ML14059A554

Exelon'S Memorandum Responding to the Questions in the Board'S February 5, 2014 Order

ML14059A554
Person / Time
Site:	Dresden
Issue date:	02/28/2014
From:	Kuyler R P Exelon Generation Co, Morgan, Morgan, Lewis & Bockius, LLP
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
50-237-EA, 50-249-EA, Enforcement Action, RAS 25642
Download: ML14059A554 (40)

Text

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD

)

In the Matter of: ) Docket Nos. 50-237-EA

) 50-249-EA

EXELON GENERATION COMPANY, LLC )

)

(Dresden Nuclear Power Station, Units 2 and 3) )

) February 28, 2014

) EXELON'S MEMORANDUM RESPONDING TO THE QUESTIONS IN THE BOARD'S FEBRUARY 5, 2014 ORDER I. INTRODUCTION AND

SUMMARY

In accordance with the Atomic Safety and Licensing Board's ("Board's")

February 5, 2014 Order (Concerni ng Instructions for Oral Argument) ("Order"), Exelon Generation Company, LLC ("Exelon") submits th is response to the nine questions asked by the Board.

II. RESPONSES TO BOARD QUESTIONS

1. Does 10 C.F.R. § 2.202(a)(3) apply to the October 28, 2013 Confirmatory Order? Yes. The Region III Administrator issued the Confirmatory Order to Exelon in this matter pursuant to her authority under 10 C.F.R. § 2.202.

1 Thus, the Confirmatory Order properly falls under the provisions of Section 2.202.

1 See Letter from C. Pederson, NRC Region III Administrator, to M. Pacilio, Exelon, Confirmatory Order; NRC Report Nos. 05000237/2013407(DRS); 05000249/2013407(DRS) and Investigation Report No. 3-2012- 020; Dresden Nuclear Power Station, Units 2 and 3, encl. at 6 (Oct. 28, 2013) ("Accordingly, pursuant to . . . the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.202 and 10 CFR Part 50, IT IS HEREBY ORDERED . . .") (emphasis in original) ("Confirmatory Order"), available at ADAMS Accession No. ML13298A144, published in the Federal Register as In the Matter of Exelon Generation Company, LLC; Dresden Nuclear Power 2 By its plain language, 10 C.F.R. § 2.202, "Orders," applies generally to orders issued by the Nuclear Regulatory Commission ("NRC" or "Commission"). The regulation does not specifically exclude confirmatory orders from the generally applicable rule. Had the Commission intended to exclude confirmatory orders from Section 2.202(a)(3), it could have. Rather than excluding confirmatory orders, Section 2.202(a)(3) specifically contemplates confirmatory orders by limiting the right to demand a hearing only to licensees or person s who have not consented to the order.

2 Similarly, Section 2.202(b) specifies different requirements for responses to orders to which a licensee or person subject to the Commi ssion's jurisdiction has consented-thereby confirming that confirmatory orders are included within the generally applicable requirements of Section 2.202. Accordingly, Section 2.202(a)(3) applies to confirmatory orders, including this one.

Nothing in the regulatory histor y suggests a different conclusion.

3 Decisions interpreting Section 2.202 in the context of confirmatory orders reach this same logical result. For example, a 2004 Commission de cision denying a heari ng request challenging a confirmatory order-also in the enforcement context-specifically stated that the

Station Confirmatory Order Modifying License, 78 Fed. Reg. 66,965, 66,966 (Nov. 7, 2013)

("Notice").

2 See 10 C.F.R. § 2.202(a)(3) (the order shall "[i]nform the licensee or any other person adversely affected by the order of his or her right . . . to demand a hearing on all or part of the order, except in a case where the licensee or other person has consented in writing to the order") (emphasis added).

3 See , e.g., Final Rule, Revisions to Procedures to Issue Orders; Deliberate Misconduct by Unlicensed Persons, 56 Fed. Reg. 40,664, 40,678 (Aug. 15, 1991) (discussing the applicability of Section 2.202 to confirmatory orders).

3requirement for notice under 10 C.F.R. § 2.202 (i.e., Section 2.202(a)(3)) applies to confirmatory orders.

4 For all these reasons, it is clear that 10 C.F.R. § 2.202(a)(3) applies to the October 28, 2013 Confirmatory Order issu ed in this proceeding.

2. If section 2.202(a)(3) applies, did the Confirmatory Order adequately inform "any other person affected by the order" of the right to "demand" a hearing pursuant to section 2.202(a)(3)? Yes. Publication in the Federal Register is by law adequate notice to any person other than the specific party to whom the order is issued (who must receive actual service). "Publication in the Federal Register is legally sufficient notice to all interested or affected persons regardless of actual knowledge or hardship resulting from ignorance, except those who are legally entitled to personal notice."

