ML23174A102

Transcript of Pacific Gas and Electric Company, Diablo Canyon Independent Spent Fuel Storage Installation, Teleconference, June 13, 2023, Pages 1-70

ML23174A102
Person / Time
Site:	Diablo Canyon
Issue date:	06/23/2023
From:	Atomic Safety and Licensing Board Panel
To:
SECY RAS
References
RAS 56721, ASLBP 23-979-01-ISFSI-MLR-BD01, 72-26-ISFSI-MLR, NRC-2422
Download: ML23174A102 (0)

Text

Official Transcript of Proceedings

NUCLEAR REGULATORY COMMISSION

Title:

Pacific Gas and Electric Company, Diablo Canyon Independent Spent Fuel Storage Installation

Docket Number: 72-26-ISFSI-MLR

ASLBP Number: 23-979-01-ISFSI-MLR-BD01

Location: teleconference

Date: Wednesday, June 13, 2023

Work Order No.: NRC-2422 Pages 1-69

NEAL R. GROSS AND CO., INC.

Court Reporters and Transcribers 1716 14th Street, N.W.

Washington, D.C. 20009 (202) 234-4433 1

1 UNITED STATES OF AMERICA

2 NUCLEAR REGULATORY COMMISSION

3 + + + + +

4 ATOMIC SAFETY AND LICENSING BOARD PANEL

5 + + + + +

6 HEARING

7 --------------------------x

8 In the Matter of: :

9 PACIFIC GAS AND ELECTRIC : Docket No.

10 COMPANY, INC. : 72-26-ISFSI-MLR

11 : ASLBP No.

12 : 23-979-01-ISFSI-MLR-BD01

13 (Diablo Canyon :

14 Independent :

15 Spent Fuel Storage :

16 Installation) :

17 --------------------------x

18 Wednesday, June 13, 2023

19 BEFORE:

20 E. ROY HAWKENS, Chair

21 NICHOLAS G. TRIKOUROS, Administrative Judge

22 JUDGE GARY S. ARNOLD, Administrative Judge

23

24

25

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1 APPEARANCES:

2 On Behalf of PG&E, Inc.:

3 RYAN K. LIGHTY, ESQ.

4 PAUL BESSETTE, ESQ.

5 of: Morgan, Lewis & Bockius LLP

6 1111 Pennsylvania Avenue, N.W.

7 Washington, DC 20004

8 ryan.lighty@morganlewis.com

9 paul.bessette@morganlweis.com

10 On Behalf of San Luis Obispo Mothers for Peace:

11 DIANE CURRAN, ESQ.

12 of: Hamon, Curran, Spielberg & Eisenberg, LLP

13 1725 DeSales Street, N.W.

14 Suite 500

15 Washington, DC 20036

16 dcurran@harmoncurran.com

17 On Behalf of the Nuclear Regulatory Commission:

18 ADAM S. GENDELMAN, ESQ.

19 CATHERINE E. KANATAS, ESQ.

20 of: Office of the General Counsel

21 Mail Stop - O-14A44

22 U.S. Nuclear Regulatory Commission

23 Washington, D.C. 20555-0001

24 adam.gendelman@nrc.gov

25 catherine.kanatas@nrc.gov

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1 C-O-N-T-E-N-T-S

2 PAGE

3 Presentation by Diane Curran, Counsel for

4 San Luis Obispo Mothers for Peace 6

5 Presentation by Ryan Lighty, Counsel for PG&E 26

6 Presentation by Adam Gendelman, Counsel for

7 Nuclear Regulatory Commission 48

8 Rebuttal by Diane Curran, Counsel for

9 San Luis Obispo Mothers for Peace 64

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1 P-R-O-C-E-E-D-I-N-G-S

2 1:01 p.m.

3 JUDGE HAWKENS: And with that, we'll go on

4 the record, please. Good afternoon. Today, we'll

5 hear oral argument in a license renewal proceeding

6 entitled Pacific Gas and Electric Company, Diablo

7 Canyon Independent Spent Fuel Storage Installation,

8 Docket No. 72-26-ISFSI-MLr.

9 Petitioner, San Luis Obispo Mothers for

10 Peace challenges the application submitted by PG&E to

11 renew its license for the independent spent fuel

12 storage installation at the Diablo Canyon Nuclear

13 Plant. And as an aside going forward, you may hear

14 judges and counsel use the acronym ISFSI when

15 referring to the independent spent fuel storage unit

16 installation.

17 My name is Roy Hawkens. I'm a legal

18 judge. I chair this licensing board, and I'm joined

19 by Technical Judge Nic Trikouros and Technical Judge

20 Dr. Gary Arnold, both who have an expertise in nuclear

21 engineering.

22 Our Board is assisted by law clerk Noel

23 Johnson. And we also are receiving support from law

24 clerk Allison Wood. The argument is being held in the

25 hearing room at the NRC Headquarters in Rockville,

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1 Maryland. And we welcome counsel and the audience.

2 A listen-only telephone line has been made

3 available for those who could not be here today. And

4 a court reporter is preparing a transcript that will

5 be placed in the NRC's electronic hearing docket

6 within a week. As I mentioned, this proceeding

7 involves a challenge to PG&E's application to renew

8 its license for the ISFSI located at Diablo Canyon

9 Power Plant.

10 Petitioner has proffered two contentions

11 challenging that application. First, it argues the

12 information in the renewal application regarding

13 PG&E's financial qualification to operate and

14 decommission the facility is deficient because it's

15 based on the incorrect assumption that the reactors at

16 the Diablo Canyon Power Plant will be retired in 2024

17 and 2025. Second, it argues a portion of the

18 environmental report supplement is deficient for the

19 same reason.

20 Before licensing board will grant a

21 hearing request, the petitioner must demonstrate

22 standing and must offer two admissible contentions.

23 The litigants agree to those issues, and the licensing

24 board had read those briefs. Petitioner argues the

25 hearing request should be granted because it has

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1 standing and it offers two admissible contentions.

2 PG&E does not dispute petitioner's

3 standing, but it argues that neither contention is

4 admissible. And therefore, the hearing request should

5 be denied. The NRC staff on the other hand argues the

6 hearing request should be granted because petitioner

7 has established standing and it proffers one

8 admissible contention. For the record, would counsel

9 please introduce themselves and any colleagues who are

10 accompanying them starting with petitioner, please?

11 MS. CURRAN: Good afternoon. My name is

12 Diane Curran. I'm appearing for San Luis Obispo

13 Mothers for Peace.

14 JUDGE HAWKENS: Thank you, Ms. Curran.

15 PG&E?

16 MR. BESSETTE: Good afternoon, Your Honor.

17 I'm Paul Bessette, counsel for Pacific Gas and

18 Electric. With me is Ryan Lighty who'll be conducting

19 the oral argument with you. And behind me is my

20 colleague Tim Matthews, Partner at Morgan, Lewis. We

21 also have a summer intern with us, Jake Negbessky,

22 who's observing the proceedings.

23 JUDGE HAWKENS: Thank you. NRC staff?

24 MR. GENDELMAN: Good afternoon. My name

25 is Adam Gendelman. I'm an attorney in Material Cycle

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1 and Waste Division in the NRC Office of General

2 Counsel. With me is Catherine Kanatas and some NRC

3 technical staff are in the gallery, Mr. James Park,

4 Mr. Trent Wertz, and Dr. Christopher Markley.

5 JUDGE HAWKENS: All right. Thank you.

6 Each litigant has been allotted 40 minutes to present

7 argument. Petitioner will go first followed by PG&E

8 and followed by the NRC staff. Petitioner may reserve

9 up to ten minutes for rebuttal. The Board's law

10 clerk, Ms. Johnson, will be keeping track of time.

11 During the course of your argument, the

12 green light will be illuminated. When five minutes

13 are left, you'll see the yellow light. And when time

14 has elapsed, you'll see the red light at which time

15 we'd ask counsel to wrap up their arguments promptly

16 unless the Board has an issue on questions. At this

17 stage, does counsel have any questions?

18 (No audible response.)

19 JUDGE HAWKENS: Seeing that nobody does,

20 let me ask Judge Trikouros, anything to add before we

21 proceed?

22 JUDGE TRIKOUROS: No, thank you.

23 JUDGE ARNOLD: No.

24 JUDGE HAWKENS: Ms. Curran, do you --

25 MS. CURRAN: I'm ready.

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1 JUDGE HAWKENS: -- desire to reserve any

2 time for rebuttal?

3 MS. CURRAN: Yes, I would like to reserve

4 ten minutes, please.

5 JUDGE HAWKENS: Very well. You may

6 proceed. Thank you.

7 MS. CURRAN: Thank you. Good afternoon.

8 And I first want to thank you all for accommodating me

9 when I needed to postpone the oral argument for health

10 reasons. I'm doing fine, but I needed that day. And

11 I really appreciate it. Thank you.

12 JUDGE HAWKENS: You're welcome. We're

13 grateful to counsel for accommodating you with your

14 request as well.

15 MS. CURRAN: Yes, and to the counsel.

16 Just before we start in on the contentions, I want to

17 set a little background on this because our concerns

18 arise from the fact that PG&E submitted its license

19 renewal application in March of 2022 when its plans

20 for the Diablo Canyon reactor were completely

21 different than they are today. As you know, today the

22 NRC has granted -- recently, the NRC granted PG&E an

23 exemption from the timely renewal rule to put in a new

24 license renewal application which if PG&E submits it

25 by December of 2023 will allow it to get the

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1 protection of the timely renewal rule.

