ML20101R052
| ML20101R052 | |
| Person / Time | |
|---|---|
| Site: | 05000000, Fermi |
| Issue date: | 04/12/1984 |
| From: | Saltzman J NRC OFFICE OF STATE PROGRAMS (OSP) |
| To: | Rowsome F Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20101R032 | List: |
| References | |
| FOIA-84-433 NUDOCS 8501180389 | |
| Download: ML20101R052 (20) | |
Text
_
Distribution:
Subject:
Incentive Rt.gulation by APR 131934 State PUCs OSP Dir r/f SLR r/f w/encls: GWKerr DNash RWood JPetersen JSaltzman r/f MEMORANDUM FOR: Frank Rowsome, Assistant Director for Technology, Division of Safety Technology, NRR FROM:
Jerome Saltzman, Assistant Director for State and Licensee Relations, OSP
SUBJECT:
REPORT OF THE MICHIGAN PSC STAFF ON FERMI We have corresponded in recent months on incentive regulation of nuclear generator facilities by PUCs.
Further, we noted your trip report highlights (November 8,1983) on the ANS Winter Meeting.
In that report you mention that a number of speakers indicated that "very few utilities are looking beyond mere compliance with safety regulations and conventional maintenance practice to improve either their accident risk profile or to improve their availability."
I thought the pages I have excerpted from a recent Michigan PUC staff report would be of interest to you.
In this report
- the PUC staff uses such terms as:
"The owner of a nuclear plant is sufficiently subjected to mandatory regulations and it is not prudent to volunteer compliance when costs are an important concern." (p. 232)
"In principle, safety, public health, and environment are all noble causes and should be protected.
In reality, how safe is safe must be determined with a rational decision process. One can quict.ly get into diminishing returns when striving to achieve incremental safety.
Edison Management took the general approach to err on the side of safety." (p. 319)
"... the Staff was troubled by the fact that, in many instances, Edison exhibited near-paranoid concern for environment and safety and acted to placate any potential opposition." (p. 500).
Emphasis added.
Please let me know if you have any further questions.
hL JE.'l0ME SMTZMM 8501180389 e40621 Jerome Saltzman, Assistant Director w
kdh33 a e an censee Reladons PDR Office of State Programs
Enclosures:
Excerpts from Subject Report q
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- " Staff Investigati on of Enrico Fermi 2 Nuclitar Power Project," prepared 03. -
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NRC FORM 318 (10-80) NRCM C24o OFFIClAL RECORD COPY uso m i m - m,,a b
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STAFF INVESTIGATION OF ENRICO FERMI 2 4
NUCLEAR POWER PROJECT L
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The Staff also reviewed the question of plant rating as a result of the switcn from - once-thru to closed-cycle.
An analysis performed by Edison shows that average derating of only li, (about 12 MW) is expected to occur as a result of the CT decision.
The mechanical draf t would have improved it by 1MW. Further, that the largest derating (up to 57,) may occur only on the 3 hottest days in summer when the back pressures may increase to 312 inches.
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Finally, the plant efficiency will decrease by an average of 105 Btu /kWh as a resukt of CT, with the largest losses experienced in the summer, of up to 200 Btu.
The Staff is generally satisfied with the plant heat rate and derating conclusions. No further disallowance is recommended for these items.
Issue Analysis There are at least three iss'I2es raised by this Edison decision:
(1) Were the cooling towers necessary? Did Edison overreact to the environmental fears?
(2) Were' the cooling towe_rs oversized due to design constraints or other reasons?
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(3)
Should the expenditures on the intake system be disallowed as impr'de~5t, not used and useful,?
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In' cur judgement, Edison took the line of least resistance with environmentalists, the AEC, and other regulatory groups.
This has been While concern about possible later generally the Edison ph.lasophy.
problems was legitimate, Edison had no mandatory obligation to switch to 231 L
w su, g.
.c was not until 1975 that EPA mandated cooling towers.
Even so, exemptions were granted to units under construction, such as the 2-unit,1050 MW each, Cook plant, completed in 1977-78 in Michigan.
Edison claims that it won the appreciation of the Sierra Club due to the CT decision.
It should be noted that Edison's was one of the earliest cooling towers in the nuclear industry, although it became fairly prevalent later N
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on.
