ML072260535

Confirmatory Order (Effective Immediately) Firstenergy Nuclear Operating Company

ML072260535
Person / Time
Site:	Beaver Valley, Davis Besse, Perry
Issue date:	08/15/2007
From:	Carpenter C NRC/OE
To:	Alexander A FirstEnergy Nuclear Operating Co
Starkey D
Shared Package
ML072260521	List: ML072260535 ML072260545
References
EA-07-199, EN-07-048, FOIA/PA-2007-0299
Download: ML072260535 (12)

Text

August 15, 2007 EA-07-199 Mr. Anthony Alexander Chief Executive Officer FirstEnergy Nuclear Operating Company 76 South Main Street Akron, OH 44308

SUBJECT:

CONFIRMATORY ORDER (EFFECTIVELY IMMEDIATELY)

Dear Mr. Alexander:

The enclosed Confirmatory Order is being issued to the FirstEnergy Nuclear Operating Company (FENOC) to formalize commitments made by FENOC following the Nuclear Regulatory Commission (NRC) issuance of a Demand for Information (DFI) on May 14, 2007.

The DFI was issued in response to the information provided by FENOC relative to its re-analysis of the timeline and root causes for the 2002 Davis-Besse reactor pressure vessel head degradation event following its receipt of a report prepared by Exponent Failure Analysis Associates and Altran Solutions Corporation (Exponent). On June 13, 2007, FENOC provided its response to the DFI and on June 27, 2007, the NRC held a public meeting with FENOC to discuss the DFI response. On July 16, 2007, FENOC provided a supplemental response to the DFI which provided additional detail regarding the planned implementation of commitments established in the June 13, 2007, response to the DFI.

We have enclosed a Confirmatory Order (Effective Immediately) to confirm the commitments made in your July 16, 2007, letter. As evidenced by your signed Consent and Hearing Waiver Form (enclosure 2) dated August 14, 2007, you agreed to the issuance and immediate effectiveness of the enclosed Confirmatory Order.

Pursuant to Section 223 of the Atomic Energy Act of 1954, as amended, any person who willfully violates, attempts to violate, or conspires to violate, any provision of this Order shall be subject to criminal prosecution as set forth in that section. Violation of this Order may also subject the person to civil monetary penalties.

You are not required to respond to this letter. However, if you choose to provide a response, please provide it to me within 30 days at U.S. Nuclear Regulatory Commission, Mail Stop O-4A15A, 11555 Rockville Pike, Rockville, MD 20852.

A. Alexander 2 Questions concerning this Confirmatory Order should be addressed to Mr. Doug Starkey, NRC Office of Enforcement, who can be reached at 301-415-3456 or via e-mail at: drs@nrc.gov .

A copy of this letter and its enclosures will be made available electronically for public inspection in the NRC Public Document Room or from the NRCs document system (ADAMS). ADAMS is accessible from the NRC Web site at: http://www.nrc.gov/reading-rm/adams.html . The NRC will also include this letter, and its enclosed Confirmatory Order, on its website at: www.nrc.gov; select About NRC, Organizations & Functions, Office of Enforcement, About Enforcement, then Significant Enforcement Actions. Your response, if you choose to provide one, will also be made available electronically for public inspection in the NRC Public Document Room or from the NRCs document system (ADAMS).

Sincerely,

/RA/

Cynthia A. Carpenter, Director Office of Enforcement Docket Nos. 50-346; 50-440; 50-334; 50-412 License Nos. NPF-3; NPF-58; DPR-66; NPF-73

Enclosures:

1. Confirmatory Order

2. Copy of Consent and Hearing Waiver Form dated August 14, 2007 cc w/enclosures: (Attached list- Page 3)

A. Alexander 2 Questions concerning this Confirmatory Order should be addressed to Mr. Doug Starkey, NRC Office of Enforcement, who can be reached at 301-415-3456 or via e-mail at: drs@nrc.gov .

