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 UNITED STATES OF AMERICA 1

NUCLEAR REGULATORY COMMISSION 2

+ + + + +

3 ATOMIC SAFETY AND LICENSING BOARD PANEL 4

+ + + + +

5 HEARING 6

---

x 7

In the Matter of: :

8 PACIFIC GAS AND ELECTRIC : Docket No.

9 COMPANY, INC. : 72-26-ISFSI-MLR 10

ASLBP No.

11

23-979-01-ISFSI-MLR-BD01 12 (Diablo Canyon :

13 Independent :

14 Spent Fuel Storage :

15 Installation) :

16

---

x 17 Wednesday, June 13, 2023 18 BEFORE:

19 E. ROY HAWKENS, Chair 20 NICHOLAS G. TRIKOUROS, Administrative Judge 21 JUDGE GARY S. ARNOLD, Administrative Judge 22 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

2 APPEARANCES:

1 On Behalf of PG&E, Inc.:

2 RYAN K. LIGHTY, ESQ.

3 PAUL BESSETTE, ESQ.

4 of:

Morgan, Lewis & Bockius LLP 5

1111 Pennsylvania Avenue, N.W.

6 Washington, DC 20004 7

ryan.lighty@morganlewis.com 8

paul.bessette@morganlweis.com 9

On Behalf of San Luis Obispo Mothers for Peace:

10 DIANE CURRAN, ESQ.

11 of: Hamon, Curran, Spielberg & Eisenberg, LLP 12 1725 DeSales Street, N.W.

13 Suite 500 14 Washington, DC 20036 15 dcurran@harmoncurran.com 16 On Behalf of the Nuclear Regulatory Commission:

17 ADAM S. GENDELMAN, ESQ.

18 CATHERINE E. KANATAS, ESQ.

19 of:

Office of the General Counsel 20 Mail Stop - O-14A44 21 U.S. Nuclear Regulatory Commission 22 Washington, D.C. 20555-0001 23 adam.gendelman@nrc.gov 24 catherine.kanatas@nrc.gov 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

PAGE 2

Presentation by Diane Curran, Counsel for 3

San Luis Obispo Mothers for Peace 6

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

Presentation by Adam Gendelman, Counsel for 6

Nuclear Regulatory Commission 48 7

Rebuttal by Diane Curran, Counsel for 8

San Luis Obispo Mothers for Peace 64 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

1:01 p.m.

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

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

hear oral argument in a license renewal proceeding 5

entitled Pacific Gas and Electric Company, Diablo 6

Canyon Independent Spent Fuel Storage Installation, 7

Docket No. 72-26-ISFSI-MLr.

8 Petitioner, San Luis Obispo Mothers for 9

Peace challenges the application submitted by PG&E to 10 renew its license for the independent spent fuel 11 storage installation at the Diablo Canyon Nuclear 12 Plant. And as an aside going forward, you may hear 13 judges and counsel use the acronym ISFSI when 14 referring to the independent spent fuel storage unit 15 installation.

16 My name is Roy Hawkens. I'm a legal 17 judge. I chair this licensing board, and I'm joined 18 by Technical Judge Nic Trikouros and Technical Judge 19 Dr. Gary Arnold, both who have an expertise in nuclear 20 engineering.

21 Our Board is assisted by law clerk Noel 22 Johnson. And we also are receiving support from law 23 clerk Allison Wood. The argument is being held in the 24 hearing room at the NRC Headquarters in Rockville, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

5 Maryland. And we welcome counsel and the audience.

1 A listen-only telephone line has been made 2

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

a court reporter is preparing a transcript that will 4

be placed in the NRC's electronic hearing docket 5

within a week. As I mentioned, this proceeding 6

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

its license for the ISFSI located at Diablo Canyon 8

Power Plant.

9 Petitioner has proffered two contentions 10 challenging that application. First, it argues the 11 information in the renewal application regarding 12 PG&E's financial qualification to operate and 13 decommission the facility is deficient because it's 14 based on the incorrect assumption that the reactors at 15 the Diablo Canyon Power Plant will be retired in 2024 16 and 2025. Second, it argues a portion of the 17 environmental report supplement is deficient for the 18 same reason.

19 Before licensing board will grant a 20 hearing request, the petitioner must demonstrate 21 standing and must offer two admissible contentions.

22 The litigants agree to those issues, and the licensing 23 board had read those briefs. Petitioner argues the 24 hearing request should be granted because it has 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

6 standing and it offers two admissible contentions.

1 PG&E does not dispute petitioner's 2

standing, but it argues that neither contention is 3

admissible. And therefore, the hearing request should 4

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

hearing request should be granted because petitioner 6

has established standing and it proffers one 7

admissible contention. For the record, would counsel 8

please introduce themselves and any colleagues who are 9

accompanying them starting with petitioner, please?

10 MS. CURRAN: Good afternoon. My name is 11 Diane Curran. I'm appearing for San Luis Obispo 12 Mothers for Peace.

13 JUDGE HAWKENS: Thank you, Ms. Curran.

14 PG&E?

15 MR. BESSETTE: Good afternoon, Your Honor.

16 I'm Paul Bessette, counsel for Pacific Gas and 17 Electric. With me is Ryan Lighty who'll be conducting 18 the oral argument with you. And behind me is my 19 colleague Tim Matthews, Partner at Morgan, Lewis. We 20 also have a summer intern with us, Jake Negbessky, 21 who's observing the proceedings.

22 JUDGE HAWKENS: Thank you. NRC staff?

23 MR. GENDELMAN: Good afternoon. My name 24 is Adam Gendelman. I'm an attorney in Material Cycle 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

7 and Waste Division in the NRC Office of General 1

Counsel. With me is Catherine Kanatas and some NRC 2

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

Mr. Trent Wertz, and Dr. Christopher Markley.

4 JUDGE HAWKENS: All right. Thank you.

5 Each litigant has been allotted 40 minutes to present 6

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

and followed by the NRC staff. Petitioner may reserve 8

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

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

10 During the course of your argument, the 11 green light will be illuminated. When five minutes 12 are left, you'll see the yellow light. And when time 13 has elapsed, you'll see the red light at which time 14 we'd ask counsel to wrap up their arguments promptly 15 unless the Board has an issue on questions. At this 16 stage, does counsel have any questions?

17 (No audible response.)

18 JUDGE HAWKENS: Seeing that nobody does, 19 let me ask Judge Trikouros, anything to add before we 20 proceed?

21 JUDGE TRIKOUROS: No, thank you.

22 JUDGE ARNOLD: No.

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

24 MS. CURRAN: I'm ready.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

8 JUDGE HAWKENS: -- desire to reserve any 1

time for rebuttal?

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

ten minutes, please.

4 JUDGE HAWKENS: Very well. You may 5

proceed. Thank you.

6 MS. CURRAN: Thank you. Good afternoon.

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

when I needed to postpone the oral argument for health 9

reasons. I'm doing fine, but I needed that day. And 10 I really appreciate it. Thank you.

11 JUDGE HAWKENS: You're welcome. We're 12 grateful to counsel for accommodating you with your 13 request as well.

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

15 Just before we start in on the contentions, I want to 16 set a little background on this because our concerns 17 arise from the fact that PG&E submitted its license 18 renewal application in March of 2022 when its plans 19 for the Diablo Canyon reactor were completely 20 different than they are today. As you know, today the 21 NRC has granted -- recently, the NRC granted PG&E an 22 exemption from the timely renewal rule to put in a new 23 license renewal application which if PG&E submits it 24 by December of 2023 will allow it to get the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

9 protection of the timely renewal rule.

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

submit a license renewal application for the reactors 3

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

passed in September, said that they would limit the 5

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

ended.

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

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

9 And as the NRC says in its response to our 10 contentions, the operation of the reactors is related 11 to the ISFSI. It was the motivation for the licensing 12 of the ISFSI in the first place.

13 So here we are because PG&E submitted the 14 ISFSI license renewal application back when they 15 thought they were going to close the reactors in 2024-16 2025. And the only purpose of the ISFSI if that were 17 true would be to have a safe place to store spent fuel 18 until the repository opens. There's no need to talk 19 about the operation of the facility. It was 20 essentially ending.

21 Our concerns arise from the fact that PG&E 22 has amended its application even though it's known 23 since September that it was planning to do something 24 different or it might do something different. And 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

issue the exemption that it wanted to submit a new 2

license renewal application. We got two contentions.

