[Federal Register Volume 84, Number 167 (Wednesday, August 28, 2019)]
[Notices]
[Pages 45178-45182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18490]
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NUCLEAR REGULATORY COMMISSION
[Docket No. 50-293; NRC-2019-0152]
Entergy Nuclear Operations, Inc.; Pilgrim Nuclear Power Station
AGENCY: Nuclear Regulatory Commission.
ACTION: Exemption; issuance.
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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is issuing an
exemption in response to a November 16, 2018, request from Entergy
Nuclear Operations, Inc. (ENOI), on behalf of Entergy Nuclear
Generation Company (to be renamed Holtec Pilgrim, LLC) and Holtec
Decommissioning International, LLC (HDI). The exemption permits Holtec
Pilgrim, LLC and HDI to use funds from the Pilgrim decommissioning
trust fund for management of spent fuel and site restoration
activities. By Order dated
[[Page 45179]]
August 22, 2019, the NRC approved the request for the direct transfer
of ENOI's operating authority to HDI and the indirect transfer of
control of the Renewed Facility Operating License No. DPR-35 for
Pilgrim, as well as the general license for the Pilgrim Independent
Spent Fuel Storage Installation, to Holtec International. This
exemption is being issued simultaneously with the license transfer
Order and will be effective upon the NRC's issuance of a conforming
license amendment reflecting Holtec Pilgrim, LLC and HDI as the
licensees for Pilgrim, following consummation of the license transfer
transaction.
DATES: The exemption was issued on August 22, 2019.
ADDRESSES: Please refer to Docket ID NRC-2019-0152 when contacting the
NRC about the availability of information regarding this document. You
may obtain publicly-available information related to this document
using any of the following methods:
Federal Rulemaking Website: Go to https://www.regulations.gov and search for Docket ID NRC-2019-0152. Address
questions about NRC docket IDs in Regulations.gov to Jennifer Borges;
telephone: 301-287-9127; email: [email protected]. For technical
questions, contact the individual listed in the FOR FURTHER INFORMATION
CONTACT section of this document.
NRC's Agencywide Documents Access and Management System
(ADAMS): You may obtain publicly-available documents online in the
ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``Begin Web-based ADAMS
Search.'' For problems with ADAMS, please contact the NRC's Public
Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or
by email to [email protected]. The ADAMS accession number for each
document referenced (if it is available in ADAMS) is provided the first
time that it is mentioned in this document.
NRC's PDR: You may examine and purchase copies of public
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555
Rockville Pike, Rockville, Maryland 20852.
FOR FURTHER INFORMATION CONTACT: Scott P. Wall, Office of Nuclear
Reactor Regulation; U.S. Nuclear Regulatory Commission, Washington, DC
20555-0001; telephone: 301-415-2855; email: [email protected].
SUPPLEMENTARY INFORMATION: The text of the exemption is attached.
Dated at Rockville, Maryland, this 22nd day of August, 2019.
For the Nuclear Regulatory Commission.
Scott P. Wall,
Senior Project Manager, Plant Licensing Branch III, Division of
Operating Reactor Licensing, Office of Nuclear Reactor Regulation.
Attachment--Exemption
NUCLEAR REGULATORY COMMISSION
Docket No. 50-293
Holtec Decommissioning International, LLC
Pilgrim Nuclear Power Station
Exemption
I. Background
By letter dated November 10, 2015 (Agencywide Documents Access
and Management System (ADAMS) Accession No. ML15328A053), Entergy
Nuclear Operations, Inc. (ENOI), submitted a notification to the
U.S. Nuclear Regulatory Commission (NRC) indicating that it would
permanently shut down Pilgrim Nuclear Power Station (Pilgrim) no
later than June 1, 2019. By letter dated June 10, 2019 (ADAMS
Accession No. ML19161A033), ENOI submitted to the NRC a
certification in accordance with Sec. 50.82(a)(1) of Title 10 of
the Code of Federal Regulations (10 CFR), stating that Pilgrim
permanently ceased power operations on May 31, 2019, and that as of
June 9, 2019, all fuel had been permanently removed from the Pilgrim
reactor vessel and placed in the spent fuel pool. Accordingly,
pursuant to 10 CFR 50.82(a)(2), the Pilgrim renewed facility
operating license no longer authorizes operation of the reactor or
emplacement or retention of fuel in the reactor vessel. By letter
dated November 16, 2018 (ADAMS Accession No. ML18320A036), ENOI
submitted the updated Pilgrim spent fuel management plan (SFMP)
pursuant to 10 CFR 50.54(bb) and preliminary decommissioning cost
estimate (DCE). By letter dated November 16, 2018 (ADAMS Accession
No. ML18320A034), as supplemented by letter dated January 9, 2019
(ADAMS Accession No. ML19015A020) and letter dated July 29, 2019
(ADAMS Accession No. ML19210E470), ENOI submitted a post-shutdown
decommissioning activities report (PSDAR) and the site-specific DCE
for Pilgrim.
