ML18004A140
| ML18004A140 | |
| Person / Time | |
|---|---|
| Issue date: | 12/13/2017 |
| From: | Office of Nuclear Material Safety and Safeguards |
| To: | |
| Ramsey K | |
| Shared Package | |
| ML18004A135 | List: |
| References | |
| NRC-3434 | |
| Download: ML18004A140 (55) | |
Text
Official Transcript of Proceedings NUCLEAR REGULATORY COMMISSION
Title:
Fuel Facilities Fee Matrix Public Meeting Docket Number:
(n/a)
Location:
Rockville, Maryland Date:
Wednesday, December 13, 2017 Work Order No.:
NRC-3434 Pages 1-52 NEAL R. GROSS AND CO., INC.
Court Reporters and Transcribers 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 (202) 234-4433
1 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
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PUBLIC MEETING ON FUEL FACILITIES FEE MATRIX
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WEDNESDAY, DECEMBER 13, 2017
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ROCKVILLE, MARYLAND
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The meeting was held at the Nuclear Regulatory Commission, Three White Flint North, 11601 Landsdown Street, Rockville, Maryland, at 9:30 a.m.,
Kevin Ramsey, Project Manager, presiding.
NRC STAFF:
KEVIN RAMSEY, Project Manager, Fuel Facilities Manufacturing Branch, NRC, NMSS ROBERT JOHNSON, Branch Chief, Fuel Manufacturing, NMSS MICHELLE ALBERT, OGC MATT BARTLETT, NRC LEIRA CUADRERO, NRC CRAIG ERLANGER, NMSS
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 JO JACOBS, OCFO MICHELE KAPLAN, OCFO JOHN McKIRGAN, NMSS JENNIFER RAND, NMSS BRIAN SMITH, NMSS SOLY SOLO LUYO, NMSS JEREMY SUTTENBERG, OGC JAKE ZIMMERMAN, NMSS, ECSE ALSO PRESENT:
ZACHARY COHEN, Winston & Strawn, LLP STEVEN DOLLEY, Inside NRC*
TIM KNOWLES, NFS HILARY LANE, NEI JONATHAN MARCANO, NMSS WYATT PADGETT, URENCO (LES)
MAX PIERCE, Naval Reactors JAMIE SCHEIMAN, Naval Reactors JANET SCHLUETER, NEI JARED SCHULTZ, NEI JENNIFER SCRO, OGC RANDY SHACKELFORD, NFS TYSON SMITH, Winston & Strawn, LLP DAVE SPANGLER, B+W*
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 P R O C E E D I N G S 1
2:02 p.m.
2 MR. RAMSEY: Okay, I want to welcome 3
everybody to the public meeting on the Fuel Facilities 4
Fee Matrix. And I think Robert had some opening 5
remarks.
6 MR. JOHNSON: Yeah, thank you, Kevin. My 7
name's Robert Johnson, I'm the Fuel Manufacturing 8
Branch Chief. I've met most of you at this point.
9 We'll go around the room in just a minute for 10 introductions, but. Okay. Thank you for coming, 11 we've got a great turnout. We're here to talk about 12 the Fuel --
13 MR. DOLLEY: We can't hear you on the 14 bridge, and could people identify themselves, please.
15 This is Steven Dolley with Platts.
16 MR. JOHNSON: Okay, good afternoon.
17 Let's try this again. My name is Robert Johnson, the 18 Fuel Manufacturing Branch Chief. I wanted to welcome 19 everybody. We've got a great turnout here in the 20 room, and it sounds like we've got a bunch of people 21 on the bridge line.
22 The purpose the public meeting today is 23 to talk about the fee matrix, to gain stakeholder 24 feedback and perspectives on the Fuel Facilities Fee 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 Matrix. The fee matrix is an algorithm that's used 1
for, used to apportion annual fees across the major 2
fuel facilities.
3 NRC has been evaluating the process and 4
considering potential improvements, and we wanted to 5
reach out the members of the public and our 6
stakeholders to get some additional insights or 7
feedback on any potential improvements.
8 So the purpose of the meeting is not to 9
have a lengthy discussion about NRC's going to be 10 reducing fees. It's really to try and get insights 11 on how the fees are apportioned. With that, I'd like 12 to pass it back to Kevin.
13 MR. RAMSEY: Okay, my name's Kevin 14
- Ramsey, I'm a
project manager in the Fuel 15 Manufacturing Branch. I'd like to welcome everybody.
16 Before we get started with the introductions, just 17 like to have a brief safety moment.
18 If there's any reason to leave the 19 building for a fire alarm or something, you can go 20 back out through the lobby the way you came in. If 21 for any reason that way is blocked, you can also turn 22 left, go all the way down around the corner. There 23 is another exit door down there. The bathrooms are 24 also down to the left, if you need a water fountain 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 or anything like that.
1 So I'm going to ask Robert to pass the 2
microphone around. We're going to ask everybody to 3
introduce themselves to him. My name is Kevin 4
Ramsey, I'm the Project Manager in the Fuel 5
Manufacturing Branch.
6 MR. JOHNSON: This is Robert Johnson 7
again, Fuel Manufacturing Branch Chief 8
MS. KAPLAN: Michele Kaplan, License Fee 9
Policy Chief.
10 MR. McKIRGAN: John McKirgan, I'm Chief 11 of the Spent Fuel Management Branch here at the NRC.
12 MR. ERLANGER: Craig Erlanger, I'm the 13 Director of the Division of Fuel Cycle Safety 14 Safeguards and Environmental Review.
15 MS. JACOBS: Jo Jacobs, Budget Analyst 16 in Office of Chief Financial Officer.
17 MR. DOLLEY: We can't hear the people 18 off-mic.
19 MS. SOLO LUYO: Soly Soto, I'm with the 20 Division of Recycle Safety and Safeguards.
21 MR. MARCANO: Jonathan Marcano, NRC.
22 MR. SMITH: Brian Smith, Deputy Director, 23 Division of Fuel Cycle.
24 MS. ALBERT: Michelle Albert, OGC, NRC.
25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MS. SCRO: Jennifer Scro, OGC, NRC.
1 MR. SUTTERBERG: Jeremy Suttenberg, OGC, 2
NRC.
3 MS. RAND: Jennifer Rand, NMSS.
4 MR. BARTLETT: Matt Bartlett, Fuel Cycle.
5 MR. COHEN: Zachary Cohen, Winston &
6 Strawn.
7 MS. CUADRERO: Leira Cuadrero, Fuel 8
Manufacturing Branch.
