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[ Briefing Charts ]

                                                                 1

 1                      UNITED STATES OF AMERICA

 2                    NUCLEAR REGULATORY COMMISSION

 3                                 ***

 4                       OFFICE OF THE SECRETARY

 5                                 ***

 6                         BRIEFING BY DOE ON

 7                  PLUTONIUM DISPOSITION PROGRAM AND

 8               MOX FUEL FABRICATION FACILITY LICENSING

 9                                 ***

10                           PUBLIC MEETING

11

12                    Nuclear Regulatory Commission

13              One White Flint North Bldg 1, Room 1F-16

14                        11555 Rockville Pike

15                         Rockville, Maryland

16

17                      Monday, November 27, 2000

18              The Committee met in open session, pursuant to

19    notice, at 9:35 a.m., the Honorable RICHARD A. MESERVE,

20    Chairman of the Commission, presiding.

21    COMMISSIONERS PRESENT:

22              RICHARD A. MESERVE, Chairman of the Commission

23              NILS J. DIAZ, Member of the Commission

24              EDWARD McGAFFIGAN, JR., Member of the Commission

25              JEFFREY S. MERRIFIELD, Member of the Commission

                                                                 2

 1    STAFF AND PRESENTERS:

 2              FRANK MIRAGLIA, Deputy EDO

 3              KAREN D. CYR, General Counsel

 4              ANNETTE L. VIETTI-COOK, Assistant Secretary

 5              LAURA HOLGATE, Director, DOE Office of Fissile

 6              Materials Deposition (OFMD);Acting Director,

 7              Office of Defense Nuclear Nonproliferation

 8              ED SISKIN, DOE Deputy Director, OFMD

 9              DAVID NULTON, DOE Director, Reactors Group, OFMD

10              JAMIE JOHNSON, DOE/OFMD

11              PATRICK RHOADS, DOE/OFMD

12              JON THOMPSON, DOE/OFMD

13              ED BRABAZON, DCS

14

15

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20

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25

                                                                 3

 1                        P R O C E E D I N G S

 2                                                     [9:05 a.m.]

 3              CHAIRMAN MESERVE:  We are here this morning to

 4    hear from the United Stated Department of Energy and the

 5    National Nuclear Security Administration on the disposition

 6    of plutonium and enriched uranium.  These materials of

 7    course are materials that are subject to DOE's purview as

 8    part of its weapons-related activities and as such are not

 9    subject to NRC jurisdiction.

10              As part of the process for disposition, however,

11    there is going to be some involvement of NRC and NRC license

12    facilities, so our briefing this morning is to provide an

13    opportunity for DOE to explain the various activities that

14    it envisions in this area over the coming years.

15              I am going to turn the meeting over to Laura

16    Holgate, who is the Director of Office of Fissile Materials

17    Disposition, and why don't you introduce your colleagues.

18              MS. HOLGATE:  Very good.  Thank you, Mr. Chairman. 

19    I appreciate the chance to come and give an update on our

20    program here.

21              In terms of who you see on this side of the table,

22    you have my Deputy, Ed Siskin and Dave Nulton, who is the

23    Director of our Reactors Group and two members of Dave's

24    staff focusing on our Mox Activities, Pat Rhoads and Jamie

25    Johnson --

                                                                 4

 1              CHAIRMAN MESERVE:  Good morning.

 2              MS. HOLGATE:  We are very glad to be here.

 3              CHAIRMAN MESERVE:  Good.  Thank you very much.

 4              Why don't we proceed?  I know that you have some

 5    slides that you have presented and our customary practice is

 6    to walk through the slides and then the Commissioners will

 7    ask questions after the completion of the presentation.

 8              MS. HOLGATE:  Very good.

 9              As I said, I very much appreciate the chance to

10    have -- to bring this group up to date on our activities. 

11    This is my first briefing before this august group, but you

12    have been involved in a long history of positive

13    interactions at the Staff level and also in other briefings

14    by my predecessors on this program and so I think there's a

15    long history of good work together on this effort.

16              One of the key goals that we have in our

17    interactions with the NRC is to support your authority, both

18    the legal and the moral authority, to regulate these

19    activities safely, at the same time meeting our national

20    security priorities and schedules and I think those are two

21    goals that we can pursue simultaneously in very good

22    connection.

23              I would like to just say a couple words about some

24    of your Staff who have been very good colleagues in working

25    with us over the last few years, particularly Drew Persinko,

                                                                 5

 1    Janis Dambly, Melanie Galloway and Mike Weber are certainly

 2    well known to us and have been very productive cohorts in

 3    this.

 4              Just a brief outline of our presentation for this

 5    morning.

 6              We will talk a little bit about program

 7    objectives, touch very briefly on our off-specification

 8    highly enriched uranium activities but focus primarily on

 9    plutonium, first looking at our bilateral agreement with

10    Russia, giving you a summary of that, and then turning to

11    U.S. plans to implement its commitments under that bilateral

12    agreement.  Next slide, please.

13              Our program objectives have been fairly stable

14    over the last few years and have three basic goals -- first,

15    to dispose of 174 metric tons of surplus U.S. highly

16    enriched uranium coming out of our weapons programs;

17    secondly, to dispose of 50 metric tons of surplus U.S.

18    plutonium -- this is both weapons grade and non-weapons

19    grade -- but that all comes out of the weapons programs; and

20    finally, working with Russia to dispose of their surplus

21    plutonium.

22              It is really that last piece that keeps our eyes

23    all focused on the fact that this is a national security and

24    a nonproliferation mission here.

25              Our goal is not that we are so worried about the

                                                                 6

 1    safety and security of U.S. materials but to use our

 2    activities in connection with the U.S. materials to

 3    instigate activities in Russia that will result in a safer

 4    and more secure environment for their fissile materials in

 5    Russia.  Next slide, please.

 6              The NRC is involved in these activities in a

 7    number of ways.

 8              First of all, on the highly enriched uranium, most

 9    of our highly enriched uranium activities are fairly

10    transparent, that's blended down to low enriched uranium

11    uses, fuel and NRC-regulated reactors all over the country.

12              There is small amount of off-specification

13    material however that will be used at TVA, where there will

14    need to be a license modification.  We will talk a little

15    bit about that in a minute.

16              On the plutonium side, there are several elements

17    of the MOX set of activities on fuel fabrication,

18    qualification, utilization, packaging and transportation

19    where the NRC has very strong roles.  Next slide, please.

20              On the international front, the NRC has

21    interactions -- both a very strong role with the IAEA and

22    one of the things we have been particularly grateful for is

23    their participation in a regulatory working group we have

24    established with Russia under the 1998 Scientific and

25    Technical Cooperation Agreement, and many of our main

                                                                 7

 1    interlocutors there are with the Gotsadanadzor whose future

 2    we are all watching very carefully at this point.  That will

 3    be an important issue to watch, but that has been one of our

 4    ways to interact with them.  Your team's participation in

 5    that has been very helpful.

