect that [t]ransformers perform their intended function through a change in state similar to switchgear, power supplies, battery chargers, and power inverters, which have been excluded in § 54.21(a)(1)(i) from [a]n [AMR]. Any degradation of the transformers ability 209 Shoreham, ALAB-900, 28 NRC at 290-91; cf. Vt. Yankee Nuclear Power Corp., 435 U.S. at 543 (quoting FCC

v. Pottsville Broadcasting Co., 309 U.S. 134, 143 (1940)) (Administrative agencies should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties.); Citizens Awareness Network v. United States, 391 F.3d 338, 352 (1st Cir. 2004)

(citations omitted) (As a general principle, agencies have broad authority to formulate their own procedures -

and the NRCs authority in this respect has been termed particularly great.); Massachusetts v. United States, 522 F.3d 115, 126-27 (1st Cir. 2008) (This court must also be mindful of the substantial deference required when an agency adopts reasonable interpretations of regulations of its own creation.).

210 See Entergy Testimony at 17 tbl. 1 (A28) (ENTR00091); New York Direct Testimony at 14:14-15:13 (NYSR00003).

211 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016) see Dec. 13, 2012 Tr. at 4228:11-14 (Mathew) (So you have to look at both the regulation as well as the SOC to understand how you determine an SSC, whether its active or passive.).

212 See New York Rebuttal Position Statement at 6-7 (NYSR00413).

213 See Seabrook, CLI-12-05, slip op. at 19-20 (explaining the distinction between active and passive intended functions under 10 C.F.R. Part 54 through extensive references to the significant discussion in the 1995 License Renewal SOC).

to perform its intended function is readily monitorable by a change in the electrical performance of the transformer and the associated circuits.214

90.

In Seabrook, the Commission cited both the 1995 License Renewal SOC and the Grimes Letter and associated industry guidance, in reversing the admission of a transformer contention materially indistinguishable from NYS-8. The Commission emphasized that it had devoted significant discussion in the 1995 License Renewal SOC to defining a passive component to include only those components that perform an intended function without moving parts or without a change in configuration or properties and for which aging degradation is not readily monitored.215 The Commission also stated that longstanding Staff guidance directly addresses the classification of electrical transformers for the purposes of license renewal, and has found them to be active components.216 C.

Exclusion of Transformers from AMR Is Supported by Technical Testimony and Evidence Regarding the Intended Function of Transformers

91.

In basic terms, a transformer converts alternating current (AC) power at a certain voltage level to AC power at a different voltage, without changing the frequency.217 The intended function of a transformer is to step up voltage, to step down voltage, or to provide isolation between the input and output circuits.218

92.

As illustrated by Figure 1 of Entergys testimony, in its simplest form, a transformer consists of two coils of wire wrapped around some type of core, which usually is a 214 1997 Grimes Letter, Attach. at 2 (ENT000097); Entergy Testimony at 20-21 (A32) (ENTR00091).

215 Seabrook, CLI-12-05, slip op. at 20 (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016)).

216 Id. at 23-24 (citing Grimes Letter).

217 Entergy Testimony at 20-21 (A32), 26-27 (A42) (ENTR00091); NRC Staff Testimony at 5-7 (A8)

(NRC000031); New York Direct Testimony at 7:5-8:9 (NYSR00003).

218 Entergy Testimony at 29 (A44) (ENTR00091).

material of high magnetic permeability such as iron or steel, and the transformer is activated and performs its intended function when AC current is applied to one of the coils.219 The winding used to input power to the transformer is called the primary winding, and the winding used to output power from the transformer is called the secondary winding.220 Thus, a transformer converts electrical energy at its input terminals into magnetic energy, and then back to electrical energy at its output terminals.221 This means that the voltage and current entering the transformer via the primary winding is not the same voltage and current that comes out of the transformer via the secondary winding.222 A transformer transforms the voltage, but electrical current itself does not flow through a transformer in the way, for example, that water flows through a pipe: [n]one of the current, none of the electrons or current that flows into the primary comes out of the secondary.223

93.

As described further below, the record evidence supports the following principal Board findings:

• A transformers key properties include its internal magnetic field, terminal voltages and currents, and turns ratio.224

• Magnetic field, voltage, and current are not, as New York claims,225 properties of the electricity or power passing through a transformer rather than of the transformer itselfindeed, no electricity passes through a transformer.226 219 Id. at 27 fig. 1 (A43).

220 Id. at 27-29 (A43).

221 See id. at 20-21 (A32), 27-28 (A43), 36 (A54) (ENTR00091); NRC Staff Testimony at 5-7 (A8), 11-12 (A19),

22 (A29) (NRC000031).

222 Entergy Testimony at 28-29 (A43), 36 (A54), 59-60 (A71) (ENTR00091); NRC Staff Testimony at 5 (A8), 7 (A9) (NRC000031).

223 Dec. 13, 2012 4457:22-25 (Dobbs).

224 Entergy Testimony at 33-34 (A53) (ENTR00091).

225 New York Direct Testimony at 10:1-11:2 (NYSR00003).

226 Entergy Testimony at 33 (A52) (ENTR00091).

• A transformers internal magnetic field and terminal voltages and currents are properties that change as the transformer performs its intended function, rendering it an active component for these purposes and therefore exempt from AMR;227

• Changes in a transformers terminal voltages and currents can be directly monitored or verified during transformer operation.228

• Transformers are more similar to the AMR-excluded examples listed in 10 C.F.R.

§ 54.21(a)(1)(i) than to AMR-included examples and, therefore, transformers are properly excluded from an AMR under that controlling regulation.229 D.

A Transformers Key Properties Include Its Internal Magnetic Field and Terminal Voltages and Currents

94.

10 C.F.R. § 54.21(a)(1)(i) states that an AMR is required for those in-scope structures and components that perform an intended function, as described in § 54.4, without moving parts or without a change in configuration or properties.230 The parties agreed that transformers do not rely on moving parts or a change in their configuration to perform their intended voltage transformation function.231 The question, then, is whether a transformer changes its properties when it performs its intended purpose, and that, in turn, requires an assessment of what the properties of a transformer are. Neither 10 C.F.R. Part 54 nor the 1995 License Renewal SOC specifically defines the term properties.232

95.

According to Entergy witness Dr. Dobbs, a property is a characteristic or trait of an object that is inherent to the object, such that it is not possible to fully describe or understand an object without consideration of its properties.233 Applying this definition of 227 Id. at 34-36 (A54).

228 Id. at 36-37 (A55).

229 Id. at 37-46 (A56-62).

230 See id. at 16 (A27).

231 Id. at 41 (A59); NRC Staff Testimony at 12 (A20) (NRC000031); New York Direct Testimony at 6:14-16 (NYSR00003).

232 Entergy Testimony at 31 (A48) (ENTR00091).

233 Id. at 30 (A47); Dec. 13, 2012 Tr. at 4316:21-4317:3, 4335:8-25 (Dobbs).

property, Dr. Dobbs concluded that the magnetic field, terminal voltages and currents, and the turns ratio are properties of a transformer, because they are inherent to the description and operation of a transformer.234 As Dr. Dobbs explained:

The terminal voltages and currents also are properties of a transformer for two reasons. First, the terminal voltages and currents create the internal magnetic field of a transformer. The terminal voltages drive the terminal currents, which create the internal magnetic field.

Therefore, defining the magnetic field as a property requires that the associated terminal voltages and currents be included as properties.

Second, a transformer is an electrical component, and virtually all electrical components are described by their terminal voltages and currents, i.e., their terminal characteristics. In other words, a transformers terminal voltages and currents are inherent to the transformer and necessary to fully understand and describe how the transformer operates.235

96.

New Yorks witness Dr. Degeneff himself referred to terminal currents, voltages, and the magnetic field properties of a transformer in his own description of transformer operation, thereby effectively acknowledging that those are properties of a transformer.236 Dr. Degeneffs prefiled testimony, however, defined properties as the constituent parts of the transformer that define its function, and which remain the same before, during, and after transformer operation.237 This is in direct conflict with the testimony provided by Dr. Dobbs. In his testimony, Dr. Degeneff cited the example of a battery (an AMR-excluded component) that is composed of chemicals that undergo physical changes, and contended that it was those 234 Entergy Testimony at 31 (A47) (ENTR00091).

235 Id. at 34 (A53) (emphasis omitted).

236 Degeneff Report at 2 (NYSR00005) (When that generated magnetic field touches (or links) another current carrying conductor, a voltage is generated across the second conductor. If the second conductor is connected so that current can flow, electric power is transformed from the first conductor to the second conductor.

(emphasis added)); see also New York Direct Testimony at 8:5-9 (NYSR00003) (When that generated magnetic field touches (or links) the secondary winding, a voltage is generated across it. If the second winding is connected so that current can flow, electric power is transformed from the first winding to the second winding. (emphasis added)).

237 New York Direct Testimony at 9:10-19 (NYSR00003); New York Rebuttal Testimony at 14:19-15:1 (NYSR00414).

chemical/physical changes that resulted in the exclusion of a battery from the requirement of an AMP under 10 C.F.R. § 54.21(a)(1)(i).238 Dr. Degeneff further argued that Dr. Dobbs definition of property would lead to the erroneous conclusion that a pipe was an active component, because pressure and flow rate are analogous to terminal voltage and magnetic field.239

97.

But, as Dr. Dobbs explained in response, batteries experience changes both in their chemical composition and in their terminal voltages, and it is the terminal voltages that are material for these purposes.240 Dr. Dobbs noted that the discharge curve on a battery reflects changes in the batterys voltage.241 Taking the example of a cell phone battery, he explained that monitoring the batterys terminal voltages and currents indicates whether the battery is performing its intended function and when it needs to be recharged.242 In his opinion, it is this fact that makes a transformer and a battery each an AMR-excluded component.243 With respect to pipes (which are discussed further below), Dr. Dobbs explained that a pipes properties do not change when it performs its intended function.244 And, as Dr. Dobbs further observed, all piping within the scope of Part 54 operates as a pressure boundary, a function that is specifically defined as passive by the 1995 License Renewal SOC (NYS000016).245

98.

We find that the definition of properties adopted by Dr. Dobbs is a valid and appropriate one for purposes of our present inquiry. We also find that the magnetic field, terminal voltages and currents, and turns ratio are properties of a transformer because they are 238 New York Rebuttal Testimony at 9:20-10:10 (NYSR00414) 239 Id. at 10:14-11:6.

240 Entergy Testimony at 40 (A57) (ENTR00091).

241 Dec. 13, 2012 Tr. at 4389:18-23 (Dobbs).

242 Id. at 4389:24-4390:4 (Dobbs).

243 Id.

244 Entergy Testimony at 71 fig. 10 (A78) (ENTR00091).

245 Dec. 13, 2012 Tr. at 4405:12-25 (Dobbs).

inherent to the description and operation of a transformer. As described further below, the magnetic field and terminal voltages and currents are properties that change when a transformer performs its intended function, rendering transformers active and excluded from the requirement of an AMP.

E.

Contrary to New Yorks Claim, Terminal Voltage and Current and Magnetic Field Are Not Properties of Electricity or Power Passing Through a Transformer

99.

