ML23283A289
| ML23283A289 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 09/28/2023 |
| From: | Bessette P, Kenneally M, Lighty R Morgan, Morgan, Lewis & Bockius, LLP, Pacific Gas & Electric Co |
| To: | NRC/OGC, US Federal Judiciary, Court of Appeals, 9th Circuit |
| References | |
| 23-852, 34.1 | |
| Download: ML23283A289 (1) | |
Text
No.23-852 In the United States Court of Appeals F O R T H E N I N T H C I R C U I T SAN LUIS OBISPO MOTHERS FOR PEACE; FRIENDS OF THE EARTH; ENVIRONMENTAL WORKING GROUP, Petitioners,
- v.
UNITED STATES NUCLEAR REGULATORY COMMISSION; UNITED STATES OF AMERICA, Respondents, PACIFIC GAS & ELECTRIC COMPANY, Intervenor, STATE OF CALIFORNIA, Amicus Curiae.
On Petition for Review of an Order of the U.S. Nuclear Regulatory Commission BRIEF OF PACIFIC GAS AND ELECTRIC COMPANY PAUL M. BESSETTE MICHAEL E. KENNEALLY RYAN K. LIGHTY MORGAN, LEWIS & BOCKIUS LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004 (202) 739-3000 Counsel for Intervenor Pacific Gas and Electric Company Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 1 of 55
i CORPORATE DISCLOSURE STATEMENT Pacific Gas and Electric Company is a wholly owned subsidiary of PG&E Corporation. No publicly held corporation owns 10% or more of the stock of PG&E Corporation.
Dated: September 28, 2023 s/ Michael E. Kenneally MICHAEL E. KENNEALLY Counsel for Intervenor Pacific Gas and Electric Company Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 2 of 55
ii TABLE OF CONTENTS Page CORPORATE DISCLOSURE STATEMENT.......................................................... i TABLE OF AUTHORITIES.................................................................................... iv INTRODUCTION..................................................................................................... 1 JURISDICTIONAL STATEMENT.......................................................................... 3 STATEMENT OF THE ISSUES............................................................................... 5 STATEMENT OF THE CASE.................................................................................. 5 I.
Statutory and Regulatory Background............................................................ 5 II.
Factual Background......................................................................................... 8 A.
PG&E applied for license renewal in 2009, and the NRC accepted the application for docketing and started its review.............. 8 B.
After years of renewal proceedings, and with the California Public Utilities Commissions approval, PG&E withdrew its original application for license renewal.............................................. 10 C.
In 2022, California officials determined that preserving Diablo Canyons ability to continue operating is a matter of urgent statewide importance........................................................................... 11 D.
PG&E promptly requested that the NRC either reinstate PG&Es original license renewal application or grant an exemption to its default schedule requirements for timely renewal protection............................................................................... 14 E.
The NRC declined to resume review of PG&Es original application but agreed that the circumstances justified an exemption from the usual timely renewal schedule............................ 16
SUMMARY
OF THE ARGUMENT...................................................................... 18 STANDARD OF REVIEW..................................................................................... 21 ARGUMENT........................................................................................................... 23 I.
The NRC reasonably concluded that the exemption satisfies the requirements of the NRCs own regulations................................................. 23 A.
The exemption is authorized by law................................................... 23 Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 3 of 55
TABLE OF CONTENTS (continued)
Page iii 1.
Petitioners sweeping attack on timely renewal protection is inconsistent with the statutory language and binding precedent................................................................................... 24 2.
Petitioners have no statutory right to a hearing on a request for a timely renewal exemption.................................... 30 B.
The exemption presents no undue risk to public health and safety.................................................................................................... 31 C.
The exemption is justified by special circumstances.......................... 35 D.
The exemption falls within the NRCs categorical NEPA exclusions............................................................................................ 38 E.
Petitioners assortment of arbitrary-and-capricious arguments are unpersuasive.................................................................................. 41 II.
Vacating the exemption would be an improper remedy in any event........... 43 CONCLUSION........................................................................................................ 45 Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 4 of 55
iv TABLE OF AUTHORITIES Page(s)
CASES Alpha Venture Cap. Partners LP v. Pourhassan, 30 F.4th 920 (9th Cir. 2022)............................................................................... 41 Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc.,
462 U.S. 87 (1983).............................................................................................. 35 Brodsky v. NRC, 578 F.3d 175 (2d Cir. 2009)................................................................................. 4 Clapper v. Amnesty Intl USA, 568 U.S. 398 (2013).............................................................................................. 4 Ctr. for Biological Diversity v. Salazar, 706 F.3d 1085 (9th Cir. 2013)............................................................................ 39 Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018)........................................................................................ 27 Hamer v. Neighborhood Hous. Servs. of Chi.,
583 U.S. 17 (2017).............................................................................................. 29 Honeywell Intl, Inc. v. NRC, 628 F.3d 568 (D.C. Cir. 2010).............................................................................. 4 In the Matter of Pac. Gas & Elec. Co. (Diablo Canyon Nuclear Power Plant, Units 1 & 2),
CLI-15-21, 82 N.R.C. 295 (Nov. 9, 2015)........................................................... 9 In the Matter of Pac. Gas & Elec. Co. (Diablo Canyon Nuclear Power Plant, Units 1 & 2),
CLI-16-11, 83 N.R.C. 524 (June 2, 2016)............................................................ 9 Kisor v. Wilkie, 139 S. Ct. 2400 (2019)........................................................................................ 22 Magwood v. Patterson, 561 U.S. 320 (2010)............................................................................................ 29 Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 5 of 55
TABLE OF AUTHORITIES (continued)
Page(s) v Motor Vehicle Mfrs. Assn of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983)........................................................................................ 21, 41 Mountain Cmtys. for Fire Safety v. Elliott, 25 F.4th 667 (9th Cir. 2022)............................................................................... 39 Nat. Res. Def. Council v. NRC, 823 F.3d 641 (D.C. Cir. 2016)...................................................................... 22, 31 Natl Fam. Farm Coal. v. EPA, 966 F.3d 893 (9th Cir. 2020).............................................................................. 43 Pan-Atl. S.S. Corp. v. Atl. Coast Line R.R. Co.,
353 U.S. 436 (1957).....................................................................................passim Phillips v. U.S. Customs & Border Prot.,
74 F.4th 986 (9th Cir. 2023)................................................................................. 4 Pub. Citizen v. NRC, 573 F.3d 916 (9th Cir. 2009).............................................................................. 22 Safari Club Intl v. Haaland, 31 F.4th 1157 (9th Cir. 2022)............................................................................. 40 TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021).......................................................................................... 4 STATUTES & CONSTITUTIONAL PROVISIONS 28 U.S.C. § 2342........................................................................................................ 3 42 U.S.C. § 5841........................................................................................................ 5 Administrative Procedure Act, 5 U.S.C. § 551 et seq......................................passim 5 U.S.C. § 558....................................................................................... 2, 6, 24, 29 5 U.S.C. § 706..................................................................................................... 21 Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 6 of 55
TABLE OF AUTHORITIES (continued)
Page(s) vi Atomic Energy Act of 1954, 42 U.S.C. § 2011 et seq......................................passim 42 U.S.C. § 2133................................................................................. 5, 24, 28, 29 42 U.S.C. § 2134................................................................................................... 5 42 U.S.C. § 2231....................................................................................... 6, 24, 27 42 U.S.C. § 2232........................................................................................... 28, 29 42 U.S.C. § 2236................................................................................................. 32 42 U.S.C. § 2239......................................................................................... 3, 4, 30 CAL. CONST., art. IV, § 8(d)..................................................................................... 37 CAL. PUB. RES. CODE § 25548...........................................................................passim Interstate Commerce Act, 49 U.S.C. § 41 et seq............................................... 25, 26 National Environmental Policy Act, 42 U.S.C. § 4321 et seq..........................passim RULES & REGULATIONS 10 C.F.R.
§ 2.109..........................................................................................................passim
§ 2.206................................................................................................................. 32
§ 50.12..........................................................................................................passim
§ 50.100............................................................................................................... 32 pt. 51............................................................................................................... 7, 38
§ 51.14................................................................................................................... 7
§ 51.22..........................................................................................................passim pt. 54..................................................................................................................... 6
§ 54.15................................................................................................. 7, 15, 23, 42
§ 54.17................................................................................................................... 6 OTHER AUTHORITIES Cal. Energy Commn, Diablo Canyon Power Plant ExtensionCEC Analysis of Need to Support Reliability (Mar. 2, 2023), https://efiling.energy.ca.gov/
GetDocument.aspx?tn=249030&DocumentContentId=83587.......................... 37 Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 7 of 55
TABLE OF AUTHORITIES (continued)
Page(s) vii California Energy Commission, Docket No. 21-ESR-01, Notice of Joint-Agency Remote-Access Workshop RE: Diablo Canyon Power Plant (Aug.
