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 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
+ + + + +
PUBLIC MEETING ON FUEL FACILITIES FEE MATRIX
+ + + + +
WEDNESDAY, DECEMBER 13, 2017
+ + + + +
ROCKVILLE, MARYLAND
+ + + + +
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 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
2 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*
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
3 1 P R O C E E D I N G S 2 2:02 p.m.
3 MR. RAMSEY: Okay, I want to welcome 4 everybody to the public meeting on the Fuel Facilities 5 Fee Matrix. And I think Robert had some opening 6 remarks.
7 MR. JOHNSON: Yeah, thank you, Kevin. My 8 name's Robert Johnson, I'm the Fuel Manufacturing 9 Branch Chief. I've met most of you at this point.
10 We'll go around the room in just a minute for 11 introductions, but. Okay. Thank you for coming, 12 we've got a great turnout. We're here to talk about 13 the Fuel --
14 MR. DOLLEY: We can't hear you on the 15 bridge, and could people identify themselves, please.
16 This is Steven Dolley with Platts.
17 MR. JOHNSON: Okay, good afternoon.
18 Let's try this again. My name is Robert Johnson, the 19 Fuel Manufacturing Branch Chief. I wanted to welcome 20 everybody. We've got a great turnout here in the 21 room, and it sounds like we've got a bunch of people 22 on the bridge line.
23 The purpose the public meeting today is 24 to talk about the fee matrix, to gain stakeholder 25 feedback and perspectives on the Fuel Facilities Fee NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
4 1 Matrix. The fee matrix is an algorithm that's used 2 for, used to apportion annual fees across the major 3 fuel facilities.
4 NRC has been evaluating the process and 5 considering potential improvements, and we wanted to 6 reach out the members of the public and our 7 stakeholders to get some additional insights or 8 feedback on any potential improvements.
9 So the purpose of the meeting is not to 10 have a lengthy discussion about NRC's going to be 11 reducing fees. It's really to try and get insights 12 on how the fees are apportioned. With that, I'd like 13 to pass it back to Kevin.
14 MR. RAMSEY: Okay, my name's Kevin 15 Ramsey, I'm a project manager in the Fuel 16 Manufacturing Branch. I'd like to welcome everybody.
17 Before we get started with the introductions, just 18 like to have a brief safety moment.
19 If there's any reason to leave the 20 building for a fire alarm or something, you can go 21 back out through the lobby the way you came in. If 22 for any reason that way is blocked, you can also turn 23 left, go all the way down around the corner. There 24 is another exit door down there. The bathrooms are 25 also down to the left, if you need a water fountain NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
5 1 or anything like that.
2 So I'm going to ask Robert to pass the 3 microphone around. We're going to ask everybody to 4 introduce themselves to him. My name is Kevin 5 Ramsey, I'm the Project Manager in the Fuel 6 Manufacturing Branch.
7 MR. JOHNSON: This is Robert Johnson 8 again, Fuel Manufacturing Branch Chief 9 MS. KAPLAN: Michele Kaplan, License Fee 10 Policy Chief.
11 MR. McKIRGAN: John McKirgan, I'm Chief 12 of the Spent Fuel Management Branch here at the NRC.
13 MR. ERLANGER: Craig Erlanger, I'm the 14 Director of the Division of Fuel Cycle Safety 15 Safeguards and Environmental Review.
16 MS. JACOBS: Jo Jacobs, Budget Analyst 17 in Office of Chief Financial Officer.
18 MR. DOLLEY: We can't hear the people 19 off-mic.
20 MS. SOLO LUYO: Soly Soto, I'm with the 21 Division of Recycle Safety and Safeguards.
22 MR. MARCANO: Jonathan Marcano, NRC.
23 MR. SMITH: Brian Smith, Deputy Director, 24 Division of Fuel Cycle.
25 MS. ALBERT: Michelle Albert, OGC, NRC.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
6 1 MS. SCRO: Jennifer Scro, OGC, NRC.
2 MR. SUTTERBERG: Jeremy Suttenberg, OGC, 3 NRC.
4 MS. RAND: Jennifer Rand, NMSS.
5 MR. BARTLETT: Matt Bartlett, Fuel Cycle.
6 MR. COHEN: Zachary Cohen, Winston &
7 Strawn.
8 MS. CUADRERO: Leira Cuadrero, Fuel 9 Manufacturing Branch.
10 MS. LANE: Hilary Lane, NEI.
11 MS. SCHEIMAN: Jamie Scheiman, Naval 12 Reactors.
13 MR. PIERCE: Max Pierce, Naval Reactors.
14 MR. SMITH: Tyson Smith, Winston &
15 Strawn.
16 MR. ZIMMERMAN: Jake Zimmerman, I'm the 17 Chief for the Enrichment and Conversion Branch in 18 Fuel Cycle Division.
19 MS. SCHLUETER: Janet Schlueter, Senior 20 Director for Materials and Radiation Safety at NEI.
21 MR. SHACKELFORD: Randy Shackelford, 22 Nuclear Fuel Services.
23 MR. KNOWLES: Tim Knowles, Nuclear Fuel 24 Services.
25 MR. RAMSEY: Okay, thank you. If we NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
7 1 could go to Slide 2. Okay, basically, up to now 2 we've completed the introductions. We're going to 3 do a presentation on the fee matrix of the data and 4 the approaches that we've considered so far. Slide 5 2. And then we'll open it up for comments and 6 questions.
7 Now this is a Category 3 meeting, so we're 8 inviting people to comment and, you can comment and 9 ask questions all through the meeting. And we'll try 10 to use the microphone as much as possible to help 11 people on the phone line.
12 So if you want to go to Slide 3. Now, 13 over the past year, we have engaged with our internal 14 stakeholders on these subjects. This the beginning 15 of our efforts to engage with external stakeholders.
16 No decisions have been made, and no changes to this 17 fee matrix will be proposed to the FY18 fee rule.
18 And we expect publication of the proposed rule for 19 FY18 in January.
20 Basically we felt like we had to engage 21 external stakeholders before we proceed with any 22 changes. That's why we're not doing anything this 23 year. We value your input, and we want to allow time 24 for a meaningful exchange of ideas.
25 So our objectives here are review the NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
8 1 current method that we use to calculate annual fees 2 fuel facilities, review the data that we've gathered 3 and the alternative approaches that we've considered 4 so far, of course obtain your input, and answer any 5 questions.
6 Go to Slide 4. Now, the NRC is aware 7 that the industry has concerns with our fees. And 8 we recognize the concerns, and we've completed 9 several efforts to identify efficiencies. These 10 efforts have resulted in significant reductions in 11 our budget over the past few years. What you see on 12 the slide here is our budgets over the last few years.
