
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 94-1562                          CITIZENS AWARENESS NETWORK, INC.,                                     Petitioner,                                          v.                     UNITED STATES NUCLEAR REGULATORY COMMISSION,                                     Respondent.                                 ____________________                           YANKEE ATOMIC ELECTRIC COMPANY,                                     Intervenor.                                 ____________________                     ON PETITION FOR REVIEW OF A DECISION OF THE                      UNITED STATES NUCLEAR REGULATORY COMMISSION                                 ____________________                                        Before                               Torruella, Chief Judge,                                          ___________                            Aldrich, Senior Circuit Judge,                                     ____________________                               and Cyr, Circuit Judge.                                        _____________                                _____________________               Jonathan  M. Block,  with  whom Robert  L.  Quinn and  Egan,               __________________              _________________      _____          Flanagan and Cohen, P.C. were on brief for petitioner.          ________________________               Charles E. Mullins,  Senior Attorney, Office of  the General               __________________          Counsel, U.S. Nuclear  Regulatory Commission, with whom  Karen D.                                                                   ________          Cyr,  General Counsel,  John F.  Cordes, Jr.,  Solicitor,  E. Leo          ___                     ____________________               ______          Slaggie, Deputy  Solicitor, U.S.  Nuclear Regulatory  Commission,          _______          Anne S.  Almy, Assistant Chief, and William B. Lazarus, Attorney,          _____________                       __________________          Appellate Section,  Environment and  Natural Resources  Division,          U.S. Department of Justice, were on brief for respondent.               Thomas G. Dignan, Jr.,  with whom Ropes & Gray, was on brief               _____________________             ____________          for intervenor.                                 ____________________                                    July 20, 1995                                 ____________________                    TORRUELLA,  Chief Judge.    Citizens Awareness  Network                    TORRUELLA,  Chief Judge                    _______________________          ("CAN") petitions for review of a  final order and opinion of the          United  States  Nuclear  Regulatory  Commission  ("NRC"  or  "the          Commission") denying CAN's  request for  an adjudicatory  hearing          regarding  decommissioning activities taking  place at the Yankee          Nuclear Power Station ("Yankee NPS").   CAN's petition for review          rests   on  three  grounds.     First,  CAN   contends  that  the          Commission's order  violates CAN  members' right  to due  process          under the  Fifth Amendment and    189a of  the Atomic Energy  Act          ("AEA"), 42  U.S.C.   2239 (1988).   Second, CAN argues  that the          NRC's  action  violates the  National  Environmental  Policy Act,          ("NEPA"), 42 U.S.C.   4321  et seq. (1988) by failing  to conduct                                      __ ___          an  environmental  analysis  ("EA")  or  an  environmental impact          statement  ("EIS") prior to decommissioning.  Finally, CAN argues          that  the Commission's  actions violate  its  own precedents  and          regulations,  in violation  of the  Administrative Procedure  Act          ("APA"), 5 U.S.C.   501 et  seq.  Although we reject CAN's  Fifth                                  __  ___          Amendment arguments, we  grant CAN's petition  for review on  the          other grounds stated.                                      BACKGROUND                                      BACKGROUND                    A.   The Regulatory Framework                    A.   The Regulatory Framework                         ________________________                    Operators of nuclear  power plants must have  a license          issued by the NRC.   That license describes the facility  and the          authorized  activities  that the  operator may  conduct.   If the          operator, called the "licensee," wishes to modify the facility or          take  actions not  specifically authorized  by  the license,  the                                         -2-          licensee  may  seek   an  amendment  to  its   license  from  the          Commission.  See 42 U.S.C.    2131-2133, 2237 (1988).                       ___                    Section 189a of the AEA provides that:                      In any proceeding under this chapter, for                      the  granting,  suspending,  revoking, or                      amending of  any license  or construction                      permit,   or   application   to  transfer                      control, and  in any  proceeding for  the                      issuance  or  modification of  rules  and                      regulations dealing  with the  activities                      of licensees, . . .  the Commission shall                      grant a hearing upon  the request of  any                      person whose interest  may be affected by                      the proceeding, and shall  admit any such                      person    as    a     party    to    such                      proceeding. . . .          42 U.S.C.   2239(a)(1)(A).  The Commission has issued regulations          specifically allowing a licensee to modify its facilities without          NRC supervision, unless the modification is inconsistent with the          license or involves an  "unreviewed safety question."  10  C.F.R.            50.59(a)(1).  If the  proposed change is inconsistent  with the          license, or does  involve an unreviewed safety question  (as that          term is  defined in  10 C.F.R.    50.59(a)(2)(ii)),  the licensee          must apply to  the Commission for a license  amendment, 10 C.F.R.            50.59(c), and  only then  are the  statutory hearing  rights of            189a triggered.                    The  procedures  for decommissioning1  a  nuclear power          plant are  set forth  principally in 10  C.F.R.     50.82, 50.75,          51.53,  and 51.95  (1990).   The formal  process begins  with the                                        ____________________          1   "Decommissioning" means those activities necessary "to remove          [a   facility]   safely   from   service  and   reduce   residual          radioactivity to a level that permits release of the property for          unrestricted use  and termination of  the license."  10  C.F.R.            50.2; 53 Fed. Reg. 24018, 24021 (June 27, 1988).                                           -3-          filing  of an  application by  the licensee,  normally after  the          plant has ceased permanent operations, for authority to surrender          its license and to decommission  the facility.  Five years before          the licensee expects to end  plant operations, the licensee  must          submit  a  preliminary  decommissioning  plan  containing a  cost          estimate  for  decommissioning  and an  assessment  of  the major          technical factors that could affect planning for decommissioning.          