Our opinion is that Edison should have stood firm on their decision once the once-thru system was designed.
Although less desirable than CT,
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there was no serious challenge to.it.
Further, if challenged, they
_4 should have seriously resisted.
It is possible that, in the end, Edison
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had to give in.
The erection cost of the cooling towers would not have changed materially in 1975 as compared to 1973-74, when AFUDC is included, nor would it impact the schedule or interfere with other construction.
3 The owner of a nuclear plant is sufficiently subjected to mandatory I
j regulations and it is not prudent to volunteer compliance when costs are l
an important concern.
A second related question is that if Edison was reconsidering the cooling system in mid-1970, why did it not take a i
serious look at this option in August 1969--it lef t the door open for a i
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possible CT, but went forward with the lake intake route. No major N
events had occurred to alter the situation. 'NEF \\ was'under consideration in 1969; the Calvert Cliff decision did not come until April 1971.
Our conclusion is that while the cooling tower decision per se is not imprudent, the indecisive manner in which it was finally arrived at was inefficient.
The result was that Edison ended ' p with the most u
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expensive option, lots of duplication and a significant adverse effect
_on system output and efficiency.
In the nuclear business, it is dangerous to equivocate.
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As indicated earlier, the cooling tower design became subject to 2.
l the constraints of the design parameters of the condensor and turbine, which were already underway. The unit had to be derated due to higher
'back pressure and lower heat rate effi'ciency.
In 1971, Edison was planning a second nuclear unit at Fermi of the same size, which called for only one CT of 650,000 gpm capacity, i.e., somewhat larger than the ones built for Fenni 2 (450,000 gpm each). This was to be accomplished through a larger & and co.' responding sizing of turbine and condensors.
We believe, therefore, that the current cooling tower is overbuilt compared to one designed and built ab initio. Therefore, expenditures I
prorated for only one CT should be allowed, recognizing that there are savings in design and construction of two towers compared to one.
3.
Although no major installation work was done on the lake
.distharge mode, some engineering and bid analysis process was underway.
Since Edison changed their decision rather soon, and in view of the discussion in (1) above, w believe that Edison not recover expenditures
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associated wits the lake intake, design work and any installation pr epara-tion work.
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However, in view of the recommendation in (2), we belie"e disallowance of 501, of entire cost of the cooling. tower expenditure would adequately c'over item (3), and no furtiher adjustment is necessary.
l 233
Among the most positive accomplishments for Aich Edison Management; in general,. and Mr. Tauber in particular, should be commended is the relationship with the NRC.
It is a delicate and most important relationship in a nuclear project.
Thus far, Edison has managed it well.
It is our judgement that collecti ely, Edison's top management has taken serious and deep involvement in the project.
All of the exec-utives, however, expressed,the feeling that the Project Manager and the PM0 were given the widest authority for project conduct. ~ '
Management claimed a " hands off" policy.
s We believe that even though Management had a good grasp of f.he pro-ject, it has, in the large part, been docile. Management, in our opinion, has also allowed outside forces and events to dictate the p roject. Vendors and contract rs took advantage of the Edison Management approach.
Senior Management receives monthly project progress reports and visits the project site every month to receive briefings from the PMO.
Informally, there are daily and weekly meetings within the management to resolve problems, and assess options and strategies.
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The Fenni project has not suffered from lack of management atten-tion. Much of the communication between Senior Management and the PM0 was verbal.
3.
Management Philosophy a)
Although engineering and technical knowledge o'f the Edison l
Management enabled it to play a dominant role in technical decisions, it was not without its side effects.
The watchwords 318
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throughout the project were:
safety, public health, environ-mental concerns, and NRC compliance.
Edison's own version of project history is replete with phrases such as, " defense in-depth"; "to make an already safe plant safer"; etc.
Edison Management expressed near-obsessive concern for these issues.
In turn, these have permeated through all major tech-ical decisions. 'dithin two weeks of the TMI accident, Edison instituted a task force to take a comprehensive look at safety I
issues at Fermi.
In principle, safety, public health, and environment are all noble causes and should be protected.
In reality, how safe is safe must be detemined with a rational decision process. One can quickly get into diminishing returns when striving to achieve incremental safety.
