ML15190A150
| ML15190A150 | |
| Person / Time | |
|---|---|
| Site: | Vermont Yankee File:NorthStar Vermont Yankee icon.png |
| Issue date: | 07/07/2015 |
| From: | Atomic Safety and Licensing Board Panel |
| To: | |
| SECY RAS | |
| References | |
| 50-271-LA-3, ASLBP 15-940-03-LA-BD01, RAS 28037 | |
| Download: ML15190A150 (79) | |
Text
Official Transcript of Proceedings NUCLEAR REGULATORY COMMISSION
Title:
Entergy Nuclear Vermont Yankee Docket Number:
50-271-LA-3 ASLBP Number:
15-940-03-LA-BD01 Location:
teleconference Date:
Tuesday, July 7, 2015 Work Order No.:
NRC-1705 Pages 1-78 NEAL R. GROSS AND CO., INC.
Court Reporters and Transcribers 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 (202) 234-4433
1 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 ENTERGY NUCLEAR
- Docket No.
9 VERMONT YANKEE, LLC & : 50-271-LA-3 10 ENTERGY NUCLEAR : ASLBP No.
11 OPERATIONS, INC. : 15-940-03-LA-BD01 12 (Entergy Nuclear :
14
x 15 Tuesday, July 7, 2015 16 17 Teleconference 18 19 BEFORE:
20 WILLIAM J. FROEHLICH, Chair 21 DR. MICHAEL F. KENNEDY, Administrative Judge 22 DR. RICHARD E. WARDWELL, Administrative Judge 23 24 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
2 APPEARANCES:
1 2
On Behalf of The Applicant, Entergy Nuclear 3
4 Susan H. Raimo, Esq.
5 of:
Entergy Services, Inc.
6 101 Constitution Avenue, N.W.
7 Washington, D.C. 20001 8
(202) 530-7330 9
sraimo@entergy.com 10 11 Stephen J. Burdick, Esq.
12 Paul M. Bessette, Esq.
13 of:
Morgan, Lewis & Bockius LLP 14 1111 Pennsylvania Avenue, N.W.
15 Washington, DC 20004-2541 16 (202) 739-5059 17 sburdick@morganlewis.com 18 pbessette@morganlewis.com 19 20 On Behalf of the Nuclear Regulatory Commission 21 Anita Ghosh, Esq.
22 Beth Mizuno, Esq.
23 Jeremy Wachutka, Esq.
24 Mitzi Young, Esq.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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3 of:
U.S. Nuclear Regulatory Commission 1
Office of the General Counsel 2
Mail Stop O-15D21 3
Washington, DC 20555-0001 4
301-415-4113 5
anita.ghosh@nrc.gov 6
bethmizuno@nrc.gov 7
jeremy.wachutka@nrc.gov 8
mitziyoung@nrc.gov 9
10 On Behalf of the State of Vermont 11 Justin Colbert, Esq.
12 Kyle H. Landis-Marinello, Esq.
13 Vermont Attorney Generals Office 14 Assistant Attorney General 15 109 State Street 16 Montpelier, Vermont 05609 17 (802) 828-1361 18 kyle.landis-marinello@state.vt.gov 19 20 21 22 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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4 TABLE OF CONTENTS 1
Opening Statements 2
Kyle Landis-Marinello, State of Vermont.....
9 3
Stephen Burdick, Entergy
............ 11 4
Anita Ghosh, NRC
................ 18 5
6 Questions Posed to the Parties
......... 22 7
8 Closing Statements 9
Stephen Burdick, Entergy
............ 69 10 Jeremy Wachutka, NRC Staff
........... 71 11 Kyle Landis-Marinello, The State of Vermont... 74 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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5 P R O C E E D I N G S 1
2:01 p.m.
2 ADMIN. JUDGE FROEHLICH: Good afternoon.
3 My name is William Froehlich and I'm the Licencee 4
Board Chairman in this case which is entitled Entergy 5
Nuclear Vermont Yankee, LLC & Entergy Nuclear 6
Operations, Incorporated. Docket Number 50-271-LA-3.
7 This proceeding involves a
license 8
amendment request filed by Entergy on September 4th, 9
2014 and a Hearing Request filed by the State of 10 Vermont on April 20th, 2015, in response to an 11 opportunity for hearing published in the Federal 12 Register on February 17th, 2015.
13 By order of the Chief Judge issued May 1st 14 this Board was established to decide whether there is 15 an admissible contention and whether a hearing should 16 be held in this matter.
17 I'm in the NRC Headquarters Building in 18 Rockville, Maryland, and I'm joined by my fellow Board 19 Members, Dr. Michael Kennedy, Nuclear Engineer and Dr.
20 Richard Wardwell, a Civil Engineer with a focus on 21 Environmental Geoscience. Also with us is the Board's 22 Law Clerk, Ms. Nicole Pepperl.
23 Would counsels for the parties please 24 introduce themselves for the record at this point.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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6 Let's start please with the State of Vermont.
1 MR. LANDIS-MARINELLO: Good afternoon, my 2
name is Kyle Landis-Marinello. I'm an Assistant 3
Attorney General for the State of Vermont.
4 ADMIN. JUDGE FROEHLICH: Thank you, Mr.
5 Landis-Marinello.
6 For Entergy Nuclear?
7 MR.
BURDICK:
Good afternoon, Judge 8
Froehlich and Members of the Board and the other 9
participants. This is Stephen Burdick of Morgan, 10 Lewis & Bockius. I'm appearing today on behalf of the 11 Applicant, Entergy. With me is Paul Bessette who is 12 one of my partners from Morgan Lewis and also Susan 13 Raimo, who is Senior Counsel for Entergy. We are also 14 joined in person or by telephone by various Entergy 15 personnel including representatives from the Vermont 16 Yankee organization should we require their assistance 17 to respond to the Board's questions.
18 Thank you.
19 ADMIN. JUDGE FROEHLICH: Thank you, Mr.
20 Burdick.
21 And for the NRC staff?
22 MS. GHOSH: Good afternoon, Your Honor.
23 This is Anita Ghosh with the NRC staff. I'm 24 accompanied by co-counsels Beth Mizuno, Jeremy 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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7 Wachutka and Mitzi Young. I also have with me in the 1
room several members of the NRC staff.
2 ADMIN. JUDGE FROEHLICH: Thank you, Ms.
3 Ghosh.
4 As stated in the Board's order of June 5
17th, we're conducting a telephonic oral argument on 6
whether the State of Vermont's April 20th Petition for 7
Leave to Intervene and Hearing Request should be 8
granted. In the Board's June 17th, 2015, Order we 9
provided a list of four topics that we asked the 10 parties to be prepared to address. These topics were 11 not exclusive but they were topics which were of 12 particular interest to the various Board Members.
13 On the same day that our order scheduling 14 this oral argument issued, the Commission staff 15 granted a January 6, 2015, request from Entergy 16 Nuclear for certain exemptions from specific 17 requirements of Title 10 of CFR. And yesterday the 18 State of Vermont filed a motion for leave to file to 19 file a new fifth contention in this matter.
20 As we stated in our notice, the oral 21 argument will proceed as follows. First the Board 22 will hear short opening statements limited to five 23 minutes each from the State of Vermont, Entergy and 24 then the NRC staff. The opening statements will be 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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8 followed by questions from the Board and the Board's 1
questions will focus on whether any of Vermont's 2
proffered contentions are admissible and the impact, 3
if any, of the Commission staff's grant of Entergy's 4
January 6, 2015, request for an exemption from certain 5
NRC regulations.
6 The Board will direct its questions to 7
counsel for the particular party, but if someone feels 8
a need to comment on a question and they haven't been 9
physically asked to answer, let us know at the 10 earliest convenient time or appropriate moment and 11 we'll hear from you as well. As time permits, we'll 12 also hear short closing statements by counsel at the 13 end of the arguments.
14 For the benefit of the Court Reporter and 15 for the record in this case, please identify yourself 16 before speaking. And at this point I'd ask my fellow 17 Board Members, Judge Kennedy, if there are any 18 comments or --
19 ADMIN. JUDGE KENNEDY: This is Judge 20 Kennedy. I have no opening comments.
21 ADMIN.
JUDGE FROEHLICH:
And Judge 22 Wardwell?
23 ADMIN. JUDGE WARDWELL: I have none.
24 ADMIN. JUDGE FROEHLICH: Are there any 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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9 matters of concern to the parties before we hear the 1
opening statement from the State of Vermont?
2 MR. LANDIS-MARINELLO: This is Kyle Landis-3 Marinello. I just for the complete of the record I 4
want to mention I have in the room here Scott Kline, 5
the Division Chief for the Environmental Protection 6
Division and Assistant Attorney General Justin Colbert 7
and we also have participants from the Department of 8
Public Service listening in as well.
9 ADMIN. JUDGE FROEHLICH: Thank you, sir.
10 If there are no other concerns or 11 procedural matters from any of the parties you may 12
- begin, Mr.
Landis-Marinello with your opening 13 statement.
14 MR. LANDIS-MARINELLO: Thank you.
15 In my opening statement I want to make two 16 main points. First, the Board should deny Entergy's 17 request to amend its license because the amendment is 18 based on the 2002 rule which only allows a one-for-one 19 slot of regulatory conditions for license condition 20 and that's not what Entergy is seeking.
21 When Entergy bought Vermont Yankee in 22 early 2002 the NRC knew that it needed to impose 23 limitations on trust fund disbursements. This was 24 necessary to insure the funds could pay for wholly 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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10 decontaminating the site. At that time, the NRC 1
determined as part of its hasty evaluation that it was 2
necessary for Entergy to give 30 days notice before 3
any disbursement of trust funds. That is Entergy's 4
current license condition.
5 A few months later, NRC staff passed the 6
generic rule with a more relaxed standard. Under the 7
generic 2002 rule, 30 days notice is no longer 8
required for decommissioning expenses but is required 9
for expenses like spent fuel management.
10 A year later, NRC staff said that certain 11 licensees could keep their current license conditions 12 or they could replace them one-for-one with the 2002 13 rule. To make certain that it was a one-for-one 14 exchange, staff passed 50.75(h)(5) which requires that 15 all amendments shall comply with the rule.
16 Entergy's license amendment claims to be 17 a one-for-one exchange, not so. As the State's recent 18 filings made clear, Entergy has now been given an 19 exemption from the two most important provisions of 20 the 2002 rule.