10 C.F.R.    50.75.  Within two years  after "permanent cessation          of operations" at the plant, but no  later than one year prior to          expiration  of  its  license,  a  licensee  must  submit  to  the          Commission an application  for "authority to surrender  a license          voluntarily and to  decommission the facility," together  with an          environmental  report   covering  the   proposed  decommissioning          activities.  10 C.F.R.     50.82, 50.83. This application must be          accompanied  by  the  licensee's  proposed decommissioning  plan,          which  describes  the  decommissioning   method  chosen  and  the          activities involved, and sets forth a financial plan for assuring          the availability of adequate funds for the decommissioning costs.          10  C.F.R.      50.82(b).    The  Commission   then  reviews  the          decommissioning  plan, prepares  either  an environmental  impact          statement  ("EIS")  or  an  environmental  assessment  ("EA")  in          compliance with NEPA, and gives notice to interested parties.  10          C.F.R.   51.95.  If the NRC finds the plan satisfactory (i.e., in                                                                   ____          accordance  with regulations  and  not  inimical  to  the  common          defense or the  health and safety of the  public), the Commission                                         -4-          issues a decommissioning order approving the plan and authorizing          decommissioning.  10 C.F.R.   50.82(e).                    The  Commission has stated that its regulations allow a          licensee to  conduct certain, limited  decommissioning activities          prior to obtaining NRC approval:                      [I]t  should  be noted  that  [10 C.F.R.]                        50.59 permits a holder of an  operating                                        _______________________                      license to  carry out  certain activities                      _______                      without prior Commission  approval unless                      these activities involve a change in  the                      technical specifications or an unreviewed                      safety question.  However,  when there is                      a change in  the technical specifications                      or an unreviewed safety question,   50.59                      requires  the  holder   of  an  operating                      license  to  submit  an  application  for                      amendment  to  the  license  pursuant  to                        50.90 . . . . [T]his  rulemaking do[es]                      not  alter  a  licensee's  capability  to                      conduct   activities   under       50.59.                      Although the Commission  must approve the                      _________________________________________                      decommissioning  alternative   and  major                      _________________________________________                      structural    changes   to    radioactive                      _________________________________________                      components of the facility or other major                      _________________________________________                      changes,  the licensee  may proceed  with                      _______                      some activities such  as decontamination,                      minor component disassembly, and shipment                      and  storage  of  spent  fuel  if   these                                                     __________                      activities are permitted by the operating                      _________________________________________                      license and/or   50.59.                      _______          53 Fed.  Reg. at  24025-24026 (emphasis  added).   The Commission          adhered to this  position from the issuance of  this statement in          1988 until 1993.  See, e.g.,  Long Island Lighting Co., 33 N.R.C.                            ___  ____   ________________________          at  73  n.5   ("Major  dismantling  and  other   activities  that          constitute decommissioning under the NRC's regulations must await          NRC approval of  a decommissioning plan"); Sacramento  Mun. Util.                                                     ______________________          Dist.  (Rancho Seco Nuclear Generating Station), 35 N.R.C. 47, 62          _______________________________________________          n.7 (1992) (same).                                         -5-                    B.   Factual Background                    B.   Factual Background                         __________________                    On February  27, 1992, licensee Yankee  Atomic Electric          Company  ("YAEC") announced  its  intention  to cease  operations          permanently  at Yankee NPS,  a nuclear  power plant  located near          Rowe, Massachusetts.  One month later, YAEC applied for a license          amendment  to  limit  its license  to  a  POL, a  possession-only          license, thus  revoking YAEC's  authority to  operate the  plant.          The  NRC published  a  Notice of  Proposed  Action informing  the          public of  its opportunity to  be heard on the  license amendment          request, pursuant  to    189a of the  AEA.   57 Fed.  Reg. 13126,          13140  (April  15,  1992).    There  were  no  hearing  requests;          accordingly, the  NRC issued  the requested  amendment to  YAEC's          license on  August 5, 1992.  57 Fed.  Reg. 37558, 37579 (Aug. 19,          1992).   In the cover letter accompanying YAEC's amended license,          the Commission reminded YAEC that "[t]he  NRC must approve . .  .          major  structural  changes  to   radioactive  components  of  the          facility . . . ."   See Issuance of Amendment No.  __ to Facility                              ___          Operating License No. DPR-3 (N.R.C. Docket No. 50-029).                    At  a meeting between  YAEC and NRC  representatives on          October 27, 1992, YAEC proposed that the NRC grant permission for          YAEC  to initiate  an  "early  component  removal  project"  (the          "CRP"), prior to  submission and approval of  its decommissioning                  _____          plan, and hence  prior to conducting an  environmental assessment          of decommissioning  at the site.   YAEC explained that  it wished          expeditious  commencement  of  this  early  CRP  because  of  the          unexpected  availability of space in the Barnwell, South Carolina                                         -6-          Low-level  Waste  Disposal  facility.     If  made  to  wait  for          submission and  approval of  a decommissioning  plan, YAEC  would          lose its chance to use the Barnwell facility.                    Pursuant  to this proposed CRP, YAEC would first remove          the four  steam generators and  the pressurizer from  the nuclear          reactor  containment,  remove  core  internals  from  the reactor          pressure   vessel,  and   transport  all  of   these  radioactive          components to  the Barnwell  facility.   After this  dismantling,          YAEC  proposed to  then cut  up the  nuclear reactor  core baffle          plate (which is too radioactive  to meet low-level waste criteria          and thus  cannot be dumped  in the Barnwell site),  and store the          pieces in canisters in the spent fuel pool for future delivery to          a U.S. Department of Energy waste site.  