2 And as far as we know, PG&E is planning to

3 submit a license renewal application for the reactors

4 even in the State of California. And a bill had

5 passed in September, said that they would limit the

6 operation to five years. They left it a little open

7 ended.

8 And as far as we know, PG&E is planning to

9 apply for a 20-year renewal of the reactor licenses.

10 And as the NRC says in its response to our

11 contentions, the operation of the reactors is related

12 to the ISFSI. It was the motivation for the licensing

13 of the ISFSI in the first place.

14 So here we are because PG&E submitted the

15 ISFSI license renewal application back when they

16 thought they were going to close the reactors in 2024-

17 2025. And the only purpose of the ISFSI if that were

18 true would be to have a safe place to store spent fuel

19 until the repository opens. There's no need to talk

20 about the operation of the facility. It was

21 essentially ending.

22 Our concerns arise from the fact that PG&E

23 has amended its application even though it's known

24 since September that it was planning to do something

25 different or it might do something different. And

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1 it's known since October when it requested the NRC to

2 issue the exemption that it wanted to submit a new

3 license renewal application. We got two contentions.

4 The first contention relates to financial

5 assurance for operation -- safe operation of the ISFSI

6 and also decommissioning of the ISFSI. Again, in both

7 instances, the representations made by PG&E and the

8 license renewal application are that PG&E is going to

9 operate the ISFSI for only a few more years and then

10 -- or will operate it for a long time but under the

11 current regime of getting funding from the rate payers

12 only a few more years. And then it will tap into the

13 decommissioning trust fund to operate the ISFSI.

14 And the same thing for decommissioning,

15 that as far as they knew back then, they were going to

16 start decommissioning right away. And as PG&E says in

17 appendix page G-4 of its appendix, for purposes of

18 providing an estimate for a funding plan, financial

19 assurance is expected to be provided based on a prompt

20 ISFSI decommissioning scenario. So that timing of

21 decommission affects the cost of decommissioning.

22 It affects where PG&E is going to get the

23 money for decommissioning. And in our view, the

24 application should be accurate. It's required by the

25 NRC regulations which are there to protect the public,

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1 there to protect the safety of the ISFSI operation.

2 We know that we have historic examples

3 where not enough money was set aside for maintaining

4 nuclear waste. And these regulations evolved out of

5 that. We also have a situation where --

6 JUDGE HAWKENS: May I interrupt? One --

7 MS. CURRAN: Of course.

8 JUDGE HAWKENS: -- quick question. And I

9 want to hear more about your contention of

10 admissibility after this. But at the outset, although

11 nobody has challenged standing, and in fact, the NRC

12 staff agrees standing, as you know, the Board has an

13 independent obligation to verify that standing exists.

14 And I was wondering if you could just summarize your

15 views of standing and which of the members of the

16 petitioner has standing under established case law.

17 MS. CURRAN: Yes. Well, we rely on the --

18 principally on the licensing board's decision with

19 respect to spent fuel storage. In the original ISFSI

20 licensing proceeding in which members of San Luis

21 Obispo Mothers for Peace who live within a few miles

22 of a reactor or within 18 miles actually where found

23 to have standing.

24 JUDGE HAWKENS: Seventeen miles, I

25 believe.

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1 MS. CURRAN: Seventeen? Okay. We have

2 members living within six miles. This is a very large

3 quantity of radioactive material. And if there were

4 any kind of airborne release of this material, the

5 licensing board has found it's reasonable to conclude

6 that this could affect people living near the

7 facility.

8 If the Board is thinking of reconsidering

9 that decision, we would really appreciate an

10 opportunity to brief it more fully. The issue has

11 been briefed in detail in a case in the D.C. Circuit

12 involving a centralized storage facility in Texas.

13 And we'd be glad to provide you with all that legal

14 briefing if you wish.

15 JUDGE ARNOLD: Could I just mention, in

16 the Bell Bend case, CLI-10-07, the commission said,

17 our case law is clear that a petitioner must make a

18 fresh standing demonstration in each proceeding in

19 which any prevention is sought. So that sounds to me

20 as though they're ruling out basing your standing on

21 a previous case where you establish standing.

22 MS. CURRAN: Judge Arnold, I have a little

23 different interpretation of that precedent. I don't

24 think that -- I don't think it's saying that previous

25 decisions have to be revisited. I think what it's

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1 saying is you can't come in and say a few years ago

2 you found we had a standing. And we're not going to

3 put in standing affidavits again.

4 We did that. I don't think -- and I could

5 be wrong. But I don't think that decision is saying

6 all previous decisions are up for reconsideration.

7 It's saying petitioners can't rely on previous

8 standing declarations or any kind of representations

9 regarding your standing. And we have done all that

10 beforehand. We had new standing declarations from a

11 number of Mothers for Peace members.

12 JUDGE ARNOLD: If you take a look at the

13 case you sited where they decided 17 miles, they did

14 not do that based upon an examination of what kind of

15 threats are in an ISFSI. They just said, well, Sharon

16 Harris used 17 miles so we'll use it too. That sounds

17 to me to be a very poor basis to decide that somebody

18 has standing. Now as I understand it, although you

19 never used the expression, proximity plus, in your

20 petition, that's basically what you're basing your

21 standing on.

22 MS. CURRAN: Yes.

23 JUDGE ARNOLD: And as staff mentioned in

24 their answer, petitioner must demonstrate that the

25 proposed action involves a significant source of

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1 radioactivity producing an obvious potential for

2 offsite consequences. Now I personally don't see an

3 obvious potential. But you, I believe, do. Could you

4 tell me what that potential is and how it may occur?

5 MS. CURRAN: It would -- certainly in the

6 case that we brought, it was in -- I guess it would've

7 been the first ISFSI licensing proceeding, we

8 presented scenarios where a cask could be breached and

9 a radioactive release could occur, airborne

10 radioactive release with significant off-site

11 consequences. So we have -- that hasn't changed.

12 That's a potential attack on an ISFSI. We also know

13 that spent fuel is the most highly radioactive

14 substance on the planet. And this is a significant

15 quantity being stored in one place.

16 JUDGE ARNOLD: So I do not have those

17 scenarios in front of me. And they're not in your

18 petition. Can you recall what type of circumstances

19 would lead to a release of that nature?

20 MS. CURRAN: We presented scenarios of an

21 attack on a spent fuel storage facility. And we did

22 not get into exhaustive detail because it's a

23 sensitive security issue. But we demonstrated that it

24 was credible and that it could result in a significant

25 off-site release.

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1 And our expert witness talked about what

2 the consequences could be, that they were far reaching

3 and significant. And I would be happy to brief the

4 standing issue again. We rely on the precedent. And

5 the very same ISFSI licensing that was decided some

6 years ago. But if it's a concern of the licensing

7 board, we'd be happy to present all that evidence

8 again.

9 JUDGE ARNOLD: Would you contend that the

10 scenarios you presented then are still possible now,

11 that there's not any changes in technology or anything

12 that would make them less credible? Are the scenarios

13 of 20 years ago, are they still valid today?

14 MS. CURRAN: In my opinion as a lawyer,

15 these things are credible. You're talking about

16 standing where very little bit of harm is enough to

17 get you standing. I don't know -- I mean, these are

18 security issues, right? Has the ISFSI been redesigned

19 so that this is no longer a credible event? I'm never

20 going to be able to tell you that.

21 JUDGE ARNOLD: I will note that the

22 Commission recently -- as you mentioned, the storage

23 case, the Holtec case found proximity plus standing as

24 well. And although those weren't mentioned, do you

25 have any views on the applicability of your rationale

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1 on those Commission decisions?

2 MS. CURRAN: They would be equally

3 applicable here, although the quantity is not as

4 great. But still, it's --

5 (Simultaneous speaking.)

6 JUDGE ARNOLD: Twenty-one hundred metric

7 tons, and it was a lot of radioactive waste.

8 MS. CURRAN: Yes.

9 JUDGE HAWKENS: Anymore on standing?

10 JUDGE ARNOLD: No.

11 JUDGE HAWKENS: Anymore on standing?

12 JUDGE TRIKOUROS: No.

13 JUDGE HAWKENS: You may proceed on the

14 contention of admissibility today.

15 MS. CURRAN: Okay. I'm just trying to

16 remember where I was.

17 JUDGE HAWKENS: You were on Contention A.

18 MS. CURRAN: Yeah.

19 JUDGE HAWKENS: Operation and

20 decommissioning.

21 MS. CURRAN: Oh, yeah. So there's two

22 reasons why this is not just an academic exercise.

23 First of all, this is an ANSI -- these are ANSI

24 regulations. They were promulgated for a reason, to

25 provide reasonable assurance that in fact highly

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1 radioactive spent fuel can be cared for adequately for

2 a long period of time in which we're going to have it

3 at reactive sites.

4 Second, PG&E has repeatedly referred to

5 itself as a contractor of the state. PG&E is now

6 holding itself out in a different light, in a

7 different relationship to the State of California.

8 The State of California is responsible for providing

9 funding for financial assurance for safe operation of

10 the ISFSI until the time of decommissioning starts.

11 The state, the ratepayers of the state,

12 the taxpayers of the state deserve to know where is

13 the money coming from. Are we paying for it? Who's

14 paying for it?

