ML20092E999
| ML20092E999 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 07/26/1994 |
| From: | Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | Russell W Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20091F755 | List: |
| References | |
| FOIA-95-219 NUDOCS 9509150370 | |
| Download: ML20092E999 (13) | |
Text
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July 26, 1994
~
ft} b WD MEMORANDUM FOR:
William T. Russell, Director Office of Nuclear Reactor Regulation FROM:
James. M. Taylor Executive Director for Operations
SUBJECT:
NRR STAFF ACTIONS RESULTING FROM THE DIAGNOSTIC EVALUATION AT SOUTH TEXAS PROJECT 98#0/D i
Your memorandum to me dated June 1994 provided the status of open NRR actions resulting from the Diagnostic Evaluation Team inspection at the South Texas Project.
Four of the six items discussed _were reported as closed (Actions 2, 5, 6, and 7).
Two items remain open (Actions 1.b and 4).
In accordance with the original memorandum of August 3, 1993, and my second memorandum
)
on the subject dated December 1, 1993, I request that you discuss j
all NRR's open items in an annual report to be submitted in
]
January of each year until all open items are resolved.
j Please reflect consideration of this comment in your January 1995 report.
l originalsigned by Aames M. Taylor JEmes M. Taylor Executive Director l
for Operations cc:
J. Milhoan j
E. Beckjord E. Jordan i
DISTRIBUTION:
j EDO rf j
DEDR rf j'
JTaylor JAMitchell h
RO:DEDR DEDR EDdN JAMitchell JLMilhoan JMTa lor 07/25/94 07/
/94 07/
f 94 document namorar\\dedr\\STPrenco k
9509150370 950007 PDR FOIA COPELAN95-219 PDR
i SOUTH TEXAS PROJECT i
LIBERTY TESTIMONY i
i i
PRESENTED BY:
TuoseAs ALEXION, PaoJECT MANAGER f
i LAWRENCE KoKAJKo, SR. PaoJECT MANAGER i
l DIVIsIoM OF REACTom PaoJECTS III/IV 0FFICE OF NUCLEAR REACTom REGULATIoM D
W v1 w
r 1 l
l SOUTH TEXAS PROJECT - BACKGROUND INFORMATION l
NRC PLACES STP UNDER CONFIRMATORY ACTION LETTER, AS SUPPLEMENTED, l
)
AND ULTIMATELY PLACES STP ON NRC " WATCH LIST;" NRC INSTITUTES RESTART PANEL AND INCREASES INSPECTION ACTIVITY (FIRST-HALF 1993) i i
NRC ISSUES DIAGNOSTIC EVALUATION TEAM REPORT (JUNE 10, 1993) l l
HL&P'S SUBMITS OPERATIONAL READINESS PLAN, WHICH ADDRESSES RESTART-RELATED ISSUES, AND BUSINESS PLAN, WHICH ADDRESSED LONG-TERM IMPROVEMENTS (AUGUST 1993)
NRC COMPLETES OPERATIONAL READINESS INSPECTIONS, LIFTS CALS, AND ALLOWS UNITS TO RESTART; HL&P RESTARTS UNIT 1 (FEBRUARY 18, 1994)
AND UNIT 2 (MAY 22, 1994)
CONGRESSIONAL INTEREST INCREASES DURING SPRING 1994; CONGRESSIONAL STAFF BRIEFINGS ON MARCH 13, 1994, AND APRIL 29, 1994, LEADS TO l
FORMATION OF TWO SPECIAL NRC TEAMS:
STP ALLEGATION REVIEW TEAM (MAY 31, 1994)
STP INSPECTION PROGRAM EFFECTIVENESS REVIEW TEAM (JULY 8,1994)
CITY OF AUSTIN ENGAGES IN LITIGATION WITH HL&P OVER RECOVERY OF FUEL REPLACEMENT COSTS AND O&M COSTS; ALTHOUGH HL&P TRIES TO BLOCK IT, CITY OF SAN ANTONIO LATER JOINS SUIT (MARCH 1994)
TWO RATE CASES (HL&P AND CP&L) BEFORE TX PUC (SPRING 1994) 1 l
SOUTH TEXAS PROJECT - LIBERTY REPORT TESTIMONY FROM OFFICER OF LIBERTY CONSULTING GROUP PRESENTED BEFORE TX PUC, WHICH INCLUDES "AN ASSESSMENT OF HL&P MANAGEMENT PRUDENCE AT SOUTH TEXAS PROJECT," AKA " LIBERTY REPORT" (JULY 13,1994)
DURING BRIEFING, CONGRESSIONAL STAFFERS INFORM NRC OF LIBERTY REPORT; NRC REQUESTS COPY OF REPORT (AUGUST 18, 1994)
HL&P PROVIDES COPY OF THE LIBERTY TESTIMONY TO THE NRC AND EXPLAINS i
ITS USE IN PRUDENCY HEARINGS (AUGUST 25, 1994) i NRC REQUESTS HL&P TO EXPLAIN THE DIFFERENCES IN FACTS BETWEEN THE i
DET REPORT AND THE LIBERTY REPORT, HOW THESE DIFFERENCES ARE l
PERCEIVED BY HL&P, AND IDENTIFY ISSUES ADMITTED TO THE LITIGATION RECORD BY THE CITY OF AUSTIN IN ITS LAWSUIT (OCTOBER 24, 1994)
WALL STREET JOURNAL PUBLISHES ARTICLE, "NRC FEARS HL&P TOLD TWo VERSIONS OF SAME STORY" (NOVEMBER 9, 1994); ADDITIONALLY, PERSONNEL FROM PRUDENTIAL SECURITIES AND ATTORNEYS REPRESENTING THE CITY OF l
AUSTIN CONTACT THE NRC STAFF (NOVEMBER / DECEMBER 1994) i HL&P " DIPLOMATICALLY" RESPONDS TO NRC LETTER; HL&P EMPNASIZES COMMITMENT TO OPERATIONAL READINESS PLAN AND BUSINESS PLAN, BUT DOES I
NOT RESPOND TO THE DETAILED QUESTIONS (NOVEMBER 22, 1994)
{
t 2
)
I
_.7 EXAMPLES OF DET AND LIBERTY REPORT DIFFERENCES IN THE MAINTENANCE AREA, THE DET REPORT STATES THAT THE ONLY REVIEW PERFORMED TO DETERMINE WHICH INDIVIDUAL PREVENTATIVE MAINTENANCE TASKS WOULD BE CLASSIFIED AS ACTIVE OR INACTIVE, WAS A NON-TECHNICAL i
REVIEW BY MAINTENANCE PERSONNEL.
