ML18194A395
| ML18194A395 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley, Davis Besse, Perry |
| Issue date: | 06/19/2018 |
| From: | Office of Nuclear Reactor Regulation |
| To: | |
| Vaidya B K, 415-3308 | |
| References | |
| NRC-3770, OEDO-18-00160 | |
| Download: ML18194A395 (37) | |
Text
Official Transcript of Proceedings NUCLEAR REGULATORY COMMISSIONTitle:10 CFR 2.206 Petition Review Board Re First Energy Nuclear Facility Operating
Company in Ohio and PennsylvaniaDocket Number:(n/a)Location:teleconference Date:Tuesday, June 19, 2018Work Order No.:NRC-3770Pages 1-36 NEAL R. GROSS AND CO., INC.
Court Reporters and Transcribers 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 (202) 234-4433 1 UNITED STATES OF AMERICA 1 NUCLEAR REGULATORY COMMISSION 2+ + + + +3 10 CFR 2.206 PETITION REVIEW BOARD (PRB) 4 CONFERENCE CALL 5 RE 6 FIRSTENERGY NUCLEAR OPERATING COMPANY 7 IN OHIO AND PENNSYLVANIA 8+ + + + +9 TUESDAY 10 JUNE 19, 2018 11+ + + + +12 The conference call was held, Gregory 13 Suber, Chair of the Petition Review Board, presiding.
14 PETITIONER: ENVIRONMENTAL LAW AND POLICY CENTER 15 PETER BRADFORD, Adjunct Professor at Vermont 16 Law School and former NRC Commissioner 17 ANDRENE DABAGHI, ESQ.
18 MARGRETHE KEARNEY, ESQ.
19 20 21 22 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 2 PETITION REVIEW BOARD (PRB) MEMBERS:
1 PERRY BUCKBERG, NRC 2.206 Petition Coordinator 2 JAMES CAMERON, Branch Chief of the NRC Region 3 III Office responsible for Davis-Besse and Perry 4 CHRIS HAIR, Attorney with the Office of General 5 Counsel 6 SHAWN HARWELL, Financial Analyst in the Office 7 of Nuclear Reactor Regulation 8 DAVID JONES, Enforcement Specialist from the 9 Office of Enforcement 10 GREGORY SUBER, PRB Chair, Deputy Director for 11 the Division of Operating Reactor Licensing 12 BHALCHANDRA K. VAIDYA, Petition Manager for the 13 Petition and Project Manager in the Office of 14 Nuclear Reactor Regulation 15 16 ALSO PRESENT:
17 RICH JANATI, Chief, Division of Nuclear Safety 18 Department of Environmental Protection 19 Administrator, Appalachian Compact Commission, 20 State of Pennsylvania 21 JENNY TOBIN, Project Manager for Beaver Valley 22 Power Station 23 LARRY WINKER, State of Pennsylvania Bureau of 24 Radiation and Protection 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 3 P-R-O-C-E-E-D-I-N-G-S 1 (12:33 p.m.)
2MR. VAIDYA: Hello. Let's begin the 3 meeting.4 I would like to, first of all, thank 5everybody for attending the meeting. My name is 6 Bhalchandra Vaidya, and I am an NRC Project Manager in 7 the Office of Nuclear Reactor Regulation.
8 We are here today for a meeting that 9 allows the Petitioners, Environmental Law and Policy 10 Center, to address the Petition Review Board regarding 11 the 2.206 petition dated March 27, 2018.
12 I am also the Petition Manager for the 13 petition.
14 Petition Review Board Chairman is Gregory 15 Suber.16 As a part of the Petition Review Board's 17 review of this petition, Petitioners, Ms. Kearney --
18I hope I am pronouncing the name right -- and 19 Ms. Dabaghi, the Petitioners, have requested this 20 opportunity to address the PRB.
21 This is a Category 1 meeting where the 22 public is invited to observe this meeting, and we will 23 have one or more opportunities to communicate with NRC 24 after the business portion but before the meeting is 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 4 adjourned.
1 One other item of administrative nature is 2 after the meeting is over, if you go to the NRC public 3 website for the meeting, you will have a chance to 4 give feedback on this meeting because there is a link, 5 and you can fill that out, submit it, and your 6 feedback will be given to me, who is the petition 7 manager. So this way you have the chance to provide 8 feedback.9 Other administrative aspect, for the 10 visitors, the escort is required. So if you need to 11use the restroom, seek one of the NRC employees who 12 can escort you.
13 This meeting is scheduled to begin at 14 12:30, which it did, and after introductory remarks 15 the Petitioners will address the Board. The meeting 16will be transcribed by the Court Reporter. The 17 transcript will become a supplement to the petition.
18 The transcript will also be made publicly available.
19 So, Jennifer, the telephone operator, can 20 you open the lines, all lines, so we can begin the 21 introductions?
22 OPERATOR: Yes. Please stand by.
23MR. VAIDYA: Okay. They are open, right?
