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UNITED STATES OF AMERICA
NUCLEAR REGULATORY COMMISSION
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BRIEFING ON CERTIFICATION OF USEC
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PUBLIC MEETING
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Nuclear Regulatory Commission
Room 1F-16
11555 Rockville Pike
Rockville, Maryland
Wednesday, August 28, 1996
The Commission met in open session, pursuant to
notice, at 10:00 a.m., the Honorable SHIRLEY A. JACKSON,
Chairman of the Commission, presiding.
COMMISSIONERS PRESENT:
SHIRLEY A. JACKSON, Chairman of the Commission
KENNETH C. ROGERS, Member of the Commission
GRETA J. DICUS, Member of the Commission
NILS J. DIAZ, Member of the Commission
EDWARD McGAFFIGAN, JR., Member of the Commission
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STAFF AND PRESENTERS SEATED AT COMMISSION TABLE:
JOHN C. HOYLE, Secretary
KAREN D. CYR, General Counsel
WILLIAM TIMBERS, President & CEO, USEC
WILLIAM AXELSON, Acting Deputy Administration,
Region II
CARL PAPERIELLO, Director NMSS
JOHN HICKEY, Chief, Enrichment Branch, NMSS
WALTER SCHWINK, Section Chief, Uranium
Enrichment Standards, NMSS
JAMES TAYLOR, EDO
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P R O C E E D I N G S
CHAIRMAN JACKSON: Good morning, ladies and
gentlemen.
I both want to welcome and to introduce to you
Commissioner Edward McGaffigan, who is in his first public
meeting as a commissioner.
Do you have any comment you would like to make?
COMMISSIONER McGAFFIGAN: Thank you, Dr. Jackson.
I just will say the same thing here I said
upstairs. I intend to try to be the best commissioner I can
be in the coming three years and ten months. I bring a
different perspective. All my friends upstairs are largely
from the Defense world. I hope that perspective helps
strengthen the Commission.
Thank you.
CHAIRMAN JACKSON: I had on a previous meeting
this week introduced our other newest commissioner, Dr. Nils
Diaz. I had introduced him in a smaller public meeting.
Would you like to make a comment?
COMMISSIONER DIAZ: I'd just like to say that I am
really glad I am no longer the union member of the
Commission.
[Laughter.]
CHAIRMAN JACKSON: Thank you.
This morning, Mr. William Timbers of the United
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States Enrichment Corporation and the NRC staff will brief
the Commission on the results of the certification process
for the USEC gaseous diffusion facilities, located in
Paducah, Kentucky and Portsmouth, Ohio.
The Energy Policy Act of 1992 and the USEC, that
is, U. S. Enrichment Corporation Privatization Act of 1996
placed the responsibility of certifying the gaseous
diffusion plants on the NRC. Since the 1992 act, the
Commission has established standards for the plants that
will protect public health and safety. We have also
established a certification process.
In September of 1995, USEC submitted a revised
certification application that is being addressed and is the
subject of discussion here. The staff has briefed the
Commission a number of times regarding the status of the
certification process. Following a previous briefing, the
Commission directed the staff to prepare a paper summarizing
the safety assessment and to brief the Commission when the
certification process was complete, but before issuing
certification. That is, then, the subject of this public
meeting and we look forward to hearing about the results.
I understand that copies of the staff papers and
charts are available at the entrances to the meeting.
Do any of my fellow commissioners have any
additional comments?
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[No response.]
CHAIRMAN JACKSON: If not, Mr. Timbers, you may
proceed.
MR. TIMBERS: Thank you, Chairman.
First of all, before I begin, I would like to say
a few remarks. First of all, I would like to introduce my
colleagues with me here today. First of all, is George
Rifakes, who is executive vice-president for Operations for
USEC and Rob Woolley, who is manager for Nuclear Regulatory
Assurance at USEC.
Second of all, as an executive in the nuclear fuel
business, it is tremendous from our industry standpoint to
be the first to sit in front of five commissioners for a
long time with the Nuclear Regulatory Commission. I think
that it is an indication of an additional commitment to this
arena and we are very pleased to be sitting here today and
presenting to the entire Commission.
I think the first time I addressed the Commission,
there were two commissioners. So, great progress has been
made in the last couple of years in that regard.
I would like to move to my remarks regarding our
observations about the regulatory process. I'd first like
to recognize Chairman Jackson, Commissioner Dicus,
Commissioner Rogers, Commissioner Diaz and Commissioner
McGaffigan and members of the NRC staff. I thank you for
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the opportunity to be here today and to offer first my brief
comments about the application process for certification of
our gaseous diffusion plants and second, to clearly state
USEC's position and philosophy as a regulated nuclear fuel
company under the NRC.
We have been actively a certification application
for the gaseous diffusion plants since 1994. In May of
1995, I appeared by the NRC Commission and committed USEC to
listen carefully to NRC's concerns and direction, to address
each and every issue raised by the NRC and communicate
completely and openly, directly with the NRC.
We have diligently pursued each of these
commitments over the past 15 months and we were met with an
equally diligent effort on the part of the NRC staff. Both
USEC and the Commission staff have worked very hard to get
here today. Our far-ranging and intensive interactions have
involved diverse experts from the Commission, the Department
of Energy, USEC, Lockheed-Martin Utility Services and
others, working together to conclude a unique undertaking.
There was no precedent for NRC certification and
regulation of an operating gaseous diffusion plant and we
share the challenges of developing a sound framework for
NRC's regulations of these plants. To be sure, none of the
participants thought this would be an easy or
straightforward process. It has, in fact, been a tough, a
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challenging and perhaps not surprisingly, even a bit
contentious process at times.
Since all of us have been working in uncharted
territory, differing perspectives, considerations and
constraints came into play. I'm gratified that all parties
involved have been able to constructively address and
reconcile these matters so that there is an agreement on the
methods by which we will continue the safe operation of the
plants. We are now on the threshold of completing the
initial step toward certification and moving to the next
stage, the operation of the gaseous diffusion plants under
NRC regulations.
The 110 reactors and nine fuel facilities that the
NRC regulates have nuclear operating histories, the past
experiences which have been well known to the NRC since
those facilities were first licensed and operated. The
Paducah and Portsmouth plants are the first facilities to be
already in operation prior to coming under NRC regulation.
I know the uniqueness of the situation is well understood.
Since we are bringing to you an existing history, we will
focus on what we want to be and the company that we will be.
There is an agreement that, historically, the
gaseous diffusion plants have been safely operated. I want
to assure you and the NRC staff that, first, we are
confident about our ability to continue such safe
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operations. Second, we are equally committed to working
with the NRC to secure and maintain your continued
confidence in us and in our performance.
I make this commitment not only because you would
expect no less from us, but also because of another
motivation as well. It makes good business sense. Safety
is good for the bottom line. It is a key element in our
overall business strategy. It has been today. It has since
we began our operation in 1993.
In implementing the mandates of the Energy Policy
Act, USEC's management developed a three-part commitment to
succeed. The three elements of that commitment are
performance, efficiency and safety. None can exist without
the others. Each depends upon the others for success.
