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Power Authority of the State of New York and Entergy Nuclear Fitzpatrick LLC, Entergy Nuclear Indian Point 3 LLC, Entergy Nuclear Operations, Inc. (James A. FitzPatrick Nuclear Power Plant) and Indian Point Nuclear Generating Unit No. 3); CLI-00-22, Memorandum and Order
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[Federal Register: December 14, 2000 (Volume 65, Number 241)]
[Notices]
[Page 78198-78213]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14de00-130]
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NUCLEAR REGULATORY COMMISSION
[Docket Nos. 50-333-LT and 50-286-LT (consolidated)]
Power Authority of the State of New York and Entergy Nuclear
Fitzpatrick LLC, Entergy Nuclear Indian Point 3 LLC, Entergy Nuclear
Operations, Inc. (James A. FitzPatrick Nuclear Power Plant) and Indian
Point Nuclear Generating Unit No. 3); CLI-00-22, Memorandum and Order
Commissioners: Richard A. Meserve, Chairman, Greta Joy Dicus,
Nils J. Diaz, Edward McGaffigan, Jr. and Jeffrey S. Merrifield
Table of Contents
I. Introduction
II. The License Transfer Applications
III. Preliminary Procedural Issues
A. CAN's Motion to Consolidate the Commission's Consideration of the
Applications
B. Association's and CAN's Motions for Stay
C. Applicants' Request to Deny Cortlandt's Hearing Motion on
Procedural Grounds
D. CAN's Motion for a Formal Subpart G Hearing
E. Petitioners' Request for Access to Unredacted Versions of
Financial Information
IV. Discussion
A. Standing
1. CAN
2. The Association
3. Local Governmental Entities
B. Admissibility of Issues
1. General Concerns
2. Financial Qualifications Issues
a. Joint and Several Liability
b. Limited Liability Corporation
c. Baseline Funding
3. Decommissioning Issues
a. Consistency of Decommissioning Funding Arrangement with 10
CFR 50.75
b. Commitment and Ability to Decommission Indian Point 3 to
Greenfield Condition
c. Extension or Renewal of Indian Point 3 License
d. Management of Indian Point 3 Decommissioning Fund
e. Scope of Commission's Consideration of Indian Point 3
Decommissioning Issues to Include Indian Point 2 Matters
f. Entergy's Intention to Make a Profit on the Decommissioning
Fund
g. Lack of Provision for Off-Site Remediation
h. Environmental Impact Statements
4. CAN's Non-Labor-Related Technical Qualifications Issues
a. Age-Related Defects at Both Plants
b. Leak-Detection Problems at Both Plants
c. Issues of Management ``Character''
d. Cost-Cutting Pressures
5. The Association's Labor-Related Technical Qualifications
Issues
6. Issues Involving Emergency Evacuation Plans
7. Appropriateness of Indian Point 3 Transfer, Given its
Location
8. Antitrust Issue
9. Independent Evaluation of the Plants
V. Other Procedural Matters
A. Designation of Issues
B. Designation of Presiding Officer
C. Notices of Appearance
D. Filing Schedule
E. Participants in the Hearing and the Proceeding; Service List
F. Service Requirements
VI. Conclusion
I. Introduction
This proceeding involves applications which together seek the
Commission's authorization to transfer the operating licenses of both
the Indian Point Nuclear Generating Unit No. 3 (``Indian Point 3'') and
the James A. FitzPatrick Nuclear Power Plant (``FitzPatrick''). The
Indian Point plant is located in Westchester County, New York, beside
the Hudson River. Its property lies partially within the Town of
Cortlandt and entirely within the Hendrick Hudson School District. The
FitzPatrick plant is located in the town of Scriba in Oswego County,
New York.
The Power Authority of the State of New York (``PASNY'') seeks to
transfer its ownership interest in, and operating/maintenance
responsibility for, the Indian Point 3 plant to Entergy Nuclear Indian
Point 3, LLC (``Entergy Indian Point'') and Entergy Nuclear Operations,
Inc. (``Entergy Nuclear Operations''), respectively. Similarly, PASNY
would transfer its ownership interest in, and operating/maintenance
responsibility for, the FitzPatrick plant to Entergy Nuclear
FitzPatrick, LLC (``Entergy FitzPatrick'') and Entergy Nuclear
Operations, respectively.
The applications were submitted to the Commission on May 11 and 12,
2000, pursuant to Section 184 of the Atomic Energy Act of 1954
(``AEA'') \1\
[[Page 78199]]
and section 50.80 of the Commission's regulations.\2\ On June 28, 2000,
the Commission published notices of the FitzPatrick and Indian Point 3
applications in the Federal Register. See 65 FR 39953 and 39954,
respectively.
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\1\ 42 U.S.C. 2234 (precluding the transfer of any NRC license
unless the Commission both finds the transfer in accordance with the
AEA and gives its consent in writing). On November 9, 2000, the NRC
staff issued orders approving the two applications for license
transfer. Pursuant to 10 CFR 2.1327, the petitioners in this
proceeding could have asked the Commission by November 17, 2000, to
stay the effect of the staff's two orders, but petitioners filed no
stay motion. Consequently, PASNY and the Entergy companies were free
to close the sale of the two nuclear plants, which they did on
November 21, 2000. Neither the staff's approvals, nor the closing of
the sale affects the instant adjudicatory proceeding. The purpose of
this proceeding is to resolve whether, for the reasons raised by the
petitioners, the Commission should disapprove the transfers and
require the applicants to return the plant ownership to the status
quo ante or modify the license notwithstanding the staff's orders
and the applicants' actual consummation of the sale. See Vermont
Yankee Nuclear Power Corp. (Vermont Yankee Nuclear Power Station),
CLI-00-17, 52 NRC 79, 82-83 (2000).
\2\ 10 CFR 50.80. This regulation reiterates the requirements of
AEA section 184, sets forth the filing requirements for a license
transfer application and establishes the following test for approval
of such an application: (1) the proposed transferee is qualified to
hold the license and (2) the transfer is otherwise consistent with
law, regulations and Commission orders.
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The Commission received five petitions to intervene (or
participate) and requests for hearing from individuals or entities
wishing to address or oppose one or both of the license transfer
applications. The petitioners are Citizens Awareness Network (``CAN'');
the Town of Cortlandt together with the Hendrick Hudson School District
(collectively ``Cortlandt''); Westchester County (``Westchester'')
(petitioning to participate as a governmental entity); Local 1-2 of the
Utility Workers of America (``the Union''); and the Nuclear Generation
Employees Association, together with William Carano, Thomas Pulcher and
Richard Wiese, Jr. (collectively ``the Association'').\3\ The
applicants filed an Answer to each of these hearing requests. All
petitioners except Westchester submitted replies to the applicants'
answers. The Union subsequently withdrew its petition. The NRC staff is
not participating as a party in the adjudicatory portion of this
proceeding. See generally 10 CFR Sec. 2.1316(b), (c). We consider the
pleadings under Subpart M of our procedural rules. 10 CFR 2.1301-
2.1331.
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\3\ In addition, the County of Putnam sought and was granted an
extension of time until July 31, 2000, by which to file its petition
to intervene and request for hearing. However, Putnam filed no
petition or request.
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For the reasons set forth below, we grant the requests for hearing
of CAN, Cortlandt and the Association. We also grant Westchester's
request to participate in a hearing as an interested governmental
entity. Finally, we admit certain issues involving whether the Entergy
companies have demonstrated their financial ability to operate and
maintain the plants safely and whether they have provided a reasonable
assurance of adequate decommissioning funding.
II. The License Transfer Applications
As noted above, PASNY, Entergy FitzPatrick and Entergy Nuclear
Operations have filed applications seeking to transfer the ownership of
the FitzPatrick plant to Entergy FitzPatrick and the operating and
maintenance responsibilities for the plant to Entergy Nuclear
Operations. The regulatory responsibility for decommissioning the plant
would also transfer to Entergy FitzPatrick. Pursuant to the
Decommissioning Agreements and subject to the monetary limits of those
Agreements, PASNY would retain the decommissioning funds and would have
a contractual obligation to provide funds to Entergy FitzPatrick (up to
a specified limit) to decommission the FitzPatrick plant.\4\
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\4\ Commitments limiting PASNY's role to holding and disbursing
the decommissioning funds are contained in a letter dated Sept. 21,
2000.
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Similarly, PASNY, Entergy Indian Point and Entergy Nuclear
Operations have filed applications seeking to transfer the ownership of
the Indian Point plant to Entergy Indian Point and the operating and
maintenance responsibilities for the plant to Entergy Nuclear
Operations. The regulatory responsibility for decommissioning the plant
would also transfer to Entergy Indian Point. Pursuant to the
Decommissioning Agreements and subject to the monetary limits of those
Agreements, PASNY would retain the Decommissioning Funds and would have
a contractual obligation to provide funds to Entergy Indian Point (up
to a specified limit) to decommission the Indian Point 3 plant.
Under both applications, however, PASNY would have the option of
terminating this contractual obligation upon the occurrence of certain
events specified in the Decommissioning Agreements. Upon such
termination, PASNY would have no further contractual responsibility to
its successor owner (Entergy FitzPatrick or Entergy Indian Point, as
applicable) and no further involvement with the decommissioning process
for that plant. At that point, PASNY would be required to transfer the
decommissioning funds to its successor owner, subject to certain
conditions.
If PASNY does not terminate its contractual responsibility before
the decommissioning of the applicable plant begins, then PASNY's
contractual responsibility would be carried out pursuant to the
Decommissioning Agreements. Under those Agreements, PASNY and Entergy
Nuclear, Inc. (``ENI'') must enter into an agreement whereby ENI would
decommission the plants in accordance with the Decommissioning
Agreements. Entergy FitzPatrick and Entergy Indian Point, through their
authorized agent, Entergy Nuclear Operations, would at all times retain
ultimate control over the timing and control of the decommissioning
activities of ENI and its contractors.
The new owners and the new operator of the Indian Point 3 and
FitzPatrick nuclear plants are not ``electric utilities'' under our
rules, and thus must demonstrate financial qualifications to own and/or
operate the plant. See 10 CFR 50.33(f). These Entergy companies have
submitted five-year cost and revenue projections in accordance with our
rules, see id., but much of their material was submitted as
confidential financial information and has been withheld from public
disclosure.
Upon the closing of the purchase and sales agreements, all
employees within PASNY's Nuclear Generation Department, and certain
other employees supporting the Nuclear Generation Department, would
become employees of Entergy Nuclear Operations. The application
proposes no physical or operational changes to the FitzPatrick or
Indian Point facilities, but does request certain administrative
changes to the licenses that are necessary to reflect the proposed
transfers. See 65 FR at 39953-54.
Before reaching petitioners' standing and the admissibility of
their issues, we must first address certain pending procedural motions.
III. Preliminary Procedural Issues
A. CAN'S Motion to Consolidate the Commission's Consideration of the
Applications
CAN moves for a joint hearing on all applications. CAN argues that
there are overarching concerns that affect the transfer of both
facilities--concerns stemming from the Entergy companies' joint
negotiation of both sales and their intertwining of the two plants'
finances, day-to-day operations and reactor decommissioning. See CAN's
Petition, dated July 31, 2000, at 7. Conversely, Cortlandt objects to
such a consolidation. Cortlandt states that the issuance of separate
orders for each facility would be in the public interest because it
``would facilitate review
[[Page 78200]]
thereof and action thereupon.'' \5\ However, Cortlandt has offered us
no rationale to justify this conclusion. Given that CAN and the
Association present a number of arguments applicable to both plants, we
believe that the parties' and the Commission's resources are better
spent by addressing these arguments only once. We therefore grant CAN's
motion to consolidate the FitzPatrick and Indian Point 3 license
transfer proceedings.
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\1\ See Cortlandt's Petition for Extension of Time, dated July
7, 2000, at 4 n.1. This petition, despite its name, includes both a
petition to intervene and request for hearing.
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B. The Association's and CAN's Motions for Stay
The Association seeks a stay of this NRC proceeding pending a
decision by the New York courts regarding the rights, obligations and
liabilities of its members, the Entergy companies, and PASNY. See
Association's Petition to Intervene, dated July 17, 2000, at 19, 21.
The Association brought that state court action on July 27, 2000.\6\ In
support, the Association asserts that the state court action could
render void or voidable the sales transaction involving the two plants,
that the outcome of the state court action could assist in clarifying
the Commission record, and that consummation of the sales transaction
could render irreversible many aspects of the Association members'
relationship with the applicants. See Association's Reply Brief, dated
Aug. 3, 2000, at 26.
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\6\ See Verified Petition, Nuclear Generation Employees Ass'n v.
New York Power Auth. (Sup. Ct., Westchester Co., NY), Index No.
11129/00 (filed July 27, 2000) (appended to Association's Reply
Brief as Exh. 1). See also Association's Reply Brief, dated Aug. 3,
2000, at 3. We note in passing that, on July 26, 2000, the Town of
Cortlandt filed a separate action in New York State court, also
challenging the transfer. See Verified Petition, Town of Cortlandt
v. Power Auth. of the State of N.Y. (Sup. Ct., Westchester Co., NY),
Index No. 11084-00 (filed July 26, 2000) (appended to Cortlandt's
Supplemental Statement, dated July 31, 2000) (hereafter ``Cortlandt
Verified Petition''), petition denied (Sept. 15, 2000), appeal
noticed (Sept. 22, 2000) (court denial and appeal notice both
appended to Cortlandt's Submission of Supplemental Information,
dated Sept. 28, 2000). See also Affirmation of Peter Henner, dated
July 31, 2000, at para. 29 (appended to Cortlandt's Supplemental
Statement, dated July 31, 2000). (We cite to the paragraph rather
than the page number of Mr. Henner's Affirmation because neither
version of this document is paginated and because the contents of
the first version appear on different pages from the same content of
the second version.)
