ML13228A225
| ML13228A225 | |
| Person / Time | |
|---|---|
| Site: | Haddam Neck, Yankee Rowe, Maine Yankee |
| Issue date: | 07/15/2013 |
| From: | Fredrichs T, Simmons A, Simpson J Division of Inspection and Regional Support |
| To: | Mark Lombard NRC/NMSS/SFST |
| Lombard M | |
| Shared Package | |
| ML13227A348 | List: |
| References | |
| TAC L24538, TAC L24565, TAC L24566 NCP-2013-003 | |
| Download: ML13228A225 (23) | |
Text
Non-Co n cu r rence Proces s Record for NCP-2013-003 The U.S. Nuclear Regulatory Commission (N R C) strives to estab l ish and maintain an environment that encourages all employees to prompt l y raise concerns and differing views without fear of reprisal and to promote methods for raising concerns that will enhance a strong safety culture and support the agency's mission. Individuals are expected to d isc uss t h eir views and concerns with their i mmediate supervisors on a regu l ar , o n going basis. I f i n forma l di scussio n s do n ot reso l ve concerns, i ndividuals have various mechanisms for expressing and having their concerns and diffe r ing views heard and considered by management.
Management Directive MD 10.158 , " NRC Non-Concurrence Process ," describes the NonConcurrence Process (NCP). http://pbadupws.nrc.gov/docs/ML0706/ML070660506
.pdf The NC P allows emp l oyees to docume n t th e ir differing views and concerns ea r ly in the decision-making process , have them responded to , and attach them to p r oposed documents moving through the management approval chain. NRC Form 757 , Non-Concurrence Process is used to document the process. Section A of t h e fo r m inc l udes the pe r so n a l opi n ions , views, a n d concerns of an NRC employee. Section B of the form includes the personal opinions and views of the NRC employee's im mediate supervisor.
Section C of the form incl udes the agency's evaluation of the concerns and the agency's final position and outcome. NOTE: Content in Sections A and B reflects pe r sonal opinions and views and does not represent official factual representation of the issues , nor official rationale for the agency dec i sion. Section C includes the agency's official position on the facts , issues , and rat io nale for the final decision.
T he agency's off i cia l positio n (i.e., t h e doc u me n t th at was t h e s u bject of the no n-co n cu rr ence) is incl u ded in ADAMS Accession N umber M L 13098A21 0 This record has been redacted prior to discretionary release to the public.
I NRC FORM 757 NR C MD 10158 (7-20*, N O N-CONCURRENCE PROCESS SECTIO N A -TO BE BY NON-CONCURRING INDIVIDUAL U.S. N UCLEAR REGULATOR Y COW.M IS S ION" NCP TRACKING NUMBER NCP-2013-003
- TITLE O F SUBJECT DOCUMENT ADAMS ACCESSION NO. I REQUEST FOR EXEMPTION FROM I 0 CFR 50.3 8 REQUlREMENTS FOR Y Al\lJ<.EE COMP ANTES ML13098A21 0 DOCUMENT SIGNER Mark Lombard Divi sion Director NAM!:: OF N ON-CONCURRING n,D IVI!)UAL (S) Anncilcse Simmo n s, Thomas Frednchs*, J o Ann Simpson TI T:.<: Financial A n alys t s and SLS DOCUMENT AUTHOR DOCUMENT CONTRI B UTO R j ORG 1\NIZA-0:-1 P'1}1 1SS/SFST 'ORGA N IZATION NRR/DfRS DOCUMENT REVIEWER I REASONS FOR N ON-C ONCUR REN CE AND PR O P OSE D ALTERNATIVES 1 Sec Attachmen t A. *n on-concurred vin email SI GI\t;R P H ON[ r.;O 492-3300 PHONE NO 415-2791 I ON CONCURRE N CE CONTINU ED IN SECT I ON D , DATE ' ' -*--------:-:--:-=--:-::-::-::-
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! NRC FORM 757 17*201 1) Use ADAMS Template NRC.Q06 NRC FORM 757 U.S. NU C L EAR REGULA T OR Y CO MMI SS I O N NRC MD 10. 158 (7*2011)
NCP TRACK I NG NUMBER NCP-20 1 3-003 TITLE OF SUBJECT DOCUMENT ADAMS ACCESS lOt\ NO. Request for Exemption from I 0 CFR Yankee Facili t i es M LI3098A21 0 SECT I O N B -TO BE COM PLETED BY N ON-C ONC U RRI N G I NDIV I DUAL'S SUPERV I SOR r---NAME Russell Allwcin TITLE P HONE N O Acting BrJnch Chief 415-7417 ORGANIZATION NRRID IRS/IFID COMMENTS FOR THE NCP REVlEWER TO CONSIDER REQUI:.ST FOR EXEMPTION FROM 10 C FR 50.38 REQUIREYIENTS FOR YANKEE COMPAN I ES I agree "ith the RR t ech n i cal s t afTwh i cn docs not conc ur with the determination to approve the exemption request. The 1 MSS analysis supporting the exemption is prema tm e given the Commissio n guidance (SRM-SECY 0 16!!) to provid.: a fresh assessmen t of fo rei gn ownership.
