ML24218A004

06.14.24 Petitioners Reply Brief

ML24218A004
Person / Time
Site:	Diablo Canyon
Issue date:	06/14/2024
From:	Ayres R, Curran D Ayres Law Group, Friends of the Earth, Harmon, Curran, Harmon, Curran, Spielberg & Eisenberg, LLP, San Luis Obispo Mothers for Peace (SLOMFP)
To:	NRC/OGC, US Federal Judiciary, Court of Appeals, 9th Circuit
References
23-3884
Download: ML24218A004 (1)

Text

Case No. 23-3884 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT SAN LUIS OBISPO MOTHERS FOR PEACE, INC.

AND FRIENDS OF THE EARTH, INC.

Petitioners,

v.

UNITED STATES NUCLEAR REGULATORY COMMISSION and the UNITED STATES OF AMERICA, Respondents, PACIFIC GAS & ELECTRIC COMPANY, Intervenor Petition for Review of Final Administrative Action of the United States Nuclear Regulatory Commission PETITIONERS REPLY BRIEF DIANE CURRAN Harmon, Curran, Spielberg

& Eisenberg, LLP 1725 DeSales Street NW, Suite 500 Washington, D.C. 20036 (240) 393-9285 dcurran@harmoncurran.com RICHARD E. AYRES 2923 Foxhall Road, N.W.

Washington, D.C. 20016 (202) 744-6930 ayresr@ayreslawgroup.com June 14, 2024 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 1 of 34

TABLE OF CONTENTS TABLE OF AUTHORITIES..iii GLOSSARY...vii INTRODUCTION 1 ARGUMENT.3 I.

THE NRCS FOUR EXTENSION DECISIONS BETWEEN 2008 AND 2023 EFFECTIVELY AMENDED PG&ES OPERATING LICENSE FOR DIABLO CANYON UNIT 1 BY LIFTING A RESTRICTION IMPOSED IN A 2006 LICENSE CONDITION..3 A. The Record Shows that the 2009 Deadline for Removing Capsule B was a Condition for Granting a Three-Year Extension of the Operating License Term for Unit 14 B. The 2008-2023 Extension Decisions Expose an Unexplained and Unsupported Reversal of the NRCs Position, Not Consistency..8 C. Under NRC Policy and Precedents, a License May Be Amended by Changes Detailed in the Required Safety Analysis of the Pressure Vessel Surveillance Programs Without Publication in the Federal Register10 II.

THE NRCS DENIAL ORDER WAS ARBITRARY AND CAPRICIOUS BECAUSE IT DID NOT EXPLAIN THE AGENCYS BASIS FOR REJECTING PETITIONERS CLAIMS..14 III.

THIS COURT HAS JURISDICTION TO REVIEW ALL OF THE UNLAWFUL NRC ACTIONS LEADING UP TO AND INCLUDING THE 2023 EXTENSION DECISION..16 IV.

OTHER REMEDIES WILL NOT ADDRESS THE SAME ISSUES OR PROVIDE PETITIONERS WITH THE SAME PROCEDURAL PROTECTIONS AS A HEARING ON THE EFFECTIVE AMENDMENT OF THE UNIT 1 OPERATING LICENSE............20 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 2 of 34

ii V.

REVERSAL AND VACATUR ARE NECESSARY AND APPROPRIATE REMEDIES FOR THE DENIAL DECISIONS REFUSAL TO TREAT THE 2008, 2010, 2012 AND 2023 EXTENSION DECISIONS AS LICENSE AMENDMENTS23 CONCLUSION...24 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 3 of 34

iii TABLE OF AUTHORITIES Judicial Decisions Association of American Railroads v. ICC, 846 F.2d 1465 (D.C. Cir. 1988).20 Bellotti v. NRC, 725 F.2d 1380 (D.C. Cir. 1983)..21 Burlington Truck Lines, Inc. v. United States, 371 U.S. 156 (1962)14 Cal. Assn of the Physically Handicapped, Inc. v. FCC, 833 F.2d 1333 (9th Cir. 1987)...18 Cal. Cmties. Against Toxics v. EPA, 688 F.3d 989 (9th Cir. 2012)..23 Citizens Awareness Network v. NRC, 59 F.3d 284 (1st Cir. 1995).12-13 Dept of Homeland Sec. v. Regents of the Univ. of Cal.,

140 S.Ct. 1891 (2020).3 Deukmejian v. NRC, 751 F.2d 1287 (D.C. Cir. 1984)..2, 21 Encino Motorcars, LLC v. Navarro, 579 U.S. 211 (2017)..14 FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009).14 Gill v. Dept. of Justice, 913 F.3d 1179 (9th Cir. 2019)..14, 15 Good Samaritan Hosp. v. Shalala, 508 U.S. 402 (1993)8 Guard v. United States Nuclear Regulatory Com.,

