ML14328A754

PPL Susquehanna'S Answer Opposing Douglas B. Ritter'S Request for Hearing Regarding the Indirect Transfer of Control of Susquehanna Licenses

ML14328A754
Person / Time
Site:	Susquehanna
Issue date:	11/24/2014
From:	Doris Lewis Pillsbury, Winthrop, Shaw, Pittman, LLP, Susquehanna
To:	NRC/OCM
SECY RAS
References
License Transfer, RAS 26948
Download: ML14328A754 (26)

Text

November 24, 2014 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Commission In the Matter of )

)

PPL Susquehanna, LLC ) Docket Nos. 50-387, 50-388,

) and 72-28 (Susquehanna Steam Electric Station, )

Units 1 and 2) )

PPL SUSQUEHANNAS ANSWER OPPOSING DOUGLAS B. RITTERS REQUEST FOR HEARING REGARDING THE INDIRECT TRANSFER OF CONTROL OF SUSQUEHANNA LICENSES I. INTRODUCTION Pursuant to 10 C.F.R. § 2.309(i), PPL Susquehanna, LLC (PPL Susquehanna) submits this Answer to the Request for a Public Hearing (Petition) filed by Douglas B. Ritter on October 27, 2014.1 The Petition relates to PPL Susquehannas pending application, submitted pursuant to 10 C.F.R. § 50.80, for an NRC order consenting to the proposed indirect transfer of control of PPL Susquehannas interests in the captioned licenses.2 As shown below, Mr. Ritter has not satisfied the NRCs requirements to intervene in this matter. He has neither established standing to intervene nor proffered an admissible contention. Therefore, under 10 C.F.R. § 2.309, the Petition must be denied in its entirety.

1 See Douglas B. Ritters Request for a Public Hearing on the Application for Approval of the Indirect License Transfer of Susquehanna Steam Electric Station, Units 1 and 2 Facility Operating License Nos. NPF-14 and NPF-22; NRC Docket Nos. 50-387, 50-388, and 72-28 (Oct. 24, 2014) (Petition). While dated October 24, 2014, the Petition was postmarked October 27, 2014, and received by the NRC on October 29, 2014.

2 Susquehanna Steam Electric Station, Request for Order Approving Indirect Transfer of Control and Conforming License Amendments (July 11, 2014) (ADAMS Accession No. ML14195A115 (Application) and ADAMS Accession No. ML14195A113 (Cover Letter).

II. BACKGROUND A. The Indirect License Transfer Application By Application dated July 11, 2014, PPL Susquehanna requested that the Commission consent via order to the indirect transfer of control, pursuant to Section 184 of the Atomic Energy Act of 1954, as amended, 10 C.F.R. § 50.80 and 10 C.F.R. § 72.50(a), of the operating licenses for Units 1 and 2 of Susquehanna Steam Electric Station (SSES), as well as the general license for the SSES Independent Spent Fuel Storage Installation (ISFSI). The indirect transfer of control would result from a series of transactions in which PPL Corporation, PPL Susquehannas ultimate parent, would spin off PPL Energy Supply, LLC (Energy Supply), which holds domestic competitive generation and ancillary assets, including PPL Susquehanna. The transactions would involve creation of, and changes to, intermediate holding companies, with Energy Supply eventually becoming a direct subsidiary of a new intermediate parent named Talen Energy Holdings, Inc. (Talen Holdings), which in turn will be a direct subsidiary of a new, publicly-owned ultimate parent, named Talen Energy Corporation (Talen Energy).3 PPL Susquehanna will be renamed Susquehanna Nuclear and will remain the licensee authorized to operate SSES and possess its unchanged ownership interest in SSES.4 After the transactions, the same nuclear organization will remain responsible for operation of SSES. The transactions will not require any change in the management or staffing of the nuclear organization, or any change 3

After the transactions, Talen Energy will have a portfolio of approximately 15,000 megawatts of diverse generating capacity with an enterprise value of approximately $9.5 billion; earnings before interest, taxes, depreciation and amortization (EBITDA) on the order of $1 billion per year; and credit facilities of approximately

$1.85 billion. See Application at 4-5, 13. It will be the third largest independent power producer in the United States. See June 10, 2014 Presentation Slides (ADAMS Accession No. ML14182A322) at 8.

4 Cover Letter at 2. PPL Susquehanna owns 90% each of SSES Units 1 and 2 and is the sole operator of these nuclear units. The remaining 10% of SSES Units 1 and 2 is owned by Allegheny Electric Cooperative, Inc.,

which is not involved in the transactions.

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in its procedures.5 PPL Susquehanna currently is, and will remain, a merchant generator.6 No changes will be made to the Units or their licensing bases as a result of the transactions.7 B. The Commissions Hearing Notices and Resulting Petition to Intervene On October 6, 2014, the NRC published a notice in the Federal Register regarding PPL Susquehannas Application.8 In the Notice, the Commission provided an opportunity to any person whose interest may be affected to request a hearing and file a petition for leave to intervene in the indirect transfer proceeding within 20 days from the date of publication of the Notice.9 The Notice stated that any such petitions should be filed in accordance with the Commissions rules of practice set forth in 10 C.F.R. Subpart C, and laid out the standards for pleading admissible contentions and establishing standing.10 The Notice also required any hearing request to be filed electronically and advised potential participants to contact the Office of the Secretary at least 10 days prior to the filing deadline to comply with the procedural requirements of the E-filing rule. 11 However, the Notice permitted participants having good cause for not submitting documents electronically to file an exemption request with an initial paper filing submitted by mail or expedited delivery service, and advised participants filing a document in this manner that they are responsible for serving the document on all participants.

Finally, noting that the portions of the Application contain proprietary information withheld from 5

Application at 10.

6 See Safety Evaluation by the Office of Nuclear Reactor Regulation, Proposed Transfer of Licenses to the Extent Held by PP&L Inc. to PPL Susquehanna, at 2 (June 6, 2000) (ADAMS Accession No. ML003720494).

7 Cover Letter at 1.

8 See Susquehanna Steam Electric Station, Units 1 and 2; Consideration of Approval of Transfer of Licenses and Conforming Amendments, 79 Fed. Reg. 60,192 (Oct. 6, 2014) (Notice).

