[Federal Register Volume 69, Number 25 (Friday, February 6, 2004)]
[Notices]
[Pages 5873-5879]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 04-2550]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 70-3103; CLI-04-03]


In the Matter of Louisiana Energy Services, L.P. (National 
Enrichment Facility); Notice of Receipt of Application for License; 
Notice of Availability of Applicant's Environmental Report; Notice of 
Consideration of Issuance of License; and Notice of Hearing and 
Commission Order

    Commissioners: Nils J. Diaz, Chairman, Edward McGaffigan, Jr., 
Jeffrey S. Merrifield.

I. Receipt of Application and Availability of Documents

    Notice is hereby given that the U.S. Nuclear Regulatory Commission 
(NRC or the Commission) received on December 15, 2003, an application, 
safety analysis report, and environmental report from Louisiana Energy 
Services, L.P. (LES), for a license to possess and use source, 
byproduct, and special nuclear material and to enrich natural uranium 
to a maximum of 5 percent U-235 by the gas centrifuge process. The 
plant, to be known as the National Enrichment Facility (or NEF), would 
be constructed in Eunice, New Mexico. LES is a limited Partnership 
whose general Partners are Urenco Investments, Inc. (a subsidiary of 
Urenco, Ltd.) and Westinghouse Enrichment Company. In addition, there 
are six limited Partners.
    Copies of LES's application, safety analysis report, and 
environmental report (except for portions thereof subject to 
withholding from public inspection in accordance with 10 CFR 2.390, 
Availability of Public Records) are available for public inspection at 
the Commission's Public Document Room (PDR) at One White Flint North, 
11555 Rockville Pike, Rockville, Maryland 20852. These documents are 
also available for review and copying using any of the following 
methods: (1) Enter the NRC's Gas Centrifuge Enrichment Facility 
Licensing Web site at http://www.nrc.gov/materials/fuel-cycle-fac/gas-
centrifuge.html#correspondence; (2) enter the NRC's Agency wide 
Document Access and Management System (ADAMS) at http://www.nrc.gov/
NRC/ADAMS/index.htm, where the accession number for LES's application 
(including LES's safety analysis report and LES's environmental report) 
is ML040020261; or (3) contact the NRC's Public Document Room (PDR) by 
calling (800) 397-4209, faxing a request to (301) 415-3548, or sending 
a request by electronic mail to pdr@nrc.gov. Hard copies of the 
documents are available from the PDR for a fee.
    The NRC has now accepted LES's application for docketing and 
accordingly is providing this notice of hearing and notice of 
opportunity to intervene on LES's application for a license to 
construct and operate a centrifuge enrichment facility. Pursuant to the 
Atomic Energy Act of 1954, as amended, (Act) the NRC staff will prepare 
a safety evaluation report after reviewing the application and making 
findings concerning the public health and safety and common defense and 
security. In addition, pursuant to the National Environmental Policy 
Act of 1969 (NEPA) and the Commission's regulations in 10 CFR part 51, 
NRC will complete an environmental evaluation and prepare an 
environmental impact statement (EIS) before the hearing on the issuance 
of a license is completed. The preparation of the EIS will be the 
subject of a separate notice in the Federal Register.
    When available, the NRC staff's safety evaluation and its EIS 
(except for portions thereof subject to withholding from public 
inspection in accordance with 10 CFR 2.390) will also be placed in the 
PDR and in ADAMS. Copies of correspondence between the NRC and LES, and 
transcripts of prehearing conferences and hearings (except for portions 
thereof subject to withholding from public inspection in accordance 
with 10 CFR 2.390) will be similarly made available to the public.
    If following the hearing, the Commission is satisfied that LES has 
complied with the Commission's regulations and the requirements of this 
Notice and Commission Order and the Commission finds that the 
application satisfies the applicable standards set

[[Page 5874]]

forth in 10 CFR 30.33, 40.32, and 70.23, a single license will be 
issued authorizing: (1) The receipt, possession, use, delivery, and 
transfer of byproduct (e.g., calibration sources), source, and special 
nuclear material in the National Enrichment Facility; and (2) the 
construction and operation of the National Enrichment Facility. Prior 
to commencement of operations of the National Enrichment Facility if it 
is licensed, in accordance with section 193(c) of the Act and 10 CFR 
70.32(k), NRC will verify through inspection that the facility has been 
constructed in accordance with the requirements of the license for such 
construction and operation. The inspection findings will be published 
in the Federal Register.

