ML13081A770

State of New Yorks Proposed Finding of Fact and Conclusions of Law as to Consolidated Contention NYS-37

ML13081A770
Person / Time
Site:	Indian Point
Issue date:	03/22/2013
From:	Feiner L, Sipos J State of NY, Office of the Attorney General
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 24283, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
Download: ML13081A770 (75)

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 AS TO CONSOLIDATED CONTENTION NYS-37 Office of the Attorney General for the State of New York The Capitol State Street Albany, New York 12224

TABLE OF CONTENTS Page i

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW AS TO CONSOLIDATED CONTENTION NYS-37.....................................................................1 INTRODUCTION...........................................................................................................................1 OVERVIEW OF INDIAN POINT FACILITIES...........................................................................2 I.

PROCEDURAL BACKGROUND......................................................................................5 II.

LEGAL FRAMEWORK...................................................................................................17 A

National Environmental Policy Act Requirements................................................17 B.

Burden of Proof for NEPA Contentions................................................................21 C.

Evidentiary Standards for this Relicensing Proceeding.........................................23 III.

WITNESSES AND QUALIFICATIONS..........................................................................24 A.

State of New York Witnesses................................................................................24 B.

NRC Staff Witness.................................................................................................26 C.

Entergy Witnesses..................................................................................................26 IV.

THE FINAL SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT..........28 A.

The Substance of the FSEIS..................................................................................29 B.

Coal-Fired Generation...........................................................................................30 C.

Natural-Gas Fired Combined Cycle Generator......................................................32 D.

Purchased Electric Power......................................................................................32 E.

Conservation and Energy Efficiency.....................................................................37 F.

Alternatives Dismissed From Individual Consideration........................................41 G.

Combinations of Alternatives

1. Combination Alternative 1...............................................................................42

2. Combination Alternative 2................................................................................42

TABLE OF CONTENTS Page ii H.

Environmental Impacts of Combination Alternatives 1 and 2...............................43 I.

Staff Summary of Impacts of Alternatives Considered.........................................44 J.

NRC NEPA Standard of Decision.........................................................................45 K.

Entergys Testimony and Report...........................................................................47 V.

CONCLUSIONS OF LAW...............................................................................................50 A.

Staffs Analysis of the No-Action Alternative is Deficient...................................50

1.

Staffs Consideration of the Purchased Power...................................................51 Alternative Is Flawed

2.

Staff Does Not Provide Any Analysis of Its..........................................................54 Purported Full Conservation and Energy Efficiency Alternative

3.

Staff Improperly Refused to Consider a Conservation/Renewable.......................58 Generation Combination Replacement Scenario

4.

Entergys Evidence Based on the NEMS Modeling Is Inadmissible....................60

5.

Summary of FSEIS Deficiencies...........................................................................60

6.

Under the National Environmental Policy Act, the Appropriate Remedy for a Deficient Environmental Impact Statement is for the Atomic Safety and Licensing Board to Remand the Matter to NRC Staff to Perform a Reanalysis of Site-Specific Environmental Impacts and Prepare a Revised and Supplemental Environmental Impact Statement....61 VI.

PROPOSED ORDER.........................................................................................................72

THE STATE OF NEW YORKS FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 1

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW AS TO CONSOLIDATED CONTENTION NYS-37

1.

In accordance with 10 C.F.R. § 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 Consolidated Contention 37 (NYS-37). At issue in this contention is whether NRC Staffs analysis of the no-action alternative in the Final Supplemental Environmental Impact Statement (FSEIS)

NUREG-1437, Supplement 38 complied with the requirements of the National Environmental Policy Act (NEPA) that it take a hard look at the comparative environmental impacts of renewing the operating licenses for Indian Points two power reactors for another twenty years with the impacts of closing the facilities by not granting the application, including the impacts of replacing some or all of the facilities capacity by other generating sources, conservation and efficiency, and power purchases. These proposed findings support the Boards determination, under 10 C.F.R. §§ 54.21, 54.29, 51.95(c) and 51.103 that renewed operating licenses should not be issued authorizing the operation of the two Indian Point nuclear power plants for 20 additional years.

INTRODUCTION

2.

Based on the pre-filed testimony and exhibits submitted by the parties, and the testimony provided during the evidentiary hearings held in Tarrytown, New York and Rockville, Maryland on October 24, 2012 and November 28, 2011, respectively, and for the reasons set forth below, NRC Staffs analysis of the environmental impacts of the no-action alternative in the FSEIS is deficient. Although Staffs FSEIS purported to consider conservation and renewable generation as replacement scenarios for the capacity of IP2 and IP3, that

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 2

consideration was simply superimposed upon the inaccurate and outdated information in the earlier flawed Draft Supplemental Environmental Impact Statement and did not provide any detail or analysis of the specifics of these scenarios or inform a decision maker about the scenarios viability or likelihood.

3.

This document is organized as follows: Section I below summarizes the procedural history of this issue and this proceeding.Section II sets forth the applicable legal and regulatory standards.Section III describes the witnesses and their experience.Section IV provides factual evaluations and conclusions concerning Staffs analysis of the no-action alternative in the FSEIS.Section V presents conclusions of law that NRC Staffs FSEIS does not take the required hard look at the environmental impacts of the no-action alternative and slanted the analysis toward the construction of a new fossil-fuel fired generator and away from renewable generation, conservation and efficiency (i.e. demand side management), and power purchases. Finally,Section VI includes a Proposed Order.

OVERVIEW OF INDIAN POINT FACILITIES

4.

The Indian Point facilities at issue in this proceeding are located on the east bank of the Hudson River at river mile 43 in the Village of Buchanan in Westchester County in the State of New York. NRC000004/NYS00133 A-J (NUREG-1437, Supplement 38, Final Supplemental Environmental Impact Statement for License Renewal of Nuclear Plants:

Regarding Indian Point Nuclear Generating Units 2 and 3, Volumes 1, 2 and 3 (Dec.

2010)(FSEIS) at 2-1, 2-27.1

5.

In March 1955, soon after the enactment of the Atomic Energy Act of 1954, the Consolidated Edison Company initially selected the site for the location of a nuclear power 1 NRC000004 is a one page document incorporating NYS00133A-NYS00133J.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 3

reactor, and the U.S. Atomic Energy Commission approved the Indian Point site for the construction of one of the first commercial reactors in 1956. According to AEC and NRC documents, Consolidated Edison received the following construction permits and operation licenses on the following dates:

CONSTRUCTION PERMIT ISSUED OPERATING LICENSE ISSUED IP Unit 1 May 4, 1956 March 26, 1962 IP Unit 2 October 14, 1966 September 28, 1973 IP Unit 3 August 13, 1969 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); NUREG-1350, Volume 20, 2008 - 2009 Information Digest, at 103, 113 (Aug. 2008).

6.

Indian Point Unit 1 ceased operation in October 1974 and NRC withdrew its conditional operating license in 1980. Consolidated Edison Co. of New York, Inc. (Indian Point Nos. 1 and 2), Directors Decision Under 10 C.F.R. 2.206, DD-80-5, slip op. at 5-6, 11 N.R.C.

351 (Feb.11, 1980).

7.

Indian Point Unit 2 (IP2) is currently licensed by the NRC to operate at a core power of 3216 megawatt thermal (MW(t)), which results in a turbine generator output of approximately 1078 megawatt electric (MW(e)). NRC000004 (NYS00133C) at 2-5.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 4

8.

Indian Point Unit 3 (IP3) is currently licensed by NRC to operate at a core power of 3216 MW(t), which results in a turbine generator output of approximately 1080 MW(e). NRC000004 (NYS00133A) FSEIS at 2-5.

9.

Approximately every 24 months, IP2 and IP3 have planned outages lasting about 4 weeks to replace a portion of their fuel source and conduct scheduled repairs. NYS00133A, FSEIS at 2-7.

10.

The Indian Point reactors and associated spent fuel pools are approximately 24 miles north of the New York City line, and approximately 37 miles north of Wall Street in lower Manhattan. Portions of four counties -- Westchester, Rockland, Orange and Putnam -- fall within the inner ten mile Emergency Planning Zone, and significant population centers in New York, Connecticut and New Jersey lie within the 50 mile Emergency Planning Zone. The total estimated population within a 50 mile radius of Indian Point in the year 2035 is more than 19 million. NRC000004 (NYS00133I) Appendix G at G-20.

11.

The wholesale electricity market in New York is divided into 11 load zones.

Figure 3 below maps the boundaries of those zones.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 5

Figure 3. New York Control Area Load Zones NYS00443, New York State Transmission and Distribution Systems Reliability Study and Report, New York State Energy Planning Board (Aug. 2012) at 12.

12.

Indian Point Unit 2 and Indian Point Unit 3 are located in Zone H. Tr. 3126:17-20 (Harrison).

13.

New York City and Long Island are located in Zones J and K. Tr. 3126:21-3127:2 (Harrison).

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 6

I.

PROCEDURAL BACKGROUND

14.

On April 23, 2007, Entergy submitted an application to the NRC to renew the operating licenses of IP2 and IP3 (License Nos. DPR-26 and DPR-64) for an additional 20 years.

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); 72 Fed. Reg. 55,834 (Oct. 1, 2007).

15.

On November 30, 2007, the State filed a petition for leave to intervene in this proceeding, asserting numerous contentions, including Contention 9 brought under the National Environmental Policy Act (NEPA). New York State Notice of Intention to Participate and Petition to Intervene (Nov. 30, 2007) (ML073400187).

16.

New Yorks Contention Nine (NYS-9) alleged that Entergys Environmental Report (ER) was deficient because it failed to include conservation and energy efficiency measures in both its NEPA alternatives analysis and in its no-action alternative analysis.

Accompanying its Petition to Intervene, the State also submitted and served two declarations concerning the analysis of energy issues, one by Peter A. Bradford and one by David A.

Schlissel, along with a report by Synapse Energy Economics, Inc.; NYS000105 Declaration of Peter A. Bradford (November 28, 2007) (2007 Bradford Decl) ML073400205; NYS000051 Declaration of David A. Schlissel (November 28, 2007) (2007 Schlissel Decl.) ML073400205; NYS000052 Report on the Availability of Replacement Capacity and Energy for Indian Point Units 2 and 3 (November 28, 2007) (2007 Synapse Report) ML073400205. Mr. Bradfords declaration discussed his concerns about NRCs evaluation of energy alternatives and a memorandum prepared for him while he was a NRC Commissioner. Gerald Warburg, A Study of

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 7

NRC Procedures for Assessing Need for Power and Alternative Energy Sources in Fulfillment of the NEPA Requirements for Environmental Impact Statements (1979) (quoted in Declaration of Peter A. Bradford (Nov. 2007) at ¶ 8) (hereinafter A Study of NRC Procedures for Assessing Need for Power and Alternative Energy Sources in Fulfillment of the NEPA. NRC Staff received copies of the States Petition to Intervene and the November 2007 Bradford, Schlissel, and Synapse documents. New York State Certificate of Service of Intention to Participate and Petition to Intervene with Two Volumes of Supporting Declarations and Exhibits (Nov. 30, 2007).

17.

Following a three-day contention admissibility hearing held on March 10-12, 2008, the Board admitted various contentions including NYS-9 as a NEPA contention, to the extent it raised a material dispute regarding the need for Entergys ER to analyze the potential impacts of energy conservation that may arise from the no-action alternative. The Board relied on Section 8.2 of the NRCs Generic Environmental Impact Statement for License Renewal which states that denial of an LRA may, in some cases, lead to energy conservation measures, whose environmental impacts, in turn, would be included in the no-action alternative. Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3), Memorandum and Order (Ruling on Petitions to Intervene and Requests for Hearing), LBP-08-13, 68 N.R.C. 43, 112 (Jul. 31, 2008) (ML082130436) at 51. The Board declined to admit that portion of Contention 9 which asserted that Entergys alternatives analysis for the defined goal of producing 2,158 MW(e) of base-load power generation was required to include energy conservation as an alternative. Id. at 49.

18.

On December 22, 2008, NRC Staff issued the Draft Supplemental Environmental Impact Statement. NYS000132A-D (NUREG-1437, Supplement 38, Draft Supplemental

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 8

Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding Indian Point Nuclear Generating Units 2 and 3, Volumes 1 and 2 (Dec. 2008) (DSEIS).

19.

Chapter 8 of the DSEIS compared the environmental impacts of license renewal to those of license denial (no-action). It concluded that conservation efforts alone will be insufficient to replace either Indian Point Unit 2 or Indian Point Unit 3 but considered conservation as part of a combination of alternatives to replace the capacity of both Indian Point units. NRC000004 NYS00132C, DSEIS at 8-59.

20.

Although the DSEIS addressed energy conservation and renewable generation, the State submitted a new contention, NYS-33, on February 27, 2008, alleging that the DSEISs analysis of energy conservation and efficiency, renewable generation, transmission enhancements, purchased power, and New Yorks Renewable Portfolio Standards was deficient as was its failure to consider a scenario of renewable generation and energy efficiency as a full replacement for the capacity of IP2 and IP3 in the no-action alternative. State of New York Contentions Concerning NRC Staffs Draft Supplemental Environmental Impact Statement (Feb.

27, 2009) ML090690303 at 20-37. The State contended that these deficiencies violated NEPA, NRCs own Part 51 regulations, and the regulations of the Presidents Council on Environmental Quality (CEQ). Contention NYS-33 specifically referred to and discussed the 2007 Synapse Report and the 2007 Schlissel Declaration, id. at ¶¶ 5, 18, 26, as well as the 2007 Bradford Declaration and the 1979 Warburg memorandum, A Study of NRC Procedures for Assessing Need for Power and Alternative Energy Sources in Fulfillment of the NEPA, id. at ¶¶ 13, 17, 26,

31. The States contention was also accompanied by a February 2009 declaration by David Schlissel. Id. at ¶ 27; NYS000053 Declaration of David A. Schlissel (Feb. 27, 2009) (2009 Schlissel Decl.). NRC Staff received copies of Contention NYS-33 and the February 2009

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 9

Schlissel Declaration. New York State Certificate of Service of Contentions 12-A, 16-A, 17-A, 33 and 34 (Feb. 27, 2009).

21.

On March 18, 2009, the State of New York submitted written comments to Staff concerning the DSEIS. NYS000134 (Comments Submitted by the New York State Office of the Attorney General on the Draft Supplemental Environmental Impact Statement Prepared by the Staff of the Nuclear Regulatory Commission for the Renewal of the Operating Licenses for Indian Points Units 2 and 3, Buchanan, New York) (Mar. 18, 2009)) ML090771328.

22.

Among other things, the States comments included a critique of the discussion of energy alternatives in the DSEIS prepared by NRC Staff. NYS000134 at 21-37. The States March 2009 comments specifically cited to and discussed the 2007 Synapse Report and 2007 Schlissel Declaration, the 2007 Bradford Declaration, the 2009 Schlissel Declaration and the then-recently-filed Contention NYS-33. NYS000134 at 22-23, 29, 34, 35-37 (citing 2007 Schlissel Decl. and 2007 Synapse Report), at 31 (citing 2007 Bradford Decl.), at 36 (citing NYS-33 and 2009 Schlissel Decl.).

23.

