ML18191B026

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Backfit Training Module 2: Backfitting Process
ML18191B026
Person / Time
Issue date: 07/10/2018
From: Les Cupidon
Office of Nuclear Regulatory Research
To:
Cupidon L
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Download: ML18191B026 (40)


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LICENSING BASIS AND BACKFITTING WORKSHOP MODULE 2: BACKFITTING PROCESS

WHAT ARE THIS MODULES OBJECTIVES?

Discuss the six steps for evaluating a proposed action (potential backfitting)

Convey when backfitting requirements do and do not apply Differentiate the backfitting categories LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 2

WHY REVIEW THIS MATERIAL?

Youll be more comfortable with backfitting concepts and know when we need to use them to support necessary actionsand which actions are not backfitting.

Key points:

Safety and security come first.

If action is proposed to address a safety/security concern, we must consider backfitting.

These steps will help you decide if a proposed action is backfitting, and how to justify it.

LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 3

NEW OR CHANGED REQUIREMENTS OR INTERPRETATIONS Backfitting is a Code of Federal Regulations requirement for the NRC Structured approach for imposing a new requirement Assumes affected entity is covered by these provisions Backfitting can occur after a regulatory approval if the action represents:

Changed or new requirement (regulation, technical specification, license condition, order)

Changed or new position imposed by the staff (including implied or inferred imposition)

Backfitting affects:

Systems, structures, or components (design or the actual equipment)

Organization or procedures for design, construction, or operation LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 4

THE ENTRY CONDITION (STEP 0)

An issue relevant to public health and safety or common defense and security has been raised.

Licensing review, inspection, operating experience, etc.

Includes identification of an issue during a licensing review that substantially increases risk (SRP 19.2, Appendix D)

New requirements or NRC interpretations are needed to address the issue fully.

Note: The applicable requirements were confirmed in the facility-specific licensing basis (see Module 1).

How should we address it?

LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 5

SIX-STEP APPROACH FOR BACKFITTING AND ISSUE FINALITY Step Question 1 Is the proposed action of the type excluded from backfitting and issue finality provisions?

2 Would the proposed action affect any entity that is the subject of a backfitting or issue finality provision?

3 Would the proposed action constitute backfitting or involve a concern with issue finality?

4 a. Do one or more of the Adequate Protection exceptions to preparing a backfit analysis apply?

b. If not, then does the Compliance exception apply?

5 Does the proposed action pass a backfit analysis or meet an issue finality criterion?

6 Should the NRC take action to avoid the effect of the backfitting or issue finality provision on the proposed action by invoking an administrative exemption from the backfitting provision?

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STEP 1: IS THE PROPOSED ACTION OF THE TYPE EXCLUDED FROM BACKFITTING AND ISSUE FINALITY PROVISIONS?

Information collection and reporting (facilitating NRC regulatory oversight)

Requirements implementing mandatory statutory provisions, where the NRC has no discretion to implement the statute Administrative or organizational changes

References:

SECY-93-086, SRM-SECY-93-086 Note: Non-public in ADAMS but documents are publicly available through PDR.

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STEP 2: WOULD THE PROPOSED ACTION AFFECT ANY ENTITY THAT IS THE SUBJECT OF A BACKFITTING OR ISSUE FINALITY PROVISION?

Backfitting does not apply to every entity Backfitting started with licensees of nuclear power plants (NPPs) (including holders of construction permits) under 10 CFR Part 50 Operating and decommissioning power reactors Licensees under both 10 CFR Part 50 (10 CFR 50.109) and 10 CFR Part 52 (various issue finality provisions)

NRC expanded backfitting applicability to certain materials licensees LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 8

MATERIALS ONLY NRC BACKFITTING REQUIREMENTS Affected Entities Regulations power reactors (operating and decommissioning) 10 CFR 50.109, 10 CFR Part 52 licensees authorized to possess special nuclear 10 CFR 70.76 material (SNM) above a critical mass independent spent fuel storage installations (ISFSIs) 10 CFR 72.62 gaseous diffusion plants (GDPs) 10 CFR 76.76 LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 9

