[Federal Register: October 9, 2007 (Volume 72, Number 194)]
[Rules and Regulations]               
[Page 57415-57447]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09oc07-16]                         


[[Page 57415]]

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Part III





Nuclear Regulatory Commission





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10 CFR Parts 2, 50, 51, 52, and 100



 Limited Work Authorizations for Nuclear Power Plants; Final Rule


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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 2, 50, 51, 52, and 100

RIN 3150-AI05

 
Limited Work Authorizations for Nuclear Power Plants

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
regulations applicable to limited work authorizations (LWAs), which 
allow certain construction activities on production and utilization 
facilities to commence before a construction permit or combined license 
is issued. This final rule modifies the scope of activities that are 
considered construction for which a construction permit, combined 
license, or LWA is necessary, specifies the scope of construction 
activities that may be performed under an LWA, and changes the review 
and approval process for LWA requests. The NRC is adopting these 
changes to enhance the efficiency of its licensing and approval process 
for production and utilization facilities, including new nuclear power 
reactors.

DATES: The effective date is November 8, 2007.

FOR FURTHER INFORMATION CONTACT: Nanette V. Gilles, Office of New 
Reactors, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001; telephone 301-415-1180; e-mail: NVG@nrc.gov or Geary Mizuno, 
Office of the General Counsel, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001; telephone 301-415-1639; e-mail: GSM@nrc.gov.

SUPPLEMENTARY INFORMATION:
I. Background
    A. Development of the Supplemental Proposed LWA Rule
    1. 10 CFR Part 52 Rulemaking
    2. Industry Stakeholder Comments Seeking Changes to LWA Process
    B. Publication of Supplemental Proposed LWA Rule and External 
Stakeholder Interactions During the Public Comment Period
    C. Description of Supplemental Proposed LWA Rule
II. Public Comments
    A. Overview of Public Comments
    B. NRC Response to Public Comments
    1. Commission Questions
    2. LWA Process
    3. SSCs Within Scope of ``Construction''
    4. Excavation
    5. Compliance With NEPA
    6. LWA Application Process
    7. Other Topics
III. Discussion
    A. History of the NRC's Concept of Construction and the LWA
    B. NRC's Concept of Construction and the AEA
    C. NRC's LWA Rule Complies With NEPA
    1. NRC's Concept of Construction Is Consistent With the Legal 
Effect of NEPA
    2. NRC's Concept of the ``Major Federal Action'' Is Consistent 
With NEPA Law
    3. NRC's Phased Approval Approach Is Not Illegal Segmentation 
Under NEPA
    D. Consideration of Activities as ``Construction.''
    1. Driving of Piles
    2. Excavation
    3. Temporary Structures and Activities in the Excavation
    4. Construction SSCs
    E. Phased Application and Approval Process
    F. EIS Prepared, but Facility Construction Was Not Completed
    G. Commission Action on PRM-50-82
IV. Section-by-Section Analysis
V. Availability of Documents
VI. Agreement State Compatibility
VII. Voluntary Consensus Standards
VIII. Environmental Impact--Categorical Exclusion
IX. Paperwork Reduction Act Statement
X. Regulatory Analysis
XI. Regulatory Flexibility Act Certification
XII. Backfit Analysis
XIII. Congressional Review Act

I. Background

A. Development of the Supplemental Proposed LWA Rule

1. 10 CFR Part 52 Rulemaking
    This LWA rulemaking originated as a supplement to an NRC rulemaking 
effort to revise 10 CFR part 52. The NRC issued 10 CFR part 52 on April 
18, 1989 (54 FR 15372), to reform its licensing process for future 
nuclear power plants. 10 CFR part 52 added alternative licensing 
processes in 10 CFR part 52 for early site permits (ESPs), standard 
design certifications, and combined licenses. These were additions to 
the two-step licensing process that already existed in 10 CFR part 50. 
The processes in 10 CFR part 52 allow for resolving safety and 
environmental issues early in the licensing proceedings and were 
intended to enhance the safety and reliability of nuclear power plants 
through standardization.
    The NRC had planned to update 10 CFR part 52 after using the 
standard design certification process. The proposed rulemaking action 
began with the issuance of SECY-98-282, ``Part 52 Rulemaking Plan,'' on 
December 4, 1998. The Commission issued a staff requirements memorandum 
(SRM) on January 14, 1999 (SRM on SECY-98-282), approving the NRC 
staff's plan for revising 10 CFR part 52. Subsequently, the NRC 
obtained considerable stakeholder comments on its planned action, 
conducted three public meetings on the proposed rulemaking, and twice 
posted draft rule language on the NRC's rulemaking Web site before 
issuance of the initial proposed rule on July 3, 2003 (68 FR 40026). 
However, a number of factors, including the experience gained in using 
the 10 CFR part 52 early site permit process, led the NRC to question 
whether the July 2003 proposed rule would meet the NRC's objective of 
improving the effectiveness of its processes for licensing future 
nuclear power plants (March 13, 2006; 71 FR 12782). As a result, the 
NRC decided that a substantial rewrite and expansion of the original 
proposed rulemaking was desirable so that the agency may more 
effectively and efficiently implement the licensing and approval 
processes for future nuclear power plants under part 52. Accordingly, 
the Commission decided to revise the July 2003 proposed rule and 
published the revised proposed rule for public comment on March 13, 
2006 (71 FR 12782). The public comment period on the March 2006 
proposed rule ended on May 30, 2006.
2. Industry Stakeholder Comments Seeking Changes to LWA Process
    In a May 25, 2006 comment letter,\1\ the Nuclear Energy Institute 
(NEI) suggested modifications to the NRC's LWA process including: (1) 
That non-safety-related ``LWA-1'' activities, currently reflected in 
Sec. Sec.  50.10(c) and 50.10(e)(1), be allowed to proceed without 
prior authorization from the NRC, and (2) that the approval process for 
safety-related ``LWA-2'' activities be accelerated. NEI's comment also 
stated that the current definition of construction in Sec.  50.10(b) 
reflects the correct interpretation of the Commission's licensing 
authority under the Atomic Energy Act of 1954, as amended.
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    \1\ See Letter from Adrian P. Heymer, Nuclear Energy Institute, 
to Annette L. Vietti-Cook, Secretary, U.S. Nuclear Regulatory 
Commission, Pre-Licensing Construction Activity and Limited Work 
Authorization Issues relating to NRC Proposed Rule, ``Licenses, 
Certifications and Approvals for Nuclear Power Plants,'' 71 FR 12782 
(March 13, 2006) (RIN 3150-AG24) (May 25, 2006) (ADAMS ML061510471).
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    NEI supported its suggested changes to the LWA process, stating 
that the business environment requires that new plant applicants seek 
to minimize the time interval between a decision to proceed with a 
combined license application and the start of commercial operation. To 
achieve this goal, NEI stated that non-safety-related ``LWA-1'' 
activities would need to be initiated up to 2 years before the 
activities currently defined as ``construction'' in Sec.  50.10(b). NEI 
believes that the current LWA

[[Page 57417]]

approval process would constrain the industry's ability to use modern 
construction practices and needlessly add 18 months to estimated 
construction schedules for new plants that did not reference an early 
site permit with LWA authority. NEI's comment letter stated that ``[t]o 
the extent the NRC determines that these LWA issues cannot be addressed 
in the current rulemaking, we ask that the Commission initiate an 
expedited rulemaking.''
    The NRC determined that the changes suggested in the NEI letter 
could not be incorporated into the final part 52 rule without re-
noticing, but that the NEI letter met the sufficiency requirements for 
a petition for rulemaking as described in 10 CFR 2.802(c). Therefore, 
the NRC elected to treat the letter as a petition for rulemaking (PRM-
50-82).

B. Publication of Supplemental Proposed LWA Rule and External 
Stakeholder Interactions During the Public Comment Period

    The supplemental proposed LWA rule was published in the Federal 
Register on October 17, 2006 (71 FR 61330) for a 30-day public comment 
period which ended November 16, 2006. During the public comment period, 
the NRC held a public meeting on November 1, 2006, to answer external 
stakeholder questions about the supplemental proposed LWA rule. A 
transcript of the public meeting was made (Agencywide Documents Access 
and Management System (ADAMS) Accession No. ML063190396), as referenced 
in the meeting summary (ADAMS Accession No. ML062970517).
    In addition, the NRC informally contacted several Federal agencies 
that traditionally have been interested in environmental impacts 
statements (EISs) prepared by the NRC before the issuance of LWAs and 
construction permits, for the purpose of seeking their comments on the 
supplemental proposed LWA rule. These Federal agencies were the Council 
on Environmental Quality (CEQ), the U.S. Environmental Protection 
Agency (EPA), the Federal Energy Regulatory Commission (FERC), and the 
U.S. Department of the Interior, Fish, and Wildlife Service (FWS).
    Finally, the Commission held a public meeting on November 9, 2006, 
on the overall part 52 rulemaking, at which time industry stakeholders 
presented additional information on the supplemental proposed LWA rule.

C. Description of Supplemental Proposed LWA Rule

    The supplemental proposed LWA rule would narrow the scope of 
activities requiring permission from the NRC in the form of an LWA by 
eliminating the concept of ``commencement of construction'' currently 
described in Sec.  50.10(c) and the authorization described in Sec.  
50.10(e)(1). Instead, under the supplemental proposed rule, NRC 
authorization would be required only before undertaking activities that 
have a reasonable nexus to radiological health and safety and/or common 
defense and security (i.e., excavation, subsurface preparation, 
installation of the foundation, and on-site, in-place fabrication, 
erection, integration or testing, for any structure, system, or 
component of a facility required by the Commission's rules and 
regulations to be described in the site safety analysis report or 
preliminary or final safety analysis report). While the proposed 
redefinition of ``construction'' would result in fewer activities 
requiring NRC permission in the form of an LWA, it also would redefine 
certain activities (such as the driving of piles) that are currently 
excluded from the regulatory definition of construction given in Sec.  
50.10(b), as construction requiring an LWA.
    Further, the supplemental proposed LWA rule provided an optional, 
phased application and approval procedure for construction permit and 
combined license applicants to obtain LWAs. The supplemental proposed 
rule provided for an environmental review and approval process for LWA 
requests that would allow the NRC to grant an applicant permission to 
engage in LWA activities after completion of an EIS addressing those 
activities, but before completion of the comprehensive EIS addressing 
the underlying request for a construction permit or combined license. 
The supplemental proposed rule also delineated the environmental review 
required in situations where the LWA activities are to be conducted at 
sites for which the Commission has previously prepared an EIS for the 
construction and operation of a nuclear power plant, and for which a 
construction permit was issued, but construction of the plant was never 
completed.

II. Public Comments

A. Overview of Public Comments

    The NRC received 13 public comments \2\ on the supplemental 
proposed rule. Ten comments were from external industry stakeholders, 
consisting of NEI and 7 nuclear power plant licensees--including the 3 
applicants for ESPs whose applications are currently pending before the 
NRC, and 2 companies who have applied (or are expected to apply) for 
standard design certifications (GE Nuclear and Areva NP). One 
commenter, Dianne Curran, submitted a comment on behalf of Public 
Citizen, a consumer advocacy organization, and the Nuclear Information 
and Resource Service (NIRS), an information and networking organization 
for organizations concerned about nuclear issues and energy 
sustainability. One comment was received from the EPA, and one comment 
was received from an NRC staff individual.
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    \2\ A public comment dated November 7, 2006, from Westinghouse 
Electric Company LLC, on the main part 52 rulemaking, was 
erroneously designated as comment no. 1 on the supplemental proposed 
LWA rule. This number was later assigned to a comment filed by Diane 
Curran on behalf of Public Citizen and the NIRS.
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    NEI supported the general approach and objective of the 
supplemental proposed rule, but raised three key issues on the 
supplemental proposed rule: (1) Inclusion of excavation in the 
definition of ``construction;'' (2) Designation of structures, systems, 
and components (SSCs) ``required to be described'' in the standard 
safety analysis report or final safety analysis report (FSAR) as a key 
element of the definition of ``construction;'' and (3) Limiting 
submittal of LWA applications up to 12 months in advance of a combined 
license application. NEI also proposed a number of changes to the 
supplemental proposed rule to address three less-significant areas of 
concern: (1) An LWA applicant's reliance on an earlier EIS for an 
unconstructed facility; (2) LWA applicant's ability to take advantage 
of the provisions of Sec.  2.101(a)(9) for an accelerated hearing 
schedule when submitting an LWA application in advance of a combined 
license application; and (3) The need for ``grandfathering'' of current 
ESP applicants. Finally, NEI suggested that Sec.  2.101(a)(5) be 
modified from the March 2006 proposed rule to allow one part of a 
combined license application to precede or follow the other part of the 
application by no more than 12 months. The other industry commenters, 
including GE Nuclear and Areva NP, generally supported the NEI 
comments, and in some cases provided additional discussion in support 
of one or more of NEI's specific comments.
    Public Citizen and NIRS opposed granting of an LWA in advance of 
issuance of a construction permit or combined license, in general 
because

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these commenters perceived the process as introducing additional 
complexity to the licensing process, and increasing the cost to 
individuals who wish to participate in the licensing process. These 
organizations supported the NRC's proposal to include excavation and 
the driving of piles in the definition of construction.
    The EPA indicated that it had no objections to the supplemental 
proposed LWA rule, stating that the supplemental rule would ``enhance 
the efficiency of the NRC's LWA approval process, while maintaining 
appropriate consideration of environmental effects pursuant to NEPA 
[National Environmental Policy Act of 1969, as amended].'' In addition, 
NRC was advised by telephone that CEQ had no objection to the 
supplemental proposed LWA rule, and therefore would not submit a 
written comment on the rule.
    The NRC staff individual provided eight numbered comments on the 
supplemental proposed LWA rule. The commenter focused on compliance 
with the NEPA and the potential adverse effect of the supplemental 
proposed rule on the NRC staff's resources.

