ML12152A080

Final Respondents Brief

ML12152A080
Person / Time
Site:	Vermont Yankee File:NorthStar Vermont Yankee icon.png
Issue date:	03/19/2012
From:	Arbab J, Stephen Burns, Cordes J, Croston S, Moreno I NRC/OGC, US Dept of Justice, Environment & Natural Resources Div, US Dept of Justice, Office of the Attorney General
To:	US Federal Judiciary, District Court for the District of Columbia
Croston, Sean
References
USCA Case #11-1168, 11-1168, 136243
Download: ML12152A080 (78)

Text

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 1 of 78 ORAL ARGUMENT SCHEDULED FOR MAY 9, 2012 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Nos. 11-1168 & 11-1177, consolidated VERMONT DEPARTMENT OF PUBLIC SERVICE; NEW ENGLAND COALITION, Petitioners, v.

U.S. NUCLEAR REGULATORY COMMISSION; UNITED STATES OF AMERICA, Federal Respondents.

ON PETITION FOR REVIEW OF A FINAL ORDER OF THE U.S. NUCLEAR REGULATORY COMMISSION FINAL BRIEF FOR THE FEDERAL RESPONDENTS IGNACIA S. MORENO STEPHEN G. BURNS Assistant Attorney General General Counsel JOHN E. ARBAB JOHN F. CORDES, JR.

Attorney Solicitor Appellate Section United States Department of Justice SEAN D. CROSTON Environment & Natural Resources Attorney Division Office of the General Counsel P.O. Box 23795, U.S. Nuclear Regulatory L'Enfant Plaza Station Commission Washington, D.C. 20026-3795 Washington, D.C. 20555 (202) 514-4046 (301) 415-2585 March 19, 2012

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 2 of 78 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT THE STATE OF VERMONT )

DEPARTMENT OF PUBLIC SERVICE )

and the NEW ENGLAND COALITION )

)

Petitioners, )

)

v. ) Nos. 11-1168

) and 11-1177 UNITED STATES NUCLEAR )

REGULATORY COMMISSION and )

THE UNITED STATES OF AMERICA )

)

Respondents. )

)

CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES Counsel for the United States Nuclear Regulatory Commission (NRC) certifies the following with respect to the parties, rulings, and related cases.

A. Parties The Vermont Department of Public Service is the petitioner in Case No.

11-1168, and the New England Coalition is the petitioner in Case No. 11-1177.

NRC and the United States of America are the respondents. Entergy Nuclear Operations, Inc. and Entergy Nuclear Vermont Yankee, LLC (Entergy) are i

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 3 of 78 Intervenors in both cases, which have been consolidated. Riverkeeper, Inc.,

Scenic Hudson, Inc. and New York State are amici on the side of petitioners, while Energy Future Coalition is an amicus on the side of respondents.

B. Rulings Under Review Petitioners seek review of the NRCs final order granting Renewed Operating Facility License No. DPR-28 for the Vermont Yankee Nuclear Power Station on March 21, 2011. See 76 Fed. Reg. 17,162 (March 28, 2011).

C. Related Cases The NRC license renewal order on review was never previously before this Court or any other court.

Respectfully submitted,

/s/___________________________

Sean D. Croston Attorney Office of the General Counsel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 March 19, 2012 ii

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 4 of 78 TABLE OF CONTENTS CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES ............. i TABLE OF CONTENTS ................................................................................ iii TABLE OF AUTHORITIES........................................................................... iv GLOSSARY .................................................................................................. iv JURISDICTIONAL STATEMENT ................................................................. 1 ISSUES PRESENTED ................................................................................... 2 STATEMENT OF THE CASE ........................................................................ 3 STATUTORY AND REGULATORY BACKGROUND ..................................... 6 STATEMENT OF THE FACTS .................................................................... 13

SUMMARY

OF ARGUMENT ...................................................................... 17 ARGUMENT ............................................................................................... 20 Standard of Review ..................................................................................... 20 I. The Petitions for Review must be Dismissed because Petitioners Failed to properly Exhaust their Administrative Remedies before Seeking Judicial Review. ............... 21 II. Petitioners have not Controverted NRCs longstanding Position with respect to Satisfying CWA Requirements through § 402 NPDES Permits ........................... 33 CONCLUSION ............................................................................................ 40 CERTIFICATE OF LENGTH OF BRIEF....................................................... 42 CERTIFICATE OF SERVICE ....................................................................... 43 ADDENDUM OF STATUTES AND REGULATIONS ................................... 45 iii

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 5 of 78 TABLE OF AUTHORITIES (Authorities upon which we chiefly rely are marked with asterisks.)

Cases 21st Century Telesis Joint Venture v. FCC, 318 F.3d 192 (D.C. Cir. 2003) .......... 30 Alaska Dep't of Envtl. Conservation v. EPA, 540 U.S. 461 (2004) ....................... 35 Alcoa Power Generating, Inc. v. FERC, 643 F.3d 963 (D.C. Cir. 2011) .............. 21 Artis v. Bernanke, 630 F.3d 1031 (D.C. Cir. 2011) .......................................... 20

• Assn of Flight Attendants-CWA, AFL-CIO v. Chao, 493 F.3d 155 (D.C. Cir. 2007) ..................................................................................22, 23 Baptist Mem. Hosp. - Golden Triangle v. Sebelius, 566 F.3d 226 (D.C. Cir. 2009) ....................................................................................... 39 Benoit v. USDA, 608 F.3d 17 (D.C. Cir. 2010) ............................................... 23 Boivin v. U.S. Airways, Inc., 446 F.3d 148 (D.C. Cir. 2006) ............................. 22 Cape Cod Hosp. v. Sebelius, 630 F.3d 203 (D.C. Cir. 2011) .............................. 23 Caribbean Shippers Assn v. Surf. Transp. Bd., 145 F.3d 1362 (D.C. Cir. 1998) .. 26 City of Santa Clarita v. DOI, 249 Fed. Appx. 502 (9th Cir. 2007) ..................... 29 City of Tacoma v. FERC, 460 F.3d 53 (D.C. Cir. 2006) ................................... 34 Communication Workers of America v. AT&T, 40 F.3d 426 (D.C. Cir. 1994) ..... 24 Eldred v. Reno, 239 F.3d 372 (D.C. Cir. 2001) ............................................... 39

• Entergy Nuclear Vermont Yankee, LLC, 68 NRC 763 (2008) ......................15, 17

• Entergy Nuclear Vermont Yankee, LLC, CLI-07-16, 65 NRC 371 (2007)............................................................................................ 15, 17, 29

• Entergy Nuclear Vermont Yankee, LLC, CLI-10-17, 72 NRC__,

2010 WL 2753783 (July 8, 2010)..........................................................15, 17

• Entergy Nuclear Vermont Yankee, LLC, CLI-11-02, 73 NRC __,

2011 WL 864757 (March 10, 2011) .................................................. 5, 15, 17

• Entergy Nuclear Vermont Yankee, LLC, LBP-06-20, 64 NRC 131 (2006)..................................................................................... 3, 4, 13-15, 31

• Entergy Nuclear Vermont Yankee, LLC, Memorandum and Order (October 30, 2006) ........................................................................... 5, 16, 30 Entergy Servs. v. FERC, 319 F.3d 536 (D.C. Cir. 2003) ................................... 39 Gage v. AEC, 479 F.2d 1214 (D.C. Cir. 1973)................................................ 22 iv