3 The first contention relates to financial 4

assurance for operation -- safe operation of the ISFSI 5

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

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

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

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

-- or will operate it for a long time but under the 10 current regime of getting funding from the rate payers 11 only a few more years. And then it will tap into the 12 decommissioning trust fund to operate the ISFSI.

13 And the same thing for decommissioning, 14 that as far as they knew back then, they were going to 15 start decommissioning right away. And as PG&E says in 16 appendix page G-4 of its appendix, for purposes of 17 providing an estimate for a funding plan, financial 18 assurance is expected to be provided based on a prompt 19 ISFSI decommissioning scenario. So that timing of 20 decommission affects the cost of decommissioning.

21 It affects where PG&E is going to get the 22 money for decommissioning. And in our view, the 23 application should be accurate. It's required by the 24 NRC regulations which are there to protect the public, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

11 there to protect the safety of the ISFSI operation.

1 We know that we have historic examples 2

where not enough money was set aside for maintaining 3

nuclear waste. And these regulations evolved out of 4

that. We also have a situation where --

5 JUDGE HAWKENS: May I interrupt? One --

6 MS. CURRAN: Of course.

7 JUDGE HAWKENS: -- quick question. And I 8

want to hear more about your contention of 9

admissibility after this. But at the outset, although 10 nobody has challenged standing, and in fact, the NRC 11 staff agrees standing, as you know, the Board has an 12 independent obligation to verify that standing exists.

13 And I was wondering if you could just summarize your 14 views of standing and which of the members of the 15 petitioner has standing under established case law.

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

17 principally on the licensing board's decision with 18 respect to spent fuel storage. In the original ISFSI 19 licensing proceeding in which members of San Luis 20 Obispo Mothers for Peace who live within a few miles 21 of a reactor or within 18 miles actually where found 22 to have standing.

23 JUDGE HAWKENS: Seventeen miles, I 24 believe.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

12 MS. CURRAN: Seventeen? Okay. We have 1

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

quantity of radioactive material. And if there were 3

any kind of airborne release of this material, the 4

licensing board has found it's reasonable to conclude 5

that this could affect people living near the 6

facility.

7 If the Board is thinking of reconsidering 8

that

decision, we would really appreciate an 9

opportunity to brief it more fully. The issue has 10 been briefed in detail in a case in the D.C. Circuit 11 involving a centralized storage facility in Texas.

12 And we'd be glad to provide you with all that legal 13 briefing if you wish.

14 JUDGE ARNOLD: Could I just mention, in 15 the Bell Bend case, CLI-10-07, the commission said, 16 our case law is clear that a petitioner must make a 17 fresh standing demonstration in each proceeding in 18 which any prevention is sought. So that sounds to me 19 as though they're ruling out basing your standing on 20 a previous case where you establish standing.

21 MS. CURRAN: Judge Arnold, I have a little 22 different interpretation of that precedent. I don't 23 think that -- I don't think it's saying that previous 24 decisions have to be revisited. I think what it's 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

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

put in standing affidavits again.

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

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

all previous decisions are up for reconsideration.

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

standing declarations or any kind of representations 8

regarding your standing. And we have done all that 9

beforehand. We had new standing declarations from a 10 number of Mothers for Peace members.

11 JUDGE ARNOLD: If you take a look at the 12 case you sited where they decided 17 miles, they did 13 not do that based upon an examination of what kind of 14 threats are in an ISFSI. They just said, well, Sharon 15 Harris used 17 miles so we'll use it too. That sounds 16 to me to be a very poor basis to decide that somebody 17 has standing. Now as I understand it, although you 18 never used the expression, proximity plus, in your 19 petition, that's basically what you're basing your 20 standing on.

21 MS. CURRAN: Yes.

22 JUDGE ARNOLD: And as staff mentioned in 23 their answer, petitioner must demonstrate that the 24 proposed action involves a significant source of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

14 radioactivity producing an obvious potential for 1

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

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

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

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

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

been the first ISFSI licensing proceeding, we 7

presented scenarios where a cask could be breached and 8

a radioactive release could

occur, airborne 9

radioactive release with significant off-site 10 consequences. So we have -- that hasn't changed.

11 That's a potential attack on an ISFSI. We also know 12 that spent fuel is the most highly radioactive 13 substance on the planet. And this is a significant 14 quantity being stored in one place.

15 JUDGE ARNOLD: So I do not have those 16 scenarios in front of me. And they're not in your 17 petition. Can you recall what type of circumstances 18 would lead to a release of that nature?

19 MS. CURRAN: We presented scenarios of an 20 attack on a spent fuel storage facility. And we did 21 not get into exhaustive detail because it's a 22 sensitive security issue. But we demonstrated that it 23 was credible and that it could result in a significant 24 off-site release.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

15 And our expert witness talked about what 1

the consequences could be, that they were far reaching 2

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

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

the very same ISFSI licensing that was decided some 5

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

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

again.

8 JUDGE ARNOLD: Would you contend that the 9

scenarios you presented then are still possible now, 10 that there's not any changes in technology or anything 11 that would make them less credible? Are the scenarios 12 of 20 years ago, are they still valid today?

13 MS. CURRAN: In my opinion as a lawyer, 14 these things are credible. You're talking about 15 standing where very little bit of harm is enough to 16 get you standing. I don't know -- I mean, these are 17 security issues, right? Has the ISFSI been redesigned 18 so that this is no longer a credible event? I'm never 19 going to be able to tell you that.

20 JUDGE ARNOLD: I will note that the 21 Commission recently -- as you mentioned, the storage 22 case, the Holtec case found proximity plus standing as 23 well. And although those weren't mentioned, do you 24 have any views on the applicability of your rationale 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

16 on those Commission decisions?

1 MS. CURRAN: They would be equally 2

applicable here, although the quantity is not as 3

great. But still, it's --

4 (Simultaneous speaking.)

5 JUDGE ARNOLD: Twenty-one hundred metric 6

tons, and it was a lot of radioactive waste.

7 MS. CURRAN: Yes.

8 JUDGE HAWKENS: Anymore on standing?

9 JUDGE ARNOLD: No.

10 JUDGE HAWKENS: Anymore on standing?

11 JUDGE TRIKOUROS: No.

12 JUDGE HAWKENS: You may proceed on the 13 contention of admissibility today.

14 MS. CURRAN: Okay. I'm just trying to 15 remember where I was.

16 JUDGE HAWKENS: You were on Contention A.

17 MS. CURRAN: Yeah.

18 JUDGE HAWKENS:

Operation and 19 decommissioning.

20 MS. CURRAN: Oh, yeah. So there's two 21 reasons why this is not just an academic exercise.

22 First of all, this is an ANSI -- these are ANSI 23 regulations. They were promulgated for a reason, to 24 provide reasonable assurance that in fact highly 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

17 radioactive spent fuel can be cared for adequately for 1

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

at reactive sites.

3 Second, PG&E has repeatedly referred to 4

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

holding itself out in a different light, in a 6

different relationship to the State of California.

7 The State of California is responsible for providing 8

funding for financial assurance for safe operation of 9

the ISFSI until the time of decommissioning starts.

10 The state, the ratepayers of the state, 11 the taxpayers of the state deserve to know where is 12 the money coming from. Are we paying for it? Who's 13 paying for it?

14 So those are the, I think, important 15 reasons why this information is important to provide.

16 And as the staff said in responding to our contention, 17 the operation of the plant is related to the ISFSI.

18 The ISFSI doesn't -- you might be able to say that in 19 March of 2022.

20 There's only one purpose for this ISFSI 21 going forward to store spent fuel. But as long as 22 operation is going on, there's a relationship there 23 that needs to be addressed.

24 JUDGE HAWKENS: PG&E argues that don't 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

18 worry about that because the assumption we're using 1

provides a more conservative financial scenario. And 2

so you and the public should be satisfied with that.

3 How would you respond?

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

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

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

decommissioning trust fund.

8 And the whole issue of financing of the 9

operation of Diablo Canyon is kind of up in the air 10 right now. The last thing we had from Public 11 Utilities Commission was approval of shutdown. That 12 was in 2018.

