ML20281A635

State of New York'S Supplemental Comments in Opposition to Holtec'S February 12, 2020 Request for Exemptions

ML20281A635
Person / Time
Site:	Indian Point
Issue date:	10/07/2020
From:	Burianek L, Tallent J, Wistar-Jones C State of NY, Office of the Attorney General
To:	Richard Guzman, Annette Vietti-Cook Office of Nuclear Reactor Regulation, NRC/OCM, NRC/SECY
SECY RAS
References
50-003-LT-3, 50-247-LT-3, 50-286-LT-3, 72-51-LT-2, License Transfer, RAS 55822
Download: ML20281A635 (5)

Text

STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL LETITIA JAMES DIVISION OF SOCIAL JUSTICE ATTORNEY GENERAL ENVIRONMENTAL PROTECTION BUREAU October 7, 2020 Email and U.S. Mail NRC Commissioners c/o Annette L. Vietti-Cook U.S. Nuclear Regulatory Commission Mail Stop 0-16 B33 Washington, DC 20555-0001 Richard V. Guzman Senior Project Manager Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Richard.Guzman@nrc.gov State of New Yorks Supplemental Comments in Opposition to Holtecs Feb-ruary 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 Commissioners and Mr. Guzman:

As you know, the Office of the Attorney General represents the State of New York in the above-referenced Nuclear Regulatory Commission (NRC) license trans-fer proceeding 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 State filed a petition seeking party status and leave to intervene in that proceeding. Additionally, on March 24, 2020, we provided comments to the THE CAPITOL, ALBANY, N.Y. 12224-0341 PHONE (518) 776-2400 FAX (518) 650-9363 WWW.AG.NY.GOV

NRC regarding Holtecs February 12, 2020 request for regulatory exemptions that would allow it to use the Indian Point nuclear decommissioning trusts (NDTs) for non-decommissioning costs, namely, spent fuel management and site restoration.

As explained in the States comments, the exemptions from NRC regulations sought by Holtec to use the ratepayer-funded decommissioning trusts for otherwise prohib-ited activities compounds the financial risks posed by the Holtec plans.

In the wake of NRC Staffs September 22, 2020 government-to-government and public information sessions, it is apparent that NRC Staff intends to approve the license transfer and related exemption request without waiting for the Commis-sion to address the States pending petition. According to NRC Staff, these approv-als may occur as early as November 2020. The State objects to this practice of seg-menting the Commissions regulatory and decisional processes, which is both con-trary to sound administrative practice and harms the public interest. Here in par-ticular, in view of the complexity of the three-reactor Indian Point site and the plants history of significant radiological and other contamination, circumstances warrant deferring NRC Staffs decision on the license transfer application and ex-emption request until after the Commission rules on the States petition to inter-vene.

The exemptions seeking NRC approval to use the NDTs for non-decommis-sioning purposes (e.g. site restoration and spent fuel management) form the lynch-pin of Holtecs multi-faceted decommissioning strategy. Our chief concern is that NRC approval of these exemptions will magnify the States risk exposure in two re-spects. First, Holtec has failed to evince the financial wherewithal necessary to safely and effectively conduct spent fuel management and site restoration absent access to the $2.1B held in the three NDTs. Second, the absence of independent, verifiable financial wherewithal increases the likelihood that Holtec will be unable to secure financial assurances within the time frame and in the amounts necessary to comply with all State statutory and regulatory obligations. Without such assur-ances in place, the State will be unable to fully protect the publics interests in the event Holtec faces financial distress and is forced to seek bankruptcy protection. At minimum, the NRC should itself act to mitigate risk by conditioning any approvals of the license transfer application and exemption request on Holtecs adherence to all federal and State statutory and regulatory obligations, including without limita-tion demonstration of third-party financial assurances satisfactory to the State.