5, 2022, Revised Aug. 11, 2022), https://efiling.energy.ca.gov/Get Document.aspx?tn=244536................................................................................ 12 Diablo Canyon Nuclear Plant to Be Shut Down, Power Replaced by Renewables, Efficiency, Storage (June 2016), https://foe.org/news/2016 diablo-canyon-nuclear-plant-to-be-shut-down/.................................................. 28 Letter from Brian K. Harris, NRC, to Paula Gerfen, Senior Vice President &
Chief Nuclear Officer, PG&E (Feb. 17, 2023), https://adamswebsearch2.
nrc.gov/webSearch2/main.jsp?AccessionNumber=ML23041A186.................. 32 Letter from Michele G. Evans, NRC, to Vice President, Entergy Nuclear Operations, Inc. (Aug. 19, 2023), https://adamswebsearch2.nrc.gov/
webSearch2/main.jsp?AccessionNumber=ML13197A034............................... 33 NRC, Diablo CanyonLicense Renewal Application, https://www.nrc.gov/
reactors/operating/licensing/renewal/applications/diablo-canyon.html........... 8, 9 Sammy Roth, California Promised to Close Its Last Nuclear Plant. Now Newsom Is Reconsidering, L.A. TIMES (Apr. 29, 2022), https://www.
latimes.com/environment/story/2022-04-29/california-promised-to-close-its-last-nuclear-plant-now-newsom-is-reconsidering......................................... 11 SB-846 Diablo Canyon Powerplant: Extension of Operations (2021-2022),
https://leginfo.legislature.ca.gov/faces/billHistoryClient.xhtml?bill_id=2021 20220SB846.................................................................................................passim Timothy Garner, California Urged to Keep Nuclear Plant Open to Meet Climate Goals, REUTERS (Feb. 4, 2022), https://www.reuters.com/world/us/
california-urged-keep-nuclear-plant-open-meet-climate-goals-2022-02-03/..... 12 U.S. Dept of Energy, Biden-Harris Administration Announces Major Investment to Preserve Americas Clean Nuclear Energy Infrastructure (Nov. 21, 2022), https://www.energy.gov/articles/biden-harris-administration-announces-major-investment-preserve-americas-clean-nuclear................................................................................................................. 14 Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 8 of 55
1 INTRODUCTION In 2009, Pacific Gas and Electric Company (PG&E) applied to renew the operating licenses for Units 1 and 2 of the Diablo Canyon Power Plant. The U.S.
Nuclear Regulatory Commission (NRC) accepted the license renewal application and began its review. In 2011, for example, the NRC issued a thorough safety evaluation report, a document over 700-pages-long analyzing the plants ability to effectively manage the effects of equipment-aging during the proposed renewal period. But in 2016, PG&E withdrew its application based in part on a prediction, endorsed by the California Public Utilities Commission (CPUC), that renewing the plants licenses would not be necessary to ensure the reliability of Californias grid.
That outlook has recently changed. In 2022, the State of California enacted bipartisan urgency legislation overturning the CPUCs decision and obligating PG&E to take action to resume the renewal process. Recognizing that Diablo Canyon supplies about 8.6% of Californias total electricity and 17% of its zero-carbon electricity, the Legislature found that the plants continued operation could prove necessary to improve statewide energy system reliability and to reduce the emissions of greenhouse gases while additional renewable energy and zero-carbon resources come online. CAL. PUB. RES. CODE § 25548(a)-(b). The Legislature therefore declared that seeking to extend the Diablo Canyon powerplants Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 9 of 55
2 operations for a renewed license term is prudent, cost effective, and in the best interests of all California electricity consumers. Id. § 25548(b). The legislation directed PG&E, as Diablo Canyons operator, to act quickly and in coordination with state agencies to take all actions necessary and prudent to extend Diablo Canyon powerplant operations. Id. § 25548(f).
Given these new instructions, PG&E promptly asked the NRC to either resume its review of PG&Es original license renewal application or grant an exemption from the NRCs normal timing requirements for obtaining timely renewal protection. Timely renewal protection is a concept under the Administrative Procedure Act (APA) that prevents the expiration of a license for a continuing activity if the licensee files a renewal application that is timely and sufficient under the relevant administrative agencys rules. 5 U.S.C. § 558(c). The NRC declined to resume its review of the original Diablo Canyon application, which all agree was filed early enough to obtain timely renewal protection under NRC regulations. But the NRC agreed that under agency rules, the exemption was proper to enable Diablo Canyon to receive timely renewal protection. In doing so, the NRC cited the special circumstances, particularly Californias newbut emphaticinsistence that Diablo Canyon should be able to continue operating past its original license term to promote the reliability of the statewide grid and Californias transition away from carbon-based energy sources.
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3 Petitioners now ask the Court to override the NRCs determination and the result of Californias legislative process. The Court, in their view, should require that Diablo Canyon be shuttered on its current license expiration dates if the NRC does not renew the licenses before then. Given the dramatic impact that such a ruling would havecutting off 9% of Californias total in-state-generated electricityone would expect Petitioners to offer strong legal and factual support for their request.
But they do not. Instead, they advance unprecedented statutory arguments that, if taken seriously, would nullify the APAs timely renewal provision. And they offer unsupported speculation that ignores the significant federal and state oversight of Diablo Canyons operations, which will continue throughout the period of timely renewal. The Court should reject Petitioners attempt to overturn the lawful exemption that the NRC reasonably decided to grant in these unique circumstances.
JURISDICTIONAL STATEMENT For the reasons stated in the Federal Respondents Answering Brief (NRC Br.), this Court lacks statutory subject matter jurisdiction to review the NRCs issuance of an exemption. See NRC Br. 22-29. Under the Hobbs Act, courts of appeals have exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of... all final orders of the [NRC] made reviewable by section 2239 of title 42. 28 U.S.C. § 2342(4). That provision in turn establishes judicial review of [a]ny final order entered in any proceeding of the kind Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 11 of 55
4 specified in [42 U.S.C. § 2239(a)]. 42 U.S.C. § 2239(b)(1). The specified category of proceeding includes any proceeding... for the granting, suspending, revoking, or amending of any license. Id. § 2239(a)(1)(A). But this language does not encompass final orders in proceedings, like the proceedings here, that grant an exemption to regulatory requirements but do not grant, suspend, revoke, or amend a license. See, e.g., Brodsky v. NRC, 578 F.3d 175, 181 (2d Cir. 2009) ([W]e cannot read exemptions into the plain text of [42 U.S.C.] § 2239(a), particularly when the NRC itself (to which deference is owed) is urging that exemptions are different from amending... [a] license and the other orders mentioned in that section.);
Honeywell Intl, Inc. v. NRC, 628 F.3d 568, 575 (D.C. Cir. 2010) (distinguishing Brodsky where the NRC had treated an exemption as a license amendment).
Even if the Court had statutory subject matter jurisdiction, Petitioners still would lack Article III standing and a ripe controversy. See NRC Br. 30-33. When a litigant seeks to base standing on a risk of future injury, settled precedent requires
[the litigant] to show that a risk of harm is sufficiently imminent and substantial.
Phillips v. U.S. Customs & Border Prot., 74 F.4th 986, 995 (9th Cir. 2023) (quoting TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2210 (2021)). To clear this threshold, the threatened injury must be certainly impending because mere [a]llegations of possible future injury are not enough. Clapper v. Amnesty Intl USA, 568 U.S. 398, 409 (2013) (citation omitted). Petitioners have not identified any certainly Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 12 of 55
5 impending injury to their legally cognizable interests. For this reason, too, the Court lacks jurisdiction over the Petition for Review.
STATEMENT OF THE ISSUES
- 1.
Whether the Court has jurisdiction over the Petition for Review.
- 2.
Whether it was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law for the NRC to conclude that under its rules, granting an exemption from the NRCs default schedule for timely renewal protection (a) was authorized by law; (b) would not present an undue risk to the public health and safety and was consistent with the common defense and security; (c) was supported by special circumstances; and (d) was eligible for a categorical exclusion from further review under the National Environmental Policy Act (NEPA).
STATEMENT OF THE CASE I.
Statutory and Regulatory Background The Atomic Energy Act of 1954, 42 U.S.C. § 2011 et seq., governs the issuance of operating licenses for nuclear power plants, which was originally overseen by the Atomic Energy Commission. See id. §§ 2133, 2134(b). In 1974, Congress transferred the Atomic Energy Commissions licensing and related regulatory functions to the newly created NRC. Id. § 5841(a)(1), (f).