II. Notice of Hearing

    A. Pursuant to 10 CFR 70.23a and Section 193 of the Atomic Energy 
Act of 1954, as amended (Act), as amended by the Solar, Wind, Waste, 
and Geothermal Power Production Incentives Act of 1990 (Pub. L. 101-
575), a hearing will be conducted according to the rules of procedure 
in new 10 CFR part 2, subparts A, C, G, and to the extent that 
classified information becomes involved, subpart I (final rule 
published at 69 FR 2182, January 14, 2004).\1\ The hearing will be held 
under the authority of sections 53, 63, 189, 191, and 193 of the Act. 
The applicant and NRC staff shall be parties to the proceeding.
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    \1\ By its terms, the new 10 CFR part 2 applies to licensing 
actions the notice of hearing for which was issued on or after the 
effective date of the new rule, February 13, 2004. See 69 FR 2182. 
By this order, the Commission directs the application of the new 10 
CFR part 2 for the LES Proceeding. Accordingly, references in this 
Notice and Order are to the new 10 CFR part 2.
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    B. Pursuant to 10 CFR part 2, Subpart C, the hearing shall be 
conducted by an Atomic Safety and Licensing Board (Board) appointed by 
the Chief Administrative Judge of the Atomic Safety and Licensing Board 
Panel. Notice as to the membership of the Board will be published in 
the Federal Register at a later date.
    C. The matters of fact and law to be considered are whether the 
application satisfies the standards set forth in this Notice and 
Commission Order and the applicable standards in 10 CFR 30.33, 40.32, 
and 70.23, and whether the requirements of 10 CFR part 51 have been 
met.
    D. If this proceeding is not a contested proceeding, as defined by 
10 CFR 2.4, the Board will determine the following, without conducting 
a de novo evaluation of the application: (1) Whether the application 
and record of the proceeding contain sufficient information and whether 
the NRC staff's review of the application has been adequate to support 
findings to be made by the Director of the Office of Nuclear Materials 
Safety and Safeguards, with respect to the matters set forth in 
paragraph C of this section, and (2) whether the review conducted by 
the NRC staff pursuant to 10 CFR part 51 has been adequate.
    E. Regardless of whether the proceeding is contested or 
uncontested, the Board will, in its initial decision, in accordance 
with Subpart A of part 51: Determine whether the requirements of 
sections 102(2) (A), (C), and (E) of NEPA and Subpart A of part 51 have 
been complied with in the proceeding; independently consider the final 
balance among conflicting factors contained in the record of proceeding 
with a view to determining the appropriate action to be taken; and 
determine whether a license should be issued, denied, or conditioned to 
protect the environment.
    F. If the proceeding becomes a contested proceeding, the Board 
shall make findings of fact and conclusions of law on admitted 
contentions. With respect to matters set forth in paragraph C of this 
section but not covered by admitted contentions, the Board will make 
the determinations set forth in paragraph D without conducting a de 
novo evaluation of the application.
    G. By April 6, 2004, any person whose interest may be affected by 
this proceeding and who wishes to participate as a party in the 
proceeding must file a written petition for leave to intervene. 
Petitions for leave to intervene shall be filed in accordance with the 
provisions of 10 CFR 2.309. Interested persons should consult the new 
10 CFR part 2, section 2.309 (69 FR 2182, 2238), which is available at 
the NRC's PDR, located at One White Flint North, 11555 Rockville Pike 
(first floor), Rockville, MD (or call the PDR at (800) 397-4209 or 
(301) 415-4737). NRC regulations are also accessible electronically 
from the NRC's Electronic Reading Room on the NRC Web site, at http://
www.nrc.gov. If a petition for leave to intervene is filed by the above 
date, the Commission will issue an order determining standing and refer 
petitions from persons with the requisite standing to the Atomic Safety 
and Licensing Board for further processing in the proceeding.
    As required by 10 CFR 2.309, a petition for leave to intervene 
shall set forth with particularity the interest of the petitioner in 
the proceeding and how that interest may be affected by the results of 
the proceeding. The petition must provide the name, address, and 
telephone number of the petitioner and specifically explain the reasons 
why intervention should be permitted with particular reference to the 
following factors: (1) The nature of the petitioner's right under the 
Act to be made a party to the proceeding; (2) the nature and extent of 
the petitioner's property, financial, or other interest in the 
proceeding; and (3) the possible effect of any order that may be 
entered in the proceeding on the petitioner's interest.
    A petition for leave to intervene must also include a specification 
of the contentions that the petitioner seeks to have litigated in the 
hearing. For each contention, the petitioner must provide a specific 
statement of the issue of law or fact to be raised or controverted, as 
well as a brief explanation of the basis for the contention. 
Additionally, the petition must demonstrate that the issue raised by 
each contention is within the scope of the proceeding and is material 
to the findings the NRC must make to support the granting of a license 
in response to LES's application. The petition must also include a 
concise statement of the alleged facts or expert opinions which support 
the position of the petitioner and on which the petitioner intends to 
rely at hearing, together with references to the specific sources and 
documents on which the petitioner intends to rely. Finally, the 
petition must provide sufficient information to show that a genuine 
dispute exists with the applicant on a material issue of law or fact, 
including references to specific portions of the application that the 
petitioner disputes and the supporting reasons for each dispute, or, if 
the petitioner believes that the application fails to contain 
information on a relevant matter as required by law, the identification 
of each failure and the supporting reasons for the petitioner's belief. 
Each contention must be one that, if proven, would entitle the 
petitioner to relief.
    Those permitted to intervene become parties to the proceeding, 
subject to any limitations in the order granting leave to intervene, 
and have the opportunity to participate fully in the conduct of the 
hearing with respect to resolution of that person's admitted 
contentions, including the opportunity to present evidence and to 
submit a cross-examination plan for cross-examination of witnesses, 
consistent with NRC regulations, policies, and procedures. The Board 
will set the time and place for any prehearing conferences and 
evidentiary hearings, and the respective notices will be published in 
the Federal Register.
    A petition for leave to intervene and proffered contentions must be 
filed with