- One, the requirement that 21 decommissioning funds be used only for decommissioning 22 expenses and, two, the requirement of giving 30 days 23 notice for expenses like spent fuel management. This 24 is not at all what was envisioned, analyzed and 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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11 approved in the 2002 rule.
1 The language in 50.75(h)(5) could not be 2
clearer that this Board can only approve license 3
amendments that are in accordance with the 2002 rule.
4 This license amendment is not.
5 Entergy and staff's only response to this 6
argument is to point out that the LAR is not mentioned 7
in the exemption request. Of course, nothing 8
prevented Entergy for mentioning the exemption request 9
in their LAR. Toe the contrary as the statement made 10 clear in yesterday's filing with the Board, Entergy 11 has a legal duty under 10 CFR 50.9 and 50.90 to submit 12 a complete and accurate application.
13 Entergy could have said directly in its 14 LAR what it was planning to do ad the State then would 15 have had a right to a hearing on whether Entergy's 16 proposal would adequately protect public health, 17 safety and the environment. But Entergy did not do 18 that. Instead, Entergy chose to submit an application 19 that is missing critical information. Their LAR 20 asserts that they will be bound by all of the 21 regulations in 50.75(h) and even includes a chart that 22 quotes those regulations and applicable. Entergy 23 portrays the amendment as a one-for-one trade. But 24 the exemptions make this far less than a one-for-one 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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12 trade. Entergy cannot assert as the 2002 rule 1
requires that it is going to be subject to all of the 2
requirements of 50.75(h) when it has been exempted 3
from the most important parts of that regulation.
4 Entergy and staff asked this Board to turn 5
a blind eye to the exemption in evaluating the LAR.
6 They asked the Board to evaluate the incomplete and 7
inaccurate LAR and presumably to entirely ignore the 8
fact that Entergy's exemption request has not been 9
granted. It would set a dangerous precedent for the 10 Board to allow such a siloed approach. It would also 11 violate the Atomic Energy Act and the Administrative 12 Procedures Act that denies hearing rights to the state 13 in this way.
14 Second, Entergy license amendment should 15 be denied because there has been no environmental 16 analysis to date. The National Environmental Policy 17 Act requires review here. The parties cannot agree on 18 whether an environmental analysis will occur. Entergy 19 says it will but staff says it will not. Regardless 20 the LAR doe snot comply with NEPA because the hard 21 look must happen before a decision is made on the 22 license amendment.
23 Entergy and staff seems to be of the 24 opinion that they can take Federal actions and then 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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13 analyze the environment impacts later. The U.S.
1 Supreme Court and the D.C. Circuit have made clear 2
that NEPA requires environmental review before action 3
is taken. The NRC must do so here. It has not.
4 Thank you and I look forward to answering 5
your questions.
6 ADMIN. JUDGE FROEHLICH: Thank you, sir.
7 I'd like to hear now the opening statement 8
from Entergy. Will that be you, Mr. Burdick?
9 MR. BURDICK: It will. Thank you, Your 10 Honor.
11 This is Stephen Burdick, Counsel for 12 Entergy.
13 Entergy appreciates this opportunity to 14 address the Board this afternoon and answer any 15 questions related to the State's Hearing Request that 16 is the subject of this proceeding.
17 This proceeding relates to Entergy's 18 September 4, 2014, license amendment request or LAR.
19 They would delete Vermont Yankee Nuclear 20 Decommissioning Trust Conditions in place of 21 compliance with 10 CFR Section 50.75(h) requirements.
22 Although the State's Hearing Request purports to 23 challenge Entergy's LAR, it is, in fact, a much 24 broader unauthorized challenge to Entergy's 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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14 decommissioning for Vermont Yankee and its planned use 1
of decommissioning funds. As a result, the State's 2
Hearing Request must be rejected. None of the State's 3
four proposed contentions satisfies the Commission's 4
contention of admissibility requirements in 10 CFR 5
Section 2.309(f).
6 Both Entergy and the NRC staff already 7
provided multiple independent reasons for why four of 8
the contentions are admissible. Without repeating 9
those arguments, let me provide a high-level overview 10 of some of the key failures of the State's Hearing 11 Request and explain the impact of recent developments.
12 First, Entergy's LAR is anticipated by and 13 entirely consistent with the NRC's regulations and the 14 Commissions, Rule-making Statements related to nuclear 15 decommissioning trust funds. When the NRC issued an 16 order in May of 2002 approving the transfer of the 17 Vermont Yankee operating license to Entergy it imposed 18 certain decommissioning trust requirements which were 19 subsequently included as part of Condition 3(j) in the 20 Vermont Yankee license. Those requirements included 21 reporting obligations related to the use of the trust 22 funds. This was a standard process at the time.
23 Later in 2002 and in November 2003 the NRC amended its 24 regulations to add new provisions at 10 CFR Section 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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15 50.75(h) governing decommissioning trusts that were 1
very similar to those requirements in Condition 3(j) 2 including reporting obligations.
3 The Commission explicitly stated in that 4
rule-making that licensees will have the option of 5
maintaining their existing license conditions or 6
submitting to the new requirements and will be able to 7
decide for themselves whether they prefer to keep or 8
eliminate their specific license conditions.
9 Additionally, as indicated by the plain language of 10 the regulation and the rule-making history there is no 11 time limit by which licensees had to make the 12 transition. In fact, we are not aware of any time 13 limit to submit license amendment requests generally.
14 Entergy submitted the LAR in September 2014 to relive 15 the Vermont Yankee decommissioning license conditions 16 in place of compliance with section 50.75(h), nothing 17 more.
18 Accordingly, Entergy's LAR speaks to only 19 what was explicitly envisioned and permitted by the 20 NRC regulations in these past rule-makings. The 21 State's attempt to prevent the deletion of license 22 conditions or to impose artificial deadlines for such 23 actions is an infamous full attack on Commission 24 regulations contrary to 10 CFR Section 2.335.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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16 Second, the State's contentions raised 1
numerous issues that are outside the scope of this 2
narrow proceeding. The scope of this proceeding and 3
the Board's jurisdiction as defined in the Hearing 4
Notice is limited to the deletion of portions of 5
Condition 3(j) on the basis of the provisions of 6
Section 50.75(h) would apply in their place.
7 Importantly, the scope of this proceeding 8
does not include and is not required to include 9
approval of the entire decommissioning project.
10 Contrary to the scope, nearly all of the State's 11 arguments are unrelated to the LAR and, therefore, 12 beyond the narrow scope of these proceedings. These 13 arguments include challenges related to the 14 appropriate use of trust funds, the post shutdown 15 decommissioning activities report, the exemption 16 request, the Master Trust Agreement, obligations to 17 the Vermont Public Service Board, Entergy's irradiated 18 fuel management program and compliance with unrelated 19 environmental regulations.
20 Third, the State's arguments regarding the 21 January 6, 2015, exemption request are not moot.
22 Entergy submitted the exemption request to obtain 23 exemptions from the NRC regulation to allow use of the 24 portion of the decommissioning trust fund for the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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17 management of irradiated fuel and in the same manner 1
as other withdrawals form the fund. All of contention 2
3 and substantial portions of other contentions 3
challenge various aspects of the exemption request.
4 The NRC, however, approved the requested 5
exemptions on June 17 so the exemptions were effective 6
on June 23rd after publication in the Federal 7
Register. Accordingly, the Commission has already 8
determined that the exemptions are authorized by law 9
will not present an undue risk to the public health 10 and safety are consistent with the common defense and 11 security and are separate from the LAR.
12 Now that the NRC has issued the exemptions 13 the challenges to the exemption request are moot and 14 cannot support an admissible contentions.
15 Finally, the State's contentions fail to 16 satisfy other contentions admissibility requirements 17 as discussed in Entergy's answer opposing the hearing 18 request.
19 In summary, the State's four contentions 20 do not satisfy the Commission's contention 21 admissibility requirements for multiple independent 22 reasons. Because the hearing request does not include 23 any admissible contention, it must be rejected in its 24 entirety.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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18 We appreciate to talk to you and to 1
respond to your questions and look forward to this 2
afternoon's discussions.
3 Thank you.
4 ADMIN. JUDGE FROEHLICH: Thank you, Mr.
5 Burdick.
6 And now I'd like to hear from the 7
Commission's staff. Is that you, Ms. Ghosh?
8 MS. GHOSH: Yes, thank you, Your Honor.
9 This is Anita Ghosh and I represent the 10 NRC staff.
11 In 2002 the Commission promulgated the 12 decommissioning trust provisions rule to requires that 13 decommissioning trust agreements be in a form 14 acceptable to the NRC in order to increase assurance 15 that an adequate amount of decommissioning funds will 16 be available for their intended purpose.
17 Prior to the issuance of this rule, NRC 18 regulations did not require that specific terms and 19 conditions be included in decommissioning trust 20 agreements. Thus, license conditions delineating 21 requirements for decommissioning trust agreements were 22 included in certain licenses on a case-by-case basis 23 as is the case here for Vermont Yankee.
24 The 2002 rule-making sought to remedy the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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19 situation and a new paragraph 10 CFR Section 50.75 (h) 1 was added to discuss the terms and conditions that the 2
NRC believes are necessary to insure that funds in the 3
trust will be available for their intended purpose. In 4
statements of consideration for the rule, the 5
Commission explained that licensees had the option of 6
maintaining their existing license conditions or 7
submitting to the new requirements.
8 Entergy's license amendment request is 9
exclusively contemplated by Section 50.75(h)(5) which 10 allows licensees to elect to delete license conditions 11 relating to decommissioning trust agreements so long 12 as the license amendment is in accordance with Section 13 50.75(h).
14 Vermont's petition should be denied 15 because it inadmissibly challenges the Commission's 16 regulations at Section 50.75(h) without taking a 17 waiver. Moreover, each of Vermont's four proposed 18 contentions are inadmissible under 10 CFR Section 19 2.309(f) because they are not supported in law or fact 20 and fail to raise genuine disputes on material issues.
21 Vermont's petitions is also inadmissible 22 because it challenges a separate exemption request.
23 Generally, neither the Atomic Energy Act nor the 24 Commission's Rules of Practice provide third parties 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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20 with a right to an adjudicatory hearing on an 1
Additionally, contrary to 2
Vermont's assertions the Commission's exception to 3
this rule on PSF does not apply here because the 4
exemption request is not a require element of the 5
license amendment request.