13 Now the PUC is going through a proceeding 14 where they're evaluating the prudence of allowing 15 Diablo Canyon to continue operating. I honestly don't 16 know how spent fuel storage factors into that. But 17 there's going to be a whole series of PUC proceedings 18 that have to do with covering the costs of Diablo 19 Canyon.

20 So it's not -- there's many things that 21 are uncertain here. And frankly if it were up to me, 22 I wouldn't be standing here today arguing about this.

23 I wish that PG&E had simply amended its application or 24 asked the Board hold off until we know what we're 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

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

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

could all wait until that happens instead of arguing 4

in a hypothetical sense what might happen in the 5

future.

6 JUDGE HAWKENS: What about their argument 7

that the application permissibly reflects the status 8

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

requires them to include in the application something 10 that's purely speculative, uncertain. How would you 11 respond to that?

12 MS. CURRAN: Well, I think calling it the 13 status quo is a little extreme. This is a company 14 that has applied to the NRC for permission to seek 15 reactor license renewal. We know that the NRC has 16 told them they can get timing renewal protection and 17 if they file by the end of 2023.

18 So the status quo is kind of blurry in 19 terms of if you apply the -- if you go through the 20 process of throwing us out now, then when PG&E files 21 a new reactor license application, I honestly don't 22 see where we have an opportunity to litigate how that 23 affects the ISFSI because you will have approved the 24 license. So we're here. We're here because this was 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

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

2 JUDGE ARNOLD: Six years ago, the 3

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

license and continue operating. A couple years ago, 5

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

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

Canyon.

8 It looks like their intentions are a very 9

moving target, a very blurred issue I'm saying. I 10 wonder what legal requirement is there to make an 11 application that is being considered now reflect a 12 blurred future. I mean, yes, we would like it. But 13 is there a legal requirement?

14 MS. CURRAN: I think there is in the sense 15 that it's because what they say in the application 16 depends so much on whether there's an operation of the 17 reactor that's going on. And if you know that's in 18 the plans, then to pretend that doesn't exist, it's 19 not an accurate reflection of PG&E's intentions. And 20 therefore, we think that they need to at least address 21 it.

22 They could address it in the alternative.

23 They could say, well, if we -- maybe they'll have to 24 shut down the plant. Maybe they won't. Maybe the PVC 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

legislature wants us to give you.

2 They could address that in the 3

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

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

we'll do.

6 And then we would have the satisfaction, 7

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

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

depending on the timing of decommissioning. Okay.

10 I'd like to -- unless you have more questions about 11 the safety contention, I'd like to move on to the 12 environmental contention. Can you tell me how much 13 time I have left, please?

14 (No audible response.)

15 MS. CURRAN: Ten minutes? Okay. The 16 environmental contention states that PG&E's 17 environmental report isn't adequate to satisfy the 18 National Environmental Policy Act because the 19 statement of purpose and need only to the storage of 20 spent fuel that will be generated before the 21 expiration dates of 2024 and 2025 in the current 22 license until the repository becomes available. And 23 I can't remember one of you just pointed out that this 24 environmental report is called a

supplemental 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

22 environmental report. This is a supplement to the 1

original environmental report that was prepared in 2

2001.

3 And if you go back to that environmental 4

report, it talks about the relationship between the 5

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

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

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

if they didn't have additional spent fuel storage 9

capacity. So they evaluated a range of alternatives.

10 They came up with dry storage. They said 11 the dry storage facility is going to hold all the fuel 12 that we generate until 2024 and 2025. And they said 13 they picked dry storage over pool storage based on an 14 overall assessment of operational and safety 15 considerations, the amount of spent fuel to be 16 generated, the transportation requirements associated 17 with the alternatives, resources

needed, and 18 scheduling restraints.

19 So PG&E looked at the whole picture of 20 operation and spent fuel storage and chose the ISFSI.

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

22 They chose to build it big enough to hold all the 23 spent fuel that they would have.

24 And they said that in the environmental 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

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

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

request that the State of California has a policy 4

favoring moving fuel from the pools to the dry storage 5

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

NRC's continue storage rule says --

7 JUDGE HAWKENS: Can you explain why 8

California statutes and policy are within the scope of 9

this proceeding?

10 MS. CURRAN: Two reasons. One is that 11 PG&E calls itself a contractor to the state and should 12 be talking about the policy issues associated with 13 spent fuel storage that are important to the state.

14 And second, NEPA generally --

15 (Simultaneous speaking.)

16 JUDGE HAWKENS:

I apologize for 17 interrupting. But what regulation are you basing 18 that, it requires them to address state statues and 19 policy?

20 MS. CURRAN: It's simply because in effect 21 PG&E is saying that they're standing in the shoes of 22 the state and making these environmental decisions.

23 I don't have a regulation for that. This is a very 24 unusual situation. I've never seen anything like it 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

24 before.

1 And NEPA is a statute that requires 2

reasonable decision making. If you look at the 3

circumstances and decide what are reasonable array of 4

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

analysis?

6 And I would submit that if the State of 7

California thinks that moving spent fuel into the 8

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

is a contractor to the state, that ought to be 10 discussed. And also -- yeah, I think that's -- I 11 think that's all I'll say. So in our view, the 12 statement of purpose and need now that we know PG&E is 13 planning to continue to operate the reactors for 5 to 14 20 years, circle back to the initial environmental 15 report and talk about the purpose and need document, 16 how has it been satisfied, how has it changed, and 17 what are the current considerations that are important 18 to our contractor, the State of California?

19 JUDGE HAWKENS: They argue that they have 20 60 years of storage combined with dry storage and wet 21 storage. That's sufficient for the 20 years of 22 conditional operating time for the reactors. And in 23 light of that, their purpose and needs statement is 24 adequate and what they consider is adequate. What's 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

25 wrong with that argument?

1 MS. CURRAN: Judge Hawkens, I think that 2

one of the really important things about an 3

environmental assessment is that it informs the 4

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

were somebody who picked up the environmental 6

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

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

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

been approved for a hearing process knowing what 10 PG&E's current plans are, you could easily think that 11 PG&E is representing that they are going to safety 12 store all of the quantity of spent fuel to be 13 generated by the Diablo Canyon reactors in this ISFSI 14 which, of course, is I think it's pretty universally 15 agreed that dry storage is safer than pool storage 16 because you don't have the potential for draining the 17 pools which is a matter of concern to the State of 18 California and others because of the potential for 19 earthquakes in that area.

20 So if you're a member of the public and 21 you're reading this document, you don't have a clear 22 understanding of what exactly is going on. You don't 23 have a clear understanding of the fact that if PG&E 24 operates even five more years, it may not have enough 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

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

have a repository.

3 Fuel could be remaining in the pool. Some 4

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

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

state lawmakers, policymakers, members of the public 7

can debate, is this what we want?

8 And these are -- the purpose of an 9

environmental assessment is to educate people who 10 might be applying this under state law. They take the 11 facts that are presented in a federally approved 12 document and say, well, these are the facts that we 13 have to work with. It's really important that these 14 documents should be up to date and clear because 15 they're used for many purposes. And I think I will 16 close right there.

17 JUDGE HAWKENS: All right. You have two 18 minutes remaining. That'll be added to your rebuttal 19 time.

20 JUDGE HAWKENS: Thank you.

21 JUDGE HAWKENS: Mr. Lighty, you may 22 proceed, sir. I'd ask as well sometime if you could 23 incorporate into your argument, although you did not 24 oppose standing, just inform us why you did not oppose 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

27 standing.

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

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

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

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

repeat those briefings.

6 But we will like to use a portion of our 7

time to discuss a few key issues that are particularly 8

important here and to respond to some assertions that 9

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

10 And we'd like to start with two overarching topics 11 that inform the discussion today and then move into 12 the discussion of the individual contentions in turn 13 and then respond to some of petitioner's arguments 14 that have been presented today. And I expect our 15 prepared remarks will take less than half of our time, 16 so plenty of time for Board questions.

17 And I'll start off addressing the standing 18 issue as you requested, Your Honor. We did not 19 analyze that issue in depth because in our view, the 20 standing analysis is immaterial given that neither of 21 the contentions is admissible. That petition must be 22 denied for that reason alone.

23 So we didn't conduct an analysis of 24 standing. But to go to Judge Arnold's point about the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

28 Bell Bend proceeding, we certainly agree that a fress 1

standing demonstration must be made in every 2

proceeding. You cannot rely on the factual predicate 3

from a prior ruling. And that must be demonstrated 4

fresh in each proceeding.