24OPERATOR: Yes. All lines are now open 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 5and interactive. To avoid background noise, press 1 star-six to mute and unmute your line.
2MR. VAIDYA: Okay. So I would like to 3 open this meeting with introductions. The PRB Chair 4is Gregory Suber. I would like the members of the 5Petition Review Board who are present at the 6 headquarters to introduce themselves, going around the 7 table, please.
8MR. BUCKBERG: Hi. I'm Perry Buckberg.
9 I'm the Agency Petition Coordinator.
10 MR. HARWELL: Shawn Harwell, a Financial 11 Analyst with NRR.
12 MR. JONES: I'm David Jones, Enforcement 13 Specialist from the Office of Enforcement.
14MR. HAIR: I'm Chris Hair, an attorney 15 with the Office of General Counsel.
16MS. TOBIN: I am Jenny Tobin. I am a 17 Project Manager for Beaver Valley.
18MR. MATTHEWS: My name is Tim Matthews.
19 I'm attending as a member of the public.
20MR. VAIDYA: Okay. If -- are there any --
21 there are no other members present here from NRC 22 staff, but are there any members on the line who are 23 NRC staff? Then they can introduce themselves.
24 Jennifer, you have any idea if there are 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 6 any members on the participation -- I mean, leader --
1 leadership passcode people?
2 OPERATOR: Yes, there is one.
3MR. VAIDYA: Okay. Hello. I believe that 4 must be James Cameron, no?
5 OPERATOR: Yes.
6 MR. VAIDYA: Okay. Mr. Cameron, can you 7 introduce yourself for the record?
8MR. CAMERON: Yes. I'm James Cameron.
9 I'm the Branch Chief in NRC's Region III office 10 responsible for Davis-Besse and Perry.
11MR. VAIDYA: Okay. And he is part of the 12 Petition Review Board also.
13 If there is nobody else, then are there 14 any PRB members on the line other than James Cameron?
15 I believe not.
16 And are there any representatives from the 17 licensee on the line? I guess not.
18 Are there any other members from the 19 public, Jennifer, on the line? Hello, Jennifer?
20OPERATOR: There are -- there are five 21participants on the line. All lines are open and 22 interactive. You can speak freely.
23 MR. VAIDYA: Okay. So, please, can you, 24 one by one, introduce yourself?
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 7 MR. WINKER: I'm Larry Winker. I'm with 1 the Pennsylvania Bureau of Radiation and Protection.
2 MR. VAIDYA: Okay.
3 MR. WINKER: Could you hear that?
4MR. VAIDYA: Yes, I did hear that. The 5 next one, please?
6MR. JANATI: Rich Janati, Chief, Division 7 of Nuclear Safety Department of Environmental 8 Protection Administrator, Appalachian Compact 9 Commission, State of Pennsylvania.
10MR. VAIDYA: Okay. Could you please send 11 me an email with your name, just so that we get your 12 name right?
13 MR. JANATI: Of course.
14 MR. VAIDYA: Okay. Thank you. The next 15 one? Hello?
16OPERATOR: Please unmute your phone. All 17lines are open and interactive. Please check your 18 mute button.
19 CHAIR SUBER: Okay. So maybe they don't 20 want us to know who they are.
21 MR. VAIDYA: It's possible.
22CHAIR SUBER: Yeah. That's not against 23 the law, right?
24 MR. VAIDYA: No.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 8 CHAIR SUBER: So we can move on.
1MR. VAIDYA: Hello? I do want to add a 2 note that for the public who are dialing in to listen 3 in, it is not required for the members of the public 4to introduce themselves. But if you want to, you can 5please introduce yourself. Otherwise, we will proceed 6 with the meeting.
7 I guess having not heard anybody else, 8we'll go to the next step. At this stage, could 9 Petitioners, Ms. Kearney and Dabaghi, introduce 10yourself, in addition to Peter, for the record, 11 please.12MS. KEARNEY: Certainly. My name is 13 Margrethe Kearney, and I'm a senior attorney with the 14 Environmental Law and Policy Center.
15MS. DABAGHI: My name is Andrene Dabaghi.
16 I'm an associate attorney at the Environmental Law and 17 Policy Center.
18MR. BRADFORD: I'm Peter Bradford. I'm an 19 adjunct professor at Vermont Law School, consultant, 20 and a former lots of things.
21 (Laughter.)
22MR. VAIDYA: Okay. Well, one other thing 23 that I want to point out is -- which to help the Court 24 Reporter and for the record, please try to speak 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 9 clearly and loudly, so that the Court Reporter can 1accurately transcribe the meeting. If you have 2 anything that you would like to say, please first 3 state your name, so that it makes it -- makes it 4 easier for Court Reporter to know who is speaking.
5Let me see, what is the next one? The 6 other part was for those who are on the cell phones, 7please mute your cell phone, so that it will not 8disturb us. And, Jennifer, the operator, has probably 9 given you instructions how to seek her help during the 10 call.11 The next step is I would like to turn this 12 thing over -- this meeting over to the PRB Chair, 13 Gregory Suber.