In its comments, the State repeated evidence it had first presented in this proceeding in 2007, about the States program to increase energy efficiency and reduce energy use. NYS000134 at 22-32. Since then, in June 2008 the Public Service Commission adopted a goal of reducing energy usage (as forecast in 2007) by 15% statewide by 2015. The New York State Public Service Commission created an energy efficiency portfolio standard, to develop and encourage cost-effective energy efficiency over the long term and to immediately commence and augment near-term efficiency measures. In 2009, the Public Service Commission issued an Order Approving Fast-Track Utility Administered Electric Energy Efficiency Programs With Modifications. NYS000081 cited by NYS000134 at 23-24.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 10

24.

In the 2007 Synapse Report, the State had previously informed the NRC about the success of New York States Renewable Portfolio Standard which was promulgated by the Public Service Commission in 2004. Since then, new renewable capacity could exceed 1206 MWs by the end of 2008 and produce approximately 3.6 million MWh of electricity per year.

NYS000052 Report on the Availability of Replacement Capacity and Energy for Indian Point Units 2 and 3 (November 28, 2007) (2007 Synapse Report) ML073400205 at 7. In February, 2009, the New York Independent System Operator (NYISO) announced that the combined wind energy generation output in New York State had reached 1,000 MW and was expected to increase. NYS000134 at 24.

25.

On June 16, 2009, the Board admitted NYS-33 and consolidated it with NYS-9 (NYS-9-33). Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3), Order (Ruling on New York States New and Amended Contentions), at 9-13 (June 16, 2009)

(unpublished) ML091670435. The Board ruled that Contention 33 was timely and admissible because it was based on data and conclusions in the draft SEIS that differ significantly from those in the ER. Based on the similarities of issues dealing with the no-action alternative, the Board consolidated Contention 33 with Contention 9.

26.

On December 3, 2010, Staff issued the FSEIS. NRC000004/NYS00133 A-J (NUREG-1437, Supplement 38, Final Supplemental Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding Indian Point Nuclear Generating Units 2 and 3, Volumes 1, 2 and 3 (Dec. 2010)(FSEIS) at 2-1, 2-27.2

27.

The 2010 FSEIS differed from the 2008 DSEIS by identifying conservation and purchased power as possible sources of full replacement for the entire capacity of Indian Point 2 The 2010 FSEIS (NRC000004) was also submitted by the State as NYS00133A-NYS00133J.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 11 Units 2 and Unit 3, and removed new coal generation as a source of replacement power. (As discussed in more detail below, the document did retain a 10 page discussion of coal in another section.). The FSEIS also identified a combined alternative of renewable generation, conservation and either the continued operation of one IP unit with cooling towers, plus a new natural gas-fired combined cycle plant, or the repowering of an existing generating facility with natural gas. However, Staff still refused to consider a replacement scenario consisting wholly of conservation, energy efficiency and renewable generation.

28.

In considering conservation as a replacement for the entire capacity of IP2 and IP3, the FSEIS relied upon New York States aggressive efforts in energy efficiency, as evidenced by the States Energy Efficiency Portfolio Standard Program and its augmented Renewable Portfolio Standard, NRC000004 (NYS00133C) at 8-43, which were described in New Yorks comments on the DSEIS and supported by the States submission in this proceeding of the 2007 Synapse Report, and the 2007 Schlissel and Bradford Declarations.

29.

On February 3, 2011, the State submitted Contention NYS-37, alleging that the FSEIS cursory discussion of energy alternatives, including conservation and renewable generation, failed to provide a meaningful analysis or response to the States criticisms of the DSEIS. State of New Yorks Contention Concerning NRC Staffs Final Supplemental Environmental Impact Statement (February 3, 2011)(Contention 37).

30.

Part A of Contention NYS-37 asserted that the FSEIS fails to address previously identified deficiencies in the Applicants ER and the Staffs DSEIS. Part B of NYS-37 asserted that the FSEIS fails to meaningfully respond to criticism of the defects in the ER and DSEIS.

Parts A and B fully incorporated the bases and supporting evidence relied upon in Contentions 9 and 33, and added to the supporting evidence offered in support of those contentions. Parts C

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 12 and D of the contention set forth new bases and new supporting evidence that the NRC Staffs choice of energy alternatives and analysis of the comparative environmental impacts of those alternatives is so deficient, arbitrary, and biased that it renders the FSEIS a nullity with respect to the Staffs recommendation that the adverse environmental impacts of license renewal are not so great that preserving the option of license renewal for energy planning decision makers would be unreasonable.

31.

Contention 37 provided new evidence that the FSEISs limitation of renewable generation to 600 MW(e) grossly understated the amount of renewable energy that would be available in New York State to replace the capacity of IP2 and IP3. In 2009, New York State announced its 45 x 15 goal to meet 45 percent of the States electricity needs by 2015 through increased energy efficiency and renewable energy; 15 % would be met by a reduction in electricity end-use and 30% would be met with renewable resources.

32.

Although the FSEIS briefly mentioned this goal, it did not analyze its impact on the States renewable sector or update the no-action alternative to reflect the policy. Contention 37 at 19.

33.

The renewable energy assessment of the 2009 New York State Energy Plan projected that if renewable resources were fully developed, they could meet nearly 40 percent of New Yorks projected primary energy needs in 2018, only three years after the expiration of IP operating license. Contention 37 at 19, citing NYS000068, New York State Energy Plan, Renewable Energy Assessment (December 2009) at 8. The same assessment established that in 2007, approximately 11% of the primary energy used by all sectors came from renewable resources, representing a 35% increase in renewable energy use since 2001. NYS000068 at 5.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 13 The Long Island Power Authority committed to contribute approximately 4% of the renewable energy to meet the goal, or 2 million MWs by 2013. NYS000068 at 14.

34.

The New York Independent System Operator (NYISO), the entity which operates the high voltage transmission network, issued a report in 2009 which revealed that the nameplate capacity of wind, which is just one of many renewable resources, had already increased to 1275 MWs. Contention 37 at 21; NYS000070 Growing Wind, Final Report of the NYISO 2010 Wind Generation Study at i. Although the FSEIS projection of wind power increases is lower, it still asserts that 1076 MW of wind power will come online between 2011 and 2015, which would be available to replace some of the capacity of IP2 and IP3. NRC000004 (NYS000133C) at 8-61. NRC Staffs analysis of combination alternatives in the FSEIS assume that only 600 MW of renewable energy, from all sources, will be available to replace part of the capacity of IP2 and IP3. NRC000004 (NYS000133C) at 8-60. In the context of increasing growth of renewable resources in New York State, the FSEISs limitation of renewable resources to 600 MWs in its combination alternatives is arbitrary.

35.

Contention 37 also provided evidence, overlooked in the FSEIS, of New York States impressive energy efficiency gains. According to the Energy Efficiency Assessment of the 2009 New York State Energy Plan, a 14% reduction in projected levels of electricity use, over and above what can be realized from compliance with expected updates of energy efficiency codes and appliance standards, could be achievable by 2015 with well designed, fully funded state wide energy efficiency programs. NYS000062 Energy Efficiency Assessment New York State Energy Plan (December 2009) at 2, citing NYS000063, Optimal Energy, Inc.,

Achievable Electric Energy Efficiency Potential in New York State (Draft)(Optimal Energy Report) (November 2008) at 5. The 14% potential reduction in electricity use equals a potential

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 14 reduction of 26,000 GWh. Thirty-eight percent of these energy savings could be realized in New York City, fourteen percent in Long Island and the remaining forty-eight percent in the rest of the state. NYS000054 at 8 (2011 Schlissel Decl.); NYS000063 at 5 (Optimal Energy Report).

36.

Although the FSEIS gives putative recognition to non-fossil fuel alternatives to license renewal not previously given consideration in the DSEIS, the State asserted that NRC Staff nonetheless failed to provide a meaningful and objective hard look at the comparative impacts of alternatives. The State further asserted that in the absence of a meaningful alternatives analysis, 10 C.F.R. Part 51 does not permit the Board or the Commissioners to adopt this recommendation into the Record of Decision. In support of Contention NYS-37, the State also submitted declarations of David Schlissel, Peter Lanzalotta, and Peter Bradford.

NYS000054 (Declaration of David A. Schlissel (Jan. 31, 2011) (NYS-37 Attachment 4)(2011 Schlissel Decl.) ML110680290; NYS000098 (Declaration of Peter J. Lanzalotta (Feb. 2, 2011)

(Attachment 5) ML110680290 (2011 Lanzalotta Decl.); NYS00106 ( Declaration of Peter A.

Bradford (Feb. 2, 2011) (Attachment 6) ML110680290 (2011 Bradford Decl.)

37.

On July 6, 2011, the Board admitted NYS-37 to the extent it updates and supersedes NYS 9-33 and to the extent it challenges the discussion in the FSEIS addressing comments made regarding the environmental impact of the no-action alternative as described in the DSEIS. Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3),

Memorandum and Order (Ruling on Pending Motions for Leave to File New and Amended Contentions), at 34 (July 6, 2011) (unpublished) ML111870344. The Board consolidated NYS-37 with NYS-9-33. Id. at 34.

38.

Thereafter, on July 18, 2011, Entergy filed a motion seeking clarification of language in footnote 156 at page 35 of the Boards July 6, 2011 Order. In that footnote, the

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 15 Board found New Yorks concerns about the FSEISs analysis of certain non-fossil alternatives untimely, given that these issues go beyond those raised by New York in its contentions on the DSEIS and New York could have raised them earlier. Entergy sought clarification of which of New Yorks concerns about the FSEISs analysis of certain non-fossil alternatives, the Board had excluded as untimely. Applicants Motion for Clarification of Licensing Board Admissibility Rulings on Contentions NYS-17B and NYS-37, July 18, 2011 (ML112088438) at 3-4.

39.

New York State opposed Entergys Motion for Clarification on the ground that it was premature because Entergy would not know until New York filed its direct testimony on Contention 37 whether New York strayed into subjects that Entergy believes are precluded.

State of New Yorks Response to Applicants Motion for Clarification of Licensing Board Admissibility Rulings on Contentions NYS-17B and NYS 37 (July 26, 2011) (ML112108419) at 2.

In an August 10, 2011 Memorandum and Order granting Entergys Request for Clarification, the Board explained that the concerns it found untimely in Contention NYS-37 arose from the 2004 New York State Renewable Portfolio Standard, which existed before the DSEIS was issued, were not raised as challenges in NYS - 9/33 and were raised for the first time in NYS-37.

Entergy Nuclear Operations, Inc., (Indian Point Nuclear Generating Units 2 and 3),

Memorandum and Order (Ruling on Entergys Motion for Clarification of the Boards July 6, 2011 Order) (unpublished) (Aug. 10, 2011) (ML11222A033) at 6-7.

40.

On December 14, 2011 the State filed its initial statement of position (NYS000045), expert declarations (NYS00051, NYS000053, NYS000054, NYS000098, NYS000105, NYS000106), pre-filed expert testimony (NYS000046, NYS000047, NYS00048),

and exhibits (NYS000055 - NYS000131) for consolidated Contention NYS-9-33-37.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 16

41.

On January 30, 2012, Entergy filed a motion in limine seeking to exclude portions of the testimony of the States witnesses, four State exhibits, and portions of its Initial Statement of Position on the grounds that the need for power from IP2 and IP3 and related issues of grid reliability and stability are outside the scope of NYS-37. Entergys Motion in Limine to Exclude Portions of Pre-filed Testimony and Exhibits for Contention NYS-37 (Energy Alternatives) (Jan.

30, 2012) ML12030A210. NRC Staff supported Entergys motion. NRC Staffs Answer in Support of Entergys Motion in Limine to Exclude Portions of Pre-Filed Testimony and Exhibits for Contention NYS-37 (Energy Alternatives) (Feb. 9, 2012) ML12040A352. The State submitted a response arguing that NYS-37 challenges the inadequate evaluation of the no-action alternative. State of New Yorks Answer to Entergys Motion in Limine to Exclude Portions of Pre-Filed Testimony and Exhibits for Contention NYS-37 (Energy Alternatives) (dated Feb. 17, 2011, filed Feb. 17, 2012) ML12048B408.

42.

On March 6, 2012, the Board denied Entergys motion and Staffs arguments.

Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3), Order (Granting in Part and Denying in Part Applicants Motions in Limine), at 16-20 (March 6, 2012)

(unpublished) ML12066A170. After reviewing the parties arguments the Board ruled:

we find New Yorks arguments that it has not changed or expanded the scope of NYS-37 through its pre-filed testimony and accompanying exhibits compelling. While New York may not conduct a broad-ranged inquiry into...

the need for power because such an inquiry in this proceeding is prohibited by 10 C.F.R. § 51.95(c)(2), New York may dispute the accuracy and adequacy of the NRC Staffs evaluation of the no-action alternative. New York has long challenged the NRC Staffs analysis of several no-action alternative issues, including, inter alia, energy conservation, the viability of renewable energy resources, and energy transmission capacity. New Yorks testimony does not indicate any attempt to turn NYS-37 into a battle over the need for power.

Rather, consistent with the disputes cited at contention admissibility, New Yorks evidentiary submissions and testimony focus on the accuracy of the NRC Staffs assessment of the no-action alternative. Therefore, we will give all evidence its

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 17 appropriate weight at the evidentiary hearing in the context of evaluating the specific issue before us.

Id. at 19-20.

43.

On March 30, 2012, NRC Staff and Entergy filed their statements of position, pre-filed expert testimony, and exhibits for consolidated Contention 9-33-37. The State then submitted a revised statement of position, and rebuttal testimony on June 29, 2012.

44.

In the Fall of 2012, the State submitted additional exhibits reflecting additional developments in the energy sector in New York State. They included an August 2012 report by the New York State Energy Planning Board entitled New York State Transmission and Distribution Systems Reliability Study and Report (NYS000443), findings dated September 26, 2012 by the State of New York Department of Environmental Conservation under the State Environmental Quality Review Act for a proposed 1,000 MW natural gas combined cycle power plant in Dutchess County known as Cricket Valley (NYS000444), a November 2012 article from Nuclear Intelligence Weekly, and a November 27, 2012 press release from the State of New York Public Service Commission announcing that it had commenced a proceeding to review specific proposals from utilities and private developers for new transmission lines and upgrades to existing facilities to facilitate transmission between Utica and New York, and prepare for power plant retirements including the potential closure of Indian Point Units 2 and 3 (NYS000466).

II.

LEGAL FRAMEWORK A.

National Environmental Policy Act Requirements

45.

The National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-37, is our basic national charter for protection of the environment. IlioUlaokalani Coalition, v.

Rumsfeld, 464 F.3d 1083, 1093 (9th Cir. 2006) (quoting 40 C.F.R. § 1500.1(a) (2006)).

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 18 Accordingly, NEPA requires federal agencies to follow certain procedures before they undertake projects affecting the environment. Id. NEPA [also] requires agencies to balance a projects economic benefits against its adverse environmental effects. Hughes River Watershed Conservancy, 81 F.3d 437, 446 (4th Cir.1996)(quoting Calvert Cliffs Coordinating Comm. v.

U.S. Atomic Energy Commn, 449 F.2d 1109, 1113 (D.C. Cir. 1971)).

46.

CEQ and NRC have promulgated regulations to assist in the implementation of NEPA. 40 C.F.R. Parts 1500-1508; 10 C.F.R. Part 51.

47.

NEPA requires an agency to prepare an environmental impact statement (EIS) to be included in every recommendation or report on proposals for... major Federal actions significantly affecting the quality of the human environment. 42 U.S.C. § 4332(2)(C). NRCs approval of an application to renew a nuclear power plants operating license is a major Federal action and thereby requires NRC Staff to prepare an EIS. 10 C.F.R. § 51.20(b)(2);

48.

