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