ML13206A230

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Transcript of Teleconference with Firstenergy Nuclear Operation Company, Davis Besse Nuclear Power Station on July 24, 2013. Pp 1-60
ML13206A230
Person / Time
Site: Davis Besse Cleveland Electric icon.png
Issue date: 07/14/2013
From:
Atomic Safety and Licensing Board Panel
To:
SECY RAS
References
RAS 24850, 50-346-LA, ASLBP 13-928-02-LA-BD01
Download: ML13206A230 (61)


Text

Official Transcript of Proceedings NUCLEAR REGULATORY COMMISSION

Title:

FirstEnergy Nuclear Operating Company Davis Besse Nuclear Power Station Docket Number:

50-346-LA ASLBP Number:

13-928-02-LA-BD01 Location:

teleconference Date:

Wednesday, July 24, 2013 Work Order No.:

NRC-063 Pages 1-60 NEAL R. GROSS AND CO., INC.

Court Reporters and Transcribers 1323 Rhode Island Avenue, N.W.

Washington, D.C. 20005 (202) 234-4433

1 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 UNITED STATES OF AMERICA 1

NUCLEAR REGULATORY COMMISSION 2

+ + + + +

3 ATOMIC SAFETY AND LICENSING BOARD PANEL 4

+ + + + +

5 HEARING 6


x 7

In the Matter of: :

8 FIRSTENERGY NUCLEAR : Docket No. 50-346-LA 9

OPERATING COMPANY : ASLBP No. 13-928-02-LA-BD01 10 (Davis-Besse Nuclear :

11 Power Station, Unit 1):

12


x 13 Wednesday, July 24, 2013 14 15 Teleconference 16 17 BEFORE:

18 PAUL S. RYERSON, Chairman 19 DR. MICHAEL F. KENNEDY, Administrative Judge 20 NICHOLAS G. TRIKOUROS, Administrative Judge 21 22 23 24 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 APPEARANCES:

1 On Behalf of FirstEnergy Service Company:

2 David W. Jenkins, Esq.

3 of:

FirstEnergy Service Company 4

Mail Stop A-GO-15 5

76 South Main Street 6

Akron, OH 44308 7

(330) 384-5037 8

9 Kathryn Sutton, Esq.

10 Stephen Burdick, Esq.

11 Timothy Matthews, Esq.

12 of:

Morgan, Lewis & Bockius 13 1111 Pennsylvania Avenue NW 14 Washington, D.C. 20004 15 (202) 739-3000 16 17 18 19 20 21 22 23 24 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 On Behalf of the Nuclear Regulatory Commission:

1 Edward L. Williamson, Esq.

2 Mary Spencer, Esq.

3 Mitzi Young, Esq.

4 Lloyd Subin, Esq.

5 Jeremy Wachutka, Esq.

6 John Tibbetts, Paralegal 7

of:

U.S. Nuclear Regulatory Commission 8

Office of the General Counsel 9

Mail Stop O-15D21 10 Washington, DC 20555-0001 11 301-415-4126 12 13 On Behalf of Citizens Environmental Alliance, 14 Green Party of Ohio, and Don't Waste Michigan:

15 Terry J. Lodge, Esq.

16 Michael J. Keegan, Esq 17 316 N. Michigan Street, Suite 520 18 Toledo, OH 43604-5627 19 419-255-7552 20 21 22 23 24 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 P R O C E E D I N G S 1

1:34 p.m.

2 JUDGE RYERSON: Okay. Let's go on the 3

record now. Welcome everyone. This is Judge Ryerson.

4 We're here on the matter of FirstEnergy Nuclear 5

Operating Company, Davis-Besse Nuclear Power Station, 6

Unit 1, and with me are the other members of this 7

particular board, Judge Kennedy and Judge Trikouros.

8 It will quickly become apparent that they 9

are the technically trained judges on the Board, and 10 that I am the legally trained judge.

11 We have a reporter online, so please try 12 to remember to identify yourselves before you speak, 13 and I also want to emphasize that we have made this 14 telephone call available in a non-speaking mode to 15 members of the public, and it's my understanding that 16 several people and possibly the media have taken 17 advantage of that.

18 So we will be, we will be heard by those 19 folks, and also a transcript will be available of this 20 argument within a few days. That said, let's take the 21 formal appearances. Who do we have for FirstEnergy?

22 MR. MATTHEWS: Good afternoon, Judge 23 Ryerson. This is Tim Matthews of Morgan, Lewis and 24 Bockius on behalf of FirstEnergy.

25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 JUDGE RYERSON: Okay, thank you, and for 1

the Petitioners, there are four Petitioners and all 2

represented by the same counsel; is that correct?

3 MR. LODGE: That is correct, Judge 4

Ryerson. Greetings to the Licensing Board. My name 5

is Terry Lodge, representing all the Petitioners.

6 I would like to indicate to the Board that 7

I, I'm not anticipating that this will be necessary, 8

but one of the people listening in on the non-speaking 9

lines is Arnie Gundersen, our expert, and there may, 10 from time to time, be some need for me to consult with 11 him. Thank you.

12 JUDGE RYERSON: Okay, thank you. And 13 finally for the NRC staff, who do we have today?

14 MS. YOUNG: Good afternoon, Judge Ryerson.

15 This is Mitzi Young. I'm with my co-counsel, Jeremy 16 Wachutka. Also listening in on the line are members 17 of the technical staff, Eva Brown, Jeremy Bowen, 18 Emmett Murphy, Gloria Kulesa and Ravi Grover.

19 JUDGE RYERSON: Okay, thank you Ms. Young, 20 and welcome to everyone again.

21 MR. MATTHEWS: Judge Ryerson?

22 JUDGE RYERSON: Yes.

23 MR. MATTHEWS: Judge Ryerson, this is Tim 24 Matthews again for FirstEnergy.

25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 JUDGE RYERSON: Yes.

1 MR. MATTHEWS: I wanted to further 2

clarify. With me here at counsel table are my 3

colleague, Stephen Burdick, also of Morgan Lewis, and 4

David Jenkins, senior counsel too of FirstEnergy.

5 Also with us are members of the 6

FirstEnergy

project, Engineering and Licensing 7

Regulatory Affairs organization, principally among 8

them Henry Hegrat of the Licensing Regulatory Affairs 9

organization, and David Petro, the senior project 10 manager.

11 JUDGE RYERSON: Okay. Thank you Mr.

12 Matthews, and welcome to all of you. The purpose of 13 this call, the principal purpose anyway is set forth 14 in the Order that the Board issued on July 1.

15 Petitioners in this case have asked for a hearing on 16 a proposed license amendment that addresses four 17 technical specifications concerning a steam generator 18 at the Davis-Besse facility.

19 The Board has some questions concerning 20 the parties' standing and concerning the admissibility 21 of the one contention that the Petitioners have 22 proffered. We don't really need any formal 23 presentations by the parties. We've read all your 24 filings a number of times and we've talked about them 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 amongst ourselves.

1 So the format I would like to use today is 2

to have individual members of the Board ask questions.

3 Usually, I think they will be directed to specific 4

parties. But we certainly want to give an opportunity 5

for other parties to respond if they wish to to the 6

same question.

7 Don't feel obliged to do that, because 8

sometimes the question will be really very specific to 9

a particular party. But we will try to remember to 10 invite comments from the other parties on any 11 question, and if we fail to do that, don't be shy.

12 Just speak up and ask for the opportunity to do that.

13 I would like to begin with just a few 14 questions of my own, and the first one is for Mr.

15 Lodge. Isn't the Petitioners sole contention here a 16 challenge to FirstEnergy's analysis under 10 C.F.R. 17 50.59?

18 MR. LODGE: No sir. It is a request that 19 the scope of the license amendment proceeding be 20 broadened to include all of the facts. We believe 21 that what has occurred here is that a very select 22 number of relatively narrow areas have been proffered 23 as being the license amendment, but in fact the actual 24 equipment to be replaced, the newly-installed steam 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 generators, differ in very significant respects, 1

engineered respects from the original steam generator 2

design.