An EIS advances NEPAs goals in two ways:

First, it ensures that an agency, when deciding whether to approve a project, will carefully consider, or take a hard look at, the projects environmental effects.

Second, it ensures that relevant information about a proposed project will be made available to members of the public so that they may play a role in both the decisionmaking process and the implementation of the decision.

Hughes River Watershed Conservancy, 81 F.3d at 443 (citations omitted). The first purpose ensures that an agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989). The second purpose guarantees that the relevant information [concerning environmental impacts] will be made available to the larger audience, including the public, that may also play a role in the decisionmaking process and the implementation of the decision. Robertson, 490 U.S. at 349.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 19

49.

By making relevant analyses openly available, NEPA and the EIS process permits the public a role in the agencys decision-making process. See Robertson, 490 U.S. at 349-50.

This latter information-disclosure function of the EIS gives the public the assurance that the agency has indeed considered environmental concerns... and perhaps more significantly, provides a springboard for public comment. Robertson, 490 U.S. at 349 (citation omitted). The EIS is intended to foster both informed decision-making and informed public participation.

Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 371 (1989); accord Louisiana Energy Services, L.P., (Claiborne Enrichment Ctr.) CLI-98-3, 47 N.R.C. 77 (1998).

50.

NEPA obligates a federal agency to ensure the professional integrity, including scientific integrity, of the discussions and analyses in environmental impact statements. 40 C.F.R. § 1502.24. Accurate scientific analysis, expert agency coments, and public scrutiny are essential to implementing NEPA. 40 C.F.R. § 1500.1(b). A final EIS must include a discussion of adverse impacts that does not improperly minimize negative side effects. Western Watersheds Project v. Kraayenbrink, 632 F.3d 472, 491 (9th Cir. 2011) quoting Earth Island Inst. v. U.S. Forest Serv., 442 F.3d 1147, 1159 (9th Cir. 2006), abrogated on other grounds by Winter v. NRDC, Inc.,555 U.S. 7 (2008). In addition, the information contained in the EIS should be current, not stale. N. Plains Reservation Council, Inc. v. Surface Transportation Board, 668 F.3d 1067, 1085-86 (9th Cir. 2011).

51.

CEQs regulations require the agency to [r]igorously explore and objectively evaluate all reasonable alternatives. The analysis of alternatives to the proposed action is the heart of the environmental impact statement, mandating that the NRC present the environmental impacts of the proposal and the alternatives in comparative form, thus sharply

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 20 defining the issues and providing a clear basis for choice among options by the decisionmaker and the public. 40 C.F.R. § 1502.14(a).

52.

Among these alternatives is the no-action alternative, 40 C.F.R. § 1502.14(d),

which provides the standard by which a reader may compare the beneficial and adverse impacts related to the applicant doing nothing. Kilroy v. Ruckelshaus, 738 F.2d 1448, 1453 (9th Cir.

1984).

53.

Likewise, CEQ regulations require a supplement to a draft environmental impact statement if [t]here are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts. 40 C.F.R. § 1502.9(c)(1)(I)

54.

An environmental analysis is not simply meant to create paperwork for the agency but, instead, to inform the NRCs decision.

Ultimately, of course, it is not better documents but better decisions that count.

NEPAs purpose is not to generate paperworkeven excellent paperworkbut to foster excellent action. The NEPA process is intended to help public officials make decisions that are based on understanding of environmental consequences, and take actions that protect, restore, and enhance the environment.

See 40 C.F.R. § 1500.1(c).

55.

In sum, in determining the adequacy of an EIS, a court looks at three factors: (1) whether the agency has, in good faith, objectively taken a hard look at the environmental consequences of the proposed project and reasonable alternatives; (2) whether the EIS provides sufficient detail to allow those who did not participate in its preparation to understand and consider the pertinent environmental influences at issue; and (3) whether the EIS explanation of alternatives is sufficient to permit a reasoned choice among different courses of action. Davis Mtns. Trans-Pecos Heritage Assoc. v. FAA, 116 Fed Appx. 3, *8 (5th Cir. 2004). If an independent review of the record reveals that an agency did not make a reasoned decision based

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 21 on its analysis of the record, a court may properly conclude that the agency has acted arbitrarily and capriciously. Environmental Defense v. U.S. Army Corps. of Eng., 515 F.

Supp.2d 69, 78 (D.D.C. 2007)(citation omitted).

56.

For the purposes of NEPA, the review of environmental impacts and alternatives involves a number of steps. In 1996, NRC Staff published a Generic Environmental Impact Statement for License Renewal of Nuclear Plants, NUREG-1437 (GEIS) NYS00131A-I; 10 C.F.R. Part 51, Subpart A, Appendix B, Table B-1. That GEIS is supplemented by a site-specific Supplemental Environmental Impact Statement (SEIS) for each reactor that applies to extend its operating license. The applicant prepares an Environmental Report (or ER), which NRC Staff uses to prepare a Draft SEIS (or DSEIS), and after consideration of public comment the Staff prepares a Final SEIS (or FSEIS). 10 C.F.R. §§ 51.53, 51.71, 51.91.

The GEIS for nuclear power plant license renewals directs the NRC to perform an analysis of the no-action alternative to license renewal. [T]he no-action alternative is denial of a renewed license. Denial of a renewed license as a power generating capability may lead to a variety of potential outcomes. In some cases, denial may lead to the selection of other electric generating sources to meet energy demands as determined by appropriate state and utility officials. In other cases, denial may lead to conservation measures and/or decisions to import power. In addition, denial may result in a combination of these different outcomes. Therefore, the environmental impacts of such resulting alternatives would be included as the environmental impacts of the no-action alternative.

NYS000131D (GEIS) Volume 1, Section 8.2, Environmental Impacts of the No-Action Alternative.

B.

Burden of Proof for NEPA Contentions

57.

The burden of complying with NEPA lies with NRC Staff alone.3 By placing the burden on NRC Staff, NEPA insures the integrity of the agency process by forcing it to face 3 See, e.g., Progress Energy Florida, Inc., (Combined License Application, Levy County Nuclear Power Plant, Units 1 and 2), Nuclear Reg. Rep. P 31605, 2010 WL 87737, *5 (2010) (Commission recognizes that the ultimate burden

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 22 those stubborn, difficult-to-answer objections without ignoring them or sweeping them under the rug and serves as an environmental full disclosure law so that the public can weigh a projects benefits against its environmental costs. See Sierra Club v. U.S. States Army Corps of Engrs, 772 F.2d 1043, 1049 (2d Cir. 1985) (citing Silva v. Lynn, 482 F.2d 1282, 1284-85 (1st Cir.

1973)). Thus, NRC Staffs responsibility is not simply to sit back, like an umpire, and resolve adversary contentions at the hearing stage. Calvert Cliffs, 449 F.2d at 1119.

58.

Staff cannot shift the burden of ensuring that its environmental analysis is adequate to intervenors. See Harlem Val. Transp. Assn v. Stafford, 500 F.2d 328, 336 (2d Cir.

1974) (An agency cannot be content to place the burden on intervenors whose resources might be limited to challenge any environmental statements that the [applicants] might make in their applications.); Greene County Planning Board v. Federal Power Commn, 455 F.2d 412, 419-20 (2d Cir. 1972), cert. denied, 409 U.S. 849 (1972) (a federal agency cannot abdicate its responsibility to independently evaluate federal actions proposed to it by other, non-federal entities).

59.

Nor can NRC Staff shift the burden onto the applicant. NEPA establishes environmental protection as an integral part of the Atomic Energy Commissions basic mandate.

The primary responsibility for fulfilling that mandate lies with the Commission. Calvert Cliffs, 449 F.2d at 1119. See also Public Citizen, 541 U.S. at 765 (Admittedly, the agency bears the primary responsibility to ensure that it complies with NEPA.); Vermont Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 553 (U.S. 1978) (NEPA places upon an with respect to NEPA lies with the NRC Staff); Duke Power Co. (Catawba Nuclear Station, Units 1 and 2), CLI-83-19, 17 N.R.C. 1041, 1049 (1983) (the applicant has the burden of proof on safety contentions, however NRC Staff has the burden of proof on NEPA contentions because NRC, not the applicant, has the burden of complying with NEPA); 10 C.F.R. § 51.70(b) (NRC Staff must independently evaluate and be responsible for the reliability of all information used in the draft environmental impact statement.).

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 23 agency the obligation to consider every significant aspect of the environmental impact of a proposed action); Greene County Planning Bd., 455 F.2d at 420.

60.

While the applicant can participate in the adjudicatory proceeding and advocate that the NRC Staff complied with its NEPA obligations, the compliance obligations remain with NRC Staff alone. Post-hoc analyses conducted by the applicants witnesses cannot substitute for the hard look required by Staff, nor can they meet Staffs burden of showing that the FSEIS complies with NEPA. Cf. Dubois v. U.S. Dept of Agriculture, 102 F.3d 1273, 1289 (1st Cir.

1996) ([P]ost hoc rationalizations are inherently suspect, and in any event are no substitute for the agencys following statutorily mandated procedures.).

C.

Evidentiary Standards for this Relicensing Proceeding

61.

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 Staff to prove by a preponderance of the evidence that it complied with the requirements of NEPA. See Louisiana Power and Light Co. (Waterford Steam Electric Station, Unit 3) ALAB-37, 17 N.R.C.

1076, 1093 (1983) (quoting Consumers Power Co. (Midland Plant, Units 1 and 2), ALAB-123, 6 A.E.C. 331, 345 (1973)).

62.

Under NRCs regulations, relevant, material, and reliable evidence which is not unduly repetitious will be admitted. 10 C.F.R. § 2.377(a). Throughout this proceeding, 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 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); see also id. at 24; Tr. at 3262:04 - 3264:12.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 24 III.

WITNESSES AND QUALIFICATIONS A.

State of New York Witnesses

63.

The State of New York presented three witnesses in support of Consolidated Contention NYS-37: David A. Schlissel, Peter A. Bradford, and Peter J. Lanzalotta.

64.

David A. Schlissel currently is the president of Schlissel Consulting, Inc. Mr.

Schlissel received B.S. and M.S. degrees in astronautical engineering from the Massachusetts Institute of Technology and Stanford University, respectively, and a law degree from Stanford University. For approximately 40 years since 1973, Mr. Schlissel has served as a consultant, expert witness and attorney on complex management, engineering and economic issues, primarily in the fields of energy and the environment. His recent work has involved the evaluation of utility resource planning analyses, the economics of proposed and existing power plants, and electric system reliability. He has also evaluated the economics of, and the alternatives to, the extension of the service lives of operating nuclear power plants. NYS000046 Pre-filed Written Testimony of David Schlissel Regarding NYS Contention 37, (Schlissel Initial Test.) (Dec. 14, 2011) at 1-3.

65.

Mr. Schlissel has been retained by regulatory commissions, consumer advocates, publicly-owned utilities, non-utility generators, governmental agencies, and private organizations in more than 35 states to prepare expert analyses on issues related to electric, natural gas, and telephone utilities. He has presented testimony in more than 100 cases before regulatory boards and commissions in 35 states, two federal regulatory agencies, and in state and federal court proceedings. NYS000050 (Curriculum Vitae of David A. Schlissel) at 2..

66.

Peter A. Bradford is president of Bradford Brook Associates, a firm advising on utility regulations and energy policy. He is a graduate of Yale University and Yale Law School

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 25 and has more than 40 years of experience in energy regulation in policy. He has been involved in the regulation of utilities and of power supply procurement since 1971 and in energy policy making since 1968. Mr. Bradford was a member of the National Research Council of the National Academy of Sciences Committee that prepared a report entitled Alternatives to the Indian Point Energy Center for Meeting New Yorks Electric Power Needs (June 2006). Mr.

Bradford served as a member of the U.S. Nuclear Regulator Commission from 1977 to 1982, a member of the Maine Public Utilities Commission from 1982 to 1987 and the chairman of the New York State Public Service Commission from 1987 to 1995. In that latter capacity, Mr.

Bradford was an ex officio member of the New York State Energy Planning Board. NYS000048 (Pre-filed Written Testimony of Peter A. Bradford, (Dec. 14, 2011)(Bradford Initial Test.) at 1-3; NYS000104 (Curriculum Vitae of Peter A. Bradford) at 1-2.

67.

Peter J. Lanzalotta is a principal with Lanzalotta & Associates, LLC. He received a B.S. degree in Electric Power Engineering from Rensselaer Polytechnic Institute and an M.B.A. in Finance from Loyola College and is a registered professional engineer in Connecticut and Maryland. Mr. Lanzalotta has worked for more than 30 years in the electric utility industry employee and as a consultant on electric system planning and operating matters. He has appeared as an expert witness on electric utility reliability, planning, operation, and rate matters in more than 100 proceedings in 22 states, the District of Columbia, the Canadian Provinces of Alberta and Ontario, before the Federal Energy Regulatory Commission and as an expert witness for the United States Department of Justice in United States v. Cinergy Corp, a case in the United States District Court for the Southern District of Indiana. NYS000097 Curriculum Vitae of Peter J. Lanzalotta; NYS000047 Pre-filed Written Testimony of Peter J. Lanzalotta Regarding Contention NYS 33-37 (Lanzalotta Initial Test.) (Dec. 14, 2011) at 1-2.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 26 B.

NRC Staff Witness

68.

Andrew L. Stuyvenberg testified on behalf of the NRC Staff concerning Consolidated Contention NYS-37. Mr. Stuyvenberg has a B.S. in biochemistry and molecular biology from Marquette University and a Master of Environmental Management from Duke University. He has been a project manager and general scientist with the Division of License Renewal at the Office of Nuclear Reactor Regulation at the Nuclear Regulatory Commission since 2006. In that position, he has managed license renewal environmental reviews and authored alternatives analyses for NRC Staff. NRC000134. From February, 2008 until October, 2011, Mr.

Stuyvenberg served as the project manager of NRC Staffs environmental review of the application to renew the IP2 and IP3 operating licenses. NRC000133 NRC Staffs Testimony of Andrew L.

Stuyvenberg Concerning Contentions NYS-9, NYS-33, and NYS-37 (Alternatives, Consolidated)

(NRC Pre-filed Test.) (March 30, 2012) at 3.

C.

Entergy Witnesses

69.

Entergy presented three witnesses in response to Consolidated Contention NYS-37: Donald P. Cleary, Donald Harrison, Jr., and Eugene T. Meehan.

70.

Donald P. Cleary is an Environmental Safety Consultant with Talisman International, LLC. He has a B.A. degree in Economics from the University of Massachusetts, Amherst, and an M.A. degree in Economics from the University of Florida. Mr. Cleary has 38 years of experience in the nuclear industry. From 1973 to 2001, he worked with NRC Staff to develop and apply methodologies to assess various topics covered in environmental impact statements for nuclear power plant construction and operation, including such topics as the need for power (electrical generating capacity), alternative energy sources, and regional socioeconomic impacts. Since he left the NRC in 2001, he has provided consulting services to

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 27 NRC licensees in the areas of environmental impacts, power and alternate energy sources, and regional socioeconomic impacts on behalf of Talisman. ENT000479 (Testimony of Entergy Witnesses Donald P. Cleary, David Harrison Jr. and Eugene T. Meehan Regarding Contention NYS-37 (Energy Alternatives))(Entergy Pre-Filed Test. )(March 30, 2012)) at 1-3.