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Similarly, CAN seeks a stay of the adjudication until the Internal
Revenue Service (``IRS''), the Federal Energy Regulatory Commission
(``FERC'') and the New York State Department of Environmental
Conservation (``DEC'') have completed their own proceedings involving
the transfer of the two plants.\7\ CAN asserts that these agencies'
rulings could affect the Entergy companies' ability to own, operate and
decommission the two plants,\8\ and that DEC or IRS rulings adverse to
Entergy could render the sales agreement void or voidable.\9\
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\7\ On Sept. 29, 2000, FERC authorized Entergy Indian Point's
and Entergy FitzPatrick's purchase of the Indian Point 3 and
FitzPatrick nuclear plants, respectively, from PASNY. See Entergy
Nuclear Indian Point 3, LLC and Entergy Nuclear FitzPatrick, LLC,
Docket No. EC00-100-000, ``Order Authorizing Disposition of
Jurisdictional Facilities,'' 92 FERC para. 61,281 (Sept. 29, 2000).
Separately, it is not at all clear whether there is any request
or proceeding pending before the IRS. Such a request appears to be
the assumption on which one of the Association's issues rests (see
Association's Petition at 18, referring to the potential effects of
``[a] contrary ruling by the IRS''), and also is expressly one of
the assumptions on which CAN bases its instant stay request.
However, the record contains no indication that the applicants have
ever sought such an IRS ruling. Conversely, the applicants'
responses to the Association's (and CAN's) arguments never deny
seeking an IRS ruling.
\8\ See CAN's Petition at 1-7. See also id. at 14 (rapid
consolidation of nuclear industry justifies a stay pending changes
in NRC regulations and enforcement practices); CAN's Reply Brief,
dated Aug. 17, 2000, at 5-6.
\9\ CAN's Reply Brief at 6.
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As we indicated in a prior case, the pendency of parallel
proceedings before other forums is not adequate grounds to stay a
license transfer adjudication. See Niagara Mohawk Power Corp. (Nine
Mile Point, Units 1 and 2), CLI-99-30, 50 NRC 333, 343-44 (1999). We
therefore deny the motions for a stay. However, we instruct the parties
to inform the Commission promptly of any court or administrative
decision that might in any way relate to, or render moot, all or part
of the instant proceeding. Similarly, if at any point the parties to
this proceeding reach a settlement of this dispute, or if the transfer
applicants decide to withdraw or postpone their application, we expect
immediate notification to the Commission.
C. Applicants' Request To Deny Cortlandt's Hearing Motion on Procedural
Grounds
Applicants assert that Cortlandt's Motion for Hearing should be
denied because Cortlandt failed to serve the applicants in a manner
that ensured delivery on the due date of filing. See Answer to
Cortlandt's Petition, dated Aug. 14, 2000, at 3-4. We consider such a
sanction too severe for the offense. Cortlandt has acknowledged its
error, apologized, and explained that it was based on a
``communications error'' with the Commission's Office of the Secretary.
See Cortlandt's Reply Brief, dated Aug. 21, 2000, at 8. Also,
applicants do not appear to have suffered any prejudice as a result of
Cortlandt's error. We therefore deny their motion.
D. CAN's Motion For a Formal Subpart G Hearing
In both a separate motion and throughout its presentation on
standing and issues, CAN requests a formal hearing under Subpart G of
our procedural regulations. See CAN's Petition at 9-11, 22, 23, 29, 36,
42, 47, 51, 55, 56, 64, 66; CAN's Reply Brief at 4-5, 9-10, 12. CAN's
motion for a Subpart G proceeding is expressly prohibited under 10 CFR
2.1322(d). See Vermont Yankee Nuclear Power Corp. (Vermont Yankee
Nuclear Power Station, CLI-00-20, 52 NRC at ____, slip op. at 3 (Oct.
6, 2000).
In an effort to avoid this prohibition, CAN asserts that this
proceeding falls within the bounds of 10 CFR 2.1329, providing for
waiver of rules under ``special circumstances'' which demonstrate that
the ``application of a rule or regulation would not serve the purposes
for which it was adopted.'' As ``special circumstances,'' CAN points to
the fact that ``the matters in this license transfer are not strictly
`financial in nature' as contemplated in the promulgation of Subpart
M.'' See CAN's Petition at 9.
CAN's interpretation of the appropriate scope of Subpart M
procedures is, in our view, overly restrictive. Our Subpart M rules are
intended to apply to more than just those cases presenting only
financial issues. We expected when promulgating Subpart M that most
issues would be financial,\10\ and indeed this expectation has been
fulfilled. However, we also predicted that petitioners would raise
other categories of issues as well (such as foreign ownership,
technical qualifications, and appropriate critical staffing levels)--a
prediction that has also been fulfilled.\11\ For that reason, when
promulgating Subpart M, we expressly declined to adopt the nuclear
industry trade organization's suggestion that we limit the scope of
Subpart M
[[Page 78201]]
proceedings to financial matters.\12\ We deny CAN's motion for
essentially the same reason. The nature of petitioners' financial and
technical allegations do not call for an alteration in the usual
Subpart M process.
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\10\ See Nine Mile Point, CLI-99-30, 50 NRC at 345.
\11\ See Vermont Yankee, CLI-00-20, 52 NRC at ----, slip op. at
11-14 (petitioners raised issues involving technical
qualifications); Northern States Power Co. (Monticello Nuclear
Generating Plant), CLI-00-14, 52 NRC 37 (2000) (petitioners raised
issues regarding the proposed licensees' technical qualifications),
reconsid'n denied, CLI-00-19, 52 NRC 135 (2000); Duquesne Light Co.
(Beaver Valley Power Station, Units 1 and 2), CLI-99-23, 50 NRC 21
(1999) (petitioner raised labor issues between union and management
relating to plant safety); Duquesne Light Co. (Beaver Valley Power
Station, Units 1 and 2), CLI-99-25, 50 NRC 224 (1999) (same).
\12\ See Final Rule, ``Streamlined Hearing Process for NRC
Approval of License Transfers,'' 63 Fed. Reg. 66,721, 66,724 (Dec.
3, 1998).
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As an alternative request, CAN moves for a consolidated hearing by
the Commission, FERC and DEC. See CAN's Petition at 11; CAN's Reply
Brief at 7-8. We believe holding a consolidated hearing would be
impractical in the particular circumstances of this proceeding, given
that each agency would be operating under a different set of procedural
rules and governing statutes. Moreover, as indicated in footnote 7,
supra, FERC has already concluded its parallel proceeding involving the
FitzPatrick and Indian Point 3 plants.
Finally, as a second alternative request, CAN asks that the
Commission initiate a Subpart M hearing, but consider the possibility
of converting it to a Subpart G hearing at a later date. See CAN's
Reply Brief at 9. In our view, CAN is asking nothing more than the
Commission's regulations already provide. See 10 CFR 2.1322(d) (``The
Commission, on its own motion, or in response to a request from a
Presiding Officer * * *, may use additional procedures, such as direct
and cross-examination, or may convene a formal hearing under subpart G
of this part on specific and substantial disputes of fact * * * that
cannot be resolved with sufficient accuracy except in a formal
hearing''). We deny CAN's second alternative request as unnecessary.
E. Petitioner' Request For Access to Unredacted Versions of Financial
Information
Cortlandt asserts that its lack of access to certain confidential
financial information (e.g., the five-year estimates of Indian Point
3's annual operating costs, the credit agreement, and the financial
statements for Entergy International Ltd., Entergy Global Investments,
LLC and Entergy Indian Point) precludes it from fully presenting its
arguments. See Cortlandt's Petition at 8; Cortlandt's Supplemental
Filing, dated July 31, 2000, at 3; Cortlandt's Reply Brief at 4-7. See
generally Affirmation of Peter Henner at para. 10 (``materials made
available in the public record are insufficient for an assessment of
[Entergy Indian Point]'s ability [to] operate under the issued license
and to restore the [Indian Point 3] site to greenfield status'');
Letter from George E. Sansoucy to Paul V. Nolan, Esq., dated July 28,
2000, at 1 (``Sansoucy Letter''), appended to Cortlandt's Supplemental
Filing. More specifically, Cortlandt's expert notes that
[I]t is not possible to render an opinion as to whether the
income stream to Entergy will be sufficient to make the required
payments. A particular problem is that the fuel payment stream cited
in the application is for the combined fuel assets of [Indian Point]
3 and James A. FitzPatrick Nuclear Generating Station and does not
allocate the portion of payments assigned to each site [citing
Purchase and Sale Agreement, p. 14].
[I]t is not possible to estimate the ability of Entergy to fund
required payments to the Decommissioning Fund.
See Sansoucy Letter at 2, 3. CAN similarly complains about lack of
access to decommissioning documents. See, e.g., CAN's Petition at 3,
11, 15; CAN's Reply Brief at 18.
We find below that Cortlandt and CAN have made sufficient showings
of standing and have raised admissible issues. We also recognize that
the lack of access to the applicants' full financial information could
affect their ability to present their substantive case at the hearing.
E.g., pages 19, 22, 23, infra. Cortlandt and CAN (along with the
Association and Westchester, if they wish) should discuss access to
proprietary information with the applicants and thereafter file with
the Presiding Officer a mutually-agreeable protective order. If the
parties cannot agree on a protective order, CAN and Cortlandt may move
for issuance of such an order.\13\ Moreover, we note that portions of
the hearing (which we herein grant) may have to be closed to the public
when issues involving proprietary information are being addressed.
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\13\ See GPU Nuclear Inc. (Oyster Creek Nuclear Generating
Station), CLI-00-6, 51 NRC 193, 211 (2000); North Atlantic Energy
Serv. Corp. (Seabrook Station, Unit 1) & Northeast Nuclear Energy
Co. (Millstone Station, Unit 3), CLI-99-27, 50 NRC 257, 268 (1999);
North Atlantic Energy Serv. Corp. (Seabrook Station, Unit 1), CLI-
99-6, 49 NRC 201, 225 (1999); North Atlantic Energy Serv. Corp.
(Seabrook Station, Unit 1), unpublished Protective Order of
Presiding Officer, 1999 WL 202690 (March 24, 1999). Cf. 10 CFR
2.740(c)(6).
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IV. Discussion
To intervene as of right in any Commission licensing proceeding, a
petitioner must demonstrate that its ``interest may be affected by the
proceeding,'' i.e., it must demonstrate ``standing.'' See AEA, Section
189a, 42 U.S.C. section 2239(a). The Commission's rules for license
transfer proceedings also require that a petition to intervene raise at
least one admissible issue. See 10 CFR 2.1306. For the reasons set
forth below, we conclude that CAN, the Association and Cortlandt have
demonstrated standing, and that Westchester is entitled to governmental
participant status in this proceeding. We also conclude that CAN, the
Association and Cortlandt have each raised at least one admissible
issue. We therefore set the case for hearing.
A. Standing
To demonstrate standing in a Subpart M license transfer proceeding,
the petitioner must (1) identify an interest in the proceeding by
(a) Alleging a concrete and particularized injury (actual or
threatened) that
(b) is fairly traceable to, and may be affected by, the challenged
action (e.g., the grant of an application to approve a license
transfer), and
(c) is likely to be redressed by a favorable decision, and
(d) lies arguably within the ``zone of interests'' protected by the
governing statute(s).
(2) specify the facts pertaining to that interest.
See 10 CFR 2.1306, 2.1306; Nine Mile Point, CLI-99-30, 50 NRC at
340-41 and n.5 (and cited authority). Moreover, an organization which
seeks representational standing must demonstrate how at least one of
its members may be affected by the licensing action, must identify that
member by name and address, and must show (preferably by affidavit)
that the organization is authorized to request a hearing on behalf of
that member. See Vermont Yankee, CLI-00-20, 52 NRC at____, slip op. at
4; Oyster Creek, CLI-00-6, 51 NRC at 202 (and cited authority).
1. CAN
CAN seeks permission to represent the interests of two of its
members--Linda Downing, who lives 5\1/2\ miles from the FitzPatrick
plant, and Marilyn Elie, who lives the same distance from the Indian
Point 3 plant. See Declaration of Linda Downing, dated July 31, 2000;
Declaration of Marilyn Elie, dated July 31, 2000. On Ms. Downing's and
Ms. Elie's behalf, CAN alleges potential health-and-safety impacts on
them if the Commission approves the two license transfers, seeks
specific relief to prevent such injuries (disapproval of the transfers
or imposition of conditions), and asserts that the safety-related
issues fall within the zone of interests protected by the AEA and the
National Environmental Policy Act (``NEPA''). See CAN's Petition at 14,
22, 28-29, 25-26, 34, 36, 40-41, 46-47, 50-51, 55-56, 63-64, 65-66;
CAN's Reply Brief at 10-
[[Page 78202]]
11. We recently granted standing in the Vermont Yankee, Oyster Creek
and Monticello license transfer proceedings to petitioners who (like
CAN) raised similar assertions and who (again like CAN) were authorized
to represent members living or active quite close to the site.\14\
Based on these similarities, we conclude that CAN has satisfied our
standing requirements and is granted standing with respect to both the
FitzPatrick and Indian Point 3 license transfers.
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\14\ See Vermont Yankee, CLI-00-20, 52 NRC at ____, slip op. at
4-5; Oyster Creek, CLI-00-6, 51 NRC at 202-03; Monticello, CLI-00-
14, 52 NRC at 47.
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2. The Association
The Association is a group of about 400 technical and management
employees (e.g., reactor operators, reactor engineers) in the nuclear
generation component of PASNY.\15\ The Association is concerned that
the proposed transfer will directly and materially affect (and, in
fact, is already affecting) its members' morale and economic interests
(salaries, benefits, pensions), as well as their working conditions,
professional roles and safety culture--factors the Association believes
will affect performance, attrition and operational safety at the two
plants. The Association also argues that its members' health and safety
may suffer as a direct result of the license transfer if an
insufficient amount of revenue were to preclude the Entergy companies
from adequately funding both occupational radiation protection and safe
decommissioning activities. See Association's Petition at 17;
Association's Reply Brief at 7-8, 25-26. The Association supports its
assertions with notarized affirmations of the three individual
petitioners, and it requests both intervenor status and a hearing. As
relief, it seeks an order declining to approve the license transfer.