HOWEVER, THE LIBERTY TESTIMONY STATES THAT THIS STATEMENT IS INCORRECT.
THE DET REPORT STATES THAT AS MANY AS THREE YEARS HAD PASSED BETWEEN VIBRATION READINGS ON THE UNIT 1 AUXILIARY FEEDWATER PUMPS.
THE LIBERTY TESTIMONY STATES THAT AVAILABLE DATA INDICATED THAT VIBRATION READINGS HAD BEEN TAKEN OUARTERLY.
IN THE ENGINEERING AREA, THE DET REPORT STATES THAT TEMPORARY l
MODIFICATIONS WERE NOT AGGRESSIVELY PURSUED TO CLOSURE.
THE LIEERTY l
TESTIMONY INDICATES THAT TEMPORARY MODIFICATIONS WER5 BEING REDUCED AT AN INCREASING RATE, PARTICULARLY DURING THE SIX MONTHS PRIOR TO THE DET INSPECTION.
1 THE DET REPORT STATES THAT HL&P DID NOT HAVE AN EFFECTIVE METHOD TO DETERMINE THE SIZE AND COMPOSITION OF THE ENGINEERING BACKLOG.
IT ALSO STATES THAT THE DATA GIVEN TO THE TEAM WAS INACCURATE, AND THAT IT TOOK MORE THAN 4 WEEKS TO PROVIDE REASONABLY ACCURATE DATA.
THE LIBERTY TESTIMONY STATES THAT THIS IS INCORRECT, AND THAT THE ELAPSED TIME WAS A RESULT OF THE DET'S EVALUATION PROCESS AND FOLLOW-ON REQUESTS, NOT A LACK OF PERTINENT INFORMATION AT STP.
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-_____.---._.-.._____--__--.---.-.---------.n.
NRC OPTIONS l
1.
THANK-YOU RESPONSE - INFORMATIVE, BUT NOTE MISSING INFORMATION, BUT NOT IMPORTANT GIVEN RESPONSE (NOT RECOM4 ENDED) i PROS:
NRC DOCUMENTS REVIEW AND UNDERSTANDING OF HL&P'S POSITION NRC APPARENTLY AGREES WITH HL&P'S POSITION NRC TAKES HANDS-OFF APPROACH TO CONTRACTUAL / LEGAL MATTERS CONS:
CRITICISM THAT NRC ACCEPTED INADEQUATE RESPONSE I
NRC APPEARS TO BE IN FULL AGREEMENT WITH HLAP LIKELY NEXT STEP:
HL&P DOES NOT RESPOND 2.
REMINDER RESPONSE - REMINDS HL&P OF ITS RESPONSIBILITIES UNDER 10 CFR PARTS 21 AND 50, AND ACCURACY OF INFORMATION; NRC IR'S ARE THE WRITTEN RECORD UNLESS HL&P CONVINCES NRC OTHERWISE (RECOW4 ENDED)
PROS:
NRC STANDS BY THE REGULATIONS AND THE WRITTEN RECORD NRC PUTS THE BURDEN ON HL&P i
NRC DOESN'T COMMENT ON HL&P'S POSITION i
NRC TAKES HANDS-OFF APPROACH TO CONTRACTUAL / LEGAL MATTERS i
CONS:
NRC MAY NOT GET FURTHER INFORMATION LIKELY NEXT STEP:
HL&P MAY NOT RESPOND 4
e o 1
... - -. -. - -. ~. -.. -. _ -. - - -.. - - -.
NRC OPTIONS - CONTINUED 3.
RESPONSE INSUFFICIENT - PLEASE PROVIDE ANSWERS TO QUESTIONS (NOT ACCEPTABLE; RE-REQUEST RESPONSE TO ALL QUESTIONS), COULD USE 50.54(F)
(MQT RECOMMENDED)
PROS:
NRC OBTAINS FULL RESPONSE NRC DISPLAYS TOUGH REGULATORY STANCE INFORMATION COULD IMPROVE REGULATORY PROCESSES CONS:
WHAT WOULD NRC DO WITH INFORMATION?
