ML13081A766

State of New York'S Proposed Findings of Fact and Conclusions of Law for Contention NYS-8

ML13081A766
Person / Time
Site:	Indian Point
Issue date:	03/22/2013
From:	Heslin L, Sipos J State of NY, Office of the Attorney General
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 24279, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
Download: ML13081A766 (83)

Text

UNITED STATES NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD

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x In re: Docket Nos. 50-247-LR; 50-286-LR License Renewal Application Submitted by ASLBP No. 07-858-03-LR-BD01 Entergy Nuclear Indian Point 2, LLC, DPR-26, DPR-64 Entergy Nuclear Indian Point 3, LLC, and Entergy Nuclear Operations, Inc. March 22, 2013

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x STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW FOR CONTENTION NYS-8 Office of the Attorney General for the State of New York The Capitol State Street Albany, New York 12224

GLOSSARY OF TERMS, ACRONYMS & ABBREVIATIONS ................................................ G I. INTRODUCTION .............................................................................................................. 1 II. PROCEDURAL HISTORY................................................................................................ 2 A. The States Petition To Intervene ....................................................................................... 2 B. Entergys Unsuccessful Motion For Summary Disposition ............................................... 4 C. Testimony And Exhibits ..................................................................................................... 5 III. LEGAL STANDARDS ...................................................................................................... 7 A. The License Renewal Rule ................................................................................................. 7 B. Guidance Documents Are Not Binding And Do Not Have The Force Of Regulations .................................................................................................................. 10 C. Burden Of Proof And Evidentiary Standards ................................................................... 13 IV. FINDINGS OF FACT....................................................................................................... 14 A. Witnesses And Qualifications........................................................................................... 14

1. State Of New Yorks Witness....................................................................................... 14

2. Entergys Witnesses...................................................................................................... 17

3. NRC Staffs Witnesses ................................................................................................. 20 B. Background On The License Renewal Rule..................................................................... 22

1. The Purpose Of The License Renewal Rule Is To Detect Degraded Performance Or Condition Prior To Failure................................................. 22

2. Whether Gross Failure Is Readily Detectable Is Not Relevant To Determining Whether An SSC Is Subject To AMR................................................ 24

3. If An In-Scope SSC Is Considered Passive, Aging Management Review Is Required Regardless Of Whether That Component Is Also Covered By The Maintenance Rule ..................................................................... 25 C. Background On Transformer Operation ........................................................................... 27 i

D. Transformers At Indian Point Are Within The Scope Of The License Renewal Rule....................................................................................................... 31 E. Transformers Are Passive Components............................................................................ 34

1. Transformers Perform Their Intended Function Without Moving Parts................................................................................................................. 34

2. Transformers Are Not Subject To Replacement Based On A Qualified Life Or Specified Time Period............................................................ 34

3. Transformers Do Not Experience A Change In Configuration During Operation .......................................................................................................... 35

4. Transformers Do Not Experience A Change In Properties During Operation .......................................................................................................... 36

5. Transformers Do Not Experience A Change In State During Operation .......................................................................................................... 40 F. Transformers Are Similar To AMR-Included Components ............................................. 45

1. Electric Cables .............................................................................................................. 45

2. Pipes.............................................................................................................................. 48

3. Steam Generator and Heat Exchanger .......................................................................... 51

4. Reactor Vessel .............................................................................................................. 54 G. Transformers Are Dissimilar To AMR-Excluded Components ....................................... 55

1. Batteries ........................................................................................................................ 55

2. Transistors..................................................................................................................... 55

3. Power Inverter and Power Supply ................................................................................ 57 H. Age Related Degradation In Transformers Is Not Readily Monitored............................. 59

1. The Internal Condition of A Transformer Cannot Be Assessed By Monitoring Its Performance .................................................................................... 59

2. Condition Monitoring May Not Detect Aging Degradation In Transformers.............. 63 ii

I. The Transformer Preventive Maintenance Program Does Not Provide A Reasonable Assurance That Transformer Functionality Will Be Maintained In The License Renewal Period ................................. 65

1. Transformer Maintenance Under the Maintenance Rule Is Minimal ........................... 65

2. The Transformer Maintenance Program Has Been Unable To Prevent Numerous Transformer Failures ................................................................ 67 J. An Aging Management Program Is Necessary To Provide A Reasonable Assurance That Transformer Functionality Will Be Maintained In The License Renewal Period ....................................................... 75 V. CONCLUSIONS OF LAW .............................................................................................. 76 VI. PROPOSED ORDER ....................................................................................................... 78 iii

GLOSSARY OF TERMS, ACRONYMS & ABBREVIATIONS ALSB or Board Atomic Safety and Licensing Board AMP Aging Management Program AMR Aging Management Review IEEE Institute of Electrical and Electronics Engineers IPA Integrated Plant Assessment LRA License Renewal Application NEA Nuclear Energy Agency SOC Statement of Consideration SSC System, Structure or Component Tr. Hearing Transcript G

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 I. INTRODUCTION

1. In accordance with 10 C.F.R. Section 2.1209 and the January 15, 2013 Order issued by the Atomic Safety and Licensing Board (Board), the State of New York (State) submits its proposed Findings of Fact and Conclusions of Law on the States admitted Contention 8 (NYS-8) concerning Entergys improper exclusion of transformers from Aging Management Review (AMR) and its failure to propose an Aging Management Program (AMP) for transformers.

2. Entergys license renewal application (LRA) improperly excludes transformers from AMR in violation of 10 C.F.R. § 54.21. AMR is required for transformers because they are components: (1) that perform an intended function as described in 10 C.F.R. § 54.4 without moving parts or without a change in configuration or properties; (2) that are more similar to components for which AMR is required than to components for which AMR is not required; (3) in which age related degradation is not readily monitored; and (4) that are not subject to replacement based on a qualified life or specified time period. Since transformers qualify for AMR, 10 C.F.R. § 54.29 requires that Entergys LRA demonstrate that the effects of transformer aging will be managed during the period of extended operation so that transformer functionality will be maintained. Because transformers at Indian Point are relied upon for fire protection and station blackout recovery, a transformer AMP is necessary for Entergy to demonstrate that there will be safe operation under an extended license. As the LRA lacks both AMR and an AMP for transformers, it is deficient.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 II. PROCEDURAL HISTORY A. The States Petition To Intervene

3. On April 23, 2007, Entergy submitted an application to the NRC to renew the Indian Point Energy Center (Indian Point) Unit 2 and Unit 3 operating licenses (License Nos.

DPR-26 and DPR-64) for an additional 20 years.1 The NRC issued a Commission Hearing Notice stating that any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a petition for leave to intervene in accordance with the provisions of 10 C.F.R. § 2.309. 72 Fed. Reg. 42,134 (Aug. 1, 2007); see 72 Fed. Reg.

55,834 (Oct. 1, 2007) (extending the period for filing requests for hearing in this matter).

4. On November 30, 2007, the State filed a petition for leave to intervene in this proceeding, asserting numerous contentions regarding critical deficiencies in Entergys Indian Point LRA with respect to public safety, health, and the environment. New York State Notice of Intention to Participate and Petition to Intervene (NYS Petition) (Nov. 30, 2007) 1 According to AEC and NRC documents, Consolidated Edison received the following construction permits and operation licenses on the following dates: Unit 1s construction permit was issued on May 4, 1956, and its conditional operating license was issued on March 26, 1962.

Unit 2s construction permit was issued October 14, 1966, and its operating license was issued on September 28, 1973; Unit 3s construction permit was issued August 13, 1969, and its operating license was issued on December 12, 1975. See 21 Fed. Reg. 3,085 (May 9, 1956); 31 Fed. Reg. 13,616-17 (Oct. 21, 1966); 34 Fed. Reg. 13,437 (Aug. 20, 1969) (issuance of construction permits for Indian Point facilities); NUREG-1350, Volume 20, 2008 - 2009 Information Digest, at 103, 113 (Aug. 2008) (providing dates of construction permits and operating licenses for Indian Point facilities). Of the three reactors at the site, only Indian Point Unit 2 and Indian Point Unit 3 continue to operate. AEC issued Indian Point Unit 1 one of the first (provisional) operating licenses in the country (DPR-005) and the reactor operated sporadically for approximately 12 years from August 1962 until October 31, 1974. In 1974, the plant was shut down because its emergency core cooling system did not meet regulatory requirements, and NRC later withdrew its operating license. See generally Consolidated Edison Co. of New York, Inc. (Indian Point Units 1 and 2), Power Authority of the State of New York (Indian Point Unit No. 3), DD-80-5, 11 N.R.C. 351, 1980 NRC LEXIS 149 at

• 5-8 (Feb. 11, 1980).

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 (ML073400187). Among those proposed contentions was Contention 8, which reads in its entirety: The LRA for IP2 and IP3 Violates 10 C.F.R. §§ 54.21(a) and 54.29 Because it Fails to Include an Aging Management Plan for Each Electrical Transformer Whose Proper Function is Important for Plant Safety. NYS Petition at 103.

5. The State asserted that transformers require an AMP, because they function without moving parts or without a change in configuration or properties, as provided for in 10 C.F.R. §§ 54.21(a)(1)(i) & (ii), 54.4(a)(1), (2) & (3). NYS Petition at 103-4. The State alleged that the failure to properly manage the aging of electrical transformers could have safety implications for the plant, such as affecting station blackout recovery. NYS Petition at 104.

6. On January 22, 2008, Entergy and Staff filed responses opposing the admission of Contention 8. Answer of Entergy Nuclear Operations, Inc. Opposing New York State Notice of Intention to Participate and Petition to Intervene, at 69-72 (Jan. 22, 2008) (ML080300149);

NRC Staffs Response to Petitions for Leave to Intervene, at 44-46 (Jan. 22, 2008)

(ML080230649). They alleged that transformers do not require an AMP because industry and Staff guidance documents list transformers as components excluded from AMR. Id. The State responded to Entergys and Staffs opposition by asserting that neither industry nor Staff guidance is binding upon the Board. State of New Yorks Reply in Support of Petition to Intervene, at 58-61 (Feb. 22, 2008) (ML080600444).

7. On July 31, 2008, following a three-day contention admissibility oral argument on March 10-12, 2008, the Board admitted Contention 8 with respect to safety-related electrical transformers that are required for compliance with 10 C.F.R. §§ 50.48 and 50.63, finding that

[n]either Entergy nor the Staff NRC provided any legally binding justification to exclude transformers from AMR. Entergy Nuclear Operations, Inc. (Indian Point, Units 2 and 3),

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Memorandum and Order (Ruling on Petitions to Intervene and Requests for Hearing) LBP 13, 68 N.R.C. 43, 86-89 (July 31, 2008) (ML082130436). The Board required that in addressing Contention 8, the parties should make representations as to whether transformers are more similar to the included, or to the excluded, component examples in 10 C.F.R. § 54.21(a)(1)(i).

B. Entergys Unsuccessful Motion For Summary Disposition

8. On August 14, 2009, Entergy filed a motion for summary disposition of Contention 8, renewing its previously unsuccessful argument that transformers do not require AMR or an AMP because transformers undergo a change in state when voltage travels through them. Applicants Motion for Summary Disposition of New York State Contention 8 (Electrical Transformers) (Aug. 14, 2009) (ML092330784). NRC Staff supported Entergys motion, concluding that Entergy had properly characterized transformers as undergoing a change in state when voltage is applied to the transformer. See NRC Staffs Answer to Applicants Motion for Summary Disposition of New York Contention 8 (Sept. 14, 2009) (ML092580042).

9. The State opposed Entergys motion on the bases that: Contention 8 had become the law of the case to be resolved in a full hearing; Entergy conflated the changing properties of the power passing through the transformer with a change in the transformer itself; and transformers are the type of component for which the Commission intended an AMP to be required, because transformers are passive, degrade in ways not easily monitorable, and are long-lived. Response of the State of New York to Entergys Summary Disposition Motion and NRC Staffs Supporting Answer (Sept. 23, 2009) (ML092930142).

10. On November 3, 2009, the Board denied Entergys motion for summary disposition of Contention 8, concluding that there remains a genuine issue of material fact whether the electrical transformers within the scope of this license renewal proceeding perform 4

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 their function without a change in their configuration or properties. Entergy Nuclear Operations, Inc. (Indian Point, Units 2 and 3), Memorandum and Order (Ruling on Motions for Summary Disposition) at 6 (Nov. 3, 2009) (unpublished) (ML093070521).

C. Testimony And Exhibits

11. On December 12 and 14, 2011, the State of New York filed its initial statement of position (NYS000002), expert report (NYSR00005), pre-filed expert testimony (NYSR00003),

and exhibits (NYS000004, NYS000006-NYS000044) for NYS-8. On March 28-30, 2012, Entergy and NRC Staff, filed their statements of position (ENT000090, NRC000030), pre-filed expert testimony (ENTR00091 and NRC000031), and exhibits (ENT000092-ENT00130B, NRC000032-NRC000038) for Contention 8. The State then submitted a revised statement of position (NYSR00413), rebuttal testimony (NYSR00414), and additional exhibits (NYS000415-NYS000416) on June 29, 2012.

12. On December 6, 2012, the State of New York filed a motion for leave to file four additional exhibits, NYS000468 to NYS000471, concerning NYS-8. See State of New York Motion for Leave to File Additional Exhibits Concerning Contention NYS-8 (Dec. 6, 2012)

(ML12341A289). The first set of documents, NYS000468 and NYS000469, discuss a design vulnerability of the electric power system that can prevent the onsite and offsite electric power systemwhich includes transformersfrom being able to perform its intended safety functions.

Id. at 3. The second set of documents, NYS000470 and NYS000471, describe a transformer fire that occurred on November 11, 2012, at the James A. Fitzpatrick Nuclear Power Planta facility operated by Entergy and located in New York State. Id. None of these documents were available to the State for inclusion in its June 29, 2012 rebuttal submissions. Id. at 2-3.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8

13. On December 7, 2012, Entergy filed an answer in opposition to the States motion, arguing that the new exhibits are not relevant to NYS-8. See Entergys Answer Opposing State of New York Motion for Leave to File Additional Exhibits Concerning Contention NYS-8 (Dec. 7, 2012) (ML12342A248). NRC Staff did not oppose the States motion. On January 15, 2013, the Board granted the States motion and admitted the additional exhibits finding that they satisf[y] the requirements of 10 C.F.R. § 2.337, as relevant, material, and reliable evidence which is not unduly repetitious . . . that may aid the Board in developing a complete record. Entergy Nuclear Operations, Inc. (Indian Point, Units 2 and 3), Order (Scheduling Post-Hearing Matters and Ruling on Motions to File Additional Exhibits) at 5 (Jan.

15, 2013) (unpublished) (ML13015A280) (quoting 10 C.F.R. § 2.337(a)).

14. On December 13, 2012, the Board heard live testimony from the States witness, Dr. Robert Degeneff; Entergys witnesses Mr. Roger Rucker, Dr. Steven Dobbs, Mr. John Craig and Mr. Thomas McCaffrey; and Staffs witnesses Mr. Roy Mathew and Ms. Sheila Ray. See Transcript of Indian Point Evidentiary Hearing (Tr.) (Dec. 13, 2012) at 4209-4485. Following the hearing, the State, Entergy, and Staff conferred and submitted proposed transcript errata to the Board. Joint Transmittal of Proposed Transcript Corrections in the Matter of Indian Point, Units 2 and 3 (Feb. 5, 2013) (ML13036A437). In a February 28, 2013 order, the Board adopted the parties proposed corrections for NYS-8, stating [p]ursuant to 10 C.F.R. § 2.327(d), the Office of the Secretary will make the necessary physical corrections in the official transcript, so that it will incorporate the changes ordered. Entergy Nuclear Operations, Inc. (Indian Point, Units 2 and 3), Order (Adopting Proposed Transcript Corrections and Resolving Contested Corrections) at 2 (Feb. 28, 2013) (unpublished) (ML13059A226) (quoting 10 C.F.R. § 2.327(d)).

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 III. LEGAL STANDARDS A. The License Renewal Rule

15. NRC regulations, contained in 10 C.F.R. Part 54, set forth the requirements for the renewal of nuclear power plant operating licenses. See 10 C.F.R. § 54.1. Collectively, the Part 54 requirements are referred to as the license renewal rule. NYS000016 (Nuclear Power Plant License Renewal Revisions Statement of Consideration (SOC), 60 Fed. Reg. 22,461, May 8, 1995) at 22,461. Essentially, the license renewal rule requires the applicant to demonstrate that there is a reasonable assurance that it will adequately manage the effects of aging on the intended functions of certain structures and components during the period of extended operation. See 10 C.F.R. §§ 54.21 and 54.29.

