ML20206M867

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Reply of Commonwealth of Ma Atty General Jm Shannon to Filings of Staff & Joint Applicants in Response to 881102 Motions Under 10CFR2.734 to Reopen Record.* Commission Should Reject NRC & Applicant Arguments
ML20206M867
Person / Time
Site: Seabrook  NextEra Energy icon.png
Issue date: 11/25/1988
From: Jonas S
MASSACHUSETTS, COMMONWEALTH OF
To:
NRC COMMISSION (OCM)
Shared Package
ML20206M842 List:
References
OL-1, NUDOCS 8812020042
Download: ML20206M867 (17)


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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION

)

In the Matter of )

) Docket Nos. 50-441-OT-1 PUBLIC SERVICE COMPANY OF ) 40 ' .-l ,

NEW HAMPSHIRE, ET AL. ) (0.i. ..te EP) i

) November 25, 1988 *

(Seabrook St.ation, Unit 1) )

and 2) )

)

)

i REPLY OF MASSACHUSETTS ATTORNEY GENERAL

' JAMES M. SHANNON TO THE FILINGS OF THE STAFF i AND THE JOINT APPLICANTS IN RESPONSE TO HIS NOVEMBER 2, 1988 MOTIONS UNDER 10 C.F.R. $ 2.734 TO REOPEN THE RECOFD

. 1HIRODUCTION On November 2, 1988, pursuant to tu C.F.R. $ 2.734 and the Commission's order of Septembor 22. 1988, Massachusetts Attorney General James M. Shannon filed with the Nuclear Regulatory Commission ("Commission") two motions to reopen the record in the above referenced proceeding:

1. MOTION OF MASSACHUSETTS ATTORNEY GENERAL JAMES M. SHANNON UNDER 10 C.F.R. S 2.734 TO REOPEN THE RPCORD TO CONSIDER EVIDENCE CONCERNING THE JOINT APPLICANTS' 3ECOMMISSIONING PLAN FOR THE SEABROOK NUCLEAR POWER STATION AND TO ADMIT THE ATTACHED LATE FILED CONTENTIONS CONCERNING SAID DECOMMISSIONING PLAN (hereinafter referret', to as "Massa _G  ;

Decommission Motion"); and O

2. MOTION OF MASSACHUSETTS ATTORNEY GENERAL JAMES M. SHANNON TO REOPEN THE RECORD TO CONSIDER EVIDENCE CONCERNING THE JOING APPLICANTS' FINANCIAL QUALIFICATIONS TO OPERATE THE SEABROOK NUCLEAR POWER STATION AND TO ADMIT THE ATTACHED LATE-FILED CONTENTIONS CONCERNING SAID FINANCIAL QUALIFICATIONS (hereinafter referred to as "MassAG Einancial Qualification Motion") (collectively "Atto. Inex General's Motions").d The responses to these motions from the Applicants and the Staff seriously misapply the law governing decommissioning and (

motions to reopen closed records and mischaracterize the i factual record before the Commission. Therefore, the Massachusetts Attorney General files this response in an effort to provide the Commission with a correct statement of the law and an accurate description of a record that can only be viewed ,

as presenting numerous material facts in dispute.

THE APPLICANTS' AND STAFF'S RESPCNSES On November 14, 1988, the Applicants filed with the Commission the APPLICANTS' RESPONJE TO MOTIONS TO REOPEN THE  ;

i RECORD TO CONSIDER FINANCIAL QUALIFICATION ISSUES PRIOR TO PERMITTING LOW POWER OPERATION (hereinsfter referred to ar Applicants' Respontal in which they argue that the Attorney General's Molinna should be denf.ed.

The Applicants argue principally that:

1 1/ Although this latter motion was not described in CLI-88-07, the Massachusetts Attorney General filed it with his other motion, because the Commission had not addressed any of the-issues raised in the Massachusetts Attorney General's financial qualifications petition and "in an effort to place all of the financial issues fully before the Commission so that the >

consideration of such issues (would) proceed expeditiously and in an organized manner." MassAG Financial Oualification Motion F

at 4.