753 F.2d 1144 (D.C. Cir. 1985)..10, 14 Hatch v. FERC, 654 F.2d 825 (D.C. Cir. 1981)..14, 19 Heckler v. Chaney, 470 U.S. 821 (1985)..21 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 4 of 34

iv Honeywell Intl v. U.S. Nuclear Reg. Commn, 628 F.23d 568 (D.C. Cir. 2010)14 In re Three Mile Island Alert, 771 F.2d 720 (3d Cir. 1985)3 INS v. Cardoza-Fonseca, 480 U.S. 421 (1987)...8 Michigan v. EPA, 576 U.S. 743 (2015)...3-4 Migrant Clinician Network v. United States EPA, 88 F.4th 830 (9th Cir. 2023)..3, 23 Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29 (1983)..14, 15 Natl Family Farm Coal. V. United States EPA, 960 F.3d 1120 (9th Cir. 2020)..23 Newell v. SEC, 812 F.2d 1259 (9th Cir. 1987)..17 N.W. Envtl. Def. Ctr. v. Brennen, 958 F.2d 930 (9th Cir. 1992)...17 Pollinator Stewardship Council v. EPA, 806 F.3d 520 (9th Cir. 2015).23 P & R Temmer v. FCC, 743 F.2d 918 (D.C. Cir. 1984)13 Public Citizen, Inc. v. Mineta, 343 F.3d 1159 (9th Cir. 2003)..17 Public Citizen, Inc. v. Nuclear Regulatory Com.,

901 F.2d 147 (D.C. Cir. 1990)18, 20 Safe Energy Coalition v. U.S. Nuclear Reg. Commn, 866 F.2d 1473 (D.C. Cir. 1989)21 San Luis Obispo Mothers for Peace v. NRC, No.23-852, 2024 WL 1846133 (9th Cir. Apr. 29, 2024).22 Watts v. Alaska, 451 U.S. 259, 273 (1981).8 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 5 of 34

v Statutes Administrative Procedure Act, 5 U.S.C. § 552(a)(1)..18 Atomic Energy Act Section 189a, 42 U.S.C. § 2239(a)21, 23 Hobbs Act, 28 U.S.C. § 2344.16, 18 Administrative Decisions Cleveland Elec. Illuminating Co., 44 N.R.C. 315 (1996).11, 12, 13 Regulations 10 C.F.R. § 2.206..20, 21, 22 10 C.F.R. § 2.309(f)2 10 C.F.R. § 2.352..21 10 C.F.R. Part 50, App. H...12, 13 Guidance Documents ASTME standards.12, 13, 22 ASTM E 185-70..1, 5, 6, 7, 9 ASTM E 185-821, 4, 6, 7, 13 Federal Register Notices Final Policy Statement on Technical Specification Improvements for Nuclear Power Reactors, 58 Fed. Reg. 39,132 (July 22, 1993),

as amended, 60 Fed. Reg. 36,953 (July 19, 1995)11 Notice of License Amendment, 64 Fed. Reg. 31,022 (June 9, 1999)...12 Notice of License Amendment, 71 Fed. Reg. 46,945 (Aug. 15, 2006)...14, 17 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 6 of 34

vi Miscellaneous NRC Policy Memorandum SECY-98-296 (March 30, 1999)...5 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 7 of 34

vii GLOSSARY ASTM American Society for Testing of Materials Commission U.S. Nuclear Regulatory Commission EFPY Effective Full Power Years ER Excerpts of Record NRC U.S. Nuclear Regulatory Commission PG&E Pacific Gas and Electric Co.

RFO refueling outage USAR Updated Safety Analysis Report UFSAR Updated Final Safety Analysis Report Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 8 of 34

INTRODUCTION In this appeal, Petitioners ask the Court to reverse an Order by the U.S.

Nuclear Regulatory Commission (NRC) (Denial Order, 1-ER-003), refusing to grant them a hearing on four consecutive and cumulative decisions (Extension Decisions) that lifted a condition in Pacific Gas & Electric Co.s (PG&Es) operating license for the Diablo Canyon Unit 1 nuclear reactor. That license condition, imposed in 2006, had strengthened PG&Es surveillance program for the Unit 1 reactor pressure vessel -- the structure most critical to reactor safety --

by (1) upgrading the industry standard for evaluation of embrittlement in the Unit 1 pressure vessel from ASTM E 185-70 to ASTM E 185-82; (2) stipulating a four-capsule surveillance program, of which Capsule B which would be the last capsule withdrawn from the Unit 1 pressure vessel; and (3) setting a deadline of 2009 for withdrawal of Capsule B.

The NRC imposed the license condition in exchange for granting a three-year extension of the Unit 1 operating license to recover an equivalent amount of time spent initially testing the reactor at low-power. Starting in 2008 and continuing through 2023, however, the NRC has effectively amended the Unit 1 operating license four times by repeatedly extending the Capsule B removal deadline by a total of fifteen years. In none of these back-door license amendments Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 9 of 34

2 did the NRC acknowledge that it was relaxing the license condition imposed in 2006 or announce that it had amended the Unit 1 operating license.

Petitioners submitted a request for a hearing on those extensions (Hearing Request, 2-ER-036), out of their concern that the ongoing lack of data regarding the condition of the Unit 1 pressure vessel poses an unacceptable risk to public health and safety. But the NRC summarily denied their Hearing Request in the Denial Order. Petitioners have appealed.

Respondents now attempt to supply post hoc rationalizations for the Denial Order, but their arguments are inconsistent with the record and Commission precedents. They have also failed to support their arguments that endeavor to deprive this Court of jurisdiction over any of the extension decisions before 2023, and to divert Petitioners claims to other extraneous administrative proceedings.

Therefore, the Court should reverse and vacate the portion of the NRCs Denial Order ruling that the 2008, 2010, 2012, and 2023 Extension Decisions did not amend the operating license for Diablo Canyon Unit 1 to lift the license condition imposed in 2006. The Denial Order should be remanded to the NRC to address the sole question of the admissibility of Petitioners Hearing Request under 10 C.F.R. § 2.309(f). Finally, the Court should order the NRC to expedite the remanded decision-making process in order to compensate for the NRCs lengthy Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 10 of 34

3 delay in providing public notice, explanation, or acknowledgement that it wished to abandon the 2006 license condition.

