ML16364A344

2016/12/29 Indian Point Lr Hearing - FW: in the Matter of Entergy Nuclear Operations, Inc

ML16364A344
Person / Time
Site:	Indian Point
Issue date:	12/29/2016
From:	NRC
To:	Division of License Renewal
References
Download: ML16364A344 (24)

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1 IPRenewal NPEmails From:Turk, Sherwin Sent: Thursday, December 29, 2016 5:12 PM To:IPRenewal NPEmails

Subject:

FW: In the Matter of Ente rgy Nuclear Operations, Inc.

Attachments:

NYSDOS and Entergy to Schiffer.pdf From: Sandy Weisburst [1] Sent: Monday, December 19, 2016 5:48 PM To: lois.schiffer@noaa.gov Cc: David Kaiser - NOAA Federal <david.kaiser@noaa.gov>; Turk, Sherwin <Sherwin.Turk@nrc.gov>; Baldwin, Linda (DOS) <Linda.Baldwin@dos.ny.gov>

Subject:

[External_Sender] In the Matter of Entergy Nuclear Operations, Inc.

Dear Ms. Schiffer:

Please see the attached correspondence.

Respectfully submitted, Sanford I. Weisburst Partner Quinn Emanuel Urquhart & Sullivan, LLP

51 Madison Avenue, 22nd Floor New York, NY 10010 212-849-7170 Direct 212-849-7000 Main Office Number 212-849-7100 FAX sandyweisburst@quinnemanuel.com www.quinnemanuel.com

Hearing Identifier: IndianPointUnits2and3NonPublic_EX Email Number: 8693 Mail Envelope Properties (131eab86020b4b5cbc510765552b8967)

Subject:

FW: In the Matter of Entergy Nuclear Operations, Inc. Sent Date: 12/29/2016 5:12:01 PM Received Date: 12/29/2016 5:12:03 PM From: Turk, Sherwin Created By: Sherwin.Turk@nrc.gov Recipients: "IPRenewal NPEmails" <IPRenewal.NPEmails@nrc.gov>

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EXHIBIT A

EXHIBIT B This opinion is uncorrected and subject to revision before publication in the New York Reports.

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No. 179 In the Matter of Entergy Nuclear

Operations, Inc., et al.,

Respondents, v.

New York State Department of

State et al.,

Appellants.

Barbara D. Underwood, for appellants.

Kathleen M. Sullivan, for respondents.

Riverkeeper, Inc. et al.; African American Environmentalist Association et al.; Nuclear Energy Institute;

Chamber of Commerce of the United States of America et al.;

Emily Hammond; Kevin S. Parker et al., amici curiae.

ABDUS-SALAAM, J.:

The issue presented is whether Entergy's pending application to renew its federal operating licenses for the

Indian Point nuclear reactors on the Hudson River in Westchester

County, for an additional 20 years, is subject to review by the No. 179 New York State Department of State for consistency with the policies of New York's Coastal Management Program (CMP). The

Department of State, interpreting the CMP, which it authored, concluded that the renewal application did not fit within the

CMP's grandfather exemptions and that Entergy's application is

therefore subject to review. An agency's interpretation of its

own plan or regulation "is deferentially reviewed by the courts

to determine whether there is a rational basis for the decision and, if so, [the agency's] conclusion must be upheld" (Matter of Terrace Court, LLC v NYS DHCR, 18 NY3d 446, 454 [2012]). We

conclude that the Department of State's determination is

rational, and accordingly, the Appellate Division order holding

that Indian Point is exempt from review should be reversed.

I.Background Entergy's Indian Point nuclear facility has two active nuclear reactors, Indian Point 2 and Indian Point 3.

1 The Nuclear Regulatory Commission's (NRC) predecessor, the Atomic Energy Commission, issued 40-year operating licenses for Indian

Point 2 in 1973 and Indian Point 3 in 1975, when Consolidated

Edison owned all three reactors. The agency now known as the New

York Power Authority acquired the licensed and partially-

completed Indian Point 3 from Consolidated Edison in 1975.

Entergy bought Indian Point 3 from the Power Authority in 2000 1 Indian Point 1 ceased generating electricity in 1974. No. 179 and acquired Indian Point 2 in 2001. Entergy continues to operate the reactors under the original 40-year licenses in accordance with federal law (see 5 USC § 558; 10 CFR § 2.109).