Edison Management took the general approach to err on the side of safety. As the Chairman of the Board expressed it:
l "As an engineer, I view myself with a different perspactive on safety".
As the P, resident of t))e Company admitted, the QA organization has been allowed $ drive the project:
"I have' let QA have a Yree hand, because I have f ai th in them".
In tems 'cif NRC c,ompliancel the Management has, in ger.eral, taken a non-adverserial approach: "better to switch than f i g h t". Of c'ourse, this approach, coupled with good relations, has paid off thus far.
1 3 19
It is impossible for us to evaluate the cost-benefit ef fects of NRC complianco.
Admittedly, one can attribute enormous benefits in light of difficulties at Zimmer, Diablo Canyon, and the Midland projects.
We simply surmise, that additional costs have been incurred to improve licensability, safety, public concerns, and concomitant Nenefits derived,therefro'm.
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b)
Looking at the technical, decisions, one' is tempted to observe that 'it appears to be the Management policy to insulate Fermt 2 f rom outside forces to the exten't possibl,e; in 6ther words, make Fermi a self-contained complex.
Examples supporting this observation are:
Cooling towers vs. lakevdischarge On-site storage to reduce dependence on low-level waste transportation Separate, enclosed RHR Complex vs. an open pond Elaborate security system
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Shore protection barrier Four emergency diesel generators where two were needed at the time Many of these were voluntary actions at the time they were taken, and are at variance from industry norms.
It should be 320
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noted here that Edison took little advantage of the Ferni 2 location near Lake Erie.
4.
Corporate Financial Support, Budgetary Controls, and Surveillance Fermi 2 is the largest single project undertaken by Detroit Edison.
Since the project restarted in February 1977, it has been the top priority project for Edison.
It has also been the largest cash drain.
Review of annual budgets and expenditures indicates that overall financial support has been adequate for Fermi 2.
There have
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been periods of budget cuts and freezes throughout the project.
However, these were in proportion to financial restraints Comp any-wi de.
Outside of the shutdown phase 1974-77, which we shall soon discuss, and the freeze in November 1981 prompted by the Supreme Court Case on Securities, the project has received the necessary overall funding.
The annual expenditures steadily increased since 1975 at Fermi.
In most years, the actual expenditures exceeded the budget.
From time to time, restrictions were imposed on field expenditures.
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these, in our judgement, were normal management maneuvers to control field expenses, adjust to revised schedules, etc. For example, as a
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typical case', the budget for.the, year 1980 was proposed as $226 million based on requests from each group early in 1979 (before
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TMI). - After t;he normal' management eview, and reassessment of TMI effec'ts on schedule date, a.5199 million budget was proposed to the Board.
This was approved in June 1919.
No budget restrictions were imposed.
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'7.
Staff Conclusions 1.
The regulatory relationship between the EC2 project and the NRC i
has been relatively quiet, and in the Staff's opinion, posi-tive.
DE corporately advocates a non-adversary approach with the NRC and has taken an aggressive posture with the NRC only on select issues.
Given the licensing and enforcement dif-ficulties at other 1.ike-vintag'e plants, this policy, in the Staff's opinion; appears prudent.
2.
Regulation growth in' the, Quality Assuran,ce ' area was fairly stable. Most changes reflect _ escalation of enforcement philo-
' sophy by the NRC and not regulation grokth.
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3.
Regulation growth in the technical area has been substantial and is ongoing. The Staf f did not attempt to evaluate each NRC regulatory guide for spect(fc application to Enrico Fermi 2.
Detroit Edison maintains that the cost spiral at EF2 was generated by increased Federal requirements.
The Staff iden-tified the existence of these requirements.
Questions still remain with respect to certain items whether DE was required to comply or did so by corporate choice.
The evaluation of each guide and standard with respect to application to EF2 requires resources beyond those available to the Staff..
4.
The Staf f did not attempt to evaluate the ef fectiveness of DE's Quality Assurance Program in constructing a " safe" plant, since this is beyond the jurisdiction _ of the MPSC.
5.
Quality Assurance imposes visible financial and administrative burdens on a project like Enrico Fermi 2.
The Staff recognizes 370
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. establish;d a cu'bersome and arduous paperwcrk and routing system.