6 Here, Entergy's license amendment request 7
seeks to delete certain license conditions related to 8
decommissioning trust funds and instead conforms to 9
the regulations in 50.75(h). As pertinent to this 10 proceeding, these license conditions require in part 11 that the NRC be given 30 days written notice of any 12 intended withdrawals form the decommissioning trust 13 fund except for administrative expenses. On the other 14 hand, the regulation at 50.75(h)(1)(iv) requires in 15 part that the NRC be given 30 working days written 16 notice of any intended withdrawals from the December 17 trust fund except for December expenses are 18 decommissioning has begun or for administrative 19 expenses. Thus, is the license amendment request is 20 approved, the licensee would not longer be required to 21 provide the NRC with prior written notification of 22 disbursements for decommissioning expenses after 23 decommissioning has begun.
24 On the other hand, the exemption request 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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21 seeks to permit Entergy to make withdrawals from the 1
decommissioning trust fund for the management of 2
irradiated fuel and to make these withdrawals without 3
prior written notification to the NRC. Entergy's 4
exemption request is separate and independent from the 5
license amendment request and is not a required 6
element of the license amendment request. Thus, 7
Vermont's assertions regarding the exemption request 8
are beyond the scope of this proceeding.
9 Vermont also asserts that if the 10 regulation at Section 50.75(h) were applied to Vermont 11 Yankee instead of the license condition this would 12 directly impair the NRC's ability to insure compliance 13 with its regulations and to insure that there is 14 sufficient funding to safely decommission 15 admissibility.
- However, as the Commission 16 specifically recognized in the statements of 17 consideration for the 2002 rule, a 30-day notification 18 provision like the one in the Vermont Yankee license 19 condition would not add any assurances that funding is 20 available and would duplicate the notification 21 requirements of section 50.82 for a licensee that has 22 begun decommissioning and submitted its post-shutdown 23 decommissioning activities report.
24 Finally, to the extent that Vermont 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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22 asserts that Entergy is not in compliance with the 1
Commission's decommissioning funding assurance 2
regulations, the proper course of action for Vermont 3
is to bring an enforcement action under 10 CFR Section 4
2.206. For these reasons and as explain in detail in 5
the staff's brief, Vermont's petition to intervene 6
should be denied.
7 ADMIN. JUDGE FROEHLICH: Thank you.
8 Let me start off. I'd like pages 3 to 6 9
of the license amendment request itself and start with 10 license condition 3(j)(i).
11 Entergy's license amendment request seeks 12 to delete from the operating license conditions 13 related to the decommissioning trust fund. Entergy 14 asserts that the license amendment request if granted 15 will place Entergy under the requirements of 10 CFR 16 50.75(h) which deal with decommissioning trust fund.
17 Entergy's LAR compares on pages 3 to 6 of 18 the license Condition 3(j) to the requirements in 10 19 CFR 50.75(h).
20 Let me begin with the NRC staff. You made 21 reference in your opening to the 2010 rule-making 22 which led to 10 CFR 50.75 and I believe you said that 23 this was to increase assurance that the 24 decommissioning funds will be available for their 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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23 intended purpose. Did I hear you correctly, staff 1
counsel?
2 MS. GHOSH: Your Honor, that was the 2002 3
rule-making. I believe you stated it was the 2010 4
rule-making.
5 ADMIN. JUDGE FROEHLICH: Okay.
6 MS. GHOSH: It's the 2002 decommissioning 7
trust provision rule.
8 ADMIN. JUDGE FROEHLICH: Okay. And the 9
purpose I guess of those rules and the Commission's 10 regs at 50.75, their purpose was to increase the 11 assurance that the decommissioning funds would be 12 available?
13 MS. GHOSH: That's correct.
14 ADMIN. JUDGE FROEHLICH: That's correct.
15 All right.
16 Moving from that, is this the test that 17 Entergy must meet to receive its license amendment?
18 Do they have to show to the staff that this change to 19 operating under the 50.75(h) will increase assurance?
20 MS. GHOSH: The test is that as specified 21 in Section 50.75(h)(5) says that if the licensee with 22 existing license conditions related to decommissioning 23 trust agreements elect to amend those conditions, the 24 license amendment shall be in accordance with the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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24 provisions of paragraph (h) of this section. So, the 1
test is essentially to insure that they are in 2
accordance with paragraph (h) at 50.75. And the 3
Commission generically found that if they are in 4
accordance with those regulations, then this would 5
increase funding assurance.
6 ADMIN. JUDGE FROEHLICH: That it would 7
increase the funding assurance? All right.
8 Looking at 3(j)(iii), the change requested 9
here is that the license condition 3(j)(iii) is a 30-10 day notice period before any disbursement from the 11 trust fund and under 50.75(h)(1)(iv), there's only a 12 30-days notice period before the first disbursement 13 and thereafter under 50.82(a)(8),
no further 14 notification need be made to the NRC. Is that 15 correct, that comparison between what's in 3(j)(iii) 16 and 50.75(h)(i)?
17 MS. GHOSH: That's correct. Essentially, 18 under the regulation in (h)(1)(iv) after a licensee 19 has begun decommissioning no further notification 20 would be necessary.
21 ADMIN. JUDGE FROEHLICH: Okay.
22 MS. GHOSH: For decommissioning expenses.
23 ADMIN. JUDGE FROEHLICH: Okay. And would 24 the staff have to find that this change increases the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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25 assurance that December trust funds will be available 1
for their intended purpose? A change like this?
2 MR. WACHUTKA: Your Honor, this is Jeremy 3
Wachutka from the NRC staff.
4 ADMIN. JUDGE FROEHLICH: Yes.
5 MR. WACHUTKA: Basically the staff's review 6
of this license amendment crosses a narrow line.
7 It's basically just to see that the correct license 8
conditions in the license are deleted and that the 9
correct regulatory provisions from the regulations are 10 assumed by the licensee. There's no other subjective 11 evaluation involved. The Commission itself has 12 already determined that the regulations themselves are 13 sufficiently protected of safety so the NRC doesn't 14 have to redetermine that here. In fact, in the 15 statements of consideration for the rule-making the 16 50.75 rule-making, these exact same questions about 17 the 30-day notice after decommissioning came up and 18 the Commission addressed those directly and said that 19 since we have this annual reporting requirement in 20 decommissioning there is no need for 30-days notice 21 during the decommissioning period. So, that's why it 22 is the staff's position that Vermont is challenging 23 the regulations because all these issues are already 24 discussed in the rule-making.
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26 And I suppose that Mr. Wachutka that the 1
correctness, I guess, the correct wording is that the 2
staff will look to the license amendment and see if 3
the requested changes conform to the language of the 4
regulations when it substitutes those regulations for 5
what's in the license conditions?
6 MR. WACHUTKA: Yes, Your Honor, there could 7
be two possibilities that a licensee could do under 8
50.75(h)(5). They could delete the license conditions 9
and just assume what's in the regulations or they 10 could also amend their license conditions and so 11 50.75(h)(5) would say, you know, when you look at 12 those amended license conditions you're looking to see 13 if those are consistent with the regulations. But if 14 the licensees just assume the regulations then that 15 determination of consistency is self-evident. They 16 are consistent with the regulations.
17 MR. LANDIS-MARINELLO: And this is Kyle 18 Landis-Marinello for the State if I could just chime 19 in on this.
20 ADMIN. JUDGE FROEHLICH: Yes, please.
21 MR. LANDIS-MARINELLO: So, looking at the 22 actual 2002 rule the basis for it was that "NRC needs 23 to take a more active oversight role." And that I see 24 at least four instances in the first pages of that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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27 rule of references to the need that decommissioning 1
funds will be available for their intended purpose 2
just as the Board was asking. And I think that's 3
crucial to keep in mind because it was actually the 4
2002 rule that made crystal clear that all 5
decommissioning withdrawals must be for 6
decommissioning expenses. That's in 50.75(h). And 7
that's why it's absolutely relevant to this proceeding 8
that Entergy did not intend to comply with that 9
provision now that it's been exempted from it. And 10 Entergy has put forward as the entire basis of this 11 LAR that the 2002 rule authorized this.
12 In the opening statements Entergy referred 13 repeatedly to this being explicitly authorized by the 14 2002 rule and when I look at that rule I don't think 15 that's an accurate statement.
16 MR. WACHUTKA: Your Honor, this is Jeremy 17 Wachutka from the NRC staff. One of the things to 18 note is at the section of the regulations, 50.75, has 19 to do when the facility is operating so this is to 20 insure that there's enough funding while you're 21 operating before decommissioning,
- whereas, 22 decommissioning is covered by Section 50.82 and then 23 that's the difference. That why when you're in 24 decommissioning you don't have to have the 30-day 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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28 notice because during decommissioning there's an 1
annual reporting requirements, whereas, while you're 2
operating you're further away from the decommissioning 3
period and so it's more important to be notified about 4
what's happening with the decommissioning funds.
5 Please, Judge Wardwell.
6 ADMIN. JUDGE WARDWELL: Yes, this is Judge 7
Wardwell. Mr. Wachutka, did you say, if I heard you 8
correctly you said that Entergy could have gone ahead 9
and just applied for dual license conditions rather 10 than adopting all of 50.75(h). Is that what I heard 11 correctly?
12 MR. WACHUTKA: Your Honor, from -- I mean 13 the plain language of 50.75(h)(5) discusses that.
14 They can elect to amend their license conditions as 15 long as that amendment is consistent with the 16 regulations. So, they could just change their license 17 conditions to be consistent with the regulations or 18 else delete those license conditions and then just 19 assume the license conditions.
20 ADMIN. JUDGE WARDWELL: And here they're 21 deleting and assuming, is that correct?
22 MR. WACHUTKA: That's correct, Your Honor.
23 ADMIN. JUDGE WARDWELL: And do you have any 24 idea why they went that route?
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29 MR. WACHUTKA: I do not, Your Honor. I 1
would ask Entergy.
2 ADMIN. JUDGE FROEHLICH: Entergy, any 3
comments on why you went that route as opposed to just 4
modifying license conditions themselves?
5 MR. BURDICK: Your Honor, this is Stephen 6
Burdick, Counsel for Entergy.
7 Just deleting license conditions and 8
complying with the regulations appears to be the most 9
straightforward approach. The end result is we're 10 just complying with NRC regulations and it seemed less 11 complicated than trying to fashion new license 12 conditions that are consistent with 10 CFR Section 13 50.75(h) and so it's really -- I think this license 14 amendment request is fairly straightforward. All 15 we're trying to do is get rid of a license condition 16 and comply with those regulations that the Commission 17 approved shortly after the license conditions were 18 imposed. So, it's very straightforward. And so we 19 agree with the staff that the review of this license 20 amendment request is very narrow. It's not a review 21 to insure that our amendment increases assurance on 22 nuclear decommissioning trust issues. It's really 23 just to insure that we deleted the right license 24 conditions and then going forward we'll comply with 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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30 the NRC regulations.
