ML20029B230
| ML20029B230 | |
| Person / Time | |
|---|---|
| Issue date: | 02/27/1991 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| References | |
| REF-10CFR9.7 NUDOCS 9103060258 | |
| Download: ML20029B230 (74) | |
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UNITED STATES OF AMERICA i
NUCLEAR REGULATORY COMMIS SION I
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(6' BRIEFING BY NARUC ON ECONOMIC PERFORMANCE INCENTIVES L
Location:
RoCRvlu.t. xARYuso hdI6 FEBRUARY 27, 1991 Pages:
M PAGES ND.L R. GROSS AND CO., INC.
C 0 " * *. REPORTER $ AND TRANSCRIDERS
- LJ ?.hode Island Avenue, Northwest Washington, D.C.
20005 (202) 234-4423 E
r DISCLAIMER This is an unofficial tre.nscript of a meeting of
/
the United States Nuclear ' gultatory Commission held on February 27, 1991, in the Commission's office at One White Flint North, Rockville, Mt4ryland.
The meeting was open to public attendance ard observation.
This transcript has not been reviewed, corrected or edited, and it may contain inaccuracies.
The transcript is intended - solely for general informational purposes.
As provided by 10 CFR 9.103, it is not part of the formal or informal record of decision of the matters discussed.
Expressions of opinion in this transcript do not necessarily reflect final determination o
a'liefs.
No pleading or other paper may be filed with the Commission in any proceeding as the result of, or addressed to, any statement or argument contained herein, except as the Commission may authorize.
NEAL R. GROSS court Rf>oRTIRS AND TRANSCRittR$
1323 RHoDt 15 LAND AVINUE. H.W.
q (202) 234-4433 WASHINGToH. D.C.
20005 (202) 232 6600
s-UNITED STATES OF AMERICA
. l4 '
-NUCLEAR REGULATORY COMMISSION s
. BRIEFING BY NARUC ON ECONOMIC PERFORMANCE INCENTIVES PUBLIC MEETING Nuclear Regulatory Commission one White Flint North Rockville, Maryland Wednesday, February 27, 1991
-The Commission met in open
- session, pursuant to notice, at 10:00'a.m., Kenneth.c. Rogers ~,
6 Commissioner, presiding.
COMMISSIONERS PRESENT:
KENNETH C.
ROGERS, Commissioner JAMES R. CURTISS, Commissioner-FORREST J. REMICK, Commissioner-p-.
11.)
NEAL R.
GROSS 1323~Rhode Island Avenue,-N.W.
Washington, D.C.
20005 i
(202) 234-4433
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STAFF AND. PRESENTERS SEATED AT THE COMMISSION TABLE:.
SAMUEL J..CHILK,. Secretary MARTIN-MALSCH,-Deputy General-Counsel ASHLEY -BROWN, commissioner, Ohio Public Utilities-t Commission, Chairman of NARUC Committee on Electricity i
MICHAEL WILSON, Commissioner, Florida Public Service Commission, Chairman. of the-NARUC Subcommittee on Nuclenr-Issues and Nuclear Waste, and Vice Chairman of the NARUC Committee on. Electricity LYNN-- SHISHIDO-TOPE L,-
Commissioner, Illinois Commerce Commission, Member
- o f.
the NARUC Committee on Electricity i
1.
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9 1.
NEAL R.
GROSS 1323 Rhode Island Avenue.
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10:00 a.m.
3 COMMISSIONER ROGERS:
Good morning.-ladies 4
and-gentlemen.
6 This morning the Commission will be 6
briefed on topics of' interest to them and to the NRC 7
by-members of the Electricity-and Nuclear Waste 8
Nuclear Issues Subcommittee
-of the National-9 Association of Regulatory Utility Commissioners.
10 Chairman carr is on travel and can't be 11-
- with.
us.
- However, he shares with the other:
12..
Commissioners-a keen interest in-these matters.
-13 Si e
early
- 1988, the Commission has
.m 14 evidenced-an in w est in increasing its interactions 15 with-the NARUC.
1 -volunteered to represent the 16 Commissioners with NARUC and in the~ summer of 1988 I 17 attended l.the. NARUC conference in ' San Diego.
Since 18.'
that time, I or one member of my. staff have regularly
-19 attended' the meetings of t h e. N u c l e a r W a s t e - N u c l e a r.
20:
Issues Subcommittee -of: the-Electricity - Committee -of 21.
NARUC.
We have.found our presence welcome-.and= the 22.
opportunity to share-views - very useful at- _those.
23_
_ meetings..
-_ 2 4 -
This week, NARUC is meeting in Washington 0
25 and we'.ve invited the Electricity Committee to brief-ir3 tLJ NEAL R.
GROSS 1323 Rhode Island Avenue,,N.W.
. Washington, D.C.
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-1 the entire Commiasion on any subjects they consider 2 --
appropriate.
NARUC has responded positively to that 3
invitation and joins us today.
4 To my knowledge, this is the first time 5
that NARUC has made a presentation to the Commission.
6 and it is c,ur hope and expectation that this will mark 7
the beginning of an ever-increasing cooperative 8
relationship between the NRC and stato regulatory-9 commissioners.
-10 NRC has been very interested in the state 11 initiatives and economic performance incentives for 12 nuclear power plant operators.
The subject was 13 discussed wi t h N ARUC committces on several occasions 14
. prior to the publication of a draft policy statement 15 in the Federal Reviater on October 26th of last year, 16 and that comment period. expired on December
- 10th, 17 1990.-
The NRC staf f is now-evaluating the comments 18 and will present its recommendations to the commission 19 in the near future.
20 We look forward to listening to-your.
21 presentations and since we are a collegial body we-may 22 offer a-few comments of our-own as you proceed.
We 23-welcome' Mr.-
Ashley Brown, Commissioner of the Ohio 24 Public Utilities. Commission and Chairman.of the'NARUC
- 25 Committee-on Electricity; Ms.
Lynn Shishido-Topel,-
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u NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Was h.i n g t o n,
D.C.
20005 (202) 234-4433
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'l Commissioner of the - Illinois commerce Commission and 2
member of the NARUC Committee on Electricity; and-Mr.
3 Michael Wilson, Commissioner of the Florida Public 4
Service Commission and Chairman of ths NARUC 5
Subcommittee on Nuclear Issues Waste Disposal and Vice 6
Chairman of the NARUC Electricity Committee.
7 Mr. Brown, would you like to introduce any 8
other Commissioners present?
9 MR.
BROWN:
I would.
Thank you.
10 Commissioner Rogers.
11 We have commissioner Dick Casad of the 12 State of Washington, Commissioner Wendell Holland of 13 the State of Pennsylvania, Commissioner Ces Hobinson
. _.J 14 I
of. Georgia, and Commissioner Patricia Qualls of 15 Arkansas.
I think we've got all of the Commissioners.
16 In addition, we have a number of staff folks from 17 Commissions and, of course, Ron Callen, who is the 18 Nuclear Waste Subcommittee staff person here-in 19 Washington.
20 COMMISSIONER ROGERS:
Well, welcome to you 21 all.
22' Do any of my fellow NRC Commissioners wish 23-to make any remarks?-
24 Well, Mr. Brown, would you please proceed?
25 MR. BROWN:
Thank you, y._,
L,J NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
D.C.
20005 (20") 234-4433
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1-On. behalf of'the NARUC, I want ~
~
to thank 2
the ommission for the opportunity t o s i t' down and 3-
'have some dialogue on issues of cour on. concern..
All 4
of the-state regulators who have nuclear power plants 5
in their state are certainly very much concerned about-6 the operations of the NRr and very interested in 7_
finding ways that we can work together and dialogue 8
for areas of mutual concern and areas where we share 9
concerns about the same power plants.
10-llop e f u l l y, this meeting can be as informal 11 as possible.
Of course, if you interrupt me, - 'I' ll 12' -
Ilose my-train of thought and we'll be off.
Some have
~ ~
13 made the comment there may not have been one in the 14 first-place, so perhaps interrupt will be welcome.-
15.
Butz we would like this to..be just as in formal, as _- we
-16 can possibly be, 17 Let me give a little background on the 18-NARUC.
-I
-think commissioner-Rogers, who-we do 19-appreciate your attendance-and Myron Karman's
- 20 attendance at our meetings, as well as some other-31-staff folks what the- -NARUC
-is.
All of the 22
. regulatory bodies which have utility regulatory a
23 jurisdiction in the United - States, which includes-50 24
. states,- Puerto Rico, the Virgin Islands, the District 25 of Columbia and a couple of cities which also. have NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.
20005 (202)'234-4433
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1 regulatory jurisdiction are members of NARUC. LWhat we 2
try to do is coordinate general state regulatory 3
responsibilities and positions on national policy 4
issues, whether they be environmental, whether they be 5
safety issues, whether they be - Just general policy G
issues on utility regulation.
7 We meet at least three times a year.
In 8-February we meet here in Washington.
I'm sure all of 9
you will be interested in meeting with us in July on 10 the West Coast and we meet in our annual convention.
11 We are organized in a
number of 12 substantive committees.
Today I wanted to focus on 13 the Committee on Electricity, which of course is the
.o 14 one where I think we'd havethe most - common ground.
15 In the Electricity Committee, we have a couple of 16-different subcommittees, but the one that's important 117 is chaired by my colleague Mike Wilson of Florida, 18 which is the Subcommittee on-Nuclear Issues and 19 Nuclear Waste.
20 In-that particular committee, we're 21 dealing with all of the issues that state regulators 22 have to grapple with on the national level-associated l
L 23 with' nuclear power.
Those issues obviously include a 24 great deal of effort on trying to move for a solution 25 to the problems of nuclear waste and also of areas of l
l-l 1
,.i NEAL H.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.
20005 (202) 234-4433
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1 common concern with.the NRC.
'It's in that meeting 2
that Commissioner Rogers regularly participates and 3
adds a great deal to that discunnion.
4
- Now, obviously, like all national 5
associations, each state jealously guards its ability 6
-and prerogatives to exercise its own policy ' areas.
7 But we do share some common understandings.
Where we 8
differ, I think we know better as a result of these 9
discussions what those differences are and why we have 10 them, and we try as best we can to reach some common 11
'denominat ors' where-we can share some positions.
I 12-think we try to operate on a consensus basis and 13-frequently do that.
though in regard' to the area 14 In particular 15 of regulation of the nuclear power industry, we are--
16 our jurisdiction is clearly designed to cover -the 17 economic regulation of the plants.
Our concerns, and 18.
-I think most state regulators in viewing economic 19 Jurisdiction have a
very broad view of what that 20 means.
That means that a plant that doesn' t.. ope rat e 21-safely. is likely not to-be a very economic asset.
22 Most of us recognize that there is a-linkage between 23
-safety and economic regulation and we're very 24 concerned about that.