71.

David Harrison, Jr. is a Senior Vice President at NERA Economic Consulting, a firm of consulting economists that specializes in applying economic, finance, and quantitative principles to business and legal problems. Mr. Harrison received a Ph.D. in economics from Harvard University, and an M.S. in economics from the London School of Economics. Before joining NERA, he was an Associate Professor at the John F. Kennedy School of Government at Harvard University. ENT000479 Entergy Pre-filed Test. at 4-7.

72.

Eugene T. Meehan is a Senior Vice President at NERA Economic Consulting. He has a B.A. in Economics from Boston College. Mr. Meehan has more than 35 years of experience advising electric and gas utility clients in the areas of strategic planning, regulatory strategy, and financial and economic analysis. Before joining NERA, he was a Utility Consulting Partner with Deloitte & Touche and a Vice President at Energy Management Associates. ENT000479 Entergy Pre-filed Test. at 7-10 IV.

THE FINAL SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT

73.

On December 3, 2010, NRC Staff issued the Final Supplemental Environmental Impact Statement (FSEIS) for the license renewal of IP2 and IP3. Section 8 of the FSEIS addresses the environmental impacts of not renewing the licenses - the no-action alternative - and the environmental impacts of replacing the capacity of IP2 and IP3 with alternative energy sources or demand side management such as conservation and energy efficiency, either as direct alternatives to Indian Point or as a consequence of the no-action alternative. NYS000133A-J,

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 28 Generic Environmental Impact Statement for License Renewal of Nuclear Plants, Supplement 38, Regarding Indian Point Nuclear Generating Units Nos. 2 and 3, Final Report, Main Report and Comment Responses (Volume 1), Public Comments (Volume 2), and Public Comments Continued, Appendices (Volume 3).

74.

In the FSEIS, Staff stated: the power not generated during the license renewal term would likely be replaced by (1) power supplied by other producers (either existing or new units) using generating technologies that may differ from that at IP2 and IP3, (2) demand-side management and energy conservation, or (3) some combination of these options. While these options can be alternatives to license renewal (given sufficient resource availability), they also constitute the potential consequences of the no-action alternative. NRC000004 (NYS000133C) at 8-22.

75.

NRC Staff has concluded that the capacity of IP2 and IP3 can be replaced if their operating licenses are not renewed. See NRC000133 NRC Pre-filed Test. at 54-55 (A.70).

The alternatives analysis in Chapter 8 of the FSEIS is an explicit indication that IP2 and IP3 can be replaced. In the DSEIS and the FSEIS, the Staff considered a number of alternatives that could reasonably and feasibly replace Indian Point.

(emphasis in original).

76.

A 2003 report prepared for the New York State Energy Research and Development Authority reached the same conclusion, estimating that conservation/energy efficiency and renewable generation had the technical and economic potential to provide far more energy than would be needed to replace the capacity of IP2 and IP3 in 2012 and in 2022.

NYS000080 Optimal Energy, Inc., Energy Efficiency and Renewable Energy Resource Development Potential in New York State, Final Report, Volume 1: Summary Report (August

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 29 2003)(2003 Optimal Report) at 3-4. This report is cited at 10-11 in the 2007 Synapse Report, NYS000052 at 10-11.

77.

Entergys witnesses also agree that IP2 and IP3s baseload generation could be replaced if the licenses were not renewed. Entergy Pre-filed Test. at 16, A.4.

78.

Entergy, however, asserts that Indian Points capacity would be replaced primarily by fossil fuel-fired generation. Entergy Pre-filed Test. at 16.

A.

The Substance of the FSEIS

79.

The categories of environmental impacts analyzed in the FSEIS are land use, ecology, water use and quality, air quality, waste, human health, socioeconomics, socioeconomics (transportation), aesthetics, historic and archeological resources, and environmental justice. Negative impacts in these categories are analyzed and they are characterized as small, moderate, or large.

80.

Staff concluded that the impacts in these categories from ceasing operations at IP2 and IP3, without considering the impacts of replacing its capacity, would all be small, except for general socioeconomics, in which the impacts would be small to moderate, varying by jurisdiction. NRC000004 (NYS000133C at 8-21, Table 8-2 Summary of Environmental Impacts of the No-Action Alternative).

81.

Section 8.3 of the FSEIS discusses the environmental impacts of purchased power, alternative energy sources, conservation and energy efficiency measures, all of which constitute potential consequences of the no-action alternative. Since IP2 and IP3 have a net electric output of 2158 MW(e), Staff evaluated the impacts of alternatives with comparable capabilities. NRC000004 (NYS000135C) at 8-27.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 30

82.

The FSEIS states that electricity costs and grid reliability are outside of the scope of NRCs review and that the New York Independent System Operator would monitor grid function and reliability with prices established on New York States restructured electricity market. NRC000004 (NYS000133C) at 8-15.

B.

Coal-Fired Electric Generation

83.

In the 2008 DSEIS, NRC Staff had included a new coal-fired generator as an alternative to license renewal and as a possible consequence of the no-action alternative, despite acknowledging that some coal-fired power plant proposals have recently faced opposition or rejection in some jurisdictions, that coal-fired generation faces greater regulatory uncertainty and risk from potential future greenhouse gas regulation than other generation alternatives and that in New York, coal-fired power plants would need to comply with elements of the Regional Greenhouse Gas Initiative. NYS000132B at 8-33, Generic Environmental Impact Statement for License Renewal of Nuclear Plants, Supplement 38, Regarding Indian Point Nuclear Generating Units Nos. 2 and 3, Draft Report for Comment, Main Report and Comment (DSEIS).

84.

NRC Staff devoted 13 pages of the DSEIS to a discussion of the environmental impacts of a new coal-fired generator with a capacity of 2200 MW(e). NYS000132B at 8 8-45.

85.

In the 2010 FSEIS, NRC Staff removed new coal-fired generation from the range of alternatives considered in depth, based on comments about greenhouse gas and permitting restrictions in New York State and on indications from the U.S. Department of Energy that coal use in New York State power generation is markedly declining. NYS000133C at 8-1. Staff concluded in the FSEIS that new coal-fired generation is unlikely in New York State.

NRC000004 (NYS000133C) at 8-43.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 31

86.

As NRC Staff witness Andrew Stuyvenberg testified, Staff excluded only the impacts of the construction and operation of a new coal-fired generator from the environmental analysis, but not the impacts of the continued operation of existing coal-fired plants or the restart of a furloughed coal plant. Tr. 3014:15-3015:20 (Stuyvenberg).

87.

The FSEIS, however, retains a ten page discussion of new coal generation, even though new coal generation was no longer being considered. NRC000004 (NYS000133C) at 8-49 59.

88.

Mr. Stuyvenberg explained that Staff retained this fairly lengthy consideration of coal-fired power in the FSEIS because new coal fired generation might nevertheless end up as a consequence of the no-action alternative and Staff wanted to ensure that it had some coverage for that particular issue. Tr. 3105:12-19 (Stuyvenberg).

89.

NRC Staffs FSEIS discussed two independent alternatives as possible complete replacements for the capacity of IP2 and IP3 -- purchased electric power, and conservation/energy efficiency. NRC000004 ((NYS000133C) at 8 8-43.

C.

Natural-Gas Fired Combined Cycle Generator

90.

Staff concluded that the environmental impacts of installing a Natural-Gas Fired Combined Cycle Generator (NGCC) at the IP site or at another repowered site were small to moderate in the categories of land use, air quality, socioeconomics, transportation, historical and archeological resources, and small to large in environmental justice. The impacts were small in all other categories ( i.e. ecology, water use and quality, waste, human health and aesthetics). NYS000133C at 8-38.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 32

91.

Staff concluded that the range of environmental impacts of a NGCC at a new site were larger in the categories of land use, ecology, water use and quality and aesthetic than at Indian Point. NYS000133C at 8-38.

D.

Purchased Electric Power

92.

In determining the environmental impacts of purchased power, Staff concluded that all alternative sources of power considered in the FSEIS could supply purchased power with the only constraint being electric transmission capacity. NRC000004 (NYS000133C) at 8-39.

93.

Relying on the 2006 report by the National Research Council, Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs (2006 National Research Council Report), NYS000055, the FSEIS concluded that new transmission capacity would likely be necessary to move purchased power into the New York City and Long Island zones to provide a partial solution to the retirement of IP2 and IP3 because of bottlenecks in the transmission lines. NRC Staffs FSEIS also concluded that new transmission capacity would likely be either an expansion of the existing high voltage alternating current transmission system or the addition of new high current direct voltage transmission facilities. NRC000004 (NYS000133C) at 8-40.

94.

Transmission constraints are also discussed in FSEISs general discussion of the alternatives process because the availability of transmission line capacity to deliver power from outside the NYC Metropolitan region to current IP2 and IP3 customers could constrain siting choices for alternative generation sources. Citing an August 2006 U.S. Department of Energy report, National Electric Transmission Congestion Study, NRC Staff asserted that there are areas where it is critically important to remedy existing and growing transmission congestion

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 33 problems because the impacts of congestion could be severe. NRC000004 (NYS000133C) at 8-27.4

95.

Staff then discussed two proposed transmission projects: the New York Inter Regional Connection (NYRI), a proposed 190 mile transmission line from Oneida to Orange County and the Champlain Hudson Power Express, Inc. (CHPEI) project that could transmit 1000 MW (e) from Quebec to the New York City area. NYS000133C at 8-40.

96.

When the FSEIS was published in December 2010, the New York State Public Service Commission had already approved NYRIs application on April 21, 2009 to formally withdraw its petition for a certificate of necessity under Article VII of the NYS Public Service Law. NYRIs withdrawal request was granted with prejudice and the application dismissed.

NYS000054 at 18, ¶ 50, 2011 Schlissel Decl.

97.

In NRC Staffs pre-filed testimony, Andrew Stuyvenberg acknowledged that the NYRI transmission project was no longer being pursued at the time the FSEIS was issued, but asserted that it was mentioned in the FSEIS simply as an example of the type of project that is illustrative of the potential for transmission improvements. NRC Pre-Filed Test. at 53-54.

4In response to petitions for review filed by the State of New York and others, the U.S.

Department of Energys Congestion Study and its designation of National Interest Electric Transmission Corridors was invalidated by the U.S. Court of Appeals for the Ninth Circuit.

California Wilderness Coalition v. U.S. Dept of Energy, 631 F.3d 1072 (9th Cir. 2011). In an August 2012 report, the New York State Energy Planning Board recognized that the electric transmission system in New York contains certain locations, or transmission interfaces, where the designed capacity limits the amount of power capable of moving from one part of the state to another. NYS000443 New York State Transmission and Distributions Systems Reliability Study and Report New York State Energy Planning Board, at 11 (Aug. 30, 2012). One of these interfaces limits the amount of power moving from the northern and western portions of the state to the eastern and southeastern portions of the state. NYS000443 at 11. In late November 2012, the New York State Public Service Commission initiated a proceeding to review specific proposals from utilities and private developers for new transmission lines and upgrades to existing facilities that will address congestion on the transmission system between Utica and New York City. NYS000466

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 34

98.

NRC Staff did not independently evaluate the impacts of the two transmission projects mentioned in the FSEIS on the ground that there was no specific route information.

NRC000004 (NYS000133C) at 8-40. Instead, for the purpose of the FSEIS, Staff assumed that adequate transmission will exist - either through planned new projects such as NYRI or the Champlain Power Hudson Express or by locating the alternatives near to downstate loads.

NRC000004 (NYS000133C) at 8-27.

99.

However, in Section 9.1.2 of the FSEIS, Irreversible or Irretrievable Resource Commitments, Staff stated that significant resource commitments would be required for development of transmission capacity. NRC000004 (NYS000133C) at 9-6. At the hearing, Judge McDade suggested that this statement appeared to contradict NRC Staffs assertion that the impacts of transmission constraints were not considered in the environmental analysis of alternatives. In response, Mr. Stuyvenberg acknowledged that the language in Section 9.1.2 had been in the DSEIS but should have been deleted from the FSEIS because it was contrary to language in Section 8 that Staff would not use transmission constraints as a reason to reject any particular alternative. Tr. 3213:04-3217:01 (Stuyvenberg).

100.

While relying on the defunct NYRI transmission project, Staff ignored information presented by the State in its comments on the DSEIS and in Contention NYS-33 about new operating transmission lines bringing power into the New York City metropolitan area, new transmission capacity in the process of being installed and new transmission capacity that has been approved but not yet installed. NYS000134 (Comments Submitted by the Office of the New York State Attorney General on the Draft Supplemental Environmental Impact Statement Prepared by the Staff of the Nuclear Regulatory Commission for the Renewal of the

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 35 Operating Licenses for Indian Point Units 2 and 3, Buchanan, New York (March 18, 2009)

(NYS Comments on DSEIS)).

101.

For example, the FSEIS ignores the following transmission projects that are bringing or will bring power to the New York City metropolitan area in Zones I and J (a) the Neptune Cable that links the Long Island Power Authority service area with energy sources in New Jersey, and the Pennsylvania-New Jersey-Maryland (PJM) grid which provides up to 600 megawatts of electricity to Long Island. NYS000134 at 32; NYS Lanzalotta Initial Test. at 9:13-17..

(b) the trans-Hudson and trans-Arthur Kill connections and interconnection upgrades that are in the New York Independent System Operator (NYISO) interconnection queue. These include the Brookfield Power U.S. Harbor Cable Project II (200 MW), the East Coast Power LLC interconnection upgrade (300 MW: Linden, Staten Island) and the Hudson Transmission Partners interconnection upgrade (660 MW) (linked to Sayreville, New Jersey.

NYS000134 at 32; NYS Lanzalotta Initial Test. at 9:06-10:03.

102.

In particular, NRC Staff ignored the approval of the Hudson Transmission Partner Line, a 345 Kv line that will connect the PJM grid to mid-town Manhattan. It is expected to initially provide 320 megawatts of firm capacity from PJM to New York City, with the potential to provide 660 MW of firm capacity if necessary investments are made to upgrade PJM facilities.

NYS Lanzalotta Initial Test. at 7:19-9:02.

103.

In the order approving the Hudson Transmission Partner Line, the New York State Public Service Commission acknowledged the possibility that one or more of the Indian Point plants might close, and based its approval in part on the fact that the HTP facility will assist in maintaining system reliability in that eventuality. NYS000111 State of New York Public

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 36 Service Commission, Order Granting Certificate of Environmental Compatibility and Public Need [for HTP line] (Sept. 15, 2010) at 44; NYS Lanzalotta Test. at 7:19 - 9:02.

104.

Moreover, each of these transmission projects discussed by New York and Mr.

Lanzalotta referenced in paragraphs 96 to 98 provide electrical transmission links to New York via submarine (i.e., underwater) cables.

105.

As such, they differ materially from the withdrawn NYRI proposal, which involved an overhead transmission line and would require analyses of very different potential environmental impacts.

106.

In the FSEIS, NRC Staff concluded that the actual environmental impacts of purchased power are difficult to determine because each type of power generation alternative has its own set of potential environmental costs and benefits, and each must be evaluated with respect to the specific location and features of the generator. As a result, Staff decided that the specific environmental impacts of purchased power cannot be reasonably evaluated in the absence of more information. Staff further concluded it is highly likely that any generating source of purchased power will have environmental impacts, the type and magnitude of which cannot be assessed for comparative purposes as an alternative to license renewal of IP2 and IP3.

