August
8, 2000
Hon.
Janet Deixler
Secretary
New
York State Department of Public Service
Three
Empire State Plaza
Executive
Office, 14th Floor
Albany,
New York 12223-1350
RE: CASE
00-E-1225 – Entergy Nuclear Fitzpatrick LLC, Entergy Nuclear Indian Point 3
LLC, and Entergy Nuclear Operations, Inc. – Joint Petition For a Declaratory
Ruling that Lightened Regulation be Applied Concerning the Purchase of Nuclear
Power Facilities From the Power Authority of the State of New York.
Dear
Secretary Deixler:
The undersigned parties are writing in opposition to the Petition for Declaratory Ruling (“Petition”) filed with the Public Service Commission (“Commission”) on July 20, 2000 by Entergy Nuclear Fitzpatrick LLC, Entergy Nuclear Indian Point 3 LLC, and Entergy Nuclear Operations, Inc (“ENF”, “ENIP”, & “ENO” respectively, or collectively “Entergy” or “the Entergy subsidiaries”) requesting that lightened regulation be applied to their operation of the Fitzpatrick Nuclear Reactor and the Indian Point 3 Nuclear Reactor after the purchase of the reactors from the New York Power Authority (NYPA). With respect to Entergy’s request for a waiver of the 45 day comment period as required by State Administrative Procedures Act (“SAPA”), we believe that Entergy, within the context of its July 20 Petition, has not established that a genuine emergency exists which would warrant suspension of generally applicable SAPA procedures. We therefore urge the Commission to reject Entergy’s request for Emergency Treatment. Laying aside the issue of emergency treatment, we believe Entergy’s request for declaratory ruling is not justified and should not be granted, primarily because the request is premature insofar as it raises issues more appropriately dealt with, but not finally resolved in Case 98-E-0405, the Generic Proceeding on Nuclear Generation in a Competitive Electric Market.
To the extent said Petition requests emergency
treatment – under the State Administrative Procedures Act (“SAPA”) – of matters
related to the Purchase and Sale Agreements between NYPA and Petitioners, we
believe that Entergy has not established that a bona fide emergency exists
which would warrant suspension of generally applicable SAPA procedures. Given the significant public interest values
at stake in the sale of this nuclear facility, the Commission should avail
itself and the public of all procedures designed to foster a full, open, and
deliberate review before final action.
Entergy has requested that the Commission expedite
approval of its Petition for a declaratory ruling that lightened regulation be
applied to Entergy’s operation of the Indian Point 3 and Fitzpatrick
reactors. In the normal course, a
proposed rule must appear in the State Register for at least 45 days prior to
its adoption in order to “afford the public an opportunity to submit comments
on the proposed rule.” SAPA § 202. Entergy has, however, requested that the
Commission waive this minimum public comment period, and invoke the emergency
rulemaking provisions of SAPA § 202 (6) (a).
This section states in pertinent part:
…if an agency finds that the immediate adoption of a
rule is necessary for the preservation of the public health, safety or general
welfare and that compliance with the requirements of subdivision one of this
section would be contrary to the public interest, the agency may dispense with
all or part of such requirements and adopt the rule on an emergency basis.
Entergy provides no justification as to why it is requesting emergency treatment other than to say that it is trying to meet a September 7, 2000 closing date for the Purchase and Sales Agreements between NYPA and itself. Moreover, Entergy and NYPA’s Purchase and Sale Agreement was completed March 28, 2000, nearly four months before ENF, ENIP and ENO submitted the petition to the Commission. Since the arguments made in the petition do not reference any more recent developments or information, it is unclear why the Entergy subsidiaries postponed filing until so close to the projected closing date. However, the Commission is not bound to accommodate the whims of the petitioners, or constrain its ability to evaluate Entergy’s proposal to operate nuclear facilities in New York State and its impact on the public interest.
Entergy’s Petition for Declaratory
Ruling
Entergy’s request for declaratory ruling is not justified on several accounts and, in any event, is premature because Case 98-E-0405, the Generic Proceeding on Nuclear Generation in a Competitive Electric Market (Generic Nuclear Proceeding), has not yet been completed.
We maintain that the Generic Nuclear Proceeding should never have been suspended simply because three parties to the proceeding decided to engage in closed-door negotiations on the potential sale of the Nine Mile Point reactors. However, for reasons that are still not entirely clear, the Commission decided that the utilities’ petition would take priority over the more generic proceeding. In our judgment, it would be premature for the Commission to approve the sale of these plants until a statewide policy has been developed for all six commercial nuclear power plants. Some of the key policy issues that need to be considered include: 1) Whether it is appropriate for the utilities to enter into power purchase agreements with any new owner, 2) What strategy for plant decommissioning will be chosen, 3) What the disposition of any surplus decommissioning funds will be, 4) How responsibility for any shortfalls will be assigned, 5) How organized labor will be impacted by any sale, 6) The local impacts of any sale including local property taxes, and 7) How public health and safety will be impacted by consolidation of ownership of nuclear plants and their operation under competitive market conditions.
