ML22196A108

Commission Memorandum and Order (CLI-22-08)

ML22196A108
Person / Time
Site:	Palisades, Big Rock Point  File:Consumers Energy icon.png
Issue date:	07/15/2022
From:	Brooke Clark NRC/SECY
To:
SECY RAS
References
50-155-LT-2, 50-255-LT-2, 72-007-LT, 72-043-LT-2, CLI-22-08, License Transfer, RAS 56416
Download: ML22196A108 (141)

Text

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION COMMISSIONERS:

Christopher T. Hanson, Chairman Jeff Baran David A. Wright In the Matter of ENTERGY NUCLEAR OPERATIONS, INC.,

ENTERGY NUCLEAR PALISADES, LLC, HOLTEC INTERNATIONAL, and HOLTEC DECOMMISSIONING INTERNATIONAL, LLC (Palisades Nuclear Plant and Big Rock Point Site)

Docket Nos. --LT-

--LT-

--LT

--LT-CLI--

MEMORANDUM AND ORDER TABLE OF CONTENTS I.

INTRODUCTION................................................................................................................... 1 II.

BACKGROUND..................................................................................................................... 3 A.

The Proposed License Transfer.........................................................................................

B.

Financial Qualifications for License Transfer and the License Transfer Application..........................................................................................................................

1.

Exemption Request...................................................................................................... 11 2.

Big Rock Point.............................................................................................................. 12 C. NRCs Oversight of the Financial Capability of Licensees in Decommissioning..............

III. DISCUSSION...................................................................................................................... 15 A.

Intervention Requirements...............................................................................................

B.

Accuracy of Cost Estimates.............................................................................................

C. Michigan Attorney General Petition to Intervene and Request for a Hearing...................

1.

Michigan Attorney Generals Contention MI-1.............................................................. 19 a.

Earlier Site-Specific Decommissioning Cost Analysis for Palisades.........................

b. Spent Fuel Management Assumptions for Transfer of All Spent Fuel Off of the Site......................................................................................................................

() Assumed Start Date..............................................................................................

() Projected Length of Time for Transferring All Spent Fuel Off-Site.........................

c.

Comparison of the Radiological Decommissioning Cost to the NRCs Minimum Formula.....................................................................................................

() The Minimum Formula Regulations in C.F.R. §.(b)-(c).............................

() Attorney Generals Comparison of HDI Estimate to Minimum Formula................

() Analysis of Arguments...........................................................................................

d.

Contingency Funding................................................................................................

e.

Radioactive Waste Volumes and Waste Shipments.................................................

() Waste Volumes......................................................................................................

() Transportation of Radioactive Waste....................................................................

f.

Unaddressed Risks...................................................................................................

() Delay.....................................................................................................................

() Possibility of Discovering Unknown Contamination; Risk of Radiological Incident..................................................................................................................

() State Standards for Site Restoration.....................................................................

() Repackaging of Spent Nuclear Fuel and Other DOE-Related Claims..................

(a)

Transportation of Storage-Only Fuel Canisters..............................................

(b)

DOE Seeking to Recover Earlier Packaging Costs........................................

(c)

Indefinite Storage............................................................................................

g.

Trust Fund Growth Rate Assumptions......................................................................

h.

Inability to Provide Additional Financial Assurance...................................................

2.

Michigan Attorney Generals Contention MI-2.............................................................. 81 D. Joint Petitioners Petition to Intervene and Request for a Hearing...................................

1. Joint Petitioners Contention 1...................................................................................... 84 a.

NEPA Supplementation Claims and Challenge to Categorical Exclusion.................

b.

Claims Relating to the PSDAR.................................................................................

c.

Remaining Environmental Claims.............................................................................

2.

Joint Petitioners Contention 2...................................................................................... 96 3.

Joint Petitioners Contention 3.................................................................................... 101

a. Repackaging of Storage-Only Fuel Canisters.........................................................

b. Spent Fuel Management Costs..............................................................................

c.

Cooling Time Implications of High-Burnup Fuel.......................................................

() Timeframe for Transfer of High-Burnup Fuel into Dry Cask Storage.....................

() Timeframe for Transfer of High-Burnup Fuel Away from Site...............................

d. Remaining Miscellaneous Claims............................................................................

4.

Applicants Motions to Strike Portions of Joint Petitioners Reply and to Strike Subsequent Responses to Applicants Motion................................................ 118 E.

ELPC Petition to Intervene and Request for a Hearing...................................................

1. ELPCs Contention 1.................................................................................................. 120

2. ELPCs Contention 2.................................................................................................. 124

3. ELPCs Contention 3.................................................................................................. 126 F.

Mr. Mark Muhichs Petition to Intervene and Request for a Hearing...............................

G. Procedural Issues Associated with Subpart M Proceeding............................................

IV. CONCLUSION.................................................................................................................. 134

I. INTRODUCTION This proceeding concerns a license transfer application involving () the renewed facility operating license for the Palisades Nuclear Plant (Palisades) and the general license for the Palisades Independent Spent Fuel Storage Installation (ISFSI); and () the facility operating license for Big Rock Point and the general license for the Big Rock Point ISFSI. Entergy Nuclear Operations, Inc. (ENOI), Entergy Nuclear Palisades, LLC (ENP), Holtec International, and Holtec Decommissioning International, LLC (HDI) (collectively, the applicants) seek NRC consent to the indirect transfer of control of the licenses to Holtec International and to the transfer of operating authority to HDI to conduct licensed activities at the sites.1 They also seek NRC approval of conforming administrative license amendments to reflect the requested transfers.2 In December, the NRC staff issued an order approving both the transfer of the licenses and draft conforming license amendments.3 Concurrently, the staff also approved a related regulatory exemption requested by HDI in support of the license transfer application; the approved execmption would only apply to HDI if and when the proposed license transfer transaction is consummated.4 NRC regulations anticipate that the staff may complete its 1 See Palisades Nuclear Plant and Big Rock Point Plant Consideration of Approval of Transfer of Control of Licenses and Conforming Amendments, Fed. Reg. (Feb., ) (Hearing Opportunity Notice); Application for Order Consenting to Transfers of Control of Licenses and Approving Conforming License Amendments, at (Application), attached (Encl. ) to Letter from A. Christopher Bakken III, President and Chief Executive Officer, Entergy, to NRC Document Control Desk (Dec., ) (Application Cover Letter). The cover letter, application, and associated enclosures are available together at ADAMS accession no. MLA.

2 See Application at, and Attachments A and B to the Application (identifying proposed changes to the Palisades and Big Rock Point licenses, respectively); Application Cover Letter at -.

3 Order Approving Transfer of Licenses and Draft Conforming Administrative Amendments (Dec.

, ) (MLA) (Order). The license amendments would be issued and made effective at the time the proposed transfer actions are completed. Id. at.

4 Exemption (Dec., ) (MLA), at.

review of a license transfer application before an adjudicatory proceeding (if applicable) has concluded. The staff is expected, consistent with its findings in its Safety Evaluation Report (SER), to promptly issue approval or denial of license transfer requestsnotwithstanding a pending adjudicatory hearing.5 But while the staffs review and the Commissions adjudicatory review may overlap, they are separate reviews, and both must be completed and satisfied before a license transfer approval can be considered final. The application will lack the agencys final approval until and unless the Commission concludes the adjudication in the Applicants favor.6 While license transfer applicants may act in reliance on a staff order approving an application, we long have emphasized that applicants do so at their own risk should the Commission later determine[] that the intervenors have raised valid objections to the license transfer application.7 The staffs order approving the license transfer therefore explicitly remains subject to our authority to rescind, modify, or condition the approved transfer based on the outcome of this adjudicatory proceeding.8 We received a petition for leave to intervene and request for a hearing from the following petitioners: () the Michigan Attorney General; () Beyond Nuclear, Michigan Safe Energy Future, and Dont Waste Michigan (collectively, Joint Petitioners); () the Environmental Law &

5 See C.F.R. §.(a).

6 See Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station), CLI--, NRC,

() (quoting Vermont Yankee Nuclear Power Corp. and AmerGen Vermont, LLC (Vermont Yankee Nuclear Power Station), CLI--, NRC, ()).

7 See id. (quoting Vermont Yankee, CLI--, NRC at ; see also Power Authority of the State of New York (James A. FitzPatrick Nuclear Power Plant; Indian Point, Unit ), CLI--,

NRC, n. () (noting that notwithstanding the staffs orders approving the license transfers and the applicants completion of the sale, the Commission could modify the license or disapprove the transfers and require the Applicants to return the plant ownership to the status quo ante). The license transfer transaction closed on June,. See Notification (June, ).

8 See Order at.

Policy Center (ELPC); and () Mr. Mark Muhich.9 For the reasons outlined below, we grant the Michigan Attorney Generals request for an adjudicatory hearing and admit limited issues pertaining to the Attorney Generals challenge to the proposed transferees financial qualifications. We deny Joint Petitioners, ELPCs, and Mr. Muhichs petitions for hearing.

II.

BACKGROUND A.

The Proposed License Transfer Palisades Nuclear Plant is a single unit pressurized water reactor located in Covert, Michigan.10 An ISFSI licensed generally under C.F.R. Part is located on the Palisades site.11 Big Rock Point is located in Charlevoix County, Michigan, about miles west of Petoskey. The Big Rock Point nuclear power plant was a boiling water reactor that permanently shut down power operations on August,, and has since been dismantled and decommissioned. All spent nuclear fuel at Big Rock Point has been transferred to a generally licensed ISFSI that remains on the site. Except for the land associated with the ISFSI installation and a surrounding parcel of non-impacted land of approximately acres, the NRC in released the Big Rock Point site for unrestricted use and removed the released portions of the site from the Part license.12 9 See Petition of the Michigan Attorney General for Leave to Intervene and for a Hearing (Feb., ) (AG Petition); Petition of Beyond Nuclear, Michigan Safe Energy Future and Dont Waste Michigan for Leave to Intervene, and Request for an Adjudicatory Hearing (Feb., ) (Joint Petitioners Petition); The Environmental Law & Policy Center Petition to Intervene and Hearing Request (Feb., ) (ELPC Petition); Petition of Mark Muhich for Leave to Intervene and for a Hearing Regarding Transfer of NRC Operating License and Decommissioning of Palisades Nuclear Plant, Covert MI (Feb., ) (Muhich Petition).

10 Palisades permanently ceased operations in May.

11 See C.F.R. §. (general license authorizing the storage of spent fuel at an ISFSI located at a power reactor site licensed under part or part ).

12 See Letter from Keith I. McConnell, NRC, to Kurt M. Haas, Big Rock Restoration Project (Jan., ), at (ML).

ENP is the licensed owner of both Palisades and Big Rock Point.13 Under the proposed license transfers, the indirect control of Palisades and Big Rock Point would transfer to Holtec International under the terms of a Membership Interest Purchase and Sale Agreement. Just prior to the proposed transaction, Entergy would transfer all of the assets and liabilities of ENP to a new entity that would become Holtec Palisades, LLC (Holtec Palisades).14 Upon the closing of the proposed license transfers, Holtec Palisades would be the new licensed owner of Palisades and Big Rock Point. Except for a few excluded assets, Holtec Palisades would own all assets and real estate associated with Palisades and Big Rock Point, including the Palisades nuclear decommissioning trust, and it would hold title to the spent nuclear fuel at both sites.15 Holtec Palisades would have the rights and obligations under the Standard Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste (Standard Contract); the previous owners of Palisades and Big Rock Point in entered into the Standard Contract with the United States of America, as represented by the U.S. Department of Energy (DOE). 16 Through litigation or settlement, Holtec Palisades expects to recover from DOE the spent nuclear fuel management costs that it would incur due to DOEs breach of its contractual obligation to accept and dispose of the Palisades and Big Rock Point spent nuclear fuel. Under the proposed transfer, Holtec Palisades would be responsible for the costs of possessing, maintaining, and decommissioning the two sites, including all spent fuel management costs.

13 Because the license transfers lack final approval, we refer in this decision to the license transfers as they were described and proposed in the application.

14 See Application Cover Letter at. As detailed further in the application, Nuclear Asset Management Company, LLC (NAMCo), a wholly owned subsidiary of Holtec International, would acquire the equity interests in either the new entity Holtec Palisades or in the parent company owner of Holtec Palisades; in either case, NAMCo ultimately would become the direct parent company of Holtec Palisades. See id.; Application at. A redacted version of the purchase and sale agreement is included in the application in Attachment C.

15 See Application at & n..

16 Id. at.

ENOI is the licensed operator of Palisades and Big Rock Point. Pursuant to the proposed transfer, operating authority to conduct licensed activities at Palisades and Big Rock Point would transfer from ENOI to HDI, an indirect wholly owned subsidiary of Holtec International. Holtec International created HDI to assume the licensed operator responsibilities and to decommission Holtec-owned nuclear power plants.17 In its application, HDI stated that it intended to contract with Comprehensive Decommissioning International, LLC (CDI) to perform the day-to-day activities at Palisades and Big Rock Point, including spent fuel management and decommissioning activities.18 In a supplement to the application submitted in January,

HDI informed the NRC that HDI no longer plans to contract with CDI to serve as the decommissioning general contractor for Palisades.19 In lieu of this arrangement, HDI is absorbing CDIs resources and will directly employ site personnel to perform the scope of work previously planned to be executed by CDI.20 Under the terms of the purchase and sale agreement, the proposed transfer would not close until after ENOI has docketed its certifications of permanent cessation of operations and of permanent removal of fuel from the Palisades reactor vessel.21 Because the proposed transfers would only occur after the Palisades reactor has permanently ceased operations, the transferred licenses would not authorize power reactor operations. Authorized activities would 17 Id. at 18 Id. at. Holtec International (through its subsidiary HDI), and SNC-Lavalin Group (through its subsidiary Kentz USA, Inc.), formed CDI to serve as the decommissioning general contractor for Holtec-owned nuclear power plants. Id.; Application Cover Letter at -.

19 Notice to the Commission (Jan., ), Attach., Supplement to Application for Order Consenting to Transfers of Control of Licenses and Approving Conforming License Amendments, at - (MLB) (Application Supplement).

20 Application Supplement at.

21 Application Cover Letter at.

include possessing, maintaining, decontaminating, and decommissioning the sites, including managing the spent fuel until all fuel has been transported offsite for disposal.

In parallel with the license transfer application, HDI separately submitted to the NRC a Post-Shutdown Decommissioning Activities Report (PSDAR) outlining the planned activities and schedule for decommissioning the Palisades Nuclear Plant.22 The PSDAR includes a site-specific decommissioning cost estimate for Palisades.23 HDI also indicates a project goal to complete decommissioning and final license termination within approximately years following the license transfers and sale closure.24 After sale closure, HDI expects within three years to complete the transfer of all Palisades spent nuclear fuel into long-term dry fuel storage at the ISFSI.25 Once all spent fuel has been placed in dry storage, HDI plans to place the plant into a safe dormant condition from through November, after which HDI would begin to dismantle and decontaminate the reactor plant structures and systems.26 Following all radiological decommissioning and 22 Palisades Nuclear Plant Post-Shutdown Decommissioning Activities Report, attached to Letter from Andrea L. Sterdis, HDI, to NRC Document Control Desk (Dec., )

(MLA) (PSDAR). Prior to or within years following permanent cessation of operations, a licensee must submit a PSDAR to the NRC, with a copy to the affected state(s).

See C.F.R. §.(a)()(i). HDIs PSDAR for Palisades would become effective only upon sale closure and transfer of the licenses. See Application Cover Letter at. To the extent that information in the PSDAR bears on the staffs review of the license transfer application (e.g.,

cost estimates and related decommissioning schedule relevant to HDIs financial qualifications),

the NRC staff considers the PSDAR a supplement to the application. See Hearing Opportunity Notice, Fed. Reg. at.

23 See Palisades Nuclear Plant Site-Specific Decommissioning Cost Estimate (DCE), attached (Encl. ) to PSDAR. NRC regulations require a licensee to include in the PSDAR a site-specific decommissioning cost estimate. C.F.R. §.(a)()(i).

24 PSDAR at.

25 Id. at.

26 See id. at, ; Application, Attach. E, Schedule & Financial Information for Decommissioning, at.

non-radiological site restoration (including of the ISFSI), HDI expects final license termination and release of the Palisades site for unrestricted use by the end of.27 B.

Financial Qualifications for License Transfer and the License Transfer Application No license granted under the Atomic Energy Act (AEA) may be transferred unless the NRC consents in writing.28 The NRC will approve a license transfer application if it determines that the proposed transferee is qualified to hold the license and that the transfer of the license is otherwise consistent with applicable law, regulations, and orders.29 The NRC review of a license transfer application is limited to specific matters and is largely focused on the proposed transferees financial and technical qualifications.30 The application must contain sufficient information to demonstrate that the applicant has the financial qualifications to carry out the activities for which the license is sought.31 The application also must provide reasonable assurance that funds will be available to decommission the facility, including any ISFSI.32 NRC regulations outline various acceptable methods of providing financial assurance of decommissioning funding.33 HDI, the proposed new operator, bases its financial qualifications on that of the proposed new owner, Holtec Palisades. The application states that Holtec Palisades will commit, under a 27 See PSDAR at, -; Application Cover Letter at.

28 See AEA §, U.S.C. § ; see also C.F.R. §§.(a),.(a) (implementing the AEA requirement as to power reactor and ISFSI licenses, respectively).

29 C.F.R. §.(c).

30 See id. §.(b)()(i) (referencing C.F.R. §§.,.).

31 See id. §.(f). Because the proposed transfer would not occur prior to permanent cessation of reactor operations at Palisades, the applicants need not demonstrate reasonable assurance of obtaining the funds necessary to cover estimated power reactor operations. See id. §.(f)().

32 See id. §§.(k)(),.(b)()(i),.(b).

33 See id. §§.(e)() (reactor decommissioning),.(e) (ISFSI decommissioning).

Decommissioning Operator Services Agreement with HDI, to fund without limit all of HDIs costs to conduct activities under the Palisades and Big Rock Point licenses, including all decommissioning and spent fuel management costs. 34 Holtec Palisades in turn bases its financial assurance of adequate decommissioning funding on the prepayment method.35 Prepayment refers to prepaid funds deposited in a segregated account outside of the licensees administrative control in an amount sufficient to pay decommissioning costs at the time permanent termination of operations is expected.36 Holtec Palisades would own the assets in the Palisades nuclear decommissioning trust upon closure of the sale and transfer of the licenses. The application states that the Palisades nuclear decommissioning trust will be sufficient to pay for all Palisades site radiological decommissioning costs, including ISFSI decommissioning.

HDI estimates that the cost of radiological decommissioning for Palisades (including the ISFSI) will be $,,.37 The application states that the decommissioning trust fund contained approximately $ million as of December,, and that at least this amount would remain in the trust fund at closing.38 The application therefore states that Holtec Palisades satisfies the requirement to show financial assurance of decommissioning funding 34 See Application at. A copy of the form of the operator services agreement is enclosed in Attachment F of the application. We refer to the proposed transferees, Holtec Palisades (name of the owner following the proposed transfer) and HDI, together as Holtec.

35 Id. at.

36 See C.F.R. §.(e)()(i).

37 See Application, Attach. E at -. HDIs cost estimates referenced in this decision are in dollars.

38 See Application at.

based on the decommissioning trust and use of the prepayment method of financial assurance.39 NRC regulations allow a licensee that has prepaid decommissioning funds based on a site-specific decommissioning cost estimate to take credit for projected earnings on the prepaid accounts fundsup to a % annual real rate of return, through the decommissioning period, including periods of safe storage, final dismantlement, and license termination.40 Taking credit for a % annual real rate of earnings on the trust fund, HDI projects that the decommissioning trust fund will be sufficient to cover not only decommissioning but also spent fuel management and non-radiological site restoration expenses at Palisades.

For spent fuel management, HDI estimates total costs at Palisades will be about $

million, and it plans to fund all spent fuel management costs following license transfer with the decommissioning trust.41 The application states that the projected sufficiency of the Palisades trust provides funding assurance for spent fuel management.42 In support, the application includes a cash flow analysis for the years through, the year Holtec expects final license termination to occur.43 The cash flow analysis begins with the December, trust fund value of approximately $ million, which Holtec states is a conservative assumption for the funds opening value at post-sale closure. The analysis also assumes HDIs estimated costs for decommissioning ($,,), spent fuel management ($,,), and site restoration 39 Id. at -.

40 See C.F.R. §§.(e)()(i),.(a)()(vi).

41 See Application at and Attach. E at.

42 See id. at.

43 See id., Attach. E at, Palisades Nuclear Generating Station Decommissioning Cash Flow Analysis (Cash Flow Analysis).

($,,). For each year, the analysis identifies the projected () trust fund withdrawals for radiological decommissioning, spent fuel management, and site restoration costs; () trust fund interest earnings based on a % annual real rate of return; and () year-end trust fund balance.

The analysis projects a trust fund balance of $,, remaining at license termination in The application states that this projected adequacy of the Palisades trust fund provides reasonable assurance of decommissioning and spent fuel management funding. The application moreover states that if additional funding were to be necessary to cover the decommissioning and spent fuel management costs, [r]eimbursement of spent fuel management expenses by DOE, which is not credited in the cash flow analysis... would provide a substantial source of additional funds that could be used to adjust funding.44 Based on the cash flow analysis projections, Holtec also expects to use the trust fund to pay for the approximately $ million in estimated site restoration costs.45 Site restoration involves the non-radiological clean up of sites; it also would include any radiological decontamination beyond NRC-mandated standards. Activities that do not involve the removal of residual radioactivity necessary to terminate the NRC license are outside the scope of NRC regulation.46 Site restoration is a state-regulated activity, governed by non-NRC federal standards. The NRCs license transfer regulations do not require an applicant to demonstrate financial qualifications to cover site restoration costs. Site restoration costs nonetheless are relevant to this proceeding because Holtec intends to pay for those costs with the Palisades decommissioning trust, on which Holtec relies for its showing of financial qualifications.

44 See Application at.

45 See id.

46 See Standard Format and Content of Decommissioning Cost Estimates for Nuclear Power Reactors, Regulatory Guide. (Feb. ), at (ML) (Reg. Guide.).

. Exemption Request The applicants acknowledge that to use the decommissioning trust for purposes other than radiological decommissioning would require an exemption from C.F.R.

§.(a)()(i)(A). Section.(a)()(i)(A) allows withdrawals from the trust fund to pay expenses for legitimate decommissioning activities, consistent with the NRCs definition of decommissioning.47 Spent fuel management and non-radiological site restoration activities do not fall within the NRCs definition of decommissioning.48 Therefore, concurrent with the application, HDI submitted a request for exemptions to allow it to use the trust fund for spent fuel management and site restoration expenses at Palisades.49 The request includes and relies on the same cash flow analysis provided in the license transfer application.50 HDI states that the analysis demonstrates that the trust fund contains more than adequate funds to cover the estimated radiological decommissioning costs, as well as spent fuel management and site restoration costs for Palisades.51 47 See C.F.R. §.(a)()(i)(A) (referencing the NRCs definition of decommissioning in

§.).

48 As defined in C.F.R. §., to decommission means to remove a facility or site safely from service and reduce residual radioactivity to a level that permits - () Release of the property for unrestricted use and termination of the license; or () Release of the property under restricted conditions and termination of the license.

49 See Palisades Nuclear Plant HDI Request for Exemptions from CFR.(a)()(i)(A) and CFR.(h)()(iv) (Exemption Request), enclosed with Letter from Andrea Sterdis, HDI, to NRC Document Control Desk (Dec., ) (Exemption Request Cover Letter). The exemption request and cover letter are available together at MLA.

50 See Exemption Request at, tbl..

51 Id. at. In its request, HDI also seeks an exemption from C.F.R. §.(h)()(iv), which, with a few exceptions, similarly limits withdrawals from the decommissioning trust fund to decommissioning expenses.

A request for an exemption is not among the listed actions subject to a hearing opportunity under section of the AEA.52 But when a requested exemption raises questions that are material to a proposed licensing actiondirectly bears on whether the proposed action should be granteda petitioner in an adjudicatory proceeding on the licensing action may raise arguments relating to the exemption request.53 Holtec relies on the requested exemption from section.(a)()(i)(A) for its demonstration of financial qualifications; therefore the exemption request and license transfer application are intertwined. To the extent that the proposed exemptions bear on Holtecs showing of financial qualifications for the license transfer, arguments relating to the requested exemptions fall within the scope of this proceeding.54

. Big Rock Point The application also addresses Holtecs financial qualifications to fund activities at Big Rock Point. The estimated cost to decommission the Big Rock Point ISFSI is $,,.55 Holtec states that it will provide financial assurance for decommissioning by the prepayment method and will meet the Part requirements for decommissioning funding.56 52 See AEA § (a)()(A), U.S.C. § (a)()(A).

53 See Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc. (Vermont Yankee Nuclear Power Station), CLI--, NRC, () (citing Private Fuel Storage, L.L.C. (Independent Spent Fuel Storage Installation), CLI--, NRC, ()).

54 In two other recent proceedings involving similar exemptions, we likewise found that arguments addressing the potential impact of the exemption on the applicants financial qualifications fell within the scope of the license transfer proceeding. See Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Station, Units,, and and ISFSI), CLI--,

NRC, (); Entergy Nuclear Operations, Inc. (Pilgrim Nuclear Power Station),

CLI--, NRC, ().

55 See Application, Attach. E at.

56 Application at (referencing C.F.R. §.(b), (c), (e)).

Based on ENOIs actual current operating costs, Holtec estimates the annual cost of operating the Big Rock Point ISFSI to be $,, (in dollars).57 Holtec intends to provide a dedicated fund that will continually contain one years worth of estimated operating costs for the ISFSI. The application further states that Holtec will provide a parent support agreement to continually maintain the dedicated fund with one years worth of estimated operating costs. The dedicated fund and associated parent support agreement would be established at or before closing and provided to the NRC.58 Based on these assurances, which are described as a regulatory commitment, the application states that Holtec Palisades will be financially qualified to be the owner of Big Rock Point.59 The application states that HDI will be financially qualified to be the licensed operator at Big Rock Point because Holtec Palisades under the terms of its operating agreement with HDIwill be required to pay for HDIs costs of operation at Palisades and Big Rock Point.60 C.

NRCs Oversight of the Financial Capability of Licensees in Decommissioning The license transfer proceeding provides a threshold screening of applicants overall technical and financial qualifications to become the holders of specific licenses. The review helps ensure that a license is not transferred to an entity lacking the financial capability to carry out the necessary activities under the license. But the NRCs oversight of financial capability to decommission and manage spent fuel does not end with the license transfer review. All licensees in decommissioning must show annually that they continue to have adequate funding for decommissioning and spent fuel management. As we stated recently in Pilgrim, the NRC assesses license transfer applicants financial qualifications in light of the multiple regulatory 57 Application, Attach. E at.

58 Application at.

59 Id.

60 Id.

requirements designed to ensure that funding remains sufficient until no longer needed.61 The NRC will continue to verify annually that licensees in decommissioning maintain adequate funding to cover both spent fuel management and decommissioning.

For instance, a licensee that has submitted a site-specific decommissioning cost estimate must annually provide a decommissioning funding status report. The report must include information current through the end of the previous calendar year, covering () the amount spent on decommissioning, both cumulatively and over the previous calendar year;

() the difference between the predicted and actual costs for the work performed the previous year; () the remaining balance in the trust fund; and () an estimate of the costs projected to complete the decommissioning.62 If the remaining decommissioning funds, together with the projected earnings on those funds (calculated at no greater than a % real rate of return), and any additional amount provided by another financial assurance method, are not sufficient to cover the estimated cost to complete decommissioning, the licensee must include in the status report additional financial assurance to cover the estimated remaining costs.63 Similar status reports monitor licensees spent fuel management funding.64 If the available spent fuel management funding is insufficient to cover the projected costs, the report must include a plan to obtain the additional funds to cover the costs.65 In sum, while the license transfer financial qualification review constitutes an important screening review of an applicants 61 See Pilgrim, CLI--, NRC at.

62 See C.F.R. §.(a)()(v).

63 Id. §.(a)()(vi).

64 See id. §.(a)()(vii)(A) - (B).

65 See id. §.(a)()(vii)(C). Beyond the annual status reports, other NRC requirements also help to ensure that decommissioning funding remains adequate. For example, before it can perform any decommissioning activity that would significantly increase the decommissioning cost beyond that estimated in its site-specific decommissioning estimate, a licensee must first notify the NRC, with a copy to the affected state(s). See id. §.(a)().

qualifications to hold an NRC license, a licensee in decommissioning must continue to show every year that adequate funding for decommissioning and spent fuel management activities remains. This NRC monitoring of financial capability continues until all spent fuel has been removed from the site and the license has been terminated.

III.

DISCUSSION D.

Intervention Requirements To gain admission as a party in an NRC licensing proceeding, a petitioner must show standing and propose at least one admissible contention.66 For standing, the request for hearing must address () the nature of the petitioners right under the AEA to be made a party to the proceeding; () the nature and extent of the petitioners property, financial, or other interest in the proceeding; and () the possible effect that any decision or order issued in the proceeding may have on the petitioners interest.67 In evaluating whether a petitioner has established standing, the Commission has long looked for guidance to judicial concepts of standing, which require a party to claim a concrete and particularized injury (actual or threatened) that is fairly traceable to the challenged action and is likely to be redressed by a favorable decision in the proceeding.68 An organization that seeks to establish representational standing must demonstrate how at least one of its members may be affected by the challenged licensing action and would have standing in his or her own right.69 The organization must identify that member by name and 66 Id. §.(a), (d), (f).

67 See id. §.(d)()(ii)-(iv); see also Hearing Opportunity Notice, Fed. Reg. at.

68 See, e.g., USEC, Inc. (American Centrifuge Plant), CLI--, NRC, ();

Commonwealth Edison Co. (Zion Nuclear Power Station, Units and ), CLI--, NRC,

(); Georgia Institute of Technology (Georgia Tech Research Reactor, Atlanta, Georgia),

CLI--, NRC, ().