NRC000004 (NYS000133C) at 8-41.

107.

Thus, NRC Staff failed to do any analysis of the environmental impacts of purchased power.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 37 E.

Conservation and Energy Efficiency 108.

Based on the conservation and energy efficiency efforts made by New York State and the States comments on the DSEIS, Staff evaluated conservation as an alternative to replace at least part of the output of IP 2 and IP3. NYS000133C at 8-42.5 109.

Staff acknowledged that impacts from the conservation alternative are generally lower than those from other alternatives, including the proposed action. NYS000133C at 8-73.

110.

Staff relied on the 2006 National Research Council report, which concluded that energy efficiency and demand side management have great economic potential and could replace at least 800 MW(e) of the energy produced by IP2 and IP3 and possibly much more.

NYS000133C at 8-42--8:43.

111.

Staff relied on New York States aggressive efforts in energy efficiency, to consider an energy efficiency/energy conservation alternative to replace all of IP2 and IP3s capacity. NRC000004(NYS000133C) at 8-43. The FSEIS also included energy conservation/energy efficiency in two combinations of alternatives that it discussed. NRC000004 (NYS000133C) at 8-60.

112.

The FSEIS does not reflect a specific analysis of the conservation/energy efficiency programs that could potentially be used to replace IP2 and IP3s capacity. Regarding the viability of conservation/energy efficiency in New York State, Staff noted that at the time the FSEIS was published, a wide variety of programs have already been proposed or potentially 5 NRC Staff noted that the term conservation typically refers to all programs that reduce energy consumption, while the term energy efficiency refers to a subset of programs that reduce consumption without reducing services. Staff explained that some conservation measures considered by the NRC staff are also energy efficiency measures. NRC000004 (NYS000133C) at 8-41, n.4. Thus when NRC Staff and its FSEIS use the term conservation the State understands that term to encompass both conservation and energy efficiency measures.

Such combined actions are also known collectively as demand side management.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 38 proposed at that point. Tr. 3001:25-3002:11. At the hearing, Mr. Stuyvenberg noted that in previous EISs, Staff did take a closer look at the specific types of efficiency and conservation programs that typically form the foundation for those kinds of reductions. Tr.3001:09-3002:11 (Stuyvenberg). Mr. Stuyvenberg did not identify the EISs to which he referred.

113.

Because the 2010 FSEIS fails to define what energy efficiency and/or energy conservation programs it anticipates will be available to replace the Indian Point generators, it is impossible to determine site-specific impacts for, the reasonableness of, or the viability of NRCs energy efficiency/conservation no-action alternative. NYS Schlissel Initial Test. at 25:08-21.

114.

New York State witness Peter Bradford, a former NRC Commissioner, member of the Maine Public Service Board, and Chairman of the New York State Public Service Commission, testified about the FSEISs superficial consideration of the impacts of alternatives.

[Wh]at the Staff product, at this point, does is to say that one of the potentials is a conservation alternative with small environmental impacts, except in the case of some of the local financial impacts which are moderate. But it does not give a decision-maker any serious sense of what the realities of that alternative are. It is almost a throw-away. And so it doesnt really inform the decision-maker as to whether this is something that is really kind of remote but the Staff threw it in to respond to the State of New York or whether there is some reality and substance to it.

Tr. 3202:19-3203:05 (Bradford).

115.

As former NRC Commissioner Peter Bradford further testified, the FSEIS ignored one factor that provides reality and substance to a conservation/energy efficiency alternative for Indian Point, the reduction of demand for electricity caused by the recession. That lower demand provides a longer period of time within which conservation/energy efficiency and renewable energy programs can come on line to replace the capacity of IP2 and IP3 before electric reserve margins would become too low without Indian Point. Thus, even if demand

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 39 were to return to the projected growth rate that existed before the recession, that growth in demand for electricity will begin from a lower baseline and push out further into the future the point in time at which reserve margins without Indian Point become unsatisfactory. If an increased growth in demand begins from a lower baseline, there will be more time for conservation/energy efficiency and renewables to replace the capacity of IP2 and IP3. Tr.

3206:04-3208:01 (Bradford). See NYS000473 Nuclear Intelligence Weekly United States:

Glum Economics Skewer Plans for Nuclear Uprates (November 26, 2012) (demand forecasts from United States Energy Information Administration are far lower than in years before 2008-2009 financial crisis).

116.

Staffs FSEIS did not undertake or present any Indian Point-specific analysis of the environmental impacts of conservation/energy efficiency. Instead, NRC Staff adopted and incorporated its previous analyses of the environmental impacts of conservation/energy efficiency from EISs for two different nuclear reactors -- Shearon Harris in North Carolina and Three Mile Island, Unit 1 near Harrisburg, Pennsylvania. Those analyses concluded that all impacts from conservation/energy efficiency at Shearon Harris and Three Mile Island, including socioeconomic impacts, would be small. NYS000133C at 8-43. NYS000065 at 8-65 -- 8-66 (Generic Environmental Impact Statement for License Renewal of Nuclear Plants, Supplement 33, Regarding Shearon Harris Nuclear Power Plant, Unit 1, Final Report (August 2008));

NYS000066 at 8-26 -- 8-27 (Generic Environmental Impact Statement for License Renewal of Nuclear Plants, Supplement 37, Regarding Three Mile Island Nuclear Station, Unit 1, Final Report (June 2009))

117.

Staff, however, deviated from the conservation/energy efficiency impact analysis in Shearon Harris and Three Mile Island when it concluded that the socioeconomic impacts of

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 40 shutting down Indian point would be small to moderate, based on the loss of Payment in Lieu of Taxes (PILOT) revenue paid to municipalities near IP2 and IP3, and lost jobs that would not be offset by conservation/energy efficiency. NYS000133C at 8-43.

118.

While mentioning the negative socioeconomic impacts of replacing IP2 and IP3s capacity with conservation and efficiency, Staffs FSEIS ignored the positive socioeconomic impacts of energy efficiency, such as job creation, reduced energy use, and improvement of housing, perhaps leading to a property tax base increase. The positive effects of energy efficiency are experienced where people live and work and would result in major positive benefits in New York City, Long Island, and Westchester County. Tr. 3003:12-3004:05 (Schlissel); NYS000048 NYS Bradford Initial. Test. at 21:06 -17; NYS000113 (NYSERDA 2009-2010, New Yorks Clean Energy Economy) at 10-12.

119.

Nor does the FSEIS take into account the impacts and benefits other Northeastern communities have experienced where nuclear plants have closed (Wiscasset, Maine and Haddam Neck, Connecticut), but the localities continue to receive substantial property tax payments as hosts of interim spent fuel storage facilities. NYS000048 NYS Bradford Initial. Test. at 21:18-22:07.

120.

ASLB Chair McDade asked NRC Staff witness Stuyvenberg whether the FSEIS should inform the NRC Commissioners of the positive impacts of replacing Indian Points capacity with efficiency or renewable generation. Mr. Stuyvenberg responded that the challenging part for the NRC, is that its environmental impact analysis is built around adverse impacts. He added that the description of an impact as large, by definition means that it is destabilizing and the notion of a large impact somehow being a positive thing is hard to consider. Mr. Stuyvenberg acknowledged that the Staffs inability to consider large positive

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 41 impacts from an alternate course of action, is perhaps a kind of flaw in the system the agency uses but it is a reality. Tr. 3242:07-16; 3243:09-18 (Stuyvenberg).

F.

Alternatives Dismissed From Individual Consideration 121.

The FSEIS discussed the environmental impacts of the following generation technologies that it determined to be individually inadequate to serve as alternatives to IP2 and IP3. NYS000133C at 8-43-49.

a: windpower b: wood and wood waste c: hydropower d: oil-fired generation e: solar power f: new nuclear generation g: geothermal energy h: municipal solid waste i: other bio-mass derived fuels j: fuel cells k: delayed retirement l: combined heat and power m: supercritical coal-fired generation G.

Combinations of Alternatives 122.

After dismissing certain individual technologies as being insufficient to replace IP2 and IP3s capacity standing alone, the FSEIS considered two combinations of alternatives that included several of these technologies. NYS000133C at 8-59-- 8-60. Staff selected the two combinations of alternatives based on analysis in the 2006 National Research Council Report and comments on the Draft SEIS. NYS000133C at 8-60. They are set forth below.

1.

Combination Alternative 1 continued operation of either IP2 or IP3 [but not both].

obtaining 600 MW(e) from renewable energy sources (primarily wind with smaller amounts of hydropower, biomass and possibly landfill gas;

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 42 assumes that sufficient hydropower, biomass and landfill gas capacity exists to compensate for wind power intermittency) measures identified in the States 15 by 15 energy conservation program and other efforts to improve energy efficiency or increase conservation.

2.

Combination Alternative 2 repowering an existing fossil powered plant in downstate New York or at the Indian Point site with a new 400 MW(e) to 600 MW(e) natural gas combined cycle power plant.

obtaining 600 MW(e) from renewable energy sources (primarily wind, biomass, new hydropower, and landfill gas) implementing 1000 to 2000 MW(e) of conservation programs 123.

However, Staff ignored a combination alternative of renewable generation and energy efficiency proposed by New York State witness David Schlissel in his 2007 Synapse Report. NYS00052 at 10. In that report, Mr. Schlissel discusses an August 2003 study prepared for NYSERDA by Optimal Energy, Energy Efficiency and Renewable Energy Resource Development Potential in New York State and summarizes its results as follows:

Based on the results of this study, renewable resources have the technical and economic potential to provide between 1427 MW and 1855 MW of new capacity in New York State by 2012 and between 5283 MW and 5618 MW of new capacity by.

2022. Energy efficiency and renewable resources together have the technical and economic potential to provide between 12,313 MW and 15,006 MW in 2012 and between 17,947 MW and 21,074 MW in 2022. Clearly, this is far more than would be required to replace the approximately 2000 MW of capacity from Indian Point Units 2 and 3. NYS00052 at 10.

124.

NRC Staffs sole reason for ignoring the renewable energy/conservation combination discussed by Mr. Schlissel and New York State was that the State had allegedly not discussed it in comments on the DSEIS in 2009. NRC000133 NRC Pre-filed Test. at 17, A.18.

However, in November 2007, the State of New York provided the 2007 Synapse Report to NRC Staff. Shortly thereafter, NRC Staff published the 2007 Synapse Report on NRCs Agencywide

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 43 Documents Access and Management System (ADAMS), the official recordkeeping system of NRC and assigned it a public ADAMS accession number of ML073400205. See NRC website at http://www.nrc.gov/reading-rm/adams.html (last visited March 4, 2013). NRC Staff received the 2007 Synapse Report and posted it on ADAMS one year before NRC Staff completed its work on the DSEIS. In March 2009, when the State of New York submitted its comments on the DSEIS to NRC Staff, the State specifically referenced the 2007 Synapse Report, which NRC Staff already had in hand. NYS000134 at 22.

H.

Environmental Impacts of Combination Alternatives 1 and 2 125.

NRC Staff acknowledged in the FSEIS that it had not yet addressed in any depth the impacts of wind power or biomass generation - two renewable energy sources included in both combination alternatives -- because those impacts depend heavily on where the facilities are located. NYS000133C FSEIS at 8-61-- 8-63. As a result, the range of impacts in many of the impact categories for these two combination alternatives is very broad. For example, the impacts of wind power or biomass generation are categorized as small to large in many categories because their intensity depends in large measure on the location of the facilities. NYS000133C at 8-71--8-72.

126.

NRC Staff concluded that the range of impacts of Combination Alternatives 1 and 2 would be identical in every category except for socioeconomics. In that category, the impacts of Combination Alternative 1 would be small, while the impacts of Combination Alternative 2 would be small to moderate. The difference is based on Staffs assertion that the loss of some PILOT payments and jobs would be smaller in Alternative 1, in which one Indian Point nuclear power reactor (either IP2 or IP3) continues to operate, than in Alternative 2, in which both reactors cease to operate. NYS000133C FSEIS at 8-71 -- 8-72.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 44 127.

The Combination Alternatives analyzed in the FSEIS are static over the entire twenty years of the license renewal term. Thus, in Combination Alternative 2, Staff assumes that a 400 to 600 MW(e) combined cycle natural gas plant will need to continue operating for twenty years after license renewal in order to replace part of the capacity of IP2 and IP3. These static scenarios do not represent the real world of energy. Electric grids and resource planning are dynamic, not static, and what will actually replace Indian Point over 20 years will change over time, as new resources are added, and some resources are retired. Tr.2938:20-2939:07 (Schlissel).

I.

Staff Summary of Impacts of Alternatives Considered 128.

Staff acknowledges that the impacts from the conservation/energy efficiency alternative are generally lower than those from other alternatives, including the proposed action of relicensing both IP2 and IP3. NYS000133C FSEIS at 8-72 -- 8-73.

129.

Impacts from the Natural-Gas Fired Combined Cycle Generator alternative at a repowered site or at the IP site have the potential for larger air quality impacts but smaller aquatic ecology impacts than the continued operation of IP2 and IP3. NYS000133C FSEIS at 8-72 -- 8-73.

130.

Impacts from combination alternatives (with or without continued operation of one IP unit) that do not rely on conventional hydropower are likely to have smaller aquatic impacts than continued operation of IP2 and IP3, while they have potentially larger impacts in other areas, including air quality, aesthetics, and land use. NYS000133C FSEIS at 8-72 -- 8-73.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 45 J.

NRC NEPA Standard of Decision 131.

The NRCs definition of the purpose and need for license renewal is:

to provide an option that allows for power generation capability beyond the term of a current nuclear power plant operating license to meet future system generating needs, as such needs may be determined by State, utility and where authorized, Federal (other than NRC) decisionmakers.

NYS000133C FSEIS at 9-2.

132.

The evaluation criterion for the NRC Staffs environmental review, as defined in 10 C.F.R. § 51.95(c)(4) and the GEIS, is to determine whether or not the adverse impacts of license renewal are so great that preserving the option of license renewal for energy planning decisionmakers would be unreasonable. NYS000133C at 9-2.

133.

Pursuant to the NRCs NEPA license renewal regulations, the NRC is not required to include discussion of need for power from a relicensed facility in its environmental impact statement. 10 C.F.R. § 51.95 (c)(2).

134.

As NRC Staff witness Andrew Stuyvenberg testified, the NRCs definition of purpose and its NEPA evaluation criterion were drafted to respond to concerns of various states and other energy planners that they make the final decision about whether the power is needed from a relicensed nuclear power plant, and not the NRC. Therefore, Staff doesnt perform an analysis of need for power and instead looks to replace the capacity generated by the specific facility, in this case, Indian Point, in which for purposes of our analysis was 2158 megawatts.

Tr. 3217:10-3218:19 (Stuyvenberg).6 6When NRC prepared and promulgated the GEIS for License Renewal and amendments to the 10 C.F.R. Part 51 regulations it stated for license renewal, the issues of need for power and utility economics should be reserved for State and utility officials to decide. Final Rule, Environmental Review for Renewal of Nuclear Power Plant Operating Licenses, 61 Fed. Reg. at 28472, 28484 (June 5, 1996). The Federal Register notices make clear, however, that the phrase need for power referred to traditional determinations by a state regulatory agency acting in its

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 46 135.