con t rol : md domination (FOCD). I agree that t t fails to meet the r equirements of I 0 CFR 50.12 for exemption for the following r eason: The draft approval sta te s in. cc ti o n 3.3: "Additional l y. s ince FOCD re st ri c t ions are financia l ownership re stric tion s and arc nei th er technical nor operational requ i rements, grant i ng th e exemption have no bearing on the risk to public h ealth and s afety." This is inconsistent with the philosophy regarding FOCD reg ulat ions. FO C D reg ulati ons arc designed, by their very nature. to prohibi t foreign entities from contro ll i ng decisions th a t might affect safe t y."' This, in and of its elf ha s a d i rect beari n g o n risk to public hea lth and safe t y. Therefore the as se rti o n in the draft appears con tr adic t ory. Rcgardmg exemption requests, I 0 CFR 50.1 2(a)(2)(i i) that there must be "s pec i a l circums t a n ces" t o gran I the exemp t ion. There arc no specia l circ um sta nce s specifically app licable to the Yankees Companies and gcncra l liccnsc h o l ders , in thi s in stance. Since the basic p r emise of th e exemption request li es wi t h interpretation o f the language in th e Atomic Energy Ac t of whether an Independent Spent Fue l S t orage Installa t ions (ISF I) is a " prod u c t ion or u t ili£<ll ion faci lity ," thi s is germane t o aiiiSFSI's who still hold a Pa n 50 l ice n se. In essence this is legal i nterpre t ation or policy decis ion a nd no t an exemption to be gran t ed to a unique se t of licen sees. Redefinition of a "utili7.ation facility" for Part 50 exemptions may be a policy decision.
and at a minimum should be subject to a lega l r ev i ew a n d approval as it will set precedent.
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- 'v1Ll3098A210 SECTION C -TO BE COMPLETED BY DOCUMENT SPO NS OR NAME Mark Lo m bard I liLt: t-'HUNt: I'OV , D1vi s ion Director '3 0)-..2-f?" /* !5i? J SUMMAR Y OF I SSUES /) .J fcc J, .J??d ,...; C ACTIONS TAKEN TO ADDRESS NON-CONCURRENCE s
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I , I , ' Use ADAMS Templ a te NRC-006 NRC FORM 7 57 NRC MD 1!>8 PROC E SS U.S. NUCLEAR REGULATOR Y coM MI SSION NCP TRACKING NUMBER NCP-20 13-003 TITLE O F S UBJ EC T DOCUM U H ADAMS ACCESSI ON NO REQUE ST FOR EXEMPTION FROM 10 C F R 5 0.3 8 REQUT R EMENTS FOR YANKEE COW ANTES M L 13098A210 SECTIO N 0: CONTI N UATION PAGE CONT I NUAT IO N OF S E CT I ON A B c S EE SECTION E FOR IMPLEMENTATION G UI DANCE NRC fO RM 757 (7*2011) Use ADAMS Temp l ate N R C-006 Attachment A: N on-Concurrence 2013-003:
Exemption from 10 CFR 50.38 for the Yankee F aci lities NMSS intends to approve an exemption from the foreign ownership, contro l and domination (FOCD) prohibition of 10 CFR 50.38 for three Part 50 Li ce nsees. The NRR technical staff does not concur w i t h the dete rmin at ion. The NMSS analys i s support ing the exemption: o Is premature due to recent Commission guidance per SRM-SECY-12
-01 68 to prov i de a fresh assessment of FOCD o Is contrary to the AEA and current Commission guidance o Is contrary to NMSS Guidance o Is contrary to NOV issued for f ailure to comply with the FOCD requ i rements o Fa il s to meet the requirements of 10 CFR 50.1 2 for exemptions c Lac ks documentation and justification of novel , industry-proposed legal position o Lacks Transparency and is therefore inconsistent with the pr i nc i ples of sound regulation Recommendation:
- 1. The exempt i on request should be suspended because i ssuing an exemption before the Commission reviews SRM-SECY-12-0168 could limit the Commiss i on's flexibility to resolve foreign ownership i ssues. No exemption to FOCD should be issued prior to the Comm i ssion's resolution of the issues. The licensees are currently i n compliance , the burden of compliance is not significant , and compliance is necessary to ensure adequate protect i on of health and safety for the Yankee facilities. 2. The novel l ega l i nterpretat i on regarding
" ut ilization" fac i lities, proposed by the licensee as justification f or an exemption from their licensing basis under Part 50: a. should be subject to a full legal review and formal , documented in te rpretation by the NRC General Counsel b. sent to the Comm i ssion for approval as a new agency interpretation
- and c. if approved by the Commission , should be incorporated into new NRR and NMSS guidance and subject to notice and comment, cons i stent w i th NRC p roce dures.
Background:
T he Yankee Companies include three NRC licensees: Yankee Rowe , Maine Yankee, and Connecticut Yankee. These licensees are currently licensed under Part 50 , which qualify them for general licenses for ISFISis under Part 72.212. The Yankee reactors are fu lly decommissioned, and only ISFSis remain. As Part 50 licensees , they are required to comply w i th the FOCD requirements of 10 CFR 50.38 and section 1 03d of the Atomic Energy Act. Currently , foreign ownership, contro l and domination reviews for Part 50 are conducted by NRR/DIRS/IFIB by staff.