16. In order to determine which structures and components must be managed for the effects of aging (known as aging management), the applicant first undergoes a scoping process to identify which systems, structures, and components (SSCs) are within the scope of the license renewal rule. ENTR00091 Pre-Filed Testimony of Entergy Witnesses Roger B.

Rucker, Steven E. Dobbs, John W. Craig, and Thomas S. McCaffrey Regarding Contention NYS-8 (Entergy Test.) (Mar. 30, 2012) at 16 (A27) (Rucker, Craig, Dobbs).

17. 10 C.F.R. § 54.4 sets forth three categories of SSCs that are included within the scope of the license renewal rule. The first category consists of safety-related SSCs, which are relied upon to remain functional during and following design-basis events (as defined in 10 C.F.R. § 50.49 (b)(1)) in order to ensure: (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 which could result in potential offsite exposures comparable to those referred to in 10 C.F.R. § 50.34(a)(1),

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8

§ 50.67(b)(2), or § 100.11. 10 C.F.R. § 54.4(a)(1)(i),(ii), and (iii). The second category consists of all nonsafety-related SSCs whose failure could prevent satisfactory accomplishment of any of the safety functions identified in the first category. 10 C.F.R. § 54.4(a)(2). The third category includes all SSCs relied on in safety analyses or plant evaluations to perform a function that demonstrates compliance with the Commissions regulations for fire protection (10 CFR

§ 50.48), environmental qualification (10 CFR § 50.49), pressurized thermal shock (10 CFR

§ 50.61), anticipated transients without scram (10 CFR § 50.62), and station blackout (10 CFR

§ 50.63). 10 C.F.R. § 54.4(a)(3).

18. Next, in the screening process, the applicant determines which in-scope SSCs require aging management. ENTR00091 Entergy Test. at 16 (A27) (Rucker, Craig, Dobbs).

Only those structures and components [t]hat perform an intended function, as described in § 54.4, without moving parts or without a change in configuration or properties. . . . and [t]hat are not subject to replacement based on a qualified life or specified time period are subject to aging management. 10 C.F.R. § 54.21(a)(1)(i) and (ii). The regulation does not define the terms configuration or properties. See NYSR00414 Pre-filed Rebuttal Testimony of Robert Degeneff in Support of Contention NYS-8 (Degeneff Rebuttal Test.) (Aug. 6, 2012) at 9:16-21.

19. The regulation provides a non-exclusive list of structures and components that are included and excluded from aging management. See 10 C.F.R. § 54.21(a)(1)(i). The structures and components that require aging management include, but are not limited to: the reactor vessel, the reactor coolant system pressure boundary, steam generators, the pressurizer, piping, pump casings, valve bodies, the core shroud, component supports, pressure retaining boundaries, heat exchangers, ventilation ducts, the containment, the containment liner, electrical and mechanical 8

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 penetrations, equipment hatches, seismic Category I structures, electrical cables and connections, cable trays, and electrical cabinets. 10 C.F.R. § 54.21(a)(1)(i).

20. Structures and components excluded from aging management include, but are not limited to: pumps (except casing), valves (except body), motors, diesel generators, air compressors, snubbers, the control rod drive, ventilation dampers, pressure transmitters, pressure indicators, water level indicators, switchgears, cooling fans, transistors, batteries, breakers, relays, switches, power inverters, circuit boards, battery chargers, and power supplies. 10 C.F.R.

§ 54.21(a)(1)(i).

21. Transformers are not included in either list. See 10 C.F.R. § 54.21(a)(1)(i); Tr.

4221:5-24 (Craig) (Transformers are not specifically discussed in either Part 54, nor in the Statement of Consideration.).

22. The applicant must undertake an Aging Management Review (AMR) for systems, structures and components that require aging management. See 10 C.F.R. § 54.21. An AMR identifies each SSCs aging effects and the Aging Management Programs (AMPs) that are credited for managing those aging effects. The AMR helps to demonstrate that the effects of aging will be adequately managed so that the intended function of each SSC is maintained in a manner consistent with the current licensing basis for the period of extended operation.

NRC000031 Pre-Filed Testimony of NRC Staff Experts Roy K. Mathew and Sheila Ray Concerning Contention NYS-8 (Staff Test.) (Mar. 29, 2012) at 10-11 (A15) (Mathew, Ray).

23. An AMP typically has ten elements, as described in the Generic Aging Lessons Learned (GALL) Report. See NRC000008 (NUREG-1801, Rev. 1: GALL Report, Vols. 1-2.

Sept. 2005) 2; NRC000009 (NUREG-1801, Rev. 2: GALL Final Report, Dec. 2010).3 These 2

The GALL Report Rev. 1 (NRC000008) was also submitted by the State as NYS00146A-9

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 elements are: scope of program, preventive actions, parameters monitored or inspected, detection of aging effects, monitoring and trending, acceptance criteria, corrective actions, confirmation process, administrative controls, and operating experience. Id.; NRC000031 Staff Test. at 11 (A16) (Mathew, Ray).

24. An application for license renewal must contain an integrated plant assessment (IPA) which identifies and lists those SCCs within the scope of the license renewal rule that are subject to AMR. 10 C.F.R. § 54.21(a)(1). The IPA must demonstrate that the effects of aging on these SSCs will be adequately managed so that their intended functions will be maintained consistent with the current licensing basis for the period of extended operation. 10 C.F.R. § 54.21(a)(3).

25. A renewed license may be issued by the Commission only if it finds that the applicant has identified actions that have been or will be taken, with respect to managing the effects of aging (during the period of extended operation) on the functionality of structures and components that have been identified under 10 C.F.R. § 54.21(a)(1), that provide a reasonable assurance that the activities authorized by the renewed license will continue to be conducted in accordance with the current licensing basis. 10 C.F.R. § 54.29(a)(1).

B. Guidance Documents Are Not Binding And Do Not Have The Force Of Regulations

26. The Commission, Atomic Safety and Licensing Boards (ASLBs), and federal courts have consistently held that guidance documents are not binding and do not have the force of regulations. See New Jersey v. U.S. Nuclear Regulatory Commn, 526 F.3d 98, 103 (3d Cir.

NYS00146C. NRC000008 is a one page document incorporating NYS00146A-NYS00146C.

3 The GALL Report Rev. 2 (NRC000009) was also submitted by the State as NYS00147A-NYS00147D. NRC000009 is a one page document incorporating NYS00147A-NYS00147D.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 2008) (NRC has characterized NUREGs and other NRC guidance documents as routine agency policy pronouncements that do not carry the binding effect of regulations.); Curators of the University of Missouri (TRUMP-S Project), CLI-95-1, 41 N.R.C. 71, 98 (Feb. 28, 1995) ([I]t is well established . . . that NUREGs and Regulatory Guides, by their very nature, serve merely as guidance and cannot prescribe requirements.); Entergy Nuclear Generation Company and Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), 68 N.R.C. 590, 614 (Oct. 30, 2008) (While the GALL Report is entitled to some weight as an NRC guidance document, it does not have the force of a legally binding regulation and, like any guidance document, may be challenged in an adjudicatory proceeding such as this one.); Crow Butte Resources Inc. (North Trend Expansion Project), 67 N.R.C. 241, 323 (May 21, 2008) (And guidance documents such as NUREGs are just that documents that provide guidance, with some persuasive authority, but not binding.); and USEC, Inc. (American Centrifuge Plant), 65 N.R.C. 429, 440 n.31 (Apr.

24, 2007) (NUREGs and Regulatory Guides (RG) serve as guidance and do not prescribe requirements. They are not substitutes for regulations and are not binding authority.).

27. When a guidance document on which an agency has relied is challenged in an adjudicatory proceeding, the agency must defend its position. See Guardian Federal Savings &

Loan Assn v. Federal Savings & Loan Insurance Corp., 589 F.2d 658, 666 (D.C. Cir. 1978)

(A general statement of policy . . . does not establish a binding norm. It is not finally determinative of the issues or rights to which it is addressed. When the agency applies the policy in a particular situation, it must be prepared to defend it, and cannot claim that the matter is foreclosed by the prior policy statement. (internal citations omitted)).

28. The Commission reiterated this principle in NextEra Energy Seabrook, LLC (Seabrook Station, Unit 1), CLI-12-05, 75 N.R.C. __ slip op. (Mar. 8, 2012) ( Seabrook) 11

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 (ML12068A398), making it clear that guidance documents are not binding in individual proceedings. Seabrook at 24, 49. The Commission cited International Uranium (USA) Corp.

(Request for Material License Amendment), CLI-00-1, 51 N.R.C. 9, 19 (2000), which states:

The Commission, however, is not bound by the Guidance. Like NRC NUREGs and Regulatory Guides, NRC Guidance documents are routine agency policy pronouncements that do not carry the binding effect of regulations. . . . [A]gency interpretations and policies are not carved in stone but rather must be subject to re-evaluations of their wisdom on a continuing basis. (internal citations omitted)4

29. Moreover, in Seabrook the Commission did not endorse the Staffs 1997 guidance concerning transformers. See ENT000097 (Letter from Christopher Grimes, NRC, to Douglas J.

Walters, NEI, Determination of Aging Management Review for Electrical Components, Attach., Sept. 19, 1997). Instead, it specifically recognized the intervenors right to challenge such guidance: The Board is correct that the applicability of a guidance document may be challenged in an individual proceeding. Seabrook at 24.

30. Although Seabrook dealt with a transformer contention, the Commission did not determine whether transformers are subject to AMR under 10 C.F.R. § 54.21. Instead, it rejected the Seabrook transformer contention at the contention admissibility stage because the intervenors did not provide sufficient factual information or expert opinion to support the contention, not because the contention was contrary to the Staffs 1997 guidance. The expert declaration offered in support of the contention contained only a brief discussion of transformers and did not give a detailed explanation of how transformers function or why they should be considered passive devices. Seabrook at 24-25. As a result, the Commission found that the intervenors expert asserted, without more, that [t]ransformers function without moving parts 4

The International Uranium decision was also cited and quoted at length by the Third Circuit Court of Appeals in New Jersey v. U.S. Nuclear Regulatory Commn, 526 F.3d 98, 103 (3d Cir.

2008) (holding that guidance documents are categorically excluded from NEPA review because they are non-binding and not final orders of the NRC).

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 or without a change in configuration or properties as defined in [10 C.F.R. § 54.21(a)]. Id. at 22 (quoting intervenors experts declaration). That ruling is irrelevant here because the Board has already found that NYS-8 satisfied the standards in 10 C.F.R. § 2.309 governing contention admissibility. See Entergy Nuclear Operations, Inc. (Indian Point, Units 2 and 3), Memorandum and Order (Ruling on Petitions to Intervene and Requests for Hearing) LBP-08-13, 68 N.R.C. 43, 86-89 (July 31, 2008) (ML082130436).

C. Burden Of Proof And Evidentiary Standards

31. It is well established that the Applicant carries the burden of proof on safety issues. Duke Power Co. (Catawba Nuclear Station, Units 1 and 2), CLI-83-19, 17 N.R.C. 1041, 1048 (1983) (citing Consumers Power Co. (Midland Plant, Units 1 and 2), ALAB-283, 2 N.R.C.

11, 17 (1975)).

32. After a partys contention has been admitted, that party has the burden of introducing sufficient evidence to establish a prima facie case. The burden then shifts to the applicant to prove by a preponderance of the evidence that the Board should reject the contention as a basis for denial of the renewed license. Louisiana Power and Light Co., 17 N.R.C. 1076, 1093 (quoting Consumers Power Co. (Midland Plant, Units 1 and 2), ALAB-123, 6 A.E.C. 331, 345 (1973)); see AmerGen Energy Co., LLC (Oyster Creek Nuclear Generating Station), CLI 07, 69 N.R.C. 235, 263 (2009) (the applicant must demonstrate that it satisfies the reasonable assurance standard by a preponderance of the evidence).

33. Under NRCs regulations, [o]nly relevant, material, and reliable evidence which is not unduly repetitious will be admitted. 10 C.F.R. § 2.337(a). Throughout this proceeding, rather than exclude evidence, this Board has generally opted to give all evidence its appropriate weight at evidentiary hearing in the context of evaluating the specific issue before [it]. Entergy 13

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3), Order (Granting in Part and Denying in Part Applicants Motions in Limine) at 20 (Mar. 6, 2012) (unpublished)

(ML12066A170); see also id. at 24 ([t]he weight and credibility we give to that testimony will be determined after the evidentiary hearing). Now that the Board is evaluating the evidence presented, it is important to note that unsupported reasoning is insufficient and should be afforded little or no weight. Entergy Nuclear Generation Co. (Pilgrim Nuclear Power Station),

CLI-10-11, 71 N.R.C. 287, 315 (Mar. 26, 2010).

IV. FINDINGS OF FACT A. Witnesses And Qualifications

1. State Of New Yorks Witness

34. The State of New York presented one witness on Contention NYS-8: Dr. Robert C. Degeneff, D.Eng. Dr. Degeneff presented an expert report and both direct and rebuttal written testimony. NYSR00005 Report of Dr. Robert C. Degeneff in Support of Contention NYS-8 (Degeneff Report) (Dec. 14, 2011); NYSR00003 Initial Pre-Filed Testimony of New York State Expert Dr. Robert C. Degeneff Regarding Contention NYS-8 (Degeneff Initial Test.)

(Dec. 14, 2011); NYSR00414 Rebuttal Pre-Filed Testimony of New York State Expert Dr.

Robert C. Degeneff, D. Eng. Regarding Contention NYS-8 (Degeneff Rebuttal Test.) (Aug. 6, 2012). Dr. Degeneff testified in person at the evidentiary hearing in Tarrytown, New York, on December 13, 2012. See Tr. 4218-4456.

35. Dr. Degeneff holds a doctorate of engineering (D. Eng.), a Master of Science degree in electrical power engineering, and a bachelors degree in mechanical engineering.

NYS000004 (Curriculum Vitae of Robert C. Degeneff, Dec. 12, 2011) at 3. His doctoral thesis concerned the transient interaction of transformers and transmission lines. NYS000004 at 3. Dr.

14

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Degeneff has over forty years experience working, teaching, and researching in the power engineering field, with an emphasis on the electrical behavior and design of power transformers.

NYSR00003 Degeneff Initial Test. at 2:7-10. Dr. Degeneff has published more than eighty papers on topics concerning transformer design and performance, and power system design. He holds eight patents relating to transformer winding design and electronic tap changer design.

Degeneff Initial Test. at 2:10-13; NYS000004 at 3-6. In addition to his other positions, for the past thirty years, Dr. Degeneff has worked as a consultant, conducting forensic analyses of transformer failures. He has worked with most major transformer manufacturers worldwide. Tr.

4442:6-9.

36. Dr. Degeneff has been a member of the Institute of Electrical and Electronics Engineers (IEEE) Transformers Committee for approximately forty years. He currently serves as a fellow on the committeea position that requires nomination and election, and is held by only two percent of members. NYSR00414 Degeneff Rebuttal Test. at 5:20-6:1. As a committee member, Dr. Degeneff has served on subcommittees and working groups that have written numerous standards providing guidance on the necessary specifications for transformers applied in nuclear plants. Degeneff Rebuttal Test. at 6:1-5. For example, he was involved in the creation of IEEE C57.12.00, which provides the general requirements for liquid immersed, distribution power and regulating transformers. He has also worked on guides for the installation of transformers (IEEE C57.12.11) and the testing of transformers insulation capabilities (IEEE C57.12.14), among others. These IEEE guides are used by nuclear plants across the country.

Degeneff Rebuttal Test. at 6:5-11. Dr. Degeneff is also currently participating in a Cigré (International Council on Large Electric Systems) working group concerning transformers. Tr.

4442:11-12 (Degeneff).

15

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

37. Since 1991, Dr. Degeneff has been the owner and president of Utility Systems Technologies (UST), Inc., a leading developer of electronic voltage regulators and sag mitigation equipment used for power quality improvement in utility and industrial power systems. NYSR00003 Degeneff Initial Test. at 1:19-23. Among other things, UST designs and builds equipment to improve power quality. Transformers are a major component of such equipment. Degeneff Initial Test. at 2:1-3. These transformers have been used in several nuclear facilities. NYSR00414 Degeneff Rebuttal Test. at 5:8-10.

38. From 1989 until 2006, Dr. Degeneff was a professor at Rensselaer Polytechnic Institute. NYS000004 at 1. In this role, he was responsible for teaching graduate and undergraduate courses, conducting research, and supervising doctoral candidates. NYS000004 at 1. Dr. Degeneff taught graduate courses on electric power systems analysis, mechanical aspects of electrical power equipment, and power system transients. He taught undergraduate courses on systems dynamics and engineering design. All of these courses concerned transformers. Dr. Degeneff also co-authored the textbook for his electric power systems analysis course. NYS000004 at 1.