9 MS. LANE: Hilary Lane, NEI.
10 MS. SCHEIMAN: Jamie Scheiman, Naval 11 Reactors.
12 MR. PIERCE: Max Pierce, Naval Reactors.
13 MR. SMITH: Tyson Smith, Winston &
14 Strawn.
15 MR. ZIMMERMAN: Jake Zimmerman, I'm the 16 Chief for the Enrichment and Conversion Branch in 17 Fuel Cycle Division.
18 MS. SCHLUETER: Janet Schlueter, Senior 19 Director for Materials and Radiation Safety at NEI.
20 MR. SHACKELFORD: Randy Shackelford, 21 Nuclear Fuel Services.
22 MR. KNOWLES: Tim Knowles, Nuclear Fuel 23 Services.
24 MR. RAMSEY: Okay, thank you. If we 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 could go to Slide 2. Okay, basically, up to now 1
we've completed the introductions. We're going to 2
do a presentation on the fee matrix of the data and 3
the approaches that we've considered so far. Slide 4
- 2. And then we'll open it up for comments and 5
questions.
6 Now this is a Category 3 meeting, so we're 7
inviting people to comment and, you can comment and 8
ask questions all through the meeting. And we'll try 9
to use the microphone as much as possible to help 10 people on the phone line.
11 So if you want to go to Slide 3. Now, 12 over the past year, we have engaged with our internal 13 stakeholders on these subjects. This the beginning 14 of our efforts to engage with external stakeholders.
15 No decisions have been made, and no changes to this 16 fee matrix will be proposed to the FY18 fee rule.
17 And we expect publication of the proposed rule for 18 FY18 in January.
19 Basically we felt like we had to engage 20 external stakeholders before we proceed with any 21 changes. That's why we're not doing anything this 22 year. We value your input, and we want to allow time 23 for a meaningful exchange of ideas.
24 So our objectives here are review the 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 current method that we use to calculate annual fees 1
fuel facilities, review the data that we've gathered 2
and the alternative approaches that we've considered 3
so far, of course obtain your input, and answer any 4
questions.
5 Go to Slide 4. Now, the NRC is aware 6
that the industry has concerns with our fees. And 7
we recognize the concerns, and we've completed 8
several efforts to identify efficiencies. These 9
efforts have resulted in significant reductions in 10 our budget over the past few years. What you see on 11 the slide here is our budgets over the last few years.
12 Now, currently we have ongoing efforts to 13 identify additional efficiencies, so we hope that the 14 reductions will continue. As Robert said, the 15 purpose of this meeting is not to discuss the size or 16 the speed of the budget reductions. It's to engage 17 you on the method used to calculate the annual fees.
18 And as you'll see in the next few slides, 19 we recover some of our, what we have to reimburse the 20 Treasury for, we recover some of that through direct 21 services and some of it through annual fees. So 22 regardless of how small our budget gets, there's 23 always going to be a piece that we have to recover 24 through annual fees. So this distribution isn't 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 going to go away.
1 Okay, Slide 5. So the NRC has two types 2
of fees. We have service fees for direct services.
3 And what I mean by that is usually licensing actions 4
or inspections where we're charging our time to a 5
cost accounting code and there's a specific docket 6
number assigned to that code. So those hours get 7
charged to that docket, those are service fees.
8 All other costs are recovered through 9
annual fees. Those are basically, those codes don't 10 have any docket numbers associated with it. An 11 example is this meeting. There is no specific docket 12 number associated with this meeting, so the time that 13 we spent on this all goes into the bin for annual 14 fees.
15 Now, a fuel facility business line 16 distributes annual fees based on a level of effort to 17 regulate each facility, and that calculation's been 18 based on a matrix of effort factors that we've been 19 using since 1999.
20 If we could go to Slide 6. So for the 21 fuel facilities business line, this is what the 22 numbers look like for FY17. Total budgeted resources 23 for our business line was roughly 34 million.
24 The estimated Part 170 collections, those 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 direct services, licensing and inspection actions, 1
about 10 million, so we subtract that out. There are 2
some other adjustments that are made, some surcharges 3
that get added back in. And then we have the total 4
amount that we recover through our annual fees. So 5
that's what it looked like in FY17.
6 MR. KNOWLES: Did you provide any 7
additional details on the other adjustments?
8 MR. RAMSEY: Okay, hold on a second. The 9
question was additional information on the 10 adjustments.
11 MS. KAPLAN: So the other adjustments, 12 as you can see from the fuel for '17, there was some 13 generic transportation costs, which was allocated to 14 this fee class, low level waste surcharge, and then 15 there was a fee relief surcharge. So those are three 16 components of the 4.1 million.
17 MR. KNOWLES: What's the, how did you get 18 to the 9.6 as the estimated collection?
19 MR. RAMSEY: The question was how did we 20 get to 9.6. Basically what we do is we go to the 21 licensing and inspection staff each year and say, 22 okay, here were the hours you charged last year. What 23 do you expect next year? And it's an estimate, but 24 it's asking them do you expect to charge more hours, 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 fewer hours, what's your best guess. And so we get 1
all that input from the licensing and inspection 2
staff, and the estimate is based on that.
3 MR. SMITH: Okay. I guess a related 4
question is on the next slide, you've got two 5
categories for licensing and oversight, which would 6
sound to me like direct services, but those total 29.
7 So I'm just curious as to what's the subset. What 8
does licensing and oversight from the next page mean?
9 MR. RAMSEY: Okay, the question is on 10 Slide 7, so let's go to Slide 7. Of the 33.9 million 11 that we talked about in the last slide, this is the 12 breakdown for FY17. And you'll notice that most of 13 the resources go to licensing, oversight and 14 rulemaking. And oversight is inspection.
15 So as was noted in the
- question, 16 licensing and oversight get up around 30 million, but 17 we're only recovering ten million from direct 18 services. So what are those technical staff doing?
19 Again, meetings like this, when they're working on 20 guides and procedures, that's generally a non-21 billable action. Of course rulemaking's not a 22 billable activity. Maintaining our websites.
23 You
- know, anything that's kind of 24 generic.
And of course there's general 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 administrative overhead tasks also. But anything 1
that's not associated with a specific docket number 2
is going into that bin for annual fees. Okay?
3 Janet.
4 MS. SCHLUETER: Yeah, I don't know what 5
to do without a mic. What do you want?
6 MR. RAMSEY: I can repeat your question 7
if you just want to do that.
8 MS. SCHLUETER: Well, I think yeah, 9
Tyson's getting at something that, you know, the 10 observation that we made. So I just want to make 11 sure that we're all interpreting what you're saying 12 correctly. And that is, I guess about two-thirds of 13 the cost there of the 29 million, is actually for 14 non-direct service activities, like guidance, like 15 rulemaking, generic issues, the website, the things 16 you just mentioned.
17 MR. RAMSEY: Right.
18 MS. SCHLUETER: That's correct? It's 19 like 9.6 out of the 29 in this case.
20 MR.
RAMSEY:
- Yeah, roughly.
The 21 breakdown that we've seen in recent years is about a 22 third comes from direct services to a specific 23 licensee, two-thirds is not allocated to a specific 24 licensee and gets distributed through annual fees.
25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 If we can reduce our overhead, we might be able to 1
get that closer to 50-50, but that's where we are 2
today.
3 MS. SCHLUETER: Well, maybe not just 4
overhead, unless you mean the word overhead very 5
broadly. How did you mean to use the word overhead 6
in that case?