We're concerned that we not 25 send signals that are very short-term in terms of i
o.
NEAL R.
GROSS il 1323 Rhode Island Avenue, N.W.
I Washington, D.C.
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1 long-term safety interests.
But on the other hand, we 2
also want to make sure that plants are - operated 3
consistent with their economic purposes.
4 So, one of the-things that we're i
S particularly concerned about - today is, knowing your 1
6' concerns and your strong feelings and your strong.
y
'7 Jurisdictional responsibilities - about nuclear safety, 8
to see if there aren't ways that we can find to work-9 together that we could develop standards of 10 accountability that appropriately and-properly address 11 safety consideratio.ns as-well as economic 12 considerations.
13
'For example, 'we're not interested 1
14 don'.t know of'any etuto regulatory body that would be 15 interented -- in imposing an economic performance test 16 n n nuclear plant that would force n company to do o
17
.something or' tempt a company - to --do something that 18 would be irresponsible from a safety point, of view.
~19 We're not interested in that.
If,we develop standards 20 along thoseE linen, we need to know about.it so-we can 21 try to change those.
22
-On the other hand,-
we're also not 23 interested. In a.
plant that doesn't. operate on 'an 24 cconomic basis.
So, there are levels of 25 accountability in both safety and economics and rq JL J L
l-NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.-
20005
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1-Commissioner Rogers and the Subcommittee have dialogue 2
on a number of occasions about the possibility ofL 3'
finding some common ground and some common standards.
4 Obviously, we also recognize that there 5
are some forces at work
- that, in
- fact, do move 6
towards --- or do provide economic signals about.
7 operating safely.
There's the issues about the 8.
company's general reputation, there are-the. bond 9_
rating implications-of a poor safety performance o r-
'10 NRC citing
-companies for safety violations.
.11 Generally, the best run utilities, that-is from a 12-safety -and economic point of
- view, are the-- most
-13_
profitable utilities.
There are performance bonuses-14 for executives who operate consistent-with appropriate 15 standards._ There are a number of things that go-on.
-16 But it's our view that the-NRC a n d - 's t a t e 17-regulatory bodies, all of us, need to try to; develop
.18 some - standards that send all the right signals, common-19 safety and economic signals, so that we 'can - do our 20 responsibility of making sure that the._ customers,- the.
21 consumer receives dependable, reliable utility service 22-at a-reasonable cost and the public_ health'and-safety 23 is not in any way-threatened by a poor performance at-24 a.
- plant, that we all share those common kinds of--
25 concerns.
I
- 1.
J NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
h Washington, D.C.
20005 (202) 234-4433
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l At this point, I'd like-to turn to Mike 2
Wilson who chairs our Nuclear Waste-and Nuclear Issues-3 Subcommittee to give you more of an overview of our 4_
interest and concerns particularly about the nuclear 5
waste repository issue.
6 MR.
WILSON:
-Good morning.
Thank you, 7
Ashley.
8 We appreciate the opportunity to be here 9
and-I'd like to add.my appreciation to Commissioner 10 Rogers who attends our meetings regularly and does 11 contribute substantially to the quality of the 12 discussion that we generally have at our NARUO.
~
13 meetir es and we're very gruteful for that.
We feel
_.i 14 like that's a good line of communication with_the NRC 15 and' addresses-our concern that while we may have 16
. differences in some areas, those differences ought not
~
17 to arise out: of_.a lack-of communication.
So, we_both
'18 appreciate this opportunity to be_here today:and for 19 your participation in-our: meetings.
20 Our Committee, the. Subcommittee on Nuclear 21 Weste Disposal; has siE. e 1984 followed the progress 22 or lack thereofi being made in the development of a 23 disposal system for commercial spent nuclear fuel.
We 24' have monitored the DOE's program.- -We have engaged in 25 conversations and meetings wi'r. the DOE, the Technical i
- 1. M NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
.l Washington, D.C.
20005 (202) 234-4433
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Review Board, Congress',
utilities and congressional J
2
. staff and other people knowledgeable of the program.
3 Last summer, we opened a Washington office 4
which is devoted exclusively to monitoring and pursuit 5
of a successful waste disposal _ waste.
This office is 6
designed to gather information to provide to state 7
commissioners to keep them apprised of the current-8 status of the program and also to help us try and make 9
a positive contribution to the program.
The 10 Washington office is very useful.to us in trying to 11~
pursuo-those goals.
12 Our interests, of course, are principally
' ~
13-driven by the fact that nuclear electric ratepayers
.a 14 are paying for the waste disposal program and we want 15 to ensure that they get what they pay for.
-As.of the 16 end of fiscal ye'ar 1990', the ratepayers contribution, 17-including interest-and money-owed-for fuel-burned -
18
=before the passage of the Act,-exceeds $7.5; billion 19-and
-the flow. of ratepayer money _
to.
that fund-
-20
_ continues.- Last vear,-$575 million was transferred to.
21 the DOE to fund-the disposal. of nuclear waste and to-22, date-the DOE expenses-in this program, this :l a t e s t-
.23 part of a
four decade effort,-
has approached
$3 24 billion.
We've not seen a-lot of progress to justify 25 that level of expenditure.
-]
NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.
20005 (202) 234-4433
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l But I
really don't want to~ dwell on 2L problems of the. past or necessarily imply that the 3
course of the past is being continued into the future.
4 As a
matter of
- fset, we're quite relieved that 5
Secretary Watkins and Director Bartlett have shown 6
interest, taken initiatives and we've seen some.better 7
progress in that program than we've had in years.
We 8
certainly' support their continued attention to making 9
improvements in the program.
10 Today, one subject I'd like to touch on is
~ 11 the licensing of the repository.
Many years ago.-I-12 think before I was involved with this, the Nuclear
~^
13 Waste Subcommittee appeared before the NRC and' made
~.
14 some suggestions of possible means of licensing that
'15 we thought would assist in the prompt. and efficient IG-
- conduct of licensing by both the DOE and the NRC.
We 17 urged measures to-advance the resolution of licensing i
18
. issues and:we're very pleased to see that NRC'and DOE 19
. have taken some steps to early resolution of some of-l 20
- those licensing. problems and issues.
1 21 One example is the -continuing series of l-22
- meetings ' that are being held between the NRC and DOE
' 23 staff to pursue.the individual issues-relating to b
24 licensing the repository.
These meetings, I think, I
25 allow the DOE and NRC staff to develop the means for n
Lj
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NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.
20005 1'
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1 best complying with the NRC's licensing requirements 2
and they also help the DOE in defining the goals that 3
they must achieve in developing the repository.
4 Another example,: I think, a good one _is.
S the NRC staff demonstration of its capability to 6
-conduct a repository performance assessment.
I think 7
this deme.natration helps identify practical problems 8_
that may arise during the actual assessment and it 9
focuses and improves the NRC. staff efficiency in 10 conducting future assessments.
I think that will 11 increase-the efficiency and effectiveness of the 12 repository licensing process.
-~
.13 One other measure that I wou'Id like to a
14 suggest - that you consider has-to do with' the actual 15 licensing process for the repository rather-than 'the 16
'two-step licensing process that-had.been used for 17 nuclear. operating plants is to replace that with a
- 18 s' ries of-smaller licensing steps.
I see some e
19 poteatial -advantages here.
- One, it would start' the 201 licensing process perhaps a - little earlier.
It woul'd~
21 allow for some specific issues to be resolved at-the
- 22 time that they may be ripe tr decision, and it would 3
'23
-focus the Department of Energy's attention on 24 potential problems early in the process, give them 25 more time to develop some solutions to these concerns.
i_ a l
NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.
20005 (202) 234-4433
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1 I believe because of those potential advantages, this
-2 approach deserves some consideration and 3
investigation.
4 We, of
- course, support your continued 5
pursuit of methods to resolve licensing issues-in a 6-timely manner and-identify-the standards that DOE will 7
-have to meet in its construction _ of the repository.
8 We think that early identification of licensing goals 9
_ will allow the DOE to develop plans to ' meet those 10 goals before the work is initiated.
Hopefully this 11 would-lead to a more cost efficient and effective 12 program.
13 We would offer the assistance of our al 14 Subcommittee-and the
. Electricity Committee, ou*
15 Washington office to continue discussing these matters 16 and help ~you pursue these mattera.
Our goal of a cost 17 efficient and well managed' nuclear _ waste-disposal-
- 18'
. program,- I think, are consistent and compatible with4 19 your directive to ensure that the waste disposal-
- 20 system is safe.
21 With that I'll - turn it -back - to Ashley.
22 Thank you.
23 MR.
BROWN:
Commissioner Lynn - Shishido-24 Topel of the Illinois Commerce Commission also has a 25 few words.
r1 t a NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.
20005 (202) 234-4433'
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16 I,
i il MS. SHISHIDO-TOPELi Thank you.
2 1 too would like to thank NARUC and-NRC 3
for taking the initiative to arrange this meeting.
4 What I'd like to do today is just briefly share with 6
you some of our beginning experiences in Illinois in 6
addressing the question of whether economic incentives 7
and safety regulation are compatible.
8 In Illinois,-as you know, we have a sister 9
agency called Illinois Department of Nuclear Safety, 10 and we have had the advantage of being able to start a 11 dialogue with this sister' agency to get--
an 12 understanding of how, in safety regulation's
- view, 13 safety regulation and to try-to see whether or not we
- i. -
14 could gain from a better understanding of how the 15-process works.
16 As you
- know, Illinois has 13 nuclear 17 plants, more than any state in the United States.
We:
~18
-fully agree that nuclear safety is of -utmost
,19 importance.
But as economic regulators, one of our 20
-goals is to ensure ef ficient and reliable service.
-21
-Although we: do.not believe that there's a necessary-4 2 2 --
incompatibility.
between; -economic efficiency =
and 23 safety, we believe that-there must b e' a much better 24 understanding of how safety is regulated before we can 25 come--to any conclusion as to what, in fact,--is true.
r3 m._J NEAL R.
GROSS-1323 Rhode Island Avenue, N.W.
l Washington, D.C.
20005 (202)'234-4433
I, 17 l~-
1 1 just would like to give you an idea of 2
the kind of dialogue we've had so far with IDNS.
Some 3
of the questions that we have posed or would like to 4
pose in our dialogues are the first one, which I 5
think is the most important
.,e, what baseline date 6
are needed and available to permit the meaningful 7
definition of normal or anfe plant operation.
8 In other
- wocds, are there standards 9
against which the effects of incentive schemes could 10 be predicted and/or measured?
For example, there 11 might be some standards or ration that safety 12 regulators would look at that one might be able to 13 check
- levels, the leveln of these ratioa to see 14 whether or not economic incentive schemes could have 15 an adverse effect on them.