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 6 of 78 Hettinga v. United States, 560 F.3d 498 (D.C. Cir. 2009) ................................. 24 Hydro Resources, Inc., 50 NRC 3 (1999) ......................................................... 29 Jackson County v. FERC, 589 F.3d 1284 (D.C. Cir. 2009) ............................... 38 Malladi Drugs & Pharms., Ltd. v. Tandy, 552 F.3d 885 (D.C. Cir. 2009) ........... 24 Massachusetts v. United States, 522 F.3d 115 (1st Cir. 2008) ............................. 11 McCarthy v. Madigan, 503 U.S. 140 (1992) .................................................... 23 McKinley v. Bd. of Governors of the Fed. Reserve Sys., 647 F.3d 331 (D.C. Cir. 2011) ....................................................................................... 37 Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41 (1938) ............................... 21 N.J. Envtl. Fedn v. NRC, 645 F.3d 220 (3d Cir. 2011) .................................... 10 Nat'l Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644 (2007)........... 38 Nat'l Petrochemical & Refiners Ass'n v. EPA, 630 F.3d 145 (D.C. Cir. 2010) ...... 25 Natural Resources Defense Council v. NRC, 666 F.2d 595 (D.C. Cir. 1981) ........ 28 Natural Resources Defense Council, Inc. v. Kempthorne, 525 F.Supp.2d 115 (D.D.C. 2007) .......................................................................................... 29 Natural Resources Defense Council, Inc. v. NRC, 680 F.2d 810 (D.C. Cir. 1982) ... 1 New York v. NRC, 589 F.3d 551 (2d Cir. 2009) .............................................. 11 North Carolina v. FERC, 112 F.3d 1175 (D.C. Cir. 1997)................................ 32 Nuclear Info. & Res. Serv. v. NRC, 509 F.3d 562 (D.C. Cir. 2007) ...................... 1 Pacific Gas & Elec. Co., 68 NRC 509 (2008) .................................................... 29 PDK Labs., Inc. v. U.S. DEA, 362 F.3d 786 (D.C. Cir. 2004) .......................... 38

• Private Fuel Storage, LBP-98-7, 47 NRC 142 (1998) .................................. 9, 29 Qwest Corp. v. FCC, 482 F.3d 471 (D.C. Cir. 2007) ........................................ 24 S.D. Warren Co. v. Maine Bd. of Envtl. Prot., 547 U.S. 370 (2006) .................... 36

• Sims v. Apfel, 530 U.S. 103 (2000). .........................................................20, 23 South Texas Project Nuclear Operating Company, CLI-10-16, 71 NRC__,

2010 WL 2505256 (June 17, 2010) .............................................................. 9 United States v. L.A. Tucker Truck Lines, 344 U.S. 33 (1952) ............................ 23 USEC, Inc., 63 NRC 433 (2006) ................................................................... 29 Vermont Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, 435 U.S. 519 (1978)....................................................................................................... 35 Wisconsin Pub. Power, Inc. v. FERC, 493 F.3d 239 (D.C. Cir. 2007) ................ 35

• Woodford v. Ngo, 548 U.S. 81 (2006).......................................................24, 27 v

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 7 of 78 Statutes 28 U.S.C. § 2342 ........................................................................................... 1 28 U.S.C. § 2344 ..................................................................................... 1, 22 3 V.S.A. § 814 ............................................................................................. 14

• 33 U.S.C. § 1341.............................. 2, 4-7, 12-17, 19-21, 27, 28, 30, 32-38, 40

• 33 U.S.C. § 1342....................................... 2, 7, 8, 12, 16, 19, 20, 32, 34-38, 40 42 U.S.C. § 2133 ....................................................................................10, 13

• 42 U.S.C. § 2239............................................................................... 1, 21, 31 42 U.S.C. § 2241 ......................................................................................... 31 42 U.S.C. § 4332 ......................................................................................... 11

• 5 U.S.C. § 706 ......................................................................................20, 37 Regulations 10 C.F.R. § 2.1212 ...................................................................................... 27

• 10 C.F.R. § 2.309 .....................................................................8, 9, 17, 26, 27

• 10 C.F.R. § 2.341 ............................................................................ 10, 22, 27 10 C.F.R. § 51.20 ........................................................................................ 11

• 10 C.F.R. § 51.45 ........................................................................ 8, 14, 29, 30 10 C.F.R. § 51.71 .......................................................................................... 9 10 C.F.R. § 54.23 ........................................................................................ 14 10 C.F.R. § 54.27 ........................................................................................ 10 10 C.F.R. § 54.31 ........................................................................................ 10 Other Authorities

• 1 NUREG-1437, Generic Environmental Impact Statement for License Renewal of Nuclear Plants (1996) ................................................ 12, 19, 35 Federal Register Notices 61 Fed. Reg. 28,467 (June 5, 1996) .............................................................. 12 71 Fed. Reg. 15,220 (Mar. 27, 2006) .......................................................... 3, 8 71 Fed. Reg. 76,706 (Dec. 21, 2006) .......................................................12, 16 72 Fed. Reg. 44,186 (Aug. 7, 2007) .........................................................12, 17 76 Fed. Reg. 17,162 (Mar. 28, 2011) ........................................................ 5, 17 vi

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 8 of 78 GLOSSARY AEC Atomic Energy Commission Board Atomic Safety and Licensing Board (NRC)

CWA Clean Water Act Entergy Entergy Nuclear Operations, Inc. and Entergy Nuclear Vermont Yankee, LLC GEIS Generic Environmental Impact Statement NEC New England Coalition NEPA National Environmental Policy Act NPDES National Pollutant Discharge Elimination System NRC Nuclear Regulatory Commission SEIS Supplemental Environmental Impact Statement VANR Vermont Agency of Natural Resources Vermont Vermont Department of Public Service Vermont Yankee Vermont Yankee Nuclear Power Station vii

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 9 of 78 JURISDICTIONAL STATEMENT This Court has jurisdiction under the Hobbs Act, 28 U.S.C. § 2341 et seq., to review the Nuclear Regulatory Commissions (NRC) order granting a renewed operating license for the Vermont Yankee Nuclear Power Station (Vermont Yankee). Under 28 U.S.C. § 2342, the courts of appeals have exclusive jurisdiction over agency actions made reviewable by 42 U.S.C.

§ 2239(b), and § 2239(b) in turn makes agency actions specified in § 2239(a) reviewable. These actions include final orders entered in proceedings to grant a license. See, e.g., Nuclear Info. & Res. Serv. v. NRC, 509 F.3d 562 (D.C. Cir.

2007); Natural Resources Defense Council, Inc. v. NRC, 680 F.2d 810, 815 (D.C.

Cir. 1982).

The Hobbs Act allows parties 60 days from a reviewable final order to file a petition for review. See 28 U.S.C. § 2344. Petitioners filed for review in this Court on May 20, 201160 days after NRCs March 21, 2011 final order granting Vermont Yankees renewed operating license. Their petitions were therefore timely under the Hobbs Act.

1

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 10 of 78 ISSUES PRESENTED

1. Exhaustion of Administrative Remedies. NRCs hearing tribunal, the Atomic Safety and Licensing Board, received no admissible contention from petitioners or anyone else raising a Clean Water Act (CWA) challenge to the issuance of Vermont Yankees renewed operating license. Nor did petitioners or anyone else raise a CWA issue of any kind before the Commission. Thus, neither the Board nor the Commission addressed the merits of petitioners CWA concerns in the license-renewal proceeding. Were petitioners required to exhaust available administrative remedies at NRC regarding their CWA grievance before filing suit on that ground in this Court?

2. Satisfaction of Clean Water Act Requirements. Petitioners opening brief argues that Vermont Yankee lacks a water-quality certification required by § 401 of the CWA. Vermont Yankee has a valid NPDES permit under § 402 of the CWA, and NRCs Generic Environmental Impact Statement for License Renewal (GEIS) states that the water-quality requirements of §§ 401 and 402 of the CWA are often coextensive. Petitioners nowhere have challenged the statement in the GEIS or argued that it does not apply in this particular case. If 2

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 11 of 78 this Court reaches the merits, did NRC act lawfully, with respect to the CWA, in renewing Vermont Yankees operating license?

STATEMENT OF THE CASE Vermont Yankee Nuclear Power Station (Vermont Yankee) is located five miles south of Brattleboro, Vermont. In 1972, the Atomic Energy Commission issued Vermont Yankees initial operating license, which would expire after 40 years (in March 2012).

Therefore, on January 25, 2006, Entergy submitted an application for a 20-year renewal of Vermont Yankees operating license, and NRC published a notice of an opportunity for an NRC hearing shortly thereafter. See 71 Fed.

Reg. 15,220 (Mar. 27, 2006), Record Appendix (RA) 46. The notice required any person who wished to participate as a party to file a petition for leave to intervene, stating specific contentions that the petitioner sought to litigate at a hearing before the NRCs Atomic Safety and Licensing Board (Board). Id. at RA47.