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1. The Attorney General's Motions do not meet the requirement of 10 C.F.R. S 2.734(a)(2) that a motion to reopen "must address a significant safety or environmental issue" because this requirement can only be satisfied where the issue addressed is "real" and involves a "clear and oresent dancer to the public." App.licants' Response at 6-8 (emphasis added).
2. The Attorney General's Motions do not meet the requirement of 10 C.F.R. S 2.734(a)(3) that a motion to reopen "demonstrate that a materially different result would be or would have been likely had the newly proferred evidence been considered initially" because "[wle are unadvised of any reason why an outcome adverse to the Applicants is likely." Aeolicants' Resoonse at 10.2 On November 16, 1988, the Staff filed with the Commission the NRC STAFF RESPONSE TO INTERVENORS' MOTIONS TO REOPEN RECORD AND ADMIT LATE-FILED DECOMMISSIONING COMTENTIONS (hereinafter referred to as "S_tALf._Refoonse"). The Staff Bispania 1

2/ Also, on November 14, 1988, the Applicants filed with the Commission a document entitled "APPLICANTS' ADVICE TO THE COMMISSION," attached to which were two documents relating to their financial qualif.ications to operate the Seabrook plant at low power and to decommission after low power in the event that a full power license is not granted: a copy of a November 10, 1988 letter (NHY-88148) from Edward A. Brown, CEO of the New i Hampshire Yankee Division of Public Service Company of New Hampshire to Victor Nerses, USNRC Project Manager for Seabrook (hereinafter referred to as November 10. 1988 E.A. Brown ke.Ltel) and a document dated November 14, 1988 entitled

! "APPLICANTS' STATEMENT AS TO STATUd 0F RECORD AS TO PSNH l BANKRijpTCY."

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4 references aad by its own terms is responsive to four motions to reopen the record: it responds to the MassAG Decommissionina Motion, but does not either acknowledge or address the MassAG Financial Oualification Motion. ELLL{

i Response at 1 n. 1. The Staff argues that given the  ;

requirement of 10 C.F.R. S 2.734(a)(2) that motions to reopen address a significant safety or environmental' issue, the MassAG Decommissionino Motion should be denied for the following reasons: ,

1. "Section 50.33(k)(1) is inapplicable to Applicants in any case because by its terms it applies to applicants for an operating license ( ]' Applicants, however, already  ;

. possess an operating license to load fuel." Staff Response at 31. I

2. With respect to each of the bases for the Mass AG's contention the Staff asserts that what the Applicants have l submitted is good enough because the Commission intended that only the most summary of inquiries be undertaken here.

l THE COMMISSION'S_ ORDER IN CLI.88-07 The Staff has misread CLI-88-07 to say that the decommissioning plan is not subject to and need not meet any  !

i l

! existing regulations. Staff Responig at 10-14. Instead, l according to the Staff, the Commission intended only a "summary review" where "it is sufficient . . . that the Applicants' plan contain enough information to assess whether: (1) the means 1 4

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proposed to decommission the facility after low power appear to be' reasonable; (2) the amount of estimated funding needed to implement the plan is reasonable; and (3) there is reasonable assurance that Applicants can obtain the funding required to implement the plan if the need to do so arises." Id at 14.

The Staff concludes, based on their affidavit, that the Applicants have met the standard they have constructed out of the Commission's order.

The ana ysis is invalid. The Commission did not say what the Staff believes it intended. The facts are not what the Staff believes them to be. And the law does not say what the Staff believes it says.

The Commission plainly intended a full and fair inquiry into the decommissioning issue. First, as discussed below, 10 C.F.R. S 50.33(k)(1) applies here and mandates a complete inquiry. Moreover, the Atomic Energy Act and its important hearing requirement require such an inquiry. Egg 42 U.S.C.

$$ 2232(a), 2239(a). Second, the Commission invoked the very rules the Staff argues de not apply. CLI-88-07 at 2 ("(iln the decommissioning rulemaking the Commission determined that public health and safety could best be protected by promulgatina a rula requiring reasonable assurance (.)")

(emphasis added). Third, the Commission ordered the Applicants to submit their plan "to provide reasonable assurance that adequate funding will be available in the event that a full I

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power license is not granted for Seabrook Unit 1." Id. at 3.