5 Thus, by publishing the Confirmatory Order in the Federal Register on November 7, 2013, the NRC adequately informed "any person adversely affected by this Confirmatory Order" of their right to demand a hearing. Section 2.202(a) requires actual service of an order only upon the licensee or other person subject to the order. Here, Ex elon, as the licensee char ged with a violation, was legally entitled to personal notice. Local Union No. 15, International Br otherhood of Electrical Workers, AFL-CIO ("Local 15" or "the Local") was not, because it was not charged with any violation.

Accordingly, publication in the Federal Register was adequate notice to Local 15.

4 See FirstEnergy Nuclear Operating Co. (Davis-Besse Nuclear Power Station, Unit 1), CLI-04-23, 60 NRC 154, 157 (2004) ("Pursuant to 10 C.F.R. § 2.202, the Commission invited any person adversely affected by the Confirmatory Order to request a hearing within 20 days.").

5 Dominion Nuclear Conn., Inc. (Millstone Nuclear Power Station, Units 2 & 3), CLI-05-24, 62 NRC 551, 565 n.60 (2005) (quoting Cal. v. FERC

, 329 F.3d 700, 707 (9th Cir. 2003)).

4 Regardless, there is no dispute here that Local 15 received actual notice. The Local does not allege any deficiency of notice. Local 15 explained th at it obtained a copy of the Confirmatory Order and, based on it, filed a Petition to Intervene.

6 No party objects to the timeliness of the Local's Petition.

7 Therefore, any question that may exist regarding the adequacy of notice in this case is moot. As to any question about the significance of the phrase "right . . . to demand a hearing"-as applied to third parties who may seek to challenge NRC enforcement actions-as further explained in response to the following questions, the Commission has repeatedly held that this right remains subject to the requirements for standing and contention admissibility.

8 3. If section 2.202(a)(3) applies, must a "licensee or any other person adversely affected" also demonstrate standing under 10 C.F.R. § 2.309(d)? Yes. 10 C.F.R. § 2.300 makes clear that the provisions of Subpart C (which includes Section 2.309) "apply to all adjudications conducted under the authority of the Atomic Energy Act of 1954, as amended [AEA

], the Energy Reorganization Act of 1974

[ERA], and 10 C.F.R. Part 2, unless specifi cally stated otherwis e in this subpart" (emphasis added). Although both regulations ap ply, the showing of adverse effect under Section 2.202(a)(3) is ef fectively equivalent to one element of the standing requirement under 10 C.F.R. § 2.309(d): demonstration of in jury-in-fact. The pl ain text of Section

6 See Petition to Intervene and Request for Hearing (Dec. 12, 2013) ("Petition").

7 See Exelon's Answer Opposing the Petition to Intervene and Hearing Request Filed by Local Union No. 15, International Brotherhood of Electrical Workers, AFL-CIO (Jan. 24, 2014) ("Exelon's Answer"); NRC Staff Answer to Petition to Intervene and Request for Hearing (Jan. 24, 2014) ("NRC Staff Answer").

8 See , e.g., Davis-Besse, CLI-04-23, 60 NRC at 157 ("Pursuant to 10 C.F.R. § 2.202, the Commission invited any person adversely affected by the Confirmatory Order to request a hearing within 20 days.") (emphasis added);

id. ("To obtain a hearing, a petitioner must demonstrate standing and proffer at least one admissible contention").

52.309(d)(2) establishes this principle: "[i]n ruling on a request for hearing or petition for leave to intervene, . . . the [Board] designated to rule on such requests must determine, among other things, whether the petitioner has an interest affected by the proceeding . . ." (emphasis added). In other words, although the requirements are independent, the

showing of adverse effect required by S ection 2.202(a)(3) is one part-but only one part-of the multi-part requirement to demonstrate standing.

9 The Commission noted this similarit y, in the context of challenges to confirmatory orders by third-party intervenor s: "[t]o obtain a hearing, a petitioner must demonstrate 'an interest affected by the proceeding'- i.e., standing . . . ."

10 In upholding the Licensing Board's denial of another hearing request on a confirmatory order, the Commission again clearly held, "[t]o obtain a hearing, a petitioner must demonstrate standing and proffer at least one admissible contention."

11 Based on this requirement, the Commission found that the petitioners failed to establish injury-i n-fact, one of the elements of the standing analysis.

12 Consistent with the NRC's longstanding, standard practice, 13 this principle is clearly specified in the Confirmatory Order in this proceeding, which states that "[i]f a

9 The additional aspects of the standing analysis, such as the zone of interest test, causation, and redressability, go beyond the basic showing of an affected interest, and must be satisfied independently. See generally Exelon's Answer at 7-24.