B. NRC Response to Public Comments

    The NRC has carefully considered the stakeholder comments, and is 
adopting a final LWA rule which differs in some respects from the 
supplemental proposed LWA rule. The final rule is described and 
discussed in more detail in Sections III. Discussion, and IV. Section-
by-Section Analysis of this document.
    The NRC is adopting the LWA rule as a separate final rule, rather 
than incorporating its provisions into the final part 52 rule. 
Incorporating the provisions of the final LWA rule into the final part 
52 rulemaking would have resulted in a delay in publication of the 
final part 52 rule, because of the additional time needed for NRC 
consideration and resolution of the substantial issues raised in the 
public comments on the supplemental proposed LWA rule. Accordingly, the 
NRC has adopted the final part 52 rulemaking in a separate action, in 
advance of this final LWA rule.
1. Commission Questions
    In the statement of considerations (SOC) for the supplementary 
proposed LWA rule, the Commission posed three questions, as follows 
(October 17, 2006; 71 FR 61340, second column):

    As explained above, this supplemental proposed rule would impact 
the types of activities that could be undertaken without prior 
approval from the NRC, with NRC approval in the form of an LWA, and 
with NRC approval in the form of a construction permit or combined 
license. Therefore, in addition to the general invitation to submit 
comments on the proposed rule, the NRC also requests comments on the 
following questions:
    1. What types of activities should be permitted without prior 
NRC approval?
    2. What types of activities should be permitted under an LWA?
    3. What types of activities should only be permitted after 
issuance of a construction permit or combined license?
    Only one commenter provided separate responses to these three 
Commission questions; but the responses were simply an abbreviated 
version of the comments. The remaining commenters addressed the issues 
raised in these questions in the course of the commenters' discussion 
on the supplementary proposed LWA rule. Accordingly, the NRC is not 
providing a separate discussion of these questions and commenters' 
responses. Instead, the NRC is responding to these issues in the NRC's 
responses to specific comments.
2. LWA Process
    Comment: The Commission should adopt the LWA final rule as a 
necessary improvement to the existing LWA process. (NEI, Dominion 
Nuclear North Anna, Duke Energy, Florida Power and Light, Progress 
Energy, Southern Company, Unistar, Areva, and GE Nuclear)
    NRC Response: The NRC agrees with the commenters that the former 
NRC provisions on LWAs should be amended to improve the LWA process.
    Comment: The Commission should not adopt regulations that allow 
approval of LWA activities in advance of the issuance of a construction 
permit or combined license. Allowing LWA activities before a plant is 
licensed would confirm to the public that the licensing process is a 
sham. The LWA process represents a further segmentation of the 
licensing process, which will add complexity to the licensing process, 
and result in further disenfranchisement of the public. (Public 
Citizen/NIRS 1)
    NRC Response: The NRC disagrees with these commenters. The 
commenters' position fails to recognize that the LWA process has been 
used by the agency for over 30 years, and therefore the proposed 
changes to the LWA process would not add to complexity, or otherwise 
represent further segmentation. The agency's rules include several 
longstanding requirements directed at avoiding NEPA segmentation. These 
requirements are retained in their essential form in the final LWA 
rulemaking.
    The NRC does not believe that the final LWA rule adds any further 
complexity to the licensing process, or otherwise results in further 
``disenfranchisement'' of the public. As stated above, the NRC's 
regulatory regime already includes the LWA process, and the rule does 
not modify or change the public's ability to participate in the 
licensing process. Indeed, rather than ``disenfranchising'' the public, 
the LWA rule may have the effect of enhancing the ability of external 
stakeholders to participate in a hearing to resolve their issues with 
respect to a particular nuclear power plant. Because of resource 
limitations, many public stakeholders have expressed their concern 
that, because of the broad range of issues addressed by the NRC at each 
stage of licensing, it is difficult for them to seek resolution in an 
NRC hearing for the full range of issues that they are interested in. 
For these stakeholders, the LWA process--by separating out a defined 
set of issues to be resolved in advance of the underlying combined 
license or construction permit proceeding--allows public stakeholders 
to focus their resources on the relevant issues in an LWA hearing. The 
``complexity'' of the process provides an orderly sequencing of the 
overall set of issues that must be resolved, without introducing 
unlawful segmentation. The NRC believes that if these public 
stakeholders consider the revised process in this light, they should 
conclude that the LWA process enhances, rather than detracts from, 
participation in the licensing process by interested members of the 
public who are resource-limited.
    The NRC does not believe that the NRC's proposed redefinition of 
``construction'' constitutes unlawful ``segmentation'' which results in 
non-compliance with NEPA. Segmentation, as discussed elsewhere in this 
SOC, embraces the situation where a Federal agency divides what would 
otherwise be regarded as a single, integrated Federal action into 
separate, smaller Federal actions, for the purpose of avoiding 
compliance with NEPA, or otherwise minimizing the apparent impact of 
the single, integrated Federal action. The NRC's redefinition of 
construction is not motivated by a desire to avoid compliance with 
NEPA, nor will it result in a single Federal action being divided into 
smaller, sequential Federal actions. Rather, the NRC's redefinition 
reflects its reconsideration of the proper regulatory jurisdiction of 
the agency, and properly divides what was considered a single Federal 
action into private action for

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which the NRC has no statutory basis for regulation, and the Federal 
action (licensing of construction activities with a reasonable nexus to 
radiological health and safety or common defense and security, for 
which no other regulatory approach is acceptable) which will require 
compliance with NEPA.
3. SSCs Within Scope of ``Construction''
    Comment: The scope of SSCs that must be described in the FSAR is 
not always clear, even under the words of existing NRC regulations 
(e.g., 10 CFR 50.34(b)(2)(i)), which requires discussion of certain 
systems ``insofar as they are pertinent.'' (Areva 1, 2)
    NRC Response: The NRC agrees, in part, with these comments and has 
revised the scope of SSCs that fall within the definition of 
construction to clearly identify the SSCs that have a reasonable nexus 
to radiological health and safety, or the common defense and security.
    Comment: The NRC's description of activities constituting 
``construction,'' which require a combined license or construction 
permit (October 17, 2006; 71 FR 61337), should be modified to refer to 
the ``installation or integration of that structure, system, or 
component into its final plant location and elevation * * *.'' 
(Progress Energy 4)
    NRC Response: The NRC agrees in part with the commenter, and the 
corresponding language of this SOC has been modified to state ``into 
its final plant location would require * * *.''
4. Excavation
    Comment: It is not necessary to define construction as including 
excavation of portions of the nuclear power plant facility having a 
``reasonable nexus to radiological health and safety.'' Problems 
identified during excavation should be identified as part of the site 
characterization and investigation required for preparing a combined 
license or construction permit. NRC Regulatory Guide (RG) 1.165, 
``Identification and Characterization of Seismic Sources and 
Determination of Safe-Shutdown Earthquake Ground Motion,'' was updated 
in 1997 to provide that combined license (COL) applicants' FSARs should 
include a commitment to geologically map all excavations and notify the 
NRC when excavations are open for inspection. For safety-related SSCs, 
these excavations and characterization/investigation activities would 
be conducted under the applicant's quality assurance (QA) program. This 
could result in relocation of such SSCs. This provides a better process 
for ensuring safety and would better support an effective licensing 
process. In addition, NRC will be involved in pre-application 
activities and may elect to conduct oversight of any activity involving 
site characterization and site preparation. The examples cited by the 
NRC in the public meeting as a basis for including excavation within 
the definition of ``construction'' did not involve questions about the 
safety of the excavation activities themselves, but rather the 
conditions that were identified as the result of excavation. In these 
cases, the commitments to geologic mapping and notification of the NRC 
are sufficient to meet the NRC's regulatory interests. Accordingly, 
Sec. Sec.  50.10(b) and 51.4 should be revised in the final rule to 
exclude excavation from the definition of construction, provided that 
the entity conducting excavation geologically maps the excavations and 
the NRC staff is notified when the excavations are opened for 
inspection. (NEI 1; GE Nuclear; Progress Energy 1)
    NRC Response: The NRC agrees, in part, with this comment and has 
deleted excavation from the definition of construction in 10 CFR 
50.10(a). A construction permit or combined license applicant is 
responsible, under the current regulations, to demonstrate that the 
site conditions are acceptable for the proposed facility design. This 
responsibility exists regardless of whether or not the NRC reviews and 
approves the proposed excavation activities and inspects the excavation 
activities as they are accomplished. Inasmuch as NRC inspection and 
regulatory oversight of the excavation are not necessary for reasonable 
assurance of adequate protection to public health and safety or common 
defense and security, and because the applicant bears the burden for 
accurately characterizing the parent material, the NRC concludes that 
excavation may be excluded from the definition of construction.
    Comment: Excavation and the driving of piles should be considered 
``construction.'' Prior agency experience has shown that safety issues 
have been identified during excavation, citing to the experience of 
North Anna nuclear power plant, as well as a nuclear power plant in the 
Midwest where soil conditions identified during excavation necessitated 
a change in foundation design. Neither the public nor a reviewing court 
would think that the NRC would be able to make the underlying licensing 
decision (i.e., granting a construction permit or a combined license) 
in an unbiased fashion if excavation proceeded in advance of the 
underlying licensing decision. (Public Citizen/NIRS 2)
    NRC Response: The NRC disagrees, in part, with this comment. As 
discussed in the response immediately above, the NRC concludes that 
excavation may be excluded from the definition of construction. 
However, the driving of piles and any other foundation work is defined 
as construction.
    Comment: The SOC for the final rule should specify that excavation 
includes appropriate erosion control measures necessary to stabilize 
site excavations pending LWA or license (i.e., combined license or 
construction permit) approval of construction activities. (NEI 1.5)
    NRC Response: The NRC agrees, in part, with this comment. The NRC's 
definition of construction in the final LWA rule includes: (1) Any 
change made to the parent material in which the excavation occurs 
(e.g., soil compaction, rock grouting); and (2) The placement of 
permanent SSCs that are put into the excavation during or after the 
excavation (e.g., installation of permanent drainage systems, or 
placement of mudmats). If the erosion control measures are conducted 
outside of the excavated hole and do not cover up the exposed soil 
conditions, then those activities would be allowed under Sec.  
50.10(a). However, under the final LWA rule, the placement of temporary 
SSCs in the excavation, such as retaining walls, drainage systems, and 
erosion control barriers, all of which are to be removed before fuel 
load, would not be considered construction.
    Comment: ``Construction'' should be limited to above-ground 
installation of certain SSCs. (Areva 1)
    NRC Response: The NRC disagrees. Even under the former provisions 
of Sec.  50.10(e)(3), construction included the setting of foundations 
and other work accomplished below grade. The commenter provided no 
basis for limiting the definition of construction to the above-grade 
installation of SSCs of interest. No change was made in the final rule 
as the result of this comment.
    Comment: Temporary buildings, structures, and roads, may be located 
in the eventual location of SSCs for which an LWA is required for 
excavation under the supplemental proposed LWA rule. If excavation is 
required for the temporary buildings, structures, and roads, the 
supplemental proposed rule would appear to prohibit such excavation. 
The final rule should make clear that excavation for SSCs outside the 
scope of an LWA, such as temporary buildings, structures, and roads, 
should be excluded from the definition of construction. (Areva 3)

[[Page 57420]]