 6              Turning to the off-spec projects, off-spec HEU, as

 7    you know, there has been several years of cooperation or

 8    conversations anyway with the Tennessee Valley

 9    Administration to utilize this material as fuel in their

10    reactors.  We are just about to conclude an interagency

11    agreement that will cover 34 metric tons of off-spec HEU. 

12    This is the majority of off-spec.  We may add some

13    additional tons to this as it is characterized in more

14    detail in the future but this gives us the baseline of what

15    we are going to do and this will result in some of the

16    material being processed at Savannah River prior to being

17    transferred to TVA vendors for fuel fabrication and the

18    majority of the material however will be transferred

19    directly to TVA vendors.

20              You will be hearing directly from TVA on the

21    licensing issues associated with inserting this fuel in

22    their reactors.

23              COMMISSIONER MERRIFIELD:  Mr. Chairman, if I may,

24    could you just define what you mean by "off-specification"

25    just for the benefit of our audience and for me?

                                                                 8

 1              MS. HOLGATE:  Sure.  It has mostly to do with

 2    isotopics and let me turn to Dave --

 3              MR. NULTON:  Yes.  The primary isotopic

 4    contaminant in there is U-236, not a lot but enough that it

 5    puts it over the specification for commercial reactor fuel,

 6    so in our agreement with TVA they have said they can through

 7    blending and so forth they can blend that down to a

 8    manageable level.

 9              They have to up the enrichment a bit to use it in

10    their reactors but it is still below 5 percent and they feel

11    that they can use it.

12              COMMISSIONER MERRIFIELD:  And I am sorry to do

13    this, but just so it is clear again for our audience,

14    there's nothing inherently dangerous about the fact that it

15    is off-spec?

16              MS. HOLGATE:  No.

17              COMMISSIONER MERRIFIELD:  That it is off-spec for

18    the purposes of --

19              MS. HOLGATE:  It is off-spec for the purposes of

20    normal fuel fabrication, but it is not off-spec for the

21    purposes of normal fuel fabrication, but it is not off-spec

22    from the basics of safe reactors.

23              COMMISSIONER MERRIFIELD:  Thank you, Mr. Chairman.

24              MS. HOLGATE:  As I mentioned, there will also need

25    to be some new containers that will require NRC

                                                                 9

 1    certification.

 2              Turning now to the main topic before us of

 3    disposing of plutonium coming out of weapons programs and

 4    dealing with the non-proliferation risk associated with

 5    that, over the last 18 months -- actually, it is closer to

 6    two years now -- the U.S. and Russia have been engaged in

 7    very intensive negotiations, kicked off by Summit statements

 8    in the fall of '98 that pledged both countries to develop as

 9    quickly as possible a bilateral agreement specifying exactly

10    how each country will separately and together eliminate

11    their excess weapons plutonium.

12              In June's Moscow Summit we were very pleased to be

13    able to announce that that negotiation had been concluded

14    and that it was signed after a few bureaucratic internal

15    maneuverings within Russia, it was ultimately signed and

16    went into effect on September 1st, 2000.

17              I will just point out that it is being ratified in

18    Russia by the Duma.  It will not be ratified by the U.S.

19    Senate, as it is an Executive agreement and not a treaty,

20    but it is going through a ratification process in Russia

21    because of some of the tax protection language that will be

22    insisted upon, but we have a very clear explanation that it

23    is to be provisionally applied pending that ratification and

24    therefore it is in full effect as of this time, even though

25    it is not yet ratified in Russia.  We don't expect there to

                                                                10

 1    be any problems with that ratification process.  Next slide,

 2    please.

 3              The key provisions of this agreement focus on 34

 4    tons of weapons grade plutonium from weapons programs. 

 5    There are two techniques embedded in the agreement for

 6    disposition, irradiation as MOX fuel in reactors and

 7    immobilization with high level radioactive waste.  There is

 8    provision in the agreement for the two sides to agree to

 9    additional techniques if those are developed and agreed

10    upon, but for the moment these are the two approaches that

11    are approved.

12              The U.S. will be pursuing what we call our hybrid

13    strategy, which I will talk to in more detail in a moment,

14    where 25.6 metric tons out of our 34 will be irradiated as

15    MOX and I looked at this -- I apologize.  The chart should

16    say "immobilization" -- MOX is obviously irradiation. 

17    Immobilization is 8.4 metric tons.

18              I should say a word or two about the 34 tons

19    because the Summit statements and various public statements

20    have been made that talk about 50 tons of material.

21              The U.S. does in fact have 50 tons of excess

22    material when you combine weapons grade and non-weapons

23    grade, when you combine very dilute materials with the

24    plutonium that is already -- that is still in weapons.

25              The Russians were very clear when we began the

                                                                11

 1    negotiations with them that they would match us quality for

 2    quality with our material and if we insisted upon putting

 3    all of our non-weapons grade and very dilute low-quality

 4    materials under the agreement that they would do the same

 5    with theirs and it would essentially become an environmental

 6    agreement rather than a nonproliferation agreement, so we

 7    agreed to focus on the amount of material that we both had

 8    that was actual weapons grade material and that the U.S. had

 9    34 tons of that, and so that is where the 34 tons came from.

10              We consider this a first step towards the pledges

11    of 50 tons and it gives us a chance to get the

12    infrastructure in place to get the monitoring and

13    inspections provisions in place to begin to eliminate this

14    material and then to add more material later.  Next slide,

15    please.

16              The U.S. and Russian programs are established in

17    this agreement to proceed in rough parallel.  There is a

18    series of milestones in leading through the design and

19    construction phase and approval phase of these facilities

20    that commits both sides to begin operating their industrial

21    scale facilities by the end of 2007.

22              The goal is a disposition rate of two metric tons

23    of plutonium per year and there is a pledge in the agreement

24    that the sides must work together to develop a plan to be

25    able to double that disposition rate, at least double that

                                                                12

 1    disposition rate within a year of signing.  Now obviously

 2    that is -- the plan needs to be developed within a year of

 3    signing, not the actual disposition doubling.

 4              We are in very intensive negotiations right now

 5    with other countries and doing a fair amount of R&D; to

 6    identify mechanisms by which that disposition rate can be

 7    doubled in Russia.  The U.S. program is sized to be able to

 8    handle roughly four metric tons annually of weapons material

 9    plus an additional amount of non-weapons grade material.

