ML070090266

Final Transition Letter and Attachment, Revision 1 (1-8-07)

ML070090266
Person / Time
Site:	Perry
Issue date:	01/08/2007
From:	Pearce L FirstEnergy Nuclear Operating Co
To:	Caldwell J Region 3 Administrator
References
PY-CEI/OIE-0689L
Download: ML070090266 (24)

Text

FENOC 10 Center Road FirstEnergy Nuclear Operating Company Perry, Ohio 44081 L Willi#~n Pe~ce 440-280-5382 Vice President Fax: 440-280-8029 January 8, 2007 PY-CEI/OIE-0689L Mr. JamesL. Caldwell Nuclear Regulatory Commission RegionalAdministrator, RegionIII 2443Warrenville Road,Suite 210 Lisle, Illinois 60532-4352 Perry Nuclear PowerPlant Docket No. 50-440 License No. NPF-58

Subject:

Correction to Perry Nuclear PowerPlant PerformanceImprovementInitiative Summary Report, SubmittedJanuary3, 2007

DearMr. Caldwell,

Thepurposeof this letter is to inform youof an error identified in the attachmentto a FirstEnergy Nuclear Operating Company (FENOC) letter to you dated January 3, 2007 and to provide corrected information. In the letter FENOC sent the Perry Nuclear PowerPlant Performance ImprovementInitiative Summary Report as an attachment. OnJanuary 5, 2007, an error was discoveredin the data usedto compiletwo of the charts presentedon page6 of the attachment.

This data error affected the magnitude of eachof the bars depictedon the charts in a similar fashion but the basic trend demonstratedby the chart did not change.Thedata has been correctedandpage6 of the report hasbeenrevised to reflect the correct data.

Additionally data has beenincludedfor two of the trend charts that are presentedon pages10 and 11 of the report. This data wasnot completewhenthe report wasmailed; therefore these two pagesof the report havebeenupdated.

Thereport wasalso reviewedto ensurethat noneof the conclusionswereaffected by the changesto the data. Thecharts are usedto illustrate the performance trends andthe trends did not change,therefore the conclusionsremainvalid.

FENOC is providing, attached, Revision1 to the previously submittedreport whichreplaces the January3, 2007,attachmentin its entirety. FENOC will refer to the attachedRevision1 of the report in the forthcomingmeetingon January10, 2007.

Thereare no additional commitments containedin this letter. If youhavequestionsor require additional information, please contact Mr. Jeffrey Lausberg- Manager,RegulatoryCompliance at (440) 280-5940.

PY-CEI/OIE-0689L Page2 Verytruly yo/~rs, Attachment cc: DocumentControl Desk NRCProject Manager NRCResident Inspector E. Duncan,NRCRill

Attachment PY-CEI/OIE-0689L Page 1 PERRY NUCLEAR POWERPLANT PERFORMANCE IMPROVEMENTINITIATIVE

SUMMARY

REPORT REVISION1 Purpose Thepurposeof this report is to provide a summary of the key results achievedat the Perry Nuclear PowerPlant (PNPP)through the implementationof the Performance Improvement Initiative (PII) process. This report also provides a high level assessment of the areas addressedby the PII, the sustained performanceachievedand future continuousimprovement focus areas. Eachindividual PII initiative hasa detailed closure report documenting the results andconclusionsof the improvements, and a moredetailed overall closure report for PII Phase2 (P2) has beenpreparedand approved.

Introduction In Augustof 2003, the NRCincreasedthe oversight of PNPP as required for a DegradedMitigating SystemsCornerstoneresulting from two White Findings. TheWhite Findings resulted from problems encounteredwith air binding in the Residual Heat Removaland LowPressureCore Spray (RHR/LPCS) systemsfollowing a loss of offsite power,and failure of an Emergency Service Water(ESW)Pump coupling following maintenance.Further, performancedeficiencies encounteredin the evaluation and untimelyexecutionof corrective actions for these WhiteFindings led the NRCto place PNPP in the Repetitive DegradedCornerstoneof the ReactorOversight ProcessAction Matrix (ColumnIV of the Action Matrix) in Augustof 2004. This level of performance also led the NRC to identify a substantive cross-cutting issue in the ProblemIdentification andResolutionarea (Augustof 2004). Based findings during inspections NRC also identified a substantive cross-cutting issue in the Human Performancearea (in March2005). In accordancewith NRCInspection ManualChapter(MC) 0305, NRCconductedsupplementalinspections following Inspection Procedure(IP) 95003during the first half of 2005.

Beginningin 2004, First EnergyNuclear Operating Company (FENOC) undertookextensive actions determinethe root causesof the deficiencies related to PNPP systemperformance,program performance,and performanceof the PNPPorganization. Theseassessmentsled FENOC to establish the PII in 2004to improveperformance of the station organizationand the plant. Thepaceof improvement in 2004and the first half of 2005did not alwaysmeetthe expectationsof FENOC or the NRC.Therefore, FENOC established the PII P2 to respondto the NRC95003Inspection findings, to achievefurther improvement in performance,to integrate the fleet programsinto the processandculture at PNPP,and to ensure that the performanceimprovementwouldbe sustained. Additionally, the NRC issued a confirmatoryaction letter (CAL)on September 28, 2005to confirm the acceptability commitmentsmadeby FENOC to improve performanceat PNPPand to complete 13 specific actions in the PII P2 (i.e. CALCommitments)

PNPP has nowcompletedimplementationof all of the actions identified through the CALCommitments, as well as the actions in the PII P2 (reference FENOC letter dated December 20, 2006.) Throughthe PII P2 initiatives, PNPP has madesubstantial improvements in performance,has anchoredthose improvements in its proceduresand processesto ensurethat those improvements are sustained in the future, and has established a culture of continuousimprovement through the FENOC fleet standard programs.Theseachievements provide sufficient basis for closure of the PII andallow the normal performanceimprovementprocesses, as prescribed in the FENOC BusinessPlan, to support continuous improvement.

PerformanceImprovement Initiative During the development of PII Phase1 in early 2004, several equipmentand organizational root causes and collective significance reviews werecompleted.Out of these reviews, the PII wasdevelopedand wasprimarily a discoveryprocessfor organizationaleffectiveness. Theresult of this effort wasthe identification of performance gapsthat fed into the Phase2 effort. In addition, there weresignificant improvements madeto the plant equipment,including, for example,resolution of long standing technical

Attachment PY-CEI/OIE-0689L Page 2 issues with the Emergency Diesel Generator Testable Rupture Disc and Emergency Service Water pumps.