Production, performance and efficiency keeps people employed
and makes profits, which are required to make investments
and safety possible. Safe operations protect the company's
assets and assures that efficiency and production goals can
be met.
Neither a facility owner nor the regulator should
focus on one element at the exclusion of the others. We
view them as inseparable. Safety is a continuous process.
It is not an end. We have and we will continue to work for
ways to improve.
We have, for example, reorganized the plants along
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functional lines. We have brought in individuals with
nuclear plant operating experience to complement experienced
plant staff.
Consistent with NRC's interests, we have enhanced
USEC's oversight of plant operations. Last fall, we
established a safety, safeguards and quality organization at
the site, reporting to Mr. Rifakes, USEC's executive vice-
president. This organization is responsible for assuring
appliance with applicable regulatory requirements and USEC
policies.
We have established new management expectations
about rigor and formality of operations. To further improve
plant safety and operations, we have formed a plant
performance review committee or PPRC, composed of outside
representatives with extensive nuclear experience, to
provide an objective external perspective to our senior
operations management. This committee has been meeting for
the past 18 months.
We have developed an action plan to provide a
sound basis for improvement of management controls to insure
safe operations of the plants. For example, we are
enhancing management controls over policy and procedural
programs, corrective action programs, performance measures,
audits and self-assessment and training programs. With DOE,
we are preparing a new accent analysis to serve as the
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technical baseline for the plants.
We have learned a great deal and we are improving
on our abilities. We are committed to constant review and
continuous improvement of our performance. We have been
consistent in our commitment to a vision for the future
operation of the plants. That vision must always start with
assuring the safety of the public, our workers and the
environment. There is no room for complacency. We will
continually work to maintain and approve margins of nuclear
and industrial safety.
I also want again to acknowledge NRC for its well-
earned reputation for excellence in the conduct of its
regulatory activities. I commit to you that we will be open
and responsive in all of our dealings with the Commission.
We have made commitments. We have made
commitments to ourselves. We have made commitments to our
employees, to our contractors and to you, the Commission.
We take the commitments that we have made in the application
and the compliance plans and the new technical safety
requirements very seriously. I want to reconfirm to you
that, our first and foremost commitment without reservation
of any kind is the safe operation of our plants.
We look forward to a successful and productive
relationship with you our new regulator, as we both work
relentlessly to maintain the same goal, the continued safe
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operation of the uranium enrichment plants.
Thank you.
CHAIRMAN JACKSON: Thank you.
Mr. Timbers, can you tell us a little about how
privatization has impacted the certification action or vice-
versa if at all with the linkages? Then I or, I believe,
Commissioner McGaffigan may have a follow on question for
you?
MR. TIMBERS: Most everything we do is
interrelated. There are many activities that we are
involved in. I have constantly maintained from the
privatization standpoint that these plants for 40 years have
operated safely. They have operated largely efficiently and
productively by the Department of Energy and its
predecessors.
Accordingly, from a privatization standpoint --
and I have made this to the representatives of the financial
community -- that it should not -- the certification process
is a continuum in the regulatory environment we work in and
should not have an impact on the privatization per se. We
are currently regulated at this moment by the Department of
Energy. We are regulated. The regulation will change under
NRC to a different form and a different regime. All that
will do is continue the safe operation and continue the
regulation in even a more rigorous manner than has been done
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in the past.
So, what it will do for privatization, it will not
impair the timing or the impact of privatization. What it
does do is provide investors greater insurance that the
plants will continue the safe operation.
I come from the private sector and I do emphasize
again that it makes good business sense to run safe plants.
We find that, from an investor's standpoint, from a
privatization standpoint, the implementation of the
certification process here now and the regulations from NRC
will only enhance the privatization efforts and the
privatization results of USEC.
CHAIRMAN JACKSON: I had a follow on question
having to do with your being the U. S. Government executive
agent relative to some issues with high enriched uranium.
I'm going to defer to Commissioner McGaffigan.
COMMISSIONER McGAFFIGAN: I'd like to just
explore something that was on the front page of the "New
York Times" today. It probably brings my national security
bias out in the open right at the outset. That is one of
our functions as a commission is to protect the national
security as well as public health and safety. It strikes me
that, Russian highly enriched uranium makes it very
difficult for you to make a profit.
The "New York Times" article talks about an
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incident that occurred earlier this summer where our --
Senator Domenici managed to get you all to buy some Russian
highly enriched uranium which you were reluctant to by,
according to the article, because of its threat to profits.
Have we set you up for failure? Can you possible
make a profit if we do the right thing by our national
security interests and we buy the Russian highly enriched
uranium in the quantities that we should buy it?
I prefaced that by also saying, last month, the
Nunn-Lugar-Domenici amendment passed the Senate 98 or 99 to
nothing and I think that the sentiment in the Congress to
deal with the post-cold war effects of vast amounts of
Russian weapons material being available is self-evident.
The Congress is intent on working on this.
So, how do you make a profit when you have this
vast amount of Russian HEU to be blended down and which
Congress probably, if not now maybe next year, will tell you
that you need to buy in quantity?
MR. TIMBERS: Well, I'm glad you asked the
question.
I guess first of all, one of the first things
someone told me when I came to Washington is, the news
reports written in any kind of newspaper, in due deference
to the press, are generally about 50 percent accurate.
There is another 50 percent that has not been shown. I
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might quibble with the percentages on this article, but I
think that premise still holds true here.
Let me state a couple of things first.
This Russian HEU deal, this megatons to megawatts
deal is working. It has been proven to be extremely
successful. I think it is one of the great national policy
successes in the last three years. There are a lot of
commentators, pundit, professors that would like to create a
Cassandra environment. But Commissioner, let me say
clearly, it isn't there.
There is a contract that we operate under that
stipulates the maximum amount of quantities to be brought in
in any given year. We are exceeding them. We are exceeding
those. We are exceeding the quantities the contract calls
for. We are bringing in the material consistent with
national security interests.
I think that at this point -- in the first year,
we brought in six metric tons of highly enriched uranium.
That was in 1995. In 1996, we will bring a total contract
of 12 metric tons. I would point out to you, Commissioner,
the contract called for ten. We are going to bring in 12
this year. We are under discussions of what the delivery
should be in 1997.
Now, let me make something very, very clear.
We are executive agents for the United States of
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America. I don't have a foreign policy desk. I don't have
a Russian desk in my company. Therefore, we do not set
foreign policy. We act under the guidance and direction of
the United States Government.
Now, in the discussions that go on with the
Russian Federation, I don't particularly care to negotiate
those discussions in the "New York Times," but we do talk at
all times with the United States Government and related
agencies on this. I think it is clear to say that, in any
discussions we have with the Russian Federation, we brief
the government before the meeting. We brief the government
during the meeting and we brief the government about the
results.
So, the implications are referred to in this
article, that we are making unilateral decisions, that is
not the way it works. Everybody knows who the executive
agency works and what our responsibilities are and how we
have conducted our affairs knows that, the 50 percent error
in the "New York Times" applies certainly to that arena
there.