10 Alaska Dep't of Transp., CLI-04-26, 60 NRC 399, 405 (2004) ("Alaska DOT") (citation omitted);

see also Sequoyah Fuels Corp. and Gen. Atomics (Gore, Okla. Site), CLI-94-12, 40 NRC 64, 71 (1994) (stating, in the context of an enforcement proceeding, "In order for NACE to be admitted as a party in this enforcement proceeding it must first demonstrate that it has an interest that may be affected by the proceeding; i.e., it has standing to participate.").

11 Davis-Besse, CLI-04-23, 60 NRC at 157.

12 See id. at 158.

13 See, e.g., Consumers Power Co. (Palisades Nuclear Power Facility); Order Confirming Licensee Actions to Upgrade Facility Performance, 46 Fed. Reg. 17,688, 17,690 (Mar. 19, 1981) ("If a hearing is requested by a person other than the licensee, that person shall describe in accordance with 10 CFR 2.714(a)(2) the nature of the person's interest and the manner in which that person's interest is 6 person other than the licensee requests a he aring, that person shall set forth with particularity the manner in which his interest is adversely affected by this Confirmatory Order and shall address the criteria set fo rth in 10 CFR 2.309(d) and (f)."

14 Thus, under 10 C.F.R. § 2.202(a)(3), to challenge a confirmatory order, a petitioner such as the Local must show that it is adversely a ffected by the order. It also must demonstrate that it has standing under section 2.309(d). The harm, whether characterized as injury-in-fact or adverse effect, must be within the NRC's zone of interest to support standing, a nd the petitioner must further demonstrate causation and redressability.

4. If section 2.202(a)(3) applies, must a "licensee or any other person adversely affected" also satisfy the requirements of 10 C.F.R. § 2.309(f)(1)? Yes. The requirement of filing an admissible contention under 10 C.F.R.

§ 2.309(f)(1) is a clear prerequisite to obtaini ng a hearing challenging an order, including proceedings on confirmatory orders. Section 2.202(a)(4) establishes this requirement, without exclusion of confirmatory orders. It states that any pers on requesting a hearing on a Commission order must "[s]pecify the issu es for hearing." And, as noted above, the requirements in Subpart C, including 2.309, apply to "all adjudications" under the AEA, ERA, and 10 C.F.R. Part 2.

15 An admissible contention is a requiremen t for any petitioner to obtain a hearing challenging a confirmatory order-just as in other NRC proceedings.

16 The admissible

adversely affected"). Section 2.714 was the predecessor of Section 2.309.

See Final Rule, Changes to the Adjudicatory Process, 69 Fed. Reg. 2182, 2218, 2220 (Jan 14, 2004).

14 Notice, 78 Fed. Reg. at 66,967 (emphasis added).

15 10 C.F.R. § 2.300.

16 10 C.F.R. § 2.309(a) ("For all other proceedings [other than Section 52.103 proceedings-which this is not], except as provided in paragraph (e) of this section, . . . the [Board] designated to rule on the 7contention requirement is essential to "foc us[ing] litigation on concrete issues and result[s] in a clearer more focused record for decision."

17 This requirement is intended "to support an early NRC determination whether there are issues that are appropriate for and susceptible to NRC resolution with resp ect to an NRC regulatory/licensing action."

18 The Commission has repeatedly and unamb iguously instructed Boards that a petitioner must propose an admissible cont ention to obtain a hearing-including on a confirmatory order. For example, in the 2004 Davis-Besse confirmatory order proceeding, the Commission held: "[t]o obtain a hearing, a petitioner must demonstrate standing and proffer at least one admissible contention

."19 In addition to the petitioners' lack of standing there, the Commission deni ed the hearing request for the independent and additional reason that they failed to proffer an admissible contention.

20 As with standing, the requirement to proffer an admissible contention is clearly specified in the Confirmatory Order in this proceeding.

21 In sum, under 10 C.F.R. §§ 2.202(a)(4) and 2.309(f)(1), to obtain a hearing in this proceeding, Local 15 must proffer at least one admissible contention.

request for hearing and/or petition for leave to intervene, will grant the request/petition if it determines that the requestor/petitioner has standing under the provisions of paragraph (d) of this section and has proposed at least one admissible contention the meets the requirements of paragraph (f) of this section.") (emphasis added). Exelon and the NRC Staff have demonstrated that the Local cannot be granted a hearing under paragraph (e) of Section 2.309.

See Exelon's Answer at 24-27; NRC Staff Answer at 10.

