ML23293A044

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10-20-23 Petitioners Reply Brief
ML23293A044
Person / Time
Site: Diablo Canyon  Pacific Gas & Electric icon.png
Issue date: 10/19/2023
From: Ayres R, Curran D, Leary C
Environmental Working Group, Friends of the Earth, Harmon, Curran, Harmon, Curran, Spielberg & Eisenberg, LLP, San Luis Obispo Mothers for Peace
To:
NRC/OGC, US Federal Judiciary, Court of Appeals, 9th Circuit
References
23-852 DktEntry: 37.1
Download: ML23293A044 (1)
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Text

Case No.23-852 UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT SAN LUIS OBISPO MOTHERS FOR PEACE, FRIENDS OF THE EARTH, AND ENVIRONMENTAL WORKING GROUP Petitioners,

v.

UNITED STATES NUCLEAR REGULATORY COMMISSION AND THE UNITED STATES OF AMERICA, Respondents, and PACIFIC GAS & ELECTRIC COMPANY, Intervenor.

On Appeal from the Nuclear Regulatory Commissions Final Agency Decision PETITONERS REPLY BRIEF October 19, 2023 Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 1 of 36

Diane Curran Harmon, Curran, Spielberg, & Eisenberg, L.L.P.

1725 DeSales Street N.W., Suite 500 Washington, D.C. 20036 240-393-9285 dcurran@harmoncurran.com Counsel to Petitioner San Luis Obispo Mothers for Peace Richard Ayres 2923 Foxhall Road, N.W.

Washington, D.C. 20016 202-744-6930 ayresr@ayreslawgroup.com Counsel to Petitioner Friends of the Earth Caroline Leary Environmental Working Group 1250 I St N.W.

Washington, DC 20005 202-667-6982 cleary@ewg.org Counsel to Petitioner Environmental Working Group Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 2 of 36

i TABLE OF CONTENTS TABLE OF AUTHORITIES.iii ARGUMENT..1 I. THE COURT HAS JURISDICTION OVER PETITIONERS APPEAL.....1 A. The Court Has Subject Matter Jurisdiction Under the Hobbs Act Because the Exemption is Preliminary to or a de facto Substitute for Diablo Canyons License Renewal Proceeding.1

1. The Exemption Decision is preliminary to a proceeding for ex parte imposition of renewal-related license amendments in a period of timely renewal.....2
2. NRCs proceeding to amend the Diablo Canyon operating licenses for the period of timely renewal creates a de facto substitute for a license renewal proceeding.4 B. The Court Has Subject Matter Jurisdiction Under the Hobbs Act Because the Exemption is a Proceeding for the Modification of a Regulation6 C. Petitioners Have Article III Standing...7
1. NRCs harm to Petitioners is likely, if not certain....7
2. Petitioners assertion of physical harm from continued unlawful operation of the Diablo Canyon reactors is credible....10 II. THE EXEMPTION DECISION IS UNAUTHORIZED BY LAW AND POSES AN UNDUE RISK TO PUBLIC HEALTH AND SAFETY...13 Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 3 of 36

ii A. The NRC Fails to Demonstrate That it Has Harmonized the APA and the AEA...... 13 B. Respondents Fail to Demonstrate that the Exemption Decision is Based on a Review of All Relevant Factors or Constitutes a Lawful Exercise of Discretion17

1. NRC failed to consider all relevant factors.17
2. NRCs application of its discretion evades statutory mandates..19 C. The Court Should Not Reach the Issue of Special Circumstances21 D. The Exemption Decision Violates NEPA..22 III. VACATUR IS THE PROPER REMEDY..... 24 IV. CONCLUSION..25 CERTIFICATE OF COMPLIANCE.27 Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 4 of 36

iii TABLE OF AUTHORITIES Cases Bellotti v. NRC, 725 F.2d 1380 (D.C. Cir. 1983)....3 Brodsky v. NRC, 578 F.3d 175 (2d Cir. 2009)....1 Ctr. For Food Safety v. Reagan, 56 F.4th 648 (9th Cir. 2022).25 Fla. Power & Light Co. v. Lorion, 470 U.S. 729 (1985)1, 6 Gen. Atomics v. NRC, 75 F.3d 536, 539 (9th Cir. 1996).....1, 3 Idaho Conservation League v. Mumma, 956 F.2d 1508 (9th Cir. 1992)9 Munns v. Kerry, 782 F.3d 402 (9th Cir. 2015).....10 Natl Fam. Farm Coal. v. EPA, 966 F. 3d 893 (9th Cir. 2020).......25 Nat. Res. Def. Council v. EPA, 859 F.2d 156 (D.C. Cir. 1988)........2, 13-14, 16 Nat. Res. Def. Council v. EPA, 735 F.3d 873 (9th Cir. 2013)......9, 10 13 Pacific Gas & Electric Co. v. State Energy Commn, 461 U.S. 190 (1983)............................................................................................22 Pan-Atlantic Steamship Corp. v. Atlantic Coast Line R.R Co.,

353 U.S. 436 (1957).13-14 Phillips v. U.S. Customs and Border Protection, 74 F.4th 986 (9th Cir. 2023)....7, 9 Pub. Util. Commr v. Bonneville Power Admin., 767 F.2d 622 (9th Cir. 1985).....5 Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 5 of 36

iv Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989)....24 San Luis Obispo Mothers for Peace v. NRC, 449 F.3d 1030 (9th Cir. 2006).......24 South Carolina v. United States, 912 F.3d 720 (4th Cir. 2019).........11 Telecommunications Rsch. & Action Ctr. v. FCC, 750 F.2d 70 (D.C. Cir. 1984)..... 5 Union of Concerned Scientists v. NRC, 824 F.2d 108 (D.C. Cir. 1987)....19, 21 United States v. Allegheny-Ludlum Steel Corp.,