Finally, YAEC planned to          remove and transport the four  main coolant pumps to the Barnwell          site.    These  CRP  activities  would result  in  the  permanent          disposal  of 90% of the nonfuel, residual radioactivity at Yankee          NPS, all prior to approval of the actual decommissioning plan.                   _____                    On November  25, 1992,  YAEC sent a  letter to  the NRC          which  set forth  YAEC's  arguments as  to  how NRC  regulations,          Statements of  Consideration issued with  those regulations,  and          Commission precedents could be "interpreted" to allow approval of          the  early   CRP,  despite   the  fact   that  the   Commission's          interpretative  policy  at  that  time  explicitly  required  NRC          approval for major structural changes.                    During this period,  CAN also wrote two letters  to the          NRC,  on  November  2,  1992  and again  on  December  21,  1992,                                         -7-          requesting inter  alia that the  Commission halt or  postpone any                     _____  ____          and   all  dismantling   activities  at   Yankee   NPS  until   a          decommissioning  plan was  submitted,  moved  through the  public          notice-and-comment process, and approved.  In a December 29, 1992          letter  to CAN,  Kenneth  Rogers,  the  Acting  Chairman  of  the          Commission,  responded that  the  Commission was  "considering  a          public meeting  in the  vicinity of  the plant  early in 1993  to          provide   information  to   the  public   on   NRC's  review   of          decommissioning  in general and on expected site activities which          will occur prior to the licensee's submittal of a decommissioning          plan in late 1993."                    On January 14,  1993, following internal review  of its          decommissioning   policies,  the   Commission   issued  a   Staff          Requirements   Memo  ("SRM"),   setting   forth  a   significant,          substantial  change from  previously  held  agency  positions  on          decommissioning  activities,  and   essentially  adopting  YAEC's          proposed  "interpretation"   of  prior   agency  precedents   and          positions.    Without   any  explanation   for  the   substantial          modification, or any further analysis, the SRM stated:                      Notwithstanding      the     Commission's                      _______________                      statements  in  footnote 3  of  CLI-90-08                      [Long Island Lighting  Co., 33 N.R.C.  61                       _________________________                      (1991)]    and    the    Statements    of                      Consideration  for   the  decommissioning                      rules  at 53  Federal Register  24025-26,                      licensees should be  allowed to undertake                      any decommissioning activity (as the term                      "decommission"  is defined  in 10  C.F.R.                      50.2)  that does not -- (a) foreclose the                      release   of   the  site   for   possible                      unrestricted   use,   (b)   significantly                      increase decommissioning costs, (c) cause                      any significant environmental  impact not                                         -8-                      previously reviewed,  or (d)  violate the                      terms of the  licensee's existing license                      (e.g.,  OL,  POL,  OL  with  confirmatory                      shutdown order  etc.) or 10  C.F.R. 50.59                      as applied to the existing license. . . .                      The  staff may  permit  licensees to  use                      their  decommissioning   funds  for   the                      decommissioning    activities   permitted                      above  . .  .,  notwithstanding the  fact                                      _________________________                      that their decommissioning plans have not                      _________________________________________                      yet been approved by the NRC.                      ____________________________          Shortly  after the Commission  issued this SRM,  YAEC advised the          NRC that  it planned  to begin its  CRP activities  in accordance          with this new policy.2                    On June  30, 1993,  the Commission  issued another  SRM          reiterating its new  decommissioning policy, and stating  that it          had voted to formally amend 10 C.F.R.   50.59 to reflect this new          position.   This  proposed rulemaking  is  still underway.    The          Commission also stated that approval of a decommissioning plan is          not an action  that triggers hearing rights  under   189a  of the          AEA,  but that  the Commission  staff  could, in  its discretion,          formulate an  informal hearing  process for  decommissioning plan          approval.                    On September 8, 1993, CAN again wrote to the NRC, again          requesting  a  hearing  on the  CRP  at  Yankee  NPS.   CAN  also          generally  alleged that  the  NRC  was in  violation  of its  own          regulations,  and in violation  of "the rule  making process," by          allowing a licensee  to engage in a CRP  without prior Commission                                        ____________________          2    Later,  YAEC  submitted  a  decommissioning  plan, which  is          currently  under NRC  review.   YAEC  completed most  of the  CRP          activities, however, before it ever submitted its decommissioning          plan  to  the  Commission,  and  well  before  any  environmental          assessment was performed.                                         -9-          approval.   The Commission  responded to  these allegations  in a          letter dated November  18, 1993, stating that CAN  had "failed to          identify the proposed action that might be taken by the NRC Staff          that requires the offer of a hearing."                    The next  day, CAN filed  a petition for  agency review          under 10 C.F.R.    2.206,3 requesting that  the NRC halt the  CRP          activities  pending an  investigation by the  Inspector General's          office.   In the petition,  CAN reiterated its position  that the          CRP  constitutes decommissioning,  and that the  NRC was  thus in          violation of  its own regulations  in allowing CRP  activities at          Yankee NPS prior to approval of a decommissioning plan.   The NRC          responded  by  letter  dated December  29,  1993,  explaining its          policy change as set forth in the SRMs, and concluding that CAN's          petition  "does not  provide any  new  information regarding  why          public  health  and safety  warrants  suspension of  the  CRP and          therefore does not meet the  threshold for treatment under 10 CFR          2.206."                    After  a flurry  of letters,  in  which CAN  repeatedly          requested  formal  hearings   on  the  CRP  and   the  Commission          consistently denied  these requests on  the grounds that  the CRP          was inaccord withthe newpolicy, CANfiled thispetition forreview.4                                        ____________________          3  Under  10 C.F.R.    2.206, members of  the public may  request          agency enforcement action against a licensee that is allegedly in          violation of an NRC regulation or requirement.          