13 Now, currently we have ongoing efforts to 14 identify additional efficiencies, so we hope that the 15 reductions will continue. As Robert said, the 16 purpose of this meeting is not to discuss the size or 17 the speed of the budget reductions. It's to engage 18 you on the method used to calculate the annual fees.
19 And as you'll see in the next few slides, 20 we recover some of our, what we have to reimburse the 21 Treasury for, we recover some of that through direct 22 services and some of it through annual fees. So 23 regardless of how small our budget gets, there's 24 always going to be a piece that we have to recover 25 through annual fees. So this distribution isn't NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
9 1 going to go away.
2 Okay, Slide 5. So the NRC has two types 3 of fees. We have service fees for direct services.
4 And what I mean by that is usually licensing actions 5 or inspections where we're charging our time to a 6 cost accounting code and there's a specific docket 7 number assigned to that code. So those hours get 8 charged to that docket, those are service fees.
9 All other costs are recovered through 10 annual fees. Those are basically, those codes don't 11 have any docket numbers associated with it. An 12 example is this meeting. There is no specific docket 13 number associated with this meeting, so the time that 14 we spent on this all goes into the bin for annual 15 fees.
16 Now, a fuel facility business line 17 distributes annual fees based on a level of effort to 18 regulate each facility, and that calculation's been 19 based on a matrix of effort factors that we've been 20 using since 1999.
21 If we could go to Slide 6. So for the 22 fuel facilities business line, this is what the 23 numbers look like for FY17. Total budgeted resources 24 for our business line was roughly 34 million.
25 The estimated Part 170 collections, those NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
10 1 direct services, licensing and inspection actions, 2 about 10 million, so we subtract that out. There are 3 some other adjustments that are made, some surcharges 4 that get added back in. And then we have the total 5 amount that we recover through our annual fees. So 6 that's what it looked like in FY17.
7 MR. KNOWLES: Did you provide any 8 additional details on the other adjustments?
9 MR. RAMSEY: Okay, hold on a second. The 10 question was additional information on the 11 adjustments.
12 MS. KAPLAN: So the other adjustments, 13 as you can see from the fuel for '17, there was some 14 generic transportation costs, which was allocated to 15 this fee class, low level waste surcharge, and then 16 there was a fee relief surcharge. So those are three 17 components of the 4.1 million.
18 MR. KNOWLES: What's the, how did you get 19 to the 9.6 as the estimated collection?
20 MR. RAMSEY: The question was how did we 21 get to 9.6. Basically what we do is we go to the 22 licensing and inspection staff each year and say, 23 okay, here were the hours you charged last year. What 24 do you expect next year? And it's an estimate, but 25 it's asking them do you expect to charge more hours, NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
11 1 fewer hours, what's your best guess. And so we get 2 all that input from the licensing and inspection 3 staff, and the estimate is based on that.
4 MR. SMITH: Okay. I guess a related 5 question is on the next slide, you've got two 6 categories for licensing and oversight, which would 7 sound to me like direct services, but those total 29.
8 So I'm just curious as to what's the subset. What 9 does licensing and oversight from the next page mean?
10 MR. RAMSEY: Okay, the question is on 11 Slide 7, so let's go to Slide 7. Of the 33.9 million 12 that we talked about in the last slide, this is the 13 breakdown for FY17. And you'll notice that most of 14 the resources go to licensing, oversight and 15 rulemaking. And oversight is inspection.
16 So as was noted in the question, 17 licensing and oversight get up around 30 million, but 18 we're only recovering ten million from direct 19 services. So what are those technical staff doing?
20 Again, meetings like this, when they're working on 21 guides and procedures, that's generally a non-22 billable action. Of course rulemaking's not a 23 billable activity. Maintaining our websites.
24 You know, anything that's kind of 25 generic. And of course there's general NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
12 1 administrative overhead tasks also. But anything 2 that's not associated with a specific docket number 3 is going into that bin for annual fees. Okay?
4 Janet.
5 MS. SCHLUETER: Yeah, I don't know what 6 to do without a mic. What do you want?
7 MR. RAMSEY: I can repeat your question 8 if you just want to do that.
9 MS. SCHLUETER: Well, I think yeah, 10 Tyson's getting at something that, you know, the 11 observation that we made. So I just want to make 12 sure that we're all interpreting what you're saying 13 correctly. And that is, I guess about two-thirds of 14 the cost there of the 29 million, is actually for 15 non-direct service activities, like guidance, like 16 rulemaking, generic issues, the website, the things 17 you just mentioned.
18 MR. RAMSEY: Right.
19 MS. SCHLUETER: That's correct? It's 20 like 9.6 out of the 29 in this case.
21 MR. RAMSEY: Yeah, roughly. The 22 breakdown that we've seen in recent years is about a 23 third comes from direct services to a specific 24 licensee, two-thirds is not allocated to a specific 25 licensee and gets distributed through annual fees.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
13 1 If we can reduce our overhead, we might be able to 2 get that closer to 50-50, but that's where we are 3 today.
4 MS. SCHLUETER: Well, maybe not just 5 overhead, unless you mean the word overhead very 6 broadly. How did you mean to use the word overhead 7 in that case?
8 MR. RAMSEY: Well it was, a lot of the 9 efforts that we're looking at internally is how can 10 we get more things channeled into those specific 11 services that are charged to a specific docket and 12 off this unspecified thing that people just kind of, 13 just collects this massive amount of charges.
14 I mean, quite frankly, some managers, 15 they just have like a code for supervision, and they 16 don't break down their time as to which licensee's 17 document they're reviewing at any given time.
18 There's been discussions about you know, should we, 19 to move toward something like that. Decisions in 20 that regard haven't been made yet.
21 MS. SCHLUETER: Okay, could we, since we 22 started the questions on the slides specifically, I 23 was kind of holding back, but now that everybody else 24 has opened the flood gate, can we ask some more 25 specific questions on this slide?
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
14 1 MR. RAMSEY: So this is --
2 MR. DOLLEY: Can speakers identify 3 themselves, please?
4 MS. SCHLUETER: I'm sorry, Steve, it's 5 Janet Schlueter. I thought you knew my voice.
6 MR. DOLLEY: Yeah, there's a lot of 7 voices and I know I'm getting a little hard of 8 hearing. Thanks, Janet.
9 MR. JOHNSON: Okay, this is Robert 10 Johnson. We have some room to talk about the specific 11 budget, the budget process or budget questions. But 12 the discussion that we would like to get into is about 13 the fee matrix. So there is a process for the fee 14 rule, the proposed fee rule, and public comments and 15 insights on the fee rule and the process.