406 U.S. 742 (1972)......20 Statutes Administrative Procedure Act, 5 U.S.C. § 558(c)..13, 15, 16, 17, 18, 19, 25 Atomic Energy Act........4, 13-17, 18, 19, 25 42 U.S.C. § 2232. 15, 16 42 U.S.C. § 2239.............1, 6, 16 Hobbs Act....1, 5 National Environmental Policy Act..9, 10, 15, 22, 23, 24 10 C.F.R. § 51.25(c)(25)(v)24 California Public Resources Code Cal. Pub. Res. Code § 25548....7 Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 6 of 36

v Regulations Reactor Timely Renewal Rule, 10 C.F.R. § 2.109(b)...16, 17, 18, 19, 22 10 C.F.R. § 50.12(a)....20, 22 10 C.F.R. § 51.22(c)(25)(i)-(v).23 NRC Orders AmerGen Energy Company, LLC, 69 N.R.C. 235 (2009).....16 Calvert Cliffs 3 Nuclear Project, L.L.C. and Unistar Nuclear Operating Services, L.L.C., 70 N.R.C. 911 (2009).......10 Oklo Power, L.L.C., 92 N.R.C. 521 (2020).....8 Sequoyah Fuels Corp. and General Atomics, 40 N.R.C. 64 (1994)....3 Virginia Elec. & Power Co., 9 N.R.C. 54 (1979).11 Federal Register Notices Nuclear Power Plan License Renewal, 56 Fed. Reg. 64,943 (Dec. 13, 1991)....8, 11, 15-16, 17, 18, 19, 20, 21, 23, 24 Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 7 of 36

1 I.

THE COURT HAS JURISDICTION OVER PETITIONERS APPEAL.

A. The Court Has Subject Matter Jurisdiction Under the Hobbs Act Because the Exemption is Preliminary to or a de facto Substitute for Diablo Canyons License Renewal Proceeding.

The U.S. Nuclear Regulatory Commission (NRC) and Department of Justice (DOJ) (hereinafter referred to as Respondents) and Pacific Gas and Electric Co. (PG&E) argue that this Court lacks jurisdiction over Petitioners appeal because exemptions are not among the NRC actions explicitly listed in 42 U.S.C. § 2239(a) as conferring jurisdiction in this Court, i.e., the issuance, amendment or revocation of a license. Resp. Br. at 25 (citing Brodsky v. NRC, 578 F.3d 175, 177, 180-82 (2d Cir. 2009)); PG&E Br. at 3-4. Yet, Respondents concede that jurisdiction pursuant to the Hobbs Act is to be construed broadly to encompass not only all final NRC actions in licensing proceedings, but also all decisions that are preliminary, ancillary, or incidental to those licensing proceedings. Resp. Br. at 23 (citing Gen. Atomics v. NRC, 75 F.3d 536, 539 (9th Cir. 1996); and Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 737 (1985)

(Lorion)). Contrary to their arguments, Petitioners met their burden to establish jurisdiction in this Court because the case satisfies the test for an action that is preliminary to Diablo Canyon reactors re-licensing. Indeed, it amounts to a de facto substitute for such a proceeding.

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2

1. The Exemption Decision is preliminary to a proceeding for ex parte imposition of renewal-related license amendments in a period of timely renewal.

Respondents contend that the Exemption does not renew, extend or amend PG&Es license because the current operating licenses will continue in effect by operation of law if PG&E submits a timely license renewal application. Id. at 27 (citing Nat. Res. Def. Council v. EPA, 859 F.2d 156, 214 (D.C. Cir. 1988) (NRDC I)). But Respondents own brief demonstrates that the Exemption Decision does more than trigger an automatic continuation of the Diablo Canyon operating licenses under the timely renewal doctrine: the Exemption Decision creates a period of timely renewal that lies in between the existing license term and the commencement of a license renewal term. Id. at 49.

According to Respondents, during the periods between the submittal of PG&Es license renewal application and the expiration of the current license terms (eleven months for Unit 1 and twenty months for Unit 2), the NRC would review PG&Es license renewal application and determine if any immediate actions need to be taken prior to the licensee entering the period of timely renewal. Id. (quoting Notice of Exemption Issuance, 1-ER-5).1 In that event, to add new requirements 1 PG&E notes that the process of discerning what license renewal-related requirements should be imposed to protect public health and safety during the period of timely renewal would be aided by the fact that PG&E previously submitted an application that the NRC staff docketed and reviewed. PG&E Br. at 33 (quoting Notice of Exemption Issuance, 1-ER-5).

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3 not present in the existing Diablo Canyon licenses the NRC must modify or amend the license. See, e.g., Bellotti v. NRC, 725 F.2d 1380, 1383 (D.C. Cir. 1983). Such modifications or amendments would be ex parte, in the sense that only PG&E could challenge them. See id. (holding that the NRC may deny members of the public a hearing on the adequacy of measures ordered by NRC to improve safety of a nuclear reactor).2 By establishing the framework for an interim proceeding between the submission of PG&Es license renewal application and the expiration dates of the Diablo Canyon operating licenses - during which the NRC will review PG&Es license renewal application to determine whether any license renewal-related requirements should be imposed ex parte through license amendment - the Exemption Decision is preliminary to a proceeding to amend PG&Es operating license to protect public health and safety against the unique safety hazards posed by the Diablo Canyon reactors aging forty year-old equipment.