[[Page 5875]]

the Secretary of the Commission, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001, Attention: Rulemaking and Adjudications 
Staff, or may be delivered to the Commission's PDR, located at One 
White Flint North, 11555 Rockville Pike (first floor), Rockville, 
Maryland, by the above date. Because of continuing disruptions in 
delivery of mail to United States Government offices, it is requested 
that petitions for leave to intervene and requests for hearing be 
transmitted to the Secretary of the Commission either by means of 
facsimile transmission to 301-415-1101 or by e-mail to 
hearingdocket@nrc.gov. A copy of the request for hearing and petition 
for leave to intervene should also be sent to the Office of the General 
Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, 
Attention: Associate General Counsel for Hearings, Enforcement, and 
Administration, and because of continuing disruptions in delivery of 
mail to United States Government offices, it is requested that copies 
be transmitted either by means of facsimile transmission to 301-415-
3725 or by e-mail to OGCMailCenter@nrc.gov. A copy of the request for 
hearing and petition for leave to intervene should also be sent to 
James Curtiss, Esq., Winston & Strawn, 1400 L Street, Washington, DC 
20005-3502, attorney for the applicant.
    Non-timely filings of petitions for leave to intervene, amended 
petitions, and supplemental petitions will not be entertained absent a 
determination by the Commission or the Atomic Safety and Licensing 
Board that the petition should be granted, based upon a balancing of 
the factors specified in 10 CFR 2.309(c)(1)(i)-(viii).
    H. A State, county, municipality, Federally-recognized Indian 
Tribe, or agencies thereof, may submit a petition to the Commission to 
participate as an interested entity under 10 CFR 2.309(d)(2). The 
petition should state the nature and extent of the petitioner's 
interest in the proceeding. The petition should be submitted to the 
Commission by April 6, 2004. The petition must be filed in accordance 
with the filing instructions in paragraph G, above, for petitions 
submitted under 10 CFR 2.309, except that State and Federally 
recognized Indian tribes do not need to address the standing 
requirements in 10 CFR 2.309(d)(1). The Commission will rule on 
petitions filed under 10 CFR 2.309(d)(2). The entities listed above 
could also seek to participate in a hearing as a non-party pursuant to 
10 CFR 2.315(c).
    I. Any person who does not wish, or is not qualified, to become a 
party to this proceeding may request permission to make a limited 
appearance pursuant to the provisions of 10 CFR 2.315(a). A person 
making a limited appearance may make an oral or written statement of 
position on the issues, but may not otherwise participate in the 
proceeding. A limited appearance may be made at any session of the 
hearing or at any prehearing conference, subject to such limits and 
conditions as may be imposed by the Board. Persons desiring to make a 
limited appearance are requested to inform the Secretary of the 
Commission by April 6, 2004.

III. Commission Guidance

A. Contentions on Environmental Justice

    The Commission will make the determination as to whether 
contentions associated with environmental justice matters will be 
admitted in this proceeding. Parties responding to such contentions 
pursuant to 10 CFR 2.309(h) shall submit their answers to the 
Commission's Secretary as noted above with copies to the other parties 
and Board. The Commission itself will rule on the admissibility of such 
contentions and provide appropriate guidance on the litigation of such 
contentions.

