ML20058P416

Licensee Petition for Review of Second Prehearing Conference Order & Motion for Directed Certification.* Advises That Commission Accept Review & Grant Directed Certification of Board Rulings.W/Certificate of Svc

ML20058P416
Person / Time
Site:	Rancho Seco
Issue date:	12/15/1993
From:	Doris Lewis SACRAMENTO MUNICIPAL UTILITY DISTRICT, SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	NRC COMMISSION (OCM)
Shared Package
ML20058P411	List: ML20058P409 ML20058P416
References
92-633-02-DCOM, 92-633-2-DCOM, DCOM-R, NUDOCS 9312270121
Download: ML20058P416 (12)

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!.m a December 15,t1993 UNITED STATES OF AMERICA 93 DEC 17 A9:5l NUCLEAR REGULATORY COMMISSION

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Before the Commissioners

&csa s a svta i+,c o In the Matter of Docket No. 50-312-DCOM SACRAMENTO MUNICIPAL UTILITY DISTRICT (Decommissioning Plan)

(Rancho Seco Nuclear ASLBP No. 92-633-02-DCOM Generating Station)

LICENSEE'S PETITION FOR REVIEW OF SECOND PREHEARING CONFERENCE ORDER AND MOTION FOR DIRECTED CERTIFICATION I

1.

Introduction j

The Sacramento Municipal Utility District ("the District") petitWr the Commission for partial review of the Atomic Safety and Licensing Board's Second Prehearing Confer-ence Order (LBP-93-23) issued on November 30,1993, in the Rancho Seco decommission-I ing proceeding.O This order affects the basic structure of the proceeding in a pervasive and unusual manner. It admits issues which are beyond the scope of the proceeding. It also admits extremely broad financial issues without any connection to the decommission-ing plan. The admission of these issues will essentially allow the intervenor Environmental and Resources Conservation Organization ("ECO") to litigate the need for power despite successive rulings by the Commission that resumed operation of Rancho Seco is not at issue in the proceeding.

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The Licensing Board has ruled that its Second Prehearing Conference Order is not appealable as of right under 10 C.F.R. 6 2.714a, because the Commission's March 3,1993 Memorandum and Order previously granted the petition to intervene ia this proceeding,.

LBP-93-23 at 87-88. Accordingly, the District seeks review in the form of directed certifica-tion pursuant to 10 C.F.R. f 2.786(g). See Safety Light Corp. (Bloomsburg Site Decontam-ination), CLI-92-9,35 N.R.C.156,158 (1992).

9312270121 931215 PDR ADOCK 05000312 C

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The District moves for directed certifiution of two issues:

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Whether broad issues concerning resource planning, the relationship between rate structures and long-term debt, dependence on purchased power, and demand-side management programs may be litigated in this pro -

ceeding without any direct relationship to the decommissioning funding plan; and (2)

Whether costs of an Independent Spent Fuel Storage Installation (ISFSI) may be litigated in this proceeding, despite that (a) spent fuel storage is not part of decommissioning, (b) spent fuel storage costs are addressed by a sep-arate regulation, and (c) the District's application for an ISFSI license is sub-ject to a separate proceeding in which ECO has not sought to participate.

The District submits that the answer to these questions is no, and asks that the Com -

mission reverse the Licensing Board's rulings and reject the broad and irrelevant issues.

This proceeding should be kept focused on genuine, specific, material issues directly related to the decommissioning plan. It should not be allowed to deteriorate into an undisciplined and abstract debate regarding the District's resource planning or become a.

forum for ECO to advocate resumed operation of Rancho Seco.

As the first to progress to hearing under the current rules, this decommissioning case is particularly appropriate for interlocutory review because of the lack of Commission.

guidance on the proper scope of such a proceeding. The Board's rulings not only subject the District to an extremely far-ranging and unduly burdensome hearing, without proper j

l bases or limitations, but also establish a precedent affecting future decommissioning pro-posals and compromising existing funding plans. The Commission should therefore accept i

review to clarify for all licensees that decommissioning proceedings will not become the

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iunctional equivalent oflocal rate and resource planning cases. The Commission should also clarify that decommissioning proceedings do not encompass spent fuel management costs, particularly where an intervenor had an opportunity and declined to raise such issues in an ISFSIlicensing proceeding.

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II.

Summary Of Decision Of Which Review Is Sought

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The Licensing Board admitted six bases of a contention purportedly challenging the District's decommissioning funding plan. Review is sought of three bases relating to the District's general resource planning (Bases 1,'5, and 11) and two relating to ISFSI costs--

(Bases 2 and 14).2/

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Basis 1 alleges that increases in the District's long-term debt, dependence on pur-

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chased power, and avoidance of rate increases create uncertainties in the firmness, avail- -

ability and cost of power and threaten the viability of the funding plan. Basis 5 alleges the unreliability of savings from conservation and load management.. Basis 11 faults the Dis. -

trict for not having submitted a long-term overall financing plan addressing rate increases

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. to provide for replacement power, growth in demand, failure of conservation and load i

management programs, and other contingencies. ECO's Contention on Licensee's Pro-

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posed Decommissioning Funding Plan (March 22,1993) at 2-5,9.

