IR 05000133/2005001

IR 05000133-05-001; on 04/06/2005; Humboldt Bay Power Plant Unit 3, Special Inspection Interim Report

ML050960069
Person / Time
Site:	Humboldt Bay
Issue date:	04/06/2005
From:	Patricia Holahan Division of Nuclear Materials Safety IV
To:	Rueger G Pacific Gas & Electric Co
References
IR-05-001
Download: ML050960069 (25)

Text

April 6, 2005

SUBJECT:

SPECIAL INSPECTION INTERIM REPORT 050-00133/05-001, PACIFIC GAS AND ELECTRIC COMPANY, HUMBOLDT BAY POWER PLANT UNIT 3, EUREKA, CALIFORNIA

Dear Mr. Rueger:

An NRC Special Inspection was initiated on November 2, 2004, at your Humboldt Bay Power Plant Unit 3 facility. This special inspection was established in response to information received from Pacific Gas and Electric (PG&E) Company that three approximately 18-inch long spent fuel rod segments are missing. This special inspection is still ongoing and to date has included three separate site visits, as well as bi-weekly conference calls with your staff, and in-office review of documents. The inspectors conducted a briefing of preliminary inspection findings with your senior plant managers at the conclusion of each site visit. On January 31, 2005, a telephonic briefing was conducted with you and other senior licensee managers. That briefing described the items that appear to be violations of applicable regulations or that were considered unresolved. A subsequent telephonic briefing was conducted with senior licensee managers on March 31, 2005. That briefing covered the extent of inclusion of your February 22, 2005, notifications and reports in the NRC interim report. The enclosed interim report summarizes the scope and preliminary results of the special inspection.

This interim report documents the inspectors assessment of PG&Es current control of special nuclear material (SNM); accountability for the remainder of the SNM in the spent fuel pool; the adequacy of PG&Es radiological characterization of each missing fuel rod segment; and compliance with applicable regulations.

On February 22, 2005, PG&E issued Humboldt Bay Power Plant (HBPP) Special Nuclear Material Control and Accountability Project Interim Reports. These interim reports provide the results of your investigation of the location of the three 18-inch segments cut from a fuel rod of fuel assembly A-49, and your evaluation of the overall control and accountability of SNM at the Humboldt Bay Power Plant. These interim reports will be reviewed as part of the continuing special inspection and are not a part of the scope of this interim report.

Pacific Gas and Electric Company

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Also, on February 22, 2005, PG&E notified NRC pursuant to the requirements of 10 CFR 20.2201(a)(1)(ii) that you were unable to locate one intact in-core detector and parts of three others. The discrepancy was identified on February 4, 2005, following a review of records and completion of your physical inventory of all SNM. Your notification stated that the missing in-core detectors contained up to approximately 0.15 grams of uranium-235. The circumstances related to the missing in-core detectors will also be reviewed as part of the continuing special inspection and they are not a part of this interim report.

This interim report is being issued to address the commitment made to the public during the management meeting of September 29, 2004, that the NRC would report on its findings by early in the second quarter of 2005. These findings are preliminary and subject to change once you have completed your investigations and we have completed our inspection. However, to date, the special inspection has identified four apparent violations and three unresolved items as documented in this interim report. Apparent violations are potential violations of NRC requirements that have not yet been formally dispositioned by the NRC. In this case, the NRC will process these apparent violations in accordance with the NRC Enforcement Policy at the conclusion of the special inspection. An unresolved item is a matter about which more information is required to determine whether the issue in question is an acceptable item, a deviation, a nonconformance, or a violation. Because the special inspection is ongoing, no response is requested at this time regarding the findings identified in this interim report.

However, you are encouraged to review the findings for any prompt corrective action deemed appropriate.

In accordance with 10 CFR 2.390 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response, if you provide one, will be made available electronically for public inspection in the NRC Public Document Room or from the Publicly Available Records (PARS)

component of NRCs document system (ADAMS). ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html (the Public Electronic Reading Room).

Should you have any questions concerning this inspection, please contact Dr. Blair Spitzberg, at (817) 860-8191 or Emilio M. Garcia at (530) 756-3910.

Sincerely,

/RA/

Patricia K. Holahan, Ph.D., Director Division of Nuclear Materials Safety Docket No.: 050-00133 License No.: DPR-7

Enclosure:

NRC Interim Inspection Report 050-00133/05-001

Pacific Gas and Electric Company

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REGION IV==

Docket No.:

050-00133 License No.:

DPR-7 Report No.:

050-00133/05-001 Licensee:

Pacific Gas and Electric Company (PG&E)

Facility:

Humboldt Bay Power Plant (HBPP), Unit 3 Location:

1000 King Salmon Avenue Eureka, California 95503 Dates:

November 2, 2004, through March 31, 2005 Inspectors:

Emilio M. Garcia, Health Physics Inspector Martha C. Williams, Sr. MC&A Physical Scientist, NSIR Glenn W. Tuttle, MC&A Physical Scientist, NSIR Approved By:

D. Blair Spitzberg, Ph.D., Chief Fuel Cycle and Decommissioning Branch Attachment:

Supplemental Inspection Information ADAMS Entry:

IR 05000133-05-01, on 11/02/2004-03/31/2005; Pacific Gas &

Electric Co.; Humboldt Bay, Unit 3. Special Inspection Interim Report. Four apparent violations and three unresolved items.

-2-EXECUTIVE SUMMARY Humboldt Bay Power Plant, Unit 3 NRC Inspection Report 050-00133/05-001 During the fall of 2003, the licensee conducted an examination of the contents of its spent fuel pool (SFP) in preparation for eventual removal of the fuel for placement into dry storage in an onsite Independent Spent Fuel Storage Installation (ISFSI). During the sorting of materials in a container in the SFP, licensee personnel discovered a fragment of a spent fuel pin approximately 4 inches long. During subsequent sorting of materials in the SFP, licensee personnel located additional fuel fragments ranging in length from 4 to 6 inches.