B. Presiding Officer Determination of Contentions

    For contentions other than environmental justice (addressed in 
III.A. above), the presiding officer shall issue a decision on the 
admissibility of contentions no later than sixty (60) days after the 
petitions and contentions are referred to the ASLB.

C. Novel Legal Issues

    If rulings on the admissibility of contentions or the admitted 
contentions themselves raise novel legal or policy questions, the 
Commission will provide early guidance and direction on the treatment 
and resolution of such issues. Accordingly, the Commission directs the 
Board to promptly certify to the Commission in accordance with 10 CFR 
2.319(l) and 2.323(f) all novel legal or policy issues that would 
benefit from early Commission consideration should such issues arise in 
this proceeding.

D. Discovery Management

    (1) All parties, except the NRC staff, shall make the mandatory 
disclosures required by 10 CFR 2.704 within forty-five (45) days of the 
issuance of the order admitting that contention.
    (2) The presiding officer, consistent with fairness to all parties, 
should narrow the issues requiring discovery and limit discovery to no 
more than one round for admitted contentions.
    (3) All discovery against the Staff shall be governed by 10 CFR 
2.336(b) and 2.709. The Staff shall comply with 10 CFR 2.336(b) no 
later than 30 days after the ASLB order admitting contentions and shall 
update the information at the same time as the issuance of the Safety 
Evaluation Report (SER) or the Final Environmental Impact Statement 
(FEIS). Discovery under 10 CFR 2.709 shall not commence until the 
issuance of the particular document, i.e., SER or EIS, unless the ASLB 
in its discretion finds that commencing discovery against the Staff on 
safety issues before the SER is issued, or on environmental issues 
before the FEIS is issued will expedite the hearing without adversely 
impacting the Staff's ability to complete its evaluations in a timely 
manner.
    (4) No later than 30 days before the commencement of the hearing at 
which an issue is to be presented, all parties other than the Staff 
shall make the pretrial disclosures required by 10 CFR 2.704(c).

E. Hearing Schedule

    The Commission believes that a reasonably-achievable schedule would 
result in a final NRC decision on the pending application within about 
two and a half years of the date the application was received, and the 
Commission thus will impose a 30-month milestone schedule for this 
proceeding. The Commission recognizes, however, that legislation 
currently being considered would require the NRC to issue decisions on 
new enrichment facility applications within two years of receipt of the 
application; consequently, the Commission will endeavor to identify 
efficiencies, and provide the pertinent resources, to further reduce 
the time the agency needs to complete reviews and reach decisions in 
licensing uranium enrichment facilities.
    In the interest of providing a fair hearing, avoiding unnecessary 
delays in the NRC's review and hearing process, and producing an 
informed adjudicatory record that supports the licensing determination 
to be made in this proceeding, the Commission directs that both the 
Atomic Safety and Licensing Board and the NRC staff, as well as the 
applicant and other parties to this proceeding, follow the applicable 
requirements contained in the new 10 CFR part 2 and the guidance in the 
Commission's Statement of Policy on Conduct of Adjudicatory 
Proceedings, CLI-98-12, 48 NRC 18 (1998) [63 FR 41872 (August 5, 1998)] 
to the extent that such guidance is not inconsistent with specific 
guidance in this Order.

[[Page 5876]]