5 To the extent that petitioners rely only 6

on their finding of standing in the initial ISFSI 7

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

different type of proceeding. And an initial 9

licensing proceeding is different than a license 10 renewal proceeding. And so to the extent that the 11 standards are different, that case law may or may not 12 apply squarely here. So turning back to the two 13 overarching topics.

14 JUDGE HAWKENS: To be clear, you do not 15 opposed standing?

16 MR. LIGHTY: Correct, Your Honor.

17 JUDGE ARNOLD: And one other thing, not 18 proposing standing, are you agreeing that your ISFSI 19 poses an obvious potential for off site consequences?

20 MR. LIGHTY: We do not necessarily agree 21 with that assertion.

22 JUDGE HAWKENS: Although you haven't 23 opposed it because you haven't opposed standing?

24 MR. LIGHTY: Correct, correct. To the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

29 extent that off site consequences must be 1

demonstrated, they have to be demonstrated at a 2

particular radius, specific to the type of licensing 3

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

the representations and the standing declarations 5

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

petitioner's burden to make the demonstration that it 7

does apply here.

8 So turning back to the overarching topics, 9

the overarching themes presented here today, first, we 10 want it to be crystal clear that the LRA was complete 11 and accurate when it was submitted. And still to 12 date, it accurately reflects the legal status quo.

13 Based on the current legal posture, the reactor 14 operating licenses are set to expire at the end of 15 their initial four year terms.

16 And absent intervening circumstances that 17 would materially change the facts of the ground, 18 that's what will happen. No one disputes that PG& is 19 planning to seek renewal of its licenses, but it 20 hasn't done so yet. No application has been filed.

21 No application has been docketed.

22 And that speculative application certainly 23 has not been approved yet and is noted in our brief at 24 Footnote 46. The California Public Utilities 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

30 Commission or CPUC also has not yet authorized that 1

continued operation. So there are several gates that 2

must be passed through before continuing operation 3

could become the legal reality.

4 In

fact, the petitioners currently 5

participating in at least three different proceedings, 6

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

prevent continued operations. So for the petitioner 8

to argue here that the ISFSI license renewal 9

application was required to assume continued operation 10 is a big disingenuous. At bottom, the LRA currently 11 reflects the most up-to-date legal information 12 regarding the status of the DCPP reactor license.

13 JUDGE HAWKENS: At what point would PG&E 14 be required to amend the application?

15 MR. LIGHTY: Well, I think that's a good 16 question and an issue that petitioner should've 17 addressed in their petition. They haven't identified 18 any regulation in Part 72 that requires the LRA which 19 was complete and accurate at the time it was filed to 20 be updated to reflect an inchoate scenario involving 21 potential future licensing applications in a different 22 in a different proceeding. And our view is that there 23 is no such regulation in Part 72 that requires that 24 update to be made under these circumstances.

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31 JUDGE HAWKENS: And can you answer the 1

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

the license renewal application?

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

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

renewed, that would be a substantially changed 6

circumstance that should be reflected in the 7

application.

8 JUDGE HAWKENS: But not when the licensed 9

reactor renewal application is filed?

10 MR. LIGHTY: Well, I think that there 11 could be an colorful argument made for petition for 12 rulemaking to establish a rule that requires that.

13 But the current regulations do not contain that 14 requirement.

And petitioner certainly hadn't 15 demonstrated that much.

16 So at the end of the day, the application 17 was complete and accurate when it reflects the current 18 legal reality and nothing more is required. The 19 second overarching matter, we want to reiterate the 20 speculative nature of petitioner's ISFSI expansion 21 clubs. The petitioner suggests that if the reactor 22 operating license are renewed and if the units 23 continue to operate, then PG&E will be required to 24 expand this specific licensed ISFSI to accommodate 60 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

32 years' worth of spent fuel.

1 That's factually and legally incorrect.

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

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

dispute.

5 The existing storage as the ISFSI are 6

sufficient to store all spent fuel generated during 7

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

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

PG&E currently has the ability to store 60 years' 10 worth of spent fuel at the site without expanding any 11 facilities. That's another fact petitioner does not 12 dispute.

13 JUDGE TRIKOUROS: Mr. Lighty, let me 14 interrupt you. Does that 60-plus -- the 40 plus 20 15 components, do they include the ability to offload a 16 full core at the end of that 60-year period?

17 MR. LIGHTY: I believe so, Your Honor. I 18 believe it does contemplate the entire inventory of 40 19 years of operation including final core. But even 20 assuming for the sake of argument that additional dry 21 storage is required at some point in the future, for 22 example, after a permanent shutdown of the reactors 23 just for their decommissioning, PG&E could elect to 24 develop that capacity.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

33 But regardless of whether that would occur 1

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

licensed ISFSI, or an amendment to this specific 3

licensed ISFSI. Any expansion would be subject to a 4

separate regulatory process. So the bottom line is 5

that the current license capacity of this ISFSI does 6

not hinge on whether the reactors operate beyond 40 7

years.

8 And to the extent that petitioners allege 9

otherwise, its claims are factually incorrect based on 10 the plan test of the terms of the ISFSI license that 11 is proposed to be renewed here. So turning now to the 12 two contentions. In Contention A, petitioner presents 13 three challenges to the safety portion of the 14 application.

The first relates to financial 15 qualifications, the second to decommissioning funding 16 insurance, and the third relates to the General Design 17 Criteria or GDC.

18 As we understand petitioner's reply at 19 pages 3 and 4, it has dropped its GDC claim. So our 20 discussion will focus only on the first two arguments, 21 both of which are financial in nature. And here, we 22 ask the Board to take particular note, and this is 23 important.

24 Both of these financial arguments rest on 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

34 the same assertion that the material deficiency in the 1

application is that it does not consider the financial 2

and decommissioning implications of storing 60 years' 3

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

6 of the petition criticizes the decommission finding 5

discussion because it does not address, quote, the 6

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

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

7 of the petition alleges the application does not, 9

quote, account for increased operating costs, end 10 quote, of storing 60 years' of spent fuel.

11 But as I mentioned earlier, this license, 12 the only one at issue in this proceeding, does not in 13 any way authorize storage of 60 years of spent fuel.

14 Simply put, there's no legal or regulatory obligation 15 to analyze that unlicensed scenario in the safety 16 application. So setting side those ISFSI expansion-17 related claims, the only arguments left in the 18 petition are petitioner's bare complaint application 19 on its face just doesn't mention the possibility of 20 license renewal.

21 But the petitioner doesn't identify any 22 reason that circumstance in and of itself constitutes 23 a material defect of the application. Materiality 24 matters, Your Honors. In fact, it's probably the most 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

35 important consideration in adjudicating Contention A.

1 It is the fundamental premise of Section 2.309F1 XIII 2

6 that places an affirmative burden on the petitioners 3

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

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

or fact.

6 JUDGE HAWKENS: Mr. Lighty, a question for 7

you. You have a very strong hyper technical argument.

8 But I think the regulations when they require you to 9

provide the NRC with complete and accurate information 10 in the license renewal application, for you to ignore 11 the change in circumstances since when you first 12 submitted this application. Now you're directed to 13 seek renewal. And it's not -- I don't think in your 14 pleading you ever said that PG&E intends to seek 15 renewal of the reactors, does it?

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

17 JUDGE HAWKENS: Okay.

18 MR. LIGHTY: -- PG&E does intend to seek 19 renewal. Again, there are several hurdles, several 20 gates, several rules.

21 JUDGE HAWKENS: Whether it will be 22 approved or not. But in your license renewal 23 application which is entirely correct at the time, you 24 indicated you were going to shut down in 2024, 2025 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

36 and made representations regarding operational --

1 financial operational ability and decommissioning 2

financial ability based on that assumption. And that 3

assumption hyper technically is still correct.

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

that raises a genuine dispute about financial ability 6

for an operation and decommissioning. Not as a 7

practical matter because as the NRC staff observes, it 8

appears based on California statute which provides you 9

with the necessary rate income you need for operation 10 and decommissioning.

11 That shouldn't be a problem. But the NRC 12 staff and the public is entitled to accurate and 13 complete representations, I think it is my sense in 14 your license renewal application. And there seems to 15 be a

genuine question as to whether those 16 representations are complete and accurate. And there 17 wasn't a discrete question in there, but could you 18 respond to that?