16 However, the goal for today is to be able 17 to talk about the fee matrix and how the annual fees 18 are apportioned.
19 MS. SCHLUETER: Sure, and we appreciate 20 that. I think we just like to make sure we're asking 21 informed questions. So event response, is this 22 budget that supports the headquarters operations 23 office? Because we assume that event response, if 24 it's licensee-specific, they're being billed for 25 that.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
15 1 MR. RAMSEY: Yes, that's my understanding 2 that, you know, there's some general things. Like 3 we have to man the operations center and do some 4 generic things like that. So all the business lines 5 contribute to that effort.
6 MS. SCHLUETER: Okay, so that's your 7 generic contribution to the HOO.
8 MR. RAMSEY: Yes.
9 MS. SCHLUETER: Not licensee-specific.
10 Okay, so international activities, this is anything 11 that's obviously in the fee based and not coming out 12 of the IP general fund bin.
13 MR. RAMSEY: I'm not an expert on the 14 international activities, but I've been told that 15 some international activities are billable. I'm not 16 the best one to explain how that breaks down.
17 MS. SCHLUETER: But obviously if it's in, 18 I mean, I'm going to make an assumption here. If 19 it's in this business line budget, then it is 20 international activities that are not being funded 21 out of the general fund. These are being recouped 22 somehow by 170 or 171 fees.
23 MR. RAMSEY: Right, I mean for example, 24 as many of the licensees know, I mean they have import 25 and export and international protocol NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
16 1 responsibilities where we have to, there's certain 2 work we have to do just on that business of shipping 3 of products in and out.
4 MS. SCHLUETER: Sure. So the only other 5 one I think, when we talked about this, and we very 6 much appreciated having the slides be made public 7 last week, that was very helpful. State and tribal 8 programs -- could someone describe what effort is 9 under that bin for this business line?
10 MR. RAMSEY: I'm not sure we have any 11 specific information here. We can try to follow up 12 on that.
13 MS. SCHLUETER: And training is staff 14 training? Training for your staff?
15 MR. RAMSEY: Yes.
16 MS. SCHLUETER: Okay.
17 MR. RAMSEY: Okay?
18 MR. SMITH: This is Brian Smith. Going 19 back to Janet's question about state and tribal. You 20 may recall we used to have a Office of State and 21 Tribal programs. That got moved into NMSS, and 22 that's in the MSTR division right now. And I think 23 each of the business lines contributes a portion of 24 that budget for the generic type of work that they 25 do.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
17 1 MR. SMITH: This is Tyson Smith. Just 2 to make sure I, well, I think it would be helpful to 3 understand, within the licensing and oversight 4 categories, which, how much of that is allocated to 5 direct services that are recovered by fees, versus 6 the annual fee, which should be for generic 7 activities.
8 And I understand you said two-thirds, 9 one-third. But I'm just, you know, there's no way 10 to figure out where that 9.6 comes from based on this 11 column. So some additional detail would be helpful 12 in understanding if we're allocating properly between 13 generic and direct service fees.
14 MR. RAMSEY: Well, we could see if we 15 could provide some better information. But quite 16 honestly, you know, we have a certain number of 17 licensing staff and a certain number of inspection 18 staff. And sometimes they're working on specific 19 actions for a specific licensee, and sometimes 20 they're working on these generic activities.
21 So all we have here, this is the specific 22 budget that was enacted, it was approved by Congress.
23 And then we have the estimate of what we think we're 24 going to collect in direct services. And then as we 25 go through the year and we actually do collect fees.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
18 1 If that's higher and lower than an estimate, then 2 might have to make an adjustment towards the end of 3 the year. But that's, sometimes the breakdown isn't 4 any more detailed than that.
5 All right, I'm going to move on --
6 MS. SCHLUETER: So Kevin, Janet Schlueter 7 again. So just following up, I think we might be 8 able to see where our source of confusion is if we 9 look at Slide 6, the 9.6 that Tyson's referring to on 10 the estimated 170 collections. We tried to figure 11 out whether or not that was actually coming from the 12 data on Slide 10, the direct services billing data, 13 the column that does say Part 170 charges over four 14 years. Because we thought --
15 MR. RAMSEY: Yeah, that's not a, yeah.
16 What we have on the slide that we haven't looked at 17 yet, that's the past four years, actual charges that 18 we've billed.
19 MS. SCHLUETER: Right.
20 MR. RAMSEY: What we did here on FY17, 21 that's just an estimate of what we think we're going 22 to bill during FY17. FY17 isn't complete yet. But 23 we, you know, we try to make a guess of what we're 24 going to collect through direct services and then we 25 base our, the amount that we're collecting through NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
19 1 annual fees, on.
2 MS. SCHLUETER: Right, so if we just look 3 at the 32 --
4 MS. KAPLAN: Can I -- this is Michele 5 Kaplan. I'd like to clarify what Kevin's been saying 6 about how we developed the estimate for Part 170.
7 For the proposed rule, we don't have a lot of actual 8 data for the year yet, so we estimate.
9 But as the year progresses and then we 10 develop the calculations for the final rule, we do 11 have some actual data, so that the estimate is part 12 estimate, part actual.
13 MS. SCHLUETER: That makes perfect sense.
14 So if we looked at that column, and over four years, 15 it doesn't matter what four years it was, it would 16 average about 8.2. So 9.6 and 8.2 is not that far 17 off. So I think we just wanted to make sure that we 18 were looking at that column correctly, that in fact 19 it could be data that would be useful for you to 20 estimate.
21 Is that right? Maybe as we go through, 22 it'll make more sense. But we were seeing a 23 disconnect between the 8.2 and the 9.6. But 9.6 is 24 purely an estimate is what you're saying.
25 MR. RAMSEY: Yeah, I mean like Michele NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
20 1 said, when we start with the proposed fee rule, we're 2 pretty much estimating the whole fiscal year. By the 3 time we get to the final rule, we might have two 4 quarters' worth of actual billing data, and we're 5 only estimating the last two quarters. Hopefully 6 that guess is much more accurate.
7 Slide 8. I apologize for the teeny, tiny 8 numbers, but actually, this was the most legible 9 version I could get. This is the existing matrix for 10 annual fees. Now, I'd like to note, down the lefthand 11 side for licensees, we're listing everyone we've 12 actually issued a license to, whether they built the 13 facility or not.
14 Then you'll notice on the righthand side 15 there are some rows where there's no totals. Those 16 are the facilities that were, we issued a license to 17 them, but they haven't built the facility and 18 completed an operational readiness review inspection 19 yet. And so they're not being billed an annual fee.
20 The license is out there.
21 Now, a frequent question we've gotten 22 when we were coordinating internally was, how does 23 this compare to what all the other business lines do.
24 Now, for the reactor categories, that includes 25 operating reactors, decommissioning reactors, and NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
21 1 research reactors, their annual fee is simply the 2 cost to be recovered divided by the number of 3 licensees. Everybody gets the same bill. At least 4 everybody in a given category.