69 See, e.g., Vermont Yankee Nuclear Power Corp. and AmerGen Vermont, LLC (Vermont Yankee Nuclear Power Station), CLI--, NRC, ().

address, and must demonstrate, preferably by affidavit, that the organization is authorized to request a hearing on behalf of that member.70 NRC regulations in C.F.R. §.(f) specify the contention admissibility requirements.

For each contention, a petitioner must explain the contentions basis and provide supporting facts or expert opinion on which the petitioner intends to rely in litigating the contention. To be admissible, a contention must fall within the scope of the proceeding and be material to the findings that the NRC must make for the proposed licensing action. The petitioner must identify the specific portions of the application that the petitioner disputes along with the supporting reasons for each dispute; or, if a petitioner claims that an application fails altogether to contain information required by law, the petitioner must identify each failure and provide supporting reasons for the petitioners belief. These requirements help ensure that the NRC institutes adjudicatory hearings only for issues that are supported by facts or expert opinion and that identify a dispute with the application on a question material to the NRCs decision.

E.

Accuracy of Cost Estimates Petitioners in this proceeding raise numerous challenges to the applicants site-specific cost estimates for Palisades. Several factors guide our consideration of these challenges.

First, as we recently stated, at this early stage in the decommissioning process cost estimates are necessarily uncertain.71 And for Palisades, not only has decommissioning not yet begun, but Holtec plans to begin major decommissioning activities in November, following a decade of dormancy. We anticipate that some of the current itemized costs for decommissioning work projected for the years and beyond may be updated. NRC guidance on site-specific decommissioning cost estimates indeed instructs licensees to update 70 See, e.g., id.

71 See Pilgrim, CLI--, NRC at.

their site-specific decommissioning estimates at least every five years, and more frequently if new information warrants.72 Further, in license transfer adjudications we long have found financial assurance to be acceptable if it is based on plausible assumptions and forecasts, even if the possibility is not insignificant that things will turn out less favorably than expected.73 We recognize that where much uncertainty still exists for financial predictions, a range of potential differing estimates and outcomes may be plausible, although some may be notably more or less conservative than others. For a demonstration of reasonable assurance of financial qualification, we do not demand the most conservative forecasts but will accept plausible forecasts.

We also have emphasized that the cash flow analysis in a license transfer application reflects a snapshot in time.74 Actual rates of return on the decommissioning trust fund are going to fluctuate above or below the projected, regulation-based annual real rate of %. Cost expectations may need to be refined as spent fuel management and decommissioning activities progress and actual costs, site conditions, and effectiveness of decommissioning strategies become better known. The funding picture may change, but that is why the NRC continues to oversee the status of licensees funding until license termination.

Given the uncertainty of long-term cost predictions, the expectation that some estimated costs and gains may be under or overestimated, and the NRCs continued monitoring of the financial status of licensees in decommissioning, it is not the purpose of the license transfer proceeding to investigate and approve each of the numerous line-items of a site-specific 72 See Assuring the Availability of Funds for Decommissioning Nuclear Reactors, Regulatory Guide., rev. (Oct. ), at (ML) (Reg. Guide.) (the site-specific decommissioning cost estimate should be periodically reviewed and adjusted during both operation and storage periods, no less frequently than once every five years).

73 See Pilgrim, CLI--, NRC at (quoting North Atlantic Energy Service Corp.

(Seabrook Station, Unit ), CLI--, NRC, ()).

74 See id. at.

decommissioning cost estimate. And it will always be possible to suggest additional reasonable costs that could have been included in these estimates. The question is not whether cost estimates can be refined to be more accurate and comprehensive, but whether a material question has been raised about the overall financial qualification of the applicant. We therefore will admit for hearing only those adequately supported assertions that a transfer applicants financial assumptions and forecasts are implausible or unrealistic in a way that is material to our assessment of reasonable assurance.75 F.

Michigan Attorney General Petition to Intervene and Request for a Hearing Both Palisades and Big Rock Point are located within the boundaries of the state of Michigan. Under our regulations, therefore, the Attorney General of Michigan need not make any further demonstration of standing to intervene, which is uncontested.76 The Attorney General proffers two contentions challenging the application. In the first contention, the Attorney General challenges cost estimates and other assumptions underlying the applicants financial qualifications. In the second contention, the Attorney General claims that Holtec impermissibly assumes that it will receive an exemption. We admit four issues raised in Contention MI-. We admit the Attorney Generals challenge to () the applicants estimated -year timeframe for the removal by DOE of all of the spent fuel at Palisades; () the reasonableness of the site-specific decommissioning cost estimate falling well below the minimum formula amount; () the %

contingency allowance allocated to the radiological decommissioning, spent fuel management, and site restoration cost estimates; and () the applicants description of their planned means to adjust funding if necessary to complete decommissioning and terminate the license.

75 Id. at.

76 See C.F.R. §.(h); Applicants Answer Opposing the Michigan Attorney Generals Petition for Leave to Intervene and Request for a Hearing (Mar., ), at (Applicants Answer to AG); AG Petition at -.

Michigan Attorney Generals Contention MI-In Contention MI-, the Attorney General argues that Holtec failed to show financial qualification for the license transfers because it did not provide adequate decommissioning financial assurance and adequate funding for spent fuel management.77 The Attorney General asserts that implausible assumptions underlie Holtecs cost estimates, and therefore that the estimated costs understate what will be the actual decommissioning costs; the decommissioning cost estimate is unreasonably low; and Holtec failed to demonstrate that it has sufficient funding to use the trust fund for purposes other than decommissioning.78 As a core concern, the Attorney General questions whether HDI and Holtec Palisades, limited liability entities... with no outside source of revenue, would be able cover a potential funding shortfall.79 More specifically, the Attorney General claims that the application fails to demonstrate that Holtec and its associated limited liability companies are corporate entities with access to the financial resources necessary to procure additional financial assurance, if neededa demonstration that the Attorney General asserts must be made nownot at some indeterminate point in the future when exemptions have been granted and the trusts run short of funds.80 The Attorney General states that because Holtecs decommissioning financial assurance representations rely on Holtecs site-specific cost estimates for decommissioning, spent fuel management, and site restoration, the accuracy of these cost estimates directly bears on whether Holtec Palisades and HDI are financially qualified to decommission Palisades. The Attorney General in Contention MI-challenges these cost estimates.

77 See AG Petition at.

78 See id. at -.

79 See id. at.

80 See id. at.

a.

Earlier Site-Specific Decommissioning Cost Analysis for Palisades To support the claim that HDIs overall cost estimates are implausible and therefore unreasonable, the Attorney General offers a cost comparison to a previous site-specific decommissioning cost analysis for Palisades. TLG Services, Inc., a company that provides financial decommissioning services, prepared the earlier cost study dated March for previous Palisades licensees Nuclear Management Company, LLC, and Consumers Energy Company. Consumers Energy submitted the cost study to the Michigan Public Service Commission to support an application for an adjustment of ratepayer surcharges for decommissioning costs.81 The Attorney General notes that Nuclear Management Company also provided the cost estimate conclusions to the NRC in as the preliminary decommissioning cost estimate for Palisades.82 The Attorney General states that the HDI estimates assume a -year dormancy period while the TLG estimates assume a SAFSTOR decommissioning method using a.-year storage period. The study provides cost estimates in dollars.

81 See AG Petition at n. (citing In the Matter of the Application of Consumers Energy Company for Adjustment of Its Surcharges for Nuclear Power Plant Decommissioning for the Palisades Nuclear Plant, Michigan Public Service Commission, Case No. U-, Hearing Date Mar.,, Ex. A-, Settlement Agreement, available at https://mi-psc.force.com/sfc/servlet.shepherd/version/download/twyAAA, with the following cited attachments: () Ex. A-, Consumers Energy Company Report on the Adequacy of the Existing Provision for Nuclear Plant Decommissioning (Mar. ) (MPSC Case, Ex. A-,

Consumers Energy Company Report to MPSC); and () App. B to Consumers Energy Company Report to MPSC, TLGs Site-Specific Decommissioning Cost Study Executive Summary and Table (Mar. ) (MPSC Case, TLG Services Cost Study Excerpts)).

82 See AG Petition at n. (citing Letter from Edward J. Weinkam, Nuclear Management Company, LLC, to NRC Document Control Desk, Irradiated Fuel Management Plan and Preliminary Decommissioning Cost Estimates for Palisades Nuclear Plant (Apr., )

(Palisades IFMP and PDCE) (ML)). The NRC requires power reactor licensees to submit a preliminary decommissioning cost estimate about five years prior to permanent cessation of operations. See C.F.R. §.(f)(). Following NRC approval of the Palisades operating license renewal application, Nuclear Management Company withdrew the preliminary decommissioning cost estimate as no longer required. See Letter from Edward J. Weinkam, Nuclear Management Company, LLC, to NRC Document Control Desk (Feb., )

(ML).

The Attorney General contrasts the earlier-projected costs (in dollars) of approximately $. million for license termination, $. million for spent fuel management, and $. million for site restoration, with HDIs lower projected costs (in dollars) of approximately $. million for license termination, $. million for spent fuel management, and $. million for site restoration. If escalated to dollars, the Attorney General claims that the TLG Services estimates would be about $. million for license termination,

$. million for spent fuel management, and $. million for site restoration.83 Compared to the earlier cost estimates, the Attorney General claims that HDIs estimates reflect a %

reduction in the projected overall costs for Palisades.

Further, the Attorney General claims that no explanation has been provided to support this cost reduction, and that HDIs cost estimate lacks sufficient detail... for an independent analysis of any factors that could support this % reduction in estimated costs.84 The Attorney General acknowledges one obvious difference between the two cost analyses: HDI estimates

$. million for low-level radioactive waste disposal, while the study estimated $.

million in dollars ($. million in dollars) for low-level waste disposal.85 But the Attorney General states that this $. million difference (in dollars) in the low-level waste burial costs does not explain the $ million total decrease in estimated license termination costs (in dollars) between the two cost studies.

The applicants respond that new methodologies developed since the earlier study have improved efficiencies, reduced labor, and reduced the volume of low-level waste requiring disposal. They state that such changes would undermine a direct comparison between new 83 See AG Petition at & n. (using the Consumers Price Index for All Urban Consumers, which the Attorney General states averaged just over % a year from to ).

84 See id. at.

85 See AG Petition, Attach., Declaration of Nicholas J. Capik," at n. (Capik Decl.).

and old decommissioning cost estimates and render it a long and ultimately fruitless effort.86 They also state that the storage period in the estimate is slightly longer, and assumed that spent fuel would remain in the pools for an eight-year cooling period, resulting in considerably greater cost during the dormancy period.87 The applicants further state that that the low-level waste disposal market has changed, and further, that HDI entered into a fleetwide contract with Waste Control Specialists, LLC, for disposal of low-level radioactive waste at the WCS facility in Andrews County, Texas, which started operating in. They also state that they incorporated subcontractor estimates for reactor segmentation and waste removal. And they state that their cost estimates are based on a fleet model providing greater efficiency, shared experience, and shared corporate support.88 Although not recent, the study is a decommissioning cost study for Palisades, and we are not aware of a more recent site-specific cost estimate that was provided to the NRC.

We also note that HDI in its cost estimate states that for reactor structures, small components, and equipment such as piping, pumps, and tanks, it calculated the decommissioning work durations and cost based on a review of previous Palisades decommissioning cost analyses together with other factors.89 The study therefore at a minimum provides a Palisades-based data point for comparison on costs and provides facility-specific information.

But while we find the study relevant, the Attorney Generals focus on the two studies different bottom-line cost conclusions does not by itself raise a genuine dispute with the application. First, HDI had no obligation in the application or the cost estimate to compare its results with the study or to address differences. And how the Michigan Public Service 86 See Applicants Answer to AG at.

87 Id.

88 Id.

89 See DCE at. HDI does not identify the earlier cost estimate that it used.

Commission may have considered or used the study results is a state matter that does not bear on this license transfer. Second, the Attorney General provides us with no basis to assume that the earlier study, although seventeen years old, reflects a more reliable decommissioning estimate for today than HDIs current estimate. And with one exception addressed further below, the Attorney General does not use the specific cost information in the study to challenge the reasonableness of specific underlying costs in the HDI decommissioning cost estimate. It was the Attorney Generals burden as a petitioner to review the earlier study to identify any items that may support a factual and material dispute with HDIs cost estimates.

We also are not persuaded that information in the two studies is insufficient to allow for some understanding of how the cost estimates differ. The Attorney General already identified the differences between the studies in the low-level waste disposal costs. But other notable differences also are apparent. For example, a higher contingency allowance included in the study accounts for some of that studys higher overall decommissioning costs.90 And estimated labor costs for radiological decommissioning also differ markedly; the Attorney General does not challenge HDIs estimated labor requirements and estimated labor costs.91 Further, the projected spent fuel management expenses in the earlier study extended over an approximately -year period following cessation of operations, while HDIs cash flow analysis 90 The study allocated.% for contingency. See Palisades IFMP and PDCE, Encl.

at. This percentage reflects approximately $ million of the $ million radiological decommissioning cost estimate in dollars (about $ million out of $ million in dollars), compared to HDIs % contingency allowance, which reflects about $ million out of HDIs decommissioning cost estimate of $ million (in dollars).

91 Compare DCE at - (projected decommissioning labor cost of about $ million in dollars) with MPSC Case, TLG Services Cost Study Excerpts, Section at, tbl..

(projected radiological decommissioning labor cost of $ million, in dollars). The study also identified additional labor costs of $ million for spent fuel management and of $

million for site restoration. See MPSC Case, TLG Services Cost Study Excerpts, Section at -, tbls.. &., respectively.

covers about twenty years of spent fuel management costs, with all fuel removed by.92 These are all evident cost-related differences between the studies.93 To the extent that HDIs cost estimate may be missing details necessary for the Attorney General to meaningfully assess the HDI estimate, it was the Attorney Generals burden to identify any necessary missing information. And the pertinent question ultimately is not why HDIs cost estimate is less but whether the estimate is reasonable. The Attorney Generals comparison of the two studies respective overall cost conclusions does not, without more, raise a supported, genuine material dispute with the Palisades application.

ISFSI Operating Costs The Attorney General raises one particularized cost comparison from the study to challenge HDIs estimated annual spent fuel management operating costs for the years

-. The Attorney General notes that the study described an approximately $ million a year average annual cost for post-decommissioning ISFSI operations; according to the Attorney General, this annual amount in dollars would be $. million. The Attorney General goes on to argue that an $. million annual ISFSI operating cost is significantly greater than HDIs estimated annual spent fuel management cost of $. million for the years

-. The Attorney General questions only HDIs estimated spent fuel management costs for those three years, which the Attorney General claims are comparable to the studys post-ISFSI decommissioning period; HDIs schedule and cash flow analysis project no major 92 Compare DCE at with MPSC Case, TLG Services Cost Study Excerpts, Section at, tbl...

93 We note also that the full TLG cost study is available on our public ADAMS electronic database. See Letter from Edward J. Weinkam, Nuclear Management Company, LLC, to NRC Document Control Desk (Oct., ), Encl., Decommissioning Cost Study for the Palisades Nuclear Plant, Prepared by TLG Services, Inc. (Mar. ) (Full TLG Services Cost Study) (ML).

additional spent fuel management activities (such as transferring fuel from wet-to-dry storage or transferring fuel from dry storage to DOE) to occur during the years -.94 The Attorney General argues that HDIs estimated $. million spent fuel management cost for each of the three years during - is % less than the annual post-decommissioning ISFSI operating costs identified in the study, and that no explanation is provided for this difference. Additionally, the Attorney General compares HDIs

$. million estimated cost to the actual annual cost for maintaining the Big Rock ISFSI, which the application notes was $. million in.95 The Attorney General argues that HDI provided no explanation for why its estimated cost for maintaining the Palisades ISFSI during the years - would be % less than the actual [Big Rock Point] cost for ISFSI maintenance.96 This comparison of spent fuel management costs also lacks adequate support and does not raise a material dispute for hearing. First, HDI had no obligation in the application to compare its estimates to the cost study and provide an analysis or explanation of cost differences. Second, the applicants provide an unchallenged explanation for why their estimated spent fuel management costs during the dormancy years - are not directly comparable to post-decommissioning ISFSI operating costs and the current operating costs at Big Rock.

The applicants state that both the Big Rock ISFSI current operating costs and the cost studys estimated $ million post-decommissioning ISFSI operating costs address total operating costs for a standalone ISFSI.97 In contrast, during the years - of HDIs 94 See AG Petition at - (citing DCE at ).

95 See Capik Decl. at (citing LTA, Attach. E at ).

96 See AG Petition at.

97 See Applicants Answer to AG at -.

projected dormancy period, the Palisades ISFSI will not be a standalone ISFSI because the reactor will not have been decommissioned. The applicants state that for the years -

HDI allocated the Palisades site infrastructure costs (e.g., security, site upkeep, insurance, taxes) proportionately between the license termination cost category and the spent fuel management category. They state that the referenced studys spent fuel management costs reflect a post-decommissioning period in which all infrastructure costs are assigned to a standalone ISFSI facility, and that likewise, at Big Rock all infrastructure costs are assigned to the standalone ISFSI.98 On reply, the Attorney General neither addressed this explanation, nor provided any other ground to question the adequacy of $. million for the annual spent fuel management cost for the years -. The Attorney General did not provide sufficient factual basis for its claim that HDIs estimated spent fuel management costs for the dormancy years - are directly comparable to the post-decommissioning costs in the study or to the current Big Rock standalone ISFSI operating costs. Further, the Attorney General does not describe why the asserted underestimated spent fuel management costs for those three years in the dormancy period would materially call into question Holtecs overall financial qualification.

Based on the information before us, the Attorney General has not established a supported, material dispute with the application on the adequacy of the $. million estimate.

b.

Spent Fuel Management Assumptions for Transfer of All Spent Fuel Off of the Site

()

ASSUMED START DATE The Attorney General challenges spent fuel management assumptions on which HDIs cost estimates are based. The Attorney General first contests HDIs assumption that DOE will begin to pick up spent fuel from Palisades in. Specifically, the Attorney General states that 98 See id. at & n. (addressing Table - in the cost estimate, which estimates overall facility annual costs (reactor and ISFSI costs together) of about $. million for each of the dormancy years -).

DOE is not currently working on a pilot interim storage facility and that DOE operation of such an interim facility is linked under the Nuclear Waste Policy Act to construction of a repository.99 While there still is uncertainty regarding when DOE might begin to pick up spent fuel from nuclear power reactor sites, in two recent decisions we have accepted a start date as plausible.100 As we stated in the Pilgrim proceeding, there have been corporate and legislative initiatives aimed at providing interim storage options, and the NRC has received two separate applications for privately owned interim storage facilities.101 Recently, the NRC completed its review and issued a license for one of these facilities.102 While the other application is still under review, we accept as plausible that by a storage facility will be available to receive the Palisades spent fuel.

99 See AG Petition at & nn.-.

100 See Indian Point, CLI--, NRC at.

101 See Pilgrim, CLI--, NRC at (citing Congressional Research Service report on civilian nuclear waste disposal); see also Congressional Research Service, Civilian Nuclear Waste Disposal (Sept., ), at (noting latest legislative initiatives to authorize DOE to enter into contracts with nonfederal interim storage facilities).

102 See Interim Storage Partners, LLC; WCS Consolidated Interim Storage Facility; Issuance of Materials License and Record of Decision, Fed. Reg., (Sept., ). The SER acknowledges, Before commencing construction, operation, and receipt of licensed material at the WCS [facility], the applicant stated that it expects to enter into a contract(s) with the DOE or other entities that may hold title to the spent fuel and that will provide the funding for facility construction, operation, and decommissioning, including any fees paid to hosting public entities. See Final Safety Evaluation Report for the WCS Consolidated Interim Storage Facility (Sept. 13, 2021), at 11-2 to 11-3 (ML21188A101); see also Applicants Answer to AG at (arguing that, even if necessary legislative changes to allow DOE to take title to the spent fuel were not enacted, DOE could pay for the interim storage or Holtec Palisades could seek to recover the costs of the interim storage from DOE); Holtec International (HI-STORE Consolidated Interim Storage Facility), CLI--, NRC, () (the NWPA does not prohibit a nuclear power plant licensee from transferring spent nuclear fuel to another private entity).

()

PROJECTED LENGTH OF TIME FOR TRANSFERRING ALL SPENT FUEL OFF-SITE The Attorney General also challenges the applications projected timeframe of approximately eleven years for DOE to remove all spent fuel from the Palisades site.103 We conclude that the Attorney General raises an admissible issue for hearing.

HDI assumes that DOE will begin accepting the Palisades spent fuel in and will complete the transfer of all fuel off the Palisades site by the end of. HDI states that for planning purposes, the fuel removal assumed in this estimate is based upon DOE acceptance of fuel according to the Oldest Fuel First priority ranking.104 HDI also states that Holtec Palisades will seek the most expeditious means of removing fuel from the site based on shutdown reactor priority and other contract provisions.105 The DOE Standard Contract for spent fuel disposal establishes fuel acceptance procedures, including a spent fuel acceptance priority ranking, or queue. Except as otherwise provided for under the contract, the Standard Contract bases the priority of fuel acceptance on the age of the spent nuclear fuel, as calculated from the date of permanent discharge from the nuclear power reactor.106 This priority ranking is commonly called Oldest Fuel First.

The Attorney General disputes as unreasonably short HDIs projected -year spent fuel removal period and claims that this acceptance period results in significantly understated spent fuel management costs. The Attorney General bases this argument on the Standard Contracts oldest fuel first acceptance priority, together with a spent fuel acceptance rate or schedule that has been upheld by courts in litigation relating to DOEs partial breach of the Standard 103 See AG Petition at -; Capik Decl. at -.

104 See DCE at.

105 See id.

106 See Standard Contract for Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste, C.F.R. §. (text of the contract) (Standard Contract), art. VI.B. (Acceptance Priority Ranking).

Contract.107 The Attorney General claims that the DOE acceptance schedule provides for

, metric tons of uranium to be accepted in the first ten years of repository operation, followed by a DOE annual acceptance rate of, metric tons of uranium. Based on these rates, and given the total spent fuel amount projected to be covered by the Standard Contract, the Attorney General argues that the last of Palisades spent fuel will not be removed for about years after DOE acceptance commences.108 Using HDIs spent fuel transfer start date of, the Attorney General argues that DOE would not accept the last of the Palisades fuel until about, reflecting a -year fuel transfer period, ending decades after HDI predicts. As further support, the Attorney General states that the prior Palisades licensee, Consumers Energy Company, supported its ratemaking submittals before the Michigan Public Service Commission with a nearly identical acceptance period of years.109 The Preliminary Decommissioning Cost Estimate for Palisades that Consumers Energy Company filed with the NRC in likewise projected the same -year 107 See AG Petition at & n. (citing U.S. Department of Energy, Office of Civilian Radioactive Waste Management, DOE/RW-, Annual Capacity Report, (June )). While the Standard Contract specifies the priority for ranking the order of spent fuel acceptance, it does not specify a particular rate of spent nuclear fuel acceptance. The Standard Contract instead required DOE to issue annual reports on acceptance priority rankings for receipt of fuel and annual reports on receiving capacity, including capacity information for the first ten years following projected commencement of operations of the initial DOE facility. See Standard Contract, art. IV.B.. In litigation to assess damages for DOEs partial breach of contract, courts have used DOEs Annual Capacity Report to determine how quickly the plaintiff utility or owner would have been able to have had all spent fuel removed but for DOEs partial breach of contract. See, e.g., Pac. Gas and Elec. Co. v. United States, F.d, - (Fed. Cir.

).

108 See AG Petition at & n.; Capik Decl. at n. (specifying underlying assumptions).

109 See AG Petition at (citing MPSC Case, Ex. A-, Consumers Energy Company Report to MPSC at (projecting a fuel transfer period spanning years -)); see also Palisades IFMP and PDCE, Encl. at -.

fuel transfer period (-), given both DOEs generator/allocation/receipt schedules based on the oldest fuel first priority ranking and an anticipated rate of transfer.110 The Attorney General acknowledges that the Standard Contract has two provisions that potentially could be used to accelerate the acceptance of spent fuel by changing a specific sites position in the queue, but claims that there is no basis to assume that these alternative provisions can be utilized, or that these provisions would be available without a significant cost.111 The Attorney General claims, therefore, that HDI failed to address or otherwise account for the substantial uncertainty associated with HDIs accelerated fuel acceptance schedule of years.

Based on HDIs projected timeframe for DOE removing all Palisades spent fuel by the end of, HDIs cash flow analysis depicts no additional spent fuel management costs following the year. The analysis projects ISFSI decommissioning and license termination to occur in. HDIs estimated total spent fuel management costs of $,, relies on the assumed spent fuel acceptance schedule. By not accounting for many additional years of spent fuel management costs until DOE is able to remove all of the fuel, the Attorney General claims that HDI significantly underestimates spent fuel management costs.

In their answer, the applicants argue that the two Standard Contract provisions potentially could be used to accelerate the fuel acceptance rate. Citing several court decisions, the applicants state that the Federal Circuit has upheld the use of the Standard Contracts 110 See Full TLG Services Cost Study, Section at ; see also id., Section at and Section at ; Palisades IFMP and PDCE, Encl. at -. Both the Consumers Energy Company ratemaking submittals and the Preliminary Decommissioning Cost Estimate for Palisades used the TLG Services cost analysis.

111 See Capik Decl. at - & n.. One, under Article VI.B.(b) (Acceptance Procedures),

DOE could accord acceptance priority to permanently shutdown reactors. Two, under Article V.E (Exchanges), a party to a Standard Contract could exchange approved delivery commitment schedules with other parties to other contracts with DOE for spent fuel disposal (provided that DOE has the right in its sole discretion to approve or disapprove any such exchanges).

provision allowing potential exchanges of fuel acceptance schedules.112 These decisions held that it could be assumed that, absent DOEs partial breach of contract, there would have been a market for exchanges, wherein utilities/owners would have negotiated and paid for an exchange of fuel acceptance schedules to move up in line and accelerate the transfer of their spent fuel.

But the applicants leave unaddressed the Attorney Generals argument that such exchanges, should they be an option in the future, likely would entail a significant price. And the applicants own cited case supports the Attorney Generals position that potential exchanges of delivery schedules would entail a cost[b]uyers would only have induced sellers to part with their allocations by offering to share the benefits of such a bargain.113 The applicants also note the Standard Contracts provision that DOE could choose to accord priority to shutdown reactors.114 But the applicants general references to these two Standard Contract provisions do not by themselves answer the Attorney Generals challenge to the plausibility of the specific

-year schedule on which the applicants rely. The applicants have not described how they applied their assumptions to reach their -year schedule.

The Attorney Generals claim raises a supported, genuine dispute with the application on a material issue. Relying on alleged facts and supported by expert opinion, the Attorney General challenges what it calls a shortened -year acceptance period.115 As the Attorney General noted, based on both the oldest fuel first priority ranking and an anticipated rate of fuel 112 Applicants Answer to AG at & n. (citing court decisions relating to damages for DOE breach).

113 See Dairyland Power Coop. v. United States, F.d, (Fed. Cir. ) (citation omitted). The circuit court affirmed the lower courts discounting of $. million from the plaintiffs damages award, to account for what plaintiff Dairyland, a shutdown reactor with a small amount of spent nuclear fuel, would have paid in bargaining for acceptance allocation exchanges to move its tons of spent nuclear fuel to the front of the DOE queue.

114 See Applicants Answer to AG at.

115 See AG Petition at.

transfer, Consumers Energy projected that it would take about years to complete the transfer of all fuel from the site.116 The Attorney Generals expert also calculated a similar -year schedule based on HDIs start date, DOEs oldest fuel first priority ranking, and a specified spent fuel acceptance rate. And we note that current licensee ENOI similarly projects that it will take about years to complete the transfer of fuel off of the site based on DOEs oldest fuel first priority ranking and assuming a maximum rate of transfer of, metric tons of uranium/year. 117 Yet beyond general references to possibilities under the Standard Contract for accelerating fuel acceptance dates, neither the Palisades site-specific decommissioning cost estimate nor the applicants answer clearly explains how HDI determined that years constitutes a plausible schedule for removal of all of the Palisades spent fuel.

At the hearing, Holtec should clarify how it determined that years constitutes a plausible transfer schedule. If HDIs schedule departs from the commonly applied maximum transfer rate of, metric tons of uranium/year, then Holtec should describe the spent fuel transfer rate that it used, and why it determined that a faster rate is plausible.118 If Holtec bases 116 See id. at & n. (citing MPSC Case, Ex-A, Consumers Energy Company Report to MPSC at ); see also Full TLG Services Cost Study, Section at.

117 See Letter from Philip L. Couture, ENOI, to NRC Document Control Desk (Dec., )

(MLA), Encl., CFR. ISFSI Decommissioning Funding Plan, Palisades Nuclear Plant, at - (citing Acceptance Priority Ranking & Annual Capacity Report, DOE/RW- (July )). ENOI bases its schedule on the same HDI expectation that Palisades will permanently cease operations in spring, and on spent fuel transfers beginning in (only two years later than HDI), but it projects that the spent fuel will be fully removed from the Palisades site only in. See id.

118 The applicants claim that it is also plausible (though not assumed in HDIs analysis) that DOE will accept fuel more rapidly than contemplated in litigation over the Standard Contract.

See Applicants Answer to AG at (emphasis added). The statement suggests that HDI based its -year transfer schedule on a rate of spent fuel transfer similar to that used by the Attorney General and by ENOI (e.g., assuming a maximum rate of, metric tons of uranium/year). If HDI used the same rate of transfer, it should clarify the specific underlying assumptions relied on for projecting the faster -year schedule.