Turn-around time on minor engineering items typically ran into weeks - waiting for Troy approval. Later, Edison set up expediting systems such as F.A.S.T. (Field Action Sheet Troy) to monitor the engineering responses and D.C.P. progress meetings.
Finally, the engineering activities and response time suffered due to various outside A/E groupg who were remotely located 7 S-a, W (hangar design) in Boston; 5 & L (pipe analysis) in Chicago.
All their inputs were to be coordinated by Troy office. Later. in 1983, some-AE design groups were located at Fenni 2 site.
For exa. ple. the latest drywel1 steel modifica,
tion design is being done by a large crew from S 'a L, at the site.
During the period of our investigation, Staff met several times with the Director of field engineering, Mr. Dave Spiers.
In our opinion, he is well respected, competent and well qualified for the job.
In our judgment, he should have been allowed greater authority and respon-sibility towards the project completion.
Attempts to revise procedure.
granting more flexibility to field staff were turned down by Troy (see OCP weekly notes, February 24, 1983).
2.
Role of System Engineering As had been noted in several places, one of the strengths of Detroit Edison was a highly technical and competent Systems Engineering Group.
The project System Engineer is involved in all phases of system develop-ment and frequently encounters a wide spectrum of special assignments requiring technical expertise in nuclear power.
Above all, he must be able to develop systems and prepare design instruction to assure CAMEOS 1.e., constructability, availability, maintainability, economy, operabi-lity and safety.
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This technical ability facilitated communication with the outside groups, upper management and with~ fleid construction - although this last one less successfully. Technical competence of the Edison Systems Engineering Group was also commended by other principal AEs and GE Project Managers involved at Fermi 2 and also NRC (see SALP Report 1982).
Concern for safety permeated throughout the general Edison philos-ophy.
As a resul t, Project Engineering had a tendency to overdesign and err on the side of safety.
Some of the examples of this over-cautiousness ai e:
a.
All controls at Fermi 2 are centralized in the main control room.
Typically, other nuclear units have dual controls for major systems:
the main controls and the local controls.
Edison determined that, for safety reasons, no local controls be provided because people walking around the plants may be pushing buttons, etc.
While this decision may improve safety, it caused significant difficulties during the testing phase.
In repeated testing process, pumps, motors, and valves had to be opened and closed fr.om the' main room,, requiring additional communica cion and delays.,
Secondly, cable termination and instrumentation had to be
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complated before a systent could be centrally controlled.
As we have noted, cable ' pulling and termination rates were the poorest at EF2.
Therefore, in our judgment, the " single control" decision caused testing problems.
426
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NRC at the time.
(See comments by McCarthy, Engg. Committee Meeting, Nov. 1969.)
Subsequently, however, the NP.C raised the standards to ALARA.
Buildings were designed QA1 level when they didn't have to be; c.
for example, RHR and auxiliary buildings.
Similarly, higher than required Q-levels were.u. sed for piping design in the tur-bine building. As has'been.noted, all cables at EF2 were QA1 l ev el.
d.
FSAR prepared by Edison in 1973-74 was,too detailed and included
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many non-safety items and informational items.
Al so, specifi-f cations were lif ted from vendor catalo'g6e (e.g., HVAC Systems) and not carefully reviewed.
Edison engineers did,not fully realize the importance of commitments in the FSAR, or were over-cautious. Now NRC considers FSAR a binding document.
FSAR should only have included safety items.
As a result, NRC holds Edison accountable for everything specified in the FSAR, which is a lot more than required.
Also, Edison has boxed itself in by specifying higher test standards than necessary. NRC holds them to these commitments. The situation has led to some testing problems.
In their 1983 SALP report (Pre-op testing was ranked "3" i.e., poor), NRC raised these issues with the Femi Management.
We discussed the issue w'ith the PM who admitted some problems.
FSAR is being upgraded or re-written (FSAR must be completed and approved prior to the fuel load).
As an example:
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The initial FSAR specified that the reactor building
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overhead crane (used for fuel rod movement) shall be inspected / maintained once-a year (per ANSI standards).
Since fuel reload will be required every 18 months, Edison now feels that annual crane inspection (which is quite a costly and cumbersome procedure) is unnecessary.