4   In April 1993,  CAN also filed a  motion in the United States          District  Court for  the  District  of  Massachusetts  seeking  a          temporary  restraining order  to halt  the CRP  activities.   The          district court  dismissed the action  for lack of  subject matter          jurisdiction.   Citizens Awareness  Network v. NRC,  854 F. Supp.                          ___________________________    ___                                         -10-                                  STANDARD OF REVIEW                                  STANDARD OF REVIEW                    We review agency actions and decisions with substantial          deference, setting  them aside  only if  found to be  "arbitrary,          capricious,  an  abuse   of  discretion,  or  otherwise   not  in          accordance with  the law."   5 U.S.C.   706(2)(A);  Motor Vehicle                                                              _____________                                        ____________________          16,  18-19 (1994).   In  so  doing, however,  the district  court          wrote:                      The  court  makes  this decision  with  a                      heavy heart.   The  plaintiffs have  been                      diligently attempting for months to get a                      hearing   on   the   appropriateness  and                      competence of the NRC's actions.  Many of                      them  live   near   the   site   of   the                      decommissioned nuclear  plant.   They and                      their families are  the most directly  at                      risk if the job of removing  contaminated                      materials is bungled. . . . Not only have                      the    plaintiffs    been    denied   the                      opportunity to present their concerns and                      to  hear the  response of  the  NRC at  a                      formal hearing, they have not as yet even                      been  afforded a forum  in which to argue                      their entitlement to a hearing.  They had                            ___________                      no incentive  to seek a  hearing when the                      NRC originally issued the POL, because at                      that time it was the policy of the NRC to                                   ___                      require   final    approval   and    NEPA                      compliance   before   authorizing   early                      component removal.  Months later, the NRC                      now concedes, this policy changed and the                      NRC  decided to  view  the POL  as itself                      authorizing   early   component   removal                      without more.   Requests  for hearing  at                      this point were denied. . . . This course                      of   conduct    suggests   a    concerted                      bureaucratic effort to thwart the efforts                      of local  citizens to  be heard  about an                      event that vitally affects them and their                      children. .  . .  The prospect  that this                      tactic may  be used  nationally, as  more                      nuclear  plants shut down,  . . .  is, to                      put it mildly, disquieting.          Id. at 19 (emphasis in original).          __                                         -11-          Mfrs. Ass'n v. State Farm Mut. Ins. Co., 463 U.S. 29,  41 (1983).          ___________    ________________________          The scope of this review is narrow; a court should not substitute          its judgment for that of the agency, and agency decisions will be          upheld so long as they "'do not collide directly with substantive          statutory commands and so long as procedural corners are squarely          turned.'" Adams v.  EPA, 38 F.3d 43, 49  (1st Cir. 1994) (quoting                    _____     ___          Puerto Rico  Sun Oil Co. v. EPA, 8 F.3d  73, 77 (1st Cir. 1993)).          ________________________    ___          This  deference is especially  marked in technical  or scientific          matters within the  agency's area of expertise.  Id.                                                           __                    While  this is a highly deferential standard of review,          it is  not  a  rubber  stamp; in  order  to  avoid  being  deemed          arbitrary  and capricious, an  agency decision must  be rational.          Id.; Puerto Rico  Sun Oil Co., 8  F.3d at 77.   Moreover, when an          __   ________________________          administrative  agency   departs  significantly   from  its   own          precedent, "it must confront  the issue squarely and  explain why          the departure is reasonable."  D vila-Bardales v. INS, 27 F.3d 1,                                         _______________    ___          5 (1st Cir. 1994).  This is not to say that agencies must forever          adhere to their precedents; agencies may "refine, reformulate and          even reverse  their precedents in  the light of new  insights and          changed circumstances."  Id.  See also Rust v. Sullivan, 500 U.S.                                   __   ________ ____    ________          173, 186-87 (1991).  An agency changing its course must, however,          supply a reasoned  analysis for the change.   Motor Vehicle Mfrs.                                                        ___________________          Ass'n,  463 U.S. at 42;  Puerto Rico Sun  Oil Co., 8  F.3d at 77.          _____                    ________________________          With these  principles in mind,  we turn  to the merits  of CAN's          petition.                                       ANALYSIS                                       ANALYSIS                                         -12-                    CAN  raises three  principal  arguments.    First,  CAN          contends that  the NRC's  refusal to grant  CAN a  formal hearing          before  allowing YAEC  to conduct  decommissioning constitutes  a          regulatory  taking of  their  property  without  due  process  or          compensation, denies CAN members their right to due process under          the Fifth  Amendment, and  violates the  hearing requirements  of            189a of the AEA.   Second, CAN argues  that the Commission  has          violated NEPA  by allowing YAEC  to accomplish almost 90%  of its          decommissioning  activities before  conducting any  environmental          assessment.   Finally, CAN  contends that  the NRC's  unexplained          change  in its decommissioning policy was irrational and contrary          to  its own  duly-promulgated regulations,  in  violation of  the          procedural requirements of the APA.  We address these contentions          in reverse order.                    A.   The NRC's Change In Policy                    A.   The NRC's Change In Policy                         __________________________                    CAN  argues that  the  Commission's significant  policy          shift, manifested in its two Staff Requirements Memos, improperly          revoked duly-promulgated Commission  regulations, interpretations          and precedents, without  the benefit of rulemaking  procedures or          even  a rational explanation for the change.  By allowing YAEC to          commence  the CRP  activities notwithstanding its  own precedents          and regulations, CAN contends,  the Commission acted  arbitrarily          and  capriciously, in  violation of the  APA.  