The licensee has demonstrated that these fuel fragments and others found later are from failed stainless steel clad fuel pins used during the first fuel loading in the 1960's. In 1965, many fuel cladding failures were experienced with the stainless steel clad fuel pins.

The discovery of fuel fragments indicated a potential problem with the Humboldt Bay material control and accounting (MC&A) practices, possibly extending as far back as the 1960 time-frame. Due to the many uncertainties in the base inventory in January 2004, the licensee initiated a re-evaluation of the amount of special nuclear material (SNM) present in each assembly and in the SFP. The NRC opened inspection followup items to track and review the licensees investigation. In addition, on March 25, 2004, the NRC conducted a review of practices of spent fuel MC&A at Humboldt Bay in accordance with guidance contained in Temporary Instruction 2515/154, Phases I and II. Based on that review, the NRC decided that Humboldt Bay required a Phase III inspection under Temporary Instruction 2515/154.

In late June 2004, the licensee informally notified the NRC staff that it had recently found documentation indicating that in 1968 a fuel pin was segmented into three 18-inch sections and other records that indicated the complete assembly was sent offsite for reprocessing.

On July 16, 2004, the licensee notified the NRC pursuant to the requirements of 10 CFR 20.2201(a)(1)(ii) of the discrepancy between inventory records and the location of spent fuel rod segments. No records had been located indicating the location of the fuel segments in the SFP. During July and August 2004, licensee personnel searched the most likely and accessible locations within the SFP where the fuel segments could be. Region IV inspectors observed part of the search activities.

Several of the fragments found during the search appeared at first to have been cut.

However, a metallurgist employed by the licensee opined that the fragments appeared to have broken due to inter-granular stress corrosion cracks and not cutting. The metallurgist also stated that the schedule No. 40 steel pipe described in the 1968 records as the shipping container for the 18-inch segments could not have completely corroded away, and that he expected that if it was in the SFP it would be significantly rusted/corroded, possibly through the wall in localized areas, but it would still be easily recognizable.

-3-On August 16, 2004, PG&E issued a 30-day written followup report to its initial July 16, 2004, notification to the NRC, and the next day the licensee made a 1-hour notification to the NRC pursuant to 10 CFR 74.11(a) that the subject fuel rod segments were considered missing.

On September 29, 2004, Region IV management and licensee management conducted a public meeting in Eureka, California, to discuss the current and planned search activities.

During the public meeting, the NRC Region IV Regional Administrator announced this special inspection and on October 25, 2004, Region IV chartered this special inspection.

At the time of this interim report, inspectors had visited the site three times as part of the special inspection. During site visits, the inspectors observed search activities including the failed attempt to separate the ferrous constituents from SNM debris with an electro-magnet, and the vacuuming of the resin pile in the bottom of the SFP. The inspectors have also observed portions of the licensees process to measure, identify, characterize, and store fuel fragments. The inspectors have also attended and observed a number of licensee staff meetings. These meetings have included technical review groups, plant safety review committee meetings for evaluation of procedures and reports, training sessions of personnel, and team review meetings of outside vendors procedures. Based on the observations and findings of the special inspection up to the time of this interim report, the inspection team concluded that:

The MC&A program in place as of November 4, 2004, met regulatory requirements; however, a full assessment of the program was not possible because the licensee had not characterized all SNM in the SFP and completed its review of all accounting records. All problems regarding the missing fuel pin fragments stemmed from activities that had occurred at least two decades ago. No discrepancies were identified with documentation of the existing SFP inventory (Section 3).

• The licensees physical search for the missing fuel has been completed. A consultant to the licensee believed that some fuel rod fragments found in the SFP exhibited characteristics that were consistent with the three missing A-49 fuel rod segments.

However, the licensee was unable to state conclusively that the three 18-inch missing fuel rod segments had been located (Section 3).

• The inspectors noted that the licensee had experienced a number of problems that resulted in delays during the search for the missing segments and the characterization and storage of found fuel fragments. The inspectors concluded however, that regardless of the difficulties experienced, the licensee had conducted a thorough search and characterization process while maintaining effective personnel safety and criticality controls (Section 2).

• The licensee was continuing the search for documents, completing interviews, performing a cause analysis, and analyzing scenarios of possible offsite shipment of the three missing 18-inch segments. The licensee had identified six possible sites where the fuel could have been shipped. All of these sites were licensed facilities with strict radiological controls (Section 3).

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The inspectors concluded that anyone attempting to remove the 18-inch segments, other than in a heavy, shielded cask would be subject to life-threatening radiation exposure. The inspectors also concluded that removal of the segments without a shielded cask would have been detected by the plant radiation monitors. However, estimates by the licensee of the radiological dose rate from the missing 18-inch segments will be subject to further review during the continuation of the special inspection (Section 6).

• The inspectors identified four apparent violations. The apparent violations involved:

(1) the failure to keep records showing the inventory, transfer or disposal of the three18-inch segments of irradiated fuel; (2) the failure to establish, maintain, and follow written material control and accounting procedures sufficient to account for the SNM in its possession under License DPR-7; (3) the failure to conduct a physical inventory of all SNM in its possession at intervals not to exceed 12 months, and (4) the possession of SNM in the form of remnants of fuel fragments when neither the license nor the technical specifications authorized possession of SNM in this form (Section 3.2).

• The inspectors identified three unresolved items. The unresolved items concerned the current location of the three 18-inch segments from irradiated fuel Assembly A-49 and the potential consequences associated with their loss; the current location and reportability of an unspecified number of fuel pellets last reported on June 7, 1976, as stored in a vacuum bag hung from the side of SFP; and the conditions that resulted in the loss of one complete in-core detector and parts of three others, their final disposition, and the potential consequences associated with their loss (Sections 3 and 5).

-5-1SAFSTOR is defined as a method of decommissioning in which the nuclear facility is placed and maintained in such condition that the nuclear facility can be safely stored and subsequently decontaminated (deferred decontamination) to levels that permit release for unrestricted use.

2The Atomic Energy Commission was the predecessor to the Nuclear Regulatory Commission.