ARGUMENT I.

THE NRCS FOUR EXTENSION DECISIONS BETWEEN 2008 AND 2023 EFFECTIVELY AMENDED PG&ES OPERATING LICENSE FOR DIABLO CANYON UNIT 1 BY LIFTING A RESTRICTION IMPOSED IN A 2006 LICENSE CONDITION.

Respondents do not dispute Petitioners assertion that an NRC action effectively amends an operating license if it gives a licensee greater operating authority than it previously had and alter[ed] the original terms of its license.

See Pet. Br. at 37 (quoting In re Three Mile Island Alert, 771 F.2d 720, 729 (3d Cir. 1985); Deukmejian v. NRC, 751 F.2d 1287, 1314 (D.C. Cir. 1984)). But they incorrectly claim that the NRC did not enlarge Unit 1s operating authority by its repeated Extension Decisions between 2008 and 2023. Resp. Br. at 31-33.

Respondents claims are inconsistent with the record and with the agencys own precedents regarding the treatment of changes in reactor vessel surveillance programs.1 1 As discussed below in Section II, and as conceded by the Respondents (Resp. Br.

at 34), the Denial Order does not provide any explanation for the NRCs decision to reject Petitioners Hearing Request. Therefore, all of the arguments presented in Respondents Brief and addressed below constitute impermissible post hoc rationalizations. [J]udicial review of agency actions is limited to the grounds that the agency invoked when it took the action. Migrant Clinician Network v. United States EPA, 88 F.4th 830, 844-45 (9th Cir. 2023) (quoting Dept of Homeland Sec.

v. Regents of the Univ. of Cal., 140 S.Ct. 1891, 1907 (2020) (quoting Michigan v.

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4 A. The Record Shows that the 2009 Deadline for Removing Capsule B was a Condition for Granting a Three-Year Extension of the Operating License Term for Unit 1.

Petitioners maintain that a mandatory 2009 deadline for removing Capsule B was an integral part of the NRCs 2006 License Amendment to extend Unit 1s operating license by three years. In response, Respondents and PG&E offer a revised and distorted version of the history of that deadline.

Respondents now concede only that PG&Es application for its extension expressed an intention to remove Capsule B in 2009. Resp. Br. at 22 (asserting that the 2006 License Amendment described PG&Es plans at the time to remove Capsule B in 2009) (emphasis added); Resp. Br. at 35 (asserting that the 2006 Safety Evaluation described PG&Es plans to withdraw a fourth capsule (Capsule B) in 2009 (emphasis added) See also PG&E Br. at 13. Similarly, PG&E asserts that the company proposed a withdrawal program that complied with ASTM E 185-82 with a four-capsule withdrawal program, PG&E Br. at 13, but that such a withdrawal program was merely acceptable, not mandatory under ASTM E 185-82. Id. According to PG&E, the only mandatory industry standard EPA, 576 U.S. 743, 758 (2015)). Nevertheless, Petitioners do not believe that resolution of this appeal would be helped by a remand for the purpose of revisiting those rationalizations. See Section V below. Instead, Petitioners seek their long-delayed hearing opportunity as soon as possible. Therefore, they address the NRCs post hoc rationalizations here.

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5 was ASTM E 185-70, because it was described by the NRC as the version of record. PG&E Br. at 25.

But this line of argument fails on three counts. First, Respondents and PG&E disregard the plain text of the 2006 Safety Evaluation, which explicitly linked the requested license amendment to the proposed surveillance schedule by stating: The request to recover the testing time for [Diablo Canyon Unit 1]

amends the projected withdrawal for Capsule B to approximately 20.7 EFPY [i.e, 2009]. 2-ER-165 (emphasis added). This statement was not a mere observation of PG&Es plans, but a safety finding made by the NRC Staff under instruction by the NRC Commissioners to evaluate whether adequate protection of public health and safety would be provided if the Staff allowed PG&E to add three years to its operating license term. See NRC Policy Memorandum SECY-98-296 (2-ER-191 -

2-ER-210) (cited in Pet. Br. at 14-15).2 Thus, Unit 1 was allowed to operate for an 2 Petitioners also note that the placement of the statement in the Safety Evaluation identifies it as a safety finding rather than just an observation. The statement is not made in the Introduction to the Safety Evaluation (Section 1.0) but in Section 3.2, entitled Impact on the RVMSP [Reactor Vessel Material Surveillance Program] (2-ER-165), which is part of Section 3.0, entitled TECHNICAL EVALUATION. 2-ER-163.

In addition, the discussion of Impact on the RVMSP is consistent with NRC Policy 98-296 for extending operating license terms to recapture the period of low-power testing. See 2-ER-194 (stating that the NRCs review for the Grand Gulf reactors recapture application covered, inter alia, the effect of the recapture period on the reactor pressure vessel, structures, mechanical equipment, electrical equipment, and quality assurance and maintenance programs, and addressed Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 13 of 34

6 additional three years upon condition that in 2009 Coupon B would be removed and used to assess the state of the pressure vessels embrittlement.