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\15\ Messrs. Carano and Pulcher (both cosignatories on the
Association's Petition to Intervene and Request for Hearing) are
managers at the Indian Point 3 plant; Mr. Wiese (also a cosignatory)
is a manager at the FitzPatrick plant. See Association's Petition at
2-6.
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The Association's submission satisfies our standing requirements.
Given that we have found that people (like CAN's members here) living
or active within a few miles of a nuclear plant have shown standing in
license transfer cases, it follows that employees who work inside a
plant should ordinarily be accorded standing as well, as long as the
alleged injury is fairly traceable to the license transfer. Here the
Association has made a sufficient linkage to establish standing. The
Association's concerns, if substantiated at a hearing, would be
redressed by a favorable decision, i.e., a decision declining to
approve the transfer.
3. Local Governmental Entities
Cortlandt and the Hendrick Hudson School District collectively seek
standing in the Indian Point 3 license transfer proceeding on the
grounds that the Indian Point 3 plant is located within the boundaries
of both governmental entities and that the plant's safe operation and
decommissioning is of great concern to the safety and long-term
economic well-being of the Town and School District communities. We
find that, for these reasons, Cortlandt has demonstrated standing with
respect to the Indian Point 3 license transfer application. See Vermont
Yankee, CLI-00-20, 52 NRC at ____, slip op. at 5. Moreover, Cortlandt
is the locus of the Indian Point 3 plant and therefore is in a position
analogous to that of an individual living or working within a few miles
of a plant whose license may be transferred. See discussion of CAN's
standing, at page 14, supra.
Westchester, the County where the Indian Point 3 plant is located,
seeks participant (but not intervenor) status in this proceeding,
citing 10 CFR 2.715(c). See Westchester's Petition, dated July 31,
2000, at 2-3. As we indicated in Nine Mile Point, CLI-99-30, 50 NRC at
344, ``the Commission has long recognized the benefits of participation
in our proceedings by representatives of interested states, counties,
municipalities, etc.'' We therefore grant Westchester's request for
participant status regarding the Indian Point 3 license transfer.
B. Admissibility of Issues
To demonstrate that issues are admissible under Subpart M, a
petitioner must
(1) Set forth the issues (factual and/or legal) that petitioner seeks
to raise,
(2) demonstrate that those issues fall within the scope of the
proceeding,
(3) demonstrate that those issues are relevant and material to the
findings necessary to a grant of the license transfer application,
(4) show that a genuine dispute exists with the applicant regarding the
issues, and
(5) provide a concise statement of the alleged facts or expert opinions
supporting petitioner's position on such issues, together with
references to the sources and documents on which petitioner intends to
rely.
See 10 CFR 2.1308; Nine Mile Point, CLI-99-30, 50 NRC at 342 (and
cited authority). These standards do not allow mere ``notice
pleading;'' the Commission will not accept ``the filing of a vague,
unparticularized'' issue, unsupported by alleged fact or expert opinion
and documentary support. See Seabrook, CLI-99-6, 49 NRC at 219
(citation and internal quotation marks omitted). General assertions or
conclusions will not suffice. This is not to say, however, that our
threshold admissibility requirements should be turned into a ``fortress
to deny intervention.'' Cf. Duke Energy Corp. (Oconee Nuclear Station,
Units 1, 2, and 3), CLI-99-11, 49 NRC 328, 335 (1999), quoting
Philadelphia Elec. Co. (Peach Bottom Atomic Power Station, Units 2 and
3), ALAB-216, 8 AEC 13, 20-21 (1974).
1. General Concerns
We initially touch on two general concerns raised by the
Association and CAN. The first is a claimed decline in the educational
opportunities and talent necessary for an effective nuclear workforce
in the United States. See Association's Petition at 19-20. The second
is an alleged over-concentration in the ownership of nuclear power
plants. See CAN's Petition at 12-18. These may well be significant
questions warranting Commission inquiry. Indeed, as we recently pointed
out in Vermont Yankee, the NRC staff, at Commission direction, already
is examining the industry consolidation question. See CLI-00-20, 52 NRC
at__, slip op. at 17. But an individual license transfer adjudication
is not an appropriate forum for a legislative-like inquiry into issues
affecting the entire nuclear industry. See id. We therefore decline to
admit for hearing petitioners' general issues on a declining nuclear
workforce and on overly concentrated ownership.\16\
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\16\ Entergy's acquisition of the Indian Point and FitzPatrick
plants, if the proposed deals are consummated, would give the
``Entergy family'' control over approximately 7.9 nuclear plants. If
Entergy then merges with the FPL Group and purchases the Indian
Point 2 facility, as has been proposed, the Entergy conglomerate
will then control 12.75 nuclear power plants. To place this in
perspective, Commonwealth Edison historically (and currently) has
held an ownership interest in 12.5 plants. See Vermont Yankee, CLI-
00-20, 52 NRC at____, slip op. at 20 n.20. There are over 100
nuclear power reactor units in the United States. Petitioners have
not explained why adding two reactors to Entergy's current fleet, in
and of itself, poses a unique health and safety risk warranting an
adjudicatory hearing.
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2. Financial Qualifications Issues
Cortlandt and CAN question whether Entergy FitzPatrick and Entergy
Indian Point will have the necessary level of financial qualifications
to run the FitzPatrick and Indian Point 3 plants safely. See
Cortlandt's Petition at 5-6;
[[Page 78203]]
CAN's Petition at 54-55. We admit Cortlandt's issue as discussed below
insofar as it argues that Entergy Indian Point's potential joint and
several liability for Entergy FitzPatrick's fuel and plant purchase
expenses could draw into question the ``reasonable assurance'' that
Entergy Indian Point has ``the funds necessary'' to operate the Indian
Point plant safely. See 10 CFR 50.33(f)(2). In addition, we give
Cortlandt and CAN an opportunity to formulate a challenge to Entergy's
cost-and-revenue projections for both plants, after a protective order
is entered making Entergy's confidential financial data available. See
generally Seabrook, CLI-99-6, 49 NRC at 219-21. We turn now, briefly,
to petitioners' specific claims.
a. Joint and Several Liability. Cortlandt asserts that several of
the agreements underlying the transfer impose liability on Entergy
Indian Point for certain financial obligations of Entergy FitzPatrick.
See Cortlandt's Petition at 6-8 and Affirmation of Peter Henner at
para. 14, both of which refer to a $586 million Facilities Payment Note
(Exh. A to Indian Point Application) and a $171 million Fuel Payment
Note (Exh. B to Indian Point 3 Application). Cortlandt is worried that
these joint and several liability obligations would place the Indian
Point 3 plant in financial jeopardy in the event of an accident at
either Indian Point 3 or FitzPatrick.
Such financial jeopardy could, according to Cortlandt, leave the
Indian Point plant in an unsafe condition which would place at risk
both the environment and the public health. See Cortlandt's Petition at
7; Cortlandt's Supplemental Filing at 3; Affirmation of Peter Henner at
Paras. 13, 60. In support, Cortlandt points to the fact that Entergy
Indian Point has agreed to sell its entire output of electricity to
PASNY for 3.6 cents per kilowatt-hour through 2004--a revenue level
Cortlandt considers sufficient to cover Unit 3's operating costs, but
insufficient to simultaneously satisfy any obligations arising from
activities at the FitzPatrick plant. See Affirmation of Peter Henner at
para. 15. According to Cortlandt, the problem is exacerbated by the
Entergy companies' ostensible failure to allocate between the Indian
Point 3 and FitzPatrick plants the payment for those plants' combined
fuel assets.\17\
---------------------------------------------------------------------------
\17\ See Affirmation of Peter Henner at para. 17. See also
Sansoucy Letter at 2 (``[I]t is not possible to render an opinion as
to whether the income stream to Entergy will be sufficient to make
the required payments. A particular problem is that the fuel payment
stream cited in the application is for the combined fuel assets of
[Indian Point] 3 and James A. FitzPatrick Nuclear Generating Station
and does not allocate the portion of payments assigned to each site
[citing Purchase and Sale Agreement, p. 14].''
---------------------------------------------------------------------------
The applicants respond only briefly to this general line of
argument, stating merely that Cortlandt's assertions of joint and
several liability are vague and baseless. See Answer to Cortlandt's
Petition at 13-14. We disagree with the applicants.\18\ Cortlandt
points specifically to two financial obligations (the Facilities
Payment Note and the Fuel Payment Note) as sources of joint and several
liability and asserts that PASNY's 3.6 cent per kilowatt hour payments
would be insufficient to satisfy the transferees' obligations at both
FitzPatrick and Indian Point 3. Moreover, Cortlandt's expert (Mr.
Sansoucy) concludes that the estimated net operating income from Indian
Point 3 for the next seven years would, under certain assumptions, be
insufficient to cover the facility and fuel payments during that time.
See Sansoucy Letter at 2. These allegations, backed by an expert's
affidavit, create a genuine dispute warranting a hearing.\19\
---------------------------------------------------------------------------
\18\ We do, however, agree with the applicants on one point. We
see no factual basis (e.g., affidavits or other documents) in the
record for Cortlandt's assertion regarding the inadequacy of
Entergy's proposed $50 million letter of credit. See Cortlandt's
Petition at 7. This aspect of the financial qualifications issue is
therefore not admitted for hearing.
\19\ See Yankee Atomic Elec. Co. (Yankee Nuclear Power Station),
CLI-96-7, 43 NRC 235, 249 (1996) (citations and internal quotation
marks omitted):
Although section 2.714 imposes on a petitioner the burden of
going forward with a sufficient factual basis, it does not shift the
ultimate burden of proof from the applicant to the petitioner. Nor
does section 2.714 require a petitioner to prove its case at the
contention stage. For factual disputes, a petitioner need not
proffer facts in formal affidavit or evidentiary form, sufficient to
withstand a summary disposition motion. On the other hand, a
petitioner must present sufficient information to show a genuine
dispute and reasonably indicating that a further inquiry is
appropriate.
---------------------------------------------------------------------------
b. Limited Liability Corporation. As a second line of argument
regarding financial qualifications, Cortlandt asserts that Entergy
Indian Point, as a limited liability company, may not have the
necessary resources to protect the environment and meet its legal,
contractual and regulatory obligations to its employees, PASNY
(pursuant to the Indian Point 3 and FitzPatrick sales contracts), and
those who may be injured or suffer property damage in a nuclear
accident. See Affirmation of Peter Henner at para. 25(e). Cortlandt
anticipates that Entergy Indian Point could lack the necessary
resources to respond to these obligations if it were to face an
accident, a shortfall in operating revenue due to fluctuations in the
market, or changes in the energy market or in the cost of producing
nuclear power. See Affirmation of Peter Henner at para. 54. Cortlandt
asserts that the newly-formed Entergy Indian Point should be subject to
the stricter financial requirements of 10 CFR 50.33(f)(3) and (4). See
Affirmation of Peter Henner at para. 53.
Cortlandt acknowledges that we have issued reactor operating
licenses to limited liability corporations in the past and that we have
recently approved a transfer of such a license to an LLC whose only
asset was the generating facility. See Affidavit of Peter Henner at
para. 55, citing Oyster Creek, CLI-00-6, 51 NRC at 208. However,
Cortlandt considers Oyster Creek factually distinguishable inasmuch as
the transferor in that proceeding was an investor-owned utility while
the transferor in the instant proceeding is a public entity. See
Affirmation of Peter Henner at para. 59. Cortlandt also considers
Oyster Creek to have been wrongly decided and argues that it creates a
``fortress to deny intervention.'' See Affirmation of Peter Henner at
para. 62.
We decline to admit this issue. The applicants have already
provided the financial data called for by the requirements of 10 CFR
50.33(f)(3) and (4). Moreover, Cortlandt has offered us no convincing
reason to reconsider our legal ruling in Oyster Creek,\20\ and we find
equally unconvincing its effort to distinguish that case factually. The
issue at bar is the financial qualifications of the transferee.
Cortlandt has not explained why the public status of the transferor is
relevant to this issue.
---------------------------------------------------------------------------
\20\ We recently reaffirmed our Oyster Creek holding. See
Monticello, CLI-00-14, 52 NRC at 57.
---------------------------------------------------------------------------
c. Baseline Funding. CAN contends that we should decline to approve
the license transfers until Entergy FitzPatrick and Entergy Indian
Point, together with their parent corporations, establish ``baseline
funding'' that is clearly defined and substantially increased over the
current level. See CAN's Petition at 54. This general line of argument
is quite similar (and, in some cases, identical) to an issue raised by
CAN in Vermont Yankee. As we noted in that decision, CAN ``nowhere
defines the term [`baseline funding']; nor is it a term with which we
are familiar.'' See CLI-00-20, 52 NRC at ____, slip op. at 16. However,
from the context of CAN's references to baseline funding, it appears in
the instant proceeding that CAN is referring to the $90 million line of
credit that the Entergy companies are offering as supplemental funding,
if necessary. For the reasons set forth below, we find that CAN has
failed to provide an adequate basis for most of this issue, but may
[[Page 78204]]
submit a revised issue regarding one facet of the ``baseline funding''
question within twenty days of issuance of a protective order that
provides CAN access to the applicants' proprietary information.
CAN initially argues that the applicants have failed to explain
whether the $50 million letter of credit from Entergy Global
Investments, Inc., is to support all of Entergy's current nuclear
holdings and future acquisitions, and whether those funds are
immediately available to Entergy FitzPatrick and Entergy Indian Point
or whether instead they are available only upon repayment of a $50
million letter of credit from Entergy Corp. See CAN's Petition at 54-
55. In response, the applicants explain that the Entergy Corp.'s $50
million line of credit is part of the $90 million supplemental funding
that various Entergy companies are making available to meet
contingencies for both Entergy FitzPatrick and Entergy Indian Point.
The funds, according to the applicants, are not available to the entire
fleet of Entergy reactors. See Answer to CAN's Petition at 26 n.20. In
our view, the applicants' explanation fills the informational gap about
which CAN complains, leaving no ``genuine dispute'' on this point. See
10 CFR 2.1306(b)(2)(iv). We therefore do not admit this portion of
CAN's ``baseline funding'' issue.\21\
---------------------------------------------------------------------------
\21\ Entergy Global Investments, Inc., has offered two $20
million lines of credit to Entergy FitzPatrick and Entergy Indian
Point, respectively. However, contrary to CAN's representations, it
has not issued a $50 million dollar letter of credit.