3A fuel assembly is a cluster of fuel rods. The HBPP Unit 3 first fuel assemblies were General Electric Type I fuel with stainless steel cladding and a 7 by 7 fuel pin array for 49 fuel pins per assembly. Forty-eight of the fuel pins had 79 inches active fuel length and one had an active fuel length of approximately 78.5 inches. The segmented pin in assembly A-49 had an active fuel length of 79 inches.

4A fuel pin or fuel rod is a long slender thin walled metal tube that holds fissionable materia (fuel) for nuclear reactor use.

At HBPP Unit 3 the cladding was made of stainless steel or zirconium alloys. The terms pin and rod are used interchangeably.

REPORT DETAILS 1.0 Introduction Humboldt Bay Power Plant Unit 3 is currently in decommissioning SAFSTOR1 status. Unit 3 received an operating license from the Atomic Energy Commission2 on August 28, 1962. This license was amended in 1965 for power increase. On July 2, 1976, Unit 3 was shutdown for annual refueling and seismic modifications. This work was suspended in December 1980, and in June 1983, PG&E announced its intention to decommission the unit based on economic analyses that showed that completing the necessary seismic upgrades would not be economical. Unit 3 has been essentially in SAFSTOR since July 1985. On July 19, 1988, NRC approved the licensees SAFSTOR plan and amended the license to a possess-but-not-operate status. The license expires on November 9, 2015. The facility has undergone minimal decommissioning activity since shutdown.

During the fall of 2003, the licensee conducted an examination of the contents of its spent fuel pool (SFP) in preparation for eventual removal of the remaining fuel assemblies3 to a dry storage Independent Spent Fuel Storage Installation (ISFSI). On December 15, 2003, PG&E applied for a license to build an onsite ISFSI.

On November 12, 2003, during sorting of materials in a container in the SFP, licensee personnel discovered a fragment of a spent fuel pin4 approximately 4 inches long. During subsequent sorting of materials in the SFP, licensee personnel located an additional eight fuel fragments ranging in length from 4 to 6 inches. Through record reviews the licensee identified additional fuel fragments, ranging in length from 1 to 30 inches, that were stored in one container. These fuel fragments were in addition to those that had been found at that time.

On November 17, 2003, the licensee initially informed NRC personnel by telephone of these findings. The licensee kept the NRC staff informed of subsequent findings as they arose. In early December 2003, the licensee stopped additional work with containers in the SFP that could potentially contain fuel pin fragments until a criticality evaluation could be completed.

The initial fuel assemblies used in 1963 during the first fuel loading were clad with stainless steel. In 1965, cladding failure of stainless steel clad fuel was observed. In 1966, a fuel

-6-washer was built and used to remove accumulated corrosion on the surface of the fuel pins.

During August through December 1966, fuel inspections identified at least three fuel assemblies with missing portions of pins. An undated Polaroid photograph of a video monitor shows an additional assembly, different from those previously identified, with a missing portion of a pin. Tests performed by licensee personnel demonstrated that all the spent fuel pin fragments found in the SFP were from stainless steel clad fuel pins. Fuel used after the first load was made with zirconium alloy. Zirconium alloy cladding was not subject to the same failures experienced by the stainless steel clad fuel.

During an NRC inspection conducted during January 5-9, 2004, the licensee informed the inspectors that it had found records that indicated that the stainless steel clad fuel assemblies were transferred to Nuclear Fuel Services Corporation in West Valley, New York, during the late 1960's and early 1970's. Based on the information found as of the time of the inspection, it was not clear to the inspectors that the reported transfer of special nuclear material (SNM)

would have accounted for the missing portions of pins. Some assemblies were shipped years after being inspected and would have been inside containers that would have prevented the damage from being easily seen. The licensees records indicated that a number of the assemblies in the pool had pins removed in the 1970's time frame for evaluations by the fuel vendor. It was not clear to the inspectors if the SNM inventory used by the licensee had accounted for the removed pins.

On January 9, 2004, during the inspection, the plant manager decided to initiate a re-evaluation of the amount of SNM present in each assembly and in the SFP. He took this action due to the many uncertainties in the base inventory. The inspectors opened inspection followup items (IFIs) 50-133/0304-01 and 50-133/0304-02 to track and review the licensees investigation of the actions that were taken or should have been taken upon discovery of the fuel fragments; and re-assessment of the SNM possessed under the license, including the accuracy of special material status reports previously submitted. The discovery of fuel fragments indicated a potential problem with the Humboldt Bay material control and accounting (MC&A) practices, possibly extending as far back as the 1960 time-frame.

However, the fuel fragments that were discovered were contained within the licensees controlled area and did not constitute an imminent reportability concern due to theft or loss of licensed material in accordance with requirements of 10 CFR 20.2201 or 74.11.

On March 25, 2004, the NRC conducted a review of MC&A practices for spent fuel at Humboldt Bay. The review was conducted in accordance with guidance contained in Temporary Instruction 2515/154. This temporary instruction required the inspector to gather information in answer to a series of questions about the licensees MC&A program. The questions covered the following programmatic areas: physical inventory, tracking of individual rods that had been separated from their assemblies, spent fuel pool practices, written procedures, accounting records, and visual verification. Based on the responses to the questions, the NRC determined that this site required additional inspection under the temporary instruction.

On June 29, 2004, the licensee informed NRC staff that it had recently found documentation indicating that in 1968 a fuel pin was segmented into three 18-inch sections and that other records indicated that the complete assembly was sent off site for reprocessing.

-7-On June 30, 2004, the licensee convened a Technical Review Group to review the recently found records. The minutes of an Onsite Review Committee (OSRC) meeting conducted on October 2, 1968, noted that a fuel rod from assembly A-49 had been cut into three 18-inch long segments. These three segments were intended to be sent to Battelle, Ohio, for an experiment. The minutes indicated that prior to shipment of the rod segments the licensee learned that the experiment had been canceled and the rod segments were placed in a container in the pool. Another document from the September - October 1968 time frame indicated that the rod that had been segmented had been previously damaged while in operation. This document described a 1.5-inch diameter schedule No. 40 steel pipe that was used as a container for the rod segments, which were to be shipped to Battelle. This document also stated that if possible, the remains of the rod were to be placed in the

"garbage can" in the pool. The garbage can was an aluminum container originally intended for shipping damaged stainless steel clad assemblies for reprocessing. This container was used for collection of small irradiated components that were in the SFP. In more recent documents, PG&E has referred to this container as the central storage container. None of the fuel pin fragments found in November and December 2003, were 18 inches long.