2 Gen. Atomics illustrates the point. In that case, General Atomics challenged an enforcement proceeding holding the company liable for the costs of decommissioning an Oklahoma uranium processing facility operated by a subsidiary. 75 F.3d at 537-38. In response, the NRC appointed a Licensing Board to determine whether General Atomics was a de facto licensee, thereby directly involv[ing] the granting and possible amending of the license for the Oklahoma facility. Id. at 539. The NRC Commissioners permitted a citizen group to intervene in the Licensing Board proceeding, but only for the purpose of supporting General Atomics liability. Sequoyah Fuels Corp. and General Atomics, 40 N.R.C. 64, 70-71 (1994). The citizen group was not permitted to seek additional relief. Id.

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4 Accordingly, this Court has jurisdiction to review the Exemption Decision and find that during the [unlimited] period of timely renewal, the proceeding will (1) not comply with statutory and regulatory requirements for a thorough review of the adequacy of a PG&E license renewal application to address the unique safety and environmental risks posed by continuing to operate the Diablo Canyon units after their forty-year licenses expire, and (2) not provide the opportunity for a hearing on the adequacy of measures to protect public health and safety and the environment as required by the Atomic Energy Act (AEA).

2. NRCs proceeding to amend the Diablo Canyon operating licenses for the period of timely renewal creates a de facto substitute for a license renewal proceeding.

The period of timely renewal has three key features that establish it as a de facto license renewal proceeding that is unlikely to be replaced by a formal license renewal review and adjudicatory hearing. First, the term of extended operation in the period of timely renewal is unlimited, and therefore the NRC is not under any pressure to conduct or complete a formal proceeding for re-licensing the reactors.3 1-ER-005. Second, the NRC says it plans to protect any immediate 3 While the Respondents repeatedly assert that the Exemption Decision gives PG&E a time-limited window to submit a license renewal application and thereby receive timely renewal protection (Resp. Br. at 3 4, 27, 40), the only step that is time-limited is PG&Es deadline for submitting an application. 1-ER-5.

Once the NRC determines the application is complete under its relaxed and discretionary standard, there is no limit on the duration of time in which PG&E Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 11 of 36

5 public health and safety concerns related to increased or different risks of operating past forty years with aging safety equipment. Id. Thus, the NRC has established an ad hoc means for upgrading the license to address age-related risks without a comprehensive license renewal review. Finally, new requirements would be imposed by license amendment or by negotiating such changes with PG&E -- but the public would have no opportunity to challenge the adequacy of the new requirements.

Given the advantages of such a summary procedure for the NRC and the licensee, there is no reason to think that this process will be supplanted any time in the near future with the formal license renewal proceeding and hearing opportunity required by the AEA. Therefore, the NRCs actions during the period of timely renewal must be taken as the only license renewal review that will be completed.

Because the Exemption Decision creates the framework for that proceeding, it is reviewable by this Court. See Pub. Util. Commr v. Bonneville Power Admin., 767 F.2d 622, 624 (9th Cir. 1985) (finding that where a statute commits review of final agency action to the court of appeals, any suit seeking relief that might affect the court's future jurisdiction is subject to its exclusive review (citing may continue to operate the Diablo Canyon reactors past their license expiration dates.

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6 Telecommunications Rsch. & Action Ctr. v. FCC, 750 F.2d 70, 78 (D.C. Cir.

1984)).

B. The Court Has Subject Matter Jurisdiction Under the Hobbs Act Because the Exemption is a Proceeding for the Modification of a Regulation.

This Court also has jurisdiction over the NRCs unlawful revocation of the NRCs Timely Renewal Rule without notice or opportunity for comment, or the reasoned analysis required for rulemaking. See Pet. Br. at 43-45. NRC rulemaking decisions are made reviewable in the U.S. Court of Appeals by 42 U.S.C. § 2239(a)(1)(A). This includes, among reviewable NRC actions, any proceeding for the issuance or modification of rules and regulations dealing with the activities of licensees. Id.

While the NRC characterizes an exemption as a unique tool in its regulatory toolkit for excusing a licensee from a rule of general applicability, Resp. Br. at 28, the NRC used the Diablo Canyon Exemption Decision to effectively rewrite the Reactor Timely Renewal Rule for reactors across the board.

See Pet. Br. at 43-45. To assign the district court jurisdiction over the Diablo Canyon-specific aspects of Petitioners challenge to Exemption Decision while retaining jurisdiction over the related issues in an appeal of the NRCs rulemaking action would create the same problems of duplication and bifurcation the Supreme Court sought to avoid in Lorion. See 470 U.S. at 743.

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7 C. Petitioners Have Article III Standing.

1. NRCs Harm to Petitioners is likely, if not certain.

Respondents argue that the case is not ripe and Petitioners lack Article III standing because they have not demonstrated harm that is certainly impending or a substantial risk that the harm will occur. Resp. Br. at 30 (citing Phillips v. U.S.

Customs & Border Prot., 74 F.4th 986, 991 (9th Cir. 2023)). They contend:

Any future operation of the [Diablo Canyon] reactors beyond their respective expiration dates in November 2024 and August 2025 is still contingent on the occurrence of two events that have not yet occurred -

PG&E submitting an application by the end of the calendar year, and the NRC accepting that application as sufficient for docketing.

Resp. Br. at 31.