10              Bilateral monitoring and inspection procedures are

11    obviously a key element of such an agreement.  We need to be

12    sure that the Russians are in fact disposing of the material

13    that is of the quality that is intended by the agreement,

14    that they are keeping to the milestones that they have

15    pledged to and that they are using the facilities only for

16    disposition missions or for other missions that don't

17    conflict with the spirit or the progress of disposition.

18              The agreement that was signed in September

19    includes a set of principles on which those monitoring and

20    inspection agreements will be determined but because the

21    facilities are still early enough in their design, we were

22    not able to get into the kind of detail surrounding how many

23    inspectors would show up on which day and stay for how long

24    and take what kind of measurements and so on.  That is set

25    for a separate follow-on negotiation that is to be concluded

                                                                13

 1    within a couple of years, and in fact there is a commitment

 2    in the agreement that the U.S. will not provide any funds to

 3    help Russia begin construction if we have not concluded that

 4    follow-on bilateral monitoring and inspections agreement.

 5              The other thing I should point out about

 6    monitoring and inspections is that the agreement definitely

 7    plans for an IAEA role and there is agreement between U.S.

 8    and Russia that it will not be full up safeguards but

 9    probably something short of that but exactly what forum is

10    used to negotiate that agreement and what the level of

11    safeguards will be is yet to be agreed between U.S. and

12    Russia and then agreed with IAEA, so there is a commitment

13    to begin negotiations with the IAEA jointly soon after. 

14    Next slide, please.

15              One of the important aspects of this agreement is

16    to make sure that at the same time that we are eliminating

17    or transforming this material into a form unattractive for

18    weapons use that it is not simultaneously being separated

19    back into forms that are attractive.  This was a tough point

20    with the Russians.  Obviously they believe in the closed

21    fuel cycle and they perceive plutonium to be an asset and a

22    value not a burden to be managed, and what we were able to

23    do is to obtain their agreement that there would be no

24    separation of any of the plutonium, any of the 34 tons of

25    plutonium that is covered by this agreement during the time

                                                                14

 1    that that 34 tons is being eliminated and any subsequent

 2    reprocessing, which would only be on the Russian side

 3    obviously of irradiated MOX fuel that stems from this

 4    agreement would be subject to mutually agreed monitoring

 5    measures, which we have told the Russians will be full up by

 6    IAEA safeguards, that they should have no mistake about

 7    that.

 8              COMMISSIONER DIAZ:  Excuse me, Ms. Holgate. 

 9    Disposed means until they all have been placed through a

10    reactor?

11              MS. HOLGATE:  Correct and achieved the spent fuel

12    standard.

13              COMMISSIONER DIAZ:  Dispositioned?

14              MS. HOLGATE:  Dispositioned, yes.

15              I tend to use those words interchangeably.  I

16    don't intend any difference in meaning between the two.

17              The commitment is further that immobilized

18    plutonium may never be separated.

19              This was another sticking point with the Russians

20    because they have long believed and continued to assert that

21    immobilization is not an effective disposition technique

22    because it does not have any isotopic transformation of the

23    plutonium.  It remains weapons grade and that one could --

24    if one needed to -- re-obtain that material, gather it back

25    from the immobilized form.  We have made powerful arguments

                                                                15

 1    to the contrary and in fact have told them there is, for the

 2    form the U.S. will be using for immobilization there is no

 3    known separation technique and that it would be very

 4    challenging and we have certainly no intent to do this.

 5              We were ultimately able to get them to agree to

 6    immobilization as an approved technology but only for that

 7    material that is not the highest quality -- in other words,

 8    material that is in oxide form as opposed to currently being

 9    in pit form, but we will not separate that, obviously.

10              One of the things that the Russians made clear,

11    again coming back to the differences envisioned between the

12    U.S. and the Russians on the value of plutonium and its role

13    in the fuel cycle, is that they would only proceed down this

14    path if they received support from the U.S. and the rest of

15    the Western communities and therefore the agreement includes

16    U.S. assistance to provide near-term financial assistance on

17    the order of $200 million, as described in the agreement. 

18    The President made a pledge in January of '99 of a total of

19    $400 million and we are working very closely with European

20    colleagues to identify additional sources of multilateral

21    assistance leading towards an agreement at the next G8

22    Summit in Genoa of exactly what those pledges will be.

23              We have been gratified that in addition to the $30

24    million plus that Japan had pledged in 1999, recently

25    England, the UK, pledged an additional $100 million and

                                                                16

 1    France indicated it will be providing -- ready to consider

 2    providing up to $60 million and so we are slowly getting

 3    there.  Hopefully we will be able to describe our Genoa G8

 4    meeting as a success in approaching about a billion dollars

 5    of necessary capital costs to support the Russia program

 6    based on current estimates.

 7              COMMISSIONER DIAZ:  That is $200 million per year?

 8              MS. HOLGATE:  No, sir, $200 million total, with an

 9    additional $200 million from a collection of annual

10    appropriations from 2000, fiscal year 2000, through 2004, so

11    we are about half-way through that second $200 million.

12              The other key point, as we look to the future on

13    this agreement, is that we codified in writing that any

14    additional plutonium added to this agreement need not be on

15    a reciprocal basis.  The Russians certainly have not yet

16    accepted this point in reality.  They were willing to have

17    it be reflected in the agreement as a statement but they

18    continue to say that they will only come down at the same

19    amount that we're coming down.  Given that they started with

20    about 50 percent more than we did, this will obviously lead

21    to unequal levels, if we proceed with equal reductions, so

22    one of our major challenges over the next 15 years as we

23    work through the 34 tons is to identify ways to get them to

24    eliminate more without the U.S. having to go below levels

25    that it may consider what we require for our strategic

                                                                17

 1    needs.

 2              Given the number of changes we have seen over the

 3    last 10 years, I am certainly humble enough to suspect that

 4    we will have significant changes over the next 15, perhaps

 5    even enough to change the Russians' minds about closed fuel

 6    cycles and so on, so we may -- that may be more likely in

 7    the future than it is today.

 8              So with that summary of the bilateral agreement,

 9    that sets the stage for the heart of our discussion today of

10    how is the U.S. going to meet its commitments as embodied in

11    this agreement.

12              We will be pursuing, as I indicated earlier, a

13    hybrid strategy that has two elements, immobilization, where

14    we immobilize the plutonium oxide with ceramic material

15    surrounded by vitrified high level radioactive waste and the

16    second technique will be through manufacture of MOX and

17    irradiation in reactors as in existing domestic commercial

18    reactors.