5 However, for non-reactor licensees, we 6 have typically applied some type of weighting factor.
7 Because if all our licensees did nothing but boil 8 water, we'd be great. But they don't do that, they 9 do all kind of weird things. So we try to recognize 10 that.
11 You know, this is the matrix that we've 12 used for fuel cycles. Uranium recovery has their own 13 matrix of what they call regulatory benefit factors.
14 So they use a matrix somewhat similar to ours.
15 Materials licensees have a formula where 16 they put in application fees, which are also a fixed 17 fee, they just pay an upfront-cost for their 18 application, and inspection costs. And they go 19 through this formula. And that's believed to be 20 indicative of the complexity of the license. So 21 there are a lot more fee categories for materials 22 licensees, but they have a formula they use. Uranium 23 recovery and fuel cycle have a matrix.
24 Can we go to Slide 9. So let's take a 25 closer look at that hard-to-read matrix. NRC's NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
22 1 method is based on the processes authorized in the 2 license. So those are the processes that we have 3 listed. Please note that there are some processes 4 that are classified, can't be discussed. We use the 5 unclassified processes as surrogates in that case.
6 Now, we score both safety and safeguards, 7 that's the S and SG columns. For people who may not 8 be familiar with the terminology, safeguards is 9 basically the security side of the house. The 10 available factors are 10, 5, 1, and 0. And these 11 factors are qualitative judgements by the staff. So 12 does anybody have any questions about the matrix that 13 we currently use?
14 MR. SMITH: This is Tyson Smith. Are 15 there any, what are the concerns with the current 16 matrix, if any?
17 MR. RAMSEY: Well, as we'll see when we 18 get into the data, the numbers are qualitative 19 judgements, and there's a lot of assumptions that go 20 into that. And there's always a question about 21 whether we're making good assumptions or not.
22 So one of the, part of this effort was to 23 see if we could validate, you know, if there's any 24 data that we could use to validate the results, just 25 to see if we're on the mark or not.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
23 1 There's been a belief, and some people 2 ask why there's such a spread in the fees from one 3 licensee to another, and questions raised about 4 whether our fees are fair and equitable, and all that 5 general concern. That's what prompted us to go back 6 and take a look at this. Okay.
7 MR. SMITH: I have a really similar 8 question, this is Tyson Smith again. Is the numbers 9 or the values in the matrix, do they change much year 10 to year?
11 MR. RAMSEY: No, actually, you know, when 12 we pass around and say, well, this is, you know, we 13 ask people who work at the various facilities, both 14 the licensing and inspection, you know, here's how 15 they scored last year, do you think we should change 16 anything. Quite often, there aren't very many 17 changes.
18 I mean, one of the ones that recently was 19 Global had a license for low enriched fuel fab. And 20 we did issue a license for Global Laser Enrichment, 21 for an enrichment facility, but they weren't up and 22 running yet. They had wanted to do a demonstration.
23 So they did the demonstration under Global Nuclear 24 Fuel's license.
25 So they were doing low enriched fuel NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
24 1 fabrication and some enrichment demonstrations. That 2 kind of got them into multiple categories. So their 3 numbers were pushed up a little bit because they were 4 kind of doing two things at the site.
5 MR. SMITH: So is it fair to say that in 6 absence of changes in processes or new or different 7 types of activities, it's been pretty stable?
8 MR. RAMSEY: Yeah, in terms of the 9 scores. Yeah, they don't change a lot from one year 10 to the next.
11 MR. SMITH: Thank you.
12 MR. RAMSEY: All right, let's go to Slide 13 10. So this is the billing data. Now, this is --
14 let me make a general comment. We looked at two sets 15 of data to see if we could validate the annual fees 16 calculated in the matrix. Now, we acknowledged that 17 the billing data is for direct services billed under 18 170. These are not the annual fees billed under 171, 19 so apples and oranges, we recognize that.
20 However, we took a look at this data 21 because the data we have for non-billable codes, it's 22 hard to break down into fee categories, because there 23 are no docket numbers there. We do have docket 24 numbers here and we could break it down. So we said, 25 well, let's take a look and see what it looks like.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
25 1 So that's what we did. And we used 2 certified billing data over 16 quarters. So these 3 are bills that were actually issued. What we see is 4 that direct services to high enrich fuel fab and 5 enrichment direct services were similar to both, 6 around 20% percentage. And that the direct services 7 to low enriched fuel fab and conversion facilities 8 were similar.
9 So the question that we have is do you 10 think this is a valid comparison? Do you believe 11 there's any relationship between direct services and 12 indirect services that we can gain any insights here, 13 or these are completely unrelated?
14 MS. LANE: Hilary Lane, NEI, just a 15 clarifying question. Over four years, what four 16 years is that? The past, the last four years, or?
17 MR. RAMSEY: Yeah, roughly. You know, I 18 took 16 quarters, so it may not actually fit into 19 fiscal years, you know, it's --- I asked the CFO 20 staff, give me the last 16 quarters of certified data.
21 And so they bring a big, long report and we tallied 22 it up.
23 MR. PADGETT: Kevin -- Wyatt Padgett, 24 URENCO -- I didn't quite catch that -- is that for, 25 which year was that exactly?
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
26 1 MR. RAMSEY: I think it probably strays 2 over a little bit into maybe the first quarter of 3 FY17. I don't remember exactly when I asked them to 4 run the report, but we said we only wanted certified 5 billing data. So it was only for the quarters that 6 the bill's actually been issued. So it may include 7 like first quarter FY17, probably all '16, all fiscal 8 year '15, and maybe a piece of '14.
9 MR. PADGETT: The question I would have 10 is there any trend, you know, when it comes to 11 licensees, you know, I would say specifically for 12 ours, but the value decreasing. I'd have to look, 13 but it seems like it would be. Due to our activities 14 onsite.
15 MR. RAMSEY: Well, I mean, one reasons 16 we took four, you know, 16 quarters or four years, 17 was to smooth out some of the bumps. Because as 18 people probably know, some facilities have had 19 process upsets and issues where we went and spent a 20 lot of time, you know, with reactive inspections and 21 things, and we didn't want those unusual quarters to 22 skew the data too much. That's why we took 16 23 quarters to try to smooth that out.
24 MR. SMITH: This is Tyson Smith. It 25 strikes me that, and this is interesting and, you NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
27 1 know, provides some insights, but without digging in, 2 I'm not sure, without digging into particularly where 3 licensees are in their licensing cycle, for instance, 4 if you have to do renewal or if you're, you know, 5 some other specific activity's going on, that could, 6 you know, certainly shift the costs in one direction 7 or the other.
8 It wouldn't be reflective of the 9 Agency's, I guess, generic activities in the 10 oversight and licensing categories that we were 11 talking about earlier.