The guidance in the Statement of Policy on Conduct of Adjudicatory 
Proceedings is intended to improve the management and the timely 
completion of the proceeding and addresses hearing schedules, parties' 
obligations, contentions, and discovery management. Consistent with 
that guidance, the Commission directs the Licensing Board to 
expeditiously decide legal and policy issues that may resolve threshold 
issues or expedite this proceeding. Threshold environmental legal and 
policy issues need not await issuance of the final EIS. In addition, 
the Commission is providing the following direction for this 
proceeding:
    (1) The Commission directs the Licensing Board to set a schedule 
for the hearing in this proceeding consistent with this order that 
establishes as a goal the issuance of a final Commission decision on 
the pending application within two and a half years (30 months) from 
the date that the application was received. Formal discovery against 
the Staff shall be suspended until after the Staff completes its final 
SER and EIS in accordance with the direction provided in paragraph 
D.(3), above.
    (2) The evidentiary hearing with respect to issues should commence 
promptly after completion of the final staff documents (SER or EIS) 
unless the Licensing Board in its discretion finds that starting the 
hearing with respect to one or more safety issues prior to issuance of 
the final SER \2\ (or one or more environmental contentions directed to 
the applicant's Environmental Report) will expedite the proceeding 
without adversely impacting the Staff's ability to complete its 
evaluations in a timely manner.
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    \2\ The Commission believes that, in the appropriate 
circumstances, allowing discovery or an evidentiary hearing with 
respect to safety-related issues to proceed before the final SER is 
issued will serve to further the Commission's objective, as 
reflected in the Statement of Policy on Conduct of Adjudicatory 
Proceedings, CLI-98-12, supra, to ensure a fair, prompt, and 
efficient resolution of contested issues. For example, it may be 
appropriate for the Licensing Board to permit discovery against the 
staff and/or the commencement of an evidentiary hearing with respect 
to safety issues prior to the issuance of the final SER in cases 
where the applicant has responded to the Staff's ``open items'' and 
there is an appreciable lag time until the issuance of the final 
SER, or in cases where the initial SER identifies only a few open 
items.
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    (3) The Commission also believes that issuing a decision on the 
pending application within about two and a half years may be reasonably 
achieved under the rules of practice contained in the new 10 CFR part 2 
and the enhancements directed by this order. We do not expect the 
Licensing Board to sacrifice fairness and sound decision-making to 
expedite any hearing granted on this application. We do expect, 
however, the Licensing Board to use the techniques specified in this 
order and in the Commission's policy statement on the conduct of 
adjudicatory proceedings (CLI-98-12, supra) to ensure prompt and 
efficient resolution of contested issues. See also Statement of Policy 
on Conduct of Licensing Proceedings, CLI-81-8, 13 NRC 452 (1981).
    (4) If this is a contested proceeding, the Board should adopt the 
following milestones, in developing a schedule, for conclusion of 
significant steps in the adjudicatory proceeding: \3\
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    \3\ This schedule assumes that the SER and Final EIS are issued 
essentially at the same time. If these documents are not to be 
issued very close in time, the Board should adopt separate schedules 
but concurrently running for the safety and environmental reviews 
consistent with the time frames herein for each document.

Within 10 days of the Commission's       Persons found to have standing
 order determining standing and           or entities participating
 admission of any environmental justice   under 10 CFR 2.309(d) may
 contentions:                             submit a motion for
                                          reconsideration (see, below,
                                          at Section IV.B).*
Within 20 days of the Commission's       Persons found to have standing
 order determining standing:              or entities participating
                                          under 10 CFR 2.309(d) may
                                          respond to any motion for
                                          reconsideration.
Within 60 days of the Commission's       ASLB decision on admissibility
 order determining standing and           of remaining contentions.
 referring the petition and contentions
 to the ASLB:
Within 30 days of the ASLB decision      Staff prepares hearing file.
 determining admission of contentions:
Within 90 days of the ASLB decision      Completion of discovery on
 determining admission of contentions:.   admitted contentions, except
                                          against the Staff (including
                                          contentions on environmental
                                          issues arising under NEPA).
Within 110 days of the ASLB decision     Deadline for summary
 determining admission of contentions:    disposition motions on
                                          admitted contentions.**
Within 150 days of the ASLB decision     ASLB decision on summary
 determining admission of contentions:    disposition motions on
                                          admitted contentions.
Date of issuance of final SER/EIS:       Staff updates hearing file.
Within 20 days of the issuance of final  Motions to amend contentions;
 SER/EIS:                                 motions for late-filed
                                          contentions.
Within 40 days of the issuance of final  Completion of answers and
 SER/EIS:                                 replies to motions for amended
                                          and late-filed contentions.
Within 50 days of the issuance of final  ASLB decision on admissibility
 SER/EIS:                                 of late-filed contentions;
                                          deadline for summary
                                          disposition motions on
                                          remaining admitted
                                          contentions.***
Within 80 days of the issuance of final  Completion of discovery on late-
 SER/EIS:                                 filed contentions; ASLB
                                          decision on summary
                                          disposition motions on
                                          remaining contentions.
Within 90 days of the issuance of final  Direct testimony filed on
 SER/EIS:                                 remaining contentions and any
                                          amended or admitted late-filed
                                          contentions.
Within 100 days of the issuance of       Cross-examination plans filed
 final SER/EIS:                           on remaining contentions and
                                          any amended or admitted late-
                                          filed contentions.
Within 105 days of the issuance of       Evidentiary hearing begins on
 final SER/EIS:                           remaining contentions and any
                                          amended or admitted late-filed
                                          contentions.
Within 135 days of the issuance of       Completion of evidentiary
 final SER/EIS:                           hearing on remaining
                                          contentions and any amended or
                                          admitted late-filed
                                          contentions.
Within 180 days of the issuance of       Completion of findings and
 final SER/EIS:                           replies.
Within 240 days of the issuance of       ASLB's initial decision.
 final SER/EIS:
 
* Motions for reconsideration do not stay this schedule.
** The schedule presumes that a prehearing conference order would
  establish the deadline for filing of summary disposition motions 20
  days after close of discovery consistent with 10 CFR 2.710(a), answers
  to be filed 10 days after filing of any motion, replies to be filed 10
  days after any answer, and the ASLB to issue a decision on any summary
  disposition motion 20 days thereafter.
*** No summary disposition motions on late-filed contentions are
  contemplated.


