<DOC>
[105 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:52635.wais]
S. Hrg. 105-918
NUCLEAR REGULATORY COMMISSION OVERSIGHT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
CLEAN AIR, WETLANDS, PRIVATE PROPERTY AND NUCLEAR SAFETY
AND THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED FIFTH CONGRESS
SECOND SESSION
__________
JULY 30, 1998
__________
Printed for the use of the Committee on Environment and Public Works
----------
U.S. GOVERNMENT PRINTING OFFICE
52-635 CC WASHINGTON : 1999
_______________________________________________________________________
For sale by the U.S. Government Printing Office
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20402
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED FIFTH CONGRESS
JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma HARRY REID, Nevada
CRAIG THOMAS, Wyoming BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas BARBARA BOXER, California
WAYNE ALLARD, Colorado RON WYDEN, Oregon
JEFF SESSIONS, Alabama
Jimmie Powell, Staff Director
J. Thomas Sliter, Minority Staff Director
------
Subcommittee on Clean Air, Wetlands, Private Property, and Nuclear
Safety
JAMES M. INHOFE, North Carolina, Chairman
TIM HUTCHINSON, Arkansas BOB GRAHAM, Florida
WAYNE ALLARD, Colorado JOSEPH I. LIEBERMAN, Connecticut
JEFF SESSIONS, Alabama BARBARA BOXER, California
(ii)
C O N T E N T S
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JULY 30, 1998
Page
OPENING STATEMENTS
Allard, Hon. Wayne, U.S. Senator from the State of Colorado...... 5
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island 3
Hutchinson, Hon. Tim, U.S. Senator from the State of Arkansas.... 7
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 1
Lieberman, Hon. Joseph I., U.S. Senator from the State of
Connecticut.................................................... 3
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 6
WITNESSES
Colvin, Joe F., president and CEO, Nuclear Energy Institute...... 30
Prepared statement........................................... 147
Responses to additional questions from Senator Inhofe........ 166
Diaz, Nils, Commissioner, Nuclear Regulatory Commission.......... 11
Prepared statement........................................... 144
Responses to additional questions from Senator Inhofe......101, 110
Fetter, Steven M., managing director, Global Power Group, Fitch
IBCA, Inc...................................................... 37
Prepared statement........................................... 200
Responses to additional questions from Senator Lieberman..... 201
Jackson, Shirley A., Chairman, Nuclear Regulatory Commission..... 9
Prepared statement........................................... 50-85
Responses to additional questions from Senator Inhofe........85-144
Jones, Gary, Associate Director, Energy, Resources and Science
Issues, Resources, Community and Economic Development Division,
General Accounting Office...................................... 33
Prepared statement........................................... 171
Responses to additional questions from:
Senator Inhofe........................................... 177
Senator Lieberman........................................ 176
Lochbaum, David, nuclear safety engineer, Union of Concerned
Scientists..................................................... 35
Letters.....................................................181-199
Prepared statement........................................... 179
Report, NRC's Regulatory Structure and Processes............. 195
Responses to additional questions from:
Senator Inhofe........................................... 199
Senator Lieberman........................................ 197
McGaffigan, Edward, Commissioner, Nuclear Regulatory Commission.. 11
Responses to additional questions from Senator Inhofe........ 111
Rhodes, James T., chairman and CEO, Institute of Nuclear Power
Operations..................................................... 31
Prepared statement........................................... 168
Responses to additional questions from Senator Lieberman..... 169
ADDITIONAL MATERIAL
Statements:
Biden, Hon. Joseph, U.S. Senator from the State of Delaware.. 49
Dodd, Hon. Christopher, U.S. Senator from the State of
Connecticut................................................ 50
(iii)
NUCLEAR REGULATORY COMMISSION OVERSIGHT
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THURSDAY, JULY 30, 1998
U.S. Senate,
Committee on Environment and Public Works, ,
Subcommittee on Clean Air, Wetlands, Private Property and
Nuclear Safety,
Washington, DC.
The subcommittee met, pursuant to notice, at 9 a.m. in room
406, Senate Dirksen Building, Hon. James Inhofe (chairman of
the subcommittee) presiding.
Present: Senators Inhofe, Allard, Sessions, Hutchinson,
Lieberman, and Chafee [ex officio].
OPENING STATEMENT OF HON. JAMES M. INHOFE,
U.S. SENATOR FROM THE STATE OF OKLAHOMA
Senator Inhofe. The subcommittee will come to order.
Today's subcommittee hearing will focus on the Nuclear
Regulatory Commission. This is the first oversight hearing that
we have held on the NRC in over 4 years. I know that we have
many issues to cover. This is kind of a pivotal point in our
history. We haven't been able to focus on the NRC as much as we
should since I've been chairman of this committee, primarily
because of the fact that we have had to concentrate on the
ambient air and wetland problems. There hasn't been time to get
into this, but I think this is a subject that has been
neglected.
In order to encourage growth in the industry, and this is
coming about at a very important time that I think when we talk
about the problems and we've been going through this thing of
ozone and particulate matter and yet we have a way to produce
energy that is clean and it is one now that I think we need to
concentrate on. I recognize that it's going to take several
years before we're able to really grow in this industry but our
country does rely on nuclear energy for 20 percent of its
electrical generation right now. If people are concerned about
reducing air pollution, then they must admit that we need a
viable nuclear industry and we must begin encouraging the
development of new nuclear facilities.
So I think that this is a very appropriate time to have
this meeting. There some things, some criticisms that I have
heard in terms of the performance of the NRC and yet right now,
the NRC is about to take on its most challenging task in years,
the relicensing of plants, and I'm doubtful that they are
currently up to the task and decisions sometimes take too long
and never seem to come to a conclusion.
I'd like to cite two examples which I'll be asking for
responses at the time we have questions that I believe we are
somewhat out of control in the regulatory process. The first
involves the transfer of a license for Plant Vogtle, the
company which owns the facility and transferred ownership from
one subsidiary to another. It didn't really change, it changed
from one subsidiary to another. All the personnel remained
unchanged and the only change is on paper. This process took 4-
1/2 years.
The second involves the proposed uranium enrichment
facility in Louisiana where a company 7 years and $30 million
trying to license a plant before giving up. The facility would
have used well-known technology that has been used in England
for 20 years. This should have been routine.
Both of these examples cause me great concern and to begin
the licensing renewal process, if the NRC and the licensing
boards take this long for these cases, then I'm convinced that
unless some drastic changes are made, the relicensing process
is doomed before we begin.
We'll have a good hearing today. I'm pleased we have
several members here and of course we have the Chairman of our
parent committee, Senator Chafee. I will recognize Senator
Chafee at this time.
[The prepared statement of Senator Inhofe follows:]
Prepared Statement of Hon. Jim Inhofe, U.S. Senator from the State of
Oklahoma
Today's subcommittee hearing will focus on the Nuclear Regulatory
Commission. This is the first oversight hearing we have held on the NRC
in over 4 years and I know that we have many issues to cover today.
We are at a pivotal point in the history of the nuclear industry.
We have a mature industry that over the years has provided safe and
environmentally friendly energy, much to the dismay of its biggest
critics. As we begin the twenty-first century, the industry is
beginning the relicensing process for their permits. Just this year the
first two nuclear plants have filed for a license renewal. Because of
this, the NRC is also at a pivotal point in its history, and we must
determine if it is capable of functioning in the next century or if it
needs an overhaul of its structure and function.
Over the last year and a half this subcommittee has spent the
majority of its time in Clean Air oversight, debating ozone,
particulate matter, and regional haze. Today we are examining a fuel
source with basically zero emissions. Our country relies on nuclear
energy for 20 percent of its electrical generation and if people are
concerned about reducing air pollution then they must admit that we
need a viable nuclear industry and we must begin encouraging the
development of new nuclear facilities. I am a realist, I do not expect
any new plants to begin construction in the next five years, but we
must begin to reform our regulatory process in order to encourage new
facilities in the next five to twenty years. If we do not begin today,
then we will never achieve the pollution reductions many want without
sacrificing our nation's economy.
In order to encourage growth in the industry we must reform the
NRC. We will hear a number of ``buzz'' words today on how the NRC is
reforming: phrases such as ``risk-informed, performance-based
standards'', ``stakeholder input'', and ``performance indicators''. The
trouble is these terms have been tossed around for years and we have
seen no real change at the NRC. I am interested in hearing from the
Commissioners and other witnesses on how we can ensure that real change
will take place.
The NRC is about to undertake its biggest task in years, the
relicensing of plants, and I am doubtful that they are currently up to
the task. Decisions at the Commission take too long and sometimes never
seem to come to a conclusion. I would like to cite two examples which I
believe show an out-of-control regulatory process.
1. The first involves the transfer of a license for Plant Vogtle.
The company which owes the facility transferred ownership from one of
its subsidiaries to another. All of the managers stayed the same and
all of the personnel stayed the same. The only change was on paper.
This process took 4 \1/2\ years.
2. The second involves the proposed uranium enrichment facility in
Louisiana. The company spent 7 years and $30 million trying to license
the plant before giving up. The facility would have used well-known
technology that has been used in England for 20 years. This should have
been routine.
Both of these examples cause me great concern as we begin the
license renewal process. If the NRC and the licensing boards take this
long for these cases then I am convinced that unless some drastic
changes are made, the relicensing process is doomed before we begin.
I hope today's hearing will begin to examine these issues and we
can begin a process of this committee working closely with the
Commission in the months ahead.
OPENING STATEMENT OF HON. JOHN H. CHAFEE,
U.S. SENATOR FROM THE STATE OF RHODE ISLAND
Senator Chafee. Thank you very much, Mr. Chairman.
I want to thank you and the Ranking Member for holding this
hearing today. I share your concern that we've been so
preoccupied with a host of other things--whether the Endangered
Species Act, the transportation legislation or Superfund--that
we haven't spent the time on this matter which you so wisely
have chosen today to embark upon.
The Nuclear Regulatory Commission has an important mission
and that is to ensure civilian uses of nuclear materials are
handled in a manner consistent with the public's health and
safety, environmental quality and national security.
Increasingly, however, the question has been whether or not the
NRC is carrying out its mission in a fair and thorough manner.
Some, including industry, say the agency is overregulating.
Others, including the GAO and other watchdog groups, say it is
not doing enough. This kind of criticism is not atypical for a
regulatory agency. I know Chairman Jackson is familiar with
that. This is an agency that oversees a major component of the
Nation's energy supply along with many other duties.
I hope, Mr. Chairman, today we can begin to make further
steps to improve the effectiveness of the NRC so as to allow
efficient industry operations while at the same time insuring
public safety and these need not be mutually exclusive.
I regret that I can't stay for the whole hearing but I
certainly am interested in this and want to commend you again
for what you're doing. I'll be following it closely and
appreciate what you've undertaken here.
Senator Inhofe. Thank you, Mr. Chairman.
Senator Lieberman?
OPENING STATEMENT OF HON. JOSEPH I. LIEBERMAN,
U.S. SENATOR FROM THE STATE OF CONNECTICUT
Senator Lieberman. Thanks, Mr. Chairman.
I join you and Senator Chafee in expressing interest in
this oversight process. Thank you for convening it. It was my
pleasure for a period of time earlier to serve as chairman of
this subcommittee and I appreciate very much the focus of the
subcommittee on the NRC because it's a critically important
agency of our government.
I can speak to you from personal experience from my own
State of Connecticut which is recent experience about the NRC.
We're just now emerging from what has been and certainly seemed
like a long, 3-year nightmare with respect to our four nuclear
power plants which were all down. We went from having among the
best run nuclear plants in the industry to having all of them
being placed on the NRC's watch list of the most problematic
plants.
During that time, I was supposed to do my own personal form
of oversight of the NRC led by Dr. Jackson and I must say I've
been impressed. The NRC undertook one of the most extensive
safety reviews ever of one of the plants which is known as
Millstone 3 and just this month the plant received approval to
restart.
The Chairwoman has also committed that there will be
extensive, continuing oversight of the Millstone 3 operation
and that review of Millstone 2 which is the next target of
inquiry will be equally intensive before any decision to
restart is made. Those two commitments mean a lot to the people
of my State and to me.
In addition to the extensive and intensive nature of the
review of the nuclear power plants in Connecticut, I do want to
put on the record here my appreciation that the NRC process was
a very fresh and open one. Dr. Jackson came to the State, spoke
to the residents who lived near the plant, the workers at the
plant, listened to them and made clear in every instance that
she had one overriding responsibility which was to ensure that
only safe nuclear power plants would be allowed to restart in
Connecticut.
In that context, I have watched the NRC come under recent
criticism both from some within the industry and some within
the Senate for what is described as overregulation. Some
critics apparently believe that the NRC seeks blind adherence
with the regulations that don't have safety significance. And
there are others in Connecticut and outside who think the
Commission has been too soft on the industry. As Chairman
Chafee said, that's the nature of the process here in
Washington.
Mr. Chairman, I am a supporter of nuclear energy and I say
that here and add that I am a supporter because I think it is
not only part of our current balanced American energy policy
but should be, and ultimately I think will have to be a part of
the future balanced American energy program for reasons for
energy independence as well as environmental protection,
including working to inhibit the onward movement of global
warming.
In order for there to be a place for nuclear power in
America's energy future, it's critical that we have a
regulatory operation that gives the public and those of us who
serve the public reason to maintain confidence in the safety of
nuclear power. That's why I think a strong and effective NRC is
so important.
I'm interested in the testimony today but certainly in my
recent experience in Connecticut with the Commission, I don't
see reason to conclude that the current NRC overregulates or
inspects or enforces too much, or it has adopted an overly
restrictive body of regulations. In fact, the fear in
Connecticut, until the recent experience, has been just the
opposite.
I think with the new safety initiatives undertaken under
Chairman Jackson, the NRC has moved toward regaining some of
the public confidence that is so important. Those initiatives
include limiting inappropriate use of enforcement discretion,
requiring utilities to verify whether they are operating in
accordance with their design basis, undertaking review of NRC
oversight of changes made by utilities without prior NRC
approval, improving the inspection process, paying increased
attention to the use of quantitative performance indicators and
reforming the senior management process. In fact, for better or
worse for Connecticut, I think many of those processes were
direct responses to what happened to nuclear power plants in
Connecticut.
I'd also mention something relevant, but somewhat
parenthetic to that--I appreciated that the NRC recently voted
in favor of requiring States consider the use of potassium
iodide, which can protect the residents against cancer in the
event of an accident, as part of their emergency planning. That
ends a long fight which I was privileged to become involved
with 4 years ago with our former colleague, Senator Alan
Simpson who had long advocated that this would happen.
While the NRC has taken some important steps forward,
obviously there's a need to continue improving its approach to
safety. A couple of years ago I requested a report from GAO and
I'm glad Mr. Chairman the representative of GAO will testify.
It was forwarded in May 1997 and the GAO then raised serious
concerns about instances in the past in which the NRC had
neither taken aggressive enforcement action nor held nuclear
plant licensees accountable for correcting their problems on a
timely basis.
The GAO also criticized the NRC for problems in the
inspection process such as not including timetables for the
completion of corrective action for not evaluating the
competency of the licensee's plant managers as part of the
ongoing inspection process.
The GAO also raised a concern that the NRC's regulations do
not provide the public with specific definitions and conditions
that define the safety of a plant and similar criticism has
been raised by scientific groups.
To her credit, I do think Chairwoman Jackson has responded
to most of the GAO recommendations positively and in a timely
manner. Therefore, I look forward to hearing from her and the
other witnesses today as we begin this effort to fulfill our
oversight responsibility toward this important agency and
hopefully to build public confidence not only in the operation
of the plants that are providing power around the country today
but to increase the confidence to a point where we might even
contemplate building more nuclear power plants in America
tomorrow.
I thank the Chair.
Senator Inhofe. Thank you, Senator Lieberman.
Senator Allard?
OPENING STATEMENT OF HON. WAYNE ALLARD,
U.S. SENATOR FROM THE STATE OF COLORADO
Senator Allard. Thank you, Mr. Chairman.
I would like to associate myself with your remarks and the
Chairman of the full committee and what he had to say this
morning.
I want to thank you for holding this hearing. There's been
a directive from the leadership in the Senate that committees
ought to be reviewing carefully those agencies under their
jurisdiction. Obviously, you've taken that very seriously. I
know a lot of chairmen in the Senate have taken the time to go
ahead and do these types of important reviews. So I think it's
commendable to you that you've taken on this responsibility.
I'm anxious to hear both from the industry as well as the
regulators. I want to see good science applied in the
regulatory process. I've looked at what's been happening here
in this country and I don't see much building of new plants, I
see what we have on-line as aging plants so we need to watch
carefully with aging technology because equipment wears out and
there obviously is some opportunity with the wearing out of
equipment for perhaps some increased risk. So I'm looking
forward to this testimony.
I also want to see a balance so that the regulators don't
get so carried away that they actually get too involved in the
day-to-day operation that it becomes impossible to provide a
fifth of the electrical energy that this country uses to meet
its needs. Personally, I want to see a balance in the way we
provide electricity to this country. I want to see a
combination of natural gas, a combination of coal-fired and
nuclear power plants and any other energy resources that we can
get out there. The more diffuse we keep the industry so we
don't have monopolies, I think the better off America will be
and the better off we will be competitively.
So I'm going to listen carefully to this testimony because
I want to make sure that we're not placing a regulatory burden
on the industry out there that doesn't warrant it based on
public health risks and perhaps some risk to the environment.
So, Mr. Chairman, I'm looking forward to the comments and
appreciate having an opportunity to serve with you on this
committee.
Senator Inhofe. Thank you, Senator Allard.
Senator Sessions?
OPENING STATEMENT OF HON. JEFF SESSIONS,
U.S. SENATOR FROM THE STATE OF ALABAMA
Senator Sessions. Thank you, Mr. Chairman.
I'd like to associate myself with the remarks I've heard so
far. It seems to me without any doubt that nuclear power is a
critical part of our energy needs in America. This committee
you chair deals with clean air. We talk on a regular basis
about how to reduce particulate and other matter discharges
into the air as a result of our need to produce power. Nuclear
power produces no discharges into the air; it is a clean source
of energy and it produces 20 percent of the electric power in
America.
We have no plans, it seems to me, whatsoever, to re-
energize that source of power, we have no new plants that
appear to be on the way to being on the way to being brought on
line and as a result, we can certainly predict that we're going
to have to be using more fossil fuels instead of nuclear
energy. One of the reasons for that I think is a genuine
perception among leaders in private industry that you're
overregulated; if you try to build a new plant, the inspection
process could be so burdensome that it could not be economical.
Maybe there are other factors in making it economical also. I
know there are in oil and gas and in prices.
I think we've got to re-energize this energy source; we've
got to expect our Nuclear Regulatory Commission to be a
positive force in developing ways to allow this Nation to
continue to develop nuclear power. The rest of the world is.
All over the world, they're doing this. We're not doing it.
We're falling behind. It will have the potential of degrading
our air and I don't believe among reasonable experts there is
disagreement about the belief that there is excessive
regulation in some areas that provide no safety benefit. That
is a genuine perception I've heard throughout.
I'm new to this body; I'm not an expert in nuclear energy.
Just as a citizen, it seems to me quite plain, we ought to be
expanding our nuclear program like the rest of the world rather
than having it dry up and disappear. I'd like to be a part of
that. I think it's good for America. I think this Commission
ought to be leading in that regard.
Mr. Diaz, I appreciate some of your remarks. I just read
your testimony and I share much of what you say and I thank you
for adding your comments to the Chairman's which I respect
also.
Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Senator Sessions.
Senator Hutchinson?
OPENING STATEMENT OF HON. TIM HUTCHINSON,
U.S. SENATOR FROM THE STATE OF ARKANSAS
Senator Hutchinson. Thank you, Mr. Chairman.
I have a longer statement I would like to have included in
the record without objection.
[The prepared statement of Senator Hutchinson follows:]
Prepared Statement of Hon. Tim Hutchinson, U.S. Senator from the State
of Arkansas
Thank you, Mr. Chairman. I would also like to extend my thanks to
the panel members for taking time out of their busy schedules to be
with us. I am extremely pleased that we are having this hearing today.
Everyone here knows of the great importance of the Nuclear Regulatory
Commission, and I believe that it has been far too long since we have
taken a close look at what is working well at the NRC and what we can
improve upon.
I see today's hearing not as an end in and of itself, hut as a
starting point for dialog and reform that this Subcommittee and the
entire Congress will continue to followup on in the future.
Accounting for approximately 20 percent of the nation's electric
power generation, nuclear power is generated in all but 18 states. In
my home state of Arkansas, nuclear power accounts for nearly a third of
all electricity generated.
Nuclear power has the potential to become even more important to
the United States in the future. While scientists remain divided as to
whether human activities are causing global warming, it is clear that
nuclear power would be a, if not the only, viable alternative to fossil
fuel generated power. Currently we derive 55 percent of our electricity
just from coal and any shift away would require an increase in output
from another source. The experiences of countries such as France and
Sweden demonstrate that nuclear power could fill this void.
As the independent agency charged with ensuring the safety of
nuclear plants, the NRC plays a vital role in nuclear power generation.
Because of the great importance of nuclear power and the obvious need
to maintain stringent levels of protection and safety, I am deeply
concerned about the manner in which nuclear plants are currently being
evaluated. I am worried about reports that assessments of nuclear
plants are not being administered in a consistent and objective manner.
When assessments are made not on the basis of objective criteria,
but on subjective and arbitrary measures, the very ability to the NRC
to tell the difference between a safe and unsafe plant is caller! into
question.
I believe we must do all we can to ensure that nuclear power is
generated in a safe manner which protects the health of the public. I
am not in favor of any relaxation or easement of safety standards.
Quite to the contrary, I believe that nuclear plants should be required
to maintain an extremely high standard of safety. The NRC must do a
better job, however, of assessing plants in a consistent and fair
manner.
One of the most often heard criticisms of the NRC is that decisions
take entirely too long to be made. I looked up the Nuclear Regulatory
Commission in my U.S. Government Manual, and found that one of the
Congressionally charged duties of the NRC is to make ``timely
regulatory judgments''.
I understand that in response to recent criticisms the NRC has been
examining ways in which it can do better job of regulating the nuclear
industry. In testimony submitted for this hearing Chairman Jackson
states that the NRC agrees that it must become more efficient and
accelerate the pace of decisionmaking. I commend the NRC for its
willingness to consider new ways to improve itself. I would caution,
however, that such openness to criticism is meaningless, unless real
change actually occurs.
I am confident that with the input of the NRC, the nuclear
industry, other interested groups and of Congress, we will be able to
effectively address those problems that will be discussed today. Again,
I would like to thank the Chairman for calling this hearing today and I
look forward to hearing the testimony of the witnesses.
Senator Hutchinson. I also want to commend you. I think
it's been far too long since we've taken a close look at the
NRC, what's working and what's not working, where we have
improvements and I think you deserve a lot of credit for
calling this hearing.
I see today's hearing not as an end in itself but as a
starting point for dialogue and reform and that this
subcommittee as well as the entire Congress will need to follow
up and continue these efforts in the future.
As the Senator from Alabama said, one-fifth, 20 percent, of
our Nation's energy is generated from nuclear power. In my home
State of Arkansas, it's one-third which is quite amazing that
one-third of all the power generated is from our nuclear power
plants.
As the independent agency charged with ensuring the safety
of nuclear plants, the NRC I think plays a very vital role and
because of the great importance of nuclear power in this mix of
our energy generation of this country, it is essential that we
maintain stringent levels of protection and safety and that the
public feel confident that nuclear power is in fact safe and
that they can live in the vicinity of a power plant and know
that their lives and the lives of their children are not
endangered.
What I'm concerned about is the manner in which nuclear
plants are currently being evaluated. I'm worried about reports
that assessments of nuclear plants are not being administered
in a consistent and objective manner. When assessments are made
not on the basis of objective criteria but on subjective and
arbitrary measures, the very ability of NRC to tell the
difference between a safe and unsafe plant is called into
question.
I think we must do all we can to ensure that nuclear power
is generated in a safe manner which protects the health of the
public safety. I want to emphasize that because I think when
Senator Allard and Senator Sessions--and I didn't get to hear
the Chairman's comments--but when we talk about our concern
about how enforcement and regulations are being applied, that
we immediately are sometimes placed in the category of wanting
to deregulate or to somehow make these standards less
stringent. That's not at all what I'm talking about.
I believe we should not relax easement of safety standards.
I think nuclear plants should be required to maintain an
extremely high standard of safety. The NRC must do a better job
of assessing plants in a consistent and fair manner and in an
expeditious manner. One of the most often heard criticisms of
the NRC is the decisions take entirely too long. I looked up
the Nuclear Regulatory Commission in my United States
Government Manual and found that one of the congressionally-
charged duties of the NRC is to make 'timely regulatory
judgments.'' That is the charge; that's what we mandated.
So I think consistently, having objective criteria and
making these decisions expeditiously are areas I'm concerned
about and that I think this subcommittee must look closely at.
I'm confident with the input of the NRC and the reforms that
are already being implemented, we can not only reassure the
public about safety but we can also ensure the industry that
they can expect to have consistent, objective criteria and
expeditious decisions from the Commission.
Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Senator Hutchinson.
While I appreciate the comments and praise that we're
having this, I frankly admit this is long overdue. I think this
committee has been so busy. You know, here in Washington, we
always put out the biggest fire first and there have been other
bigger fires and we've gotten around to this one now.
Our first panel will consist of three Commissioners, our
chairman and the other two commissioners. Since I want to be
sure we get a full round of questioning, I'd like you to adhere
to the time limit. We'll have the light system used for 5
minute opening statements because we want to get right to the
questions in case some of our Senators have to leave.
I would mention that while some of the subcommittee members
are not here, they are represented by staff. There will be
questions submitted to all witnesses, the first panel and the
second panel, in writing.
Let's start off with Chairman Jackson with your opening
statement.
STATEMENT OF SHIRLEY A. JACKSON, CHAIRMAN, NUCLEAR REGULATORY
COMMISSION
Commissioner Jackson. Thank you, Mr. Chairman and members
of the subcommittee.
The Commission is pleased to appear before you to discuss
nuclear safety regulatory issues and the programs of the
Nuclear Regulatory Commission, the NRC.
In recent months, as many of you stated, the NRC has been
the subject of a number of external reviews, some of them
sharply critical, from our congressional appropriations
committees, the General Accounting Office, and other
stakeholders. The critiques have not all been in one direction.
Some groups have implied that nuclear energy has become
economically burdened as a result of NRC overregulation; others
have cited the lack of NRC rigor in demanding adherence to
clear safety standards and have demanded stronger NRC oversight
of its power reactor licensees.
Whether or not one agrees with these observations, we
believe that they do provide a useful opportunity to review
improvements we already have put into place, to examine the
initiatives we have started and to accelerate and adjust those
initiatives and to address newly-identified issues. That said,
we also believe that given our regulatory health and safety
mandate and given the nature of the industries we regulate, we
must be careful and thoughtful but certainly not sluggish in
analyzing, optimizing and accomplishing the needed changes to
our processes.
The testimony we have submitted for the record summarizes
this full spectrum of issues raised with our analysis and
response. Most NRC observers are calling for a more rapid move
through a regulatory framework that is more risk-informed with
areas of highest risk receiving the greatest focus, and more
performance-based, that is, more results oriented with licensee
afforded more flexibility in meeting requirements.
The Commission has supported strongly and continues to
support strongly this change in regulatory approach, and we
agree that initiatives underway should be accelerated. Under
our probabilistic risk assessment and implementation plan, we
have published both generic and specific guidance to facilitate
risk-informed plant changes through staff training, program
reviews and stakeholder interactions. We continue to make our
rulemaking, inspection, enforcement and assessment processes
more risk-informed and where appropriate, performance-based.
This will enhance our decisionmaking, improve efficiency,
reduce licensee burden and provide a coherent and defensible
framework for all of our functions.
In fact, we have invited the Nuclear Energy Institute, NEI,
to submit to the Commission a petition for rulemaking outlining
areas where it feels NRC regulations are duplicative,
unnecessary in light of other rules or not sufficiently risk-
informed. Similarly, our reactor oversight processes have been
criticized for focus on issues of relatively low safety
significance.
While we have, in fact, been working to improve each of
these functional areas, we agree that additional enhancements
are needed. We recognize the resource demands associated with
NRC enforcement of low level violations and we are taking
actions to simplify their disposition. We're nearing the
completion of a full scope review of all of our reactor-related
assessment processes that should improve their risk, focus and
objectivity, enhance scrutability and reduce resource demands.
As we do so, we intend to interact strongly with NEI on a
proposal recently submitted by them for a risk-informed,
performance-based assessment process. We have taken measures to
ensure that our more informal processes are subject to proper
controls. The Commission also has taken strong action to
streamline our licensing and adjudicatory processes.
Finally, observers have focused on our organization,
management and self-assessment capabilities with specific
suggestions for significant staffing and resource reductions.
On these matters, let me simply say that the Commission has
focused since late 1995 on ensuring a coherent, defensible and
dynamic framework for strategic planning and resource
management. We've used that framework to develop our strategic
plan, performance plan and now program level operating plans.
Let me just say in summary that we are accelerating change
where appropriate and necessary and we are working with our
various stakeholders as we do so. We thank the members of this
committee for the hearing, for the support they consistently
provide to the Commission and for the opportunity for our
perspectives to be heard.
Senator Inhofe. Thank you, Chairman Jackson.
Commissioner Diaz, did you want to make any statement or
response? Your statement will be submitted in the record.
STATEMENT OF NILS DIAZ, COMMISSIONER, NUCLEAR REGULATORY
COMMISSION
Commissioner Diaz. I would appreciate the opportunity.
Mr. Chairman and members of the subcommittee, I appreciate
the opportunity to testify today. I have submitted a prepared
statement which I would like to be included in the record. I
will briefly summarize my testimony.
I believe there is a consensus for the need to change the
United States Nuclear Regulatory Commission's licensing and
regulatory framework and its implementation processes. This is
not an indictment of the past, but a requirement of the present
and a demand of the future. Why we should change is no longer
the issue; the how and the rate of change are. The fundamental
premise, and I believe the majority of stakeholders will agree,
is that regulatory activities should have well-defined
boundaries, be consistent and accountable, and result only in
necessary burden. It is our job to assure adequate, requisite
safety but not to impose requirements beyond this envelope of
adequate safety without the most rigorous consideration of
costs and benefits.
The task of establishing defined regulatory boundaries that
reflect and accommodate application of risk insights could have
been very difficult a few years ago, but the changes made by
industry, the advances in risk methodologies and information
technology, and yes, the pressures of the marketplace now make
this task possible and needed.
The fundamental changes that have been envisioned can occur
and must occur, and they should be timely. Many are now taking
place. Some started years ago and others recently. There is no
doubt that the oversight process the Congress has undertaken
has rapidly accelerated change. I might digress here by stating
that I am not requesting monthly oversight hearings but the
compound effect of the inquiries, criticisms and
recommendations from multiple sources has been healthy and is
appreciated.
I assure you I will work to preserve the functional core of
the agency and work to change what is needed. I do understand
the bottom line is results, results, results. I look forward to
the opportunity to return here with results.
I appreciate the opportunity to present my views. I would
be pleased to answer any questions that you may have.
Senator Inhofe. Thank you, Commissioner Diaz.
Commissioner McGaffigan?
STATEMENT OF EDWARD MC GAFFIGAN, COMMISSIONER, NUCLEAR
REGULATORY COMMISSION
Commissioner McGaffigan. Mr. Chairman, I don't have
prepared remarks, but I might respond to opening remarks of
some of the Senators very briefly.
I very much appreciate the oversight hearing. I think such
hearings are very useful. I came out of the Armed Services
Committee where I worked for Senator Bingaman and with several
of the members of this subcommittee. As you know, the Armed
Services Committee conducts very thorough hearings on the
Department of Defense and the Department of Energy.
I'd like to agree with the Chairman that we face some major
challenges as we go forward in that our adjudicatory hearing
process has not worked well in the specific instances that you
cite. The challenge is even larger in some ways than you allude
to because not only are we faced with relicensing, but next
year we expect the U.S. Enrichment Corporation will apply for
an atomic vapor laser isotope separation enrichment plant and
we will face a very major challenge there.
We have requests for license transfers coming forward,
Three Mile Island's transfer from GPU to Peco. We will license
the high level waste repository either under current law or any
new law that is passed. So we face major challenges and we are
trying to face those challenges within the legal framework that
we have, but in all honesty, in the case of the enrichment
plant, for example, we have no flexibility but to conduct a
very likely long and resource intensive adjudicatory hearing
because Section 193 of the Atomic Energy Act specifically
requires an adjudicatory hearing.
We have strengths as an agency, and Senator Lieberman
referred to one of them, the openness of this agency. I think
it is a tremendous strength. Senator Allard referred to another
one of our strengths, which is that we are well-founded in
science. I think that the agency has a tremendous repository of
knowledge on the issues. We sometimes get into arguments with
our sister regulatory agency, the EPA, and we generally argue,
as Senator Lieberman knows, that our science is well-founded on
those matters.
With regard to the issue of excessive regulation and
regulatory reform, that is an issue, not just for our agency,
but really across government. It is very difficult to make
regulatory reform a priority. I was involved in working for
Senator Bingaman in partnership with Senator Wallop on the
Section 800 requirement, which led to regulatory reform in the
procurement system. It was very hard to get the Pentagon to
come forward with proposals to fix itself. We eventually went
to another body, Admiral Vincent chaired it and in 1993, we got
recommendations and in 1994-1995, Congress passed far-reaching
reforms. So self-criticism is hard; making regulatory reform a
priority is hard.
I think the approach the Chairman has outlined of trying to
get a very significant petition for rulemaking from the
Institute that we would then give high priority to makes sense.
There were attempts made in the Reagan Administration and the
Bush Administration and in the Clinton Administration towards
regulatory reform and I think the results have been less than
you would have liked, than we would have liked, than I would
have liked.
Finally, with regard to evaluation and the consistency of
the evaluation of our plants, we are trying to improve our
assessment of plants but as a general defense of where we are
and the openness of our process, I think we do very well and
generally our plant evaluations are very consistent within
INPOs. You'll hear from INPO later, the Institute for Nuclear
Power Operations. And we are very open, going back to Senator
Lieberman's point, in discussing these assessments.
Are they perfectly objective? Can I justify why each plant
gets the number it gets? I think the staff can but there is
some subjectivity there. We can do better, we will do better,
but we don't do badly, especially in comparison say with the
FAA or other agencies which are often criticized for you not
knowing where the licensed bodies stand vis a vis the
regulator. You know where our licensees stand vis a vis us.
So I leave it with that and look forward to the
questioning. As I said at the outset, I very much appreciate
the chance to have the hearing.
Senator Inhofe. Thank you, Commissioner. I appreciate all
your comments.
Ms. Jackson, in my opening statement, I talked about the
very long delays that I didn't understand and I've talked it
over with my staff in the case of the uranium enrichment in
Louisiana about 7 years and the Vogtle operation, about 4-1/2
years, the latter being as near as I can determine only a name
change because you had the same company, the same employees,
the same parent company but just changing subsidiaries. I know
there's such things as the whistleblower and some claims, but
I'd like to ask you specifically how you react to these long
delays?
Commissioner Jackson. I think that as a group the
Commission would clearly say that long, unnecessary delays in
licensing proceedings, including license transfers, are
unacceptable. I believe you know that none of the current
members of the Commission were members of the Commission at the
time of the Vogtle transfer. In addition, the LES, the
Louisiana Enrichment Services proceeding was well underway and/
or completed before we got here.
Nonetheless, I had asked our Atomic Safety Licensing Board
to generate lessons learned, particularly relative to the
Louisiana Enrichment Services proceeding because that
overlapped with my tenure and the tenure of some of the
Commission members at the NRC. I think what we have learned and
what we are now intending to apply, particularly for license
renewal, are these. That is, that we have an opportunity to be
more clear, as clear as possible, up front on acceptance
criteria and the information needed to reach safety decisions
so that licensees can make high quality submittals to us and
thereby minimize the number of interactions for review.
The Commission itself, because we have an inherent
supervisory authority, needs to monitor its adjudicatory
process more carefully, including setting reasonable schedules
for decisions to be made and to have a process for the
identification as early in the process as possible of policy
issues so that it can give appropriate guidance.
Senator Inhofe. Madam Chairman, let me just say and I
recognize, of course, that you folks weren't there but it's
been my experience that when you have a commission that is in
charge of its staff and perhaps in the staff there were some
frailties there that caused the unnecessary delays, I just
would want to know what plans you have to preclude that from
happening again and what caused those, specifically answering
that question.
Commissioner Jackson. Well, what I'm trying to say to you
is that there are a number of complexities in the particular
case of the Vogtle license transfer that involved accusations
of significant wrongdoing involving very high level officials
in the company. My understanding is that the delays in the
proceeding relative to the Vogtle license transfer had much to
do with that.
Senator Inhofe. Yes, I understand, the whistleblower and
that, but this is going to happen, isn't it, in almost every
case that comes up, or in many cases, as it will?
Commissioner Jackson. That's right and so what I'm saying
is what the Commission has the opportunity and responsibility
to do is to exercise its inherent supervisory authority over
its licensing panels so that it doesn't happen and that
specifically is what this Commission has taken steps to do.
Senator Inhofe. We are coming up with this license process
and this is something that deeply disturbs me because we're
talking about something that happens very 40 years and now I
understand you already have applications in for a couple of
license renewals some 10 years in advance. It's my
understanding that the reason they're coming in 10 years in
advance is they figure it's going to take that long to do it.
We're not talking about new companies. I think Senator
Allard brought up a very good point about some aging machinery
and things that might have to be looked at, but then again,
it's not as if we're licensing for the first time.. How long do
you anticipate the process to last for each renewal?
Commissioner Jackson. We've set a schedule for the initial
renewals of 30 to 36 months.
Senator Inhofe. Senator Chafee?
Senator Chafee. I'd like to just ask one quick question.
I missed part of your statement, Madam Chairman, but I
would ask you as I understand, you asked industry for comments,
what you could do to improve your operations from their point
of view. Did you get those comments?
Commissioner Jackson. No. What I've had discussions with
the NEI about, in particular Mr. Colvin, is that I've invited
NEI to submit a petition for rulemaking to the NRC to point out
instances where they feel that we have regulations that are
duplicative, unnecessary or not sufficiently risk-informed so
that we can in fact focus on those areas and do a systematic
review and use that as a mechanism to come out with a set of
regulations that are more sharply focused, more risk-informed
and are not duplicative.
I'm sure as you understand when you have an agency that is
essentially the derivative agency of a 40-year-old agency,
starting back with the Atomic Energy Commission when it had its
regulatory side, there is a body of regulations that developed
over time that are piecemeal. It's time for a coherent review
of those regulations. I have always maintained that regulatory
effectiveness demands that our regulations are risk-informed,
that our regulations aren't duplicative, that they don't
unnecessarily overlap. The issue becomes what is an effective
mechanism to have that kind of systematic review.
Senator Chafee. I would think they'd take you up on your
proposal. It seems to me to make sense. When did you make the
offer?
Commissioner Jackson. This specific one has come out of
discussions that we've had with NEI in recent weeks.
Nonetheless, I have consistently asked for strawmen. My point
of view is the following. That if there are problems, then the
easiest way to address them is to come up with solutions and
solutions, to me, that are efficacious are ones that present
proposals. That's what I call strawmen.
We've invited that with respect to our rule change on 50.59
which is the rule change that allows licensees to make changes
to their plants without coming to the NRC first, as well as in
a host of other areas. We're going to be interacting with the
NEI on a proposal they recently advanced on developing a risk-
informed plant assessment process. That should complement and
dovetail with our own review of our reactor assessment
processes, my point being that nothing focuses the mind like a
concrete proposal. What form it comes out to be depends upon
the interactions with all of our stakeholders but the challenge
is to clearly identify regulations where there is a belief that
there is not the safety benefit that they should have.
I have my own list but we believe that in an effort to be
responsive, it is useful to have the industry itself come
forward with some kind of proposals.
Senator Chafee. Commissioner McGaffigan?
Commissioner McGaffigan. Just one addendum to the Chairman,
anticipating your criticism and explaining why I said what I
said earlier, NEI will tell you the past petitions for
rulemaking submitted to the Commission historically did not
receive much priority and indeed languished for years.
What we are saying is if this petition for rulemaking comes
in this time asking for significant reform, and I presume
reform is necessary, that we will devote the resources
necessary to getting the rulemaking done. As I said earlier, if
you look at the historical record, we have tended to let such
petitions, which have never been comprehensive before, but have
been piecemeal, languish at the bottom of the rulemaking to do
list. This time we intend to give it very high priority.
Senator Chafee. Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Mr. Chairman.
Senator Lieberman?
Senator Lieberman. Thank you, Mr. Chairman.
Dr. Jackson, I wanted to ask you, at the outset, just some
baseline questions about nuclear energy in the country. Some of
my colleagues have mentioned this 20 percent figure and I've
used it myself in the past, which is that 20 percent of our
electric power comes from nuclear energy. Is that about right?
Commissioner Jackson. It's 20 percent of net electrical
generation.
Senator Lieberman. Twenty percent of net electrical
generation in the United States comes from nuclear power.
Today, how many plants do we have operating?
Commissioner Jackson. 104.
Senator Lieberman. How many are on your watch list at this
time of those 104?
Commissioner Jackson. Three involving five units, five
reactors.
Senator Lieberman. To say the obvious, the overwhelming
majority of nuclear power plants in the country are operating
in a manner that the Commission deems to be fairly safe?
Commissioner Jackson. Let me make the following statement.
Even plants that are on the watch list may be operating. We may
have significant concerns in terms of erosion of safety margins
or other issues that warrant increased agency attention, which
is the reason they're on the watch list.
I think there has often been a misunderstanding of what the
watch list means. The watch list was developed and, in fact, in
response to congressional desires some years ago to ensure that
the agency had a consistent way of focusing appropriate
attention on plants that we deemed to have problems beyond the
norm.
It is not meant to say that the given plants are unsafe to
operate or that the margins have come to a point that they need
to be shut down. There are some plants--there's only one--that
remains where the Commission has said that it will remain shut
down until the Commission as a commission decides to let it
start up, and as you know, that's the Millstone Unit 2.
Other plants are shut down for various reasons, not under
orders from the Commission and when they work through the
issues, they will restart. They may or may not come off the
watch list depending upon the overall performance and the
attention the agency has to give, but your statement is true,
there are 5 out of 104.
Senator Lieberman. I appreciate that clarification. That's
an important point because if you thought they were unsafe,
they wouldn't only be on the watch list, they'd be shut down.
Commissioner Jackson. Right.
Senator Lieberman. In fact, that's what happened in
Connecticut.
I want to ask you a question which I want to ask for a
written answer because I don't know that you have it now and
it's probably more detailed, which is I'd be interested in
seeing a projection out 10, 20 years, going with the current
104, the number of nuclear power plants over that period of
time that in the normal order of business, assuming no crises,
will continue to provide power, and to that extent, if you can
estimate what will happen to that 20 percent net electricity
generating capacity over a period of 20 years?
In other words, some of the plants are obviously aging.
We've had one of the four closed in Connecticut as you know
that we've all decided--the company and yourself--that it's not
worth opening, it requires too much to invest to get it back to
a point where it's going to produce.
I think that would be helpful to me and I hope certainly to
the committee.
[The additional information follows:]
The NRC does not make its own estimates or projections of the
impact of nuclear plant shutdowns on the contribution of nuclear power
generation to total electricity supply because the development of such
estimates does not fall within NRC'S regulatory jurisdiction, However,
based on data from the Internet site of the Energy Information
Administration (EIA) of the Department of Energy, the following
projections of nuclear capacity (i.e., total potential generating
capacity) are available through the year 2020 for reference, high, and
low cases:
Total U.S. Nuclear Capacity
(Megawatts)
----------------------------------------------------------------------------------------------------------------
1996 2020
(Actual) 2000(Proj.) 2005(Proj.) 2010(Proj.) 2015(Proj.) (Proj.)
----------------------------------------------------------------------------------------------------------------
Reference case.................... 100,817 95,605 86,800 80,357 63,881 49,217
High case......................... 100,817 97,635 95,555 93,525 86,800 80,357
Low case.......................... 100,817 92,653 63,811 49,217 22,154 2,320
----------------------------------------------------------------------------------------------------------------
The assumptions of the reference case include most plants operating
until their 40-year operating license term ends, with some plants
obtaining license extension and some shutting down prematurely because
of economic or other conditions. The high case assumes that relatively
more plants obtain license extensions and relatively fewer plants shut
down prematurely. In the low case, there are relatively more premature
shutdowns and relatively fewer license extensions. Thus, over
approximately the next 20 years (i.e., given that the EIA projections
are in 5-year increments, until 2015), U.S. nuclear generating capacity
could decline by as little as 13.9 percent in the high case, to 36.6
percent in the reference case, to 78.0 percent in the low case.
Currently, nuclear generating capacity is approximately 14 percent
of total U.S. generating capacity. if it is assumed that U.S.
generating capacity from all fuel sources grows at approximately 1.5
percent annually to 2015, total U.S. generating capacity would increase
from approximately 700 gigawatts in 1995 to 950 gigawatts in 2015.
Using the EIA projections, nuclear power's contribution to total
generating capacity in 2015 would range from 2.3 percent for EIA's low
case, to 6.7 percent for the reference case, to 9.1 percent for the
high case.
In terms of actual generation (i.e. total megawatt-hours
generated), nuclear power plants currently constitute approximately 20
percent of total U.S. electricity generation. This is because nuclear
plants are designed to be baseload plants and run most of the time;
whereas some other fuel sources (e.g., natural gas) are used as peaking
facilities to satisfy high demand periods and thus are not run as much
of the year. With other factors being equal, the decline in nuclear
generation as a percent of total U.S. generation would be closely
related to EIA's projections of the decline in nuclear capacity.
However, in recent years, average nuclear plant capacity factors have
increased to about 75 percent. It would be expected that less efficient
nuclear plants with lower capacity factors would be relatively more
vulnerable to premature shutdown. Further, those nuclear plants that
continue to operate may be able to increase their capacity factors
further. The likely result would be that even though there will likely
be fewer nuclear plants operating in 2015, those nuclear plants that
remain in operation will likely be more productive. Although the NRC
cannot project future capacity factors of the nuclear plants that it
licenses, such an increase in productivity would tend to mitigate a
decline in nuclear generation's contribution to total U.S. generation.
Senator Lieberman. Commissioner Diaz, I noticed you heading
toward the mike when I was talking. Did you have something you
wanted to say about that?
Commissioner Diaz. I was just going back to the issue of
how many plants are going to be on line and licensed and the
time that it takes to renew a license. I just want to make the
point that I don't think the licensees expect a 10-year license
renewal period.
Senator Inhofe. Say that again?
Commissioner Diaz. The licensees, when they submit an
application, they are not doing it 10 years earlier because
they think it's going to take 10 years to do it. I think there
is a major economical reason to do that, which is, before they
undertake major repairs, upgrades that cost $100-$200 million,
they want to make sure the plant will be able to be operated.
So that is what brings the issue forward of the license
renewal. It's a very important issue to the Commission which we
are addressing, and an issue for the industry--the loss of lead
time--that they have to attack. They can make major changes if
they get the license renewal. They can change steam generators,
they can spend $100 million but not if they do not have the
license.
Senator Lieberman. Yes, absolutely.
Dr. Jackson, during the recent appropriations process this
session, it obviously became clear that there are people who
believe the NRC has too many inspectors, or are concerned the
NRC has too many inspectors and spends too much time on reactor
safety.
I've heard you say that you're often asked why if nuclear
safety performance is improving at plants as it is, there isn't
a corresponding decrease in the level of NRC regulation and
inspections. I wanted to ask you that question and ask you to
respond to it at this time.
Commissioner Jackson. First, what I would like to say is
that there has been a net decrease in the inspection in the
sense of the number of inspection hours which, over the last 4
years, have gone from 3,100 on average per plant to 2,500. We
do have a formula for assigning inspectors to nuclear power
plants which is the so-called n + 1 formula which says if there
are n reactors at a site, they have n + 1 inspectors.
We're looking at the numbers but we feel that they have to
come out of some key decisions the Commission has to make on
what constitutes a risk-informed, baseline inspection program.
In the end, nuclear oversight will always require inspection.
The question becomes what do we inspect and how many resources
do we need.
Today, we do adjust the amount of inspection to the
performance of nuclear facilities, but we feel we can make more
refinement and we intend to do that, but in the end, there will
always be a risk-informed baseline inspection program.
If I may make an analogy to the airline industry, even
airlines that have not had an accident in 20 years get a
certain amount of baseline inspection, but the question is
making sure that inspection is focused on the right things,
risk-informed, and that we adjust the resources accordingly.
Senator Lieberman. Thank you, Dr. Jackson.
My time is up. Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Senator Lieberman.
Senator Allard?
Senator Allard. Thank you, Mr. Chairman. I'd like to follow
up on my Connecticut colleague's questioning on the number of
employees you have.
You're familiar with the Martin Report which was an
assessment, I assume, of the NRC fiscal year 1995 budget
estimates. In that report, what they did is they looked at the
number of employees in France and Japan, combined that with the
number of employees that we have here, and looked at the number
of plants they had in those countries, plus their safety record
and said, it looks like they're getting the same job done with
half as many employees as you have.
If I was in your position, I think that would disturb me to
a certain degree because I'd want to know whether everybody was
performing for the job we're paying. I think those figures are
rather remarkable and the fact they compared that to other
countries who have the same number of nuclear power plants, and
have the same performance record or the same safety record, and
went so far as to say you could save $90 million with that.
I'm wondering if you have done a study. Maybe if you're not
building new power plants, maybe you don't need people there
that get involved in construction of new power plants. Maybe
there is an opportunity for savings there. Have you looked at
those kinds of areas? Have you looked at the qualifications of
your inspectors? Maybe there is a need to do that.
Have you looked at your personnel file to see if you have
somebody that once on board, how difficult is it to get them
reassigned or to eliminate their position. I'd like to have
your comment on that.
Commissioner Jackson. Thank you for asking that question.
Let me talk directly to this issue of comparisons between the
Nuclear Regulatory Commission and its staffing levels and a sum
of staffing levels with Japan and France. It is true that if
you add up the number of nuclear reactors in France and Japan,
you come out with roughly the same.
What we have said is that the comparison is not as simple
as that because of the fact that first of all, in those
countries, what you call the regulatory body is a very
different body than what the NRC is, and let me explain that to
you.
The regulatory body which may look very thinly staffed is
supported in those countries by so-called technical support
organizations, so that is No. 1.
Senator Allard. So they work closely with the industry and
they do a lot of self-inspection? Is that what happens?
Commissioner Jackson. No, it is not that. They actually
have governmental technical support organizations which
actually do the technical work. Then they have research
organizations.
Senator Allard. And those were not included in the figures?
Commissioner Jackson. They were not included in those
figures.
Senator Allard. Did you try and bring those into the
figures?
Commissioner Jackson. Absolutely.
Senator Allard. Do you have a corrected number?
Commissioner Jackson. I can provide you with a number but I
got calls from my colleagues from abroad who read about some of
this in the press and they said that's a comparison that you
cannot make because there is a difference.
Senator Allard. Don't you think it would be helpful though
to follow up and try and correct those numbers?
Commissioner Jackson. I agree with you but I do believe
there is utility in benchmarking how we handle our regulatory
program with how other countries handle their's, but being
mindful of commonalities and differences between not only the
regulatory regimes but how those regulatory regimes are rooted
in the legal and institutional framework of those countries.
Having said that, we are looking at our staffing as part of
our strategic assessment and re-baselining. We've been looking
very broadly at our core competencies and key skills. We've had
a specific study done of our inspection--it's called a job task
analysis. We also are going to do a more comprehensive review
of our inspection program beginning this fall.
Nonetheless, we are doing and planning to make targeted
reductions in certain areas and/or reassignments because as
plants shut down and decommission, the nature of the work
changes. So we have some opportunities in that regard.
Again, I would just say, and I'll be happy to provide the
best figures that I can dig up, that the strict comparisons to
what is called the regulatory body to the NRC, one has to be
careful.
The final comment I would make is that our range of
responsibilities encompass more than the regulators do in other
countries; what they do and what they're required to do under
the law is very different.
Senator Allard. It would be helpful to me if you could get
to this committee just what your scope of responsibility would
be in comparison to these other countries.
Commissioner Jackson. I would be happy to provide that.
Senator Allard. I think if you're at that place where
you've got a great opportunity to upgrade your work force, take
those that are nonperforming employees and take those that are
perhaps not as qualified and you take your more qualified and
move those into your most needed positions, your most
responsible positions and take those that are less qualified
and nonperforming and get rid of them.
Commissioner Jackson. Let me say this quickly. We have a
very high quality work force. Nonetheless, there's always
opportunity for improvement. In fact, one of the initiatives
that has occurred coming out of a reorganization that we had a
couple of years ago is also a revamping of how we do a
performance appraisal, consistent with the laws of the
government, but particularly with respect to managers. So we're
doing a lot of that. It's less obvious and transparent than
some other things because you're dealing with personnel policy,
but I appreciate your comment.
Senator Allard. Mr. Chairman, my time is running out, but
I'd like to give the other Commissioner an opportunity. He's
been looking to respond to my question, I'd like to give him
the time to do that.
Commissioner McGaffigan. If I could just very briefly
comment on Senator Allard's question about the Martin Report.
In France, one of the countries that the Martin Report compared
us to, there is a recent report of a member of Parliament, and
apparently there is going to be legislation later this year
reorganizing France's nuclear regulation, but the press reports
I saw--I think it's Monsieur Le Deout's report--may tip the
balance in the other direction. We may be cost effective
compared to the French once you do an apples and apples
comparison of what he is proposing. He is now bringing
everything together into one regulatory body that looks more
similar to us.
So once this reform is completed in France later this year,
we may look cost effective compared to the French, is the first
point.
Point two on the quality of our personnel, I want to second
the Chairman. I had a lot of experience overseeing the
Department of Defense and the Department of Energy's nuclear
programs over many years working for Senator Bingaman and I
would compare our staff to DARPA's which I think is one of the
best staffs in the Pentagon.
We have very effective, very dedicated civil servants with
very high technical credentials. The question we have to
address is how to best utilize those credentials going forward,
but I think we need them to meet all the challenges that we
face, not that we haven't made reductions and won't continue to
make reductions to adjust to budget realities and to adjust to
workload realities. We have very, very good people. The
challenge I think we face is managing them well and getting on
with things like this rulemaking that's required and speeding
up our processes.
Senator Allard. Thank you, Mr. Chairman.
Senator Inhofe. Senator Sessions?
Senator Sessions. A little bit on that point, according to
the study you referred to, in England, there was 5.7 inspectors
to 1 plant where we're at 14.5. That's closer to three times as
many.
I would just encourage you because it's not easy. I took
over the Attorney General's Office of Alabama in 1994 and we
faced a budget crisis and the hardest thing I ever had to do
was to terminate the employment of 25 percent of that office
the day I took office and we still hardly managed to balance
the budget, and we did more quality legal work, everybody
reorganized, rethought, challenged ourselves, and I couldn't
have been more pleased.
I would just say to you, as you indicated, this is a 40-
year-old process, it's built up, you've got regulations, some
of which no longer are relevant. You're saying the things that
I think are right. We want to help you, we want to see you move
this to a lean, effective, rational, scientifically-based
review process that will not only allow the industry to
function and keep the rates as low as possible, but perhaps
will allow us to bring on more plants in the future.
With regard to that, Chairman Jackson, let me ask you, what
prospects do you see in this country that we can have the
rebirth of the nuclear industry and the building of some new
plants? What prospects are there?
Commissioner Jackson. Let me state for the record that I am
a supporter of nuclear power. In fact, I was on the board of a
nuclear utility company for 8 years before I came to this job
and that gave me some perspective, not the ultimate perspective
but some perspective in terms of some of the thinking.
I think what will affect the future course of nuclear
power--I never make predictions about absolute numbers. I think
that's dangerous as the Chairman of the Nuclear Regulatory
Commission, but I think we have three opportunities before us.
One is license renewal. Why license renewal? Because it
allows licensees to get the maximum return our of their already
sunk investments. It also is what I would call a confidence
builder, confidence relative to the industry itself in terms of
the future of nuclear power, but confidence in the regulatory
process, that we can in fact do a timely but effective review
of renewal of a license. So I call that a gating function.
The second key opportunity relates to the fact that we do
have a new regulation, Part 52, for streamlined licensing of
new reactor technology and it includes as part of that, prior
certification of the designs of more evolutionary, advanced
reactors. We have, in fact, design certified two new reactors,
one designed by General Electric and one by ABB Combustion
Engineering. We're in the process of doing the final design
approval on a Westinghouse design which we expect to have done
by the end of the third quarter of this year.
What's different about that is that it allows for one step
licensing, the issuance of a combined construction and
operating license at one time provided what's built is one of
these certified designs. I think what we're putting into place
for license renewal will allow us to propagate the lessons
learned into licensing a new reactor design.
The third opportunity, but it's a problem today, has to do
with resolving the high level waste issue. If we can do that,
then I think these are what I call the top three.
Senator Sessions. I think we can do that. I think we
probably ought to be removed from office if we can't take
nuclear wastes and store them safe in this country. That is, to
me, beyond rationality, if this Government can't find a place
to store spent nuclear materials is beyond belief. So I think
we can solve that problem or we all ought to be removed from
office, it seems to me.
You really didn't kind of answer my question. I think
you're right that we need to have some standard design approval
so that a company can reasonably expect that their plant, once
built, will be approved because we do have plants that have had
problems in that regard, but what is the prospect? How many
plants now are on the drawing board moving toward development
in the United States at this point?
Commissioner Jackson. There are three advanced reactor
designs. To my knowledge, no utility or power company is moving
toward specifically applying to license the construction and
operation.
Senator Sessions. That means the whole agency is going to
be kaput pretty soon if we don't build a new one and all of
them have to be shut down, they have a life span. That is a
serious concern, isn't it--20 percent of our power that
produces no air pollution is heading to extinction.
Do you consider that the NRC has any role in the future to
try to develop ways we could make nuclear power feasible here
where other countries apparently find it is?
Commissioner Jackson. As you know, the NRC's role is
legally or statutorily not promotional. Nonetheless, picking up
on your earlier comments, I believe that the NRC's role in
facilitating the safe use of nuclear power in this country has
to do with having an efficient, timely, risk-informed,
performance results-oriented and fair regulatory process as the
key elements.
That is what you're looking for from us and this is what
our standard is for ourselves. I believe this Commission is
committed to making a change.
Senator Sessions. I hear you saying that you're not worried
about that and that's not a function--you don't have a staff on
board studying this phenomenon of no more plants and developing
any thought to it as to what we ought to do?
Commissioner Jackson. The decision to build the plants is
going to come out of business decisions.
Senator Sessions. But the agency itself does not have a
team that's analyzing this problem and proposing any solutions
to it?
Commissioner Jackson. Our way of having a solution is to do
our job in the way that is as least burdensome as possible, is
risk-informed, is timely.
Senator Sessions. I respect that.
Senator Inhofe. Thank you, Senator Sessions.
We do have another panel. I think since we're down to three
Senators, I'd like to do one more round. We will be having to
vacate this room at 11:45 a.m., so we want to give adequate
time for our next panel and I've completely rewritten all my
questions for them after hearing this testimony here.
I think we've already accomplished a great deal today and I
appreciate your response of 30 to 36 months on your license
renewal plan. I would like to ask would it be unreasonable to
ask you to supply us with a detailed license renewal plan by
sometime this fall?
Commissioner Jackson. I would be happy to do that because
we've done integrative planning for both the technical reviews
and the adjudicatory process.
Senator Inhofe. All right. Thank you very much.
I'm concerned also about the streamlining. I don't mean
this critically but when I saw your testimony come in and it
was 80 pages long, I thought it might be kind of difficult to
streamline anything around here.
Commissioner Jackson. That was the streamlined testimony.
[Laughter.]
Senator Inhofe. Commissioner Diaz, I'd like to read to you
a statement that was made by former Commissioner Remick,
``You''--meaning the NRC--``are seen as having lost focus and
perspective on what constitutes safety and adequate protection
of the public and are striving instead to duplicate industry's
initiative of seeking excellence in plant operation. You speak
of striving to be risk-informed and you speak of the need for
performance-based, regulatory implementation but little impact
is seen in the field.'' Is Dr. Remick correct?
Commissioner Diaz. He's reasonably correct. I would say
that there has been a change in the last year. We have
accelerated significantly our emphasis on one part of that
statement which is risk-informed regulations.
We can do risk information much easier across the board of
many of our activities than we can do performance based. It is
possible that in the last few years, a bit of the focus on
safety was lost and emphasis was put in areas of what we call
compliance, meaning that the processes became so important, and
the detail in the processes became overwhelmingly a concern for
the agency.
I believe that the Commission has taken the necessary steps
to stop that from happening. This is an issue that has been
called safety and compliance. I think that s now better
defined. I think that the agency--and I believe I speak for all
my colleagues--have now placed ``risk-informed and performance-
based'' on a separate basis so they can be dealt with as the
circumstances permit. That's an important thing.
Senator Inhofe. Thank you, Commissioner.
I'd like to have a reaction from the rest of you but I'm
going to go ahead and read a couple of other statements. If you
would make some notes and give us your response. This is from
Dr. Pate, former head of INPO.
He said, ``Headquarters and regional personnel routinely
every day and indeed every hour impose requirements on the
plants that the Commission or other senior managers would not
support if in each instance you knew what was happening.''
Further from Commissioner Remick, ``To be blunt, the
Commission does not know in detail how the agency's programs
are being preformed in the field. The over emphasis on blind
adherence to strict compliance in every confusing regulation
and strict compliance with documents never intended for that
purpose is, in some cases, diverting attention from more safety
related activities.'' Anyone want to respond to that?
Commissioner Jackson. Let me talk about some specific steps
that the agency has taken with respect to what many perceive as
an apparent disconnect between headquarters or Commission
expectations and what goes on in the field. I'd like to preface
what I say by reiterating an earlier statement which is that
NRC has a very focused and dedicated staff. The job for the
Commission and the senior managers is to provide the
appropriate leadership.
We have given increased focus to providing appropriate
guidance, appropriate training of our people in the field and
particularly management oversight and leadership. That is what
needs to happens.
If I may take one additional moment, the Commission
promulgated a statement on safety and compliance because there
were discussions in the agency of safety versus compliance, and
for a regulatory agency, that doesn't make sense. I've always
said that if we have regulations or requirements that don't
make safety sense, we should change them. It's our job to do.
If the industry is aware of them, they should do it.
I just have one minor correction to what my colleague,
Commissioner Diaz, says. We have accelerated a number of things
within the last year but 3 years ago, the Commission directed
the staff to develop specific regulatory guidance documents on
the use of probabilistic risk assessment, regulatory
decisionmaking, to use them to review pilot submittals from our
licensees on risk-informed changed to in-service inspection,
in-service testing, technical specifications, as well as graded
quality assurance.
So there is a comprehensive program underway. It has been
underway since before my time. It has gotten sharper focus and
acceleration recently.
Senator Inhofe. Would you like to respond to that,
Commissioner Diaz?
Commissioner Diaz. Just briefly. I completely agree that
Chairman Jackson started an overlaying program that should
provide this but the gist of what you read was right. Where
there are problems in emphasizing compliance or safety, I think
the answer has to be yes. Are we aware of it? Yes. Are we
responding to it? Yes. Do we expect that we will be able to fix
it? I believe the answer is yes.
Senator Inhofe. Very good. I know my time is expired but
I'd like to give Commissioner McGaffigan a chance to respond.
Commissioner McGaffigan. These issues that are coming up
unfortunately are not new. Mr. Colvin, who is on the next panel
and I'll help pave the way for him, used at the July 17 public
meeting, his 1989 viewgraphs which he told us were on point for
the 1998 Commission as well.
So I welcome the spotlight that is being shined on us, or
the floodlight that is being shined on us. We need to make
commitments to change and to be the agents of change. We have
made some progress, but there are things we have to fix.
He'll talk about our enforcement policy and the Chairman's
testimony talks about it but there are some things that have
happened on our watch--this increase in nonescalated
enforcement actions--that we need to fix and we've made
commitments that we will fix and do it relatively promptly.
The final point I'll make is we need to move forward.
Unfortunately, Mr. Colvin can use 1989 viewgraphs and they are
still relevant in 1998. That means that something has gone
wrong in the intervening 9 years that needs to be addressed.
Senator Inhofe. Senator Lieberman?
Senator Lieberman. Thanks again, Mr. Chairman.
I do want to pick up for a moment before I ask a question
on Senator Sessions' conversation with you. I do think there is
agreement here across party lines at least on this subcommittee
about what is really a pressing matter of national energy
policy which is that no new nuclear power plants are being
built in this country today and they are being built in most of
the major industrial powers and the developing industrial
powers such as China.
The reason for that I think is that it's more complicated
than this but my own sense is that the most important reason
for that is that the nuclear power industry has decided that
the public will not support the building of additional nuclear
power plants because of safety fears, the Three Mile Island era
situation and to a certain extent, I suppose, Chernobyl where
there is no real, accurate or fair comparison to our nuclear
power plants and what was happening at Chernobyl.
That is where I think your work, the NRC's work, is so
critically important, to restore public confidence in the
safety of nuclear power. Then I think we have an obligation and
the people in the industry have an obligation to go out and
make the case to the public that we've got a source of power
here that will help us to be more energy independent with all
of the implications for our national security involved in that
and in fact, will help protect our environment.
Okay, there were some mistakes made at an earlier point but
you said it, 104 plants are operating today, they're operating
safely. If they weren't operating safely, you would shut them
down, which you did in Connecticut.
The other side of it is who forms the national energy
policy and of course that is the responsibility, I believe,
more of the Department of Energy and perhaps Administration
officials generally than of the NRC. And it's our
responsibility in Congress to help form that policy and in that
sense to educate, inform and build a climate where we can see
some of those standardized designs, big advance over the
future.
We've got four nuclear power plants in Connecticut, each of
them a different design. That complicates not only their
operation but your responsibilities in ensuring their safety.
So we're taking a critical step here in having at least three
standardized designs.
I know there is some work going on over at the Department
of Energy to encourage next generation nuclear power plants but
I hope that one of the results of our oversight of NRC will be
to have a broader understanding of why your regulatory
authority is so critical not only to the safety of the current
plants but to building a public constituency or at least public
acceptance of the need for a next generation of plants and then
the rest of it is up to the DOE and us, really, to make the
case to the public.
On the question of safety, I want to come to a different
point. There as a GAO report that Congressman Dingell and I
requested a while back that reviewed the process at NRC and the
Department of Labor for protecting whistleblowers and contained
a number of recommendations for improving the process.
This whole nightmare we went through in Connecticut, part
of it was the result of whistleblowers, the people who work in
the plants who, in a sense--when I was attorney general of
Connecticut, Senator Sessions was attorney general before--we
used to have what we called the Private AG's Act, the sort of
baby attorneys general where we'd give private litigants the
authority to help us enforce the law. In a way, every employee
in a nuclear power plant has the ability to assist in
guaranteeing the safety of those plants and whistleblowers are
a part of that.
I wanted to ask you what changes to the whistleblower
protection system has the NRC made in response to the GAO
report or your own evaluation and do you think there is any
additional legislative authority you need to improve the rights
and opportunities of whistleblowers to help you do your job?
Commissioner Jackson. We've taken action at three levels.
One is the policy level; the second is the functional level;
and the third is on the legislative front.
At the policy level, the Commission itself issued a policy
statement relating to the freedom of employees, it's
expectations relative to the freedom of employees in the
nuclear industry to raise safety concerns without fear of
retaliation. We thought it was important to send a clear
message in that regard, that people have the opportunity and
the right to raise safety issues without being harassed and
intimidated.
On the implementation side, we've taken a number of steps.
There were a number of specific GAO recommendations related to
protecting the identity of allegers and we've taken explicit
process and management steps to do that. With respect to the
tracking of allegations, we've implemented a new system using
information technology to do better tracking of allegations.
We've created the position of an agency allegation advisor who
has a specific point of accountability with respect to
allegation issues, but also has the responsibility to not just
bean count but to extract what is safety significant. We then
use that information as part of our senior management meeting
and plant assessment process, not bean counting but what
underlies the allegations.
We had a recent hiccup because of a conflict between the
FOIA requirements and the protection of allegers at one of the
nuclear plant where some names were inadvertently released and
that has made us step back and reinstitute certain management
controls and have special document handling requirements for
FOIA requests vis a vis protecting allegers' identities, et
cetera. So we've taken a number of very concrete steps in that
regard.
Finally, we've been working with the Department of Labor to
get them to transfer the treatment of harassment and
intimidation cases from their Wage and Hour Division to OSHA
and also working with them on legislation for methods to speed
up the proceedings relative to harassment and discrimination
cases.
Senator Lieberman. I look forward to seeing the results of
those inquiries and possible legislation when they are
completed.
I want to thank you, Dr. Jackson, and Commissioner
McGaffigan and Commissioner Diaz for the very important and I
think extraordinary able job you're doing.
Thank you very much, Mr. Chairman.
Senator Inhofe. Thank you, Senator Lieberman.
Senator Sessions?
Senator Sessions. Thank you.
Senator Lieberman, you do suggest something that is a
perception that I think is not really true and that is that
people are terrified of nuclear power. Tennessee Valley
Authority is seeking to bring on a Bellefont plant that was
nearly completed and stopped because of various things a number
of years ago.
Every city council, the county commissioners and everybody
in that area is supporting bringing on that plant. We got
almost no objection from the people who live within a
significant radius of that community and they universally
recognize the benefits of a clean nuclear plant, well-paying
jobs, no truckloads of coal, no pipelines of natural gas, no
pollution into the atmosphere. It's just a win-win prospect if
it's economically feasible.
Chairman Jackson, I have one thing let's see if we can tie
down a bit. You did say in your public hearing on July 17 at
Rockville, a little self criticism on the endorsement process,
``A number of our enforcement actions, for instance, frequently
are not focused on what is safety significant and can serve
unwittingly the misdirected purpose of misdirecting licensees'
attention. There is a burden that we place on our licensees for
relatively low level, non-safety significant violations and we
need to look at that.''
That is consistent with this report that has been referred
to earlier where you've got an increased number of severity
Level 4 violations which are the least significant violations
and not the more serious ones.
I guess my question is--and we are behind you on this--will
you take steps to deal with this and are you doing so now, and
when can we expect results?
Commissioner Jackson. Let me take the question in inverse
order. I think you can expect results within the next 6 months.
Yes, we are taking specific steps, particularly with respect to
severity Level 4 violations in terms of how they are
dispositioned and how much burden we place on our licensees to
respond to them. The actual change, the staff is working on
that and it has to come to the Commission for its approval in
terms of this change in how we implement our enforcement
policy.
In addition, we had earlier but we see a need to enhance
the connectivity between our various severity levels and
consideration of risk significance. So we're taking specific
short-term steps with respect, particularly, to severity Level
4 violations.
Having said that, it doesn't mean that there will not be
those and it doesn't mean that we won't trend or track them
because they can be, if one gets to the heart of them,
precursors to the beginning of larger problems, but they do not
need to be if they are not risk significant, the burden on our
licensees that they have been. We want the plants safe, but we
want the resources focused as effectively as possible. When you
don't have new plants coming on line, which I could see would
utilize a lot of people, and you've got mature plants with
mature staffs, you should have less violations and probably
need for less regulators.
Senator Sessions. Mr. McGaffigan?
Mr. McGaffigan. Senator Sessions, that's the point I made
earlier in response to Senator Inhofe. The answer to your
question is yes and soon and I hope we can do even better than
the 6-months in terms of addressing this. Clearly, very little
violations going up by a factor of three over the last 3 years
doesn't make sense. We probably don't have the right threshold.
Mr. Colvin will cite a few later with regard to books being
left in the wrong place and if there were an earthquake, it
might--we need to get out of citing those sorts of violations
and focus on more significant things.
Senator Sessions. Mr. Diaz?
Mr. Diaz. Senator, one problem you and Senator Lieberman
referred to was public information and I didn't want to pass
the opportunity to tell you that we are concerned and we
believe that the Commission has a responsibility to present
factual information to the public, that we cannot let
information that does not reflect the safety significance of
each use to be propagated and actually scare the people of this
country.
A year ago, the Commission took steps to analyze how do we
address this interface. We are now finishing or have finished
the analysis and I'm sure my colleagues are looking forward to
presenting a better way to deal with public information that is
very responsive to the needs of the public.
Commissioner Jackson. May I make just two additional
comments?
What my colleague says is true. Coming out of our strategic
assessment and rebaselining, we had a specific public
communications initiative. There were certain points that
Commissioner Diaz particularly brought up with regard to how
the agency presents results of its inspections, assessments, et
cetera that were folded into that, and we expect to see some
major change.
We have an agency of engineers----
Senator Sessions. They don't like change? Lawyers don't
like change.
Commissioner Jackson. We have lawyers too.
My final comment is that it may be true, and it is true,
that there has been a run-up obviously in the severity Level 4
violations, but interestingly enough they actually came out of
steps taken to correct a different problem. That problem had to
do with consistency, consistency of documentation, consistency
of what gets reported through inspections, consistency in
approach from region to region. That had been a problem at NRC.
In doing that, coupled with the rising ability level of our
inspectors and more of a focus in certain areas on compliance,
has led to a run-up in these severity Level 4 violations. The
Commission has been taking a look at that and I already
outlined the steps the staff is taking to address that issue
but we still have to maintain the consistency.
Senator Sessions. You have to be strong because established
governmental agencies don't like change and you're going to
have to be strong and we will back you. We expect some progress
in this area since all of us agree that it is a problem and I
hope that you can report soon that you have made progress.
Commissioner Jackson. Thank you.
Senator Inhofe. Thank you, Senator Sessions.
I have one last question. I understand the meeting you had
on July 17 was with industry and the purpose was to have a
dialogue to bring out these problems. When was there one before
that?
Commissioner Jackson. We had a meeting earlier in the
summer with NEI to talk about design basis issues.
Senator Inhofe. So you have had regular meetings with
industry, this is not just a first?
Commissioner Jackson. Well, we have meetings, public
meetings, as a commission, sitting as a commission.
Senator Inhofe. No, I'm talking about meetings like the
July 17 meeting?
Commissioner Jackson. We don't always have Commission
meetings with industry but industry representatives----
Senator Inhofe. Was this a meeting with industry?
Commissioner Jackson. This was an open Commission meeting.
Senator Inhofe. You've been there since 1995, have you had
other ones like this?
Commissioner Jackson. We have had meetings on specific
topics with industry, yes.
Senator Inhofe. I'm very pleased. We're going to be hearing
back on specific things. I like the idea of the 6-months. Let
me go ahead and announce right now that we will be having a
meeting of this committee which will be 6 months from today,
the 28th of January, to follow up. We look forward to seeing
you and having a lot of streamlining and a lot of progress made
at that time.
Thank you so much for taking the time to come and we'd now
invite the second panel to appear.
I would introduce our second panel. We have, first of all,
Mr. Joe F. Colvin, President and CEO, NEI; Dr. James T. Rhodes,
Chairman and CEO, Institute for Nuclear Power Operations; Ms.
Gary Jones, Associate Director, Energy Resources and Science
Issues, GAO; Mr. David Lochbaum, Nuclear Safety Engineer, Union
of Concerned Scientists; and Mr. Steven M. Fetter, Managing
Director, Global Power Group.
Ladies and gentlemen, you heard the instructions to the
first panel. We will have 1 hour and 5 minutes here and I know
that we probably took too long for the first panel, but we have
a lot of things to ask you. If you could hold your opening
statements to a minimum, hopefully we won't have to worry about
the red light coming on.
We will start with you, Mr. Colvin.
STATEMENT OF JOE F. COLVIN, PRESIDENT AND CEO, NUCLEAR ENERGY
INSTITUTE
Mr. Colvin. Thank you, Mr. Chairman.
I'll try to keep my comments brief.
We've had considerable comments about the important role of
nuclear energy in the United States as it relates to energy
supply and energy security, diversity and its emission-free
basis. The point I'd like to make in that area is that as we
move forward in our industry and as we move to a competitive
electricity market, the most significant business uncertainty
that we face from the industry standpoint is not the cost of
fuel or other parameters as we go into competition, it's really
the uncertainty of the regulatory process that we face. This is
the safety regulatory process and the requirements that are
imposed that really do not directly relate to public health and
safety.
In response to Senator Lieberman's statement about the
public and subsequent statements, we really see that 70 percent
of the public at large supports nuclear energy both now and in
the future in the United States and yet they are somewhat
confused by the messages they receive from the media, from
reports from the Nuclear Regulatory Commission and others which
cause some uncertainty in this process. I think Mr. Fetter will
likely talk about the uncertainty that causes within the
financial community.
The second point I'd like to talk about is we have seen
important change in the regulatory program, a program that has
really evolved over 40 years. However, that change has not been
effective in making the transition that needs to be made given
the levels of performance in the industry.
While we see comments by this Commission and initiatives by
this Commission, the reality is, as Mr. McGaffigan pointed out,
I've testified before committees such as yours over the past 15
years and I've been involved in five previous initiatives with
the Commission to effect change in these fundamental areas, and
we really haven't seen that change.
That is why I think it is essential that this committee and
you, Mr. Chairman, participate and support these changes that
are necessary to correct these underlying cultural and
fundamental issues that exist within the process. While we
focus primarily on the discussion of regulations, the reality,
in my view, is that the problem is not just with the
regulations. It goes much deeper than that, and we have to look
at how regulations are interpreted, reinterpreted and how they
really are carried out by people in the field.
I think that there is an issue of burden of proof, issues
of various documents and processes that are used that go
outside the formal regulatory process, that really need to be
looked at that would bring some stability within the agency.
I'd like to make three recommendations in this regard and
I'll be happy to talk about these in more detail. First, we
believe that this committee should reauthorize the agency's
budget in 1 year increments until this committee and the
appropriations committees are satisfied that these changes are
being brought about.
My second recommendation, Mr. Chairman, you have already
taken to heart, and that is that the NRC should regularly
report to Congress, and you should continue to have oversight
hearings. You've already scheduled the first one of those for
early next year.
The last thing, which I think is a very important point and
a point that was made by members of the Commission, there needs
to be an independent review of the NRC's activities. I stress
the word independent. As Commissioner McGaffigan indicated,
we've been at this a long time, and there needs to be some
fundamental change. It hasn't changed, and there needs to be an
external look at how the agency does its business and how it
can improve its efficiency and effectiveness and how it can
carry out its important role in regulating the safety of
nuclear power today and into the future.
Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Mr. Colvin.
Dr. Rhodes?
STATEMENT OF JAMES T. RHODES, CHAIRMAN AND CEO, INSTITUTE OF
NUCLEAR POWER OPERATIONS
Mr. Rhodes. Thank you, Mr. Chairman.
I am Jim Rhodes, Chairman and CEO of the Institute of
Nuclear Power Operations, INPO, headquartered in Atlanta.
For those of you who may not know, INPO is a technical,
nonprofit organization with all U.S. utilities that operate
nuclear plants being a member. INPO was formed in 1979 in the
aftermath of the Three Mile Island nuclear accident. Its goal
is to promote the highest levels of safety and reliability in
operating nuclear power plants--to promote excellence, as we
say.
We have four cornerstone programs. First, we do periodic
evaluations of all the nuclear power plants in the United
States every 12 to 24 months; second, we provide a great deal
of training to nuclear plant personnel and accredited training
programs that are sites for training nuclear folks; third, we
analyze events that occur at various nuclear plants and make
sure that the lessons learned from these events are
communicated throughout the industry; and finally, we also
provide a range of assistance activity to all the nuclear
plants in the country.
We do not engage in public, media or legislative activities
to promote nuclear power.
Let me say a word about our relationship with the NRC. INPO
is independent from but its role is complementary to the NRC.
The ultimate goal of both organizations is the same, to protect
the health and safety of the public in operating nuclear power
plants. However, INPO is different in the sense that we promote
the highest standards in the operation of nuclear power
plants--beyond the basic regulatory requirements. As I
mentioned, we also share information among nuclear power plants
to enhance the safety and reliability of the operation of those
plants.
INPO grew out of a commission that President Carter
appointed in 1979, the so-called Kemeny Commission on the Three
Mile accident that said the industry should go beyond
regulations in operating nuclear plants.
Let me turn to the performance of the nuclear plants in the
United States. This has been alluded to as having greatly
improved over the last decade, and I just want to give you some
examples.
First of all, we in the industry have ten so-called
performance indicators that are objective and performance-
based. I have in my written testimony the record of those
indicators. It is INPO's annual report. I won't go into detail,
but as you can imagine, they cover virtually all areas in the
operation and performance of a nuclear plant: such as, what
percentage of the time is a plant forced off-line over the
period of a year.
I'd like to show you some examples to give you an
indication of how the industry performance has improved. If
you'll look over to your right, one of the performance
indicators is a so-called safety system performance. As you
well know, there are many safety systems in a nuclear power
plant, redundant systems. This indicator is a measure of the
percentage of those systems that meet very high standards of
availability, over 97 percent in most cases.
As you can see, over the last 8 years or so, this indicator
has gone from about 70 percent to 94 percent and exceeds the
goal the industry set some years ago of 85 percent, a goal that
we obviously should also achieve in the year 2000 because we're
beating it now. This is just one indication of the improvement
in performance in the industry.
The second chart is what we call our performance indicator
index. This is really a composite of all ten indicators on a
relative scale. This particular chart goes back to 1985, some
12 or 13 years ago. This shows on a scale of 100 the composite
improvement in the industry of these ten objective indicators.
It goes from 43 to 86.
Senator Inhofe. From what year to what year?
Mr. Rhodes. 1985 through 1997. It shows a tremendous record
of improvement in performance by our overall objective
assessment.
The third chart has information which really comes from the
Nuclear Regulatory Commission and it gives the significant
events which may be personnel errors, loss in some function of
safety equipment, or whatever, over the same period, 1985 to
1997. As you can see, there has been a tremendous improvement,
in fact an improvement by a factor of 20 between 1985 and 1997.
As I said, this is NRC data. INPO has data that
corroborates this very much, so this just gives an indication
of how much the industry performance has improved in the
nuclear area over the last decade or so.
Let me conclude my remarks by saying the industry, as you
well know, does face challenges. We've talked about the need
for nuclear power from the standpoint of environmental
favorability. Also, I don't think it has been mentioned, but I
think the pressures on nuclear power are increasing from an
economic standpoint because of the economic deregulation in the
electric utility industry that has been going on several years
now.
I think its is really incumbent upon all of us involved in
the industry to make sure that plants are certainly safe and
reliable, but also economic. The three are very compatible.
Prior to coming to INPO a few months ago, I was head of
Virginia Power for 26 years and about a third of our
electricity is generated by nuclear power I'm proud to say, at
least in the decade of the 1990's, Virginia's power plants
operate very safely and also very economically, and they are
very compatible factors.
I think all of us, including the NRC, need to focus on the
most efficient way to operate and regulate these plants as we
go forward.
Senator Inhofe. Thank you, Dr. Rhodes.
Ms. Jones?
STATEMENT OF GARY JONES, ASSOCIATE DIRECTOR, ENERGY, RESOURCES
AND SCIENCE ISSUES, RESOURCES, COMMUNITY AND ECONOMIC
DEVELOPMENT DIVISION, GENERAL ACCOUNTING OFFICE
Ms. Jones. Thank you for the opportunity to be here this
morning, Mr. Chairman, to highlight several points from our
report issued last year on aspects of NRC's nuclear regulatory
program.
As I think all the members of the subcommittee mentioned
this morning, and as our report also points out, the Congress
and the public need confidence in NRC's ability to ensure that
the nuclear industry performs to high safety standards. While
we did not make judgments about the safety of nuclear plants or
the appropriateness of NRC's current regulatory structure, the
many safety problems identified at plants we examined raised
questions about whether NRC's regulatory program was working as
it should.
One of the reasons we couldn't make judgments about the
safety of plants is that GAO starts its work by looking at the
criteria that underpins any program. The difficulty in this
situation is that NRC does not precisely define safety.
Instead, it presumes that nuclear plants are safe if they
operate within their approved design basis and meet NRC's
regulations.
The foundation of NRC's confidence that nuclear plants are
safe is the redundancy of safety systems or as they call it,
defense in-depth. As a result, safety significance is difficult
to determine and becomes largely subjective because NRC does
not have an effective way to quantify the safety of plants that
deviate from their approved designs or violate regulations.
The conditions found at the three plants we reviewed
challenged NRC's confidence that plants are operating as
designed. It recently completed inspections focused on design
basis at 16 other sites and found significant problems,
including instances in which licensees had not properly tested
safety-related components or documented design modifications
related to safety systems.
Let me turn to NRC's inspection program for a moment. One
goal of that program is to ensure that deficiencies will be
corrected in a timely way. However, we found that the licensees
of the three facilities we examined failed to fix substantial
and recurring safety problems in a timely manner. NRC allowed
these licensees repeated opportunities to correct their safety
problems. However, implementation of corrective action plans
were never fully completed and although management promised to
fix problems but did not always follow through. Also, NRC used
enforcement actions too late to effect change.
For example, all but 5 of the 43 deficiencies that NRC
required Salem to fix before its reactors can be restarted had
been cited as problems before the plant shut down. NRC allowed
Cooper to restart its reactors because the licensee promised to
fix recurrent problems, but after restart, NRC found problems
that had not been corrected.
The nuclear industry and NRC officials widely agree that
the competency of a nuclear plant's management is perhaps the
most critical factor in safe performance. NRC cited management
weaknesses as a cause for safety problems at the three plants
we reviewed and recently found weak management processes and a
lack of management involvement as the principal reasons for
safety problems found at two plants in Illinois.
Despite the importance of competent management to safe
operations, NRC does not assess management as it relates to
safety in its plant inspection program. Individual inspection
reports specifically avoid any references to management's
competency. NRC's references to management weaknesses are
usually made retrospectively, often after the licensee admits
to management deficiencies and after the window of opportunity
to provide an early warning has closed.
Although NRC's watch list targets regulatory emphasis to
correcting problems before they lead to shutdown, NRC has been
slow to place problem plants on this list. For example, the
Salem and Millstone plants were under discussion by NRC for at
least three to 4 years before they were placed on the watch
list. Further, an Arthur Andersen report identified 10 plants
that were not placed on the watch list but whose performance
indicators were similar to those that are listed. This
inconsistency has been attributed in part to the lack of
specific criteria for making decisions on a consistent basis
and the subjective nature of the process.
As others have clearly articulated this morning, Mr.
