ML20133G366
| ML20133G366 | |
| Person / Time | |
|---|---|
| Site: | Claiborne |
| Issue date: | 01/10/1997 |
| From: | Walker N CITIZENS AGAINST NUCLEAR TRASH, SIERRA CLUB LEGAL DEFENSE FUND, INC. |
| To: | NRC COMMISSION (OCM) |
| References | |
| CON-#197-18135 91-641-02-ML, 91-641-2-ML, LBP-96-25, ML, NUDOCS 9701160014 | |
| Download: ML20133G366 (13) | |
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BEFORE THE COMMISSION
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Docket No. 70-3070-ML b" In the Matter of
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ASLBP No. 91-641-02-ML T
LOUISIANA ENERGY SERVICES, L.P.
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(Special Nuclear (Claiborne Enrichment Center)
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Materials License)
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January 10,1997 ANSWER OF INTERVENOR. CITIZENS AGAINST NUCLEAR TRASH.
IN OPPOSITION TO THE NRC STAFF'S PETITION FOR REVIEW OF LBP-96-25 I. INTRODUCTION Pursuant to 10 C.F.R. 6 2.786(b)(3), Intervenor, Citizens Against Nuclear Trash (" CANT"),
opposes the petition for review of LBP-96-25 (hereinafter " Petition") filed by the NRC Staff on December 23,1996. In LBP-96-25, the Licensing Board held that:
1) pursuant to NRC regulations, LES is not financially qualified to construct the Claiborne Enrichment Center (" CEC");
2) the Staff's assessment of the need for the CEC is inadequate; and, 3) the Staff's assessment of the no-action alternative and analysis of the costs and benefits of the CEC are inadequate.
The petition must be rejected because it fails to meet the Commission's standard in 10 C.F.R. 5 2786(b)(4) for taking review.
II. ARGUMENT A.
The Board's Financial Qualifications Ruling Raises No Substantial Question of Law or Policy.
Contrary to the Staff's contention, the Licensing Board's ruling that LES is not financially qualified raises no substantial questions oflaw or policy. The Board appropriately rejected the Staff's interpretation of the financial qualifications rules, under which a newly created, virtually assetless 9701160014 970110 m
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applicant with no commitments for any funding -- only an expressed intention to try to get funding someday - would be financially qualified.
The Bot rd's decision is a classic and even standard model of statutory interpretation, in which the NRC Staff fails to demonstrate any error. Applying well established rules of statutory construction in its very thorough findings, the Licensing Board correctly found that, "[p]ursuant to the general interpretational rule that statutory or regulatory provisions that relate to the same subject matter should obe construed in pari materia," the more specific financial qualifications language in Part 50 should be 1
used to construe the more general financial qualifications language in Part 70. LBP-96-25, slip op.
at 129.
The Board also found that the history of the Part 70 and Part 50 rulemakings supports a parallel construction of the two rules. Significantly, in 1967, the Commission's then-Director of Regulations informed Congress that the Commission applied " essentially the same" financial qualifications criteria to Part 70 licensees as Part 50 licensees, and " expected to continue" this practice "in the future."
LBP-96-25, slip op. at 139-40, citing Licensine and Regulation of Nuclear Reactors: Hearings before the Joint Committee on Atomic Energv,90th Cong.1st Sess. 349, Appendix 12 (1967). As the Board observed, although the Par: 50 and Part 70 regulations have " diverged somewhat since 1967," their
" essence" with respect to construction financing and licensing "has not significantly changed" over time. LBP-96-25, slip op. at 147. Thus, the " twinned" history of the regulations (hL), taken together with the Commission's unequivocal representations to Congress in 1967, fully support the Board's holding that the criteria for satisfaction of Part 70's financial qualifications requirements are essentially the same as for Part 50.
l The Staff concedes that Part 50 is applicable as guidance, but " picks and chooses" among Part 50's various provisions, without articulating a valid basis for doing so. LBP-96-25, slip op. at 154.