By letter dated November 16, 2018 (ADAMS Accession No.
ML18320A031), ENOI, on behalf of itself and Entergy Nuclear
Generation Company (ENGC) (to be known as Holtec Pilgrim, LLC
(Holtec Pilgrim)), Holtec International (Holtec), and Holtec
Decommissioning International (HDI) submitted a license transfer
application (LTA) requesting that the NRC consent to the direct
transfer of ENOI's operating authority to HDI and the indirect
transfer of control of the Pilgrim Renewed Facility Operating
License and the General License for the Pilgrim Independent Spent
Fuel Storage Installation (ISFSI) to Holtec. By letter dated
November 16, 2018 (ADAMS Accession No. ML18320A040), HDI submitted a
``Notification of Revised Post-Shutdown Decommissioning Activities
Report and Revised Site-Specific Decommissioning Cost Estimate for
Pilgrim Nuclear Power Station'' (revised PSDAR), to notify the NRC
of changes to accelerate the schedule for the prompt decommissioning
(i.e., the DECON method for decommissioning) of Pilgrim and
unrestricted release of all portions of the site (excluding the
ISFSI) within 8 years after the license transfer.
Under the proposed transfers, Holtec Pilgrim will own the
Pilgrim nuclear facility and will have responsibility for Pilgrim as
its licensed owner. Holtec Pilgrim will enter into an agreement for
decommissioning services with HDI, with HDI acting as Holtec
Pilgrim's agent and with Holtec Pilgrim paying for all HDI expenses
related to decommissioning, spent fuel management, and site
restoration. Accordingly, HDI will become the licensed operator for
decommissioning.
II. Request/Action
The requested exemption from 10 CFR 50.82(a)(8)(i)(A) would
permit Holtec Pilgrim and HDI to use funds from the Pilgrim
Decommissioning Trust Fund (DTF) for spent fuel management and site
restoration activities in accordance with HDI's site-specific DCE
for Pilgrim. HDI submitted a revised site-specific DCE for Pilgrim
by letter dated November 16, 2018, as part of the revised PSDAR. A
similar exemption request from Entergy was approved by the NRC for
Pilgrim by letter dated July 22, 2019 (ADAMS Accession No.
ML19162A334).
The 10 CFR 50.82(a)(8)(i)(A) requirement restricts the use of
DTF withdrawals to expenses for legitimate decommissioning
activities consistent with the definition of decommissioning that
appears in 10 CFR 50.2. The definition of ``decommission'' in 10 CFR
50.2 reads as follows:
To remove a facility or site safely from service and reduce residual
radioactivity to a level that permits--
(1) Release of the property for unrestricted use and termination
of the license; or
(2) Release of the property under restricted conditions and
termination of the license.
This definition does not include activities associated with spent
fuel management or site restoration activities. Therefore, an
exemption from 10 CFR 50.82(a)(8)(i)(A) is needed to allow Holtec
Pilgrim and HDI to use funds from the DTF for spent fuel management
and site restoration activities.
Similar to 10 CFR 50.82(a)(8)(i)(A), provisions of 10 CFR
50.75(h)(1)(iv) and (h)(2) dictate that with certain exceptions,
disbursements from nuclear decommissioning trusts ``are restricted
to decommissioning expenses.'' However, in accordance with 10 CFR
50.75(h)(5), these provisions do not apply to ``any licensee that as
of December 24, 2003, has existing license conditions relating to
decommissioning trust agreements, so long as the licensee does not
elect to amend those license conditions.'' The operating license for
Pilgrim included ``existing license conditions relating to
decommissioning trust agreements'' on December 24, 2003, and as
such, Pilgrim is exempt from the provisions of sections (h)(1)
through (h)(3) of 10 CFR 50.75, pursuant to the terms of 10 CFR
50.75(h)(5).