The applicants also argue that the fuel transfer rate assumed in the Standard Contract is outdated. They argue that the allocation rate adopted by the Federal Circuit that is based on

its schedule on the commonly applied spent fuel transfer rate, then it should nonetheless explain how it reached the -year transfer accelerated schedule.

As a final matter, the applicants argue that even if they were to incur spent fuel management costs beyond, the impact on their overall cost estimate would be minimal because if they incur more spent fuel management costs than they are currently projecting then those costs would be recovered from DOE.119 The applicants therefore argue that the Attorney General has not set forth with particularity any reason why the applicants overall... spent fuel cost analysis is implausible in any material way.120 But the Attorney General argues that there is a genuine issue regarding whether the impact on overall cost estimates would be minimal, and also that there is no commitment by Holtec to use any costs recovered from DOE.121 We agree. Based on the application, the NRC must be able to find adequate financial qualifications and reasonable assurance of decommissioning funding. If cost estimates on which the application relies for necessary findings are implausible, or if further inquiry is necessary to assess their adequacy, that is a matter warranting resolution in this license transfer proceeding.

Here, the Attorney General provides a supported claim challenging HDIs projected spent fuel transfer schedule. Whether HDIs projected transfer schedule appears plausible directly bears on whether the estimated costs for spent fuel management are reasonable or understated. If the latter, then the financial assurance specified in the application may be DOEs Annual Capacity Report does not necessarily represent a likely DOE acceptance rate in todays world, with consolidated interim storage facilities on the horizon and advancements in technology. See id. To the extent that HDI either applied a faster spent fuel transfer rate or claims a faster rate to be plausible, HDI can provide further support for use of a faster transfer rate in the hearing.

119 See Applicants Answer to AG at.

120 See id.

121 See AG Reply at.

insufficient to support the application. In that event, some commitment regarding the DOE recoveries or other form of additional financial assurance may be warranted for this proposed license transfer. The Attorney Generals dispute with the application on this point is therefore admissible.

c.

Comparison of the Radiological Decommissioning Cost to the NRCs Minimum Formula The Attorney General also claims that the HDI decommissioning cost estimate is unreasonable because the estimate falls below the NRCs decommissioning cost minimum formula amount calculated for the Palisades site. The comparison is relevant. As we outline further below, current NRC guidance calls for comparing the site-specific decommissioning cost estimate provided in a PSDAR to the minimum formula amount. Where the cost estimate falls below the minimum formula amount, the guidance calls for an explanation or further inquiry. We conclude that the Attorney General sufficiently raises a material dispute over the overall adequacy and acceptability of HDIs site-specific cost estimate because it falls significantly below the minimum formula amount.

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THE MINIMUM FORMULA REGULATIONS IN C.F.R. §.(B)-(C)

One of the NRCs key requirements to ensure that adequate funds are accumulated for decommissioning is the requirement in C.F.R. §.(b)() that an applicant for, or a holder of, an operating license under Part provide a certification of decommissioning funding in an amount which may be more, but not less, than the amount stated in the NRCs table of minimum amounts in section.(c)(), as further adjusted using a rate at least equal to that provided by the adjustment factors in section.(c)(). In establishing the minimum formula requirement, the NRC sought a method with clear criteria that would both provide reasonable assurance of decommissioning funding while also minimizing licensee and NRC administrative

effort.122 The prescribed amount calculated with the minimum formula was never intended to represent the actual cost of decommissioning for specific reactors but rather is a reference level established to assure that licensees demonstrate adequate financial responsibility that the bulk of the funds necessary for a safe decommissioning are being considered and planned for early in facility life.123 In issuing the regulation, the NRC made clear that licensees alternatively could certify their decommissioning funding to an amount based on a site-specific cost estimate, but only if it exceeded the prescribed amount, which would be acting as a threshold review level.124 About a decade ago, the NRC staff re-evaluated the adequacy of the minimum formula, based in part on a draft study by Pacific Northwest National Laboratory (PNNL) that re-assessed the formula and its technical basis.125 The staff concluded that the prescribed formula level continued to ensure that the bulk of the funds necessary for decommissioning were considered and planned for early in facility life.126 The staff further stated that [a]pplying 122 See General Requirements for Decommissioning Nuclear Reactors, Final Rule, Fed. Reg.

,,,- (June, ).

123 Id.

124 See id. In later years, the Commission declined to revise section.(b) to permit licensees of operating reactors to certify the decommissioning funding amount to a site-specific decommissioning cost estimate that was lower than the minimum formula amount. See, e.g.,

Financial Assurance Requirements for Decommissioning Nuclear Power Reactors, Final Rule, Fed. Reg.,,,- (Sept., ) ([T]he Commission has decided to defer allowing site-specific estimates that are lower than the amounts specified in CFR.(c) until additional decommissioning data are obtained.); Decommissioning Trust Provisions, Final Rule, Fed. Reg.,,, (Dec., ) (The Commissions position remains that the site-specific estimates may be used a basis for a funding plan if the amount to be provided is... at least equal to that stated in paragraph (c)() of [§.]. The Commission does not intend to allow use of site-specific amounts lower than the formula values.).

125 See Assessment of the Adequacy of the CFR.(c) Minimum Decommissioning Fund Formula, Draft (Nov. ) (MLA) (PNNL Draft Report).

126 See Staff Findings on the Table of Minimum Amounts Required to Demonstrate Decommissioning Funding Assurance, Commission Paper SECY-- (June, ), at (MLA) (SECY--). As described in the staffs paper, PNNL proposed a revised

the results of the PNNL study, the minimum formula represents the low end of the range of decommissioning costs, which the staff found acceptable because raising the minimum could result in requiring some licensees to provide financial assurance greater than the funds needed to decommission.127 The staff chose not to revise the formula in, concluding that it successfully establishes a common minimum standard measurement, or reference level, to which each licensee must accumulate committed financial resources during the life of the operating license.128

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ATTORNEY GENERALS COMPARISON OF HDI ESTIMATE TO MINIMUM FORMULA HDIs estimated site-specific radiological decommissioning cost of $ million is lower than the calculated minimum formula amount for Palisades. The application states that the minimum formula amount is $. million, as calculated by ENOI in its decommissioning funding status report; ENOI has since updated the formula amount for Palisades to $.

million in its status report.129 In Contention MI-, the Attorney General claims that the decommissioning cost estimate is unreasonable because it falls under the minimum formula amountspecifically, that HDIs estimate is substantially smaller than the minimum formula standard, which in turn the Attorney General argues historically has understated actual license termination costs by % to %.130 The Attorney General states that there have been multiple completed decommissioning projects minimum formula with new weighting of the adjustment factors and a new base year (

instead of ). However, the staff concluded that revising the formula was unnecessary. See id. at -.

127 See id. at -.

128 See id. at.

129 Application at n.; Letter from Phil Couture, ENOI, to NRC Document Control Desk, Decommissioning Funding Status Report (Mar., ), Encl., ENOI Calculation of Minimum Amount - Palisades (MLA) (ENOI Status Report).

130 See AG Petition at -.

(e.g., Yankee Rowe, Haddam Neck, and Maine Yankee) where the actual decommissioning cost proved to be up to % more than minimum formula amount, and the formula is only intended to capture the bulk of costs. The Attorney General also cites to a report by the United States Government Accountability Office that compared the minimum formula amount for twelve reactors and concluded that the NRC formula captured to percent of estimated site-specific cost for nine reactors, and that site-specific estimates were as much as $

million more than the formula amount.131 The Attorney General additionally argues that HDI has not yet completed, nor made substantial progress towards completing any of its planned decommissioning projects, and that therefore while HDIs intended fleetwide approach could offer efficiencies, any such cost savings has yet to be realized.132 The Attorney General therefore argues that [a]bsent additional support, HDIs projected radiological decommissioning cost estimate is unreasonable because it not only understates the generic formula but also actual historical experience given that the minimum formula has understated actual license termination costs.133 The applicants dismiss the Attorney Generals use of the minimum formula as a benchmark for assessing the overall plausibility of the HDI decommissioning cost estimate.

They argue that the Attorney General provided no reason to believe that a general estimate is objectively better than HDIs estimate.134 They also state that the Attorney General neither 131 See id. at n. (citing GAO--, Report to the Honorable Edward J. Markey, House of Representatives, NRCs Oversight of Nuclear Power Reactors Decommissioning Funding Could Be Further Strengthened (Apr. ), at -), available at https://www.gao.gov/products/gao--. For of the reactors analyzed, the GAO report found that the minimum formula captured from to % of the site-specific estimated cost.

See GAO--, at -.

132 See AG Petition at.

133 See id. at.

134 See Applicants Answer to AG at.

addressed nor disputed their explanation in the application for why the cost estimate is below the minimum formula amount, including their explanation that the formula amount, developed nearly forty years ago[,] is a general level of adequate financial responsibility early in life.135 The application states that the section.(b) requirement that decommissioning financial assurance at least meet the minimum formula will not apply to Holtec by the time of the planned transfer transactions closing. It further states that by that time decommissioning trust funds will have been expended for certain decommissioning planning and initial decommissioning activities, and that at that juncture decommissioning funding will be governed by section..136 It goes on to state that section. will require annual decommissioning funding reports describing the the declining site-specific decommissioning cost to complete decommissioning as decommissioning work is completed, but includes no provision requiring the site-specific cost estimate to equal or exceed the generic formula amount.137

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ANALYSIS OF ARGUMENTS First, contrary to the applicants suggestion, the minimum formula has relevance beyond merely establishing a decommissioning funding floor early in reactor life. Although Palisades permanently ceased operations in May, ENOI relies today on the minimum formula amount as its required minimum decommissioning funding assurance amount.138 Under the proposed transfer, therefore, the minimum amount of funding required for radiological decommissioning would decline to the amount of HDIs decommissioning cost estimate, which is approximately $ million lower than the most recent minimum formula calculation for 135 See id. at.

136 See Application at - n..

137 See id.

138 See ENOI Status Report at Encls.,.

Palisades. This is a material consideration given that the applicants are relying on this decommissioning cost estimate for their related exemption request to use the trust fund amounts in excess of the estimate to fund spent fuel management costs and non-radiological site restoration costs, and HDIs projected remaining funding at license termination is about $

million.139 Further, current NRC guidance on site-specific decommissioning cost estimates calls for a comparison of the estimate to the minimum formula, and this guidance expressly applies to the site-specific cost estimates submitted under the decommissioning regulations in section

. (e.g., with a PSDAR under section.(a)()(i), or within two years of cessation of operations under section.(a)()(iii)). For example, the staffs standard review plan for decommissioning cost estimates for nuclear power reactors specifies that if the site-specific estimate is less than the minimum formula amount and adequate justification is not provided, then the staff is to seek additional information from the licensee to resolve the deficiency.140 The guidance goes on to state that if adequate justification is not provided then the site-specific cost estimate shall be considered deficient.141 While NRC guidance documents do not impose requirements, the minimum formula amount remains a benchmark to assess the acceptability of a site-specific decommissioning cost estimate that is submitted with a PSDAR or within two years of permanent cessation of operations. And while the guidance does not state that the cost estimate provided under section 139 See Application, Attach. E at (Cash Flow Analysis).

140 See Standard Review Plan for Decommissioning Cost Estimates for Nuclear Power Reactors (Final Report), NUREG- (Dec. ), at (SRP for Decommissioning Cost Estimates, NUREG-) (ML); see also id. at ; Procedures for NRCs Independent Analysis of Decommissioning Funding Assurance for Operating Nuclear Power Reactors and Power Reactors in Decommissioning, NRR Office Instruction, LIC-, rev. (Apr., ),

§.. at (MLA).

141 See SRP for Decommissioning Cost Estimates, NUREG-at.

. cannot fall below the minimum formula, it indicates that a cost estimate falling below the formula amount warrants explanation. Whether a site-specific cost estimate meets the minimum formula amount therefore bears on whether a site-specific estimate is acceptable.

Here, as the Attorney General argues, HDIs estimated radiological decommissioning cost estimate is at least % lower than the minimum formula amount.142 The applicants state that the application provides a discussion explaining why the site-specific decommissioning cost estimate falls below the formula amount. The referenced discussion states that HDIs cost estimate is significantly more reliable and more precise because it reflects an actual, detailed estimate of decommissioning costs, as opposed to the minimum formula amount, which is based on generic inputs.143 The discussion also states that HDIs cost estimate is based on Palisades-specific plant data and historical information, actual site conditions, regulatory requirements applicable to Palisades, basis of estimate assumptions, low-level radioactive waste disposal standards, and available pricing data.144 The applicants therefore argue that although the estimate is lower than the formula, HDIs reliance on the site-specific estimate in the license transfer application is justified.

142 See AG Petition at. The difference between the estimated cost of $ million and the minimum formula amount of $. million is approximately $ million, which is almost

% of the minimum formula amount. The Attorney General additionally suggests that for a proper comparison of a site-specific decommissioning cost estimate to the minimum formula any costs allocated strictly to ISFSI decommissioning need to be subtracted first from the overall cost estimate. See AG Petition at n.. We need not and do not reach the Attorney Generals suggestions regarding whether any costs ought to be subtracted from HDIs radiological decommissioning cost estimate before comparing the estimate to the minimum formula amount.

143 See LTA at n..

144 See id.

However, a site-specific decommissioning cost estimate should by definition always be based on site-specific conditions and factors.145 Moreover, the NRC expects every site-specific decommissioning cost estimate to be a detailed and significantly more accurate and more reliable estimate than the minimum formula amount. Any licensee or applicant therefore could make a similar broad assertion regarding the factors on which their site-specific cost estimate is based. Yet, the referenced discussion in the application does not contain a substantive summary or explanation of how these identified factors (e.g., Palisades-specific plant data, historical information, actual site conditions, regulatory requirements applicable to Palisades) may have contributed to the HDI estimate falling below the minimum formula amount or any citation or link to portions of the cost estimate that might elaborate more substantively on these factors.

In short, the stated explanation is that the site-specific estimate is more reliable than the minimum formula because it is a site-specific estimate. Such an explanation effectively renders meaningless the NRC guidance on site-specific decommissioning cost estimates, which calls for an adequate justification if a site-specific cost estimate falls below the formula. While, as the applicants claim, the Attorney General did not specifically contest these particular statements said to justify HDIs lower decommissioning cost amount, on their face the referenced statements do not provided substantive information.146 The explanation provided does not directly address and describe why the cost estimate falls approximately $ million lower than the minimum formula amount which, as the Attorney General claims, is intended as a tool to 145 The purpose of the cost estimate is to provide the NRC with a detailed assessment that incorporates the cost impact of site specific factors. See Standard Review Plan for Decommissioning Reactors at ; see also id. at.

146 The Attorney Generals reply calls the applicants justification for its lower cost estimate hardly a sufficient explanation. See AG Reply at.

help ensure that a licensees financial assurance will capture the bulk, not the entirety, of the funding that will be necessary to complete decommissioning.147 This issue also raises an underlying threshold legal question: does the minimum formula regulation in section.(b) require the application to provide decommissioning financial assurance at least to the level of the minimum formula amount. The application states that, by the time of the projected license transfer closing, decommissioning funding will be governed by section., which does not contain a requirement that decommissioning funding meet or exceed the minimum formula level.148 The regulations themselves leave unclear exactly when the section.(b)-(c) minimum formula amount floor for decommissioning funding assurance may cease to apply. Further, the NRC staff in an inter-office Working Group final report acknowledged that the regulations are unclear regarding the applicability of the decommissioning financial assurance floor to licenses of reactors transitioning into decommissioning or that have permanently ceased operations.149 While the Attorney General does not argue that under the regulations the decommissioning funding assurance must meet the minimum formula level, the issue is closely related to the Attorney Generals cost comparison. The applicability of the regulation therefore may bear on our resolution of the Attorney Generals minimum formula-based claims. We therefore also direct the parties and invite the staff to address in their submissions to the Presiding Officer, as part of the hearing record, their views on the applicability of the section.(b) minimum funding requirement to this application.150 147 See id.

148 See Application at n..

149 See Reactor Decommissioning Financial Assurance Working Group Final Report (Apr.,

), at - (MLA).

150 Although the staff typically is a non-party in license transfer adjudications, NRC case precedent has included inviting the staff as a non-party to submit a brief with its views on

We conclude that the Attorney General has raised a sufficient dispute over whether a site-specific decommissioning cost estimate that falls well below the minimum formula amount reflects a plausible decommissioning cost estimate. For the hearing, the applicants should provide a more detailed or substantive explanation of the primary reasons that the cost estimate falls significantly below the formula amount.151

d.

Contingency Funding The Attorney General additionally challenges the % level of contingency allowance incorporated into the Palisades decommissioning, spent fuel management, and site restoration cost estimates. The claims are sufficiently supported and raise a genuine material dispute with the application. We therefore admit the contingency allowance dispute for hearing.

As HDI describes in its cost estimate, any project has inherent uncertainty in the estimated quantities, unit rates, productivity, pricing, and schedule durations.152 Site-specific decommissioning cost estimates submitted to the NRC therefore include an amount added under the title of contingency to cover unknown costs. The identified contingency value, expressed as a percentage, reflects the percentage of the overall final cost estimate that was added as a margin to cover unknown costs.

particular questions pertaining to a license transfer application. See Power Authority of the State of New York (James A. FitzPatrick Nuclear Power Plant, Indian Point, Unit ), CLI--,

NRC, - ().

151 While not in the applicants referenced justification for the lower cost estimate, in their answer the applicants provide as an example HDIs fleet-wide waste disposal contract with Waste Control Specialists. The applicants therefore can address the significance of the cost savings associated with the contract.

We note additionally that elsewhere in the application the applicants state they benchmarked their cost estimate against similar estimates of dismantlement, demolition and waste management activities for other HDI decommissioning projects. See LTA, Attach. E at.

Additional information regarding this benchmarking may be helpful to determine the plausibility of the applicants site-specific decommissioning cost estimate.

152 DCE at.

Based on NRC guidance regarding ISFSI decommissioning cost estimates, Holtec applied a contingency factor of % to its decommissioning cost estimates for the Palisades and Big Rock ISFSIs.153 But for its other estimated costs for Palisadesradiological decommissioning (other than ISFSI), spent fuel management, and site restorationHoltec applied a % contingency factor. The application states that the % level of contingency for Palisades will reasonably bound the universe of risks that are appropriate to be taken into account at the estimate phase (considering industry practice, accepted NRC methodology, and the information that is available today).154 Supported by a declarant, the Attorney General challenges the % level of contingency as inadequate. The Attorney General first argues that no support is provided for the conclusion that a % level of contingency will reasonably bound the universe of risks that should be taken into account.155 The Attorney General also argues that the % level is unprecedented and inconsistent with industry norms. As examples of industry norms, the Attorney General notes contingency allowances applied in other site-specific decommissioning cost estimates that have been submitted to the NRC; the cited allowances ranged from.% to.%.156 The Attorney General additionally notes HDIs own site-specific decommissioning cost estimates for the Oyster Creek, Pilgrim, and Indian Point license transfer applications, which included contingency allowances of %, %, and %, respectively. The Attorney General 153 See DCE at (Palisades ISFSI) (citing Consolidated Decommissioning Guidance, Financial Assurance, Recordkeeping, and Timeliness (Final Report), NUREG-, vol., rev.

(Feb. ) (MLA) (Consolidated Decommissioning Guidance)); see also Application, Attach. E at (Big Rock ISFSI).

154 See DCE at.

155 See Capik Decl. at.

156 See AG Petition at n. (citing site-specific cost estimates for Crystal River Nuclear Generating Station Unit (May ) (.% contingency); Fort Calhoun Station (Feb. )

(.% contingency); Monticello Nuclear Generating Plant (Oct. ) (.% contingency)).

acknowledges, but describes as an outlier, one other relatively lower contingency allowance of

.%, applied to a decommissioning cost estimate for Three Mile Island.157 Further, the Attorney General claims that if HDIs contingency allowance were increased to be consistent with recent industry norms, the increased overall costs would exceed the projected available funding for decommissioning, resulting in a shortfall.158 NRC regulations do not address the content of the power reactor site-specific decommissioning cost estimate.159 The NRC therefore does not mandate the use of a particular level of contingency allowance for the site-specific decommissioning cost estimate. NRC guidance provides that a cost category of contingency should be separately identified in the decommissioning cost estimate as an allowance for unexpected costs.160 Guidance further provides that the cost estimate should describe how the contingency costs are calculated.161 We expect that a reasonable estimate for decommissioning costs will include a percentage or other allowance that is allocated for contingency. But while the evaluation criteria applicable to the ISFSI decommissioning cost estimate specifies that a contingency factor of at least % be applied to the sum of all estimated decommissioning costs, for reactor decommissioning cost 157 See id.

158 See AG Petition at ; Capik Decl. at. Specifically, Mr. Capik claims, as an example, that if a.% value (the average of the contingency values applied in the Crystal River, Fort Calhoun, and Monticello estimates) were used as the contingency value for Palisades, the cost estimate would increase by $ million. He states that if an % contingency level (such as that applied in the Indian Point estimate) were applied to the Palisades estimates, the overall estimated costs would increase by $ million.

159 For ISFSI decommissioning, NRC regulations require an adequate contingency factor, and further require that the decommissioning cost estimate reflect the cost of an independent contractor performing all decommissioning activities. See C.F.R. §.(b)().

160 See Reg. Guide. at ; Reg Guide. at.

161 See SRP for Decommissioning Cost Estimates, NUREG-, at.

estimates the NRC has not provided any guidance on calculating or assessing a contingency allowance.162 We have in recent adjudications rejected other challenges to contingency levels where petitioners had not identified a material supported dispute with the reasonableness of the levels applied, and the levels on their face did not appear disproportionately low.163 Here, the Attorney General, supported by a declarant, claims that the challenged level is both unsupported and inconsistent with industry norms for such analyses, and that if the level were increased to be consistent with industry norms the projected available funding for decommissioning would be exceeded.164 The applicants state that the % contingency allowance is within less than a percent of the.% allowance used for the Three Mile Island Unit cost estimate.165 They otherwise do not identify any similar examples of contingency allowances added to reactor decommissioning cost estimates, whether submitted to the NRC or used elsewhere. They also do not discuss any 162 See Consolidated Decommissioning Guidance at -.

163 See Pilgrim, CLI--, NRC at -.

164 See Capik Decl. at. The professional experience summary for the declarant states that Mr.

Capiks work has included evaluating decommissioning cost estimates for a state utility commission, performing cost estimates for commercial and governmental nuclear facilities, and developing a technical and financial model for estimating the costs for decommissioning nuclear reactors.

165 See Applicants Answer to AG at (citing Indian Point, CLI--, NRC at ). The applicants rely on a statement in our Indian Point decision, which referred to a range of allowances commonly added to site-specific decommissioning cost estimates. We did not mean, however, that the lowest contingency allowance cited, the.% allowance for TMI Unit

, represents an industry standard level. We note, moreover, that the TMI Unit site-specific decommissioning cost estimate explains how the.% contingency allowance was derived.

See Three Mile Island Unit Site Specific Decommissioning Cost Estimate (April ), at -

(MLA). The applicants reliance on the single allowance example of.% does not dispute the Attorney Generals argument regarding whether the Palisades analysis is consistent with industry norms.

of the specific assumptions underlying the % level or otherwise explain how they concluded that this level is adequate for the Palisades project.

The applicants instead argue that HDI justified the % level in the cost estimate, and that the Attorney General failed to challenge HDIs analysis. In support, the applicants quote the cost estimate: Based on an evaluation of estimate uncertainty and discrete risk events, combined with experience gained through decommissioning efforts at Oyster Creek and Pilgrim, newly formed waste contracts, and contingency allowances used for other decommissioning projects, a Contingency Allowance of percent was determined to reasonably bound the universe of risks that are appropriate to be taken into account.166 However, these generalities do not clarify how HDI derived its specific contingency level.

The Attorney General specifically challenges as unsupported the conclusion that the allowance of % will reasonably bound the universe of risks that should be taken into account. We agree with the Attorney General that neither the applicants answer nor the contingency analysis identifies support for the % level. The applicants general references, for example, to HDIs evaluation of estimate uncertainty neither identify any of the uncertainties considered nor any uncertainty values or allowances assigned. HDIs analysis does not describe how contingency costs are calculatedan expectation set out in NRC guidance.167 While these are not NRC requirements, the conclusions in the analysis are subject to challenge. And here the Attorney General disputes the % level as inadequate, asserting that it is both comparatively lower than industry norms and unsupported.

166 See Applicants Answer to AG at - (citing DCE at ).

167 NRC guidance also states that a site-specific decommissioning cost estimate may summarize the results of cost analyses with the underlying detail submitted as supplementary information. See SRP for Decommissioning Cost Estimates at. HDI did not provide underlying detail either in the analysis or separately.

The challenged conclusion also states that the % level was determined to be reasonably bounding considering industry practice, accepted NRC methodology, and the information that is available today.168 Yet, the Attorney General argues that the % allocated is not consistent with industry norms, and the analysis does not describe what industry practice or NRC methodology was used in reaching the % result. In short, there is no way to meaningfully assess why HDI concluded that the % level is appropriate for Palisades.

Nevertheless, the precise questionin a license transfer proceedingultimately is not whether HDIs contingency allowance for Palisades is relatively lower than those of other analyses. The material issue is whether the % contingency level is unreasonably low or inadequate for the Palisades project and could jeopardize the overall available funding for decommissioning and spent fuel management. We will not admit for hearing an issue that is not material to a decision on the application.

The applicants state that the Attorney General did not explain how it reached its estimate that using an average.% contingency level instead of % would add about $ million to the Palisades cost estimate. The applicants also argue that the Attorney General failed to address why additional funding assurance is needed or material or whether accounting for additional contingency expenditures at various points in the project would jeopardize the $

million surplus projected at license termination.169 They note that they will need to submit annual financial assurance status reports to the NRC, and state that the estimated $ million in spent fuel management costs will provide a revenue stream from DOE recoveries [that]

would easily allow a $ million adjustment in funding assurance if it were necessary.170 168 See DCE at.

169 See Applicants Answer to AG at.

170 See id.

We conclude that the disputed contingency analysis level is material. The application and associated exemption request rely on the decommissioning and spent fuel management estimates. A contingency factor is a nearly universal element in all large-scale construction and demolition projects.171 And we expect that a plausible decommissioning cost estimate will include an adequate contingency allowance. The contingency allowance is intended to cover unforeseeable events that are almost certain to occur in decommissioning, based on industry experience.172 Funds allocated for contingency typically have been expected to be fully expended.173 These are funds to cover costs considered inevitable in a large project (e.g.,

weather delays, equipment breakage). Contingency funds therefore are an integral part of the total cost to complete the decommissioning process.174 They have not been intended as surplus funds for possible but speculative events but instead funding necessary to cover 171 See, e.g., ENOI Site-Specific Decommissioning Cost Estimate for Pilgrim Nuclear Station, at xii (ENOI Site-Specific DCE for Pilgrim Nuclear Station), attached to ENOI Post-Shutdown Decommissioning Activities Report for Pilgrim Nuclear Station (Nov. ) (MLA).

172 See id.; see also id., §.. at.

173 See id. at xii.

174 See id., §.. at. HDIs contingency analysis may be different than those the NRC typically receives because it encompasses risk events that may or may not occur, including not only potential events that may increase costs but also potential events or opportunities that may offset costs. See DCE at. The % allowance is said to account for both additional costs expected to be incurred and potential discrete risk events that may or may not occur and which would either negatively or positively impact the project objectives. See id.

The dispute we admit centers on whether the % contingency level reflects an adequate contingency level for the Palisades project. At the hearing stage for the merits inquiry, the applicants should provide a substantive description in their briefing materials of how they arrived at the % allowance level, including if appropriate, their estimate uncertainty evaluation model and discrete risk analysis, and as appropriate any other main factors and values underlying the allowance level. The applicants may also address relevant norms and standards for contingency allowances applied to reactor decommissioning cost estimates prepared at a similar decommissioning project stage. The Attorney General will be permitted to file an answer to the applicants brief. We note, additionally, that the NRC has not required site-specific decommissioning cost estimates to encompass funding for highly uncertain costs. An acceptable contingency allowance therefore would not need to include highly uncertain costs.

expected costs.175 Applying an adequate contingency allowance to baseline costs therefore helps both to minimize the risk of a funding shortfall and to mitigate the severity of any potential funding shortfalls.

The Attorney General argues that HDI provided no support for its conclusion that %

reflects an adequate contingency level. The Attorney General showed that the total available funding as projected in the cash flow analysison which this application reliescould fall short of the projected costs if certain higher levels of contingency were applied.176 And the Attorney Generals petition also argues that HDI has not provided adequate support for its assertion that DOE recoveries or other additional funding will still be available in sufficient amounts to allow HDI to adjust funding if necessary.177 The % contingency level bears on all of the estimates relied on in the application because it is applied across the board to the decommissioning, spent fuel management, and site restoration cost estimates. And the purpose of the contingency allowance is to help offset the risk of funding shortfallsa purpose wholly in line with that of the the financial qualifications review. On estimated project costs of $ million, the current projected available funding remaining in is less than $ million; therefore, even a small 175 There are, in addition, potential but highly uncertain events or circumstances that may occur and increase costs. For such highly uncertain potential costs, we rely on the licensees annual funding status reports to identify unanticipated additional costs and if necessary to adjust funding. Similarly, cost judgments that may have been reasonable earlier may need to be readjusted later with real-time information. The annual review process serves to monitor such expenditures and funding adequacy. The annual funding review process, however, is not intended as a substitute for providing reasonable estimates of expected project costs in the site-specific decommissioning cost estimate. An adequate contingency analysis should encompass costs considered historically inevitable and therefore expected.

176 To show that the contingency allowance dispute is material, the Attorney Generals declarant provided examples of what he asserted would be the increase in estimated costs if the %

contingency level were replaced with higher levels consistent with what he argues are industry norms. See Capik Decl. at. While the applicants argue that his calculations should have been better explained, we conclude that for contention admissibility purposes he provided sufficient support to show, based on the cash flow analysis, that the relatively higher contingency levels could result in a funding shortfall.