---------------------------------------------------------------------------
CAN next argues that (a) neither FitzPatrick nor Indian Point 3 has
ever met, on a sustained basis, the revenue generation standards
required under the Purchase and Sale Agreement; (b) maintenance outage
costs could easily exceed the $90 million in supplemental funding
available to the two plants; and therefore (c) the applicants must
provide additional assurance as to the health and safety of both the
workers and the public. See CAN's Petition at 55. Applicants respond
that CAN has provided no affidavits, supporting documents or other
evidence to support this claim. See Answer to CAN's Petition at 26.
However, CAN explains that the applicants' exclusion of certain
financial information from the two applications precludes CAN from
comparing the anticipated operating costs with the anticipated revenues
and thereby assessing the transferees' ability to plan for maintenance
outages or to build up sufficient funds for unexpected outages. See
CAN's Reply Brief at 18.
Regarding part (b) of this argument, the ``sufficiency'' vel non of
the $90 million supplemental funding does not constitute grounds for a
hearing. In Vermont Yankee, we recently declined to admit essentially
the same issue (also raised by CAN) on the ground that NRC rules do not
mandate supplemental funding. ``The parent company guarantee is
supplemental information and not material to the financial
qualifications requirements of 10 CFR 50.33(f)(2).'' \22\ CAN has given
us no reason to reach a different conclusion in the instant proceeding.
---------------------------------------------------------------------------
\22\ See CLI-00-20, 52 NRC at ____, slip op. at 21-22, citing
Oyster Creek, CLI-00-6, 51 NRC at 205. See also Vermont Yankee, CLI-
00-20, 52 NRC at ____, slip op. at 25:
[A]lthough AmerGen's $200 million reserve fund provides
significant assurance of sufficient operating and decommissioning
funds in the event of a problem, the fund is not, strictly speaking,
required by our rules. It therefore lies outside the bounds of our
license transfer hearing process--which focuses on whether AmerGen
Vermont meets the required financial and technical qualifications.
---------------------------------------------------------------------------
Regarding the remainder of CAN's argument, however, we reach a
somewhat different conclusion. CAN's claim of revenue shortfalls
essentially challenges the Entergy companies' cost and revenue
projections--precisely the kind of challenge we have indicated would be
acceptable if based on sufficient facts, expert opinion or documentary
support. See Oyster Creek, CLI-00-6, 51 NRC at 207, 208, citing
Seabrook, CLI-99-6, 49 NRC at 219-21. In fact, we have already ruled
that Cortlandt's somewhat different financial qualifications issue
meets our threshold requirements for a hearing. It is true that CAN's
version of the issue appears only in its Petition, without back-up
support. However, we believe that CAN's explanation regarding the
unavailability of relevant data entitles it to gain access to the data
through a protective order (see page 12, supra) before being held to
our usual specificity requirements.\23\ The same is true of Cortlandt
insofar as it also chooses to challenge Entergy's cost-and-revenue
projections. We therefore authorize CAN and Cortlandt to submit a
properly formulated and supported financial qualifications issue within
20 days of the entry of a protective order.
---------------------------------------------------------------------------
\23\ Subpart M calls for ``specificity'' in pleadings. See
Northeast Nuclear Energy Co. (Millstone Nuclear Power Station, Units
1, 2, and 3), CLI-00-18, 52 NRC 129, 131-32 (2000). However, in the
unusual setting here, where critical information has been submitted
to the NRC under a claim of confidentiality and was not available to
petitioners when framing their issues, it is appropriate to defer
ruling on the admissibility of an issue until the petitioner has had
an opportunity to review this information and submit a properly
documented issue.
---------------------------------------------------------------------------
We caution CAN, and Cortlandt as well, that ``absolute certainty''
in financial forecasts is impossible, and that we do not require it.
See Seabrook, CLI-99-6, 49 NRC at 221-22. Challenges to Entergy's
financial qualifications ``ultimately will prevail only if [they] can
demonstrate relevant uncertainties significantly greater than those
that usually cloud business outlooks.'' Id. at 222.
Finally, CAN asserts that Entergy's supplemental $90 million will
prove inadequate to cover Entergy's various potential liabilities,
including its Price-Anderson Act responsibility. We have already
explained why the $90 million in supplemental funds is not part of this
license transfer case. And, in our recent Vermont Yankee decision, we
rejected an identical Price-Anderson claim by CAN:
[N]othing about Price-Anderson coverage changes as a result of
this license transfer. The same coverage will exist after license
transfer as exists today. Moreover, contrary to what CAN suggests,
Price-Anderson indemnification agreements continue in effect even
after plants have ceased permanent operation and are engaged in
decommissioning. See 10 CFR 140.92 (NRC Indemnification Agreement,
Article VII); 10 CFR 50.54(w). Thus, CAN's Price-Anderson argument
is ill-conceived. . . .\24\
---------------------------------------------------------------------------
\24\ CLI-00-20, 52 NRC at ____, slip op. at 22. In that same
decision, we further commented on the analogous Price-Anderson
argument of another petitioner (Vermont) that:
. . . our regulations only require it to show that it has
sufficient cash equivalents (such as the parent company guarantee)
to cover the retroactive $10 million premium required by our
regulations at 10 CFR 140.21(e)-(f). See Oyster Creek, CLI-00-6, 51
NRC at 206. . . . Vermont's argument that the applicant must meet
financial requirements in addition to those imposed by our
regulations constitutes, in effect, a demand for additional rules,
but it does not provide an adequate basis for a hearing. Id.
Moreover, * * *, prior to issuance of the amended license to AmerGen
Vermont, it must obtain all regulatorily-required property damage
insurance.
---------------------------------------------------------------------------
In sum, we will consider a revised issue submitted by CAN regarding
the applicants' cost and revenue projections, but we reject CAN's
claims regarding the $90 million supplemental fund and the Price-
Anderson Act.
3. Decommissioning Issues
a. Consistency of Decommissioning Funding Arrangement with 10 CFR
50.75. As explained at pages 5-6, supra, the applicants have structured
an unusual arrangement whereby the transferor (PASNY) keeps the
decommissioning fund after transferring the FitzPatrick and Indian
Point 3 plants to the Entergy companies. Ordinarily, a transferee would
receive the decommissioning fund along with the nuclear plant with
which it was associated.
The Association raises the question whether the applicant's
arrangement is
[[Page 78205]]
consistent with the Commission's own decommissioning requirements of 10
CFR 50.75(e) which, according to the Association, requires the
transferee (here, the Entergy companies) to hold the decommissioning
funds. See Association's Petition at 18; Affidavit of Stephen Prussman.
The Association disputes applicants' claim that the license transfer
request meets the requirements of 10 CFR 50.75(e)(1)(vi), i.e., that
the applicant provide financial assurance ``equivalent'' to that
offered by the decommissioning devices (e.g., a surety or insurance
arrangement) specified in the earlier portions of section 50.75(e)(1).
In support, the Association asserts that outstanding questions of tax
liability limit the availability of the decommissioning funds and also
that the applicants impose various contractual limitations upon the
availability of the funds (i.e., limits based upon plants owned, limits
on the Authority's liability, and provisions to pay less than the full
decommissioning funding). See Prussman Affidavit at 2. The Association
also asserts that the arrangement contravenes 10 CFR 50.75(e)(1)(v),
which specifies that the terms of the contract must be with the
licensee's customers and include provisions that the electricity buyers
will pay for decommissioning. See Prussman Affidavit at 2.
At bottom, the issue here is whether the applicants' financial
assurance arrangement is lawful under 10 CFR 50.75 and the
``equivalent'' of those otherwise prescribed in the regulations (10 CFR
50.75(e)(1)(i)-(v)). The issue raises genuine disputes of law and fact
and we admit it for hearing.\25\ We now move to the remaining
decommissioning issues. None of these is admissible.
---------------------------------------------------------------------------
\25\ CAN raises related issues: whether NRC approval of the
transfers will deprive the Commission of authority to require PASNY
to conduct remediation under decommissioning, and whether, under
those circumstances, PASNY would no longer have access to the
decommissioning trust fund for the remediation it would need to
complete. See CAN's Reply Brief at 14. These issues relate to the
admitted issue involving 10 CFR 50.75, supra, and CAN may address
them at the hearing in that context.
CAN and the Association should be aware, however, that the
decommissioning trust agreement has been modified somewhat by the
NRC staff's November 9, 2000 orders. See both Staff Orders at 6
para. 9.
---------------------------------------------------------------------------
b. Commitment and Ability to Decommission Indian Point 3 to
Greenfield Condition. Cortlandt's first substantive issue regarding
decommissioning funding is whether the Entergy companies are both
committed and financially able to decommission the Indian Point 3
facility to ``greenfield'' condition \26\ and thereby give Cortlandt
the benefits of the greenfield decommissioning of not only Unit 3 but
also Units 1 and 2 (whose decommissioning awaits the decommissioning of
Unit 3).\27\
---------------------------------------------------------------------------
\26\ See Cortlandt's Petition at 8; Cortlandt's Supplemental
Filing at 2; Affirmation of Peter Henner at para.9, 26(a), 31-32,
35-36, 52, 61; Sansoucy Letter at 4. Cortlandt is particularly
concerned about whether the transferees have the financial ability
to remove permanently the spent fuel rods from the site upon
decommissioning, without using dry cask storage. See Affirmation of
Peter Henner at para. 12; Sansoucy Letter at 3; Cortlandt Verified
Petition at 16. PASNY estimates that the fund for decommissioning
both the FitzPatrick and Indian Point 3 plants will contain $1.9
billion at the time of license expiration. See Cortlandt Verified
Petition at 11.
\27\ See Affirmation of Peter Henner at para. 7. Although it is
less than clear, Cortlandt appears to argue that the full
decommissioning of Indian Point Unit 1 was postponed to coincide
with the decommissioning of Units 2 and 3. See Affirmation of Peter
Henner at Paras. 43-46; Cortlandt's Reply Brief at 14. Units 1 and 2
are not owned by PASNY and are not the subject of this proceeding.
---------------------------------------------------------------------------
Concerning the Entergy companies' commitment, Cortlandt maintains
that the transfer documents do not commit Entergy Indian Point to
greenfield decommissioning, even though the planning for greenfield
decommissioning must begin soon if it is to be achieved.\28\ Cortlandt
does not trust Entergy Indian Point, as a for-profit entity, to spend
more than the minimum amount possible to decommission the facility,
even if this means decommissioning it to less than greenfield
conditions.\29\
---------------------------------------------------------------------------
\28\ See Affirmation of Peter Henner at para. 35.
\29\ See Affirmation of Peter Henner at Paras. 36, 41; Cortlandt
Verified Petition at 11.
---------------------------------------------------------------------------
Concerning the Entergy companies' ability to fund decommissioning,
Cortlandt questions the adequacy of the decommissioning fund in light
of Entergy Indian Point's joint and several liability for Entergy
FitzPatrick's obligations.\30\ It also challenges the applicants'
reliance on the decommissioning cost estimate established in the NRC's
regulations, arguing that the actual costs may be higher than the
regulations envision.\31\ Cortlandt objects that the applicants have
not made enough information available for Cortlandt to determine the
sufficiency of the decommissioning fund.\32\ Cortlandt explains that
``greenfielding'' is particularly important to it because the plant
property is a prime area for either residential/commercial development
or recreational use.\33\
---------------------------------------------------------------------------
\30\ See Cortlandt's Reply Brief at 11.
\31\ See Cortlandt's Reply Brief at 11-12.
\32\ See Cortlandt's Petition at 8; Cortlandt's Supplemental
Filing at 3.
\33\ See Affirmation of Peter Henner at para. 33; Cortlandt
Verified Petition at 10.
---------------------------------------------------------------------------
The principal difficulty Cortlandt faces with this issue is that
our regulations do not require Entergy Indian Point to decommission the
plant to greenfield condition. Although Cortlandt may have grounds for
an action in a State Court against PASNY for breach of a contractual
commitment to return the facility land to greenfield condition,\34\
Cortlandt has provided no basis for us to question Entergy Indian
Point's ability or willingness to comply with the NRC's decommissioning
requirements.
---------------------------------------------------------------------------
\34\ See note 6, supra. Cortlandt refers to a ``social compact''
between Cortlandt and PASNY. According to Cortlandt, PASNY agreed in
this compact to decommission Indian Point Units 1, 2 and 3 to
greenfield condition in return for Cortlandt agreeing to permit the
siting of Indian Point 3 at its current location. See Cortlandt's
Reply Brief at 10-11. Similarly, Cortlandt asserts that ``[t]he
monies in the decommissioning fund were contributed based on
[PASNY's] commitment to the surrounding community, including
[Cortlandt], to restore the site to greenfield conditions.''
Cortlandt asserts that the applicants cannot legitimately argue that
greenfielding is beyond the scope of the transfer proceeding yet, at
the same time, transfer the money that was placed in the
decommissioning fund on the understanding that it would be used to
``greenfield'' the site. See Cortlandt's Reply Brief at 15.
---------------------------------------------------------------------------
Cortlandt's argument has other flaws as well. Its challenge to the
applicants' use of the very decommissioning cost estimate methodology
sanctioned by our rules amounts to an impermissible collateral attack
on 10 CFR 50.75.\35\ Cortlandt has not attempted to justify a waiver
here of our rule prohibiting such attacks. See 10 CFR 2.1329. Notably,
the fund's current assets exceed regulatory requirements.\36\ Finally,
the decommissioning funds are held in a special fund, separate and
apart from Entergy Indian Point's other assets, and are therefore
unaffected by any joint and several liability that Entergy Indian Point
may have for the obligations of Entergy FitzPatrick.
---------------------------------------------------------------------------
\35\ See Vermont Yankee, CLI-00-20, 52 NRC at __, slip op. at 8.