The Vermont Department of Public Service (Vermont) and the New England Coalition (NEC), among others, brought several challenges to Entergys license renewal application before the Board. Only NEC 3

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 12 of 78 Contention 1 discussed water-quality issues of any kind. See Entergy Nuclear Vermont Yankee, LLC, LBP-06-20, 64 NRC 131 (2006)(Board decision), RA302.

As originally submitted, Contention 1 alleged that the environmental report submitted as part of Entergys license application did not properly consider the environmental effects of Vermont Yankees continued thermal discharges into the Connecticut River under the National Environmental Policy Act (NEPA). See RA324. Entergy opposed Contention 1, arguing that it should not be admitted for an evidentiary hearing.

In its reply, NEC added a claim that Entergy had not complied with

§ 401 of the Clean Water Act (CWA), 33 U.S.C. § 1341, because it had not obtained a fresh § 401 water quality certification in connection with license renewal. See id.; NEC's Reply to Entergy and NRC Staff Answers to Petition for Leave to Intervene, Request for Hearing, and Contentions at 6 & 14 (June 30, 2006),

RA69, RA77. Entergy successfully moved to strike petitioners § 401 argumentraised for the first time in NECs replyas untimely and outside the scope of NECs original NEPA contention. See Entergy Nuclear Vermont Yankee, LLC, LBP-06-20, 64 NRC 131, 182 (2006), RA328.

When NEC subsequently filed a motion to amend its NEPA-based Contention 1 to include the § 401 issue, Entergy asserted that Whether a 4

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 13 of 78

§ 401 certification is required is simply irrelevant to NECs contention that Entergy failed to assess impacts to water quality. Further, 401 certification is addressed in another section of the application (ER § 9.2.1), which NEC has never challenged. See Entergys Answer to New England Coalitions Late Contention at 7 (August 17, 2006), RA241.

Although the Board found that NECs § 401 claim was timely, it accepted Entergys argument that § 401 compliance was irrelevant to the NEPA bases underlying NECs Contention 1, and thus denied NECs motion to amend Contention 1 to add that claim. See Entergy Nuclear Vermont Yankee, LLC, Memorandum and Order (October 30, 2006) (unpublished Board order),

RA 435-436. Neither NEC nor Vermont sought Commission review of the Boards procedural decision or attempted to submit a separate, late-filed contention alleging a § 401 violation.

Almost five years later, after resolving other contentions filed by NEC and accepted for review by the Board, NRC concluded its adjudicatory consideration of Entergys application and granted a renewed operating license for Vermont Yankee. See 76 Fed. Reg. 17,162 (March 28, 2011), RA903; Entergy Nuclear Vermont Yankee, LLC, CLI-11-02, 73 NRC __, 2011 WL 864757 (March 10, 2011), RA880.

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USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 14 of 78 Vermont and NEC then filed suit in this Courtmaking none of the arguments they had litigated to a conclusion on the merits at NRC, and claiming only that NRC erred by granting the license without requiring Entergy to first obtain another CWA § 401 certification.

STATUTORY AND REGULATORY BACKGROUND

1. Clean Water Act Like most nuclear power plants, Vermont Yankee sits near a large body of water, the Connecticut River. Plant operators remove water from the river, use it to cool the reactor, and then return it to the river. Vermont Yankee must ensure that this discharge complies with applicable water-quality laws. In particular, the CWA is a source of many such water-quality requirements.

Under § 401(a)(1) of the CWA, applicants for federal licenses or permits to conduct any activity that may result in any discharge to navigable waters must provide the licensing agency . . . a certification from the State in which the discharge . . . will originate. 33 U.S.C. § 1341(a). That state certification must determine that an applicants proposed discharge will comply with the relevant provisions of CWA §§ 301, 302, 303 (which is also incorporated by reference in § 301), 306, and 307, as well as with the states own water-quality standards and any other appropriate water quality requirements, which 6

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 15 of 78 essentially become binding license conditions for the federal licensee. See 33 U.S.C. §§ 1341(a), (d). In addition, § 401(a)(1) declares that [n]o license

. . . shall be granted until the certification required by this section has been obtained. Id.

Section 401 also contains certain notification requirements. See 33 U.S.C. §§ 1341(b). In addition, it provides that, unless a state objects on specified grounds, a water-quality certification obtained with respect to the construction of any facility shall fulfill the requirements of this subsection with respect to certification in connection with any other Federal license or permit required for the operation of such facility. 33 U.S.C. § 1341(a)(3).

A separate provision of the CWA, § 402, authorizes EPA to issue discharge permits under the National Pollutant Discharge Elimination System (NPDES). 33 U.S.C. § 1342(a). NPDES permits issued under § 402 impose limits, conditions, and monitoring requirements on effluent discharges.

Like § 401 certifications, NPDES permits require compliance with CWA §§ 301, 302, 303 (through incorporation by reference in § 301), 306, and 307, and relevant state water-quality standards (also through incorporation in § 301). See 33 U.S.C. §§ 1342(a)(1), (b)(1).

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USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 16 of 78 Section 402 also has provisions allowing states to take over NPDES permitting authority from EPA, as Vermont did in 1974. See 33 U.S.C.

§ 1342(b). Unlike § 401 certifications, which have no statutory expiration dates, state-issued NPDES permits are issued for fixed terms not to exceed five years. 33 U.S.C. § 1342(b)(1)(B).

2. NRCs Intervention and Hearing Regulations When NRC docketed Entergys application for Vermont Yankees renewed operating license, the agency indicated that its general standards for intervention at 10 C.F.R. § 2.309 would apply to any subsequent hearing. See 71 Fed. Reg. 15,221 (Mar. 27, 2006), RA47. Those standards allow prospective intervenors sixty days to file challenges to an application, known in NRC parlance as contentions, that must include a specific statement of the issue of law or fact to be raised or controverted, and a brief explanation of the bases of each contention. Id., citing § 2.309(f).

NRC regulations require that a license applicants environmental report (which accompanies an application) contain a discussion of all applicable permits, including . . . water pollution limitations or requirements. 10 C.F.R.

§ 51.45(d). Likewise, NRC regulations mandate that the agencys draft environmental impact statement for a renewed operating license must list the 8

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 17 of 78 permits and approvals required for renewal. See 10 C.F.R. § 51.71(c). And NRCs intervention standards provide that errors or omissions in an applicants environmental report or the agencys draft or final environmental impact statement are appropriate grounds for a contention. See 10 C.F.R.

§ 2.309(f)(2); Private Fuel Storage, LBP-98-7, 47 NRC 142, 197-98 (1998)

(admitting for hearing properly-filed contentions under 10 C.F.R. § 51.45(d) regarding proof of compliance with the CWA).

In addition, NRCs procedural regulations provide intervenors the opportunity to submit late-filed contentions or to reopen closed records under certain limited circumstances. See 10 C.F.R. §§ 2.309(c), (f)(2).

If the presiding officer at a licensing hearing (generally a three-judge panel of the NRCs Atomic Safety and Licensing Board) rejects some contentions as inadmissible but admits others, no immediate appeal lies as such, but at the end of the Board hearing process a party may challenge the merits result on the admitted contentions and the earlier, interlocutory, decision not to admit certain contentions. See, e.g., South Texas Project Nuclear Operating Company, CLI-10-16, 71 NRC__, 2010 WL 2505256 (June 17, 2010).

NRCs regulations specifically provide a vehicle for such appealsa petition 9

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 18 of 78 for review under 10 C.F.R. § 2.341, which must be filed within fifteen days of the Boards final merits decision.

All petitions for review must contain summaries of the matters of fact or law at issue, and must show how these matters were previously raised before the presiding officer at the hearing or could not have been raised.

10 C.F.R. § 2.341(b)(2). As noted above, petitions for review may also challenge decisions by a presiding officer not to admit particular contentions for hearing. Finally, the same regulation mandates that parties must file a petition for Commission review before seeking judicial review of an agency action. 10 C.F.R. § 2.341(b)(1).

3. NRC License-Renewal Reviews Under 42 U.S.C. § 2133(c), a commercial nuclear power plant may be initially licensed for a term not to exceed 40 years. A license may be renewed upon expiration. Id.; 10 C.F.R. § 54.31(b). Requirements and standards for license renewal are contained in 10 C.F.R. Part 54. As the Third Circuit recently explained, the license renewal process focuses on aging issues. See N.J.