19 MR. LIGHTY: Certainly. I have a couple 20 of thoughts on that. The first is we're here to 21 discuss the compliant status of the LRA. It was 22 complete and accurate at the time it was filed.

23 There's no dispute about that. The question is 24 whether there is a duty of the applicant to then 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

37 update the application based on --

1 (Simultaneous speaking.)

2 MR. LIGHTY: -- what petitioners are 3

arguing are materially changed circumstances. And I 4

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

Part 54 license renewal proceeding for a reactor, 6

there is a regulation that requires an annual update 7

to the application to contain certain information.

8 That does not exist in Part 72.

9 The standard that is in Part 72 is simply 10 the completeness and accuracy requirement. That 11 requires documents submitted to the NRC. And I 12 believe the regulation is 10 CFR 72.11 to be complete 13 and accurate in all material respects.

14 But Subpart B of that regulation discusses 15 the duty to update information based on the discovery 16 of a significant safety issue. What we haven't seen 17 is petitioners acknowledge or address that standard or 18 explain or offer any theory as to why it's satisfied 19 here based on its claims in the petition. As we've 20 discussed, these ISFSI expansion claims are factually 21 and legally incorrect.

22 And all you're left with is a statement 23 that on the face of the application, it does 24 acknowledge the possibility of reactor license 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

matters outside of these expansion-related claims that 2

petitioners were raising. The Commission has long 3

used the word flyspecking to describe minor and 4

insignificant miss regarding environmental review that 5

do not work here because they have no material impact 6

on the proceeding. And in general, flyspecking is 7

just another way of describing the absence of 8

materiality.

Materiality applies to both 9

environmental and safety contentions.

10 JUDGE HAWKENS: On the safety contention, 11 though, in your application, you say, starting 12 November 24, the source of funds to operate and 13 decommission the ISFSI will include the 14 decommissioning trust fund, accurate once submitted, 15 accurate now. But the license renewal application for 16 the reactors is submitted and approved, it will no 17 longer be accurate, correct?

18 MR. LIGHTY: Correct. Whether it's 19 material is a separate question. And at what point it 20 becomes material I think is another unresolved 21 question. In our view, it is not material at this 22 time.

23 The compliance status of the application 24 is that it was complete and accurate when you filed.

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

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

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

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

arguments today that would, quote, change the outcome 5

of the proceeding.

6 That's the fundamental requirement for 7

material knowledge. In fact, all of the participants 8

seem to agree that there are no material concerns 9

about PG&E's financial qualifications to operate the 10 existing ISFSI. Staff's answer at Footnote 61 11 disavows any, quote, substantive concerns, end quote.

12 And petitioner doesn't allege any material 13 concerns that are unrelated to ISFSI expansion which 14 isn't proposed here and isn't part of this licensing 15 action. Now we know that staff takes the position 16 that proposed Contention A is admissible because as 17 noted in it brief at page 11, quote, operations at the 18 DCMPP are connected to operations at the Diablo Canyon 19 ISFSI by the application. And the application does 20 not appear to address a potential change in the 21 planned retirement date of the DCMPP, end quote.

22 But that's not the end of the inquiry. As 23 the staff notes a few pages later in the last sentence 24 of the partial paragraph at the top of page 14, staff 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

40 says, quote, SLOMPF has not demonstrated how such 1

potential operations render the application 2

insufficient, end quote. We agree.

3 We completely agree. That is absolutely 4

correct. Petitioner has not alleged much less 5

demonstrated any material deficiency in the 6

application that is unrelated to ISFSI expansion. And 7

that's what renders proposed Contention A inadmissible 8

because materiality matters.

9 Taking a step back for a moment. One 10 overarching purpose of the contention admissibility of 11 criteria is to limit evidentiary hearings to matters 12 where inquiry and depth is appropriate. But that's 13 not the case here.

14 It is not necessary to convene a formal 15 hearing at significant taxpayer

expense, at 16 significant rate payer expense to determine whether 17 PG&E is financially qualified to continue operating 18 the ISFSI. We already know the answer to that 19 question. As a matter of law, PG&E is presumed 20 qualified.

21 In

fact, that's exactly what the 22 Commission said in 2003 during the initial licensing 23 of the ISFSI, CLI-03-12 which is cited in our brief.

24 The petitioners here do not even alleged the existence 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

41 of any information that would rebut that presumption 1

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

these circumstances would be a textbook example of the 3

type of wasteful and unnecessary hearing that the 4

admissibility rules were purposefully designed to 5

avoid.

6 Think of it this way. Even if the 7

application contained a token acknowledgment of a 8

possibility of reactor license renewal, it wouldn't 9

make one bit of difference in the outcome of this 10 proceeding because PG&E is financially qualified to 11 continue operating the ISFSI regardless of whether the 12 reactor licenses are renewed. And no participant in 13 this proceeding has claimed otherwise.

14 So onto the separate issue of 15 decommissioning find. Petitioner also fails to 16 identify a material defect in the LRA. As I noted 17 earlier, the petitioner's principle criticism here is 18 that the application doesn't evaluate the cost of 19 decommissioning an ISFSI with 60 years of spent fuel.

20 But this license doesn't authorize 60 years of spent 21 fuel to be stored there.

22 So that's not a defect in the application 23 at all, much less the material. As to decommissioning 24 the AS licencing facility for 40 years of spent fuel, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

42 the decommissioning projections in the application are 1

conservative. And petitioner makes no demonstration 2

that anything further is required.

3 Now what I mean by conservative is that 4

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

the decommissioning trust fund in 2024 to cover ISFSI 6

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

would begin decreasing. The money starts going down.

8 In contrast, under a scenario where the 9

reactors continue to operate, that fund instead of 10 decreasing in value would continue to grow. NRC 11 regulations in 10 CFR Section 50.75 E1 VIII 1 permit 12 a licensee to assume a two percent annual real rate of 13 return on decommissioning funds. So instead of the 14 terms, deferred withdrawals equal additional growth.

15 That's just a common sense observation.

16 It certainly doesn't require an evidentiary hearing.

17 And particularly where petitioner has not identified 18 a

material reason why anything beyond that 19 conservative analysis and the application is required 20 or even meaningful in this proceeding.

21 At the end of the day, petitioner's ISFSI 22 expansion related claims are factually and legally 23 baseless. And petitioner otherwise hasn't identified 24 any reason that the financial projections in the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

43 application as currently written to accurately reflect 1

the legal status quo are materially deficient in any 2

way. Again, materiality matters here, Your Honors.

3 Shifting gears to proposed Contention B, 4

petitioner attacks the purpose and needs statement in 5

the ER supplement because it does not mention possible 6

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

of argument also misses the mark. The purpose and 8

needs statement in the ER supplement does not mention 9

a need to store 60 years' worth of spent fuel because 10 that is not, in fact, the purpose of this action.

11 Petitioner identifies no unmet legal 12 requirement for the purpose and needs statement to 13 contemplate anything more. Quite simply, petitioner 14 has not identified any deficiency in the purpose and 15 needs statement in the LRA. And the contention should 16 be rejected for that reason alone.

17 Now we understand that there are a couple 18 of other core arguments in Contention B that I'd like 19 to briefly mention regarding alternatives and 20 cumulative impacts. As noted in our brief, Contention 21 B alleges a defect in the purpose and needs statement 22 and then claims that some aspect of the alternatives 23 were cumulative impact discussions, supplies, and 24 supporting basis for that contention. But as PG&E and 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

44 the NRC staff have explained in our respective briefs, 1

there is no defect in the purpose and needs statement.

2 And so without that defect in the first 3

instance, those assertions are not alternatives and 4

cumulative impact provide no support for the 5

overarching claim. But going one step further just 6

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

assertions as separate standalone claims or 8

contentions, they would still be inadmissible for 9

multiple reasons.

10 For example, petitioner offers conclusory 11 assertions that the alternatives and cumulative impact 12 discussions are deficient. But it doesn't identify a 13 single reasonable alternative that hasn't been 14 considered or a single cumulative impact that hasn't 15 been considered. As another example, given that this 16 is a Part 72 license renewal proceeding, the ER 17 supplement is only required to address, quote, 18 significant environmental changes, end quote, pursuant 19 to 10 CFR Part 72.