In developingthe PII P2, FENOC included initiatives in WorkManagement, Training, Employee Engagement and Operational FocusbecausePNPPrecognized the interrelationship betweenthe cross-cutting areas of Human Performanceand Corrective Action Program(CAP)implementationand other processesand performanceareas. Issued in August2005, the PII P2 has been completedover the last 16 months.Thegoals of the individual initiatives in the PII P2 wereto providesubstantial, measurable improvementin the HumanPerformanceProgram, Corrective Action Program, and work management process implementationsupportedby initiatives in employeeengagement, operational focus, and training. ThePII P2 wasintended to provide the meansto sustain the improvedperformancethrough anchoring the improvementsin enhancedprocessesand procedurescoupled with performance indicators to monitorresults and a robust continuousimprovement processandculture. A key learning for the station during PII P2 wasthe ability to value critical self-assessments. Theessenceof a viable continuousimprovement programis strong performancein the identification of performancegaps, the analysisandplanningof actions to close thosegaps,andimplementation of effective activities to improveplant safety andreliability.

Throughthe PII P2, PNPPstation management team and employeesimproved performanceof the equipmentand programsat the PNPP station from less than adequatelevels in 2004to medianindustry performancelevels, or above, at the close of 2006. The PNPP management team has demonstratedits ability to resolve the issues that led to less than adequatepast performance andto continuouslyimprove HumanPerformanceand implementation of the Corrective Action Programat PNPP.During the period from August 2004 through December2006, FENOC madesteady progress toward identifying and correcting the specific problemsthat led to the entry of PNPP into Column IV of the Action Matrix, and designationof the two cross cutting issues, andachievingthe goals and objectivesof PII P2.

The requisite licensee actions for performanceimprovement,as defined by the NRCMC0305for the Multiple/Repetitive Degraded Cornerstone(i.e. ColumnIV of the Action Matrix), havebeen accomplishedas follows:

- Corrective action commitments to resolve the root causesand prevent recurrenceof the conditions that led to the WhiteFindings in Mitigating Systemsand Emergency Preparedness are completeand effective.

Commitments identified in the CALare completeand the programmaticand organizational performanceissues identified through the NRC95003inspection have beenaddressed throughthe PII (Phases1 and2) and are resolved.

Correctiveactions to resolve the root andcontributing causesof the substantivecross-cutting issues in Human Performanceand Corrective Action Programimplementationare completeand there havebeenno newplant events or findings, during the past 12 months, that reveal similar significant performance issuesin thesecross-cuttingareas.

Performance in the following areas has beensubstantially improvedand sustainedas demonstrated throughthe results of specific PII initiatives, the completionof CAL Commitments and key performanceindicators for eachof the following focus areas:

o CAPImplementation (CAL and PII Focus Area) o HumanPerformance (CAL and PII Focus Area) o Work Management(PII Focus Area) o Emergency Preparedness (CAL) o Maintenance Procedures (CAL) o Operational Focus(PII FocusArea) o Training (PII FocusArea) o EmployeeEngagement(PII Focus Area).

Attachment PY-CEI/OIE-0689L Page3 Self and peer-assisted assessments of performance in the six Pll focus areas have been completed.In five of the areas, these assessments ascertainedthat substantial improvements havebeenachievedtogether and also identified areas for improvement.In the areaof OperationalFocus(PII FocusArea), the assessment identified that limited improvementshad been achieved, howeverimportant areas for improvementremained.

Thesehavebeencarried forward to the Perry and FENOC Fleet Excellence Plans.

- FENOC has the right management team in place at PNPPand Excellence Plans have been developedto ensurecontinuedfocus on those areas for improvement that will help ensure that performanceimprovements are sustained and continuous progresstoward excellence is madeat a pace prescribed by the FENOC Fleet management through the business plan and performance improvementmodel.

- NRCand Perry performanceindicators do not indicate significant performanceweaknesses that have not been adequatelyaddressed.

FENOC and Perry management has successfully usedkey performanceindicators to track performancecoupled with a management review process to assure that Perry station performancegoals are achieved. Performancetrends will continue to be assessedagainst FENOC standards and KPIs will continue to be used in achieving FENOCs Excellence Plan goals.

In summary, the PII P2 provided the frameworkfor actions to achieveand sustain the necessary improvements in performanceand for the key programsand processesfor the six PII focus areas. The performanceimprovementswereconfirmed through self- and peer-assisted assessmentsconductedas part of the formal closure of the PII. This higher level of performance has beensustainedand PNPP has nowtransitioned from the PII P2 to the FENOC Fleet ExcellencePlan. Foundedon the industrys PerformanceImprovementModelthe FENOC Fleet Excellence Plan provides the frameworkfor the behavioral improvementsneededfor a robust continuousimprovementculture. The combinationof the improvementsachievedthrough the PII P2, the FENOC Fleet BusinessPlan and the implementationof the ExcellencePlans provide the foundation for continuousimprovement and achieving further improvementsin areas such as Operational Focus.

Closure Assessment for PII FocusAreas This section of this report summarizes the moreimportant achievements and the related areas for continuedimprovement identified througha series of critical self-assessments performedin eachof the six PII focusareas.

Corrective Action Program ThePII P2 initiative for the Corrective Action Program(CAP)has beencompleted.Thetargeted areas of causeevaluation andimplementationof corrective actions haveimproved.

FocusAreasfor Improvement: Theinitiative actions wereorganizedto align with the structure of a corrective action program.Theactions ensuredthe foundational elementsexisted and built performance skills to strengthenthe overall performance.Theareas for improvement include:

- Ownership: Ownershipand station focus on CAP

- Identification: Self-identification of problemsandtrendingof issuesfor early detection

- Analysis: CauseAnalysis quality and timeliness and corrective action planning

- Documentation:Quality of closure documentation

- Programmonitoring: Management oversight of the Corrective Action Program

Attachment PY-CEI/OIE-0689L Page 4 PerformanceResults Corrective Action Programperformanceduring 2006 has shownsubstantial improvementin the timeliness andquality of the causeevaluations.In particular, the timelinessof completingthe evaluations and the implementationof corrective actions has improveddemonstratingimproved ownershipby the line personnel. Thecontrolling proceduresand businesspractices contain expectationsand goals commensurate with industry standardsfor timeliness. Active participation in the Corrective Action ProgramOwnersGroup(CAPOG) by the Fleet Corrective Action Groupassures that the programis current with industry standards. The CAPOG is extremely active and FENOC is hosting the 2007 biannual conference. Thegraphs belowshowthe improvementin the 6-monthrolling averagesin the timeliness of apparentcauseevaluationsand corrective actions.

Timeliness of Apparent Causes 100-90 8O 7O Percent 60 Completed 50 On Time 40 30 2O 10 0

Jan Feb Mar Apt May Jun Jul Aug Sep Oct Nov 2006 Timeliness of Corrective Actions 90 8O Percent 700j Completed40 On t 10Time2030 0

Jan Mar May Jul Sep Nov

[] Preventative Actions 2006

[] RemedialActions Timelinessfor root causeevaluations andoverall Condition report (CR)closures havelikewise demonstratedsustained improvementover the period.