Other records maintained by the licensee indicated that assembly A-49 was sent to Nuclear Fuel Services, West Valley, New York, on August 6, 1969, for reprocessing. The record indicated that the weight of the assembly shipped to Nuclear Fuel Services corresponded with the weight of the assembly when it was received. Since the OSRC records indicated a fuel pin had been removed from assembly A-49, the weight on receipt should not have agreed with the weight on shipment. The licensee decided that this apparent discrepancy constituted a quality problem related to their SNM records and issued a nonconformance report to address this matter.

On July 16, 2004, PG&E notified the NRC pursuant to the requirements of 10 CFR 20.2201(a)(1)(ii) of the discrepancy between inventory records and the location of spent fuel rod segments (Event Notification 40877). No records had been located indicating the location of the fuel segments in the SFP.

During July and August 2004, licensee personnel searched the most likely and accessible locations within the SFP where the fuel segments could be physically located. Region IV inspectors observed part of the search activities, including the opening and removal of contents from the assembly UD-006N box. On June 4, 1975, zirconium clad fuel assembly UD-006N was dropped by an operator while being moved from one SFP location to another.

The assembly hit the bottom of the pool and several rods became disassembled from the others. Subsequently, the licensee stored all the rods from assembly UD-006N in a box.

Some stainless steel clad fuel fragments were also stored in the UD-006N box. The inspectors observed the search for assembly A-49 segments in the UD-006 box. Several fragments were found in these searches that at first appeared to have been cut as opposed to broken due to metal failure. A metallurgist and a specialist in non-destructive examinations, both employed by the licensee at their Diablo Canyon Nuclear Plant, examined video tapes of 12 fragments that could have been cut. The metallurgists opinion was that the video images suggested that the fragments all exhibit the appearance of a fracture surface and are dark in color as if oxidized to some degree. This appearance is more typical of inter-granular stress corrosion cracks that occurred at operating temperature. The non-destructive examination specialist concurred.

-8-The metallurgist also stated that the schedule No. 40 steel pipe described in the 1968 records as the shipping container for the 18-inch segments could not have completely corroded away. The metallurgist stated that even if the shipping container was made from carbon steel, which he believed it probably was since the material of construction was referred to simply as "steel pipe," it would not have completely corroded. He expected that if it was in the SFP it would be significantly rusted/corroded, possibly through the wall in localized areas but it would still be easily recognizable.

On August 16, 2004, PG&E issued a 30-day written followup report to its initial July 16, 2004, notification to the NRC (Event Notification 40877). This report was made pursuant to 10 CFR 20.2201(b)(2)(ii). The licensee reported implementation of an action plan that included a detailed physical inspection of the SFP; documentation reviews of PG&E and vendor records; and interviews with both employees and contractors who had been associated with the Humboldt Bay SFP and radwaste operations.

On August 17, 2004, the Humboldt Bay Plant Staff Review Committee reviewed the results of searching the most likely and accessible locations within the SFP where the fuel segments could be located. During this phase of the search, the missing fuel was not located.

Consequently, the licensee made a 1-hour notification to the NRC pursuant to 10 CFR 74.11(a) that the missing fuel rod segments were considered missing (Event Notification 40961).

On September 29, 2004, Region IV conducted a public meeting with the licensee in Eureka, California, to discuss the current and planned search activities. During the public meeting, the NRC Region IV Regional Administrator announced that a special inspection would be conducted of the licensees material control and accountability program and that Region IV would also continue to follow the licensees efforts to search for the missing fuel fragments.

On October 25, 2004, Region IV chartered this special inspection.

2.0 Site Visits Members of the special inspection team conducted site visits on November 2-4 and December 7-10, 2004; and January 6-13, 2005. They also attended a management meeting at NRC headquarters on January 19, 2005. The purpose of this meeting requested by the licensee was to explain their intent to submit an interim report at the conclusion of their search of the SFP. This meeting also described the form that their interim and final reports would take. Members of the special inspection team have also participated in telephonic conferences with the licensee. These telephonic conferences have occurred about every 2 weeks.

During the site visits, the inspectors observed the search activities, including the failed attempt to separate the ferrous constituents from SNM debris with an electro-magnet, and the vacuuming of the resin pile in the bottom of the SFP. The inspectors also observed portions of the licensees activities to measure, identify, characterize, and store fuel fragments. The inspectors also attended and observed a number of licensee staff meetings. These meetings included technical review groups, plant safety review committee meetings for evaluation of procedures and reports, training sessions of personnel, and team review meetings of outside vendors procedures.

-9-The licensee experienced a number of problems and delays during the search for the missing segments and the characterization of fuel fragments. These included dropping a storage tube used for fuel fragments; the failed attempt to separate the ferrous constituents from SNM debris with an electro-magnet; and the unexpected and sudden buoyancy of the resins vacuum tank. These difficulties resulted in the generation of several problem reports and technical review groups. Although some of the problems experienced could have been predicted, many of these activities were not only a first experience for this facility but for the industry. The inspectors observed that individual employees tasked with conducting the search and manipulating the found fragments were encouraged by the licensee to make recommendations. These technicians and operators were involved in the development of the procedures, and the selection of tools and equipment used.

The inspectors observed the presence of management representatives during all search activities and during characterization of fuel fragments. These activities were often also observed by representatives of the nuclear quality services staff. When significant unexpected conditions arose, such as the dropped fuel fragment tube or the sudden buoyancy of the resins vacuum tank, the licensee management and nuclear quality services staff did not hesitate to stop work and convene a technical review group to evaluate and resolve the problems. Corrective actions to resolve the difficulties included modification and/or fabrication of new tools, and modification of procedures.