19              The key of both of these technologies is to meet

20    the spent fuel standard, to make the surplus plutonium as

21    inaccessible and unattractive for retrieval in weapons use

22    as the residual plutonium and spent fuel from commercial

23    reactors that it currently resides in in fuel pools

24    throughout the country and in fact throughout the world, so

25    I don't want to mislead anyone into thinking that we are

                                                                18

 1    pursuing an absolute level of disposition.  This is a

 2    comparative standard by definition and yet it will achieve

 3    the nonproliferation and national security goals that we are

 4    pursuing.  Next slide, please.

 5              The pursuit of this strategy will require three

 6    new facilities in the U.S. -- one facility known as the pit

 7    disassembly and conversion facility, which is designed to

 8    take the plutonium pit or trigger of the nuclear weapon and

 9    convert it into an oxide powder using the advanced recovery

10    and integrated extraction system known as the ARIES system. 

11    This is a dry system in contrast to previous oxidation

12    techniques involving wet chemistry which resulted in large

13    amounts of aqueous waste.  This results in a very small

14    amount of waste and is a very interesting, innovative

15    technology developed at Los Alamos and Livermore National

16    Labs.

17              The second facility is a MOX fuel fabrication

18    facility to take that plutonium oxide manufactured into

19    mixed oxide fuel and fresh fuel assemblies.

20              Finally, there will be a plutonium immobilization

21    facility which will focus on the non-pit plutonium, mix it

22    with ceramic material to manufacture pucks, array those

23    pucks in a canister and surround it with molten high level

24    waste coming out of the Defense waste processing facility at

25    Savannah River -- so we are using this -- in the

                                                                19

 1    mobilization case we are trying to make maximum use of

 2    existing facilities in the DOE complex.  Next slide, please.

 3              Focusing on the mixed oxide fuel aspect of this

 4    hybrid strategy as being of primary interest to this

 5    audience, a couple of words on the contract, prime contract,

 6    that we are using to support this.

 7              It has four elements -- fuel qualification,

 8    fabrication, packaging, and irradiation, and the NRC

 9    obviously is involved in each stage in terms of identifying

10    the adequacy of the work that is being done and in providing

11    licenses and approvals along the way.  Next slide, please.

12              Our main contractor is Duke, Cogema, Stone &

13    Webster -- referred to as DCS.  This contract was signed in

14    March of '99 and it involves a consortium of Duke

15    engineering and services, Cogema and Stone & Webster.  You

16    may be aware that Stone & Webster has been in some corporate

17    excitement over the last few months.  It is still not

18    settled but one of the key elements of settling the

19    relationship of the new owner to this contract is that they

20    be prepared to take the same commitments as Stone & Webster

21    had been in this consortium.

22              We are working very closely with the bankruptcy

23    court on that.

24              There are a handful of subcontractors underneath

25    this overall contract that are listed, as you can see.

                                                                20

 1              Turning to the fuel fabrication facility, this as

 2    you can see is a large and very complex facility but one of

 3    our key elements in choosing this group of contractors is

 4    that it is based on using proven technology based on the

 5    MELOX facility in France, the Cogema facility.

 6              Three interconnected areas within the hardened

 7    space and current French technology is one of the key pieces

 8    of work that we have underway in the design phase, where we

 9    are now, is modifying that existing technology to meet NRC

10    licensing requirements and other activities that we refer to

11    as Americanization of the design -- things as basic as stair

12    height to meet OSHA regs have had to be changed from the

13    French plant.

14              All the plutonium processing in this facility will

15    be in glove-boxes.  Next slide, please.

16              One of the first activities in an effort of this

17    nature is the creation of lead assemblies.  These are

18    required by the reactor operator for confirmation of MOX

19    fuel design and, as you may be aware, that the initial or

20    original plan for manufacturing these lead assemblies has

21    been terminated.  That was to do so at the Los Alamos

22    National Laboratory.  They were not able to meet our

23    schedule requirements and so we terminated that approach in

24    May and proceeded with an analysis of two alternatives to

25    that.

                                                                21

 1              One would be fabrication in Europe using

 2    prototypic processes and equipment and then movement of that

 3    material to the U.S., of those fabricated rods to the U.S.

 4              The second approach is fabrication in the MOX fuel

 5    fabrication facility as the initial product of that

 6    facility.

 7              Our two main goals in this study is

 8    prototypicality and schedule.

 9              We expect to make a decision this winter.

10              On the irradiation services, the four plants

11    involved are four Duke Energy operated PWRs, two McGuire and

12    two Catawba.  This will help us -- these four plants rather

13    will meet the two metric tons per year goal on their own and

14    then the immobilization will give us some additional

15    disposition of about half a ton of weapons grade material a

16    year that will give us some wiggle room in meeting our

17    requirements under the bilateral agreement.

18              The 25 tons that is scheduled to go through the

19    irradiation process will meet the spent fuel standard by

20    2019 and this is based on two cycles of irradiation for each

21    element and the spent fuel will be stored onsite pending

22    geologic disposal, very similar to the LEU fuel portions of

23    the reactor loads.

24              The spent fuel will have to be monitored by the

25    Russians and probably the IAEA once it reaches the spent

                                                                22

 1    fuel standard, so it will probably have to be

 2    managed potentially separately but at least in a way that

 3    makes it clear which are the MOX elements and which are the

 4    LEU elements.  Next slide, please.

 5              Just a reminder to all of us that the NRC role

 6    here stems from law -- the FY '99 Defense Authorization Act. 

 7    This is -- the law was required because this is such a

 8    unique situation.  We are talking about a regulated facility

 9    that is on a classified site but with a commercial operator. 

10    It is kind of an island within a whole sea of DOE operations

11    and undoubtedly we will find some surprises as we go down

12    this route, some things we have not predicted about the

13    interrelationships of this kind of a situation but there are

14    clearly benefits associated with co-location of this

15    facility with the other disposition facilities and other DOE

16    facilities, so this is in some ways a new enterprise for

17    both DOE and the NRC.  Next slide, please.

18              Now what you will be seeing from us -- actually

19    that is not an accurate statement -- you will be seeing from

20    the licensees.

21              First focusing on the fuel fabrication facility, I

22    want to indicate my appreciation for the NRC's willingness

23    to be flexible in terms of receiving our environmental

24    report prior to the full construction authorization report. 

25    That will help us keep to our schedule and I hope it will be

                                                                23

 1    helpful for your side as well.

 2              The next item will be the construction

 3    authorization report.  At the moment we had hoped to be able

 4    to do that this fall but obviously we have not been able to

 5    meet that schedule.  We are looking at early next year but

 6    we are not going to give you a specific date until we are

 7    confident that that can be met.

 8              What I will tell you is that it will be a robust

 9    submittal and hopefully identify as many of the obvious

10    questions that would come about from the regulatory

11    perspective as we can and try to provide answers to those in

12    the initial submittal.