1 ADMIN. JUDGE WARDWELL: Well, that kind of 2
touches upon the elephant that's in the closet here 3
all along. How can you be maintaining those 4
assurances of those regulations if in turn you 5
actually had an exemption request to get rid of some 6
of those license requirements in the regulations and 7
now in fact have been granted for them. Aren't they 8
intertwined with this whole license application?
9 MR. BURDICK: Your Honor --
10 ADMIN. JUDGE WARDWELL: Putting -- claim 11 that maybe that's the reason you went that route is so 12 that you could then get an exemption so that you 13 wouldn't have to follow.
14 MR. BURDICK: Our view is that there are 15 two separate licensing actions here. The first is the 16 license amendment request that's the subject of this 17 proceeding. And with that request we're trying to do 18 what the Commission authorized in the 2002 rule-making 19 to comply -- get rid of our license conditions and 20 comply with Section 50.75(h).
21 The exemption request is separate from 22 this. It's a narrow exemption request. We're not 23 trying to exempt from 50.75(h) in their entirety.
24 It's a narrow request and it exempts from certain 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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31 portions of 50.75(h)(1)(iv) that says that withdrawals 1
from the decommissioning trust are only for 2
decommissioning expenses. So, the exemption there is 3
narrow. What it's doing is it's allowing us to 4
withdraw for certain spent fuel management costs, 5
notwithstanding that specific regulation.
6 And I would point out too this is actually 7
a duplicative regulation in a way with what is found 8
in Section 50.82(a)(8)(1) with respect to the uses of 9
the decommissioning trust funds.
50.82(a)(8) 10 discusses the use of funds for legitimate 11 decommissioning expenses and so this is really a 12 parallel provision here in 75(h) and so it's really 13 just insuring consistency there.
14 And then the other exemption from 15 50.75(h)(1)(iv) relates to the 30-day notice 16 provision. But here again it's related to the narrow 17 issue of withdrawals for spent fuel management 18 expenses and to insure that those withdrawals are 19 treated the same as all other withdrawals from the 20 nuclear decommissioning trust. So, my point is, it's 21 a narrow exemption. It's not a broad exemption of 22 50.75(h) but we do view these are two completely 23 separate licensing activities.
24 MR. WACHUTKA: Your Honor, this is --
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32 ADMIN. JUDGE WARDWELL: Let me just ask if 1
you had gone that alternate route, the alternate and 2
acceptable route of just modifying your license 3
conditions and imported all those that were in 4
50.75(h) except for the 30-day and the prohibition 5
against expenditures for spent fuel would in fact had 6
a successful application in regards to meeting the 7
regulations that are in 50.75(h)? And is not the 8
answer, no, because you're missing two components of 9
it?
10 MR. BURDICK: Your Honor, I think we still 11 anticipate a successful licensing action here. And I 12 expect we would have seen challenges notwithstanding 13 this specific issue. The State has a lot of interest 14 on this topic and has taken advantage of numerous 15 forums to raise this issue. So, I think even if had 16 we had taken that approach I assume we'd still be 17 talking today.
18 MR. WACHUTKA: Your Honor, this is --
19 ADMIN. JUDGE WARDWELL: That doesn't answer 20 my question. My question is, would you see -- would 21 you not be unsuccessful by definition by law because 22 you couldn't' claim that modifying your license 23 conditions and leaving out those two components were 24 in accordance with 50.75(h) which is what I understand 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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33 you would have had to meet if you went about just 1
modifying your license conditions, isn't that correct?
2 MR. BURDICK: Your Honor, I guess my 3
response is we didn't take that approach and, you 4
know, are licensing action here is not leaving out 5
those exempted components. Our plan, you know, if 6
we're successful is for the license amendment to be 7
issued with all of 50.75(h) applying, you know, as 8
appropriate. And then the exemptions would apply at 9
that point to the resulting, if you will, licensing 10 basis following the licensing amendment.
11 ADMIN. JUDGE WARDWELL: I'm aware of, not 12 to be rude, but I'm going to interrupt you just for 13 the sake of time here. I understand what you've done.
14 My questions was, what about the other avenue and I 15 gather you don't want to make any other comments on 16 that, but I don't want to waste time hearing the 17 repetitiveness of that. I think we need to move on to 18 other issues.
19 ADMIN. JUDGE FROEHLICH: This is Judge 20 Froehlich. As we're speaking of decommissioning 21 expenses, are decommissioning expenses spelled out or 22 listed anywhere else other than in 10 CFR 50.2 so when 23 we're talking
- about, you
- know, ordinary 24 decommissioning expenses is that the section of the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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34 regs we should be focused on, I'll ask initially of 1
Entergy?
2 MR. BURDICK: Your Honor, that is where the 3
definition of decommissioning is located. But that is 4
a fairly high-level definition and so there's been a 5
lot of precedent over the years whether 6
decommissioning projects and there is certainly 7
extensive guidance from the NRC on this topic.
8 There's various NUREG documents that address, you 9
know, what are legitimate decommissioning expenses.
10 So, I think, Your Honor, the regulations though that 11 is the right point.
12 But I would point out and I won't keep 13 making this point but our view is that the use of 14 decommissioning expenses is outside the scope of this 15 proceeding. I won't keep making that point. We want 16 to make sure our position is clear.
17 ADMIN. JUDGE FROEHLICH: Okay. Then I 18 guess I would ask counsel for Vermont. Does the 19 amendment and then expenditures -- the amendment and 20 the language that's going to be changed does that 21 involve or how does that involve a significant 22 reduction in a margin of safety which I guess is 23 something that you'd have to show or have to bring 24 forward in your challenge to the LAR?
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35 MR. LANDIS-MARINELLO: Well, first of all, 1
I guess I would respond that that is something we 2
would show on the merits of this case. I think the 3
fact that the questions being asked is an indication 4
that there are issues that need to proceed to the 5
merits here. And we've put in signed declarations 6
from two different people, Dr. Irwin and Tony 7
Leshinskie, that detail a number of ways in which we 8
could end up with a shortfall in this fund and also 9
point out some of the specific ways that Entergy 10 intends to use this fund to increase the chances of a 11 shortfall at the end of the day. And argued that 12 rather than decreasing protections on the fund and 13 eliminating the 30-day notification requirement that, 14 if anything, the NRC needs to be moving the other way 15 and increasing the protections.
16 And specifically here I also -- I think 17 it's related that I need to respond the claim that 18 this is a minor exemption that Entergy has sought in 19 terms of using the fund for essential management 20 expenses and not giving 30-day notice of those 21 expenses either. The specific exemption they sough 22 seeks to spend hundreds of millions of dollars from 23 the spent fuel management fund and seeks to expend 24 that in the short term before the site is 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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36 radiologically decontaminated. And that creates an 1
enormous risk that there's at the end of the day a 2
shortfall in the fund and that's why protections are 3
needed including the 30-day notification requirement 4
here which would at least notify people when 5
expenditures are coming out of the fund. At least 6
give the NRC and other parties an opportunity to look 7
further if there's an expenditure that is much larger 8
than what was anticipated.
9 ADMIN. JUDGE FROEHLICH: But isn't that a 10 challenge to the exemption as opposed to a challenge 11 to the LAR?
12 MR. LANDIS-MARINELLO: Well, as the State 13 has maintained throughout this proceeding they are 14 directly related and I want to stress that I think 15 this is a very important discussion about the two 16 different ways that Entergy could have gone about 17 this. Had they gone the other route and substituted 18 the requirements of 50.75(h)for the current license 19 condition then two things would have happened. One as 20 the board noted, the LAR would be denied because 21 that's not compliant with 50.75(h)(5). It's not 22 consistent. It's missing two requirements. Two, the 23 State of Vermont would have had clear hearing rights 24 to challenge that and present evidence including the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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37 evidence that we have cited in the signed declaration 1
that this would not create a reasonable assurance that 2
this language that the site would fully be 3
decommissioned and protect public health, safety and 4
the environment.
5 And the PFS case is clear that an 6
applicant cannot use the exemption label to remove 7
germane matters from a licensing hearing and deny 8
hearing rights to an interested party in that. And we 9
think that's what has occurred here and just so the 10 Board is aware, the State did try to be involved in 11 the exemption proceeding and formally filed a letter 12 requesting some sort of process, even just noticing 13 comment at the very least in that proceeding. The 14 letter is signed by the Vermont attorney general, the 15 Department of Public Service and two utilities, Green 16 Mountain Power and the Vermont Yankee Nuclear Power 17 Corporation who have an enormous interest in this fund 18 because they have a 55 percent interest in any money 19 that's left over at the end of the day from this 20 decommissioning fund. And we formally asked to be 21 involved in that process and were denied an 22 opportunity to be involved in that process. And as 23 we've laid out in this proceeding, we think that these 24 matters are certainly connected and under PFS should 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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38 be together.
1 MS. MIZUNO: Your Honor, this is Beth 2
Mizuno for the NRC staff.
3 With respect to PFS, Private Fuel Storage, 4
that case it's the staff's position that that case is 5
not applicable here. The exemption and the license 6
amendment here are two separate actions.
7 The license amendment is not dependent on 8
getting the exemption. That was the case in PFS.
9 That is why the exemption was pulled into the license 10 amendment hearing in PFS. In this case, the two are 11 not -- sorry. The license amendment is not dependent 12 on getting the exemption. You can get the license 13 amendment and say nothing about the exemption. And 14 that is exactly how the license amendment application 15 was structured.
16 So, I think it's really important for the 17 Board to understand that Private Fuel Storage is not 18 applicable. The exemption as the Board noted just a 19 moment ago, the exemption is not challengeable here, 20 not in this proceeding on a license amendment request.
21 ADMIN. JUDGE FROEHLICH: And, Ms. Mizuno, 22 your reading of Private Fuel Storage would say that 23 exemptions would be challengeable if they were 24 directly related to an issue that was in the hearing.
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39 If there was some direct relationship then it would be 1
permissible?
2 MS. MIZUNO: Your Honor, it's not a matter 3
of a direct -- well, I'm sorry. The cases do talk in 4
terms of a direct relationship. But if you look at 5
what kind of relationship they're talking about, 6
they're talking about the specific dependent 7
relationship that runs from the license amendment to 8
the exemption. In other words, but for the exemption 9
you couldn't have gotten the license in PFS. It went 10 to license ability. That's why the PFS case talks 11 about license ability.