Thequality of the products from the Corrective Action Programhas improved.Theindicator showingthe Corrective Action ReviewBoard(CARB)approval of ApparentCauseevaluations is depicted below.

Theimprovement in the quality of ApparentCauseevaluations demonstratedon the indicator is a productof the PII actions that increasedthe level of performance of CARBand the training given to the

Attachment PY-CEI/OIE-0689L Page 5 CR evaluators and the CR Analysts. This further demonstrates improvementeven while the standards and expectations were being raised. This is an important indicator becauseit demonstrates improving managementownership and leadership.

Quality of Apparent Causes 100 95 Percent Approved90 by CARB 85 8O 75-Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2006 A similar sustained improvementhas been achieved for root causes. This is demonstrated through the CARBapproval rate and the grade given to each root cause evaluation after review by CARB.

Additionally, this sameimprovementtrend can be demonstrated for corrective actions. The graph below showsthe improvementin the quality of the corrective actions over the period. A reject is counted if any of the reviews after completionfind the corrective action to be deficient, whetherthe review is a CARB,Oversight, CR Analyst or other review.

Corrective Actions Rejected 16 14 12 10 Percent 8

Rejected 6

4-2 0-Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2005 2006 The 6-month rolling averagesfor initiation rate and work-off rate of CRsdepicts a healthy programas shownon the following graphs. The threshold for identification is continuing to lower causing a higher initiation rate. Thestaff is able to maintain a work off rate of greater than 1.0, demonstratingthe ability to keep up with the higher influx. Thesegraphs demonstratethe result of effective actions taken to improvethe self-identification and prioritization of problemsand the sites priority for assuring the timely

Attachment PY-CEI/OIE-0689L Page 6 implementation of CAP. The improved focus of the PNPPstaff on "working todays issues today" is also evident below.

CRsInitiation Rate 600 500 ...............................

400 3O0 200 100 0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 The work-off rate is a ratio of the closed CRsto influx of newCRs. Anything greater than 1.0 indicates that moreCRswere closed than were initiated.

CRWorkOff Rate 1.15 1.1 1.05 CR Closed per CR 1 Initated 0.95 0.9 0.85 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006

Attachment PY-CEI/OIE-0689L Page 7 Finally, a true measure of the improvementof Corrective Action Programis, whenlooking at the graphs in aggregate, the throughput of the programis healthy and the total inventory is decreasing to industry excellence standards. A single unit plant inventory should be approximately 500 open condition reports based on industry benchmarking. PNPP,with a healthy input and good attention to evaluating and resolving problems, shows a good trend towards this standard of excellence. Note that the Total Open CRsgraph belowis relatively newand no industry comparabledata is available for the first three months of this year.

Total Open CRs 1400~

1200 I000i 800i" 600 t

400 2°°11 0~

Jan Mar May Jul Sep Nov 2006 PerformanceMonitoring EighteenKey Performance Indicators (KPIs) are usedto monitor the performanceof the mainelements of the Corrective Action Program.Theseindicators are publishedand reviewedon a monthlybasis.

EachKPI graph showsthe performanceof the PNPPorganization in implementationof each of the key CAPelements for each monthover the past 12 months.TheseKPIs are producedfor the PNPPsite as a wholeand for eachsection of the PNPP organization.

An aggregatescore card for 2005/2006wasproducedto showthe trend of these indicators on the following table over an extendedperiod of time. Eachrowof the score card representsone of the 18 KPIs. It showsthat performance of the Corrective Action Programis improvingby a shifting of predominantlyred or yellow windowsin 2005to predominantlywhite and greenin the mostrecent monthsof 2006. KPI 15, MedianAge of CRshas not showndramatic improvement.The reason for only slight improvement is that as moreemphasisis placed on workingtodays problems,someof the older, less significant CRsare not being worked.Hence,the increasedage masksthe real improvement in culture being realized by the PNPP staff. KPI 16, %Effectiveness ReviewsThat ConcludeIneffective Corrective Actions to Prevent Recurrence(CAPRs),has shownrelatively poor performanceprimarily dueto the low numberof data points.

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)u~leRelm~ co.l~l~e Closure AssessmentConclusion Throughthe conduct of self-assessments, review of performanceindicators, and the review of the CAP Pll actions by the Closure Validation and ReviewBoard (CVRB),FENOC has concluded that there has been substantial improvementin the implementationof the CAP.Self-assessments have confirmed that ownership for implementing the CAPhas improved as indicatedby a clear understanding of roles and responsibilities amongall levels within the organization. Interviewsconductedwith workersduringself-assessments indicated a goodunderstanding of managements expectationswith respectto CAP amongboth workers and supervisors. A low threshold for problemreporting and improvementin the classificationandprioritization of actionsto resolveidentifiedproblems hasbeenobserved. Active management oversight has lead to improvedquality in root and apparentcause evaluations and more effective correctiveactions.Thusthe effectivenessof correctiveactionshasalso improved. Theareas for improvement identified throughself-assessments are capturedin the corrective action program.

As notedabove,the root and contributingcauseshavebeenaddressed by implementing the corrective actions throughthe CAPPII P2. Site personnel, including supervisors and managers,have been trained to expectationsandaccountabilitymethods usedto measure the implementation of the CAP.Part of the training included the role of a Corrective Action Programin a "learning organization"andhowCAPmust be usedto drive station improvement. Newemployees receiveintroductorytraining of CAPduringthe Plant Access Training (PAT)and receive an orientation manualthat contains key aspects of successful CAP.

In July 2005, an improved set of CAPKPIsweredeveloped andare periodically reviewedby management.Various levels of management review processes have been instituted to ensure adequate oversight of the health of CAPgoing forward. These include the Corrective Action ReviewBoard (GARB),Management ReviewBoard(MRB), Senior LeadershipTeam(SLT) and Management PerformanceReview(MPR)meetings. Intervention actions are implementedif declining unsatisfactory performance / trendsare identified.

Continuous improvementin CAPimplementation is assured through: FENOC Fleet governance of the process, site ownershipof the CAPimplementation, management oversight, sound procedures and policies, monitoring of KeyPerformance Indicators,andthe useof critical self-assessments and

Attachment PY-CEI/OIE-0689L Page 9 benchmarking.Fleet oversight is exercised through management observations of CARB and participation in monthlyperformancereview meetings.

Fleet ownershipof the proceduresand businesspractices enhancethe level of assurancethat improvementswill be sustained becauseFENOC business practices are benchmarked to industry acceptedpractices and changesrequire concurrencefrom all sites involved. This coordination helps ensure accuracyand consistency while at the sametime standardscomparefavorably to industry acceptedpractices.

The self-assessmentand benchmarking processescontinue to be usedto evaluate the implementation of CAPand to ensure that subsequentanalysis of adversetrends promotecontinuous improvement by designingactions basedon the industrys top performers.

