ML20032D810
| ML20032D810 | |
| Person / Time | |
|---|---|
| Issue date: | 11/02/1981 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML19301A294 | List: |
| References | |
| REF-10CFR9.7 SECY-81-615, NUDOCS 8111170525 | |
| Download: ML20032D810 (79) | |
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DISCUSSION OF PART 170 -- NEW FEE SCHEDULE BASED ON REEXAMINATION OF MANPOWER ESTIMATES 7
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DATI: '
November 2, 1981 PAGES:
1 - 73 AT:
Washington, D. C.
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UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY COMMISSION p
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Public Meeting NEW FEE SCHEDULE BASED ON 5
DISCUSSION OF P ART 170 6
REEXAMINATION OF MANPOWER ESTIMATES 7
8 Room 1130 9
1717 H Street, N.W.
10 Washington, D. C.
11 Monday, 2 November 1981.
12 13 The Commission met, pursuant to notice, at 2:02 14 p.m.,
15 BEFORE:
16 NUNZIO PALLADINO, Chairman 17 VICTOR GILINSKY, Commissioner 18 PETER BRADFOBD, Commissioner 19 JOHN AHEARNE, Commissioner 1
20 THOMAS ROBERTS, Commissioner i
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SAMUEL J. CHILK
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3 LEONARD BICKWIT
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4 FORREST REMICK 5
WILLIAH DIRCKS i
6 KEVIN CORNELL 7
W. MILLER i
8 D. DONOGHUE 9
R. FONNER 10 HR. HOLLOWAY t
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3 CHAIRMAN PALLADIN04 Tne meeting will please come 4 to order.
The topic of this afternoon's meeting is a 5 discussion of Part 170, New Fee Schedule Based on 8 Reexamination of Manpower Estimates.
7 This is a public meeting, and we vill turn it over 8 to the HD0 for discussion of this item.
9 NR. DIRCKS:
What we would like to do is not get 3
10 into a great deal of detail on the technical paper, Mr.
11 Chairman.
We think we have covered the background in 12 previous fee schedules and the items that led up to the j
13 establishment of the fee schedule.
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14 I think it is important to note, too, the interest 15 that the Office of Management and Budget has in our current 16 efforts to develop ", see schedule that will bring in j
17 resources to the agency.
18 What we would like to do is basically summarize i
i 19 the diff erences that a re in this fee schedule that we are 20 proposing to the Commission, as opposed to the previous fee 21 schedule.
We would like to concentrate on the differences Zlin very brief form, and then answer the Commission's 23 questions.
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24 CHAIRMAN PALLADINO:
Okay.
25 MR. DIBCKS:
Bill Miller, who is head of the ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WAhMINGToN. D.C. 20024 (202) 564-2345
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1 Licensing Fee Branch in the Office of Administration has 2 just two or three slides he would like to discuss with the 3 Commission.
And then, as I said, we would like to then deal i
4 with questions.
5 Bill?
6 HR. MILLERS I will go ahead then, Bill.
7 The paper which you have been furnished describing 8 this proposed fee schedule contains a lot of background 9 information, a lot of information describing the current fee 10 schedule, and comparing the two.
So I will not go into a 11 lot of detail.
12 The proposal which you have before you in this 13 paper is designed to simplif y the fee schedule, and to 14 update the fee schedule as required by OMB, as Bill has 15 said, as set forth in Circular A-25.
16 What we have proposed here is not a new approach 17 to fees.
In fact, what we have done is followed the 18 Commission's fee guidelines which the Commission issued in 19 1978, and which have been into court and approved by the 20 courts.
21 In this particula r paper -- and, Doug, would you 22 please flash up slide number one?
23 (Slide.)
b-24 In this pa rticula r pa per, the most significant l
25 thing that we have done is to revise the labor rates for the l
l ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE S.W WASHINGTON. D.C. 20024 (202) 554-2346
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1 program offices.
These are offices such as NRR, ICE, NHSS.
2 We have done this based on pay increases in 1978, 1979, 3 198 0, a nd 19 81, and the inflation rates which have been
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4 'provided to us by the Office of the Comptroller.
5 The second thing we have done is to remove the 6 ceiling which the Commission -- or we are proposing to 7 remove the ceiling which the Commission imposed in 1978.
8 There is a ceiling on reactor licenses, reactor amendments, 9 and a ceiling on materials' fuel cycle licenses.
This rule,
10 as proposed, would remove those ceilings.
11 We are also proposing to assess fees for reactor 12 amendments, and other required approvals, based on actual 13 costs rather than, as they are now, which is a fixed-fee
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14 method.
We have six classes of amendments with fixed fees.
15 We are proposing to put them on an actual-cost basis.
16 The next thing we are proposing to do, which is 171 tem number four, is to charge for non-routine inspections.
18 In 1978, the Commission imposed fees for inspections, but 19 limited the fees to routine inspections.
We are proposing 20 here to charge fees for all inspections.
21 The final thing, as you will see on item number 22 five up th e r e',
is we would revise our billing procedures for l
l 23 the actual-cost cases.
That is, we would bill as the work
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24 progresses at six-month intervals, rather than as we do 25 presently which is to collect the entire fee ai the time the ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE S.W., WASHINGTON, D.C. 20024 (202) 554-2345
6 II 1 CP or the OL is issued.
2 Basically that is what we are proposing in this f}
Ofee schedule.
4 Doug, would you flash up the second vu-graph?
5 (Slide.)
6 I think it is important that the Commission see 7 what impact the fee schedule would have.
For example, if 8 you look at the second line for an OL review -- and these 9 are typical of what would happen -- you will see that under 10 the current schedule fees for OLs range from roughly 11 $800,000 to $1 million.
12 The proposed range, which is cost, is roughly $2 13 million to $2.5 million.
So there is an impact.
Prima rily
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14 that fee has increased because of the increase in manpower 15 since we developed the schedule in 1977, the current 16 sch ed ule.
17 COMMISSIONER BRADFORD:
I had always understood 18 that we put a lot more manhours into an OL review than we 19 did in a CP re vie w.
Is that wrong?
20 MR. MILLER:
There is not a great deal of 21 dif ference.
We are told that the manhours for a CP range 22 f ro m about 14 manyears to about 21.
For an OL it ranges 23 f rom about 16.5 to abort 19.
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24 MR. DIROKS:
We have not done a CP in so long--
25 (Laughter.)
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1 COMMISSIONER BRADFORD:
That is s hypothetical 2 number?
Well, maybe that is right.
That is, that currently 3 that would be accurate, but Roger Mattson, who at the time (m.
4 was doing a manhours' review within NRR of some sort was 5 very clear on the poin t tha t the plants now undergoing OL 6 reviews would be spending about three times as many manhours 7 on their OL reviews as had been spent on their CP reviews.
8 I guess what you are saying here is that if we 9 ever did a f ull CP review again, it would be much more a
10 extensive?
11 MR. DIRCKS:
These are based on actual investment 12 of manhours in the project.
Is that right?
13 MR. MILLER:
That is correct.
14 MR. DIRCKS:
These are estima ted, and of course we 15 have much more recent experience with the OLs than we do 16 with the cps.
17 MR. MILLER:
The OL manpower data is pulled 18 directly from the computer as we input the data.
As Bill 19 has indicated, the CP data, some of it is dated.
20 COMMISSIONER BRADFORDa But are you using actual 21 CP data ?
Or estimates of the number of manhours you think Zt it would take to do a CP review today?
23 MR. MILLERS This is data that is in the 24 compu ter.
It was actual.
It may be dated, but it was 25 actual at the time.
1 ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554 2345
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1 Now when we looked at 1977 just f or comparison, 2 the manpower required for a CP was 6.6.
For an OL it was 36.2.
That is roughly four or five years ago.
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COMMISSIONER BRADFORD There is something out of 5 line somewhere, then, but I do not know how to pursue it 6 without talking to someone like Roger or Harold.
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CHAIRMAN PALLADIN0s I gather that even though 8 these are your expected ranges, they would be on actual 9 manpower used, staffpower?
10 MR. MILLER That is correct.
In some instances 11 they could possibly exceed this.
12 CHAIRMAN PALLADINO:
So maybe this range might 13 turn out not to be correct?
14 MR. MILLER:
These ranges, I might add, were 15 developed based on pulling a specific number of cps or OLs 16 f rom the com puter.
I do not recall how many -- six or eight 17 examples we came out with?
I do not recall exactly, do 18 you ?
19 MR. HOLLOWAY:
No.
20 MR. MILLER:
It was a specific number of cases.
21 MR. DONOGHUE:
The range is primarily to put them 22 on notice that this a liability they could have to the NRC, 23 because the actual liability would be whatever the actual 24 costs are.
25 MR. DIRCKS:
It might be worthwhile to have Ed ALDER $oN REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C.20024 (2d) 554-2345
9 4
s 1 Triner, who pulled this data together as a result of the 2 computer analysis we have done, to go into it a bit.
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3 BR. TRINER:
We stay relatively current on the 4 expenditure of hours for the varicus kinds of licensing 5 processes.
With cps of course we have historical data, but 61n terms of actuals currently we had to project.
The 7 projection on that shows to be less than our actual OLs.
8 0ur OLs, as Bill mentioned, that we currently have 9 empirically run somewhere between 16 and 19 professional 10 staff years, and somewhere around 4/10ths times that for up 11 to 27.6 total staf f years to handle the administrative 12 support for the clerical, supervisory, and so forth.
13 CHAIRMAN PALLADIN04 When you say "27.6,"
is that 14 total including the pro'fessional?
15 HR. TRINER: 'That is correct.
That is 16 professional and overhead f or the CL.
Our CP estimates are 17 slightly less, but the cps are estimates that we projected 18 through the years.
We do not have the same kind of 19 empirical data that we do for the OL.
20 COMMISSIONER BRADFORD:
What are the comparable 21 numbers for cps?
22 HR. TRINER:
The cps as of the data that we had a 23 couple of years ago -- of course it really has not changed--
i 24 w as 17.4.
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25 COMMISSIONER BRADFORDs 17.4?
ALDERSoN REPQRTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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1 HR. TRINERa Staff years per CP for NRR.
2 COHEISSIONER AHEARNE:
Is that with or without 3 overhead?
4 HR. TRINER:
Sir?
5 COMMISSIONER AllEARNE:
With or without the 6 overhead ?
7 MR. TRINER:
This is with the overhead.
8 COHNISSIONER BRADFORDa That is total staff 9 yea rs.
10 MR. TRINERa This is comparable to the OLs which 111s substantially more.
12 COMMISSIONER AHEARNE:
That compares to the 27?
13 HR. TRINER:
That is correct.
The OLs are 14 substantially more.
And of course the increase has been 15 very great as a result of TMI where there has been a 16 considerable amount of increased effort over what we have 17 been doing in the past.
18 COMMISSIONER BRADFORD:
Now th'at 17.4 is the 19 projected figure?
l 20 MR. TRINER:
That is projected.
21 COMMISSIONER BRADFORD:
That is not the historical 22 figure?
23 MR. TRINER Well, it is historical with some
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24 projections; but we do not have enough data to be able to 25 determine what it actually would be.
s ALDERSON REPORTING COMPANY,INC.
- 400 VIRGINIA AVE., S.W., WASHINGTON, D.C.20024 (202) 554-2345
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1 COHNISSIONER BRADFORD:
But it is the number which 2 underlies the " proposed range" column on. that slide?
3 NB. TRINER:
Is that correct, Bill?
That, I am
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5 NB. HILLER:
This is the data that the NRR, Hugh 6 Thompson's staff, provided us.
This was their estimates 7 that they gave us just a few months ago.
8 MR. TRINER:
In that case it would be.