Basis 2 asserts that the District's estimate of the total cost of decommissioning is

~i unreliable because it was premised on a cost estimate of an ISFSI whose design has.

.l changed. Id. at 3. Basis 14 alleges that the funding plan is inadequate because of the mere-possibility of continued use of the spent fuel pools if the ISFSI is not licensed and ' opera-

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tional by 1998. g at 10-11.

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A sixth admitted basis (Basis 13) alleges that the funding plan is premised on~an unrealisticall i h interest rate. The District does not seek interlocutory review of this issue. While s ffers from some deficiencies, Basis 13 at least addresses a real aspect of the funding plan.

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III.

Statement Why The Licensing Board's Rulings Are Erroneous A.

The Bases Relating To Resource Planning Failed To Meet Even Minimal Pleading Requirements In admitting the bases relating to resource planning, the Licensing Board failed to apply the cunent pleading standards. These standards require that a contention be spe-cific, supported by some evidence, and most importantly, supported by sufficient informa-tion to show that a genuine dispute exists with the applicant on a material issue oflaw or fact. 10 C.F.R. s 2.714(b), (d); 57 Fed. Reg. 9,577,9,578 (1992).

Admitted bases 1,5, and 11 did not discuss or take issue with either the District's decommissioning funding plan or any of the additional financialinformation that existed on the docket. The District's ability to establish its own rates,its financial strength as i

reflected in bond ratings of A and A, its financial integrity as a state agency, and its record of contributions to the decommissioning fund since 1980, had been established in a July 19, 1991 District submittal to the NRC Staff.5/ This uncontested information was essentially ignored by ECO. See Licensee's Response to ECO's Proposed Decommissiordng Funding Plan Contention (April 1,1993) at 11-20,27,42-43. As of June 30,1993, the District's external fund contained $122.6 million. $12 million is being contributed annually. Tr.

199-200.

1 Instead, ECO made sweeping, unsupported assertions relating to resource planning i

without any show.ing of materiality. ECO provided no information showing that the Dis-1 trict's debt or power purchases were unusual or had any significance to the District's ability to fund its decommissioning obligation. It provided no information showing that the Dis-trict's demand-side management program was unsound, and its assertion that savings from this program were being relied upon to fund decommissioning was false. It identified no 1/

This same information was provided in the NRC Staff's Safety Evaluation Report, issued on June 16,1993, at pp. 39 44.

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i information in the District's resource plan (a public document submitted to the California Energy Commission) related to the District's ability to meet its decommissioning obliga-tions. See id.; Tr. 196-200, 222-26,249-51,261, 304-08.

The Licensing Board recognized that NRC regulations do not require the submis-sion of a financial resource plan. Nevertheless, the Board stated that the importance of such a plan is indicated by the fact that the Staff had reviewed financial information from 4

the District. LBP-93-23 at 19. This reasoning is flawed. The fact that the Staff considered l

certain financial information does not make additional information automatically material.

The Board bolstered its ruling by citing an NRC Staff Memorandum for the proposition that the Staffis pursuing plans to require earlier submittal of financial planning estimates.

r Id., n.28. The Licensing Board misconstrued the memorandum, which merely recom-l mended advancing the time at which plans for the funding of spent fuel storage costs should be submitted for prematurely closed plants.

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Although the Commission has made it clear that its pleading standards are to be rigorously enforced,$/ e Board did not require strict adherence. It instead held that the l

th pleading requirements should not be applied " mechanically" or in an "over formalistic man-ner," that ECO's failure "to dot an 'i' or cross a 't'should not necessarily undermine the acceptability of a contention," and that contentions need not be " technically perfect."'

LBP-93-23 at 6,16.

The Board brushed aside the District's arguments that ECO's bases were immaterial.5_/ Acknowledging that "each of these individual bases may not in itself

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Arizona Public Service Co. (Palo Verde Nuclear Station, Units 1,2, and 3),

i CLI-91-12,34 N.R.C.149,155-56 (1991).

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The Board incorrectly dismissed the District's materiality arguments as "merely.

disagreements as to the merits." LBP-93-23 at 19. The District identified factualinforma-tion on the docket to demonstrate that ECO had not addressed the District's application or shown a genuine dispute with the District on a material issue.

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constitute a significant challenge to an aspect of the funding plan,"the Board held that

" collectively the... four bases appear adequate to do so." If at 17. This holding cannot be sustained. Combination of extremely broad, unfocused, and therefore immaterial issues, none of which addressed the District's plan or information on the docket, does not cure the pleading deficiencies. To the contrary, it exacerbates the problem, by creating an even broader and more amorphous contention - one worse than its parts.