Envtl. Fedn v. NRC, 645 F.3d 220, 224 (3d Cir. 2011). NRC offers an opportunity for anyone whose interest may be affected by renewal of the operating license to request a hearing. See 10 C.F.R. § 54.27.

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USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 19 of 78 In addition, under the National Environmental Policy Act (NEPA), each federal agency must prepare an Environmental Impact Statement (EIS) before taking a major action that significantly affects the quality of the human environment. 42 U.S.C. § 4332(2)(C). The renewal of a nuclear power plants operating license requires an EIS under NRC regulations. See 10 C.F.R.

§ 51.20(b)(2).

The EIS required for license renewal at nuclear power plants covers both generic and plant-specific environmental impacts. As the Second Circuit explained, Category I impacts are common to all nuclear power plants and do not require plant-specific mitigation, while Category II impacts require site-by-site evaluation. Since Category I impacts are common to each license renewal, the NRC has produced a Generic Environmental Impact Statement (GEIS) that applies to these common issues. See New York v. NRC, 589 F.3d 551, 553 (2d Cir. 2009), citing Massachusetts v. United States, 522 F.3d 115, 120 (1st Cir. 2008).

The GEIS, combined with a site-specific EIS, constitutes the complete EIS required by NEPA for the major federal action of a plant's license renewal. Id. NRC issued the GEIS for license renewal in 1996, after a full 11

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 20 of 78 notice-and-comment process. See Environmental Review for Renewal of Nuclear Power Plant Operating Licenses, 61 Fed. Reg. 28,467 (June 5, 1996).

As relevant to this case, the 1996 GEIS says that [u]nder Section 401 of the CWA (33 USC 1341), an applicant for a federal license or permit (the utility in this case) must obtain a state water quality certification. See 1 NUREG-1437, Generic Environmental Impact Statement for License Renewal of Nuclear Plants at § 4.2.1.1 (1996), RA43. The GEIS adds that issuance of an NPDES permit by a state water quality agency [under Section 402] implies certification under Section 401. Id. Vermont submitted a lengthy set of comments on the draft GEIS, but did not address the above statements.

In December 2006, NRC also published a draft supplemental (site-specific) environmental impact statement (SEIS) for Vermont Yankee and requested comments. See 71 Fed. Reg. 76,706 (Dec. 21, 2006), RA449.

Appendix E of the draft SEIS listed the permits and approvals that NRC believed were required for license renewal. RA472. The list included a § 402 (NPDES) permit, but not a new § 401 certification. Id. Likewise, NRCs final SEIS did not identify any need for a new § 401 certification. See 72 Fed. Reg.

44,186 (Aug. 7, 2007), RA484, RA766. Petitioners did not comment on these lists.

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USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 21 of 78 STATEMENT OF THE FACTS In December 1967, NRCs predecessor, the Atomic Energy Commission (AEC), issued an initial construction permit for Vermont Yankee. See RA35.

By its terms, that initial permit expired on December 31, 1971. See Disputed Record Appendix (DRA) 4. In April 1970, during Vermont Yankees construction, the CWA became law. Four months later, Vermont Yankees owners applied for a § 401 certification, which Vermont granted in October 1970. See Letter from John A. Ritsher to AEC (Nov. 13, 1970) (enclosing Vermont water-quality certificate), DRA1-2. In December 1971, the AEC renewed the construction permit for one year. See DRA3-4. Soon thereafter, the facilitys construction ended, and the AEC then issued an initial operating license for Vermont Yankee on March 21, 1972.

Under the Atomic Energy Act, the maximum term for an operating license is forty years from the authorization to commence operations. 42 U.S.C. § 2133(c). Because Vermont Yankees original forty-year operating license was set to expire on March 21, 2012, Entergy applied for a renewed operating license in 2006. See generally Entergy Nuclear Vermont Yankee, LLC, LBP-06-20, 64 NRC 131 (2006), RA302.

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USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 22 of 78 As required by NRC regulations, Entergys environmental report which accompanied its applicationassessed water-quality compliance under the heading Water Quality (401) Certification.1 See Vermont Yankee Nuclear Power Station License Renewal Application, App. E, Applicant's Environmental Report, 9-1 (Jan. 25, 2006), RA45. Entergy claimed that Vermont Yankees original § 401 certification from 1970 and its possession of a current and effective NPDES permit issued by [Vermont]2 indicated its continued compliance with applicable CWA standards. Id.

During the renewal proceedings, Vermont and NEC, among others, brought several challenges to Entergys license renewal application before NRCs adjudicatory hearing tribunal, the Atomic Safety and Licensing Board.

The Board admitted for hearing several contentions filed by Vermont and NEC, but found others inadmissible. See Entergy Nuclear Vermont Yankee, LLC, 64 NRC 131 (2006), RA302.3 Among the contentions found inadmissible in 1

See 10 C.F.R. §§ 51.45(d) & 54.23.

2 Vermont last issued a new NPDES permit for Vermont Yankee in 2001, but that permit has remained valid under Vermonts timely-renewal statute because Vermont Yankee applied for a new permit in 2006, which has not yet been acted on. See 3 V.S.A. § 814 (b). That 2006 application remains pending before the Vermont Agency of Natural Resources.

3 The Board found inadmissible the only contentions submitted by the Massachusetts Attorney General and the Town of Marlboro, Vermont. See 64 14

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 23 of 78 part was NECs Contention 1, which was the only proposed contention that even mentioned CWA compliance, albeit only in a reply and attempted amendment, not in the original contention. Id. at 182, RA328.

As originally submitted, Contention 1 alleged that Entergys report did not properly consider the environmental effects of Vermont Yankees continued thermal discharges under NEPA. See id. at 175, RA324. Entergy submitted a filing opposing this Contention. NEC then filed a reply arguing for the first time that Entergy had not complied with § 401 of the CWA. See id.;

NEC's Reply to Entergy and NRC Staff Answers to Petition for Leave to Intervene, Request for Hearing, and Contentions at 6, 14 (June 30, 2006), RA69, RA77.

Entergy successfully moved to strike petitioners § 401 argument because it was first raised in a reply brief, see 64 NRC at 182, RA328, and then successfully opposed NECs subsequent motion to amend Contention 1 to include the § 401 issue. On that motion, the Board ruled that § 401 was simply irrelevant to [the rest of] NECs contention that Entergy failed to NRC at 161, 201, RA338. Likewise, the Board rejected some of Vermont and NECs contentions, but admitted five of their contentions for hearing. Id. at 162-201, RA318-338. Vermont and NEC settled one contention with Entergy, before Entergy eventually prevailed in several years of litigation before the Board and Commission regarding the merits of the remaining contentions. See CLI-11-02, 73 NRC __, 2011 WL 864757 (March 10, 2011); CLI-10-17, 72 NRC__, 2010 WL 2753783 (July 8, 2010); 68 NRC 763 (2008); 65 NRC 371 (2007).

15

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 24 of 78 assess impacts to water quality under NEPA. See Entergy Nuclear Vermont Yankee, LLC, Memorandum and Order (October 30, 2006) (unpublished Board order), RA435-436.

Neither NEC nor Vermont then or later sought Commission appellate review of these procedural Board rulings. Moreover, the Board ruled that the

§ 401 issue was not submitted too late for adjudicatory consideration.

RA435. This meant that petitioners might have pursued their § 401 claim as a stand-alone late-filed contention, but neither party ever did so.

Two months after the Boards last order on petitioners abortive § 401 contention, NRC published the draft supplemental environmental impact statement (SEIS) for Vermont Yankees license renewal and requested comments. See 71 Fed. Reg. 76,706 (Dec. 21, 2006), RA449. Appendix E of the draft SEIS identified the permits and approvals that NRC believed were required for license renewal, which included a § 402 (NPDES) permit but not a new CWA § 401 certification. RA472.

NRC provided a 75-day comment period and scheduled multiple public meetings regarding the draft SEIS. See 71 Fed. Reg. 76,707, RA450. Petitioners submitted no comments arguing for the necessity of a new § 401 certification and filed no new contentions before the Licensing Board based on the absence 16

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 25 of 78 of a new § 401 certification in the draft SEIS. (As noted above, in NRC practice, such contentions are permissible under 10 C.F.R. § 2.309(f)(2).)