17 Final Rule, Changes to the Adjudicatory Process, 69 Fed. Reg. at 2202.

18 Id. 19 Davis-Besse, CLI-04-23, 60 NRC at 157 (emphasis added).

20 See id.; see also , e.g., Alaska DOT, CLI-04-26, 60 NRC at 405 ("To obtain a hearing, a petitioner must demonstrate "an interest affected by the proceeding"

- i.e., standing - and submit at least one admissible contention.") (emphasis added) (citations omitted).

21 Notice, 78 Fed. Reg. at 66,967 ("If a person other than the licensee requests a hearing, that person shall set forth with particularity the manner in which his interest is adversely affected by this Confirmatory Order and shall address the criteria set forth in 10 CFR 2.309(d) and (f).") (emphasis added).

8 5. Both Petitioner and Exelon extensively discuss decisions in the Consumers Power Co. (Palisades Nuclear Power Fa cility) case from 1981 and 1982. Of what significance, if any, are the subsequent 1991 regulatory amendments, which established for the first time the duty of the NRC to inform "any other person adversely affected by the order of his or her right . . . to demand a hearing" under 10 C.F.R. § 2.202(a)(3)? The 1991 regulatory amendments noted by the Board do not bear on the applicability of the Palisades cases.22 The 1991 amendments accomplished three main purposes: (1) to revise procedures for issui ng orders to unlicensed individuals who are otherwise subject to the Commission's jurisdiction; (2) to identify the types of orders to which hearing rights attach; a nd (3) to put licensed and unlic ensed persons on notice that they may be subject to enforcement for certain types of deliberate misconduct.

23 As discussed above in response to question 3, the NRC's practice of publishing confirmatory orders in the Federal Register

-for the purpose of providing an opportunity for persons who were adversely affected to request a hearing-predates the 1991 rulemaking. The rulemaking does not in any way alter the requirement to show adverse effect within the zone of interest for NRC proceedings and otherwise meet the generally applicable requirements for standing and to proffer an admissible contention. For example, both before and after this rulemaking, hearing re quests on such matters have been properly evaluated by presiding officers by first determining whether a peti tioner has shown an adverse effect and demonstrated standing.

24 The rulemaking codified the Commis sion's longstanding practices. The 1991 statements of consideration show that the N RC did not intend to substantively change its

22 Consumers Power Co. (Palisades Nuclear Power Facility), LBP-81-26, 14 NRC 247 (1981), rev'd , ALAB-670, 15 NRC 493 (1982), vacated as moot, CLI-82-18, 16 NRC 50 (1982).

23 Final Rule, Revisions to Procedures to Issue Orders; Deliberate Misconduct by Unlicensed Persons, 56 Fed. Reg. at 40,664.

24 See , e.g., Palisades, LBP-81-26, 14 NRC at 249; Davis-Besse, CLI-04-23, 60 NRC at 157.

9hearing standards or modify the scope of a petitioner's opportunity to request a hearing on an enforcement order, or the NRC's notice publication practices.

The revised Section 2.202(a)(3) was intended to afford an unli censed person who was the subject of NRC enforcement "the same type of adjudi cation process" provided for licensees.

25 With respect to third-party petitioners seeking a hearing on an order, the Commission specifically stated that under both the existing and revised

"§ 2.202(a)(3), a licensee or any other person adversely affected by an order has the right to demand a hearing."

26 In other words, the right of "any other person adversely affected by an order" to "demand a hearing" existed at the time of the Palisades decisions. The Commission specifically explained that this provision applies equally to confirmatory orders and other types of orders, stating that "[w]hether or not a licensee or other person consents to an order, other persons adversely affected by an order issued under § 2.202 . . . will be offered an

opportunity for a hearing consistent with current practice . . . ."27 Thus, the 1991 rulemaking does not alter the applicability of th e standing analysis in the Licensing Board's decision in Palisades (LBP-81-26).

28 6. The participants appear to disagree as to whether the Confirmatory Order imposes new obligations on individual employees beyond those already imposed by NRC regulations or otherwise. Is this a fact issue that warrants or requires the Board's consider ation of evidence? No. There is no disagreement as to whether the Confirmatory Order imposes new obligations. Local 15 now admits that the N RC's regulations apply to off duty, off site

25 Final Rule, Revisions to Procedures to Issue Orders; Deliberate Misconduct by Unlicensed Persons, 56 Fed. Reg. at 40,671.

26 Id. at 40,673.

27 Id. at 40,678 (emphasis added).

28 The opportunity for discretionary intervention absent an established proceeding was eliminated in a separate rulemaking in 2004.

See Final Rule, Changes to the Adjudicatory Process, 69 Fed. Reg. at 2201.

10 conduct, including the conduct engaged in by the SROs which the Equipment Operator failed to report to Exelon.