If we really can't come up 16 with a meshing of the effects of economic incent'.ves 17 on the standards that state safety regulators look ut, 18 we may be in a situation where we may not be able to 19 conclude whether or not incentives could have an 20 adverse effect on safety.
So, I think this is a very 21 important first step.
22 Then we have even very basic questions 23 that we think are very important to answer, such as 24 what are SALp scores and how are they constructed, 25 what are they intended to measure, and how are they l
I l
NEAL R.
GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C.
20005 (202) 234-4433
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applied?
What we've come away with is a very, I
2 think, better appreciation for what they really are 3
intended to measure and the problems that one could 4
have if one tried to apply them as performance 5
standards.
6 Some other questions, is there a periodic 7
review by NHS of the utility's financial ability to 8
maintain their operating license?
What is the 9
relationship between a utility's financial situation 10 and the perceived ability to maintain safety?
And 11 finally, to what extent are nuclear plant operational 12 characteristics unique to given plants of a single 13 utility?
Is it possible that incentive schemes, if a 14 j
possibility, may need to be tailor made to each plant?
15 In sum, the Illinois Commerce Commission 16 believea that our experience with the IDNS shows that 17 there is a need for the NRC and the state PUCs to 18 begin and to continue a
similar interaction and 19 therefore we support this initial meeting.
20 MR. BROWN:
Thank you very much.
21 What we're hoping comes out of this 22 discussion are -- you've heard some of the concerna 23 that we have, some of the questions we have.
What 24 we'd like to do is out of this meeting in to build 25 some kind of joint relationship between NARUC and the
, m NEAL R.
GHOSS 1323 Rhode Island Avenue, N.W.
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20005 (202) 234-4433
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NRC in order that we can move on to both a-common 2
understanding of where each of us is coming from in 3
-terms of our Jurisdictional responsibilities, but also 4
Just some continuing dialogue, not only between the 5
very helpful dialogue that Commissioner Rogers has 6
with the Nuclear Issues Committee but also maybe some 7-staff to-staff dialogue on a more operational level so 8
we can get a
feel for what each of us is doing.
9 That's why there are a number of staff people here.
10' We have a 1 should have mentioned -- a permanent 11 staff subcommittee of Co3missioner Wilson's committee 12 that's working on those issues at:d they are, I'm sure,
- ~
13 more than interested in meeting with NRC staff on a 14 regular basis.
15 So, what I'd like to do at this point is 16 Just simply conclude our opening remarks and open it 17
-up for dialogue, but hopefully with some notion that 18!
we come out of this with some idea of some things that 19 might go on -in the
- future, whether they be joint 20' sessions, workshops on a regional or national level, 21' an annual meeting of this nature.
There are a lot of 22 ways we could find, mechanisms we can find to work 23 together, but we would like to hopefully come up with 24 some ability to have an ongoing dialogue.
'25 COMMISSIONER ROGERS:
Well, thank you very m,,
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.y.
I much.
I'm sure that we will have topics that we'd 2
like to take up.
3 Commissioner Curtiss, you have a couple of 4
things that you'd like to --
S COMMISSIONER CURTISS:
- Yes, I'll start 6
first.
7 Let me first extend my welcome to you as 8
well for coming here for what at least is the first 9
meeting since I've been a
Commissioners with the 10 Agency.
The range of topics that we've discussed here 11 this morning--and a
couple -more that I'll
-have 12 questions about. that we didn't-get
- into,
.a test I
13 think to the need to continue a close and dpen channel 0
14 of communication.
Commissioner Rogers, of' course, has 15 taken the lead in that regard in the past ' and done a 16 most effective job not-just in communicating with you' 17 but in communicating with his colleagues here on the 18' Commission, keeping.us apprised of:what your concerns
-19 and interests are and. regularly debriefs the rest of 20' us on the results of his meetings with you.
It's been 21 very valuable for me and I think the Commission as a 22 whole.
23 In fact, this is the kind of thing that in 24 my view would be a helpful thing to do on a regular 25 basis in addition to the meetings with the staff.
We R
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1-do have a number of periodic meetings that we hold on 2
an annual or a semi-annual basis end this strikes me 3
.a s an example of one that would be very valuable, at 4
least for us and-I hope for you to do when you're in 5
town in'your yearly meetings.
6
_You've covered a lot of ground and, as I 7
- say, I have a couple of areas that I'd like to ask 8
about and open a dialogue on as well.
The Commission 9
on the economic performance incentive issue, which you I
10 spoke to thia morning and which is one of the formal
'll topics or the
- agenda, first really undertook a
12 detailed evaluation of that issue in 1989 and 1990 13 with it coming to a head with-the publication of a
.. ~
14 proposed policy statement setting forth some thoughts 15 and questions, I
- guess, on o u r-behalf as to how 16 economic performance incentives are employed at the
'17 state level and in _ particular what impact, if-any,
-18 they have on. the - Commission's intercat _in ensuring 19-that'the facilities are operated safely.-
20-I think we all understand, and you've 21 alluded to it here this morning, that there is a
22 significant degree of overlap.
Although we each are 23 respective, separate and independent institutions, 24 there's a good deal of overlap - between the economic 25 issues that fall squarely within your jurisdiction and ra a _;
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1 the safety issues that fall squarely within ours and
'2 in my view we need to not just identify the issues or 3
concerns that we as an Agency have, but we need to 4
understand from your perspective in an area where 5
we' e not the experts, quite frankly, the kinds of 6
concerns and issues that come across your respective 7
desks so that we can fashion an approach
- that, 8
Commissioner Brown, I think you properly alluded to, 9
one that is a
jointly developed approach that's 10 sensitive to the interests of both sides of this 11 debate.
12 Let me pick up first on the question of.
13 economic performance incentives.
We've, in cur policy 14 statement, proposed policy statement, gotten a good
-15
. deal of comment.
In fact, I had an opportunity to 16 review the comments that have been submitted, about an
-17 inch thick and they've come from
-a variety of 18 different perspectives.
The utilities,- of course, 19 have had a great interest in this.
The official 20 organizations that represent them have commented.
21 Environmental groups, s tate. PUCs, 'NARUC, of course, 22-the ICC has commented, IDNS.
It's, I've found, a very 23 interesting set of comments just to sit down and 24 browse through.
There are a
lot of different 25 perspectives that come out of that and if you had the ud NEAL R.
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1 opportunity,- either you or your staff, to take a look i
2-at those, I thought they shed a lot of light on what 3
la an important issue for us that we're currently 4
considering.
5 My sense was that we've got a pretty good 6
- handle, from our perspective, on some of the key 7-things that trouble us, the use of sharp thresholds 8
for rewards or penalties.
You alluded to that in.your 9
remarks.
The incentives that are based on a.very 10 short. period of time, we also specifically noted in 11 the policy statement.
We commented about the use of 12 SALP' scores and I'll be anxious to hear your
- ~
13 perspective on that because that is a particular issue i
14 that - we' ve seen in some incentive arrangements.
I 15 know.there are a - range of. views on the propriety of 16 using SALP
- scores, which is one of the principal
-17I mechanisms that we-use for assessing safety 18 performance of-the licensees.
19 If you have any comments -
on those 20 particular
- issues, I'd be anxious to hear. your 21 perspective - on what I think -are ' the major questions 22 that have. arisen.
23
~I also noted in reviewing - the.. comments 24 that there were some--important nuances that I had not 25 fully appreciated that came out in the comments and j
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I'd just offer up for your consideration.
Take one es 2
an example.
We, as an Agency over the past several 3
years, have placed an increased emphaels on. utility 4-self 4dentification of problems.
That's manifested 5
itself in the formal things like utility root cause 6
programs, what we call self-SALPs, licensee conducted 1
7 systematic _ assessennt of their performance, utility.
8
_ conducted evaluations of performance of safety 9
systems.
what we call safety system functional.
10 inspections, and a whole range of things that I think 11 you've seen in the past several years and will 12 continue to see f all in the_ category of what we call 13 self-evaluation.
14 In the comments that have been submitted 15 and in my opportunity to visit the plants around the 16
- country, I
have noted a - particular concern that 1 17 think_we need to be cognizant'of.
.The concern roughly 18
- summarized, I guess, is this.
They_'ve expressed it to 19 us - over - the years in-the context of our enforcement 3
- 20 program.
When we go in,- we as a ut il,i ty - go in and 21
_ identify ~a particular problem or conduct's root cause I
evaluation, we need to be-encouraged to do-that..
We 22 23 obviously like to see licensee's identify the problems 24 themselves and, in fact,~in the enforcement policy of 25 the Agency we give licensees credit if they self-L NEAL R.
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-~
1 identify.
That is a mitigating factor that we use to 2
determine what enforcement action is taken.
3 I guess the concern that's arison, and I'd 4
appreciate your comment on this or the other issues 5
that I've raised, is the need to strike a balance 6
between encouraging that self-identification of 7
problems und what is, I guess, described as a down 8
side, that is to say once problems are flushed out in 9
that very visible manner and self-identified, they l
10 find their way into prudency reviews with the 11 disincentive from that perspective for the licensee to 12 be aggressive in self-identifying problems.
prudency
~
13 reviews are obviously something that's squarely within 14 your bailiwick and not something that we're very 15 expert on.
16 Ilu t I offer that up just for perhaps on 17 opening opportunity to discuss because it is an issue s
18 that I've heurd gcing around the country, the tension 19 between our encouragement of the licensees to self-20 identify the problems, and the potential down side 21 that they 'see from a prudency standpoint when that 22 self-identification gets plugged into a review of what 23 is appropriate from a rate standpoint.
24 Any comments?
25 Mil. BI10WN:
- Well, if I.
could open up on i
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1 your last point because that is a very difficult 2
balance to strike.
In
- fact, in our Nuclear 3
Electricity Committee yesterday, we had a
little 4
discussion on that very lasue only in regard to INPO,
'S not in regard to the NRC.
6 I think there's a general recognition on 7-the part of state regulators that you don't want to--
4 8
you want to encourage people to identify problems and 9
try to work them out.
To the extent to wi.ich you -an 10.
ovoid any penalties for doing t;at, you certainly want 11 to do that.
I guess -the counterbalance fron-a 12 regulatory point of view is the question of who's 13 going to pay to fix it and why did-it go wrong.
And 14 what we often end up having to decide is he question 15 of-whether it's-appropriate for consumers.'to-pay for, 16
-and it may-or it may - not be, but that's w h a t t h e--
17 prudence review is-designed to find out.
18 There is 'a bit of a-self-rectification-19 aspect to _that whole thing because~ if problems are 20 allowed to
- fester, if they're
-not appropriately 21-identified-and not rectified, the likelihoodL is the 22 economic consequences of not-doing so are going to - be 23 far greater in the long run than the immediate-fix.