As noted, Dr. Degeneff asserted that pressure and flow are properties of the fluid passing through a pipe. Applying this same logic, he similarly posited that voltage and current in a transformer are properties of electricity, and not of the transformer itself.246 In Dr. Degeneffs view, the voltage that pushes charge through a conductor is akin to the pressure that pushes water through a pipe.247 On this basis, he concluded that, although electricity traveling through the transformer may experience a change in magnitude, the transformers traits or constituent parts do not change, thus making it a passive component and not exempt from AMR.248 100.

The Board finds that Dr. Degeneffs arguments do not withstand technical scrutiny. As a threshold matter and as noted above, electrical charge does not flow through a transformer in the way that water flows through a pipe,249 and the analogy between water and electricity upon which Dr. Degeneff relies for these purposes is therefore not valid.250 As Dr. Dobbs explained, electricity is a fundamental entity of nature consisting of positive and 246 New York Rebuttal Testimony at 12:7-8 (NYSR00414).

247 Id. at 12:5-7 (NYS000414).

248 New York Direct Testimony at 20:18-23 (NYSR00003).

249 Entergy Testimony at 28-29 (A43) (ENTR00091); NRC Testimony at 5 (A8), 7 (A9) (NRC000031); Dec. 13, 2012 Tr. at 4457:22-25 (Dobbs) ([N]one of the electrons or current that flows into the primary comes out of the secondary.).

250 Entergy Testimony at 69-72 (A78) (ENTR00091).

negative charges.251 It has the properties of being either positive or negative, of like charges repelling each other, and of unlike charges attracting each other.252 Both positive and negative electric charges are surrounded by an electric field, and movement of those charges produces a magnetic field.253 Indeed, it is well known that electricity (i.e., charge) can and does exist everywhere without voltage and current; i.e., in the form of atoms, molecules, and matter.254 Voltage and current therefore cannot accurately be described as properties of electricity.255 101.

We therefore must reject the definition of properties urged by Dr. Degeneff.

Again, we find that the magnetic field, terminal voltages and currents, and turns ratio are properties of a transformerthey are not properties of the electricity associated with a transformer.256 251 Id. at 33 (A51). Relevant to this point, Dr. Dobbs also observed that, under the International System of Units, current is measured in coulombs per second, and voltage is measured in joules per coulomb. The only non-derived unit is the coulomb, which defines a unit of electric charge. Dec. 13, 2012 Tr. at 4349:23-4350:10 (Dobbs).

252 Entergy Testimony at 33 (A51) (ENTR00091).

253 Id.

254 Dec. 13, 2012 Tr. at 4344:23-4346:9 (Dobbs) (explaining that electricity is charge and that voltage and current result from separating charge).

255 Id. at 4345:12-13 (Dobbs) (Voltage and current are not properties because they do not always exist when charge exists.).

256 Dr. Degeneff also claimed that the magnetic field cannot be a property of a transformer, because it is created by an external force, namely the voltage or current of the electricity supplied. That is not the case. Although voltage is sometimes described in the vernacular as electromotive force, Dec. 13, 2012 Tr. at 4317:25-4318:3 (Dobbs), it is not, in fact, actually a force. Id. at 4318:4-12 (Dobbs). This is confirmed by the fact that voltage, current, and force have different dimensional units (joules per coulomb for voltage, coulombs per second for current, and newtons for force). Id. at 4318:6-8, 4350:4-5 (Dobbs). Voltage is a measure of potential, not a measure of force. Id. at 4318:11-12 (Dobbs). Just as elevation represents a different potential in a gravitational field, a voltage difference represents a different potential in an electric field. Id. at 4319:4-7 (Dobbs). Voltage and current, however, are not inherent in electricity, which is simply charge. Id. at 4345:12-4346:1 (Dobbs). Voltage and current are not external forces that create a magnetic field in a transformer as claimed by Dr. Degeneff, see New York Rebuttal Testimony at 13:22-14:16 (NYS00414)they are not forces at all. For these reasons and based upon the evidence in the record, the Board finds that the magnetic field is a property of a transformer.

F.

A Transformers Internal Magnetic Field and Terminal Voltages and Currents Are Properties That Change as the Transformer Performs Its Intended Function 102.

From the above, it is clear that the properties of a transformer change with the performance of its intended function. As explained by Dr. Dobbs and Ms. Ray, a transformers magnetic field and terminal voltages and currents are properties that continuously change as a transformer performs its intended function.257 For example, when a transformer is out of service or off, it has no input voltage, no output voltage, and no internal magnetic field.258 When the transformer is put into service, it is connected to a voltage source and a load circuit. When these two items are connected, the terminal is turned on, terminal voltages and currents appear, and an internal magnetic field is created.259 It has just experienced a change of state that manifests at its terminals.260 103.

In the case of a load increase (more current is drawn from the transformers secondary side), more current must be supplied to the primary winding by the voltage source.261 The currents at the transformer terminals and the internal magnetic field all change due to the load change.262 Depending upon the voltage source, the design of the transformer, and the size of the load increase, the terminal voltages of the transformer also may change.263 Conversely, in the case of a load decrease (less current is drawn from the transformers secondary side), less 257 Entergy Testimony at 34-36 (A54) (ENTR00091); NRC Staff Testimony at 11-12 (A19) The NRC Staff equated this change in the electromagnetic properties of the transformer with a change in state, noting that for a transformer to operate, there has to be a change in [the magnetic] flux, and that changing magnetic flux is the change in state. Dec. 13, 2012 Tr. at 4376:22-25 (Ray).

258 Entergy Testimony at 35 (A54) (ENTR00091).

259 Id. at 35-36 (A54).

260 Dec. 13, 2012 Tr. at 4384:8-12 (Ray) ([W]e believe the transformer is an active component, based on the change in state, which is the changing magnetic flux.).

261 Entergy Testimony at 36 (A54) (ENTR00091).

262 Id.

263 Id.

current is drawn from the voltage source on the primary side, and the internal magnetic field decreases in strength.264 Again, the currents at the transformer terminals and the internal magnetic field all change, and minor changes in the terminal voltages also may occur.265 G.

Changes in a Transformers Terminal Voltages and Currents Can Be Directly Monitored During Transformer Operation 104.

In the 1995 License Renewal SOC, the Commission stated that active functions include those functions where the parameter of concern, including any design margins, can be directly measured or observed.266 Therefore, the Board now considers whether a transformers terminal voltages and currents can be directly measured or observed during the transformers operation. Based on the record evidence, we conclude that they do.

105.

Dr. Dobbs, Mr. Mathew, and Ms. Ray explained why a transformers terminal voltages and currents can be directly measured or observed as it performs its intended function.267 To begin with, a transformer cannot perform its intended function unless power is 264 Id.

265 Id. The Board is not persuaded by Dr. Degeneffs discussion of isolation transformers, which have a turns ratio of 1 to 1 and provide isolation between the input and output circuits. Dr. Degeneff suggested that current and voltage of the electricity flowing through an isolation transformer do not undergo any change, purportedly like the fluid flowing through a pipe. New York Rebuttal Testimony at 26:4-10 (NYRS00414). However, transformers perform their function by converting electrical energy at its input terminals into magnetic energy, and then back into electrical energy at its output terminals. Thus, even in an isolation transformer, the voltage and current entering the transformer are not the same as the voltage and current leaving the transformer. Dec.

13, 2012 Tr. at 4457:22-25 (Dobbs) (None of the current, none of the electrons or current that flows into the primary comes out of the secondary.). The NRC Staffs witnesses agreed with Dr. Dobbs on this point. Id. at 4351:13-17 (Ray) (But another function of a transformer also could lead to provide isolation since the primary winding and the secondary winding are not connected. So they are considered two separate electrical circuits.); id. at 4356:22-4357:1 (Mathew) (The beauty of the transformer is there is no electrical connection between the primary winding and the secondary winding.).

266 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (NYS000016).

267 Entergy Testimony at 36-37 (A55) (ENTR00091); NRC Staff Testimony at 14 (A20), 15-16 (A22)

(NRC000031); see also Dec. 13, 2012 Tr. at 4270:5-4271:1 (McCaffrey) (explaining the procedures used to monitor transformer operation).

supplied to its primary winding.268 The fact that the transformer is off is readily observed at its terminals.269 106.

When power is applied to its primary winding, a transformer is on.270 Voltage appears at the primary terminals, current flows in the primary winding, a magnetic field is created in the core, and a voltage appears at the secondary terminals.271 The primary voltage and current are readily monitored at the primary terminals.272 The presence of the magnetic field is readily monitored at the secondary terminals.273 If a load is connected to the secondary winding, then current will flow, which is readily monitored by instrumentation or the reaction at the load (e.g., a motor starts). If the load is varied, then the terminal voltages and currents will vary, as will the internal magnetic field.274 Thus, all of these transformer properties are readily monitored at the transformers terminals.275 107.

Mr. McCaffrey testified that station operators monitor the in-service performance of large power transformers of the type at issue in NYS-8 (i.e., transformers required for compliance with 10 C.F.R. §§ 50.48 and 50.63).276 For example, the status of voltage on the electrical buses is directly and continuously monitored.277 If voltage conditions 268 Entergy Testimony at 37 (A55) (ENTR00091).

269 Id.

270 Id.

271 Id.

272 Id.; Dec. 13, 2012 Tr. at 4270:9-10 (McCaffrey).

273 Entergy Testimony at 37 (A55) (ENTR00091).

274 Id.

275 Id.; see also Dec. 13, 2012 Tr. at 4337:4-16 (Dobbs) (The fact that they are there and that they are operating is only measurable at the terminals.).

276 Entergy Testimony at 107 (A116) (ENTR00091); Dec. 13, 2012 Tr. at 4270:5-4271:1 (McCaffrey) (explaining the procedures used to monitor transformer operation).

277 Id. at 4378:25-4379:2 (Ray) (On transformers, its continuously monitored. There are alarms, there are indications of voltage and current.).

are outside the defined range, then operators in the control room are alerted through automatic actuation of an alarm on the 480V electrical buses so that they may take appropriate corrective actions.278 Mr. Mathew of the Staff addressed this point at hearing:

All those components listed as active, either you get an alarm or an indication, showing clearly whats the function of those devices. So I look at the transformer, [it] has the same kind of monitoring. Say for instance, if there is a fault or there is an arcing inside the transformer, there are protective devices installed.... If you have oil temperature, you know, because of the overloading or any kind of phenomena that degrades the transformer, you get a transformer, you know, trouble alarm in the control room.... You can monitor through more parameters that the transformer either is functioning properly, is not functioning properly.279 108.

In summary, the Board finds that a transformer performs its intended function through changes in its electromagnetic properties (i.e., terminal voltages/currents and magnetic field), and that those changes in properties can be directly monitored at the transformers terminals.

H.

Transformers Are More Similar to the AMR-Excluded Component Examples Listed in 10 C.F.R. § 54.21(a)(1)(i) Than to AMR-Included Examples, and Are Therefore Properly Excluded From AMR 109.

In admitting NYS-8, we identified the need to determine whether transformers are more similar to the included, or to the excluded, component examples provided in 10 C.F.R.