Moreover, the Staff's selective application of the rules would empty the financial qualifications j
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requirements of any meaning or power to ensure the adequacy of construction funding to protect public health and safety. For example, the Staff argues that Appendix C should be applied so as to require LES only to show that it has corporate affiliates that are " capable" of providing funding, not that these affiliates have actually committed to provide funding. Petition at 9; SCC als LBP-96-25, slip op. at 127. As the Board aptly noted, this alleged financial qualifications standard is no standard at all:
[N]one of these special purpose entities, unlike established organizations, have any operating history and financial track record by which their stability and financial
. qualifications can be objectively judged. For this reason, when newly formed special purpose entities rely upon corporate affiliates for construction funding, the Commission's financial qualifications regulations require such entities to demonstrate both the financial capability of the corporate affiliates to contribute the construction funds and commitments by the corporate affiliates to provide the funds. The financial capability of a corporate affiliate to contribute construction funding without a concomitant commitment to provide the funds, is no more useful in objectively judging the financial qualifications of [an applicant] than a commitment to provide the funds from a corporate affiliate financially incapable of contributing the construction funding.
LBP-96-25, slip op. at 174-76. Similarly, the statement in Appendix C that its requirements are not intended to be " rigid" or " absolute" does not permit the Staff to ignore its plain language and dilute it beyond recognition. SCC Petition at 9. Absent any rational or legally supported basis for such a d
selective reading of the Part 50 criteria, there is no basis for Commission review of the Staff's claims.
The Staff next urges that if the Commission intended all of the Part 50 provisions to apply, it would have revised Part 70 to specifically incorporate all Part 50 language when it amended Part 50, and/or it would have clarified this point in the Hearing Order for this proceeding. Petition at 9 and note 10. This suggestion that the Commission was required to announce its intention to maintain the status quo is nothing less than absurd. As demonstrated quite clearly by the regulatory history of Part 70, the Commission has long applied essentially the same criteria in a Part 70 financial qualifications review as in a Part 50 review. Only if it intended to change this well-established policy and practice 3
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was the Commission obligated to announce it.' CAN v. NRC, 59 F.3d 284, 291 (1st Cir.1995).
Nothing in the criteria, the Commission's 1967 statement of intent to use parallel standards, or the Commission's practice, has changed in the last 25 years. Thus, contrary to the Staff's argument, no inference can be drawn from the Commission's " failure" to amend Part 70 when it amended Part 50 on various occasions, or its " failure" to announce in the Federal Register that its review of LES's financial qualifications under 10 C.F.R. I 70.23 would be equivalent to a Part 50 review.
Even assuming for purposes of argument that the Staff's position has some merit, the Staff fails to demonstrate that granting review would yield any substantive relief. This is because even if the applicable standard required, as the Staff and LES assert, only a showing of a " reasonable financial plan" or " reasonable assurance of obtaining" financing, LES still could not prevail. As the Board noted, a statement by Dr. Klaus Messer, Chief Executive Officer of Urenco, Ltd. -- a 47%
stakeholder in LES through its various corporate affiliates - perhaps best summarizes the uncertainty of LES being able to obtain funding. Dr. Messer readily admitted that he is not confident that LES can get financing given " market conditions" and other factors making the " viability" of LES uncertain.
LBP-96-25, slip op, at 179-80 n. 33.2 In note 10, the Staff appears to argue in the alternative, that even if the Commission could be found to have intended the standards in 10 C.F.R. 5 50.33 to be applicable to LES, subsection (f)(3) prescribes a looser standard than the standard applied by the Board in LBP-96-25. Subsection (f)(3) requires newly formed entities to describe "the legal and financial relationships the entity has or proposes to have with its stockholders or owners." The Staff reasons that "an entity would not have firm contracts with regard to relationships it proooses to have." Petition at 9, note 10 (emphasis in original). This argument confuses subsection (f)(3)'s requirement to describe financial " relationships" with subsection (f)(4)'s requirement to describe financial " arrangements." While it may be acceptable for a license applicant to describe " proposed" relationships with stockholders and owners, to the extent that those stockholders or owners are relied on for funding, subsection (f)(4) and Appendix C make it clear that those relationships must actually be established.