12 MR. RAMSEY: Okay.
13 MR. PADGETT: I understand that. Thank 14 you very much, you know, but the difference here is 15 you know, for enrichment there -- and for conversion 16 both, there's really no equivalent facilities to 17 balance that against to get that data reflective of 18 the actual amount of effort at that time. It might 19 be appropriate to pull it here, and then depending 20 upon those activities, you know, it could be -- for 21 us, I would specifically say, because of reduced 22 construction. So those are just things to consider.
23 MR. RAMSEY: Yeah, and we recognize that.
24 In fact, we got questions, because if we got -- if 25 you're a brand new licensee and you're going through NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
28 1 a lot of start-up activities, there's a lot of 2 activity there. If you're a well-established 3 licensee and you're operating well, probably your 4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br /> are a little less.
5 That's probably the reason we took a 6 four-year span. People have asked, well, what about, 7 you know, could you do five years, could you do six 8 years. Yeah, we could, out of whatever we have data 9 for, we can take whatever average you feel is best.
10 So anybody, you know, if you think that a different 11 span of time would be better, you know, let us know 12 and we'll pass those comments along.
13 MR. SMITH: This is Tyson Smith. It 14 strikes me that there's at least one easier breakdown.
15 Are they licensing fees or are they inspection-16 related fees? Do you all track those, is there a 17 separate code, or do you trace those differently?
18 MR. RAMSEY: Well, we yeah, we could, I 19 think we could break it down into whether it was 20 licensing or inspection. But would that make a 21 difference?
22 MR. SMITH: Well, I wouldn't know 23 without, I guess, without seeing the data, I guess.
24 But you know, it strikes me that there might some 25 differences. Or it might eliminate there. You know, NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
29 1 certain types of facilities require higher inspection 2 levels. And I think this is compounded by the fact 3 that we don't have a good breakdown in the licensing 4 and oversight category you provided early.
5 So I still know it's, you know, that 9.6 6 is two-thirds of that licensing and one-third 7 inspection, or is it vice-versa? So it's just 8 there's a level of granularity that I think doesn't 9 permit us to, you know, evaluate whether this is a 10 reasonable approximation going forward.
11 MR. RAMSEY: I mean, one of the concerns 12 that we got into internally was sharing sensitive 13 information. I mean, if we actually, we suspect that 14 some licensees might not be happy if we actually 15 shared their billing statements with the whole world, 16 or we don't want to be quite that open. That's why 17 we took, you know, a four-year total might be 18 reasonable. So there's some sensitivity to what you 19 all are willing to share.
20 Okay, so anyways, that's the billing 21 data. Let's go to Slide 11. Second set of data is 22 like I said, if the billing data is for direct 23 services, annual fees or for any other services, not 24 direct. Now, maintaining procedures and guidance is 25 a large part of the other services. So what we did NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
30 1 was, we said, well, let's make a list of all the 2 licensing and inspection documents we maintain.
3 That was basically going through a lot of 4 standard review plans and inspection procedures and 5 just tallying up all the references. And we, having 6 provided that background for that list that's in the 7 handouts, so if you want to go review that and tell 8 us if we missed something, or if we mischaracterized 9 something, please, you know, let us know if you see 10 any errors there.
11 Now, many documents are applicable to 12 more than one fee category. And part of what we did 13 was we said, well, we have all the documents, let's 14 look at what's been revised recently, because there 15 might be some old documents that just haven't been 16 revised for decades and we're just not spending a lot 17 of time on.
18 So if we go to Slide 12, this is what we 19 ended up with. Approximately 250 documents totaled.
20 And when we got into which fee categories that they 21 were applicable to, those were the numbers we came up 22 with. So not a huge spread from one fee category to 23 another. And we didn't see a significant difference 24 between old documents versus ones we revised 25 recently.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
31 1 So again, do you think that's valid to 2 compare that to the fee matrix? Is that, think we 3 should be using that for insight?
4 MR. SMITH: This is Tyson Smith. No, I 5 don't. I haven't seen the list of all the documents, 6 but, you know, based on my experience, there a number 7 of documents that, you know, apply in their entirety 8 to class of facility, but only a little piece applies 9 to another facility.
10 And so I'm not sure just looking 11 at the documents without being able to infer how much 12 of that document relates to a particular class of 13 facilities. I don't think that's really a fair and 14 reasonable approach.
15 MS. SCHLUETER: Janet Schlueter, NEI.
16 So I'm still missing something on the 250 versus the 17 308. This sentence, Approximately 250 documents were 18 identified versus the documents revised, 308 and the 19 812. What is the 250 again?
20 MR. RAMSEY: Well, when it does, what I 21 added up the there was, so if a document was 22 applicable to all four fee categories, I counted it 23 four times. That's why that number's so much bigger.
24 MS. SCHLUETER: Okay, that was a question 25 we had.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
32 1 MR. RAMSEY: The second table is smaller 2 because those are only the documents that have been 3 revised recently. So we started off with a smaller 4 data set. And then we went through again and just 5 counted the number of hits on applicability.
6 MS. SCHLUETER: Okay, so there is some 7 double counting, if you will.
8 MR. RAMSEY: Yeah, and like I said, if 9 you want to review the table and say, well, you 10 counted this as applicable to my fee category, and I 11 don't believe it's applicable. You shouldn't have 12 counted it, you know. We'd be more than happy for 13 you to help us scrub that list.
14 MS. SCHLUETER: Okay, I guess that is one 15 question we had. Because I think, relative to 16 Tyson's point, when I started flipping through the 17 list, which actually there's one on the other side of 18 the room. You know, when you get to like the reg 19 guide series 8, all the rad protection stuff that 20 Kevin, I know you know quite well, it's not unique to 21 fuel facilities at all.
22 And so I have to believe that the touch 23 that the fuel cycle division would make on that 24 document on any revision would be pretty light, 25 considering that there's many divisions that have NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
33 1 responsibility for that document across the Agency.
2 You know, Research or NRR, depending on who it is had 3 the lead.
4 So it's hard to tell, when you just look 5 at a huge inventory like this, sort of the waiting 6 factor, if you will, for one group of documents or a 7 single document versus another. Huge inventory, but 8 they aren't all equal in their contribution to this 9 budget.
10 MR. RAMSEY: Yeah, I mean recognize that, 11 yeah, we may not be the owners of every single 12 document. There may be, you know, another office, 13 another division that owns a document and we're just 14 providing input to their changes.
15 MS. SCHLUETER: Yes, I think we were just 16 trying to figure out how does that effort all 17 translate to billable hours.
18 MR. ERLANGER: This is Craig. One 19 comment that I'd like to make is that it's not just 20 the division that you may interact with on a day-to-21 day basis. It's the fuel facilities business line 22 which has a, you know, I think it was 112 or 116 FTE.