A copy of this letter and its enclosures will be made available electronically for public inspection in the NRC Public Document Room or from the NRCs document system (ADAMS). ADAMS is accessible from the NRC Web site at: http://www.nrc.gov/reading-rm/adams.html . The NRC will also include this letter, and its attached Confirmatory Order, on its website at: www.nrc.gov; select About NRC, Organizations & Functions, Office of Enforcement, About Enforcement, then Significant Enforcement Actions. Your response, if you choose to provide one, will also be made available electronically for public inspection in the NRC Public Document Room or from the NRCs document system (ADAMS).

Sincerely,

/RA/

Cynthia A. Carpenter, Director Office of Enforcement Docket Nos. 50-346; 50-440; 50-334; 50-412 License Nos. NPF-3; NPF-58; DPR-66; NPF-73

Enclosures:

1. Confirmatory Order

2. Copy of Consent and Hearing Waiver Form dated August 14, 2007 cc w/enclosures: (Attached list - Page 3)

Electronic Distribution: (Attached list- Page 4)

ML072260521 G Publicly Available G Non-Sensitive OFFICE OE RIII RIII RI NRR NAME D. Starkey J. Heck M. Satorius M. Dapas B. Boger DATE 8/8/07 8/8/07 8/9/07 8/9/07 8/9/07 OFFICE OGC OE NAME B. Jones C. Carpenter DATE 8/13/07 8/15/07 OFFICIAL RECORD COPY

A. Alexander 3 cc w/encl:

The Honorable George V. Voinovich The Honorable Dennis Kucinich J. Hagan, President and Chief Nuclear Officer J. Lash, Senior Vice President of Operations and Chief Operating Officer Richard Anderson, Vice President, Nuclear Support Mark Bezilla, Site Vice President, Davis-Besse Barry S. Allen, Site Vice President, Perry Manager - Site Regulatory Compliance (Beaver Valley, Davis-Besse, Perry)

D. Pace, Senior Vice President of of Fleet Engineering J. Rinckel, Vice President, Fleet Oversight D. Jenkins, Attorney, FirstEnergy Director, Fleet Regulatory Affairs Manager, Fleet Licensing Ohio State Liaison Officer R. Owen, Administrator, Ohio Department of Health Public Utilities Commission of Ohio D. Hill, Chief, Radiological Health Program, State of West Virginia J. Lewis, Commissioner, Division of Labor, State of West Virginia W. Hill, Beaver County Emergency Management Agency J. Johnsrud, National Energy Committee, Sierra Club President, Lucas County Board of Commissioners President, Ottawa County Board of Commissioners R. Owen, Ohio Department of Health M. Clancy, Mayor, Shippingport, PA D. Allard, PADEF Pennsylvania State Liaison Officer C. OClaire, Chief, Radiological Branch, Ohio Emergency Management Agency Z. Clayton, Ohio Environmental Protection Agency S. Helmer, Bureau of Radiation Protection, Ohio Department of Health Director, Ohio Department of Commerce Mayor, Village of North Perry Mayor, Village of Perry Chairman, Perry Township Board of Trustees S. Hiatt, OCRE Interim Representative Director, Pennsylvania Emergency Management Agency Director, Bureau of Radiation Protection, Pennsylvania Department of Environmental Protection

A. Alexander 4 Electronic Distribution: (Ltr. and Confirmatory Order to Mr. Anthony Alexander)

Dated: August 15, 2007 ADAMS (PARS)

SECY OCA L. Reyes, EDO T. Wengert, NRR W. Kane, DEDR M. Kowal, NRR M. Virgilio, DEDMRT N. Morgan, NRR C. Carpenter, OE S. Magruder, OE N. Hilton, OE D. Starkey, OE S. Collins, RI J. Caldwell, RIII M. Satorius, RIII S. West, RIII C. Pederson, RIII A. Boland, RIII J. Moore, OGC B. Jones, OGC L. Clark, OGC J. Dyer, NRR D. Holody, RI C. Evans, RII J. Heck, RIII K. Fuller, RIV M. Ashley, NRR Resident Inspectors E. Brenner, OPA H. Bell, OIG G. Caputo, OI S. Langan, RIII:OI J. Ulie, RIII:OI M. Janicki, RIII:OI N. Hane, RIII:OI E. Duncan, RIII V. Mitlyng, RIII:PA R. Lickus, RIII S. Minnick, RIII J. Lynch, RIII R. Summers, RI A. DeFrancisco, RI N. McNamara, RI M. McLaughlin, RI RI:PAO OEWEB OAC3 R. Gibbs, NRR