13              Finally, on this facility comes the application

14    for the license and we expect this date to hold of

15    mid-calendar year '02.  We don't expect a delay in the CAR

16    to perpetuate that.  The next slide shows how these dates

17    all fit together between the design Licensing/NEPA

18    activities and construction of the facilities.

19              The dates that are reflected here will keep us on

20    track with our bilateral commitments that are embodied in

21    our agreement with Russia and these are obviously based on a

22    certain set of assumptions, we hope accurate assumptions,

23    about NRC licensing dates and durations of activities.

24              Some of the other submittals that you will be

25    seeing from the licensee will be for fuel qualification and

                                                                24

 1    irradiation as well as for fuel packaging and transportation

 2    and we are on schedule for the deliveries of the documents

 3    that will be provided in connection with these activities. 

 4    Next slide, please.

 5              This is not the first time that MOX has been

 6    considered in the context of U.S. reactors but certainly a

 7    new enterprise in terms of the scale and the motivation for

 8    a MOX activity and as such there's certain to be questions

 9    and issues and uncertainties that arise.

10              The good news is that at this point we have not

11    been able to identify any show-stoppers either technically

12    or otherwise in proceeding with this technique of

13    disposition and we have no issues or concerns vis-a-vis the

14    licensing process at the moment.

15              Our goal over the next few weeks or months, years

16    working with you and working with the licensee will be to

17    maximize the communications to maintain this fairly stable

18    situation.

19              At the same time, this is the first facility to be

20    licensed under the new 10 CFR 70 rule, as we understand it,

21    and the first time that the two-step process embodied in

22    that rule will be applied to this particular type of

23    facility.

24              Another novel aspect of this is the performance

25    requirements for the worker exposure and we will be -- this

                                                                25

 1    is obviously in support of the license application and our

 2    role here is a little bit unique as well because of the

 3    outside of the PIDAS for this facility will be a DOE

 4    reservation, as opposed to an open kind of geography, so

 5    that is a little bit different for everyone involved.

 6              One of the things that needs to be clarified also

 7    is the process for determining the fuel qualification needs. 

 8    DCS has provided your Staff with the approach that they

 9    intend to take and this is one area where I say that if

10    there is any concerns from the NRC side about that approach

11    the sooner we know that the better, because we will need to

12    be making decisions about this particular aspect in the

13    spring.  Next slide, please.

14              Just a couple of words on interfaces between DOE

15    and NRC.  We have been talking about really most of the

16    activities up to this point in the briefing have been

17    between the licensee and the NRC with DOE as obviously an

18    interested party, but there are some direct connections as

19    well.

20              One is the Memorandum of Understanding on

21    security, especially information security.  The ball is in

22    our court on this and we will be providing the next

23    iteration of this back to the NRC side as soon as we

24    complete our internal discussions on this issue.

25              As you can understand, security issues are pretty

                                                                26

 1    sensitive within the Department right now and we want to be

 2    sure we get it right.

 3              The broader and more ongoing issue will be the

 4    need for a continuing dialogue in support of our national

 5    security missions and the commitments that we have made in

 6    our bilateral agreement with Russia.

 7              With that, I will close and open myself and my

 8    team here to any questions your Staff may have.

 9              CHAIRMAN MESERVE:  Thank you very much for a very

10    helpful and informative briefing.

11              I have just two matters I wanted to ask about.  On

12    Slide 17 you indicated that in discussing the MELOX facility

13    and the French technology that it would have to be modified

14    to meet NRC licensing requirements.

15              MS. HOLGATE:  Yes.

16              CHAIRMAN MESERVE:  And you mentioned a trivial

17    example of that is some OSHA requirements.  I presume that

18    there are some others that are more substantive.

19              MS. HOLGATE:  Absolutely.

20              CHAIRMAN MESERVE:  And if you could indicate what

21    sorts of changes we anticipate are going to have to be made

22    to Cogema process in order to be able to have it licensable

23    in the U.S.

24              MS. HOLGATE:  Dave, do you want to -- pardon me. 

25    I would like to turn to Ed Brabazon from DCS, who is with us

                                                                27

 1    this morning and ask him to address that question.

 2              CHAIRMAN MESERVE:  There is a microphone there at

 3    the podium.

 4              MR. BRABAZON:  Basically the design of the MOX

 5    facility is very similar to the MELOX facility.  The process

 6    is essentially the same.  The capacity is different, so

 7    there are a different number of units in the MOX facility

 8    compared to MELOX.

 9              The differences are things like United States

10    codes and standards.  One main difference obviously is the

11    50 cycles used in Europe versus 60 cycles in the U.S. but

12    beyond that we will comply with the various IEEE codes and

13    standards, those that are required by the various NRC

14    Regulatory Guides.

15              We would comply with other mechanical ASME or ASDM

16    codes and standards so it is really in the details of the

17    components where the process is different, but fundamentally

18    there are no significant difference in the design.

19              CHAIRMAN MESERVE:  Thank you very much.

20              The other question I had was a follow-up on

21    something that isn't part of our regulatory purview but to

22    ask a question of how the Russians are planning to use the

23    MOX.

24              MS. HOLGATE:  The Russians are looking to use

25    their mixed oxide fuel in either the VBR -- well, in a

                                                                28

 1    combination of VBR-1000s and their BN-600.  The first is of

 2    course a lightwater reactor.  The second is a fast reactor.

 3              There is a question of whether they will be using

 4    four VBR-1000s loaded at roughly 40 percent MOX cores versus

 5    seven loaded more towards a third and maybe all seven at 40

 6    percent.  That is one of the aspects of the expansion plan

 7    of how do you double that two metric tons.  You may start at

 8    one-third core and then slightly increase each of those

 9    reactors.

10              The fast reactor will have its initial load at

11    one-third core and depending on the performance during that

12    initial hybrid core consider moving to 100 percent MOX core.

13              Again, some combination of that expansion could

14    lead to making a significant dent in that doubling

15    requirement for the expansion capacity.

16              CHAIRMAN MESERVE:  Okay.  Let me turn to my

17    colleagues.

18              Commissioner Diaz?

19              COMMISSIONER DIAZ:  Thank you, Mr. Chairman.

20              The first question, just for my own information,

21    this separation between the 25.6 and 8.4, is that something

22    that is fixed in time or do you see as time progresses that

23    maybe some of this additional plutonium could be classified

24    as being able to be used for MOX -- or is there a final

25    determination that's being made?

                                                                29

 1              MS. HOLGATE:  The numbers that are in the briefing

 2    are embodied at this level of precision in the bilateral

 3    agreement.

 4              COMMISSIONER DIAZ:  Okay.

 5              MS. HOLGATE:  That doesn't mean it can't be

 6    changed, but it means it would have to obtain Russian

 7    agreement to any decision to change.