23 So it's much broader than, or it is broader than NMSS.
24 It involves other divisions and organizations 25 throughout the Agency.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
34 1 MS. SCHLUETER: Right. Yeah, I guess 2 one thing we kind of, just I'm going to throw this 3 out here, I don't expect you to answer it.
4 But in looking at this large inventory 5 too, I think one thing that we want to sort of go 6 back and maybe look at the list and scrub it a little 7 bit from our own perspective to just sort of identify 8 which one of these documents are guidance documents 9 that this community typically references and uses as 10 part of their license programs, licensing actions, 11 renewals, amendments, and what have you.
12 And that might help us be able to hone 13 down on those documents that are most important to 14 this business line.
15 MR. RAMSEY: Yeah, and the one thing I 16 didn't do, I didn't try to list all our websites.
17 But if you think that maybe looking at stuff like 18 this is useful and it's like, yeah, we also think you 19 ought to make a list of all the websites you're 20 maintaining. Because technical staff spent a lot of 21 time trying to keep those websites up to date also.
22 Do you think that's a useful exercise?
23 Let us know. That's something else we could look at.
24 Okay.
25 Slide 13. Okay, so possible approaches.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
35 1 We could continue using a fee matrix. Maybe consider 2 changing some of the factors that we've assigned. Do 3 you think that's best bet? Do you have any ideas on 4 changing the scores? We would be interested in that 5 input.
6 Another alternative would be to do what 7 the reactors do, just take the total, divide by number 8 licensees, everybody gets the same bill.
9 A third option would be doing something 10 similar to the formula that was used for the materials 11 licensees, which is kind of a combination of uniform 12 proportional methods. And for the proportional side 13 of things, it would be using the percentages that 14 came out of that direct services evaluation.
15 So I'm going to ask you to hold your 16 questions. Let me go through this next slide, kind 17 of get it all out there, and then we'll see what 18 comments people have. So let's go to Slide 14.
19 So of course you know what the current 20 fee matrix is. That's over on the righthand side 21 there, at least for that fiscal year.
22 If we were going to do the uniform 23 approach, at least for FY17, that's that third column.
24 So basically everybody's got a bill for 3.9 million.
25 Now, if we were going to do this combination, we got NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
36 1 a 15% and 85% split. So one of the obvious questions 2 is, well, where did that come from.
3 When we were debating internally whether 4 there's any relationship between direct services and 5 indirect services, the conclusion that we came to 6 was, at least the conclusion that staff came, was 7 that we believe there is a relationship for 8 significant issues.
9 When there is a significant issue, some 10 kind of a process upset or something like that, we 11 believe that there'll be increased direct services 12 through the reactive inspections, possibly unplanned 13 licensing actions to implement corrective actions.
14 And there would also be increased 15 indirect service, because you'd have more involvement 16 of senior management, more work for public affairs, 17 more work for congressional affairs, that type of 18 thing. So we did see a relationship for significant 19 issues. The question became well, what's a 20 reasonable estimate of our effort on significant 21 issues.
22 We settled on 15%. So that's where we 23 said 15% of our efforts, especially with significant 24 issues, we'll put that proportional thing in there.
25 But for the rest of it, it's uniform, and the rest of NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
37 1 it just gets distributed uniformly. So that's where 2 those numbers came from.
3 Okay, so what do you think, good, bad?
4 MR. PADGETT: This is Wyatt Padgett from 5 URENCO. So the proportional amount that you have in 6 that column, is that based on the existing matrix, or 7 was that the proposed?
8 MR. RAMSEY: You know, the proportional 9 amount is based on that table for the direct services.
10 If you look back at the breakdown of direct services 11 over a four-year period, that's where those numbers 12 came from.
13 So this, these two approaches, the 14 uniform approach and the combination approach, we'll 15 be getting away from the matrix entirely and just 16 using these grand totals.
17 MR. PADGETT: Are you asking for comments 18 now?
19 MR. RAMSEY: Yeah, if you want to give 20 now, or, you know, email them to me later, or whatever 21 you want to talk about. Nobody wants to share?
22 MR. SPANGLER: Dave Spangler with B+W.
23 MR. RAMSEY: Okay.
24 PARTICIPANT: My understanding that 25 proportional amount column or the combination NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
38 1 approach now would be better. When we read it the 2 past week, I wasn't sure what the purpose of that 3 was, but I don't want to put words in your mouth.
4 But that would be like, my facility was 5 having a more significant issue at the time, more 6 weight was coming into that as a result of my facility 7 or another's, or does that still get distributed in 8 some fashion? How is the proportion side of it, the 9 side about a proportional percentage to the left of 10 that column, column number four? So they're still 11 taking a total, taking 15% of the total, and in 12 proportion by the 15, by the --
13 MR. RAMSEY: Yeah, when you see the, 14 across the top there where it says, Proportional 15 amount of four million and change, and then 16 parenthesis, that that's 15% of the total, of the 27 17 million. So we're starting with the four million 18 number and we're multiplying by the percentage in 19 that percentage column, and that's where the values 20 come from.
21 MR. SPANGLER: Got it. And then there's 22 the remainder trying to balance, that there's, again, 23 I'm trying to get to make sure I'm understanding the 24 FAQ, so under uniform with a proportional amount that 25 we could discuss whether 15 is the right number. But NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
39 1 here's proportionally the level of effort and 2 significance in that, in uniformly here's the, we 3 work the same for each licensee no matter what you 4 are.
5 These contributions that are the Part 21 6 or whatever it's, I don't know, Part 51, whatever 7 those kind of things that, in 250 documents are very 8 similar. That's uniform among them.
9 So your thought there was not a straight 10 fee matrix, but that I think has been outdated and 11 not as nimble and flexible as the logic we were going 12 on. And maybe just straight uniform doesn't seem to 13 take in risk, and a combination approach is attempting 14 to take in some sort of proportional risk based upon 15 a four-year history. Is that kind of what this 16 comparison chart is?
17 MR. RAMSEY: Yeah, I mean we were getting 18 back to it's a relationship between the direct 19 services and the indirect services. Because, I mean 20 one of the arguments that was made internally was 21 well, if you received more direct services, you've 22 benefitted more from the procedures and guidance 23 associated with those direct services.
24 We got a whole enforcement manual, if you 25 don't have any enforcement actions, you're not really NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
40 1 benefitting from that enforcement manual. So, you 2 know, that's part of the argument. And the other 3 part of the argument is now there's no relationship 4 there, you shouldn't be paying any attention to any 5 of that.
6 But like I said, the staff felt that we 7 could argue for a relationship when we get into 8 significant issues, because we feel like there's 9 extra effort being expended both on the direct side 10 and the indirect side. For routine activities where 11 there's no unusual events, it's harder to make that 12 argument.
13 PARTICIPANT: Right. So you already 14 have that built in somewhat if you look at the formal 15 chart on total fraudulent spending charges over four 16 years. Those areas of higher risk, some have been 17 applied, resident, I know the resident charges, it's 18 my understanding at the latter end of the four-year 19 chart.