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6 Congress explicitly subjected the Atomic Energy Act to the provisions of the APA, which had been enacted eight years earlier. Id. § 2231 (The provisions of subchapter II of chapter 5, and chapter 7, of title 5 shall apply to all agency action taken under this chapter.). Section 9(b) of the APA created what is known as timely renewal protection for licenses that federal law requires a regulated party to obtain from an administrative agency:
When the licensee has made timely and sufficient application for a renewal or a new license in accordance with agency rules, a license with reference to an activity of a continuing nature does not expire until the application has been finally determined by the agency.
5 U.S.C. § 558(c). The effect of this provision is to protect a person with a license from the damage he would suffer by being compelled to discontinue a business of a continuing nature, only to start it anew after the administrative hearing is concluded. Pan-Atl. S.S. Corp. v. Atl. Coast Line R.R. Co., 353 U.S. 436, 439 (1957).
The NRC has issued detailed rules governing the sort of license renewal applications at issue here. See 10 C.F.R. pt. 54. Among other things, these applications are ordinarily subject to 10 C.F.R. § 2.109, the NRCs regulation on timely renewal protection. See id. § 54.17(a) (stating that [t]he filing of an application for a renewed license must be in accordance with subpart A of 10 CFR part 2, which includes 10 C.F.R. § 2.109). Under the relevant part of the NRCs Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 14 of 55
7 timely renewal protection regulation, when a current licensee files a sufficient application for renewal... at least 5 years before the expiration of the existing license, that existing license will not be deemed to have expired until the application has been finally determined. Id. § 2.109(b).
The license-renewal rules authorize the NRC to grant exemptions to these requirements when certain conditions are met. Id. § 54.15. In particular, the NRC may grant such exemptions if they are [a]uthorized by law, will not present an undue risk to the public health and safety, and are consistent with the common defense and security, although the NRC will not consider granting an exemption unless special circumstances are present. Id. § 50.12(a). Special circumstances are present whenever... [t]here is present any... material circumstance not considered when the regulation was adopted for which it would be in the public interest to grant an exemption. Id. § 50.12(a)(2)(vi).
The NRC also has detailed regulations governing the agencys obligation to comply with NEPA. See 10 C.F.R. pt. 51. As relevant here, the NRC has identified through notice-and-comment rulemaking certain categories of actions that ordinarily do not require the NRC to prepare an environmental assessment or environmental impact statement. See 2-ER-20. These are categories of actions that, in the NRCs judgment, do not individually or cumulatively have a significant effect on the human environment. 2-ER-91; see 10 C.F.R. § 51.14. In 2010, the NRC added a categorical Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 15 of 55
8 exclusion addressing the granting of exemptions from regulatory requirements. 2-ER-96; see 10 C.F.R. § 51.22(c)(25).
II.
Factual Background PG&E holds forty-year operating licenses (numbers DPR-80 and DPR-82) that authorize the operation of Diablo Canyon Power Plant Units 1 and 2, pressurized water reactors located in San Luis Obispo, California. 1-ER-3. The operating license for Unit 1 has an expiration date of November 2, 2024. 1-ER-4. The Unit 2 license has an expiration date of August 26, 2025. Id.
A.
PG&E applied for license renewal in 2009, and the NRC accepted the application for docketing and started its review.
On November 23, 2009nearly fifteen years before the first of these licenses was to expirePG&E submitted a license renewal application for both licenses. 2-ER-80. The application spanned more than 1,200 pages and was accompanied by an environmental report that was itself over 700 pages long.1 The NRC staff determined that PG&Es submission contained sufficient information... to enable the staff to undertake a review of the application, making the application acceptable for docketing. 2-ER-84.
1 Both documents are available on the NRCs website. NRC, Diablo Canyon License Renewal Application, https://www.nrc.gov/reactors/operating/licensing/
renewal/applications/diablo-canyon.html (last updated Dec. 7, 2022).
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9 This notice kicked off the NRCs usual process for reviewing a license renewal application. The NRC published notice that interested parties could request a hearing or seek leave to intervene in the renewal proceedings. Id. Two of the Petitioners here, San Luis Obispo Mothers for Peace and Friends of the Earth, sought to intervene so they could challenge the application in certain respects. Ultimately, the Atomic Safety and Licensing Board and NRC determined that neither Petitioner had raised contentions that warranted a hearing under the governing agency standards. See In the Matter of Pac. Gas & Elec. Co. (Diablo Canyon Nuclear Power Plant, Units 1 & 2), CLI-16-11, 83 N.R.C. 524 (June 2, 2016); In the Matter of Pac. Gas & Elec. Co. (Diablo Canyon Nuclear Power Plant, Units 1 & 2), CLI-15-21, 82 N.R.C. 295 (Nov. 9, 2015).
While these adjudicatory proceedings were happening, the NRC staff was conducting its safety and environmental reviews. The reviews included various supplements and revisions to the license renewal application, multiple public meetings on licensing and environmental matters, and multiple audits on safety and environmental issues. See NRC, Diablo CanyonLicense Renewal Application, https://www.nrc.gov/reactors/operating/licensing/renewal/applications/diablo-canyon.html (last updated Dec. 7, 2022). The NRC staff ultimately issued a 700-plus-page safety evaluation report on June 2, 2011, to document its safety review of the application. 2-ER-101-22 (excerpts of the safety evaluation report).
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10 B.
After years of renewal proceedings, and with the California Public Utilities Commissions approval, PG&E withdrew its original application for license renewal.
On June 21, 2016, PG&E wrote to the NRC and asked it to suspend activity on the license renewal application. 2-ER-123. PG&E explained that it had been seeking required approvals from the California State Lands Commission and the California Coastal Commission and that, [b]ased on discussions with various stakeholders involved in these state approval processes, PG&E ha[d] reached an agreement in principle not to proceed with license renewal for Diablo Canyon. Id.
The letter noted that the agreement in principle was still subject to approval by the CPUC. Id. So PG&E asked for suspension pending the CPUCs decision, but said it would withdraw its application if the CPUC approved the agreement. Id.
On January 11, 2018, the CPUC issued a decision approving the retirement of Diablo Canyon Power Plant at the expiration of its existing NRC licenses. 2-ER-125-86. Various parties expressed diverging views before the CPUC on appropriate retirement dates for Diablo Canyon. See 2-ER-133-40. PG&E was forecasting a significantly reduced need for electric generation from Diablo Canyon. 2-ER-133.
This forecast was based on decreasing demand from customers who receive energy supply from PG&E (known as bundled customers). 2-ER-133-35. Based on the premise that Diablo Canyon would no longer be needed, the CPUC rejected the argument, advanced by Californians for Green Nuclear Power, that retiring Diablo Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 18 of 55
11 Canyon would be detrimental to grid reliability because of the power plants long track record of reliability. 2-ER-136. The CPUC compared Californias electric grid to a person who owned 12 cars, but never used more than three cars at one time. 2-ER-136 n.6. For such a person, selling cars 11 and 12even if they were more reliable than cars 9 and 10would not significantly change the ability to have three operable cars. Id.
After the CPUCs decision, and consistent with its prior representation, PG&E wrote to the NRC on March 7, 2018 and formally requested to withdraw its license renewal application. 2-ER-206. The NRC granted the withdrawal request in April 2018. 2-ER-208-11.
C.
In 2022, California officials determined that preserving Diablo Canyons ability to continue operating is a matter of urgent statewide importance.
After the application withdrawal, PG&E set to work on decommissioning planning efforts in anticipation of the shutdown of the two Diablo Canyon reactors in 2024 and 2025. During the first half of 2022, however, news emerged that state officials were rethinking the states energy needs and the plants planned retirement, particularly after many Californians experienced rolling blackouts during an intense heatwave in the summer of 2020. See Sammy Roth, California Promised to Close Its Last Nuclear Plant. Now Newsom Is Reconsidering, L.A. TIMES (Apr. 29, 2022),
https://www.latimes.com/environment/story/2022-04-29/california-promised-to-Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 19 of 55
12 close-its-last-nuclear-plant-now-newsom-is-reconsidering; see also, e.g., Timothy Garner, California Urged to Keep Nuclear Plant Open to Meet Climate Goals, REUTERS (Feb. 4, 2022), https://www.reuters.com/world/us/california-urged-keep-nuclear-plant-open-meet-climate-goals-2022-02-03/.
In August 2022, the California Energy Commission held a joint-agency workshop with the Office of the Governor and the California Independent System Operator to provide an update on electric reliability needs in the face of climate change, supply chain delays and other factors affecting the online dates of new generation and energy storage projects, and a discussion of the role that the Diablo Canyon Power Plant could have in supporting mid-term electric reliability and Californias clean energy transition. California Energy Commission, Docket No.