3 JUDGE RYERSON: Well, your contention as 4

drafted references one section of 10 C.F.R., I 5

believe, and I believe it references 10 C.F.R. 50.59 6

twice, and doesn't reference anything else. Am I 7

correct about that?

8 MR.

LODGE: I would accept your 9

characterization of the numbers of times we may have 10 mentioned it in the petition, sure.

11 JUDGE RYERSON: Okay, and that's the 12 contention you put forward in front of us; correct?

13 MR. LODGE: Right.

14 JUDGE RYERSON: And your reply brief at 15 page 17, you say "Petitioners question the adequacy of 16 the 10 C.F.R. 50.59 analysis"; correct?

17 MR. LODGE: Yes.

18 JUDGE RYERSON: So I mean isn't the thrust 19 of your contention under 50.59?

20 MR. LODGE: Yes, and it is that the 21 analysis is incomplete.

22 JUDGE RYERSON: Okay. So your contention 23 is, in effect, that the 50.59 analysis is incomplete?

24 MR. LODGE: Correct.

25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 JUDGE RYERSON: Okay. Still, that is, I 1

think, a challenge to the 50.59 analysis. You say 2

it's incomplete, and hasn't the Commission said that 3

your only remedy, then, is a petition under 10 C.F.R. 4 2.206, which is sent to a director of a division, and 5

not a hearing, not an adjudicatory hearing before the 6

Board such as this.

7 In other words, where do we get our 8

jurisdiction, in light of what the Commission has said 9

about that?

10 MR. LODGE: Well, 2.206 is, of course the 11 Board knows, is an enforcement petition. We're 12 looking for a determination of the scope of this 13 proceeding, which we believe that this Licensing Board 14 has the power to determine.

15 The problem is not exactly non-compliance 16 requiring enforcement; the problem is that the license 17 amendment request is incomplete.

18 JUDGE TRIKOUROS: Mr. Lodge, this is --

19 this is Judge Trikouros.

20 MR. LODGE: Yes.

21 JUDGE TRIKOUROS: Are you making a 22 connection between the 50.59 analysis and the license 23 amendment? Is that the thrust of your position, that 24 those two are connected in some manner?

25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. LODGE: Yes. The connection, if you 1

will, is that there's very little connection, that the 2

tech specs, the proposed technical specification 3

changes, sort of take you into and out of the steam 4

generators.

5 But they don't discuss or analyze, within 6

the license amendment, the major differences, critical 7

materials differences and engineer differences between 8

the original steam generators and the ones that are 9

proposed to be installed.

10 JUDGE TRIKOUROS: Well, let me ask you.

11 Why didn't you make that argument in your petition?

12 MR. LODGE: I believe we did.

13 JUDGE TRIKOUROS: I don't recall 14 specifically that you made that argument, that the 15 license amendment itself was incomplete or improper in 16 some manner.

17 MR. LODGE: Well, we made the argument 18 that it is, that the steam generators that are planned 19 to be used are experimental, because there has been no 20 disclosure nor apparent independent scrutiny completed 21 yet by the NRC staff of the engineered differences.

22 JUDGE TRIKOUROS: Well, I wonder if 23 somewhere along the line here you'd give us a cite to 24 where in your petition you specifically reference the 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 license amendment request, and make a determination as 1

to it being incomplete or improperly done?

2 MR. LODGE: Sure. May I have a few 3

seconds here to see if I can find such a passage?

4 JUDGE TRIKOUROS: Yeah.

5 (Pause.)

6 JUDGE RYERSON: Mr. Lodge, this is Judge 7

Ryerson again. I wonder, it might perhaps be more 8

efficient to allow a little time at the end, if 9

there's something that you need to look up it's going 10 to take a while, or we can receive something.

11 (Simultaneous speaking.)

12 MR. LODGE: That would be fine.

13 JUDGE RYERSON: Pardon?

14 MR. LODGE: That would be fine.

15 JUDGE RYERSON: Okay, because in some ways 16 I think this relates to my next question, which is 17 again also for you, Mr. Lodge, and again, I think if 18 other parties feel they wish to jump in at this point 19 to respond to my first question, you may. But you 20 know, I don't, I thought it was primarily addressed to 21 Mr. Lodge, as is this one, and that's this.

22 The petition in this case, or that is the 23 Notice of Opportunity for Hearing in this case, to 24 which you purport to respond, addresses four proposed 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 changes in technical specifications, and does your 1

petition really address those four changes at all?

2 You know, it seems your argument jumps 3

right into 50.59, which is the section you quote in 4

the contention. So how do you establish the 5

requirements for admissibility of a contention under 6

10 C.F.R. 2.309(f)(1), if you haven't spoken at all 7

about the actual specifications that gave rise to the 8

Notice of Opportunity for Hearing.

9 In particular, how do you demonstrate a 10 genuine dispute with the application, which is one of 11 the key requirements, when you haven't really 12 addressed that application at all?

13 MR. LODGE: Well first of all, it's our 14 understanding, upon a reading of the San Onofre 15 Licensing Board decision, that indeed, the only 16 opportunity is to raise concerns about the licensing 17 amendment, which we take to include concerns of scope 18 or experimental nature, within our Petition to 19 Intervene. So we've done that.

20 Secondly, I think that it is at least very 21 clearly implicit in the ground that we did raise, that 22 we're talking about an area of change, of physical 23 change that goes beyond, perhaps is connected to the 24 tech specs in some respect. But certainly it goes 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 beyond the scope of the tech specs themselves.

1 JUDGE RYERSON: Yeah. But I guess the 2

question I have is doesn't that then back you into, 3

as you state in your contention, a challenge to the 4

50.59 analysis?

5 I

mean in other

words, I

suppose 6

hypothetically, a Petitioner in your shoes could have 7

addressed the four technical specifications that are 8

being proposed to be changed, and attempted to explain 9

how those four specifications are related in some 10 fashion to the larger question of the replacement of 11 the steam generator.

12 But as I read your petition, you don't 13 seem to attempt to do that. You are responding, or 14 purporting to respond, to a Notice of Opportunity for 15 Hearing on four technical specification changes. As 16 far as I can see, you don't say anything about them.

17 I mean isn't that a problem under the standards for 18 contention admissibility?

19 MR. LODGE: We don't believe it is a 20 problem, as I said, based upon the San Onofre 21 Licensing Board's reasoning, which was this is your 22 one opportunity to raise whatever grounds you believe 23 to be appropriate for an intervention.

24 But moreover, what we did do was delineate 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 the significant differences between the two 1

generations, if you will, of steam generators, and I 2

believe that that certainly establishes some sort of 3

issue of fact. We haven't seen much of a 50.59 4

analysis even of tech spec changes.

5 JUDGE RYERSON: Right.

6 MR. LODGE: A big problem here is the 7

comparative obscurity for proprietary nature of the 8

information related to the license amendment request, 9

and --

10 JUDGE RYERSON: I think that point is very 11 well taken, and some of my technical colleagues may 12 have some practical questions for you about the impact 13 of that.

14 But while we're on the subject of the San 15 Onofre decision, that, if I recall the facts, was a 16 very unusual case, in that the Commission received a 17 petition, part of which it sent to a Licensing Board, 18 to determine whether the, what is it called, a CAL, 19 Confirmatory Action Letter that the staff issued, was 20 a de facto license amendment that required a hearing.

21 But to the extent that that petition was 22 a challenge to a 50.59 analysis, it said it. The 23 Commission sent it to the appropriate office director 24 as a petition under 2.206.

25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 The Licensing Board itself, if I recall 1

the decision, went out of its way in analyzing the 2

question that the Commission had specifically asked it 3

to answer, went out of its way to clarify that the 4

Board was using the standards of 50.59 as guideposts 5

for that decision, but was not applying those 6

standards directly, and indeed went out of its way to 7

say that that would be prohibited. Am I misrecalling 8

that case?

9 MR.

LODGE: I agree with your 10 clarification or your interpretation. But again, 11 we're not, we're not seeking enforcement.