[[Page 45180]]
III. Discussion
Pursuant to 10 CFR 50.12, the Commission may, upon application
by any interested person or upon its own initiative, grant
exemptions from the requirements of 10 CFR part 50(1) when the
exemptions are authorized by law, will not present an undue risk to
the public health and safety, and are consistent with the common
defense and security; and (2) when any of the special circumstances
listed in 10 CFR 50.12(a)(2) are present. These special
circumstances include, among other things:
(a) Application of the regulation in the particular
circumstances would not serve the underlying purpose of the rule or
is not necessary to achieve the underlying purpose of the rule; and
(b) Compliance would result in undue hardship or other costs
that are significantly in excess of those contemplated when the
regulation was adopted, or that are significantly in excess of those
incurred by others similarly situated.
A. Authorized by Law
The requested exemption from 10 CFR 50.82(a)(8)(i)(A) would
allow Holtec Pilgrim and HDI to use a portion of the funds from the
DTF for spent fuel management and site restoration activities at
Pilgrim in the same manner that withdrawals are made under 10 CFR
50.82(a)(8) for radiological decommissioning activities. As stated
above, 10 CFR 50.12 allows the NRC to grant exemptions from the
requirements of 10 CFR part 50 when the exemptions are authorized by
law. The NRC staff has determined, as explained further below, that
there is reasonable assurance of adequate funding for radiological
decommissioning because the Applicants' use of the DTF for
activities associated with spent fuel management and site
restoration will not negatively impact the availability of funding
for radiological decommissioning. Accordingly, the exemption is
authorized by law because granting the licensee's proposed exemption
will not result in a violation of the Atomic Energy Act of 1954, as
amended, or the Commission's regulations.
B. No Undue Risk to Public Health and Safety
The underlying purpose of 10 CFR 50.82(a)(8)(i)(A) is to provide
reasonable assurance that adequate funds will be available for the
radiological decommissioning of power reactors and license
termination. As explained in further detail in Section D below,
based on NRC staff's review of HDI's revised site-specific DCE and
the staff's independent cash flow analysis contained in Attachment 1
to the NRC staff's safety evaluation for the associated LTA (ADAMS
Accession No. ML19170A250), the NRC staff finds that the use of the
Pilgrim DTF for spent fuel management and site restoration
activities at Pilgrim will not adversely impact Holtec Pilgrim and
HDI's ability to terminate the Pilgrim license (i.e., complete
radiological decommissioning) as planned, consistent with the
schedule and costs contained in the revised PSDAR.
Furthermore, withdrawals from the DTF for spent fuel management
and site restoration are still constrained by the provisions of 10
CFR 50.82(a)(8)(i)(B)-(C) and are reviewable under the annual
reporting requirements of 10 CFR 50.82(a)(8)(v)-(vii).
There are no new accident precursors created by using the DTF in
the proposed manner. Thus, the probability of postulated accidents
is not increased. Also, based on the above, the consequences of
postulated accidents are not increased. No changes are being made in
the types or amounts of effluents that may be released offsite.
There is no significant increase in occupational or public radiation
exposure. Therefore, the requested exemption will not present an
undue risk to the public health and safety.
C. Consistent With the Common Defense and Security
The requested exemption would allow Holtec Pilgrim and HDI to
use funds from the Pilgrim DTF for spent fuel management and site
restoration activities at Pilgrim. Spent fuel management under 10
CFR 50.54(bb) is an integral part of the planned decommissioning and
license termination process and will not adversely affect Holtec
Pilgrim and HDI's ability to physically secure the site or protect
special nuclear material. This change to enable the use of a portion
of the funds from the DTF for spent fuel management and site
restoration activities has no relation to security issues.
Therefore, the common defense and security is not impacted by the
requested exemption.