Second, in arguing that ASTM E 185-82 is irrelevant, PG&E fails to note that the companys original 1992 application for approval of the supplemental surveillance program (including Capsule B) described the program as consistent with ASTM E 185-70 and the guidance of ASTM E 185 E-82. 2-ER-245. PG&E also described the first five capsules of the supplemental surveillance program --

Capsules S, Y, V, B, and A -- as constituting a modern surveillance program within the limitations of the original program and available material. 2-ER-246.

Thus, even in 1992, PG&E had taken ASTME E 185-82 into account in designing its supplemental surveillance program.

Third, PG&E fails to acknowledge that its supplemental surveillance program, as submitted for approval in 1992, contained a 2007 deadline for withdrawal of Capsule B (i.e., approximately 19.2 effective full power years (EFPY)). 2-ER-247. That 2007 deadline remained in effect when PG&E applied to add three years to its operating license term in 2005. 2-ER-165. In the 2006 Safety Evaluation, the NRC relied on ASTM E 185-82 to extend the Capsule B withdrawal date by two more years (2008-2009). 2-ER-165. Thus, PG&E could not have obtained its three-year operating license extension if the NRC had not outstanding safety issues.) (emphasis added).

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7 applied ASTM E 185-82 to extend the time to withdraw Capsule B to 2009 by two years.3 Therefore, the record of PG&Es surveillance program and the 2006 License Amendment demonstrates that in extending the operating license term for Diablo Canyon Unit 1 by three years, the NRC explicitly linked that extension to a requirement that PG&E must implement a four-capsule surveillance program and withdraw Capsule B in 2009. It also demonstrates that even in PG&Es 1992 application for NRC approval of its supplemental surveillance program, PG&E cited ASTM E 185-82 as guidance. Finally, the record shows that the NRC relied explicitly on ASTM E 185-82 to extend the Capsule B withdrawal date by two years (from 2007 to 2009), thereby enabling PG&E to obtain the extension of its license term.

3 Even if ASTM E 185-82 could be ignored, however, it would not rescue Respondents arguments. In 1992, when PG&E applied for approval of its supplemental surveillance program, the surveillance schedule submitted by PG&E consisted of withdrawing four capsules: Capsules S, Y, V and B. 2-ER-246. By 2006, the first three capsules had already been withdrawn, leaving Capsule B to complete the surveillance schedule. 2-ER-165. Thus, it was not inconsistent with ASTM E-185-70 for the 2006 Safety Evaluation to identify Capsule B as the last capsule in a four-capsule withdrawal program.

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8 B. The 2008-2023 Extension Decisions Are Not Consistent, But Rather Expose an Unexplained and Unsupported Reversal of the NRCs Position.

Respondents argue that even if in 2008 the NRC pivoted away from a 2006 decision to impose a 2009 deadline for withdrawing Capsule B, the

[c]onsistency of the pivot from the 2006 License Amendment to the fifteen years of Extension Decisions between 2008 and 2023 supports its position that no such deadline ever existed. Resp. Br. at 39-40 (quoting, respectively, Pet. Br. at 40 and Good Samaritan Hosp. v. Shalala, 508 U.S. 402 (1993)).

But repeating the same error does not make it correct, no matter how many times the NRC repeats it. An agency interpretation that conflicts with the agencys earlier interpretation is entitled to considerably less deference than a consistently held agency view. Good Samaritan Hosp., 508 U.S. at 417 (quoting INS v.

Cardoza-Fonseca, 480 U.S. 421, 446 n.30 (1987) (quoting Watts v. Alaska, 451 U.S. 259, 273 (1981)). Here, the four post-2006 Extension Decisions systematically disregarded the fact that the new surveillance schedule described in the 2006 Safety Evaluation was imposed as part of a process to amend the Unit 1 operating license and ensure that it could be extended by three years without jeopardizing public health and safety.

For instance, in responding in 2008 to PG&Es first request for an extension of the deadline for removing Capsule B, the NRC almost completely disregarded Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 16 of 34

9 the 2006 Safety Evaluation instead of explaining why the agency wished to reverse its position that withdrawal of Capsule B in 2009 was a necessary condition of the License Amendment extending Unit 1s operating term by three years. The 2008 Safety Evaluations only reference to the 2006 Safety Evaluation was to acknowledge PG&Es proposal to modify the [Diablo Canyon] Unit 1 withdrawal schedule to remove... Capsule B during the units refueling outage (RFO) 16 in October 2010, instead of during the units RFO 15 in January of 2009. 1-ER-032.

In the TECHNICAL EVALUATION section, the 2008 Safety Evaluation simply skipped over the 2006 Safety Evaluation and harked back to the 1992 Safety Evaluation:

The current licensing bases for the DCPP, Unit 1 RPV material surveillance program is in accordance with ASTME E 185-70, along with supplemental changes made at DCPP as described in NRC Safety Evaluation (SE) dated September 4, 1992, Evaluation of Diablo Canyon Unit 1 Supplemental Reactor Vessel Radiation Surveillance Program.

1-ER-033 (emphasis added). But the 2008 Safety Evaluation neither acknowledged that this 1992 Safety Evaluation was superseded by the 2006 Safety Evaluation nor offered any explanation of the agencys policy pivot.

Subsequent Extension Decisions in 2010, 2012 and 2023 attempted to completely write Capsule B out of the initial license term, while again failing to offer any rationale or record on which to base the NRCs abandonment of the four-capsule position taken in the 1990s and again in 2006. For instance, the 2010 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 17 of 34

10 Safety Evaluation stated that, since three capsules had been withdrawn, [t]he surveillance capsule withdrawal plan spanning the initial license period has already been completed and, as such, forms no part of this evaluation. 1-ER-026.