12 We're seeking for essentially a

13 declaratory judgment type of finding from this Board, 14 the effect of which is to find that the license 15 amendment information provided by the applicant is not 16 sufficient for a determination of whether or not the 17 steam generator replacement project should be allowed 18 to go forward at this point.

19 JUDGE RYERSON: And where do we get 20 jurisdiction to decide that issue?

21 MR.

LODGE: I don't mean to be 22 impertinent. I think that it is present in 50.59. We 23 provided -- at pages 14 and 15, we provided, of 24 course, and our expert's report, more detail. But we 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 provide detail both the differences between the steam 1

generators across the two generations, and there are 2

many problems, because there's no analysis, no 3

discussion whatsoever that is, that addresses that 4

from the applicant.

5 JUDGE RYERSON: Okay. I think I 6

understand your argument. Let me turn, if I may; 7

again, if anyone else wants to contribute to this 8

immediate question, you're welcome to. But I'm happy 9

to move on to another question. This one's for the 10 NRC staff, and Ms. Young, will you be addressing this, 11 or one of your colleagues?

12 MS. YOUNG: My colleague.

13 JUDGE RYERSON: Okay. Well, this is then 14 for your colleague. If the 50-mile proximity 15 presumption does not apply in this case, which I think 16 was the staff's position, I assume the staff then 17 believes that standing could be established in other 18 ways.

19 In other words, it is presumably not the 20 practice of the Commission to issue a Notice of 21 Opportunity for Hearing, that no one would have 22 standing to respond to. That probably is not normally 23 the case.

24 So in the staff's view, could you tell me 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 what a proper petitioner would look like, and what 1

kind of showing would they have to make to have 2

standing to challenge these four proposed technical 3

specifications, separate and apart from the 4

replacement of the steam generator?

5 MR. WACHUTKA: Yes, Your Honor. This is 6

Jeremy Wachutka from the NRC staff. You are correct 7

in saying that the proximity presumption does not 8

apply to license amendment requests, and therefore --

9 JUDGE RYERSON: I didn't say it didn't 10 apply. I said your position is it does not apply.

11 MR. WACHUTKA: Yes, Your Honor, that's our 12 position, based on case law and that the standard 13 would be is that the petitioner would have to show 14 that there is an obvious, there's either an obvious 15 chance for offsite release.

16 Or else they have to meet the 17 contemporaneous standing requirements, which involve 18 showing that there's an injury in fact, that there's 19 traceability, that there's redressability, and that 20 the injury in fact that they assert does fall within 21 the purview of the Atomic Energy Act, Your Honor.

22 JUDGE RYERSON: Yeah. No, that sounds 23 very familiar. That's the boilerplate description of 24 what they must show. I'm just trying to figure out, 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 you know, who could possibly do that? How would they 1

do it? Can you give me a specific example of how 2

anybody would have standing to challenge four proposed 3

changes in the technical standards, without the 4

benefit of a proximity presumption?

5 What would their petition look like? Who 6

would the be?

7 MR. WACHUTKA: Yes, Your Honor. In this 8

case, the Joint Petitioners do have an expert, and 9

they had that expert analyze the differences between 10 the old steam generators and the proposed new steam 11 generators, and what they had to have done was to then 12 show how these differences would cause an actual 13 radiological offsite release. The problem is, is that 14 they did not show this, so there was no traceability.

15 JUDGE TRIKOUROS: Yeah. This is Judge 16 Trikouros, and you're referring to Mr. Gundersen, 17 regarding what you call an analysis of the differences 18 between the steam generators.

19 To my recollection, Mr. Gundersen found 20 that by reviewing a presentation that was made by the 21 applicant to the staff, and in fact Mr. Gundersen was 22 complaining, if you will, in his document, that he had 23 no information regarding the replacement steam 24 generators; isn't that correct?

25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. WACHUTKA: That's correct, Your Honor.

1 But it's the staff's position that the 10 C.F.R. 2.206 2

process is the valid process by which all these 3

complaints that the Joint Petitioners have can be 4

given a hard look by the staff.

5 JUDGE TRIKOUROS: Well, perhaps you could 6

explain to me how that would work in this particular 7

case?

8 MR. WACHUTKA: Your Honor, what we would 9

recommend is that this petition be referred to the 10 10 C.F.R. 2.206 process, and then that would involve the 11 Joint Petitioners' expert not only explaining the 12 differences between the new and old steam generators, 13 but also explaining why they think that the tech spec 14 changes will make it so that these new steam 15 generators will not be operated safely.

16 JUDGE RYERSON: If I could just interrupt 17 for one second, Judge Trikouros. This is Judge 18 Ryerson again. This may be my last question, but you 19 spoke about referring the petition in front of us to 20 a director under 2.206. So maybe this question goes 21 finally to the applicant.

22 I believe it's the applicant's position, 23 in addition to other things, that a challenge under 24 50.59 is premature at this point, because the 25

20 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 applicant, this FirstEnergy is still conducting a 1

50.59 analysis.

2 So if Mr. Matthews, would you favoring 3

referring this to a director under 2.206 at this 4

point, or should we, in your view, simply dismiss?

5 MR. MATTHEWS: Thank you, Judge Ryerson.

6 This is Tim Matthews on behalf of FENOC. As you 7

stated, we believe that at this point there is nothing 8

to refer under 2.206. But I would like the 9

opportunity to address the Board's question as it 10 relates to standing, if that would be appropriate.

11 JUDGE RYERSON: That's fine, thank you.

12 MR. MATTHEWS: With respect to proximity 13 standing, the Commission's jurisprudence describes 14 proximity standing not as an exception to the judicial 15 concepts of standing, but as a shorthand, a thumb 16 rule, where there's obvious potential for offsite 17 consequences.

18 It believes, it's essentially a reduction 19 in the burden of showing, not a production, making the 20 argument. But it doesn't mean that the Petitioner 21 needn't have some injury in fact. It's the Commission 22 acknowledging that there is an injury in fact, where 23 there is obvious potential for offsite consequences.

24 So the concepts continue to apply.

25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 Obviously in these limited tech spec proposed changes, 1

that potential does not exist. But it is possible 2

that a petitioner could demonstrate standing under the 3

contemporaneous judicial concepts of standing, by 4

arguing some injury in fact.

5 It would not be difficult, I think, in the 6

postulate to one of your earlier questions, Judge 7

Ryerson, I think a petitioner could take on one of the 8

technical specifications and say that the conclusions 9

are wrong for the following three reasons.

10 We have done our own analyses, for 11 example, with respect to the change in the volumetric 12 curve, and say that we believe for the following 13 reasons and with the expert analyses and showing their 14 calculations that they believe they're wrong, and 15 therefore there is the potential for offsite 16 consequences because of the accident that those curves 17 are intended to protect against.

18 So it is not some hypothetical that's 19 impossible for anyone to articulate. It's fairly easy 20 on the fly here. The Petitioner just chose not to do 21 it, for whatever reason, and --

22 JUDGE RYERSON: Yeah, okay. Thank you, 23 Mr. Matthews.

24 MR. MATTHEWS: So getting back to the 25

22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 2.206 question, as the Commission did in CLI-1220, the 1

San Onofre decision the Petitioners don't cite, the 2

Board or the Commission did exactly as you said, 3

referred the opportunity for a hearing question not as 4

an opportunity for a hearing at all, but interpreted 5

as compliance with, I'm sorry, 10 C.F.R. 50.59.

6 Here, there is not really an opportunity 7

for the staff or anyone else to evaluate FENOC's 8

compliance with 50.59, as to the steam generator 9

replacement, because those evaluations are still 10 ongoing. So there's nothing to evaluate at this 11 point.

12 That question is far afield from the 13 Federal Register notice that brings us here today, 14 that is specific to the four technical specification 15 changes. Thank you.

16 JUDGE RYERSON: And I take it, I mean if 17 the 50.59 analysis is ongoing, there is at least a 18 theoretical possibility that FirstEnergy could 19 conclude that a license amendment was required for 20 some other reason, other than the tech specification 21 changes, although you don't anticipate that. Is that 22 your position, as I recall?