[[Page 5877]]

    To meet these milestones, the Licensing Board should direct the 
participants to serve all filings by electronic mail (in order to be 
considered timely, such filings must be received by the Licensing Board 
and parties no later than midnight Eastern Time on the date due, unless 
otherwise designated by the Licensing Board), followed by conforming 
hard copies that may be sent by regular mail. If participants do not 
have access to electronic mail, the Licensing Board should adopt other 
expedited methods of service, such as express mail, which would ensure 
receipt on the due date (``in-hand''). If pleadings are filed by 
electronic mail, or other expedited methods of service which would 
ensure receipt on the due date, the additional period provided in our 
regulations for responding to filings served by first-class mail or 
express delivery shall not be applicable. See 10 CFR 2.306.
    In addition, to avoid unnecessary delays in the proceeding, the 
Licensing Board should not grant requests for extensions of time absent 
unavoidable and extreme circumstances. Although summary disposition 
motions are included in the schedule above, the Licensing Board shall 
not entertain motions for summary disposition under 10 CFR. 2.710, 
unless the Licensing Board finds that such motions are likely to 
expedite the proceeding. Unless otherwise justified, the Licensing 
Board shall provide for the simultaneous filing of answers to proposed 
contentions, responsive pleadings, proposed findings of fact, and other 
similar submittals.
    (5) Parties are obligated in their filings before the Licensing 
Board and the Commission to ensure that their arguments and assertions 
are supported by appropriate and accurate references to legal authority 
and factual basis, including, as appropriate, citation to the record. 
Failure to do so may result in material being stricken from the record 
or, in extreme circumstances, in a party being dismissed from the 
proceeding.
    (6) The Commission directs the Licensing Board to inform the 
Commission promptly, in writing, if the Licensing Board determines that 
any single milestone could be missed by more than 30 days. The 
Licensing Board must include an explanation of why the milestone cannot 
be met and the measures the Licensing Board will take to mitigate the 
failure to achieve the milestone and restore the proceeding to the 
overall schedule.

F. Commission Oversight

    As in any proceeding, the Commission retains its inherent 
supervisory authority over the proceeding to provide additional 
guidance to the Licensing Board and participants and to resolve any 
matter in controversy itself.