12 If you need the exemption in order to 13 qualify for the license, yes, then that exemption can 14 come into the hearing but not the other way around.
15 And the other way around is the situation we have here 16 today.
17 ADMIN. JUDGE FROEHLICH: While you mention 18 the other way around, don't we also have a situation 19 where we have an exemption to a set of regulations to 20 which at the current time Entergy is not subject to?
21 MS. MIZUNO: That is correct, Your Honor, 22 for reasons that I won't go into now. The exemption 23 and the license amendment did not issue at the same 24 time. But that is of no consequence. We have an 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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40 exemption out there sitting there. We have an 1
exemption that's sitting there not applicable to 2
anything. When the thing, meaning the license 3
amendment if and when it comes into being then the 4
exemption will apply to it.
5 ADMIN. JUDGE WARDWELL: So, Your Honor, 6
this is Judge Wardwell.
7 I would like to hear some of these 8
reasons. It makes no sense to me that an exemption is 9
approved for a regulation that's not relevant at the 10 time.
11 MS. MIZUNO: Oh, Your Honor, this is Beth 12 Mizuno for the staff.
13 Your Honor, the staff has a number of 14 activities that they are currently engaged in and 15 their work progresses as best it can given the inputs 16 that they get from various office and for, you know, 17 a lot of reasons activities get delayed somewhat.
18 ADMIN. JUDGE WARDWELL: This had such a 19 high priority because the license amendment hadn't 20 even been addressed yet that you wanted to get these 21 exemptions approved. I don't see how that -- that's 22 what you're implying that you have such a high 23 priority in regards to getting this exemption request 24 approved for a license amendment that isn't even 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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41 approved yet.
1 MR. WACHUTKA: Your Honor, this is Jeremy 2
Wachutka from the NRC staff.
3 It is worth noting that the exemption 4
request it does accomplish something on its own 5
without the license amendment request. Even without 6
the license amendment request, the exemption request 7
allows Entergy to make irradiated spent fuel 8
management disbursements from the decommissioning 9
trust fund after 30 days prior written notification.
10 So, there was a reason to approve the exemption 11 request because it does accomplish something even 12 without the license amendment request being approved.
13 ADMIN. JUDGE WARDWELL: Thank you. This is 14 Judge Wardwell again.
15 I'd like to go back to Vermont. After the 16 two scenarios that could have been done here and using 17 the scenario that actually had been done where as I 18 understand it Entergy is submitting this license 19 amendment request to replace the existing conditions 20 and accepting all of the regulations in 50.75(h). Why 21 isn't it our only obligation to just look to see 22 whether or not they've done that? Why isn't that 23 enough for us to approve this license amendment? And 24 as a hypothetical, let's say for instance the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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42 exemption request wasn't even submitted would you have 1
actually had enough information to even submit a 2
request for a hearing under that situation? Another 3
way to ask that is don't you agree that they could 4
just do what they'd done and say we are going to 5
follow all of 50.75(h) and let the license amendment 6
move forward? Why isn't that a suitable thing and 7
that's all we need to judge and say, gee, they've done 8
it and so they should get the license amendment?
9 MR. LANDIS-MARINELLO: I agree that that is 10 a harder case for the state of Vermont if there's no 11 exemption request that has been filed. And if Entergy 12 has put forth simply that they were going to swap it 13 out for the provisions of 50.75(h) in their entirety.
14 As we've noted in our filing, the State 15 would still have an opportunity to request a hearing 16 on that and to talk about the specific circumstances 17 here where Entergy is on record in multiple places 18 including this decommissioning cost estimate of a plan 19 to use the decommissioning fund for expenses like 20 insurance and property taxes which do not meet the 21 definition of radiological decommissioning. And just 22 so the Board is aware, there is NUREG 1713 which puts 23 some more explanation on what qualifies as 24 decommissioning and page 4 of that says it's limited 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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43 to activities that reduce residual contamination. And 1
Entergy is on record here saying that they're going to 2
spend this money on reasons that do not reduce 3
radiological contamination.
4 ADMIN. JUDGE WARDWELL: If they had not 5
gone on record saying that and there was no exemption 6
request at this point in time what else would you 7
bring up in regards to objecting to this license 8
amendment request?
9 MR. LANDIS-MARINELLO: Again, that would be 10 an even harder case for the State of Vermont if that 11 were the situation. I think one response that I have 12 is that we would be able to move to amend any decision 13 that was made on that at a later point at which point 14 Entergy went on record of how they intend to use the 15 fund or applies for the exemption request. And so we 16 would have that option available to us.
17 But, I mean, the main point here though is 18 that that is not --
19 ADMIN. JUDGE WARDWELL: Let me interrupt 20 you also. I don't want to get into the main point 21 going after that. I want to stay focused on my line 22 of questioning if we could. Okay?
23 MR. LANDIS-MARINELLO: Sure.
24 ADMIN. JUDGE FROEHLICH: I'm interrupting 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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44 you for the sake of time. And so with that then if, 1
in fact, at some future date, six months from now 2
after the license amendment had been approved, they 3
file for an exemption request do you agree that, in 4
fact, the exemption request doe snot allow for any 5
hearing by a Board such as us?
6 MR. LANDIS-MARINELLO: No, we do not agree 7
with that because here it would be -- even if it 8
happened after the fact, it would still be directly 9
related to the license condition that we had 10 previously. And this is also -- I think the 11 fundamental point here is right now under the license 12 conditions we are entitled to a 30-day notice whenever 13 the expenditure is going to come out of the funds.
14 And tomorrow if this LAR is granted, we lose that 15 right.
16 Now, it doesn't matter how Entergy gets 17 there whether it's the two-step process they've laid 18 out or if they put it -- if they were clear in the LAR 19 what exactly they were intending to do here from the 20 beginning and it was looked at with the exemption 21 request, we have a right to have a hearing on that and 22 present issues such as what Entergy said it plans to 23 use the fund for. And to give one example even if 24 they weren't on record, we would also have a right to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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45 put Dr. Irwin on the stand and give his testimony 1
about the strontium-90 that was discovered in places 2
where it had not previously been after the 3
decommissioning cost estimate was submitted by 4
Entergy. And we would be able to have him testify as 5
he's put in his signed declaration here that that 6
could greatly increase the cost of decommissioning in 7
this plan and it makes it all the more important to 8
know exactly how this money is coming out of that fund 9
on a regular basis.
10 ADMIN. JUDGE FROEHLICH: I guess that's --
11 MR. BURDICK: Your Honor?
12 ADMIN. JUDGE FROEHLICH: Yes.
13 MR. BURDICK: This is Entergy counsel. Can 14 I respond to just a couple of issues quickly? I'll be 15 very quick but everything that we've heard from the 16 State now are issues that are outside the scope of 17 this proceeding. So issues related to the use of 18 decommissioning funds, strontium, all these other 19 issues just simply are not related to this license 20 amendment request which has a very narrow request of 21 deletion of license conditions in place of compliance 22 with the Section 50.75(h) requirements. And so I just 23 wanted to emphasize that point. These are all outside 24 the scope and do not need to be decided by the Board.
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46 Additionally, just really quickly. I want 1
to go back to what's been referred to as the second 2
option in Section 50.75(h)(5). This is the first time 3
we've heard of someone putting forth this option and 4
so the State seems to be discussing this. So, this is 5
the first time. So, it's really a late argument.
6 But I just want to emphasize. We're doing 7
exactly what the regulations allow, what the statement 8
of consideration during this 2002 and 2003 rule-making 9
allowed. We're consistent with the other license 10 amendment that has been similar with Comanche Peake.
11 I'm not aware of anyone who has just amended a license 12 conditions to try to conform to ths 50.75(h) 13 requirement. Out exemption is consistent with a long 14 line of Commission practice for exemptions for 15 decommissioning purposes.
16 ADMIN.
JUDGE WARDWELL:
Has anyone 17 challenged this like Vermont has? This is Judge 18 Wardwell again for Entergy.
19 MR. BURDICK: No, I don't believe there 20 have been any hearing requests on this. But I think 21 the reason is because the amendment request is very 22 narrow. I think it's only been requested in one place 23 and that's Comanche Peake to obtain a license 24 amendment along these same lines and that one I don't 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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47 believe was challenged. But I think, again, it's 1
because the scope is very narrow, you know, all these 2
other issues are outside of scope.
3 Even a 30-day notice provision, you know, 4
that is one change here. But the Commission has 5
addressed that directly during the rule-making as 6
we've already discussed today.
7 ADMIN. JUDGE FROEHLICH: Mr. Burdick, isn't 8
Entergy's compliance with -- this is Judge Froehlich.
9 I'm sorry. Isn't Entergy's compliance with 50.75(h) 10 (1)(iv) within the scope of the license amendment 11 request?
12 MR. BURDICK: No, it is not within the 13 scope. The compliance is not within the scope. What 14 is within scope is just whether than regulation 15 applies, not how the regulation can be complied with 16 Entergy going forward. So, what is within scope is 17 whether we can delete our license conditions and apply 18 those regulations, not how we're going to comply with 19 those in the future.
20 ADMIN. JUDGE FROEHLICH: And while I have 21 you, Mr. Burdick, the precedent or at least the 22 precedent that you cite in the license amendment 23 application relies on, I guess, the procedures and 24 what happened in the Comanche Peake case. But wasn't 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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48 that amendment -- wasn't Comanche Peak at that time in 1
the process of being decommissioned when the license 2
amendment was granted? I'm sorry, was Comanche Peak 3
in the process of decommissioning when that amendment 4
was granted?
5 MR. BURDICK: No. No, it was not.
6 ADMIN. JUDGE FROEHLICH: It was earlier.
7 And Comanche Peak -- where is Comanche Peake?
8 MR. BURDICK: it's located in Texas.
9 ADMIN. JUDGE FROEHLICH: Okay. And do the 10 State of Texas as part of the state complication 11 process in that case didn't they file or a state that 12 had no comments on the LAR? They certainly didn't 13 oppose it, did they?
14 MR. BURDICK: That sounds correct, Your 15 Honor.
16 ADMIN. JUDGE FROEHLICH: Okay. And going 17 back to Comanche Peake and I read that recently. That 18 license amendment application included a request for 19 exemption. I mean it was all in one neat package and 20 it was all, I guess, before the staff at one time.