23 MR. MATTHEWS: That is our position --

24 this is Tim Matthews for FirstEnergy. That is 25

23 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 correct, Judge Ryerson. That is our petition. We do 1

not anticipate that the screening or evaluation would 2

result in a need for an amendment. But until those 3

analyses are done, FirstEnergy has not reached that 4

conclusion, and it certainly understands the 5

seriousness with which it needs to conduct those 6

evaluations.

7 JUDGE RYERSON: Okay, thank you.

8 JUDGE KENNEDY: Mr. Matthews, this is 9

Judge Kennedy. Just a follow-up to a statement that 10 you had made about challenging the specific technical 11 specifications in this Notice of Hearing.

12 What would you envision would be the 13 information that the Petitioner would rely on, to 14 challenge any one of these specific technical 15 specifications?

16 MR. MATTHEWS: This is Tim Matthews on 17 behalf of FirstEnergy. Thank you, Judge Kennedy. I 18 have not gone out to try to analyze or try to 19 challenge First Energy's proposed technical 20 specification changes.

21 But I expect that with respect to the tech 22 spec traveler that addressed the technical 23 specifications or the revised tech spec changes, for 24 example, the reporting to the NRC or inspection 25

24 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 frequency, that there are publicly available documents 1

in ADAMS that Petitioners could review.

2 But I think the expectation if Petitioners 3

intend to add something to the proceeding, that they 4

would bring their own analyses to it. Rather than 5

simply criticize what the applicant has done or the 6

quality of the staff's review, they would bring their 7

own information to the table.

8 So I don't have the short answer to your 9

question as to any particular tech spec what 10 information is available that might challenge it, 11 because we believe that the tech spec themselves are 12 more than adequately supported.

13 JUDGE KENNEDY: I understand, Mr.

14 Matthews. This is Judge Kennedy again. I guess I was 15 trying to look at it more generically, and focusing in 16 on the content of the license amendment request, and 17 trying to see what you believed information was 18 available within that license amendment request, that 19 could support a specific challenge, that would lead to 20 causation of harm to a member of the public.

21 I think that's really, it was more of a 22 generic question, not one specific, that says here's 23 how we pieced the puzzle together, but where would I 24 start? We know the four technical specification 25

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 changes, but what's lacking is how you would raise a 1

challenge that could either lead to standing, or to an 2

admissible contention, and what information is 3

available to the Petitioner at this stage.

4 MR. MATTHEWS: This is Tim Matthews on 5

behalf of FirstEnergy. Thank you, Judge Kennedy.

6 First of all, I don't agree with Petitioners' 7

assertion that the Commission imposes some incredibly 8

high evidentiary burden, in order to establish a 9

contention.

10 There is some showing required. I agree 11 with that, and we have argued it and continue to argue 12 it. But it is not some super-high standard. I'm 13 challenged to address your question generically, as it 14 relates to specific Davis-Besse steam generator 15 technical specification changes.

16 The January 18th submittal includes a 17 fairly detailed description in Section 2.0 of the 18 proposed changes, a technical evaluation of them, and 19 a no significant hazards consideration.

20 I think there is sufficient information on 21 there, in there, such that a knowledgeable petitioner, 22 someone who actually had some information to bring to 23 the table, some independent knowledge, this together 24 with information available, for example, in the public 25

26 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 document room or available through experience at other 1

projects, could bring challenges to them.

2 That's not necessarily they wouldn't be 3

able to present the evidence to prevail at a hearing 4

at the end of the day, after an evidentiary hearing.

5 But I think they could present sufficient evidence to 6

present an admissible contention.

7 JUDGE KENNEDY: Mr. Matthews, this is 8

Judge Kennedy again. Just for argument's sake, and I 9

don't know if you've looked; I certainly haven't 10 looked, and I certainly don't know if the Petitioners 11 have looked.

12 But it sounds like you're telling us there 13 could be sufficient information within the public 14 domain that would allow them to understand what this 15 steam generator replacement project looks like.

16 They have noted the PowerPoint 17 presentation, but have indicated they found little 18 more than that. Is it your sense that there's more 19 information about there and they just didn't look hard 20 enough?

21 MR. MATTHEWS: This is Tim Matthews on 22 behalf of First Energy. Thank you, Judge Kennedy. I 23 point out that this discussion, it's somewhat 24 academic, because the challenge the Petitioners have 25

27 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 don't address any of the tech spec, don't even attempt 1

to address the tech spec changes.

2 In fact, they argue that we should be 3

changing the tech specs and don't recognize that in 4

fact we have proposed changes to the tech specs. But 5

as to your specific point, the industry has been 6

changing steam generators for over a decade.

7 The OE that -- under 50.59, the OE, and 8

because of that there are inspection reports. You 9

know, the staff, every time there's a steam generator 10 change, including the announced inspection of Davis-11 Besse, every time there's a steam generator change 12 under 50.59, the staff performs an inspection, and 13 there's an inspection report of that 50.59 analysis.

14 That doesn't mean that Intervenors have or 15 potential petitioners have the 50.59 analysis itself, 16 or have the underlying calculations or reference 17 documents. But they do have a toehold, and I do 18 believe that in a decade, more than a decade of 19 generators being changed under this process, that 20 there is information available.

21 As to the once-through steam generators, 22 Davis-Besse is certainly not the first. The OE that, 23 the operator experience that Petitioners point to, as 24 Judge Trikouros noted, that FirstEnergy described to 25

28 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 the staff in that PowerPoint presentation, those were 1

all there.

2 There's information about those other 3

steam generator replacements, the very similar type 4

steam generators that, you know, for the design that 5

Davis-Besse is using to replace. So I don't accept 6

that there is no information out there. I have not 7

done the search to prove what information may or may 8

not be available.

9 But frankly, that's not FirstEnergy's 10 burden, and I don't see that Intervenors have even 11 tried or Petitioners have even tried in this case.

12 MR. LODGE: This is Terry Lodge. I would 13 like to respond to some of these things at some point, 14 and if now is acceptable, I'd like to proceed.

15 JUDGE RYERSON: Yes. This would be a good 16 time, Mr. Lodge.

17 MR. LODGE: Thank you very much. First of 18 all, I'd like to note that the FSAR is being charged.

19 The FSAR, the final safety analysis report is updated.

20 It's being changed, and it set the bounding 21 characteristics for steam generators. The one-tube 22 failure mode is certainly that.

23 Secondly, we're just learning today that 24 FirstEnergy hasn't even completed its 50.59 analysis.

25

29 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 Therefore, this entire proceeding is premature. I 1

think I believe that this matter should be tabled 2

awaiting some final analysis. We are also aware, of 3

course, that the staff has not completed its 50.59 4

analysis.

5 The problem is is that we're looking at a 6

scenario where FirstEnergy gets to select the agenda.

7 FirstEnergy determines what the scope of their license 8

amendment request will be, based upon information that 9

is not available to the public.

10 I'm a little surprised that FirstEnergy 11 can't conclusively describe to this panel the paucity 12 of information that's available. We have produced an 13 expert's report that indicates that he could find 14 virtually nothing, and is relying upon a slide show 15 and very little other information that is in the ADAMS 16 inventory.

17 There's no longer a public documents room 18 per se. We have conducted a bona fide search, 19 produced an extensive report from one of the best-20 recognized experts on nuclear engineering in the 21 world, and I'd further like to point out that perhaps 22 we have a decade of steam generator replacement 23 experience to review, and our review, as expressed in 24 Mr. Gundersen's report, is that the last three 25

30 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 generator replacement projects have been fiascos, if 1

not economic disasters.

2 What we have attempted to do here is bring 3

to the attention of the NRC a serious enforcement gap, 4

a series of problems that have contributed to industry 5

failures, closures of operating reactors forever, and 6

it's absurd that we're arguing over whether or not 7

there's zero possibility, based on tech spec changes, 8

of any accident; therefore, there's no standing.

9 This is, the Calvert Cliffs decision is 10 one wherein the Commission held that you cannot argue 11 that there's no possible negative consequences; 12 therefore, no one could possibly have standing. We 13 are bringing information in advance of regulatory 14 errors and gaps and fiascos.