In  defense of the          unexplained  change  in  its   decommissioning  policy,  the  NRC          maintains that the former policy had never been incorporated into                                         -13-          the regulations themselves,  and, in any case,  that agencies are          free to alter their interpretations of their own regulations.5                    While  this is certainly  true, any such  alteration or          reversal must be accompanied by some reasoning -- some indication          that  the shift  is  rational, and  therefore  not arbitrary  and          capricious.   Puerto Rico Sun Oil Co., 8 F.3d at 77-78.  See also                        _______________________                    ________          Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Bd. of  Trade, 412          ___________________________________    _____________________          U.S.  800, 808  (1973)("Whatever the  ground  for the  [agency's]          departure from prior norms, . . . it must be clearly set forth so          that the reviewing court may understand the basis of the agency's          action.").  Courts should not  attempt to supply a reasoned basis          for  the action  that the  agency itself  has  not given.   Motor                                                                      _____          Vehicle Mfrs.  Ass'n,  463 U.S.  at  43.   While  this is  not  a          ____________________          difficult standard to meet, the Commission has not met it here.                    The prior Commission  policy regarding decommissioning,          embodied in 10 C.F.R.    50.59 and explicated in the Commission's          published  Statement of Consideration, required NRC approval of a          decommissioning  plan  before  a  licensee  undertook  any  major          structural  changes to  a facility.   This  policy was  developed          through a  lengthy notice  and comment  period, with  substantial          public participation.  See 53 Fed.  Reg. 24018, 24020 (a total of                                 ___                                        ____________________          5  We are baffled by the Commission's assertion that "CAN has not          challenged this  modification of NRC  policy," as we  count three          pages of argument  in CAN's brief devoted to  this precise issue.          Nor  can the Commission  claim that CAN did  not raise this issue          prior to filing this petition for review.  In both  its September          8, 1993 letter to the NRC and its 2.206 enforcement petition, CAN          alleged  that  the  Commission  was   in  violation  of  its  own          regulations and of the "rule making process."                                           -14-          143 individuals  and organizations submitted comments on proposed          rule).   The Commission  adhered to this  policy for  almost five          years,  reiterating its  position in  at  least two  adjudicatory          decisions.   Then, rather suddenly, the Commission circulated two          internal  staff  memos  that  completely  reversed  this  settled          policy,  without  any  notice  to  the  affected  public.    More          troubling,  however, was the  Commission's failure to  provide in          those memos,  or anywhere  else, any  justification or  reasoning          whatsoever for the change.   The memos did not set  forth any new          facts, fresh  information, or  changed circumstances  which would          counsel the  shift.  Nor  did they provide any  legal analysis of          how the new policy comported  with, or at least did  not conflict          with, existing  agency  regulations.   With nothing  more than  a          breezy  "notwithstanding," the  Commission  abruptly disposed  of          five  years'  worth  of  well-reasoned,  duly-promulgated  agency          precedent.                    Moreover, the  NRC's actions are inconsistent  with the          plain terms of the AEA, the NRC's enabling statute, which provide          that "in any proceeding for the issuance or modification of rules                                                      ____________          and regulations dealing  with the activities of licensees,  . . .          the  Commission shall  grant a  hearing upon  the request  of any          person  whose interest may be affected  by the proceeding. . . ."          42 U.S.C.    2239(a)(1)(A)  (emphasis added).    While the  NRC's          policy  shift involved an  interpretation of its  regulation, and          not the regulation  itself, it was an interpretative  policy that          provided  a great  deal  of substantive  guidance  on the  rather                                         -15-          ambiguous language of the regulation, by specifically delineating          the  permissible activities  of  licensees.   We  think that  the          statute's  phrase   "modification  of   rules  and   regulations"          encompasses  substantive interpretative  policy changes  like the          one  involved  here,  and therefore  that  the  Commission cannot          effect such  modifications without complying  with the  statute's          notice  and hearing provisions.   See Natural  Resources, Etc. v.                                            ___ ________________________          NRC, 695 F.2d 623, 625  (D.C. Cir. 1982)("Fair notice to affected          ___          parties requires  that the Commission not alter  suddenly and sub                                                                        ___          silentio settled interpretations of its own regulations.").6          ________                    Finally,  we  agree  with  the   petitioners  that  the          Commission's new policy  appears utterly irrational on  its face.                                                   __________          By  allowing  licensees to  conduct  most,  if  not all,  of  the          permanent  removal and  shipment  of  the  major  structures  and          radioactive components  before the submittal of a decommissioning          plan,  it appears  that the  Commission  is rendering  the entire          decommissioning plan  approval process  nugatory.   Why should  a          licensee be required to submit such a plan if its decommissioning          is  already irreversibly  underway?   Why  offer  the public  the          opportunity to be heard on a proposed decommissioning plan if the          actual  decommissioning  activities are  already  completed?   In                                        ____________________          6   The Commission points out that in  June 1993 it held a public          meeting, attended by several  CAN members.  Although the  meeting          was ostensibly  to address  the community's  questions about  the          decommissioning activities at  Yankee NPS, the transcript  of the          meeting  indicates   that  the   NRC  representatives   carefully          sidestepped the few  questions raised about the recent  change in          Commission policy  regarding decommissioning.   We  do not  think          that  this  type  of  forum   or  proceeding  meets  the  hearing          requirements of the AEA.                                         -16-          short,  the Commission's  new  decommissioning  policy  seems  to          render any  regulatory oversight  of the  decommissioning process          moot.  Perhaps  a rational basis  for this policy exists,  but we          cannot see one, and the Commission has not provided one.                    