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of FIRSTENERGY NUCLEAR OPERATING COMPANY (Davis-Besse Nuclear Power Station, Unit 1) ) Docket No. 50-346 (Perry Nuclear Power Plant, Unit 1) ) 50-440 (Beaver Valley Power Station, Units 1 and 2) ) 50-334

) 50-412

)

) License No. NPF-3

) NPF-58

) DPR-66

) NPF-73

)

) EA 07-199 CONFIRMATORY ORDER (EFFECTIVE IMMEDIATELY)

I.

FirstEnergy Nuclear Operating Company (FENOC or licensee) is the holder of four NRC Facility Operating Licenses issued by the U.S. Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 CFR Part 50, which authorizes the operation of the specifically-named facilities in accordance with the conditions specified in each license. License No. NPF-3 was issued on April 22, 1977, to operate the Davis-Besse Nuclear Power Station, Unit No. 1. License No.

NPF-58 was issued on November 13, 1986, to operate the Perry Nuclear Power Plant, Unit No. 1. License Nos. DPR-66 and NPF-73 to operate the Beaver Valley Power Station, Units 1 and 2, were issued on July 2, 1976, and August 14, 1987, respectively. Davis-Besse is located near Toledo, Ohio; Perry is located near Painesville, Ohio; and Beaver Valley is located near McCandless, Pennsylvania.

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II.

The events leading up to this Confirmatory Order date back several years. In 2005, the NRC took enforcement action against FENOC, imposing a $5,450,000 civil penalty for regulatory violations associated with the 2002 reactor pressure vessel head degradation event at the Davis-Besse Plant. In response to that event, FENOC performed root cause evaluations.

Among other things, FENOCs root cause reports determined that the reactor pressure vessel head degradation was the result of ongoing and undetected Control Rod Drive Mechanism nozzle leakage that had lasted more than four years.

In February 2007, the licensee informed the NRC that Davis-Besse was initiating a condition report based on information contained in a letter received from Nuclear Electric Insurance Limited (NEIL). The NEIL letter referenced a new analysis that FENOC had commissioned of the Davis-Besse reactor pressure vessel head degradation event. The new analysis, submitted to NEIL as expert testimony in an insurance arbitration on December 18, 2006, was performed by Exponent Failure Analysis Associates and Altran Solutions Corporation (Exponent) and concluded that the time period between the beginning of substantial leakage from the reactor pressure vessel head nozzle and the development of the large cavity next to the nozzle may have been as short as four months.

On April 2, 2007, after several conference calls with the licensee and Exponent to assess whether the Exponent Report raised any immediate safety concerns (it did not), the NRC requested FENOC to respond in writing to four questions regarding information and conclusions presented in the Exponent Report. Among other things, the NRCs request for information asked FENOC to discuss any differences between the Exponent Report information and 2

conclusions drawn therein, and information previously provided in the Root Cause Analysis Report and Licensee Event Report for the Davis-Besse reactor pressure vessel head wastage event.

In its May 2, 2007, response to the NRCs request for information, FENOC stated that it ha[d]

not specifically evaluated all of the assumptions used by Exponent but nevertheless concluded that the Exponent Report more accurately characterizes the time line of the reactor head degradation event based on [Exponents] use of more recently available test data in conjunction with detailed analytical modeling. FENOCs response did not include a detailed discussion of the differences between the operational experience data and the Exponent Report assumptions.

Consequently, on May 14, 2007, the NRC issued FENOC a Demand for Information (DFI) pursuant to 10 CFR 2.204 to determine whether further enforcement action was necessary to provide reasonable assurance that FENOC would continue to operate its licensed facilities in accordance with the terms of its licenses and the Commissions regulations. The DFI required FENOC to provide a detailed discussion of the process used to determine if the Exponent Report assumptions, analyses, conclusions, or other related information should have been reported to the NRC in a more prompt manner; a detailed discussion of the differences in assumptions, analyses, conclusions, and other related information of the Exponent Report and technical and programmatic root cause reports developed in 2002; and a position on whether FENOC endorsed the conclusions of a second contractor report prepared in connection with the NEIL insurance arbitration.