7 MR. RAMSEY: Well it was, a lot of the 8
efforts that we're looking at internally is how can 9
we get more things channeled into those specific 10 services that are charged to a specific docket and 11 off this unspecified thing that people just kind of, 12 just collects this massive amount of charges.
13 I mean, quite frankly, some managers, 14 they just have like a code for supervision, and they 15 don't break down their time as to which licensee's 16 document they're reviewing at any given time.
17 There's been discussions about you know, should we, 18 to move toward something like that. Decisions in 19 that regard haven't been made yet.
20 MS. SCHLUETER: Okay, could we, since we 21 started the questions on the slides specifically, I 22 was kind of holding back, but now that everybody else 23 has opened the flood gate, can we ask some more 24 specific questions on this slide?
25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. RAMSEY: So this is --
1 MR. DOLLEY: Can speakers identify 2
themselves, please?
3 MS. SCHLUETER: I'm sorry, Steve, it's 4
Janet Schlueter. I thought you knew my voice.
5 MR. DOLLEY: Yeah, there's a lot of 6
voices and I know I'm getting a little hard of 7
hearing. Thanks, Janet.
8 MR. JOHNSON: Okay, this is Robert 9
Johnson. We have some room to talk about the specific 10 budget, the budget process or budget questions. But 11 the discussion that we would like to get into is about 12 the fee matrix. So there is a process for the fee 13 rule, the proposed fee rule, and public comments and 14 insights on the fee rule and the process.
15 However, the goal for today is to be able 16 to talk about the fee matrix and how the annual fees 17 are apportioned.
18 MS. SCHLUETER: Sure, and we appreciate 19 that. I think we just like to make sure we're asking 20 informed questions. So event response, is this 21 budget that supports the headquarters operations 22 office? Because we assume that event response, if 23 it's licensee-specific, they're being billed for 24 that.
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. RAMSEY: Yes, that's my understanding 1
that, you know, there's some general things. Like 2
we have to man the operations center and do some 3
generic things like that. So all the business lines 4
contribute to that effort.
5 MS. SCHLUETER: Okay, so that's your 6
generic contribution to the HOO.
7 MR. RAMSEY: Yes.
8 MS. SCHLUETER: Not licensee-specific.
9 Okay, so international activities, this is anything 10 that's obviously in the fee based and not coming out 11 of the IP general fund bin.
12 MR. RAMSEY: I'm not an expert on the 13 international activities, but I've been told that 14 some international activities are billable. I'm not 15 the best one to explain how that breaks down.
16 MS. SCHLUETER: But obviously if it's in, 17 I mean, I'm going to make an assumption here. If 18 it's in this business line budget, then it is 19 international activities that are not being funded 20 out of the general fund. These are being recouped 21 somehow by 170 or 171 fees.
22 MR. RAMSEY: Right, I mean for example, 23 as many of the licensees know, I mean they have import 24 and export and international protocol 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 responsibilities where we have to, there's certain 1
work we have to do just on that business of shipping 2
of products in and out.
3 MS. SCHLUETER: Sure. So the only other 4
one I think, when we talked about this, and we very 5
much appreciated having the slides be made public 6
last week, that was very helpful. State and tribal 7
programs -- could someone describe what effort is 8
under that bin for this business line?
9 MR. RAMSEY: I'm not sure we have any 10 specific information here. We can try to follow up 11 on that.
12 MS. SCHLUETER: And training is staff 13 training? Training for your staff?
14 MR. RAMSEY: Yes.
15 MS. SCHLUETER: Okay.
16 MR. RAMSEY: Okay?
17 MR. SMITH: This is Brian Smith. Going 18 back to Janet's question about state and tribal. You 19 may recall we used to have a Office of State and 20 Tribal programs. That got moved into NMSS, and 21 that's in the MSTR division right now. And I think 22 each of the business lines contributes a portion of 23 that budget for the generic type of work that they 24 do.
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. SMITH: This is Tyson Smith. Just 1
to make sure I, well, I think it would be helpful to 2
understand, within the licensing and oversight 3
categories, which, how much of that is allocated to 4
direct services that are recovered by fees, versus 5
the annual fee, which should be for generic 6
activities.
7 And I understand you said two-thirds, 8
one-third. But I'm just, you know, there's no way 9
to figure out where that 9.6 comes from based on this 10 column. So some additional detail would be helpful 11 in understanding if we're allocating properly between 12 generic and direct service fees.
13 MR. RAMSEY: Well, we could see if we 14 could provide some better information. But quite 15 honestly, you know, we have a certain number of 16 licensing staff and a certain number of inspection 17 staff. And sometimes they're working on specific 18 actions for a specific licensee, and sometimes 19 they're working on these generic activities.
20 So all we have here, this is the specific 21 budget that was enacted, it was approved by Congress.
22 And then we have the estimate of what we think we're 23 going to collect in direct services. And then as we 24 go through the year and we actually do collect fees.
25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 If that's higher and lower than an estimate, then 1
might have to make an adjustment towards the end of 2
the year. But that's, sometimes the breakdown isn't 3
any more detailed than that.
4 All right, I'm going to move on --
5 MS. SCHLUETER: So Kevin, Janet Schlueter 6
again. So just following up, I think we might be 7
able to see where our source of confusion is if we 8
look at Slide 6, the 9.6 that Tyson's referring to on 9
the estimated 170 collections. We tried to figure 10 out whether or not that was actually coming from the 11 data on Slide 10, the direct services billing data, 12 the column that does say Part 170 charges over four 13 years. Because we thought --
14 MR. RAMSEY: Yeah, that's not a, yeah.
15 What we have on the slide that we haven't looked at 16 yet, that's the past four years, actual charges that 17 we've billed.
18 MS. SCHLUETER: Right.
19 MR. RAMSEY: What we did here on FY17, 20 that's just an estimate of what we think we're going 21 to bill during FY17. FY17 isn't complete yet. But 22 we, you know, we try to make a guess of what we're 23 going to collect through direct services and then we 24 base our, the amount that we're collecting through 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 annual fees, on.
1 MS. SCHLUETER: Right, so if we just look 2
at the 32 --
3 MS. KAPLAN: Can I -- this is Michele 4
Kaplan. I'd like to clarify what Kevin's been saying 5
about how we developed the estimate for Part 170.
6 For the proposed rule, we don't have a lot of actual 7
data for the year yet, so we estimate.
8 But as the year progresses and then we 9
develop the calculations for the final rule, we do 10 have some actual data, so that the estimate is part 11 estimate, part actual.
12 MS. SCHLUETER: That makes perfect sense.
13 So if we looked at that column, and over four years, 14 it doesn't matter what four years it was, it would 15 average about 8.2. So 9.6 and 8.2 is not that far 16 off. So I think we just wanted to make sure that we 17 were looking at that column correctly, that in fact 18 it could be data that would be useful for you to 19 estimate.
20 Is that right? Maybe as we go through, 21 it'll make more sense. But we were seeing a 22 disconnect between the 8.2 and the 9.6. But 9.6 is 23 purely an estimate is what you're saying.