29 Moreover, the question of the scope of the NRC's access authorization regulations is an uncomplicat ed and pure question of law that should be resolved by the Board now, at the contention admissibility stage. As the Commission recently did in the Limerick license renewal proceeding, the Board should carefully consider and resolve this threshold legal issue before granting a hearing.

30 The scope of the underlying rule that was the subject of the vi olation is critical to the evaluation of the Local's hearing request at th is stage of the proceeding. Specifically, the scope of the access authorization rule bears directly on the Local's standing and the admissibility of its proposed contentions.

31 These matters must be resolved now, because the Commission should not expend

its hearing resources un less a petitioner has demonstrated standing and proffered an admissible contention-i.e., a contention that, among other things, does not challenge an NRC rule.32 The contention admissibility rules, in particular, ar e "strict by design,"

33 and 29 Reply at 12 ("Local 15 is not alleging that the NRC regulations do not reach and allow consideration of certain off-duty conduct . . .") (emphasis in original).

30 See Exelon Generation Co., LLC (Limerick Generating Station, Units 1 & 2), CLI-12-19, 76 NRC 377, 385-86 (2012).

31 See Exelon's Answer at 8-24, 30-32; NRC Staff Answer at 8-9, 13-14, 17. More generally, all three of the Local's contentions raise purely legal issues, specifically: (1) whether NRC Staff has exceeded the scope of its discretion in that the Confirmatory Order imposes requirements beyond the scope of NRC's regulations; (2) whether the Confirmatory Order is vague, overbroad, not carefully tailored, and fails to "cabin" Exelon's future discretion; and (3) whether the Confirmatory Order endorses alleged violations of the National Labor Relations Act. See Exelon's Answer at 29-39.

32 See Alaska DOT, CLI-04-26, 60 NRC at 405 (requiring petitioner to "demonstrate" standing at the admissibility stage); 10 C.F.R. § 2.335(a) (prohibiting contentions challenging NRC regulations); Final Rule, Changes to the Adjudicatory Process, 69 Fed. Reg. at 2202 (explaining that the contention admissibility requirement is intended "to support an early NRC determination whether there are issues that are appropriate for and susceptible to NRC resolution with respect to an NRC regulatory/licensing action.").

33 Dominion Nuclear Conn., Inc. (Millstone Nuclear Power Station, Units 2 & 3), CLI-01-24, 54 NRC 349, 358 (2001), petition for recons. denied, CLI-02-1, 55 NRC 1 (2002).

11 require careful consideration of petitioner's legal and factual claims before a hearing is granted.34 And "the initial burden of showing whether the contention meets our admissibility standards" lies with the petitioner.

35 These threshold determinations must be made before a hearing is granted and furt her resources are expended by the Board, the NRC Staff, and the other parties.

36 Thus, contrary to the Local's suggestion, the Board certainly must not accept all the legal allegations in a petitioner's contention to be true.

37 Exelon and the NRC Staff have demonstrat ed that the regulations in 10 C.F.R.

§ 73.56 are properly understood to require pers ons subject to the behavioral observation program ("BOP") to report any behavior refl ecting on the trustworth iness and reliability of personnel with unescorted access-whether the behavior occurs on-site or off, or relates to conduct on-site, or off.

38 Exelon and the NRC Staff demonstrate this conclusively through the text of the regulations, the statemen ts of consideration, and the

34 See , e.g., Limerick, CLI-12-19, 76 NRC at 385-86 (finding legal error and reversing the Board's admission of a contention following the Commission's own "careful analysis of the regulatory history" of the relevant rules).

35 Progress Energy Carolinas, Inc. (Shearon Harris, Units 2 & 3), CLI-09-8, 69 NRC 317, 325 (2009).

36 See Final Rule, Changes to the Adjudicatory Process, 69 Fed. Reg. at 2202. In Reply, the Local argues that that these matters are "jurisdictional facts," the resolution of which should be deferred until the time of trial.

See Reply of Local Union No. 15, International Brotherhood of Electrical Workers, AFL-CIO to NRC Staff and Exelon Answers Opposing Local 15's Petition to Intervene and Request for Hearing at 2-3 (Feb. 14, 2014) ("Reply") (citing Valentin v. Hosp. Bella Vista, 254 F.3d 358, 364 n.3, 365 (1st Cir. 2001)). The authorities the Local relies upon, however, are inapposite to the NRC's Rules of Practice, which require the resolution of standing and contention admissibility before further resources are expended by the parties. Moreover, even in federal court practice, the case the Local relies upon explains that the deferral of the resolution of "jurisdictional facts" until the trial stage is an optional exception to standard civil procedure practices. See Valentin, 254 F.3d at 364 n.3. 37 See Reply at 2 (citing cases).