21 That Comanche Peake license amendment application had 22 a number of exemption requests along with it, didn't 23 it?
24 MR. BURDICK: Your Honor, my request 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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49 recollection is there were other requests sought 1
together and so in their -- I have the date, July 2
25th, 2002, license amendment request. They sought 3
three things. They had an administrative correction 4
to license condition language from a previous license 5
transfer order.
6 ADMIN. JUDGE FROEHLICH: Right.
7 MR. BURDICK: They had deletion of one 8
instance of a duplicative provision on violation 9
reporting requirements. And then finally revision to 10 certain technical specifications related to steam 11 generating tube inspection. So, it was a much broader 12 issue originally. Later on they did amend the 13 specific request related to nuclear decommissioning 14 trust issues to be similar to the one that we proffer 15 here once there was the rule-making that had addressed 16 this issue. And so ultimately what was approved, I 17
- believe, was very similar with respect to 18 decommissioning trust issues as is before the NRC 19 right now.
20 And one quick point on that as well. I 21 know this has come up in respect to the environmental 22 review that was performed there. I think some of the 23 pleadings were discussed how there is an environmental 24 assessment there with the Comanche Peake precedent.
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50 But I think as we're talking about the scope of the 1
Comanche Peake request, it was much broader than just 2
this specific issue that is related to Vermont Yankee 3
and they had already performed an environmental 4
assessment there. And so rather than re-perform the 5
environmental review they did point to that back to 6
that original environmental assessment. But while we 7
were on this topic I just wanted to make that point 8
that that precedent is not directly applicable with 9
respect to Vermont Yankee.
10 ADMIN. JUDGE FROEHLICH: Okay. I'll ask 11 the Commission staff. The procedure used in Comanche 12 Peake was to my understanding included both the 13 license amendment request and certain exemptions from 14 the regulation. That was all handled in one package, 15 at least initially. And, I guess, when it was 16 reviewed it was reviewed by, you know, the staff 17 altogether.
18 In this case, it appears that the staff is 19 really taking two almost independent looks at the 20 license amendment request and the exemption request.
21 Is that correct?
22 MS. MIZUNO: Yes, Your Honor. This is Beth 23 Mizuno.
24 The staff is treating these as two 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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51 separate actions.
1 MR. WACHUTKA: And, Your Honor, this is 2
Jeremy Wachutka from the NRC staff.
3 It's also important to note that a license 4
amendment request is a different tool than an 5
exemption request. License amendments have to do with 6
changing the license. And so to delete license 7
conditions those require license amendments but to 8
exempt from certain portions of the regulation those 9
require exemption requests. So, they are really two 10 separate processes and you have to choose the correct 11 process for the correct goal that you need to 12 accomplish and so that's why to amend the license, 13 delete license conditions you have to do a license 14 amendment and to exempt certain parts of the 15 regulation you have to do an exemption. And an 16 exemption does not have a hearing opportunity.
17 ADMIN. JUDGE FROEHLICH: Right. Is it the 18 same group or people within the staff, Mr. Wachutka, 19 who look at license amendment requests and those who 20 look at exemption requests or is the same people just 21 on different days wearing different hats?
22 MS. MIZUNO: Sorry, Your Honor, this is 23 Beth Mizuno and I'd be happy to answer.
24 The staff is the same. However, I want 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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52 you to understand the staff is working on more than 1
just the Vermont Yankee case. They have a number of 2
other plants that they or plants and facilities that 3
they are addressing.
4 ADMIN. JUDGE FROEHLICH: Does the staff 5
agree with Entergy that compliance with 6
50.75(h)(1)(iv) is not within the scope of this 7
proceeding?
8 MS. GHOSH: Your Honor, this is Anita Ghosh 9
for the staff.
10 Yes, the staff agrees. 50.75(h)(5) states 11 that the license amendment must be in accordance with 12 the provisions of Paragraph (h) of this section so 13 that's what would be in scope, not whether they're in 14 compliance.
15 MR. WACHUTKA: And, Your Honor, compliance 16 is an oversight matter and oversight matters are 17 outside the scope of license amendment proceedings as 18 the Commission has recently made clear in the St.
19 Lucie, Fort Calhoun and Diablo Canyon proceedings.
20 MR. LANDIS-MARINELLO: And this is Kyle for 21 the State.
22 I guess I understand that the staff's 23 position is a general matter but here Entergy has 24 filed and staff has approved Entergy's request to not 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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53 comply with specific provisions of (h) but rather to 1
be exempted from them and just looking at the first 2
page of this license amendment request it says being 3
put forward on the basis that upon approval of this 4
amendment, the provisions of 10 CFR 50.75(h) that 5
specify that regulatory requirements for 6
decommissioning trust funds will apply. And that's no 7
longer the case.
8 MR. BURDICK: Your Honor, this is Stephen 9
Burdick counsel for Entergy.
10 Just in response to that. I want to make 11 it very clear that, you know, we're not planning to 12 amend the license amendment request. The results of 13 that amendment that we're seeking is at 50.75(h) will 14 apply. And then at that point then the exemption 15 would apply to just very specific portions of that 16 related to irradiated fuel management expenses. But 17 other types of costs and everything else that could be 18 covered by that regulation would be unaffected. So, 19 the regulation would still apply which is exemption 20 for very specific issues.
21 MR. LANDIS-MARINELLO: And this is Kyle for 22 the State.
23 I think that it's a much fairer statement 24 to say that very little of that regulation 50.75(h)(5) 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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54 is left after the exemption. Essentially, as I looked 1
at it there's a provision of a prude investment 2
standard that would still be there. I believe that's 3
also in the Master Trust Agreement. So, I don't think 4
it's a correct characterization to say that everything 5
else would apply and this is just a minor part being 6
cut out from the exemption.
7 ADMIN. JUDGE KENNEDY: So, this is Judge 8
Kennedy.
9 And I'm not sure this adds any clarity but 10 it makes me wonder if in this particular case this 11 license amendment request is denied what is 12 controlling here? What is controlling on Entergy in 13 the events that the license amendment request is 14 denied? We have some exemption requests that are 15 granted and, I believe, we have some license 16 conditions that are still in play. What would be 17 controlling here?
18 MR. BURDICK: Your Honor, this is --
19 ADMIN. JUDGE KENNEDY: I guess I should 20 have directed it to Entergy first.
21 MR. BURDICK: Your Honor, this is Stephen 22 Burdick, counsel for Entergy.
23 If the license amendment request were to 24 be rejected then the license conditions would continue 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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55 to be in place. But the exemption would still be 1
issued and, in particular, as the staff had mentioned, 2
one of the exemptions is from 10 CFR Section 50.82(a) 3 (8) apply with respect to the use of the nuclear 4
decommissioning trust funds for legitimate 5
decommissioning expenses. So, that has already 6
effectuated the ability to withdraw irradiated fuel 7
management expenses from the nuclear decommissioning 8
trust. So, the other exemptions that would apply, you 9
know, once the license amendment request is granted 10 are to be consistent with them.
11 ADMIN. JUDGE KENNEDY: Does the staff agree 12 with that assessment?
13 MS. GHOSH: Yes, Your Honor.
14 ADMIN. JUDGE KENNEDY: But we would have 15 the license conditions and one of the exemption 16 requests that had been granted would be in play.
17 MR. BURDICK: That is correct, Your Honor.
18 Stephen Burdick, counsel for Entergy.
19 ADMIN. JUDGE KENNEDY: I just wanted to 20 make sure I heard you correctly. Thank you.
21 MR. LANDIS-MARINELLO: And this is Kyle for 22 the State.
23 And I guess I would just add to that that 24 with the license conditions still in place one of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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56 those conditions is that if there are any material 1
amendments to the decommissioning trust agreement, 2
those require notification to the NRC and the NRC has 3
an ability to intervene in that case and it's not part 4
of this proceeding but the State has made clear its 5
position that the Master Trust Agreement as it stands 6
doe snot allow use of the fund for management before 7
the site has been radiologically decontaminated. But 8
I think that's another reason why the best solution is 9
to look at all of these matters together as FPS and 10 Honeywell indicate should be the norm in a situation 11 like this.
12 ADMIN. JUDGE KENNEDY: Counsel for the 13 State, you mentioned the Master Trust Agreement how 14 does that play into this whole proceeding here? Is 15 that a
document that's different than the 16 decommissioning trust fund?
17 MR. LANDIS-MARINELLO: The Master Trust 18 Agreement is what guides the decommissioning trust 19 when it is specific to this for Vermont Yankee and I 20 think one of the issues the State has been running 21 into is that a lot of thee matters are being looked at 22 generically and there are specific provisions in the 23 Master Trust Agreement for Vermont Yankee that provide 24 protections that other facilities do not have and the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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57 main one is that that Master Trust Agreement is 1
explicit that the funds cannot be used for spent fuel 2
management until the site has been radiologically 3
decommissioned. And this is not a minor matter. This 4
is something that as their Public Service Board has 5
said would heavily litigate it. That's a direct quote 6
from the Public Service Board order at the time of the 7
sale in terms of how the funds be used and where 8
remainders from the funds would go. And this is 9
Vermont sale money that --
10 ADMIN. JUDGE WARDWELL: Excuse me. This is 11 Judge Wardwell.
12 This Master Trust Agreement who is it 13 between? Who is agreeing to this? Who has agreed to 14 this?
15 MR. LANDIS-MARINELLO: So, the Master Trust 16 Agreement was required by NRC at the time and I 17 believe that is one of the license conditions that is 18 in here. Yes, like 3(j)(i). The Decommissioning 19 Trust Agreement must be in a form acceptable to the 20 NRC. So, it's signed by the utility that I believe is 21 Vermont Yankee Nuclear Power Corporation, the former 22 owner and Entergy and the Bank of New York Mellon as 23 I understand it seeing as far as the Master Trust 24 Agreement. But then it also had to be put before the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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58 NRC before the sale could be finalized so the NRC 1
could approve that the conditions in there would 2
protect these funds for their intended purpose, 3
radiological decommissioning not spent fuel 4
management. And it also has to be approved by the 5
Vermont Public Service Board in the sense that they 6
have to know what provisions would be in there and 7
there are some changes that were made in response to 8
rate payer concerns since Vermont rate payers had 9
funded the majority of the principal funds that 10 created this fund.
11 ADMIN. JUDGE WARDWELL: But how is this 12 trust agreement within our bailiwick? Why is it part 13 of this proceeding or is it?