However, the record demonstrates that both events are extremely likely, if not certain to occur, establishing both standing and ripeness for this appeal. The first event - submittal of PG&Es license renewal application - is almost certain to occur because, as Respondents say, it as a requirement of state law. See Resp. Br.

at 1 (stating that PG&E was directed by the State to again resume license renewal); Resp. Br. at 52 (stating that legislation passed by the State specifically directs PG&E as the plants operator to take all actions that would be necessary to operate the powerplant beyond the current expiration dates (citing 2-ER-261)).4 4 PG&E is in accord. See PG&E Br. at 2 (citing Cal. Pub. Res. Code § 25548(a)-(b) as direct[ing] PG&E, as Diablo Canyons operator, to act quickly and in coordination with state agencies to take all actions necessary and prudent to Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 14 of 36

8 PG&E itself requested the deadline of December 2023 to submit a license renewal application, PG&E Br. at 16, and has given no indication that it will not submit an application.

The occurrence of the second event an NRC finding that PG&Es license application is complete is also extremely likely if not certain for two reasons.

First, the NRCs requirements for completeness of a license renewal application are minimal. As stated in the preamble to the 1991 License Renewal Rule:

It is enough that the licensee submits the requested reports, analyses, and other documents required in such application. That such documents may require further supplementation or review is of no consequence to continued operation under timely renewal.

Nuclear Power Plant License Renewal, 56 Fed. Reg. 64,943, 64,963 (Dec. 13, 1991), 2-ER-010, 2-ER-050. See also Oklo Power, L.L.C., 92 N.R.C. 521, 525 (2020) (explaining that a determination of completeness is simply a screening process - a determination of whether the license application contains sufficient information for the staff to begin its safety review). Having already submitted and then withdrawn a license renewal application, PG&E could easily satisfy the extend Diablo Canyon powerplant operations); PG&E Br. at 2 (citing the same provisions as instructions to PG&E by the California legislature); PG&E Br. at 13 (citing Cal. Pub. Res. Code § 25548(f) for the proposition that the legislature had directed PG&E to seek renewal of the Diablo Canyon operating licenses).

The California Attorney General similarly states that a change in state policy made it necessary for PG&E to restart the process of applying for renewals of the licenses for its nuclear reactors from the NRC. CA Amicus Br. at 1-2.

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9 NRCs minimal completeness requirement by re-submitting it and promising to supplement the application later.

Second, not only is the NRCs standard for completeness of an application minimal, but the completeness determination is committed to the NRCs discretion and would not be litigable. 56 Fed. Reg. at 64,963, 2-ER-050. See also Oklo, 92 N.R.C. at 524-25. Here, the Commissioners have made clear their intention that for any aspect of the Diablo Canyon decision-making process that involves an exercise of NRCs discretion, the public interest favors allowing the continued operation of Diablo Canyon. Indeed, since receiving PG&Es request for an exemption, the NRC has been aligned with PG&E in responding to changing circumstances of significant public interest beyond their control. Resp. Br. at 4.

Under the circumstances, it is reasonable to predict that the NRC will almost certainly exercise its discretion to accept PG&Es license renewal application as complete. See Phillips, 74 F.4th at 991 (stating that to seek relief for a possible future injury, that injury must be certainly impending). In fact, harm to Petitioners is nearly impossible to avoid. See Nat. Res. Def. Council v. EPA, 735 F.3d 873, 878 (9th Cir. 2013) (NRDC II) (finding a credible threat to the appellants children where the expansive scope of the U.S. Environmental Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 16 of 36

10 Protecrtion Agencys (EPAs) application of a government-authorized pesticide would make it nearly impossible to avoid exposure).5 Further, as this Court has recognized, Petitioners have standing under the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321 et. seq., to seek redress for injuries to their procedural rights to an environmental impact analysis of the NRCs Exemption Decision. See Idaho Conservation League v. Mumma, 956 F.2d 1508, 1516 (9th Cir. 1992). As discussed in Section II.D, the Exemption Decision violates NEPA by excusing NRC from performing an analysis of the environmental impacts of operating the Diablo Canyon reactors past their forty-year operating limits.

2. Petitioners assertion of physical harm from continued unlawful operation of the Diablo Canyon reactors is credible.

The NRC has long held that persons living within approximately fifty miles of a nuclear reactor face a realistic threat of harm if a radiological release from 5 Unlike Munns v. Kerry,782 F.3d 402, 409-10 (9th Cir. 2015), cited in Resp. Br. at 33, this case presents no highly attenuated chain of possibilities and contingent future events that must occur before Petitioners suffer a contingent injury. There, this Court denied standing to an individual who sought to challenge a policy for contractors in Iraq where (a) the policy was no longer in effect, (b) the individual had not been hired by the contractor and sent to Iraq, and (c) the contractor had not subjected the individual to the type of care that was likely to result in his kidnap.

Here, in contrast, the record shows a near certainty that Diablo Canyon will continue operating past its 40-year operating license term, thereby causing concrete injury to Petitioners.

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11 the facility were to occur. Calvert Cliffs 3 Nuclear Project, L.L.C. and Unistar Nuclear Operating Services, L.L.C., 70 N.R.C. 911, 917 (2009); see also Virginia Elec. & Power Co., 9 N.R.C. 54, 56 (1979).

Here, Petitioners have standing under the NRCs well-established test because they have provided the declarations of members who reside within fifty miles of the Diablo Canyon reactors and have stated their concern that they would be harmed if a radiological accident were to occur because of Diablo Canyons continued operation past the reactors operating license expiration dates. 3-ER-482-92. If Petitioners prevail and the Exemption Decision is vacated, the reactors will not be allowed to operate past their license expiration dates. Therefore, Petitioners will no longer face the credible threat of a reactor accident. NRDC II, 735 F.3d at 878 (finding of standing supported by the fact that [a]bsent the EPAs authorization [of pesticide AGS-20], there is roughly no chance that the children of [appellants] members will be exposed to AGS-20.).6 6 Respondents cite South Carolina v. United States, 912 F.3d 720, 727 (4th Cir.