21-ESR-01, Notice of Joint-Agency Remote-Access Workshop RE: Diablo Canyon Power Plant, at 1 (Aug. 5, 2022, Revised Aug. 11, 2022), https://
efiling.energy.ca.gov/GetDocument.aspx?tn=244536. The workshop notice explained that California continues to experience extreme weather conditions as a result of the changing climate, with unprecedented impacts on the reliability of the electric system. Id. at 2. The agency proposed to explore actions that are needed to preserve the option of extending, for a limited term, the operating license of the Diablo Canyon Power Plant. Id.
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13 Those actions came to fruition on September 2, 2022 with the enactment and signing of California Senate Bill No. 846 (S.B. 846). This bipartisan legislation, which passed by near-unanimous votes,2 found and declared that:
Preserving the option of continued operations of the Diablo Canyon powerplant for an additional five years beyond 2025 may be necessary to improve statewide energy system reliability and to reduce the emissions of greenhouse gases while additional renewable energy and zero-carbon resources come online, until those new renewable energy and zero-carbon resources are adequate to meet demand. Accordingly, it is the policy of the Legislature that seeking to extend the Diablo Canyon powerplants operations for a renewed license is prudent, cost effective, and in the best interests of all California electricity customers....
CAL. PUB. RES. CODE § 25548(b) (emphasis added). The legislation recognized that Diablo Canyon currently supplied about 17% of Californias zero-carbon electricity supply and about 8.6% of its total electricity supply. Id. § 25548(a). As a result, the legislation directed that [a]ll relevant state agencies and the operator of the Diablo Canyon powerplant must act quickly and in coordination to take all actions necessary and prudent to extend Diablo Canyon powerplant operations. Id. § 25548(f). To that end, the legislation invalidated the prior CPUC decision approving the retirement of Diablo Canyons two reactors upon the expiration of the operating 2
See SB-846 Diablo Canyon Powerplant: Extension of Operations (2021-2022),
https://leginfo.legislature.ca.gov/faces/billHistoryClient.xhtml?bill_id=2021202 20SB846.
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14 licenses, directed PG&E to seek renewal of those licenses, and authorized a loan of up to $1.4 billion for that purpose.
A short time later, the U.S. Department of Energy certified the Diablo Canyon units to participate in the Civil Nuclear Credit program and conditionally awarded funding to support the plants continued operation. U.S. Dept of Energy, Biden-Harris Administration Announces Major Investment to Preserve Americas Clean Nuclear Energy Infrastructure (Nov. 21, 2022), https://www.energy.gov/articles/
biden-harris-administration-announces-major-investment-preserve-americas-clean-nuclear. The Secretary of Energy, Jennifer M. Granholm, described the funding as a critical step toward ensuring that our domestic nuclear fleet will continue providing reliable and affordable power to Americans as the nations largest source of clean electricity. Id. California Senator Dianne Feinstein emphasized that keeping Diablo Canyon open past its license expiration dates is necessary if California is going to meet its ambitious clean energy goals while continuing to deliver reliable power. Id.
D.
PG&E promptly requested that the NRC either reinstate PG&Es original license renewal application or grant an exemption to its default schedule requirements for timely renewal protection.
Citing Californias new assessment of its current and projected energy needs, and of Diablo Canyons role, PG&E requested that the NRC resume its review of PG&Es original license renewal application. 2-ER-271-72. In the alternative, Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 22 of 55
15 should the NRC require a wholly new application, PG&E asked for an exemption to the default timely renewal schedule set by 10 C.F.R. § 2.109(b). 2-ER-272. In place of the requirement that applications be submitted at least five years before the expiration datea schedule that was no longer possible given the timing of the states reassessmentPG&E asked for timely renewal protection if it submitted a new license renewal application by December 31, 2023. Id.
In support of these requests, PG&E provided a detailed analysis. As relevant here, PG&E contended that an exemption was appropriate under 10 C.F.R. § 54.15 and 10 C.F.R. § 50.12 because it was authorized by law, presented no undue risk to public health and safety, was consistent with the common defense and security, and was supported by special circumstances. 2-ER-284-90. PG&E also contended that the exemption was eligible under NRC regulations for a categorical exclusion from further NEPA review. 2-ER-290-92.
PG&E observed that its exemption request was supported by NRC precedent.
It cited five past examples in which the NRC had previously approved requests for exemptions from the default schedule for timely renewal protection under 10 C.F.R.
§ 2.109. 2-ER-290; 2-ER-293-94. These exemptions were not limited to applications for which review was anticipated to be completed before the existing licenses expiration. 2-ER-290. In one case involving the University of Utah Research Reactor, the exemption authorized timely renewal even if the application Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 23 of 55
16 was submitted less than 30 days before the existing licenses expiration date, and the review ultimately stretched beyond that date by more than six years. Id. In addition, PG&E identified Indian Point Nuclear Generating Units 2 and 3 as precedent for power reactors continuing to safely operate in a period of timely renewal, beyond their licenses original expiration dates. Id.
E.
The NRC declined to resume review of PG&Es original application but agreed that the circumstances justified an exemption from the usual timely renewal schedule.
On January 24, 2023, the NRC staff wrote to PG&E to explain that the agency would not resume review of PG&Es original application. 3-ER-494-95. Although PG&E had submitted annual updates through December 2015, it had not submitted updates since then because of the suspension and ending of the original review. 3-ER-495. The NRC also wanted to provide the public with a new opportunity for a hearing rather than rely on the earlier hearing-request process (in which Friends of the Earth and San Luis Obispo Mothers for Peace had already participated). 3-ER-495-96; see supra p. 9.
On March 2, 2023, the NRC granted PG&Es alternative request of a timely renewal exemption. 1-ER-3-7. The NRC agreed with PG&Es explanation that the request met the requirements for an exemption under the applicable NRC rule, 10 C.F.R. § 50.12. First, the exemption was authorized by law, even though the application would be submitted less than five years before the licenses existing Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 24 of 55
17 expiration dates, because that five-year time period was not required by any statute but rather was the result of agency discretion authorized by the timely renewal provision of the APA. 1-ER-5. Before 1992, the NRCs rules set a thirty-day requirement for timely renewal. Id. The NRC contemplated switching to a three-year schedule but ultimately switched to five years to set a schedule consistent with the NRCs alternative scheduling requirements for decommissioning plans. Id. In its decision here, the NRC emphasized that a timely renewal exemption constitutes a change to the schedule by which the licensee must submit its application for license renewal and does not involve any change to the current operating license. Id.
Next, the NRC explained that the exemption presented no undue risk to public health and safety. Id. That was because the exemption made no change to the facility or its current operating license, and because the NRC would continue to conduct all regulatory activities associated with licensing, inspection, and oversight and continue to take whatever action may be necessary to ensure adequate protection of the public health and safety. Id. Even during the term of a license, the NRC always retains authority to modify, suspend, or revoke a license for cause, such as a serious safety concern. Id. The exemption did nothing to change that.
Even with the exemption, moreover, the NRC believed it would have enough time after a December 2023 application submission to determine if any immediate actions need to be taken prior to the licensee entering the period of timely renewal.
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18 Id. Also, the NRC stressed that it had already issued a safety evaluation in connection with the original application, which would allow the NRC staff to leverage insights from its earlier partial review. Id. For similar reasons, the NRC concluded that the exemption was consistent with the common defense and security.
Id.
The final requirement of 10 C.F.R. § 50.12the presence of special circumstanceswas also satisfied. 1-ER-5-6. Here, the significant change in Californias projections of its own energy demands, as illustrated most dramatically in the passage of S.B. 846, showed that the exemption would be in the public interest.
1-ER-6. The five-year schedule imposed by 10 C.F.R. § 2.109(b) did not anticipate the sort of climate change impacts and serious electricity reliability challenges that states like California would be facing three decades later. Id.
Lastly, the NRC explained that, in addition to satisfying the requirements for exemptions under 10 C.F.R. § 50.12, PG&Es request satisfied all the requirements for a categorical exclusion from further NEPA review under 10 C.F.R.
§ 51.22(c)(25). 1-ER-6-7.
SUMMARY
OF THE ARGUMENT In its decision below, the NRC determined that granting PG&Es requested timely renewal exemption was consistent with the NRCs regulation on exemptions and excluded from further NEPA review under the NRCs regulation on categorical Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 26 of 55
19 exclusions. Both determinations were well supported by the law and facts and must be upheld under the deferential standard of review that governs this appeal.
First, the NRC reasonably interpreted its exemption regulation. As the NRC explained, the exemption is authorized by law because the preconditions for timely renewal protection under the APA are dictated by the agencys own rules, and the NRC is free under its rules and all relevant statutes to treat PG&Es forthcoming license renewal application as timely. Petitioners main counterargument is that commercial reactors should never be able to enter a period of timely renewal while their renewal applications remain unresolved. But the Atomic Energy Act does not support that sweeping theory, which runs headlong into Supreme Court precedent on the APAs timely renewal provision. Nor does the Atomic Energy Act support Petitioners attempts to manufacture a requirement the NRC complete its safety review and administrative hearing before the start of a period of timely renewal. The NRCs exemption here is authorized by law, as the agency concluded.
