ML20135H814

Rev of Backfitting Process for Power Reactors, 10CFR2 & 50 Final Rules.Section 2.204 Re Order for Mod to License Revised as Stated.Effective Date 851021

ML20135H814
Person / Time
Issue date:	09/17/1985
From:	Chilk S NRC OFFICE OF THE SECRETARY (SECY)
To:
References
FRN-49FR47034, RULE-PR-50 NUDOCS 8509240258
Download: ML20135H814 (78)

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10 CFR PARTS 2 AND 50 ,

Revision of Backfitting Process for Power Reactors AGENCY: Nuclear Regulatory Commission.  !

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l Action: Final rule. l Sumary: The Nuclear Regulatory Commission is revising its regulations to establish standards and an agency discipline for future management of backfitting for power reactors. Backfitting is a process which can include both plant-specific changes and generic changes as applied .to one or more classes of power reactors. As described in the rule, backfitting is defined as the modification of or addition to systems, structures, components, or ,

design of a' facility; or the design approval or manufacturing license for a facility; or the procedures or organization required to design, construct or operate a facility; any of which may result from a new or amended provision in the Comission rules or the imposition of a new or different regulatory staff position interpreting the Commission rules after (i) the date of issuance of the construction permit (CP) for the facility for facilities having construction permits issued after October 21, 1985; or(ii) six months before the date of docketing of the operating license (0L) application for the facility fcr facilities having construction permits issued before h October 21, 1985; or (iii) the date of issuance of the operating

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license for the facility for facilities having operating licenses; or (iv) the date of issuance of the design approval under Appendix M, N, or 0 of 10 CFR Part 50.

EFFECTIVE DATE: October 21, 1985.

FOR FURTHER INFORMATION CONTACT: James R. Tourtellotte, Chairman, Regulatory Reform Task Force, U. S. Nuclear Regulatory Commission, Washington, D. C.

20555. Phone: (202)634-3300.

SUPPLEMENTARY INFORMATION:

Background

The Commission initiated this rulemaking proceeding for the purpose of ,

establishing requirements for the future management of backfitting for power reactors. Backfitting can include both plant-specific changes and generic changes applicable to one or more classes of power reactors.

Section 50.109 of the Commission's current power reactor regulations provides the following standard for backfitting decisions: backfitting may be required where the Commission finds "that such action will provide substantial, additional protection which is required for the public health and safety or the common defense and security." On its face, this appears to be a relatively high standard. In practice, however, 650.109 has rarely been

s formally invoked, and it is therefore difficult to tell the extent to which this standard has actually been applied to previous backfitting decisions.

The Comission has decided that a new, more specific standard and related procedures should be applied by rule to backfitting decisions.

The Comission published an advance notice of proposed rulemaking and policy statement on this subject at 48 FR 44217 (September 28, 1983) and more recently, a notice of proposed rulemaking at 49 FR 47034 (November 30,1984).

The complete record of this proceeding is available for review in the Comission's Public Document Room at 1717 H Street, NW., Washington, D.C.

Public Coments The coment period officially closed January 29, 1985. A number of coments were received after that time, the last of which was filed on March 12, 1985, by the Advisory Comittee on Reactor Safeguards. All coments were considered ..

in formulation of the final rule.

l Fifty-seven coments were filed as follows: utilities, 30; vendors, 3; architect engineers and service companies, 5; industry groups and trade associations, 3; consulting engineering firms, 3; various individuals and groups,10; federal agency,1 (DOE); states,1 (Illinois); Advisory Comittee on Reactor Safeguards, 1.

As a result of the responses to the advance notice of proposed rulemaking, the Comission posed six numbered questions and other unnumbered questions in the

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_4-notice of proposed rulemaking. The responses to these questions have assisted the Consnission in reaching its determination on the content of the final rule.

Question 1 "Should 650.109 also apply to backfitting imposed through rulemaking? When a modification is imposed by rule or regulation, should the affected licensee be afforded an appeal to the ED0? What is the basis for this position?"