CAN also challenges Entergy's use of our generic decommissioning
cost formula. See CAN's Petition at 18-23; CAN's Reply Brief at 12-
13. For the reasons we gave in Vermont Yankee, 52 NRC at __, slip
op. at 8, we find CAN's claim inadmissible.
\36\ As we indicated in Seabrook, CLI-99-6, 49 NRC at 218 n.9,
power reactor licensees will occasionally set aside more funds than
the NRC requires--generally to cover activities such as the removal
and subsequent disposal of spent fuel or non-radioactive structures
and materials beyond the level necessary to reduce residual
radioactivity to the levels required under our regulations.
Moreover, other governmental agencies, such as the FERC and state
public utilities commissions, may also impose funding requirements
which licensees may have to satisfy, over and above those of the
NRC.
---------------------------------------------------------------------------
For the reasons set forth above, this issue is not admissible.
c. Extension or Renewal of Indian Point 3 License. Cortlandt's next
substantive issue is whether the Entergy
[[Page 78206]]
companies would seek to extend or renew the Indian Point 3 operating
license (which expires in 2015) \37\ and thereby delay Cortlandt's
enjoyment of the full panoply of health-and-safety benefits associated
with the expected decommissioning of all three units.\38\ Specifically,
Cortlandt refers to its expectations that PASNY would dismantle and
move the facility (i.e., Unit 3) offsite and that any onsite storage of
spent fuel by PASNY would be of limited duration.\39\ Cortlandt claims
that any delay in decommissioning Unit 3 (and any consequent
postponement of the decommissioning of Units 1 and 2) will adversely
affect Cortlandt's health and safety interests \40\ by subjecting
Cortlandt and its citizens to the possibility of increased radiological
exposure as a result of both the continued operation of the plant and
the continued (and possibly expanded) onsite storage of spent fuel.\41\
By contrast, Cortlandt expects Entergy Indian Point, as a for-profit
entity, to run the plant as long as possible, in order to continue
generating revenue.\42\ For this reason, Cortlandt asserts that, with
the time for decommissioning planning so near, the NRC staff's
assessment of financial ability must not be truncated, but should
instead include an evaluation of the transferees' ability to
decommission Indian Point 3--both as currently licensed and as that
license may be renewed or extended.\43\
---------------------------------------------------------------------------
\37\ See Affirmation of Peter Henner at para. 3. Cortlandt
explains that certain other Entergy companies are already in the
process of renewing the licenses of other nuclear plants (e.g.,
Arkansas One), thereby purportedly increasing the likelihood that
Entergy Indian Point would likewise seek to renew the Indian Point 3
license. See Affirmation of Peter Henner at 25(b).
Along similar lines, Cortlandt also asks the Commission to
consider the impact of the proposed transfers on possible requests
for extensions and/or renewals of the licenses for Unit 2 at Indian
Point. See Cortlandt's Petition at 8-9; Cortlandt's Supplemental
Filing at 2, 4. Cortlandt explains that the operating license for
this unit expires in 2013. See Affirmation of Peter Henner at para.
3. According to Cortlandt, the instant license transfer application
will affect whether and by whom a future application for license
renewal is ultimately made. See Affirmation of Peter Henner at para.
39.
\38\ See Affirmation of Peter Henner at para. 6, 7, 11, 44;
Cortlandt's Supplemental Filing at 3; Cortlandt's Reply Brief at 12-
14. Cortlandt explains that Indian Point Unit 1 has not been an
operating facility since 1974 but has yet to be fully decommissioned
(see Affirmation of Peter Henner at para. 3) and claims that
Consolidated Edison Inc. of New York (``ConEd,'' the owner of Indian
Point Units 1 and 2) has committed to decommission its units for
unrestricted use at the same time as PASNY decommissions Unit 3 for
unrestricted use. See Cortlandt's Petition at 8-9; Cortlandt's
Supplemental Filing at 2, 4.
\39\ See Cortlandt's Petition at 5; Cortlandt's Supplemental
Filing, at 4; Cortlandt Verified Petition at 16.
\40\ See Affirmation of Peter Henner at para. 11.
\41\ See Affirmation of Peter Henner at Paras. 25(b), 34;
Cortlandt Verified Petition at 16.
\42\ See Affirmation of Peter Henner at Paras. 36, 40; Cortlandt
Verified Petition at 11.
\43\ See Affirmation of Peter Henner at para. 6; Cortlandt's
Reply Brief at 12-14.
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These concerns do not fall within the scope of this license
transfer proceeding. Entergy Indian Point does not here seek in its
application to renew or extend the Indian Point 3 operating license,
nor does its pending application assume such a request. Moreover, a
request to renew or extend the license would seem just as likely from
PASNY as from Entergy Indian Point, assuming the plant remains
profitable. Finally, in posing this issue, Cortlandt overlooks its
right to seek intervenor status in any application for license renewal
or license extension that Entergy Indian Point may file. These grounds
for rejection apply equally to Cortlandt's concerns regarding delayed
decommissioning of the three units, the resulting need both to store
additional spent fuel onsite during the plant's extended life and the
resulting need to continue the storage of current spent fuel for a
longer time than Cortlandt had anticipated.\44\
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\44\ See Cortlandt's Petition at 5; Cortlandt's Supplemental
Filing at 4; Affirmation of Peter Henner at Paras. 11-13, 61;
Sansoucy Letter at 3; Cortlandt Verified Petition at 16; Cortlandt's
Reply Brief at 12, 14.
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In a related vein, Cortlandt expresses concern that the Indian
Point 3 facility will be used as a temporary repository for spent fuel
from other nuclear facilities owned by the Entergy family of
companies.\45\ This is pure speculation. The transfer application does
not seek such authority, and the Indian Point 3 facility could not
accept spent fuel from other facilities without transshipment license
authority. Should Entergy ever seek such authority, Cortlandt would
have the right to seek intervenor status.
---------------------------------------------------------------------------
\45\ See Affirmation of Peter Henner at para. 25(c); Cortlandt
Verified Petition at 16.
---------------------------------------------------------------------------
d. Management of Indian Point 3 Decommissioning Fund. Cortlandt
next questions whether sufficient controls exist regarding the
management of the decommissioning fund.\46\ It suggests that the
decommissioning agreements contain ill-defined and uncertain
liabilities for the public, and expresses concern that any such
additional liabilities or costs incurred by PASNY will have to be
absorbed either by PASNY customers or the New York taxpayers.\47\ Also,
Cortlandt (through its expert, Mr. Sansoucy) claims that PASNY may be
retaining decommissioning funds in excess of the amount required and
that the application is silent as to the distribution of any excess
money remaining after decommissioning.\48\
---------------------------------------------------------------------------
\46\ See Cortlandt's Petition at 8.
\47\ See Cortlandt's Petition at 9.
\48\ See Sansoucy Letter at 3.
---------------------------------------------------------------------------
With the exception of Mr. Sansoucy's assertion concerning excess
funds, the issue is overly vague. Cortlandt nowhere identifies the
liabilities about which it is concerned. Nor does it explain why it
believes they would fall on the public's shoulders. Mr. Sansoucy's
claim, while sufficiently specific, lies beyond the scope of this
proceeding. The Commission does not have statutory authority to
determine the recipient of excess decommissioning funds. For these
reasons, we decline to admit this issue.\49\
e. Scope of Commission's Consideration of Indian Point 3
Decommissioning Issues to Include Indian Point 2 Matters. In addition
to raising these substantive issues regarding decommissioning funding,
Cortlandt requests that the Commission consider the transfer in light
of both the fact that Units 2 and 3 share common facilities and the
possibility that Entergy Indian Point (or one of its affiliates) may
acquire Indian Point Unit 2--a possibility which Cortlandt states is
specifically contemplated in the Indian Point 3 transfer
agreements.\50\ We decline to expand the scope of this proceeding in
the two ways that Cortlandt requests. Cortlandt has not explained how
either the commonality of facilities or Entergy's possible purchase of
Unit 2 bears on the acceptability of the Indian Point 3 transfer.
---------------------------------------------------------------------------
\49\ To the extent that Mr. Sansoucy intended here to argue that
such retention of decommissioning funds was a way of making a profit
off of the fund, we address that issue at page 33, below.
\50\ See Affirmation of Peter Henner at Paras. 8, 42, 46;
Cortlandt's Reply Brief at 14. In fact, Entergy recently announced
that it had contracted to purchase from ConEd both Indian Point
Units 1 and 2. See ``Entergy to Purchase 2 Nuclear Power Plants in
New York State,'' Wall Street Journal at A-6 (Nov. 10, 2000).
---------------------------------------------------------------------------
f. Entergy's Intention to Make a Profit on the Decommissioning
Fund. CAN objects to Entergy's espoused intent to make a profit on the
decommissioning trust funds and to return that profit to its
shareholders. To accomplish this, Entergy would, according to CAN, have
to cut corners and thereby risk public health and safety. See CAN's
Petition at 21. CAN believes that Entergy will try to turn a profit by
minimizing the onsite remediation by constructing new power plants on
the decommissioning sites and rotating the decommissioning work
schedules at simultaneously decommissioning facilities. See CAN's
Petition at 21, 22.
[[Page 78207]]
In support, CAN refers us to page 23 of Entergy's 1999 Annual
Report.\51\ We have checked the cited page on Entergy's web page and
find no such statement. Although page 24 of the Annual Report does
contain a reference to ``manag[ing] decommissioning of nuclear plants .
. . as a source of earnings,'' the reference is made in the context of
Entergy's contracts to decommission plants owned by other entities. We
conclude that CAN has provided no basis for this issue, and we decline
to admit it.
---------------------------------------------------------------------------
\52\ CAN's Petition at 21 and n.22. However, CAN provides us a
copy of neither the report nor the cited page. Even after Entergy
denied ever expressing such an intent (Answer to CAN's Petition at
13 n.9), CAN in its Reply Brief still failed to support its claim
with the necessary documentation.
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g. Lack of Provision for Off-Site Remediation. CAN asserts that,
despite both plants having an incontestible record of off-site releases
of hazardous radioactive and non-radioactive material, neither the
Decommissioning Cost Estimates, the Purchase and Sale Agreement nor the
License Transfer Applications contain a provision addressing off-site
remediation. See CAN's Petition at 20, 23-26. In support, CAN points
specifically to section 2.4(b) of the Purchase and Sale Agreement,
which provides that Entergy will not assume decommissioning
responsibility for the remediation of off-site contamination occurring
during PASNY's ownership of the plants. Although CAN acknowledges that
it may be unfair to hold Entergy accountable for contamination
occurring under PASNY's ownership, it points out that the Purchase and
Sales Agreement contains no provision holding PASNY liable for that
contamination. CAN is concerned that an NRC approval of the transfer
could absolve both Entergy and PASNY of such responsibility. See CAN's
Petition at 23-24.
To resolve this problem, CAN proposes that the Commission impose
one of the following two conditions on the transfer:
``Through the Environmental Impact Statement requested
[elsewhere in CAN's Petition, the NRC staff should] establish an
accurate and detailed study of [the off-site] contamination . . .
which PASNY must remediate before the license can be transferred.''
or
PASNY ``should not simply be released from all licensee
responsibility, but rather issued a ``decommissioning'' license
until [PASNY] has completed'' whatever remediation for which Entergy
is not assuming responsibility.
See CAN's Petition at 24. If the Commission imposes either of these
conditions, CAN requests that it also address how to fund this partial
remediation. CAN is concerned that PASNY's accountability for partial
site remediation and cleanup not compromise the quantity of funds
available to complete the decommissioning after the license expires.
See CAN's Petition at 24. CAN also provides a third alternative
condition:
The Commission disregard ``clause 2.4(b) . . . insofar as [it
affects] decommissioning responsibilities . . .;, and Entergy should
be required to conduct a complete . . . decommissioning without
regard to whether the off-site contamination was caused by [PASNY]
or Entergy, but [with] Entergy . . . allowed to recover those
[actual] costs from [PASNY that] . . . exceed the amount in the
Decommissioning Trust.''
See CAN's Petition at 24-25.
Applicants respond that nothing in the purchase and sales agreement
relieves PASNY of any liabilities not assumed by the Entergy
applicants, and that PASNY ``retains liability for off-site disposal,
storage, etc. that occurred prior to closing.'' See Answer to CAN's
Petition at 14. Our review of the agreement gives us no reason to
question the applicants' interpretation. We therefore see no reason to
impose the conditions CAN has requested. Moreover, we see no basis for
CAN's concern that this retained liability will somehow deplete the
FitzPatrick and Indian Point 3 decommissioning trust funds. Those funds
are set aside in a trust specifically and exclusively dedicated to the
purpose of decommissioning the plant sites; the trust cannot be used
for offsite remediation.\52\ In short, we see nothing in CAN's offsite
remediation argument that raises a material issue of fact or law
meriting a hearing.
---------------------------------------------------------------------------
\52\ Decommissioning trusts are reserved for decommissioning as
defined in 10 CFR Sec. 50.2. Thus, offsite remediation would not be
an accepted expense. However, some licensees use the decommissioning
trust to accumulate funds for both ``decommissioning'' as NRC
defines it and decommissioning in the broader sense that includes
interim spent fuel management, non-radioactive structure demolition,
and site remediation to greenfield status. The Commission accepts
this approach as long as the NRC-defined ``decommissioning'' funds
are clearly earmarked. Also, once the funds are in the
decommissioning trust, withdrawals are limited by 10 CFR Sec. 50.82,
so that non-``decommissioning'' funds (again, as defined by the NRC)
could only be spent after the NRC-defined ``decommissioning'' work
had been finished or committed.
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h. Environmental Impact Statements. CAN requests the Commission to
prepare environmental impact statements (``EIS'') regarding the
adequacy of the decommissioning funding. See CAN's Petition at 26-27.