The Staff contends that Dr. Messer's staten.n only indicates his lack of confidence about the 2
success of the financial plan, and not the reasonableness of the plan. Petition at 9. This argument is specious. If a financial plan is reasonable, there is no reason not to be confident about obtaining financing as contemplated by the plan. The Board made no clear error in finding that Dr. Messer's statement was evidence of the lack of certainty that LES can obtain funding. Furthermore, that 4
B.
The Lic:nsing Bo rd Ccrrectly Held Thnt The Staff's Tre:tment Of Th3 Need Fcr The Facility Is Inadequate.
The Staff asserts that the Board " applied the wrong law" - the NRC's power reactor precedents
-- in determining that the need for a facility must be assessed. Petition at 4. Urging nothing more than the " superficial literalism" that the Board soundly rejected (LBP-96-25, slip op. at 30 n. 5), the Staff argues that "the regulatory guide for commercial uranium enrichment facilities environmental reports imposes no such" requirement that need be assessed. Petition at 4. However, as the Board unequivocally held, "in clear and unmistakable terms, Regulatory Guide 4.9 states that the Applicant should address in its ER the need for the facility... 5 LBP-96-25, slip op. at 33 n. 5. The Staff makes no showing whatsoever that this finding by the Board is clearly erroneous -- even after the Board has chastised the Staff for baselessly urging such an argument:
In the face of these unequivocal statements in Regulatory Guide 4.9 that the Applicant should address the need for the facility in its Environmental Report -- statements that represent the Staff's view of how to comply with the Commission's regulations - the Staff's testimony [in this proceeding] at best, makes no sense and, at worst, is disingenuous.
LBP-96-25, slip. op. at 33-4 n. 5.
The Staff further argues that the " Board rejected relevant evidence" by failing "to consider competition and security of supply" in assessing the need for the CEC. In fact, however, the Board statement does not constitute the only basis for the Board's finding -- other factors such as LES's lack of a track record (LBP-96-25, slip op. at 151 n.18,152 n.19,157,174-75), LES's nonexistent financial wherewithal (LBP-96-25, slip op. at 165-70,174-75), and LES's unreasonable assumptions concerning interest rates (LBP-96-25, slip op at 85-6), also formed the basis for the Board's decision.
Thus, the Staff has shown absolutely no error by the Board, let alone clear error, in finding that LES has not satisfied even the standards which LES and the Staff incorrectly assen are applicable.
Nor is Regulatory Guide 4.9's unequivocal requirement to assess the need for the facility 2
undermined by other language urging the comparison of " aggregate benefits" against " aggregate costs." Petition at 4.
The term " aggregate" simply means that the agency willlook at costs and benefits as a whole. To exclude the primary benefit of the project, iA, whether it is needed, hardly would meet than standard.
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did consider -- and did soundly reject - the contention that LES would afford competition and security of supply. For example, the Board specifically held that LES will not bring significant price competition to the uranium enrichment market. LBP-96-25, slip. op. at 91. In the context of uranium enrichment facilities -- which all produce precisely the same product - it is difficult to see how the entry of a new competitor can " increase competition" except by creating price competition.
Accordingly, and as the Board found, " price competition is the quintessence of economic competition,"
> but LES will not bring such competition to the market. LBP-92-25, slip op. at 83.
Similarly, the Board also rejected "on the record before us" the argument concerning the need for " security of supply," noting that the interruptions in foreign sources of enrichment services posited by LES would still not result in demand levels exceeding supply.d LBP-96-25, slip op. at 55. In short, the Staff offers no evidence to show that the Board's conclusions are "not even plausible."
Kenneth G. Pierce, CLI-95-6, 41 NRC 381, 382 (1995), quoting Anderson v. Bessemer City,470 U.S. 564, 573-76 (1985).