The Union of Concerned Scientists (UCS) stated that 550.109 should not apply.

to rulemaking. They assert that the Atomic Energy Act and prevailing case law do not pennit. the consideration of cost in determining minimum safety standards. (See UCS 1983 comments, pages 4-7.) An appeal to the ED0 from a requirement imposed by rule cannot be legally permitted, according to UCS, and the Commission may not circumvent the legal requirements of the Administrative Procedure Act, 5 USC Section 553, by permitting appeals outside of the public _

forum to the Executive Director for Operations.

The Ohio Citizens For Responsible Energy (OCRE) also oppose application of

$50.109 to rulemaking because they say " licensees are afforded enough opportunities in the rulemaking and administrative process to contest the rules." They suggest that a petition for waiver of a rule under 10 CFR 62.758 or an exemption under 10 CFR 650.12 provides sufficient remedies for licensees.

1-l g The Nuclear Utility Backfitting and Refonn Group (NUBARG) believes that back-l fitting controls should apply to facility modifications imposed by rulemaking.

They state four reasons for their position. First, in terms of :,;blic health and safety, they state the practical impacts of backfitting by rulemaking or backfitting on a plant specific basis are the same. Therefore, NRC l

regulations should require a documented analysis of a backfit regardless of the source of the requirement. Second, there is no apparent justification for ,

l excluding backfit modifications imposed by rulemaking. They suggest that the NRC should satisfy itself of the need for and efficacy of any backfit

l. required. Third, if the backfitting rule did not apply to rulemaking, there

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may be a natural temptation by the staff to avoid the' effects of the backfitting rule by imposing requirements through rulemaking. Fourth, there i

would be no additional burden because much of what the rule would require already takes place during the CRGR review of proposed rules. NUBARG states I' that it does not advocate the preparation of a plant-specific backfitting i

j analysis for backfits proposed in the context of a rulemaking.

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NUBARG also believes that an opportunity for an appeal to the Executive

Director for Operations should exist. The licensee, they say, should be given i

i the opportunity to demonstrate that the modification established by rule or i

regulation should not be required for its facility because that facility is substantially different from the type, design, or vintage of facilities-evaluated in the modification analysis and as a result, findings made pursuant to $50.109 are not applicable. They go on to cita the need for flexibility in the rulemaking process as a basis for their position. The Atomic Industrial

3 Forum (AIF) and other industry commenters appear to be in general agreement with the positions taken by N'JBARG.

DOE also states that 650.109 should apply to rulemaking since rulemaking and orders are "the only two avenues through which a backfit should be imposed by the Commission." They oppose appeal to the EDO, however, and suggest use of a waiver request under 10 CFR 9 2.758.

Question 2

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"Should $50.109 limit backfitting to backfits imposed by rule, regulation or order? If the imposition of backfits is not limited to rules, regulations or orders, what other mechanisms should be employed?"

UCS opposes such a limitation, stating that the effect would " undoubtedly be to eliminate the condition which the Supreme Court found legally necessary to ,

justify two-stage licensing," citing Power Reactor Development Company v.

Union, 367 U. S. 396, 414 (1961).

1 OCRE takes a somewhat different position. They state that the Atomic Energy Act " clearly states that the Commission's safety standards are to be imposed by rule or order . . . However, the NRC is in the habit of imposing regulatory requirements through non-enforceable means (e.g., Reg. Guides, SRP)." OCRE states that because legally binding requirements are those reached through rulemaking or adjudication and because these processes inherently involve weighing pros and cons of adverse parties, they are

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- 2 reasoned, open deliberated processes subject to judicial review and therefore need no further analytical requirements. OCRE continues, "While it would be preferable if all regulatory requirements resulted from rules or orders, it is a fact of life that the staff imposes regulatory requirem2nts on its own."

OCRE appears to not take a position either way on the question but is willing to accept current staff practice as a " fact of life."

NUBARG takes a strong position that 550.109 should limit backfitting to those modifications imposed by rules, regulations or order. They state that current and past staff practice of requiring licensees to backfit facilities on the

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basis of non-binding guidance requirements is illegal. Regarding the second part of the question, NUBARG states that there are no means other than rules, regulations or orders by which the Commission may lawfully require a licensee to modify its facility. In short, it is NUBARG's position that Section 50.109 would violate the statute if it permitted imposition of backfits by any means I

other than rules, regulations or order. The AIF and other industry commenters

! appear to be in general agreement with NUBARG's position.