15 I'm hopeful that the Licensing Board will 16 understand things in that spirit. The significance of 17 the essentially the concealment, if you will, of the 18 application information is very serious, because if 19 the public is going to be the only regulator, we don't 20 have access to information to bring to the attention 21 of the NRC the precise problems with the steam 22 generators. Thank you.

23 JUDGE RYERSON: Thank you, Mr. Lodge.

24 MR. WACHUTKA: Your Honor, this is the NRC 25

31 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 staff, Jeremy Wachutka. We would like to note that if 1

it is the Joint Petitioners' aim to bring this issue 2

to our attention, bringing a petition under 10 C.F.R. 3 2.206 would completely accomplish that goal, and we 4

would take a hard look at this process.

5 MR. MATTHEWS: This is Tim Matthews on 6

behalf of First Energy. Judge Ryerson, if I might.

7 JUDGE RYERSON: Yes.

8 MR. MATTHEWS: I think my colleague at the 9

bar may have misspoken, because our brief notes that 10 the 50.59s for the steam generator replacements have 11 not yet been completed. But regardless, the 12 suggestion that a contention be held in abeyance is 13 completely contrary to Commission precedent, and would 14 not be appropriate.

15 The idea that FirstEnergy is somewhat 16 setting the agenda about what the public does or 17 doesn't have access to challenge is completely crazy.

18 The Commission decided exactly that when it issued 19 50.59 and when it reevaluated 50.59 in 1999, while 20 steam generator replacements were already being 21 conducted.

22 The Commission has decided that licensees 23 can replace or can make changes, including to major 24 RCS reactor coolant system components, provided they 25

32 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 meet those criteria specifically described in 50.59.

1 So the Commission has decided that.

2 As Judge Ryerson, you noted in the 3

beginning, Petitioners' beef seems to be with 50.59.

4 It's unclear to us whether their intention is really 5

a facial challenge to 50.59.

6 That's inappropriate for the Board, but 7

would it be appropriate for petition to rulemaking, or 8

if they're challenging FirstEnergy's implementation of 9

50.59, which is not yet complete and therefore would 10 be inappropriate for a 2.206 petition at this point, 11 a referral.

12 But I point out that Intervenors have the 13 possibility, the ability on their own. They have 14 experienced counsel, national anti-nuclear groups, a 15 purported expert in NRC regulation. They know how to 16 file a petition for rulemaking. They know how to file 17 a petition for 2.206.

18 They've just decided not to do it.

19 There's no concealment here. FirstEnergy decided to 20 replace the steam generators. It decided on a design 21 that would fit within the existing safety analysis of 22 the plant, not to go out and reanalyze the safety of 23 the plant, at a cost of who knows what cost to go out 24 and reanalyze an entire plant.

25

33 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 So it's not surprising that the generator 1

that fits the design analysis is likely to fit the 2

50.59 screening criteria, and therefore, as an 3

ancillary consideration, doesn't become subject to a 4

license amendment.

5 But there's no concealment here, and it's 6

completely inappropriate to be suggesting that 7

FirstEnergy is hiding anything or disenfranchising 8

anyone.

9 JUDGE RYERSON: Okay. Thank you, Mr.

10 Matthews. I think we understand your position on 11 that. I will agree. You are correct that your briefs 12 did state your position, and that's the basis on which 13 I think I summarized it a few minutes ago, that the 14 50.59 analysis is ongoing, and I'm sure Mr. Lodge's 15 statement to the contrary was not intentional.

16 Let's see if we have some more specific 17 questions from the technical judges.

18 JUDGE KENNEDY: This is Judge Kennedy, and 19 I think -- let me try to work my way through this 20 question. This is, it sort of speaks to both the 21 50.59 process and the technical, the tech spec changes 22 that are at issue here.

23 I'm going to refer to page 11 of the 24 petition, just to ground us in some phrases. But it 25

34 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 states on page 11 of the petition that 50.59 states 1

that a licensee need not request a license amendment 2

pursuant to 50.90, if a change to the technical 3

specifications incorporated in the license is not 4

required.

5 Now I guess I'd like to start with the 6

applicant, and maybe that's Mr. Matthews. Could you 7

help us by providing the basis behind why a technical 8

specification change is not required when analyzing 9

the overall steam generator replacement activities?

10 I mean I recognize there are technical 11 specification changes being requested here, but it 12 appears to me that we have a set of modification 13 activities that are being conducted under 50.59, and 14 FirstEnergy has called out some technical 15 specification changes would be required to implement 16 that modification.

17 So it would appear to me that, and I guess 18 that's what I'm asking for, is confirmation that what 19 has happened is the modification activity has been 20 separated from the implementation activity, and if 21 that is true, what is the basis for that approach?

22 MR. MATTHEWS: Thank you, Judge Kennedy.

23 This is Tim Matthews on behalf of FirstEnergy. The 24 meeting slides that Petitioners refer to and provide 25

35 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 the ADAMS citation for from March 20th, 2013, 1

describes the steam generator replacement project 2

generally, and in it includes, at page 30, three-zero, 3

a list of design changes to the facility, that are 4

broken into engineering change packages, which is 5

typical in the industry, that those engineering change 6

packages address discrete evolutions or changes.

7 Each of those -- I'm sorry. Each of those 8

engineering change packages has a 50.59 evaluation or 9

review, a screening for 50.59, associated with it.

10 But with respect to the steam generator changes that 11 Petitioners cite or Mr.

Gundersen cites in 12 Petitioners' repeat, those changes to the steam 13 generators, and they are incremental changes to the 14 steam generator. This is not a wholesale light piece 15 of paper, redesign of a steam generator.

16 These are once-through steam generators 17 that fit the same design functions as the existing 18 Davis-Besse steam generators. It is a design being 19 provided, being manufactured by B&W Canada, and there 20 are incremental changes to the current Davis-Besse 21 steam generators, such as improvements in materials to 22 go to less corrosion-resistant or more corrosion-23 resistant materials, such as alloy 690, to go with a 24 stronger shell material, to provide more tubes to 25

36 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 address spacing in the support plates between the 1

tubes.

2 So incremental changes, not some radical 3

new design of a steam generator. But all of those 4

changes are considered, each of those changes are 5

considered individually, and they are considered 6

cumulatively as is required under 50.59, in the 7

analysis associated -- or they will be associated with 8

engineering change package, the first one listed.

9 It's 100474.

10 So each of those changes is considered 11 individually and collectively, and I'll stop. I think 12 that was your question.

13 JUDGE KENNEDY: I guess that's part of my, 14 I think that's part of what I'm looking for. So there 15 are a series of engineering design package changes 16 that were independently and separately analyzed, and 17 one that collectively analyzed the change packages.

18 That's what I heard. Could you, is that --

19 MR. MATTHEWS: I'm checking with my 20 experts here, Judge Kennedy. Give me one moment.

21 JUDGE KENNEDY: Understand.

22 MR. WACHUTKA: And Your Honor, the NRC 23 staff would like to note that this process that's 24 being described here has been done for steam generator 25

37 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 replacements since

1989, and that includes 1

approximately 50 replaced steam generators.

2 JUDGE KENNEDY: Thank you.

3 MR. MATTHEWS: Judge Kennedy, this is Tim 4

Matthews on behalf of FirstEnergy. Each of the 5

changes to the replacement once-through steam 6

generator are considered in the 50.59 review 7

associated with engineering change package 10.0474, 8

the one listed at page 30.

9 It is in the context of that engineering 10 change package that each of those design changes is 11 evaluated individually and collectively, to see if 12 there are cross-impacts associated with them.

13 JUDGE KENNEDY: What I guess --

14

[Telephonic Interference - 93 seconds.]

15 MR. MATTHEWS: --expectation that the 16 result of that would be that there would not be a 17 50.59 change, a license amendment associated with the 18 replacement steam generators.

19 That was not the purpose of it, but that 20 is one of the ancillary things that fall out when you 21 try to remain within the existing design analysis.