You have asked also, have we set you up for
failure. This is a difficult issue. It always has been a
difficult issues, but we at USEC have faced difficult issues
since we began in this organization. Just the very nature
of being certified has been a more difficult process. It
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has been a longer process than we all anticipated. These
kinds of challenges are consistent with our operations.
There is a long commitment by myself personally
and by USEC as a corporation to the successful
implementation of this deal. We think it makes good
business sense. We think it makes good national policy
sense and it happens to be a fortunate confluence of both of
those issues. To bring this material into the marketplace,
we are the only entity that has the financial resources to
provide the stability of this deal. We are the only entity
that has the technical resources to solve the problems that
have been inherent in creating a brand new transaction like
this. We are the only entity that has the market
penetration to be able to bring the material in and sell it
out into the marketplace. That is why we are the executive
agent.
Now, let me just give you an idea about the
technical side.
Again, the commentaries, the commentators, the
pundits and the professors always were wringing their hands
about why wasn't this thing done. Why wasn't this thing --
let me just move all this stuff out of Russia and put it
here in the United States.
Well, unfortunately, it always easy to sit in an
ivory tower and make those kinds of observations. But this
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had never been done before. It took us over a year meeting
bi-monthly with Russians to work out the technical
considerations about how this was to be done. Let me give
you an example.
The Russians asked us -- they said that we cannot
meet ASTM specs, which the contract called for. Would you
mind if we gave out out-of-spec material? We asked them,
well, what is that out-of-spec material? Well, it has
plutonium in it. I thought, this is a little problematic.
Now, the professors in the ivory towers could say, well,
okay, they just decided to say no. But what we did do, we
didn't do that.
We met bi-monthly with the Russians that first
year and came up with ways and used our technical resources
to work with them to find a way to bring the material in-
spec. It is delivered today according to ASTM regulations.
It took us a while to do that. It wasn't easy. That is
just one example of meeting the technical capabilities to be
able to meet this.
The introduction of this material into the
marketplace makes good business sense to us. You know, we
are in this tough situation to try to run a business, a
regulated business but still maintain this responsibility.
It is clear that this is an imperative for national
security, that the material come out of Russia, that this
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deal work. We believe that. If we are not involved in it,
if we're not involved in it, we're going to see the material
on the other side of the fence.
We could see the material from our purchasing it.
If we don't purchase it, someone else is going to purchase
it. We are going to see it in the marketplace.
Now, if you were involved with a commodity and you
had the opportunity to take this commodity, purchase it and
you had the financial wherewithal and you had the technical
capability and you had the market penetration to be able to
introduce it into the marketplace and do it in a stable way,
provide stable pricing, which is a requirement under the
suspension agreement and do this in a way that protects the
national security, you'd rather do that than have it
introduced in an ad hoc manner that has impacts in terms of
the marketplace, price stability.
I think that it is clear that it makes sense to us
that we continue to serve in that role. We want to serve in
that role. We think it makes good business sense because if
we don't serve in that role, we are going to see it in the
marketplace in any event.
CHAIRMAN JACKSON: Thank you.
COMMISSIONER McGAFFIGAN: Could I just ask one
thing?
CHAIRMAN JACKSON: Go ahead.
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COMMISSIONER McGAFFIGAN: This really maybe goes
to our own staff, but there clearly is a dialogue. You've
talked about briefing people before, during and after
meetings with the Russians. There appears to be a dialogue
that goes on, if this is 50 percent correct, perhaps with
the senior levels of the Department of Energy as to how much
you should exceed the contract this year by.
When you cease to be regulated by DOE and come
over to us, do we then become the entity that engages in
that dialogue --
MR. TIMBERS: No, no.
COMMISSIONER McGAFFIGAN: -- or will it continue
to be the Department of Energy and the Department of State?
MR. TIMBERS: It is actually led by the National
Security Council and our interface on a day to day basis is
with the State Department. We are supported by the
Department of Energy. So, those are the three that are
involved in it.
There has been completed a memorandum of agreement
between USEC, the State Department, National Security
Council and Department of Energy exactly about how that
dialogue will occur, exactly how the interface would be
conducted and also what our rights and responsibilities are
and what the rights and responsibilities of the United
States are, how changes could be made. It has all been laid
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out in the memorandum of agreement.
So, therefore, it does not involve -- in that
regard, it does not involve the NRC. I think that all this
memorandum of agreement has done is codify our existing
practices of dialogue, communication and consultation.
CHAIRMAN JACKSON: I think we will go on.
Commissioner Rogers?
COMMISSIONER ROGERS: I am curious with respect to
what you anticipate DOE's role will be in your long term
future in connection with any of the technical that would be
of concern to us from a safety point of view?
MR. TIMBERS: I think I would defer to George
Rifakes on that question.
CHAIRMAN JACKSON: Would you speak at the podium
or you can come to the table.
MR. RIFAKES: As you know, we are still dealing
with HEU. That is a DOE responsibility. In NRC space, we
are limited to dealing with material that is ten percent or
less enriched. Anything in excess of that, DOE will
continue to be the regulator.
Additionally, there are DOE operations ongoing at
the sites. We have an interface with DOE to the extent that
interface enters NRC space, obviously the relationship is
there. Finally, DOE is the landlord and they have a say on
matters of safety in the landlord's sense that we are going
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to have to comply with.
So, the relationship, while NRC will be the
nuclear regulator with respect to the material we are
producing, the relationship is going to be a tripartite
relationship for a long time.
COMMISSIONER ROGERS: Will you have to depend upon
DOE for doing analyses to back up your responses to any
questions that NRC may have?
MR. RIFAKES: We don't anticipate that.
COMMISSIONER ROGERS: You will be able to be self-
contained then?
MR. RIFAKES: Yes, self-contained or with
contractors or through contractors just like all your other
licensees are.
COMMISSIONER ROGERS: Well now, since you have a
combination of DOE-regulated and NRC-regulated activities on
site, how do you visualize keeping those segregated in the
sense that, if you really got two styles of regulation and
they are always going to be somewhat different, how do you
keep those from getting mixed?
MR. RIFAKES: Well, there are two styles of
regulations. There are two areas where regulation occurs.
Staff, your staff and our staff, spend countless hours
trying to delineate those in order to assure that we do not
do DOE-type activities in a manner that is violative of NRC
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requirements. I think that has been pretty well handled and
it is well documented in the application and in the
responses to questions.
COMMISSIONER ROGERS: Roughly what percentage of,
say, your total activities would be regulated by DOE and
what would be regulated by NRC?
MR. RIFAKES: Long run, it is going to be a very
small percentage. Today, I would believe it's going to be
less than ten percent.
As you know, we are handling some HEU at
Portsmouth. We are feeding it into the cascade in order to
change its identity to LEU. That is a DOE requirement. The
very massive nature of our operations and of the role of NRC
within those operations leads me to believe that it would be
clearly less than ten percent, maybe even less than five.
Rob, do you want to venture a guess in there?
MR. WOOLLEY: I agree with you.
MR. RIFAKES: It's going to be very small and over
time, as the HEU is disposed of, that will get less and
less. Hopefully, some day, there won't be any.
COMMISSIONER ROGERS: Fine, thank you.