15 So those are the, I think, important

16 reasons why this information is important to provide.

17 And as the staff said in responding to our contention,

18 the operation of the plant is related to the ISFSI.

19 The ISFSI doesn't -- you might be able to say that in

20 March of 2022.

21 There's only one purpose for this ISFSI

22 going forward to store spent fuel. But as long as

23 operation is going on, there's a relationship there

24 that needs to be addressed.

25 JUDGE HAWKENS: PG&E argues that don't

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1 worry about that because the assumption we're using

2 provides a more conservative financial scenario. And

3 so you and the public should be satisfied with that.

4 How would you respond?

5 MS. CURRAN: I don't think necessarily is

6 more concerned. They have or this period which may be

7 between 5 and 20 years. They don't have access to the

8 decommissioning trust fund.

9 And the whole issue of financing of the

10 operation of Diablo Canyon is kind of up in the air

11 right now. The last thing we had from Public

12 Utilities Commission was approval of shutdown. That

13 was in 2018.

14 Now the PUC is going through a proceeding

15 where they're evaluating the prudence of allowing

16 Diablo Canyon to continue operating. I honestly don't

17 know how spent fuel storage factors into that. But

18 there's going to be a whole series of PUC proceedings

19 that have to do with covering the costs of Diablo

20 Canyon.

21 So it's not -- there's many things that

22 are uncertain here. And frankly if it were up to me,

23 I wouldn't be standing here today arguing about this.

24 I wish that PG&E had simply amended its application or

25 asked the Board hold off until we know what we're

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1 doing because it doesn't make any sense to rely on an

2 application that's so clearly out of date. And maybe

3 PG&E doesn't know what it's doing quite yet. But we

4 could all wait until that happens instead of arguing

5 in a hypothetical sense what might happen in the

6 future.

7 JUDGE HAWKENS: What about their argument

8 that the application permissibly reflects the status

9 quo? And there's no regulation that you've cited that

10 requires them to include in the application something

11 that's purely speculative, uncertain. How would you

12 respond to that?

13 MS. CURRAN: Well, I think calling it the

14 status quo is a little extreme. This is a company

15 that has applied to the NRC for permission to seek

16 reactor license renewal. We know that the NRC has

17 told them they can get timing renewal protection and

18 if they file by the end of 2023.

19 So the status quo is kind of blurry in

20 terms of if you apply the -- if you go through the

21 process of throwing us out now, then when PG&E files

22 a new reactor license application, I honestly don't

23 see where we have an opportunity to litigate how that

24 affects the ISFSI because you will have approved the

25 license. So we're here. We're here because this was

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1 the opportunity that came up. And we know that we get

2 60 days to ask for a hearing or else it's gone.

3 JUDGE ARNOLD: Six years ago, the

4 intentions of PG&E was to renew Diablo Canyon's

5 license and continue operating. A couple years ago,

6 the intention of PG&E was to shut down Diablo Canyon.

7 And now the intention of PG&E is to relicense Diablo

8 Canyon.

9 It looks like their intentions are a very

10 moving target, a very blurred issue I'm saying. I

11 wonder what legal requirement is there to make an

12 application that is being considered now reflect a

13 blurred future. I mean, yes, we would like it. But

14 is there a legal requirement?

15 MS. CURRAN: I think there is in the sense

16 that it's because what they say in the application

17 depends so much on whether there's an operation of the

18 reactor that's going on. And if you know that's in

19 the plans, then to pretend that doesn't exist, it's

20 not an accurate reflection of PG&E's intentions. And

21 therefore, we think that they need to at least address

22 it.

23 They could address it in the alternative.

24 They could say, well, if we -- maybe they'll have to

25 shut down the plant. Maybe they won't. Maybe the PVC

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1 will say we're not giving you this five years that the

2 legislature wants us to give you.

3 They could address that in the

4 alternative. They could say if we shut down, this is

5 what we'll do. If we keep cooperating, this is what

6 we'll do.

7 And then we would have the satisfaction,

8 we would have the assurance that PG&E knows where it's

9 going to get the money and what it's going to cost

10 depending on the timing of decommissioning. Okay.

11 I'd like to -- unless you have more questions about

12 the safety contention, I'd like to move on to the

13 environmental contention. Can you tell me how much

14 time I have left, please?

15 (No audible response.)

16 MS. CURRAN: Ten minutes? Okay. The

17 environmental contention states that PG&E's

18 environmental report isn't adequate to satisfy the

19 National Environmental Policy Act because the

20 statement of purpose and need only to the storage of

21 spent fuel that will be generated before the

22 expiration dates of 2024 and 2025 in the current

23 license until the repository becomes available. And

24 I can't remember one of you just pointed out that this

25 environmental report is called a supplemental

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1 environmental report. This is a supplement to the

2 original environmental report that was prepared in

3 2001.

4 And if you go back to that environmental

5 report, it talks about the relationship between the

6 operation of the plant and the ISFSI. At the time

7 PG&E thought or they knew that they could only operate

8 until 2006 and they were going to have to close down

9 if they didn't have additional spent fuel storage

10 capacity. So they evaluated a range of alternatives.

11 They came up with dry storage. They said

12 the dry storage facility is going to hold all the fuel

13 that we generate until 2024 and 2025. And they said

14 they picked dry storage over pool storage based on an

15 overall assessment of operational and safety

16 considerations, the amount of spent fuel to be

17 generated, the transportation requirements associated

18 with the alternatives, resources needed, and

19 scheduling restraints.

20 So PG&E looked at the whole picture of

21 operation and spent fuel storage and chose the ISFSI.

22 They chose to build an ISFSI on a single license.

23 They chose to build it big enough to hold all the

24 spent fuel that they would have.

25 And they said that in the environmental

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1 report. And then they said that in the updated final

2 safety analysis report. We also know and this on page

3 -- I think it's page 11, note 15 of our hearing

4 request that the State of California has a policy

5 favoring moving fuel from the pools to the dry storage

6 facility. This is saying whenever the NRC -- the

7 NRC's continue storage rule says --

8 JUDGE HAWKENS: Can you explain why

9 California statutes and policy are within the scope of

10 this proceeding?

11 MS. CURRAN: Two reasons. One is that

12 PG&E calls itself a contractor to the state and should

13 be talking about the policy issues associated with

14 spent fuel storage that are important to the state.

15 And second, NEPA generally --

16 (Simultaneous speaking.)

17 JUDGE HAWKENS: I apologize for

18 interrupting. But what regulation are you basing

19 that, it requires them to address state statues and

20 policy?

21 MS. CURRAN: It's simply because in effect

22 PG&E is saying that they're standing in the shoes of

23 the state and making these environmental decisions.

24 I don't have a regulation for that. This is a very

25 unusual situation. I've never seen anything like it

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1 before.

2 And NEPA is a statute that requires

3 reasonable decision making. If you look at the

4 circumstances and decide what are reasonable array of

5 alternatives we looked at. What's a reasonable impact

6 analysis?

7 And I would submit that if the State of

8 California thinks that moving spent fuel into the

9 ISFSI is an important policy consideration and if PG&E

10 is a contractor to the state, that ought to be

11 discussed. And also -- yeah, I think that's -- I

12 think that's all I'll say. So in our view, the

13 statement of purpose and need now that we know PG&E is

14 planning to continue to operate the reactors for 5 to

15 20 years, circle back to the initial environmental

16 report and talk about the purpose and need document,

17 how has it been satisfied, how has it changed, and

18 what are the current considerations that are important

19 to our contractor, the State of California?

20 JUDGE HAWKENS: They argue that they have

21 60 years of storage combined with dry storage and wet

22 storage. That's sufficient for the 20 years of

23 conditional operating time for the reactors. And in

24 light of that, their purpose and needs statement is

25 adequate and what they consider is adequate. What's

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1 wrong with that argument?

2 MS. CURRAN: Judge Hawkens, I think that

3 one of the really important things about an

4 environmental assessment is that it informs the

5 affected members of the public. Right now, if you

6 were somebody who picked up the environmental

7 assessment and you're just reading it and you know

8 that PG&E is planning to operate these reactors for

9 some extended period of time, reading it because it's

10 been approved for a hearing process knowing what

11 PG&E's current plans are, you could easily think that

12 PG&E is representing that they are going to safety

13 store all of the quantity of spent fuel to be

14 generated by the Diablo Canyon reactors in this ISFSI

15 which, of course, is I think it's pretty universally

16 agreed that dry storage is safer than pool storage

17 because you don't have the potential for draining the

18 pools which is a matter of concern to the State of

19 California and others because of the potential for

20 earthquakes in that area.

21 So if you're a member of the public and

22 you're reading this document, you don't have a clear

23 understanding of what exactly is going on. You don't

24 have a clear understanding of the fact that if PG&E

25 operates even five more years, it may not have enough

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1 room in the ISFSI for all the spent fuel that will be

2 generated. And that's for however many years until we

3 have a repository.

4 Fuel could be remaining in the pool. Some

5 amount of fuel could be remaining in the pool. The

6 public is entitled to disclosure of all this. So the

7 state lawmakers, policymakers, members of the public

8 can debate, is this what we want?

9 And these are -- the purpose of an

10 environmental assessment is to educate people who

11 might be applying this under state law. They take the

12 facts that are presented in a federally approved

13 document and say, well, these are the facts that we

14 have to work with. It's really important that these

15 documents should be up to date and clear because

16 they're used for many purposes. And I think I will

17 close right there.