NRC STAFF REVIEW WOULD BE SIGNIFICANT 50.54(F) JUSTIFICATION REQUIRES SIGNIFICANT STAFF RESOURCES
[
NRC DISPLAYS TOUGH REGULATORY STKMCE t
ADVERSELY AFFECTS LICENSEE WO/C0904ENSURATE SAFETY BENEFIT DRAWS NRC FURTHER INTO LITIGATION l
LIKELY NEXT STEP:
WO/50. 54(F) :
HL&P DECLINES TO RESPOND TO SPECIFICS (AGAIN) l w/50.54(F):
HL&P MUST RESPOND, BUT MAY DECLINE TO RESPOND TO SPECIFICS; NRC MUST NOW WRITE AN ORDER i
5 t
5 i
l NRC ACTIONS NRC STAFF HAS REVIEWED OPTIONS, AND RECOfG4 ENDS OPTION #2 (REMINDER RESPONSE), WHICH DELINEATES FOUR (4) THEMES:
REMIND H MP THAT THE NRC IS A PUBLIC AGENCY AND TAKES RESPONSIBILITY FOR COMPLETENESS AND ACCURACY OF INFORMATION IN AGENCY DOCUMENTS; REMIND H MP THAT IT HAS A RESPONSIBILITY TO PROVIDE COMPLETE AND ACCURATE INFORMATION TO THE NRC (10 CFR SECTION 50.9); REMIND HBP OF ITS RESPONSIBILITY TO CORRECT ANY
[
INACCURATE INFORMATION, AND NRC POSITION THAT AGENCY INFORMATION l
WILL BE ASSUMED TO BE CORRECT UNLESS CONVINCED OTHERWISE l
i REAFFIRM THAT NRC'S PRIMARY CONCERN IS NUCLEAR SAFETY, AND IT DOES NOT WISH TO BECOME INVOLVED IN ECONOMIC, CONTRACTUAL, OR OTHER l
LEGAL MATTERS UNLESS THOSE ISSUES ADVERSELY AFFECT NUCLEAR SAFETY; FURTHER PURSUIT OF THESE MATTERS WILL NOT ENHANCE NUCLEAR SAFETY REMIND HMP (AND CO-LICENSEES) OF ITS RESPONSIBILITY TO REPORT DEFECTS IN SAFETY-RELATED EQUIPMENT, MATERIALS, AND SERVICES IN ACCORDANCE WITH 10 CFR PART 21 AND PART 50 (SECTIONS 50.72 AND 50.73)
(NOTE:
STAFF ADVISED LICENSEE OF THIS ONCE BEFORE IN A LETTER DATED MAY 2, 1994)
REMIND H MP THAT WE WILL CONTINUE TO CLOSELY MONITOR H MP'S COMMITMENTS TO IMPROVE PERFORMANCE 6
I l
L C1/-
5 BACKGROUND INFORMATION TO SUPPORT MEETINGS ON HL&P'S 11/22/94 LETTER REGARDING LIBERTY TESTIMONY. SOUTH TEXAS PROJECI 1
Attached is the following information: :
Point-by-point comparison of 10/24/94 questions from Jack i
Roe and 11/22/94 answers from William Cottle. : The 10/24/94 letter from Jack Roe. : The 11/22/94 response from William Cottle. : The 08/25/94 letter from William Cottle that explained and provided a copy of the Liberty testimony to the NRC. : A Wall Street Journal newspaper article.
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ATTACHMENT 1 J
POINT-BY-POINT COMPARISON OF NRC QUESTIONS AND HL&P ANSWERS a
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I
Point-by-Point Comoarison of 10/24/94 Questions from Jack Roe and 11/22/94 Response from William Cottle Reaardina Liberty Testimony Question 1:
Please (la) identify and (Ib) address the most significant differences and (Ic) why these differences were not identified and communicated earlier.
Answer 1:
la. Response declined (see first sentence in Ic below).
Ib. Response declined (see first sentence in Ic below).
Ic.
Rather than reinvestigating the bases for statements in the DER, or initiating debate about their merits, HL&P focused on developing Operational Readiness Plans and a Business Plan that, among other things, encompassed all actions necessary for a complete response to the DER.
STP remains committed to the course of action set forth in those documents, and nothing filed at either the PUC or the State courts will affect those commitments or our deditation to these action plans in any way.
However, we are now involved in other regulatory and legal proceedings in which our past conduct will be judged. To the extent that specific i
statements made in the DER are at issue in those other proceedings, it i
is necessary for us to look into their specific factual underpinnings
~
and context in light of the legal standards relevant to the particular proceeding.
The Liberty report was prepared by an independent consultant, not the STP staff.
It was prepared for use in litigation, not for the ongoing 1
operation of the plant. The authors of the Liberty report had two 1
i benefits not available to the DET:
an additional year of perspective and a longer time within which to do their work. The Liberty report is not a response to the DER but is instead a review of decisions made and 3
actions taken at STP under the standards applied by the PUC, not those applied by the NRC. As your letter correctly points out, the NRC uses its current knowledge of results to assess the effectiveness of prior project decisions, procedures and practices. The PUC, on the other i
hand, is prohibited from using hindsight and is required to assess
)
whether management decisions or actions were reasonable in light of the information and options available at the time. STP's commitments to the NRC in response to the DER are forward looking and designed to improve management's future effectiveness in operating STP in a safe, reliable l
and cost efficient manner.