CAN later refines this request to cover only the levels of on- and off-
site contamination. See CAN's Reply Brief at 18. CAN points out that,
prior to 1980, plants throughout the United States buried radioactive
waste both on- and off-site, with poor documentation and few
safeguards. CAN would like the Commission to prepare EIS's for the two
plants to determine the extent of contamination and to set realistic
funding requirements. CAN points to the experimental nature of
decommissioning and to the decommissioning cost overruns at every
decommissioned plant to date. See CAN's Petition at 26-27. CAN doubts
Entergy's claim that, with experience, it can decrease its
decommissioning costs by developing special techniques. CAN also doubts
that Entergy will have garnered that experience by the time it needs to
decommission both Indian Point 3 and FitzPatrick starting in 2013 and
2015, respectively.\53\ CAN further asserts that the Entergy companies'
inability to recoup their decommissioning expenses from ratepayers
constitutes yet another obstacle to successful decommissioning. See
CAN's Petition at 28. We decline to admit this issue for the same
reasons set forth in our recent decision in Vermont Yankee:
---------------------------------------------------------------------------
\53\ See CAN's Petition at 27-28. The FitzPatrick license
actually expires in 2014.
CAN's ``NEPA'' issue amounts to another effort to litigate site-
specific decommissioning cost estimates. CAN's position rests on the
assumption that our regulations require AmerGen Vermont, in its
license transfer application, to provide an estimate of the actual
decommissioning and site clean-up costs. As explained in the
previous section of this order, our regulations impose no such
requirement. Our decommissioning funding regulation (10 CFR
50.75(c)) generically establishes the amount of decommissioning
funds that must be set aside.\47\ CAN cannot challenge the
regulation in this proceeding. As noted above, the NRC's
decommissioning funding rule reflects a deliberate decision not to
require site-specific estimates in setting decommissioning funding
levels. CAN has not sought a waiver of that rule in this proceeding.
See 10 CFR 2.1329 * * *; Seabrook, CLI-99-6, 49 NRC at 217 n.8. Nor
has CAN reconciled its demand for a NEPA review with our rules'
``categorical exclusion'' of license transfers from NEPA
requirements. See 10 CFR 51.22(c)(21).
\47\ CAN's supporting argument that decommissioning technology
is still in an experimental stage fails for the same reason, i.e.,
it is a collateral attack on 10 CFR 50.75(c) establishing the amount
of decommissioning funds that must be set aside. It is worth noting
that the NRC rule which CAN attacks, 10 CFR 50.75(c), is in fact
supported by a
[[Page 78208]]
generic environmental impact statement. See Generic Environmental
Impact Statement, NUREG-0586 (August 1988) (issued in conjunction
with the promulgation of 10 CFR 50.75 and 50.82). See generally
Final Rule, ``General Requirements for Decommissioning Nuclear
Facilities,'' 53 FR 24018, 24051 (June 27, 1988).\54\
---------------------------------------------------------------------------
\54\ CLI-00-20, 52 NRC at____, slip op. at 8-10 (final footnote
omitted). See also Monticello, CLI-00-14, 52 NRC at 59.
---------------------------------------------------------------------------
CAN also seeks an EIS on two grounds unrelated to
decommissioning: that the problems at Indian Point 3 which persuaded
Entergy to pass up an opportunity to become the plant's operator in
1996 still exist (see CAN's Petition at 48-51), and that the
Commission's failure to conduct an antitrust review constitutes a
major federal action affecting the quality of the environment (see
CAN's Petition at 61). CAN later broadens the first of these so as
to seek an EIS on the new owners' operation of both plants. See
CAN's Reply Brief at 17-18. We reject these two EIS issues on the
same grounds as set forth immediately above. In addition, we exclude
the first EIS issue (as broadened) on the ground that the scope of
this proceeding does not include the new owners' operation of the
plants--but includes only the transfer of their operating licenses.
Further, we exclude the antitrust EIS issue on same ground we used
to reject CAN's same argument in Vermont Yankee.\55\
\55\ CLI-00-20, 52 NRC at____, slip op. at 11 (footnote
omitted): The fact that a particular license transfer may have
antitrust implications does not remove it from the categorical
exclusion. In any event, because the AEA does not require, and
arguably does not even allow, the Commission to conduct antitrust
evaluations of license transfer applications, our purported
``failure'' to conduct such an evaluation cannot constitute a
Federal action warranting a NEPA review.
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4. CAN's Non-Labor Related Technical Qualifications Issues
CAN raises an array of challenges to the technical qualifications
of the workforce that will be employed at FitzPatrick and Indian Point
3 once the Entergy companies take over those plants. CAN's claims,
however, are not directly linked to the license transfers at issue
here, but rest largely on current operational issues at the two plants
and on Entergy's operation of other plants, including non-nuclear
plants. As in our recent Vermont Yankee and Oyster Creek decisions,
where we rejected claims all but identical to CAN's, we find here that
CAN has provided no documents, facts or expert opinion establishing a
genuine issue concerning technical qualifications. See also Millstone,
CLI-00-18, 52 NRC at 131-32, citing 10 CFR 2.1306(b)(2)(iii).
a. Age-Related Defects at Both Plants. CAN asserts that the Entergy
companies lack the ability to manage FitzPatrick (a boiling-water
reactor or ``BWR'') and Indian Point 3 (a pressurized-water reactor or
``PWR''). CAN claims that FitzPatrick is older and subject to more age-
related degradation than Entergy's other BWRs. See CAN's Petition at
29-36. CAN concludes that Entergy is significantly overstating its
claim of experience in maintaining and operating BWRs and that
Entergy's spotty record in managing PWRs (such as Indian Point 3)
suggests the company's ability to manage an increasing number of aging
reactors may be stretched past the breaking point. See id. at 29-30.
Based on these arguments, CAN asks the Commission to ``take into
consideration the effect of consolidating a large number of aging,
mismanaged and otherwise troubled facilities under a single corporate
umbrella, especially given the rigors of operating those facilities in
a deregulated electricity market without the flexibility of returning
to ratepayers to reimburse unexpected operating and maintenance
costs.'' See id. at 30.
CAN ignores Entergy Nuclear Operations' stated intent to employ the
same personnel as are currently working at the two plants. Nor does
CAN's Petition challenge these individuals' technical qualifications.
Its discussion of Entergy's experience in operating other BWRs and PWRs
and the age of other Entergy plants does not bear on the technical
qualifications of the transferees and their intended employees at
FitzPatrick and Indian Point 3. See Vermont Yankee, CLI-00-20, 52 NRC
at ____, slip op. at 11-13 (declining to admit a similar issue where
CAN failed to challenge the technical qualifications of the plant's
intended employees). We therefore decline to admit this issue.
b. Leak-Detection Problems at Both Plants. CAN points to alleged
leak detection problems at the two plants and asks the Commission to
require Entergy to modify inspections and leak detection equipment and
to institute programs to study the rate of crack propagation. CAN
further asks the Commission to oversee the development of systems and
procedures necessary to provide an objective review of these actions.
See CAN's Petition at 32-33. Moreover, CAN asks the Commission to deny
the license transfer application on the ground that Entergy, with a
tightly-packed maintenance schedule and a depleted workforce (due to
``profitability'' cuts), lacks the flexibility necessary to react
quickly to surprises at two or more generating plants. See CAN's
Petition at 33. In a similar technical challenge to the two
applications, CAN points to certain evidence that the Updated Final
Safety Analysis Reports (``UFSAR'') for both plants have not been kept
up-to-date, and argues that it would be premature to approve a transfer
of licenses for reactors which were in an unanalyzed condition. See
CAN's Petition at 34-36.
We recently addressed a quite similar argument from CAN in Vermont
Yankee concerning another company's ability to discern cracks and
leaks. We consider our response there equally dispositive of CAN's
contention in this proceeding:
These arguments address the adequacy of the plant's ongoing
safety-related programs. Operational issues of this kind will remain
the same whether or not the license is transferred. The Commission
has indicated that a license transfer hearing is not the proper
forum in which to conduct a full-scale health-and-safety review of a
plant.\14\
\14\ ``A license transfer proceeding is not a forum for a full
review of all aspects of current plant operation.'' See Oyster
Creek, CLI-00-6, 51 NRC at 213, 214 * * * CAN may, of course, file a
petition for staff enforcement action pursuant to 10 CFR 2.206 if it
is concerned about current safety issues at Vermont Yankee.
See Vermont Yankee, CLI-00-20, 52 NRC at ____, slip op. at 13.
Moreover, in Vermont Yankee, we rejected a similar request from CAN
(that the Commission require special training as a condition for its
approval of the transfer) on the ground that CAN ``failed to
demonstrate that a genuine dispute exists, with requisite specificity,
on this basis.'' See CLI-00-20, 52 NRC at ____, slip op. at 13. See
also 10 CFR 2.1306(b)(2)(iv). This ruling applies equally to CAN's
similar argument here.\56\
---------------------------------------------------------------------------
\56\ CAN indicated, for the first time in its Reply Brief, that
it was raising the cracks-and-leaks and UFSAR arguments not only as
technical and administrative problems meriting the Commission's
attention and correction, but also as an indication of the lack of
technical qualifications of the existing plants' staff, on whose
technical qualifications Entergy Nuclear Operations is relying in
the applications. See CAN's Reply Brief at 16. CAN's effort to
recast its claim is unavailing. As indicated in Vermont Yankee
(quoted in the text immediately above), any ongoing operational
deficiencies at nuclear plants subject to a license transfer must be
addressed regardless of the transfer.
---------------------------------------------------------------------------
c. Issues of Management ``Character''. CAN asserts that Entergy's
license transfer applications rely on the resources and experience of
the parent company (Entergy Corp.), its public utility subsidiaries
(Entergy Arkansas Inc., Entergy Gulf States Inc., Entergy Louisiana
Inc., and System Energy Resources Inc.), and its operations subsidiary
(Entergy Operations Inc.) to establish a track record as a nuclear
operator. CAN describes the operating records of these affiliates as
``mixed at best, irrelevant in some regards, and alarming in many
others.'' See CAN's Petition at 37. CAN further argues that, because
the majority of Entergy Nuclear
[[Page 78209]]
Operations'', Entergy FitzPatrick's and Entergy Indian Point's
corporate officers hold positions in other Entergy companies, these two
new companies will inevitably inherit the existing companies' record
and operational style. See CAN's Petition at 37; CAN's Reply Brief at
16. According to CAN, this record and style are reflected in the facts
that Entergy has among the highest number of NRC violations in the
United States and that the company's improved capacity factors are
``shadowed by questionable maintenance practices and inadequate
procedures, work performance, and operator training.'' See CAN's
Petition at 38. CAN relies not only on Entergy's record as a nuclear
generator; it also points to findings that, in the electrical
transmission and delivery business, Entergy has a record of
marginalizing safe operations by chronically postponing maintenance and
reducing the skilled workforce to levels that compromise worker and
public safety. See CAN's Petition at 38-40, citing findings of the
Texas Public Utility Commission (``Texas PUC'') and the Council of the
City of New Orleans, both in 1998.\57\
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\57\ See CAN's Petition at 39-40 (citing and quoting Public
Utility Commission of Texas, Docket No. 18249, Entergy Gulf States,
Inc., Service Quality Issues (Feb. 1998); Groesch, Report to New
Orleans City Council for the Alliance for Affordable Energy (Aug.
13, 1999); and Groesch, Statement before the New Orleans City
Council Utility Committee (Aug. 12, 1999)). The second and third of
these three documents are included in Exh. 9 to CAN's Petition.
---------------------------------------------------------------------------
Absent strong support for a claim that difficulties at other plants
run by a corporate parent will affect the plant(s) at issue before the
Commission, we are unwilling to use our hearing process as a forum for
a wide-ranging inquiry into the corporate parent's general activities
across the country. Here, CAN's various references to problems of other
Entergy subsidiaries, including the non-nuclear subsidiaries, tell us
little if anything about Entergy Nuclear Operations' technical
qualifications to operate FitzPatrick and Indian Point 3 using the same
workforce that is already there. See Vermont Yankee, CLI-00-20, 52 NRC
at ____, slip op. at 14-15, (concluding that ``claims of staffing
deficiencies at other nuclear facilities owned by AmerGen'' were
insufficient to trigger our hearing process). See also Oyster Creek, 51
NRC at 209-10.
Nor do we believe a hearing is merited by CAN's conclusory
assertions that the corporate culture of Entergy Nuclear Operations
will be tainted by the influence of high-level officials from the
parent company and other subsidiaries. CAN does not identify which
officials will undercut safety at Indian Point and FitzPatrick or
explain how they will do so. CAN's claims are too broad and too vague
to be suitable for adjudication. We therefore decline to admit this
issue.
d. Cost-Cutting Pressures. CAN questions whether Entergy
FitzPatrick and Entergy Indian Point can safely accomplish the goals
necessary for the companies to reduce costs to a level sufficiently low
for the plants' electric rates to be competitive, i.e., reducing
maintenance and outage times and workforce size.\58\ According to CAN,
Entergy's applications indicate a goal of 85-percent capacity (or 15-
percent downtime). CAN acknowledges that PASNY was able to meet the
same refueling schedule at Indian Point 3 that Entergy will need to
maintain, but says that PASNY did so only by unnecessarily exposing its
workforce to radiation. See CAN's Petition at 41-42. Finally, CAN draws
the Commission's attention to ConEd's decision not to replace the steam
generators at Indian Point Unit 2, warning that Entergy will experience
cost-cutting pressures similar to those which led to ConEd's
problems.\59\
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\58\ See CAN's Petition at 41-47. CAN points to the problems of
a foreign nuclear plant owner, British Energy, as an example of how
public safety can be adversely affected by over-reduction of the
workforce. See CAN's Petition at 44-46. See also Declaration of
David A. Lochbaum, dated July 31, 2000, at 2 (para. 9(a)), appended
as Attachment 3 to CAN's Petition.
\59\ See CAN's Petition at 42. ConEd has informed the NRC that
it has replaced these steam generators. See Letter from John A.
Zwolinski (NRC) to A. Alan Blind (ConEd) (Oct. 11, 2000).