CHAIRMAN JACKSON: Commissioner Diaz?
COMMISSIONER DIAZ: Yes, I guess we're going to
talk about the same issue now that Commissioner McGaffigan
brought it up. From a safety point of view, if we start
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mixing large amounts of HEU from Russia, is the variability
and the composition of the materials -- which I am sure you
are experienced -- is it going to pose longer term safety
concerns as far as fuel? Are your plans going to be able to
essentially homogenize it to the point where it will be
indistinguishable?
MR. TIMBERS: We receive -- actually, it is always
a misnomer to talk about the Russian deals and HEU deals,
because we receive low enrich uranium, LEU FOB St.
Petersburg. The blending down occurs in Russia. So, the
transportation on the high seas and our receipt of it is in
low enriched uranium just like we produce, at specific
assays that we request. This is in the neighborhood of four
to five percent just like we produce out of our plant.
When I say that we have worked with the Russians
to meet the ASTM specs, it was very important to the long
term success of this deal over 20 years that, this material
be viewed in the international marketplace as transparent to
U. S. material.
So, what we are supply is a commodity that is
produced in Russia, derived from nuclear weapons HEU. So, I
do not think those concerns that you have described apply
here because we are going to -- we are receiving and have
been receiving since June of 1995 a commodity that looks and
acts just like the material that we have. There are small
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isotopic changes than what we normally produce. That is
within the specifications of our contracts with our
customers.
COMMISSIONER DIAZ: Yes.
I'm not concerned about the isotopic enrichment of
the uranium. I am concerned about contamination with other
materials.
MR. RIFAKES: The material meets the ASTM specs
for commercial nuclear fuel. Everything they have delivered
has been well within that specification.
COMMISSIONER DIAZ: All right.
MR. TIMBERS: That is why we worked a year with
the Russians to insure that did occur. If, in fact, we just
said, okay, you don't have to meet ASTM, we would have a 20-
year problem. Now, we have spent a year solving that
problem, which helps put the deal on a stable, technical
basis.
COMMISSIONER DIAZ: Okay, thank you.
CHAIRMAN JACKSON: Yes?
COMMISSIONER McGAFFIGAN: Just to follow up on
Nils, you just mentioned a moment ago that you have some HEU
at Portsmouth. Is there some HEU that comes in as HEU that
is not blended down?
MR. TIMBERS: No, this is U. S. HEU.
COMMISSIONER McGAFFIGAN: U. S. HEU, okay.
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So, that you are doing for the U. S. Government?
MR. TIMBERS: Yes or material that has been
transferred to us.
I would like to just make one last comment here.
CHAIRMAN JACKSON: One last comment.
MR. TIMBERS: It is about the 50 percent rate and
I think it is good to put this into context.
I personally volunteered and passed on a message
to the "New York Times" reporter, if you would like to talk
to me. He refused. He did not want to talk to me. So, any
time someone writes an article of that sort, where they do
not want to talk to the one who is in charge of one side of
the transaction and only is giving the view of a few people
out of Cambridge, Massachusetts, I think it falls within the
50 percent test.
CHAIRMAN JACKSON: I think we are not here to
debate the quality of press reporting nor are we here to
debate U. S. foreign policy within the USEC context. So,
I'm going to take it back down to a very basic set of
questions.
MR. TIMBERS: We welcome that and we welcome our
purpose in being here and that is, certification of our
gaseous diffusion plants.
CHAIRMAN JACKSON: Well, let me just ask you a
couple of straightforward questions.
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My staff tells me that different companies within
the Lockheed-Martin group have contracts to operate the
gaseous diffusion plants with the USEC on the one hand and
also to prepare the upgraded safety analysis reports for DOE
on the other. Is the separation of the companies within the
group sufficient to avoid any potential conflicts of
interest?
MR. TIMBERS: Well, George, do you want to?
MR. RIFAKES: They have done more than just build
a Chinese wall between these two companies. They act very
competitively for everything. When we came over and did the
transition, Lockheed-Martin Utility Service was advising us.
Energy Services, which is the DOE company, was advising them
and I can tell you, it was a very, very tough negotiation.
Neither side gave any quarter and they have acted that way
ever since.
CHAIRMAN JACKSON: Okay, thank you.
If NRC certifies the two plants, what assurances
do we have that you will, in fact, meet your commitments and
timetables during the transition period? Let me give a
little bit of specificity to it.
The NRC staff has mentioned the number of
technical areas that have yet to be resolved. Also, the
upgraded safety analysis report is likely to add to the list
of needed improvements. These actions do have costs
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associated with them, in fact, can be costly.
Has the privatization affected or will it affect
your ability or your decision-making relative to the
scheduling of these safety improvements?
MR. TIMBERS: Well, there are two things. One is
the cost and the other is the scheduling relative to
privatization. Again, we think the plants are fun safely.
DOE currently regulates them. There is no question in terms
of the exposure and safety to the public employees or to the
environment. We view this as an ongoing, continuing basis.
As somebody who has had experience on the other side of the
fence, I do not necessarily see any difficulty in a
privatization that is actually consummated during this
transfer period.
In terms of the costs, the costs in terms of
completing this regulatory process has been worked out with
the DOE representing the United States Government about how
the costs are allocated between the U. S. Government and
USEC, as a private corporation. So, on a going forward
basis, a company or investors who would purchase USEC would
understand clearly that delineation of costs and
responsibilities.
CHAIRMAN JACKSON: Okay.
Can USEC negotiate the upgraded safety analysis
report with DOE or must you accept whatever DOE provides.
28
MR. RIFAKES: I'm not sure negotiation is a fair
characterization. DOE has the responsibility to prepare it.
We, like Commission staff, have opportunities to comment and
where we have disagreement, if we have a technical basis for
that disagreement and it is sound, I'm sure that DOE would
accept a change.
CHAIRMAN JACKSON: I actually have a question for
DOE, whoever the representative is in the audience. Is the
upgraded safety analysis report on schedule? Will it
definitely be issued in February of next year?
MR. PARKS: I am Joe Parks, Oak Ridge Operations
Office.
The answer is yes to that question.
CHAIRMAN JACKSON: My understanding is, we are to
get copies of that from you at the same time that it is
originally provided to USEC; is that correct?
MR. PARKS: We have made that commitment.
CHAIRMAN JACKSON: Okay, thank you.
Any further questions from the commissioners?
[No response.]
CHAIRMAN JACKSON: If not, thank you, Mr. Timbers.
I think we will hear from the NRC staff.
MR. TIMBERS: Thank you.
CHAIRMAN JACKSON: Mr. Taylor.
MR. TAYLOR: Good morning.
29
With me at the table today are Carl Paperiello,
director of the Office of Nuclear Material Safety and
Safeguards, Bill Axelson on my far right, acting deputy,
Regional Administrative Region III, John Hickey, the chief
of the Enrichment Branch and Walt Schwink, the section chief
for the Enrichment Standards Section.
Also, I would like to note that our two senior
residents are here today. I will ask them to stand, Charlie
Cox from the Portsmouth plant and Ken O'Brien from the
Paducah plant.