18 JUDGE HAWKENS: All right. You have two

19 minutes remaining. That'll be added to your rebuttal

20 time.

21 JUDGE HAWKENS: Thank you.

22 JUDGE HAWKENS: Mr. Lighty, you may

23 proceed, sir. I'd ask as well sometime if you could

24 incorporate into your argument, although you did not

25 oppose standing, just inform us why you did not oppose

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1 standing.

2 MR. LIGHTY: Yes, thank you, Your Honor.

3 And may it please the Board, Ryan Lighty on behalf of

4 PG&E. We know Your Honors have studied the briefs.

5 And we don't intend to use our presentation to simply

6 repeat those briefings.

7 But we will like to use a portion of our

8 time to discuss a few key issues that are particularly

9 important here and to respond to some assertions that

10 were in the staff's answer and the petitioner's reply.

11 And we'd like to start with two overarching topics

12 that inform the discussion today and then move into

13 the discussion of the individual contentions in turn

14 and then respond to some of petitioner's arguments

15 that have been presented today. And I expect our

16 prepared remarks will take less than half of our time,

17 so plenty of time for Board questions.

18 And I'll start off addressing the standing

19 issue as you requested, Your Honor. We did not

20 analyze that issue in depth because in our view, the

21 standing analysis is immaterial given that neither of

22 the contentions is admissible. That petition must be

23 denied for that reason alone.

24 So we didn't conduct an analysis of

25 standing. But to go to Judge Arnold's point about the

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1 Bell Bend proceeding, we certainly agree that a fress

2 standing demonstration must be made in every

3 proceeding. You cannot rely on the factual predicate

4 from a prior ruling. And that must be demonstrated

5 fresh in each proceeding.

6 To the extent that petitioners rely only

7 on their finding of standing in the initial ISFSI

8 licensing proceeding, I would note that that's a

9 different type of proceeding. And an initial

10 licensing proceeding is different than a license

11 renewal proceeding. And so to the extent that the

12 standards are different, that case law may or may not

13 apply squarely here. So turning back to the two

14 overarching topics.

15 JUDGE HAWKENS: To be clear, you do not

16 opposed standing?

17 MR. LIGHTY: Correct, Your Honor.

18 JUDGE ARNOLD: And one other thing, not

19 proposing standing, are you agreeing that your ISFSI

20 poses an obvious potential for off site consequences?

21 MR. LIGHTY: We do not necessarily agree

22 with that assertion.

23 JUDGE HAWKENS: Although you haven't

24 opposed it because you haven't opposed standing?

25 MR. LIGHTY: Correct, correct. To the

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1 extent that off site consequences must be

2 demonstrated, they have to be demonstrated at a

3 particular radius, specific to the type of licensing

4 action that is presented. And so to the extent that

5 the representations and the standing declarations

6 don't mean that radius, then obviously it would be

7 petitioner's burden to make the demonstration that it

8 does apply here.

9 So turning back to the overarching topics,

10 the overarching themes presented here today, first, we

11 want it to be crystal clear that the LRA was complete

12 and accurate when it was submitted. And still to

13 date, it accurately reflects the legal status quo.

14 Based on the current legal posture, the reactor

15 operating licenses are set to expire at the end of

16 their initial four year terms.

17 And absent intervening circumstances that

18 would materially change the facts of the ground,

19 that's what will happen. No one disputes that PG& is

20 planning to seek renewal of its licenses, but it

21 hasn't done so yet. No application has been filed.

22 No application has been docketed.

23 And that speculative application certainly

24 has not been approved yet and is noted in our brief at

25 Footnote 46. The California Public Utilities

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1 Commission or CPUC also has not yet authorized that

2 continued operation. So there are several gates that

3 must be passed through before continuing operation

4 could become the legal reality.

5 In fact, the petitioners currently

6 participating in at least three different proceedings,

7 in state court, in federal court for CPUC seeking to

8 prevent continued operations. So for the petitioner

9 to argue here that the ISFSI license renewal

10 application was required to assume continued operation

11 is a big disingenuous. At bottom, the LRA currently

12 reflects the most up-to-date legal information

13 regarding the status of the DCPP reactor license.

14 JUDGE HAWKENS: At what point would PG&E

15 be required to amend the application?

16 MR. LIGHTY: Well, I think that's a good

17 question and an issue that petitioner should've

18 addressed in their petition. They haven't identified

19 any regulation in Part 72 that requires the LRA which

20 was complete and accurate at the time it was filed to

21 be updated to reflect an inchoate scenario involving

22 potential future licensing applications in a different

23 in a different proceeding. And our view is that there

24 is no such regulation in Part 72 that requires that

25 update to be made under these circumstances.

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1 JUDGE HAWKENS: And can you answer the

2 question? Then when were you required to amend it,

3 the license renewal application?

4 MR. LIGHTY: I think in our view when the

5 reactor -- if the reactor licenses are, in fact,

6 renewed, that would be a substantially changed

7 circumstance that should be reflected in the

8 application.

9 JUDGE HAWKENS: But not when the licensed

10 reactor renewal application is filed?

11 MR. LIGHTY: Well, I think that there

12 could be an colorful argument made for petition for

13 rulemaking to establish a rule that requires that.

14 But the current regulations do not contain that

15 requirement. And petitioner certainly hadn't

16 demonstrated that much.

17 So at the end of the day, the application

18 was complete and accurate when it reflects the current

19 legal reality and nothing more is required. The

20 second overarching matter, we want to reiterate the

21 speculative nature of petitioner's ISFSI expansion

22 clubs. The petitioner suggests that if the reactor

23 operating license are renewed and if the units

24 continue to operate, then PG&E will be required to

25 expand this specific licensed ISFSI to accommodate 60

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1 years' worth of spent fuel.

2 That's factually and legally incorrect.

3 To be clear, PG&e is not seeking to expand this ISFSI

4 at this time. That's a fact that petitioner does not

5 dispute.

6 The existing storage as the ISFSI are

7 sufficient to store all spent fuel generated during

8 the initial 40-year term. The spent fuel pools are

9 capable of holding another 20 years of spent fuel. So

10 PG&E currently has the ability to store 60 years'

11 worth of spent fuel at the site without expanding any

12 facilities. That's another fact petitioner does not

13 dispute.

14 JUDGE TRIKOUROS: Mr. Lighty, let me

15 interrupt you. Does that 60-plus -- the 40 plus 20

16 components, do they include the ability to offload a

17 full core at the end of that 60-year period?

18 MR. LIGHTY: I believe so, Your Honor. I

19 believe it does contemplate the entire inventory of 40

20 years of operation including final core. But even

21 assuming for the sake of argument that additional dry

22 storage is required at some point in the future, for

23 example, after a permanent shutdown of the reactors

24 just for their decommissioning, PG&E could elect to

25 develop that capacity.

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1 But regardless of whether that would occur

2 via a general license for a new ISFSI, a new specific

3 licensed ISFSI, or an amendment to this specific

4 licensed ISFSI. Any expansion would be subject to a

5 separate regulatory process. So the bottom line is

6 that the current license capacity of this ISFSI does

7 not hinge on whether the reactors operate beyond 40

8 years.

9 And to the extent that petitioners allege

10 otherwise, its claims are factually incorrect based on

11 the plan test of the terms of the ISFSI license that

12 is proposed to be renewed here. So turning now to the

13 two contentions. In Contention A, petitioner presents

14 three challenges to the safety portion of the

15 application. The first relates to financial

16 qualifications, the second to decommissioning funding

17 insurance, and the third relates to the General Design

18 Criteria or GDC.

19 As we understand petitioner's reply at

20 pages 3 and 4, it has dropped its GDC claim. So our

21 discussion will focus only on the first two arguments,

22 both of which are financial in nature. And here, we

23 ask the Board to take particular note, and this is

24 important.

25 Both of these financial arguments rest on

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1 the same assertion that the material deficiency in the

2 application is that it does not consider the financial

3 and decommissioning implications of storing 60 years'

4 worth of spent fuel on the ISFSI. For example, page

5 6 of the petition criticizes the decommission finding

6 discussion because it does not address, quote, the

7 cost of decommissioning the ISFSI, end quote, if it

8 stores 60 years' worth of spent fuel. Likewise, page

9 7 of the petition alleges the application does not,

10 quote, account for increased operating costs, end

11 quote, of storing 60 years' of spent fuel.

12 But as I mentioned earlier, this license,

13 the only one at issue in this proceeding, does not in

14 any way authorize storage of 60 years of spent fuel.

15 Simply put, there's no legal or regulatory obligation

16 to analyze that unlicensed scenario in the safety

17 application. So setting side those ISFSI expansion-

18 related claims, the only arguments left in the

19 petition are petitioner's bare complaint application

20 on its face just doesn't mention the possibility of

21 license renewal.

22 But the petitioner doesn't identify any

23 reason that circumstance in and of itself constitutes

24 a material defect of the application. Materiality

25 matters, Your Honors. In fact, it's probably the most

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1 important consideration in adjudicating Contention A.

2 It is the fundamental premise of Section 2.309F1 XIII

3 6 that places an affirmative burden on the petitioners

4 to, quote, show that a genuine dispute exists with the

5 applicant, slash, licensee on a material issue of law

6 or fact.

7 JUDGE HAWKENS: Mr. Lighty, a question for

8 you. You have a very strong hyper technical argument.