In that 9 case it would be, because we are using the same basic data.
10 CHAIRMAN P ALLADINO:
That does not look right.
11 The 27.6 as compared to 17.6 would show a bigger difference 12 in the range than this indicates.
I do not know if that is 13 the basis or not?
14 HR. DIRCKS:
You have to add in contract f unds.
15 HR. TRINER: ~ That is correct.
We would have much 16 more contract funds for the -- this does not include 17 equivalent staff years.
" Equivalent" being the amount of 18 staff ' years that we would buy as a result of program support 19 ( ' 11a rs.
>J MR. MILLER:
And there is up to about a half a 21 aillion dollars in contractual costs,
22 COMMISSIONER BRADFORDs And those are in these 23 numbers?
24 MR. MILLERS Yes, they are in our numbers.
In the 25 numbers we have given you there, we have included manpower ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON D.C. 20024 (202) 554-2345
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1 from all offices that are involved and contractual costs.
2 COHHISSIONER BRADFORD:
And what you are saying is 3 that those contractual staff years fall more heavily on the
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4 cps or OLs?
5 HR. MILLER:
The data I was provided, they fall 6 acre heavily in the CP area.
7 Jim, you have a breakdown of it, don't you, if you 8 vant to get into the details.
9 HR. TRINER:
That would be consistent, because you 10 have a lower in-house staff here, and a higher program 11 support cost for the CP, the aggregate of which would make 12 it closer to thc OL cost.
13 COMMISSIONER BRADFORD:
You are saying that we are 14 doing proportionally more of the CP reviews on a contractual 15 basis than of the OL review?
16 HR. TRINER:
That was for the projection.
We 17 actually do not have that much data at the present time.
18 COHNISSIONER BRADFORD:
Why would you project it 19 that way instead of assuming that it would be about equal 20 for the two classes of license?
21 HR. TRINER:
I believe that the reason is that, 22 given the limited manpower resources, we would probably want 23 to put it closer to the operating license.
24 HR. MILLER:
A lot of your environmental work is 25 done, I think, by the laboratories and so forth outside in ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE S.W. WASHINGTON, D.C. 20024 (202) 554 2345
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1the CP area.
That would be one of your answers.
Isn't that j
2 right, Ed?
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3 MR. TRINERs Exactly.
4 MR. MILLER:
An awful lot of your work is done 5 outside.
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COMMISSIONER BRADFORDa So that onto that 17.4 6
7 total staff years you have to add some --
8 MR. TRINER:
Program support dollars, or 9 equivalent bought-staff years from the labs, or from 10 whatever source.
11 COMMISSIONER BRADFORDs I see.
12 CHAIRMAN PALLADINO:
Wha't is our level of l
13 confidence in the system that documents the staff support 14 spent on specific dockets ?
15 MR. DONOGHUE:
I think right now they are pretty 16 good in NRR.
I think we have a high level of confidence in 17 NRR's reporting system.
It is good.
18 COMMISSIONER AHEARNE:
How about ICE?
19 MR. DONOGHUE:
I think ICE is the same way.
20 MR. MILLER:
As you know, each of these cases are 21 assigned a docket number.
The Staff is required on a weekly 22 basis to charge their time to a particular docket.
We can Z3 only assume that they are doing it.
24 COMMISSIONER AHEARNE:
I was really asking a 25 dif feren t question.
Not how is it supposed to run; I was 1
ALDERSoN REPORTING COMPANY,INC,
_ CRVIRGINIA AS S.W., WASHINGTON, D.C. 20024 (SE) 554-2345
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1asking what is it -- I was trying to follow up on the 2 Chairman's question, particularly with respect to IEE.
What
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3 is the confidence that the numbers are reasonably good?
4 HR. MILLER:
I have assumed that they are good 5 numbers.
6 COMMISSIONER AHEARNE:
That is an assumption.
7 HR. DIRCKS:
I think the burden is on us, 8 because-- you can correct me if I am wrong -- if we cannot 9 justify and substantiate these items to the Licensee, then 10 we are in trouble.
I 11 CONNISSIONER AHEARNE:
What I was really asking is 12 if any of you have a sense of having confidence in them by 13 means of there are never any problems with the manpower 14 numbers; you do not have to go back and essentially shake 15 them down?
Have checks been run against say ICE, and the 16 IEE numbers are really good and firm?
17 MR. MILLERS Well, these numbers, we have worked 18 with the ICE and the NRR and so forth, Dan and I ever the 19 years, and I feel that today the numbers are pretty good 20 numbers.
We have tried to work with people and explain the 21 necessity.
22 COMMISSIONER AHEARNE:
I know.
23 MR. MILLER:
You realize we have been in court, 24 and 25 MR. TRINER:
You have really got two dimensions.
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE, S.W WASHINGTON. D.C. 20024 (202) 554 2345
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I' 1 You have got the manpower accounting methodology.
Then you 2 also have accounting for your program support dollars.
3 There are different methods for capturing this.
NRR is an 4 example where we have a reasonably good manpower accounting 5 system.
In their program support dollars, about 50 percent 6 of their lab effort is under the lab licensing program.
7 That is very good.
The other 50 percent they are working 8 on.
They have a f airly good model, and they are working on 91t now.
10 If there would be an error, the systematic error 11 would be to charge less rather than more, because whatever 121s charged has a very finite and a good audit trail.
And if 13 there is a question, then they would tend not to charge.
14 COMMISSIONER AHEARNE:
Ed, by the fact you did not 15 mention ICE, is that because you do not want to?
16 HR. TRINER:
No, sir.
ICE program support of 17 course is at the noise level.
In terms of their manhour 18 accounting system, they have a good manhour accounting i
19 system that charges -- Their manhour accounting is easier to 23 charge because there isn't any ambiguity about the recipient 21 of the service.
Whether it is perceived that way is 22 something else again, but it is easier to do than NRR where 23 the generic work by definition would not be charged.
24 COMMISSIONER AHEARNE:
So are you saying that the 25 people who do the manpower accounting, keeping track of it, ALDERSoN REPORTING COMPANY,INC, I
400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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1are not having trouble getting the system to give results 2 which make sense and appear to be reproducible, logical,
(~N 3 consistent?
4 MR. TRINER:
That is correct.
5 COMMISSIONER GILINSKY Over the. years, ICE has 6 had a pretty decent system for keeping track of its work at 7 a time, I remember, when the NRR system was in a great state 8 of confusion.
IEE seemed to be able to account for where 9 its inspectors were going.
10 MR. TRINER:
I think it has improved over the 11 years.
12 MR. MILLERa One thing I think that is important, 13 when we get data chargeable to one of these cases, if we
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14 cannot tie it down, we do not include it in the charge.
15 CHAIRMAN PALLADINO:
Are travel costs treated 16 separr.caly?
Or are they thrown in the overhead?
17 MR. MILLER:
Are what?
18 CHAIRMAN PALLADINO:
Travel costs for any of this 19 work.
20 MR. MILLER:
Travel costs are included in the 21 overhead.
22 CHAIRMAN PALLADIN0s They are in the overhead.
23 COMMISSIONER GILINSKY:
Let me aska If you add 24 all of these items up, what fraction of the agency's 25 activities are covered?
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ALDERSoN REPORTING COMPANY,INC,
@ VIRGINIA AS S.We WASHINGTON, D.C. 20024 (202) 554-2346
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f) 1 ER. MILLER:
Less than 10 percent.
2 COMMISSIONER GILINSKY:
Where is the other 90 3 percent?
m 4
MR. DONOGHUE:
Research.
5
( La ugh te r. )
6 MR. DONOGHUE:
Jore than 50 percent are generic 71tems.
8 MR. MILLER:
More than 50 percent is research.
We 9 include -- va have a film here I could show you.
10 COMMISSIONER GILINSKY:
I thought you were going 11 to say about 25 or 30.
12 MR. MILLER:
It is about 8 percent, really, 7 or 8 13 percent.
14 CHAIRMAN P ALLADINO:
You are talking about going 15 u p to 515 million did von say?
16 COMMISSIC'4h AEEARNE:
Well, but part of that is 17 sweeping up somi L9 aGenses.
18 COMMISSICFES GIL7MSKY:
But if you include -- I 19 quess I am a little surprised.
If you include IEE's 20 efforts, and if you 12clude amendment.s, and presumably 1
21 topical reports and so on which are in here somewhere --
22 COMMISSIONER AHEARNE:
It is getting to the point 23 M r. Bevel kept making.
Very little of the agency is focused l
24 on the licensee.
25 COMMISSIONER GILINSKY And then you had a good e,
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4 ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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1 answer.
2 (Laughter.)
3 CHAIRMAN PALLADINO:
How about work on --
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COMMISSIONER GILINSKY:
I thought we had it up to 5 20 percent or something?
6 COMMISSIONER AHEARNE:
I suspect part of the 7 prod 1em we are seeing in the percentages is that we are 8 really not getting true costs recovered.
9 CHAIRMAN PALLADINO:
And there are iteis such as 10 generic items.
Are they covered in here ?
11 MR. MILLER:
No they are not.
There are many 12 things the court has said we must exclude.
To include 13 something you must be able to identify it with a case.
This 141s a little bit of what Ed' was talking about.
Things like 15 research we cannot include.
Standards we cannot in clud e.
16 Code work, generic.
So there are many, many broad 17 categories with large amounts of dollars that we could not 18 include.
19 COMMISSIONER GILINSKY:
Half of the agency's 20 expenses are in research and other offices.
21 MR. MILLER:
Yes.
l 22 COMMISSIONER GILINSKY:
I guess what I do not see 231s why isn ' t the larger part of that other half here?
24 MR. MILLER:
Well, if you look at some of the 25 activities -- for example, in NRR a let of their ef fort is i
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1 devoted to things other than processing specific 2 applications.
It is a generic licensing effort.
Take Three
,c 3 File Island, for example.
4 COMMISSIONER GILINSKY:
Why would that not be 5 chargeable to that licensee?
6 CHAIRMAN PALLADIN04 I gather that the court 7 requires that they be identifiable with a particular 8 licensee.
9 MR. MILLERa Well, part of the answer is that the 10 Commission policy was at the time that incidents were 11 excluded.
i 12 CHAIRMAN PALLADINO:
What were?
13 MR. MILLER:
Incidents.
14 COMMISSIONER GILINSKY:
Are they excluded here?
4 15 MR. MILLER 4 'We are proposing now to include 16them.
17 COMMISSIONER GILINSKYa And now you are telling me 18 tha t 19 MR. DIRCKSs But I think if you take a look at the 20 agency's budget, first of all we are figuring on payroll --
21 vell, le t's go back to dollars.
Of the $500-or-so-million,
22 n o, it is less than that 23 COMMISSIONER AHEARNE:
About 7465.
24 MR. DIRCKS:
5460 million we have, 25 5200-and-some-odd million are in research.
That is just ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024(202) 554 2345
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Ithen pulled to the side and we are not keeping track of that.
2 Then you look at the program support dollars, and 3 we are talking a good fraction of that being included in s
4 this.
Plus, in the payroll, you are talking of the 5 inspectors that we have, the total inspection staff is 6 460-some-odd actual inspectors.
7 In the N RR --
8 COMMISSIONER GILINSKYs Le t's see.
Aren't you 9 counting the overhead on those inspections?
10 MR. DIRCKSa Yes, we do.
11 CHAIRMAN PALLADINO:
I want to got back to what 12 that overhead includes.
13 MR. DIRCKS:
Usually what we do in NRR is count 14 1.4 percent on top of the --
15 CH AIRMAN PALLADINO:
Does that include the OTC and 16 all the other things?