Federal law limits the term of a initial operating license to a maximum of 40 years (see 42 USC § 2133 [c]). In

1995, the NRC adopted its current "Part 54" regulations, authorizing the re-licensing of nuclear reactors for up to 20 years beyond the original term (see 10 CFR § 54.31 [b]). A renewed operating license supersedes the original license (see 10

CFR § 54.31 [c]). An application for a license to operate a

nuclear facility requires the NRC to produce a final

environmental impact statement, and an application for a re-

license requires a supplemental site-specific environmental

impact statement, which is in addition to the 2013 Generic

Environmental Impact Statement for License Renewal of Nuclear Plants (see 10 CFR § 51.20 [b][2]; Pt 5, Subpt A, App B).

2 The applicant is required to submit an environmental report to the

NRC and to identify other necessary environmental permits and

approvals (10 CFR §§ 51.45, 51.53 [c]).

Congress adopted the Coastal Zone Management Act (the Act) in 1972, to encourage the states to protect their coastal

resources, with an aim "to preserve, protect, develop, and where

possible, to restore or enhance, the resources of the Nation's 2 Reactor License Renewal http://www.nrc.gov/reactors/operating/licensing/renewal/overview.

html, accessed Oct. 31, 2016. No. 179 coastal zone for this and succeeding generations" (16 USC § 1452

[1]). The Act states that "[t]he key to more effective

protection and use of the land and water resources of the coastal

zone is to encourage the states to exercise their full authority" over coastal lands and waters by adopting coastal management

programs of their own. It provides that a coastal state can

choose to draft a CMP, which is a "comprehensive statement . . .

setting forth objectives, policies, and standards to guide public

and private uses of lands and waters in the coastal zone" (16 USC

§ 1453 [12]). Upon completion, the state then submits the CMP to the United States Secretary of Commerce for authorization (see 16

USC § 1454).

The Act mandates that once the Secretary has approved a state's management program, "any applicant for a required [f]ederal license . . . affecting any land or water use

or natural resource of the coastal zone of

that state shall provide in the application

to the licensing . . . agency a certification

that the proposed activity complies with the

enforceable policies of the state's approved

program and that such activity will be

conducted in a manner consistent with the

program" (16 USC § 1456 [c][3][A]).

Within six months of submission, the affected state must concur

or object to the certification. Further, the Act provides that

"[n]o license or permit shall be granted by the [relevant]

federal agency" until the state or its designated agency has

concurred with the certification, is deemed to have done so, or

the Secretary overrides the State's objection (16 USC § 1456 No. 179

[c][3][A]). Federal regulations under the Act require consistency review of renewal applications for federal licenses

that affect any coastal use or resource where the activities were

not previously reviewed by the designated state agency, where the

activities are subject to new management changes, or where the

renewal will cause an effect substantially different from those the state agency originally reviewed (see 15 CFR §§ 930.51[b][1]-

[3]). The Act does not grant any exemptions or exceptions to the

consistency requirement.

In 1982, New York adopted a CMP.

3 The Department of State took the lead in preparing the CMP and administers it. The

United States Secretary of Commerce approved the CMP and it became effective on September 30, 1982 (see 47 Fed Reg 47056-02

[1982]). The CMP sets forth 44 enforceable statewide policies

relating to coastal activities against which federal license

renewals and other federal actions affecting coastal resources

must be assessed. State actions are also subject to review, but

that review is not conducted by the Department of State but by

the state agency proposing to take the action in accordance with the regulations promulgated by the Department (see 19 NYCRR §§

600.21. 600.3, 600.4; Executive Law § 919). The CMP's statewide

policies include protecting fish and wildlife resources; 3 New York State Coastal Management Program and Final Environmental Impact Statement http://www.dos.ny.gov/opd/programs/pdfs/NY_CMP.pdf, accessed Oct.

25, 2016. No. 179 preventing or minimizing damage from flooding or erosion; meeting public energy needs in an environmentally safe manner; and

controlling air and water pollution.

New York has designated its Department of State to review federal agency actions to ensure consistency with the 44

coastal policies set forth in the CMP. The Department conducts a

federal consistency review of a proposed federal license application pursuant to the federally approved CMP (see 15 CFR §

930.11 [h]). The CMP lists the issuance of an operating license

for a nuclear facility as a reviewable activity that requires the

applicant to submit a federal consistency certification to the

Department. This requirement also expressly applies to renewals

of federal licenses.