177 See AG Petition -.

increase in the percentage of contingency expenditures could exceed the available funding. We find that the Attorney General raised a material dispute with the application regarding the adequacy of the allowance level and we admit the dispute for hearing.

e.

Radioactive Waste Volumes and Waste Shipments

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WASTE VOLUMES HDI estimates that the total amount of low-level radioactive waste (Classes A, B, and C) will be about million pounds.178 The Attorney General contends that this is a significantly smaller amount than that associated with actual decommissioning projects.179 The Attorney General identifies two completed decommissioning projects, Maine Yankee and Haddam Neck, which the Attorney General states generated and million pounds, respectively, of low-level radioactive waste. The Attorney General states that both projects involved pressurized water reactors of the same type as Palisades, and that Maine Yankee had about the same generating capacity as Palisades, while Haddam Neck was smaller.

The Attorney General claims that understating the low-level radioactive waste volumes could lead to substantially higher costs than those currently estimated in the site-specific cost estimate. Based on what the Attorney General claims is HDIs average disposal cost, the Attorney General argues that if the current estimated waste volume were increased from HDIs estimated million pounds to the million pounds of low-level waste removed from Maine Yankee, the estimated disposal costs would increase by $. million, which is a greater value than the amount added to the HDI cost estimate for contingency. Additionally, the Attorney General claims that the cost estimate contains no detail to allow for an evaluation of the 178 See DCE at. The projected waste volume in cubic feet is about. million.

179 AG Petition at.

assumptions underlying the total waste volume or why the total waste volume would deviate so significantly from past decommissioning projects.180 The Attorney Generals comparison to two different decommissioning projects does not raise a genuine dispute with the application. First, the decommissioning of Both Haddam Neck and Maine Yankee are known for having involved unusually large amounts of low-level waste.181 That the Maine Yankee and Haddam Neck reactors were pressurized reactors of similar capacity does not suggest that the low-level waste volumes generated during their decommissioning (completed in and, respectively) would be representative of the amount of low-level radioactive waste at Palisades or at any other facility. The Attorney General provided no basis to suggest that these two examples reflect a norm for decommissioning projects, or that these unusually large low-level waste amounts or anything approaching them should be expected at Palisades. Nor is a license transfer applicant or licensee required to 180 See id. at.

181 See PNNL Draft Report at -, Figure. (in comparison with several actual and estimated low-level waste volumes for various plants, the Haddam Neck and Maine Yankee waste volumes are off the scale); see also Applicants Answer to AG at -. As highlighted by PNNLs draft study reassessing the adequacy of the minimum formula, the Haddam Neck and Maine Yankee decommissionings generated notably large quantities of waste. See PNNL Draft Report at -; -, -. The Haddam Neck licensee committed to meet the states more restrictive radiological standards, and because the groundwater beneath the site was classified for residential use, the licensee also committed to meet the Environmental Protection Agencys (EPA) maximum contaminant levels for drinking water of mrem/yr groundwater dose; soils not meeting the applicable requirements were removed as radioactive waste. See id. at - to

-; see also id. at -. Consequently, the volume of LLW generated at [Haddam Neck]

included a significant quantity of contaminated soil that had to be removed to meet the EPA drinking water standards. See id. at -. Even so, the majority of the [low-level waste] was demolition debris having very low activity, much of which was shipped to waste processors for treatment and/or disposal at controlled landfills near Memphis and Oak Ridge, Tennessee, at lower cost than shipment to and disposal at the Clive, Utah, disposal facility. See id. at -.

Also relevant, the subsurface monitoring and records requirements that the NRC established in C.F.R. §.(a)-(b), as part of the Decommissioning Planning Rule issued in,

renders much less likely that a licensee today would discover a significant amount of previously unknown soil contamination. See Decommissioning Planning, Final Rule, Fed. Reg.,,

, (June, ). In any event, the Attorney General does not provide an adequate link between Palisades and the low-level waste volumes from these two decommissioning projects.

compare its own site-specific estimated low-level waste volumes to those of other projects. The Attorney General also did not identify what nature of detail she claims should have been provided.

Further, none of the claims that the Attorney General raises suggests that million pounds is either a relatively small volume of low-level waste for a nuclear power reactor generally, or, more significantly, an implausibly small amount for Palisades. The application states that HDI used ENOI estimates of the type and quantity of waste as a reference condition and increased specific waste streams to reflect the HDI decommissioning approach.182 The Attorney General does not claim that HDIs estimated low-level waste quantities are uncharacteristically low projections.183 While the Attorney General is correct that a petitioner need not prove their case at this stage, it is the petitioners burden to provide the information necessary to satisfy the contention admissibility requirements and to demonstrate a genuine dispute with the application.184 The Attorney Generals arguments challenging the estimated volume of low-level waste do not establish a supported genuine dispute with the application.

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TRANSPORTATION OF RADIOACTIVE WASTE The Attorney General also raises a transportation-related claim regarding radioactive waste. Citing to the PSDAR, the Attorney General notes HDIs intent to transport Class A 182 See Application, Attach. E at.

183 Site-specific decommissioning cost estimates submitted to the NRC routinely provide projected low-level radioactive waste quantities. See, e.g., ENOI Site-Specific DCE for Pilgrim Nuclear Station, Section, at (tbl.., Decommissioning Waste Summary).

184 See, e.g., Baltimore Gas & Electric Co. (Calvert Cliffs Nuclear Power Plant, Units and ),

CLI--, NRC, (); see also Interim Storage Partners, LLC (WCS Consolidated Interim Storage Facility), CLI--, NRC, () ([I]t is the petitioners burden to explain why a contention should be admitted.).

low-level radioactive waste and certain other waste using a combination of truck and rail.185 Because there is no active rail at Palisades, the PSDAR also states that a truck will be used to deliver the waste to a transload facility. HDI further states that it might elect to ship large plant components by barge.

The Attorney General argues that if trucks are used to transport the decommissioning waste, Michigan residents are likely to be harmed by noise, dust, traffic, pollution emissions, damaged infrastructure, and an increased potential for accidents. The Attorney General observes that the NRCs Generic Environmental Impact Statement for Decommissioning evaluated the environmental impacts of truck shipments. The Attorney General argues, however, that the GEIS describes the expected number of truck shipments during decommissioning to average much less than one per day, while the Attorney General concludes that, based on the HDIs estimated low-level waste volumes, the Palisades waste volume could result in over. shipments per day on average.186 Noting that C.F.R.

§.(a)()(ii) prohibits licensees from performing decommissioning activities that result in significant environmental impacts that have not been previously reviewed, the Attorney General argues that the PSDAR does not explain how the truck shipments of waste will not result in changes to local traffic or damage local infrastructure and that the license transfer application does not address how the planned Palisades activities will conform to the GEIS.187 The Attorney Generals claims fall beyond the scope of this proceeding. The proceeding is focused on the transfer of the Palisades and Big Rock licenses: whether the proposed 185 See AG Petition at - (citing PSDAR at ).

186 See id. at & n. (citing Generic Environmental Impact Statement on Decommissioning of Nuclear Facilities, Supplement Regarding the Decommissioning of Nuclear Power Reactors (Final Report), NUREG-, Supplement, vols. - (Nov. ) (ML)

(Decommissioning GEIS).

187 See AG Petition at.

transferees have shown that they are qualified technically and financially to hold the Palisades and Big Rock licenses.188 The proceedings limited scope does not encompass a review of the potential environmental impacts of HDIs planned decommissioning activities. While select parts of a PSDAR are necessarily relevant to license transfer because they directly relate to financial and technical qualifications, most topics addressed in a PSDAR do not fall within the license transfer review.189 The environmental impacts of decommissioning do not fall within the scope of a license transfer proceeding.

In addition, the NRC has determined by rule that certain categories of licensing actions do not individually or collectively have a significant effect on the environment. Except in the case of special circumstances as determined by the Commission, no environmental assessment or environmental impact statement is required for these categories of licensing actions, which are categorically excluded from the need to prepare an NRC analysis under the National Environmental Policy Act (NEPA). License transfer actions are among the categories of action that the NRC has categorically excluded from the need to perform additional environmental analysis.190 Consequently, unless we determine that special circumstances are present, an 188 See C.F.R. §.(b) (addressing what information a license transfer application must contain).

189 The PSDAR provides a general overview for the public and for the NRC of the licensees proposed decommissioning activities. See Decommissioning of Nuclear Power Reactors, Final Rule, Fed. Reg.,,, (July, ) (Decommissioning Rule). It also informs the NRC staff of the licensees decommissioning schedule, enabling the staff to plan for inspections and decommissioning oversight activities. The NRC will provide public notice of a PSDAR and an opportunity for public comment, and it will hold a public meeting on a PSDAR. But a PSDAR does not require NRC approval. This is because a PSDAR does not authorize a licensee to perform any decommissioning activity that is not already permitted under the license or any activity that would result in significant environmental impacts not already reviewed. A licensee that has submitted certifications of permanent cessation of operations and permanent removal of fuel therefore may begin to perform major decommissioning activities consistent with its PSDAR ninety days after the NRC has received the PSDAR. See C.F.R. §.(a)().

190 See C.F.R. §.(c)(). A categorical exclusion reflects that the NRC has established a sufficient administrative record to show that the subject actions do not have a significant effect

environmental assessment or environmental impact statement is not required for an NRC approval of direct or indirect license transfers.

The Palisades license transfer application states that the proposed transfer falls within the categorical exclusion regulation.191 The Attorney Generals petition does not address the categorical exclusion for license transfers. To the extent that the Attorney General is claiming that additional environmental analysis of the potential impacts of truck shipments of waste is necessary for approval of this license transfer application, such a claim impermissibly challenges the categorical exclusion regulation.

The Attorney General on reply seeks to recast the radioactive waste shipment claims as within the scope of this proceeding by describing them as relating to adequate financial assurance to conduct decommissioning in a safe and timely manner.192 But it is well established in NRC proceedings that a reply cannot expand the scope of the arguments set forth in the original hearing request.193 The transportation arguments raised in the petition expressly challenged the adequacy of environmental analyses, not any financial assurance information. Nor do the replys new general statements about financial assurance raise a genuine and material dispute for hearing.

on the environment, either individually or cumulatively. See Categorical Exclusions from Environmental Review, Final Rule, Fed. Reg.,,, (Apr., ).

191 See Application at.

192 See AG Reply at (claiming that petitions arguments on waste shipments are factual disputes that could significantly impact the decommissioning cost estimates).

193 See Nuclear Management Co., LLC (Palisades Nuclear Plant), CLI--, NRC, -

().

f.

Unaddressed Risks

()

DELAY The Attorney General argues that there are at least seven ways that HDI may encounter significant, unaccounted for, cost overruns that could lead to a shortfall in funding. The Attorney General first argues that there likely will be delays in the Palisades work schedule, leading to increased costs for overhead and project management. The Attorney General claims that the risk of delay in the decommissioning schedule exists in all decommissioning projects for reasons including identifying unknown conditions requiring expanding the scope of planned activities or creating the need for additional activities.194 Such delays, the Attorney General claims, would both directly increase decommissioning costs and increase the costs of overhead and project management. The Attorney General additionally states that HDI identified a delay in the Pilgrim decommissioning schedule, which lengthened the schedule by. to years.

These arguments regarding delay essentially fall within two categories: delays of a nature common to all decommissioning projects and that therefore are expected to occur and delays due to unanticipated circumstances that significantly expand or change the scope of the project. As to the former, the contingency allowance that is customarily added to the site-specific decommissioning cost estimates is intended to account for those additional costs considered historically inevitable over the duration of a job of this magnitude, such as from weather delays and tool breakages, among others.195 The allowance added to the Palisades site-specific decommissioning cost estimate therefore should reasonably encompass such events, which although they cannot be predicted individually are common eventualities expected to occur. And we have admitted for hearing the Attorney Generals challenge to the 194 See AG Petition at ; see also Capik Decl. at -.

195 See, e.g., ENOI Site-Specific DCE for Pilgrim Nuclear Station, Section.. at ; Full TLG Services Cost Study, Section at.

sufficiency of the Palisades contingency allowance. This proceeding therefore will include taking a closer look at the overall adequacy of the % contingency allowance level to cover generally the typical and expected occurrences that add to project costs.

As to potential delays due to HDI identifying unknown conditions that will require expanding the scope of planned activities, it has been neither required nor customary for NRC site-specific decommissioning cost estimates to provide additional margins for uncertain events that would significantly expand or change the planned scope of the decommissioning project.196 Rather than require cost estimates to provide for numerous potential but uncertain events, we rely on our monitoring of each licensees decommissioning and spent fuel management funding to require adjustments to funding if and when needed. Once a licensee has submitted to the NRC a site-specific decommissioning cost estimate, it must annually provide both a decommissioning funding and a spent fuel management funding status report. The decommissioning report includes specific information on how much money was spent the previous calendar year on decommissioning, whether and to what degree the previously estimated costs deviated from the actual costs spent on work performed, and the estimated remaining costs to complete the decommissioning.

Any circumstancewhether delay-related or notthat results in a significant, unanticipated cost would need to be reported in the yearly decommissioning funding and financial assurance status reports, which are publicly available. NRC guidance on adjusting cost estimates also directs licensees to update decommissioning cost estimates annually for inflation, and as appropriate for status changes, including updated information about the 196 See, e.g., ENOI Site-Specific DCE for Pilgrim Nuclear Station, Section at - (where contingency analysis states that revisions or updates of the cost estimate will be made to account for changes in project work scope due to events such as the discovery of unexpected levels of contaminants, contamination in places not previously expected, variations in plant inventory or configuration not indicated by as-built drawings, changes in site release criteria, policy decisions altering national commitments including the start and rate of acceptance of spent fuel by the DOE).

facility conditions, such as larger levels of contamination than anticipated; updated waste disposal conditions; updated residual radioactivity limits.197 To date licensees typically have included an allowance in the site-specific cost estimates to cover the uncertainties associated with common, expected contingencies given the projects scope; additional significant costs, if any, for activities that significantly alter or expand the projects scope would need to be reported in the annual financial assurance status reports, with any associated adjustment to financial assurance, if necessary, provided accordingly in the report.198 Licensees also must notify the NRC and the affected State in writing before making any significant schedule change from those schedules and actions described in the PSDAR, including changes that significantly increase cost.199 That HDI changed its decommissioning schedule for Pilgrim does not mean the same will occur at Palisades, and in any event, the two last decommissioning funding status reports for Pilgrim do not indicate a projected shortfall in funding.200 The Attorney Generals claim that the schedule delay at Pilgrim resulted in overhead and project management cost increases that can be estimated to be as much as $ million is unsupported and does not raise a genuine dispute with the Palisades application.201 197 See Regulatory Guide. at.

198 See C.F.R. §.(a)()(v) (if financial assurance methods being relied on will not cover the estimated cost of decommissioning completion, the financial assurance status report must include additional financial assurance to cover the cost).

199 Id. §.(a)().

200 See e.g., Letter from Andrea L. Sterdis, HDI, to NRC Document Control Desk (Mar., )

(MLA), Encl., Annual Decommissioning Funding Spent Fuel Management and Financial Assurance and Spent Fuel Management Status and Financial Assurance Report, tbl.

at. HDIs last two status reports cover both the Pilgrim and Oyster Creek decommissioning projects and the associated trust funds.

201 See AG Petition at.

The Attorney Generals various claims of potential delays in work schedule leading to increased costs do not identify a material deficiency in the application. That there can be delays in any decommissioning project does not raise a supported and genuine material dispute with this application. As we noted, the contingency allowance customarily has covered the sort of delays inevitable in decommissioning projects, and the Attorney General will have the opportunity to litigate whether the contingency allowance is adequate. To the extent that the Attorney General claims that there may be substantial unanticipated cost increases from substantial delays, the claims are speculative or otherwise unsupported, or they demand a level of conservatism of these estimates that we do not require or expect. The Attorney Generals arguments regarding potential delays do not raise a genuine material dispute for hearing.

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POSSIBILITY OF DISCOVERING UNKNOWN CONTAMINATION; RISK OF RADIOLOGICAL INCIDENT We similarly find that the Attorney Generals argument that there is the possibility of discovering previously unknown radiological or non-radiological contamination does not raise a supported material issue.202 As the Attorney General recognizes, the common application of contingency in [NRC] cost estimates is for uncertainty associated with known scope, not changes in work scope such as additional work required to deal with unexpected contamination.203 If previously unknown radiological contamination is discovered and the newly-discovered contamination would result in significant additional expenditures to clean up, the estimated additional costs would need to be included in the annual decommissioning status funding report and the site-specific decommissioning cost estimate adjusted as appropriate.

The Attorney General also does not identify any reason to expect that significant unknown contamination likely would be discovered at the Palisades site. HDI states that it 202 See id. at.

203 See id. at.

reviewed the Palisades records of spills and other unusual occurrences involving the spread of contamination, which are records that licensees must maintain under C.F.R. §.(g). It states that the events involving the spread of contamination in and around the facility are well documented and the fate and transport of contaminants are generally understood.204 And we expect that the likelihood of a licensee in decommissioning discovering significant amounts of previously unknown contamination has decreased substantially due to the requirements of the Decommissioning Planning rule. The rule requires licensees to conduct subsurface radiological surveys to evaluate concentrations or quantities of residual radioactivity, and it requires them to maintain the survey results as records important to decommissioning.205 The Attorney General also claims that the application and PSDAR do not identify specific plans for performing site characterization activities to identify, categorize, and quantify radiological and non-radiological contamination.206 But by rule the NRC only requires a full site characterization to be submitted with a license termination plan, which must be submitted at least two years before the date of license termination and which also must include an updated site-specific decommissioning cost estimate. For Palisades, the current schedule projects the license termination plan to be submitted in early.207 Approval of the license termination plan requires a license amendment and therefore would be subject to an opportunity for hearing. And while the PSDAR and the application need not describe specific plans for a site 204 See DCE at.

205 See C.F.R. §.(a)-(b).

206 See AG Petition at.

207 See DCE at ; see also C.F.R. §.(a)()(ii)(A), (F).

characterization, the PSDAR and cost estimate nevertheless indicate the general project stages or timetables in which HDI intends to perform site characterization activities.208 The Attorney General next argues that there is a risk of a radiological incident at the site, such as during the transfer of spent fuel into dry casks. The Attorney General claims that such an incident could greatly increase the costs of decommissioning, as well as cause delay that would impact project management and overhead costs.209 For the reasons already described, we do not require the site-specific cost estimate to include estimated costs or allowances to cover highly uncertain contingencies such as substantial delay caused by a potential significant accident event. Such events, if they were to occur and if they added significantly to costs, would need to be reflected in revised cost estimates and the annual decommissioning funding status report.210

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STATE STANDARDS FOR SITE RESTORATION The Attorney General additionally challenges HDIs estimated cost of site restoration, which is $,,. The NRC does not regulate site restoration. Site restoration also does not fall within the NRCs definition of decommissioning in C.F.R. §., and therefore under NRC regulations the decommissioning trust fund cannot be used to pay for site restoration 208 For example, the PSDAR states that site-wide characterization activities to identify, categorize, and quantify radiological, regulated, and hazardous waste will begin in Period (Pre-Decommissioning Planning and Preparation Activities) with surveys to establish contamination and radiation levels, but will not be completed until Period (Dismantlement).

See PSDAR at -. As the Attorney General notes, some characterization cannot be completed until some amount of dismantlement is performed. See AG Petition at. The Palisades master summary schedule projects site characterization to be performed during the demolition/dismantlement period and completed in, the first year following the end of the dormancy period. See DCE at.

209 AG Petition at.

210 Further, to the extent that a radiological incident event might cause damage to onsite property, the application specifies that Holtec Palisades, as a regulatory commitment, will obtain onsite property damage insurance, and will provide proof that the coverage will be in place on the effective date of the license transfers. See Application at.

expenses. The estimated cost of site restoration falls within the scope of this proceeding, however, because HDI also seeks an exemption allowing it to use the decommissioning trust fund for site restoration activities. HDI intends to begin site restoration activities only after the dormancy period. Site restoration would be performed concurrently with radiological decommissioning activities, starting in late and extending through, the year HDI expects the license to be terminated.211 The Attorney General argues that either state requirements beyond those assumed by HDI or unanticipated site conditions could require greater expenditures for site restoration.212 Because site restoration will be performed in parallel with license termination, the Attorney General argues that Michigan site restoration requirements beyond those assumed in the estimated costs would reduce the funds available for radiological decontamination and license termination. The Attorney General further argues that the application and PSDAR do not identify the requirements for site restoration that were assumed to apply, and that there is no provision for contingency or allowances to account for any state requirements beyond those assumed for the estimates. And the Attorney General notes that in the cost study for Palisades the site restoration costs were estimated to be $. million in dollars (an amount which the Attorney General claims in dollars would be $. million).

In short, the Attorney General argues that increased site restoration costs due to state requirements could impact whether funding remains adequate to cover all license termination and spent fuel management activities. But to litigate a claim about potential additional costs due to state standards, it was incumbent upon the Attorney General to identify the state standards of concern. The PSDAR identifies the categories of wastes and some of the specific contaminants to be removed during the site restoration process, including asbestos, lead in paint, hazardous 211 See DCE at, tbl.- (Cash Flow Analysis).

212 See AG Petition at.

waste, and universal waste.213 The cost estimate also states that approximately $ million of estimated costs are for cleaning up asbestos.214 Mixed wastes also are noted, and HDI states that they are to be managed according to applicable federal and state regulations, and identifies three potential vendors that may be utilized.215 But the Attorney General does not address any specific part of the application, the PSDAR, or the cost estimate. Nor does the Attorney General identify any contaminant or waste category that the Attorney General claims may be especially difficult and costly to remediate to applicable state standards. The petition therefore has no discussion of any contaminants or state standards that the Attorney General claims may materially drive up site restoration costs.

Consequently, we find insufficient the Attorney Generals suggestion that more detail was necessary to formulate an argument on state standards that may impact site restoration costs.

The Attorney General also refers to the Palisades cost estimate, which estimated a notably larger cost for site restoration ($. million in dollars). But while the full study is available publicly and provides a detailed, line-item cost breakdown of costs, including costs allocated to site restoration, the Attorney General neither addresses any contents of the study to challenge HDIs site restoration estimate nor otherwise links the study to her argument that state law standards beyond those assumed in the current estimate could 213 See PSDAR at (citing Environmental Protection Agencys definition of universal waste at C.F.R. §.). Universal wastes addressed by Environmental Protection Agency regulations include batteries, pesticides, mercury-containing equipment, and lamps, and the PSDAR notes that states may have corollary regulations governing these materials, as well as corollary regulations for additional materials. See id. at n.; see also, e.g., DCE at,, -

214 See DCE at, tbl. -. HDI lists the asbestos removal cost under license termination costs.

There often is some overlap between the site restoration and license termination cost categories. If it is necessary, for instance, to remove asbestos or lead to access radiological contamination, or vice versa, removal costs might be allocated to one or the other category or divided between the two as appropriate.

215 See id. at.

increase costs.216 HDI had no obligation in the application to compare its estimate to another licensees estimate.

The Attorney Generals claims of unspecified state requirements that could require greater expenditures for site restoration do not raise a supported genuine dispute with the application and we therefore find them inadmissible.

()

REPACKAGING OF SPENT NUCLEAR FUEL AND OTHER DOE-RELATED CLAIMS The Attorney General raises the potential for additional costs relating to spent nuclear fuel repackaging for transportation by DOE. First, the Attorney General argues that while HDIs decommissioning costs appear based on an assumption that DOE will accept the current, as-packaged canisters for dry storage and will not require repackaging for transportation, absent a change to the Standard Contract HDI would need to repackage the spent nuclear fuel into non-canistered DOE casks prior to transportation.217 The Attorney General states that in litigation to recover damages for DOEs partial breach of contract, Entergy and other licensees have argued that DOE has the authority to mandate licensees to repackage their spent fuel into DOE-approved transportation casks, and that DOE has stated that without an amendment to the Standard Contract it will not accept canistered fuel for transportation.

The Attorney General also claims that repackaging costs could be significant, particularly because the repackaging would occur after the spent fuel pool has been decommissioned.218 The Attorney General states that without the spent fuel pool, repackaging might first involve transporting the fuel to another plant site, or building an onsite dry transfer stationactions that could lead to cost overruns on the order of hundreds of millions of dollars, as indicated by a Government Accountability Office estimate of $ to $ million for construction of a fuel 216 See Full TLG Services Cost Study, Appendix C (Detailed Cost Analysis) at -.

217 See AG Petition at.

218 See id. at.

transfer station.219 In short, the Attorney General claims that there is no indication that the cost estimate accounts for the operating costs to remove the fuel from the current casks and then to package that fuel into DOE provided transportation casks.220 The applicants, however, identify nearly $ million allocated for the transfer of fuel and/or nuclear material away from the ISFSI, which they state includes the estimated costs to repackage in transportation casks.221 In her reply, the Attorney General does not specifically address the line-item estimate for spent fuel transfer or its adequacy. Instead, the Attorney General maintains that HDI has not accounted for the cost of removing spent fuel from the existing as-packaged canisters for dry storage, and that the application and decommissioning cost estimate assume that DOE will not require repackaging for transportation.222 While the precise scope of actions covered by HDIs line-item cost are not clear, the Attorney Generals repackaging claims are insufficient to show a material dispute with the application. First, except for raising the possibility of a need to build a fuel transfer station, the Attorney General never suggested how much it may cost to remove fuel from existing canisters and repackage it into DOE-provided transportation casks. The applicants highlighted that the cost estimate includes an estimated $ million for fuel transfer costs, including the repackaging or loading of fuel into transportation casks. But while the Attorney General states that canister removal costs are not considered, the Attorney General does not suggest how much such costs might be. The Attorney General does not address the adequacy of the allocated $ million to cover transferring fuel from the ISFSI to DOE-supplied transportation.

219 See id. at & n. (citing November GAO report on nuclear waste management challenges and costs for Yucca Mountain Repository).

220 See id. at.

221 Applicants Answer to AG at.

222 See AG Reply at.

A license transfer proceeding is not intended to be a line-item by line-item refinement of a decommissioning cost estimate. If a petitioner claims that a specific cost was overlooked, its materiality must be supported. The Attorney General does not provide us a basis for concluding that the potential additional costs of first removing the current spent fuel canisters prior to loading the spent fuel into DOE casks may be a material additional expense that may call into question the applicants financial qualifications to hold the licenses.

The only argument contained in the petition and reply related to the asserted cost of repackaging fuel is that there could be cost overruns on the order of hundreds of millions of dollars.223 But this claim rests on an estimated cost to construct an onsite dry transfer station, which in turn is based on the Attorney Generals assumption that repackaging... would occur after the Palisades spent fuel pool has been decommissioned.224 Yet dismantlement of the spent fuel pool is not planned until after the dormancy period when major decommissioning activities begin.225 Second, whether DOE ultimately will only accept bare, uncanistered spent nuclear fuel in DOE transportation casks, or will also accept fuel packaged in some types of canisters is not yet known.226 The Attorney General states that its fuel repackaging claim is not a technical 223 See AG Petition at ; Capik Decl. at ; AG Reply at.

224 See Capik Decl. at.

225 See PSDAR at (fuel pool drainage, decontamination, liner removal, and dismantlement to occur [f]ollowing the dormancy period); DCE at, (dormancy period ends at end of );

DCE at (DOE scheduled to begin removing fuel in ).

226 Canisters are steel containers for the spent nuclear fuel assemblies. Some canisters are designed only for storage, and others, such as dual-purpose canisters, are designed for storage and transportation. Regardless of design, the NRC must approve canisters for transportation (or grant an exemption from NRC transportation regulations). See C.F.R. pt.

(requirements for packaging and transportation of radioactive material). Canisters may be used in combination with storage casks and transportation casks, and the Attorney Generals issue goes to whether DOE will ultimately accept already-canistered spent nuclear fuel for loading into DOE transportation casks.

argument over whether a transportation cask can physically accept the loaded canisters, but is instead based on interpretations of contractual obligations under the Standard Contract reached in decisions awarding damages for spent fuel management expenses due to DOEs contract breach. But these decisions do not establish how DOE ultimately will perform in transporting the fuel, and the Attorney General recognizes that DOE has not determined how it will transport the fuel (e.g., if... DOE were to mandate fuel repackaging).227 We have stated, moreover, that because future spent fuel packaging requirements for DOE transportation remain highly uncertain we find it premature at this time to assume, for purposes of decommissioning funding requirements, what types of canisters that DOE may or may not accept for transportation.228 In NRC practice we have not required site-specific decommissioning cost estimates to include specified funding for removal of current canisters and will not presume, as a reason to deny a license transfer, that DOE will likely succeed in requiring licensees to bear additional fuel-packaging expenses.229 What DOE ultimately determines will have broad application to many licensees. If additional financial needs relating to spent fuel transportation become clearer, the NRC can to the extent necessary require adjustments to decommissioning funding.

227 See Capik Decl. at (emphasis added). In the case cited by the Attorney General, the court assessed damages for a licensees costs to load fuel into storage canisters and storage casks.

Except for the partial breach of contract, the licensee would have loaded the spent fuel directly into DOE transportation casks and would not have needed to load fuel into storage canisters and casks. Although the government represented that the Standard Contract could be modified and therefore these storage casks may be deemed suitable for transportation, the court would not preclude awarding damages on a set of facts that may come into being in the future. See System Fuels, Inc. v. United States, F.d, (Fed. Cir. ).