§ 54.21(a)(1)(i).280 Accordingly, the parties provided extensive written and oral testimony on this subject.281 278 Entergy Testimony at 107 (A116) (ENTR00091); Dec. 13, 2012 Tr. at 4270:6-16 (McCaffrey) (stating that alarms on the 480 volt and 6.9 kilovolt electrical buses alert operators of anomalous voltage conditions requiring corrective action); Indian Point 2 UFSAR Revision 20, at Ch. 7, 89-90 (2006) (NYS000014F).

279 Dec. 13, 2012 Tr. at 4410:12-4411:4 (Mathew).

280 Indian Point, LBP-08-13, 68 NRC at 88-89.

281 See Entergy Testimony at 37-49 (A56-64) (ENTR00091); NRC Staff Testimony at 20-22 (A27-28)

(NRC000031); New York Direct Testimony at 16:22-25:12 (NYSR00003); New York Rebuttal Testimony at 21:17-33:10 (NYS000414); Dec. 13 2012 Tr. at 4369:7-4372:24, 4385:8-4409:22.

110.

Based upon the substantial evidence presented, the Board concludes that transformers are more like AMR-excluded components. The reasons include the fact that the transformer terminal voltages and currents can be readily monitored and directly indicate the health of the component (e.g., the ability of the transformer to perform its intended function).282 The AMR-excluded list contains items that, like transformers, have properties that change or parts that move to perform the intended functions, changes or movements that can be directly observed or monitored.283 The list of components excluded from AMR in 10 C.F.R.

§ 54.21(a)(1)(i) contains a number of electrical components, including transistors, power inverters, circuit boards, battery chargers, and power supplies. Like transformers, all of these items: (1) have terminal voltages and currents; (2) these terminal voltages and currents are properties of the components that change as the components perform their required functions; and (3) changes in terminal voltages and currents can be directly measured or observed.284 111.

Correspondingly, the Board concludes that transformers are not similar to components on the AMR-included list, such as the reactor vessel, pressure-retaining boundaries, piping, component supports, valve bodies, penetrations, electrical cables, and electrical cabinets.285 A common characteristic of these items is that each ones ability to perform its intended function is not directly verifiable by monitoring moving parts or a change in 282 Dec. 13 2012 Tr. at 4337:4-12 (Dobbs).

283 Entergy Testimony at 42 (A60) (ENTR00091). For example, Dr. Dobbs stated that the output fluid pressure of a pump, the output voltage and frequency of a diesel generator, the air pressure of a compressor, the output signal of a pressure indicator, the output voltage of a battery, the electrical output of a power supply, the position of a valve, and the status or condition of a relay all are readily observed. See generally Dec. 13, 2012 Tr. at 4385:8-4409:22.

284 Entergy Testimony at 42-44 (A60-61) (ENTR00091); NRC Staff Testimony at 12-13 (A20), 23-24 (A32)

(NRC000031).

285 Entergy Testimony at 72-73 (A79) (ENTR00091); NRC Staff Testimony at 23-24 (A31-32) (NRC000031).

configuration or properties.286 Instead, indirect measurements, tests, and observations are used to predict degradation of the item based on an analysis of this secondary information.287 For example, the ability of a pipe to perform its intended function is monitored indirectly by measuring the thickness of the pipes wall and inspecting it for signs of corrosion (because monitoring fluid pressure alone is not necessarily indicative of the pipes ability to perform its intended function (maintaining a pressure boundary) at higher pressures associated with design basis events (e.g., earthquakes) if, for example, wall thinning has occurred in the pipe).288 112.

New York, through the testimony of Dr. Degeneff, argued the contrary, contending that a transformer is like a pipe, an electrical cable, a heat exchanger, a steam generator, a reactor vessel, and a containment structure, all of which appear on the AMR-included list in 10 C.F.R. § 54.21(a)(1)(i).289 Dr. Degeneff sought to distinguish transformers from the electrical components that are listed in 10 C.F.R. § 54.21(a)(1)(i) as excluded from AMR, including transistors, power inverters, circuit boards, and power supplies.290 The Board examines each of these comparisons below.

113.

Transformers vs. AMR-Included Pipes. In his direct and rebuttal testimony, Dr. Degeneff asserted that transformer operation is analogous to the flow of a fluid through a pipe.291 In this discussion, he assumed that transformers are lossless; that is, the power in is 286 NRC Staff Testimony at 23 (A31) (NRC000031).

287 Entergy Testimony at 42 (A60) (ENTR00091).

288 Id.; see also Dec. 13, 2012 Tr. at 4378:23-4379:3 (Ray) (You can monitor the wall thickness of a pipe, but youd have to do a test. On transformers, its continuously monitored. There are alarms, there are indications of voltage and current. In addition, there are also other tests that you can do.).

289 New York Direct Testimony at 18:19-20:23 (NYSR00003).

290 Id. at 27:12-28:22.

291 Id. at 18:19-19:23; New York Rebuttal Testimony at 24:10-27:13 (NYS000414).

equal to the power out.292 That is not true in the real world.293 He also assumed that the input and output voltages and currents are constanta so-called isolation transformer, with a turns ratio of 1 to 1.294 That, however, is not a universal (or even a common) characteristic of transformerssuch transformers are rare,295 and there are none at IPEC that are potentially covered by NYS-8.296 114.

The Board agrees with Entergy and the Staff that a transformer and a pipe are not comparable for these purposes.297 Dr. Degeneffs analogy rests on suppositions that we already have rejected as erroneous; i.e., the notions that pressure and velocity are properties of water, and that current and voltage are properties of electricity.298 Moreover, as Dr. Dobbs explained, according to accepted physical theory (Bernoullis equation), water pressure is created by the force (e.g., gravity, a pump) that causes the water to flow in the pipe, and is transformed by a change in the diameter of the pipenot by a property of the water itself.299 Thus, changes in fluid pressure and velocity that occur when the pipe performs its intended function are due to the 292 New York Direct Testimony at 19:16-17 (NYSR00003).

293 Entergy Testimony at 28-29 (A43) (stating that the equation describing transformer operation is conceptually true for real life transformers but considerations must be made for internal transformer losses and the fact that not all of the magnetic field produced by the primary winding is coupled into the secondary winding(s)).

294 See New York Rebuttal Testimony at 27:2-13 (NYSR00414). These same assumptions can be applied in the same fashion to power inverters, circuit boards, battery chargers, and power suppliesall of which are active, AMR-excluded components under 10 C.F.R. § 54.21(a)(a)(i).

295 Entergy Testimony at 76-77 (A85) (ENTR00091).

296 See Dec. 13, 2012 Tr. at 4455:2-23 (McCaffrey).

297 See id. at 4352:25-4353:1 (Ray) (So the analogy of a cable or a pipe is not quite the same.); id. at 4356:11-14 (Mathew) (I think the analogy Dr. Degeneff is using is not a good comparison. You should be comparing the transformer to other components mentioned in the regulation.); id. at 4403:4-9 (Dobbs) (So therefore, comparison of electrical components with fluid components is superficial at best, okay. You may be able to draw these analogies at a very high level, but if you get down to the details of the actual operation, those will all fall apart.); id. at 4371:16-19 (Dobbs) (And in my professional opinion, there is nothing in the [AMR-included] list which we are calling passive that is in any [way] similar to the way a transformer operates.).

298 See Entergy Testimony at 13 (A24) (ENTR00091).

299 Id. at 69-72 (A78).

forces exerted on the fluid by the pipe.300 However, the pipe itself does not change in any way when it performs its intended function.301 The fluid entering the pipe at some initial velocity is the same fluid exiting the pipe at some changed velocity.302 The current that flows out when a transformer performs its intended function, by contrast, is not the same current that was applied to the input; it is new current that has been created by the magnetic field interacting with the secondary winding.303 For all of these reasons, a transformer is not similar to a pipe for AMR classification purposes.304 115.

Transformers vs. AMR-Included Cables. New York, through the testimony of Dr. Degeneff, likened a transformer to an AMR-included cable, arguing that a transformer passively transmits power in exactly the same way a cable transmits power, and that a magnetic field is created when both components perform their intended functions.305 116.

The Board concludes that transformers and cables are not comparable for these purposes. First, Dr. Degeneff misstates the function of a transformer, which is to transformnot transmitelectricity within a circuit.306 Second, as we have explained, the voltage and current 300 Id. at 71 fig. 10 (A78).

301 Id.; Dec. 13, 2012 Tr. at 4287:19-21 (Degeneff) ([A] pipe isnt changing state, because the fluid is passing through it....).

302 Entergy Testimony at 71 fig. 10 (A78) (ENTR00091); Dec. 13, 2012 Tr. at 4340:8-14 (Degeneff) ([T]he water going in is the same water coming out.), 4351:18-22 (Ray) ([T]he water coming in is the same water coming out.).

303 Entergy Testimony at 71 (A78) (ENTR00091); Dec. 13, 2012 Tr. at 4342:18-4343:3 (Degeneff) (What flows in the primary, that path is different than what flows in the secondary....); id. at 4351:23-24 (Ray) ([F]or a transformer I wouldnt say that its the same set of electrons.).

304 Further, all piping within the scope of Part 54 operates as a pressure boundary, a function that is specifically defined as passive in the 1995 License Renewal SOC, and the pipe analogy fails for this additional reason.

Moreover, as Dr. Dobbs put it, the field of fluid dynamics and the field of electromagnetics are very different fields, that they are not subject to the same rules, the same equations. Dec. 13, 2012 Tr. at 4402:25-4403:3 (Dobbs).

305 New York Rebuttal Testimony at 16:8-9 (NYSR00414); see also Dec. 13, 2012 Tr. at 4338:10-4339:2 (Degeneff).

306 Dec. 13, 2012 Tr. at 4398:2-6 (Dobbs) (Electrical cable serves one purpose. Its transport. It doesnt change what its transporting in any way, and connections have the same function. Its just to transport, transport

entering the transformer is not the same as the voltage and current coming out of it, as it is in a cable.307 Third, although the flow of current through the cable creates a magnetic field around the cable, it is incidental tonot necessary tothe performance of the cables intended function.308 The cable in no way manipulates that magnetic flux (which is external to the cable) in the way that a transformer manipulates its internal magnetic field.309 Indeed, power plant cables are intentionally routed to minimize any magnetic coupling between the cables.310 117.

In sum, New Yorks analogy between a transformer and a cable (or two cables in parallel) is not a valid one. In the 1995 License Renewal SOC, the Commission stated that cables are properly categorized as passive because they perform their intended function without moving parts or without a change in configuration or properties and the effects of aging degradation for these components are not readily monitorable.311 In contrast, a transformers electromagnetic properties change in a readily monitorable way as it performs the active function of transforming input voltage and current to some other form or value of voltage and current.312 118.

Transformers vs. AMR-Included Heat Exchangers, Steam Generators, Reactor Vessels, and Containments. Dr. Degeneff also sought to compare a transformer to several other electricity.); see id. at 4377:9-13 (Ray) (So electrical cable, the purpose is to transmit power, essentially voltage and current.).