    NRC Response: As discussed previously, the NRC has decided to 
exclude all excavation from the definition of construction. In 
addition, the NRC notes that under the final LWA rule, SSCs that are 
not within the scope of construction may be installed before receipt of 
an LWA, construction permit, or combined license. Accordingly, the 
final rule resolves the commenter's issue.
5. Compliance With NEPA
    Comment: The impacts of the construction activities that the NRC 
proposes to exclude from its regulations have been part of the NRC 
regulations since 1972. What has changed causing the NRC to decided 
that these activities will not longer be part of the environmental 
review? Has NRC been doing it wrong for more than 30 years (including 
the 3 early site permits that are either completed or near completion)? 
(Kugler 1)
    NRC Response: As discussed in the ``Discussion'' section of this 
final rule (as well as the supplemental proposed rule), the 1972 
amendment to the definition of construction in 10 CFR 50.10 was made 
early in the Federal government's implementation of then-new NEPA. 
Since that time, the Federal case law on NEPA has evolved, with several 
U.S. Supreme Court decisions on the requirements of NEPA. In addition, 
in preparing for the expected next generation of nuclear power plant 
construction applications, the nuclear power industry has reviewed the 
overall construction process based upon lessons learned from the 
construction and licensing process used for currently operating 
reactors. The industry submitted what is essentially a petition for 
rulemaking seeking changes to the LWA process, reflecting those lessons 
learned and their understanding of the current state of NEPA law. The 
NRC has reviewed the applicable law, and for the reasons stated 
elsewhere in this SOC, agrees with the petitioner that the current 
definition of construction and the current LWA requirements in Sec.  
50.10 are not compelled by NEPA or the Atomic Energy Act (AEA) of 1954, 
as amended. While the agency's regulations on construction and LWAs 
were a reasonable implementation of NEPA as understood in 1972, the NRC 
believes that, with more than 30 years experience in implementing NEPA 
and the evolving jurisprudence, the time is appropriate for 
reconsideration and revamping of these NRC requirements.
    Comment: The impacts of the construction of a nuclear power plant 
that NRC now proposes to exclude from NRC regulations are probably 90 
percent of the true environmental impacts of construction. Before even 
talking to the NRC, a power company can clear and grade the land, build 
roads and railroad spurs, erect permanent and temporary buildings, 
build numerous plant structures (e.g., cooling water intake and 
discharge, cooling towers), and build switchyards and transmission 
lines. After potentially doing all of that, THEN the company would come 
to the NRC and ask permission to build the power plant for which all of 
this work was done. How does this comply with NEPA? The commenter 
asserts that the NRC is going to ignore almost all of the construction 
impacts of the proposed action. (Kugler 2)
    NRC Response: The commenter assumes that, if a private action is 
preparatory to Federal action, then NEPA provides a statutory basis for 
the agency to extend its otherwise limited jurisdiction under the AEA 
to those private, preparatory actions, solely for the purpose of agency 
consideration of the environmental impacts under NEPA. The commenter 
has not pointed to, and the NRC has not identified, Federal case law 
that supports such a position. Indeed, even in a case where the Federal 
agency had unequivocal statutory authority to grant or deny a Federal 
permit, the U.S. Supreme Court specifically held that the Federal 
agency was not compelled to require mitigation based upon environmental 
considerations identified in the NEPA review. Robertson v. Methow 
Valley Citizens Council, 490 U.S. 332 (1989).
    The commenter also asserts that the NRC is going to ``ignore all 
the [pre-]construction impacts of the proposed action.'' On the 
contrary, as stated elsewhere in this SOC, the pre-construction private 
actions of clearing, grading, access road construction, etc., will be 
considered in the cumulative impacts analysis in the LWA EIS as the 
baseline for analyzing the environmental impacts associated with the 
Federal action authorizing LWA activities. This information will be 
used when evaluating the environmental impacts of construction and 
operation of the proposed nuclear power plant.
    Comment: The commenter states that the final rule says NRC won't 
consider the sunk costs of all of this work in your decision whether to 
approve the request to build the plant. The commenter asserts that NRC 
has allowed the company to do most of the environmental damage. Who 
cleans up the mess if the NRC says no? The commenter states that 
because the NRC has excluded from its review all of this work that's 
specifically for the purpose of building the plant, the NRC also can't 
require any redress plan for the site for those impacts. (Kugler 2.a)
    NRC Response: The commenter appears to believe that the NRC has 
authority to exercise its regulatory jurisdiction in an area where it 
does not otherwise possess regulatory authority under its organic 
statute, solely for the purpose of ensuring environmental redress of 
private activities with significant environmental impacts. The NRC does 
not agree with the commenter's implicit suggestion. As discussed in the 
response to the previous comment as well as elsewhere in this SOC, the 
NRC does not possess statutory authority to regulate activities that do 
not have an impact upon radiological health and safety or common 
defense and security, and NEPA does not provide independent statutory 
authority to extend the agency's jurisdiction solely for the purpose of 
assuring that adverse environmental impacts are considered and 
mitigated. While this may be a worthy goal, the NRC may not lawfully 
act in such a manner, absent additional statutory authority which is 
not currently provided by either NEPA or the AEA.
    Comment: The commenter asserts that NRC won't consider the sunk 
costs in its review. The commenter also asserts that it sounds like the 
``baseline'' for the environmental review will include the 
environmental damage done by a company in terms of ``pre-application'' 
activities. In other words, if an applicant for an LWA, CP, or COL has 
done all of the things NRC now allows without NRC review, the condition 
of the cleared and partially built site is now the starting point for 
the environmental review. The commenter states that in terms of 
comparing this partially built site to any alternative site, NRC has 
essentially ``pre-selected'' the site chosen by the applicant. The 
commenter states there will be less environmental impacts at a site 
that has already had most of the damage done to it as compared to any 
other site. The commenter believes the NRC has handed its 
responsibility for the site suitability determination over to the 
applicant. (Kugler 2.b)
    NRC Response: The commenter makes two incorrect assumptions. First, 
the commenter implicitly assumes that environmental matters are the key 
determinants of site suitability. The NRC believes that, as a practical 
matter and as borne out by the history of site suitability 
determinations in the past, other factors, such as seismic activity and 
intensity, geological structures, meteorological factors, impediments 
to development of emergency plans,

[[Page 57421]]

security issues, and demographics (population density and distance) 
from a safety perspective are at least as important, if not more 
important, than ``environmental'' matters as a key determinant of site 
suitability.
    Second, the commenter assumes that clearing of a site will always 
tilt the environmental balance in favor of the applicant's ``pre-
selected site.'' This may not be true in most cases. For example, even 
an ``obviously superior'' site from the standpoint of environmental 
impacts on water--which is likely to be the determining 
``environmental'' impact--will require grading and clearing in order to 
be used. If construction were to be abandoned at the applicant's ``pre-
selected site'' and commenced at the ``obviously superior site,'' the 
environmental impacts of pre-construction activities such as clearing 
and grading would still have to be performed at the ``obviously 
superior'' site. In essence, the ``sunk environmental impacts'' 
associated with preconstruction at the pre-selected site are balanced 
out by the ``future'' environmental impacts associated with 
preconstruction at the ``obviously superior'' site. Thus, pre-
construction at a ``pre-selected'' site could not, in and of itself, 
lead to automatic dismissal of otherwise ``obviously superior'' sites.
    In any event, the issue of the ``baseline'' for purposes of 
alternative sites is not addressed directly in the final LWA rule and 
will be resolved in the development of NRC guidance on implementation 
of the final LWA rule. Furthermore, the NRC notes that pre-construction 
impacts will be evaluated as part of the cumulative impacts analysis, 
which may render moot some aspects of the commenter's concerns in this 
area.
    Comment: How can NRC tell the world in an EIS that the only real 
impacts of construction of a nuclear power plant will be related to 
digging a big hole and a few other straggling items that will occur 
while the structures described in the FSAR are being built? (Kugler 
2.c)
    NRC Response: The commenter appears to assert that the NRC's EIS 
for a combined license must attribute to the NRC's Federal action all 
of the environmental impacts of constructing a nuclear power facility, 
including the private, pre-construction activities that may be 
accomplished by the applicant without any NRC approval. The commenter's 
implicit assertion is incorrect. The NRC's EIS need only describe the 
environmental impacts of the Federal action as those construction 
activities, as defined under Sec.  50.10, which can only be 
accomplished under an LWA and combined license or construction permit.
    The environmental impacts of pre-construction activities will also 
be described in the NRC's EIS because such description is necessary to 
evaluate the cumulative impacts of the Federal action, in light of the 
pre-existing impacts of the private, pre-construction action. The 
cumulative impacts discussion should provide information on the total 
environmental impacts of constructing the nuclear power plant to both 
the NRC decisionmaker and the general public.
    The NRC notes that, under the final LWA rule, excavation for SSCs 
that are important from a radiological health and safety or common 
defense and security standpoint will not be treated as 
``construction.'' Therefore, the environmental effects of excavation 
would not be evaluated as an impact attributable to the Federal 
licensing action, but instead be added to the environmental baseline 
for a site.
    Comment: How are applicants and NRC going to divide impacts if some 
of the construction activities now out side (sic.) the NRC's scope are 
going on at the same time as activities inside NRC's scope? For 
example, traffic impacts of the construction workforce are often an 
issue. But how does the NRC deal with it if part of the workforce is 
building cooling towers and intake systems, and part is building FSAR-
listed structures? Another case is property taxes. The property taxes 
paid by the company are a significant item in the socioeconomic review. 
Are the applicant and the NRC now going to have to differentiate 
between taxes paid for FSAR-related facilities and taxes paid for other 
facilities? (Kugler 2.d)
    NRC Response: The commenter raises a number of detailed issues with 
respect to NRC implementation of the final rule in the course of 
preparing EISs. None of these matters appear to raise issues that are 
insurmountable or would be unusually difficult to resolve. For example, 
the need to apportion the taxes for FSAR-related SSCs, versus taxes on 
other portions of the facility whose construction does not require NRC 
approval could be resolved by simply treating all the taxes paid as a 
benefit of operation, and the impacts from all portions of the plant as 
an impact of operation. The NRC expects that the staff will develop 
supplemental guidance to the environmental standard review plan on 
these and other implementation matters.
    Comment: The commenter states that the rule says that if an LWA is 
issued, the EIS to build and operate a nuclear power plant will be a 
supplement to the EIS for the LWA. The commenter believes this means 
that the EIS that evaluates the impacts of building and operating a 
large commercial power plant will be a supplement to the EIS for 
digging a big hole. The commenter states that assuming the EIS for the 
big hole ignores all of the other impacts of construction that may 
already have taken place, it's going to be pretty limited in scope. The 
commenter states that this EIS of very limited scope will now become 
the base document, and the EIS that considers ALL of the impacts of 
operations will be a supplement to it. (Kugler 3)
    NRC Response: The NRC believes that the proposed rule is consistent 
with NEPA. The commenter presented no rationale why the NRC's proposal 
violates either NEPA or CEQ's implementing regulations. NEPA itself 
only requires that a statement be prepared addressing the environmental 
impacts and alternatives of major Federal actions significantly 
affecting the environment. The statute does not contain any language 
specifically constraining the manner in which each EIS for two 
sequential Federal actions must be prepared. Hence, the NRC is free to 
select a manner of NEPA compliance which best meets the agency's needs.
    The commenter appears to be concerned that, if the LWA applicant 
chooses to submit an environmental report limited to LWA activities, 
then the LWA EIS would be a relatively narrow document which cannot be 
the basis for a supplemental EIS with a greatly expanded scope of 
subject matters addressed. The NRC does not believe that the 
commenter's concern is well-founded. First, the CEQ's regulations 
specifically permit ``tiering'' of EISs to ``eliminate repetitive 
discussions of the same issues and to focus on the actual issue ripe 
for consideration at each level of the environmental review * * *'' (40 
CFR 1502.20). Although most of the tiering discussion refers to a broad 
initial EIS followed by more specific EIS tiering on the earlier EIS, 
40 CFR 1502.20 also states, ``Tiering may also be appropriate for 
different stages of actions (emphasis added).'' The NRC believes that 
the LWA is a stage in the overall Federal action of issuing a license 
for construction (and, in the case of a combined license under part 52, 
operation) of a nuclear power plant. It is logical to evaluate the 
environmental impacts of the activities that occur first (i.e., LWA 
activities), followed by evaluation of the impacts of activities that 
occur thereafter (i.e., main construction and operation). The