24 MR. RAMSEY: Yeah, I mean like Michele 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 said, when we start with the proposed fee rule, we're 1
pretty much estimating the whole fiscal year. By the 2
time we get to the final rule, we might have two 3
quarters' worth of actual billing data, and we're 4
only estimating the last two quarters. Hopefully 5
that guess is much more accurate.
6 Slide 8. I apologize for the teeny, tiny 7
numbers, but actually, this was the most legible 8
version I could get. This is the existing matrix for 9
annual fees. Now, I'd like to note, down the lefthand 10 side for licensees, we're listing everyone we've 11 actually issued a license to, whether they built the 12 facility or not.
13 Then you'll notice on the righthand side 14 there are some rows where there's no totals. Those 15 are the facilities that were, we issued a license to 16 them, but they haven't built the facility and 17 completed an operational readiness review inspection 18 yet. And so they're not being billed an annual fee.
19 The license is out there.
20 Now, a frequent question we've gotten 21 when we were coordinating internally was, how does 22 this compare to what all the other business lines do.
23 Now, for the reactor categories, that includes 24 operating reactors, decommissioning reactors, and 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 research reactors, their annual fee is simply the 1
cost to be recovered divided by the number of 2
licensees. Everybody gets the same bill. At least 3
everybody in a given category.
4 However, for non-reactor licensees, we 5
have typically applied some type of weighting factor.
6 Because if all our licensees did nothing but boil 7
water, we'd be great. But they don't do that, they 8
do all kind of weird things. So we try to recognize 9
that.
10 You know, this is the matrix that we've 11 used for fuel cycles. Uranium recovery has their own 12 matrix of what they call regulatory benefit factors.
13 So they use a matrix somewhat similar to ours.
14 Materials licensees have a formula where 15 they put in application fees, which are also a fixed 16 fee, they just pay an upfront-cost for their 17 application, and inspection costs. And they go 18 through this formula. And that's believed to be 19 indicative of the complexity of the license. So 20 there are a lot more fee categories for materials 21 licensees, but they have a formula they use. Uranium 22 recovery and fuel cycle have a matrix.
23 Can we go to Slide 9. So let's take a 24 closer look at that hard-to-read matrix. NRC's 25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 method is based on the processes authorized in the 1
license. So those are the processes that we have 2
listed. Please note that there are some processes 3
that are classified, can't be discussed. We use the 4
unclassified processes as surrogates in that case.
5 Now, we score both safety and safeguards, 6
that's the S and SG columns. For people who may not 7
be familiar with the terminology, safeguards is 8
basically the security side of the house. The 9
available factors are 10, 5, 1, and 0. And these 10 factors are qualitative judgements by the staff. So 11 does anybody have any questions about the matrix that 12 we currently use?
13 MR. SMITH: This is Tyson Smith. Are 14 there any, what are the concerns with the current 15 matrix, if any?
16 MR. RAMSEY: Well, as we'll see when we 17 get into the data, the numbers are qualitative 18 judgements, and there's a lot of assumptions that go 19 into that. And there's always a question about 20 whether we're making good assumptions or not.
21 So one of the, part of this effort was to 22 see if we could validate, you know, if there's any 23 data that we could use to validate the results, just 24 to see if we're on the mark or not.
25
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(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 There's been a belief, and some people 1
ask why there's such a spread in the fees from one 2
licensee to another, and questions raised about 3
whether our fees are fair and equitable, and all that 4
general concern. That's what prompted us to go back 5
and take a look at this. Okay.
6 MR. SMITH: I have a really similar 7
question, this is Tyson Smith again. Is the numbers 8
or the values in the matrix, do they change much year 9
to year?
10 MR. RAMSEY: No, actually, you know, when 11 we pass around and say, well, this is, you know, we 12 ask people who work at the various facilities, both 13 the licensing and inspection, you know, here's how 14 they scored last year, do you think we should change 15 anything. Quite often, there aren't very many 16 changes.
17 I mean, one of the ones that recently was 18 Global had a license for low enriched fuel fab. And 19 we did issue a license for Global Laser Enrichment, 20 for an enrichment facility, but they weren't up and 21 running yet. They had wanted to do a demonstration.
22 So they did the demonstration under Global Nuclear 23 Fuel's license.
24 So they were doing low enriched fuel 25
24 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 fabrication and some enrichment demonstrations. That 1
kind of got them into multiple categories. So their 2
numbers were pushed up a little bit because they were 3
kind of doing two things at the site.
4 MR. SMITH: So is it fair to say that in 5
absence of changes in processes or new or different 6
types of activities, it's been pretty stable?
7 MR. RAMSEY: Yeah, in terms of the 8
scores. Yeah, they don't change a lot from one year 9
to the next.
10 MR. SMITH: Thank you.
11 MR. RAMSEY: All right, let's go to Slide 12
- 10. So this is the billing data. Now, this is --
13 let me make a general comment. We looked at two sets 14 of data to see if we could validate the annual fees 15 calculated in the matrix. Now, we acknowledged that 16 the billing data is for direct services billed under 17 170. These are not the annual fees billed under 171, 18 so apples and oranges, we recognize that.
19 However, we took a look at this data 20 because the data we have for non-billable codes, it's 21 hard to break down into fee categories, because there 22 are no docket numbers there. We do have docket 23 numbers here and we could break it down. So we said, 24 well, let's take a look and see what it looks like.
25
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 So that's what we did. And we used 1
certified billing data over 16 quarters. So these 2
are bills that were actually issued. What we see is 3
that direct services to high enrich fuel fab and 4
enrichment direct services were similar to both, 5
around 20% percentage. And that the direct services 6
to low enriched fuel fab and conversion facilities 7
were similar.
8 So the question that we have is do you 9
think this is a valid comparison? Do you believe 10 there's any relationship between direct services and 11 indirect services that we can gain any insights here, 12 or these are completely unrelated?
13 MS. LANE: Hilary Lane, NEI, just a 14 clarifying question. Over four years, what four 15 years is that? The past, the last four years, or?
16 MR. RAMSEY: Yeah, roughly. You know, I 17 took 16 quarters, so it may not actually fit into 18 fiscal years, you know, it's --- I asked the CFO 19 staff, give me the last 16 quarters of certified data.
20 And so they bring a big, long report and we tallied 21 it up.
22 MR. PADGETT: Kevin -- Wyatt Padgett, 23 URENCO -- I didn't quite catch that -- is that for, 24 which year was that exactly?
25
26 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. RAMSEY: I think it probably strays 1
over a little bit into maybe the first quarter of 2
FY17. I don't remember exactly when I asked them to 3
run the report, but we said we only wanted certified 4
billing data. So it was only for the quarters that 5
the bill's actually been issued. So it may include 6
like first quarter FY17, probably all '16, all fiscal 7
year '15, and maybe a piece of '14.
8 MR. PADGETT: The question I would have 9
is there any trend, you know, when it comes to 10 licensees, you know, I would say specifically for 11 ours, but the value decreasing. I'd have to look, 12 but it seems like it would be. Due to our activities 13 onsite.