17 COMMISSIONER AREARNE:
But in theory every 18 ins pecto r 's time ought to be -- most of it ought to be able 19 to be charged to a specific licensee, should it not?
20 COMMISSIONER GILINSKY:
Well, just to sharpen --
21 MR. DONOGHUE:
Well, I guess in the area of 60 22 perc ent, probably.
40 percent of the time he is working in 23 the office --
24 COMMISSIONER GILINSKY:
Well, I would think it is 25100 percent.
ALDERSoN REPORTING COMPANY INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
21 1
HR. DONOGHUE:
We include the writing of the 2 report, the preparation to go out, and the actual visit.
(N 3
COMMISSIONER AHEARNE:
But just given what ICE's 4 charge is, it would seem that a high percentage --
5 CONHISSIONER GILINSKY:
You would not count, say, 6 training.
7 COMMISSIONER AHEARNE:
No, but nevertheless a high 8 percent of ICE.
9 COMMISSIONER GILINSKY:
Right.
10 COHNISSIONER AHEARNEs That is why I was asking 11 ICE's tracking system on that.
12 COMMISSIONER GILINSKYa I think that is very 13 importan t.
But to sharpen this up, though, it looks as if 14 of the other part, the non-research part, we end up counting 15 something like 20 per. Ant, which sounds like a pretty lov 16 f raction.
17 HR. DIRCKS:
In overhead of course we are only 18 including the technical overhead related to the ICE 19 function.
We do not include the overhead related to what in 20 business is called the " general overhead," the payment of ad 21 m e n, or --
22 CHAIRMAN PALLADINO:
You do not include those?
23 MB. DIRCKS:
No, we do not includ e those.
24 CHAIRMAN PALLADINO:
I see.
25 CONHISSIONER AHEARNE:
Well, you certainly have to ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
22
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linclude part of a slice of that.
2 HR. DIRCKS:
We include the secretarial staff, the 3 branch chiefs, and so on.
4 COMMISSIONER GILINSKY:
Why is it not fair to 5 include some slice of the rest of it?
Obviously the man in 6the field cannot function --
7 HR. MILLER:
We do.
8 HR. DIRCKS:
You include the ad men overhead?
9
' HR. MILLER:
We have two ways to go here.
One is 10 to accumulate, as we have talked about, the hours that are 11 charged to a ca se, the docket number, and the contractual 12 services that can be directly related to that case.
13 Then in addition to that, we develop a 14 professional staff rate, so much per hour, so much per 15 yea r.
Included in that are the salary, benefits, et cetera, 16 supervision, clerical, rent, lights, paper, a proportionete 17 share of the comptroller's office, administration, the legal 18 counsel, et cetera.
So, yes, we bill tha t rate the same way 19 General Motors bills her consultant 's rates.
20 CHAIRMAN PALLADINO:
Has that been examined 21 recently in terms of new benefits?
22 MR. MILLER:
In here, one of the first items I 23 talked about, if you will recall, we revised the labor
(,
24 rates.
What we did there was to add an inflation factor for 25 each of the years sinco 1978, and the pay raises for those.
ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON. O.C. 20024 (202) 554-2345
~ 23-p 1So those are the adjustments we made in the labor rates.
2 CHAIRMAN PALLADINO How about the benefits?
I 3 gather those have changed.
4 MR. MILLERS Pardon?
5 CHAIBMAN PALLADINO:
Have benefits.not changed in 6the last several years?
I do not know if that is 7 significant.
8 MB. MILLER I do not know that they have changed 9 appreciably, Mr. Chairman.
10 COMMISSIONER AHEARNE I do not understand.
It 11 sounds like what you did is take an old rate and apply a 12 percentage of cha'nges'.
13 MR. MILLERS That is exactly what we did.
14 COMMISSIONER AHEARNE I do not understand why you 15 do not take a slice cut of what we are actually paying.
We 16 know how many prof essional staf f we have.
We know what the 17 rates are.
18 MR. MILLERS I am sorry, Mr. Commissioner ?
19 COMMISSIONER AHEARNE:
I am saying, I do not 20 understand why you took that approach.
Why do you not take i
21 the salary and benefit costs we currently have and determine Z2what the professional-year cost is f rom wha t we are actually 23 paying?
Why did you take an old rate and put percentages on 24 it?
25 MR. MILLER:
Well, I really think it would come ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 5544 345
24 I ',
1out roughly the same.
We talked with Ed and the 2 Comptroller's office and so forth about this.
We took the
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3 '78 rate that was developed based on salary, benefits, et 4 cetera.
The only things that had changed appreciably were 5 the pay increases and the inflation factors, and we added 6 those in.
Did I understand your question?'
7 COMMTSSIONER AHEARNE:
(a) There~are other things 8 that have changed in each office.
There has been a 9 redistribution of other people.
There may have been changes 10 in grade.
But on top of that, it seems to me you are trying 11 to get by calculation something you can get directly.
12 MR. MILLER:
We could exar*.ne that possibility.
13 CHAIRMAN PALLADINO:
Actually, my understanding is 14 that you used a very modest inflation rate of 6 to 6.5 15 percent.
16 MR. MILLER:
We did.
17 CHAIRMAN PALLADINO:
It doesn't seem to be in 18 keeping with what has happened.
But then you ignored cap 19 changes, the caps on the pay.
I d'on't know if that has a 20 significant impact or not.
The effect may be about the 21 same, but I am thinking of presenting a defensible position L
ZZ on whatever we do as much as I am in getting 23 MR. DIRCK..
The 6 to 6.5 peccent would be about 24 wha t the federal employees receive.
25 COMMISSIONER AHEARNE:
But why bother doing it by l
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l ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA WE., S.W., WASHINGTON. D.C. 20024 (202) $54-2345
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1 calculation when you can Co it directly?
We are actually 2 paying people.
We have a work force which we paid in
'81.
{t 3 I don't understand why you don't take the salary and 4 benefits that are associated with what we actually paid.
5 HR. MILLER:
Is your question:
Why don't we take 6 the individuals who work on cas,es?
7 CONNISSIONER AHEARNE:
No.
Onether it is 8 individuals who work on cases or what, you have got a Osalary/ benefit portica of the budget.
No matter how you 10 break it out, you must have gone through a method in '77 to 11 bre, it out.
12 HR. MILLER:
We did.
13 COHHISSIONER AHEARNE:
I do not understand why you 14 do not apply that to the actual costs in
'81, as opposed to 4
15 trying to calculate it'up?
16 MR. MILLER:
We could have.
We could haves yes.
17 I really do not personally think it would change it 18 significantly.
19 COMMISSIONER AHEARNE:
It migh t not, but it seems 20 to be the direct approach as opposed to the indirect 21 approach.
22 CHAIRMAN PALLADINO:
Yes, and I think it is a more 23 def ensible approach, which is one of the things tha t we may 24 have to face in defense of what we do.
25 MR. MILLER I guess one of the reasons we did ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
26
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1not, it would have required us to go back and to reassess 2 wha t all of these people were working on.
And you had the
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3 problem tha t things are in sort of a state of transition at 4 this point.
5 CHAIRMAN PALLADINO:
When you calculate these 6 costs, suppose there is employee I who spends so many 7 hours8.101852e-5 days <br />0.00194 hours <br />1.157407e-5 weeks <br />2.6635e-6 months <br />.
We don't use his salary or her salary?
8 HR. MILLER:
We take an average salary.
9 CHAIRHAN PALLADINO:
You take an average for that 10 level of individual?
Or an average for all the professional 11 staff ?
12 HR. MILLER:
We take an average for the 13 professional staff.
I 14 CHAIRHAN PALLADINO:
I see.
15 ER. DIRCKS:
It is tied in with the budget 16 pro cess.
We budget by professional staff year, and we clain 17 a salary 'on the basis of a so-called " professional staff 18 y ea r. "
I guess that is how we are calculating.
We just 19 take the canhours.
20 CHAIRMAN PALLADINO:
But you have different rates 21 for different levels of professional people.
22 HR. DIRCKS:
Just the professional staff year.
23 COHHISSIONER AHEARNE:
But if the manpower 24 reporting system is as good as has been described, then I am 25 not sure why --
ALDERSoN REPORTING COMPANY,INC.
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1 MR. DIRCKS:
No, no, nc.
That would get very 2 complica ted.
What we_are doing here is aggregating the
,c 3 whole professional staff years and multiplying by a flat 4 rate.
If you are saying that on any one particular case we 5 had a GS-13 working for I number of hours,:and a GS-15 for 6so many hours, then we are going to get into a very 7 complicated --
8 COMMISSIONER AHEARNEs That is not what I meant.
9 CHAIRMAN PALLADINO:
But you could get an average 10 based on the salaries.
11 MR. DIRCKS:
Yes.
I think what we are trying to 12 do is make it somewhat coincident in the budget process.
We 13 go to OMB with a certain assumption on what a professional 14 staff year costs us.
And then we just multiply it out to 15 get our total personal ' salary benefit budget from OMB.
16 COMMISSIONER AHEARNE:
But I think you are going 17 to have to perhaps have a little better defense if you get a 18 court challenge on the justification for this.
19 HR. DIRCKSs We used the same technique and 20 survived.
21 COMMISSIONER AHEARNE:
Yes, but in '77 you had 22 done the calculation directly.
This time you have not.
23 This time --
24 MR. MILLEE:
But not on a staff year --
l 25 COMMISSIONER AHEARNEs No, no.
I am not talking l
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ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
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(1 1 about the staff; I am talking about the average.
- Because, 2 for example, I look. across your tables here and you have got 3 the same average percentage increase in all of the items f #r
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4 every office.
So you are saying that NRR has increased the 5 same way ICE has increased, the same way NMSS has increased, 6 the same way the Licensing Boards have increased.
7 MR. MILLER:
Well, that is true.
That is an 8 actual f actor that we have provided, because you would apply 91n '78 the same salary increase for each of the offices.
10 COMMISSIONER AHEARNE:
The average professional 11 staff salary is going to have had the same percentage 12 increase as every one of those of fices, assuming there is 13 absolutely no change in the mix or the grade structure in 14 each of those offices.
15 COMMISSIONER GILINSKY:
But isn't that sort of 16 setting down --
17 CHAIRMAN PALLADIN0s To a fine point.
18 COMMISSIONER AHEARNE:
The point is, why calculate 19 from a point f our years ago, rather than calculate it 20directly?
21 CHAIRMAN PALLADINO:
The resson for my question is Z2 to present the defensible picture, because I think we are 23 going to be challanged on a lot of these, and I would hate 24 to see nitpicking over percentages.
25 MR. DIRCKS:
I think we could pick the assumed ALDERSoN REPORTING COMPANY,INC, 400 VIRGINI A AVE. S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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4 1 costs of the professional staff year in '77 and add on the 2 pay rai ses.
3 COMMISSIONER BRADFORD What turns out to be --
([
4 MR. MILLER:
I think it turns out to be the same.
5 CHAIRMAN PALLADINO:
We may be conservative.
8 MR. MILLER 4 I think we are.
7 COMMISSIONER BRADFORD:
What turns out to be the 8 number you multiply 2'7.6 by?
Or is not the way you make the 9 calculation?
10 MR. MILLERa Yes, it is.
For NRR it is what, Jim, 11 about --
12 MB. HOLLCWAY:
$50 an hour.
13 MR. MILLER:
It is slightly different for ICE eaa 14 the diff erent offices.
15 COMMISSIONER'BRADFORD:
Bitt it works out on 18 balance to be about 590,000?
17 MR. MILLER:
About $90,000.
18 COMMISSIONER AHEARNE:
According to the back, it 19 is,$91,504.
20 COMMISSIONER BR ADFORD:
That is for --
21 MR. MILLER:
For a professional.