14 MR. LANDIS-MARINELLO: Well, there is a 15 case from the 7th Circuit Court of Appeals which talks 16 about the NRC being the policemen of the 17 decommissioning trust funds and certainly having the 18 authority to have oversight over how the expenses are 19 being made from that fund and as I mentioned before 20 license conditions 3(j)(4) says any material 21 amendments to that Master Trust Agreement need to be 22 approved by the NRC and it is the State's position 23 that Entergy should have submitted an amendment to 24 that if they were going to use the fund in a way that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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59 was not allowed under the Master Trust Agreement.
1 ADMIN. JUDGE WARDWELL: Well, that Trust 2
Agreement isn't before us at this time, is it? All of 3
just what you said is probably very well true but 4
that's not what this proceeding is about, is it?
5 MR. LANDIS-MARINELLO: I think that this 6
proceeding is focused more on the 30-day notification, 7
the reason being that License Commission 3(j)(4) does 8
have a parallel provision in 50.75(h)(1)(iii). It 9
would still be the State's preference that it remain 10 a license condition so that there's an opportunity for 11 a hearing if there are material amendments and Entergy 12 attempts to eliminate that condition whereas when it's 13 a regulation there is a redemption process where the 14 State and rate payers are denied a hearing.
15 ADMIN. JUDGE WARDWELL: Thank you.
16 MR. BURDICK: Your Honor, this is Stephen 17 Burdick. If I could just respond to these couple of 18 points real quick.
19 We are not in agreement with the State on 20 the Master Trust Agreement issue. It is the nuclear 21 decommissioning trust for Vermont Yankee and so it is 22 covered by certain NRC regulations or must comply with 23 certain NRC regulations so the NRC does have some sort 24 of oversight authority over it for that purpose since 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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60 your compliance with the regulation. But it is not 1
part of this proceeding. It's not related to license 2
amendment requests and so it is not within the 3
jurisdiction of this proceeding. So, I think that's 4
very important and certainly we have some 5
disagreements with other points the State has made.
6 But, again, those issues are outside the scope of this 7
proceeding.
8 MR. LANDIS-MARINELLO: And this is Kyle 9
from the State.
10 I guess it's just important though to keep 11 in mind that in 2002 when that sale occurred and when 12 this license condition was placed there in the first 13 place that these were assurances that were given to 14 the State of Vermont and to our rate payers when the 15 utility turned over $310 million at the time as part 16 of this sale. And that is all the money that was ever 17 in this fund. It's worth more now. It's at about now 18
$665 million because of interest that is gained but 19 Entergy has never put any money into this fund.
20 And at the time of the sale at the License 21 Commission we were given reassurance that the Master 22 Trust Agreement and the License Commission itself that 23 this money would be protected in specific ways and 24 that was important to Vermont allowing that sale to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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61 occur. And, again, in the rule in 2002 Vermont was 1
again given reassurances by explicit language in 2
50.75(h)(iv) which talks about the (h)(1)(iv) which 3
talks about the fund only being used for 4
decommissioning expenses and not for other activities.
5 And now Entergy is trying to use the fund in ways that 6
were not envisioned by the time of the sale or by the 7
rule in 2002 and they're trying to do it without 8
Vermont ever getting the hearing on the matter.
9 MR. BURDICK: This is Stephen Burdick, 10 counsel for Entergy.
11 I'm going to sound like a broken record 12 but just be clear. Those issues are outside the scope 13 of this proceeding and are completed unrelated to 14 what's been requested in the license amendment 15 request. We have differences of opinion on that and 16 the State has raised those in numerous other forms as 17 well and so we're aware of their position. But that 18 is not within the scope of this proceeding. Thank 19 you.
20 MR. LANDIS-MARINELLO: And this is Kyle.
21 Sorry to go back and forth but just the rule in 2002 22 is clear that only a one-for-one trade was allowed and 23 the exemption request is directly relevant here 24 because it makes it not a one-for-one trade. A trade 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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62 one for practically nothing.
1 ADMIN. JUDGE FROEHLICH: And could I ask 2
the NRC staff. Could the NRC staff grant the license 3
amendment request if it conflicted with the Master 4
Trust Agreement?
5 MS. MIZUNO: Your Honor, I need a moment, 6
please. This is Beth Mizuno.
7 MS. GHOSH: Your Honor, this Anita Ghosh 8
for the NRC staff.
9 The staff would be able to grant the 10 license amendment without the Master Trust Agreement 11 being amended. But if it were amended later on then 12 the staff could object to any material change in the 13 Master Trust Agreement. But there's no dependency 14 here on the Master Trust Agreement needing to be 15 changed first.
16 MS. MIZUNO: Also, I'm sorry to jump in, 17 Your Honor. This is Beth Mizuno.
18 But the Master Trust Agreement speaks in 19 terms of NRC regulations and NRC actions. And, you 20 know, give the NRC primacy. So, you know, the 21 dependence as Ms. Ghosh put it does not argue for us 22 being controlled by this Master Trust Agreement at 23 all.
24 ADMIN. JUDGE KENNEDY: Maybe, again, going 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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63 back to an older issue. This is Judge Kennedy.
1 I want to go back to the -- I know we 2
brought up -- the State brought up some cost estimates 3
as an indication that the Trust Fund would be depleted 4
and not allowing Entergy to complete the 5
decommissioning.
6 The specific line items that you 7
identified were those in the decommissioning cost 8
estimate?
9 MR. LANDIS-MARINELLO: Yes. This is Kyle 10 for the State.
11 Those specific line items, I believe, were 12 wrong, the decommissioning cost estimate. I believe 13 we also noted some other public statement that Entergy 14 had made since then including their belief they can 15 use the decommissioning trust fund not just for 16 emergency planning which is not a decommissioning 17 expense itself but also for their attorneys who are 18 involved in emergency planning activities like LA-1 19 and LA-2 from the same docket.
20 ADMIN. JUDGE KENNEDY: But would the State 21 agree that if the line items were in the 22 decommissioning cost estimate, the decommissioning 23 cost estimate showed that the site could be 24 decommissioned and restored is there any real problem 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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64 there for those line items that are in the 1
decommissioning cost estimate that you've identified?
2 MR. LANDIS-MARINELLO: Yes, those are not 3
expenses that fall within the NRC's definition of 4
decommissioning and, again, these are all estimates.
5 We don't actually know how much it's going to cost 6
until the site is cleaned up and, in fact, the only 7
thing we know so far is that that cost estimate is out 8
of date because it doesn't take into account the 9
strontium-90 that was found on the site afterwards and 10 that has not been analyzed for how it affects the cost 11 estimate.
12 And the other part of this is as I 13 mentioned, the utilities, Green Mountain Power and 14 Vermont Yankee Nuclear Power Corporation have a 15 remainder interest in unspent funds. So, even if 16 Entergy puts it in the decommissioning cost estimate 17 and the NRC which did not approve that but denied to 18 take action to disapprove it, even if they list it 19 there, there's a right that these utilities have to be 20 heard on whether those are legitimate expenses or 21 whether Entergy should be paying those through another 22 manner that doesn't deprive our rate payers of the 23 remainder amount.
24 And there's also just one more piece of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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65 that is that the money that was collected for this 1
fund was collected at the time by a regulated entity 2
and subject to FERC approval and so there's another 3
piece of this which is the FERC regulations which say 4
that that money is limited to decommissioning expenses 5
and that any remainder money must be returned to the 6
rate payers.
7 ADMIN. JUDGE KENNEDY: Is all of this 8
residual language captured in the Master Trust 9
Agreement or is that somewhere else even yet?
10 MR. LANDIS-MARINELLO: It is in the Master 11 Trust Agreement, specifically Exhibit D to the Master 12 Trust Agreement, I believe is what talks about where 13 the residual goes.
14 ADMIN. JUDGE KENNEDY: All right. Thank 15 you.
16 MR. LANDIS-MARINELLO: Yes, and I think the 17 comments that the State submitted to the NRC in this 18 matter before we filed the petition for a hearing we 19 filed comments. Those included exhibits that included 20 I believe Exhibit 2 is the Master Trust Agreement 21 itself.
22 ADMIN. JUDGE KENNEDY: All right. Thank 23 you.
24 ADMIN. JUDGE FROEHLICH: This is Judge 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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66 Froehlich.
1 Question for the Commission staff. Is 2
there a necessity to do an environmental review as 3
part of the license amendment request?
4 MR. WACHUTKA: Your Honor, this is Jeremy 5
Wachutka from the NRC staff.
6 For a license amendment request the NRC 7
will conduct an environmental review pursuant to NEPA 8
but it has not yet determined in this case whether 9
this will be accomplished through an environmental 10 assessment or through a categorical exclusion, both of 11 which are permitted under NEPA. However, to the 12 extent that Entergy has suggested the use of a 13 categorical exclusion in its application, the NRC does 14 not believe that such use would be unreasonable as 15 Vermont argues.
16 ADMIN. JUDGE FROEHLICH: You're keeping 17 your options open as I understand it?
18 MR. WACHUTKA: Well, it's just -- I mean, 19 it's in process, Your Honor, so the NRC staff we 20 haven't completed our review of the license amendment 21 request but to the extent that Vermont argues that a 22 categorical exclusion wouldn't be allowed, the NRC 23 staff disagrees with that. The NRC's regulations 24 expressly provide for categorical exclusions and so to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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67 say that in general we couldn't use a categorical 1
exclusion would be an inadmissible challenge to the 2
Commission's rules and also Vermont has not 3
demonstrated that it would be unreasonable for the NRC 4
to use the specific categorical exclusion identified 5
by Entergy which is 10 CFR Section 51.22(c)(10) and 6
this categorical exclusion includes the issuance of an 7
amendment that "changes record-keeping, reporting or 8
administrative procedures or requirements." So, 9
consistent with this, the license amendment request 10 could be considered an administrative change. This is 11 because all the license request is doing is deleting 12 a set of license conditions that insure the adequacy 13 of Vermont Yankee decommissioning trust fund and 14 assuming instead the provisions that the NRC has found 15 that do the same thing. The only difference as we 16 discussed between a decommissioning trust fund license 17 condition and the decommissioning trust fund 18 regulations is that under the regulations a licensee 19 does not have to provide 30 days period notice for 20 decommissioning disbursements after decommissioning 21 has begun. But the decommissioning trust rule itself 22 explicitly found that such an additional reporting 23 requirement after decommissioning has begun is not 24 necessary because this annual reporting requirement is 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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68 already required of facilities undergoing 1
decommissioning. Therefore, again, this is another 2
challenge to the NRC's rules and something that the 3
Commission itself has already determined that was not 4
necessary.
5 ADMIN. JUDGE FROEHLICH: And, Mr. Wachutka, 6
is there a time line of the staff on their 7
environmental review and NEPA review?