After Mr. Stuyvenberg testified that reductions in electric demand projections are essentially irrelevant to the no-action alternative analysis which is limited to replacing the current capacity of one or both of the Indian Point facilities, the following colloquy with the Board occurred:

MR. STUYVENBERG: The challenge for us is we are not energy planners. In putting together the rule, we received a lot of input to indicate that it was important that NRC Staff not step on the toes of various energy planners. And so our approach looks to replace the capacity at the time the license expires.

JUDGE WARDWELL: And how are you replacing that?

MR. STUYVENBERG: We dont specifically choose.

JUDGE WARDWELL: How do you determine what the environmental impacts are associated with that replacement if you dont choose something under the no-action alternative to replace that? That is what I dont understand.

MR. STUYVENBERG: Sure. And if I could, Id like to point out that our job isnt to determine the most likely alternative to take its place because we dont control that. What we do is that we point out that there are a variety of consequences, which include those alternatives that we looked at in depth, which include the combinations we looked at, which includes energy efficiency and conservation and which may include some of the things we have found not to be individually capable of replacing the power plant, or to be not reasonable alternatives, such as the coal-fired alternative we eliminated. We dont choose a specific scenario to dictate what is going to happen in the case of Indian Point shutdown. But we do indicate in the no-action alternative, the impacts directly from plant shutdown, and also indicate in the various other alternatives we consider, the environmental impacts of considering those alternatives.

Tr. 3218:20 - 3220:23 (Stuyvenberg/J. Wardwell).

licensing capacity that the construction or operation of a specific electric generation facility was justified by a need for power and was entitled to a certificate of public good and a rate of return.

59 Fed. Reg. 37724, 37725 (July 24, 1994); 61 Fed. Reg. 2847, 28467, 28471-72 (June 5, 1996).

This statement does not address the required analysis of the environmental impacts of the no-action alternative under NEPA, but simply clarifies that the NRC will not step into the traditional licensing role of State Public Utility Commissions and grant or deny a renewal license based on NRCs determination of whether or not the power is needed. However, 10 C.F.R. § 51.95 (c)(2) does not relieve Staff of its obligation of doing a thorough no-action environmental impact analysis.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 47 136.

Judge Wardwell then asked Mr. Stuyvenberg the following question:

How do you reach a decision in regards to the attractiveness of potentially shutting down a plant under the no-action alternative, if it might have less environmental impacts associated with the other alternatives that you evaluated for the EIS? I guess I dont understand why there is any significant information available for a decision-maker to look at in regards to the conclusions associated with a no-action alternative as you have just described it?

Mr. Stuyvenberg responded that under the NRCs NEPA evaluation criterion, the question isnt whether one option is environmentally preferable but whether license renewal is unreasonable in the context of the other alternatives the staff considered.... Tr. 3224:02-3225:23 (Stuyvenberg/J. Wardwell).

137.

Neither the FSEIS nor Mr. Stuyvenberg provided any standards under which the NRC determines whether license renewal is environmentally unreasonable or not.

K.

Entergys Testimony and Report 138.

Entergy retained NERA Economic Consulting to prepare a report entitled Potential Energy and Environmental Impacts of Denying Indian Points License Renewal Applications. ENT000481 Entergy Pre-filed Test. at 7, A.9; 8, A12.

139.

NERA used the National Energy Modeling System (NEMS), developed by the U.S. Energy Information Administration, to predict what type of generation would replace IP2 and IP3 and what the environmental impacts of that generation would be. ENT000481 at E-3.

140.

According to NERA, the NEMS model predicted that replacement of IPs baseload generation would come primarily from fossil fuel-fired power plants. ENT000481at E-

4.

141.

According to NERA, the NEMS model predicted that the increased combustion of fossil fuels necessary to replace IPs baseload generation would increase U.S. air emissions of

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 48 carbon dioxide by 13.5 million tons, sulfur dioxide by 6.4 million tons and nitrogen oxides by 3.3 million tons. ENT000481 at 39-40.

142.

Because the NEMS model was developed to perform macro-level policy analyses at the request of Congress, the White House, the Department of Energy and other federal agencies, it is not an appropriate model to determine the impact of the closure of individual generating units. NEMS was designed to replicate the entire U.S. and portions of Canada, it offers only very simplified descriptions of the electric grid and dispatch process in any one state.

For this reason, the results of Entergys NEMS modeling may be gross distortions of what would actually happen if Indian Point Unit 2 or Indian Point Unit 3 is not relicensed. NYS000437 (Prefiled Written Rebuttal Testimony of David Schlissel, (June 29, 2012)) at 9:22 - 11:07 (Schlissel Rebuttal Test).

143.

As an example, NEMS does not treat energy efficiency as an additional resource.

The only way to model additional energy efficiency in NEMS is as a reduction in the energy forecast, which Entergy failed to do. For this reason, it is not possible in NEMS to directly compare the cost of continuing to operate IP2 and IP3 to the cost of adding more energy efficiency. The product of the NEMS model, as Entergy has run it (that is, without reducing the energy forecast for New York State to reflect either the 15 x 15 goal or the availability of other low cost energy efficiency) could not add additional energy efficiency even if it is the lower cost resource. Accordingly, Entergys conclusion that increased energy efficiency will play very little role in the replacement of the capacity of IP2 and IP3 is not credible. NYS000437 NYS Schlissel Rebuttal Test. at 8:08-11:07; 12:20 - 14:12.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 49 144.

Entergys reliance on the NEMS model without factoring in the real word effects of conservation and efficiency also highlights a flaw in Entergys position7 that under 10 C.F.R.

§ 51.95(c)(2) Staff need not consider whether or how much of Indian Points generation would be needed upon implementation of conservation and efficiency strategies and standards that have been implemented or are being developed in New York. Entergys misapplication of NEMS, as well as its opposition to any consideration of whether or not conservation and efficiency would reduce reliance on Indian Point Unit 2 and Unit 3s output do not foster informed decision-making and informed public participation. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 371 (1989); accord Louisiana Energy Services, L.P., (Claiborne Enrichment Ctr.) CLI-98-3, 47 N.R.C. 77 (1998).

145.

Moreover, in his 36 years as a consultant in engineering and economic issues in the field of energy, New York States expert witness David A. Schlissel has never seen the NEMS model used to evaluate the potential economic and environmental impacts of retiring one or two specific generating units. NYS Schlissel Rebuttal Test. at 09:12-21.

146.

Both the NERA Report and the NEMS modeling were issued on March 30, 2012, more than one year after Staff issued the FSEIS in 2010. As Judge Wardwell noted, what is important is what did the Staff do in its EIS, regardless of the NEMS [model]. Judge Wardwell questioned NRC Staff witness Stuyvenberg and established that Staff did not use the results of Entergys NEMs modeling in preparing the FSEIS. Tr. 3109:18-20 (Stuyvenberg). In response, Judge Wardwell noted that he did not need to ask any more questions on the issue of the NEMS modeling. Tr. 3109:21-24 (J. Wardwell).

7 As discussed above at 13-14, Entergy filed a motion in limine seeking to strike portions of the States Pre-filed Testimony and Exhibits. Those in limine motions were premised on the assumption that 10 C.F.R.§ 51.95(c)(2) prohibited any discussion about whether the rated electrical output of a power reactor would be needed during the 20 year operating license term.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 50 147.

Because NRC Staff did not rely on the NEMS model or the results obtained by NERA and Entergy when NRC prepared the FSEIS, the NEMS model and results have no relevance to this proceeding. See I-291 Why? Assn v. Burns, 517 F.2d 1077, 1081 (2d Cir.

1975); Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1072 (1st Cir. 1980).

148.

Accordingly, the testimony of Entergys witnesses regarding the NEMS modeling should be accorded no weight and is of no probative value in this proceeding.

V.

CONCLUSIONS OF LAW A.

The FSEISs Consideration and Analysis of the No-Action Alternative is Deficient 149.

The fundamental issue in a no-action alternative analysis is what combinations of alternate generation sources, energy efficiency, and conservation measures are reasonably likely to be available to replace the capacity of IP 2 and IP3 and what are the environmental impacts of those measures.

150.

Staffs analysis of the no-action alternative in the FSEIS does not comply with NEPA. Staff takes only a glancing look at the most environmentally benign alternatives to replace the capacity of IP2 and IP3 and thereby fails to inform the decisionmaker whether any of the alternatives it considers are actually viable. Instead, Staff attempts to insulate the FSEIS from the States challenge by simply superimposing some of the States suggested replacement scenarios into the no-action analysis while at the same time retaining obsolete data and stale analyses from the DSEIS that evidences Staffs lack of seriousness in considering them.

Staffs fundamentally flawed analysis of the no-action alternative in the FSEIS does not enable the decision-maker to compare the beneficial and adverse impacts of doing nothing. Kilroy v.

Ruckelshaus, 738 F.2d 1448, 1453 (9th Cir. 1984).

1.

Staffs Consideration of the Purchased Power Alternative is Flawed

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 51 151.

In its analysis of purchased power as a full IP replacement, Staff asserts that the only constraint on that alternative is electric transmission capacity. The FSEIS then contains an extensive discussion of the need for new transmission capacity to efficiently bring power into the southern part of the state and the difficulty of accomplishing that. In the course of its analysis, Staff relies on a transmission project that had already been withdrawn by the date of the FSEIS, but ignores transmission projects that were ongoing or had been completed and that had already become part of the grid in Zones H, I, J, and K. NRC000004 (NYS000133C) at 8-40.

152.

Transmission constraints are also mentioned in Staffs general discussion of the alternatives process because the availability of transmission line capacity to deliver power from outside the NYC metropolitan region to current IP2 and IP3 customers could constrain siting choices for alternative generation sources. Citing a 2006 U.S. Department of Energy report, Staff asserted there are areas where it is critically important to remedy existing and growing transmission congestion problems because the impacts of the congestion could be severe. NYS000133C at 8-27.

153.

The FSEIS suggests that replacing IP2 and IP3s capacity with purchased power from existing or newly constructed natural gas combined cycle generators will be extremely difficult until the transmission congestion problems in the southern part of the state are resolved.

But Staff nevertheless assumes, for the purpose of the analysis, that adequate transmission will exist, NYS000133C at 8-27, so that no alternative would be excluded from consideration in the FSEIS based on transmission constraints. NRC Pre-filed Test. at 34 (A.35).

154.

The FSEIS fails to account for any of the transmission projects and upgrades that were recently completed, or under construction, or approved but not yet commenced.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 52 155.

Judge McDade questioned Staff witness Stuyvenberg about the accuracy of the FSEISs assertion that significant resources would be needed to develop additional transmission capacity, noting that Mr. Bradford testified that much of that capacity is available now without the additional expenditure of resources. Tr. 3213:04-16. Judge McDade then asked Stuyvenberg the following key question:

Mr. Stuyvenberg, doesnt that render the Environmental Impact Statement inadequate on its face as just wrong and giving an inaccurate impression to the decisionmaker as to the environmental consequences of the no-action alternative?

Tr. 3213:11-16 (J. McDade).

156.

Mr. Stuyvenberg had only one response to Judge McDades question -- that the FSEISs lack of critical information about new and planned transmission resources was not significant because the FSEIS did not reject any alternative based on transmission constraints.

Tr. 3213:17-3214:23 (Stuyvenberg).

157.

Indeed, Mr. Stuyvenberg seemed unaware that the FSEIS stated that significant resources would be required for transmission upgrades until Judge McDade pointed him to section 9.1.2 of the FSEIS. Tr. 3214:24 - 3216:12. In response, Stuyvenberg conceded that the significant resources language, which was initially in the DSEIS, should have been removed from the FSEIS because it was inconsistent with the new position that transmission constraints will not eliminate any alternative from consideration. Tr. 3216:19 - 32:17:01 (Stuyvenberg).

Judge McDades questioning highlighted just one - albeit glaring - example of the internal inconsistencies that render the FSEIS inadequate.

158.

In essence, what Staff has done in the FSEIS is simply to superimpose some of New Yorks suggested alternatives on top of the flawed analysis in the DSEIS. Without an accurate picture of the current transmission situation, a decisionmaker would read the FSEISs

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 53 discussion of allegedly serious and as-yet unsolved transmission congestion, and be persuaded to select an alternative that did not depend on Staffs assumption that those constraints do not exist because the FSEIS provides none of the existing factual information that supports its assumption. As Judge McDade correctly noted, the absence of this information, renders the Environmental Impact Statement inadequate on its face as just wrong and giving an inaccurate impression to the decisionmaker as to the environmental consequences of the no-action alternative. (Tr. 3213:11-16) (J. McDade) 159.

The FSEIS analysis of the no-action alternative must provide a factually accurate discussion of transmission issues to help the decisionmaker determine the viability of purchased power as a replacement for IP2 and IP3s capacity. An accurate discussion would have included recently completed transmission projects and upgrades, such as the Linden Variable Frequency Transformers, the Neptune Cable linking the Long Island Power Authority service area with energy sources in New Jersey, and the Pennsylvania-New Jersey-Maryland (PJM) grid, the trans-Hudson and trans-Arthur Kill connections, and interconnection upgrades that are in the New York Independent System Operator (NYISO) interconnection queue and recently approved projects such as the Hudson Transmission Partners line and the Cross-Hudson cable.

NYS000052 at 14-15; NYS000106 at 5-6 (2011 Bradford Decl.); NYS000134 at 32.

160.

NEPA dictates that Staffs inaccurate and deficient discussion of transmission constraints can only be cured by a full and factually accurate analysis of the issue, in which rejected projects are not included as if they still exist, and transmission projects are not excluded that are implemented and up and running, approved and are being constructed, and under regulatory development.

2.

The FSEIS Fails to Provide Any Analysis of the Conservation and Energy Efficiency Alternative

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 54 161.

Staff purportedly considered a conservation and energy efficiency alternative to replace the capacity of Indian Point Unit 2 and Indian Point Unit 3. But that consideration was so truncated and vague that a decision maker would have no idea whether it is actually a viable option. New York State witness Peter Bradford, a former NRC Commissioner, former member of the Maine Public Utilities Commission, and the former head of the New York State Public Service Commission, explained the deficiency, offering his perspective as a decisionmaker in this area:

what the Staff product, at this point, does is to say that one of the potentials is a conservation alternative with small environmental impacts, except in the case of some of the local financial impacts which are moderate. But it does not give a decision-maker any serious sense of what the realities of that alternative are. It is almost a throw-away. And so it doesnt really inform the decision-maker as to whether this is something that is really kind of remote but the Staff threw it in to respond to the State of New York or whether there is some reality and substance to it.

Tr. 3202:19-3203:05 (Bradford). The FSEIS devotes only one and one-half pages to the conservation/energy efficiency alternative. NYS000133C at 8-41 -- 8-42. In contrast, Staff devotes 10 pages in the FSEIS to a discussion of the impacts of new coal-fired generation, even though Staff indicated that alternative is no longer being considered as a replacement for Indian Point. NYS000133C at 8-49 -- 8-59.

162.

The unsupported rationale Staff offered for including this lengthy discussion of a rejected replacement alternative is telling -- that even though Staff rejected new coal-fired power as a replacement alternative, it might nevertheless end up as a consequence of the No-Action Alternative and that possibility justifies the lengthy discussion of an alternative that Staff purportedly rejected. Tr. 3104:24-3105:19 (Stuyvenberg). The not-so-subliminal message from Staffs FSEIS is that new coal fired generation, with its severe air quality and climate changes

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 55 impacts, may ultimately be necessary to replace IP2 and IP3s capacity, notwithstanding Staffs consideration of more benign alternatives, and thus a decisionmaker must be aware of coal generations severe environmental impacts if the operating licenses of IP2 and IP3 are not renewed.