39. From 1973 until 1989, Dr. Degeneff worked as an engineer and manager at General Electric Co. NYS000004 at 1-2. During this time he was responsible for developing the analytic computer tools necessary to predict the internal electrical behavior of transformers, as well as establishing standard practices to ensure design integrity for transformer and reactor insulation structures, short circuit strength, magnetic characteristics and material specifications.

NYS000004 at 1-2. Dr. Degeneff wrote the program used by General Electric and other companies for the transient voltage response of transformers during impulse tests.

16

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

40. Based on the foregoing, and his respective background and experience, Dr.

Degeneff is well qualified to testify as an expert witness concerning the theory, operation, properties, and maintenance of transformers. Dr. Degeneffs resume shows that he has significant experience dealing with the application of transformers in nuclear power plants.

Contrary to Dr. Dobbss assertions (Tr. 4450:24-4451:2)5, Dr. Degeneffs opinions do not only reflect his experience within the academic community, but also his decades of experience as a professional in the transformer industry.

2. Entergys Witnesses

41. Entergy presented four witnesses on Contention NYS-8: (1) Mr. Roger Rucker; (2) Dr. Steven Dobbs; (3) Mr. John Craig; and (4) Mr. Thomas McCaffrey. These witnesses provided pre-filed written testimony and testified in person at the evidentiary hearing in Tarrytown, New York, on December 13, 2012. See ENTR00091 Pre-Filed Testimony of Applicant Witnesses Roger Rucker, Steven Dobbs, John Craig, and Thomas McCaffrey Regarding Contention NYS-8 (Electrical Transformers) (Entergy Test.) (Mar. 30, 2012);

Tr. 4218-4459.

42. Mr. Rucker is a self-employed engineering consultant for Rucker Nuclear Services, Inc. He has been retained by Entergys License Renewal Services Division and serves as the License Renewal Electrical Lead for Indian Point. In this capacity, Mr. Rucker has prepared several documents that support Indian Points license renewal application, including the electrical Aging Management Review report, and the electrical portions of the Aging Management Program evaluation report, the scoping and screening report, and the operating 5

The State is citing to the corrected transcript. See Entergy Nuclear Operations, Inc. (Indian Point, Units 2 and 3), Order (Adopting Proposed Transcript Corrections and Resolving Contested Corrections) (Feb. 28, 2013) (unpublished) (ML13059A226); 10 C.F.R. § 2.327(d).

17

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 experience review reports. ENTR00091 Entergy Test. at 2 (A4) (Rucker). Mr. Rucker has a Bachelor of Science in electrical engineering and has worked for twenty-two years in the nuclear industry. He has served as the electrical lead for nine license renewal applications. Entergy Test. at 2 (A3) (Rucker); See ENT000092 (Curriculum Vitae of Roger B. Rucker, Jan. 2012).

43. Dr. Dobbs is a self-employed engineering consultant with Dobbs & Associates Engineering, Inc. ENT000093 (Curriculum Vitae of Steven E. Dobbs, Mar. 28, 2012). He provides engineering consulting services with respect to electronics and computer applications, including their use in nuclear plants. ENTR00091 Entergy Test. at 3 (A6) (Dobbs). Dr. Dobbs has a doctor of philosophy in electrical engineering, a master of science in electrophysics, and a bachelor of science in physics. From 1990 until 2004, Dr. Dobbs was employed by Entergy, providing engineering support for computer and electronic systems throughout the Arkansas Nuclear One plant. From 1977 until 1990, Dr. Dobbs taught in the Engineering Department at Arkansas Tech University. He taught classes in electrical machinery that covered the theory and operation of transformers, motors, and generators. Entergy Test. at 3-4 (A7) (Dobbs).

44. Mr. Craig is a nuclear safety consultant with Talisman International, LLC.

ENT000094 (Curriculum Vitae of John W. Craig, Mar. 28, 2012) at 1. He has a bachelor of science in nuclear engineering and thirty-five years of experience in nuclear energy and safety matters. From 1979 until 2005, Mr. Craig was employed at the NRC, where he served as the Director of License Renewal and Environmental Project Directorate. In this role, he was responsible for managing license renewal activities, including developing the initial license renewal rule (10 C.F.R. Part 54) and reviewing technical license renewal reports submitted by industry groups. He also served as the Associate Director for Inspection and Programs, where he 18

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 oversaw the Office of Nuclear Reactor Regulations license renewal program. ENTR00091 Entergy Test. at 4-5 (A10) (Craig).

45. Mr. McCaffrey is employed by Entergy as the design engineering manager at Indian Point. ENT000095 (Curriculum Vitae of Thomas S. McCaffrey, Mar. 28, 2012). He has a master of science in management science and a bachelor of engineering in electrical engineering. In his current position, Mr. McCaffrey manages a team that maintains and modifies the design of the station to improve plant performance. Mr. McCaffrey has also worked as an electrical system engineer responsible for the Indian Points medium and high-voltage electrical systems. In addition, he has supervised and managed engineers involved in all aspects of the Indian Point electrical and instrumentation and control systems. ENTR00091 Entergy Test. at 6 (A13) (McCaffrey).

46. Although Entergys witnesses have engineering degrees and experience working at nuclear plants, they are not transformer experts. None of their resumes mention any specific experience with transformers. In fact, the only specific reference to any transformer experience is in Dr. Dobbss testimony, where he states that twenty-three years ago he taught electrical machinery classes that touched upon the operation of transformers. ENTR00091 Entergy Test.

at 3-4 (A7) (Dobbs). Dr. Dobbss lack of practical experience working in the transformer industry is particularly striking as he is Entergys chief witness for Contention NYS-8, providing extensive testimony concerning transformer properties and operation. See Entergy Test. at 26-

85. Entergys witnesses experience pales in comparison to Dr. Degeneffs forty-year career focusing on the electrical behavior and design of power transformers.

47. At the hearing, Dr. Dobbs admitted that he is also lacking in knowledge concerning fluid dynamics. Dr. Dobbs testified, My technical position is that the field of fluid 19

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 dynamics and the field of electromagnetics are very different fields, that they are not subject to the same rules, the same equations. Tr. 4402:24-4403:3 (Dobbs). However, he then admitted, Im not really a fluids person, and that he did not know that some of the same equations are used in both fields. Tr. 4403:13-4404:25 (Dobbs). Accordingly, Dr. Dobbss testimony concerning fluid dynamics should be afforded little or no weight. See Nimely v. City of New York, 414 F.3d 381, 399 n.13 (2d Cir. 2005) (But it is worth emphasizing that, because a witness qualifies as an expert with respect to certain matters or areas of knowledge, it by no means follows that he or she is qualified to express expert opinions as to other fields.); Duke Entergy Corp. (Catawba Nuclear Station, Units 1 and 2), 60 N.R.C. 21, 29 (2004) (Gaps in specific knowledge may go to the weight of the expert testimony rather than to its admissibility.); Private Fuel Storage, L.L.C. (Independent Spent Fuel Storage Installation), 62 N.R.C. 328, 357 (2003) (Presiding officers have, in the past, accorded less weight to the testimony of a witness acknowledging no expertise in a specific area.).

48. Given Entergys witnesses relative lack of knowledge and experience in transformer operation and theory, especially in light of Dr. Degeneffs expertise, the Board should afford little weight to Entergys witnesses testimony on these topics. If there is a conflict between Dr. Degeneffs testimony and these witnesses testimony on transformer properties and operation, Dr. Degeneffs testimony should prevail.

3. NRC Staffs Witnesses

49. NRC Staff presented two witnesses on Contention NYS-8: (1) Mr. Roy Mathew; and (2) Ms. Sheila Ray. These witnesses provided pre-filed written testimony and testified in person at the evidentiary hearing in Tarrytown, New York, on December 13, 2012. See 20

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 NRC000031 NRC Staffs Pre-Filed Testimony of Roy Mathew and Sheila Ray Concerning Contention NYS-8 (Transformers) (Staff Test.) (Mar. 29, 2012); Tr. 4218-4465.

50. Mr. Mathew is employed by the NRC as a team leader in the Electrical Engineering Branch, Division of Engineering, in the Office of Nuclear Reactor Regulation.

NRC000032 (Curriculum Vitae of Roy Mathew, Mar. 29, 2012) at 1. He has a bachelor of science in electrical engineering and has worked for twenty-two years at NRC. In his current position, Mr. Mathew reviewed large power transformer failures at nuclear plants and assisted Staff with the issuance of an Information Notice 2009-010, Transformer FailuresRecent Operating Experience. See NYS000019 (NRC Information Notice 2009-10, Transformers Failures-Recent Operating Experience, July 7, 2009). In addition, Mr. Mathew has conducted safety review audits for license renewal and developed interim staff guidance for certain Aging Management Programs. NRC000031 Staff Test. at 1-2 (A2) (Mathew). He also provided input to portions of the Staffs Safety Evaluation Report Related to the License Renewal of Indian Point Nuclear Generating Units 2 and 3, NUREG-1930 (SER), regarding electrical components including the scoping and screening results for the electrical and instrumentation and controls system. Staff Test. at 3 (A3) (Mathew).

51. Ms. Ray is employed by NRC as an electrical engineer in the Office of Nuclear Regulatory Research, Division of Engineering, Mechanical and Electrical Engineering Branch.

NRC000033 (Curriculum Vitae of Sheila Ray, Mar. 29, 2012) at 1. She has a master of science and a bachelor of science in electrical engineering, and has worked for NRC for seven years.

Ms. Ray has conducted safety reviews for license renewal applications, specifically focusing on electrical systems and components, performed reviews of power uprate applications, and worked on station blackout rulemaking. NRC000031 Staff Test. at 2 (A2) (Ray). She also provided 21

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 input to portions of the Staffs SER for Indian Point regarding electrical components, including the scoping and screening results for the electrical and instrumentation and controls system.

Staff Test. at 3 (A3) (Ray).

52. Although the Staffs witnesses have significant electrical engineering experience in the nuclear industry, they do not have the same level of expertise regarding transformer theory and operation as Dr. Degeneff. Accordingly, if there is a conflict between Dr. Degeneffs testimony and these witnesses testimony on transformer properties and operation, Dr.

Degeneffs testimony should prevail. Also, since Staffs witnesses admitted at the hearing that they are not very familiar with fluid dynamics, their testimony on this topic should be afforded little or no weight. Tr. 4407:19-4408:2 (Ray, Mathew). See Nimely, 414 F.3d at 399 n.13; Duke Entergy Corp., 60 N.R.C. at 29; Private Fuel Storage, L.L.C., 62 N.R.C. at 357.

B. Background On The License Renewal Rule

1. The Purpose Of The License Renewal Rule Is To Detect Degraded Performance Or Condition Prior To Failure

53. When the Commission revised the license renewal rule in 1995, it published a Statement of Consideration (SOC), explaining that the revisions were intended to change the focus of the rule. NYS000016 (Nuclear Power Plant License Renewal Revisions Statement of Consideration, 60 Fed. Reg. 22,461, May 8, 1995) at 22,461. Whereas the previous rule sought to identify all aging mechanisms regardless of their effect on SSCs, the revised rule seeks to identify aging degradation that leads to degraded performance or condition (i.e., detrimental effects) during the period of extended operation. NYS000016 (60 Fed. Reg. 22,461) at 22,469.

54. The purpose of the revised rule is to ensure that licensee programs adequately monitor performance or condition in a manner that allows for the timely identification and correction of degraded conditions. NYS000016 (60 Fed. Reg. 22,461) at 22,469. The goal is to 22

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 identify and correct degraded conditions before they lead to failure. See NYS000016 (60 Fed.

Reg. 22,461) at 22,469 (Once functional degradation is identified through performance or condition monitoring, corrective actions can be applied.); 22,475 ([T]he Commission concludes that a specific focus on functionality is appropriate for performing the license renewal review.); and 22,476 (The Commission also concludes that an Aging Management Review of the passive functions of structures and components is warranted to provide the reasonable assurance that their intended functions are adequately maintained during the period of extended operation.).

55. At the hearing, Entergys witness Mr. Craig agreed that the purpose of the license renewal rule is to monitor SSCs for degraded performance or condition, and not simply to detect their failure:

JUDGE WARDWELL: But in regards to license renewal and what the Commission is talking about, theyve said that only those that lead to degraded component performance or condition is what theyre interested in not just whether or not something can be detected that is not working any more, but in fact, when were dealing with aging management were interested in being able to track the degraded performance of that.

MR. CRAIG: Well, in a general sense, I agree with that. I think thats correct.

Tr. 4231:5-16 (J. Wardwell, Craig). See Tr. 4243:19-4245:16 (Craig) (the goal [is] to identify transformer degradation before failure.).

56. Staffs witness Ms. Ray also agreed that the purpose of the license renewal rule is to monitor SSCs for degradation, not failure:

JUDGE WARDWELL: So you would agree with the statement that the express concerns of the Commission all point to the need to monitor for degradation rather than just be cognizant of the complete failure when it occurred?

MS. RAY: Yes thats correct.

Tr. 4243:12-18 (J. Wardwell, Ray).

23

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

2. Whether Gross Failure Is Readily Detectable Is Not Relevant To Determining Whether An SSC Is Subject To AMR

57. Since the purpose of the license renewal rule is not to detect failure, but to prevent it, whether gross failure is readily detectable is not relevant to determining whether an SSC is subject to AMR under the rule. At the hearing, Entergys witnessand former NRC employeeMr. Craig conceded this point:

JUDGE WARDWELL: [C]ould you cite anywhere in the regulations or in the Statement of Consideration where it says that the ability to detect ultimate failure is sufficient to exempt a system, structure, or component from Aging Management Review?

MR. CRAIG: No, its not discussed in either the rule or the Statement of Consideration.

Tr. 4234:5-12 (J. Wardwell, Craig).

JUDGE WARDWELL: [D]o you believe the Commission would be satisfied and would exempt a system, structure, or component from Aging Management Review if the only thing that could be monitored is its complete failure and nothing else?

MR. CRAIG: No.

TR. 4237:17-22 (J. Wardwell, Craig).

58. After stating in her written testimony that AMR is not required for those SSCs whose gross failure is readily detectable (NRC000031 Staff Test. at 8 (A11 & 12) (Ray, Mathew)), NRC Staffs witness Ms. Ray admitted at the hearing that this is not a proper criterion for determining whether AMR is required for a component:

JUDGE WARDWELL: And its your opinion that [the SOC] says that the ability to detect gross failure is sufficient to exempt a system, structure, or component from Aging Management Review?

MS. RAY: No.

TR. 4243:4-8 (J. Wardwell, Ray).

24

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

3. If An In-Scope SSC Is Considered Passive, Aging Management Review Is Required Regardless Of Whether That Component Is Also Covered By The Maintenance Rule

59. The terms active and passive are not used in 10 C.F.R. Part 54. Tr. 4220:18-19 (Dobbs); Tr. 4221:16-18 (Craig); Tr. 4228:22-24 (Mathew). However, the SOC characterizes SSCs for which AMR is required as passive, and those for which it is not required as active.

NYS000016 (60 Fed. Reg. 22,461) at 22,477. Passive SSCs perform their intended function without moving parts and without a change in configuration or properties. NYS000016 (60 Fed.

Reg. 22,461) at 22,477. The SOC explains that a change in configuration or properties should be interpreted to include a change in state. NYS000016 (60 Fed. Reg. 22,461) at 22,477.

Therefore, SSCs that experience a change in state are considered active as well. NYS000016 (60 Fed. Reg. 22,461) at 22,477.

60. The SOC explains that active SSCs do not require AMR because [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.

NYS000016 (60 Fed. Reg. 22,461) at 22,472. According to NRC staff, because aging degradation is easier to detect in active SSCs, the maintenance rule (10 C.F.R. § 50.65) will effectively manage the effects of aging in active SSCs during the license renewal term.

NYS000016 (60 Fed. Reg. 22,461) at 22,472.

61. On the other hand, SSCs that have passive functions generally do not have performance and condition characteristics that are as readily monitorable as those that perform active functions. NYS000016 (60 Fed. Reg. 22,461) at 22,477. Therefore, the detrimental effects of aging affecting passive functions of structures and components are less apparent than 25

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 the detrimental effects of aging affecting active functions of structures and components.

NYS000016 (60 Fed. Reg. 22,461) at 22,476.

62. As NRC Staff has acknowledged, because degraded conditions caused by aging are harder to detect in passive SSCs, the maintenance rule is insufficient to manage the effects of aging in passive SSCs during the license renewal term. NYS000016 (60 Fed. Reg. 22,461) at 22,470-71. For this reason, passive SSCs that are covered under the maintenance rule during the current licensing basis are also covered under the license renewal rule during the period of extended operations. NYS000016 (60 Fed. Reg. 22,461) at 22,470-71 (Passive, long-lived structures and components that are the focus of the license renewal rule are also within the requirements of the maintenance rule.).