Second, the NRC reasonably determined, based on its administrative experience and expertise, that the exemption poses no undue risk to public health and safety. Petitioners contrary claims ignore the many safeguards that are already in place to ensure Diablo Canyon remains in safe operation throughout any period of timely renewal. Those safeguards include ongoing inspections and oversight by both federal and state regulators. And even under the exemptions schedule, the Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 27 of 55
20 NRC determined that there was sufficient time to determine whether any immediate actions must be taken before the period of timely renewal. The NRC explained that it can act efficiently and with sharper focus because of its earlier safety evaluation based on PG&Es original application.
Third, special circumstances support the exemption, as both the NRC and the state of California have stressed. The NRC rightly placed great weight on California lawmakers recent determinationembodied in emergency legislation to enable Diablo Canyon to remain openthat Diablo Canyon remains important to the reliability of the states electrical grid. Petitioners unpersuasively downplay this legislation on the theory that California never intended this exemption. But that theory flies in the face of the legislative text and Californias own amicus brief in this Court, which strongly endorses the NRCs exemption decision.
In addition, the NRC reasonably concluded, based on the plain language of its categorical exclusion regulation, that no further NEPA analysis was needed for the exemption. The NRC has applied the same categorical exclusion in at least five other recent timely renewal exemption decisions, which Petitioners cite as relevant precedent in parts of their brief but conveniently ignore when discussing the categorical exclusion.
In short, the exemption decision was entirely lawful and far from an arbitrary-and-capricious decision. But if the Court were to disagree, it still should not vacate Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 28 of 55
21 the exemption. At most, it should remand the decision to the NRC without vacatur so the agency can address any issues that the Court might identify. It is well settled that remand without vacatur is the proper remedy when vacatur would have disruptive consequences. Vacating the exemptions here, on the eve of the licenses current expiration dates, would be severely disruptive. Such a ruling would likely require the Diablo Canyon reactors to shut down on their expiration dates, eliminating nearly 9% of Californias electricity supply at a time when the reliability of Californias electricity supply is under unprecedented strain. And once shut down, there is no guarantee that Diablo Canyon would ever come back online.
Elected lawmakers and expert regulators have determined that Diablo Canyons reactors should not be forced to shut down on their current license expiration dates.
Petitioners give the Court no justification to override that determination.
STANDARD OF REVIEW As Petitioners agree, this appeal is governed by well-settled APA standards.
See Petrs Br. 18-19. The Court may set aside the NRCs decision only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). The scope of review under the arbitrary and capricious standard is narrow and a court is not to substitute its judgment for that of the agency. Motor Vehicle Mfrs. Assn of U.S., Inc. v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983). The Court will set aside NRC action only if the agency Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 29 of 55
22 has relied on factors that Congress has not intended it to consider, has entirely failed to consider an important aspect of the problem, or has offered an explanation for that decision that runs counter to the evidence before the agency or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
Pub. Citizen v. NRC, 573 F.3d 916, 923 (9th Cir. 2009) (citation omitted); see also, e.g., Nat. Res. Def. Council v. NRC, 823 F.3d 641, 648 (D.C. Cir. 2016) (Our general posture of deference toward agency decision-making is particularly marked with regards to NRC actions because the [Atomic Energy Act] is hallmarked by the amount of discretion granted the Commission in working to achieve the statutes ends. (citation omitted)).
In addition, and as Petitioners rightly note (Petrs Br. 18), the NRCs interpretation of its own regulations is controlling unless plainly erroneous or inconsistent with the regulations being interpreted. Pub. Citizen, 573 F.3d at 923.
After all, [a]gencies (unlike courts) have unique expertise, often of a scientific or technical nature, relevant to applying a regulation to complex or changing circumstances. Kisor v. Wilkie, 139 S. Ct. 2400, 2413 (2019) (citation omitted).
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23 ARGUMENT I.
The NRC reasonably concluded that the exemption satisfies the requirements of the NRCs own regulations.
The decision on review determined that PG&Es request met all the NRCs criteria for an exemption under 10 C.F.R. § 50.12 and § 54.15 and that the exemption also met the NRCs criteria for a categorical NEPA exclusion under 10 C.F.R.
§ 51.22(c)(25). These determinations are entitled to considerable deference, and Petitioners fail to offer any valid grounds for setting them aside, especially under the applicable standard of review.
A.
The exemption is authorized by law.
First, the NRC reasonably concluded that the requested exemption is
[a]uthorized by law. 10 C.F.R. § 50.12(a); 1-ER-4-5. As the NRC articulated, nothing in the Atomic Energy Act, the APA, or any other statute limits timely renewal protection for commercial operating licenses to licensees who submit applications at least five years before their licenses existing expiration dates. 1-ER-
- 5. Rather, that five-year timetable arose from the NRCs exercise of discretion. Id.
The agency chose a five-year schedule to coincide with scheduling requirements for decommissioning plans and to provide ample time, as a general matter, to resolve complex technical issues should any arise. Id. It would not have violated any statute, however, for the NRC to select a much shorter time, including the thirty-day schedule that the NRC used before 1992. See id.
Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 31 of 55
24 Petitioners cannot point to any contrary legal provision mandating a five-year timetable. On the contrary, the APAs timely renewal provision specifically grants agencies broad authority to adopt their own rules for the timeliness of renewal applications. 5 U.S.C. § 558(c) (requiring that the application be timely and sufficient... in accordance with agency rules). And for its part, the Atomic Energy Act is silent on timely renewal protection (other than in its incorporation of the APAs timely renewal provision, see 42 U.S.C. § 2231).
So to make their argument against the NRCs legal authority to categorize PG&Es forthcoming application as timely, Petitioners resort to broad arguments that sweep far beyond an argument that a five-year schedule is somehow required by law. These arguments would cast doubt on the entire practice of timely renewal protection, and they are inconsistent with the governing statutes and precedent.
1.
Petitioners sweeping attack on timely renewal protection is inconsistent with the statutory language and binding precedent.
Petitioners lead argument (Petrs Br. 23-24) relies on the upper limit that the Atomic Energy Act places on the term for commercial reactor operating licenses.
Such licenses may not exceed forty years. 42 U.S.C. § 2133(c). According to Petitioners, allowing the NRC to treat PG&Es licenses as being in timely renewal would effectively repeal this forty-year upper limit by preventing the licenses from expiring at their forty-year mark.
Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 32 of 55
25 The first thing to note about this argument is that it would apply to any timely renewal protection for a license that has a statutory upper limit. Nothing about this argument depends on the fact that PG&E will be submitting its new renewal application ten months before the first expiration date rather than five years before.
All that matters under Petitioners logic is that when a commercial reactor operating license enters a period of timely renewal, by definition, that license is not expiring within forty years. This argument thus constitutes a broad-brush attack on any timely renewal protection when the applicable licensing statute sets an expiration date for a license and would largely nullify the APAs timely renewal provision.
It is unsurprising, then, that the Supreme Court rejected this argument long ago. In Pan-Atlantic Steamship, the Supreme Court considered whether the APAs timely renewal provision applied to a provision in the Interstate Commerce Act that allowed the Interstate Commerce Commission to grant a temporary authorization for common carrier service by water but stated that such temporary authorization shall be valid... not for more than an aggregate of one hundred and eighty days. 353 U.S. at 437 (citation omitted). The agency had granted temporary authorization to the steamship operator but failed to complete its review of the operators application for permanent authorization before the end of the 180-day period. Id. at 438. Not only that, the agency conceded that a final determination on an application for permanent authorization almost inevitably exceeds 180 days. Id. at 439-40. As a Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 33 of 55
26 result, applying the APAs timely renewal provision would guarantee, in nearly every case, that the 180-day statutory limit would be exceeded. But the Supreme Court did not treat the statutes express upper limit for temporary authorizations as a reason to disregard the APAs timely renewal provision. Instead, the Court held that the operators filing of the application for permanent authorization triggered APA timely renewal protection and permitted continued operations even after the end of the 180-day statutory time limit. Id. at 439. In the Courts view, requiring the carrier to discontinue service at the end of 180 days... would mutilate the administrative system which Congress created by the two Acts. Id. at 440.