38 See Exelon's Answer at 10-16; see also NRC Staff Answer at 8 ("The reporting of off-site, off-duty conduct has always been within NRC's regulatory purview so long as the observed conduct has a nexus to public health and safety or the common defense and security.").

12relevant adjudicatory and enforcement precedent.

39 The answer to this threshold question requires no evaluation of the particular facts of this case. In contrast, the Local cites no authority for its self-serving po sition that the scope of the rule is somehow more limited. In its initial Petition, the Local simply states the conclusion.

40 In reply, it claims that Exelon "admitted" that the changes it made to the BOP after the investigation of the armed robbery "imposed on bargaining unit employees new reporting obligations that had never before been the subject of Exelon policy."

41 The Local has mischaracterized Exelon's statements. 42 But, even if true, Exelon's prior alleged opinions are irrelevant to the question of what the re gulations require. As Exelon and the Staff have shown, nothing in the Confirmatory Order expands the scope of reportable behavior.

43 Ultimately, the Local's unsupported argument that the Commission could not have intended the broad applic ability that the plain language connotes ignores the reality that nuclear employment is different. The privilege of using nuclear technology for commercial purposes carries with it the res ponsibility for all empl oyees to protect the

39 See Exelon's Answer at 10-16; see also NRC Staff Answer at 8-9.

40 See , e.g., Petition at 16.

41 Reply at 14.

42 See Letter from T. Domeyer, Exelon, to M. Teitelbaum, Schuchat, Cook, and Werner, Local 15's Request for Information (Dec. 20, 2013), Attachment 1 to this Memorandum ("At no time did I say or confirm, as you write in your letter, that the Company had unilaterally implemented, 'for the first time, a requirement that employees report their off duty offsite observations of other employees' off duty offsite activity . . .'"); Letter from T. Domeyer, Exelon, to M. Teitelbaum, Schuchat, Cook, and Werner, Local 15's Request for Information (Feb. 4, 2014), a redacted version of which is Attachment 2 to this Memorandum ("Even before the Confirmatory Order, the BOP applied to off-site and off duty conduct, and I did not say at the November 21 meeting that the BOP previously did not apply to such conduct.").

43 In addition, Exelon revoked access and terminated the Equipment Operator who failed to report the plot, see Confirmatory Order, encl. at 2, because of violations of the then-extant BOP based on failure to report off-site and off-duty conduct. The Local did not pursue any challenge to that decision.

See Exelon's Answer at 5.

13 safety and security of the public. The Commission deliberately imposed requirements for the trustworthiness and reliability of workers at civilian nuclear pow er plants, and those requirements apply whether or not the em ployees happen to belong to a union. The NRC Staff's identical conclusion should be given deference by the Board.

44 The safety and security of civilian nuclear power, including requirements for plant access and behavioral observation of all workers with unescorted access, is a subject committed to its special expertise. Thus, when the N RC Staff states that "off-site, off-duty conduct has always been within NRC's regulatory pur view so long as the observed conduct has a nexus to public health and safety or the common defense and security,"

45 the Board should defer to the Staff's reasonable interpre tation of the regulations it administers. The question of whether particular off-s ite or off-duty conduct other than that involved in the underlying investigation woul d be reportable under the regulations and Exelon's BOP is irrelevant to the evaluation of the Local's Petition, both with respect to standing and contention admissibility.

46 The Local concedes that the conduct underlying the Confirmatory Order issued in this proceeding is within the scope of the access authorization rule, because, as the Local admits, the robbery plot at issue here would "naturally" raise questions "conc erning the trustworthiness of the individuals involved . . . ."47 Despite the Local's effort to generate one, there are no material facts in dispute

44 See New England Power Co. (NEP Units 1 &2), ALAB-390, 5 NRC 733, 746 n.26 (1977) (according greater weight to the Staff's interpretation of a regulation).

45 NRC Staff Answer at 8.

46 See Sequoyah Fuels Corp., CLI-94-12, 40 NRC at 72 (stating that a showing of standing cannot be based on an "conjectural" or hypothetical" injury) (quoting O'Shea v. Littleton, 414 U.S. 488, 494 (1974)) ; Crow Butte Res., Inc. (North Trend Expansion Area), CLI-09-12, 69 NRC 535, 570 (2009) (reversing the admission of a contention that was based on "postulated" and "hypothetical" concerns); U.S. Dep't of Energy (High-Level Waste Repository), CLI-08-21, 68 NRC 351, 353 (2008) (reaffirming the Commission's policy disfavoring advisory opinions).

47 Petition at 17 n.11.

14regarding whether there was a violation of the NRC's access authorization rules, and there is no fact-finding that could resolve any issue presented by the Local. The crucial dispute between the parties is a threshol d legal dispute between the NRC Staff and Exelon, on the one hand, and the Local, on the other, over the simple question of whether the NRC's access authorization rules for behavioral observation reach off-site and off-duty conduct. Local 15 has already admitted that it does. Moreover, this simple and purely legal question is dispositive of the Local's standing and the admissibility of its contentions. The Board should resolve this legal dispute now, and reject the Petition.