---------------------------------------------------------------------------
CAN has failed to provide adequate support or basis for its general
``cost-cutting'' issue. It has not provided the necessary nexus between
the problems at other plants (some not even in this country) operated
by different companies and the difficulties it anticipates from Entergy
FitzPatrick, Entergy Indian Point and Entergy Nuclear Operations. See
Oyster Creek, CLI-00-6, 51 NRC at 209-10. Nor does it offer any factual
support for its claim that the Entergy companies will subordinate
safety to production goals or profits. See Oyster Creek, CLI-00-6, 51
NRC at 207 (``Absent [documentary] support, this agency has declined to
assume that licensees will contravene our regulations'') and cited
authority. Finally, CAN's speculation about the likelihood and
ramifications of staff reductions is insufficient to trigger a hearing
on this issue. CAN points to no information suggesting that Entergy
plans to reduce its staff below NRC requirements. As we stated in
Oyster Creek:
For key positions necessary to operate a plant safely, the
Commission has regulations requiring specific staffing levels and
qualifications. See 10 CFR Sec. 50.54(m). Other than those specific
positions, the licensee has a responsibility to ensure that it has
adequate staff to meet the Commission's regulatory requirements. If
a licensee's staff reductions or other cost-cutting decisions result
in its being out of compliance with NRC regulations, then (as noted
above) the agency can and will take the necessary enforcement action
to ensure the public health and safety. The Oyster Creek application
does not on its face suggest any likelihood of a cost-driven lapse
in compliance with NRC safety rules.
CLI-00-6, 51 NRC at 209. See also id. at 214 (``so long as personnel
decisions do not impose [a] risk [to the public health and safety], our
regulations and policy do not preclude a licensee from reducing or
replacing portions of its staff'').
5. The Association's Labor-Related Technical Qualifications Issues
The Association raises labor-related issues which, it claims, bear
directly on the question whether the transfer will ensure the presence
of ``sufficient management personnel, and appropriate working
conditions, so as to assure continued safe operation of the
facilities.'' See Association's Petition at 9. As noted in the
discussion of standing, supra, the Association alleges a precipitous
decline in morale among the members of the Association; a high level of
confusion regarding future rights and benefits; a significantly
increased attrition rate among Association members; a general belief
that the transfer will markedly reduce their rights and benefits; and a
developing uneasiness with, and unwillingness to trust, or communicate
safety-related problems to, senior executive nuclear management or
corporate management. See Association's Petition at 17.
The Association's claims arise out of what it says is the
``increasingly adversarial nature of the dialogue (or lack thereof)
between its members and the proposed transferor and transferees
concerning the putative rights and benefits that will be available to
petitioners following the proposed transfer.'' See id. A contest over
``putative rights and benefits'' amounts, of course, to a labor dispute
rooted in economic concerns. Indeed, the Association has brought state-
court litigation to adjudicate the labor controversy and, as if to
stress the labor relations nature of its claims, the Association has
included its lengthy
[[Page 78210]]
state-court complaint in the record before us.\60\
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\60\ See Verified Petition, Nuclear Generation Employees Ass'n
v. New York Power Auth. (Sup. Ct., Westchester Co., NY), Index No.
11129/00 (filed July 27, 2000) (appended to Association's Reply
Brief as Exh. 1). See also Association's Reply Brief, dated Aug. 3,
2000, at 3.
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As a nuclear safety agency, however, we are loath to step into the
middle of a labor dispute. The Association seemingly expects us to
consider whether Entergy's commitments regarding salary, benefits and
job security are so unjust as to ruin employee morale and cause
excessive attrition at FitzPatrick and Indian Point 3. But we have
neither the expertise nor the legislative charter of a National Labor
Relations Board or labor mediator. We see no natural limits to the
labor issues the Association wants us to consider. We thus find the
Association's labor grievances unsuitable for a license transfer
hearing.
The Association, apparently sensitive to the Commission's
reluctance to enmesh itself in management-worker conflicts at nuclear
facilities, attempts to argue that its labor dispute with PASNY and
Entergy translates into a health and safety problem that the Commission
should consider at a hearing. But, while the Association's pleadings
frequently allude to alleged health and safety effects of the labor
controversy, what the Association has given us, at bottom, consists of
specific accusations of bad faith in labor relations and that are tied
to vague or conclusory assertions about health and safety. On the
latter issue, the only one falling within the NRC's jurisdiction, the
Association provides no expert support, no concrete facts, and no
claims of specific rule violations.
Further, the specific concerns about pay, benefits and conditions
that the Association points to as the source for morale issues are
potential (not certain) changes in pay, benefits and conditions that
would not occur for between one and three years after completion of the
transfer. The Commission is particularly reluctant to engage in
prognostication of the impact of changes in current working conditions
that the Association has in its own pleadings and affidavits
acknowledged may occur years in the future. Unsupported hypothetical
theories or projections, even in the form of an affidavit, will not
support invocation of the hearing process. In short, the Association
has not provided tangible regulatory issues around which to organize a
hearing.
The Association's most specific health and safety claims are
charges that the labor controversy will provoke high attrition and poor
morale. But neither claim raises a genuine controversy for hearing. As
for the purported increase in attrition, the Association merely says
that it is so. The Association does not provide factual data, expert
witnesses, or even affidavits of employees who have or will quit as a
result of the license transfer.\61\ As for morale, we do not see how we
could adjudicate such an abstract concept at a hearing absent some
allegation of specific rule violations or specific safety challenges
arising out of lower morale. Notably, the Association has submitted no
evidence, such as inspection reports or other indicators, suggesting an
increase in safety problems at the two plants.
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\61\ The Association's failure to provide actual data on
departing employees renders virtually meaningless its reference to a
``more than doubl[ing]'' of the normal attrition rate for its
members. See Joint Declaration at 6. By way of extreme example, if
the normal attrition rate were one person per year per plant, a
doubling of this rate would provide no conceivable basis for health-
and-safety concerns.
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We add a cautionary note. Today's decision does not hold that
economic concerns, whether of a labor, commercial or other nature, are
categorically excluded from the NRC hearing process. Such concerns, if
closely tied to specific health and safety concerns or to potential
violations of NRC rules, can be admitted for hearing. See, e.g., North
Atlantic Energy Serv. Corp. (Seabrook Station, Unit 1), CLI-99-27, 50
NRC 257, 262-63 (1999). Indeed, in our Subpart M rulemaking, which
established our current license transfer hearing process, we expressed
a willingness to review labor-type issues to a limited extent:
[I]f a significant loss and replacement of critical plant personnel
can be anticipated as the result of a particular license transfer[,]
this might well be a reason not to approve the transfer or to
condition the transfer on the maintenance of adequate technical
qualifications.
* * * * *
If, in a particular license transfer case, a need is identified for
submission of a critical staff retention plan in order to address
the applicant's technical qualifications, this matter can readily be
addressed in the hearing process and can ultimately result in a
condition on license transfer approval.
Final Rule, ``Streamlined Hearing Process for NRC Approval of License
Transfers,'' 63 FR 66721, 66723 (Dec. 3, 1998).
Claims resting on the loss and replacement of ``critical'' staff
derive directly from our rules, which specify both minimum staffing
requirements for trained operators at reactors and the technical
qualifications of such employees. See 10 CFR Sec. 50.54(m). See also
Oyster Creek, CLI-00-06, 51 NRC at 209 (NRC staffing regulations cover
``key positions necessary to operate the plant safely''). Here, the
Association asserts no current or future section 50.54(m) violations
arising out of the PASNY-Entergy license transfer. (Nor, frankly, would
we expect such a challenge from the Association, some of whose members
hold the very staff positions covered by section 50.54(m).)
Notwithstanding the narrow exception in the rulemaking language
quoted above, the Commission generally does not involve itself in the
personnel decisions of licensees. As we indicated in Oyster Creek:
The Commission is interested in whether the plant poses a risk to
the public health and safety, and so long as personnel decisions do
not impose that risk, our regulations and policy do not preclude a
licensee from reducing or replacing portions of its staff. . . .
CLI-00-6, 51 NRC at 214. See also Vermont Yankee, CLI-00-20, 52 NRC at
____, slip op. at 14 n.16 and accompanying text. We would require
personnel claims considerably more concrete than the Association's--
i.e., specific indications of a potential rule violation or of
deteriorating safety conditions linked to the license transfer--before
we would consider admitting plant staffing questions into an NRC
license transfer hearing.
We by no means intend to denigrate the concerns of the
Association's members, who work at FitzPatrick and Indian Point 3 and
have an understandable interest in working conditions at the two
plants. The question whether those conditions are fair and lawful is an
important one. But our license transfer hearings under Subpart M are
designed solely to adjudicate genuine health and safety disputes
arising out of license transfers. The grant of hearings merely on the
broad assertion that contentious labor controversies will lead to
deleterious health and safety consequences would have no stopping point
and would risk converting our agency into a labor relations forum,
contrary to our statutory mission and at a significant cost in
resources and effort.
For these reasons, we decline to admit for hearing the
Association's labor-related issues.\62\
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\62\ Like the Association, CAN raises the issue that much of the
plants' existing staff will quit their jobs as a result of the
transfer. See CAN's Petition at 44; CAN's Reply Brief at 16. But CAN
has provided little detail, and no back-up support, for this claim.
For the reasons stated in the text, CAN's claims on this score are
inadmissible. See also Oyster Creek, CLI-00-6, 51 NRC at 209-10,
214.
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[[Page 78211]]
6. Issues Involving Emergency Evacuation Plans
Cortlandt asks the Commission to consider the impact of the
proposed transfers on the need for changes to the Emergency Evacuation
Plans. See Cortlandt's Supplemental Filing at 2. It expresses similar
concerns about whether the transferees for Indian Point 3 will
discontinue the emergency warning program, emergency preparedness
training program, and health impact training program currently run by
PASNY.\63\
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\63\ See Affirmation of Peter Henner at para.25(d); Cortlandt
Verified Petition at 5, 8, 19 (referring to ``emergency planning and
health impact training programs;'' ``emergency preparedness plans,
local preparedness resources, and the Four County Notification
System;'' and ``the payment of the State Emergency Management
Office, bus driver training and reception centers, public education
programs, including emergency planning and radiological training and
medical drills'').
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The new licensees will have to meet all of the requirements of 10
CFR 50.47 and Appendix E to 10 CFR part 50 concerning emergency
planning and preparedness. The emergency notification system is
required by the regulations and will remain in place. Cortlandt has not
alleged, with supporting facts, that Entergy is likely to violate the
NRC's emergency planning rules. Under these circumstances, we see no
basis for further pursuit of this issue.
7. Appropriateness of Indian Point 3 Transfer, Given Its Location
Cortlandt asks the Commission to consider the appropriateness of
the proposed Indian Point 3 transfer in light of the plant's proximity
to metropolitan areas (New York City, White Plains and Peekskill) and
to locations for sporting and cultural events. See Cortlandt's
Supplemental Filing at 4. Cortlandt explains that the plant is located
24 miles north of New York City in the heavily-populated Westchester
County, and that it is two miles from the City of Peekskill (population
20,000), 2 miles from a military reservation (Camp Smith), and eight
miles from West Point. See Affirmation of Peter Henner at Paras. 2-3.
We do not see how Indian Point 3's proximity to these locations is
relevant to the question whether to approve the license transfer for
that plant. We therefore decline to admit this issue.
8. Antitrust Issue
Cortlandt expresses an antitrust concern that, if Entergy merges
with Florida Power and Light Company (FPL Group), the combined entity's
market share will give it an inordinate amount of control over the
nation's nuclear industry. Cortlandt's Reply Brief at 17. As we have
explained in prior cases, the Commission no longer conducts antitrust
reviews in license transfer proceedings.\64\
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\64\ See Vermont Yankee, CLI-00-20, 52 NRC at ____, slip op. at
11, 19-20; Oyster Creek, CLI-00-06, 51 NRC at 210; Kansas Gas and
Elec. Co., (Wolf Creek Generating Station, Unit 1), CLI-99-19, 49
NRC 441 (1999). See also Final Rule, ``Antitrust Review Authority:
Clarification,'' 65 Fed. Reg. 44,649 (July 19, 2000).
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CAN also raises the antitrust issue, acknowledging our precedents
but disagreeing with them. CAN criticizes the Commission for having
declined to conduct further antitrust review in these cases, calls that
decision an abdication of the agency's antitrust responsibilities under
the AEA, and predicts that such abdication will lead to a rapid
consolidation of nuclear power ownership through premature acceptance
of this and other Entergy applications and overly-accelerated hearing
schedules. CAN's Petition at 13. See also id. at 14-15, 56-64; CAN's
Reply Brief at 18-20. For the reasons set forth in both the Wolf Creek
decision and the rulemaking, supra, we do not agree with CAN's
characterization that we are abdicating our statutory authority. Nor do
we believe we are acting precipitously in giving expedited treatment to
license transfer applications. We therefore find this issue
inadmissible.\65\
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\65\ Regarding CAN's prediction of industry consolidation, see
note 16, supra.
---------------------------------------------------------------------------
9. Independent Evaluation of the Plants
CAN asserts that, given the historical problems in NRC's Region I,
the Commission should arrange for an independent analysis of the two
plants' conditions. See CAN's Petition at 51-54. We decline to do so
for the same reasons we gave in Vermont Yankee when rejecting CAN's
similar issue:
An inquiry such as the one CAN advocates would go considerably
beyond the scope of our inquiry in this proceeding, i.e., AmerGen
Vermont's qualifications to own and operate the Vermont Yankee
plant. We also note that Region I's overall performance in
overseeing Vermont Yankee is far outside the scope of a license
transfer proceeding. CAN does not explain how any action taken with
respect to this license transfer, whether it be denial of the
license or the imposition of conditions on the transferee, could
remedy CAN's broad complaints that NRC's Region I has abdicated its
oversight responsibilities.\66\
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\66\ CLI-00-20, 52 NRC at ____, slip op. at 15. See also
Curators of the University of Missouri, CLI-95-1, 41 NRC 71, 121
(1995); Final Rule, ``Rules of Practice for Domestic Licensing
Proceedings--Procedural Changes in the Hearing Process,'' 54 FR
33168, 33171 (Aug. 11, 1989) (``With the exception of NEPA issues,
the sole focus of the hearing is on whether the application
satisfies NRC regulatory requirements, rather than the adequacy of
the NRC Staff performance'').