D. Special Circumstances
Special circumstances, in accordance with 10 CFR
50.12(a)(2)(ii), are present whenever application of the regulation
in the particular circumstances is not necessary to achieve the
underlying purpose of the regulation.
The underlying purpose of 10 CFR 50.82(a)(8)(i)(A), which
restricts withdrawals from DTFs to expenses for radiological
decommissioning activities, is to provide reasonable assurance that
adequate funds will be available for radiological decommissioning of
power reactors and license termination. Strict application of this
requirement would prohibit the withdrawal of funds from the Pilgrim
DTF for spent fuel management and site restoration activities, until
final radiological decommissioning at Pilgrim has been completed.
ENOI's March 28, 2019, annual report (ADAMS Accession No.
ML19087A318) on the status of decommissioning funding for Pilgrim
reports a DTF balance of approximately $1.028 billion as of December
31, 2018, and approximately $1.043 billion as of February 28, 2019.
The cash flow analysis in Table 1 of the November 16, 2018,
application is based on a beginning DTF balance of $1.030 billion
(following closure of the equity sale in 2019).\1\ HDI states that
this beginning DTF balance reflects the fund value post-closure of
the asset sale. Furthermore, the application states that the 2019
costs include estimated pre-closure and post-closure costs. In the
NRC staff's analysis provided in its safety evaluation for the LTA,
the staff used the opening DTF balance of $1.030 billion as the
money available to cover radiological decommissioning, spent fuel
management, and site restoration costs.
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\1\ The terms of the Equity Purchase and Sales Agreement
describes the after-tax market value of the DTF must be no less than
$1.030 billion at time of transaction closing.
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The analysis in the November 16, 2018 revised PSDAR, projects
the total radiological decommissioning cost of Pilgrim to be
approximately $593 million in 2018 dollars which is lower than the
10 CFR 50.75(c) minimum formula amount of approximately $633
million. The revised PSDAR estimated decommissioning costs are
consistent with the estimated costs for radiological
decommissioning, including ISFSI decommissioning costs, provided in
the November 16, 2018 request for exemptions. However, the LTA and
the exemption request did not provide any explanation for the
difference in funding levels for radiological decommissioning costs
between the site-specific DCE and the 10 CFR 50.75(c) minimum
formula amount. Therefore, the staff sought supplemental information
from the Applicants in a request for additional information (RAI)
dated July 26, 2019, (ADAMS Accession No. ML19207B366). The RAI
requested, among other things, that the Applicants provide
justification for using a radiological decommissioning cost estimate
value that is less than the 10 CFR 50.75(c) minimum formula amount.
On July 29, 2019 (ADAMS Accession No. ML19210E470), HDI provided
its justification, stating that the HDI site-specific DCE is a more
reliable and precise estimate of decommissioning cost because it is
based on Pilgrim-specific plant data and historical information,
actual site conditions, regulatory requirements applicable to
Pilgrim, and actual pricing information, as compared to the 10 CFR
50.75(c) minimum formula amount, which is based on generic inputs.
Additionally, in both the November 16, 2018 application and the July
29, 2019 supplement, HDI states that its site-specific DCE was
reviewed against the estimates of costs associated with license
termination (radiological decommissioning) in NUREG/CR-6174,
``Revised Analyses of Decommissioning for the Reference Boiling
Water Reactor Power Station'' (ADAMS Accession No. ML14008A186),
benchmarked against nine comparable decommissioning projects, and
compared with costs from similar activities at seven boiling water
reactors. Accordingly, as part of its review, the NRC staff compared
the Pilgrim site-specific radiological decommissioning costs with
the estimated activities of the four periods associated with the
DECON decommissioning method as outlined in NUREG/CR-6174:
(1) Pre-shutdown planning/engineering and regulatory reviews,
(2) Plant deactivation and preparation for storage,
(3) A period of plant safe storage with concurrent operations in
the spent fuel pool until the pool inventory is zero, and
(4) Decontamination and dismantlement of the radioactive
portions of the plant, leading to license termination.
The NRC staff also compared the Pilgrim site-specific estimated
radiological decommissioning costs of approximately $593 million
with the site-specific costs of similar decommissioning projects.