63. The maintenance rule requires that licensees monitor the performance or condition of structures, systems, or components, against licensee-established goals, in a manner sufficient to provide reasonable assurance that these structures, systems, and components . . . are capable of fulfilling their intended functions. 10 C.F.R. § 50.65(a)(1). However, under the maintenance rule, performance or condition monitoring is not required where it has been demonstrated that the performance or condition of a structure, system, or component is being effectively controlled through the performance of appropriate preventive maintenance, such that the structure, system, or component remains capable of performing its intended function. 10 C.F.R. § 50.65(a)(2) (emphasis added). Furthermore, the maintenance rule requires only that licensees evaluate their preventive maintenance activities once every two years. 10 C.F.R. § 50.65(a)(3).

64. Since many long-lived, passive SSCs are not monitored under the more rigorous requirements of the maintenance rule (10 C.F.R. § 50.65(a)(1)), but instead are maintained under 26

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 the looser requirements of the maintenance rule (10 C.F.R. § 50.65(a)(2)), these SSCs must be more rigorously managed under the license renewal rule in the license renewal period.

According to the SOC:

It is expected that many long-lived, passive structures and components could be considered inherently reliable by licensees and not be monitored under 10 CFR 50.65(a)(1). There may be few, if any, actual maintenance activities (e.g. inspection or condition monitoring) that a licensee conducts for such structures and components.

. . . Therefore, the Commission believes that such structures and components that are technically within the scope of the maintenance rule should not be generically excluded from review for license renewal on the basis of their inherent reliability.

NYS000016 (60 Fed. Reg. 22,461) at 22,470.

65. At the hearing, Entergys witness Mr. Craig admitted that coverage under the maintenance rule does not exempt an SSC from coverage under the license renewal rule:

JUDGE WARDWELL: Do you believe that a system, structure, or component thats currently under Part 50, Current Licensing Basis, is automatically exempt from Aging Management Review?

MR. CRAIG: No.

Tr. 4291:4-8 (J. Wardwell, Craig).

66. If an in-scope SSC is considered passive, AMR is required regardless of whether that SSC is also covered under the maintenance rule. The Commission has already determined that the maintenance rule is insufficient for monitoring aging degradation in passive SSCs during the license renewal period. NYS000016 (60 Fed. Reg. 22,461) at 22,470. Therefore, whether the maintenance rule is sufficient for monitoring age related degradation in transformers is not relevant to determining whether they are subject to AMR.

C. Background On Transformer Operation

67. Transformers typically contain two insulated wires that are wrapped or coiled around a form called a core that is frequently made of iron or metal alloys. Transformers 27

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 contain a primary winding (a winding supplying the energy to the circuit) and one or more secondary windings (the windings through which the power flows out of the transformer).

NYSR00003 Degeneff Initial Test. at 7:17-22. In its most basic form, a transformer need not even contain a physical core: two coils of wire adjacent to one another will act as a transformer.

NYSR00005 Degeneff Report at 1. A transformer can be represented by the following electrical engineering symbol:

NYSR00005 Degeneff Report at 4.

68. Drawings of electrical systems for the Indian Point facilities use the following symbol to denote a transformer in the electrical systems:

NYSR00005 Degeneff Report at 4.

69. The transformer takes advantage of the unique properties of electromagnetic fields to transform electrical power of one voltage to electrical power of another voltage.

NYSR00003 Degeneff Initial Test. at 7:5-7. When an electric current passes through the primary winding, the current generates a magnetic field around that winding. When that generated 28

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 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. Degeneff Initial Test. at 8:3-9.

70. Conversely, when there is no current flowing into the transformers primary winding, there is no magnetic field generated; the coils and the core do not produce a magnetic field on their own when there is no incoming electrical current. NYSR00005 Degeneff Report at

2. This is because a transformer cannot generate power. NYSR00414 Degeneff Rebuttal Test. at 16:4-5. It is not a source of power any more than a transmission cable is a source of power.

Degeneff Rebuttal Test. at 16:5-6. The power must be supplied from some other sourcea generator or battery, for example. Degeneff Rebuttal Test. at 16:6-8.

71. The ratio of the coils each winding possesses is called the turns ratio.

NYSR00003 Degeneff Initial Test. at 7:22-23. The turns ratio determines that no matter what level of electrical power is fed into a transformer, the voltage and current will be transformed in a uniform ratio. Degeneff Initial Test. at 9:11-13. The turns ratio is equivalent to the transformation ratio of the input and output voltage. NYSR00414 Degeneff Rebuttal Test. at 15:6-10. This ratio never changes because the number of turns on a transformers primary and secondary windings never changes. Degeneff Rebuttal Test. at 15:10-11. The ratio is described by the equation Vp/Vs = Np/Ns = N, where v = voltage, N = turns, s = secondary, and p =

primary. Degeneff Rebuttal Test. at 15:12-13. As described by this ratio, the voltage of electricity moving through the transformer will be stepped up or down in proportion to the number of turns in the transformers windings. Degeneff Rebuttal Test. at 15:13-16. For example, if there are twenty turns on the primary and two turns on the secondary, the turns ratio 29

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 is 10. The voltage transformation ratio is also 10. So if the input voltage is 1000 volts, the output voltage will be 100 volts. Degeneff Rebuttal Test. at 15:16-20.

72. Dr. Degeneff submitted the following figure to help illustrate this point:

NYSR00005 Degeneff Report at 11.

73. The mathematical relationship between the voltage and the current is described by the following: voltage in x current in = power in = power out = voltage out x current out.

NYSR00003 Degeneff Initial Test. at 7:8-10. Assuming zero resistance, the electrical power flowing through a transformer remains constant; consequently if the voltage of electrical power flowing through a transformer decreases and the power remains constant, current will increase proportionally, and vice versa. Degeneff Initial Test. at 7:10-15. Another way the voltage and current relationship is often expressed: V in / V out = I out / I in or V in / V out = Current out /

Current in. Degeneff Initial Test. at 7:15-16.

30

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 D. Transformers At Indian Point Are Within The Scope Of The License Renewal Rule

74. All parties agree that transformers at Indian Point perform an intended function as set out in 10 C.F.R. § 54.4 and therefore, are within the scope of the license renewal rule.

NYSR00003 Degeneff Initial Test. at 41:18-42:9; ENTR00091 Entergy Test. at 98 (A109)

(McCaffrey, Rucker); NRC000031 Staff Test. at 11 (A17) (Mathew, Ray); Tr. 4292:1-4293:10 (Ray); Tr. 4295:7-19 (Craig, Degeneff).

75. In the pre-filed testimony, Entergys witness Mr. Rucker stated that all transformers at Indian Point are within the scope of license renewal: Entergy included in the scope of license renewal all plant transformers. See LRA at 2.5-1 to 2.5-2. ENTR00091 Entergy Test. at 25 (A39) (Rucker). However, later in the pre-filed testimony, he and Mr.

McCaffrey stated: Although Entergy included all electrical components in the scope of license renewal, the main transformers and the unit auxiliary transformers do not perform a license renewal intended function as defined in 10 C.F.R. § 54.4. The station auxiliary transformers and the Unit 3 GT auto transformer perform license renewal intended functions. Entergy Test. at 98 (A109) (Rucker, McCaffrey).

76. At the hearing, Entergys witness Mr. McCaffrey stated that transformers at Indian Point fall under the third category of in-scope SSCs, listed in 10 C.F.R. § 54.4(a)(3). Tr.

4454:1-9 (McCaffrey). Specifically, these transformers are relied on in safety analyses or plant evaluations to perform a function that demonstrates compliance with the Commissions regulations for fire protection (10 C.F.R. § 50.48) and station blackout recovery (10 C.F.R. § 50.63). Tr. 4454:1-9 (McCaffrey).

31

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

77. Furthermore, Entergys license renewal application states that those transformers involved with station blackout (SBO) recovery, are within the scope of the license renewal rule:

Based on NRC guidance in NUREG-1800 Section 2.5.2.1.1, systems and structures relied upon to restore offsite AC power (including the onsite portion of the offsite power sources) and onsite AC power are included within the license renewal scope for SBO (10 CFR 50.63). . . .

The offsite power sources required to support SBO recovery actions are the offsite sources that supply the station auxiliary transformers. Specifically, the offsite power recovery path includes the station auxiliary transformers, the 138KV switchyard circuit breakers supplying the station auxiliary transformers, the circuit breaker-to-transformer and transformer-to-onsite electrical distribution interconnections, and the associated control circuits and structures.

ENT00015A (Indian Point Energy Center License Renewal Application, April 2007) at 2.4-22 and 2.5-2.

78. The following diagram shows the offsite power recovery path for Indian Point Unit 2, which is used for station blackout recovery:

32

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Figure: Indian Point Unit 2 Offsite Power Scoping Diagram, ENT00015A at 2.5-5.

79. At Indian Point Unit 2, there are seven transformers that perform a function that demonstrates compliance with 10 C.F.R. § 50.63 (station blackout). Tr. 4454:10-4455:7 (McCaffrey). At Indian Point Unit 3, there are seven transformers that perform a function that demonstrates compliance with 10 C.F.R. § 50.63 (station blackout) and two transformers that perform a function that demonstrates compliance with 10 C.F.R. § 50.48 (fire protection). Tr.

4455:8-16 (McCaffrey).6 6

Other transformers at Indian Point Unit 2 and Indian Point Unit 3 may be within the scope of the license renewal rule. If the Board determines that transformers are passive devices, the State 33

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 E. Transformers Are Passive Components

1. Transformers Perform Their Intended Function Without Moving Parts

80. All parties agree that transformers perform their intended function without moving parts. NYSR00003 Degeneff Initial Test. at 6:12; ENTR00091 Entergy Test. at 40-41 (A58) (Dobbs); NRC000031 Staff Test. at 12 (A20) (Mathew, Ray); Tr. 4359:18 (Degeneff)

(The transformer doesnt have any moving parts.); Tr. 4414:12-16 (Dobbs) (stating that the transformer has no moving parts); NYS000012 (NUREG/CR-5753 Aging of Safety Class IE Transformers in Safety Systems of Nuclear Power Plants, Feb 1996) at 50 (Transformers perform their primary function without the use of moving parts).

2. Transformers Are Not Subject To Replacement Based On A Qualified Life Or Specified Time Period

81. All parties agree that transformers are not subject to replacement based on a qualified life or specified time period. NYSR00003 Degeneff Initial Test. at 17:13-16; ENTR00091 Entergy Test. at 14 (A24) (Rucker, Dobbs, Craig, McCaffrey); NRC000031 Staff Test. at 8 (A13) (Mathew, Ray).

82. At the hearing, Entergys witness Mr. Rucker explained that the screening criterion not subject to replacement based on a qualified life or specified time period, listed in 10 C.F.R. § 54.21(a)(1)(ii), is applicable only to EQ components such as EQ cable, and therefore, does not apply to transformers. Tr. 4432:18-4435:11 (Rucker).

requests that the Board require Entergy to conduct a thorough and public analysis of the transformers at Indian Point to determine whether any other transformers are within the scope of the license renewal rule. See 10 C.F.R. § 54.4.

34

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

3. Transformers Do Not Experience A Change In Configuration During Operation

83. A transformer does not experience a change in configuration while performing its intended function. NYSR00003 Degeneff Initial Test. at 42:14-18; Tr. 4287:23-24 (Degeneff);

Tr. 4359:18-19 (Degeneff); Tr. 4380:13-15 (Degeneff). Configuration refers to the arrangement of an objects physical parts. NYSR00414 Degeneff Rebuttal Test. at 20:20-23. A change in configuration is a physical change in the objects arrangement that affects how that object functions. Degeneff Rebuttal Test. at 20:23-21:2. For example, an electrical relay can change its configuration. NYS000016 (60 Fed. Reg. 22,461) at 22,477. None of the transformers physical parts change arrangement during operation, and therefore, a transformer does not change configuration. Degeneff Rebuttal Test. at 21:4-6.

84. Entergys witnesses assert that transformers experience a change in configuration or properties. ENTR00091 Entergy Test. at 10 (A23) (Rucker, Dobbs, Craig, McCaffrey). Although they explain what they allege to be a change in the transformers properties, they fail to explain how a transformer changes configuration. See, e.g., Entergy Test.

at 11 (A24) (Rucker, Dobbs, Craig, McCaffrey) (asserting that the transformer experiences changes in electric and magnetic properties but not discussing any change in configuration).

Similarly, Staffs witnesses assert that transformers change state, but do not allege that a transformer changes configuration. See, e.g., NRC000031 Staff Test. at 22 (A28) (Mathew, Ray)

(Transformers, in contrast, perform their intended function through a change in state.).

35

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

4. Transformers Do Not Experience A Change In Properties During Operation

85. A transformers properties include its turns ratio, winding conductor dimensions, insulation type and thickness, core dimensions, and cooling capability. NYSR00003 Degeneff Initial Test. at 9:10-19. These are the constituent parts of the transformer whose traits define the transformers function. NYSR00414 Degeneff Rebuttal Test. at 14:21-23. They remain the same before, during, and after a transformers operation. Degeneff Rebuttal Test. at 14:23-15:1; Tr. 4343:7-16 (Degeneff).

86. Entergys and Staffs argument that transformers are active devices hinges on their conflation of the properties of the electricity running through the transformer and the properties of the transformer itself. NYSR00414 Degeneff Rebuttal Test. at 11:12-15. Current, voltage, and magnetic field are not properties of a transformer. NYSR000003 Degeneff Initial Test. at 9:20-11:2; Degeneff Rebuttal Test. at 11:19-14:16; Tr. 4337:21-4340:7 (Degeneff).

Instead, they are properties of the electricity flowing through the transformer. Degeneff Rebuttal Test. at 12:7-8; 13:8-9. The change in current, voltage, and/or magnetic field that occurs as the electricity passes through a transformer does not have an effect on the properties of the transformer, which remain invariant. Degeneff Initial Test. at 11:3-12:11.

87. Dr. Dobbss testimony at the hearing demonstrates that the transformer is completely passive as electricity flows through it. Dr. Dobbs testified that the voltage that is transformed by the transformer is not actually created by the transformer, but instead is created by the generator (i.e., the power source) to which the transformer is connected:

DR. DOBBS: The voltage is created by charge separation.

JUDGE WARDWELL: And that was initially done by what?

36

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 DR. DOBBS: It was initially done by the generator. . . .What happens is the voltage was originally separated by the generator. But when we connect the transformer up to the generator current flows because current is trying to get back and reduce the charge separation.

Tr. 4326:2-19 (Dobbs, J. Wardwell) (emphasis added).

88. Moreover, Dr. Dobbs testified that the current does not flow through the transformer because of any action on the part of the transformer: What causes the current to flow is the electric field that is present when a voltage is present. Tr. 4321:3-5 (Dobbs). He explained:

DR. DOBBS: So now we are at the point that the generator through mechanical energy has separated the charge. That means that work has been performed to separate the charge. So we have created a potential difference which now is a voltage that can be measured.

Now as I said earlier, voltage does not force current to flow. Voltage simply indicates that current will flow. The reason for this is that nature always seeks the lowest possible energy state. Thats the reason water flows downhill.

Current will flow from the higher potential to the lower potential which is akin to flowing downhill. When that potential difference is hooked to a transformer, current will flow because it has now a path to get to the lower energy state.

Tr. 4322:21-4323:12 (Dobbs) (emphasis added).

89. Dr. Dobbs also testified that the magnetic field within the transformer is not created by the transformer, but instead, is created by the current flowing through the transformer:

DR. DOBBS: When current flows, thats charge motion. Theres a fact of physics that when charge moves it creates a magnetic field. . . . As that current flows into the primary winding of the transformer, it produces a magnetic field.

Tr. 4323:13-20 (Dobbs).

90. Dr. Dobbs explained that the magnetic field inside the transformer, which was created by the current, in turn creates voltage:

DR. DOBBS: Now as [current] flows through that core it will cause separation of charge because that coil presents some impedance to the flow of the current and so 37

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 youll have a build-up of charge on the top side and less charge on the exiting side.

Now the voltage it has created at this point is determined by Faradays Law. . . .So as you see the current flows because of the potential difference. The current creates the magnetism. And in actuality the magnetism creates the voltage.

Tr. 4323:25-4324:13 (Dobbs) (emphasis added).