307 Id. at 4342:18-4343:3 (Degeneff) (What flows in the primary, that path is different than what flows in the secondary....); id. at 4351:23-24 (Ray) ([F]or a transformer I wouldnt say that its the same set of electrons.); id. at 4355:8-13 (Mathew) ([T]he core is the main collecting point where electric energy is input into the primary of a transformer and that electrical energy is converted to magnetic energy. And the magnetic energy is converted back to electrical energy.).

308 Id. at 4398:9-12 (Dobbs) (It does develop a magnetic flux, but the flux is not inside in the cable, nor is it required for the cable to perform its intended function.); Entergy Testimony at 67 (A77) (ENTR00091).

309 Dec. 13, 2012 Tr. at 4398:25-4400:16 (Dobbs) (A cable has a magnetic field around it, simply because of the current flowing through it.).

310 Id.; Entergy Testimony at 67 (A77) (ENTR00091).

311 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016). In particular, the Commission noted that

[t]he major concern is that failures of deteriorated cable systems (cables, connections, and penetrations) might be induced during accident conditions. Id.

312 Entergy Testimony at 109 (A118) (ENTR00091).

AMR-included components, including a heat exchanger, steam generator, reactor vessel, and containment structure.313 Dr. Degeneff contended that all of these components contain external materials (fluid or nuclear fuel) that undergo a change in properties or state; however, the components themselves do[] not change properties, configuration or state.314 For example, Dr. Degeneff stated that when liquid is converted to steam in a steam generator, the liquid undergoes a change in state and properties, but the steam generator is still considered passive.315 Dr. Degeneff, in essence, argued that a component is not considered active simply because the external materials moving through the component change configuration, properties, or state. In his view, this is true of a transformer because the electricity traveling through the transformer may change magnitude, but the component itself does not change.316 119.

The Board finds Dr. Degeneffs comparisons of a transformer to these AMR-included components to be flawed in multiple respects. First, as we have noted, electricity does not move through a transformer in the way postulated by Dr. Degeneff. 317 Second, as Dr. Dobbs observed, the 1995 License Renewal SOC is explicit in explaining that the components cited by Dr. Degeneff are on the AMR-included list are considered passive because they function as pressure-retaining boundaries, but a transformer does not have a pressure-retaining boundary intended function or any other inherently passive function.318 Third, fluid 313 See id. at 72-73 (A79); New York Direct Testimony at 20:4-23 (NYSR00003).

314 New York Rebuttal Testimony at 28:1-5 (NYSR00414).

315 Id. at 28:5-9; Dec. 13, 2012 Tr. at 4359:25-4360:6 (Degeneff).

316 New York Rebuttal Testimony at 28:12-15 (NYSR00414).

317 Dec. 13, 2012 Tr. at 4457:22-25 (Dobbs) ([N]one of the electrons or current that flows into the primary comes out of the secondary.).

318 Id. at 4405:12-17 (Dobbs) (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,477 (NYS000016)) (The SOC very specifically points out that pressure-retaining boundaries is a passive function.); see also 1995 License Renewal SOC, 60 Fed. Reg. at 22, 471 (NYS000016) (stating that passive functions, such as pressure boundary and structural integrity, are generally verified indirectly, by confirmation of physical dimensions or

dynamics and electromagnetism are two different scientific fields that are governed by different physical laws and mathematical equations, and broad analogies between the two fields are prone to error.319 For all of these reasons, we find that Dr. Degeneffs comparison between a transformer and the identified AMR-included components is incorrect.

120.

Transformers vs. AMR-Excluded Transistors. A transistor is a three-terminal device, used to control current flow. In many cases, a small amount of current in the input circuit can control a much larger current in the output circuit.320 Transistor operation involves applying external voltages to bias the transistor into the desired state.321 Biasing the transistor causes charge promotion and migration in the silicon, so as to allow for control of current flow through the device.322 The transistors resistivity is determined by the ratio of the electric field to the current density.323 121.

Dr. Degeneff claimed that transistors are unlike transformers because: (1) a transistor is designed to change its resistivity, which he equated to a change in its properties;324 (2) the transistor cannot change the properties of the power flowing through it unless it also changes its own resistivity;325 and (3) the change in resistivity that occurs in the semiconductor device can be thought of as a valve whose position may be changed through an external electric component physical condition); id. at 22,477 (All pressure retaining boundaries necessary for the performance of the intended functions delineated § 54.4 would be subject to an aging management review.).

319 Dec. 13, 2012 Tr. at 4402:25-4403:3 (Dobbs) ([T]he field of fluid dynamics and the field of electromagnetics are very different fields, that they are not subject to the same rules, the same equations.).

320 Entergy Testimony at 73-74 (A80) (ENTR00091).

321 Id. at 74 (A80).

322 Id.

323 Id. at 74 (A82).

324 New York Rebuttal Testimony at 28:20-29:2 (ENTR00414).

325 New York Direct Testimony at 21:20-22 (NYSR00003); Dec. 13, 2012 Tr. at 4432:13-16 (Degeneff).

stimulus.326 Dr. Degeneff asserted that these sorts of characteristics were not present in a transformer.327 122.

Those, however, are not valid distinctions. As Dr. Dobbs explained, the change in resistivity described by Dr. Degeneff is directly analogous to the change in the magnetic field inside a transformer.328 Transistors perform their function by internal electric fields that change with the external bias, the input signal, or the load demands.329 In like manner, transformers perform their function by an internal magnetic field that changes with changes in the voltage and current supplied by the source and the current demand of the load.330 Also, like a transformer, the physical characteristics of a transistor are independent of the applied power.331 Specifically, the internal structure of a transistor is set at the time of construction and determines how it transforms the voltages and currents that are applied to it.332 Thus, just as the turns ratio of a transformer does not vary during operation, the internal structure of a transistor does not vary during operation.333 326 New York Direct Testimony at 21:22-22:2 (NYSR00003).

327 Id. at 22:20-23:10.

328 Entergy Testimony at 74-75 (A82) (ENTR00091).

329 Id.

330 Id. at 34-36 (A54), 74-75 (A82).

331 The presence of a control voltage (i.e., controlling a large amount of power using a small amount of power) for a transistor is irrelevant, as is any argument that an electrical device must switch large currents, change/amplify power, change conductance, or change output power based on a control input to be considered active under Part 54. Id. at 78 (A86). As Dr. Dobbs noted, circuit boards, batteries, battery chargers, and power supplies all are on the AMR-excluded list, yet none of these components necessarily perform such functions 332 Id. at 76 (A84) (ENTR00091).

333 Id.

123.

The changing parameters in both cases are the internal electromagnetic fields.334 The fields present in transistors and transformers are totally dependent upon externally applied voltages and currents and vary during operation, as is visible in their terminal voltages and currents.335 That is, in their natural states, both transistors and transformers are dead. The electromagnetic fields required for each components operation are powered from external sources.336 124.

To perform their intended functions, transistors and transformers must be placed in a circuit with other components.337 Both transistors and transformers respond to external voltages, currents, and changes in load, and the electromagnetic fields in both devices vary in time during operation.338 The transistors changing resistivity and the transformers changing magnetism are both created and observed at the electrical terminals of the components where the voltages and currents vary during operation.339 Thus, operation of a transformer or a transistor can be readily observed at its external terminals as it operates.340 125.

In short, the Board rejects New Yorks proposed distinction between transformers and AMR-excluded transistors.

334 See Dec. 13, 2012 Tr. at 4337:4-12 (Dobbs) (discussing the electric field inside a transistor and the magnetic field inside a transformer).

335 Entergy Testimony at 76 (A84) (ENTR00091).

336 Id. at 80 (A90).

337 Id.; see also Stephen E. Dobbs, Examples of Transistor and Transformer in Simplified Circuits (ENT000111)

(showing examples of transistors and transformers in simplified circuits).

338 Entergy Testimony at 80 (A90) (ENTR00091).

339 Id. at 78 (A86), 80 (A90). In this regard, the relationships of (1) the output voltage to the input voltage and (2) the output current to the input current can be similarly expressed for both devices. For a transformer circuit, VOUT = (Turns Ratio) x VIN, and for a transistor circuit, VOUT = (Voltage Gain) x VIN. For a transformer circuit, IOUT = [1 / (Turns Ratio)] x IIN, and for a transistor circuit, IOUT = (Current Gain) x IIN.

340 Id. at 81 (A91); Dec. 13, 2012 Tr. at 4337:8-12 (Dobbs) (You cannot observe the magnetic field inside a transformer just like you cannot observe the electric field inside a transistor. The fact that they are there and that they are operating is only measurable at the terminals.), 4431:4-10 (Degeneff) (stating that transformers and transistors are both characterized by their terminal characteristic, voltage and current, that occur at their terminals).

126.

Transformers vs. Other AMR-Excluded Electrical Components. With respect to a number of other AMR-excluded electrical componentsprincipally power inverters, power supplies, battery chargers, and circuit boardsDr. Degeneff argued that they were materially different than transformers because the external controls on such devices cause them to change state, thereby making them active components.341 But as Dr. Dobbs explained, how much control is or is not present is irrelevant to classification of a power inverter or power supply as active and AMR-excluded within the meaning of 10 C.F.R. Part 54:

When I look at [a power supply and a power inverter] and look at a transformer, what I see is a component that [has] an AC voltage and current input, that has been transformed to a different voltage and current output at the output. So I look at that and say those are very similar. Theyre components. They have very well-defined electrical functions, and those functions can be monitored at the electrical terminals. Therefore, I say a transformer is very much like the components that are AMR-excluded, as shown [in Figure 2 of Entergy prefiled testimony].342 The relevant consideration is that the terminal voltages and currents of these AMR-excluded components change as they perform their intended functions (transformation of the input voltage and current to some other form and/or value of voltage and current) and can be directly measured and observed.343 127.

Dr. Degeneff also suggested that power inverters, power supplies, battery chargers, and circuit boards are considered active devices because they have solid state devices that allow them to change state from a conductor to an insulator or from an insulator to a 341 New York Direct Testimony at 26:18-27:8 (NYSR00003).

342 Dec. 13, 2012 Tr. at 4395:10-21 (Dobbs); see also Entergy Testimony at 80-86 (A91-95) (ENTR00091).

343 See Dec. 13, 2012 Tr. at 4391:22-25 (Dobbs) (Therefore, the terminal characteristics that can be easily monitored and project the health of the component, must be the reason why it was classified as AMR-

[excluded].); see also Entergy Testimony at 81 (A91) (ENTR00091).

conductor.344 However, as Dr. Dobbs testimony makes clear, this argument has no support (explicit or implicit) in 10 C.F.R. § 54.21(a)(1)(i) or the 1995 License Renewal SOC.345 In short, we find persuasive Dr. Dobbs point that power inverters, circuit boards, battery chargers and power supplies are included in the AMR-excluded list without qualificationi.e., their exclusion from AMR is not tied to any detail of how they are constructed, for example, whether they include solid-state devices.346 From an electrical engineering perspective, the only thing common to all of these electrical components is that each has electrical properties that change as the component performs its intended function, and those changes can be directly measured or observed at the components terminals.347 128.