Chairman, the world is changing for the nuclear industry.
However, that underscores for us the need to ensure that NRC's
regulatory program works effectively to protect the health and
safety of the public.
The NRC said this morning it is assessing change on a
number of fronts, but we believe that NRC's future direction
needs to be anchored in goals and objectives that are clearly
articulated and performance measures that hold NRC managers as
well as licensees accountable. In addition, NRC needs reliable
information on which to determine safe operations and
enforcement structure that clearly lays out a range of
sanctions that will be imposed on the basis of potential
seriousness of the safety problems found.
I also wanted to note, Mr. Chairman, that I think our work
has been characterized this morning as being maybe counter to
what the industry wants. I think the kinds of recommendations
that we made to the NRC to clearly lay out the expectations, to
hold licensees accountable for what they say they're going to
do in the time frames they say they're going to do it, and also
to lay out sanctions associated with various levels of safety
risk is consistent with what the industry is looking for.
Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Ms. Jones.
We're going to go to the next witness but I want to make
sure I wrote this down correctly. I'm still in a little bit of
a shock here. Did I understand you to say that the NRC should
assess the performance and competency of the licensee's
management? Is that correct?
Ms. Jones. Yes, sir. What we're talking about is as the
inspectors go out, if they have observations about management,
the safety culture.
Senator Inhofe. I'll have some questions about that at the
appropriate time.
Mr. Lochbaum?
STATEMENT OF DAVID LOCHBAUM, NUCLEAR SAFETY ENGINEER, UNION OF
CONCERNED SCIENTISTS
Mr. Lochbaum. I appreciate this opportunity to testify
before the subcommittee regarding this important topic.
The industry representatives on this panel are justifiably
proud of nuclear power's record over the past decade and indeed
they paint a very rosy picture in our view that the industry's
healthy performance warrants redirected NRC oversight effort.
My objective today is to caution you to watch out for the
thorns as you enjoy these roses.
The industry sometimes touts its record in ways that
implies it was achieved in spite of the NRC. That is not fair
or accurate. The industry's performance over the past 10 years
benefited from NRC initiatives such as the maintenance rule and
its need for plant-specific risk assessments and also from the
NRC's support for industry initiatives such as cost beneficial
licensing actions.
The industry cites data such as higher plant capacity
factors, fewer plant trips and fewer safety system actuations
as evidence of healthy performance. This information is valid
but does not provide the complete picture. At this moment,
there are nine nuclear plants shut down in the United States
protracted shutdowns of many months. These plants are not shut
down because the NRC issued them too many uncited and Level 4
violations or because the NRC is dragging its feet on risk-
informed regulation. These plants are shutdown because their
owners failed to properly discharge their recordkeeping of how,
what, when and why information for their emergency equipment
which is also known as design control and configuration
management.
In the late 1980's, NRC inspections at several plants
revealed that their owners had made physical changes to
emergency equipment to solve one problem only to create other
problems. These errors occurred because these owners had not
fully understood or had lost track of the design basis for this
emergency equipment.
The NRC proposed a new rule that would have required all
plant owners to fully document the design basis for their
emergency equipment and to recreate any information that was
missing. The industry opposed this rule and convinced the NRC
that they could handle the problem internally. So the NRC
dropped its plans for the rule.
The industry was wrong. Millstone has clearly demonstrated
that some nuclear plants have operated with vital safety
systems that would not or may not have functioned had there
been an accident. For example, owners of the Big Rock Point
plant in Michigan reported just 2 weeks ago that one of its
safety systems would not have functioned during the last 13
years of this plant's life.
An NRC team discovered in 1996 that the piping for safety
systems at the Head of Neck plant in Connecticut was too small
to ensure adequate cooling of the reactor core during that
plant's entire 28 year operating lifetime. The nine plants
shutdown today are fixing design control problems like these.
We should not be operating nuclear power plants unless we
know with reasonable certainty that they are safe, their
systems needed to protect the public during an accident will
work. There have been an alarming number of reports in recent
years which clearly show that several plants have operated
without fully functional safety systems. These cases are Maine
Yankee, the Donald C. Cook plant in Michigan, Beaver Valley in
Pennsylvania, Millstone and Big Rock Point. In these cases, the
public was protected by luck as much as by defense in depth.
Speaking of being protected by luck, the industry wants to
push the NRC more rapidly towards risk-informed regulation. The
development of plant-specific risk assessments this past decade
has provided valuable insights which promoted many plant owners
to voluntarily make physical changes to their facilities that
increased their safety margins. Unfortunately, these risk
assessments assume that the plants have no design control and
configuration management problems. For some plants, this is not
a valid assumption. Thus, their risk assessments are inaccurate
and nonconservative. Design, control and configuration
management problems must be corrected at all nuclear plants
before risk-informed regulation can advance.
The industry cites examples of NRC overregulation but there
are examples of underregulation as well. Both sets of these
examples are probably valid because the NRC regulates
subjectively and inconsistently. In a report entitled, ``The
Good, the Bad and the Ugly,'' which we issued last month, we
documented a wide gap in safety performance in our ten plant
focus group. This discernible difference is due to the NRC's
subjectivity. We think instead the NRC should develop objective
standards which it consistently enforces, particularly when it
comes to decisions about whether problem plants should be shut
down or allowed to restart. It is a daunting challenge but we
think it can be done.
Commissioner McGaffigan pointed out during the July 17
stakeholders meeting that the NRC does a good job on matters in
its spotlight. We fully agree with this contention, although we
think the NRC needs a larger floodlight. This little penlight
job isn't going to allow the NRC to handle the important items
on its plate in a timely manner.
The NRC could do a better job if it developed and also used
good procedures. Procedures are like the conveyor belt in a
factory, they move work products from one station to another
until the work is completed. Good procedures are like a strong,
wide conveyor belt because they handle most of the work items.
Bad procedures are like a thin, unreliable conveyor belt
because too many items must be hand carried throughout the
process. The NRC needs to have better and to follow better
procedures.
I must comment briefly on an industry complaint about the
service it gets from the NRC. In recent years, a top NRC
priority has been its review and certification of advanced
reactor division. To our knowledge, a line of potential buyers
for advanced reactors is not forming anywhere in the country.
However, there seems to be a market for these things overseas.
We do not oppose efforts to improve U.S. trade, it is simply
incomprehensible to us that nuclear safety issues would linger
while the certification of advanced reactor design gets fast
tracked through the agency.
In closing, I'd like to thank the subcommittee for
providing this opportunity to share our views with you.
Thank you very much.
Senator Inhofe. Thank you, Mr. Lochbaum.
Mr. Fetter?
STATEMENT OF STEVEN M. FETTER, MANAGING DIRECTOR, GLOBAL POWER
GROUP, FITCH IBCA, INC.
Mr. Fetter. Today I will offer my views based on my
membership in the financial community at Fitch IBCA, which is
an international rating agency based in New York and London,
but also based on my experience as a former State utility
regulator as Chairman of the Michigan Public Service
Commission.
The Nuclear Regulatory Commission is at the center of
investors' perceptions with regard to financial risks facing
the nuclear industry. To the extent that the NRC carries out
its responsibilities in a consistent and predictable manner,
the financial community gains comfort and investors are more
willing to put forward their dollars into the future.
I personally find it difficult to envision a competitive
market developing around the country without nuclear power
playing a significant role. As we heard earlier, it provides
about 20 percent of electricity supply currently and with
stranded cost reimbursement being provided, almost totally and
completely by State regulators, many are counting on the low
variable cost of nuclear power to support a competitive
industry going forward.
To achieve that goal, the NRC will have to balance their
oversight responsibilities versus the necessities that a free
market requires. In the past, it's been difficult for investors
to predict with any certainty just what factors the NRC would
use in rating plants, in modifying SALP ratings, or in putting
plants on or off the watch list.
As a former regulator, I can appreciate the pressures that
the NRC operates under. It has a statutory scheme that seems
aimed at strict adherence as a goal, but when operating such a
system with so many standards and requirements, it makes it
very difficult for utilities to allocate resources and it also
makes it difficult for the financial community to assess risk.
This is very important from the financial community's point
of view because the repercussions are so severe. For example,
when a plant goes on the watch list, the utility owning that
plant usually ends up with a lower stock price, reduced access
to equity markets, weakening bond and commercial paper ratings
and therefore, a higher cost of debt.
Probably the biggest fear is that once something goes wrong
at a nuclear facility, there are so many regulations and
standards that the NRC has the ability to find many other
violations or potential violations and this could result, and
often does result, in prolonged outages.
The situation probably applies to every plant in the
country. As one CEO confided to me, and this is someone who
praises Chairman Jackson's leadership at the NRC, ``Under the
current system, every nuclear plant in the country is 10
minutes away from being off line for a year or two.'' Needless
to say, a situation like this creates a great deal of unease
among debt and equity investors and inhibits new investment in
nuclear as competition comes to the electric sector.
Interestingly, I called a few utilities that have had close
interaction with the NRC over the last few years. I asked them
for the pros and cons of their experience and they said, thanks
but no thanks, they would just as soon keep their heads down
for fear that if the NRC or the staff so desired, there are so
many regulations, requirements and standards that they could
find something wrong at any utility plant, nuclear plant in the
country.
What this points to is the crucial nature of the
sensitivity the NRC will have to bring to companies, utilities,
that will be moving into a competitive environment with nuclear
plants. It is incumbent upon the NRC to differentiate between
safety items and nonsafety items with strict and strong
vigilance on safety and more flexibility on nonsafety.
During my time as chairman of the Michigan Public Service
Commission, we had great success with performance-based
ratemaking which provides more discretion to the utilities
within limits and it brings mutual benefits to shareholders and
ratepayers. The time is right for risk-informed, performance-
based regulation at the NRC and I'm encouraged by Chairman
Jackson's comments earlier today.
In closing, let me say that the financial community is
watching closely the license renewal process and also the
potential transfers of licenses from one company to another. If
the NRC can deliver on its promise of a fair, effective and
efficient license renewal process and shows a similar resolve
with regard to the potential transfers of licenses, it points
toward continued financial support for nuclear which would
ensure a place for nuclear power in the new competitive
electricity environment.
Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Mr. Fetter.
Ms. Jones, don't take this personally. One of the other
committees that I chair is the Readiness Subcommittee to the
Senate Armed Services Committee and we work so closely with the
GAO and they've been a real godsend to us in making
evaluations, but I just must be missing something here. It's
never occurred to me that it could be the function of a
regulator to assess the performance and competency of
management.
The bureaucracy normally who is in front of this committee
is the EPA and I can't imagine Carol Browner assessing the
competency of the management of Halliburton or OxyUSA or the
FAA assessing the competency of the management of Boeing.
I would just like to ask any of the other four if you
believe that it's either appropriate or if they have the
necessary skills to do what has been suggested here, and
particularly you, Mr. Fetter, where does the market fit into
this?
Mr. Fetter. I should say first, as a former regulator, I
certainly had opinions on the quality of the management of the
utilities within my State. As to my ability to make public
assessments and pronouncements, I would be much less
comfortable with regard to that.
As far as the market, the markets make assessments on
managements----.
Senator Inhofe. Yes, the market can. The government, no.
Mr. Fetter. And I would expect that would continue. But I
would not think the market would support the NRC coming out
with a report card of management on a regular basis.
Senator Inhofe. Anybody else want to respond to that? Mr.
Colvin?
Mr. Colvin. There is an appropriate role for the NRC to
look at management and management's ability to safely operate
their facilities. That role currently is embodied in the
regulations. That is part of their initial review for
licensing. The NCR looks at the experience levels of
management, the background, and things of that nature. That's
part of the licensing decisionmaking process. I think that
certainly is appropriate.
The issue you raised, which is the competence of management
in their day-to-day decisionmaking, is an inappropriate role
for the agency.
Ms. Jones. Mr. Chairman, might I clarify in terms of GAO's
position on that issue because when we talk about management
competence, we are talking about safety culture as it directly
relates to the safety operations of the plant.
I think our report points out that you've got inspectors at
those plants on a day-to-day basis and if they have
observations to make about decisions that are being made that
would directly affect the safety culture, that is just another
piece of information that senior NRC management can use to look
at the safety of the plant.
Senator Inhofe. All right. Thank you for that
clarification.
You heard me during the first panel quote two individuals.
Does anyone want to respond to those quotes that I repeated to
the first panel or were you listening?
Ms. Jones. We were listening but we didn't write them down.
Senator Inhofe. Let's go back to this July 17 meeting. I'd
like to have someone from industry, probably you Mr. Colvin,
characterize the nature of that meeting, what was accomplished
at that meeting and comments about that meeting you can share
with us.
Mr. Colvin. As a participant of that meeting, I would first
say thanks to the Chairman and the Commission and to NRC senior
management for establishing that meeting. That was a very
positive step, I think an initial step in trying to bring about
a reflection and introspection about some of the changes that
are necessary. I thought there was an excellent exchange of
ideas and concepts at that meeting. I'd like to take that as a
step to move forward in our dialogue with the agency.
Senator Inhofe. Was that the first such meeting that
followed that format?
Mr. Colvin. Yes, sir. That's the first such meeting that
industry has participated in with the Commission since 1994
where we had a meeting on industry concerns about the
regulatory process with previous commissioners.
Senator Inhofe. Wouldn't you think it would be a good idea
to add that to your list of three and make it a list of four
when you said 1 year reassessment, oversight hearings and
independent evaluation? Maybe this would be a good fourth thing
to add to that list.
Mr. Colvin. Yes, sir, it is an excellent opportunity.
Senator Inhofe. On the independent evaluation
recommendation, a lot was said about the Martin Report and
those recommendations. Does anyone have any comments to make
about the Martin Report?
Mr. Colvin. My understanding from reading the report is
that Mr. Martin looked at the agency with a few basic tools
used in organizational reviews. He looked at positions where
there was a one-over-one reporting relationship. In most
organizational reviews, that shows that one person is
unnecessary. Then he looked at where there was duplication
across branches of the agency where similar functions were done
in different branches or departments.
That review came up with an approximate 700 full time
employee equivalents, that could be reduced from the agency
without really losing any process efficiencies. As Senator
Sessions indicated, the Commission needs to undertake a very
introspective look at its staffing levels and processes.
In order to do that, they have to go back to the basics. As
I mentioned earlier, we've talked a lot about regulations and
risk-informed and performance-based regulation models. In large
part, the regulations are only part of the problem; it's the
inconsistency of their implementation, it is the fact that I
believe the staff does not abide by its own rules and
regulations. Third, there are other means that are used to
exercise commitments or extract commitments from the
licensees--confirmatory action letters, responses to generic
letters and bulletins, the SALP process, as well as the watch
list, that tend to undermine this relationship and confidence.
Senator Inhofe. I had some other questions that I think
probably Senator Sessions is going to follow up on since he
brought it up insofar as the comparison. It's always helpful to
us since we're not experts and normally people out there are to
see how we compare whether it's to other countries, whether
it's apples and apples as Chairman Jackson suggested maybe it
wasn't in this case. I hope we can get a chance to pursue that.
Senator Sessions?
Senator Sessions. I think if you ask the people who
populate NRC, they'll say they're not overstaffed, but
management has got to challenge the culture, I believe, and
find out exactly what the level is that is appropriate for the
taxpayer and the industry who has to pay fees which is a form
of tax, who should not pay more than they should pay.
Certainly, I share that.
Let me ask those of you from the industry is there, in your
opinion--first of all, I believe Mr. Fetter mentioned fear. I
talked to someone recently and they were just very cautious.
They didn't want anything said that they complained. That was
clear.
Is there in private conversation a consensus fairly stated
that regulations are not effective to accomplish what they want
and the regulators often are unwise in applying the regulations
that exist and significant improvement could be accomplished?
Mr. Fetter. I wouldn't use the word unwise. They're going
about the task to find anything that might be violating a huge
list of regulations. Perhaps, in the old world, a developing
nuclear industry had more of a place than in a more competitive
world. I think the industry and the regulators have the ability
to work together to figure out where their attention would be
best focused in the future. For instance, Mr. Lochbaum
mentioned a few safety systems that were uncovered that would
not have operated properly.
I'm not sure if perhaps there were risk-informed,
performance-based regulations, then more of the resources could
go toward the more important aspects he points to and less of
the resources would be put towards things that are not safety-
related.
Senator Sessions. Do you agree with that, Mr. Colvin?
Mr. Colvin. Absolutely, Senator Sessions. We have initiated
on the industry's behalf a number of proposed changes over many
years. There is a risk-informed, quality assurance program
petition for rulemaking that's been under review by the NRC for
over 4 years; we have other examples of where we are trying to
focus our resources and the NRC's resources on what is really
important.
I would like to add one comment to the issue. The issue is,
in many ways, an uncertainty in what is required from the
regulatory inspector perspective. That causes uncertainty for
the licensee, the utilities and uncertainty even for the NRC
staff.
That uncertainty then results in some tension and debate
that ends up chilling the environment that Mr. Fetter has
talked about and giving people concern about raising an issue
because ultimately it will come back to you.
I think we also see that chilled environment within the
staff. I talk to a number of NRC staff in the field who are
unwilling to differ with agency management on what should and
what should not be done. That's why I mention we really need to
look deeply into the underlying issues that affect the
relationship and affect how we regulate these plants. That's
where we need to focus our energies.
Senator Sessions. Mr. Lochbaum, I appreciate your comments
and concerns.
We could probably talk about this for a long time, but just
briefly, as a concerned scientist, as you evaluate the utility
of nuclear power, do you consider things such as black lung and
so forth that is caused by coal mining or air pollution, or the
danger of natural gas explosions and losses of life in that
fashion? Have you considered that, at least within the United
States, all the indications are that it's getting safer and
safer. Presumably a newer plant would be even safer than the
older plants because we've learned a lot about our designs.
Isn't this a direction that the country ought to give serious
consideration, that is utilizing nuclear power more rather than
ending it?
Mr. Lochbaum. In my testimony, I point out that not all
indications show that everything is getting safer, just some of
the indications show that everything is getting safer, so I
guess I wouldn't buy into that.
Senator Sessions. Well, we haven't lost any lives in
nuclear power.
Mr. Lochbaum. That's true but the amount you could lose if
there was an accident is such that we need to avoid that rather
than prevent the next one.
Senator Sessions. We need to be careful.
Mr. Lochbaum. The Union of Concerned Scientists issued a
study last June in conjunction with five other organizations
that looked at this country's energy needs out through the year
2030 in order to meet environmental, economic and policy
issues. For the purpose of that study, we considered that the
current fleet of operating plants would run to the end of their
40-year lifetime. That assumption has turned out not to be good
because some of the owners have chosen to shut the plants down
early due to economics, but we assumed they would be there for
all 40 years.
We found that you could achieve all of our economic needs,
the environmental needs, objectives of the report without any
new nuclear power plants. I think we stand behind that report
in meeting global warming changes and climate change.
Senator Sessions. We're not turning our air conditioning up
too much.
Mr. Lochbaum. No, and we didn't advocate that either.
Senator Sessions. We've got more people and more demand, so
it's difficult for me to understand how we won't need more
energy. So you're prepared to provide that energy with fossil
fuel systems?
Mr. Lochbaum. No. It was renewable energy and energy
efficiency. I'll be glad to get you a copy of that report.
Senator Sessions. It hasn't proven to be a reality yet.
Dr. Rhodes, are you confident that the nuclear power
industry is safer today than it was 5 years ago or 10 years
ago, the plants that are operating?
Mr. Rhodes. Yes, Senator Sessions, I am. I think it's
significantly safer than it was a decade or so ago.
Senator Sessions. Mr. Fetter and Mr. Colvin, you discussed
the possibility of the problem of investors making decisions.
Do you foresee investors in the near future making a decision
to expand nuclear power? Do you see any immediate prospects of
that?
Mr. Fetter. I think the decision facing investors right now
is whether to invest in existing plants. That was the
discussion earlier--about the long lead time and the license
renewal process--whether investors will put up more money now
for existing plants.
Senator Sessions. To keep them running at the current
level?
Mr. Fetter. To keep them running or to have their licenses
extended. If a plant is going to go off line 8 years from now
and will not be extended, investors will view it differently
than if they find out it can go on for another x number of
years beyond that.
As far as a new round of nuclear, it would seem to me what
investors would want to see prior to that would be greater
sensitivity at the NRC. I described that they have to be
sensitive to the new challenges of the competitive market that
the utilities will face, some standardization or streamlined
process for figuring out the right design for the next
generation of reactors, and third, but probably most important,
as to what you can do, Senator Sessions, would be solving the
high level nuclear waste issue. Until that is solved, there can
be no serious thought of investment for a new generation.
Senator Sessions. So you would say that not only do we have
the obvious risk of nuclear materials all over the country
stored on-site is not a healthy thing, but you're saying that
until we get that solved, there's not going to be any serious
evaluation of new nuclear plants?
Mr. Fetter. That would be my view.
Senator Sessions. I think that's a challenge for us, Mr.
Chairman, because I do not feel that we have done a good enough
job in bringing that problem to a conclusion.
Senator Inhofe. Thank you, Senator Sessions.
To show that Senator Lieberman is a man of his word, he
said he'd be back and he's back. Senator Lieberman, take all
the time you want.
Senator Lieberman. Thanks, Mr. Chairman. I regret that I
had a meeting associated with my responsibilities on the Armed
Services Committee that I had to attend.
I invite the witnesses to tell me whether I'm asking
questions that you've already covered and not force you to go
through it again.
I want to start with a question to Ms. Jones and Mr.
Lochbaum which is that each of you, in one way or another, has
expressed concern that the NRC does not have a clear definition
of safety when monitoring safety at nuclear power plants.
We had this come up in our experience in Connecticut and I
wanted to ask you both what should the NRC be doing or have
they done enough since your criticism to clarify the definition
of the basic concept or goal which is the safety of these power
plants?
Ms. Jones. Senator Lieberman, I think as the Chairman
stated this morning, Chairman Jackson, they are moving in that
direction but since our report was issued, they're just really
starting to take steps in that direction.
I think what we were looking for was for them to clearly
lay out expectations in terms of well-defined boundaries. We
understand that it can't be a black and white; there is always
going to be some subjective judgment made in terms of nuclear
power plant safety but there needs to be better guidance so
that the Commissioners, senior NRC managers, as well as the
inspectors that are out there on a day-to-day basis, understand
how safe is safe and be able to make judgments about that in an
informed way.
Senator Lieberman. Mr. Lochbaum?
Mr. Lochbaum. I would agree with that position. We think
the NRC is sincere and is moving in the right direction, but we
think they need to pick up the pace a bit because they are
still quite a distance away from being at the point where they
have subjective criteria that everybody could look at whether
the industry, the public or within the staff itself to
determine when a problem plant needs to be shut down for safety
reasons or when is it safe enough to restart a problem plant.
We think that criteria is lacking right now and it's a very
subjective process. I think that is one of the reasons there is
some uncertainty or some lack of confidence in the regulatory
process.
Senator Lieberman. Is it possible to make it more
objective, less subjective?
Mr. Lochbaum. If we knew an equation that could do that, we
would definitely provide it. We think, as a minimum, you could
come up with an empirical database. There have been things that
have shut down plants in the past. So, as a minimum, when a new
issue comes up, you could say was this equal to what we shut
down that plant last year for? If it was, then you'd consider
shutting down the plant. We don't even see that standard being
applied today.
Senator Lieberman. Do any of the other three on the panel
want to comment on that question which is how well or poorly
the NRC defines safety, which is what they're supposed to be
all about? Mr. Colvin?
Mr. Colvin. Senator, I'd like to comment on an element of
that. We need to move forward in that direction with criteria
as objective as possible. I support Mr. Lochbaum's statements
in that regard.
We need to move in that direction. In fact, as the Chairman
indicated, the industry has proposed an assessment process that
includes and overlaps the inspection and enforcement processes
in a way that really ties it as directly to safety as we can
conceive. I think if we can take out as much of the uncertainty
or inconsistency in the application of the assessment process,
we will make a significant step forward.
As one example, as pointed out by Mr. Lochbaum in the July
17 meeting, we have one criterion. We allow a plant to continue
operating with some known deficiencies because we've evaluated
those as not being important enough to safety to shut the plant
down, and yet when the plant shuts down for any other reason,
those deficiencies become barriers to allowing the plant to
restart.
If there are issues which need to be dealt with from a
safety perspective, they ought to be dealt with, and we would
support that. I think it's that inconsistency and that change
that takes place over time that brings about a lot of the
uncertainty that we see in this process.
Senator Lieberman. Mr. Fetter, Dr. Rhodes?
Mr. Rhodes. I might just comment on the INPO experience
over the last 18 or 19 years. I described the evaluations that
we do and unfortunately, Senator, we do periodic evaluations of
plants every year or two and use these performance indicators.
We have tried over the years to be performance-based,
objective, and to minimize subjective evaluations. I think that
has helped the industry a great deal. I submit that as a case
study in what I think has been a very successful program.
Mr. Fetter. Senator, I should mention that I am not an
expert on nuclear engineering or physics, so I'm a good
representative from the financial community because there are
not many experts on those issues on Wall Street.
Accordingly, to the extent that the NRC and the industry
can help define what are the safety issues and what are less
important issues, then Wall Street is able to react and not be
so concerned. If the NRC brings something to the fore that is
not safety related, but needs to be corrected, that would be
important for us on Wall Street to know, that would affect our
investment decisions.
The way it is now, we do not have a strong sense of the
factors that lead to a plant moving onto the watch list--change
in ratings, rating of individual plants--and so we have to rely
pretty much after the fact on NRC actions and decisions.
Usually when that happens, the reaction of the financial
markets is much more severe.
Senator Lieberman. That's an important point. I'm going to
come back to that in a minute.
Let me pose my hearing of a conversation related to the
industry and ask any of you who want to respond to do so. I've
heard some people on the industry side seeming to criticize the
NRC for setting a standard for plant operation that is above
compliance with the rules. To some extent, we've touched on
this in the previous question about the definition of safety.
I think if I hear the industry, or at least these voices,
it is that striving for excellence beyond compliance is an
appropriate standard but it ought to be set by the industry
itself by its own actions and not imposed as it were, even
incentivized, by the NRC.
On the other side, I think those that would defend the NRC
cite other regulatory agencies which are trying to create
incentives, dare I mention EPA, to take regulated entities
beyond simple compliance to a higher standard at least with
incentives.
My question is, am I hearing this dialogue correctly but if
I am, what is your reaction to it? What is the appropriate role
for the NRC in setting a standard for nuclear power plant
operation that may be above compliance with the specifics of
law or regulation?
Mr. Colvin?
Mr. Colvin. Senator Lieberman, I think the issue is if you
look at the statutory underpinnings of the agency and the
Atomic Energy Act, they have the statutory mandate to issue
regulations necessary for the adequate protection of public
health and safety. Those regulations are not the minimum levels
necessary. There is margin, both in design and operating
parameters, built in.
The NRC then issues regulations that it has have determined
are a benefit to safety that is worth the cost of
implementation and other sections of those regulations. So we
have a mix of regulatory requirements that, in fact, have
established a threshold level that has some margin in it,
another set of regulations where there is an increased benefit
above that level, and then we have the NRC's inspection
activities and the utility's own management and other oversight
activities from INPO and other inspection activities that
provide an additional basis.
The real question comes down to how does the NRC know what
is required of the licensee if in fact you are continually
striving to do better and how does the licensee know what is
expected of it by the regulatory agency.
So you're into an area where the individual inspectors or
the individual operators are changing what the expectations are
on a continuing basis. In a regulatory system, that does not
work. It does work in the INPO model when the industry is
setting standards and learning as we go on how to improve,
because it's done by the utilities themselves.
Senator Lieberman. Mr. Lochbaum, do you have a response?
Mr. Lochbaum. I guess the way we view that question is it
gets back to the objective criteria. The NRC would come in and
evaluate a plant and if it feels that is a good performing
plant, all the findings will be discounted or there would be no
findings.
If that utility gets into regulatory distress for whatever
reason, all of a sudden those findings which were discounted or
not written up before are now given a violation stage or civil
penalty stage.
Performance doesn't change like that overnight. The NRC's
perception does. The NRC needs to have objective criteria to
understand what plant performance is. They don't have that and
that puts them into this box where a good performing plant
overnight comes on the watch list or is headed for the watch
list. That is not fair to anybody involved.
Senator Lieberman. That leads me to my final question--I
appreciate your courtesy, Mr. Chairman, with the time--and that
is on the watch list process which you referred to, Mr. Fetter.
We all go about our lives and are not focused; we turn on
the switches and a light comes on; and we are not focused on
nuclear power plants in our respective States or jurisdictions.
We were stunned when the actions were taken against the plants
in Connecticut. We had high confidence in the management and it
was a big surprise. To a certain extent, we had a little bit of
a covert early warning system going through some of the
whistleblowers, but still there was widespread surprise.
My question is about the watch list process. If you've
talked about this at length, don't talk about it at length
again, but the question is, is there something we should do,
that the NRC should do to provide an early warning system
regarding problem plants before they get on the watch list? Ms.
Jones?
Ms. Jones. Senator Lieberman, I think the watch list was
intended to be used to help plants not to become problems.
Senator Lieberman. To be the early warning.
Ms. Jones. And I think the point is that the NRC is really
taking too long to get plants on. They wait until a significant
event to put them on the watch list, whereas if they had put
them on earlier and maybe watched them, they wouldn't have
gotten to that significant event.
Senator Lieberman. Which might mean that there would be
more plants on the watch list at any given time but it would
have less--I don't want to say urgency but it would be for
reasons that are less dire as it were.
Mr. Fetter?
Mr. Fetter. I think the fact that it's unpredictable from
the point of view of the financial community leads us to treat
every plant like it might be on the watch list tomorrow. That
uncertainty does not help the industry and does not help the
ultimate consumer.
Senator Lieberman. Thanks to all of you and Mr. Chairman,
thank you.
Senator Inhofe. Thank you, Senator Lieberman.
Let me make a couple of observations and ask a couple of
questions.
One is safety is very important and we all understand that,
but I think almost equally important is the perception of
safety and I think we've come a long ways. When the percentage
was used--I believe there was one member in the first panel,
I'm not sure who used it--it was 70 percent of the public
approved of nuclear power. Is this a figure you've heard
before? Is this a good figure?
Mr. Colvin. The industry runs the public opinion polls
routinely and over the years, certainly since the mid-1980's,
somewhere between 65 to 75 percent of the public supports both
current nuclear energy in the United States and future building
of new plants as well as extending the licenses of these
plants.
The most recent study identified a fact that we also have
seen in our same reviews from the congressional staff
perspective and that is there is a significant perception gap
in what an individual thinks and what they believe their
neighbors think. So while I might say I support nuclear energy
and I'm part of that 70 percent, my good neighbor, Dr. Rhodes,
I might think he would not support it and we identified two
basic reasons. One is that it is somewhat controversial and the
individuals have little substantive information on which to
base any dialogue or debate. So we have to narrow this gap in
perception.
As you pointed out, Senator Sessions, when you go to the
local communities that have been and around these plants and
the people work in those areas, even in your State, Senator,
these people believe very strongly in that support and they are
confident in the safety. Sometimes that is undermined, then
that confidence gets rebuilt but as a matter of national
policy, about 70 percent has been the number over the last 10-
15 years.
Senator Inhofe. Do you think the heightened visibility of
other forces of energy and power and the problems associated
with them such as having gone through the particulate matter,
the ozone and all of this might be contributing to the public
acceptance of nuclear power?
Mr. Colvin. I think there is an important relationship
there that is being brought about the debate, the dialogue on
the Kyoto protocol and other issues. I guess there are two
factors that bring that about. One is certainly the
environment, the realization that we have to protect the
environment and what are the real means available to us to do
that. The second issue is the drive towards competition because
in the policy arena that drive is forcing a realistic debate
and in many ways, an unemotional debate, on the technologies
that exist to meet energy demand today and do it in an economic
way.
Nuclear power is the second cheapest source of electricity
in the United States on a marginal cost basis on average. It's
slightly above coal and it's about half of natural gas. We have
some factors like investment and other issues which are being
dealt with.
To answer your question, Mr. Chairman, we have this debate
that we're having on both competition and it's connection to
the environment which are really bringing about a new way of
thinking. I think that is being felt across the Nation by the
public because of their desire to look at the environment for
now and for the future.
Senator Inhofe. I would like, Dr. Rhodes, to have gone into
some of the ten indicators that you have and perhaps we can get
educated after this meeting on that. I'm very pleased with the
results you have and I want to see how you developed those
results.
Were all of you pretty pleased with the assessment in terms
of 30 to 36 months in terms of the relicensing process that
Chairman Jackson shared with us?
Mr. Colvin. That's a good start, sir. We hope that with
learning from the successes and obstacles in the first two
license renewal applications, the agency will be able to
improve that process significantly. I know that certainly is
the desire of the Chairman and the Commission.
Senator Inhofe. I would just say that that's one of the
reasons we will be having another oversight hearing and we will
take into consideration your concern for a shorter period of
time in terms of reauthorization. I think you probably know
it's been the history of this committee to use the 5-year
period. This might be an exception to that. We will be visiting
with members of the committee as well as the Chairman.
We will complete our hearing with questions by Senator
Sessions.
Senator Sessions. I'll just make a comment and see if
anyone else would express their thoughts on it.
One issue we haven't talked about, Mr. Chairman, is the
vacancies on the Commission. We have I believe two now. There
has been a renomination of Ms. Dokas. I've had an opportunity
to meet with her and I enjoyed that conversation.
I also know that there is another position that is
considered a Republican-appointed position. A name has been
submitted to the President for over a year and he has not acted
on that. I think we need to deal with that.
We need a full Commission. I think it would not hurt the
Commission to have another two Republican members of it. It
might be helpful to it. I think it's a pretty serious issue and
I think we ought to be pretty strong about this. We expect the
President to cooperate and we'll try to cooperate and improve
this agency. I just wonder would anyone else like to comment
about that subject?
Mr. Colvin. Here, here.
Senator Sessions. I would yield back my time, Mr. Chairman.
I would just say this. I think Chairman Jackson has
recognized some of the problems and we need to encourage and
support her in her efforts.
Senator Inhofe. Senator Sessions, I would say that
privately Chairman Jackson has expressed a concern for filling
those slots too. I think we'll try to use this committee to
encourage that to be done.
Again, on the 28th of January, all of you who are
participating today, I think it would be appropriate to have
you on that list so you might be planning in advance.
We appreciate very much the time you've given from both
panelists.
We are adjourned.
[Whereupon, at 11:47 a.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]
[Additional statements submitted for the record follow:]
Statement of Hon. Joseph R. Biden, Jr., U.S. Senator from the State of
Delaware
Mr. Chairman, thank you for providing me the opportunity to testify
before your committee today.
The NRC and its oversight responsibility of nuclear power plants
has been a top concern of mine for the last 20 years. As you know,
that's why I requested that this committee hold an oversight hearing to
further investigate the NRC's safety enforcement record.
The NRC's lax safety record was detailed in a 1997 GAO report that
I--along with Senator Lieberman--requested, which concluded that there
was an attitude within the NRC, a ``culture of tolerating problems,''
that allowed nuclear plants to deteriorate, year after year.
Frankly, my concerns about the NRC originated back in the mid-
1970's with the Salem Nuclear Generating Facility, which is located
practically in my State's backyard--just across the Delaware River.
Repeated serious incidents over years and years were met with what
appeared to be reluctance on the part of the NRC to take the type of
tough action needed to ensure the protection of the public health and
safety.
Just a couple of examples: In 1983, an automatic safety system,
designed to stop nuclear reactions when the plant's computer determines
the reactor is approaching danger, failed twice in 4 days. NRC seemed
unwilling to require improvements in the plant and allowed for a
restart with no assurances that the plant was safe. In November 1991, a
devastating accident shut down operations for months, after three
control valves failed, allowing the main turbine and generator to spin
to its destruction.
Just a year later, a computer glitch in the control room knocked
out dozens of warning lights and alarms, freezing indicator panels for
more than an hour and a half, without anyone noticing that something
was wrong. And in 1994, operators lost partial control of the reactor
pressure and temperature for more than 5 hours. Yet, despite this
checkered past, NRC repeated avoided taking aggressive action. Let me
briefly discuss the findings of the 1997 GAO report. The report
investigated NRC's oversight and safety conditions at three nuclear
generating facilities: the Salem Generating Station in Salem, New
Jersey; the Millstone Nuclear Power Station near New London,
Connecticut; and the Cooper Nuclear Station near Brownville, Nebraska.
Among the GAO's findings:
<bullet> The NRC failed to take aggressive enforcement action on
safety requirements.
<bullet> When violations were uncovered, NRC often relied on the
plants' promises to make changes--yet rarely followed up to ensure
that corrective measures were taken.
<bullet> NRC's lack of aggressive action when problems were first
reported made unsafe conditions at the plants worse. For example:
GAO found that of the 43 deficiencies that must be addressed before
the Salem reactors could be restarted, all but 5 existed when the
reactor was operating. When the NRC did act, it was often too late.
<bullet> Finally, competent plant management, which everyone agrees is
key to safe operations, was not even assessed directly in NRC
inspections and reports.
So what can be done to rebuild the public's trust in the NRC and
make sure that these plants are operated safely? This congressional
hearing is one step to further explore NRC's shortcomings and what the
Commission can do immediately to further address these failings.
I would urge my colleagues to keep the heat on the NRC; to demand a
top-to-bottom review of its inspection processes and insist that this
agency do a much better job of seeing to it that problems are detected
and dealt with in a timely manner.
Finally, the NRC must assess the competency and performance of
plant management. While we want to encourage more effective industry
self-policing, we need more than that if we are going to be confident
of the public's safety. We need to have the mechanisms in place to make
sure that we never have a lax management team running any nuclear
plant.
Now, to be fair, the NRC has taken some positive steps over the
past year to address these problems. I also think the new management at
the Salem Nuclear Power plants has made significant progress since it
voluntarily shut down both units in 1995. Deficiencies at both Salem I
and Salem II have been corrected and the units are operational once
again. Nonetheless, I would hope the NRC would welcome this opportunity
to restore the public's faith, and prove to us that we can rely on this
regulatory agency to do its job of protecting the public health and
safety.
Again, I want thank the chairman and committee for holding this
hearing. I sincerely hope that it leads to a more effective NRC that
places a greater importance on the safe operations at nuclear power
plants.
__________
Statement of Hon. Christopher J. Dodd, U.S. Senator from the State of
Connecticut
I would like to thank Subcommittee Chairman Inhofe and Senator
Graham for scheduling today's hearing on the Nuclear Regulatory
Commission (NRC). Last year, I joined with Senator Lieberman in
requesting a hearing to review management and oversight practices at
the NRC, with specific regard to its regulation of Connecticut
facilities. I look forward to hearing from the NRC and the General
Accounting Office (GAO).
I have been a long-time supporter of nuclear energy. A safe,
reliable source of power is critically important to the well being of
my state. Unfortunately, through first-hand experience, I have learned
what happens when the public loses confidence in the practices of the
nuclear industry and the agency tasked to regulate that industry.
For many years, the nuclear industry in Connecticut was plagued by
mismanagement and lax oversight, culminating with our four nuclear
facilities being placed on the NRC Watch List. The four facilities were
shut down and require NRC approval before being allowed to restart. In
July, the newest and largest of the facilities was allowed to restart.
Two of the older facilities have been permanently shut down and will be
decommissioned, and the remaining facility is preparing for restart.
During this troubling time in Connecticut, both the nuclear
industry and the NRC came under attack. The NRC levied millions of
dollars in fines on the Connecticut facilities and others throughout
the country, for a variety of safety and technical violations. In
addition, in 1997, the GAO issued a report stating that the NRC was not
aggressive enough in their enforcement action and allowed deficiencies
to go uncorrected for too long a time, at the total discretion of the
individual licensee.
As a result of the GAO report recommendations and the experiences
in Connecticut, the NRC, under the direction of Dr. Jackson, has
undertaken new initiatives to address oversight problems and be more
responsive to concerns raised by whistle blowers. It is imperative that
the NRC make internal changes to adequately regulate the operating
facilities and those that are being decommissioned. Continued vigilance
is imperative.
In specifically dealing with the situation in Connecticut, I want
to thank Dr. Jackson for coming to Connecticut at my and Senator
Lieberman's request. In an unprecedented practice, the NRC held public
hearings in Connecticut, providing a forum for concerned citizens to
directly interact with agency representatives to discuss the situation.
In response to the situation in Connecticut, I introduced S. 960,
the Distressed Communities Support Act. This legislation would allow
half of all fines levied by the NRC to be funneled back to communities
impacted by plant problems or decommissioning. When a plant is poorly
operated or inadequately regulated, towns and cities are left with
exorbitant safety and economic concerns. This bill would help towns
develop health, safety, environmental and economic programs. I would
appreciate the committee's and the NRC's comments.
__________
Statement of Shirley Ann Jackson, Chairman, Nuclear Regulatory
Commission
Mr. Chairman and members of the Subcommittee, the Commission is
pleased to appear before you to discuss nuclear safety regulatory
issues and the programs of the Nuclear Regulatory Commission (NRC). I
would like to begin by providing the Committee with a brief summary of
topics that are of particular interest.
In the broadest sense, the mission of the NRC in fiscal year 1999
remains the same as when the Congress created the NRC with the Energy
Reorganization Act of 1974: that is, to ensure the protection of public
health and safety, the common defense and security, and the environment
in the civilian use of source, byproduct, and special nuclear
materials. Periodically, however, the NRC has engaged in self-
examination and reassessment of its regulatory functions--both as a
stimulus for continued improvement and in response to changes in the
industries we regulate. The 3-years since the initiation of the NRC
Strategic Assessment and Rebaselining effort in 1995 have been a time
of self-evaluation, as we have prepared to realign our regulatory
policies and programs in order to improve our own effectiveness and
efficiency, as well as to position the agency for changes in the
regulated environment, such as those resulting from electric utility
deregulation and restructuring.
In recent months, the NRC has been the subject of a number of
external reviews, some of them sharply critical, from our Congressional
appropriations committees, the General Accounting Office (GAO), the NRC
Inspector General, the nuclear industry, and other stakeholders.
Whether or not one agrees with these criticisms, we believe that they
are worthy of careful consideration. They provide a useful opportunity
to review the improvements we already have put into place; to examine
the initiatives we have started and to evaluate the need for
accelerating or adjusting the emphasis of those initiatives; and to
address new issues where they have been identified. In addition, given
the public manner in which the NRC conducts its affairs, we believe
these critiques have provided a useful impetus for engaging in active
dialogue with our stakeholders. Earlier this month, in fact, the
Commission invited a number of these stakeholders, including some of
our harshest critics, to engage in a round-table discussion, open to
the NRC staff, the press, and the public. As anticipated, this meeting
provided the Commission with beneficial insights, including a range of
perspectives on the strengths and the weaknesses of NRC regulatory
programs and policies.
We believe this Commission has been willing to tackle difficult
technical and policy issues--many of which have become multi-
dimensional and complex through a history of providing short-term or
incomplete resolution. While this willingness to take on challenges may
have uncovered or highlighted areas in need of change, we believe we
also have pursued a solutions-oriented focus toward accomplishing those
changes in a comprehensive and enduring manner.
Regarding the criticisms leveled recently, it is important to note
that they have not been all from one direction. Certain critiques have
been perceived to be driven by pressure from the nuclear power
industry, with implied or overt accusations that nuclear energy has
become economically burdened as the result of NRC over-regulation. On
the other hand, the General Accounting Office (GAO), the Union of
Concerned Scientists, and other groups have been vocal in criticizing
the NRC for a lack of rigor in demanding strict adherence to clear
safety standards. These organizations are demanding even stronger NRC
regulatory oversight of its power reactor licensees.
We would submit that, as an independent regulatory agency, the NRC
must be careful to maintain a focus on meeting its legislatively
established health and safety mission. While we must be fair in
considering the views of all our stakeholders, and while we must
endeavor to accomplish our mission as effectively and efficiently as
possible, we cannot afford to be propelled back and forth by every
current in the river. Given our health and safety mandate, and given
the nature of the industries we regulate, we believe there is virtue in
being deliberate--not sluggish, but careful and thoughtful--in
analyzing, optimizing, and accomplishing the necessary changes to our
processes.
While this testimony is provided as input to an oversight hearing,
it also is structured to provide, clearly and directly, the NRC
analysis of and response to the critiques I have mentioned. A more
complete discussion of the full spectrum of NRC programs is provided as
background information in an appendix to this testimony. I will focus
on the specific areas that have been criticized.
In May 1997, the GAO issued a report entitled ``Nuclear
Regulation--Preventing Problem Plants Requires More Effective NRC
Action.'' Criticisms in the GAO report focused on the perceived lack of
early NRC intervention and enforcement action to prevent declines in
nuclear plant performance. The GAO recommended an increased NRC focus
on licensee responsiveness to identified problems, with specific
strategies for NRC action when licensees allow problems to go
uncorrected, and an increased NRC focus on licensee management
competence as a component of NRC inspection and assessment.
We believe that changes we have initiated to our reactor inspection
and performance assessment processes will address most of the GAO
concerns. These changes include: (1) efforts to develop and rely on
more objective performance indicators; (2) the integrated review of our
reactor assessment processes (known as IRAP), which I will address in
more detail shortly; (3) an increased emphasis on the FSAR as a current
reference document; and (4) a review of NRC practices in following up
on licensee commitments. In addition, the NRC will increase its focus
on performance-based (i.e., outcomes-oriented) inspections as the basis
for drawing conclusions related to licensee management processes and
controls.
In a separate report, issued in March 1997, the GAO focused on the
NRC system for handling the safety concerns, or allegations, raised by
licensee employees. The GAO observations and recommendations covered a
wide spectrum, generally centered around: (1) the timeliness of the
Department of Labor (DOL) process for addressing discrimination
complaints filed under Section 211 of the Energy Reorganization Act of
1974; (2) NRC capabilities for monitoring the allegation process; and
(3) NRC knowledge of the work environment at nuclear power plants.
The NRC has taken aggressive action to improve its overall
allegation program through increased management emphasis on the
treatment of allegations and the protection of alleger identity, more
effective and efficient allegation-related processes, improved
timeliness and quality in communications with allegers, upgraded NRC
employee training, a new software system for tracking and trending
allegations, and specific process changes to incorporate allegation-
related insights into the evaluation of licensee performance in NRC
Senior Management Meetings. We have taken specific measures to
eliminate a vulnerability related to protecting alleger identity in the
release of documents under our Freedom of Information Act (FOIA)
processes. In addition, in our interactions with the Department of
Labor, we have undertaken a number of measures that will enhance the
joint agency treatment of Section 211 complaints.
In June 1998, the NRC received a number of critiques, including
reports from both the House and Senate Committees on Appropriations,
that covered a broad range of NRC programs perceived to be in need of
improvement. For treatment in this testimony, we have grouped these
criticisms into the following categories: (1) risk-informed and
performance-based regulation; (2) reactor inspection and enforcement;
(3) reactor licensee performance assessment; (4) reactor licensing and
oversight; (5) uranium recovery; and (6) NRC organization and
management effectiveness and efficiency.
A major area of criticism focused on NRC processes that result in
expending undue NRC and licensee resources to address NRC requirements
that are of relatively low safety significance. NRC critics, in
general, believe that the NRC needs to accelerate its move toward
making the entire NRC regulatory framework more risk-informed (i.e.,
such that areas of highest risk receive the greatest focus), and more
performance-based (i.e., more results-oriented, and more open to
allowing licensee flexibility in how to meet NRC regulatory
requirements).
The Commission has been very supportive of this adjustment in
regulatory approach, as a means toward enhanced decision-making,
improved efficiency, and reduced licensee burden in both the reactor
and materials arenas. We agree, however, that the pace of current
actions should be accelerated, and we are open to working with our
stakeholders toward that end. Long-term NRC initiatives such as the
Cost Beneficial Licensing Action program and Improved Standard
Technical Specifications were designed to concentrate NRC and licensee
resources on more safety significant aspects of nuclear power plant
operation, and to remove or modify requirements with little safety
benefit and high cost. Under the Probabilistic Risk Assessment (PRA)
Implementation Plan, the NRC more recently published generic regulatory
guidance to support risk-informed plant changes, as well as
application-specific guidance in the areas of technical specifications,
in-service testing, in-service inspection of piping, and graded quality
assurance. The Commission also has emphasized an approach to rulemaking
that is risk-informed and, where appropriate, performance-based, in
order to reduce the burden associated with overly conservative or
prescriptive requirements and to sharpen the focus on matters of
highest risk. As one example, in September 1995 the Commission approved
the issuance of a revision to 10 CFR Part 50, Appendix J, ``Primary
Reactor Containment Leakage Testing for Water-Cooled Power Reactors.''
The revision added an option entitled ``Performance-Based
Requirements,'' to allow licensees to replace voluntarily the
prescriptive testing requirements of Appendix J with testing
requirements, based both on overall performance and on the performance
of individual components. Another example is the NRC Maintenance Rule--
made effective in July 1996 and now being revised--which uses a risk-
informed and performance-based approach to ensure the availability and
reliability of key structures, systems, and components in power reactor
facilities. Through training, program reviews, and stakeholder
interactions, the NRC also is working to make its inspection,
enforcement, and assessment processes more risk-informed and, where
appropriate, performance-based, in order to provide a coherent,
defensible, and consistent framework for the entire spectrum of NRC
regulatory functions.
In the area of reactor inspection, the NRC has been criticized for
failing to reduce the inspection-related licensee burden in a manner
commensurate with overall industry improvements in safety and
efficiency. Similarly, regarding NRC enforcement practices, critics
have stated, among other contentions: (1) that the recent increase in
non-escalated enforcement reflects a change in NRC culture rather than
a decline in licensee performance; (2) that the cost of responding to
violations of low severity is excessive; (3) that enforcement is not
properly focused on safety and matters of high risk; and (4) that the
NRC needs to abandon its reliance on an approach that demands strict
compliance with its regulations, without regard to the relative safety
significance of individual issues.
While the NRC believes that the basic focus and emphases of its
inspection and enforcement programs are sound, we agree that
improvements are needed in both areas. The average number of inspection
hours has, in fact, decreased, and the gradient has increased between
the amount of inspection received by the best performing plants and
plants experiencing performance problems. While short-term efforts are
focused on increasing the incorporation of risk information into
inspection planning and execution, we also plan to initiate, in October
1998, a review of the inspection program structure, focus, and
procedures. The decision to perform this review was a result of
initiatives which occurred over the past year that were aimed at
achieving regulatory excellence. These include the ongoing review of
our reactor performance assessment process, our improvements to the
Senior Management Meeting process, and our performance of a job task
analysis for personnel involved in our reactor inspection program.
Regarding the criticisms of our enforcement practices, we believe
that the increase in non-escalated enforcement actions stems from an
concerted effort to improve consistency, together with an increased
focus on compliance, and a specific emphasis on ensuring that reactor
plant design bases have been maintained. The NRC does not believe that
this increase in violations reflects a decline in reactor safety
performance. In fact, as part of the efforts described above, we may
have inadvertently created too low a threshold for Severity Level IV
violations, as compared to minor violations. The NRC recognizes the
resource demands associated with relatively low-level violations, and
we have taken several short-term actions to simplify the disposition of
these non-compliances. We have increased the level of centralized
oversight to ensure consistency in this area, and we have increased the
headquarters oversight and coordination of the appeal process for
disputing low-level violations. As directed by the Commission, the NRC
staff has changed one of the criteria for distinguishing minor
violations from Severity Level IV violations. As an overall effort to
improve our enforcement practices, we also intend: (1) to continue to
meet with stakeholders to consider the need for further change,
including identifying unnecessary or duplicative regulations or
requirements and removing the burden of responding to low severity
level violations; (2) to improve guidance on factoring risk into
enforcement decisions; (3) to use training, internal audits, and
stronger management oversight to identify and correct inconsistencies
and other problems; and (4) to provide closer coordination between
inspection and enforcement activities.
In the area of reactor performance assessment, the strongest
overall criticism has centered around the subjectivity and lack of
scrutability of our assessment processes. In particular, critics have
faulted these processes for the lack of clear, objective assessment
criteria--including criteria used to place nuclear power plants on the
NRC ``Watch List.'' Taken as a whole, these processes have been
characterized as being redundant and too resource-intensive, both for
licensees and for the NRC.
The NRC agrees with the thrust of these criticisms. However, we
would note that these flaws have been the focus of considerable
Commission attention, and that specific agency initiatives are underway
to address these very concerns. In 1996, the Commission directed a
study of the Senior Management Meeting (SMM) process by Arthur
Andersen, which resulted in an increased emphasis on objective,
quantitative information, as well a number of SMM process improvements.
From that study, the increased scrutiny of the overall assessment
function led to initiating the IRAP--a full-scope, integrated review
encompassing all NRC reactor-related performance assessment processes--
with the goal of developing a single, integrated process that is more
objective, more scrutable, and less resource intensive than the current
mix of processes. We expect to complete the IRAP by late this year. In
the interim, the Commission has initiated several other changes, which
include: (1) changing the frequency of the SMM from semiannual to
annual; (2) requiring a more systematic processing and comparison of
regulatory performance data in the areas of human performance,
enforcement, allegations, and risk; (3) providing a structured analysis
of performance data in a publicly released plant issues matrix for each
plant; and (4) providing for Commission approval of actions taken at
the Senior Management Meeting.
In the area of reactor licensing and oversight, the primary
criticisms have been: (1) that the NRC has implemented informal
processes that bypass formal procedures, thereby imposing requirements
inappropriately; (2) that the NRC has reinterpreted improperly what
constitutes design basis information, in a manner that is unclear,
unduly burdensome, and unproductive; and (3) that NRC adjudicatory
processes take too long and cost too much.
Once again, the NRC agrees with the general thrust of these issues,
and we are taking action to address the concerns expressed. Regarding
regulatory process controls, we have adopted measures that internally
challenge the need for each generic communication, to ensure that the
licensee actions requested and responses required are commensurate with
the safety significance of the issues involved. In addition, we will
increase NRC management oversight of the issuance of Confirmatory
Action Letters, to ensure that proper controls are exercised in NRC
staff confirmation and documentation of licensee commitments, and that
licensees are not pressured into actions in excess of regulatory
requirements. Regarding our focus on design basis information, the
Commission has issued revised guidance to clarify the evaluation
process for resolving degraded and nonconforming conditions, and we are
committed to providing more flexibility for our licensees to make
facility changes without NRC approval (i.e., using 10 CFR 50.59). We
will continue to work with the industry to bring clarity and a risk-
informed approach to this area. Finally, regarding adjudicatory
processes, the Commission has been working to implement several
measures, including: (1) streamlining the hearing process, (2) clearly
delineating Commission expectations for adjudicatory proceedings, such
as schedules and sua sponte reviews; and (3) making provisions for
Commission guidance to licensing boards on individual proceedings,
timely identification of any open generic policy issues for Commission
decision, and effective integration of the technical review and
adjudicatory schedules. While these measures are designed to improve
the timeliness of all NRC adjudicatory proceedings, we have given
particular consideration to ensuring that the process for reactor
license renewal will be efficient, fair to all parties involved, and
focused on the technical merits of the applications. We also will
examine whether changes (including legislation) would be appropriate to
expand our use of more informal or legislative-style hearings in
licensing proceedings.
Several criticisms have related to the overall topic of NRC
organization, management effectiveness, and efficiency. Critics have
called for an agency-wide review, contending that the NRC has been
unresponsive to previous internal and external reviews, and faulting
the agency for an overall lack of self-assessment capability.
Significant NRC staffing and resource reductions have been suggested,
targeting the areas of management and support, human resources,
finance, professional staff (particularly in the area of reactor
oversight), research, and international programs.
Perhaps the most compelling NRC response to these concerns is the
extensive effort we have made, in recent years, to construct a
coherent, defensible, and dynamic framework for strategic planning and
resource management. In 1995, the Commission initiated the Strategic
Assessment and Rebaselining review, which compared agency programs to
Congressionally mandated NRC authorities and responsibilities, and
provided the foundation for developing our fiscal year 1997-2002
Strategic Plan, the fiscal year 1999 Performance Plan, and program-
level, outcomes-focused operating plans. We are developing and
implementing an integrated, coherent, agency-wide process for planning,
budgeting, and performance management, which builds in accountability
and self-assessment, and provides a direct means to refocus work or re-
deploy resources in response to change.
Moreover, as this Committee is aware, the NRC is already much
smaller than it once was. The NRC's fiscal year 1998 budget, when
adjusted for inflation, is the lowest in the 23-year history of the
NRC. As an example, the current NRC research budget has been reduced by
approximately 80 percent over the past 17 years. Since fiscal year
1994, the NRC has reduced Senior Executive Service managerial positions
by 16 percent, from 220 to 185. We have improved the overall
supervisor-to-employee ratio, and we are striving to reach our goal of
1:8 by the end of the next fiscal year.
We believe, further, that the NRC has been vigorous in its self-
assessment, using both broad-scope and specifically focused reviews to
uncover deficiencies and develop sensible solutions. Some of these
reviews, such as the IRAP, have been internal, while others have
employed external consultants, such as our recently initiated
enlistment of Arthur Andersen and Company to evaluate our planning and
self-assessment processes, beginning with the Office of Nuclear Reactor
Regulation (NRR). In addition, we have made a concerted effort to be
open and receptive to criticism, including the broad array of critiques
outlined in this testimony. We actively seek interactions with our
stakeholders to engender feedback and input on our performance in
various regulatory functions, and to solicit suggestions for continued
improvement.
Regarding the specific areas mentioned for staffing reductions, we
will continue to seek areas in which greater organizational efficiency
can be achieved. We expect that the enhancements resulting from our
reactor oversight process reviews will allow a reduction in resources
in some areas, while retaining the necessary level of expertise and a
defensible level of oversight. We have made considerable progress in
reducing our management and support staff, and we will continue to
target reductions in these areas. Finally, we believe that our
participation in international activities is beneficial to the
regulation of U.S. nuclear power plants, and not only augments our
operational experience database, but, in fact, also plays an important
role in leveraging our limited resources by allowing cooperative
research.
We would like to thank the members of this Committee for the
support they consistently provide to the Nuclear Regulatory Commission.
As I have heard said, ``a bend in the road is not the end of the road,
unless you fail to make the turn.'' I believe I can say, with my
Commission colleagues, that we intend to make the turn, if, in fact, we
are facing a bend--or to modulate our trajectory, if that is the degree
of adjustment needed.
To proceed with modifying the agency regulatory approach along the
lines I have discussed requires that we have adequate resources. As you
know, both the House and Senate have passed Energy and Water
appropriations bills for fiscal year 1999. The Senate would appropriate
$470.8 million for the NRC, including the NRC Inspector General, and
the House version would appropriate $467.5 million. Either bill would
constitute a sizeable reduction from the requested level of $488.6
million. As requested, that level did little more than to enable the
agency to maintain its resources in the face of inflation. The present
reduction, if carried out, will require the NRC to reduce its planned
fiscal year 1999 programs by at least $17.8 million. As a result, the
NRC will cut back on its reactor inspection and reactor oversight
programs, curtail selected safety research, eliminate studies of
nuclear materials operating experience, and substantially reduce many
of its support activities.
With the Senate and House appropriations bills as a catalyst, our
fiscal year 2000 budget proposal will reflect an approach that
accelerates many of our efforts leading to a revised regulatory
framework. We believe that accelerating our efforts toward a risk-
informed and, where appropriate, performance-based regulatory approach
will both enhance our safety decisions and provide a coherent basis for
our regulatory processes. Through the full implementation of our
Planning, Budgeting and Performance Management Process, our fiscal year
2000 program resource requirements will reflect additional efficiencies
and more streamlined processes. Some of that streamlining already has
begun, and is reflected in the current fiscal year 1999 budget
estimate. As I have outlined earlier, we are committed to examining
broad aspects of our reactor inspection, enforcement, and performance
assessment processes (as well as other programs), and we will make the
adjustments needed to optimize our performance in those areas. Where
criticisms are found to be valid, our decisions to make additional
adjustments--or to accelerate changes already in progress--may require
further changes to the fiscal year 2000 program and the associated
budgetary resources.
As you know, the Omnibus Budget Reconciliation Act of 1990, as
amended, requires the NRC to recover 100 percent of its new budget
authority, less the amount appropriated from the Nuclear Waste Fund for
high level waste activities, by assessing fees. However, the NRC 100
percent fee recovery requirement reverts to 33 percent at the end of
fiscal year 1998, if the current requirement is not extended. The
Committee on Environment and Public Works has approved unanimously S.
2090, ``NRC Fairness in Funding Act of 1998,'' which would extend the
authority of the NRC to collect fees through 2003. Both the House and
Senate appropriations bills for fiscal year 1999 contain general
provisions extending approximately 100 percent fee recovery for fiscal
year 1999 only. The Commission encourages the Congress to act on the
fee authority extension in S. 2090 so as to provide a sound future
funding base for NRC programs.
The Commission, NRC licensees, and the Congress have expressed
concerns regarding the fairness and equity of charging licensees for
certain agency expenses that cannot be attributed to individual
licensees or classes of licensees. The Commission recently has
considered issues associated with fees, and has concluded that reducing
the fee-based portion of our budget would address these fairness and
equity issues. Thus the Commission supports removing a portion of NRC
funding from the fee base, and covering it with separate
appropriations, as provided for in S. 2090.
In conclusion, the Commission is committed to making the changes
necessary to maximize NRC regulatory effectiveness, and we are
sensitive to the need to contain the costs of doing business in order
to minimize the financial impact to our licensees. At the same time, we
take very seriously our responsibility to provide reasonable assurance
of adequate protection of public health and safety in the use of
nuclear materials in the United States. The NRC greatly appreciates the
support for its programs and resource needs that this Committee has
afforded the agency in the past. We look forward to our continued
interactions.
__________
Appendix A: Enhanced Discussion and Additional Information
The discussions that follow provide the Subcommittee with further
details on the activities that we have outlined in this testimony. A
table of contents is provided for ready reference to areas of specific
interest.
table of contents
I. Expectations for a Health and Safety Regulator
II. NRC Response to the May 1997 GAO Report, ``Nuclear Regulation--
Preventing Problem Plants Requires More Effective NRC Action''
III. NRC Response to the March 1997 GAO Report, ``Nuclear Employee
Safety Concerns--Allegation System Offers Better Protection, But
Important Issues Remain''
IV. NRC Response to the May 1998 Senate Appropriations Committee
Report and Related Studies
A. Risk-Informed and Performance-Based Regulation
B. Inspection and Enforcement
Inspection
Enforcement
Summary
C. Reactor Licensee Performance Assessment
D. Reactor Licensing and Oversight
Regulatory Processes
Design Basis Information
Power Reactor License Renewal and NRC Adjudicatory Processes
E. Uranium Recovery
F. Organization and Management Effectiveness and Efficiency
Organization and Planning
Information Technology and Information Management
NRC Self-Assessment
Management and Support Staffing
NRC Participation in International Activities
Summary
V. Other Agency Programs and Areas of Focus
A. Electric Utility Deregulation
Cost-Competitiveness and Safe Nuclear Operations
Electrical Grid Reliability
Decommissioning Funding Assurance
License Transfers and Timeliness of NRC Reviews
B. NRC Certification of Advanced Reactor Designs
C. Status of the NRC Materials Program
Materials Program Initiatives
Oversight of the U.S. Enrichment Corporation
D. High-Level Waste
NRC Assessment of DOE Progress and Potential for Licensing Success
Potential Issues
Status of Spent Fuel Storage
E. Decommissioning and Decontamination; Clean-Up
F. Work with the U.S. Department of Energy (DOE)
External Regulation of DOE
Current DOE Privatization Activities
Tritium Production
Disposition of Surplus Weapons-Grade Plutonium
G. Significant Research Activities
H. International Cooperation
Bilateral and Multilateral Activities
Convention on Nuclear Safety
I. Year 2000 Systems Corrections
______
I. Expectations for a Health and Safety Regulator
The United States Nuclear Regulatory Commission (NRC) was
established in 1975 principally because the evolution and development
of the nuclear power industry had created a new set of regulatory
challenges, requiring the attention of an exclusively regulatory agency
to ensure the health and safety of the American public. Created in a
time of change, the NRC throughout its existence has engaged repeatedly
in reassessment and recalibration in the light of new data and new
understanding. In the same way that it demands objective self-
examination and effective corrective action on the part of the
regulated industry, the NRC recognizes that it must require the same of
itself. The 3-years since the initiation of the NRC Strategic Planning
and Rebaselining effort in 1995 have been a time of searching self-
evaluation, as the agency has prepared to realign its regulatory
policies and programs for nuclear power plants, to take into account
the variety of changes that will result from the shift to electric
utility deregulation and associated utility restructuring .
In recent months, the NRC has been the subject of a number of
critiques, some of them sharply critical, from our Congressional
appropriations committees, the General Accounting Office (GAO), the NRC
Inspector General, the nuclear industry, and other stakeholders.
Whether or not one agrees with these criticisms, the NRC believes that
they represent valuable input worthy of careful consideration. They
also are an appropriate occasion for the agency to continue its own
rigorous stock-taking; to assess objectively both the strengths and the
weaknesses of NRC regulatory programs and policies; to understand
better the impact of those programs and policies on those we regulate;
to consider how effectively we have responded to change in the
regulatory environment; and to give open-minded and objective
consideration to the views and interests of our various constituents.
Many of the criticisms leveled recently have been perceived as
driven by pressure from the nuclear power industry, with implied or
overt accusations that nuclear power has become economically burdened
as the result of NRC over-regulation. On the other hand, the May 1997
General Accounting Office (GAO) report (``Nuclear Regulation--
Preventing Problem Plants Requires More Effective NRC Action''), as
well as the Union of Concerned Scientists and other constituent groups,
have been vocal in criticizing the NRC for a lack of rigor in demanding
strict adherence to clear safety standards, and in demanding, if
anything, stronger NRC regulatory oversight of its power reactor
licensees.
We would submit that, as an independent regulatory agency--
regardless of the source of our fees--the NRC must be careful to focus
on meeting our legislatively established health and safety mission.
While we must be fair in considering the views of all our stakeholders,
and while we must endeavor to accomplish our mission as effectively and
efficiently as possible, we cannot afford to be propelled back and
forth by every current in the river. In other words, given our health
and safety mandate, and given the nature of the industries we regulate,
we believe there is virtue in being deliberate--not sluggish, but
careful and thoughtful--in analyzing, optimizing, and accomplishing the
necessary changes to our processes.
In addition, in reviewing the criticisms that have been directed at
the NRC regulatory process, it is important both for the NRC and for
our stakeholders to keep in mind that the basic processes under
criticism are the same processes that have resulted in the licensing
and operation of 110 safe nuclear power plants. Today, 104 plants are
operating to produce 20 percent of our nation's electricity, with an
enviable record in terms of protecting the health and safety of the
American people. That should not be taken to imply, by any means, that
NRC processes are or should be above criticism--far from it. It does,
however, suggest that caution should be exercised before making
sweeping changes to ensure that seemingly desirable improvements, made
in the interest of increased efficiency or diminished regulatory
burdens, do not turn out to have unforeseen adverse effects on the
overall objective of ensuring nuclear safety.
II. NRC Response to the May 1997 GAO Report, ``Nuclear Regulation--
Preventing Problem Plants Requires More Effective NRC Action''
In its May 1997 report, ``Nuclear Regulation--Preventing Problem
Plants Requires More Effective NRC Action,'' the General Accounting
Office (GAO) emphasized that, in order to achieve the NRC safety
mission, it was critical for the Commission to have a high degree of
confidence in the ability of its regulatory program to ensure that the
nuclear industry performs to high safety standards. The GAO observed
that the NRC determination of adequate protection of public health and
safety presumptively assumes that licensees will operate their
facilities within approved designs and in accordance with NRC
regulations. Within this context, the GAO report gave a number of
specific criticisms, which included contending:
<bullet> that, for some plants, the NRC had not taken aggressive
enforcement action to require licensee correction of safety
problems on a timely basis;
<bullet> that the NRC needed to improve on early intervention and
aggressive enforcement action, in order to prevent declines in
nuclear plant long-term performance, and in order to increase the
assurance that licensees are meeting high safety standards; and
<bullet> that the NRC was slow to place plants on the NRC ``Watch
List.''
The GAO report recommended that the NRC develop strategies to take
more aggressive action on safety deficiencies when they are discovered.
Specific recommendations included: (1) that NRC inspectors be required
to document fully the status of licensee actions to address identified
problems, including timetables for the completion of corrective actions
and statements as to how the NRC will respond to nonconformances with
planned actions; (2) that the NRC make licensee responsiveness to
identified problems a major feature of the Senior Management Meetings,
to include clarifying the intended NRC response when problems go
uncorrected; and (3) that the NRC assess licensee management competency
as a mandatory component of the NRC inspection and assessment
processes.
As indicated in its written response to the GAO report, the NRC has
been developing--and in many cases already has instituted--a variety of
improvements to its reactor performance assessment processes that will
address most of the GAO concerns. The NRC staff has worked extensively
to develop improved performance indicators for use in the assessment of
reactor licensees--including performance indicators that focus on the
adequacy of licensee corrective actions. The Integrated Review of the
NRC Assessment Process for Operating Commercial Nuclear Reactors
(referred to as IRAP), is an extensive review by the NRC staff of all
existing reactor-related assessment processes. This review is still
ongoing, and the final form of the IRAP has yet to be determined;
however, in keeping with the recommendations made by the GAO and
others, early stages of the IRAP have considered such changes as: (1)
streamlining and integrating into a single process the best elements of
our current processes; (2) tying specific regulatory actions directly
to the assessments made; (3) improving the systematic use and
categorization of data; (4) developing and using threshold criteria;
(5) focusing on performance results; (6) providing opportunity for
licensee response at appropriate stages; and (7) providing for
Commission approval of actions taken at the Senior Management Meeting.
[For additional detail on the IRAP and other aspects of licensee
performance assessment, see Section IV.C of this testimony.]
Other NRC initiatives that relate to the GAO report criticisms
involve a renewed emphasis on the purpose and use of the final safety
analysis report (FSAR) and a review of NRC practices in following up on
licensee commitments. The updated FSAR provides a current reference
document to be used in routine safety analyses performed by the NRC,
the licensee, and other interested parties. NRC inspection and
licensing guidance has been clarified to re-emphasize the use of the
FSAR in providing updated licensing basis information for the plant,
and the need to review applicable portions of the FSAR and other
licensing documents during inspections and licensing reviews. The NRC
staff also is reviewing existing NRC processes for identifying,
tracking, and verifying licensee commitments made to the NRC, to
improve NRC staff and industry understanding and performance in this
area. The NRC has begun discussions with the Nuclear Energy Institute
(NEI) to determine whether changes in the NEI guidance document on
licensee commitments might be mutually beneficial for licensees and the
NRC.
In the area of assessing management competency, the Commission
agrees that licensee management has a significant effect on plant
operation and, by inference, on safety and risk. The NRC role is to
provide oversight of generic aspects of utility organization and
employee qualifications commensurate with the need to provide
reasonable assurance of adequate protection, such as establishing
minimum qualification requirements for certain positions. However, as
the Commission recently reaffirmed, NRC inspection and assessment does
not directly assess licensee management performance or corporate
culture. Rather, the NRC inspection program emphasizes conducting
performance-based (i.e., outcomes-focused) inspections in broad areas
of facility operation and design, and, on the basis of inspection
results, draws conclusions about the effectiveness of licensee
management processes and controls. In addition, to be clear, NRC
regulatory oversight does not extend to NRC involvement in the
selection process for licensee managers.
III. NRC Response to the March 1997 GAO Report, ``Nuclear Employee
Safety Concerns--Allegation System Offers Better Protection,
But Important Issues Remain''
The NRC regulatory program places a high value on a work
environment, within the licensee community, in which the highest
standards of quality, integrity, and safety are understood to be in the
best interest of the licensee and its employees and contractors. The
NRC allegation program provides a way for individuals working in NRC-
regulated activities and members of the public to provide safety and
regulatory concerns directly to the NRC. For allegations involving
potential wrongdoing, the NRC Office of Investigations (OI) works with
the program offices on follow-up, in-depth investigation, analysis, and
disposition--including enforcement action. For allegations of
discrimination under Section 211 of the Energy Reorganization Act of
1974, the Department of Labor (DOL) provides an investigation and
adjudicatory process for complainant redress, and the NRC also may
conduct its own investigation to determine the need for enforcement
action. The Commission has taken aggressive action to improve the NRC
treatment of allegations, and to promote within the overall licensee
community a safety-conscious work environment--in which personnel at
any level are encouraged to report concerns, and such that concerns are
promptly reviewed, prioritized, investigated, and if warranted,
corrected, with appropriate feedback to the individual.
In its March 1997 report, ``Nuclear Employee Safety Concerns--
Allegation System Offers Better Protection, But Important Issues
Remain,'' the GAO made a number of observations and recommendations for
improvement relating to the following general areas: (1) the timeliness
of the Department of Labor process for providing complainant redress
under Section 211; (2) NRC capabilities for monitoring the allegation
process; and (3) NRC knowledge of the work environment at nuclear power
plants.
Over the past 18 months, the NRC has made a number of specific
changes to its allegation program, some of which were in response to
specific GAO recommendations, and some as part of internal NRC
initiatives. In general, these changes have focused on emphasizing the
importance of the allegation program and improving its implementation,
including NRC processes for allegation receipt, documentation,
tracking, follow-up, evaluation, and closure. Specific actions include
the following:
The NRC Executive Director for Operations issued an announcement to
agency employees expressing NRC management expectations for NRC staff
handling of allegations, including comprehensive and timely allegation
resolution and protection of alleger identity.
The NRC published a brochure that is provided to allegers. The
brochure describes the NRC allegation process, the DOL process, and the
extent to which the NRC can protect the identity of allegers.
The NRC staff developed and implemented an improved software
package that has enhanced NRC capabilities for tracking and trending
allegations, including tracking discrimination complaints from receipt
through the completion of NRC investigative and enforcement activities
as well as through the completion of DOL actions.
Standard training material on the allegation program has been
developed and implemented, to ensure that NRC employees were current
and knowledgeable on the important aspects of the allegation program,
including treating allegers professionally and courteously.
The NRC developed standard formats for correspondence with
allegers, to ensure that all necessary topics are discussed and all
essential information is included in such correspondence. The format
for acknowledgment letters requires a restatement of the allegations as
understood by the NRC. Closure letters also now require a restatement
of the concern, as well as a description of the NRC basis for closing
the concern.
Special cover sheets were developed for allegation correspondence
to increase NRC staff recognition of the special handling requirements
needed to protect the identity of allegers.
The Senior Management Meeting assessment process was revised to
include a discussion of insights gained from the allegation program, to
assess licensee performance in establishing and maintaining an
environment conducive to raising safety and regulatory concerns.
The NRC also has taken a number of actions specifically designed to
improve the follow-up, investigation, and disposition of Section 211
discrimination complaints. The NRC Office of Investigations (OI) has
enhanced its overall program in this area by: (1) ensuring an interview
with each alleger that has established a prima facie case for Section
211 discrimination (including those under separate pursuit by the DOL);
(2) increasing the level of OI involvement in the regional and program
office Allegation Review Boards, including the analysis and disposition
of discrimination complaints; (3) upgrading the oversight and training
of field investigators involved in discrimination investigations; and
(4) improving the timeliness and quality of OI reports. Given the
complementary DOL jurisdiction in this area, the NRC has been working
with the DOL on a range of actions designed to improve the DOL
investigative and adjudicatory process. These include: (1) the transfer
of Section 211 complaint investigation responsibility from the DOL Wage
and Hour office to the DOL Occupational Safety and Health
Administration (OSHA); (2) a draft revision to the NRC/DOL Memorandum
of Understanding (MOU) related to Section 211 complaints, which I
recently signed and forwarded to the Secretary of Labor for her
signature; and (3) efforts in progress to develop draft legislation
that, among other enhancements, would improve the effectiveness and
timeliness for the DOL Section 211 investigative and adjudicatory
process.
Within the range of actions described above, the NRC has completed
its implementation of all but three of the GAO report recommendations.
Actions still in progress or under consideration are as follows:
The NRC and DOL staffs have agreed on draft legislative changes
that would make the timeliness requirements in Section 211 of the
Energy Reorganization Act more reasonable, and would help to improve
the effectiveness and timeliness of the DOL process. The NRC staff
currently is preparing a paper that will forward these proposed changes
to the Commission for approval and submission to the Congress.
The NRC still is evaluating the GAO recommendation on routinely
providing feedback forms in allegation closeout correspondence. Several
sample studies have been conducted, and the NRC staff will soon provide
a recommendation to the Commission on this matter.
The GAO recommended that the NRC improve its capabilities for
assessing the work environment at licensee facilities. The Commission
currently is reviewing an NRC staff paper that provides options for
addressing this issue.
An additional area needing improvement was revealed when, in
January 1998, the NRC staff inadvertently revealed the identities of a
number of allegers while responding to requests for information under
the Freedom of Information Act (FOIA). The NRC established a special
team to evaluate the incident and make recommendations to management.
The audit team found a flaw in NRC processes that involved, in essence,
two competing interests: (1) the need to ensure that FOIA requests
receive a prompt and complete response, in keeping with statutory
timeliness and release requirements and the Commission stance on
openness and public access to information; and (2) the allegation
management program mandate on protecting the identity of allegers. The
release of alleger identities occurred because essentially no agency
guidance or training existed to address the specific process of
redacting allegation-related records when responding to an FOIA
request, to prevent the release of alleger identities. In addition, the
process for reviewing FOIA responses in the responsible organization
had undergone an erosion of administrative barriers that at one time
had included additional layers of review. In addition to the lack of
procedures and training, NRC management found that there was no single
point of accountability to ensure that allegation related material was
not released inappropriately.
NRC management considers this to be a serious event that revealed a
significant weakness in its processes. Because of the significance of
this issue and the broad scope of corrective actions under
consideration, the NRC Executive Council has become involved directly
in the evaluation and resolution of this issue. The NRC staff is in the
process of implementing 30 recommendations with the goal of preventing
future releases. While the longer term corrective actions are being
evaluated, the levels of review that had eroded have been reinstated
and the Agency Allegation Advisor has been identified as the single
point of accountability and assigned to review all FOIA responses
involving allegation material.
IV. NRC Response to the May 1998 Senate Appropriations Committee Report
and Related Studies
As indicated earlier, in recent months, the NRC has been the
subject of a number of critiques, beyond the GAO, some of them sharply
critical, from Congressional committees, the nuclear industry, and
other sources. Some of the principal sources include:
The June 1998 Senate Committee on Appropriations Report Language
The June 1998 House Committee on Appropriations Report Language
A study by Tim Martin Associates
In this section of the testimony, we will attempt to characterize
those recent criticisms and to provide, for the record, an objective
and thorough response. The criticisms have been grouped into the
following categories: (1) risk-informed and performance-based
regulation; (2) reactor inspection and enforcement; (3) reactor
licensee performance assessment; (4) reactor licensing and oversight;
(5) uranium recovery; and (6) NRC organization and management
effectiveness and efficiency.
A. Risk-Informed and Performance-Based Regulation
In this topical area, the basic criticisms are summarized as
follows:
Licensees expend considerable resources on NRC requirements that
are not related to safety or are of low safety significance.
The NRC needs to create a graded safety value scale.
The NRC needs to develop and adhere to clear Safety Goals.
The NRC needs to accelerate the move to risk-informed and
performance-based regulation.
The NRC has been moving and will continue to move toward making the
entire NRC regulatory framework--related to both nuclear reactor safety
and nuclear materials safety--more risk-informed (i.e., such that areas
of highest risk receive the greatest focus), and, where appropriate,
more performance-based (i.e., more results-oriented and more open to
allowing licensee flexibility in how to meet NRC regulatory
requirements). The overall goal of this adjustment in regulatory
approach is to enhance safety decision-making, to improve efficiency,
and to reduce resources devoted to issues with low safety significance.
As discussed below, a significant number of NRC efforts related to
risk-informed regulation have been initiated and are ongoing.
Nevertheless, the NRC recognizes that the pace of its actions in this
area should be accelerated, and that improvements are warranted.
The NRC has been using risk information in some generic and plant-
specific regulatory activities for several years. In 1986, the
Commission issued its policy statement on Safety Goals which
characterized the acceptable individual and societal risk from
accidents at nuclear power plants. The Commission recently has approved
the development of guidelines for applying the Safety Goals and their
subsidiary objectives in plant-specific regulatory activities. In 1993,
a Regulatory Review Group (RRG) was established to study power reactor
regulations and related processes, placing special attention on the
potential for using performance-based requirements and guidance in
place of prescriptive requirements and guidance. In its final report,
the RRG discussed several areas in which NRC process changes could
allow significant reductions in industry and NRC resource demands
without adversely affecting the level of safety at operating plants.
As one result, the Cost Beneficial Licensing Action (CBLA) program
was created in 1993 to increase NRC management attention and provide a
more expeditious review of licensee requests that seek to modify or
delete requirements that have a small effect on safety and are costly
to the licensee to implement. As of June 29, 1998, of the 305 CBLAs
submitted since 1993, 238 have been approved, resulting in cost savings
(based on licensee estimates) of over $1.25 billion over the life of
the plants.
An important longer-term effort is the Technical Specification
Improvement Plan (TSIP), resulting in the development and use of
Improved Standard Technical Specifications (ISTS)--designed to focus
NRC and industry resources on the more safety significant aspects of
nuclear plant operation. NRC effort and industry input on this
initiative began in 1986, and culminated in the initial ISTS
publication in 1992, with a revision in 1995. Currently, 56 plants (92
units) have volunteered to convert their plant technical specifications
to the ISTS, and 18 plant conversions (involving 28 units) have been
approved. Owners groups project annual savings of between $150,000 and
$1.13 million per site from the program. Plants that have made this
conversion incur savings because of less restrictive surveillance
(testing) requirements on specified equipment, as well as from the
significant decrease in the post-conversion rate of needed license
amendments.
In part because of the RRG efforts, the NRC formulated its
Probabilistic Risk Assessment (PRA) Policy Statement and its PRA
Implementation Plan. The Commission PRA Policy Statement, first
proposed in 1994 and published in August 1995, identified the following
goals: improved decision-making, more efficient use of NRC staff
resources, and reduced burden on licensees. The PRA Implementation
Plan, first issued in August 1994, consists of more than 100
initiatives to enhance the use of risk information in regulation of
both power reactor and nuclear material licensees, as well as efforts
to move appropriately toward more performance-based approaches. In
addition, the Commission has encouraged the consideration of risk
information in all regulatory activities.
As part of the PRA Implementation Plan, the Commission recently
approved for publication generic regulatory guidance, in the form of a
regulatory guide and standard review plan, that will support
implementation of risk-informed regulation of power reactor licensees,
by providing guidance on how to use PRA information to support and
evaluate plant-specific changes. In addition to the generic guidance
documents, application-specific guidance has been developed and issued
for the areas of technical specifications, in-service testing, in-
service inspection of piping, and graded quality assurance. Each of
these approaches has been proven successful in pilot applications at
specific power reactor licensees. In the coming year, the NRC will give
increased focus to the review of license amendments and other
programmatic changes through the use of these guidance documents.
The NRC also is working with the Nuclear Energy Institute (NEI) on
a pilot applications program in which NEI will identify areas where
regulatory requirements and plant operations can be simplified with
minimal impact on plant safety. The NRC plans to participate in a study
by the Center for Strategic and International Studies (CSIS) on risk-
informed and performance-based regulation at the NRC, which also should
be useful in formulating further recommendations for change.
The Commission also has sought to increase regulatory effectiveness
through certain rulemakings. These rule changes have been directed
toward incorporating risk-informed and performance-based approaches,
where appropriate, as well as toward reducing the regulatory burden
associated with overly conservative requirements, and eliminating the
need to seek exemption from overly prescriptive requirements. As one
example, on September 12, 1995, the Commission approved the issuance of
a revision to 10 CFR Part 50, Appendix J, ``Primary Reactor Containment
Leakage Testing for Water-Cooled Power Reactors.'' The revision added
an option entitled ``Performance-Based Requirements,'' to allow
licensees to replace voluntarily the prescriptive testing requirements
of Appendix J with testing requirements based both on overall
performance and on the performance of individual components. In another
instance, the NRC worked with the Department of Transportation to
provide procedures under new regulations that enable the shipment of
decommissioned reactor steam generators to a disposal facility, without
undergoing a specific steam generator transportation certification
process. A third example is the NRC Maintenance Rule--made effective in
July 1996 and currently undergoing certain proposed revisions--which
uses a risk-informed and performance-based approach to ensure the
availability and reliability of key structures, systems, and components
in power reactor facilities. The NRC will continue its review of
existing regulations to identify additional opportunities in which NRC
requirements can be made more risk-informed and, as appropriate,
performance-based.
The NRC also has revised guidance for reactor inspection activities
to incorporate risk insights and to be more performance-based. These
revisions provide guidance on using risk insights to help plan
inspection activities, to evaluate the significance of inspection
observations and findings, to evaluate the adequacy of licensee
assessments that have probabilistic risk elements in their bases, and
to support enforcement activities. Incorporating risk insights into
inspection procedures is expected to result in more efficient NRC
inspections, since it will focus attention and resources on the more
risk-significant items. Other changes to the inspection program are
being pursued, with the overall goal of having a fully risk-informed
baseline inspection program.
Finally, NRC staff training in risk concepts and practices is being
carried out as part of the PRA Implementation Plan. The NRC has
mandated training on risk-informed guidance and policy for NRC
management and technical staff, including site resident inspectors.
Senior reactor analyst positions also have been established and filled
with specially trained PRA specialists in each regional office and in
headquarters, to serve as a primary resource for incorporating risk
insights and risk perspectives into reactor inspection, enforcement,
and assessment activities.
With respect to nuclear materials safety, we have used a variety of
risk-informed, and, where appropriate, performance-based approaches to
analyze areas of NRC responsibility beyond reactors, including nuclear
waste, fuel cycle facilities, and industrial and medical uses of
nuclear material. We are developing a comprehensive conceptual
framework for applying risk-informed and performance-based regulation
in nuclear materials applications. We will use this framework to
identify areas in which the increased use of risk-informed methods will
enhance safety and regulatory efficiency. For some nuclear materials
devices and facilities, the nature of the risks, the types of
facilities, or other factors may indicate that more traditional
approaches should be used. Overall, we anticipate that this framework
will better focus our regulatory resources on the most risk-significant
aspects of nuclear materials usage.