Rather than demonstrating clear error, the Staff's arguments amount to nothing more than an unsupported disagreement with the Board's well-reasoned conclusions.
C.
The Licensing Board Correctly Held That The Staff's Treatment Of The No Action Alternative And Its Cost-Benefit Analysis Is Inadequate.
Although the no-action section of the FEIS devotes four paragraphs to the alleged adverse impacts of the no-action alternative, it contains only one sentence regarding the benefits to be gained by avoiding adverse environmental impacts: "With this alternative, the impacts, both positive and negative, discussed in this chapter would be eliminated." FEIS, Q 4.4. The Staff contends that the Board erred in f'mding this sentence insufficient to satisfy NEPA. Petition at 5-6. According to the The Board also rejected the " notion that domestic utilities would rather not deal with foreign 4
producers" since the record evidence indicates that domestic utilities currently deal with foreign producers and will continue to do so in the future to an even greater extent. LBP-96-25, slip op. at
- 90. As the Board pointed out, the testimony of LES's own witness supports this finding. LBP-96-25, slip op, at 68,90.
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l Staff, the Board's requirement that the EIS must address the benefits of the no-action alternative in some detail is a " departure from established law" and " elevates form over substance." Petition at 5-6.
These arguments are entirely without merit. First, the Staff fails to cite any " established law" from which the Board's holding departs. In fact, the applicable law,10 C.F.R. 6 51.60, requires the discussion of alternatives to be "sufficiently complete to aid the Commission in developing and i
exploring" appropriate alternatives to the proposed action." It also requires that, to "the extent i
practicable," the environmental impacts of the proposal and the alternatives "should be presented in comparative form." 11 On its face, the no-action section of the FEIS is so incomplete and lopsided as to be utterly inadequate to satisfy 10 C.F.R. 6 51.60 or the NEPA " rule of reason." Citizens Against Burlington. Inc. v. Busev. 938 F.2d 190.195, (D.C. Cir), geri. denied,502 U.S. 994 (1991).
Although the no-action section discusses or touches upon every conceivable negative impact of cancelling the project and even manufactures some adverse impacts,5 it fails to identify a single specific avoided adverse impact. As the Board correctly concludes, without any discussion of the benefits of inaction, "the effect of the no build alternative cannot properly be compared to the proposed project."' LBP-96-25, at 101-102. Indeed, by presenting details on the alleged foregone For instance, although 61% of the site was clear-cut in 1990 and 94% of the site was timbered 5
in the past ten years, the FEIS speculates at length about the negative impacts of logging and " heavy timbering" on the site. Sec LBP-96-25, at 101, note 9. Other impacts addressed in the no-action i
discussion include secondary economic impacts, which ale not ever proper to such an analysis. See discussion in Section D, infIa.
In this context, it must be remembered that the EIS is intended for circulation and use far beyond the narrow cadre of uranium enrichment specialists on the NRC who may consider it adequate for their own use.
" Congress contemplated that the Impact Statement would constitute the environmental source material for the information of the Congress as well as the Executive, in connection with the making of relevant decisions, and would be available to enhance enlightenment of -- and by -- the public. Natural Resources Defense Council. Inc. v. Morton, 458 F.2d 827 (D.C.
Cir. 1972). The EIS must be circulated for "' widespread discussion and consideration of the environmental risks and remedies associated with the pending project,' thereby augmenting an informed decisionmaking process." LaFlamme v. FERC,852 F.2d 389,398 (9th Cir.1988), quotine Warm Springs Dam Task Force v. Gribble, 621 F.2d 1017,1021 (9th Cir.1980) (per curiam). See alic Bobertson v. Methow Vallev Citizens Council, 490 S.Ct. 332, 349-350 (1989) (EIS must be 7
i benefits of the project, without discussing any of the avoided impacts in more than a passing reference, j
the very structure and format of the no-action discussion slants the decisionmaking process in favor of the proposed action. Thus, contrary to the Staff's argument, the Board's decision to reject the FEIS l
is fully consistent with established law.