SPECIAL SITUATION: CERTIFICATES OF COMPLIANCE FOR SPENT FUEL STORAGE CASKS 10 CFR 72.62 does NOT apply to certificate of compliance (CoC) applicant and CoC holder (e.g., Holtec) 10 CFR 72.62 DOES apply to licensee using CoC-approved cask (e.g., NPP)

LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 10

SPECIAL SITUATION: CERTIFICATE OF COMPLIANCE AMENDMENT VS. REVISION CoC Holder (e.g., Holtec): not backfitting CoC User (e.g., NPP licensee):

Amendment: not backfitting - forward-fit for future voluntary applications Revision: backfitting - supersedes previous approval

Reference:

RIS 2017-05 (ML17165A183)

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EXAMPLE: RADIATION MONITORS In 2005, the NRC adopts a final regulation requiring entities licensed to possess special nuclear material to have a radiation detection monitor at each door where such material is stored. The regulation does not specify the sensitivity of the detector. Lets assume this applies to NPPs, fuel cycle facilities, and two irradiators.

In 2018, the NRC proposes to amend the regulation by requiring the detector to have a minimum specified sensitivity.

Question: Does the NRC have to treat the 2018 rulemaking as potential backfitting?

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STEP 3: WOULD THE PROPOSED ACTION CONSTITUTE BACKFITTING OR INVOLVE A CONCERN WITH ISSUE FINALITY?

Changed or new requirement Regulation, technical specification, license condition, order Changed or new staff position e.g., acceptability of a methodology Affecting:

Systems, structures, or components (design or the actual equipment)

Organization or procedures for design, construction, or operation Imposed after the entity has received the relevant regulatory approval LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 13

HQ ONLY STEP 3: WOULD THE PROPOSED ACTION CONSTITUTE BACKFITTING OR INVOLVE A CONCERN WITH ISSUE FINALITY? (CONTD)

Backfitting steps should be followed for interpretive guidance (e.g., Regulatory Guides) if:

We intend the guidance to become (through further action) legally binding on a licensee OR We expect licensees to voluntarily adopt the guidance as part of our basis for resolving a safety or regulatory issue Forward fits are not backfitting for currently licensed entities.

Application of guidance or requirements to future applicants Requests by licensees for an exemption, other dispensation from compliance, or amendmentif The new or revised guidance relates directly to the licensees voluntary request; AND The specific topic of the new or revised guidance is an essential consideration in the NRC staffs review of the licensees voluntary request.

Reference:

ML101960180 LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 14

HQ RX / RII ONLY STEP 3: WOULD THE PROPOSED ACTION INVOLVE A CONCERN WITH ISSUE FINALITY? (CONTD)

Part 52 entities (issue finality)

Affects two types of entities entity granted the license or approval entity referencing the license or approval LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 15

MATERIALS ONLY STEP 3: WOULD THE PROPOSED ACTION CONSTITUTE BACKFITTING? (CONTD)

Part 70 possessors of SNM (> critical mass)

Part 72 CoCs for independent spent fuel storage installation (ISFSI) casks Backfitting provision applies to licensee (e.g., NPP) users of ISFSI casks (e.g., changes in inspections of casks)

Backfitting provision does NOT apply to CoC holder (the designer/manufacturer/vendor of the cask)

Part 76 gaseous diffusion plant (GDP)

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EXAMPLE: NUMBERS OF WIDGETS In 1975, NRC adopts a final regulation requiring NPPs with operating licenses (OLs) issued after the effective date of the final rule to have two widgets.

In 2018, NRC adopts a final regulation requiring all new applicants for OLs or combined licenses (COLs) to have three widgets.

Question: Does the 2018 regulation constitute backfitting or is it inconsistent with an issue finality provision?

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EXAMPLE: NUMBERS OF WIDGETS (MODIFIED)

In 1975, NRC adopts a final regulation requiring NPPs with OLs issued after the effective date of the final rule to have two widgets.

In 2018, NRC adopts a final regulation requiring all NPPs with OLs or COLs on the effective date of the regulation to have three widgets no later than 30 days after the effective date of the regulation. On the effective date of the 2018 regulation, there are 99 OLs and 2 COLs.

Question: Does the 2018 regulation constitute backfitting or is it inconsistent with an issue finality provision?