In contrast, Liberty's retrospective review of reasonableness or prudence requires a greater emphasis on the facts
)
as reasonably understood by management at the time decisions were made.
i
.This is the fundamental difference between the approaches taken by HL&P before the NRC and the Texas PUC.
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i Duestion 2.
i Include your view on how the DET and Liberty report differences on plant i
performance have been reconciled at STP to assure continuation cf an effective l
l 1mprovement program.
[The paragraph that concludes with question 2 also raises other related points (whether there are sufficient differences in fact to change HL&P and NRC's 1
view of performance; how performance in that time period is perceived, in retrospect, by the current HL&P management and plant staff), however, responses to the other related points were not specifically requested from the licensee.]
j Answer 2:
STP remains committed to the course of action set forth in the Operational 1
-Readiness Plans and the Business Plan, and nothing filed at either the PUC or j
the State courts will affect those commitments or our dedication to these l
action plans in any way. However, we are now involved in other regulatory and legal proceedings in which our past conduct will be judged. To the extent that specific statements made in the DER are at issue in those other proceedings, it is necessary for us to look into their specific factual 4
underpinnings and context in light of the legal standards relevant to the
,particular proceeding. This analysis, however, has not and will not affect the plan of action set forth in the Operational Readiness Plans and the i
Business Plan.
Let me close by reemphasizing our commitment to making STP a world class performer. HL&P has responded vigorously to the findings of the DER, and the i
effectiveness of that response has been the subject of numerous NRC on-site 1
l inspections and evaluations. We are pleased with the progress we have made to date, as reflected in the NRC's restart decisions, NRC inspection results, j
recent SALP and INPO ratings, our own self assessments, and the operating record of the units since restart.
Nevertheless, we do not plan to stand on these accomplishments, but rather to continue our efforts at improvement. As noted above, current and future filings before the Texas PVC and the courts relate to prudence and contractual matters and do not affect the status of i
HL&P's commitments to the NRC.
In particular, HL&P continues to implement j
those commitments made in response to the DER as described in the STP Business i
Plan.
[The other related points mentioned above under question 2, for which j
responses were not requested, were not addressed by the licensee.]
i I
e e- -
s Duestion 3:
Please (3a) identify the issues admitted to the record by the City of Austin and (3b) HL&P's response to them, and (3c) provide the basis for the action i
HL&P has taken, and (3d) provide any supplemental information necessary for us to get an accurate pteture of HL&P's perspective on this issue.
Answer 3:
3a. The issues are single sentences taken generally, but not always accurately from the DER.
3b. Since these statements are potentially misleading and likely to be misunderstood out of context, the " deny" response is the only appropriate answer.
3c.
Under legal practice in Texas courts, HL&P was placed in the position of admitting or denying, wi?.hout effective qualification or explanation, single sentences taken generally, but not always accurately, from the DER. Since these statemtnts are potentially misleading and likely to be misunderstood out of context, the " deny" response is the only 1
appropriate answer.
j 3d.
For example, DET statements taken out of context might suggest to the average person not familiar with the NRC inspection process that STP was operated in an unsafe manner. This was not the case and neither the DET nor other NRC inspections reached such a conclusion.
To prevent misunderstandings such as these, HL&P is required to deny the statements as presented by the City of Austin for purposes of its lawsuit.
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ATTACHMENT 2 10/24/94 LETTER FROM JACK R0E
.I UNrfE0 STATES 5
NUCLEAR REGULATORY COMMISSION
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wasmweton, o.c. msman V..
o October 24, 1994 W. William T. Cottle Group Vice President Nuclear Houston Lighting & Power Company ar.
'e-South Texas Project Electric Generating Station 9.0. Box E89 Wadsworth, TX 77483 3UBJECT: TESTIMONY SY LIBERTY CONSULTING GROUP AND LITIGATION WITH THE CITY 0F AUSTIN, SOUTH TEXAS PROJECT (STP)
Dear Mr. Cottle:
On August 25, 1994, you provided to the NRC a copy of the testimony prepared by Liberty Consulting Group in connection with the rate case / fuel reconciliation proceeding now pending before the Public Utility Commission of Texas. This information was provided in response to a verbal request from th*
NRC.
In your cover letter, you explained that the difference between a diagnostic evaluation and an assessment of management prudence is that the former focuses on results and takes full advantage of all available facts to identify weaknesses and areas needing improvement on licensee performance, tihile the latter must evaluate the reasonableness of decisions and actions of canagement only in light of the information and options reasonably available at the time those decisions were made and actions were taken.
?
l In our review of the report, we noted differences in the facts as we understood them at the time of the South Texas Project diagnostic evaluation.
For example, the following differences were noted:
L e
In the maintenance area, the Diagnostic Evaluation Team (DET) report states that the only review performed to determine which individual preventative maintenance tasks would be classified as active or inactive, was a non-technical review by maintenance personnel.
l However, the Liberty testimony states that this statement was
(
incorrect (p. III-13).