Virtually identical statements can be found in the 2012 Safety Evaluation (1-ER-020) and the 2023 Safety Evaluation (1-ER-013).

Thus, the record shows the NRCs consistency in only one respect: ever since 2008, the agency has consistently disregarded the condition imposed in the 2006 License Amendment that PG&E withdraw a fourth capsule, Capsule B, by 2009. Refusing even to admit its change in policy, the NRC has consistently offered neither a reasoned explanation nor a record on which it could base such a policy change. Like other such arbitrary and unreasoned reversals of policy that have been reversed by federal courts, this one should be overturned. See, e.g.,

Guard v. United States Nuclear Regulatory Com., 753 F.2d 1144, 1150 (D.C. Cir.

1985) (reversing and vacating unexplained and unsupported NRC decision).

C. Under NRC Policy and Precedent, New Surveillance Program Conditions May be Added to the License Without Formal Changes in the License or Federal Register Notice.

Respondents and PG&E argue that if the NRC had intended to impose a condition on the 2006 License Amendment establishing a schedule for removing Capsule B from the Unit 1 pressure vessel, it would have added a new condition to the reactors operating license and discussed it in the Federal Register notice of the Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 18 of 34

11 License Amendment. Resp. Br. at 35-36, PG&E Br. at 24-25.

But the parties fail to acknowledge a policy decision the NRC made in the 1990s that removed from public notice changes in pressure vessel surveillance programs at nuclear reactors. As a result, the lack of Federal Register notice regarding the 2009 capsule withdrawal condition does not support Respondents argument.

In the 1990s, the NRC amended all reactor operating licenses to remove pressure vessel surveillance programs from the technical specifications contained within operating licenses. Cleveland Elec. Illuminating Co., 44 N.R.C.

315, 318 (1996) (Perry) (citing Final Policy Statement on Technical Specification Improvements for Nuclear Power Reactors, 58 Fed. Reg. 39,132, 39,136 (July 22, 1993), as amended, 60 Fed. Reg. 36,953 (July 19, 1995)). This change was part of a Technical Specifications Project designed to address a burgeoning number of items commonly included in standard technical specifications that was both diverting Staff and licensee attention from the most significant safety requirements and unnecessarily burdening agency and industry resources with a several fold increase in license amendment applications. Id.

Thus, the NRC moved surveillance schedules from the technical specifications contained in each operating license to the Updated Safety Analysis Report Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 19 of 34

12 (USAR)4, a licensee-controlled document. Id., 44 N.R.C. at 318-19.5 In Perry, the Commission explained that this was an appropriate approach for pressure vessel surveillance programs because in most cases, approving changes to surveillance schedules would involve only confirmation that the schedules continued to comply with ASTME standards made applicable by 10 C.F.R. Part 50, App. H. Id., 44 N.R.C. at 328. Significantly, the Commission characterized the transfer of surveillance programs from the technical specifications in the licenses to the USAR as only an administrative change. Id.,

44 N.R.C. at 323. The reactor surveillance programs remained important enough to safe reactor operation that the NRC continued to require NRC Staff approval of any proposed changes in the form of a safety evaluation. Id., 44 N.R.C. at 323-24.

In explaining its policy, the Commission stated that changes to surveillance programs may constitute license amendments even though they do not require a change in the technical specifications in the license. For example, the license could be amended by changes in surveillance programs that, as in this case, supplement the existing operating authority prescribed in the license. Id., 44 N.R.C. at 329 (quoting Citizens Awareness Network v. NRC, 59 F.3d 284, 295 (1st 4 PG&Es term for the USAR is Updated Final Safety Analysis Report (UFSAR). See, e.g., 2-ER-129, 2-ER-132.

5 The NRC amended the Diablo Canyon operating licenses for this purpose in 1999. 64 Fed. Reg. 31,022 (June 9, 1999).

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13 Cir. 1995) and citing P & R Temmer v. FCC, 743 F.2d 918, 928 (D.C. Cir. 1984)).

By contrast, the Commission noted, changes in surveillance programs would require changing the technical specifications (i.e., the terms of the operating license) and public notice in the Federal Register in only one situation: if the changed surveillance program were no longer in compliance with the ASTM standard referenced in the applicable regulation, 10 C.F.R. Part 50, Appendix H.

44 N.R.C. at 329 and n.39.

In this case, no change to the technical specifications was needed because the NRC Staff had determined that application of ASTM E-185-82 to Unit 1, imposed by the License Amendment, was consistent with Appendix H. See 2-ER165 (Appendix H permits the licensees (sic) to meet the [reactor vessel material surveillance program] withdrawal criteria of more recent versions of ASTM E185, inclusive of E185-82).

Therefore, the NRCs failure to add a technical specification in the 2006 Unit 1 license requiring withdrawal of capsule B in 2009 does not demonstrate the NRCs lack of intent to impose a new license condition on the operation of the Unit 1 reactor. As long as the requirement to withdraw Capsule B in 2009 was consistent with ASTM E 185-82 (as it was), allowed the Staff to document that condition in the Safety Evaluation for the License Amendment.6 6 As stated in the Federal Register notice for the 2006 License Amendment, [t]he Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 21 of 34

14 II.

THE NRCS DENIAL ORDER WAS ARBITRARY AND CAPRICIOUS BECAUSE IT DID NOT EXPLAIN THE AGENCYS BASIS FOR REJECTING PETITIONERS CLAIMS.