The staff has been working for over three years to
establish the regulatory framework and complete the initial
certification of the USEC enrichment plants. When we
briefed you last March, there were still some significant
safety issues which required resolution before the staff
could certify the plants. Those issues have now been
satisfactorily addressed by USEC.
As described in our Commission paper, SECY 96-
180, the staff is now prepared to move towards the issuance
of the initial certification based on its finding that there
is reasonable assurance that USEC can continue to operate
the enrichment plant safely and in compliance with NRC
requirements.
Dr. Paperiello will now brief you on how the staff
has reached its conclusions and how it plans to continue to
30
implement the initial certification process.
Carl.
DR. PAPERIELLO: Good morning.
After the Commission briefing in March and the
status of the certification of U. S. Enrichment Corporation,
the Commission directed the staff in a memorandum dated
April 3rd that, after the certification process is completed
and prior to issuing the certification, the staff is to
prepare a paper summarizing safety assessments and be
prepared to brief the Commission. The Commission urged the
staff to move ahead as expeditiously as possible, but at the
same time, to insure that safety issues were not overlooked.
The methodology used to resolve significant safety
issues and how it unfolded into the compliance plans in the
certification process needed to be clearly delineated and
documented. My staff and I are here to respond to these
directions.
We will review the legislative direction from
Congress, particularly since the USEC Privatization Act of
1996 passed since our last briefing. We will discuss our
implementing regulations and briefly review the history of
certification activities. I will then ask Mr. Axelson to
briefly discuss Region III's activities at the gaseous
diffusion plants. Then I will discuss the resolution of the
significant safety issues raised at the last Commission
31
meeting. We will discuss our interaction with other
government entities and the public and then I will discuss
the basic mechanics of the issuance of the certification
documents and the actions.
Can I have slide number two?
[Slide.]
DR. PAPERIELLO: The Energy Policy Act of 1992 did
a number of things relevant to the gaseous diffusion plants.
U. S. Enrichment Corporation was established to lease and
operate the gaseous diffusion plants. The Department of
Energy was responsible for preexisting conditions at the
gaseous diffusion plants and any costs associated with those
preexisting conditions.
The law applied the antitrust laws, OSHA
requirements and Section 206, reporting defects, what we
would call Part 21 under our regulations and Section 211,
employee protection of the Energy Reorganization Act to the
U. S. Enrichment Corporation.
The NRC was required within two years to establish
standards for certification of gaseous diffusion plants.
Annually, the NRC, consulting with DOE and the EPA must
report to Congress on the status of health, safety and
environmental conditions at the gaseous diffusion plants.
NRC shall establish a certification process to ensure U. S.
Enrichment Corporation complies with NRC regulations.
32
The law provided for annual certification of
gaseous diffusion plants. It assigned environmental
regulation of the gaseous diffusion plants to the United
States Environmental Protection Agency and authorized U. S.
Enrichment Corporation to be the U. S. agent for Russian
special nuclear material.
The certification process was established by the
Commission in Title 10, Code of Federal Regulations,
Part 76, issued in September of 1994. The regulations
implement the legislation. For example, it requires us to
consult with the EPA prior to doing the certification. It
basically, besides our normal requirements, broadens all the
details of the legislation. It provided for a U. S.
Enrichment Corporation application for certification and a
DOE-prepared compliance plan.
We have reviewed the submittals that were required
by 10 CFR 76. We have held the public meetings required by
the regulation. We have solicited input from the
appropriate federal, local and state governmental
organizations that are required by Part 76. We have
prepared a compliance evaluation report, detailing how the
application and the compliance plan meets our regulations.
We are at the point to issue an affirmative decision on the
certification.
May I have the next line?
33
The latest legislation provides for the
privatization of the United States Enrichment Corporation.
There are some things that changed.
It extends the NRC certification interval for up
to five years. It gives the NRC exclusive responsibility
for regulating radiological hazards. OSHA has the
responsibility for non-radiological hazards and requires a
memorandum of understanding between OSHA and the NRC. It
gives the NRC civil penalty authority. It prohibits foreign
control of U. S. Enrichment Corporation.
It authorizes one-step licensing of AVLIS, atomic
vapor laser enrichment. It specifies that judicial
challenges to the NRC certification decisions and rules will
be in the Federal Courts of Appeal rather than the federal
District Courts. It requires upon request that DOE accept
low-level waste for disposal from the gaseous diffusion
plants and other NRC-licensed enrichment facilities.
It does not appear to affect the certification
schedule. We are working to implement the provisions of the
Privatization Act, such as, changing the enforcement policy
to recognize the -- it will apply to the gaseous diffusion
plants and to amend Part 76 to change the annual
certification period and other provisions of the act.
Can I have the next slide?
[Slide.]
34
DR. PAPERIELLO: The original certification
application was submitted in April of 1995, but found so
inadequate that it was not accepted for review. After
working with the USEC staff for several months, the
applicant resubmitted a revised application in September of
1995. After review and additional revision, the application
is now considered complete and acceptable.
The initial compliance plan was submitted in
November of 1995, but USEC also submitted numerous
exceptions to the plan. After several revisions, we find
the compliance plan is now acceptable.
As part of the application, the U. S. Enrichment
Corporation has submitted technical safety requirements.
These will replace the DOE operational safety requirements
currently in place. These requirements play about the same
role as technical specifications in reactor licensing and
include safety limits, limiting conditions for operation,
surveillance requirements, administrative controls and many
of the same things that one finds in reactor technical
specifications.
Because the plants currently operate under DOE
requirements, they will do so until the NRC assumes
jurisdiction.
I would now like to turn over to Mr. Axelson, the
acting deputy regional administrator for Region III, who
35
will briefly discuss regional activities.
MR. AXELSON: Thank you, Carl.
Some additional background information. I will
briefly discuss what the Region's role has been since the
Energy Policy Act of 1992. First, we were extensively
coordinating all of our regional activities with
headquarters. We staffed each gaseous diffusion plants with
a senior resident and a resident inspector and we organized
a regional branch to be in alignment with headquarters
including consolidation of all other Region III fuel
facility activities into one branch.
During this interim period, we provided extensive
training to our inspection staffs, both headquarters and
region, including special training for some of our key
senior managers. We trained on unique areas of gaseous
diffusion operation, chemical safety, UF6 handling safety,
cylinder testing and certification inspections, some new-
type training that we were not familiar with. Our resident
inspectors have been extensively involved with the
certification process, assisting headquarters staff
continuously. We think the resident inspectors brought
field operational insights into the certification process
which added value.
Our inspection staffs, both headquarters and
region, have done some limited benchmarking at other fuel
36
facilities. We senior residents routinely visit both
facilities as benchmarking and also visited a gaseous
diffusion plant in France. We plan to do some more
benchmarking at other fuel facilities in the U. S.
During the interim period, we spent considerable
time in the field learning the gaseous diffusion plants and
generally assessing plant performance. Our future
inspection focus, both the region and headquarters, will be
closely monitored to compliance plan, closure and evaluate
the facility's readiness to make the transition from DOE to
NRC regulatory jurisdiction over the next 180 days. We will
be paying particular attention to USEC training and
implementation of the new tech spec requirements.