91. As is evident from Dr. Dobbss testimony, the transformer is simply a conduit through which electricity flows. The properties of electricitycurrent, voltage, and magnetic fieldare manipulated as the electricity moves through the transformer. However, these changes are not due to any action on the part of the transformerinstead these changes are caused by electromagnetic induction dictated by the laws of physics and represented by Maxwells equations. See ENTR00091 Entergy Test. at 65 (A77) (Dobbs) ( electrical phenomena are described by Maxwells equations, which underlie electromagnetic theory and provide a basic description of all electromagnetic interactions). The transformer remains invariant as the electricity moving through it changes. Tr. 4339:3-4340:7 (Degeneff).

92. Dr. Dobbss argument that voltage and current are not properties of electricity rests upon a definition of electricity that is simply inapplicable to this contention. At the hearing, Dr. Dobbs testified that electricity is charge and therefore voltage and current are not properties [of electricity] because they do not always exist when charge exists. Tr. 4345:6-13 (Dobbs). However, Dr. Dobbs is referring to electric charge, as opposed to electric power. He states: [C]harge exists virtually everywhere. . . .virtually all mater is held together by electrical forces and electricity that is charge is present everywhere. This table is charge. You yourself are charge. But because the charge has not been separated, there is no voltage and no current.

Tr. 4345:6-4346:1 (Dobbs).

93. As explained by Dr. Degeneff, electricity, as we are referring to it in NYS-8, is not simply charge: Its a whole cadre of components together. Charge is one piece of it.

38

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Material characteristics are another. Tr. 4347:7-9 (Degeneff). In the context of Contention NYS-8, electricity refers to electric power, which is defined as voltage times current. See ENTR00091 Entergy Test. at 62 (A74) (Dobbs) (electrical power is defined by the equation:

Power = (Voltage) x (Current)). Electric power is what flows through a transformer and electric power cannot exist without current and voltage. NYSR00414 Degeneff Rebuttal Test. at 12:14-15; Tr. 4347:21-4348:5 (Degeneff). Even Dr. Dobbs acknowledged that electric power (a.k.a. electric energy) and electric charge are not the same and that electric energy is a force:

JUDGE WARDWELL: Is there a difference between energy and charge?

DR. DOBBS: Definitely. . . .

JUDGE WARDWELL: And theres a difference between electrical energy and electricity then. Is there?

DR. DOBBS: Electricity is charge. Electrical energy is energy that has to do with charge I would say. So they are related, but theyre not the same.

JUDGE WARDWELL: And energy is work. Am I correct if I remember my mechanics?

DR. DOBBS: Yes. Energy is work which is typically a force over a distance like pounds or newton-meters.

JUDGE WARDWELL: In the electricity world it is? Whats it expressed as?

DR. DOBBS: Its expressed as joules.

Tr. 4366:3-4367:4 (J. Wardwell, Dobbs) (emphasis added).

94. Dr. Dobbs argues that something cannot be a property of an object if it is created by an external force:

JUDGE WARDWELL: If something is caused by an external force, didnt you state that it is not inherent to an object and therefore cannot be a property of that object?

DR. DOBBS: I believe thats correct.

Tr. 4317:7-11 (J. Wardwell, Dobbs).

39

State of New York Findings of Fact and Conclusions of Law Contention NYS-8

95. Therefore, even under Dr. Dobbss own definition of property, current, voltage and magnetic field are not properties of a transformer because they are being created in the transformer by the electric power flowing through it, which is an external force being applied to the transformer. Degeneff Rebuttal Test. at 11:19-14:16.

96. Furthermore, at the hearing, Dr. Dobbs explained that a property is possessed by the object. So it has to follow the object. Tr. 4333:21-23. Under this reasoning, Dr. Dobbs argued that pressure and flow are not properties of water because if water is taken out of a gravitation field where its not acted upon by any external forces, then water will exhibit neither pressure nor flow. Tr. 4330:17-22 (Dobbs). According to Dr. Dobbs, since the pressure and flow do not follow the water, they are not its properties. Similarly, if a transformer is removed from a source and a load, it will have no current, no voltage, and no magnetic field. NYSR00414 Degeneff Rebuttal Test. at 16:4-9. Since current, voltage, and magnetic field do not follow the transformer, under Dr. Dobbss own reasoning, they are not its properties.

97. At the hearing, Dr. Degeneff testified that based on his forty years of experience in the transformer industry, he did not consider Dr. Dobbss opinions regarding a transformers properties to reflect the views of the electrical engineering community. Dr. Degeneff stated that Dr. Dobbss positionthat current, voltage, and magnetic field are the properties of a transformeris not a reasonable one. Tr. 4441:25-4442:18 (Degeneff).

5. Transformers Do Not Experience A Change In State During Operation

98. State refers to the condition of matter with respect to structure, form, constitution, phase, or the like. NYSR00414 Degeneff Rebuttal Test. at 20:8-9. For example, the Statement of Consideration for the 1995 license renewal rule mentions that a transistor can change its state. NYS000016 (60 Fed. Reg. 22,461) at 22,477. This occurs when a transistor 40

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 changes from a conductor to an insulator. Degeneff Rebuttal Test. at 20:8-19. Another example is water, which can change state from a liquid to a gas. Degeneff Rebuttal Test. at 20:8-10.

99. During its operation, a transformer does not experience a change in stateits constituent parts are exactly the same before the transformer is placed in service and during the period it is in service. NYSR00414 Degeneff Rebuttal Test. at 20:11-14. Unlike a transistor which changes state from a conductor to an insulator during operation, a transformer remains a conductor throughout its operation. Degeneff Rebuttal Test. at 20:14-16.

100. Therefore, Staffs witnesses are incorrect when they assert that a transformer is active because it changes state by transforming electrical energy into magnetic energy, then back into electrical energy again. NRC000031 Staff Test. at 11 (A19) (Mathew, Ray).

101. Similarly, NRC Staff guidance is also incorrect that 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. See ENT000097 (Letter from Christopher Grimes, NRC, to Douglas J. Walters, NEI, Determination of Aging Management Review for Electrical Components, Attach., Sept. 19, 1997) at 4.7 See also Tr.

4358:2-18 (Mathew) (discussing Staff guidance); Tr. 4360:7-4362:18 (Ray, Mathew) (referring to the Standard Review Plan, NEI 95-10, and Reg. Guide 1.188); NYS000161 (NUREG-1800, Final Report, Rev. 2, Standard Review Plan for Review of License Renewal Applications for Nuclear Plants, Dec. 2010) at 2.1-25; ENT000098 (NEI 95-10, Industry Guideline for Implementing the Requirements of 10 CFR Part 54 -The License Renewal Rule, Rev. 6, June 2005) at B-14, C-11 to C-12; and ENT000099 (Regulatory Guide 1.188, Standard Format and 7

The Grimes Letter was prepared in response to a request by the Nuclear Energy Institute. See ENT000097 at 1.

41

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Content for Applications to Renew Nuclear Power Plant Operating Nuclear Power Plant Operating Licenses, Rev. 1 (Sept. 2005)).

102. The change in state that Staffs witnesses and Staff guidance refer to is not a change in the transformers state but a change in the state of the electrical power moving through the transformer. In their written testimony, Staffs witnesses noted that the change in state they refer to is a change in voltage, current, and magnetic flux. NRC000031 Staff Test. at 11 (A19)

(Mathew, Ray); see Tr. 4355:11-13 (Mathew) (discussing the change in the electrical energy within the transformer). However, as explained above: the voltage is not created by the transformer, but by a generator; the current flows into the transformer due to the laws of physics; and the current (not the transformer) creates the magnetic flux. A transformer that is separated from a source and a load has no voltage, current, or magnetic flux, and is incapable of producing them. NYSR00414 Degeneff Rebuttal Test. at 19:4-9. Thus, current, voltage, and magnetic flux are not part of a transformers state. Degeneff Rebuttal Test. at 20:2-19.

103. Ms. Rays explanation of transformer operation at the hearing further demonstrates that a transformer does not experience a change in state. Ms. Ray testified that the voltage and current come into the transformer from an external source, and then create the magnetic field within the transformer, which in turn induces voltage and current on the transformers secondary winding: So youll have voltage and current coming into the transformer which then creates a magnetic field. And that magnetic field is collected in the core.

And then it induces a voltage and current on the secondary side. Tr. 4351:5-10 (Ray).

104. Later Ms. Ray testified that the alleged active behavior of the transformer is its changing magnetic flux: In order for the transformer to operate, there has to be a change in flux, and that changing magnetic flux is the change in state. Tr. 4376:24-4377:1 (Ray);

42

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Tr. 4384:10-12 (Ray) (we believe the transformer is an active component, based on the change in state, which is the changing magnetic flux.). However, Ms. Ray admitted that the magnetic flux is not caused by the transformer but by the current and voltage flowing through the transformer: So were stating that its the changing magnetic flux that creates the operation of the transformer. The transformer wouldnt operate without the changing magnetic flux which is due to the voltage and current. Tr. 4354:10-14 (Ray) (emphasis added).

105. Ms. Ray also admitted that a wire carrying current also has magnetic flux, but distinguished the transformer on the basis that the transformer collects the magnetic flux in its core. Tr. 4353:11-20 (Ray). However, Ms. Ray then admitted that although the transformer core is designed to collect the magnetic flux, the transformer does not actively collect the magnetic flux in its core:

MS. RAY: But the core is designed to collect the magnetic flux essentially.

JUDGE WARDWELL: Right. But its not doing it actively. Its not sweeping it up.

It doesnt have levers or gears or anything.

MS. RAY: No.

Tr. 4353:19-24 (Ray, J. Wardwell).

106. Ms. Rays testimony shows that Staffs assertion that changing magnetic flux makes transformers active devices is simply incorrect: the flux is not created by the transformer, but by the current moving through the transformer; wires (which are considered passive devices) also experience magnetic flux; and the transformer does not actively collect magnetic flux in its core. Furthermore, as Dr. Degeneff explained: The current is flowing in, in the primary winding, and around that primary winding is a magnetic field wholly dependent upon the amount of current, not the magnetic structure of the core. In other words, whether [transformers] have 43

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 an air core or an iron core, the flux is going to be the same. Tr. 4341:19-24 (Degeneff)

(emphasis added).

107. Entergys witnesses are also incorrect that a transformer changes state when it is energized from an electrical source, [because] it changes from an idle state to an active state.

ENTR00091 Entergy Test. at 11 (A24) (Rucker, Dobbs, Craig, McCaffrey). At the hearing, Dr.

Dobbs explained this assertion:

JUDGE WARDWELL: Can you define idle and define active states?

DR. DOBBS: Idle is not energized. Active is energized in performing its intended function.

JUDGE WARDWELL: And so youre saying that by turning the on/off switch to the on position changes it from an idle to an active state.

DR. DOBBS: Correct.

JUDGE WARDWELL: This definition, wouldnt all electrical devices change from an idle to an active state when you flip the switch?

DR. DOBBS: Id say yes. Thats on/off. Thats kind of like the digital situation I talked about earlier.

Tr. 4316:6-20 (J. Wardwell, Dobbs).

108. The earlier testimony Dr. Dobbs referred to was: in the terms of digital electronics, change of state typically refers to a transistor, when it changes in a digital circuit from on to off, 1 to 0. Tr. 4286:5-8 (Dobbs). Dr. Dobbss testimony shows that transformers do not change state when they are energized. Unlike transistors and other digital electronic devices, a transformer has no switch or ability to turn from on to off. A transistor can turn off by changing its state from a conductor to an insulator, but a transformer cannot and will always remain a conductor. NYSR00414 Degeneff Rebuttal Test. at 20:2-19. Instead, a transformer is 44

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 akin to a wire which simply receives electric power that is fed to it by a sourcethis does not constitute a change in state. NYSR00005 Degeneff Report at 23.

F. Transformers Are Similar To AMR-Included Components

1. Electric Cables 109. Transformers are similar to electric cables, both of which are passive devices involved in the transportation of electricity. NYSR00414 Degeneff Rebuttal Test. at 22:20-21.

In its most basic form, a transformer is simply two current carrying conductors or cables adjacent to each other. NYSR00003 Degeneff Initial Test. at 17:20-23; NRC000031 Staff Test. at 23, A30 (Mathew, Ray) (Dr. Degeneff is correct, in a theoretical sense, that two cables in close proximity to each other can function as a simple transformer).

110. When AC current passes through a cable, a varying magnetic field is generated around the cable. NYSR00003 Degeneff Initial Test. 23:17-24:1. Dr. Dobbs testified that the same is true of a transformer:

JUDGE WARDWELL: Is that magnetic flux in a cable constant at all times at a given point?

DR. DOBBS: No.

JUDGE WARDWELL: It increases and decreases as the alternating current passes through it; is that correct?

DR. DOBBS: Yes.

JUDGE WARDWELL: And thats the same thing with a transformer?

DR. DOBBS: Yes.

Tr. 4398:15-25 (J. Wardwell, Dobbs).

111. Cables are considered passive devices regardless of the fact that they experience changing magnetic flux during operation. See 10 C.F.R. § 54.21(a)(1)(i) (listing electrical cables 45

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 as included in AMR). The magnitude and phase of the currents through the cable and voltages across the cable may change, but the physical properties of the cable (e.g., conductor shape, material composition of the cable, cable insulation and the resultant resistance, capacitance per unit length) do not change during operation. NYSR00003 Degeneff Initial Test. at 18:2-7.

112. The physical laws that describe how the magnetic field is developed around a cable are exactly the same physical laws that describe how a magnetic field is developed in a transformer. NYSR00003 Degeneff Initial Test. at 18:8-11. In fact, in many applications two cables are laid parallel to each other in a raceway. Degeneff Initial Test. at 18:11-12. The equations that describe the electrical performance of these cables are exactly the same equations that describe the performance of a two winding transformer with no iron core. Degeneff Initial Test. at 18:12-15; Tr. 4379:24-4380:4 (Degeneff); Tr. 4408:19-4409:9 (Degeneff); NYS000416 (N. N. Hancock, Matrix Analysis of Electrical Machinery, 2nd Edition, Pergamon Press 1974).

Since a transformers function can be represented by the same equation as a cables function, a transformer should also be considered a passive device. NYSR00414 Degeneff Rebuttal Test. at 21:23-22:2.

113. At the hearing, Dr. Dobbs attempted to differentiate cables from transformers, arguing that transformers manipulate the magnetic flux created by the current, while cables do not. Tr. 4399:1-5 (Dobbs). He stated that in a transformer [t]he conductor is put into a coil, so as to manipulate the intensity and to furthermore manipulate the magnetic field, the transformer takes that coil and puts it around a ferromagnetic material such as iron. Tr. 4399:6-21 (Dobbs). However, the manipulation Dr. Dobbs describes is the result of the transformers unchanging construction details and the laws of physics, and therefore, is completely passive on the part of the transformer. See Tr. 4353:19-24 (Ray). Nothing in a transformer changes when 46

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 current creates a magnetic field within the transformer. NYSR00414 Degeneff Rebuttal Test. at 13:6-21.

114. The similarities between a cable and a transformer are relevant in determining whether a transformer is a passive device because the same elements that make it difficult to detect functional degradation in cables also make it difficult to detect functional degradation in transformers. NYSR00414 Degeneff Rebuttal Test. at 22:15-23:1. Just as aging degradation can cause embrittlement in cables that is difficult to detect, it can also cause embrittlement (reducing the degree of polymerization) in transformer insulation structures that cannot be detected simply by monitoring the voltage and current moving through the transformer. Degeneff Rebuttal Test.

at 23:32-24:1. The concern with both is exactly the sameas the insulation embrittles and degrades, the components ability to withstand electrical stress decreases. This decrease cannot be observed in the electrical performance of the transformer or the cable, and left undetected will lead to catastrophic insulation failures. Degeneff Rebuttal Test. at 24:1-6; See NYS000016 (60 Fed. Reg. 22,461) at 22,477-78 (discussing the difficulty of monitoring embrittlement in electric cables).

115. At the hearing, Entergys witness Mr. McCaffrey agreed that the life of the transformer depends mostly on the life of its insulation:

JUDGE WARDWELL: In the testimony at 21, New York states that The metals in the structure, magnetic circuit and windings are in general not subject to aging, as are non-metallic components. Thus, the life of the transformer depends mostly on the life of the insulation. Entergy, would you agree that the life of the transformer depends mostly on the insulation?

MR. McCAFFREY: I would agree that the majority of the components are associated with insulation. But there are metallic structures inside the transformer that can describe or limit the life of the transformer. The majority of it associated with the insulation qualities of the transformer.

Tr. 4274:19-4275:8 (J. Wardwell, McCaffrey).

47

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 116. In addition, functional degradation in cables and transformers can be measured in similar ways:

JUDGE WARDWELL: Do you, after hearing this mornings testimony, from what Entergys doing as part of its current licensing basis, do you believe that the types of tests that are run on transformers, in an effort to monitor its functional degradation, could be performed on cables? Which I believe is the heart of the argument. Ms. Ray led to why cables are different.