It is well-established that in making a decision, an agency must examine the relevant data and articulate a satisfactory explanation for its action including a

'rational connection between the facts found and the choice made. Gill v. Dept. of Justice, 913 F.3d 1179, 1187 (9th Cir. 2019) (quoting Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 343 (1983) and Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962) (internal quotation marks omitted)). A decision is arbitrary and capricious if the agency has entirely failed to consider an important aspect of the problem, [or] offered an explanation for its decision that runs counter to the evidence before the agency.

Id. (quoting Motor Vehicle, 463 U.S. at 43; Burlington Truck Lines, 271 U.S. at 168).7 The Respondents concede that the NRC failed to provide an explanation for the decision on review. Resp. Br. at 34 (acknowledging that in refusing Petitioners Commissions related evaluation of the amendment is contained in a Safety Evaluation dated July 26, 2006. 71 Fed. Reg. 46,945 (Aug. 15, 2006).

7 See also cases cited in Pets. Br. at 42: Encino Motorcars, LLC v. Navarro, 579 U.S. 211, 22 (2017) (citing FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009); Hatch v. FERC, 654 F.2d 825, 834 (D.C. Cir. 1981); Honeywell Intl v.

U.S. Nuclear Reg. Commn, 628 F.23d 568, 578 (D.C. Cir. 2010); and Guard, 753 F.2d at 1150.

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15 hearing request, the Denial Order did not expressly rebut Petitioners argument that the NRCs July 2023 Extension Decision (1-ER-009) had effectively amended PG&Es operating license for the Diablo Canyon Unit 1 reactor). See also Resp. Br. at 37 (conceding that the Denial Order did not expressly address Petitioners effective license amendment theory.).

Yet, the Respondents cite Gill for the proposition that the Denial Order was lawful because courts will uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned." Resp. Br. at 37 (quoting Gill, 913 F.3d at 1189 (quoting Motor Vehicle, 463 U.S. at 43)). But Petitioners respectfully submit that the circumstances here differ significantly from Gill. In that case, the agency had consistently pronounced the same position, [f]rom the outset. 913 F.3d at 1189. Here, the NRC did not hold the same position from the outset.

Indeed, the only consistency in the NRCs pronouncements is the consistency of its silence about the change in license condition imposed in the 2006 License Amendment. And unlike the consistent path charted in Gill, the NRCs path in this case has been sharply divergent: in 2006, the NRC charted a clear path of identifying Capsule B as the last capsule in a four-capsule surveillance program that must be withdrawn in 2009 as a condition for license extension. Then, in 2008, the agency veered off without explanation onto a different path where (a) the surveillance program for Unit 1 was suddenly described as a three-capsule Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 23 of 34

16 surveillance program that had already been completed and (b) withdrawal of Capsule B was suddenly described as a discretionary act related to license renewal and not the initial license term. Therefore, the complete lack of explanation in the Denial Order represents not less than ideal clarity, 913 F.3d at 1189, but the very clear culmination of a long history of NRC evading and obfuscating its duty to support and explain important and consequential changes in policy.

III.

THIS COURT HAS JURISDICTION TO REVIEW ALL OF THE UNLAWFUL NRC ACTIONS LEADING UP TO AND INCLUDING THE 2023 EXTENSION DECISION.

The Respondents contend that this Court has jurisdiction over only the 2023 Extension Decision, because Petitioners did not seek review of any of the other three Extension Decisions of 2008, 2010, and 2012 within the Hobbs Acts 60-day limit for filing for review. Resp. Br. at 41 (citing 28 U.S.C. § 2344). But their argument is inconsistent with courts interpretation of the jurisdictional limit of Hobbs Act.

At the outset, even if the Respondents were correct that Petitioners might only seek review of the 2023 Extension Decision, the scope of a hearing would include whether the NRC had unlawfully amended the 2006 license condition in 2023. Thus, Petitioners could lawfully seek the relief of imposing a deadline for removing Capsule B within the current operating license term.

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17 But Respondents err in urging that the Courts jurisdiction does not extend to the pre-2023 Extension Decisions. Their claim is inconsistent with the precedents of this Court holding that the Hobbs Acts 60-day limit is not triggered until the agency publishes a decision in the Federal Register or gives some other kind of effective notice. Public Citizen, Inc. v. Mineta, 343 F.3d 1159, 1167 (9th Cir. 2003) ([I]n resolving questions of timeliness... we have held that the public must be notified of regulations affecting the right of interested parties to seek judicial review before those rights may be implicated.). And as the Court further observed, the public generally does not know of agency actions and therefore cannot be expected to begin preparing an attack on them prior to such knowledge. Id. (quoting N.W. Envtl. Def. Ctr. v. Brennen, 958 F.2d 930, 934 (9th Cir. 1992)). Thus, for purposes of Hobbs Act compliance, an NRC order is not entered until the agency has given public notice of its action. Public Citizen, 43 F.3d at 1167 (citing Newell v. SEC, 812 F.2d 1259, 1260-61 (9th Cir. 1987)).