DOE states that backfitting should only be imposed by rule, regulation or order and that all analyses, reviews and decisions required by the proposed rule should apply to all methods of backfitting.

Question 3 "Should a documented analysis of a proposed backfit come before the backfit is l issued or only after an affected licensee lodges an appeal?"

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.UCS urges that there be no requirement for a detailed analysis unless the licensee appeals because such analyses in absence of an appeal would, in their words, "be an utter waste of time and resources." i OCRE suggests that to require analysis of every proposed backfit would create too great a burden on the staff. OCRE appears to reserve the term "backfit" for "non-enforceable regulatory requirements" and therefore, " licensees should feel free to contest a proposed backfit."

1 NUBARG takes the position that there should be a documented analysis by the NRC whenever its proposes to require licensees to modify their facilities.

They state, "a plant modification has the same impact regardless of who initiates it. Therefore, just as the licensee must always develop a sound technical basis in support of a proposed facility modification, so should the staff." Such an analysis is necessary, they argue, so that the NRC can be assured that the backfit it wishes to impose is truly needed to enhance safe reactor operations and that it will have the intended effects.

AIF suggests that such evaluations are needed to determine whether the proposed backfit does increase safety, to what extent, and at what costs.

Further, it is needed "to impose discipline into the backfit process." AIF also suggests that licensees should not be placed in a position of having to invoke procedure in orcer to initiate backfit analysis. To do so, they say, i

places the licensee in a position of having to jeopardize its relationship with the staff by opposing a change that the staff is requiring. l t , I 4

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o AIF also suggests that, in addition to the seven factors proposed in the Federal Register notice, the following factors should be considered in making an analysis of a proposed backfit.

1. A precise statement of the specific objectives that the proposed modification is designed to achieve.

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2. A general description of the activity that would be required by the

. licensees or applicants in order to complete the modification.

3. Alternatives to the proposed backfit and how these alternatives (including the recommended alternative) will affect other proposed or imposed facility backfits; and

4. A priority ranking by safety significance of each proposed backfit relative to other proposed or imposed backfits. ..

5. Whether, after balancing of all appropriate factors (including those in this paragraph) the demonstrations required in 550.109(a)have been made.

DOE states that the burden of proof for demonstrating that an increase in safety is needed should rest with the staff rather than requiring the licensee to prove that such an increase is unnecessary. Their reasoning is that,

" requiring a written basis and analysis of a proposed backfit before it is l

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3 imposed will increase the likelihood of improved safety and increase confidence that its effects are understood."

Question 4 "Should backfitting be defined as 'the imposition of new regulatory require-ments or the modification of previous requirements' (the cause) or defined as a ' modification or addition required by the Comission to the facility or to the structure, rystems or components of such facility, the design thereof, or the procedures or organization required to construct or operate such facility' (theeffect)? What is the basis for this position?"

UCS believes that neither definition is appropriate, citing its 1983 coments, pages 10-30, in sIspport of its position. UCS further suggests that exclusion of rules, regulations and orders from the definition of regulatory require-ments raises questions about what is meant.

OCRE states that backfitting should be defined as "the imposition of new requirements; i.e., the cause, not the effect." Its reasoning is that "Since we interpret backfit to apply only to the non-enforceable requirements, licensees are free to use alternative methods to comply. This, again, is a difficult point which should be resolved by bringing the NRC's practices into line with the Atomic Energy Act (AEA); i.e., all requirements imposed by rule or order."

, AIF suggests that the definition should be stated in terms of the effect which they suggest should read:

.9 As used in this section, "backfitting" of a production or utilization facility means a modification; or addition required by the Comission to the design approval, manufacturing licer.se, or facility or to the structures, systems or components of such facility, the design thereof, or the procedures or organization required to construct or operate such facility, after . . . (times specified in proposed rule).

They also suggest that backfits should include requirements to perform extensive analytical efforts or tests, regardless of whether modifications or additions to the structures, systems or components of a facility or design result from such analytical efforts or tests. The basis for rejecting regulatory requirements as a part of the definition is directly related to their previous argument that backfits may only be legally imposed by rule, regulation or order. AIF's position is generally supported by other industry coments.

DOE would reccmend the following in lieu of either the "cause" or "effect" y

definition: .