DR. DEGENEFF: On . . . a transformer, you would perform a Doble measurement, to look at the capacitance of the bushing, or the capacitance structure of the winding, and see if thats changed over time. With a cable, you could do exactly the same type of measurement . . . to see . . . if the capacitance of the insulating structure has changed. Youd look at resistivity measurements, resistivity of the transformer or resistivity of the cable. You could certainly do that. And so a critical component of the transformer is the bushing. A cable might be more easily measured in a similar fashion as we would look at a bushing.

Tr. 4380:16-4381:17 (J. Wardwell, Degeneff).

2. Pipes 117. Transformers are similar to pipes, both of which are passive devices involved in the transportation of mattereither electric power or fluid. Like the voltage of the power flowing through a transformer, the properties of fluids contained within a pipe can change.

NYSR00003 Degeneff Initial Test. at 18:19-21. The properties of such fluids include temperature, pressure, velocity, specific volume, specific weight, viscosity, density, etc. The phase of the fluid in a pipe may even change. Yet, a pipe itself is a component which is included within the scope of § 54.21(a) (1). A pipes diameter may narrow at a particular location or the pipe may contain a restriction (e.g., elbow, or tee) that may change the velocity and/or pressure of the fluid contained in the pipe however, the properties of the pipe itself have not changed. Degeneff Initial Test. at 18:21-19:6.

118. Stated differently, the properties of the contents of the pipe (a fluid) may change, but not the conduit (pipe). NYSR00003 Degeneff Initial Test. at 19:6-8. For example, when a 48

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 fluid passes through a pipe with a constriction, the amount of fluid that passes through the pipe is constant. The pressure of the fluid will change at the constriction, but the pipe remains invariant, its properties and characteristics unchanged. This is exactly the same situation with a transformer, in that power merely passes through a transformer. Degeneff Initial Test. at 19:11-

17. It is the unchanging physical properties of the transformer that cause that power to change voltage at a ratio determined by the transformers unchanging design properties. Different amounts of power may be applied to a transformer, but the voltage will always change at the same ratio, because the unchanging properties of the transformer dictate only one turns ratio.

Degeneff Initial Test. at 19:17-23.

119. In his written testimony, Dr. Dobbs misrepresents the analogy between a pipe and a transformer, and fails to properly relate Bernoullis equation. NYSR00414 Degeneff Rebuttal Test. at 24:22-25:1. As an initial matter, since Dr. Dobbs admitted at the hearing that he does not have expertise in fluid dynamics, his testimony on this topic should be afforded little or no weight. Tr. 4403:13-4404:25 (Dobbs, J. Wardwell). Moreover, the proper analogy between a transformer and a pipe with a changing diameter is as follows:

• The power delivered into the transformer (S-in, e.g., MVA or electrical power) is the same as the power flowing out S-out) of the transformer (the transformer may induce a change in voltage, yet the power remains unchanged). In other words S-in =

S-out. The analogy with the pipe is that the volume of fluid per unit time in (Q-in e.g., cubic feet/sec) is equal to the volume of fluid per unit time flowing out (Q-out) or Q-in = Q-out.

• The voltage into the transformer (V-in) is analogous to the area of the pipe at its start (A-in). The voltage out of the transformer (V-out) is analogous to the area of the pipe at its termination (A-out).

• The current flowing into the primary winding of the transformer is analogous to the velocity of the flow into the pipe. The current flowing out of the transformers secondary winding is analogous to the velocity of the fluid flowing out of the pipe.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8

• The turns ratio of the transformer (which is invariant) dictates the relationship between the voltage in and the voltage out of the transformer, e.g., N = V-in/V-out.

In like manner, the relationship between the area of the pipe in to that of the area of the pipe out (which is also invariant) is N = A-in/A-out.

• The current into the transformer divided by the current out of the transformer is inversely proportional to N, the turns ratio or (V-in/V-out). In an analogous manner, the velocity of the fluid flowing into the pipe divided by the velocity of fluid flowing out of the pipe is inversely proportional to N, the area of the pipe in divided by the area of the pipe out (A-in/A-out).

Degeneff Rebuttal Test. at 25:1-26:10.

120. The pipe with a change in diameter is considered a passive device. Since the transformer is performing an analogous transformation it must also be considered a passive device. NYSR00414 Degeneff Rebuttal Test. at 26:11-13. In both cases, the transformer and the pipe with a changing diameter, the fact that electric power or a fluid flows through each device does not change the properties of either device. Just as the unchanging properties of a pipe cause the change in the fluid, the unchanging properties of the transformer cause the change in the electricity moving through it. Degeneff Rebuttal Test. at 26:13-19.

121. NRC Staffs witnesses attempt to distinguish transformers from pipes, arguing that transformers are not like pipes because pipes can transport fluid without changing its properties, but transformers cannot transport power without changing its current or voltage.

NRC000031 Staff Test. at 22 (A29) (Mathew, Ray). However, this assertion is simply incorrect.

The electricity flowing through the transformer need not undergo a change during transformer operation. NYSR00414 Degeneff Rebuttal Test. at 26:20-27:3. Normally, the transformer is used to adjust the voltage of the power flowing through the transformer, but if the turns ratio is 1 to 1 then the power transmitted through the transformer will remain at the same voltage. This type of transformation is often used in power quality applications. By providing isolation, a transformer with a turns ration of 1 to 1 reduces electrical noise. In such a situation, the current 50

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 and voltage of the electricity flowing through the transformer would not undergo any change.

Degeneff Rebuttal Test. at 26:4-12.

122. At the hearing, NRC Staffs witness Ms. Ray attempted to distinguish both pipes and cables from transformers on the ground that the fluid or power flowing into a pipe or cable is the same fluid or power that flows out of the them, whereas the power flowing into the transformer is in some way distinct from the power flowing out of it. Tr. 4351:18-24 (Ray). At first, Ms. Ray stated that she was sure the electrons in the power flowing in and the power flowing out of the transformer are different. Tr. 4351: 25-4351:8 (Ray). However, upon further questioning, she admitted that there is no way of knowing whether this is true. Tr. 4351:9-20 (Ray). What is certain is that the same amount of power that flows into a transformer also flows out of itas is the case with the matter flowing through a pipe or cable. NYSR00003 Degeneff Initial Test. at 7:5-16. In any case, a change to the matter flowing through these devices does not change the properties or state of the devices themselves. Degeneff Initial Test. at 14:7-9 and 18:2-7.

3. Steam Generator and Heat Exchanger 123. The example of the steam generator (a type of heat exchanger) demonstrates why current, voltage, and magnetic field are not properties of the transformer. The steam generator and the transformer have similar purposesone transforms water and the other transforms electric power. A steam generator operates by turning liquid water into steam. Just as the power moving through the transformer changes state from electrical energy to magnetic energy, the water moving through the steam generator changes state from liquid to steam. Yet, the steam generator is considered a passive device and included in 10 C.F.R. § 54.21(a)(1)(i). NYSR00003 Degeneff Initial Test. at 20:1-20; NYSR00414 Degeneff Rebuttal Test. at 27:14-28:15.

51

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 124. The example of the steam generator also shows that Dr. Dobbss definition of an objects properties is wrong. Dr. Dobbs argues that a property is something that is inherent to an object, and something is inherent to an object if you cannot describe what that object does without referring to that thing:

DR. DOBBS: So we cannot describe what a transformer is or what it does without referring to the magnetic field, the terminals, voltages and currents. To me thats inherent. . . . In order to derive transformer operation, you must refer to the magnetic field. Therefore, magnetic field must be considered a property of the transformer.

Its inherent to the transformer. Its necessary for its operation.

Tr. 4335:17-4336:5 (Dobbs).

125. Clearly, one cannot describe what a steam generator is or what it does without referring to water. Water is necessary for a steam generators operation and water changes state during a steam generators operation. Yet, these facts do not make water a property of the steam generator, for if they did, a steam generator would not be considered a passive device, included in 10 C.F.R. § 54.21(a)(1)(i).

126. At the hearing, Dr. Dobbs attempted to overcome the obvious similarities between transformers and steam generators by arguing:

DR. DOBBS: My technical position is that 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. So therefore, comparison of electrical components with fluid components is superficial at best, okay.

Tr. 4402:24-4403:6 (Dobbs).

However, upon further questioning, Dr. Dobbs admitted that he does not have expertise in the field of fluid dynamics and that he is not familiar with the rules and equations used in that field. Tr. 4403:10-4404:25 (Dobbs). As such, Dr. Dobbss opinion on this matter should be afforded little or no weight.

52

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 127. While NRC Staffs witness Ms. Ray admitted that the fluid moving through the heat exchanger and steam generator does change state, she attempted to distinguish transformers from steam generators and heat exchangers on the ground that transformers are readily monitorable, while steam generators and heat exchangers are not:

JUDGE WARDWELL: What about a heat exchanger? Isnt that separate? Theres a transfer of state there, and theres also a break in the exchange of the heat. Wouldnt that be similar to a transformer?

MS. RAY: Yes, but the performance is not readily monitorable. Youd have to do specific tests. Whereas with a transformer, there is a battery of tests that you can perform, to track the aging degradation.

JUDGE WARDWELL: And would you say the same thing in regards to a steam generator?

MS. RAY: Yes, I would.

Tr. 4377:18-4378:6 (J. Wardwell, Ray); NRC000031 Staff Test. at 23 (A31) (Ray, Mathew).

128. Ms. Rays attempt to distinguish the steam generator from the transformer fails.

First, it is important to note that whether or not a component is readily monitorable is not one of the criteria listed in 10 C.F.R. § 54.21 for determining whether Aging Management Review is required. See 10 C.F.R. § 54.21(a)(1)(i). Second, just like steam generators and heat exchangers, a transformers internal health (i.e. the extent of its age related degradation) can only be determined through testing. Therefore, aging degradation is not readily monitorable in transformers. Tr. 4381:18-4383:6 (Degeneff).

129. NRC Staffs witnesses Ms. Ray and Mr. Mathew admitted at the hearing that they are not familiar enough with fluid dynamics to comment on the relative similarities or dissimilarities between equations that model fluid dynamics compared to those of electrical phenomena. Tr. 4407:17-4408:2 (Ray, Mathew). Therefore, their testimony regarding this topic should be afforded little or no weight.

53

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 130. Dr. Degeneff, on the other hand, demonstrated his knowledge of fluid dynamics at the hearing and testified that many of the same equations are used in fluid dynamics and electrical engineering. Tr. 4406:13-4407:16 (Degeneff). Therefore, Dr. Degeneffs opinion that transformers are similar to steam generators and heat exchangers is entitled to greater weight than Entergys or Staffs witnesses opinions.

4. Reactor Vessel 131. The reactor vessel also demonstrates that a component is not considered active merely because the external materials moving through that component change configuration, properties, or state. The nuclear fuel within the reactor vessel changes properties and/or state, yet the reactor vessel itself is considered a passive component. NYSR00003 Degeneff Initial Test. at 20:11-23; NYSR00414 Degeneff Rebuttal Test. at 28:7-12.

132. Dr. Dobbs is incorrect that the only reason the reactor vessel, heat exchanger, and steam generator are included in Aging Management Review is because they serve as pressure retaining boundaries. ENTR00091 Entergy Test. at 73 (A79) (Dobbs). These components are included because they do not experience a change in configuration, properties, or state. See 10 C.F.R. § 54.21(a)(1)(i). If the materials moving through these components were considered the properties of the components themselves, then they would not be considered passive.

Accordingly, the properties of the electric power flowing through the transformer should not be considered the transformers properties. NYSR00414 Degeneff Rebuttal Test. at 27:14-28:15.

54

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 G. Transformers Are Dissimilar To AMR-Excluded Components

1. Batteries 133. Unlike a transformer, a battery changes properties during operation. NYSR00414 Degeneff Rebuttal Test. at 10:4-8. A battery produces electrical energy through a chemical reaction. The electrolytic properties of the chemicals of which the battery is composed change as the battery discharges. NRC000031 Staff Test at 20 (A27) (When a battery is working, the electrolyte properties change during discharge); NYS000016 (60 Fed. Reg. 22,461) at 22,477 (a battery changes its electrolyte properties when discharging.).

134. In contrast, only the properties of the power flowing through a transformer change. The key properties of a battery that has been discharged will be different from a full battery, but the key properties of a transformer that has had power flow through it will not be different from the properties of a transformer which has not been used. NYSR00003 Degeneff Initial Test. at 26:3-14.

2. Transistors 135. A transformer is unlike a transistor because a transistor must change its properties and/or state in order to perform its intended function. NYSR00003 Degeneff Initial Test. at 21:1-12. Transistors are commonly three wire solid state devices initially made from germanium (Ge) and silicon (Si) semiconductor material. NYSR00005 Degeneff Report at 8.

136. As a semiconductor device, one of a transistors properties is its electrical resistance, which can be made to vary between that of a conductor (full flow or very low resistance) and that of an insulator (very low flow or very high resistance). The transistor cannot change the properties of the power flowing through it unless it also changes its own resistivity.

NYSR00003 Degeneff Initial Test. at 21:12-22.

55

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 137. A transistor relies on external power to operate (like a transformer) but also (unlike a transformer) requires an external source of energy to control or determine its resistance.

NYSR00005 Degeneff Report at 9. The change in resistivity that occurs in a transistor can be thought of as a valve whose position may be changed through an external electric stimulus. A small change in the voltage input to a basic transistor gate drive changes the resistance of the semiconductors main conducting path. As a result of this applied control voltage, the transistor changes its resistance and, depending upon the gate control input, will act as an insulator, conductor, or variable resistor controlling large currents in its main conducting path.

NYSR00003 Degeneff Initial Test. at 21:22-22:7.

138. When a transistor, such as a silicon controlled rectifier, moves from a conductor to an insulator (or vice versa), it undergoes a change in state. NYSR00005 Degeneff Report at 8.

The Statement of Consideration specifically cites this change in state as the reason for excluding transistors from AMR:

Further, the Commission has concluded that a change in configuration or properties should be interpreted to include a change in state . . . For example, a transistor can change its state and therefore would not be screened in under this description.

NYS000016 (60 Fed. Reg. 22,461) at 22477.

139. Unlike the transistor, which is designed to change its resistivity, the transformer cannot change its resistivity and therefore, always remains a conductor. NYSR00414 Degeneff Rebuttal Test. at 20:14-15. Furthermore, a transformers properties are completely independent of the electrical power applied to it. NYSR00003 Degeneff Initial Test. at 22:20-21. The turns ratio, which determines how the power is transformed, is designed and built into the transformer when it is assembled. This is one of the transformers unchanging properties and regardless of the amount of power fed to the transformer, it will always transform the power at that fixed ratio.

56

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 If a transformer were like a transistor, the ratio between the voltages of input and output power would depend on the amount of power and the size of the load. This does not occur, however, because unlike a transistor, the transformer does not change its properties or state during operation. Degeneff Initial Test at 22:21-23:6.

140. Dr. Dobbs is incorrect that the change in resistivity in a transistor is directly analogous to the change in magnetic field inside a transformer. Magnetic field is not a property of a transformer. It is created by the electric current flowing through the transformer and therefore, it is not present when the transformer is not connected to a source and a load.

Resistivity is a property of both a transformer and transistor. However, a transistor is designed to change its resistivity, while a transformers resistivity is invariant. As a result, a transistor can change from a conductor to an insulator, but a transformer will always remain a conductor.

NYSR00414 Degeneff Rebuttal Test. at 28:16-30:3.

3. Power Inverter and Power Supply 141. Unlike a transformer, a power inverter and power supply must change state in order to perform their intended functions. A power inverter takes direct current power and converts it into alternating current power, while a power supply takes alternating current power and converts it into direct current power. Like transistors, power inverters and power supplies have external controls that cause a change in their properties and/or state. NYSR00414 Degeneff Rebuttal Test. at 31:9-14.

142. Inverters convert power by controlling the magnitude, frequency and wave shape of the output power. The external control allows the power inverter to vary the relationship between the input and output power (e.g., to decrease or increase the magnitude, frequency, and wave shape of the power) by changing the properties and/or state of its own components. For 57

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 example, the power inverter is composed of semiconductors which change their resistivity during operation. This is wholly unlike the transformer, which does not rely on an external control to change its properties and/or state. In a transformer, the relationship between the input and output power is fixed and determined by the characteristics of the power fed into it and the load supplied by it. Moreover, the transformer will not change the magnitude, frequency or wave shape of the power flowing through it. NYSR00003 Degeneff Initial Test. at 26:15-27:8.