Comparingcurrent performanceto the successmeasuresand the metrics describedin the CAPPII, whichincludes site personnelroutinely meetingCAPexpectations,the incorporation of CAPinto performancemanagement plans, collegial reviews of CAPperformance,and quality of corrective actions, indicates these measureshavebeenachieved. However,additional actions to sustain continued improvementare planned.

It is therefore concludedthat the FENOC Fleet businesspractices, in conjunctionwith the useof responsiveperformance indicators and effective CAPoversight, provide sufficient frameworkto promote continuousimprovement in the implementationof CAPat PNPP andsupport closure of this initiative.

Conclusion In summary,the threshold for capturing problemsin the Corrective Action Programhas beenloweredto levels that ensureissues of low significance are beingidentified. Thereviewandprioritization process for CRsprovides confidencethat problemsare visible for managements attention. PNPPperformance demonstrates that the staff is able to focus on evaluatingand solving the problemswith improved timeliness andimprovedquality. Additionally, the PNPP staff has demonstrated that it cansustain these improvements in timeliness and causeevaluation quality while also improvingclosure quality and handling an increased numberof CRs.Theultimate benefit of goodCAPperformanceis morereliable equipment, improvedorganizational performance,and enhancedsafety. The improvementsevidenced by CAPperformance indicators, coupledwith improvedsafety systemunavailability, illustrate that the disciplined executionof the Corrective Action Programhas become an integral and effective component of the day-to-day businessat PNPP.

HumanPerformance ThePII P2 initiative for Human Performancehas been completed.The improveduse of humanerror reductionstools alongwith strengthenedbarriers haveprovento be effective in limiting human performance errors that result in plant eventsor challengesto the operationsstaff.

FocusAreasfor Improvement: Theinitiative actions wereorganizedin three distinct stages which include:

- ProgramStructure: Setting performanceexpectations and communication of roles and responsibilities

- BehaviorModification: Enhancement of andtraining on Error PreventionTools andline ownership,alignment, andintegration

- Discipline in Execution:Monitoringandline accountability for results, procedureadherence, andconfirmationof effectivenessof actions

Attachment PY-CEI/OIE-0689L Page 10 PerformanceResults The HumanPerformanceprogrampromotesthe prevention of plant events due to humanerror by focusing on sustaining error-prevention behaviors. ThePerry PII for Human Performance drove improvement in the behaviorswhichproduceda decreasein consequentialevents that "reset" the Station Clock. Thegraph belowshowsthis improvingtrend starting in the secondquarter of 2005. This wasaccomplished in three distinct stages. First, the programstructure wasestablished to provide enhancedroles and responsibilities, management expectations, and improvedprocesses. Oncethe programstructure wasin place, training on expectedbehaviorsand error-prevention tools was conducted for all site personnel.Servingboth to increasethe skills andbehaviorsof the workers,the newlevel of awareness on human performance resulted in a reduction in station events attributable to human errors. Finally, the disciplined executionof the processesandbehaviorscontinuedthis improvingtrend to a low numberof station events. This level of performancehas nowbeensustained for four quarters.

Station Human Performance Clock Resets 7

6 5

4 3

2-1 0

1st 2nd 3rd 4th 1st 2nd 3rd 4th 2005 2006 SectionClock resets are eventsof lower significance than the Station Clock resets, but eachevent is considereda learning opportunity. Thestations ability to preventconsequentialeventscausedby human error is enhanced by the study and learning from the precursor events of low significance. The indicator belowshowsan increaseduse of this learning tool demonstratinga greater focus on learning from precursor events. The2005horizontal line indicates an approximatesteady state numberof resets or learning opportunities. The2006line indicates a newsteady state numberof learning opportunities

Attachment PY-CEI/OIE-0689L Page 11 each quarter beginning in 2006. This step change coincides with completion of key Pll actions and confirmsthe effectivenessof this initiative.

Section Human Performance Clock Resets 8o 70 60 5o 40 3o 20 10 0

1st 2nd 3rd 4th 1st 2nd 3rd 4th 2005 2006 Closure AssessmentConclusion:

Followinga reviewof the self-assessmentresults, performance indicators, and the effectiveness of HU PII, FENOC concluded that there had been substantial improvementin HumanPerformanceat PNPP and that these improvements are sustainable. Self-assessments have confirmedthat expectationsfor humanperformancehavebeenestablished, communicated and reinforced with all station personnel.

Management field observations and supervisory oversight ensure that humanperformance fundamentals are beingdemonstrated at all levels of the organization. Line accountability is being demonstratedthrough daily interactions, increasedemphasison monitoring and analysis of human performanceerrors, and support of the observation program.Theroot causesof procedureuse and adherenceissues including procedureupgradesare being addressedand are continuing to havea positive impact on Human Performanceimprovementefforts.

Sustained improvementin HumanPerformanceis being assured through four primary mechanisms.

Thesemechanisms include efficiently and effectively implementinghumanperformanceprocesses, monitoring performancethrough responsive performanceindicators, continuing an active management observationprogram,and conductingcritical self-assessments.

Theactions and improvements noted in this HUPII havebeenanchoredwithin Fleet businesspractices which provide reasonableassuranceof continuousimprovement due to the fact that all FENOC businesspractices are coordinatedthroughthe FENOC Fleet and require concurrencefrom all sites involved. This coordination helps ensureaccuracyand consistencywhile at the sametime being compared to industry acceptedpractices. ThePNPP organization continues to utilize these business practices in the evaluation and improvement of human performance at all levels -- thus ensuringthat performanceexpectations are achieved.

Performanceindicators for monitoring humanperformanceare usedto monitor and improve performanceacross the PNPP site. Theseindicators have beenadaptedfrom top performing organizations and are usedby management to provide reasonableassurancethat adversetrends will be promptly identified to station management. Theself-assessmentand benchmarking processeswill continue to be usedto ensurethese indicators and subsequentanalysis of adversetrends promote continuous improvement.

Attachment PY-CEI/OIE-0689L Page 12 The PNPP station performance,described above, clearly demonstratesthat the HumanPerformance Initiative has beensuccessful in achieving and sustaining improvedlevels of performance.Thesuccess measures andmetrics set forth in the HUPII (i.e. the site successclock goal of greater than 45 daysfor a 12-monthrolling averagebetweenresets and sustaining greater than 120 field observationsper month for a 3-monthperiod) havebeenachieved.

Conclusion The HumanPerformanceEffectiveness Self-Assessmentperformedin September,2006, confirmed that the desiredbehaviorshavebeeninstilled in the organizationat all levels. Benefits of increased attention to human error preventionhavealso beenobservedin the industrial safety statistics for the PNPP site. In this area of industrial safety, PNPP hasachievedzero OSHA recordablefor all of 2006.

In addition, plant personnelcontinueto achievean Industrial Safety AccidentRateof 0.00 against an industry top quartile of 0.16 OSHA recordables per 200,000man-hours.ThePNPPstaff has recently achievedthe notablemilestoneof over 2 million person-hours without a lost time accident.