[[Page 57422]]

potential for segmentation of the Federal impacts is minimized, as 
discussed previously, by various provisions of the rule which, inter 
alia, prohibit NRC consideration of sunk costs, require consideration 
of all environmental impacts and benefits attributable to LWA 
activities in the supplemental EIS prepared for the underlying combined 
license or construction permit application, and require the applicant/
licensee to develop and, if necessary, implement a redress plan. 
Second, the CEQ regulations also encourage agencies to incorporate by 
reference material into an EIS to cut down on bulk without impeding 
agency and public review of the action. Nothing in the CEQ regulations 
suggests that incorporation by reference is precluded where the 
material being incorporated is smaller in bulk than the EIS into which 
the material is being incorporated. The NRC believes the purpose of 
incorporation by reference is served by incorporating the LWA EIS into 
the supplemental EIS prepared at the combined license or construction 
permit stage.
    Comment: The commenter states the LWA EIS will only be looking at 
the impacts of digging the big hole and pouring the foundation. At what 
point does the NRC staff evaluate the impacts of construction and 
operation to determine whether the site is SUITABLE for the 
construction and operation of a nuclear power plant? Is that done 
later? Does that mean that NRC could authorize digging the hole at a 
site that could later be determined by NRC to be unsuitable? (Kugler 4)
    NRC Response: The NRC has decided that excavation should not be 
considered ``construction,'' and that NRC permission is not required to 
undertake excavation activities. Accordingly, a response to this 
comment, to the extent that it is focused on NRC consideration of the 
impacts of excavation as an impact of the issuance of the LWA, 
construction permit, or combined license, is unnecessary. As discussed 
elsewhere in this document, the impacts of preconstruction activities 
performed by the ESP holder, construction permit, or combined license 
applicant must be described by the applicant in its environmental 
report, and must be considered in the cumulative impacts analysis.
    Under the final LWA rule, the NRC's evaluation of site suitability 
must be made when it issues a construction permit or combined license, 
unless the applicant seeks, either as part of an LWA or in advance of 
the issuance of the construction permit or combined license under 
subpart F of part 2, an early decision on site suitability and/or the 
environmental impacts of construction and operation.
    Comment: Has the NRC discussed these changes with key stakeholders 
like EPA, CEQ, and FERC? What do they think of this change? The 
commenter states that this is a major shift by the NRC away from its 
NEPA responsibilities, and believes that other agencies may have real 
problems with it beyond the basic NEPA issues. For example, will FERC 
commence a review for transmission lines if the power company hasn't 
submitted an application to the NRC to build the plant for which it's 
needed? Similarly, will the Corps of Engineers issue Section 404 
permits to damage wetlands and dredge if there's no request to build a 
plant yet? Has anybody talked to them? (Kugler 5)
    NRC Response: The NRC sought comments on the proposed rule from 
four Federal agencies who have historically been interested in NRC 
construction licensing from an environmental standpoint. Advance copies 
of the proposed rule as approved by the Commission were provided to the 
CEQ, the EPA, FERC, and the U.S. Department of the Interior, FWS, and 
copies of the proposed rule as published in the Federal Register were 
electronically transmitted to cognizant individuals in these agencies 
on the date of publication of the proposed rule in the Federal Register 
(ADAMS Accession Nos. ML062840445, ML062910051, and ML062910049). 
Additional telephone calls were made to describe the proposed rule and 
to answer any questions from these agency officials. As discussed 
earlier in this document, the NRC has received comments from the EPA, 
which has no objection to the change. NRC was advised by telephone that 
CEQ had no objection to the supplemental proposed LWA rule. The NRC has 
been advised by FERC that it ordinarily would not review transmission 
line routings for lines commencing at nuclear power facilities. The NRC 
believes that it has made reasonable efforts to obtain input from other 
cognizant Federal agencies, and none appear to share the concerns of 
the commenter. No change from the supplemental proposed LWA rule has 
been made as the result of this comment.
    Comment: How does this change affect the current early site permit 
applicants? The commenter states that, for example, Exelon and Dominion 
submitted redress plans for all of the impacts of construction they'd 
be allowed to carry out before receiving a license to build and operate 
a plant. The petitioner also believes Southern submitted redress plans. 
Future applicants won't have to do this. What happens to the Exelon and 
Dominion redress plans? Do they get out of them now? If so, how does 
NRC explain that to all of the folks involved in those reviews who 
relied on the NRC's representations that a redress plan was required 
(e.g., the public, Federal and State environmental regulatory 
agencies)? What happens to Southern, which is early in its review? 
(Kugler 6)
    NRC Response: The final rule does not affect the NRC staff's 
approval of a full-scope redress plan to support LWA activities under 
the former LWA provisions in Sec. Sec.  50.10 and 52.17. The three 
applicants for ESP which are currently before the NRC are required to 
meet the NRC's requirements in effect at the time of the application, 
with respect to the content of the application. If the final rule is 
adopted before ESPs are issued to the current ESP applicants, then the 
applicant may (but is not required to seek to revise its redress plan 
and seek NRC approval of a (narrowed) redress plan that meets the 
requirements of the final LWA rule. In such a case, the NRC would 
advise other Federal and State agencies of the change in NRC's 
regulatory requirements and any change in the scope of the approved 
redress plan which may be requested by the ESP applicant. 
Alternatively, upon issuance of the ESP, the ESP holder may request an 
amendment to its ESP, consistent with the recently-adopted revisions to 
10 CFR part 52, to seek NRC approval of a (narrowed) redress plan which 
is consistent with the requirements of the final LWA rule. In such an 
event, the NRC would--as part of its routine procedures--consult with 
relevant Federal agencies. No change from the supplemental proposed LWA 
rule was made as a result of this comment.
    Comment: Section 51.49(a)(2) should be revised to delete the 
requirement for an LWA applicant to state the need for an LWA. 
(Progress Energy 5)
    NRC Response: The NRC disagrees with the commenter's proposal. An 
EIS should state the purpose and need for a proposed action. 10 CFR 
part 51, appendix A, paragraph 4; 40 CFR 1502.13. Inasmuch as the NRC 
is acting on a private entity's request in a licensing action, the 
purpose and need should be, in the first instance, determined by the 
applicant and be adopted by the NRC. No change was made to the final 
rule as a result of this comment.
    Comment: Sections 51.20(b)(1) and (5), and 51.76(b) and (e) should 
be revised to allow the NRC staff the option of preparing and issuing 
an

[[Page 57423]]

environmental assessment (EA) if the environmental report shows no 
significant environmental impacts associated with LWA activities. 
(Progress Energy 6, 7, 8)
    NRC Response: The NRC disagrees with the commenter's proposal. In 
preparing the supplementary proposed rule, the NRC considered the 
approach recommended by the commenter. However, the NRC rejected 
proposing such an approach because it would increase the perception of 
Federal segmentation, without any significant countervailing benefits, 
in terms of resources or time necessary to complete the NEPA process. 
Furthermore, the tiering concept, under CEQ regulations, involves 
sequential EISs rather than an EA followed by an EIS. The NRC believes 
that it would not be prudent to pursue a new approach to NEPA 
compliance, which may result in legal instability in an area of 
critical interest to industry stakeholders. The commenter presented no 
information in favor of its proposal. Accordingly, in the absence of 
new information suggesting that the Commission's initial determination 
should be revisited, the Commission declines to adopt the commenter's 
proposal. No change was made to the final rule as a result of this 
comment.
6. LWA Application Process
    Comment: The commenter states that the NRC expects over 15 
applications for COLs in the next 3 years or so. Perhaps it can staff 
up to meet the challenge of preparing those 15 EISs. But can it 
possibly handle 30? If most or all of the COL applicants choose to 
submit an LWA application too, which would seem likely, the NRC staff 
will have to prepare two EISs for each site. Has the NRC considered the 
resource implications? (And if an applicant chooses to go the ESP route 
for some reason, there will be three EISs.) (Kugler 7)
    NRC Response: The commenter appears to believe that, under a 
revised LWA rule, the overall resources expended by the NRC in 
preparing EISs would increase over the current regulatory regime in a 
time frame that would exacerbate any problems that may be caused by 
limited NRC staff resources. The NRC disagrees with the commenter. The 
final LWA rule merely governs the timing of the NRC's environmental 
review of the overall action of licensing the construction and 
operation of a nuclear power plant, consistent with NEPA.
    Taking the specific example identified by the commenter of a 
combined license applicant, who both seeks an LWA and references an 
ESP, it is possible--as the commenter correctly points out--that three 
EISs may be prepared in the worst case of a less than complete ESP EIS. 
However, the final LWA rule does not require the NRC staff to prepare 
entirely new, full-scope EISs at either the LWA or the combined license 
issuance stages. Instead, the EIS at the LWA stage would be limited to 
considering the environmental impacts of LWA activities only (assuming 
that the LWA ER is limited to providing information on the 
environmental impacts of LWA activities). This is consistent with NRC 
and CEQ regulations that allow incorporation by reference. Preparation 
of an LWA EIS limited to those subjects would not be redundant of the 
ESP EIS, inasmuch as the impacts of construction under this scenario 
were not addressed in the ESP EIS. Accordingly, there is no unnecessary 
expenditure of NRC resources attributable to anything in the LWA rule. 
When the combined license supplemental EIS is prepared, that EIS will 
be limited to considering new and significant information related to 
matters concerning construction and operation of the facility which was 
not addressed in the ESP EIS, unless the matter was discussed in the 
LWA EIS. In that limited case, the nature and description of the LWA 
construction impacts are deemed to be resolved, and these impacts would 
be considered in the overall balancing and decisionmaking on issuance 
of a combined license without the need to re-examine the nature and 
description of those LWA impacts. Again, the final LWA rule avoids 
redundant NRC review to the maximum extent practicable, inasmuch as the 
combined license EIS relies upon the determinations regarding the 
nature and impacts of construction and operation which were made at 
both the ESP and LWA stages. The overall scope of the NRC environmental 
review is not changed; it is merely the timing of the review for 
individual issues that is affected by the final LWA rule.
    In sum, the NRC does not agree with the commenter that the LWA rule 
will, as the consequence of its provisions, result in an adverse impact 
upon the amount and timing of expenditure of NRC resources that cannot 
be managed in an effective manner. No change from the supplemental 
proposed LWA rule was made in response to this comment.
    Comment: One commenter states that it appears that this new process 
will require major changes to NRC guidance documents such as RGs and 
the environmental standard review plan. Almost everything related to 
the impacts of construction will have to be completely rewritten. Can 
this be done before the first applicant uses the new rule? (Kugler 8)
    NRC Response: The NRC agrees with the commenter that changes to the 
NRC RGs and the environmental standard review plan will be necessary to 
provide complete guidance to potential applicants and the NRC review 
staff with respect to implementation of the new LWA process in the 
final LWA rule. However, the NRC does not agree with the commenter's 
implicit assertion that the guidance must be finalized before the first 
applicant (or several applicants) can use the new LWA process in an 
effective manner. The NRC has, in many other instances, adopted rules 
containing substantial changes to its technical and regulatory 
requirements applicable to nuclear power reactors. Although the NRC 
does not wish to understate the challenge of implementing new rules, it 
is confident that the NRC working level technical staff, under careful 
and timely oversight by NRC staff management, will be able to implement 
the final LWA rule in a timely, consistent, and effective manner.
    Comment: One commenter states that the supplemental proposed rule 
does not appear to allow an applicant to use both a phased LWA process 
and the hearing process for early partial decision on site suitability 
issues, thereby allowing an applicant who wishes to apply for an LWA to 
also submit the environmental information under Sec.  2.101(a)(5) and 
proceed with an accelerated hearing on the full scope of environmental 
matters. The Commission should adopt changes in Sec. Sec.  50.10(c)(2) 
and 2.101(a)(5) to allow an applicant to use both processes 
simultaneously. (NEI 5; Unistar 1)
    NRC Response: The NRC believes that the commenter misunderstood the 
provisions of the supplemental proposed rule. The NRC's intent is that:
     Applicants may submit a two-part (phased) application for 
an LWA in advance of the application for the underlying combined 
license or construction permit, see Sec.  2.101(a)(9).
     The environmental information submitted in the LWA portion 
of the application may either be limited to the LWA activities 
requested, or the full scope of construction and operation impacts, see 
Sec.  51.49(b) and (f).
     An LWA applicant may seek an early decision on siting and 
environmental matters. If the LWA is submitted in advance of the 
underlying construction permit or combined license application, the 
procedures in 10 CFR part 2, subpart F, Sec. Sec.  2.641 through 2.649 
apply. If the LWA is submitted as part of (or after) the construction 
permit or

[[Page 57424]]