Thank you, Carl.
DR. PAPERIELLO: Thank you.
Can I have the next slide?
[Slide.]
DR. PAPERIELLO: At our March 1996 briefing, we
told the Commission there were significant safety issues
that still required resolution. These involved worker
protection, quality assurance, technical safety
requirements, responsibility for DOE material in USEC lease
space, elevated enrichment levels, seismic safety and the
safety analysis report upgrade. They have been resolved.
The Commission paper presents in the attachment how they
37
were resolved. Let me briefly discuss them.
Worker protection. We have required USEC to have
technical safety requirements to ensure protection of the
workers at the gaseous diffusion plants from death or
serious injury, from potential accidents involving either
uranium hexafluoride or hazardous chemicals or potential
criticality. Essentially, the way that has been done is,
technical specifications that relate to either releases of
material or alarms or alarms not functioning, in addition to
certain mechanical actions, also have limits and
specifications on what employees are allowed to do, areas
they are allowed to enter, protective equipment they must
use.
For example, if there is a work area in which
alarms are inoperable. So, that is basically how the worker
protection is worked into the technical safety requirements.
Another issue is quality assurance. Part 76
requires a QA program for safety systems and their support
systems. Revision 2 of the application, did not provide
adequate QA for certain safety systems, such as those
concerning uranium hexafluoride confinement, criticality
protection, prevention and fire protection. The QA program
described in the current versions of the application and the
compliance plan is acceptable to the staff and has
application of QA to these areas.
38
Third, technical safety requirements. Many of the
technical safety requirements that USEC submitted in earlier
versions of its application were not acceptable. They were
the subject of numerous meetings and, frankly, it was the
last issue that was closed out. It was not until earlier
this month that we had a satisfactory set of TSRs. I asked
the staff how the numbers compared and I have some detailed
numbers, but roughly there are about half as many TSRs as
there were OSRs.
Of course, a number of the OSRs dealt with what
DOE refers to as asset protection and not just safety
issues. A number of what was in the OSRs wound up going
into procedures rather than in the TSRs.
CHAIRMAN JACKSON: Carl, perhaps you'd better for
the Commission's edification delineate what the TSRs are.
You sort of mentioned --
DR. PAPERIELLO: They are technical --
CHAIRMAN JACKSON: -- versus the OSRs.
DR. PAPERIELLO: Okay.
Operational -- DOE had operational safety
requirements on the gaseous diffusion plants. They, again,
were like the technical specifications for a reactor,
although some of them don't -- not just with safety, but
also the protection of their investment in the plant. Of
course, they map one on one. If you read them, they are
39
like tech specs. They are multiple pieces. They are not an
exact mapping. We wind up with about half as many TSRs or
tech specs as we had OSRs.
Is that responsive?
CHAIRMAN JACKSON: I thought you just said the
OSRs were like tech specs.
DR. PAPERIELLO: Well, they did not have tech
specs, but they act like tech -- there are limits. On a
reactor, you have a safety limit. You have a limit --
CHAIRMAN JACKSON: No, I understand that.
The OSRs are like tech specs?
DR. PAPERIELLO: Right.
CHAIRMAN JACKSON: The TSRs are?
DR. PAPERIELLO: Sort of like tech specs, too.
CHAIRMAN JACKSON: Also.
DR. PAPERIELLO: Only in DOE's space, they are
OSRs.
When we started this in April of 1995, we had only
one --
CHAIRMAN JACKSON: I'm sorry.
[Laughter.]
DR. PAPERIELLO: I'm sorry.
CHAIRMAN JACKSON: Never mind. I hope we have the
picture.
DR. PAPERIELLO: The TSR for autoclaving,
40
autoclave testing was of particular concern. This was
discussed at the last Commission meeting.
CHAIRMAN JACKSON: Yes.
DR. PAPERIELLO: Autoclaves are used to safely
confine uranium hexafluoride cylinder-related accidental
releases. While the cylinders are heated to feed their
contents into the enrichment processor, carry out sampling
out transfer operations. Essentially, it is a steam jacket
around a big cylinder. There are 13 autoclaves at
Portsmouth and 22 at Paducah. The autoclaves have not been
subject or had not been subject to tests at accident
pressure since they were initially installed.
The safety concern is whether autoclaves can
perform as assumed if there is an accidental release of UF6.
At issue was the proposed pressure level of tests which was
only a fraction of the accident pressure and the frequency
of the tests. USEC initiated limited confirmatory tests at
accident pressures in early spring of 1996 and will run such
tests quarterly. However, staff deemed these tests
inadequate because certain important valves were not being
tested in the current equipment configuration.
The compliance plan now commits U. S. Enrichment
Corporation to expeditiously modify the autoclaves and
testing procedures so that adequate tests can be performed.
CHAIRMAN JACKSON: What does expeditious mean?
41
DR. PAPERIELLO: Mr. O'Brien, you have the
details.
MR. O'BRIEN: Ken O'Brien, I'm the senior resident
at the Paducah plant.
Expeditiously means it will be accomplished -- the
time table for Paducah is by March of this year when we take
over. The time table for Portsmouth, for some of the other
valves is a little longer. However, they have developed
another methodology which will find with a reasonable
assurance that they will operate in the interim.
DR. PAPERIELLO: DOE material in USEC lease space.
For many years, certain DOE-owned materials have been stored
in parts of several process buildings of both gaseous
diffusion plants. These materials include both
radioactively contaminated wastes and potentially
salvageable equipment and materials. In some cases, the
quantities of uranium are undetermined. The matter will be
resolved by installing appropriate signs and markers to
identify and delineate such areas.
The areas --
CHAIRMAN JACKSON: How many such areas are there?
DR. PAPERIELLO: Mr. O'Brien, what are the areas
that are going to be deleased and returned?
MR. O'BRIEN: Throughout all the buildings that
they use for the cascade, there are a multitude of areas.
42
They are anywhere from ten square feet to hundreds of square
feet that encompass previously maintained materials or old
equipment or wastes that the DOE presently has and have to
take care of.
CHAIRMAN JACKSON: Are there going to be any
efforts to consolidate the material or for DOE to remove the
material?
MR. O'BRIEN: Right now, the issue of removing it
is a DOE issue. The issue of consolidation is one they have
been looking at as part of the overall process of looking at
it. They have actually done some repackaging of some of the
material to make it easier for both maintaining it and
inventory on an ongoing basis.
CHAIRMAN JACKSON: Is there any possibility of any
of that material radiologically contaminating other areas
under USEC's control?
MR. O'BRIEN: That is a sensitivity that we have
more monitoring in on an ongoing basis, based upon
inspection activities in the field.
CHAIRMAN JACKSON: If that is the case, who then
would be responsible for the cleanup and how would we
enforce it?
MR. O'BRIEN: Right now, DOE and USEC have a memo
regarding the interaction between the two different
facilities and the material stored in the facilities. That
43
would be something that they would have to work out between
the two of them to ensure that safety is maintained, which
is discussed in the certification process.