In summary, the Commission remains committed to making the entire
NRC regulatory framework more risk-informed and, where appropriate,
more performance-based. Short-term actions are being implemented to
increase the priority, management attention, and pace of
implementation. These include steps to ensure more prompt review of
risk-informed reactor licensing submittals, the establishment of a lead
Project Manager for the coordination of risk-informed and performance-
based licensing actions, and a management oversight steering committee
to provide policy, technical and priority guidance on risk-informed
regulation. We will continue to pursue longer-term activities as
identified in the PRA implementation plan.
B. Inspection and Enforcement
Inspection.--The power reactor inspection program serves an
important role in enabling the NRC to fulfill its mission of ensuring
public health and safety. This program is designed, through audits of
licensee activities, to identify safety problems independently at an
early stage, before significant safety events occur. The NRC has
defined the minimum set of inspections necessary to meet this objective
as the Core Inspection Program. Core inspections are performed at all
sites, independent of licensee safety performance. These inspections
are intended to emphasize observation and evaluation of those ongoing
facility operations and supporting activities that are most important
to reactor safety. The NRC uses additional inspection effort (beyond
the core program) on a plant-specific basis to gain additional insights
into licensee performance in selected areas in which (1) the core
program has identified problems; (2) off-normal events require follow-
up; or (3) emerging safety issues require resolution.
In this area, the basic criticisms are summarized as follows:
As nuclear power plant safety and efficiency have improved,
regulatory burdens have not decreased in a commensurate manner.
The level of inspection effort at reactor power plants does not
vary in keeping with variations in actual plant safety performance.
The NRC inspection program focuses on some activities with very low
impact on safety.
The NRC recognizes that the safety performance of U.S. nuclear
power plants has improved over the past decade as the industry matured.
In fact, we believe that NRC oversight has contributed to and helped to
maintain that improvement. The average number of NRC inspection hours
per plant has been reduced, from 3,100 in 1990 to 2,500 in 1997, and we
are evaluating further reductions to the inspection program. However,
part of the NRC caution in approaching these reductions is based on
past experience--in which, when the NRC reduced its focus on a given
area, some licensees also reduced their vigilance in that area, with
the result that performance declined. A recently identified example was
the decline in attention that had occurred, across the industry, on
maintaining the facility design basis. In addition, we note that, while
overall safety performance has improved, some plants continue to
experience significant problems. These plants require significant
agency resources for the identification of safety issues and follow-up
of licensee corrective actions. Based on these types of concerns, we
believe it is essential to use a risk-informed approach in any further
inspection program reductions.
In response to concerns about the distribution of inspection hours,
the NRC improved the inspection planning process during the early part
of this decade. These improvements were designed to increase the
gradient between the amount of inspection received by the best
performing plants and plants that experienced performance problems, as
well as to provide a performance-based allocation of inspection
resources (beyond the core inspection program). Currently, inspection
effort for plants experiencing performance problems significantly
exceeds the core inspection program.
Notwithstanding the changes made to date, we acknowledge the need
for additional improvements, and the NRC has both short- and long-term
actions underway to address the concern with the inspection program
focus, including the focus of the core inspection program. The
inspection program has shifted away from programmatic reviews toward a
more performance-based approach. The NRC also has initiated several
activities to increase the incorporation of risk information into
inspection planning and execution. The NRC has issued guidance on risk-
informed inspection practices, providing inspectors with expectations
and guidelines on (1) the relationships between PRA and defense-in-
depth, (2) the integration of non-probabilistic considerations with
PRA, (3) the communication of PRA insights to licensees, and (4) the
expected level of inspector PRA use. In addition, as mentioned earlier,
several training courses have been developed for inspectors and
managers, to increase the NRC staff level of understanding on PRA uses
in various regulatory applications.
As a longer-term action, the NRC will review its inspection
program, including program structure, focus, and requirements/
procedures, beginning in October 1998. This review is intended to
determine whether the inspection program achieves its intended goals,
to identify and eliminate unnecessary inspection requirements, to
improve the risk-informed focus, and to improve program efficiency.
Enforcement.--NRC enforcement jurisdiction is drawn from the Atomic
Energy Act of 1954, as amended, and the Energy Reorganization Act (ERA)
of 1974, as amended. The NRC enforcement program supports the NRC
safety mission by seeking to prevent, at NRC-licensed facilities,
events with impact on public health and safety, through deterrence,
through prompt problem identification, and through prompt,
comprehensive corrective action.
The NRC Enforcement Policy seeks to support this overall goal,
articulated in the NRC Strategic Plan, by addressing non-compliances in
a graded approach. The enforcement process begins by categorizing the
significance of each violation, within the context of associated
inspection findings. Four levels of severity are used to differentiate
violations according to their safety significance. Severity Levels I,
II, and III are used to characterize violations of significant concern,
and violations at these levels (referred to as ``escalated enforcement
actions'') also may result in civil penalties. Severity Level IV
violations, which individually are somewhat less significant (and are
referred to as ``non-escalated actions), may result in Notices of
Violation, but do not result in civil penalties. Violations considered
to be of minor concern do not result in formal enforcement action, and
generally are not documented. To provide incentives for licensees to
promptly identify and correct problems associated with violations,
decisions on whether to issue a civil penalty for a significant
violation, as well as decisions on whether to issue a Notice of
Violation for a less significant violation, are based largely on the
associated licensee efforts to identify and correct the circumstances
that led to the violation.
Within this graded approach, it is important to consider that the
NRC does not find it appropriate to wait for an event or an actual
safety consequence before taking enforcement action. The primary reason
for taking action on Severity Level IV violations is to identify and
correct problems early (as well as to track emergent trends) in the
interest of deterring more significant issues. As a result, when
evaluating the significance of a violation, NRC considers not only the
direct consequences of the specific as-found condition, but also the
potential safety consequences, or risk. In addition, the NRC considers
whether the violation involved repetition, willfulness, pervasiveness,
licensee management involvement, or other characteristics that may make
the violation more safety significant.
Within this area, the basic criticisms are summarized as follows:
The NRC needs to abandon its unsound reliance on an approach that
rigidly demands strict compliance with the regulations, regardless of
safety significance.
Similarly, the NRC focuses unduly on ``paper compliance'' rather
than emphasizing risk-informed considerations.
The recent sharp increase in the number of violations reflects a
changing NRC culture, and is not consistent with the continuing
improvements in industry safety performance.
The cost of responding to violations of low severity is excessive.
NRC civil penalties are excessive.
The NRC enforcement program is overstaffed.
The NRC enforces regulations inconsistently.
As stated above, the NRC uses enforcement to emphasize to its
licensees the need to prevent violations, and when violations occur,
the need to identify and to address the issues associated with them
before they manifest themselves as significant events or challenges to
safety systems. However, because most of the violations identified are
relatively low-level, the majority of enforcement actions issued are
low level. The NRC recognizes the resource demands associated with
responding to these non-escalated enforcement actions, and has taken
several short-term actions to reduce the licensee burden in this area.
The efforts underway (some of which merely involve exercising self-
discipline in carrying out existing NRC policy) include: (1) ensuring
that the NRC staff gives credit for licensee actions in both
identifying and correcting violations in deciding whether to cite a
low-level violation; (2) not requiring a written response when low-
level violations are issued and corrective actions are addressed
sufficiently in writing elsewhere on the docket (e.g., in a Licensee
Event Report); (3) providing more consistent treatment when multiple
violations are identified with a common root cause; and (4) clarifying
NRC staff guidance for the treatment of violations identified as the
result of licensee corrective actions. In short, the intent is to
simplify the disposition of these types of violations. In addition, as
part of ongoing efforts, such as the NRC enforcement policy revision
and request for public comment issued in May 1998, the NRC will seek to
identify other measures to improve consistency and to ensure a safety
focus in documenting and dispositioning violations. The intent is to
encourage prompt identification of problems, to ensure corrective
action commensurate with risk, and not to have problems linger which
could have a cumulative safety impact. The intent of enforcement is to
improve performance. The short-term and long-term actions the NRC has
underway should address the greatest concerns. We are expediting these
changes.
The NRC recognizes that civil penalties have increased since the
1995 revision to the Enforcement Policy. A significant factor in this
increase appears to be due to increased headquarters involvement in the
evaluation process, which has improved region-to-region consistency but
also has resulted in the increased identification of situations that
warrant escalated action. In general, the NRC believes that its
practices involving Severity Level I, II, and III violations and civil
penalty assessments are appropriate. However, as part of the
improvements discussed in this area, the NRC intends to consider the
need for additional changes in the escalated enforcement process.
For licensees and other stakeholders, the area clearly of more
concern has been the sharp increase in the number of non-escalated
enforcement actions from 1995 to 1997. In fact, the NRC does not
believe that this increase reflects a decline in reactor safety
performance. Rather, the increase is due, at least in part, to our
efforts to improve the quality and consistency of the inspection and
enforcement programs and to an increased focus on compliance.
Inspection guidance issued in fiscal year 1996 resulted in a
significant improvement in the consistency of documenting inspection
findings, which in turn resulted in additional violations. Also,
following pivotal inspections at the Millstone Station and other
facilities, NRC management placed a greater focus on ensuring that the
nuclear plant licensing basis has been maintained, including
maintaining an accurate Updated Final Safety Analysis Report. Special
initiatives, such as maintenance and design inspections, also have
contributed to the increased number of violations. The unanticipated
increase in Severity Level IV violations has led to a sharpened focus
on long-standing issues related to non-escalated enforcement actions,
issues which go back over a number of years.
The NRC has recognized for some time that the relative consistency
of Enforcement Policy implementation associated with Severity Level I,
II, and III violations is not demonstrated to a commensurate degree for
non-escalated actions. Historically, the level of enforcement staff
resources has only allowed oversight of enforcement actions of higher
significance. The resulting minimal oversight of low level enforcement
activities, typically comprising approximately 90 percent of all
enforcement actions, has allowed inconsistent enforcement practices to
develop. In recognition of this problem, additional staffing was added
to the enforcement staff within the past several months, to oversee, in
part, the consistency and control of low-level violations. As an
additional measure, the NRC has increased the headquarters oversight
and coordination of the appeal process for disputing low-level
violations issued by NRC regional offices, ensuring the opportunity for
a headquarters review of licensee disputes regarding whether a
violation actually exists, its severity level, or the appropriateness
of the sanction. To ensure consistency in the specific areas of the
Maintenance Rule and 10 CFR 50.59, special enforcement review panels
have been established to review all associated potential enforcement
actions.
Additional efforts planned in this area include: (1) further
meetings with stakeholders to obtain additional perspectives on
enforcement and to consider the need for further change; (2)
improvements to existing guidance on the threshold separating Severity
Level IV violations and minor violations; (3) the development of
additional guidance on how risk insights should be factored into
enforcement decisions, as well as on the use of ``regulatory
significance'' in evaluating enforcement actions; (4) additional
training on the results of these changes and initiatives; (5) internal
audits of the consistency of issuing low-level violations; and (6)
closer coordination between inspection and enforcement activities.
Summary.--In summary, the NRC is aware of the impact and resource
demands that the inspection program place on its licensees, and plans
to institute a comprehensive review of this program. The NRC also is
mindful of the licensee burden associated with NRC enforcement actions.
As described above, we will reinforce existing policy provisions and
seek additional measures to ensure that enforcement actions are not
unnecessarily burdensome, and we will focus on ensuring that NRC
enforcement actions are based appropriately on safety significance.
Further review of the enforcement program will be conducted as
described above. Program changes and training for both inspection and
enforcement will emphasize a risk-informed and performance-based
approach.
C. Reactor Licensee Performance Assessment
Inspection, enforcement, and assessment all play a role in
evaluating reactor licensee performance to provide reasonable assurance
of the adequate protection of public health and safety. The specific
role of assessment is to integrate individual insights, and to arrive
at an overall conclusion (broader in scope and/or longer in term) with
respect to licensee safety performance. Currently, the NRC uses several
processes to assess the safety performance of nuclear reactors,
including: (1) Plant Performance Reviews (PPRs), conducted every 6
months by regional managers; (2) Systematic Assessments of Licensee
Performance (SALPs), conducted every 12 to 24 months by agency middle
managers; and (3) Senior Management Meetings (SMMs), conducted every 6
months by agency senior managers, until recently, when the Commission
directed that SMMs be held annually. These processes were developed and
implemented at different times over the past 18 years to address
specific agency concerns, each intended to strengthen the NRC
assessment of plant performance and to identify performance issues, in
order to focus agency resources on plants warranting additional
inspection, and to ensure that problems are corrected before a serious
decline in nuclear safety emerges.
Within this area, the basic criticisms are summarized as follows:
NRC reactor performance assessment processes lack clear, objective
assessment criteria.
Specifically, the NRC has no clearly defined criteria for placing
nuclear power plants on the NRC ``Watch List.''
NRC reactor performance assessment processes are too resource
intensive, both for licensees and for the NRC.
In general, the NRC agrees that these criticisms form the basis of
specific agency initiatives that are intended to address these very
concerns. These initiatives are discussed below.
In 1996, the Commission directed that a study of the SMM process be
performed. A consultant, Arthur Andersen, conducted a study and
recommended a number of improvements. Many of these recommendations
have been incorporated, including: (1) increased emphasis on objective,
quantitative information; (2) development and use of performance
indicator trending methodology; (3) increased participation at the SMM
to ensure a broad perspective; (4) improved process facilitation at
SMMs; and (5) improvements to the quality and format of the data
provided to SMM participants.
The focus on increasing the objectivity of the SMM process led to
additional scrutiny of the entire NRC function of reactor performance
assessment. While each of the NRC assessment processes has been subject
to periodic, detailed reevaluation, it became clear that the agency had
never conducted an integrated review of the entire assessment function.
Recognizing the need for such a broad-scope review, in 1997 the
Commission initiated an Integrated Review of the NRC Assessment Process
for Operating Commercial Nuclear Reactors (referred to as IRAP). The
IRAP was conceived as a two-phase effort, with the objective of the
first phase being the development of a single, integrated assessment
process that is more objective, more scrutable, and less resource
intensive than the current mix of processes. Phase two, scheduled to
begin in October 1998, will direct a similar level of scrutiny at the
NRC reactor inspection program.
Early in the concept development stage, the NRC met with
representatives from the Nuclear Energy Institute (NEI), the Union of
Concerned Scientists, and other members of the public to get their
views on the objectives, scope, and outputs of NRC assessment. In March
1998, the IRAP team forwarded an initial assessment concept to the
Commission for consideration. The Commission directed the NRC staff to
solicit public comments on this proposal, and provided general
principles for assessment activities. As development of the process
continues, the NRC plans to conduct meetings and workshops with the
public and the industry, and to discuss possible alternative
approaches, including a recent NEI proposal on risk-informed and
performance-based reactor licensee oversight.
The current assessment processes depend on both qualitative and
quantitative information. Recognizing the value of clear, quantitative
assessment criteria, the Commission already has initiated several
improvements to the current assessment processes to improve
objectivity, consistency, and scrutability. The improvements include:
(1) an increased focus on plant safety performance indicators; (2) more
systematic processing and comparison of regulatory performance data in
the areas of human performance, enforcement, allegations, and risk; and
(3) a structured analysis of performance data in a publicly released
plant issues matrix (PIM) for each plant.
The NRC will continue to work with its stakeholders to identify and
develop quantitative indicators. As progress is made, the shift to a
more quantitative set of measures will continue. However, existing
high-level quantitative performance indicators are slow to respond to
actual declines in safety performance (in some cases involving multi-
year response times). Most of the current performance indicators are
event-based and do not provide a leading indication of trends in
licensee safety performance. GAO reports in the past have been critical
of the lack of leading indicators in the NRC performance assessment
process. Therefore, although NRC will increase the use of quantitative
information, we also will continue to make use of qualitative insights.
The Commission has directed the NRC staff to work closely with NEI to
determine the merits of their proposal for an assessment process based
on quantitative performance indicators. This action is currently in
progress.
In addition, as noted above, the SMM has been moved from a
semiannual to an annual schedule beginning in fiscal year 1999. This
adjustment coincides with other changes to the various NRC assessment
processes, and is commensurate with the overall improvement in industry
performance and the slow rate of change in the performance of
individual plants. This short-term change will result in some resource
savings; however, we hope to achieve more dramatic resource savings
from the successful development and implementation of the integrated
assessment process discussed above, particularly as redundancies in the
current processes are identified and eliminated. As these changes are
implemented, the NRC periodically will review their effectiveness and
continue to solicit stakeholder input on emerging issues of concern.
Since the inception of the NRC performance assessment processes
(following the Three Mile Island Accident), the agency has periodically
reviewed, sought stakeholder feedback, and made changes where
appropriate. Recent criticisms and self-evaluations indicate that some
additional improvements are warranted to improve objectivity and to
enhance efficiency and effectiveness, while maintaining the global
objective of the current processes--that is, to evaluate reactor
licensee safety performance to ensure the adequate protection of public
health and safety.
D. Reactor Licensing and Oversight
Regulatory Processes.--The NRC strives to maintain open
communications with its stakeholders regarding their concerns related
to NRC consistency in implementing its regulations. Past NRC actions to
address these concerns include: (1) the development and publication of
the Standard Review Plan and associated regulatory guides to provide
guidance on implementing the regulations; and (2) the Regulatory Review
Group and National Performance Review Group studies of regulations and
related processes. Other measures, such as the backfit rule (10 CFR
Part 50.109), have been designed to balance the NRC focus on protecting
public health and safety with the burden of implementing that focus.
The NRC does not, and legally cannot, impose requirements except in
accordance with applicable statutory requirements such as the Atomic
Energy Act and the Administrative Procedure Act. NRC requirements can
only be promulgated in the form of regulations, licenses and license
conditions, or orders. However, certain NRC regulatory processes, while
not actually imposing legally binding requirements, can be perceived as
pressuring a licensee to take actions that exceed regulatory
requirements in order to resolve the immediate situation. Such
situations are perceived, at times, as imposing de facto requirements
on the licensee, and have been the focus of criticisms that the NRC is
over-regulating or creating undue regulatory burden for its licensees.
Recent criticisms in this area are summarized as follows:
The NRC has implemented informal processes that bypass formal
procedures, thereby, in effect, imposing requirements inappropriately.
The NRC should not impose virtual backfits without a formal backfit
analysis.
The NRC uses Confirmatory Action Letters to impose conditions on
licensees even in situations where the NRC is aware that enforcement
action could not be supported.
The NRC agrees that a number of regulatory processes should be
reevaluated in an effort to ensure they are not creating an
inappropriate burden on its licensees and the NRC staff while
maintaining an appropriate level of safety. Examples of regulatory
processes in which such burdens can originate include NRC generic
communications, Confirmatory Action Letters, diagnostic inspections,
and the SALP process (discussed in Section IV.C of this testimony).
NRC generic letters and NRC bulletins legally can require that
information be provided to the NRC, but legally cannot create a new
requirement for a specific course of action to resolve an issue.
Generic communications have been used, however, to provide new or
clarified interpretations of existing requirements. The NRC recognizes,
further, that the production of information itself can be burdensome,
and that the actions requested, in some instances, can be construed as
the imposition of new requirements. As a result, the NRC has adopted
measures that internally challenge the need for each generic
communication, and provide the industry and the public with the
opportunity to comment on the actions requested and on their cost and
safety benefit. In addition, proposed generic letters and bulletins now
are reviewed and discussed by NRC executive management at the earliest
stages of formulation. These controls are intended to ensure that, if a
proposed generic communication is approved for further development, the
requested actions and the required response are commensurate with the
safety significance of the issue involved. Equally important is the
publication of proposed generic letters and bulletins for public
comment, to ensure that efforts to reduce unnecessary regulatory burden
do not result in inappropriate reductions in safety margins.
Ultimately, the Commission is informed prior to the issuance of each
generic letter. An NRC self-assessment is in progress which, in part,
will focus on the development of generic communications.
If the NRC were to impose on a licensee a new interpretation of an
existing requirement without adding a new regulation (for example
through a generic letter), the NRC first must meet the requirements of
10 CFR 50.109 relating to plant-specific backfits. In most cases these
new interpretations are issued for comment before they are imposed on
other licensees. Backfits that require a regulatory analysis must be
approved by the NRC Executive Director for Operations before being
forwarded to the licensee, and a process exists for the licensee to
appeal the imposition of any backfit.
A Confirmatory Action Letter (CAL) is sent by the NRC to a
particular licensee to confirm and document a commitment by that
licensee to take certain actions in response to an identified safety or
regulatory issue. Properly used and written, a CAL does not impose
legally binding and enforceable requirements. Rather, it documents the
NRC understanding of a voluntary licensee commitment to actions that
will resolve the issue. The NRC and the licensee should discuss and
agree on the actions necessary or appropriate to address the underlying
issue. In fact, one of the functions of a CAL is to ensure that no
misunderstanding arises about the actions to which the licensee is
committing. The licensee is not required to make any commitments, but
may choose to do so as a means to resolve the issue without the need
for more formal NRC action to address the underlying issue. If the
licensee chooses not to commit to actions that resolve the issue, the
NRC must decide whether its obligation to ensure adequate protection of
public health and safety warrants more formal action, such as the
issuance of an order, to require the licensee to address the underlying
issue. The licensee has administrative and legal recourse if it
disagrees with the NRC action.
Used appropriately, CALs have proven to be an effective regulatory
tool to ensure that a licensee promptly addresses identified safety
issues. Properly used, CALs should serve the interests of licensees,
the NRC, and the public. However, the NRC acknowledges that a licensee
may agree to a CAL and the associated actions simply to avoid lengthy
discussions with the NRC over plant readiness for restart. In this
context, a commitment to an action outside regulatory requirements (or
that is perceived to be outside regulatory requirements) may appear to
be the most expedient course of action. To ensure that CALs are used in
an appropriate manner, the NRC intends to re-emphasize to NRC
management and staff the proper use and wording of CALs. There also
will be increased NRC management oversight of the issuance and
implementation of CALs. The NRC also will examine the need for
establishing a threshold for issuing a CAL. Licensees are encouraged
strongly to bring any future concerns related to CALs to the attention
of NRC senior management and the Commission.
In keeping with its obligations to the public it serves, the NRC
conducts its business in open forums whenever feasible. The NRC will
maintain an open dialogue with the public and industry concerning its
regulatory processes.
Design Basis Information.--In this topical area, the basic
criticisms are summarized as follows:
The NRC has reinterpreted improperly what constitutes design basis
information.
The NRC review of design baselines is unduly burdensome, and is
unproductive in terms of safety benefit.
The NRC should define its requirements in this area.
To place these criticisms in perspective requires at least a brief
historical context. In the mid-to-late 1980's, the NRC identified
concerns that certain design basis information was not being maintained
properly, and that plant modifications were being made without the
licensee having a complete understanding of the plant design basis.
These NRC findings heightened awareness in the nuclear power industry
of the need to improve the adequacy of design documentation. Many
licensees voluntarily initiated extensive efforts to retrieve and
reconstitute the design basis information for their plants. To assist
the industry in performing design basis improvement programs, the
Nuclear Management and Resources Council (NUMARC), the predecessor to
NEI, developed guidelines providing a standard framework for licensee
programs to improve design basis information.
In late 1991, the NRC evaluated whether rulemaking, guidance, or a
policy statement was needed to address this need for licensees to
retain accurate design bases information. In August 1992, the
Commission issued a policy statement concerning the adequacy and
availability of design basis information, stressing the importance of
maintaining design basis information and recommending that all power
reactor licensees assess the accessibility and adequacy of their design
basis documentation. In the same time-frame, the 1991 Regulatory Impact
Survey highlighted the regulatory burden on licensees occasioned by NRC
team inspections, with the result that, over the next several years,
the NRC reduced its effort to conduct specific, design-related team
inspections. Instead, issues related to maintaining accurate and
accessible plant design documentation were addressed principally as
elements of inspection and follow-up of operations-related activities.
During a number of inspections in 1995, inspectors found, in some
cases, that design bases were not being maintained or adhered to
appropriately. As a consequence of this new information, the NRC
recognized that voluntary industry efforts to improve and maintain
plant design basis information had not been effective in all cases. In
October 1996, the agency issued 50.54(f) letters to power reactor
licensees, requesting that they submit information that would provide
the NRC added confidence and assurance that facilities were being
operated and maintained within their design bases, and that any
deviations were being reconciled in a timely manner. Licensee responses
were used to prioritize selected team inspections that focused on
design issues of risk-significant safety systems. These inspections
resulted in significant findings, which included, among other things:
(1) plant modifications or evaluations that had resulted in operation
outside the design basis; (2) modifications or evaluations resulting in
safety systems not being able to perform their intended safety
functions; and (3) inadequate testing of safety-related components.
Some of the findings resulted in declaring equipment or systems
inoperable, requiring plant modifications and resulting in voluntary or
technical-specification-required plant shutdown. These findings were
detailed to the nuclear power industry in Information Notice 98-22,
issued June 17, 1998. Although licensees expended significant resources
to document their design bases, significant safety issues were found
and corrected that otherwise might have gone undetected.
The NRC has concluded that past efforts may have provided short-
term emphases rather than long-term resolution to the issue of adequacy
of design-basis information. In addition, initiatives such as risk-
informed and performance-based regulation emphasize the importance of a
common understanding between the NRC and its licensees on the
maintenance and application of design-basis information within the
regulatory framework. The NRC believes, however, that a combination of
recent and upcoming NRC actions will contribute to the final resolution
of this issue.
Among the short-term improvements associated with the plant design
basis and the related regulatory framework, the NRC has: (1) issued
revised guidance to the industry explicitly discussing the evaluation
process to be used in resolving degraded and nonconforming conditions
at power reactor facilities; (2) held a Commission-level meeting with
the Nuclear Energy Institute (NEI) in June 1998 to discuss issues
related to design basis information; and (3) held a working-level
meeting with NEI to resolve outstanding issues, with the goal of
endorsing NEI guidance that would clarify what types of information
should be considered design basis information.
In the longer-term, the NRC intends, as one significant measure, to
provide more specificity and flexibility in 10 CFR 50.59, the
regulation under which licensees can make changes to their facilities
and procedures without NRC approval. The NRC will support the
completion of an industry guidance document related to design-basis
information. In addition, the NRC intends to develop an Advance Notice
of Proposed Rulemaking that would solicit public comment on possible
rule changes. These rule changes are intended to clarify which design
or analysis deficiencies require reporting, and to specify the
timeliness of such reporting.
Power Reactor License Renewal and NRC Adjudicatory Processes.--
Although the NRC only recently received its first two applications for
the renewal of power reactor licenses, preparations for license renewal
has been a long-term effort. Within this specific context, as well as
more generally, NRC adjudicatory processes have been a target of
criticism. The basic criticisms in this area are summarized as follows:
NRC adjudicatory processes take too long, and cost too much.
Specifically, the Atomic Safety and Licensing Board (ASLB) is too
costly for the benefit it provides.
Legislative-style hearings should replace NRC adjudication
processes.
The review process for power reactor license renewal applications
is an appropriate arena in which to implement new adjudicatory
procedures.
The Commission has been working to pursue the implementation of
measures that would streamline the hearing process--both in
anticipation of license renewal applications and in general. The
Commission has issued a policy statement clearly delineating Commission
expectations with regard to the conduct of adjudicatory proceedings,
including license renewal proceedings. In addition, the Commission
intends to provide guidance to licensing boards in individual
proceedings, to ensure that proceedings are conducted in a fair and
efficient manner, and that they result in adequate records for
decision. Provisions also have been made for the timely identification
of any open generic policy issues for Commission decision, and
effective integration of the technical review and adjudicatory
schedules. As a result of these actions, the NRC expects to complete
the review of the initial license renewal applications, including the
safety review, environmental review, and public hearing, within
approximately 30 to 36 months from the receipt of the application.
Based on that experience, the Commission expects that the review
process for subsequent applications will be more efficient. Finally, we
recognize that the NRC is unique among Federal health and safety
regulators in the degree to which we historically have used judicial
trial-type procedures to resolve technical issues. We will examine
whether changes (including legislation) would be appropriate to expand
our use of more informal or legislative-style hearings in licensing
proceedings.
In the specific area of power reactor license renewal, the
Commission recognizes that permitting plants to operate for an
additional 20 years, where appropriate, may be an important factor in
ensuring a diverse energy mix for the nation in the future. Nuclear
power plants produce approximately 20 percent of all electric power
produced in the United States. Approximately 10 percent of the current
operating licenses will expire by the end of 2010, and more than 40
percent will expire by 2015. License renewal also may be important to
the economic viability of a utility because of the additional time over
which its investment can be amortized.
To prepare early on for this possibility, the NRC issued the
license renewal rule (10 CFR Part 54) in 1991, to establish the
technical and procedural requirements for renewal of operating
licenses. Based on initial experience in implementing the rule, the
Commission recognized that a more stable and predictable regulatory
process for license renewal could be established, and amended the rule
in 1995, to limit the scope of the license renewal review to particular
time-dependent design analyses, and to aging management of long-lived
passive structures, systems, and components. Additionally, the NRC
environmental regulation (10 CFR Part 51) was amended in 1996 to focus
our environmental review process for license renewal. This revision
streamlined the environmental review process by having a large number
of environmental issues addressed in a Generic Environmental Impact
Statement, thereby eliminating the need for such issues to be addressed
individually by each license renewal applicant.
Up to this point, the industry approach to license renewal has been
to submit for NRC approval plant-specific and generic technical reports
on specific topics, before submitting complete license renewal
applications. This approach was intended to establish a foundation of
technical information that a licensee can use to evaluate the
feasibility of a license renewal application, and to reference that
information later in the application itself. On April 10, 1998,
Baltimore Gas and Electric delivered the first license renewal
application for their two-unit Calvert Cliffs plant to the NRC.
Subsequently, on July 7, 1998, Duke Power Company submitted a license
renewal application for their three-unit Oconee plant. Additionally,
the Southern Nuclear Operating Company recently announced plans to
consider license renewal for its two Hatch units. This means that
license renewal is no longer a theoretical exercise. Therefore, our
focus has changed. The NRC is working to ensure that a disciplined
license renewal path exists, fair to all parties involved and focused
on the technical merits of the applications.
To that end, the Executive Council of the NRC (comprised of the
Executive Director for Operations, the Chief Financial Officer, and the
Chief Information Officer) has been tasked to ensure that the
implementation of license renewal is a unified and coherent process.
These senior managers will focus on three areas: oversight,
coordination, and strategic implementation. I reminded the Executive
Council to ensure that policy matters warranting Commission attention
are promptly identified and communicated to the Commission. In
addition, the NRC Chief Financial Officer and Chief Information Officer
have been tasked, under the aegis of the Executive Council, with
establishing a process for efficiently shifting or refocusing
resources, as needed, to ensure a timely license renewal review.
The Nuclear Energy Institute continues to sponsor various industry
initiatives for license renewal, and has established an industry
working group to address license renewal issues. The NRC has developed
new practices and procedures for the conduct of the license renewal
reviews. These procedures include specific provisions to identify and
prioritize generic technical issues in support of, and without
jeopardizing, the aggressive review schedules established for the
initial renewal application reviews. These practices also are derived
from and build upon the broader improvements to the reactor licensing
process, previously described.
In summary, the Commission believes that these measures, including
the measures designed to streamline NRC adjudicatory processes, will be
effective in ensuring a technically sound but timely process for power
reactor license renewal.
E. Uranium Recovery
In this area, the basic criticisms can be summarized as follows:
The NRC may have expanded inappropriately the scope of its reviews.
The NRC has interpreted the law inappropriately to limit the use of
mill tailings impoundments for other radioactive wastes.
The NRC inappropriately imposes an economic feasibility requirement
on some applicants.
The scope of NRC reviews, particularly its authority for regulating
the ground-water aspects of in situ leach (ISL) facility operations, is
based on the Atomic Energy Act (AEA) provisions for NRC regulation of
the production of uranium. The Uranium Mill Tailings Radiation Control
Act (UMTRCA) and the National Environmental Protection Act of 1969
reinforced the NRC regulatory authority provided by the AEA. Currently,
the NRC is working with individual States to identify ways in which we
can rely on State reviews of ground-water protection at ISL facilities.
By doing this, we believe that we can eliminate dual regulation between
the NRC and the States.
Although the NRC agrees that it can be in the national interest to
use mill tailings impoundments as disposal sites for AEA waste other
than 11e.(2) byproduct material, one consideration should be
willingness of the Department of Energy (DOE) to take possession of
these sites under current statutes. Under UMTRCA, the long-term
custodian (i.e., the State, or the DOE if the State refuses) is only
required to take 11e.(2) byproduct material. If other material is
placed in the cell, the long-term custodian must agree to take the cell
for long-term care. In the past, the DOE has been hesitant to do so,
since this could create a situation of perpetual dual regulation. The
DOE has agreed to allow the disposal of hazardous material at one mill
site. However, such disposal required permitting by the U.S.
Environmental Protection Agency, and a perpetual indemnification from
the licensee guaranteeing cleanup. In September 1995, the NRC staff
issued guidance outlining criteria that would allow for disposal of
material other than 11e.(2) byproduct material in mill tailings
impoundments. The NRC staff currently is reviewing these criteria, to
determine whether they can be made less restrictive without creating a
situation in which mill tailings sites would be subject to dual
regulation.
The NRC does not impose an economic-feasibility requirement for the
processing of alternate feedstock material at uranium mills; however,
existing NRC guidance provides that a licensee must certify that it is
processing alternate feedstock for its uranium content. The guidance
describes plausible grounds for making this certification, which
include financial considerations, high uranium content of the alternate
feedstock, or other bases.
This issue is of particular concern to the State of Utah, which
filed a petition to intervene on an application for processing
alternate feedstock. The Utah petition raised concerns that, by taking
alternate feedstock, the licensee was operating a low-level waste
disposal cell, which was under regulatory authority of the State of
Utah. Utah argued that, to avoid State regulation, the licensee was
processing the material to change its legal definition to 11e.(2)
byproduct material. Recently, the NRC has granted a uranium mill
authority to process alternate feedstock. As a result of this action,
the NRC has received letters of concern from Congressmen James V.
Hansen and Merrill Cook; from the Speaker of the State of Utah House
and President of the State of Utah Senate; from the County Council in
Tooele County, Utah; from the Utah Department of Environmental Quality;
and from the Navajo Nation. Because the processing of alternate
feedstock material is controversial, and in order to ensure that NRC-
licensed uranium mills do not undertake processing of material simply
to avoid other regulatory requirements, the NRC requires the
certification test discussed above.
These issues have been recently raised to the Commission in a white
paper submitted by the National Mining Association (NMA). The NRC
believes that additional progress can be achieved on licensee and
stakeholder concerns related to uranium recovery facilities. To that
end, in early fiscal year 1998, the NRC initiated an evaluation of the
entire regulatory framework for uranium recovery facilities. This
evaluation includes the issues identified in the NMA white paper. As
part of the evaluation, the NRC will hold public meetings in Texas,
Colorado, New Mexico, and Wyoming to discuss the regulatory framework
for uranium recovery. From this dialogue, the NRC intends to enhance
the effectiveness and efficiency of the uranium recovery regulatory
program. The NRC staff has prepared and the Commission is reviewing an
overarching risk goal for the decommissioning of uranium recovery
facilities.
F. Organization and Management Effectiveness and Efficiency
In this overall topical area, the basic criticisms can be
summarized as follows:
The NRC needs a significant, agency-wide review.
The NRC has done little to respond to previous internal and
external reviews.
NRC staffing should be sharply reduced, particularly in the areas
of management and support, human resources, finance, and professional
staff. Reorganization to combine groups according to processes would
add efficiency.
NRC research efforts should decrease to reflect industry maturity.
NRC involvement in international activities is excessive.
Even with severe budget cuts, NRC staffing would exceed that of the
nuclear regulatory bodies of other countries.
In responding to these criticisms, we begin by noting that the NRC
is responsible for the regulation of a complex technology and, as a
result, one might expect that differing views will exist as to what are
the best regulatory solutions to various issues. However, the NRC
historically has initiated programs and processes designed to assess
its own regulatory requirements and framework, to determine whether
adjustments can be made to improve safety, to reduce unnecessary
licensee burden, and to improve NRC efficiency. Particularly in recent
years, the Commission has been active in seeking ways to improve its
regulatory effectiveness and efficiency.
Organization and Planning.--In August 1995, the Commission
initiated a Strategic Assessment and Rebaselining review. Designed to
be introspective and self-critical, this full-scope analysis explored
the relationship of agency programs to Congressionally mandated
authorities and responsibilities, with the objective of providing a
solid, reliable foundation on which to base a strategic framework for
future decision-making. This study was used as the foundation for
developing the NRC fiscal year 1997-2002 Strategic Plan, the fiscal
year 1999 Performance Plan, and program-level outcomes-focused
operating plans.
Another NRC organizational tool, a key component in ensuring
effectiveness and efficiency, is the agency-wide Planning, Budgeting,
and Performance Management Process (PBPM). As a natural outgrowth of
the Strategic Assessment and Rebaselining initiative, the PBPM allows
the agency to implement the Government Performance and Results Act
(GPRA) and other Congressional and Administration initiatives that
demand greater accountability for results. The PBPM involves the
following four main components:
Setting the strategic direction and performance expectations for
the organization;
Determining the programs, resources and planned accomplishments
needed to meet those expectations;
Measuring and monitoring performance against the established
expectations; and
Assessing performance in light of lessons learned and applying the
results.
This builds in accountability for the accomplishment of work, and
provides a direct means to refocus work or to re-deploy resources to
adjust to emergent or competing demands.
Information Technology and Information Management.--The NRC has
changed its process for information management and the for the
deployment of information technology, and thereby has improved
effectiveness and reduced cost. This change is driven by the Clinger-
Cohen Act, and more fundamentally by the overall desire of NRC
management to identify opportunities for reducing the cost of doing
business. Aggressive internal cost improvement activities have reduced
NRC operating costs, while still funding needed improved management
processes and IT investments.
A number of NRC initiatives have strengthened our management of
information technology (IT) and information management. One example is
our implementation of a robust Capital Planning and Investment Control
process (CPIC), which ensures that NRC IT projects have a strong
business case, a demonstrable return on investment, and adequate
planning and project management to ensure success. The CPIC process has
been used to approve four major IT investments to date: (1) STARFIRE,
an integrated resource management system; (2) the NRC Reactor Programs
System (RPS); (3) our Agency Documents Access and Management System
(ADAMS); and (4) our Personal Computer Refresh system. Three of the
four projects are on schedule and on budget. The fourth project, RPS,
has identified new requirements due to a business change, and currently
is under review for an increased scope and budget.
A second initiative has been the development of an Information
Technology Architecture to ensure that IT investments will work
together effectively. The NRC has developed a detailed architecture of
standards covering not only hardware and telecommunications but also
how application systems must work together and share data. We have used
this architecture as a framework for studying whether the 13 different
types of large-scale computers currently in use could be used more
effectively. As a result, we have found a way to move systems so that
we can retire an aging and expensive-to-maintain minicomputer. We will
continue to use this architecture to ensure the stable operation of the
NRC technology infrastructure, and to detect overlap and duplication.
Perhaps the most significant IT initiative is the development of a
comprehensive plan for the remediation of all the NRC mission-critical
and business-essential systems, to ensure that they will be Year 2000
compliant. [For additional discussion of overall NRC efforts to address
the Year 2000 technology problem, see Section V.I.]
NRC Self-Assessment.--Self-assessment plays a critical role in NRC
organizational and management effectiveness. Through the PBPM, the NRC
has sought to institutionalize self-assessment in our normal agency
processes. As discussed throughout this testimony, we are continuing to
evaluate and reform our technical and support functions in order to
enhance effectiveness and efficiency. In addition to the reactor
inspection, enforcement, performance assessment, and licensing reviews
already mentioned, our self-assessments to date have led to the
restructuring of our research and rulemaking programs to be more
responsive to regulatory priorities, as well as to the closure of the
NRC Walnut Creek Field Office in California to achieve process
efficiencies. We have been conducting an interoffice assessment of
event analysis activities to eliminate overlap and duplication, and we
are preparing to issue an Advance Notice of Proposed Rulemaking that
would modify event reporting requirements to make them less burdensome
and more risk-informed. Our self-assessments of the NRC research
program led to its downsizing by approximately 80 percent over the last
17 years, and we will continue to adjust its content and resource
levels to reflect changes in the industry and in regulatory need.
The NRC encourages constructive criticism of its actions, and views
this as a means for improving the regulatory process. The NRC Office of
Nuclear Reactor Regulation (NRR) holds annual Regulatory Information
Conferences, during which current and important regulatory issues are
discussed openly and candidly with the nuclear power industry and the
public. Workshops and other public meetings are held regularly to
discuss regulatory developments in an open forum. Public comments
invariably are sought on major regulatory actions, and the agency
currently is working with the industries it regulates on a broad range
of regulatory and technical issues.
As a significant example of soliciting stakeholder inputs in a
public forum, the Commission earlier this month hosted a round-table
discussion, open to the NRC staff, the industry, Congressional staff,
the press, and the general public, to understand more clearly the
recent criticisms of various NRC programs, and to invite additional
comments and insights from a wide range of participants. The meeting
was widely attended, and included participation by the Commission,
senior NRC management, industry representatives, the Union of Concerned
Scientists, and a former NRC Commissioner. The discussion included a
vigorous dissection of various NRC reactor oversight functions and
regulatory processes, and was helpful in providing additional insight
and perspective on the areas of criticism already discussed.
In addition to these public forums, the Commission has created
internal processes to encourage licensees to bring their concerns
directly to the attention of NRC management. The NRC staff also
solicits more routine feedback from licensees, to gain a broader view
of the effect of NRC activities on the safe operation of nuclear power
plants. The NRC evaluates this feedback, along with information from
other sources (such as the Institute of Nuclear Power Operations (INPO)
or NEI), to determine appropriate follow-up actions. The results are
tracked and reported annually to the Commission.
To augment our self-assessment capabilities, we recently obtained
the services of Arthur Andersen and Company to look at our PBPM
process, focusing on how we conduct self-assessments and program and
resources planning in reactor-related programs. This study will be
ongoing in fiscal year 1999, and will be expanded to include our
support functions.
Management and Support Staffing.--In addition to the critical
reviews of our program activities, we believe our management and
support programs also must be efficient and proportionally sized to our
mission functions. Since fiscal year 1994, the NRC has reduced Senior
Executive Service managerial positions by 16 percent, from 220 to 185,
and we have improved the overall supervisor-to-employee ratio from 1:4
to 1:6 (633 to 402). Reductions in these areas will continue into
fiscal year 1999.
NRC Participation in International Activities.--With regard to
agency participation in international activities, the international
activities in which the NRC participates, and which the NRC funds, do
in fact contribute to and are beneficial to the regulation of U.S.
nuclear power plants, and are not duplicative of activities performed
by other groups. As a simple illustration: when considering the
population of nuclear power plants based on or derived from U.S.
technology, more are operating outside the United States than inside
the United States. To make optimal use of this operational experience
database requires access to and interaction with the operators and
regulators of these facilities, as well as interactions with
organizations such as the World Association of Nuclear Operators
(WANO). Such insights provide an important input to NRC regulatory
activities, and can directly benefit the U.S. nuclear industry when
relevant safety issues are surfaced abroad before they surface in U.S.
plants. Moreover, with the decline of our research budget, the NRC must
leverage its limited resources to obtain the information necessary to
respond to emerging safety issues and to industry initiatives.
While there certainly are lessons to be learned from foreign
nuclear organizations, the NRC does not believe it is appropriate to
size its organization based on foreign organizations. Differences
between the size of the NRC professional staff and that of other
national nuclear regulatory organizations are due to significant
institutional, economic, and legal differences. Some foreign
governments divide the responsibility for regulation of nuclear-related
activities among several different entities, whereas U.S. law provides
the NRC with nuclear safety and regulatory responsibilities for a very
broad range of nuclear-related activities. [For additional detail on
NRC international programs, see Section V.H of this testimony.]
Summary.--In summary, the Commission has made and will continue to
make changes to enhance the efficiency and effectiveness of the NRC. To
ensure this progress, the Commission will employ its agency-wide
Planning, Budgeting and Performance Management process, internal self-
assessments, and, as necessary and appropriate, the use of outside
consultants. In addition, the NRC will continue to operate in an
atmosphere of openness, candor, and a willingness to stimulate feedback
and to listen to constructive criticism from its stakeholders.
V. Other Agency Programs and Areas of Focus
A. Electric Utility Deregulation
The economic deregulation of electric utilities has continued its
transition from the wholesale to the retail environment. While the
Federal Energy Regulatory Commission (FERC) and the State Public
Utility Commissions (PUCs) have the responsibility for rate regulation,
several areas of NRC focus also have emerged as the transition to a
competitive market has begun to take shape. These are not areas of
major resource expenditure for the NRC; however, as utilities
restructure internally, as ownership arrangements change, as mergers
occur, and as licensees work to control and reduce costs, the NRC must
understand and respond appropriately to the effects the that changing
business environment could have on nuclear safety. NRC areas of focus
related to electric utility restructuring fall under four general
headings: (1) any impact of cost-competitiveness on safe nuclear
operations; (2) electrical grid reliability; (3) the availability of
funds for decommissioning; and (4) license transfers and timeliness of
NRC reviews. Several specific actions have been taken in this area. The
NRC believes that its regulatory framework is generally sufficient, at
this time, to address the restructuring and reorganization that likely
will arise as a result of electric utility deregulation.
Cost-Competitiveness and Safe Nuclear Operations.--The NRC
continues to study possible impacts of cost-competitiveness pressures
on safe nuclear operations. NRC safety assessments at some reactor
facilities have identified deficiencies that may stem from the economic
pressure on a licensee to be a low-cost energy producer, which in turn
may limit the resources available for corrective actions and plant
maintenance. The NRC is developing measures that could help to identify
plants where economic stress may be adversely impacting safety.
However, the NRC has not found an overall correlation between cost
cutting and a decline in safety performance; rather, in general, the
best managed and most cost efficient facilities are those with the best
economic and safety performance.
In addition to the potential impact on safe operations, cost-
competitiveness could become a factor in nuclear plant license renewal.
The impacts here can be complex. In an effort to make nuclear
facilities competitive in a deregulated market, in some instances State
PUCs have taken steps toward offering limited-time opportunities that
would allow utilities to recoup sunk investments in generation. For
licensees with a longer-term focus, the financial benefits of license
renewal may make the option of continued operation attractive.
Electrical Grid Reliability.--Another important area of NRC focus
has been electrical grid reliability. In recent years, NRC
probabilistic risk assessments have made it clear that a ``Station
Blackout'' at a nuclear power station is a major contributor to core
damage frequency. The term ``Station Blackout'' is used, in the nuclear
power industry, to refer to an event in which a loss of offsite power
is coupled with the inability of the onsite emergency diesel generators
to provide vital power to plant safety equipment. While the estimated
frequency of these events is very low, because of the potential
consequences, the possibility of a Station Blackout continues to be an
area of NRC focus. The analysis of power reactor experience in this
area shows that nuclear generating stations are robust in design and
operational standards, allowing them to help stabilize the electrical
grid. However, analysis also makes clear that nuclear generating
stations are vulnerable to grid disturbances, and especially to loss-
of-offsite-power events. Grid reliability governance must take account
of these factors. Standards of performance, operational criteria, and
training of personnel are oversight issues that all must be addressed
as deregulation goes forward. The NRC has established a grid
reliability action plan to address concerns regarding the impact of
utility deregulation on the reliability of the grid in supplying
offsite power to nuclear power plants.
To address related issues, the DOE has created a working advisory
committee on the reliability of the U.S. electric system. In July 1997,
this committee issued a report to the Secretary of Energy recommending
that Federal legislation be considered to clarify the authority and
responsibility for setting reliability standards, and that the FERC
should review the policy, standards, and governance organization of
reliability entities. The committee also has issued two draft reports,
one relating to technical transmission issues, and the other addressing
the roles and responsibilities of independent system operators. The NRC
has been coordinating with the DOE, and will continue to monitor
closely the impact of electric utility restructuring on grid
reliability. In February 1998, the NRC issued an Information Notice
entitled, ``Offsite Power Reliability Challenges from Industry
Deregulation.''
The NRC also has issued a draft report on the evaluation of loss-
of-offsite-power events at nuclear power plants for external peer
review. This information in this report will be used to evaluate
Station Blackout assumptions as they relate to grid reliability. This
evaluation is scheduled for completion in fiscal year 1999.
Decommissioning Funding AssuranceExisting NRC decommissioning
regulations require power reactor licensees either to set aside funds
periodically in external trust fund accounts or to provide third-party
guarantees for estimated decommissioning costs. As such, by the time a
licensee permanently ceases operations at the end of its licensed term,
the total amount of funds estimated as needed to complete
decommissioning is expected to be available. In the emerging
environment of electric utility restructuring, the NRC has had to
reevaluate certain aspects of these provisions for decommissioning
funding assurance, including the NRC definition of ``electric
utility,'' the potential impact of new ownership arrangements, and the
problem of above-market or ``stranded'' costs. Several specific actions
have resulted.
On August 19, 1997, the Commission issued a final policy statement
on electric utility restructuring and deregulation. The policy
statement indicates that the NRC will continue to conduct its financial
qualifications, decommissioning funding, and antitrust reviews; will
identify all direct and indirect owners of nuclear power plants; will
establish and maintain working relationships with rate regulators
(including the FERC and the State PUCs); and will reevaluate the
adequacy of its regulations in this area.
On September 10, 1997, the NRC issued for public comment a Proposed
Rule on decommissioning funding. The NRC staff has developed a final
rule that currently is being considered by the Commission. We expect to
issue the final rule shortly. As currently written, the rule would
modify NRC decommissioning regulations in four areas. First, it would
revise NRC regulations to ensure that decommissioning funding assurance
requirements are clarified for all responsible licensee entities, not
merely for ``electric utilities.'' Second, it would allow credit on the
earnings from decommissioning trust funds. Third, to keep the NRC
informed of licensee decommissioning fund status, it would require
periodic licensee reports on the status of such funds and any changes
to licensee external trust agreements. Finally, to ensure adequate
licensee accumulation of decommissioning funds, the NRC would take
additional action as needed on a case-by-case basis, either
independently or in cooperation with the FERC and the State PUCs,
including the modification of a licensee schedule for accumulation of
decommissioning funds.
The NRC also has taken other actions in this area. NRC staff
guidance has been developed for reviews of licensee financial
qualifications and decommissioning plans, as well as in the area of
antitrust reviews. Numerous meetings have been held with industry
representatives, State and Federal rate regulators, the financial
community, and other stakeholders. Staff-level liaisons have been
established where appropriate. The overall effect of these measures has
been to improve NRC, licensee, and public awareness on issues related
to electric utility restructuring.
License Transfers and Timeliness of NRC reviews.--The NRC
regulation covering power reactor license transfers, 10 CFR 50.80,
prohibits the transfer or assignment of a power reactor license, in any
manner, without written Commission consent. The NRC evaluates such
transfers to determine whether the proposed transferee is technically
and financially qualified to conduct the activities covered by the
license. The NRC examination of the financial qualifications of the
proposed transferee includes three factors: (1) financial
qualifications for operations; (2) decommissioning funding assurance;
and (3) antitrust considerations. The NRC also must determine whether
the transfer would lead to foreign ownership, domination, or control of
the facility.
In the past several years, the NRC has seen an increase in transfer
applications, primarily as a result of corporate restructuring actions
in anticipation of economic deregulation. The restructuring actions
that the NRC has evaluated include: (1) mergers, either between
electric utilities or between an electric utility and a company outside
the power generation industry; (2) formations of holding companies; (3)
sales of ownership shares of nuclear plants; and (4) formations of
operating subsidiaries to run nuclear plants for an owner or owners.
With the recent announcement of the sale of Three Mile Island, Unit 1,
by GPU Nuclear, Inc. to Amergen, Inc. (a jointly-owned subsidiary of
PECO Energy Company and British Energy, Inc.), the NRC likely will be
asked to approve the sale of an entire nuclear plant for the first
time. The NRC also expects to receive future requests for other types
of direct or indirect transfers (e.g., joint ventures).
Because of the variety of current and potential transfer requests,
the NRC has evaluated each request based on its particular factual
situation. However, the NRC has issued guidance on several aspects of
its transfer reviews in the final Standard Review Plan on Antitrust
Reviews and the draft Standard Review Plan on Power Reactor Licensee
Financial Qualifications and Decommissioning Funding Assurance, which
we expect to issue as a final report later this year. The NRC also has
developed draft criteria for evaluating license transfers to non-owner
operators of nuclear power plants. In addition, the NRC staff has met
and remains willing to meet with representatives of licensees and/or
intended transferees to discuss requirements of the transfer process.
Notwithstanding our current case-by-case approach, virtually all
transfer requests have been completed in a timely fashion. We are not
aware of any recent transfer requests in which we have caused any delay
of completing the transaction. A ``typical'' transfer usually can be
approved within three to 6 months of receiving the transfer
application. NRC approval consists of an order issued by the Director,
Office of Nuclear Reactor Regulation, followed by a ministerial license
amendment (to add or change names of licensees) if changes to the
license are needed. If a conforming amendment to the license is
required to reflect administrative changes to the license, such an
amendment does not involve a significant hazard consideration. For some
facilities, the staff may conduct a significant changes review, in
consultation with the Department of Justice, regarding the antitrust
implications of the transfer. No hearing on the antitrust aspects of
the transfer would be held except in situations in which the NRC finds
significant changes. However, 53 of the nuclear reactor units currently
licensed to operate have been ``grandfathered'' and, consequently, are
not subject to any NRC antitrust review. The NRC has not had antitrust
or other hearings for any of the 45 to 50 transfer applications we have
approved in the last 5 years. In view of the fact that NRC antitrust
responsibilities tend to duplicate antitrust review responsibilities of
other Federal agencies (e.g., the FERC and the Department of Justice),
the NRC supports legislation introduced by the Administration to
eliminate future NRC antitrust reviews.
B. NRC Certification of Advanced Reactor Designs
In the past 2 years, the NRC has reached significant milestones in
the certification of advanced reactor designs, and in the
implementation of the associated combined licensing process. As far
back as the late 1970's and early 1980's, the experience gained in
licensing existing U.S. nuclear power plants indicated that the
licensing process for new nuclear power plants could be improved in
ways that would enhance safety, improve stability, and reduce industry
and agency uncertainty by achieving earlier resolution of technical and
policy issues. Taking advantage of this insight, however, proved to be
an arduous effort that included legislative reform, a Commission Policy
Statement on Standardization, extensive litigation, and rulemaking. The
overall result has been 10 CFR Part 52, a reformed licensing process
that provides for combined licenses, early site permits, and certified
standard designs.
In May 1997, the NRC certificated the General Electric Advanced
Boiling Water Reactor (GE ABWR) design and the ABB Combustion
Engineering System 80+ design. This certification marked the final step
in the design certification process, an effort that encompassed both
the development and promulgation of Part 52, and that involved the most
rigorous technical and safety reviews ever performed for a nuclear
plant design. The goals of this process included design
standardization, enhanced safety and reliability features, and a more
predictable and stable licensing process. Both the ABWR, a 1,350-
megawatt boiling water reactor, and the System 80+, a 1,400-megawatt
pressurized water reactor, incorporate features that would mitigate the
effects of severe accidents.
In addition to these two designs, the NRC is continuing the review
process for a third advanced reactor design, the Westinghouse AP600--a
600-megawatt pressurized water reactor that uses passive safety
features, employing gravity, natural circulation, convection,
evaporation, and condensation for plant protection. The NRC independent
AP600 research program played a key role in identifying significant
design issues which, if not corrected in time by Westinghouse, would
have resulted in significant schedule delays. The NRC research program
also helped to resolve issues that were not covered by the vendor test
program, and contributed significantly to the overall understanding of
the AP600 design.
The NRC staff has continued to devote a significant level of
attention and resources toward completing the AP600 review by bringing
to closure the remaining technical issues. The NRC staff issued an
advanced copy of the AP600 Final Safety Evaluation Report (SER) in May
1998. The Advisory Committee on Reactor Safeguards (ACRS) also made a
concerted effort to expedite its review process, which resulted in
issuing the ACRS design approval letter earlier this month. The NRC
staff expects to be able to release the final AP600 SER next month,
with the Final Design Approval to follow in September.
Even given the advantages of these advanced designs, the Commission
recognizes that the timing and likelihood of renewed demand for nuclear
construction in the U.S. remains unclear. The design certification
process, however, has been effective in providing enhancements to
safety in design, drawing from experience in a manner that will
increase the predictability of the licensing process, and that will
ensure NRC readiness for future licensing actions.
C. Status of the Materials Program
Materials Program Initiatives.--The NRC continues to oversee the
safe use of radioactive materials by approximately 5,900 specific
medical, academic, industrial, and commercial licensees, and an
additional 45,000 general licensees. Key areas of improvement include:
(1) the implementation of an action plan for improving licensee
accountability of licensed materials; (2) the consolidation of NRC
guidance for materials licensees; (3) the revision of Part 35,
``Medical Use of Byproduct Material''; and (4) the revision of Part 70,
``Domestic Licensing of Special Nuclear Material.'' The NRC also is
continuing to improve its effectiveness in relationships with other
regulatory entities, such as Agreement States.
The Commission recently approved an action plan to address licensee
accountability for certain kinds of licensed materials encompassing
approximately 24,000 devices. The action plan was developed in response
to recommendations provided by an Agreement State-NRC working group
that evaluated current licensee accountability of devices. A
registration program would require certain general licensees to
register their devices with the NRC annually. This program will ensure
that licensees still can maintain accountability of their devices, and
will allow the NRC to maintain a database of devices possessed by the
licensees.
The NRC is continuing to streamline the process for handling
materials license and amendment requests. The NRC staff is midway
through the process of updating and consolidating hundreds of guidance
documents into approximately 20-30 comprehensive topical reports for
use by materials users. These reports will contain licensing checklists
and audit guidelines to assist licensees in developing their programs.
As a result of these efforts, we expect increased clarity on and
understanding of NRC requirements, more completeness in license
applications and license amendments, and more timely processing and
review of licensee submittals.
The Commission has completed a multi-phase review of its medical
use program, which included an independent study conducted by the
National Research Council for the National Academy of Sciences'
Institute of Medicine. As a result of this detailed review, the
Commission directed the NRC staff to develop recommendations for
revising the 1979 Commission Medical Policy Statement and 10 CFR Part
35, ``Medical Uses of Byproduct Material.'' The revision of Part 35
would achieve several specific improvements, which would include
focusing the regulations on medical procedures that pose the highest
radiation safety risk, with a subsequent decrease in the oversight and
regulatory burden for low-risk activities. The Commission recently
approved a proposed rule for publication and solicitation of public
comment. This rulemaking has a targeted completion date of June 1999.
The Commission used a process that encouraged and facilitated early
State and stakeholder involvement in the development of proposed
revisions to Part 35.
The Commission also is pursuing a risk-informed and performance-
based approach for regulating fuel cycle facilities. In this context,
the NRC currently is revising 10 CFR Part 70, ``Domestic Licensing of
Special Nuclear Material,'' to increase NRC confidence in the margin of
safety at major fuel cycle facilities. Based on current intentions,
this revision: (1) would identify appropriate consequence criteria and
the level of protection needed to prevent or mitigate accidents that
exceed these criteria; (2) would require affected licensees to perform
an integrated safety analysis (ISA) to identify potential accidents at
the facility and the items relied on for safety; and (3) would require
the implementation of measures to ensure that the items relied on for
safety are continuously available and reliable.
In the area of Agreement States, the NRC recognizes its shared
responsibility to ensure that the regulatory programs of the NRC and
Agreement States collectively establish a coherent nationwide effort in
the safe use of nuclear materials. The 30 existing Agreement States
regulate approximately 16,000 specific and 90,000 general licensees.
The 1997 signing of an agreement between NRC and the Commonwealth of
Massachusetts transferred about 425 materials licensees to
Massachusetts regulatory oversight. In addition, Ohio (with about 600
materials licenses) is scheduled to become an Agreement State in fiscal
year 1999, and Pennsylvania (with about 800 materials licenses) and
Oklahoma (with about 225 materials licenses) currently are scheduled to
become Agreement States in fiscal year 2000.
Oversight of the U.S. Enrichment Corporation (USEC).--The NRC
issued initial certificates of compliance for both USEC gaseous
diffusion plants in November 1996, and assumed regulatory jurisdiction
in March 1997. In January 1998, the NRC issued its first annual report
to Congress on the gaseous diffusion plants, including an assessment of
facility compliance with regulatory requirements. The NRC will conduct
the first recertification in fiscal year 1999, in accordance with the
USEC Privatization Act, which requires that the NRC recertify the
plants at least once every 5 years.
In addition, the NRC has developed a standard review plan, in
coordination with other agencies, for NRC activities specifically
related to USEC privatization. The NRC staff has used this standard
review plan to address NRC review activities required to support USEC
privatization. In accordance with the USEC Privatization Act, USEC has
begun the privatization process, and expects to become a private entity
early in the second half of this year through an initial offering of
stock to the public. The NRC will continue to report annually to the
Congress on the status of the USEC plants and their compliance with NRC
standards, and will continue to undertake an active, comprehensive
inspection program to verify operational safety and review of plant
incidents and events. This inspection program will continue to include
NRC resident inspectors at each plant.
The NRC also is preparing to review an application from USEC for
commercial deployment of the Atomic Vapor Laser Isotope Separation
(AVLIS) technology, and is engaging in pre-licensing discussions and
reviews in support of the USEC application. The USEC has advised the
NRC that it plans to submit an AVLIS application in February 1999.
D. High-Level Waste
In the critical area of managing high-level waste, NRC continues to
believe that a permanent geologic repository is the appropriate
mechanism for the nation to manage, safely and ultimately, spent fuel
and other high-level nuclear waste. The Congress has assigned to the
NRC significant responsibilities as a part of the national repository
program. In accordance with statutory direction in the Nuclear Waste
Policy Act of 1982, as amended, and the Energy Policy Act of 1992, the
NRC must consult extensively with the DOE before licensing a
repository. The 1987 revisions to the Nuclear Waste Policy Act focused
DOE high-level waste repository efforts exclusively on the site at
Yucca Mountain, Nevada. The NRC has several objectives in this pre-
licensing consultation phase: (1) to develop a regulatory framework
(regulations and guidance); (2) to ensure that the DOE is aware of the
elements comprising a quality license application; (3) to evaluate the
adequacy of the site characterization and waste form in the DOE site
suitability recommendation to the President; and, (4) ultimately, to
determine whether the NRC, through its licensing and oversight
processes, can authorize repository construction, receipt of waste,
repository operations, and final repository closure and
decommissioning.
In order to enhance the effectiveness of the NRC program and in
response to budget constraints, the NRC in fiscal year 1996 refocused
its high-level waste program on resolution of the ten key technical
issues most important to repository safety and, consequently, most
important to licensing. These issues cover areas such as groundwater
flow, thermal effects, potential disruptive events, container releases,
and total system performance. The NRC has continued to make progress
toward resolution of these issues, including the documentation of
corresponding acceptance criteria and early feedback to the DOE for
preparation of its Viability Assessment throughout fiscal year 1996-
1998. In restructuring its pre-licensing regulatory program, the
Commission has applied a risk-informed and performance-based approach
to the performance of a geologic repository system--a system with
unique physical characteristics, failure mechanisms, and lifetime.
Application of this philosophy has resulted in the development of an
integrated regulatory approach under which the key issues important to
repository performance and safety will guide the revision of NRC
regulations, the development of a Yucca Mountain review plan and
independent analytical techniques, and the resolution of issues.
One key technical issue for NRC is the development of a site-
specific, performance-based regulation applicable to the proposed
repository at Yucca Mountain. Proposed and final regulations are
planned for fiscal year 1999 to provide a regulatory framework for the
DOE submittal of a license application in 2002. These criteria are
being developed to implement health-based standards for Yucca Mountain
that are consistent with the recommendations of the National Academy of
Science (NAS) in their 1995 technical report on Yucca Mountain, in
accordance with the Energy Policy Act of 1992.
NRC Assessment of DOE Progress and Potential for Licensing
Success.--During fiscal year 1999, the NRC will review the DOE
Viability Assessment to identify potential licensing vulnerabilities
and any major concerns with DOE test plans, design concepts, and Total
System Performance Assessment that, if unresolved, could result in an
incomplete or unacceptable license application. While the NRC review of
the DOE Viability Assessment is not required explicitly under statute,
the NRC expects to be asked to provide its independent licensing view
as important input to the decisions that the President and the Congress
will make concerning the future of the repository program at the Yucca
Mountain site. Moreover, the NRC believes that its views, supported by
independent NRC analyses, will contribute to public confidence in the
credibility of the decision-making process.
The NRC is encouraged that the DOE now is conducting a performance-
based program to focus on those issues most important to repository
safety. In addition, the DOE recently issued its Repository Safety
Strategy (previously called the Waste Isolation and Containment
Strategy). This strategy provides the DOE explanation of the role that
natural and engineered barriers are expected to play in the containment
of radionuclides within the waste package, and in ensuring that the
annual dose to persons living near the site is acceptable. The NRC
believes that the DOE has made significant progress in its site
characterization program for the candidate repository at Yucca
Mountain, including the completion of the Exploratory Studies Facility,
the recent initiation of the East-West Drift for the enhanced
characterization of the repository block, and the surface-based and
subsurface testing.
On the basis of what is known today, the NRC is confident that it
will be able to determine, with reasonable assurance, whether spent
fuel and other high-level waste can be disposed of safely in a geologic
repository at Yucca Mountain, provided that: (1) the NRC receives a
high-quality license application from the DOE; (2) NRC requirements are
met; (3) the NRC is permitted to maintain its technical capability for
licensing a geologic repository in the face of budget constraints, and
(4) timely, reasonable, and implementable standards are developed for
the repository. Ensuring that the NRC is prepared to review a DOE
license application for a geologic repository in a timely manner is a
Commission priority. To this end, a credible, technically competent,
and adequately funded pre-licensing regulatory program is essential.
Potential Issues.--The Commission is continuing to work with the
DOE, the Office of Management and Budget (OMB), the Office of Science
and Technology Policy (OSTP), and the Environmental Protection Agency
(EPA), to ensure that the EPA high-level radioactive waste standard,
when issued, is both appropriate and implementable. However, many
issues related to the EPA high-level waste standard are similar to
those related to the NRC cleanup rule for sites undergoing
decommissioning. As a result, the NRC recently wrote to the Senate
Committee on Environment and Public Works, suggesting that a
legislative solution may be necessary.
The Commission also is aware that the Congress is contemplating new
legislation that would alter the national high-level waste program. The
Commission agrees with the basic approach taken in both the House and
Senate bills, including the use of an all-pathways radiation standard,
and believes that both contain the fundamental elements of an
integrated waste management system needed for the protection of public
health and safety. That being said, however, the Commission recommends
that the Congress take particular care that the overall schedule for
DOE acceptance of waste for storage at a licensed interim storage
facility and its obligation to submit a license application for a
permanent repository do not set these two important programs on a
collision course with respect to their needs for limited resources.
Centralized interim storage and permanent geologic disposal are key
elements of the integrated waste management systems laid out in both
bills. The development and licensing of each should be afforded
sufficient time and adequate funding.
Status of Spent Fuel Storage.--Currently, it is primarily the
responsibility of licensed utilities to manage the spent fuel from
commercial nuclear power reactors. The NRC reviews the designs for and
operation of facilities for the storage of spent fuel in fuel pools and
independent spent fuel storage installations, primarily located at
reactor sites. The NRC has certified 13 cask designs for spent fuel
storage under the use of either a general license or as part of a site-
specific license--and has certified two cask designs to be fabricated
for the transport of spent fuel. In fiscal year 1999, the NRC
anticipates reviewing approximately 50 applications for commercial
spent fuel transport designs, Department of Transportation and DOE
spent fuel transport designs, commercial spent fuel storage designs,
and interim storage of spent fuel, including ten independent spent fuel
storage installations (ISFSIs), one of which would be a privately
owned, away-from-reactor interim spent fuel storage facility.
Associated review and inspection activities will ensure that safety and
regulatory compliance are achieved and maintained for these designs and
installations. Additionally, the NRC will continue its review of a
spent fuel dry transfer system, which would allow cask-to-cask
transfers and would, among other features, obviate the need for using a
spent fuel pool in conducting a transfer, which would facilitate timely
and safe decommissioning of shutdown commercial power reactors.
E. Decommissioning and Decontamination; Clean-Up
Decommissioning involves removing radioactive contamination in
buildings, equipment, groundwater, and soils to such levels that a
facility can be released for either unrestricted or restricted use. In
addition to the cleanup of hundreds of facilities each year, the NRC is
continuing to encourage timely cleanup of approximately 40 more complex
material and fuel cycle facility sites through the implementation of
its Site Decommissioning Management Plan. Five sites were successfully
decommissioned and removed from the Site Decommissioning Management
Plan list in fiscal year 1997. The NRC expects three more sites to be
removed each year in fiscal year 1998 and fiscal year 1999. In
addition, decommissioning was completed and the operating license
terminated for the Fort St. Vrain Nuclear Generating Station, Unit 1,
owned by the Public Service Company of Colorado. Except for the
independent spent fuel storage installation, the site was released for
unrestricted use.
After an extensive rulemaking process that involved several years
of enhanced stakeholder interaction through workshops and public
meetings, the Commission in July 1997 issued a final rule to establish
radiological criteria for decommissioning and license termination. The
NRC rule contains an all-pathways radiation standard that is consistent
with recommendations of national and international scientific
organizations. The NRC use of an all-pathways standard is also
consistent with the all-pathways approach reflected in the high-level
waste bills currently under Congressional consideration. During earlier
discussions, the staff of the U.S. Environmental Protection Agency
(EPA) had expressed concern with certain provisions of the rule,
including the lack of a separate groundwater standard. As a result, the
NRC and the EPA held a public meeting in April 1997, after which the
NRC revised its proposed final rule on two issues in response to EPA
concerns. However, it should be noted that the NRC fundamentally
disagrees with the need for a separate groundwater standard. Before
finalization of the rule, I met with the EPA Deputy Administrator, on
behalf of the Commission, to review the rule and to discuss how the
views and concerns that the EPA had expressed might be accommodated in
individual license termination requests from licensees. In addition, we
discussed the possibility of developing some type of binding agreement
on the finality of NRC license termination decisions.
In August 1997, I sent to Administrator Browner a draft Memorandum
of Understanding (MOU) entitled ``Consultation and Finality on
Decommissioning and Decontamination of Contaminated Sites.'' This draft
MOU identifies the responsibilities of each agency for the
decommissioning and decontamination of contaminated sites, and
specifies the ways in which these responsibilities would be carried out
to achieve finality in license termination decisions. Later in August,
we received a copy of EPA guidance entitled ``Establishment of Cleanup
Levels for CERCLA Sites with Radioactive Contamination.'' This document
provides clarifying EPA guidance for establishing protective cleanup
levels for radioactive contamination at sites that come under the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA). We were disappointed to see in this guidance the EPA
assertion that the dose limits in the NRC final rule generally will not
provide a protective basis for establishing preliminary remediation
goals for cleanup at CERCLA sites, and that the NRC sites would require
further remediation. A principal NRC concern with this guidance and the
EPA position is the question of finality for sites that have complied
with the NRC or equivalent Agreement State cleanup standards and have
had their licenses terminated. To address this concern, the Commission
proposed legislation that would amend CERCLA to recognize NRC cleanup
standards as sufficiently protective, and that would provide finality
to sites that have complied with the NRC or equivalent Agreement State
cleanup standards.
In December 1997, I sent a letter to Administrator Browner
detailing NRC concerns and comments on the EPA CERCLA guidance. The EPA
responded to the NRC-proposed MOU on February 19, 1998, and to NRC
comments on the CERCLA guidance on February 20. In reviewing these
responses, the Commission found that the EPA was continuing to oppose
finality for sites that comply with NRC cleanup standards. Therefore,
in April 1998, I again wrote to Administrator Browner, stating that
there appear to be fundamental differences between the NRC and the EPA
on the basis for protecting public health and safety and the
environment, and that the Commission continues to believe, consistent
with standards of the international community, that the regulatory
approach used by the NRC will be sufficient to ensure adequate
protection of public health and safety and the environment in this
area. I also stated that the Commission recognizes that the resolution
of the differences between our agencies is a matter of policy that can
best be solved by Congressional action. Subsequently, Administrator
Browner categorically rejected the NRC legislative approach, and
informed me that if an agreement satisfactory to both agencies cannot
be developed, the EPA may decide to apply its standards unilaterally
and require remediation under CERCLA for NRC sites after they have been
decommissioned.
In summary, the NRC supports legislation that would establish
finality for sites that comply with NRC cleanup standards. Dual
regulation is wasteful of both government resources and the resources
of American citizens to whom the regulations apply. Therefore, the
Commission supports language comparable to that found in section 810 of
H.R. 3000. This provision would effectively prevent later imposition of
additional remediation standards or requirements at decommissioned
sites that have met the NRC cleanup standards.
F. Work with the U.S. Department of Energy (DOE)
Several areas of change for the NRC involve work with the
Department of Energy (DOE). We are positioning the NRC to become,
potentially, the external regulator of DOE nuclear activities, and to
license DOE privatized facilities. On the basis of a DOE/NRC memorandum
of understanding (MOU), a pilot program for the regulation of DOE
nuclear facilities has begun. In addition, as part of plans to
stabilize the Hanford tank waste through a remediation project, the DOE
is proposing to privatize the operation, and to have the NRC license
the private enterprise. The NRC has been providing technical assistance
and support for this project, including reviews of contractor proposals
and the development of a regulatory program, to ensure a smooth
transition later in the project for NRC regulatory oversight. We also
have approved a license amendment authorizing the irradiation of
tritium-producing lead test assemblies at Watts Bar Unit 1, and we will
continue to work with the DOE on the use of a commercial light-water
reactor for tritium production, if the Congress and the Administration
support this approach. Finally, we have begun discussions with the DOE
regarding NRC involvement in either of two DOE strategies for disposal
of excess weapons-grade plutonium: (1) immobilizing surplus plutonium
with high-level waste in ceramic material for geologic disposal, and
(2) burning surplus plutonium as a component of mixed-oxide fuel in
existing commercial reactors.
External Regulation of DOE.--In December 1996, following a report
by a DOE Advisory Committee on External Regulation and further study by
a DOE working group, the Secretary of Energy announced that the
Administration would take certain measures toward giving the NRC the
responsibility for the regulation of nuclear safety at nearly all DOE
nuclear facilities, phased in over a 10-year period. The Advisory
Committee and the working group had concluded that external regulation
of DOE nuclear safety would increase the assurance of safety, give the
public and workers more confidence in the safety of DOE operations,
make safety regulation of DOE nuclear facilities more stable, require
operations managers to be more accountable for nuclear safety, and
minimize redundancy in the safety regulation of DOE nuclear facilities.
The NRC evaluation of this concept was part of the NRC Strategic
Assessment and Rebaselining initiative. In the course of that
evaluation, public comments overwhelmingly favored NRC regulation of
DOE nuclear facilities. These two factors--the DOE decision and the
public commentary--weighed heavily in the Commission decision to
endorse NRC oversight of DOE facilities. In June 1997, the DOE and the
NRC agreed to pursue NRC regulation of DOE nuclear facilities on a
pilot program basis.
The pilot program is to determine the feasibility of NRC regulatory
oversight of DOE nuclear facilities, and to support a decision on
whether to seek legislation to authorize NRC regulation of DOE nuclear
facilities. On November 21, 1997, DOE Secretary Pena and I (on behalf
of the Commission) signed a Memorandum of Understanding (MOU) between
the NRC and the DOE that details the specific conditions and activities
associated with the pilot program. The MOU objectives include: (1)
determining the value added by NRC regulatory oversight; (2) testing
various regulatory approaches (for example, licensing and
certification); (3) determining the status of DOE pilot facilities with
respect to meeting existing NRC requirements, or acceptable
alternatives, and identifying any significant safety issues; (4)
determining the costs (to both agencies) of NRC regulation; (5)
evaluating alternative regulatory relationships, and determining DOE
contract changes that might be necessary to provide for NRC oversight;
(6) identifying transition issues and solutions; (7) identifying
legislative and regulatory changes needed; and (8) evaluating
appropriate processes for stakeholder involvement should the NRC assume
broad external regulatory authority over DOE nuclear facilities.
The pilot program began in the Fall of 1997 at Lawrence Berkeley
National Laboratory (LBNL). On-site work for the Lawrence Berkeley
National Laboratory pilot was completed on January 15, 1998. No
significant safety issues were identified at LBNL. After completing the
Berkeley site report, the Commission has requested that the NRC staff
prepare a revised MOU, in consultation with the DOE, that would
incorporate lessons learned during the process and, if agreed, allow
the agencies to recommend jointly that the Administration seek
legislation promptly for NRC regulatory authority for a specific pilot
facility or class of facilities, on the basis of information gained
during a specific pilot.
The field work on the second pilot site, the Radiochemical
Engineering Development Center (REDC) at Oak Ridge National Laboratory,
was completed in June 1998. The tentative conclusions of the work to
date are that REDC as well as LBNL are licensable without significant
changes to the facilities or their radiation safety programs. However,
several major policy issues have resurfaced recently that could delay
completing both reports. These issues are: (1) Who should be the
licensee (i.e., the DOE or the contractor)? (2) What, if anything,
should be done about legacy materials and buildings? and (3) Should the
NRC seek jurisdiction over DOE accelerators and over DOE naturally-
occurring and accelerator-produced radioactive materials? The NRC and
the DOE are working together to resolve their differences on these
policy issues.
The third pilot for fiscal year 1998 is underway at the Savannah
River Site Receiving Basin for Offsite Fuels, and is scheduled for
completion in late 1998. During fiscal year 1999, the NRC intends to
continue the pilot program, starting with the Pacific Northwest
National Laboratory and adding facilities of greater complexity that
would provide expanded information on the major objectives previously
outlined. In addition, the NRC staff has begun work on draft
legislation that would support NRC oversight of specific facilities.
Current DOE Privatization Activities.--The NRC also is
participating in the DOE Hanford tank waste remediation system project,
a major privatization initiative, located on the Hanford Reservation in
Richland, Washington. An NRC/DOE MOU was executed on January 29, 1997,
specifically for the demonstration phase (Phase I) of this project.
This MOU calls for the NRC to provide technical assistance and support
to the DOE in the development of a comprehensive regulatory program,
consistent with the NRC regulatory approach, for processing all Hanford
tank wastes into forms suitable for final disposal, while protecting
the general public, workers, and the environment. The Congress
continued to appropriate funding for NRC participation in this project
for fiscal year 1998. To support this phase, the NRC has established a
permanent on-site representative on the Hanford site, and continues to
assist in the review of initial DOE privatization contractor
submittals, as well as in the DOE development of guidance documents for
the privatization contractors. Throughout Phase I of this program, the
DOE is responsible for regulating the activities of the privatization
contractors. However, the ultimate goal of NRC participation is to
provide a smooth transition into the DOE-proposed NRC licensing of the
privatized contractor. Legislation may be necessary to clarify NRC
authority to regulate these activities.
Tritium Production.--The evaluation of options for tritium
production is another DOE activity that the NRC is supporting. The
United States stopped producing tritium in 1988, when the last nuclear
weapons production reactor at the DOE Savannah River site was shut
down. The most recent projection calls for resumption of tritium
production by the end of 2005. To meet this need, the DOE has chosen a
dual-path strategy involving the evaluation of the two most promising
tritium supply alternatives: (1) to produce tritium in commercial
light-water reactors, either through acquisition of reactors under
government ownership, or by contracting for target irradiation services
under private ownership; and (2) to design, build, and test critical
components of an accelerator system for tritium production. It is our
understanding that the DOE plans to select one of these approaches by
the end of 1998 to serve as the primary source of tritium. The other
alternative, if feasible, will continue to be developed as a backup
tritium source.11The commercial reactor option has been split into two
phases. The first phase, a demonstration phase currently under way at
the Tennessee Valley Authority's Watts Bar Unit 1 nuclear plant,
involves the irradiation of 32 tritium-producing burnable absorber rods
(referred to as a ``lead test assembly''). These rods were placed in
the Watts Bar reactor core during the first refueling outage (in the
Fall of 1997), following issuance of a license amendment by the NRC.
The rods are scheduled to be removed from the core during the Spring
1999 outage and shipped to a DOE facility for post-irradiation
examination. We understand that this tritium will not be used for
defense purposes. Consistent with Administration and Congressional
decisions and guidance, the second phase of the commercial reactor
option is the irradiation of up to about 3300 rods in a tritium
production core. The DOE expects to submit its tritium production core
topical report for NRC review later this summer. Assuming any necessary
legislative and programmatic approvals are in place, and the DOE
proceeds with its program, a plant-specific application for an
amendment to the facility operating license is expected in 1999 or
2000. Under such a scenario, licensees undertaking tritium production
core irradiation would need NRC authorization in 2002 or 2003 in order
to meet the DOE requirement for extraction of tritium gas by the end of
2005.
Disposition of Surplus Weapons-Grade Plutonium.--Under a
reimbursable agreement signed by the NRC and the DOE in September 1995,
the NRC agreed to provide assistance to the DOE Office of Fissile
Materials Disposition in the review of potential disposition
alternatives for plutonium declared excess to the needs of the U.S.
nuclear weapons program. In January 1997, the DOE issued its Record of
Decision that reflected a dual strategy for plutonium disposition: (1)
immobilization of some of the surplus plutonium in ceramic material,
after mixing with high-level waste, for disposal in a geologic
repository; and (2) burning of some plutonium as a component of mixed-
oxide (MOX) fuel in existing commercial reactors. With respect to the
MOX fuel strategy, the DOE indicated that it anticipates that the MOX
fuel fabrication facility would be licensed by the NRC at a DOE-owned
facility, and that the MOX fuel would be irradiated in a commercial
power reactor. The DOE has announced that its Savannah River site would
be the location of the MOX fuel fabrication facility. The referenced
reimbursable agreement was modified to cover the NRC costs of NRC
assistance in preparing for eventual licensing activities.
We also are reviewing a number of issues that may require
legislation, related to the roles of the NRC and the DOE in the MOX
fuel program. Some of these issues include: (1) whether such a facility
should be regulated by a licensing or a certificate-of-compliance
approach; (2) whether the DOE or a contractor (or both) would be the
regulated entity; (3) the role of other Federal agencies; (4) the role
of the Defense Nuclear Facilities Safety Board; (5) who should be
responsible for certain activities related to the MOX fuel facility,
such as physical protection, MOX fuel transportation safety, low-level
radioactive waste disposal, liability coverage, and facility
decommissioning; and (6) whether the MOX fuel program and facility
would or would not be considered a ``defense activity or facility''
under 42 U.S.C. 7272.
G. Significant Research Activities
To make timely and technically credible regulatory judgements and
to anticipate problems of potential safety significance, the NRC must
have independent technical expertise and information. Key to providing
this capability is the NRC research program. This program is both
confirmatory and anticipatory, and resolves uncertainties associated
with the most safety significant regulatory issues. The NRC conducts
reactor and plant performance research to provide in-depth examination
and understanding in support of other regulatory functions. For
example, the recent rebaselining of the reactor source term, under the
NRC research program, will facilitate the approval of utility requests
for changes to some operational limits. Current areas of significant
research emphasis include high burnup fuel behavior, reactor pressure
vessel integrity, steam generator research, environmentally assisted
cracking, radionuclide transport, thermal-hydraulic research, severe
accident research, probabilistic risk assessment, and environmental
qualification of electrical cables.
The NRC routinely seeks opportunities in its relationships with
outside organizations, both domestic and foreign, to enter into
cooperative research agreements through which it can leverage available
research resources. These organizations include other Federal agencies,
the Electric Power Research Institute (which conducts research for the
U.S. industry), and members of the international regulatory community
engaged in nuclear safety research. These agreements result in both the
sharing of information and the sharing of research costs, the effect of
which is to maximize the use of our research resources, and at the same
time to enhance our own research capabilities.
By maintaining a viable research program, the NRC has access to
research through approximately 35 active cooperative agreements, as
well as through another 45 agreements that are being extended or
considered with organizations in more than 25 countries, including
countries from the former Soviet Union. Through these agreements, the
NRC contributes about $8 million annually, but receives the benefits of
research valued at approximately $85 million annually. In addition, the
NRC receives about $1.3 million each year in support of its various
research programs.
A good example of NRC cooperative efforts and leveraging of
research resources is the joint U.S.-Russian research program on
radiation health effects, which is being performed under the auspices
of the U.S.-Russian Joint Coordinating Committee on Radiation Effects
Research (JCCRER). While the studies can involve both U.S. and Russian
populations, the initial focus is on the unique opportunities in the
southern Urals in Russia, particularly in the vicinity of the Mayak
nuclear complex. There, as a result of past poor operating practices
and accidents, workers and the surrounding populations were exposed to
significant amounts of radiation. The characteristics of these
exposures are different in many respects from those for populations
previously studied for radiation health effects, such as the survivors
of Hiroshima and Nagasaki.
Present radiation protection standards have been developed by
making assumptions on how to extrapolate the risks of deleterious
health effects from those observed in populations exposed to short
bursts of radiation (such as the atomic bomb survivors) to the chronic
exposures that are characteristic in facilities subject to NRC
regulation. The studies in the southern Urals will contribute to a
better understanding of what models are most appropriate to describe
the relationship between low dose rate (chronic) radiation exposures
and radiation-induced health effects.
The DOE is the U.S. executive agency for the JCCRER, and the NRC is
sponsoring a portion of the research. Other Federal agencies
participating in the JCCRER are the EPA, NASA, and DOD.
H. International Cooperation
Bilateral and Multilateral Activities.--The NRC has long maintained
a wide-ranging program of international cooperative exchanges to ensure
the peaceful, safe, and environmentally acceptable uses of nuclear
energy in the United States and abroad. This cooperation is conducted
through a variety of bilateral and multilateral relationships. As the
regulator of the world's largest civilian nuclear program, the NRC has
broad capabilities to contribute to international programs on nuclear
power safety, radiation protection, nuclear material protection control
and accounting, waste management, and decommissioning of nuclear
facilities. At the same time, the Commission can benefit from the
experience and expertise gained by foreign nuclear operations.
In supporting U.S. non-proliferation objectives, the NRC is working
with the Executive Branch to facilitate the effective implementation of
the Strengthened Safeguards System of the International Atomic Energy
Agency (IAEA). The NRC will participate with other involved agencies in
the preparations for implementation of the Additional Protocol to the
US/IAEA Safeguards Agreement. Subsequently, the Protocol provisions
will be implemented at applicable NRC licensed facilities.
Currently, the NRC is involved in 33 bilateral safety arrangements
with other countries on five continents. These relationships provide
the framework for providing technical advice and assistance to other
countries, as well as for exchanging significant safety and research
information.
