Exelon, Holtec Seek Dismissal of Lacey Township Contentions in Nuke Plant License Transfer

Dec 19, 2018

All good things must come to an end. In September, the Oyster Creek Generating Station permanently ceased operations and it appears the good neighborly feelings Lacey Township officials had for the cash cow came to an end as well.

Now, Exelon Generation, which owns the defunct nuclear power plant, Holtec International, the Camden-based energy technology company looking to purchase the plant and expedite decommissioning, and Oyster Creek Environmental Protection LLC (OCEP), which would become the licensed owner of the plant should the transfer be approved, are pushing back. In a joint response to the township’s petition for a public hearing on the license transfer application submitted to the Nuclear Regulatory Commission in August, the companies are claiming the township failed to meet the federal agency’s requirements for requesting a hearing.

In its Nov. 8 filing with the NRC, the township cited a shortfall in decommissioning funds; the inclusion of SNC-Lavalin, a global professional service and project management company charged with corruption, fraud and bribery in Canada, as a key player in Oyster Creek’s decommissioning; and environmental concerns as the reasons for its petition for leave to intervene and request for a hearing.

On the matter of a shortfall in decommissioning funds, Exelon, Holtec and OCEP claim the township’s concerns are unsubstantiated and therefore inadmissible.

The township’s request “hinges on the claim that there exists a decommissioning funding shortfall based on projected costs of $1.4 billion. However, Petitioner provides neither citation nor reference to support the $1.4 billion decommissioning cost estimate, and, in fact, the estimate provided in the license transfer application is much lower,” according to the Dec. 3 response from the companies. The response acknowledges the figures most likely come from the Exelon Generation’s Oyster Creek Post-Shutdown Decommission Activities Report (PSDAR) submitted in May.

That PSDAR assumes the plant will be placed into safe storage for an extended period of time before decommissioning is started in 2073. A revised PSDAR, submitted by Holtec in September, highlights an accelerated schedule for the prompt decommissioning of Oyster Creek and the unrestricted release of the site, with the exclusion of the independent spent fuel storage Installation, or spent fuel pad, on site. Under those plans, according to the response from the companies, decommissioning would begin in 2019 under a decontamination approach.

Under this strategy, the equipment, structures and areas of the facility and the site that contain radioactive materials are swiftly removed or decontaminated to a level that allows for license termination quickly after shutting down. Based on this approach, the license transfer application estimates decommissioning of Oyster Creek to be $885 million in 2018 market values.

“This estimate, based on DECON decommissioning, is well below the $980 million approximate market value of the decommissioning trusts,” according to the paperwork filed with the NRC.  “Any contention that fails directly to controvert the application or that mistakenly asserts the application does not address a relevant issue can be dismissed.”

Concerns regarding SNC-Lavalin, one of the two parent companies of Comprehensive Decommissioning International, which will subcontract services to OCEP and Holtec Decommissioning International, the licensed operator of Oyster Creek if the transfer is approved, should also be disregarded, according to the companies’ opposition to the township’s request.

“The township alleges that SNC-Lavalin has been charged in Canada with corruption, fraud, and bribery, but provides no further information with respect to the charges or their relation to this proceeding,” according to the paperwork submitted to the NRC opposing the township. “Nor does Petitioner provide any basis to connect these ‘charges’ against an indirect co-parent of a decommissioning subcontractor with any issue that is relevant to the license transfer application, or any connection between the personnel who will be performing the decommissioning services and anyone who has been ‘charged.’”

Finally, the companies refute claims the National Environmental Policy Act (NEPA) requires an environmental review, particularly because of the Barnegat Bay ecological system.

“As an initial matter, Petitioner’s demand for an environmental review in Contention 3 is an impermissible challenge to NRC rules. License transfer proceedings fall within a categorical exclusion and therefore do not require an environmental review,” according to the statement, which also noted the township hasn’t sought a waiver of that rule in this proceeding, nor demonstrated by affidavit (or otherwise) that “special circumstances” exist. “Petitioner has also failed to provide any expert or factual support for its assertion that such an environmental review is made necessary because of the Barnegat Bay ecological system.”

Township officials say some of that concern stems from the way HDI handled its involvement with the San Onofre Nuclear Generating Station, located south of San Clemente, Calif. In that situation, according to the township’s petition filed with the NRC, faulty casks for spent fuel nuclear storage were used.

“The Township and NRC must be assured that such mistakes will not occur in Oyster Creek,” the township’s Nov. 8 petition states. “The NEPA requires a hard look at the potential consequences to the environment from a requested action and the Township is not satisfied that such standards have been met. HDI should be required to revise and address these concerns to the public and the NRC should not permit the transfers until such proof has been proffered.”

In addition to the township seeking to intervene, the state Chapter of the Sierra Club and the Concerned Citizens of Lacey Coalition also submitted requests for a public hearing on the license transfer.

Just last week, the NRC reopened the public comment period for those wishing to be heard on the license transfer.

“There are serious issues to explore, not the least of which is who has access to deadly nuclear material. That lifts this from a local to national security issue,” Janet Tauro, Clean Water Action NJ board chair, said last week. “A hasty, quick job isn’t going to benefit anybody.”

In February, Exelon Generation announced its plans to permanently shut down Oyster Creek more than 14 months before a December 2019 deadline agreed to with the state. Doing so negated the state’s calls for retrofitting the plant with cooling towers at the Route 9 site. Five months later, the Pennsylvania-based utility company, part of the Illinois-based Exelon energy companies, indicated a willingness to return more than half of the site to Lacey Township officials once decommissioning was complete. Two weeks later, it announced plans to sell Oyster Creek, once the nation’s oldest operating commercial nuclear power plant, to Holtec.

— Gina G. Scala


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