Similarly, petitioners filed no objections with NRC after the agency published the final SEIS, see 72 Fed. Reg. 44,186 (Aug. 7, 2007), RA484, which like the draft SEIS did not list a new § 401 certification in Appendix E. RA766.

After several years of litigation at NRC, all adjudicatory proceedings, including Board hearings and Commission decisions on appellate review,4 concluded and the Commission granted Entergys application for a renewed operating license on March 21, 2011. See 76 Fed. Reg. 17,162 (March 28, 2011), RA903. Petitioners now seek to reverse that decision.

SUMMARY

OF ARGUMENT The record contains no detailed Commission decision concerning petitioners CWA grievance. That is because, despite extensive adjudicatory proceedings at NRC, petitioners essentially sat on their hands (with the exception of one half-hearted and then-abandoned attempt by NEC) when given numerous chances to properly raise their CWA compliance claims before the NRCs Atomic Safety and Licensing Board and the Commission.

4 See CLI-11-02, 73 NRC __, 2011 WL 864757 (March 10, 2011); CLI-10-17, 72 NRC__, 2010 WL 2753783 (July 8, 2010); 68 NRC 763 (2008); 65 NRC 371 (2007).

17

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 26 of 78 Now, after years of silence, petitioners in effect ask this Court to undo a completed, five-year license-renewal proceeding on grounds never pursued at NRC. Petitioners simply defaulted on any CWA issues by failing to pursue them during NRCs adjudicatory process. Litigating these complaints now, for the first time in this Court, runs afoul of well-settled law that parties must exhaust all available administrative remedies before resorting to judicial review.

There is no reason to disregard the exhaustion doctrine in this case, as petitioners had every opportunity to pursue their claims at NRC. And had they done so, the agency may have granted them relief. Moving forward without a full agency record would potentially waste scarce judicial resources and encourage litigants to bypass NRCs hearing process, which is designed to create a record for judicial review and also to resolve disputes at the agency level, often avoiding judicial review.

This Court, in short, need go no further than the exhaustion-of-remedies doctrine to resolve this case against petitioners. But in the event this Court reaches the merits it should still rule against petitioners because their underlying legal claims are unpersuasive.

18

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 27 of 78 Vermont Yankee indisputably has a valid Vermont NPDES permit under § 402 of the CWA, as noted in Entergys application for a renewed operating license from NRC. And NRCs Generic Environmental Impact Statement for License Renewalissued in 1996 after a full notice-and-comment process (in which Vermont participated but did not raise objections on these grounds)has long indicated the agencys position that in some cases, the water-quality protections of CWA §§ 401 and 402 are coextensive, such that a state-issued NPDES permit provides water-quality protections equivalent to those ensured by a state-issued § 401 certificate.

Given Entergys application and the GEIS discussion of §§ 401 and 402, the thrust of petitioners opening briefthat the record offers no basis for finding CWA compliance, see Pet. Brief at 3is simply wrong. Notably, petitioners brief ignores the Entergy submission and this part of the GEIS.

Petitioners also failed to present any plausible evidence of concrete harms to their interest in ensur[ing] protection of Vermonts water resources.

Pet. Brief at 2. Thus, even if there were any NRC error here on CWA compliance, the error was one of form rather than substance, and was harmless in the context of this case. Vermont remains capable even now of ensuring that 19

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 28 of 78 its water-quality standards will be enforced through its § 402 NPDES permit process. Petitioners have shown no prejudicial harm.

Finally, amici attempt to introduce several new arguments on the merits, but because these were not raised in petitioners opening brief, they should not be considered now.

ARGUMENT Standard of Review Normally, whether a petitioner has sufficiently exhausted administrative remedies is a question of law, which this court reviews de novo. Artis v.

Bernanke, 630 F.3d 1031, 1034 (D.C. Cir. 2011) (citation omitted). Also, the Supreme Court has recognized that where an agencys regulations . . . require issue exhaustion in administrative appeals . . . , courts reviewing agency action regularly ensure against the bypassing of that requirement by refusing to consider unexhausted issues. Sims v. Apfel, 530 U.S. 103, 108 (2000).

This Court should not set aside the NRCs decision unless the Court finds it arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). To the extent that this Court finds it necessary to consider the meaning of § 401 of the Clean Water Act, its 20

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 29 of 78 review of the Commission's interpretation of Section 401 is de novo.Alcoa Power Generating, Inc. v. FERC, 643 F.3d 963, 972 (D.C. Cir. 2011).5 I. The Petitions for Review must be Dismissed because Petitioners Failed to properly Exhaust their Administrative Remedies before Seeking Judicial Review.

1. Established law requires dismissal of the petitions for review. The petitions for review in this case should be dismissed because of petitioners failure to exhaust their available administrative remedy at NRCnamely, the agencys full hearing process for licensing actions. See generally 42 U.S.C.

§ 2239(a); 10 C.F.R. Part 2. Simply put, petitioners may not file a lawsuit after sitting on their hands when given the chance to properly raise issues before the agency. This Court need go no further than that simple point in order to resolve this lawsuit.

For over 70 years, American courts have followed the basic rule of prudent judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51 (1938). Exhaustion, in other words, is the default processit is presumptively required, whether an underlying statute provides for exhaustion or not. See, 5

EPA is the federal agency directed by statute to administer the CWA. It has not addressed the merits of the question in this case.

21

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 30 of 78 e.g., Assn of Flight Attendants-CWA, AFL-CIO v. Chao, 493 F.3d 155 (D.C. Cir.

2007); Boivin v. U.S. Airways, Inc., 446 F.3d 148 (D.C. Cir. 2006).

In the case of direct judicial review of NRC actions under the Hobbs Act, exhaustion is not simply prudential. The Act makes party status in an NRC proceedingand the exhaustion doctrine implicit therein, Gage v.

AEC, 479 F.2d 1214, 1218 (D.C. Cir. 1973)a mandatory prerequisite to judicial review. See 28 U.S.C. § 2344. And an NRC rule expressly says that participants in NRC hearings first must file a petition for Commission review before seeking judicial review of an agency action. 10 C.F.R. § 2.341(b)(1).

Moreover, the petition for Commission review must contain descriptions of the matters of fact or law at issue, and must show how these matters were previously raised before the presiding officer at the hearing or could not have been raised. 10 C.F.R. § 2.341(b)(2).

Here, petitioners neither filed their Clean Water Act claims properly before NRCs hearing tribunal, the Atomic Safety and Licensing Board, nor brought their claims before the Commission on agency appellate review.

Instead, petitioners seek initial review in this Court, despite the longstanding exhaustion requirement. Where, as here, an agencys regulations . . . require issue exhaustion in administrative appeals, the Supreme Court has noted that 22

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 31 of 78 courts generally ensure against the bypassing of that requirement by refusing to consider unexhausted issues. Sims v. Apfel, 530 U.S. 103, 108 (2000).

In addition to its settled legal basis, the requirement to exhaust administrative remedies is a matter of simple fairness. Cape Cod Hosp. v.

Sebelius, 630 F.3d 203, 211 (D.C. Cir. 2011), quoting United States v. L.A. Tucker Truck Lines, 344 U.S. 33, 37 (1952) (stating the general rule that courts should not topple over administrative decisions unless the administrative body not only has erred but has erred against objection made at the time appropriate under its practice). This is because the requirement gives agencies and other interested parties an opportunity to address particular claims before they are presented in court, and it is also a matter of sound judicial policy. This Court repeatedly has pointed to the many advantages of the default rule that parties must fully contest issues at the agency level before seeking judicial review:

• The exhaustion doctrine serves the twin purposes of protecting administrative agency authority and promoting judicial efficiency, by ensur[ing] that agenciesand not the federal courtstake primary responsibility for implementing the regulatory programs assigned by Congress. Assn of Flight Attendants-CWA, AFL-CIO v.

Chao, 493 F.3d 155, 158 (D.C. Cir. 2007), quoting McCarthy v.

Madigan, 503 U.S. 140, 145 (1992).

• Requiring review within the [agency] gives the [agency] the opportunity to correct its own errors, and thereby to avoid unnecessary litigation. Benoit v. USDA, 608 F.3d 17, 23 (D.C. Cir.