590,000.
But 22 tha t is not what you multiply the 27.6 by?
That is what you 23 aultiply the 16 to 19 by?
24 MR. MILLER:
Yes.
Those are the actual computed 2S i.% rge s there that you see up there.
The way that $28,000 ALDER $oN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W, WASHINGTON, D.C. 20024 (202) 554 2345
30
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1came about is you_took your $90,000 times the hours that we 2 gave them, the manyears.
3 COMMISSIONER BRADFORDa Yes.
And then you used 4 some other number for the nonprofessional?
5 MR. MILLERS No.
- hat rate of $90,000 for the 6 professional takes into account everything from lights, 7 paper, supervision, management, e ve ry thing.~
That is all 8 billed travel.
That is all billed into that rate.
9 COMMISSIONER BRADFORD4 Okay.
10 COMMISSIONER GILINSKY Could I just ask?
What is 11 the NRR budget f or
'82, if I may display my ignorance in 12 front cf John here.
13 (Laughter.)
( _
14 MR. DIRCKS In terms of people?
Ed?
15 COMMISSIONER GILINSKYa Just a to tal budget.
16 People and technical services.
17 MR. TRINER:
What was the question?
18 COMMISSIONER GILINSKY:
I would like the total 19 budget for NRR.
20 MR. TRINER:
For NRR it is $64 million from the 21 blue book, and then we were reduced.
That was the blue 22 book, and then of course there was a change.
23 COMMISSIONER GIIINSKYa What is the NMSS budget?
24 MR. THINER:
NMSS, the blue book was $27 million.
25 COMMISSIONER GILINSKY:
And ACE?
3 ALDERSON REPORTING COMPANY,INC, 400 VIRGIN 4A AVE., S.W WASHINGTQN, D.C. 20024 (202) 554 2345
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i MR. TRINER:
IEE was $6u.6.
2 COMMISSIONER GILINSKY:
We seem to be capturing a 3 fairly healthy portion of NRR, but practically nothing in 4 NHSE.
As I remember, one of the budget items was to help 5 with the materials licenses, and I would assume every bit of 6 t h at --
~~
7 CONHISSIONER AHEARNE:
I want to get into the NHSS 8 question.
My understanding is that you have not done much 9 with NHSS.
10 COMMISSIONER GILINSKY:
And finally, IEE.
11 HR. DIRCKS:
The NMSS budget, you must remember, a 12 good deal of that is in vaste management.
13 COMMISSIONER GILINSKY I understand that.
It may 14 be you would end up with a smaller fraction of it, but I am 15 just surprised tha t it'is $1 million.
I think ICE would tohave, if anything, a larger fraction than NRR because ICE is 17 not working on generic requirements; they are just 18 inspecting individual facilities.
19 CHAIRMAN PALLADINO:
Kevin?
20 MR. CORNELL:
This may be a partial answer to the 21 point you are raising.
In '77 when the schedule was based 22 there were certain activities that were not coveu ni.
I've Z3 got dollar figures associated with those in
'77.
If you 24 prorate those up to our budget which has doubled since then, 25 tha t will give you a f eeling of why some costs are not --
ALDERSoN REPORTING COMPANY,INC,
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1 why the amount we nre recovering is consider ~ ably a small 2 per_centage.
3 Virtually all of Research is excluded.
Generic 4 licensing in '77 was $30 million.
That is licensing work 5 related to numerous licensees, not identified f or one.
If 6 you double that, that is another $60 million.
7 Standards and code development, $16 million.
8 Safeguards -- non-casework safeguard work was $7 millions 9 contested hearings was $5 million; then you've got about 10 another $10- to $15 million, maybe $20 million connected 11 with --
12 COMMISSIONER GILINSKY Are we not charging f or 13 our participation in hearings?
14 HR. CORNELL:
In contested hearings.
15 COMMISSIONER GILINSKY Why not?
I mean, what we 16 are doing is helping the utility get its license, as far as 17 I can see.
18 COMMISSIONER AHEARNE:
That is another --
19 MR. MILLER:
We have been advised both by the 20 Commission and the legal staff that we could not recover 21 those costs.
22 COMMISSIONER AHEARNE:
Let's see, now.
When you Z3 say the Commission advised you you could not cover them, you 24 mean the previous Commission?
25 MR. MILLER:
Past policy.
ALDERSoN REPORTING COMPANY,INC, 400 VIRG!NIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554 2345
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1 3R. DONOGHUEs Past policy, yes.
2 MR. FONNER:
The legal constraint was, a s I 3 recall, one which was suggested by OGC that there was nc s
4 control by the licensee or the staff over the duration and 5 content of a contested hearing; that it would appear 6 inappropriate, if not illegal, to pass that cost on to the 7 applicant, the contested hearings resulting primarily f rom 8 intervention by third parties.
9 COMMISSIONER AHEARNE:
Is it obvious that it has 10 to be passed on to the applicant?
11 NR. FONNER:
We have to pass it on to an 12 applicant.
We cannot pass it on to a member of the general 13 public.
14 COMMISSIONER AHEARNE:
Why?
15 HR. FONNER: 'Because they have no application.
16 They are not requesting a service from us.
They are 17 contesting the provision of the service.
18 COMMISSIONER AHEARNE:
They are requesting a 19 provision of the service, aren 't the y, in some cases?
20 MR. FONNER:
You have raised a question which I 21 th' ink I would like to sleep on for about three or four 22 weeks.
23 (Laughter.)
24 COMMISSIONER GILINSKY You are talking about 25 charging other parties?
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) $54 2345
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(
1 MR. FONNER:
Charging intervenors for 2 intervening.
3 COMMISSIONER AHEARNE:
Or charging for some of the 4 services provided by the staff.
If the issue is'the NRC 5 Staff providing time, it just seemed to me your answer 6 seemed to be that obviously there would be a charge against 7 the applicant, and I was just raising the question of why 8 that is obvious.
9 MR. FONNER:
I think we are precluded now, the 10 Staff is, by the Commission f rom charging a fee f rom the 111ntervenors.
They pay their own way.
12 COMMISSIONER AHEABNE:
But this is staff time tha t 131s spent.
I was just reading the statute that I think 14 underlies this.
It was not clear to me that it specifically 15 identified an applicant for lic.ense.
16 COMMISSIONER GILINSKY When you objected earlier 17 about the role of the staff in the hearing, let me just 18 expand on that.
Typically the staff does not go to hearing 19 unless it has come to some agreement af ter the negotiating 20 process with the licensee.
Thereafter - -that is not true 21 100 percent of the time, but it is largely true --
22 thereaf ter, the staff and the licensee are by and large in 23 agreemen t.
In many cases it seems to me the staff does not 24 have to participate in the hearing.
The licensee would 25 carry the load.
Our participa tion is in many ways -- the ALDERSoN REPORTING COMPANY,INC.
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400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
35 f,
1 participation of the staff as a party is in the form of 2 assistance in proving the case for the licensee, or helping 3 the licensee's case.
4 COMMISSIONER AREARNE:
Oftentimes, thougn, it is 5 responding to a number of contentions, and in some cases 6doing analyses on those contentions.
7 CORMISSIONER GILINSKY Oh, yes.
It does not 8 cover the whole gamut, but I think a rough generalization is 9 reasonably accurate.
10 CHAIRMAN PALLADINO:
I think this is a rather 11 tricky area in which to draw any conclusions.
12 COMMISSIONER AHEARNE:
Underlying it all, though, 13 I think Vic has got a very good point.
It just seems odd j
14 the small percentage that is covered.
My comment is:
ICE 15 may have a magnificent manpower tracking system.
I don't
~
16 know where all their money is going.
17 COMMISSIONER GILINSKY I think it is going to 18 inspect facilities.
I did not mean to suggest that they are 19 not doing their job.
20 COMMISSIONER AHEARNE:
But it does not show up 21 here.
22 COMMISSIONER GILINSKY:
My feeling is that a lot 23 more of ic ought to show up here.
24 CHAIRMAN PALLADINO:
Let me ask a different 25 question, if we can leave this one for the moment.
Why do ALDERSoN REPORTING COMPANY.INC, 400 VIRGINIA AVE, S.W., WASHINGTON, D.C. 20024 (202) 554-2345
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1 some of the lower limits go down on this chart?
Maybe there 2 is an obvious answer?
3 MR. MILLERS Well, as you can app reciate, if you
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j 4 look under your " current range," those were average costs 5 that were provided to us back when we developed the schedule 61n 1977.
If you look at your right-hand side, those are 7 actual costs.
8 Now the only thing that I can conclude in talking s
9 with the people is that there has been a refocus of effort, 10 emphasis, in some instances caused by Three Mile Island, and 11 one thing or another, but it is just a refocusing of 12 effort.
Because on the lef t, you had an average cost.
13 CHAIRMAN PALLADIN0s For example, " routine 14 safeguards inspections per year," you started at 59500.
Now 15 ve are talking about $1900.
16 MR. MILLERS Right.
17 CHAIRMAN PALLADIN04 I was just wondering why that 18 limit went down, f or example.
19 MR. MILLER 4 Mr. Chairman, the only thing I can 20 say is that in discussing it with the Staff, there has been l
21a change in emphasis.
Those were average-cost figures back 22 in 1977 when the safeguards program was a relatively new 23 program.
24 CHAIRMAN PALLADINO:
Well, if you look at routine 25 saf ety inspections, the lower range went from $60.4 to $36.9 l
l ALDER $oN REPORTING COMPANY. INC.
400 VIRGINIA AVE S.W. WASHINGTON D.C. 20024 (202) 554 2345
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1 thousand.
Is that right?
2 ME'. MILLER:
Yes.
You see, again if you look at 3 the $60,000, that was a fixed average fee for a second unit
(]l; 4 at a site.
Now some second units would cost more, even at 5 that time, and some would cost less because it was an 6 average fee.
7 What you see on the right-hand column is the 8 sta,rting point in actual costs.
Am I making myself clear?
9 CHAIRMAN PALLADINO:
Not quite.
10 MR. MILLER:
The sixty 11 CHAIRMAN JALLADINO:
Sixty was not the lower 1211m'it?
13 MR. MILLER:
Sixty was the average fee uhere there 14 were multiple plants at a site.
It was an average cost.
4 15 COMMISSIONER ~ ROBERTS:
"Fe e" or "co st" ?
16 MR. MILLERa Fee.
An average fee.
17 COMMISSIONER ROBERTS An average fee?
18 MR. MILLER:
That is correct.
And in one 19 instance, it may be considerably less, down to $16,000, and 20 another might have been up to $75,000.
21 CHAIRMAN PALLADINO:
Are you saying you changed 22 the way you computed these ranges?
23 MR. MILLER:
Yes.
As a matter of fact, what you 24 had there was average cost -- fees based on an average 25 cost.
W e might have developed that $60,000 by taking five ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554 2345
38 i
1 concurrent plants a,nd averaging the cost.
That was the 2 fee.
That was the system at that time.
j 3
Now we are changing our method of charging, and we 4 go to actual costs.
5 COMMISSIONER AHEARNE:
Actual " average" cost.
6 CHAIRMAN PALLADINO:
Would this range -- the lower 7 end went down on one, two, three, four, five of these, and 8 that seems strange.
9 COMMISSIONER AHEARNE:
No.
You would expect that 10 because if the previous was always an average, you would 11 have expected that there would be some below that average.
12 So you would expect, if you now have a range that includes 13 not an average but an actual range, it is not now picking up 14 all those costs.
15 CHAIRMAN PALLADIN0s But I would expect the costs 16 would have gone up somewhat and not have the significant 17 dif ferences as one of these would imply.