Certain projects are exempt from the CMP's consistency requirement: "The projects which meet one of the following two criteria have been determined to [b]e

projects for which a substantial amount of

time, money and effort have been expended, and will not be subject to New York State's

[CMP] and therefore will not be subject to

review pursuant to the Federal consistency

procedures of the Federal Zone Management Act

of 1972, as amended: (1) those projects

identified as grandfathered pursuant to [the]

State Environmental Quality Review Act (SEQRA) at the time of its enactment in 1976;

and (2) those projects for which a final

Environmental Impact Statement has been

prepared prior to the effective date of the

Department of State Part 600 regulations [see

Appendix A, DOS Consistency Regulations, NYCRR Title 19, Part 600, 6600.3 (4)]. If an

applicant needs assistance to determine if

its proposed action meets one of these two No. 179 criteria, the applicant should contact the Department of State" (CMP, Section 9).

4 The license for Indian Point 2 expired in September 2013 and the license for Indian Point 3 expired in December 2015. In 2007, Entergy applied to the NRC for a 20-year renewal of both

operating licenses, and initially took the position with the NRC

that its application was subject to the Department of State's

federal consistency review under the CMP. However, in 2012, Entergy changed its position and sought a ruling from the NRC

that its re-licensing application was not subject to the

Department's review for consistency with the CMP. The State of

New York opposed Entergys request and cross-moved for a

declaratory ruling that consistency review was required.

5 The NRC staff recommended that Entergys motion be denied because consistency review issues should be resolved by the Department of

State in the first instance. On June 12, 2013, the NRCs Atomic

Safety and Licensing Board ruled that Entergys motion and New

Yorks cross-motion were premature because the New York 4 As noted by the Appellate Division, the provision contains a typographical error in the original text, and the parties

concur that the reference to section 6600.3 (4) is intended to

refer to 19 NYCRR 600.3 (4), which is now codified at 19 NYCRR §

600.3 (d).

5 See State of New York Response to Entergys Request to The Atomic Safety and Licensing Board for a Declaratory Order Concerning Coastal Zone Management Act Issues and Cross-motion for Declaratory Order

http://pbadupws.nrc.gov/docs/ML1309/ML13095A481.pdf, accessed

Oct. 25, 2016. No. 179 Department of State and the NRC staff had not yet consulted.

6 Entergy subsequently sought a declaratory ruling from the Department of State as to whether its license renewal

application was exempt from the CMP's consistency requirement.

It argued that the license renewals were not subject to

consistency review because, with respect to the first exemption, Indian Point 2 and 3 were grandfathered under SEQRA (see ECL art

8; ECL § 8-0111[5][a]) at the time of its enactment in 1976, and

with respect to the second exemption, the facilities' final

environmental impact statements were adopted before the effective

date of the Department of State regulations referenced in that

exemption.

The Department of State determined that Entergy's application to extend its operating licenses for 20 years was not

exempt from consistency review under the CMP. Entergy then

commenced this hybrid CPLR article 78 proceeding/declaratory

judgment action seeking to annul the Department's determination

and requesting a declaratory judgment that the Indian Point

nuclear reactors are not subject to the CMP. Supreme Court, among other things, upheld as rational the Department's

determination that neither exemption in the CMP applied, and

dismissed the proceeding (42 Misc 3d 897 [2013][Sup Ct, Albany 6 See In the Matter of Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3) http://pbadupws.nrc.gov/docs/ML1316/ML13163A233.pdf. accessed

Oct. 25, 2016. No. 179 County]). The Appellate Division reversed, holding that Indian Point fit within the second of the two exemptions listed in the

CMP (125 AD3d 21 [3d Dept 2014]). The Appellate Division did not

address whether Indian Point had also met the criteria of the

first listed exemption. We granted the Department of State

appellants' motion for leave to appeal (25 NY3d 908 [2015]).