14 MR. RAMSEY: Well, I mean, one reasons 15 we took four, you know, 16 quarters or four years, 16 was to smooth out some of the bumps. Because as 17 people probably know, some facilities have had 18 process upsets and issues where we went and spent a 19 lot of time, you know, with reactive inspections and 20 things, and we didn't want those unusual quarters to 21 skew the data too much. That's why we took 16 22 quarters to try to smooth that out.
23 MR. SMITH: This is Tyson Smith. It 24 strikes me that, and this is interesting and, you 25
27 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 know, provides some insights, but without digging in, 1
I'm not sure, without digging into particularly where 2
licensees are in their licensing cycle, for instance, 3
if you have to do renewal or if you're, you know, 4
some other specific activity's going on, that could, 5
you know, certainly shift the costs in one direction 6
or the other.
7 It wouldn't be reflective of the 8
Agency's, I guess, generic activities in the 9
oversight and licensing categories that we were 10 talking about earlier.
11 MR. RAMSEY: Okay.
12 MR. PADGETT: I understand that. Thank 13 you very much, you know, but the difference here is 14 you know, for enrichment there -- and for conversion 15 both, there's really no equivalent facilities to 16 balance that against to get that data reflective of 17 the actual amount of effort at that time. It might 18 be appropriate to pull it here, and then depending 19 upon those activities, you know, it could be -- for 20 us, I would specifically say, because of reduced 21 construction. So those are just things to consider.
22 MR. RAMSEY: Yeah, and we recognize that.
23 In fact, we got questions, because if we got -- if 24 you're a brand new licensee and you're going through 25
28 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 a lot of start-up activities, there's a lot of 1
activity there. If you're a well-established 2
licensee and you're operating well, probably your 3
hours are a little less.
4 That's probably the reason we took a 5
four-year span. People have asked, well, what about, 6
you know, could you do five years, could you do six 7
years. Yeah, we could, out of whatever we have data 8
for, we can take whatever average you feel is best.
9 So anybody, you know, if you think that a different 10 span of time would be better, you know, let us know 11 and we'll pass those comments along.
12 MR. SMITH: This is Tyson Smith. It 13 strikes me that there's at least one easier breakdown.
14 Are they licensing fees or are they inspection-15 related fees? Do you all track those, is there a 16 separate code, or do you trace those differently?
17 MR. RAMSEY: Well, we yeah, we could, I 18 think we could break it down into whether it was 19 licensing or inspection. But would that make a 20 difference?
21 MR. SMITH: Well, I wouldn't know 22 without, I guess, without seeing the data, I guess.
23 But you know, it strikes me that there might some 24 differences. Or it might eliminate there. You know, 25
29 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 certain types of facilities require higher inspection 1
levels. And I think this is compounded by the fact 2
that we don't have a good breakdown in the licensing 3
and oversight category you provided early.
4 So I still know it's, you know, that 9.6 5
is two-thirds of that licensing and one-third 6
inspection, or is it vice-versa? So it's just 7
there's a level of granularity that I think doesn't 8
permit us to, you know, evaluate whether this is a 9
reasonable approximation going forward.
10 MR. RAMSEY: I mean, one of the concerns 11 that we got into internally was sharing sensitive 12 information. I mean, if we actually, we suspect that 13 some licensees might not be happy if we actually 14 shared their billing statements with the whole world, 15 or we don't want to be quite that open. That's why 16 we took, you know, a four-year total might be 17 reasonable. So there's some sensitivity to what you 18 all are willing to share.
19 Okay, so anyways, that's the billing 20 data. Let's go to Slide 11. Second set of data is 21 like I said, if the billing data is for direct 22 services, annual fees or for any other services, not 23 direct. Now, maintaining procedures and guidance is 24 a large part of the other services. So what we did 25
30 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 was, we said, well, let's make a list of all the 1
licensing and inspection documents we maintain.
2 That was basically going through a lot of 3
standard review plans and inspection procedures and 4
just tallying up all the references. And we, having 5
provided that background for that list that's in the 6
handouts, so if you want to go review that and tell 7
us if we missed something, or if we mischaracterized 8
something, please, you know, let us know if you see 9
any errors there.
10 Now, many documents are applicable to 11 more than one fee category. And part of what we did 12 was we said, well, we have all the documents, let's 13 look at what's been revised recently, because there 14 might be some old documents that just haven't been 15 revised for decades and we're just not spending a lot 16 of time on.
17 So if we go to Slide 12, this is what we 18 ended up with. Approximately 250 documents totaled.
19 And when we got into which fee categories that they 20 were applicable to, those were the numbers we came up 21 with. So not a huge spread from one fee category to 22 another. And we didn't see a significant difference 23 between old documents versus ones we revised 24 recently.
25
31 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 So again, do you think that's valid to 1
compare that to the fee matrix? Is that, think we 2
should be using that for insight?
3 MR. SMITH: This is Tyson Smith. No, I 4
don't. I haven't seen the list of all the documents, 5
but, you know, based on my experience, there a number 6
of documents that, you know, apply in their entirety 7
to class of facility, but only a little piece applies 8
to another facility.
9 And so I'm not sure just looking 10 at the documents without being able to infer how much 11 of that document relates to a particular class of 12 facilities. I don't think that's really a fair and 13 reasonable approach.
14 MS. SCHLUETER: Janet Schlueter, NEI.
15 So I'm still missing something on the 250 versus the 16 308. This sentence, Approximately 250 documents were 17 identified versus the documents revised, 308 and the 18 812. What is the 250 again?
19 MR. RAMSEY: Well, when it does, what I 20 added up the there was, so if a document was 21 applicable to all four fee categories, I counted it 22 four times. That's why that number's so much bigger.
23 MS. SCHLUETER: Okay, that was a question 24 we had.
25
32 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. RAMSEY: The second table is smaller 1
because those are only the documents that have been 2
revised recently. So we started off with a smaller 3
data set. And then we went through again and just 4
counted the number of hits on applicability.
5 MS. SCHLUETER: Okay, so there is some 6
double counting, if you will.
7 MR. RAMSEY: Yeah, and like I said, if 8
you want to review the table and say, well, you 9
counted this as applicable to my fee category, and I 10 don't believe it's applicable. You shouldn't have 11 counted it, you know. We'd be more than happy for 12 you to help us scrub that list.
13 MS. SCHLUETER: Okay, I guess that is one 14 question we had. Because I think, relative to 15 Tyson's point, when I started flipping through the 16 list, which actually there's one on the other side of 17 the room. You know, when you get to like the reg 18 guide series 8, all the rad protection stuff that 19 Kevin, I know you know quite well, it's not unique to 20 fuel facilities at all.
21 And so I have to believe that the touch 22 that the fuel cycle division would make on that 23 document on any revision would be pretty light, 24 considering that there's many divisions that have 25
33 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 responsibility for that document across the Agency.
1 You know, Research or NRR, depending on who it is had 2
the lead.