14 But before that, Jennifer, can you mute 15 the lines which are for the public with the 16 participant passcode, not leadership passcode but the 17 other one.
18OPERATOR: Yes. All lines are now on 19listen-only. During the question and answer session, 20 you may press star-one to ask your question.
21MR. VAIDYA: Okay. And do you have the 22 line on which Mr. Cameron is on open? He is --
23 OPERATOR: Yes.
24MR. VAIDYA: -- a participant. I just 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 10 want to make sure.
1OPERATOR: His line is open and 2 interactive for the duration.
3MR. VAIDYA: Okay. All right. So at this 4 stage, I will turn it over to PRB Chairman Gregory 5 Suber.6CHAIR SUBER: All right. Thank you. Good 7afternoon. My name is Gregory Suber. I am the Deputy 8 Director for the Division of Operating Reactor 9Licensing. And for the purposes of this meeting, also 10 the PRB Chair.
11 So I'd like to welcome you to this public 12 meeting regarding the 2.206 petition submitted by your 13 organization, the Environmental Law and Policy Center.
14I'm going to give you some background information.
15 I'm going to read it to make sure I don't miss 16 anything, make sure I am clear and concise.
17Okay. So for our processes, Section 2.206 18 of Title 10 of the Code of Federal Regulations 19 describes the petition process, the primary mechanisms 20 for the public to request enforcement action by the 21NRC in a public process. This process permits anyone 22 to petition NRC to take enforcement-type actions 23 related to NRC's licensees or licensed activities.
24 Depending on the results of this 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 11 evaluation, the NRC could modify, suspend, or revoke 1 an NRC-issued license or take another action 2 appropriate -- take another appropriate enforcement 3 action to resolve the problem.
4 The NRC staff's guidance for the 5 disposition of 2.206 petition requests is in 6 Management Directive 8.11, which is publicly 7 available.
8 The purpose of today's meeting is to give 9 the Petitioner, the Environmental Law and Policy 10 Center, the opportunity to question or examine --
11 excuse me, the opportunity to provide additional 12 information or an explanation or support the petition 13 which is currently before the Review Board.
14 This meeting is not a hearing, nor is it 15 an opportunity for the Petitioner to question or 16 examine the PRB on the merits or issues presented in 17the petition. No decisions regarding the merits of 18 this petition will be made at this meeting.
19 Following this meeting, the PRB will 20conduct its internal deliberations. The 21 recommendation of the internal meetings will be 22 communicated to the Petitioner.
23 The Petition Review Board typically 24 consists of a chairman, which is me; usually a manager 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 12 at the senior executive service level at the NRC; it 1 has a petition manager and a Petition Review Board 2coordinator. Other members of the Board are 3determined by the NRC staff based on the content of 4 the information in the petition request.
5 The members have already introduced 6themselves. As described in our process, the Petition 7 Review Board members, NRC staff, and the licensee may 8 ask clarifying questions in order to better understand 9 the contents of the petition, as well as the 10 Petitioner's presentation, so as to reach a reasonable 11 decision in their deliberations whether to accept or 12 reject the petition fully or partially for review 13 under the 2.206 process.
14 I would like to summarize the scope of the 15 petition under consideration and the NRC's activities 16 to date.17 On March 27th of 2018, you submitted to 18 the NRC a petition under 2.206 in which you requested 19 a number of enforcement actions regarding FirstEnergy 20 nuclear facilities operations in Ohio and 21Pennsylvania. The concerns reflected in the petition 22 included a violation of financial assurance 23 requirements for the decommissioning funds of the 24 FirstEnergy's filing under bankruptcy proceedings.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 13 On April 16, 2018, the petition manager 1 contacted you to discuss the 10 CFR 2.206 process and 2 to offer you an opportunity to address the PRB. You 3 requested to address the PRB before it makes an 4 initial recommendation to accept or reject the 5 petition for review.
6 As a reminder for the phone participants, 7 please identify yourself if you make any remarks, as 8 this will help us in the preparation of a meeting 9 transcript that will be made publicly available.
10 I would like to thank you for coming, and 11 right now we are going to turn it over to Ms. Kearney 12 and Ms. Debegadi?
13 MS. DABAGHI: Dabaghi.
14CHAIR SUBER: Dabaghi. I'm sorry. I knew 15I was going to screw that up. And Ms. Dabaghi. Sorry 16 for hacking up your name, but welcome to the NRC, and 17 feel free to move forward with your presentation.
18MS. KEARNEY: Thank you very much, and 19 thank you all for taking the time to be here today.