9 Id.

10 Id. at 60,193-94.

11 Id. at 60,194-95.

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public disclosure,12 the Notice provided instructions on how potential parties may request access13 and directed that any such request should be submitted by October 16, 2014.14 On October 27, 2014, Mr. Ritter filed his Petition by First Class Mail.15 The Petition included a request for exemption from electronic filing requirements because of insufficient computer expertise to utilize the prescribed USNRC website(s) and internet facilities for the electronic filing process.16 There is no indication that Mr. Ritter made any attempt to contact the Office of the Secretary prior to the deadline for any assistance in complying with the electronic filing requirements, nor was the initial filing served on PPL Susquehanna. Mr. Ritter later filed the Petition electronically on November 4, 2014.

In order to obtain a hearing before the NRC, a petitioner must demonstrate that it has standing and submit at least one admissible contention.17 As discussed below, Mr. Ritter has done neither. Therefore, the Petition must be denied. Further, PPL Susquehanna respectfully submits that Mr. Ritter failed to establish any good cause for not filing his Petition electronically on October 27, 2014, when it was due, and therefore, that his Petition should be considered untimely.

III. MR. RITTER HAS NOT DEMONSTRATED STANDING Mr. Ritters Petition should be denied because he has failed to demonstrate standing.

Standing is not a mere legal technicality, but an essential element in determining whether there 12 Id. at 60,193, 13 Id. at 60,194-95.

14 Id. at 60,192.

15 As previously noted, although the Petition is dated October 24, 2014, the filing is post-marked October 27, 2014.

16 Petition at 16.

17 10 C.F.R. § 2.309(a), (d).

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is any legitimate role for the Commission in dealing with a particular grievance.18 Here, Mr.

Ritter seeks to rely on a presumption of standing based on proximity, but such a presumption does not apply in this type of indirect transfer proceeding where there is no change in the licensed owner or operator of the plant, and no change in the plant itself.

A. Standards for Demonstrating Standing To establish standing, the petitioner must plead [t]he nature of the requestors/petitioners right under the Act to be made a party to the proceeding[,] . . . [t]he nature and extent of [the petitioners] property, financial or other interest in the proceeding; and

[t]he possible effect of any decision or order that may be issued in the proceeding on the

[petitioners] interest.19 The burden of demonstrating standing rests with the petitioner.20 To determine whether a petitioners interest provides an adequate basis for intervention, the Commission has long looked for guidance to current judicial concepts of standing.21 To demonstrate such standing, a petitioner must show: (1) an actual or threatened, concrete and particularized injury that is (2) fairly traceable to the challenged action, and (3) likely to be redressed by a favorable decision.22 18 Westinghouse Electric Corp. (Nuclear Fuel Export License for Czech Republic - Temelin Nuclear Power Plants),

CLI-94-7, 39 N.R.C. 322, 331-32 (1994).

19 10 C.F.R. § 2.309(d)(1).

20 PPL Bell Bend, LLC (Bell Bend Nuclear Power Plant), CLI-10-7, 71 N.R.C. 133, 139 (2010); Commonwealth Edison Co. (Zion Nuclear Power Station, Units 1 and 2), CLI-00-5, 51 N.R.C. 90, 98 (2000).

21 USEC, Inc. (American Centrifuge Plant), CLI-05-11, 61 N.R.C. 309, 311 (2005); Quivira Mining Co. (Ambrosia Lake Facility, Grants, New Mexico), CLI-98-11, 48 N.R.C. 1, 5-6 (1998), affd sub nom. Envirocare of Utah, Inc.

v. NRC, 194 F.3d 72 (D.C. Cir. 1999) (citations omitted).

22 See Yankee Atomic Electric Co. (Yankee Nuclear Power Station), CLI-98-21, 48 N.R.C. 185, 195 (1998) (citing Steel Co. v. Citizens for a Better Envt, 523 U.S. 83, 103-04 (1998); Kelley v. Selin, 42 F.3d 1501, 1508 (6th Cir.),

cert. denied, 515 U.S. 1159 (1995).

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1. Injury-in-Fact For a facility with ongoing operations, a petitioners challenge must show that the approval will cause a distinct new harm or threat apart from the activities already licensed.23 Conclusory allegations about potential radiological harm from the facility in general, which are not tied to the specific [approval] at issue, are insufficient to establish standing.24 The petitioner must show that NRC approval of the Application will cause it to suffer a distinct and palpable injury.25 The asserted injury must be concrete and particularized,26 as opposed to being conjectural or hypothetical.27 It must be actual or imminent.28 When future harm is asserted, it must be threatened, certainly impending, and real and immediate.29

2. Causation The petitioner must show that the alleged injury is fairly traceable to the proposed activity.30 While the petitioner need not demonstrate that the injury flows directly from the challenged action, it must show that the chain of causation is plausible.31 The applicable 23 See International Uranium (USA) Corp. (Source Material Amendment License No. SUA-1358), CLI-01-18, 54 N.R.C. 27, 31 (2001), citing Commonwealth Edison Co. (Zion Nuclear Power Station, Units 1 and 2), CLI-99-4, 49 N.R.C. 185, 192 (1999).

24 International Uranium (USA) Corp. (White Mesa Uranium Mill), CLI-01-21, 54 N.R.C. 247, 251 (2001), citing Zion, CLI-99-4, 49 N.R.C. at 192.

25 Shieldalloy Metallurgical Corp. (Cambridge, Ohio Facility), CLI-99-12, 49 N.R.C. 347, 353 (1999).

26 International Uranium, CLI-01-18, 54 N.R.C. at 249.

27 Sequoyah Fuels Corp. (Gore, Oklahoma Site), CLI-94-12, 40 N.R.C. 64, 72 (1994).

28 Lujan v. Defenders of Wildlife, 504 U.S.555, 560 (1992).

29 International Uranium (USA) Corp. (White Mesa Uranium Mill), LBP-01-15, 53 N.R.C. 344, 349, affd, CLI 21, 54 N.R.C. 247 (2001); Cleveland Electric Illuminating Co. (Perry Nuclear Power Plant, Unit 1), LBP-92-4, 35 N.R.C. 114, 121 (1992 , revd and remanded on other grounds, CLI-93-21, 38 N.R.C. 87 (1993) (citing Los Angeles v. Lyons, 461 U.S. 95, 102 (1983); Linda R. S. v. Richard D., 410 U.S. 614, 617 (1973); Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298 (1979) (quoting Pennsylvania v. West Virginia, 262 U.S. 553, 593 (1923).