3 So it's hard to tell, when you just look 4
at a huge inventory like this, sort of the waiting 5
factor, if you will, for one group of documents or a 6
single document versus another. Huge inventory, but 7
they aren't all equal in their contribution to this 8
budget.
9 MR. RAMSEY: Yeah, I mean recognize that, 10 yeah, we may not be the owners of every single 11 document. There may be, you know, another office, 12 another division that owns a document and we're just 13 providing input to their changes.
14 MS. SCHLUETER: Yes, I think we were just 15 trying to figure out how does that effort all 16 translate to billable hours.
17 MR. ERLANGER: This is Craig. One 18 comment that I'd like to make is that it's not just 19 the division that you may interact with on a day-to-20 day basis. It's the fuel facilities business line 21 which has a, you know, I think it was 112 or 116 FTE.
22 So it's much broader than, or it is broader than NMSS.
23 It involves other divisions and organizations 24 throughout the Agency.
25
34 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MS. SCHLUETER: Right. Yeah, I guess 1
one thing we kind of, just I'm going to throw this 2
out here, I don't expect you to answer it.
3 But in looking at this large inventory 4
too, I think one thing that we want to sort of go 5
back and maybe look at the list and scrub it a little 6
bit from our own perspective to just sort of identify 7
which one of these documents are guidance documents 8
that this community typically references and uses as 9
part of their license programs, licensing actions, 10 renewals, amendments, and what have you.
11 And that might help us be able to hone 12 down on those documents that are most important to 13 this business line.
14 MR. RAMSEY: Yeah, and the one thing I 15 didn't do, I didn't try to list all our websites.
16 But if you think that maybe looking at stuff like 17 this is useful and it's like, yeah, we also think you 18 ought to make a list of all the websites you're 19 maintaining. Because technical staff spent a lot of 20 time trying to keep those websites up to date also.
21 Do you think that's a useful exercise?
22 Let us know. That's something else we could look at.
23 Okay.
24 Slide 13. Okay, so possible approaches.
25
35 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 We could continue using a fee matrix. Maybe consider 1
changing some of the factors that we've assigned. Do 2
you think that's best bet? Do you have any ideas on 3
changing the scores? We would be interested in that 4
input.
5 Another alternative would be to do what 6
the reactors do, just take the total, divide by number 7
licensees, everybody gets the same bill.
8 A third option would be doing something 9
similar to the formula that was used for the materials 10 licensees, which is kind of a combination of uniform 11 proportional methods. And for the proportional side 12 of things, it would be using the percentages that 13 came out of that direct services evaluation.
14 So I'm going to ask you to hold your 15 questions. Let me go through this next slide, kind 16 of get it all out there, and then we'll see what 17 comments people have. So let's go to Slide 14.
18 So of course you know what the current 19 fee matrix is. That's over on the righthand side 20 there, at least for that fiscal year.
21 If we were going to do the uniform 22 approach, at least for FY17, that's that third column.
23 So basically everybody's got a bill for 3.9 million.
24 Now, if we were going to do this combination, we got 25
36 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 a 15% and 85% split. So one of the obvious questions 1
is, well, where did that come from.
2 When we were debating internally whether 3
there's any relationship between direct services and 4
indirect services, the conclusion that we came to 5
was, at least the conclusion that staff came, was 6
that we believe there is a relationship for 7
significant issues.
8 When there is a significant issue, some 9
kind of a process upset or something like that, we 10 believe that there'll be increased direct services 11 through the reactive inspections, possibly unplanned 12 licensing actions to implement corrective actions.
13 And there would also be increased 14 indirect service, because you'd have more involvement 15 of senior management, more work for public affairs, 16 more work for congressional affairs, that type of 17 thing. So we did see a relationship for significant 18 issues. The question became well, what's a 19 reasonable estimate of our effort on significant 20 issues.
21 We settled on 15%. So that's where we 22 said 15% of our efforts, especially with significant 23 issues, we'll put that proportional thing in there.
24 But for the rest of it, it's uniform, and the rest of 25
37 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 it just gets distributed uniformly. So that's where 1
those numbers came from.
2 Okay, so what do you think, good, bad?
3 MR. PADGETT: This is Wyatt Padgett from 4
URENCO. So the proportional amount that you have in 5
that column, is that based on the existing matrix, or 6
was that the proposed?
7 MR. RAMSEY: You know, the proportional 8
amount is based on that table for the direct services.
9 If you look back at the breakdown of direct services 10 over a four-year period, that's where those numbers 11 came from.
12 So this, these two approaches, the 13 uniform approach and the combination approach, we'll 14 be getting away from the matrix entirely and just 15 using these grand totals.
16 MR. PADGETT: Are you asking for comments 17 now?
18 MR. RAMSEY: Yeah, if you want to give 19 now, or, you know, email them to me later, or whatever 20 you want to talk about. Nobody wants to share?
21 MR. SPANGLER: Dave Spangler with B+W.
22 MR. RAMSEY: Okay.
23 PARTICIPANT: My understanding that 24 proportional amount column or the combination 25
38 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 approach now would be better. When we read it the 1
past week, I wasn't sure what the purpose of that 2
was, but I don't want to put words in your mouth.
3 But that would be like, my facility was 4
having a more significant issue at the time, more 5
weight was coming into that as a result of my facility 6
or another's, or does that still get distributed in 7
some fashion? How is the proportion side of it, the 8
side about a proportional percentage to the left of 9
that column, column number four? So they're still 10 taking a total, taking 15% of the total, and in 11 proportion by the 15, by the --
12 MR. RAMSEY: Yeah, when you see the, 13 across the top there where it says, Proportional 14 amount of four million and change, and then 15 parenthesis, that that's 15% of the total, of the 27 16 million. So we're starting with the four million 17 number and we're multiplying by the percentage in 18 that percentage column, and that's where the values 19 come from.
20 MR. SPANGLER: Got it. And then there's 21 the remainder trying to balance, that there's, again, 22 I'm trying to get to make sure I'm understanding the 23 FAQ, so under uniform with a proportional amount that 24 we could discuss whether 15 is the right number. But 25
39 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 here's proportionally the level of effort and 1
significance in that, in uniformly here's the, we 2
work the same for each licensee no matter what you 3
are.
4 These contributions that are the Part 21 5
or whatever it's, I don't know, Part 51, whatever 6
those kind of things that, in 250 documents are very 7
similar. That's uniform among them.
8 So your thought there was not a straight 9
fee matrix, but that I think has been outdated and 10 not as nimble and flexible as the logic we were going 11 on. And maybe just straight uniform doesn't seem to 12 take in risk, and a combination approach is attempting 13 to take in some sort of proportional risk based upon 14 a four-year history. Is that kind of what this 15 comparison chart is?
16 MR. RAMSEY: Yeah, I mean we were getting 17 back to it's a relationship between the direct 18 services and the indirect services. Because, I mean 19 one of the arguments that was made internally was 20 well, if you received more direct services, you've 21 benefitted more from the procedures and guidance 22 associated with those direct services.
