Entergy 2012 Annual Report Download - page 34

Entergy Corporation and Subsidiaries 2012
MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS continued
Under federal law, nuclear power plants may continue to operate
beyond their license expiration dates while their renewal applications
are pending NRC approval. Various parties have expressed opposi-
tion to renewal of the licenses. In April 2007, Entergy submitted the
application to the NRC to renew the operating licenses for Indian
Point 2 and 3 for an additional 20 years. The ASLB has admitted 21
contentions raised by the State of New York or other parties, which
were combined into 16 discrete issues. Three of the issues have been
resolved, and 13 issues remain subject to ASLB resolution. In July
2011, the ASLB granted the State of New York’s motion for sum-
mary disposition of an admitted contention challenging the adequacy
of a section of Indian Point’s environmental analysis as incorporated
in the Final Supplemental Environmental Impact Statement (FSEIS)
(discussed below). That section provided cost estimates for Severe
Accident Mitigation Alternatives (SAMAs), which are hardware and
procedural changes that could be implemented to mitigate estimated
impacts of off-site radiological releases in case of a hypothesized
severe accident. In addition to finding that the SAMA cost analysis
was insufficient, the ASLB directed the NRC staff to explain why
cost-beneficial SAMAs should not be required to be implemented.
Entergy appealed the ASLB’s decision to the NRC and the NRC staff
supported Entergy’s appeal, while the State of New York opposed it.
In December 2011, the NRC denied Entergy’s appeal as premature,
stating that the appeal could be renewed at the conclusion of the
ASLB proceedings.
Pursuant to ASLB scheduling orders in the Indian Point 2 and 3
license renewal proceeding, hearings on the nine contentions remain-
ing in “Track 1” were held over 12 days in October, November,
and December 2012. Testimony on the four contentions currently
in “Track 2” has not been completed. Track 2 hearings have not
been scheduled.
The NRC staff is also continuing to perform its technical and
environmental reviews of the Indian Point 2 and 3 license renewal
application. The NRC staff issued a Final Safety Evaluation Report
(FSER) in August 2009, a supplement to the FSER in August 2011, a
FSEIS in December 2010 and a supplement to the FSEIS in June 2012.
The NRC staff issued a draft supplemental FSEIS in June 2012 and
has stated its intent to issue, following an opportunity for comment,
another supplement to the FSEIS by April 30, 2013. In addition, the
NRC staff has stated its intent to issue a further supplement to the
FSER by July 31, 2013. These reports are expected to affect testi-
mony yet to be filed on Track 2 contentions.
The hearing process is an integral component of the NRC’s regula-
tory framework, and evidentiary hearings on license renewal applica-
tions are not uncommon. Entergy is participating fully in the hear-
ing process as permitted by the NRC’s hearing rules. As noted in
Entergy’s responses to the various intervenor filings, Entergy believes
the contentions proposed by the intervenors are unsupported and
without merit. Entergy will continue to work with the NRC staff as it
completes its technical and environmental reviews of the Indian Point
2 and 3 license renewal applications. See “Nuclear Matters” below
for discussion of spent nuclear fuel storage issues and the timing of
license renewals.
The New York State Department of Environmental Conservation
has taken the position that Indian Point must obtain a new state-
issued Clean Water Act Section 401 water quality certification as part
of the license renewal process. Entergy submitted its application for a
water quality certification to the NYSDEC in April 2009, with a reser-
vation of rights regarding the applicability of Section 401 in this case.
After Entergy submitted certain additional information in response
to NYSDEC requests for additional information, in February 2010 the
NYSDEC staff determined that Entergy’s water quality certification
application was complete. In April 2010 the NYSDEC staff issued
a proposed notice of denial of Entergy’s water quality certification
application (the Notice). NYSDEC staff’s Notice triggered an admin-
istrative adjudicatory hearing before NYSDEC ALJs on the proposed
Notice. The NYSDEC staff decision does not restrict Indian Point
operations, but the issuance of a certification is potentially required
prior to NRC issuance of renewed unit licenses. In June 2011, Entergy
filed notice with the NRC that the NYSDEC, the agency that would
issue or deny a water quality certification for the Indian Point license
renewal process, has taken longer than one year to take final action
on Entergy’s application for a water quality certification and, there-
fore, has waived its opportunity to require a certification under the
provisions of Section 401 of the Clean Water Act. The NYSDEC has
notified the NRC that it disagrees with Entergy’s position and does
not believe that it has waived the right to require a certification. The
NYSDEC ALJs overseeing the agency’s certification adjudicatory pro-
cess stated in a ruling issued in July 2011 that while the waiver issue is
pending before the NRC, the NYSDEC hearing process will continue
on selected issues. The judge held a Legislative Hearing (agency pub-
lic comment session) and an Issues Conference (pre-trial conference)
in July 2010 and set certain issues for trial in October 2011, which is
continuing into 2013. After the full hearing on the merits, the ALJs
will issue a recommended decision to the Commissioner who will
then issue the final agency decision. A party to the proceeding can
appeal the decision of the Commissioner to state court.
In addition, the consistency of Indian Point’s operations with New
York State’s coastal management policies must be resolved to the
extent required by the Coastal Zone Management Act (CZMA). On
July 24, 2012, Entergy filed a supplement to the Indian Point license
renewal application currently pending before the NRC. The supple-
ment states that, based on applicable federal law and in light of prior
reviews by the State of New York, the NRC may issue the requested
renewed operating licenses for Indian Point without the need for an
additional consistency review by the State of New York under the
CZMA. On July 30, 2012, Entergy filed a motion for declaratory
order with the ASLB seeking confirmation of its position that no fur-
ther CZMA consistency determination is required before the NRC
may issue renewed licenses. Responses to Entergy’s motion for declar-
atory order are due March 22, 2013. In addition, Entergy filed with
the New York State Department of State (NYSDOS) on November
7, 2012 a petition for declaratory order that Indian Point is grand-
fathered under either of two criteria prescribed by the New York
Coastal Management Program (NYCMP), which sets forth the state
coastal policies applied in a CZMA consistency review. The NYSDOS
denied the motion by order dated January 9, 2013. An appeal may
be taken to state court within four months. Finally, on December
17, 2012, Entergy filed with NYSDOS a consistency determination
explaining why Indian Point satisfies all applicable NYCMP policies.
Entergy included in the consistency determination a “reservation of
rights” clarifying that Entergy does not concede NYSDOS’s right to
conduct a new CZMA review for Indian Point. On January 16, 2013,
NYSDOS notified Entergy that it deemed the consistency determina-
tion incomplete because it does not include the further supplement to
the FSEIS that, as indicated above, is targeted for issuance by April
30, 2013. The six-month federal deadline for state decision on a
consistency determination does not begin to run until the submission
is complete.
The NRC operating license for Palisades expires in 2031 and for
FitzPatrick expires in 2034.
32