9 But I think the regulations when they require you to

10 provide the NRC with complete and accurate information

11 in the license renewal application, for you to ignore

12 the change in circumstances since when you first

13 submitted this application. Now you're directed to

14 seek renewal. And it's not -- I don't think in your

15 pleading you ever said that PG&E intends to seek

16 renewal of the reactors, does it?

17 MR. LIGHTY: Yes, at this time --

18 JUDGE HAWKENS: Okay.

19 MR. LIGHTY: -- PG&E does intend to seek

20 renewal. Again, there are several hurdles, several

21 gates, several rules.

22 JUDGE HAWKENS: Whether it will be

23 approved or not. But in your license renewal

24 application which is entirely correct at the time, you

25 indicated you were going to shut down in 2024, 2025

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1 and made representations regarding operational --

2 financial operational ability and decommissioning

3 financial ability based on that assumption. And that

4 assumption hyper technically is still correct.

5 But as a practical matter, it's not. And

6 that raises a genuine dispute about financial ability

7 for an operation and decommissioning. Not as a

8 practical matter because as the NRC staff observes, it

9 appears based on California statute which provides you

10 with the necessary rate income you need for operation

11 and decommissioning.

12 That shouldn't be a problem. But the NRC

13 staff and the public is entitled to accurate and

14 complete representations, I think it is my sense in

15 your license renewal application. And there seems to

16 be a genuine question as to whether those

17 representations are complete and accurate. And there

18 wasn't a discrete question in there, but could you

19 respond to that?

20 MR. LIGHTY: Certainly. I have a couple

21 of thoughts on that. The first is we're here to

22 discuss the compliant status of the LRA. It was

23 complete and accurate at the time it was filed.

24 There's no dispute about that. The question is

25 whether there is a duty of the applicant to then

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1 update the application based on --

2 (Simultaneous speaking.)

3 MR. LIGHTY: -- what petitioners are

4 arguing are materially changed circumstances. And I

5 think that when you compare this, for example, to a

6 Part 54 license renewal proceeding for a reactor,

7 there is a regulation that requires an annual update

8 to the application to contain certain information.

9 That does not exist in Part 72.

10 The standard that is in Part 72 is simply

11 the completeness and accuracy requirement. That

12 requires documents submitted to the NRC. And I

13 believe the regulation is 10 CFR 72.11 to be complete

14 and accurate in all material respects.

15 But Subpart B of that regulation discusses

16 the duty to update information based on the discovery

17 of a significant safety issue. What we haven't seen

18 is petitioners acknowledge or address that standard or

19 explain or offer any theory as to why it's satisfied

20 here based on its claims in the petition. As we've

21 discussed, these ISFSI expansion claims are factually

22 and legally incorrect.

23 And all you're left with is a statement

24 that on the face of the application, it does

25 acknowledge the possibility of reactor license

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1 renewal. But there's no further discussion why that

2 matters outside of these expansion-related claims that

3 petitioners were raising. The Commission has long

4 used the word flyspecking to describe minor and

5 insignificant miss regarding environmental review that

6 do not work here because they have no material impact

7 on the proceeding. And in general, flyspecking is

8 just another way of describing the absence of

9 materiality. Materiality applies to both

10 environmental and safety contentions.

11 JUDGE HAWKENS: On the safety contention,

12 though, in your application, you say, starting

13 November 24, the source of funds to operate and

14 decommission the ISFSI will include the

15 decommissioning trust fund, accurate once submitted,

16 accurate now. But the license renewal application for

17 the reactors is submitted and approved, it will no

18 longer be accurate, correct?

19 MR. LIGHTY: Correct. Whether it's

20 material is a separate question. And at what point it

21 becomes material I think is another unresolved

22 question. In our view, it is not material at this

23 time.

24 The compliance status of the application

25 is that it was complete and accurate when you filed.

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1 And the duty to update in 72.11B has not been

2 triggered. Because at the end of the day, stripping

3 away the petitioner's ISFSI expansion claims, there's

4 nothing in the petition or that we've heard in

5 arguments today that would, quote, change the outcome

6 of the proceeding.

7 That's the fundamental requirement for

8 material knowledge. In fact, all of the participants

9 seem to agree that there are no material concerns

10 about PG&E's financial qualifications to operate the

11 existing ISFSI. Staff's answer at Footnote 61

12 disavows any, quote, substantive concerns, end quote.

13 And petitioner doesn't allege any material

14 concerns that are unrelated to ISFSI expansion which

15 isn't proposed here and isn't part of this licensing

16 action. Now we know that staff takes the position

17 that proposed Contention A is admissible because as

18 noted in it brief at page 11, quote, operations at the

19 DCMPP are connected to operations at the Diablo Canyon

20 ISFSI by the application. And the application does

21 not appear to address a potential change in the

22 planned retirement date of the DCMPP, end quote.

23 But that's not the end of the inquiry. As

24 the staff notes a few pages later in the last sentence

25 of the partial paragraph at the top of page 14, staff

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1 says, quote, SLOMPF has not demonstrated how such

2 potential operations render the application

3 insufficient, end quote. We agree.

4 We completely agree. That is absolutely

5 correct. Petitioner has not alleged much less

6 demonstrated any material deficiency in the

7 application that is unrelated to ISFSI expansion. And

8 that's what renders proposed Contention A inadmissible

9 because materiality matters.

10 Taking a step back for a moment. One

11 overarching purpose of the contention admissibility of

12 criteria is to limit evidentiary hearings to matters

13 where inquiry and depth is appropriate. But that's

14 not the case here.

15 It is not necessary to convene a formal

16 hearing at significant taxpayer expense, at

17 significant rate payer expense to determine whether

18 PG&E is financially qualified to continue operating

19 the ISFSI. We already know the answer to that

20 question. As a matter of law, PG&E is presumed

21 qualified.

22 In fact, that's exactly what the

23 Commission said in 2003 during the initial licensing

24 of the ISFSI, CLI-03-12 which is cited in our brief.

25 The petitioners here do not even alleged the existence

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1 of any information that would rebut that presumption

2 of law. So to put it in plain terms, a hearing under

3 these circumstances would be a textbook example of the

4 type of wasteful and unnecessary hearing that the

5 admissibility rules were purposefully designed to

6 avoid.

7 Think of it this way. Even if the

8 application contained a token acknowledgment of a

9 possibility of reactor license renewal, it wouldn't

10 make one bit of difference in the outcome of this

11 proceeding because PG&E is financially qualified to

12 continue operating the ISFSI regardless of whether the

13 reactor licenses are renewed. And no participant in

14 this proceeding has claimed otherwise.

15 So onto the separate issue of

16 decommissioning find. Petitioner also fails to

17 identify a material defect in the LRA. As I noted

18 earlier, the petitioner's principle criticism here is

19 that the application doesn't evaluate the cost of

20 decommissioning an ISFSI with 60 years of spent fuel.

21 But this license doesn't authorize 60 years of spent

22 fuel to be stored there.

23 So that's not a defect in the application

24 at all, much less the material. As to decommissioning

25 the AS licencing facility for 40 years of spent fuel,

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1 the decommissioning projections in the application are

2 conservative. And petitioner makes no demonstration

3 that anything further is required.

4 Now what I mean by conservative is that

5 the LRA assumes that PG&E will begin drawing down on

6 the decommissioning trust fund in 2024 to cover ISFSI

7 operating costs. Then as a result, the fund balance

8 would begin decreasing. The money starts going down.

9 In contrast, under a scenario where the

10 reactors continue to operate, that fund instead of

11 decreasing in value would continue to grow. NRC

12 regulations in 10 CFR Section 50.75 E1 VIII 1 permit

13 a licensee to assume a two percent annual real rate of

14 return on decommissioning funds. So instead of the

15 terms, deferred withdrawals equal additional growth.

16 That's just a common sense observation.

17 It certainly doesn't require an evidentiary hearing.

18 And particularly where petitioner has not identified

19 a material reason why anything beyond that

20 conservative analysis and the application is required

21 or even meaningful in this proceeding.

22 At the end of the day, petitioner's ISFSI

23 expansion related claims are factually and legally

24 baseless. And petitioner otherwise hasn't identified

25 any reason that the financial projections in the

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1 application as currently written to accurately reflect

2 the legal status quo are materially deficient in any

3 way. Again, materiality matters here, Your Honors.

4 Shifting gears to proposed Contention B,

5 petitioner attacks the purpose and needs statement in

6 the ER supplement because it does not mention possible

7 renewal of the reactor on the licenses. But that line

8 of argument also misses the mark. The purpose and

9 needs statement in the ER supplement does not mention

10 a need to store 60 years' worth of spent fuel because

11 that is not, in fact, the purpose of this action.

12 Petitioner identifies no unmet legal

13 requirement for the purpose and needs statement to

14 contemplate anything more. Quite simply, petitioner

15 has not identified any deficiency in the purpose and

16 needs statement in the LRA. And the contention should

17 be rejected for that reason alone.

18 Now we understand that there are a couple

19 of other core arguments in Contention B that I'd like

20 to briefly mention regarding alternatives and

21 cumulative impacts. As noted in our brief, Contention

22 B alleges a defect in the purpose and needs statement

23 and then claims that some aspect of the alternatives

24 were cumulative impact discussions, supplies, and

25 supporting basis for that contention. But as PG&E and

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1 the NRC staff have explained in our respective briefs,

2 there is no defect in the purpose and needs statement.