30 Alaska Department of Transportation and Public Facilities (Confirmatory Order Modifying License), CLI-04-26, 60 N.R.C. 399,405, reconsideration denied, CLI-04-38, 60 N.R.C. 652 (2004); Sequoyah Fuels, CLI-94-12, 40 N.R.C. at 71, 75.

31 U.S. Army Installation Command (Schofield Barracks, Oahu, Hawaii, and Pohakuloa Training Area, Island of Hawaii, Hawaii), LBP-10-4, 71 N.R.C. 216, 228 (2010), citing Sequoyah Fuels, CLI-94-12, 40 N.R.C. at 75.

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inquiry is whether a cognizable interest of the petitioner might be adversely affected by one of the possible outcomes of the proceeding.32

3. Redressability The petitioner is required to show that its actual or threatened injuries can be cured by some action of the tribunal.33 In addition, it must be likely, as opposed to merely speculative that the injury will be redressed by a favorable decision.34 If the NRC cannot take action that would redress the injury being claimed by the petitioner, the petitioner lacks standing to request a hearing.35 Pursuant to NRC case law, a petitioner may, in some instances, be presumed to have standing based on his or her geographic proximity to a facility or source of radioactivity.36 Proximity standing rests on the presumption that an accident associated with the nuclear facility could adversely affect the health and safety of people working or living within a certain distance of that facility.37 While the NRC has applied a presumption of standing in initial reactor operating license proceedings for individuals who live within 50 miles of a plant, it has held that a stricter standard applies to proceedings involving approvals lacking a clear potential for offsite consequences.38 32 Nuclear Engineering Co. (Sheffield, Illinois Low-Level Radioactive Waste Disposal Site), ALAB-473, 7 N.R.C.

737, 743 (1978).

33 Sequoyah Fuels Corp. (Gore, Oklahoma Site Decommissioning), CLI-01-2, 53 N.R.C. 9, 14 (2001).

34 Calvert Cliffs Nuclear 3 Nuclear Project, LLC (Calvert Cliffs Nuclear Plant, Unit 3), CLI-09-20, 70 N.R.C. 911, 916 n.22 (2009) (quoting Lujan, 504 U.S. at 560-61). See also Sequoyah Fuels, CLI-94-12, 40 N.R.C. at 76 (same).

35 Westinghouse, CLI-94-7, 39 N.R.C. at 332.

36 AmerGen Energy Co., LLC (Three Mile Island Nuclear Station, Unit 1), CLI-05-25, 62 N.R.C. 572, 574 (2005);

Exelon Generation Co., LLC (Peach Bottom Atomic Power Station, Units 2 and 3), CLI-05-26, 62 N.R.C. 577, 580 (2005).

37 Three Mile Island, CLI-05-25, 62 N.R.C. at 574; Peach Bottom, CLI-05-26, 62 N.R.C. at 580.

38 U.S. Department of Energy (Plutonium Export License), CLI-04-17, 59 N.R.C. 357, 365 (2004), citing Florida Power & Light Co. (St. Lucie, Units 1 and 2), CLI-89-21, 30 N.R.C. 325, 329-30 (1989).

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Such proceedings include license transfer cases, where the Commission determine[s] on a case-by-case basis whether the proximity presumption should apply, considering the obvious potential for offsite [radiological] consequences, or lack thereof, from the application at issue, and specifically taking into account the nature of the proposed action and the significance of the radioactive source.39 The Commission has made clear that the petitioner has a burden to show that there is an obvious potential for offsite consequences.40 B. Mr. Ritter Has Failed to Meet These Standards Mr. Ritters claims of standing to intervene rest upon the proximity presumption discussed above, but mere proximity alone does not establish standing in this type of indirect license transfer proceeding. While Mr. Ritter cites a number of cases for the proposition that he should be granted proximity standing, none of those cases involved an indirect transfer of control.41 In the Palisades case, involving an application for indirect transfer of control resulting from a proposed spinoff of nuclear units (and thus directly on point), the Commission held that proximity alone does not establish standing.42 As the Commission explained,

[The licensees] proposed license transfer is an indirect one in that it does not involve transfer of either ownership or operating rights to the subject facilities.

Nor does it entail any changes in the facilities themselves or in their operation.

Given these facts, we can see no obvious potential for offsite consequences stemming from this indirect license transfer. And without such potential consequences, proximity-based standing cannot be demonstrated. Indeed, to date, we have never granted proximity-based standing to a petitioner in an indirect 39 Consumers Energy Co. (Big Rock Point Independent Spent Fuel Storage Installation), CLI-07-19, 65 N.R.C. 423, 426 (quoting Peach Bottom, CLI-05-26, 62 N.R.C. at 580-81), reconsideration denied, CLI-07-21, 65 N.R.C.

519, reconsideration dismissed, CLI-07-22, 65 N.R.C. 525 (2007).

40 Entergy Nuclear Operations, Inc. (Palisades Nuclear Plant), CLI-08-19, 68 N.R.C. 251, 258 (2008); Peach Bottom, CLI-05-26, 62 N.R.C. at 581.

41 Petition at 7.

42 Palisades, CLI-08-19, 68 N.R.C. at 260-261, 268-69.

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license transfer. Petitioners Group offers no reason for us to depart from line of adjudicatory precedent. Nor can we think of any.43 Thus, in the Palisades indirect transfer case, the Commission denied standing to (1) an organization with a member who worked at the nuclear facility, lived within 10 miles of it, and engaged in activities that took him within 5 miles of the facility approximately 10 hours1.157407e-4 days <br />0.00278 hours <br />1.653439e-5 weeks <br />3.805e-6 months <br /> per week,44 and (2) a group of organizations, one of which had offices within three miles of the facility. 45 Similarly, in the Millstone indirect transfer case, involving the merger of a corporate parent, the Commission denied proximity standing to organizations that claimed to have members living within 5-10 miles of the plant.46 The transfer application at issue here proposed no change in the Millstone licenses, no change in the Millstone facility, no change in its operation, no change in its personnel, and no change in its financing. It is far from obvious how [the]

corporate restructuring would affect petitioners interests.47 It is true that the Commission has previously granted proximity standing in direct license transfer cases where the petitioners lived within close proximity of the facility at issue.48 However, the facts in those cases were dispositively different from those presented here. As the Commission has explained, each of those cases involved the transfer of both a 100% ownership 43 Id. at 269 (emphasis added).