3 The Commission used language in all material respects _dentical to the regulations that the Staff claims do not apply. Fourth, the Commission called for "appropriate commitments" under the i

plan, id. (emphasis added), a request inconsistent with a summary review. Finally, the Commission called for motions to reopen the record and late-filed contentions. Had the Commission intended the type of cursory analysis the Staff suggests, that invitation would not have been giv'an.

THE APPROPRIATE STANDARD OF REVIEW UNDER 10 C.F.R. G 2.734 a As has been long recognized, the standard to be applied to i a motion to reopen a closed record is that "the moving papers must be strong enocqh, in light of any opposing filings, to i

avoid summary disposition." Vermont Yankee Nuclear Power C9120./A. tion (Yankee Nuclear power Station), ALAB-138, 6 AEC 520, 523 (1973).1# In other words, such a motion must be allowed whenever there are disputed and material facts so long as the threshold requirements of 10 C.F.R. S 2.734 are met.

Id. Obviously, the resolution of the factual questions at the heart of the issue to be litigated may, at times, bear on the threshold question of whether the mot > on addresses a 1/ The Commission has noted the similarity of its rules '

concerning motions to reopen to the rules governing the treatment of motions for summary judgment in civil cases in the federal courts. Egg Vermont Yankee, 6 AEC at 524 (comparinq the Commission's motion practice to Fed. R. Civ. p. at 56) 6-

significant safety or environmental question. As the Appeal Board has explained:

The questions of whether the matter sought to be raised is signficant and whether it presents a triable issue may often be intertwined, and can be se treated....

Id. at 524. This does not, however, mean that such questions can be resolved summarily and a motion to reopen denied where there are material facts in genuine dispute. A denial of

, amotion to reopen on the grounds that no significant safety ,

question has been raised is appropriate only when the facts compelling that conclusion are not in dispute. Vermont Yankee, 6 AEC at 526-528 (reviewing the record and determining, "that NECNp has not demonstrated to the Licensing Board that there is a triable issue"); philadelphia Electric CQmgany (Limerick Generating Station, Units 1 and 2), CLI-86-6, 23 NkC 130, 133-134 (1986) (Movants "offer (ed] no credible tecanical reason to dispute the Staff's analysis"); Public Service company of UeH_Kampahile (Seabreak Station, Units 1 and 2), ALAB-865, 25 NRC 430, 442-443 (1987) ("We cannot conclude that there is a factual dispute" and "There are no facts in dispute and the Board reasonably concluded that the Applicants had satisfied applicable regulatory requirements."). i The heart of the question here is whether the assertions of the Staff and the Applicants are sufficient, in this preliminary context, to dispose of the factual issues raise'd by l

the Mass AG, as well as the other Intervenors. The clear answer is that they are not.

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The facts, as indicated in the financial qualifications petitions and supplements, the first Affidavit of Peter Strauss ,

(attached to the Attorney General's' Motions) and now the sacond i Affidavit of Peter Strauss (at'c ached to this Reply as -

Exhibit A), raise significant safety issues that would have led to a different result had they been considered earlier. The best that can be said for the efforts of the Staff and the Applicants is that they have j)ined the issues and disputed the facts as they appear in the Mais AG's and the other '

, Intervenors' papers. In other words, the matter is now ripe ,

, for litigation.

The second Strauss Affidavit highlights the following disputed factual issues, all critical to the Commission's review, First, the treatment of the spent fuel is an important ,

issue in part because af the large costs of maintaining a spent fuel pool. In order to mitigate those costs, the Applicants proposed that the spent fuel be shipped to France for reprocessing. That proposal was widely and publicly criticized (including by members of the Staff). Egg, e.g., Novemher 3. l t

I

, 1138 Nucleonics Week Article, attached as Exhibit B hereto.