 8              This is based, the split is based on both a

 9    technical understanding of which plutonium is most suitable

10    for MOX and on a wish by the Russians that we maximize the

11    amount of material that we use in MOX because of the

12    concerns I mentioned that they have about the immobilization

13    technology.

14              COMMISSIONER DIAZ:  Right.  That is really the

15    reason for the question.

16              Also, I have a bias, being a reactor engineer.

17              I would like to put the plutonium that was

18    produced in the reactor back in the reactor and burn it.

19              MS. HOLGATE:  Yes.

20              COMMISSIONER DIAZ:  So I was wondering whether it

21    is 8.4 and if that has been identified it's 95 percent

22    certainty that that is what it is going to be or 10 years

23    from now we might revisit the issue.

24              MS. HOLGATE:  I would say both those things are

25    accurate.  It is 95 percent certain today that this is the

                                                                30

 1    split but 10 years from now there is a mechanism to change

 2    that if that is agreed with the Russians.

 3              COMMISSIONER DIAZ:  Okay, thank you.

 4              In the issue of immobilization, is this, the

 5    present option has considered, and you were pretty certain

 6    that you considered the alternative that has been selected

 7    as being as good -- I want to quote -- as irradiating them

 8    in a reactor.  Has that determination been made to again an

 9    85 percent confidence level or --

10              MS. HOLGATE:  Yes, it has been.

11              In both cases we are trying to make it big heavy

12    and radioactive and I think we have very high confidence

13    that the immobilization technology will have that result.

14              COMMISSIONER DIAZ:  Okay.  On Slide 14 you talk

15    about the facilities and you talk about three different

16    facilities with different degrees of security, different

17    degrees of involvement.

18              These are going to be in three different, separate

19    places or some of these facilities like the MOX fabrication

20    and the PIDAS assembly, they are going to be in the same

21    building?

22              I am concerned about the interaction that we are

23    going to have in the three different places and how can that

24    be separated.

25              MS. HOLGATE:  That is a concern we have, not just

                                                                31

 1    in the context of the regulatory structure but a whole

 2    number of operating and security and monitoring and

 3    inspections concerns.

 4              At the moment -- not at the moment -- we have

 5    determined that these will be three different facilities. 

 6    They will all be located in F Area at the Savannah River

 7    site and we are still studying the various specific plots of

 8    land where they will be located.

 9              Some of them may be contiguous.  They may end up

10    being uncontiguous on the site, depending on the geology

11    obviously.  That is a key consideration.  We are doing

12    geotechnical work right now to identify -- there's about six

13    or seven different plots of land that are candidate

14    locations for these three facilities.

15              COMMISSIONER DIAZ:  They will be physically and

16    regulatorily separated?

17              MS. HOLGATE:  Yes, sir.

18              COMMISSIONER DIAZ:  Thank you, Mr. Chairman.

19              CHAIRMAN MESERVE:  Commissioner McGaffigan.

20              COMMISSIONER McGAFFIGAN:  If I just look at the

21    trade press and some of the discussions about the Russians,

22    I get a little confused as to their ability to keep

23    schedules ever.

24              You said in one of your comments that the Russians

25    obviously think of plutonium as an asset and may never want

                                                                32

 1    to go beyond what we have here.

 2              Just as a fundamental issue, why did we not --

 3    when Mr. Kantor used to come here we would see in the trade

 4    press numbers like 150 tons of excess plutonium on the

 5    Russian side, and why did we not insist on proportional

 6    reductions rather than one-for-one reductions, because

 7    obviously if those trade press reports were right, they are

 8    going to be left with vastly more weapons grade plutonium

 9    after this than we are, plus they are still producing it at

10    the production reactors that have never been shut down.

11              MS. HOLGATE:  True on all fronts.  Absolutely. 

12    The estimates of the total Russian amount of material range

13    all over the map but no one thinks it is as low as our

14    total, which is roughly 100 metric tons, as we identified in

15    our Fifty Years of Plutonium document a few years ago.

16              This was a matter of real discussion and

17    soul-searching and interagency wangling in the run up to the

18    agreement in terms of what was our posture going to be.

19              One of the challenges is without knowing the total

20    it is hard to know what the right proportion would be.

21              COMMISSIONER McGAFFIGAN:  People aren't worried

22    about break-out potentials I guess any longer in the arms

23    control space?

24              MS. HOLGATE:  Well, Russians are, rhetorically.

25              COMMISSIONER McGAFFIGAN:  That's why I find that

                                                                33

 1    the Russian attitude about immobilization, you know, akin to

 2    the pot calling the kettle black.

 3              They are going to be left with vastly more weapons

 4    grade plutonium and they are worrying about somebody in

 5    America busting into Yucca Mountain if it is licensed or

 6    busting into Savannah River, taking the stuff out of casks,

 7    you know, coming up with sophisticated techniques to try to

 8    get the last little bit?

 9              You would produce it, as Mr. Kantor said at the

10    previous hearing, you would go and start producing it over

11    again rather than go through that story, but --

12              MS. HOLGATE:  We have certainly shared that

13    perspective with the Russians.

14              COMMISSIONER McGAFFIGAN:  You can share it -- on

15    this Commissioner's behalf I just find the Russian argument

16    nuts, but --

17              MS. HOLGATE:  I would have to agree with you,

18    right.

19              COMMISSIONER McGAFFIGAN:  This is not to hurt the

20    Duma ratification process because they are getting a pretty

21    good deal out of this thing is what I am saying.

22              I noticed that you didn't mention the Canada stuff

23    any longer, and I know that has never been part of our

24    program really as a central element.

25              We get in because at one point it was going to

                                                                34

 1    require an export license and all that.  Mr. Kantor at one

 2    point in one of our discussions called the whole exercise

 3    the eternal attraction of the moth to the flame, but it is

 4    not economically or financially viable, the "can do"

 5    approach, right, so why does political capital continued to

 6    get burned over that issue?

 7              MS. HOLGATE:  Well, I didn't mention it because

 8    this briefing focuses on the U.S. program and certainly once

 9    we identified the consortium that included adequate reactor

10    capacity for the U.S. material the "can do" option became

11    not part of the U.S. program.

12              It is still on the table as far as the Russian

13    program goes, however, and your comment about

14    un-economicness of it applies to any MOX activity, frankly. 

15    We do not consider this to be an economic activity.  It

16    won't be an economic activity in Russia.

17              COMMISSIONER McGAFFIGAN:  It is even less

18    economic.

19              MS. HOLGATE:  That may well be, but this is an

20    arms control, nonproliferation mission that we are looking

21    at.

22              The challenge for the expansion plan in Russia is

23    severe.  There is a very short list of expensive,

24    technically-challenging and politically difficult options. 