Additionally, overall plant reliability hasimprovedwith a Capability Factor of approximately97%for 2006 up from a 2 year averageof 82%in Januaryof 2006, and ForcedLoss Rate of approximately1.1%,

improvedfrom a 2 year averageof 7.8%in Januaryof 2006. Thesehigh level indicators of safe and reliable plant performancedemonstratethe roll-up affect of improvedHuman Performance.

Work Management Effective WorkManagement is a direct contributor to performance in the cross-cutting area of Human Performanceand also contributes to improvedimplementationof CAP.As such, effective Work Management is a key attribute of a growingand improvingsafety culture at PNPP.ThePII P2 initiative for WorkManagement has achievedperformancelevels that are comparableto the other nuclear stations in the FENOC fleet and meetsor exceedsindustry standards. The WorkManagement process providesthe fundamental structure for efficient use of station resourcesas well as overall improvement of equipmentcondition. Theworkmanagement processis one of an integrated set of processesfor the operationand supportof nuclear plants.

The principles of the Effective WorkManagement improvement actions wereorganizedinto four general areas:

- Timelyidentification: Providingtimely identification, selection, planning,coordination,and executionof worknecessaryto maximizethe availability andreliability of station equipment and systems.

- Managed risk: To manage the risk associated with conducting work.

- Discipline in Execution:Toidentify the impactof workto the station andworkgroupsandto protect the station fromunanticipatedtransients dueto the conductof work

- Efficiency andEffectiveness:To maximizethe efficiency andeffectivenessof station staff and material resources An effective work management processshould accomplishthe following:

1. Promoteandimprovenuclear, industrial, andradiological safety performance.

2. Improveequipmentperformanceand systemhealth.

3. Increaseproductivity throughthe efficient useof resources.

4. Providefor a long-rangeplan to include major design changesandpredictive andperiodic maintenance activities. This should include provisions to addressequipmentobsolescenceand asset management.

Eachof theseis discussedin moredetail below.

Attachment PY-CEI/OIE-0689L Page 13 Performance Results

1. Promoteand improve nuclear, industrial, and radiological safety performance.

Work Managementperformance improvement was implemented to ultimately improve overall system health for nuclear safety and reliability. Nuclear safety has improvedover the past 10 monthsas indicated by overall performanceand availability of safety systems. For example:

Emergency AC Power The EmergencyACPower indicator shows an improving trend in unavailability hours. This is a measure of timely and effective maintenance performed on the EmergencyDiesel Generators. Past management maintenancestrategy served to improve the reliability of the EDGsby performing required maintenance on-line. The consequencesof this strategy were an adverse effect on unavailability hours. Present management has implemented a revised strategy that has both improved the reliability of the EDGsand improved the unavailability hours through a balanced approach to divisional outages and refuel outage work.

EMERGENCYAC POWER 0.0250 ..........................................................................................................................................................................................................................................................................

340 0.0200 265 0.0150 ~ Month Actual 190 MonthBudget.... ~_,~Budget Unavailability INPO TopQrU O 3yr Actual U/A 0.0100 115 0.0050 40

~~

m /

0.0000 , r i , -35 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV Note: Left Axis - 3 Year Rolling Average Unavailability Ratio. Right Axis - Unavailability Hours High Pressure Core Spray/Reactor Core Recirculation A similar trend is seen on the safety systemindicators for HPCS/RCIC systems.

o.o4oo HIGH PRESSURE CORESPRAY/ REACTORCOREISOLATION COOLING 115

, MonthActual 0.0350 v ,,,:,,: i Month Budget 95 0.0300

--I--Actual Unavailability 75 0.0250 0.0200 .... ~~1~ ............. ~-~4~o~. 55 0.0150 35 0.0100 15 0.0050 0.0000 -5 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV Note: Left Axis - 3 Year Rolling Average Unavailability Ratio. Right Axis - Unavailability Hours

Attachment PY-CEI/OIE-0689L Page 14 Residual Heat Removal ResidualHeat removalshowsa similar improvingtrend, Presentperformancesupports future top quartile performance levels.

RESIDUALHEAT REMOVAL 0.0150 65 60 55 50 0.0100 ~

~........................................... 40

""m------- ~ 35

~ Month Actual ,: ::, ::,::::,Month Budget 30

---I!--Actual Unavaitabilty INPO 1stQtr ~ 25 0,0050, ..-...~..-Budgeted Unavailabilty 20 15 10 5

0.0000 - ~ -- 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV Note:Left Axis - 3 YearRollingAverage UnavailabilityRatio. RightAxis - UnavailabilityHours It is clear that top quartile performance has not beenachieved,but the actions of the WorkManagement PII havebeensuccessfulin improvingnuclear safety.

As discussedabovein the humanperformanceimprovementsection above, the PNPPstation industrial safety statistics haveimproved.PNPP has achievedzero OSHA recordable incidents in 2006. In addition, plant personnelcontinueto achievean Industrial Safety AccidentRateof 0.00 against an industry top quartile of 0.16 OSHA recordablesper 200,000man-hours.

In the area of radiological safety, challengescontinueto exist. PNPP continuesto be in the bottom quartile for accumulated doseat nuclear plants in the country. However,a major chemicalcleaning effort to reducethe sourceterm will be completedduring the next outage. Thesesourceterm reduction plans for the next refueling outageand other dosereduction plans havebeenreviewedby several outside agencies and deemedappropriate.

2. Improveequipmentperformanceand system health.

TheWorkManagement processis focused on improvingoverall systemhealth for reliability. System health reports haveshownacceptable and steady systemperformancethroughout the year 2006. Use of systemhealth reports as an input to Plant Health Committee priority decisions and subsequent integration with work management process has provided the methodologyof implementingactions neededto improveequipment andsystemreliability issues. Highlevel indications of reliability are plant Capability Factor and ForcedLoss Rate.

Attachment PY-CEI/OIE-0689L Page 15 TheCapability Factor chart showsa high level of performancethroughoutthe year. Althoughchallenges haveoccurred, the significance of these and the severity havebeendecreasedsuchthat plant management has beenable to control the impact on plant operation.

CAPABILITY FACTOR 100- _ _ . =

6oi._=_Y_rDA~ual Actual[

Month L L--YTDBudgelj 40- ----

20

~,~;

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JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV TheForcedLoss Rate has beenmaintainedat very low levels. During the monthof May,2006, an unplanneddownpowerwasperformedto repair a hydraulic oil leak on the ReactorRecirculation Flow Control Valve actuator. In December, operators manuallyremovedthe reactor from operation due to degradinginstrument air pressure. Theplant wasrestarted 8 days later whenthe off gas systemwas returned to operation. Complicationswith high temperaturesin the charcoal bedswerethe primary reasonfor the downtime. During the period, the ForcedLoss Ratehas improved,returning to the businessplan value. It is recognized that there will be plant issuesthat affect this indicator, but solid organizational performancewill enable an improvement as demonstratedbelow.