3 And so without that defect in the first

4 instance, those assertions are not alternatives and

5 cumulative impact provide no support for the

6 overarching claim. But going one step further just

7 for the sake of argument. Even if we considered those

8 assertions as separate standalone claims or

9 contentions, they would still be inadmissible for

10 multiple reasons.

11 For example, petitioner offers conclusory

12 assertions that the alternatives and cumulative impact

13 discussions are deficient. But it doesn't identify a

14 single reasonable alternative that hasn't been

15 considered or a single cumulative impact that hasn't

16 been considered. As another example, given that this

17 is a Part 72 license renewal proceeding, the ER

18 supplement is only required to address, quote,

19 significant environmental changes, end quote, pursuant

20 to 10 CFR Part 72.

21 So petitioner doesn't acknowledge that

22 standard. And it certainly doesn't offer any

23 explanation as to how it's met or satisfied it here.

24 So in sum, these arguments do not support a challenge

25 to the purpose and needs statement.

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1 And even if you had standalone

2 contentions, these corollary claims would be

3 inadmissible in their own way. And for these and many

4 other reasons stated in our brief, we believe that

5 neither Contention A nor Contention B are admissible

6 and that the Board should dismiss the petition

7 accordingly. I did want to address just a couple of

8 comments that we heard from petitioner's counsel a few

9 minutes ago.

10 In the discussion that we heard, there was

11 a suggestion that the application at Appendix G-4

12 discussed the decommissioning timberline be based on

13 a prompt ISFSI decommissioning scenario. And that is

14 correct. But what the Board should understand here is

15 that the decommissioning timberline for the ISFSI is

16 not affected by plant operation. The ISFSI will store

17 the fuel from the initial 40 years of operation and no

18 more, absent some other future licensing action.

19 The timing for the removal of that fuel

20 doesn't depend on whether the reactor contained

21 Doppler. That depends on DOE's performance or the

22 availability of a consolidated interim storage

23 facility or some other outside action that is not

24 affected by plant license renewal. So the

25 decommissioning timberline for the ISFSI isn't

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1 affected by the plant license renewal.

2 I also wanted to respond to counsel's

3 claim that petitioners didn't know how the ISFSI

4 operating costs would be funded if the plant license

5 is already renewed. As noted in our brief at page 14,

6 Footnote 53, the SB 846 statute passed by the

7 California legislature and signed by the California

8 governor says that those operating costs will be

9 recovered through the normal rate making process. And

10 finally, I'd like to respond to counsel's assertion

11 that PG&E is a contractor to the state.

12 PG&E has not called itself out as acting

13 on behalf of the State of California in this ISFSI

14 license renewal proceeding, period. So I just wanted

15 to clarify that for the Board. And I'm happy to take

16 any other questions Your Honors may have.

17 JUDGE TRIKOUROS: I just want to

18 understand the picture at the end of 60 years. We're

19 looking at an ISFSI that has 40 years of fuel in it.

20 So we're looking at a spent fuel pool that has 20

21 years of fuel in it apparently with enough empty space

22 to also include a full core.

23 Otherwise, I suppose you would not make it

24 to that point. You'd have to stop in prior years or

25 do something at the end of that, when you ran out of

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1 that ability to offload. The decommissioning

2 activities as I see them would not be able to begin at

3 that point because the -- well, I'll phrase it as a

4 question. Could you begin decommissioning activities

5 with the fuel and that state that I just mentioned, 20

6 years in the spent fuel pool and 40 years in the

7 ISFSI?

8 MR. LIGHTY: Are you talking about could

9 decommissioning begin with a plan --

10 (Simultaneous speaking.)

11 MR. LIGHTY: I think that partial

12 decommissioning activities could begin. Obviously,

13 the plant itself could not be fully decommissioned

14 with spent fuel still in the pool.

15 JUDGE TRIKOUROS: So there would be a

16 requirement to expand the storage requirements for

17 spent fuel at that point. But it would not

18 necessarily involve this particular ISFSI. Is that

19 correct?

20 MR. LIGHTY: Correct. If a policy

21 decision or a mandate of a state said you must fully

22 decommission the reactor, take the fuel out of the

23 spent fuel pool, and assuming that there was no

24 consolidated interim storage facility available that

25 DOE has not completed a permanent repository at the

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1 end of the 40-year license renewal period of the

2 ISFSI, then potentially there would be a need to have

3 other dry storage on site. But as you mentioned,

4 Judge Trikouros, it could either be through the

5 general license, a separate specific license, an

6 amendment to this specific license. But none of that

7 is being proposed as part of this license renewal.

8 JUDGE TRIKOUROS: And it doesn't have to

9 be dry storage, actually, I suppose. It could be any

10 number of other options.

11 MR. LIGHTY: True. We have seen other

12 precedent where fuel goes from one site to another

13 site, even though that site is not necessarily

14 consolidated interim storage facility but potentially

15 in an aggregator site.

16 JUDGE TRIKOUROS: All right. Thank you.

17 JUDGE HAWKENS: Thank you.

18 MR. LIGHTY: Thank you, Your Honors.

19 JUDGE HAWKENS: You may proceed, sir.

20 Thank you.

21 MR. GENDELMAN: Thank you. Good

22 afternoon. May it please the Board. My name is Adam

23 Gendelman from the NRC staff. Thank you for the

24 opportunity to discuss the staff's position on San

25 Luis Obispo Mothers for Peace's petition. I plan to

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1 discuss staff use on the principle issues in dispute,

2 especially Contention A, as each party has a different

3 view, address the important points for you today. And

4 I'd be happy to answer the Board's questions.

5 JUDGE HAWKENS: Could you also start off

6 with a brief discussion on your view of standing?

7 MR. GENDELMAN: Happily, Your Honor. I

8 think you and Judge Arnold captured the staff's

9 position exactly with regard to the discussion of the

10 proximity-plus standard. In the staff's view, as you

11 noted, Judge Hawkens, this is an application for the

12 renewal of a facility to store 2,100 metric tons of

13 spent fuel.

14 And in the staff's view, that action meets

15 that standard. To be clear, that's not a reflection

16 on the actual probability of any event that could

17 cause such consequences. But especially given this is

18 a license renewal proceeding versus, for example, an

19 amendment on some more auxiliary matter that we can

20 say it's been demonstrated.

21 JUDGE HAWKENS: And based on the legal

22 rational and the licensing board's 2002 standing

23 decision in the Diablo Canyon case, you still find

24 that to be a reasonable analysis?

25 MR. GENDELMAN: It's informative. With

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1 regard to the previous discussion about a fresh

2 assertion of standing, I think we agree with

3 petitioner that they have made that fresh assertion

4 here. I think it's appropriate to note past similar

5 circumstances and how they were disposed of.

6 But the petition doesn't say, oh, we were

7 granted standing in the past. So we have standing

8 now. It makes that fresh assertion as both in the

9 petition and in the updates.

10 JUDGE ARNOLD: Where in the petition does

11 it even assert that there's a potential for offsite

12 consequences?

13 MR. GENDELMAN: So in our reading of the

14 affidavits, the affiants note their concerned about

15 continued operation of the ISFSI jeopardizing their

16 health and safety and the quality of the environment.

17 And so that's the language that we think it

18 demonstrates those concerns.

19 JUDGE ARNOLD: That demonstrates that they

20 have concern. But does it demonstrate that there's an

21 obvious potential for damage?

22 MR. GENDELMAN: No, I think, as I said,

23 the staff's view is we're not contesting standing in

24 the light of the fact that this is a major license

25 proceeding, the proceeding whose disposition affects

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1 whether or not this facility will continue to operate

2 coupled with the amount and radioactivity that the

3 material could be stored, and the potential, however

4 small, of what dispersion of that material could bring

5 about.

6 JUDGE ARNOLD: So essentially, you're

7 filling in the assertion that there's an obvious

8 potential for consequences based upon your knowledge

9 of what this facility is, what's stored there?

10 MR. GENDELMAN: I'm not sure I would

11 characterize it that way. But staff's view is that

12 standing has been adequately pled. I understand the

13 Board's questions with regard to some of those square

14 corners. But I think consistent with both previous

15 practice, it's inferential, not binding authority that

16 standing has been demonstrated.

17 JUDGE TRIKOUROS: Just one question along

18 those lines. Does the fact that this plant is in the

19 Ninth Circuit and that terrorist activities are soon

20 to occur in that circuit, would you say that the

21 licensing basis of this plant, Diablo Canyon, includes

22 the potential for terrorist activity associated with

23 the spent fuel, the ISFSI?

24 MR. GENDELMAN: So I believe I understand

25 your question. And I would certainly say that ISFSIs

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1 in the Ninth Circuit and all others are appropriately

2 required to mitigate against both safety and security

3 risk consistent with NRC requirements. With regard to

4 standing, I don't think it is aggravated or mitigated

5 in any particular circuit.

6 But as I said, the staff's read of the

7 proximity-plus standard is about the potential for

8 consequences distinct from an actual probability. So

9 I'll unpack that for a second. For example, if this

10 was a proposal to add a single cask, for example, to

11 go from 2,100 tons to 2,150 metric tons. I think the

12 analysis might be different because at issue is the

13 condition of a single cask versus the renewal of the

14 entire facility.