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STEP 4: CONSIDERATION OF ADEQUATE PROTECTION AND COMPLIANCE EXCEPTIONS Three exceptions to preparation of backfit analysis:

Needed for adequate protection Defining or redefining adequate protection Needed for compliance with requirements in effect at the time of regulatory approval Issue finality provisions do not refer to these as exceptions; they are just one of several criteria that would allow issue finality to be violated

References:

COMSECY-16-0020 public summary (ML16355A258) and SRM (ML16334A462)

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STEP 4A: DO ONE OR MORE OF THE ADEQUATE PROTECTION EXCEPTIONS TO PREPARING A BACKFIT ANALYSIS APPLY?

Safety/security first!

The staff must first determine if one or both of the adequate protection exceptions apply.

If so, action is required under the Atomic Energy Act, and the staff should not consider the use of the compliance exception or develop a backfit analysis.

If not, then the staff should proceed to other steps.

References:

COMSECY-16-0020 public summary (ML16355A258) and SRM (ML16334A462)

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STEP 4A: DO ONE OR MORE OF THE ADEQUATE PROTECTION EXCEPTIONS TO PREPARING A BACKFIT ANALYSIS APPLY? (CONTD)

Backfitting requirements include two adequate protection exceptions:

Necessary to ensure adequate protection Defining or redefining adequate protection May be sufficient to say that the proposed action involves adequate protection, and that the adequate protection exceptions in 10 CFR 50.109 apply LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 21

STEP 4B: IF NONE OF THE ADEQUATE PROTECTION EXCEPTIONS APPLY, THEN DOES THE COMPLIANCE EXCEPTION APPLY?

Compliance exception was a subject of criticism from external stakeholders Staff inconsistently applied the compliance exception over time.

Staff application of compliance exception was inconsistent with 1985 Statement of Considerations for the Backfit Rule stating that the exception was limited to mistake or omission of fact, and that new or revised interpretations of what was needed to comply with existing NRC requirements did not fall within the exception.

References:

COMSECY-16-0020 public summary (ML16355A258) and SRM (ML16334A462)

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STEP 4B: IF NONE OF THE ADEQUATE PROTECTION EXCEPTIONS APPLY, THEN DOES THE COMPLIANCE EXCEPTION APPLY? (CONTD)

Compliance exception may be used only where both of the following two elements are applicable:

The NRC (staff), whether by its own error or by licensee or third-party error or omission, at or before the time of its determination that a known and established standard of the Commission was satisfied, incorrectly perceived facts, performed or failed to recognize flawed analyses, or failed to properly draw direct inferences from those facts or analyses, as judged by standards and practices that were prevailing among professionals or experts in the relevant area at the time of the NRC determination in question, and Those facts, analyses, or inferences have now been properly perceived, performed, or drawn.

In short:

The NRC had a consistent interpretation of the requirements at the time of original approval.

If the error/omission had not occurred, we would likely have made a different decision.

Costs need to be considered.

References:

COMSECY-16-0020 public summary (ML16355A258) and SRM (ML16334A462)

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STEP 4B: IF NONE OF THE ADEQUATE PROTECTION EXCEPTIONS APPLY, THEN DOES THE COMPLIANCE EXCEPTION APPLY? (CONTD)

Compliance exception may NOT be used for failures of the NRC to extrapolate conclusions from facts, analyses, and direct inferences in ways that were not commonly recognized under such prevailing professional standards and practices at the time of the original NRC determination.

Compliance exception may NOT be used for recharacterizations of whether a particular set of otherwise understood circumstances satisfies the standard at issue based upon professional standards and practices developed or accepted after the time of the NRC determination.

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STEP 4B: COMPLIANCE EXCEPTION CHECKLIST -

(I) THE REQUIREMENT The NRC has identified an NRC requirement for which compliance is sought.

The identified requirement must have been known and established (i.e., the requirement cannot be implied) at the time of the NRCs approval.

The NRC consistently interpreted and applied the identified requirement.

The NRC approved the licensees method of compliance with the requirement.