2019) for the proposition that probabilistic assertions of harm - that there could be a future natural disaster, or there could be an operational accident at the facility

- are speculative and hardly imminent for purposes of standing. As Respondents concede, the question in that case was whether the State of South Carolina had standing to oppose the termination of construction of a nuclear facility, not its operation. The court did nothing to undermine the principle established by the NRC decisions that the probabilistic risk of an accident from an operating nuclear reactor is realistic and therefore sufficient to support standing.

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12 Respondents argue that the Exemption Decision causes no credible threat to Petitioners because it will not change the way the plant is operating or the current operating license. Resp. Br. at 33. They miss the fact, demonstrated by the 1991 License Renewal rule, that the credible threat will arise from that very same lack of change in PG&Es operation and operating license to address the safety and environmental risks of operating the reactors with aging equipment past forty years. In that rulemaking, the NRC acknowledged that age-related degradation of plant systems, structures and components during operation of a nuclear reactor past forty years is unique to the license renewal term and critical to safety. 1-ER-033. Therefore, it must be evaluated before a renewed license is issued.

Id.; see also Pet. Br. at 41. Therefore, if the license renewal review and hearing for the Diablo Canyon is delayed beyond the expiration date of the licenses and the reactors continue operating without the required reviews and hearing and without the comprehensive safety upgrades that result from the review process, the reactors operation will pose a new and significant safety risk that was not posed during the first forty years of operation and is not addressed by the terms of the current operating license. This is not just Petitioners independent concern, but the conclusion the NRC itself reached in the 1991 License Renewal Rule.

For these reasons, Petitioners have established the constitutional minimums for standing in this case and the issues are ripe for this Courts review.

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13 II.

THE EXEMPTION DECISION IS UNAUTHORIZED BY LAW AND POSES AN UNDUE RISK TO PUBLIC HEALTH AND SAFETY.

A. The NRC Fails to Demonstrate That it Has Harmonized the APA and the AEA.

Respondents acknowledge that the Administrative Procedure Acts (APAs) timely renewal doctrine and the AEAs forty-year limit on reactor operating license terms must together be given a harmonious reading. Resp. Br.

at 37 (quoting Pan-Atlantic Steamship Corp. v. Atlantic Coast Line R.R. Co., 353 U.S. 436, 439-40 (1957)). They would have the Court find, as the Supreme Court found in Pan-Atlantic, that harmony was achieved when the general APA provision supplement[ed] the specific agency statute. Id. (quoting 353 U.S. at 440). Following Pan-Atlantic, the D.C. Circuit reached a similar conclusion in finding that the agencys lack of independent statutory power to extend the permit is over-balanced by [APA] Section 558(c). NRDC I, 859 F.2d at 214. In each case, because Section 558(c) overrode the term limit in the agencys organic statute, the original license continued in effect by operation of law. Id.

However, Respondents overlook a key difference between the regulatory agencies legal framework in Pan-Atlantic and NRDC I and the NRCs legal framework in this case. In Pan-Atlantic and NRDC I, each agency had a statutory requirement to strengthen the rigor of the permit terms upon renewal, but the Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 20 of 36

14 upgrades were related to improvements or changes in the regulatory scheme. They did not relate to the nature of the regulated activity, which remained unchanged.

In Pan-Atlantic, the Supreme Court permitted a less rigorous temporary license issued ex parte by the Interstate Commerce Commission (ICC) on an emergency basis to continue in effect past its 180-day term limit, even though the ICCs organic statute required that licensees operating after that term limit must have a permanent certificate of convenience that could be challenged by the licensees competitors. 353 U.S. at 438. In NRDC I, the court allowed an initial EPA discharge permit to continue past its five-year term limit with equipment designed to meet a best practicable technology standard, even though the Clean Water Act required that permittees who sought renewal after the five-year term limit must implement a drastically more rigorous best available technology standard. 859 F.2d at 213.

In neither case did the regulated activity change after the license expiration date: the licensee in Pan Atlantic continued to ship goods as before, and the permittee in NRDC I continued to discharge the same amount and type of pollutants as before.

Here, in contrast, the NRC determined in the 1991 License Renewal Rule that operating a reactors aging equipment after its forty-years term limit poses additional unique safety risks that were not contemplated in the initial operating Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 21 of 36

15 license for any reactor and that would be critical to safety during the term of the renewed license. 2-EOR-033. See also id. (concluding that age-related safety risks become important principally during the period of extended operation beyond the initial 40-year license term.) Therefore, the NRC made a safety finding that the discipline of a formal integrated assessment of age-related degradation unique to license renewal is necessary. Id. (emphasis added).

This language ties the 1991 License Renewal Rule to four fundamental AEA mandates:

The NRCs recognition that aging effects on nuclear reactors become important primarily beyond the initial 40-year license term shows that the NRC gives the statutory forty-year limit on reactor license terms safety significance.

The word necessary signals that the NRC is identifying actions that must be taken to comply with the Acts mandatory adequate protection standard in 42 U.S.C. § 2232. See also Resp. Br. at 6 (stating that the AEAs safety and licensing provisions impose mandatory requirements).

The phrase formal integrated assessment of age-related degradation connotes a formal license renewal proceeding that includes a safety evaluation and environmental impact analysis in compliance with 42 U.S.C.