24:
That is certainly an area though that I think needs to 25 be -- would lend itself very well to being addressed
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1 in the kind of
- dialogue, future dialogue that we 2
t a ll:e d about because those are ry difficult 3
questions inv
'ng appropriate identification of 4
problems i i ed off against the equity z
5 considerations of who ought to pay for the fixes.
6 But with that, let me see if Commissioner 7
Wilson --
8 MR. WILSON:
Yes.
I think our discussion 9
in the Committee meeting yesterday, and Ashley made
}
10 the point, the whistle blower statute is one that 11 recognizes there's great publu, benefit to having a 12 policy that allows disclosure of problems without 13 havin6:
the attendant consequences that would t
.~
14 l
discourage others in the future from doing the same 16 sort of thing.
I think most state statutes and I 10 think tort law in general recognizer that you for S
l?
instance, you can't -- where you correct a dangerous 18 condition subsequent to an accident, the evidenco of 19 that correction can't be used to demonstrate 20 negligence because otherwise it would discourage 21 people from correcting what would otherwise be a
22 dungerous condition.
23 So, I think we realize that this is a very 24 delicate area.
You don't want to discourage self-25 evaluation and correction of problems that come to the r-]
t J NEAL H.
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1 attention of the utility through their own efforts, 2
but the equitable consideration of who's going to pay 3
for that is something that is almost undecideble 4
except in the specific instance.
6 1
think the open discussion though of 6
those two countervailing policies is very useful 7
because it makes you sensitive and hopefully helps you 8
in your ability to discriminate in the situations 9
where some action may need to be taken and othera 10 where you simply recognize that this self-evaluation 11 is a
good thing and it should be encouraged and 12 fostered.
13 MR.
BROWN One other thing that makes
'~
14 this even more complicated and that is that the 15 prudence evaluations or prudence disallowances that 16 may result from that, I don't think state regulators 17 generally view those an penalties.
I know I don't and 18
'I've been involved in some of those proceedings.
19 That's not really the question because there's nothing 20 punitive about it.
It's not designed to do that.
21 We see our role as regulating what are 22 essentially monopoly marketplaces and trying to 23 simulate what a competitive market would otherwise 24 have done.
So, the competitive market will extract 25 its toll or give its
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I performance, luck and a whole varlety of other things 2
but it's not a question of being punitive.
You know, 3
Ford losing money on the Edsel was not because God 4
wanted to pt.nish the Ford Motor Company.
That's the 5
way the market functioned.
6 So, I don't think when we look at prudence 7
evaluations, I don't think we're looking at it from a 0
mind not that somebody needs to be penalized for 9
having done something wrong.
There may be some 10 egregious conduct and occasionally you, as well as us, 11 have encountered that.
But generally speaking, that's 12 not the issue.
So, it's not for example, the 13 prudence disallowance ic not in the same category as a 14 fine that you might levy based on some misbehavior or 16 negligence or whatever.
It is a little different.
IG MS.
SilI SilI DO-70p E L :
I suppose also if 17 we're doing our job, the prudence disallowance would 18 occur whether or not the company would identify 19 themselves.
So, given that that would be a
20 disallowance anyway, your activity actually isn't an 21 incentive to self-identify.
22 COMMISSIONER CURTISS:
I do think we'll--
23 as I alluded tu, we have seen over the past several 24 years recently, three or 'our years, this increased 25 emphasis on self-identification.
We
- t.. a o have iE
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programs underway now and the one that comes to mind 2
is what we call the design basis reconstitution 3
program.
Some of the plants that were built in the 4
early years lost track either because they didn't get 5
the documents or didn't track the modifications of the 6
design basin of the plants.
7 You'll find, as you've probably certainly 8
heard, that with virtually every nuclear utility, save 9
perhaps the recently licensed ones, they have a design 10 basis reconstitution program of some nature and, of 11 course, that by definition is going to be a program 12 that turns up problems.
We very much want to see that 13 happen.
I think as an Agency we want to encourage 14 that and have sought to encourage that in how wo 15 approach the problems that are flushed up in that kind 10 of process.
17 So, I guess my point here is that we have 18 seen recently and I think will see to an increased 19 extent this se l f-ident i fi cat i on issue.
Subject to 20 talking with my colleagues here, I'd like to see it as 21 one of the issues that you all take a look at in 22 working with our staff perhaps and see if we can't 23 come up with an approach that balances the various 24 interests that we've discussed.
25 As I
- said, our enforcement policy p._.
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~~
l represents one stab at trying to do that in an 2
enforcement context.
It might be useful for our 3
people to provide that to you and trke a look at how 4
we've taken on approach to mitigation in that context.
5 As yo" were talking, it also occurred to 6
se a second example of the same kind of situation.
7 We've got what we call licensee event reports that we 8
require the utilities to submit.
There's a good deal 9
of flexibility in the regulations in terms of what is 10 submitted.
You'll find some licenseem that are very 11 conservative and submit a lot of LERs and you Just 12 look at the graph and they'll have a lot of LERs and 13 one might conclude that therefore they have a lot of 14 problems.
There are other utilities that are much 15 less aggressive in that and report a fewer number of 10 Leks.
17 If you compare the two, you'd conclude, 1 18 guess, that utility A that reported a lot has a lot of 19
- problems, rather than tnking what we think is an 20 aggressive and positive approach to turning up issues 21 and perhaps erring on the side of reporting those 22 issues.
23 1
have heard on
- occasion, although-it 24 hasn't arisen in the context of NARUC issues. it's 25 arisen oddly enough in the context of the insurance
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reviews that are undertaken, that the focus on the LEH 2
numbers has actually created perhaps a disincentive to 3
report those LERs in a continuing and aggressive way 4
with the insurers looking at an issue like that.
5 There are those who have commented that that perhaps 6
provides a disincentive for them to be as aggressive 7
as they might otherwise be.
8 I
haven't heard that arising in the 9
context of issues that state commissioners have 10 undertaken, but that's the kind of issue that I think 11 it would be helpful to discuss between the two bodies.
12 I want to just shift genre quickly.
There 13 are two or three other areas I wanted to talk about.
14 On the waste
- issues, I
share a
lo of your i
16 frustration.
1 must say I've found the opportunity to 16 work with Hon callen over my years here and before 17 that down on the Hill to be most useful.
Ile's 18 provided a very positive prospective and now that he's 19 here in Washington full-ttae hopefully a continued 20 balanced perspective from insight the beltway.
You 21 commented on --
22 MR. WILSON:
We worry about that.
23 COMMISSIONER CURTISS:
There's a risk of 24 that malady overtaking people, 25
,\\
couple of comments though on that.
You r q c;
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1 mentioned the possibility of a
phased licensing
'2-
- approach, taking these issues as they arise in a
3 seriatim way.
Are there any issues that occur to you 4
now or that you see on the horizon that would lend 5
themselves to that kind of treatment?
j G
MR. Wil. SON :
Where's Hon?
Not offhand, 7
COMMISSIONER CURTISS:
- Okay, I'd be 8
interested if you as the program moves forward--
9 obviously we're at en early stage with site 10 characterization now just hopefully on the near 11 horizon, -i f there are issues that come up that you 12 think would lend themselves to discreet treatment in 13 advance in the spirit of resolving these issues with
... ~
14 finality early in the process, I think we'd certainly 15 be anxious to hear your suggestions in that regard.
16 MR. WILSON:
Our concern clear arises in
-17 part from the knowledge that the DOE has not been 18 required to seek a commercial license.
They are not 19 necessarily familier with the licensing process.
The 20 repository, you all have not licensed a-repository of 21 this nature either.
That we do some resolution of 4
22 issues at' en early stage before both money, time and 23 effort is committed.
We don't want to get down the 24-road five or-seven years and you look-- back and say, 25 "Something you did that in that first six months has L--
.J 2.
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34 I
basically tainted the whole process," because it seems 2
to me a much more efficient way to deal with it and 3
for us to ensure from our point of view that the 4
money, massive amounts of money that are being spent 6
are being spent wisely and that the trail we're going 6
down is the right trail to go down.
That's sort of a 7
generic concern that it seems that if you do this and, 8
as you say, sertatim where that's appropriate, that we 9
might be able to avoid that consequently.
10 COMMISSIONER CURTISS:
Okay.
One of --
11 COMMISSIONEH HOGERS:
Just to say on 12 that
~
13 COMMISSIONEH CURTISS:
Go ahead. Ken.
14 COMMISSIONER H00ERS:
for a moment that 15 in their presentations to um of ovr sinff, I think the 16 Commissioners have repeatedly arked the staff to be 17
- very, very uensitive to any fundamental flaws that 18 might be turned up as early as possible and to look 19 and encourrge the DOE to be searching for the show 20 stopper as early as possible and not to be proceeding 21 along in some way, some ver y systematic way that 22 doesn't address a potential killer issue early even 23 though it's out there.
24 So, we've constantly raised that issue 25 each time that our staff has met with us to try to do rt
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~
l everything that they can to flush anything like that 2
up to the surface for n rapid identification.
3 MH.
W il, SON :
Yes.
Our suggestion in 4
certainly consistent with that and the discussion we 5
would like to promote is whether some formalization of 0
that would provide a little more rigor to DOE's self-7 assessment and your examination of where they stand in 8
different singen of that process.
We just think 9
that's worth discussing us a possibility.
There may 10 be drawbacks te it, but I do see some benefits to 11 that.
12 COMMISSIONER HEMICK:
Jim, can i jump in 13 on the discussion --
14 COMMISSIONER CURTISS:
Sure.
15 COMMISS10NEH HEMICK t
-- because it's one 16 I won going to address.
As a rntepnyer, like so anny 17 other rntepayers, I'm very concerned too that we have 18 not mnde much progress in the high-level waste 19 repository.
I very much favor a
multiple step 20 approach.
21 Before becoming a commissioner, I served 22 on.on advisory committee to the Commission at a time 1
23 when it provided advise on the repository.
)
24 Fortunntely, DOE is one of the most experienced 25 ngencies in conducting operational rendiness reviews, r.. )
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1 along the process of developing some project.
So, as
~
2 a member of that advisory committee, I pushed our j
3 staff to be thinking about DOE is considering 4
operational readiness reviews et different stages 5
along the line, pushing our staff to be thinking about i
G when those readiness reviews are done what is it at.
}
7 that time we would like to see demonstrated so we're 8
satisfied at that point.
9 My hope was that there would be some way 10 that perhaps as an Agency we could sign off on those 11 safety issues at that
- point, give people an 12 opportunity if they differed and I'm not talking 13 about hearings, but if construction workers felt that
)
14 there were concerns and so forth that those were 15 addressed along the way_.and we could sign off, rather
(
16
'than eight or: ten or 12 years down the line and then l-17-raising those issues at a time,.perhaps, we can not.go 18 back_and-demonstrate the safety and learning from our 1
19
_past experiences.