18 MR. MILLER:
You see, Mr. Chairman, the average 19 costs for a nuclear power plant at a site where there was 20 one plant was $75,700.
But in actuality, if you looked at 21 that, it would take say 20 plants.
One may cost you T35,000 22 to inspect for the year, where another one in some instances Z3 was up at roughly $140,000.
So those 20 plants would fall 241n between with the $75,000 being your average cost.
That 251s the way we assessed fees before.
ALDERSON REPORTING COMPANY. INC,
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t 39 I) 1 CHAIRMAN PALLADIN0a When you came up to.the OL 2 review, was that' average, again?
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ll MR. MILLERa OL was based on an actual cost, but 4 there was a ceiling.
5 COMMISSIONER ROBERTSa That is my question.
Under 6present Commission rules and practice, is this right-hand 4
7 column of the current range the maximum that any licensee 8 would pay f or any one of these activities?
9 MR. MILLER:
That is correct.
That is the cap per 10 max.
That is right.
In other words, for a year's time for 11 routine safety they would pay no more than $75,700.
For J
12 inspection, if it cost $300,00n, they would still pay that 4
13 because that is the cap.
i 14 COMMISSIONER GILINSKY:
Why is that the cap?-
15 MR. MILLER: 'The regulations provided that.
The 16 Commission decided tha t in '77 when this schedule was
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17 developed that they would put on the ceiling.
18 CHAIRMAN PALLADINO:
But there is no cap over on 19 the right-hand column.
20 NR. MILLER:
That is correct.
We are proposing 21 now that the cap be removed.
22 COMMISSIONER ROBERTS:
I have a lot of difficulty 23 wit h th a t.
I certainly agreed with your opening statements b
24 about wanting to simplify and update obviously figures that 25 were used in '77 that bear no relation to reality today.
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1 But just as a management practice, I question -- I am sure 2 it is difficult to determine an appropriate maximum figure 3 for all of these endeavors.
I do not deny the difficulty in i
4 doing that.
But I just do not believe -- We cannot send 5 people a charge for our services without any element of 6 predictability.
7 What sort of incentive is there for us to carry 8 out our operations efficiently if we are just going to send 9 the utility a bill for services rendered?
I think it is 10 dreadful on the surf ace.
I am willing to be persuaded, but III really, just on the first blush, cannot conceive of our 12 not having some maximum figure.
1 13 Certainly there are going to be some plants that 4
14 require much less time for CP review or whatever, but I have 15 a lot of difficulty in this open-ended concept.
to COMMISSIONER GILINSKY Well, there is some check 171n the f act that you are accountable for all of these, and 181f someone screams --
19 COMMISSIONER ROBERTS:
I am sure there will be a 1
201ot of screaming.
But you know, Victor, you can get into 21 all sorts of arcane arguments about what are costs.
22 COEMISSIONER GILINSKY:
I understand what you are 4
23 saying.
I do not necessarily disagree with what you are
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24 saying, but we do have to account for these.
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25 COMMISSIONER ROBERTS:
I understand that.
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1 COMMISSICNER GILINSKY:
I wonder whether a cap 2 would change the total revenue figures very much?
In other
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3 words, it depends on how you set it --
4 (Laughter.)
5 COMMISSIONER GILINSKY:
-- but it may be that 6 there are only one or two spikes above it.
7 COMMISSIONER AHEARNE:
Since a very large 8 proportion of the money comes in f rom NRR, depending on 9where you are --
10 COMMISSIONER GILINSKY:
Yes.
11 CHAIRMAN PALLADIN0s I have several other 12 questions related to that.
13 It seems that we are now including some things
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14 that really the applicant has no control over.
For example, 15 P AT and SALP are things that we generate.
What is the 16 rationale f or including those kinds of things?
17 MR. MILLER:
Well, the Commission guidelines 18 require that any service this agency performs for an 19 applican t or a licensee, that we recover the costs.
So 20 these are the services which presumably 21 CHAIRMAN PALLADINO:
Any service we invent that we 22 decide ought to be imposed on the licensee should be paid 23 for by him?
Is that the philosophy?
24 MR. MILLER:
Well, on our side of the fence -- and 25 this is the license fee side -- our feeling is that if it is ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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1 a service that is provided, it obviousIy must be a necessary 2 service and we move along to recover those costs.
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CHAIRMAN PALLADINO:
For example, when it came to 4 P AT, I am really not convinced that PAT is a service that is 5 as valuable as it is projected to be.
Now I am sitting on 6our comment side of the table.
I may not have shared views 7 on that yet, but it seems strange to says -Well, it is so 8 good that we ought to impose that as a fee.
9 MR. DIRCKS:
I think as long as it is a service, 101et's say it is an activicy performed by the agency that is 11 directly chargeable or attributable to the licensee, I think 12 ve charge f or it.
13 MR. MILLER:
Yes.
14
' CHAIRMAN PALLADINO:
So you are saying the 15 licensee is subject to any activity of this type that we 16 choose to do ?
17 COMMISSIONER AHEARNE:
I think th a t is.the wa y th e 18 law that underlies this reads.
19 MR. MILLER:
In essence, the court has said that 20 the Commission could recover full costs of services provided 21 to identifiable beneficiaries.
And any service basically 22 performed in inspection, licensing, approval, whatever that 23 service migh t be, provided this agency has made a decision 24 that it is necessary, then we can recover those costs.
And 25 quite honestly, I do not attempt to make any judgment of l
ALDERSoN REPORTING COMPANY. INC, 400 VIRGINIA AS.E S.W., WASHINGTON, D.C. 20024 (202) 554-2345
43 Ii 1other people's services.
2 CHAIRMAN PALLADINO:
This is a point I am raising
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3 more for our own consultation here.
4 COHHISSIONER BB ADF0ED s Is it clear that the court 5 decision says that you cannot recover costs that do not go 6 to a particular licensee but nonetheless go ' clearly to a 7 group of licensees?
Take for example LOFT., Supposing we 8 vere to say that LOFT was equally applicable to all PWRs and 9 billed it accordingly?
Is that clearly contravened by 10 anything in the decision?
11 HR. MILLER:
Bob might be able to speak to this 12 better, being an attorney, but I would think that if you can 13 in f act take a chunk of dollars, for want of a better way of 14 saying this, and be able to identif y licensees that received 15 that service, if you could come up with a reasonable method 16 of apportioning it, you could recover the costs.
17 Do you agree with that, Bob?
18 HR. FONNER:
Yes, I agree with that.
I don't knov 19 how OGC comes out on this one.
I agree with tha t, but I 20 have always felt tha t we are pushing the independent offices 21 appropriations to their utmost extreme and I think creating 22 vulnerabilities where we do not want them.
23 CHAIRMAN PALLADINO:
It is what?
24 MR. FONNER:
If we start to take costs like LOFT 25 and then try to attribute them to individual licensees, I ALDERSoN REPORTING COMPANY. INC, 400 VIRGINlA AVE., S.W., WASHINGTON, D.C. 20024 (202).554-2345
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1 feel uncomfortable with the risks that we might be taking in 2 jeopardizing our whole fee schedule to go that route.
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3 COMMISSIONER BRADFORD:
Why would it jeopardize 4 the whole fee schedule?
5 HR. FONNER:
Not the whole fee schedule; I'm 6sorry.
7 MR. BICKWIT I regard it as incurring risks, and 8 I regard it as on balance legal.
9 CHAIRMAN PALLADINO:
On balance what?
10 MR. BICKWITs Legal.
11 CHAIR'HAN PALLADINO:
I have a series of 12 questions.
Why can't wo consider research that benefits 1311censees as part of the fees.
You are saying that we can t
s 141f we can identify it to a particular class of reactors, and 15 identify the individuals in that class of reactors?
16 MR. MILLERS Basically what I think you would have 17 to do in these cases would be to set up a different type of 18 accounting system in this agency to tio your dollars more 19 directly to casework.
It would be very difficult to try to m do, I think.
21 COMMISSIONER GILINSKY:
We charged for Indian 22 Point, Lime rick, and Zion, for which I guess special 23 analyses are being conducted, risk analyses.
Would that 24 f all into the 25 MR. MILLER:
I am not tha t f amiliar with those i
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1 46 1 programs.
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.2 MR. DIRCKSa We have.
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3 MR. MILLER:
We charge fees for programs generated 4 doing risk analyses.
5 COMMISSIONER AHE ARNE:
I think the question was, 6 these are programs done by a branch in the Research division 71n support of a review conducted by NRR.
8 COMMISSIONER GILINSKYa For specific reactors.
9 COMMISSIONER AHEARNE:
Very specifically oriented 10 to a set of reactors by name.
11 HR. MILLER:
I would assume not.
Normally we have 12 not recovered costs for programs where ve, the Commission, 13 generate a program to ga ther inf orma tion f or itself.
We 14 have not -- I am not that f amiliar with the program.
15 MR. DONOGHUE:
Was it to make a* licensing 16 decision?
17 COMMISSIONER GILINSKYs Rather than pursuing that, 181et me go back to ICE.
We are in a way capturing a large 19 portion of NRR's budget.
20 COMMISSIONER AHEARNE4 For the Reg Guides, you 21 compa red it to their current budget.
Probably the $28 22 mi? lion is a better comparison than the $40.
It is still a 231arge po rtion.
24 COMMISSIONER GILINSKY:
In any case, a larger 25 fraction than in the other offices.
They do have a certain ALDERSoN REPORTING COMPANY, INC, 400 VIRGINIA AVE, S.W. WASHINGTON. D.C. 20024 (202) 554 2345
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1 amount of generic work.
You could argue about where you 2 dra w the line.
3 MR. DIRCKS:
I don't know.
I just had a feeling
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4 thsi we had picked up on their cost data.
We picked up 5 their work.
If there is a gap --
6 COMNISSIONER AHEARNE:
I think NRR, at least 7 looking at this, is probably doing pretty good.
8 COHNISSIONER GILINSKY:
The categories you are 9 excluding from ICE are generic activities, standards, export 10 saf eguards, Agreement States.
They do not seem to me like a 11 very large fraction of IEE's effort.
There is a lot of 12 generic work at NRR.
13 COMMISSIONER AHEARNEa You'd better take back ths t 14 sta tement about --
15 (Laughter.)
to COMMISSIONER GILINSKY:
I find it puzzling that 17 you are only capturing, I don't know, what, 25 percent, or 18 2 0 percent of the total, and a much smaller portion than you 19 are capturing in NRR.
Don't you find that surprising?
20 HR. DONOGHUE:
Almost all their work is related to 21 some specific licensee.
22 CHAIRMAN PALLADINO:
Do you think your numbers are 23 right on IEE?
They just seem low.
I expect that if you 24 cot the right rate, and if you got the right hours, you 25 ought to come out higher because, as you say, most of their ALDER $oN REPORTING COMPANY,INC, 400 VIRGLNIA AVE, S.W. WASHINGTON. D.C. 20024 (202) 554-2345
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t 1 work is connected with a pa rticular licensee.
2 MB. MILLER:
Well, the numbers that you see there
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3 projected revenue is based -- you know, it is based on 4 estimates and past efforts.
So we try to project in the 5 future as to what night happen.
But these are projections
- and estimates.
7 COMMISSIONER AHEARNE:
Do you have a column for 8 some previous year, whether it is FY '81 or FY' 807
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9 ER. MILLER:
Do you have it, Jim?
10 MR. HOLLOWAY:
Which one?
11 ER. MILLER:
'79
'80.
Do you have any previous 12 year?
13 ER. HOLLOWAY4 Currently it is $7 million on 14 routine inspections that were recovered from IEE.
15 COMMISSIONER AHEARNE How about NRR?
16 MR. HOLLOWAY:
It depends on how many OLs and cps 17 they issued.