§ 2232 and NEPA.

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16 Finally, the phrase formal integrated assessment connotes the completion of a formal hearing process, in compliance with 42 U.S.C. § 2239(a)(1).

Having made the safety finding that a formal license renewal review is necessary for protection of public health and safety after forty years of operation, the NRC could not harmoniously balance the APA against the AEA without taking into account the AEAs key statutory requirements for addressing the significant and unique safety risks of operating nuclear reactors more than forty years.

Therefore, in the Reactor Timely Rule that was incorporated into the 1991 License Renewal Rule, the NRC struck a balance between the APA and the AEA by setting a five-year deadline for submission of timely license renewal applications so that, in most circumstances, the statutorily required license renewal review and hearing would be completed by the time the operating license expired.7 The Exemption Decision upends that carefully established balance for the first time. Petitioners respectfully submit that a harmonious reading of the APAs 7 Since 1991, the NRC has not issued a single exemption that gave it less than three years to review a license renewal application and complete a hearing. Pet. Br. at

39. Other than Indian Point, in no case did the NRC fail to complete the license renewal review and hearing before the expiration of the operating license. Id. In Oyster Creek, for example, the NRC gave the licensee an exemption allowing it to submit a license renewal application four years before expiration of its operating license. Due in part to a contentious hearing, the agency did not complete the hearing process until the day before the operating license expired. AmerGen Energy Company, LLC, 69 N.R.C. 235 (2009). See also 3-ER-399.

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17 timely renewal doctrine and the AEA cannot be achieved by over-balancing the APA at a sacrifice of adequate protection to public health and safety. NRDC I, 859 F.2d at 172. The reasonable balance struck in 1991 by the NRC between the private business interests protected by the APA and the public health and safety interests protected by the AEA should be preserved.

B. Respondents Fail to Demonstrate that the Exemption Decision is Based on a Review of All Relevant Factors or Constitutes a Lawful Exercise of Discretion.

In attempting to defend the Exemption Decision, Respondents erroneously claim to have reviewed the regulatory history of 10 C.F.R. § 2.109(b) and explained that the five-year time period was the result of a discretionary agency rulemaking, not any immovable statutory requirement. Resp. Br. at 34.

1. NRC failed to consider all relevant factors.

Respondents review [of] the regulatory history of the Reactor Timely Renewal Rule is rife with mischaracterizations and omissions. It is Respondents, not Petitioners, who have conflate[d] the purpose of an NRC license renewal proceeding with that of the NRCs separate, ongoing obligation to provide reasonable assurance of adequate protection of public health and safety. Resp. Br.

at 46.

For instance, Respondents attempt to minimize the significance of the agencys 1991 safety findings by stating that the license renewal review is not Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 24 of 36

18 top-to-bottom or de novo. Resp. Br. at 47. This argument misses the fundamental point of the NRC findings in the License Renewal Rule that safety risks of operating reactors after forty years are both significant and different, and therefore require new measures that are not included in initial operating licenses.

Respondents also accuse Petitioners of hypocrisy by seeking strict fidelity to AEAs forty-year term limit at the same time Petitioners acknowledge that the NRC previously allowed continued operation of the Indian Point reactors past their expiration dates via the timely renewal rule. But Petitioners do not ask the Court to hold that the AEA overrides the APA. They simply ask the Court to restore the harmony between the Act and the APA that is achieved by fidelity to the Reactor Timely Renewal Rule.

Finally, Respondents fail to acknowledge that for all previous exemption requests to this one, including Indian Point, the NRC hewed to the underlying principle of the Reactor Timely Renewal Rule by limiting exemptions to provide itself with at least three years to review a license renewal application before expiration of the operating license.8 By the standard cited in their own brief, 8 PG&E claims to cite five 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. PG&E Br. at 15 (citing 2-ER-290 and 2-ER-293-94).

But the text of each of the decisions cited by PG&E shows that none gave the NRC less than three years to review a commercial reactor operating license and complete a hearing. 2-ER-212; 2-ER-236; 2-ER-228; 2-ER-224; 2-ER-070; 2-ER-220. In each case, the NRC explicitly found that moving the deadline for the Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 25 of 36

19 Respondents fail to meet the APAs requirement to consider the relevant factors that should have informed the Exemption Decision. Resp. Br. at 21.9

2. NRCs application of its discretion evades statutory mandates.

Respondents also overstate the extent of the NRCs discretion in adopting the Timely Renewal Rule. According to Respondents, because the APA does not contain an immovable statutory deadline for license renewal applications, the NRC may move the five-year deadline anywhere, even to thirty days. Resp. Br. at 34-35. Respondents assert the 1991 License Renewal Rule landed on five years as if setting the deadline was a game of darts. Id. at 35.

While the NRC may exercise discretion in interpreting the AEA, the agencys ultimate obligation to protect public health and safety is not discretionary.

See Union of Concerned Scientists v. NRC, 824 F.2d 108, 117 (D.C. Cir. 1987)

(holding that the NRC has a statutory mandate to ensure adequate protection of license renewal application from five years to three years in advance of license expiration provides sufficient time for the NRC to perform a full and adequate safety and environmental review, and for the completion of the hearing process.

Id. See also Pet. Br. at 39, n.9. The NRC does not make that type of finding for the Diablo Canyon Exemption Decision, nor could it.

9 Respondents also devote an entire page of their brief to demonstrate that Petitioners have no legal basis for seeking a hearing on the Exemption Decision.

Pet. Br. at 42. But Petitioners have not requested a hearing on the Exemption Decision. They seek a ruling that the NRC may not knowingly issue an exemption that undisputedly would not give the agency enough time to complete a hearing before expiration of the Diablo Canyon licenses.