Convention on Nuclear Safety.--The NRC has worked extensively in
the development of the International Convention on Nuclear Safety--the
first instrument to address directly the safety of nuclear power plants
worldwide. This convention obliges contracting parties to establish and
maintain proper legislative and regulatory frameworks to govern safety.
The Convention on Nuclear Safety has been transmitted to the U.S.
Senate for review and action during the current session.
I. Year 2000 Systems Corrections
As a preliminary comment in this area, I would note that on June
12, 1998, I testified on the subject of Year 2000 Readiness of the
Utility Industry before the Senate Special Committee on the Year 2000
Technology Problem. In addition, on May 14, 1998, NRC management
testified on Year 2000 issues before the Subcommittee on Technology,
House Science Committee.
The NRC continues to leverage information technology to provide the
capacity needed to manage effectively the regulatory, scientific,
administrative, financial, and records data that are vital to
fulfillment of the NRC mission. The NRC is fully aware of the
challenges we face in ensuring that our computer applications and
hardware systems continue to function properly in the year 2000 and
beyond, and we have established an aggressive program to address those
challenges directly. We estimate that the total cost to the NRC will be
$10.9 million.
The NRC has completed its assessment of the scope of the Year 2000
computer problem as it relates to computer systems that we use
directly. We also are communicating with agencies with which we
exchange electronic information, to ensure that our data exchange
formats will properly represent dates beyond 1999. The NRC has
developed an action plan and schedules to ensure that the systems most
vital to NRC operations are repaired well before the year 2000, with
appropriate repair schedules for systems less critical to mission-
related activities. The NRC is pursuing aggressively the certification
of Year 2000 compliancy for products and services that we acquire or
use from commercial sources. The NRC Year 2000 program is in compliance
with the most current Year 2000 program guidance issued by the Office
of Management and Budget.
The NRC also is fully aware of the need to address the Year 2000
computer problem in relation to the use of computers in the nuclear
industry. To ensure proper focus on this issue by the nuclear power
industry, the NRC staff met with the Nuclear Energy Institute (NEI) to
obtain industry support in addressing the concern. NEI has agreed to
initiate an effort on the Year 2000 computer problem and, working
jointly with the Nuclear Utilities Software Management Group, has
promulgated a guidance document to assist nuclear power plant licensees
in developing programs to address this issue effectively. This
document, entitled ``Nuclear Utility Year 2000 Readiness,'' has been
issued to all nuclear power plant licensees, and a related workshop was
conducted in November 1997. NEI also met with utility senior executives
in November to remind them of the importance of addressing the Year
2000 computer problem at their facilities, and to establish a mechanism
for exchange of information among licensees as they implement their
programs.
In December 1997, the NRC developed a draft generic letter,
entitled ``Year 2000 Readiness of Computer Systems at Nuclear Power
Plants,'' to ensure that licensees provide assurance of this readiness.
As part of the Federal Register notice soliciting public comment, the
NRC requested proposed alternatives to the generic letter, such as a
voluntary industry initiative that would satisfy the same intent. The
NRC staff has met with the staff of the General Accounting Office
(GAO), and factored GAO comments into the final generic letter. The
final generic letter was issued to nuclear power plant licensees on May
11, 1998. The generic letter requires licensees to confirm, within 90
days of the date of the letter, that they are pursuing a program to
address the Year 2000 problem, and, by July 1, 1999, to confirm that
they will be Year 2000 ready or to provide the schedule for remaining
actions to achieve readiness. In addition to requiring licensees to
report on the existence of Year 2000 programs and to confirm their
readiness, the NRC has recommended that licensees establish contingency
plans. The NRC will conduct inspections of approximately 12 nuclear
power plant licensee Year 2000 programs, on a sample basis, during 1998
and 1999. In addition, the NRC will continue to monitor licensee
efforts to address the Year 2000 computer problem through attendance at
related workshops and meetings over the next 2 years. We believe that
our timetables have been established prudently, allowing consideration
of the need to issue shutdown orders (in the unlikely event that a
reasonable assurance of safety cannot be concluded) well before the end
of 1999, thus allowing for contingency planning on the part of affected
utilities.
Over the past year, the NRC has taken a number of actions to ensure
that the Year 2000 computer problem will be either eliminated or
minimized for its materials licensees as well. We have sent our
materials licensees two Information Notices on this problem, as well as
conducting on-site and telephone sampling interviews with management
from various types of NRC materials licensees. Interviews were
conducted with gauge manufacturers, teletherapy device manufactures,
fuel cycle organizations, uranium extraction companies, broad-scope
medical institutions, and the US Enrichment Corporation gaseous
diffusion plants, to identify any additional problems or issues that
warranted further action. NRC materials licensee inspectors have been
instructed to confirm licensee receipt of NRC Information Notices, to
determine whether licensees have identified any potential problems, and
to note any corrective actions taken.
__________
Responses by the Commissioners of the Nuclear Regulatory Commission to
Additional Questions from Senator Inhofe
Question 1. What is the NRC's plan for continued oversight and
inspection at Millstone Unit 3 to ensure safe operation of the plant?
Response. Millstone Unit 3 is on the NRC watchlist as a Category 2
plant, which ensures that it receives increased NRC management
oversight until such time as plant performance dictates that a category
change is called for. Region I has the responsibility for management
oversight and inspection and has assigned a senior NRC manager and
staff to implement the inspection program to assure the safe operation
of the plant. In addition, the Millstone Restart Assessment Panel,
which is comprised of regional and headquarters managers, senior
residents, and project managers, will continue, for the foreseeable
future, to meet periodically with the licensee, assess Unit 3
performance, and provide input to the inspection program.
Question 2. What is the NRC's plan to ensure that Millstone 2 does
not reopen until restart is safe?
Response. Millstone Unit 2 continues to remain shut down pending
the licensee's completion of its corrective actions and NRC's
verification and formal authorization to restart. The licensee has
implemented a Configuration Management Plan (CMP) for Unit 2 as its
principal program to provide reasonable assurance that design-bases
weaknesses have been effectively corrected. COP includes both efforts
to understand the licensing- and design-bases issues and actions to
prevent recurrence of those issues. Before NRC can reach a decision to
approve restart for Unit 2, the licensee must determine that the plant
conforms with applicable NRC regulations, licensing conditions, the
Updated Final Safety Analysis Report (UFSAR), and that applicable
licensing commitments have been met. NRC must then agree with that
determination.
As a result of the NRC issuing a confirmatory order on August 14,
1996, the licensee was directed to contract with a third party to
implement an Independent Corrective Action Verification Program (ICAVP)
to verify the adequacy of its efforts to establish adequate design
bases and design controls. The ICAVP is intended to provide additional
assurance, before unit restart, that the licensee has identified and
corrected existing problems in the design and configuration control
processes. Because of the scope and depth of the corrective actions for
Millstone, the date for restart of the Millstone Unit 2 has not been
established. NRC's program for assessing the corrective actions at
Millstone will continue to focus on a thorough examination of the
issues identified in the NRC staff's restart assessment plan.
In SECY-97-003, ``Millstone Restart Review Process,'' dated January
3, 1997, the staff provided to the Commission the NRC staff's processes
and approaches that will be used to oversee the corrective action
programs at the Millstone Nuclear Power Station. The staff is applying
the guidelines of NRC Manual Chapter (MC) 0350, ``Staff Guidelines for
Restart Approval,'' to the restart approval of Millstone Unit 2. The
NRC restart actions plan for Unit 2 consists of several major elements,
including corrective action programs, work planning and control
improvements, procedure upgrade programs, quality assurance and
management oversight improvements, and completion of ICAVP.
Question 3. The GAO report included a recommendation that
inspection reports fully document the status of the licensee's actions
to address identified problems under NRC corrective action
requirements.
(a) What has the NRC done to respond to this recommendation?
Response. The NRC acknowledged the GAO recommendation and on August
18, 1997 provided following response:
The NRC agrees with the recommendation to improve oversight of
licensees' timely resolution of problems. The staff has long recognized
the importance of the licensee's corrective actions and has several
processes that focus inspection effort and licensee's management
attention on this area, as described below:
NRC inspectors currently review the adequacy and timeliness of
corrective actions taken by the licensees in response to violations of
NRC requirements and deviations from licensing commitments. They
document these reviews in inspection reports, which are public
documents. These violations and deviations result from nonconformances
identified during NRC inspections of the facility or by the licensee's
own problem identification process.
NRC inspectors routinely monitor, review, and verify the adequacy
of licensee corrective actions. Since licensees annually identify
thousands of deficiencies, NRC resource limitations demand that these
inspections are performed on a selective basis, focusing on those
issues that are most risk- and safety-significant.
In addition, the NRC reviews the licensee's corrective action
program at each reactor facility on a periodic basis (Inspection
Procedure 40500, ``Effectiveness of Licensee Controls in Identifying,
Resolving, and Preventing Problems'') to verify that the licensee is
implementing an adequate program.
NRC's enforcement policy specifies appropriate enforcement actions
for nonconformances with planned and required corrective actions.
Additionally, to encourage licensees to identify and resolve problems,
the enforcement policy provides for mitigation of the sanction for
timely identification and appropriate corrective actions by the
licensee.
Problems identified at the Millstone and Salem plants related to
the licensees failure to take prompt corrective action, as noted in the
GAO report, indicate this area warrants greater attention from the NRC.
The staff has begun a review of its internal processes to identify
areas for improvement in assessing the timeliness, prioritization,
engineering support, and quality of the corrective actions taken by
licensees. Some areas included in the staff's review are the plant
performance review, and the senior management meeting (SMM) processes.
The agency is strengthening its processes for assessing the
effectiveness of a licensee's corrective action program by focusing on
what a licensee has done as opposed to what it plans to do. In that
regard, the NRC intends to provide additional guidance on how
inspectors should close out issues identified in NRC inspection
reports. The staff is also developing a process to better identify and
track licensing commitments and to verify their implementation.
While the NRC intends to follow more closely the corrective actions
for issues included in inspection reports, the NRC does not agree with
the specific recommendation to track and document in the inspection
reports the status of corrective actions for all licensee-identified
issues. Criterion XVI of 10 CFR Part 50, Appendix B. requires licensees
to promptly identify and correct failures, malfunctions, deficiencies,
deviations, defective material and equipment, and nonconformances.
Given the number of issues identified, the efforts required by the NRC
to document and track deficiencies regardless of safety significance,
as recommended in the GAO report, would be large and without a
commensurate safety benefit.
Based on our response dated August 18, 1997 to the GAO report, NRR
prepared draft inspection procedure changes to provide additional
guidance on how inspectors should close out issues (severity level IV
violations, open and unresolved items) identified in NRC inspection
reports. However, because of the recent changes being proposed to the
enforcement program which may require no additional NRC review of less
risk significant severity level IV violations as long as these issues
are captured in the licensee's corrective action program, NRR has
postponed implementing the draft procedures. Once the Office of
Enforcement's review of how severity level IV violations should be
processed by the Agency is completed, NRR will integrate the OE's
recommendations into the NRR's guidance on how to close out open issues
so that the OE's and NRR's processes are consistent.
Question 3. NRC's role in future nuclear energy development vis-a-
vis DOE. (b) Include detailed plans and schedules for the NRC review of
the Calvert Cliffs license renewal and the transfer of ownership of TMI
Unit 1.
Response. The technical review plan for the Calvert Cliffs renewal
application was forwarded to Baltimore Gas & Electric in a letter dated
June 17, 1998. The milestones in the Calvert Cliffs schedule are as
follows:
------------------------------------------------------------------------
Calvert Cliffs Renewal Milestone Date
------------------------------------------------------------------------
Receive Renewal Application.......................... 4/10/98
Notice Application Tendered.......................... 4/25/98
Complete Acceptance & Docketing...................... 5/10/98
Public Meeting & Environmental Impact Statement (EIS) 7/9/98
Scoping.............................................
Staff Complete Technical Requests for Additional 9/7/98
Information (RAIs)..................................
Staff Complete Environmental RAIs.................... 10/7/98
Applicant Complete Technical RAI Responses........... 11/21/98
Applicant Complete Response to Environmental RAIs.... 12/6/98
Issue Draft Environmental Statement (DES) for Comment 3/6/99
Staff Complete Safety Evaluation Report (SER) and 3/21/99
Identify Open Items.................................
Public Meeting to Discuss DES........................ 4/5/99
Complete DES Comments................................ 5/20/99
Applicant Complete Response to Open Items............ 7/19/99
Staff Issue Supplemental SER & Final Environmental 11/16/99
Statement (FES).....................................
ACRS Recommendations to Commission on Application.... 2/14/00
Commission Decision on Application................... before 10/00
------------------------------------------------------------------------
On July 8, 1998, a Notice of Opportunity for Hearing was published
in the Federal Register related to the renewal application for Calvert
Cliffs. As of August 10, 1998, one petition for leave to intervene has
been received in connection with the Calvert Cliffs renewal
application.
The Commission may issue a case-specific order providing further
guidance on procedures and scheduling matters.
The NRC also received a license renewal application on July 7, 1998
from Duke Energy Corporation for their three-unit Oconee plant. The
staff established similar milestones for the review of the second
renewal application, which were forwarded to Duke in a letter dated
July 31, 1998.
Both renewal reviews are proceeding as scheduled. NRC management
and the NRC License Renewal Steering Committee will meet with BGE and
Duke management on August 20, 1998, to discuss the plans and progress
on the renewal reviews.
The NRC has not yet received a request from Amergen (a consortium
formed by PECO Energy, Inc., and British Energy) to transfer ownership
and operating authority of the Three Mile Island, Unit 1, plant. Among
other matters, the issue of foreign ownership, domination, or control
will have to be addressed in light of the prohibition in the Atomic
Energy Act of 1954, as amended, against such interests. Given the
unknowns, the NRC has established the following schedule, expressed in
terms of weeks following receipt of an application, for review of the
license transfer request, including a provision for an adjudicatory
process, associated with the purchase of Three Mile Island, Unit 1
(TMI-1) by Amergen, Inc.:
------------------------------------------------------------------------
Milestone *Weeks
------------------------------------------------------------------------
Complete Acceptance Review; publish Notice of Application and 2
Opportunity for Hearing in Federal Register and identify case-
specific schedule factors......................................
Complete preparation and submittal of Commission paper on 8
analysis of policy and legal issues associated with foreign
ownership, domination, or control of TMI-1.....................
Complete reviews of decommissioning funding assurance, financial 12
qualifications, technical qualifications, foreign ownership,
and antitrust. (Note that the license for TMI-1 was issued
under Section 104b of the AEA. As such, the facility and its
licensees are ``grandfathered'' from antitrust reviews.) Issue
order (and associated license amendment) approving or
disapproving license transfer. If required, also issue
Environmental Assessment and Finding of No Significant Impact.
(Note that the Commission has determined that any hearing that
might be granted in connection with a transfer order need not
be completed before the issuance of such order. Pursuant to 10
CFR 50.92, the conforming amendment to the license does not
typically involve a significant hazard consideration and may
take effect upon issuance. However, the order and any
conforming amendment are subject to the outcome of any hearing
that may be conducted in connection with the transfer
application.)..................................................
Complete hearing process, if required. **36
------------------------------------------------------------------------
*Cumulative weeks following receipt of an application for transfer of
ownership
** The estimated duration of any hearing that might be held is based
upon the Commission's currently applicable Rules of Practice and the
recently issued Statement of Policy on Conduct of Adjudicatory
Proceedings, 63 F.R. 41,872 (August 5, 1998), as well as the issuance
of a case-specific order by the Commission providing further direction
regarding the conduct and scheduling of the hearing. It should also be
noted that a proposed rule, which would revise the Commission's rules
of practice to provide streamlined licensing procedures specifically
applicable to license transfer proceedings, was published in the
Federal Register on September 11, 1998. A 30-day public comment period
is provided.
Question 3. NRC's role in future nuclear energy development vis-a-
vis DOE. (c) Discuss the factors that contributed to delays in
regulatory action with Vogtle and LES, and the steps taken to prevent
their recurrence.
Response. The Vogtle proceeding involved an application for the
transfer of control of the facility's operating license from Georgia
Power Company to the Southern Nuclear Operating Company which was
challenged on grounds related to the character and integrity of the
current and prospective licensee's management. Unlike other
proceedings, concurrent with the ongoing licensing proceeding, the
intervener had filed a petition under the Commission's regulations
requesting that an enforcement action be taken against the licensee
based on the same facts asserted as grounds for denying the license
transfer. These facts further related to a then ongoing investigation
being undertaken by the NRC's Office of Investigations, which entailed
a referral to the Department of Justice for consideration of criminal
prosecution. Because of the related enforcement aspects, the staff
declined to prove the transfer of operating authority and related
amendments until completion of the proceeding. The delays in completion
of the proceeding likewise stemmed largely from decisions to delay
litigation pending resolution of the ongoing investigation. This action
was also complicated by the need for the staff to decide whether to
take enforcement action. In retrospect, it seems clear that at least
some of the delay was not legally compelled.
Louisiana Energy Services (LES) proceeding involved a first-of-a-
kind application for a private enrichment facility, involving a
technology which had not previously been licensed by the Commission.
During both the technical review and adjudicatory process, a number of
novel legal and technical issues had to be addressed. With respect to
the staff's technical review, it is now apparent that the application
submitted by LES was not sufficient to enable the staff's review to be
conducted on a timely basis, but that the staff did not aggressively
address its shortcomings nor was the applicant fully responsive to
staff requests for additional information.
In regard to the LES adjudicatory process, the record developed was
complex and involved issues of first impression which, although brought
to the Commission's attention, were not resolved in a timely manner. In
addition, in an attempt to ensure that all issues were thoroughly
addressed, the Licensing Board allowed a large amount of information
into the record without insisting on adequate sponsorship by the
parties to explain the significance of that information, which then had
to be considered by the Board in reaching its decisions. These
decisions themselves were excessively delayed, as the Licensing Board
itself has acknowledged.
Notwithstanding that both the Vogtle and LES proceedings involved
unique considerations not believed likely to recur, the Commission has
attempted to address sources of potential delay in future licensing
actions in several ways. The staff now prepares a detailed review
schedule for significant licensing actions such as license renewal,
including the need to assure the adequacy of the license application
itself and for bringing emerging technical issues to NRC management
attention and, if necessary, to the Commission for guidance (both
matters which also contributed to the delay of the LES proceeding).
In addition, the Commission has taken steps to streamline the
adjudicatory process, while still assuring that a clear and complete
record is created. The Commission has commenced a study of the entire
hearing process and expects to receive recommendations, including
recommendations on the need for legislation, by the end of this year.
In the interim, on July 28, 1998, the Commission issued a ``Statement
of Policy on Conduct of Adjudicatory Proceedings,'' which provides
guidance to the licensing boards, presiding officers and parties to
Commission proceedings on how the Commission expects its proceedings to
be conducted. The policy statement encourages licensing boards and
presiding officers to establish case-specific schedules which are to be
followed, to shorten filing and response times where practical, to
manage discovery to avoid unnecessary delays in that stage of the
adjudicatory process, to make sure that the parties comply with the
Commission's regulations governing the submission of admissible
contentions, and to issue decisions in a timely manner. It also
stresses the obligations of all parties to adhere to the Commission's
Rules of Practice and their respective burdens as participants, for
example, with respect to submitting contentions and for offering
evidence. In addition, the Commission indicated that it will itself
carefully and actively monitor ongoing licensing proceedings to ensure
that they are conducted expeditiously and that the boards, staff and
other parties receive prompt guidance on emerging technical, policy and
legal issues, as necessary. Consistent with its desire for expeditious
processing of license applications, the Commission, on August 19, 1998,
issued and order giving guidance and recommending a schedule to the
Licensing Board that will preside over the licensing renewal proceeding
for the Calvert Cliffs Nuclear Power Plant. Moreover, it is now
considering whether to establish new, informal procedures for license
transfer hearings that, if promulgated as a final rule, could, in
general, substantially reduce the time for such hearings.
Question 4. Early warning for plants that exhibit declining safety
performance is very important. The GAO report concluded that the NRC
needs to make clear how it will respond--including a clear statement on
what sanctions will be applied--when inspections identify problems.
What steps has the NRC taken to address this concern.
Response. The NRC acknowledged the GAO recommendation and on August
18, 1997 provided the following response:
The NRC agrees that the licensee's responsiveness to identified
problems is a critical performance criterion. The current NRC
inspection and enforcement programs have well-established
requirements that focus on this criterion. Recent changes to the
SMM process, including development of an SMM nuclear power plant
performance evaluation template, have clearly emphasized the
importance of evaluating the licensee's responsiveness to
identified problems. The staff has recently strengthened the
corrective action evaluation criteria found in the ``Staff
Guidelines for Restart Approval'' (Inspection Manual Chapter 0350),
which is the guidance document used by the staff in assessing
plants that are in an extended shutdown as a result of performance
issues. In addition, the Commission directed the staff to further
improve the SMM process by developing better indicators that can
provide a more objective basis for judging whether a plant should
be placed on or removed from the NRC Watch List. These improved
performance indicators and objective measures will enhance staff's
ability to take appropriate regulatory actions including additional
enforcement where past enforcement actions have not been effective.
Question 4. The NRC's enforcement policy already identifies
sanctions for licensees that fail to resolve problems within a
definitive period. The NRC's enforcement policy provides for matching
sanctions for a violation to the safety and regulatory significance of
the violation and establishes a graduated system of sanctions that
include noncited violations, notices of violations, civil penalties,
and orders to modify, suspend, or revoke a license. The NRC imposes
more substantial penalties for more significant problems. In
determining the significance of a problem and the appropriate
enforcement sanction, the established process also takes into
consideration (1) the licensee's previous opportunity to identify and
resolve the problem and (2) the length of time the problem remained
unresolved because of the licensee's failure to take corrective
actions.
Response. The enforcement history has been an important
consideration in the SMM process. However, enforcement actions are
taken on a timely basis and are not delayed until the next SMM. As a
part of our effort to improve the SMM and the licensee performance
assessment process, we will consider ways to make clear what NRC
actions will be considered and applied when problems are not corrected
in a timely manner.
Question 5. NRC's rule containing radiological criteria for license
termination set an all pathways dose of 25 millirem/year for the
unrestricted release of a decommissioned site. EPA encouraged the NRC
to adopt a maximum level of residual contamination of 15 mrem/year with
a separate 4 mrem/year ground water standard. EPA Administrator has
threatened that EPA would apply the Comprehensive Environmental
Response, Compensation, and Liability Act (through Superfund listing)
if NRC and EPA do not reach agreement on applicable standards through a
memorandum of agreement. Isn't this a classic example of dual
regulation?
Response. Yes, this is an example of dual regulation. Fundamental
policy differences exist involving the acceptable dose level (25 mrem/y
vs. 15 mrem/y) and EPA's belief that a separate pathway standard for
groundwater in addition to an all pathways standard is necessary.
NRC published a final rule establishing radiological criteria for
decommissioning in July 1997. This rule established 25 millirem per
year (mrem/yr) from all potential exposure pathways as the acceptable
criterion for release of licensed sites for unrestricted use. The rule
also requires that radiation doses be reduced below the rule's dose
criterion through the As Low As Reasonably Achievable process. This
rule is consistent with international and national scientific
recommendations as well as EPA's 1994 draft Federal Radiation
Protection Guidance for Federal Agencies. EPA stated that this is not
protective of the public health and the environment, and that 15 mrem/
yr from all pathways, with separate limits established for groundwater,
is necessary. The EPA limits on groundwater would be the Maximum
Contaminant Levels (MCLs). EPA would apply MCLs in groundwater, not at
tap as specified in 40 CFR 141, National Primary Drinking Water
Regulations, which are normally applied to drinking water at the tap.
NRC disagrees with the EPA position, as discussed below.
First, the approach suggested by EPA results in the imposition of
the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) risk range on radionuclides without the informed and open
discussions that would be part of the rulemaking process to establish
such radiation protections standards--a process which NRC completed in
1997. The Commission's final rule is based on considerations of risk,
radiation protection principles, national and international standards,
and costs compared to associated benefits of cleanup. Second, there is
no reason from the standpoint of protection of the public health and
safety to have a separate, lower dose criterion for one of the pathways
(i.e., groundwater) as long as, when combined, the dose from all
pathways does not exceed the all-pathways dose standard. EPA's approach
also overlooks the fact that MCLs, which EPA espouses for groundwater
cleanup, are not set at consistent risk levels and include some that
could result in exposures that exceed NRC's 25 mrem/yr all-pathways
dose criterion, as well as others set at small fractions of a mrem. In
issuing the final rule, NRC concluded that the final rule not only
protects the public health and safety, but also establishes a framework
to address the limited number of difficult cases which would otherwise
require consideration of case-by-case exemptions. NRC considers that
this approach provides adequate protection of the public health and
safety and the environment, and constitutes cost effective regulation.
NRC is also concerned that EPA's threat to apply CERCLA raises the
question of finality for sites that have complied with the NRC or
equivalent Agreement State cleanup standards and have had their
licenses terminated. NRC considers that it is important to provide for
finality in NRC and Agreement State license termination decisions in
order to provide licensees and the public with a stable and predictable
regulatory framework that is adequately protective of public health and
safety and the environment.
In summary, dual regulation by EPA under Superfund is not necessary
and is not a good use of limited Government resources and the resources
of American citizens to whom the regulations apply.
Question 6. Is the NRC's radiological criteria for license
termination consistent with international standards set by the
International Commission on Radiological Protection (ICRP) and the
National Council on Radiation Protection and Measurement (NCRP)?
Response. Yes, the NRC's radiological criteria for license
termination are consistent with standards set by ICRP and NCRP.
Applicable ICRP and NCRP findings are contained in ICRP Publication 60
and in NCRP No. 116, respectively. Based on review of health and
societal issues, both documents (while acknowledging the difficulty of
setting standards for an ``acceptable'' public dose limit) arrive at
100 mrem/yr from all sources of radiation as a level that can be said
to be acceptable. NCRP 116 notes that this value includes a review of
risks of mortality faced by the public. The ICRP and NCRP approaches
further reduce their 100 mrem/yr limit by the principle of
``optimization,'' which includes considerations of constraints and
cost-effectiveness. Specifically, NCRP 116 notes that no single source
or set of sources should result in an individual being exposed to more
than 25 mrem/yr. This fraction (of 100 mrem/yr) was presented as a
simple alternative to having a site operator investigate all man-made
exposures that an individual at the site would be exposed to so as to
demonstrate that the total dose does not exceed 100 mrem/yr. The clear
implication in this simple alternative is that, if individual sources
are constrained to 25 mrem/yr, NCRP believes it likely, given the low
potential for multiple exposures, that the public dose limit will be
met. Further reductions considering ALARA would still be considered by
NCRP 116. It is also important to note that ICRP, in its recent
Publication 77, identifies 30 mrem/yr as the appropriate individual
dose limit for the disposal of radioactive waste.
Using the nationally and internationally adopted principles of
setting ``individual dose and risk limits'' and ``optimization of
protection'' (noted above) and an additional margin of safety to allow
for the potential for exposure to more than one radiation source, the
NRC developed its final rule on radiological criteria for license
termination.
Question 7. (A) Is legislative action necessary to resolve this
[dual regulation] problem?
Response. The Commission has tried to develop an understanding with
EPA in the form of a Memorandum of Understanding on decommissioning and
decontamination of contaminated sites. However, in over a year of
effort to reach an agreement, there has not been progress made to date.
It has become apparent that EPA's commitment to its current regulatory
approach differs significantly from NRC's support of fundamental
radiation protection standards, as described in national and
international standards, that are based on considerations of risk and
costs compared to associated benefits of clean up.
In other words, there are substantial differences between NRC and
EPA on the basis for protection of public health and safety and the
environment. Among other things, this raises the issue of finality of
NRC or Agreement State decisions on license termination. NRC believes
that it is important to provide for finality in such decisions thereby
establishing a stable and predictable regulatory framework that is
adequately protective of public health and safety. Recognizing that
dual regulation is wasteful of Government resources and the resources
of the American people, the Commission has concluded that the
resolution of the differences between the EPA and the NRC with respect
to cleanup of radioactive contamination is a matter of policy that can
best be solved by Congressional action. The NRC Chairman sent a letter
to Senator Chafee on July 16, 1998, recommending that Congress address
this issue. A copy of Chairman Jackson's letter is enclosed.
______
enclosure: letter to senator chafee from chairman jackson
July 16, 1998
The Honorable John H. Chafee, Chairman
Committee on Environment and Public Works
U.S. Senate
Washington, D.C. 20510
Dear Mr. Chairman: The purpose of this letter is to express the
views of the Nuclear Regulatory Commission (NRC) regarding the
resolution of the differences between the Environmental Protection
Agency (EPA) and the NRC with respect to cleanup of radioactive
contamination. We had discussed this matter when I met with you on
April 28, 1998 And. as you are aware, the EPA forwarded its views to
you via a letter dated March 28, 1998. For the reasons explained in
this letter, the Commission believes that the resolution of these
differences is a matter of policy that can best be solved by
Congressional action.
The NRC is committed to fundamental radiation protection standards,
as described in national and international standards. This commitment
is reflected in NRC's Rule on Radiological Criteria for License
Termination, which was issued on July 21, 1997. The rule was arrived at
through an enhanced participator rulemaking process and was accompanied
by a voluminous environmental impact statement and extensive regulatory
analysis. It is based on considerations of risk, radiation protection
principles, national and international standards, and costs compared to
associated benefits of cleanup. It uses the principles of setting of an
individual dose limit, risk limits, and optimization of protection,
plus an additional margin to allow for the potential for exposure to
more than one radiation source. NRC's rule includes an all pathways
dose criterion of 25 mrem/yr and, additionally, requires that doses be
reduced below the rule's dose criterion through the ALARA process,
which requires NRC licensees to achieve doses to members of the public
that are as low as reasonably achievable. Demonstration of compliance
with the all-pathways dose criterion requires evaluation of the
groundwater pathway. The approach of using an all-pathways dose
criterion provides a dependable, risk-based standard and is consistent
with the recommendations of the National Academy of Sciences, national
and international scientific organizations, as well as EPA's 1994 draft
Federal Radiation Protection Guidance for Federal Agencies.
Nevertheless, EPA questions basic aspects of NRC's Rule on
Radiological Criteria for License Termination, maintains that NRC's
radiological criteria for license termination are not protective of
public health and the environment, and asserts that if EPA is not
satisfied with cleanups conducted to the NRC-established level, EPA may
decide to list a previously NRC decommissioned licensee on the National
Priorities List. Among other things, this raises the issue of finality
of license termination, and possible EPA actions at sites that have
complied with the NRC or equivalent Agreement State cleanup standards
and had their licenses terminated. We believe that it is important to
provide for finality in NRC and Agreement State license termination
decisions order to provide licensees and the public with a stable and
predictable regulatory framework that is adequately protective of
public health and safety and the environment.
In addition, EPA faults the NRC for not establishing a separate,
specific requirement for groundwater pathways. This ignores the fact
that, under the standards established by the NRC, the dose to a member
of the public from all pathways of exposure (air, water, food, and
direct radiation) would not be permitted to exceed 25 mrem/yr for those
cases in which the NRC would permit unrestricted release of the
decontaminated site. It also overlooks the fact that maximum
contaminant levels (MCLs) established under the Safe Drinking Water Act
(SDWA), which EPA espouses for groundwater cleanup, are not set at
consistent risk levels (and include some that are above the NRC's dose
criterion). Further, the costs of meeting certain MCLs may be excessive
compared to the benefits obtained (in some cases, trillions of dollars
per individual health effect averted).
Another aspect of NRC's concern with the application of MCLs is
EPA's position that it lacks flexibility with respect to setting
drinking water standards and MCLs of radionuclides under the Safe
Drinking Water Act and, as such, the application of MCLs for
radionuclides under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA). It is also EPA's view
that application of drinking venter standards in other contexts, such
as cleanup standards for radioactive contamination or standards of
control for monitoring radioactive waste disposal facilities, has no
bearing on the proper setting of the drinking water standard, and that
the legislative direction in the SDWA prohibits increasing any
groundwater standards, such as MCLs, regardless of what changes in
science may indicate. In contrast, NRC is not subject to any statutory
prohibition on using the latest methodology or advances in science for
limiting radiation doses to individuals or principles established in
international agreements in setting standards to maximize protection of
the public's health and safety. This difference in legislative mandates
further exacerbates the differences between the NRC and EPA on
radioactive disposal and cleanup.
We recognize that dual regulation is wasteful of both Government
resources and the resources of American citizens to whom the
regulations apply. Therefore, we have attempted to reach an
understanding with EPA in the form of a Memorandum of Understanding
(MOW) on decommissioning and decontamination of contaminated sites. I
sent EPA Administrator Browner a draft MOU on the subject on August 6,
1997. In response, on February 19, 1998, EPA sent Its a revised MOU for
consideration. After NRC staff reviewed the EPA-revised MOU' the
Commission came to the conclusion that fundamental differences exist
between our two agencies, on the basis for protection of public health
and safety and the environment. These fundamental differences have the
potential for severely impacting a number of areas that (all under NRC
jurisdiction such as high-level waste, transportation, and use of
radioactive material in medicine.
In sum, the Commission believes that Congressional action can best
resolve the differences between EPA and the NRC. Further, we continue
to believe, consistent with the standards of the international
community, that the approach used in NRC's cleanup rule provides all
the regulation necessary for adequate protection of public health and
safety and the environment. We are aware, of course, that EPA opposes
that view, and has expressed a preference for continuing interagency
deliberations. However. we believe that the EPA's commitment to its
current regulatory approach differs so significantly from NRC's support
of fundamental radiation protection standards as described in national
and international standards that a Congressional resolution of the
differences is desirable.
Sincerely,
Shirley Ann Jackson.
Question 7. (B) If so, what action should Congress take to address
this problem?
Response. The Commission urges that any legislation reauthorizing
CERCLA contain language comparable to that found in section 810 of H.R.
3000. The NRC believes, consistent with the standards of the
international community, that the approach used in NRC's Rule on
Radiological Criteria for License Termination, issued on July 21, 1997,
provides all the regulation necessary for adequate protection of public
health and safety and the environment, and we strongly urge support of
that approach in legislation for the reauthorization of CERCLA. The
rule was arrived at through an enhanced participatory rulemaking
process and was accompanied by a voluminous environmental impact
statement and extensive regulatory analysis. It is based on
considerations of risk, radiation protection principles, national and
international standards, and costs compared to associated benefits of
cleanup. It uses the principles of setting of an individual dose limit,
risk limits, and optimization of protection, plus an additional margin
to allow for the potential for exposure to more than one radiation
source.
Question 8. You discussed your NRC Strategic Assessment and
Rebaselining effort which is over 3 years old. What are the most
serious self criticisms that came out of that self evaluation, and what
have you done about them? (page 1)
Response. The most significant self-criticisms concerned (1) the
slow progress of moving toward a more risk-informed and performance-
based regulatory framework, (2) the excessive duration and effort
needed to complete some licensing actions, (3) the efficiency and
effectiveness of the inspection, performance assessment and enforcement
processes and (4) the less than optimal organizational relationships
and responsibilities to support regulatory initiatives.
To address these issues the Agency has, for example, (1) developed
guidance documents for risk-informed applications, implemented a senior
management oversight committee, and monitored higher priority risk-
informed licensing submittals; (2) sought to better define the
organizational responsibilities of the Office of Nuclear Reactor
Regulation to focus on the timely completion of licensing submittals;
(3) worked with industry to identify improvements in our inspection,
assessment, and enforcement processes that focus on safety and risk
significance; and (4) shifted the responsibility for rulemaking
activities from the Office of Regulatory Research to the cognizant
Program office to provide a more effective and efficient rulemaking
process.
The Strategic Assessment and Rebaselining effort was the initial
step in implementing a new planning, budgeting, and performance
management process. One of the principal purposes of NRC Strategic
Assessment and Rebaselining effort was to identify activities that the
NRC engages in, group these activities appropriately, identify
potential strategic or direction setting issues associated with these
groups of activities, and provide an opportunity for the Commission to
define a long term direction for the Agency. Commission decisions, for
example, associated with the Strategic Assessment and Rebaselining
effort dealt with areas such as oversight of the Department of Energy;
risk-informed and performance-based regulation; high-level waste; the
role of industry and public communications. The process provided the
Commission with options for reaffirming or changing the direction of
the agency. The Strategic Assessment and Rebaselining effort supported
the subsequent development of the agencies Strategic Plan, the agency's
Performance Plan, and each office's Operating Plan by helping to
prioritize activities and identifying areas were process or activities
should be eliminated or enhanced. Resources and planned accomplishments
were identified to implement the Strategic Plan and as the agency moves
forward performance assessment and monitoring will provide feedback to
further refine our strategic direction.
Over the last 2 years, critical self-assessments have resulted from
implementation of the Commission decisions associated with the
Strategic Assessment and Rebaselining effort, from resolution of over
200 process- and implementation-related issues identified during
development of the directions setting issues, and from the oversight
afforded by the enhanced budgeting and planning process.
Question 9. (A) What are your ``clear safety standards''? (page 2)
How are they defined? How do they relate to the regulations? How are
they implemented?
(B) How do you ensure the inspectors and reviewers don't go beyond
the legitimate bounds in assessing ``safety standards''? What direction
do you give to your managers when they determine reviewers have gone
beyond the bounds of the ``safety standards''?
Response. (At The referenced quotation from page 2 of the statement
submitted by the USNRC to this Senate Subcommittee notes that NRC has
been criticized for a ``lack of rigor in demanding strict adherence to
clear safety standards.'' This criticism, in part, is that NRC lacks
clear safety standards. The Atomic Energy Act of 1954, as amended,
establishes ``adequate protection'' as the standard of safety on which
NRC regulation is based. The Commission's regulations establish the
basis for meeting that standard. In addition, regulations require the
license (including the Technical Specifications) and Updated Final
Safety Analysis Report to provide further plant-specific detail as to
the standards that a plant must meet to operate safely.
Some of the Commission's regulations are prescriptive, describing
precisely what is required for compliance. However, most of the
regulations are based on a recognition that there are multiple means of
achieving equivalent degrees of safety. Therefore, the Commission has
established guidance documents such as NUREGs, Regulatory Guides, the
Standard Review Plan, and Branch Technical Positions to state methods
of achieving compliance that are acceptable to the Commission.
Licensees may propose alternative methods of compliance that provide
equivalent degree of safety. Therefore, safety standards are defined by
NRC regulation and associated guidance documents.
(B) Assurance that a licensed facility meets the regulations is
gained through the licensing and inspection processes. To provide for
consistency, evaluations of current plant design and operation
conducted by inspectors and evaluations of proposed licenses and
amendments conducted by technical reviewers are required to follow a
set of guidance documents. The Standard Review Plan (NUREG 0800)
supplements the various regulatory guidance documents to provide a
framework for licensing technical review. A detailed inspection program
manual and implementing procedures, the Enforcement Manual, and
enforcement guidance memoranda provide guidance for inspectors in
evaluating a licensee's implementation of the approved design and
ongoing operation of the facility. Additional process guidance is
provided in NRR and Region Office Letters and policy memoranda. This
guidance is generally available in the public domain.
When an NRC manager determines that an inspector or reviewer has
made conclusions that are inconsistent with established guidelines, the
manager is expected to resolve the issue and ensure that the
assessments and conclusions are consistent with established guidance
documents, provide an appropriate characterization of safety aspects of
the review, contain no additional policy issues, and communicates the
appropriate message to licensees. In the case of inspection reports,
inspectors and the licensee meet, prior to publication of the report,
to discuss inspection findings and provide an opportunity for the
licensee to discuss concerns with the agency's assessment. Inspection
reports are reviewed by the appropriate level of management prior to
being issued to licensee.
In addition to management oversight of the licensing review and
inspection programs, both internal NRC policy and the regulations
themselves provide opportunities for interested stakeholders to contest
the staff's actions. For the industry, perceived NRC staff excesses may
be challenged through four processes that monitor concerns raised by
licensees. (1) Licensees can report concerns to NRC management during
periodic site visits required by Inspection Manual Chapter (IMC) 0102,
``Oversight and Objectivity of Inspectors and Examiners at Reactor
Facilities.'' IMC 0102 requires NRC management to make periodic site
visits to solicit feedback from their licensee counterparts regarding
implementation of the NRC regulatory programs at their facility.
Concerns raised by licensees during IMC 0102 visits are evaluated
annually with the results reported to the Commission. (2) Each region
has a formal process to evaluate and resolve licensees' complaints of
inappropriate regulatory action by NRC employees. Each procedure
requires a determination if the issue should be pursued by the Office
of the Inspector General (OIG) or the region. For issues reviewed by
the region, the regional administrator approves a course of action
including any specific remedial actions. (3) If the issue is referred
to the OIG, the matter is handled in accordance with Management
Directive 7.4, ``Reporting Suspected Wrongdoing and Processing OIG
Referrals.'' (4) A formal process was established in July 1995 for
senior power reactor licensee officials to report perceived
inappropriate regulatory action directly to the Office of the EDO.
Independent of these processes, licensees can informally discuss any
concern directly with their counterpart in the regional office or in
ERR at any time. In addition, if the staff's action is perceived as
being too lenient, any person may file a request pursuant to 10 CFR
2.206 to institute a proceeding to modify, suspend, or revoke a
license, or for other such action as may be proper.
Question 10. What are your objective performance standards? What
are your metrics? (page 3)
Response. As discussed in response to Question 9, historically,
safety performance has been assessed by NRC judgment of how well a
licensee adheres to the safety standards defined by NRC regulation and
implemented through licensing processes. The NRC's regulations
promulgate requirements ranging from the highly prescriptive, to
requirements that are more broadly stated which require supplemental
regulatory guidance (e.g. NRC Regulatory Guides and Standard Review
Plans) reflecting one or more acceptable implementation alternatives.
These Guides are not designed to cover every option, but are instead a
yardstick against which to measure alternatives.
Currently, NRC uses processes such as Senior Management Meetings
(SMMs), and Plant Performance Reviews (PPRs) to perform a qualitative
integrated assessment of licensee performance. Additionally, NRC uses
quantitative performance data (such as forced outage rate; number of
safety system failures; equipment forced outages; automatic scrams
while critical; collective radiation exposure; and number and severity
level of recent enforcement actions) at the SMMs to support findings of
performance changes.
NRC has initiated efforts to develop and rely on more objective
nuclear plant performance indicators for reactor inspection and
assessment processes. Several public meetings have recently been held
with industry representatives and a major public workshop is scheduled
for late September 1998 to discuss industry and NRC perspectives on
attaining a more objective performance assessment process which would
integrate information sources, including a set of selected performance
indicators. This effort is intended to develop a process that will
allow transition to a more quantitative set of performance indicators
and has near-term deliverable dates in early 1999.
Question 11. (A) You mention ``improved efficiency''. (page 5) How
does NRC measure internal work processes efficiency?
(B) What expectations have been provided to the staff relative to
expected review times?
(C) How successful have you been in improving process times? Have
you started measuring process times?
Response. The NRC developed a Strategic Plan and a Performance Plan
for the Agency and Operating Plans for the individual Agency Offices
and Regions. The Office and Regional Operating Plans contain
performance plan output measures which in turn contain activity-
specific milestones and metrics. The metrics contain standards for
quantity, quality, timeliness, and efficiency. Labor rates obtained
from the Office tracking systems are typically used to measure the
efficiency of the work process. The staff participates in the
development of the Operating Plans and the goals set forth in the
Operating Plans are being incorporated into staff performance
appraisals. Work processes are monitored by management, and as
activities are carried out, schedules are adjusted accordingly.
Operating Plan standards are being reviewed and improved as needed on a
quarterly basis.
Using these standards, the NRC measures review process efficiency
several ways including product volume (licensing actions completed),
backlog inventory and backlog age demographics.
Expectations regarding expected review time are related directly to
the priority assigned to the review. The priority of a review task is
determined primarily on the basis of safety significance, risk
considerations, and operational impact. However, in some situations,
priority is dictated by Commission or EDO directive resulting from
policy considerations, or by statutory requirements such as deadlines
imposed by rule or regulation. For example, policy considerations have
a significant bearing on the priority assigned to review tasks for
license renewal. Four levels of review priority are broadly defined in
staff guidance. Higher priority work is to be accomplished first;
however technical complexity may dictate that the review takes longer
than other tasks of low priority and low complexity. Other factors may
affect review times are quality of the submittal in support of the
proposed action and timeliness of the applicant's response to requests
for additional information.
Until recently, the expectations were that 80 percent of licensing
action review tasks would be completed within 1 year, 95 percent would
be completed within 2 years and all tasks would be completed within 3
years. As a result of a recent Commission directive, the expectations
have been raised and resources have been applied to achieve the higher
expectations. In general, the new expectations are that 95 percent of
licensing action review tasks will be completed within 1 year and all
tasks will be completed within 2 years.
The number of licensing actions completed, the current inventory,
and the actual number and percentage of licensing actions exceeding 2
years are reported to management on a monthly basis. Recently, the
volume of licensing actions completed has improved, although the
percentage of licensing actions exceeding the age goals has increased
somewhat. Thus, we recognize improvements are needed. Management
attention is being focused on this area.
The Commission recently challenged the staff to reduce the
licensing inventory to a historic low of 700 licensing actions by the
end of fiscal year 2000. The NRC's fiscal year 2000 budget proposal
will include the resources needed to achieve this goal.
The Regional Offices measure their performance in a similar way by
monitoring inspections completed (and associated number of inspection
hours completed at each site), timeliness, and quality of inspection
and associated assessment reports, and enforcement actions. These
indicators have shown continued improvement over the past several
months.
Question 12. You say you are working to make inspection,
enforcement and assessment processes better. (page 6) How are you
monitoring abuses of these activities?
Response. The NRC interacts regularly with industry groups (NEI and
INPO) to gain the group's perspective on various regulatory issues.
Additionally, the NRC has four processes that monitor concerns raised
by licensees. Independent of these processes, licensees can informally
discuss any concern directly with their counterpart in the regional
office or in NRR at any time. (1) Licensees can report concerns to NRC
management during periodic site visits required by Inspection Manual
Chapter (IMC) 0102, ``Oversight and Objectivity of Inspectors and
Examiners at Reactor Facilities.'' IMC 0102 requires NRC management to
make periodic site visits to solicit feedback from their licensee
counterparts regarding implementation of the NRC regulatory programs at
their facility. Concerns raised by licensees during IMC 0102 visits are
evaluated annually with the results reported to the Commission. (2)
Each region has a formal process to evaluate and resolve licensees'
complaints of inappropriate regulatory action by NRC employees. Each
procedure requires a determination if the issue should be pursued by
the Office of the Inspector General (OIG) or the region. For issues
reviewed by the region, the regional administrator approves a course of
action including any specific remedial actions. (3) If the issue is
referred to the OIG, the matter is handled in accordance with
Management Directive 7.4, ``Reporting Suspected Wrongdoing and
Processing OIG Referrals.'' (4) A formal process was established in
July 1995 for senior power reactor licensee officials to report
perceived inappropriate regulatory action directly to the Office of the
EDO.
Question 13. You talk about ``plants experiencing performance
problems.'' (page 6) How do you judge performance? What metrics do you
use? How do they relate to safety?
Response. Historically the NRC has judged plant performance through
the integration of a combination of performance indicators such as the
frequency and severity of plant events, and the results of NRC
inspections including enforcement history. Such information available
to the NRC is brought together for review of each plant on a six month
cycle (Plant Performance Review) to adjust regional inspection
resources and to detect adverse trends potentially stemming from
programmatic weaknesses. Additionally, senior agency managers meet
annually (recently changed to an annual Senior Management Meeting
[SMM]), previously was semiannual to review plants whose poor
performance may warrant increased NRC senior management attention and
overall agency resource expenditures. Quantitative data are used at
these senior management meetings to support findings of performance
changes. This evaluation process integrates quantitative and
qualitative performance measures such as Plant Performance review
findings, safety inspection findings, enforcement history, safety
equipment performance history, Licensee Event Reports, number of
allegations received, and trend plots of some of these indicators.
However, performance assessment processes in general have not relied
solely on these data to determine outcomes, but have utilized a
diversity of NRC participants to help achieve consistency across
plants, regions, and time. The level of safety performance by any
specific plant is determined through the assessment processes noted
above. Changes to these processes within the last year have included an
effort to make the bases for their outcomes more clear, such as
publishing the Plant Issues Matrix (basis for PPR outcome) and minutes
of the SMMs. Additionally, the Commission recently authorized
suspension of the Systematic Assessment of Licensee Performance in
order to allow additional resources to be devoted to development of a
new assessment process. The NRC initiative includes input from industry
and public participation, to determine if safety performance can be
more directly tied to measurable indicators, where such indicators can
be shown to be closely aligned with plant risk.
Question 14. (A) You state that you have ``adopted measures that
internally challenge the need for each generic communication.'' How
have you done that?
Response. The internal challenge on the need for a generic
communication is done in a series of reviews with an increasing level
of management involvement based on its overall significance. As a first
step, a multidisciplinary staff level review of a potential problem is
performed by the Events Assessment Panel with representatives from the
offices of Nuclear Reactor Regulation (NRR), Analysis and Evaluation of
Operational data (AEOD), and Office of Regulatory Research (RES). This
panel reviews the need for each generic communication and suggests the
appropriate type of communication.
Generic letters and bulletins require senior management approval.
In an August 7, 1998 memorandum, the director of NRR provided guidance
to the staff regarding the need to brief senior management before
preparing a generic letter or bulletin. The briefing must show the
safety benefit achieved compared to the burden imposed on licensees and
staff is justified before the generic communication is allowed to
proceed through a defined review process. Next, the Committee to Review
Generic Requirements (CRGR) conducts a structured review of all
proposed generic letters and bulletins in accordance with an
established process intended to assure there is ``value-added'' from
the particular communication. At this stage, the office of General
Counsel reviews the document and if requested it is forwarded to the
Advisory Committee on Reactor Safeguards (ACRS).
Public comments on the draft generic letter or bulletin are sought
through Federal Register Notice. The Commission also reviews
significant final communications before issuance. (See the response to
question No: 61 for the various types of NRC communications).
Question 14. (B) How have you applied the backfit rule to these
communications?
Response. Generic letters and bulletins only request actions and do
not impose requirements. Licensees have the option to propose alternate
actions or take no action with appropriate justification. The backfit
rule (10 CFR 50.109) does not strictly apply until the point at which a
backfit is required by rule or order. However, new generic positions in
documents such as bulletins, generic letters and regulatory guides are
internally reviewed as potential backfits to ensure that they meet the
standards of the backfit rule before they are issued.
In the course of preparing bulletins and generic letters, as
described in the answer to question in 14a, NRC staff must prepare a
package for CRGR review that provides, in part, the regulatory basis
for a proposed staff position, and the rationale for it being an
adequate protection or compliance backfit pursuant to 10 CFR
50.109(a)(4), rather than a backfit pursuant to 10 CFR 50.109(a)(2).
Furthermore, the bulletin or generic letter itself must contain a
backfit discussion which provides the rationale for the NRC staff
finding. The CRGR reviews all draft bulletins and generic letters to
ensure that the regulatory basis for the proposed staff position is
appropriate, and in conformance with the standards of the backfit rule.
If the CRGR finds that a proposed staff position involves a backfit
pursuant to 10 CFR 50.109(a)(2), the CRGR will recommend to the
Executive Director for Operations disapproval of the proposed staff
position. Further effort on the bulletin or generic letter will cease,
pending referral of the matter to the Office of Nuclear Regulatory
Research to conduct a backfit analysis pursuant to 10 CFR 50.109(c), in
accordance with the directives and guidance of NUREG/BR-0058 and NUREG/
BR-0184.
Question 15. How will you avoid your staff pressuring licensees
``into actions in excess of regulatory requirements''? (page 9) What
sanctions will you put in place? What recourse method will you provide
utilities to challenge staff pressure? Will you set up a ``licensee
concerns'' program?
Response. The NRC implements numerous actions to train its staff as
to expected professional performance, including the area of
inappropriate staff pressure. Standards for staff professionalism and
behavior are addressed in the ``NRC Principles of Good Regulations''
and in the NRC technical staff performance expectations issued to each
employee. These requirements are reinforced by senior NRC managers in
the course ``Fundamentals of Inspection'' and related refresher courses
and in resident counterpart meetings, workshops, and training courses.
Additionally, the NRC actively solicits feedback from licensees to
promptly identify and resolve any improper staff actions. In July 1995
the Commission issued a policy statement to establish clearly its
expectation for the NRC staff and licensees to have open and
professional communication at all organizational levels. In the policy,
the Commission also encouraged licensees to raise issues regarding
inappropriate regulatory action by a member of the NRC staff.
Licensees can informally discuss any concern directly with their
counterpart in the regional office or in NRR at any time. As noted in
response to questions No. 9 and No. 12, licensees have several
processes available to them to raise concerns and seek recourse,
including concerns regarding staff pressure. Licensees can report
concerns to NRC management during periodic site visits. Inspection
Manual Chapter (IMC) 0102, ``Oversight and Objectivity of inspectors
and Examiners at Reactor Facilities'' requires NRC management to make
periodic site visits to solicit feedback from their licensee
counterparts regarding implementation of the NRC regulatory programs at
their facility. Concerns raised by licensees during IMC 0102 visits are
promptly addressed and subsequently evaluated annually with the results
reported to the Commission. Additionally, each region has a formal
process to evaluate and resolve licensees' complaints of inappropriate
regulatory action by NRC employees. The procedures require a
determination of whether the issue should be pursued by the Office of
the Inspector General (OIG) or the region. For issues reviewed by the
region, the regional administrator approves a course of action
including any specific remedial actions. If the issue is referred to
the OIG, the matter is handled in accordance with Management Directive
7.4, ``Reporting Suspected Wrongdoing and Processing OIG Referrals.''
Finally, in July 1995, a formal process was established for senior
power reactor licensee officials to report perceived inappropriate
regulatory action directly to the Office of the EDO. Regarding
sanctions, if an issue is substantiated, agency management develops a
plan, including a schedule for implementation, to execute remedial
actions; communicates the findings and concerns to the employee; and
initiates a corrective action plan, which depending upon the severity
of the issue, could include personnel action.
Question 16. You state that the NRC is adopting a risk-informed,
performance-based approach to rulemaking (page 5) and you cite two
examples: (1) Appendix J. Option B and (2) the Maintenance Rule. What
other regulations have been modified or do these ``examples'' represent
all that has been accomplished so far?
Response. The Commission has worked, and is continuing to work, to
achieve an appropriate balance between deterministic and risk-informed
regulations and between prescriptive and performance-based regulations.
The two rulemakings were cited as examples of performance-based
regulatory initiatives. In fact, in several rulemakings that have been
conducted over the past few years, the Commission has considered and
taken a risk-informed and/or performance-based approach when making
rule changes. In the reactor area, requirements associated with
anticipated transients without scram events (10 CFR 50.62), loss of
alternating current electric power (10 CFR 50.63), technical
specifications (10 CFR 50/36), and changes to the required frequency of
FSAR updates (10 CFR 50.71), appropriately incorporated risk-informed,
performance-based concepts.
NRC's existing HLW and LLW disposal regulations, 10 CFR 60 and 10
CFR 61 respectively, are both risk-informed and performance based.
Recent revisions to 10 CFR Parts 34, ``Licenses for Industrial
Radiography and Radiation Safety Requirements for Industrial
Radiographic Operations,'' and 36, ``Licenses and Radiation Safety
Requirements for Irradiators,'' were developed using risk information.
The revision to Part 34 incorporates a number of changes that provide
greater flexibility to radiographers in a number of performance review
areas. In addition the Commission, in revising 10 CFR Part 35,
``Medical Use of Byproduct Material,'' is restructuring it into a risk-
informed, more performance-based regulation. Modifications to Part 39,
``Licenses and Radiation Safety Requirements for Well Logging,'' using
risk information are currently ongoing to address newer technology.
There have been several revisions to 10 CFR Part 20, ``Standards for
Protection against Radiation,'' which are risk-informed and performance
based. These include revision to the doses received from individuals
administered radioactive material and released in accordance with
35.75, revision of the monitoring criteria for declared pregnant
workers and minors, and radiological criteria for release of sites for
restricted or unrestricted use.
The staff is developing new regulations specific to Yucca Mountain
for disposal of high level waste in a geologic repository using a risk-
informed, performance-based approach. The staff is revising 10 CFR Part
70, ``Domestic Licensing of Special Nuclear Material'' to make it move
risk-informed and less prescriptive based on risk insights gained from
regulating these types of facilities for several decades.
The staff is revising 10 CFR Part 72, ``Licensing Requirements for
the Independent Storage of Spent Nuclear Fuel and High-Level
Radioactive Waste,'' to use a risk-informed approach regarding the
seismic criteria for siting independent spent fuel storage
installations. The staff is also revising 10 CFR 50.59 and 72.48
concerning the processes controlling licensee changes, tests, and
experiments to take a more risk-informed approach.
The NRC worked with the Department of Transportation to provide
procedures under new regulations that enable the shipment of
decommissioned reactor steam generators to a disposal facility, without
undergoing a specific steam generator transportation certification
process. Moreover, the staff is taking into account risk information in
its assessment regarding the technical adequacy of shipping the Trojan
reactor vessel intact with its internals.
As other regulations are revised or developed, the staff has been
directed to consider whether a risk-informed and/or performance-based
approach can be adopted.
Question 17. With respect to enforcement, you state (page 7) that
the increase in non-escalated violations stems from a concerted effort
to improve consistency across the agency. Striving for consistency in a
process that is inconsistent with industry performance does not appear
to be a good use of NRC resources. What other remedies are you
contemplating to fix this problem?
Response. The NRC has taken several short-term actions to address
the non-escalated enforcement process and ensure that enforcement
related activities are based upon safety significance. The proposed
changes are also expected to reduce the licensee burden in this area.
The efforts underway (some of which merely involve exercising self-
discipline in carrying out existing NRC policy) include: (1) ensuring
that the NRC staff gives credit for licensee actions both in
identifying and correcting violations in deciding whether to cite a
low-level violation; (2) not requiring a written response when low-
level violations are issued and corrective actions are addressed
sufficiently in writing elsewhere on the docket (e.g., in a Licensee
Event Report); (3) providing more consistent treatment when multiple
violations are identified with a common root cause; and (4) clarifying
NRC staff guidance for the treatment of violations identified as the
result of licensee corrective actions. In short, the intent is to
simplify the disposition of these types of violations. The NRC's Office
of Enforcement issued enforcement guidance memorandum (EGM 98-006) on
these issues on July 27, 1998, and subsequently provided training to
key staff.
In addition, as part of ongoing efforts, such as the NRC
enforcement policy revision and request for public comment issued in
May 1998, the NRC will seek to identify other measures to improve
consistency and to ensure a safety focus in documenting and
dispositioning violations.
The NRC held a public meeting with stakeholders on September 3,
1998, to solicit input on possible enforcement policy revisions. A
revision of non-escalated enforcement policy is expected to be
presented to the Commission in October for their approval. The NRC
staff is expected to develop additional guidance on regulatory
significance by late Fall of this year and thresholds for low-level and
minor violations at the end of this year. The NRC staff plans on
developing risk-informed examples for inclusion in the supplements of
the enforcement policy in the Spring of 1999. The NRC staff also
expects a proposal from NEI for changes in escalated enforcement policy
and will review that proposal and report to the Commission in the
Spring of 1999.
Question 18. On page A-20, you state the number of NRC inspection
hours per plant has been reduced from 3100 in 1990 to 2500 in 1997.
This is a decrease of about 20 percent. However, the number of FTEs
devoted to reactor safety was 1480 in 1990 and 1499 in 1997, an
increase of 1 percent. Please explain where these reduced inspection
hours went? Why didn't the total number of FTEs decrease in response to
reduced inspection activity?
Response. The Reactor Safety and Safeguards level of effort of 1480
FTE (fiscal year 1990), referred to in the question, reflects the
office of Nuclear Reactor Regulation (NRR) and Regional effort in
support of the Nuclear Reactor Safety Program. The NRC Budget for that
year was developed organizationally, whereas the fiscal year 1997
budget was developed programmatically. Therefore, the FTE level of 1499
in fiscal year 1997 includes not only NRR and Regional support efforts,
but also 5 additional NRC offices contributing to the Nuclear Reactor
Safety Program. In fiscal year 1997, the FTE associated with just NRR
and Regional effort is 1187 FTE, which when compared to 1480 FTE in
fiscal year 1990 represents approximately a 20 percent reduction and is
consistent with the reduction in the inspection hours.
Question 19. On page 7, you should state that the agency intends to
improve guidance on factoring risk into enforcement decisions. Is it
true that the current enforcement policy only allows risk insights to
increase civil penalties, but can't be used to decrease the severity
level of a violation? If so, how can this ``one-way'' approach be truly
risk-informed?
Response. It is not true that the enforcement policy does not allow
risk insights to decrease the severity level of a violation. The
enforcement policy states that the first step of the enforcement
process is to evaluate the relative importance of each violation,
including both the technical and regulatory significance (e.g.,
repetition, willfulness, pervasiveness). The enforcement policy was
revised on December 10, 1996, to clarify that technical significance
includes both actual and potential consequences and that risk is an
appropriate consideration in evaluating the technical significance of a
violation. The Statements of Consideration stated:
In analyzing risk, the NRC recognizes the uncertainties associated
with risk assessment. Generally, qualitative rather than
quantitative risk assessments are made given the number of
variables associated with risk assessment. Risk should be a
consideration in proposing enforcement actions, but not necessarily
determinatative. In developing higher civil penalties, the
Commission intends to consider, where appropriate, assessing
separate civil penalties for each violation that is aggregated into
a Severity Level II problem.
The staff issued additional guidance on risk considerations in
enforcement actions in an enforcement guidance memorandum (EGM 97-011),
dated June 6, 1997. The guidance states that risk is a relevant
consideration in enforcement decisions concerning severity levels,
appropriateness of sanctions, and the exercising of enforcement
discretion. It also stated that the staff should continue to balance
risk information against the guidance currently provided in the
enforcement policy and the enforcement policy supplements. Judgment
must be exercised in the use of risk significance as a factor in
decisions regarding the appropriateness of the sanction. While there
may be cases where, due to increased risk significance, it is
appropriate to escalate both the severity level and the sanction in
order to convey the correct regulatory message to the licensee and the
use of enforcement discretion may be warranted to reach the proper
enforcement action, it may also be appropriate to reduce levels of
enforcement due to low risk significance. This guidance document did
not address this aspect of using risk information and the staff is
currently revising its enforcement manual to make this clear.
While a higher severity level and sanction may be warranted for
violations that have greater risk significance, it may be appropriate
to consider a lower severity level or enforcement action for issues
that have low risk significance. As stated before, risk is only one
component in the consideration of the appropriate severity level.
Severity level considers actual consequence, potential consequence
(risk), and regulatory significance. Therefore, a violation with little
or no actual safety consequence and lower risk significance may still
pose a significant regulatory concern and warrant a higher severity
level and/or sanction. In deciding whether a violation should be
categorized at Severity Level III or IV, risk significance is
considered. In some cases, the matter may be so minor, it need not be
cited. Low risk does not excuse noncompliance. If a licensee believes
an issue is of low risk and not worthy of being a requirement, the
licensee may seek a change to the requirement. However, compliance is
required until the requirement is.
Finally, it is important to recognize that risk insights have an
opportunity to influence agency action from the point of identification
in the inspection process through the point of disposition in the
enforcement process. As more risk-informed and performance-based
approaches are applied to the agency's regulatory process and
inspection activities, these approaches will be inherently factored
into the enforcement process.
Question 20. We understand that the enforcement policy was removed
from the regulations and is now a Commission Policy Statement. Given
that it is no longer burdened with the constraints of your rulemaking
process, why will it take you 6 months to revise your own policy that
is within your control to change?
Response. First, as a point of clarification, from October 7, 1980,
when the NRC enforcement policy was first published and codified in the
Code of Federal Regulations (CFR) at 10 CFR Part 2, Appendix C, up
until June 30, 1995, when it was removed, the Commission maintained
that the enforcement policy was a policy statement and not a
regulation. The enforcement policy was included in the Code of Federal
Regulations to provide widespread dissemination. The enforcement policy
was removed from the regulations in 1995 (60 FR 34380) after concerns
were raised that it could inadvertently be considered as a regulation
instead of a policy statement. The enforcement policy was subsequently
published as NUREG-1600 to ensure continuing widespread dissemination.
It is true that as a policy statement, the Commission has more
flexibility in revising its enforcement procedures than if it were a
regulation. However, the Commission recognizes the importance of this
policy statement and judiciously revises it after appropriate analysis
and consideration. More than ever, the Commission recognizes the need
to solicit input from its stakeholders to ensure meaningful outputs and
outcomes from any proposed policy revisions. The agency staff met with
its stakeholders to discuss its enforcement policy, with an emphasis on
non-escalated enforcement, on September 3, 1998. The Commission intends
to move forward as expeditiously as possible in making appropriate
revisions to its enforcement policy as described in response to
Question 17 and in providing training to its staff.
Question 21. On page 11, you note that the proposed fiscal year
1999 appropriations level will reduce your budget request by at least
$17.8 million, causing you to curtail inspection and reactor oversight
programs, curtail safety research and substantially reduce many support
activities. Given that $17.8 million is only 3.5 percent of your
requested budget, please explain why this small reduction would have
such a dramatic impact on these programs. Why can't this small
reduction be absorbed by eliminating low value programs and activities?
Response. A reduction of $17.8 million represents a challenging
reduction for the agency to absorb. The NRC budget has been declining
over the past several years. As measured in constant fiscal year 1993
dollars, the NRC budget has been reduced over 20 percent through fiscal
year 1998, from $540 million to $422 million. The $17.8 million
reduction is amplified by the need to absorb a higher than budgeted
Federal pay raise, unbudgeted costs in carrying out personnel
reductions, and Commission decisions since the budget was submitted to
add resources in areas such as control of orphan sources, speeding
licensing reviews, development of a recycle rule, dry cask storage
reviews, preparation for an AVLIS enrichment plant application, etc.
The NRC budget has little flexibility, and reductions in funding result
in program and support activities being deferred. Reductions were
indeed focused on lower priority activities.
answer of commissioner diaz
In my view the NRC can improve its processes to ensure that no
reduction in adequate protection of public health and safety results if
these reductions are effected. Even with the contemplated reduction,
planned programmatic changes and improved processes can still assure
adequate protection.
Question 22. (A) On page A-15, you state that the Commission has
approved the development of guidelines for applying Safety Goals and
their subsidiary objectives in plant-specific regulatory activities.
When will the safety goal policy be applied to the regulations on a
generic basis?
Response. The Commission's Safety Goal Policy Statement was issued
in 1986. As indicated therein, and in the Commission's June 15, 1990
Staff requirements Memorandum, the original intended use was for
examination of regulations and other generic matters, and not for
making plant-specific decisions. The staff presently does apply safety
goal considerations in the regulatory analyses conducted on all
proposed reactor rulemakings or generic requirements. This requirement
is documented in NUREG/BR-0058, Rev. 2, ``Regulatory Analysis
Guidelines of the U.S. Nuclear Regulatory Commission'' issued in
November 1995. However, many of the Commission's regulations were in
place prior to issuance of the Safety Goal Policy and, therefore, were
not assessed in light of that policy. Accordingly, the NRC is currently
considering options for reviewing all reactor regulations with respect
to their safety significance (considering factors such as the Safety
Goal Policy) and will decide in the near future on a course of action.
Question 22. (B) Why is this activity limited to just plant-
specific regulatory actions and not the regulations themselves?
Response. The Commission's Regulatory Analysis Guidelines already
require consideration of Safety Goals in imposing new generic
requirements, including changes in regulations. The development of new
guidelines referenced on page A-15 refers to extending the existing
policy on a plant-specific basis. As discussed in the response to
Question 22(A), the Commission is considering options for assessing all
reactor regulations with respect to their safety significance.
Question 23. (A) In your oral testimony, you stated that you have
asked the industry to submit rulemaking petitions to make reactor
regulations risk-informed. Why, when the NRC is responsible under the
Atomic Energy Act for promulgating requirements to establish adequate
protection, do you think this is the industry's responsibility?
Response. The NRC is responsible for promulgating requirements for
adequate protection, and the existing requirements are sufficient for
this purpose. The NRC does not rely on rulemaking petitions to initiate
rulemaking. However, we operate in an open forum and always encourage
public, including industry, input to our processes. From the
perspective of nuclear safety, it is vital that licensees of nuclear
power plants play a large and integral role in the development of
safety requirements because licensees have prime responsibility for
ensuring the safe design, construction and operation of their
facilities. From the perspective of regulatory policy, it is vital that
the NRC seek the views of all stakeholders that will be affected by new
requirements. One consequence of not doing this in an effective way
with respect to the nuclear industry can include a drawn out rulemaking
process due to a protracted dialogue over numerous technical and
process issues or resultant requirements that are overly prescriptive
and burdensome. Lessons learned from previous rulemaking activities
indicate that soliciting rulemaking petitions from our stakeholders
provides an important opportunity to consider and understand stake-
holder priorities and help ensure the efficient use of both industry
and NRC resources.
Question 23. (B) What effort is underway within the NRC to identify
regulations that can be made risk-informed and changed by the agency?
Response. The agency is currently in the process of revising the
event reporting requirements for nuclear power reactors contained in 10
CFR 50.72 and 50.73 (1) to reduce or eliminate the reporting burden
associated with events of little or no safety significance, and (2) to
better align the rules with the NRC's current needs, including (a)
revising reporting requirements based on importance to risk and (b)
extending the required reporting times consistent with the need for
prompt NRC action. The NRC has requested public, including industry,
comments on these rules and any other reporting requirements that can
be risk-informed or simplified. An advance notice of proposed
rulemaking was published in the Federal Register on July 23, 1998. A
public meeting on the subject was held on August 21, 1998. The proposed
rule is scheduled to be published on April 2, 1999, and the final rule
is scheduled to be published on January 7, 2000.
In addition, we have initiated rulemaking to revise rules on source
terms; maintenance; and changes, tests, and experiments (10 CFR 50.59).
We also plan to institute an interoffice review which will take a
fresh look at items including the NRC regulations, and will also
consider the results from the NEI Whole Plant Pilot initiative and
recommendations from the Center for Strategic and International Studies
project to assess the NRC's efforts to improve its reactor regulatory
process. The staff is preparing an options paper for Commission
decision on modifying Part 50 to be risk-informed.
Question 24. (A) On page A-16, you state that each of the pilot
risk applications (inservice inspection, inservice testing, graded QA
and technical specifications) have proven successful at specific power
reactor licensees. As of the date of the hearing, how many plants in
each area have received approval by the NRC to apply the approach?
Response. One plant (the South Texas Project, the pilot plant) has
received approval for their graded QA program, and four plants (San
Onofre Nuclear Generating Station, the South Texas Project,
Fitzpatrick, and Fermi 2) have received risk-informed technical
specifications amendments. In addition, the Commanche Peak inservice
testing pilot review has been completed since the hearing date. Several
pilot applications for risk-informed inservice inspection are in an
advanced state of review and are scheduled for completion by January
1999.
Question 24. (B) What is your measure of ``success''?
Response. The NRC considers the pilot activities to be successful
when they resolve significant technical and process issues that would
otherwise be an issue in the review of each subsequent plant specific
submittals. Pilot reviews provide licensees with ``up front'' guidance
for planning and preparing proposals to the NRC and allow the NRC an
opportunity to improve the efficiency of its review procedures. Pilot
activities are considered to be complete when the NRC takes a formal
action with respect to the pilot proposal such as issuance of a license
amendment, promulgation of a new or revised requirement, or acceptance
of a program or process via completion of an inspection. The ultimate
success of the pilot activities will be measured by how the industry
and NRC apply lessons learned to improve the regulatory processes, to
reduce unnecessary burden and review time for future risk-informed
submittals, and to proceed more rapidly toward more risk-informed,
performance-based regulatory approaches.
Question 24. (C) Does the industry agree that these pilot
applications were successful?
Response. Several industry representatives have expressed
dissatisfaction publicly with aspects of the pilot applications.
Industry concerns have, in general, been associated with the extended
duration, the level of detailed information, and the resources
necessary to support the pilot activities. One licensee, after
completing a graded quality assurance pilot application, expressed
concerns that they were unable to realize the expected implementation
benefits, in part, because of other regulatory requirements. The NRC
will continue to solicit feedback of the effectiveness of both our
pilot activities and our transition to more risk-informed and
performance-based approaches. While we recognize the industry
dissatisfaction with some of the pilot activities, we continue to
believe that the ultimate success of the pilot activities will be
measured by how the industry and NRC apply lessons learned to improve
the regulatory processes, to reduce unnecessary burden and review time
for future risk-informed submittals, and to proceed more rapidly toward
more risk-informed, performance-based regulatory approaches.
Question 25. (A) Why did the pilot risk applications take 4 to 6
years to complete when no rulemaking activity was required?
Response. Although the pilot activities did not culminate in
promulgation of requirements, they have been linked with the
development of new NRC procedures and policies, and industry guidance
documents which required resolution of a number of complex and
difficult technical issues applicable to all risk-informed licensing
reviews. The most significant issues include: (1) developing a risk-
informed framework and acceptance guidelines that could be applied in
plant specific licensing decisions, including the pilot applications;
(2) defining and articulating the scope and quality of a PRA being used
to support a licensing proposal; and (3) developing a practical
approach to address uncertainty in PRAs. The process for resolving
these issues included the development of candidate resolutions through
recommendations by the NRC staff, review and consideration of the
various options by the Commission and its independent advisory groups,
and review and comment by the public. As regulatory positions were
being established through this process, licensees were asked to
supplement their original pilot risk proposals with information to
address these positions. Although this process has been time consuming,
and at times inefficient, the NRC staff believes that it was necessary
to ensure a coherent and predictable process for conducting licensing
reviews that satisfy all of the objectives of the Commission's policy
statement on the use of PRA (i.e., to enhance the process for making
safety decisions, to make more efficient use of agency resources, and
to remove unnecessary burdens on licensees).
Clearly, future reviews of risk-informed licensing actions will
have to be more timely than the pilot applications were. The NRC has
committed to several actions to expedite the review process by
increasing the priority for risk-informed licensing action reviews.
Allocation of staff resources will be based on potential safety
benefits of the action, and on potential savings of staff and licensee
resources. In addition, a lead project manager (PM) for the
coordination of risk-informed, performance-based licensing actions has
been identified. This lead PM will identify, monitor, and coordinate
risk-informed licensing actions; keep track of the review schedules;
help identify problems that may require management attention; and
coordinate followup actions (if any). Also, the management oversight
steering committee on PRA has been reestablished to provide policy,
technical, and priority guidance on risk-informed regulation; the
committee consists of the NRC Office Directors from the Office of
Nuclear Reactor Regulation, the Office of Nuclear Regulatory Research,
the Office of Analysis and Evaluation of Operational Data, and the
Office of Nuclear Material Safety and Safeguards. Finally, a risk-
informed licensing panel is assisting in focusing management attention,
as necessary, on risk-informed licensing actions.
Question 25. (B) What incentives are there for the industry to
propose risk-informed changes to the regulations themselves given this
track record?
Response. NRC discussions with the industry indicate that the
industry sees risk-informed initiatives as a viable approach to
reducing costs and regulatory burdens while maintaining or even
improving safety. The Commission's PRA Policy Statement, staff
training, and activities to develop guidance on using risk-informed
approaches have all served to make the increased use of risk
information in the regulatory process a reality. In addition, the
management oversight steering committee on PRA will help ensure a more
disciplined, timely process by providing policy, technical, and
priority guidance on risk-informed regulation. The NRC is now in a
position to work efficiently and effectively with the industry to
approve risk-informed applications which enhance or maintain safety
while reducing unnecessary regulatory burden.
Question 26. On page A-18, you state that the NRC has revised
guidance for reactor inspection activities to incorporate risk insights
and to be more performance-based. When were these improvements
promulgated? What results have you seen?
Response. Inspection Manual Chapter 2515 ``Light Water Reactor
Inspection Program Operations Phase'' Appendix C ``Use of Insights
Derived from Probabilistic Risk Assessment (PRA)'' was revised and
reissued in September 1997 as improved implementation guidance for
inspectors. More than 2 years prior, when it was first determined that
new inspector guidance was needed, it was also determined that this
guidance alone would not be sufficient to effect a significant change
in the way the inspection program was conducted. Therefore, the
approach taken was four-pronged: 1) revise the inspection manual
guidance, 2) expand the application-oriented PRA training designed
specifically for the inspector (2 weeks in length), 3) train and
qualify ten experienced inspectors (Senior Reactor Analysts) in
advanced PRA techniques and locate two SRAs in each regional office and
two at headquarters, and 4) require a 3-day PRA training course
directed toward all NRC technical managers and supervisors. To date, 1)
inspection guidance has been issued, 2) inspector training commenced in
January 1998, and with one class scheduled each quarter we are on track
to have at least one resident inspector so trained at each reactor site
by the end of fiscal year 1998, 3) all SRA positions have been filled
and only two SRAs remain in training, and 4) training for two-thirds of
the managers and supervisors is expected to be complete by the end of
fiscal year 1998 with the remainder complete by the end of fiscal year
1999 Insufficient time has passed to directly measure results from
these efforts in the day-to-day conduct of the inspection program. Our
expectation is that as more people are trained, the published
implementation guidance will be more effectively implemented.
Furthermore, we are currently planning to restructure the inspection
program on a more risk-informed basis in 1999 to more quickly achieve a
risk-informed focus of our inspections.
However, results to date have been achieved predominantly through
the activities of the SRAs. These individuals are actively involved in
regional assessments of the significance of operating events and
proposed enforcement actions, in providing plant-specific risk insights
during the various integrated performance review processes, in
providing advice and expertise to assist other regional inspectors with
inspection planning and, when necessary, leading inspection teams.
Question 27. On page A-19, you state that core inspections are
performed at all sites, independent of licensee safety performance.
What considerations have you given to reducing core inspections for
plants with good performance by relying more on self-assessments and
audits performed by these licensees?
Response. The core inspection program is the minimum inspection
effort that is performed at a site to confirm licensee performance and
identify potential problems in the early stages. When an event or issue
requires additional inspection to the core inspection program, regional
initiative inspection is performed in those functional areas where
licensee performance has been rated as not meeting Systematic
Assessment of Licensee Performance (SALP) of 1 (the highest rating for
a good performing licensee). Regional management may recognize a
licensee's good performance and self-assessment capability by reducing
the scope of NRC inspection effort for regional initiatives. Since the
core program is the minimum inspection effort performed by NRC at good
performing licensees, reduction of inspection effort for licensee self-
assessment for the core is not currently allowed. Recently, the NRC
formed a task force to redefine the core inspection program, with the
goal of making it more effective, efficient, and risk-informed. This
effort is being conducted together with a similar effort regarding the
NRC's plant performance assessment process. Both of these efforts will
define what plant performance indicators are important from a risk
perspective and where such performance data can be obtained.
Performance indicators and/or licensee self-assessment data will be
used in determining the level of NRC inspection activity.
Question 28. (A) On page A-20, you state that there was an ``across
the industry'' decline in attention to maintaining the facility design
basis. If this is so, why did you stop your A/E inspections?
Response. In 1997 and 1998 the NRC performed A/E inspections at 20
facilities. These facilities were selected for inspection based upon
several factors including the age of the facility, probabilistic
insights, problem plant status, performance in the engineering area,
and the licensee response to the agency's 50.54(f) letter on adequacy
and availability of design bases information. This letter had been sent
in October 1996 to all plants after design basis issues had arisen at
Millstone, Maine Yankee, Haddem Neck and Crystal River. Selections were
also made to assess engineering at plants where Regions had concerns
regarding engineering performance. Based on the selection process, 20
facilities were selected where NRC had potential concerns about design
basis issues. From these 20 inspections, the NRC gained a general
understanding of the extent and safety significance of design basis
issues across the industry. This was documented for the initial 16
inspections in Information Notice 98-22, ``Deficiencies Identified
During NRC Design Inspections.'' The inspections were stopped because
the program had fulfilled its objectives of (1) ensuring the safety of
those facilities where design basis issues were of potential concern
and (2) providing the NRC generic information from which decisions
could be made on the need for future regulatory action in this area and
because the body of the results from the A/E inspections did not
establish an across-the-industry decline in attention to, or
maintenance of, the facility design basis. The NRC does recognize that
the lack of completeness and availability of design basis information
is not necessarily equivalent to design safety issues.
While the resource-intensive A/E inspections were terminated, the
NRC plans to continue inspections of design basis issues as resources
permit at other plants identified by NRC reviews of licensee responses
to the October 1996 50.54(f) letter. While the 20 A/E inspections
addressed the highest priority plants, the remaining design basis
inspections will utilize a less intrusive inspection procedure, IP
93809, ``Safety System Engineering Inspection,'' which was developed in
response to the design bases concerns. Since the mid 1980's, the NRC
has conducted various types of safety system design basis inspections
such as Safety System Functional Inspections, Electrical Distribution
System Functional Inspections, and Service Water System Operational
Performance Inspections. These inspections have focused on the adequacy
of safety system designs and conformance of the facility with the
design basis. The A/E inspections were not a new concept but
represented a short time increase in focus of the design area.
chairman jackson's additional statement
I support the staff view that there had been a general decline in
attention to facility design and licensing bases. As a result of the A/
E inspections and licensees' responses to the 10 CFR 50.54(f) letter,
licensees appeared to have appropriately focused attention on
maintaining facility design bases. Therefore, the A/E inspections
accomplished their objectives, and were replaced by a less intrusive
inspection: ``Safety System Engineering Inspection.''
Question 28. (B) What was the safety significance of this lack of
attention at a typical facility? If the safety significance of design
basis deficiencies was low, what does this tell you about the safety
focus of your requirements?
Response. Of the initial 12 A/E inspections, one plant (D.C. Cook)
elected to shut down two operating units because of concerns identified
during the inspection. Four other plants (TMI, Perry, H. B. Robinson,
and Vermont Yankee) were issued Notices of Violation at a Severity
Level lilt These significant violations were issued because of the lack
of assurance that safety systems were able to perform their intended
functions under certain conditions. For more recent A/E inspections,
there have been some inspection findings that appear to represent
similar inadequacies relative to the ability of systems to perform
their intended safety functions. These findings are currently being
evaluated in accordance with the enforcement process. For some recent
inspections licensees have self-identified equally significant problems
on their own prior to the inspection. These A/E inspections showed that
the industry, with the noted exceptions, did not have serious safety
problems as a result of design-basis issues. While the inspections did
identify the need for additional definition, documentation and
compliance, adequate protection of public health and safety was not
compromised. Given these findings, the NRC staff believes the safety
focus of our requirements was appropriate.
chairman jackson's additional statement
While it is true that the majority of A/E team inspections did not
identify significant safety problems at the facilities inspected, the
significance of the errors identified at D.C. Cook, Three Mile Island,
H.B. Robinson, Perry, and Vermont Yankee indicate the importance of
maintaining design basis information, and the configuration of a given
facility, up-to-date and accurate. Further, the results of the A/E team
inspections relate only to the specific population of facilities
inspected, not the industry as a whole. Significant design basis issues
have been identified, both by NRC and licensees, outside of the A/E
team inspection process. Examples include design and licensing basis
issues at Crystal River 3, Millstone, Haddam Neck, and Maine Yankee.
Question 29. In response to an oral question regarding the Tim
Martin Associates study, you indicated that comparisons between NRC
staffing levels per reactor to levels for other countries could not be
made because other countries use manpower from external sources to
augment their program. Your fiscal year 1999 budget estimate shows that
40 percent of your budget is for contractor support.
(B) Do you plan to conduct any studies of foreign regulatory
programs to determine how consistent your ratios are with theirs? If
not, why not?
Response. The unavailability of, and disparities in, data
concerning key elements of foreign regulatory processes make it
extremely challenging to develop reliable information which would yield
practical insights for assessing whether NRC's regulatory approach
requires disproportionate resources compared to foreign countries.
However, we are in the process of trying to develop a comparison and
will provide it to the Committee.
Question 29a. In response to an oral question regarding the Tim
Martin Associates study, you indicated that comparisons between NRC
staffing levels per reactor to levels for other countries could not be
made because other countries use manpower from external sources to
augment their program. Your fiscal year 1999 budget estimate shows that
40 percent of your budget is for contractor support. How many
contractor FTEs are included in this amount?
Response. The NRC uses contractor support in areas where it is
economically beneficial. This includes using contractors to provide
expertise where it does not exist within the NRC and would not be cost
beneficial to hire staff with the expertise. These services procured
through contracts include areas such as administrative support,
information technology systems support, and technical and scientific
analysis. It is estimated that in fiscal year 1999, the NRC budget
would support approximately 850-900 contractor employees. This reflects
the number of people performing work supported by NRC's contractor
support funding. This figure should be viewed as an estimate of the
level of effort involved with NRC activities at any one time, although
there is considerable movement within the mix of activities and
individuals. Civil servant staffing levels are estimated across the
government as full-time equivalents (FTE) based on a standard
calculation of available hours to be worked. It cannot be assumed that
an agency's FTE level represents the number of people on the payroll at
any time.
Question 30. What steps does the Commission intend to take to
ensure that licensing proceedings, like the license transfer proceeding
associated with the sale of TMI Unit 1, remain focused only on issues
directly pertinent to the subject of the proceeding (e.g., in the case
of the TMI Unit 1 sale, the technical and financial qualifications of
the prospective owner/operator)?
Response. The Commission has been engaged in an ongoing process to
streamline licensing proceedings including those associated with
license transfers. In connection with license transfers, the
Commission's regulations require consideration of the technical and
financial qualifications of the proposed transferee to the extent
appropriate to the authority being sought in the transfer application;
a review of antitrust matters may also be needed. Among the more
important matters, the staff reviews the financial qualifications and
decommissioning funding assurance provisions made by the proposed
transferee. In this regard, a Standard Review Plan (SRP) on Power
Reactor Licensee Financial Qualifications and Decommissioning Funding
Assurance reviews, now before the Commission, provides a plan of action
for how the NRC staff will evaluate, among other areas, license
transfer requests under 10 CFR 50.80, with focus on the issues of (1)
transferee's financial qualifications and (2) methods by which the
transferee will provide decommissioning funding assurance acceptable to
the NRC. By adhering to the SRP, the staff's review should remain
focused on issues directly pertinent to the evaluation of the technical
and financial qualifications of the prospective owner/operator.
