ML20091J663
| ML20091J663 | |
| Person / Time | |
|---|---|
| Site: | Indian Point  |
| Issue date: | 03/24/2020 |
| From: | Burianek L, Tallent J, Wistar-Jones C State of NY, Office of the Attorney General |
| To: | Richard Guzman, Doug Tifft Division of Operating Reactor Licensing, NRC Region 1 |
| Guzman R | |
| References | |
| EPID L-2020-LLE-0010 | |
| Download: ML20091J663 (6) | |
Text
STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL LETITIA JAMES DIVISION OF SOCIAL JUSTICE ATTORNEY GENERAL ENVIRONMENTAL PROTECTION BUREAU March 24, 2020 Email and U.S. Mail Richard V. Guzman Indian Point Licensing Representative Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Richard.Guzman@nrc.gov Douglas Tifft State Liaison Representative U.S Nuclear Regulatory Commission Region 1 2100 Renaissance Blvd., Suite 100 King of Prussia, PA 19406-2713 Doug.Tifft@nrc.gov State of New Yorks Opposition to Holtecs February 12, 2020 Request for Exemptions from 10 CFR 50.82(a)(8)(i)(A) and 10 CFR 50.75(h)(1)(iv)
Indian Point Nuclear Generating Units1, 2 and 3 Docket Nos. 50-3, 50-247 and 50-286 Provisional Operating License No. DPR-5 Renewed Facility Operating :License Nos. DPR-26 and DPR-64
Dear Messrs. Guzman and Tifft:
The Office of the Attorney General represents the State of New York in the above-referenced Nuclear Regulatory Commission (NRC) license transfer proceed-ing involving the decommissioning of the nuclear power reactors at the Indian Point Energy Center in Buchanan, New York (Indian Point). On February 12, 2020, the THE CAPITOL, ALBANY, N.Y. 12224-0341 PHONE (518) 776-2400 FAX (518) 650-9363 WWW.AG.NY.GOV
State filed as a party to, and has sought intervention in, that proceeding. We sub-mit this letter to provide comment on Holtecs February 12, 2020 request for regula-tory exemptions that would allow it to use the Indian Point nuclear decommission-ing trusts (NDTs) for non-decommissioning costs, namely, spent fuel management and site restoration. The exemptions sought by Holtec constitute the sole financial assurance for all work summarized in the PSDAR and are the foundation of Holtecs decommissioning scheme delineated in the license transfer proceeding.
On November 21, 2019, Entergy and Holtec applied to transfer the licenses and operating authority for Indian Point Units 1, 2, and 3 from Entergy to Holtec.
In the States October 16, 2019 letter, and as communicated during the NRCs Octo-ber 17, 2019 pre-filing meeting with NRC staff and representatives from Entergy and Holtec, although the State supports the prompt and thorough decommissioning of Indian Point, it articulated a number of concerns, including (i) the lack of publicly available financial information about Holtec and its subsidiaries, (ii) the likelihood that many of the key financial terms of the proposed transfer will be hidden from public view, (iii) Entergy and Holtecs likely reliance on general cost estimates ra-ther than an on-the-ground characterization of site contamination at Indian Point, and (iv) the lack of a proven track record for Holtecs fleet decommissioning model.
See October 16, 2019 Letter from J. Tallent, OAG to J. Tappert, NRC (ML19362A001). Holtecs December 19, 2019 PSDAR and DCE, followed by its Feb-ruary 12, 2020 exemption request, have borne out New Yorks concerns.
The State believes that the financial circumstances of the NDTs have materi-ally changed since Entergy and Holtecs November 2019 filings. The description of the amount of funds in those trusts likely is now inaccurate and incomplete and, therefore, NRC must require that they be revised. 10 CFR § 50.9. Given the likely material changes to the NDTs because of post-November 2019 market volatility, at this time we oppose Holtecs February 12, 2020 exemption requests. We urge the NRC to defer consideration of Holtecs exemption requests unless and until: 1) En-tergy and Holtec provide a revised license transfer application, PSDAR and decom-missioning cost estimate (DCE) to the NRC and parties that accurately reflects the balance in each decommissioning trust as of April 1, 2020, and revises those docu-ments to accurately account for the estimated costs of decommissioning, spent fuel management and site restoration; 2) Holtec commits to reimburse the ratepayer-funded NDTs with spent fuel settlement monies obtained from U.S. Department of Energy, which commitment is incorporated as a condition of the license transfer; and 3) Holtec commits to a dedicated funding assurance and/or designated alloca-tion for site restoration as a condition of the license transfer.
With respect to the license transfer application and Holtecs embedded ex-emption assumptions, first and foremost, in light of the ongoing global economic contraction from the COVID-19 pandemic, the NRC must require current and com-2
plete financial information regarding the status of the Indian Point NDTs from En-tergy and Holtec. As indicated in the States March 24, 2020 motion to amend con-tentions in the underlying license transfer proceeding, funds such as the NDTs are likely to have suffered substantial losses in recent weeks. For example, depending on the underlying NDT investment allocations, valuation of the IP3 NDT has likely declined markedly, anywhere from nine percent (most conservative investments) to more than eleven percent (least conservative investments). See, 2020 03 23 Chiara Trabucchi Supplemental Declaration (Trabucchi Supp. Decl.), ¶¶4, 6, 13-16, 19-22 (attached). Accordingly, the balances reported in the November 2019 license trans-fer application have likely eroded substantially. In fact, as of March 23, 2020, losses to the $2.1 billion in trust assets reported in the November 2019 license transfer application could range from $213.5 million to $248.9 million for the NDTs collectively. Id. Thus, based upon the limited NDT information provided in the li-cense transfer application, 1 PSDAR, and DCE, the presumptive decline in the NDTs and resulting eroded fund balances could materially affect the application, includ-ing whether the NDTs continue to support the decommissioning scheme as proposed by Holtec.