228 See Indian Point, CLI--, NRC at.

229 See Pilgrim, CLI--, NRC at.

(a)

Transportation of Storage-Only Fuel Canisters Relatedly, the Attorney General raises as an additional potential cost the need to reload the spent fuel in VSC-storage casks that are licensed to store but not licensed to transport spent fuel. The Attorney General notes that work has been performed to pursue NRC approval of the casks for transportation but that the licensing effort was not completed. The Attorney General therefore argues that either the spent fuel from these canisters must be reloaded into licensed transportable canisters or additional work must be performed to license these canisters for transportation (assuming that this licensing is even feasible).230 The applicants do not dispute that these canisters are not currently licensed for transportation but they state that the costs of repackaging the VSC-casks in transportation casks are addressed by the $ million line-item cost estimate allocated to transfer of fuel away from the ISFSI.231 The Attorney General argues that this estimate addresses only the costs...

to move those as-loaded canisters to a DOE cask, and not the costs to first unload the fuel from existing canisters and move the fuel to a DOE cask.232 The Attorney General disputes whether applicants provided evidence that they have sufficient funds to cover all the costs involved with repackaging the VSC-casks.233 But again, the Attorney General provides no supporting information on whether and to what extent the highlighted $ million allocated for fuel transfer away from the ISFSI may be insufficient. In neither the petition nor the reply is there any estimated cost for the reloading of the spent fuel from the VSC-canisters into transportable canisters. And even after the applicants highlighted the line-item cost intended to cover repackaging into DOE casks, a cost 230 See AG Petition at -.

231 See Applicants Answer to AG at.

232 See AG Reply at.

233 See id.

category intended to cover transfers of fuel assemblies into the DOE transfer casks, the Attorney General did not address the adequacy of the $ million fuel transfer estimate regarding what potential amount of additional costs (e.g., for the unloading of fuel) that the Attorney General claims is not accounted for in that estimate. Challenges to the site-specific cost estimate must be supported and identify a material cost omission or material understatement that may impact the overall financial qualifications of the applicants; these claims do not. 234 (b)

DOE Seeking to Recover Earlier Packaging Costs We also find inadmissible the Attorney Generals additional argument that if DOE accepts and removes spent fuel without requiring prior repackaging it might seek to recover all or some of its past payments for the original packaging of the fuel into storage canisters and storage casks.235 We have no basis to presume that DOE would be likely either to assert or to prevail on a claim to recover damages previously awarded to licensees due to DOEs partial breach of contract. The Attorney General replies that this issue ties in with its repackaging claim and is related to the inherent uncertainty created by the process.236 234 In addition, as the Attorney General notes, whether repackaging will be required is yet uncertain; there remains the potential that the canisters may ultimately be licensed for transportation or an exemption under Part obtained. See AG Petition at. Further, the Attorney General acknowledges that DOE would be liable for reimbursing Holtec for the costs to repackage the VSC-casks. While the Attorney General argues that DOE reimbursements would not completely mitigate the potential additional expense because there are cashflow and timing issues and the applicants have not committed to use DOE recoveries, the hearing granted in this decision at any rate will address Holtecs means to adjust funding, as addressed further below. See id. at -.

235 See Capik Decl. at -.

236 AG Reply Brief at.

Again, we do not expect license transfer applicants to commit funding to cover the costs of speculative scenarios.237 For such highly uncertain contingencies we have the ability to address any major new exigencies through the annual respective financial status reviews of decommissioning and spent fuel management funding. These are national policy questions with broad application to NRC nuclear power reactor licensees. And for the license transfer proceeding, we have said that we see no reason to require that a transfer applicants cost estimate be more detailed, more certain, or more conservative than the site-specific estimate submitted by a current licensee.238 The Attorney Generals uncertain scenarios do not call into material question the adequacy of the applicants financial qualifications demonstration for this license transfer.

(c)

Indefinite Storage As an additional DOE-related potential cost overrun, the Attorney General argues that DOE may fail to remove all spent fuel by the end of, and therefore Holtec may need to repackage the spent fuel one or more times as a required maintenance activity. The Attorney General claims that if DOE does not pick up the fuel by the end of, Holtec will begin to incur significant and ongoing cost overruns that could go on for many decades if not indefinitely.239 In such an indefinite storage scenario, the Attorney General also claims that with no spent fuel pool remaining onsite there would need to be a new dry fuel transfer station to transfer spent fuel into new dry casks every years. The Attorney General argues that it is 237 See AG Petition at (emphasis added) (If DOE pursues such recovery and is successful, this could lead to significant [costs]); see also Indian Point, CLI--, NRC at (finding no reason to presume that DOE will identify a valid contractual claim, pursue that claim, and succeed in requiring licensees to bear additional packaging-related costs, and further noting that such an issue is not appropriate for resolution in an NRC adjudicatory hearing).

238 Pilgrim, CLI--, NRC at ; see also Indian Point, CLI--, NRC at -.

239 See Capik Decl. at.

unknown how Holtec would provide for the possible contingency of indefinite onsite storage, including transferring fuel into new dry casks every years.

There will be uncertainties until we know more about actual DOE timetables and requirements. But that indefinite storage is possible does not make it likely, and the NRCs GEIS for the Continued Storage Rule also supports as a reasonable conclusion that a geological repository will become available.240 Interim storage options also plausibly may become available in the shorter term, particularly given that the NRC has recently approved an application for an interim storage facility and is actively reviewing another.

In issuing the Continued Storage Rule, the NRC stated that the agency will continue to monitor changes in national policy and developments in spent fuel storage and disposal technology.241 If future developments warrant, licensees could be required to amend their licenses, which would be accompanied by site-specific safety and environmental reviews.242 At this time, however, we decline to require license transfer applicants (or current licensees) to predict how the cost of an indefinite storage of spent fuel would be borne if indefinite storage were to be necessary.243 For all these reasons the Attorney Generals assertions of no certainty that DOE will have removed all fuel by and of the possible contingency of 240 See Pilgrim, CLI--, NRC at (citing the Continued Storage GEIS and describing GEISs conclusion that safe storage of spent fuel in a geologic repository is technically feasible using currently available technology, with no major breakthrough in science or technology needed, and that to years [is] a reasonable period for repository development); Generic Environmental Impact Statement for Continued Storage of Spent Nuclear Fuel (Final Report),

NUREG-, vol. (Sept. ), app. B, at B-, B-to B- (MLA).

241 See Continued Storage of Spent Nuclear Fuel, Final Rule, Fed. Reg.,,,

(Sept., ).

242 See id.

243 Additional costs for any additional years of spent fuel management handling beyond a licensees original projections would need to be managed through changes to the spent fuel management plan and associated funding and would be monitored through our annual oversight of the status of spent fuel management funding. The year-to-year expenses for spent fuel management are relatively stable and predictable.

indefinite onsite storage are not sufficient to raise a material question with the application.244 That HDIs decommissioning cost estimate (like all others) does not include additional funding for the still uncertain prospect of indefinite storage does not present a material issue in this license transfer proceeding.

g.

Trust Fund Growth Rate Assumptions The Attorney General challenges HDIs assumption of a % real rate of growth (actual return minus inflation) on the decommissioning trust fund. The Attorney General claims that during reactor operation decommissioning trust funds often are invested in a manner that would make the two percent real growth assumption permitted by the NRC reasonable, but that continued growth on a year-by-year basis is not a certainty.245 The Attorney General states that the Palisades trust fund during certain periods of operation grew at a smaller rate than %

or experienced losses. A % real rate of return assumption is even less reasonable after permanent shutdown, the Attorney General claims, because decommissioning trust funds then are invested more conservatively than during operation.246 The Attorney General does not argue that the NRCs regulations allowing for a % real rate of growth do not apply to the applicants or were improperly applied by them. On the contrary, the Attorney General states that HDI assumed the % real rate of growth consistent with the upper limit allowed by NRC regulations.247 The Attorney General argues that given how decommissioning trust funds have been invested following permanent shutdown, the %

real rate of return is an unrealistic assumption for HDI to make in its analysis.248 244 AG Petition at -.

245 Id. at.

246 Id. at.

247 See id. at ; see also C.F.R. §§.(e)()(i),.(a)()(vi).

248 See AG Reply at.

But these claims effectivelyand impermissiblychallenge our regulations allowing licensees to take credit for up to a % real rate of return; the regulations do not exclude or otherwise limit licensees of permanently shutdown reactors. Absent a waiver, NRC regulations cannot be challenged in an adjudicatory proceeding.249 In allowing licensees to assume the %

real rate of return, the NRC considered various factors and eventualities, including that actual rates could prove to be lower. The NRC stated that if rates turn out to be lower... C.F.R.

. already provides that licensees are to adjust decommissioning funds during safe storage to reflect changes in cost estimates, and that reporting requirements will allow the licensees decommissioning funds to be monitored by the Commission.250 Similarly, here if during the dormancy period the levels of funding do not adhere to HDIs projections, whether due to underestimated costs or lower rates of returns, HDI would need to adjust its funding.

h.

Inability to Provide Additional Financial Assurance As the last issue in Contention MI-, the Attorney General challenges the adequacy of Holtecs assertion in the application that it has the means to adjust both cost estimates and associated funding levels over the dormancy period to ensure that the necessary funding will be available at the time of decommissioning. We admit this claim for hearing.

HDI projects major decommissioning activities to begin in December, following the dormancy period, with final license termination scheduled to occur at the end of.251 Under NRC regulations, for decommissioning activities that delay completion of decommissioning by including a period of storage or surveillance, the licensee must provide a means of adjusting cost estimates and of adjusting the associated funding levels over the storage or surveillance 249 See C.F.R. §.(a) (prohibiting challenges to regulations in adjudicatory proceedings unless a rule waiver was sought and granted). The Attorney General did not seek a waiver.

250 See Financial Assurance Requirements for Decommissioning Nuclear Reactors, Proposed Rule, Fed. Reg.,,, (Sept., ).

251 See DCE at.

period.252 To address this requirement, the application states that should there be a need to adjust the available funding then [r]eimbursement of spent fuel management expenses by DOE, which is not credited in the cash flow analysis... would provide a substantial source of additional funds that could be used to provide such adjustment if necessary.253 The Attorney General challenges this assertion as insufficiently supported.

The Attorney General claims that no analysis supports the statement that DOE reimbursements would be available as a substantial source of additional funds if such funding were needed to offset a substantial cost overrun in decommissioning, and that no commitment has been made to retain any potential DOE reimbursement for this purpose. 254 The Attorney General further argues that following the dormancy period, the expected DOE recovery would largely be limited to the on-going costs of spent fuel management, and that consequently, even if these later recoveries from DOE were retained to buttress the trust fund they would not offset any substantial overrun in decommissioning costs.255 The Attorney General does not question 252 See C.F.R. §.(a)()(iv).

253 See Application at.

254 The Attorney General challenges both () the cost estimates general statement that an alternate funding mechanism allowed by CFR.(e) will be put into place if the trust fund proves insufficient, and () the applications more specific assertion that DOE reimbursements would provide a substantial source of additional funds that could be used to adjust funding if needed. See AG Petition at - (citing DCE at and also directly challenging the applications assertion that DOE reimbursements will provide the means to adjust funding); see also id. at - (citing Application at ).

255 See id. at. Specifically, the Attorney General claims that the total DOE recovery during license termination activities from through would only be about $. million, which the Attorney General argues would only offset continuing ISFSI operating and maintenance costs. See AG Petition at (describing reasoning behind calculation). The Applicants contest the $. million estimate as a fanciful claim, lacking reasonable support. See Applicants Answer to AG at. They claim that between the years through approximately $

million in spent fuel management costs will be incurred, about $ million more than the Attorney General suggests; the additional amount over $. million would account for the costs of loading the DOE-supplied transportation casksthe recovery of which the Attorney General views as uncertain but the applicants call plausible. See id.

that Holtec will be able to recover from DOE the bulk of the spent fuel management costs incurred.256 Rather, the Attorney General calls [t]iming the big issue with regard to this item whether funds recovered from DOE in years past would still be available to adjust funding later in the event of a shortfall.257 The Attorney General argues that reliance on the DOE recoveries to adjust funding only makes sense if those funds are escrowed for such a purpose, and that the [a]pplication repeatedly wants to rely on those funds to demonstrate assurance but steadfastly refuses to commit to retain those funds for this purpose.258 The Attorney General further argues that to accept without more Holtecs often repeated statement in its Answer that it will have the funds, if necessary,... would eviscerate the need for any detail in a license transfer application.259 The applicants state that they have provided their cash flow analysis reflecting the annual spent fuel management costs that Holtec Palisades may seek to recover from DOE, The applicants also note that Holtec Palisades can seek DOE recovery for spent fuel management claims incurred over a considerably longer time period, amounting to a total of about $ million. See id. In admitting the Attorney Generals issue regarding the ability to provide additional funding, we do not rely on the estimated amount of $. million as the amount that might be recovered from DOE during the decommissioning years -. We make no assumptions about the specific timing and associated specific amounts of potential DOE recoveries.

256 See AG Petition at.

257 See AG Reply at.

258 Id. Noting that one option in the event of a funding shortfall is to stop decommissioning and return the facility to a long-term storage condition to allow trust funds to grow, the Attorney General additionally argues that the projected growth rate (which the Attorney General claims would be about $, a year) would not provide any certainty that there would be sufficient time within the NRCs -year time limit for decommissioning for the fund to grow sufficiently to offset potential cost overruns. See AG Petition at. The applicants answer that if the dormancy period were extended by years, allowing decommissioning to be completed in years, the net added growth in the trust fund would be over $ million. See Applicants Answer to AG at. This is a separate issue, however, than whether reimbursements from DOE would provide the means to adjust decommissioning funding, and neither the application nor the cost estimate discuss or rely on extending the dormancy period.

259 See AG Reply at -.

which total up to $ million. They argue that the Attorney General ignores the approximately

$ million in spent fuel management costs incurred before decommissioning begins in,

including $ million incurred prior to the dormancy period.260 They claim the Attorney General provides no explanation why this amount would not be recoverable. Further, they note that in NRC status reports they will need to specify how much was spent the previous year on decommissioning activities and the difference between the estimated and actual costs for the prior year, and therefore the NRC can track whether decommissioning costs are exceeding predictions.

We admit this issue. First, as the applicants correctly note, the NRC has no requirement that prevents an applicant from relying on a single funding source. And for its cash flow analysis, HDI relies only on the projected sufficiency of the Palisades decommissioning trust fund to cover decommissioning, spent fuel management, and site restoration costs.

But the applicants also state that while the cash flow analysis conservatively only credits the trust fund, any suggestion by the Attorney General that the application relies on only the trust fund mischaracterizes the application.261 The applicants highlight that the Palisades application explicitly states that DOE reimbursements of spent fuel management expenses would provide a substantial source of additional funds in case an adjustment to funding were needed.262 And the Attorney General is challenging whether the application sufficiently explains or supports this explicit assertion that DOE recoveries would be available as a substantial source of funding if needed to adjust the funding in the trust fund.263 260 See Applicants Answer to AG at.

261 See Applicants Answer to AG at -.

262 See id. at.

263 See AG Petition at -.

The applicants leave unaddressed the Attorney Generals core concern, which relates to timing. Although the petition questions whether some projected spent fuel management costs are recoverable (e.g., the costs of loading DOE-supplied casks), the Attorney General does not question that substantial funds may be recovered from DOE. The Attorney General questions whether funds obtained from DOE in years pastin the earlier project stageswill still be available at the time of decommissioning if substantial cost overruns occur.264 Because most of the recoveries from DOE might be obtained well before the decommissioning stage, the Attorney General challenges the applications assertion that DOE recoveries will be available as a substantial source of additional funding if needed for decommissioning.

Decommissioning is projected to occur primarily between the years and. Yet as the applicants themselves emphasize, HDI projects most spent fuel management costs will be incurred before the dormancy period even begins, during a three-year period beginning soon after the proposed license transfer. From through, HDI projects to incur nearly $

million in spent fuel management costs.265 The next few years, through, reflect relatively low annual projected spent fuel management costs ($. to $. million) during the early dormancy period. Based on DOE beginning to pick up spent fuel in, the projected spent fuel management costs increase somewhat in the latter dormancy years of through

($. million in, then $. million annually between and ) because the costs would then include additional projected costs of loading DOE-supplied transportation casks.

To what extent potential DOE recoveries that Holtec Palisades may receive for the bulk of the expected spent fuel management expenses may still be available at the time of decommissioning, if needed to buttress funding, is unclear from the application and cost 264 See AG Reply at.

265 See DCE at, tbl.-.

estimate. While the applicants repeatedly stress that a total of up to $ million may be sought from DOE, the Attorney General questions how much of this amount would remain available if needed for decommissioning. The Attorney General further argues that potential DOE recoveries that may be obtained during the later stages of the Palisades project, such as after the dormancy period, may be insufficient in overall amounts to offset a significant shortfall in decommissioning funding.

Moreover, while the applicants emphasize that they must file annual status reports on decommissioning funding, these status reports will not address the recoveries. They will not indicate how much funding Holtec Palisades may have recovered nor whether some, all, or none of the funds recovered remain available to adjust funding. And if there are unanticipated decommissioning costs that will not be known until decommissioning is underway, status reports submitted in the years prior to the start of the major decommissioning activities may not capture such costs either.

Recent license transfer adjudications involved a decommissioning schedule without a dormancy period.266 Where decommissioning is projected to begin soon, and to be completed within several years, actual decommissioning costs also will be known relatively soon. And once decommissioning is completed, there no longer remains uncertainty over potential unexpected decommissioning costs, unanticipated investment downturns, or other factors that can affect the adequacy of the trust fund for completing decommissioning. For decommissioning that includes a period of storage or surveillance, section.(a)()(iv) requires licensees to provide a means of adjusting the decommissioning funding over the storage or surveillance period. NRC guidance instructs the staff to determine whether the 266 These concerned the Vermont Yankee Nuclear Power Station, Oyster Creek Nuclear Generating Station, Pilgrim Nuclear Power Station, and Indian Point Nuclear Generating Station.

means described by the licensee provides adequate assurance that funds will be available for decommissioning activities at the time they are needed.267 The applicants claim that perhaps... [the] Michigan AG is demanding an analysis of whether spent fuel management costs will be recovered through litigation against DOE.268 But that is not the analysis or explanation sought. The Attorney General seeks further information on whether and to what extent recoveries that may be obtained through litigation against DOE will remain available to provide the means of adjusting funding. The applicants also claim that the Commission has made it clear that whether spent fuel management costs will be recovered is not appropriate for resolution in an adjudicatory proceeding.269 But what we stated is that we cannot in an adjudicatory proceeding resolve the factual question whether DOE will mandate fuel repackaging and how such costs might be borne.

The applicants state that the application provides multiple layers of financial assurance, including: () the ability of Holtec Palisades to provide additional funding assurance through recoveries from DOE of spent fuel management expenses estimated at $ million and () the related commitment by Holtec Palisades to adjust funding, including providing an alternative funding mechanism if necessary, if annual review of funding assurances indicates a shortfall.270 Here, the Attorney General challenges the support provided to demonstrate the ability to provide sufficient additional funding through DOE recoveries or other alternate funding mechanism.

267 SRP for Decommissioning Cost Estimates, NUREG-at (emphasis added); see also id. at ; Decommissioning of Nuclear Power Reactors, Regulatory Guide., rev. (Oct.

) at ; Standard Format and Content for Post-Shutdown Decommissioning Activities Report, Regulatory Guide., rev. (June ), at (Reg. Guide.).

268 Applicants Answer to AG at.

269 See id. (citing Indian Point, CLI--, NRC at ; Pilgrim, CLI--, NRC at ).

270 Applicants Answer to AG at.

Based on the reasons described, we find that this claim raises an admissible dispute with the application regarding a material fact.

For the hearing, the applicants should describe how they will ensure that sufficient additional funding will be available to use at the time of decommissioning if additional funding proves necessary to complete decommissioning. To the extent that the applicants intend to rely on DOE-related recoveries as a primary source of additional funding, the applicants should, as appropriate, describe () whether any applicable DOE-related settlement agreement is in place;

() the timetable on which the applicants would expect to file its DOE-related claims (including the respective estimated amounts in damages reasonably expected to be obtained); and () and approximately when and in what estimated amounts the DOE recoveries can reasonably be expected to be paid. The applicants should outline how they will ensure that sufficient DOE-related recoveries or other funding (if applicable) will be available as a means to augment funding if necessary to complete decommissioning. The Attorney General will be able to provide a response. The parties should also address whether any license conditions are warranted.

Michigan Attorney Generals Contention MI-Contention MI-focuses on the requested exemption from C.F.R. §.(a)()(i)(A) to permit Holtec to make withdrawals from the decommissioning trust fund to pay for spent fuel management and site restoration activities. The Attorney General argues that because Holtecs financial qualifications demonstration and associated cash flow analysis rely on the requested exemption being granted, unless and until the exemption is granted: () Holtecs cost analysis is speculative and unreliable, and () Holtec must establish that it is financially qualified by independent means, apart from the decommissioning trust fund, to pay for its non-decommissioning commitments.271 The Attorney General claims that Holtec failed to 271 AG Petition at,.

show that it is financially qualified to hold the Palisades license under C.F.R. §.(f), and failed to show that it has adequate funding to satisfy the applicable requirements because neither the application nor the cost estimate indicate how Holtec would fund these non-decommissioning commitments without recourse to the trust fund.272 The contention is inadmissible. Where a license transfer application relies on an exemption, the NRC reviews the license transfer application and exemption request in tandem.

If issued, an exemption would not be effective until issuance of a conforming license amendment reflecting the proposed new licensees. Likewise, an order approving the proposed license transfer would not be issued unless the requested exemption were approved, either prior to or simultaneously with, the license transfer approval. The two separate requests must be considered together because of their intertwined nature. If the financial qualifications showingwhich relies on the exemptionis found deficient, either the license transfer application and related exemption request will both be denied, or one or both will be conditioned as necessary to allow for approval of both.

Just as the NRC in reviewing the license transfer review will assume that the plant will be shut down permanently by the time of the license transfer approval, the NRC will consider the requested exemption as part of the financial qualifications review. There also is no prohibition on considering two interdependent requests together. To the extent that the Attorney General argues that the HDI cost analyses for the license transfer are speculative or unreliable because they rely on an exemption that at the time of the application had not yet been issued, the claim does not identify a genuine dispute with the application and is not admissible.

We similarly find inadmissible the Attorney Generals claim that insofar as Holtec proposes to spend decommissioning trust fund monies on costs that are not decommissioning costs Holtec violates the NRCs requirement in section.(a)()(i)(A) that withdrawals be only 272 See id. at (citing regulations).

for legitimate decommissioning activities.273 The application nowhere proposes unauthorized trust fund withdrawals. If the NRC finds that the exemption should not be issued, then Holtec cannot make the withdrawals. It is undisputed that Holtec may not withdraw decommissioning trust funds for non-decommissioning purposes without an exemption.

Finally, the Attorney General claims that if the NRC grants the requested exemption allowing withdrawals for spent fuel management but does not require Holtec to replenish the trust fund, then DOE recoveries would be a profit windfall realized by HDI before it has satisfied the entirety of its decommissioning and site restoration obligations.274 The Attorney General seeks the NRC, if it approves the license transfer application, to require Holtec either to return DOE recoveries to the trust fund or to a supplemental trust that could be used in what the Attorney General calls the likely event of an unanticipated cost overrun.275 The Attorney General argues that such a condition placed on the requested exemption or license transfer is necessary given the Attorney Generals arguments indicating the significantly underestimated cost estimates and below industry standard contingencies in its application.276 Here, the proposed transferees must demonstrate adequate financial qualifications and reasonable assurance of decommissioning funding. If the application does not show that they are financially qualified to be the holders of the licenses, then the transfers and exemption will not be upheld unless appropriately conditioned, or unless the licensee supplements the application with additional financial assurance that the NRC finds acceptable to demonstrate financial qualification and reasonable assurance of decommissioning funding. Whether and to 273 See id. at.

274 See id.

275 See id. at.

276 See AG Reply at.

what extent the transfer transaction may be profitable is not a matter that the NRC regulates.

Contention MI-does not raise an admissible issue for hearing.

G.

Joint Petitioners Petition to Intervene and Request for a Hearing Joint Petitioners proffer three contentions. In Contention, Joint Petitioners raise various environmental concerns stemming from changes in environmental conditions affecting the Palisades site, the consequences of historical events associated with Palisades operations, and challenges relating to spent fuel storage and repackaging.277 In Contention, Joint Petitioners claim that Holtec International, SNC-Lavalin, HDI, and CDI lack the requisite corporate character, corporate culture, and corporate ethics to conduct licensed activities at Palisades.278 In Contention, Joint Petitioners challenge Holtecs exemption request and raise concerns about HDIs site-specific decommissioning cost estimate, in particular the costs associated with storing and repackaging spent fuel.279 Because we find that none of Joint Petitioners contentions are admissible, we need not reach the question of whether they have demonstrated standing to intervene in this proceeding.

Joint Petitioners Contention Joint Petitioners claim that changes in land use, the effects of historical site events, and inadequacies in the supplemental environmental impact statement for Palisades comprise new information which requires additional supplementation under NEPA.280 As part of this contention, Joint Petitioners raise concerns about changes in Lake Michigans water levels; the 277 Joint Petitioners Petition at -.

278 Id. at -.

279 Id. at -. The applicants oppose the petition. Applicants Answer Opposing Beyond Nuclear et al.s Petition to Intervene and Hearing Request (Mar., ) (Applicants Answer to Joint Petitioners); see Reply of Beyond Nuclear, Michigan Safe Energy Future and Dont Waste Michigan in Support of Petition for Leave to Intervene, and Request for an Adjudicatory Hearing (Mar., ) (Joint Petitioners Reply).

280 Joint Petitioners Petition at.

disposal of the four Palisades steam generators; historical overflows of the Palisades cooling towers; the scope of potential tritium contamination at the Palisades site; the seismic qualifications of the existing dry cask storage pads; greater than Class C (GTCC) waste; repackaging of waste for disposal by DOE, including challenges posed by VSC-casks in general and a specific faulty VSC-cask; and high-burnup fuel.281 Joint Petitioners state that these concerns, as well as insufficiencies in the Palisades Supplemental Environmental Impact Statements (SEIS), warrant a supplemental NEPA analysis for Palisades. They argue that their environmental claims are brought within the scope of this proceeding by HDIs inclusion of a discussion of environmental impacts in its PSDAR.282 We find that none of Joint Petitioners environmental concerns presents an admissible issue in this proceeding.

a.

NEPA Supplementation Claims and Challenge to Categorical Exclusion As we stated above, the NRC has determined that license transfer applications as a general rule do not significantly affect the environment.283 This is because a license transfer does not permit the new licensee to operate the facility in a different manner than was previously authorized under the existing license. Therefore, the NRC has found that absent special circumstances, a license transfer will not present environmental impacts different from those already considered in relevant generic or site-specific NEPA analyses. Accordingly, under C.F.R. §.(c)(), the NRC has categorically excluded license transfer actions from the need for further environmental analysis.284 281 Id. at -.

282 Id. at -.

283 See Streamlined Hearing Process for NRC Approval of License Transfers; Final Rule, Fed. Reg.,,, (Dec., ) (License Transfer Rule).

284 Pilgrim, CLI--, NRC at -.

In their reply brief, Joint Petitioners acknowledge for the first time that the NRC has determined that license transfer applications are categorically excluded from an environmental review but challenge the application of the categorical exclusion. They argue that the categorical exclusion cannot be deemed to apply to this license transfer proceeding until the NRC addresses [Joint] Petitioners assertions of special circumstances making the exclusion inapplicable here.285 In effect, Joint Petitioners argue that, because they have identified various environmental concerns that they argue are not bounded by prior generic or site-specific environmental impact statements and unanalyzed in the PSDAR, these concerns are special circumstances that call into question the applicability of the categorical exclusion, and the NRC must address each of these environmental concerns in its decision on the license transfer application before making a determination that the categorical exclusion applies.286 This argumentraised for the first time on replyis untimely. While a reply brief may appropriately expand upon the arguments raised in the original petition to address arguments raised in an applicants answer, it is not an opportunity for a petitioner to recast or reinvigorate their contention with new arguments that expand the scope of the contention as originally pled.287 Allowing new claims to be added to a reply not only would defeat the contention-filing deadline but would unfairly deprive the other participants of an opportunity to rebut the new claims.288 Joint Petitioners did not acknowledge or challenge the categorical exclusion in their petition or argue that the environmental concerns they raise in Contention amount to special circumstances precluding the application of the categorical exclusion in this proceeding. While 285 Joint Petitioners Reply at (citing C.F.R. §.(b)).

286 See id. at -.

287 See DTE Electric Co. (Fermi Nuclear Power Plant, Unit ), CLI--, NRC,

(); Palisades, CLI--, NRC at ; Louisiana Energy Services, L.P. (National Enrichment Facility), CLI--, NRC, - ().

288 Palisades, CLI--, NRC at -.

Joint Petitioners argue that they were not placed on notice that a categorical exclusion may be applicable to this licensing action because the staff did not use the words categorical exclusion in the hearing opportunity notice, the license transfer application identifies the categorical exclusion and explains why it is applicable to this licensing action.289 Although the NRC is ultimately responsible for satisfying the requirements of NEPA, our rules of practice require petitioners to base their contentions on the application or other information available at the time of the petition.290 Nevertheless, even if this argument were timely, we do not find it persuasive. Section

.(b) simply allows an interested person to request that the Commission make the determination that special circumstances exist that warrant an exception to the categorical exclusion. This provision does not mean that at the request of a petitioner, the NRC must consider the categorical exclusion inapplicable until it has addressed the merits of the petitioners environmental concerns and determined whether each of them amounts to special circumstances. Such an interpretation would circumvent the purpose of the regulation.291 The reasoned explanation for the categorical exclusions applicability to this license transfer proceeding is the codified regulatory presumption of its applicability to license transfer actions in general, which is based upon an administrative record supporting the NRCs determination that 289 Joint Petitioners Reply at (citing Hearing Opportunity Notice); see Application at. To the extent that Joint Petitioners also claim that the staff has not made findings necessary to foreclose consideration of significant hazards, we note that our rules preclude any petition or other request challenging the staffs no significant hazards consideration determination in an adjudicatory proceeding. C.F.R. §.(b)(); see also Joint Petitioners Reply at (citing Hearing Opportunity Notice, Fed. Reg. at ); DTE Electric Co. (Fermi ), CLI--,

NRC, ().