2010), quoting McCarthy at 145.

23

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 32 of 78

• Fully contesting all possible claims before the agency may produce a useful record for subsequent judicial consideration. Id., quoting McCarthy at 145-46.

• Ignoring exhaustion requirements would encourage people to ignore an agencys procedures by allowing litigants who . . . could have petitioned the agency directly for the relief [sought] in [a] lawsuit to seek those forfeited administrative remedies from the court later.

Malladi Drugs & Pharms., Ltd. v. Tandy, 552 F.3d 885, 890 (D.C. Cir.

2009) (citations omitted).

• [A]gency proceedings generally . . . resolve claims much more quickly and economically than courts. Qwest Corp. v. FCC, 482 F.3d 471, 475 (D.C. Cir. 2007), citing Woodford v. Ngo, 548 U.S. 81, 89 (2006).

These policies apply in full force here, where petitioners have asked the Court to resolve a CWA issue that they never presented to the Commission itself and did not press before the Commissions subordinate hearing tribunal, the Licensing Board.

Likewise, this Court overlooks a failure to exhaust agency remedies only in the most exceptional circumstances. Communication Workers of America v. AT&T, 40 F.3d 426, 432 (D.C. Cir. 1994). Examples are excessive delay, agency bias, or a lack of agency authority to grant relief. See Hettinga v.

United States, 560 F.3d 498, 503 (D.C. Cir. 2009). None of those circumstances is present here. Petitioners have never claimed otherwise.

24

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 33 of 78 Indeed, petitioners failure to bring their CWA contention before the Commission deprived the Commission of an opportunity to address any alleged defects and forces lawyers for NRC and the United States to defend NRCs position without the benefit of the Commissions fully-considered judgment, an undesirable situation to say the least. See, e.g., Nat'l Petrochemical

& Refiners Ass'n v. EPA, 630 F.3d 145, 164 (D.C. Cir. 2010). This odd posture underscores the practical problema limited agency record and no specific agency response to petitioners concernscaused by petitioners failure to exhaust their administrative remedies before seeking judicial review.

2. Petitioners arguments on exhaustion are unpersuasive. Petitioners vigorously opposed our original Motion to Dismiss, which rested on their failure to exhaust administrative remedies at NRC. See Petitioners Reply and Memorandum in Opposition to Respondents Motion to Dismiss and Intervenors Cross-Motion for Summary Reversal (August 26, 2011). Acting on our motion, this Court, by Order dated August 31, 2011, explicitly directed the parties to address in their briefs the issues presented in the motions to dismiss rather than incorporate those arguments by reference.

Nevertheless, in their opening brief, petitioners essentially ignored this Courts directive. Indeed, the words exhaust or exhaustion appear 25

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 34 of 78 nowhere in their brief. Instead, they provide only remote and oblique allusions to the issue. See, e.g., Pet. Brief at 6-7, 26-27.

We expect, however, that petitioners will use their reply brief to again oppose our exhaustion argument. Notwithstanding petitioners failure to follow the Courts August 31 Order, which puts the government at a disadvantage, we can anticipate some of their responses based on their previous filings, which are addressed below.

In their opposition to our motion to dismiss, petitioners themselves warned of post-hoc rationalizations created by counsel that should carr[y]

no weight on review. Pet. Opp. 3-4. But this complaint surely runs afoul of the Courts chutzpah doctrine. See Caribbean Shippers Assn v. Surface Transp.

Bd., 145 F.3d 1362, 1365 n.3 (D.C. Cir. 1998). The reason why the NRC record is mostly silent on petitioners CWA claim is petitioners own failure to bring it properly before NRCs Licensing Board or before the Commission.

Petitioners procedural default, and not any oversight by NRC, resulted in the underdeveloped record on the CWA issue.

Following the Licensing Boards initial rejection of petitioners amended CWA contention as improper, NRC rules gave petitioners the opportunity to file a new, separate CWA contention, see 10 C.F.R. § 2.309(f)(2), or to seek 26

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 35 of 78 Commission review of the Boards procedural decision. See 10 C.F.R. §§ 2.341

& 2.1212. But petitioners chose to sit silently instead, while (in the case of petitioner NEC) continuing to pursue other issues before the Board and on appellate review before the Commission. See n.3, supra. 6 Moreover, as petitioners opening brief acknowledges, NRCs draft and final supplemental environmental impact statements for Vermont Yankee did not list a new § 401 certification as a permit required by law for Vermont Yankees license renewal. See Pet. Brief at 7-8; RA472, RA766. Yet although they had 75 days to file comments contesting this position, the opportunity to present their claims in several public meetings, and a chance to file a new contention on these grounds before the Licensing Board under 10 C.F.R.

§ 2.309(f)(2), petitioners failed to take advantage of any of these opportunities to contest NRCs position on the necessity of a new § 401 certification.

Petitioners, in short, did not use all the steps the agency holds out to file objection[s] . . . at the time appropriate under [NRCs] practice. Woodford

v. Ngo, 548 U.S. 81, 90 (2006) (holding that a court should dismiss a lawsuit where the litigant did not fully exhaust administrative remedies). Had they 6

Indeed, even in their brief in this Court, petitioners do not challenge the Boards procedural ruling that their attempt to modify their original NEPA-based contention to add the CWA issue was improper because it went beyond the scope of the original contention.

27

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 36 of 78 used the procedures established by NRC, petitioners might have prevailed on some of their concernsor at least have been better informed as to the NRCs position, leading them not to challenge the agency decision at all.

To entertain CWA-based claims now, several years after petitioners abandoned such claims in NRCs proceedings, and where the Commission was never presented with such claims, would condone, and indeed reward, petitioners unexplained failure to take advantage of their opportunities to raise their objections before the agency. For that reason, this Court has discouraged petitions by those who had the opportunity to participate in the underlying Commission proceedings but who had failed to take advantage of it. Natural Resources Defense Council v. NRC, 666 F.2d 595, 601 n.42 (D.C. Cir. 1981).

Petitioners opposition to our motion to dismiss maintained that adjudication of CWA claims must take place outside NRCs hearing process (Pet. Opp. 16-19), and they now state in their opening brief that NRC has determined that the issue of compliance with the requirements of Section 401 is not an issue that is to be resolved in a license renewal hearing. Pet. Brief at 27 n.13. This is entirely incorrect.

There is no reason to believe that CWA issues cannot be addressed in NRC license renewal hearings, or that CWA issues are somehow immune 28

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 37 of 78 from ordinary exhaustion-of-remedies principles. Indeed, in cases involving other agencies, reviewing courts have had little difficulty in barring CWA claims for failure to raise the issue during . . . earlier administrative proceedings. Natural Resources Defense Council, Inc. v. Kempthorne, 525 F.Supp.2d 115, 124 (D.D.C. 2007); see also City of Santa Clarita v. DOI, 249 Fed.

Appx. 502, 505 (9th Cir. 2007).

Similarly, NRCs hearing process is not limited to claims under the Atomic Energy Act, as petitioners brief implies, but encompasses any claim of unlawfulness that would defeat issuing a license, including (for example) claims under the National Environmental Policy Act, the National Historic Preservation Act, and the CWA itself.7 Thus, NRC Licensing Boards have considered CWA claims in the past. See, e.g., Private Fuel Storage, LBP-98-7, 47 NRC 142, 197-98 (1998) (Board order admitting properly-filed contentions under 10 C.F.R. § 51.45(d) regarding compliance with, among other laws, the CWA).

7 See, e.g., Pacific Gas & Elec. Co., 68 NRC 509 (2008) (adjudicating NEPA claim); Entergy Nuclear Vermont Yankee, LLC, 65 NRC 371 (2007) (adjudicating CWA claim); USEC, Inc., 63 NRC 433 (2006) (adjudicating NEPA and National Historic Preservation Act claims); Hydro Resources, Inc., 50 NRC 3 (1999) (adjudicating Native American Graves Protection and Repatriation Act claim).

29

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 38 of 78 NRCs regulations at 10 C.F.R. § 51.45(d)requiring applicants to list CWA permits (which Vermont Yankees application did)gave petitioners an obvious initial trigger point for litigating their CWA-compliance claim as part of the NRC hearing process. Indeed, briefly and ineffectively, petitioners attempted to do so through a CWA contention that they later abandoned.