The inspectors noted that the licensee had experienced a number of problems that resulted in delays during the search for the missing segments and the characterization and storage of found fuel fragments, but the inspectors concluded that regardless of the difficulties experienced the licensee had conducted a thorough search and characterization process while maintaining effective personnel safety.

3.0 Special Nuclear Material Control and Accounting (MC&A) Procedures (Inspection Procedure 93812)

3.1 Inspection Scope The inspectors reviewed the licensees written MC&A procedures, which addressed physical inventory, movement of SNM, record keeping, and data reporting. The inspectors reviewed implementation of written procedures and activities in progress, examined records, and interviewed personnel.

3.2 Observations and Findings The over-arching material control and accounting procedure in force at the time of the inspection was HBAP D-7, Control and Accountability of Special Nuclear Material and Waste Shipment, Volume 1, Revision 7, dated July 24, 2004. The procedure defined MC&A roles and responsibilities; provided instructions for movement, storage, and physical inventory of SNM; and described records, reports, and the information required for preparing records. The procedure included instructions for identifying and keeping records of pieces of nuclear material not part of a fuel assembly.

Procedure STP 3.6.6, Annual Special Nuclear Materials Physical Inventory and Spent Fuel Pool Cover Seal Verification, Volume 6, Revision 18A, dated November 7, 2002,

-10-covered specific instructions for physical inventory. Both the over-arching procedure and the specific procedure required physical inventory of all SNM; however, the procedures emphasized inventory of fuel assemblies. The procedures were adequate in that they required inventory of all SNM, but weak in that they did not specifically address inventorying separated rods or the SNM fragments in the SFP.

In addition to the procedures in force at the time of the inspection, the review included the following historical versions of procedures: Control and Accountability of Special Nuclear Material and Waste Shipment, HBAP D-7, Rev. 0, dated June 14, 1989; Fuel Handling Procedure for Moving Fuel Within the Spent Fuel Storage Pool, B-5, Rev. 0, dated August 1986; Control of Special Nuclear Material, AP-8, dated 1973; and Procedural Control of Special Nuclear Material, dated 1968. Rev. 0 of HBAP D-7 defined rods as the smallest discrete SNM bearing part of a fuel assembly and did not acknowledge that parts of rods might contain SNM.

The licensee had developed temporary procedures to cover activities conducted in the SFP to inventory and identify all SFP objects, including fuel pieces. The inspectors reviewed TP 2004-05, Transfer Fuel Assembly UD006N to a New Storage Container, dated August 6, 2004; TP 2004-07 Movement of Fuel Fragments, Fuel Debris and Non-Fuel Material in Spent Fuel Pool, dated October 8, 2004;TP 2004-08 Fuel Fragment Evaluation and Container Loading, dated August 6, 2004; and TP 2004-09 Special Nuclear Material Inventory, Inspection and Control Project, Phase 2, prepared November 3, 2004. Responsibilities assigned in the procedures were clear.

The procedures included the requirement to notify the SNM custodian or delegate of activities involving movement of SNM in order to assure that SNM records would be revised and updated. The inspectors also reviewed two technical basis documents, TBD-305 Spent Fuel Pool Fuel Fragment/Debris Evaluation, dated July 15, 2004, which included a description of the current inventory of spent fuel pieces, and TBD-306 Documentation of Spent Fuel Pool Search for A-49 Pin Segments, dated August 17, 2004, which described the search for fuel pin fragments.

The inspectors verified the locations of 30 assemblies in the SFP. The sample of 30 assemblies consisted of 18 selected using random sampling techniques and the 12 that were identified by the licensee as having had rods removed. Licensee operators used a camera to view each assembly number, which the inspector read in order to confirm that the assembly was in the location specified in the SFP records.

The serial numbers on the assemblies and their locations matched the records on the SFP map. No discrepancies were identified.

For consistency in communications, the licensee prepared a written definition that distinguished between fuel segments, as the three cut pieces of fuel rod from assembly A-49, and fuel fragments, as any clad or unclad portion of fuel rod material that had a measurable dimension nominally greater than 1/4-inch and contained SNM.

Other than UD-006N, no rods or rod segments that had been separated from their assemblies were identified in the pool. Only fragments remained in the pool.

Investigation of the location of the three missing segments was continuing at the time of the inspection. Rod fragments and pellet fragments had been retrieved from various locations in the spent fuel pool and placed in permanent or temporary storage

-11-containers in the pool. Available historical records did not completely explain either what had happened to the three missing segments or the source(s) of the pieces that remained in the pool.

The inspectors observed the empty position in the SFP rack which once held the central storage can (the garbage can) which had been used for storing fragments of fuel and other metal retrieved during clean-ups. The garbage can had been emptied and pieces from the garbage can had been placed in buckets, where they were stored prior to characterization. Following characterization, the pieces were placed in long metal boxes which had been designed specifically for storage of pieces. At the time of the inspection, the licensee was in the process of characterizing the pieces.

The inspectors independently reviewed selected SNM accountability records, which consisted of individual printed forms. These forms were used primarily for keeping track of fuel assemblies in the SFP and were kept in a three ring binder book, with tabs indicating the various assembly types.

On November 4, 2004, the inspectors identified two records from June 1976 which indicated that an unspecified number of fuel pellets had been collected and stored in a vacuum cleaner bag. The last entry on the records, June 7, 1976, indicated that the bag was suspended from the side of the SFP. At the time the inspectors found these records, the licensee had not evaluated them to account for the fate of the fuel pellets.

The licensee promptly opened a problem report to track this item.

These two records and a third record were found under a tab labeled Miscellaneous.

The third record described finding two pieces of fuel rod in the SFP. The last entry on this form record noted that the elements had been transferred from the GE inspection stand to the container where complete rods from zirconium clad failed assembly UD-006N were stored.