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20 the public health and safety, without regard to costs). Having found in 1991 that it could not satisfy its statutory mandate any other way but to complete the license renewal process and hearing before allowing reactors to operate beyond forty years, the NRC gave up the discretion to now declare it meaningless. The agencys effective abandonment of the five-year deadline - or even a three-year deadline -

constitutes an effective repeal of the Rule. See Pet. Br. at 39-45.10 Respondents also attempt to justify their over-expansive conception of agency discretion by minimizing the Exemptions effect. According to Respondents, the Exemption did nothing more than to provide PG&E with an alternative deadline to file a future license application. Resp. Br. at 29. To the contrary, the Exemption reduced the time for reviewing PG&Es application before the expiration of the Diablo Canyon licenses from five years to eleven months for Unit 1 and twenty months for Unit 2 - an amount of time the NRC has previously 10 Respondents also cite United States v. Allegheny-Ludlum Steel Corp., 406 U.S.

742, 755 (1972) for the broad proposition that an agency may issue exemptions where special circumstances are present. Resp. Br. at 44. But the NRCs exemption regulation provides that special circumstances may only be considered after the NRC has found that the exemption is authorized by law and poses no undue risk to public health and safety, as required by the Atomic Energy Act. 10 C.F.R. § 50.12(a)(1). The NRC may not mix statutory safety considerations with economic considerations as if they were equivalent. See Union of Concerned Scientists, 84 F.2d at 117. Allegheny-Ludlum Steel does not hold otherwise.

Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 27 of 36

21 concluded is insufficient to complete a safety review, an environmental review, or a hearing.11 Having found that completion of the formal license renewal process was necessary to meet the statutory standard for adequate protection of public health and safety in the post-forty-year operating period, the NRC did not have discretion to alter that finding without directly addressing the question of why and how the standard could continue to be met under the exemption. Respondents attempt to slide past that reckoning on a raft of agency discretion must fail because it is unlawful.

C. The Court Should Not Reach the Issue of Special Circumstances.

Both PG&E and the California Attorney General devote a substantial portion of their briefs to the special circumstances that assertedly justify the Exemption Decision. But these discretionary considerations may not substitute for or be mixed with the statutory and safety considerations required by 10 C.F.R. § 50.12(a)(1).

Union of Concerned Scientists, 824 F.2d at 118. Because the NRC has not satisfied that first prong of the exemption standard, this Court need not and should not reach 11 The only task the NRC claims to be able to complete is to determine if any immediate actions need to be taken prior to the licensee entering the term of timely renewal. 1-ER-005, i.e., a partial ex parte review that is a far cry from the formal integrated assessment of age-related degradation that the NRC deemed necessary in the 1991 License Renewal Rule. 2-ER-033.

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22 the question of whether an exercise of the NRCs discretion would be justified under 10 C.F.R. § 50.12(a).

In any event, Respondents assertions regarding the need for continued operation of the Diablo Canyon reactors to support grid reliability are untested assumptions made by the Legislature, not conclusions reached in an evidentiary proceeding. In fact, the Legislature assigned the California Public Utilities Commission (CPUC) responsibility for verifying whether continued operation of the Diablo Canyon reactors is necessary. Pet. Br. at 50-51. The CPUC has not yet issued a decision.12 D. The Exemption Decision Violates NEPA.

Respondents attempted defense of the NRCs decision to apply a categorical NEPA exclusion to the Exemption Decision rests on the same rationale for asserting that the Exemption Decision poses no undue risk to public health and safety, i.e., that it amounts to only a schedule change for the Diablo Canyon license renewal application that has no effect on public health and safety or the human environment. Resp. Br. at 54, 58. This argument does not withstand the slightest 12 PG&E and the Attorney Generals suggestion that the States regulatory processes will somehow compensate for any deficit by the NRC (PG&E Br. at 34, CA Amicus Br. at 4) is frivolous. Only the NRC has the authority and the expertise to provide the public with adequate protection from the radiological hazards of operating Diablo Canyon and other nuclear reactors. See Pacific Gas & Electric Co. v. State Energy Commn, 461 U.S. 190 (1983).

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23 scrutiny. As discussed above, the NRC has determined that operation of nuclear reactors past forty years poses new and significant safety risks of operating with aging equipment that are not addressed in the current operating license. By the same token, the environmental impacts associated with these safety risks are new and significant and have not been addressed in any previous environmental impact statement (EIS) or environmental assessment for Diablo Canyon.13 If the NRC had applied the Timely Renewal Rule to Diablo Canyon, PG&E would not have been able to submit a timely license renewal application in 2023.

Therefore, the NRC would not have permitted PG&E to operate the Diablo Canyon reactors past their forty-year operating license terms without an EIS or environmental assessment of these risks.14 13 PG&Es claim to forty years of experience and data about Diablo Canyons environmental impacts, plus decades of environmental analysis from other license renewal applications is unavailing. See PG&E Br. at 40. None of these environmental analyses could have analyzed the Diablo Canyon-specific environmental impacts of operating past the reactors forty-year operating license terms, because the impacts hadnt occurred yet or because they affected other reactors.

