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Email Exchange of April 27 and 30 with M Keller, Hybrid Power on May 3 2018 Meeting and Assessment of Advanced Reactor Regulatory Process Issues
	ML18122A250
Person / Time
Issue date:	04/30/2018
From:	William Reckley; NRC/NRO/DSRA/ARPB
To:	Keller M; Hybrid Power Technologies LLC
	Reckley W
References
	Download: ML18122A250 (19)
	v • d • e

From:

m.keller@hybridpwr.com To:

Reckley, William Cc:

caleb.ward@usnic.org; pschroeder@ans.org

Subject:

[External_Sender] Upcoming NRC May 3 Meeting - Advanced Reactor Regulatory Improvements Date:

Thursday, April 26, 2018 2:41:01 PM Attachments:

Advanced Reactor Fatal Flaws r0.pdf Dear Mr. Reckley As a small business developing an advanced reactor we wish to express dismay regarding the NRCs announcement process. We received notification of a May 3 meeting via your April 26 e-mail and as near as we can tell, that was the 1st official notification of a specific date for the upcoming meeting.

That is simply too short of a time frame for cost effective attendance at the meeting for a firm based in Kansas.

That brings us to a more serious concern. In our opinion, the NRC strategy appears to be pre-ordained in the sense that public participation is not really welcome, not-with-standing the NRC claims of openness and transparency. Never-the-less, we are formally requesting that the attached assessment of the Advance Reactor regulatory process be placed in the public record for the meeting. We would have preferred to make this presentation ourselves at the meeting, but the exceptionally short-fuse on the meeting precludes travel on our part.

Please kindly acknowledge receipt of this e-mail as well as the action to be taken on our request.

Regards, Michael F. Keller, PE (Kansas #14158))

President Hybrid Power Technologies LLC m.keller@hybridpwr.com 913-375-6983 (cell) 913-681-7687 (land-line)

1 PROBLEMS Hybrid-nuclear Concept Basis

?

Historical Perspective The profitability of any particular enterprise is affected by a myriad of considerations. However, fundamentally, the likely reward must be sufficient enough to overcome the perceived downside risks associated with potential failure. In the case of nuclear rectors, the potential downside financial risks can be substantial which means the potential rewards also need to be reasonably substantial. Also, intrinsic in any profitability assessment involving potentially risky investments is avoiding or minimizing unwarranted financial burdens.

2 PROBLEMS: Advanced Reactors

Financing FATAL FLAWS

Regulations Hybrid-nuclear Concept Basis

3 WARD-of-STATE Advanced-Reactors X Return on Investment too Long & Uncertain for Financial Community PROBLEMS: Advanced Reactors

/Development Costs Hybrid-nuclear Concept Basis

- Regulatory Complexity Exacerbates Problem

4 INVESTOR TAX WRITE-OFFS Rapidly Winnows Out Good from Bad4 GRANTS: AKA Public/Private Cost Share1 X Ponderous & Inefficient X Slows Commercialization Issues2 X Discriminates - Small US Businesses3 2ndTAX WRITE-OFFS5 X Not Available InnovationTakes Root BEST BETTER X Bureaucracy Picks Winners2 CURRENT 1st GOVERNMENT SEED MONEY Innovation Grows 3rd COMMERCIALIZATION Compete in Marketplace6 X Favors Government & University Research Protects:

Consumer & Taxpayer PROBLEMS: Advanced Reactors

/Development Costs - Funding Models Needs Legislation FUTURE Failure This Exit Success Next Exit Notes: (1) See Chapter End-notes, item A. (2)

See Chapter End-notes, item B. (3) See Chapter End-notes, item C. (4) See Chapter End-notes, item D. (5) See Chapter End-notes, item E. (6)

See Chapter End-notes, item F.

Hybrid-nuclear Concept Basis

5 PROBLEMS: Advanced Reactors

/Regulations Regulatory Safety Functions Drives Requirements MASSIVE OVER-REGULATION Why??

Hybrid-nuclear Concept Basis Nuclear

6 CONFUSING X Unintended Consequences

Overreach

Excessive Costs PROBLEMS: Advanced Reactors

/Over-Regulation: Safety Functions SOLUTION ?

Important-to-Safety1 (Poorly Defined/Unbounded)

Safety-Related (Well Defined &

Bounded)*

Fires

?

Security

?

Nuclear

?