The NRC has received and processed about 45 license transfer
requests over the past 5 years. Depending on the accuracy and
completeness of the transferee's application, the NRC staff has
typically completed its review of the financial qualifications and
decommissioning funding assurance aspects of the proposed transfer
within 2 months of receipt of the application. With environmental
assessment notices and preparation and execution of orders approving
the transfer, the total approval process typically takes about 3
months. However, atypical applications may take longer, particularly if
unusual issues of antitrust or foreign ownership, domination, or
control are involved. There is also the possibility that a hearing
request filed by an intervener could extend the overall process,
although the Commission, in 15392, determined a hearing need not be
held prior to action on the transfer application itself once the staff
has otherwise completed its review of the application.
The SRP also generally addresses reviews required under the Atomic
Energy Act of 1954, as amended (AEA), to determine whether proposed
transferees are owned, dominated, or controlled by foreign entities.
However, because foreign ownership issues are case-specific and because
there remain difficult policy and legal issues that are contingent on
the specifics of each transfer application, the NRC intends to evaluate
this issue as specific transfer requests are submitted. The staff is
also preparing an SRP to address foreign ownership issues.
In addition, the NRC issued a final SRP on Antitrust Reviews in
December 1997, which contains a detailed description of the review
process of the antitrust concerns that the NRC is required to evaluate
under Section 105 of the AEA. In the NRC's license transfer reviews,
antitrust considerations have not been a significant issue.
Nevertheless, because of the requirements in the AEA for coordination
with the Department of Justice, the potential remains for an
uncontested ``significant change'' antitrust review to take 9 months or
more. An antitrust review contested by interveners may well take
longer. In the specific case of the TMI Unit 1 sale, the facility has a
license issued under Section 104b of the AEA, and is grandfathered from
antitrust reviews.
The NRC staff is also developing a plan of action and milestone
schedule for those future transfer requests that involve previously
unevaluated technical qualifications issues or which involve transfers
to non-owner operators.
Finally, on September 11, 1998, the Commission published in the
Federal Register for a 30-day comment period a proposed rule that would
establish new, informal procedures for license transfer hearings that,
if promulgated as a final rule, could, in general, substantially reduce
the time for such hearings. The Commission has also expressed its
support for legislation which would remove the Commission's role in
antitrust reviews (part of the President's electric utility
restructuring legislation) and for legislation which would repeal the
foreign ownership and control provisions of sections 103b and 104b of
the Atomic Energy Act for utilization facilities.
Question 31. The Federal Energy Regulatory Commission recently
completed a four month study to evaluate ways to streamline the
agency's activities to more effectively address the needs of the
industries it regulates. FERC announced that it will implement
improvements identified in the study including (1) bench marking FERC
activities; (2) promoting competitive markets through a pre-filing
process to reduce agency processing time; (3) implementing
collaborative pre-filing procedures to achieve earlier resolution of
issues and more timely decisions; and (4) establishing a structure for
gathering and considering proposals for policy changes. On their face,
these are innovative approaches some of which could be adopted by the
NRC.
(A) What actions will the NRC take to develop way to reduce
processing staff time, to engage in more collaborative activity with
the industry, and to implement more efficient methods to accomplish the
agency's regulatory mission?
Response. During a licensing workshop with the industry on July 20
and 21, 1998, the NRC staff discussed the possibility for using
collaborative pre-filing procedures to achieve earlier resolution of
issues and more timely decisions. The NRC staff has committed to work
further with the industry to evaluate means of implementing a number of
concepts discussed at the workshop to improve process efficiency. In
developing a collaborative pre-filing process, the NRC staff remains
sensitive to the need to ensure a process that is open and accessible
to the public.
In addition, the Commission encourages the industry to work
together to develop collaborative solutions to issues that affect large
groups of facilities. Such collaboration has been accomplished through
the Nuclear Energy Institute, the Electric Power Research Institute,
vendor owners' groups and other ad hoc organizations. Such
collaborative efforts on the part of industry have proven effective in
resolving significant issues while reducing resource allocations for
both the industry and the NRC staff.
The NRC has been interacting with its stakeholders through its
public meeting process, and has increased the frequency of its public
meetings with its stakeholders, including the industry. The NRC has
asked the Nuclear Energy Institute to provide proposed rulemakings in
areas believed by industry to be in need of regulatory reform and has
committed to give a high priority to these areas One example area where
there is priority attention given industry concerns is the acceleration
of the implementation of risk-informed and performance-based
regulation. Another is licensing and rulemaking of dual-purpose
cannisters for spent fuel.
The NRC is using its Strategic Assessment and Rebaselining process
as a basis for its self-assessment processes and for the implementation
of more efficient methods for accomplishing the agency's regulatory
mission. Reorganizations are being implemented which will streamline
the operation of the offices and realign and consolidate office
functions. The Operating Plans for each office are being used to
benchmark performance, and these are updated on a quarterly basis.
To reduce processing staff time, NMSS is using or developing
standard review plans (SRPs). Management is strengthening its oversight
of staffs implementation of these plans to ensure that issues are
pertinent and are not overly conservative. In addition to documenting
application deficiencies, NMSS is now meeting with applicants to ensure
that both parties have a clear understanding of what NMSS seeks. NMSS'
immediate goal is to have no more than two rounds of questions on an
application; NMSS' long term goal is to make guidance and SRPs
sufficiently clear that application submittals will be acceptable
without additional questions.
NMSS is already engaged in collaborative activity with industry and
with the Department of Energy. For example, NMSS has involved industry
representatives and NEI in the development of the new medical rule, 10
CFR Part 35, and in the revision to the fuel cycle facilities rule, 10
CFR Part 70. In the waste management area, NMSS meets extensively with
licensees, other Federal agencies, and the public. More specifically,
NMSS has worked extensively with DOE for more than a decade to ensure
that both agencies have a common understanding of the requirements and
information being developed for licensing a high-level waste
repository.
NMSS is actively implementing more efficient methods to accomplish
the agency's regulatory mission through activities such as continued
expansion of the electronic process for material license application
submittal, review, and evaluation; and consolidation and updating of
guidance documents. As mentioned above, NMSS is increasing the use of
meetings with licensees and applicants to supplement written
communications. Experience is showing that these meetings significantly
increase the efficiency of NMSS interactions with the licensee
community.
The Commission has moved to streamline the adjudicatory process,
while still ensuring that a fair hearing is conducted and a clear and
complete record is created. The Commission has commenced a study of the
entire hearing process and expects to receive staff recommendations by
the end of this year on specific changes that would make NRC
proceedings more efficient and timely. The Commission expects that this
study will specifically address the question of need for legislation to
streamline the hearing process as well as the viability of rulemaking,
without legislation, to streamline that process.
In the interim, the Commission has developed and issued a
``Statement of Policy on Conduct of Adjudicatory Proceedings'' which
provides guidance to the licensing boards and parties to Commission
proceedings on how the Commission expects its proceedings to be
conducted. The Policy Statement encourages licensing boards to
establish and adhere to case-specific schedules, to shorten filing and
response times where practical, to manage discovery to avoid
unnecessary delays in that stage of the adjudicatory process, to make
sure that the parties comply with the Commission's regulations
governing the submission of admissible contentions, and to issue
decisions in a timely manner. The Statement further makes it clear that
the Commission itself will carefully and actively monitor ongoing
licensing proceedings to ensure that they are conducted expeditiously
and that the boards, staff and other parties receive prompt guidance on
emerging technical, policy and legal issues, as necessary.
Consistent with the desire for expeditious processing of licensing
actions, the Commission on August 19, 1998, issued an order giving
guidance and recommending a schedule to the Licensing board that will
preside over the licensing renewal proceeding for the Calvert Cliffs
Nuclear Power Plant and a similar order on September 15, 1998 for the
Oconee license renewal proceeding.
The Commission has also published for comment a proposed rule that
would establish new, informal procedures for license transfer hearings
that, if promulgated as a final rule, could, in general, substantially
reduce the time for such hearings.
Finally, the Commission has directed the staff to seek legislation
that supports the NRC's reading of section 189a of the Atomic Energy
Act to reflect the reading that formal adjudications are not required.
Further, with the anticipated application from USEC for the AVLIS
uranium enrichment process expected early next year, the NRC will
consider seeking legislation that would modify section 193's inflexible
approach to hearings.
Question 31. (B) Does the Commission have any plans to implement a
bench marking process? If so, please provide the schedule for
implementation.
Response. The NRC has contracted with Arthur Andersen and Company
to (1) conduct an assessment of the Office of Nuclear Reactor
Regulation programs and activities to ensure that they are derived in
response to strategic goals and that they achieve their intended
purpose in an effective and efficient manner, and (2) evaluate the
NRC's current practices for developing and executing its planning,
operating plan, budgeting, program assessment and performance measures
and monitoring practices and processes. As part of the assessment,
Arthur Andersen and Company will evaluate how NRC performs these
activities in recognition of best practices in both the public and
private sectors. The NRC also plans to initiate, in fiscal year 1999,
an evaluation of its support activities using an experienced contractor
(e.g., Arthur Anderson and Company). This task will also include a
comparison of NRC's support activities to the best practices in both
the public and private sectors. Additionally, the NRC consulted with
the Federal Aviation Administration and the Department of
Transportation to gain information on other Federal agency program
effectiveness.
Question 32. Many past reviews point out consistent problems with
the NRC's regulations and administration of the regulatory system.
These reviews include the Kemeny Report (1979), the Rogovin Report
(1980), the Regulatory Impact Surveys (1981; 1989), the National
Academy of Science report (1992), the Regulatory Review Task Force
Briefing (1994), and the Towers Perrin Report (1994). Most recently,
members of the industry and public expressed their ongoing concerns at
the July 17, 1998 stakeholders meeting sponsored by the Commission.
Criticism of the NRC common to the reviews include: the NRC's highly
prescriptive regulation/lack of performance-based regulation; the
failure to focus NRC resources on higher priority safety-related
issues; the pervasive subjectivity in NRC regulatory decisions and
processes; the failure to exercise adequate management control and
oversight of NRC staff; the significant overlap and duplication of
roles and responsibilities within the NRC; and the intrusiveness of NRC
regulatory processes that add little to the safely margin of nuclear
plants. We are concerned that these problems were identified almost two
decades ago and still have not been effectively addressed.
(A) What action will the Commission take to ensure that these long
standing problems will be permanently corrected?
(B) Please describe each action or activity designed to address the
problems identified above and their expected date of completion.
Response. Since the early 1990's, the NRC has initiated programs
and processes that have, as a principal goal, reviewed our current
regulatory requirements to determine whether they can be modified or
eliminated to improve safety, reduce unnecessary licensee burden, or
improve staff efficiency. Included among these efforts were the
National Performance Review for all areas, the Regulatory Review Group
for reactor-related areas and the Business Process Reengineering
process for materials-related areas. These efforts and others would
show that NRC has attempted to address a number of industry concerns.
However, we did not progress to the extent we had hoped in improving
our regulatory processes and programs. Currently, we are trying to
learn from the mistakes in the past and establish processes that are
scrutable and adequately balance safety and concerns about unnecessary
regulatory burden.
While not all of the issues or problems in each of the reports in
the question have been resolved, much work has been done. Many of the
actions described in responses to these and other Congressional
questions are actions that were initiated prior to the July 30, 1998
Authorization hearing. However, these same responses show that change
is needed and that much effort remains.
The Chairman, on behalf of the Commission, has issued an August 7,
1998 memorandum to the Executive Director for Operations raising
concerns about several issues: the predictability, objectivity, and
timeliness of NRC decisions; the focus of NRC activities; the quality
of NRC licensee interactions; the implementation of NRC programs; and
the size of the NRC staff. The Executive Director for Operations in an
August 25, 1998 memorandum replied to the concerns and described a
number of issues that need to be resolved with corresponding milestones
and dates for when the actions are to be completed. This ``plan'' for
improving regulatory processes and programs is considered to be a
living document and will be updated on a periodic basis. We recognize
we need to improve, and we are aggressively seeking solutions to these
and other concerns and will continue to look for ways to improve NRC's
performance.
Question 33. For the past 3 years, the Chairman has provided the
other Commissioners Staff papers and other information only after the
Chairman reviewed the papers and/or information and changes requested
by the Chairman have been made. This appears to be contrary to
Congress's deliberate decision in the Energy Reorganization Act to
create a Commission rather than a single administrator to establish the
NRC policies.
(A) How does this approach advance the Commission's ability to
manage the NRC in a timely and efficient manner?
(B) What action will be taken to ensure that each Commissioner is
fully informed about agency policy matters without first being filtered
through the Chairman's office?
answer of chairman jackson
It is true that the Energy Reorganization Act of 1974 created the
Nuclear Regulatory Commission (NRC) and the commission format to
establish NRC Policies. As Chairman I have worked to fully comply with
the statutes underlying the NRC. In order to do so I believe it is
important to recognize that Reorganization Plan No. 1, passed by
Congress in 1980 (1980 Plan) made changes to the organizational
structure established by the Act of 1974.
The 1980 plan states under section 2 (b) of the Plan, ``[t]he
Chairman . . . shall be responsible to the Commission for developing
``policy planning and guidance for consideration by the Commission.''
(Emphasis added.) The House Report 96-1043 leading up to the Plan at
page 4 states: ``without a central authority to focus agency
objectives, Commissioners have been able to follow individual interests
without the appropriate coordination required in the development of
policy.'' The Senate Report 96-790 leading up to the Plan at page 13
notes that ``[t]he amendments [to the Plan] will free him [the
Chairman] to be the chief architect of NRC policy and the focal point
for development of consensus on the demanding and highly complex issues
considered by the Commission.'' Thus, the review of draft papers
allowed the Chairman to carry out the function of developing policy
guidance before it was presented to the Commission for consideration,
as the central authority to focus agency objectives and as the chief
architect of policy, as Congress intended. The intent of this approach
was to ensure that all policy options were considered and assessed for
the Commission. The review by the Chairman did, in some cases, result
in the addition of policy options. However, there were no reviews which
resulted in changes which eliminated options presented by the staff.
The approach in no way precluded the Commission from having ``equal
responsibility and authority'' in the decision the Commission made on
the paper, nor was it intended to stifle the flow of information to the
Commissioners. In fact the process was intended to enhance the
Commission policy review and consideration. See Energy Reorganization
Act of 1974, section 201 (a)(1).
The Commission has recently reexamined the approach for policy
development and determined that modifications were needed. Effective
June 30, 1998, the Commission approved revised internal Commission
procedures that are being implemented which state:
``The Chairman and the Executive Director for Operations, through
the Chairman, are responsible for ensuring that the Commission is fully
and currently informed about matters within its functions (Id., Section
2(c)) [of the Reorganization Plan No. 1 of 1980]. The Chairman shall
ensure prompt and full delivery of original information with any
changes thereto, including draft SECYs and COMs, except preliminary
information for development of Section 2(b) [of the Reorganization Plan
No. 1 of 1980] proposals and estimates [i.e., proposals for
reorganization of the major offices within the Commission, the budget
estimate for the Commission, and the proposed distribution of
appropriated funds according to major programs and purposes] unless
expressly requested by the Commission. The Executive Director for
Operations reports for all matters to the Chairman (Id.; Section 4(b))
[of the Plan].'' (Emphasis added.) NRC Internal Commission Procedures
at p. 1-5.
To clarify the papers (i.e., SECYs and COMs) mentioned in the above
reference, the primary decision-making tool of the collegial Commission
is the written issue paper submitted by the staff and is best known as
a SECY paper. The Commission also receives memoranda from the staff,
and at times a staff memorandum may contain a recommendation or seek
guidance from the Commission. This type of memorandum is known as a
COM. See NRC Internal Commission Procedures at p. II-1.
answer of commissioner diaz
This question appears to call principally for a response from the
Chairman. Chairman Jackson is providing her individual response on her
intent and past practice regarding the transmission of NRC staff papers
and/or information to the other Commissioners after her review and the
execution of her requested changes. Thus, I am not in a position to
comment fully or endorse the Chairman's response. I provide this
separate response as an individual Commissioner. As the question
indicates, the flow of information to the full Commission is closely
related to the Congressional decision to establish a collegial
decision-making body rather than a single administrator. In creating a
multi-member body, with staggered terms and diverse party affiliation,
Congress has provided the necessary checks and balances for decision-
making. The collegial decision-making structure promotes full and fair
consideration of complex nuclear tissues and thus addresses sensitive
public concern regarding the use of nuclear energy. The free flow of
information to the Commission has long been understood to be critical
to the Commission's deliberative function. The principle of full access
to information for each Commissioner has been a part of nuclear
regulation since 1955. The Energy Reorganization Act of 1974 continued
to provide that each member of the Commission ``shall have full access
to information relating to the performance of his duties or
responsibilities'' and Reorganization Plan No. 1 of 1980 charges that
``[t]he Chairman, and the Executive Director for Operations, through
the Chairman, shall be responsible for insuring that the Commission is
fully and currently informed about matters within its functions.''
These statutory directives provide important underpinnings for an
effective Commission. Unless the Commissioners are fully and currently
informed, they cannot properly exercise their responsibility for policy
formulation (including management policy), most rulemaking, and
oversight of the agency. The full Commission's access to the staff's
independent and sometimes diverse views allows for better-informed
Commission decisions. It also enhances the ability of each Commissioner
to articulate and consider differing positions and makes more
transparent to the Commission the Chairman's actions in the performance
of her functions. Therefore, I have requested and supported actions
that would assure the sharing of the staff's papers and analyses with
the full Commission when such information is made available to the
Chairman. By its revisions to the Internal Commission Procedures, the
Commission took steps to return to the status quo ante so as to ensure
that each Commissioner is fully and currently informed and fully able
to discharge his or her duties. As a consequence of adherence to these
procedures, the public will have the benefit of assurances of adequate
protection resulting from the diversity of judgment that is expected of
this collegial body. The revised Internal Commission Procedures
actually enhance the Chairman's ability to discharge the Chairman's
responsibility ``to the Commission for developing policy planning and
guidance for consideration by the Commission'' in accordance with
section 2(b) of Reorganization Plan No. 1 of 1980. The legislative
history of Reorganization Plan No. 1 of 1980 quite plainly expresses
the Congressional intent that the Chairman's coordinating role does not
justify delay in transmitting information forwarded by the staff as
information relating to the Commission's functions. See, ma., S. Rep.
96-790, 96? Cong., 2d Sess. at 7-9, 18, 1920 (1980). While the Chairman
and the NRC staff need not share administrative details on a daily
basis or preliminary development of budgetary and reorganization
proposals for the Commission's consideration unless specifically
requested by the Commission, transparency in the broader development of
non-routine matters of policy assists the Chairman and the staff in
keeping the Commission fully and currently informed and helps avoid
oscillations in policy setting and regulation. Therefore, as Congress
intended, the agency and each Commissioner best discharge their
responsibility to the country when all Commissioners have early and
complete knowledge of key policy issues and proposals.
answer of commissioner mcgaffigan
I was concerned with the Chairman's prior review of staff papers
before they were submitted to the Commission. For that reason I
supported the revision to Commission procedures which was finalized on
June 30, 1998. Under the new procedures staff papers will be submitted
to the Chairman and all Commissioners simultaneously. This process
appears to be working well in its first 3 months and has enhanced
dialogue on policy matters between the staff and the Commission as a
whole.
Under the revised Commission procedures, each Commissioner should
be informed about agency policy matters directly by the staff without
filtering through the Chairman's office. However, the Reorganization
Plan of 1980 gives the Chairman primacy in certain matters, for
example, presentation of proposed budgets for the Commission,
presentation of proposals for reorganization of major offices, serving
as official spokesperson for the Commission, etc. In these areas, the
Chairman by statute serves as a filter to the Commission. The goal of
the collegial Commission process is to ensure, even in these cases,
that the Commission is fully and currently informed. In the case of
budget preparation, for example, the Chairman in my 2 years on the
Commission has taken by all reports unprecedented steps to make
transparent both her proposal and various scenarios that are options to
modify her proposal. I have been very satisfied with the Chairman's
efforts to ensure Commissioners are fully informed in budget matters
and her willingness to make further incremental improvements in the
budget preparation process.
Question 34. We understand that at the stakeholders meeting held on
July 18, 1998, that you alluded to a mechanism for remedying the
situation where licensees pay for agency services that do not benefit
licensees. These services amount to $56.2 million and include:
<bullet> International cooperative safety programs and international
safeguards activities
<bullet> Agreement state oversight
<bullet> Site decommissioning management plan activities not
recoverable under 10 CFR 170
<bullet> Fee exemption for nonprofit educational institutions
<bullet> Licensing and inspection activities associated with other
Federal agencies
<bullet> Cost not recovered from Part 171 for small entities
<bullet> Regulatory support for agreement states
<bullet> Decommissioning/reclamation
(A) What is the actual fee reduction you will propose?
Response. The Commission has determined that reducing the
percentage amount the NRC must recover through fees accomplishes the
goal of reducing the financial burden on NRC licensees attributable to
fairness and equity issues while allowing the NRC to budget for
activities which support necessary government functions or national
policy requirements. We have notified the Office of Management and
Budget that if Congress does not enact such legislation in fiscal year
1999, the Commission intends to develop, as part of our fiscal year
2000 budget request, a legislative proposal to revise the Omnibus
Budget Reconciliation Act of 1990 (OBRA-90) to reduce the percentage
amount of budget authority that the NRC is required to collect in fees.
Based on previous work, the collection requirement could be revised to
remove 10 percent of the agency's budget authority from the fee-based
category, in addition to amounts appropriated from the Nuclear Waste
Fund and for regulatory reviews and other assistance provided to DOE.
Question 34. (B) What changes will be made in the NRC's budget to
accommodate the fee reduction? If the basis is a percentage reduction,
how does this percentage relate to actual expenses for these
activities?
Response. If legislation is enacted to exclude additional costs
from fee recovery, the NRC's budget request will continue to include
the resources necessary to accomplish our mission, including those
activities excluded from fee recovery. Fee collections would
approximate the amount appropriated, less the excluded amounts. For
example, if NRC's (non-high-level waste, non-DOE) budget is $450
million and $45 million is excluded from fee recovery, fee collections
would be approximately $405 million.
It is expected that 10 percent of the total budget would be close
to the budgeted amounts for these activities. The NRC's intent is to
provide a simple yet accurate process for estimating the amount we
expect to expend in these areas. The amount is not the same each year
and is dependent upon such factors as the number of licensees, the
number of Agreement States, and the number of licensees that meet the
agency criteria for a small entity.
Question 34. (C) Does the proposed fee reduction include all of the
activities described above as currently comprising the 56.2 million.?
Will overhead costs associated with these activities also be
eliminated?
Response. Yes, all the previously mentioned activities comprise the
existing fairness and equity concern categories. As a point of
clarification, the categories of budgeted costs that raise fairness and
equity concerns include all international activities (except import/
export licensing activities), not just those described above, and only
generic decommissioning and reclamation activities (specific licensing
and inspection activities related to decommissioning and reclamation
are charged to the specific licensee receiving the service). We expect
that a 10 percent reduction would include funding required for these
activities and would provide stability.
Where appropriate, the estimated amounts include a portion of
associated overhead and agency general and administrative costs, and
therefore would be excluded from fee recovery.
Question 34. (D) Where will the funds come from to pay for these
services if they are excluded from user fees?
Response. Amounts off the fee base are not be collected by the NRC
to offset the agency's budget. The excluded costs would be included in
the net amount appropriated to the agency from the general fund.
Legislation could also be enacted to revise the IOAA to allow NRC to
change other Federal agencies for services rendered (i.e., Part 170
fees).
Question 34. (E) How will your proposal ensure that licensees will
not pay for these activities in the future?
Response. The NRC's fees are established by regulation to meet, but
not exceed, the legislatively required fee recovery amount. It is the
agency's intent that any fee-reduction proposal it submits be used to
modify the OBRA-90, or similar legislation enacted by Congress, and
therefore remain in effect as long as that legislation is in effect.
Question 35. (A) Please explain why action to address NRC's fee
inequities has been delayed for more than 5 years.
What is the Commission doing to rectify the NRC's fee inequities?
(B) Please identify each action NRC has taken to address any
concerns raised by Office of Management and Budget regarding the NRC
fee structure.
Response. Absent legislative relief, the Commission has limited
ability to remedy any inequities in its fee structure because it is
required to collect approximately 100 percent of its budget in fees.
The NRC has taken several actions within existing fee laws to address
concerns regarding its fee structure:
<bullet> Identified fairness and equity concern categories in the
February 1994 Report to Congress on NRC Fee Policy, indicating that
legislation was necessary to address these concerns. The
recommended legislation was not enacted.
<bullet> In fiscal year 1995, acted under existing fee laws to help to
mitigate the fairness and equity concerns by treating costs for
these activities similar to overhead and distributing the costs to
the broadest base of NRC licensees.
<bullet> Established a policy to obtain reimbursement for services
provided to other Federal agencies when such reimbursements are
authorized by law.
<bullet> Obtained appropriation legislation which removed from the fee
base certain costs incurred as a result of regulatory reviews and
other assistance provided to the Department of Energy and other
Federal agencies.
<bullet> Initiated a study in 1997 which led to changes in NRC's
fiscal year 1998 fee rule to shift cost recovery for certain
activities from annual fees to specific fees for services. For
example, effective with the fiscal year 1998 final fee rule, the
NRC is assessing fees to the major licensees to recover the full
cost of resident inspectors. In addition, costs incurred within 30
days after the issuance of an inspection report are being billed to
the specific licensee.
<bullet> As part of the Strategic Realignment and Baselining
initiative (DSI 21) in late 1996, updated the information presented
in the 1994 Report to Congress on NRC Fee Policy, and posed the
policy issued again to the Commission. Based on that update and
subsequent information, the Commission notified OMB in June, 1998,
that the NRC intends to propose, as part of its fiscal year 2000
budget submission, legislation which would reduce the portion of
our budget authority that the NRC is required to collect in fees,
if Congress does not enact such legislation in fiscal year 1999. In
the past, the OMB has advised that such legislation, which would
address fairness and equity concerns, would be inconsistent with
the President's budget.
<bullet> Continuing ongoing studies that may impact the fiscal year
1999 fee rule.
Question 36. The NRC has stated that a portion of its 3 percent
increase in its budget is attributable to an $8.9 million increase in
contractor support. Excluding the $2.5 million related to high-level
waste activities, please provide a detailed description of how the
remaining $6.4 million for contractor support is allocated.
Response. The net increase of $6.4 million is primarily
attributable to the following arenas:
----------------------------------------------------------------------------------------------------------------
ARENA COMMENTS $M
----------------------------------------------------------------------------------------------------------------
Nuclear Materials Safety........................ Increased requirements to support United States 2.2
Enrichment Corp.'s Atomic Vapor Isotope
Separation (AVLIS) facility licensing review;.
Initiate program to register Licensees' devices
and continue development of the Licensing and
Inspection Online System;.
Develop, revise and improve procedures in the
Agreement States program Fund effort for
developing trend analysis of material licensee
safety performance;.
Evaluate nuclear materials event experience on a
risk performance basis;.
Expand support for investigation of harrassment
and intimidation cases.
Nuclear Waste Safety............................ Support review of increase in number of spent 0.8
fuel storage and transportation licenses.
Common Defense and Security and International Additional costs to support the Nuclear Materials 0.5
Development. Management Safeguards Systems.
Protecting the Environment...................... Increased support for decommissioning activities 1.7
due to additional plants entering
decommissioning status;.
Increased requirements for decommissioning
research and regulation development related to
transportation process.
Management and Support.......................... Increased rent for Headquarters and regional 3.5
offices, and increased building and maintenance
operations;.
Increased Information Technology requirements for
user technical support, maintenance and
operation of agency information systems;.
Continued development of agency-wide integrated
resource management system.
Reactor Safety.................................. Reduced contractor support for power reactor -2.4
inspection activities;.
Reduced support for reactor performance
assessment and data analysis activities;.
Reduced research in thermal hydraulics related to
power reactors;.
Reduced contractor support for analysis of
operational experience data based on
strengthening agency civil service resources.
Inspector General............................... Additional support requirements.................. 0.1
------------
TOTAL 6.4
----------------------------------------------------------------------------------------------------------------
Question 37. Other agencies that use a fee-based system allocate a
much higher percentage of their fees to specific services. Yet the NRC
fee schedule collects approximately 80 percent of the total fees for
generic activities. Approximately only 20 percent of NRC fees are
allocated for discrete services. In response to a question by
Congressman Schaefer, the NRC has said that reasons for the low
percentage of its fees being allocated to specific services include (1)
NRC inability to recover costs for providing specific services to most
Federal agencies and for infrastructural services rendered to Agreement
States; (2) exemption of nonprofit educational institutions from fees;
and (3) a reduction in fees for small businesses. These activities only
account for $56.2 million of the 80 percent generic fees collected.
(A) What agency activities are supported by the remaining $304
million in generic fees?
Response. As required by OBRA-90, the agency first recovers fees
for services under the IOAA, and the remainder of the budget authority
is to be recovered through annual fees. In addition to the costs for
generic activities (such as direct program costs for rulemaking,
research, and maintenance of an incident response center), the annual
fees also include costs of activities that are not recovered from IOAA
fees assessed to applicants and licensees (such as contested hearings,
responses to allegations, and investigations). The agency has
previously requested public comment on assessing IOAA fees for these
activities, but the comments received did not support changing the
current policy. The Commission is taking steps to shift the balance
away from annual fees to fees for specific services. Several changes to
the Commission's fee policy were made in the fiscal year 1998 fee rule
that result in additional activities being subject to specific
licensing and inspections fees, such as full cost recovery for resident
inspectors and costs expended for inspection activities that occur
within 30 days after an inspection report is issued. The agency is
currently undertaking a comprehensive review of other activities for
potential cost recovery as fees for services to be included in the
fiscal year 1999 proposed fee rule for public comment.
Question 37. (B) What steps are you taking to significantly
increase the percentage of fees allocated to discrete services so that
the benefits derived from NRC activities are more visible to the
regulated community?
Response. The Commission is taking steps to shift the balance away
from annual fees. Several changes to the Commission's fees were made in
the fiscal year 1998 fee rule that result in additional activities
being subject to specific licensing and inspections fees, such as full
cost recovery for resident inspectors and costs expended for inspection
activities that occur within 30 days after an inspection report is
issued. We are currently undertaking a comprehensive review of other
activities for potential cost recovery as fees for services to be
included in the fiscal year 1999 proposed fee rule for public comment.
Question 38. $97 million of the NRC's fiscal year 1999 budget is
designated for contractor fees for Management and Support. In response
to a question by Congressman Schaefer on the management and support
services that must be contracted for, the NRC identified as examples
services for elevator maintenance and software upgrades. Excluding
elevator maintenance and software upgrades, what accounts for the $97
million in contractor fees?
Response. The remaining $95 million for Management and Support
primarily represents the agency's investment in information technology,
information management, human resources, administrative services, and
financial management. The funding for these activities are as follows:
------------------------------------------------------------------------
$ Million
------------------------------------------------------------------------
Rental payments on Headquarters and regional offices/ 25.5
facilities operations and support...................
Telecommunications support, including local and long 8.2
distance telephone services, Internet service
providers, and other operator services..............
Support and maintenance of financial systems, 7.9
including financial audit services, maintenance of
financial systems for fee collection, payroll and
other services......................................
Workstation upgrades, computer operations, and 7.0
timesharing.........................................
Permanent Change of station.......................... 5.9
Local and Wide Area Network maintenance.............. 5.5
Records management (Preservation, disposition, 4.8
storage, collections, access) and library operations
Development and implementation of Agency-wide 4.6
Document Management System..........................
Duplicating, printing and graphics................... 3.3
Guard services and security support.................. 3.3
Contract support services that provide specialized 3.0
adjudicatory support, transcript services, and other
administrative services.............................
Training and Development............................. 2.5
System development and integration................... 1.8
General supplies, equipment and transportation....... 1.8
Computer systems operations and support activities... 1.7
Year 2000 corrections................................ 1.1
Policy, planning and acquisition support activities.. 1.0
Personnel and Administrative IT operations and 1.0
maintenance.........................................
HR IT systems operations and maintenance............. 1.0
Workman Compensation................................. 0.7
Other Human Resources activities (recruitment and 0.7
personnel record management)........................
Inspector General investigations, audits, evaluation 0.7
and assessment, and information technology
activities..........................................
Health and Employee services......................... 0.6
------------------
TOTAL............................................ 95.0
------------------------------------------------------------------------
Question 39. Much of the work performed by NRC Office of Research
appears to be duplicative of research performed by industry and
government national laboratories.
(A) How does the NRC determine the value of the research performed
by the Office of Research?
Response. NRC does not duplicate industry research. The answer to
part (c) of this question discusses this. The NRC determines the value
of research performed by the Office of Research in terms of its
contributions to the quality and timeliness of regulatory decisions
made by the NRC. Eighty percent of our research directly supports
regulatory decisions made by NRC's licensing offices. The other 20
percent is anticipatory. It is focused on the potential safety
implications of new technology and emerging safety issues to improve
NRC effectiveness and to position NRC to respond to agency initiatives.
A key contribution of the Office of Research lies in the
identification of risk significant vulnerabilities early and the
development of the technical basis for resolution of such issues before
they become a threat to public health and safety. The identification of
the significance of pressurized thermal shock events for nuclear
reactors and the development of the technical basis for regulatory
requirements to mitigate undesirable consequences illustrates the value
of the NRC's research. Its value is also measured in terms of the long
term strategic perspective that it brings to the identification and
resolution of safety issues independent from the operational focus of
the licensing offices. For example, without the ground breaking work
done by the Office of Research in the field of probabilistic risk
assessment, the technical basis would not exist for moving to a risk-
informed regulatory approach. Another important contribution lies in
the elimination of the need for excessive conservatism in licensing
decisions which results from gaps in regulatory knowledge. For example,
the Piping Integrity Research Program provided the technical basis and
promulgated an amendment to 10 CFR Part 50 Appendix A, General Design
Criteria eliminating the requirement to consider dynamic effects of
double ended pipe failure for qualifying piping systems. This led to
the elimination of massive pipe whip restraints in nuclear power
plants. Similarly, the research program provided the technical basis
for the Emergency Core Cooling System (ECCS) rule which allows
licensees to increase power rate and reduce regulatory burden. Research
also provides the basis for risk-informed and performance based
requirements which can allow licensees more flexibility in achieving
compliance with NRC regulations and encourage use of cost-effective
alternatives. For example, licensees may now utilize risk-informed
methodologies that extend testing and inspection intervals as a result
of NRC research. The Office of Research also adds value by keeping pace
with new technology such that the regulatory process does not impede
the incorporation of such new technology in nuclear plants. In this
regard, the Office of Research's High Burn-Up Fuel Program is directed
at developing a technical basis for reviewing industry's proposal to
use advanced fuel designs in a timely fashion and increase burn-up
limits resulting in economic benefits.
As a result of an increasingly competitive environment, the nuclear
power industry is now focusing on increased performance by utilizing
new technology and taking advantage of margins inherent in current
designs and operating conditions. In effect, the design basis envelopes
of the U.S. nuclear power plants will change as requests to modify
operating licenses (e.g., technical specifications, power upgrades) and
improve operational performance (e.g., longer operating cycles, new
fuel designs) continue to be sought. However, these initiatives to
improve performance involve complex designs operating in a demanding
environment of high radiation, temperature and stress, combined with
uncertainties in physical phenomena which occur during transients and
accidents. The NRC believes there is a great value in having a vigorous
independent research program that will allow the agency to make sound
regulatory decisions relative to these initiatives.
Listed below are additional examples of where NRC's research
program has added value by enhancing safety by reducing risk at a
justified cost, reducing burden on 34 licensees, and by providing a
technical basis for credible and timely regulatory decisions. Estimates
on the order of magnitude of the outcomes, in risk reduction or cost
savings, are several hundreds of millions of dollars for the nuclear
industry.
<bullet> The PRA research program led to the development of regulatory
guides that lay out the process, principles and guidance for
licensees to make risk-informed changes to their licensing basis-
in-service testing (RG 1.175), graded Quality Assurance (RG 1.176),
and technical specifications (RG 1.177). A regulatory guide on
risk-informed inservice inspection is nearing completion.
<bullet> The Pressure Vessel Safety research program provided the
technical basis for a regulation (10 CFR 50.66) and regulatory
guide (1.162) accepting thermal annealing of the reactor pressure
vessel as a viable method to mitigate the effects of neutron
irradiation.
<bullet> The Piping Integrity research program provided the technical
basis for staff's acceptance of weld overlay repairs off BWR piping
as a permanent repair, avoiding costs to replace recirculation
piping; resolved concerns over reductions in fracture toughness of
cast stainless steel; and provided realistic predictive models for
use in evaluating these materials in lieu of very conservative
methods put forward by a reactor vendor.
<bullet> The Mechanical Engineering research program provided
experimental results that identified the potential for certain
safety-related motor-operated valves to fail under design basis
loadings. This led the staff to issue Generic Letter 89-10 and to
require licensee programs to evaluate their motor operated valves
to assure their operability under the design basis conditions.
<bullet> The Severe Accident research program provided the resolution
of the hydrogen combustion issue for all large dry containments
resulting in averting the installation of hydrogen igniters on
these containments; developed the technical basis for backfitting
the requirement for hardened vents in BWR Mark I containments;
resolved concern for direct containment heating for large dry
containments; and updated the source term (NUREG-1465) which will
allow operational improvements and cost savings.
<bullet> The Decommissioning research program developed the technical
bases for a regulatory guide, and accompanying NUREGs, to support a
rule that established radiological criteria for license
termination, and based on results of NRC's research program,
assisted licensees in conducting radiological surveys and dose
assessments. It is expected that these tools will enable many of
NRC's licensees to move through the decommissioning process at
substantial cost savings from the past with case-by-case
decommissioning.
Question 39. Much of the work performed by NRC Office of Research
appears to be duplicative of research performed by industry and
government national laboratories.
(B) What efficiency improvements has the NRC considered applying to
the Office of Research?
Response. NRC is pursuing a number of measures to become more
efficient in conducting research. Among them are:
<bullet> Seeking every opportunity to obtain needed resource
information through cooperative research programs with industry,
the Department of Energy and with foreign countries. Through these
cooperative programs NRC has, in the past, and will continue in the
future, to highly leverage its funds, and thereby obtain valuable
research results at a fraction of what the cost would be if NRC
pursued the work unilaterally. Reducing the number of contracts
being administered by the Research staff through consolidation of
smaller contracts into larger ones targeted at centers of
excellence.
<bullet> Performing more analytical work using the NRC research staff,
in lieu of contracting for these services, when it is cost
effective to do so.
<bullet> Reducing the Generic Safety issue resolution staff in
research by utilizing staff resources in the Office of Analysis and
Evaluation of Operational Data to help prioritize and analyze
issues.
<bullet> Applying PC based computer technology to both our technical
and administrative work to achieve both staff and dollar savings.
<bullet> Consolidating several computer codes for the analysis of
thermal hydraulic transients into a single, easy to use code which
will, in the future, reduce maintenance costs by $1.7M per year and
will consume less staff time to run the codes.
<bullet> Using internet-based collaborative computing technology and
video-conferencing to reduce travel costs.
It should be noted that the NRC research program has been reduced
substantially over the years to recognize (a) changes in the industry,
(b) the fact that there are no new reactor license applications, (c)
the minimal demand for advanced reactors, 35 and (d) that licensees and
vendors perform their own analyses as part of their submittals.
Seventeen years ago, the research budget was over $200M and 5 years ago
it was over $100M. Today that same budget is under $50M, reflecting a
purchasing power of less that one-tenth of what it was 17 years ago.
Question 39. Much of the work performed by NRC Office of Research
appears to be duplicative of research performed by industry and
government national laboratories.
(C) What consideration has the NRC given to assigning the NRC
Office of Research to conduct peer reviews of research performed by the
industry so as not to duplicate industry research?
Response. NRC does not duplicate industry research. In each of our
areas of research we maintain an awareness of related research being
planned and conducted by the industry, both domestically and
internationally through personal contacts at the staff level and
through more formal joint workshops. NRC's research is either of an
independent confirmatory nature or is anticipatory research looking at
potential or emerging issues to better understand their safety
implications. Sometimes, because the NRC and industry are conducting
research in similar areas, it may appear to be duplicative when it is
not. A good example of this situation is the work NRC and industry are
doing with respect to steam generator tube degradation and rupture.
Relative to steam generators, as appropriate for a regulator, the
NRC's research program is addressing (1) independent verification of
the capabilities of non-destructive examination techniques currently in
use, (2) and the development and validation of models used to predict
the failure of degraded steam generator tubes, and (3) the likelihood
of that failure resulting in a stable leak versus a full rupture of the
tube. To fulfill their primary responsibility for safety, industry
efforts are more directed to developing new inspection techniques and
to developing methods for mitigating the degradation. However, there
are common interests in many of these areas. Consequently, the NRC, the
Electric Power Research Institute, and some foreign organizations are
forming a collaborative research effort to share information, and
cofund activities to avoid duplication and minimize costs.
NRC has a Memorandum of Understanding with EPRI and our staffs meet
periodically to coordinate our respective research efforts. We also
meet periodically with the Department of Energy for the same purpose.
These meetings help assure that we cooperate when possible and avoid
duplication of effort. In addition we have approximately 35 active
Cooperative Bilateral Research Agreements, as well as another 45
Cooperative Research Agreements that are being extended or considered
with organizations in more than 25 countries.
Question 40. The Office of Research's responsibility for rulemaking
activities has been transferred to the Office of Nuclear Reactor
Regulation.
(A) Prior to this transfer, what percentage of the Office of
Research budget!was allocated to rulemaking activities?
Response. Prior to the rulemaking transfer, the fiscal year 1998
budget for the Office of Nuclear Regulatory Research had 13.1 percent
of its FTE and 4.2 percent of its contract support/travel funds
allocated to the rulemaking function.
Question 40. The Office of Research's responsibility for rulemaking
activities has been transferred to the Office of Nuclear Reactor
Regulation
(B) What changes have been made in the Office of Research budget to
reflect the reduction in responsibility?
Response. Twenty-six FTE and contracts with a value of
approximately $2.0M were transferred from the fiscal year 1998 research
budget to the budgets of the Office of Nuclear Materials Safety and
Safeguards, the Office of Nuclear Reactor Regulation and the Office of
Administration. These transfers moved all of the resources for research
rulemaking activities into these three offices.
Question 41. The Office of Research expends funds to evaluate
phenomenological sequences associated with severe accidents for which
there is virtually no empirical data. This lack of data results in high
uncertainty in the results, potentially leading to more and more
research.
Given the low likelihood that a definitive determination about
phenomenological sequences can be made, what is the benefit of
continuing to expend resources in this area of research?
Response. Severe accident research has been conducted is to obtain
data on phenomena associated with low probability events and for which
little if any data exists from operating experience. Although an
extensive severe accident research program was conducted in the past,
most of the research programs have now been completed. Most of these
efforts were ended when it was determined that there was a sufficient
understanding of the severe accident phenomena to support needed
regulatory decisions. As part of this determination, programs have not
been continued when it was determined that there was a low likelihood
that further research would provide additional benefit in resolving
severe accident issues or when bounding assumptions could be used to
account for the continued uncertainty in understanding the phenomena.
As progress has been made in understanding severe accident phenomena,
the NRC severe accident research program has brought a number of issues
to closure and therefore, has been substantially reduced over the past
several years. Program results have been used to develop analytical
tools to predict the course and consequences from such low probability
accidents. The current program focuses primarily on maintaining and
consolidating the existing analytical tools which preserve the
knowledge and understanding resulting from previous severe accident
research. At this time only a small portion of our current severe
accident research budget is for experimental work and this is directed
at improving our analytical tools where such improvements will support
the resolution of remaining severe accident safety issues.
Question 42. (A) In response to a question by Congressman Schaefer,
the NRC indicated that it will commit 25 FTEs to review each license
renewal application. Yet, a response to another question indicated that
a portion of the NRC's budgeted $8.9 million in contractor fees will go
to contractor support to review reactor license renewal applications.
Given the relatively narrow scope of the license renewal application,
25 FTEs would seem to be sufficient to review each license renewal
application on a relatively abbreviated schedule.
Please provide the job task analysis upon which the decision to
allocate 25 FTEs to each license renewal application was based?
Response. A formal job task analysis is not the appropriate tool to
estimate the resources necessary to support the review process for a
license renewal application. The NRC's process for controlling the
review of a license renewal application is contained in NRR Office
Letter No. 805, ``License Renewal Application Review Process.'' This
office letter describes the process steps for the review of an
application, the responsibilities of staff organizations involved in
the review, and provides a method for identifying and implementing
lessons learned from the review of the first applications. Based on the
experience gained from the review of the first applications, the
Commission expects that the review process for subsequent renewal
applications will be more efficient. Our current estimate is that it
will take approximately 22 direct FTE to review each license renewal
application.
The NRC has established plant-specific schedules to ensure that
reviews of license renewal applications are completed within 30-36
months of receipt of the application, including any hearings. The
milestones in the schedules are as follows:
------------------------------------------------------------------------
Milestone Week
------------------------------------------------------------------------
Receive renewal application................................ 0
Notice application tendered................................ 2
Complete acceptance and docketing.......................... 4
Public meeting and environmental impact statement (EIS) 12
scoping...................................................
Staff complete technical requests for information (RAIs)... 20
Staff complete environmental RAIs.......................... 24
Applicant complete technical RAI responses................. 30
Applicant complete response to environmental RAIs.......... 32
Issue draft environmental statement (DES) for comment...... 44
Staff complete safety evaluation report (SER) and identify 46
open items................................................
Public meeting to discuss DES.............................. 48
Complete DES comments...................................... 54
Applicant complete response to open items.................. 62
Staff issue supplemental SER & final environmental 78
statement (FES)...........................................
ACRS Recommendation to Commission on Application........... 90
Commission decision on application......................... 120
Issue new license.......................................... 120-146
------------------------------------------------------------------------
The milestone schedules and the detailed process described in
Office Letter No. 805 were used to determine the resources needed to
complete the review of a renewal application. The model developed
describes the tasks and corresponding milestones and evaluates the
functions and expertise necessary to complete the review. Resources are
currently being allocated to meet the milestone schedules.
Question 42. (B) What contractor services are anticipated to be
needed for license renewal reviews that cannot be performed by the 25
FTEs?
Response. Contractor services are used to provide specialized
technical expertise not available on the staff. For the review of
license renewal applications, contractor services are used primarily
for the resolution of generic issues and for performing environmental
assessments. Only a small portion of the $8.9 million increase in NRC's
contract assistance funding is allocated to the review of license
renewal applications (approximately $11OK per application per year).
Question 42. (C) Given that there are to be 25 FTEs and contractor
support assigned to each license renewal application, why will it take
the staff 18 months to issue the Safety Evaluation Report?
Response. Upon receipt of a license renewal application, the NRC
(1) reviews the technical information contained in the application for
compliance with the applicable regulations, (2) assesses potential
environmental impacts in accordance with the requirements of the
National Environmental Policy Act, (3) performs verification
inspections of selected site-specific programs and activities credited
for license renewal, and (4) participates in adjudicatory hearing
activities, if a hearing is requested. Experience has shown that
initially submitted applications do not always contain all the
information necessary for the NRC to make the findings required for
issuance of a license, requiring additional time for the NRC to request
additional information from the applicant, the applicant to prepare and
submit the information, and the staff to review the submitted
information. The schedule also reflects the necessary public
participation in the environmental review which occurs during the same
period. The NRC's schedule integrates these activities, conducting them
in parallel to the maximum extent possible to ensure an expeditious
review.
Question 43. (A). Despite many revisions to the NRC's enforcement
program since its inception in 1980, the industry and the Union of
Concerned Scientists continue to criticize the NRC for its failure to
correct the many problems that have been identified. These problems
include failing to properly focus NRC and licensee resources on issues
most important to safe plant operation; aggregating violations to
support a higher violation level or civil penalty; extrapolating
programmatic deficiencies from a given event or violation; and basing
enforcement decisions on subjective, undefined terms such as
``regulatory concern'' and ``regulatory significance.'' We understand
that both the industry and the Union of Concerned Scientists recently
have suggested that the NRC make significant revisions to eliminate
these deficiencies.
What steps will the NRC take to ensure that each enforcement action
is directly related to safety significance of the noncompliance?
Response. Noncompliances vary in their degree of safety,
safeguards, or environmental significance; for that reason, the
enforcement policy provides a graduated system of sanctions, varied
according to the technical significance (i.e., actual and potential
consequences) and the regulatory significance. This graduated system
appears both in the range of severity levels assigned to different
violations, and in the availability of different enforcement actions
(e.g., Non-Cited Violations (NCVs), Notices of Violation (NOVs), civil
penalties, and orders). Maintaining a safety focus was addressed in the
1995 enforcement program reassessment (NUREG-1525) and the recent 1998
enforcement program review (NUREG-1622).
Modifications have been made to the enforcement policy to assist
the staff and industry in maintaining a safety focus. For example,
Section IV of the enforcement policy provides that minor violations not
be the subject of formal enforcement action and not normally be
documented in inspection reports. When sufficient information regarding
a licensee's corrective actions exists on the docket, the NRC may waive
a licensee's response to an NOV. Civil penalties are no longer proposed
for repetitive Severity Level IV violations, unless the repetitive
violation is such that it warrants classifying the matter as a Severity
Level III violation. The enforcement policy continues to provide that
Licensee-identified and corrected Severity Level IV violations be
dispositioned as NCVs, provided they meet the remaining criteria for
discretion in the policy.
In a Staff Requirements Memorandum (SRM) dated August 25, 1997, the
Commission outlined a general approach to safety and compliance. The
discussion stated:
As commonly understood, safety means freedom from exposure to
danger, or protection from harm. In a practical sense, an activity is
deemed to be safe if the perceived risks are judged to be acceptable.
The Atomic Energy Act of 1954, as amended, establishes ``adequate
protection'' as the standard of safety on which NRC regulation is
based. In the context of NRC regulation, safety means avoiding undue
risk or, stated another way, providing reasonable assurance of adequate
protection for the public in connection with the use of source,
byproduct and special nuclear materials.
While there is agreement on the need to maintain a safety focus,
disagreements may occur as to the safety significance of any particular
violation. In the view of the NRC, a violation need not always result
in an actual impact to the public or to an employee (e.g., a release of
radioactive material to the public or an employee overexposure to
radiation) before it is considered significant. In resolving differing
views on safety significance, considerations should include all aspects
of safety significance as applied to enforcement, including the actual
safety consequence, the potential safety consequence, and the
regulatory significance. Violations may be indicative of performance
that could have consequence or potential consequences if not corrected,
and therefore have regulatory significance. These include willful
violations, false statements, programmatic issues, repetitive
violations, and cases where it is fortuitous that a more significant
violation did not occur with actual consequences.
As noted in the Commission-approved discussion on safety and
compliance in a August 1997 SRM on the subject:
Safety is the fundamental regulatory objective, and compliance with
NRC requirements plays a fundamental role in giving the NRC confidence
that safety is being maintained. NRC requirements, including technical
specifications, other license conditions, orders, and regulations, have
been designed to ensure adequate protection--which corresponds to ``no
undue risk to public health and safety''--through acceptable design,
construction, operation, maintenance, modification, and quality
assurance measures. In the context of risk-informed regulation,
compliance plays a very important role in ensuring that key assumptions
used in underlying risk and engineering analyses remain valid.
Given the misperception that safety significance is always
synonymous with actual consequence, additional enforcement guidance was
provided directing that correspondence transmitting escalated
enforcement actions indicate whether the issue was safety significant
because of the actual or potential consequence or because of the
regulatory significance (e.g., repetitive, willful, programmatic,
etc.), or because of a combination of these issues. In addition, the
NRC is currently working on clarifying the term regulatory significance
and evaluating whether it should be included as a component of safety
significance.
Question 43. (B) What actions will the NRC take to ensure that
enforcement action is based on specific, objective and, as feasible,
risk-informed criteria?
Response. Future efforts to improve the enforcement program
include: (1) further meetings with stakeholders to obtain additional
perspectives on enforcement and to consider the need for changes to the
enforcement program, with the short-term focus on non-escalated
enforcement, as described in response to Question 17 and longer term
focus on escalated enforcement, including consideration of a forth
coming NEI proposal, (2) developing additional guidance on thresholds
for low-level and minor violations, (3) developing additional guidance
to consider risk in enforcement decisions and the use of regulatory
significance for significant enforcement actions, (4) conducting
additional training describing the guidance for these changes and
initiatives for staff involved in inspection and enforcement
activities, (5) auditing the consistency of issuance of low-level
violations, and (6) developing closer coordination between inspection
and enforcement activities.
Question 43. (C) What actions will the NRC take to eliminate
enforcement actions based on subjective judgments?
Response. As stated before, the NRC will continue to develop
additional guidance to consider risk in enforcement decisions and the
use of regulatory significance for significant enforcement actions.
Additional training describing the guidance for these changes will be
conducted for the staff. While there is a commitment to minimize
subjectivity and increase objectivity and predictability, the
enforcement process by its nature and the breadth of NRC licensed
activities requires the exercise of judgment and discretion. Thus, all
subjectivity cannot realistically be eliminated.
Question 43. (D) What action will the NRC take to incorporate into
its enforcement program progressive enforcement approaches used by
other Federal agencies with public health and safety responsibilities?
Response. The NRC reviewed other enforcement programs and policies
as part of its 1995 program assessment. Most recently, the NRC met with
Federal Aviation Administration (FAA) senior representatives on July
27, 1998, to discuss its enforcement programs and approaches suggested
by industry. Like the NRC's enforcement program, many of the FAA
programs also consider issues of identification, corrective action, and
whether violations were committed willfully. While there are
similarities in the approaches, differences in the regulated programs
may not make some of the approaches appropriate for the NRC. Although
industry suggested that the NRC consider enforcement approaches
employed by the Occupational Safety and Health Administration (OSHA),
the NRC has not looked into the OSHA program because of the significant
differences in the NRC and OSHA regulatory approach. Specifically, OSHA
does not have licensees and OSHA does not generally perform routine,
periodic inspections of entities that are subject to their regulations.
We have also discussed enforcement approaches with the Environmental
Protection Agency (EPA) and the Department of Transportation. NRC will
continue to evaluate other enforcement approaches as part of broader
potential changes being considered.
Question 44. In light of the significant strides the industry has
made in achieving sustained safe plant performance over the past
several decades, we are concerned about the NRC's enforcement
statistics for 1997. For example, both NRC and industry indicators
confirm a continuing trend of safe performance and improving
reliability. Yet the NRC issued 50 percent more violations to the
industry between 1996 and 1997; and the NRC issued 92 percent more
violations since 1990. Of significant concern is that most of these
violations (1427 of 150--?) were for noncompliances determined by the
NRC to be of low safety significance. Since 1995, the NRC has also
issued 66 percent more non-cited violations and deviations, i.e.,
enforcement action for matters that, by definition, are predominantly
administrative. The NRC's enforcement approach seems to require
licensees to apply considerable resources to processing low safety
significant enforcement actions, thereby diverting NRC and licensee
attention from potentially more safety significant issues.
(A) What actions will the NRC take to ensure that its enforcement
process recognizes sustained good performance by the industry?
Response. The NRC's enforcement program currently recognizes good
performance by the industry in both its escalated and non-escalated
programs. If a licensee displays good performance by identifying and
correcting non-repetitive low-level violations, the NRC dispositions
the issues as Non-Cited Violations (NCVs): an administrative tool to
document and track the issue that does not require a licensee response.
In the escalated program, if a licensee has not had escalated
enforcement action within a 2-year or 2-inspection period (whichever is
longer), the decision or whether or not a civil penalty will be
proposed is based solely on whether the licensee's corrective actions
were prompt and comprehensive. In addition, notwithstanding the normal
enforcement process, the enforcement policy provides the necessary
flexibility to recognize good overall sustained performance by reducing
or refraining from issuance of a civil penalty to a Notice of Violation
through the exercise of enforcement discretion (i.e., Section VII.B.3,
``Violations Involving Old Design Issues,'' and Section VII.B.6,
``Violations Involving Special Circumstances'').
Enforcement is an integral part of the NRC and NRC stakeholder
effort to develop a licensee performance assessment process that makes
increased use of objective performance indicators. As this process is
developed and implemented, the enforcement program will be modified to
incorporate the new methodologies and ensure that both NRC and licensee
resources are directed to the more safety significant issues.
Question 44. (B) What action will the NRC take to ensure that its
enforcement action does not force the licensee and the NRC to focus
resources on nonsafety significant matters.
Response. As stated before, efforts are underway to reinforce
existing guidance and policy to (1) give credit for licensee actions in
both identifying and correcting violations in deciding whether to cite
a low-level violation, (2) not require a written response when low-
level violations are issued and corrective actions are sufficiently
addressed in writing elsewhere on the docket, e.g., in a Licensee Event
Report, (3) provide more consistent treatment for multiple violations
with common root causes, and (4) clarify guidance for violations
identified as a result of licensees' corrective actions. As a result of
ongoing efforts, such as the review of the NRC enforcement program
issued in April 1998 (NUREG-1622, ``NRC Enforcement Policy Review''),
the NRC recognizes that improvements can and must be made in its
efforts to focus on safety and on consistency in its treatment of
violations, especially the thresholds for low-level violations. Special
enforcement review panels were established to review all potential
Maintenance Rule and 10 CFR 50.59 escalated and non-escalated
enforcement actions for consistency of approach and determination of
safety significance. In addition, future efforts include: (1) further
meetings with stakeholders to obtain additional perspectives--on
enforcement and to consider the need for changes to the enforcement
program, (2) developing additional guidance on thresholds for low-level
and minor violations, and (3) developing additional guidance to
consider risk in enforcement decisions and the use of regulatory
significance for significant enforcement actions.
Question 44. (C) Please provide a schedule for completion of all
actions cited above to revise the NRC's enforcement program.
Response. The NRC issued an Enforcement Guidance Memorandum (EGM
98-006) on July 27, 1998, that reinforced existing guidance and policy
on not citing licensee-identified and corrected nonrepetitive
violations, waiving licensee's responses when corrective action
information is already on the docket, and treatment of multiple
violations and violations identified as a result of a licensee's
corrective actions (items (1)-(4) in the previous question). The NRC
held a public meeting with stakeholders on September 3, 1998, to
solicit input on possible enforcement policy revisions. A revision of
nonescalated enforcement policy is expected to be presented to the
Commission in October for their approval. The NRC staff is expected to
develop additional guidance on regulatory significance by late Fall of
this year and thresholds for low-level and minor violations at the end
of this year. The NRC staff plans on developing risk-informed examples
for inclusion in the supplements of the enforcement policy in the
Spring of 1999. The NRC staff also expects a proposal from NEI for
changes in escalated enforcement policy and will review that proposal
and report to the Commission in the Spring of 1999.
Question 45. (A) The NRC has stated that it takes enforcement
action to ``send a message'' regarding the ``regulatory significance''
of a violation as well as the agency's underlying ``regulatory
concerns.'' Neither ``regulatory significance'' nor ``regulatory
concern'' is a defined term, and therefore both are extremely
subjective. Particularly given the nature of enforcement action, using
these terms as the basis for enforcement action would seem
inappropriate.
How does the NRC distinguish between regulatory significance and
regulatory concern as a basis for taking enforcement action?
Response. Noncompliances have varying degrees of safety,
safeguards, or environmental significance. The enforcement policy
provides a graduated system of sanctions, varied according to the
technical significance (i.e., actual and potential consequences) and
the regulatory significance. Regulatory significance, while not
``defined, '' has traditionally been understood to involve issues that
have the potential for impact on safety, such as programmatic failures,
repetitive violations, willful violations, reporting failures,
licensees' refusal to comply, and management involvement. The NRC
reviews each case on its own merits to ensure the severity of the
violation is characterized at the level best suited to the significance
of the particular violation.
When an issue is evaluated and categorized at the Severity Level
III level, by definition it is, ``cause for significant regulatory
concern.'' \1\ As a regulator mandated to ensure that the civilian uses
of nuclear materials in the United States are carried out with adequate
protection of public health and safety, we are concerned when a system
designed to perform a certain safety function would fail to operate
under certain circumstances if called upon to work. Defense in depth
and acceptable margins of safety are at the foundation of the NRC
regulatory process. We are also concerned when a worker falsifies a
surveillance test because our regulatory program is based on licensees
and their contractors and employees acting with integrity and
communicating accurately. At an individual level, instances of willful
misconduct reduce the NRC's confidence that if these individuals were
subsequently involved in licensed activities, the activities would be
conducted in a manner that adequately protects the public health and
safety. At a higher level, instances of willful misconduct may also
raise questions about the potential pervasiveness of the problem and
the licensee's ability to establish a safety-conscious work
environment.
---------------------------------------------------------------------------
\1\ Section IV of the Enforcement Policy, NUREG-1600, Rev. 1.
---------------------------------------------------------------------------
The regulation of nuclear activities does not always lend itself to
a mechanistic treatment. Judgment and discretion must be exercised in
determining the severity levels of violations and the appropriate
sanction. As such, to ensure consistency, technical accuracy, and
balanced views, issues that may be categorized at Severity Level 111
are addressed in enforcement review panels with routine participation
from regional offices, the Office of Enforcement, and the Office of
Nuclear Reactor Regulation. Special scrutiny is given to those cases
that include issues that have regulatory significance (e.g.,
programmatic failures, willful violations, repetitive violations,
etc.).
Question 45. (B) What actions will the NRC to eliminate undefined
terms such as ``regulatory concern'' or ``regulatory significance''
from its enforcement process?
Response. The Commission recently requested that the staff develop
a definition and explanation of ``regulatory concern'' and ``regulatory
significance'' for possible inclusion in the enforcement policy. The
staff will also review the advantages and disadvantages of the current
inclusion of regulatory significance'' as a component of safety
significance. The NRC staff is expected to report back to the
Commission in the late Fall.
Question 45. (C) What is the NRC's criteria for ``sending a
message'' through the enforcement process?
Response. The NRC does not have any defined criteria for ``sending
a message'' through the enforcement process. Instead, the enforcement
policy is structured to provide a graduated approach to noncompliances
and provides examples of noncompliances at various levels of
significance to aid the staff in developing the appropriate enforcement
sanction for a given set of facts and circumstances. However, the
regulation of nuclear activities in many cases does not lend itself to
a mechanistic treatment. Accordingly, the NRC's enforcement process
provides that judgment and discretion be exercised in determining the
severity levels of violations and the appropriate sanction as provided
in Section VII, to ``ensure that the resulting enforcement action
appropriately reflects the level of NRC concern regarding the violation
at issue and conveys the appropriate message to the licensee.''
Enforcement actions are legal sanctions based on noncompliances
with legal requirements. The byproduct of a cohesive enforcement action
is an effective communication tool. Enforcement action transmittal
letters communicate with a range of audiences, some more familiar than
others with the inspection findings. While the primary audience is the
involved licensee, secondary audiences may include site management,
corporate officials not directly involved in nuclear activities, other
licensees with similar activities, NRC staff, the media, and interested
members of the public. Enforcement actions can serve a valuable purpose
in making sure that licensees understand the importance of compliance.
Incentives are provided to identify and correct violations. There is
also a deterrent purpose. As such, enforcement actions should be
constructed to convey the regulatory message derived from applying the
enforcement policy to the circumstances of the particular case. The NRC
has encouraged, for instance, including a description of the licensee's
corrective action, to give credit where good action has been taken. By
emphasizing those aspects of licensee performance that the NRC
considers important, other licensees gain ideas on how to improve their
performance in similar areas. In addition, the letters may address the
need to avoid violations, the need to be responsive to opportunities to
identify violations, the need to reverse past poor performance and
sustain good performance, the significance of multiple violations, the
impact of violations of extended duration, and the need to maintain
high standards of integrity.
Question 46. The NRC states that its Enforcement Policy encourages
licensee to self identify and correct noncompliances. Yet the NRC may
impose a 100 percent penalty if either the licensee does not identify
or satisfactorily correct a noncompliance. The Enforcement policy also
provides for the imposition of a 200 percent penalty if the licensee
neither identifies nor corrects the noncompliance. This approach
appears to be very punitive.
How does withholding extraordinary punishment ensure licensee self
identification and correction of noncompliances.
Response. The current civil penalty assessment process is not
limited to the consideration of two factors, identification and
corrective action. Instead, the assessment process considers four
decisional points, involving past performance, identification,
corrective action, and those issues that may warrant exercising
enforcement discretion.
The first decisional point addresses whether the violation is the
first escalated enforcement action that the licensee has had during the
past 2 years or past two inspections. If the licensee has not had any
past escalated actions, the assessment process then addresses the
promptness and comprehensiveness of the licensee's corrective actions
and then whether there are special circumstances that may warrant
discretion. In this scenario, the issue of identification is not
considered. In other words, even if the NRC identified the violation,
this strategy is designed to provide flexibility for licensees who have
traditionally been good performers. This strategy also places a premium
on corrective action.
On the other hand, if a licensee has had past escalated actions,
the process addresses whether the licensee should be given credit for
actions related to identification and corrective actions and then
whether there are special circumstances that may warrant discretion. In
this scenario, the staff believes a base civil penalty \2\ is
appropriate if the licensee only warrants credit for either self-
identification or corrective action because the process reflects that
the licensee has had a history of escalated action. However, even if a
licensee has had a history of past actions, under the assessment
process, a licensee would not normally be subject to a civil penalty if
it identified and corrected the current violation. As stated before,
this strategy gives more weight to the licensee's current performance
and provides incentives to identify and correct violations.
---------------------------------------------------------------------------
\2\ It should be noted that most enforcement actions for reactor
licensees include Severity Level III violations or problems and that
the base civil penalty at this level is $55,000; half the amount
allowed by statute. The assessment process is not designed to maximize
penalties. Under the Atomic Energy Act, the NRC has authority to issue
penalties of $110,000 per violation per day.
---------------------------------------------------------------------------
In addition to the civil penalty assessment process, the
Enforcement Policy provides incentives to identify and correct
violations by exercising discretion and reducing or refraining from
issuing sanctions for (1) violations identified during extended
outages, (2) violations involving old design issues, (3) violations
identified as a result of corrective actions being taken in response to
previous violations, (4) violations involving certain discrimination
issues where the licensee, without government intervention, provides a
remedy to the person discriminated against and takes comprehensive
corrective action.
The purpose of the NRC enforcement program is not to penalize
licensees or maximize penalties, but to emphasize the need for
licensees to prevent violations and, when they occur, to identify and
correct them before events occur with potential impact on the public.
Compared to the numbers of licensee personnel, NRC has very few
inspectors available to confirm compliance with regulations. Licensee
employees are in the best position to identify noncompliances based not
only on their numbers, but also by their thorough knowledge of the
facilities. This capability can be rewarded by avoidance of Notices of
Violation or complete mitigation of civil penalties when licensee self-
identification reveals violations and the violations are corrected and
reasonable actions are taken to prevent recurrence.
Question 47. The NRC states that it rewards licensees through the
enforcement process ``by avoidance of Notices of Violation or complete
mitigation of civil penalties when licensee self identification reveals
violations, the violations are corrected and reasonable actions are
taken to prevent recurrence.'' Yet, in response to a question by
Congressman Schaefer, the NRC indicates that 40 percent of the level
four violations issued in 1997 were self-identified.
If these violations also were satisfactorily corrected, why was
enforcement action nevertheless taken?
Response. As a point of clarification, during 1997, approximately
40 percent of Severity Level IV violations were not formally cited
through mitigation discretion. A NonCited Violation documents a
noncompliance in an inspection report for tracking purposes, but does
not result in a formal enforcement action or require a licensee
response. It is recognition that while no violation is acceptable, the
licensee took positive action by identifying and correcting the
violation. Avoidance of formal enforcement action with the burden of a
response may provide incentives to identify and correct violations
without NRC involvement.
Question 48. The NRC takes enforcement action for low safety
significant violations because ``in different circumstances the
occurrence of the same or a similar violation may be more significant
because of the coincidence of other factors.'' This seems to provide
the NRC staff with an unlimited opportunity to conjure up scenarios
that may be extremely far afield from the original violation. Please
list all violations where this has been the basis for the imposition of
enforcement action in 1997-1998.
Response. The NRC does not maintain a list where this particular
factor has been the basis for enforcement actions. Development of such
a historical list would require manual review of inspection reports and
would involve significant resource expenditures. The underlying basis
of nonenforcement actions is the failure to comply with legally binding
regulatory requirements. The manner in which a violation is
dispositioned (i.e., escalated or non-escalated action, or Non-Cited
Violation) is based on an assessment of its safety significance. Safety
significance, as used in the enforcement program includes consideration
of the actual consequence, the potential consequence, as well as other
factors that may represent regulatory significance, e.g., repetition,
willfulness, pervasiveness. Severity Level IV violations by definition
are less serious than Severity Level III violations (``cause for
significant regulatory concern''), but are of more than minor concern;
i.e., if left uncorrected, they could lead to a more serious concern.
Evaluating and categorizing the severity of violations requires
judgment. The key to a fair assessment is that the facts be weighed and
reasonable scenarios be considered. For example, the failure to post a
high radiation area that has changing dose rates (such as a fuel
transfer canal) may not result in an actual consequence on a given
occasion because of the position of the fuel. However, it is reasonable
to conclude that the same failure to post the high radiation area could
just as easily result in an overexposure on another occasion due to the
new position of the fuel. The failure to perform a post-maintenance
test on a pump does not result in an actual consequence when the pump
was properly serviced and restored. However, it is reasonable to
conclude that the same failure on another pump could result in an
actual consequence, such as the pump failing to operate when called
upon to perform its safety function, had the pump been inoperable when
returned to service.
Question 49. (A) We understand the NRC is engaged in an effort to
review its assessment process, including the Senior Management Meeting
(Watch List process) and the Systematic Assessment of Licensee
Performance. We also understand that the vote sheets on the staff's
request to issue the revised assessment process for public comment
suggest that the Commission had significant concerns about the revised
process.
When do you expect the evaluation of the assessment process to be
completed?
Response. By January 1, 1999, the NRC staff will have completed the
evaluation of the assessment process and will have made recommendations
to the Commission for improvements to the process. Resolution of
public, industry, NRC staff and Commission comments play an integral
part in the recommendations for improvement. The public comment period
for improvements to the performance assessment process will end in
October 1998.
Question 49. (B) Given that the industry has suggested an
alternative assessment approach, is the NRC working with the industry
to address their concerns?
Response. Yes, the NRC is working with the industry to develop
improvements to the assessment process. Several meetings have been held
with representatives of the Nuclear Energy Institute to review the NEI
proposal for an alternative assessment approach. Further, the NRC held
a public workshop in September 1998, during which the NRC staff worked
with members of the industry and public to develop improvements to the
assessment and regulatory oversight processes.
Question 50. A primary concern expressed about the NRC's current
assessment process is the lack of definition of what constitutes
acceptable performance. Adding to this concern are the assessment's
subjectivity, lack of objective indicators, lack of safety focus, and
overemphasis on enforcement actions.
(A) How does the NRC's assessment process address each of these
concerns?
Response. The NRC is currently working with industry, the public,
and other stakeholders to develop a revised assessment process. A 4-day
public workshop is scheduled for September 1998 to expedite development
of the improvements and to seek stakeholder input. The proposed
improvements will be provided to the Commission in early January 1999
for approval. The assessment process improvements will be directed at
increasing the use of objective, risk-informed (where possible)
performance indicators in the NRC assessment process. This will
decrease subjectivity, add objective indicators, and increase safety
focus. This will also reduce the emphasis on enforcement actions. The
goal is to reduce the influence of enforcement actions on the
assessment process such that enforcement actions would override
performance indicator results in only very limited circumstances.
Question 50. (B) Does the NRC's process eliminate the ``Watch
List'' as it currently exists?
Response. The effectiveness of the NRC ``Watch List'' is being
evaluated. It is possible that the proposal in early January 1999 will
include a recommendation to either modify or eliminate the ``Watch
List,'' but the Commission has not yet made this decision.
Question 50. (C) Will the revised assessment process change the
NRC's inspection and enforcement processes to improve the safety focus
of each of these oversight activities? If so, please describe the
contemplated changes.
Response. Review efforts are underway to identify improvements to
the inspection and enforcement processes that will increase their
safety focus. Changes to the NRC's inspection and enforcement process
will be coordinated with changes to the assessment process to improve
the safety focus and integration of all three processes. Changes being
contemplated include developing and implementing a risk-informed
baseline inspection program and improving the safety focus of NRC
violations. (See question 27 for an additional discussion on the
possible changes to the NRC programs and procedures.)
Question 51. We understand that the NRC's initial proposal for its
revised assessment process included review of licensee management
effectiveness. Among the items cited for review were ``organizational
environment, shared perception of the organization including the
traditions, values, customs, practices and socialization processes.''
Although the review of these features is not explicitly included in the
revised assessment approved for public comment, SECY 98-045 states that
the staff intends to continue to assess ways to evaluate management
effectiveness.
What NRC regulation requires it to review licensee management
effectiveness?
Response. The NRC's regulations do not explicitly require the
evaluation of plant management.
After several recent reviews of this area, the NRC has decided that
it will continue its practice of conducting performance-based
inspections by observing the conduct of operations, the material
condition of the plant, the performance of licensee personnel, the
quality of engineering work, and the licensee's performance in problem
identification and resolution. The NRC will continue to examine
operational events to identify root causes, such as human error, design
deficiencies, and administrative controls. The process for assessing
plant performance will continue to be based on inspection findings,
enforcement actions, operational events, and performance indicators. It
has been and will remain the NRC's practice to conduct performance-
based inspections in all areas of facility operation and design and, on
the basis of the inspection results, to draw conclusions about the
effectiveness of the licensee's management to the extent that it
relates to safe operation of the facility.
In its May 30, 1997, report entitled, ``Nuclear Regulation:
Preventing Problem Plants Requires More Effective NRC Action,'' the
General Accounting Office (GAO) stated that NRC does not have an
effective process for ensuring that licensees maintain competent
management in their nuclear plants. In addition, the GAO recommended
that the assessment of management's competency and performance be a
mandatory component of NRC's inspection process.
In response to the GAO report and as part of the NRC's effort to
improve the Senior Management Meeting process, the staff investigated
the development of management performance assessment tools for
improving the current plant performance evaluation methodology as
stated in SECY 98-045. This effort included two one-week-long workshops
in August 1997 and December 1 997 involving NRC staff and experts from
the research community. While the consensus of the workshop
participants was that management and organizational factors do
influence human performance and hardware operation, it was also decided
that a management assessment based on the current inspection program
data would not likely result in a leading indicator of plant
performance or in a comprehensive and direct assessment of licensee
management performance.
On March 26, 1998, the staff proposed to the Commission in SECY-98-
059, five options for assessing the performance and competency of
licensee management and delineated associated policy issues for the
Commission's consideration and comment. This paper followed up on the
views expressed in the staff's earlier paper, SECY-98-045. The options
were summarized as follows:
1. Continue to conduct performance-based inspections in all areas
of facility operation design; however, do not attempt to infer or
articulate conclusions regarding the performance or competency of
licensee management.
2. Infer licensee management performance from the results of the
current performance-based inspection program on overall plant
performance. Strengthen guidance to improve the quality and consistency
of the management performance assessment.
3. Assess the performance of licensee management through targeted
operational performance inspections using specific inspection
procedures, trained staff, and contractors.
4. Assess the performance of licensee management by evaluating and
documenting management performance attributes as part of the routine
inspection program. Implement the necessary regulations. Revise the
inspection, staff training, and qualification programs accordingly.
5. Assess the competency of licensee management by evaluating
management competency attributes using specific inspection procedures,
trained staff, and contractors. Implement the necessary regulations.
Revise the inspection, staff training, and qualification programs
accordingly.
After considering the five options contained in SECY-98-059, the
Commission approved only those elements of Option 2 associated with the
current staff practice of inferring licensee management performance
from performance-based inspections, routine assessments, and event
followup. The Commission also determined that efforts to develop
leading indicators of performance should not use licensee management
performance or competency as an input, and that the inspection program
should focus on performance-based inspection findings. In addition, the
Commission approved the elimination of any fiscal year 1998 resource
expenditures specifically directed toward developing a systematic
method of assessing management performance and disapproved any use of
fiscal year 1999 or fiscal year 2000 resources for these purposes.
As a result, the NRC staff is currently implementing the inspection
program as outlined, in part, by Option 2, which requires no additional
inspection effort or resources above those required for implementing
the original inspection program. The NRC staff will continue its
practice of conducting performance-based inspections by observing the
conduct of operations, the material condition of the plant, the
performance of licensee personnel, the quality of engineering work, and
the licensee's performance in problem identification and resolution.
The NRC will continue to examine operational events to identify root
causes, such as human error, design deficiencies, and administrative
controls. The process for assessing plant performance will continue to
be based on inspection findings, enforcement actions, operational
events, and performance indicators. It has been and will remain the
NRC's practice to conduct performance-based inspections in all areas of
facility operation and design and, on the basis of the inspection
results, to draw conclusions about the effectiveness of the licensee's
management to the extent that it relates to safe operation of the
facility.
Finally, the NRC staff is currently exploring improvements to the
process for assessing plant performance. This effort is known as the
integrated review of the assessment process (IRAP). A trial application
of this process was conducted in the spring of 1998 and utilized an
updated version of the NRC Plant Performance Template, which consisted
of five performance categories (see response to GAO Recommendation 2,
dated January 28, 1998). However, the assessment area regarding
management effectiveness was not included on the basis of the
Commission's approval of only those elements of Option 2 associated
with the current staff practice of inferring licensee management
performance. The staff will continue using the NRC Plant Performance
Template for the evaluation of the remaining five performance
categories and the results will be discussed during public workshops
scheduled for the fall of 1998.
Question 52. In addition, the NRC stated in response to Congressman
Schaefer's questions that the staff has identified ``regulatory
excellence strategies'' to improve the NRC's regulatory program.
(A) Please list each regulation eliminated or modified under these
programs since 1990.
Response. Prior to 1992 the NRC did not categorize rulemakings as
to whether they might be safety enhancements or promulgated to provide
additional regulatory flexibility or burden relief. However, what
follows is a list of rulemakings specifically focused on providing
power reactor licensees with additional regulatory flexibility and
burden relief. Over that same period, 1992 through 1997, the NRC
promulgated approximately 50 rulemakings affecting nuclear power
reactor licensees. 45 Hence, as can be seen from the list below, about
half of NRC's reactor rulemaking effort is directed at regulatory
flexibility and burden relief.
burden reduction/regulatory reform/added flexibility rulemakings
published final in:
1992
Frequency of Radiological Effluent Reports, Part 50.36a
Frequency of FSAR Updates, Part 50.71
Frequency of Design Change Reports, Part 50.59
Use of Fuel with Zirconium Based Cladding, Part 50.44, 50.46,
Appendix K
Partial Withdrawal of NRC Information Collection Requirements for
Fitness For Duty Programs, Part 26
Disposal of Waste Oil by Incineration
1993
Monitoring the Effectiveness of Maintenance at Nuclear Power
Plants, Part 50.65a.3
1994
Changes to Random Testing Rates for Fitness to Duty Programs, Part
26
Renewal of Licenses and Requalification Requirements for Licensed
Operators, Part 55
1995
License Renewal, Part 54
License Renewal for NPPs; Scope of Environmental Effects, Part 51
Procurement of Commercial Grade Items by Nuclear Power Plant
Licensees, Part 21
Performance-Based Primary Reactor Containment Leakage Testing for
Water-Cooled Power Reactors, Part 50) (Part 50, Appendix J. Option B)
Change To Nuclear Power Reactor Security Requirements Associated
With
Containment Access Control, Part 73.55 (d)(8)
Physical Security Plan Format Changes, Parts 50, 70
Incorporate TS Criteria, Part 50.36
Radiation Protection Requirements; Amended Definitions and
Criteria, Parts 19, 20
1996
Codes and Standards for Nuclear Power Plants (ASME Code, Section
Xl, Division 1
Subsection IWE and Subsection IWL), Part 50
Constraint Level for Air Emissions of Radionuclides, Part 20
Decommissioning of Nuclear Power Reactors, Part 50
Reactor Site Criteria; Including Seismic and Earthquake Engineering
Criteria for Nuclear Power Plants, Parts 50, 52, 100
1997
Reduction In Nuclear Power Reactor Security Requirements Associated
With Insider Threat, Part 73.55
Design Certification for Advanced Boiling Water Reactor (ABWR) AND
SYSTEM 80+, Part 52
Radiological Criteria for License Termination of Nuclear
Facilities, Parts 20, 30, 40, 50, 51, 70, 72
1998
Revision to Nuclear Power Reactor Decommissioning Financial
Assurance Implementation Requirements, 10 CFR 50.2 and 10 CFR 50.75
final rule sent to the Federal Register for publication--week of
September 21, 1998
Audit Frequency for Emergency Planning and Security, Part 50, PRM-
50-59, PRM-50-60 final rule to be sent to the Federal Register for
publication by December 1998
Question 52. (B) Please describe in detail the actions that have
been taken as a result of the implementation of the ``regulatory
excellence strategies.''
Response. In April 1998, the NRC staff presented to the Commission
a draft Excellence Plan describing in detail 13 strategies intended to
improve the effectiveness and efficiency of the NRC. The Commission
considered that, in light of the changes in the NRC's planning,
budgeting, and performance management process that have occurred as a
result of the Government Performance and Results Act of 1993, there was
no need to maintain the Excellence Plan as a separate formal agency
document. The staff was directed to ``sunset'' this plan as a separate
document, and activities from these strategies were integrated into the
various operating plans of the organizational entities responsible for
each strategy.
Consistent with this approach and the description of the strategies
in the draft Excellence Plan, significant activities are ongoing in the
following areas:
<bullet> Improvement of the reactor inspection program
<bullet> Improvement of the licensing support and regulatory oversight
of operating reactors
<bullet> Use of risk insights to enhance safety decision making, make
more efficient use of NRC resources, and reduce burden on licensees
46
<bullet> Improvement of the medical regulatory program by modifying 10
CFR Part 35 to be more risk-informed and performance based
<bullet> Development of a process to identify candidate issues for
improving the effectiveness and efficiency of rules, standards,
regulatory guidance, and their application Increase in the
effectiveness and efficiency of the regulatory process by
expediting evaluation of industry initiatives and promoting more
rapid adoption of consensus standards
<bullet> Assessment of core capability needs by comparing requirements
to current availability
<bullet> Assessment of the effectiveness, including integration and
data sharing, of information systems supporting NRC's major
business areas
<bullet> Improvement of the information systems supporting resource
management (STARFIRE)
<bullet> Improvement of information systems supporting document and
records management (ADAMS)
<bullet> Improvement of information systems supporting the reactor
inspection and licensing programs (Reactor Program System--RPS)
Question 53. In response to a question by Congressman Schaefer, the
NRC stated that there is an initiative to transition to more risk-
informed and, when appropriate, performance based regulatory
approaches. What has the agency done to apply risk information to add,
remove or modify NRC regulations? Please list all regulations that have
been added, removed or modified using this process since 1990? 1994?
Response. Since the first nuclear reactor PRAs, the NRC has
increasingly used risk information to prioritize and resolve safety
issues and has issued reactor-related regulations directly related to
risk insights: requirements for reduction of risk from anticipated
transients without scram events for light-water-cooled nuclear power
plants (10 CFR 50.62, April 1989) and loss of alternating current power
(10 CFR 50.63, June 1988). PRA played a key role in the System 80+ and
ABWR designs, for which standard design certifications were issued
(Appendices A and B to 10 CFR Part 52, May 1997). In 1995, the
Commission issued a policy statement to declare the agency's commitment
to increased use of PRA methods and insights in its reactor regulatory
activities. The NRC has taken a risk-informed or performance-based
approach in the following reactor-related rulemakings: promulgation of
performance-based containment leakage testing requirements (10 CFR 50
Appendix J. option B. September 1995), requirements for monitoring the
effectiveness of maintenance at nuclear power plants (10 CFR 50.65,
July 1996), changes to the required frequency of FSAR updates (10 CFR
50.71 (e)(4), August 1992), and technical specifications (10 CFR
50.36(c)(2)(ii)(D), July 1996).
In the materials area, the NRC used risk information in 1990 to
develop its policy on Below Regulatory Concern, whose purpose was to
reduce burdens on industry while continuing to protect public health
and safety. (This policy was later rescinded at the direction of
Congress.)
The Commission is working to achieve an appropriate balance between
deterministic and risk-informed regulations and between prescriptive
and performance-based regulations. The overarching 10 CFR Part 20,
``Standards for Protection against Radiation,'' contains quantitative
radiation protection standards that apply to all licensees. These
standards establish limits on allowable doses (which can be converted
to risk) and are implemented using a fundamentally performance-based
approach. Thus, the central standards on which all nuclear materials
regulation is ultimately based are implemented at a first level using a
risk-informed, performance-based regulatory approach. There have been
several revisions to 10 CFR Part 20, which are risk-informed and
performance based. These include revision to the criteria for the safe
release from hospitals of individuals who have been administered
radioactive material, revision of the monitoring criteria for declared
pregnant workers and minors, and radiological criteria for
decontamination and decommissioning.
Recent revisions to 10 CFR Parts 34, ``Licenses for Industrial
Radiography and Radiation Safety Requirements for Industrial
Radiographic Operations,'' and 36, ``Licenses and Radiation Safety
Requirements for Irradiators,'' were developed using risk information.
In addition the Commission, in revising 10 CFR Part 35, ``Medical Uses
of Byproduct Material,'' is restructuring it into a risk-informed, more
performance-based regulation. Modifications to Part 39, ``Licenses and
Radiation Safety Requirements for Well Logging,'' using risk
information are currently ongoing to address newer technology. For some
uses of byproduct material, such as radiography, medical uses,
irradiators, and well logging, there is both a potential for and a
history of overexposures. Therefore, while these regulations are risk-
informed, there are situations that require prescriptive requirements
for higher risk activities.
The following materials-related regulations were published between
1990 and 1993:
----------------------------------------------------------------------------------------------------------------
Title Publication Date FRN Notice
----------------------------------------------------------------------------------------------------------------
Use and Preparation of Radiopharmaceuticals For Diagnosis, 8/23/90 55 FR 34513
Therapy, or Medical Research (Interim Rule)..................
Standards for Protection Against Radiation (Part 20).......... 5/21/91 56 FR 23360
Twenty-Four Hour Notification of Incidents For Non-Rectors.... 8/16/91 56 FR 40757
Licenses and Radiation Safety Requirements for Large 2/09/93 58 FR 7715
Irradiators..................................................
----------------------------------------------------------------------------------------------------------------
The following materials-related regulations have been published
since 1994:
----------------------------------------------------------------------------------------------------------------
Title Publication Date FRN Notice
----------------------------------------------------------------------------------------------------------------
Change to Part 40, Appendix A Uranium Tailings Regulation; 6/01/94 59 FR 28220
Conforming NRC Requirements to EPA Standards.................