FENOC responded to the DFI in writing on June 13, 2007. In that response, FENOC stated that its May 2, 2007, response was primarily focused on the detailed analytical studies that form the 3

basis for the Exponent Reports time line for the crack growth and wastage phenomenon . . .

and was not a comprehensive review of the differences between our root cause reports and the Exponent Report. According to the June 13 response, FENOC continues to believe that its earlier root cause reports provide a comprehensive explanation of the progression and causal factors of the Davis-Besse reactor pressure vessel head degradation event and, hence, contain the most appropriate information to have used in development and implementation of corrective actions to prevent recurrence. FENOCs June 13, 2007, response further acknowledged that it should have communicated more effectively internally and more promptly with the NRC about the Exponent Report, and included commitments to implement corrective actions in those areas.

On June 27, 2007, the NRC held a public meeting with FENOC to discuss the DFI response.

During the meeting, the NRC questioned the corporate safety culture at FirstEnergy and whether FENOC had changed its position regarding the root causes of the Davis-Besse reactor pressure vessel head degradation event. The NRC further questioned why FENOC had not immediately shared the Exponent Report with the NRC, given the importance of its subject matter and potential safety significance. The NRC also sought clarification regarding the licensees proposed corrective actions and FENOC agreed to provide clarification in a supplemental DFI response.

On July 16, 2007, FENOC provided the NRC its supplemental response to the DFI, which elaborated on the commitments and corrective actions discussed at the public meeting. In general, FENOCs commitments and corrective actions are designed to prevent recurrence of the events that culminated in the issuance of the NRCs Demand for Information. Specifically, FENOCs commitments are designed to ensure that information of potential regulatory 4

significance is recognized by FENOC and FirstEnergy employees and communicated to the NRC in a timely and effective manner.

In the short term, FENOC has implemented interim corrective actions to prevent recurrence of the events that culminated in the issuance of the NRCs Demand for Information. Specifically, FENOC has developed criteria to be used in determining whether documents developed in support of commercial matters, including the pending insurance arbitration with NEIL, contain information of potential regulatory interest to the NRC. FENOCs interim actions will remain in place until the procedural changes required by this Confirmatory Order are implemented.

III.

On August 14, 2007, the Licensee consented to the issuance of this Order to confirm the commitments described in Section IV below. The Licensee further agreed that this Order is effective upon issuance and has waived its right to a hearing.

I find that the commitments set forth in Section IV are acceptable and necessary and conclude that with these commitments the public health and safety are reasonably assured. In view of the foregoing, I have determined that public health, safety, and interest require that the Licensee's commitments be confirmed by this Order. Based on the above and the Licensee's consent, this Order is immediately effective upon issuance.

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IV.

Accordingly, pursuant to sections 103, 104b, 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commissions regulations in 10 CFR 2.202, IT IS HEREBY ORDERED, EFFECTIVE IMMEDIATELY, THAT THE LICENSEE SHALL IMPLEMENT THE FOLLOWING:

1. The Licensee shall conduct regulatory sensitivity training for selected FENOC and non-FENOC FirstEnergy employees to ensure those employees identify and communicate information that has the potential for regulatory impact either at FENOC sites or within the nuclear industry to the NRC. At least 30 days prior to conducting the training, the Licensee shall submit by letter to the Director, NRC Office of Enforcement, a description of 1) the population to be trained, 2) the planned training methodology and materials, and

3) the training objectives. The Licensee shall complete its regulatory sensitivity training no later than November 30, 2007, and within 60 days following completion shall inform the Director, NRC Office of Enforcement, by letter.

2. The Licensee shall conduct effectiveness reviews to determine if an appropriate level of regulatory sensitivity is evident among FirstEnergy employees including those who received regulatory sensitivity training. The first effectiveness review shall be conducted in January 2008 by an external consultant. A follow-up effectiveness review shall be conducted in January 2009. At least 45 days prior to starting each external effectiveness review, the Licensee shall inform, by letter, the Director, NRC Office of Enforcement, of the identity of its external consultant, the qualifications of its external consultant, and the scope and depth of its plan for assessing effectiveness. Within 60 days following completion of each external effectiveness review, the Licensee shall inform, by letter, the 6

Director, NRC Office of Enforcement, of a summary of the results of the review and a description of any actions taken or planned in response to those results.