23 We got a whole enforcement manual, if you 24 don't have any enforcement actions, you're not really 25
40 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 benefitting from that enforcement manual. So, you 1
know, that's part of the argument. And the other 2
part of the argument is now there's no relationship 3
there, you shouldn't be paying any attention to any 4
of that.
5 But like I said, the staff felt that we 6
could argue for a relationship when we get into 7
significant issues, because we feel like there's 8
extra effort being expended both on the direct side 9
and the indirect side. For routine activities where 10 there's no unusual events, it's harder to make that 11 argument.
12 PARTICIPANT: Right. So you already 13 have that built in somewhat if you look at the formal 14 chart on total fraudulent spending charges over four 15 years. Those areas of higher risk, some have been 16 applied, resident, I know the resident charges, it's 17 my understanding at the latter end of the four-year 18 chart.
19 Lower risks are adding routine 20 inspections, unless there is an incident that would 21 require more attention. So those things, or 22 licensing actions or amendments or et cetera are 23 effective as well as reflective in this level of 24 effort, if you will, outside of routine.
25
41 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. RAMSEY: Yes, and so that's, you 1
know, the question that we're posing to you all is 2
does this sound like a good idea, or should we just 3
leave well enough alone. Should we do something 4
different? Is there an approach we haven't even 5
thought of here?
6 PARTICIPANT: Well, I would say from GL's 7
standpoint that they've never been in support of a 8
fee matrix, and don't think that that has really any 9
good basis, it's not very flexible, it's not 10 transparent. It's so out of date it's charging us 11 right now for things we haven't done in six years or 12 decades. So that to me shouldn't even be a 13 consideration going forward. Though I do applaud the 14 NRC for taking a look at.
15 The other would be one of the reasons I 16 think they are looking at it is the disproportion 17 between the Cat 1 being twice a nuclear power plant.
18 But if you look at the scale, how could you positively 19 set forth to say, you're three orders of magnitude 20 less, and the NRC considers you twice as risky as a 21 nuclear power plant. That clearly should not be a 22 continued practice.
23 If you thought that, then you could take 24 a sketch, run fuel fabs out of this and move them 25
42 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 into a nuclear power plant, if they're as risky as a 1
nuclear power plant. So that's kind of just what I 2
was thinking, but it still takes a large amount, 3
something like twice as much as a nuclear power plant 4
for the last couple of years. Or a factor of 1000 5
less of risk. So I do applaud you all looking into 6
it, I hope you make it more sense.
7 Within the fuel fab that I haven't, 8
there's nothing so radical as that. But a third 9
approach that you all have not considered, that I 10 would add now is that you could remove the Cat 1, 11 because they are covered by government. And that 12 would prevent the government from charging the 13 government, and you could put those, by rulemaking, 14 into the correction column.
15 I'm going to just to pick a number, say 16 90%, do 80% and include the Cat 1, or call them just 17 covered by the government if you include it in that 18 overhead amount, not recovered.
19 That's just one other way to look at this 20 and skin the cat and not burden the type of -- that 21 will not try to burden it through a Cat 1. So this 22 is a step in the right direction, but maybe not all 23 the way, because you failed to push a large amount 24 over to the non-Cat 1.
25
43 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. RAMSEY: Okay.
1 PARTICIPANT: Thank you.
2 MR. RAMSEY: Anybody else?
3 MR. SMITH: This is Tyson Smith. I do 4
not support this change. I think the old method 5
worked just fine. It seems to be relatively stable, 6
it hasn't changed much. I'm not seeing a driver for 7
a change here. While I appreciate the effort to try 8
and simplify the way fees are charged, I don't think 9
that should come at the expense of no longer 10 reasonably reflecting the cost of regulatory services 11 that are provided.
12 You know, frankly I just don't see how 13 you can lump a conversion facility that only handles 14 natural uranium into the same category as, you know, 15 a high enriched uranium fuel fabrication facility. I 16 think those are just too different of a type of 17 facilities to treat them all the same. And I think 18 if you, as a result, I don't think that this approach 19 would pass muster under OBRA.
20 MR. RAMSEY: Well, that was Tyson Smith 21 who just spoke there. This is Kevin Ramsey again.
22 I would like to point out that we're not really trying 23 to bill on risk, we're trying to bill for the services 24 we provide. So keep that in mind. But in fairness, 25
44 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 if you think about it, after the 9-11 attacks, we put 1
out a lot of security orders.
2 Now, when terrorist attacks happened, the 3
only people who were required to have any physical 4
protections, plans, or you know, guns and guards, 5
were the people who had enriched uranium. But 6
afterwards, we started imposing those physical 7
protection requirements on natural uranium and by-8 product material.
9 And so in many cases, trying to get people 10 who'd never done it before up to speed required more 11 effort than working with people who'd been doing it 12 for years. On top of that, we have the natural 13 phenomenon concerns that came up after the earthquake 14 in Japan. And as you all know, that involved a lot 15 of work across the whole business line.
16 So in recent years, a lot of our effort 17 has been to a large extent much more uniform across 18 the business line. Because things that we were only 19 doing for enriched uranium we're pretty much doing 20 for everybody now, at least on the security side.
21 And I know there's variations. But there's a lot of 22 different factors that go into what we're spending 23 our time on.
24 MR. SMITH: I think it's, and I 25
45 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 appreciate that, and I accounted for all of those 1
different factors. You know, if you look at your 2
current matrix, the level of effort that the NRC has 3
been relying on for 15 plus years has the level of 4
effort at, for a conversion facility, at one-quarter 5
of that of a fuel fabrication facility, HEU fuel fab 6
facility. It's about half that of the enrichment 7
facilities.
8 And yet in, you know, proposing to, in 9
one fell swoop, more than, you know, double the annual 10 fee paid by that facility, without any demonstration 11 that what is currently being used is unreasonable.
12 And so that's the part that I'm not, I don't 13 understand.
14 And when you look at, and I know when 15 you delve into the guidance, what you will find is 16 that you know, a lot of the guidance touches on things 17 that do not apply at Metropolis, they're a conversion 18 facility, like criticality and things like that.
19 ISAs they're not required for Metropolis, whether 20 they volunteer for that or not.
21 So that's my concern, I just don't think 22 that looking at documents is an insufficient way to 23 measure the level of regulatory effort that's being 24 provided. It's too high level and isn't granular 25
46 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 enough, given the disparity and the types of 1
facilities that are being regulated.
2 I mean if we're, in the comment from the 3
last person who spoke about removing certain types of 4
facilities from this, you know, if you want to do 5
that, it seems like a conversion facility, which is 6
a Part 40 facility, perhaps then should be more 7
associated with uranium recovery facilities and other 8
Part 40 facilities, rather than Part 70 facilities.
9 So just that difference between the -- it 10 is a level of risk, but it's also about the types of 11 material that are there and the level of risk at the 12 facility is reflected within the guidance documents.
13 I just think that it cannot be treated uniformly.
14 That's too broad of a brush to paint with for 15 something as significant as a 2.5% increase in fees.
16 MR.
RAMSEY:
Okay.