Moreover, as the Board points out, the no-action alternative "cannot be dismissed as nothing more than a simple reversal of the costs and benefits of the project." LBP-96-25, slip op. at 102, note
- 10. <For instance, if domestic utilities use blended-down highly-enriched uranium ("HEU") instead of purchasing from the CEC, inaction on the proposed CEC license could have the beneficial effect of i
significantly decreasing or eliminating new U.S. production of depleted uranium tails. Ii at 100.
The FEIS completely ignores this major benefit of inaction. The NRC staff fails to challenge or provide any evidence to show clear error in the Board's conclusion.
D.
The Licensing Board Correctly Held That the FEIS Improperly Relied On Secondary Benefits For The Ultimate Cost-Benefit Comparison.
i The Staff seeks review of the " Board's finding that secondary benefits must be excluded" from the FEIS's ultimate cost-benefit analysis, on the ground that it " raises a substantial policy question."
Petition at 6. This argument must be rejected at the outset under 10 C.F.R. 2.786(b)(5), which requires denial of a petition for review "to the extent that it relies on matters that could have been but were not raised before the presiding officer." As the Board observes in LBP-96-25, the Staff and LES circulated for comment by the public and other affected agencies, in order to assure that relevant environmental information will "be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation" of a proposed decision). A no-action discussion which evaluates the negative impacts of denying a license in depth, but fails to identify a single benefit of inaction or make any attempt to weigh those benefits against the negative impacts, is not only uninformative but downright misleading to Congress and the public.
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" ignored" this argument " completely" by "failing to address it."7 E, slip op. at 104. Accordingly, they have waived it here.
Even if the Commission decides it may consider the Staff's argument, it must be rejected as meritless. The Staff provides no plausible rationale for throwing out 30 years of Commission precedent holding that secondary impacts may not be relied on to strike the ultimate cost-benefit j
comparison. The Staff has pointed to no valid distinction for NEPA purposes between nuclear power
. plants and uranium enrichment plants, that would call for a deviation from that consistent practice.'
Nor has the Staff identified any " policy" considerations that would warrant re-examination of these long-standing precedents.
Under the Board's decision, and consistent with longstanding Commission practice, secondary benefits may be listed in the FEIS, and balanced against secondary impacts of a proposed project or i
its alternatives. Ssg Public Service Co. of New Hampshire (Seabrook Station, Units 1 and 2),
l ALAB-471, 7 NRC 477,509 n. 58. However, as the Board correctly ruled, they may not be relied j
i on to tilt the ultimate cost-benefit balance of a proposed project, where the agency has otherwise failed to justify it through a showing of actual need. To do so would amount to allowing the tail to wag the 7
The Staff's attempt to show that it did address the issue below are unavailing. Petition at 7 note 6. The Staff references arguments by the Staff and LES to the Licensing Board that CANT may not analogize the CEC to a nuclear power reactor or rely on nuclear reactor licensing decisions in support of its NEPA arguments on the need for the frility. & Nowhere did the Staff or LES specifically respond to CANT's argument or the cases cited by CANT, demonstrating that secondary benefits may not be considered in a NEPA cost-benefit analysis. San Citizens Against Nuclear Trash's Proposed Findings of Fact and Conclusions of Law Regarding Contentions J.4 and K, Need and No Action at 7 (May 26,1996).
The Staff cites language in Reg. Guide 4.9 calling for inclusion of secondary benefits and impacts in the overall cost-benefit analysis for the proposition that it has been historical agency
" practice" to include such impacts in cost-benefit analyses. Petition at 7. However, agency " practice" is governed by the decisions of the Commission, not the Staff's non-binding guidance documents. The Staff cites no decisions in which these precedents have been overturned.