The DET report states that as many as three years had passed between i
vibration readings on the Unit I auxiliary feedwater pumps. The Liberty testimony states that available data indicated that vibration readings had been taken quarterly (p.111-50).
In the engineering area, the DET report states that tem modifications were not aggressively pursued to closure.poraryThe Liberty i
testimony indicates that temporary modifications were being reduced at an increasing rate, particularly during the six months prior to
[
the DET inspect <on (p. IV 7-10).
I
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2
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l William T. Cottle z The DET report states that Houston Lightinfi & Power Company (HL&P) did not have an effective method to detem ne the size and composition of the engineering backlog. It also states that the data given to the team was inaccurate, and that it took more than 4 weeks to provide reasonably accurate data. The Liberty testimony states that this is incorrect, and that the elapsed time was a result of the DET's evaluation process and follow-on requests, not a lack of pertinent information at STP (p. IV-42).
i These are only a few of the examples of differences in fact, or interpretation of infomation, that we noted during our review.
At the time of the DET, i
HL&P had opportunities to identify differences in facts to us at daily meetings, exit meetings after the first and second onsite inspection periods, 1
l and the public exit.
For example, as part of the DET validation activities, l
i the team manager and functional area leaders routinely solicited from their HL&P contacts, additional factual information regarding the observations t
discussed at the daily counterpart debriefings. These discussions led the DET
)
1 to revise its initial observations in selected areas. Additionally, in its formal written response to the DET report, HL&P had an opportunity to identify l
the differences later identified in the Liberty report.
Please identify and address the most significant differences and why these differences were not i
identified and communicated earlier.
i The NRC's DET report compiles and documents several facts as a basis for a i
finding in a functional area, which are analyzed to establish root causes for performance problems. We question whether there are sufficient differences in fact to change HL&P and NRC's view of performance. Also the differences in performance as stated in the DET and Liberty reports raise another question as l
to how performance in that time period is perceived, in retrospect, by the current HL&P management and plant staff. We would appreciate if your response would include your view on how the DET and Liberty report differences on plant l
performance have been reconciled at STP to assure continuation of an effective i
improvement program.
i l
Finally, on October 4,1994, your staff advised the NRC that in HL&P's current i
litigation with the City of Austin, many items attributed to the DET report i
}
regarding STP were admitted into the record, and that HL&P has denied them in j
accordance with the State of Texas civil procedure. Please identify the issues admitted to the record by the City of Austin and HL&P's response to them. Additionally, please provide the basis for the action HL&P has taken, I
and provide any supplemental information necessary for us to get an accurate picture of HL&P's perspective on this issue.
)
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William T. Cottle,
The NRC requests a rstgense within 30 days of receipt of this letter. The reporting r.:d/or recordkeeping requirements of this letter affect fewer than ten respondents; therefore, OMB clearance is not required under Public Law 96-511.
Sincerely, uk a.%
ick W. Roe, Director Division of Reactor Projects III/IV Office of Nuclear Reactor Regulation l
Docket Nos. 50-498 and 50-499 cc: See next page I
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(
d ATTACHMENT 3 11/22/94 RESPONSE FROM WILLIAM COTTLE 1
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HOUSTON LIGHTING & POWER COMPANY j
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W.T. Coma 4
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November 22, 1994 1
SI-E-AE-4940 i
File No.: G25 l
10CH2
[# M N N Mr. Jack W. Roe Director, DRP Ill/IVN Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, DC 20555-0001 i
Dear Mr. Roe:
}
This is in response to your letter of October 24,1994 regarding the report prepared by the Liberty Consulting Group in connection with proceedings at the Texas Public Utility Commission (PUC) and certain pleadings filed in the ongoing litigation between Houston Lighting & Power Company and the City of Austin over the operation of the South Texas Project (STP). You have asked about the relationship between the Liberty Report and the lawsuit l
pleadings and the report issued in June 1993 by the NRC's Diagnostic Evaluation Team (DER).
As you know, HL&P's response to the DER is set forth in the Operational Readiness Plans for STP Units 1 and 2 and the STP Business Plan. At the time HL&P received the DER, it was apparent to us that changes were warranted in a number of areas at STP, and we had l
already undertaken to address many of those issues. Accordingly, our efforts were directed l
toward restart of the STP units and laying the ground work for strong long-term performance.
i Rather than reinvestigating the bases for statements in the DER, or initiating debate about their i
merits, HL&P focused on developing Operational Readiness Plans and a Business Plan that, among other things, encompassed all actions necessary for a complete response to the DER. STP l
remains committed to the course of actior. rot forth in those documents, and nothing filed at either the PUC or the State courts will affect those commitments or our dedication to these action plans in any way.