In 200 6, an i n d i r e c t 1: cense trans fe r was appro v ed with o ut i n forming the NRR technic a l staff staff; th i s resu l ted in 75% ul ti mate forei g n owne r ship , con t rol or domination , (FOCD) contrary to 1 0 CFR 50.38 a1d the Atomic Energy Act. I n 2010 , as part of anot h e r li cense t ransfer re v iew , the NRR t echnical s t aff iden ti f i ed the 7 5% f ore i gn ownersh i p. Pe r the re vi ew procedures approved by the Commiss i on i n the Standard Rev i ew Plan on Fore i gn O w ne rs h i p , Control and Do min ation , the staff r e v iewed add i tional i nformat io n and u l ti mate l y determined th a t the l i censee was 1) not in comp li anc e w ith 1 0 CFR 50.38 or the Atomic Energy A c t 2) would be re c uired to implement a negation act i on plan in order to meet t he requirements of 1 0 CFR 50.8 0 pr i or t o transfe r of the license. T h e staff cont i nued with the license t ransfer r ev i ew and s i multan e ousl y i n i tiated t he NRC en f o r ce m ent pro c e s s. Licen s e Transfer T he staff c o ntin u ed the l i cense t r ansfer revi e w. On April 20 , 2011 (M L 1111 01402), the staff request e d additional in f orma t ion (RA I) from MYAPC and requ e sted MYAPC to submit a negation acti on p l an to negate t he FOCD or take a c t i on t o remove the FOCD , t o restore comp l iance w it h 1 0 CFR 50.38. On May 1 6 , 20 1 1 , the licensee res p o n ded to the RAI (ML 11139A088) acknowledged the fore ign o wner s h i p and stated t hat estab l ishing a neg a t io n action plan would result i n undue hardsh i p t o the licensee and shareholders. In lieu of submitti ng a negation action pla n an d resto r i n g compli a n c e w i th NRC regu l ations , the licensee r eq u ested an ex em pti on f r om the FOCD requirements i n 10 CFR 50.38. The st a ff det e rmi n ed tha t the Yankees wou l d need to be in comp li an c e before a transfer cou l d be approved per 10 CFR 50.8 0 and concluded its safety e v aluatio n , co nd it ioning the l i cense transfer on i mplementat i on of a negation ac ti on plan b y t he Y ankee board (M L 1132 7 0 1 2 7). The staff determ i ned that the e x emption would be d i spos i tioned separately. On Decembe r 2 1, 201 1, as supp l emented April 24, 2012 , the Y a nk ee licensees submitted letters to the NRC (ML 11364A053 and ML 12 1 25A042}, s t at in g tha t i t had imp l emente d a Negation Action P l a n by adop ti ng a Board of D ir e ctor s Resolution to ens u re complia n ce w i th Section 1 03d of t he AEA and 10 CFR 50.38. The B oard of D i recto r s Resol u tion was passed o n Decembe r 1 4 , 20 11. Ap p ro v a l o f the transfer was pub li shed i n F ederal Reg i ster on January 2 , 2012. En fo r ce ment Pro c e s s An E nforcement Panel , composed of NMSS , OE , NRR and OGC was convened to process the apparent v i olati o n. The NRR techn i cal staffs position was that a s h o lders of Part 50 l i c enses , t he Yankees we r e requ i red to be i n c ompli a nce w i th Part 50 , they had been aware of the regula ti ons and h ad fa il ed to ensure comp li a nce since 2 006. The Yankee licensees' posit i on was tha t the y w e re e x empt from t he requireme n ts of 10 CFR 50.38 because they w ere no l onger " ut i lization" faci l i t i es. T he licensee's posit i on was discussed and ult i ma t e l y rejected by th e agency enforcement pane l. Specificall y , the panel agreed that Part 50 l i censees are subjec t to t h e req u i r ements of Part 50 , t hat the " ut il izati o n" a r gument had no legal precedent and was like l y a po l icy issue. The pane!
d i scussed the issues related to ISFSis with Par. 72 vs. Part 50 licensees , but ultimate ly decided to i ssue an NOV, consistent with the NRC po li cy because. 1. The apparent violation was identified by the NRC staff; the licensees were aware of the requ i rements and failed to remain in conpliance. 2. The licensee's justification regarding their status as a " non-utilization , Part 50" license holder had no legal precedent , was either a Commission policy decis i on , or should be addressed in a broader analysis of ISFSI l i cens i ng issues to avoid ad-hoc decisions. 3. The flex i bility of negation action plans, and the fact that the Yankees came into compl i ance to obtain their transfer approval indicated that compliance was not unduly burdensome. The enforcement panel issued a not i ce of violation January 27, 2012 citing the Enforcement policy and Level 4 violation since the FOCD was discovered by the NRC staff. The letter stated that the Ya nkees , as Part 50 licensees , needed to comply with 10 CFR 50.38. NRC (NMSS) issued confirmatory orders on June 4 , 2012 (ML 12124A373). The Yankees contested the violation and on 9 , 2012, and in response NRC stated: (ML 12226A232)
- That Yankee A t omic is no longer authorized to operate an electric power production facility does not relieve it of the applicable 10 CFR Part 50 license requirements , including the FOCD requirements of 10 CFR 50.38. NMSS and OGC further adv i sed that the exemption be denied. At the request of NMSS , NRR t echnical staff prepared the exemption denial per the requirements of 50.12. Senior Management Involvement and Change in Position In discussions w i th the Enforcement Panel , OGC indicated they would support the denial. Later , i n November 2012 , an OGC staff attorney informed NMSS that they would not give an NLO until OGC was able to brief DEDO Mike Weber on pros and cons of denying the exemption. OD Cathy Hane y subsequently directed her Div i sion Director , Mark Lombard, to engage OGC to (1) get their NLO for the denial (2) determine if the Weber briefing is the result of h i gh-level drop-ins , and (3) arrange briefings with Office Directors before briefing Mike Webber. On November 19 , 2012 , NRR staff attended a briefing for DEDO (Weber) by OGC. NMSS staff , i ncluding the Div i sion Director , Mark Lombard a t so attended. In the briefing OGC stated that OGC cou l d support either an exemption or a den i al. Mark Lombard stated that NMSS intended to deny the exemption. The NRR staff completed the draft exemption denial as agreed on November 19 and received an NLO (emai l from John Goshen dated December 12 , 2012). On or about February 14 , 2013 , Mark Lombard requeste d another meeting with NRR technical staff to understand their views on the exemption request. He indicated that OGC had conducted a subsequent briefing of the DEDO, (without NRR) and that Mark Lombard had dec i ded to a ll ow the e x emption. After the meet i ng , NMSS drafted the memo approving the e x emption on the bas i s that t he Yankee facilities are no longer utilization facilities. The Exemption would Resul t in Fewer Pr o tections to Health and Safety The fore i gn ownership prohibition covers all NRC licensed activities, including financial activities which may impact decommission i ng. NRC guidance also states that special nuclear ma t erial must be c ontrolled by U.S. citizens. An exempt i on to the requirements would prevent the NRC from ensuring that special nuclear material remains in U.S. control. There is amp l e basis to require the Yankee licensees to ma i ntain FOCD compliance via the current board resolution to ensure that NRC l icensees are properly insulated from the foreign parent and that act i ons taken by the foreign parent have no impact on public hea l th and safet y. Negation action plans i nsulate licensees from foreign parent companies for all l i censed act i v i ties to ensure public health and safety. For example , foreign ent i ties often do not file financial reports w i th the Securities and Exchange Commission , and thus prevent the staff from readily monitoring the financ i al status of parent companies. The r efore , negation action plans are also a protection against a foreign parent draining assets from a licensee. The State of Maine imposed such conditions on Ma i ne Yankee after its 2006 acquisition by l berdro l a (the acquisition that was not reviewed or approved by the technical staff). On November 28 , 2012 Standard and Poor's assessed lberdrola's financial risk as " significan t" due to sovereign debt issues in Spain , and downgraded its credit rat i ng. Central Ma i ne Power filed a petition with State of Ma i ne to intervene