20 So, but I say we are f e.* t u n a t e - t h a t - i n 21 this case the Department of Energy has a
lot of 22 experience conducting operational readiness reviews and what we need to do ' is combine the regulatory 24
_ process with that. -
I don't know wha't the legal q
25-problems are with it.
n r 7,.
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]=
1 I'm happy to say that our now Part 52 for t-2 standard plants, apparently that is built in.
I'd 3
like to see that in the licensing of the repository 4
because it's going to be a long process.
There are d
5 going to be many issues.
The sooner we address them, i
6 the sooner we can sign-off to satisfy and so forth the 7
better it will be, so I etrongly support what you're 8
suggesting.
9 COMMISSIONER CURTISS:
Let me continue on s
10 the - waste issue.-
I had two questions, Commissioner i
11
. Wilson, on the 1 guess on the storage front.
One 12 of the unfortunate outgrowths-of the -delay in the 13 program, of course,. is that the utilities, the reactor 14 licensees, are faced with the question of what to do 15-with the waste that continues t o acc.umula t e, spent 10 nuclear fuel.
And as we've all beer.
Ground the 17 country.- of course. - we've seen the spent fuel pools 18-
' filled up and re-racked and rods consolidated and. dry 19 cask storage developed and train shipment in some 20 limited respects, i
21 From NARUC's perspective and-focusing here 22 on the MRS issue, I really have-two questions.. Number 23 one,-
does NARUC have a
position with respect - t o-24' whether any funds ought-to be flowing. back to the 25
' utilities, given the ten or 12 year delay in the NEAL R.
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l program that we've seen to date, to provide for the 2
expenses associated with increased storage?
3 And number two, do you have an official 4
position on the question of whether and, if so, how to 5
proceed with an MRS facility as a formal part of the 6
program?
7 MR, WILSON:
Senator Bryan fhom Nevada had 8 l filed a
legislation I
believe last session which 9
addressed crediting utilities for expenditures for on-10 site storage of snent fuel from the payments they 11 would otherwise make into the nuclear waste fund, and 12 our committee and NARUC took a position that at this
~
13 time we felt that that would be inappropriate.
The 14 concern I have is if you do that the DOE hen it does 15 its assessment of the amount of funds that' are needed 16 for that program has the ability to increase the 17 per/KWH assessment on nuclear generated electricity.
18 So, you really don't gain much.
If you 10 spend monies out of the fund for on-site storage, at a 20 later date they're going to have to increar..
cho 21 collection in order to make that up to pay for the 22 total program, and at best we saw simply a shifting of 23 monies around the country because they would go to 24 different utilities than were paying the money in and 25 we saw some intergenerational problems there that NEAL R.
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tomorrow's ratepayers would be paying more than 2
perhaps their fair share in that shift around the 3
country.
So, our position w5s that at this point that 4
is not appropriate.
It's the kind of issue, though, 5
that we would reexamine and monitor depending on what G
the state of the permanent r oository program is.
7 As to the MRS, I
know that there's a
8 proposal in the Adminiitration's enerc;> package that 9
was sent to Congrass that would decouple the MRS from 10 the start of the permanent repository.
We have not 11 taken a position on that, although we understand the 12 concerns that many people have which is that licensing 13 and MRS or construction of MRS may be tantamount to 14 creating a permanent repository, so there would be 15 some henitency on some states' parts to even consider 16 that because they would feel that the end result would 17 be
- that, since no progress is being made on the 18 permanent site, that any temporary site would be the 19 temporary site.
I know there are limits on the amount 20 that could be stored in
- that, and so that any 21 alleviate some of those concerne.
We will be looking 22 at that issue and I hope we will take a position on 23 that.
24 COMMISSIONER CllRTISS:
Okay.
1,e t me make 25
,j u s t one observation on the waste issue.
We do have 1
L NEAl, R. GROSS 1323 Rhode Island Avenue, N.W.
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I what I
think is an unfortunate situation with 2
utilities around the country to en incrensing extent 3
becoming waste manngement companies.
If you just go 4
oround and look at whnt's hnppening, and I ' n.
sure 5
you've had the opportunity in your respective states 6
to see this on the spent fuel front, the options that 7
I alluded to earlier are being pursued and pursued 8
aggrescively by utilities, some of which quite frankly 9
are going to reach a point where their options run 10 out, either beenune they've re-rnched to the extent 11 permissible or they have limited space on the site for 12 dry cask atorage or what-hnve-you.
13 I
will any that I
think we do have 14 somewhat of an opportunity.'
the low-level wnste 15 front to avoid that nituation.
Of course, the states 10 are responsible for developing the low-level waste 17 alten and Illinois in particular is one of the host 18 states that'n been designated under the compnet 19 process.
I hope we ace continued progress on the 20 compacting legislation and development of siten.
21 I have been a nkeptic in the past at lenat 22 of the notion that we ought to na nn agency nuthorize 23 continued and extended on-site storage of low-level 24 waste beyond the dates established in the Act for some 25 of the very same reasons that we've talked about here r -
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~
l in the high-level waste arena.
We currently authorize 2
storage for a period of up to five years and we're 3
taking a look at the question of whether to extend 4
that storage beyond 1996.
As I say, I've got my own 5
personal views about the wisdom of doing that and of 6
course then expanding the responsibility of licensees 7
to become low-level waste disposal managers.
8 There are two questions that we didn't 9
touch on that don't fall squarely within this agency's 10 Jurisdiction, but I
have an interest from the 11 standpoint of understanding your perspective and what 12 you're doing.
The
- first, actually, Commissioner 13 Remick's comments alluded to.
The sign-as-ycu-go 14 process is something that we've incorporated in Part 15 62 and after much criticism for the way we've licensed 10 plants in the past with the two step process that we 17 talked about and with t'<
issues arising very late in 18 the process you no doubt appreciate the kind of 19 criticism that we've gotten because I trust people 20 have been to talk to you about the notion of 21 incorporating investments like a nuclear plant into 22 the rate base and the potential that an investment, 23 significant as it is, would wind up not getting 24 incorporated into the rate base.
25-Are you taking a look at the notion of r,
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~~
l n.ome sort of rol.ing prudency review as a mechanism 2
for trying to respond to that concern at the state 3
level?
4 MR. WILSON:
Ashley, did you plant that 6
question?
6 COMMISSIONER CURTISS:
No, he didn't, but 7
I see a lot of smiles there.
8 MR. BROWN:
There has been a dialogue with 9
Edison Electric Institute.
We had five commissioners, 10 otherwise known as pigeons, who've been meeting with 11 six CEOs and came up with a draft discussion paper on 12 that issue.
What it won designed to do
- actually,
~
13 it is a rolling prudence regime and I'll describe it 14 in a second, but you need to put it in context.
It IS assumes that states would have gone through an 16 integrated resource planning process which would have 17 determined what the "least cost" option is, and that 18 could be any number of things.
What we did is assumed 19 all that had gone on and the determination of the 20 Commission and the utility was that the least cost 21 option was to build a base load unit which may or may 22 not be a nuclear unit.
23 So, the rolling prudence regime that's 24 incorporated there is to take a look at the question 25 of the ongoing construction occavities at various
..a l
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intervals in time and to essentially suy, okay, what 2
you have spent so far we will allow you to recover.
3 That doesn't say when you're going to recover it, 4
'se that's another issue, but it simply says you 5
will be allowed to recover it.
6 One of the interesting things about it, 7
- though, I mean, it actually goes to an earlier 8
point you made is the utility has an nbsolute 9
obligation to disclose any variances from its plans.
10 And if it doesn't, it does run the risk of going back 11 and reopening comething that any have been decided--
12 that is, if it does fail to disclose something it knew 13 or should have known about n variance or problems of m
14 various kinds.
16 There has been a lut of discussion and 16 yesterday what we've done is we have agreed on a 17 discussion draf t to be floated.
Neither the EEI folks 18 nor the NARUC folks have signed-off on it 19 suSetantively, only on agreement to float it.
What we 20 heard yesterday was considerable feed-back on various.
21 for the most part yesterday, 1 guess, criticisms of
?,2 the document that was floateci consume groups have 23 some reservations about a nunicer of aspects of it.
24 some related to shifting of risk from shareholders to 20 ratepnyers and when that ought to occur.
Some of the y
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other concerns relate to,
- well, if you're going to 2
reduce risk then what ought to be the appropriate 3
adjustment of the rate of return to reflect that and a 4
lot of technical concerns about it.
5 The document itself is going to continue G
to be out there.
We made no effort to obtain NARUC's 7
blessing at this point because we need more input.
8 The five commissioners who were there, much as we like 9
to think we're the fount of all wisdom, recognize that 10 our colleagues on the committee as well as others may 11 have something to say about it that we certainly want 12 to hear and I think in many cases they've influenced 13 us about some changes that may need to be made in the 14 document.
16
- but, that concept is certainly very much 16 being discussed.
Where it comes out, I don't know, 17 because there are so many issues and it's pretty 18 complicated in terms of what those issues are.
I 19 should say that we didn't discuss it specifienlly in 20 regard to nuclear power plants, but it certainly would 21 be applicable.
22 COMMISSIONER CURTISS:
Generic issue.
23 MR. BROWN:
Hight.
24 MR.
W I I.S O N :
I would say that it's not 25 materially different from what we were just talking 7_.. )
L _.)
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1
- about, licensing in discrete stages, and we thought 2
that this was the appropriate time to begin 3
discussions of that kind of process before we enter 4
into -- before we face a possibility of entering into 6
a substantial construction phase in the utility G
industry.
7 As Ashley said, one really important thing 8
to remember with this is it assumes you've gone 9
through all the decision-making process and are at the 10 point where you are facing the construction of a large 11 base lond power plant, that whatever decision-making 12 is required to reach that point has been reached.
13 Once you get there, what do you do then?
This was 14 designed to address some of the problems that have 15 arisen in the last ten, 15 years in large bane load 10 plants, how they come into rate base and go on-line 17 and delays that are sometimes experienced.
18 COMMISSIONER CURTISS:
I'll look forward 19 to seeing if you can reach a
consensus.
That's 20 obviously an issue that, as I say, doesn't squarely 21 fall within our jurisdiction but we appreciate.
22 Because, on the safety side we've had basically the 23 same issue raised.
How do you ensure that the 24 questions don't all arise just prior to operation with 25 no assurance that what you've done up to that point is r3
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l in fact acceptable?
Commissioner Hemick properly 2
noted that Part 52 reficcts a concept that may be 3
similar at least in its essence to what you're talking 4
about here.
5 MH. BROWN:
The other thing, if 1 might, 6
Commissioner
- Curtiss, that's important is that 7
document reflects only a
plant being built by a
8 utility for rate base.