Safety-Related: (10CFR 50.2)

Those structures, systems and components that are relied upon to remain functional during and following design basis events to insure:

1) The integrity of the reactor coolant boundary;

2) The capability to shutdown the reactor and maintain it in a safe shutdown condition;

3) The capability to prevent or mitigate the consequences of accidents which could result in potential offsite exposures comparable applicable guidelines set forth in 50.34 or 100.11 Oops!

Personnel

?

Note: (1) Important-to-Safety not defined in Code of Federal Regulations. Applicability thus becomes more-or-less whatever lower-tier regulations believe directly or indirectly impacts safety. Recipe for financial disaster.

Hybrid-nuclear Concept Basis

7 NEEDLESSLY BURDENSOME

& EXPENSIVE MYOPIC SAFETY FUNCTIONS X Unhelpful Paperwork X Inefficient Resource Use X Design X Construction X Operations PROBLEMS: Advanced Reactors

/Over-Regulation: Undue Quality Assurance SOLUTION ?

Focus Keep it Simple Hybrid-nuclear Concept Basis

8 PREDICTABLE Cost & Schedule Logical Accountability MAJOR SAVINGS MEETS LAW6 Primary Nuclear Safety Functions SAFETY-RELATED (Protect Public from Undue Radiation)

Plant Safety Functions Supplemental Safety (Protect Reactor Asset)

Secondary Nuclear Safety Functions Important-to-Safety-Related (Protect SAFETY-RELATED Functions)

PLANT SAFETY4 NUCLEAR SAFETY NRC Approve NRC Accept No NRC Objection WHY ACCEPTABLE?

PASSIVELY FAIL-SAFE Universal Plant Safety Functions General Safety (Protect Personnel & Equipment)

TOP QUALITY PROGRAM1 Augmented Industry Quality System3 PROBLEMS: Advanced Reactors

/Over-Regulation: Solution - Clarity Keep it Simple Legacy NRC Approach Obsolete Notes: (1) Design, fabrication, construction, operation of systems structures & components (SSC) that protect public from regulatory (Code of Federal Regulations) unacceptable radiation.

Subject to Quality Assurance Criteria of 10CFR50 Appendix B - very expensive. (2) Selectively upgraded measures, significantly less expensive than Appendix B program. (3) e.g. ISO 9000 quality system. (4) Includes general personnel safety, fire protection, security, etc.

(5) See Appendix B for SSC summary. (6) 10CFR50.

Hybrid-nuclear Concept Basis

Plant Safety Functions Supplemental Safety (SS)3 (Protect Reactor Asset - avoid fuel overheating) 9 Accuracy Passive Systems Active Systems Cost Effective Primary Nuclear Safety Functions SAFETY-RELATED (SR)1 Protect Public from Undue Radiation Pressure Boundary Reactor Shutdown &

Decay Heat Removal Electrical Power

& Control Core Shutdown

& Heat Removal Electrical Power

& Control Secondary Nuclear Safety Functions Important-to-Safety-Related (ISR)2 (Protect SAFETY-RELATED Functions)

Structures/

Supports Fire Protection4 Structures

& Supports Security5 Fuel Limits6 TOP QUALITY PROGRAM Targeted Quality Program PROBLEMS: Advanced Reactors

/Over-Regulation: Solution - Precision7 Notes: (1) Expensive, but few components involved. Remains fully operational during & after design earthquake. (2) Essentially industrial components. Retains capability after design earthquake. (3) Retains functionality after design earthquake. (4) Reactor Block only, includes fire detection, mitigation & suppression systems - essential power supply. (5) Reactor Block only - essential power supply. (6) Fuel temperature limit during abnormal plant operations.

(7) See Appendix B for safety class summary.

Hybrid-nuclear Concept Basis

Lean Due Diligence Model Focus: Nuclear Safety 10 Current Modernize WHY ACCEPTABLE?

PASSIVELY FAIL-SAFE MUST DO BETTER X Stupefyingly Expensive Legacy NRC Organization Obsolete Cast-0f-thousands Unnecessary Complex Issues?

Use Outside Services Keep it Simple Hybrid-nuclear Concept Basis

/Over-Regulation: Bureaucracy - Simplify

11 X If Fatal-Flaws NOT RESOLVED (Over-Regulation & Financing)

ADVANCED REACTORS WILL NOT BE DEPLOYED in US By US FIRMS

/The Future X More Likely Supplied By China Russia DANGER X Ditto STATEGICALLY UNWISE Hybrid-nuclear Concept Basis

12 Hybrid-nuclear Concept Basis PROBLEMS: Chapter End-Notes A. Cost Share Model. Completely lacks the checks & balances normally found in other federal procurement processes. Hundreds of millions of dollars can be (and are) awarded to a single company with no bid process recourse. Absolutely invites abuse - Crony Capitalism.