- 1) to ensure that lberdrola may not i ncrease its equity position (and control) over Central Maine Power and 2) to ensure that foreign owner ma y not pull assets from CMP to cover its debt. This is relevant to the Yankee companies , since the staff ident i fied a potential decomm i ssioning funding shortfall for Connecticut Yankee in 2011. The board resolution provision of the FOCD requi r ements must remain in place to ensure continued insulation from the foreign parent. NMSS Guidance was not followed NMSS failed to f ollow i ts own guidance in reviewing the foreign ownership, control and domination of the Yankees. Specifically , NUREG-1556 , Vol. 15, "Co n solidated Guidance About Materia l s Licenses: Program-Specific Guidance About Changes of Control and About Bankruptcy I nvolv i ng Byproduct , Source , or Special Nuclear Material Licenses," p. 5-2 , November 2000 , states: In the area of mater i als licensing , there are no categorical foreign ownership , control, or domination lim i tations. However , under Sections 57c, 63b , a nd 82b of the AEA, NRC must make a f i nding that i ssuance of the license for special nuclear material , source mater i al , or byproduct material wou l d not be " i nimical to the common defense and security , and would not constitute unreasonable risk to the health and safety of the public." The Comm i ssion must make the same finding when consenting to a change of control. As a part of that determination, NRC will con s ider foreign ownership , cont r ol, and domination
..... Although NRC has never adopted any expl i cit criteria for determining whether a part i cular transaction will be " inimical to the common defense and security ," the Commission has historically focused on a relationship between a potential licensee and other entities involve d in the tra nsaction that could lead to the ultimate power of a foreign entity to direct the actions of the licensees with regard to licensed activities. In the area of materials licenses , i nd i rec t control by a foreign entity of 100 percent of the licensee may be permissible , provided insulation measures are taken to protect the nat i onal secur i ty. Such measures include , but are not limited to , managemen t directives shielding directors o r board members from decisions inv o lving classified or secret inf ormation , or from the management or control of special nuclear material. A n exempt i on app ro val would f a il to ensure that s uffi cie n t measures insulating NRC licensed activi ti es f rom the foreign entity will be i n place, including protecting the licen sees' finances frc m the fc'e ign entity , and ensu r ing that spec i al nuclear material is controlled by U.S. citizens ,
w i th the statute , NRC regulations and both N R R and NMSS guidance. The Approval Does not Provide a Basis for the Exe mption The NMSS review does not provide a basis for an exemption from Part 50. Instead , the exemption approval only discusses Part 72. The exemption request does not expla i n the change i n agency position reflected in the confirmatory or ders that the Yankees were not exempt from FOCD requ i rements. Nor does the exemption explain how it will impact the agency-issued confirmatory orders. The grant of the exemption is based on SECY-78-378. This SECY paper was prepared for a proposed rule , not the fi nal rule , so the SECY does not have precedential value in granting an exemption to the final rule. 10 CFR 50.1 states that " The regulations in this part are promulgated by the Nuclear Regulatory Comm i ssion ... t o provide for the licensing of production and ut i lizat i on facilities
." Consequently , i f the Yankees wish to claim they are not production
& utilization facilities , then they are not eligible to hold a Part 50 license. Without a Part 50 license , they a re no longer eligible to hold a Part 72 general license. In order to store spent fuel , the Yankees must obtain a specific Part 72 license. Th i s wou l d , however , relieve them of the FOCD burdens of Part 50 , since Part 72 has no such restrictions. Once the Part 72 specific license is obtained , the Part 50 license may be terminated. Redefinition of a " utilization facility" for Part 50 exemptions may be a policy dec i sion, and at minimum should be subject to a legal review and appro val as it will set p recede nt. Also , this l egal position introduces several other issues: o Exempting Part 50 licensees from specific requirements makes the l icensing basis even more inconsistent with Part 72 requirements. Which of the other Part 50 requirements may allow for exemption based on proposed leg a l interpr e tation? o Part 50 is the license for production and utilization facilities. If a facility is ne ither of those , how can it hold a Part 50 l i cense?
o The m oment a licensee i s no l onger a utilization facil i ty w i ll i t be e x empt from Part 5 0 requirements
? Which requ i rements? How will this affect the other Part 50 l ic ensees? The Exemption Process was Contrary to NRC Principles of Good Regulation There is significant stakeholder interest in the lice nsees. Multiple NGOs attended the Yankee License transfer publ i c meet i ng. The State of Maine also has conditioned previous transfers regarding Maine Y an k ee's ownership by a foreign entity and discussed these issues regard in g the 2010 license transfer with the NRC staff. The NRC pub li c docket regarding the Ya nkees' fore i gn ownership , control and domination , including staff correspondence , safety evaluation findings and enforcement action demonstrate objective , unbiased assessments of all information , are documented with reasons expl i cit l y stated and consistent with the statute , NRC r egulat i ons and public guidance. T he proposed exempt i on to foreign , ownership , control and dom i nation requ i rements , would fa il to prov i de any i ns i ght as to a signif i cant change in agency pos ition. The proposed exempt i on has no documented l ega l basis for an exemption from the statute (beyon d an apparent wholes a le acceptance o f a v i olative licensees' asserted l egal pos i t i on), no rat i ona l e for a change i n agency position , and no opportu ni ty for other stakeholders , pub li c or State i nput to the NRC regarding a s i gn i ficant change i n agency position regarding foreign ownership.