Petitioners complain in their opening brief that, [i]n opposing NECs proposed new contention . . . raising the absence of a § 401 certification, . . .

NRC [never] sought to defend the absence of such a Certification, but instead (successfully) attacked its procedural flaws. Pet. Brief at 7 n.6. But that complaint ignores this Courts settled rule that where a petitioners hearing arguments were not properly presented [under the agencys procedural rules],

. . . the Commission was under no obligation to review them. 21st Century Telesis Joint Venture v. FCC, 318 F.3d 192, 200 (D.C. Cir. 2003).

Notably, in rejecting petitioners contention, NRCs Licensing Board did not rule that CWA claims were immaterial to licensing, or otherwise outside the scope of a license-renewal proceeding, but ruled merely that these particular petitioners attempted contention was procedurally defective. See Entergy Nuclear Vermont Yankee, LLC, Memorandum and Order (October 30, 2006) (rejecting attempt to graft CWA claim onto pre-existing NEPA contention), RA435-36; 30

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 39 of 78 Entergy Nuclear Vermont Yankee, LLC, 64 NRC 131, 182 (2006) (rejecting attempt to raise new CWA claim in reply brief), RA328. Petitioners did not challenge the Boards procedural rulings on administrative appeal to the Commission (or, for that matter, in their brief in this Court).

In their opposition to our motion to dismiss, petitioners attempted to buttress their argument that CWA claims are not litigable at NRC by pointing out that NRC conducts its hearing process concurrently with state permitting processes, and does not hold hearings in abeyance to await the state outcome.

Pet. Opp. 17-19. Petitioners also noted that NRC does not and cannot second-guess state determinations of clean-water standards. Id. at 18-19. But none of this is relevant here, where petitioners defaulted on their opportunity to bring their CWA grievance first to NRCand deprived NRC of an opportunity to consider itbefore coming to court.

By statute, the Licensing Board, analogous to a trial court, is the first step on the route to the courts of appeals. See 42 U.S.C. § 2241 (establishing the Board); 42 U.S.C. § 2239(b) (rendering NRC licensing decisions reviewable under the Hobbs Act). A potential litigant in court should not be permitted or encouraged to stand silent at the Board or at the Commission, or ignore NRC procedural rules; otherwise, courts of appeals would be compelled to review 31

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 40 of 78 legal issues in the first instance, without the benefit of the agencys views, and often with a deficient or non-existent administrative record on those issues.

Finally, in their opposition to our motion to dismiss, petitioners asserted that CWA claims like theirs cant be waived through a failure to exhaust NRC remedies, but only through the terms of § 401(a)(1) of the CWA. See Pet.

Opp. 19-22. For this argument, petitioners invoked this Courts decision in North Carolina v. FERC, 112 F.3d 1175, 1183-1185 (D.C. Cir. 1997).

But § 401(a)(1) and North Carolina do not speak to the exhaustion-of-remedies doctrine, but merely to the manner in which a state may waive issuing an initial water-quality certification under the CWA. This case does not involve that statutory waiver or claim of such a waiver. At issue in this case is the significance of an existing § 401 or § 402 water-quality certification or permit, as petitioners themselves acknowledged in the merits portion of their opposition to our motion to dismiss (pp. 4-10). The simple fact is that petitioners never brought this issue before the Commission, despite having ample opportunity to do so.

NRCs specific and statutorily-required hearing process is the designated initial adjudicatory forum for dealing with grievances of all kinds regarding NRC license applications. Nothing in the CWA, Atomic Energy Act, or 32

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 41 of 78 Hobbs Act suggests that a litigant can ask a court of appeals for CWA review in the first instance, as petitioners attempt here.

Thus, these consolidated petitions for review should be dismissed for failure to exhaust available NRC remedies. The Court need go no further to decide this case.

II. Petitioners have not Controverted NRCs longstanding Position with respect to Satisfying CWA Requirements through § 402 NPDES Permits Even assuming that this Court finds that petitioners have satisfied the exhaustion-of-remedies requirement, the Court should reject the arguments set forth in their opening brief, which are unpersuasive.

At the outset, we do not dispute petitioners self-evident premise that NRC must comply with § 401 of the CWA, as it must comply with all other applicable laws, when issuing licenses. It is the remainder of petitioners argument that is problematic. Petitioners argument simply asserts that NRC failed to obtain a § 401 certification (from Entergy) before issuing Vermont Yankees renewed operating license, and never articulated any basis of compliance with the CWA. Pet. Brief at 27.

Although the record contains no detailed Commission decision concerning petitioners CWA grievance, it does include Vermont Yankees 33

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 42 of 78 license-renewal application, which claimed compliance with § 401 on two groundsVermont Yankees original § 401 certificate from Vermont and Vermont Yankees existing § 402 (NPDES) permit. See Vermont Yankee Nuclear Power Station License Renewal Application, App. E, Applicant's Environmental Report, 9-1 (Jan. 25, 2006), RA45. The Commission has not had occasion to address whether Vermont Yankees original § 401 certification remains valid for license-renewal purposes, and thus takes no position on that question here.

The § 402 question is another matter. Petitioners acknowledge Vermont Yankees valid § 402 permit, see Pet. Brief at 5, but argue that [t]he record does not reflect that NRC accepted [this NPDES permit] as a substitute for actual compliance [with § 401] and certainly does not contain an affirmative statement from NRC that [Entergy] had otherwise demonstrated actual compliance with § 401 on any basis. See id. at 22-25. Petitioners are wrong.

CWA § 401 does not explicitly require NRC to make any affirmative statement of this nature. And unlike the case cited by petitioners in support of this argument, NRCs decision-making here was never properly called into question or challenge[d] before the agency. Cf. City of Tacoma v. FERC, 460 F.3d 53, 67-68 (D.C. Cir. 2006) (cited at Pet. Brief 23, 24). Likewise, the 34

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 43 of 78 Supreme Court has previously warned that courts and petitioners cannot engraft[] their own notions of proper procedures upon agencies entrusted with substantive functions by Congress. Vermont Yankee Nuclear Power Corp. v. Nat.

Res. Def. Council, 435 U.S. 519, 525 (1978).

In any event, while NRC had no occasion to explain its position on

§ 401 in detail, the agencys path may reasonably be discerned. See Wisconsin Pub. Power, Inc. v. FERC, 493 F.3d 239, 273 (D.C. Cir. 2007), citing Alaska Dep't of Envtl. Conservation v. EPA, 540 U.S. 461, 497 (2004). The record shows that NRC has long taken the position that § 402 permits can serve as a proxy for

§ 401 certificates, and the record supports use of such a proxy here.

Petitioners inexplicably overlook the fact that since 1996, NRCs Generic Environmental Impact Statement (GEIS) for License Renewal has explicitly announced the agencys position that in some circumstances a states

§ 402 NPDES permit provides water-quality protections equivalent to those ensured by a state § 401 certificate. See 1 NUREG-1437, Generic Environmental Impact Statement for License Renewal of Nuclear Plants at

§ 4.2.1.1 (1996), RA43. Consistent with the statement in the GEIS, the Supplemental Environmental Impact Statement for the Vermont Yankee 35

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 44 of 78 license renewal lists the § 402 NPDES permit (but not a new § 401 certification) as required for license renewal. RA766.

Although CWA §§ 401 and 402 are not identical, see S.D. Warren Co. v.

Maine Bd. of Envtl. Prot., 547 U.S. 370, 380 (2006), both sections function in large part by requiring compliance with CWA §§ 301, 302, 303, 306, and 307, as well as the states water-quality standards. Thus, in cases like the current one, where neither an affected state nor anyone else has pointed to water-quality protections available under § 401 that are not also available under

§ 402, it is reasonable to assume, as NRC did here, that a states § 402 NPDES permit can act as, in effect, a proxy for a § 401 water-quality certification.