7. What is the status of the unfair labor practice charge that Petitioner filed with Region 13 of the National Labor Relations Board on December 4, 2013? Local 15's charge has not been finally re solved. Contrary to the suggestion in Local 15's Reply, Region 13 of the National Labor Relations Board ("NLRB") has not concluded that the "Company's refusal to bargain concerning the implementation of sweeping changes to its BOP amounts to a vi olation of the National Labor Relations Act

[NLRA] . . . ." 48 Rather, Region 13 has made only the narrow determination that there is reason to believe Exelon may have violated an obligation to bargain with Local 15 regarding the effects of its decision to implement changes to the BOP pursuant to the Confirmatory Order (e.g., methods of training), and issued a Complaint solely on that basis.49 Region 13 did not issue a Complaint ba sed on Local 15's contention that Exelon was obligated to, or somehow violated the NLRA or its collective bargaining agreement when it refused to, bargain with Local 15 regarding its decision to enter the Settlement

48 See Reply at 6; see also Reply at 14 n.25.

49 See Exelon Generation Company, LLC and International Brotherhood of Electrical Workers, Local 15, Case 13-CA-118294 (Region 13 NLRB) § VI(a) (Feb. 14, 2014), Attachment 3 to this Memorandum.

15Agreement with the NRC, to agree to the Confirmatory Order, and to make the changes to the BOP or take the other actions required by the Confirmatory Order.

50 In other words, NLRB Region 13 did not find that Ex elon had any obligation to bargain over the decision to enter into the Confirmatory Order, or to bargain over changes to the BOP that are required by the public health and safety. Absent settlement, the NLRB will proceed to a hearing before an administrative law j udge regarding alleged failure to engage in bargaining over the effects of the Confirma tory Order. That hearing is currently scheduled for April 9 and 10, 2014, but may be moved. Exelon will decide by the hearing date whether to settle or contest the Complaint. Although the NLRB's determinations to da te appear to confirm that neither Exelon nor the NRC had any obligation even to consult with petitioners regarding alternative dispute resolution or the Confirmatory Order, the status of the Local's unfair labor practice charge is not direct ly relevant to any issue before this Board. The status of the charge has no impact on any prong of the standing analysis, whether discretionary intervention is available to the Local, or whether its contentions impermissibly attack NRC rules, raise issues beyond the scope of the NRC's regulatory purview, or are otherwise admissible.

50 Compare NLRB, Charge Against Employer (Dec. 4, 2013), Attachment 4 to this Memorandum (alleging various NLRA violations, including Exelon's failure to bargain over entering into a "settlement agreement" with the NRC) with Attachment 3 § VI(a) (identifying only one alleged violation of the NLRA, that Exelon declined to bargain with Local 15 over the "

effects of its decision to implement changes in the terms and conditions of employment that were implemented pursuant to" the Confirmatory Order) (emphasis added).

16 8. What is the status of Exelon's implementation of the Confirmatory Order, including dates by which the various required actions were, or will be, performed? Prior to entering the Confirmatory Order, Exelon had already taken a number of actions, as identified in Section III.A of the Confirmatory Order. Sections V.A, B, and C of the Confirmatory Order re quired Exelon to take actions in the future (after the effective date of the Confirmatory Order). Exelon has completed the requirements identified in Sections V.A(A.1) and B of the Confirmatory Order. Specifically:

• Exelon implemented revisions to the BOP to "provide additional guidance on the types of offsite activities, if observed, or credible information that should be reported to reviewing officials" and to ensure that the requirement to pass information forward without delay is clearly communicated.

51 The revised BOP was implemented at the Exelon nuclear pl ants on or before January 24, 2014.

• On December 4, 2013, Exelon presented the facts and lessons learned from the events that gave rise to the Confirmatory Order to representatives of the Nuclear Energy Institute and the Institute of Nuclear Power Operations. The materials were made available to the NRC Resident Inspector at Dresden. In addition, on January 30, 2014, Exelon submitted a formal operating experience summary to the Institute of Nuclear Power Operations. Exelon is currently in th e process of satisfying the requirements identified in Section V.A(A.2) of the Confirmatory Order. Training materials have been prepared and issued, and Exelon expects to complete all training by April 15, 2014. The remaining two requirements of the Confirmatory Order: an initial notification to the NRC on the status of compliance with the Confirmatory Order (V.C) and an effectiveness assessment (V.A(A.3)) - will not be completed until October 2014 and early to mid-2015, respectively.