18 MR. DONOGHUEs A total of $1n million last year.
19 MR. MILLER:
A total of $6 million?
20 MR. HOLLOWAYa Slide three has the collection 21 fig u r 9s.
22 COMMISSIONER AHE?RNE4 Slide three has the 23 estimated collection.
I was trying to compare it to the 24 real collections.
25 MR. MILLER:
He vanted earlier years.
ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W. WASHINGTON. D.C. 20024 (202) 554 2*M
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1 MR. HOLLOWAYa In fiscal '81 our collections were 2 about 512.5 to 513 million, of which 57 million comes from 3 ICE, $1 million from NMSS materials, and the remainder would 4 be, what, 54 million, something like that?
5 COMMISSIONER AHEARNE:
54.5 million.
8 MR. HOLLOWAY:
That would be from NRR.
7 CHAIRMAN PALLADINO Now for '82?
8 MR. MILLER:
'82 is the numbers we have here 49 9 million under the current schedule for NRR, and 71 million 10 for NHSS, and 57 million for ICE.
11 CHAIRMAN PALLADINO:
ICE only went from 57 to 49 12 '81 to '82 projected.
The NRR vent from 54.5 to 540.
13 MR. HOLLOWAY:
It is the billing.
14 MR. DONOGHUE:
We are going back and picking up 15 the work that has been performed in prior years and billing 18 for it as soon as this schedule is approved.
So it shows a 1/ big spike in '82 for that reason.
18 CHAIRMAN PALLADIN0s Are you going to do that for 19 the others?
20 MR. DONOGHUE:
For NMSS ve would.
21 CHAIRMAN PALLADINO:
How about ICE?
22 COMMISSIONER AHEARNE:
ICE is billed on 23 inspections.
24 MR. DONOGHUE:
They are billed on an inspection 25 basis.
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CHAIRNAN PALLADINO:
You are saying we should look 2 at the twenty-eight as more reasonable?
3 COMMISSIONER AHEARNE:
Right.
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4 CHAIRMAN PALLADINO That is still quite a chunk 5 compared to the seven to eleven; more like five, whereas the 6other one is not even two.
7 (Slide.)
8 CHAIRMAN PALLADINO:
Why are we not changing fees 9 f or radioiso tope licenses, not even by an amount for the 10 inflation f actor?
11 MR. HILLER:
We have not proposed to change them 12 at this time at this juncture for a couple of reasons.
One 131s that eventually we would like to get them on an 4
14 actual-cost basis, but we have to sit down and work with the 15 people in NHSS to see if we can go that route.
Currently 16 they do not charge time to a docket basis as do the other 17 of fices.
ICE an'd NRR charge to a broad category.
18 For example, in Vandy 5111er's shop they would 19 charge all radiography work.
There are about one-hundred 20and some odd radiography licenses they work on.
They would 21 charge all their time to one program code.
22 Another example would be to code for hospitals.
23 We have about 1400 hospitals.
So they do not charge to a 24 particular docket.
So that we could obviously 25 CHAIRMAN PALLADINO:
I was thinking that you could ALDER $oN REPORTING CCMPANY. INC.
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1have at least gone up by an infla tion f actor.
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NR..EILLER:
Yes, wri could; but we felt it would 3 be better '
go bsck and relook at all these 8000 small 4 licensees.
5 CHAIRNAN PALLADINos You do them -by categories.
I 6 don't want to be critical of the syste's.
That might be a 7 good system, but if inflation has carried the costs higher, 8 why shouldn't they go up by at least that inflation factor?
9 COMMISSIONER AHEABNE:
Would that bring you into 10 the Regulatory Flexibility Act?
11 ER. MILLER:
Small business, yes.
12 COMMISSIONER AHEABNE:
They have said there is no 13 impact on the Regulatory Flexibility Act.
It is not going 14 to come into play because there is no impact on these small 15 business individuals.
If you do the radisisotope thing with 16 the percentage increase thing, they can no longer say that.
17 CHAIRMAN PALLADINO:
But then what would happen if 18 you could no longer say that?
If we went up and it affected 19 small business, what would we have to do?
20 MR. MILLER:
We would have to go back and see what 21 the impact on small business was and, f rankly, get a lot of Z2 hell raised.
23 (Laughter.)
24 COMMISSIONER AHEARNE:
I think you are thinking 25 back to
'77.
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1 MR. MILLERS About 10 years of it.
2 COHHISSIONER GILINSKY:
Let me ask you what 3 fraction of those costs are being recovered, roughly?
{S 4
HR. MILLER:
Roughly 3 percent.
That is off the 5 top of my head.
6 COMMISSIONER GILINSKY:
Less than 107 7
HR. HILLER:
Yes.
8 COMMISSIONER GILINSKY:
For the small licensees?
9 MR. HILLER:
It is in there somewhere.
10 5R. DONOGHUE:
But the Commission has always kept 11 the fee below the figure of the actual cost.
12 COMMISSIONER AHEARNE:
A factor of 10, 207 13 3R. DONOGHUE:
Pretty close.
This is a policy 14 decision.
15 CHAIRMAN PALLADINO:
Even though you say it 16 aff ects small business, somewhere along the line you have 17 got to affect small business.
18 COMMISSIONER GILINSKYs I say we do a study.
19 COMMISSIONER AHEARNE:
Yes.
I don't like the idea 23 of automatically putting that tremendous discount factor on, 21 particularly when you tell us it is Commission policy, 22 because I would rather not,have that be the defense unless 23 ve had participated and agreed.
24 MR. DIRCKS I think it is a continuation of what 25 ve said earlier.
This is no change.
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COMMISSIONER AHEARNEa I understand.
I aa not 2 criticizing.
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COMMISSIONER GILINSKYs Two phases.
4 MR. DONOGHUE:
We would look at this as the second 5 phase.
The increased revenues are more likely to occur in 6 the major licensing effort.
Then we can look at the 7 aaterials licensees on a longer teen basis.
Loss in revenue 8would not be significant.
9 MR. DIRCKS:
You've got some really significant 10 tricky analysis on this radioisotope licensing.
You've got 11 to look at hospitals, and the cost / benefit of patient care, 12 what it means to medical care, and so on.
13 COMMISSIONER AHEARNE:
Except tha t we are charging n
14 this cost, and I don't understand why we don't just make it 15 an initial proposal to try to recover that.
16 Y'd. MILLER :
Well, it was our intent to try to get 17 this paper through where these are your big dolla rs, big 18 money.
There are mora licenses.
On the other side, there 19 are over 8000 in Vandy Miller's shop.
But on the other 23 hand, budget-wide, dollar-vise, not that much money.
21 But it is our intent to go back and to examine 22 each of the ca tegories and see if we cannot simplify that.
23 I don 't know whether we vill be going to actual cost or 24 wha t, but to come back to the Commission with a separate 25 paper on that.
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1 CHAIRMAN PALLADINO:
Suppose we did just want to 2 go up by some reasonable inflation f actor?
What would we 3 have to do to get by the flexibility Act, or this small 4 business Act?
You say we would have to prepare an impact 5 statement on what impact it is going to have?
What the Simpact is, their prices are going to go up, and are going up 7 perhaps less than their other inflation costs?
8 HR. MILLER:
I suppose if you just added a small 9 roughly 20 percent for recovering these years similar to 10 wha t you had here, the impact probably would not be tdo 11 great.
But again, I must say, not being an attorney, Bob 12 would know more about what we could do or --
13 HR. FONNERa I don't think the question is t'
14 answerable unless you do at least some preliminary work to 15 find out wha t the dollar impact of that rise would be.
16 CHAIRMAN PALLADIN0s Do I understand correctly 17 t ita t you are proposing that we not make any change on the 18 radioisotope licenses?
19 HR. HILLER 4 At this time.
20-CHAIRMAN PALLADINO:
At this time.
You are going 21 to study it and perhaps come back with a separate proposal?
22 HR. DONOGHUE:
Yes.
23 COMMISSIONER AURARNE:
You wouldn 't care to make 24 an estimated date when you are going to come back with this 25 other proposal, would yCu?
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(Laughter.)
2 COMMISSIONER BRADFORD:
Guidance might be 3 helpf ul.
4 COMMISSIONER GILINSKYa Why is that such a big 5 deal to do a study?
You don't have to look at,every 6 licensee.
7 MR. DONOGHUE:
We can look at the categories.
8 COMMISSIONER GILINSKYa Just get a sense of what 9 the impact might be.
10 MR. MILLERa We could.
Le t's see, if we don' t 111ntend to go back and reestablish all the categories and 12 tha t kind of detail, if you are just talking about looking 13 simply a t the impact, a couple of months.
14 COMMISSIONER GILINSKY Let's do it.
15 CHAIRMAN PALLADINO:
I just wrote down, "will 16 study."
17 COMMISSIONER AHEARNE:
A couple of months tuns out 18 when?
19 MR. DONOGHUE:
At the end of the year.
20 COMMISSIONER AHEARNE That's calendar year?
21 CHAIRMAN PALLADINO:
I was willing to write "will 22 study and report in February."
23 MR. MILLER:
That sounds even better.
24 (Lauchter.)
25 CHAIRMAN PALLADINO:
Well, I am going to write ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. O.C. 20024 (202) 554 2346
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([1 1 " February," but if you beat it that would be fine.
Is that 2 reasonable?
I don't i at to put an impossible task on you.
3 MR. DIRCKS:
I think you will have a lot of help 4 from the American Medical Association, and the American 5 Hospital Association.
They will be happy to provide us the Simpact.
7 COMMISSIONER GILINSKYs Other philanthropic 8 organizations.
9 (Laughter.)
10 CHAIRMAN PALLADINO:
You have given no rationale 11 for the change of policy to charge for applications or 12 requests stemming from Commission orders.
What rationale 13 would you give, if you were asked to give one?
/
14 MR. MILLERa Well, we did in the paper.
15 CHAIRMAN PALLADINO:
I don't recall.
16 ER. MILLER:
Back when we developed this rule in 17 ' 76,
'77, in working with NRR, which encompasses work with 18 all these of fices, there were very few instances where ' Part 19 II orders were issued.
And as a result of Three Mile Island 23 and other things, now there is a tremendous number of orders 211ssued, and a lot of amendments and so forth generated 22 because of that.
23 We feel that there is a lot of amendmants, and a 24 lot of approvals, and so forth, which re'.. ate to safet's which 25 presently under the present rule are being exempted.
We l
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1 just simply feel that they are really no different than 2 rule-of-the-mill types of amendments, and so forth, and ther 3 should pay.
4 CHAIRMAN PALLADINO:
Haybe the rationale is 5 there.
It did not seem to me to be as clear as it might be.
1 6
Incidentally, if we ask for a study and the study 7 con =_s in, io we charge them for reviewing the study?
Is 8 that a service?
9 HR. MILLER:
No.
10 CONNISSIONER AHEARNE:
Wouldn't that depend?
11 HR. MILLERS I guess it would depend.
If you were 12 talking about a topica report, we would.
13 CHAIRMAN PALLADIN04 As part of the TMI Action 14 Plan, for example?
15 COMMISSIONER AHEARNEs Let us say that the issue 16 was that the licensee ought to put in a filtered vented 17 containment, and tha t was the challenge, and it was clear 18 that the Commission was about to do that.
And instead, the 1911censee and the staff got together and said4 Instead of 20 the licensee being ordered to do that, we have worked out a 21 com promise.
The licensee will do a study of the advantages 22 of doing th a t.
We are going to submit it to NBR, and NRR is 23 going to review it.
24 I would think that in that case that ought to be a f
l 25 cha roe.