Attachment C: Response to NCP 2013-003 Non-Concurrence Process (NCP) 2013-003 states that NMSS intends to approve an exemption from the foreign ownership , control and domination (F OCD) prohibition of 10 CFR 50.38 for three Part 50 Licensees. The Office of Nuclear Reactor Regulation (NRR) technical staff does not concur with the determination.
Accord i ng to NCP 2013-003, the Office of Nuclear Material Safety and Safeguards (NMSS) analysis supporting the exemption: 1. Is premature due to recent Commission guidance per SRM-SECY-12-0168 to prov i de a fresh assessment of FOCD 2. Is contrary to the Atomic Energy Act (AEA) and current Commission guidance 3. Is contrary to NMSS Guidance 4. Is contrary to the Notice of Violation (NOV) issued for failure to comply with the FOCD requirements
- 5. Fails to meet the requirements of 10 CFR 50.12 for exemptions
- 6. Lacks documentation and justificat i on of novel, industry-proposed legal position 7. Lacks transparency and is therefore inconsistent with the principles of sound regulation Responses to these points in the NCP are as follows: 1. Is premature due to recent Commission guidance per SRM-SECY-12-0168 to provide a fresh assessment of FOCD In SRM-12-0168 , the Commission instructed the staff to " provide a fresh assessment on issues relating to foreign owners h ip." The limita t ion on F OCD stems from Section 1 03d of the Atomic Energy Act (AEA), which re l ates to production and utilization facilities. It is unlikely that the staffs response to the SRM will address the factual situation presented by this exempt i on request because i t will likely focus on FOCD at the construction/operation phase. T he licensee requesting the subject exemption is similar to a Part 72 licensee and there is no prohibition on FOCD for Part 72 specific licensees. Notwithstanding , the Commission request does not presuppose any particular outcome. The request also does not contain a n y directive or suggestion for t he staff to cease review of FOCD matters before it or to not take licensing actions involving FOCD issues until the "fresh assessment" is complete. In the absence of such direction, NMSS is acting according to the Commission
's policy to not delay the decision in this matter unnecessarily. Review of the exemption req u est needs to stand on its own merits based o n staff rev i ew. I n addition, the SRM applies to an initial licensing matter involving 100% f oreign ownership of a nuclear power plant. The NMSS case involves an exemption request for an ISFSI that is partially foreign owned. Therefore , there is very little similarity.
And, as discussed below , this matter does not involve a new or different interpretation of the statute, regulations, or guidance. Therefore, granting the exemption is not premature relative to actions that may be taken in accordance with the SRM. 2. Is contrary to the AEA and current Commission guidance Granting the exemption is not contrary to the AEA or Commission guidance. The AEA, specifically, Sections 1 03d and 1 04d, pro h ibits the issuance of a l i cense to an entity if the Commission knows or has reason to believe that is owned , controlled or dominated by a foreign entity. Those sections are applicable to production or utilization facilities. The Yankee facilities are stand-alone ISFSis. Therefore , there is no statutory barrier to granting the exemption from 10 CFR 50.38. 1 Part 72 specif i c licensees are not required by the pertinent regulations to comply With FOCD and promulgation of the related requirements was not contrary to the AEA. Therefore , approval of a FOCD exemption for a Part 72 general licensee would also not be contrary t o the AEA , especially since the subject Yankee sites are no longer production or utilization facilities.
There is no public health and safety or common defense and security reason to treat these similarly situated licensees differently.
As stated in the response to number 1 above , the action is not contrary to Commission guidance. 3. Is contrary to NMSS Guidance As pointed out in the NCP discussion, NMSS guidance says the NRC will consider fore i gn ownership , control and domination (FOCD) and that there are no categorical FOCO limitations. FOCD was considered i n the review and found not to be a matter of concern. 4. Is contrary to NOV issued for failure to comply with the FOCD requirements The notice of violation (NOV) was issued because the licensees did not meet NRC requirements in force at the time. Nor had t h e licensees requested an exemption from 10 CFR 50.38. They were therefore in violation of 10 CFR 50.38 at that time. The Office of Enforcement (OE) confirmed that prior issuance of an enforcement action should not affect a decision to disposition an exemption request. OE noted that the NOVs issued to the Yankee facilities remain valid citations because a violation existed at that time and the exemption cannot and would not be given retroactive effect. Issuance of an NOV does not preclude modification of any requirements at a later date. Therefore, granting the FOCD exemption is not contrary to the previous NOV. 5. Fails to meet the requirements of 10 CFR 50.12 for exemptions The NCP did not provide specifics regarding this point. However , the NMSS analysis of the exemption request did consider the pertinent aspects of 10 CFR 50.12, including the specia l circumstances in Section (a)(2), as well as the AEA in the associated Safety Evaluation Report (SER) and found that the app l ication satisfied these requirements. 6. Lacks documentation and justification of novel, industry-proposed legal position It is unclear what the basis is for this point in the NCP. The position taken by NMSS in granting the exemption is not novel. It is based on an analysis of a particular factual situation as it relates to the regulations and the AEA. Furthermore, the Commission reviewed this topic in the 1970s when considering ru l emaking for ISFSis and determined to promulgate the specific license requirements in Part 72 without FOCD limitations after they were determined to not be necessary.