20 We know you have busy schedules and appreciate the 21 attention that you're giving to this matter.
22 For the transcript, my name is Margrethe 23 Kearney from the Environmental Law and Policy Center.
24 And as was just described, ELPC filed a petition, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 14 which I'll refer to as the 206 petition, on March 27, 1 2018. 2 And at the time we filed that 206 3 petition, we had grave concerns regarding the adequacy 4 of FES and FENOC's available decommissioning funding 5 for their units, and we questioned whether, with an 6FES bankruptcy looming on the horizon, the parent 7 company, FirstEnergy Corporation, would continue to 8 guarantee any shortfall in those decommissioning trust 9 funds.10 Since we filed that petition, there have 11 been several key events that have taken place. On 12 March 28, 2018, FES and FENOC announced that they 13 would permanently retire all four of their reactors 14 within the next three years.
15 Mr. Bradford will address the adverse 16 impact of that advanced retirement date on the 17 adequacy of the decommissioning funding.
18 On March 31, 2018, FES, FENOC, and 19 multiple other subsidiaries filed for bankruptcy in 20the Northern District of Ohio. That bankruptcy filing 21 also impacts this agency's regulatory analysis, 22 decision-making, and Mr. Bradford will also discuss 23 those issues.
24 Unfortunately, that filing also impacted 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 15 ELPC's ability to participate freely in these 1 proceedings as we would have liked, at least 2initially. As you're no doubt aware, FES and FENOC's 3bankruptcy filing triggered an automatic stay on a 4 broad range of proceedings.
5 And whereas here there are differing legal 6 opinions as to whether or not the stay could apply to 7this proceeding, we were very careful about our 8 communications with the PRB and with the agency, given 9 that the automatic stay may apply.
10 In particular, we were reluctant to 11 provide the supplemental information until we received 12 clarification from the court as to whether the stay 13 applied; and if it did, whether the stay would be 14 lifted, so that we could continue to participate in 15 these important proceedings.
16 I apologize for any inconveniences that 17 that might have caused in the scheduling of these and 18 appreciate the PRB's flexibility.
19 ELPC filed a motion for relief from the 20 automatic stay that is currently pending before the 21Bankruptcy Court. We're in discussions with the 22 debtor as to a mutually acceptable resolution of that 23 motion, and it's pursuant to a stipulation with the 24 debtor that was signed by the Bankruptcy Court that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 16we're able to appear today. That stipulation has been 1 provided to the PRB, and I ask that it is entered into 2 the record for this petition just so the propriety of 3 our engagement in these proceedings is beyond 4 question.5 And I also understand that the process 6 we're engaging in now as just described will provide 7 ELPC further opportunities to provide information to 8 the PRB, and potentially to comment on the initial 9 recommendations that the PRB has.
10 Please know that we intend to participate 11 in that fully, but that we will also need certainty 12 from the Bankruptcy Court that to do so will not run 13afoul of the automatic stay. We will continue to work 14 diligently in the bankruptcy proceedings to minimize 15 those delays, but we just want to make you aware of 16 them, and that we are going to do our best to make 17 sure they don't keep you guys from making a timely 18 decision.19 But to bring us back from bankruptcy and 20 to today's proceeding, our intent is to provide you 21 with supplemental information that is relevant to that 22206 petition. We want to focus on the materials that 23 have been provided in the supplement, and Mr. Bradford 24 is here today to provide information and respond to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 17questions. He does have a hard stop at 1:30, so I do 1 encourage you, to the extent that there are questions 2 that could go towards me or to Ms. Dabaghi, to sort of 3 save those if time runs over.
4 So with that, I am going to turn it over 5 to Mr. Bradford for his comments.
6MR. BRADFORD: I guess I only have a hard 7 stop if I can find an escort, though.
8 (Laugher.)
9MR. BRADFORD: Thank you. I have filed a 10 declaration yesterday which -- and so what I'll 11 provide today is a narrative statement that picks up 12 on some of the key points in the declaration, as well 13 as the petition.
14 I should note one thing about the 15declaration. There is a correction to the fifth 16footnote. It has Davis-Besse now closing in 2021. It 17 should be 2020.
18 Now I'll proceed with my statement.
19 During my 24 years as a regulatory commissioner on the 20 NRC and elsewhere, I took part in many proceedings 21 whose success depended on a close and reliable linkage 22 between regulatory findings and reasonable assurance, 23 such as those that need to be made for the adequacy of 24 decommissioning funding and the conditions that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 18 actually prevailed in the real world.
1 When reasonable assurance regulation and 2reality are not aligned, when the conditions that 3 exist in the power plants or in utility finance or in 4 the power grids are not those as to which regulators 5 have found reasonable assurance of adequate 6 protection, any regulatory agency is on a path that 7 can lead to danger, to public harm, to fiasco.
8 Conditions not foreseen, or conditions 9 thought too unlikely to require regulatory attention, 10 may crop up, so that reality undermines the reasonable 11assurance found to have existed in years past. All 12 regulatory agencies go through these shocks from time 13to time. Hydrogen appears where it was deemed 14impossible. Boron eats a full-sized hole in a vessel 15head. Enron rigs the California energy market so 16 drastically that wholesale prices exceed retail caps, 17 bankrupting the state's largest power company.