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CHAIRMAN PALLADINos Well, I was thinkinc of we 2 request some study on a particular reactor with regard to e
3 pressurized thermal shock.
We get the report back and we 4 study it.
would that be a charge we would make?
I am dest 5 trying to get a feel for the scopo of these things.
6 COMMISSIONER AHE.4RNE:
I don't know.
7 HB. HILLER 4 If the Commission sees a problee and 8 goes out on something dealing with safety, yes.
On the 9 other hand, we have had a number of instances where they go 10 out to gather licensing data, procedural type information, 11 improvement of licensing, things of that nature, no.
But if 12 there is a safety problem, if we go out to a specific 13 licensee and tell them to do something a:1d submit it, under
(
14 those circumstances normally there would be a charge, yes.
15 There always has been.
16 COMMISSIONER AHEARNE:
Can you differentiate that, 17 then?
In tracking under NRR, there is an area of Commission 18 o rders, new applications for license, and that is going to 19 be excluded?
That is not going to be included in the 20 schedule ?
21 MR.. MILLER:
What we are currently doing under the 22 current schedule, if the Commission issues an order -- this 231s what I was talking about earlier -- a Part II Crder and 24 requires the applicant to come back, the licensee to come 25 back with a request for an amendment to change something, l
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1under the current regulations we do not charge for that 2 amendaent.
3 What we are proposing here is that in the future 4 we will charge for it.
5 COMMISSIONER AHEARNE4 I wasn't talking about 6 tha t.
7 MR. MILLER:
In the second instance, I think the 8 one you are getting to, what you get into --
9 COMMISSIONER AHEARNEs What I an asking about is 10 the part where it says, "The Commission orders no 11 application from the licensee," and tha t will be excluded.
12 dR. MILLER:
Tnat's right.
13 COMMISSIONER AHEARNEs And I was wondering why you 14 would exclude it.
The case I was thinking of, we issue many 15 orders which are confirmatory orders, in which case there is 16 no application af ter it.
After negotiation, which in many t7:ases has taken some length of time between the staff and 18 the licensee, the staff has reviewed a number of proposals 19 the licensee has made, and they have done a lot of 23 examination of the issue, and the way that that agreement is 21 finally put in place is a confirmatory order.
There is no 22 further application f rom the licensee.
23 Now I would read this as saying that all that 24 negotiation work done by NRR is excluded.
25 MR. MILLER:
Yes.
I guess the reason we did ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE, S.W WASHINGTON. D.C. 20024 (202) 554-2345
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Ithat-- the reason I proposed it, here again I would yield to 2 the lawyers, but s I understand the court's position, if an 3 applicant does not request the Commission to do something, 4 or file an applica tion, if we do not have something on file 5from an applicant, then we can't -- is my logic flawed 6there, Bob, or is it right?
7 MR. FONNER:
' dell, as I recall, historically one 8 of the reasons for not including in the fee schedule 9 licensee responses to orders under Part 2, 2.204 orders, to this was at the request of NRR.
I am not certain today what 11 their logi was.
12 (Laughter.)
13 MR. FONNER4 The Commission guidelines which were
(
141nvolved in the Mississippi Power C Light case, I would 15 suggest, vould include'the opportunity to bill for such 16 orders.
17 In administration of the fee schedule in its 18 earlier years, we had a number of difficult decisions to 19 make because liRR did act write orders in a consistent 20 manner.
Some orders said to the licensee, "do I, B,
C."
210thers said, "cive us a repor?. on how you are going to do A, 22 B, C. "
Then there would be a subsequent amendment.
23 Sometimes we had a hard time deciding how we were
( _
24 going to administer the current rule which says:
If you 25 have an action resultino from a Commission order, you do not k
i l
ALDERSON REPoRTE40 COMPANY,INC, 400 VIA'"MIA AVE, S.W. WASHINGTON, D.C. 20024 (202) $54 2346
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1 charge for it.
2 Now I think what is being proposed is just to
{
3 eliminate the whole area of difficulty.
4 dR. MILLER:
Right.
5 COMMISSIONER AHEARNE:
Sut I gather from your 8 answer you do not automatically say that the courts ruling 7 would not allow us to charge for the work NRR does 8 preparatory to that confirmatory order?
9 MR. FONNER:
I would like t'o not have to answer 10 that.
11 (Laughter.)
12 HR. FONNER:
Are you talking about work that the 13 staff does before issuing the order?
i 14 COMMISSIONER AHEARNE:
I am talking about, at 151esst in the last two years, I have seen a great many tocircumstances where what has happened is the NRR has worked 17 extensively with a licensee to negotia te out a settlemont--
18 MR. FONNER:
Yec.
which in some cases has 19 COMMISSIONER AHEABNEa 20 required a lot of work on the part of NRP to review 21 proposals, evaluate them, criticize, comment, modify.
The 22 final action, the only formal agency action, is a formal 23 order and there is no response required from the licensee.
24 I would read this to say that therefore all that l
25 preparatory work is nonchargeable.
l i
i ALDER $oN REPORTING COMPANY. INC.
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- 59. FONNER:
I think it could be charged.
2 Personally, I think the situation is very analogous to if, 3 instead of the negotiation, you requested the licensee in
{'
4 the first instance to submit an amendment application 5 requesting the way they would like to see the issue-6 resolved, and then we could clearly be able to charge.
7 CONNISSIONER AEEARNE4 That's what I thought.
8 HR. BICKWIT I would say that the Commission has 9 a lot of flexibility.
Whether it is a confirmatory order or i
10 a regulatory order, it is analogous in my view to an 11 inspection.
The licensee never asked for the inspection s it 12 never asks for the order.
In either case, I think under the 131anguage of the opinion, even though there is some 14 incidental public benefit, they say that there is a benefit 15 to the licensee.
16 COMMISSIONER AHEARNE:
Yes.
17 ER. BICKWITs I also want to say that with respect 18 to the contested hearings, analysis of OGC, I think the same 191ogic applies to contested hearings.
20 I think that on that basis under that logic you 21 could impose a fee on the licensee even for the 22 par ticipa tion-- I'll get to your point, Vic -- even for the 23 participation of intervenors.
However, there is some 24 language in the Fif th Circuit case that suggested the 25 contrary.
ALDERSoN REPORTING CCMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554-2345
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1 As far as your point is concerned, I am kind of 2 with Bob.
That is one that I would want to spend some time 3 on before approaching it, and I would certainly want to take 4 a thorough look at the history accompanying the Act.
5 CH AIRM AN P ALL ADIN0 s Let me ask a general 6 question, Bill.
I don 't know who should answer it, but 7 recognizing the way we have increased the charges, and we 8 have expanded it, do you feel it is confident that we vill 9 do as well in the Appeals Court with this fee schedule as we 10 did in the old one ?
11 (Laughter.)
12 MR. MILLERS, I think 13 MR. DIRCKSs I think that is why we proposed it in 14 this form without major changes from what the Commission 15 approved and what was tested the last time.
How you add to 161t or subtract f rom it I will let the legal staff advise you 17 on that.
18 CHAIRMAN PALLADINO:
Maybe I am asking the legal 19 staf f.
20 MR. FONNER:
I would like to defer to OGC.
We do 2inot analyze risks of this major --
22 COMMISSIONER GILINSKY:
Of this magnitude?
23 (Laughter.)
24 MR. BICKWIT:
We reviewed the schedule and are 25 com fortable with it.
We are not anticipating difficulties ALDER $oN REPORTING CCMPANY,INC, 400 VIRGINIA AVE, S.W. WASHINGTON, D.C. 20C24 (202) 554-2346
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lin court.
We are anticipating litigation, but we anticipate 2 prevailing.
3 MR. MILLERS One of the things we have tried to do 4 is to stick within the guidelines in the court decision in 5 developing this schedule to avoid that difficulty.
8 CHAIRMAN PALLADINO:
I was going i to propose the 7 f ollowing.
~
8 COMMISSIONER AHEARNE:
I have a question.
9 CHAIRMAN PALLADINO Tha t we not try to vote now.
10 I think there needs to be quite a bit of reflection on some 11 of the answers that we got.
12 What I did want to ascertain is whether or not the 13 Commission wanted any revision of the approach?
For 14 example, the one that might find some support is to 15 re-examine the var you arrived at your new items, utilizing
~
18 actual costs rather than an increase by inflation.
17 Now is this the sense of the Commission to want to 18 do that?
19 COMMISSIONER AHEARNEs
- Yes, I would also really 2311ke to understand how IEE gets charged.
21 CHAIRMAN PALLADINO:
Well, okay.
l l
22 COMMISSIONER ROBERTS:
Yes.
23 CHAIRMAN PALLADING:
I think we have a feeling l
24 tha t you probably ought to go back and re-examine the basis j
25 for the fees using the actual average costs of the l
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1 professional staff.
2 COMMISSIONER GILINSKY:
Let's see.
Is there any g
3 f eeling that the answer is going to come out much 4 dif ferent?
5 CHAIRMAN PALLADINO:
I have a feeling it is going 6to be a much more defensible position.
That is why I asked 7 sy last question.
I have a feeling that if we do not use 8 our actual costs, there will be people who say Oh, you 9 have caps on all these raises; you didn't really increase 10 the amount.
And I don't know what else.
11 COMMISSIONER AHEARNEs I think they should, at 12 least with IEE, it ought to come out different.
13 COMMISSIONER GILINSKYs But I think the question 14 with IEE is dif f erent.
15 CHAIRMAN PALLADINO I was going to raise that as 16 the second point.
17 COMMISSIONER GILINSKYa Yes.
18 COMMISSIONER AHEARNEa The other I think ought to 19 be done just because I think it ends up being more 20 def ensible.
I don't think it is going to be much 21 dif fere n t.
22 CHAIRMAN PALLADIN0s It may even end up with 23 higher costs.
i 24 MR. DIRCKS:
I think it.vould.
25 CHAIRMAN PALLADINO:
But then a t least we would l
ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE. S.W., WASH!NGToN. O.C. 20024 (202) 554-2345
65 b) 1 know the basis is very good.
2 And then I do think it would be useful both to
{
3 yourselves and to us to get a feel for how many staff hours 4 we use in inspection applicable to particular licensees, and Sexpress that as a f raction of the total amount of effort in 6 ICE.
Then we can get a better feel for what ~ income we are 7 getting from that effort.
8 So I would propose that we not vote now; that we 9 get that information.
What sort of time would you need?
10 MR. DIRCKS:
We can do that fairly quickly, in a 11 couple of days.
12 COMMISSIONER AHEARNE:
ICE may take longer.
13 MR. DIRCKSs I think we have to find out in very
(
14 quick terms what we include in the IEE figure.
15 COMMISSIONER'GIIINSKY:
Yes.
It is really just 16 getting an idea.
17 MR. DIRCKSs It doesn't have to be an exhaustive 18 a na lysis.
19 COMMISSIONER GIIINSKI4 Of the categories.
20 COMMISSIONER AHEARNE:
But the question might end 21 u p being, when you probe a little bit, that you end up 22 finding there is a lot more tha t ought to be included.
And Z3 bef ore taking tha t big jump, they might want to be a little 24 acre comfortable with where they come from.
25 So let's say, for example, their next cut looks at I
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINlA AVE, S.W. WASHMGTON. O.C. 20024 (202) 554-2345
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159 million, and it ought to be $27.
Before doing that, I 2 think they would probably want to step back and.look at it a 311ttle more carefully.
4 CHAIRMAN PALLADINO:
Did you have another point?
5 COMMISSIONER AHEARNE:
I had one.other point.
I 6 noticed on page 4 of your paper you said that in the past 7 the Commission has by rule exempted from fees licenses
~
81ssued to federal, state, and local governments and 9 nonprofit educational institutions.