FORCEDLOSSRATE 14.

12.

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JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV

3. Increaseproductivity throughthe efficient useof resources.

TheBusinessPlan wasdevelopedwith assumptionsand goals that reflect goodperformanceas benchmarked with the Electric Utility Cost Group.PNPP finished on plan whichdemonstratesefficient andeffective useof resources.

4. Providefor a long-rangeplan to include majordesign changesand predictive and periodic maintenance activities. This should include provisions to addressequipmentobsolescenceand asset management.

The EquipmentReliability, Maintenance,Outage,and the WorkManagement Excellence Plans contain the actions goingforwardfor continuing to improveequipmentandplant safety andreliability. Theplans also address obsolescenceand asset management.

Attachment PY-CEI/OIE-0689L Page 16 Closure AssessmentConclusion:

Followinga reviewof the self-assessment results, performance indicators, andthe effectivenessof the Work Management PII, FENOC concludedthat there has been substantial improvementin Work Management at PNPPand that these improvementsare sustainable. Self-assessmentshave confirmed through observations,interviews andperformance result reviewsthat expectationsfor process performancehavebeenestablished, communicated and reinforced, with the end result that the basic expectationsare understoodby all affected station personnel.Theseassessments also identified areas for improvement in work planning, executionof scheduledworkand craft participation in workpackage walk downs,which are being addressedin the excellenceplans.

Line organizationaccountability is being demonstrated throughdaily interactions, increasedemphasis on monitoring and analysis of work management performance,and support of the observation program both in WorkManagement meetingsand field observations. Thecausal factors of poor execution (poor preparation,failure to meetkeyprocessmilestones,lack of rigor in preparationactivities, poor communication andhand-offs betweenwork groups, and a lack of accountability for the successof the process) havebeen effectively addressedand the emphasison continued improvement of work preparationis apparent.

Thedeepercausesof inadequately managed changesand staffing reductions are nowhistorical, and improvements not related to the WorkManagement PII havebeenimplemented at the fleet level to prevent future changemanagement issues. Management turnover in the outage managerand work management managerpositions remains a challenge that the PNPPsenior management will monitor and addressuntil resolved.

Continued improvementin WorkManagement is assured through three primary mechanisms.These mechanisms include efficient and effective procedures,responsiveperformance indicators, and an active management observation program. Evidenceof this can be seen in the Work Management performanceindicators showingsteady improvement that has beensustained over an extendedperiod of one year at acceptableand/or improvinglevels. Wherethere havebeennegative trends, management has taken action to recover and improvespecific functions or performancegaps.

Theactions and improvements noted in this WorkManagement PII havebeen anchoredwithin Fleet businesspractices. This provides reasonableassuranceof continuousimprovement due to the fact that all FENOC businesspractices are coordinatedthroughthe Fleet and require concurrencefrom all sites involved. This fleet/peer ownershipand oversight ensuresconsistencywhile at the sametime incorporating industry acceptedpractices. ThePNPP organization continuesto utilize these business practices in the implementationand improvement of work management at all levels.

Conclusion Overall, the Effective WorkManagement PII waseffective in improvingplant safety, plant reliability, industrial safety, andradiological safety. Challengesexist in ensuringthe radiological improvement plans continueto receive attention. Theradiological plans are solidly basedon fundamentaldose reduction andsourceterm elimination. Theoutagerelated actions of the performance initiative were movedto the OutageExcellencePlan eadier in 2006and continue to be implementedby plant management. Throughpracticing teambuilding skills and OutageControl Centerprotocols during Divisional outages,the staff hasimprovedtheir overall performance in dealing with periodsof high workload.Thelast two Divisional outageswereeffectively implemented and providedfor meetingor exceedingunavailability goals. Perry, througheffective use of the workmanagement process, has achieved performancenumberscommensurate with the other FENOC plants, yet progress needsto continue to reduce backlogs of Elective Maintenance.Preventive Maintenanceperformanceand percentagedeep in grace is a key focus for the FENOC fleet. WorkManagement performance indicators are reported at eachMonthly PerformanceReviewand are highly scrutinized by FENOC executives.

Attachment PY-CEI/OIE-0689L Page 17 Training Training programsdirectly affect performance of the personnelat the plant. Hence,training wasintegral to the improvementsrealized in Human Performanceand Corrective Action. The PII P2 was meantto strengthenand improvethe training programsto further continuousimprovements.

TheNational Nuclear Accrediting Boardmet in May2005and placed the maintenanceand technical training programson probation. Specifically the Boardstated:

- Thestation has not beeneffective in using training to improveplant andpersonnelperformance.

(ACADObjective 1)

- Althoughrecent improvements havebeennoted, the ability of the station to sustain these improvementsremains to be demonstrated.(ACADObjective: ALL)

- Training effectiveness evaluation has beenineffective, with noted weaknesses in self-assessmentand the corrective action program.(ACADObjective: 6)

Theweaknesses identified by the Accrediting Boardformedthe basesfor the Training PII. Althoughthe Training PII wasfocusedon the maintenance and technical programs,actions werealso taken in parallel to strengthenthe Operationstraining programs.Theapproachof the initiative wasto specifically cover ACAD Objectives 1 and 6 in detail and to provide for improvement in the remainingACAD Objective areas to ensure the training programswerecommensurate with industry practices and standards.

PerformanceResults TheTraining to ImprovePerformance PII resulted in the programbeing removedfrom probation in the fall of 2005after the November 16, 2005National Academy for NuclearTraining board meeting. The PNPPtraining programnowconformsto acceptedindustry standards. The organization has demonstrated self-critical behaviorsthat assessfor gapsandestablishesaction plans to drive for excellence.

Thefinal effectivenessreviewfor the Training PII wasconducted by a teamof line andtraining personnel. The teamconcludedthere has beensubstantial improvement in the PNPP training programs since implementing this initiative. Line ownershiphasbeeninstilled throughimproveduseof training coordinators and line manager observations. Early in the timeline of improvements, training committees wereinconsistent and poorly attended. Presently, improvedownershipby the line and embedding a protocol that focusesthe committeeson using training to improveperformance hasresulted in training committeesthat are standardized, consistent, and showinga strong emphasison improving performance.For example,line managers acted as subject matter experts during training sessions. For example,the MaintenanceManagerled HumanPerformanceTraining in the dynamicflow loop simulator to ensurehis expectationswereclear and understood.

Oneof the key mechanisms for enabling line ownershipand driving improvements through training is a healthy training committeestructure and protocol. Actions taken to strengthenthe committeestructure wereeffective in that the committeesare muchmorefocusedon performancerelated topics.