51 See Reply, Exhibit 3, Exelon Nuclear, "Behavior Observation Program," Policy No. SY-AA-103-513, Rev. 10 (2014).

17 9. If the Board were to order a hearing, would such a hearing more appropriately be conducted under the formal procedures set forth in 10 C.F.R. Part 2 Subpart

G or under the simplified procedures set forth in Subpart L? For the reasons described above, no hearing is appropriate in this proceeding. If the Board were to hold a hearing in this case, where no relevant factual inquiry is necessary, then it would be more appr opriately conducted under the simplified procedures in 10 C.F.R. Part 2, Subpart L. If all of the parties agree, then a hearing in this proceeding may be held under Subpart L or Subpart N (Expedited Proceedings with Oral Hearings).

52 Exelon respectfully suggests that if a hearing is held in this proceeding, then it would more appropriately be conducted under Subpart L because there are no disputes regarding the occurrence of a past activity in this proceeding, and no issues of credibility, motive, or intent of an eyewitness or any party that would suggest the need for more formal hearing procedures.

Under 10 C.F.R. § 2.310(d), hearings in most NRC proceedings are held under the informal procedures in Subpart L.

53 Unlike many other enforcement proceedings, none of the circumstances necessitating Subpart G pr ocedures are present here. As shown in response to question 6, the Local's contentions raise solely legal issues. The Local presents no relevant basis for any dispute regarding the occurrence of any past activity.

52 See 10 C.F.R. § 2.310(b).

53 The exceptions to this preference apply where the presiding officer finds that resolution of the contention or contested matter either necessitates resolution of either: (a) issues of material fact relating to the occurrence of a past activity, where the credibility of an eyewitness may reasonably be expected to be at issue; or (b) issues of motive or intent of the party or eyewitness material to the resolution of the contested matter. See Entergy Nuclear Vt. Yankee, L.L.C. (Vt. Yankee Nuclear Power Station), LBP-04-31, 60 NRC 686, 694 (2004) (concluding that "10 C.F.R. § 2.310(d) provides only two criteria entitling a petitioner to a Subpart G process"); see also AmerGen Energy Co., LLC (Oyster Creek Nuclear Generating Station), Licensing Board Memorandum and Order, Docket No. 50-0219 (Denying NIRS's Motion to Apply Subpart G Procedures) at 2-3 (June 5, 2006) (unpublished), aff'd CLI-09-07, 69 NRC 235, 242-43, 278-79 (2009). Notably, this rule focuses on eyewitnesses, not expert witnesses. Disputes over expert witness credibility would not lead to the application of Subpart G procedures. See Oyster Creek, CLI-09-07, 69 NRC at 279.

18 Thus, if the Board were to grant a hearing on one or more of the Local's contentions, then the hearing would be mo st appropriately and efficiently conducted under Subpart L.

III. CONCLUSION For the reasons set forth in Exelon's and the NRC Staff's Answers to the Local's Petition, and as further explained in this Memorandum, the Board should deny the Local's Petition in its entirety.

Respectfully submitted, Signed (electronically) by Raphael P. Kuyler Timothy P. Matthews Raphael P. Kuyler

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, NW

Washington, DC 20004

Phone: (202) 739-5527

Fax: (202) 739-3001 E-mail: tmatthews@morganlewis.com E-mail: rkuyler@morganlewis.com Tamra S. Domeyer Associate General Counsel

Exelon Generation Company, LLC 4300 Winfield Road, 5th Floor

Warrenville, IL 60555

Phone: (630) 657-3753

Fax: (630) 657-4323 E-mail: tamra.domeyer@exeloncorp.com

Counsel for Exelon Generation Company, LLC Dated in Washington, DC this 28th day of February 2014

Attachment 1

Attachment 2

Attachment 3

Attachment 4

DB1/ 77897255 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD

)

In the Matter of: ) Docket Nos. 50-237-EA

) 50-249-EA

EXELON GENERATION COMPANY, LLC )

)

(Dresden Nuclear Power Station, Units 2 and 3) )

) February 28, 2014

) CERTIFICATE OF SERVICE Pursuant to 10 C.F.R. § 2.305 (as revised), I certify that on this date, copies of "Exelon's Memorandum Responding to the Ques tions in the Board's February 5, 2014 Order" and its attachments were served upon the Electronic Information Exchange (the NRC's E-Filing System), in the above-captioned proceeding.

Signed (electronically) by Raphael P. Kuyler Raphael P. Kuyler Morgan, Lewis & Bockius LLP

1111 Pennsylvania Ave. NW

Washington, DC 20004

Phone: (202) 739-5146

Fax: (202) 739-3001 E-mail: rkuyler@morganlewis.com