143. In power supplies, an electric control circuit, apart from the main circuit, converts the bulk power. The external control will adjust the properties of the power supply (such as its resistivity) to deliver the desired voltage and current to the load that is being supplied. The voltage and current supplied by the transformer, on the other hand, depend on the properties of the load, itself, and not on the properties of the transformer, which only determines the turns ratio. The power supply, decides, so to speak, what kind of power to supply to the load, whereas the transformer can only supply the power that the load requires. NYSR00003 Degeneff Initial Test. at 27:9-28:3.

144. Dr. Dobbs unconvincingly argued that one cannot look at the internal changes to the properties and/or state of the transistor, power inverter, or power supply because they are in the AMR excluded list without any description. That is, there is no description of whats inside, how they operate or anything else. Tr. 4370:9-15 (Dobbs); ENTR00091 Entergy Test. at 44 (A61) (Dobbs). On the contrary, how these devices operate and whether they change configuration, properties or state during operation, are the chief inquiries here.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 H. Age Related Degradation In Transformers Is Not Readily Monitored

1. The Internal Condition of A Transformer Cannot Be Assessed By Monitoring Its Performance 145. Performance monitoring simply determines if a transformer is supplying power at the desired current and voltage. Tr. 4248:8-12 (Degeneff). Like many of the components included in the list for AMR, transformers will experience various kinds of age related degradation that are not detectable by performance monitoring. In fact, transformers experiencing age related degradation can continue to function with no observable change in operation until the moment when they fail catastrophically. NYSR00005 Degeneff Report at 14; Tr. 4248:21-25 (Degeneff). Frequently, performance monitoring will indicate only that a transformer has failed or will fail imminently.

146. In 2006, IEEE published a report listing failure modes of transformers and methods for detecting those failures before they occur. NYS000017 (IEEE Guide for the Evaluation and Reconditioning of Liquid Immersed Power Transformers, IEEE Std C57.140TM-2006, April 2007) at 11-15. In 1994, Sandia National Laboratories published a report identifying aging degradation mechanisms for transformers. NYS000018 (Sandia, Aging Management Guideline for Commercial Nuclear Power Plants Power and Distribution Transformers, SAND93-7068, UC-523, Unlimited Release, May 1994) at 4-1 to 4-23. These reports make clear that while some modes of transformer failure can be detected by performance monitoring, there are significant transformer failure modes that involve aging degradation of transformer components that do not affect transformer operating performance until the transformer fails.

NYSR00005 Degeneff Report at 14.

147. For example, polymerizationthe disintegration of longer polymer chains into smaller polymer chainsresults from normal transformer operation and diminishes the 59

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 insulation integrity of the transformer windings. Polymerization has a dramatic effect on the electrical strength of the transformer, but until an electrical failure occurs, polymerization does not affect the operating characteristics of the transformer. NYSR00003 Degeneff Initial Test. at 31:13-19.

148. Likewise, diminishment in the mechanical and structural integrity of the transformers core and coil assembly may have no effect on the operating characteristics of the transformer, until a loose core and coil assembly result in a devastating short circuit failure of the transformer. Over time, as insulation compacts, the coil assembly will become less tightly packed, and thereby less able to withstand a short circuit. NYSR00003 Degeneff Initial Test. at 32:8-15.

149. Individual windings may also deform and affect adjacent windings, leading to internal arcing in the insulation structure. Such deformation can occur due to the movement of windings with age, use, or abuse. This internal arcing would have no effect on the operating performance of the transformer until it causes failure. NYSR00003 Degeneff Initial Test. at 32:19-33:2.

150. In addition, movement of the winding structure due to a short circuit fault in the system could cause a catastrophic insulation failure, but until the failure occurs, will have no effect on the operating performance of the transformer. NYSR00003 Degeneff Initial Test. at 33:11-14.

151. A corona or radio interference voltage (RIV) generated by the transformer will also have no effect on the operating performance of the transformer but is a sure indication of a problem with the transformer. NYSR00003 Degeneff Initial Test. at 33:15-23.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 152. At the hearing, NRC Staffs witness Ms. Ray admitted that performance monitoring will not give an indication of the internal health of a transformer:

MS. HESLIN: Can you assess the internal health of a transformer simply by monitoring the current and voltage exiting the transformer?

MS. RAY: I would say that there are a number of tests that are performed to monitor the internal components of the transformer. The voltage and current are not the only things.

MS. HESLIN: So you have to perform condition monitoring to assess the internal health of the transformer?

MS. RAY: The voltage and current can give you some indication of a problem. But yes, I would believe that tests would be required to determine exactly internal components.

Tr. 4448:6-22 (Heslin, Ray).

153. Ms. Ray also admitted that testing is necessary to predict the remaining qualified life of transformers:

JUDGE WARDWELL: [W]hat is your impression, Ms. Ray, of the track record of using these changes in this electrical performance, in predicting the remaining qualified life of transformers?

MS. RAY: I would say youd have to use the electrical information, as well as some of the other tests, such as [those for] an oil-filled transformer. The oil tests can give you a great deal of information regarding the degradation of the components of the transformer.

Tr. 4268:2-12 (J. Wardwell, Ray).

154. Similarly, Entergys witness Mr. McCaffrey acknowledged that voltage is not used to indicate aging degradation in transformers and that testing is required to assess transformer health:

JUDGE WARDWELL: [I]ts not that you see the voltage gradually dropping as the transformer ages, such as its something that could be plotted out and estimate the service life remaining of the transformers?

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 MR. MCCAFFREY: No. Typically, voltage is not used as an aging, you know, criteria for determining its life. Some of the other tests we do, which we run, are used directly to determine its life cycle management.

Tr. 4271:2-12 (J. Wardwell, McCaffrey).

155. Finally, performance monitoring may not even detect the functional failure of a transformer at Indian Point. Entergys and Staffs witnesses assert that if voltage conditions are outside the defined rangeindicating functional transformer failurethen operators are alerted through automatic actuation of an alarm. ENTR00091 Entergy Test. at 107 (A116) (McCaffrey, Rucker, Craig); NRC000031 Staff Test. at 15 (A21) (Mathew, Ray); Tr. 4270:5-15 (McCaffrey);

Tr. 4410:9-21 (Mathew). Contrary to this assertion however, the protective relays on which Indian Point relies for performance monitoring may not even detect open phase fault conditions affecting transformers. At the hearing, Dr. Degeneff explained that NRC Staff has identified design vulnerabilities or situations where the protective relaying in an open conductor situation doesnt pick up the fault situation, and a transformer failure then could . . . lead to a safety problem. Tr. 4441:18-24 (Degeneff).

156. NRC Bulletin 2012-01 discusses a design vulnerability of the electric power system that can prevent the onsite and offsite electric power systemincluding in-scope station auxiliary transformersfrom being able to perform its intended safety functions. NYS000468 (NRC Bulletin 2012-01: Design Vulnerability in Electric Power System, Jul. 27, 2012). The Bulletin requests that licensees provide information, such as transformer configurations, to assess this condition. NYS000468 at 6-7. Entergys response to NRC Bulletin 2012-01 indicates that Indian Point Unit 2 and Unit 3 have this design vulnerability, which affects the electric power systems ability to detect an open phase fault condition. NYS000469 (Entergy Letter, NL 141, 90-Day Response to Bulletin 2012-01, Design Vulnerability in Electric Power System, 62

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Indian Point Units 2 & 3, Docket Nos. 50-247 and 50-286, License Nos. DPR-26 and DPR-64, Oct. 25, 2012). Entergy notes: The relay systems were not specifically designed to detect an open single phase of a three phase system. . . . [E]xisting electrical protective devices are sufficiently sensitive to detect design basis conditions like a loss of voltage or a degraded voltage, but were not designed to detect a single phase open circuit condition. NYS000469 at 4.

157. Indian Points inability to detect this condition is significant because the same condition led to an automatic reactor trip at Byron Station Unit 2 on January 30, 2012.

NYS000468 at 2. Describing the event, the NRC Bulletin noted: Even though phase C was on an open circuit condition, the SATs [system auxiliary transformers] continued to provide power to the 4.16-kV ESF buses A and B because of a design vulnerability revealed by this event.

NYS000468 at 2. If a transformer failure at Indian Point caused this condition, it would go unnoticed by operators performance monitoring. Tr. 4441:18-24 (Degeneff).

2. Condition Monitoring May Not Detect Aging Degradation In Transformers 158. Condition monitoring uses testing to assess the internal health of a transformer.

Tr. 4248:8-20 (Degeneff). While condition monitoring gives a better picture of transformer health than performance monitoring, aging degradation is also difficult to detect through testing.

At the hearing Entergys witness Mr. McCaffrey stated:

MR. McCAFFREY: I believe we have ENT000125 is our life-cycle management program. Its the results of all this preventive maintenance activities and trending.

Its put together for our results of how are transformer health is going. As the staff mentioned, we dont identify, the program is not -- the industry cannot identify right now every single potential failure mechanism in the transformer and identify all those failures and prevent [them] from happening, but these are the collective practices right now the industry is using for monitoring transformer health and we use that to identify the degrading trends in our transformers.

Tr. 4255:4-17 (McCaffrey) (emphasis added).

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 159. Some transformer tests may reveal broad information about the degree of polymerization in a transformer, but insulation degradation is not uniform and a visual inspection is necessary to determine whether the polymerization is occurring to a small degree and without significant risk throughout the insulation or whether it is occurring intensely and with significant risk at a small amount of locations. NYSR00003 Degeneff Initial Test. at 32:1-7.

160. Similarly, diminishment in the mechanical and structural integrity of the core and coil assembly is detectable only through visual inspection because it does not produce any of the electrical or chemical tracers picked up by other tests. NYSR00005 Degeneff Report at 15; NYSR00414 Degeneff Rebuttal Test. at 40:1-7.

161. Although a dissolved gas analysis could produce some evidence of insulation failure or hotspots, a relatively frequent inspection interval is required to identify whether the problem is worsening, and even then, such testing will not be able to identify the specific places within the winding where the degradation is occurring, since the coil assembly may contain 2,000 or more turns. NYSR00003 Degeneff Initial Test. at 33:2-9.

162. Also, although an acoustical test could identify the existence of a corona or RIV, a visual inspection is required to identify the actual flaw in the transformer that is causing the corona or RIV. NYSR00003 Degeneff Initial Test. at 33:20-23.

163. Entergy has also recognized that some conditions can only be detected by internal inspections. Entergys Large Power Transformer Status Report discussed degradation in a transformer at Entergys Arkansas Nuclear One (ANO2) plant that was not observable from the dissolved gas analysis or other tests, but only found through an internal inspection:

The recent degradation of the AN02 Main transformer resulted from the GE Dyna Compression Clamp which is used to support transformer windings was not able to provide its function. This failure indicates that dissolve gas analysis and other PM maintenance tasks are not sufficient to identify all non-random degradation 64

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 mechanisms internal to the transformer since no indication of this degradation mechanism was observable with existing maintenance strategy. It is postulated that normal transformer vibration or through fault currents could have resulted in grounding of the windings resulting in transformer failure. The degradation was identified during an internal inspection triggered by external oil leaks and the transformer was replaced during the ANO outage as emergent work.

NYS000040 (EN Large Power Transformer Status, Feb. 15, 2007) at 2-3 (emphasis added).

164. Based on this finding, Entergys Large Power Transformer Status Report recommended that the Entergy conduct internal inspections of transformers:

Based on possible mitigation of catastrophic failure mechanisms transformer internal inspections should proceed on the fleets older transformers ASAP to ensure reliability; the fleet has 11 transformers placed in service in late 1960 to mid 1970 that have not had internal inspections performed. Other transformers should be scheduled for inspection based on failure impact; all transformers should be inspected on a fixed frequency.

NYS000040 at 2.

165. That report noted that internal inspections have been performed on only three of the eight large power transformers at Indian Point, and that one of those three inspections occurred over ten years ago. It also stated that Entergys preventive maintenance plan for transformers should be revised to require a fixed frequency internal inspection to identify degradation during planned outages. NYS000040 at 3.

I. The Transformer Preventive Maintenance Program Does Not Provide A Reasonable Assurance That Transformer Functionality Will Be Maintained In The License Renewal Period

1. Transformer Maintenance Under the Maintenance Rule Is Minimal 166. At the hearing, Staff and Entergy witnesses explained that SSCs within the scope of the maintenance rule fall under two categories(a)(1) or (a)(2). Tr. 4247:2-35 (Mathew);

4445:8-23 (Craig). Those SSCs in the (a)(1) category are regulated under 10 C.F.R. § 50.65(a)(1), which requires that the licensee monitor their performance or condition against 65

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 licensee established goals in a manner sufficient to provide a reasonable assurance that they are capable of fulfilling their intended functions. 10 C.F.R. § 50.65(a)(1). Those SSCs in the (a)(2) category are regulated under 10 C.F.R. § 50.65(a)(2), which does not require performance or condition monitoring or a reasonable assurance, but instead requires only preventive maintenance. 10 C.F.R. § 50.65(a)(2). The SOC for the license renewal rule states: An effective preventive maintenance program is required under § 50.65(a)(2) if monitoring under § 50.65(a)(1) is not performed. NYS000016 (60 Fed. Reg. 22,461) at 22,470.

167. The transformers at Indian Point fall under the (a)(2) category. NRC Staffs witness Mr. Mathew explained: (a)(2) is the normal performance monitoring you do with the Preventive Maintenance Program. And New York exhibit8 shows what preventive maintenance Entergy is doing for those transformers. Tr. 4247:11-14 (Mathew). Furthermore, Entergys Pre-Filed Testimony states: Entergy uses industry standard preventive and predictive maintenance techniques on its large oil-filled transformers. . . . Predictive maintenance results are monitored and trended to identify degrading conditions within transformers. ENTR00091 Entergy Test. at 97 (A108) (McCaffrey, Rucker) (emphasis added).

168. Therefore, under the maintenance rule, the transformers at Indian Point are receiving only preventive maintenancenot condition monitoring. This is the minimum amount of maintenance required under the maintenance rule and is a much less rigorous form of monitoring than is required under either the (a)(1) category of the maintenance rule or the license renewal rule.

8 Mr. Mathew did not give an exhibit number or state the name of the exhibit to which he was referring.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8

2. The Transformer Maintenance Program Has Been Unable To Prevent Numerous Transformer Failures 169. Because aging degradation is not readily monitored in transformers, the minimal preventive maintenance performed under the maintenance rule often fails to detect aging degradation in advance of transformer failure. Since 2007, transformers have failed catastrophically at seventeen nuclear power reactors, including: Indian Point Unit 2 and Indian Point Unit 3; Limerick Generating Station, Unit 2; Diablo Canyon, Unit 2; North Anna, Unit 2; Oyster Creek (three times); LaSalle County Station, Units 1 & 2 (twice); Comanche Peak, Unit 1; Fermi, Unit 2; Salem, Unit 1; Sequoya Nuclear Plant; Watts Bar; Turkey Point, Unit 3; Perry Nuclear Power Plant; Monticello Nuclear Generating Station; and James A. Fitzpatrick Nuclear Power Plant. See NYS000022-NYS000033; NYS000035-NYS000037; NYS000470; and NYS000471 (various event reports discussing these transformer failures). In addition, manual reactor scrams due to the loss of transformer cooling occurred at the River Bend Station and Grand Gulf Nuclear Station. NYS000019 at 1.

170. Five of the recent transformer incidents occurred at nuclear plants owned and operated by EntergyIndian Point Unit 3, Indian Point Unit 2, James A. Fitzpatrick Nuclear Power Plant, River Bend Station, and Grand Gulf Nuclear Station. See NYS000032, NYS000470, NYS000471; and NYS000019. In three of these incidents, a transformer exploded and/or caught on fire and caused the sudden automatic shut down of the plants nuclear reactor (referred to as a reactor scram or reactor trip). See NYS000032, NYS000470, NYS000471.

As NRC Staffs witness Mr. Mathew noted at the hearing, these events pose safety issues to nuclear plants: Any time a reactor scram happens, it challenges the safety systems. Tr.

4284:16-17 (Mathew).

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 171. The transformer failure at Indian Point Unit 3 occurred on April 6, 2007, when a fault occurred on the phase B bushing of the No. 31 main transformer, resulting in an automatic reactor trip and transformer explosion and fire. NYSR00005 Degeneff Report at 18. At the hearing, Dr. Degeneff testified that this failure was caused by aging degradation, which had gone unnoticed by Entergys preventive maintenance program. Tr. 4437:10-4438:12 (Degeneff). The failed bushing was installed in 1976 and was approximately thirty-one years old when it failed.

NYS000032 at 6. Entergy concluded that the likely cause of the bushing fault was that over the course of its thirty-one years in service, gas bubbles formed in the bushing oil, which resulted in dielectric breakdown causing it to fail to condense the voltage. The voltage then exited at the weakest point and arced to the steel transformer tank leaving a hole in the bushing conductor and causing a rapid increase in combustible gases. NYS000032 at 6. As the bushing operated for thirty-one years without incident, it did not suffer from a design defect. Instead, this condition developed over time and resulted from aging degradation. TR. 4437:15-4438:12 (Degeneff).