B. Current Model Failure. Billions of dollars have been expended over the last 20+ years on advanced reactor research & development with virtually no successes. There is an inherent and fundamental flaw in the DOE organization which is primarily composed of academics and bureaucrats with little incentive to ever actually complete an undertaking that leads to commercial success. A better approach is unquestionably needed.

C. Small Business Discrimination. The current Public/Private model requires a 20% or more cost-share. While perhaps somewhat palatable for large firms with revenue sources from other activities, the requirement is utterly financially fatal for small businesses, the engine of innovation in the US.

The source of the cost share requirement is the 2005 Energy Act. However, this same act allows the Secretary of Energy to waive the cost-share requirement. Curiously, the DOE habitually ignores this flexibility provided by Congress.

D. Picking Winners/Losers. Marketplace forces are vastly superior to the government in rapidly picking the winners and losers in the competitive arena. Further, leaving the decision solely to bureaucrats invariably leads to corruption.

E Power Market Subsidies. Selectively applied government subsidies for a particular form of power generation are highly disruptive to the marketplace because the consumer invariably pays excessive prices to unfairly benefit a particular firm or group of investors whose product is uncompetitive. Further, the actual low-cost suppliers are financially penalized - see Financial chapter, Power Price and Green Energy Fee. If some form of government support is to be provided, then basic fair-play requires subsidies be even handedly provided to all power producers. For instance, accelerated depreciation for all capital investments associated with building power production facilities.

© 2018 Hybrid Power Technologies LLC draft J F. Investment Tax Credits. In order to successfully develop advanced-reactors in the US, a rationale inducement is required to unlock private investment, otherwise these energy sources will originate from foreign countries, most likely China or Russia, neither of whom are US friends. The envisioned stimulus is a limited term (say 10 years per specific application) tax credit for investors, designers and manufacturers engaged in the development of advanced reactors.

13 STATUS Hybrid-nuclear Concept Basis

© 2018 Hybrid Power Technologies LLC draft J Historical Perspective The time frame for sustained initial deployment of power industry technologies has generally been on the order of a decade. Conventional reactors and gas turbines are now in year 60 of their lifecycle while coal plants have moved past the century mark.

While modern design and manufacturing techniques are accelerating the development of new types of heavy industry power production machines, excessive government regulations have the opposite effect, significantly lengthening the time for new products to enter the marketplace.. The regulatory delay may even prove fatal to a new technology.

14

/ But THUS FAR, PRIVATELY FINANCED US Small Business Innovation at Work.

US Government All Assistance Well Short of Actual Help.

I Think we re going to need some HELP VALLEY of DEATH CONCEPT DESIGN COMPLETE HEP SUCCESS HYBRID POWER PERILS FACING START-UPS Hybrid-nuclear Concept Basis

15 CONCEPT COMPLETE Attract Sponsors STATUS: PATH FORWARD Hybrid-nuclear Concept Basis Notes: (1) Initial nuclear fuel testing envisioned to occur at existing prototype gas reactor in Japan (HTTR). Rotating machinery prototype testing traditionally occurs at manufacturing facilities. (2) Prototype Hybrid/All-Nuclear power plant to confirm reactor technology characteristics in of support future full Hybrid/Gas &

Coal Gas production plants.

Patents, 2011,2013 Concept Development Concept Finalized Pro Forma Financial Proof Licensing Proof Technical Proof Concept Basis Funding Partners Marketing/

Sales Customers Licensing White Paper Prototype Testing1 Preliminary Design Prototype Design2 Prototype Manufacturing Standardized Licensing Plant Design Component Manufacturing Plant Construction Prototype Licensing Plant Licensing Plant Testing Plant Operational

From:

Reckley, William To:

m.keller@hybridpwr.com

Subject:

Public Meeting Date:

Friday, April 27, 2018 9:07:26 AM Mr Keller - the meeting on May 3 is one of a series of public meetings (approximately every six weeks), with the tentative dates established at the beginning of the year. The official notice is via our website and is generally published 2-3 weeks before the meeting. We also send the email reminder to those on a list of parties who previously expressed in interest in advanced reactor topics, with that email usually sent a week or so before the meeting after theagenda has been finalized. We will provide opportunities during the meeting/webinar for questions and comments on the agenda topics and will discuss possible topics for the June 14 meeting at the end of this coming Thursdays meeting. Please also feel free to give me a call or email with possible topics or if you have questions about the guidance being developed for advanced reactor developers - including the regulatory roadmap or other material on our website.

