IR 05000528/2010009

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March 26, 2010

EA-2010-039 Randall K. Edington, Executive Vice President, Nuclear and Chief Nuclear Officer Mail Station 7602 Arizona Public Service Company P.O. Box 52034 Phoenix, AZ 85072-2034

SUBJECT: NRC INSPECTION REPORT 50-528/10-09; 50-529/10-09; 50-530/10-09; 72-44/07-01

Dear Mr. Edington:

A routine inspection of storage and loading operations at the Palo Verde Nuclear Generating Station (PVNGS) Independent Spent Fuel Storage Installation (ISFSI) was conducted on February 23-25, 2010. At the conclusion of the inspection on February 25, 2010, an exit briefing was conducted with Mr. Robert Bement, Vice President of Nuclear Operations, and other members of your staff. The enclosed report presents the scope and results of that inspection.

The inspection was an examination of activities conducted under your licenses as they relate to safety and compliance with the Commission's rules and regulations and with the conditions of your licenses. Within these areas, the inspection included reviews of loading operations; a tour of the ISFSI; fuel inventory and selection; ISFSI operation; quality assurance; radiological controls; records and safety reviews conducted by your staff.

The NRC has determined that a potential violation of 10 CFR Part 72, Subpart K, was identified involving changes you made to conditions of your general license to store spent fuel issued pursuant to 10CFR72.210. These changes involved your action to apply conditions contained in Certificate of Compliance (CoC) amendments to previously loaded casks which were loaded under a prior CoC amendment. Specifically, it was determined that Arizona Public Service Company applied all of the changes described by the CoC amendments listed in 10 CFR 72.214 to previously loaded casks prior to issuance of the proposed rule entitled "License and Certificate of Compliance Terms," RIN 3150-AI09, and without obtaining NRC approval through an exemption request pursuant to 10 CFR 72.7. The NRC has issued enforcement guidance EGM-09-006 that permits enforcement discretion to be applied to this potential violation provided that the licensee has met certain conditions. Because Arizona Public Service Company performed an evaluation pursuant to 10 CFR Part 72.212 for its application of all the changes of the current cask certificate amendment to the previously loaded casks within the 4 month time limit imposed by EGM-09-006 after the issuance of the proposed rule RIN 3150-AI09, the NRC is exercising enforcement discretion in accordance with Section VII.B.6 of the NRC Enforcement Policy and, therefore, is not issuing any enforcement action for this potential violation. Arizona Public Service Company - 2 -In accordance with 10 CFR 2.390 of the NRC's "Rules of Practice," a copy of this letter, its enclosures, and your response (if any) will be available electronically for public inspection in the NRC Public Document Room or from the Publicly Available Records (PARS) component of NRC's document system (ADAMS). ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html (the Public Electronic Reading Room). To the extent possible, your response should not include any personal privacy, proprietary, or safeguards information so that it can be made available to the Public without redaction. Should you have any questions concerning this inspection, please contact the undersigned at (817) 860-8191 or Mr. Ray Kellar at (817) 860-8121.

Sincerely,/RA/ D. Blair Spitzberg, PhD, Chief Repository & Spent Fuel Safety Branch Docket: 050-00528; 050-00529; 050-00530; 072-00044 License: NPF-41; NPF-51; NPF-74

Arizona Public Service Company - 3 -

Enclosure:

NRC Inspection Report 50-528/10-09; 50-529/10-09; 50-530/10-09; 72-44/07-01 cc w/enclosure: Mr. Steve Olea Arizona Corporation Commission 1200 W. Washington Street Phoenix, AZ 85007 Mr. Douglas Kent Porter Senior Counsel Southern California Edison Company Law Department, Generation Resources P.O. Box 800 Rosemead, CA 91770 Chairman Maricopa County Board of Supervisors 301 W. Jefferson, 10th Floor Phoenix, AZ 85003 Randall