IV. Applicable Requirements

    A. The Commission will license and regulate byproduct, source, and 
special nuclear material at the National Enrichment Facility in 
accordance with the Atomic Energy Act of 1954, as amended. Section 
274c.(1) of the Act was amended by Public Law 102-486 (October 24, 
1992) to require the Commission to retain authority and responsibility 
for the regulation of uranium enrichment facilities. Therefore, in 
compliance with law, the Commission will be the sole licensing and 
regulatory agency with respect to byproduct, source, and special 
nuclear material for the National Enrichment Facility, and with respect 
to the control and use of any equipment or device in connection 
therewith.
    Many rules and regulations in 10 CFR chapter I are applicable to 
the licensing of a person to receive, possess, use, transfer, deliver, 
and process byproduct, source and special nuclear material in the 
quantities that would be possessed at the National Enrichment Facility. 
These include 10 CFR parts 19, 20, 21, 25, 30, 40, 51, 70, 71, 73, 74 , 
95, 140, 170, and 171 for the licensing and regulation of byproduct, 
source, and special nuclear material, including requirements for 
notices to workers, reporting of defects, radiation protection, waste 
disposal, decommissioning funding, and insurance.
    With respect to these regulations, the Commission notes that this 
is the second proceeding involving the licensing of an enrichment 
facility. The Commission issued a number of decisions in an earlier 
proceeding regarding a proposed site in Homer, Louisiana. These final 
decisions, Louisiana Energy Services (Claiborne Enrichment Center), 
CLI-92-7, 35 NRC 93 (1992); Louisiana Energy Services (Claiborne 
Enrichment Center), CLI-97-15, 46 NRC 294 (1997); and Louisiana Energy 
Services (Claiborne Enrichment Center), CLI-98-3, 47 NRC 77 (1998), 
resolve a number of issues concerning uranium enrichment licensing and 
may be relied upon as precedent.
    Consistent with the Atomic Energy Act of 1954, as amended, and the 
Commission's regulations, the Commission is providing the following 
direction for licensing uranium enrichment facilities:
1. Environmental Issues
    (a) General: 10 CFR part 51 governs the preparation of an 
environmental report and an environmental impact statement (EIS) for a 
materials license. LES's environmental report and the NRC staff's 
associated EIS are to include a statement on the alternatives to the 
proposed action, including a discussion of the no-action alternative.
    (b) Treatment of depleted uranium hexafluoride tails: As to the 
treatment of the disposition of depleted uranium hexafluoride tails 
(depleted tails) in these environmental documents, unless LES 
demonstrates a use for the uranium in the depleted tails as a potential 
resource, the depleted tails may be considered waste. In addition, if 
such waste meets the definition of ``waste'' in 10 CFR 61.2, the 
depleted tails are to be considered low-level radioactive waste within 
the meaning of 10 CFR part 61 in which case an approach by LES to 
transfer to DOE for disposal by DOE of LES'' depleted tails pursuant to 
Section 3113 of the USEC Privatization Act constitutes a ``plausible 
strategy'' for dispositioning the LES depleted tails. The NRC staff may 
consider the DOE EIS in preparing the staff's EIS. Alternatives for the 
disposition of depleted uranium tails will need to be addressed in 
these documents. As part of the licensing process, LES must also 
address the health, safety, and security issues associated with the 
storage of depleted uranium tails on site pending removal of the tails 
from the site for disposal or DOE dispositioning.
    (c) Environmental Justice: As to environmental justice matters, 
past Commission decisions are relevant precedent. These include 
Louisiana Energy Services (Claiborne Enrichment center), CLI-98-3, 47 
NRC 77 (1998) and Private Fuel Storage, L.L.C. (Independent Spent Fuel 
Storage Installation), CLI-02-20, 56 NRC 147 (2002) that limit 
treatment of certain issues in NRC proceedings. In addition, the 
Commission notes that it recently issued for comment a draft Policy 
Statement on the Treatment of Environmental Justice Matters in NRC 
Regulatory and Licensing Actions, 68 FR 62642 (November 5, 2003). As 
noted above in Section III, the admissibility of proffered 
environmental justice contentions will be determined by the Commission.
2. Financial Qualifications
    Review of financial qualifications for enrichment facility license 
applications is governed by 10 CFR part 70. In Louisiana Energy 
Services (Claiborne Enrichment Center), CLI-97-15, 46 NRC

[[Page 5878]]