We believe that it would be premature to issue a
declaratory ruling on lightened regulation until the broader policy issues are
addressed. We therefore submit that the
only reasonable course of action – if the public interest is to be served and
public confidence in the regulatory process is to be restored – is for the
Commission to deny Entergy’s petition for a declaratory ruling and to reconvene
the Generic Nuclear Proceeding.
In the event the Commission chooses
to proceed with a review of the Entergy Petition without the benefit of a
completed Generic Nuclear Proceeding, we strongly urge that the petition be
denied. Entergy’s reliance on past
Commission orders in this and other matters is seriously misplaced. It is inappropriate for Entergy to cite Case
99-E-0679 and Case 99-E-0616 dealing with lightened regulation for hydropower
facilities and fossil-fueled power plants, respectively, as setting precedent
for lightened regulation for nuclear power reactors. Lightened regulation for nuclear power has different implications
than with hydro and fossil-fueled power.
Indeed, the Commission made this observation when it set up the Generic
Nuclear Proceeding. [On August 27, 1997, the Commission
issued a position paper concluding nuclear generation should operate on a
competitive basis (beyond transition period) and recognizing that: “the treatment of nuclear generation raises
issues that warrant special attention.” On March 20, 1998, the Commission
issued an opinion acknowledging the need for a more extensive examination of
subjecting nuclear generation to market forces.]
Entergy’s petition does not adequately explain why
it must receive lightened regulatory
treatment in NYS to complete its transaction with NYPA. In addition, in their applications to the
Nuclear Regulatory Commission (NRC) for transfer of the facility operating
licenses, the Entergy subsidiaries list the various regulatory approvals
necessary to close the sale: NRC, Federal Energy Regulatory Commission, and NYS
Department of Environmental Conservation (“DEC”). Commission approval of lightened regulatory treatment is not
listed as a prerequisite to closure. It
is therefore unclear whether the petitioners originally overlooked the
necessity of receiving lightened regulatory treatment status from the
Commission, or whether it is not, in fact, a necessary condition for Entergy to
close the sale. In either case, the
Commission is under no obligation to grant the request.
Furthermore, the Commission cannot fairly evaluate
Entergy’s petition until the sale is final. There are many unresolved issues in
the sale of FitzPatrick and Indian Point 3 to the Entergy subsidiaries that
could force NYPA and/or Entergy to restructure any part or all of the Purchase
and Sale Agreement, and/or change the conditions under which Entergy would
operate the reactors:
·
The
Nuclear Generation Employees Association (NGEA), a group of management-level
employees working at FitzPatrick, Indian Point 3, and NYPA’s White Plains
offices, is filing litigation challenging the proposed sale. The results of NGEA’s case could cause
financial agreements between NYPA and Entergy to change, or increase
staff-related costs to Entergy. The
former case pertains directly to Entergy establishing operations in New York State,
and the latter case pertains to the as-yet uncompleted Segment 3 of the Generic
Nuclear Proceeding.
·
The
NYS DEC is reviewing the environmental impacts of Indian Point 3, and may
require substantial modifications to the facility to minimize its effects on
the Hudson River Valley. Among the
possible outcomes of that case are that: (1) NYPA and Entergy substantively
restructure their agreement, (2) Entergy determines that the proposed sale is
no longer in its interest, or (3) NYPA or Entergy decide to close Indian Point
3.
·
Entergy
and NYPA are currently involved in a contested license transfer proceeding at
the Nuclear Regulatory Commission.
Citizens Awareness Network, IP3 workers, managers at both reactors, and
several local communities have requested a hearing and petitioned to intervene
in the review of the applications. A
number of the issues at stake in the license transfer could result in the
restructuring of the NYPA/Entergy agreements, or prevent the sale from being
completed. Among these issues are
concerns that the operating revenues projected under the Power Purchase
Agreement do not provide adequate funding to ensure worker and public health
and safety; that Entergy is not providing adequate financial support to its
nuclear subsidiaries; and that there is not adequate assurance of funding for
decommissioning. Any of these issues
could cause the financial agreements between NYPA and the Entergy subsidiaries
to change, mooting a Commission decision made at this time.
For all the above reasons, the
Commission should deny Entergy’s petition for emergency rulemaking treatment
and Entergy’s request for a declaratory ruling without further justification.
The Generic Nuclear Proceeding was necessitated based on the Commission’s
acknowledgement that the fate of nuclear power generation represents a special
circumstance in the process of electric utility deregulation. Granting the petitioner’s request would
short-circuit the Commission’s ability to properly fulfill its obligations to
protect public interest.
Sincerely,
Kyle Rabin, Energy Program Associate
Environmental
Advocates
On
Behalf Of:
Ed
Smeloff
THE
PACE ENERGY PROJECT
Tim
Judson
CITIZENS
AWARENESS NETWORK
Governor George Pataki
Assemblymen Richard Brodsky & Paul Tonko