14 PG&E asserts that the categorical exclusion issued in this case is supported by multiple previous examples of timely renewal exemption decisions. PG&E Br. at 38-39. In each of those cases the NRC gave itself three years before license expiration to conduct a safety and environmental review and complete the hearing process and the NRC based the exemption on a finding that three years was a sufficient time for the NRC to complete those processes. Pet. Br. at 39. Thus, while the NRC applied the categorical exclusion to the exemption itself, it made sure it had a reasonable opportunity to fully evaluate the environmental impacts of operating the reactor beyond forty years, including the opportunity for a hearing, Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 30 of 36

24 NEPA is governed by a rule of reasonableness. San Luis Obispo Mothers for Peace v. NRC, 449 F.3d at 1031. The statute requires that environmental impacts must be considered in advance of major actions that cause them.

Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989). In no rational manner could a decision to allow the operation of two nuclear reactors past their forty-year operating license term limits, without providing a reasonable opportunity in advance for an environmental analysis of admittedly new and significant adverse environmental risks, be characterized as purely administrative.15 III.

VACATUR IS THE PROPER REMEDY.

Respondents urge the Court to remand this case without vacatur, Resp. Br.

at 59, but admit that remand is not appropriate where there is a fundamental flaw making it unlikely the agency could adopt the same action. Resp. Br. at 43 i.e., the public participation functions of NEPA. San Luis Obispo Mothers for Peace, 449 F.3d 1030, 1034 (9th Cir. 2006).

15 Respondents cite the no significant hazards analysis performed under 10 C.F.R. § 51.22(c)(25)(i)-(v) as a guardrail[] that is meant to ensure that the categorical exclusion does not sweep up administrative exemptions with the potential for significant effects on the human environment. Resp. Br. at 58. On its face, the Exemption Decision fails to satisfy the no significant hazards test.

Given the NRCs determination in the 1991 License Renewal Rule that operating of nuclear reactors past forty years raises new and unique safety risks related to the operation of aging equipment, 2-ER-033, the NRC had no rational basis for finding that the Exemption Decision would not create any significant increase in the potential for or consequences from radiological accidents. 10 C.F.R. § 51.25(c)(25)(v).

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25 (quoting Ctr. for Food Safety v. Reagan, 56 F.4th 648, 663-64 (9th Cir. 2022);

Natl Fam. Farm Coal. v. EPA, 966 F. 3d 893, 929-30 (9th Cir. 2020)). Here, the Exemption Decision demonstrates a fundamental misconception of the mandatory nature of NRCs responsibilities under the AEA, the significance of the safety findings in the 1991 License Renewal Rule, or the requirements of NEPA for evaluating environmental impacts of nuclear reactor operation after forty years of operation. Further, the Respondents brief only entrenches the agencys erroneous position, giving no indication that the result on remand would be any different.

Indeed, it is difficult to conceive how the NRC could explain away the well-considered and supported finding of the 1991 License Renewal that after forty years of operating nuclear reactors, their aging equipment poses new and significant safety risks that must be thoroughly and systematically evaluated in a formal proceeding.

Finally - and chillingly - Respondents twice assert that the NRC is responding to circumstances that are beyond its control. Resp. Br. at 4, 61. But no state law or practice can constitutionally wrest control from the NRC over its statutory duty to ensure the protection of human and environmental health and safety from the risks of nuclear reactors. A mere explanation on remand cannot cure the agencys wholesale and unexplained departure from its well-reasoned and statutorily-based regulatory framework to balance the APA and the AEA, nor can Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 32 of 36

26 it prevent the existential risk to public health and safety and the environment that would be caused if PG&E is allowed to operate past its operating license expiration dates without the required thorough review of new and significant safety and environmental risks and opportunity for public participation. The only way to ensure the NRC acts lawfully and provides adequate protection to public health and safety and the environment is to vacate the Exemption Decision.

IV.

CONCLUSION For the foregoing reasons, the Court should reverse and vacate the Exemption Decision.

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27 Respectfully submitted,

/s/ Diane Curran Diane Curran Harmon, Curran, Spielberg, & Eisenberg, L.L.P.

1725 DeSales Street N.W., Suite 500 Washington, D.C. 20036 240-393-9285 dcurran@harmoncurran.com Counsel to Petitioner San Luis Obispo Mothers for Peace

/s/ Richard Ayers Richard Ayres 2923 Foxhall Road, N.W.

Washington, D.C. 20016 202-744-6930 ayresr@ayreslawgroup.com Counsel to Petitioner Friends of the Earth

/s/ Caroline Leary Caroline Leary Environmental Working Group 1250 I St N.W.

Washington, DC 20005 202-667-6982 cleary@ewg.org Counsel to Petitioner Environmental Working Group October 19, 2023 Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 34 of 36

28 CERTIFICATE OF COMPLIANCE Pursuant to Fed. R. App. P. 32(a)(7)(C), the undersigned hereby certifies that this brief complies with the type-volume limitations of Fed. R. App. P.

32(a)(7)(B)(ii) and Rule 29(a)(f).

1. Exclusive of the exempted portion of the brief provided in Fed. R. App. P.

32(a)(7)(B), the brief contains 6,447 words.

2. The brief has been prepared in proportionally spaced typeface using Microsoft Word 2010 in 14 point Times New Roman font. As permitted by Fed. R. App.

P. 32(a)(7)(B), the undersigned has relied upon the word count feature of this word processing system in preparing this certificate.

October 19, 2023 Respectfully submitted,

/s/ Diane Curran Diane Curran Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 35 of 36

30 CERTIFICATE OF SERVICE I hereby certify that on this 19th day of October 2023, I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit using the appellate CM/ECF system. Counsel for all parties to the case are registered CM/ECF users and will be served by the appellate CM/ECF system.

October 19, 2023 Respectfully submitted,

/s/ Diane Curran Diane Curran Case: 23-852, 10/19/2023, DktEntry: 37.1, Page 36 of 36

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