8 MR. WACHUTKA: As with all other license 9
amendment requests, Your Honor, the safety evaluation 10 includes an environmental evaluation and that's issued 11 at the same time as the license amendment request is 12 granted or denied.
13 ADMIN. JUDGE FROEHLICH: Interesting.
14 Okay.
15 Judge Wardwell, do you have any further 16 questions or anything else you'd like to ask of the 17 parties?
18 ADMIN. JUDGE WARDWELL: I do not.
19 ADMIN.
JUDGE FROEHLICH:
- And, Judge 20 Kennedy?
21 ADMIN. JUDGE KENNEDY: I'm done, thank you.
22 ADMIN. JUDGE FROEHLICH: Okay. Would the 23 parties care to make brief closing arguments?
24 Is there something the parties would like 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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69 to do?
1 MR. BURDICK: Your Honor, this is Stephen 2
Burdick, counsel for Entergy.
3 There was one more point that I wanted to 4
respond to but it doesn't need to be as part of a 5
closing argument. So, we're find if I can make the 6
point and then dispense with closing arguments.
7 ADMIN. JUDGE FROEHLICH: Does the State of 8
Vermont staff care to make closing comments?
9 MR. LANDIS-MARINELLO: This is Kyle for the 10 state. Yes, we would like to take that opportunity.
11 ADMIN. JUDGE FROEHLICH: Okay.
12 MR. WACHUTKA: Your Honor, the NRC staff 13 would also like a closing argument.
14 ADMIN. JUDGE FROEHLICH: Okay. In that 15 case I'd like to hear first from Entergy followed by 16 the staff and the final argument from the State of 17 Vermont.
18 Please limit your closing comments to two 19 or three minutes, please.
20 All right. Mr. Burdick?
21 MR. BURDICK: Okay. Thank you, Your Honor.
22 This is Stephen Burdick, counsel for Entergy.
23 I'd like to emphasize a couple of 24 different themes from today and I know I've raised 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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70 repeatedly that the issues raised by the State are 1
outside of the scope of this proceeding. And we've 2
heard the state make a number of comments today 3
particularly with respect to the use of nuclear 4
decommissioning trust funds and the deficiency of the 5
funds to complete decommissioning.
6 We understand that the State has some 7
disagreements there but these are not part of this 8
license amendment proceeding. The proceeding is 9
narrow. It relates to the deletion of license 10 conditions in exchange for compliance with Section 11 50.75(h). Those issues are simply outside the scope 12 of this proceeding.
13 I would also note that this is not the 14 only opportunity the State has made to raise these 15 issues. They have submitted numerous letters to the 16 NRC, responses from the NRC, they've raised these 17 issues in their comments on the post-shutdown 18 decommissioning activities report which included the 19 site specific decommissioning cost estimate. The NRC 20 is well aware of these and those are more appropriate 21 forums than this one right now to challenge theses 22 issues. So, those issues are outside the scope of 23 this proceeding and should be rejected.
24 Again, with respect to the first point I 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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71 started with in my opening statement, Entergy is 1
simply trying to do what the Commission has already 2
authorized. It's trying to do what is authorized or 3
identified in 10 CFR Section 50.75(h)(5) and that is 4
to delete these license conditions and to impose the 5
requirements of Section 75(h) upon Vermont Yankee.
6 The State's challenges to the contrary are 7
impermissible challenge to that rule and the 8
statements that were made in those rule-makings.
9 Your Honor, I think is all I would like to 10 raise. We appreciate the opportunity to respond to 11 the questions today, provide some additional thought.
12 But in summary, the state has not identified any 13 inadmissible contentions and so the hearing request 14 should be rejected in its entirety.
15 Thank you.
16 ADMIN. JUDGE FROEHLICH: Thank you, Mr.
17 Burdick.
18 The NRC staff, please.
19 MR. WACHUTKA: Your Honor, the NRC would 20 like to stress that the license amendment that there 21 will not somehow be an infamously reduction in safety 22 as a result of granting the license amendment request 23 which I think was some arguments that were raised in 24 this oral argument.
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72 The license conditions were found to e 1
sufficiently protective of safety when they were 2
imposed upon the license in 2002. Later when the 3
decommissioning trust fund regulation was enacted, 4
that, too, was found to be sufficiently protective of 5
the public health and safety. Therefore, all that 6
this license amendment is requesting is to move from 7
one standard that has been found to be safe by the NRC 8
to another standard that has been found to be safe by 9
the NRC so there isn't somehow an evaluation that 10 needs to be done as to whether there will be a 11 reduction in safety. All that is happening is that 12 Vermont is challenging the NRC's decommissioning trust 13 fund rules which the NRC has found to be safe.
14 Also, the NRC would like to stress that 15 the license amendment request and the exemption 16 request are separate and independent of one another 17 and they do not fall within the exception of PFS.
18 This separateness is illustrated by the fact that the 19 approval of one would accomplish something independent 20 of the approval of the other as we have discussed.
21 For instance, the approval of the exemption request 22 even without the approval of the license amendment 23 request allows Entergy to make irradiated spent fuel 24 management disbursements from the decommissioning 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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73 trust fund after 30 days of prior written 1
notification. Similarly, the approval of the license 2
amendment request even without the approval of the 3
exemption request would allow Entergy to make 4
decommissioning disbursements from the decommissioning 5
trust fund without 30 days prior written notification 6
after decommissioning has begun. Therefore, the scope 7
of this proceeding is properly limited to the license 8
amendment summary request and it does not include the 9
10 Furthermore, with respect to the license 11 amendment request, all of Vermont's arguments are an 12 infamous challenge to the decommissioning regulations.
13 First, the license amendment request purports to do 14 exactly what is allowed by the Commission's 15 regulations at 10 CFR Section 50.75(h)(5), that is to 16 delete the decommissioning trust fund license 17 conditions and assume instead the decommissioning 18 trust fund regulations.
19
- Second, the effect of the license 20 amendment request of removing a requirement for 30 21 days prior written notification of decommissioned 22 disbursements after decommissioning has begun was 23 previously found by the Commission to be acceptable as 24 part of its decommissioning trust fund regulation.
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74 Third, the use of categorical exclusions 1
to satisfy NEPA is expressly provided for by the 2
Commission's regulations.
3
- And, finally, the Commission's 4
decommissioning rules only provide for a hearing on 5
decommissioning at the end of the hearing process.
6 We've discussed here the PSDAR and the decommissioning 7
cost estimate and all of these by operation of the 8
rule - -the decommissioning rule at 50.82 they do not 9
provide an option for a hearing. The hearing comes 10 within two years of license termination which in this 11 case is within two years of 2073.
12 Therefore, for these reasons, Your Honor, 13 the contentions are inadmissible and the hearing 14 request should be denied.
15 Thank you.
16 ADMIN. JUDGE FROEHLICH: Thank you.
17 And Mr. Landis-Marinello, you have the 18 last word.
19 MR. LANDIS-MARINELLO: Yes, thank you, Your 20 Honor.
21 First, I just want to respond to the last 22 point that came up about the environmental analysis 23 and the National Environmental Policy Act and the 24 decision interpreted from the Supreme Court and the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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75 D.C. Circuit are very clear that the entire point of 1
that law that's been in place for decades is to look 2
at environmental impacts before a decision is made.
3 And we are hearing for the first time five minutes ago 4
that staff intends to do any analysis on that and the 5
analysis should have occurred before a decision was 6
made. So, we think that is a clear error in what 7
occurred here procedurally.
8 Moving on to the bigger issue of looking 9
at whether this is a change that was envisioned by 10 50.75(h)(5) and the 2002 rule, I think has been clear 11 from this argument in the filings that are before the 12 Commission. The only way this can be seen as possibly 13 compliant with that regulation is if this Board turns 14 a blind eye to what I believe one of the Board Members 15 referred to as the elephant in the closet. And while 16 that maybe would not have been an option for the Board 17 before this exemption request was granted the 18 exemption request has now been granted. The elephant 19 is out of the room. It is clear to all of the parties 20 exactly what is being approved the moment this Board 21 signs off on this license amendment request. And in 22 that context this cannot possibly be seen as compliant 23 with 50.75(h)(5) and the 2002 rule.
24 And, lastly, there's been a lot of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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76 discussion about what's within this proceeding and 1
what is not and as we the PFS and the Honeywell cases 2
do not depend on what the Applicant decided to put 3
before the Board or the Commission. That would be a 4
dangerous precedent for that to determine hearing 5
rights of another party such as the State of Vermont.
6 It depends on whether the matters are directly related 7
and here there is not doubt that they are. And the 8
test that staff was putting forth well, if one 9
accomplishes something that the other doesn't then 10 they're separate. And that is just not the test from 11 under the Atomic Energy Act, under the Administrative 12 Procedures Act and PSF and Honeywell. The test if 13 whether there is a connection -- there's clearly a 14 connection here and the matters need to be looked at 15 together for this Board to fulfill its duty under the 16 Atomic Energy Act of determining whether public 17 health, safety and the environmental is protected if 18 it approve this license amendment request.
19 And to the extent that there is any doubt 20 on that matter, on the connection between these 21 matters, the State would suggest that this Board has 22 full authority that you certify questions to the 23 Commission and that other parties have noted that the 24 State has raised concerns in other proceedings and 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
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77 that is true. But we have not had a hearing on these 1
matters and we should get a hearing on these matters 2
and they are directly related. And we think this 3
Board can deny the LAR as it stands but to the extent 4
there's any doubt it should certify questions to the 5
Commission and set the entire matter including related 6
matters for a hearing.
7 Thank you.
8 ADMIN. JUDGE FROEHLICH: I want to thank --
9 this is Judge Froehlich.
10 I want to thank the parties for their 11 answers to our questions today. I do note that a new 12 Contention 5 was recently filed by the State of 13 Vermont. Answers would be due on July 31st and a 14 reply fro Vermont o August 7th.
15 The Board will endeavor to render its 16 decision in this matter within 45 days of this 17 argument and we will take into consideration all that 18 comes in in the pleadings as well as the transcript 19 and the argument of counsel that we heard today.
20 I want to thank our Court Reporter, Mr.
21 Borden, and the parties for your answers and your 22 participation in today's oral argument. Your answers 23 have been helpful and constructive to us and I thank 24 you for your time.
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78 If there's nothing further from any party, 1
from any of my colleagues, we'll stand adjourned.
2 Thank you.
3 (Whereupon, the above-entitled matter went 4
off the record at 3:36 p.m.)
5 6
7 8
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