Now the Staff asserts that the "more likely alternative would be for Applicants to sell or transfer the spent fuel generated during low power operation to other licensees of facilities which use 4 loop Westinghouse reactors." Staff Affidavit at 4. San Staff's Resoonse at 19.

s i

O What the Staff neglects to analyze and what the decommissioning plan does not even consider are the unprecedented difficulties and extra costs associated with this option. Mr. Strauss points out that there has never to his knowledge been a sale and transfer of partially irradiated fuel in the United States. Second Strauss Affidavit 1 9.A Even  ;

if another utility were interested in a transfer -- and not one  !

utility, whether a Joint Owner of Seabrook or otherwise, has ever oublicly expressed such an interest -- there may well be '

significant costs to the Applicants of accomplishing a f transfer. As Mr. Strauss points out, the transfer would take t l

d

-into account significant future costs of the transferee i

, utility, including at least $13 million in DOE disposal costs, {

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costs of shipping and handling, and derating and/or refueling cycle shortening. Id. 11 7-10. The Staff and Applicants have not even considered these costs, making it impossible for the Commission to make a reasonable assurance finding.

I Second, the Staff concludes that the Applicants can pay the 1

costs of implementing the decommissioning plan because it is 4

"but a small fraction of the total revenues received by i

Applicants from their system-wide utility operations." Staff i

ALLidarit at 5. Egg 14. at 6, 7. This superficial approach  ;

.4 / Mr. Strauss points out that even the sale of a  !

nonirradiated first core to another utility was unsuccessful.  ;

14.  ;

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I falls far short of providing the requisite reasonable t assurance. It does not even consider the other side of the l ledger -- the financial obligations of each of these utilities. For example, those obligations put pSNH into i

Chapter 11, a fact that the Staff curiously overlooks in this ,

part of its analyses. One 7f the most significant obligations for all of the Applicants is their acknowledged 1310 million l obligation to shut the plant down. Again, the Staff as well as 4

1 the Applicants here not addressed how this sum is to be paid 1  :

and what effect ,' would have on the ability of the Applicants l to fund their decommissioning plan.I' ,

Thi'C, the Applicants and Staf f rely on a Memorandum of

Understanding ("M90") between pSNH and MMWEC to provide
assurance that the shortfall created by the latter's withdrawal (

i from the project will be covered. Apolicants' Advice, l At tach .ent A; Staff Affiday11 at 11-12. A copy of the MOU is i

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attached to this Reply as Exhibit C. Among a host of ,

! contingencies to be satisfied by November 16, 1988 (and, i

judging from the Applicants' silence, not yet satisfied) is an 1/ The only treatment of this issue by the Staff is the bald i assertion that "[h]olders of and applicants for NRC licenses l are responsible for providing the funds required to carry on

! licensed activities in accordance with NRC requirements." Staff i affidaxit at 10. True enough, but the Applicants are also

! responsible for paying property taxes, insurance payments, creditors, employees, pension funds and those who would dismantle the site after cancellation. The whole point of I inquiries such as this is to determine, given the troubled

! finances of the project, whether all of these costs can be met and, if not, which ones will remain unpaid and to what effect.

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agreement from all the present and former Joint Owners not to sue each other on any Seabrook-related claims; pSNH's obtaining financing for its $30 million obligation under the MOU; and the j approval of the Bankruptcy Court. MQU 11 F(9)(d), F(9)(f), 1 j- F(12). Without the contingencies having been met, the r

i agreement is a nullity and cannot provide the basis for a reasonable assurance finding.I' ,

Fourth, the decommissioning cost estimates are based on the '

assumption that the Applicants' low-power testing program will

! result in the operational equivalent of less than 1 effective 1  !

full-power hour. Staff Affidavit at 17; Royamber 9, 1988 [

Letter of Richard Smith at 1. Although the assumption appears to be consistent with the Applicants' proposed testing program, j the Applicants have consistently justified proceeding with l low-power testing so far in sdvance of any possible full-power i

! license on the grounds that problems may develop requiring

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- additional testing. Egg g g , Transcriot of November 3. 19 EH  ;

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Magtina__at 50-52 (statement of Ed Brown). As Mr. Smith

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suggests, additional hours of critical operation would quickly double the costs of decommissioning. Smith-November 9, 1983_ l t

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i 1/ The Staff states that even if the agreement is not l

, consummated, the "co-applicants will advanct the funds needed l

! to cover MMWEC's share of the facility's costs until such time i

! as the agreement becomes fully effective." stall _Affidarit at  !

! 12. That claim is based on Mr. Eichorn's testimony at a November 3, 1988 meeting between pSNH and the Staff. l

. Consistent with its approach to the MOU, the Staff skates over [

l the fact that Mr. Eichorn would not identify the joint owners l who would pay the shortfall "because that has not been agreed l upon." Transcriot of NovemhgI_3, 1988 Meetin2 at 18.  !