290 See C.F.R. §.(f)()(vi), (f)().

291 See Pilgrim, CLI--, NRC at.

this class of licensing actions does not have a significant effect on the environment, either individually or cumulatively.292 Further, largely because Joint Petitioners did not address the categorical exclusion in their petition, they have not explained how any of the environmental concerns that they raise constitute special circumstances that should render the categorical exclusion inapplicable for this license transfer proceeding. Their petition focuses on the NEPA supplementation standards in C.F.R. §§.(a) and.(a), which provide that the NRC must prepare a supplemental environmental impact statement if there are substantial changes in the proposed action that are relevant to environmental concerns or new and significant circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts.293 While Joint Petitioners emphasize the new and significant information aspect of this provision, they overlook the regulations essential requirement that any new and significant information must be directly related to the proposed action or its impacts.294 We see no basis warranting departure from the categorical exclusion for license transfers in this proceeding. Joint Petitioners have not pointed to information in the license 292 See Joint Petitioners Reply at -; Categorical Exclusions from Environmental Review, Final Rule, Fed. Reg.,,, (Apr., ); License Transfer Rule at,. Joint Petitioners reliance on Paiina Hawaii does not support a different outcome. See Joint Petitioners Reply at (citing Paiina Hawaii, LLC, LBP--, NRC, - & n.

()). In Paiina Hawaii, the licensing board found that the petitioners raised a timely legal contention that satisfied the NRCs contention admissibility requirements. Here, Joint Petitioners did not raise a timely legal argument challenging the categorical exclusion and, as we discuss below, have not otherwise raised an admissible issue in Contention. In addition, the legal dispute found admissible by the licensing board in Paiina Hawaii was centered on the specific categorical exclusion for irradiators, and the boards determination was informed by the regulatory history of that specific provision and of section.(b) as it concerned alternative siting locations for irradiators. See Paiina Hawaii, LBP--, NRC at -. Joint Petitioners have not explained how the considerations underpinning the licensing boards findings in that case are present here.

293 C.F.R. §§.(a)()-(),.(a)()-(); see Joint Petitioners Petition at ; Joint Petitioners Reply at.

294 See Joint Petitioners Petition at ; Joint Petitioners Reply at.

transfer application that suggests its approval by the NRC would authorize a substantive change in any licensed activities that have been previously subjected to NEPA review.295 Further, under our regulations, a licensee may not perform any decommissioning activity that would result in significant environmental impacts not previously reviewed.296 Therefore, we find inadmissible Joint Petitioners claim that NEPA supplementation is required to address environmental changes and unevaluated environmental impacts from operational and planned decommissioning activities at Palisades.297

b.

Claims Relating to the PSDAR Several of Joint Petitioners environmental concerns challenge the adequacy of the environmental impacts discussion in the PSDAR. Specifically, Joint Petitioners argue that the PSDAR does not adequately address the environmental impacts of transporting steam generators by barge during the decommissioning process; the scope of potential contamination from historic tritium leaks; the potential effects of earthquakes on the Palisades ISFSI concrete pads; and the environmental effects from the unrealistic [spent nuclear fuel] transport dates,...

the harsh realities that high burnup fuel... may not be movable until near the end of the century[,]... [or] repackaging of all [spent nuclear fuel] at Palisades... for purposes of transport to a permanent repository.298 295 See Indian Point, CLI--, NRC at (license transfers are categorically excluded because they generally do not permit transferees to operate facility in different manner than previously permitted and therefore do not present environmental impacts different from those already considered in relevant NEPA analyses).

296 C.F.R. §.(a)()(ii).

297 Joint Petitioners have not sought or obtained a waiver of C.F.R. §.(c)(). See C.F.R. §.(a), (b); Curators of the University of Missouri (TRUMP-S Project), CLI--,

NRC, n. ().

298 See Joint Petitioners Petition at,, -,,,.

Joint Petitioners assert that their concerns fall within the scope of this proceeding because the PSDAR must include a discussion that provides the reasons for concluding that the environmental impacts associated with site-specific decommissioning activities will be bounded by appropriate previously issued environmental impact statements.299 As clarified in their reply brief, Joint Petitioners arguments concerning the PSDAR appear to be based on an understanding that the PSDAR is a binding plan approved by the NRC in connection with the federal action approving the license transfer application and that formal NRC approval will be required should the proposed transferees wish to engage in any decommissioning activity that is inconsistent with the actions and schedules described in the PSDAR.300 However, this view misstates the scope of this proceeding and the role of the PSDAR in the staffs review of the license transfer application.

The NRC requires a licensee to submit a PSDAR before or within two years following permanent cessation of operations. However, the PSDAR does not amend the license. While the staff reviews the PSDAR, it does not formally approve the PSDAR, even when the PSDAR contains information in support of a license transfer application.301 This is because the PSDAR itself does not authorize a licensee to perform any decommissioning activity that is not already permitted under the license or that would result in significant environmental impacts not already 299 Id. at - (quoting C.F.R. §.(a)()(i)).

300 See Joint Petitioners Reply at -.

301 See Pilgrim, CLI--, NRC at -, ; see also Indian Point, CLI--, NRC at ; Entergy Nuclear Vermont Yankee, LLC and Entergy Nuclear Operations, Inc. (Vermont Yankee Nuclear Power Station), CLI--, NRC, n. (). Although Joint Petitioners are correct that section.(a)() requires a licensee to notify the NRC before performing any decommissioning activity or making any significant schedule change inconsistent with those described in the PSDAR, this notice requirement does not mean that the PSDAR is a binding plan... require[ing] formal action [from the NRC] in order for Holtec to deviate from it. Joint Petitioners Reply at -. The licensee can still perform these activities if they are otherwise permissible under section.. See C.F.R. §.(a)().

reviewed.302 Instead, the purpose of the PSDAR is to provide a general overview for the public and the NRC of the licensees proposed decommissioning activities.303 The PSDAR consists of a description of the licensees planned decommissioning activities, a schedule for their accomplishment, a site-specific decommissioning cost estimate, and the reasons for concluding that the environmental impacts associated with site-specific decommissioning activities will be bounded by appropriate previously issued environmental impact statements.304 The NRC does not require a license transfer applicant for a reactor entering decommissioning to submit a complete PSDAR as part of the license transfer application.

However, as explained above, a license transfer application must demonstrate that the proposed transferee is financially and technically qualified to undertake the activities authorized by the existing license. In cases such as this one, where the transfer is contingent upon the permanent shutdown of reactor operations, the activities authorized under the license are principally those related to decommissioning and spent fuel management. And ultimately, the license holder for such a reactor must comply with our regulatory requirement to submit a PSDAR before or within two years following cessation of operations. Therefore, it is not 302 See C.F.R. §.(a)()(ii). Similarly, the license transfer, if approved, would not authorize the proposed transferees to perform any activity not already authorized under the licenses. See License Transfer Rule at,; see also Indian Point, CLI--, NRC at ;

Pilgrim, CLI--, NRC at.

303 Decommissioning Rule at,. The NRC provides notice and an opportunity to comment and holds a public meeting upon receipt of the PSDAR, but our regulations do not provide a hearing opportunity on it. C.F.R. §.(a)()(ii).

304 C.F.R. §.(a)()(i). If the licensee contemplates performing decommissioning activities that are expected to result in environmental impacts that are not bounded by relevant generic or site-specific environmental impact statements, the licensee would need to submit a license amendment request along with a supplemental environmental report that describes and evaluates the additional environmental impacts. See Decommissioning Rule at,;

Decommissioning GEIS at -, -. In evaluating such a license amendment request, the staff would prepare an environmental assessment or environmental impact statement, as appropriate. See id. at -; see also Vermont Yankee, CLI--, NRC at -. In addition, such a request would be subject to an opportunity for a hearing. See Pilgrim, CLI--,

NRC at.

uncommon for the license transfer applicant to submit a PSDAR in conjunction with the application to inform the findings the NRC must make with respect to the applicants technical and financial qualifications.

The submission of a PSDAR in conjunction with a license transfer application does not, however, transform the staffs review of that PSDAR into a major federal action requiring independent NEPA review.305 As we have emphasized recently in similar proceedings, only certain information contained in the PSDAR falls within the scope of a license transfer proceeding.306 In a license transfer proceeding, the staff reviews the PSDAR only to determine whether the proposed transferees are financially and technically qualified to hold the license and conduct the activities authorized under the license; accordingly, the information that is material to the staffs review principally consists of the site-specific decommissioning cost estimate and the associated decommissioning schedule. In contrast, the environmental impacts discussion in the PSDAR is not material to the staffs review because the environmental impacts of planned decommissioning activities do not bear directly on the financial or technical qualifications findings of the proposed transferees.307 Thus, we have previously found that purely 305 See Vermont Yankee, CLI--, NRC at -.

306 See Indian Point, CLI--, NRC at ; Pilgrim, CLI--, NRC at -.

307 See Pilgrim, CLI--, NRC at -; see also Indian Point, CLI--, NRC at.

The NRC evaluated the potential environmental impacts of decommissioning nuclear power reactors in the Decommissioning GEIS. The Decommissioning GEIS, which evaluates the potential impacts associated with the SAFSTOR, DECON, and a combination of those decommissioning approaches, reflects the NRCs determination that decommissioning is not itself a major federal action and serves to establish an envelope of environmental impacts associated with decommissioning activities. See Vermont Yankee, CLI--, NRC at (quoting Decommissioning GEIS at -).

environmental claims challenging the adequacy of the PSDAR fall outside the scope of the license transfer proceeding.308 We find no basis in Contention to depart from this approach. Joint Petitioners arguments concerning the adequacy of the PSDARs evaluation of certain environmental impacts do not raise a justiciable issue within the scope of this proceeding because they have not shown that these environmental matters are material to the staffs evaluation of the proposed transferees financial or technical qualifications. In addition, Joint Petitioners have not shown how their concerns regarding the environmental impacts of spent fuel storage, repackaging, and disposal are relevant to the PSDAR, which is required to address only the environmental impacts associated with site-specific decommissioning activities.309 Consistent with the approach prescribed in our regulations, the Palisades PSDAR describes the anticipated environmental impacts associated with planned site-specific decommissioning activities and concludes that these impacts fall within the analyses performed in relevant prior generic and site-specific environmental impact statements.310 By rule, the PSDAR cannot authorize any decommissioning activities that would result in environmental 308 See, e.g., Indian Point, CLI--, NRC at, ; Pilgrim, CLI--, NRC at -,

Exelon Generation Co., LLC (Oyster Creek Nuclear Generating Station), CLI--, NRC

, ().

309 C.F.R. §.(a)()(i); see Joint Petitioners Petition at -; Joint Petitioners Reply at -; see also Pilgrim, CLI--, NRC at n.. Some of Joint Petitioners spent fuel management claims in this contention provide support for the issues they raise in Contention,

which challenges HDIs exemption request. See Joint Petitioners Petition at -. To the extent that these concerns provide support for Joint Petitioners within-scope challenges to the exemption request, we address them in our discussion of Contention. However, their claims that the PSDAR fails to adequately consider the environmental impacts of these issues are beyond the scope of this license transfer proceeding.

310 See PSDAR §§. to. (concluding that environmental impacts are bounded by the Decommissioning GEIS, the Palisades SEIS, and other site-specific environmental impact statements previously prepared in relation to the licensing of Palisades).

impacts in excess of those previously determined.311 Although the environmental impacts discussion in the PSDAR is not within the scope of this license transfer proceeding, it is subject to the staffs oversight.312 Therefore, to the extent that Joint Petitioners have grounds to believe that the environmental impacts of planned decommissioning and spent fuel management activities would exceed those previously reviewed, their recourse is a petition for enforcement action under C.F.R. §. to address a potential violation of our rules in connection with the representations made in the PSDAR.313

c.

Remaining Environmental Claims Joint Petitioners remaining claims in Contention are also not admissible. First, to the extent that Joint Petitioners suggest that the ISFSI decommissioning funding plan submitted by ENOI in and the Palisades SEIS do not adequately describe certain environmental information, they have not raised a concern within the scope of this proceeding.314 Second, Joint Petitioners claim that a site characterization is required to evaluate groundwater contamination from cooling tower overflows and tritium leaks does not raise an issue within the scope of this proceeding or identify a material dispute with the application, because a full site characterization is not required at this stage.315 Joint Petitioners also claim that there is a discrepancy between the PSDAR and ENOIs ISFSI decommissioning funding report regarding 311 See C.F.R. §.(a)()(ii).

312 See id. §.(a)()(i) (requiring a licensee to submit a PSDAR to the NRC prior to or within two years following permanent cessation of operations); Reg. Guide. at (stating that the staff may find a PSDAR deficient if it proposes activities that would result in a significant detrimental impact to the environment that is not bounded by the current environmental impact statements).

313 See C.F.R. §.; see also Indian Point, CLI--, NRC at ; Pilgrim, CLI--,

NRC at.

314 See Joint Petitioners Petition at -,,,,, -,, ; C.F.R. §.(f)()(iii)

(contention must raise issues within the scope of the proceeding).

315 See C.F.R. §.(a)()(ii)(A); Joint Petitioners Petition at -.

the number of canisters required for the storage of GTCC, and that this discrepancy would have financial implications for the transport and disposal of GTCC waste.316 However, Joint Petitioners neither address the decommissioning cost estimate in this claim, nor explain the major cost differences they anticipate would have a material impact on the overall financial qualifications of the applicants.317 Finally, Joint Petitioners claim that the date for commencement of nuclear fuel removal is fantastical, based on laws... and facilities that dont exist or will not be brought online within the timeline [HDI] postulate[s], does not establish a genuine dispute with the application.318 For the reasons we have explained above, we accept as plausible HDIs expectation that by a storage facility will be available to receive the Palisades spent fuel.319 In conclusion, we find that the categorical exclusion applies to this license transfer and its conforming amendments and accordingly that no independent NEPA analysis is required for the license transfer. We note, however, that the environmental effects of the exemptions requested in conjunction with the license transfer application was fully considered in an 316 See Joint Petitioners Petition at.

317 Id. In addition, the ENOI decommissioning information on which Joint Petitioners rely pertains to ENOIs plans for decommissioning Indian Point, not Palisades. See Joint Petitioners Petition at (citing Letter from Philip L. Couture, Entergy Nuclear Operations, Inc., to NRC Document Control Desk (Dec., ) (ML18351A478)). Joint Petitioners cite the th page of pages in the combined PDF, which is Encl. B, CFR. ISFSI Decommissioning Funding Plan - Indian Point Nuclear Generating Station, Unit, at. ENOIs decommissioning funding plan for Palisades projected an estimated five GTCC canisters on the ISFSI storage pads after shutdown, not six. See id., Encl., CFR. ISFSI Decommissioning Funding Plan - Palisades Nuclear Plant, at.

318 See Joint Petitioners Petition at ; see also id. at.

319 Joint Petitioners suggest that the application inconsistently represents the date for commencement of spent fuel removal as or. See id. at,. The application states that NRC license termination is expected to occur in, and therefore represents the date by which spent fuel would need to be removed from the site, not the date of initiation of spent fuel removal. See, e.g., PSDAR at.

environmental assessment prepared by the staff.320 This environmental review considered the information in the environmental assessment provided by HDI in support of its exemption request, an analysis that Joint Petitioners have not challenged.321 Because Joint Petitioners environmental claims do not identify a deficiency in the application on a matter material to the staffs license transfer decision, we find Contention inadmissible.

Joint Petitioners Contention In Contention, Joint Petitioners express concerns about the corporate character, culture, and ethics of Holtec International, SNC-Lavalin, HDI, and CDI. Based on these concerns, Joint Petitioners question the qualifications of these companies to undertake activities relating to the decommissioning of Palisades and the storage, transportation, and disposal of spent nuclear fuel from Palisades and Big Rock Point.322 In support of this contention, Joint Petitioners rely upon Exhibit A, attached to their petition, which catalogues numerous civil and criminal wrongs that Joint Petitioners urge the NRC consider in its review of the license transfer application.323 We will consider claims of deficient character or integrity admissible in an adjudicatory proceeding in special circumstances, but we have imposed strict limits on such claims to ensure that the hearing process does not become a forum to litigate historical events that have no direct bearing on the challenged licensing action.324 To be admissible, the alleged deficiency or misconduct must have some direct and obvious relationship between the character issues and 320 See Holtec Decommissioning International, LLC, Palisades Nuclear Plant; Environmental Assessment and Finding of No Significant Impact; Issuance, Fed. Reg., (Nov.,

).

321 See Exemption Request at -.

322 Joint Petitioners Petition at -,.

323 Id. at.

324 Indian Point, CLI--, NRC at.

the licensing action in dispute.325 To that end, claims regarding prior violations or past events raised in an adjudicatory proceeding should be directly germane to the challenged licensing action.326 We have historically found that contentions based upon the past activities of a licensees parent corporation do not rise to this standard because such activities generally do not bear directly upon the character or conduct of those responsible for conducting licensed activities in compliance with NRC requirements.327 As noted above, HDI is an indirect wholly owned subsidiary of Holtec International, created to assume the licensed operator responsibilities and decommission Holtec-owned nuclear power plants. CDI is jointly owned by Holtec and SNC-Lavalin through their subsidiaries HDI and Kentz USA, Inc., respectively, but as stated in a supplement to the application, CDI will no longer be contracted by HDI to serve as decommissioning general contractor for Palisades.328 Joint Petitioners claim that over two decades Holtec International and SNC-Lavalin have been debarred, seen their officers and employees convicted of bribery for contracts in multiple countries, generated illegal campaign contributions, and other civil and criminal wrongdoing, such as suspected money laundering, financial manipulation and human trafficking....329 In Exhibit A to their petition, Joint Petitioners expound upon this claim by listing several examples of past incidents involving Holtec and SNC-Lavalin.330 325 Oyster Creek, CLI--, NRC at.

326 Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units and ),

CLI--, NRC, - ().

327 See Indian Point, CLI--, NRC at -; Power Authority of the State of New York (James A. FitzPatrick Nuclear Power Plant), CLI--, NRC, - ().

328 See Application Supplement at -.

329 Joint Petitioners Petition at.

330 See id., Ex. A, at -.

However, Joint Petitioners have not linked their concerns about the character and integrity of Holtec International and SNC-Lavalin to a material issue within the scope of the licensing action at issue in this proceeding. While Holtec International is an applicant, SNC-Lavalin is not. Joint Petitioners provide us with no basis to conclude that SNC-Lavalin personnel associated with any past wrongdoing in other projects in other countries will play a role in the management and decommissioning of either Palisades or Big Rock Point. In addition, if the license transfer is granted, neither Holtec International nor SNC-Lavalin would have any responsibility for the direct oversight and control of licensed activities at Palisades or Big Rock Point. Joint Petitioners have not pointed to a connection between the individuals involved in the incidents they cite and the companies that would become the licensed owner or operator of the Palisades and Big Rock Point facilitiesHoltec Palisades and HDI, respectively.331 Nor have Joint Petitioners otherwise identified wrongdoing on the part of any officers or directors of Entergy Nuclear Palisades (which would become Holtec Palisades) or HDI. In short, Joint Petitioners have not established a direct and obvious relationship between their claims of wrongdoing on the part of Holtec International and SNC-Lavalin and this license transfer proceeding.

Joint Petitioners also suggest that Holtec International is unqualified to hold the Palisades license because of prior NRC enforcement history. Joint Petitioners identify two prior NRC enforcement actions, only one of which cited a violation against Holtec International.332 That case arose from Holtecs incorrect determination that it could change the design of one of 331 See Millstone, CLI--, NRC at (citing Georgia Institute of Technology (Georgia Tech Research Reactor, Atlanta, Georgia), CLI--, NRC ()) ([W]e found character allegations directly pertinent when... the allegations specifically concerned the current director of the facility, and the current organizational structure of the facility, and were supported by expert witnesses alleged to have knowledge of the current management.).

332 See Joint Petitioners Petition, Ex. A at.

its spent fuel canisters under C.F.R. §.(c) without first obtaining NRC approval.333 The staff identified the violation during a routine inspection in. The staff gave credit to Holtec for the absence of recent escalated enforcement action against it, as well as for Holtecs prompt and comprehensive correction of the violation, and did not assess any monetary penalty against the company.334 In the second case, the staff issued a notice of violation to Southern California Edison Company for failing to timely report a spent fuel canister-loading problem at San Onofre Nuclear Generating Station (SONGS).335 Joint Petitioners do not draw a connection between the events involved in this enforcement action and Holtec International, other than noting that Holtec is contracted to transfer spent fuel into dry storage at SONGS and a Holtec canister was involved in the cited incident.336 We find no basis in the record of these enforcement actions to conclude that either Holtec International or the proposed license holders lack the requisite corporate character, culture, or ethics to undertake the decommissioning of Palisades or hold the Palisades license.337 In addition, we find that Joint Petitioners have not established a direct and obvious relationship between their remaining concerns and the character or qualifications of the proposed transferees. Much of Joint Petitioners support for this contention draws upon examples of issues specific to the Indian Point license transfer application and proceeding, and Joint Petitioners do not draw a direct link between those matters and the qualifications of the 333 See Letter from George Wilson, NRC, to K.P. Singh, Holtec International (Apr., ),

at - (MLA); see also Indian Point, CLI--, NRC at -.

334 Id.

335 See Letter from Troy W. Pruett, NRC, to Doug Bauder, Southern California Edison Company (Dec., ), Encl. at - (MLA).

336 See Joint Petitioners Petition, Ex. A at.

337 See id. at -; cf. Indian Point, CLI--, NRC at - (finding that the same cited enforcement actions did not establish that Holtec International or proposed license transferees lacked candor or willingness to comply with NRC requirements).

proposed transferees in this proceeding.338 Joint Petitioners also seek to support their contention by citing concerns that Holtec and HDI have sought exemptions in other proceedings, listing examples of exemptions sought by Holtec or HDI from emergency planning requirements and insurance requirements, and to allow the use of decommissioning trust fund money for spent fuel management costs, among others.339 But Joint Petitioners do not explain how requesting an exemption from a regulatory requirementan option expressly provided for under our regulationsindicates a deficit of character or qualifications on the part of Holtec or the proposed license transferees in this case.

Likewise, Joint Petitioners allusions to criticism of Holtecs nuclear industry reputation and other lines of business, elusive corporate organizational structures, and workforce issues, do not directly challenge the application and offer insufficient factual evidence to establish that the proposed transferees lack the requisite qualifications to undertake decommissioning of Palisades.340 As we have stated before, [a]bsent strong support for a claim that difficulties at other plants run by a corporate parent will affect the plant(s) at issue before the Commission, we are unwilling to use our hearing process as a forum for a wide-ranging inquiry into the corporate parents general activities across the country.341 Finally, Joint Petitioners express concern that Holtec lacks experience decommissioning reactors and plans to engage in a cookie cutter approach to decommissioning multiple reactors, stating that [i]t is very unclear that Holtec has the required resources to take on such a task, leading to significantly increased 338 See Joint Petitioners Petition, Ex. A, at -,, -,.

339 See id., Ex. A, at,, -.

340 See id., Ex. A, at, -, -, -.

341 FitzPatrick, CLI--, NRC at.

decommissioning costs.342 However, these statements do not directly call into question the character or qualifications of the proposed license transferees in this proceeding.

In summary, we do not find that the examples Joint Petitioners raise indicate that the proposed transferees lack the requisite character or qualifications to receive the Palisades license or safely decommission the Palisades site. Therefore, we find Joint Petitioners Contention inadmissible.

Joint Petitioners Contention In Contention, Joint Petitioners assert that HDIs request for an exemption from C.F.R. §.(a)()(i)(A) should be denied, arguing that the exemption is both legally and factually unsupportable and that HDI has not demonstrated that special circumstances are present.343 Allowing HDI to withdraw nearly $ million from the decommissioning trust fund for spent fuel management and site restoration costs could jeopardize public health and safety, Joint Petitioners claim, by leav[ing] fewer resources to accomplish a possibly dangerous decommissioning campaign, and would furthermore not be beneficial to the public or the environment.344 Supported by a declarant, Joint Petitioners core challenge to the exemption request is that HDI has underestimated the costs of spent fuel management, particularly the costs of repackaging the spent nuclear fuel contained in VSC-storage casks and the costs associated with potential delays in transferring high-burnup fuel from the spent fuel pool to the Palisades ISFSI and from the ISFSI to DOE for disposal.345 342 Joint Petitioners Petition, Ex. A, at,.

343 Id. at -, - (citing C.F.R. §.(a)()).

344 Id. at.

345 See id. at -. As noted above, these casks are licensed to store, but not transport, spent nuclear fuel.

An exemption request is not among the listed actions subject to a hearing opportunity under section of the AEA, but where, as here, the exemption request is intertwined with and integral to a license transfer application, arguments relating to the exemption request fall within the scope of this proceeding.346 Accordingly, in this proceeding and in similar recent decisions, we have found arguments raising concerns about how a requested exemption from section

.(a)()(i)(A) may materially affect a license transfer applicants showing of financial qualifications to be within the scope of the proceeding.347 Here, however, Joint Petitioners go further, challenging the substance of the exemption request and arguing that the exemption itself should be denied.348 The substance of an exemption request may be challenged if the exemption request and the related licensing action overlap to the point that they are, in essence, two parts of the same action, a determination that we make on a case-by-case basis, taking into account the unique facts and circumstances of each case.349 In this case, as discussed above, HDIs exemption request is sufficiently interrelated with the license transfer application that a challenge to the substance of the exemption request falls within the scope of this proceeding. However, we find 346 See Private Fuel Storage, CLI--, NRC at -, ; see also Vermont Yankee, CLI--, NRC at,.

347 See, e.g., Indian Point, CLI--, NRC at -; Pilgrim, CLI--, NRC at.

348 See Joint Petitioners Petition at -, -.

349 See Vermont Yankee, CLI--, NRC at ; see also Honeywell International, Inc.

(Metropolis Works Uranium Conversion Facility), CLI--, NRC, () (stating that [a]n exemption standing alone does not give rise to an opportunity for hearing,... [b]ut when a licensee requests an exemption in a related license amendment application, we consider the hearing rights on the amendment application to encompass the exemption request as well);

Commonwealth Edison Co. (Zion Nuclear Power Station, Units and ), CLI--, NRC,

() (inquiring whether an exemption, regardless of its label, could constitute[ ] an action for which a hearing is required... [because it] is in effect an action covered by hearing rights under the AEA); United States Department of Energy (Clinch River Breeder Reactor Plant),

CLI--, NRC, () (recognizing a statutory right to a hearing on the granting of an exemption where the exemption is part of a proceeding for an action covered by hearing rights under the AEA).

that Joint Petitioners have not raised a supported dispute on a material issue with the exemption request.

a.

Repackaging of Storage-Only Fuel Canisters Joint Petitioners claim that the cost to repackage the eighteen VSC-casks at Palisades would range from $. to $. million, adding as much as another % to the spent nuclear fuel management costs estimated by Holtec.350 In response, the applicants assert that the costs of repackaging the VSC-casks for transport are encompassed by the

$ million line-item cost estimate allocated to transfer of fuel away from the ISFSI, and they argue that Joint Petitioners have not addressed this cost estimate or called into question its sufficiency.351 In their reply, Joint Petitioners do not address the applicants claims regarding the

$ million line-item cost estimate but maintain that repackaging of spent fuel is not mentioned in the PSDAR.352 They assert that the repackaging of the assemblies in the eighteen VSC-casks is on a scale that has yet to be undertaken in the United States and, given the lack of industry experience with such an effort, cost projections contain elements of speculation that cannot be penciled [a]way.353 These claims are insufficient to show a material dispute with the exemption request.

While Joint Petitioners claim that the costs of repackaging the VSC-casks would exceed HDIs estimated spent fuel management costs by as much as %, they do not explain how 350 Joint Petitioners Petition at ; id., Ex. B, at.

351 See Applicants Answer to Joint Petitioners at ; see also Applicants Answer to AG at.

The applicants state that the line item described as Transfer of fuel and/or other nuclear material away from the ISFSI covers the transfer of fuel assemblies into transfer casks. See Applicants Answer to Joint Petitioners at & n..

352 Joint Petitioners Reply at.

353 Joint Petitioners Reply, Ex. B, Response of Robert Alvarez (Mar., ), at (unnumbered) (Alvarez Decl.); see Joint Petitioners Reply at -.

they arrived at this conclusion.354 HDI estimated that the total spent fuel management costs for Palisades would amount to approximately $ million; a % increase over this amount would reflect an additional $ million in spent fuel management costs, an amount that is not supported by the information in Joint Petitioners pleadings or their experts declarations, which specifies additional costs between $. and $. million.355 Moreover, Joint Petitioners have not challenged the applicants statement that the cost of repackaging VSC-casks for transport are accounted for in their $ million line-item cost estimate for fuel transfer. Nor have they addressed how, in light of the wide range of their own cost estimate, $ million would be insufficient to cover the repackaging of VSC-casks. Therefore, we find that Joint Petitioners have not raised a material dispute with the exemption request.356 Finally, we find that Joint Petitioners suggestion that there may be additional costs associated with safely repackaging defective Cask No., a VSC-cask with weld defects detected in, does not present an admissible issue.357 Joint Petitioners claim that they do 354 See Joint Petitioners Petition at ; id., Ex. B, Report of Robert Alvarez, at (Alvarez Report).