Here, the only decision related to the removal of Capsule B for which the NRC provided Hobbs Act-compliant notice was the Federal Register notice of the 2006 License Amendment. 71 Fed. Reg. at 46,945. Subsequently, each time the NRC extended the date for withdrawing Capsule B, the agency failed to give public notice that it was abandoning the conditions of the 2006 License Amendment establishing the Unit 1 surveillance program as a four-capsule Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 25 of 34

18 program and requiring withdrawal of Capsule B by 2009.8 As a consequence, the jurisdictional limit of the Hobbs Act was not triggered. Thus, the Respondents Hobbs Act argument that this Court lacks jurisdiction to reverse or vacate any of the pre-2023 orders extending the deadline for withdrawal of Capsule B. Resp. Br.

at 41 fails.9 8 Petitioners note that the NRC did post the documents on its Agencywide Data Access and Management System (ADAMS) -- the modern digital equivalent of the NRCs former library, the Public Document Room. But the Respondents have not suggested that such posting would constitute Hobbs Act-compliant notice.

Indeed, as the D.C. Circuit has recognized, such a suggestion would border[] on the frivolous. Public Citizen, Inc. v. Nuclear Regulatory Com., 901 F.2d 147 (D.C. Cir. 1990). As the court explained in Public Citizen:

[B]efore any litigant reasonably can be expected to present a petition for review of an agency rule, he first must be put on fair notice that the rule in question is applicable to him." Recreational Vehicle Industry Ass'n v. EPA, 653 F.2d 562, 568 (D.C. Cir. 1981). We do not see how the mere placement of a decision in an agency's public files, without any other announcement, can start the clock running for review, particularly in view of the Hobbs Act's requirement that agencies promptly give notice of their final orders by service or publication, 28 U.S.C. § 2344, and the Administrative Procedure Act's provision that no person may be adversely affected by a matter required to be published in the Federal Register and not so published, 5 U.S.C. § 552(a)(1). Potential petitioners cannot be expected to squirrel through the Commission's public document room in search of papers that might reflect final agency action.

Id., 901 F.2d at 153.

9 Cal. Assn of the Physically Handicapped, Inc. v. FCC,833 F.2d 1333 (9th Cir.

1987), cited in Resp. Br. at 41, does not hold otherwise. There, the agency had provided both public and personal notice of its decision. 833 F.2d at 1334. The Court denied jurisdiction because the petitioner had failed to petition for review within 60 days of the earlier notice. Id.

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19 Lacking a persuasive jurisdictional argument, Respondents also attempt to invent a new principle of administrative law allowing agencies to cumulatively amend their decisions without appropriate process. Resp. Br. at 42 (quoting Pet.

Br. at 7). But repetition does not confer legitimacy on an administrative decision unlawfully made without record, notice, or rationale. Hatch, 654 F.2d at 834-35 (holding unlawful a regulatory interpretation made [w]ithout any explicit recognition... that the standard has been changed, or any attempt to forthrightly distinguish or outrightly reject apparently inconsistent precedent.).

Finally, without citing legal authority, Respondents contend the Courts jurisdiction is limited to a binary determination of whether the discrete NRC action on review, i.e., the 2023 Extension Decision, either did or did not amend the Unit 1 license as it existed at the time of the request. Resp. Br. at 42. But the 2023 Order is not capable of a binary determination because it rests like a series of stair-steps on the three previous determinations that the 2006 deadline could be safely extended.10 In each of these stair-step decisions, the NRC performed a Safety Evaluation concluding that the additional delay was acceptable. See 1-10 Thus, in 2008, the NRC approved PG&Es proposal remove Capsule B in October of 2010 instead of January of 2009 (1-ER-032); in 2010, the NRC approved PG&Es proposal to remove Capsule B in 2012 instead of 2010 (1-ER-023); in 2012, the NRC approved PG&Es proposal to remove Capsule B in 2022 instead of 2012 (1-ER-017); and in 2023, the NRC approved PG&Es proposal to remove Capsule B in 20232 or 2025 instead of 2022 (1-ER-011; 2-ER-126).

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20 ER-032 (2008), 1-ER-025 (2010), 1-ER-019 (2012), and 1-ER-011 (2023). By connecting each extension to the previous deadline and by conducting a safety evaluation for each extension, the NRC demonstrated that each time it opened the

[previous] decision up anew, even though not explicitly. Public Citizen, 901 F.2d 150 (quoting Association of American Railroads v. ICC, 846 F.2d 1465, 1473 (D.C. Cir. 1988)). As a result, its renewed adherence is substantively reviewable. Id.

Accordingly, the Court has jurisdiction over all four of the NRC orders extending the 2009 deadline for removal of Capsule B from the Unit 1 pressure vessel.

IV.

OTHER REMEDIES WILL NOT ADDRESS THE SAME ISSUES OR PROVIDE PETITIONERS WITH THE SAME PROCEDURAL PROTECTIONS AS A HEARING ON THE EFFECTIVE AMENDMENT OF THE UNIT 1 OPERATING LICENSE.

Petitioners cannot obtain redress of their concerns about the adequacy of the surveillance program for the Unit 1 pressure vessel through an enforcement action or through the NRCs license renewal proceeding for Diablo Canyon, as suggested by the Respondents. Resp. Br. at 44. Petitioners have, indeed, already brought an enforcement petition to the NRC under 10 C.F.R. § 2.206. Petitioners have also sought to intervene in the license renewal proceeding. While each of these proceedings is significant in its own right, neither will deliver the relief requested in this case.