7 II.The Exemptions In considering the Department of State's interpretation of the exemptions set forth in the CMP, we are mindful of well-

established principles that we recently reiterated and applied in Matter of Natural Resources Defense Council, Inc. v New York State Dept. of Envtl. Conservation (25 NY3d 373 [2015]). "[T]he

construction given statutes and regulations by the agency

responsible for their administration, if not irrational or

unreasonable, should be upheld" and "this Court treads gently in

second-guessing the experience and expertise of state agencies charged with administering statutes and regulations" (id. at 397

[internal citations and quotation marks omitted]). While the CMP

is not a statute or regulation, it is a program authored and

administered by the Department of State, and approved by the

United States Secretary of Commerce, that sets forth enforceable 7 By determination dated November 6, 2015, the Department of State completed its consistency review and objected to Entergy's

certification of consistency with the CMP. That determination is

not before us. No. 179 statewide policies. As such, the Department's interpretation of that program is entitled to deference.

Regarding the first exemption, for "those projects identified as grandfathered pursuant to State Environmental

Quality Review Act [SEQRA] at the time of its enactment in 1976," Entergy contended before the Department of State that Indian

Point 2 and 3 were identified as grandfathered pursuant to SEQRA

at the time of its enactment. In response, the Department

reasoned that the exemption was not automatic, that the relevant

agency had to expressly identify the specific project as being

exempt from SEQRA, and that the exemption from consistency was

not coextensive with the SEQRA grandfathering provision. It

looked to the "grandfathered projects lists," established

pursuant to SEQRA, in which each state agency provided "the

director of the budget [with] a list of projects such agency

deem[ed] to have been approved" for the purposes of exempting

those projects from SEQRA, even though the project was approved prior to SEQRA's effective date (see L 1976, ch 228, § 5). Indian Point 2 was never on such a list. Thus, the Department concluded

that it did not qualify for the first exemption. Regarding

Indian Point 3, the Department noted that, in 1978, the New York

Power Authority had included Indian Point 3 on such a list.

Nevertheless, the Department concluded that this listing did not exempt the current re-licensing application as the 1978 listing

was limited to construction of certain facilities and acquisition No. 179 of certain real property and easements, none of which referred to the operation of Indian Point 3.

Supreme Court correctly determined that the Department of State's interpretation of the first exemption is rational and

should be upheld.

The Department takes the position that the phrase "identified as grandfathered" must have some meaning

beyond simply referencing SEQRA, or the exemption would have just

said "grandfathered under SEQRA." The word "identified" is reasonably interpreted by the Department as implying an

affirmative step, such as the placing on a list.

Furthermore, the CMP exemption refers to SEQRA legislation that was enacted in

1976, and as noted by the Department, the 1976 SEQRA legislation

specifically directed state agencies to create a list of projects deemed approved and not subject to SEQRA (see L 1976, ch 228, §

5), whereas the more general grandfathering provision that

Entergy would have us apply was adopted in the original SEQRA legislation in 1975 (see L 1975, ch 621). Thus, the Department

of State's interpretation of the first exemption -- unlike

Entergy's -- gives effect to the plain language of the exemption, and we uphold the Department's conclusion that the first

exemption is inapplicable to Indian Point.

The second exemption applies to "those projects for which a final environmental impact statement has been prepared

prior to the effective date of the Department of State part 600

regulations," with a reference to Part 600 and Part 600.3(d). No. 179 The Department determined that this exemption must be understood as exempting projects for which a SEQRA environmental impact

statement had been prepared, and projects which pre-existed, but

would have otherwise been subject to, the part 600 regulations on

their effective date. Context is important when considering this

exemption. The Part 600 regulations referenced in the bracketed

language of the second exemption relate only to state agencies'

consistency review of their own actions and apply only to actions

undertaken by state agencies. Thus, because the licensing of

Indian Point did not involve a state agency reviewing its own

actions, the Department of State rationally concluded that this

exemption does not apply.

Additionally, the Department reasoned that the second CMP exemption directly references, and must be read in the

context of 19 NYCRR § 600.3 (4), which expressly references final

environmental impact statements prepared pursuant to SEQRA. The

Department explains that when it created the exemption, it was

solving a transition problem. State actions are subject to

review for consistency with the CMP, but that review -- known as "state consistency review" -- is conducted not by the Department

of State but by the state agency proposing to take the action, in

accordance with regulations promulgated by the Department. The

exemption ensured that projects on which state agencies had invested time, effort, and resources in the preparation of a

state environmental impact statement would not thereafter be No. 179 required to undergo a consistency review. Stated differently, it exempted from consistency review only projects that had been

subject to review under SEQRA but had not been subject to review

for consistency with the states coastal policies because the

Part 600 regulations had not taken effect. There is no exemption

for projects subject to federal environmental impact statements.