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J dog, a result counter to NEPA's " rule of reason." Citizens Against Burlington. Inc. v. Busey, syn, l
938 F.2d at 195.
III. CONCLUSION As shown above, the Licensing Board's thorough, in-depth analysis of each of the matters at issue implicates no relevant policy or regulatory regimes, and does not contravene the case-specific
.. Order setting forth the regulatory requirements applicable to this proceeding or any other precedents.
Becausc there exists no legal error or substantial question with respect to any of the considerations in i
10 C.F.R. Q 2.786(b)(4), the Staff's petition must be denied.
Respectfully submitted, SIERRA CLUB LEGAL DEFENSE FUND, INC.
400 Magazine Street, Suite 401 New Orleans, I.ouisiana 70130 Telephone: (504) 522-1394 By:
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Nathalie M. Walker Attorneys for Intervenor, Citizens Against Nuclear Trash Diane Curran Harmon, Curran, and Spielberg J
2001 "S" Street N.W., Suite 430 Washington, D.C. 20009 1
(202) 328-3500 Attorneys for Intervenor, Citizens Against Nuclear Trash i
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)y UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 2
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Docket No. 70-3070-ML In the Matter of
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ASLBP No. 91-641-02-ML LOUISIANA ENERGY SERVICES, L.P.
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(Special Nuclear 4Claiborne Enrichment Center)
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Materials License)
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January 10,1996 CERTIFICATE OF SERVICE I hereby certify that copies of " Answer of Intervenor, Citizens Against Nuclear Trash, In Opposition to the NRC Staff's Petition for Review of LBP-96-25" have been served on this 10th day of January,1997, as follows:
Administrative Judge By first class mail Thomas S. Moore, Chairman 1 copy Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Administrative Judge By first class mail Richard F. Cole 1 copy
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Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission i
Washington, D.C. 20555 Administrative Judge By first class mail Frederick J. Shon Icopy l
1 Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 i
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Secretary of the Commission
' By first class mail U.S. Nuclear Regulatory Commission original plus 2 copies Washington, D.C. 20555 Attention: Chief, Docketing and Service Section Office of Commission Appellate By first class mail Adjudication 1 copy U.S. Nuclear Regulatory Commission Washington, D.C. 20555
..aiin w Holler, Esq.
By first class mail Office of the General Counsel 1 copy U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Joseph DiStefano By first class mail -
- Quinn, Racusin & Gazzola -
'lcopy 1401 H Street, N.W.
Suite 510 Washington, D.C. 20005 Robert G. Morgan - WC26B By first class mail Licensing Manager 1 copy i
Duke Engineering & Services, Inc.
400 South Tryon Street Charlotte, NC 28201-1004 Marcus A. Rowden By first class mail Fried, Frank, Harris, Shriver 1 copy j
& Jacobsen 1101 Pennsylvania Avenue, N.W.
Suite 900 South Washington, D.C. 20004 Diane Curran By first class mail Harmon Curran & Spielberg Icopy 2001 S St NW Suite 430 Washington, DC 20009 2
. =. -
Ronald Wascom, Deputy Asst. Sec.
By first class mail l
IAuisiana Dept. of Enytl. Quality 1 copy i
Office of Air Quality & Radiation Protection P.O. Box 82135 Baton Rouge, LA 70884-2135 l
J. Michael McGarry, III By first class mail Winston & Strawn 1 copy 1400 L Street, N.W.
Washington, D.C. 20005 Adjudicatory File By first class mail Atomic Safety & Licensing Board Panel I copy U.S. Nuclear Regulatory Commission Washington, D.C. 20555 l
Respectfully submitted l
SIERRA CLUB LEGAL DEFENSE FUND, INC.
400 Magazine Street, Suite 401 l
New Orleans, Louisiana 70130 Telephone: (504) 522-1394
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By:
Nathalie M. Walker Diane Curran l
Harmon, Curran, and Spielberg l
2001 "S" Street N.W., Suite 430 l
Washington, D.C. 20009 (202) 328-3500 i
Attorneys for Intervenor, Citizens Against Nuclear Trash i
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