As demonstrated in its February 12, 2020 petition for intervention, the State has substantive concerns regarding the financial underpinnings of the license trans-fer application. Those concerns have only increased following Holtecs subsequent exemption requests, compounded by the significant contraction of financial markets during the past 30 days. We urge the NRC to require revised licensing materials to ensure that the proposed transfer will provide adequate protection to the health and safety of the public. 42 U.S.C. § 2232(a). Under the regulations governing power reactor license transfers, the applicant bears the burden to submit financial and other information showing the proposed transferee is qualified to hold the li-cense. 10 C.F.R. § 50.80(c)(1); see id. §§ 50.33(f), 50.80(b)(1)(i). Fundamentally, the applicant must demonstrate that the proposed transferee possesses or has reasona-ble assurance of obtaining the funds necessary to cover the costs associated with licensed activities and identify the source or sources of such funding. Id. Under 10 C.F.R. § 50.30(k)(1), the applicant must also show how the proposed transferee in-tends to provide assurance that adequate funds will be available to fully decommis-sion the facility. And 10 C.F.R. § 50.82 requires submission of a site specific [de-commissioning cost estimate], including the projected cost of managing irradiated fuel. Id. § 50.82(a)(4)(i) [emphasis added]. The accuracy and completeness of the required financial showings, purported to have been satisfied by Entergy and Holtec prior to March 2020, are now subject to question.
1 Information regarding the specific investment portfolios for the NDTs has not been provided as a component of the license transfer application or the exemption requests; therefore, the State is una-ble to present a more precise assessment of the NDTs status. That, however, is not the States bur-den. It is the responsibility of the applicants to demonstrate compliance with NRC regulatory re-quirements, and the duty of the NRC to ensure compliance. 10 CFR §§ 50.33(f) and (k)(1), 50.54(bb),
50.75(b)(1) and (e)(1)(i), and 72.30(b).
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It is critical that the NRC require revised submissions from Entergy and Hol-tec before its consideration of both the license transfer application and exemption requests. As the State explained during the NRCs October 2019 pre-filing public meeting, and as set forth in our petition for intervention in the license transfer pro-ceeding, transfer of the Indian Point licenses from Entergy to Holtec subsidiaries for decommissioning involves nested, aggressively private limited liability entities.
These Holtec subsidiaries, which will hold the licenses and/or conduct the decom-missioning, have no funding source save for the NDTs. And neither Entergy nor Holtec have offered any financial assurance to support the Holtec subsidiaries. The fact that Holtec is proposing to simultaneously decommission six power reactors at four separate sites underscores the need for the Commission to require a robust showing in the Indian Point license transfer proceeding that the Holtec subsidiaries are financially qualified within the meaning of 10 C.F.R. §§ 50.33 and 50.80, and that they will provide adequate decommissioning funding assurance as required un-der 10 C.F.R. §§ 50.33 and 50.75.
The current economic circumstances compel heightened NRC financial re-view. Moreover, as demonstrated by the current economic volatility, the Commis-sion should require that the Holtec subsidiaries do more than simply rely on the In-dian Point trust funds as financial assurance. As the State has advocated, the NRC should require that Holtec identify and agree to other available financial assurance mechanisms, including but not limited to parental guarantees, letters of credit, per-formance bonds, and escrow accounts, designed to address unplanned expenses as-sociated with radiological decommissioning, spent fuel management costs not reim-bursed by the United States, 2 and site restoration 3. The Holtec exemption request at issueauthorizing it to withdraw funds from the Indian Point NDTs to fund non-decommissioning activities such as spent fuel management-should only be consid-ered after submission of a revised license transfer application, PSDAR and DEC, and with a license condition to reimburse the ratepayer-funded NDTs with DOE 2 Because the United States has failed to fulfill its obligation to provide a permanent national reposi-tory for the storage of spent nuclear fuel, see e.g. System Fuels, Inc. v. United States, 818 F.3d 1302, 1303-04 (Fed. Cir. 2016), the United States is the party responsible for the costs of on-site spent fuel management, not the New York ratepayers who faithfully funded the Indian Point decommissioning trusts.
3 And to ensure that the financial assurance analysis applies to on-the-ground conditions at Indian Point, the Commission should require that Entergy and/or Holtec performwith State participa-tiona thorough characterization of actual site conditions at Indian Point before it determines whether Holtec has or has not provided adequate financial assurance.
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spent fuel settlement payments, and to provide dedicated financial assurance for site restoration.
Very truly yours, Lisa M. Burianek Joshua M. Tallent Channing Wistar-Jones Assistant Attorneys General Environmental Protection Bureau (518) 776-2423 Lisa.Burianek@ag.ny.gov Att.
2020 03 23 Trabucchi Supp. Decl.
cc (with att.): U.S. Mail:
U.S. Nuclear Regulatory Commission Attn: Document Control Desk Office of Nuclear Material Safety and Safeguards Division of Rulemaking, Environmental, and Financial Support Washington, DC 20555-0001
. Fred Miller Office of Nuclear Material Safety and Safeguards Division of Rulemaking, Environmental, and Financial Support Financial Assessment Branch U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Bruce Watson Office of Nuclear Material Safety and Safeguards Division of Decommissioning, Uranium Recovery, and Waste Programs Reactor Decommissioning Branch U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Alyse Peterson New York State Liaison NYSERDA Mark D. Sanza NYSDEC 5
Susan H. Raimo, Esq.
Counsel for Entergy Services, LLC By U.S Mail and electronic mail William M. Flynn, Esq.
Counsel for Holtec International By U.S. Mail and electronic mail 6