Additionally, committeesdiscussionscentering on howtraining canbe usedto resolve issues in the plant occur frequently andare documented in the meetingminutesfor future reference. Further, the hierarchy of committees hasbeeneffective in engagingall levels in the organization. CognitiveTrending Reports and Condition Reportsare central themesthroughoutthe meetings.Thesustained improvementsin these programscomplimentthe effectiveness of the Curriculum ReviewCommittee (CRC)and Training ReviewCommittees(TRCs).

Training performance indicators monitor attributes under eachACAD Objective. Theattributes are scoredbasedon survey andother objective data and provide a traditional color codecorrespondingto the level of performance.A programrated all Greenwouldindicate high confidencein the programsand training process. This graphprovidesan overall indication of the improvement in the confidenceof the

Attachment PY-CEI/OIE-0689L Page 18 training programs.A high confidencein training results from improvedownershipby the line, which translatesinto realizing, morevalueout of training. This is a measure of the effective useof training committees andimprovedownershipby the line organization. It is clear that the overall health and training performance hasincreased.Thereare 100attributes total.

ConfidenceLevel of Training Effectiveness 80 70 60 Numberof 50 Highly Rated 40 .........

Attributes30 20 10-0- V 1st 2nd 3rd 4th 1st 2nd 3rd 2005 2006 Thereare 100 attributes scored. Therewasno data in I st quarter 2005due to refueling outage Asdescribedabove,the line organizationandtraining staff has sustainedan acceptablelevel of confidenceandownershipin training effectiveness.

ACAD Objective 2 is Management of Training Processesand Resources.This objective contains the highest vulnerability basedon the analysis of the indicators. Thedominatereasonfor poor performance wasthe effective andefficient use of training resources.This issue has beendiscussedwith the Senior Training Advisory Committee(STAC)and SLTand is being resolved for the comingyear in the Training ExcellencePlan.

Conclusion TheTraining to ImprovePerformance PII resulted in the Technical Training programbeing removed from probationin the fall of 2005after the November 16, 2005National Academy of NuclearTraining boardmeeting.Thetraining programnowis in line with industry standardsanda self-critical organizationis continuingto assessgapsanddevelopaction plans to continueto strive for excellence.

EmployeeEngagementand Communication(EECI)

Thepurposeof this initiative is to haveemployees actively engaged in recognizing, understandingand improvingPNPPsperformancethroughthe Perry Improvement Initiative and other key activities, such as, effective communications,the Plant Safety Committee,ALARA Committee,Consistent Supervision Committeeand the FENOC Transformation Team.

Severalfactors contributedto a senseof historical frustration anddissatisfaction by the workforceat PNPP.It wasimportantto reversethis trend to ensurethe plant improvesits overall performance and cansustain excellencein the long run.

Theseinitiative actions wereorganizedto addressthe mainareas affecting employeeengagement:

- Employeeengagement:Active involvementof employeesin key improvementinitiatives

Attachment PY-CEI/OIE-0689L Page 19 Performance Managementand Standards: Standards and accountability built into the way of doing business and driven through the performance managementprocess.

Communications:Keeping employeesinformed PerformanceResults Whenthe results of the actions completedby this and other key performance improvement initiatives are viewed in the aggregate, employeeengagement and communicationsat PNPPappear to be better than 18 monthsago.

The mostrecent Safety ConsciousWorkEnvironment(SCWE) survey provided someadditional insights into the overall employee moraleand feelings towardsplant processes.

Negative Responses V Good 10%i7-8%~j 4%-

2%-

, FENOC . SAS~CPmNcn~ ~ [

0%-

Pillar 1 Pillar 2 Pillar 3 Pillar 4 Therewasa slight increase in negative responseswhencomparing2006to 2005. Additionally, frustration anddissatisfaction remainsamongsomeemployees regarding Pillar 2, Effective Normal ProblemResolutionProcess.Theincrease in negative responsesto questionsrelated to this pillar reflects the aggressiveefforts to improveCAPand the needfor longer term successesto be communicated and leveraged amongemployees.Additionally, in analyzing the comments and response to survey questions, it is clear that the handling of the mid-yearperformance management process highly impactedthe surveyresults.

Condition Reportswerewritten for eachpillar rated as red as required by the SCWE process.

Additionally the condition of SCWE is monitoredthrough a fleet businesspractice. Theprocesshas beenin place for over 2 years andhas provento provide a sustainable processfor addressingissues raised during the surveys.

TheTransformationTeamconceptis a fleet-wide programto include all levels of employees in participation of FENOCs transformationto top quartile industry performance.This participation comes in the form of initial training on standardsand methodsof changemanagement coupledwith basic skills required for effective change.Thenthe teamis then distributed to areas of management processesto coachand facilitate the groupsin proper behaviorsto assureprogresstowardsexcellence. For example, a TransformationTeammemberattends all Executive Leadership Teammeetings and actively participates in agendaitems and post meetingcritiques. Therehavebeentwo graduatingclassesof the TransformationTeamwith upwardsof 30 peoplefrom across all of the sites and corporate.

Finally, PNPPhas established several successful employeeengagement groups such as the Human PerformanceAdvocatesand the CRAnalysts. The involvement and ownershipdemonstratedby these groups can be tied to the EmployeeEngagement and Communications PII, such as active employee

Attachment PY-CEI/OIE-0689L Page 20 participation and communications, strong management presencepersonal accountability and structure to these processes.

Conclusion Employee engagement has improvedthrough the last 18 months.It is clear that from the Human Performanceteams, the Training teams, and the Safety teamsthat the engagement from employeesis occurring and is resulting in improvements.

Operational Focus Thepurposeof this initiative is to strengthenthe operationalfocusacrossthe organization.This is accomplished by ensuringcommon goals and priorities result in excellent materiel condition and equipmentreliability that supportsafe and reliable operations. Thepurposeof the OperationalFocusPII wasto establish the appropriateattitudes and behaviorsof personnel,along with the frameworkof policies andprocedures,to ensurethat nuclearsafety is an integral part of everyoperationaldecision.

FocusAreasfor Improvement: Theinitiative actions wereorganizedinto five general conceptsto achievethe Operational FocusedOrganization:

Goalsand priorities: Creation of an Operationally FocusedOrganizationaligned with common goalsandpriorities supportingtimely resolution of operationalchallengeswhile minimizingrisk to plant operations.

OperationalDecisionMaking:Ensurethat nuclear safety is an integral part of every operational decision.

OperationsLeadership: Establish Operationsleadershipin the organization, craft ownership, and a strong engineering presence.

Long-termStaffing: Developa long-term staffing plan to ensurethat operational knowledge and experienceis present throughoutthe PNPP organization.

Operator Fundamentals: Developa focus on the fundamentalsof safe plant operation.