Use And Preparation of Radioparmaceuticals For Diagnosis 12/02/94 59 FR 61767
Therapy, or Medical Research.................................
Notification of Incidents or Accidents, 10 CFR Part 72........ 12/14/94 59 FR 64283
Preparation, Transfer for Commercial Distribution, and Use of 1/04/95 60 FR 322
Byproduct Material for Medical Use, Revised Final Rule, Part
32...........................................................
Administration of Radiopharmaceuticals to The Wrong Patient, 9/20/95 60 FR 48612
Part 35......................................................
Criteria For Release of Patients Administered Byproduct 1/29/97 62 FR 4120
Material 10 CFR Parts 20 and 35..............................
Radiography and Radiation Safety Requirements For Radiography 5/28/97 62 FR 28948
Operations, Revision To 10 CFR Part 34.......................
Radiological Criteria For Decommissioning..................... 7/21/97 62 FR 39058
Medical Use of Carbon-14 For the Detection of Helicobacter 12/2/97 62 FR 63634
Pylori-RM#432................................................
Requirements for Shipping Packages Used to Transport Vitrified 6/15/98 63 FR 32600
Wastes Containing PU [Part 71]...............................
Revision of Prototype Testing Requirements for Watches 6/17/98 63 FR 32969
Containing Tritium [Sec. 3214]...............................
Minor corrections, clarifying changes and a minor policy 7/23/98 63 FR 39477
change [Part 20].............................................
----------------------------------------------------------------------------------------------------------------
Question 54. The NRC has stated that where requirements exist that
have no safely benefit, are duplicative, unnecessary or unnecessarily
burdensome, the NRC can and should take action to modify or remove such
requirements.
Will the NRC conduct a review of each of its regulations to
identify those that should be eliminated based upon the above criteria?
Response. Over the past several years, the NRC has conducted a
number of regulatory and burden reduction rulemakings in several areas
including license renewal, decommissioning, and standard design
certification. However, at present resources do not permit the NRC to
undertake a systematic section-by-section assessment and 48 possible
revision of its portion of Title 10 of the Code of Federal Regulations.
Nevertheless, the NRC remains committed to continuing efforts to modify
or eliminate regulations to improve safety, reduce unnecessary licensee
burden and improve staff efficiency; for example, the ongoing revisions
of 10 CFR 50.59 and Part 35 and use of a revised source term. The
Commission recently increased rulemaking resources available to the
Office of Nuclear Reactor Regulation (NRR) in the revised fiscal year
1999 and the proposed fiscal year 2000 budgets to increase burden
reduction rulemakings. Accordingly, the NRC intends to continue
discussions and seek new opportunities to work with the industry on
regulatory requirements which may need reevaluation as potential
candidates for burden relief.
Question 55. The NRC recently issued the results of a survey on NRC
safety culture and climate. Some of the information obtained through
that survey seems to indicate that the Commission and senior management
does not have the full support of the staff in many of the important
initiatives the Commission has identified as top priorities. For
example, only 32 percent of NRC employees believe that the agency's
increased focus on risk-informed performance based regulation would
improve the agency's regulatory effectiveness.
(A) What steps will the Commission take to obtain the support of
NRC staff in order to carry out the Commission's stated intent to focus
on risk-informed performance based regulation?
(B) What steps will the Commission take to address the fact that
only 25 percent of NRC employees believe that NRC senior management is
doing a good job in implementing programs and processes for improving
regulatory effectiveness?
(C) What steps will the Commission take to address the fact that
only 24 percent of NRC employees believe that NRC senior management is
doing a good job in providing the tools and resources required for
improving regulatory effectiveness?
(D) What steps will the Commission take to address the fact that
only 15 percent of NRC employees believe that NRC senior management is
doing a good job of using employee input to improve regulatory
effectiveness? (E) What steps will the Commission take to address the
fact that only 20 percent of NRC employees believe that NRC senior
management is doing a good job ``leading by example'' in the area of
regulatory effectiveness?
Response. We recognize that the support and endorsement of the NRC
staff will be critical to success in implementation of more risk-
informed and performance-based regulation. Our implementation plans in
this regard will focus on clear and extensive communication between
staff and management and solicitation of staff input on effective
implementation strategies.
The results of the safety culture and climate survey were only
recently presented to the staff by the Inspector General's (IG's)
contractor. The staff has been reviewing the individual results and the
Executive Director for Operations has directed that a plan of action be
formulated by the end of this year. An interim review is scheduled for
the end of October and Office Directors and Regional Administrators
have been asked to provide input by the end of September. We are
currently developing an internal communications plan which has as its
primary goals, communicating the need for change and soliciting active
interaction and participation by the staff in the change process.
Clearly, the broad implications of the survey are that NRC senior
managers have a substantial challenge ahead to engage the staff in
meaningful improvements to regulatory effectiveness.
Question 56. The NRC has been subjected to significant criticism
for the length of time it has taken to render decisions in licensing
actions. The Louisiana Enrichment Services, L.P. (LES) application for
a uranium enrichment facility license is a recent example of the
breakdown of the NRC's licensing process. As a result of delay in the
NRC licensing process, LES recently withdrew its license application
after spending more than $30 million to prepare and process it and
participating in the licensing process for more than 7 years. The NRC's
failure to resolve LES's licensing issues in a timely manner occurred
despite the fact that Congress had amended the Atomic Energy Act
specifically to mandate the use of a streamlined, one stage licensing
process for uranium enrichment facilities like the one proposed by LES.
Given that there are now license renewal applications being submitted,
we are very concerned that the same delays not be experienced by those
applicants.
(A) What action will the NRC take to address the obvious need to
reform its licensing process so that future license applicants will not
be subjected to the same delays and lack of discipline experienced by
LES?
Response. The slow pace and delays that characterized the Louisiana
Energy Services (LES) proceeding had many causes. In retrospect it is
clear that in several 49 ways the NRC could have done a more efficient
job. The Commission through its July 28, 1998, ``Statement of Policy on
Conduct of Adjudicatory Proceedings'' (enclosed) has taken initial
action to ensure that the licensing process will function more
effectively in future proceedings of this nature, and the Commission
plans further steps, described later in this response.
Nevertheless, the problems that delayed LES cannot all be
attributed to ``lack of discipline'' or defects In the licensing
process. The LES proceeding involved a first-of-a-kind application for
a private enrichment facility, involving a technology which had not
previously been licensed by the Commission. New standards for decision
had to be established by the Commission at the outset, and it turned
out that these were not always easy to apply. During both the technical
review and adjudicatory process, a number of novel legal and technical
issues had to be addressed. Setting more precise standards and
providing clearer guidance at the beginning would have reduced
subsequent litigative controversy. These needs are now recognized, and
the ``lesson learned'' will be applied in future licensing actions.
With respect to the staff's technical review in the LES proceeding,
it is now apparent that the application submitted by LES was not
sufficient to enable the staff's review to be conducted on a timely
basis. While the NRC staff could have addressed the application's
shortcomings more aggressively, the applicant was not fully responsive
to staff requests for additional information.
In regard to the LES adjudicatory process, several issues of first
impression were brought to the Commission's attention but were not
always resolved in a timely manner. In addition, in an attempt to
ensure that all issues were thoroughly addressed, the Licensing Board
allowed a large amount of information into the record, without
insisting on adequate sponsorship by the parties to explain the
significance of that information. This material then had to be dealt
with by the Board in reaching its decisions, which were in turn
delayed. Even allowing for the complexity of the case, however, the
Licensing Board's decisions in LES were excessively delayed, as the
Licensing Board itself has acknowledged. Recent directives by the Chief
Administrative Judge of the Atomic Safety and Licensing Board Panel
that the Board's judges should not allow into evidence unsponsored and
unexplained documents should substantially reduce this problem.
The Commission has attempted to address sources of potential delay
in future licensing actions in several ways. The staff now prepares a
detailed review schedule for significant licensing actions such as
license renewal, including the need to ensure the adequacy of the
license application itself and for bringing emerging technical issues
to NRC management attention and, if necessary, to the Commission for
guidance (both matters which also contributed to the delay of the LES
proceeding). In addition, the Commission has moved to streamline the
adjudicatory process, while still ensuring that a fair hearing is
conducted and a clear and complete record is created. The Commission
has commenced a study of the entire hearing process and expects to
receive staff recommendations by the end of this year on specific
changes that would make NRC proceedings more efficient and timely. The
Commission expects that this study will specifically address the
question of need for legislation to streamline the hearing process as
well as the viability of rulemaking, without legislation, to streamline
that process.
The NRC will seek legislation that supports the NRC's reading of
section 189a of the Atomic Energy Act to reflect the reading that
formal adjudications are not required. Further, with the anticipated
application from USEC for the AVLIS uranium enrichment process expected
early next year, the NRC will consider seeking legislation that would
modify section 193's inflexible approach to hearings.
In the interim, as noted above, the Commission has developed and
issued a ``Statement of Policy on Conduct of Adjudicatory Proceedings''
which provides guidance to the licensing boards and parties to
Commission proceedings on how the Commission expects its proceedings to
be conducted. The Policy Statement encourages licensing boards to
establish and adhere to case-specific schedules, to shorten filing and
response times where practical, to manage discovery to avoid
unnecessary delays in that stage of the adjudicatory process, to make
sure that the parties comply with the Commission's regulations
governing the submission of admissible contentions, and to issue
decisions in a timely manner. It also stresses the obligations of all
parties to comply with the Commission's Rules of Practice as well as
their other obligations as participants, such as, with respect to
submitting contentions and offering evidence.
The Policy Statement further makes it clear that the Commission
itself will carefully and actively monitor ongoing licensing
proceedings to ensure that they are conducted expeditiously and that
the boards, staff and other parties receive prompt guidance on emerging
technical, policy and legal issues, as necessary. Consistent with the
desire for expeditious processing of license applications, the
Commission 50 on August 19, 1998 issued an order giving guidance and
recommending a schedule to the Licensing Board that will preside over
the licensing renewal proceeding for the Calvert Cliffs Nuclear Power
Plant. On September 15, 1998, the Commission issued a similar order to
govern the license renewal proceeding for Oconee Nuclear Station, Units
1, 2 and 3. Moreover, the Commission has published a proposed rule that
would establish new, informal procedures for license transfer hearings
that could substantially reduce the time for such hearings.
______
Enclosure: Statement of Policy
united states of america nuclear regulatory commission
commissioners: shirley jackson, chairman; nils j. diaz; edward
mcgaffigan, jr.
statement of policy on conduct of adjudicatory proceedings cli-98-12
I. Introduction
As part of broader efforts to improve the effectiveness of the
agency's programs and processes, the Commission has critically
reassessed its practices and procedures for conducting adjudicatory
proceedings, within the framework of its existing Rules of Practice in
10 C.F.R. Part 2, primarily Subpart G. With the potential institution
of a number of proceedings in the next few years to consider
applications to renew reactor operating licenses, to reflect
restructuring in the electric utility industry, and to license waste
storage facilities, such assessment is particularly appropriate ensure
that agency proceedings are conducted efficiently and focus on issues
germane to the proposed actions under consideration. In its review, the
Commission has considered its existing policies and rules governing
adjudicatory proceedings, recent experience and criticism of agency
proceedings, and innovative techniques used by our own hearing boards
and presiding officers and by other tribunals. Although current rules
and policies provide means to achieve a prompt and fair resolution of
proceedings, the Commission is directing its hearing boards and
presiding officers to employ certain measures described in this policy
statement to ensure the efficient conduct of proceedings.
The Commission continues to endorse the guidance in its current
policy, issued in 1981, on the conduct of adjudicatory proceedings.
Statement of Policy on Conduct of Licensing Proceedings, CLI-81-8, 13
NRC 452 (May 20, 1981); 46 Fed. Reg. 28, 533 (May 27, 1981). The 1981
policy statement provided guidance to the Atomic Safety and Licensing
Boards (licensing boards) on the use of tools, such as the
establishment and adherence to reasonable schedules and discovery
management, intended to reduce the time for completing licensing
proceedings while ensuring that hearings were fair and produced
adequate records. Now, as then, the Commission's objectives are to
provide a fair hearing process, to avoid unnecessary delays in the
NRC's review and hearing processes, and to produce an informed
adjudicatory record that supports agency decision making on matters
related to the NRC's responsibilities for protecting public health and
safety, the common defense and security, and the environment In this
context, the opportunity for hearing should be a meaningful one that
focuses on genuine issues and real disputes regarding agency actions
subject to adjudication. By the same token, however, applicants for a
license are also entitled to a prompt resolution of disputes concerning
their applications. The Commission emphasizes its expectation that the
boards will enforce adherence to the hearing procedures set forth in
the Commission's Rules of Practice in 10 C.F.R. Part 2, as interpreted
by the Commission. In addition, the Commission has identified certain
specific approaches for its boards to consider implementing in
individual proceedings, if appropriate, to reduce the time for
completing licensing and other proceedings. The measures suggested in
this policy statement can be accomplished within the framework of the
Commission's existing Rules of Practice. The Commission may consider
further changes to the Rules of Practice as appropriate to enable
additional improvements to the adjudicatory process.
II. Specific Guidance
Current adjudicatory procedures and policies a latitude to the
Commission, its licensing boards and presiding officers to instill
discipline in the hearing process and ensure a prompt yet fair
resolution of contested issues in adjudicatory proceedings. In the 1981
policy statement, the Commission encouraged licensing boards to use a
number of techniques for effective case management including: setting
reasonable schedules for proceedings; consolidating parties;
encouraging negotiation and settlement conferences; carefully managing
and supervising discovery; issuing timely rulings on preheating
matters; requiring trial briefs, prefiled testimony, and cross-
examination plans; and issuing initial decisions as soon as practicable
after the parties file proposed findings of fact and conclusions of
law. Licensing boards and presiding officers in current NRC
adjudications use many of these techniques, and should continue to do
so.
As set forth below, the Commission has identified several of these
techniques, as applied in the context of the current Rules of Practice
in 10 C.F.R. Part 2, as well as variations in procedure permitted under
the current Rules of Practice that licensing boards should apply to
proceedings. The Commission also intends to exercise its inherent
supervisory authority, including its power to assume part or all of the
functions of the presiding officer in a given adjudication, as
appropriate in the context of a particular proceeding. See, e.g.,
Public Service Co. of New Hampshire (Seabrook Station, Units 1 and 2),
CLI-9-3, 31 NRC 219, 229 (1990). The Commission intends to promptly
respond to adjudicatory matters placed before it, and such matters
should ordinarily take priority over other actions before the
Commissioners.
1. Hearing Schedules
The Commission expects licensing boards to establish schedules for
promptly deciding the issues before them, with due regard to the
complexity of the contested issues and the interests of the parties.
The Commission's regulations in 10 C.F.R. Sec. 2.718 provide licensing
boards all powers necessary to regulate the course of proceedings,
including the authority to set schedules, resolve discovery disputes,
and take other action appropriate to avoid delay. Powers granted under
section 2.718 are sufficient for licensing boards to control the
supplementation of petitions for leave to intervene or requests for
hearing, the filing of contentions, discovery, dispositive motions,
hearings, and the submission of findings of fact and conclusions of
law.
Many provisions in Part 2 establish schedules for various filings,
which can be varied ``as otherwise ordered by the presiding officer.''
Boards should exercise their authority under these options and 10
C.F.R. Sec. 2.718 to shorten the filing and response times set forth in
the regulations to the extent practical in a specific proceeding. In
addition, where such latitude is not explicitly afforded, as well as in
instances in which sequential (rather than simultaneous) filings are
provided for, boards should explore with the parties all reasonable
approaches to reduce response times and to provide for simultaneous
filing of documents.
Although current regulations do not specifically address service by
electronic means, licensing boards, as they have in other proceedings,
should establish procedures for electronic filing with appropriate
filing deadlines, unless doing so would significantly deprive a party
of an opportunity to participate meaningfully in the proceeding. Other
expedited forms of service of documents in proceedings may also be
appropriate. The Commission encourages the licensing boards to consider
the use of new technologies to expedite proceedings as those
technologies become available.
Boards should forego the use of motions summary disposition, except
upon a written finding that such a motion will likely substantially
reduce the number of issues to be decided, or otherwise expedite the
proceeding. In addition, any evidentiary hearing should not commence.
before completion of the staff's Safety Evaluation Report (SER) or
Final Environmental Statement (FES) regarding an application, unless
the presiding officer finds that beginning earlier, e.g., by starting
the hearing with respect to safety issues prior to issuance of the SER,
will indeed expedite the proceeding, taking into account the effect of
going forward on the staff's ability to complete its evaluations in a
timely manner. Boards are strongly encouraged to expedite the issuance
of interlocutory rulings. The Commission further strongly encourages
presiding officers to issue decisions within 60 days after the parties
file the last pleadings permitted by the board's schedule for the
proceeding.
Appointment of additional presiding officers or licensing boards to
preside over discrete issues simultaneously in a proceeding has the
potential to expedite the process, and the Chief Administrative Judge
of the Atomic Safety and Licensing Board Panel (ASLBP) should consider
this measure under appropriate circumstances. In doing so, however, the
Commission expects the Chief Administrative Judge to exercise the
authority to establish multiple boards only if: (1) the proceeding
involves discrete and severable issues; (2) the issues can be more
expeditiously handled by multiple boards than by a single board; and
(3) the multiple boards can conduct the proceeding in a manner that
will not unduly burden the parties. Private Fuel Storage, LL.C.
(Private Fuel Storage Facility), CLI-9-7, 47 NRC--(1998).
The Commission itself may set milestones for the completion of
proceedings. If the Commission sets milestones in a particular
proceeding and the board determines that any single milestone could be
missed by more than 30 days, the licensing board must promptly so
inform the Commission in writing. The board should explain why the
milestone cannot be met and what measures the will take insofar as is
possible to restore the proceeding to the overall schedule.
2. Parties' Obligations
Although the Commission expects its licensing boards to set and
adhere to reasonable schedules for the various steps in the hearing
process, the Commission recognizes that the boards will be unable to
achieve the objectives of this policy statement unless the parties
satisfy their obligations. The parties to a proceeding, therefore, are
expected to adhere to the timeframes specified in the Rules of Practice
in 10 C.F.R. Part 2 for filing and the scheduling orders in the
proceeding. As set forth in the 1981 policy statement, the licensing
boards are expected to take appropriate actions to enforce compliance
with these schedules. The Commission, of course, recognizes that the
boards may grant extensions of time under some circumstances, but this
should be done only when warranted by unavoidable and extreme
circumstances.
Parties are also obligated in their filings before the board and
the Commission to ensure that their arguments and assertions am
supported by appropriate and accurate references to legal authority and
factual basis, including, as appropriate, citation to the record.
Failure to do so may result in material being stricken from the record
or, in extreme circumstances, in a party being dismissed.
3. Contentions
Currently, in proceedings governed by the provisions of Subpart G,
10 C.F.R. Sec. 2.714(b)(2)(iii) requires that a petitioner for
intervention shall provide sufficient information to show that a
genuine dispute exists with the applicant on a material issue of law or
fact. \3\ The Commission has stated that a board may appropriately view
a petitioner's support for its contention in a light that is favorable
to the petitioner, but the board cannot do so by ignoring the
acquirements set forth in section 2.714(b)(2). Arizona Public Service
Co. (Palo Verde Nuclear Generating Station, Units 1, 2, and 3), CLI-91-
12, 34 NRC 149, 155 (1991). The Commission reemphasizes that licensing
boards should continue to require adherence to section 2.714(b)(2), and
that the burden of coming forward with admissible contentions is on
their proponent. A contention's proponent, not the licensing board, is
responsible for formulating the contention and providing the necessary
information to satisfy the basis requirement for the admission of
contentions in 10 C.F.R. Sec. 2.714(b)(2). The scope of a proceeding,
and, as a consequence, the scope of contentions that may be admitted,
is limited by the nature of the application and pertinent Commission
regulations. For example, with respect to license renewal, under the
governing regulations in 10 C.F.R. Part 54, the review of license
renewal applications is confined to matters relevant to the extended
period of operation requested by the applicant. he safety review is
limited to the plant systems, structures, and components (as delineated
in 1D C.F.R. Sec. 54.4) that will require an aging management review
for the period of extended operation or are subject to an evaluation of
time-limited aging analyses. See 10 C.F.R. dd 54.21 (a) and (c), 54.29,
and 54.30. In addition, the review of environmental issues is limbed by
rule by the generic findings In NUREG-1427, ``Generic Environmental
Impact Statement [GEIS) for License Renewal of Nuclear Plants.'' See 10
C.F.R. Sec. Sec. 55.71(d) and 51.95(c).
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\3\ ``[A]t the contention filing stage, the factual support
necessary to show that a genuine dispute exists need not be in
affidavit or formal evidentiary form and need not be of the quality
necessary to withstand a summary disposition motion''. Rules of
Practice for Domestic Licensing Proceedings--Procedural Changes in the
Hearing Process, Final Rule, 64 Fed. Reg. 33, 168, 33, 171 (Aug. 11,
1989).
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Under the Commission's Rules of Practice, a licensing board may
consider matters on its motion only where it finds that a serious
safety, environmental, or common defense and security matter exists. 10
C.F.R. Sec. 2.760a. Such authority is to be exercised only in
extraordinary circumstances. If a board decides to raise matters on its
own initiative, a copy of its ruling, setting forth in general terms
its reasons, must be transmitted to the Commission and the General
Counsel. Texas Utilities Generating Co. (Comanche Peak Steam Electric
Station, Units and 2), CLI-81-24, 14 NRC 614 (1981). The board may not
proceed further with sua sponte issues absent the Commission's
approval. The scope of a particular proceeding is limited to the scope
of the admitted contentions and any issues the Commission authorizes
the board to raise sua sponte.
Currently, 10 C.F.R. Sec. 2.714a allows a party to appeal a ruling
on contentions only if (a) the order wholly denies a petition for leave
to intervene (i.e., the order denies the petitioner's standing or the
admission of all of a petitioner's contentions) or (b) a party other
than the petitioner alleges that a petition for leave to intervene or a
request for a hearing should have been wholly denied. Although the
regulation reflects the Commission's general policy to minimize
interlocutory review, under this practice, some novel issues that could
benefit from early Commission review will not be presented to the
Commission. For example, matters of first impression involving
interpretation of 10 C.F.R. Part 54 may arise as the staff and
licensing board begin considering applications for renewal of power
reactor operating licenses. Accordingly, the Commission encourages the
licensing boards to refer rulings or certify questions on proposed
contentions involving novel issues to the Commission in accordance with
10 C.F.R. Sec. 2.730(f) early in the proceeding. In addition, boards
are encouraged to certify novel legal or policy questions related to
admitted issues to the Commission as early as possible in the
proceeding. The Commission may also exercise its authority to direst
certification of such particular questions under 10 C.F.R.
Sec. 2.718(i). The Commission, however, will evaluate any matter put
before it to ensure that interlocutory review is warranted.
4. Discovery Management
Efficient of the pretrial discovery process is critical to the
overall progress of a proceeding. Because a great deal of information
on a particular application is routinely placed in the agency's public
document rooms, Commission regulations already lima discovery against
the staff. See, e.g., 10 C.F.R. Sec. Sec. 2.720(h), 2.744. Under the
existing practice, however, the staff frequently agrees to discovery
without waiving its rights to object to discovery under the rules, and
refers any discovery requests it finds objectionable to the board for
resolution. This practice remains acceptable.
Application in a particular case of procedures similar to
provisions in the 1993 amendments to Rule 26 of the Federal Rules of
Civil Procedure or informal discovery can improve the efficiency of the
discovery process among other parties. The 1993 amendments to Rule 26
provide, in part, that a party shall provide certain information to
other parties without waiting for a discovery request. This information
includes the names and addresses, if known, of individuals likely to
have discoverable information relevant to disputed facts and copies or
descriptions, including location, of all documents or tangible things
in the possession or control of the party that are relevant to the
disputed facts. The Commission expects the licensing boards to order
similar disclosure (and pertinent updates) if appropriate in the
circumstances of individual proceedings. With regard to the staff, such
orders shall provide only that the staff identify the witnesses whose
testimony the staff intends to present at hearing. The licensing boards
should also consider requiring the parties to specify the issues for
which discovery is necessary; If this may narrow the issues requiring
discovery.
Upon the board's completion of rulings on contentions, the staff
will establish a case file containing the application and any
amendments to it, and, as relevant to the application, any NRD report
and any correspondence between the applicant and the NRC. Such a case
file should be treated in the same manner as a hearing file established
pursuant to 10 C.F.R. Sec. 2.1231. Accordingly, the staff should make
the case file available lo all parties and should periodically update
it.
Except for establishment of the case file, generally the licensing
board should suspend discovery against the staff until the staff issues
its review documents regarding the application. Unless the presiding
officer has found that starting discovery against the staff before the
staffs review documents are issued will expedite the hearing, discovery
against the staff on safety [issues may commence upon issuance of the
SER, and discovery on environmental issues upon issuance of the FES.
Upon issuance of an SER or FES regarding an application, and consistent
with such limitations as may be appropriate to protect proprietary or
other properly withheld information, the staff should update the case
file to include the SER and FES and any supporting documents relied
upon in the SER or FES not already included in the file.
The foregoing procedures should allow the boards to set reasonable
bounds and schedules for any.remaining discovery, e.g., by limiting the
number of rounds of interrogatories or rdepositions or the time for
completion of discovery, and thereby reduce the time spent in the pre-
hearing stage of the hearing process. In particular, the board should
allow only a single round of discovery regarding admitted contentions
related to the SER or the FES, and the discovery respective to each
document should commence shortly after As issuance.
III. Conclusion
The Commission reiterates its long-standing commitment to the
expeditious completion of adjudicatory proceedings while still ensuring
that hearings are fair and produce an adequate record for decision. The
Commission intends to monitor its proceedings to ensure that they are
being concluded in a fair and timely fashion. The Commission will take
action in individual proceedings, as appropriate, to provide guidance
to the boards and parties and to decide issues in the interest of a
prompt and effective resolution of the matters set for adjudication.
Dated at Rockville, Maryland, this 28th day of July, 1998
For the Commission
Annette Vietti-Cook,
Assistant Secretary of the Commission.
Question 57. The NRC has been subjected to substantial criticism
for its handling of the license transfer proceeding for Plant Vogtle.
While we understand that some of the inordinate length of the Vogtle
proceeding was due to the NRC Staff's on-going review of allegations,
the fact remains that it took four and one-half years after the
application was submitted for the license to be granted--and the
proceeding actually was terminated without a decision by the Atomic
Safety and Licensing Board through a settlement. We expect the rate of
license transfer requests to increase as the electric utility industry,
including the nuclear industry, begin operating in a competitive
environment. For example, PECO Energy and British Energy recently
announced plans to buy the Three Mile Island (TMI) nuclear plant. In
approximately 90 days, PECO is expected to file with the NRC its
application to transfer TMI's license to PECO. PECO has a long standing
history of solid performance as nuclear licensee. Assuming that there
is no public health and safety issue disclosed during the license
transfer process, these facts would seem to suggest that the NRC could
conduct a relatively speedy licensing process.
(A) Has the Commission issued guidance to the Atomic Safety and
Licensing Board Panel directing Boards to limit the scope of license
transfer, license amendment and license renewal proceedings to
pertinent issues? Please provide the guidance.
Response. At present the Commission's adjudicatory proceedings for
the transfer, amendment, or renewal of licenses are conducted pursuant
to the Commission's Rules of Practice in 10 C.F.R. Part 2. In the event
that a hearing request is filed by an intervener, the Commission's
regulations and practice require that the subject matter of the hearing
be limited to issues that are pertinent to the licensing action under
review. On July 28, 1998, the Commission issued a ``Statement of Policy
on Conduct of Adjudicatory Proceedings'' (henceforth, ``Policy
Statement'') In the Policy Statement, the Commission noted specifically
with respect to license renewal:
``The scope of a proceeding, and, as a consequence, the scope of
contentions that may be admitted, is limited by the nature of the
application and the pertinent regulations. For example, with
respect to license renewal, under the governing regulations in 10
C.F.R. Part 54, the review of license renewal applications is
confined to matters relevant to the extended period of operation
requested by the applicant. The safety review is limited to the
plant systems, structures, and components (as delineated in 10
C.F.R. 54.4) that will require an aging management review of the
period of extended operation or are subject to an evaluation of
time-limited aging analyses. See 10 C.F.R. 54.21(a) and (c), 54.29
and 54.30. In addition, the review of environmental issues is
limited by rule by the generic findings in NUREG-1427, ``Generic
Environmental Impact Statement (GEIS) for License Renewal of
Nuclear Plants'' See 10 C.F.R. Sec. Sec. 55.71 (d) and 51.95(c).
Thus, the Commission has directed that the issues for hearing
include only those necessary to resolve genuinely controverted issues
of law and fact raised by the participants that are material to the
Commission's ultimate decision whether to approve the application in
question. The Policy Statement also reiterates limits on the Licensing
Board's ability to introduce issues on their own by requiring
Commission approval for the admission and litigation of such sua sponte
issues.
The Commission also has the authority under existing statutes to
issue an order approving a license transfer during the pendency of a
hearing request. License amendments associated with a license transfer
similarly may be issued and made effective prior to the completion of a
hearing if the NRC makes a finding under section 189a.(I)(A) that the
amendments involve ``no significant hazards consideration.''
On September 11, 1998, the Commission published in the Federal
Register for a 30-day comment period a proposed rule that would
establish new, informal procedures for license transfer hearings that,
if promulgated as a final rule, could, in general, substantially reduce
the time for such hearings.
Question 57. (B) Has the Commission issued any guidance to the
Atomic Safety and Licensing Board Panel setting out schedules in
licensing cases or directing Boards to do so? Please provide the
guidance.
Response. The July 28, 1998 Policy Statement notes that ``[t]he
Commission expects licensing boards to establish schedules for promptly
deciding the issues before them, with due regard to the complexity of
the contested issues and the interests of the parties.'' Boards are
encouraged to exercise their authority ``to shorten the filing and
response times set forth in the regulations ``to the extent practical
in a specific proceeding.'' The Policy Statement also provides that the
Commission itself may set milestones for the completion of proceedings
and the Commission will monitor compliance with the milestone
schedules. The Commission has taken this step in the license renewal
proceeding recently initiated by the Baltimore Gas & Electric Company's
application to renew the operating licenses for its Calvert Cliffs
Nuclear Power Plant Units 1 and 2. In an order issued August 19, 1998,
the Commission directed the Licensing Board to set a schedule for any
hearing granted in this proceeding that will establish as a goal the
Issuance of a Commission decision on the pending application in about
2\1/2\ years from the time the application was received (April 1998).
In this order, the Commission also provided guidance concerning
specific milestones for the conclusion of significant steps in the
adjudicatory proceeding. For example, the Commission directs the
Licensing Board to complete its decision on intervention petitions and
contentions within 90 days of the date of the Commission's order. The
order then sets additional milestones in the event that a hearing is
granted and further directs that ``the Licensing Board should not grant
requests for extensions of time absent unavoidable and extreme
circumstances.'' Consistent with the Policy Statement, the Commission's
order in the Calvert Cliffs license renewal proceeding directs the
Licensing Board to inform the Commission promptly in writing if any
single milestone could be missed by more than 30 days, together with an
explanation why the milestone cannot be met and the measures the Board
will take to restore the proceeding to the overall schedule. On
September 15, 1998, the Commission issued a similar directive with
regard to the licensing renewal proceeding for Oconee Nuclear Station,
Units 1, 2, and 3.
Question 57. (C) What oversight process has the NRC established to
ensure that Commission's scheduler directions are adhered to by Atomic
Safety and Licensing Boards?
Response. The July 28, 1998, Statement of Policy declares:
The Commission itself may set milestones for the completion of
proceedings. If the Commission sets milestones in a particular
proceeding and the board determines that any single milestone could
by missed by more than 30 days, the licensing board must promptly
so inform the Commission in writing. The Board should explain why
the milestone cannot be met and what measures the Board will take
insofar as is possible to restore the proceeding to the overall
schedule. In a case-specific order issued on August 19, 1998 in the
Calvert Cliffs license renewal proceeding the Commission provided
guidance regarding milestones for the conclusion of significant
steps in the adjudicatory proceeding in the event that a hearing is
granted and directed the Licensing Board to inform the Commission
promptly if it appears that any single milestone could be missed by
more than 30 days, to explain why the milestone cannot be met, and
to specify the measures the Board will take to restore the
proceeding to the overall schedule. (See the response to the
previous question and attached order CLI-98-14).
In addition, agency adjudicatory proceedings are closely monitored
by the Office of Commission Appellate Adjudication which may recommend
issuance of Commission orders during the course of a proceeding to give
the licensing board guidance.
Question 57. (D) Will the Commission review the performance of the
Atomic Safety and Licensing Board Panel and its individual members? If
such a review has been conducted, when was that review performed? What
actions have been taken based upon the review?
Response. The Chairman, in consultation with the Commission, each
year prepares the annual performance appraisal of the Chief
Administrative Judge, Atomic Safety and Licensing Board Panel. To keep
the Commission apprised of the Panel's activities, the Chief
Administrative Judge prepares a written report for the Commission each
month which provides the status of ongoing proceedings. In addition,
the Chief Administrative Judge periodically meets with individual
Commissioners, including the Chairman, to discuss procedural matters.
Under the Administrative Procedure Act, discussion of substantive
matters pending before a Licensing Board is generally barred in these
meetings. The Commission, of course, acting in its adjudicatory
capacity, has the opportunity to review each decision issued by a
Licensing Board, provide guidance, and correct any errors. It would be
inappropriate for the Commission to provide performance appraisals for
Atomic Safety and Licensing Board members as this could be perceived as
compromising the independence of our administrative judges, thereby
reducing public confidence in the NRC licensing process. In 5 U.S.C.
4301(2)(d), Congress has exempted Administrative Law Judges from the
performance appraisal requirement and the Commission has chosen to do
the same for its Administrative Judges because they perform the same
functions as Administrative Law Judges.
Question 57. (E) Please provide a schedule for completion of all
changes the NRC will implement to ensure that its licensing process
does not impede the business/corporate decisions made by nuclear
utilities to address the competitive environment.
Response. On September 11, 1998, the Commission published in the
Federal Register for a 30-day comment period a proposed rule that would
establish new, informal procedures for license transfer hearings that
could substantially reduce the time to complete such hearings. These
procedures would be designed to provide for public input in the event
of requests for a hearing on a license transfer application, while at
the same time providing an efficient process that recognizes the time
sensitivity and typical nature of the issues normally present in
transfer cases.
Pursuant to the Commission's direction, the Office of the General
Counsel (OGC) is also reviewing the entire hearing process to identify
those areas where legislation might be needed or useful to address the
hearing process and to identify additional areas for rulemaking to
simplify and streamline the hearing process. OGC will forward its
analysis and recommendations to the Commission by the end of 1998.
The NRC will seek legislation that supports the NRC's reading of
section 1 89a of the Atomic Energy Act to reflect the reading that
formal adjudications are not required. Further, with the anticipated
application from USEC for the AVLIS uranium enrichment process expected
early next year, the NRC will consider seeking legislation that would
modify section 193's inflexible approach to hearings.
Question 58. (A) The NRC has participated in several pilot projects
(ISI/IST) to apply risk insights. However, it has taken the NRC 4 years
to develop implementation guidance for the application of the risk
insights. The industry is concerned about the lack of timeliness on the
part of the NRC. Please explain why it has taken more than 4 years to
develop implementation guidance for these applications?
Response. As discussed in the response to question No. 24, the
primary reason that the risk-informed pilot licensing activities have
taken longer than other past pilot licensing activities is that they
have been linked with the development of new NRC procedures and
policies, which required resolution of number of complex and difficult
technical issues applicable to all risk-informed licensing reviews. The
most significant issues include: (1) developing a risk-informed
framework and acceptance guidelines that could be applied in plant-
specific licensing decisions, including the pilot applications; (2)
defining and articulating the scope and quality of a PRA being used to
support a licensing proposal; and (3) developing a practical approach
to addressing uncertainty in PRAs. The process for resolving these
issues included the development of candidate resolutions with
recommendations by the NRC staff, review and consideration of the
various options by the Commission and its independent advisory groups,
and review and comment by the public. As regulatory positions were
being established through this process, pilot licensees were asked to
supplement their original proposals with information to address these
positions. While this process has been time consuming, the NRC staff
believes that it was necessary to ensure a coherent and predictable
process for conducting licensing reviews that satisfied all of the
objectives of the Commission's policy statement on the use of PRA,
i.e., to enhance the process for making safety decisions, to make more
efficient use of agency resources, and to remove unnecessary burdens on
licensees.
Question 58. (B) What actions will the NRC take to streamline its
process for those applicants who seek to use the implementation
guidance?
Response. The NRC committed to several actions to expedite the
review process by increasing the priority for risk-informed licensing
action reviews. Allocation of staff resources will be based on
potential safety benefits of the action, and on potential savings of
staff and licensee resources. In addition, a lead project manager for
the coordination of risk-informed, performance-based licensing actions
has been identified. This lead PM will identify, monitor, and
coordinate risk-informed licensing actions; keep track of the review
schedules; help identify problems that may require management
attention; and coordinate followup actions (if any). Also, the
management oversight steering committee has been reestablished to
provide policy, technical, and priority guidance on risk-informed
regulation. Finally, a risk-informed licensing panel is assisting in
focusing mangement attention, as necessary, on risk-informed licensing
actions. A schedule has been laid out for completing the most
significant licensing reviews in the response to the Chairman's tasking
memo.
Question 59. The NRC has been subjected to significant criticism
regarding its failure to fully consider and apply the backfit rule as
it develops and imposes staff positions, e.g., hot shorts, spurious
actuations.
(A) How does the Commission ensure that NRC staff properly applies
the backfit rule?
Response. The NRC has established procedures \4\ and programmatic
controls to ensure that the staff properly applies the backfit rule for
power reactors, Title 10, Code of Federal Regulations, Section 50.109
(10 CFR 50.109). For example, the Commission-approved Charter of the
Committee to Review Generic Requirements (CRGR) establishes specific
agency controls for generic backfitting actions (those that apply to
multiple plants) and NRC Management Directive 8.4 (Manual Chapter
0514), ``NRC Program for Management of Plant-Specific Backfitting of
Nuclear Power Plants,'' establishes additional controls for plant-
specific backfitting. Individual Offices and Regions are responsible
for identifying and justifying potential generic and plantspecific
backfits, before they are imposed. The Director of the Office for
Analysis and Evaluation of Operational Data (AEOD) is responsible for
oversight of the backfitting programs, including conducting audits,
providing training and obtaining industry feedback on the effectiveness
of the NRC's nuclear regulatory backfitting process.
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\4\ NUREG-1409, ``Backfitting Guidelines,'' dated July 1990,
contains staff guidance on implementing the requirements of 10 CFR
50.109. NRC backfitting procedures and staff guidance for generic
communications are included, in the Commission-approved Charter of the
Committee To Review Generic Requirements; NRC Inspection Manual--Manual
Chapter 0720, ``Nuclear Regulatory Commission Generic Communications
Regarding Nuclear Reactor issues'' (MC 0720); NRR Office Letter No.
500, Revision 2, ``Procedures for Controlling the Development of New
and Revised Generic Requirements for Power Reactor Licensees'' (OL
500); and NRR Office Letter No. 503, ``Procedures for Integrated
Identification, Evaluation, Prioritization, Management, and Resolution
of Generic Issues,'' (OL 503). NRR Office Letter No. 901, UProcedures
for Managing Plant-Specific Backfits and 10 CFR 50.54(f) Information
Request,'' contains individual office guidance, including management of
the backfit appeal process. In addition, each Regional Office uses a
formal procedure for controlling plant specific backfitting and
handling of backfit appeals.
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The CRGR, an independent Committee of senior managers from several
offices, reviews proposed generic backfits and provides a
recommendation to the EDO as to whether the proposed actions should be
issued, modified, or withdrawn. In addition, a key element to
developing and imposing well justified generic requirements is openness
and responsiveness to the stakeholders. Therefore, the NRC has
implemented the practice of issuing proposed generic actions for public
comment. The Commission urges stakeholders to actively participate in
the public comment process for proposed generic actions. This is
helpful to the NRC in developing carefully thought out, well justified,
risk-informed, and less prescriptive regulatory requirements, since the
staff must address public comments, modify the proposal as appropriate,
and resubmit it for a formal review by the CRGR.
The CRGR submits an annual report to the Commission on the value
added to the NRC mission by its activities, including the result of a
self-assessment, and input from various stakeholders. This report
includes the highlights of the CRGR members' visits to nuclear
facilities to obtain feedback on how the backfitting process is
working. This report also includes the highlights of the CRGR Chairman
and staff periodic meetings with industry-supported organizations to
obtain industry feedback on the effectiveness of the backfitting
process.
Notwithstanding the NRC backfit procedures and programmatic
controls, the Commission has been made aware of industry concerns via
the meetings with industry representatives discussed above. Some
concerns result from the licensing review process through requests for
additional information. Although specific details have not been
provided, the general concern has been provided to senior managers in
NRR who are responsible for ensuring that unauthorized plant specific
backfits are not imposed in the licensing review process. Some concerns
result from inspection activities. Last year, the Commission expanded
the scope of the CRGR Charter to include review of inspection guidance.
Some concerns arise because of industry misunderstanding regarding
actions that are authorized (i.e., justified as an information request,
a compliance backfit, and/or a cost-justified substantial safety
improvement backfit). This indicates a need for additional workshops
with industry representatives and, although such workshops are not
currently scheduled, they will be planned in the near future. Currently
an independent NRC panel is reviewing a formal backfit appeal from
Maine Yankee, and recommendations for further improvements in the
backfit management process may be forthcoming from that review. In
early September, NRC and NEI Senior Managers met on issues of mutual
interest, including the backfit rule. In addition the staff backfit
training and audit activities which are planned for fiscal year 1999
may indicate additional specific areas in need of improvement. Where
needed improvements are identified, we will take appropriate corrective
action.
Regarding the examples cited, the generic technical and safety
issues associated with hot shorts and spurious actuations are expressly
covered by existing regulatory requirements. Specifically, the NRC
regulatory requirements for fire protection address the potential for
nuclear power plant fires to cause hot shorts and specify that such
circuit failures shall not prevent the operation or cause the
maloperation (spurious actuation) of components required to achieve
safe shutdown. The NRC staff is working in cooperation with the Nuclear
Energy Institute and other nuclear power industry representatives to
resolve these issues. To date, these efforts have been within the scope
of the existing regulation and have not resulted in any potential
generic or plant-specific backfits. If future actions to fully resolve
these issues involve potential backfits, the staff will follow its
established backfitting procedures before they are imposed.
Question 59. (B) What programs are in place to train NRC personnel
about the applicability and use of the backfit rule?
Response. Backfit training is included in the initial training and
qualification of new resident inspectors. In addition, the AEOD staff
has periodically provided backfit training to both the headquarters and
the regional technical personnel and audited the plant-specific
backfitting programs of their offices. Backfit training involved
presentations and dialogue during seminars and regional inspector
counterpart meetings. The training was reinforced by reviews of
applicable regulation and staff guidance (e.g., the backfit rule (10
CFR 50.109) and NUREG-1409, ``Backfitting Guidelines'') and specific
agency procedures (e.g., the CRGR Charter, NRR office procedures, and
NRC Inspection Manual--Manual Chapter 0720), and by conducting four
regional NRC-industry workshops on the backfitting process. Backfit
audits involved an assessment of the backfitting practices of each
region/office by detailed reviews of their records and by conducting
interviews with the backfit coordinators and managers, including the
Regional Administrators. A database of plant-specific backfits and
backfit appeals is maintained and used to assist in auditing the
process.
Backfit training for the headquarters staff was last conducted 4
years ago. Until fiscal year 1996, the regional periodic training and
auditing were conducted annually; however, at that time it was decided
that the objectives could be met by conducting these activities every
other year. Because of resource constraints, the scheduled fiscal year
1998 regional training and auditing were not conducted. It is expected
that the headquarters and the regional backfit training and audits will
be completed during fiscal year 1999.
Question 59. (C) What action will the NRC take to ensure that the
backfit appeal process provides an opportunity for an impartial review
of the licensee complaint?
Response. The NRC urges licensees to exercise their right to appeal
any action that they consider to be a backfit that was not identified
and justified as such, or an identified backfit for which the
justification is inadequate. However, in the past dozen years there
have been very few appeals.
A plant-specific backfit appeal is reviewed by a panel appointed by
the cognizant regional administrator or office director. The panel
members are NRC managers who are knowledgeable of the backfitting
process and the technical issues at hand, and who have not been
involved in the decision-making process involving the issue in
question. The panel reviews the issue being appealed and provides its
recommendation to the office director or regional administrator. In
case of an unfavorable decision, the licensee may appeal to the EDO.
Generic backfits may be appealed to the Director of the Office of
NRR or to the EDO. Typically, such an appeal would be referred to the
CRGR to review the matter and provide a recommendation to the EDO.
The NRC is aware that power reactor licensees are generally
hesitant to initiate a formal backfit appeal out of concern that doing
so may adversely impact their relationship with the NRC. However, the
NRC encourages the licensees to exercise the backfit appeal process, as
it is an important and an integral part of the regulatory process. It
can provide the NRC with valuable opportunities to address licensee
concerns, assess adequacy and effectiveness of its own backfitting
activities, sensitize the staff, and assure an effective backfit
management process in the future. The EDO and the Office of the
Inspector General stand ready to deal with any evidence that staff
objectivity was affected by a licensee exercising their right to appeal
the improper imposition of a new staff position or requirement.
Question 60. (A) How does the NRC ensure that when a staff member
identifies an ``agency position'' it has been reviewed by senior NRC
staff or the Commission?
Response. Documented products such as licensing actions and
inspection reports receive management review prior to issuance. Part of
this review is to ensure that any regulatory decision is consistent
with agency direction, and that there are no new ``agency positions.''
If individual reviews are raising concerns that are not documented and
are new positions, the response that follows for part B of this
question would be applicable.
Question 60. (B) What oversight mechanism has been established to
ensure that licensees are not asked to take action beyond NRC
regulatory requirements?
Response. The NRC has four processes that monitor concerns raised
by licensees about pressures to take action beyond regulatory
requirements. (1) Licensees can report concerns to NRC management
during periodic site visits required by Inspection Manual Chapter (IMC)
0102, ``Oversight and Objectivity of Inspectors and Examiners at
Reactor Facilities.'' IMC 0102 requires NRC management to make periodic
site visits to solicit feedback from their licensee counterparts
regarding implementation of the NRC regulatory programs at their
facility. Concerns raised by licensees during IMC 0102 visits are
evaluated annually with the results reported to the Commission. (2)
Each region has a formal process to evaluate and resolve licensees''
complaints of inappropriate regulatory action by NRC employees. Each
procedure requires a determination if the issue should be pursued by
the Office of the Inspector General (OIG) or the region. For issues
reviewed by the region, the regional administrator approves a course of
action including any specific remedial actions. (3) If the issue is
referred to the OIG, the matter is handled in accordance with
Management Directive 7.4, ``Reporting Suspected Wrongdoing and
Processing OIG Referrals.'' (4) A formal process was established in
July 1995 for senior power reactor licensee officials to report
perceived inappropriate regulatory action directly to the Office of the
EDO. Independent of these processes, licensees can informally discuss
any concern directly with their counterpart in the regional office or
in NRR at any time.
Question 60. (C) What protection has the NRC provided for licensees
against any perceived or actual regulatory retaliation they experience?
How does the NRC measure whether such protection is effective?
Response. As discussed in the response to the previous question,
the NRC has four processes that monitor concerns raised by licensees.
Although the NRC does not have a formal metric for measuring program
effectiveness, the NRC does not tolerate any regulatory retaliation
against its licensees. Any retaliation should be reported promptly to
the appropriate Office Director, the Executive Director for Operations,
the Inspector General, or the Commission itself so the matter can be
promptly addressed by senior agency management. The processes described
in Question 60(B) are also available to detect any potential
retaliation and to assess whether these mechanisms are effective.
Question 61. The NRC issues administrative letters, information
notices, bulletins and generic letters. Each of these communications
have significant impact on licensees because they become, de facto,
equivalent to regulatory requirements. It would appear that by issuing
these communications, the NRC is not following the formal procedures
required by the Administrative Procedures Act for imposing regulatory
requirements. What oversight does the Commission exercise to ensure
that these communications do not impose additional regulatory
requirements?
Response. Generic communications issued by the NRC have different
purposes. Administrative letters and information notices contain no
requirements. Administrative letters inform licensees of administrative
procedure changes relating to the implementation of NRC regulations.
Information notices (INs) are used to bring significant safety,
security, or environmental information to the attention of licensees.
INs are not used to convey or imply new requirements. Administrative
Letters and INs do not require response from licensees.
Bulletins and generic letters are a type of generic communication
based on an existing requirement that transmit information to, requests
specified action by, and requires a written response in accordance with
Section 182a, Atomic Energy Act of 1954, as amended, and 10 CFR 50.54
(f) from addressees regarding matters of safety, safeguards, or
environmental significance. Bulletins generally do not request
continuing actions. Generic letters may request that analyses be
performed or descriptions of proposed corrective actions be submitted
regarding matters of safety, safeguards, or environmental significance.
Generic letters may also request addressees to submit technical
information to assess present plant conditions. Requests for analyses
or technical information may be on a voluntary basis or required in
accordance with Section 182a, Atomic Energy Act of 1954, as amended,
and 10 CFR 50.54 (f). Generic letters are also used to provide staff
technical or policy positions not previously communicated or broadly
understood.
Generic letters and bulletins require senior management approval.
In an August 7, 1998 memorandum, the director of NRR provided guidance
to the staff regarding the need to brief senior management before
preparing generic letter or bulletin. The briefing must show the safety
benefit achieved compared to the burden imposed on licensees and staff
is justified before the generic communication is allowed to proceed
through a defined review process. Next, the Committee to Review Generic
Requirements (CRGR) conducts a structured review of ale proposed
generic letters and bulletins in accordance with an established process
intended to assure the ``value-added'' from the particular
communication is justified. At this stage, the office of General
Counsel reviews the document and if requested it is also forwarded to
the Advisory Committee on Reactor Safeguards (ACRS). Industry comments
are sought through a publication in the Federal Register. The
Commission also reviewed the proposed final document before issuance.
Question 62. During the July 17, 1998, roundtable discussion held
by the NRC, former Commissioner Remick stated that the use of
``Confirmatory Action Letters has grown by leaps and bounds recently,
and these are viewed as convenient techniques to obtain changes that
the staff wants done, while getting around the backfit rule, the
regulations and the Commission.'' Commissioner Remmick ``urge[d]'' the
Commission to consider the following criteria before issuing
confirmatory Action Letters:
<bullet> What is the relative safety significance of the individual
actions being confirmed? Are the actions, in effect, new
requirements?
<bullet> Where are the actions specified in the regulations?
<bullet> Do the actions meet the criteria of the backfit rule?
<bullet> Is the letter truly ``confirmatory?''
(A) Does the Commission intend to review recently issued
Confirmatory Action Letters against these criteria?
Response. Following the Commission's appearance before the Senate
Subcommittee on Clean Air, Wetlands, Private Property, and Nuclear
Safety on July 30, 1998, the Chairman issued a tasking memorandum
directing the staff to identify, define, and prioritize those areas
which support our long term performance goals and which will receive
near-term attention. A review of our Confirmatory Action Letter process
and criteria has been included in the response to the Chairman's
tasking memorandum. As part of this effort, the Commission will
integrate the criteria suggested by Commissioner Remick in a review of
recently issued Confirmatory Action Letters. 60
Question 62. (B) Please provide the results of your review.
Response. The results will be provided following completion of the
review. The results of the review are scheduled to be provided in
January 1999.
Question 62. (C) What is the current criteria used to determine
whether to issue a Confirmatory Action Letter?
Response. The current criteria used to determine whether to issue a
Confirmatory Action Letter (CAL) are found in NUREG/BR-0195, Revision
1, ``NRC Enforcement Manual.'' As stated in Chapter 4.6 of the NRC
Enforcement Manual:
``CALs are letters issued to licensees or vendors to emphasize and
confirm a licensee's or vendor's agreement to take certain actions
in response to specific issues. The NRC expects licensees and
vendors to adhere to any obligations and commitments addressed in a
CAL and will issue appropriate orders to ensure that the
obligations and commitments are met. CALs are normally used for
emergent situations where the staff believes that it is not
necessary or appropriate to develop a legally binding requirement,
in light of the agreed-upon commitment. CALs are flexible and
valuable tools available to the staff to resolve licensee issues in
a timely and efficient manner.''
Question 62. (D) Does the Commission intend to change the criteria
for issuing future Confirmatory Action Letters?
Response. The Commission will determine the need to change the
criteria for issuing CALs following completion of the above review of
recently issued CALs. A discussion of this decision will be provided
with the results of item (A) in January 1999.
__________
Statement of Nils J. Diaz, Commissioner, Nuclear Regulatory Commission
Mr. Chairman, members of the Subcommittee, I appreciate the
opportunity to appear before you with Chairman Jackson and my
colleague, Commissioner McGaffigan, to add my individual statement,
which I request be included as part of the record of the Commission
testimony at this hearing. It is my understanding that the hearing will
focus on how efficiently NRC is conducting its operations.
The United States Senate has asked for solutions to several issues
facing the NRC; budgetary constraints have been proposed, yet requisite
health and safety performance must be maintained. The Commission's
testimony reflects many new and ongoing initiatives, as well as recent
actions of the Commission, that I fully support. There is little doubt
that the Commission is acting on many fronts to become more efficient,
more focused on risk, and less burdensome. In the coming fiscal year,
the Commission, and I hope it is a full Commission, must and will take
many steps in this direction.
There is no doubt that much good has been done using a solid core
of precepts that center around a deterministic adequate-protection
base. Yet, there are areas in which I wish to express my particular
perspective on recent and current agency performance and our future
course because I believe fundamental changes are needed, can occur and
must occur to keep our regulatory processes in step with advancements
in technology, safety assessment methodologies, and the new competitive
environment.
To embody solutions within resource availability, the NRC has to
systematically establish a state-of-the-art regulatory structure that
is consistent with the NRC's mission, the policies of the U.S.
Government, and the needs of its people: a regulatory fabric that
clearly reflects, defines and implements Adequate protection of health
and safety'' without unbending fear of change and its associated
impacts.
The NRC's mission is carried out by a mandate to license and
regulate nuclear activities. From my vantage point, the key elements of
this mission have been achieved, when final results are used as the
performance measuring stick. In the area of achieved nuclear reactor
safety, the country has done exceedingly well, especially in the last
10 years. But adequacy of results is only one measure, albeit the key
one, of the overall performance of health and safety regulatory
agencies in the United States of America. In this context, it is worth
recalling that one of the declared purposes of the Atomic Energy Act is
``to make the maximum contribution to the general welfare, subject at
all times to the paramount objective of making the maximum contribution
to the common defense and security;'' the NRC, as an instrument of this
policy, has the duty to foster attainment of these objectives in a
balanced fashion, within our established mandate.
The NRC needs to assure that the uses of nuclear energy and
radiation are conducted within the envelope of ``adequate protection of
health and safety'' so the nation benefits from each and every one of
the regulated activities. Many present questions and criticisms of this
agency's performance stem from the fact that this envelope and its
margins of safety have not been well defined, or are rigidly applied,
especially when viewed in light of the 1998 state-of-the art. The
existing regulatory envelope, old and very conservative with many
archaic requirements that flow from it, limits the ability of the
agency to optimize its performance. The NRC needs to use today's best
available knowledge so as to govern and direct activities in proportion
to the health and safety risks they impose, and to do so with only
necessary burden. The cost of regulatory burden is paid by the people
of this country, and it is widely accepted that excessive burden
undermines general welfare. Regulatory requirements without enhancement
of safety need to be eliminated in a timely fashion, and those with
little significance have to be placed in the appropriate resource and
enforcement focus. Much needs to be done to accelerate the advancement
of rules and regulations and their implementation and enforcement using
present know-how, with due consideration of risks, and balance between
costs and benefits. Therefore, the agency needs to fix:
the compendium of rules and regulations, based on old scientific,
technological and legal bases, that do not adequately meet the
needs of 1998; and the delivery system that ranges from sound,
structured regulation, to a not-so-objective ``good guy'' or ``bad
guy'' framework, to attempts to control or manage regulated
entities.
I would interject that the NRC's activities have been and are well-
intentioned, and the majority produce good results. Notwithstanding the
intention, the resulting enhancement of safety is sometimes
questionable, and the costs are frequently large. In my view, the
Commission took important steps to correct its course in the past year
when it assumed responsibility for the acceptability of the results of
the Senior Management Meeting and the NRC Watch List, and when it
decided not to directly assess licensee management performance and
licensee corporate culture.
In the context of implementation of our regulations, it is probably
good to learn from TMI and Millstone, from 1979 and 1996. The NRC was
not prepared for TMI. TMI was a significant safety event. Our lessons-
learned provided good safety fixes, but there was also costly
overreaction. Indeed, the NRC tried for years afterward to control and
manage beyond the level of adequate protection. Maybe that was
inevitable because it was a big event, albeit devoid of public health
and safety consequences. The NRC was not prepared for Millstone, and it
should have been. There was no significant safety event. In fact there
were a limited number of issues with safety significance--but there was
a pervasive lack of sound corrective actions and failures to address
employee concerns. Also, these issues arose against a backdrop of the
Commission having not clearly defined what constituted safety. It was
the concern, probably correct, that the Millstone units were poorly
managed, and that we, the NRC, had not previously done our job to
correct the regulatory deficiencies that drove the Millstone actions. I
believe the NRC overreacted, specifically in response to design bases
issues, because it has not developed a regulatory structure in which
requisite performance is proportional to risk.
Risk assessment is very much a part of the nuclear business and the
use of risk information is much talked about. Yet, after over 20 years,
it is more a promise than a fait accompli. The NRC staff is ambivalent
about it, the industry is ambivalent about it, and the Commission has
been ambivalent about it. I believe it is no longer sensible to conduct
our regulatory responsibilities without risk-informed assessment and
decision-making. And if being risk-informed means systematically
relinquishing the status quo or the comfortable design basis framework,
I propose we do it sooner, rather than later. However, the industry has
to buy into it and be convinced of the benefits.
I believe the proposed Senate authorization is sufficient to
maintain NRC's functions and to generate change. Profound changes might
eventually be costly up-front, but the efficiencies eventually realized
will be multiplied in their effects on a safe operating nuclear power
industry.
In the context of the above statement, the following key areas of
disagreement with the agency testimony were not resolved within the
time frame for submittal to the Subcommittee:
1. The testimony states (p. 11, last paragraph, last sentence):
``The present reduction, if carried out, will require the NRC to
reduce its planned fiscal year 1999 programs by at least $17.8
million. As a result, the NRC will cut back on its reactor
inspection and reactor oversight programs, curtail selected safety
research, eliminate studies of nuclear materials operating
experience, and substantially reduce many of its support
activities.''
I proposed to replace that sentence with the following:
``If these reductions are effected, the NRC shall improve its
processes to ensure that no reduction in adequate protection of
public health and safety will result.''
I believe that the overall message of the paragraph is that we will
not have adequate resources, with the contemplated reductions, to
modify the agency regulatory approaches along the lines discussed in
the testimony, and the planned reduction will seriously and adversely
affect important health and safety programs. The case for that message
has not been made to me. Indeed, it is my informed view that planned
programmatic changes and improved processes can assure adequate
protection within the contemplated reduction, and that this important
message needs to be conveyed.
2. The testimony states (p. 6, 2nd full paragraph, 1st line):
``While the NRC believes that the basic focus and emphases of its
inspection and enforcement programs are sound, we agree that
improvements are needed in both areas.''
I proposed deleting the first clause because nearly everyone,
including the Commission itself, seems to be in agreement that
highlighted problems and issues warrant further major reviews and
fundamental changes in both areas. Therefore, I believe the basic focus
and emphases of inspection and, more so, enforcement, are not
``sound''; in fact, accelerating changes in these areas support this
last proposition.
3. The Appendix includes the following statement (p.A-5, 2nd full
paragraph):
``In addition, in reviewing the criticisms that have been directed
at the NRC regulatory processes, it is important both for the NRC
and for our stakeholders to keep in mind that the basic processes
under criticism are the same processes that have resulted in the
licensing and operation of 110 safe nuclear power plants. Today,
104 plants are operating to produce 20 percent of our nation's
electricity, with an enviable record in terms of protecting the
health and safety of the American people. That should not be taken
to imply, by any means, that NRC processes are or should be above
criticism--far from it. It does, however, suggest that caution
should be exercised in making sweeping changes to ensure that
seemingly desirable improvements, made in the interest of increased
efficiency or diminished regulatory burdens, do not turn out to
have unforeseen adverse effects on the overall objective of
ensuring nuclear safety.''
I objected to this paragraph because it appears to imply that
robust changes could have adverse effects on nuclear safety. It is
difficult to conceive of changes to NRC requirements that would not be
rigorously safety-scrutinized; changes need to be made to enhance
regulatory efficiency without raising thresholds or decreasing overall
requisite safety. Furthermore, the point that the same basic processes
were used to license and operate nuclear power plants--for 30, 25 or 20
years--is supportive of the need to change them for responsiveness to
present scenarios: many are no longer current or consistent with each
other.
4. The Appendix includes the following statement (p. A-20, 2nd
paragraph, 5th line):
``A recently identified example was the decline in attention that
had occurred, across the industry, on maintaining the facility
design basis.''
I proposed deletion of this sentence. I do not believe the case has
been made that there was an across-the-industry decline in attention
to, or maintenance of, the facility design basis. The completeness and
the availability of design basis information are not necessarily
equivalent to design safety issues.
5. The Appendix includes the following statement (p. A-36, first
partial paragraph, beginning in 7th line):
``These inspections resulted in significant findings, which
included, among other things: (1) plant modifications or
evaluations that had resulted in operation outside the design
basis; (2) modifications or evaluations resulting in safety systems
not being able to perform their intended safety functions; and (3)
inadequate testing of safety related components. Some of these
findings resulted in declaring equipment or systems inoperable,
requiring plant modifications and resulting in voluntary or
technical-specification-required plant shutdown. These findings
were detailed to the nuclear power industry in Information Notice
98-22, issued June 17, 1998. Although licensees expended
significant resources to document their design bases, significant
safety issues were found and corrected that otherwise might have
gone undetected.''
I recommended that this portion of the paragraph be replaced by the
following:
``These inspections showed that the rest of the industry, overall,
did not have safety problems as a result of design basis issues.
While the inspections did identify the need for additional
definition, documentation, and compliance, it should be emphasized
that safety was not compromised. This result underscores the
mismatch that exists between the NRC's current regulation/
regulatory processes and protection of public health and safety.
This mismatch can be eliminated through the use of risk-informed,
and where appropriate, performance-based inspections.''
My essential point was that the testimony suggests that there were
industry-wide, significant safety problems and widespread compromises
of overall safety. However, I believe the results of NRC inspections do
not support that conclusion and that significant deficiencies were only
found in a few plants. The Architect/Engineer (AK) inspection effort
referred to in this passage was terminated because the resource
expenditure was not justified by the safety findings. This further
supports my conclusion on item 4 above. Our own Inspector General
concluded (OIG/97A-01 at 8):
``We believe that while recent regulatory actions and requirements
may have enhanced NRC's confidence in Licensees' design control
practices, they may not necessarily produce a safety benefit
commensurate with their cost to the industry to implement and the
agency to enforce.''
``While compliance with regulatory requirements is important, in a
time of diminishing resources NRC needs to focus on those areas
which provide the greater safety benefit. Emphasizing strict
adherence to all NRC requirements, some of which may not be safety
significant, may result in an ineffective use of resources.''
I have tried to provide the Subcommittee with my perspective and
understanding on some important areas of the Commission's testimony. I
would like to take the opportunity to pledge that I will work for
change, not for change's sake, but for safety's sake and for the well-
being of the country.
I appreciate the opportunity to present my views and would be
pleased to answer any questions that you may have.
__________
Statement of Joe F. Colvin, President and Chief Executive Officer
Nuclear Energy Institute
Mr. Chairman, Ranking Member Graham and distinguished members of
the subcommittee, my name is Joe Colvin. I am president and chief
executive officer of the Nuclear Energy Institute. The Institute is
responsible for setting policy on matters affecting the nuclear energy
industry, including Federal regulatory practices that influence day-to-
day operations of nuclear power plants. NEI represents more than 275
companies, including every U.S. utility licensed to operate a
commercial nuclear reactor, their suppliers, fuel fabrication
facilities, architect and engineering firms, labor unions and law
firms, radiopharmaceutical companies, universities and international
nuclear organizations.
I would like to thank the committee for considering the nuclear
energy industry's views on this matter, particularly in light of the
industry's long-standing recommendation for comprehensive reform of
Nuclear Regulatory Commission's regulatory regime. As the industry's
policy leader, NEI is committed to ensuring the continued, safe
operation of more than 100 nuclear power plants amid a changing
marketplace. Today, the focus is on nuclear power plant regulations,
but concerns about reform are issues that apply to all licensees.
My testimony will provide a historical account of NRC's attempts at
reform, but more importantly reiterate the need for a new regulatory
process that continues to protect public health and safety, but is more
efficient, less intrusive and less costly. The shift to a new
regulatory framework should recognize the appropriate balance of risk
insights and safety, and lessons learned from four decades of
consistently improved performance.
The safety, reliability and economic performance of U.S. nuclear
power stations have improved dramatically during the past two decades,
yet the NRC's regulatory programs and oversight have failed to
recognize these changes. Assessment, inspection and enforcement
policies are inconsistent with the industry's high level of
performance. The NRC's comprehensive regulatory approach remains
focused on an old paradigm-the assumption that licensees will not
maintain compliance or make required safety improvements unless
enforcement actions are taken routinely in response to noncompliance.
Recent operating and safety statistics prove otherwise. By any set of
standards, including the NRC's Office for Analysis and Evaluation of
Operational Data, the industry's safety record supports a fundamental
change in the NRC regulatory process. The agency, however, operates
under an outdated regulatory process that is mired by conflicting
regulatory interpretations that often circumvent the formal rulemaking
process. NRC enforcement action focuses on strict compliance, and its
inherently subjective concept of ``regulatory significance'' is
misplaced and has the potential to adversely affect safety. The
commission also suffers from chronic delays in issuing licenses and
responding to other industry petitions.
The NRC must undergo comprehensive regulatory reform that includes
safety-focused regulations, consistent guidelines for meeting these
regulations, efficient inspections to verify compliance, and a balanced
enforcement program to respond to noncompliance. In doing so, the
agency should adopt the best practices and efficient processes
identified and in use at other Federal agencies that have undergone
similar reform. The NRC has already begun this effort in some aspects
of its regulatory scheme, and the industry commends the commission's
work, under the leadership of Chairman Shirley Ann Jackson, on many
fronts, such as license renewal rule. There also are signs that the NRC
is considering revamping its highly subjective plant assessment process
to one based on objective criteria.
Introduction
Nuclear energy is America's leading source of emission-free
electricity, supplying nearly 20 percent of our power at a competitive
price. The industry has more than 40 years of operating experience in
the United States and is the global leader in nuclear safety. Since the
early 1970's, nuclear power has strengthened the diversity and security
of our energy supply, powered economic development and helped raise our
quality of life. More than 435 nuclear power plants produce 17 percent
of the world's electricity. Nuclear energy's clean air benefits also
are a significant factor in many developed countries' plans to meet
emissions reductions outlined in the Kyoto Protocol.
The nuclear energy industry consistently has supported the NRC's
mission as a strong and credible regulator. Safety is and always will
be the industry's first priority, and a strong, credible regulator is
essential to instill public trust and confidence in our industry. But
effective and efficient regulation that protects public health and
safety should be accomplished through a regulatory approach that
focuses on safety and allows industry and the NRC to allocate resources
to those areas most important to safety.
As the United States makes the transition to a competitive market
for electricity production and distribution, our most significant
business uncertainty is not the cost of fuel, such as natural gas, or
changing environmental requirements on emissions that may increase the
cost of, or limit production from, fossil fuel sources. The most
significant area of uncertainty is the NRC's inconsistent, outdated
regulatory process, its drain on the agency budget and utility
resources, and its failure to focus directly on regulations that are
most important to protecting public health and safety.
As states confront the dual challenges of industry competition and
stringent emissions reductions requirements, energy officials
increasingly are recognizing the ``hidden value'' of the continued
operation of emission-free energy sources. Nuclear energy's transition
to a competitive market will depend, in part, on the NRC's ability to
adapt to the same changing environment and how swiftly the agency
responds to nuclear power plant license transfers and other licensee
petitions to the agency.
History, however, demonstrates that the agency is slow to change.
At its best, the agency has shown a willingness only to embrace short-
term, piecemeal reform. At its worst, the agency has not responded to
numerous, independent recommenda-tions for integrated, systemic change.
The NRC also has undertaken a number of self-assessments and industry
reviews, but none have resulted in significant change in NRC process or
culture.
Congress has the opportunity to provide the necessary impetus for
change through ongoing oversight and guidance that would sustain
fundamental reform of the NRC's regulatory process. Just as the
industry has made a significant transition in the way it operates in a
competitive market, the NRC must replace an outdated regulatory
framework with one that is safety-focused and responsive. As part of
this need for fundamental change, Congress should ensure that the
agency is successfully on the path of implementing meaningful reforms.
NRC's past reluctance to initiate a self-directed reform program
demonstrates this need for continued congressional oversight. Given the
onset of electricity competition, reform of the regulatory process must
be accomplished without delay.
Regardless of the transition to a competitive electricity market,
the NRC-like all Federal agencies-is obligated to provide the least
intrusive, most efficient and most cost-effective regulation
commensurate with protecting public health and safety. The NRC has an
obligation to electricity consumers and the industry to follow the lead
of other Federal agencies in undertaking reform that reflects today's
business environment.
For example, the Federal Energy Regulatory Commission (FERC)
announced on June 10 that it recently completed a 4-month study about
how to streamline the agency's procedures to keep pace with rapid
industry changes. The agency intends to enhance the timeliness of its
decisions and focus more resources on market issues. FERC Chairman
James Hoecker describes the reform effort as ``our way of acting
strategically to make regulation efficient and beneficial where it is
required and less intrusive or even unnecessary where it is not ...The
commission must embrace the culture of customer service and advanced
technology into which regulated companies are swiftly being drawn.
\1\``1 FERC intends to implement operating changes in phases during the
next 2 years.
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\1\ Federal Regulatory Commission news release, ``Commission Plans
Major Changes to Keep Pace with Regulated Industries,'' June 11, 1998.
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Congressional Recognition of Need for Regulatory Reform
The industry applauds this committee's oversight, including today's
hearing to examine a sensible, meaningful approach toward reform of the
NRC's regulatory process. We encourage your ongoing direction of the
commission's regulatory reform activities. Similarly, Senate
appropriators have undertaken a broad examination of the regulatory
process as part of the Federal budget review. The Senate Appropriations
Committee in June sent a strong message to the NRC about persistent
weaknesses in its implementation and enforcement of regulatory
requirements.
The committee noted that six major reviews of the agency since 1979
have revealed common criticisms, including: ``the NRC's approach to
regulation is punitive rather than performance based, licensees are
forced to expend considerable resources on regulations that are not
related to safety, the NRC is unnecessarily prescriptive, licensees
fear retribution for criticism, there are not specific criteria for
important NRC actions such as placing a reactor on the watch list, and
the NRC focus on paper compliance is not related to and can distract
from safety activities.''
The committee added that it ``is concerned that the NRC has done
little to respond to these reviews and believes that a major review
should be undertaken to improve the efficiency of the NRC and the
manner in which it oversees public health and safety.'' As part of this
review, NRC was directed to issue monthly reports on the progress of
its licensing and regulatory duties.
More telling, perhaps, of the committee's dissatisfaction is its
recommendation to limit extension of the agency's user fee to 1-year
increments, rather than the NRC-requested 5-year authorization. The
NRC's authority to assess licensees for 100 percent of budgetary
expenses expires in fiscal year 1998. The industry supports the 1-year
reauthorization to provide an opportunity for continuing oversight
until Congress is satisfied with improvements in the regulatory system.
The nuclear energy industry applauds the Senate appropriators'
vigilance and also urges this committee to support the 1-year
reauthorization of NRC's user fee collections until the agency
successfully implements regulatory reform. Congress also should require
the NRC to measure its success at implementing overall regulatory
reforms and regularly report its progress to this committee.
NRC Reform: A History of False Starts
An unacceptable lag time has developed between the understanding
that regulatory reform must take place at the NRC and a serious attempt
to accomplish it. Nearly 20 years have past since the first NRC review
recommended the need for a shift in the agency's regulatory process.
In 1979, the President's Commission on the Accident at Three Mile
Island provided one of the first accounts of the need for regulatory
improvement. The so-called Kemeny commission was appointed by President
Carter to review the accident at the Three Mile Island nuclear power
plant. \2\ One of its conclusions-that ``NRC tends to focus industry
attention narrowly on the meeting of regulations rather than on a
systemic concern for safety'' remain relevant today.
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\2\ Report of the President's Commission on the Accident at Three
Mile Island,'' October 1979.
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The Kemeny Commission also noted ``a preoccupation [by NRC] with
regulations . . . We are convinced that regulations alone cannot assure
safety. Indeed, once regulations become as voluminous and complex as
those regulations now in place, they can serve as a negative factor in
nuclear safety.''
At least five other independent reviews of the NRC's regulatory
practices echo the Kemeny report's conclusions. The agency's own
internal examinations also have found fault with NRC practices. For
example, a 1981 Regulatory Impact Survey by senior NRC management
reviewing the safety impact of regulatory activities determined that,
``notwithstanding the competence and good intentions of the [NRC] staff
. . . the [slow] pace and nature of regulatory actions have created a
potential safety problem of unknown dimensions.'' \3\
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\3\ NUREG-0839, 1981: ``A Survey by Senior NRC Management to
Obtain Viewpoints on the Safety Impact of Regulatory Activities from
Representative Utilities Operating and Constructing Nuclear Power
Plants.''
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A chronology of recommendations to reform the regulatory process
and false starts on the part of NRC at reform are attached to this
testimony (Attachment A). These recommendations include:
<bullet> An Oct. 15, 1986 letter from the chairman of the Advisory
Committee on Reactor Safeguards to the NRC chairman. The ACRS chairman
said that NRC staff ``has a tendency to regulate in an economically
wasteful fashion.''
<bullet> A Nov. 24, 1989 letter from the chairman of the Advisory
Committee on Reactor Safeguards to the NRC chairman addressed coherence
in the regulatory process. The letter described a ``problem of the
regional administrators, who sometimes have practices that differ from
each other, and from headquarters. In the end, it is the regional
administrators with whom a licensee has the most contact, and who
embody NRC in the field, and there are too many cases in which their
dicta go well beyond the policies set by the commission [NRC].''
<bullet> A 1989-90 Regulatory Impact Survey found that ``licensees
acquiesce to NRC requests to avoid poor numerical Systematic Assessment
of Licensee Performance ratings and the consequent financial and public
perception problems that result, even if the requests require the
expenditure of significant licensee resources on matters of marginal
safety significance.''
<bullet> A 1992 National Academy of Sciences study concluded that
``an obstacle to continued nuclear power development has been the
uncertainties in the Nuclear Regulatory Commission's licensing
process.''
<bullet> A 1994 industry study conducted by Towers Perrin found
that NRC's regulatory practices did not increase the safety margin at
nuclear power plants. Nuclear licensees also reported an increase in
``pressure to take actions not required by regulation.'' \4\
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\4\ Nuclear Regulatory Review Study, ``Final Report,'' p. 3.
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A chart attached to this testimony (Attachment B) further
demonstrates that NRC's regulatory weaknesses have been repeatedly
identified for reform through independent reviews.
Regulatory Process In Need of Systemic Improvement
NRC's regulatory programs and enforcement policy are inconsistent
with the industry's high level of operating performance. As a result,
agency and industry resources are consumed by matters that have low
safety significance, including a dramatic rise in enforcement actions
where there is no tie to safety.
The industry applauds the commission's work on many fronts, such as
the license renewal rule, and there are signs that the NRC is
considering revamping its highly subjective plant assessment process to
one based on objective criteria. Nonetheless, immediate, fundamental
changes in policy and culture are necessary to ensure that a tightly
focused regulatory system is established and effectively implemented.
At every turn, NRC's regulatory procedures are overly prescriptive-
a process rooted in the 1950's, when knowledge about nuclear safety and
nuclear plant operating experience was evolving. In 1979, regulations
for operating nuclear power plants were complex and prescriptive.
Rather than heeding the Kemeny Commission's recommendations, the
regulations and regulatory requirements have become even more complex
today.
The complexity of regulatory requirements stems in part from the
different vehicles NRC uses to issue guidance. However, NRC's informal,
subjective guidance imposes obligations on licensees without undergoing
the notice and comment procedures established by the Administrative
Procedures Act. These practices include:
<bullet> Issuing informal guidance through generic NRC
communications that utilities feel obligated to follow, and
confirmatory action letters that provide specific recommendations to
plant operators concerning corrective action. These letters and
guidance ultimately become regulatory obligations.
<bullet> Examples of NRC's subjective practices include
determining which plants should be placed on the watch list and rating
plants through the systematic assessment of licensee performance.
These practices often are confounded by conflicting interpretations
from NRC's regional offices. At an NRC roundtable discussion earlier
this month, Dr. Zack Pate, chairman of the World Association of Nuclear
Operators, said ``Headquarters and regional personnel routinely, every
day, indeed every hour, impose requirements on the plants that the
Commission or the EDO or other senior managers would not support if in
each instance you knew what was happening. Time and time again over
these past 18 years that I have been observing, when such examples are
brought to the attention of an individual commissioner or the EDO, you
[NRC management] find the situation to be just as unreasonable as I do,
but this continues. The Towers-Perrin study, conducted some 4 years
ago, illustrates this problem quite clearly, even dramatically.''
The NRC's regulatory inconsistencies also contradict the Clinton
Administration's regulatory reform initiative. Executive Order 12866,
issued in 1993, envisions a Federal regulatory system that ``protects
and improves health, safety, environment and well-being without
imposing unacceptable or unreasonable costs on society.''
Far More Burden, No More Benefit
NRC's emphasis on strict adherence to requirements that lack safety
significance has created a regulatory environment that suffers from a
lack of prioritization. Licensees are penalized based on regulation to
a zero-defect threshold at a time when industry safety reliability and
economic performance are at an all-time high. \5\ Regulating to a zero-
defect threshold results in a broad spectrum of requirements that
presumably are equally important, and ultimately, detract from the
important safety mission.
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\5\ For example, in 1997, the median value for unplanned automatic
shutdowns at nuclear power plants was 0 per 7,000 critical hours, down
from 7.3 in 1980, according to the 1997 World Association of Nuclear
Operators Performance Indicators.
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The regulatory disconnect also is recognized by Wall Street. A June
report from Moody's Investor Service takes note of the NRC's heavy
regulatory burden and its bearing on the industry's future. ``Despite
safety performance records that are at an all-time high, continued
close scrutiny by the Nuclear Regulatory Commission also represents a
challenge for all nuclear utilities.'' \6\
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\6\ Moody's Investor Service, Special Comment, ``Restructuring
Reduces Fallout from Deregulation for Nuclear Utilities,'' June 1998.
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Another industry concern stemming from NRC's varying guidance
mechanisms is that regulation should be consistent with NRC's backfit
rule, which requires that new interpretations of existing regulations
or newly issued regulations must be reviewed under 10 CFR 50.109 to
determine if they are necessary to preserve adequate protection or to
bring a plant into regulatory compliance. If neither of those
conditions are met, then NRC regulations require backfits to undergo a
cost-benefit analysis demonstrating that such an action will result in
a substantial increase in public safety and be cost beneficial.
The methods used to determine the cost-benefit analysis by the NRC
can, and have, justified nearly any new regulation imposed by the
agency. For example, the NRC takes ``averted on-site costs'' into
consideration in the cost-benefit calculation of a new regulation.
This, in effect, is an assumption of the economic loss to a licensee
due to a plant shutdown-the cost of replacement power, labor, etc.,
that could be incurred if such a regulation was not in place. This
``benefit'' is then used to justify the imposition of a new regulation
that could not be justified otherwise. This results in the licensee
committing budget and resources to implement a regulation not needed
for safety.
Equally troubling to NRC licensees is the lack of relative priority
given to non-safety related compliance issues by the agency staff both
at headquarters and in the regions. There is widespread agreement by
the industry and the commission that nuclear safety would be enhanced
by a more objective prioritization of available resources based on the
objective safety significance. There is a high level of safety in the
industry today. And while the industry certainly can accomplish the
most important safety goals, it should not be required to devote the
same level of resources to non-safety significant requirements.
The agency's inconsistent approach to the regulatory process and
shifting interpretation of some regulations makes it difficult for
utilities to consistently prioritize activities subject to NRC
regulation. Adopting a performance-based regulatory framework would
permit utilities to focus resources on areas that are most important to
the continued protection of public health and safety.
No Margin For Error
The industry recognizes that the NRC has conducted a number of
reviews of the enforcement policy during the past 4 years, \7\ with the
intent of improving its effectiveness and implementation. While some
productive changes have resulted from NRC's redesign, the agency
continues to isolate its review of the enforcement process from overall
reform. Yet in order for NRC's enforcement procedures to be truly
effective, they must be part of an integrated, comprehensive regulatory
framework. That framework must include safety-focused regulations,
consistent guidelines for meeting these regulations, efficient
inspections to verify safety-based compliance and a balanced
enforcement program to respond to noncompliance when it affects safety.
---------------------------------------------------------------------------
\7\ The latest revisions to the enforcement policy, NUREG-1600,
``General Statement of Policy and Procedure for NRC Enforcement
Actions,'' were published May 13 in the Federal Register.
---------------------------------------------------------------------------
Despite the industry's long-standing recommendation to reform the
enforcement process, NRC remains wedded to the view that unless
enforcement action is taken, licensees will not take steps to maintain
safety. This approach is not only outdated based on industry
performance, but it also is rooted in the agency's assessment process,
which focuses in part on the number and types of violations NRC or
licensees report.
In the past 2 years, the industry has witnessed a sharp spike in
the total number of violations, despite improvements in industry safety
trends. For example, NRC imposed 50 percent more industry violations
(1,519) in 1997 than a year earlier. This increase belies the
performance of the industry and underscores the disconnect between the
inspection process and the NRC's goal of assuring adequate safety in
the sense that the industry spends significant time on areas of
compliance that have a relatively low impact on safety. This process of
responding to low-level violations must be revamped so that the
industry and NRC can maintain their focus on safety significant issues.
The Union of Concerned Scientists (UCS) told the commission
recently that the largest problem with inspection enforcement and
assessment is tied to ``how the NRC classifies the plant's performance,
or how it predetermines the plant performance. If a plant is in good
standing, then it gets good inspections. It gets good enforcement
action, and it gets good performance assessment. If the NRC places that
plant into the regulatory distress category, then all these things drop
off the board, and there's a step change virtually overnight into the
other category.'' UCS safety engineer David Lochbaum told the
commission that ``the plant's status did not change overnight, just the
NRC's perception of that plant. What in the past apparently was written
up as a non-cited violation is now being cited as a violation. The
standard shouldn't change. If there were problems before, they should
have been reported as problems before. If they're not problems today,
they shouldn't be reported as problems today. There's something wrong
with that kind of performance.''
Response to Violations with Low Safety Significance
Of the 1,519 violations in 1997, 1,417, or more than 90 percent,
fell into the category of least safety significance-severity level IV.
Often, these violations have little relevance to a plant's overall
performance. The following examples illustrate these flaws:
<bullet> In May 1997, NRC inspectors noticed three-ring binders
resting above a main control room panel at a nuclear plant and
issued a level IV violation. \8\ According to the NRC, the binders
could have posed a potential safety problem if they became
dislodged during an earthquake.
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\8\ NRC Inspection No. 97-06, May 16, 1997. Instead of instructing
the plant operator simply to move the binders, the inspector cited the
plant. The utility had failed to conduct a written evaluation to ensure
that the binders did not involve an ``unreviewed safety question.''
---------------------------------------------------------------------------
<bullet> Another utility was cited because a diesel generator proved
to be more robust than regulatory guidelines required. \9\
---------------------------------------------------------------------------
\9\ NRC Inspection No. 97-11, August 8, 1997. In performing its
standard loading test of an emergency diesel generator, a utility
operated the generator at a capacity greater than 4,700 kilowatts, even
though guidelines specify the generator should be operated at less than
4,700 kilowatts, but greater than 4,450 kilowatts during an allotted
period.
---------------------------------------------------------------------------
<bullet> NRC issued a level IV citation to a nuclear plant for failing
to mark a procedure in an operations manual with a double asterisk.
\10\
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\10\ Years before, the plant had committed to NRC to mark the
procedure with a double asterisk as a reminder to operators that they
must read the procedure step by step when they perform it. When the
operations manual was revised, an adminstrative assistent inadvertently
left off the double asterisk. The plant was fined for not meeting a
regulatory commitment.
Despite their relatively low safety significance, severity level IV
violations nonetheless demand a timely response. A timely response,
however, demands resources. And a plant operator has no choice but to
divert these resources away from matters that may be of greater safety
concern. In effect, the NRC is managing a plant's priorities when it
issues severity level IV violations with a train of paperwork and
corrective action.
The industry believes other flaws exist within NRC's enforcement
procedure, such as the aggregation of violations.
Combining and Elevating Violations
The NRC often aggregates violations that it believes arise out of
the same circumstances or that share common root causes and combines
them to impose a violation of a higher severity level. For example,
several relatively minor violations can become a severity level III
candidate.
In 1997, the NRC significantly increased its practice of
aggregating minor violations, thereby elevating or ``escalating'' the
level of violations, industry data demonstrates. The number of
aggregated violations cited in an escalated action was almost three
times that of 1990. Many licensees believe that aggregation is used to
unduly inflate the perceived significance of problems that are of
themselves not safety-related.
A November 1997 aggregated violation illustrates this point. \11\
NRC cited a nuclear power plant where a control switch on a backup
emergency diesel generator was improperly positioned. The utility
received six separate procedural violations relating to the failure to
correct the switch position error and record it in an operating log.
Collectively, the violations became a severity level III violation.
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\11\ NRC Inspection No. 97-10, Nov. 7, 1997.
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In another case, during a period between July 1994 and July 1995, a
utility's salt service water system recorded temperatures that exceeded
the design bases. The NRC did not identify those temperature changes
until 1997, when the agency issued seven violations to the utility. At
no time prior to the citation's issuance had NRC notified the plant
that the agency determined its temperature variations were in excess of
plant requirements. The violations were combined and escalated to a
severity level III violation, which includes a $55,000 fine.