Obviously, as many states 9
turn, and many have, and obviously it's a direction 10 that the FEHC has gone in, towards a more competitive 11 bulk power market, it may well be that there will be 12 i significant nuclear construction that in not utility 13 plant for rate base.
And if that's the case, this 14 document doesn't even begin to address that question.
15 COMMISSIONER CtlHTISS:
Good point.
16 One final question I guess I had, then, 17 it's again not on the formal agenc.c but I'd be 8
18 interested particularly in your t'. ewe, Commissioner 19 Brown, and any comments that the others might have.
20 We've over the years dealt here as an agency with how 21 we treat INPO reports and what sort of approach we 22 should take when we get them, whether we ehould look 23 at them, how we should treat them in the context of 24 the regulatory process here at the Agency.
I gather 25 you've had some thoughts on that in the past and in y _
l
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lI ~
1 the spirit of at least opening the channel of
~
2 communication and ensuring that we understand what 3
your views are, would you take a minute or two to lay 4
them out?
5 MH. BROWN:
Do you want my views from me 6
or do you want them as reported by Ralph Neder?
7 First of all, let me just say that there 8
is, as there was in our discussion yesterday, there's 9
no shortage of diversity of opinion within NARUC about 10 INPO reports and how they ought to be treated, and 11 they range from strong bias towards openness to n 12 strong bias towards protecting confidentiality and 13 there are a
range of opinions on the subject.
14 Actually, now that I remember it. Commissioner Rogers 15 was there when I gave the speech.
10 But I
guess the concern by bias is 17 townrds openness, but it's in a limited regnrd.
It's 18 not towards -- it's not that everything INPO has ought 19 to immediately be made to the public.
- Rather, it's 20 from the perspective that
- INp0, given what its 21 historical mission
- was, I
think it's served that 22 purpose very well.
23 I think clearly the kind of peer pressure 24 that INpo has exerted on utilities to improve the 25 performance of nuclear power plants and to essentially n
I j
NEAl, R.
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I force the industry into a dialogue with itself has 2
been very, very helpful, and part of INPO's ability to 3
do that has been the fact that there is not a complete 4
- absence, I
- guess, of retribution, but there is a
5 substantial diminution of the likelihood of 6
retribution because of identification of problems.
7 There's a sort of collegial, although ntill critical, 8
kind of relationship between the reviewers and the 9
plant under review and I think that that has actually 10 served historically a very, very useful purposo.
11 The question
.; I had, t h e r e ' s, sort of 12 two kinds of information.
One is the kind of 13 information that would require a part icular employee, 14 Dart Simpson when he works at a nuclear plant, to talk 10 honently.
That sort of thing, there may well be a 10 legitimate public policy reason for maintaining 17 confidentiality and I don't dispute that.
I didn't 18 raise that as an issue.
19 On the other hand, there's also generic 20 data that INPO collects, and I'm speaking for myself 21 and not NARUC because there are folks who would not 22 necessarily agree with this position.
- But, there's 23 generic information that would be useful in 24 disseminating for couple different purposes.
One in 26 for economic regulatory purposes evaluating m
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relative performance of power plants, for example--
2 generic data on the performance of IlWRs and PWRs that 3
I can't see what harm there would be in disclosing l
i 4
that kind of inform 0' an.
It shouldn't be 5
confidential.
State regulators, actually Mike 6
Wilson and I were talking about this last night--
7 NARUC could collectively get that information and 8
provide it, and we may even do that.
Ilu t where INp0 9
collects generic data, I don't understand the reason 10 to keep that secret.
.1 The second question that relates to this 12 isnue
- well, the first issue is discriminating 13 between information which legitimately there are 14 legitimate public policy reasons why it ought to be 15 confidential.
I do not and have never made the claim 10 that everything INp0 b'si ought to be public, because I 17 recognize there are legitimate areas that ought not to 18 bo, but I think there are areas where INPO could be 19 more open, could be more public and perhaps ought to 20 be.
21 The second issue was the question of the 22 I
industry itself evaluating where it is strategically 23 in terms of its own history, because I think it's an 24 important strategic question, and how INPO fits into 25 it is an importart sub-issue.
And that is, is the NEAL H. GROSS l
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)
li- ~
l industry in a position, particularly as we look at 2
environmental prcblems associated with fossil fuel 3
plants and obvious economic ramifi:ations of other 4
fuel
- sources, economic and geopolitical 5
considerations, the industry I
think has an 6
opportunity to try to revive itself.
And the 7
- question, as it does
- that, I
think it needs 8
strate,tically to ask itself how does it build public 9
confidence.
Well, one of the ways it does that is to 10 deal with the issue we've been talking about, which is 11 to resolve the waste issue, but another issue is to 12 open it up to public accountability and scrutiny both 13 to you and to un and as well as using its own 14 institutions such as INPO to try t o do t hei 16 I'm not suggesting and I would:be -- and I 10 think it would be inappropriate for INPO to become a 17 public relatione tool for the industry.
That would be 18 absolutely the wrong thing to do.
But in terms of 19 dispassionately providing generic information, I think 20 that it would be helpful for the industry to position 21 itself strategically to revive public confidence in 22 the industry, as one of many things, not the only 23 thing.
INPO is not the cause of loss of public 24 confidence, but it could be used in a way
'o build 25 that by providing an informational service to the
, a NEAL R.
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- public, i
2 HR. TAYLOR:
Excuse me.
Do you have any 3
examples of the kind of information that you have in 4
mind in that category, because of course INPO does 6
release some generic information about overall G
performance indicators of nuclear power plants in the 7
United States.
What.would be an example of something 8
that?s generic that you think might be released that 9
is being held closely now?
10 MR. BROWN:
Well -the issue came up and I 11 didn't want to get into a-lot of details - on it, 12 because there were some miscommunications too, but the
~
13 issue came up in Ohio in regard to performance c..a 14 standards that were agreed upon by the company and 15 interveners before the _ commission. in regard to the 10 perry,' Davis-Besse, and Beaver Valley plants. 'Without 17-going into a whole lot of detail of what they were, 18 they would have required segregatior af data into pWR,-
19 BWR, and then the removal of some of the plants, not-I 20 by name but by performance.
I think-it was 21 forgot what the exact -- but, basically, say,_the five.
22 worst performers were to_be removed from the equation 23 and then the plants were to be evaluated on the basis 24 of average performance in those ' categories absent the i
26 five worst performers.
We could not get that kind of 7.-
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information from INPO.
2 Now, what happened over time is INPO later 3
said, and this is where the miscommunications came in, 4
"Well, if you want it, your companies under your 5
jurisdiction have it, so you could subpoenn it from 6
them or ask for it from them," which meant in essence 7
that INPO was saying you can get that information in 8
another way.
But then it gets complicated, because 9
that data would have required some manipulation, the 10 kind of manipulation I was talking about.
I don't 11 mean that in e perverse way.
I mean, you would have 12 had to have done some calculations.
And then it wot 13 also be a question about how systematically it was 14 collected for evidentiary purposes and you get into 15 those kinds of questions.
16
- But, in that regard, we didn't want the 17 names of any plants.
We didn't care about it.
We did 18 need to know whether they were PWH of BWH.
The five 19 worst performers had to be removed, but we didn't care 20 who they were.
That wasn't relevant to our concern.
21 We didn't want any names.
What INPO's reason for 22 making that confidential so, we could have gotten 23 the raw data from our companies, although 24 interestingly I'm not sure the company had the same 25 impression of the way INPO viewed the information as 4
r
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1 INPO had.
2
- Now, there are a
number of
- states, I
3 should say, that get INPO information.
I know that 4
the Florida Commission hns it.
Some of them use it S
and uue it in various ways.
The Maryland Commission I 6
know has received it and used it in cases, but keeps 7
it in camera.
The NARUC yesterday -- the electricity 8
committee, I
should sny, passed a resolution which 9
indicated we would Icavo it up to the discretion of 10 the states as to how they used INPO information.
That 11 was the unanimous position of the committee and all cf 12 us felt very comfort 9ble with that, but there are some 13 policy issues.
14 I gueso the questson that i eas trying to 15 raise was that the induntry needt, to strategically 16 decide where it wants to position itself and how it 17 wants to use the various institutions it hna to 18 position itself.
19 One of my colleagues any want to add 20 something.
21 MR. WILSON:
I think -in Floride when we 22 deal with it it's when it comen up in specific cases 23 where there's been a request for the information, 24 either by interveners or our staff, and we've simply 25 dealt with it in that-context.
R 1
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COMMISSIONER CURTISS:
Well, I appreciate 2
your perspective on that.
That's really all I had, 3
but let me again welcome you to the Commission here 4
and I
look ferward to expanding our channels of 5
communication both at this level and at the staff 6
- level, hopefully look forward to meeting with you 7
again on a periodic basis.
Verv helpful for me.
8 MR.
BROWN:
I want to just note that 9
Commissioner Elizabeth payne of Maine hvas arrived.
10 COMMISSIONER ROGERS:
Yes.
Welcome.
11 Commissioner Remick?
12 COMMISSIONER REMICK:
I would join in 13 welcoming you also, and I appreciate the fact that 14 NARUC and commissioner Rogers have suggested that we i
15 get together.
I do welcome the dialogue and hope it 10 will continue.
I think it's extremely important that 17 we understand one another.
18 I
feel that there is definitely a
19 relationship between safety performance and economic 20 performance.
It's perhaps even more direct than 4
21-indirect.
But I must admit I'm not quite sure as
/
L 22 economic performance regulators to what extent you 23 need to utilize the safety performance indichtors and 24 standards that exist, and they do exist.
There are 26 lots of them.
There are lots of standards, there are e,.
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1 indientorn that hnvc been devoleped thnt are pretty 2
good, have proven themselven.
3 An a Comminnioner, I have concerna that 4
those indientors not be minuned by un beenune I think 6
indientorn nre of mont help to the ptaple who nre G
netually mannging the oporntion of the plants.
Once 7
you get removed from that, either nn sc.fety regulatorn 8
or economic regulatorn, I think you enn minune that i
9 information, not fully underntand it and citting back 10 remotely from it misinterpret the information.
I 11 certainly think nnd would welcome our cooperating with 12 you to help you underntand whnt standnrde exist, whnt 13 indientors exist but nIno hopefully apprecinto the 14 limitntionn of using those things broadly nn n
15 regulator
- and, in y o te r own particular
- cunen, in 10 cconomic perforrunnee incentives.
17 An 1
- any, thnre in n
r'Istionship, no 18 quontion in my mind between nufoty nnt
- onomien and 19 cconomica and nafety.
To the bent of my knowledge,.I 20 don't think we utilized your standards and your 21 indientora in. our anfety regulation.
We certainly 22 look at the finnnetal qunlifications of nppliennta and I
23 no forth and are concerned if they don't have thu 24 renources to do the thinga that nre necounnry for 25 nafety.