22 In answer to your specific question, as 23 the design matured, it was about, I'm told, a year to 24 a year and a half ago, that the Davis-Besse staff 25

38 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 understood well enough that technical specification 1

changes were going to be needed.

2 Certainly, the improved technical 3

specifications and the tech spec traveler, they have 4

dates on them and they tell us the frequency would be 5

appropriate for this type of generator, and the 6

frequency with which the staff wants reports.

7 But with respect to the volumetric, the 8

change in the volumetric limitation, it requires some 9

development, some maturity of the steam generator 10 design, to have some expectation as to what the as-11 built steam generator is going to look like.

12 JUDGE KENNEDY: To put it in my words, 13 this is Judge

Kennedy, as you started this 14 modification project, no type of specification change 15 was anticipated. As the project evolved and a better 16 understanding of the as-built parameters came into 17 being, you saw the need for technical specification 18 changes at a later date?

19 MR. MATTHEWS: I'd say not exactly, Judge 20 Kennedy. With respect to the administrative technical 21 specification change. There are four tech spec 22 changes FirstEnergy has proposed. Three are largely 23 administrative. One goes to the volumetric changes 24 associated with the new generators.

25

39 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 With respect to those administrative ones, 1

FirstEnergy understood that it would, prior to 2

implementation, it would need to propose changes.

3 Prior to startup from the change out, it would need to 4

make these changes. The volumetric one required a 5

little more information upon which to base it.

6 JUDGE KENNEDY: Okay, I understand.

7 JUDGE TRIKOUROS: This is Joe Trikouros.

8 I'd like to ask a question of the staff, to get their 9

perspective of this, along the same lines that we've 10 been discussing up to now.

11 This started out as a steam generator 12 replacement project, one project. Along the way, you 13 know, all the details started to develop, all these 14 engineering design work packages were put together, 15 etcetera, etcetera, tech specs were identified that 16 had to be changed, etcetera.

17 But in terms of the license amendment 18 requirements for this one modification of the plant, 19 it was decided to separate the modification 20 engineering design change packages, let's say, 21 separate from the tech spec changes, and so a license 22 amendment request was put together and submitted to 23 the staff.

24 The information that stayed back in the 25

40 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 50.59 phase and the information that was included in 1

the tech spec change seems rather arbitrary. Are 2

there any, and let me be specific. The license 3

amendment request states that, I think this is on page 4

3 of 11, but it shows up elsewhere.

5 It talks about physical design 6

characteristics and dimensions of the once-through 7

steam generator, that hinges a lot on those, that 8

statement. Yet there's nowhere in this license 9

amendment request does it actually identify what those 10 changes are.

11 So a decision was actually made to exclude 12 that information from the license amendment request.

13 Now I'm assuming the staff will not be able to review 14 the license amendment request without that 15 information. So it's just not clear to me what the 16 staff's position is on this, and I'll use the term 17 "bifurcation" of the 50.59 process for part of a 18 modification, and then the license amendment request 19 for another part.

20 Is this established policy with respect to 21 the application of 50.59 to such a modification that 22 requires tech spec changes?

23 MR. WACHUTKA: Your Honor, this is the NRC 24 staff. What we would say is that first of all, as we 25

41 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 stated previously, is that this two-step process has 1

been the way that steam generator replacements have 2

been conducted since 1989, and that we have now is in 3

the license amendment request is sufficient 4

information for docketing of the license amendment 5

request.

6 We have not yet completed our review of 7

these proposed tech spec changes. But if we see that 8

we need more information in order to make that 9

determination, that's when we would issue a request 10 for additional information.

11 Basically, we see this as there's two 12 different spheres here. There's the licensing realm 13 and there's the inspection and enforcement realm.

14 Licensing is where we deal with these tech spec 15 changes for the subsequent operation of the steam 16 generators, and in inspection and enforcement domain, 17 we actually have inspections scheduled for the steam 18 generator replacement process, and these inspections 19 are going to look at the engineering evaluations that 20 were made prior to the installation.

21 They're going to look at the plans for the 22 installation. They're going to observe the 23 installation as it happens, make sure there's 24 sufficient radiation protection, and then there is 25

42 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 also 10 C.F.R. requirements for leak testing the 1

containment, when the containment is sealed after the 2

installation, and all that's going to be inspected as 3

well. So that's how we divide up these issues, Your 4

Honor.

5 MR. MATTHEWS: Judge Trikouros, this is 6

Tim Matthews on behalf of FirstEnergy, if I might 7

respond.

8 JUDGE TRIKOUROS: Sure.

9 MR. MATTHEWS: The suggestion that somehow 10 the breakup or the division is arbitrary or worse, 11 nefarious, is completely contrary to the facts. If 12 you look at page 30 of the presentation that 13 Petitioners cite to, it lists a number of engineering 14 change packages, but they are not fine segmentation of 15 the project.

16 They are logical, natural separations, 17 such as the hall route for replacing the steam 18 generator is one package. But all of these issues 19 that Petitioners cite to are all contained within the 20 same engineering change package. I mis-cited the 21 number before. It's wrong in our presentation. It 22 should be 12-0474.

23 But all of those engineering changes, the 24 generators themselves, are included in the same 25

43 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 engineering change package. That's not a requirement, 1

but it made sense to FirstEnergy to do it that way.

2 There's a separate one for steam generator storage 3

facilities.

4 So there are logical breakpoints 5

associated with these that are consistent with the way 6

FirstEnergy does business, consistent with its 7

procedures, and consistent with the way the industry 8

has done business, as Mr. Wachutka has articulated.

9 This is not some unique breakdown of work 10 that FirstEnergy has implemented for this particular 11 project. This is the routine way that licensees, 12 responsible licensees, operating consistent with their 13 procedures and the NRC regulations, conduct business.

14 But as to the specific points of why were 15 the tech specs excluded from the 50.59 analysis, it's 16 because -- I'm sorry tech spec changes are not part of 17 the 50.59 analysis. A tech spec change requires a 18 license amendment, period. Tech spec changes don't 19 have the ability to screen out. Licensees do not have 20 the ability to change their tech specs on their own.

21 The Commission has decided that if the 22 licensee wants to propose a change to its tech spec, 23 the Commission must approve it, and that is why First 24 Energy submitted a tech spec change, I'm sorry a 25

44 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 license amendment to change the tech specs.

1 It doesn't make sense to go in and also 2

ask the staff for approval to make a change that the 3

licensee has the authority to change on its own.

4 JUDGE TRIKOUROS: I understand. I 5

certainly agree with that. However, doesn't it seem 6

odd that we're here discussing as a primary reference 7

for this modification a presentation that was made to 8

the NRC, that was discovered by Mr. Gundersen during 9

the course of his deliberations?

10 MR. MATTHEWS: This is Tim Matthews on 11 behalf. Petitioners' characterization is somewhat 12 misleading, Judge Trikouros. The presentation that 13 FirstEnergy made on March the 20th to the staff, the 14 day after the Federal Register notice associated with 15 the tech spec changes, was publicly noticed. It was 16 a public meeting.

17 Petitioners were present at the meeting.

18 Their representative was there. FirstEnergy discussed 19 this information publicly. It's a presentation that's 20 available in ADAMS. It wasn't some creative search 21 that Mr. Gundersen undertook to find this. It's 22 publicly available information. FENOC handed it out.

23 JUDGE TRIKOUROS: I understand. I 24 understand, Mr. Matthews. But the license amendment 25

45 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 request does not reference any, that I could find, not 1

a single location where one would find an answer to 2

the simple question what changes were made to the 3

steam generator. But --

4 MR. MATTHEWS: The license amendment 5

request does not, because that's not the subject of 6

the license amendment request.

7 JUDGE TRIKOUROS: Oh, it absolutely is --

8 MR. MATTHEWS: The license amendment 9

request is what's the inspection frequency, reporting 10 it to the NRC, other administrative changes associated 11 with the tech spec traveler, and the change to the 12 volumetric curve, specifically to remain within the 13 current mass energy requirements of the accident 14 analysis.

15 It's not -- this is not some change to the 16 tech specs. It's keeping the same volume of water and 17 energy in the secondary side. It's maintaining the 18 status quo.