[[Page 45181]]
Based on the review of the Pilgrim site-specific radiological
decommissioning costs of approximately $593 million, as compared to
NUREG/CR-6174, the staff concludes that HDI's method for developing
the Pilgrim site-specific radiological decommissioning cost estimate
is reasonable. Further, when compared to radiological
decommissioning costs associated with similar decommissioning
projects, the staff finds that the HDI's Pilgrim site-specific
radiological decommissioning costs of approximately $593 million is
reasonable.
As such, the staff used the value of approximately $593 million
for radiological decommissioning costs when it conducted its
independent cash flow analysis. As allowed by 10 CFR
50.75(e)(1)(ii), the staff began its cost analysis using a 2% real
rate of return on annual balances. In its application dated November
16, 2018, HDI states they also used a 2% real rate of return.
However, in Table 1 of the November 16, 2018, application, HDI noted
that the Year Ending DTF Balance is after-taxes. Therefore, in its
cost analysis, the staff found that Table 1 reflects an actual
annual real rate of return of 1.42%. The staff notes that this is
conservative to the 2% annual real rate of return allowed by 10 CFR
50.75(e)(1)(ii). To be consistent in validating HDI's site-specific
DCE, the staff used the more conservative 1.42% annual real rate of
return. The staff's independent cash flow analysis is contained in
Attachment 1 to the NRC staff's safety evaluation for the associated
LTA.
As noted above, HDI's site-specific DCE relies on estimated
radiological decommissioning costs of approximately $593 million,
which is lower than the 10 CFR 50.75(c) minimum formula amount of
approximately $633 million. In its RAI dated July 26, 2019, the
staff requested a justification for this lower amount and, in case
the Applicants' failed to provide sufficient justification, the
staff also requested that the Applicants provide a revised
decommissioning cash flow analysis using the higher minimum formula
amount of $633,267,558. In Attachment 1 of the July 29, 2019,
supplement, HDI provided the requested revised cash flow analysis.
Although the staff completed a separate, independent cash flow
analysis to validate this revised cash flow analysis, ultimately, as
noted above, the staff determined that HDI's site-specific DCE,
which uses $592,553,000 for the estimated site-specific radiological
decommissioning costs for Pilgrim, is reasonable and sufficiently
justified.
Based on its evaluation above and the cash flow analysis
contained in Attachment 1 to the NRC staff's safety evaluation for
the associated LTA, the staff finds that the funds in the DTF are
expected to be available and sufficient to cover the estimated costs
of approximately $593 million for the radiological decommissioning
of the facility (including the ISFSI). Therefore, the NRC staff
finds that HDI has provided reasonable assurance that adequate funds
will be available for the radiological decommissioning of Pilgrim,
even with the disbursement of funds from the DTF for spent fuel
management and site restoration activities. Consequently, the NRC
staff concludes that application of the 10 CFR 50.82(a)(8)(i)(A)
requirement that funds from the DTF only be used for radiological
decommissioning activities and not for spent fuel management and
site restoration activities is not necessary to achieve the
underlying purpose of the rule; thus, special circumstances are
present supporting approval of the exemption request.
By granting the exemption to 10 CFR 50.82(a)(8)(i)(A),
withdrawals from the DTF for spent fuel management and site
restoration activities, consistent with the licensee's submittal
dated November 16, 2018, are authorized. As stated previously, the
NRC staff has determined that there are sufficient funds in the DTF
to complete radiological decommissioning activities as well as to
conduct spent fuel management and site restoration activities
consistent with the revised PSDAR, DCE, SFMP, and the November 16,
2018, exemption request. Pursuant to the requirements in 10 CFR
50.82(a)(8)(v) and (vii), licensees are required to monitor and
annually report to the NRC the status of the DTF and the licensee's
funding for managing spent fuel. These reports provide the NRC staff
with awareness of, and the ability to take action on, any actual or
potential funding deficiencies. Additionally, 10 CFR 50.82(a)(8)(vi)
requires that the annual financial assurance status report must
include additional financial assurance to cover the estimated cost
of completion if the sum of the balance of any remaining
decommissioning funds, plus earnings on such funds calculated at not
greater than a 2% real rate of return, together with the amount
provided by other financial assurance methods being relied upon,
does not cover the estimated cost to complete the decommissioning.