25    We can expand current capacity in Russia, as I mentioned to

                                                                35

 1    the Chairman, in terms of maybe going to 40 percent in the

 2    LWRs, maybe going to 100 percent in the fast reactor.

 3              You can irradiate it in Europe.  You can irradiate

 4    it in Canada.  You can irradiate it in Japan.  You can build

 5    new reactors in Russia.  The Russians have their vision. 

 6    They would love another fast reactor.  We are pursuing the

 7    gas reactor technology as another possibility.  There's some

 8    half-built LWRs that might be able to contribute to the

 9    activity.

10              None of these are cheap, easy, or technically

11    obvious and so we are keeping all of them on the table for

12    the moment, and believe me, we are continuing to talk with

13    the Canadians about whether or not they are going to be

14    prepared to add reactor capacity to the Russian mission.

15              COMMISSIONER McGAFFIGAN:  Is the Russian MOX

16    program going to be dependent on the export of this German

17    facility to Russia?

18              MS. HOLGATE:  In terms of schedule, it will be. 

19    In terms of ultimate accomplishment, that equipment can --

20              COMMISSIONER McGAFFIGAN:  Right, but the schedule

21    we are currently working on in our process, your process,

22    presumes the German facility will at some point be exported. 

23    How soon?

24              MS. HOLGATE:  It does not need to be exported

25    until the 2002-2003 timeframe, which is a benefit in the

                                                                36

 1    sense that there is plenty of time to identify the

 2    mechanisms by which it will be provided to Russia, which is

 3    an upside, but the downside is that you have to sort of

 4    immobilize it if -- you have to put it into a form that it

 5    can be maintained and either stored in a safe way so it can

 6    be reconstituted in Russia.

 7              There is a difference of opinion about exactly how

 8    much of that Hannau equipment is applicable to the most

 9    efficient MOX design in Russia.  The U.S. view is that it

10    is, in terms of number of equipment, it is not very great,

11    but it is the type of equipment that has a very long

12    lead-time -- furnaces, mills, the presses and so on.

13              If these have to be designed, manufactured from

14    scratch, it will take significantly longer than moving that

15    equipment into a Russian facility.

16              COMMISSIONER McGAFFIGAN:  I have been focusing on

17    schedule issues on the Russian side.  On our side you in

18    passing -- one of the slides discussing it said your

19    assumptions about our licensing process.  I guess one of the

20    assumptions I am making given the public interest and

21    debates that have been held is that there will be hearings.

22              There will be a hearing on construction

23    authorization.  There will be a hearing on the license. 

24    There will be a hearing on individual license amendments to

25    use MOX fuel in reactors.

                                                                37

 1              This question really should probably go not to you

 2    but to our General Counsel, and this may be the last meeting

 3    we have with you because we become the Supreme Court once

 4    all those hearing start, but it will be an ex parte I guess

 5    public meeting would be okay, but we would have to be

 6    worrying about ex parte communications.

 7              Of these hearings, are these all prior hearings

 8    that they have to be completed before -- say, the

 9    construction authorization, does the construction

10    authorization hearing have to be complete before --

11              MS. CYR:  The construction authorization, yes.

12              COMMISSIONER McGAFFIGAN:  The license to operate,

13    does that have to be completed before?

14              MS. CYR:  I am pretty sure the license

15    authorization has to be, as well, both of them.

16              COMMISSIONER McGAFFIGAN:  And then irradiation in

17    reactor facilities --

18              MS. CYR:  The amendment -- it is not clear --

19    right.

20              COMMISSIONER McGAFFIGAN:  Okay.  This is not to

21    help the Russians, but it is probably the single largest

22    schedule uncertainty I think you face on our side are the

23    two hearings on the MOX facility and then potential

24    hearings, although they may not be prior hearings.

25              MS. HOLGATE:  That has certainly been my view,

                                                                38

 1    which is why I have been, in spite of the comparative

 2    uncertainty on the Russia schedule, I have been pushing our

 3    team to stay on the schedule to get to that licensing point.

 4              If we have to pause to keep our rough parallelism

 5    with the Russian facility, we want to pause with an existing

 6    license design with all of the regulatory pieces in place so

 7    that as soon as we -- as soon as the Russians catch up we

 8    can move expeditiously to that --

 9              COMMISSIONER McGAFFIGAN:  Okay.

10              MS. HOLGATE:  -- and so I am -- hopefully we have

11    captured, we certainly made those assumptions about public

12    hearings and that we have captured timing for that

13    effectively.

14              If it turns out we haven't, I agree --

15              COMMISSIONER McGAFFIGAN:  I don't think we have

16    successfully conducted a hearing in 12 months in the history

17    of the Agency so you may be being overly optimistic about

18    the construction authorization start.

19              MS. HOLGATE:  I have a reputation for that, I'm

20    afraid.

21              COMMISSIONER McGAFFIGAN:  You know, you should

22    talk to Judge Bollwerk and challenge him, and we just issued

23    an order at the start of the Turkey Point hearing.  That was

24    one of the things that we did I think earlier today.

25              We may well need an order at the start of this

                                                                39

 1    hearing to the Board laying out our expectations on schedule

 2    as we did in the Turkey Point order and as we have done in

 3    previous orders to give you a fighting chance to come

 4    somewhere close to the schedule that you would like.

 5              Thank you, Mr. Chairman.

 6              CHAIRMAN MESERVE:  Commissioner Merrifield.

 7              COMMISSIONER MERRIFIELD:  To follow up that, I

 8    would imagine the Commission if there were to be a hearing

 9    would impose the same level of expectation of discipline

10    with our board as we have in other areas recently.

11              I want to go back to the question that

12    Commissioner Diaz had, because it is still -- just so it is

13    clear to me, on the issue of the various facilities -- this

14    is on Slide 14 --

15              MS. HOLGATE:  Yes.

16              COMMISSIONER MERRIFIELD:  -- and I am also going

17    to be cross-referencing Slide 17 as well.

18              You have got three different facilities here.  The

19    pit disassembly and conversion facility is a facility which

20    I presume is one that the NRC would not have regulatory

21    oversight over?

22              MS. HOLGATE:  Correct.

23              COMMISSIONER MERRIFIELD:  Okay -- so we pick up

24    with the only one for which we do have regulatory oversight

25    under the Act is the fuel fabrication facility.

                                                                40

 1              MS. HOLGATE:  That's correct.

 2              COMMISSIONER MERRIFIELD:  And that is what is

 3    referenced on page 17?