18Assuring adequate de commissioning funds is 19 especially vulnerable to this tendency of reality to 20divorce reasonable assurance. We have -- we have 21 relatively little experience carrying out 22decommissioning processes. Large amounts of money 23 must be managed and forecast for decades during which 24 government and corporate forms and imperatives will 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 19 change dramatically and unforeseeably.
1 This has already happened during the 25 2 years since electric restructuring commenced in the 3 U.S. It will inevitably be even greater in the next 4 50 years.5 Change at this pace will inevitably 6 involve a significant number of corporate failures, 7 especially as competition and innovation displace 8cost-plus regulatory arrangements. The NRC has 9 already seen licensees go bankrupt during reactor 10 operation and during reactor construction.
11 As far as I know, however, it has never 12 had to deal with a situation in which a licensee 13 simultaneously files for bankruptcy and announces a 14 multi-year reduction in the operating lives of several 15 nuclear power plants.
16 The uncertainties introduced by the recent 17 changes in the FirstEnergy companies are stark. The 18 gap between the amount presently in the 19 decommissioning funds and the amount needed for 20 decommissioning can no longer be closed in time, even 21 using the NRC's cost estimates and escalation rates, 22 which recent history suggests are too low.
23 If these plants close in 2020 and 2021, 24their funds cannot grow to levels that will pay for 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 20complete decommissioning. Additional forms of 1 financial assurance will be needed.
2 The adequacy of the FirstEnergy Nuclear 3 Operating Company decommissioning funds to meet 4 projected decommissioning costs has been premised on 5 the ability of the funds to grow for some 20 years 6 without being drawn down at all, and for nearly 50 7 years before the bulk of the expenditure occurs.
8 To make matters worse, the demands and 9 reasonable expectations of the host states and 10 localities for more rapid decommissioning will not be 11 clear until after closure.
12 Uncertainties in the federal spent fuel 13program abound. Even the cost and availability of 14low-level waste storage is far from clear. The effect 15 of these uncertainties, combined with the generally 16 acknowledged uncertainties as to decommissioning costs 17 and decommissioning fund growth rates, is to determine 18 confidence that the NRC's past findings of reasonable 19 assurance reflect today's FirstEnergy realities.
20 Gone are the assurances, first, that 21 regulators will allow rates enabling the plant owners 22 to contribute to the decommissioning funds; second, 23that there will be 18 to 28 years of time for the 24 funds to grow; and, third, that there is any assurance 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 21 that funding shortcomings can be made up by future 1 guarantees from FirstEnergy, which in any case intends 2 to "wash its hands" of such obligations, or by 3 FirstEnergy Solutions, which is in bankruptcy and no 4 longer passes the NRC's tests to qualify as a 5 guarantor.
6 I lived near the Maine Yankee nuclear 7 plant during its last years of construction and its 8first years of operation. I can assure you that none 9 of the surrounding towns thought that they were 10 entering into an arrangement pursuant to which the 11 reactor might stand idle for decades after closing, 12 foreclosing all other economically beneficial uses of 13 the oceanfront land.
14 In fact, the plant did close in the late 15 1990s and was decommissioned within a decade as the 16state insisted. A similar rejection of SAFSTOR by the 17 state of Vermont and the communities around Vermont 18Yankee is now underway about 40 miles from where I 19 live.20 SAFSTOR is not likely to be acceptable to 21 most states and communities, except when other nuclear 22 plant operations continue at a particular site. The 23 ability to keep faith with the communities that have 24 hosted these facilities for decades, and to show 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 22 future host communities that this faith will be kept, 1 requires that reasonable assurance of adequate 2 decommissioning funds not just mean casual hope that 3 somehow funds and corporate goodwill will allow a show 4 of clean-up sometime late in the 21st century.
5 That approach is all too likely to result 6 in funding shortfalls at a time when today's licensees 7no longer exist. The only ones available to bear the 8 costs then will be future taxpayers and customers, or 9 if the job is done in an incomplete manner, the 10 citizens living around the reactor sites.
11 To avoid this outcome, the NRC needs to 12 protect the financial integrity of the decommissioning 13 process with the same hard-nosed realism and 14 conservatism with which FirstEnergy is protecting its 15investors. As a first step, it should issue the 16 demands for information made by ELPC in its 2.206 17 petition and should promptly request from FirstEnergy 18 Services an updated decommissioning funding status 19 report for the Beaver Valley, Davis-Besse, and Perry 20 nuclear plants.
21 Because of the bankruptcy of FES and 22 FENOC, as well as the financial stress on FirstEnergy, 23 the NRC should be sure that it takes the full range of 24 potential decommissioning costs into account, and that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 23 the payment of these costs can be assured through 1 fully protected access to assured funding from a 2 financially reliable source.
3 Any necessary guarantees from FirstEnergy 4 should be in forms that cannot be undermined by the 5 current bankruptcy proceeding or by its outcomes or by 6 the financial stress under which FirstEnergy finds 7 itself.8 Thank you.