15 JUDGE HAWKENS: Thank you.

16 MR. GENDELMAN: So to begin, this

17 proceeding, of course, concerns PG&E's application to

18 renew its ISFSI license under Part 72. It's not a

19 proceeding for the renewal of a reactor license

20 renewal nor is it a proceeding as the applicant noted

21 several times to otherwise amend PG&E's Part 72

22 license to resign the facility or change the amount of

23 material that can be stored there. In one case

24 identified in the petition, the ISFSI renewal

25 application creates a linkage between the retirement

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1 of the Diablo Canyon reactors and satisfaction of

2 financial qualification requirements in 10 CFR 72.22E.

3 In that one case, the developments

4 associated with potential reactor renewal are relevant

5 and indeed in the staff's view the basis for an

6 admissible contention but relevant only because they

7 bear factually on the satisfaction of regulatory

8 criteria in this proceeding. This framework unknots

9 the central question we think presented by both

10 contentions which is with respect to this Part 72

11 proceeding, what is the significance, if any, of the

12 recently developments associated with the potential

13 for continued operations at the Diablo Canyon

14 reactors? We think the answer indicated is that

15 they're relevant only insofar as they bear upon the

16 ISFSI license renewal application and the applicant's

17 satisfaction of requirements again in this proceeding.

18 This framework also shows why the

19 petition's other arguments in Contention A and

20 Contention B do not succeed because the other sited

21 portions of the ISFSI renewal application do not rely

22 on the timing of the retirement of the Diablo Canyon

23 reactors as the basis for meeting regulatory

24 requirements in Part 72. And therefore, these recent

25 events concerning that potential for continued

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1 operations are not similarly relevant to this

2 application. And so with respect to Contention A as

3 noted in his answer, the staff views the portion of

4 Contention A concerning financial qualification in

5 72.22E to be admissible.

6 JUDGE HAWKENS: And that's all that's

7 before us now since petitioner's filed a reply. Isn't

8 that correct? And let me ask it another way. I

9 understand based on petitioner's reply, I think I

10 would understand that you agree now that their

11 contention should be admissible in full? And if not,

12 could you tell me when?

13 MR. GENDELMAN: I'm not sure that I

14 understood the reply to drop the 7230 financial

15 assurance argument as distinct from 7222 financial

16 qualifications argument. But otherwise, yes.

17 JUDGE HAWKENS: All right. We'll follow

18 up with that in rebuttal. Please proceed.

19 MR. GENDELMAN: So in sum, 72.22E requires

20 an applicant to demonstrate its financial

21 qualifications and that they either have the necessary

22 funds or have reasonable assurance of obtaining them

23 to cover operating costs in the prime life of the

24 facility, in this case, a 40-year renewal for the

25 ISFSI, not to be confused with the other, as well as

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1 the cost of decommissioning the ISFSI facility. The

2 application provides that this funding will derive

3 from the rate making process until November 2024 at

4 which time funding will include the reactor

5 decommissioning trust fund. The petition contrasts

6 these representations with the recent developments

7 concerning the potential for continued operations at

8 the Diablo Canyon reactors, the passage of California

9 law, SB 846, the exemption request from the applicant,

10 the letter where the applicant states its intent as we

11 heard today to take the necessary steps to operate

12 Diablo Canyon reactors beyond the dates in their

13 current license.

14 Petition concludes that therefore the

15 applicant has not demonstrated financial

16 qualifications in light of these circumstances.

17 First, the staff does not have a position on the

18 sufficiency of this or any provision in the

19 application as the staff has not completed its

20 technical or environmental reviews, but does find this

21 portion of Contention A to be admissible as it meets

22 the individual requirements of 2.309 F1. And as

23 discussed, the staff believes that the petition has

24 demonstrated standing.

25 The applicant in its answer and today

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1 counters on what I would call two principle runs.

2 First, the application is accurate. The licenses

3 right now do say that the reactor is -- that they are

4 to retire in 2024 and 2025 and that it would be rather

5 speculative on the part of PG&E to assume future

6 regulatory actions.

7 They submitted a renewal license

8 application that the NRC would approve it and then to

9 now in the present rely upon all that in its

10 application. Further, as the applicant notes, PG&E

11 has not actually submitted a renewal application and

12 has not even intended renewal notwithstanding the

13 timely renewal exemption that the applicant requested

14 and the staff issued this past March. In response, I

15 would say that the applicant is correct as to the

16 current -- I think as you fashioned it, legal

17 regulatory posture, sort of the legal reality.

18 And understandably stress the potential,

19 not certainty, for the extension of reactor operating

20 life. But I think this can differ on the significance

21 of these recent factual developments in light of the

22 language in the application, specifically, the linkage

23 in the application between the retirement of Unit 1

24 and the applicant's satisfaction of 72.22B. The

25 potential extension of the Diablo Canyon reactor

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1 licenses is run in here because it bears upon the

2 availability of funding sources identified in the

3 application, in the ISFSI renewal application.

4 Specifically, the applicant's recent

5 statements about its intent to continue Diablo Canyon

6 reactor operations is accurate, it is not clear in the

7 decommissioning trust funds would be available to

8 support ISFSI operations in 2024. Thus, in the

9 staff's view, this disagreement between the petitioner

10 and the applicant over the significance of these

11 events for the applicant's demonstration of compliance

12 with 72.22B is indeed a material dispute and

13 illustrates the satisfaction of 2.309 F16 regarding

14 that requirement. And so --

15 JUDGE HAWKENS: I think in your brief, you

16 indicated you had no substantive concern in the long

17 run about PG&E and feel like it's financial

18 obligations. So why is it material?

19 MR. GENDELMAN: So that's right, Your

20 Honor. And I think that gets to PG&E's second

21 argument which has a couple of different forms, both

22 they and in their answer that either a continued

23 operation scenario where both rate case funding

24 followed by at some time decommissioning trust fund

25 funding is conservative vis-a-vis what's in the

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1 application. I believe I saw something that even SB

2 846 itself has some funding provisions. And then sort

3 of in any scenario given the Commission case law about

4 rate making authority being sort of a presumptive

5 demonstration of reasonable assurance that in any

6 scenario adequate funding would be available. So the

7 contention should not be omitted.

8 I think with regard to all of these

9 arguments, the staff has a short if not pithy answer

10 in that I think we agree with the petitioner in their

11 reply that all these arguments may very well be right.

12 But they all get to the merits. Does the applicant

13 satisfy 72.22E where the person here is, has the

14 petition satisfied the contention and admissibility

15 requirements?

16 It may very well be that the resolution of

17 this contention is and the staff once it completes a

18 safety review may even agree that the application as

19 it exists now meets NRC requirements. But that's a

20 merits question. And at this point, I don't think

21 that begrudges the submission of an admissible

22 contention. And I'm sort of pointing again to the --

23 I think it's the Private Fuel Storage case in our

24 brief that while the showing that a petitioner needs

25 to make at this space is not insubstantial.

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1 A petitioner doesn't have to prove their

2 contention, the contention of admissibility phase. As

3 to the other claims of Contention A concerning

4 potential redesign of the ISFSI or the need for

5 increased capacity based on extended operations as

6 well as financial assurance in 72.30, the staff used

7 that these claims each fail for the reason that 72.22E

8 claim succeeds because in this cases the claims in the

9 petition are not similarly grounded in language in the

10 application which in turn does not rely on a specific

11 nuclear power plant retirement date to demonstrate

12 compliance with the ISFSI license renewal

13 requirements. Indeed, as the applicant notes in many

14 cases, the petition's arguments are speculative

15 contrary to the specific representations in the

16 application.

17 For example, there is no request for an

18 increase in the amount of fuel to be stored at the

19 ISFSI. Similarly with regard to Contention B arguing

20 that the applicant's environmental report is similarly

21 problematic because of its dependence on 2024 and 2025

22 Diablo Canyon reactor requirements. The staff views

23 those claims as simply again not worn out but language

24 in the application.

25 Indeed as the applicant notes, the

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1 proposed action, renewal of the independent spent fuel

2 storage installation license is independent of

3 operations from the Diablo Canyon reactors in this

4 regard. With respect to the alternatives analysis,

5 the petition does not seem to count in this specific

6 discussion any application and from the staff's view

7 argues that the environmental report lacks an analysis

8 that it appears to contain. With regard to cumulative

9 impacts, the petition does not identify any impacts

10 that are not considered cumulatively.

11 And while there's not a distinct section

12 in the environmental report titled cumulative impacts,

13 because the only direct impacts identified are public

14 and occupational dose, impacts that are evaluated

15 cumulatively. Again, I think we have a contention

16 that alleges an omission and precludes precedent. And

17 so in summary, while this step is not completed, it's

18 technical environmental reviews.

19 The petition proposes an admissible

20 contention with respect to financial qualifications

21 under 72.22E. But the remainder of Contention A and

22 Contention B are inadmissible. They contain

23 speculation about the future and not this application

24 in its satisfaction of the applicable NRC requirements

25 in this Part 72 proceeding. And with that, I'd be

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1 happy to answer any additional questions.

2 JUDGE ARNOLD: Just a practical matter.

3 What's the current schedule for the ISFSI license

4 renewal review? When is a decision expected?

5 MR. GENDELMAN: Yes, Your Honor. The

6 original docketing letter from September of last year

7 I think had targeted an RAI submission -- request for

8 additional information, RAIs, in the February time

9 frame with an eye towards a decision in the November

10 time frame. My understanding is that that schedule

11 has slipped and that a new schedule is being

12 formulated but has not been finalized. I don't

13 believe RAIs have been issued yet. But I don't think

14 there's a new schedule.