The NRC's use of aggregation is problematic because of its inherent
subjectivity and the discretion it inserts into the enforcement
process. Are minor problems linked? Should they be aggregated? Do they
reflect a broad performance problem? These are questions that have less
to do with the actual violations and their consequences, and more to do
with individual perceptions of licensee programs, processes and
performance.
Licensing Reviews and Staff Changes Mired in Bureaucracy
NRC requires agency approval prior to a wide range of industry
activities. Many, such as licensing applications and corporate license
transfers, are accepted as priorities for review. Other requests, such
as those seeking code relief for plant repairs, rank low in NRC
consideration.
However, industry experience proves that a priority in the queue
doesn't necessarily translate into timely review. Despite NRC pledges
of expedience, many industry requests are subject to unreasonable
delays. Such inaction can prevent private companies from safely meeting
the needs of the marketplace-often at considerable expense. As a result
of delay in the NRC licensing process, Louisiana Enrichment Services,
L.L.P. withdrew its application after spending $34 million and more
than 7 years participating in the licensing process.
The Louisiana company in April withdrew its NRC application for a
license to construct and operate the Claiborne Enrichment Center. ``The
inability of the licensing process to operate in a predictable,
efficient and timely manner'' was the driving factor in abandoning the
fuel enrichment project, LES President Roland Jensen told the NRC. LES
had filed its application with the NRC on Jan. 31, 1991, with the
expectation of operating the nation's first privately owned nuclear
fuel enrichment facility by 1996.
The NRC failed to resolve LES's licensing issues in a timely manner
despite the fact that Congress, as part of the Energy Policy Act of
1992, amended the Atomic Energy Act expressly for that purpose-to
mandate a streamlined, one-stage licensing process for uranium
enrichment facilities.
Evidence of NRC inaction abounds in other areas.
Portland General Electric Co. is awaiting an NRC decision on its
application to ship a reactor vessel with internal components intact to
a low-level radioactive waste disposal facility in Hanford, WA. \12\
The company submitted its application in the summer of 1996 in hopes of
meeting a summer 1998 shipment date. After significant delays on NRC's
part, PGE has been forced to delay its shipment until 1999.
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\12\ Portland General Electric Co. submitted an application for
exemption from Part 71 to ship the Trojan reactor vessel with internals
intact to the Hanford low-level waste disposal site.
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Portland General Electric proposed the shipment to significantly
limit worker exposure to radioactive elements within the reactor vessel
that otherwise would be dismantled for shipping. In addition, PGE's
proposed method-a practice the Navy routinely uses in shipments \13\--
would save $14 million in decommissioning costs.
---------------------------------------------------------------------------
\13\ The Navy conducts approximately nine shipments of reactor
vessels a year to the Hanford disposal facility.
---------------------------------------------------------------------------
Today, PGE still awaits NRC action.
In the past, the NRC also has been slow to authorize nuclear plant
license transfers. An NRC decision on Georgia Power Co.'s request to
transfer its Vogtle power station license to the Southern Nuclear
Operating Co. as part of a corporate reorganization took more than 4
years. \14\
---------------------------------------------------------------------------
\14\ An intervenor used the license transfer proceeding to address
a complaint about management at the electric company. The licensing
authority allowed this to sidetrack the transfer process and destroy
the discipline of the process.
---------------------------------------------------------------------------
Both companies are subsidiaries of the Southern Company. The
transfer did not entail a change in Vogtle's staff or management
structure.
The Vogtle experience serves as fresh evidence that the NRC's
licensing procedures are in need of revision to respond to today's high
level of plant operating performance and the emerging business climate.
The NRC must instill proper focus and discipline to its licensing
procedures for commercial nuclear facilities. In a competitive market,
electric companies' success will be measured in part by the speed with
which they can respond to business decisions. NRC's license transfer
process must strike a balance between the need to ensure corporate
resources are adequate to safely operate a nuclear power plant and the
new business paradigm in the electricity market.
As retail competition emerges, more electricity generation
facilities of all types will be bought and sold, thereby requiring a
timely license review to keep pace with industry changes. For example,
GPU Nuclear, Inc. announced earlier this month that it has reached
agreement in principle to sell Three Mile Island (TMI) Unit 1 to
AmerGen Energy Co., jointly owned by PECO Energy Co. and British
Energy. The sale-the first of an operating nuclear plant in the United
States-will require regulatory approval and license transfer. Several
agencies, including the NRC, will review the sale during the next 12 to
24 months.
Similar transactions of electric generating facilities are expected
to follow as the retail market continues to evolve.
Creating Regulatory Burdens At Safety's Expense
Safety is the nuclear energy industry's top priority, and we
recognize the statutory responsibility that the NRC has to assure
adequate protection of public health and safety. However, the industry
is concerned that the NRC has created a regulatory environment in which
the agency's overly conservative, compliance-oriented approach
compromises attention to safety.
In a 1997 audit, the NRC's Office of Inspector General recognized a
conflict between the commission's goal of focusing on issues of
greatest safety significance and actual resources devoted to verifying
license compliance with regulations of limited safety benefit. \15\ The
report, which focused on NRC events surrounding refueling practices at
Northeast Utilities' Millstone Unit 1 that were outside of the plant's
design bases, concluded that the commission should adopt a risk-
informed, performance-based regulatory system-that is, a system that
measures an acceptable level of risk and weighs plant performance or
outcomes accordingly.
---------------------------------------------------------------------------
\15\ OIG/97A-01, NRC Needs Comprehensive Plan to Resolve Regulatory
Issues, Aug. 21, 1997.
---------------------------------------------------------------------------
Concerns at Millstone prompted the NRC in October 1996 to seek
assurances that all nuclear power plants were operated and maintained
in accordance with their design bases. Licensees were given 3 months to
respond.
NRC's request carried the weight of a formal rule and utilities
worked diligently to respond to the detailed request for information
ranging from engineering design and configuration control processes to
a plant's procedure for identifying problems and implementing
corrective actions. \16\
---------------------------------------------------------------------------
\16\ Oct. 9, 1996 NRC letter: ``Request for Information Pursuant to
10 CFR 50.54(f) Regarding Adequacy and Availability of Design Bases
Information.''
---------------------------------------------------------------------------
While the agency estimated the letter would require a licensee's
staff to spend 400 hours to respond to the letter, licensees devoted an
average of 2,000 staff hours per plant, according to industry
estimates. As one utility told the NRC, ``We have expended considerable
efforts to collect, compile and evaluate data.'' One licensee assigned
a 30-member team that spent 15,000 man hours responding to risk
significant systems reviews-only one of the five areas in which NRC
requested information. \17\ Another utility reviewed 105 separate plant
systems to assure conformance with the design bases. \18\
---------------------------------------------------------------------------
\17\ Feb. 12, 1997, North Atlantic Energy Service Corp. response to
NRC request for Seabrook Station's reply to 10 CFR 50.54(f) letter.
\18\ Feb. 8, 1997, Florida Power Corp. response to 10 CFR 50.54(f)
letter for Crystal River Unit 3.
---------------------------------------------------------------------------
In addition to the time devoted to respond to the letter, some
utilities said their efforts to verify conformance with design bases
requests and reconcile deviations cost millions of dollars.
Indeed, the NRC Inspector General's audit said, ``NRC needs to
recognize the cost to verify compliance with regulatory requirements
may not produce commensurate safety benefits.''
More importantly, however, the exercise revealed virtually no
safety significant findings while diverting valuable plant resources
from increasing plant safety.
A survey by the NRC's Office of Analysis and Evaluation of
Operational Data (AEOD) further supports this point. AEOD reviewed 1997
design bases events covered under 10 CFR 50.72 and 10 CFR 50.73. Of the
296 events recorded, only two events could have had an impact on-and an
extremely low probability of affecting public health and safety. What's
more, 28 percent of the events cited occurred at the Millstone, Point
Beach and Crystal River plants, which were shut down at the time.
This type of regulation continues to focus on compliance and
prescriptive procedures about how outcomes should be achieved at
plants, rather than the actual outcomes. The industry strongly supports
the NRC's attempts to move toward risk-informed, performance-based
regulation that would focus on plant results and sharpen the safety
focus. To that end, the agency must expedite its transition to this new
regulatory system.
Conclusion
Recent events concerning NRC enforcement, compliance, reporting and
licensing procedures have demonstrated persistent weaknesses in the
agency's regulatory system. The NRC's regulatory procedures clearly are
broken and are in desperate need of a fix.
In order to regulate more effectively, the NRC must undergo
fundamental reform so that agency activities are more attuned to the
experience and improvement gained from 40 years of nuclear energy
operation and the rapid changes affecting the industry it regulates.
NRC Commissioner Edward McGaffigan accurately portrayed the need to
revamp the regulatory process during a 1997 meeting of all NRC
employees. ``The old model of a ponderous industry dealing with
ponderous state utility commissions and a ponderous regulator [is] not
going to be viable for very much longer,'' Commissioner McGaffigan
said.
Just as the industry has made a significant transition in the way
it operates in a competitive market, the NRC must replace an outdated,
ineffective regulatory framework with one that is objective, safety-
focused and responsive. The agency can achieve these goals by adopting
risk-informed and performance-based concepts in its regulatory.
Under risk-informed regulation, the NRC would use nuclear power
plants' operating experience and analytical tools, such as the
probabilistic safety assessment (PSA), to match design and operational
issues with their relative importance to public health and safety. The
NRC currently employs a prescriptive and deterministic regulatory
approach that does not rely on plant operating experience or PSAs.
NRC's new regulatory culture also should embrace a performance-
based approach-that is, regulation that focuses on results as the
primary means for oversight-not procedures. Performance-based
regulation demonstrates the following attributes:
<bullet> Measures of plant and license performance;
<bullet> Objective criteria to assess performance, such as
performance history; and
<bullet> Flexibility for licensees to determine how they can best
meet the performance criteria.
While the NRC must immediately undertake fundamental change,
Congress should take the following steps:
<bullet> Authorize the agency's budget in 1-year increments until
the committee is satisfied that the agency is successfully implementing
meaningful reforms. Long-standing issues and problems have been
identified in six major reviews since 1979, but the commission has not
responded to these reviews. The NRC's program should include benchmarks
to measure the progress that the agency is making the transition to a
more effective agency.
<bullet> Congress should require that the NRC report its progress
at regular intervals, and Congress should hold regular oversight
hearings to ensure reform is undertaken expeditiously.
<bullet> Congress should require an independent study of the
effectiveness of NRC programs, as well as management and staff.
The industry is committed to working with the commission in a
partnership that is built on trust, cooperation and the common goal of
protecting public health and safety. In recent months, the commission
has demonstrated a good-faith effort to move forward with critical
reform. The industry is encouraged by these actions and offered the NRC
eight areas of regulatory improvement. A similar version of the
suggested improvements is attached to this testimony (Attachment C).
Nuclear power is one of our most important energy sources, and will
be even more vital as we strive to meet future energy and environmental
goals that are inextricably linked. In the same context, the NRC-like
most other Federal agencies-must undergo fundamental change in the way
is regulates our industry so that it is focused on those regulations
that are important to safety and responsive to emerging issues. This
reform is vital for the nuclear industry will continue to provide broad
benefits to society, including electricity for 65 million American
households that rely on these facilities to produce their electricity.
______
ATTACHMENT A
chronology
A. The President's Commission on the Accident at Three Mile Island (The
Kemeny Report), October 1979
key excerpts
1. ``The existence of a vast body of regulations by NRC tends to
focus industry attention narrowly on the meeting of regulations rather
than on a systematic concern safety. Furthermore, the nature of some of
the regulations, in combination with the way rate bases are established
for utilities, may in some instances have served as a deterrent for
utilities or their suppliers to take the initiative in proposing
measures for improved safety.''
2. ``We note a preoccupation with regulations. It is, of course,
the responsibility of the Nuclear Regulatory Commission to issue
regulations to assure the safety of nuclear power plants. However, we
are convinced that regulations alone cannot assure safety. Indeed, once
regulations become as voluminous and complex as those regulations now
in place, they can serve as a negative factor in nuclear safety. The
regulations are so complex that immense efforts are required by the
utility, by its suppliers, and by the NRC to assure that regulations
are complied with.''
B. NUREG-0585, ``TMI-2 Lessons Learned Task Force Final Report,''
October 1979
key excerpts
3. ``This opportunity has led us to a critical scrutiny of NRC
safety policy. What we have found is that prescriptive and narrow
licensing requirements only add to the quilt work of regulatory
practice and do little to directly address the nation's heightened
concern for the safety of nuclear power plants.''
4. ``The Commission should undertake with the staff the development
and articulation of clear criteria to define the basic safety goal for
nuclear power plant regulation. Since this goal will be used as a
benchmark by the staff in defining new regulatory requirements,
definitive policy guidance should also be developed regarding the
threshold for backfitting of new requirements to existing plants. The
Task Force believes that the goal should be supplemented where possible
with qualitative reliability or risk criteria, with limitations being
place on their use to assure that such criteria do not impede the
capability for timely decisionmaking.''
C. ``Three Mile Island--Report to the Commissioners and to the Public''
(Rogovin Report) January 1980
key excerpts
5. ``We have found in the Nuclear Regulatory Commission an
organization that is not so much badly managed as it is not managed at
all. . . Obviously, one of the Commission's functions is to manage and
set policy for its staff. But in practice, the Commission has isolated
itself from the NRC staff. The Commission does not directly supervise
the staff's day-to-day work.''
6. ``More surprising than that the Commission spends very little
time managing or setting goals for the NRC staff if the fact that until
recently it has spent very little time as a Commission deliberating or
deciding any of the broad or important issues relating to reactor
safety. . . lnstead it appears that the Commission has traditionally
spent the bulk of its meeting time on dozens of specific, isolated
safety-related matter, on personnel and budgetary matter,
administrative chores, and such issues as export licensing.''
D. Regulatory Impact Survey of 1981, NUREG-839 (``A Survey by Senior
NRC Management to Obtain Viewpoints on the Safety Impact of
Regulatory Activities from Representative Utilities Operating
and Constructing Nuclear Power Plants'')
executive summary of comments
7. ``A major issue identified is the imposition of requirements.
Licensees consider the NRC system of imposing requirements to be ``out
of control'' (generic letters, bulletins, circulars, notices, orders,
rule changes, NUREGs, Regulatory Guides).''
8 ``The licensees consistently commented that they no longer manage
their own resources or set their own priorities. They assert that NRC
functionally dictates their plans and schedules by virtue of work
activities necessary to satisfy NRC-imposed requirements on NRC-
required schedules. It was the licensees' view that NRC does not live
in the real world of planning and scheduling.''
survey finding
9. ``It is the finding, notwithstanding the competence and good
intentions of the (NRC) staff, that the pace and nature of regulatory
actions have created a potential safety problem of unknown
dimensions.''
E. Report of the Regulatory Reform Task Force on Nuclear Licensing
Reform (DRAFT), November 1982 (A report prepared by the
Regulatory Reform Task Force, a group comprised of senior NRC
personnel to review the reactor licensing process at the
request of NRC Chairman Palladino)
key excerpts
10. ``The suggestion has been made that undisciplined backfitting
may have made nuclear plants more difficult to operate and maintain
and, hence, may have had an adverse effect on the public health and
safety. It has been variously suggested that backfitting leads to less
than optimal design arrangements; that it compels personnel to
constantly face the uncertainties associated with change and perpetual
retraining; that it sometimes requires a high level of construction,
creating distraction and, therefore, a negative effect on operation. .
. ''
F. ``Report of the Edison Electric Institute on Nuclear Power'',
February 1985 (An Industry Task Force comprised of the Chief
Executive Officers of seven utilities, Messrs T. Justice Moore,
Jr. (Chairman), Virginia Electric and Power Company; Edward L.
Addison, The Southem Company; Howard P. Allen, Southern
California Edison Company; William B. Ellis, Northeast
Utilities; William S. Lee, Duke Power Company; Donald W.
McCarthy, Northem States Power Company; Marshall McDonald,
Florida Power & Light Company; John J. Keamey, Edison Electric
Institute; developed this report for the industry. Its results
were communicated to the NRC).
findings & recommendations
11. ``[u]nder present regulatory and institutional arrangements, no
American electric utility would consider ordering a new nuclear power
plant. The costs and risks of nuclear development in the United States
have become unacceptably high.''
12. One specific recommendation was the ``[e]xamination of the
management structure of the NRC with the objective of improving the
organization's effectiveness and efficiency.''
G. ``A Report on the Management Structure of the Nuclear Regulatory
Commission,'' June 1986 (Prepared for Edison Electric
Institute)
13. ``. . . new commitments for nuclear energy plants essentially
stopped about the time the Commission was formed. Every civilian
nuclear energy plant ordered after the Commission was established has
either been canceled or placed on indefinite deferral. While many
factors contributed to this drop-off in commitments to nuclear energy,
the organizational structure of the Commission is viewed as one
contributor to the unpredictability and lack of stability in the
Federal safety licensing process. Without predictability and stability,
the nation's utilities are unable and unwilling to call on new nuclear
energy plants to fill the energy needs of a growing economy.''
H. ``Leadership in Achieving Operational Excellence'', August 1986 (A
report for the U.S. Nuclear Utility Industry, developed by:
Lelan F. Sillin, Jr, past Chairman Northeast Utility, past
Chairman of INPO; Marcus A Rowden, former Chairman of the NRC;
Eugene P. Wilkinson, first President of INPO: [The Sillin
Report])
14. ``We note, in this regard, the comparative description of the
U.S. nuclear regulatory approach with that followed in six foreign
countries surveyed for the NRC whose nuclear regulatory programs, from
a safety standpoint, have been as successful as ours but are far less
contentious (Canada, the Federal Republic of Germany, France, Japan,
Sweden, and the United Kingdom).* In these foreign programs, more
confidence and greater reliance is placed on the facility operator to
assure the public health and safety; the regulatory body follows a
markedly less prescriptive approach in setting safety requirements; and
the relationship between regulator and regulated is characterized by
collaboration in pursuing common safety aims.
15. The prescriptive nature of the U.S. nuclear regulatory process
has created an unsatisfactory working interface--one which encourages
licensee dependence on NRC directives rather than licensee safety
initiative. The post-TMI Kemeny Commission was sharply critical of this
state of affairs.''
16. ``The hard fact is that the operators of these licensed plants
are in the best position to assure their safe and reliable functioning;
regulation, no matter how competently and rigorously applied, cannot
assume this role. That reality should be a prominent factor in the
shaping of regulatory policy affecting the quality of the industrylNRC
interface.''
I. Letter from the Chairman of the Advisory Committee on Reactor
Safeguards to the Chairman of the Nuclear Regulatory
Commission, dated, October 15, 1986
This letter cites a range of weaknesses in the NRC, including:
17. ``There is a lack of direction within the Agency. The
(proposed) planning process, no matter how well done, will not be
executed well because the Commission has trouble, first, in
articulating its priorities and second, in getting them implemented.''
18. ``It (the staff) has a tendency to regulate in an economically
wasteful fashion, NRC must accept its share of the blame that
backfitting has been necessary and very expensive, that QA/QC
requirements lead to very high costs, that ``nuclear power has priced
itself out of the market'' in the words of one utility representative,
and so on. In some cases it has established unduly conservative,
expensive, sometimes unnecessary regulations (e.g., 10 CFR Part 21-
Reporting of Defects and Noncompliance). The Staff builds in
conservatism discipline by discipline and parameter by parameter,
rather than being as realistic as the technology will support and then
adding an appropriate factor of safety at the end. It seemingly does
not act on the results of safety research (if in the direction of
relaxation), and requirements once established are seldom relaxed. The
Staff seems frequently not to arrive at practical, cost-effective ways
to solve problems.''
19. ``There is a adversarial relationship between the Agency and
the regulated that sometimes detracts significantly from the ability of
the Agency to operate in an effective and efficient manner.''
20. ``It (the NRC) lacks the ability to regulate in a fashion which
builds confidence and trust in the regulator. It has not exercised
adequate discretion in avoiding relatively needless modification and
backfits, although the performance of the Committee to Review Generic
Requirements (CRGR) has been very encouraging. (There is a need to
bring more operating experience to the Staff and to improve the
Agency's understanding of the operational nuances of the plants that it
regulates.) We are told by industrial representatives that industry
will not build new plants until it has confidence that a stable,
predictable regulatory situation exists.''
21. ``It (the NRC) has developed a regulatory system that is so
comprehensive, and frequently so prescriptive, that both the NRC and
many of the operating utilities have come to believe, or act as though
they believe, that compliance with the regulations is itself sufficient
to assure safety. The assumption that regulations and safety are
synonymous may be dangerous and should be reexamined.''
J. Letter from the Chairman of the Advisory Committee on Reactor
Safeguards (ACRS) to the Chairman of the Nuclear Regulatory
Commission regarding coherence in the regulatory process, dated
November 24, 1989
excerpts
22. ``As we have observed in a number of the referenced reports,
the NRC seems to suffer increasingly from a lack of coherence in the
formulation and implementation of its regulatory strategy. . . . .It
seems to us axiomatic that regulation will be most effective in support
of nuclear safety--our common objective--if it is coherent and
defensible, and thereby understood and respected by those who are
regulated.''
23. ``There is the problem of the Regional Administrators, who
sometimes have practices that differ from each other, and from
Headquarters. In the end, it is the Regional Administrators with whom a
licensee has most contact, and who embody NRC in the field, and there
are too many cases in which their dicta go well beyond the policies set
by the Commission.''
K. Letter from the Chairman of the ACRS to the Chairman of the NRC
regarding the status of the SALP process, dated December 21,
1989
24. ``The SALP ratings are extremely important to the licensee, for
both economic and other reasons; it is therefore essential that the
process through which they are determined be as objective and credible
as it is possible to make it. We recognize that there is not available
a set of fully objective performance indicators and that any rating
system must therefore have an element of subjectivity. It is then
doubly important that the procedures incorporate a set of credible
checks and balances to minimize the effect of the personal
predilections of the board members.
Instead we learned from this briefing that the process is almost
entirely (we were told 80 percent) in the hands of the Regional
Administrator, who not only appoints most of the board from among his
own personnel, but is even free to reject an [sic] SALP rating he
doesn't like, and reconstitute the board as he wishes. The rating
therefore provides still another weapon for the Administrator to
enforce his personal views, effectively free of restraint. There is no
appeal procedure. Even with the best of Regional Administrators this
strikes us as unwise, with the worst it could make a mockery of
coherent regulation.
During our briefing, we were variously told that the purpose of an
SALP rating is to advise the Regional Administrator (though he signs
it), and then to help him advise the licensee. At the end it wasn't
clear which. We were also told that a licensee must exhibit a steady
improvement to keep his SALP rating constant, then that he needn't, and
finally that he did. If true, that is not consistent regulation.
Improvement toward what end? You may wish to read the transcript of our
meeting.
We could continue, but the message is that your staff has created a
process which is out of control. If indeed all the questions we asked
have reasonable answers, they were not known to the responsible staff
elements, even during a prepared briefing devoted to the subject.
On this isolated example of incoherence, we think you should make a
clear statement of the purpose of SALP ratings, insist that your staff
implement that purpose and no other, insist that the staff not use the
ratings as weapons to enforce obedience to idiosyncratic policies that
are not yours, greatly dilute the Regional autarchy in the process, and
institute a workable set of checks and balances. Abuses of SALP abound
and they bring no credit to the regulatory process.
We also believe that this is a sufficiently important problem to
justify consideration of suspension of the program and issuance of no
new SALP ratings until enough reform measures are instituted to lend
credibility to the process.''
L. Regulatory Impact Survey of 1989/90, draft NUREG 1395 (``Industry
Perceptions of the U.S Nuclear Regulatory Commission on Nuclear
Power Plant Activities'')
The Executive Summary of the report on this survey, prepared by the
NRC staff, identifies the ``principal themes of the survey'' as:
25. ``NRC so dominates licensee resources through its existing and
changing formal and informal requirements that licensees believe that
their plants, though not unsafe, would be easier to operate, have
better reliability, and may even achieve a higher degree of safety, if
they were freer to manage their own resources'' and,
26. ``licensees (utilities) acquiesce to NRC requests to avoid poor
numerical Systematic Assessment of Licensee Performance (SALP) ratings
and the consequent financial and public perception problems that
result, even if the requests require the expenditure of significant
licensee resources on matters of marginal safety significance.''
M. Letter from a member of the Advisory Council on Reactor Safeguards
to NRC Chairman Kenneth M. Carr regarding coherence in the
regulatory process, February 15, 1990
27. ``It is almost as if the NRC were created to be incoherent.
There are five Commissioners and five statutory offices. There are many
branches and five Regional Offices, with a kind of matrix management
tying it all together. Regulatory power is spread throughout, resulting
in a melange of technical positions, regulatory guides, generic
letters, policy statements, undocumented pressures, enforcement
actions, etc. The mechanisms for providing incentive to the various
elements of the staff to test their actions in the light of Commission
objectives are inadequate. Indeed those objectives are not always easy
to determine, for reasons that need no elaboration here. This is not to
say that anyone is deliberately misbehaving, only that too many are
free to proceed in the light of their own best judgment.''
N. Letter from a member of the Advisory Committee on Reactor Safeguards
to the five NRC Commissioners, entitled ``Impact of the
Regulatory Failure to Recognize the Law of Diminishing
Returns,'' July 13, 1990
28. The situation depicted in NUREG-1395 has many facets and
manifestations, but in principle the morass of associated difficulties
stems primarily from the lack of coherence among the NRC staff members
and from their ignoring the Law of Diminishing Returns. That law is as
immutable as the Law of Gravity. The particular corollary which is--and
has been increasingly ignored in the regulation of operating nuclear
power plants is that the extra effort necessary to achieve further
imposed ``improvement'' in any one aspect of such a multipronged
endeavor will at some point become detrimental to effective--and safe--
achievement of the objectives of the endeavor as a whole. In my
judgment the point where the continuing search for further
``improvement'' became counterproductive was reached some time ago with
respect to many aspects of nuclear power plant operation.''
29. ``I believe and have believed for some time that there is a
pervasive, insidious and ever-worsening aspect of the implementation of
NRC requirements that has become detrimental to the safe operation of
all nuclear power plants. The symptoms of this problem and many of its
associated difficulties are dramatically revealed by the utility
comments recorded at length in Appendix A (109 pages) to NUREG-1395,
``Industry Perceptions of the Impact of the U.S. Nuclear Regulatory
Commission on Nuclear Power Plant Activities'' (Draft Report dated
March 4990),''
30. ``The current results of this chronic situation include:
<bullet> Frustration and resentment on the part of utility
personnel at all organizational levels,
<bullet> Ever-growing, yet eternally overloaded, plant and plant
support organizations. This leads to blurred lines of authority and
accountability, to less effective communication, and to impaired
understanding and cooperation between support groups,
<bullet> Creation of vastly more extensive procedures, training
programs, correspondence and paper work of all sorts, reviews and
audits, recordkeeping and futility of commitment ``control'' processes,
<bullet> Greater opportunities for (and probability of) violations
and ``lack of responsiveness''; thus, ``justification'' for imposition
of more ``improvements,''
<bullet> Reduced opportunity and motivation for people to ``stop
and think'' rather than to ``do it by rote,''
<bullet> Increased concentration on the relatively probable and
probably trivial, at the expense of the relatively improbable, but
potentially serious.
In my personal judgment such a situation constitutes the basis for
real and immediate concern as to the detrimental effects on nuclear
safety of current NRC staff practice with respect to operational
``improvements'' at nuclear power plants.''
O. Survey of NRC Staff Insights on Regulatory Impact, SECY 90-250,
dated July 16, 1990
(In followup to the survey of utility personnel cited in item L
above, the NRC Commissioners asked for this survey of the NRC staff The
results were reported to the Commissioners by the Executive Director of
Operations in SECY 9?250 Key excerpts follow.)
31. ``In general, an underlying observation expressed by most of
the (NRC) staff surveyed, regardless of the specific NRC program being
discussed, was that licensees are extremely sensitive to NRC activities
and sometimes acquiesce to avoid confrontations that could create the
perception that they are unresponsive. To this extent, licensees are
vulnerable to potential abuses of regulatory authority.''
32. ``In addition to this general observation, the following more
specific principal themes emerged:
a. Many of those surveyed felt that the NRC does not consider the
cumulative impact of requirements on licensees and does not
adequately communicate to licensees the priority of each new
requirement.
b. Many of those surveyed stated that the volume and scheduling of
NRC activities onsite, particularly team inspections, significantly
impact licensees.
c. To a lesser extent, persons surveyed expressed the view that a
continued loss of experienced professionals has depleted the
knowledge and experience base of the NRC. Examples vere cited where
a lack of experience, training, or careful management oversight
resulted in an unnecessary impact to licensees.''
P. Letter from the Advisory Council on Reactor Safeguards to Chairman
Kenneth M. Carr regarding the reevaluation of the SALP program,
September 12, 1990
33. ``We have concluded that the recommended programmatic changes
are appropriate and generally consistent with the objectives that have
been defined for the program. However, we do not believe that these
changes go far enough. . . We believe that such changes are needed in
the interest of improving the overall coherence of the agency's
regulatory process. This view is strongly supported by the regulatory
impact surveys of both licensees and staff members.''
Q. Presentation to the NRC Commissioners on the State of the Industry,
October 26, 1990 (A presentation to the NRC Commissioners by a
NUMARC panel comprised of Messrs. Eugene R. McGrath, Chairman
and Chief Executive Office of Consolidated Edison Company of
New York and Chairman of NUMARC; John C. Brons, Executive Vice
President of New York Power Authority; Byron Lee, President and
Chief Executive Officer of NUMARC, and Joe F. Colvin, Executive
Vice President of NUMARC.)
comment by the chairman of numarc
34. ``The results we have achieved so far working together in the
areas of maintenance and procurement are, unfortunately, not the rule.
Frankly, the view from the trenches is not so good. The cumulative
impact of regulation and enforcement by the NRC and I mean both
headquarters staff and the regional offices--is significant, and not
always conducive to our efforts to improve our operations and our
striving for excellence.''
R. Letter from the President of the Institute of Nuclear Power
Operations to the Chairman of the Nuclear Regulatory
Commission, dated December 11, 1990
opening paragraphs
35. ``As you are aware, there is a long-standing concern over the
potentially adverse impact of this nation's regulatory process,
particularly the cumulative impact on utility management's
responsibilities and prerogatives related to nuclear safety. This
concern has been raised in various reports in the past, including:
<bullet> Report of the President's Commission on The Accident at
Three Mile Island (Kemeny Commission Report), October 1979
<bullet> Three Mile Island--A Report to the Commissioners and to
the Public (Rogovin Report), dated January 1980
<bullet> A Survey by Senior NRC Management to Obtain Viewpoints on
the Safety Impact of Regulatory Activities from Representative
Utilities Operating and Constructing Nuclear Power Plants, August 1981
<bullet> Leadership in Achieving Operational Excellence, The
Challenge for all Nuclear Utilities (Sillin Report), August 1986
Similar concerns were expressed in ACRS letters on coherence in the
regulatory process and reevaluation of the SALP program (dated November
24, 1989; December 21, 1989; and September 12, 1990.)
The regulatory impact surveys conducted by the NRC in 1989 and 1990
focus on this same theme. These surveys include the following:
<bullet> Industry Perceptions of the Impact of the U.S. Nuclear
Regulatory Commission on Nuclear Power Plant Activities (NUREG-1395--
Draft Report, March 1990)
<bullet> Results of Industry Survey on Licensee Management
Involvement in Inspections and Audits (SECY-90-205, June 7, 1990)
<bullet> Survey of the NRC Staff Insights on Regulatory Impact
(SECY-90-250, July 1990)
Most recently NUMARC and industry executives described these same
types of concerns in their October 26, 1990 meeting with the
Commissioners.
The central problem discussed in these documents and the NUMARC
briefing is consistent with the information INPO is receiving from our
interactions with utilities and at the nuclear plants.''
S. Letter from NUMARC on behalf of the industry in response to a
request for comments on SECY-90-347, ``Regulatory Impact Survey
Report,'' January 28, 1991
36. ``Unfortunately, the corrective actions proposed in SECY-90-347
fall short of addressing the significant, long-standing and pervasive
problems in the regulatory process identified by the survey and will
not correct the underlying causes of those problems. The recommended
actions fail to address the two principle themes that were developed by
the staff from licensee concerns with current NRC regulatory activities
and attitudes.''
37. ``From our evaluation of the comprehensive survey information
documented by the NRC we conclude that the underlying element is the
need for improvement in the overall management effectiveness of the NRC
in order to achieve appropriate management discipline and
accountability over NRC regulatory activities and actions.''
38. ``. . . we encourage the Commission to take advantage of this
unique opportunity to address the fundamental, long-standing
institutional and regulatory problems and we encourage the Commission
to consider the use of outside assistance to evaluate and assess
management effectiveness.''
T. Staff Requirements Memo on SECY-91-172, ``Regulatory Impact Survey
Report--Final,'' December 1991
key excerpts
39. ``The Commission requests that the staff prepare annual updates
on progress of implementing the activities described in this paper. The
program assessments should evaluate lessons reamed from the success or
failure of different efforts, and from licensee assessments of these
efforts.''
40. ``In the area of generic communications in which a new staff
position is articulated or through which staff seeks additional
licensee commitments (as opposed to simply disseminating knowledge
gained from operational experience), the Commission should be apprised
of such communications prior to their issuance. . . since generic
communications do not provide formal notice and comment opportunities,
efforts should be made in such canes to solicit the views of interested
groups.''
41. ``The staff should undertake a comprehensive review of SALP
results to determine whether appropriate QA controls are in place to
ensure consistent and reliable evaluations. The review should: include
an analysis of both intra- and inter-regional consistency of standards,
procedures and results; address the mechanisms present to ensure that a
national standard is present and the temporal implications (``rising
expectations'') are precluded; and evaluate whether sufficient controls
are in place to ensure that individual inspector findings and opinions
cannot unduly influence the final evaluations.''
U. National Academy of Sciences Study: Nuclear Power--Technical and
Institutional Options for the Future, 1992
conclusions & recommendations
42. ``Nuclear Regulatory Commission
An obstacle to continued nuclear power development has been the
uncertainties in the Nuclear Regulatory Commission's (NRC) licensing
process. Because the regulatory framework was mainly intended for light
water reactors (LWR) with active safety systems and because regulatory
standards were developed piecemeal over many years, without review and
consolidation, the regulations should be critically reviewed and
modified (or replaced with a more coherent body of regulations) for
advanced reactors of other types. The Committee recommends that NRC
comprehensively review its regulations to prepare for advanced
reactors, in particular, LWRs with passive safety features. Their view
should proceed from first principles to develop a coherent, consistent
set of regulations.
The Committee concludes that NRC should improve the quality of its
regulation of existing and future nuclear power plants, including
tighter management controls over all of its interactions with licensees
and consistency of regional activities. Industry has proposed such to
NRC.
The Committee encourages efforts by NRC to reduce reliance on the
adversarial approach to issue resolution. The Committee recommends that
NRC encourage industry self-improvement, accountability, and self-
regulation initiatives. While Federal regulation plays an important
safety role, it must not be allowed to detract from or undermine the
accountability of utilities and their line management organizations for
the safety of their plants.''
V. Letter from Jack Brons, New York Power Authority, to Chairman Ivan
Selin, September, 1992
43. ``The theme develops the point that significant procurement,
storage, installation, surveillance, inspection, quality control,
engineering and administrative licensee resources are diverted to
issues that do not contribute significantly to safety. This is not only
wasteful but is shown to contribute to safety degradation.''
44. ``Sometimes the details of the regulations go even beyond the
situation I have described thus far. In the details of the ATWS rule
was a requirement for diversity. That is, the hardware was not only
required to be ``safety grade'' but also redundant trains had to have
components from different manufacturers.--This of course requires
separate engineering, drawings, procedures, multiplies stock
requirements, and in the increased complexity, opens the door for
error. The industry, supported by the BWR owners group and the
equipment designers, specifically appealed this expensive nuance at
several levels with the NRC staff and ultimately gave up at the EDO
level. The value added to plant safety was never demonstrated.''
45. ``On a daily or weekly basis, issues of regulatory compliance
interpretation at this level of importance, or less, occupy the
attention of the utility staff, require meeting with the NRC
inspectors, often result in further meetings or discussions with the
Resident or NRC inspectors at the regional level. . . If a licensee
chooses to disagree with the inspector, resident or regional official,
he is frequently viewed as uncooperative or it is pointed out that SALP
1 plants behave differently.''
W. Letter from Mr. Nicholas S. Reynolds, Esq. Winston & Strawn, to
Counsel, U.S. Nuclear Regulatory Commission, dated October 9,
1992
excerpts
46. Concerning the SALP process, ``A process for assessing licensee
performance against subjective criteria exceeding legal requirements
appears, on its face, to be unlawful. Under the Atomic Energy Act
(``Act''), the NRC generally has authority to establish binding
standards governing the activities of licensees by only three means:
rules, regulations or orders.''
47. ``Therefore, it is NRC rules, regulations and orders, adopted
pursuant to the Act and in accordance with the procedural dictates of
the Administrative Procedure Act (``APA''), that dehme standards of
licensee performance. In contrast, NRC actions that compel licensees to
take extra measures as a result of SALP evaluations usually are not
founded on requirements prescribed through rulemaking or by an order.
Rather, these extra measures are driven by the Staff s subjective
evaluation criteria. In order to be deemed an acceptable performer, a
licensee must satisfy these non-regulatory expectations, these
``phantom'' requirements.''
48. ``So postured, the SALP Program appears to exceed the authority
the NRC under the Act (Atomic Energy Act). . . . In addition, NRC
implementation of the SALP Program seems to be inconsistent with the
APA. Specifically, the NRC, in assessing licensee performance on a
case-by-case basis against standards that are not themselves law, and
which indeed exceed what is the law--duly promulgated NRC regulations.
SALP assessments substantially affect NRC licensees. Such assessments
are action forcing. In practical terms, they compel new measures and
commitments of licensee resources.''
49. ``In general, the SALP Program, even with the revisions
currently under discussion--remains an essentially subjective process
for rating licensee performance on the basis of undefined criteria in
excess of regulatory requirements. As a result, licensees are driven to
make commitments of substantial resources simply to achieve better SALP
scores, with no demonstrated correlation to compliance with regulatory
requirements or enhancement of public health and safety. Moreover, SALP
has the added effect of encroaching on licensee management prerogatives
by inviting the NRC Staff to ``second-guess'' and, at times, preempt
management decisionmaking.''
50. ``The SALP Program, as implemented, appears to exceed NRC's
lawful authority under the Atomic Energy Act, circumvent the
Administrative Procedure Act, by-pass the NRC's own backfilling rule
(10 CFR 50.109), and premise regulation on vague and evolving
standards.''
X. Letter from the President, Nuclear Management and Resources Council
(NUMARC) to the Chairman, U.S Nuclear Regulatory Commission,
dated October 20, 1992
51. ``The definitions of the SALP categories and the pressure from
the NRC and the financial regulators to improve from a Category 3
rating ``an level of performance'' to a Category 1 rating--``a superior
level of performance''--inevitably affects the allocation of licensee
resources. The ostensible identification of strengths and weaknesses in
SALP reports and assignment of specific SALP numerical ``grades,''
notwithstanding full compliance with all applicable regulations,
results in pressure for performance to escalating standards that are
far in excess of regulatory compliance. While the industry is committed
to strive for excellence, this commitment to excellence cannot, and
should not, be managed and directed by anyone other than the licensee.
NRC pressure on individual areas, based on subjective judgments,
interferes with the industry's overall progress toward excellence and
is unwarranted--the NRC's statutory responsibility is to assure
compliance with formally issued regulations. As indicated by the NRC
staff in the conclusions of NUREG-1395, interference by the NRC into
areas of utility management and NRC domination of licensee resources
could actually be detrimental to our mutual goal of plant safety.''
52. ``Thus, as implemented, the SALP process is inherently flawed.
The SALP process is subjective, establishing grades based upon opinion
rather than on established and consistent criteria. This results in a
``moving target'' for utilities, pushing licensees beyond the scope of
existing, formal regulations, even though the Commission has directed
the staff, in a December 1991 Staff Requirements Memo (SRM), to ensure
that the ``rising expectations'' of the process are precluded.''
Y. ``Regulatory Review Group Charter' provided to Commission through
memo from James Taylor, EDO, in response to Commission request
(COMIS-92025--Regulatory Review), December 1992
purpose
53. ``A detailed review should be conducted specifically for those
regulations or implementation practices which appear to go beyond that
which is required for ``adequate protection.'' In conducting this
detailed review, special attention will be placed on the feasibility of
substituting unnecessarily prescriptive requirements and guidance with
performance based requirements and guidance founded on risk insights.
Revision of appropriate requirements and guidance in this manner should
result in increased overall industry flexibility in plant operations
without impacting reactor operational safety and may in fact contribute
to operational safety.''
Z. Draft Report of the Regulatory Review Group providing the findings
of the Group's comprehensive and disciplined review of power
reactor regulation and related processes, programs and
practices--submitted for public comment, May 28, 1993
key excerpts
54. ``. . . a deficiency was found to exist in the regulations
governing the processes that control changes to programs adopted by
licensees to implement the regulations. . . The Review Group found that
the word ``commitment'' lacked both a definition and a defined change
mechanism and that the plans listed have no fixed standard above which
a licensee can make changes on its own volition. The lack of definition
of commitment and the lack of a fixed standard for plans leave
uncertain the degree of autonomy that licensees can exercise in
carrying out their safety function. Additionally, the opportunity for
informal backfitsto occur as part of the review and inspection
processes is enhanced by the lack of definition and standard. The
contribution to regulatory burden from past commitments beyond what is
required by the regulations is potentially large. . . ''
55. ``In the past, numerous generic letters were issued (in 1980,
113 were issued) to address programmatic resolution of specific items
or very large issues, such as TMI action items. As a result of what has
been considered a proliferation of generic communications (as
identified by the industry over the past several years, including
during the Regulatory Impact Survey), three major weaknesses with the
implementation of generic communications were recognized. These were:
(1 ) the staff rarely considered the cost of the request in the generic
letter; (2) the industry had no opportunity to comment or participate
in the technical resolution of an issues until the requests for
information were spelled out in the generic letter; and (3) there was
not always a clear tie from the requested action to the regulations.''
AA. Letter from NUMARC to the NRC Regulatory Review Group submitting
comments on the group's report, July 1993
56. ``We endorse the central theme in the report that most of the
apparent inflexibility in regulatory requirements does not reside in
the regulations, but rather in the implementing practices and
associated guidance documents. The over-emphasis on implementing
practices often has created an inflexible environment where the methods
of compliance have taken on greater significance than the legal
requirements themselves. This environment, in tum, results in
unnecessary expenditures of NRC and industry resources without
commensurate safety benefit. Before performance-based regulatory
approaches can be developed and successfully implemented, a clear
distinction between formal regulatory requirements and informal
regulatory guidance must be established, both in principle and
practice.
We also endorse the implicit finding of the report that, all too
often, informal regulatory mechanisms are employed as substitutes for
formal regulatory requirements. . . burdens should not be imposed on
licensees that are not necessary to ensure an adequate level of
protection or where the costs, both direct and indirect, of a proposed
NRC action do not provide a commensurate safety benefit, thereby
distracting licensees from more safety-significant actions.''
BB. Report of Regulatory Review Group (Final), August 1993
summary
57. ``The Regulatory Review Group has conducted a comprehensive and
disciplined review of power reactor regulation and related NRC
processes, programs, and practices for their implementation. In
conducting this review, special attention was placed in the feasibility
of substituting performance-based requirements and guidance founded on
risk insights for existing prescriptive ones. 1 he Review group then
went beyond specific documents and examined the processes that use and
generate documents with the view that the documents are a product of a
process. This examination of processes included industry's role and
their potential roles. The findings and recommendations of the Review
Group focused on identifying specific problems, their causes and
achievable solutions.''
Note: The NRC action plan to implement the Regulatory Review Group
report has not yet been released to the public. Any NRC corrective
actions that have been proposed to address identified problems are,
therefore, unknown at this time.
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
Attachment C
Nuclear Energy Industry Recommendations For Improving NRC's
Regulatory Culture
NRC needs a new plant assessment process that:
<bullet> Objectively measures the safety performance of nuclear
power plants through quantitative measures;
<bullet> Accurately communicates the safety performance of nuclear
power plants to the public and other stakeholders;and
<bullet> Provides actionable thresholds to distinguish when
licensee action is appropriate and when regulator action is
appropriate.
NRC's enforcement policy needs an improved safety focus.
<bullet> The increase in industry violations is inconsistent with
improving industry safety performance; and
<bullet> Violations of low safety significance consume NRC and
industry resources. Minor discrepancies should not be cited, but
rather, recorded in inspection reports.
NRC must expedite risk-informed, performance-based regulation.
The nuclear industry shares NRC's vision of the potential benefits
of this approach; and
<bullet> The current NRC approach is too slow and creates a
reluctance on the industry's part to invest in this area. The following
examples illustrate this point:
<bullet> NRC staff took 4 years to issue regulatory guides for in-
service inspections, in-service training and graded quality assurance--
all are obvious improvements in safety and efficiency.
<bullet> The industry's proposed ``whole-plant'' risk study is in
jeopardy of being canceled because the NRC staff is unable to act in a
timely manner on even the simplest proposed item to extend post-trip
hydrogen sampling times.
NRC needs strict application of the backfit rule.
<bullet> NRC staff routinely impose new, applying the backlit
rule; and
<bullet> The discipline provided by the backlit rule should be
applied to decommissioning issues and reflect the reduced risk posed by
plants in a defueled condition.
NRC communication to licensees should reflect senior management
direction and policy.
<bullet> Management does not exercise its responsibility to
control individual interpretations of regulations that differ from
established positions;
<bullet> Requests for Additional Information (RAI) frequently
solicit commitments that exceed established positions; and More
accountability has to be provided in management oversight.
NRC should conduct a task analysis of work processes to ensure
timely action and effective use of resources.
<bullet> NRC takes an inordinate length of time to process
licensing actions, complete enforcement activities, and promulgate
rulemakings. For instance, the agency takes three to 4 years to certify
dry storage containers.
NRC should eliminate duplication of effort. Examples include:
<bullet> The industry has established effective programs for
evaluating events and compiling performance data;
<bullet> NRC should review licensee self assessments rather than
conducting redundant inspections.
NRC must expedite the certification of dry storage containers.
<bullet> Twenty-five plants will lose full core offload capability
by 2000 if they cannot expand pool storage or use dry storage
technology.
<bullet> Container certifications take three to 4 years. The
agency should ensure the 1-year goal for certification.
__________
Responses by Joe F. Colvin to Additional Questions from Senator Inhofe
Question 1. The GAO has concluded that the competency of a nuclear
plant's management is perhaps the most critical factor in safety
performance. This conclusion makes basic sense. What are the views of
Panel II members on this matter? How best can the GAO recommendation be
implemented, including by the NRC?
Response. The safe operation of a nuclear power plant requires
effective design, engineering, operation, and maintenance by people.
Management's role is to provide the training, tools and equipment,
processes, procedures and direction that will allow people to do their
jobs. To determine whether management is competent, one must answer the
following questions: (1) Are the managers properly qualified to perform
their jobs? and (2) Are the managers actually achieving safe
performance?
The NRC appropriately has established qualification requirements
for key safety positions at nuclear power plants, including (among
others) plant managers, managers of operations, maintenance, radiation
protection, quality assurance, and shift supervisors, who are directly
responsible for controlling the condition of the plant. These
qualification requirements include education, training and years of
experience. The utilities comply with these requirements, and the NRC
inspects to see that they are met. Therefore, the answer to the first
question is yes, managers are properly qualified to perform their jobs.
Management is effective if the safety results for which they are
responsible are consistently achieved. If the results are not achieved,
management effectiveness may be the cause, and further evaluation is
needed. It may just as easily turn out that the cause was defective
equipment or some factor outside the control of management.
The GAO recommendation to assess management competence assumes that
there is an accepted model of how managers should think and act. There
is no such model. Different management styles and models appear and
disappear, are proclaimed to be the ``true way'' and then abandoned
when the next fad appears. For example, one can recall such approaches
as `` management by objectives,'' ``zero based budgeting,'' ``total
quality management,'' and ``re-engineering.'' Effective management
depends on the job situation, the environment, and the personalities
and skills of the manager and the people working for the manager. It is
as much an art as a science and cannot be turned into an inspection
module. It is also very clear that management science has not been able
to identify what style of management, or set of management attributes,
predict success, or failure.
This is not to say that utilities do not attempt to provide their
managers with ``soft'' management skills. They do. Utility executives
understand the importance of management and provide training to help
managers make optimal business and safety decisions. This training is
provided by internal utility training programs; industry training
programs such as those sponsored by National Academy for Nuclear
Training, which operates under the auspices of the Institute of Nuclear
Power Operations (INPO); and external training programs through
universities and management consulting firms. But there is not a single
approach that can be accepted in a regulatory requirement and inspected
to. Senior NRC management knows this. The GAO recommendation was not
well thought out and should be rejected.
The best way to implement the GAO recommendation (to assess
management competence) is to establish clearly defined and objective
standards for safety performance results, rather than trying to measure
subjective and poorly defined attributes for management decisionmaking.
[Case in point: Who was a more effective manager--General Eisenhower or
General Patton? Both generals had similar education and experiences,
but each had totally different management styles. Yet, each general
achieved his respective objectives.] The only way to know if management
is effective is by reviewing performance against objective standards
and outcomes.
Industry and the NRC are in the process of defining some objective,
safety-based performance standards against which to measure safety
performance. If adopted, this process would identify the extent to
which safety standards were being met. In addition, trending methods
are included that would provide early warning of a decline in safety
performance.
Question 2. You have expressed general agreement that the Watch
List process--by which the NRC is supposed to provide an early warning
about problem plants--is not working well. What specific changes would
you recommend to improve this process?
Response. The current Watch List process does not provide clear
safety guidelines or define safety requirements for the evaluated
categories. The NRC's plant assessment process does a credible job of
identifying the lower performing plants in the industry, but does not
determine if this level of performance impacts safety. We have reviewed
the safety performance data of plants recently placed on the Watch List
and find that their safety performance is better than the best
performing plants in 1985. As overall industry performance has
improved, as shown in the attached WANG 1997 Performance Indicators,
the threshold for being placed on the Watch List has increased. While
it is appropriate for the industry to strive for continually improving
performance, it is not appropriate for the regulator to continually
change performance standards.
This very subjective process results in placing a plant on the
Watch List with substantial consequences. A plant expends an average of
$200 million per reactor after being placed on the Watch List. Much of
these funds are spent on issues that have little or no impact on plant
safety, but are expended to satisfy the regulator that aggressive
action is being taken. This condition causes two perverse impacts: (1)
it diverts licensee resources from matters that have higher safety
significance and (2) it usually causes a drop in company stock values
and bond ratings, putting further financial pressure on the company.
The industry has proposed that the Watch List program be replaced
by a process that establishes clear, objective safety performance
standards with defined thresholds for regulatory action. The process
also provides an operating band that defines fully acceptable safety
performance in which minimal regulatory action is needed. Performance
below the operating band would result in increased NRC inspection
activity. The bottom of the operating band is set at a value which
still provides a high margin to public health and safety and provides
ample time for the NRC to increase its oversight. The approach is
described in the attached paper ``A New Regulatory Oversight Process''
(draft 8/6/98).
Adopting the approach outlined in the paper would provide clear,
objective safety performance standards, provide early warning of plant
safety problems, and eliminate the uncertainty and ``surprise''
associated with the current process. This approach would be a more
effective way of achieving the objectives of the Watch List
(identifying declining plant performance to allocate NRC resources)
without its inherent weaknesses.
__________
Statement of James T. Rhodes, Chairman and Chief Executive Officer The
Institute of Nuclear Power Operations
Thank you, Mr. Chairman. I am James T. Rhodes, chairman and chief
executive of fleer of the Institute of Nuclear Power Operations, INPO,
based in Atlanta, Georgia. The purpose of my testimony is to briefly
outline INPO programs to promote safe and reliable operation of
commercial nuclear power plants, and discuss how these efforts are
complementary to but independent of the Nuclear Regulatory Commission;
to discuss recent nuclear industry performance; and to summarize some
of the more important challenges facing the commercial nuclear power
industry in this country.
The Institute of Nuclear Power Operations
The mission of the Institute of Nuclear Power Operations is to
promote the highest levels of safety and reliability--to promote
excellence--in the operation of nuclear electric generating plants.
INPO was formed by the U.S. nuclear utility industry in 1979. In
carrying out this mission, INPO does not engage in public, media or
legislative activities to promote nuclear power.
INPO is a nonprofit, technical organization, with all U.S.
utilities that operate commercial nuclear power plants being a member.
In addition to these domestic member utilities, nuclear operating
organizations in 15 other countries, and 12 nuclear steam supplier and
architect-engineering and construction firms from around the world,
participate in INPO's international and supplier participant programs,
respectively. To ensure credibility with its members and with the
Federal Government, INPO maintains its independence with respect to any
individual member and with respect to government agencies.
To carry out its mission, INPO has four cornerstone programs:
<bullet> On-site evaluations of each operating nuclear plant in
the United States
<bullet> Training, and the accreditation of training programs, for
key plant personnel
<bullet> Analysis of events and communication of lessons learned
from such events; and
<bullet> Assistance to members in a broad range of areas
pertaining to nuclear plant operations
The Institutional Plan for the Institute of Nuclear Power
Operations and our 1997 Annual Report provide additional details about
INPO's programs and are attached to my written testimony (Attachments A
and B).
INPO's relationship to NRC
INPO is independent from, but it's role is complementary to, the
NRC. The ultimate goal of both organizations is the same--to protect
the health and safety of the public by helping ensure safe nuclear
plant operations. However, the means by which we strive to achieve that
goal are quite different.
The President's Commission on the Three Mile Island Accident--the
Kemeny Commission-observed in 1979 that strict NRC safety regulations
are necessary for nuclear safety, but, standing alone, those
regulations are not sufficient for nuclear safety. The Commission
stated in its report to President Carter that: ``We are convinced that
regulations alone cannot assure safety.'' What was needed alongside the
NRC's basic regulations was for the men and women who run our country's
nuclear plants to have a deep commitment to excellence in the pursuit
of nuclear safety. This professional commitment to excellence simply
cannot be mandated by regulations, no matter how strict. INPO was
created to help build this commitment, and it has done so. Accordingly,
INPO was not created to supplant the regulatory role of the NRC, but to
provide the means whereby the industry could, acting collectively, make
its nuclear operations safer and more reliable. INPO recognizes that a
strong and capable regulator is in the best interest of nuclear safety
and the nuclear industry.
Summary of industry safety performance
Over the past decade our country's nuclear plants have become safer
and more reliable. This improvement is reflected in a set of 10
objective, performance-based safety performance indicators the U.S.
commercial nuclear power industry uses to monitor the safety and
reliability of nuclear plants. This set of indicators has been adopted
by the World Association of Nuclear Operators, and is now used
worldwide.
I won't today discuss each performance indicator in detail--a
listing of the indicators is provided in the INPO Annual Report
included as an attachment to my written testimony.
An example is safety system performance.
This indicator monitors the availability of three important standby
safety systems at nuclear plants. The industry's goal is to encourage a
high state of readiness, with at least 85 percent of these systems
meeting specific year 2000 goals for availability in excess of 97
percent. As you can see, the industry trend shows significant
improvement. The 1997 value represents strong performance well
exceeding the year 2000 goal.
Another example is the performance indicator index, which is a
weighted composite of the individual indicators. This graph of the
performance indicator index illustrates the industry's dramatic overall
improvement since 1985.
Another important indicator of improved industry performance is the
trend of significant events at nuclear power plants. This trend is
based on data from the NRC and corroborated by INPO data. The data
shows a decrease in the number of significant events from 2.38 per unit
per year in 1985 to 0.10 at the end of 1997. This represents a decrease
of more than a factor of 20 over the past 12 years, a remarkable
achievement.
These are examples of the significant performance improvement the
industry has achieved over the past 12 years. Now, let me conclude my
testimony with a brief summary of current and future nuclear industry
challenges.
Current and Future Industry Challenges
Primarily due to impending economic deregulation of electric
utilities, the commercial nuclear utility industry faces strong
competitive pressures that are forcing unprecedented change. Many
factors are involved, but the bottom line for the nuclear industry is
that nuclear plants must operate not just safely and reliably, but also
economically, to compete with alternative energy sources such as coal
and natural gas. Nuclear plants that can achieve a high level of safe,
reliable performance will succeed; those that cannot, will not survive.
Although the industry has demonstrated a clear, sustained trend of
improvement over more than a decade, we must consider the potential
impact of the current economic and regulatory environment on the
industry. We believe the NRC needs to carefully evaluate its methods
and processes to ensure they are effective in light of the improved
industry performance. The agency plays an important role in the
commercial nuclear power industry. We believe this role can best be
served if the NRC focuses on issues that directly relate to public
health and safety, minimizing any subjective, non-safety-related
regulation that distracts both NRC and utility resources. Additionally,
there must be close connection between the expectation of the
Commission and senior officials at NRC and what actually happens in the
field at the utility and plant interface. This last subject was
addressed in more detail by Dr. Zack T. Pate, at the July 17, 1998
public meeting on stakeholder concerns, and I will not repeat his
comments here. However, a copy of that transcript will be submitted for
the record.
Subject to your questions, this concludes my testimony. Thank you.
______
Responses of James T. Rhodes to Additional Questions from Senator
Lieberman
Question 1. ``The Government Accounting Office (GAO) has concluded
that the competency of a nuclear plant's management is perhaps the most
critical factor in safety performance. This conclusion makes basic
sense. What are the views of Panel II members on this matter? How best
can the GAO recommendation be implemented, including by the NRC?''
Response. 1.a. With respect to the first portion of the question,
``What are the views of Panel II members on this matter (the importance
of the competency of nuclear plant management)?,'' it is the opinion of
Institute of Nuclear Power Operations (INPO) that competency of
management is only one of several key factors that are important to
safe reliable nuclear power plant performance.
Competency, as used here, is defined as technical qualifications
and experience needed by incumbents in key management positions. Such
qualifications and experience have been established by the industry and
documented in plant technical specifications and American National
Standards Institute (ANSI) qualification standards. They are normally
attained by formal education, plant specific training and experience,
and other training to be completed prior to, or shortly after, assuming
key management positions.
Utility management reviews the technical qualifications of
candidates they intend to promote to key positions. They compare the
individuals' education, training, and experience against the
established standards for the positions. They then take steps to ensure
appropriate education, training, and experience is attained prior to
placing the individuals in the positions.
As part of their Standard Review Plan, the Nuclear Regulatory
Commission (NRC) staff routinely reviews technical qualifications of
managers assuming key positions.
It is considered that the technical qualifications required of key
managers and the process to help ensure only technically qualified
individuals are placed in key management positions is well established,
exercised, and verified.
1.b. With respect to the second part of the question, ``How best
can the GAO recommendation be implemented, including by the NRC?''
The recommendation referred to is, ``Require that the assessment of
management's competency and performance be a mandatory component of
NRC's inspection process.''--(GAO report, ``Nuclear Regulation:
Preventing Problem Plants Requires More Effective NRC Action'' dated
May 30, 1997)
Competency is addressed in the answer to question l.a. above and is
therefore not repeated here.
Performance of managers once in key positions is the second part of
this question. Our experience at INPO has shown us that there are many
management styles in place at nuclear plants, and no one style is
correct for all plants. What is important is not what management style
is used but how well key managers work together to achieve safe,
reliable plant operations. Accordingly, in the INPO evaluation process,
we do not look at management style but at the effectiveness of the
management team. The best measure of such effectiveness is overall
plant performance. INPO provides feedback to utility senior management
on overall plant performance, noting areas of strength and areas where
management can be more effective.
The best way to evaluate management competency and performance is
to establish clearly defined, objective standards for safe, reliable
plant performance. Then, measure management performance against how
well these objective standards are met. Trying to measure performance
against subjective attributes of what makes a manager effective is not
considered useful for the NRC or any other external organization.
Over the years, INPO has established clearly defined, objective
standards of excellence for plant operations. It is to these standards
that INPO evaluation teams measure plant performance.
For the NRC, we believe the objective standards for safe and
reliable plant operations being developed by the industry, as
documented in the Nuclear Energy Institute (NEI) draft paper entitled
``A New Regulatory Oversight Process,'' go a long way to establish
objective standards to which the NRC should measure how well basic
public health and safety is protected. (It should be noted that these
standards are different from INPO's standards of excellence. However,
it is appropriate that these two independent organizations [NRC and
INPO], with complementary but different missions, use different
standards to measure plant performance.)
The paper, which has been provided to you by NEI, describes
industry recommended, objective, safety-based performance standards. It
recommends these standards be used by the NRC to measure plant safety
performance with respect to public health and safety. If adopted, this
new process will help identify the extent to which these standards are
being met. In addition, trending methods are included to help provide
early warning of declines in safety performance, giving the NRC time to
respond to such declines before they adversely affect public health and
safety.
As it looks at revising its regulatory oversight process, it is our
opinion that the NRC should consider in detail the concepts presented
in the NEI draft paper. If the proposed process were adopted, this
action should go a long way in addressing the GAO recommendation
concerning NRC's assessment of management performance.
Question 2. ``You have expressed general agreement that the Watch
List process--by which the NRC is supposed to provide an early warning
about problem plants--is not working well. What specific changes would
you recommend to improve this process?''
Response. The industry's primary concern with the Watch List
process is the lack of definition of what constitutes a decline in
performance warranting placement on the list. By every objective
measure, including the performance indicators used by the NRC, safety
performance of the industry has improved steadily over the years. In
fact, the safety performance of recent watch list plants is better than
most top-performing plants in 1985. Yet, the Watch List contained up to
13 plants within the past year.
As discussed in the answer to question l.b., we believe the
standards for safe, reliable plant operations being developed by the
industry, as documented in the NEI draft paper entitled ``A New
Regulatory Oversight Process,'' go a long way to establish objective
standards to which the NRC should measure how well basic public health
and safety is protected, and the need for a specific ``watch list''
will be eliminated.
__________
Statement of Gary Jones, Associate Director, Energy, Resources, and
Science Issues, Resources, Community and Economic Development Division,
General Accounting Office
nuclear regulatory commission: preventing problem plants requires more
effective action by nrc
Mr. Chairman and Members of the Subcommittee: We are pleased to
testify on how the Nuclear Regulatory Commission (NRC) oversees the
nuclear power industry. Among other things, NRC is responsible for
ensuring that the operation of the nation's 103 commercial nuclear
power plants occurs in a manner that adequately protects public health
and safety. Identifying nuclear plants with safety problems and making
sure that their owners-the licensees correct safety problems promptly
are essential to NRC's safety mission. This becomes even more critical
as NRC begins to regulate safety in an environment of electricity
deregulation.
Our testimony is based on our May 1997 report about preventing
problems at nuclear power plants.\1\ Our testimony discusses how NRC
defines nuclear safety, some of the causes for weaknesses in how NRC
oversees nuclear plants that have problems, and the challenges ahead
for NRC safety regulation.
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\1\[Nuclear Regulation: Preventing Problem Plants Requires More
Effective NRC Action (GAO/RCED-97-145, May 30, 1997).
---------------------------------------------------------------------------
In summary, our 1997 report points out that the Congress and the
public need confidence in NRC's ability to ensure that the nuclear
industry performs to high safety standards. While our report did not
make judgments about the safety of nuclear plants or the
appropriateness of NRC's current regulatory structure, the many safety
problems identified at plants we examined raised questions about
whether NRC's regulatory program was working as it should, and we made
recommendations to strengthen it. Specifically we found that:
NRC assumes plants are safe if they operate as designed and follow
NRC's regulations. However, all three facilities we examined-the
Millstone Nuclear Power Station in Connecticut, the Salem Generating
Station in New Jersey, and the Cooper Nuclear Station in Nebraska-were
operating outside of their approved designs. NRC reasoned that these
plants were still safe because the many safety features and systems
built into a plant's design provide an adequate margin of safety.
However, changes made to plants over time, such as replacing components
with different parts and reconfiguring systems, can alter a plant's
design, thus potentially affecting how certain safety systems might
work in an emergency. NRC has found other plants that are not operating
as designed and is exploring the reasons that the licensees have not
maintained current information on their design changes and have not
examined the impact of such changes on the safe operation of plants.
Ambiguity over ``how safe is safe'' arises because NRC does not have an
effective way to quantify the safety of plants that deviate from their
approved designs.
The three nuclear plant facilities that we examined had
longstanding safety problems, and NRC did not take aggressive action to
ensure that the licensees fixed their safety problems in a timely way.
These problems ranged from failures of equipment to work properly when
tested, to weaknesses in how licensees' conducted their maintenance
programs. As a result, the plants' conditions worsened, reducing safety
margins. NRC staff repeatedly extended the amount of time it allowed
the plants' operators to make corrective actions. In addition, although
nuclear industry and NRC officials agree that the competency of a
nuclear plant's management is a critical factor in safety performance,
in the early 1990's, NRC eliminated management assessment in
streamlining its inspection guidance. Furthermore, NRC was slow to
place plants with declining performance on its ``Watch List,'' which is
a tally of plants whose declining performance trends require closer
regulatory attention.
NRC faces many challenges to make its regulatory program work as
effectively as it can, particularly in light of major changes taking
place in the nuclear industry. As the electric utility industry
deregulates, safety margins may be compromised when licensees cut costs
to stay competitive. According to one utility industry study, as many
as 37 of the nation's nuclear sites are vulnerable to shutdown because
production costs are higher than the projected electricity prices in
the market. Decisions that NRC will be making include how safe is safe,
and what should be the nuclear plant regulatory approach of the future.
NRC's regulatory approach needs to be anchored in goals and objectives
that are clearly articulated, and performance measures that hold NRC
managers as well as licensees accountable.
Background
Commercial nuclear plants in the United States operate in 31 states
and provide about 20 percent of the nation's electricity. Five states
(Connecticut, New Jersey, Vermont, South Carolina, and Illinois) rely
on nuclear power for about half of their electricity. NRC licenses the
construction and operation of nuclear power plants, which are owned and
operated by both public and private utility companies; develops,
implements, and enforces the rules and regulations that govern nuclear
activities; inspects facilities to ensure compliance with legal
requirements; and conducts research to support its programs. NRC's
fiscal year 1998 budget authorization is $472.8 million, and it has
requested $488.6 million for fiscal year 1999. Its staff of about 3,000
is responsible to five Commissioners appointed by the President and
approved by the Senate. About 55 percent of NRC's professional staff
are dedicated to nuclear reactor activities.
NRC Does Not Precisely Define Nuclear Plant Safety
Determining the safety of plants is difficult because NRC does not
precisely define it. Instead, NRC presumes that nuclear plants are safe
if they operate within their approved designs (design basis) and meet
NRC's regulations. However, NRC's regulations and other guidance do not
provide either the licensees or the public with the specific
definitions and conditions that define the safety of a plant. As a
result, NRC does not have an effective way to quantify the safety of
plants that deviate from their approved designs or violate regulations.
Determining a plant's safety condition is, therefore, a subjective
judgment.
NRC reasons that the many safety features and systems built into a
plant's design provide an adequate margin of safety, even when some of
them are not working properly. System redundancies-the duplication of a
plant's safety systems, structures, and components provide in-depth
protection to help prevent an accident from releasing radiation to the
public. This concept, also known as defense-in-depth, forms the
foundation of NRC's confidence that nuclear plants are safe, even those
that may be shut down for safety problems.
The conditions found at Millstone in 1996, however, challenged
NRC's confidence that it can rely on licensees to ensure that the
plants are operating within their approved design basis. A special NRC
inspection team found a number of significant equipment problems and
concluded that the licensee had not consistently met its license and
regulatory requirements. NRC's inspectors were unaware of the extent of
these problems-some of which were not reported by plant managers-and
thus discovered that the Millstone plants were operating outside their
design bases. As a result of the conditions found at Millstone and at
other nuclear plants, NRC is now reemphasizing the need to determine if
plants are still operating within their design bases. The safety
significance of design basis issues are hard to quantify because NRC
does not precisely define safety. Perceptions of safety levels and risk
are subjective and are not always consistent from inspector to
inspector. Several current and former NRC inspectors told us that they
cannot easily distinguish a safe plant from an unsafe one, and that the
guidance on when to shut down a plant does not cover all situations.
NRC has incomplete knowledge about the extent to which nuclear
plants are operating within their design basis. Since the mid-to-late
1980's, NRC has found that some licensees were not documenting changes
made to their plants that could affect their approved design basis.
However, it was not until October 1996, after the problems were
discovered with Millstone, that NRC required licensees to certify that
their plants were operating within the plant's design basis. To follow
up on licensees' certifications, as of May 1998, NRC had inspected 16
sites to verify that the plants were operating under the terms and
conditions of their licenses.\2\ Generally, NRC found that some
utilities had not maintained current information on the design basis
and had not examined the impact of modifications on safe plant
operations. NRC identified significant problems during these
inspections, including instances in which licensees had not properly
tested safety related components, and had made errors in their analyses
for how emergency cooling systems would work during a potential
accident. NRC has concluded that the majority of the problems resulted
from errors in the original design or from design modifications,
inadequate testing, and discrepancies in documentation.
---------------------------------------------------------------------------
\2\These represent sites that NRC has identified for follow up
inspections.
---------------------------------------------------------------------------
NRC Is Not Effectively Overseeing Problem Plants
Identifying and correcting safety deficiencies are among the
licensees' most important responsibilities, and these are a major focus
of NRC's nuclear plant inspection program. NRC's regulations require
that nuclear plants have an effective program to ``assure that
conditions adverse to quality . . . are promptly identified and
corrected.'' And NRC places importance on evaluating plants' corrective
action programs to ensure that they will lead to timely correction of
the identified problems.
For the three facilities with a history of poor performance that we
examined (Millstone, Salem, and Cooper), we found that the licensees
failed to fix their substantial and recurring safety problems in a
timely manner. Most of these problems were equipment failures. At
Salem, for example, an air control system and a water pump motor had
not worked properly for over 6 years. NRC allowed these licensees
repeated opportunities to correct their safety problems, by relying on
licensees' corrective action plans that were never fully completed, by
accepting management's promises to fix problems (though these promises
were not always met), and by using enforcement actions too late to
effect change. For example, some of the problems causing the 1994/1995
shutdown of the Cooper Nuclear Station dated to the plant's first
start-up in 1974-problems Cooper's management should have addressed
years earlier, according to the NRC inspectors we interviewed. An NRC
audit reported that the plant managers were ``living with problems, not
fixing them'' and that ``ineffective self-assessment'' and a ``weak
corrective action program'' characterized operations. However, NRC
allowed Cooper to restart its reactors after the 1994/1995 shutdown on
the basis of the licensee's promises to fix these recurrent problems
and contingent upon Cooper's monitoring of its own progress. After
showing improvements over several months, the plant's performance
quickly declined. Then NRC discovered that many of the safety problems
that Cooper's management had promised to correct had not been
corrected.
Another tool NRC uses to obtain compliance with its regulations is
its enforcement program of fines and sanctions, which is designed to
correct violations promptly, deter future violations, and encourage
licensees to operate their plants safely. However, NRC was very slow
imposing fines on the three plants we examined.
Salem's fines were levied by NRC well after the plants were in
periods of significant decline, and at the time our report was issued,
NRC still had not completed its enforcement action against Millstone
for violations that were first discovered in 1995. NRC can also prevent
shutdown plants from restarting until all of their safety deficiencies
are addressed, but this action sometimes has occurred long after
plants' deficiencies were documented.
We recommended that NRC aggressively act on identified problems and
then document what it will do if safety problems go uncorrected. NRC's
Chairman has complained about the consequences of NRC's patience with
some problem licensees, adding that the Commission is reviewing its
internal processes to strengthen its ability to identify and act on
licensees' corrective action programs. NRC officials agree that they
need to do a better job of making licensees fix their problems, and
will bring licensees' unresponsive to corrective actions to the
attention of NRC's senior managers.
Management Competency Critical to Safety
The nuclear industry and NRC officials widely agree that Me
competency of a nuclear plant's management is perhaps the most critical
factor in safe performance. NRC's audits and reviews frequently cite
management weaknesses as the major cause of the declining performance
at nuclear plants. For example, NRC cited a ``poor management safety
culture,'' ``weak management oversight of engineering programs,'' a
``fragmented approach'' to resolving problems, and a failure to provide
an ``adequate level of oversight''\3\ as underlying causes for
deteriorated conditions at Cooper. Similarly, safety problems found at
the LaSalle and Zion nuclear plants in Illinois in January, 1997, were
attributed by NRC to weak management processes and a lack of
managements involvement.
---------------------------------------------------------------------------
\3\Supplemental Plant Performance Review, NRC (95-04, Oct. 3,
1995).
---------------------------------------------------------------------------
Yet, despite the importance of competent management, NRC does not
have an effective process for ensuring that licensees maintain it for
their nuclear plants. NRC does not assess management in its plant
inspection program, and individual inspection reports specifically
avoid any references to management's competency. NRC's references to
management weaknesses are usually made retrospectively, and often only
after a licensee admits to such deficiencies, or by NRC audit teams or
special investigations-long after the NRC has lost the opportunity to
give an early warning about potential management weaknesses. NRC's
guidance to its inspectors once contained a management assessment
component, but this was eliminated in the early 1990's when NRC
streamlined its inspection process.
Although NRC's regulations do not require the evaluation of plant
management before a license to operate a nuclear plant can be issued,
NRC must determine if the prospective licensee is ``technically and
financially qualified to engage in the activities authorized by the
operating license.'' Because such qualifications could also reflect on
a licensee's overall ability to manage a facility competently and
safety, we recommended that NRC assess management competency and
performance as part of its inspection process. A 1996 report to NRC by
Arthur Andersen also points out the importance of evaluating
management, particularly for NRC to be effective in actively assessing
plant performance. The report recommended that NRC hire experts or
train staff to evaluate management's performance and changes in
management.
NRC agrees that management's competency is critical to a licensee's
operational safety performance and told us that its existing evaluation
processes draw conclusions about the effectiveness of licensees'
management. NRC staff have proposed options to assess the performance
and competency of licensees' management, which include changes in
inspection procedures, more staff training, and use of consultants. But
the Commission rejected these options in June 1998, and instead
directed NRC staff to continue with the current practice of inferring
licensee performance from existing plant inspections and other routine
assessments. The Commission also withdrew resources specifically
directed at developing a systematic method to assess licensees'
competency and management. While we are continuing to study NRC's
rationale for its decision as part of our ongoing work, we continue to
believe that evaluating licensees' management competency as part of
plant inspection would provide a important early warning of potentially
unsafe practices.
Early Intervention Could Result In Fewer Problem Plants
NRC's process to focus attention on those plants with declining
safety performance--the semiannual Senior Management Meeting--needs
substantial revisions to achieve its purpose as an early warning tool.
NRC collects enormous amounts of information on nuclear plants, both
from its own inspectors and from the nuclear plant licensees. Taken
together, these sources provide NRC with a database to measure and
monitor plants' safety conditions and safety performance. Despite this
database, NRC has been slow to identify and place problem plants on its
``Watch List.'' The Watch List is NRC's tally of plants whose declining
performance trends require closer regulatory attention. Yet, the List
is an important early warning tool for NRC to target its regulatory
emphasis, allowing small problems to be corrected before they lead to
costly shutdowns.
The Salem and Millstone plants were under discussion by NRC for 3
to 4 years before they were placed on the Watch List in 1996 and 1997,
respectively. NRC discussed the Cooper facility as a problem plant but
never placed it on the Watch List, even though it was eventually shut
down for safety reasons. As of May 1997, when we did our analysis, 41
plants, or more than a third of the nation's nuclear power plants, had
been placed on the Watch List by NRC since 1986. Twenty-four plants had
been on the list for 2 or more years. However, about half of the plants
on the Watch List were known by NRC to be poor performers long before
being listed. Moreover, the Arthur Andersen report identified 10 plants
that were not placed on the Watch List but whose performance indicators
were similar to those that are listed.
This inconsistency has been attributed, in part, to the lack of
specific criteria for making decisions on a consistent basis, the
subjective nature of the process, and some NRC managers' confusion
about their role in the process. Industry and private interest groups
alike have criticized NRC for not having specific criteria with which
to decide when plants should be placed on the Watch List.
NRC acknowledges that it should do a better job of identifying
plants deserving attention for and listing on the Watch List. NRC is
developing a new process for assessing plants' performance. Among other
things, the new process would eliminate the Watch List, replacing it
with a process that would include a decision model or criteria so that,
according to NRC, its actions are predictable, informed regarding risk,
simple, nonredundant, and efficient. NRC expects to publish the
proposed process for comment early in August 1998, and hopes it will be
in place by 1999.
Challenges NRC Faces Regulating in an Evolving Environment
At the heart of safe operations is holding the licensees
accountable for fixing their plants' problems more promptly and
addressing management issues more directly. However, changing NRC's
culture will not be easy. The need to ensure that NRC's regulatory
program works as effectively as it can is extremely important,
particularly in light of mayor changes taking place in the nuclear
industry.
NRC officials are concerned that as the electric utility industry
is deregulated, safety margins may be compromised as licensees cut
costs to stay competitive. As an example, an independent auditor's
review of the Millstone plant in 1996 noted that the need to trim costs
in the face of future competition resulted in managers' choosing to
defer maintenance and allow backlogs of corrective actions to grow,
eventually creating a situation that led to a shutdown and several
hundred million dollars worth of repairs.
Several estimates have been made about the number of plants that
might no longer be economically competitive. A private research report
concluded that because competition will result in lower electricity
prices in the future, as many as 37 of the nation's nuclear sites are
vulnerable to shutdown because production costs are higher than the
projected electricity prices in the market.\4\ Together, these sites
represent over 40 percent of the U.S. nuclear generating capacity.
---------------------------------------------------------------------------
\4\Nuclear Power Plant Shutdowns and Implications for Future
Natural Gas Demand, Washington International Energy Group (Feb. 1997).
---------------------------------------------------------------------------
For those plants that will continue to operate, NRC reports that
the nuclear industry has matured to the point that plants have been in
operation long enough for aging to be a major issue that can affect
cost and safety. Aging, which affects all of a plant's systems and
components, can bring conditions causing safety concerns that, if not
appropriately addressed, could require licensees to shut down plants.
Already, two plants have formally requested a license extension and
others plan to operate beyond their original 40 year operating lives.
NRC is moving to ``risk-informed'' and ``performance based''
reactor regulation, which aims to focus regulatory resources on areas
of the highest safety significance and its regulatory framework more
results oriented. It is also making changes to the Senior Management
Meeting process. These changes illustrate an effort by the current
Chairman and Commissioners to improve NRC's ability to help ensure safe
operation of the nation's nuclear power industry as well as address
industry concerns regarding excessive regulation.
Questions that NRC will be facing include how safe is safe, what
will the future NRC regulatory approach be, and what level of resources
will be needed to regulate the Department of Energy's nuclear
facilities? Whatever NRC decides in answering such questions needs to
be anchored in goals and objectives that are clearly articulated and
performance measures that hold NRC managers as well as licensees
accountable. In addition, NRC needs reliable information on which to
determine safe operations, training for its staff, and an enforcement
structure that clearly lays out a range of sanctions that it will
impose on the basis of the potential seriousness of the safety problems
found.
A framework within which NRC can accomplish its missions has been
provided by the Government Performance and Results Act of 1993. The
Results Act requires Federal agencies to develop goals, objectives,
strategies, and performance measures in the form of strategic and
performance plans. In our review of NRC's first annual performance
plan, which covers the program activities set out in its fiscal year
1999 budget\5\, we noted that the plan could provide a clearer picture
of the intended performance across NRC and better discuss the
strategies and resources the agency will use to achieve its performance
goals. For example, nuclear reactor safety is a ``strategic arena'' in
NRC's strategic plan. While the plan lists specific strategies NRC will
use against licensees that fail to meet regulatory standards, including
halting operations if licensee performance falls below an acceptable
level\6\, NRC has not developed specific criteria for ``acceptable.''
Moreover, the performance plan does not provide confidence that the
agency's performance information will be credible. The development of
strategic and performance plans is a dynamic process. As the Congress
and NRC gain more experience in setting goals and measuring results,
better information will be available to evaluate progress towards
improving NRC performance.
---------------------------------------------------------------------------
\5\Results Act: NRC's Annual Performance Plan for Fiscal year 1999
(GAO/RCED-98-195R, May 27, 1998)
\6\Only once has NRC issued an order to shut down an operating
plant, at Peach Bottom, Penn. in 1987. On other occasions, NRC has
issued such orders only after the licensees had suspended operations.
---------------------------------------------------------------------------
Mr. Chairman and Members of the Subcommittee, this concludes our
statement. We would be pleased to respond to any questions you may
have.
______
Responses by Gary Jones to Additional Questions from Senator Lieberman
Question 1. The GAO has concluded that the competency of a nuclear
plant's management is perhaps the most critical factor in safety
performance. This conclusion makes basic common sense. What are the
views of Panel II members on this matter? How best can the GAO
recommendation be implemented, including by the NRC?
Response. We recognize that there are technical challenges posed by
assessing management factors as part of the NRC inspection process. To
assess management, professionals with the proper training and
experience would be needed, along with objective criteria for making
judgments. Arthur Andersen, a consulting firm hired by NRC to recommend
ways to improve how NRC conducts its plant safety assessments, noted
the importance of management, stating that ``To assess plant
performance proactively, the NRC needs to remain fully aware of plant
management activities.'' \1\ In their 1996 report to NRC, Arthur
Anderson recommended that NRC hire experts or train staff to evaluate
management performance and changes, which they viewed as necessary
steps to allow NRC to be more proactive. They also noted that by
evaluating management factors (and other factors as well), NRC would be
better positioned to identify problems earlier, which would in turn
reduce safety risks to the public and lead to an earlier and less
costly resolution of problems. We agree with Andersen's
recommendations.
---------------------------------------------------------------------------
\1\ Recommendations to Improve the Senior Management Meeting
Process, Arthur Andersen (Dec. 30, 1996).
---------------------------------------------------------------------------
However, in responding to our report (Nuclear Regulation:
Preventing Problem Plants Requires More Effective NRC Action (GAO/RCED-
97-145, May 30, 1997), NRC rejected our recommendation to include a
management assessment component as part of their ongoing plant
inspection process. While NRC agreed that licensees' management is
``instrumental'' in the licensee's operational safety performance, they
told us that they studied the matter and decided that a management
assessment would ``not likely result in a leading indicator of plant
performance. . . .'' NRC staff presented options for including a
management assessment component in their inspection process to the
Commission. The Commission also decided not to use licensee management
performance or competency as a leading indicator measure.
Question 2. You have expressed general agreement that the Watch
List process--by which the NRC is supposed to provide an early warning
about problem plants--is not working well. What specific changes would
you recommend to improve this process?
Response. The Watch List is an important outcome of NRC's Senior
Management Meeting (SMM). The SMM process was created in 1986 for the
purpose of providing NRC with an early warning on plants exhibiting
declining performance. SMM meetings, which are held twice every year,
include NRC's senior managers from headquarters and regional directors.
Data on plant performance are drawn from NRC's performance indicator
program and from inspection and audit reports so that senior managers
can take steps to prevent the problems at these plants from worsening.
A plant's inclusion on the Watch List can lead to more oversight by NRC
in the form of additional inspections, letters to licensees expressing
NRC's concern about declining performance, or other actions. Being on
the Watch List also brings significant public attention to the plant.
As we reported, the Watch List has not produced a consistent
inventory of plants with performance problems. The Millstone and Salem
plants exhibited clear performance declines long before NRC placed them
on the Watch List in 1996 and 1997, respectively. Salem was placed on
the Watch List after they were forced to shut down for safety problems.
Millstone was shut down several times before they were placed on the
Watch List. Thus, the Watch List actions were far too late to achieve
the objective of ``early identification of declining performance.''
Still other plants, such as Washington Nuclear Power II, had
performance indicators that were consistently worse than some plants on
the Watch List. In fact, Arthur Andersen identified 10 plants that were
not placed on the Watch List but whose performance indicators are
similar to the average of those on the Watch List.
We recommended that NRC inspection reports should fully document
for all plants the status of the licensees' actions to address
identified problems under NRC's corrective action requirements,
including timetables for the completion of corrective actions and how
NRC will respond to nonconformance with planned actions.
We also recommended that NRC should make licensees' responsiveness
to identified problems a major feature of the information provided to
the participants of the Senior Management Meetings, including how NRC
will respond if problems go uncorrected. For example, NRC should
describe the range of sanctions that it will impose on the licensees on
the basis of the potential seriousness of their failure to resolve
problems within a predetermined time. These sanctions should range from
assessing fines to involuntary shutdown of the plant.
Arthur Andersen reported findings that parallel our observations,
noting that many procedural problems prevent the process from working
as intended. These problems include a lack of rigor and discipline in
the process; unclear criteria for placing plants on the Watch List; and
the confusion among some NRC managers about their role in the process.
Also noted was the highly subjective nature of the process.
NRC agreed with us and told us it is taking steps to improve its
performance indicators to allow more timely regulatory responses.
However, the effectiveness of these steps remains to be seen. An
equally important consideration is how NRC will react to plants with
declining safety performance, once they are identified. This is where
we found significant problems at the plants we examined. NRC allowed
these plants to deteriorate before taking strong action. In some cases,
NRC imposed fines years after the licensee was found deficient.
NRC agrees it should have been more vigilant in cases where plants
were found to be in a declining safety condition, but continues to
believe they have the authority and tools to hold licensees
accountable. We continue to believe our recommendations are needed to
ensure that NRC meets its basic responsibility to protect the safety
and health of the public.
______
Responses by Gary Jones to Additional Questions from Senator Inhofe
Question 1. Ms. Jones written testimony states ``. . . we [GAO]
recommend that NRC assess management competency and performance as part
of its inspection process.''
What NRC regulation would the NRC be implementing by assessing
license management competency?
What other Federal health and safety agencies assess the management
competency of the regulated industry?
What criteria are used by other Federal health and safety agencies
to assess management competency?
Response. The NRC has well established regulations pertaining to
the inspection of commercial nuclear power plants in support of its
statutory responsibility to ``provide adequate protection to the health
and safety of the public.'' We believe that plant inspections should
encompass the important conditions that impact plant safety, so that
licensees and NRC managers can take actions when appropriate. Because
both the NRC and the nuclear industry agree that management performance
is ``instrumental'' to safe operations, factors relating to management
effectiveness would help make the plant inspection process more
effective. In their report to the NRC, Arthur Andersen reported that
the NRC needs to be more proactive, and recommended that instead of
evaluating the leadership and operational causes of past events, the
NRC should evaluate ``economic, management and operational factors in
order to prevent future events.''