163.

This unsupported inclusion of a coal generation replacement possibility is not only inconsistent but improperly skews the NEPA evaluation in favor of relicensing. In Beyond Nuclear v. United States Nuclear Regulatory Commission, 704 F.3d 12, 22 (1st Cir. 2013), the Court held that a NEPA alternatives contention in a license renewal proceeding is not admissible if it provides no support for its claim that off-shore wind is technically feasible and commercially viable as a substitute for a nuclear power plant. The same principle applies here. Staff has provided no support for its assertion that new coal-fired generation might be a consequence of the no-action alternative, particularly when Staff stated that such an outcome is highly unlikely citing to a U.S. Department of Energy report that coal use in New York State power generation is markedly declining. Staffs inclusion of coal-fired generation improperly suggests that the no-action alternative could result in greater use of the most polluting method of generating electricity.

164.

Confronted with the FSEISs superficial discussion of conservation/energy efficiency and the lengthy discussion of new coal generation, a reader might have serious doubts that Staff actually viewed conservation/energy efficiency as a serious alternative to Indian Point Unit 2 and Unit 3. In the meager one and one-half pages of the FSEIS devoted to conservation, Staff failed to describe what conservation/energy efficiency programs it anticipated will be available to replace the power generated by Indian Point. When Judge Wardwell asked NRC Staff witness Stuyvenberg what efficiency and conservation programs Staff anticipated would be

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 56 available and whether those were included in the no-action alternative analysis, Stuyvenberg admitted that Staff did not conduct a specific analysis of any of New York States efficiency or conservation programs, but relied upon the fact that a wide variety of programs that had already been proposed or potentially proposed at the time the FSEIS was published. Tr. 3001:09-3002:11 (J. Wardwell/Stuyvenberg).

165.

But as New York State witness David Schlissel testified, in the absence of any detailed discussion in the FSEIS, it is impossible to determine site-specific impacts for the reasonableness of, or the viability of NRCs energy efficiency/conservation no-action alternative. Schlissel Pre-filed Test. at 25:08-25:21.

166.

In fact, NRC Staff did no site-specific analysis of the environmental impacts of the Indian Point conservation/energy efficiency alternative, but relied on previous EISs for the license renewals of Three Mile Island in Pennsylvania and Shearon Harris in North Carolina.

EISs in concluding that conservation impacts in all categories were small from conservation.

167.

While adopting the North Carolina and Pennsylvania facility findings, the FSEIS and Staff failed to explain how those examinations for facilities in different States and electric markets are relevant to Indian Point, or Zones H, I, J, or K.

168.

Not only did the FSEIS fail to establish the nexus between analysis conducted for the North Carolina and Pennsylvania plants and Indian Point, but - significantly - Staff deviated from the Shearon Harris and Three Mile Island conservation impact analyses by characterizing the socioeconomic impacts of conservation/energy efficiency as an alternative to Indian Point as small to moderate instead of small because the closing of Indian Point would reduce tax revenues of nearby municipalities and cause a loss of jobs - impacts that would allegedly not be offset by conservation and energy efficiency. NYS000133C FSEIS at 8-43.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 57 169.

This conclusion wholly ignores the counterbalancing socioeconomic benefits of conservation, such as job creation, reduced energy use and the improvement of housing stock, which could possibly lead to an increase in the tax base that would offset any tax losses. Tr.

3003:12 - 3004:05(Schlissel). As a reason for ignoring these benefits, Stuyvenberg testified that the Staffs environmental analysis is built around adverse impacts and when an impact is described as large, it means it is destabilizing, not positive. When pressed, he acknowledged that the inability to consider large positive impacts from an alternate course of action is perhaps a flaw in the system the agency uses. Tr. 3243:09 - 3243:18.

170.

In this case, that flaw in the NRCs NEPA analytic system caused the FSEIS to overestimate the negative socioeconomic impacts of conservation, when compared to license renewal, when it could have offset the negative impacts with the positive. At a minimum, NRC Staff should have discussed the positive socioeconomic impacts of conservation in the FSEIS text.

3.

Staff Improperly Refused to Consider the States Conservation/Renewable Generation Combination Replacement Scenario 171.

The State proposed that NRC Staff consider a conservation/renewables replacement scenario in the 2007 Synapse Report filed with Staff, in Contention 33 and in the States comments on the DSEIS. The viability of that scenario was discussed by David Schlissel and in the 2007 Synapse Report in which he analyzed a 2003 study prepared for the New York State Energy and Research Development Authority, that concluded that energy efficiency and renewable energy have the technical and economic potential to provide substantially more power than would be required to replace the capacity of IP2 and IP3. NYS000052 at 10. Staff did not consider this viable replacement scenario in the FSEIS, even though New York had referred to it in its comments on the DSEIS in 2009. NYS000134 at 22.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 58 172.

In the FSEIS, Staff chose instead to limit its consideration to a conservation/energy efficiency alternative, without any renewable generation, to replace the full capacity of Indian Point Unit 2 and Indian Point Unit 3. While an improvement from the DSEIS, that scenario is less conservative than a conservation/renewable generation mix and was not advanced by Mr. Schlissel in his pre-filed testimony and report. When asked by Judge Wardwell whether it was realistic to assume that demand side management could reduce demand sufficiently to replace IP2 and IP3s collective 2150 MWs of baseload power, Mr. Schlissel answered yes in the long term (10 years) and no in the short term (3 to 5 years). Tr. 2937:19-2938:19; 2941:13-22. NRC Staff witness Andrew Stuyvenberg later asserted that Staff had made some generous assumptions that New York States efficiency programs are going to overachieve because, in essence, even Mr. Schlissel thought the full conservation alternative might, in Mr. Stuyvenbergs characterization, be too aggressive in the short term. Tr.3227:20-3228:04 (Stuyvenberg).

173.

Instead of assumptions, the no-action alternative analysis should actually assess what might be available to replace the capacity of IP2 and IP3 when their operating licenses expire. The FSEIS should inform the decision maker of what the realistic options are and then comparatively analyze the environmental impacts of those options. Staffs decision to arbitrarily reject a viable conservation/renewables combination is not reasonable because it purportedly considered a more environmentally benign alternative of a full conservation scenario, albeit a vaguely described one.

174.

Staff asserts that New York State did not advance a conservation/renewables scenario in its comments on the DSEIS, and for that reason, Staff could disregard that scenario.

NRC Staff Pre-filed Test. at 17. That rationale is factually inaccurate and legally insupportable.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 59 In its DSEIS comments, New York State specifically referenced the November 2007 Synapse report of David Schlissel, which concluded that energy efficiency and renewable energy have the technical and economic potential to provide substantially more power than would be required to replace the capacity of IP2 and IP3. NYS000052 at 10.

175.

Even if the State had not advanced the conservation/renewables scenario in its DSEIS comments, under NEPA it is Staffs burden to take a hard look at combinations of alternate generation sources, energy efficiency and conservation measures that are reasonably likely to be available to replace IPs capacity. Because NRC Staff claimed to make generous assumptions that the States conservation programs would overachieve in order to provide a full replacement for IPs capacity in the short term, that scenario may very well be less reasonably likely than a combination of conservation and renewable generation. Simply choosing the most environmentally benign replacement scenario does not constitute a hard look, and it was Staffs obligation to consider a possibly more realistic combination of conservation and renewables, whether the State advanced it or not.

4.

Entergys Evidence Based on the NEMS Modeling Is Inadmissible 176.

Entergy is attempting to supplement the FSEIS with its expert witnesses predictions that the environmental impacts of the no-action alternative will be so severe in comparison to the environmental impacts of license renewal, that NRC Staffs conclusion that it is reasonable to preserve the option of license renewal cannot possibly be challenged.

177.

Entergys evidence is not admissible for that purpose and should not be considered by the Board. As the Second Circuit has held, studies prepared after the FSEIS is finalized cannot be used to cure its inadequacies or to bolster its conclusions because they were

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 60 not included in the FSEIS and were not circulated for review and comment in accordance with procedures established to comply with NEPA.. I-291 Why? Assn, 517 F.2d at 1081.

5.

Summary of FEIS Deficiencies 178.

An agency must [r]igorously explore and objectively evaluate all reasonable alternatives, including the no-action alternative. This requirement is the the heart of the environmental impact statement, and mandates that the NRC present the environmental impacts of the proposal and the alternatives in comparative form, thus sharply defining the issues and providing a clear basis for choice among options by the decisionmaker and the public. 40 C.F.R. § 1502.14(a). In particular, a proper no-action alternative analysis allows the reader to compare the beneficial and adverse impacts related to the applicant doing nothing. Kilroy v.

Ruckelshaus, 738 F.2d 1448, 1453 (9th Cir. 1984).

179.

The FSEISs analysis of the no-action alternative does not meet this standard. It skews the analysis toward relicensing by failing to describe in any detail the conservation and energy efficiency replacement scenario it purports to consider. It provides absolutely no site-specific analysis of the environmental impacts of a conservation/energy efficiency scenario to replace Indian Point but instead improperly relies on environmental impact analyses of other nuclear generators in other jurisdictions. See South Fork Band Council v. U.S. DOI, 588 F.3d 718, 726 (9th Cir. 2009) (analysis of similar effects for a separate project cannot satisfy NEPA obligations). The FSEIS provides no discussion of the positive economic benefits of conservation and efficiency because its NEPA process only permits analyses of negative impacts. It contains an extended discussion of the most environmentally malign replacement scenario -- new goal generation -- while at the same time purporting to reject it. It suggests that transmission constraints will limit the ability of purchased power to replace Indian Points

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 61 capacity while ignoring all the evidence New York State provided that the transmission issues are being resolved.

180.

In sum, a decisionmaker reading this FSEIS cannot accurately compare the beneficial and adverse impacts of doing nothing but is steered toward a conclusion that license renewal is the optimal result.

6.

Under the National Environmental Policy Act, the Appropriate Remedy for a Deficient Environmental Impact Statement is for the Atomic Safety and Licensing Board to Remand the Matter to NRC Staff to Perform a Reanalysis of Site-Specific Environmental Impacts and Prepare a Revised and Supplemental Environmental Impact Statement 181.

The assertion by Entergy and NRC Staff that a deficient FSEIS can be cured after the fact by submissions of NRC Staff, the applicant, or interveners during the adjudicatory hearing pursuant to Atomic Energy Act (AEA) § 189 (42 U.S.C. § 2239) is incorrect. First, the suggestion is inconsistent with federal regulations that emphasize the importance of the Environmental Impact Statement (EIS) document itself, as well as the publics right to review and participate in the process. Nor does any NRC regulation expressly authorize licensing boards themselves to fix or supplement a deficient FSEIS. Moreover, NRC regulations provide a specific means to supplement an FSEISa process similar to that used to prepare an EIS in the first instance. 10 C.F.R. § 51.92. Having promulgated a regulation for supplementing an FSEIS, NRC is bound by it. Further, the Commissions deliberate elimination of an earlier regulation that permitted licensing boards to modify the content of an EIS precludes any suggestion that post hoc supplementation by the Board might be available to cure deficiencies in the challenged FSEIS. Finally, federal courts have consistently recognized that when an EIS is deficient, NEPA requires it be remedied by remanding the proceeding to the administrative agency to re-initiate the EIS process.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 62 182.

NEPA directs agencies contemplating major [f]ederal actions significantly affecting the quality of the human environment to prepare an EIS demonstrating agency consideration of the reasonably foreseeable environmental effects. Brodsky v. U.S. Nuclear Regulatory Commn, 704 F.3d 113, 119 (2d Cir. 2013) (citing 42 U.S.C. § 4332(2)(C)). The statutes implementing regulations identify public scrutiny as an essential part of the NEPA process, 40 C.F.R. § 1500.1(b) (Accurate scientific analysis, expert agency comments, and public scrutiny are essential to implementing NEPA). Brodsky, 704 F.3d at 120. Accordingly, NEPA regulations provide that NEPA procedures must insure that environmental information is available to public officials and citizens before decisions are made and before actions are taken. Brodsky, 704 F.3d at 120 (quoting 40 C.F.R. § 1500.1(b)). In addition to providing crucial information to the decisionmaker, NEPA also guarantees that the relevant information will be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision. Sierra Club v. Watkins, 808 F. Supp. 852, 858 (D.D.C. 1991) (quoting Robertson v. Methow Valley, 490 U.S. at 349 (1989)).

That larger audience clearly includes the public. Id.

183.

NRCs regulations show that an environmental impact statement is of critical importance in an environmental review under NEPA. 10 C.F.R. § 51.70 (general requirements for draft EIS); 10 C.F.R. § 51.71 (describing contents of draft EIS); 10 C.F.R. § 51.72 (supplement to draft EIS); 10 C.F.R. § 51.73 (comments on draft EIS); 10 C.F.R. § 51.74 (distribution of draft EIS); 10 C.F.R. § 51.90 (preparation of final EIS after receipt of comments on draft EIS); 10 C.F.R. § 51.91 (contents of final EIS); 10 C.F.R. § 51.92 (supplementation of final EIS); 10 C.F.R. § 51.93 (distribution of final EIS); 10 C.F.R. § 51.94 (Commission obligated to consider the final EIS); 10 C.F.R. § 51.95(a) (supplement to final EIS will include a

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 63 request for comments as provided in § 51.73); 10 C.F.R. § 51.95(c) (EIS for license renewal stage); 10 C.F.R. § 51.100(a)(1)(i),(ii) (prohibiting Commission action until after draft or final EIS filed with the Environmental Protection Agency). NRCs regulations further recognize that

[a]n appendix to an environmental impact statement [itself] will.... [n]ormally consist of material which substantiates any analysis fundamental to the impact statement. 10 C.F.R. Part 51, Subpart A, Appendix A, 9(b) (format for presentation of material in EIS).

184.

Nothing in the NRCs regulations expressly permits testimony or exhibits from an adjudicatory hearing to supplement an environmental impact statement. To the contrary, regulatory history confirms that the Agency lacks the power to deem modified an otherwise inadequate EIS. In 1980, NRC initiated a comprehensive revision to the NEPA regulations, which it inherited from the Atomic Energy Commission. Environmental Protection Regulations for Domestic Licensing and Related Regulatory Functions and Related Conforming Amendments, 45 Fed. Reg. 13,739 (Mar. 3, 1980). As part of that regulatory revision, NRC eliminated an earlier version of 10 C.F.R. § 51.52, which had provided that:

an initial decision of the presiding officer may include findings and conclusions which affirm or modify the content of the final environmental impact statement prepared by the staff. To the extent that findings and conclusions different from those in the final environmental statement prepared by the staff are reached, the statement will be deemed modified to that extent and the initial decision will be distributed as provided in § 51.26(c).

10 C.F.R. § 51.52 (1975 version) (emphasis added). The rulemaking was finalized in 1984.

Environmental Protection Regulations for Domestic Licensing and Related Regulatory Functions and Related Conforming Amendments, 49 Fed. Reg. 9,352 (Mar. 12, 1984).

185.