3. The Licensee shall develop a formal process to review technical reports prepared as part of a commercial matter. The process shall provide criteria for the Licensee to use in determining whether a report has the potential for regulatory implications, or impact on nuclear safety either at FENOC sites or within the nuclear industry. The Licensee shall implement the process no later than December 14, 2007, and within 30 days following implementation shall submit a description of the process by letter to the Director, NRC Office of Enforcement.

4. The Licensee shall assess its Regulatory Communications policy and make process changes to its NRC Correspondence procedure to ensure specific questions are asked during the process relative to the experience gained from efforts to respond to the NRCs May 14, 2007, Demand for Information. The Licensee shall complete any revisions to its NRC Correspondence procedure or Regulatory Communications policy no later than December 14, 2007, and within 30 days following completion shall submit a description of the policy and procedure changes, if any, or the basis for the determination that such revisions were not necessary, by letter to the Director, NRC Office of Enforcement.

5. The Licensee shall provide an Operating Experience (OE) document to the nuclear industry through the industrys established OE process. The document shall discuss the issues surrounding the NRCs May 14, 2007, Demand for Information, including the review of technical reports prepared as part of a commercial matter. The OE document 7

shall be provided to the nuclear industry, and to the Director, NRC Office of Enforcement, within 30 days of the date of this Order

6. The Licensee shall complete a root cause evaluation of the events that culminated in the issuance of the NRCs May 14, 2007, Demand for Information. The licensee shall make the root cause evaluation available for review by NRC inspectors and summarize the results of the evaluation in a letter to the Director, NRC Office of Enforcement, no later than December 14, 2007. The Licensees letter to the NRC shall document the results of an assessment as to whether the results of the root cause evaluation reflect a need for any corrective actions different from or in addition to the requirements of this Confirmatory Order.

7. The Licensee shall maintain the interim corrective actions, discussed, in part, in Section II of this Order and implemented as a result of the events leading up to the issuance of the NRCs May 14, 2007, DFI, until the procedural changes described in paragraphs 3 and 4 of Section IV of this Confirmatory Order are implemented.

The Director, Office of Enforcement, may, in writing, relax or rescind any of the above conditions upon demonstration by the Licensee of good cause.

V.

Any person adversely affected by this Confirmatory Order, other than the Licensee, may request a hearing within 20 days of its issuance. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time in which to 8

request a hearing must be made in writing to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC, 20555, and must include a statement of good cause for the extension. Any request for a hearing shall be submitted to the Secretary, U.S. Nuclear Regulatory commission, ATTN: Chief, Rulemakings and Adjudications Staff, Washington, DC, 20555. Copies of the hearing request shall also be sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC, 20555, to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, to the Regional Administrator for NRC Region III, 801 Warrenville Road, Lisle, IL, 60532-4351, to the Regional Administrator for NRC Region I, 475 Allendale Road, King of Prussia, PA, 19406-1415, and to the Licensee. It is requested that requests for hearing be transmitted to the Secretary of the Commission either by means of facsimile transmission to 301-415-1101 or by e-mail to hearingdocket@nrc.gov and also to the Office of the General Counsel either by means of facsimile transmission to 301-415-3725 or by e-mail to OGCMailCenter@nrc.gov. If a person other than the licensee requests a hearing, that person shall set forth with particularity the manner in which his interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309(d) and (f).

If a hearing is requested by a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Confirmatory Order should be sustained.

In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions specified in Section IV above shall be final 20 days from the date of this Order without further order or proceedings. If an extension of time for requesting a 9

hearing has been approved, the provisions specified in Section IV shall be final when the extension expires if a hearing request has not been received. A REQUEST FOR HEARING SHALL NOT STAY THE IMMEDIATE EFFECTIVENESS OF THIS ORDER.

FOR THE NUCLEAR REGULATORY COMMISSION

/RA/

Cynthia A. Carpenter, Director Office of Enforcement Dated this 15thday of August 2007 10