But I don't think we look to you folks for
,.q s
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the type of indicators that you have, the standards e-2-
you set and impose those-upon are licensees.
3 I come from a backgrouhd' about 30 years 4
workin:
aterdisciplinary programs where-I worked with 5
a lot of economics professors and stunnts in social 6
ociences.
I wonder sometimes are your str.ffs grasping 7
out for something more
- concreto, specific
- things, 8
indicators that might be innovative that haven't been.
9 used in-the past?
Seeing these things, a wealth are 5
10 available, we ought to be able to utilize them and 11 perhaps not realizing the limitations that some of 12 these things have-to us also in the safety #ield.
~
13 l'm greatly concerned-that we-misuse li indicators that do exist and have prover it emselves to 15~
be. very - helpful with the people who are. ) responsible 16 for those plants and managing cf plants, that help 17-them compare how they era gc. 24 with their. peers a i, d 18 put that peer pressure on that you indicate that INPO
-19
-has utilized.
20 I'm glad Commissioner Curtiss raised the
.21 question about - the INPO information because=a. lot of i
22.
the-indicators I'm referring;to are the ones that have 33-been developed there.
There's very, very valuable p
24 information and criticisms that INPO provides :, o our 25-licensees, =but bo'h we and you could nisuse-that t
r1
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.67-
--g" l-information
- and, I
- think, inhibit the people who 2
should properly receive that in its proper use and 3-inhibit INPO on its ability to tell.those people.
4 So, I'm throwing out-the question of why 5
do you think that you need to incorporato such 6
incentives, if you are, in cases where such things as 7
SALP scores and performance indicere into economic-8 regulation?
Don't you have your own economic 9
indicators that have worked in the past?
10 MS. SilI SilI DO-TOPE L :
I can answer.
11
- Well, I
don't think
- that, in Illinois
^12 anyway, that we are committed to using the standards-
'13 that exist, t l.
- safety standards as SALP scores, and 14 so on.
In - f t :t, what we're trying to do is get 15 better understanding of what these indicators are 16 intended to measure, the-level of subjectivity, for 17 example, of SALP scores.
And-the fact that there's 18
- one, two and
- three, I
don't think provided good 19 characteristics to use as
-a basis for economic
- 20 incentives because the distance between one and two is 21 different from-~ utility to utility.
How can you assign 22 dollar differences to-that,-for. example?
23 But
-I think that what we're trying to 24 figure out right now--is:is there a way that we can map 25
-predicted effects of economic incentives to effects on.
rg u
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. h ;i
~'
I s a f e. t y.
If we have an ongoing discussion with safety 2
regulators, are there ways'of reaching some agreement-3 that there are some standards that-we can develop that 4
would allow - a mapping of the effects of economic 5
incentives onto safety?
I think that we agree that 6
existing standards may not be. appropriate for use in 7
economic incentive schemes.
8 COMMISSIONER REMICK:
Well, I applaud your 9
interest in understanding those things that do exist 10 and I'm in no way criticizing what you're doing-with 11 the -Illinoin Nuclear Safety Group and so for h,
and 12 getting an understanding, working with our staffs or 13 with us.
I would welcome that, I just express some
.? ^'
ij 14 caution.
15 MR. BROWN:
Well, again, the interesting 16 thing is that there's.a flip side to it too and that 17 is the flip side that I don't think-any of us want to 18 develop economic standards that in any way conflict
'19 with safety objectives.
To some extent, the inquiry 20 into SALP acores e d-other kinds.of measurements that 21 you may use become in, rtant for us so that as we try 22-to develop standards wv aon't end up being in conflict 23 because it's certainly not our intention to ~do 't ha t,.
24 and-diff, rent states have gone in different directions 25 from that.
-r ]
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But I can say from Ohio's experience,
.I 2
found.out in a recent case an extremely-troubling 3L experience trying to figure out just exactly what we 4
were adopting as_an economic performance standard-and 5
how that squared with safety performance standard.
6 You get into a lot of the issues that you ' raised to 7
try to do that.
But a lot of the states' efforts to 8
do'that-in many ways-is motivated by the desire not to 9
he-in conflict with safety objectives.
So, there is a 10-
-sort of -- it's sort of the flip side of the'way you 11 asked the question, I think, 12 COMMISSIONER REMICK:
- Well, as I say, I
1 y
13 welcome an at te: apt. to understand what exists and what-
- . J -
14 it.neans.
My concern is the possibility of grabbing 15' nt that as some kind of an' indicator which could be 16 used and perbups not understanding. the implications.
-17'
.That's'the concern I have.
18 HR.
WILSON:
I. don't think and I
19 certainly would recognize the danger of providing an 20 incentive or. penalty that -would induce a utility to 21 neglect somewhat safety in order to gain performance, 22 in order to-avoid. a penalty or.. gain a reward.
We 20 certainly wouldn't want t o..
create that-kind of s
24 situation.
- 25' I don't brdieve.iu Florida we've.used-any l
- ~T-l
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of the SALPs_
in our we have a
generation 2
performance incentive factor that's calculated every 3
six ' months and it principally deals with past levels-4 of performance and anticipated future levels and looks 5
at equivalent availability factor and provideo some 6
reward and some penalty and there's a dead zone.
So, 7
it's not a harsh line that.if you cross you're in big i
8 trouble and it's supplied to_all plants, including the 9
nuclear plants.
But we have not, to my knowledge,.
10 used the SALPs or any of that in that evaluation.
-I 11 think we're all, particularly since we've had this 12 dialogue that's been going on over the last -- in the
]
13 recent past, are much more aware now of the traps that 14 may lay _in that-kind of an approach.
15 So, I
shink people are a
little - more 16 sensitive to that than they may have been a-few years 17.
ago.
I-think that's good.
_If nothing else comes out-18.
of this,-we've certainly had_that - statutory effect.
19 COMMISSIONER REMICK:
And certainly that.
20 was the purpose of the Commission - in floating the 21 draft policy statement, was.to - express' its concern 22 based on some information that it had.-
I appreciate 23-
'the fact that it's led to this dialogue and hope that-24 it will continue.
25 COMMISSIONER ROGERS:-
If I could.just say y
1,.....
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l something before you move on to another question.
2 COMMISSIONER REMICK:
Yes.
Sure.
3 COMMISSIONER ROGERS:
I'm - just going to 4
express really a nurely-personal point of view.
This 5
isn't-the Co mission position.
But it's my 6
observation that trying to measure safety in terms of 7
some kind of quantitative numbers is very difficult.
8 What we-do at NRC is everything we can think.of that's 7
9
' reasonable to do.
We look at indicators, we have
.10 inspectors, we-conduct inspections.- They're judgments 11 that have to be made, and that in trying to make a
-12 safety. assessment based solely upon some-kind of I
'[
'13 numerical results I think is entirely unsatisfactory, c;
14 I just-don't'think-11 can be done.
'15 Everything cannot be reduced to numbers.
.16 I come from a tradition and many years in trying to
_17 quantify things and fully in agreement -with-. Lord l
l 18-Kelvin's statement that-when I can-measure something, 19 then I. understand it,-to a degree.
It-isn't the total
. 20.
understanding, however.
Everything.;annot be reduced 21 to measurements.
So,-
Judgments' han to enter the
~
'22 process
'in some way.
and it's in searching for
- 23
-indicators we' re -searching.for - quantitative measures.
I 24 We should never abandon that quest-but we should also.. recogni~ze - t ha t there's always something more needed, Q
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another element that somehow is not amenable to a 2
direct quantitative measurement.
3 So, in your search for a measure of safety 4
and a degree of safety in some quantitative terms to 5
establish some hierarchy of levels, I think it's very G
difficult and I don't think that we know how to do it 7
here at the NRC in a purely quantitative way.
If we 8
did, we wouldn't have to conduct inspections and we 9
wouldn't have to have resident insrectors.
We could 10
.cok at how the numbers come out.
But that, I think, 11 would be extremely dangerous if we did that.
We need 12 personal judgments of experienced people to be part of 13 that overall mix that leads us to make a decision as 14 to whether a plant is one that we have to' hook at much i
15 more closely.
16 Very often some of the plants that we've 17 gotten concerned about, it's not so obvious from the 18 numbers, the numerology, that it's time to step in and 19 really get concerned.
And yet-as you look at a number 20 of other things and judgments, it is time to step in 21 and get concerned.
22 So, 1
Just want to offer that up as a 23 personal opinion.
I don't have any 1.ie n how my fellow 24 Commissioners stand on this, but --
25 COMMISSIONER RENICK:
I agree very much r-- 1 e
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Jwith'what you say, Ken.'
'2=
There's interesting history to. SALP.
At 3
one time it uns a staff judgment on' plants that were 4
above everage or below averagc or.verage.
There was 6.
a misunderstanding by some people
' hat-realize if 6
you're going to have an average and somebody is-above 7
average, then somebody has tre be below average.
It's
-- 8 just by the nature of li.
So, there
- was, nis 9-criticism how could - the comraission-allow plants to be 10 below average.
So, the-Cornission was faced with the 11 problem and one, two and three came up as a way of 12-solving that.
-I don't put much-more credit to one, 13.-
two and ?
.s than
- ~
as, bet w average or average.
-r
't
.a
-l'4 c o, I think we - hcve to be very -careful
'15 that we don't-see people take avercge from the
-16 different parts of that or the number from the 17 different' parts and average that -and-come -with some-l
-18 overall score and.so forth,. not' realizing that the.
19-
-different elements -should probably.havedifferent
- 20 weights and'so forth.
It's-just a misuse of. numbers.
)
-l 21.'
The--one, t w o,-
- three, as I
see it, is-just a
22 convenience and back about 1981, '82 twas thought'to be-
.)
23 better than average and below average-and. average'
- 24 because people didn't understand it.
~ '
l
. to -be very careful then that l-2 6.-
Sc, you have j i.l p.-
j L
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s o m e.b o d y _doesn't come in end say that we have uome 2
unique way of assigning numbers to the safety 3
performance of plants.
We -3on't.
What is important 4
is what is underlying there in our staff and o u r-5 evaluation of what we see na performance of-that 6
plant.
It's subjective.
It's our best shot at it, 7
but it's far from perfect and it's-certainly not 8
quantitative.
9 MR. WILSON:
I can't help but obser_ve that 10 one of the differences between the NRC perspective'and 11 the state regulatory perspective and one of the-12 benefits you have is not having to deal with the
- ~'
13 accountants.
I was going to suggest, Commissioner 14 Rogers, that when you decide to leave the NRC that you 15_
take a look at getting a position on the Financial 16 Accounting Standards Board and deliver that message to-17 those folks, 18 COMMISSIONER ' REMICK:
That's all 'I
- have, 19-Ken.