The FSAR was.re-written to specify that the crane will be inspected prior to each reload, and if required for
'any other purpose, it will be ensured that inspection has taken place within the previous twelve months.
FSAR specified clean steam testing of the HPCI, RCIC and the main turbine. The last one is a non-safety system and doesn't belong in FSAR.
Some engineers at Edison feel that it is an NRC commitnent.
In the 1983 SALP report, NRC noted deficiencies in the Pre-op testing because test results did not match the higher FSAR performance criteria as in the case of power supply and battery systems (already turned over to NUC OPS). - It should be noted that a 5
significant portion of EF2 FSAR came out of GE spect-cifications. GE also reviews many test specs and test resul ts on safety systems.
Overall, S,taf f believes that the System Engineering Group for Fermi 2 has been the backbone of Project Engincering Organintion.
The group has technically capable people who unders'tand nuclear systems and can interact wi th HRC and AE groups.
In our judgment, existence of this 423 L._
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The initial FSAR specified that the reactor building overhead crane (used for fuel rod movement) shall be inspected / maintained once a year (per ANSI standards).
Since fuel reload will be required every 18 months, Edison now feels that annual crane inspection (which is quite a costly and cumbersome procedure) is unnecessary.
The FSAR was re-written to specify that the crane will be inspected prior to each reload, and if required for
'any other purpose, it will be ensured that inspection has taken place within the previous twelve months.
r FSAR specified clean steam testing of the HPCI, RCIC and the main turbine.
The last one is a non-safety system and doesn' t belong in FSAR.
Some engineers at Edison feel that it is an NRC commitment.
In the 1983 SALP, report, NRC noted deficiencies in the Pre-op testing because test results did not match the higher FSAR performance criteria as in the case of power supply and battery systems (already 2-turned over to NUC OPS).
It should be noted that a
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significant portion of EF2 FSAR came out of GE speci-ci f'ica tions.
GE al'so reviews many test specs and test resul ts on safety systems.
Overall; Staff helieves that the System Engineering Group for Fermi 2 has been the backbone of P'roject Engineering Organization.
The group has technically capable people who understand nuclear systems and can interact with NRC and AE groups.
In our judgment, existence of this 428
L group preserved the proft:ct daring shutdown and prevented it< disin-tegration._ One disadvantage of competent engineering group aas that they always strived for perfection ~and continual improvements at the expense of target schedules. Engineers have to learn to quit fiddling.
3.
Project Design Group Performance of. design groups (bo'th in-house and out-of-house AE's) has been 'the single-mott failure in' the Ferm.i 2 project.
Several factors ]
contributed to this perfort. nance, including:
organizational and in'ternal problems ',
gross undere,stimation of 3htail design efforts from the incep-tion of project excessive redesign of systems poor control and supervision of design efforts and lack of co-r ordination between several speciality AE's and DECO; over-fragmentation between disciplines excessive turnover of. qualified design engineers over the project history.
As has been noted, Edison _ paid scant attention and importance to the detail design effort necessary in a nuclear project.
At ' first, Edison felt confident that it could handle most.of the detail design work in-house with some outside help.
Pretty soon it discovered that,' not only could it not meet the project schedules, but the quality of design work 1
l was' deficient.
As we have discussed in the case of the' radwaste-system, south pump house and general service water, the systems were poorly de-signed for both, operability and maintainability. Costly modifications,had, r
to be made later.to correct deficient design.
Careless design of systens shows hundreds of elementary mistakes such as:
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r engineering personnel with nuclear. experience seriously impacted the progress. Turnover was a serious problem in this area during much of the project.
Simultaneous work on EF3 PSAR in 1972-73 further taxed the technical resources.
s 2.
= Environmental and' Safety Concerns Safety and environmental concerns were paramount to the Edison management throughout the Fermi project.
Compliance in many cases wa~s ~
voluntary (e.g., cooling towers) beyond the regulatory req'uirements and in some cases, pre-emptive.
Staff findings are mixed on this issue.
On the one hand, Edison exhibited good judgement, responsible corporate attitude and respect for public concerns.
These paid off throughout the project in terms of publ4c understanding, intervencr opposition and local and state support for the project.