CHAIRMAN JACKSON: Has the material been
completely characterized?
MR. O'BRIEN: It depends on your definition of the
word characterized.
CHAIRMAN JACKSON: You can use your definition.
[Laughter.]
MR. O'BRIEN: Based upon my definition, there is
an adequate understanding right now of what the material is
to ensure that there is not an immediate safety concern,
yes.
CHAIRMAN JACKSON: Okay, thank you.
MR. O'BRIEN: You are welcome.
DR. PAPERIELLO: The areas in which DOE material
is stored will be deleased and returned to DOE, which has
agreed to assume responsibility including regulatory
responsibility for the areas for the contained material.
Note that, DOE still owns the site and continues to conduct
its own self-regulated operation separate from USEC in both
leased and deleased areas. This situation will require
special attention and coordination after certification to
assure that DOE activities do not negatively impact the
safety of USEC operations regulated by the NRC.
44
Elevated enrichment levels. USEC has requested
the certification of the Portsmouth plant at uranium
enrichment levels of ten percent or less. By doing so, it
avoids more criticality protection and safeguards, physical
security and material control and accountability
requirements accompanying possession of highly enriched
uranium. Currently, unplanned enrichment in small amounts
between ten and 20 percent is occurring in the process at
the Portsmouth gaseous diffusion plants, caused by both the
USEC enrichment process and DOE blending down of HEU.
You insert the material into the cascade and with
the way the cascades work, this is unavoidable. The issue
is resolved by having USEC agree to establish and maintain
additional safety and safeguards measures as long as the
down-blending program continues in that portion of the
cascade where this is occurring.
Seismic safety. In 1995, DOE identified
structural weaknesses in two of the four main processing
buildings at the Paducah plant. Now, the Paducah plant is
located in the New Madrid area, you know, in that part of
the United States. DOE ordered USEC to make plant
modifications to improve seismic capability. Compensatory
safety measures were also ordered, including operating
pressures and personnel access restrictions until plant
modifications could be completed.
45
Current schedules call for completion of plant
modifications by late 1997. Since the modifications will
not be completed before initial certification, the
continuation of interim and compensatory measures and
completion of plant modifications have been incorporated
into the compliance plan for the Paducah plant.
CHAIRMAN JACKSON: Excuse me, Dr. Paperiello.
Did the NRC staff conduct a separate analysis of
the DOE-ordered modifications and the interim compensatory
measures? I mean, how did we determine that the
modifications and interim measures were adequate?
DR. PAPERIELLO: John?
MR. HICKEY: Well, we did not conduct a completely
independent analysis, but we reviewed the analysis that was
done and satisfied ourselves that it was a reasonable and
thorough analysis and that the modifications were
appropriate and that the plan was appropriate.
CHAIRMAN JACKSON: So, we determined that these
modifications and changes were sufficient for Paducah to
operate until this December, 1997 updated seismic hazard
report?
MR. HICKEY: Correct.
COMMISSIONER ROGERS: Just on that, in reading
your slide, on this bullet you say USEC to submit updated
seismic analysis by December, 1997. What you just seem to
46
say to me is, we know what is in that analysis; is that
right?
MR. HICKEY: That is referring to the actual
estimate of the seismic risk at the site, not the mechanical
and structural fixes to the plant.
COMMISSIONER ROGERS: Right.
MR. HICKEY: The analysis used data up through
1985 and more data has come in since then. So, we want an
updated analysis that reflects the newer seismic data that
has come in since 1985.
DR. PAPERIELLO: Well, right now, the plants will
only withstand an earthquake acceleration -- these
particular plants where they need the seismic upgrade -- of
point .O5g, which is estimated to be an 80-year return
earthquake. The plants were believed to and were expected
in the 1985 safety analysis report to withstand a 250-year
return earthquake, which was an acceleration of .15g.
What we are doing is -- and what the upgrade is, is to
upgrade the plant to withstand that stress.
There have been some issues raised that more
recent seismic data which is possessed by the U. S.
Geological Survey, but which is not published and not peer
reviewed, may suggest somewhat higher accelerations on a
250-year return frequency. So, the decision to be made was,
do we wait until that day to get analyzed, put off any
47
upgrade for another couple of years which may make no
difference or do we do the immediate repair now. Get the
plant up to the .15g thing and then what do you do with the
new data.
We decided that if it makes a big difference and
you can justify spending an additional money and adequate
protection, using the kind of cost benefit that we would use
in backfit, that is how we would make the decision on how to
use the new data. It is really a trade off. Do we turn
around and wait a couple more years and do nothing or do we
upgrade now and then relook at the new data and see whether
or not they make a substantial difference. If they make a
substantial difference, then you will do more upgrade. If
it does not make a substantial difference, you won't.
CHAIRMAN JACKSON: Will the updated seismic hazard
analysis incorporate or be required to incorporate this
post-1985 data?
MR. HICKEY: Yes.
DR. PAPERIELLO: Yes.
CHAIRMAN JACKSON: Okay.
We are convinced that the compensatory measures
and the changes, the modifications that have already been
made are sufficient to ensure adequate protection.
DR. PAPERIELLO: Yes, because you run the cascades
at sub-atmospheric limits to release. We have done the
48
accident analysis. We had it submitted. We did an
independent analysis and the off-side effects are very
limited.
Finally, the upgrade of the safety analysis
report. Since 1985, DOE has initiated various efforts to
confirm assumptions, correct errors, address weaknesses and
reduce uncertainty in the existing SAR for each gaseous
diffusion plant, with a completion schedule date of February
of 1997. The staff is requiring that, within six months
after DOE issuance of the upgraded safety analysis report
and any associated findings, USEC must review and submit
them to the NRC along with proposed resolutions of findings
and any proposed certificate modifications.
There are assumptions made in the application that
this SAR upgrade is going to have to confirm. Obviously, if
it does not confirm them, that will have to be reconciled.
The upgraded SARs will be reviewed and approved by
the NRC and then will constitute the operating safety basis
for the gaseous diffusion plants. This matter is a
compliance plan item.
Can you show the next slide?
[Slide.]
DR. PAPERIELLO: We have conducted all the
coordination with other federal, state and local agencies
and members of the public required by the regulations. We
49
received 11 comments letters, including those from two EPA
regions which were response to the consultation requirements
of Part 76. The compliance evaluation reports address all
the comments received in detail.
Most of the issues most frequently raised involve
matters addressed in the compliance plan, such as, seismic
issues and emergency preparedness or addressed by law, such
as, disposal of waste, principally depleted uranium tails
and civil penalty authority. This is not meant to be all-
inclusive, but when I read through the comments and sort of
made check marks on how many appeared most often, they were
the ones that appeared most often. We have addressed every
comment that we received in the compliance evaluation
report.
The next slide.
[Slide.]
DR. PAPERIELLO: We completed the required
coordination with EPA and OSHA and we signed the memorandum
of MOU with OSHA on July 26th of 1996.
Next slide.
[Slide.]