355 In their reply, Joint Petitioners raise an additional potential cost, stating that the estimated cost of managing low-level radioactive waste from removing spent fuel to new canisters is estimated by the DOE at $, per assembly and could be more than the cost to load the assembly in any canister. Alvarez Decl. at (unnumbered) (citing U.S. Department of Energy, Office of Nuclear Energy, Standardized Transportation, Aging, and Disposal (STAD) Canister Design, Presentation to the Nuclear Waste Technical Review Board (Jun., ),

https://www.nwtrb.gov/docs/default-source/meetings//june/jarrell.pdf). Because this claim was not raised in Joint Petitioners initial filings, it is untimely. Even if we were to find it timely, we do not find that it establishes the admissibility of this contention, because Joint Petitioners do not explain whether and to what extent the decommissioning cost estimate fails to account for these costs. For example, they do not challenge the adequacy of the $ million line item in this regard, nor do they point to any other deficiency in the decommissioning cost estimate to account for such costs.

356 For the same reasons, we find inadmissible Joint Petitioners related claim in Contention that the PSDAR does not account for the possibility that repackaging will be required. See Joint Petitioners Petition at. In addition, as we noted above, it remains uncertain whether DOE will require repackaging of these canisters.

357 See Joint Petitioners Petition at -,.

not know whether Cask No. has been unloaded, but they state that there is the troubling conundrum of unloading and repackaging the [spent nuclear fuel] from the cask without causing a serious radiological accident.358 Joint Petitioners do not point to information suggesting that the costs of repackaging this cask would have a material impact on a matter related to the exemption. For example, they do not suggest that the costs of repacking Cask No. are not accounted for in HDIs spent fuel management cost estimate or that any additional costs required for repackaging the cask would reduce the decommissioning trust fund to a level that could adversely impact the proposed transferees ability to safely decommission Palisades.

Accordingly, this concern does not raise a genuine dispute with the exemption request.

b.

Spent Fuel Management Costs Joint Petitioners argue that HDI understates the cost of spent fuel management at Palisades and Big Rock Point by as much as %. Specifically, drawing upon industry data in a GAO report, Joint Petitioners estimate that the costs of Holtec canisters for the remaining spent fuel, the activities and equipment necessary to transfer the spent fuel from the spent fuel pool to dry cask storage, the ISFSI storage pad, and fifteen years of annual maintenance and operation costs, could total $. million.359 They conclude, the potential costs for repackaging the VSC-and Holtec cask emplacement and storage for % of the total number of [spent nuclear fuel] assemblies at Palisade[s] and Big Rock Point come to as much as $.

million.360 First, Joint Petitioners address the expenses of transferring the remaining Palisades fuel assemblies from the spent fuel pool and storing them in the ISFSI, arguing that these expenses 358 Id. at, ; see also Joint Petitioners Reply at.

359 Joint Petitioners Petition at ; id., Ex. B, Alvarez Report, at.

360 Joint Petitioners Petition at ; see id., Ex. B, Alvarez Report, at.

may be significant and higher than estimated by HDI.361 They assert that the cost of the planned Holtec HI-STORM FW casks needed to receive the remaining Palisades spent fuel could be as high as $ million for the casks alone, based on GAO data reflecting the typical cost of a transfer cask as ranging between $. million and $ million per cask.362 The applicants respond that the decommissioning cost estimate includes approximately $ million for these casks in the line item for Containers.363 Joint Petitioners do not directly address this cost estimate or the applicants statement that the cost estimate includes more funding for these casks than Joint Petitioners claim could be required. Therefore, we find that this concern does not identify a material dispute with the exemption request.

Second, Joint Petitioners assert that the costs associated with activities and equipment necessary to transfer [spent nuclear fuel] from wet to dry storage may be as high as $.

million, based on the GAO information.364 Joint Petitioners do not explain how this figure was derived from the information in the GAO report. The GAO table describes a range of typical costs for [d]esign, licensing, and construction of $. million to $ million.365 Excluding the costs of transfer casks and annual maintenance and operation costs, which Joint Petitioners break out into distinct estimates and we address elsewhere in our evaluation of this contention, other relevant costs in the GAO table include labor costs of $, to $,, a description of $ million to $. million for a [c]rawler-type transporter, and various ranges of expenses for 361 Joint Petitioners Petition at -; see also id., Ex. B, Alvarez Report, at.

362 See Joint Petitioners Petition, Ex. B, Alvarez Report, at (citing U.S. Government Accountability Office, GAO--, Spent Fuel Management: Outreach Needed to Help Gain Public Acceptance for Federal Activities that Address Liability (Oct. ), tbl., Typical Costs Associated with Transferring Spent Nuclear Fuel in Canisters from Wet to Dry Storage)

(GAO Report).

363 Applicants Answer to Joint Petitioners at & n..

364 Joint Petitioners Petition at ; id., Ex. B, Alvarez Report, at.

365 GAO Report at tbl.; Joint Petitioners Petition, Ex. B, Alvarez Report, at.

vertical storage casks and horizontal storage modules.366 While the GAO table is broadly cited as support for Joint Petitioners ultimate estimate for activities and equipment related to transfer of spent fuel from wet-to-dry storage, none of these categories are specifically identified as forming the basis for the $. million estimate developed by Joint Petitioners.367 The applicants contend that in order to reach such a high estimate of these costs, Joint Petitioners must have drawn from the high end of the ranges described in the GAO table and included in the estimate the initial costs of designing, licensing, and constructing the ISFSI.368 They argue that Joint Petitioners estimate is not a true reflection of the costs associated with spent fuel management because the Palisades ISFSI is already constructed and paid for, and the proposed transferees would not bear those costs after closing on the purchase and sale agreement.369 Acknowledging that the potential expansion of the eastern ISFSI pad at Palisades would involve additional expenditures, the applicants state that the decommissioning cost estimate allocates $. million for that expansion, which falls within the GAOs range of typical costs for ISFSI design, licensing, and construction.370 They also argue that Joint Petitioners have not justified including in their estimate the one-time costs of loading and transport equipment that are already in use at Palisades. Further, the applicants note that the decommissioning cost estimate includes $ million for spent fuel management between

-, the period that includes the activities of preparing for and conducting fuel movement 366 GAO Report at tbl.; Joint Petitioners Petition, Ex. B, Alvarez Report, at.

367 See Joint Petitioners Petition at ; id., Ex. B, Alvarez Report, at.

368 See Applicants Answer to Joint Petitioners at -.

369 See id. at. For example, $. million of Joint Petitioners $. million cost estimate appears to be allocated to the need for a storage pad. See Joint Petitioners Petition, Ex. B, Alvarez Report, at.

370 See id.; GAO Report at tbl. (describing typical costs as ranging from $. million to $

million).

from the spent fuel pool to an onsite dry storage facility.371 Because Joint Petitioners do not dispute that the funds in this category cover the activities and equipment necessary to transfer

[spent nuclear fuel] from went to dry storage or explain why the specific estimate provided by the applicants is insufficient, particularly given Joint Petitioners lower estimate of $. million for such activities, this claim does not identify a supported material dispute with the exemption request.372 Finally, Joint Petitioners claim that operation and maintenance costs for the Palisades ISFSI could be as high as $. million per year, based on the high end estimate in the GAO tables range of potential costs for operating a permanently shutdown reactor site.373 Arguing that Joint Petitioners have not explained why $. million is representative of the Palisades site configuration, where HDI plans to maintain site infrastructure including the main plant protected area that encompasses one of the ISFSI pads, the applicants counter that site-wide operating and maintenance costs at Palisadesbest illustrated in the years to, the dormancy period in which no other major cost drivers are reflected in the annualized cash flowsare estimated in the decommissioning cost estimate to amount to $. million. This amount falls within the $. million to $. million range described in the GAO table as typical costs for

[a]nnual operations.374 The portion of this sum allocated specifically to spent fuel management 371 Applicants Answer to Joint Petitioners at -; DCE at - & tbl.-. This figure does not include the funds apportioned to the cost of the Holtec HI-STORM FW containers that will receive the spent fuel from the spent fuel pool. The applicants state that $ million comes from the sum of spent fuel costs shown for - ($. million), less the cost of Holtec containers ($. million). Applicants Answer to Joint Petitioners at & n. (citing DCE at tbl.-).

372 Joint Petitioners Petition, Ex. B, Alvarez Report, at.

373 See id. at ; id., Ex. B, Alvarez Report, at ; GAO Report at tbl..

374 See Applicants Answer to Joint Petitioners at ; Joint Petitioners Petition, Ex. B, Alvarez Report, at ; GAO Report at tbl.. The applicants derived the $. million figure by adding the $. million allocated to radiological decommissioning and $. million allocated to spent fuel management for these three years. Id. at n. (citing DCE at tbl.-). The applicants

during this period is $. million, which falls below the range in the GAO table.375 However, in their reply, Joint Petitioners do not address the applicants explanation for their allocation of operating and maintenance costs or provide any other ground to question HDIs estimate.

Therefore, this claim does not raise a material dispute with the exemption request.

Because we find that Joint Petitioners have not established that any element of their proposed alternative cost estimate raises a supported, material dispute with HDIs cost estimate for spent fuel management, we find that Joint Petitioners overall conclusion that the total costs of spent fuel management could amount to $. million does not raise a genuine dispute with HDIs estimate for spent fuel management costs. Likewise, having previously found that their claim regarding the cost of repackaging VSC-casks similarly does not raise a genuine supported dispute with the exemption request, we find their claim that the total potential costs of repackaging VSC-casks and spent fuel management for % of the assemblies at Palisades and Big Rock Point could amount to $. million is insufficiently supported to call into question the plausibility of HDIs estimate of spent fuel management costs. Joint Petitioners do not explain how they arrive at the $. million figure or to what extent costs relating to Big Rock Point factor into this estimate. HDIs exemption request pertains only to Palisades.

Therefore, we find that Joint Petitioners challenges to the exemption based on the cost of spent fuel management are inadmissible.

state that maintenance and operations costs during this period primarily fall in the Program Management category (e.g., security, taxes, insurance, site upkeep, regulatory compliance programs, and licensing/engineering/home office costs), and are incurred on a site-wide basis and allocated to spent fuel management and radiological decommissioning proportionately. Id.

at - (citing DCE at tbl.-; PSDAR at ).

375 See DCE at fig.-; Joint Petitioners Petition, Ex. B, Alvarez Report, at ; GAO Report at tbl..

c.

Cooling Time Implications of High-Burnup Fuel Joint Petitioners also claim that the presence of high-burnup fuel at Palisades raises questions about HDIs assumed cooling time for spent nuclear fuel in the spent fuel pool and HDIs assumptions about the timeframe for transferring all spent fuel from the Palisades site.

Joint Petitioners estimate that approximately % of spent nuclear fuel at Palisades was high-burnup by, and they assert that the remaining fuel discharged since then is mostly high-burnup.376 The applicants argue that Joint Petitioners provide no citation for their estimate of the amount of high-burnup fuel present in the Palisades spent fuel pool or ISFSI.377 The applicants do not themselves offer any clarification regarding the actual amount of high-burnup fuel present at Palisades, nor do they assert that Joint Petitioners estimate of the amount of high-burnup fuel at Palisades is incorrect. While there appears to be a legitimate dispute regarding the amount of high-burnup fuel present in the Palisades spent fuel pool and ISFSI, ultimately, this dispute is not material to our decision on the admissibility of Joint Petitioners contention. Even taking as true Joint Petitioners assumption that the majority of fuel in the spent fuel pool is high-burnup and the amount of high-burnup fuel in the ISFSI is greater than

%, we find that Joint Petitioners still have not shown that this concern raises a supported genuine dispute on a material issue associated with the exemption request.

376 Joint Petitioners Petition, Ex. B, Alvarez Report, at.

377 See Applicants Answer to Joint Petitioners at n.. On reply, Joint Petitioners provide the references for the data on which they relied for their estimate of the amount of high-burnup fuel at Palisades. Alvarez Decl. at - (unnumbered). The applicants move to strike this information as untimely, a characterization Joint Petitioners dispute. See Applicants Motion to Strike Portions of Beyond Nuclear et al.s Reply and Second Declaration of Robert Alvarez (Apr.,

), at (Applicants Motion to Strike Reply); Reply of Beyond Nuclear, Michigan Safe Energy Future and Dont Waste Michigan in Opposition to Applicants Motion to Strike Portions of Beyond Nuclear et al.s Reply and Second Declaration of Robert Alvarez (Apr., ),

at - (Joint Petitioners Response to Motion to Strike Reply). Because our decision does not rely on the additional information provided in Joint Petitioners reply, we need not resolve this dispute.

()

TIMEFRAME FOR TRANSFER OF HIGH-BURNUP FUEL INTO DRY CASK STORAGE Joint Petitioners raise the potential for significant costs relating to the transfer of high-burnup spent nuclear fuel from the Palisades spent fuel pool to the ISFSI.378 The decommissioning cost estimate projects that the remaining Palisades spent fuel will be removed from the spent fuel pool to a dedicated ISFSI by, or over a period of three years, assuming a start date.379 Relying exclusively on a Sandia National Laboratories presentation on cooling times for the storage and transportation of spent nuclear fuel, Joint Petitioners claim that the minimum cooling time required before high-burnup fuel at Palisades can be transferred from the spent fuel pool into dry cask storage is twenty-five to thirty years, suggesting that they view the applications estimated completion date of as speculative.380 Addressing this claim in their answer, the applicants note that Joint Petitioners twenty-five to thirty-year minimum cooling presumption is taken from a chart in the presentation under the heading Cooling Times Derived from Cask Certificates of Compliance, which plots the upper and lower ranges for minimum cooling times before storage or transport based on fuel burnup.381 The applicants point out that this chart does not appear to support Joint Petitioners proposition, as it actually reflects that the minimum cooling time required for high-burnup fuel could be as low as approximately three to five years.382 The Sandia Laboratories presentation 378 See Joint Petitioners Petition, Ex. B, Alvarez Report, at -.

379 DCE at tbl.-, fig.-.

380 See Joint Petitioners Petition at ; id., Ex. B, Alvarez Report, at - (citing U.S. Department of Energy, Sandia National Laboratories, Cooling Times for Storage and Transportation of Spent Nuclear Fuel (Feb., ), https://www.osti.gov/servlets/purl/) (Sandia Presentation).

381 See Applicants Answer to Joint Petitioners at - (citing Sandia Presentation at ).

382 See id. at ; Sandia Presentation at. Assemblies with burnup of, MWd/MTU (

GWd/MTU) or greater are considered high-burnup fuel. See Applicants Answer to Joint Petitioners at (citing Backgrounder on High Burnup Spent Nuclear Fuel (Sept. )

(MLA)); see also Continued Storage GEIS, Appendix I, at I-. The applicants also note

derives this data from cask certificates of compliance.383 The applicants explain that Holtecs HI-STORM FW dry cask system will be used to store the remaining Palisades fuel, a fact reflected in the decommissioning cost estimate.384 Within these casks, the fuel will be placed in MPC-canisters.385 The applicants claim that in accordance with the formula in the HI-STORM FW certificate of compliance for calculating burnup and cooling time limits for fuel assemblies, fuel assemblies loaded into the MPC-canister with a burnup of GWd/MTU would have a minimum cooling time of. years.386 On reply, Joint Petitioners do not dispute the applicants characterization of the information in the Sandia Laboratories presentation, and they acknowledge that the Sandia Laboratories presentation states that minimum cooling times under five years for high-burnup fuels is possible for smaller cask sizes.387 Appearing to abandon their claim that the cooling times for high-burnup fuel before emplacement range between a minimum of twenty-five and thirty years, Joint Petitioners argue more broadly that cooling times for high-burnup fuel will increase with increasing burnup and that high-burnup fuels loaded into very large sized casks may require decades of aging in pools.388 Joint Petitioners further state that high-burnup fuel that is preferentially loaded into multi-purpose canister casks can be far greater than [five]

that other slides in the presentation state that transfer from pool to cask within five years is possible under certain conditions, such as with smaller cask sizes. See Applicants Answer to Joint Petitioners at - (citing Sandia Presentation at ).

383 See Sandia Presentation at -.

384 Applicants Answer to Joint Petitioners at (citing DCE at ).

385 See id.; DCE at.

386 Applicants Answer to Joint Petitioners at (citing Certificate of Compliance No.,

Amend. No. (Jun., ), app. B, at - to -, - (MLA)).

387 See Alvarez Decl. at (unnumbered).

388 Id. at (unnumbered) (quoting Sandia Presentation at ).

years.389 By themselves, these statements do not raise a material dispute with the exemption request because their claims are consistent with the information in the presentation that describes a range of minimum cooling times of between approximately three and thirty years for high-burnup fuels.390 Joint Petitioners support for this concern lacks a connection between the cooling time possibilities they raise and the assumptions underlying HDIs planned schedule for wet-to-dry fuel transfer in this proceeding; and, ultimately, the cost implications that any change in this would have on the decision whether to grant the exemption request. Joint Petitioners have not directly challenged the applicants explanation that the minimum cooling time for spent fuel with a burnup of GWd/MTU loaded into the HI-STORM FW casks and MPC-canisters falls within the three-year period projected by HDI.391 In their reply, Joint Petitioners assert that the HI-STORM cask is not considered a small cask, implying that the minimum cooling time for the remaining Palisades spent fuel may be on the order of decades.392 Leaving aside the question of whether this argument was properly raised in the first instance on reply, it does not identify a dispute with the application or the applicants explanation because the remaining 389 Id. at (unnumbered) (citing Sandia Presentation at ).

390 See Sandia Presentation at.

391 See Applicants Answer to Joint Petitioners at & nn.-; Alvarez Decl. at -

(unnumbered). Joint Petitioners statement that the cooling times for high-burnup fuel can be far greater than [five] years for fuel placed preferentially into multi-purpose canisters does relate to the application, considering that the MPC-canisters loaded in the HI-STORM FW system are multi-purpose canisters. However, their argument that these cooling times could be far greater than five years brings us no closer to an understanding of where in the range of minimum cooling time possibilities the Palisades spent fuel is more likely to fall; it neither excludes a cooling time of less than five years, nor provides evidence that the cooling time would be closer to their high end estimate of thirty years.

392 See Alvarez Decl. at (unnumbered).

Palisades fuel will be loaded into a different caskthe HI-STORM FW.393 Joint Petitioners do not explain how their claims regarding the HI-STORM cask are relevant to the HI-STORM FW cask in use at Palisades.

Given that Joint Petitioners have not raised a specific dispute with the relevant information provided by the applicants, we find that Joint Petitioners have not provided sufficient information to suggest that HDIs projected timeframe for transferring the remaining spent fuel at Palisades into dry cask storage is implausible. Moreover, because they have not addressed how the impacts of high-burnup fuel on HDIs assumed timeframe for wet-to-dry fuel transfer would affect the cost estimate for spent fuel management, they have not established the materiality of this concern to the considerations involved in the decision to grant or deny the exemption request. Therefore, we find that this concern does not identify a supported material dispute with the exemption request.

()

TIMEFRAME FOR TRANSFER OF HIGH-BURNUP FUEL AWAY FROM SITE Joint Petitioners next suggest that the applications projection for removal of spent nuclear fuel from the Palisades ISFSI may be speculative because of the presence of high-burnup fuel.394 Quoting a Nuclear Waste Technical Review Board report, Joint Petitioners observe that the nuclear industry is trending toward storing higher-burnup fuel in larger dry storage casks and canisters, and DOE has estimated that if no repackaging occurs, some of the largest [spent nuclear fuel] canisters storing the hottest [spent nuclear fuel] would not be cool enough to meet the transportation requirements until approximately.395 If, on the 393 See Applicants Answer to Joint Petitioners at ; DCE at. In their petition, Joint Petitioners did not relate their argument about high-burnup fuel cooling times to a specific cask system. See generally Joint Petitioners Petition, Ex. B, Alvarez Report.

394 See Joint Petitioners Petition, Ex. B, Alvarez Report at -.

395 Id., Ex. B, Alvarez Report, at (quoting U.S. Nuclear Waste Technical Review Board, Preparing for Nuclear Waste Transportation: Technical Issues That Need to Be Addressed in Preparing for a Nationwide Effort to Transport Spent Nuclear Fuel and High-Level Radioactive

other hand, the spent fuel is repackaged from these large casks and canisters into smaller standardized canisters, Joint Petitioners note that DOE has estimated that it could remove

[spent nuclear fuel] from all nuclear power plant sites by approximately.396 In response, the applicants state that HDIs decommissioning cost estimate assumes that repackaging for transportation will occur.397 They further assert that neither Joint Petitioners, nor the report on which they rely, suggest that the Palisades fuel assemblies cannot be repackaged into transportation casks or otherwise approved for transport in time to remove all fuel by the end of

.398 This concern does not raise a supported dispute with the exemption request. In their petition, Joint Petitioners do not address the decommissioning cost estimates assumptions about spent fuel repackaging or explain why HDIs projected timeframe for removal of spent fuel from the Palisades ISFSI is implausible. As the applicants point out, the decommissioning cost estimate assumes that repackaging could be required in order to transport spent fuel from the ISFSI for disposal. The estimated date by which DOE projects it could remove repackaged spent fuel from all nuclear reactor sites in the country is not clearly incompatible with HDIs estimated date for removal of all spent fuel from only the Palisades site.399 Moreover, the DOE estimate relies on an assumption that all spent nuclear fuel would be Waste (Sept. ), at, https://www.nwtrb.gov/docs/default-source/reports/nwtrb_nuclearwastetransport_.pdf?sfvrsn=) (NWTRB Report). The NWTRB Report quoted by Joint Petitioners states that DOE examined industry trends between and 396 Id., Ex. B, Alvarez Report, at (quoting NWTRB Report at ).

397 See Applicants Answer to Joint Petitioners at.

398 Id.

399 See DCE at (The HDI schedule assumes that spent fuel... [is] removed from the site by

.).

repackaged from large casks and canisters into smaller standardized canisters.400 As we have previously noted, future spent fuel packaging requirements for DOE transportation remain highly uncertain; therefore, the DOE estimate does not clearly support a direct challenge to the decommissioning cost estimates projected date for completion of spent fuel removal.401 Further, Joint Petitioners have not explained how this concern is material to the findings the NRC must make on the exemption request. In their petition, Joint Petitioners do not connect their concern about the impacts of high-burnup fuel on the timeframe for spent fuel removal to the costs of spent fuel management described in the decommissioning cost estimate or cash flow analysis. In their reply, Joint Petitioners assert that HDI will incur additional specified expenses for maintaining and operating the Palisades ISFSI if all spent fuel is not removed by

.402 Because they have not raised an adequately supported challenge to the plausibility of HDIs projected date, however, this argument does not support admission of this contention.403 400 See NWTRB Report at.

401 See Indian Point, CLI--, NRC at. Joint Petitioners appear to acknowledge this uncertainty, pointing to ENOIs explanation in the ISFSI decommissioning funding plan that its assumed start date for DOEs acceptance of fuel from Palisades are for budgeting purposes only, and do not represent any conclusion by the licensee about how the DOE will actually perform in the future. See Joint Petitioners Petition, Ex. B, Alvarez Report, at (quoting CFR. ISFSI Decommissioning Funding Plan - Palisades Nuclear Plant, attached (Encl. )

to Letter from Philip L. Couture, Manager, Fleet Licensing Programs, Entergy Nuclear Operations, Inc., to NRC Document Control Desk (Dec., ) (MLA)). Although Joint Petitioners cite ENOIs explanation to support their case that the projected date for removal for spent fuel from Palisades has strong elements of speculation, it is undisputed that many aspects of DOEs future performance of its obligations under the Standard Contract are uncertain, particularly as to whether and how DOE will require repackaging of canistered fuel.

Therefore, we decline to find that a decommissioning cost estimate is implausible because it makes reasonable assumptions about DOEs future expectations for receiving spent nuclear fuel. For the same reason, we find that Joint Petitioners have not raised an admissible issue concerning the PSDARs assumptions about future DOE repackaging requirements. See id.

at -.

402 See Alvarez Decl. at (unnumbered).

403 This argument is also untimely, as it was raised for the first time on reply. Joint Petitioners did not identify these costs in their petition or specify how a delay in the spent fuel transfer schedule would affect HDIs estimate of spent fuel management costs. The report from which

While we do not find Joint Petitioners concern admissible, we note that in this decision we separately admit for hearing an issue related to the plausibility of HDIs projected eleven-year timeframe for the transfer of all spent fuel from the Palisades site. Further, as we have explained above, the NRCs review of the adequacy of decommissioning and spent fuel management funding is not a one-time look, but part of an ongoing oversight process that spans the decommissioning process and continues through license termination. If any significant unanticipated decommissioning or spent fuel management costs arise, whether resulting from a schedule delay or otherwise, the licensee will be required to report these costs in its annual status reports, as well as provide any necessary adjustments to cover the shortfall.404

d.

Remaining Miscellaneous Claims In Contention, Joint Petitioners also express generalized concerns about a previous licensees withdrawal of funds from the Palisades decommissioning trust fund in, as well as the potential radiological impacts of unloading and repackaging fuel from Cask No.,

transporting steam generators by barge, and the seismic qualifications of the dry cask storage pads.405 These claims do not directly address the information in the exemption request or decommissioning cost estimate. Therefore, we find them inadmissible. We also find inadmissible various arguments raised at the beginning of their petition about HDIs waste volume and cost estimates, project delays attributable to HDIs other decommissioning Joint Petitioners derived its cost estimate information was also not referenced in Joint Petitioners petition. See Louisiana Energy Services (National Enrichment Facility), CLI--,

NRC, () (our rules do not allow [the use of] reply briefs to provide, for the first time, the necessary threshold support for contentions).

404 See C.F.R. §.(a)()(vi) (licensee must include in report additional financial assurance to cover any shortfall in estimated cost to complete decommissioning); id. §.(a)()(vii)(C)

(licensee must include in report a plan to obtain additional funds to cover any shortfall in projected cost to manage irradiated fuel until fuel is transferred to DOE).

405 See Joint Petitioners Petition at -; see also Joint Petitioners Reply at.

obligations, and HDIs reliance on the nuclear decommissioning trust fund.406 These arguments are not further developed in a contention and do not identify a supported dispute on an issue materal to the application.

Applicants Motions to Strike Portions of Joint Petitioners Reply and to Strike Subsequent Responses to Applicants Motion Following submission of Joint Petitioners reply, the applicants moved to strike portions of the reply for impermissibly adding new arguments and evidentiary materials not raised in their initial petition.407 The applicants request that if we decline to strike these portions of Joint Petitioners reply, they be granted an opportunity to respond to arguments and materials identified in their motion.408 Joint Petitioners, supported by Mr. Muhich, filed a response opposing the applicants motion, arguing that the information the applicants seek to have stricken was timely and properly responsive to arguments raised by the applicants in their answer.409 In response, the applicants filed a further motion requesting that we strike Joint Petitioners and Mr. Muhichs responses to the applicants initial motion, arguing that both responses were filed late. The applicants argue that Joint Petitioners and Mr. Muhichs responses, filed nine and ten days after the applicants motion, respectively, were filed outside the five-day timeframe provided for such responses under our subpart M procedures in C.F.R. §.(b).410 Joint Petitioners and Mr. Muhich each filed a response in opposition to 406 See Joint Petitioners Petition at -.

407 Applicants Motion to Strike Reply.

408 Id. at.

409 Joint Petitioners Response to Motion to Strike Reply at -; M. Muhich Submission Opposing Holtec Motion to Strike (Apr., ).

410 Applicants Motion to Strike Late Responses (Apr., ), at - (citing C.F.R.

§.(b)). Because the fifth day after April, the date applicants filed their motion fell on a Saturday, the applicants assert that the petitioners responses were due no later than April,. Id. at (citing C.F.R. §.(a)).

the applicants subsequent motion.411 Joint Petitioners argue that the procedures of subpart M do not apply at the intervention stage of the proceeding, when we have not yet determined whether to grant a hearing request, and accordingly section.(c) governs the timeframe for filing motions and responses.412 Because we find that Joint Petitioners have not submitted an admissible contention, we deny the applicants motion to strike portions of Joint Petitioners reply. Further, because we find that the record provides a sufficient basis to support our decision, we deny the applicants request for additional briefing to respond to the specified arguments and materials raised by Joint Petitioners in their reply. Having denied the applicants motion to strike, we also deny as moot the applicants further motion to strike Joint Petitioners and Mr. Muhichs responses to their initial motion. Accordingly, in denying the applicants motions, we need notand do not reach a determination on the competing arguments concerning the timeliness of the petitioners responses to the applicants first motion to strike.

H.

ELPC Petition to Intervene and Request for a Hearing ELPC proffers four contentions. In Contention, ELPC challenges HDIs reliance in its demonstration of financial qualifications on obtaining exemptions to allow it to use the decommissioning trust fund for spent fuel management and site restoration expenses at Palisades.413 In Contention, ELPC asserts that HDI improperly takes credit for a % annual real rate of return on the decommissioning trust funds in its site-specific decommissioning cost 411 Memorandum of Beyond Nuclear, Michigan Safe Energy Future and Dont Waste Michigan in Opposition to Applicants Motion to Strike Late Responses (Apr., ) (Joint Petitioners Response to Motion to Strike Late Responses); [Mr. Muhichs] Memorandum to Oppose Applicants Motion to Strike Late Responses (filed Apr., ).

412 Joint Petitioners Response to Motion to Strike Late Responses at -. Section.(c) provides that answers to motions may be filed within ten days after service of the motion.

413 See ELPC Petition at -.

estimate.414 In Contention, ELPC claims that the license transfer application is deficient because HDI relies solely on the decommissioning trust fund to demonstrate its financial qualifications to hold the Palisades license. ELPC also requests that certain information redacted from the purchase and sale agreement between Entergy and Holtec be made publicly available.415 Finally, in Contention, ELPC moves to adopt and incorporate by reference the contentions proffered by Joint Petitioners.

We find that none of ELPCs contentions are admissible. Accordingly, we need not decide whether ELPC has established standing to participate in this proceeding.