combined license application, then the procedures in subpart F, 
Sec. Sec.  2.601 through 2.629 would apply because this is the ordinary 
procedure for obtaining an early decision on siting and environmental 
matters under the existing provisions of subpart F.
    The NRC does not believe the specific language changes to the 
proposed rule described by the commenter are necessary to accomplish 
these three objectives. Accordingly, the Commission declines to adopt 
the changes proposed by the commenter, and no change from the 
supplemental proposed LWA rule was made in response to this comment.
    Comment: One commenter proposed that the timing provisions in 10 
CFR 2.101(a)(5), requiring that each part of a two-part combined 
license application be submitted within 6 months of each other, should 
be revised to be consistent with 10 CFR 2.101(a)(9) of the supplemental 
proposed rule, which permits the LWA application to be submitted up to 
12 months in advance of the underlying combined license or construction 
permit. The commenter believes that additional conforming changes 
should be made to implement this concept, including changes in Sec.  
50.10(c)(2). (Unistar 2) Another commenter made the same proposal, but 
separately suggested that the overall time between parts of 
applications be lengthened to 18 months. (NEI 6)
    NRC Response: The NRC agrees with the commenters that the timing 
provisions should be consistent. Furthermore, the NRC agrees with the 
second commenter (NEI) that the overall time between parts of 
applications may be lengthened to 18 months. The 6 month limitation in 
former Sec.  2.101(a)(5) for two-part applications was set many years 
ago and reflected internal NRC administrative considerations, including 
maximizing efficiency and ensuring continuity of review oversight. The 
12-month limitation between submission of the LWA application and the 
underlying combined license or construction permit application, as 
proposed in the supplemental proposed LWA rule, was based upon the same 
considerations, as well as environmental/NEPA considerations. The NRC 
did not want the time between the initial submission of LWA 
environmental information and the subsequent consideration of the 
overall environmental impacts to be lengthened to the point that there 
would be a substantial likelihood of new and significant information 
that would require updating. A 12-month limitation was established as a 
reasonable limitation. No consideration was given to having a 
consistent limitation in both existing paragraph (a)(5) and proposed 
paragraph (a)(9).
    However, after further consideration based upon public comments, 
the NRC concludes that the 6-month limitation in paragraph (a)(5) and 
the proposed 12-month limitation in paragraph (a)(9) are unduly 
restrictive. The NRC believes that administrative efficiency can be 
maintained with longer time periods between parts of applications, in 
view of modern information technology, NRC's restructuring of the 
licensing process in part 52, the NRC's recent adoption of changes to 
part 2, subpart D and part 52, appendix N, and the NRC's projected use 
of design-centered reviews. In addition, the NRC understands, in 
response to informal inquiries with EPA, that 18 months is well within 
the time period considered by EPA to be acceptable for referencing a 
previously-prepared EIS without updating. For these reasons, the 
Commission is adopting an 18-month limitation in paragraphs (a)(5) and 
(a)(9) of Sec.  2.101.
7. Other Topics
    Comment: The NRC should include a ``grandfathering'' provision in 
the final rule to make clear that the final rule does not require any 
change to ESP applications filed before the effective date of the rule, 
such as supplementing the application to require a showing of technical 
qualifications. The NRC should also clarify that the final rule would 
not reduce or limit the authority that such applicants would be 
entitled to receive upon issuance of their ESPs under the current 
regulations (e.g., perform construction of non-safety-related SSCs). 
(NEI 4, Dominion 1)
    NRC Response: The NRC agrees with the commenters that the final LWA 
rule does not require any change to ESP applications filed before the 
effective date of the rule. Upon further consideration, the NRC has 
decided to include a ``grandfathering'' provision in the final rule 
which will provide that ESP applications which are under consideration 
as of the effective date of the final LWA rule, which include a request 
to conduct Sec.  50.10(e)(1) activities, need not comply with the 
``content of application'' requirements in the final rule.
    The NRC does not agree with the commenter's view that the final 
rule and/or the SOC for the final rule should clarify that the current 
ESP applicants should be provided with the authority to conduct LWA 
activities under the former provisions of Sec.  50.10(e)(1), that is, 
not be bound by the final LWA rule's provisions. The final LWA rule 
does allow excavation without an LWA. However, the NRC continues to 
believe that pile driving and other subsurface preparation should be 
considered construction, inasmuch as none of the comments received 
addressed this matter or brought information to the NRC's attention 
that suggests that the NRC's regulatory basis for its position should 
be reconsidered (the public comments received only addressed excavation 
per se, and did not mention pile driving or other subsurface 
preparation). In addition, as discussed elsewhere in this SOC, the NRC 
has redefined and limited the SSCs whose construction requires an LWA, 
construction permit, or combined license. Thus, the NRC believes that 
the current ESP applicants will have sufficient authority and 
flexibility under the final rule, without any grandfathering of the LWA 
provisions. Furthermore, regulatory stability from the standpoint of 
backfitting is not relevant, inasmuch as it has been the Commission's 
longstanding position that backfitting does not protect an applicant 
from changes to regulatory requirements.
    Comment: The commenter states that proposed Sec.  50.10(c)(3)(i) 
requires the LWA application to: (1) Describe the design and 
construction information otherwise required to be submitted for a 
combined license, but limited to the portions of the facility that are 
within the scope of the limited work authorization; and (2) Demonstrate 
compliance with ``technically relevant Commission requirements in 10 
CFR Chapter I'' applicable to the design of those portions of the 
facility within the scope of the limited work authorization, is unduly 
vague. If specific technical requirements are deemed applicable, they 
should be justified and identified in the rule. (Dominion 3)
    NRC Response: The NRC disagrees with the commenter that the 
language of Sec.  50.10(c)(3)(i) (Sec.  50.10(d)(3)(i) in the final LWA 
rule) is unnecessarily vague, or that it would be practical for the 
rule language to specify the technical requirements which are deemed 
applicable. The technical requirements that are applicable will depend 
upon the scope and nature of LWA activities requested. Furthermore, 
this regulatory requirement is modeled on the provisions of former 
Sec. Sec.  50.10(e)(2), (e)(3)(i), and (e)(3)(ii), for which the NRC 
and the nuclear power industry has had decades of experience. The 
commenter did not present either alternative language that would 
address its concern with vagueness, or otherwise present a list of NRC 
technical requirements that should be specified as applicable. The 
original commenter whose submission led to this

[[Page 57425]]

rulemaking did not identify this aspect of the former rule as 
presenting a problem which should be addressed as part of the 
reformulated rule. To modify the rule language to include a list of 
technically relevant requirements would likely require renoticing of 
this aspect of the rule for public comment, which would delay issuance 
of the rule with little benefit, given the 30+ years of experience in 
implementing analogous rule language in the former versions of Sec.  
50.10. Accordingly, the Commission declines to adopt the commenter's 
proposal, and no change from the supplemental proposed LWA rule was 
made in response to this comment.
    Comment: The commenter states that the finding of technical 
qualifications should be limited to LWA activities applicable to 
safety-related activities, because there are no design, construction, 
or technical requirements in the NRC's rules applicable to non-safety-
related construction work. (Dominion 4)
    NRC Response: The NRC disagrees with the commenter's proposal, 
inasmuch as it is based on the longstanding industry misconception that 
the NRC's regulations in part 50 apply only to ``safety-related'' SSCs 
and activities relevant to those SSCs, as that term is defined in 10 
CFR 50.2. This is not a correct understanding. For example, the general 
design criteria in 10 CFR part 50, appendix A, apply to SSCs 
``important to safety; that is, structures, systems, and components 
that provide reasonable assurance that the facility can be operated 
without undue risk to the health and safety of the public.''  Id. 
(first introductory paragraph). There are numerous other regulations 
applicable to the design, construction, and operation of a nuclear 
power facility whose applicability extends beyond ``safety-related'' 
SSCs. It is consistent with Section 182.a of the AEA and the NRC's past 
practice that a technical qualifications finding be made as part of the 
finding necessary for NRC issuance of an LWA. Accordingly, the NRC 
declines to adopt the commenter's proposal, and no change from the 
supplemental proposed LWA rule was made in response to this comment.
    Comment: The commenter states that the reference in Sec.  
50.10(d)(2) to Sec.  52.17(c) should be changed to Sec.  
50.10(c)(3)(iii), inasmuch as the requirement for a redress plan has 
been removed from Sec.  52.17(c) and relocated in Sec.  
50.19(c)(3)(iii). (Progress Energy 3)
    NRC Response: The NRC agrees with the substance of this comment. 
Inasmuch as the proposed rule has been reorganized in the final rule, 
the final rule refers to the appropriate paragraph.
    Comment: The commenter states that an LWA is not the functional 
equivalent of an ESP. There are significant differences between them, 
and the time and level of NRC staff effort necessary to conduct an LWA 
review should not be as great as for an ESP review. The NRC should 
clarify the differences between an LWA and ESP in the SOC for the final 
rule. (Areva 4)
    NRC Response: NRC agrees with the commenter that there are some 
significant differences between an LWA review and an ESP. In 
particular, issuance of an LWA does not require the NRC to make a 
finding with respect to site suitability from either a safety or 
environmental standpoint (although the LWA applicant may, under 
Sec. Sec.  2.101(a)(9), 52.17, and 51.49 of the final rule, submit an 
environmental report addressing the issues of alternative, obviously 
superior sites, and the impacts of construction and operation of the 
nuclear power plant, in which case the NRC would make a finding on all 
environmental matters, including alternative, obviously superior 
sites). The NRC has modified the section-by-section discussion of the 
SOC to make clearer the requirements for obtaining an LWA.
    Comment: The commenter states that proposed Sec. Sec.  51.76(e) and 
51.49(e) are slightly inconsistent, in that the former refers to the 
LWA applicant's authority to incorporate by reference an earlier EIS 
prepared for the same site if a construction permit was issued but 
construction never commenced. By contrast, Sec.  51.49(e) refers to the 
LWA applicant's environmental report to reference an earlier EIS 
prepared for the same site if a construction permit was issued but 
construction was never completed. The commenter also states that 
inasmuch as the NRC intended to adopt the more expansive concept 
embodied in Sec.  51.49(e), the final rule should modify Sec.  51.76(e) 
to be consistent to refer to construction not being ``completed.'' (NEI 
3)
    NRC Response: The NRC agrees, and the language of Sec.  51.76(e) 
has been conformed in the final rule. In addition, conforming changes 
were made in the subtitles of Sec. Sec.  51.49(e) and 51.76(e), and the 
relevant SOC discussion.

III. Discussion

A. History of the NRC's Concept of Construction and the LWA

    Section 101 of the AEA prohibits the manufacture, production, or 
use of a commercial nuclear power reactor, except where the 
manufacture, production, or use is conducted under a license issued by 
the NRC. While construction of a nuclear power reactor is not mentioned 
in Section 101, Section 185 of the AEA requires that the NRC grant 
construction permits to applicants for licenses to construct or modify 
production or utilization facilities, if the applications for such 
permits are acceptable to the NRC. However, the term construction is 
not defined anywhere in the AEA or in the legislative history of the 
AEA.
    To prevent the construction of production or utilization facilities 
before a construction permit is issued, the NRC proposed a regulatory 
definition of construction in 1960 (25 FR 1224; February 11, 1960). The 
definition of construction was adopted in a final rule that same year 
and codified in 10 CFR 50.10(b) (25 FR 8712; September 9, 1960). As 
promulgated, Sec.  50.10(b) stated that no person shall begin the 
construction of a production or utilization facility on a site on which 
the facility is to be operated until a construction permit had been 
issued. Construction was defined in Sec.  50.10(b) as including:

    * * * pouring the foundation for, or the installation of, any 
portion of the permanent facility on the site; but [not to] include: 
(1) Site exploration, site excavation, preparation of the site for 
construction of the facility and construction of roadways, railroad 
spurs, and transmission lines; (2) Procurement or manufacture of 
components of the facility; (3) Construction of non-nuclear 
facilities (such as turbogenerators and turbine buildings) and 
temporary buildings (such as construction equipment storage sheds) 
for use in connection with the construction of the facility; and (4) 
With respect to production or utilization facilities, other than 
testing facilities, required to be licensed pursuant to Section 104a 
or Section 104c of the Act, the construction of buildings which will 
be used for activities other than operation of a facility and which 
may also be used to house a facility. (For example, the construction 
of a college laboratory building with space for installation of a 
training reactor is not affected by this paragraph.) (25 FR 8712; 
September 9, 1960)

    The definition of construction remained unchanged until 1968, when 
the driving of piles was specifically excluded from the definition (33 
FR 2381; January 31, 1968). This change was implemented by amending 
Sec.  50.10(b)(1) to read: ``Site exploration, site excavation, 
preparation of the site for construction of the reactor, including the 
driving of piles, and construction of roadways, railroad spurs, and 
transmission lines.'' The rationale for this change, as articulated in 
the proposed rule (32 FR 11278; August 3, 1967), seems to have been 
that the driving of piles was closely related to ``preparation of the 
site for

[[Page 57426]]

construction'' and that the performance of this type of site 
preparation activity would not affect the NRC's subsequent decision to 
grant or deny the construction permit. With the exception of the 
exclusion of the driving of piles from the definition of construction 
in 1968, the NRC's interpretation of the scope of activities requiring 
a construction permit under the AEA has remained largely unchanged.
    However, following the enactment of the NEPA, as amended, the NRC 
adopted a major amendment to the definition of construction in Sec.  
50.10 (37 FR 5745; March 21, 1972). In that rulemaking, the NRC adopted 
a much more expansive concept of construction. Specifically, a new 
Sec.  50.10(c) was adopted stating that no person shall effect 
``commencement of construction'' of a production or utilization 
facility on the site on which the facility will be constructed until a 
construction permit has been issued. ``Commencement of construction'' 
was defined as:

    * * * any clearing of land, excavation, or other substantial 
action that would adversely affect the natural environment of a site 
and construction of non-nuclear facilities (such as turbogenerators 
and turbine buildings) for use in connection with the facility, but 
does not mean: (1) Changes desirable for the temporary use of the 
land for public recreational uses, necessary boring to determine 
foundation conditions or other preconstruction monitoring to 
establish background information related to the suitability of the 
site or to the protection of environmental values; (2) Procurement 
or manufacture of components of the facility; and (3) With respect 
to production or utilization facilities, other than testing 
facilities, required to be licensed pursuant to Section 104a or 
Section 104c of the Act, the construction of buildings which will be 
used for activities other than operation of a facility and which may 
also be used to house a facility * * * (37 FR 5748; March 21, 1972)

    The NRC explained that expansion of the NRC's permitting authority 
was:

    [C]onsistent with the direction of the Congress, as expressed in 
Section 102 of the NEPA, that, to the fullest extent possible, the 
policies, regulations, and public laws of the United States shall be 
interpreted and administered in accordance with the policies set 
forth in that Act. Since site preparation constitutes a key point 
from the standpoint of environmental impact, in connection with the 
licensing of nuclear facilities and materials, these amendments will 
facilitate consideration and balancing of a broader range of 
realistic alternatives and provide a more significant mechanism for 
protecting the environment during the earlier stages of a project 
for which a facility or materials license is being sought. (37 FR 
5746; March 21, 1972)

    Thus, the NRC's interpretation of its responsibilities under NEPA, 
not the AEA, was the driving factor leading to its adoption of Sec.  
50.10(c).\3\
---------------------------------------------------------------------------

    \3\ See Carolina Power and Light Company (Shearon Harris Nuclear 
Power Plant, Units 1, 2, 3 and 4), 7 AEC 939, 943 (June 11, 1974) 
(hereinafter Shearon Harris) (``The regulations were revised in 
1972, not because of any requirements of the Atomic Energy Act, but 
rather to implement the precepts of NEPA which had then recently 
been enacted.''); Kansas Gas and Electric Company (Wolf Creek 
Nuclear Generating Station, Unit No. 1), 5 NRC 1, 5 (January 12, 
1977) (explaining that NEPA led the AEC to amend its regulations in 
several respects, including the changes to Sec.  50.10(c)).
---------------------------------------------------------------------------

    The NRC issued Sec.  50.10(e) two (2) years after the expansion of 
the NRC's permitting authority resulting from the issuance of Sec.  
50.10(c) (39 FR 14506; April 24, 1974). This provision created the 
current LWA process, which was added to allow site preparation, 
excavation, and certain other onsite activities to proceed before 
issuance of a construction permit. Before the issuance of Sec.  
50.10(e), NRC permission to engage in site preparation activities 
before a construction permit was issued could only be obtained via an 
exemption issued under Sec.  50.12. Section 50.10(e) allowed the NRC to 
authorize the commencement of both safety-related (known as ``LWA-2'' 
activities) and non-safety-related (known as ``LWA-1'' activities) 
onsite construction activities before issuance of a construction 
permit, if the NRC had completed a site suitability report and a final 
environmental impact statement (FEIS) on the issuance of the 
construction permit, and the presiding officer in the construction 
permit proceeding had made the requisite site suitability, 
environmental and, in the case of an LWA-2, safety-related findings.