The requested exemption would not allow the withdrawal of funds from
the DTF for any other purpose that is not currently authorized in
the regulations without prior approval from the NRC.
Special circumstances, in accordance with 10 CFR
50.12(a)(2)(iii), are present whenever compliance would result in
undue hardship or other costs that are significantly in excess of
those contemplated when the regulation was adopted, or that are
significantly in excess of those incurred by others similarly
situated. HDI states that the DTF contains funds in excess of the
estimated costs of radiological decommissioning and that these
excess funds are needed for spent fuel management and site
restoration activities. The NRC does not preclude the use of funds
from the decommissioning trust in excess of those needed for
radiological decommissioning for other purposes, such as spent fuel
management or site restoration activities (see NRC Regulatory Issue
Summary 2001-07, Rev. 1, ``10 CFR 50.75 Reporting and Recordkeeping
for Decommissioning Planning,'' dated January 8, 2009 (ADAMS
Accession No. ML083440158), and Regulatory Guide 1.184, Revision 1,
``Decommissioning of Nuclear Power Reactors,'' dated October 2013
(ADAMS Accession No. ML13144A840)). Preventing access to those
excess funds in the DTF because spent fuel management and site
restoration activities are not associated with radiological
decommissioning would create an unnecessary financial burden without
any corresponding safety benefit. The adequacy of the DTF to cover
the cost of activities associated with spent fuel management and
site restoration, in addition to radiological decommissioning, is
supported by the site-specific DCE. If the licensee cannot use its
DTF for spent fuel management and site restoration activities, it
would need to obtain additional funding that would not be
recoverable from the DTF, or the licensee would have to modify its
decommissioning approach and methods. The NRC staff concludes that
either outcome would impose an unnecessary and undue burden
significantly in excess of that contemplated when 10 CFR
50.82(a)(8)(i)(A) was adopted.
The underlying purposes of 10 CFR 50.82(a)(8)(i)(A) would be
achieved by allowing Holtec Pilgrim and HDI to use a portion of the
Pilgrim DTF for spent fuel management and site restoration
activities, and compliance with the regulation would result in an
undue hardship or other costs that are significantly in excess of
those contemplated when the regulations were adopted. Thus, the
special circumstances required by 10 CFR 50.12(a)(2)(ii) and 10 CFR
50.12(a)(2)(iii) exist and support the approval of the requested
exemption.
E. Environmental Considerations
In accordance with 10 CFR 51.31(a), the Commission has
determined that the granting of the exemption will not have a
significant effect on the quality of the human environment (see
Environmental Assessment and Finding of No Significant Impact
published in the Federal Register on August 20, 2019 (84 FR 43186).
IV. Conclusions
In consideration of the above, the NRC staff finds that the
proposed exemption confirms the adequacy of funding in the Pilgrim
DTF to complete radiological decommissioning of the site and to
terminate the license and also to cover estimated spent fuel
management and site restoration activities. The NRC staff also finds
that there is reasonable assurance that adequate funds are available
in the DTF to complete all activities associated with radiological
decommissioning.
Accordingly, the Commission has determined that, pursuant to 10
CFR 50.12(a), the exemption is authorized by law, will not present
an undue risk to the public health and safety, and is consistent
with the common defense and security. Also, special circumstances
are present. Therefore, the Commission hereby grants Holtec Pilgrim
and HDI an exemption from 10 CFR 50.82(a)(8)(i)(A) to allow them to
use of a portion of the funds from the Pilgrim DTF for spent fuel
management and site restoration activities consistent with the
revised PSDAR and site-specific DCE dated November 16, 2018.
These exemptions are effective upon the NRC's issuance of a
conforming license amendment reflecting HDI and Holtec Pilgrim as
the licensees for Pilgrim, following NRC approval of the license
transfer application and the Applicants' completion of the
transaction.
[[Page 45182]]
Dated at Rockville, Maryland, this 22nd day of August, 2019.
For the Nuclear Regulatory Commission.
/RA/
Gregory F. Suber,
Deputy Director, Division of Operating Reactor Licensing, Office of
Nuclear Reactor Regulation.
[FR Doc. 2019-18490 Filed 8-27-19; 8:45 am]
BILLING CODE 7590-01-P