Per your request, I will enter your email into the NRCs official record keeping system, ADAMS.

From:

m.keller@hybridpwr.com To:

Reckley, William Cc:

caleb.ward@usnic.org; pschroeder@ans.org

Subject:

[External_Sender] RE: Public Meeting Date:

Friday, April 27, 2018 1:58:40 PM

Sir, Thank you for promptly responding.

However, you did not answer our basic question regarding including our assessment (which constitutes a detailed comment directed at NRC policy) in the meeting. We are again requesting that our comment be included in the meeting.

As a general critique, the NRC forum does not generally allow the public to utter more than a few words, which is not conducive to properly addressing complex issues. Generally, some form of brief presentation (i.e. PowerPoint slides) would be appropriate, but the NRC forum is not structured to support such an approach. Incidentally, that is why we are quite skeptical of the actual intent of the NRC for these meetings which appear to be essentially one-way streets with actual public (and independent advanced reactor developer) participation hamstrung. Might be helpful if input (e.g.

proposed brief presentations) were solicited in conjunction with long-range advanced notice of important upcoming meetings. That would also allow the NRC to review concerns in advance and formulate a reasoned response. Please note, this approach would also allow the concerns to be re-directed to more efficient methods for dispositio to avoid bogging down the actual meeting.

Also, a weeks notice is not helpful to those of us who live in fly-over country, although not a problem for firms with representatives located in the DC environs. Please re-think the short-fuse NRC approach to scheduling of important meetings.

We did notice that on the NRC Website for advanced reactors, there is a statement that white Papers can be submitted to the NRC staff, presumably for inclusion on the NRC website. Our assessment could easily be re-configured as a white paper. Do you qualify as NRC staff? The website neglects to identify who, specifically, the white papers are to be directed, thereby deflating the actual real-world effectiveness of inviting inputs. An e-mail address, with a person actually reading the input (and replying) would be helpful when inviting submittals.

Regards, Mike Michael F. Keller President Hybrid Power Technologies LLC m.keller@hybridpwr.com 913-375-6983 (cell) 913-681-7687 (land-line)

From:

Reckley, William To:

"m.keller@hybridpwr.com" Cc:

Cubbage, Amy

Subject:

RE: RE: Public Meeting Date:

Monday, April 30, 2018 11:26:00 AM Mr. Keller - the primary purpose of the periodic stakeholder meetings is to work on generic or technology-inclusive approaches for improving regulatory processes and resolving policy issues that might impact the development and deployment of non-light water reactors. As such, the white papers discussed at these meetings are generally prepared by NEI, the technology working groups (organized by fast reactors, gas-cooled reactors, and molten-salt reactors), or other industry organizations instead of by individual developers. At this point, the discussions for the licensing of non-light water reactors are focused on the draft guidance document prepared under the Licensing Modernization Project (ADAMS Accession No. ML18094B085). Our current thinking is that the licensing of non-light water reactors will likely follow a process that more resembles the Licensing Modernization paper than the current guidance for light water reactors - and so I recommend that you look over the industry guidance and participate in its development through the gas-cooled reactor technology working group. I will refer meeting participants to your comments, which I am having entered into ADAMS. The tentative dates for the periodic meetings for the remainder of this year are May 3, June 14, July 26, September 13, October 25, and December 13. A separate meeting on the Licensing Modernization Project guidance document is tentatively scheduled for June 4-5, with a related briefing of the Advisory Committee on Reactor Safeguards on June 19.

If you are thinking that Hybrid Power will be developing a licensing approach different from the Licensing Modernization Project proposals, then I would recommend that we schedule a separate drop-in meeting to discuss the possible design-specific approach. This would also provide you an opportunity to introduce the NRC staff to your design as well as your plans for development, research and testing programs, licensing, and deployment strategies. There are discussions of such drop-in meetings and the value of regulatory engagement plans in the Roadmap available on our website (ADAMS Accession No. ML17312B567).

The lead project manager for gas-cooled reactors in our office is Amy Cubbage. If you would like to arrange to have a conference call or to have an in-person meeting at our offices in Rockville, Maryland, please give Amy a call at (301) 415-2875 or email at amy.cubbage@nrc.gov

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