1. A " modification," means a change required by the Comission to a site permit; a design approval; a production or utilization facility, or the structures, systems, or components of a facility; to the procedures pursuant to which a facility is to be constructed or operated; or to the organization required to construct or operate such a facility.

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2. A "backfit" means "a modification not imposed by the Comission for achieving compliance with a construction permit or operating license, at the time of issuance or as amended, or contained in the requirements incorporated by reference in the permit or license."

The State of Illinois rejects the use of " regulatory requirements" as too ambiguous and suggests the definition be more precise for clarity and scope.

Question 5

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"The industry's proposed standard for justification of a backfit is

' substantial improvement in the overall safety of the plant considered over its remaining life.' Is it appropriate to include the concept of 'over its remaining life'? What other standard could be used?"

UCS suggests that it is not appropriate to consider the concept of "over its ,

remaining life" for the following reasons:

1. Such analysis can only be based on probabilistic risk assessment and that methodology is not appropriate.

2. The concept creates an incentive for delay and obstructionism and rewards those who del'ay the most.

3. " Benefits" are currently expressed by NRC in terms of annual average dose " avoided" and this is inconsistent with the concept of

" remaining life".

4. The concept does not account for problems caused by aging and deterioration of equipment which are likely to increase as a plant ages.

5. There is no justification in law or policy for subjecting people around older plants to a greater risk than those who live around

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newer plants.

OCRE also objects to the use of the standard because of what they perceive to be implication of required use of probabilistic risk assessments.

NUBARG suggests that use of the concept is appropriate as being one factor ..

among many that should be considered when a backfit is required. Industry commenters generally support this position.

Question 6 "To what extent may the Commission consider cost, including the economic costs in backfitting decisions under standards and processes proposed in 650.109?"

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UCS cites its previous 1983 comments in support of its position that costs may not be considered under the Atomic Energy Act and established case law. OCRE also opposes cost consideration as a p3rt of the decision process.

AIF takes the position that cost may be considered and that such costs should include:

1. Costs of evaluation, engineering, construction, material procurement, Allowance for Funds Used During Construction, (AFUDC) and investigations;

2. An attributable portion of replacement power costs during down time for implementation;

3. Operating costs due to changes in specifications, procedures, operator retraining and training manuals, increases in manpower ,

requirements and net generation losses;

4. Impact on preoperational startup, operator training, procedure development and system turnover during plant construction; and

5. Any incremental increase in man rem exposure as a result of installation and subsequent operation of the modification.

As a basis for the position stated, AIF attaches to their comment a legal

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memorandum entitled, " Consideration of Cost and Benefits in Connection with

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Backfitting." This memorandum takes the position that the Atomic Energy Act and its legislative history, court decisions, Commission regulations and documents, the Energy Reorganization Act and Executive Order 12291 and the NRC's General Counsel memorandum dated May 4, 1984, all support the conclusion that costs may be considered in connection with backfitting. Industry comment generally supported the AIF position.

DOE also conducted a legal analysis of the cost question. They stated:

The legal conclusion which emerges from the foregoing is that, except for deciding the narrow question of whether a backfit should be required for construction pennittees to eliminate or reduce to a threshold level a parti::ular risk in order to meet the " adequate protection" test, the NRC has broad discretion to consider the relationship between benefits and costs in deciding whether to impose a backfit.

The Comission also requested comments on whether reliance upon probabilistic risk assessments is prohibited by the Atomic Energy Act as suggested by UCS.

OCRE agreed with the UCS position.

AIF takes the position that UCS mischaracterizes the industry position on the useandvalueof'probabilisticriskassessment(PRA). They point out that PRAs should support, not supplant, determinative requirements. NUBARG points out that neither the industry nor the proposed backfitting rule mandates the use of PRAs. They point to.the fact that the proposed industry rule would require the use of PRAs only "where appropriate and where pertinent data is e i

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available." They also suggest that the Atomic Energy Act does not prohibit the use of PRAs.

The Comission requested coments on the correctness of the UCS position that "the Comission exercises its rulemaking authority to establish nuclear i reactor safety standards, and licensees may avoid those standards only by '

obtaining a waiver under 10 CFR 62.758." NUBARG states that UCS misunderstands 92.758 and the operation of the backfit rule. They further suggest that neither of the proposed backfitting rules can reasonably be read-as permitting licensees to avoid requirements applicable to their facilities.