20 So petitioner doesn't acknowledge that 21 standard. And it certainly doesn't offer any 22 explanation as to how it's met or satisfied it here.

23 So in sum, these arguments do not support a challenge 24 to the purpose and needs statement.

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45 And even if you had standalone 1

contentions, these corollary claims would be 2

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

other reasons stated in our brief, we believe that 4

neither Contention A nor Contention B are admissible 5

and that the Board should dismiss the petition 6

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

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

minutes ago.

9 In the discussion that we heard, there was 10 a suggestion that the application at Appendix G-4 11 discussed the decommissioning timberline be based on 12 a prompt ISFSI decommissioning scenario. And that is 13 correct. But what the Board should understand here is 14 that the decommissioning timberline for the ISFSI is 15 not affected by plant operation. The ISFSI will store 16 the fuel from the initial 40 years of operation and no 17 more, absent some other future licensing action.

18 The timing for the removal of that fuel 19 doesn't depend on whether the reactor contained 20 Doppler. That depends on DOE's performance or the 21 availability of a consolidated interim storage 22 facility or some other outside action that is not 23 affected by plant license renewal.

So the 24 decommissioning timberline for the ISFSI isn't 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

46 affected by the plant license renewal.

1 I also wanted to respond to counsel's 2

claim that petitioners didn't know how the ISFSI 3

operating costs would be funded if the plant license 4

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

Footnote 53, the SB 846 statute passed by the 6

California legislature and signed by the California 7

governor says that those operating costs will be 8

recovered through the normal rate making process. And 9

finally, I'd like to respond to counsel's assertion 10 that PG&E is a contractor to the state.

11 PG&E has not called itself out as acting 12 on behalf of the State of California in this ISFSI 13 license renewal proceeding, period. So I just wanted 14 to clarify that for the Board. And I'm happy to take 15 any other questions Your Honors may have.

16 JUDGE TRIKOUROS:

I just want to 17 understand the picture at the end of 60 years. We're 18 looking at an ISFSI that has 40 years of fuel in it.

19 So we're looking at a spent fuel pool that has 20 20 years of fuel in it apparently with enough empty space 21 to also include a full core.

22 Otherwise, I suppose you would not make it 23 to that point. You'd have to stop in prior years or 24 do something at the end of that, when you ran out of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

47 that ability to offload. The decommissioning 1

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

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

question. Could you begin decommissioning activities 4

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

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

ISFSI?

7 MR. LIGHTY: Are you talking about could 8

decommissioning begin with a plan --

9 (Simultaneous speaking.)

10 MR. LIGHTY: I think that partial 11 decommissioning activities could begin. Obviously, 12 the plant itself could not be fully decommissioned 13 with spent fuel still in the pool.

14 JUDGE TRIKOUROS: So there would be a 15 requirement to expand the storage requirements for 16 spent fuel at that point. But it would not 17 necessarily involve this particular ISFSI. Is that 18 correct?

19 MR. LIGHTY: Correct. If a policy 20 decision or a mandate of a state said you must fully 21 decommission the reactor, take the fuel out of the 22 spent fuel pool, and assuming that there was no 23 consolidated interim storage facility available that 24 DOE has not completed a permanent repository at the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

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

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

Judge Trikouros, it could either be through the 4

general license, a separate specific license, an 5

amendment to this specific license. But none of that 6

is being proposed as part of this license renewal.

7 JUDGE TRIKOUROS: And it doesn't have to 8

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

number of other options.

10 MR. LIGHTY: True. We have seen other 11 precedent where fuel goes from one site to another 12 site, even though that site is not necessarily 13 consolidated interim storage facility but potentially 14 in an aggregator site.

15 JUDGE TRIKOUROS: All right. Thank you.

16 JUDGE HAWKENS: Thank you.

17 MR. LIGHTY: Thank you, Your Honors.

18 JUDGE HAWKENS: You may proceed, sir.

19 Thank you.

20 MR.

GENDELMAN:

Thank you.

Good 21 afternoon. May it please the Board. My name is Adam 22 Gendelman from the NRC staff. Thank you for the 23 opportunity to discuss the staff's position on San 24 Luis Obispo Mothers for Peace's petition. I plan to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

49 discuss staff use on the principle issues in dispute, 1

especially Contention A, as each party has a different 2

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

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

4 JUDGE HAWKENS: Could you also start off 5

with a brief discussion on your view of standing?

6 MR. GENDELMAN: Happily, Your Honor. I 7

think you and Judge Arnold captured the staff's 8

position exactly with regard to the discussion of the 9

proximity-plus standard. In the staff's view, as you 10 noted, Judge Hawkens, this is an application for the 11 renewal of a facility to store 2,100 metric tons of 12 spent fuel.

13 And in the staff's view, that action meets 14 that standard. To be clear, that's not a reflection 15 on the actual probability of any event that could 16 cause such consequences. But especially given this is 17 a license renewal proceeding versus, for example, an 18 amendment on some more auxiliary matter that we can 19 say it's been demonstrated.

20 JUDGE HAWKENS: And based on the legal 21 rational and the licensing board's 2002 standing 22 decision in the Diablo Canyon case, you still find 23 that to be a reasonable analysis?

24 MR. GENDELMAN: It's informative. With 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

50 regard to the previous discussion about a fresh 1

assertion of standing, I think we agree with 2

petitioner that they have made that fresh assertion 3

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

circumstances and how they were disposed of.

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

granted standing in the past. So we have standing 7

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

petition and in the updates.

9 JUDGE ARNOLD: Where in the petition does 10 it even assert that there's a potential for offsite 11 consequences?

12 MR. GENDELMAN: So in our reading of the 13 affidavits, the affiants note their concerned about 14 continued operation of the ISFSI jeopardizing their 15 health and safety and the quality of the environment.

16 And so that's the language that we think it 17 demonstrates those concerns.

18 JUDGE ARNOLD: That demonstrates that they 19 have concern. But does it demonstrate that there's an 20 obvious potential for damage?

21 MR. GENDELMAN: No, I think, as I said, 22 the staff's view is we're not contesting standing in 23 the light of the fact that this is a major license 24 proceeding, the proceeding whose disposition affects 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

51 whether or not this facility will continue to operate 1

coupled with the amount and radioactivity that the 2

material could be stored, and the potential, however 3

small, of what dispersion of that material could bring 4

about.

5 JUDGE ARNOLD: So essentially, you're 6

filling in the assertion that there's an obvious 7

potential for consequences based upon your knowledge 8

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

9 MR. GENDELMAN: I'm not sure I would 10 characterize it that way. But staff's view is that 11 standing has been adequately pled. I understand the 12 Board's questions with regard to some of those square 13 corners. But I think consistent with both previous 14 practice, it's inferential, not binding authority that 15 standing has been demonstrated.

16 JUDGE TRIKOUROS: Just one question along 17 those lines. Does the fact that this plant is in the 18 Ninth Circuit and that terrorist activities are soon 19 to occur in that circuit, would you say that the 20 licensing basis of this plant, Diablo Canyon, includes 21 the potential for terrorist activity associated with 22 the spent fuel, the ISFSI?

23 MR. GENDELMAN: So I believe I understand 24 your question. And I would certainly say that ISFSIs 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

52 in the Ninth Circuit and all others are appropriately 1

required to mitigate against both safety and security 2

risk consistent with NRC requirements. With regard to 3

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

in any particular circuit.

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

proximity-plus standard is about the potential for 7

consequences distinct from an actual probability. So 8

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

was a proposal to add a single cask, for example, to 10 go from 2,100 tons to 2,150 metric tons. I think the 11 analysis might be different because at issue is the 12 condition of a single cask versus the renewal of the 13 entire facility.

14 JUDGE HAWKENS: Thank you.

15 MR. GENDELMAN: So to begin, this 16 proceeding, of course, concerns PG&E's application to 17 renew its ISFSI license under Part 72. It's not a 18 proceeding for the renewal of a reactor license 19 renewal nor is it a proceeding as the applicant noted 20 several times to otherwise amend PG&E's Part 72 21 license to resign the facility or change the amount of 22 material that can be stored there. In one case 23 identified in the petition, the ISFSI renewal 24 application creates a linkage between the retirement 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

53 of the Diablo Canyon reactors and satisfaction of 1

financial qualification requirements in 10 CFR 72.22E.