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STEP 4B: COMPLIANCE EXCEPTION CHECKLIST -

(II) THE ERROR OR OMISSION The NRC has identified an error or omissioneither the NRCs own error, or the omission or error of the licensee/applicant or a third party (e.g., a vendor or another government agency), through:

Incorrect perception or understanding of the facts Failure to recognize flawed analyses Failure to draw direct inferences form those facts or analyses The error must have occurred at or before the time that the NRC found that the NRC requirement or commitment was satisfied and a regulatory approval was issued.

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STEP 4B: COMPLIANCE EXCEPTION CHECKLIST -

(II) THE ERROR OR OMISSION (CONTD)

The existence of an error must be determined by standards and practices that were prevailing among professionals or experts in the relevant area at the time of the NRC determination that the NRC requirement or commitment was satisfied and a regulatory approval was issued.

The facts, analyses, or inferences which are claimed to be an error are now properly perceived, performed, or drawn (determined).

The NRC would likely not have issued its approval had NRC known of the error or omission.

LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 27

STEP 4B: COMPLIANCE EXCEPTION CHECKLIST -

(III) THE COSTS Costs of the compliance backfitting are considered in the NRCs documented evaluation of the backfitting action.

LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 28

EXAMPLE: WIDGET METHODOLOGY In 1975, NRC adopts a final regulation requiring NPPs with OLs issued after the effective date of the final rule to have two widgets. The 1975 final rule notice states that two widgets will provide the desired level of performance based upon data analyzed by the Fine Methodology.

In 2018, an NRC technical reviewer, running confirmatory calculations using Super Methodology, discovers that two widgets would not provide the desired level of performance and three widgets are needed.

Question: If backfitting is pursued, should the evaluation invoke one of the exceptions in the Backfit Rule?

LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 29

STEP 5: DOES THE PROPOSED ACTION PASS A BACKFIT ANALYSIS OR MEET AN ISSUE FINALITY CRITERION?

Backfit analysis acceptance test consists of two sequential criteria:

1. Substantial increase in safety or security Reasonable and documentable substantial increase in radiological public health and safety or common defense and security
2. Cost of the safety or security increase is justified in light of the increase in safety or security (cost-beneficial)

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STEP 5: DOES THE PROPOSED ACTION PASS A BACKFIT ANALYSIS OR MEET AN ISSUE FINALITY CRITERION? (CONTD)

Substantial means both:

Real; not speculative or illusory Important or significant in a large amount, extent, or degree

References:

1985 Backfit Rule (50 FR 38097);

SRM-SECY-93-086 Note: SRM is non-public in ADAMS but is publicly available through PDR.

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STEP 5: DOES THE PROPOSED ACTION PASS A BACKFIT ANALYSIS OR MEET AN ISSUE FINALITY CRITERION? (CONTD)

Costs and benefits may be qualitative in nature Quantifiable benefits and costs MUST be identified and presented to the extent possible Non-quantitative factors inform decision making and, in limited cases, can be relied upon when quantitative analyses are not possible or practical

References:

SRM-SECY-93-086, SECY-14-0087 (ML14127A458), SRM-SECY-14-0087 (ML15063A568)

Note: 1993 SRM is non-public in ADAMS but is publicly available through PDR.

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HQ RX / RII ONLY STEP 5: DOES THE PROPOSED ACTION PASS A BACKFIT ANALYSIS OR MEET AN ISSUE FINALITY CRITERION? (CONTD)

Part 52 Approval Part 52 Issue Finality Provision Early Site Permit (ESP) 10 CFR 52.39 (term of ESP) 10 CFR 52.31 (renewal)

Standard Design Certification Rule (DCR) 10 CFR 52.63 (term of DCR) 10 CFR 52.59 (renewal)

Combined License (COL) 10 CFR 52.83 (referenced NRC approvals) 10 CFR 52.98 (term of COL)

Standard Design Approval (SDA) 10 CFR 52.145 Manufacturing License (ML) 10 CFR 52.171 (term of ML) 10 CFR 52.179 (renewal)

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HQ RX / RII ONLY STEP 5: DOES THE PROPOSED ACTION PASS A BACKFIT ANALYSIS OR MEET AN ISSUE FINALITY CRITERION? (CONTD)

Each 10 CFR Part 52 licensing process has different finality requirements ESP - covers updates and variances DC - restricts conditions for amending a DC rule; addresses standardization and material errors COL - refers to 10 CFR 50.109; defines change processes when referencing other approvals SDA - requires staff reliance on the SDA when referenced in an application absent new info ML - refers to 10 CFR 50.109; restricts changes to the design Each finality requirement also places restrictions on information requests LICENSING BASIS AND BACKFITTING WORKSHOP - SUMMER 2018 - MODULE 2 (BACKFITTING PROCESS) 34

EXAMPLE: WIDGET BACKFIT ANALYSIS (PLANT-SPECIFIC)

In 1975, NRC adopts a final regulation requiring NPPs with OLs to have two widgets.