20 Lower risks are adding routine 21 inspections, unless there is an incident that would 22 require more attention. So those things, or 23 licensing actions or amendments or et cetera are 24 effective as well as reflective in this level of 25 effort, if you will, outside of routine.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
41 1 MR. RAMSEY: Yes, and so that's, you 2 know, the question that we're posing to you all is 3 does this sound like a good idea, or should we just 4 leave well enough alone. Should we do something 5 different? Is there an approach we haven't even 6 thought of here?
7 PARTICIPANT: Well, I would say from GL's 8 standpoint that they've never been in support of a 9 fee matrix, and don't think that that has really any 10 good basis, it's not very flexible, it's not 11 transparent. It's so out of date it's charging us 12 right now for things we haven't done in six years or 13 decades. So that to me shouldn't even be a 14 consideration going forward. Though I do applaud the 15 NRC for taking a look at.
16 The other would be one of the reasons I 17 think they are looking at it is the disproportion 18 between the Cat 1 being twice a nuclear power plant.
19 But if you look at the scale, how could you positively 20 set forth to say, you're three orders of magnitude 21 less, and the NRC considers you twice as risky as a 22 nuclear power plant. That clearly should not be a 23 continued practice.
24 If you thought that, then you could take 25 a sketch, run fuel fabs out of this and move them NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
42 1 into a nuclear power plant, if they're as risky as a 2 nuclear power plant. So that's kind of just what I 3 was thinking, but it still takes a large amount, 4 something like twice as much as a nuclear power plant 5 for the last couple of years. Or a factor of 1000 6 less of risk. So I do applaud you all looking into 7 it, I hope you make it more sense.
8 Within the fuel fab that I haven't, 9 there's nothing so radical as that. But a third 10 approach that you all have not considered, that I 11 would add now is that you could remove the Cat 1, 12 because they are covered by government. And that 13 would prevent the government from charging the 14 government, and you could put those, by rulemaking, 15 into the correction column.
16 I'm going to just to pick a number, say 17 90%, do 80% and include the Cat 1, or call them just 18 covered by the government if you include it in that 19 overhead amount, not recovered.
20 That's just one other way to look at this 21 and skin the cat and not burden the type of -- that 22 will not try to burden it through a Cat 1. So this 23 is a step in the right direction, but maybe not all 24 the way, because you failed to push a large amount 25 over to the non-Cat 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
43 1 MR. RAMSEY: Okay.
2 PARTICIPANT: Thank you.
3 MR. RAMSEY: Anybody else?
4 MR. SMITH: This is Tyson Smith. I do 5 not support this change. I think the old method 6 worked just fine. It seems to be relatively stable, 7 it hasn't changed much. I'm not seeing a driver for 8 a change here. While I appreciate the effort to try 9 and simplify the way fees are charged, I don't think 10 that should come at the expense of no longer 11 reasonably reflecting the cost of regulatory services 12 that are provided.
13 You know, frankly I just don't see how 14 you can lump a conversion facility that only handles 15 natural uranium into the same category as, you know, 16 a high enriched uranium fuel fabrication facility. I 17 think those are just too different of a type of 18 facilities to treat them all the same. And I think 19 if you, as a result, I don't think that this approach 20 would pass muster under OBRA.
21 MR. RAMSEY: Well, that was Tyson Smith 22 who just spoke there. This is Kevin Ramsey again.
23 I would like to point out that we're not really trying 24 to bill on risk, we're trying to bill for the services 25 we provide. So keep that in mind. But in fairness, NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
44 1 if you think about it, after the 9-11 attacks, we put 2 out a lot of security orders.
3 Now, when terrorist attacks happened, the 4 only people who were required to have any physical 5 protections, plans, or you know, guns and guards, 6 were the people who had enriched uranium. But 7 afterwards, we started imposing those physical 8 protection requirements on natural uranium and by-9 product material.
10 And so in many cases, trying to get people 11 who'd never done it before up to speed required more 12 effort than working with people who'd been doing it 13 for years. On top of that, we have the natural 14 phenomenon concerns that came up after the earthquake 15 in Japan. And as you all know, that involved a lot 16 of work across the whole business line.
17 So in recent years, a lot of our effort 18 has been to a large extent much more uniform across 19 the business line. Because things that we were only 20 doing for enriched uranium we're pretty much doing 21 for everybody now, at least on the security side.
22 And I know there's variations. But there's a lot of 23 different factors that go into what we're spending 24 our time on.
25 MR. SMITH: I think it's, and I NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
45 1 appreciate that, and I accounted for all of those 2 different factors. You know, if you look at your 3 current matrix, the level of effort that the NRC has 4 been relying on for 15 plus years has the level of 5 effort at, for a conversion facility, at one-quarter 6 of that of a fuel fabrication facility, HEU fuel fab 7 facility. It's about half that of the enrichment 8 facilities.
9 And yet in, you know, proposing to, in 10 one fell swoop, more than, you know, double the annual 11 fee paid by that facility, without any demonstration 12 that what is currently being used is unreasonable.
13 And so that's the part that I'm not, I don't 14 understand.
15 And when you look at, and I know when 16 you delve into the guidance, what you will find is 17 that you know, a lot of the guidance touches on things 18 that do not apply at Metropolis, they're a conversion 19 facility, like criticality and things like that.
20 ISAs they're not required for Metropolis, whether 21 they volunteer for that or not.
22 So that's my concern, I just don't think 23 that looking at documents is an insufficient way to 24 measure the level of regulatory effort that's being 25 provided. It's too high level and isn't granular NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
46 1 enough, given the disparity and the types of 2 facilities that are being regulated.
3 I mean if we're, in the comment from the 4 last person who spoke about removing certain types of 5 facilities from this, you know, if you want to do 6 that, it seems like a conversion facility, which is 7 a Part 40 facility, perhaps then should be more 8 associated with uranium recovery facilities and other 9 Part 40 facilities, rather than Part 70 facilities.
10 So just that difference between the -- it 11 is a level of risk, but it's also about the types of 12 material that are there and the level of risk at the 13 facility is reflected within the guidance documents.
14 I just think that it cannot be treated uniformly.
15 That's too broad of a brush to paint with for 16 something as significant as a 2.5% increase in fees.
17 MR. RAMSEY: Okay. Any other 18 commenters?
19 MR. SHACKELFORD: Yeah, let me make a 20 comment. This is Randy Shackelford from Nuclear Fuel 21 Services. With regard to the matrix, of course NFS 22 is a Cat 1 facility. We're not in favor of that, 23 using that matrix. Primarily because if we're 24 looking at providing equity for billing for services 25 provided, I don't think the matrix really does that.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
47 1 You know, yeah, granted we used the 2 matrix 3 for a long time, but I don't think it's fair and 4 equitable.