2 In that one case, the developments 3

associated with potential reactor renewal are relevant 4

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

admissible contention but relevant only because they 6

bear factually on the satisfaction of regulatory 7

criteria in this proceeding. This framework unknots 8

the central question we think presented by both 9

contentions which is with respect to this Part 72 10 proceeding, what is the significance, if any, of the 11 recently developments associated with the potential 12 for continued operations at the Diablo Canyon 13 reactors? We think the answer indicated is that 14 they're relevant only insofar as they bear upon the 15 ISFSI license renewal application and the applicant's 16 satisfaction of requirements again in this proceeding.

17 This framework also shows why the 18 petition's other arguments in Contention A and 19 Contention B do not succeed because the other sited 20 portions of the ISFSI renewal application do not rely 21 on the timing of the retirement of the Diablo Canyon 22 reactors as the basis for meeting regulatory 23 requirements in Part 72. And therefore, these recent 24 events concerning that potential for continued 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

54 operations are not similarly relevant to this 1

application. And so with respect to Contention A as 2

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

Contention A concerning financial qualification in 4

72.22E to be admissible.

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

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

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

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

would understand that you agree now that their 10 contention should be admissible in full? And if not, 11 could you tell me when?

12 MR. GENDELMAN: I'm not sure that I 13 understood the reply to drop the 7230 financial 14 assurance argument as distinct from 7222 financial 15 qualifications argument. But otherwise, yes.

16 JUDGE HAWKENS: All right. We'll follow 17 up with that in rebuttal. Please proceed.

18 MR. GENDELMAN: So in sum, 72.22E requires 19 an applicant to demonstrate its financial 20 qualifications and that they either have the necessary 21 funds or have reasonable assurance of obtaining them 22 to cover operating costs in the prime life of the 23 facility, in this case, a 40-year renewal for the 24 ISFSI, not to be confused with the other, as well as 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

55 the cost of decommissioning the ISFSI facility. The 1

application provides that this funding will derive 2

from the rate making process until November 2024 at 3

which time funding will include the reactor 4

decommissioning trust fund. The petition contrasts 5

these representations with the recent developments 6

concerning the potential for continued operations at 7

the Diablo Canyon reactors, the passage of California 8

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

the letter where the applicant states its intent as we 10 heard today to take the necessary steps to operate 11 Diablo Canyon reactors beyond the dates in their 12 current license.

13 Petition concludes that therefore the 14 applicant has not demonstrated financial 15 qualifications in light of these circumstances.

16 First, the staff does not have a position on the 17 sufficiency of this or any provision in the 18 application as the staff has not completed its 19 technical or environmental reviews, but does find this 20 portion of Contention A to be admissible as it meets 21 the individual requirements of 2.309 F1. And as 22 discussed, the staff believes that the petition has 23 demonstrated standing.

24 The applicant in its answer and today 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

56 counters on what I would call two principle runs.

1 First, the application is accurate. The licenses 2

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

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

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

regulatory actions.

6 They submitted a

renewal license 7

application that the NRC would approve it and then to 8

now in the present rely upon all that in its 9

application. Further, as the applicant notes, PG&E 10 has not actually submitted a renewal application and 11 has not even intended renewal notwithstanding the 12 timely renewal exemption that the applicant requested 13 and the staff issued this past March. In response, I 14 would say that the applicant is correct as to the 15 current -- I think as you fashioned it, legal 16 regulatory posture, sort of the legal reality.

17 And understandably stress the potential, 18 not certainty, for the extension of reactor operating 19 life. But I think this can differ on the significance 20 of these recent factual developments in light of the 21 language in the application, specifically, the linkage 22 in the application between the retirement of Unit 1 23 and the applicant's satisfaction of 72.22B. The 24 potential extension of the Diablo Canyon reactor 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

57 licenses is run in here because it bears upon the 1

availability of funding sources identified in the 2

application, in the ISFSI renewal application.

3 Specifically, the applicant's recent 4

statements about its intent to continue Diablo Canyon 5

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

decommissioning trust funds would be available to 7

support ISFSI operations in 2024. Thus, in the 8

staff's view, this disagreement between the petitioner 9

and the applicant over the significance of these 10 events for the applicant's demonstration of compliance 11 with 72.22B is indeed a material dispute and 12 illustrates the satisfaction of 2.309 F16 regarding 13 that requirement. And so --

14 JUDGE HAWKENS: I think in your brief, you 15 indicated you had no substantive concern in the long 16 run about PG&E and feel like it's financial 17 obligations. So why is it material?

18 MR. GENDELMAN: So that's right, Your 19 Honor. And I think that gets to PG&E's second 20 argument which has a couple of different forms, both 21 they and in their answer that either a continued 22 operation scenario where both rate case funding 23 followed by at some time decommissioning trust fund 24 funding is conservative vis-a-vis what's in the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

58 application. I believe I saw something that even SB 1

846 itself has some funding provisions. And then sort 2

of in any scenario given the Commission case law about 3

rate making authority being sort of a presumptive 4

demonstration of reasonable assurance that in any 5

scenario adequate funding would be available. So the 6

contention should not be omitted.

7 I think with regard to all of these 8

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

in that I think we agree with the petitioner in their 10 reply that all these arguments may very well be right.

11 But they all get to the merits. Does the applicant 12 satisfy 72.22E where the person here is, has the 13 petition satisfied the contention and admissibility 14 requirements?

15 It may very well be that the resolution of 16 this contention is and the staff once it completes a 17 safety review may even agree that the application as 18 it exists now meets NRC requirements. But that's a 19 merits question. And at this point, I don't think 20 that begrudges the submission of an admissible 21 contention. And I'm sort of pointing again to the --

22 I think it's the Private Fuel Storage case in our 23 brief that while the showing that a petitioner needs 24 to make at this space is not insubstantial.

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59 A petitioner doesn't have to prove their 1

contention, the contention of admissibility phase. As 2

to the other claims of Contention A concerning 3

potential redesign of the ISFSI or the need for 4

increased capacity based on extended operations as 5

well as financial assurance in 72.30, the staff used 6

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

claim succeeds because in this cases the claims in the 8

petition are not similarly grounded in language in the 9

application which in turn does not rely on a specific 10 nuclear power plant retirement date to demonstrate 11 compliance with the ISFSI license renewal 12 requirements. Indeed, as the applicant notes in many 13 cases, the petition's arguments are speculative 14 contrary to the specific representations in the 15 application.

16 For example, there is no request for an 17 increase in the amount of fuel to be stored at the 18 ISFSI. Similarly with regard to Contention B arguing 19 that the applicant's environmental report is similarly 20 problematic because of its dependence on 2024 and 2025 21 Diablo Canyon reactor requirements. The staff views 22 those claims as simply again not worn out but language 23 in the application.

24 Indeed as the applicant notes, the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

60 proposed action, renewal of the independent spent fuel 1

storage installation license is independent of 2

operations from the Diablo Canyon reactors in this 3

regard. With respect to the alternatives analysis, 4

the petition does not seem to count in this specific 5

discussion any application and from the staff's view 6

argues that the environmental report lacks an analysis 7

that it appears to contain. With regard to cumulative 8

impacts, the petition does not identify any impacts 9

that are not considered cumulatively.

10 And while there's not a distinct section 11 in the environmental report titled cumulative impacts, 12 because the only direct impacts identified are public 13 and occupational dose, impacts that are evaluated 14 cumulatively. Again, I think we have a contention 15 that alleges an omission and precludes precedent. And 16 so in summary, while this step is not completed, it's 17 technical environmental reviews.

18 The petition proposes an admissible 19 contention with respect to financial qualifications 20 under 72.22E. But the remainder of Contention A and 21 Contention B are inadmissible.

They contain 22 speculation about the future and not this application 23 in its satisfaction of the applicable NRC requirements 24 in this Part 72 proceeding. And with that, I'd be 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

61 happy to answer any additional questions.

1 JUDGE ARNOLD: Just a practical matter.

2 What's the current schedule for the ISFSI license 3

renewal review? When is a decision expected?