 4              MS. HOLGATE:  Yes, sir.

 5              COMMISSIONER MERRIFIELD:  So the 32,000 square

 6    foot facility with conventional structures and so forth at

 7    hardened space, three affected areas.  That reference is

 8    only to the MOX fuel fabrication facility and does not

 9    include any areas associated with pit disassembly and

10    conversion?

11              MS. HOLGATE:  That is correct.

12              COMMISSIONER MERRIFIELD:  Okay.  Thank you.

13              Going to Slide 19, you have talked about how we

14    are going to be able to meet the two megaton yearly goal

15    with four identified Duke plants, two McGuire plants and two

16    Catawba plants.

17              You also spoke that you have plans to be able to

18    go to four metric tons.

19              How would that affect these four units and do you

20    have any early expectations of how you would be able to go

21    about doubling that capacity?

22              MS. HOLGATE:  Well, as far as capacity goes, we

23    will have capacity to deal with four metric tons of weapons

24    grade material within the fuel fabrication facility and the

25    immobilization facility combined, so the fuel fab facility

                                                                41

 1    is being designed to just over three metric tons per year.

 2              The reactors -- these four reactors, as I

 3    mentioned, get us to two metric tons per year if additional

 4    reactor capacity is identify to allow the Russians to expand

 5    their disposition rates we'll be looking potentially for

 6    additional reactors to expand the U.S. disposition rates to

 7    match that.

 8              We have -- I'm sorry?

 9              COMMISSIONER MERRIFIELD:  So were that to occur,

10    let's just play the assumption game, were that to occur,

11    would you expect that you would need to identify four

12    additional units in order to meet that doubling capacity or

13    is it some other number?

14              MS. HOLGATE:  I think it is probably less than

15    that, because we will be dealing with some of the material

16    through the immobilization pathway, so it is probably just

17    another two, maybe three, reactors.

18              COMMISSIONER MERRIFIELD:  Okay.  Would the amount

19    of MOX used at these currently identified facilities be

20    changed at all under that doubling?  Would they increase the

21    volume of MOX fuel, or is that a steady state capacity?

22              MS. HOLGATE:  Actually it is likely to decrease it

23    because we have only 24.9 or 24.-whatever tons of MOX to do,

24    and so if we are doing it quicker, then we will be doing

25    less of it in these reactors, total.

                                                                42

 1              We would be doing, you know, about the same annual

 2    rate but --

 3              COMMISSIONER MERRIFIELD:  Just so my question is

 4    clear, what I meant was at the annual rate --

 5              MS. HOLGATE:  Yes --

 6              COMMISSIONER MERRIFIELD:  -- would the amount be

 7    likely to increase at these units, not the total rate over

 8    the lifetime, but --

 9              MS. HOLGATE:  Understood.  We do not expect --

10              COMMISSIONER MERRIFIELD:  The amount of fuel

11    loaded into the reactor, would that increase were there to

12    be any increase in the rate?

13              MS. HOLGATE:  No.  We would not expect to increase

14    these reactor capacities in any way.

15              We would seek additional reactor capacity from new

16    reactors, yes.

17              COMMISSIONER MERRIFIELD:  Okay.  On Slide 19 you

18    also reference, maybe it was a little later, you reference

19    that you need to have some different security requirements

20    in terms of monitoring the fuel.

21              Do you or does Duke at this point have any

22    expectation of what types of changes in our processes would

23    be required in order to track that fuel in a way different

24    than what we do now?

25              MS. HOLGATE:  At the moment we are not -- we

                                                                43

 1    haven't worked out the details of those arrangements, either

 2    bilaterally with the Russians or ultimately trilaterally

 3    with the IAEA, so we don't have the details of that yet.

 4              We expect it can probably be managed just through

 5    serial number monitoring of the fuel assemblies themselves. 

 6    There's some specific requirements in the bilateral

 7    agreement about marking, making sure that we have

 8    traceability among the MOX elements.

 9              COMMISSIONER MERRIFIELD:  Would you expect that

10    that fuel would have to be isolated in a portion of the

11    spent fuel?

12              MS. HOLGATE:  That is certainly one way to do it. 

13    It is not clear that that will be required if there are

14    unique markings for the assemblies but we have not worked

15    out the details of that yet.

16              COMMISSIONER MERRIFIELD:  Okay, but for any other

17    purpose you would expect that that fuel either in its

18    pre-irradiation act or after it has been irradiated and is

19    sent to the spent fuel pool it would be treated like any

20    other --

21              MS. HOLGATE:  That is our expectation.

22              COMMISSIONER MERRIFIELD:  -- any other fuel? 

23    Okay.

24              The last question --

25              CHAIRMAN MESERVE:  Wait a minute.  Before

                                                                44

 1    irradiation, you don't have to treat it differently, I

 2    assume.

 3              MS. HOLGATE:  Well, the security issues will

 4    obviously be significantly different.

 5              COMMISSIONER MERRIFIELD:  Thank you, Mr. Chairman. 

 6    That is a good point.

 7              Finally, on Slide 6, and I want to go back to the

 8    HEU blend-down, and again this wasn't the primary focus of

 9    today's meeting, but I did have some initial questions on

10    that.

11              If you could just briefly again describe what you

12    mean by off-specification and what in any way you expect

13    that this fuel will have to be treated differently than the

14    traditional LEU fuel that is used in our reactors at this

15    point?

16              MS. HOLGATE:  We don't expect that it will be

17    treated in any -- significantly in any different fashion

18    from the LEU fuel.

19              COMMISSIONER MERRIFIELD:  You did mention

20    something about some higher enrichment.  Is that the --

21              MS. HOLGATE:  In terms of manufacturing, yes.

22              Dave, why don't you --

23              MR. NULTON:  Yes.  The isotopics are slightly

24    different for this off-spec material.  They are higher than

25    what would be allowable for the commercial fuel spec,

                                                                45

 1    primarily Uranium-236 I think in some instances maybe

 2    there's some Uranium-234 that is slightly above the spec --

 3    236 is an absorber, therefore you would have to up the

 4    enrichment of the fuel to overcome the absorption of

 5    neutrons by that material, so it is -- but it still stays

 6    below the 5 percent limit so we don't expect it to be

 7    handled any differently than other fuel.

 8              COMMISSIONER MERRIFIELD:  Thank you, Mr. Chairman.

 9              CHAIRMAN MESERVE:  Good.  I would like to thank

10    you very much.

11              We very much appreciate your briefing today and

12    particularly appreciate your comments about the NRC Staff. 

13    It was very welcome to hear that.

14              We look forward to continued interaction with you

15    as this project goes forward.  It's been very helpful.

16              MS. HOLGATE:  Thank you very much, sir.

17              CHAIRMAN MESERVE:  We are adjourned.

18              [Whereupon, at 10:07 a.m., the hearing was

19    adjourned.]

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