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V. Other Procedural Matters
A. Designation of Issues
Our opinion in this case has considered in some detail numerous
concerns raised by the various petitioners. Some issues we have found
admissible, and some inadmissible. To avoid confusion, and to delineate
the boundaries of the admitted issues, we direct the parties to
organize their presentations at the hearing around the following two
issues:
Whether Entergy Indian Point's liability for certain financial
obligations of Entergy FitzPatrick would place the Indian Point 3
plant in financial jeopardy in the event of an accident at either
Indian Point 3 or FitzPatrick and would thereby call into question
whether Entergy Indian Point has the funds necessary to operate the
Indian Point plant safely, within the meaning of 10 CFR 50.33(f)(2),
50.33(f)(3) and 50.80(b)?
Whether the transfer applicants' plan for handling
decommissioning funds for the FitzPatrick and Indian Point nuclear
plants--whereby control of the decommissioning funds will remain
with PASNY but responsibility for decommissioning the plants will
reside with the Entergy companies--provides reasonable assurance of
adequate decommissioning funding, within the meaning of 10 CFR
50.75(b) and 50.75(e)(1)(vi).
The precise contours of these two admitted issues are set forth
above at pages 18-20 (issue 2a, raised by Cortlandt regarding the
effect of joint and several liability on the Entergy companies'
financial qualifications) and 25-26 (issue 3a, raised by the
Association and CAN regarding whether the decommissioning funding
arrangement is consistent with the requirements of 10 CFR 50.75),
respectively. The parties' filings and arguments must be confined to
the contours of these two issues. In addition, as indicated on page 23,
we permit CAN and Cortlandt to submit a revised issue challenging the
Entergy companies' cost-and-revenue projections, such issue to be filed
within 20 days of the issuance of a protective order giving CAN and
Cortlandt access to applicants' proprietary information.
The parties should be prepared to offer pre-filed testimony and
exhibits containing specific facts and/or expert opinion in support of
their positions on these issues. All parties should keep their
pleadings as short, and as focused on the admitted issues, as possible.
The Commission will not consider new issues or new arguments or
assertions related to the admitted issues at the hearing, unless they
satisfy our rules for
[[Page 78212]]
late-filed issues (10 CFR 2.1308(b)), and will not consider claims
rejected in the course of this opinion. Redundant, duplicative,
unreliable or irrelevant submissions are not acceptable and will be
stricken from the record. See 10 CFR 2.1320(a)(9). We also direct the
intervenors to state explicitly exactly what remedial measures (if any)
they believe the Commission should take in addition to those specified
in their intervention petitions.
B. Designation of Presiding Officer
The Commission directs the Chief Administrative Judge promptly to
appoint a Presiding Officer for this proceeding. Until the appointment
of a presiding officer, the parties should file any written submissions
with the Office of the Secretary.
C. Notices of Appearance
To the extent that they have not already done so, each counsel or
representative for each party shall, not later than 11:59 p.m. on
December 7, 2000 (i.e., ten days after the issuance date of this
order), file a notice of appearance complying with the requirements of
10 CFR 2.713(b). In each such notice of appearance, the counsel or
representative should specify his or her business address, telephone
number, facsimile number, and e-mail address. Any counsel or
representative who has already entered an appearance but who has not
provided one or more of these pieces of information should do so not
later than the date and time specified above.
D. Filing Schedule
If the parties agree to a non-oral hearing, they must file their
joint motion for a ``hearing consisting of written comments'' no later
than 11:59 p.m. (Eastern Time) on December 12, 2000 (i.e., fifteen days
of the date of this order). 10 CFR 2.1308(d)(2). No later than that
same date, the parties should complete any necessary negotiations on a
protective order regarding any proprietary data and should submit a
joint protective order to the presiding officer. If they are
unsuccessful in negotiating such an order, they should inform the
Presiding Officer by that date and indicate any areas in which they
were able to agree.\67\ We also direct the parties to confer promptly
on whether this proceeding might be settled amicably without conducting
a hearing.
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\67\ Separately, we have directed CAN and Cortlandt to formulate
and submit a properly-supported financial qualifications issue
within 20 days of the entry of a protective order. See page 23,
supra. CAN's failure to do so will preclude its participation with
regard to the financial qualifications issue. If such an issue is
submitted, the Presiding Officer should establish a supplemental
briefing schedule to permit answers and replies thereto. Cf. 10 CFR
2.1307.
---------------------------------------------------------------------------
All initial written statements of position and written direct
testimony (with any supporting affidavits) must be filed no later than
11:59 p.m. on December 27, 2000 (thirty days after the issuance date of
this order). 10 CFR 2.1309(a)(4), 2.1310(c), 2.1321(a), 2.1322(a)(1).
All written responses to direct testimony, all rebuttal testimony (with
any supporting affidavits) and all proposed questions directed to
written direct testimony must be filed no later than 11:59 p.m. on
January 16, 2001 (the first working day following the twentieth day
after the submission of written statements of position and written
testimony). 10 CFR 2.1309(a)(4), 2.1310(c), 2.1321(b), 2.1322(a)(2)-
(3). All proposed questions directed to written rebuttal testimony must
be submitted to the Presiding Officer no later than 11:59 p.m. on
January 26, 2001 (ten days after the submission of rebuttal
testimony).\68\
---------------------------------------------------------------------------
\68\ See 10 CFR 2.1309(a)(4), 2.1310(c), 2.1321(b),
2.1322(a)(4). The seven-day filing period specified in the last two
of these regulations is, pursuant to 10 CFR 2.1314(b), extended by
three days, because the period includes a Saturday and Sunday.
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If the parties do not unanimously seek a hearing consisting of
written comments, the Presiding Officer will hold an oral hearing
beginning at 9:30 a.m on February 2, 2001, at the Commission's
headquarters in Rockville, MD. The subject of the hearing will be the
issues designated above, along with any admissible financial
qualifications issue regarding the Entergy companies' cost-and-revenue
projections that CAN and/or Cortlandt may choose to submit within 20
days of the entry of a protective order. Portions of the hearing may
have to be closed to the public when issues involving proprietary
information are being addressed.
Any party or participant submitting pre-filed direct testimony
should make the sponsor of that testimony available for questioning at
the hearing. The Presiding Officer will issue an order establishing the
amount of time available for the initial and reply presentations of the
parties and participant. Given the expedited nature of license transfer
proceedings, the Commission anticipates that the hearing will take no
longer than one day. The hearing will not include opportunities for
cross-examination, although the Presiding Officer may question any
witness proffered by any party. See 10 CFR 2.1309, 2.1310(a),
2.1322(b).
Finally, all written post-hearing statements of position must be
filed no later than 11:59 p.m. on February 22, 2001 (twenty days after
the oral hearing). See 10 CFR 2.1322(c). The Commission expects to
issue a final memorandum and order on the merits of this proceeding by
March 26, 2001 (50 days after the oral hearing).
The Commission is confident that the proceeding can be resolved
fairly and efficiently within the prescribed time schedule.
E. Participants in the Hearing and the Proceeding; Service List
The parties to this proceeding will be CAN, Cortlandt, the
Association, the Power Authority of the State of New York, Entergy
Nuclear Operations, Entergy FitzPatrick, and Entergy Indian Point.
Westchester will be a governmental participant in the proceeding. The
recipients on the service list will be:
Timothy L. Judson, Citizens Awareness Network, Inc., 162 Cambridge
Street, Syracuse, NY 13210, phone: (315) 475-1203, e-mail:
can@shaysnet.com
Thomas F. Wood, Esq., Town of Cortlandt, 153 Albany Post Road,
Buchanan, NY 10511, phone: (914) 736-0930, fax: (914) 736-9082, e-mail:
tfwesq@aol.com
Paul V. Nolan, Esq. (Attorney for Town of Cortlandt and Hendrick Hudson
School District), 5515 N. 17th Street, Arlington, VA 22205-2207, phone:
(703) 534-5509, fax: (703) 538-5257, e-mail: pvnpvn@aol.com
Nancy T. Bocassi, Hendrick Hudson School District, 61 Trolley Road,
Montrose, NY 10548, phone: (914) 737-7500, fax: (914) 736-5242, e-mail:
nbocassi@henhud.lhric.org
Alan D. Scheinkman, Esq., County Attorney, Westchester County,
Department of Law, Room 600, 148 Martine Avenue, White Plains, NY
10601, phone: (914) 285-2690, fax: (914) 285-5858, e-mail:
ads2@westchestergov.com
Stewart M. Glass, Esq., Senior Assistant County Attorney, County of
Westchester, Department of Law, Room 600, 148 Martine Avenue, White
Plains, NY 10601, phone: (914) 285-3134, fax: (914) 285-2495, e-mail:
smg4@westchestergov.com
Joseph R. Egan, Esq., Egan & Associates, P.C. (Attorney for Nuclear
Generation Employees Association), 1500 K Street, N.W., Suite 200,
Washington, DC 20005, phone: (703) 871-5012, fax: (703) 871-5013 \69\,
e-mail: eganpc@aol.com
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\69\ Mr. Egan's office is located in Washington, DC, but his
phone number has a Northern Virginia area code. There appears to be
an error here. If so, the Commission requests Mr. Egan to correct
it.
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[[Page 78213]]
John Valentino, Esq., Green & Seifter (Attorney for Nuclear Generation
Employees Association), One Lincoln Center, 9th Floor, Syracuse, NY
13202, phone: (315) 422-1391, fax: (315) 423-2839, e-mail:
jvalentino@greenseifter.com
Douglas E. Levanway, Esq. (Attorney for Entergy Nuclear FitzPatrick
LLC, Entergy Nuclear Indian Point 3 LLC, and Entergy Nuclear
Operations, Inc.), Wise, Carter, Child and Caraway, P.O. Box 651,
Jackson, MS 39205-0651, phone: (601) 968-5524, fax: (601) 968-5519, e-
mail: del@wisecarter.com
Gerald C. Goldstein, Esq., Arthur T. Cambouris, Esq., David E. Blabey,
Esq., The Power Authority of the State of New York, 1633 Broadway, New
York, NY 10019, phone: (212) 468-6131, fax: (212) 468-6206, e-mail:
goldstein.g@nypa.gov
Jay E. Silberg, Esq., William R. Hollaway, Esq. (Attorneys for the
Power Authority of the State of New York), Shaw, Pittman, Potts &
Trowbridge, 2300 N Street, NW., Washington, DC 20037-1128, phone: (202)
663-8000, fax: (202) 663-8007, e-mail: jay.silberg@shawpittman.com
Office of the General Counsel, U.S. Nuclear Regulatory Commission,
Washington, DC 20555, phone: (301) 415-1537, fax: (301) 415-3725, e-
mail: OGCLT@NRC.gov
Office of the Secretary, U.S. Nuclear Regulatory Commission, Attn:
Rulemakings & Adjudications Branch, Washington, DC 20555, phone: (301)
415-1966/1679, fax: (301) 415-1101, e-mail: SECY@NRC.gov
George E. Sansoucy, P.E. (representing Hendrick Hudson school
District), 260 Ten Rod Road, Rochester, NH 03867, phone: (603) 335-
3167, fax: (603) 335-0731, e-mail: sansoucy@nh.ultranet.com
We direct the parties immediately to supplement or correct the
above information to the extent that it is incomplete or inaccurate,
and immediately to notify all recipients of any such changes.
Pursuant to 10 CFR 2.1316(b)-(c), the NRC staff has indicated that
it will not be a party to this proceeding. Notwithstanding this fact,
the staff is still expected both to offer into evidence its SER and to
proffer one or more sponsoring witnesses for that document. See 10 CFR
2.1316(b).
F. Service Requirements
Although the parties and Westchester have a number of options under
10 CFR 2.1313(c) by which to serve their filings, the preferred method
of filing in this proceeding is electronic (i.e., by e-mail).
Electronic copies should be in WordPerfect format (in a version at
least as recent as 6.0). Service will be considered timely if sent not
later than 11:59 p.m. of the due date under our Subpart M rules.
However, we also require the parties to submit a single signed hard
copy of any such filings \70\ to the Rulemakings and Adjudications
Branch, Office of the Secretary, U.S. Nuclear Regulatory Commission,
11555 Rockville Pike, Room O-16-H-15, Rockville, MD 20852. As noted
above, the fax number for this office is (301) 415-1101 and the e-mail
address is secy@nrc.gov.
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\70\ We draw the attention to the difference between this
requirement and that of Subpart G, which provides that any service
whether by fax or e-mail on the Secretary should be followed with an
original and two conforming copies of the service by regular mail in
accordance with 10 CFR 2.708(d).
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VI. Conclusion
For the reasons set forth above:
(1) The license transfer adjudications involving FitzPatrick and
Indian Point 3 license transfers are consolidated.
(2) CAN's, Cortlandt's and the Association's petitions to intervene
and requests for hearing are granted;
(3) Westchester's petition for governmental participant status is
granted;
(4) The Association's and CAN's motions for stay are denied;
(5) Cortlandt's motion to expand this adjudication's scope of
review is denied;
(6) CAN's motion for a Subpart G hearing is denied;
(7) CAN and Cortlandt may formulate and submit a properly-supported
financial qualifications issue within 20 days of the entry of a
protective order.
(8) The parties are required to inform the Commission of any court
or administrative orders, settlements or business decisions that may in
any way relate to, or render moot, part or all of the instant
proceeding.
(9) Within fifteen days of the issuance date of this order, the
parties shall complete any necessary negotiations on a protective order
regarding any proprietary data and shall submit a joint protective
order to the Presiding Officer. If they are unsuccessful in negotiating
such an order, they shall so inform the Presiding Officer by that date
and shall indicate any areas in which they were able to agree.
It is so ordered.
Dated at Rockville, Maryland, this 27th day of November, 2000.
For the Commission.\71\
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\71\ Commissioner Dicus was not present for the affirmation of
this Order. Had she been present, she would have affirmed her prior
vote to approve this Order.
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Annette L. Vietti-Cook,
Secretary of the Commission.
[FR Doc. 00-31875 Filed 12-13-00; 8:45 am]
BILLING CODE 7590-01-U