San Luis Obispo Mothers for Peace v. U.S. Nuclear Regulatory Comm'n

100 F.4th 1039

SAN LUIS OBISPO MOTHERS FOR PEACE;Friends of the Earth; Environmental Working Group, Petitioners, v. UNITED STATES NUCLEAR REGULATORY COMMISSION;United States of America, Respondents,Pacific Gas & Electric Company, Intervenor.

No. 23-852

United States Court of Appeals, Ninth Circuit

Argued and Submitted January 10, 2024 Pasadena, California

Filed April 29, 2024

On Petition for Review of an Order of the Nuclear Regulatory Commission, NRC-2023-0043 Nuclear Regulatory Commission

Diane Curran, I (argued), Harmon Curran Spielberg & Eisenberg LLP, Washington, D.C., for Petitioner San Luis Obispo Mothers for Peace.

Eric V. Michel (argued), Senior Attorney; Andrew P. Averbach, Solicitor; Marian L. Zobler, General Counsel; U.S. Nuclear Regulatory Commission, Office of the General Counsel, Rockville, Maryland; Justin D. Heminger, Senior Litigation Counsel; Todd Kim, Assistant Attorney General; Environmental and Natural Resources Division, United States Department of Justice, Washington, D.C.; for Respondent.

Michael E. Kenneally (argued), Ryan K. Lighty, and Paul M. Bessette, Morgan Lewis & Bockius LLP, Washington, D.C., for Intervenor Pacific Gas & Electric Company.

Richard E. Ayres, Ayres Law Group, Washington, D.C., for Petitioner Friends of the Earth.

Caroline Leary, Environmental Working Group, Washington, D.C., for Petitioner Environmental Working Group.

Megan K. Hey, Deputy Attorney General; Laura J. Zuckerman, Supervising Deputy Attorney General; Edward H. Ochoa, Senior Assistant Attorney General; Rob Bonta, California Attorney General; California Attorney General's Office, Los Angeles, California; for Amicus Curiae State of California.

Before: Consuelo M. Callahan and Mark J. Bennett, Circuit Judges, and Gary S. Katzmann, Judge.^*

OPINION

CALLAHAN, Circuit Judge:

In 2022, the State of California determined that it faces significant uncertainty in the stability and reliability of its electricity grid as it transitions to renewable energy generation. To hedge against possible insufficient energy supply in the face of climate-related incidents impacting energy production such as drought, wildfire, and heat waves, the California Legislature directed Pacific Gas & Electric Co. ("PG&E") to pursue any actions needed to extend operations at the Diablo Canyon Nuclear Power Plant ("Diablo Canyon").

Prior to that point, PG&E, which holds the federal licenses to operate Diablo Canyon, had been working to cease operations at Diablo Canyon's two nuclear power units. California's directive forced PG&E to change course and seek renewal of its operating license. At that point, the deadline to qualify for continued operation during the United States Nuclear Regulatory Commission ("NRC")'s review of a license renewal application had passed. PG&E asked for an exemption to this timely renewal deadline, and NRC granted PG&E's request.

Petitioners San Luis Obispo Mothers for Peace, Friends of the Earth, and the Environmental Working Group (collectively, "Petitioners"), three non-profit organizations concerned with the dangers posed by nuclear power,¹ object to the NRC's decision and PG&E's continued operation of the power plant. They petition the Ninth Circuit for review of NRC's grant of an exemption and NRC's issuance of a categorical exclusion under the National Environmental Policy Act ("NEPA"), arguing that under the Administrative Procedure Act ("APA"), NRC's decisions are not authorized by law and not supported by the record.

This case requires us to first address whether the Hobbs Act, 28 U.S.C. § 2324 grants this court jurisdiction to hear a direct appeal from an NRC exemption decision. We determine that where, as here, the substance of the exemption is ancillary or incidental to a licensing proceeding, we have jurisdiction. See Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985); General Atomics v. U.S. Nuclear Regul. Comm'n, 75 F.3d 536, 539 (9th Cir. 1996). Assured of our jurisdiction, we further conclude that Petitioners have Article III standing to bring this case, and that NRC's decision to grant the exemption was not arbitrary, capricious, or contrary to law. We deny the petition.

I.

A.