172. Entergys Large Power Transformer Status report shows that Entergy was aware that the type of bushing at issue in the failure at Indian Point Unit 3 was subject to aging degradation that could cause failure:

GE type U bushings manufactured up to 1980 have a slow degradation mechanism that results in eventual failure. The issue is associated with HV, LV and neutral bushings provided by GE prior to 1980 to various transformer manufacturers. Spare bushings should be on hand in the event Doble measurements taken as part of the PM program indicate replacement required. HV bushing replacement lead times are excessive ~34 weeks.

NYS000040 at 1; Tr. 4438:3-9 (Degeneff).

173. Nonetheless, Entergy took no action in the month prior to the failure when testing of the bushing indicated that it had elevated Doble power factor readings. NRC inspectors faulted Entergy for failing to identify this condition prior to the transformers failure:

68

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 Entergy failed to identify in the corrective action program an adverse condition associated with the B phase high voltage bushing on the 31 main transformer (MT) that was discovered during testing. The data from that test indicated potential degradation of the B phase high voltage bushing. As a result, this condition was not adequately evaluated before placing the transformer back in service, and the bushing subsequently failed.

ENTR00347 at iii; Tr. 4438:7-4439:8 (Degeneff).

174. The transformer failure at Indian Point Unit 2 occurred on November 7, 2010 when the B Phase bushing of the 21 Main transformer experienced a ground fault, which resulted in an explosion in the transformer, the leak of 14,000 gallons of transformer oil into the Hudson River and the automatic reactor trip of Unit 2. NYSR00005 Degeneff Report at 21; NYS000032. The bushing fault was caused by electrical treeing which caused the breakdown of the bushing insulation structure so that it could not withstand its normal voltage stresses.

175. Although the bushing on the 21 Main Transformer was installed in 2006, at the time of the failure it had not been Doble tested for two years and seven months. NYS000032 at 4 (stating that the last Doble Test was April 7, 2008). Furthermore, at that time, bushings were tested only once every four years. ENT00130A (Entergy, 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) at 11. As a result of the failure, Entergy increased its testing from a four year interval to a two year interval. ENT00130A at 11. However, Entergys Root Cause Evaluation Report found that even a two year testing interval could not detect rapid or sudden bushing deterioration. ENT00130A at 12. Although Entergy found that continuous bushing monitors could detect rapid deterioration, and that such monitors would be an enhancement, Entergy did not install them. ENT00130A at 12.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 176. The third recent transformer failure at an Entergy plant occurred on November 11, 2012, when the James A. Fitzpatrick Nuclear Power Plant reactor automatically tripped due to a main turbine trip signal in response to a fire in one of the main transformers. NYS000470 at 1.

The fire initiated in the B Phase winding of the transformer and took approximately two and a half hours to extinguish. NYS000471 at 1. As of the hearing, the cause of this fire was unknown. Tr. 4301:7-11 (McCaffrey).

177. At the hearing, Entergys witness Mr. McCaffrey argued that the 2010 transformer failure at Indian Point Unit 2 and the 2012 transformer failure at Fitzpatrick were not related to aging because both of those transformers were only four years old. Tr. 4450:3-11 (McCaffrey); 4301:2-11 (McCaffrey). However, Dr. Degeneff testified that the age of these transformers does not diminish the significance of these events. Tr. 4440:8-24 (Degeneff).

Transformer failure follows a bathtub curve: the failure rate is relatively high early on as transformers fail due to design or manufacturing defects, then it regresses to a relatively low rate for a significant portion of the transformers operating lifetime, but as transformers age, the failure rate returns to a relatively high level. Tr. 4261:14-25 (Degeneff); see NUREG/CR-5753 at 21. Both of these transformers had been operating for four years, therefore, if testing had been conducted on a more frequent basis, there would have been results that could have been trended to see if there were any areas of concern. Tr. 4263:1-19 (Degeneff). For example, the bushing on Indian Point Unit 2 had not been tested in over two and a half years when it failed.

NYS000032 at 4. Since Entergy relies on trending to determine the internal health of the transformer (Tr. 4255:4-17 (McCaffrey)), it is important that testing take place on a frequent basis. Tr. 4282:3-21 (Degeneff).

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 178. At the hearing, Staffs and Entergys witnesses asserted that many of the transformer failures mentioned by Dr. Degeneff were not relevant because they occurred on main transformers. Tr. 4265:4-4266:20 (Mathew); 4301:18-22 (Craig). Main transformers, which Entergy and Staff assert are not within the scope of the license renewal rule, step up voltage from a plants generator and transmit it to the transmission generation system. Tr. 4258:6-12 (McCaffrey). However, upon further questioning, NRC Staffs witness Mr. Mathew admitted that it is important to examine all transformer failures regardless of whether they happen to in-scope transformers:

JUDGE WARDWELL: But do you agree it would be prudent to look at any transformer failure, see what the root cause was and then see whether or not it has any application to those that fall under license renewal regardless of whether the one that failed fell under?

MR. MATHEW: Yes, agree.

Tr. 4305:6-12 (J. Wardwell, Mathew).

179. Moreover, the frequent failure of main transformers, which are covered under the maintenance rule (10 C.F.R. § 50.65(a)(2)), demonstrates that Entergy is incorrect when it asserts that AMR is unnecessary for transformers because aging degradation is sufficiently monitored under the maintenance rule. Entergys witness Mr. McCaffrey testified that all large oil-filled power transformers are monitored the same way under the maintenance rule, regardless of whether they are within the scope of the license renewal rule. Tr. 4302:21-4303:16 (McCaffrey).

If Entergys preventive maintenance program is not detecting aging degradation in the main transformers, it is likely that the same program is also failing to detect aging degradation in the transformers within the scope of the license renewal rule.

180. At the hearing, NRC Staffs witness Mr. Mathew also tried to distinguish main transformers from the transformers within the scope of the license renewal rule, asserting that 71

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 main transformers carry higher loads of power and therefore, are more prone to aging degradation than the in-scope transformers. Tr. 4265:4-4266:20 (Mathew). However, Dr.

Degeneff testified:

A device, even though its not used frequently, will age and degrade, and in fact often, it will age and degrade more quickly, because it is not being monitored or maintained properly. So whether a transformer is being used continuously or loaded at 100 percent, or in standby, ready to be used, there needs to be an active program to assure that the transformer is healthy.

Tr. 4442:19-4443:10 (Degeneff).

181. Furthermore, all of the main transformers at Indian Point have been replaced since Unit 2 and Unit 3 began operation. The two main transformers at Indian Point Unit 3 were replaced in 1986 and 2007, and the two main transformers at Indian Point Unit 2 were replaced in 2006 and 2010. See ENT000125 (Entergy, Indian Point Energy Center Large Power Transformer Life Cycle Management Plan, July 7, 2011) at 53, 64, 75, and 89. On the other hand, the large oil-filled transformers within the scope of the license renewal rulethe Unit 2 and Unit 3 station auxiliary transformers and the Unit 3 GT auto transformerare original plant equipment and have not been replaced since Unit 2 and Unit 3 began operations, which means they are approximately forty years old. See ENT000125 at 29, 41, and 100; Tr. 4258:1-4259:15 (McCaffrey). Therefore, aging degradation is more likely to be a problem for the in-scope transformers than the main transformers.

182. Not only are the in-scope transformers at Indian Point much older than the main transformers, but they are also less closely monitored than the main transformers. The main transformers all have online gas monitors installed, but the in-scope transformers do not. Tr.

4269:15-19 (McCaffrey); Tr. 4280:9-13 (McCaffrey); Tr. 4444:4-9 (McCaffrey). Entergy Staff has recommended that such online monitors be used:

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 On-line analyzers can provide early intelligence that may [be] used to remove a transformer from service prior to catastrophic failure. Based on the impact of transformer failure on the site and a lack of spare transformers the use of this low cost indicator of health should be used.

NYS000038 (Email String; June 26, 2007 8:24 AM;

Subject:

Status of Regions Single Point Vulnerable Transformers; From: R.R. Davis; To: D.P. Wiles, M.A. Krupa, C. Reasoner, and K.D. Nichols; CC: K.A. Jelks, M.A. Wood, G.S. Matharu, R.T. Giguere, S. Saunders; June 26, 2007 3:12 PM;

Subject:

FW: Status of Regions Single Point Vulnerable Transformers; Attachments: SPF Transformer writeup.doc, EN GSU Evaluation FINAL 6-25-2007.doc; From:

R.R. Davis; To: R.A. Penny).

183. Entergys Large Power Transformer Status Report also recommended that dissolved gas analyzers be installed on all transformers whose failures may result in a reactor scram:

On line dissolved gas analyzers provide continuous monitoring of gases that define internal transformer health. These analyzers do not prevent transformer failure but provide advanced warning of transformer degradation that allows the transformer to be removed from service for repair rather than replacement. . . . Recommendation 2:

Install Dissolved Gas Analyzers on all site transformers at a minimum whose failure result in a SCRAM or a significant plant derate (2007 -2008 action).

NYS000040 (EN Large Power Transformer Status, Feb. 15, 2007) at 1-2.

184. Both the NRC and the Nuclear Energy Agency (NEA) have found weaknesses in nuclear plant operators transformer maintenance programs. In 2009, the NRC issued an Information Notice concerning the recent wave of transformer failures. See NYS000019 (NRC Information Notice 2009-10, Transformers Failures-Recent Operating Experience, Jul. 7, 2009, ML090540218). NRC Staffs witness Mr. Mathew, who prepared the Notice, testified that the NRC was concerned about the effectiveness of transformer maintenance programs:

MR. MATHEW: We issued the Information Notice in 2009, based on a review of all operating experience. We do an annual review for reactor operating plants. We did 73

State of New York Findings of Fact and Conclusions of Law Contention NYS-8 that for failures, and we noted the high rate of failures of transformer[s], compared to previous years. So that was a concern to the NRC, not because of license renewal aspects, because of effectiveness of maintenance in following the maintenance rule.

These transformers are important from a plant performance perspective. Any time a reactor scram happens, it challenges the safety systems. So from that aspect, its an initiating event concern. Thats why, one of the reasons why we issued this Information Notice, to alert the industry that there are failures. They had to look at the industry standards. One of the examples is the IEEE C57-107 regarding maintenance and acceptance of insulating oil, because oil analysis gives a lot of information on the condition of transformer internal workings. Like we talked about before, you know, corona, the insulation, breakdown of oil because of many concerns. So we alerted the industry to look at their maintenance program.

JUDGE WARDWELL: So its true that youve asked them to look at really whats taking place under a Part 50, to assure that the maintenance rule is performing as you wish [it] to, and there is a level of incidences that needs some addressing.

MR. MATHEW: Right.

Tr. 4284: 6-4285:13 (Mathew, J. Wardwell).

185. In 2011, the NEA also issued a report concerning the recent failures of large oil-filled transformers.9 That report concluded that many of the failures were due to insufficient monitoring programs:

Industry operating experience identified a constant trend in transformer failures over a ten year period despite a concerted effort to identify and correct the leading causes of the failures. While some failures can be traced to weaknesses in the manufacturing process or design vulnerabilities in essential support systems, the root cause for many failures are weaknesses in the maintenance and monitoring programmes.

NYS000021 (OECD, Nuclear Energy Agency, Operating Experience Report: Recent Failures of Large Oil-Filled Transformers, NEA/CNRA/R(2011)6, Mar. 14, 2011) at 11.

9 The Nuclear Energy Agency (NEA) is a specialized agency within the Organization for Economic Co-operation and Development (OECD), an intergovernmental organization of industrialized countries based in Paris, France. The NEAs current membership consists of 31 countries in Europe, North America and the Asia-Pacific. Together they account for approximately 90% of the worlds installed nuclear capacity. The United States is a member.

See http://www.oecd-nea.org/nea/.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 J. An Aging Management Program Is Necessary To Provide A Reasonable Assurance That Transformer Functionality Will Be Maintained In The License Renewal Period 186. Entergy cannot rely on its current transformer maintenance program to provide a reasonable assurance that transformer functionality will be maintained in the license renewal period. NYSR00414 Degeneff Rebuttal Test. at 43:17-44:3. While the license renewal rule does not require an absolute assurance that no failures will occur, it does require that Entergy monitor transformers closely, so that most aging degradation is identified and remedied in advance of failure. Degeneff Rebuttal Test. at 36:18-37:22. The recent history of transformer failures at Entergy-operated nuclear plants, as well as other plants around the country, shows that additional monitoring is necessary to detect age related degradation in transformers prior to failure. See Tr.

4298:7-4299:21 (Degeneff).

187. At the hearing, Dr. Degeneff explained that a meaningful Aging Management Program (AMP) for transformers could be written that would achieve an effective improvement over what is currently being done under the maintenance rule. Tr. 4296:18-23 (Degeneff). Dr. Degeneff explained that an AMP could improve on the frequency of transformer testing, could require that better testing methods be utilized as they become available, and could be mandatory upon licensees. Tr. 4296:24-4298:6 (Degeneff). For example, an AMP could require Entergy to install online gas monitors on its in-scope transformers and increase the frequency of other tests.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 V. CONCLUSIONS OF LAW 188. Based upon a review of the entire hearing record, the foregoing discussion and Findings of Fact, and applicable legal standards, the following Conclusions of Law must be drawn:

(A) According to 10 C.F.R. § 54.4(a)(3), certain transformers at Indian Point are within the scope of the license renewal rule because they are relied on in safety analyses or plant evaluations to perform a function that demonstrates compliance with the Commissions regulations for fire protection (10 C.F.R. § 50.48) and station blackout (10 C.F.R. § 50.63).

(B) Transformers perform their intended function, as described in 10 C.F.R. § 54.4, without moving parts.

(C) Transformers perform their intended function, as described in 10 C.F.R. § 54.4, without a change in configuration, properties or state.

(D) Transformers that perform an intended function, as described in 10 C.F.R. § 54.4, are not subject to replacement based on a qualified life or specified time period.

(E) Therefore, 10 C.F.R. § 54.21(a)(1)(i) and (ii) requires that Entergys license renewal application contain an integrated plant assessment that includes an Aging Management Review for transformers within the scope of the license renewal rule.

(F) Furthermore, 10 C.F.R. § 54.21(a)(3) requires Entergy to demonstrate that the effects of aging will be adequately managed so that the intended functions of in-scope transformers will be maintained consistent with the current licensing basis for the period of extended operation.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 (G) Entergys license renewal application does not contain an Aging Management Review or an Aging Management Program for in-scope transformers.

(H) Since Entergy has failed to complete an Aging Management Review or provide an Aging Management Program for in-scope transformers, the Commission cannot find, as required by 10 C.F.R. § 54.29(a)(1), that actions have been identified, and have been or will be taken, to manage the effects of aging on the functionality of in-scope transformers during the period of extended operation, such that there is a reasonable assurance that the activities authorized by the renewed license will continue to be conducted in accordance with the current licensing basis.

(I) Since the Commission cannot find that there is a reasonable assurance that the Indian Point current licensing basis will be maintained throughout the period of extended operation, as required by 10 C.F.R. § 54.29, renewed operating licenses for Indian Point Unit 2 and Indian Point Unit 3 may not be issued by the Commission.

(J) Since Entergy did not complete Aging Management Review or provide an Aging Management Program for transformers, the License Renewal Application for Indian Point Unit 2 and Indian Point Unit 3 must be denied.

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State of New York Findings of Fact and Conclusions of Law Contention NYS-8 VI. PROPOSED ORDER For the foregoing reasons, the State of New Yorks Contention 8 is resolved in favor of the State of New York. Accordingly, the Director of Nuclear Reactor Regulation is not authorized to issue, and may not issue, renewed operating licenses for the Indian Point nuclear power plants Units Two and Three.

In accordance with 10 C.F.R. § 2.341(b)(1), that any party to this proceeding may file a petition for review of this Initial Decision with the Commission within twenty-five (25) days after service of this initial decision. In accordance with 10 C.F.R. § 2.340(g) and § 2.1210, that this Initial Decision shall constitute the final decision of the Commission forty (40) days after its issuance, unless there is a petition for Commission review filed, or the Commission decides to review this Initial Decision under 10 C.F.R. §2.1210(a)(2) or (3).

Respectfully submitted, Signed (electronically) by Signed (electronically) by Laura E. Heslin John J. Sipos Assistant Attorney General Assistant Attorney General Office of the Attorney General Office of the Attorney General for the State of New York for the State of New York 120 Broadway The Capitol New York, New York 10271 Albany, New York 12224 (212) 416-6091 (518) 402-2251 March 22, 2013 78