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Those rules, they state, would simply require the staff to document the basis for its conclusion that a backfit is required.

The Comission requested coments on whether the elements of the proposed j backfitting rule are too prescriptive and are truly needed to ensure that the staff considers all factors that are appropriate before it imposes a backfit. ,

NUBARG points out that virtually all of the elements of the analysis have been used by NRC before and are sufficiently broad to be applied in most, if not all, by backfitting situations. The State of Illinois remarked: "The l

l Department [ State] believes that the seven factors contained in the proposal

provide an' appropriate means for balancing all factors in determining whether backfitting should apply." AIF agreed with.the seven factors but suggested the addition of five more.

The Commission also expressed a concern over whether preparation of a backfitting analysis should be required as a condition precedent to the

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issuance of a license amendment. NUBARG stated that "unless requested by a licensee, the staff should not be requested to prepare a backfitting analysis as a condition precedent to issuance of a license amendment if_the licensee requests an amendment pursuant to 10 CFR 550.90." NUBARG points out that application for significant amendments requires a description of the proposed modification and the preparation of a safety analysis report by the licensee.

Since the licensee presumably will have subjected the amendment to an internal.

cost effectiveness review, a backfitting analysis by the NRC would appear to be neither necessary nor appropriate. AIF was in general agreement with this position and stated further that the option to allow a licensee to request a backfitting analysis should be retained. AIF suggested that there are instances when licensees are under informal but intense regulatory pressure' to submit an amendment request. In this circumstance, backfitting analysis should precede the issuance of a license amendment according to AIF. General coments from other members of the industry tend to support the NUBARG and AIF positions. ,

Coments on the Additional Views of Comissioner Asselstine Comissioner Asselstine's additional views were generally supported by Ecology / Alert, Federal Conservationists of Westchester County, Inc., Ohio Citizens for Responsible Energy, and UCS. Industry coment generally opposed Comissioner Asselstine's approach. Similarly, the Department of Energy did not support Comissioner Asselstine's alternative backfit rule, and the State

-of Illinois had a mixed response.

Although UCS endorses Commissioner Asselstine's position, it suggests two changes. First, it takes exception to Comissioner Asselstine's rule to the extent that it prohibits consideration of monetary co G at the operating license stage only for backfits related to safety matters that were left unresolved at the time of issuance of the construction permit. UCS believes that so long as construction permits are to be granted on the basis of pre-liminary design concepts, it is not legitimate to consider as backfits, changes required between the construction permit and operating license, or to consider costs at that stage. Second, UCS objects because Comis-sioner Asselstine's proposal does not provide for formal public participation in backfitting decisions. UCS believes that the decisionmaking process should be open and accessible to all persons who might be affected.

OCRE also suggested two changes to Comissioner Asselstine's proposal. First, they would remove review by CRGR because, they say, CRGR does not further the mission of the Comission but serves only to discourage new safety ,

improvements. Second, they, like UCS, would provide an opportunity for public coment for both generic and plant specific backfits.

In its discussion rejecting the proposed use of " regulatory requirements" in the definition of backfitting, the State of Illinois endorses "the more precise definitions of backfitting proposed by Comissioner Asselstine and the industry" and to that extent, could be considered as endorsing Comissioner Asselstine's approach. However, the State of Illinois also stated that they did not agree with Comissioner Asselstine's proposals to specify in the regulations a presumption in favor of the backfit. They l

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believe that seven factors contained in the proposal provide an appropriate means for balancing all factors in detennining whether backfitting should apply.

The thrust of the industry position appears to be that many of the terms used by Comissioner Asselstine in his proposed rule are ambiguous and undefined and in other instances, where the standard is well understood, it is simply misconceived. For example, NUBARG points to Comissioner Asselstine's proposal to define backfits in terms of changes to facility design, con-struction or operation " imposed by the staff.to . . . satisfy a regulatory staff position" developed after a specified period. NUBARG complains that

" regulatory staff position" is not defined. AIF states that the word

" satisfy" in this context cannot be anchored to any applicable statutory standard, nor to any prevailing doctrine of administrative jurisprudence.