NRCs current NEPA-implementing regulations require a formal supplement to the FSEIS: NRC staff will prepare a supplement to a final environmental impact statement...

if... [t]here are new and significant circumstances or information relevant to environmental

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 64 concerns and bearing on the proposed action or its impacts. 10 C.F.R. § 51.92(a)(2). The regulations require that a draft supplement be circulated for public review and comment and that NRC Staff must address the comments before NRC Staff may issue a final document. See 10 C.F.R. § 51.92(d) (The supplement to a final environmental impact statement will be prepared in the same manner as the final environmental impact statement except that a scoping process need not be used.); § 51.92(f)(1) (A supplement to a final environmental impact statement will be accompanied by or will include a request for comments....). [J]udicial review of administrative choices under NEPA... focuses primarily on the procedural regularity of the decision, rather than on its substance. Brodsky, 704 F.3d at 118 (quoting Sierra Club v. U.S.

Army Corps, 772 F.2d at 1055 (2d Cir. 1985)).

186.

Thus, when NRC established an Atomic Safety and Licensing Board (ASLB) under AEA § 189 and referred the Indian Point relicensing to that Board, the referral cited to 10 C.F.R. §§ 2.104, 2.300, 2.303, 2.309, 2.311, 2.318, and 2.321provisions which give the Board no authority to amend, modify, or correct NRC Staffs FSEIS. Establishment of Atomic Safety and Licensing Board, 72 Fed. Reg. 60,394 (Oct. 24, 2007). Rather, the Board is charged with ruling on, among other things, whether or not the Staff complied with NEPA in the FSEIS.

187.

Courts have consistently held that a supplemental NEPA analysis, prepared by agency staff and open to public comment, is the appropriate remedy for a NEPA violation.

Materials prepared after the FSEIS are not a substitute for supplementation and recirculation for public comment. [S]tudies [prepared after the EIS was finalized] could not cure these particular inadequacies because they were [not included in an EIS supplement and were] not circulated for review and comment in accordance with procedures established to comply with NEPA. I-291 Why? Assn, 517 F.2d at 1081; accord Brodsky, 704 F.3d at 120 (NEPA procedures must

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 65 insure that environmental information is available to public officials and citizens before decisions are made and before actions are taken.) (quoting 40 C.F.R. § 1500.1(b)).

188.

Likewise, the First Circuit has found no indication in the [NEPA] statute that Congress contemplated that studies or memoranda contained in the administrative record, but not incorporated in any way into an EIS, can bring into compliance with NEPA an EIS that by itself is inadequate. Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1072 (1st Cir. 1980)

(finding that even if agency staff made an informed, good faith decision to reject a proposed alternative, staff had nonetheless violated NEPAs procedural mandate by failing to explain that decision in the EIS). The Ninth Circuit, too, has made clear that a non-NEPA document...

cannot satisfy a federal agencys obligations under NEPA. South Fork Band Council of W.

Shoshone, 588 F.3d at 726 (citing Klamath-Siskiyou Wildlands Ctr. v. BLM, 387 F.3d 989, 998 (9th Cir. 2004)). And the Tenth Circuit declined to consider an affidavit concluding that environmental impacts were adequately analyzed because no such conclusion was recorded in any NEPA document prior to the [agency action]and it is a post hoc analysis that does not satisfy the NEPA. Pennaco Energy v. U.S. Dept of Interior, 377 F.3d 1147, 1159 (10th Cir.

2004).

189.

Furthermore, when an EIS is found deficient, courts often enjoin the agency action at issue until the supplement is completed, in order to ensure that the agency takes the supplemental information into consideration in its final decision. In Natural Resources Defense Council v. Callaway, the Second Circuit held:

The Navy should not be permitted to proceed with further dumping at the New London site until... the serious deficiencies in the EIS [are] remedied.

Otherwise application of a rule of reason would convert an EIS into a mere rubber stamp for post hoc rationalization of decisions already made. If the spirit as well as the letter of NEPA is to have any real meaning in this case, the Navy

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 66 should prepare and circulate for consideration and comment a supplemental statement....

524 F.2d 79, 94-95 (2d Cir. 1975) (emphasis added). Hence, at a minimum, if the FSEIS is found deficient, NRC Staff must revise and supplement it before the Board can make a decision on the license renewal application.

190.

Although few federal agencies have internal administrative procedures for adjudicating or appealing NEPA decisions, one such example is the Interior Board of Land Appeals (IBLA) within the Department of Interior (DOI).8 Like the federal courts, the IBLA has required that a deficient EIS be remedied through a formal supplement to the EIS. See, e.g.,

Wyoming Outdoor Council, 158 IBLA 155 (IBLA 2003) (reversing the Bureau of Land Managements project approval because staff failed to take a hard look, and remanding for further NEPA analysis). Moreover, the IBLA has found that the relevant record for determining NEPA compliance is the record at the time of the agency action, not the record as supplemented by material prepared after the NEPA document is complete.9 191.

Nor can Determinations of NEPA Adequacy (DNAs)which DOI staff use to evaluate the adequacy of previous NEPA assessmentsbe used to supplement a formal review after the fact. See Ctr. for Native Ecosystems, 170 IBLA 331, 332 (IBLA 2006) (DNAs cannot 8 The IBLA is an appellate review body that exercises the delegated authority of the Secretary of the Interior to issue final decisions for the Department of the Interior. Located within the Departments Office of Hearings and Appeals, IBLA is separate and independent from the Bureaus and Offices whose decisions it reviews.

9 For example, after an 18-day hearing in National Wildlife Federation, et al. v. Bureau of Land Management, 140 IBLA 85 (IBLA 1997), in which the National Wildlife Federation presented evidence of the environmental impacts of grazing, the administrative law judge (ALJ) found that regardless of which route the agency chose to go, an adequate environmental review is required. Id. at 95-96. Because the agency wrongfully determined that the action would not significantly affect the quality of the human environment, the ALJ stated that the agency was prohibited from going forward with that action until an adequate EIS was prepared and considered. Id.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 67 be used to supplement previous Environmental Assessments or EISs, or to address site-specific environmental effects not previously considered in them.). In Center for Native Ecosystems, because new and significant information developed after the initial NEPA statements were completed, a new NEPA statement was required. Id; see also Wyoming Wilderness Assoc., 158 IBLA 155, 171-72 (2003) (New information showed that the agency did not take the required hard look, [a]ccordingly, these cases must be remanded to BLM for an expanded examination of the water quality impacts); Biodiversity Conservation Alliance, 171 IBLA 313, 321 (IBLA 2007) (The DNA cannot supplement what is not sufficient in NEPA documentation) (quoting Native Ecosystems, 170 IBLA at 332).

192.

The administrative cases upon which NRC Staff and the applicant rely either do not support their claim or are wrongly decided. In Louisiana Energy Services (Natl Enrichment Facility [New Mexico]), CLI-06-15, 63 N.R.C. 687, 707 n.91 (2006), the Commission affirmed two ASLB decisions in which intervenors raised challenges under NEPA. Both ASLB decisions involved the environmental impacts of near-surface disposal of depleted uranium. But all of the disposal sites under consideration were regulated by states or by the Department of Energy; none were regulated by the Commission. Id. at 691. Therefore, NRC Staff had no obligation to conduct a full-scale site-specific review, an inquiry in the purview of the responsible licensing agency. Id. at 690 (internal quotations omitted). After expressing its concern that the Board (and the underlying FEIS) may not have fully explored potential long-term effects from disposing of depleted uranium - whose radiological hazard gradually increases over time, the Commission affirmed the Board decisions as supplemented by our decision today. Id. at 689-

90. In a final footnote, the Board observed that [a]djudicatory findings on NEPA issues, including our own in this decision, become part of the environmental record of decision and in

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 68 effect supplement the FEIS. Id. at 707 and n.91. Here, however, no adjudicatory findings could cure the defect in NYS-37. NRC Staffs failure to conduct a balanced, site-specific analysis of the beneficial and adverse impacts of the no-action alternative cannot be remedied by adjudicatory findings.

193.

Moreover, in reviewing a subsequent petition for judicial review, the District of Columbia Circuit considered only whether the Boards supplementation of the FEIS by the hearing record violated the Atomic Energy Acts requirement (at 42 U.S.C. § 2243) that the EIS be prepared before the administrative hearing was completed. It did not determine whether the Commissions method of supplementing the EIS violated the Commissions NEPA regulations, a question the court itself made clear was not at issue in the case. See Nuclear Info. & Res. Serv. v.

NRC, 509 F.3d 562, n.1 (D.C. Cir. 2007) (Petitioners have not argued that the NRCs method of supplementing the EIS violated its regulations implementing NEPA. See 10 C.F.R. § 51.92.).10 194.

To the extent that Philadelphia Electric Co. (Limerick Generating Station, Units 1 and 2), ALAB-819, 22 N.R.C. 681, 705-07 (1985) and Louisiana Energy Services, L.P.

(Claiborne Enrichment Center [Louisiana]), CLI-98-3, 47 N.R.C. 77, 94 (1998) suggest that a 10 Moreover, the legal framework, procedural history, and petitioners legal claims distinguish Louisiana Energy Services (LES) from the present situation. NRCs review of LESs application to operate an uranium enrichment facility was controlled by a highly specific and specialized amendment to the Atomic Energy Act, 42. U.S.C. § 2243. That provision required NRC to hold a single adjudicatory hearing (id. at § 2243(b)(1)), declared that the issuing of such a license shall be considered a major Federal action under NEPA thereby necessitating the preparation of an environmental impact statement (id. at § 2243 (a)(1)), and directed NRC to prepare that environmental impact statement before the adjudicatory hearing (id. at § 2243(a)(2)). Indeed, this special provision of the AEA seems to anticipate only one EIS, only one hearing, and that Staffs work on the EIS would be complete before the hearing. Petitioners single NEPA challenge was limited to a claim that NRC did not adequately address the environmental consequences of disposing the waste generated by the facility. Nuclear Info., 509 F.3d at 566. In the LES proceeding, NRC staff released the draft EIS for public review in September 2004 and then issued the final EIS in July 2005well before both the NRCs principal rulings on petitioners contentions and the mandatory hearing in March 2006 on the remaining, uncontested issues. Id. at 568.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 69 licensing board may supplement an environmental impact statement with the hearing record, they are inconsistent with 10 C.F.R. § 51.102(c) and NEPAs goals.

195.

Section 51.102(c) provides that, in a contested proceeding, the record of decision is comprised of the initial decision of the presiding officer or the final decision of the Commissioners acting as a collegial body. However, neither the initial decision of the presiding officer nor the Commissioners final decision includes testimony or exhibits from the adjudicatory proceeding. Nor does 10 C.F.R. § 51.103(c), which provides that [t]he record of decision may incorporate by reference material contained in a final environmental impact statement, make any similar provision for the incorporation by reference of testimony or exhibits in an adjudicatory hearing.

196.

The situations in which courts have allowed board supplementation are distinguishable from this matter. In one case, NRC Staff was relying upon the opinion of another agency and the environmental report had been revised by the applicant.11 In another, the parties stipulated to add additional detail to the EIS, but not to change its conclusions.12 Neither of those circumstances is present here.

11 New England Coal. on Nuclear Pollution v. N.R.C., 582 F.2d 87, 93-94 (1st Cir. 1978) (NRC did not violate NEPA when it required the applicant to revise its environmental report to reflect a new location for a cooling water intake tunnel, but did not redo its own FEIS, because EPA had decided that the new location would have a smaller impact on the aquatic environment than the original location and NRC was entitled to rely on the EPA conclusion.). As the text of the decision makes clear, this holding was based on the earlierand subsequently eliminated version of § 51.52.

12 Citizens for Safe Power, Inc. v. N.R.C., 524 F.2d 1291, 1294, n.5 (D.C. Cir. 1975) (Where a stipulation entered into by the parties refined portions of an EIS, and those refinements were deemed to be included in the EIS and published in the Federal Register as part of the Boards decision, the court stated: Not questioning the importance of full disclosure and the necessity of real opportunity for public input under NEPA, we believe in the circumstances that there was no departure from either the letter or spirit of the Act.). This decision was decided during the tenure of the superseded version of § 51.52.

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 70 197.

Permitting deficiencies in the December 2010 FSEIS to be deemed supplemented by the hearing record or by Board [or Commission] order is fraught with problems. First, it would not be clear to the decision-makers or the public which part of the record as a whole was curing the NEPA deficiency. Second, the information that was deemed to supplement the FSEIS would not necessarily have been analyzed in a meaningful way, or at all, by NRC Staff. Third, the procedure would be inconsistent with the notice, comment, and response requirements in NRC and CEQ regulations. 10 C.F.R. § 51.92(f)(1); 40 C.F.R. § 1502.9(b). Fourth, all the pertinent environmental information would no longer appear in one document that contains the agencys analysis of that information. See Minn. Pub. Interest Research Group v. Butz, 541 F.2d 1292, 1300 (8th Cir. 1976) (The detailed statement serves to gather in one place a discussion of the relative impact of alternatives so that the reasons for the choice of alternatives are clear.). Indeed, CEQ regulations direct federal agencies to adopt procedures for introducing a supplement into its formal administrative record... 40 C.F.R. § 1502.9(c)(3). In sum, allowing the FSEIS to be deemed supplemented by the hearing record would undermine the very purpose of conducting an environmental analysis in an EIS that is circulated for public comment. 10 C.F.R. § 51.92(f)(1) (A supplement to a final environmental impact statement will be accompanied by or will include a request for comments...); see also 40 C.F.R. § 1500.1(b) (public scrutiny [is] essential to implementing NEPA.).

198.

This Board has implicitly recognized that remand to NRC Staff is the appropriate remedy when the Board concludes that the FSEIS is deficient. Entergy Nuclear Operations, Inc.

(Indian Point Nuclear Generating Units 2 and 3), 74 N.R.C. 11, at

• 27 (Jul. 14, 2011)

(ML111950712). In the same way, for NYS-37, the proper remedy is a remand to NRC Staff so that it can do a proper no action alternative analysis which considers the information provided by

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 71 the State and bases its analysis on accurate, IP-specific information. NRC Staff would either conduct the review itself or direct Entergy to perform a SAMA reanalysis to cure the MACCS2 input deficiencies identified by the State. NRC Staff would then evaluate the SAMA Reanalysis in a supplement to the FSEIS that is circulated for public comment. In finalizing the supplement to the FSEIS, NRC Staff must respond to public comments. Only then would the NEPA deficiencies identified in NYS-37 be cured.

199.

The State has proffered evidence that shows that the NRC Staffs environmental analysis in the FSEIS is inadequate, inaccurate, incomplete, and/or entirely missing. By contrast, NRC Staff and the applicant have presented evidence intended to convince the Board that the FSEIS complies with NEPA. Ultimately, the Board has only two options: It may rule that the December 2010 FSEIS satisfies NEPA, or it may conclude that it does not, and remand to Staff to correct the deficiencies.

VI.

PROPOSED ORDER 200.

For the foregoing reasons, the State of New Yorks Contention NYS-37 is resolved in favor of the State of New York. Accordingly, the Director of Nuclear Reactor Regulation is not authorized to issue renewed operating licenses for Indian Point nuclear power plants Unit 2 and Unit 3.

201.

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 fifteen (15) 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).

THE STATE OF NEW YORKS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW CONTENTION NYS-37 72 Respectfully submitted, Signed (electronically) by Signed (electronically) by Lisa Feiner Assistant Attorney General Office of the Attorney General for the State of New York 120 Broadway New York, New York 10271 (212) 416-8459 John J. Sipos Assistant Attorney General Office of the Attorney General for the State of New York The Capitol Albany, New York 12224 (518) 402-2251 Dated: March 22, 2013