Pan-Atlantic Steamship similarly refutes Petitioners argument (Petrs Br. 25-
- 26) that applying the APAs timely renewal provision here would impliedly repeal the time limit set in the Atomic Energy Act. The dissent in Pan-Atlantic Steamship unsuccessfully pressed the same argument. See Pan-Atl. S.S., 353 U.S. at 446 n.5 (Burton, J., dissenting) (Repeals by implication are not favored.). If anything, Petitioners implied-repeal argument is on far weaker ground than the argument that failed to carry the day in Pan-Atlantic Steamship. In that case, the Interstate Commerce Act had predated the APA and did not explicitly incorporate the APAs provisions. Yet the Supreme Court still subjected its 180-day time limit for temporary authorizations to the APAs timely renewal provision. Id. at 439 (majority opinion) ([W]e see no reason why the provisions of this later Act [i.e.,
Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 34 of 55
27 the APA] may not be invoked.). Here, in contrast, the Atomic Energy Act was enacted after the APA, and Congress did explicitly subject it to the APAs provisions, including the timely renewal provision. See 42 U.S.C. § 2231.
Petitioners thus come nowhere close to showing that the APAs timely renewal provision should be brushed aside because of the Atomic Energy Acts forty-year time limit. By incorporating the APA into the Atomic Energy Act, Congress plainly intended that both statutory regimes should coexist, much like the statutes in Pan-Atlantic Steamship. See, e.g., Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1624 (2018)
(A party seeking to suggest that two statutes cannot be harmonized, and that one displaces the other, bears the heavy burden of showing a clearly expressed congressional intention that such a result should follow. (citation omitted)).
Finally, Pan-Atlantic Steamship shows that Petitioners account of the supposed purpose of the Timely Renewal Doctrine is much too narrow. Petrs Br.
- 26. Nothing in the APAs text or underlying purposes confines timely renewal protection to cases of dilatory agency conduct. Id. Nor did the Supreme Court suggest that timely renewal was warranted in Pan-Atlantic Steamship because the Interstate Commerce Commission was somehow dilatory in not resolving the application there within 180 days. On the contrary, as Petitioners own quotation shows, the APAs timely renewal provision stems from more general concerns about the very severe consequences of the conferring of licensing authority upon Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 35 of 55
28 administrative agencies. Petrs Br. 26 (citation omitted). As the Supreme Court determined, the provision may properly be invoked to protect a person with a license from the damage he would suffer by being compelled to discontinue a business of a continuing nature, only to start it anew after the administrative hearing is concluded. Pan-Atl. S.S., 353 U.S. at 439. If that concern applies to running a steamship line, it applies all the more to running a commercial nuclear reactor.3 In a variation on the same theme, Petitioners try to read 42 U.S.C. § 2232(a) and § 2133(d) as foreclosing timely renewal whenever the NRC will not complete the full safety review required to renew a license before the original expiration date.
Petrs Br. 29. Here too, if the Atomic Energy Act required a complete review as a precondition for timely renewal, timely renewal protection would be largely 3 Petitioners attempts to blame the need for an exemption on PG&Es own vacillations and independent decision to close the reactors (Petrs Br. 27) are absurd. The original decision to retire Diablo Canyon was the result of negotiations with a range of stakeholders, including Friends of the Earth. Indeed, when the decision was announced, Friends of the Earth called it a milestone achievement for the organization and insisted that a robust technical and economic report commissioned by Friends of the Earth served as a critical underpinning for the negotiations by detailing how power from the Diablo Canyon reactors could be replaced with renewable, efficiency and energy storage resources which would be both less expensive and greenhouse gas free. Friends of the Earth, Diablo Canyon Nuclear Plant to Be Shut Down, Power Replaced by Renewables, Efficiency, Storage (June 2016), https://foe.org/news/2016 diablo-canyon-nuclear-plant-to-be-shut-down/. The need for the exemption arises from Californias new determination, based on intervening experience, that Diablo Canyon remains vital to the reliability of the states electrical grid, not from vacillations by PG&E.
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29 superfluous. By definition, timely renewal protection exists to protect a licensees ability to continue operating until the application has been finally determined by the agency. 5 U.S.C. § 558(c). Nothing in the Atomic Energy Act provisions cited by Petitioners states, or even implies, that a completed review is a precondition for timely renewal protection. The first provision describes certain required contents of a license application to facilitate the NRCs ultimate decision. 42 U.S.C. § 2232(a).
And the second provision limits the ultimate issuance of a license when, in the opinion of the Commission, the license would harm public health and safety. Id.
§ 2133(d). Petitioners implicitly ask the Court to add language to these statutory provisions to create a requirement that simply is not there, but the Court may not do so. See, e.g., Hamer v. Neighborhood Hous. Servs. of Chi., 583 U.S. 17, 25 (2017)
([W]e will not presume... that any result consistent with [a partys] account of the statutes overarching goal must be the law but will presume more modestly instead that the legislature says what it means and means what it says. (cleaned up));
Magwood v. Patterson, 561 U.S. 320, 334 (2010) (We cannot replace the actual text with speculation as to Congress intent.).
In short, the text of the APA and binding Supreme Court precedent show that agencies have considerable discretion over the scheduling requirements for license renewal applications. When, as here, the NRC has given a rational explanation for Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 37 of 55
30 categorizing an application as timely under its own rules, nothing in the APA or the Atomic Energy Act supports overturning that decision in court.
2.
Petitioners have no statutory right to a hearing on a request for a timely renewal exemption.
Petitioners next challenge the legality of the exemption by invoking the Atomic Energy Acts provision for hearings in licensing proceedings. Petrs Br. 30-
- 32. Here too, their argument is wholly unsupported by the statutory text. The statute states, in relevant part, that [i]n any proceeding... for the granting, suspending, revoking, or amending of a license,... the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding, and shall admit any such person as a party to such proceeding. 42 U.S.C.
§ 2239(a)(1)(A). The exemption here fully respects this requirement. The NRCs decision states explicitly that if the agency dockets PG&Es forthcoming application, the NRC will provide an opportunity for the public to seek a hearing and review the application using its normal license renewal review processes and standards to determine whether the application meets all applicable regulatory requirements. 1-ER-7.
Petitioners object that the hearing might not occur before the period of timely renewal. But once again, Petitioners are imagining statutory retirements that do not exist. Nowhere does the Atomic Energy Act state, or even intimate, that an opportunity for a hearing must precede any period of timely renewal protection, Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 38 of 55
31 much less completed before the timely renewal period. Here, too, Petitioners have no basis to rewrite the statutory text. Because the [Atomic Energy Act] itself nowhere describes the content of a hearing or prescribes the manner in which this hearing is to be run, [courts] must defer to the operating procedures adopted by the agency. Nat. Res. Def. Council, 823 F.3d at 652 (citations omitted).
B.
The exemption presents no undue risk to public health and safety.
It was also reasonable for the NRC to determine that the requested exemption presented no undue risk to the public health and safety and would be consistent with the common defense and security. 10 C.F.R. § 50.12(a); 1-ER-5. Petitioners do not even challenge the latter determination, and their challenge to the former is devoid of merit. The NRC explained that the exemption presented no undue risk to public health and safety because the exemption did not change the Diablo Canyon facility or its current operating license. 1-ER-5. And as with any licensee, the NRC would continue to conduct all regulatory activities associated with licensing, inspection, and oversight and continue to take whatever action may be necessary to ensure adequate protection of the public health and safety. Id. The NRC has statutory authority to modify, suspend, or revoke a license in response to a serious safety concern. Id.
For example, the Atomic Energy Act authorizes the NRC to revoke a license because of conditions revealed by... any report, record, or inspection or other Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 39 of 55
32 means which would warrant the Commission to refuse to grant a license on an original application, or for failure to construct or operate a facility in accordance with the terms of the construction permit or license or the technical specifications in the application, or for violation of, or failure to observe any of the terms and provisions of this chapter or of any regulation of the Commission. 42 U.S.C.
§ 2236(a); 10 C.F.R. § 50.100. In support of the reasonable exercise of this authority, NRC regulations empower any person to file a request to institute a proceeding... to modify, suspend, or revoke a license, or for any other action as may be proper. 10 C.F.R. § 2.206(a).
As PG&E and the NRC mutually understand, continuing to operate Diablo Canyon, like any nuclear reactor, requires more than an unexpired license. PG&E must continue to comply with a plethora of legal and regulatory requirements, including the conditions of its existing licenses and written commitments. SER-58.
This compliance is subject to robust NRC oversight, inspection, and possible regulatory action, all to ensure that continued operations do not present an undue risk to public health and safety. Even with the exemption, the NRC continues to actively evaluate matters relating to the plants safety, such as PG&Es implementation of aging-management programs in anticipation of the plants continued operation in the timely renewal period. Id.; see Letter from Brian K.