Subsequent to the November 2004 site visit, the licensee interviewed a number of individuals who were involved with SFP clean-up in 1976. The licensee has not identified who prepared these records in question, but has concluded that the records were prepared by an individual who was not physically present when the work was performed. The licensee speculated that this individual received the information from other individuals working in the SFP area and had mistakenly recorded pellets when the items found were fuel fragments. Further, the licensee concluded that the fragments were not stored in a vacuum bag but in a container, that this container was emptied on July 14, 1976, and that the fragments were moved to the UD-006N can.

The current location of the fuel pellets described in the early June 1976 documents and the reportability of this event are considered an unresolved item (URI 50-133/0501-01). An unresolved item is a matter about which more information is required to determine whether the issue in question is an acceptable item, a deviation, a nonconformance, or a violation.

-12-The inspectors reviewed licensee records concerning irradiated fuel rods removed from their parent assemblies and shipped offsite. From 1971 to 1974, a total of 66 rods were removed from 12 assemblies. Inspectors viewed videotaped records of each of the 12 fuel assemblies to attempt to verify the licensees records of rods removed. Inspectors were able to verify rod removals as indicated in the assemblies containing 36 rods (6 x 6 configuration), but were unable to verify removals for the assemblies containing 49 rods (7 x 7 configuration) due to the tighter configuration of the rods and the fact that the removed rods were interior rods.

The inspectors reviewed Form AEC-741 (currently designated DOE/NRC Form 741)

for each of the shipments involving the 66 removed rods and found them to be accurate.

The inspectors interviewed licensee employees and contractors involved in the physical searches of the SFP and records review.

As of January 31, 2005, the licensees physical search for the missing fuel segments had been completed. A consultant to the licensee believes that some fuel rod fragments found in the SFP exhibit characteristics that are indicative of the three missing A-49 fuel rod segments. However, the licensee has been unable to conclusively state that it has located the three 18-inch missing fuel rod segments. The licensee is continuing to search for documents, complete interviews, perform a cause analysis, and analyze scenarios of possible off site shipment of the three missing 18-inch segments. The licensee has identified six possible sites where the fuel could have been shipped. These are the former Nuclear Fuel Services, West Valley, New York, reprocessing facility; the General Electric Vallecitos facility in California; the Battelle facility in Ohio to which the segments were originally intended to be shipped; and low-level waste burial facilities located in South Carolina, Nevada, and Washington State. All of these sites were licensed facilities with strict radiological controls.

As of January 31, 2005, the physical location of the three 18-inch segments from irradiated fuel Assembly A-49, that was first reported missing by PG&E, on July 16, 2004, has not been determined. The potential transfer of this SNM to an unauthorized location is considered an unresolved item. This matter is considered an unresolved item (URI 50-133/0501-02) and will continue to be reviewed as part of the ongoing special inspection.

This is an interim report and the inspection effort has not been completed. However, the inspectors have identified a number of items that appear to be violations of applicable regulations or that are unresolved. Two unresolved items have been previously described in this section, a third appears in Section 5. The apparent violations are listed below. An unresolved item is a matter about which more information is required to determine whether the issue in question is an acceptable item, a deviation, a nonconformance, or a violation. Apparent violations are potential violations of NRC requirements that have not yet been formally dispositioned by the NRC.

-13-The last item listed was previously identified as an unresolved item (URI 50-133/0401-01) but the inspectors have concluded that the item is an apparent violation (APV 50-133/0501-07).

A.

10 CFR 74.19(a)(1) requires, in part, that the licensee shall keep records showing the receipt, inventory (including location and unique identity),

acquisition, transfer, and disposal of all SNM in its possession regardless of its origin or method of acquisition.

Contrary to the above from August 6, 1969 (date when assembly A-49 was shipped off site), PG&E, failed to keep records showing the inventory, transfer or disposal of three approximately 18-inch segments of irradiated fuel containing approximately 14.1 grams of SNM. This failure is an apparent violation of 10 CFR 74.19(a)(1) (APV 50-133/0501-03).

B.

10 CFR 74.19(b) requires that each licensee that is authorized to possess SNM in a quantity exceeding one effective kilogram at any one time shall establish, maintain, and follow written material control and accounting procedures that are sufficient to enable the licensee to account for the SNM in its possession under license. The licensee shall retain these procedures until the Commission terminates the license that authorizes possession of the material and retain any superceded portion of the procedures for 3 years after the portion is superceded.

Contrary to the above from June 4, 1971 (date when last Type 1 fuel assembly was shipped off site), PG&E, a licensee authorized by NRC License DPR-7 to possess SNM in a quantity exceeding one effective kilogram, failed to establish, maintain, and follow written material control and accounting procedures sufficient to enable PG&E to account for the SNM in its possession under license DPR-7. Specifically, PG&E failed to account for 6365 grams of uranium, 104 grams of uranium-235, and 23 grams of plutonium contained in remnants from Type 1 damaged fuel assemblies. This failure is an apparent violation of 10 CFR 74.19(b) (APV 50-133/0501-04).

C.

10 CFR 74.19(c) requires each licensee who is authorized to possess SNM, at any one time and site location, in a quantity greater than 350 grams of contained uranium-235, uranium-233, or plutonium, or any combination thereof, shall conduct a physical inventory of all SNM in its possession under license at intervals not to exceed 12 months.

Contrary to the above, PG&E, a licensee authorized to possess SNM at the Humboldt Bay Power Plant in quantities greater than 350 grams of contained uranium-235, uranium-233, or plutonium failed to conduct a physical inventory of all SNM in its possession at intervals not to exceed 12 months. Specifically, inventories performed by PG&E from June 4, 1971 (date when last Type 1 fuel assembly was shipped off site) to September 30, 2004, did not include fuel fragments and other SNM remnants from Type 1 damaged fuel assemblies.

This failure is an apparent violation of 10 CFR 74.19(c) (APV 50-133/0501-05).

-14-D.

Technical Specification 4.2 in effect from November 18, 2002, through September 10, 2004, specified that the licensee may possess SNM in the form of fuel assemblies.

Contrary to the above, from November 18, 2002, through September 10, 2004, the license possessed more than 127 grams of SNM in the form of remnants of fuel fragments and neither the license nor the licensee technical specification authorized possession SNM in this form. The licensee may have possessed SNM in this form as early as July 28, 1966, when the first fuel failure was detected. This failure is an apparent violation of Technical Specification 4.2 in effect from November 18, 2002, through September 10, 2004 (APV 50-133/0501-07).