The Licensing Board acknowledged that ECO's bases included pleading deficien-cies and that ECO had failed to establish any qualified expert supporting these issues, &

at 15-17.N The Board, however, dismissed these deficiencies. Instead of applying the cur-rent pleading standards, it applied 1978 case law and admitted the bases because the issues are " discernible" and set forth "with sufficient clarity to require reasonable minds to inquire further." Id. at 18-19. By failing to apply and enforce current standards, which require an initial showing of evidentiary support and materiality, the Board committed clear error.

i B.

The Bases Relating To The ISI~ U Are Beyond The Scope Of This Proceeding The Board also clearly erred in admitting Bases 2 and 14 relating to the ISFSI and spent fuel storage costs. The NRC's definition of decommissioning excludes " removal and disposal of spent fuel"(see 10 C.F.R. 50.2), and the rulemaking record makes it clear that this exclusion encompasses spent fuel storage. NUREG-1221 at B-3 (response to public comments); NUREG-0586 at 4-20 (GEIS supporting the decommissioning rule). Funding of spent fuel storage costs is not required to be addressed in a licensee's decommissioning plan, but is instead subject to a separate planning requirement in 10 C.F.R. f 50.54(bb).

The Licensing Board surmised that, by virtue of past positions, ECO's chairman might have had exposure to financial matters. LBP-93-23 at 17 and n.22. This speculation -

fell far short of any finding that ECO's bases were supported by expert opinion as required by the Rules of Practice. -

See Licensee's Response to ECO's Proposed Decommissioning Funding Plan Contention (April 1,1993) at 20-23,45-48; Tr. 202-09,352-53; 58 Fed. Reg. 34,947 (June 30,1993),

Notice of Proposed Rule on Spent Fuel Management and Funding Plans by Licensees of Prematurely Shut Down Power Reactors (confirming the Commission's separate require-ments for funding these costs).

Consistent with the distinction between spent fuel storage and decommissioning, the District filed a separate application for an ISFSI license. Despite a Federal Register notice, ECO did not seek to participate in that proceeding. See Licensee's Response to l

l ECO's Proposed Decommissioning Funding Plan Contention (April 1,1993) at 21.

l The Licensing Board ignored the clear statements in the rulemaking record in favor of a September 14,1992 Staff Memorandum, which suggested that spent fuel storage costs could appropriately be considered decommissioning costs. LBP 93-23 at 27. A single sen-tence in a memorandum cannot alter an NRC regulation, and it was clear error for the Board to have elevated a casual statement over the NRC's contemporaneous response to public comments in the rulemaking proceeding.2/

The Licensing Board also based its ruling on speculation that if ECO had chosen to intervene in the ISFSI proceeding, it would have been faced with an argument that ISFSI costs could only be raised in the decommissioning proceeding. If at 28-29. The Board reached this position by observing that the District's ISFSI license application had stated that estimates of the ISFSI costs were contained in a site-specific study previously submit-ted to the NRC with the District's decommissioning plan. The fact that the consultant's report provided to the NRC to support decommissioning cost estimates also happened to i

2/

In the same paragraph c uoted by the Board from the Staff Memorandum, Mr.

Taylor states that "the NRC did not include spent-fuel related expenses as part ofits decommissioning regulations." See also Enclosure 1 (" Current NRC policy does not con-sider the cost of management and storage of spent fuel as an element of decommissioning costs.").. _. _

contain separate estimates of ISFSI costs does not make ISFSI costs part of the decommis-sioning proceeding. Nor has the District ever argued or maintained that ISFSI costs are part of the decommissioning proceeding. In any event, a ruling on the admissibility of con-tentions should not be based on sheer speculation about what arguments might have been made in another proceeding, but should instead be based on correct application of the law.

3 IV.

Statement Why Review Is Appropriate Review of the Board's rulings is appropriate under the factors set forth in 10 C.F.R.

f 2.786(b)(4), because the rulings are incorrect as a matter oflaw and, ifleft uncorrected, would establish a precedent adversely affecting not only future decommissioning proposals but current funding plans as well. Review of the Board's rulings is also appropriate under factors set forth in 10 C.F.R. ! 2.786(g), because the Board's rulings affect the basic struc-ture of this proceeding in a pervasive and unusual manner, by subjecting the District to a broad inquiry into matters unrelated to its decommissioning plan.

The Board rulings raise substantial questions of law, policy, and discretion. This is the first decommissioning proceeding that has progressed to a hearing, and there is no Commission guidance or precedent addressing the appropriate scope of financial review and contentions in such a proceeding. Indeed, the need for further review of the scope and timing of public participation in a decommissioning proceeding was a major factor in the Commission's decision to grant ECO discretionary standing in this proceeding. CLI-93-3, 37 N.R.C.135,141 (1993).