Harris, NRC, to Paula Gerfen, Senior Vice President & Chief Nuclear Officer, Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 40 of 55
33 PG&E (Feb. 17, 2023), https://adamswebsearch2.nrc.gov/webSearch2/main.jsp?
AccessionNumber=ML23041A186 (requesting information about commitments and activities related to Diablo Canyons aging management programs). This ongoing back-and-forth between the regulated entity and the regulator is standard practice for the NRC when a reactor license is set to enter a period of timely renewal.
See, e.g., Letter from Michele G. Evans, NRC, to Vice President, Entergy Nuclear Operations, Inc. (Aug. 19, 2023), https://adamswebsearch2.nrc.gov/webSearch2/
main.jsp?AccessionNumber=ML13197A034 (requiring Indian Point to implement some, but not all, license renewal commitments before the start of the period of timely renewal).
Granting the exemption did nothing to eliminate the safety oversight that already exists at Diablo Canyon and will continue to exist leading up to and during any period of timely renewal. Moreover, as the exemption decision explained, the NRC believes it will have ample time after a December 2023 application submission to determine if any immediate actions need to be taken prior to the licensee entering the period of timely renewal. 1-ER-5. This situation is unlike a situation where an application for license renewal is being filed for the first time because PG&E previously submitted an application that the NRC staff docketed and reviewed.
Id. Indeed, the NRC staff already issued a thorough final safety evaluation in June 2011 documenting its findings to that point, and so will not be starting at square one Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 41 of 55
34 in its review of the new application but can leverage insights from its partial review of the prior application to conduct a focused, efficient review of the [new]
application. Id.
On top of the federal agency oversight, the state of California has also expressed its commitment to seeing that PG&E operates Diablo Canyon in [a]
manner that is safe for the public and the environment pending review of its license renewal application. Cal. Br. 13. In addition to the NRCs review and oversight, certain state agencies have jurisdiction over various necessary permits, certifications, and approvals. Id. In fact, S.B. 846 itself codifies and reinforces the role of the Independent Safety Committee for Diablo Canyon, and, as Californias amicus brief details, identifies a variety of conditions and requirements for extended operation. Cal. Br. 14-16, 18. As PG&E seeks the required state agency approvals, S.B. 846 provides for public participation so that members of the public can raise concerns they may have about adverse impacts. Cal. Br. 16, 18. Petitioners try to spin the states ability to cancel the loan authorized by S.B. 846 as some equivocation about the desirability of Diablo Canyons continued operation. See Petrs Br. 22, 49. But on the contrary, this provision merely reinforces the states seriousness about ensuring the facilitys ongoing safety. Cal. Br. 19-20.
For all these reasons, Petitioners would not be able to cast doubt on the NRCs no-undue-risk determination even under a de novo standard of review. But the Court Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 42 of 55
35 owes considerable deference to the agencys expert judgments about safe operation of nuclear reactors. See, e.g., Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc.,
462 U.S. 87, 103 (1983) (When examining this kind of scientific determination, as opposed to simple findings of fact, a reviewing court must generally be at its most deferential.). Petitioners certainly cannot override the NRCs determination under the highly deferential standard of review that governs here.
C.
The exemption is justified by special circumstances.
The final requirement for an exemption under 10 C.F.R. § 50.12(a) is that the NRC must determine that special circumstances are present. As the regulations explain, [s]pecial circumstances are present whenever there exists any...
material circumstance not considered when the regulation was adopted for which it would be in the public interest to grant an exemption. Id. § 50.12(a)(2)(vi). Once again, the NRCs determination that this condition is met is perfectly reasonable. As the decision notes, PG&E sought renewal in its 2009 application but withdrew that application based on the determination by the State of California and the California Public Utility Commission that continued baseload operation of the two [Diablo Canyon] units beyond their currently approved operating periods would not be necessary to meet Californias projected energy demand requirements. 1-ER-6.
Since that time, however, Californias projected energy demands have changed, as reflected in the enactment of S.B. 846. Id. The recent efforts by the State of Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 43 of 55
36 California to keep [Diablo Canyon] operating based, in part, on climate change impacts and serious electricity reliability challenges, constitute material circumstances that were not specifically considered when the NRC revised 10 CFR 2.109(b) in 1991. Id.
Petitioners main counterargument is an unsupported assertion that the Legislature assumed that the NRC would complete a license renewal review before the Diablo Canyon operating licenses expire. Petrs Br. 49. S.B. 846 says nothing of the sort. Just the opposite, it compelled PG&E to seek timely renewal protection by ordering it to take all actions necessary and prudent to extend Diablo Canyon powerplant operations. CAL. PUB. RES. CODE § 25548(f). And in this Court, the states amicus brief makes clear that California agrees with the NRC that the
[exemption] Decision is within the agencys discretion and supported by law and warranted by special circumstances. Cal. Br. 3. In particular, California agrees that [t]he NRC reasonably determined that SB 846 reflects the type of special circumstances that justify the Decision. Cal. Br. 4. Given Californias reliability challenges over the past few years as it seeks to transition away from carbon-based electricity, the circumstances that gave rise to SB 846 are compelling, and demonstrate that the Decision is in the public interest. Cal. Br. 13.
Petitioners try to second-guess S.B. 846s determination that Diablo Canyon is an important part of ensuring the reliability of the California grid throughout the Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 44 of 55
37 current decade. Petrs Br. 50-51. But they ignore the California Energy Commissions March 2023 analysis and report, which arose out of S.B. 846s requirements and a public process, and determined that significant grid reliability risks persist through 2030 under increased demand conditions, including extreme heat that led to rotating outages in August 2020, which exceed earlier forecasts. Cal.
Energy Commn, Diablo Canyon Power Plant ExtensionCEC Analysis of Need to Support Reliability, at 3
(Mar.
2, 2023),
https://efiling.energy.ca.gov/
GetDocument.aspx?tn=249030&DocumentContentId=83587; see also Cal. Br. 11-
- 12.
Finally, Petitioners try to undermine S.B. 846 by calling it a hastily passed urgency statute. Petrs Br. 10, 22. This argument merely proves the NRCs point.
Under California law, an urgency statute reflects the Legislatures ability to agree, by supermajority, that the statute is necessary for the preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and should therefore go into immediate effect. S.B. 846, § 18 (2-ER-270); see CAL. CONST. art. IV, § 8(d). This feature of S.B. 846 only confirms the Legislatures firm belief that maintaining Diablo Canyons operations through the end of the decade is necessary for Californias public interests.4 4 Petitioners note that S.B. 846 is, by its terms, limited to five additional years operation. See Petrs Br. 51. While current state law imposes that limit, federal law, as California notes, permits PG&E to apply for the standard license renewal Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 45 of 55
38 D.
The exemption falls within the NRCs categorical NEPA exclusions.
Petitioners argue that the exemption violates NEPA by allowing PG&E to operate past the 40-year statutory term without completing an environmental review.
Petrs Br. 33-37. But the exemption does not eliminate any environmental review; it merely treats a license renewal application submitted by December 31, 2023 as timely. Submitting that application, in turn, will entail a full environmental review, including the preparation of an environmental impact statement in accordance with 10 C.F.R. Part 51. And before the renewal is granted, the NRC will complete its full normal license renewal review processes and standards, with the publics participation. 1-ER-7.
Petitioners real argument, then, is that an environmental impact statement should be a prerequisite for timely renewal protection, including an exemption that makes timely renewal protection likely. But they offer no support for this argument.
Since the NRC adopted the categorical exclusion of 10 C.F.R. § 51.22(c)(25) in 2010, see 2-ER-89, the NRC has repeatedly affirmed that timely renewal exemptions fall within that exclusion. See, e.g., 2-ER-212-14 (Clinton Power Station, Unit 1);
period of 20 years. Cal. Br. 13 n.36. PG&E has long planned to submit an application justifying the full 20-year renewal period in accordance with standard industry and NRC precedent, rather than a shorter period, even though Diablo Canyons actual operating duration will be constrained by state limitations. 3-ER-436. Seeking the longer term, however, gives California maximum flexibility to ensure adequate electrical resources in the coming years. Id.
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39 2-ER-220, 2-ER-222-23 (Perry Nuclear Power Plant Unit No. 1); 2-ER-227 (Nine Mile Point Nuclear Station, Unit 1); 2-ER-230-31 (Ginna Nuclear Power Plant); 2-ER-238-39 (Dresden Nuclear Power Station, Units 2 and 3). It is incongruous for Petitioners to cite these examples as supposedly setting a timetable for timely renewal exemptions, Petrs Br. 39 n.9, yet ignore their support for the NRCs application of the categorical exclusion.
Application of a categorical exclusion is not an exemption from NEPA; rather, it is a form of NEPA compliance, albeit one that requires less than where an environmental impact statement or an environmental assessment is necessary. Ctr.
for Biological Diversity v. Salazar, 706 F.3d 1085, 1096 (9th Cir. 2013). Petitioners cite cases in which courts have required environmental impact statements for various agency actions. Petrs Br. 34. But it is well settled that where a proposed action fits within a categorical exclusion, full NEPA analysis is not required. Ctr. for Biological Diversity, 706 F.3d at 1097.