At one time, NRC did include a management performance component as
part of their inspection program. And Arthur Andersen has suggested a
way in which NRC can include a management assessment component in their
existing inspection process.
NRC collects from licensees substantial information on the safety
operations of nuclear plants. From these data, NRC tells us they
``infer'' management performance. Indeed, NRC makes substantial public
comments about the competency of nuclear plant licensee management,
often concluding that management problems are the main reason for
declining performance. For example, NRC's audits made many references
to management's performance in the Commission's reviews of why
conditions deteriorated at Cooper, including a ``poor management safety
culture,'' ``weak management oversight of engineering programs,'' a
``fragmented approach'' to problem resolution, and failure to provide
an ``adequate level of oversight.'' \2\ At Salem, NRC's audit reports
also cited the licensee's management as a cause of safety problems.
---------------------------------------------------------------------------
\2\ Supplemental Plant Performance Review, NRC (95-04, Oct. 3,
1995).
---------------------------------------------------------------------------
Additionally, the NRC Chairman stated that the ``. . . . recent
events at Maine Yankee . . . resulted in a failure to indentify and
promptly correct problems arising in areas that management viewed, not
always correctly, as having low safety significance.'' \3\ NRC senior
managers have also stated that the principal reasons for the safety
performance problems found at the LaSalle and Zion nuclear plants in
minois were weak management processes and a lack of management
involvement.
---------------------------------------------------------------------------
\3\ Remarks by NRC Chairman Shirley Jackson, November 7, 1996.
---------------------------------------------------------------------------
Since NRC does not hesitate to draw conclusions about management
competency after the fact, we believe that such observations could also
be made during the inspection process, which is the most opportune
point at which potential safety related causes can be addressed. Acting
on performance problems by addressing their causes before conditions
worsen is the key to keeping the industry safe. Preventing problem
plants from worsening also avoids the enormous costs associated with
poor performing plants.
Regarding the experience in other regulatory agencies, we focused
our review on how NRC meets its responsibilities to help ensure safe
operation of the nations' commercial nuclear plants. We used as
criteria the statutes NRC operates under and the regulations it
promulgates to implement those statutes. As a result, we did not
compare NRC to other agencies.
Question 2. The GAO report entitled, ``Preventing Problem Plants
Requires More Effective NRC Action,'' (GAO/RCED-97-145, at 17) states:
``Both industry and NRC officials have advised us that management
competency is considered the licensee's responsibility and that NRC
lacks the skills and experience to properly assess management.''
What Federal health and safety agency has employees who are
currently trained to perform management competency assessments of the
industry the agency regulates?
Specifically, what training have those employees received to
qualify them to assess management competency of the industry the agency
regulates?
Response. Because our focus was how the NRC meets is safety
responsibilities, we did not examine how other agencies regulate. We do
recognize the technical challenges posed by assessing management
factors. To assess management, professionals with the proper training
and experience would be needed, along with objective criteria for
making judgments. We also believe that gauging management factors is
critical to the goal of the early identification of the problems in
nuclear plants.
Question 3. If the NRC was to make a negative determination
regarding management competency (on a basis other than educational and
technical qualification), can the NRC require the licensee to remove
the employee from NRC licensed activity or in any way change the
employee's employment status?
If the NRC makes a negative determination regarding management
competency (on a basis other than educational and technical
qualification) and requires the licensee to remove the employee from
NRC licensed activity or to in any way change the employee's employment
status, shouldn't the NRC also be responsible for defending the
licensee in a wrongful termination or other employment-based suit
brought by the employee?
Response. The NRC has established procedures for ensuring that
licensees address deficiencies cited in inspection reports. The finding
of a management deficiency, if it were part of an inspection finding,
would likely be treated like any other finding. The action required
would depend on the safety significance of the finding, and how the
licensee plans to respond. We are not aware of the NRC ordering
licensees to change their management, even in those cases where they
have publically announced that management deficiencies were the cause
of safety problems.
Question 4. Ms. Jones written testimony states: ``. . . we continue
to believe that evaluating licensees' management competency as part of
plant inspection[s] would provide a[n] important early warning of
potentially unsafe practices.''
What management competency evaluative assessment criteria have been
proven to be dispositive leading indicators providing an early warning
of potentially unsafe practices?
Response. NRC would have to decide on the management competency
components that would be crucial in assessing a plant's safety
performance. Such a definition would not necessarily be limited to
technical managerial skills, but rather would likely include factors
that define how a safe plant should be operated. These could include
factors such as how well a plant management fosters a proper plant
safety culture, provides oversight, enhances communications, as well as
other factors that inspectors may already be examining.
NRC and its onsite inspectors have vast experience examining the
causes of declining safety performance. We believe it would be valuable
if they documented all factors that directly impact the safety
performance of nuclear plants.
__________
Statement of David Lochbaum, Union of Concerned Scientists
Good morning. I appreciate this opportunity to testify before the
Subcommittee regarding this important topic. The industry
representatives on this panel are justifiably proud of nuclear power's
record over the past decade. Indeed, they paint a very rosy picture and
argue that the industry's healthy performance warrants redirected NRC
oversight effort. My objective is to caution you to watch out for the
thorns as you enjoy the roses.
The industry sometimes touts its record in ways which imply that it
was achieved in spite of the NRC. That's not accurate. The industry's
performance over the past 10 years benefited from NRC initiatives, such
as the Maintenance Rule and its need for plant-specific risk
assessments, and also from the NRC's support for industry initiatives,
such as cost-beneficial licensing actions.
The industry cites data such as higher plant capacity factors,
fewer plant trips, and fewer safety system actuations as evidence of
healthy performance. This information is valid, but it does not provide
the complete picture. At this moment, nine US nuclear plants languish
in protracted shut downs. These plants are not shut down because the
NRC issued them too many uncited and Level IV violations or because the
NRC is dragging its feet on risk-informed regulation. No, these plants
are shut down because their owners failed to properly discharge their
record-keeping of the how, what, when, and why information for
emergency equipment, also known as design control and configuration
management.
In the mid- and late-1980's, NRC inspections at several plants
revealed that their owners had made physical changes to emergency
equipment to solve one problem, only to cause other problems. These
errors occurred because these owners had not fully understood or had
lost track of the design bases for the emergency equipment. The NRC
proposed a new rule that would have required all plant owners to fully
document the design bases for emergency equipment and to re-create any
information that was missing. The industry opposed this rule and
convinced the NRC that they could handle the problem internally. So,
the NRC dropped its plans for the rule.
The industry was wrong. Millstone and its fall-out have clearly
demonstrated that some nuclear plants operated with vital safety
systems that would not or may not have functioned had there been an
accident. For example, owners of the Big Rock Point plant in Michigan
reported 2 weeks ago that one of its safety systems would not have
functioned during the 13 years before the plant closed last August. An
NRC team discovered in 1996 that the piping for safety systems at the
Haddam Neck plant in Connecticut was too small to assure adequate
cooling of the reactor core during that plant's entire 28-year
operating lifetime. The nine plants shut down today are fixing design
control problems like these.
We should not be operating nuclear power plants unless we know with
reasonable certainty that their systems needed to protect the public
during an accident will work. There have been an alarming number of
reports in recent years which clearly show that several plants have
operated without fully functional safety systems. In cases like Maine
Yankee, Donald C. Cook, Beaver Valley, Millstone, and Big Rock Point,
the public was protected by luck as much as by defense-in-depth.
The industry wants to push the NRC more rapidly towards risk-
informed regulation. The development of plant-specific risk assessments
this past decade has provided valuable insights which prompted many
plant owners to voluntarily make physical changes to their facilities
that increased safety margins. Unfortunately, these risk assessments
assume that the plants have no design control and configuration
management problems. For some plants, this is not a valid assumption.
Thus, their risk assessments are inaccurate and non-conservative.
Design control and configuration management problems must be corrected
at all nuclear plants before risk-informed regulation can advance.
The industry cites examples of NRC over-regulation, but there are
examples of under-regulation as well. Both sets of these examples are
probably valid because the NRC regulates subjectively and
inconsistently. In a report entitled The Good, The Bad, and The Ugly
which we issued last month, we documented a wide gap in safety
performance in our ten-plant ``focus group.'' This discernible
difference is due to the NRC's subjectivity. Instead, the NRC must
develop objective standards which it consistently enforces, especially
when it comes to decisions about whether problem plants should be shut
down or restarted. It is a daunting challenge, but it can be done.
Commissioner McGaffigan pointed out during a recent stakeholders'
meeting that the NRC does a good job on matters in its spotlight. We
would agree with that contention, although we feel that the NRC needs a
larger floodlight. This little penlight job just isn't going to allow
the NRC to handle the important items on its plate in a timely manner.
The NRC could do a better job if it developed, and used, good
procedures. Procedures are like the conveyor belt in a factory they
move products from station to station until the work is completed. Good
procedures are like a strong, wide conveyor belt because they handle
most of the work items. Bad procedures are like a thin, unreliable
conveyor belt because too many items must be hand-carried through the
process. The NRC really needs to have and follow better procedures.
I must comment briefly on the industry complaint about the service
it gets from the NRC. In recent years, a top NRC priority has been its
review and certification of advanced reactor designs. To our knowledge,
a line of potential buyers for advanced reactors is not forming
anywhere in the country. However, there seems to be a market for these
things overseas. We do not oppose efforts to improve US trade. It is
simply incomprehensible to us that nuclear safety issues such as fire
barriers that are combustible linger while the certification of
advanced reactor designs gets fast-tracked through the NRC. The
industry is getting very good service from the NRC, compared to that
afforded public health and safety.
In closing, I want to again thank the Subcommittee for providing us
this opportunity to share our views with you. I would also like to
respectfully suggest that in addition to having the NRC Commissioners
point to where they are headed, that you formally ask them to provide
you with their roadmap showing how they intend to reach that
destination. Reviewing their action plan for achieving their promised
improvements might make it easier for you to monitor their progress
along the way. Thank you very much.
index for documents submitted to supplement oral testimony
Millstone Unit 3
UCS Letter to NRC Regional Administrator, January 6, 1998
Key Point: Millstone Units 1, 2 & 3, Salem Units 1 & 2, and Maine
Yankee began 1997 shut down while safety problems are repaired. Does
the NRC consider the safety margins at these plants to be adequate? If
yes, why must they be shut down for so long? If not, why were they
operating for so long with these problems?
Donald C. Cook Units 1&2
UCS Petition, October 9, 1997 (without its attachments)
Key Point: An NRC inspection team looked at two (2) safety systems
and found problems which prompted an immediate shut down of both units.
UCS examined the record and discovered that the plant's owners had
recently reviewed both of these systems and found no serious problems.
Since the owner's review process was clearly flawed, what assurance is
there that the other 60-plus safety systems do not have problems like
those identified by NRC?
UCS Petition Supplement, January 12, 1998
Key Point: The restart of D C Cook (then pending) is premature
because several safety questions have not been answered.
NRC Oversight
UCS Letter to Senate Appropriations Committee, June 24, 1998
(without its attachments)
Key Point: NRC may be guilty of over-regulation at times, but it is
also guilty of under-regulation. The reason is the same the NRC lacks
objective criteria when it evaluates licensee performance.
UCS Handout at NRC Commissioners Meeting with Stakeholders, July
17, 1998
Key Point: NRC requires its licensees to meet high management
standards, yet it frequently fails to meet these same standards. If the
NRC met these same standards, many of its problems would disappear.
UCS Letter to NRC Commissioners, July 20, 1998
Key Point: The industry's push for risk-informed regulation must be
countered by the ample evidence that many nuclear plants have operated
well outside the bounds of their recent risk assessments. Thus, NRC
cannot rely on risk assessments which are mathematically correct but
which do not reflect reality.
January 6, 1997
Hubert J. Miller
Regional Administrator, Region I
United States Nuclear Regulatory Commission
475 Allendale Road
King of Prussia, PA 19406-1415
Subject: Reactor Safety Questions
Dear Mr. Miller: Region I entered 1997 with seven nuclear units
shut down due to reactor safety concerns: the three Millstone units,
the two Salem units, and Maine Yankee. R. G. Brown & Associates, Inc.,
a financial consulting firm hired by the State of Connecticut's
Department of Utility Control, recently concluded that Northeast
Utilities ``lost focus on the safe operation'' of Millstone and placed
``primary importance on financial issues.'' In 1988, the Nuclear
Business Unit at Public Service Electric & Gas revised its mission
statement for the Salem and Hope Creek plants from ``World Class by
1995'' to one placing greater emphasis on economic performance.
Consequently, the Salem and Hope Creek plants experienced significant
regulatory and performance difficulties by 1995. More recently, the NRC
found that Maine Yankee's problems were caused by that utility's
economic pressures. Clearly, economics played a significant role in the
poor safety performance at these troubled nuclear plants.
In order to better understand the NRC's criteria for assessing
reactor safety, please address the following question:
(1) Does the NRC consider the three Millstone units, the two Salem
units, and Maine Yankee safe enough to allow these plants to restart
today?
Depending on the answer to the question above, please address the
applicable following question:
(2) If these plants are not safe enough to operate today, does the
NRC think that these plants were operating safely in the days and weeks
prior to their being shut down?
If the safety margins at these plants are not sufficient to allow
them to restart, it seems evident that these plants operated with
inadequate safety margins prior to being closed. This determination
would raise serious doubts about the NRC's ability to protect public
health and safety following restart of these troubled plants as well as
during operation of other seemingly untroubled plants.
(3) If these plants are safe enough to operate today, does the NRC
have the right to conduct additional inspections and impose additional
requirements for these troubled plants that prolong the duration, and
significantly increase the costs, of their outages?
If these plants had adequate safety margins prior to being closed
and those safety margins have not been eroded while the plants have
been idled, it seems evident that the NRC may be unduly harming the
communities around these plants (as well as the ratepayers and
stockholders of these utilities) by taking actions that prolong the
outages and further weaken the economic viability of these plants. If
these plants are safe enough to operate today, it seems obvious that
their generating revenues would only enhance the ability of these
utilities to maintain the necessary safety margins.
I respectfully request your response to these questions prior to
the restart of any unit at Millstone, Salem, and Maine Yankee.
Sincerely,
David A. Lochbaum,
Nuclear Safety Engineer
______
Union of Concerned Scientists
Washington, DC 20548 October 9, 1997.
L. Joseph Callan,
Executive Director for Operations,
Nuclear Regulatory Commission,
Washington, DC 20555-0001
Subject: Petition Pursuant to 10 CFR 2.206, Donald C. Cook Nuclear
Plants Units 1 AND 2, Docket Nos. 50-315 and 50-316
Dear Mr. Callan: The Union of Concerned Scientists submits this
petition pursuant to 10 CFR 2.206 requesting that the operating
licenses for Donald C. Cook Units 1 and 2 be modified, revoked, or
suspended until there is reasonable assurance that their systems are in
conformance with design and licensing bases requirements. A process
comparable to the system certifications recently used by the Salem and
Millstone licensees would provide this necessary level of assurance.
UCS additionally requests that a public hearing into this matter be
held in the Washington, DC area prior to the first unit at D C Cook
being authorized to restart. At this hearing, we will present
information supporting the contentions in this petition.
Background
On October 9, 1996, the NRC requested that its power reactor
licensees provide information pursuant to 10 CFR 50.54(f) regarding the
adequacy and availability of design bases information. The NRC's issued
this request as a result of its investigations at the Millstone Power
Station. The licensee for the D C Cook plant responded with a letter
dated February 6, 1997, describing the administrative controls it uses
to provide assurance that the Cook Nuclear Plant is operated and
maintained within the established design bases.
An NRC team recently conducted an architect/engineer design
inspection at D C Cook. According to the NRC's Project Manager for D C
Cook, this NRC team examined two safety systems and their supporting
systems. The team's findings forced the licensee to shut down both
units on September 10, 1997.
The NRC issued a confirmatory action letter to the licensee dated
September 19, 1997, specifying issues arising from the design
inspection that must be resolved prior to restarting the units. These
issues (listed in Attachment 1) include physical modifications to the
plants and revisions to the plants' operating licenses. Numerous NRC
Daily Event Reports (listed in Attachment 2) described the findings
from design inspection as reported by the licensee. The NRC has not yet
released the design inspection report and we have been told that it
will not be issued until next week at the earliest.
Basis for Requested Action
The NRC conducted architect/engineer design inspections at only six
of its nearly 70 operating power reactor licensee sites. These design
inspections examined only one or two safety systems along with their
supporting systems at each site. The NRC Project Manager reported that
the design inspection at D C Cook examined the residual heat removal
and component cooling water systems along with their supporting
systems. These design inspections focused on the facilities' original
design and the licensees' conformance with the safety analysis reports.
The systems examined by the NRC at D C Cook had already been
covered by the licensee's design basis documentation reconstitution
program. Design basis documents (DBDs) for the containment, containment
structure, containment spray, emergency core cooling, component cooling
water, and residual heat removal systems had been approved by the
licensee prior to the NRC team's arrival. The licensee informed the NRC
that its DBD program had not identified any deficiencies involving
equipment operability.
The findings by the NRC design inspection team prompted the
licensee to declare both trains of the emergency core cooling systems
and the containment spray system inoperable. The units were shut down
on September 8 and 9, 1997. The licensee reported making physical
changes to the plant to correct some of the problems and indicated that
additional physical changes may be required.
The licensee has proposed fixing the specific operability issues
identified during the NRC design inspection and then restarting the
units. Confining the scope of the restart activities in this way would
be treating the symptoms rather than the cause of the problems. The NRC
design inspection revealed serious deficiencies in the licensee's
design control programs. These deficiencies created the specific
problems that forced the plants to be shut down. These deficiencies may
also be responsible for similar problems in other safety systems which
were not examined by the NRC.
It is important to note that the NRC identified significant
operability problems in systems that the licensee had covered in
recently approved DBDs. The licensee stated in its February 6, 1997,
submittal that it verifies and validates the information in its DBDs
via reviews and physical plant walkdowns prior to their approval. Thus,
the NRC discovered significant problems in systems which had been
closely scrutinized by the licensee. Had the NRC's findings involved
systems which have not yet been covered under the licensees' DBD
program, it might be reasonable to assume that the licensee would have
identified them at that later date. However, there is little reason to
believe that these problems would have been resolved unless the NRC had
identified them.
Attachment 2 lists NRC Daily Event Reports (DERs) involving issues
identified by the NRC design inspection at D C Cook. DER Nos. 32740,
32806, 32822, 32839, 32843, 32875, 32890, 32904, 32914, 32915, 32921,
32948, and 32988 describe potential deficiencies that appear to have
existed at D C Cook prior to the initiation of its design basis
documentation reconstitution effort in 1992. That effort was therefore
apparently unable to detect these potential deficiencies. DER Nos.
32823, 32824, 32903, 32939, and 32948 describe potential deficiencies
that appear to have been introduced since 1992. Thus, the licensee's
design control and quality assurance programs are apparently unable to
ensure that the facility is maintained within its design bases.
UCS feels that the design basis documentation reconstitution and
Updated Final Safety Analysis Report (UFSAR) validation programs as
described in the licensee's response to the NRC's 50.54(f) letter lack
the rigor and focus necessary to identify potential design-related
operability issues. Our conviction is supported by the findings from
the NRC design inspection. Since the corrections to the NRC's findings
were not limited to mere paperwork fixes but included actual changes to
the plant's physical configuration, the safety significance of these
and potentially other undetected problems cannot be understated.
The flaws in the licensee's design control programs must be
corrected. The systems at D C Cook, at least those with a safety
function, must be certified to be capable of performing their required
actions under all design conditions. Then, and only then, can the units
be restarted with reasonable assurance that public safety will be
adequately protected. It would be irresponsible to restart these units
knowing that the programmatic failures that caused the safety problems
identified by the NRC team may have produced comparable problems
affecting the operability of other safety systems.
The legal precedent for our position is stated by the NRC's Atomic
Safety and Licensing Appeal Board in the Matter of Vermont Yankee
Nuclear Power Corporation , Memorandum and Order (ALAB-138), dated July
31, 1973:
``As a general rule, the Commission's regulations preclude a
challenge to applicable regulations in an individual licensing
proceeding. 10 CFR 2.758. This rule has been frequently applied in
such proceedings to preclude challenges by intervenors to
Commission regulations. Generally, then, an intervenor cannot
validly argue on safety grounds that a reactor which meets
applicable standards should not be licensed. By the same token,
neither the applicant nor the staff should be permitted to
challenge applicable regulations, either directly or indirectly.
Thus, those parties should not generally be permitted to seek or
justify the licensing of a reactor which does not comply with
applicable standards. Nor can they avoid compliance by arguing
that, although an applicable regulation is not met, the public
health and safety will still be protected. For, once a regulation
is adopted, the standards it embodies represent the Commission's
definition of what is required to protect the public health and
safety.'' [emphasis added]
``In short, in order for a facility to be licensed to operate, the
applicant must establish that the facility complies with all
applicable regulations. If the facility does not comply, or if
there has been no showing that it does comply, it may not be
licensed.'' [emphasis added]
The NRC design inspection at D C Cook identified significant issues
which caused both units to be shut down. These issues were caused by
programmatic deficiencies in the licensee's design control programs. A
contributing factor for these issues is the failure of the licensee's
quality assurance and self-assessment programs to detect these
problems. Nothing in the reported findings from the design inspection
supports a conclusion that these findings are isolated consequences.
The NRC's design inspection invalidates any showing that this facility
complies with all applicable regulations. Therefore, the design control
deficiencies must be corrected to prevent future non-compliances with
safety regulations. And just as importantly, a thorough review of all
systems with safety functions must be completed prior to restart to
detect and correct past non-compliances.
UCS is not advocating that the NRC apply a higher standard at D C
Cook. Instead, we are requesting that the NRC ensure that the D C Cook
facility is in accordance with the minimum safety standards which
constitute the legal grounds for allowing the units to operate. Our
request is consistent with the measures required by the NRC when other
sampling inspections find problems. We ask the NRC to expand the
inspection scope based upon the identified problems just as would be
required when snubber (e.g., pipe restraint) and reactor vessel
internals inspections found problems.
Requested Actions
UCS petitions the NRC to protect public health and safety by
preventing the units at D C Cook from operating until such time that
there is reasonable assurance that all significant non-compliances have
been identified and corrected. The system certification process
recently used at the Salem Generating Station and the Millstone Power
Station would provide such reasonable assurance. We request a public
hearing on this matter be held in the Washington, DC area before any
unit at D C Cook is authorized to restart.
Sincerely,
David A. Lochbaum,
Nuclear Safety Engineer.
attachments:
1) Design Inspection Issues That Will Be Resolved Prior to D C Cook
Restart
2) NRC Daily Event Reports on D C Cook Design Inspection Findings
Attachment 1
Design Inspection Issues That Will Be Resolved Prior to DC Cook
Restart
The following issues, quoted verbatim, were specified on the NRC's
Confirmatory Action Letter dated September 19, 1997, as requiring
resolution prior to restart of any D C Cook unit:
1. Recirculation Sump Inventory/Containment Dead Ended Compartments
Issue
Analyses will be performed to demonstrate that the recirculation
sump level is adequate to preventvortexing, or appropriate
modifications will be made. [See also Attachment 2--Power Reactor Event
Number 32890]
2. Recirculation Sump Venting Issue
Venting will be re-installed in the recirculation sump cover. The
design will incorporate foreign material exclusion requirements for the
sump. [See also Attachment 2 Power Reactor Event Numbers 32875 and
32903]
3. Thirty-six Hour Cooldown, with One Train of Cooling
Analyses will be performed that will demonstrate the capability to
cool down the units consistent with design basis requirements and
necessary changes to procedures will be completed.
4. ES-1.3 (Switchover to Recirculation Sump) Procedure
Changes to the emergency procedure used for switchover of the
emergency core cooling and containment spray pumps to the recirculation
sump will be implemented. These changes will provide assurance there
will be adequate sump volume, with proper consideration of instrument
bias and single failure criteria. [See also Att. 2 Power Reactor Event
Numbers 32806 and 32904]
5. Compressed Air Overpressure Issue
Overpressure protection will be provided downstream of the 20 psig,
50 psig, and 85 psig control air regulators to mitigate the effects of
a postulated failed regulator. [See also Attachment 2 Power Reactor
Event Numbers 32939 and 32988]
6. Residual Heat Removal (RHR) Suction Valve Interlock Issue
A technical specification change to allow operation in mode 4 with
the RHR suction valves open and power removed is being processed.
Approval of this change by the NRC will be required prior to restart.
[See also Attachment 2 Power Reactor Event Numbers 32914 and 32921]
7. Fibrous Material in Containment
Removal of fibrous material from containment that could clog the
recirculation sump will be completed. [See also Attachment 2 Power
Reactor Event Number 32948]
Attachment 2
NRC Daily Event Reports on D C Cook Design Inspection Findings
The following summaries were taken from the daily event reports
available on the NRC's website (www.nrc.gov). The only editing involved
deletion of unnecessary detail, such as who was notified about the
events, and the addition of clarification for acronyms. Otherwise,
these narratives are verbatim.
power reactor event number: 32890 unusual event declared & technical
specification required shutdown on both units due to inoperable
containments
As a result of issues raised during the ongoing architect/engineer
design inspection, the licensee was reviewing the design aspects of the
containments (both units have similar containments). After consulting
with the nuclear steam supply system supplier (Westinghouse) the
licensee determined that concerns existed about whether adequate
communication (flow paths) exists between the active and inactive
portions of the containment sump.
During certain scenarios, the volume of water flow back to the
containment recirculation sump may not be adequate to support long-term
emergency core cooling (ECC) systems (RHR [residual heat removal]
system, safety injection system, charging system) or containment spray
pump operation during the recirculation phase of a large or small break
LOCA. The containment drainage system is designed to ensure that water
entering the containment from the breach in the reactor coolant system,
ECC systems injection, and ice condenser melt flows back into the
containment recirculation sump via drains. Licensee analysis was unable
to confirm that sufficient communication existed between inactive and
active volumes of the containment to ensure adequate drainage to the
recirculation sump. Without adequate drainage into the sump, a low sump
level will result, which jeopardizes long term operation of the ECC
Systems and containment spray pumps due to vortexing and air
entrainment.
As a conservative measure because of these concerns, the licensee
declared both trains of the ECC Systems and the containment spray
system inoperable for both units and entered Technical Specification
limiting condition for operation action statement 3.0.3 to shut down
both units. The licensee commenced shutting Unit 1 down from 100
percent power at 1655 and Unit 2 down from 100 percent power at 1728.
At 2000, the licensee declared an unusual event on both units due to
the potential loss of containment barrier on both units.
The licensee plans to perform further analysis to determine the
extent of the existing communication between the portions of the sumps
and whether plant modifications will be necessary.
The unusual event was terminated and exited at 0303 EDT when Unit 1
entered mode 5 (cold shutdown). Unit 2 entered mode 5 at 0015 EDT (cold
shutdown).
power reactor event number: 32875
failure to maintain the containment recirculation sump \1/4\"
particulate retention requirement (historical issue)
A \1/4\" particulate retention requirement for the containment
recirculation sump was not properly established in 1979 following sump
modifications. The containment recirculation sump requirement to retain
\1/4\" particles is to ensure that containment spray nozzles do not
become plugged. The containment spray system takes suction from the
containment recirculation sump following injection of the refueling
water storage tank supply during a loss of coolant accident.
In 1979, modifications were performed on the containment
recirculation sump. One of the modifications involved moving a \1/4\"
retention element from inside the recirculation sump to the entrance of
the sump. When the retention element was moved, the \1/4\" retention
requirement was not fully addressed, and pathways exceeding the \1/4\"
requirement were inadvertently established. The inadvertent pathways
established included: \3/4\" vents in the roof of the recirculation
sump entrance, the containment sump drain line from the recirculation
sump, and small gaps around the sump entrance. These pathways have
since been eliminated or the \1/4\" requirement has been established.
The licensee is reporting the fact that since 1979 until the \1/4\"
requirement was established or the pathway was eliminated, the
containment recirculation sump did not meet its design requirement.
The containment recirculation sump currently meets the \1/4\"
requirement. A condition report has been written to initiate
investigation into this event and determine appropriate preventive
actions.
This event was determined to be reportable at 0856 on September 5,
1997.
*** Update at 1905 on 09/10/97 by Randy Ptacek entered by Jolliffe
***
After further review of the above condition, the licensee concluded
that the emergency core cooling (ECC) system was outside its design
basis as a result of the \1/4\" requirement not being met following the
1979 plant modifications. By not adequately covering the \1/4\"
particulate retention requirement, larger particles had the potential
to enter the recirculation sump. The ECC System has not been analyzed
for these larger particles nor is it within the design of the ECC
System to handle these larger particles.
The licensee has concluded that this event is also reportable to
the NRC in accordance with the requirements of 10 CFR
50.72(b)(1)(ii)(a) unanalyzed condition, and 10CF50.72(b)(2)(iii)(d)
accident mitigation.
power reactor event number: 32903
containment recirculation sump vent holes have been filled with
concrete
As a result of questions posed by the NRC architect/engineer design
inspection team, the licensee determined that the inlet venting
requirement for the containment recirculation sumps was not properly
maintained following modifications to the Unit 2 sump in 1996 and the
Unit 1 sump in 1997 (both units have similar containments).
The containment recirculation sump venting requirement was
established in 1979 as part of the original sump design to reduce the
potential for air entrainment through the sump. The venting requirement
was met through the addition of 5\3/4\-inch diameter holes drilled in
the roof of the sump inlet. (The holes did not meet the \1/4\-inch
diameter requirement as reported in Event #32875.) When these holes
were discovered during the Unit 2 1996 refueling outage and the Unit 1
1997 refueling outage, they were classified as abandoned equipment
holes that exceeded the \1/4\-inch particulate retention requirement
for the sumps and they were filled with concrete.
power reactor event number: 32806
instrumentation indications used to determine when refueling water
storage tank to containment switchover is required may not have been
correct to prevent vortexing in the containment recirculation sump.
During the evaluation of a proposed procedure change that affects
switchover from the refueling water storage tank (RWST) to the
containment sump during a loss-of-coolant accident (LOCA), it was
determined that the instrumentation indications used to determine when
the switchover is required may not have been correct to prevent
vortexing in the containment recirculation sump.
To address this situation, procedures associated with the
switchover (on both units) have been conservatively changed to
accommodate the related instrument inaccuracies. These changes assure
adequate RWST water is in containment before switchover to eliminate
concerns that vortexing would occur in the containment sump after
switchover.
The problem is that the RWST water level indicators are connected
to the suction line that goes to the residual heat removal (RHR) pumps.
Due to the flow in these lines, the indicated water level at which the
switchover would be initiated would be less than the actual water level
of the RWST (the licensee would be putting less water into the
containment than expected). Also, the licensee said that they had some
inaccuracies associated with their containment sump instrumentation.
The licensee adjusted the containment sump indication to assure that
they have an adequate volume in the containment to prevent vortexing.
The licensee relies upon two indications for switchover; RWST water
level and containment water level.
power reactor event number: 32904
single failure during recirc sump switchover could be unanalyzed
condition
As a result of questions posed by the NRC architect/engineer design
inspection team, the licensee determined that the possibility of a
single failure during an accident while performing switchover of the
emergency core oling system pumps from the refueling water storage tank
(RWST) suction to the recirculation sump suction could have resulted in
the plant being in an unanalyzed condition. This condition is outside
the plant design basis, and it potentially could have prevented the
fulfillment of a safety function of structures or systems.
The plant emergency operating procedures (EOPs) as currently
written require that the west residual heat removal (RHR) pump be the
first pump switched from the RWST suction to the recirc sump suction.
Once this is accomplished, the centrifugal charging (CC) pumps'
suctions and the safety injection (SI) pumps' suctions are then swapped
from the RWST supply to the discharge of the west RHR pump. If the west
RHR pump were to fail at this point when all CC and SI pumps were being
supplied from its discharge, prior to the east RHR pump suction being
transferred from the RWST to the recirc sump, all CC and SI pumps could
also fail due to the loss of suction flow. This would result in the
loss of all high and medium head injection with only the flow from the
east RHR pump available for injection into the reactor coolant system.
The licensee is currently reviewing the EOPs to determine an alternate
switchover sequence that would eliminate the condition as described
above.
power reactor event number: 32939
installed plant modification introduced the possibility of a single
failure which could result in the loss of both trains of the esf
ventilation system.
At 1620 on 09/16/97, the licensee determined that a plant
modification installed between December 1996 and August 1997 introduced
the possibility of a single failure which could result in the loss of
both trains of the engineered safety features (ESF) ventilation system
if the 85-psi air header was to be lost. Prior to the installation of
the plant modification, the ESF ventilation system charcoal inlet and
bypass dampers both utilized a 20-psi air header and were positioned
such that the charcoal bypass dampers were normally open and would fail
closed; and the charcoal inlet dampers were normally closed and would
fail open. The plant modification installed new bypass dampers which
required higher air pressure to operate and were, therefore,
transferred to the 85-psi header. If the 85-psi air header was lost, it
would result in the repositioning of the normally open bypass dampers
without the opening of the charcoal inlet dampers on both trains. This
would result in dead heading of the filter train fans and loss of
cooling to emergency core cooling system (ECCS) equipment.
power reactor event number: 32988
non-safety related air headers lack overpressure protection
During an architectural engineering inspection a question was
raised regarding the lack of overpressure protection on the 20, 50 and
85 psig control air headers. The specific concern is the potential for
common mode failure of both trains of safety related equipment served
by the air headers. The overpressure condition is postulated to be
caused by regulator failure.
Although system reviews have found no component failure mode which
would result in the devices being incapable of going to their fail-safe
position, a design change package has been prepared to provide
overpressure protection on the 20, 50 and 85 psig headers.
power reactor event number: 32914
licensee identified that both units had operated their rhr system
contrary to the description in the fsar.
At 1615 EDT, with Units 1 and 2 shutdown in mode 5, it was
determined that both units have operated contrary to the design basis
for the residual heat removal (RHR) system as described in the Final
Safety Analysis report (FSAR). FSAR Chapter 9, Section 9.3, describes
the interlocks associated with the residual heat removal (RHR) suction
valves from the reactor coolant system (RCS). The suction line valves
are interlocked through separate channels of the RCS system pressure
signals to provide automatic closure of both valves whenever RCS
pressure exceeds RHR design pressure. The FSAR states that the
interlock may be defeated when the RCS is open to atmosphere. However,
for a number of years this interlock has been procedurally defeated on
both units to prevent inadvertent closure and loss of RHR suction
during shutdown cooling operation by opening the valves and racking out
their breakers in mode 4.
The overpressure protection afforded by the automatic closure
function described in the FSAR was defeated without a safety evaluation
being performed. This loss of automatic closure function represents an
unanalyzed condition and is, therefore, reportable.
Plans are to degas, depressurize, and open the RCS on both units to
atmosphere. Degas will start on Unit 1, and when completed, the unit
will proceed to depressurize while Unit 2 starts degas procedures. When
the RCS is open to atmosphere on both units, the plant will be in
compliance with the FSAR.
This condition was identified by the licensee during an ongoing NRC
architect/engineer inspection.
*** Update at 2130 EDT on 9/13/97 from Robert Blyth to S. Sandin
***
The licensee has completed its safety evaluation for mode 5
operation and concluded that there was no unreviewed safety question or
change of operation as described in the FSAR. Consequently, degas of
Unit 1 has been terminated, and neither unit will be vented to
atmosphere.
power reactor event number: 32921
the licensee identified that both rhr pumps had been operated when the
rcs was depressurized, which is contrary to the description in the
fsar.
Chapter 9 of the Final Safety Analysis Report (FSAR) states: 'Only
one residual heat removal (RHR) pump will be operated when the reactor
coolant system is open to atmosphere to prevent damaging both pumps in
the unlikely event that suction should be lost.' Operating procedures
for the RHR system do not prevent operation of both RHR pumps when the
reactor coolant system (RCS) is open to atmosphere, and in the past,
both RHR pumps have been run when the RCS was vented to atmosphere.
Plant operating procedures are being reviewed to determine the
impact. Procedure changes will be implemented as necessary to address
the FSAR requirement. A condition report has been initiated to
investigate and determine appropriate preventative actions.
power reactor event number: 32948
it was determined that fibrous material is present in both unit 1 and
unit 2 containment in enough quantity to potentially cause excessive
blockage of the containment recirculation sump screen during the
recirculation phase of a loss of coolant accident.
In 1985, 1986, and 1995 ``Fiberfrax'' refractory insulation
materials in bulk, blanket or board form were used as damming material
when installing fire stops in cable trays in both containments. The
specification governing installation of the fire stops did not require
removal of the material, only stating that it should be removed ``if
necessary.'' The material was not removed. The material is present in
12 cable trays in Unit 1 and 15 cable trays in Unit 2.
When the Fiberfrax is exposed to water or steam/water environment
it could potentially break into small pieces, which could be
transported to the recirculation sump by the water flow in containment
during a loss of coolant accident. Once it reaches the recirculation
sump it has the potential to clog the screens in excess of the design
value. Excessive screen blockage could result in ECCS inoperability
during the recirculation mode.
The Fiberfrax material is currently being removed from the
containments, and removal will be completed prior to restart of the
units. The possibility that the licensee's work control process allowed
unencapsulated fibrous material to be installed in other locations
inside containment is being investigated.
power reactor event number: 32740
units 1 & 2 operated outside the design basis for service water inlet
temp
As a result of questions posed by members of the ongoing NRC design
inspection team, the licensee has determined that Units 1 & 2 have
operated outside the plant design basis for service water inlet
temperature.
The Updated Final Safety Analysis Report (UFSAR), Table 9.5-3,
lists service water inlet temperature design value as 76 degrees F.
This value is used as input to analyses such as containment peak
pressure and control room habitability. Although engineering analyses
were performed in 1988 raising the temperature to 87.5 degrees F as
listed in the plant Technical Specifications, a 10 CFR 50.59 safety
evaluation was never performed, nor was the UFSAR properly revised.
Plant service water inlet temperature is the same as Lake Michigan
water temperature. A review of historical data indicates that during
July and August of any year, Lake Michigan water temperature is likely
to exceed the 76 degrees F value. Specific data for 1997 shows that
Lake Michigan water temperature, and therefore plant service water
inlet temperature, was greater than 76 degrees F on July 17, July 18,
and August 4, 1997. All plant systems which utilize service water as a
cooling medium have been determined to be operable. A 10 CFR 50.59
safety evaluation will be performed and appropriate changes will be
incorporated into the UFSAR.
This report is intended to cover any temperature exclusions above
76 degrees F and below the 87.5 degrees F value listed in the plant
Technical Specifications that may occur prior to the completion of the
10 CFR 50.59 safety evaluation.
power reactor event number: 32822
discovery that a normal operating procedure allowed plant operation
with component cooling water heat exchanger outlet temperatures greater
than the design limit specified in the final safety analysis report
During the ongoing NRC architect/engineer design inspection, a
question was asked relative to a statement used in the normal operating
procedure for the component cooling water (CCW) system. The statement
allows for a heat exchanger outlet temperature for CCW to reach 120
degrees F for a period of 3 hours during normal cooldown on the
residual heat removal system. Investigation revealed that this
statement was in the original issue of the procedure in 1976. However,
no 10 CFR 50.59 unreviewed safety evaluation determination
documentation could be found to support this design parameter.
The licensee's Final Safety Analysis Report (FSAR) states that the
CCW heat exchanger outlet design temperature is 95 degrees F. Based on
the FSAR requiring the 95 degrees F outlet temperature and the lack of
an unreviewed safety question determination to justify operation
exceeding 95 degrees F, the units were in a condition that allowed
operation outside the design basis because the procedure allowed
operation up to 120 degrees F for a period of 3 hours during normal
cooldown on the residual heat removal system. The units are not
currently in a Technical Specification limiting condition for operation
as a result of this issue.
Procedure changes have been made to remove the inappropriate
statement. A condition report has also been written to initiate an
investigation into this event and determine appropriate preventive
actions.
power reactor event number: 32823
failure of a safety review to address final safety analysis attributes
on associated component cooling water cooling requirements
During the ongoing NRC architect/engineer design inspection, a
question was asked relative to dual train component cooling water (CCW)
system outages. During dual train CCW outages, CCW cooling is supplied
to the spent fuel pool (SFP) heat exchanger only from the opposite
unit. If that unit has a loss of coolant accident (LOCA), CCW to the
SFP heat exchanger will isolate. Final Safety Analysis Report (FSAR)
Table 9.5-2, footnote 3, indicates that the SFP heat exchanger is
assumed to be on the non-accident unit.
The licensee reported the following inspection questions:
1) Does a dual train CCW outage represent a condition outside the
plant design basis?
2) Was this reviewed as part of the process of allowing a dual
train CCW outage?
Based on a review of FSAR Table 9.5-2, it was concluded that
footnote 3 was established to clarify why no values for SFP heat
exchanger flow for the unit undergoing the LOCA are listed in the
table. Footnote 3 reflects normal SFP cooling system design and
operation.
A review was performed of the safety evaluation performed for the
Unit 2 full core offload with one train of spent fuel cooling. This
safety review covered the Unit 2 refueling outage schedule which
included a dual train CCW outage.
Footnote 3 of Table 9.5-2 represents the normal design of the SFP
cooling system, that is, the SFP cooling system is designed to remove
the heat generated by stored spent fuel elements in the [SFP]. The
system incorporates two separate trains.
The safety review for the Unit 2 full core offload with one train
of spent fuel cooling addressed the FSAR section 9.4 attribute of the
SFP cooling dealing with time to boil events and bulk pool temperature
requirements; however, the safety review failed to address FSAR section
9.5 attributes associated CCW cooling requirements as given in Table
9.5-2.
This issue impacts both units. However, the units are not currently
in a Technical Specification limiting condition for operation as a
result of this issue.
power reactor event number: 32824
failure to perform a 10-cfr 50.59 evaluation for a procedure change
involving component cooling water heat exchanger outlet temperature
limits
During the ongoing NRC architect/engineer design inspection, a
question was asked relative to the fact that during the last Unit 2
refueling outage, an administrative limit of 90 degrees F was placed on
the component cooling water (CCW) system. The thermal analysis
indicated that a maximum CCW temperature of 90 degrees F would
eliminate all margin associated with the spent fuel pool (SFP) design
assuming a design flow of 3,000 gpm.
The following inspection question was asked: Since a change in CCW
temperature was required to meet the Final Safety Analysis Report
(FSAR) value of 160 degrees F for the SFP, was a 10 CFR 50.59
unreviewed safety evaluation performed?
The licensee reviewed the change to the procedure to limit CCW
temperature to 90 degrees F. The licensee considered this change to be
an administrative change only to lower the allowable temperature to the
SFP cooling heat exchanger. A 10-CFR 50.59 evaluation was not performed
because it was not recognized that the 95 degrees F requirement was
essentially being changed.
Without the completion of an unreviewed safety question
determination, the plant was in a condition outside the design basis.
The units are not currently in a technical specification limiting
condition for operation as a result of this issue.
A condition report has been written to initiate actions to
investigate this event and provide preventive actions. The 90 degrees F
limit is no longer in the operating procedures.
power reactor event number: 32839
available water volume in rwst not adequate in modes 5 and 6
During the ongoing NRC architect/engineer design inspection, NRC
inspectors asked a question about the reactor coolant makeup required
after a 10 CFR 50, Appendix R fire. To respond to the question, the
licensee reviewed two associated design calculations. The more
restrictive calculation was determined to be the calculation of record
to meet the requirement. This calculation requires 87,000 gallons of
water to be available in the refueling water storage tank (RWST). The
value of 87,000 gallons was approved on 02/20/90. During modes 1
through 4, plant procedures adequately ensure that this requirement is
met. During modes 5 and 6, plant procedures are not adequate to ensure
that this requirement is met.
The plant has been in modes 5 and 6 many times since this
requirement became effective on 02/20/90. Based on this, the plant has
been in an unanalyzed condition several times since 02/20/90.
Currently both units are in mode 1. The licensee is reviewing plant
operating procedures to determine impact and will implement procedure
chances as needed prior to either unit entering modes 5 or 6. The
licensee is continuing to evaluate the subject calculations and plans
to submit a licensee event report to the NRC on this subject.
power reactor event number: 32843
lake michigan temperature exceeded plant design basis limit in august
1988
As a result of questions posed by members of the ongoing NRC
architect/engineer design inspection team, the licensee has determined
that the water temperature of Lake Michigan, the plant's ultimate heat
sink, exceeded the plant design basis lake temperature limit of 76
degrees F for 22 days during August 1988.
The control room is normally cooled by an air conditioning system
which utilizes non-safety related chillers. The safety related portion
of the control room air conditioning system utilizes water from Lake
Michigan as the cooling medium. This water would be supplied directly
to the cooling coils following manual realignment. At an average lake
temperature of 81 degrees F that existed during the 22 day period in
August 1988, the temperature inside the control room could have reached
110.4 degrees F had the non-safety related chillers not functioned. At
a temperature of 110.4 degrees F, the lifetime of some instrumentation
inside the control room, the solid state protection system, and the
nuclear instrumentation, is estimated to be at 150 hours or 6.25 days.
The impact of this shortened instrument life span on plant operation
had not been evaluated.
At the time of this event, the plant Technical Specifications
allowed continuous operation with control room temperatures up to 120
degrees F. The Technical Specifications have since been revised such
that continued operation with control room temperatures in excess of 95
degrees F is not permitted.
Operation of the plant during the time period when lake temperature
exceeded the design basis limit, without analysis indicating acceptable
control room cooling could be maintained above this temperature limit,
and without procedures to alert personnel of the situation, is
considered as operation in an unanalyzed condition. The instrumentation
was not adversely impacted by the high lake temperatures as the non-
safety related chillers continued to function and maintain acceptable
control room temperatures.
power reactor event number: 32915
overpressure protection of the component cooling water system piping
not in accordance with the ansi code requirements
Chapter 9.5 of the FSAR states: 'The relief valve on the component
[cooling water] surge tank is sized to relieve the maximum flow rate of
water that would enter the surge tank following a rupture of a reactor
coolant thermal barrier cooling coil. The set pressure assures that the
design pressure of the component cooling system is not exceeded.'
The piping design code at the Cook plant is B31.1. B31.1 states
that an intercepting stop valve cannot be located between the source of
pressure and the pressure relief device credited for protecting the
pipe. In this instance, the pressure source is the ruptured thermal
barrier; the pressure relief device is a safety relief valve on the
surge tank. Contrary to the code requirement, there are manual valves
maintained open between the two. These valves were not controlled in
accordance with or exempted from B31.1.
An evaluation is being performed to determine the most effective
method of establishing and maintaining the code requirement. A
condition report has been written to initiate an investigation into
this event and determine the appropriate preventative actions.''
This condition was identified in response to an ongoing NRC
architect/engineer design inspection.
______
Union of Concerned Scientists,
January 12, 1998
L. Joseph Callan
Executive Director for Operations
Nuclear Regulatory Commission
Washington, DC 20555-0001
Subject: Addendum to Petition Pursuant to 10 CFR 2.206, Donald C. Cook
Nuclear Plants Units 1 and 2, Docket Nos. 50-315 and 50-316
Dear Mr. Callan: The Union of Concerned Scientists submits this
addendum to the petition pursuant to 10 CFR 2.206 we submitted on
October 9, 1997 regarding Donald C. Cook Units 1 and 2. This addendum
was requested by Ms. Elinor Adensam of your staff following my oral
presentation this morning of our safety concerns. Enclosed is the
prepared statement which I read during that presentation.
Sincerely,
David A. Lochbaum,
Nuclear Safety Engineer.
This is a public meeting, not the public hearing that we requested
when we submitted our 2.206 petition over 3 months ago. There have not
been many public hearings held for 2.206 petitions. In fact, it is my
understanding that I have attended every 2.206 public hearing ever
held. One. That public hearing was held on the Millstone petition filed
by We The People and Mr. George Galatis. Mr. Galatis was featured on
the cover of TIME in March 1996. The first, and only, public hearing
for a 2.206 petition was held the following month. Coincidence? I
honestly doubt it. But I will get into statistics and how they are used
by the NRC later.
You agreed to this meeting to see if I have ``new'' information
about D C Cook. Before I present my information, and I'll leave it to
the NRC staff to determine its age, I will briefly discuss some ``old''
information. You have heard this information before, but maybe not yet
in 1998 the 2.206 petition process is seriously and fundamentally
broken. It ain't isn't bent, it's broke.
You revised the 2.206 process 3 or 4 years ago and think it is
fixed. The process was indeed changed, but it is not fixed. The old
2.206 process was broken. The new 2.206 process is broken. It needs to
be fixed, or eliminated.
I suspect that the NRC's difficulty in stemming declining
performance by its licensees offers a close parallel with the history
of the 2.206 petition process. Your inspectors detect a performance
problem at a plant. Its owner implements corrective actions. You
conduct a followup inspection. If you find that things are the same,
you correctly assume that the problem has not been fixed. If you find
that things are different, you assume that the problem has been fixed.
However, things can be different but still not fixed. That's your
trouble with the 2.206 process and may have been the trouble you had
preventing performance declines during the early stages of Salem and
Millstone.
UCS submitted its 2.206 petition on October 9, 1997. We asked for
two things: specific actions regarding D C Cook and a public hearing to
present our concerns. To date, UCS has received one piece of paper from
you concerning our petition a letter dated December 9, 1997,
acknowledging its receipt. All of the few telephone discussions we've
had regarding the petition have been originated by me.
But enough on the 2.206 process. Perhaps too much. Today's meeting
is for UCS to convey its concerns regarding D C Cook to you. Normally,
I distribute copies of the slides or handouts to accompany my oral
remarks. Since I thought, in good faith, that we would be granted a
public hearing and assumed that I'd have at least 10 days to prepare
for it, and since that did not happen, I am unable to provide any
written documentation to you.
There are six concerns that I would like to discuss with you today.
My first concern involves D C Cook's ice condenser containment. The
NRC Inspector General's office was informed last summer about alleged
problems in the configuration and testing of the ice condenser at Watts
Bar. Problems with the bay doors and components of the ice baskets were
specifically identified. The allegations also suggested that many of
the problems were generic and therefore affected the other ice
condenser plants, including D C Cook. Finally, it was alleged that the
problems were known, but not properly reported, by the Watts Bar
licensee, the D C Cook licensee, the McQuire licensee, and even
Westinghouse.
I refer you to Mr. George Mulley in the IG's office for the
technical issues. I don't want to compromise IG's investigation, any
more than I've already done. B but these allegations exist and they may
affect D C Cook. You recently issued an amendment to D C Cook's
technical specifications involving the amount of ice in the ice
condenser. The ice condenser licensing bases were changed, albeit to a
limited extent. It provided another opportunity for the licensee to
identify and report any ice condenser problems. I did not see any such
report. Are the Watts Bar ice condenser problems valid? Do they apply
to D C Cook? I can't answer that at this time. Can you?
My second concern involves the licensee's 50.59 safety evaluation
process. From the material I've reviewed, it appeared that you felt the
licensee's 50.59 safety evaluation process needed improvements. I
understand that the licensee made changes to its process., I am
concerned that it is not evident that the licensee made any attempt to
determine if safety evaluations prepared under the old process led to
inappropriate conclusions. In other words, did the bad process cause
bad products?
Before joining UCS in 1996, I was a consultant on a UFSAR vertical
slice project for Salem Unit 2. We looked at every safety evaluation
written for every modification to the systems we examined. Prior to
that assignment, I was a consultant on the power update project for
Susquehanna. Although that licensee did not have a suspect 50.59
process, the effect of increasing the plant's licensed power level
might have invalidated the conclusions from prior safety evaluations.
Therefore, we reviewed the summary for every safety evaluation written.
Prior to that assignment, I was a consultant on the Browns Ferry
Restart Project. TVA did have a configuration management problem. We
reviewed every safety evaluation written for every modification to the
systems we examined.
So, based on industry experience and common sense, I expected to
see at least some screening of safety evaluations written at D C Cook
using the bad process. Has an assessment of D C Cook's safety
evaluations been performed? If not, could ``bad'' safety evaluations
prepared using the ``bad'' 50.59 process mean that unidentified safety
problems remain at D C Cook?
My third concern involves engineering calculations. From the
material I've reviewed, it appears that the quality of the licensee's
calculations was suspect. In fact, the licensee's response to the
confirmatory action letter (CAL) dated December 2, 1997, stated that a
root cause for its problems was that ``Some analyses were found to
contain errors and incorrect assumptions.'' The licensee said a peer
review process was used to spot check its calculations. According to
the licensee's response, a total of 191 calculations were peer
reviewed. Sounds like a broad review. But it's not, for the following
reason.
171 calculations were reviewed to resolve the concerns you raised
during the design inspection. The remaining 20 calculations covered the
auxiliary feedwater, component cooling water, chemical volume and
control, containment spray, essential service water, residual heat
removal, and electrical distribution systems. 20 calculations for 7
safety systems. That's an average of fewer than 3 calculations reviewed
per safety system. Even given this tiny sample, the licensee reported
that ``some administrative and minor technical concerns were
identified.''
Is the NRC satisfied that a review of merely 20 calculations is an
adequate extent of condition assessment? If so, why?
My fourth concern also involves engineering calculations. Between
the time we submitted our petition and the time the licensee responded
to the CAL, I received allegations involving net positive suction head
(NPSH) calculations performed for D C Cook. The individual making the
allegations was at D C Cook and told me there were problems with more
than one NPSH calculation. The alleged problems involved both
``missing'' and inaccurate calculations. I do not know which pumps were
affected, but it should not be too difficult for you to check. I am
unable to check myself since these documents are not publicly
available. Do the safety-related pumps at D C Cook have adequate NPSH
as shown by quality calculations?
My fifth concern involves the credibility of the licensee's
response to your CAL. By letter dated February 6, 1997, the licensee
submitted, under oath, its response to the NRC's 50.54(f) request dated
October 9, 1996. I think it is fair to state that the licensee, in that
response, told you that there were no major problems with the two
safety systems you examined in the subsequent design inspection. Each
of these safety systems had been the subject of a design bases document
recently issued by the licensee. Essentially, the licensee gave both of
these safety systems a clean bill of health. Your subsequent design
inspection clearly showed otherwise. Both units have been shut down for
over 3 months to fix the problems you identified in the allegedly
``clean'' systems.
Since the shut down, the licensee has expended considerable effort
fixing the many problems you identified. Numerous physical plant
changes were necessary. However, the licensee has expended less effort
examining whether the programmatic problems you found affected other
systems as well. The licensee was unable to identify the problems in
the two systems you examined during a thorough design bases
documentation program. It appears that the licensee applied less
effort, per system, on the recent extent of condition assessment than
it applied during the design bases document process. Since the larger
effort failed, can you be sure that the smaller effort succeeded?
My sixth concern involves the NRC's own inspection process. You
came in, looked at two safety systems, and found enough problems to
force both units to shut down. The licensee maintains that these
problems were confined to these two systems and everything else is
well. Sound familiar? In 1996, you examined 4 systems at Maine Yankee
and documented over 70 pages of problems. That licensee claimed the
problems were limited to just those systems. Last year, you examined 2
systems at Vermont Yankee and found a serious problem affecting 1
system and lesser problems affecting the other. That licensee claimed
the problems were limited to just those systems. If these licensees are
correct, then you are the best regulator on the planet. You
consistently find the needles in the haystacks. You find the only
significant system problems that exist at the plants.
Were these licensees correct? I don't know. More importantly, you
don't know either. You've never expanded the scope for system sampling
inspections. If you had , just once, examined another system or two,
then you'd really know whether you found the only problems or not.
You make sure that the licensees fix the problems you find in the
few systems. That obviously needs to be done. But much more needs to be
done. The true purpose of the your inspection of sample systems is not
to ensure the operability of these few systems. Your inspections are
intended to assess the licensee's programs and controls for maintaining
all safety systems. Your findings tell you something about the material
condition of the plant, but they also provide you information on the
licensee's general safety management ability. Theoretically, you should
not find anything during an inspection. Thus, any finding actually
represents two problems a nonconforming condition as well as a failure
of the licensee's Quality Assurance (QA) process. Too often, you allow
licensees to simply fix half of the problem the nonconforming
condition. For example, when you find a broken widget, you make sure
that the licensee changes the widget. You also need to find out why the
licensee did not identify the broken widget and if they have any other
broken widgets. The licensee's programmatic failures must be fixed.
Otherwise, problems in other systems will remain undetected and future
problems may be introduced.
What would it take for you to expand the sample size? This may be a
rhetorical question since you have never expanded the sample size. It
should not be a rhetorical question. You must should develop and issue
clearly defined criteria on when you will require additional system
assessments based on findings from your system inspections.
These are my concerns.
I think UCS asked for very reasonable actions in our petition. The
significant problems you found raise valid questions about the other
safety systems at D C Cook. To date, I do not think those questions
have been adequately answered. It is clearly the licensee's burden to
answer these questions. It is your burden not to permit D C Cook to
restart until these questions are answered and the answers indicate the
plant will be operated safely.
To be perfectly candid, I never expected our petition to be
granted. The NRC's record is such that a public petition has very
little chance of being granted. My fallback position is to monitor
daily event reports, LERs, and inspection reports after the plants
restart. When I see a significant problem reported that might have been
identified and corrected before restart had the NRC granted our
petition, you can be sure I'll let you know.
______
Union of Concerned Scientists,
June 24, 1998
The Honorable Pete V. Domenici, Chairman,
The Honorable Harry Reid, Ranking Minority Member
Subcommittee on Energy and Water Development
Committee on Appropriations
United States Senate
Dear Senators: The Nuclear Regulatory Commission (NRC) has the
mission of ensuring that the public is adequately protected from the
radiation hazards of nuclear power plant operation. We had misgivings
about the NRC staffing cuts recently proposed by your subcommittee
because we felt they would compromise the agency's ability to carry out
its oversight function. The position adopted in the final
appropriations language relieved many of our concerns. The NRC's
oversight problems identified by the subcommittee warrant further
scrutiny. We commend the subcommittee for initiating an inquiry into
these important matters.
The final appropriations language contains several examples of
alleged NRC over-regulation. We agree that the NRC should avoid
regulations or actions which impose unnecessary burdens on nuclear
plant owners. Unnecessary actions may divert resources that could be
better used to improve safety performance. Thus, we support the
initiative undertaken by the subcommittee to examine this issue in the
context of an investigation of how the NRC implements its oversight
role.
However, the emphasis appears focused solely on potential over-
regulation by the NRC. The equally important subject of potential
under-regulation should also be considered. For example, we call your
attention to the report released in May 1997 by the United States
General Accounting Office (GAO) in response to questions from Senators
Biden and Lieberman. The GAO concluded that the NRC had waited too long
to stem declining safety performance at the Millstone plant, the Cooper
nuclear plant in Nebraska, and the Salem nuclear plant in New Jersey.
The NRC implemented numerous changes as a result of lessons it learned
from Millstone and other facilities. But we are not confident that
sufficient progress has been made. For comparison, the NRC ordered
Millstone's owners to bring in two independent companies to confirm
that the plant's problems had been fully corrected. The NRC has not had
comparable appraisals by Congress, or another independent party, to
confirm that its own problems have been fully remedied.
We recently released a report called The Good, The Bad, and The
Ugly: A Report on Safety in America's Nuclear Power Industry. A copy of
this report is enclosed. We describe numerous safety problems in this
report which we feel fall into the category of under-regulation by the
NRC. Please note that most of these safety problems occurred after the
GAO's report was released.
We could communicate additional examples of possible under-
regulation by the NRC. We feel that it would be more useful at this
point to suggest that the fundamental reason for the NRC's possible
under-regulation is also responsible for its alleged over-regulation
that the NRC lacks objective standards when monitoring safety at
nuclear power plants. If our contention is true, then resolution of
this root cause will remedy both of the adverse consequences from the
NRC's oversight problems.
Lacking objective safety standards, the agency cannot pro-actively
check declining safety levels at a plant. As a result, a watershed
event or protracted series of troubling incidents must occur before the
NRC reacts. Considerable work had to be completed at Millstone, Salem,
and Indian Point 3 before the NRC would permit these plants to restart.
The volume of these efforts suggests that these plants operated with
inadequate safety margins before they were shut down.
We feel that the NRC currently has the means to apply objective
safety standards in its oversight of nuclear power plants. We recently
presented our recommended approach at a meeting of the American Nuclear
Society. A copy of our ANS presentation is enclosed.
The NRC usually considers the safety implications of degraded plant
conditions in the wrong context. The NRC only discusses the defense-in-
depth elements (i.e., multiple barriers and redundant equipment) within
its regulations that provide adequate protection of the public in event
of an accident. Degraded plant conditions typically involve more than
one non-conformance with the safety regulations. For example, nearly 70
physical changes to Millstone Unit 3 were made during its current
outage to restore the facility into compliance with safety regulations.
According to the plant's owners, at least 20 problems were corrected
that had moderate or high safety risk. The virtues of the regulations
are irrelevant when a plant like Millstone is so far out of compliance
with them.
The NRC also underestimates the safety implications from degraded
plant conditions by independently evaluating each problem. In our view,
that approach is non-conservative and improper. By analogy, an
individual can generally tolerate a single bee sting with minor health
consequences. The effects from 20 to 70 bee stings could be a more
serious matter.
We advocate that the NRC evaluate, or require that its licensees
evaluate, the safety implications of degraded plant conditions in their
proper context. The purpose of this evaluation would be to determine
whether the public would have been protected had an accident occurred
at the plant in its degraded condition. The NRC should determine if the
public would have been protected had Millstone Unit 3 suffered an
accident while it operated with so many of its safety systems degraded.
Occasionally, results from these determinations may indicate that
public safety could have been compromised. Identification of such near-
misses is vitally important. First, it significantly reduces the
chances that the problem will recur with potentially more tragic
consequences. In addition, it prioritizes safety issues into those
which must be addressed immediately and those which can wait. This
distinction allows resources to be applied properly from both safety
and economic perspectives.
We respectfully ask the subcommittee to consider both under-
regulation and over-regulation as it examines the NRC's effectiveness.
If there's any way that UCS can be of assistance in your efforts,
please do not hesitate to contact me.
Sincerely,
David A. Lochbaum,
Nuclear Safety Engineer.
Enclosures: 1) UCS Presentation at 1998 ANS Annual Meeting,
``Reactor Safety Margins,'' June 8, 1998
2) The Good, The Bad, and The Ugly: A Report on Safety in America's
Nuclear Power Industry, June 1998
______
Comments and Observations on NRC's Regulatory Structure and Processes
Summary
Nuclear plant performance is a function of management effectiveness
more than it is a function of plant age, reactor type, and other
factors.
All plants can develop comprehensive corrective action plans. Good
management ensures that the plans are implemented properly and revised
as necessary such that the desired objectives are obtained. Bad
management allows the plan to get waylaid by emerging issues such that
schedule or quality, or both, suffer. Good management uses yardsticks
to measure the effectiveness of changes, physical or administrative)
implemented at their plants. Bad management does not.
Good management establishes objective standards, which are clearly
and consistently communicated to plant workers. Bad management sends
unclear or mixed messages (i.e., either standards are vague/ill-defined
like excellence' or objectives cannot be attained with resources
devoted to projects).
Good management establishes clear accountability, or ownership, for
issues. Bad management does not, leading to confusion, frustration,
ineffectiveness, and delays as things get sorted out.
Good management provides workers with effective procedures and
policies such that most items can be processed through normal channels.
Bad management does not, which forces the majority of items to be hand-
carried through the process.
NRC regulatory performance is a function of management
effectiveness more than it is a function of staff size, structure, and
other factors. Unfortunately, the NRC staff more closely resembles bad
management than good management:
<bullet> The NRC staff develops corrective action plans, but fails to
adequately monitor them to ensure the stated objectives are
obtained (examples: enforcement policy, 2.206 and allegation
processes have been revised in recent years, but are no better than
they were a decade ago).
<bullet> The NRC staff does not consistently enforce criteria whether
they are 10 CFR 50 regulations or NRC policies (examples: D C Cook
was shut down last September due to LOCA concerns under postulated
conditions. Yet suction strainer issues on BWRs, which actually
happened and had unusually similar consequences, did not trigger
the shut down of any of the affected plants).
<bullet> The NRC staff seems to lack clearly defined accountability
(example: UCS allegation involving Millstone Unit 3 was purportedly
handled' by NRR until the week after the restart vote, then it was
passed back to Region I).
<bullet> The NRC staff suffers from a lack of continuity (example:
allegations, 2.206 petitions, and issues raised by UCS get
routinely re-assigned from one interim or transient person to
another).
Inspection and Enforcement
Inspection program is flawed because inspection reports do not
accurately reflect inspection findings.
Examples: Maine Yankee ISAT (10/96), Dresden assessment (late 96)
Inspection program is also flawed because inspection reports are
primarily dictated by NRC's general impression of the plant's
performance.
Example: D C Cook virtually every inspection report issued since
January 1998 has included one or more violations. In the 2-years prior
to 1998, fewer than half of the inspection reports contained
violation(s). Most of the violations cited in 1998 are not for new
problems, but are for longstanding material condition or administrative
control problems. The floodgates' at D C Cook are now open.
Enforcement process is badly broken because it is inconsistent and
untimely.
Examples: By policy, licensees who implement good corrective
actions in a timely manner (i.e., do what the law requires) can have
their civil penalties totally waived. By practice, licensees who run up
a huge tab (e.g., Millstone's $2.1 million fine) receive a discount
because of their protracted outages. The middle-of-the-road plants are
the only ones paying full fare.
Largest single failure of inspection and enforcement programs is
that they lack credibility. From the public's perspective, credibility
will never be restored as long as NRC staff steadfastly maintains that
every violation and event lacks safety significance. The public simply
does not believe that the NRC would fine a utility $2.1 million for
``safe'' behavior.
Use of Performance Indicators and Performance Assessment
NRC staff does not need a new or revised performance assessment
process it needs to do something tangible when the process being used
indicates a licensee is not performing adequately.
Examples: Millstone, Salem, and the Watch List perennial Dresden
Recall Mr. Kenyon's comment to the Commission that he found NU to be
the most dysfunctional organization he ever saw. If Mr. Kenyon could
reach that conclusion during his first week at NU, NRC staff must have
known that Millstone was in trouble.
Development of Risk-informed Regulations and Regulatory Policies
Risk-informed regulation cannot proceed unless the risks are known.
Until plants are generally in conformance with their design and
licensing bases such that their Individual Plant Examinations are
valid, risk-informed regulation cannot be implemented.
Examples: Pilgrim, Vermont Yankee, and D C Cook all responded to
NRC's October 9, 1996 50.54(f) letter on design bases information by
stating that they everything under control:
Subsequent NRC inspection showed that Pilgrim did not have strong
control over design bases and consequently was performing weak'
operability determinations. Pilgrim committed to DBD effort.
NRC A/E inspection revealed numerous shortcomings in design bases
control at Vermont Yankee. Vermont Yankee committed to expanded,
revamped DBD program.
NRC A/E inspection triggered shut down of both units at D C Cook.
Both units are likely to remain shut down for over a year while
extensive plant and administrative changes are made.
All of these plants had previously submitted their IPEs in response
to NRC Generic Letter 88-20. Yet these findings unequivocally
demonstrate that these risk assessments were useless because they did
not accurately reflect the actual plant conditions.
During the current design bases Amnesty Program, licensees have
reported literally dozens of design bases problems that dated back to
original construction. Many of these problems required physical plant
changes or procedure revisions to correct. These deficiencies are
reality, yet the IPEs do not account for these common-mode failures.
Risk assessments should account for all possible failure modes, not
just the mathematically convenient ones.
The industry is lengthening surveillance and inspection intervals
based on empirical database of equipment failure rates. However, these
activities have also detected cases of sabotage and inadvertent
component mispositioning. It is not apparent that the justification for
longer testing and inspection intervals has accounted for these other
risk factors. Risk-informed regulation must include all risks.
Timeliness of NRC Processes
NRC staff should not establish timeliness goals unless it also
provides resources and oversight necessary to ensure that time frames
are not met at the expense of quality.
Example: Recent emphasis on closing allegations within 180 days may
be causing a high percentage of them to be closed without the
underlying issues being addressed.
Whenever possible, NRC staff should live by same timeliness
standards mandated for licensees.
Example: Per 10 CFR Part 21, licensees have up to 60 days from
discovery of a potential safety hazard to justify hwy it is not a
problem or report it to the NRC. The NRC, upon receipt of a 10 CFR Part
21 report, can and will evaluate it at a much more leisurely pace.
______
Union of Concerned Scientists,
July 20, 1998.
Chairman Shirley A. Jackson
Commissioner Greta J. Dicus
Commissioner Nils J. Diaz
Commissioner Edward McGaffigan, Jr.
United States Nuclear Regulatory Commission
Washington, DC 20555-0001
Dear Chairman Jackson and Commissioners: UCS appreciated the
opportunity to participate in the roundtable discussion on Friday, July
17, 1998. Three issues raised during that discussion require our
further comment:
An industry representative stated Friday, and others have stated
similar sentiments in various forums, that the NRC over-reacted to
Millstone. UCS does not share this characterization. In any event, it
must be noted that an NRC reaction would not have been necessary had
the Millstone licensee and the industry fulfilled its legal
obligations. In the late 1980's, the NRC was concerned about design
bases control and configuration management issues. The industry assured
the NRC that it had these areas under control. Millstone clearly
demonstrated that this assurance was unwarranted.
It should also be pointed out that on the very day of this
roundtable discussion, ten (10) US nuclear power plants (Clinton, D C
Cook 1&2, LaSalle 1&2, Millstone 1&2, Beaver Valley 1&2, and Indian
Point 2) were shut down while they resolved design bases and
configuration management problems. These plants are not enduring
protracted outages because the NRC saddled them with too many Level IV
and uncited violations they are shut down because they failed to
properly implement their design control and configuration management
programs.
Several people commented Friday about ``inspector mischief.'' It is
UCS's perspective that NRC inspectors are a strength and not a
weakness. We contend that these capable individuals are inadequately
managed because they are not given well-defined, objective criteria to
measure plant performance against. Inspectors cannot be the primary
fault of the NRC's inspection program their reports are signed out by
NRC regional and headquarters supervision.
We maintained that an obstacle to risk-informed regulation was that
all risks are not being accounted for. For example, design errors are
handled differently than operator errors. Individual plant examinations
(IPEs) include probabilities for operator mistakes even through
licensee event reports contain sections explaining what actions will be
used to prevent recurrence of such mistakes. Thus, IPEs recognize that
operator errors are a fact of life.
Design errors are treated differently. The reality of the past few
years is that safety systems at many operating nuclear power plants
contained design errors dating back to original plant construction that
would have prevented, or seriously impaired, their functioning in case
of an accident. Yet despite the growing empirical database of such
findings, IPEs do not account for design errors that might prevent
safety systems from functioning. It is possible to calculate design
error probabilities from the existing data just as the operator error
probabilities are determined.
While the focus of the roundtable discussion was on areas in which
the various stakeholders felt that the NRC needed to improve, we would
be remiss if we did not comment that the NRC does many things very
well. It is, in fact, this demonstrated capability that gives us hope
that the NRC will be able to resolve the weak areas discussed last
Friday.
______
Responses by David A. Lochbaum to Additiona Questions from Senator
Lieberman
Question 1. You have expressed concern about the use of risk in NRC
safety regulations, independent of strong design standards and good
management practices. What is the appropriate use of risk-infommed
regulation by the NRC, and what are its limitations?
Response. Risk-informed regulation has been appropriately used by
the industry and the NRC to establish priorities. For example, plant
owners routinely use risk infommation to detemmine schedules for
managing work backlogs. In addition, the NRC uses risk information to
determine which safety systems their inspectors examine. Results from
available risk models generally permit the relative importance of
safety systems to be detemmined such that these kind of applications
are meaningful.
The limitations of the risk models and in the conformance of plant
design and operations with assumptions made in the risk models prevent
risk-infommed regulation from making go/no-go decisions. Unfortunately,
risk models have been used for this purpose. For example, the NRC used
the results from a draft risk assessment to dismiss safety concerns
about the design of the spent fuel pool cooling system at the
Susquehanna nuclear plant in Pennsylvania. The draft risk assessment
contained more than fifty (50) errors and omissions, yet its non-
conservative results were used to dismiss a safety concern that
affected nearly thirty-five operating nuclear plants.
Results from available risk models, even if corrected for gross
errors as in the Susquehanna example, are not reliable enough to define
the cutoff point for resolving safety concems. At least, not unless
that threshold is conservatively low, 1x10-6 or lower.
Risk-infommation regulation is further limited by its emphasis on
core damage frequencies. Virtually all of the plant-specific risk
assessments examine postulated accident sequences that culminate in
severe reactor core damage. Many of the plant systems designed to
protect the public from radioactivity released during an accident, such
as the containment filtration systems, cannot fail in any way to
initiate or exacerbate a core damage accident. Thus, the risk
assessments assign these plant systems low safety significance.
However, if there is a reactor core damage event, as occurred at the
Three Mile Island plant in March 1979, these plant systems must
function to limit public health consequences.
UCS feels that risk-infommed regulation must properly recognize the
vital importance of plant systems which protect the public and the
environment in event of a reactor core damage event.
Question 2. The GAO has concluded that the competency of a nuclear
plant's management is perhaps the most critical factor in safety
performance. This conclusion makes basic common sense. What are the
views of Panel II members on this matter? How best can the GAO
recommendation be implemented, including by the NRC?
Response. UCS agrees fully with the GAO's conclusion regarding the
role of management competency in plant safety performance. Prior to
joining UCS. our nuclear safety engineer worked for 14 years as a
consultant to the nuclear power industry. He had long-temm assignments
at some of the best perfomming nuclear plants and also some at plants
which were deservedly on the NRC's Watch List. The fundamental
difference in perfommance was management's ability to cultivate and
sustain a proper attitude toward safety.
The best way for the NRC to monitor management competency would be
to consistently implement objective standards in its inspection,
enforcement, and assessment programs. We feel that the NRC allows its
inspection findings, its enforcement actions, and its assessment
reports to be unduly influenced by its subjective evaluation of plant
perfommance. Consider, for example, two plants which have the same
degraded condition. The NRC discounts the significance of the problem
for the plant it feels is in general good health, while it upgrades the
severity of the very same problem for the plant it feels is not doing
so well. This subjective treatment artificially widens the perceived
gap in plant perfommance. The NRC's approach masks declining
perfommance at a ``good'' plant until it drops so far that it can no
longer be disregarded. Conversely, the NRC's approach prolongs the time
that a ``bad'' plant must spend in the regulatory doghouse even though
its actual perfommance is improving.
The NRC must allow objective inspection and enforcement data to
dictate the results from its plant performance evaluation, instead of
allowing just the opposite. The most accurate measure of management
competency available to the NRC would be plant perfommance evaluations
based on consistently applied objective criteria. Then, plants with a
high number of inspection findings and enforcement actions would
warrant closer NRC interest in management capability.
Question 3. You have expressed general agreement that the Watch
List process--by which the NRC is supposed to provide an early warning
about problem plants--is not working well. What specific changes would
you recommend to improve this process?
Response. UCS recommends that the NRC adopt an assessment process
that uses objective criteria to determine perfommance rankings. Their
current process allows NRC senior managers to adjust rankings upward or
downward based on subjective feelings. In the past, such subjectivity
masked declining perfommance trends at several plants. It also
unnecessarily prolonged the time that some plants spent in regulatory
distress.
UCS recommends that the NRC's assessment program include a report,
at no less than an annual frequency, for all operating nuclear plants.
We suggest that the NRC Regional Administrator could brief the
Commissioners on the performance on all plant within his/her region.
The scope of this briefing would cover the NRC's assessment for each
plant. The briefing would also include the NRC's inspection plans for
the upcoming year to address regulatory concerns at each plant.
UCS feels that the current Watch List process is too heavily
focused on detemmining who makes the list. This emphasis apparently
distracts the NRC's attention from efforts it needs to take to induce a
performance turnaround at the problem plants. The nearly seven (7) year
residence of the Dresden plant on the Watch List is the classic
example.
WCS's proposed process would de-emphasize the selection of the
Watch List plants. The Regional Administrator would discuss the NRC's
assessment of perfommance at all plants in the region, along with the
regulatory actions planned to deal with any areas of weaknesses. This
accountability, explicit on the NRC's part and implicit on the plant
owner's part, should lessen the chances that poor perfommance will be
sustained.
Since the NRC has divided the country into four regions, a Regional
plant performance briefing could be conducted each quarter. UCS
recommends that the NRC consider holding these quarterly briefings in
the NRC's regional offices or in the public meeting room near a plant
in the region. This would allow the public in the communities around
the nuclear plants to observe the proceedings.
______
Responses by David A. Lochbaum to Additional Questions from Senator
Inhofe
Question 1. In your oral testimony, you stated that UCS has
completed a study showing that the current US nuclear plant could
shutdown at the end of their current license period, and be replaced
with renewables and conservation without the need to emit further
greenhouse gases into the environment. Please provide a copy of this
report along with justification of the assumptions used in projecting
the levels of conservation and development of renewables technology.
Also provide estimates of the costs that would result if the UCS
approach were implemented.
Response. Attached please find a copy of Energy Innovations: A
Prosperous Path to a Clean Environment, by the Alliance to Save Energy;
American Council for an Energy-Efficient Economy, Natural Resources
Defense Council, Tellus Institute and the Union of Concerned
Scientists. Please note that the conclusion that reductions in
greenhouse gas emissions can be accomplished while phasing out nuclear
generation is not based on a projection of energy efficiency and
renewables under business-as-usual conditions, but as the result of
specific policy initiatives to promote efficiency and renewables that
are outlined in the study. The study assumed that nuclear generation
would be phased out as licenses expire. It examined the level of
efficiency, renewables, and other electricity supply side measures
would be needed to achieve carbon emission reductions of 10 percent
from 1990 levels by 2010. The analysis used the Energy Information
Administration's National Energy Modeling System (NEMS). [Note: the
referenced document is retained in committee files.]
The cost of achieving those reductions was found to be negative.
The net savings for implementing the efficiency and renewables policies
was found to grow each year, equaling a levelized $19 billion per year
through 2010. By 2010, the average household would save $530 per year.
These policies were also shown to increase Gross Domestic Production by
$2.8 billion and income by $14 billion with the creation of 773,000 new
jobs in 2010. Continuation of the policies through the year 2030 was
found to yield carbon reductions of 45 percent below 1990 levels. The
economic analysis did not continue past 2010.
UCS along with members of the organizations which collaborated in
the development of the Energy Innovations report would be pleased to
meet with the Subcommittee or staff to discuss the report, its
methodology, and assumptions.
__________
Testimony of Steven M. Fetter, Managing Director, Global Power Group,
Fitch IBCA, Inc., New York, New York
I appreciate the opportunity to testify before the Subcommittee on
Clean Air, Wetlands, Private Property and Nuclear Safety to offer the
views of Fitch IBCA on the appropriate role for the Nuclear Regulatory
Committee (NRC) in the evolving utility competitive environment. Fitch
IBCA is the international credit rating agency that resulted from the
December 1997 merger between the New York-based Fitch Investors Service
and IBCA Limited of London. I will speak from the perspective of a
member of the financial community as well as the former Chairman of the
Michigan Public Service Commission. I should also note that I am not a
nuclear engineering or nuclear physics expert, and in this regard I am
representative of the large majority of investors and financial
analysts who play some role in assessing the nuclear industry.
The NRC is at the center of investors' perceptions of the financial
risks facing the U.S. nuclear industry. In evaluating utilities that
operate nuclear plants, debt and equity investors study closely the
processes and actions of the NRC. To the extent that these regulatory
responsibilities are carried out in a consistent and predictable
manner, investors find comfort with the outlook for both individual
nuclear utilities and the nuclear industry as a whole.
It is difficult to envision a competitive electricity market
without nuclear being a key element. Nuclear energy today accounts for
about 20 percent of U.S. power supply. With state regulators generally
providing utilities with almost total reimbursement for above-market
generation costs, nuclear plants with their low variable costs are
being counted on as a major source of low cost electricity for years to
come. The balance that is ultimately struck by the NRC between its
oversight responsibilities and the necessities of a free market will be
crucial in determining whether these expectations are borne out.
In the past, it has been difficult for investors to predict with
any certainty the actions of the NRC. As a former regulator, I can
appreciate the pressures under which the NRC operates, attempting to
follow statutory mandates that set strict adherence as the goal.
Unfortunately, such a policy formulation creates a situation where
there are so many standards and requirements that it is difficult for
nuclear plant owners to know how to allocate resources, much less for a
financial analyst to be able to make an assessment of overall risk.
Investors do not have a clear sense of the factors that the NRC
uses to rate individual plants, modify Systematic Assessment of
Licensee Performance (SALP) ratings, or place plants on the Watch List.
This lack of certainty about the impetus for potential NRC actions has
a negative impact on how investors evaluate nuclear companies,
especially when one considers the severity of the resulting effects.
For example, the posting of a plant to the Watch List is in itself
likely to constrain a nuclear operator's financial resources and access
to capital. Once the NRC takes that step, it typically leads to a lower
stock price, reduced access to the equity market, weakening bond and
commercial paper ratings, and higher cost of debt.
To compound the problem, investors perceive that once a plant is
taken out of service for any reason, there is a tendency for the NRC
staff to seek out additional flaws or issues, whether safety-related or
not, for consideration and correction. The result is that an outage of
any type holds out the potential for an indefinitely prolonged
stoppage, with effects that utility investors most fear: unrecoverable
purchase power costs, rate penalties, loss of rate base treatment, and
potential fines or other expenditures to support required remedial
steps.
As one utility CEO recently confided to me, ``We need a new
regulatory paradigm, because under the current system every nuclear
plant in the country is 10 minutes away from being offline for a year
or two.'' And this from someone who praises NRC Chairman Shirley
Jackson's leadership as ``tough but fair, in a way that has made the
nuclear industry stronger.'' Needless to say, debt and equity investors
are keenly aware of the risk created when any major nuclear plant,
regardless of past history, is potentially moments away from a loss of
its operating license and a reduction in its market value of hundreds
of millions of dollars.
What this means is that going forward the sensitivity of the NRC to
the challenges facing nuclear utilities will be more important than
ever before. In the past, utilities operated under a heavily-regulated
cost of service-based system. To the extent that regulatory mandates
placed additional costs on utility operations, in most cases those
expenses were recoverable from ratepayers under cost-based tariffs.
Now, under the evolving competitive regime, all utilities will be
called upon to react and deal with marketplace pressures. For nuclear
utilities, this will be an especial challenge, because their need for
greater flexibility will likely collide with the NRC's traditional
highly prescriptive approach to regulating the sector. In the new
environment, however, it is incumbent upon the NRC to differentiate
between actions necessary for safety and those that have limited or no
relationship to safety. The NRC must maintain vigilance over the former
and allow flexibility with regard to the latter.
By moving to a risk-informed, performance-based regulatory
approach, the NRC will be able to maintain its important safety
oversight role, while allowing nuclear facilities to be viable players
in the competitive system. During my tenure as a state regulator, the
Michigan Public Service Commission (MPSC) distinguished itself by
fashioning incentive-based plans in all regulated industries based on
performance, service quality, and infrastructure improvement. By
stepping away from the usual way of doing things, we permitted
utilities to determine the best means to improve both operational and
financial performance with benefits flowing through to consumers in the
form of lower rates and a more efficient regulatory process.para.A
similar approach at the NRC would seem justified to provide utilities
operating nuclear plants with the ability and motivation to adopt
innovative policies that could afford similar mutual benefits.
Investors and rating agencies will closely monitor the NRC as it
goes through the first round of license renewals. With two applications
for extension already filed by Baltimore Gas and Electric Co and Duke
Power, the NRC has the opportunity to show that its promise of a fair,
effective and efficient license renewal process will be a reality. If
it succeeds in its goal, investors will be more willing to invest in
existing nuclear facilities with the expectation that the plants will
be able to operate safely and reliably beyond the end of their license
period. If, however, the process for the first applicants bogs down,
some plants might be shut down earlier than their currently licensed
lives due to the unwillingness of investors to provide additional
capital expenditures for a plant that may not be around long enough to
provide a fair return.
A similar situation exists with the recent announcement by PECO
Energy of their involvement in the proposed acquisition of GPU's Three
Mile Island nuclear plant. The process the NRC utilizes and the
regulatory rules imposed during consideration of this and other
proposed transfers of nuclear facilities will have a major influence on
the role nuclear will play in the competitive electricity market. An
appreciation by the NRC and the Congress that the changing dynamic
calls for reorientation of the NRC from a prescriptive enforcement body
with regard to everything a nuclear owner does to one focussed more
closely on true issues of safety will be an important step in ensuring
a place for nuclear in the new competitive electricity framework.
______
Responses of Steven M. Fetter, to Additional Questions from Senator
Lieberman
Question 1. The GAO has concluded that the competency of a nuclear
plant's management is perhaps the most critical factor in safety
performance. This conclusion makes basic common sense. What are the
views of Panel 11 members on this matter? How best can the GAO
recommendation be implemented, including by the NRC?
Response. The Congress and the NRC have the responsibility to set
clear and objective standards for the level of training, experience and
competency necessary of nuclear managers to assure safe operation of
the nation's nuclear plants. For the NRC, this oversight responsibility
is ongoing and should not be compromised as a result of the electric
industry's movement to a competitive orientation. That said, it should
not be the role of the Congress, the NRC, or the GAO to assess or set
requirements for the efficient operation of a nuclear plant outside the
area of safety. In a competitive setting, the market should make those
judgments.
Question 2. You have expressed general agreement that the Watch
List process--by which the NRC is supposed to provide an early warning
about problem plants--is not working well. What specific changes would
you recommend to improve this process?
Response. The concern the financial community has with the Watch
List stems from the seeming lack of clear, objective standards that can
be relied upon to predict movement on or off the list. NRC Commissioner
Edward McGaffigan has shared with me a method by which an analyst can
track negative movement for a nuclear utility by asking the utility if
it has been informed by its NRC Regional Administrator that it has been
a subject of discussion at a periodic management assessment meeting.
This would be a precursor to potential placement on the Watch List.
To my mind, a more transparent and public procedure backed by clear
and objective safety standards would serve the process better. Industry
participants and observers would benefit from a system based on
objective standards that provides multiple levels or gradations of
potential risk. This would diminish the severe ``on-oroff'' financial
impact of the Watch List process.
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