B. NRC's Concept of Construction and the AEA

    Industry stakeholders have stated that the business environment, 
today and in the foreseeable future, requires that new plant applicants 
minimize the time interval between a decision to proceed with the 
construction of a nuclear power plant and the start of commercial 
operation. To achieve that goal, these stakeholders have indicated that 
non-safety-related ``LWA-1'' activities would need to be initiated up 
to 2 years before the activities currently defined as ``construction'' 
in Sec.  50.10(b). NEI believes that the current LWA approval process 
would constrain the nuclear industry's ability to use modern 
construction/management practices and needlessly add 18 months to 
estimated construction schedules for new plants that did not reference 
an early site permit with LWA authority.
    Based upon the representations of the industry, the NRC agrees that 
the agency's regulatory processes should be revised and optimized to 
ensure that these stakeholder's needs are met, consistent with the 
NRC's statutory obligations and in a manner that is fair to all 
stakeholders. Accordingly, the NRC is adopting this LWA final rule 
which revises 10 CFR 50.10, and makes conforming changes in 10 CFR 
parts 2, 51, and 52. The LWA final rule narrows the scope of activities 
requiring permission from the NRC in the form of an LWA by eliminating 
the concept of ``commencement of construction'' formerly described in 
Sec.  50.10(c) and the authorization formerly described in Sec.  
50.10(e)(1). Instead, under the final LWA rule, NRC authorization would 
only be required before undertaking activities that have a reasonable 
nexus to radiological health and safety and/or common defense and 
security for which regulatory oversight is necessary and/or most 
effective in ensuring reasonable assurance of adequate protection to 
public health and safety or common defense and security. While the 
NRC's redefinition of ``construction'' will result in fewer activities 
requiring NRC permission in the form of an LWA, construction permit, or 
combined license, it will also define certain activities (such as the 
driving of piles) that are currently excluded from the regulatory 
definition of construction given in Sec.  50.10(b), as construction 
requiring such NRC review and approval.
    The LWA final rule also provides an optional, phased application 
and approval procedure for construction permit and combined license 
applicants to obtain LWAs. An applicant may either submit its LWA 
application jointly with a complete construction permit or combined 
license application, or submit it in two parts, with the information 
relevant to issuance of an LWA submitted up to 18 months in advance of 
the remainder of the application addressing the underlying construction 
permit or combined license. Furthermore, under the LWA final rule, the 
NRC need not address the suitability of the site for the operation of a 
nuclear power plant before issuing an LWA. Site suitability will be 
addressed as part of the NRC's consideration of the underlying 
construction permit or combined license. Moreover, under the LWA final 
rule the applicant could seek a separate determination on site 
suitability issues under subpart F of 10 CFR part 2.
    The phased approach in the final LWA rule also provides for an 
environmental review and approval

[[Page 57427]]

process for LWA requests which allows the NRC to grant an applicant 
permission to engage in LWA activities after completion of a limited 
EIS addressing those activities, but before completion of the 
comprehensive EIS addressing the underlying request for a construction 
permit or combined license. The final LWA rule also delineates the 
environmental review required in situations where the LWA activities 
are to be conducted at sites for which the NRC has previously prepared 
an EIS for the construction and operation of a nuclear power plant, and 
for which a construction permit was issued, but construction of the 
plant was never completed.
    The NRC concludes that the LWA final rule is fully consistent with 
the NRC's radiological health and safety and common defense and 
security responsibilities under the AEA.\4\ As previously mentioned, 
the term ``construction'' is not defined in the AEA or in the 
legislative history of the AEA. Instead of expressly defining the term 
in the AEA, Congress entrusted the agency with the responsibility of 
determining what activities constitute construction.\5\ The NRC has 
determined that the site-preparation activities that would no longer be 
considered construction under this proposed rule do not have a 
reasonable nexus to radiological health and safety, or the common 
defense and security. Accordingly, the NRC concludes that its 
definition of the term, ``construction,'' is reasonable and complies 
with the AEA.
---------------------------------------------------------------------------

    \4\ See State of New Hampshire v. Atomic Energy Commission, 406 
F.2d 170, 174-75 (1st Cir. 1969).
    \5\ Shearon Harris, 7 AEC 939.
---------------------------------------------------------------------------

    The NRC also concludes that issuance of the LWA in advance of a 
consideration of site suitability is reasonable and complies with the 
AEA. Any work under the LWA is done at the risk of the LWA holder.

C. NRC's LWA Rule Complies With NEPA

1. NRC's Concept of Construction is Consistent With the Legal Effect of 
NEPA
    The definition of construction in the LWA final rule is consistent 
with the legal effect of NEPA. Section 50.10(c) was originally added to 
part 50 due to the interpretation that the enactment of NEPA, not a 
change in the powers given to the agency in the AEA, required the NRC 
to expand its permitting/licensing authority. However, subsequent 
judicial decisions have made it clear that NEPA is a procedural statute 
and does not expand the jurisdiction delegated to an agency by its 
organic statute.\6\ Therefore, while NEPA may require the NRC to 
consider the environmental effects caused by the exercise of its 
permitting/licensing authority, the statute cannot be the source of the 
expansion of the NRC's authority to require construction permits, 
combined licenses, or other forms of permission for activities that are 
not reasonably related to radiological health and safety or protection 
of the common defense and security. Since NEPA cannot expand the NRC's 
permitting/licensing authority under the AEA, the elimination of the 
blanket inclusion of site preparation activities in the definition of 
construction under Sec.  50.10(c) does not violate NEPA.
---------------------------------------------------------------------------

    \6\ See,e.g., Robertson v. Methow Valley Citizens Council, 490 
US 332, 350-52 (1989); Natural Resources Defense Counsel v. U.S. 
Environmental Protection Agency, 822 F.2d 104, 129 (D.C. Cir 1987); 
Kitchen v. Federal Communications Commission, 464 F.2d 801, 802 
(D.C. Cir. 1972).
---------------------------------------------------------------------------

2. NRC's Concept of the ``Major Federal Action'' Is Consistent With 
NEPA Law
    The AEA does not authorize the NRC to require an applicant to 
obtain permission before undertaking site preparation activities that 
do not implicate radiological health and safety or common defense and 
security. As a general matter, the NRC considers these activities to 
involve ``non-Federal action'' for the purposes of implementing its 
NEPA responsibilities. Generally, non-Federal actions are not subject 
to the requirements of NEPA.\7\ Further, the NRC believes that these 
non-Federal site preparation activities would not generally be 
``federalized'' if the NRC were to ultimately grant a combined license 
or construction permit. The grant of a construction permit or combined 
license by the NRC is not a legal condition precedent to these non-
Federal, site preparation activities. While the NRC recognizes that 
there may be a ``but for'' causal relationship between certain non-
Federal site preparation activities and the major Federal action of 
issuing a construction permit or combined license, such a ``but for'' 
causal relationship is not sufficient to require non-Federal, site 
preparation activities to be treated as Federal action for the purposes 
of NEPA.\8\
---------------------------------------------------------------------------

    \7\ Save the Bay, Inc., v. U.S. Army Corps of Engineers, 610 
F.2d 322, 326 (5th Cir. 1980).
    \8\ See Landmark West! v. U.S. Postal Service, 840 F. Supp. 994, 
1006 (S.D.N.Y. 1993) (citing cases).
---------------------------------------------------------------------------

    In addition, under the narrowed definition of construction in the 
LWA final rule, the NRC concludes that it does not have the ability or 
discretion to influence or control the non-Federal, site preparation 
activities to the extent that its influence or control would constitute 
practical or factual veto power over the non-Federal action. Further, 
the NRC does not believe that allowing the non-Federal, site 
preparation activities to be undertaken would restrict its 
consideration of alternative sites or the need to assess whether there 
is an ``obviously superior'' site. Specifically, while the NRC 
recognizes that narrowing the definition of construction may result in 
substantial changes to the physical properties of a site, many of the 
fundamental elements that enter into a determination of the existence 
of an ``obviously superior'' site would not be affected by the changes 
to those physical properties. For example, seismology would not be 
affected in any significant way by the non-Federal site preparation 
activities. However, while the effects caused by the non-Federal, site 
preparation activities would not be considered effects of the NRC's 
licensing action, the effects of the non-Federal activities would be 
considered during any subsequent ``cumulative impacts'' analysis. 
Specifically, the effects of the non-Federal activities will be 
considered in order to establish a baseline against which the 
incremental effect of the NRC's major Federal action (i.e., issuing an 
LWA, construction permit, or combined license) would be measured. These 
incremental impacts may be additive or synergistic. To ensure that the 
NRC has sufficient information to perform the cumulative impacts 
analysis in a timely fashion, the final LWA rule includes a 
requirement, in Sec.  51.45(c), for the environmental report submitted 
by an applicant for an ESP, construction permit, or combined license to 
include a description of impacts of the applicant's preconstruction 
activities at the proposed site (i.e., the activities listed in 
paragraph (b)(1) through (8) in the definition of construction 
contained in Sec.  51.4) that are necessary to support the construction 
and operation of the facility which is the subject of the LWA, 
construction permit, or combined license application, and an analysis 
of the cumulative impacts of the activities to be authorized by the 
LWA, construction permit, or combined license in light of the 
preconstruction impacts.
3. NRC's Phased Approval Approach Is Not Illegal Segmentation Under 
NEPA
    The phased application and approval of LWAs does not raise the 
concerns underlying the prohibition of segmentation under NEPA law. 
Generally, the NEPA segmentation

[[Page 57428]]

problem arises when the environmental impacts of projects are evaluated 
in a piecemeal fashion and, as a result, the comprehensive 
environmental impacts of the entire Federal action are never considered 
or are only considered after the agency has committed itself to 
continuation of the project. Another associated segmentation problem 
arises when pieces of a Federal action are evaluated separately and, as 
a result, none of the individual pieces are considered ``major Federal 
actions'' requiring an EIS.\9\
---------------------------------------------------------------------------

    \9\ Daniel R. Mandelker, NEPA Law and Litigation, 9-25 (2nd ed. 
2004).
---------------------------------------------------------------------------

    Neither of these segmentation concerns are presented by the 
approach embodied in the LWA final rule. First, under both LWA 
application options in the LWA final rule, the environmental effects 
associated with the LWA activities and the project as a whole (i.e., 
issuance of a construction permit or combined license) would be 
evaluated in an EIS. Therefore, the segmentation problem of considering 
a project in phases, thereby avoiding completion of an EIS, is not an 
issue. In addition, all of the environmental impacts associated with 
the construction and operation of the proposed plant, including the 
impacts associated with the LWA activities, would be considered 
together, through incorporation by reference, in the EIS prepared on 
the construction permit or combined license application. This 
comprehensive consideration of environmental impacts would take place 
before the NRC is committed to issuing any construction permit or 
combined license. The fact that the NRC will not have prejudged the 
ultimate decision of whether to grant a construction permit or a 
combined license by issuing the LWA, coupled with the requirement that 
the site redress plan be implemented in the event that the permit or 
license is ultimately not issued, also ensures that issuance of the LWA 
would not foreclose reasonable alternatives.
    In addition, the proposed application and approval process is 
consistent with the NRC's previously expressed position that NEPA does 
not, as a general matter, prohibit an agency from undertaking part of a 
project without a complete environmental analysis of the whole 
project.\10\ The key factors used to support the Commission's position 
in Clinch River were: (1) That the site preparation activities in that 
case would not result in irreversible or irretrievable commitments to 
the remaining portions of the project, and (2) The environmental 
impacts of the site preparation activities allowed in that case were 
substantially redressable.\11\
---------------------------------------------------------------------------