4 However, we are now involved in other regulatory and legal proceedings in which our past conduct will be judged. To the extent that specific statements made in the DER are at issue in those other proceedings, it is necessary for us to look into their specific factual underpinnings i
and context in light of the legal standards relevant to the particular prwing. This analysis, however, has not and will not affect the plan of action set forth in the Operational Readiness
~~
Plans and the Business Plan.
f 94tl'50021 (9 94iTf5 FDR ADDC 05000499
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c.T. cem The Liberty Report was prepared by an independent consultant, not the STP staff. It was p%wd for use in litigation, not for the ougping operation of the plant. The authors of the Liberty Report had two benefits not available so the DET: an additional year of perspective and a longer time within which to do their work. The Liberty Report is not a response to t)e DER but is instead a review of decisions made and actions taken at STP under the standards applied by the PUC, not those applied by the NRC. As your letter correctly points out, the NRC uses its current knowledge of results to assess the effectiveness of prior project decisions, procedures and practices. The PUC, on the other hand,is prohibited from using hindsight and is required to assess whether management decisions or actions were reasonable in light of the information and options available at the time. STFs commitments to the NRC in response to the DER are forward looking and designed to improve rnaangement's future effectiveness in operating STP in a safe, reliable and cost efficient manner. In contrast, Liberty's retrospective review of reasonableness or prudence requires a greater emphasis on the facts as reasonably understood by management at the time decisions were made. This is the fundamental difference between the approaches taken by HL&P before the NRC and the Texas PUC.
As to the Requests for Admissions refened to in the last paragraph of your letter, our attorneys advise that under legal practice in Texas courts, HL&P was placed in the position of admitting or denying, without effective qualification or explanation, single sentences taken generally, but not always accurately, from the DER. Since these statements are potentially misleading and likely to be misunderstood out of context, the " deny" response is the only appropriate answer. For example, DET statements taken out of context might suggest to the i
average person not familiar with the NRC inspection process that STP was operated in an unsafe manner. This was not the case and neither the DET nor other NRC inspections reached such a conclusion. To prevent misunderstandings such as these, HL&P is required to deny the statements as presented by the City of Austin for purposes ofits lawsuit.
Let me close by re-emphasizing our commitment to making STP a world class performer.
HL&P has responded vigorously to the findings of the DER, and the effectiveness of that response has been the subject of numerous NRC on site inspections and evaluations. We are pleased with the progress we have made to date, as reflected in the NRC's restart decisions, NRC inspection results, recent SALP and INPO ratings, our own self assessments, and the operating record of the units since restart. Nevertheless,we do not plan to stand on these accomplishments, but rather to continue our efforts at improvement. As noted above, current and future filings before the Texas PUC and the courts relate to prudence and contractual matters and do not affect the status of HL&P's commitments to the NRC. In particular, HL&P continues to implement those commitments made in response to the DER as described in the STP Business Plan.
2 I hope this letter addresses your concans. Should you need further information, please do not hesitate to contact me.
Sincerely,
~-
e.o T NT
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ATTACHMENT 4 i
08/25/94 LETTER FROM WILLIAM COTTLE THAT EXPLAINED AND PROVIDED THE LIBERTY TESTIMONY I
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The Light
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4 AIXi 2 51994 1
i sT-HL-As-4s77 i
File No.: G25 j
10CFR2 W. R. Bateman l
Team 2,eader, Effectiveness Review Team U. S. Nuclear Regulatory Commission Nashington, DC 20555 South Texas Project Units 1 and 2 Docket Nos. STN 50-498; STN 50-499 Testimony by Liberty consultino Greue i
2n response to your verbal request, attached is a copy of the i
testimony prepared by Liberty Consulting Group in connection with I
the rate case / fuel reconciliation proceeding now pending before the l
Public Utility Commission of Texas. In that proceeding, issues have i
been raised as to the prudence of the management of South Texas Project (STP) operations and the extent to which Houston Lighting i
1
& Power Company (HL&P) may recover replacement fuel costs incurred during the recent extended outage at STP.
Liberty Consulting Group was engaged to provide an independent essessment of management prudence, utilizing the standard adopted by the Public Vtility Commission of Texas:
i i
The exercise of that judgment and the choosing of one of that select range of options which a reasonable utility
}
manager would exercise or choose in the same or similar 1
circumstances given the information or alternatives available at the point in time such judgment is exercised 4
or option is chosen.
This prudence review was particularly important given the cxtensive attention surrounding the 1993 NRC Diagnostic Evaluation Toam Report.
As you know, there are significant differences between the standards utilized by the NRC as a safety regulator and i
those used by an economic regulator such as the Public Utility Commission of Texas.
The most significant differences between the i
Diagnostic Evaluation and a prudence review are that the former focuses on results and takes full advantage of all available facts
~
to identify weaknesses and areas needing improvement in licensee performance.
A prudence review of management, on the other hand, 2
asunt evaluate the reasonableness of decisions and actions of management only in light of the information and options reasonably evailable at the time those decisions were made and actions were i
taken.
s n, / W iW),M 4
=j w c Fe. es: No.aSer en Behalf of es Parkipsaw la de Seed %sas Projoes tame se\\os.277. sea
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4 Houstes Lighting & Power Company South Texas Project EW Generating Staden l
ST-E-AE-4 877 i
File No.: G25 i
Page 2 l
While E&P believes that, based upon the information available i
at the time, its management actions and decisions were reasonable under the standards established by the Public Utility Comission of
)
Texas, EEP has aggressively pursued performance improvement 1
STP.
These improvement afforts have been documented in the at Operational Readiness Plans executed in connection with the restart
]
of each STP unit and in the STP Business Plan, which collectively address the issues described in the Diagnostic Evaluation Team 1
Report.
These efforts have also been subject to extensive NRC -
review through multiple team inspections and real-time monitoring.
j i
ML&P is committed to continuing these performance improvement l
efforts.
t Please call me should you require additional information or wish to discuss these matters further.