3.3 Conclusions Two unresolved items and four apparent violations were identified. No findings of significance were identified with the licensees conduct of its existing MC&A program.

All problems associated with the missing fuel pin segments stemmed from activities that had occurred at least two decades ago. No discrepancies were found in documentation of the SFP inventory.

4.0 Spent Fuel Material Control and Accounting at Nuclear Power Plants (NRC Temporary Instruction 2515/154, Phase III)

4.1 Inspection Scope The inspectors reviewed documentation and procedures, interviewed personnel and observed activities in progress in order to perform Phase III of the temporary instruction.

4.2 Observations and Findings New procedures had been developed to cover current activities of SFP clean-up and records reconciliation.

a.

The licensees MC&A plan clearly defined roles and responsibilities. MC&A activities were well-documented. Current programs and procedures to control and account for all SNM were adequate.

b.

No activities to disassemble spent fuel bundles had been conducted in recent years; however, documentation of past spent fuel bundle disassembly operations had proven inadequate. There was at least one lapse, which occurred over two decades ago, in tracking individual fuel rod pieces from the point at which they were stored in the SFP and to their final destination.

Documentation of other rods removed from their parent assemblies were adequate. Records indicated that segments and pellets in a vacuum cleaner

-15-bag had been suspended at one time from the side of pool, but there were no records to explain what had happened to them.

c.

Pieces of fuel and non-fuel components were physically segregated from fuel assemblies in the SFP at the time of this inspection; however, this had not always been the practice.

d.

Current practice was to clearly document physical movements of spent fuel or other components within or outside the SFP. Responsibility for documenting discrete activities within the SFP was clearly assigned. Written procedures had been prepared to document and govern movement of all items of spent fuel, including pieces of rods.

e.

The licensees quality assurance group was responsible for periodic review and assessment of the MC&A program and to assure followup on recommendations from the periodic review.

f.

Approved versions of written procedures were available on the licensees computer, and a requirement was in place that the version of a procedure used be the up-to-date copy obtained from the computer database.

g.

The licensee provided management oversight of all SFP operations, including those performed by an outside vendor. A licensed operator was required to be present during all SFP operations. Records of all SFP operations were prepared and retained.

h.

The licensee had been given an exemption from the requirement to conduct annual physical inventories during the period of time when the pool was covered with a locked and tamper-safed cover. However, current practice was to conduct annual physical inventories in accordance with written procedures.

A SFP map was maintained current, which showed fuel assemblies and other SNM containers. Inventory had been performed historically by using binoculars and confirming that all assembly identifiers on the previous inventory were unchanged; however, the licensee was currently using a video camera.

i.

A statistical random sample of items from the current SFP map was inspected to verify their locations within the SFP and no discrepancies were found.

There were no individual separated rods stored in the SFP.

4.3 Conclusions Although lapses in accounting and control had occurred in the past, the licensees existing program for accounting for and controlling SNM meets regulatory requirements.

-16-5.0 Other SNM in the SFP (Inspection Procedure 93812)

5.1 Inspection Scope The inspectors reviewed Event Report 41430 and Licensee Event Report (LER) 2005-002 5.2 Observations and Findings On February 22, 2005, the licensee notified the NRC pursuant to the requirements of 10 CFR 20.2201(a)(1)(ii) that it was unable to locate one intact in-core detector and parts of three others (Event Report 41430). Also on February 22, 2005, the licensee issued the 10 CFR 20.2201(b)(1) required LER 2005-002, Missing In-core Detectors.

The discrepancy was identified on February 4, 2005, following a review of records and completion of the physical inventory of all SNM in the SFP. The licensee estimated that the missing in-core detectors contained up to approximately 0.15 grams of uranium-235.

Records showed that the plant had 18 irradiated in-core assemblies. Each consisted of a 16-foot long tube with three in-core detectors (approximately 2.5 inches long)

totaling 54 irradiated in-core detectors. During SFP cleanup activities conducted between 1970 and 1980, workers cut the in-core assemblies to facilitate their storage, accidentally severing some of the in-core detectors. The licensee located only 50 intact in-core detectors and 3 partial detectors.

The licensee had found no evidence to support the possibility of theft or diversion of the missing in-core detectors. The licensee believed that they were probably shipped off site to a licensed, monitored and restricted radiological control disposal facility, and hence posed no threat to public health or safety.

5.3 Conclusions This notification occurred after the last inspectors site visit and the inspectors have not evaluated its specific implications, but the event is considered another example of problems with the accounting of SNM. The conditions that resulted in the loss of the in-core detectors, their fate, and the consequences associated with their loss is considered an unresolved item (URI 50-133/0501-06). This matter will be reviewed as part of the continuation of the special inspection.

-17-6.0 Radiological Characterization of Fuel Rod Segments (Inspection Procedure 93812)

6.1 Inspection Scope The inspectors reviewed the licensees radiological characterization of the three 18-inch missing fuel rod segments as presented in the LER 2004-001. The inspectors compared the radiation rate surveys conducted on identified fuel fragments with the calculated radiation rates for the missing fuel segments.

6.2 Observations and Findings The proper radiological characterization of the missing fuel segments is important in evaluating the environmental and health risks associated with the missing fuel segments. Proper radiological characterization is also important in the evaluation of the potential for the theft or diversion of the fuel segments. Materials that due to their radiological characteristics would be promptly hazardous to anyone handling them without proper tools or that would be easily detected by radiation monitors are more difficult to steal or divert than those that do not possess these radiological characteristics. Specific radionuclide constituents of the segments must be deduced from those characteristics that are known. The licensee has records indicating the mass, percent enrichment, and burnup of Assembly A-49. This information was used by the licensee to estimate the radionuclide or isotopic inventory and from this inventory the dose rate in rads per hour can be deduced.