Based on the totality of the parties testimony and evidence, the Board finds that Entergy and the NRC Staff have presented more persuasive technical arguments. A transformer is more similar to other electrical components in the AMR-excluded list because its terminal voltages and currents change as the transformer performs its intended function and can be directly measured or verified. Accordingly, the Board finds that, because transformers perform their intended function of voltage transformation through a readily measured change in their electromagnetic properties (magnetic field and terminal voltages and currents), they are properly excluded from AMR under 10 C.F.R. § 54.21(a)(1)(i).

344 New York Direct Testimony at 28:15-22 (NYSR00003).

345 Entergy Testimony at 84 (A95) (ENTR00091); see Dec. 13, 2012 Tr. at 4390:22-23 (Dobbs) (stating that the presence of solid-state devices is not mentioned in the SOC nor the regulation).

346 Dec. 13, 2012 Tr. at 4390:23-25 (Dobbs) (Since [solid-state devices are] not mentioned, they cannot be a reason for classification.).

347 Id. at 4390:5-12 (Dobbs) (So it is the terminal characteristics that you can monitor, that tells you what is going on inside that battery, and all of these items that are on the right side have those terminal characteristics, as does the transformer....).

I.

Transformer Operation and Performance Are Governed by 10 C.F.R. Part 50 Requirements and Subject to Ongoing NRC Regulatory Oversight 129.

The exclusion of transformers from AMR under the NRCs Part 54 regulations in no way suggests a void in the NRCs regulatory framework. As Entergy and the NRC Staff explained, the effects of aging on the intended functions of transformers are directly addressed through CLB programs and requirements under 10 C.F.R. Part 50.348 130.

The CLB for all NRC-licensed operating nuclear power plants includes 10 C.F.R. § 50.65, also known as the maintenance rule.349 Transformers and activities related to transformer monitoring and maintenance activities are within the scope of equipment and activities governed by 10 C.F.R. § 50.65.350 131.

Section 50.65 requires that licensees monitor the performance or condition of SSCs against licensee-established goals to provide reasonable assurance that such SSCs are capable of fulfilling their intended functions.351 Mr. Mathew of the NRC Staff briefly summarized the rules requirements as follows:

[T]ransformers are included in part of the maintenance rules scope.

So licensees are supposed to establish performance goals for these transformers in terms of functional performance and they have to monitor and manage it through Preventive Maintenance Program. If you look at the maintenance rule, you have subsection (a)(1), (a)(2),

and (a)(3); (a)(2) is the normal performance monitoring you do with the Preventive Maintenance Program.... If the transformers are degraded and they cannot meet the performance, the maintenance rule (a)(1) says you have to put it under that program, under that 348 Id. at 4242:20-21 (Ray) (So we rely on the maintenance rule to track the aging degradation.) see also Entergy Testimony at 87 (A96) (ENTR00091); NRC Staff Testimony at 18-20 (A26) (NRC000031).

349 Entergy Testimony at 87 (A96) (ENTR00091); see also Dec. 13, 2012 Tr. at 4242:20-21 (Ray).

350 Entergy Testimony at 87 (A96) (ENTR00091); Dec. 13, 2012 Tr. at 4247:4-5 (Mathew); see generally 1995 License Renewal SOC, 60 Fed. Reg. at 22,470-71 (NYS000016).

351 Entergy Testimony at 87 (A96) (ENTR00091).

subsection and you have to take corrective action until the performance goal is achieved.352 132.

Section 50.65(a)(3) requires periodic re-evaluations (at least every 24 months) that include reviews of plant and industry-wide operating experience.353 Licensees are required to make adjustments where necessary to ensure that the objective of minimizing failures of SSCs through maintenance is appropriately balanced against the objective of minimizing unavailability of SSCs due to monitoring or preventive maintenance.354 133.

Transformers that supply power to safety-related systems and components are required to conform to requirements that are part of the CLB for operating nuclear power plants.

For example, 10 C.F.R. Part 50, Appendix A, General Design Criteria for Nuclear Power Plants, includes criteria applicable to electrical systems that focus on system design, independence, and redundancy (Criterion 17), and periodic inspection and testing (Criterion 18).

10 C.F.R. Part 50, Appendix B, Quality Assurance Criteria for Nuclear Power Plants and Fuel Reprocessing Plants, establishes quality assurance requirements applicable to all activities affecting the safety functions of those SSCs, including designing, inspecting, testing, operating, maintaining, repairing, and modifying the SSCs.355 The procedures and processes used to evaluate any degraded performance and implement corrective action(s) are governed by the criteria in Appendix B to 10 C.F.R. Part 50.356 352 Dec. 13, 2012 Tr. at 4247:4-20 (Mathew); see also id. at 4255:18-24 (McCaffrey) (describing Entergys recent use of the trending and corrective action processes to identify and correct an issue associated with a large power transformer).

353 Entergy Testimony at 94 (A104) (ENTR00091).

354 Dec. 13, 2012 Tr. at 4302:9-12 (Mathew) (The maintenance rule requires to monitor the performance of transformers for degradation. You take corrective actions in accordance with 50.65. That is the only requirement.); Entergy Testimony at 94 (A104) (ENTR00091).

355 Entergy Testimony at 87-88 (A97) (ENTR00091).

356 Id.

134.

Transformer-related maintenance, performance monitoring, and corrective actions must be documented in accordance with NRC records and reporting requirements.357 Section 50.71 requires NRC licensees to maintain records and make reports to the NRC; Section 50.72, requires licensees to report certain plant events and conditions; and Section 50.73 requires licensees to report the occurrence of defined events to the NRC through licensee event reports (LERs).358 Depending on the specific circumstances, transformer performance degradation or failure of safety-related and non safety-related transformers would be reportable under one or more of those regulations.359 135.

The NRC routinely inspects licensee maintenance programs and activities. For example, NRC Inspection Procedure 71111.12, Maintenance Effectiveness (Apr. 29, 2011)

(ENT000112), is used, in part, to verify that licensees are appropriately addressing SSC performance or condition problems within the scope of the maintenance rule.360 136.

Further, electrical transformers are subject to NRC oversight programs or initiatives that apply to all licensees. For example, transformer performance has been the subject of operating event reports, NRC evaluations, and NRC generic communications (e.g., bulletins, information notices) as part of the current regulatory process since 1979.361 The numerous examples cited by Entergy demonstrate that transformer performance, transformer degradation, 357 Id. at 88 (A97).

358 Id.

359 Id.

360 Id. at 87 (A96) (citing NRC Inspection Procedure 71111.12, Maintenance Effectiveness (Apr. 29, 2011)

(ENT000112)); cf. Dec. 13, 2012 Tr. at 4231:15-23 (Craig) ([W]hen you think about all of the activities that comprise the regulatory oversight process... the Commission and the staff conclude[] that that provides an adequate level of safety.).

361 Entergy Testimony at 88-90 (A98) (ENTR00091); cf. Dec. 13, 2012 Tr. at 4231:15-23 (Craig) (describing regulatory oversight process related to the CLB as adequate to provide an adequate level of safety).

and the effectiveness of industrys transformer maintenance activities have been, and continue to be, part of the ongoing NRC regulatory process for operating reactors, including IP2 and IP3.362 J.

Alleged Deficiencies in Entergys 10 C.F.R. Part 50 Transformer Monitoring and Maintenance Programs Do Not Mandate Implementation of a 10 C.F.R. Part 54 AMP 137.

Dr. Degeneff asserted that the high incidence of transformer failures at nuclear facilities in the last few years is indisputable evidence that the Part 50 regulatory framework is inadequate for monitoring aging degradation and preserving the functionality of transformers.363 He contended that these events are evidence that Part 50 requirements alone are not effective at preventing transformer failures, stating that [t]he recent history of transformer failure shows that the maintenance rule is insufficient, on its own, to provide this reasonable assurance.364 Dr. Degeneff opined that mandating an AMP for transformers under 10 C.F.R. Part 54 would force licensees to take additional preventive measures to compensate for the alleged deficiencies in the current Part 50 programs.365 138.

The Board declines to accept this argument for several reasons. The substance of the criticisms of Entergys IPEC-specific monitoring and maintenance are rejected for the reasons described in the next section. As a threshold matter of regulatory and legal sufficiency, however, such an argument raises CLB and other issues that are beyond the scope of this license renewal proceeding, and New York seeks relief that the Board is not authorized to grant.366 362 Entergy Testimony at 95-96 (A107), 105-106 (A115) (ENTR00091).

363 New York Rebuttal Testimony at 34:1-5 (NYSR00414). As support, Dr. Degeneff cited NRC Information Notice No. 2009-10, Transformer Failures - Recent Operating Experience (July 7, 2009) (IN 2009-10)

(NYS000019). New York Rebuttal Testimony at 34:5-12 (NYSR00414). In addition to IN 2009-10, Dr. Degeneff cited other examples of transformer failures at nuclear power plants, including main transformer failures that occurred at IP2 (in 2010) and IP3 (in 2007). Dec. 13, 2012 Tr. at 4299:8-9 (Degeneff).

364 New York Rebuttal Testimony at 37:20-22 (NYS000414) (emphasis added).

365 Id. at 34:23-35:3.

366 See Turkey Point, CLI-01-17, 54 NRC at 10 (Adjudicatory hearings in individual license renewal proceedings will share the same scope of issues as our NRC staff review, for our hearing process (like our staffs review)

139.

Furthermore, insofar as Dr. Degeneff suggests that Entergy is not taking adequate measures under its current license to address transformer failures, his argument also runs counter to 10 C.F.R. § 54.30, Matters not subject to a renewal review. That regulation states:

(a) If the reviews required by § 54.21(a) or (c) show that there is not reasonable assurance during the current license term that licensed activities will be conducted in accordance with the CLB, then the licensee shall take measures under its current license, as appropriate, to ensure that the intended function of those systems, structures or components will be maintained in accordance with the CLB throughout the term of its current license.

(b) The licensees compliance with the obligation under Paragraph (a) of this section to take measures under its current license is not within the scope of the license renewal review.367 140.

Thus, even assuming, arguendo, that Entergys CLB programs for transformer maintenance or monitoring are deficient (which we do not find to be the case, as described further below), this license renewal adjudication is not the proper forum for addressing such deficiencies.

141.

In a related vein, Dr. Degeneff asserted that the sufficiency of plant programs or activities required by the maintenance rule is not relevant to determining whether a component qualifies for AMR.368 In essence, he contended that because 10 C.F.R. § 54.21 does not necessarily examines only the questions our safety rules make pertinent.). Insofar as Dr. Degeneffs statement that the maintenance rule is insufficient, on its own might be construed as challenge to the adequacy of that regulation (10 C.F.R. § 50.65), such challenges are not permitted in NRC adjudicatory proceedings absent a waiver of the regulations application pursuant to 10 C.F.R. § 2.335. 10 C.F.R.

§ 2.335(b); Duke Energy Corp. (McGuire Nuclear Station, Units 1 & 2; Catawba Nuclear Station, Units 1 &

2), LBP-02-4, 55 NRC 49, 63 (2002) (stating that there are some matters that fall outside the Boards jurisdiction and authority, including any challenge to a Commission rule, but for which there are other avenues through which Petitioners may seek relief, including filing an enforcement petition under 10 C.F.R.