    \10\ See Tennessee Valley Authority (Clinch River Breeder 
Reactor Plant), 16 NRC 412, 424 (August 17, 1982) (hereinafter 
Clinch River).
    \11\ Id.
---------------------------------------------------------------------------

    These considerations are reflected in the provisions of the LWA 
final rule. Specifically, Sec.  50.10(f) states that any activity 
undertaken pursuant to an LWA are entirely at the risk of the 
applicant, that the issuance of the LWA has no bearing on whether the 
construction permit or combined license should be issued, and that the 
EIS associated with the underlying request will not consider the sunk 
costs associated with the LWA activities. In addition, Sec.  
50.10(d)(3) requires an applicant requesting an LWA to submit a plan 
for redress of the activities permitted by the LWA, which would to be 
implemented in the event that the LWA holder is ultimately not issued a 
construction permit or combined license. The redress plan would achieve 
this objective by addressing impacts resulting from LWA activities 
(e.g., pile driving, placement of permanent retaining walls in 
excavations, and construction of foundations for SSCs within the scope 
of the LWA final rule). Impacts associated with pre-LWA activities 
would not be addressed in the redress plan. Further, Sec.  50.10(f) 
requires that the site redress plan be implemented within a reasonable 
time and that the redress of the site occur within 18 months of the 
Commission's final decision denying a construction permit or combined 
license.
    It should be noted that while redress of site impacts may have the 
practical effect of mitigating some environmental impacts, the redress 
plan is not a substitute for a thorough evaluation of environmental 
impacts, or development of mitigation measures that may be necessary to 
provide relief from environmental impacts associated with the proposed 
LWA activities. The primary purpose of the site redress plan is to 
ensure that impacts associated with any LWA activities performed at the 
site will not prevent the site from being used for a permissible, non-
nuclear alternative use. In this way, the redress plan helps to 
preserve the NRC's ability to objectively evaluate an application for a 
construction permit or combined license, despite the fact that LWA 
activities have been undertaken at the site.
    In sum, the LWA final rule does not constitute unlawful 
segmentation in view of the provisions ensuring that the issuance of an 
LWA does not predispose or bias the NRC's decision on the underlying 
construction permit or combined license application.

D. Consideration of Activities as ``Construction''

1. Driving of Piles
    A significant change proposed in the LWA supplemental proposed rule 
is the inclusion of the driving of piles for certain SSCs in the 
definition of construction that are not currently defined as 
construction in Sec.  50.10(b). Although the driving of piles was not 
expressly included in the definition of ``construction'' contained in 
Sec.  50.10(b) before the amendment of Sec.  50.10(b)(1) in 1968, this 
activity was generally considered to be encompassed in the existing 
definition of construction at that time (See 33 FR 2381; January 31, 
1968). The 1967 proposed rule suggested that the driving of piles be 
expressly excluded from the definition of construction because that 
activity ``is closely related to, and may be appropriately included 
in'' site preparation activities, which were not considered 
construction (32 FR 11278; August 3, 1967).\12\ The rationale for non-
inclusion of pile driving (and site preparation activities generally) 
in the definition of construction seems to have been that these 
activities would have no effect on the NRC's ultimate decision to grant 
or deny a construction permit, and that these activities were 
undertaken entirely at the applicant's risk. See 32 FR 11278; August 3, 
1967.
---------------------------------------------------------------------------

    \12\ The proposed rule language was issued without modification 
in the final rule. (33 FR 2381; January 31, 1968.)
---------------------------------------------------------------------------

    The NRC does not believe that the exclusion of pile driving from 
the definition of construction should hinge on these factors. The 
Commission believes that the driving of piles for certain SSCs (as 
discussed separately below) has a reasonable nexus to radiological 
health and safety, and/or common defense and security and, therefore, 
is properly considered ``construction'' as that term is used in Section 
185 of the AEA. In addition, the inclusion of these activities in the 
definition of construction (i.e., requiring an LWA before they are 
undertaken), coupled with the phased approval process suggested in this 
supplemental proposed rule, would allow for early resolution of the 
safety issues associated with these activities. Early resolution of 
safety issues is consistent with the general rationale underlying the 
licensing and permitting processes provided in 10 CFR part 52. 
Accordingly, the final rule's definition of construction includes the 
driving of piles for certain SSCs.

[[Page 57429]]

2. Excavation
    The LWA supplemental proposed rule would have included excavation 
within the definition of construction. The inclusion of excavation 
within the ambit of construction was based upon two factors: (1) 
Excavation activities in the past have uncovered potentially adverse 
geologic, soil, and hydrological conditions not anticipated by the 
construction permit applicant, which have resulted in design changes; 
and (2) Excavation activities in the past have caused unanticipated 
damage to surrounding native rock, which had to be corrected by the 
construction permit holder. The NRC believed that, in these situations, 
these considerations provided the ``reasonable nexus to radiological 
health and safety and/or common defense and security'' necessary to 
include excavation in the definition of construction.
    Upon consideration of stakeholder comments and further evaluation, 
the NRC has determined that it is not necessary to include excavation 
within the definition of construction, thus requiring some kind of NRC 
review and approval before undertaking excavation, to ensure public 
health and safety or common defense and security in the situations 
noted previously. With respect to geologic, soils, and hydrological 
matters, prior NRC review and approval of excavation is not necessary 
to ensure that any adverse geologic, soil, or hydrological conditions 
that result in the need for design changes or some other form of 
mitigation are considered in NRC's review of the associated LWA, 
construction permit, or combined license application. In the situation 
where a potential applicant performs excavation activities before 
submitting its LWA, construction permit, or combined license 
application, 10 CFR 52.6(a) requires that information provided to the 
Commission by an applicant for a license be complete and accurate in 
all material respects. In the situation where an applicant performs 
excavation activities after submitting its LWA, construction permit, or 
combined license application, 10 CFR 52.6(b) requires the applicant to 
notify the Commission of information identified by the applicant as 
having, for the regulated activity, a significant implication for 
public health and safety or common defense and security. The staff 
believes that 10 CFR 52.6 provides an equally-acceptable way of 
ensuring public health and safety if excavation is eliminated from the 
definition of construction for those limited situations where 
excavation activities uncover potentially adverse geologic, soil, and 
hydrological conditions not anticipated by the applicant, or if 
excavation activities cause unanticipated damage to the surrounding 
native rock. The LWA, construction permit, and combined license 
applicant, as applicable, would be responsible--as is currently the 
case--for adequately describing the geologic, soil, and hydrologic 
conditions of the site. The difference with the approach in this final 
rule is that the approved site description will, in many cases, be 
based upon actual knowledge of the conditions as revealed or confirmed 
by the excavation activities, and not only on reasonable assumptions 
based upon extrapolations from test borings and other indirect 
information. Therefore, in many cases, the actual foundation and 
structural design to be approved at the construction permit or combined 
license stage would be based upon actual geologic, soils, and 
hydrological information as revealed or confirmed by the excavation.
    For these reasons, the Commission concludes that existing 
regulatory mechanisms provide reasonable assurance of public health and 
safety and common defense and security without imposition of the 
regulatory mechanism of prior NRC review and approval of excavation 
activities. Accordingly, the LWA final rule does not define excavation 
as being within the ambit of construction.
3. Temporary Structures and Activities in the Excavation
    Construction, under the LWA final rule, includes the placement/
installation of backfill, concrete, or permanent retaining walls within 
an excavation. These activities involve the placement/installation of 
permanent parts of the overall facility, and therefore are properly 
considered ``construction.'' By contrast, the placement/installation of 
temporary SSCs which will not become part of the final facility, and 
therefore are removed, should not be treated as ``construction,'' 
inasmuch as they have no ongoing nexus to radiological health and 
safety or common defense and security. Accordingly, activities in the 
excavation for SSCs within the scope of construction, such as the 
placement/installation of temporary drainage, erosion control, 
retaining walls, environmental mitigation, are not considered to be 
within the purview of ``construction,'' so long as these temporary 
items are removed from the excavation before fuel load. The NRC chose 
fuel loading as a convenient, well understood and clear event for 
delineating the time by which temporary SSCs must be removed from the 
excavation, in order for those temporary SSCs to be excluded from the 
definition of construction.
4. Construction SSCs
    The LWA supplemental proposed rule revised the former definition of 
construction in 10 CFR 50.10(c) to include the onsite, in-place 
fabrication, erection, integration, or testing of any SSC required by 
the Commission's rules and regulations to be described in the site 
safety analysis report, preliminary safety analysis report, or final 
safety analysis report. This definition of construction included 
basically all SSCs of a facility, except for those SSCs that were 
specifically excluded by the proposed definition (e.g., potable water 
systems). However, as stated in the supplemental proposed rule, the 
Commission has determined that construction should include all of the 
activities that have a reasonable nexus to radiological health and 
safety, or common defense and security.
    Upon consideration of stakeholder comments and further evaluation, 
the NRC has determined that there may be some SSCs of a facility which 
are required to be described in the FSAR, but which do not have a 
reasonable nexus to radiological health and safety or the common 
defense and security. These SSCs are those which are required to be 
described in the FSAR to provide contextual information for 
understanding the overall design and operation of the facility, but 
which do not actually directly affect the radiological health and 
safety of the public or the common defense and security, and their 
indirect effect on such health and safety or common defense and 
security is so low as to be considered negligible. The determination of 
SSCs which do not have a reasonable nexus to radiological health and 
safety or common defense and security depends on the design of the 
facility. An example SSC is the administration building. However, an 
administration building that includes the technical support center 
would fall within the scope of SSCs covered by the definition of 
construction. In sum, the NRC has clarified and narrowed the scope of 
SSCs falling within the scope of construction to exclude those SSCs 
which have no reasonable nexus to radiological health and safety or 
common defense and security.
    For the LWA final rule, the scope of SSCs falling within the 
definition of construction was derived from the scope of SSCs that are 
included in the program for monitoring the effectiveness of maintenance 
at nuclear power plants, as

[[Page 57430]]

defined in 10 CFR 50.65(b). This definition is well understood and 
there is good agreement on its implementation. The NRC has supplemented 
the definition in Sec.  50.65(b) to include the SSCs that are necessary 
to comply with 10 CFR 50.48 and criterion 3 of 10 CFR part 50, appendix 
A, and the onsite emergency facilities, that is, technical support and 
operations support centers, that are necessary to comply with 10 CFR 
50.47 and 10 CFR part 50, appendix E. These SSCs were added because 
they have a reasonable nexus to radiological health and safety. The 
SSCs that are necessary to comply with 10 CFR part 73 were added 
because they are required for the common defense and security.

E. Phased Application and Approval Process

    Another significant change in this final rule is the modification 
of the procedure for obtaining LWA approval by implementing an optional 
phased application and approval process. Specifically, Sec.  
2.101(a)(9) allows applicants for construction permits and combined 
licenses the option of submitting either: (1) A complete application, 
or (2) a two-part application with part one including information 
required for the NRC to make a decision on the applicant's request to 
undertake LWA activities, and part two containing all other information 
required to obtain the underlying license or permit. The final rule 
allows the NRC to consider the environmental impacts attributable to 
the requested LWA activities separately, either as part of a 
comprehensive EIS in the case where a complete application is 
submitted, or in a separate EIS addressing only the LWA activities in 
the case of a two-part application. After consideration of the 
environmental impacts and the relevant safety-related issues associated 
with the LWA activities, the NRC may allow the applicant to undertake 
the LWA activities, even if the EIS on the underlying request (i.e., 
construction permit or combined license) is not complete.
    The NRC believes that this phased application and approval process 
is more efficient because it prevents unnecessary delay in nuclear 
power plant construction schedules. This delay would result if issuance 
of an LWA for safety-related activities were delayed until the final 
EIS and adjudicatory hearing on the entire underlying license 
application were complete. In addition, the final rule's application 
and approval process should result in the timely resolution of relevant 
safety and environmental issues at an earlier stage in the licensing 
process. As previously discussed, the NRC believes that these 
efficiencies can be gained without compromising the agency's NEPA 
responsibilities, as the phased approach presented in this supplemental 
proposed rule does not constitute illegal segmentation.