Indeed, the plain language of the exemption implies that the

reason for the second exemption was that the Part 600 regulations

were not yet available for use.

In light of this language, it was rational for the

Department of State to reject Entergy's argument that final

environmental impact statements pursuant to the National

Environmental Policy Act (NEPA) would satisfy this exemption, and

that statements prepared under SEQRA are not required. In this

appeal, Entergy, citing 6 NYCRR part 617, points out that SEQRA

permits the use of final environmental impact statements prepared

under NEPA. However, the Department of State rationally

concluded that a federal environmental impact statement issued

under NEPA before 1976 is not contemplated by the second

exemption because the purpose of the exemption was to ensure that

projects on which state agencies had invested time, effort, and resources in the preparation of a state environmental impact

statement would not thereafter be required to undergo a

consistency review.

8 8 It is also worth noting that a federal environmental impact statement does not necessarily or automatically satisfy SEQRA, as No. 179 The Appellate Division rejected as irrational the Department of State's position that the final environmental

impact statements must have been prepared pursuant to SEQRA. The court was persuaded by Entergy's argument that SEQRA permits the

use of final environmental impact statements prepared under NEPA

and that there is no indication that the final environmental

impact statements prepared for Indian Point 2 and 3 would not

have complied with SEQRA. But the fact that SEQRA permits the

use of a statement prepared under NEPA misses the point. The

Department's interpretation is rational given the references to

the Part 600 regulations in the bracketed language of the second

exemption and the explained purpose of the exemption; those

regulations relate only to state agencies' review of their own actions and apply only to actions undertaken by State agencies

.In other words, it is the context of Part 600, and not the

definition of an environmental impact statement in Part 617, that

matters. When considered in context, the language of the

exemption is tied to the Department's intent in drafting the

exemption.

Entergy also argues that, if the second exemption is interpreted as the Department of State contends, then the

exemption never applied to anything, and is essentially a null

set. However, the exemption did apply to something, but it only the regulation obviates the need for a SEQRA environmental impact statement only insofar as a federal environmental impact

statement "is sufficient to make findings" under the SEQRA

regulations (6 NYCRR § 617.15). No. 179 applied to projects by state agencies that were in progress as of the effective date of the CMP regulations and that, without the

exemption, would have been subject to CMP review.

9 Finally, aside from Department of State's interpretation of the specific language of the exemptions, it is

plain that these narrow exemptions for projects that had final

environmental impact statements completed prior to the adoption

of the CMP do not apply to re-licensing. Entergy's current

application for a license to operate the Indian Point nuclear

reactors for an additional 20 years is a new federal action, involving a new project, with different impacts and concerns than

were present when the initial environmental impact statements

were issued over 40 years ago. Thus, just as renewal of a

license to operate a nuclear power plant triggers the requirement

that the NRC produce a supplemental environmental impact statement (see 10 CFR § 51.20), both the Coastal Zone Management

Act and the CMP require consistency review for re-licensing of

nuclear facilities.

10 The Department's position that the Indian Point reactors are not forever exempt from consistency review 9 The Department has informed this Court that in September 2016, it submitted to the National Oceanic Atmosphere

Administration's Office of Ocean and Coastal Resources Management

a routine program change to the CMP that would eliminate certain

provisions that the Department has concluded are obsolete, including the exemptions at issue in this appeal.

10 As noted by the Department, it has previously conducted federal consistency reviews of NRC license renewal applications

for three other aged nuclear power plants located in New York --

the James A. Patrick power plant, the R.E. Ginna nuclear plant, and the Nine Mile Point Unit 1 plant. No. 179 under the CMP, is reasonable.

In sum, the Department of State's interpretation of the exemptions in the Coastal Management Program, and its conclusion

that Entergy's application to re-license the nuclear reactors at

Indian Point is subject to consistency review are rational, and

must be sustained. Accordingly, the Appellate Division order

should be reversed, with costs, the petition denied, and judgment

granted in favor of the Department of State appellants in

accordance with this opinion.

• * * * * * * * * * * * * * * *

• Order reversed, with costs, petition denied, and judgment granted in favor of appellants in accordance with the opinion herein.

Opinion by Judge Abdus-Salaam. Chief Judge DiFiore and Judges

Pigott, Rivera, Stein, Fahey and Garcia concur.

Decided November 21, 2016