44 Id. at 260.

45 Id. at 269-70.

46 Northeast Nuclear Energy Co. (Millstone Nuclear Power Station, Units 1, 2, and 3), CLI-00-18, 52 N.R.C. 129 (2000).

47 Id. at 132-133. See also Peach Bottom, CLI-05-26, 62 N.R.C. at 581-82 (rejecting proximity standing in a proceeding involving a corporate merger and the consequent transfers of 50 percent non-operating interests in nuclear units, because the proposed license transfer will result in no changes to the physical plant itself, its operating procedures, design basis accident analysis, management, or personnel and as a result, the risks associated with the transfer were de minimis and therefore justif[ied] no proximity standing at all.).

48 Vermont Yankee Nuclear Power Corp. (Vermont Yankee Nuclear Power Station), CLI-00-20, 52 N.R.C. 151, 163 (2000); Power Authority of New York (James A. FitzPatrick Nuclear Power Plant), CLI-00-22, 52 N.R.C. 266, 293 (2000); Oyster Creek, CLI-00-6, 51 N.R.C. at 194.

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interest in the plant and the operating authority for the planta kind of transfer implicating more significant safety issues than are present here.49 Therefore, it is clear that Mr. Ritters claim for proximity standing must be rejected. As the Application indicates, the transfer will not involve any changes to the principal officers, managers, or staff of PPL Susquehanna, or to the day-to-day management and operation of the units.50 Importantly, the proposed indirect transfer of the licenses involves no physical or operational changes to SSES. Mr. Ritter has not disputed these facts or provided any information that would distinguish this case from Palisades (supra note 40).

While Mr. Ritters sole argument is that he meets proximity standing requirements, 51 he alludes to cases referring to injury to the health and safety as [t]he asserted harm52 and stating that [a] minor exposure to radiation, even one within regulatory limits, is sufficient to state an injury in fact. 53 Mr. Ritter, however, makes no claim that the indirect transfer of control will expose him to any additional radiation or injure his health and safety. Moreover, even if these references were construed as claims of injury by Mr. Ritter, they would not suffice because such vague claims fail to establish injury in fact, causation, or redressability.54 Injury-in-Fact - For future harm (as would be the case here), an injury in fact must be threatened, certainly impending, and real and immediate.55 Here there will be no change to plant operations at SSES or its status as a merchant generator, and therefore, no evidence that any new harm would be threatened, impending or real and immediate.

49 Peach Bottom, CLI-05-26, 62 N.R.C. at 583.

50 Cover Letter at 1.

51 Petition at 7.

52 Id.

53 Id.

54 White Mesa Uranium Mill, CLI-01-21, 54 N.R.C. at 251; Zion, CLI-99-4, 49 N.R.C. at 192.

55 See supra note 29.

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Causation - Mr. Ritter does not provide any link between the perceived harm and the indirect license transfer in his standing analysis. Mr. Ritter cites no reason why the proposed indirect transfer of licenses that will not affect the day-to-day operations of SSES would cause a risk of injury to his health and safety. In the Palisades case, the Commission dismissed a similarly superficial assertion of threatened injury:

[T]heassertion of threatened injury - that the proposed transfer may have a negative impact on the safe operations of [the plant] - is both cursory and factually unsupported.56 The same is true here.

Redressability - Mr. Ritter does not discuss how the NRC could redress his injury in his standing analysis. Again, there is to be no change in the day-to-day operations of SSES or its status as a merchant generator. It is unclear how the action he seeks would impact the likelihood of his injury, and therefore his traditional standing analysis fails on this ground as well.

IV. MR. RITTER HAS NOT SUBMITTED ANY ADMISSIBLE CONTENTIONS Mr. Ritters Petition should also be denied because he has proffered no admissible contention. As explained below, none of Mr. Ritters three proposed Contentions meet the applicable standards for the admission of contentions.

The Commissions contention admissibility rules are strict by design.57 The protestant must make a minimal showing that material facts are in dispute, thereby demonstrating that an inquiry in depth is appropriate.58 56 Palisades, CLI-08-19, 68 N.R.C. at 265.

57 Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3), CLI-01-24, 54 N.R.C.

349, 358 (2001) (citing Duke Energy Corp. (Oconee Nuclear Station, Units 1, 2, and 3), CLI-99-11, 49 N.R.C.

328, 334 (1999)).

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A petition must set forth with particularity the contentions sought to be raised.59 Petitioners must provide a clear statement as to the basis for the contentions and [submit]

supporting information and references to specific documents and sources that establish the validity of the contention.60 Specifically, for each contention, the petition must:

(i) Provide a specific statement of the issue of law or fact to be raised or controverted; (ii) Provide a brief explanation of the basis for the contention; (iii) Demonstrate that the issue raised in the contention is within the scope of the proceeding; (iv) Demonstrate that the issue raised in the contention is material to the findings the NRC must make to support the action that is involved in the proceeding; (v) Provide a concise statement of the alleged facts or expert opinions which support the requestors/petitioners position on the issue and on which the petitioner intends to rely at hearing, together with references to the specific sources and documents on which the requestor/petitioner intends to rely to support its position on the issue; and (vi) [P]rovide sufficient information to show that a genuine dispute exists with the applicant/licensee on a material issue of law or fact.61 Contentions that do not satisfy each of these six requirements must be rejected.62 The petitioner bears the burden of proffering contentions that meet the NRCs pleading requirements.63 58 54 Fed. Reg. 33,168, 33,171 (Aug. 11, 1989) (quoting Conn. Bankers Assn v. Bd. of Governors, 627 F.2d 245, 251 (D.C. Cir. 1980)).