The scope of fm' ancial contentions is a particularly significant issue, ifleft undis-turbed, the Board's rulings will establish a precedent that when a utility decides to decom-mission a reactor, an intervenor is entitled to litigate all aspects of the utility's long-term resource planning, including such items as reliance on purchased power and the adequacy of demand-side management programs. In essence, under the guise of a decommissioning i

funding contention, an intervenor will be able to litigate the need for power and resumed operation of the plant.

The District submits that the Board's admission of these broad issues without a spe-cific and direct connection to the adequacy of the funding plan is not only inappropriate as i

a matter of policy but also contrary to the Commission's Rules of Practice. Contentions must be both specific and material. The bases relating to resource planning are neither.-

The admission of bases relating to ISFSI costs are also contrary to established law.

The NRC's regulations do not include spent fuel storage as part of decommissioning. If the Board's ruling is allowed to stand, it will compromise the decommissioning funding plans -

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and certifications of all operating reactors, as well as the NRC's own regulation establish--

ing certification amounts, because such certifications and plans do not include spent fuel f

storage costs. And the District will be required to litigate issues that are clearly beyond the

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scope of this proceeding.

Finally, the Commission should grant review as a matter of fairness to the District.

I The Commission has allowed this proceeding to go forward as a matter of discretion, and it is therefore appropriate that the Commission provide direction to keep this proceeding

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Conclusion For the reasons discussed above, the Commission should accept review and grant directed certification of the Board's rulings.

i Respectfully submitted,

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i Thomas A. Baxter, P.C.

David R. Lewis Vincent J. Colatriano SHAW, PITTMAN, POTTS & TROWBRIDGE -

I 2300 N Street, N.W.

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' Washington, D.C. 20037 1

(202) 663-8000 Jan Schori General Counsel.

SACRAMENTO MUNICIPAL UTILITY DISTRICT j

P.O. Box 15830 i

Sacramento, California 95813 j

(916) 732-6123 l

Counsel for Licensee Dated: December 15,1993 i

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i. Stri!LD Uhhi40 UNITED STATES OF AMERICA.

93 DEC 17 'A9 :58 NUCLEAR REGULATORY COMMISSION

,Jo n ur ucmuy Before the Commissioners r,vou wr; i J eviu.

ida,Noi In the Matter of

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Docket No. 50-312-DCOM '

SACRAMENTO MUNICIPAL UTILITY DISTRICT (Decommissioning Plan)

(Rancho Seco Nuclear ASLBP No. 92-633-02-DCOM Generating Station)

CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing " Licensee's Petition for Review of Sec-ond Prehearing Conference Order and Motion for Directed Certification," dated Decem-ber 15,1993, are being served upon the persons on the attached Service List by deposit in -

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the United States mail, first class, postage prepaid this 15th day of December,1993.

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David R. Lewis a

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Commissioners In the Matter of Docket No. 50-312-DCOM SACRAMENTO MUNICIPAL UTILITY DISTRICT (Decommissioning Plan)

(Rancho Seco Nuclear ASLBP No. 92-633-02-DCOM Generating Station)

SERVICE LIST Commissioner Ivan Selin, Chairman Edwin J. Reis, Esq.

U.S. Nuclear Regulatory Commission Lisa B. Clark, Esq.

Washington, D.C. 20555 Office of the General Counsel U.S. Nuclear Regulatory Commission Commissioner Kenneth C. Rogers Washington, D.C. 20555 U.S. Nuclear Regulatory Commission Washington, D.C. 20553 Jan Schori, Esq.

General Counsel Commissioner Forrest J. Remick Sacramento Municipal Utility U.S. Nuclear Regulatory Commission District Washington, D.C. 20555 P.O. Box 15830 Sacramento, CA 95813 Commissioner E. Gail de Planque U.S. Nuclear Regulatory Commission Office of the Secretary Washington, D.C. 20555 Attn: Docketing and Service Branch U.S. Nuclear Regulatory Commission Administrative Judge Washington, D.C. 20555 Charles Bechhoefer, Esq., Chairman Atomic Safety and Licensing Board Adjudicatory File U.S. Nuclear Regulatory Commission Atomic Safety and Licensing Board Washington, D.C. 20555 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Administrative Judge Dr. Richard F. Cole Office of Commission Appellate Atomic Safety and Licensing Board Adjudication U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Washington, D.C. 20555' Administrative Judge James P. McGranery, Jr., Esq.

Mr. Thomas D. Murphy 1255 - 23rd Street, N.W.

Atomic Safety and Licensing Board Suite 750 U.S. Nuclear Regulatory Commission Washington, D.C. 20037 Washington, D.C. 20555 i