NUBARG questions the ultimate effectivess of such an alternative rule bechuse, they argue, backfits may not be legally imposed on the basis of such .,

documents.

Industry takes a different tack with regard to the position espoused by Commissioner Asselstine that the basic premise of nuclear regulation should be to " reduce the risk to the public caused by these facilities to a level that is as low as reasonably achievable." NUBARG suggests that this approach  ;

reverses the presumption of regularity associated with past NRC licensing decisions. Those who have already been granted licenses and thus have been j deemed " safe enough" by the NRC could,.according to NUBARG, find themselves

.having to justify routinely why their licenses should not be modified. This, l

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NUBARG states, raises serious legal questions of fundamental fairness and due process, and appears to be at odds with the Administrative Procedure Act.

NUBARG also complains that the standard suggested by Comissioner Asselstine is potentially open-ended.

AIF further suggests that the Atomic Energy Act requires " reasonable assurance of the public health and safety" and reasonable assurance is not equated with "as low as reasonably achievable." AIF further states that this standard is at odds with Section 103 (b) of the Atomic Energy Act, which provides, in part, that "The Comission shall issue such licenses . . . to persons applying therefor . . . (to) who are equipped to observe and who agree to observe such safety standards to protect health and to minimize danger to life or property as the Comission may, by rule, establish: ...

AIF suggests that this language has been interpreted by the Comission in its regulations to require

" reasonable assurance" that licensed activities of the Comission can be conducted without endangering the health and safety of the public, citing, for example,10CFR550.57(a)(3). They also cite Citizens for Safe Power, Inc.

v. Nuclear Regulatory Comission, 524 Fed. Second 1291, 1297 (D.C. Circuit 1975) for the proposition that " absolute or perfect assurances are not required by AEA and neither present technology or public policy admit of such a standard."

The Department of Energy also does not support Comissioner Asselstine's alternative proposed backfit rule. This proposed rule, DOE states, " detracts from the basic purpose for instituting a new backfit rule and, if adopted, would perpetuate the signficant deficiencies of backfitting practices of the l

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past." DOE further suggests that Commissioner Asselstine's definition of backfitting is too narrow; that the "as low as is reasonably achievable" standard is inappropriate, and would probably be inconsistent with safety goals should those be established; that the limitations on the use of quantitative cost benefit balancing would be " overly restrictive" and would be "a regressive step for modern analysis techniques"; that the decision criteria are not identified in Commissioner Asselstine's rule; and that the implementation procedures have several major deficiencies.

Commission Position The Commission is appreciative of the time and effort expended by those who submitted comments. Backfitting is a matter of considerable importance and the views expressed in the' comments have been very helpful to the Commission in its deliberation. To some extent, the final rule will be modified from the proposed rule to reflect the views expressed.

Since there is no practical difference between a backfit that is imposed pursuant to a rule or a staff position interpreting a rule, the Commission will alter the final rule to require a documented analysis of required back-fits regardless of the source. A plant-specific backfit analysis will not be required in rulemaking and the factors specified in the rule will be reviewed only on a generic basis for rulemaking purposes. Because there must be safety reasons for the agency to impose any changes to a regulatory requirement or a staff position, applicable to the licensee, because the safety consequences are unknown until analyzed, and because the Commission should fully understand

the effects of a proposed backfit before its imposition, it is of little

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consequence how a backfit is imposed. Safety and sound management require that analysis precede imposition of a new or modified regulatory requirement or staff position. It follows that those backfits imposed by rulemaking should undergo the same scrutiny as proposed by other means. It also follows that changes in regulatory requirements or staff positions for procedures and organization should also be analyzed before implementation to determine, inter alia, the safety significance of any such proposed change. The final rule reflects this position.

Many of the most important changes in plant design, construction, operation, organization, and training have been put in place at a level of detail that is expressed in staff guidance documents which interpret the intent of broad, generally worked regulations. The NRC has determined that the correct focus for backfit regulation is the establishment of effective management controls on existing staff processes for the interpretation of regulations that are ..

known to result in valuable upgrades in industry safety performance. Thus, the Comission opts to adopt a management process not only for the promulgation of regulations as backfit instruments, but also for the lower tier staff review and inspection processes known to result in reactor plant i

changes.