The importance of this to the project, Edison, and ultimately to the ratepayers, should not be minimized.
On many issues, Edison came out ahead because of their anticipatory actions.
On the other hand, the Staff was tenubled by the fact that, in many instances, Edison exhibited near-paranoid concern for environment and safety and acted to placate any potential opposition.
iheStaffisleft with the impression that Edison was attempting to build a self-contained, self-sufficient complex insulated from outside environment, elements and f
forces.
Numerous examples of these were found:
on-site storage, RHR building, shore barrier protection, and cooling towers.
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3.
Relationship with the Nuclear Regulatory Conmission Because of the management philosophy on safety issues as described above, there was inherent r'espect for the nuclear regulatory process.
Managenent directives attached great importance to regulatory compliance and a non-adversial relationship to the regulators.
This went beyond lip service or good public relations into substantive matters.
Sincerity of purpose and mutual responsibility was recognized.
As a result, one of the major success stories at EF2 was its NRC relationship and record.
The importance of this has been brought home by a recent rash of QA-related nuclear disasters.
Edison should be commended for their efforts in this area.
4.
Project Construction a.
In general, the construction progress has been at the mercy of engineering, material procurement and quality control inspection functio 8s.
b.
The construction managet1ent organization has generally performed well and been staffed with competent people.
One criticLsm in this respect is the fact that Edison tends to move i
their people arou'nd too of ten, both within the project and across' projects.
Second,,(and this is a generic problem with the Edison organization), management tends to over-protect its own people.
Even whenssignificant performance deficiencies were foiand, manig~ement took benign action. This will be further discussed later.
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A Final '40rd f
By design, this investigation highlights only the weaknesses of the
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Fermi 2 project management.
It deserves mention here that throughout the
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project we noted numeroufixamples of superior performance, good judge-g ment and responsible management.
These have received inadequate atten-tion in our report.
l As we mentioned in the beginning of t'.is report, constructing a f
nuclear plant is a complex, massive undertaking.
It calls for a long sustained commitment by the utility - commitment both in skilled manpower and financial resources., The construction of n'uclear projects has become I
particularly agonizing due to increasing public pressures, regulations
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and safety concerns. Fenni 2 is a far cry from the project that Edison set out to build in 1968.
The management has faced thousands of issues, dilemmas and dect-sions.
In the main, we believe they have been resolved in a reasonable and prudent manner, notwithstanding all the questions raised in the body o/ this report.
A positive characteristic of Edison Management is that it' was never afrald 'of self-evaluation and self-criticism in order to improve the
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efficiency and, performance at EF2.
Scores of project reviews in-house and by third parties attest to that.
Also, whenever weaknesses were pointed ou,g, Managenent took appropriate action.
It should be recognized that an owner does not always control events and circumstances.
Nor can he predict the outcome of his own actions or those of others.
Often Edison, as owner of EF2, paid for events cr misjudgements of others unre-lated to EF2 occurring elsewhere.
The TML accident is a glaring exa:nple of this.
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f A second positive aspect of Edison ftanagement is the humanitarian approach with which it dealt with complex human problems.
Despite all its engineering and technical aspects, construction of a nuclear plant still involves comple-human interactions.
In the Staff's opinion, Edison took a fair minded and compassionate approach in resolving dispu-tes, motivating craft and contractors.
Perhaps in todays world of com-petition these are consi'dered unnecessary impediments to efficiency and progress.
The Staff believes t, hat they are -an essential ingredient of a successful project, particularly when public safhty is involved.
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On the important but delicate iss'ue of safety, regulations and NRC compliance, Edison has walked a tightrope.
All evidence indicates that Edison made safety of paramount concern and remained on guard to prevent a major quality control infraction.
Whenever it came to the fianagement's attention, quality control and safety issues were faced squarely and j
courageously (terminating Parsons, taking over QA function from Daniel).
On safety issues, Management did not compromise and of ten erred on the side of safety.
Edison also showed good corporate responsibility on environmental concerns.
Surely, in the Staff's judgement, they resul ted in a somewhat more expensive plant.
In the end, the Staff believes that Edison, and therefore its ratepayers, got a quality-built plant which will serve Michigan energy needs efficiently and reliably for years to Come.
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