§ 2.206, a rulemaking petition under 10 C.F.R. § 2.802, or a request to the Commission under 10 C.F.R.

§ 2.758 to make an exception or waive a rule based upon special circumstances).

367 10 C.F.R. § 54.30(a)-(b) (emphasis added).

368 New York Rebuttal Testimony at 33:21-23 (NYS000414).

expressly cite the maintenance rule as a basis for excluding components from AMR, some components subject to the maintenance rule still may require an AMP under Part 54.369 142.

The Board rejects Dr. Degeneffs position because it is fundamentally inconsistent with the Commissions Part 54 regulatory framework, which credits existing licensee programs implemented to meet the requirements of the maintenance rule.370 As discussed in the 1995 License Renewal SOC, the NRCs Part 50 regulations require licensees to develop and implement programs that ensure that conditions adverse to quality, including degraded SSCs, are promptly identified and corrected.371 Those licensee programs include self-inspection, maintenance, and technical specification surveillance programs that monitor and test the physical condition of plant SSCs (including transformers).372 143.

Importantly, the SOC states that the Part 54 requirements reflect a greater reliance on existing licensee programs that manage the detrimental effects of aging on functionality, including those activities implemented to meet the requirements of the maintenance rule.373 The SOC thus reflects the Commissions clear intent to more fully integrate the maintenance rule 369 Id. at 33:18-23.

370 See 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (NYS00016) ([T]he requirements in this rule reflect a greater reliance on existing licensee programs that manage the detrimental effects of aging on functionality, including those activities implemented to meet the requirements of the maintenance rule.); Turkey Point, CLI-01-17, 54 NRC at 10 (quoting 1991 License Renewal Revisions, 56 Fed. Reg. at 64,945) (stating that NRCs ongoing oversight is sufficiently broad and rigorous to establish that the added discipline of a formal license renewal review against the full range of current safety requirements would not add significantly to safety, and.

.. such a review is not needed to ensure that continued operation during the period of extended operation is not inimical to the public health and safety).

371 Entergy Testimony at 23 (A35) (ENTR00091) (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,475 (NYS000016)).

372 Id.

373 Id.; see also Dec. 13, 2012 Tr. at 4242:9-4243:3 (Ray) ([W]e rely on the maintenance rule to track the aging degradation.).

and the license renewal rule,374 as well as the Commissions deliberate shift in focus from managing aging mechanisms to managing the effects of aging on functionality.375 144.

In crediting the maintenance rule to address potential degradation of active structures and components, the Commission concluded that a Part 54 AMR is not required for structures and components that already are covered by maintenance rule programs and activities.

Because the intent of the license renewal rule and the maintenance rule is similar (ensuring that the detrimental effects of aging on the functionality of important systems, structures, and components are effectively managed), the Commission has determined that the license renewal rule should credit existing maintenance activities and maintenance rule requirements for most structures and components....[T]he requirements in this rule reflect a greater reliance on existing licensee programs that manage the detrimental effects of aging on functionality, including those activities implemented to meet the requirements of the maintenance rule.376 145.

The Commission further stated that the existing regulatory process, current licensee programs and activities, and the maintenance rule provide the basis for generically excluding structures and components that perform active functions from AMR.377 The AMR for license renewal focuses on passive structures and components that perform intended functions.

This fact is reflected in 10 C.F.R. § 54.21(a)(1). Thus, the license renewal rule is intended to assure the management of aging effects on structures and components that cannot be generically excluded from AMR.378 374 Entergy Testimony at 23 (A35) (ENTR00091) (quoting 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (NYS000016)).

375 Id. (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,475-76 (NYS000016)).

376 1995 License Renewal SOC, 60 Fed. Reg. at 22,471 (emphasis added) (NYS000016); see also Dec. 13, 2012 Tr. at 4242:9-4243:3 (Ray) ([W]e rely on the maintenance rule to track the aging degradation.).

377 1995 License Renewal SOC, 60 Fed. Reg. at 22,476 (NYS000016).

378 Entergy Testimony at 23-24 (A36) (ENTR00091).

146.

Finally, two additional points bear emphasis. First, like the maintenance rule, Part 54 focuses on component functionality, not on managing any and all postulated or potential aging mechanisms.379 This was a point of emphasis in the Commissions 1995 revisions to Part 54.380 The Commission expressly concluded that the focus on identification of aging mechanisms is not necessary because regardless of the aging mechanism, only those that lead to degraded component performance or condition (i.e., potential loss of functionality) are of concern.381 New Yorks witness, Dr. Degeneff, ultimately conceded this point.382 147.

Second, NRC regulations require reasonable assurance that SSCs are capable of performing their intended functions.383 They do not require applicants for initial or renewed operating licenses to prevent all transformer failures, as Dr. Degeneff also acknowledged.384 Indeed, the NRCs 10 C.F.R. Part 50 design requirements assume that transformer and other component failures may occur and, for that reason, include requirements for independence, redundancy, and diversity as part of the NRCs defense-in-depth approach to providing reasonable assurance.385 379 Id. at 99 (A111) (ENTR00091).

380 Id. (citing 1995 License Renewal SOC, 60 Fed. Reg. at 22,461, 22,471, 22,475-76 (NYS000016)).

381 Id. (quoting 1995 License Renewal SOC, 60 Fed. Reg. at 22,461, 22,471, 22,488 (NYS000016)).

382 See New York Rebuttal Testimony at 36:23-37:2 (NYSR00414) (I am arguing that an AMP is necessary to detect degradation that can cause the loss of transformer functionality.); id. at 37:15- (I do not believe an AMP is needed to detect all aging effects, but to detect degradation that can lead to failure of the transformer and related systems.).

383 Entergy Testimony at 107 (A117), 109 (A118) (ENTR00091).

384 Id. at 95-96 (A107); New York Rebuttal Testimony at 37:17-20 (NYS000414).

385 Entergy Testimony at 95-96 (A107) (ENTR00091); Dec. 13, 2012 Tr. at 4236:19-4237:8 (Mr. Craig)

(explaining that activities performed at the plant are intended to ensure an adequate level of protection is preserved).

K.

New Yorks Criticisms of Entergys IPEC-Specific Transformer Monitoring and Maintenance Programs Lack Merit 148.

Although the Board already has determined that transformers are properly excluded from AMR under 10 C.F.R. Part 54, it addresses one additional line of argument advanced by New York and Dr. Degeneff. Specifically, Dr. Degeneff claimed that age-related degradation in transformers will not be observable through changes in the operating characteristics of a transformer during its normal operation, because [m]any kinds of age related degradation are undetectable without complex testing.386 Dr. Degeneff suggested that invasive, expensive and time consuming procedures, such as the oil removal and internal inspections of transformers, are necessary.387 149.

Dr. Degeneff focused his criticisms on Entergys maintenance and monitoring practices for large oil-filled transformers. During the hearing, Mr. McCaffrey, the IPEC Design Engineering Manager, provided clarification as to which IP2 and IP3 transformers are encompassed by Contention NYS-8, and which of those transformers are oil-filled.388 As admitted, NYS-8 asserts that an AMP should be required for safety-related electrical transformers that are required for compliance with 10 C.F.R. §§ 50.48 and 50.63.389 150.

A safety-related SSC is one relied upon to remain functional during and following design basis events to assure: (1) the integrity of the reactor coolant pressure boundary; (2) the capability to shut down the reactor and maintain it in a safe shutdown condition; or (3) the capability to prevent or mitigate the consequences of accidents that could result in potential 386 New York Direct Testimony at 29:7-8 (NYSR00003).

387 Degeneff Report at 32 (NYSR00005).

388 Dec. 13, 2012 Tr. at 4455:17-23 (McCaffrey).

389 Indian Point, LBP-08-13, 68 NRC at 89.

offsite exposures comparable to the applicable guideline exposures set forth in 10 C.F.R.

§§ 50.34(a)(1), 50.67(b)(2), or 100.11, as applicable.390 151.

As Mr. McCaffrey explained, unlike many other plants, there are no safety-related transformers at IPEC due to the stations electrical configuration.391 The power that IP2 and IP3 are required to have in the event of an accident is at the same voltage level as the loads that are used in the event of an accident, such that there is no need to transform (i.e., step down) the power from the source voltage level to the load voltage level.392 Specifically, at IP2 and IP3, the emergency safeguard loads are fed from the 480 volt bus.393 The emergency diesel generators directly feed the 480 volt bus.394 Accordingly, there are no transformers at IP2 or IP3 that fall within the scope of NYS-8, as admitted and read literally.

152.

10 C.F.R. § 50.48, Fire protection, sets forth the NRCs fire protection requirements for operating nuclear power plants.395 10 C.F.R. § 50.63, Loss of all alternating current power, requires operating nuclear power plants to be able to withstand for a specified duration and recover from a station blackout as defined in 10 C.F.R. § 50.2 and specifies other related requirements.396 153.

As McCaffrey further explained, at IP2, there are seven transformers required for compliance with 10 C.F.R. § 50.63, and no transformers required for compliance 10 C.F.R.

390 Entergy Testimony at 15 (A26) (ENTR000091); see also 10 C.F.R. § 50.2 (defining safety-related)).

391 Dec. 13, 2012 Tr. at 4453:14-16 (McCaffrey).

392 Id. at 4453:7-9 (McCaffrey).

393 Id. at 4452:16-22 (McCaffrey).

394 Id.

395 Entergy Testimony at 7 (A15) (ENTR00091).

396 Id.

§ 50.48.397 Only one of the seven transformers, the IP2 station auxiliary transformer, is oil-cooled.398 154.

At IP3, there are two transformers required for compliance with 10 C.F.R. § 50.48 and seven transformers required for compliance with 10 C.F.R. § 50.63.399 Of these nine transformers, only two are oil-cooled.400 The two oil-filled transformers are the IP3 station auxiliary transformer and the IP3 gas turbine (GT) autotransformer.401 155.

Although three of the IP2 and IP3 transformers required for compliance with 10 C.F.R. §§ 50.48 and 50.63 are oil-filled transformers (which are the focus of Dr. Degeneffs testimony on transformer monitoring and maintenance), those transformers do not perform a safety function, and are therefore outside the scope of NYS-8, as admitted.402 The main transformers at IPEC are not within the scope of NYS-8.403 In fact, because main transformers in general do not perform a license renewal intended function as defined in 10 C.F.R. § 54.4, they are not within the scope of any license renewal proceeding.404 The 2007 and 2010 IPEC transformer failures cited by Dr. Degeneff involved main transformers.405 156.

Nevertheless, in response to Dr. Degeneffs concerns, Mr. McCaffrey explained that Entergy has implemented preventive maintenance and performance monitoring programs at 397 Dec. 13, 2012 Tr. at 4455:2-4 (McCaffrey).