In deciding whether to promulgate Part 72 , the Commission considered an option of amending Part 50 to " define an ISFSI as a utilization facility and to cover the specific activity of storage of spent fuels in an ISFSI" (see Alternative 4 in SECY 78-378 , "LICENSING OF SPENT FUEL STORAGE IN AN INDEPENDENT SPENT FUEL STORAGE INSTALLATION
", dated July 7, 1978). One of the reasons in this SECY for not opting to amend Part 50 was: "Under the Atomic Energy Act, a 'utilization facility' is defined as equipment or devices 'capable of making use of special nuclear material.' Defining an ISFS I, which is for storage only , as an 'utilization facility' may be questionable
." The Commission , rather than opting to amend Part 50, approved the option of promulgating Part 72 and not require that specific licensees meet FOCD requirements (see Staff Requirements Memorandum M780831 D , dated September 8 , 1978). Thus, the 2 Commission was aware of the possible problem of regulating a non-utilization facility under Part 50 back in 1978. 7. Lacks transparency and is therefore inconsistent with the principles of sound regulat i on Granting the subject exempt i on request is consistent with the principles of good regulation as the SER and associated letter will be made public. Other activities to engage the public prior to the action being taken are not required due to the nature of the action. Granting this exemption is also consistent with the principle of Effi ciency since it is consistent with the requirements for specific licenses which are not production or utilization facilities like the subject Yankee ISFSis. The action also reduces unnecessary regulatory burden. To briefly address other points raised in the NCP but not identified in the "Issue" section: The NCP states that in 2006 an indirect transfer was approved resu lt ing in 75% foreign ownership of the Yankees and the NRR technical staff was not informed of the transfer or made aware of this until 2010. However, this statement is not entirely correct. The 2006 transaction did not involve a 75% transfer. In fact, whi l e Maine Yankee was 74% foreign owned, Yankee Rowe was only 44% foreign owned and Connecticut Yankee 26% foreign owned. The foreign ownership happened incrementally with the transfer in 2006 being the last of several transfers. Several of the transfers, including the 2006 transfer, did not require NRC consent because they did not reach the 1 0 CFR 50.80 threshold. The exemption request was fully reviewed by the Office of the General Counsel, including the Acting General Counsel at the time of its development and was found to have a sound legal basis. It is not required to send this topic to the Commission for approval as the agency has already made this interpretation and decision for specific licenses that store high level waste simi l ar to the Yankees. The decision involves no change of policy or new inte rpretation of the statute or regulation
- s. Since specific licensees with similar material do not require FOCD limitations, denying the subject exemption is not required to ensure adequate protection of public health and safety. While I was under a different impression previously, I confirmed there was not a meeting between Mike Weber and OGC without other offices represented.
A meeting was held with NRR staff to discuss the possibility of granting the exemption request. While a handful of concerns were discussed , it was not evident that these concerns rose to the level of a non-concurrence on the letter if it were processed. No other meetings or discussions were held on the top i c of non-concurrence prior to that requested by me after I received the NCP package. FOCD limitat i ons do not apply to all NRC licensed facilities as discussed above. The SER for the subject letter to grant the exemption does address Part 50 and AEA requirements. There is no effect on the previously-issued confirmatory orders as they were based on requirements in force at t he time. 3 There is no redefinition of utilization facility involved in granting this exemption.
It does involve treating the Yankee I SFSis the same as specific license ISFSis which are also not production or utilization facilities.
Exempting the Yankees from FOCD does not also exempt them from other Part so requirements.
If that were desired, the Yankees would have to submit exemption requests for them separately. Our regulations allow the NRC to determ ine if specific regulations apply or do not apply. An example is the recently issued exemptions to 10 CFR 73.55 requirements for ISFSis. Based on my assessment of all available information as well as a meeting with one of the individuals who signed the non-concurrence, I have decided to grant the requested exempt i on to the Yankee sites. 4 Lombard, Mark From: Simmons , Anne li ese Sent: Monday , August OS , 2013 9: 34 AM To: Cc: Lombard, Mark; Fredrichs , Thomas; S im pson , JoAnn; Allwein , Russell Sewell , Margaret; Pedersen , Renee; Nieh , H o
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RE: Response to NCP 2013.doc x No problem , th a nk you. From: Lombard, Mark Sent: Monday , Augu st OS, 2013 8:08AM To: Fredrich s , Thomas; S imp son, J o Ann; Allwein , Russell Cc: Sewe ll, Margaret; Pedersen, Renee; Ni e h, Ho; S immon s, Annelie se
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RE: Response to NCP 2 01 3.do cx Tom , JoAnn, and Russ , Do you have a concern if the NCP is pub l ic and your names are re l eased with it? Pl ease l et me know by COB tomorrow. Th ank you , Mark From: Sim mon s, Ann e li ese Sent: Wednesday , July 17 , 2013 9:00AM To: Lomba rd, M a rk; Fredrichs, Thoma s; Sim p son, JoAnn Cc: Sewell, Margar e t; P e d e r se n, Renee; Ni eh, Ho; Allwein, Ru sse ll
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RE: Response to NCP 2013.docx I have no problem with this. Thank s. From: Lombard, Mar k Sent: Wednesday, J uly 17, 2 013 8:48AM To: S imm o n s, Ann el i ese; Fredrich s, Thomas; Simpson, JoAnn Cc: Sewell, Margar et; P ede r sen, Rene e; Nieh , Ho; Allwein, Russell
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RE: Response to NCP 2 01 3.d ocx PS-is there any reason not to make the NCP package available to the public in ADAMS? I want to make sure you all are comfortable with me doing so. Thank you, Mark From: Lombard , Mark Sent: Friday , July 12, 2013 3:33 PM To: Simmons, Annelie se; Fredrich s, Thomas; Simpson, JoAnn Cc: Sewe ll , Margar et; P ede r se n, Renee; Nieh , H o; Allwein, Ru sse ll
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Response to NCP 2 013.doc x 1 Lombard, Mark From: Allwein , Russell Sent: To: Monday , August 05, 2013 9: 22 AM Lombard , Mark
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RE: Response to NCP 2013.docx Mark , I have no concern. Ras4'ell Russell Allwein, Chief Budget Operations Branch 1/DPB Office of the Chief Financial Officer U.S. Nuclear Regulatory Commission (3 01) 415-7417 From: Lombard, Mark Sent: Monday, Augu st 05, 2013 8:08 AM To: Fredrichs, Thomas; Simpson, JoAnn; Allwein , Russell Cc: Sewell, Margaret; Pedersen , Renee; Nieh, Ho; Simmo n s, Annelie se
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RE: Response to N CP 2013.docx Tom , JoAnn , and Russ , Do you have a concern if the NCP is public and your names are released with it? Please let me know by COB tomorrow.
