ML20135E184

Summary of 970225 Meeting W/Nuclear Energy Institute Re a Andersen Study of Senior Mgt Meeting Process

ML20135E184
Person / Time
Issue date:	03/03/1997
From:	Rossi C NRC OFFICE FOR ANALYSIS & EVALUATION OF OPERATIONAL DATA (AEOD)
To:	Ross D NRC OFFICE FOR ANALYSIS & EVALUATION OF OPERATIONAL DATA (AEOD)
References
NUDOCS 9703060337
Download: ML20135E184 (15)

Text

March 3, 1997 MEMORANDUM TO:

Denwood F. Ross, Acting Director Office for Analysis and Evaluation of Operational Data

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FROM:

Charles E. Rossi, Director Safety Programs Division Office for Analysis and Evaluation of Operational Data

SUMMARY

OF MEETING WITH NUCLEAR ENERGY INSTITUTE (NEI) REGARDING ARTHUR ANDERSEN STUDY OF THE SENIOR MANAGEMENT MEETING PROCESS The Nuclear Regulatory Commissiob (NRC) staff met with NEl at the NRC Headquarters on February 25,1997, for the purpose of the NRC to brief NEl on the results of the Arthur Andersen study. Attached are the NRC briefing handout and the list of meeting attendees.

Attachments: As stated cc w/atts.:

Meeting Attendees Distribution w/atts.:

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l ASSESSMENT OF THE SENIOR MANAGEMENT MEETING l

PROCESS AND INFORMATION BASE

i CHRONOLOGY June 28,1996 SRM: Evaluate indicators that can provide an e

objective basis forjudging whether a plant should be placed j

on or removed from the watch list Independent assessment of SMM by Arthur Andersen completed December 30,1996

- Idaho National Engineering Laboratory provided analytical support

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NRC Senior Advisory Panel provided oversight at key milestones in the study l

2

I ARTHUR ANDERSEN METHODOLOGY Examined written record of Senior Management Meetings e

from 1992 to 1996 l

Interviewed NRC senior managers, regional inspection staff e

and utility executives i

Conducted analytical studies of several candidate indicators e

Developed Performance Trend Charts with candidate action e

criteria j

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Developed an Integrated Performance Model for NRC j

e assessment process j

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Developed process map for the SMM j

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ARTHUR ANDERSEN ASSESSMENT OF SMM OUTCOMES Current process identifies most poor performing plants for e

discussion Most NRC senior manager and utility executives interviewed e

agreed that plants on the watch list were appropriately placed Senior Management Meeting has sometimes been slow to take e

formal actions Outcomes of Senior Management Meetings have not been e

consistent 4

l I

ARTHUR ANDERSEN FINDINGS AND RECOMMENDATIONS ON I

SMM INFORMATION BASE NRC considered characteristics related to safety and risk in e

past decisions l

e NRC assessments tend to focus on root causes of events and I

other problems

- Recommend asse ssing management and operational effectiveness on ; n ongoing basis i

Decision making process is highly subjective and minimally e

values objective indicators

- Recommend shift from subjective to objective factors j

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FINDINGS AND RECOMMFNDATIONS ON INFORMATION BASE.(t ;ONTINUED)

Deregulation may cause economic stress Economic stress does not necessarily predict changes to operating performance j

Recommend using new economic indicators outside the SMM i

process h

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ARTHUR ANDERSEN INTEGP.ATED PERFORMANCE MODEL J k

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Performance Indicators i

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Results c

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t ARTHUR ANDERSEN FINDINGS l

AND RECOMMENDATIONS ON s

SMM PROCESS l

Senior management meeting process is logically sound e

Senior Management Meeting process is dominated by the Regional e

Administrator t

There are no clear criteria for various levels of NRC actions 8

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FINDINGS AND RECOMMENDATIONS ON PROCESS (CONTINUED) i e

Presentation of information not balanced and structured

- Recommend presenting information in a rigorous and structured t

way Stakeholders do not understand SMM process and outcomes i

e

- Recommend developing a better process for compiling the public record of the SMM i

9

l ARTHUR ANDERSEN PER'FORMANCE TREND MODEL Tracks plants against nine individual indicators, including the seven l

e NRC Performance Indicators plus enforcement and allegations A " hit" is any instance of exceeding twice the industry average for an j

e individual indicator i

Each point on the plot represents a four-quarter moving sum of hits l

e SMM action criteria based on trend in number of hits Meeting an action criterion would create a " rebuttable presumption" l

e i

10 l

i ARTHUR ANDERSEN PERFORMANCE TREND MODEL Plant A O -Not Discussed 1 - Category 1 2 - Discussed but No Action Taken MPlant A, AA Action l

3 -Trending Letter 4-Category 2 5 - Category 3 iPlant A, NRC Action I

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--+- Plant A, Performance l

--e-ALL PLANT AVERAGE 5

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t ECONOMlC INDICATORS PROPOSED BY ARTHUR ANDERSEN i

Operating Cost per Kilowatt Hour e

Debt-to-Equity Ratio e

Operating Cost Trend e

e Capital Spending Trend e

Percent of utility generating. capacity from nuclear e

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12

i 3

i IMPliEMENTATION MILESTONES i

Commission Paper on implementation plan by March 31 e

- Options for process changes

- Plan for development of management and operational effectiveness l

measures and criteria i

Commission policy guidance o

incremental changes f( r June,1997 SMM i

e i

implement changes on a trial basis for January,1998 SMM e

13 I

1 l

February 25,1997, NRC/NEl Meeting Regarding Arthur Andersen Study of the Senior Management Meeting Process ATTENDEES l

Lynne Neal Tom Tipton NEl NEl 177611 Street, NW - Suite 400 177611 Street, NW - Suite 400 Washington, DC 20006-3708 Washington, DC 20006-3708 Pat Castleman, NRR Alex Marion NRC - Mail Stor 12 E4 NEl 177611 Street, NW - Suite 400 Steve Floyd Washington, DC 20006-3708 NEl 177611 Street, NW - Suite 400 Ernie Rossi, AEOD Washington, DC 20006-3708 NRC - Mail Stop T-4 A9 Tony Pietrangelo Ed Jordan, DEDO NEl NRC - Mail Stop O-17 G21 17761 i Street, NW - Suite 400 Washington, DC 20006-3708 Bill Dean, OEDO NRC - Mail Stop O-17 G21 Victor Dricks, OPA NRC - Mail Stop O-3 D4 Jocelyn Mitchell, OEDO NRC - Mail Stop O-17 G21 Theresa Sutter Bechtel 9801 Washingtonian Blvd.

Gaithersburg, MD 20878

,w. Oudley, ACRS NRC - Mail Stop T-2 E26 Edward SNenzinger-Halliburton NUS Environmental Co.

910 Clopper Road Gaithersburg, MD 20877-0962 l

Michael Smith ML&B (unknown)

Allen Ginsberg NEl 17761 i Street, NW - Suite 400 Washington, DC 20006-3708 4

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