In this case, to the extent that § 401 might be understood to supply additional authority to states, Vermontwhich has a federally-approved NPDES programhas never invoked any such authority, and therefore has not suffered any apparent injury to its general interest in the protection of Vermonts water resources (Pet. Brief at 2) that could not be addressed through the states own § 402 permit process. Petitioners never contested NRCs general position on the inter-relationship between §§ 401 and 402, as reflected in the GEIS, in any filing or statement before NRC or in their opening brief in this Court. Thus, they have waived any challenge to NRCs 36

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 45 of 78 reliance on the GEIS here. See, e.g., McKinley v. Bd. of Governors of the Fed.

Reserve Sys., 647 F.3d 331, 335 n.7 (D.C. Cir. 2011).

Indeed, as petitioners opening brief points out, during NRCs Vermont Yankee license renewal proceeding, Vermonts Agency of Natural Resources (VANR), responsible for Vermonts programs under §§ 401 and 402, explained to the NRC that [t]he requirements of the Clean Water Act and the NPDES permit will provide assurance that the impacts of [Vermont Yankees]

permitted intake structures and discharges meet the applicable federal and state requirements. See Pet. Brief at 8. NRC was entitled to rely on this pronouncement by VANR, the authorized state water-quality agency.

Although petitioners brief maintains otherwise, id., VANRs statement appears to support NRCs stated position that the § 402 NPDES permit, which incorporates CWA requirements, can be sufficient to ensure water quality.

Notably, VANRs letter did not mention a need for a new § 401 certification.

Petitioners have never said, either at NRC or in this Court, how a new

§ 401 certification would improve water quality, given the existing § 402 permit. In these circumstances, even if there were error on NRCs part in not requiring a fresh § 401 certification, it was one of form rather than substance, and thus harmless, not warranting a judicial remedy. See 5 U.S.C. § 706 (on 37

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 46 of 78 judicial review, due account shall be taken of the rule of prejudicial error).

As this Court recognized in another CWA case, [i]n administrative law, as in federal and criminal litigation, there is a harmless error rule. Jackson County v.

FERC, 589 F.3d 1284, 1290 (D.C. Cir. 2009), quoting Nat'l Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 659-60 (2007). If the agency's mistake did not affect the outcome, if it did not prejudice the petitioner, it would be senseless to vacate and remand for reconsideration. PDK Labs., Inc.

v. U.S. DEA, 362 F.3d 786, 799 (D.C. Cir. 2004).

That is the case here. Were this Court to find that NRC technically should have required a second § 401 certification before relicensing Vermont Yankee, no judicial remedy is necessary. Petitioners have not explained what extra margin of water-quality protection Vermont would impose through a

§ 401 certificate that is not being achieved under the existing § 402 process.

Vermont remains fully capable of ensuring that its water-quality standards will be enforced through Vermont Yankees § 402 NPDES permit.

Finally, the amici curiae allied with petitioners attempt to introduce several CWA-compliance arguments not raised in petitioners opening brief or in NRCs hearing process. See, e.g., Brief of Amicus Riverkeeper and Scenic Hudson at 12-18 (disputing potential application of CWA § 401(a)(3) to this 38

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 47 of 78 case). But because petitioners did not properly exhaust their administrative remedies, the Commission has had little or no opportunity to address these merits issues. Moreover, this Court will not consider issues raised in amicus briefs but not raised in proceedings below or by the parties to th[e] appeal.

Baptist Mem. Hosp. - Golden Triangle v. Sebelius, 566 F.3d 226, 230 (D.C. Cir.

2009). See Entergy Servs. v. FERC, 319 F.3d 536, 545 (D.C. Cir. 2003) (new statutory argument raised in amicus brief but not in petitioners brief is not properly before the court); Eldred v. Reno, 239 F.3d 372, 378 (D.C. Cir. 2001)

(Court and federal respondents may disregard amicus curiaes attempt to implicate issues that have not been presented by the parties to the appeal).

Accordingly, we do not separately address the issues raised in the amicus briefs, except to the extent that they replicate the arguments in petitioners opening brief.

39

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 48 of 78 CONCLUSION Until it filed this lawsuit, Vermont had not independently raised any CWA water-quality issues at any point since it joined NECs procedurally-deficient, half-hearted contention in the NRC hearing process several years ago. Neither Vermont nor NEC sought Commission review of the Licensing Boards decision dismissing that contention or ever submitted a properly-pled contention, presumably because they suffered no harm, given the substantive protections assured by Vermonts § 402 NPDES permit.

Rather than bringing their legal issues before the Commission, petitioners essentially sat idle until filing this lawsuit. This approach, if allowed by this Court, defeats the integrity of NRCs licensing process. Raising legal objections only after that process is over undermines and diminishes that process, creates confusion, and wastes scarce judicial resources.

NRC, moreover, did not errand certainly did not err in a prejudicial sensein not obtaining a new § 401 certificate from Entergy, given the existing water-quality protections in Vermont Yankees § 402 NPDES permit and given Vermonts failure to identify how a new § 401 certification would further protect water quality in the state.

40

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 49 of 78 For the foregoing reasons, the petitions for review should be dismissed for failure to exhaust administrative remedies, or alternatively, denied on the merits.

Respectfully submitted, IGNACIA S. MORENO STEPHEN G. BURNS Assistant Attorney General General Counsel

_/s/____________________ _/s/______________________

JOHN E. ARBAB JOHN F. CORDES, JR.

Attorney Solicitor Appellate Section Environment and Natural _/s/______________________

Resources Division SEAN D. CROSTON U.S. Department of Justice Attorney P.O. Box 23795 Office of the General Counsel LEnfant Plaza Station U.S. Nuclear Regulatory Washington, D.C. 20026 Commission (202) 514-4046 Washington, D.C. 20555 (301) 415-2585 March 19, 2012 41

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 50 of 78 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT THE STATE OF VERMONT )

DEPARTMENT OF PUBLIC SERVICE )

and the NEW ENGLAND COALITION )

)

Petitioners, )

)

v. ) Nos. 11-1168

) and 11-1177 UNITED STATES NUCLEAR )

REGULATORY COMMISSION and )

THE UNITED STATES OF AMERICA )

)

Respondents. )

)

CERTIFICATE OF LENGTH OF BRIEF I hereby certify that the foregoing Final Brief for Respondents U.S.

Nuclear Regulatory Commission and United States of America contains 8,340 words, excluding the Table of Contents, Table of Authorities, Glossary, and Certificates of Counsel, as counted by the Microsoft Word 2007 program.

Respectfully submitted,

/S/______________________

Sean D. Croston Attorney March 19, 2012 42

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 51 of 78 CERTIFICATE OF SERVICE I hereby certify that on March 19, 2012, a copy of the foregoing Final Brief for the Federal Respondents was filed with the Clerk of the Court and served upon the following counsel of record in the case through the CM/ECF System:

Counsel for New England Coalition Counsel for Vermont Dept. of Pub. Serv.

Christopher M. Kilian Anthony Z. Roisman Anthony N.L. Iarrapino John Beling Counsel for Intervenors Counsel for Amici David R. Lewis Christopher Wright Timothy Simeone Mark Davis Monica Wagner

/S/___________________

Sean D. Croston Attorney Office of the General Counsel U.S. Nuclear Regulatory Commission 11555 Rockville Pike Mail Stop O15 D21 Rockville, MD 20852 (301) 415-2585 43

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 52 of 78 44

USCA Case #11-1168 Document #1364243 Filed: 03/19/2012 Page 53 of 78 ADDENDUM OF STATUTES AND REGULATIONS Except for the following, all applicable statutes, etc., are contained in the Brief for Petitioners.

3 V.S.A. § 814 ............................................................................................. 46 5 U.S.C. § 706 ............................................................................................. 47 28 U.S.C. § 2344 ......................................................................................... 48 42 U.S.C. § 2133 ......................................................................................... 49 42 U.S.C. § 2239 ......................................................................................... 51 42 U.S.C. § 2241 ......................................................................................... 54 42 U.S.C. § 4332 ......................................................................................... 55 10 C.F.R. § 2.1212 ...................................................................................... 56 10 C.F.R. § 2.309 ........................................................................................ 59 10 C.F.R. § 2.341 ........................................................................................ 64 10 C.F.R. § 51.20 ........................................................................................ 66 10 C.F.R. § 54.23 ........................................................................................ 68 10 C.F.R. § 54.27 ........................................................................................ 69 10 C.F.R. § 54.31 ........................................................................................ 70 45

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