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J Letter at 3.1 Finally, neither the Applicants nor the Staff dispute the substance of the Mass AG's Financial Qualifications Contention. The costs alleged in the contention, and  ;

substantially acknowledged by the Applicants, are enormous and l

will have an effect on the Applicants' ability to finance I decommissioning.  !

] In short, at best for the Applicants serious disputes as to l i

material facts exist. The law is clear. The contentions must  !

be admitted for litigation.

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THE COMMISSION'S REGULATIONS REQUIRING THAT APPLICANTS l

FOR OPERATING LICENSES PROVIDE REASONABLE ASSURANCE THAT ADEQUATE FUNDS WILL BE AVAILABLE FOR. DECOMMISSIONING THE FACILITY ARE APPLICABLE HERE. l I

The application of the Commission's regulations' requiring reasonable assurance that adequate funds will be available to decommission licensed facilities in a timely and safe manner is clear. While there are some timing differences with respect to the satisfaction the requirements set forth in those j regulationsI ' as well as differences in the spacific $

i requirements applicable j 2/ Mr. Smith also points out that even further escalations ,

would result from significant delays in receiving the possession-only license, a point entirely consistent with the j Mass AG's Decommissioning Contention Basis (d). ,

t 8/ Applicants for an operating license must satisfy the  !

requirements as part of their application (i.e., immediately); i existing holders of operating licenses, on the other hand, have  !

until July 26, 1990 to satisfy those requirements. 10 C.F.R. I S 50.33(k). .

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to electric utilities as opposed to those applicable to other licensees, the Commission's decommisste ming regulations apply with full force to all applicants f holders of operating licenses. Egg 10 C.F.R. SS 50.33() 2.75. Thus, these regulations, specifically the requirements of 10 C.F.R.

SS 50.33(k)(1) and 50.75(b) that an applicant sball provide information in the form of a report containing a certification that financial assurance for decommissioning will be provided in an amount not less than that specified in 10 C.F.R.

S 50.75(c)(1), apply to the Applicants' application for a low power license. This is true irrepective of any requirements set forth in CLI-88-07.I#

The applicability of the requirements of 10 C.F.R.

SS 50.33(k)(1) and 50.75(b) is not affected, as the Staff alone asserts, by the fact that the Applicants "already possess an operating licanso to load fuel." Staff Responig at 31. The Applicants are still applicants for a low power operating license and, as such, they are subject to the requirements of 10 C.F.R. SS 50.33(k)(1) and 50.75(b)lE' 1/ On the other hand, the requirement of 10 C.F.R. S 5'.75(f) that a preliminary decommissioning plan containing a cos.

estimate be submitted five years prior to the projected end of operations should be considered applicable to the Applicants' filing in response to CLI-88-07, because the Commission requested a decommissioning plan to be filed addressing a circumstance in which the projected end of operations at the Seabrook Station would be well within five years of the order.

10/ 10 C.F.R. S 50.75(b) applies even to "holders" of operating licensea and requires a certification, in this case, that. the Applicants can provide $75.484 million. Mass AG Decommissioning Contention Basis (b). The Staff completely ignores both points.

I concerning applicants for operating licenses. The Commission's own decisions concerning Seabrook, as well as common sense, dictate that an applicant for a low power operating license is subject to the application requirements notwithstanding the

, fact that they may already possess an operating license to load fuel.

In CLI-87-2, the Commission considered the question of

, whether the filing of a state, local, or utility emergency l

j response plan was a prerequisite to the issuance of "any 2

operating license." P.ublic Service Comoany of New Hampshire (Seabrook Nuclear power Station, Units 1 and 2), CLI-87-2,

, 25 NRC 267 (1987). Iii resolving this question in the i

j affirmative, the Commission explicitly referenced operating 1

licenses "conditioned to permit only fuel loading" as separate i

j and apart from those conditioned to permit "operations at less than 51 power." Id., 25 NRC at 268. Indeed, there the Commission accorded different treatment to the issued license for fuel loading than it accorded the application for the unissued low power operating license. Id., 25 NRC at 268-269.