I i
)
Sincerely, 4.r p ~~ M. C W. T. Cottle Group Vice President, Nuclear l
i
Attachment:
Direct Testimony of Robert L. Stright j
i SCSC. N \\M 237.903 1
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1' Au ust 3, 1993 l'
MEMORANDUM FOR:
Thomas E. Hurley, ($1 rector, NRR James L. Hilhoan, Regional Administrator, RIV Edward. L. Jordan, Director, AE00 FROM:
James M. Taylor Executive Director for Operations
SUBJECT:
STAFF ACTIONS RESULTING FROM THE DIAGNOSTIC EVALUATION AT SOUTH TEXAS PROJECT A copy of the report for the subject evaluation and the proposed staff actions j
were transmitted to you by previous memoranda.
The report documents performance deficiencies and pr.obable root causes, together with findings and i
conclusions which form the basis for identifying followup actions.
The purpose of this memorandum is to identify and assign responsibility for generic and plant-specific actions resulting from the diagnostic evaluation at South Texas Project. You are requested to resolve each of the items in your area of responsibility and, if appropriate, identify additional staff actions or revisions to the identified actions based on your review of the report.
Based on briefings on the diagnostic e/aluation results, I recognize that actions to address some of these issues may already have been initiated by the staff.
In view of the importance of this subject, your offices should monitor and track the status of each assigned action item until final resolution. Within 90 days, please provide a written summary of the schedule and status of each item within your area of responsibility, as identified in the enclosure, or that you have additionally identified.
Further, I request that you provide a written status report on the disposition of your items (and anticipated actions for uncompleted items) by the end of January each calendar year, until all items are resolved.
Every effort should be made to resolve these issues promptly.
Copies of all status reports should be forwarded to Stuart Rubin (Branch Chief, DEIIB, AE00) to facilitate AE00's responsibility for independent verification.
If there are any questions regarding ind;vidual action items, please contact i
Stuart Rubin (492-4147).
Orig misignea sy Jame8 H. M -
James M. Taylor i Executive Direc r for Operations
Enclosure:
DISTRIBUTION:
(w/ encl)
As stated E00 r/f JMTaylor AE00 r/f ELJordan DFRoss RLSpessard 00A r/f SDRubin CWHehl JLMilhoan TEMurley JSniezek HThompson JLieberman JBlaha MTaylor DCS File D912. DEIIB Chron File
- See Previous Concurrence OFFICE:
DEIIB:DOA DEIIB:00A 00A/)EO)
AE00 NRR NAME:
- RLLloyd SDRubin N *SpbsN DFRoss
- TEMurley DATE:
07/2/93 07/30/93 07/2 /93 07/ /93 07/2/93 umumuuuumussu 4
a u ummunusunnuunasummummunusuu 0FFICE:
RIV AE0g(/
J00lll NAME:
- JLMilhoan E M an Mhlor
_DATE:
07/2/93 07/j8/93 b /93 0FFICIAL RECORD COPY H:MASTSTA1.STP
.~
F l
NRC STAFF ACTIONS: SOUTH TEXAS PROJECT l
1.
1}jsi:
A number of operator workload issues were raised as a result of the diagnostic evaluation at STP. Given the conditions that were prevalent at STP, the design of the facility, and operator workarounds, the scope of responsibilities and administrative work of the operating 4
staff was excessive. For example, the team concluded that operator staffing, although it exceeded TS minimus j
requirements, was strained in accomplishing the complex 6
tasks for a scenario involving shutdown from outside the control room.
l 2
I ACTIONS:
(a)
Assess operating staff workload issues at STP j
and the management actions to resolve them.
1 RESPONSIBLE OFFICE:
Region IV s
l (b)
Assess the generic implications of assigning conflicting multiple responsibilities to the operating staff for response to resource-1 intensive accidents such as fire brigade responsibilities plus support for shutdown from outside the control room.
j RESPONSIBLE OFFICE:
NRR 2.
ISSUE:
The capability of the essential chilled water (ECW) ll system to perform its safety function during a design i
basis accident under low heat load conditions was never i
demonstrated, either through system testing or engineering analysis. The system design cooling capacity of 450 tons per train exceeds the requirements for the highest expected heat load, and greatly exceeds the expected heat bad for cold weather conditions. The i
licensee has experienced surging and vibration of l
chillers, particularly when throttling ECW flow because of cool weather conditions.
If an accident occurred during cold weather and all chillers operated as designed, in response to an engineered safety feature actuation, the chillers would be significantly under-loaded, potentially causing surging and failure.
Failure of the chillers would result in loss of ECW system i
cooling of safety-related equipment. The piping design i
configuration did not allow the system to be tested with i
heat loads representative of those anticipated during accident conditions. The licensee indicated that the existing analysis did not adequately address the issue of 1
1 l
i chiller operation during a design basis accident under low heat load conditions, and agreed to perfonn an 4
engineering analysis by September 1993.
j i
l ACTIONS:
(a)
Assess the licensee's engineering analysis for chiller operation under low heat load accident i
conditions.
RESPONSIBLE OFFICE:
NRR l
\\
1
]
(b)
Assess the need and scope of baseline testing of the ECW system that would more closely simulate design basis accident heat load conditions and validate operability.
Issue generic correspondence as appropriate.