5 MR. RAMSEY: Okay. Was there somebody 6 else on the bridge who wanted to speak? Okay, so 7 going on to Slide 15. This is just summarizing a lot 8 of the things we've already discussed. So when it 9 comes to the data, if you want, we'd be very 10 interested in feedback on, should we, or additional 11 feedback that we don't have already.
12 Should we be comparing the billing data 13 for direct services to the fee matrix? And should 14 we be comparing the document data to the fee matrix?
15 And anything else that we should be, any other data 16 you think we should be looking at? We're very 17 interested in feedback on those items.
18 On Slide 16, of course with regard to the 19 approaches, should we keep using a fee matrix?
20 Should we change to the uniform approach or the 21 combination approach, or something else, if somebody 22 has a better idea? Feedback on anything along those 23 lines would be useful.
24 Let's go to last slide. And like I said, 25 I just want to re-emphasize, no decisions have been NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
48 1 made. What we have been asked to do is provide a 2 status report to our senior management in the February 3 time frame. And we're going to do that, based on 4 what we've heard at this meeting and any other input 5 you want to provide us. If you can get that to us 6 by January 17, we can provide that with the status 7 report.
8 The reason we're asking for January 17 is 9 not to send you home for the holidays with homework, 10 but that'll give us an opportunity to review your 11 feedback, and if we have any questions about 12 clarifying what you said and verifying that we 13 understand what you mean, we could do that during the 14 week of the 22nd, and get that all folded into our 15 status report.
16 That's just a status report. Like I 17 said, we're not proposing any changes to the fee 18 matrix in the FY18 fee rule. The FY19 fee rules, CFO 19 won't be asking us for input until June. So we have 20 between now and June to keep kicking this around. If 21 you have a brilliant thought after you leave here, 22 please share it with us. But that's the schedule 23 that we're working to right now. Any questions?
24 MR. SHACKELFORD: Just some final 25 comments from NFS. You know, first, we really NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
49 1 appreciate your interest in working with the industry 2 on this topic. It's an important topic for not only 3 NFS but the entire industry.
4 Second, we recognize that progress has 5 been made on the fee reduction and building 6 improvements, and we hope that continues. NFS, along 7 with the industry, the rest of the industry, we're 8 interested in understanding the basis for the fees to 9 the extent that we can. You know, the details behind 10 the fees, the number of FTEs, the total fee budget.
11 We also want the fees to be fair and 12 equitable relative to the risk of protecting the 13 public and the environment. Also relative to the 14 services that the NRC is providing to the facilities.
15 Transparency is very important because of interest 16 from our customer and our ability to communicate the 17 basis of the fees with the customer.
18 For NFS, the fees are a significant 19 portion of our operating costs. And as you've seen 20 in the slides, you heard from Dave Spangler, with 21 regard to the Cat 1's, it's a substantial contribution 22 to the annual fees from the two Category 1 facilities.
23 And then finally, NFS will be planning to 24 provide comments in writing.
25 MR. RAMSEY: Okay, thank you.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
50 1 MR. ZIMMERMAN: This is Jake Zimmerman 2 from NRC. Janet, I'm going to turn to NEI and maybe 3 put you on the spot a little bit, but I'd be 4 interested, you know, we really want to know if you 5 think there's a better way. And can't help but think, 6 you know, NEI, you charge a fee for your members.
7 And I'm just curious, do you have some 8 sort of a matrix, do you charge all of your members 9 the same exact fee? You may not be able to tell me, 10 but is there some way that you've determined, perhaps, 11 that either today you could share, or through your 12 formal feedback, that may help us to come up with a 13 better way?
14 This is what we've come up with, but we 15 certainly are interested in your feedback and views 16 on how we could do it better or differently. Or is 17 the same okay?
18 MS. SCHLUETER: Right, yeah, I don't 19 think I'm at liberty to discuss NEI members' fee 20 membership matrix, although I will say it's not a 21 uniform approach, okay. But I think as an industry, 22 we thought about this a little bit, the slides were 23 very helpful. We've gotten a lot of good questions 24 out on the table today and information back.
25 I think we do need to go back and see if NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
51 1 there's some other alternative that maybe we can come 2 up with. I'm not sure we can, but I think it is 3 incumbent upon us to try to do that. Take in what 4 we've heard, obviously there's a diversity of 5 opinion, because it doesn't matter how you slice and 6 dice this. I mean, any way you do it, unless you do 7 the uniform approach, there's going to be winners and 8 losers.
9 It's just a matter of the numerator, as 10 I think Randy was getting at. You know, how big is 11 the pie that you're trying to cut up? We want the 12 pie smaller, I know we're not here to talk about the 13 size of the pie, but that is fundamentally where we're 14 at.
15 So we'll put our thinking caps on and see 16 if we can come up with some alternative that hasn't 17 dawned on us yet based on what we reviewed in the 18 slides. But maybe the conversation today will lead 19 us somewhere. And we will get your comments on or 20 before that date.
21 MR. RAMSEY: Okay, and this is Kevin 22 Ramsey. Let me point out one thing that we didn't 23 mention, just so you have that to the back of your 24 head. If we implement a change, especially something 25 as drastic as what we've thrown up there, we recognize NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
52 1 the financial burden as their annual fee shoots way 2 up. So we are completely open to phasing in any 3 changes.
4 If you want to provide any thoughts 5 about, well, if there is an increase, I want it phased 6 in over whatever period of time you think is 7 reasonable for your operating budgets. I mean, we're 8 not, we don't want to drive anybody into bankruptcy, 9 but we want to, we're hoping to improve the process.
10 MR. ERLANGER: This is Craig. I'd just 11 like to mention, as Kevin articulated early on, 12 today's focus was on the Fuel Facilities Fee Matrix.
13 The Agency, though, is looking at fees 14 across the board, and there are many initiatives on 15 their way, they've been going on for some time, 16 ranging from our fee transparency project to what the 17 actions we took under Project Aim. And we are looking 18 at all these items.
19 What we want to do today though is really 20 hone in on the matrix itself. As Kevin mentioned, 21 at the end of the day, there will be an aspect where 22 we need to apportion, no matter what that number is.
23 So I appreciate, I didn't want to -- I wanted to let 24 you know that as an agency, we are looking at the 25 broader issues associated with fees. Thanks.
NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433
53 1 MR. RAMSEY: Okay. Any final comments 2 from anybody on the bridge? Hearing, none, we are 3 adjourned. Thank you.
4 (Whereupon, the above-entitled matter 5 went off the record at 3:12 p.m.)
6 7
8 9
10 11 12 13 14 15 16 17 18 19 20 21 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.
(202) 234-4433 WASHINGTON, D.C. 20005-3701 (202) 234-4433