F. EIS Prepared, but Facility Construction Was Not Completed

    The LWA final rule also addresses the situation where a request is 
made to perform LWA activities at a site for which an EIS has 
previously been prepared for the construction and operation of a 
nuclear power plant, and a construction permit has been issued, but 
construction of the plant was never completed. In this special 
situation, the final rule allows an applicant to reference the previous 
EIS in its environmental report, but requires that the applicant 
identify any new and significant information material to the matters 
required to be addressed in the proposed Sec.  51.49(a). Further, in 
these special cases the final rule provides that the NRC will 
incorporate by reference the previous EIS when preparing its draft EIS 
on the LWA activities. The draft EIS on the LWA request is limited to 
the consideration of any new and significant information dealing with 
the environmental impacts of construction, relevant to the activities 
to be carried out under the LWA. Further, in a hearing on issuance of 
an LWA at such sites, the presiding officer is limited to determining 
whether there is new and significant information pertaining to the 
environmental impacts of the construction activities encompassed by the 
previous EIS that are analogous to the activities to be conducted under 
the LWA. The presiding officer would evaluate new and significant 
information in determining whether an LWA should be issued as proposed 
by either the Director of the Office of New Reactors or the Director of 
the Office of Nuclear Reactor Regulation, as applicable.
    This provision is designed to gain efficiency by using existing 
EISs to evaluate the environmental impacts of activities to be 
performed under an LWA. The Commission believes that this practice is 
appropriate because the referenced environmental review will come in 
the form of an FEIS prepared by NRC staff for sites on which permission 
to construct a nuclear power plant was ultimately granted by the 
Commission. The Commission understands that the activities proposed in 
a current LWA request may be different from the activities proposed and 
analyzed in the previous FEIS referenced by an applicant and relied 
upon by NRC staff. However, it is the Commission's intent that if these 
differences result in significant changes to the environmental impacts 
caused by the LWA activities currently proposed by the applicant, then 
the differences should be considered ``new and significant 
information'' material to the environmental impacts that may reasonably 
be expected to result from the LWA activities. Therefore, these 
differences should be addressed in the applicant's environmental 
report, analyzed by the NRC staff in a supplement to the existing FEIS, 
and considered by the presiding officer.
    Further, for the reasons previously discussed in Section C.3 of 
this document, the Commission does not believe that authorizing LWA 
activities before completion of the FEIS on the combined license or 
construction permit will have the effect of prejudging the license/
permit, or foreclosing reasonable alternatives.

G. Commission Action on PRM-50-82

    As discussed previously, the Commission is treating the May 25, 
2006, comments of NEI on the March 2006 proposed part 52 rule as a 
petition for rulemaking, which has been designated PRM-50-82. The 
petition was effectively granted when the supplemental proposed LWA 
rule was published (71 FR 61330; October 17, 2006). With the adoption 
of this final LWA rule, the Commission has completed action on PRM-50-
82.

IV. Section-by-Section Analysis

Part 2--Rules of Practice for Domestic Licensing Proceedings and 
Issuance of Orders

Section 2.101, Filing of Application
    Section 2.101 is revised by adding a new paragraph (a)(9), which 
provides that an applicant for a construction permit or combined 
license may submit a request for an LWA either as part of a complete 
application under paragraphs (a)(1) through (4), or in two parts under 
this paragraph (i.e., a ``phased LWA application''). If the LWA 
application is submitted as part of a complete construction permit or 
combined license application, the application must include the 
information required by Sec.  50.10(d)(3).
    If the application is a phased LWA application, the first part must 
contain the information required by Sec.  50.10(d)(3) on the LWA, as 
well as the general information required of all production and 
utilization facility applicants under Sec.  50.33(a) through (f). The 
second part of the application must

[[Page 57431]]

contain the remaining information otherwise required to be filed in a 
complete application under Sec.  2.101(a)(1) thorough (4). However, the 
applicant would have the further option of submitting part two in 
additional subparts in accordance with Sec.  2.101(a-1). The second 
part (or the first subpart of multiple subparts under Sec.  2.101(a-1)) 
must be filed no later than 18 months after the filing of part one. 
Part two of the application (or the first subpart of any additional 
subparts submitted in accordance with Sec.  2.101(a-1)) must be 
submitted no later than 18 months after submission of part one of the 
application.
    An applicant for an ESP may not submit its LWA application in 
advance of the underlying ESP application, and therefore is not 
permitted to use the procedures of subpart F of part 2, or submit its 
application in two parts under Sec.  2.101(a)(9). Similarly, the holder 
of an ESP is not permitted to use the procedures of subpart F of part 
2, nor to submit its ESP amendment application for LWA authority in two 
parts under Sec.  2.101(a)(9).
Section 2.102, Administrative Review of Application
    Paragraph (a) of Sec.  2.102 is revised by adding an LWA to the 
list of docketed applications for which the NRC staff must establish a 
schedule for review of the application.
Section 2.104, Notice of Hearing
    The introductory text of paragraph (a) is revised to add LWAs to 
the list of application types for which the Commission must issue a 
hearing notice. In addition, paragraph (c)(1) is revised to require the 
relevant NRC Staff Director to transmit a copy of the notice of hearing 
for an application for an LWA to state and local officials. In many 
cases, this is a formality, inasmuch as pre-application interactions 
between the NRC and the potential LWA applicant will result in informal 
contacts with those state and local officials.

Subpart F

    The title of subpart F is revised to reflect the broader scope of 
matters covered under this section, as described under Sec.  2.600.
Section 2.600, Scope of Subpart
    The statement of scope in Sec.  2.600 is revised to reflect the new 
set of procedures for phased LWA applications in proposed Sec. Sec.  
2.641 through 2.649. A new paragraph (d) is added to refer to 
Sec. Sec.  2.641 through 2.649 as containing the applicable procedures 
for phased construction permit and combined license applications which 
also request LWA authority.
Section 2.606, Partial Decision on Site Suitability Issues
    Paragraph (a) of Sec.  2.606, which provides that an LWA may not be 
issued without completion of the ``full review'' required by NEPA, is 
revised to remove the reference to an LWA, because LWAs are now covered 
in Sec. Sec.  2.641 through 2.649.
Section 2.641, Filing Fees
    Section 2.641, which is comparable to current Sec.  2.602, provides 
that a phased LWA application must be accompanied by the applicable 
filing fees in Sec.  50.30(e) and part 170 of this chapter.
Section 2.643, Acceptance and Docketing of Application for Limited Work 
Authorization
    Section 2.643, which is comparable to current Sec.  2.603, 
describes the acceptance and docketing requirements for phased LWA 
applications, and the requirement for publication in the Federal 
Register of a notice of docketing. Paragraph (a) provides that each 
part of the application, when first received, will be treated as a 
tendered application and assessed for sufficiency. If the submitted 
part of the application is determined to be incomplete, the relevant 
Director will inform the applicant. The determination of completeness 
will generally be made in 30 days, barring unusual circumstances.
    Under paragraph (b), the Director will docket part one of the 
application only if that part is ``complete.'' The NRC would use the 
existing guidelines and practices for determining the completeness of 
applications under this section, as are used in determining 
completeness under Sec.  2.101. Upon docketing, the Director will 
assign a docket number that will be used throughout the entire 
proceeding (including that part of the proceeding on part two of the 
application).
    Under paragraph (c), the Director will make the designated 
distributions to the Governor of the State in which the nuclear power 
plant will be located, and publish a notice of docketing in the Federal 
Register. Often in practice, the notice of hearing required by the AEA 
is included in the notice of docketing, but as with existing 
applications, this will remain a matter of discretion by the NRC, who 
will determine the most efficient course of action in this regard.
    Paragraph (d) provides that part two of the application will be 
docketed, as with part one, when it is determined to be complete. The 
Commission reiterates that ``part two'' could be submitted in several 
subparts if the applicant chose to take advantage of the provisions of 
Sec.  2.101(a-1), which provides for submission of applications in 
three parts.
    Finally, under paragraph (e), the Director is required to publish a 
second notice of docketing in the Federal Register for part two of the 
application. As with the notice of docketing for part one, the notice 
of docketing for part two may also include a notice of hearing on the 
second part of the application.
    The NRC notes that nothing in Sec.  2.101(a)(9), or any part of 
subpart F of part 2, requires that the hearing on part one of the 
application be completed and an initial decision issued by the 
presiding officer, before part two of the application is filed.
Section 2.645, Notice of Hearing
    Section 2.645, which is comparable to current Sec.  2.604, sets 
forth the content of the notice of hearing for each of the two parts of 
the proceeding. Paragraph (a) provides that the notice of hearing for 
part one specify that the hearing will relate only to consideration of 
the matters related to Sec.  50.33(a) through (f), and the LWA issues 
under review. Although not explicitly stated in this paragraph, 
interested persons who seek to intervene in the hearing on part one of 
the application must file a petition to intervene in accordance with 
the notice of hearing, and Sec.  2.309.
    Under paragraph (b), a supplementary notice of hearing will be 
published in the Federal Register when part two of the application is 
docketed. This provides a second opportunity for interested persons to 
file petitions to intervene with respect to the matters relevant to 
part two of the application. These petitions must be filed within the 
time specified in the notice of hearing, and must meet the applicable 
requirements of subpart C of part 2, including the contention 
requirements in Sec.  2.309.
    Paragraph (c) addresses continued participation in a phased 
application involving a request for advance consideration for an LWA. 
The provisions of paragraph (c) differ somewhat from the existing 
procedures in Sec.  2.604 applicable to phased applications which do 
not involve LWAs, in that the Commission has decided not to allow a 
party admitted in part one of the proceeding, who did not withdraw or 
was not otherwise dismissed, to automatically continue as a party in 
phase two of the proceeding. Instead, each party who wishes to 
participate in the second phase must submit a second petition to 
intervene in accordance with Sec.  2.309. The petition

[[Page 57432]]

need not, however, address the interest and standing requirements in 
Sec.  2.309(d). The petition must be filed within the time provided by 
the supplementary notice of hearing published in the Federal Register 
for part two of the application.
    Paragraph (d) makes clear that a non-timely petition for 
intervention filed under paragraph (b) (incorrectly referred to as 
paragraph (c) in the supplemental proposed rule) must meet the factors 
in both 2.309(c)(1)(i) through (iv), as well as 2.309(d). This is no 
different than non-timely petitions for intervention filed in ordinary, 
non-phased proceedings.
    As noted in the Section-by-Section Analysis in this document for 
Sec.  2.643, nothing in Sec.  2.101(a)(9) or subpart F of part 2 
requires that the hearing on part one of the application be completed 
and an initial decision issued by the presiding officer, before part 
two of the application is filed. Thus, there may be simultaneous 
hearings on parts one and two of the application. However, as reflected 
in paragraph (e), the Commission's intent is that the membership of the 
Atomic Safety and Licensing Board designated for hearings under part 
one be the same as for the hearings under part two, to the extent 
practical and consistent with timely completion of each hearing.
Section 2.647 [Reserved]
    This section is reserved for future use by the Commission.
Section 2.649, Partial Decisions on Limited Work Authorization
    Section 2.649, which is comparable to Sec.  2.606, denotes the 
provisions in subparts C and G to part 2 relative to issues such as 
oral arguments, immediate effectiveness of the presiding officer's 
initial decision, and petitions for Commission review, that apply to 
partial initial decisions on an LWA rendered in accordance with this 
subpart. This section also states that the LWA may not be issued 
without completion of the environmental review required for LWAs under 
subpart A of part 51. Finally, this section provides that the time for 
the Commission to exercise its review and sua sponte authority is the 
same time provided for in part 2 with respect to a final decision on 
issuance of a construction permit or combined license.

Part 50--Domestic Licensing of Production and Utilization Facilities

50.10, License Required; Limited Work Authorization
    Paragraph (a), which is derived from former Sec.  50.10(b), sets 
forth a new definition of ``construction'' for purposes of this section 
(the same definition is also used in part 51, see 10 CFR 51.4). The 
definition of construction has been substantially modified from the 
definition in former Sec.  50.10(b) in both structure and content, and 
supersedes the definition of construction in former Sec.  50.10(c). The 
new definition is divided into two parts, with the first specifying the 
activities deemed to constitute ``construction,'' and the second part 
specifying activities which are excluded from the definition.
    Under the new definition, excavation is excluded from construction. 
Excavation includes the removal of any soil, rock, gravel, or other 
material below the final ground elevation to the final parent material. 
Thus, all these excavation activities may be conducted without an LWA, 
construction permit, or combined license. However, the placement of 
permanent, non-structural dewatering materials, mudmats and/or 
engineered backfill which are placed in advance of the placement of the 
foundation and associated permanent retaining walls for SSCs within the 
scope of the definition of construction are not excavation activities, 
but instead fall within the scope of construction. Any person or entity 
that conducts excavation, however, should be aware that the NRC expects 
any subsequent LWA, construction permit, or combined license 
application to accurately document and address the conditions exposed 
by excavation, to ensure that the NRC will have an adequate basis for 
evaluating the relevant portions of the LWA, construction permit, or 
combined license application.
    Whereas former Sec.  50.10(b) allowed the driving of piles for the 
facility without NRC approval, the LWA final rule does not permit 
driving of piles for SSCs described in the definition of construction, 
unless NRC permission is obtained in the form of an LWA, construction 
permit, or combined license. The ``driving of piles'' not related to 
ensuring the structural stability or integrity of any SSC within the 
scope of the definition of construction does not fall within the 
definition of construction in this paragraph, and therefore may be 
accomplished without an LWA, construction permit, or combined license. 
For example, piles driven to support the erection of a bridge for a 
temporary or permanent access road would not be considered 
``construction'' under this section and may be performed without an 
LWA, construction permit, or combined license.
    The