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21 First, the handling of enforcement proceedings under 10 C.F.R. § 2.206 is committed to the discretion of the agency, and Petitioners therefore have no right to be heard or to obtain appellate review. Safe Energy Coalition v. U.S. Nuclear Reg. Commn, 866 F.2d 1473, 1479 (D.C. Cir. 1989) (citing Heckler v. Chaney, 470 U.S. 821 (1985) (holding that NRCs denial of an enforcement petition for revocation or modification of an existing license constitutes an unreviewable exercise of agency discretion). See also Bellotti v. NRC, 725 F.2d 1380, 1381 (D.C.

Cir. 1983) (holding that affected members of the public lack standing to seek more stringent changes to an existing NRC license than those proposed by the agency).

In contrast, in a license amendment proceeding conducted under Section 189a of the Atomic Energy Act, Petitioners have the right to be heard on admissible contentions, including the right to a decision that considers their evidence and gives the licensee the burden of proof. Deukmejian, 751 F.2d at 1314; 10 C.F.R. § 2.352.

Second, Petitioners cannot obtain relief for their claim in the license extension proceeding regarding the future operation of Unit 1. Because Petitioners hearing request pertains to a license condition in PG&Es current operating license, it could not be addressed in the license renewal proceeding. And while Unit 1 is approaching its 2024 operating license expiration date, a future license extension may not be in place for years, under a timely renewal exemption Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 29 of 34

22 granted to PG&E by the NRC and affirmed by this court. See San Luis Obispo Mothers for Peace v. NRC, No.23-852, 2024 WL 1846133 (9th Cir. Apr. 29, 2024).11 In this regard, it is also important to note that NRC requirements governing pressure vessel surveillance during the initial license term are more rigorous than the requirements applicable to the license renewal term. The ASTM E industry standards for pressure vessel surveillance programs during the initial license term do not apply to the license renewal term, and NRC license renewal guidance contains only a recommendation for withdrawal of one capsule during the twenty-year license renewal term. See 1-ER-014.

In contrast to the 10 C.F.R. § 2.206 proceeding and the license renewal proceeding, a hearing on the four Extension Decisions that create back-door amendments to PG&Es operating license for Unit 1 will provide Petitioners with the only meaningful opportunity to engage with and hear from NRC on these issues.

11 Petitioners note that they intend to keep active their Ninth Circuit challenge to this decision with a forthcoming Petition for Rehearing or Rehearing En Banc.

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23 V.

REVERSAL AND VACATUR ARE NECESSARY AND APPROPRIATE REMEDIES FOR THE DENIAL ORDERS REFUSAL TO TREAT THE 2008, 2010, 2012 AND 2023 EXTENSION DECISIONS AS LICENSE AMENDMENTS.

As this Court has held, the traditional remedy for erroneous agency decisions is vacatur, unless equity demands that an invalid decision be left in place. Migrant Clinicians Network, 88 F.4th at 847 (quoting Pollinator Stewardship Council v. EPA, 806 F.3d 520, 523 (9th Cir. 2015). To determine whether an agencys action should remain in effect on remand, the Court applies a two-factor balancing test: We weigh the seriousness of the agencys errors against the disruptive consequences of an interim change that may itself be changed. Id., 88 F.4th at 848 (quoting Pollinator Stewardship Council, 806 F.3d at 523; Cal. Cmties. Against Toxics v. EPA, 688 F.3d 989, 992 (9th Cir. 2012)).

Here, a balancing of the two factors justifies vacatur. First, by extending the deadline for removing Capsule B by fifteen years after 2006, without even acknowledging the existence of the 2006 license condition or its imposition to justify the safety of a three-year extension of the Unit 1 operating license, the NRC committed a serious breach of its procedural and substantive obligations under the Atomic Energy Act. This error is so fundamental and substantial that it is exceedingly unlikely that the same [decision] would be adopted on remand. Natl Family Farm Coal. V. United States EPA, 960 F.3d 1120, 1145 (9th Cir. 2020) (quoting Pollinator Stewardship Council, 806 F.3d at 532).

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24 Second, vacating the aspect of the Denial Order refusing to give lawful effect to the 2006 License Amendment would not disrupt either PG&E or the NRC, because for decades both have expressed an intention to achieve the removal of Capsule B -- all while they kicked the can down the road. The only significant change effected by a vacatur decision by this Court would be to require them to make good on their stated original intention by engaging in a hearing to examine the safety significance of those decades of delay and what should be done to address it.

CONCLUSION For the foregoing reasons, the Court should rule that to the extent the Denial Order found that the 2023 Extension Decision and the three preceding Extension Decisions did not amend the Diablo Canyon Unit 1 operating license, the Denial Order was unlawful and must therefore be reversed and vacated. The Court should remand this proceeding to the NRC for a determination of whether Petitioners have met NRC requirements for a hearing on their contentions challenging the NRCs change to the 2009 deadline for removal of Capsule B from the Unit 1 pressure vessel. Petitioners request the Court to order the NRC to expedite this remanded proceeding in order to compensate for the passage of fifteen years since the NRC abandoned, without public notice, a license condition it had imposed in 2006 for protection of public health and safety.

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25 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 E. Ayres 2923 Foxhall Road, N.W.

Washington, D.C. 20016 202-744-6930 ayres@ayreslawgroup.com Counsel to Petitioner Friends of the Earth June 14, 2024 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 33 of 34

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

32(a)(7)(B)(i) 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 5,947 words.

2. The brief has been prepared in proportionally spaced typeface using Microsoft Word 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.

Respectfully submitted,

/s/ Diane Curran Diane Curran June 14, 2024 Case: 23-3884, 06/14/2024, DktEntry: 38.1, Page 34 of 34