In 2018, NRC proposes to issue an Order to Facility X requiring three widgets on the basis of the new Super Methodology calculations. The backfit analysis shows that the safety benefit of three widgets is $100, which justifies the cost of $100.

Question: May the NRC impose this requirement on the basis of this backfit analysis?

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EXAMPLE: WIDGET BACKFIT ANALYSIS (GENERIC)

In 1975, NRC adopts a final regulation requiring NPPs with OLs to have two widgets.

In 2018, NRC proposes to adopt a final regulation requiring all current and new NPPs to have three widgets. The Backfitting and Issue Finality discussion in the draft final rule notice indicates that a backfit analysis shows that the safety benefits of three widgets is $10 million per plant, which justifies the cost of $1 million per plant.

Question: May the NRC adopt this final rule on the basis of this backfit analysis?

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EXAMPLE: GAUGE SENSITIVITY All NPPs, fuel cycle facilities, and research and test reactors are required to use a gauge that alarms at 100 Units of contamination to check their employees for radioactive Step Question contamination. Most licensees use the Fancy Gauge, which is very sensitive and alarms at 1 Excluded?

70 Units. Some use the less sensitive Standard Gauge, which alarms at 100 units. Covered entities?

2 New medical information indicates that occupational exposure at a level of 80 Units of 3 Is it backfitting?

contamination, if received frequently, can cause health effects. a. Adequate protection?

4 The NRC proposes to require all licensees with the potential for occupational b. Compliance?

contamination to obtain and use the Fancy Gauge, which alarms at 70 Units. 5 Backfitting test met?

Question: Which factors should be considered in approaching this problem? 6 Admin exemption?

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MATERIALS ONLY EXAMPLE: FUEL CYCLE FACILITY PROPOSED CYBER SECURITY REQUIREMENT Under 10 CFR Part 73, Category I fuel cycle facilities (FCF) licensees must maintain a physical protection system designed to protect against the design basis threat, including a cyber attack. However, current NRC physical protection requirements do not set forth specific provisions for addressing cyber attacks at Category I FCFs.

In addition, FCF licensees that hold classified information are required to meet the security requirements in 10 CFR Part 95. These requirements include protection against the loss or unauthorized disclosure of classified information, including from a cyber attack. However, 10 CFR Part 95 and related guidance do not provide specific cyber security provisions for the protection of digital assets for the required protection of classified information.

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MATERIALS ONLY EXAMPLE: FUEL CYCLE FACILITY PROPOSED CYBERSECURITY REQUIREMENT (CONTD)

The NRC is considering imposing cyber security requirements on FCF licensees.

The proposed rule would require FCFs to create and maintain a cyber security plan, Step Question evaluate their digital systems, and deploy cyber security controls to detect, protect 1 Excluded?

against, and respond to a cyber attack. FCF licensees would have to submit their 2 Covered entities?

security plans and security plan changes to the NRC for approval. They would have to 3 Is it backfitting?

report certain cyber security events to the NRC and compile and maintain certain information. 4 a. Adequate protection?

b. Compliance?

The impacted licensees would include FCF licensees subject to: (1) 10 CFR 70.60; or 5 Backfitting test met?

(2) the requirements of 10 CFR Part 40 for operation of a uranium hexafluoride conversion or deconversion facility. 6 Admin exemption?

Question: Which factors should be considered in approaching this problem?

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KEY MESSAGES Use the 6-step process. Trust the process.

Consult with the Backfitting Community of Practice point of contact for your office or region.

Adequate protection issues require NRC action, and backfitting becomes a secondary consideration.

A backfit analysis determines whether the proposed action would have a substantial increase in protection and, if so, whether the costs are justified-in that order.

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