A license is "[t]he permission by competent authority to do an act which, without such permission, would be illegal" or

"(1] eave to do things which licensor could prevent." Elack's law Dictionary (5th Ed. 1979). Low power operating licenses I authorize different activities than do fuel loading operating licenses and, thus, are different licenses posing differing

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l safety concerns. Sam 10 C.F.R. S 50.47(d) (referencing i

! "operating licenses authorizing fuel loading and/or low power operations" as subject to different requirements than operating licenses authorizing full power).

With regard to the Staff's and the Applicants' arguments concerning the Commission's intentions with respect to the f applicability of the decommissioning regulations to the filing required by CLI-88-07, as is discussed below, they are l meritiess. They either assume that in CLI-88-07 the Commission  !

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granted the Applicants a tub rosa exemption from the plain i language of 10 C.F.R. S 50.33(k)(1) or confuse the requirements  ;

of 10 C.F.R. S 50.75(b) for "a decommissioning report . . .

r containing a certification that financial assurance for i decommissioning will be provided . . . erni of 10 C.F.R.

! S 50.75(f) for a "preliminary dacommissioning plan" with the i

i requirements of 50.82(a) and (b) for a "final decommissioning plan."11# As discussed above- Sections 50.33(k)(1) and f i

50.75(b) of the Commission's regulations do, by their own  ;

I terms, apply to the Applicants as appli?auts for a low power [

license. In CLI-88-07, the Commission did not, explicitly or otherwise, exempt the Applicants from these regulations.  !

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P 11/ Although the term "final decommissioning plan" does not .

appear in the Commission's decommissioning regulations, both the Staff and the Applicants employ the term. Sta e2g2, OLa LI Respante at 13 ; Anglic. ant s ' Resnonse at 15. It is unclear to i what this term is meant to refer but, for purposes of I

~xsponding to the arguments of the Staff and the Applicants, che Mass AG has assumed that the term references the decommissioning plan required under 10 C.F.R. S 50.8:{a) at the time that termination of a license is sought.  ;

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b , i i k ~lt L To argue that the Commission could not have intended that  ;

the decommissioning regulations apply to a filing required to be made within thirty days because:  !

it is implausible to suggest that the Commission '

intended to impose upon Applicants the obligation to submit within 30 days a final decommissioning plan and final decommissioning funding commitments Staff ResEnnie at 13, is to beg the question of whether the Commission intended that the Appli. cants' filing meet the requirements for all applications for low power operating ,

licenses. Sag als_n Applicants' Respp.nas at 16.12# l The Mass AG has not suggested that the Applicants were to have filed a final decommissioning plan, final funding commitments, or final low level waste disposal contracts. All i

that has been alleged is that'the October 20, 1988 E.A. Brown Lattar fails to provide any assurance that funds will be available to decommission Seabrook in a timely and safe manner, ,

much less the rqosonable assurance required by 10 C.F.R.

SS 50.33(k)(1) and 50.75(b) and that the deccmmissioning plan -

does not provide a relisbic estimate upon which to base a finding concerning the projected costs of decommissioning.

l 12/ Notably, however, unlike the Staff, the Applicants i concede, as they must, that they are subject to 10 C.F.R.

S 50.75(b), id. at 15 n. 31; but, without explanation, they do  ;

not address the portions of the tiass AG Decomisaloning_ Motion that raise their failure to comply with the requirements of l that provision.

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CONCLUSION i

j For all of the foregoing reasons, the Massachusetts l Attorney General respectfully submits that the Commission  !

l should reject the arguments of the Staff and the Applicants, j order that the record in the instant proceeding be reopened and j 4

that the contentions set forth in the attachments to his l motions be admitted for litigation, and order that no low power {

license for Seabrook issue unless and until the litigation is l

, i concluded in favor of the Applicants.

RESPECTFULLY GUBMITTED [

i JAMES M. SHANNON li

! ATTORNEY GENERAL COMMO EALTH OF MASSACHUSETTS

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By:

C-'St'epKen //Jonas

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Deputy M torney General George B. Dean Assistant Attorney General

, One Ashburton Place 1 Doston,-Massachusetts 02108 (617) 727-2200 DATED: November 25, 1988 17 -