Under the Atomic Energy Act of 1954, the Atomic Energy Commission was made responsible for licensing and regulating use of radioactive material, including the construction and operation of commercial nuclear power plants. 42 U.S.C. §§ 2201, 2131-33. In 1974, Congress passed the Energy Reorganization Act, creating the NRC and transferring to it "all the licensing and related regulatory functions of the Atomic Energy Commission" and tasking it with regulating use of radioactive materials to promote the common defense and security and public health and safety. 42 U.S.C. § 5841(f); see also id. §§ 5841(a)(1), 2201(b). The NRC has in turn promulgated extensive regulations governing the issuance of licenses to operate nuclear power plants. See 10 C.F.R. parts 50, 52.

The Atomic Energy Act specifies that the term of an original license must not exceed forty years. 42 U.S.C. § 2133(c). A license can, however, be renewed for a subsequent term not to exceed twenty years beyond the license's original expiration date. Id.; 10 C.F.R. § 54.31(b). Alternatively, an operator of a nuclear power plant may choose to terminate operations and enter a decommissioning process by which a facility is removed from service and nuclear materials are safely stored or disposed of. See generally, 10 C.F.R part 20, subpart E; 10 C.F.R. § 30.36. These different licensing-related "proceedings" typically require a public notice and hearing process, see 42 U.S.C. § 2239, and more generally, "any person whose interest may be affected by a proceeding and who desires to participate as a party" can file a written request for a hearing, 10 C.F.R. § 2.309(a); see also id. § 54.27 (hearing notice requirements for license renewals).

NRC regulations addressing license renewals include what is colloquially referred to as the "timely renewal rule." See 10 C.F.R. § 2.109. Under the APA, which applies to NRC actions taken pursuant to the Atomic Energy Act, see 42 U.S.C. § 2231, "[w]hen a licensee has made timely and sufficient application for a renewal . . . a license with reference to an activity of a continuing nature does not expire until the application has been finally determined by the agency." 5 U.S.C. § 558(c). This provision protects federal license holders (like PG&E) "from harm associated with delays in agency action on requests for license renewals." Comm. for Open Media v. FCC, 543 F.2d 861, 867 (D.C. Cir. 1976). NRC regulations implementing this provision of the APA require a licensee of a nuclear power plant to file an application for license renewal at least five years before the expiration of the existing license in order to qualify for timely renewal protection. 10 C.F.R. § 2.109(b)²; see also 10 C.F.R. § 54.17(a).

NRC regulations also authorize exemptions from certain regulatory requirements if NRC finds that (1) the exemption is authorized by law; (2) the exemption will not present an undue risk to the public health and safety; (3) the exemption is consistent with the common defense and security; and (4) that special circumstances are present. 10 C.F.R. § 50.12(a). NRC regulations identify six categories of special circumstances:

(i) Application of the regulation in the particular circumstances conflicts with other rules or requirements of the Commission; or

(ii) 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; or

(iii) 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; or

(iv) The exemption would result in benefit to the public health and safety that compensates for any decrease in safety that may result from the grant of the exemption; or

(v) The exemption would provide only temporary relief from the applicable regulation and the licensee or applicant has made good faith efforts to comply with the regulation; or

(vi) There is present any other material circumstance not considered when the regulation was adopted for which it would be in the public interest to grant an exemption.

Id. § 50.12(a)(2), see id. § 54.15 (applying exemptions to license renewals). NRC has previously issued exemptions to the timely renewal rule, allowing licensees to file renewal applications less than five years in advance of license expiration dates and still qualify for timely renewal protection. See, e.g., Oyster Creek Nuclear Generating Station; Exemption, 69 Fed. Reg. 78054 (Dec. 22, 2004); Perry Nuclear Power Plant Unit No. 1; Exemption, 85 Fed. Reg. 43609 (July 17, 2020); Clinton Power Station Unit 1; Exemption, 84 Fed. Reg. 34410 (July 18, 2019).

B.

Diablo Canyon is located in coastal San Luis Obispo County and contains two units licensed by NRC—Unit 1 has been in operation since 1985 and Unit 2 has been in operation since 1986. The current licenses (granted for the statutorily allowed maximum of forty years) will expire on November 2, 2024, and August 26, 2025, respectively. Consistent with NRC's timely renewal rule, see 10 C.F.R. § 2.109(b), PG&E submitted a license renewal application for Units 1 and 2 in November 2009. NRC docketed³ the applications thereby commencing its review of the renewal application and conferring timely renewal status on PG&E. However, PG&E changed course in 2018. PG&E submitted an initial request to NRC to delay the decision on PG&E's pending renewal application, made a follow up request to suspend review of the application, and submitted a third request on March 7, 2018, to withdraw the application. NRC granted PG&E's request to withdraw, terminated review, and closed the docket. At that point, PG&E began...