9 CHAIR SUBER: Are there any questions?
10 MR. VAIDYA: Yeah. Let's go to the next 11part of the meeting. At this time, are there any 12 questions from PRB members for the Petitioners?
13 Anybody who is present can, you know, raise questions, 14 clarifying questions, on the presentation they just 15 made. 16 Well, if there are none, then PRB member 17 on the phone, Mr. Cameron, James, do you have any 18 questions for the Petitioner's presentation? I hope 19 you were able to hear it clearly.
20MR. CAMERON: Yes. I heard it clearly.
21 No, I do not have any questions.
22MR. VAIDYA: Okay. All right. Good 23 enough. 24 Then there are -- there are no members of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 24 the licensee on the line, so we'll -- we won't have 1 any questions at this point from them.
2 CHAIR SUBER: Can I ask one question?
3 MR. VAIDYA: Yes.
4CHAIR SUBER: Can you expand on exactly 5 what you are seeking for the -- for the demand for 6information? Exactly what -- is it just financial 7information that you are interested in? Is it -- what 8 exactly -- when you say you want more information on 9 the bankruptcy, what exact information are you --
10 MS. KEARNEY: Yeah. I can -- I can take 11that question. So the information that we're seeking 12 is updated information that reflects the existing 13 funding in decommissioning trusts, the projected 14 decommissioning costs with the accelerated retirement 15 dates or the accelerated decommissioning dates.
16 And I'm glad that you asked that question 17 because I don't think it was clear in the original 18 petition, but I think it's important that estimates be 19-- estimates of the costs of decommissioning be 20 received with and without SAFSTOR. So currently for 21at least one of these units the projected 22 decommissioning costs are based on a SAFSTOR option.
23 Although I understand that the company has 24 not made an official determination as to whether it is 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 25 going to use SAFSTOR, I think it's relevant and 1 important information for the agency to have to 2 understand the potential differences in those 3 decommissioning costs over time and how they might be 4 impacted, too, by the accelerated decommissioning.
5 MR. VAIDYA: Okay. Any other questions from 6PRB members at this time? Otherwise, we will move on 7 to the next topic, which is really going to see 8 whether any members of the public have any comments.
9 So at this time, Jennifer, can you open 10 the lines, public lines, where people dial in with 11 participation call?
12OPERATOR: Yes. If you would like to ask 13 a question, please press star-one on your touchtone 14 phone, unmute your phone, record your name clearly 15 after the prompt, and I will introduce you for your 16question. That's star-one to ask a question. If you 17 need to withdraw your question, you may press star-18 two. Please stand by for incoming question.
19MS. KEARNEY: Would it be appropriate for 20 me to follow up? I just had one other thought.
21 CHAIR SUBER: Definitely.
22 MS. KEARNEY: Okay.
23 CHAIR SUBER: Please go ahead.
24 MR. VAIDYA: So that -- maybe after this --
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 26 MS. KEARNEY: After that? Okay.
1 MR. VAIDYA: -- can go back.
2 MS. KEARNEY: Yeah. I just --
3 MR. VAIDYA: Hello, Jennifer?
4CHAIR SUBER: She just said there's no 5 questions.
6OPERATOR: There are currently no 7 questions in the queue.
8 MR. VAIDYA: Okay. Anybody, do you have 9 any questions?
10 So it appears that there are no comments 11from the public for this session, but there is a 12 request from the Petitioners to provide some 13 elaboration on the previous discussion. So I'll let 14 Ms. Kearney continue.
15MS. KEARNEY: Thank you. Thank you. And 16 I apologize, but I think that one other piece of 17 information that would be very useful to obtain, and 18is really key to understanding the reasonableness of 19 the financial assurances here is whether or not the 20 parent company, FirstEnergy Corporation, is being 21 looked to to provide any sort of parental guarantee.
22 And that is something that I think has 23 been less clear in recent public filings as it may 24 have been five or six years ago, and so to obtain 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 27 clarification on that point is an important piece of 1 information for the PRB to understand in reviewing the 2 petition.3 MR. HARWELL: FirstEnergy Corp.
4 MS. KEARNEY: FirstEnergy Corp, yes, the 5 non-bankruptcy parent corporation.
6 MR. HARWELL: Thank you.
7 MR. VAIDYA: Okay.
8OPERATOR: Excuse me. This is the 9 operator. We do have a question over the phone now.
10 MR. VAIDYA: Okay. Go ahead.
11OPERATOR: Mr. Janati, your line is open.
12MR. JANATI: Okay. The question I have 13 is, you might have already mentioned it, but it 14 concerns the inadequacy or inadequate funding of --
15 adequacy of funding of decommissioning to Beaver 16 Valley or is it the lack of parental guarantees or a 17 combination of both?
18CHAIR SUBER: Can you ask him to identify 19 himself?20MR. VAIDYA: Hello? Can you please 21 identify yourself?