59 10 C.F.R. § 2.309(f)(1).

60 USEC, Inc. (American Centrifuge Plant), CLI-06-9, 63 N.R.C. 433, 437 (2006) (citing Arizona Public Service Co.

(Palo Verde Nuclear Generating Station, Units 1, 2 and 3), CLI-91-12, 34 N.R.C. 149, 155-56 (1991)).

61 10 C.F.R. § 2.309(f)(1).

62 Progress Energy Carolinas, Inc. (Shearon Harris Nuclear Power Plant, Units 2 and 3), CLI-09-8, 69 N.R.C. 317, 324 (2009).

63 See Baltimore Gas & Electric Co. (Calvert Cliffs Nuclear Power Plant, Units 1 and 2), CLI-98-14, 48 N.R.C. 39, 41 (1998).

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A. Contention 1 Is Inadmissible Contention 1 - which alleges that Decommissioning Funding Assurance will be adversely affected by the proposed Indirect License Transfers, and the future Talen Energy Corporations decommissioning savings levels at Susquehanna will be inadequate64 - is inadmissible because it is an impermissible challenge to NRC regulations and therefore outside the scope of the proceeding, thus failing to satisfy 10 C.F.R. § 2.309(f)(1)(iii). Contention 1 also fails to raise a material issue or a genuine dispute of material law or fact, in contravention of 10 C.F.R. § 2.309(f)(1)(iv) and (vi). In addition, Contention 1 fails to provide a concise statement of the alleged facts or expert opinions that support its position, thus failing to meet the admissibility criteria in 10 C.F.R. § 2.309(f)(1)(v).

1. Contention 1 is An Impermissible Challenge to NRC Regulations and Outside the Scope of This Proceeding Any contention that challenges an NRC rule is outside the scope of the proceeding because no rule or regulation of the Commission . . . is subject to attack . . . in any adjudicatory proceeding.65 Petitioners may not demand an adjudicatory hearing to attack generic NRC requirements or regulations, or to express generalized grievances about NRC policies.66 Contentions seeking to impose requirements in addition to those contained in Commission regulations impermissibly challenge those regulations.67 Contention 1 amounts to an impermissible challenge to the NRCs decommissioning funding requirements in 10 C.F.R. § 50.75. 10 C.F.R. § 50.75(c) establishes the minimum 64 Petition at 8.

65 See 10 C.F.R. § 2.335(a); see also Entergy Nuclear Generation Co. & Entergy Nuclear Operations, Inc.

(Vermont Yankee Nuclear Power Station), CLI-07-3, 65 N.R.C. 13, 18 n.15 (2007), review denied, Mass. v. NRC, 522 F.3d 115 (1st Cir. 2008).

66 Oconee, CLI-99-11, 49 N.R.C. at 334.

67 Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1), CLI-87-12, 26 N.R.C. 383, 394-95 (1987).

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decommissioning funding assurance that a reactor licensee must provide. 10 C.F.R. § 50.75(e)(1) allows a licensee to provide assurance by prepayment of funds into a trust, and provides that the licensee may take credit for projected earnings on the prepaid funds using up to a 2 percent annual real rate of return up to the time of permanent termination of operations and pro rata during a period of immediate dismantlement.68 PPL Susquehannas Application includes information demonstrating compliance with these requirements. Its Application (1) calculates the minimum funding requirement required by 10 C.F.R. § 50.75(c); and (2) shows that the amount in trust for each of the SSES units, with 2 percent real earnings credited as allowed by the NRC rules, exceeds PPL Susquehannas share of the minimum funding amount by a considerable margin (more than $140 million for Unit 1 and more than $260 million for Unit 2). 69 The Commission has held that a showing of compliance with 10 C.F.R. § 50.75 demonstrates sufficient assurance of decommissioning funding.70 Because Mr. Ritter has not disputed the information in the Application demonstrating compliance with 10 C.F.R. § 50.75, his Contention seems to imply, impermissibly, that some greater assurance is required. The NRC rules do not allow a challenge to the adequacy of the generic projected costs calculated under the NRC rules, nor to the acceptability of prepayment.71 In short, the funding amounts reflected in the Application were calculated using the generic formulas codified at 10 C.F.R. § 50.75(c). Mr. Ritter has not disputed that PPL 68 See 10 C.F.R. § 50.75(e)(1)(i); see also Vermont Yankee, CLI-00-20, 52 N.R.C. at 165.

69 Application at 13-14. The Application also demonstrates that the SSES decommissioning trusts contain funds sufficient to fund the cost of decommissioning the SSES ISFSI, as determined by a site-specific cost estimate. Id.

at 14.

70 North Atlantic Energy Services Corp. (Seabrook Station, Unit 1), CLI-99-6, 49 N.R.C. 201, 217 (1999).

71 Id. at 217at n.8. Vermont Yankee, CLI-00-20, 52 N.R.C. at 166; FitzPatrick, CLI-00-22, 52 N.R.C. at 303 n.35; Consolidated Edison Co. of New York (Indian Point, Units 1 and 2), CLI-01-19, 54 N.R.C. 109, 142-44 (2001).

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Susquehanna provided this requisite level of assurance through the prepayment method. Any contention that PPL Susquehanna should provide more assurance than that required by 10 C.F.R.

§ 50.75 is an impermissible attack on NRC regulations and outside the scope of this proceeding.

The Contention should therefore be dismissed.

2. Contention 1 Is Not Supported by Any Basis or Information Demonstrating a Genuine Material Dispute with the Application Even if the Contention were not barred as an impermissible challenge to the NRC rules, it would still be inadmissible because it is not supported by any basis, alleged facts or expert opinion that supports Mr. Ritters position, or information demonstrating a genuine material dispute with the Application. As the Commission has held, [p]repayment is in fact the strongest and most reliable of the various decommissioning funding devices set out in section 50.75(e)(1), and provides sufficient assurance for [a licensees] share of decommissioning costs.72 Mr. Ritter provides no information calling into question the compliance of PPL Susquehannas prepayment with the NRC rules. Contention 1 therefore fails to satisfy 10 C.F.R.