20 COMMISSIONER ROGERS:
Well, just
- a. couple 21-of thinga come to mind.
In this question of how to 22 maintain develop new mechanisms, maintain existing 23 mechanisms for dialogue-with NARUC, how long: do_you-
-24 expect-the Washington' office to be in existence?
Do 25 you see that'-- I know that its initial commitment ~ is 1
.py -
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l really only for a couple of years, but do you see that 2
as likely to survive into the foreseeable future or is 3
that a question that you don't really want to try t^
4 deal with here?
5 MR. WILSON:
Did Ron Callen give you that 6
question?
7 COMMISSIONER ROGERS:
No, no.
8 MR. WILSON:
If you can tell me when the 9
recession will be over, I can give you a better answer 10 and could tell you exactly how long it would last.
11 Our initial authorization of the offica 12 was for two years.
That was in part based on a
~
13 perception that we were in a fairly critical stage in 14 the program.
Admiral Watkins, the Secretary of DOE, 15 and John Bartlett had been appointed as well and we 16 saw some early critical decisions being made and felt 17 the need to be much closer to that process than we had 18 been in the past.
19 I think the anticipation was that we would 20 do the we could obtain commitments from state 21 regulatory commissioners for a limited period of time, 22 for a limited dollar amount much more easily than we 23-could if we
- said, "We're going to establish this 24 office," and you have this funding requirement running 25 on ad infinitum.
uj t
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COMMISSIONER ROGERS:-
Yes.
Yes.-
2 MR. WILSON:
-So, we --looked -at a limited 3
two year authorization of.that with the -- I think-the 4
thought would be that we will look at--that again.
5 Two concerne sort of drove this.
Number 6
- one, at some-point someone is going.to ask us the 7-question as state regulators, - What were you doing 8
aboat this
$7.
something billion that's be..n 9
collected?"- and there's nothing to show for it.
I
-10 think that's-been a good selling point for us raising
'll the money to have the Washington office.
12 But it is tough to raise those kinds of 13
. funds for the-support of the office, -particularly
~'
...d.
14 right now with recession and most state g ov e r n a.e n t s in
~15 a tax situation - that is causing - cutbackt in. Agency 16 actions, on personnel travel a n c' that sort of_ thing.
Ll?
It's become-tougher.
18 I don't think we at all receded from-our 19 position-that this is a
very critical
- time, 20 particularly with_ the-proposais that are in the 21.
National Energy Strategy.
We see sort of a cusp here 23 where some things really may happen.
I can't really 23-give.you anything beyond-the - two year initial -phase 24 and we'll-go-back.and look-at.it.
=25 COMMISSIONER ROGERS:
I think that the-R
- c. :
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1 existence of that office has helped to enlarge the 2
opportunities for dialogue with NARUC.
Obviously, 3
NARUC's headquarters office in Washington also 4
provides an opportunity for that.
But this has 5
certainly enlarged that opportunity and I think it has 6
been helpful.
Certainly I know I see a lot more of 7
Ron Callen now than I did before the office was in 8
Washington and it certainly has been a
factor in 9
making it easy to maintain a dialogue.
10 MR. WILSON:
Well, and beyond the nuclear 11 waste issue 12 COMMISSIONER ROGERS:
Yes.
13 MR.
WILSON:
I know we received 14 information on the concerns you all had with the use 15 of the safety evaluations and Ron has been able to 16 provide us with s eo)le that we need to talk to and 17 documents that-sor of thing.
So, I think it's been 18 u c.n f u l for all of us.
I think all the members of the 19 Committee now know much more about who is doing what 20 and we've had that flow of information go back and 21 forth.
22 So, I too have found it very useful.
23-COMMISSIONER ROGERS:
On this question 24 that Commissioner Curtiss raised in the very beginning 25 of how do you deal with the self-identification of F~~';
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problems issue to avoid discouraging someone from 2
coming forward in the most candid way with a root 3
cause analysis of a p oblem.
It's certainly something 4
that I don't think
,e here feel that we've learned how 5
to do entirely.
'here's always a dilemma to some 6
extent when something is turned up by a licensee to 7
what extent there should be a punish ent that goes 8
along with that.
Each case has to be looked at 9
individually.
There's no simple formula to settle 10 that.
11 But it is a very important issue that 1 12 think always has to be kept up front because it's my J
own personal view that when all is said ano done a le safety regislatory agency must constantly s{ rive to see i
15 that there's a commitment on the part of the licensees 16 to take responsibility and not to hand that off to us 17 or anybody else.
It has to be their responsibility.
18 We simply cannot do the job.
They are going to be 19 running that plant and thinking about it and 20 unt.erstanding it much better than we ever can, no 21 matter how much effort and time we put toto it.
22 So, we must constantly strive to foster.s 23 strong commitment to responsibility for all issues 24 with a licensee.
The last thing that we want to hear 25 is a licensee tell us, "Well, you tell us what you n
j t.-
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~
l want us to do and we'll do it."
That would scare the 2
devil out of me.
I want them to tell us what they're 3
going to do and why and be able to comment on it, but 4
the initiative must come from them.
I 5
So, anything we do that tends to 6
discourage that commitment and s el f -ini t iative really 7
is, in a sense, detrimental to the underpinning of the 8
most safe situation.
Therefore, one finds oneself in 9
a dilemma from time to time on how to deal with the 10 sel f-identificat ion of a problem.
If it's really bad, 11 you
- know, can the fact that someone identified it 12 themtvives be sufficient grounds for excuse?
think
~'
13 we recognize no, it cannot be in some c a r. e s.
But 14 maybe perhaps in some others it might be.
15 I would just offer a thought here on this 16 question of prudency.
I think that economic penalties 17 are seen as almost as bad as a fine or an NHC action, 18 enforcement action in some ways.
They are perceived 19 to be they hit a licensee right in the pocketbook 20 and that's where they're looking and are concerned 21
/>out very much.
22 I just offer one thought here that in a 23 sense -- again, it's a difficult problem, but it seems 24 to me one has to draw a distinction between prudency 25 and perfection.
We know that in dealing with these NEAL R.
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technical sys', ems they are artifacts of human beings.
2 They're not perfect.
We all do our best.
3 Engineering, however scientifically _ based it is, is 4
still an art, not a science totally.
It relies, it 5
uses the tools of science, it uses - mathematics, but 6
still when all is said and done there are many 7
constraints in developing an engineering system and
-8 c omp r on.i s e s that have to be made with what one might 9-strive'or consider to be striving towards perfection.
10 So, when you review some<.tng after the 11
- fact, particularl;r if '. '
- a. first time situation,-
12 that it-is unlikely to have bec.i very close to.
7' 13 perfection and that it seems to me that it's
.w 14 worthwhile to try to draw a distinction between events 15
_ which happen once-from events which happened in the 16 middle of n' repetitive situation that should have.been j
17 well taken-care _of.
'If a system-has been maintained L
p 18 in a certain way and the: standards for maintenance are ji 19-there andt then the-licensee-failed to do-that,_then I'
_20 would see that as a - very different-situation from 21 somehow or other not-really fully understanding something that_nobody understood until it first arose.
22 L
23
-That does happen in even these plants that have been l;
L 24 around for 20, 30 years.
We're still learning things 25 c.uout these very complicated artifacts of the human lr-~1 L _;
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1 mind.
It is really not, in a sense, I would say, 2
reasonable to view something that has come up that no 3
one ever saw before as evidence of imprudence.
It's a
.4 lack of perfection, that's true.
But where something 5
that was well understood, well
- known, well under b
control and then was allowed to get into a situation 7
that led to a deterioration and a loss of ability to 8
- perform, then that's a
very-different kind of 9
situation, in my view.
~10 So, I'd just offer that for your own 11 discussion because it is important to understand-that
~
12_
however hard that we all have worked to try to create 13-the best possible situation C_;
technically, there are i
14 times when the limitations of the human mind and human 15-experience have overlooked something that ultimately clG developed.
That's Just the way it is.
I think that 17 -
we have to recognize the 1:mperfection'of the'se systems 2
18' and'that will lead us-into w'iole questionc of risk and
-19 risk assessment that I' don't think we want to got-into
'20 -
today.
But I would offer you that these are some 21-thoughts that are worth thinking on.
_- 2 2 Any other questions or comments?
g 23
- Well, we'd like to thank you all for-24 meeting with us and sharing your views.
Of course.
g 2L we'll be happy to meet with=you again in :the "uture p
a
,; J -
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and I hope that we will-be able to identify mechanisms 2
that tend to guarantee that.
3 As Commissioners, we all of us share a 4
responsibility for promoting good regulation and can 5
benefit from an exchange-of views-even though our 6
specific areas of responsibilities may be distinct.
7 Would you have any other comments that 8
you'd like to make or --
9 MR.
BROWN:
Just a
couple of final 10 comments.
One is to introduce another -one of our
-11 colleagues, Commissioner Ron Russell from Michigan.
12-COMMISSIONER ROGERS:
-Ah, yes.
Welcome.
}-
13 MR.
BROWN:
Ron follows the Michigan 14 tradition of being heavily-involved in nuclear issues.
15 Just one final note and that is again to 10 thank you very much for this opportunity.
.I hope that
.17 it can continue to work and that perhaps.we can
-i 18-explore some ways of doing this on. an ' ongoing - basis, 19 not only in-this ' kind of setting, which I think has 20-been - very -helpful to all of-us, but also on a more 21
. informal basis between staffs of your Commission and 22 our commissions.
Thank you.
23 COMMISSIONER ROGERS:
Yes.
- Well, 24 absolutely and'any thoughts.that you have along those 25
- lines, please communicate them to me or to Myron n-u!
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?,rman and we'll see that we share them throughout the 2
Agency.
3 MR. BROWN:
Thank you very much.
4 COMMISSIONER ROGERS:
Very good.
We atend 5
adjourned.
6 (Whereupon, at 11:35 n.m.,
the above-7 entitled matter was adjourned.)
8 0
10 11 12 13 14 16 16 17 18 19 20 21 22 23 24 i
25
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CERTIFICATE OF TRANSCRIBER This is to certify that the attached events of a meeting of the United States Nuclear Regulatory Commission entitled:
TITLE OF MEETING: BRIEFING BY NARUC ON ECONOMIC PERFORMANCE INCENTIVES PLACE OF MEETING: ROCKVILLE, MARYLAND DATE OF MEETING:
FEBRUARY 27, 1991 were transcribed' by ine. I further certify that said transcription is accurate and complete, to the best of my ability, and that the transcript is a true and accurate record of the foregoing events.
O L,w t w
J Reporter's name:
Peter Lynch I
e NEAL R. GROSS COURT REPORTERS AHO TRANSCRIBER $
1323 RHODI 15LAHO AVtHUf, H.W.
p p34 4433 WASHINGTON, D.C.
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