22MR. JANATI: Yes. Rich Janati, Chief, 23 Division of Nuclear Safety Department of Environmental 24 Protection Administrator, Appalachian Compact 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 28 Commission, State of Pennsylvania.
1MR. VAIDYA: Rich Janati, okay. All 2 right. And can you repeat the question?
3 MR. JANATI: The question is the concern 4 that we've talked about, does it involve the adequacy 5 of decommissioning funding and the cost estimate 6 related to decommissioning of the Beaver Valley units, 7 or it has to do with the lack of parental guarantees, 8 particularly now that there is a bankruptcy or a 9 combination of both?
10MR. VAIDYA: I think Petitioners may be in 11 a better position to elaborate on what they are asking 12 in the petition.
13MS. KEARNEY: Certainly. So this is 14Margrethe Kearney from ELPC. The concern, really, is 15a combination of both. So the primary and preliminary 16 question is whether or not there is, in fact, as we 17 believe there is, a gap in the necessary 18 decommissioning funding. If there is such a gap, is 19that being met through parental guarantees? And we 20 would have serious concerns about that here, given 21 that the parent corporation has distanced itself from 22 the subsidiary, FES, and FENOC, in bankruptcy 23proceedings. So it's a combination of both, but in 24 some ways can be seen as a phased inquiry.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 29 MR. JANATI: Could I ask a follow-up 1 question?2 MR. VAIDYA: Yes, sure you can.
3MR. JANATI: Okay. There's a note to 4 Part 1, gap in decommissioning funding. How did you 5 come to that conclusion?
6MR. VAIDYA: Hello? The question, I 7believe, is for the Petitioner. So can you repeat the 8 question, so they understand it clearly?
9 MR. JANATI: Yes. The question is as it 10relates to a gap in decommissioning funding. May I 11 ask, how did you come to that conclusion that you 12 believe there was a gap in decommission funding?
13 Based on what study or analysis?
14MR. BRADFORD: Well, there are several --
15this is Peter Bradford. Several factors that support 16that conclusion. First, the reports filed by the 17 licensee itself as to the four units all show that the 18 funds at their present level are not as large as the 19projected costs of decommissioning. And that was true 20 even with the assumption that they would be allowed to 21 grow over the multi-year remaining lives of the plant.
22 Three significant things have occurred in 23the last couple of months. The owner of the plants 24 has announced that they will close not years in the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 30future but in the years 2020 and 2021. So the growth 1 period is much shorter and clearly not sufficient to 2 close the gap.
3 Second, the owners of the plants have 4 filed for bankruptcy.
5 And, third, the parent company of the 6 corporation, FirstEnergy, has announced that it 7 intends to completely sever itself from the nuclear 8 plant and from the -- indeed, from the generation 9 business as a whole.
10 So as to the availability of guarantees, 11 they don't intend to be there apparently once these 12 proceedings and corporate restructurings are complete.
13 That's why it's true that both the gap and the 14 availability of a solvent parent company to fill that 15 gap are the concerns here.
16MR. JANATI: A question for NRC, and then 17that will be the end of my questions. Have you 18 contemplated, as it relates to the decommissioning 19 fund, the Nuclear Regulatory Commission must have 20 contemplated the issue of bankruptcy, that this could 21 happen, and what remedy, what actions would have to 22 take place under these circumstances.
23 And you don't necessarily have to answer 24 me now, but at some point it would be -- I'm sure the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 31 members of the public would like to know that under 1 these circumstances what would be the remedy and how 2 would you address a situation like that.
3MR. HARWELL: This is Shawn Harwell. I 4 would say at this time we wouldn't necessarily address 5 that question as what kind of remedies, because we 6 don't know at this time what the licensees are 7 proposing, which is the -- is what the Petitioners are 8 basically asking for, right?
9 So until we know for sure what they are 10 proposing, we would remain silent on this because we 11 need to also see what the -- what the licensees are 12 thinking as far as their plans.
13MR. JANATI: Okay. I have no other 14 questions. Thank you very much.
15MR. VAIDYA: Okay. Thank you. And if there 16 are no other questions, Jennifer, on the line, then we 17 can move on to the next topic, which is -- hello?
18 CHAIR SUBER: She's trying --
19OPERATOR: There are no other questions in 20 the queue.
21MR. VAIDYA: Yeah. Okay. So we can move 22 on to the next topic, which is the closing --
23MR. HARWELL: Bhalchandra, I'm sorry. Can 24 I ask one more clarifying question?
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 32 MR. VAIDYA: Okay.
1 MR. HARWELL: And I noticed it in the --
2 in the original petition and then, sir, I heard you 3speak about it. When you say that -- I'm going to try 4 to quote you as best I can -- that their DFS reports 5 all show funds at present level, do not meet current 6-- do not meet the needs, the cost estimate.