The Commission's failure to provide any explanation for          its seemingly irrational change in policy  renders its new policy          arbitrary   and  capricious,  and  not  in  accordance  with  the          requirements of 42  U.S.C.   2239(a)(1)(A).   We therefore remand          the  issue  of the  NRC's  change in  decommissioning  policy for          further  proceedings,  in  accordance   with  the  AEA's  hearing          requirements and this opinion.                    B.   Petitioner's NEPA Arguments                    B.   Petitioner's NEPA Arguments                         ___________________________                    CAN  also  contends  that the  Commission's  irrational          interpretation  of  its  regulations  has  led  to  the  agency's          permitting YAEC  to accomplish  over 90%  of the  decommissioning          activities at Yankee  NPS prior to conducting  any EA or EIS,  in          violation  of  NEPA,  42  U.S.C.     4332.7    In  response,  the                                        ____________________          7   The National  Environmental Policy Act,  42 U.S.C.    4321 et                                                                         __          seq.,  requires all  federal  agencies,  including  the  NRC,  to          ___          prepare    a   "detailed    statement,"   containing    specified          environmental  information,  for   all  proposed  "major  federal          actions  significantly  affecting   the  quality  of   the  human          environment."  42  U.S.C.   4332 (2)(C).   When the NRC plans  to          issue a license  amendment or take some other  form of regulatory          action that requires NEPA compliance, the NRC will publish either          an  EA  stating  that  there  is no  significant  impact  on  the          environment from  the proposed action,  or an EIS,  reviewing the          impact  of  the proposed  action  and listing  alternatives.   10          C.F.R.    51.20,  51.21.  When approving a  licensee's request to          decommission,  the NRC prepares either a supplemental EIS for the          post-operating  license  stage,  or  an  EA  updating  the  prior          environmental review for  the facility, as it  deems appropriate.          10 C.F.R.   51.95(b).                                         -17-          Commission claims  that the  CRP activities  do not  constitute a          "major  federal   action"  triggering   NEPA  compliance.     The          Commission  explains  that it  did  not actively  permit  YAEC to          initiate  CRP  activities;  rather,  it "simply  reviewed  YAEC's          implementation of the CRP, as a part of its everyday oversight of          its licensee's activities, and found no reasons to interfere with          YAEC's plans."  Because mere "regulatory oversight, as opposed to          active permission, does  not implicate NEPA," the  NRC argues, no          EA or EIS was required.                    This  argument is completely  devoid of merit.   First,          the  Commission  holds  in  trust  certain  funds  set  aside  by          licensees, including YAEC, to finance decommissioning activities.          42 U.S.C.   2232(a).  The Commission therefore had to approve the          release of these  set-aside funds in order to  finance YAEC's CRP          activities.      See   Letter  from   Morton   B.   Fairtile  re:                           ___          Decommissioning Funds, N.R.C. Docket No. 50-029 (April 16, 1993).          In essence, the Commission had  to actively permit the release of                                             _______________          funds, or YAEC could not have initiated  the CRP.  Far from being          "mere oversight," we think the Commission's approval of financing          certainly constitutes its active permission of the CRP.   Second,          it is undisputed  that decommissioning is  an action which,  even          under the Commission's new policy, requires NEPA  compliance.  10          C.F.R.    51.95(b).   In "advising"  YAEC that it  could initiate          decommissioning prior  to submitting a decommissioning  plan, the          NRC effectively granted  YAEC permission  to commence  activities          normally conducted after decommissioning plan approval, including                             _____                                         -18-          the  removal  and  storage  of  almost  all  of  the  radioactive          components.     This  permission,   in  turn,  allowed   YAEC  to          decommission  its facility without the benefit of NEPA compliance          by the Commission.                     Regardless  of the label  the Commission places  on its          decision to release the necessary  funds to YAEC and "advise" the          licensee  to go  ahead with  its  CRP, it  was effectively,  even          explicitly, permitting  YAEC to  decommission the  facility.   An          agency  cannot  skirt   NEPA  or  other  statutory   commands  by          essentially exempting a licensee  from regulatory compliance, and          then simply labelling its decision "mere oversight" rather than a          major  federal action.   To  do  so is  manifestly arbitrary  and          capricious.                     We note that  the Commission's arguments on  this issue          are  implicitly  predicated on  the assumed  validity of  its new          interpretative  policy.   As  we  have  explained,  however,  the          Commission has  failed to  provide any  rational explanation  for          this  policy, thus  rendering it arbitrary  and capricious.   The          Commission therefore cannot rely on its new policy as a basis for          its  decision that  NEPA  compliance  was  unnecessary  prior  to          decommissioning at  Yankee NPS.   Accordingly,  we find that  the          Commission's action  in  allowing YAEC  to  complete 90%  of  the          decommissioning at Yankee NPS prior to NEPA compliance lacked any          rational basis, and was thus arbitrary and capricious.  We remand                                         -19-          this issue to the Commission  for actions in accordance with this          holding.8                    C.   Petitioner's Remaining Arguments                    C.   Petitioner's Remaining Arguments                         ________________________________                      1.  Petitioner's Fifth Amendment Arguments                      1.  Petitioner's Fifth Amendment Arguments                          ______________________________________                    CAN contends that because the property interests of its          members  have  been  "invaded  by  radiation  due  to  the  NRC's          regulatory  decisions concerning  the decommissioning"  of Yankee          NPS, the  NRC's actions constitute  a regulatory taking  of their          property  in violation of the Fifth Amendment.  We need not dwell          on this  argument, however,  as CAN has  not stated  a cognizable          takings claim.   Beyond its  general statement that  its property          interests have been "invaded" by radiation, CAN has not explained          or argued even  generally how this is  so, nor does it  offer any          factual support  for its claims  regarding radiation.9   CAN also          does  not  seek  compensation for  any  alleged  invasion of  its          property  interests,  but simply  wishes  a  hearing  on the  CRP          activities.    