§ 2.309(f)(1)(ii), (v), and (vi).

While Contention 1 challenges the adequacy of decommissioning funding assurance, Mr.

Ritters discussion of the admissibility standards for Contention 1 is, for the most part, unrelated to decommissioning funding. Instead, it is mainly a cut and paste of claims relating to operating funds in Contention 2. These claims are irrelevant to Contention 1. The only statement under Contention 1 related to decommissioning is the assertion that PPLs trust funds are on shaky ground followed by quotations from PPL Corporations Annual Reports related to Asset Retirement Obligations (ARO).73 This information is also irrelevant and fails to 72 Seabrook, CLI-99-6, 49 N.R.C. at 218.

73 Petition at 9-10.

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demonstrate any genuine material dispute with the Application. ARO are calculated amounts that take into account the amount and timing of future cash flows and uncertainties in the amount and timing of decommissioning to determine the liability that should be recognized for accounting purposes under FASB-74 They are thus not readily comparable to the decommissioning funding amounts established in the NRC rules. Moreover, the ARO amounts to which Mr. Ritter refers are substantially less than the decommissioning funding amount calculated under the NRC rules, and substantially less than the amount of funds currently held in PPL Susquehannas decommissioning trust. Thus, the amounts recognized for accounting purposes do not raise any genuine dispute either with the NRCs funding requirement or with the sufficiency of the decommissioning funds held in PPL Susquehannas decommissioning trusts.

In sum, the quotes from the PPL Corporations Annual Reports provide no support for Mr. Ritters assertion the SSES trust funds are on shaky ground. Mr. Ritter thus provides no basis for the contention, no alleged facts or expert opinion supporting his position, and no information demonstrating a genuine material dispute with the Application.

B. Contention 2 Is Inadmissible Contention 2 - which alleges that [c]ontinuing operation of both Susquehanna units will be adversely affected by the proposed indirect License Transfers, and the future Talen Energy Corporations operating fund levels will be adversely impacted by the proposed license transfers75 - is inadmissible because it is not supported by any basis, alleged facts or expert opinion that supports Mr. Ritters position, or information demonstrating a genuine material 74 Financial Accounting Standards Board (FASB), Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (June 2001), available at http://www.fasb.org/pdf/fas143.pdf .

75 Petition at 11.

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dispute with the Application. It thus fails to satisfy the admissibility standards 10 C.F.R. § 2.309(f)(1)(ii), (v) and (vi).

1. Contention 2 Lacks Basis, and Does Not Raise a Material Issue or a Genuine Dispute of Material Law or Fact Contention 2 fundamentally lacks any basis, is unsupported and fails to demonstrate any genuine material dispute with the Application. At the outset, although the Contention states that

[c]ontinuing operation . . . will be adversely affected,76 there is no explanation anywhere in the Petition why operations will be affected. As the Application makes clear, after the transactions, the same nuclear organization will remain responsible for operation of SSES. The transactions will not require any change in the management or staffing of the nuclear organization, or any change in its procedures. 77 PPL Susquehanna (albeit renamed) will remain the licensed operator; no changes will be made to the units or their licensing bases as a result of the transactions. 78 Mr. Ritter does not dispute any of this information.

Regarding the alleged impact on operating fund levels, Mr. Ritter does not identify any error in the projected income statements in the Application. As required by 10 C.F.R. § 50.33(f)(2), the projected income statements in the Application show that projected revenues from the sale of energy, capacity, and ancillary services cover the estimated operating costs with considerable margin (even under sensitivity analyses that assume a ten percent reduction in expected capacity factor or projected prices).79 Mr. Ritter does assert that the publicly available information is severely limited80 but this assertion does not raise any genuine dispute with the analysis or justify granting the hearing request. While portions of the projected income 76 Id.

77 Application at 10.

78 Cover Letter at 1.

79 Application at 11-12 and Attachment 4.

80 Petition at 11.

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statement were withheld from public disclosure as proprietary, the Notice in this proceeding provided a procedure whereby Mr. Ritter could have requested and obtained this proprietary information.81 Mr. Ritter simply chose to ignore this procedure to avail himself of the information. In short, any inability to understand and address the projected income statement in the Application was of Mr. Ritters own making.

Further, none of Mr. Ritters other statements raise any genuine dispute with PPL Susquehannas financial qualifications, either before or after the transactions. Regarding the requirement in 10 C.F.R. § 2.309(f)(1)(ii) to provide a basis for the Contention, Mr. Ritter merely states that information outlined in the Petition raises sufficient questions to merit an NRC examination of the issue. This vague statement, alleging nothing more than that the NRC should review PPL Susquehannas financial qualifications, provides no basis for questioning demonstration of financial qualifications in the Application. Under the Rules of Practice, a statement that simply alleges that some matter ought to be considered does not provide a sufficient basis for a contention.82 Regarding the requirement in 10 C.F.R. § 2.309(f)(1)(v) to provide a concise statement of alleged facts or opinion that support Mr. Ritters positions, Mr. Ritter relies solely on the existence of NRC requests for additional information (RAI),83 but this does not suffice to satisfy the NRC pleading requirements. As the Commission has held, To satisfy the Commission's contention rule petitioners must do more than rest on [the] mere existence of RAIs as a basis for their contention. RAIs generally indicate[] nothing more than that the staff requested further information and analysis from the licensee. The NRC's issuance of RAIs does not alone establish 81 79 Fed. Reg. at 60,195-96.

82 Sacramento Municipal Utility District (Rancho Seco Nuclear Generating Station), LBP-93-23, 38 N.R.C. 200, 246 (1993), review denied, CLI-94-2, 39 N.R.C. 91 (1994).