19 JUDGE KENNEDY: This is Judge Kennedy.

20 Just following up on that, we certainly agree with you 21 on the three administrative changes, and that, you 22 know, I think that's easily sorted through. But this 23 volumetric change, I mean there's no data other than 24 an assertion that it's the same to support that 25

46 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 determination, with the license amendment package.

1 MR. MATTHEWS: This is Tim Matthews on 2

behalf of FirstEnergy. Thank you, Judge Kennedy. I 3

guess I understand the concern that you and Judge 4

Trikouros are articulating, and it's an interesting 5

point, but it's not one that Petitioners themselves 6

asserted that brings us here today.

7 Petitioners didn't even reference the four 8

proposed tech spec changes. Rather, they referenced 9

the slide presentation, where FirstEnergy said they 10 were going to need to do tech spec changes. In fact, 11 the petition seems to think that we hadn't submitted 12 the tech spec changes at all.

13 So they are not challenging the tech spec 14 changes, and it's not based on some lack of 15 information, other than perhaps not reading the slide 16 presentation itself, or reading the petition itself, 17 because the petition says "FirstEnergy is proposing 18 changes to these four tech specs," and providing a 19 basis for it.

20 JUDGE TRIKOUROS: Fine. We understand.

21 I'd like to just ask the staff. This is Judge 22 Trikouros. I'd like to just ask the staff at this 23 point, how would an intervenor file a 2.206 petition 24 on a 50.59 analysis if the 50.59 information is not 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 available to them to review?

1 MR. WACHUTKA: Yes. Your Honor, this is 2

the NRC staff. Let me confer for one moment with 3

technical staff.

4 (Pause.)

5 MR. WACHUTKA: Your Honor, this is the NRC 6

staff. Basically, what we would say is that this, 7

what the Intervenors may be articulating here is just 8

an argument with the 50.59 rule itself. But this is 9

exactly what the 50.59 rule allows, is that the NRC 10 staff cannot pre-approve every change to a power 11 plant, and so that's why 50.59 exists.

12 There are documents that the staff 13 releases or that are publicly available, such as the 14 50.71(e) change report, that is put out by licensees 15 every two years, to discuss how the 50.59 changes have 16 affected the FSAR. Using this information would have 17 to be the way that a member of the public would raise 18 a 10 C.F.R. 2.206.

19 JUDGE RYERSON: This is Judge Ryerson, and 20 I have a question for Mr. Matthews that's prompted by 21 this. I take it if the Petitioners were at least 22 within say 30 days from today, to file a 2.206 23 petition, you would not question its timeliness, since 24 you say it would be premature as of today; is that 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 correct?

1 MR. MATTHEWS: This is Tim Matthews on 2

behalf of FirstEnergy. Judge Ryerson, I guess I'm a 3

little confused. Petitioners can file a 2.206 4

petition --

5 JUDGE RYERSON: I'm sorry, I'm sorry. I 6

meant to say you would not assert that it was late, 7

untimely. I misspoke, given you think it's premature 8

today.

9 MR. MATTHEWS: If they filed -- if they 10 filed, I'm sorry, a 2.206 petition today?

11 JUDGE RYERSON: Say within 30 days of 12 today, you would not argue that it was out of time, 13 because your position is that you are still conducting 14 your 50.59 petition? In other words, you wouldn't say 15 16 MR. MATTHEWS: 2.206. Correct, a 2.206.

17 First I just --

18 (Simultaneous speaking.)

19 JUDGE RYERSON: --at the same time.

20 MR. MATTHEWS: Thank you, Judge Ryerson.

21 Tim Matthews on behalf of FirstEnergy. I just first 22 note that a 2.206 petition is not filed before the 23 Board. It's filed with the staff.

24 JUDGE RYERSON: Correct.

25

49 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. MATTHEWS: And to my knowledge, I am 1

not aware of a timeliness requirement with respect to 2

a 2.206 petition. So if they wanted to challenge it 3

30 days from now, 30 years from now, they can file a 4

petition. They could have filed one before. Instead 5

of filing this proposed contention, they could have 6

filed a 2.206 petition.

7 My only point was that until there is 8

actually a 50.59 review, there really isn't anything 9

to say that FirstEnergy hasn't complied with 50.59.

10 But even then, I understand the information access 11 questions that have been articulated here, and while 12 I understand those are issues that some interested 13 members of the public may have, they are not the 14 issues before us here today.

15 JUDGE RYERSON: Okay, yeah. Just to be 16 clear, since I was not clear in my question initially, 17 it is FirstEnergy's position that a 2.206 petition 18 would be premature today, because you haven't 19 completed your two point, your 50.59 analysis.

20 But you are actually going beyond what I 21 was suggesting would be your position. You're not 22 aware of any timeliness requirement on a 2.206 23 petition, and certainly in the immediate future, you 24 would not be contending, I take it then, that a 2.206 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 petition in front of the proper director would not be 1

timely? That would not be your -- would not be 2

untimely. That would not be your position?

3 MR. MATTHEWS: The only caveat or 4

clarification I would make perhaps on my hyperbole of 5

30 years is a 2.206 petition is a request for 6

enforcement, and the NRC recognizes a five year 7

statute of limitations. So I'm not sure that the 8

staff would want to exercise its resources, 9

enforcement resources five years out.

10 But yes, provided the petition was filed 11 in the appropriate forum to the appropriate director, 12 as distinguished from the Board, FirstEnergy would not 13 have a reason to assert a timeliness issue with 14 respect to the 2.206 petition.

15 JUDGE RYERSON: Okay. Thank you, Mr.

16 Matthews.

17 MR. LODGE: This is Terry Lodge. I would 18 respond on behalf of the Petitioners to several points 19 that have been under discussion here.

20 JUDGE RYERSON: This is Judge Ryerson.

21 Please do.

22 MR. LODGE: Thank you, sir. Number one, 23 2.206 petitions are a black hole. That was an 24 argument that was made in the San Onofre proceeding, 25

51 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 and somewhat well received by the Licensing Board 1

there. Some of the statistics --

2 JUDGE RYERSON: If I may interrupt you, I 3

believe it was pretty firmly rejected by the 4

Commission in its decision in that case, was it not?

5 MR. LODGE: Well, yes sir. But there were 6

statistics that were introduced by Friends of the 7

Earth, indicating that perhaps 2 out of 400 2.206 8

petitions in documented history have ever been granted 9

in any cognizable respect.

10 Secondly, so 2.206 is simply a procedural 11 derailment. The problem is is the 50.59 review 12 conducted by FirstEnergy is not going to be a public 13 domain document. We the public are not going to have 14 anything by way of timely access to something which is 15 never going to be in ADAMS.

16 Which brings me to the point that what you 17 are listening to is FirstEnergy's essentially 18 admitting that they have decided not to go with the 19 one for one replacement; that the tech specs are not 20 related to their 50.59 review; and that they have 21 effectively in

secret, based upon non-public 22 information, adjudicated, based on whatever 50.59 23 analysis they have done to date, that the new 24 generator with verifiably very significant 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 distinctions from the old ones, somehow will fill the 1

form, fit, function requirement and that they are 2

replacement, one for one replacement of the earlier 3

generation of steam generators.

4 Which of course is not true. It's not 5

correct. We are, I repeat, what the public is 6

attempting to do here is to bring to the attention of 7

the NRC that there's a half billion dollar project 8

that's under consideration. There have been, in the 9

last six months, major, major significant regulatory 10 lapses.

11 To put it kindly, there have been three 12 disasters, and we think that there should be very, 13 very serious consideration given to the adjudication, 14 not the derailment by means of a 2.206 referral.

15 JUDGE RYERSON: Thank you, Mr. Lodge. I 16 know some of my colleagues actually may share your 17 concerns about 2.206. But ultimately, as I'm sure 18 you're aware, we take our direction from the 19 Commission, which has pretty clearly stated that, in 20 the Commission's view, 2.206 petitions are a viable 21 option. I think we have to assume that. Judge 22 Trikouros.