The Commission agrees with those who suggest that the Staff should not be l

required to prepare a backfitting analysis as a condition precedent to

, issuance of a license amendment if the licensee requested the amendment l

l pursuant to 10 CFR 9 50.90. If a licensee believes that the amendment process l

is being used by the staff to impose a backfit, the licensee may invoke the rule under 5 50.109. It is unnecessary to amend the rule in this regard since mention of the point here provides adequate direction to the Staff and licensees.

Considerable attention was given to the question of whether backfitting should be defined in terms of its cause or its effects. After due consideration, the Commission believes that the definition for backfitting should take into account both the cause and the effects. Therefore, the definition is modified accordingly.

Question 5 concerned the industry's proposed standard for justification of a backfit and the suggestion that the " substantial improvement in overall safety of the plant considered over its remaining life" should be incorporated into the rule. In our view, the concept of "over its remaining life" is already incorporated in the rule under 550.109(d)(8). There is no need to place that concept in the rule at another place.

The additional factors suggested by the industry.for inclusion under 550.109(c) generally appear to be reasonable and not unduly burdensome.

Therefore, the thrust of the additional factors will be included as appropriate in the final rule.

As the accountable manager for backfitting, the Commission has directed the ED0 to establish backfit procedures and to ensure appropriate rights of j i

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appeal. The Commission believes it is unnecessary to include in the rule a section establishing appeal rights to the Executive Director for Operations.

Consideration of Costs in Backfit Decisions In the current rulemaking, comments were filed by UCS and AIF stating strongly contrasting legal views concerning the Commission's authority to consider the costs of new safety requirements which the' Commission would impose if costs were not a factor in the decision. (See Question 6, supra.) In view of the importance of the cost issue and the strongly divergent views stated in the

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comments, it is important to set forth the Commission's legal and policy views on this matter.

The costs associated with proposed new safety requirements may be considered by the Commission provided that the Atomic Energy Act finding "no undue risk" to the public health and safety can be made. There may be any number of ways by which the Commission can arrive at such a conclusion. Each approach could have different costs associated with it and it cannot be seriously argued that in such circumstances the Commission is statutorily prevented from choosing the most cost effective means of protecting public health and safety.

Similarly, it may be presumed that the current body of NRC safety regulations provides adequate protection. Where new information indicates that improve-ments are needed to ensure there is "no undue risk" on either a. plant-specific or generic basis which the Commission believes to be the minimum necessary, such requirements must be imposed. However, where there are alternatives for l

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achieving the improvements which have different associated costs, such costs may be considered.

Cost considerations have been a part of the Commission's regulatory approach in many other instances. For example, the ALARA principle requires Commission licensees to meet an absolute set of radiation exposure standards but also requires further reductions in exposure where the cost of the exposure avoided outweighs the cost of implementing controls to avoid the exposure. Commenters who addressed the proposed backfit rule and opposed the use of costs did not address this point. It would appear that the only situation where the consideration of costs may be seriously challenged is where a new requirement is necessary to provide an absolutely minimum level of protection to the public health and safety and no alternative means of achieving such protection are apparent.

In general,. the consideration of costs associated with incremental safety ,

improvements is within the NRC's statutory mandate. However, the cost of new safety requirements will not be considered where such requirements are necessary to ensure there is no. undue risk to the public health and safety and no alternatives are available.

After reviewing all of the comments and positions stated, the Commission believes that there is sufficient authority in.the statutes, case law, and Commission practice to justify making cost considerations in backfitting l

l decisions. Since consideration of costs was a part of the proposed rule, the rule will remain unchanged in this regard. The Commission also rejects as l I

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without merit the suggestion that probabilistic risk assessments are precluded by law.

Description of Final Rule The proposed amendment of 650.54(f) ensures that except for information sought to verify licensee compliance with the current licensing basis for that facility, the reason or reasons for each information request must be prepared prior to its issuance to determine whether the request is for information already in the possession of the applicant or licensee or instead will require the institution of studies, procedures, or other e'xtensive effort to generate the necessary data to respond. If extensive effort is reasonably anticipated, the request will be evaluated to determine whether the burden imposed by the information request is justified in view of the potential safety significance of the issue to be addressed.