Pacific Gas and Electric Company submitted LER 2004-001, Three Missing Fuel Segments, on August 16, 2004. This LER included three tables that described the segments, provided the isotopic inventory, and estimated the dose rates at three distances from the segments. This LER was subsequently revised on November 19, 2004. The revised LER included a note on the table of estimated dose rate summary explaining the observed difference between the calculated dose rates and those measured on fuel fragments found in the SFP. The differences were attributed to the fact that the actual measurements were made in water while the calculations were for air, the effective distance between an actual detector and the model used in the calculation, and conservatism in the calculated values. Although a higher value would be conservative when protecting personnel it would be non-conservative when considering detection.

The measured contact dose rates in fragments ranged from 65 R/hr to 413 R/hr whereas in 2005, the calculated dose rate at contact for the 18-inch segments would be 4420 rad/hr. In their interim report, the licensee indicated that the terms rad and Roentgen (R) were used interchangeably. This would be generally correct if the entire dose was attributable to gamma radiation. In a telephone conversation held between the team leader and the licensee on March 9, 2005, cognizant licensee radiation protection personnel stated that they needed to review some of the factors and assumptions used by the computer code to calculate the dose rates.

-18-If the calculated values are correct then the measured values would not support the scenario that the cut 18-inch segments from A-49 are now in the form of broken fragments that have been found in the SFP.

6.3 Conclusions The inspectors concluded that anyone attempting to remove the 18-inch segments, other than in a heavy, shielded cask would be subject to life-threatening radiation exposure. The inspectors also concluded that the segments would have been detectable by the plant radiation monitors. However, the specific radiological dose rate from the missing 18-segments estimated by the licensee will require further review during the continuation of the special inspection.

7.0 Licensee Briefings The inspectors conducted briefings of preliminary inspection findings with licensee senior plant managers at the conclusion of each site visit. On January 31, 2005, a telephonic briefing was conducted with senior licensee managers that described the items that appear to be violations of applicable regulations or that were considered unresolved. A subsequent telephonic briefing was conducted with senior licensee managers on March 31, 2005, to discuss the extent of inclusion of the licensees February 22, 2005, notifications and reports.

ATTACHMENT SUPPLEMENTAL INSPECTION INFORMATION PARTIAL LIST OF PERSONS CONTACTED J. Albers, Radiation Protection Manager M. Anthony, Decontamination Specialist W. Barkhuff, Metallurgist Diablo Canyon G. Bierbaum, Engineer J. Brimble, Supervisor of Maintenance J. Galle, Sr. Design Engineer Manager J. Hill, Inservice Inspector Diablo Canyon V. Jensen, Nuclear Quality Services Supervisor C. Kudla, SNM Control and Accountability Project G. McKinnon, Control Operator P. Narbut, Nuclear Quality Services Inspector B. Norton, Project Manager SNM Control and Accountability Project R. Parker, Senior Radiation Protection Engineer J. Rasmussen, Senior Control Operator D. Swanson, Shift Foreman M. Smith, Engineering Manager D. Sokolsky, Supervisor of Licensing R. Willis, Plant Manager INSPECTION PROCEDURES USED IP 93812 Special Inspection TI 2515/154 Spent Fuel Material Control and Accounting at Nuclear Power Plants ITEMS OPENED, CLOSED, AND DISCUSSED Opened 50-133/0501-01 URI As of January 31, 2005, the current location and reportability of an unspecified number of fuel pellets last accounted for on June 7, 1976, as stored in a vacuum bag hung from the side of SFP had not been determined.

50-133/0501-02 URI As of January 31, 2005, the current location of the three 18-inch segments from irradiated fuel Assembly A-49, that was first reported missing by Pacific Gas & Electric on July 16, 2004, had not been determined.

50-133/0501-03 APV Contrary to the requirements of 10 CFR 74.19(a)(1) from August 6, 1969, Pacific Gas and Electric Company, failed to keep records showing the inventory, transfer or disposal of three approximately 18-inch segments of irradiated fuel containing approximately 14.1 grams of SNM.

-2-50-133/0501-04 APV Contrary to the requirements of 10 CFR 74.19(b), from June 4, 1971, Pacific Gas and Electric Company, failed to establish, maintain, and follow written material control and accounting procedures sufficient to enable it to account for the SNM in its possession. Specifically, Pacific Gas and Electric Company failed to account for 6365 grams of uranium, 104 grams of uranium-235, and 23 grams of plutonium contained in remnants from Type 1 damaged fuel assemblies.

50-133/0501-05 APV Contrary to the requirements of 10 CFR 74.19(c), Pacific Gas and Electric Company, failed to conduct a physical inventory of all SNM in its possession at intervals not to exceed 12 months.

Specifically, inventories performed by Pacific Gas and Electric Company from June 4, 1971, to September 30, 2004, did not include fuel fragments and other SNM remnants from Type 1 damaged fuel assemblies.

50-133/0501-06 URI The conditions that resulted in the loss of one complete in-core detector and parts of three others, their fate, and the consequences associated with their loss has not been reviewed by the NRC.

50-133/0501-07 APV From November 18, 2002, through September 10, 2004, the licensee possessed SNM in the form of fuel fragments and was not authorized by the technical specifications in effect at that time to possess SNM in this form.

Discussed 50-133/0304-01 IFI Review the licensees investigation of what actions were taken, or should have been taken, upon discovery of the fuel fragments.

50-133/0304-02 IFI Review the licensees re-assessment of the SNM possessed under the license and the accuracy of material status reports previously submitted.

Closed 50-133/0401-01 URI From July 15, 1985, through September 10, 2004, the licensee possessed special nuclear material in the form of fuel fragments and was not authorized by the technical specifications in effect at that time to possess special nuclear material in this form.

-3-LIST OF ACRONYMS IFI Inspection Followup Item IP Inspection Procedure LER Licensee Event Report MC&A Material Control and Accounting NRC Nuclear Regulatory Commission PG&E Pacific Gas and Electric Company R

Roentgen SNM Special Nuclear Material SFP Spent Fuel Pool TI Temporary Instruction URI Unresolved Item APV Apparent Violation