7 Is that in contemplation of only immediate 8 decommissioning, or does that -- are you saying 9 overnight cost -- is the argument that the overnight 10 costs don't meet the -- either the formula amount or 11 the actual decommissioning cost estimate of site-12 specific, or are you talking into account growth in 13 your statement?
14 MR. BRADFORD: I would -- as long as the 15 plants actually close in 2020 and 2021, I would say 16 they don't -- that at the end of the projected life, 17 using SAFSTOR, the funds would be inadequate.
18MR. HARWELL: So you are also 19 contemplating SAFSTOR.
20 MR. BRADFORD: Yeah.
21 MR. HARWELL: Okay. Thank you.
22 MR. JONES: I have a question as well.
23 MR. VAIDYA: Okay.
24 MR. JONES: My question from the --
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 33MR. VAIDYA: Could you identify yourself?
1MR. JONES: I'm sorry. David Jones, 2 Office of Enforcement. My question on the petition, 3part of what you requested is that we consider the 4 issuance of a Notice of Violation, and I'm assuming 5 that's primarily against the requirement of 50.75, 6 which is listed.
7 Is there a specific section or attribute 8 or could you provide more detail on which portion of 9 that requirement that you believe a violation should 10 be issued against?
11MS. KEARNEY: If I'm understanding 12correctly, and let me know if this is not response, 13the violation would be of the financial assurance 14 requirements, and so the failure to provide reasonable 15 financial assurances for decommissioning costs.
16MR. JONES: Okay. And I was asking if 17 there is something more specific than that -- that 18 general -- that general statement.
19MS. KEARNEY: I am -- no, and I'm not 20sure. And maybe I'm not getting the rest of the 21question. But, no, that's the -- that is the 22 violation that we were contemplating and requesting 23 enforcement on is a failure to provide those financial 24 assurances and to be in compliance with the financial 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 34 assurance regulations.
1 MR. JONES: Okay. Thank you.
2MR. VAIDYA: Okay. Again, if there are no 3 other questions from PRB members or the public, then 4 we move on to the next topic of the meeting, which is 5 basically closing remarks by PRB Chair.
6CHAIR SUBER: Okay. I'd like to thank you 7 guys for coming down and meeting with us face to face.
8I hope that you got to express everything that you 9 wanted to communicate to us. I'll give you one last 10 chance, if you guys want to have any closing remarks.
11 Have anything to say in closing or --
12MS. KEARNEY: I mean, the only thing I 13 would state in closing is that I think it's really 14 essential right now, especially with the bankruptcy 15 proceedings, that as much clarity is gained by this 16 agency as possible with respect to the decommissioning 17 costs and what has been set aside to make sure that 18 they are borne not by taxpayers, not by citizens, but 19 by the company.
20 And so we just urge you to get as much 21 information publicly available as possible.
22 CHAIR SUBER: Okay. Great. All right.
23MR. BRADFORD: If I could, I would just 24 like to say it was good to be at the --
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 35 (Laughter.)
1MR. BRADFORD: I would be remiss in not 2saying that. I doubt very much that there are many 3 people here who were here when I --
4 (Laughter.)
5MR. BRADFORD: -- retirement possibilities 6 being what they are. But it's good to be seeing and 7 speaking with NRC staff again. I have a lot of fond 8 memories.9 CHAIR SUBER: All right. Well, we thank 10you for your service to the Commission. It's great to 11 have you back.
12Okay. So is there anything that the Court 13Reporter needs? Are you set with names and everything 14 and -- so you're good? Okay.
15 And as Bhalchandra said, the transcript 16 will eventually be available online. Okay. So -- okay.
17MR. VAIDYA: And they will be part of the 18 supplement to the petition.
19 CHAIR SUBER: Okay. All right.
20MR. VAIDYA: And it may be -- it may be 21easier once we get the transcript, because a lot of 22 the information was shared, and our office may not 23 have completely --
24 CHAIR SUBER: Okay.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 36 MR. VAIDYA: -- so the transcripts do help.
1 CHAIR SUBER: Okay. So the presentation 2 that was given and was transcribed doesn't have to be 3 submitted. On the dockets already.
4MR. VAIDYA: Yeah. They have already 5 submitted the declaration and the -- actually, it has 6 been already added to -- agency-wide documents, it's 7in ADAMS and publicly available. And if you have 8checked your email, I have sent the email with the 9 accession number. So you have that.
10 So it is already -- the declaration is 11already in our -- our ADAMS system. PRB members don't 12 know the ADAMS number yet, but I will inform them 13 pretty soon.
14CHAIR SUBER: Okay. Great. So all lines 15 are clear, and everyone is great. Okay. Well, once 16 again, thank you for coming, and I believe that that 17 terminates the meeting.
18MR. VAIDYA: Yeah. With that, I think we 19can conclude the meeting. There is no other business 20 to discuss at this stage, I guess. Thank you again.
21 CHAIR SUBER: I don't have a gavel, so we--
22 (Laughter.)
23 (Whereupon, the abo ve-entitled matter went 24 off the record at 1:20 p.m.)
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433