Th ank you , Mark From: Simmons, Anneliese Sent: Wednesday, July 17, 2013 9:00AM To: Lo mbard, Mark; Fredrichs, Thoma s; Simpson, JoAnn Cc: Sewe ll , Marga r et; Pedersen, Renee; Nieh, H o; All wein, R u sse ll
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RE: Response to NCP 2013.docx I have no problem with this. Thanks. From: Lombard, Mark Sent: Wedne s day, July 17, 2013 8:48AM To: Simmo n s, Annelie se; Fredrich s, Thomas; S imp so n , JoAnn Cc: Sewell, Margaret; Pedersen, Renee; Ni e h , Ho; Allwein, R u sse ll
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RE: Response to NCP 2013.docx PS-is there any reason not to make the NCP package available to the public in ADAMS? I want to make sure you all are comfortable with me doing so. Thank you. 1 Lombard, Mark From: F redrichs , Thoma s Sent: Monda y , August 05 , 2013 9: 34 AM To: L omba rd , Mark; S imp so n , JoAnn; Allwein , Ru sse ll Cc:
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Sewell , Margaret; Pedersen , Renee; Nieh , Ho; Simmo n s , Anneliese RE: Response t o NCP 2013.docx It's OK to release to the publi c. From: Lombard , Mark Sent: Monday, August 05 , 2013 8:08 AM To: Fredrichs , Thoma s; Simpson, JoAnn; Allwein , Russell Cc: Sewe ll , Margaret; Pedersen, Renee; Nieh, Ho; Simmons , Anneliese
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RE: Response to NCP 2013.docx T om , J oAnn , a n d Ru ss , D o you have a concern if the NCP is public and your nam es a r e released with it? Pl ease let me know by CO B tomorrow. Th ank you , Mark From: S immon s, Annelie se Sent: Wednesday, July 17, 2013 9:00AM To: Lombard, Mark; Fredrich s, Thoma s; Simpson, JoAnn Cc: Sewell , Margaret; Peder sen, Renee; Nieh, H o; Allwein, Rus se ll
Subject:
RE: Re s ponse to NCP 2013.doc x I have no problem with this. Thanks. From: Lombard , Mark Sent: Wednesday, July 17 , 2013 8:48AM To: Simmons, Anneliese; Fredrichs, Thomas; Simpson, JoAnn Cc: Sewe ll , Margaret; Peder se n , Re ne e; Nieh, Ho; Allwein, Russell
Subject:
RE: Response to NCP 2013.docx PS-is there a ny reason not to make th e NCP package available to the public in ADAMS? I want to make sure you all are comforta bl e with me doing so. Th ank you , Mark From: Lombard, Mark Sent: Friday , July 12, 2013 3:33 PM To: Simmons, Annelie s e; Fredrich s, Thomas; Simpson, JoAnn Cc: Sewe ll , Margaret; Pedersen , Renee; Nieh, Ho; Allwein, Rus se ll
Subject:
Res pon se to NCP 2013.docx 1
Lombard, Mark From: Simpson , JoAnn Sent: To: Wednesday , August 07 , 2013 8: 52 AM Lombard , Mark
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RE: Response to NCP 2013.doc x Mark , I don't have a concern with this. Regard s, Jo From: Lombard, Mark Sent: Monday, August OS , 2013 8:08 AM To: Fredrichs, Thomas; Simpson, JoAnn; All wei n , Russell Cc: Sewell, Margaret; Pedersen, Renee; N ieh, Ho; Simmons, Anneliese
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RE: Res pon se to NCP 2013.do cx Tom , JoAnn, and Russ , Do you have a concern if the NCP is publi c and your name s are re l eased wi th it? Pleas e let me know by COB tomor row. Thank you , Mark From: Simmons, Anneliese Sent: Wednesday, July 17, 2 013 9: 00AM To: Lombard, Mark; Fr e dr ichs, Thomas; Si mp son, JoAnn Cc: Sewell, Margaret; Pedersen, Renee; Ni eh, Ho; Allw ei n , Russell
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RE: Response to NCP 2013.doc x I have no probl e m with t hi s. Thanks. From: Lomb a rd, Mark Sent: Wednesday, Ju l y 1 7, 2 0 13 8: 4 8 AM To: Simmons, Annel iese; Fredrichs, Thoma s; S imp son, JoAnn Cc: Sewell, Margaret; Pedersen, Renee; Nieh , Ho; Allw ein, Russell
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RE: Res pon se to NCP 2013.docx PS-is there any reason not to make the NCP package available to the public in ADAMS? I want to make sure you all are comfortable with me doing so. Th ank you, Mark 1 Lombard, Mark From: S immon s , Anne li ese Sent: Frida y , August 09 , 2 013 10:49 AM To: Cc: Lombard , Mark; Allwein , Russe l l; S imp so n , J oA nn; Fredrichs , Thom as Peder sen , Renee; Sewe ll , Margaret
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RE: ca n yo u ple ase se nd me the or igin al NCP pa ckage back? T h a n ks , Mark Th anks , I sti ll intend to non-concur. From: Lombard, Ma rk Sent: F ri day , Augu s t 09, 2013 10:38 AM To: Simmons, Ann e li ese; Allwein , Russell; Simp s on, J oA nn; Fredrich s, Thoma s Cc: Pedersen , Renee; Sewe ll , Margaret
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FW: can you pl ease se nd me the original NCP package back? T h a nk s , Mark I apologize but I neglected to ask you all whethe r you st ill wan t to non-concur on the lette r g r anting the e x emption to the Yankees. Pl ease l et me know by August 14 , 20 1 3 , whether you still intend to non-concur or if you changed your mind t o concu r on the letter. Thank you, Mark From: Sewe ll, Margaret Sent: Tu es d ay, July 30, 20 13 3:37 PM To: Lombard, Mark
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RE: can y ou please sen d me the original NCP packag e back? T hank s, Mark Mark , I combined al l 3 sections into a PDF document (attached). I'm also attac hing my 7/24 ema il to Anneliese requesti ng s h e se nd back the o r igina l form to you , but I haven't heard back from her ye t. H ave you? Thanks , Marge From: L omba rd , Mark Sent: Tuesday , July 30, 2013 12: 43 PM To: Sewell, Margaret