23 JUDGE TRIKOUROS: This is Judge Trikouros.

24 Mr. Lodge, I have a question for you. You keep 25

53 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 referring to the word "experiment" in your pleadings.

1 I'd like to understand why you believe that a once-2 through steam generator replacement would be deemed an 3

experiment.

4 MR. LODGE: This is a custom design. The 5

steam generators that are proposed to be installed at 6

Davis-Besse have been installed nowhere else, and we 7

believe that when you get into questions of metals, of 8

replacement of some of the support structures with 9

additional tubes, one of the points that was objected 10 to by FirstEnergy was that we raised the observation 11 that the old generators weighed 590 tons and that the 12 new ones would weigh 465 tons.

13 There are very, very significant engineer 14 changes that is an experiment underway. This is an 15 experiment that is ongoing.

16 JUDGE TRIKOUROS: And how would the fact 17

-- let's assume, for the sake of the argument, that it 18 were an experiment. How would that change the 19 situation? There would still be a 50.59 analysis 20 performed by the applicant; correct?

21 MR. LODGE: Yes sir, there would. We 22 would hope that in the spirit of transparency, that it 23 would be made public. But in any event, how it would 24 change is is that the public would have the 25

54 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 opportunity to have its experts address, scrutinize 1

the changes in the analysis and the engineering.

2 We are seeking discovery. We are seeking 3

the opportunity to conduct cross-examination of 4

witnesses. We're talking about adjudicating this 5

matter.

6 JUDGE TRIKOUROS: I understand. But my 7

question is whether it be a change, test or 8

experiment, it would still be a 50.59 analysis, along 9

the lines of what's being done now?

10 MR. LODGE: Yes sir.

11 JUDGE TRIKOUROS: Is that not correct?

12 MR. LODGE: Yes, except that the 50.59 13 analysis would actually address the differences in the 14 steam generators, instead of assuming or -- we don't 15 understand the basis for the determination, the 16 implicit determination, that the steam generators 17 fulfill the form function requirement. We're looking 18 to understand what that basis might be.

19 JUDGE TRIKOUROS: I understand what you're 20 looking for, but the mechanism for that to happen 21 doesn't exist, in terms of your having open access to 22 all of this information. It's all being done under 23 50.59.

24 Let me ask the applicant. Would you see 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 a difference in any of this if you would determine 1

this was an experiment rather than a change?

2 MR. MATTHEWS: This is Tim Matthews on 3

behalf of the applicant. Thank you, Judge Trikouros.

4 One of the problems we have is we don't know what 5

definition Mr. Gundersen or Petitioners are using for 6

the inflammatory word "experiment." But the bottom 7

line is no. The answer is 50.59 applies to changes, 8

tests or experiments.

9 The industry and the NRC guidance does 10 provide definition with respect to test or experiment, 11 and it's generally using the existing component or 12 equipment beyond the reference bounds or design of 13 that SSC, or inconsistent with the analyses or 14 descriptions in the FSAR.

15 That's consistent with the staff's, the 16 guidance the staff has accepted in, for performing 17 50.59 evaluations in NEI 9607, and Reg Guide, one 18 moment, 1.187 of November 2000. But your point is 19 exactly correct.

20 At the end, whether it's a, characterized 21 as a change or as an experiment is a distinction 22 without a difference. It's the same criteria that 23 apply in 50.59.

24 JUDGE TRIKOUROS: All right. Well, thank 25

56 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 you very much. Because the use of that word, well the 1

excessive use of that word was rather confusing to me.

2 MR. LODGE: Judge Trikouros, this is Terry 3

Lodge. I'd just like to point out that the word 4

"experiment" appears and is discussed repeatedly in 5

50.59, and we believe that the requirements, I'm 6

trying to divine down through the alphabet soup of 7

vowels and numbers what subsection we're looking at.

8 It's under A, and so we believe very definitely --

9 "Subsection (a)(6). Tests or experiments 10 not described in the final safety analysis report is 11 updated in any activity where a structure, system or 12 component is utilized or controlled in a manner which 13 is either (1) outside the reference boundary of the 14 design bases, as described in the FSAR, or (2) 15 inconsistent with the analyses or descriptions in the 16 FSAR."

17 We believe that it, that this proposal is 18 experimental for those reasons.

19 MR. WACHUTKA: Your Honor, this is the NRC 20 staff. We believe that this whole argument here just 21 validates our position, that this is not a claim under 22 Section 189(a) of the Atomic Energy Act. This is a 23 50.59 argument.

24 They're using the language exactly from 25

57 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 50.59, and so to determine whether the applicant 1

properly assessed if this was an experiment or not, 2

this should be done -- this should be brought up by 3

Intervenors under 10 C.F.R. 2.206.

4 MR. MATTHEWS: This is Tim Matthews on 5

behalf of the applicant. I agree with Mr. Wachutka's 6

conclusion, but I'd just like to make clear for the 7

Board and for anyone listening, that there is no 8

ambiguity about what FENOC is doing here, and whether 9

it's a change or an experiment.

10 The definitions are provided in 50.59, as 11 I paraphrased the definition of an experiment. But it 12 clearly falls within the definition of a change, a 13 modification or addition to or removal from the 14 facility or procedures that affects the design 15 function.

16 We're talking about changes to a

17 component, the steam generators, and changes to the 18 design of those components. Those changes are 19 incremental changes to an existing steam generator 20 design.

21 They are changes to tube materials. These 22 are not new or experimental materials. Alloy 690's 23 been around for a good, long time. A relatively small 24 addition in the number of tubes, an additional divider 25

58 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 plate, a stronger shell.

1 These are not somehow out on the edge.

2 But that's not even the test. The suggestion of 3

experiment is using your existing facility or 4

operation your existing facility in some way that's 5

beyond the bounds of your FSAR. There's nothing at 6

all, in anything Petitioners have cited, that suggests 7

FirstEnergy is contemplating such a thing. It's just 8

completely irresponsible.

9 JUDGE RYERSON: All right. Thank you, Mr.

10 Matthews. This is Judge Ryerson again. I believe 11 that concludes the Board's questions. This has been 12 very helpful. We appreciate the responses of all the 13 parties. I think it leads to a better decision by the 14 Board when we have this kind of discussion.

15 It's probably gone on a little longer than 16 we expected, and that probably indicates it has been 17 helpful. The Board will now consider your briefs 18 again. We have read them. I will consider the 19 arguments today. We should have the transcripts in a 20 few days, and we'll look at those as well.

21 My expectation is we will have a written 22 decision issued during August. I doubt at this stage 23 of the case if there's anything else we need to talk 24 about. But while we have everyone on the line, is 25

59 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 there anything else we should discuss? Judge Kennedy, 1

anything?

2 JUDGE KENNEDY: No sir.

3 JUDGE RYERSON: Judge Trikouros?

4 JUDGE TRIKOUROS: No.

5 JUDGE RYERSON: FirstEnergy, anything else 6

we should discuss right now?

7 MR. MATTHEWS: This is Tim Matthews on 8

behalf of FirstEnergy. Judge Ryerson, did you want 9

any follow-up or discussion on the motions to strike?

10 JUDGE RYERSON: No, thank you.

11 MR. MATTHEWS: FirstEnergy has nothing 12 further. Than you, Your Honor.

13 JUDGE RYERSON: And Mr. Lodge, anything 14 further?

15 MR. LODGE: Just a question, Your Honor.

16 Will the transcripts be posted to ADAMS or otherwise 17 made available to the parties please?

18 JUDGE RYERSON: They should be posted on 19

-- I think they will be sent to the parties 20 electronically by SECY. They will be served by SECY 21 when they come in, and I think they usually come in 22 within three business days, if not sooner.

23 MR. LODGE: Okay, thank you.

24 JUDGE RYERSON: Okay, and anything from 25

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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 the NRC staff at this point?

1 MR. WACHUTKA: Your Honor, the NRC staff 2

has nothing further.

3 JUDGE RYERSON: Very good. Well again, 4

thank you all, and we stand adjourned.

5 (Whereupon, at 2:54 p.m., the hearing was 6

concluded.)

7 8

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