E.ESPONSIBLE OFFICE: NRR E
)
(c)
Assess the need and scope of periodic testing of j
the ECW system to ensure that it can perform its safety function.
Issue generic correspondence l
as appropriate.
RESPONSIBLE OFFICE:
NRR j
I 3.
J1SME:
A limited review of the fire protection area identified deficiencies at STP associated with: the fire protection computer alarm system and operator training on the system, a large backlog of service requests on fire protection systems, control of transient combustibles in the plant, and fire brigade leader qualification.
STP l
management did not oversee and direct the efforts to i
resolve the above deficiencies in a timely manner.
ACTION:
Conduct a followup inspection of the fire protection deficiencies at STP.
RESPONSIBLE OFFICE:
Region IV with NRR assistance i
4.
jlSME:
At STP collapse of the HVAC ductwork would prevent cooling of safety-related components and systems. To protect the HVAC ductwork from collapse during a tornado, the outside ventilation intake dampers are designed to close automatically within.25 seconds, at a differential l
l pressure of 3 psi.
Thirty dampers had not been tested to verify that they would operate as designed.
An STP l
l l
I
~
l 1
preventive maintenance action was scheduled on a ten year frequency, but had not yet been performed.
STP agreed to motion test the dampers to verify operability.
-ACTIONS:
(a)
Evaluate the licensee's surveillance test
)
procedures and results.
RESPONSIBLE OFFICE: NRR l
(b)
Assess the extent and frequency of damper motion testing at licensed facilities.
Evaluate the need to establish technical specification damper motion testing requirements, and subsequent motion testing of ventilation dampers affecting safety-related equipment.
Issue requirements as appropriate.
RijPONSIBLE OFFICE: NRR (c)
Assess the need and scope of periodic testing of the dampers to ensure that they can perform their safety function.
Issue guidance as appropriate.
RESPONSIBLE OFFICE: NRR l
5.
ISSUE:
STP has a unique design feature called "the rapid I
l refueling system." This system was designed with a "one-i lift concept" in which the missile shield, reactor vessel l
head, upper core-support structure, and rod cluster control assemblies would be removed as a single unit.
i One feature of this design was to withdraw all of the rod l
cluster control assemblies into the head and upper internals package where they would be held for the duration of the refueling process. This feature was i
called " rod lockout" and was usually performed with the i
piant in mode 5.
However, the licensee has documentation from Westinghouse (dated June 17,1992) that indicated that the safety analysis for the boron dilution event did not address the condition with the control rods fully out in mode 5.
Additionally, there were no TS requirements governing mode restrictions for this operation.
l ACTIONS:
(a)
Evaluate the adequacy of the safety analysis i
associated with the rapid refueling method at STP with the control rods " locked out."
l RESPONSIBLE OFFI,CI: NRR i
l 2
t i
l l
(b)
Evaluate the adequacy of the STP TS during rapid refueling activities.
Take licensing action as appropriate.
RESPONSIBLE OFFICE: NRR 1
6.
15jE:
At STP nine failures of standby diesel generator (SDG) high pressure fuel injection pump hold down studs occurred from 1987 through 1993.
Each time a failure occurred, the SDG was declared inoperable. Subsequent licensee operability reviews determined that failure of the fuel injector hold down studs would render the associated cylinder inoperable, but would not render the SDG inoperable. The licensee received correspondence from i
Cooper-Bessemer indicating that as many as 2 cylinders could be out of s;rvice and the SDG would still be operable. However there was no analysis available for l
team review.
l The licensee attributed the failures to various root causes such as, faulty material, use of improper installation tools and improper lubrication of the hold down studs prior to torquing. Preliminary indications i
i from the licensee also indicated that other utilities i
with Cooper-Bessc.ner SDGs have experienced fuel injector i
hold down stud failures. However, to date no formal industry notification has been issued by the licensee or the vendor.
ACTIONS:
(a)
Evaluate the licensee's SDG operability analysis for various scenarios involving multiple l
inoperable cylinders during accident conditions.
RESPONSIBLE OFFICE: NRR
(
p 1
l (b)
Evaluate the need to provide additional generic k
l regulatory correspondence for multiple fuel i
injector hold down stud failures.
Issuo guidance as appropriate.
l RESPONSIBLE OFFICE: NRR 1
7.
ISSUE:
The standard TS guidance regarding overtime appears to have been developed based on a normal 8-hour shift. The licensee was on site-wide 12 hour1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br /> shifts. As a result, any need to hold an operator over resulted in exceeding 4
the TS overtime guidance by working more than 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> in 4
l i
a 48 hour5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> period. This situation had occurred relatively frequently, largely because of minimally staffed shift crews.
ACTION:
Evaluate the applicability of TS overtime requirements for plants on 12-hour shifts.
Issue additional guidance as appropriate.
RESPONSIBLE OFFICE: NRR 1
8.
ISSUE:
In the transmittal letter forwarding the diagnostic i
evaluation report, HL&P was requested to review the report and respond within 60 days describing actions they i
intend to take to address root causes of identified i
weaknesses.
i ACTION:
Review and evaluate the licensee's response to the l
diagnostic evaluation report for completeness.
Prepare an appropriate reply for EDO signature.
RESPONSIBLE OFFICE:
Region IV, with assistance from NRR and AE00 i
i l
l l
l
'i l
4 i
5
!