15 JUDGE ARNOLD: My question arises if the

16 licensing decision came down in November, before an

17 application is due for the renewal of the operating

18 license, then its current status would reflect the

19 correct status at time of renewal. But if it's

20 delayed, then certainly you have to look at the

21 implications of plant license renewal.

22 MR. GENDELMAN: I understand, Your Honor.

23 And I don't believe a decision will be made this year.

24 That said, I don't think in the staff's view that's

25 necessarily sort of the break point in that we've been

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1 given -- the reality now given the petition before the

2 Board that with regard at least to the financial

3 qualification and contention that based on not future

4 speculative could submit, could not submit actions.

5 But that based on the world as it exists

6 today that an admissible contention has been

7 proffered. I'm not sure if it's argued. But I

8 understand your concern.

9 JUDGE HAWKENS: I want to follow up. You

10 disagree with petitioner's argument in Contention A to

11 the extent it deals with Section 72.30?

12 MR. GENDELMAN: That's right.

13 JUDGE HAWKENS: The decommissioning. And

14 I want to make sure I understand why that is. If I

15 understand petitioner's argument, they point to

16 Appendix G-5 which states decommissioning estimate is

17 based on configuration of the ISFSI which in turn is

18 based on Units 1 and 2 operating until the end of

19 current licenses, 2024, 2025.

20 And it's your position that it can be

21 based on that because the ISFSI can accommodate 40

22 years of waste. And therefore, it will take in waste

23 till '24 and '25. And so that statement is accurate.

24 It doesn't matter whether they, in fact, are retired

25 in 2024 and 2025 or not?

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1 MR. GENDELMAN: I would say it a little

2 more simply actually. I think that because of the way

3 the, as the language cited by the petitioner, the

4 72.22 discussion specifically points to the 2024

5 retirement and specifically identifies it as a funding

6 source, the decommissioning trust fund at that time

7 that the retirement sort of correlates to

8 demonstration of regulatory requirements in this

9 proceeding in a way that I think is more iterated in

10 that. So from a staff perspective, it's not clear to

11 me whether or not that assessment being based upon

12 2024 or 2025 retirement ultimately impacts the

13 sufficiency that administration and staff has not

14 completed a safety review. But specifically the 72.22

15 case where regulatory compliance is specifically tied

16 by the application to the 2024 retirement of the

17 facility, we believe that the petition is articulated.

18 JUDGE HAWKENS: I understand. Let me try

19 to simplify it even further. Would it be your view,

20 their reference to the retirement of the reactors in

21 the 2024, 2025 for purposes of 72.30 are simply not

22 material?

23 MR. GENDELMAN: I think that's right.

24 Given the structure of the regulation in a way that

25 portion of the application is structured. Again, it's

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1 open in sufficiency.

2 JUDGE HAWKENS: No more questions for you.

3 Thank you.

4 MR. GENDELMAN: Thank you, Your Honor.

5 JUDGE HAWKENS: Ms. Curran, I'm going to

6 check with my time keeper. But I believe you have at

7 least 12 minutes left.

8 MS. CURRAN: Great.

9 JUDGE HAWKENS: She's nodding her head in

10 the affirmative. So you may proceed.

11 MS. CURRAN: Thank you. In response to

12 something Mr. Lighty said about how our claims only

13 relate to expansion. I just want to direct your

14 attention to a paragraph on the bottom of page 5 of

15 our hearing request. This is really following up on

16 what NRC staff counsel said that we -- our contention

17 is based on the fact that the license renewal

18 application depends on the assumption of a retirement

19 date of 2024 and 2025.

20 And we're expressing concern that there

21 will be a period of time now, potentially 20 years,

22 when the PG&E does not have access to the

23 decommissioning trust fund. So thank you very much.

24 We appreciate the staff's logical support for that

25 contention.

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1 And I also feel that the argument was

2 persuasive on 72.30. And that I agree. It was a good

3 argument and I didn't understand it before that we

4 haven't made an adequate claim about the

5 decommissioning fund because we did assume that the

6 capacity of the ISFSI could be increased.

7 And it's just not there in the

8 application. Now that's setting NEPA aside. I don't

9 want to imply at all that we are abandoning our NEPA

10 contention because NEPA requires some consideration of

11 the big picture. And obviously --

12 JUDGE HAWKENS: I'm going to put NEPA

13 aside for one second. I'm looking at 72.30. So the

14 NRC staff says it agrees with you that Contention A is

15 admissible to the extent it raises a challenge

16 regarding PG&E's compliance with Section 72.22, I

17 believe. You also made a claim in Contention A that

18 they're in compliance with Section 71.30 was

19 deficient. Are you no longer advancing that argument?

20 MS. CURRAN: That's right.

21 JUDGE HAWKENS: Okay.

22 MS. CURRAN: Yeah.

23 JUDGE HAWKENS: For purposes of Contention

24 A, you're simply saying that they're showing financial

25 qualification for operating of the ISFSI under 72.22

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1 is deficient.

2 MS. CURRAN: Yeah.

3 JUDGE HAWKENS: Okay. Thank you.

4 MS. CURRAN: On the NEPA claim, I just

5 want to make it really clear that our focus is on the

6 statement of purpose and need which is a requirement

7 to have a reasonably accurate statement of purpose and

8 need for the proposed action. This is a supplemental

9 environmental assessment. We continue to think that

10 if this is supplementing the previous environmental

11 assessment, this environmental assessment needs to go

12 back and discuss what was the purpose and need back

13 then and then discuss what are -- NEPA requires a

14 discussion of reasonably foreseeable actions and

15 impacts.

16 It's reasonably foreseeable that PG&E will

17 seek to expand the capacity of this ISFSI. If they

18 get 20 more years of operation, that's a real good

19 question. What are they going to do with the spent

20 fuel they generate, especially since they answer to

21 the state.

22 And the state wants them to take the fuel

23 out of ports as expeditiously as possible. We think

24 all that needs to be addressed in the environmental

25 assessment. It's important.

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1 This is the whole purpose of NEPA, that

2 you don't take an action until you've looked at all

3 the relevant considerations. So you don't foreclose

4 anything because you had tunnel vision. Clearly under

5 the safety regulations, there is now tunnel vision.

6 But that's not true with respect to NEPA.

7 And I still think -- we still think that the

8 appropriate remedy here if you don't admit our

9 contentions is to hold this proceeding in abeyance

10 until we know what PG&E is going to do for this

11 license renewal application. Because this -- we are

12 not content to say PG&E may amend the ISFSI license --

13 seek to amend the ISFSI license some point down the

14 road.

15 This was our opportunity right now. This

16 license renewal is being sought for 20 years. And

17 it's a long time. This is our opportunity as members

18 of the public. We know that if you don't take the

19 opportunity when it comes up, it goes by and it may

20 not come up again.

21 We don't want to rely on some

22 discretionary decision by PG&E or the NRC to amend

23 this license. The issues before us now, we know now

24 that PG&E has invested resources into filing a new

25 license renewal application for this reactor -- set of

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1 reactors.

2 Those considerations, it's really

3 important for any environmental assessment that

4 addresses the impacts of the ISFSI to look at all

5 those relevant considerations. And if more time is

6 needed, there's no reason not to give it. That

7 concludes my rebuttal.

8 JUDGE TRIKOUROS: We all agree that if

9 there's an expansion of the ISFSI or request to expand

10 the ISFSI, it would be an entire relicensing

11 proceeding.

12 MS. CURRAN: If there is a request for

13 expansion, yes. But we don't know when that will

14 happen. We don't know what the relationship will be

15 between storage in the pools and ISFSI -- storage in

16 the ISFSI. Those are relevant environmental

17 considerations that PG&E could kick down the road for

18 a long time if it wanted to. And we think it's

19 important to address them now, at least in a

20 reasonably soon future, not way down the road.

21 JUDGE HAWKENS: Thank you.

22 MS. CURRAN: Thank you.

23 JUDGE HAWKENS: I want to thank the

24 parties, everyone's presentation and their written

25 pleadings today. Very helpful. And it's our intent

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1 to issue a decision on petitioner's hearing request

2 within 35 days.

3 Before we adjourn, I'd like to acknowledge

4 the support the panel's IT expert Andrew Welkey, the

5 panel's administrative assistants, Sara Culler, Andrew

6 Kenney, and Sherera Deploydawn, panel's law clerks,

7 Noel Johnson, Allison Wood, and Emily Newman. And

8 lastly, we appreciate the services of the court

9 reporter, Lanelle Phillips. And Lanelle, will you

10 need to consult any attorneys after we adjourn to

11 ensure accuracy of your transcript?

12 COURT REPORTER: Yes, Mr. Bessette and Ms.

13 Curran.

14 JUDGE HAWKENS: All right. We'll just ask

15 counsel to remain until Ms. Phillips has had the

16 opportunity to talk to you. Judge Trikouros, do you

17 have anything to add before we adjourn?

18 JUDGE TRIKOUROS: I do not. Thank you.

19 JUDGE ARNOLD: No.

20 JUDGE HAWKENS: The case is submitted and

21 we are adjourned. Thank you very much.

22 (Whereupon, the above-entitled matter went

23 off the record at 2:38 p.m.)

24

25

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