4 MR. GENDELMAN: Yes, Your Honor. The 5

original docketing letter from September of last year 6

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

additional information, RAIs, in the February time 8

frame with an eye towards a decision in the November 9

time frame. My understanding is that that schedule 10 has slipped and that a new schedule is being 11 formulated but has not been finalized. I don't 12 believe RAIs have been issued yet. But I don't think 13 there's a new schedule.

14 JUDGE ARNOLD: My question arises if the 15 licensing decision came down in November, before an 16 application is due for the renewal of the operating 17 license, then its current status would reflect the 18 correct status at time of renewal. But if it's 19 delayed, then certainly you have to look at the 20 implications of plant license renewal.

21 MR. GENDELMAN: I understand, Your Honor.

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

23 That said, I don't think in the staff's view that's 24 necessarily sort of the break point in that we've been 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

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

Board that with regard at least to the financial 2

qualification and contention that based on not future 3

speculative could submit, could not submit actions.

4 But that based on the world as it exists 5

today that an admissible contention has been 6

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

understand your concern.

8 JUDGE HAWKENS: I want to follow up. You 9

disagree with petitioner's argument in Contention A to 10 the extent it deals with Section 72.30?

11 MR. GENDELMAN: That's right.

12 JUDGE HAWKENS: The decommissioning. And 13 I want to make sure I understand why that is. If I 14 understand petitioner's argument, they point to 15 Appendix G-5 which states decommissioning estimate is 16 based on configuration of the ISFSI which in turn is 17 based on Units 1 and 2 operating until the end of 18 current licenses, 2024, 2025.

19 And it's your position that it can be 20 based on that because the ISFSI can accommodate 40 21 years of waste. And therefore, it will take in waste 22 till '24 and '25. And so that statement is accurate.

23 It doesn't matter whether they, in fact, are retired 24 in 2024 and 2025 or not?

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63 MR. GENDELMAN: I would say it a little 1

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

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

72.22 discussion specifically points to the 2024 4

retirement and specifically identifies it as a funding 5

source, the decommissioning trust fund at that time 6

that the retirement sort of correlates to 7

demonstration of regulatory requirements in this 8

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

that. So from a staff perspective, it's not clear to 10 me whether or not that assessment being based upon 11 2024 or 2025 retirement ultimately impacts the 12 sufficiency that administration and staff has not 13 completed a safety review. But specifically the 72.22 14 case where regulatory compliance is specifically tied 15 by the application to the 2024 retirement of the 16 facility, we believe that the petition is articulated.

17 JUDGE HAWKENS: I understand. Let me try 18 to simplify it even further. Would it be your view, 19 their reference to the retirement of the reactors in 20 the 2024, 2025 for purposes of 72.30 are simply not 21 material?

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

23 Given the structure of the regulation in a way that 24 portion of the application is structured. Again, it's 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

64 open in sufficiency.

1 JUDGE HAWKENS: No more questions for you.

2 Thank you.

3 MR. GENDELMAN: Thank you, Your Honor.

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

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

least 12 minutes left.

7 MS. CURRAN: Great.

8 JUDGE HAWKENS: She's nodding her head in 9

the affirmative. So you may proceed.

10 MS. CURRAN: Thank you. In response to 11 something Mr. Lighty said about how our claims only 12 relate to expansion. I just want to direct your 13 attention to a paragraph on the bottom of page 5 of 14 our hearing request. This is really following up on 15 what NRC staff counsel said that we -- our contention 16 is based on the fact that the license renewal 17 application depends on the assumption of a retirement 18 date of 2024 and 2025.

19 And we're expressing concern that there 20 will be a period of time now, potentially 20 years, 21 when the PG&E does not have access to the 22 decommissioning trust fund. So thank you very much.

23 We appreciate the staff's logical support for that 24 contention.

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65 And I also feel that the argument was 1

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

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

haven't made an adequate claim about the 4

decommissioning fund because we did assume that the 5

capacity of the ISFSI could be increased.

6 And it's just not there in the 7

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

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

contention because NEPA requires some consideration of 10 the big picture. And obviously --

11 JUDGE HAWKENS: I'm going to put NEPA 12 aside for one second. I'm looking at 72.30. So the 13 NRC staff says it agrees with you that Contention A is 14 admissible to the extent it raises a challenge 15 regarding PG&E's compliance with Section 72.22, I 16 believe. You also made a claim in Contention A that 17 they're in compliance with Section 71.30 was 18 deficient. Are you no longer advancing that argument?

19 MS. CURRAN: That's right.

20 JUDGE HAWKENS: Okay.

21 MS. CURRAN: Yeah.

22 JUDGE HAWKENS: For purposes of Contention 23 A, you're simply saying that they're showing financial 24 qualification for operating of the ISFSI under 72.22 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

66 is deficient.

1 MS. CURRAN: Yeah.

2 JUDGE HAWKENS: Okay. Thank you.

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

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

statement of purpose and need which is a requirement 6

to have a reasonably accurate statement of purpose and 7

need for the proposed action. This is a supplemental 8

environmental assessment. We continue to think that 9

if this is supplementing the previous environmental 10 assessment, this environmental assessment needs to go 11 back and discuss what was the purpose and need back 12 then and then discuss what are -- NEPA requires a 13 discussion of reasonably foreseeable actions and 14 impacts.

15 It's reasonably foreseeable that PG&E will 16 seek to expand the capacity of this ISFSI. If they 17 get 20 more years of operation, that's a real good 18 question. What are they going to do with the spent 19 fuel they generate, especially since they answer to 20 the state.

21 And the state wants them to take the fuel 22 out of ports as expeditiously as possible. We think 23 all that needs to be addressed in the environmental 24 assessment. It's important.

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67 This is the whole purpose of NEPA, that 1

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

the relevant considerations. So you don't foreclose 3

anything because you had tunnel vision. Clearly under 4

the safety regulations, there is now tunnel vision.

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

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

appropriate remedy here if you don't admit our 8

contentions is to hold this proceeding in abeyance 9

until we know what PG&E is going to do for this 10 license renewal application. Because this -- we are 11 not content to say PG&E may amend the ISFSI license --

12 seek to amend the ISFSI license some point down the 13 road.

14 This was our opportunity right now. This 15 license renewal is being sought for 20 years. And 16 it's a long time. This is our opportunity as members 17 of the public. We know that if you don't take the 18 opportunity when it comes up, it goes by and it may 19 not come up again.

20 We don't want to rely on some 21 discretionary decision by PG&E or the NRC to amend 22 this license. The issues before us now, we know now 23 that PG&E has invested resources into filing a new 24 license renewal application for this reactor -- set of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

68 reactors.

1 Those considerations, it's really 2

important for any environmental assessment that 3

addresses the impacts of the ISFSI to look at all 4

those relevant considerations. And if more time is 5

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

concludes my rebuttal.

7 JUDGE TRIKOUROS: We all agree that if 8

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

the ISFSI, it would be an entire relicensing 10 proceeding.

11 MS. CURRAN: If there is a request for 12 expansion, yes. But we don't know when that will 13 happen. We don't know what the relationship will be 14 between storage in the pools and ISFSI -- storage in 15 the ISFSI.

Those are relevant environmental 16 considerations that PG&E could kick down the road for 17 a long time if it wanted to. And we think it's 18 important to address them now, at least in a 19 reasonably soon future, not way down the road.

20 JUDGE HAWKENS: Thank you.

21 MS. CURRAN: Thank you.

22 JUDGE HAWKENS: I want to thank the 23 parties, everyone's presentation and their written 24 pleadings today. Very helpful. And it's our intent 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

69 to issue a decision on petitioner's hearing request 1

within 35 days.

2 Before we adjourn, I'd like to acknowledge 3

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

panel's administrative assistants, Sara Culler, Andrew 5

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

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

lastly, we appreciate the services of the court 8

reporter, Lanelle Phillips. And Lanelle, will you 9

need to consult any attorneys after we adjourn to 10 ensure accuracy of your transcript?

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

12 Curran.

13 JUDGE HAWKENS: All right. We'll just ask 14 counsel to remain until Ms. Phillips has had the 15 opportunity to talk to you. Judge Trikouros, do you 16 have anything to add before we adjourn?

17 JUDGE TRIKOUROS: I do not. Thank you.

18 JUDGE ARNOLD: No.

19 JUDGE HAWKENS: The case is submitted and 20 we are adjourned. Thank you very much.

21 (Whereupon, the above-entitled matter went 22 off the record at 2:38 p.m.)

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