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ca n yo u plea se se nd me the original NCP package back? Thanks , Mark 1 Lombard, Mark From: Sent: To:
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My non-concur stands. Ru sse ll Allwein , Chief Allwein, Ru sse ll Frid ay , August 09 , 2013 11: 16 AM Lombard , Mark RE: can yo u p l ease se nd m e the or iginal NCP pa ckage back? T han ks , Mark Budget Op erat i ons Branch 1/DPB Offi ce of the Chief Financial Officer U.S. Nuclear Reg ul atory Comm i ss i on (301) 415-7417 From: Lombard, Mark Sent: Friday, Augu s t 09 , 2 013 10:38 AM To: Simmons, Anneliese; Allwein , Ru sse ll; Simpson, JoAnn; Fredrichs, Thoma s Cc: Pedersen , Renee; Sewe ll , Margaret
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FW: can you please send me the original NCP package back? Thanks, Mark I apologize but I neglected to ask you a ll whether you s till want to non-concur on th e l etter grant in g the exemptio n to the Yan k ees. Pl ease l et me k no w by August 14 , 2013 , w heth e r you st ill in tend to non-conc ur or if you cha n ged your mind to concur on the letter. Thank you , Mark From: Sewell, Margaret Sent: Tue sd ay , July 30, 2 013 3: 37PM To: Lombard, Mark
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RE: can you plea se se nd me the original NCP package back? Thanks , Mark Mark , I combined a ll 3 sectio n s into a PDF document (a ttached). I'm a l so attaching my 7/2 4 email to Ann e li ese r equesti ng s h e send ba ck the original form to you , but I haven't h ea rd ba c k from her yet. Have you? Th anks, Marge From: Lombard , Mark Sent: Tuesday, Ju l y 30, 2013 12:43 PM To: Sewell, Margaret
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ca n you please se nd me the original NCP package back? Thank s, Mark Lombard, Mark From: F red rich s , Thom a s Sent: Frida y , August 09 , 2013 2: 1 2 PM To: Cc: Lombard , Mark; Simmons , Anneliese; Allwein , Russell; Simpso n , J oAnn Ped e r se n , Rene e; Sewe ll , Margaret
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RE: can you ple ase se nd me the original NCP package back? Thank s, Mark I also st ill intend to non-co n c ur From: Lombard, Mark Sent: Friday, August 09, 2 013 11:13 AM To: Simmons, Anneliese; Allwein, Russell; Simpson, JoAnn; Fredrichs, Thomas Cc: Pedersen , Renee; Sewell, Margaret
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RE: can you please send me the original NCP package back? Thanks, Mark Thank you for your reply. From: Simmon s , Annelie se Sent: Friday, August 09, 2013 10: 49 AM To: Lombard, Mark; Allwein, Rus s ell; Simp s on, JoAnn; Fredrich s, Thomas Cc: Peder s en, Renee; Sewell , Margaret
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RE: can you plea se send me the original NCP packag e back? Thanks, Mark Tha nks , I still intend to non-concu r. From: Lombard , Mark Sent: Friday, Augu s t 09, 2013 10:38 AM To: Simmons , Anneliese; Allwein, Russell; Simpson , JoAnn; Fredrich s, Thomas Cc: Pedersen , Renee; Sewell, Margaret
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FW: can you please se nd me the origina l NCP package back? Thanks, Mark I apologize but I n eg l ected to ask you all w he ther you s till wa nt to n on-conc ur o n the l ette r granting the exemp ti on to the Ya nk ees. Pl ease let m e know by August 14 , 2013, whether you sti ll inten d to non-concur or if you cha n ged your mind to co ncur on th e l etter. Thank you, Mark From: Sewell, Margaret Sent: Tue s day , July 30, 2013 3:37 PM To: Lombard, Mark
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RE: can you please se nd me the original NCP package back? Thanks , Mark Mark, I combined a ll 3 sec t io ns i nto a PDF document (attached). I'm also attaching my 7/24 email to Anneliese requesting s h e se nd back the o rigin a l form to you , but I haven't heard back from her yet. H ave you? Th anks, Marge 1 Lombard, Mark From: Simpson, JoAnn Sent: To: Thur sday , August 15 , 2013 8: 01 AM Lombard , Mark; Sewell , Margaret
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RE: can you please send me the original NCP package back? Thanks , Mark Good Morning , Yes I do. Regards , Jo From: Lombard, Mark Sent: Thursday, Augu st 15, 2013 7:41AM To: Sewell, Margaret Cc: Simpson, JoAnn
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RE: can you please se nd me the original NCP package back? Thanks, Mark That is not the question I was looking to get answered. It was whether JoAnn still wants to non-concur. From: Sewell, Margaret Sent: Wednesday, August 14, 2013 2:56PM To: Lombard, Mark Cc: Simpson, JoAnn
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RE: can you please send me the original NCP package back? Thanks , Mark Mark , Maybe this will help (attached). Marge From: Lombard, Mark Sent: Wednesday, August 14, 2013 2:52PM To: Simpson, JoA n n Cc: Sewell, Margaret
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FW: can you please send me the origina l NCP package back? Thank s, Mark JoAnn , I may have misplaced your reply to my question below. I f you sent it can you please re-send it to me? Thanks , Mark From: Lombard, Mark Sent: Friday, August 09, 2013 10:38 AM To: Simmons, Anneliese; Allwein , Russell; Simpson, JoAnn; Fredrichs, Thomas 1