Court gives state of New York review authority over Indian Point license renewals

The New York Court of Appeals on Nov. 21 ruled on the issue of whether Entergy Nuclear Operations Inc.‘s pending application to renew its federal operating licenses for the Indian Point nuclear reactors on the Hudson River for an additional 20 years is subject to review by the New York State Department of State for consistency under New York’s Coastal Management Program (CMP).

The Department of State, interpreting the CMP, which it authored, concluded that the renewal application did not fit within the CMP’s grandfather exemptions and that Entergy’s application is therefore subject to review. Said the Nov. 21 court decision: “We conclude that the Department of State’s determination is rational, and accordingly, the Appellate Division order holding that Indian Point is exempt from review should be reversed.”

Entergy’s Indian Point nuclear facility has two active nuclear reactors, Indian Point 2 and Indian Point 3. The Nuclear Regulatory Commission’s (NRC) predecessor, the Atomic Energy Commission, issued 40-year operating licenses for Indian Point 2 in 1973 and Indian Point 3 in 1975, when Consolidated Edison owned all three reactors, including a long-retired Unit 1. Entergy continues to operate the reactors under the original 40-year licenses.

Federal law limits the term of a initial operating license to a maximum of 40 years. In 1995, the NRC adopted its current “Part 54” regulations, authorizing the re-licensing of nuclear reactors for up to 20 years beyond the original term.

Congress adopted the Coastal Zone Management Act (the Act) in 1972, to encourage the states to protect their coastal resources, with an aim “to preserve, protect, develop, and where possible, to restore or enhance, the resources of the Nation’s coastal zone for this and succeeding generations.” 

In 1982, New York adopted a Coastal Management Plan (CMP) under that act. The Department of State took the lead in preparing the CMP and administers it. Certain grandfathered projects are exempt from the CMP’s consistency requirement.

The license for Indian Point 2 expired in September 2013 and the license for Indian Point 3 expired in December 2015. In 2007, Entergy applied to the NRC for a 20-year renewal of both operating licenses, and initially took the position with the NRC that its application was subject to the Department of State’s federal consistency review under the CMP. However, in 2012, Entergy changed its position and sought a ruling from the NRC that its re-licensing application was not subject to the department’s review for consistency with the CMP.

The State of New York opposed Entergy’s request and cross-moved for a declaratory ruling that consistency review was required. The NRC staff recommended that Entergy’s motion be denied because consistency review issues should be resolved by the Department of State in the first instance. In June 2013, the NRC’s Atomic Safety and Licensing Board ruled that Entergy’s motion and New York’s cross-motion were premature because the New York Department of State and the NRC staff had not yet consulted.

Entergy subsequently sought a declaratory ruling from the Department of State as to whether its license renewal application was exempt from the CMP’s consistency requirement. It argued that the license renewals were not subject to consistency review because Indian Point 2 and 3 were grandfathered and that the facilities’ final environmental impact statements were adopted before the effective date of the Department of State regulations referenced in that exemption.

The Department of State determined that Entergy’s application to extend its operating licenses for 20 years was not exempt from consistency review under the CMP. Entergy then commenced this court proceeding/declaratory judgment action seeking to annul the department’s determination and requesting a declaratory judgment that the Indian Point nuclear reactors are not subject to the CMP. A state court, among other things, upheld as rational the department’s determination that neither exemption in the CMP applied, and dismissed the proceeding. The Appellate Division reversed, holding that Indian Point fit within the second of the two exemptions listed in the CMP. The Appellate Division did not address whether Indian Point had also met the criteria of the first listed exemption.

Regarding the first exemption, for “those projects identified as grandfathered pursuant to State Environmental Quality Review Act [SEQRA] at the time of its enactment in 1976,” Entergy contended before the Department of State that Indian Point 2 and 3 were identified as grandfathered pursuant to SEQRA at the time of its enactment. In response, the department reasoned that the exemption was not automatic, that the relevant agency had to expressly identify the specific project as being exempt from SEQRA, and that the exemption from consistency was not coextensive with the SEQRA grandfathering provision. Regarding Indian Point 3, the department noted that in 1978 the New York Power Authority had included Indian Point 3 on such a list. Nevertheless, the department concluded that this listing did not exempt the current re-licensing application as the 1978 listing was limited to construction of certain facilities and acquisition of certain real property and easements, none of which referred to the operation of Indian Point 3.

The appeals court said in the Nov. 21 ruling that the Department of State’s interpretation of the first exemption — unlike Entergy’s — gives effect to the plain language of the exemption, and so the court upholds the department’s conclusion that the first exemption is inapplicable to Indian Point.

The second exemption applies to “those projects for which a final environmental impact statement has been prepared prior to the effective date of the Department of State part 600 regulations.” The department determined that this exemption must be understood as exempting projects for which a SEQRA environmental impact statement had been prepared, and projects which pre-existed, but would have otherwise been subject to, the part 600 regulations on their effective date. 

The court said Nov. 21 that itt was rational for the Department of State to reject Entergy’s argument that final environmental impact statements pursuant to the National Environmental Policy Act (NEPA) would satisfy this exemption, and that statements prepared under SEQRA are not required. In this appeal, Entergy points out that SEQRA permits the use of final environmental impact statements prepared under NEPA. 

Entergy’s current application for a license to operate the Indian Point reactors for an additional 20 years is a new federal action, involving a new project, with different impacts and concerns than were present when the initial environmental impact statements were issued over 40 years ago. The court added: “Thus, just as renewal of a license to operate a nuclear power plant triggers the requirement that the NRC produce a supplemental environmental impact statement, both the Coastal Zone Management Act and the CMP require consistency review for re-licensing of nuclear facilities. The Department’s position that the Indian Point reactors are not forever exempt from consistency review under the CMP, is reasonable.”

The court concluded: “In sum, the Department of State’s interpretation of the exemptions in the Coastal Management Program, and its conclusion that Entergy’s application to re-license the nuclear reactors at Indian Point is subject to consistency review are rational, and must be sustained. Accordingly, the Appellate Division order should be reversed, with costs, the petition denied, and judgment granted in favor of the Department of State appellants in accordance with this opinion.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.