83 Petition at 12.

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deficiencies in the application, or that the NRC staff will go on to find any of the applicant's clarifications, justifications, or other responses to be unsatisfactory.84 Further, the RAI to which Mr. Ritter refers merely asks for supporting information and does not contain any suggestion that the projected income statement in the Application is incorrect.85 Similarly, Mr. Ritters vague references to capital improvements needed for BWR Mark II containments and potential Fukushima-related capital improvements similarly fail to establish any genuine material dispute with the Application. Mr. Ritter provides no information indicating that such expenditures have been ignored. The modifications that the Commission has ordered in response to the Fukushima accident are required to be completed in the same period covered by the projected income statement.86 While capital projects are reflected in the projected income statement through depreciation, the projected income statements show significant net income, with the annual net income of each unit ranging from a minimum of nearly $50 million up to over $100 million (under base case assumptions) during this period. PPL Susquehannas response to the NRCs RAIs also includes a cash flow statement where depreciation is replaced with planned construction expenditures, again showing large positive cash flow for each unit in 84 Oconee, CLI-99-11, 49 N.R.C. at 336 (internal citations and quotations omitted).

85 Susquehanna Steam Electric Station, Units 1 and 2 - Request For Additional Information RE: Request For Order Approving Indirect Transfer of Control and Conforming License Amendments (Oct. 9, 2014) (ADAMS Accession No. ML14268A531). PPL Susquehanna responded to these RAI on October 24, 2014. Susquehanna Steam Electric Station, Units 1 and 2 - Response to Request For Additional Information RE: Request For Order Approving Indirect Transfer of Control, PLA-7245 (Oct. 24, 2014) (October 24, 2014 RAI Response).

(ADAMS Accession No. ML14311A672).

86 Full implementation of the measures for mitigation of strategies for beyond design-basis events must be completed no later than December 31, 2016. EA-12-049, Order Modifying Licenses with Regard to Requirements for Mitigation Strategies for Beyond Design Basis External Events (Effective Immediately) (Mar.

12, 2012) at 8 (ADAMS Accession No. ML12056A045). The modifications that the Commission has required to install a severe accident capable wetwell venting system must be made no later than June 30, 2018, and the modifications to install a severe accident capable drywell venting system must be installed no later than June 30,2019. EA-13-109, Order Modifying Licenses with Regard to Reliable Hardened Containment Vents Capable of Operation Under Severe Accident Conditions (Effective Immediately) (June 6, 2013) at 11 (ADAMS Accession No. ML13143A321). The modifications that the Commission has required to install spent fuel pool instrumentation must be installed no later than December 31, 2016. EA-12-051, Order Modifying Licenses with Regard to Reliable Spent Fuel Pool Instrumentation (Effective Immediately) (Mar. 12, 2012) at 9 (ADAMS Accession No. ML12054A679).

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each year.87 Finally, as described in the Application, Talen Energy will provide a $205 million parent support agreement to provide added assurance that PPL Susquehanna will have adequate funds available to meet its operating expenses.88 Mr. Ritter does not provide one whit of information suggesting that the projected income, cash flow, and additional assurances are insufficient to meet Fukushima-related requirements.

Finally, Mr. Ritters assertion that the NRCs assessment should include ISFSI maintenance and operation costs89 raises no genuine dispute with the Application. The operation and maintenance costs (O&M) in the projected income statement include O&M for maintaining the SSES ISFSI,90 and Mr. Ritter does not provide any information suggesting otherwise (or that ISFSI O&M is material in comparison to the projected income statement).91 Mr. Ritters further assertion that the NRC assessment should consider funding for the maintenance and operation of the ISFSI between retirement and the remediation of SSES92 is an impermissible challenge to the NRC rules. 10 C.F.R. § 50.54(bb) does not require a licensee to provide financial assurance for irradiated fuel management following permanent cessation of operations until five years before expiration of the license. 10 C.F.R. § 50.80(b)(1) requires a license transfer application to include as much of the information on financial qualifications as 87 Oct. 24, 2014 RAI Response, supra note 85, at Table 1-5.

88 Application at 12.

89 Petition at 12.

90 The SSES budget includes certain other expenditures related to the ISFSI, such as the procurement of canisters, movement of spent fuel to the ISFSI, and construction of storage bunkers, which are offset by expected reimbursement from the federal government owing to the U.S. Department of Energys (DOE) failure to begin accepting spent fuel as required by the Standard Contract between DOE and PPL Susquehanna. Currently, these expenses are recovered under a settlement agreement with DOE running through 2016. Expenses beyond 2016 are expected to be recovered either under an extension of that agreement or through further claims arising from DOEs breach of the Standard Contract.

91 It should be noted that the NRC rules do not require a separate demonstration of financial qualifications for transfer of a generally-licensed ISFSI (such as the SSES ISFSI). Pursuant to 10 C.F.R. § 72.13(c), 10 C.F.R. § 72.50(b) is inapplicable to a generally-licensed ISFSI.

92 Petition at 12.

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would be required [by 10 C.F.R. §§ 50.33 and 50.34] if the application were for an initial license. There is no requirement anywhere in 10 C.F.R. §§ 50.33 and 50.34 to provide assurance for post-retirement spent fuel management in an application for an initial license, and therefore no such requirement in a license transfer application.93 Further, as previously discussed, SSESs decommissioning trust funds contains funds with credited amounts well in excess of the amounts needed to meet the minimum amount prescribed by NRC regulations, and with NRC permission, this excess could be used for spent fuel management. As the Commission has previously held, a licensees prepayment of considerably more than the decommissioning funding amount prescribe by NRC regulation renders concerns related to station closure inconsequential. 94 C. Contention 3 Is Inadmissible Contention 3 - which alleges that [t]he proposed license transfers fail to demonstrate that Susquehanna has capability to store Classes B and C low level radioactive waste (LLRW) throughout its entire operating lifetime95 - is inadmissible because it is outside the scope of the proceeding and an impermissible challenge to NRC regulations, thus failing to satisfy the requirements of 10 C.F.R. § 2.309(f)(1)(iii). Contention 3 also fails to raise a material issue or a genuine dispute of material law or fact, in contravention of 10 C.F.R. § 2.309(f)(1)(iv) and (vi).

93 Whether there will be any significant post-retirement costs for spent fuel management is also very speculative.

The operating licenses for SSES Units 1 and 2 do not expire until 2042 and 2044, respectively. Further, Mr.

Ritters statement that an ISFSI and retired plant do not produce income ignores PPL Susquehannas ability to recover from the U.S. Department of Energy (DOE) damages resulting from DOEs failure to begin accepting spent fuel for disposal in 1998, as required by its contract with PPL Susquehanna. For these reasons as well, Mr.