ELPCs Contention As explained above, the NRCs rules allow a licensee to withdraw funds from a decommissioning trust only for decommissioning activities, and HDI seeks an exemption from these rules that would allow it to use approximately $ million of the trust fund for spent fuel management costs and approximately $ million for site restoration costs.416 Raising similar arguments to those in the Attorney Generals Contention MI-, ELPC challenges the sufficiency of HDIs financial qualifications, arguing that the applications decommissioning financial assurance showing is deficient under C.F.R. §§.(bb) and.(b) because it improperly relies on an assumption that the NRC will grant the requested exemption. ELPC states that while Holtec and HDI may be able to demonstrate after initiation of the decommissioning process that withdrawals from the trust fund for spent fuel management and site restoration costs are appropriate, they should not be allowed to use that assumption as a basis for demonstrating that they can meet Commission financial assurance requirements now, when 414 See id. at -.

415 See id. at -.

416 Exemption Request at, tbl. (requesting exemptions from C.F.R. §§.(a)()(i)(A),

.(h)()(iv)).

decommissioning has not even begun.417 Further, ELPC argues, [w]ithout the exemption, the Holtec Companies have not offered assurances that they can meet their financial responsibilities under the permit.418 HDIs demonstration of financial qualifications for the license transfer relies on the requested exemption. As explained above, we find that arguments relating to the exemption requests bearing on Holtecs demonstration of qualifications to hold the Palisades and Big Rock Point licenses fall within the scope of this proceeding. Nevertheless, as we found with respect to the Attorney Generals Contention MI-, ELPCs argument that HDI cannot rely on a prospective exemption to demonstrate its financial qualifications for the license transfer does not raise a genuine dispute with the license transfer application or the exemption request. We have explained above our determination that financial assurance will be acceptable if it is based on plausible assumptions and forecasts.419 As ELPC observes in its petition, the staff has authorized exemptions under similar circumstances as presented here.420 Therefore, we do not find that HDIs reliance on obtaining an exemption to support its financial assurance calculations is an implausible assumption.

ELPC asserts that Holtec, the parent company of HDI, has relied on similar exemptions in license transfer applications for other facilities but does not explain how this information is material to the present license transfer application or exemption request.421 For example, ELPC does not describe how Holtecs reliance on such exemptions in other license transfer 417 ELPC Petition at.

418 Id.

419 Indian Point, CLI--, NRC at (quoting Seabrook, CLI--, NRC at ).

420 See ELPC Petition at ; see also Exemption Request at (referencing similar exemptions granted by the NRC); Indian Point, CLI--, NRC at - & n. (noting that the NRC has previously granted five similar exemption requests).

421 See ELPC Petition at.

proceedings renders implausible HDIs expectation that an exemption will be granted in this case, or how Holtecs ability to draw from the decommissioning trust fund for other authorized purposes in its other decommissioning projects calls into question the financial qualifications of the proposed transferees to perform licensed activities at Palisades or Big Rock Point. Nor are we persuaded by ELPCs argument that the existence of two federal court cases regarding Holtecs reliance on such exemptions calls into question the plausibility of the applicants reliance on obtaining the exemption in its financial qualifications demonstration.422 The existence of an unresolved legal dispute is not predictive of a specific outcome and, moreover, the two petitions cited by ELPC in support of this premise have been withdrawn.423 We also find that ELPC does not raise a genuine dispute with HDIs decommissioning cost estimate, which ELPC does not directly challenge. Rather, ELPC broadly asserts that the NRC should be wary of granting the requested exemption because unforeseen costs could occur early in the decommissioning process that could significantly impact the availability of funds for later decommissioning activities. For example, ELPC argues, if the estimated costs of license termination in were to double, and HDI was using the decommissioning trust fund to also pay for spent fuel management and site restoration costs, the trust fund balance would 422 See id. at & n. (citing two petitions for review in the U.S. Court of Appeals for the District of Columbia Circuit concerning similar exemptions granted by the NRC in the Indian Point and Pilgrim license transfer proceedings).

423 See Applicants Reply to ELPC Petition at n.; Press Release, New York State Office of the Attorney General, Attorney General Games Applauds Finalization of Plan to Dismantle and Cleanup Indian Point (May, ), https://ag.ny.gov/press-release//attorney-general-james-applauds-finalization-plan-dismantle-and-cleanup-indian. We also decline ELPCs suggestion that the existence of such disputes should cause the NRC to reconsider granting such exemption requests or that the NRC should impose requirements comparable to those included in a settlement agreement between the State of Massachusetts and Holtec in the Pilgrim proceeding. The financial qualifications of a prospective transferee is a fact-specific determination. The NRC considers each application for a license transfer and exemption request on a case-by-case basis and reviews such requests in accordance with applicable regulations and guidance.

be depleted in.424 However, ELPC does not provide support for its supposition that decommissioning costs could double in or any other year.425 Moreover, as discussed above, our regulatory framework requires a licensee in decommissioning to demonstrate adequate funding for decommissioning and spent fuel management activities. For example, HDI would be required provide to the NRC an annual decommissioning financial assurance status report, which the NRC would use to monitor withdrawals from the trust fund.426 On a yearly basis, HDI would be required to update the decommissioning cost estimate in its annual status report to reflect the difference between the estimated and actual costs for activities performed using decommissioning trust funds.427 If unforeseen events threatened HDIs ability to complete decommissioning, HDI would be required in its annual status report to provide additional financial assurance to cover the remaining costs.428 In addition, HDI would be prohibited from making any trust fund withdrawals that would inhibit its ability to complete funding of any shortfalls in the decommissioning trust needed to ensure the availability of funds to fully decommission the site.429 ELPC does not raise a supported, genuine material dispute with the applicants reliance on a prospective exemption in its demonstration of financial qualifications. Therefore, we find this contention inadmissible.

424 ELPC Petition at -.

425 See C.F.R. §.(f)(i)(v) (petitioner must provide a concise statement of facts or expert opinion which support petitioners position). Moreover, HDI does not propose to withdraw funds for site restoration activities until. See DCE at tbl.-.

426 See C.F.R. §.(a)()(v).

427 See id. §.(a)()(v)(B).

428 See id. §.(a)()(vi).

429 See id. §.(a)()(i)(C).

ELPCs Contention ELPC claims that the application and PSDAR are deficient because HDI improperly takes credit for a % annual real rate of return on the decommissioning trust funds.430 Our regulations allow a licensee that has prepaid decommissioning funds based on a site-specific decommissioning cost estimate to take credit for projected earnings on the prepaid accounts funds up to a % annual real rate of return through the decommissioning period.431 HDIs projection, based on a % annual real rate of return on the decommissioning trust fund, is that the fund will be sufficient to cover not only decommissioning but also spent fuel management and non-radiological site restoration expenses at Palisades.

While ELPC accepts that our regulations permit licensees using the prepayment method based on site-specific estimates to assume an annual real rate of return of up to % on the projected trust fund earnings, ELPC asserts that this regulation is inapplicable in this case because HDI is not proposing the SAFSTOR method of decommissioning.432 In short, ELPCs position is that C.F.R. §.(e)()(i) is properly read as permitting only licensees proposing a SAFSTOR method of decommissioning to take advantage of the % annual real rate of return assumption in its cash flow analysis.433 On the basis of this interpretation, ELPC requests that we revisit our finding in Indian Point that section.(e)() does not limit the use of the % real rate of return rate to licensees proposing a method, such as SAFSTOR, involving an extended storage period.434 In the Indian 430 ELPC Petition at.

431 See C.F.R. §§.(e)()(i),.(a)()(vi).

432 ELPC Petition at.

433 Id. at ; The Environmental Law & Policy Centers Reply to Applicants Answer (Mar.,

), at - (ELPC Reply).

434 See ELPC Petition at -; Indian Point, CLI--, NRC at -.

Point proceeding, the applicant provided a site-specific estimate of decommissioning costs based on a DECON model which included a period of deferred dismantlement, which we found sufficient to satisfy the requirement of section.(e)() that the site-specific estimate be based on a period of safe storage that is specifically described in the estimate.435 For the reasons described in detail in our evaluation of New Yorks similar concern in Indian Point, we decline to revisit our prior decision and adopt ELPCs interpretation of section

.(e)().436 Here, HDIs site-specific decommissioning cost estimate specifically identifies and accounts for a ten-year dormancy period, beginning in and ending in, in which the plant will be maintained in a compliant and safe state and during which no decommissioning activities will take place.437 This comports with the plain language of section

.(e)()(i), which provides that the % real rate of return credit is available for a site-specific estimate based on a period of safe storage. The regulation does not require any particular period of safe storage, only that the cost estimate be based on a period of safe storage specifically described in the decommissioning cost estimate.438 While HDI does not specifically identify its decommissioning approach as either the DECON or SAFSTOR method, ELPC has not pointed to any requirement that it do so.439 435 See Indian Point, CLI--, NRC at.

436 See id. at -. ELPC argues that HDIs cash flow analysis appears to design the rate of decommissioning around the amount of time necessary for trust fund earnings to supplement the beginning trust fund balance, which ELPC concludes raises significant red flags about our decision in Indian Point. ELPC Petition at. However, ELPC does not point to evidence that HDI violated any regulatory requirement in developing its projected decommissioning timeframe and cash flow analysis.

437 PSDAR at ; DCE at fig.-, tbl.-.

438 FirstEnergy Companies and TMI-Solutions, Inc. (Three Mile Island Nuclear Station, Unit ),

CLI--, NRC, ().

439 See ELPC Reply at ; Three Mile Island, CLI--, NRC at. Although the License Renewal GEIS discusses decommissioning models that are generally acceptable to the NRC, the GEIS does not foreclose the proposed use of variants of these models, or different models

We find this contention inadmissible because it does not raise a genuine dispute with the application and, to the extent that it challenges our settled interpretation of section.(e)(),

does not raise a concern within the scope of this proceeding.440 ELPCs Contention ELPC asserts that Holtec Palisades has not shown that it is financially qualified to hold the Palisades license because its showing of financial qualifications is based solely on the strength of Holtecs financial projections for the funds in the decommissioning trust fund.441 Referring to arguments raised in its Contentions and, ELPC claims that Holtec Palisades cannot assume a % real rate of return on the projected trust fund earnings or rely on a prospective exemption allowing use of the trust funds for spent fuel management and site restoration.442 Consequently, ELPC argues, the decommissioning trust fund alone is insufficient to show that Holtec currently possesses or has reasonable assurance of obtaining the funding necessary to carry out decommissioning at Palisades.

These arguments do not support admission of this contention. As we found above, ELPC has not identified sufficient grounds for calling into question HDIs reliance on a prospective exemption as part of the proposed transferees financial qualifications showing or its assumption of a % real rate of return on the projected earnings in the decommissioning trust fund. ELPC has not identified an NRC requirement that prevents an applicant from relying on a single source of funding in order to establish its financial qualifications to conduct the activities entirely. Indian Point, CLI--, NRC at ; see ELPC Reply at (citing Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Main Report, NUREG-, vol. at §.. (May ), available at https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr/index.html).

440 See C.F.R. §.(f)()(iii),(vi). ELPC did not seek a waiver to challenge sections

.(e)()(i) and.(a)()(vi) in this proceeding. See id. §.(a), (b).

441 ELPC Petition at -.

442 Id. at.

authorized by the license.443 Likewise, ELPC has not identified a requirement that prohibits the use of the decommissioning trust fund as that source of funding where, as here, power reactor operations will have permanently ceased prior to the proposed license transfer, and the activities authorized under the transferred license will be limited to those related to decommissioning the site and managing the spent fuel.

ELPC also argues that Holtec Palisadess reliance on the decommissioning trust fund alonewithout parent company financing, revenue from electric generation, or ratepayer fundingis inadequate evidence of its financial qualifications because decommissioning financial assurance is not meant to be the primary means of showing financial viability, but rather, a second line of defense, if the financial operations of the licensee are insufficient... to ensure that sufficient funds are available to carry out decommissioning.444 The language ELPC relies upon is not relevant in this case, however, because it concerns licensees with ongoing operations that might provide funding for, or divert funding from, decommissioning activities.445 Here, the license transfer will not be effectuated until after the Palisades reactor has permanently ceased operations.446 As we explained recently in Indian Point, C.F.R. §.

specifies the methods acceptable to the NRC for providing financial assurance for decommissioning activities, and neither this nor any other of our regulations requires a licensee 443 See Indian Point, CLI--, NRC at,.

444 ELPC Petition at (citing Options to Evaluate Requests to Use Discounted Parent Company Guarantees to Assure Funding of Decommissioning Costs for Power Reactors, Commission Paper SECY-- (Sept., ), at (ML (package)) (emphasis added by ELPC) (internal quotations omitted)). The quoted language actually appears on the first page of Enclosure to SECY--, Questions and Answers on Decommissioning Financial Assurance, which itself quotes Financial Assurance Requirements for Decommissioning Nuclear Power Reactors; Final Rule, Fed. Reg.,,, (Sept.,

).

445 Indian Point, CLI--, NRC at.

446 Application Cover Letter at ; Applicants Answer to ELPC at -.

at the decommissioning stage to supplement its financial assurance method with a showing that its operations will generate additional funding.447 Next, ELPC argues that [t]he structure of the license transfer creates a shield for the corporate parent, Holtec, to avoid financial risk and legal liability from the proposed decommissioning liability.448 Because the Commission cannot shift unmet decommissioning liabilities to a corporate parent, ELPC asserts, the decommissioning fund must cover all costs related to the Palisades Nuclear Plant, predicted or unforeseen.449 This argument does not raise a genuine dispute with the application. First, in recognition of the limitations in the NRCs authority to compel a parent company to pay for the decommissioning costs of its subsidiary, the NRC requires that the proposed licensee itself provide reasonable assurance that funds will be available to decommission the facility using a method acceptable to the NRC.450 The application explains that Holtec Palisades, as the proposed licensed owner of the Palisades site, would be responsible for funding the costs of decommissioning, spent fuel management, and site restoration, and that HDI, as the proposed licensed operator, would base its financial qualifications on that of Holtec Palisades.451 ELPC does not identify how the corporate structure of the proposed transferees fails to meet NRC requirements. While ELPC claims that the applicants have not offered sufficient financial data on Holtec Palisades to enable an assessment of whether Holtec Palisades would be able to address cost overruns or meet its 447 See Indian Point, CLI--, NRC at ; C.F.R. §.; see also Three Mile Island, CLI--, NRC at (petitioner did not identify a legal requirement that the license holder of a decommissioning reactor have some other, ongoing business concern that would generate income independent of the decommissioning trust fund).

448 ELPC Petition at.

449 Id.

450 See C.F.R. §.(a), (e)(); id. §.(e).

451 Application at,,.

obligations toward HDI, ELPC has not explained how the information presented in the application is insufficient for this purpose.

Second, the application acknowledges that, because Holtec Palisades expects to rely on the decommissioning trust fund to cover the costs of all decommissioning and spent fuel management activities at Palisades, the funds in the trust account must be sufficient to provide for those costs. While ELPC asserts that the trust fund must cover all predicted or unforeseen costs, ELPC does not explain in what regard HDIs site-specific decommissioning cost estimate fails to account for either predicted or unforeseen costs.452 ELPC broadly asserts that Holtec has understated the costs of decommissioning, pointing to other parties contentions as the sole support for this claim.453 However, ELPC does not specify the costs that have been understated or identify the specific expert or evidentiary support presented by other petitioners that supports this claim. Moreover, our rules and practice make clear that we will not accept the wholesale incorporation by reference of large documents as the basis for a contention.454 In addition, we will not credit as evidentiary support a petitioners reliance on the arguments and evidence of another party without first finding that the petitioner has submitted an admissible contention of its own.455 Therefore, we do not find that ELPCs broad reliance on the substance of other petitioners contentions sufficient to support its claim. For a similar reason, we do not find that ELPCs argument that the existence of contentions regarding the adequacy of Holtecs 452 See ELPC Petition at.

453 Id. at.

454 See C.F.R. §.(f)(v) (petitioner must provide a concise statement of the facts or expert opinion supporting its argument along with references to the specific sources and documents on which it relies); see, e.g., Public Service Co. of New Hampshire (Seabrook Station, Units and

), CLI--, NRC, - () ([W]holesale incorporation by reference does not serve the purposes of a pleading.... The Commission expects parties to bear their burden and to clearly identify the matters on which they intended to rely with reference to a specific point.).

455 See Pilgrim, CLI--, NRC at.

site characterization and contingency allowance in the Indian Point proceeding supports admission of this contention.456 ELPC also argues that it cannot conduct any further analysis of Holtecs financial qualifications because Holtec has not provided a disclosure schedule related to the purchase and sale agreement between Entergy and Holtec. ELPC also requests that certain information redacted from the purchase and sale agreement be made publicly available.457 However, ELPC has not explained how the disclosure agreement it seeks is material to the review of the applicants financial qualifications. Further, ELPC could have used the process provided in the hearing opportunity notice to request access to the redacted information it seeks, but it did not do so.458 Because ELPC has not identified any requirement that prohibits the use of the decommissioning trust fund as the sole source of decommissioning funding or raised a supported, material dispute with the applications reliance on the decommissioning trust fund alone to demonstrate the proposed transferees financial qualifications, we do not find this contention admissible. Nevertheless, we note that we are admitting for hearing portions of the Attorney Generals Contention MI-that raise questions about the proposed transferees contingency allowance and reliance on DOE recoveries as a source of additional funding if needed for decommissioning.459 456 See ELPC Petition at - (citing petitions to intervene filed by the State of New York and the Town of Cortlandt, Village of Buchanan, and Hendrick Hudson School District in the Indian Point proceeding). The contentions to which ELPC alludes were not admitted in that proceeding. See Indian Point, CLI--, NRC at -.

457 ELPC Petition at.

458 See Hearing Opportunity Notice, Fed. Reg. at.

459 Joint Petitioners and ELPC each move to adopt and incorporate by reference all contentions filed by the other petitioner, claiming that both petitioners share many of the same issues and concerns about the proposed license transfers under consideration in this proceeding. Joint Petitioners Petition at ; ELPC Petition at -. However, in Pilgrim, we held that in order for a

I.

Mr. Mark Muhichs Petition to Intervene and Request for a Hearing Mr. Mulhich filed a petition to intervene and request for hearing along with several claims. While Mr. Muhich did not follow the NRCs electronic filing regulations and originally filed his petition on www.regulations.gov, the NRC placed his submittal on the adjudicatory docket of this proceeding and we review his petition below.460 Mr. Muhichs claims do not address any specific part of the application or the contention admissibility standards so we find that none meet our contention admissibility requirements. For instance, Mr. Muhich argues that the NRC must prepare a supplemental environmental impact statement prior to a decision on the license transfer, and he raises numerous environmental claims under NEPA. But he does not acknowledge or address the NRCs categorical exclusion regulation for license transfers, which the application notes and relies on. His NEPA arguments therefore fall beyond the scope of this proceeding. Mr. Muhich also claims that Holtec and its associates have involvement in questionable or even criminal business practices.461 He does not link these claims to this license transfer action.462 Mr. Muhich also argues that under petitioner to adopt the contention, argument, or evidentiary support of another petitioner, the petitioner must first be admitted to the proceeding as a party by demonstrating standing and submitting at least one admissible contention of its own. CLI--, NRC at -.

Because we find that neither Joint Petitioners nor ELPC have submitted an admissible contention, we deny each petitioners request to incorporate by reference and adopt the others contentions. Finally, ELPC characterized its motion as Contention of its petition to intervene.

See ELPC Petition at -. Because Contention does not otherwise identify a supported, material dispute with the license transfer application, we find it inadmissible.

460 See Order of the Secretary (Mar., ) (unpublished). Mr. Muhich also did not demonstrate his standing to intervene. He does not state how close he resides to Palisades; how frequently he may visit the area; how the harms he fears will occur due to the proposed transfer; and how he might suffer harm from the proposed action. In short, he did not describe how he would suffer concrete and particularized injury that is fairly traceable to, and redressable by, this license transfer action.

461 See Muhich Petition. at - (unnumbered).

462 See, e.g., Indian Point, CLI--, NRC at -; Pilgrim, CLI--, NRC at -.

C.F.R. §.(b)()(ii), HDI must submit [c]ontingency [f]actor calculations.463 This regulation requires an adequate contingency factor to be applied to the estimated ISFSI decommissioning cost. HDI has allotted a % contingency allowance to the ISFSI decommissioning costs. Mr. Muhich does not address the applications discussion of contingency, and therefore does not raise a genuine dispute with the application about the contingency allowance.

Mr. Muhichs petition additionally raises numerous other claims and requests, which we do not address individually here, but we note that none address the application and its discussion of financial qualifications. Because none raise a supported, genuine material dispute with the application on a matter material to the license transfer decision, the petition does not present an admissible contention for hearing.464 J.

Procedural Issues Associated with Subpart M Proceeding We designate the Chief Administrative Judge to appoint, within the next five business days, a single administrative judge to serve as the Presiding Officer for this proceeding, for the purposes of compiling the hearing record, ruling on motions related to developing the factual 463 See Muhich Petition at.

464 See also Rebuttal to Holtec et al (Applicants) Answer to Mark Muhichs Request for Public Hearing (Apr., ). After the NRC placed Mr. Muhichs petition on the adjudicatory docket and granted Mr. Muhich access to electronic hearing docket, Mr. Muhich filed numerous articles and other items on the docket. He did not address the NRC regulations under C.F.R.

§.(c) for submissions filed after the petition deadline. We consider all these submissions improperly filed. Nevertheless, these materials do not give rise to an admissible contention; Mr.

Muhich did not address the contention admissibility standards. See, e.g., Pilgrim Nuclear Waste to be Moved to Higher Ground, Cape Cod Times (MLA); Figure, from Increases in Great Lake Winds and Extreme Events Facilitate Interbasin Coupling and Reduce Water Quality in Lake Erie (MLA); Settlement Agreement Between Commonwealth of Massachusetts and Holtec (MLA); Memorandum of Understanding (Re: Proposed Sale of Vermont Yankee) (MLA).

record, presiding at any oral hearing, and certifying the completed hearing record to us.465 Should questions on the scope of the delegated authorities or other matter arise, the Presiding Officer may certify questions or refer rulings to us.466 The jurisdiction of the Presiding Officer will end on the certification of the hearing record to us. Thereafter, we will issue a decision on the certified record.467 Under our rules, the staff is not required to participate as a party in a license transfer adjudication. Nonetheless, the staff will offer into evidence its safety evaluation of the license transfer application and will provide one or more sponsoring witnesses.468 Section. specifies an oral hearing for license transfer proceedings, unless, within fifteen days from the order granting the hearing, the parties unanimously move for a hearing consisting of written comments.469 Once the nature of the hearing is established, Subpart M and our Model Milestones provide a default schedule for the remainder of the proceeding, subject to modification by the Presiding Officer; we encourage the Presiding Officer to adhere to these milestones to the extent practicable.470 Pursuant to the Model Milestones, we direct the Presiding Officer to certify the hearing record to us within twenty-five days of the conclusion of the hearing. If circumstances warrant expanding this period, we direct the Presiding Officer to 465 See C.F.R. §§.(a) (the Commission may designate one or more Commissioners, or any other person permitted by law to preside at a hearing);. (responsibilities and authority of Presiding Officer in the oral hearing).

466 See id. §.(b)().

467 See id. §.(b)().

468 See id. §.(b).

469 See id. §..

470 Id. pt., app. B, pt. III (Model Milestones for a Hearing on a Transfer of a License Conducted Under C.F.R. Part, Subpart M).

notify us promptly of the reasons for the delay and to provide us with the Presiding Officers anticipated new schedule.

IV. CONCLUSION For the reasons outlined, we

()

grant the Michigan Attorney Generals request for hearing and petition to intervene;

()

admit for hearing the specified portions of Michigan Attorney Generals Contention MI-Scope of Hearing The hearing will be limited to the following four challenges to the application, as summarized below and as addressed in more detail in the applicable sections of this decision:

(a) The projected length of time for transfer of all spent fuel off of the Palisades site:471 The applicants should address how they determined that the estimated -year spent fuel transfer period constitutes a plausible timeframe for removal of all Palisades spent fuel. In their description, the applicants should clarify the assumptions on which they relied, including what fuel acceptance priority and fuel allocation or transfer rate they assumed for their schedule.

In assessing financial qualifications for a license transfer we accept plausible forecasts.

The parties arguments therefore should address whether the estimated -year period reflects a plausible timeframe to complete the fuel transfer.

(b) Reasonableness of the site-specific decommissioning cost estimate falling below the minimum formula amount:

The applicants should provide a detailed explanation of the primary reasons that the cost estimate falls significantly below the minimum formula amount. We also direct the parties and invite the staff to address whether the minimum formula regulation in section

.(b) applies to this application.

(c) Adequacy of contingency funding:472 The applicants should explain how they calculated and derived the % level applied for contingency and concluded that this amount for contingency is reasonably adequate for Palisades. The parties should address relevant industry norms, practices, and standards for the contingency amount added to reactor decommissioning cost estimates at a similar project stage.

471 See supra Section III.C..b.().

472 See supra Section III.C..d.

The parties should address whether the % level of funding added reflects a plausible amount of funding for covering the contingency costs reasonably expected to be incurred at Palisades.

(d) Ability to provide additional financial assurance as a means to adjust funding:473 The applicants should describe how they will ensure that sufficient additional funding will be available as a means to adjust funding if needed. As part of their description, the applicants should address the issues described at the end of Section III.C..h. The parties additionally should address whether license conditions or other forms of assurances are warranted.

()

deny Joint Petitioners request for hearing and petition to intervene;

()

deny ELPCs request for hearing and petition to intervene;

()

deny Mr. Mark Muhichs request for hearing and petition to intervene;

()

dismiss as moot the Applicants motion to strike portions of Joint Petitioners reply;

()

dismiss as moot the Applicants motion to strike Joint Petitioners and Mr. Muhichs answers to the Applicants motion to strike;

()

direct the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel to Appoint a single administrative judge within the next five () business days to serve as the Presiding Officer to take all necessary actions to compile, complete, and certify the hearing record, including presiding over any oral hearing.

473 See supra Section III.C..h.

()

direct each party to state, within the next fifteen () days, whether it prefers an oral hearing or a hearing consisting of written comments.

()

direct the Presiding Officer to certify the hearing record to us within twenty-five () days of the conclusion of a hearing.

IT IS SO ORDERED.

For the Commission Brooke P. Clark Secretary of the Commission Dated at Rockville, Maryland, this th day of July.

Brooke P.

Clark Digitally signed by Brooke P. Clark Date: 2022.07.15 13:11:12 -04'00'

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of

)

)

Entergy Nuclear Operations, Inc., Entergy

)

Docket Nos. 50-255-LT-2 Nuclear Palisades, LLC, Holtec

)

50-155-LT-2 International, and Holtec Decommissioning

)

72-007-LT International, LLC

)

72-043-LT-2 (Palisades Nuclear Plant & Big Rock Point) )

)

CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing COMMISSION MEMORANDUM AND ORDER (CLI 08) have been served upon the following persons by Electronic Information Exchange.

U.S. Nuclear Regulatory Commission Office of Commission Appellate Adjudication Mail Stop: O-16B33 Washington, DC 20555-0001 ocaamail@nrc.gov U.S. Nuclear Regulatory Commission Office of the Secretary of the Commission Mail Stop: O-16B33 Washington, DC 20555-0001 hearingdocket@nrc.gov U.S. Nuclear Regulatory Commission Office of the General Counsel Mail Stop: O-14A44 Washington, DC 20555-0001 Tison A. Campbell, Esq.

David E. Roth, Esq.

Anita G. Naber, Esq.

Jeremy L. Watchutka, Esq.

Mary F. Woods, Esq.

Brian Newell, Senior Paralegal Georgia Hampton, Paralegal Amanda Black, Paralegal tison.campbell@nrc.gov david.roth@nrc.gov anita.goshnaber@nrc.gov jeremy.watchutka@nrc.gov mary.woods@nrc.gov brian.newell@nrc.gov georgia.hampton@nrc.gov amand.black@nrc.gov Environmental Law & Policy Center 35 E. Wacker Dr. Suite 1600 Chicago, IL 60601 Caroline Cox, Esq.

Margrethe Kearney, Esq.

ccox@elpc.org mkearney@elpc.org Michigan Department of Attorney General 525 W. Ottawa St.

Lansing, MI 48906 Michael Moody, Esq.

Amanda Churchill, Esq.

Joel King, Esq.

moodym2@michigan.gov churchilla1@michigan.gov kingj38@michigan.gov Mark Muhich 2466 Emmons Rd Jackson, MI 49201 markmuhich0@gmail.com Counsel for Dont Waste Michigan, et al Terry Lodge, Esq.

316 N. Michigan Street Suite 520 Toledo, OH 43604 E-mail: tjlodge50@yahoo.com

Entergy Nuclear Operations, Inc, Holtec International (Palisades Nuclear Plant & Big Point Rock)

Docket No. 50-255-LT-2, 50-155-LT-2, 72-007-LT, 72-043-LT-2 COMMISSION MEMORANDUM AND ORDER (CLI-22-08) 2 Counsel for Entergy Nuclear Operations, Inc Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street, NW Washington, DC 20036 Anne R. Leidich, Esq.

David R. Lewis, Esq.

anne.leidich@pillsburylaw.com david.lewis@pillsburylaw.com Susan H. Raimo, Esq.

Entergy Services, LLC 101 Constitution Avenue, N.W.

Washington, D.C. 20001 sraimo@entergy.com Counsel for Holtec International Balch &Bingham LLP 1710 Sixth Avenue North Birmingham, AL 35203-2015 Alan D. Lovett, Esq.

Nick Theodore, Esq.

alovett@balch.com ntheodore@balch.com Dated at Rockville, Maryland this 15th day of July 2021 Office of the Secretary of the Commission Clara I.

Sola Digitally signed by Clara I. Sola Date: 2022.07.15 13:19:20 -04'00'