We reiterate our chief concern that NRC approval of the license transfer and exemptions will place the fate of the Indian Point facility, its attendant regulatory obligations, and the $2.1B held in trust in the hands of undercapitalized limited lia-bility shell corporations with no tangible assets independent of the $2.1B trust, and lack of demonstrated decommissioning experience. The State supports the prompt and thorough decommissioning of Indian Point, but Holtecs August 10, 2020 re-sponse to NRC Staffs July 8, 2020 Request for Additional Information did little to 2

assuage the States concerns about Holtecs solvency and capital adequacy. For these reasons, should the NRC decline to wait to approve the pending applications, we urge the NRC to impose conditions on any license transfer or exemption ap-proval. The NRC should constrain its approvals of the license transfer application and exemption request on Holtecs adherence to state and federal law, including without limitation demonstration of third-party financial assurances satisfactory to the State. Our assessment remains that Holtecs plan, as submitted, presents unac-ceptable levels of financial risk to the public interest, including that of the State and the host communities.

Because the NRC is being asked to authorize use of the decommissioning trusts for purposes other than decommissioning the NRC should also direct Holtec to amend the trust agreements to explicitly designate the State as a beneficiary un-der the master trust agreement for each trust. The NRC should require Holtec to amend the trust agreements to require that: (a) no disbursements or payments be made from the trusts unless the trustee has given prior written notice of such dis-bursement or payments to the State, and (b) no such payment or disbursement shall be made if the trustee receives prior written notice of objection from the State. The current trusts afford the NRC these rights, and the State should have the same con-sideration. The Indian Point decommissioning trusts were originally funded by ratepayer contributions required by the New York State Public Service Commission (Units 1 and 2) and supplemented under the stewardship of the New York Power Authority (Unit 3). The State has a compelling interest in Holtecs use and manage-ment of those funds.

What is more, the NRCs outdated decommissioning rules do not make suffi-cient provision for the economic reality of merchant plants that lack parental corpo-rate support. Neither Entergy nor Holtec have offered third-party financial assur-ance. Again, should NRC Staff decline to wait until after a Commission ruling on the States intervention petition, it should also condition any license transfer and exemption approval by requiring Holtec to sequester federal spent fuel settlement monies obtained from U.S. Department of Energy to offset non-decommissioning costs charged to the ratepayer-funded NDTs. This will provide a safeguard for de-commissioning success. Put another way, the NRC should not facilitate Holtecs re-purposing of decommissioning trust monies in exchange for the unfettered windfall of spent fuel cost reimbursement when such costs are being reimbursed by the DOE.

Transfer of the Indian Point licenses from Entergy to Holtec subsidiaries for decommissioning involves nested, closely-held limited liability entities. These Hol-tec subsidiaries will hold the licenses and conduct the decommissioning and have no funding source save for the NDTs. The fact that Holtec intends to simultaneously decommission six power reactors at four separate facilities, including Indian Point, underscores the need for the NRC to insist on a more robust showing that the Hol-tec subsidiaries are financially qualified within the meaning of 10 C.F.R. §§ 50.33 3

and 50.80, and that they will provide adequate decommissioning funding assurance as required under 10 C.F.R. §§ 50.33 and 50.75. We urge the NRC to require heightened financial review and Holtec funding assurances for the pending Indian Point license transfer and exemption request.

Very truly yours, Lisa M. Burianek Joshua M. Tallent Channing Wistar-Jones Assistant Attorneys General Environmental Protection Bureau (518) 776-2423 cc :

Douglas Tifft Regional State Liaison Officer U.S. Nuclear Regulatory Commission Region 1 2100 Renaissance Blvd., Suite 100 King of Prussia, PA 19406-2713 Doug.Tifft@nrc.gov By 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 4

By U.S Mail and electronic mail:

Janice Dean Alyse Peterson NYSERDA Mark D. Sanza Andrew Guglielmi NYSDEC Peter C. Trimarchi Nixon Peabody LLC Counsel for Entergy Susan H. Raimo, Esq.

Counsel for Entergy Services, LLC Eugene Kelly, Esq.

Harris Beach LLC Counsel for Holtec Jason Day Pamela Cowan Holtec International/CDI 5