Given the  sparsity  of  its allegations  and  the                                        ____________________          8  We recognize that this holding comes too late to  prevent much          of  the  CRP activity.    There remains,  however,  a significant          amount  of radioactive material and structures  at the Yankee NPS          site, the removal  of which will continue to  affect CAN members.          This  continued removal will undoubtedly continue to pose health,          safety  and   environmental  questions,  thereby   requiring  NRC          oversight and  NEPA compliance.    CAN's arguments on  this point          are therefore not moot.           9  In  its brief,  CAN does  point to  the statement  made in  an          affidavit by CAN member Will Sparks, describing the NRC's actions          as "a form  of invasion, like have [sic] a stranger in the house,          like   being  burglarized."    Even  assuming  that  Mr.  Sparks'          affidavit is properly  part of the record in  this petition, this          statement is simply insufficient to support a broad takings claim          like the one put forth here.                                          -20-          complete  lack  of  argument  or factual  support  for  its  bare          assertion, we see no reason  to depart from the well-settled rule          in this circuit that "issues adverted to in a perfunctory manner,          unaccompanied  by  some effort  at  developed  argumentation, are          deemed waived."   United States v. Zannino,  895 F.2d 1, 17  (1st                            _____________    _______          Cir. 1990).   "It  is not  sufficient for  a party  to mention  a          possible argument in the most  skeletal way, leaving the court to          .  . . put  flesh on  its bones."   Id.  Consequently,  we reject                                              __          CAN's takings claim.                    Nor do we find any merit in CAN's rather vague allusion          to  a more general Fifth Amendment  argument, presumably that the          NRC's  actions deprived its members  of life, liberty or property          without due  process of  law.  This  contention suffers  from the          same deficiencies as CAN's takings claim, being overbroad, vague,          and unaccompanied by factual  support or analysis.   Moreover, as          the NRC points out, "generalized health, safety and environmental          concerns do  not constitute  liberty or  property subject  to due          process protections."   West Chicago, Ill. v. NRC,  701 F.2d 632,                                  __________________    ___          645 (7th Cir.  1983).  We simply cannot  fashion a constitutional          violation  out  of  whole cloth  on  the  basis  of the  kind  of          nonspecific and  unsupported  allegations  raised  by  CAN  here.          Accordingly, we reject  CAN's allegations that the  NRC's actions          violated its members' Fifth Amendment due process rights.                      2.  Petitioner's Atomic Energy Act Arguments                      2.  Petitioner's Atomic Energy Act Arguments                          ________________________________________                    CAN  contends  that Commission  approval of  YAEC's CRP          violated AEA section 189a, which requires the Commission to grant                                         -21-          a  hearing upon  request by  any  party in  interest whenever  it          undertakes any proceeding to "amend" a license.  42 U.S.C.   2239          (a)(1)(A).  CAN argues that Commission approval of YAEC's CRP was          a de facto  "amendment" of YAEC's POL because  it authorized YAEC            __ _____          (as well as other extant  and prospective licensees) to engage in          materially  different conduct  not  permitted under  the pre-1993          POL,   namely,  major  component  dismantling  absent  prior  NRC          approval of a final decommissioning plan. See 53 Fed. Reg. 24018,                                                    ___          24020 (1988).  The   Commission  counters   that  its   so-called          "approval"  of the  CRP cannot  be deemed  a license  "amendment"          proceeding  since the language  requiring NRC approval  for major          structural  changes was never  expressly incorporated into YAEC's          license.10     Instead,   it   says,  the   decommissioning  plan          procedure,  which  is subject  to  procedural protections  (e.g.,                                                                      ____          public  hearings,   preparation  of   environmental  assessments)          entirely different  from those  designated in  section 189a,  was          __________________          described only  in a cover  letter accompanying the  license, and          the Commission has never treated the decommissioning plan process          as "amendatory" for section 189a purposes.                    We reject the Commission's claim that its abrupt policy          change  in  1993, to  the  extent it  substantially  enlarged the          authority of an extant licensee (YAEC) retroactively, nonetheless                          ______                                        ____________________          10  As a threshold  matter, the Commission repeats its contention          that no   2239(a)(1)(A) "proceeding" occurred, because it took no          affirmative action  and merely  refused to  intervene to  prevent          YAEC from undertaking the CRP.   For the reasons previously noted          in our discussion of the  Commission's NEPA violations, see supra                                                                  ___ _____          at 17-18, we disagree with this characterization.                                         -22-          did not  entitle CAN to the  requested section 189a  hearing.  As          the Commission  itself  concedes,  by  its nature  a  license  is          presumptively  an exclusive  -- not  an  inclusive --  regulatory                            _________          device.  See Brief for  Respondent at 5 ("Th[e] license describes                   ___          the facility  and the authorized activities that the operator may          conduct under the license.  If the holder of the licensee (sic) .          . . wishes to modify the facility or to take actions that are not                     ______________________________________________________          specifically  authorized under the license, the licensee may need          __________________________________________          to  seek a change or  'amendment' to the  terms of the license.")          (emphasis   added).     The  sophistical   suggestion  that   the          decommissioning plan procedures were never formally  incorporated          into  YAEC's POL license  ignores licensing realities.   Licenses          customarily delineate the types of regulated conduct in which the          licensee   may  engage.    Regulated  conduct  which  is  neither          delineated,   nor   reasonably  encompassed   within   delineated          categories   of   authorized   conduct,   presumptively   remains          unlicensed.   YAEC's  original license  did not  authorize it  to          implement major-component dismantling  of the type undertaken  in          the CRP.                    Thus, if section 189a is to serve its intended purpose,          surely it  contemplates that  parties in  interest be afforded  a          meaningful opportunity to request a hearing before the Commission                                                      ______          retroactively reinvents the terms of an extant license by voiding          _____________          its implicit limitations on the licensee's  conduct.  