DR. PAPERIELLO: Part 76.62(a) provides that upon
finding of compliance with the Commission's regulations for
issuance of a certificate and/or approval of a compliance
plan, the director of the Office of Nuclear Material Safety
50
and Safeguards shall issue a written decision explaining the
decision. The director may issue a certificate of
compliance covering those areas where the corporation is in
compliance with applicable Commission requirements and
approve a compliance plan for the remaining areas, if any,
of non-compliance.
I am ready to take the actions that are specified
in that regulation.
CHAIRMAN JACKSON: I think that your slide
relative to issuing the actual certificates of compliance by
August 30th should be verbally corrected relative to what is
required.
DR. PAPERIELLO: Yes.
After we submitted the paper to the Commission,
the Office of General Counsel informed us that they believed
that the certificate of decision should be issued first and
then after the 15-day comment period, that the certificate
of compliance be issued if there were no comments.
May I have the next slide?
[Slide.]
DR. PAPERIELLO: I would propose to issue the
"Federal Register" notice with the director's decision. I
would also issue a proposed compliance certificate and the
compliance evaluation report for each plant. The compliance
certificate has certain requirements in it, generally very
51
short, the usual tie-down conditions. The corporation has
to conduct its operations in accordance with the statements
and representations in the certificate application and in
the compliance plan.
They have to conduct operations in accordance with
the technical specifications requirements. It will become
effective on March 3, 1997. It is exempted from special
authorizations, as noted in Chapter 1, Section 1.8 of the
Safety Analysis Report. What that really deals with is
labeling containers.
Part 20 requires every container of radioactive
material to bear a conspicuous label. It is rather normal
for us to exempt fuel facilities and I even believe
reactors, but I certainly know fuel facilities. Every
container of radioactive material does not have to be
labeled with radioactive material. Basically, you label the
whole facility, the area in which the material is used, the
containers of a certain size and diminish that contain
radioactive material.
The second exemption is from the requirements of
10 CFR 7631 and 7636, requiring the submittal of an annual
renewal. What we have done is, condition the license to
make it reflect what is in the recent law, rather than what
is in the regulations. Of course, we are amending the
regulations to conform with the new law.
52
We are proposing that the certificate shall run
through the end of 1998 and the renewal application will be
filed in April of 1998. So essentially, we are looking at
the initial certification for two years. The logic behind
that is, most of the compliance plan items will be complete
by 1998. That provides a good opportunity to renew the
certificate, most likely, for a longer period of time.
Can I have the next slide?
[Slide.]
DR. PAPERIELLO: There is a limited 15-day appeals
process for the director's decision. The appeal is limited
to either the U. S Enrichment Corporation or any person
whose interests may be affected and who has either provided
written comments in response to previous "Federal Register"
notice or provided oral comments at public meetings. The
person must file a petition with the Commission within 15
days after the "Federal Register" notice publication. The
decision becomes final unless Commission grants the petition
for review or otherwise acts within 60 days after the
publication of the "Federal Register" notice.
If no petition is received in the designated 15-
day period, I propose to issue the final certificates.
Next slide.
[Slide.]
DR. PAPERIELLO: Power reactor licensing. There
53
was a preoperational testing program and usually a shakedown
period prior to licensing when the licensee would operate
under its proposed technical specifications prior to initial
licensing. That is to find out whether they work, if people
trained and are used to operating under those requirements.
In the case of the gaseous diffusion plants, they
are operated under DOE's regulations and DOE's operational
safety requirements. These are similar but not identical to
the NRC's technical safety requirements. At USEC's request,
we had planned a phase-in period of 120 days in order to
revise procedures and, more importantly, train the staff
during this transition period.
CHAIRMAN JACKSON: Does that mean that DOE will
have the enforcement authority --
DR. PAPERIELLO: Yes.
CHAIRMAN JACKSON: -- or we will have certified
the plants?
DR. PAPERIELLO: We will have certified, but to
become effective on March 3rd. In the interim, during the
transition period, DOE regulates and has enforcement
authority.
On August 16th, the USEC informed me that 120
days, based on recent experience, was probably too short for
the process and 180 days was requested. After consulting
with DOE who decided that that was -- if we agreed, that was
54
reasonable, we decided that the certificate's effective date
would be set at March 3rd as the date for the NRC to assume
jurisdiction. We originally proposed, I think,
December 29th.
We have NRC resident inspectors at the site and
they have been there since 1994. They will be inspecting
implementation of compliance plan items, actions during the
transition period.
The last slide.
[Slide.]
DR. PAPERIELLO: We have developed a certification
process and a regulatory basis for making required findings
on the application and the compliance plan. We believe that
the application and the compliance plan provide for
continued safe operation of the gaseous diffusion plants and
the staff is ready to issue the initial certification
decision. We are also prepared to assume regulatory
oversight from DOE following the transition period.
In addition to the summary shown here, I want to
tell you that my staff will prepare the following:
procedures for conducting the annual assessments for
Congress, the backfitting procedures, if need, if we need to
backfit and a recertification standard review plan. These
will be issued as similar procedures for analogous
activities at reactors or fuel facilities, as appropriate.
55
Thank you.
CHAIRMAN JACKSON: Thank you, Dr. Paperiello.
I think that the recertification standard review
plan is very important from the point of view of lessons
learned.
DR. PAPERIELLO: Yes.
CHAIRMAN JACKSON: You had spoken with the
Commission about that and certainly with me at an earlier
date. In fact, will that be in place in a time frame that
is timely --
DR. PAPERIELLO: Definitely.
CHAIRMAN JACKSON: -- for the certification?
DR. PAPERIELLO: Definitely.
CHAIRMAN JACKSON: Okay.
So, there will be sufficient time to complete the
recertification decision by December of 1998?
DR. PAPERIELLO: That's right.
CHAIRMAN JACKSON: Okay.
Commissioner Rogers?
COMMISSIONER ROGERS: No, I think all of my
questions have been dealt with.
CHAIRMAN JACKSON: Commissioner Diaz?
COMMISSIONER DIAZ: No questions.
CHAIRMAN JACKSON: Well, the Commission would like
to thank the staff and Mr. Timbers for an excellent briefing
56
on the results of the safety assessment for USEC's gaseous
diffusion plants. I compliment the staff for your diligent
efforts in evaluating USEC's certification application as
well as for preparing to take over the regulatory oversight
and bringing this first certification process to closure.
It is new for us and I am sure it is new for USEC.
So, the Commission would also like to thank Mr. Timbers for
his presentation as well as the responsiveness of the
Department of Energy in attending and answering questions at
this briefing.
The Commission is being asked to approve by
negative consent the issuance by August 30, 1996 of the
certification and the follow-on period, the certificates of
compliance for the USEC's two gaseous diffusion plants. So,
I encourage my fellow commissioners and myself to review the
matter expeditiously relative to those dates.
I would note that, once the plants are certified,
there are still a number of issues that must be resolved
both during the transition phase from DOE to NRC
jurisdiction. Then following receipt of the safety analysis
report upgrade in early 1997 that we discussed, that the
USEC will have to make a determined effort to implement the
needed changes in a timely manner.
So, again, I thank everyone. Unless there are
further comments, we are adjourned.
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[Whereupon, at 11:24 a.m., the briefing was
concluded.]
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