398 Id. at 4455:20-21 (McCaffrey).

399 Id. at 4455:11-12 (McCaffrey).

400 Id. at 4455:22-23 (McCaffrey).

401 Entergy Testimony at 97 (A108) (ENTR00091).

402 Id. at 98 (A109).

403 Dec. 13, 2012 Tr. at 4301:18-22 (Craig).

404 Id. at 4265:9-19 (Mathew); see also id. at 4302:16-20 (Mathew).

405 See id. at 4438:18-22, 4440:6-7 (Degeneff).

IPEC to manage the effects of aging on transformers, as required by 10 C.F.R. Part 50.406 Those programs are intended to ensure plant reliability by identifying and correcting any potential degradation issues, including age-related degradation associated with active systems and components, including electrical transformers.407 The maintenance rule requires biennial evaluations of performance and condition monitoring activities and associated goals and preventive maintenance activities, including reviews of relevant operating experience.408 157.

Entergy uses industry standard preventive and predictive maintenance techniques on its large oil-filled transformers at IPEC.409 For example, predictive and preventive maintenance techniques include monitoring or assessment of power factor, winding insulation resistance, capacitance, sweep frequency response analysis, leakage reactance, excitation current, transformer turns ratio, winding resistance, corona scan, hot collar (on applicable bushings), oil quality, oil dissolved gas analysis, furanic compound analysis in oil, and thermography.410 Entergy also performs visual inspections and cleaning of such transformers.411 Finally, Entergy also performs predictive and preventive maintenance on dry-type (air-cooled) transformers, including visual inspections and cleaning, insulation resistance measurement, and winding 406 Entergy Testimony at 97 (A108) (ENTR00091); Dec. 13, 2012 Tr. at 4269:16-19 (McCaffrey) (We do perform those tests online, and we do have an installed online gas monitor for large power or main transformers that does it continuously.).

407 Entergy Testimony at 96-97 (A108) (ENTR00091).

408 Id. at 94 (A104) (quoting 10 C.F.R. § 50.65(a)(3)).

409 Id. at 97 (A108); see Dec. 13, 2012 Tr. at 4249:18-23 (Mathew) (listing the different techniques used on IPECs transformers).

410 Entergy Testimony at 96-98 (A108) (ENTR00091); Dec. 13, 2012 Tr. at 4253:12-25 (McCaffrey).

411 Entergy Testimony at 97 (A108) (ENTR00091); see also Entergy Fleet Engineering Guide EN-EE-G-001, Large Power Transformer Inspection Guidelines, Rev. 2 (Mar. 31, 2011) (ENT000121).

resistance measurement.412 Thus, contrary to New Yorks claim, Entergy does not rely solely on remote monitoring of transformers.413 158.

Table 4 of Entergys prefiled testimony, explains how these specific tests or analysis techniques address each of the aging degradation mechanisms cited by Dr. Degeneff.414 At hearing, Entergy witness McCaffrey provided further explanation and described which tests or analyses are performed when the transformer is in service and out of service.415 He stated that power factor, capacitance, hot collar, excitation current, leakage current, transformer turns ratio, and winding resistance, insulation resistance, and sweep frequency response analysis tests typically are done when a transformer is out of service (e.g., for maintenance).416 These tests provide insights into the health of a transformers internal subcomponents.417 The corona scan, dissolved gas analysis, oil quality, furanic oil compound analysis, and thermography tests are typically performed while the transformer is in service.418 159.

Mr. McCaffrey and Mr. Rucker further explained why the invasive inspections advocated by Dr. Degeneff are unnecessary and run directly counter to transformer inspection guidelines issued by EPRI.419 In short, invasive inspections may be detrimental to transformer operation, because their performance in the field can introduce moisture and contaminants into 412 Entergy Testimony at 97 (A108) (ENTR00091); see also IPEC Maintenance Procedure 0-XFR-401-ELC Station Service and Load Center Transformers Outage Inspection (Apr. 5, 2007) (ENT000126).

413 See New York Direct Testimony at 40:14-42:9 (NYSR00003); Degeneff Report at 14 (NYSR00005).

414 Entergy Testimony at 103-04 tbl. 4 (A114) (ENTR00091); see also Dec. 13, 2012 Tr. at 4281:13-17 (McCaffrey) (stating that Entergy looks for corona or radial interference voltage through online gas monitoring and offline global electrical tests).

415 Dec. 13, 2012 Tr. at 4253:12-4254:4 (McCaffrey).

416 Id. at 4253:17-21 (McCaffrey).

417 Id. at 4253:23-25 (McCaffrey).

418 Id. at 4254:10-18 (McCaffrey).

419 Entergy Testimony at 100-02 (A113) (ENTR00091).

the transformer internals and oil.420 For that reason, they should be used only in limited circumstances and settings.421 According to Mr. McCaffrey, if ongoing monitoring and testing detect transformer degradation, then Entergy would perform an internal inspection of the transformer, as warranted, to determine and correct the cause of the problem.422 Such inspections, however, are not performed on a routine basis.

160.

In his prefiled rebuttal testimony, Dr. Degeneff asserted that the performance monitoring described in Table 4 of Entergys testimony is insufficient to maintain the functionality of aging transformers.423 However, at hearing, he expressed his approval of the types of monitoring techniques being used at IPEC. After hearing the testimony of Entergys witnesses, the Board asked Dr. Degeneff whether Entergy is using appropriate online and offline monitoring techniques. Dr. Degeneff replied: [T]he suite of measurements that theyre making, the measurements are fine. The frequency is whats of concern.424 161.

Accordingly, during the evidentiary hearing, the Board probed the basis for Dr. Degeneffs concern about the frequency of transformer testing and surveillance at IPEC.425 Dr. Degeneff first cited three major transformer failures in the last five years as evidence that Entergy is not testing its transformers with sufficient frequency.426 420 Id.

421 Id. at 100-101 (A113).

422 Dec. 13, 2012 Tr. at 4312:1-5 (McCaffrey).

423 New York Rebuttal Testimony at 42:4-43:15 (NYSR00414).

424 Dec. 13, 2012 Tr. at 4282:9-11 (Degeneff).

425 Id. at 4298:12-19 (Judge Wardwell) (Do you agree that the reasonable assurance standard does not require a license renewal applicant to provide absolute assurance that no failures within scope transformers will occur or that it would preclude all aging effects?).

426 Id. at 4299:8-13 (Degeneff).

162.

Mr. McCaffrey explained why that is not the case.427 Namely, the three transformer failures cited by Dr. Degeneff (one of which occurred at Entergys Fitzpatrick plant) did not result from age-related degradation or involve transformers that perform license renewal intended functions.428 163.

The first event (which is identified in the IN 2009-10 cited by New York),

happened on April 6, 2007, when a fault occurred on the IP3 No. 31 main transformer (a large oil-filled transformer).429 While this transformer performs no license renewal intended function, it is within the scope of the maintenance rule, which requires that appropriate corrective actions be taken when the performance or condition of an SSC does not meet established goals.430 In accordance with IPEC programs required by 10 C.F.R. Part 50, Entergy conducted a root cause analysis and instituted significant corrective actions in response to the event. Entergy determined the most probable cause of the event to be a design flaw in the transformer Phase B bushing (i.e., a GE condenser Type U bushing), not the effects of aging on the transformer.431 164.

As part of the corrective action process, Entergy (1) replaced the 31 main transformer with a spare transformer that uses a different bushing design; (2) performed testing and inspection on the 32 main transformer, the replacement transformer for the failed 31 main transformer, the unit auxiliary transformer, and high-voltage equipment; (3) established Doble acceptance criteria for large transformers and included the criteria in applicable documents; 427 Entergy Testimony at 105-06 (A115) (ENTR00091); Dec. 13, 2012 Tr. at 4300:20-4301:16 (McCaffrey).

428 Entergy Testimony at 105-06 (A115) (ENTR00091); Dec. 13, 2012 Tr. at 4300:20-4301:16 (McCaffrey).

429 Entergy Testimony at 105 (A115); Dec. 13, 2012 Tr. at 4300:23-4301:1 (McCaffrey); IN 2009-10, at 1 (NYS000019).

430 Entergy Testimony at 105 (A115) (ENTR00091).

431 Id. Bushings are insulating devices used on liquid-immersed transformers to insulate and seal the winding terminal connections through the grounded metal cover or sidewall of the transformer tank. Bushings insulate the primary and secondary windings from the tank. See also Dec. 13, 2012 Tr. at 4300:23-4301:1 (McCaffrey).

(4) revised applicable transformer preventive maintenance procedures to require engineering review and trending of test data and to specify acceptance criteria for power factor and capacitance testing; and (5) commissioned an independent failure analysis of the failed bushing to assess the need for any further corrective actions.432 165.

The second event occurred in November 2010 in the IP2 21 main transformer (also a large oil-filled transformer) as a result of the failure of main transformer B phase high-voltage bushing.433 While this transformer performs no license renewal intended function, it is within the scope of the maintenance rule.434 Entergy performed a root cause evaluation and determined that appropriate maintenance testing and analyses (including Doble testing and physical inspections) had been performed on the IP2 21 main transformer prior to the event, with no adverse trends or abnormalities noted.435 The faulty high-voltage bushing had a good operating history and no indications of degradation during predictive monitoring.436 In addition, when the 21 main transformer was installed in 2006, there was no known operating experience involving deficiencies associated with the high-voltage bushings supplied by the transformer vendor.437 166.

As part of the corrective action process, Entergy arranged for an independent equipment failure analysis of the failed bushing by the vendor.438 That analysis, which included 432 Dec. 13, 2012 Tr. at 4300:23-4301:1 (McCaffrey).(citing Fleet Engineering Guide, EN-EE-G-001, Rev. 2 (Mar. 31, 2011) (ENT000121) (EN-EE-G-001)).

433 Entergy Testimony at 106 (A115) (ENTR00091) (citing Root Cause Evaluation Report, IP2 Turbine Trip/Reactor Trip Due to 21 Main Transformer Fault, CR-IP2-2010-6801; Event Date: 11- 07-2010, Rev. 1 (Oct. 27, 2011) (ENT000130)).

434 Id.

435 Id.

436 Id.

437 Id.

438 Id.

electrical testing and bushing teardowns in the bushing manufacturers facilities, concluded that the bushing failure was due to a design/manufacturing weakness in the high-voltage bushing.439 Related corrective actions at IPEC included replacing affected main transformer bushings and increasing the frequency of electrical testing of the main transformers from once every four years to once every two years.440 As Mr. McCaffrey explained, the new once per two-year testing frequency actually exceeds industry recommendations.441 167.

The third event involved a 2012 main transformer failure at Entergys Fitzpatrick plant.442 Mr. McCaffrey testified that Entergys root cause analysis was still in progress, but that he did not believe the transformer failure to be age-related given that the transformer was only four years old.443 168.

The IPEC and Fitzpatrick transformer failures cited by Dr. Degeneff do not support his claim that a Part 54 AMP is necessary for IPEC transformers. None of the events involved transformers that perform license renewal intended functions or appears to have been caused by aging degradation.444 This conclusion is bolstered by the fact that Entergy took appropriate corrective actions, including adjusting its testing frequency, in accordance with 10 C.F.R. Part 50 requirements and applicable Entergy procedures.445 439 Id.; see also Dec. 13, 2012 Tr. at 4301:5-6 (McCaffrey).