PerformanceResults Therehavebeenseveral recent indicators that additional workis required to fully achievean operationally focusedorganization. Self-assessmentshaveconfirmed that while someimprovements in focusing on common priorities have been made,further improvementsare neededto reach FENOCs top quartile performanceobjectives. Improvements havebeen noted in the MorningTurnover, The Management Alignment and OwnershipMeeting, Management ReviewBoard, Plant Health Committee, Duty TeamSetting Site Priorities and use of SystemHealth Reports. Other improvements in Operations leadership, developmentof staffing plans, Duty Teamupdates, and implementationof some performance indicators havealso beeneffective. Theoperationsstaff recently hasdemonstrated strong performance in operating the plant. Severalchallengeshavebeenexpertly handledwithout incident, including a recent transient involving degradinginstrumentair pressure.Thenext level of organizational performance will be achievedthrougha stronger operationally focusedorganizationlead by the high standardsof the operations staff. A self-assessmentindicated the operations departmenthasnot yet achievedthe level of alignmentand demanding standardsnecessaryto drive the organization to achieve fleet expectations.Giventhis level of alignment,operationshasnot consistently assumed the leadership position normally achievedthrough consistent demands on the supporting organizations for resolutionof organizationalshortfalls, andas a result driving organizationalaccountability.

Attachment PY-CEI/OIE-0689L Page 21 Implementation of this OperationalFocusPll hasnot achievedthe desiredoverall results of establishing an Operationally FocusedOrganization. Actions for future improvement are being carried forward to the FENOC Excellence Plan for Operations. For example,the OperationsExcellence Plan addresses,in part, reinforcementof Operationsstandardsand expectations, reactivity management, and succession planningandstaffing.

Assurance and Continuous Improvement As the PII P2initiatives closed,future gapclosure actionsandinitiatives goingforwardare containedin the Fleet Excellence Plans to assure continuous improvement.The FENOC Management Modeldepicts the management structure and methodsused to implementthe processesnecessaryto meet the BusinessPlan objectives. A significant portion of the management modelis focusedon ddving and monitoring the continuousperformanceimprovement processes,including critical self assessments.

Theseprocessesalign with the INPOmodelfor ContinuousPerformanceImprovement.

TheExcellencePlan is a discrete portion of the BusinessPlan designedto achieveobjectives, measured by key metrics, are used to showBusinessPlan effectiveness and goals. Theseplans are maintainedby the fleet peer groups, which are led by the Fleet ProgramManager.TheExcellence Plans and the continuousimprovement frameworkof the fleet processesand programssupply the necessarymotive force for continuousimprovement such that performanceissues are proactively addressedby both the PNPP staff and actively monitoredby the FENOC Fleet staff.

Theoverall strategy for continuousimprovement is therefore achievedthroughthree tiers of fleet structure. Thefirst tier providesan umbrellaover the entire operation.It includesthe BusinessPlan, Management Model, IndependentOversight, and the Company Nuclear ReviewBoard. Answeringto this tier is the secondlayer whichincludes the structural programssuchas the Peer Groups,Human Performance Programand Training Committees.Finally, providing the foundation of the structure are the functional programsof Corrective Action, Self-Assessment,Benchmarking, and Field Observations.

Thesefunctional programsprovide the traction for the organizationto realize gapsandprovidesolutions to achieveexcellence.

FENOC has proventhat it is dedicatedto improvingthe performanceof its plants and has demonstrated successin doing so. For example,at Davis Besse, FENOC achievedsustained higher levels of performance as indicated by their return to the normal ReactorOversight Processand continued operation in the LicenseeResponse Column.Additionally, BeaverValley has showncontinuous improvement and progress towards excellence with a world class steamgenerator replacementoutage andcontinuedhigh levels of reliability andsafety. Webelieve that by applyingthe lessonslearnedfrom the improvements at Davis Besseand BeaverValley and with continued focus by both the PNPP organization and FENOC as a wholesimilar performanceresults will be achievedat PNPP.

Theactions taken andbehaviorsinstilled in the organizationwill workto lessenthe frequencyand severity of plant events. FENOC viewsall eventsas opportunities to identify additional improvement actions to strive for excellencein performance.Througha robust culture of continuousimprovement andplacing safety andreliability at the forefront of the BusinessPlan and ExcellencePlans, FENOC will ensure sustained performanceimprovement.

Since the FENOC reorganization in August of 2004, FENOC has focused on standardization of processesacross the three nuclear sites. In accomplishingthis, a significant amountof benchmarking and assessmenthas taken place. The FENOC staff is madeup of manysenior managersand technical personnelwhohavediverse industry experienceat top fleets acrossthe nation. This facilitates many industry contacts makingbenchmarkingand assessmentan ingrained wayof doing business.

Presently, there is a corporate groupdedicatedto the assessment program,traversing acrosssite and departmentalboundaries.This groupnot only performsindependentassessment, but facilitates the self-assessmentprogram,programmetrics, and programoversight.

Attachment PY-CEI/OIE-0689L Page 22 Finally, there is continuousFENOC oversight of PNPP in the form of:

- MonthlyPerformanceReviews(implementedin the sameweekas the other fleet stations with cross-attendancefrom senior leadership of the other FENOC plants)

- Quarterly Performance Reviewsat a Fleet level

- Fleet standardperformance indicators with goals basedon industry best quartile performance

- Integrated and coordinated Company Nuclear ReviewBoards

- Assessment by the independentand centralized Fleet Oversight group

- Structured and formal Safety Culture Assessment processfacilitated by the Fleet Independent Oversight Department

- INPOcorporate evaluation of culture andperformance every 4 years. As a mid-cycle activity, FENOC performs a corporate self assessmentevery four years, staggeredwith the INPO corporateevaluation. This evaluationis a critical look by industry peerswith an in-houseteam to comprehensively assessthe continuousimprovement cycle and the performanceof the fleet programs.

Overall Conclusion In summary,PNPP has improvedand sustained overall plant performancethrough both on-site initiatives and, fleet standardprogramsandoversight. Sincethe establishmentof the PII P2in the summer of 2005, NRCfindings do not indicate any significant performanceweaknesses in the areas of HumanPerformance, Corrective Action Program and Work Management.Likewise, FENOC and NRC performanceindicators do not indicate any significant performanceweaknesses, and manykey performanceindicators showsubstantial performanceimprovement during 2006. Although, a recent industry evaluationidentified someareaswhereadditional focus mustbe given, particularly in the areas of operational focus and decision making,these areas are being addressedthrough the Excellence Plan.

Continuousimprovementis assuredby a fleet standard frameworkof proceduresand processes,a culture of continual assessment against industry excellence, and the peoplebehavingin a mannerthat showsa bias for improvement.FENOC has focused on developing fleet processes benchmarked against the industry, and nowhas in place a management teamthat is imposingthe right expectations and standards on a day-to-day basis. ThePNPPstaff has respondedto these challenges and has demonstrated their dedication to improvement and properexecutionof the procedures.Finally, identification andresolution of gapsagainst top levels of industry performance is beingaddressed through the Excellence Plans and performanceimprovementprocesses.