An agencys decision to invoke a categorical exclusion to avoid an
[environmental impact statement] or [environmental assessment] is not arbitrary and capricious if the agency reasonably determined that a particular activity is encompassed within the scope of a categorical exclusion. Mountain Cmtys. for Fire Safety v. Elliott, 25 F.4th 667, 680 (9th Cir. 2022) (citation omitted). The NRCs oft-repeated decision to treat timely renewal exemptions as within 10 C.F.R.
Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 47 of 55
40
§ 51.22(c)(25) is a reasonable application of the NRCs regulation. See 1-ER-6-7 (applying the six requirements of 10 C.F.R. § 51.22(c)(25)(i)-(vi)). Petitioners make no meaningful argument that the NRC misapplied the regulatory requirements it identified. See, e.g., Safari Club Intl v. Haaland, 31 F.4th 1157, 1179 (9th Cir.
2022) (In many instances, a brief statement that a categorical exclusion is being invoked will suffice to comply with NEPA. (citation and brackets omitted)). Nor was the NRC starting with a blank slate; it has nearly forty years of experience and data about Diablo Canyons environmental impacts, plus decades of environmental analyses from other license renewal applications.
Rather than challenge NRCs application of its categorical exclusion under the applicable abuse-of-discretion standard, Petitioners assert three reasons why, in its view, the NRCs reasoning is erroneous. Petrs Br. 35. First, they observe, again, that the exemption permits a timely renewal period allowing operation beyond the statutory expiration date. Petrs Br. 36. But that is true, again, for any timely renewal period for a commercial reactor. Next, Petitioners highlight the NRCs justification for undertaking a formal safety review of age-related degradation as a prerequisite for license renewal. Id.; see 2-ER-33. But this formal review seeks to ensure the safety of a license renewal for twenty additional years; it does not suggest that a formal review is a prerequisite for timely renewal protection while the NRC is actively evaluating an application. See id. Lastly, Petitioners analyze a timely Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 48 of 55
41 renewal exemption in light of the regulatory history of 10 C.F.R. § 51.22(c)(25),
which is how Petitioners describe certain examples mentioned in the preamble to the NRCs 2010 regulation. Petrs Br. 36-37. But these examples are illustrative, not exhaustive. See 2-ER-77. And in any event, a preamble does not displace or override the text of the actual regulation. See, e.g., Alpha Venture Cap. Partners LP
- v. Pourhassan, 30 F.4th 920, 927 (9th Cir. 2022) ([T]he preamble does not impose a duty above and beyond the actual terms of the regulation. (citation omitted)).
Here, the applicable regulatory text, as reasonably construed by the NRC consistent with its past practice, supports application of a categorical exclusion.
E.
Petitioners assortment of arbitrary-and-capricious arguments are unpersuasive.
Petitioners last-ditch attack on the exemption asserts that it is arbitrary and capricious in a variety of respects. Petrs Br. 37-48. This grab-bag of criticisms does nothing to establish a violation of the APAs reasoned decisionmaking requirement. It merely rehashes Petitioners assorted reasons for opposing the exemption. In other words, Petitioners ask the Court to substitute its judgment for that of the agency, which the Court cannot lawfully do. State Farm, 463 U.S. at
- 43.
Even on their own terms, these criticisms fail and mischaracterize the NRCs actions. For instance, Petitioners argue that the exemption decision impermissibly revokes the timely renewal rule, 10 C.F.R. § 2.109(b), without notice-and-comment Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 49 of 55
42 rulemaking. Petrs. Br. 43. That is simply untrue. The decision finds that other NRC regulations, 10 C.F.R. § 54.15 and 10 C.F.R. § 50.12 (which themselves underwent notice-and-comment rulemaking), justify an exemption to the timely renewal rules usual schedule. By its terms, the decision grants one one-time exemption to one licensee based on unique and special circumstances. 1-ER-5. The decision does not eradicate the timely renewal rules usual force.
Petitioners arguments disregard the unique and special circumstances even though the NRC cited them as reasons for the exemption. Petitioners act as though the NRCs decision cannot stand merely because PG&E requested leave to file its application later than past licensees seeking an exemption. See Petrs Br. 40. But the timing was necessitated by the timing of S.B. 846, not delay on PG&Es part.
Indeed, PG&E had earlier submitted an undisputedly timely and sufficient application well within the standard timeframe for timely renewal protection. The NRC relied heavily on this factin part because it confirmed the NRCs ability to perform a more focused, efficient review of the new application than is normally possible. 1-ER-5. But Petitioners give no weight to this fact in their arbitrary-and-capricious arguments.
Petitioners cannot show that the NRC impermissibly applied its exemption regulation or categorical exclusion. And various criticisms of the NRCs exemption Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 50 of 55
43 decision fall far below the showing needed to establish that the NRCs action was arbitrary and capricious. The Court should deny their Petition for Review in its entirety.
II.
Vacating the exemption would be an improper remedy in any event.
Were the Court to find some flaw in the exemption decision, the Federal Respondents persuasively explain why the appropriate remedy should be remand without vacatur. NRC Br. 59-62. Other than Petitioners broadside attack on any timely renewal protection for commercial operating licenses, they allege no problems that could not be remedied by further reasoning on remand. Regardless of whether vacatur would have disruptive consequences, vacatur is not warranted so long as the agencys error is not serious and could be cured by explaining the same outcome through better reasoning. Natl Fam. Farm Coal. v. EPA, 966 F.3d 893, 929-30 (9th Cir. 2020).
Here, however, vacatur would be incredibly disruptive. Californias political branches have made clear that the expeditious relicensing of Diablo Canyon is necessary to ensuring electrical reliability in the California electrical system. S.B.
846, § 18 (2-ER-270). Diablo Canyon reliably supplies nearly 9% of Californias annual electricity generation, and California has experienced increasing electrical demand and strain on the reliability of its grid in recent years. CAL. PUB. RES. CODE
§ 25548(a). That is exactly why it directed PG&E, and Californias own agencies, Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 51 of 55
44 to take all actions necessary and prudent to extend Diablo Canyon powerplant operations. Id. § 25548(f).
But Petitioners objective in this litigation is to ensure that this significant source of much-needed reliable and zero-carbon electricity stops operations rather than enter a period of timely renewal. In seeking expedited consideration of their Petition for Review, Petitioners assertedalthough they have provided no evidence in support of their assertionthat irreparable harm will occur if the Diablo Canyon units continue operating past their existing license expiration dates.
Petitioners Unopposed Motion to Expedite Oral Argument (ECF No. 15.1) at 2-3.
Of course, whether these consequential electricity-generating resources should immediately go offline on November 2, 2024 and August 26, 2025 is a decision with enormous consequences to the residents of California. And their elected representatives have already made clear that the plants continued operation past those dates is in the best interests of all California electricity customers. CAL.
PUB. RES. CODE § 25548(b).
Beyond the immediate harms that would come from taking this important resource offline, such a ruling would also create significant longer-term risks.
Stopping and starting a nuclear reactor is not as simple as flipping a switch. That is partly why decommissioning efforts take years of planning. Here, there is no guarantee that the state of California or economic factors would ever permit Diablo Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 52 of 55
45 Canyon to restart if it is forced to shut down on the current license expiration dates, for an indefinite period, as a result of an order from this Court. In addition to the physical challenges inherent in stopping and starting nuclear reactors, an extended shutdown would have a devastating impact on PG&Es employees and create the risk they might seek work elsewhere, leaving Diablo Canyon without a well-trained workforce and viable path to resume operations.
Timely renewal protection exists to avoid just this problem. It seeks to protect a person with a license from the damage he would suffer by being compelled to discontinue a business of a continuing nature, only to start it anew after the administrative hearing is concluded. Pan-Atl. S.S., 353 U.S. at 439. And here, more than most cases, timely renewal protection also protects the broader public from the damage they would suffer if a vital electrical resource were forced to shut down. The Court should reject Petitioners request to override the NRCs reasonable and lawful decision to afford timely renewal protection in this unique case.
CONCLUSION For all these reasons, the Court should either dismiss the Petition for lack of jurisdiction or deny the Petition on the merits.
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46 Dated: September 28, 2023 Respectfully submitted, s/ Michael E. Kenneally PAUL M. BESSETTE MICHAEL E. KENNEALLY RYAN K. LIGHTY MORGAN, LEWIS & BOCKIUS LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004 (202) 739-3000 Counsel for Intervenor Pacific Gas and Electric Company Case: 23-852, 09/28/2023, DktEntry: 34.1, Page 54 of 55
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