440 Entergy Testimony at 106 (A115) (ENTR00091).

441 Dec. 13, 2012 Tr. at 4283:10-12 (McCaffrey) ([W]e reduced our frequen[c]y to two years, which is greater than the current industry experience for testing of bushings.).

442 Id. at 4301:7-16 (McCaffrey).

443 Id.

444 Dec. 13, 2012 Tr. at 4264:20-22 (McCaffrey) ([T]he transformer failures they discussed, they were not age-related transformer failures.), 4265:9-13 (Mathew) ([I]f you look at the license renewal scope, license renewal function, these main transformers are not required to perform any functions.).

445 Id. at 4309:9-12 (McCaffrey) (At IPEC based upon our experience [we] have increased our frequency based upon our internal OE and what weve seen in the industry....).

169.

In his rebuttal testimony, Dr. Degeneff also claimed that the rate of transformer failure at nuclear power plants across the country shows that the performance monitoring required by 10 C.F.R. Part 50 is insufficient to provide a reasonable assurance that transformer functionality will be maintained.446 Dr. Degeneff relied, in significant part, on NRC Information Notice 2009-10 as evidence of this increased failure rate.447 He attributed this failure rate to significant transformer failure modes that involve aging degradation of transformer components that do not affect transformer operating performance until the transformer fails.448 170.

The record, however, does not support the conclusion that recent industry operating experience involving large power transformers necessitates the creation of a Part 54 license renewal AMP. As Mr. Craig and Mr. Mathew testified, such transformers are within the scope of the maintenance rule, which requires that appropriate corrective actions be taken when the performance or condition of an SSC does not meet established goals.449 171.

In this regard, Information Notice 2009-10 states that the large transformers discussed therein are generally non-safety related and are within the scope of the Maintenance Rule.450 The NRC Staff did not conclude therein that current maintenance rule requirements are inadequate.451 Rather, it apprised licensees of recent operating experience involving large transformer failures so that they could review the information for applicability to their facilities and consider actions, as appropriate, to avoid similar events.452 As the record 446 New York Rebuttal Testimony at 42:4-7 (NYSR00414).

447 Id. at 34:5-12.

448 Id. at 42:7-10.

449 See Entergy Testimony at 105 (A115) (ENTR00091); Dec. 13, 2012 Tr. at 4247:15-20, 4302:9-12 (Mathew).

450 IN-2009-10 at 2 (NYS000019).

451 See generally id.

452 Id.; see also Dec. 13, 2012 Tr. at 4284:18-22 (Mathew) ([O]ne of the reasons why we issued this Information Notice [was] to alert the industry that there are failures. They had to look at the industry standards.).

shows, Entergy previously has considered the operating experience described in Information Notice 2009-10, among other sources of information, as part of its CLB reviews of relevant transformer related operating experience.453 172.

In conclusion, the Board finds that Dr. Degeneffs criticisms of Entergys transformer monitoring and testing protocols are not well founded, and certainly do not justify the asserted need for a Part 54 license renewal AMP. Those criticisms are aimed directly at ongoing performance monitoring activities that are required by 10 C.F.R. Part 50. This proceeding is governed by 10 C.F.R. Part 54, which expressly excludes current license term issues from the scope of the NRCs license renewal review. Because transformers are excluded from Part 54s AMR requirements, any proposed augmentation or modification of CLB programs is a matter that must be addressed under the NRCs Part 50 regulatory framework.454 This proceeding is not the proper forum for challenging Entergys CLB programs or seeking changes to the Commissions Part 50 regulations and associated regulatory processes.455 173.

Nonetheless, the record demonstrates that Entergy has implemented preventive maintenance and performance monitoring programs at IPEC that are consistent with industry guidance and adequate to monitor and assess the continuing functionality of IPEC transformers.

Significantly, during the hearing, Dr. Degeneff conveyed his approval of the specific tests being performed on large power transformers at IPEC.456 Although he expressed a concern about the 453 Entergy Testimony at 91 (A100) (ENTR00091) (citing EN-EE-G-001 (ENT000121)).

454 See, e.g., N. States Power Co. (Prairie Island Nuclear Generating Plant, Units 1 & 2), CLI-10-27, 72 NRC 481, 492 (2010) (noting that a petitioners remedy relative to current operational concerns is to direct the Staffs attention to the supporting facts via a petition for enforcement action under 10 C.F.R. § 2.206).

455 10 C.F.R. § 2.335.

456 Dec. 13, 2012 Tr. at 4282:8-11 (Degeneff) ([T]he suite of measurements that theyre making, the measurements are fine.).

frequency of such tests,457 that concern is not adequately justified based on the record evidence.

The record indicates that Entergy tests transformers at intervals that meet or exceed current industry recommendations.458 Further, pursuant to its Part 50 programs and procedures, Entergy takes appropriate corrective actions, including increasing testing frequencies, when warranted by equipment performance.459 V.

SUMMARY

OF FINDINGS OF FACT AND CONCLUSIONS OF LAW 174.

Based upon a review of the entire record of this proceeding and the parties proposed findings of fact and conclusions of law, and based upon the findings set forth above, which are supported by reliable, probative, and substantive evidence in the record, the Board has decided all matters in controversy in NYS-8 in favor of Entergy and the NRC Staff.

175.

The Board finds that Entergy has carried its burden of proof to demonstrate that transformers are properly excluded from an AMR and, therefore, do not require an AMP under 10 C.F.R. Part 54. In particular, with respect to New Yorks contention that transformers require an AMR under 10 C.F.R. Part 54, we find that the overwhelming preponderance of the evidence demonstrates:

a.

A transformers key properties include its internal magnetic field, its terminal voltages and currents, and its turns ratio.

b.

Contrary to New Yorks claim, voltage, current, and magnetic field are not properties of the electricity or power passing through a transformer.

457 Id.

458 Id. at 4276:25-4277:4 (McCaffrey) (It is a common practice to use the techniques that we described before as part of the life cycle management plan for the transformers to be replaced, and thats a generally accepted practice for the industry to follow.); id. at 4283:10-16 (McCaffrey) (stating that Entergy tests its transformer bushings more frequently than industry recommendations); id. at 4303:1-8 (McCaffrey) (stating that Entergy follows industry guidelines for large oil-cooled and air-cooled transformers).

459 See id. at 4309:9-12 (McCaffrey).

c.

A transformers internal magnetic field and terminal voltages and currents are properties that change as the transformer performs its active intended function of transforming input voltage and current to some other form or value of voltage and current.

d.

Changes in a transformers terminal voltages and currents can be directly monitored or verified during transformer operation.

e.

Transformers are more similar to the AMR-excluded examples listed in 10 C.F.R.

§ 54.21(a)(1)(i) and, therefore, are properly excluded from an AMR under that regulation.

f.

Transformer operation and performance are governed by 10 C.F.R. Part 50 requirements and subject to ongoing NRC regulatory oversight.

g.

Even if the deficiencies in Entergys Part 50 transformer maintenance and monitoring programs alleged by New York did exist, they would be appropriately addressed through the NRCs Part 50 oversight processes and not through this proceeding. As such, the alleged deficiencies do not mandate implementation of a Part 54 AMP.

h.

New Yorks criticisms of Entergys IPEC-specific transformer monitoring and maintenance programs lack factual and technical merit.

176.

In summary, the preponderance of the evidence shows that transformers are properly excluded from an AMR and, therefore, do not require an AMP under 10 C.F.R. Part 54.

The Board thus finds that Entergy has carried its burden of proof and resolves Contention NYS-8 in Entergys favor. Issues, motions, and arguments presented by the parties but not addressed herein have been found to be without merit, unnecessary, or not relevant to the Boards findings on NYS-8.

VI.

ORDER WHEREFORE, IT IS ORDERED, pursuant to 10 C.F.R. §§ 2.1210 and 51.104(a)(3), that the New Yorks Contention NYS-8 is resolved on the merits in favor of Entergy and the NRC Staff.

IT IS FURTHER ORDERED, this Partial Initial Decision will constitute a final decision of the Commission forty (40) days from the date of issuance (or the first agency business day following that date if it is a Saturday, Sunday, or federal holiday, see 10 C.F.R. § 2.306(a)),

unless a petition for review is filed in accordance with 10 C.F.R. § 2.1212, or the Commission directs otherwise.

IT IS FURTHER ORDERED that any party wishing to file a petition for review on the grounds specified in 10 C.F.R. § 2.341(b)(1) must do so within twenty-five (25) days after service of this Partial Initial Decision. The filing of a petition for review is mandatory for a party to have exhausted its administrative remedies before seeking judicial review. Within twenty-five (25) days after service of a petition for review, parties to the proceeding may file an answer supporting or opposing Commission review. Any petition for review and any answer shall conform to the requirements of 10 C.F.R. § 2.341(b)(2)-(3).

Although this ruling resolves all matters before the Board in connection with Contention NYS-8, NRC Staff issuance of the renewed operating licenses under 10 C.F.R. Part 54 must abide, among other things, the resolution of the remaining admitted contentions, including those contentions designated for future hearings.

Respectfully submitted, Executed in Accord with 10 C.F.R. § 2.304(d)

William B. Glew, Jr., Esq.

Kathryn M. Sutton, Esq.

William C. Dennis, Esq.

Paul M. Bessette, Esq.

ENTERGY SERVICES, INC.

MORGAN, LEWIS & BOCKIUS LLP 440 Hamilton Avenue 1111 Pennsylvania Avenue, N.W.

White Plains, NY 10601 Washington, D.C. 20004 Phone: (914) 272-3202 Phone: (202) 739-5738 Fax: (914) 272-3205 E-mail: ksutton@morganlewis.com E-mail: wglew@entergy.com E-mail: pbessette@morganlewis.com E-mail: wdennis@entergy.com Martin J. ONeill, Esq.

MORGAN, LEWIS & BOCKIUS LLP 1000 Louisiana Street Suite 4000 Houston, TX 77002 Phone: (713) 890-5710 E-mail: martin.oneill@morganlewis.com COUNSEL FOR ENTERGY NUCLEAR OPERATIONS, INC.

Dated in Washington, D.C.

this 22nd day of March 2013

DB1/ 73196126 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of

)

Docket Nos. 50-247-LR and

)

50-286-LR ENTERGY NUCLEAR OPERATIONS, INC.

)

)

(Indian Point Nuclear Generating Units 2 and 3)

)

)

March 22, 2013 CERTIFICATE OF SERVICE Pursuant to 10 C.F.R. § 2.305 (as revised), I certify that, on this date, copies of Entergys Proposed Findings of Fact and Conclusions of Law For Contention NYS-8 (Electrical Transformers) were served upon the Electronic Information Exchange (the NRCs E-Filing System), in the above-captioned proceeding.

Signed (electronically) by Lance A. Escher Lance A. Escher, Esq.

MORGAN, LEWIS & BOCKIUS LLP 1111 Pennsylvania Ave. NW Washington, DC 20004 Phone: (202) 739-5080 Fax: (202) 739-3001 E-mail: lescher@morganlewis.com COUNSEL FOR ENTERGY NUCLEAR OPERATIONS, INC.