Ritters claims fail to demonstrate any genuine material dispute.

94 Seabrook, CLI-99-6, 49 N.R.C. at 218.

95 Petition at 13.

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1. Contention 3 is Outside the Scope of the Proceeding Like Contention 1, Contention 3 is outside the scope of the proceeding. The scope of a license transfer proceeding is limited to the findings defined in 10 C.F.R. § 50.80(c), which relate to the qualifications of the transferee and consistency of the transfer with applicable, law, regulations and orders. A license transfer proceeding is not a forum for a full review of all aspects of current plant operation.96 The Commission has previously stated that the adequacies of a plants ongoing safety-related programs are [o]perational issues [that] will remain the same whether or not the license is transferred. The Commission has indicated that a license transfer hearing is not the proper forum in which to conduct a full-scale health-and-safety review of a plant.97 Storage of radioactive waste is an operational issue outside the scope of license transfer proceeding. Management of Class B and C radioactive waste will need to be addressed regardless of who holds the licenses for SSES, and is unaffected by the indirect transfer of control. In short, Mr. Ritter is complaining about pre-existing conditions that are unconnected to the license transfer. Such complaints are outside the scope of this proceeding and should be rejected.98 The Contention cites to a Calvert Cliffs case for the proposition that a petitioner could proffer an application-specific contention suitable for litigation on the subject of onsite storage of low level radioactive waste.99 However, that case involved an application for a combined 96 FitzPatrick, CLI-00-22, 52 N.R.C. at 311.

97 Id.

98 See Portland General Electric Co. (Trojan Nuclear Plant), ALAB-534, 9 N.R.C. 287, 289 n.6 (1979); Northeast Nuclear Energy Co., 48 N.R.C. at 279.

99 Petition at 14, citing Calvert Cliffs Nuclear Project, LLC (Calvert Cliffs Nuclear Power Plant, Unit 3), LBP-09-4, 69 N.R.C. 170, 223 (2009).

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license for a new nuclear power plant, and thus has no bearing on whether such an operational issue may be raised in a license transfer proceeding.

2. Contention 3 Fails to Raise a Material Issue or Genuine Dispute of Material Law or Fact Even if the Contention is deemed within the scope of the proceeding (which it is not), it fails to raise a material issue or genuine dispute of material law or fact pursuant to 10 C.F.R. § 2.309(f)(1)(vi) and (vi). The entire basis for the Contentions concern regarding the storage capacity for Class B and Class C radioactive waste is a statement made in PPL Corporations 10-K Report filed with the Securities and Exchange Commission in 2008.100 That statement, which noted the closure of the Barnwell facility to out-of-compact waste, has been superseded by events. In October 2011, Waste Control Specialists (WCS), operator of the Texas Compact Disposal Facility, entered into an agreement with Utilities Service Alliance, Inc. to dispose of Class A, B, and C low-level radioactive waste.101 PPL Susquehanna is a participating company within the Utilities Service Alliance, and therefore will have access to these WCS services.102 The Petition provides no information identifying any current inability to dispose of Class B and C waste, and the past concern about the lack of storage at Barnwell is now moot. In short, even if Contention 3 were within the scope of this proceeding, which it is not, it would be inadmissible because it is not supported by any information demonstrating a genuine material dispute.

100 Petition at 13.

101 See Waste Control Specialist and Utilities Service Alliance, available at http://www.power-eng.com/articles/npi/print/volume-5/issue-3/nucleus/waste-control-specialists-and-utilities-service-alliance.html .

102 Id.

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V. MR. RITTERS PETITION IS UNTIMELY Mr. Ritters Petition should also be rejected as untimely. The NRC rules and the Notice require that the Petition be filed electronically within 20 days of the Notice.103 While the NRC rules allow a petitioner to seek an exemption from this requirement submitted with an initial paper filing,104 PPL Susquehanna respectfully submits that the timeliness of an initial submission filed in this manner should depend on the merits of the exemption request. Otherwise, any petitioner may simply ignore the initial electronic filing requirements with impunity.

Here, Mr. Ritter has provided no good cause for his inability to file the Petition electronically on the date that is was due. His claim of insufficient computer expertise to utilize the prescribed USNRC website(s) and internet facilities for the electronic filing process105 is unsupported by any facts, and when made by a former engineer at SSES, stretches credulity.

Moreover, the Petition and exemption request provides no indication that Mr. Ritter made any attempt to contact the Office of the Secretary ten days prior to the filing deadline (as the Notice required106) to obtain a digital certificate, set up an electronic docket, and obtain whatever assistance he may have needed to comply with the electronic filing rule. That Mr. Ritter was subsequently perfectly capable of filing his Petition electronically on November 4, 2014, more than a week after it was due, demonstrates that he simply made an insufficient attempt to comply with the NRC rules. This does not constitute a timely filing, and consequently Mr. Ritters Petition should be considered and denied as untimely.

103 79 Fed. Reg. at 60,193, 60,194-95; 10 C.F.R. § 2.302.

104 79 Fed. Reg. at 60,195; 10 C.F.R. § 2.302(g)(4).

105 Petition at 16.

106 79 Fed. Reg. at 60,194.

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VI. CONCLUSION For all of the reasons discussed above, Mr. Ritters Hearing Request should be denied.

Respectfully Submitted,

/Signed electronically by David R. Lewis/

David R. Lewis PILLSBURY WINTHROP SHAW PITTMAN LLP 2300 N Street, NW Washington, DC 20037-1128 Tel. (202) 663-8474 Counsel for PPL Susquehanna Dated: November 24, 2014 25

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Commission In the Matter of )

)

PPL Susquehanna, LLC ) Docket Nos. 50-387, 50-388,

) and 72-28 (Susquehanna Steam Electric Station, )

Units 1 and 2) )

CERTIFICATE OF SERVICE I hereby certify that the foregoing PPL Susquehannas Answer Opposing Douglas B.

Ritters Request for Hearing Regarding the Indirect Transfer of Control of Susquehanna Licenses has been served through the E-Filing system on the participants in the above-captioned proceeding, this 24th day of November, 2014.

/Signed electronically by David R. Lewis/

David R. Lewis 26