See Skidgel                                                                ___ _______          v. Maine Dep't of Human Servs., 994 F.2d 930, 937 (1st Cir. 1993)             ___________________________          (statutory language must be interpreted in context, including its                                         -23-          legislative purpose).   The claimed right to deny  such a hearing          request undermines  the integrity of  the licensing process.   At          the time  YAEC obtained its  original license, and again  when it          amended the  original  license to  a  POL, parties  in  interest,          including  CAN, presumably  refrained  from  any  request  for  a          section 189a hearing --  to which they would  unquestionably have                                                        ______________          been  entitled --  in  reasonable  reliance  upon  such  implicit          limitations in YAEC's license.                    The  Commission  correctly  points  out  that  we  have          observed that the term "amend," as used in section 189a, is to be          construed  quite literally.  See Commonwealth  of Mass. v. United                                       ___ ______________________    ______          States  Nuclear Regulatory Comm'n, 878  F.2d 1516, 1522 (1st Cir.          _________________________________          1989).   But  we were  careful to  note as  well that  it is  the          substance of  the NRC  action that  determines  entitlement to  a          _________          section 189a hearing, not the particular label the NRC chooses to                                ___          assign to its action.   Id. at 1521 (citing Columbia Broadcasting                                  ___                 _____________________          Syst. Inc. v. United States, 316 U.S. 407, 416 (1942)).11          __________    _____________                                        ____________________          11   Moreover,  Commonwealth is  readily  distinguishable on  its                          ____________          facts.    There,   the  NRC  decision  approving   resumption  of          operations  by  a  licensee, which  had  shut  down its  facility          voluntarily  prior to any formal suspension  or revocation of its          operating license  by the  NRC, did not  implicate section  189a.          Rather, the  NRC requirements  for  license "reinstatement"  were          simply  additional   interim  license  restrictions   --  imposed                  ___________________________________________          pursuant  to pre-existing Commission regulations -- none of which                       ____________          conflicted with, or  required the alteration of, any  term of the          original license.   Commonwealth, 878 F.2d at 1520-21 (citing and                              ____________          adopting rationale  in In re  Three Mile Island Alert,  Inc., 771                                 _____________________________________          F.2d 720  (3d Cir.  1985), cert. denied,  475 U.S.  1082 (1986)).                                     _____ ______          Thus,  the  operator obtained  no  greater authority  (literally,                                             _______          "license") than it  had before its license was  reinstated by the          NRC.   Id.  at  1520.   Even  though  the Commission  temporarily                 ___          exempted  the licensee from  one restriction generally applicable          to  other licensees,  the discretionary  exemption was  expressly                                         -24-                    By  contrast,   the  policy   change  adopted  by   the          Commission in  1993, relating  to "minor"  component dismantling,          was  in   no  sense   provisional.     Moreover,  it   undeniably          supplemented   the  operating   authority  of   extant  licensees          ____________          generally,  and YAEC in particular, which might henceforth engage          in major forms of component disassembly beyond the ambit of their          original licenses.  Prior to 1993, parties in interest reasonably          could presume that YAEC was not authorized to undertake this type          of CRP unless it submitted to the lapidary process of preparing a          final   decommissioning   plan   and   environmental   assessment          acceptable to the NRC, or it moved to amend its existing license.                                 _________________________________________                    Then,  in  1993,  the  Commission,  by ambiguous  fiat,          declared  that some forms of "major component disassembly" hence-          forth were to  be outside the license-amendment  process, whereas                ___________________          more "serious" types of component removal  were to remain subject          to  the amendment process.  See 10 C.F.R.    50.59.  In our view,                                      ___          however,  the   latter  provision   plainly  confirms   that  the          Commission had always  considered component disassembly,  similar          to that involved in YAEC's CRP, as action beyond the ambit of the          presumptive authority granted under the licenses it issued.                    The  Commission  elevates labels  over  substance.   It          would have us determine that a "proceeding" specifically aimed at          excusing a licensee  from filing a petition to  amend its license                                        ____________________          authorized and granted under pre-existing agency regulations, see                                       ____________                     ___          id. at 1521, so that parties in  interest were on notice from the          ___                                                      ________          time the license was granted  that NRC retained the discretion to          ____________________________          approve the limited exemption at any time in the future.                                         -25-          is not  the functional equivalent of  a proceeding to  allow a de                                                                         __          facto "amendment"  to  its  license.   As  this  construct  would          _____          eviscerate the very procedural protections Congress envisioned in          its  enactment  of  section  189a,  we  decline   to  permit  the          Commission to do by indirection  what it is prohibited from doing          directly.  See 42 U.S.C.    2239(a)(1)(A) (Commission must afford                     ___          hearing "in any proceeding  for the . .  . modification of  rules          and regulations dealing with the  activities of licensees.").  We          therefore hold that  CAN was entitled to a  hearing under section          189a in connection  with the NRC decision to  permit YAEC's early          CRP.                                      CONCLUSION                                      CONCLUSION                    For  the foregoing reasons, we grant CAN's petition for                                                   _____          review in  part, and  remand to  the  Commission for  proceedings                                ______          consistent with this opinion.                                         -26-