10 Now I did not see tha t explicitly addressed in the 11 proposal.
I assume they are still exempted.
Is that 12 correct?
13 MR. MILLER:
Tha t is correct.
We do not propose 14 to change them.
15 MR. DONOGHUE:
Other than power reactors.
16 COMMISSIONER AHEARNE:
I can understana the 17 f ederal because, as I understand the sta tute, that is 18 excluded.
But I don't understand why the rest are 13 excluded.
20 MR. MILLER:
I ha te to say this, but it was a 21 policy decision a number of years ago that the Commission 22 decided.
They were trying to encourage states to pick up 23 the Agreement States program in cooperation with the state i
24 agencies and the federal agencies, and so forth.
And since 25 a lot of these are state hospitals, state type programs, l
l ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W. WASHINGTON. D.C. 20024 (202) G54-2345 i
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1 they just decided that it would be good to exempt all 211 censes.
Most of them, obviously, are these small 3 materials' licenses.
4 COMMISSIONER AHEARNEa Do you have any rough 5 estimate of what the collars.are that are involved in this 6 exemption?
7 MR. MILLER:
I don't recall.
Do you, Jim?
It's 8not a lot.
We did go back and look at it a t one time.
I 9 can get you that number.
10 COMMISSIONER AHEARNE4 Okay.
I would be 11 interested in a rough number.
12 MR. MILLER 4 It's not a lot of money.
I would say 13 somewhere under $100,000, but don' t hold me to it.
It has d
I 14 been some time since I looked at it.
They are all the 1511ttle licenses, total.
Several hospitals and things like 16 tha t.
We're talking about $200 per license.
17 COMMISSIONER AHEARNE Now you had proposed to do 18 this re-evaluation of the fee every six months.
19 MR. MILLER 4 Pardon?
20 COMMISSIONER AHEARNE:
For example, the reactor 21 11eense s.
22 MR. MILLER:
Billing every six months.
That's 23 correct.
24 COMMISSIONER AHEARNE.:
And that is because it 25 will-- for example, why not every year?
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1 MR. MILLER:
Well, we could have done it every 2 year.
We have picked every six months because it would tie 3 the effort more closely to the billing process, and it would 4 help from a budget point of view, and it spreads our work 5 out.
6 COMMISSIONER AHEARNE:
You think our record 7 keeping is good enough, and our response time is fast 8 eno ugh ?
To do something every six months a t least seems to Simply that you ought to be able to complete your action in 10 another three or four months.
11 MR. MILLER:
Well, not necessarily it doesn't to 12 me, like an OL.
We know that it takes a long period of 13 tim e.
14 CHAIRMAN PALLADINO:
When it comes to bills, you 15 ought to be able to do that every 30 days.
16 MR. MILLER:
We felt, for example, with these 17 major areas of fees for OLs, cps, you are talking about a 18 couple of sillion dollars.
You spread it over --
19 COMMISSIONER AHEARNE:
You are not saying that we 23 can complete our action in a coupe of months?
21 HR. MILLER:
You mean the review process?
22 COMMISSIONER AHEARNE:
Yes.
23 MR. MILLER No, because in many instances it vill 24 take yea rs.
25 CHAIRMAN PALLADINO I don 't follow what you are 1
ALDER $oN REPORTING COMPANY. INC, 400 VIRGINIA AVE, S.W WASHINGTON, D.C. 20024 (202) 554-2345
69 I];
1 talking about.
What takes years?
2 MR. MILLER:
To process an OL.
3 COMMISSIONER AHEARNE:
No.
I didn't mean that.
4 We are billing overy six months, which means that we ought 5 to be able to complete our collection of all the 6information, complete our processing 7
MR. EILLER:
For the billing?
8 COMNISSIONER AHEARNE:
Oh, yes.
9 HR. HILLER:- We can get that and the manpower data 101a less than two wcrks from NRR, and so forth; yes.
In 11 f act, for example we now get from ICE copies of all of the 12 inspection reports routinely, and so forth.
We have worked 13 t ha t ou t.
14 COMMISSIONER AHEARNE:
Yes.
That was really my 15 question.
16 HR. MILLERa I misunderstood yous yes.
17 CHAIRMAN PALLADINO:
Okay.
New you are going to 18 send us a revised paper on which we can then vote?
And if 19 we have to have another meeting, we will have another 20 meeting.
21 HR. DIRCKS:
And then you asked fcr one other--
22 the review of the radioisotopes.
23 CHAIREAN PALLADINO:
Yes.
I had that, but that is 24 som<ething -- I think we have a concensus that we could put 25 that of f for now and treat that as a separate item.
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ER. DIRCKS:
Right.
2 COMMISSIONER AHEARNEs Something you mentioned 3 earlier did trigger a question in my mind.
You had 4 mentioned in answering Commissioner Bradford on the 5 allocation of costs when you talked about contracts, are we 6 picking up the -- are you proposing to pick:up the actual 7 contract costs?
As you know, particularly in NRR, we are 8 going to an increasing use of contractor review, which means 9 tha t the portions of dollars that are going out by contract to are increasing.
11 Are we going to pick up the actual contract 12 cos ts ?
13 MR. MILLER:
Where those contracts are tied to a i
14 docket number, yes.
15 CONMISSIONER AHEARNE:
We vill?
16 MR. DONOGHUE:
We do.
17 COMMISSIONER AHEARNE:
And in your fee schedule, 18rou are proposing to -- one of the reasons we are here is 19 because the numbers that were used four years ago have 23 suf f ered from inflation.
Are ve going to make it an 21 automatic annual updato?
22 HR. MILLER:
The paper does not speak to that 23 point, but we vill; yes.
Dan and I talked about that this 24 morning.
It is a good suggestion.
Bob Fonner had suggested 25 that to me earlier, but there is no reason -- in f act, it is l
ALDER $oN REPORTING COMPANY. INC, 400 VIRGINIA AVE., $.W. WASHINGTON, D.C. 20024 (202) 554-2345
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1 simpler to do that.
You simply publish a rate in the 2 Federal Begister, and you don't have to go through this
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3 process.
4 CHAIRMAN PALLADINOs Could I ask one question 5related to a point that Commissioner Roberts brought up?
6Why did you get rid of the cap, or a cap on each of these 71tems?
8 MR. MILLER:
Why did we remove the cap?
9 CHAIRMAN PALLADINO:
Why did we put one on in the 10 first placa, and why did'we now remove it?
In other words, 11 what has changed?
12 MR. DONOGHUEs We put it on -- I think the 13 Commission put it on for the reason Commissioner Roberts 14 cited, predictability, so that the licensee would know what 15 their exposure was going to be and could plan a budget 16 accordingly.
That was at least my recollection of the 17 essential rationale the Commission employed at that time.
18 CHAIRMAN PALLADINO:
Has that requirement gone 19 away?
20 MR. DONOGHUE:
No.
It hasn 't gone away, but given y
21 the f act of the dramatic increase in costs as measured by 22 the services we provide, that to impose the cap.is Z3 artificially limiting what the law requires of us.
/
24 COMMISSIONER AREARNE:
Is the law permissive, or
,ll 25 directive ?
In other words, does it permitt'ts to charge?
Or 6
ALDERSoN REPORTING COMPANY,INC, 400 MRGINtA AVE. S.W., WASHINGTON, D.C. 20024 (202) 554 2345
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1does it direct us to charge?
2 NR. DONOGHUEs I think it permits us tc charge.
I 3 think it is ' permissive."
4 MR. MILLERS "Shall be sustaining insofar as 5possible," is the language as I recall it.
6 MR. DONOGHUEs And considering public interest, 7 and other f actors.
8 MR. HILLER:
We felt that providing a range would 9 take the place of a cap, not directly but at least it gives
/
10 them a ballpark estimate as to where it would end up.
11 HR. DIRCKSs But I guess you could take the high M part of the range and impose it as a cap, and tha t would 13 still give you your projections.
i t
14' COMMISSIONER AHEARNE Is it your view that this 16 then meets the statement that was part of the '82 submission 16 on the part of the Administration?
The submission to 17 Congress, as I recall, said "The Commission shall" --
18 4,
19 l
20 k21
< 12 23 24
,s.<-
25
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1 NF. DIBCKSs The projected return of revenues 2 meets their desires.
r-3 COMMISSIONER AHEARNEs 515 million?
4 MR. DIRCKS:
Yes.
5 CHAIRMAN PALLADINO:
It more than meets it, as I 6 understand it.
7 Okay?
Well, thank you very much.
We vill stand 8 adjourned.
9 (Whereuton, at 3431 p.s..,
the meeting of the 10 Commissioners was adjourned. )
11
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12 13
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'TUCLEAR REGULATORY CO.WISSICN
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~ Tais is to certify that the attached proceedings before the
'$r 3,-
COMMISSICN MEETING in the, matter of:
PUBLIC' MEETING -
Discussion of Part 170 - Nest Fee SchM11e
' Based cn Reexamination of Manpower Estirates Date of Proceeding:
November 2, 1981 Docket flumber:
Place of Proceeding: washington, D. C, wore held as herein appears, and that this is the original transcript thereof for the file of the Cecmission.
Jane W.
Beach Official Reporter (Typed) in
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(
/
1 l4 m
0 icial Reporter (Signature) 9 t
+
l l
1 PROPOSED REVISION REVISE LABOR RATES FOR PROGRAM 0FFICES USING INFLATION RATE AND PAY INCREASE ADJUSTMENTS REMOVE FEE CEILING OR UPPER LIMIT FOR REACTOR AND FUEL CYCLE LICENSES ASSESS FEES FOR PART 50 AMENDMENTS AND OTHER REQUIRED APPROVALS BASED ON ACTUAL COSTS RATHER THAN AVERAGE COST METHOD CHARGE FOR ALL INSPECTIONS (ROUTINE AND NONROUTINE) RATHER THAN ONLY FOR ROUTINE INSPECTIONS REVISE BILLING PROCEDURE FOR ACTUAL COST CASES; I.E., BILL FOR WORK AS IT PROGRESSES RATHER THAN UPON ISSUANCE OF LICENSE.
CONTACT:
W. O. MILLER 492-7225
2 COMPARISON OF REACTOR FEES b
U POWER CURRENT RANGE PROPOSED RANGE CP REVIEW
$846,000 - $1,069,000
$1,944,000 - $2,800,000 OL REVIEW 829,000 -
1,025,000 2,357,000 -
2,751,000 AMENDMENT REVIEWS 400 -
45,900 150 -
135,900 ROUTINE SAFETY INSP./YR.
60,400 -
75,700 36,900 -
134,700 ROUTINE SAFEGUARDS INSP./YR.
9,500 -
11,800 1,900 -
12,700 NON ROUTINE SAFETY /YR.
NO CHARGE 3,800 -
65,000 RESEARCH & TEST AMEND. REVIEWS 600 -
$20,000
$150 -
$34,600 ROUTINE SAFETY INSP./YR.
4,200 -
9,000 700 -
2,100 1/ CURRENT CAPS BASED ON AVERAGE COST METHOD FOR TYPE REACTOR.
2/ FEES BASED ON THE ACTUAL COST TO PROCESS AN-APPO C. FOR AN INSPECTION WITH NO CAP.
3 ESTIMATED C01iFCTIONS
($ IN THOUSANDS)
SCHEDULE FY 1982 FY 1983 CURRENT NRR
$ 9,000
$12,000 NMSS 1,000 1,000 IE 7,000 7,000
$17,000
$20,000 PROPOSED
$40,000-
$28,000 NMSS 1,000 1,000 IE 9,000 11.000
$50,000
$40,000 i
- ASSUMES 4/1/82 EFFECTIVE DATE i
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