294, 309 (1997), the Commission held that the part 70 financial 
criteria, 10 CFR 70.22(a)(8) and 70.23(a)(5), could be met by 
conditioning the LES license to require funding commitments to be in 
place prior to construction and operation. The specific license 
condition approved in that proceeding, which addressed a minimum equity 
contribution of 30% from the parents and affiliates of LES partners 
prior to construction of the associated capacity and having in place 
long term enrichment contracts with prices sufficient to cover both 
construction and operating costs, including a return on investment, for 
the entire term of the contracts prior to constructing or operating the 
facility, is one way to satisfy the requirements of part 70.
3. Antitrust Review
    The LES enrichment facility is subject to licensing pursuant to 
sections 53 and 63 of the Atomic Energy Act (Act), and is not a 
production and utilization facility licensed under section 103. 
Consequently the NRC does not have antitrust responsibilities for LES 
similar to the antitrust responsibilities under section 105 of the Act. 
The NRC will not entertain or consider antitrust issues in connection 
with the LES application in this proceeding.
4. Foreign Ownership
    The LES application is governed by sections 53 and 63 of the Act, 
and consequently issues of foreign involvement shall be determined 
pursuant to section 57 and not section 103, 104 or 193(f). Section 57 
of the Act requires, among other things, an affirmative finding by the 
Commission that issuance of a license for NEF will not be ``inimical to 
the common defense and security.''
5. Creditor Requirements
    Pursuant to section 184 of the Act, the creditor regulations in 10 
CFR 50.81 shall apply to the creation of creditor interests in 
equipment, devices, or important component parts thereof, capable of 
separating the isotopes of uranium or enriching uranium in the isotope 
U 235. In addition, the creditor regulations in 10 CFR 70.44 
shall apply to the creation of creditor interests in special nuclear 
material. These creditor regulations may be augmented by license 
conditions as necessary to allow ownership arrangements (such as sale 
and leaseback) not covered by 10 CFR 50.81, provided it can be found 
that such arrangements are not inimical to the common defense and 
security of the United States.
6. Classified Information
    All matters of classification of information related to the design, 
construction, operation, and safeguarding of the NEF shall be governed 
by classification guidance in ``Joint NRC/DOE Classification Guide for 
Louisiana Energy Services Gas Centrifuge Plant (CG-LCP-1)'' (1992) 
(Confidential--Restricted data) and any later versions. Any person 
producing such information must adhere to the criteria in CG-LCP-1. All 
decisions on questions of classification or declassification of 
information shall be made by appropriate classification officials in 
the NRC and are not subject to de novo review in this proceeding.
7. Access to Classified Information Pursuant to 10 CFR Part 25
    Portions of LES' application for a license are classified 
Restricted Data or National Security Information. Persons needing 
access to those portions of the application will be required to have 
the appropriate security clearance for the level of classified 
information to which access is required. Access to certain classified 
Third Agency or Foreign Government Information may be subject to 
special controls and require the prior approval of the Director, 
Division of Nuclear Security, NSIR. Access requirements apply equally 
to intervenors, their witnesses and counsel, employees of the 
applicant, its witnesses and counsel, NRC personnel, and others. Any 
person who believes that he or she will have a need for access to 
classified information for the purpose of this licensing proceeding, 
including the hearing, should immediately contact the U.S. Nuclear 
Regulatory Commission, Division of Facilities and Security, ADM, 
Washington, DC 20555, for information on the clearance process. 
Telephone calls may be made to Cheryl M. Stone, Chief, Security Branch. 
Telephone: (301) 415-7404.
8. Obtaining NRC Security Facility Approval and for Safeguarding 
Classified Information Received or Developed Pursuant to 10 CFR Part 95
    Any person who requires possession of classified information in 
connection with the licensing proceeding may process, store, reproduce, 
transmit, or handle classified information only in a location for which 
facility security approval has been obtained from the NRC's Division of 
Nuclear Security, NSIR, Washington, DC 20555. Telephone calls may be 
made to A. Lynn Silvious, Chief, Information Security Section. 
Telephone: (301) 415-2214.
    B. Reconsideration: The above guidance does not foreclose the 
applicant, any person admitted as a party to the hearing, or an entity 
participating under 10 CFR 2.315(c) from litigating material factual 
issues necessary for resolution of contentions in this proceeding. 
Persons found by the Commission to have standing and entities 
participating under 10 CFR 2.315(c) as of the date of the Commission's 
order on standing may also move the Commission to reconsider any 
portion of Section IV of this Notice and Commission Order where there 
is no clear Commission precedent or unambiguously governing statutes or 
regulations. Any motion to reconsider must be filed within 10 days 
after the Commission's order on standing. The motion must contain all 
technical or other arguments to support the motion. Other persons 
granted standing and entities participating under 10 CFR 2.315(c), 
including the applicant and the NRC staff, may respond to motions for 
reconsideration within 20 days of the Commission's Order. Motions will 
be ruled upon by the Commission. A motion for reconsideration does not 
stay the schedule set out above in section III.E.(4). However, if the 
Commission grants a motion for reconsideration, it will, as necessary, 
provide direction on adjusting the hearing schedule.

V. Pending Energy Legislation

    The Energy Policy Act of 2003, H.R. 6, is currently pending in 
Congress. H.R. 6, as currently constituted, contains provisions that 
address the manner in which certain issues are to be dealt with and a 
schedule for overall Commission consideration of an application for 
licensing a uranium enrichment facility. In the event that H.R. 6 is 
enacted, the Commission may need to issue an additional order to 
conform guidance and schedules for the LES application to any new 
statutory requirements.

VI. Notice of Intent Regarding Classified Information

    As noted above, a hearing on this application will be governed by 
the new 10 CFR part 2, Subparts A, C, G, and to the extent classified 
material becomes involved, Subpart I. Subpart I requires in accordance 
with 10 CFR 2.907 that the NRC staff file a notice of intent if, at the 
time of publication of Notice of Hearing, it appears that it will be 
impracticable for the staff to avoid the introduction of Restricted 
Data or National Security Information into a proceeding. The applicant 
has submitted portions of its application

[[Page 5879]]

that are classified. The Commission notes that, since the entire 
application becomes part of the record of the proceeding, the NRC staff 
has found it impracticable for it to avoid the introduction of 
Restricted Data or National Security Information into the proceeding.
    It is so ordered.

    Dated at Rockville, Maryland, this 30th day of January, 2004.

    For the Nuclear Regulatory Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.
[FR Doc. 04-2550 Filed 2-5-04; 8:45 am]
BILLING CODE 7590-01-P