Any other 17 commenters?
18 MR. SHACKELFORD: Yeah, let me make a 19 comment. This is Randy Shackelford from Nuclear Fuel 20 Services. With regard to the matrix, of course NFS 21 is a Cat 1 facility. We're not in favor of that, 22 using that matrix. Primarily because if we're 23 looking at providing equity for billing for services 24 provided, I don't think the matrix really does that.
25
47 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 You know, yeah, granted we used the 1
matrix 2
for a long time, but I don't think it's fair and 3
equitable.
4 MR. RAMSEY: Okay. Was there somebody 5
else on the bridge who wanted to speak? Okay, so 6
going on to Slide 15. This is just summarizing a lot 7
of the things we've already discussed. So when it 8
comes to the data, if you want, we'd be very 9
interested in feedback on, should we, or additional 10 feedback that we don't have already.
11 Should we be comparing the billing data 12 for direct services to the fee matrix? And should 13 we be comparing the document data to the fee matrix?
14 And anything else that we should be, any other data 15 you think we should be looking at? We're very 16 interested in feedback on those items.
17 On Slide 16, of course with regard to the 18 approaches, should we keep using a fee matrix?
19 Should we change to the uniform approach or the 20 combination approach, or something else, if somebody 21 has a better idea? Feedback on anything along those 22 lines would be useful.
23 Let's go to last slide. And like I said, 24 I just want to re-emphasize, no decisions have been 25
48 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 made. What we have been asked to do is provide a 1
status report to our senior management in the February 2
time frame. And we're going to do that, based on 3
what we've heard at this meeting and any other input 4
you want to provide us. If you can get that to us 5
by January 17, we can provide that with the status 6
report.
7 The reason we're asking for January 17 is 8
not to send you home for the holidays with homework, 9
but that'll give us an opportunity to review your 10 feedback, and if we have any questions about 11 clarifying what you said and verifying that we 12 understand what you mean, we could do that during the 13 week of the 22nd, and get that all folded into our 14 status report.
15 That's just a status report. Like I 16 said, we're not proposing any changes to the fee 17 matrix in the FY18 fee rule. The FY19 fee rules, CFO 18 won't be asking us for input until June. So we have 19 between now and June to keep kicking this around. If 20 you have a brilliant thought after you leave here, 21 please share it with us. But that's the schedule 22 that we're working to right now. Any questions?
23 MR.
SHACKELFORD:
Just some final 24 comments from NFS. You know, first, we really 25
49 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 appreciate your interest in working with the industry 1
on this topic. It's an important topic for not only 2
NFS but the entire industry.
3 Second, we recognize that progress has 4
been made on the fee reduction and building 5
improvements, and we hope that continues. NFS, along 6
with the industry, the rest of the industry, we're 7
interested in understanding the basis for the fees to 8
the extent that we can. You know, the details behind 9
the fees, the number of FTEs, the total fee budget.
10 We also want the fees to be fair and 11 equitable relative to the risk of protecting the 12 public and the environment. Also relative to the 13 services that the NRC is providing to the facilities.
14 Transparency is very important because of interest 15 from our customer and our ability to communicate the 16 basis of the fees with the customer.
17 For NFS, the fees are a significant 18 portion of our operating costs. And as you've seen 19 in the slides, you heard from Dave Spangler, with 20 regard to the Cat 1's, it's a substantial contribution 21 to the annual fees from the two Category 1 facilities.
22 And then finally, NFS will be planning to 23 provide comments in writing.
24 MR. RAMSEY: Okay, thank you.
25
50 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. ZIMMERMAN: This is Jake Zimmerman 1
from NRC. Janet, I'm going to turn to NEI and maybe 2
put you on the spot a little bit, but I'd be 3
interested, you know, we really want to know if you 4
think there's a better way. And can't help but think, 5
you know, NEI, you charge a fee for your members.
6 And I'm just curious, do you have some 7
sort of a matrix, do you charge all of your members 8
the same exact fee? You may not be able to tell me, 9
but is there some way that you've determined, perhaps, 10 that either today you could share, or through your 11 formal feedback, that may help us to come up with a 12 better way?
13 This is what we've come up with, but we 14 certainly are interested in your feedback and views 15 on how we could do it better or differently. Or is 16 the same okay?
17 MS. SCHLUETER: Right, yeah, I don't 18 think I'm at liberty to discuss NEI members' fee 19 membership matrix, although I will say it's not a 20 uniform approach, okay. But I think as an industry, 21 we thought about this a little bit, the slides were 22 very helpful. We've gotten a lot of good questions 23 out on the table today and information back.
24 I think we do need to go back and see if 25
51 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 there's some other alternative that maybe we can come 1
up with. I'm not sure we can, but I think it is 2
incumbent upon us to try to do that. Take in what 3
we've heard, obviously there's a diversity of 4
opinion, because it doesn't matter how you slice and 5
dice this. I mean, any way you do it, unless you do 6
the uniform approach, there's going to be winners and 7
losers.
8 It's just a matter of the numerator, as 9
I think Randy was getting at. You know, how big is 10 the pie that you're trying to cut up? We want the 11 pie smaller, I know we're not here to talk about the 12 size of the pie, but that is fundamentally where we're 13 at.
14 So we'll put our thinking caps on and see 15 if we can come up with some alternative that hasn't 16 dawned on us yet based on what we reviewed in the 17 slides. But maybe the conversation today will lead 18 us somewhere. And we will get your comments on or 19 before that date.
20 MR. RAMSEY: Okay, and this is Kevin 21 Ramsey. Let me point out one thing that we didn't 22 mention, just so you have that to the back of your 23 head. If we implement a change, especially something 24 as drastic as what we've thrown up there, we recognize 25
52 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 the financial burden as their annual fee shoots way 1
up. So we are completely open to phasing in any 2
changes.
3 If you want to provide any thoughts 4
about, well, if there is an increase, I want it phased 5
in over whatever period of time you think is 6
reasonable for your operating budgets. I mean, we're 7
not, we don't want to drive anybody into bankruptcy, 8
but we want to, we're hoping to improve the process.
9 MR. ERLANGER: This is Craig. I'd just 10 like to mention, as Kevin articulated early on, 11 today's focus was on the Fuel Facilities Fee Matrix.
12 The Agency, though, is looking at fees 13 across the board, and there are many initiatives on 14 their way, they've been going on for some time, 15 ranging from our fee transparency project to what the 16 actions we took under Project Aim. And we are looking 17 at all these items.
18 What we want to do today though is really 19 hone in on the matrix itself. As Kevin mentioned, 20 at the end of the day, there will be an aspect where 21 we need to apportion, no matter what that number is.
22 So I appreciate, I didn't want to -- I wanted to let 23 you know that as an agency, we are looking at the 24 broader issues associated with fees. Thanks.
25
53 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433 MR. RAMSEY: Okay. Any final comments 1
from anybody on the bridge? Hearing, none, we are 2
adjourned. Thank you.
3 (Whereupon, the above-entitled matter 4
went off the record at 3:12 p.m.)
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