6 It should be noted that 6 50.54(f) does not by its terms apply to the review of applications for licenses or amendments. Consequently, if the staff seeks information of a type routinely sought as a part of the standard procedures applicable to the review of applications, no analysis will be necessary. If i the request is not part of routine licensing review and falls within the purview of 650.109, however, a full analysis is most likely indicated.

Requests for information to determine compliance with existing facility requirements or for fact-finding reviews, inspections and investigations of accidents or incidents, however, usually are not made pursuant to 550.54(f) i nor are such requests normally considered within the scope of the backfit l

rule. Amendment of this section also provides for management control and accountability for backfits by requiring that staff evaluations be reviewed by

< the Executive Director for Operations or his designees prior to the issuance of the request.

The amendment of 5 50.54(f) should be read as indicating a strong concern on the part of the Comission that extensive information requests be carefully scrutinized by staff management prior to initiating such requests. The Commission recognizes that there may be instances where it is not clear whether a backfit will follow an information request. Those cases should be

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resolved in favor of analysis. In short, staff management should develop an internal review process to ensure that there is a rational basis for all infonnation requests, even where it is not clear that a backfit will result.

Section 50.109(a) sets out the definition of backfitting, the analysis requirement, the standard to be used in determining whether a backfit should ,

be imposed and the exceptions to the rule. The definition focuses on modifications to systems, structures, components, designs, procedures or organization which may be caused by new or modified Ccmmission rules or orders or staff interpretations of Comission rules or orders. M Thus, this definition includes both cause and effect of backfitting. It may also be noted that "cause" includes not only Comission rules and orders, but staff interpretations of those rules and orders. This is not to say that staff

-1/ The term " regulations" is not in the text because that term is synonymous with " rule."

1 interpretations of rules are viewed by the Commission as being legal require-ments. Clearly, they are not. Nevertheless, staff interpretations of broadly stated rules are often necessary to give a rule effect and in some instances may be a causal factor in initiating a backfit.

i Section 50.109(a)(2) requires a systematic and documented analysis as a

- condition precedent to the imposition of a backfit. This will ensure that the j safety significance of any modification and its relation to other relevant factors is well understood before changes are required.

The standard agains which proposed backfits would be measured is stated in 650.109(a)(3) as " substantial increase in the overall protection of the public health and safety or the common defense and security." Substan-tial means "important or significant in a large amount, extent, or degree."

Under such a standard, the Commission would not ordinarily expect that safety improvements would be required as backfits which result in an insignificant or ,

small benefit to public health and safety or the common defense and security, regardless of the implementation costs. On the other hand, the standard is

^

not intended to be interpreted in a manner that would result in disapprovals of worthwhile safety or security improvements having costs that are justified in view of the increased protection that would be provided.

The phrase "overall protection of the public health and safety or the common defense and security" in the proposed backfit standard also deserves some discussion. The principal purpose of requiring consideration of the overall protection that would be provided by a proposed backfit is to. ensure that both

. =- ._ --. . - . -- . . - - - - - - _ --. -.

its negative and positive effects are taken into account in deciding whether

$ the backfit is justified. A backfit for a part of a plant should be evaluated I

in light of the net increase in overall protection that the entire plant would provide as a result of the backfit, taking into account the effects it would have on other aspects of the plant. Thus, the net benefit of a backfit to the protection provided by the plant as a whole is the overriding consideration, not just the benefit to the part of the plant being backfitted.

However, the Commission does not intend use of the phrase "overall protection" in the backfit standard to signal a departure from its traditional reliance on defense in depth and diversity for protection of public health and safety.

Therefore, safety improvements in one line of defense against undue risk should not be disapproved or approved based solely on the presence or absence of another line of defense to cope with the failure of the first.

For example, safety improvements in the integrity of the reactor coolant system should not be dismissed merely because an emergency core ,

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cooling system has been provided to protect public health and safety with high confidence in the event that the integrity of the reactor coolant system is lost. On the other hand, such a suggested improvement may be precluded because it does not meet the substantial test, or does not increase overall protection provided by the plant due to, for example, the negative impacts on other aspects of the. plant. The proposed require-ment that the costs of backfits be considered ~and justified in view of

.the increased protection to public health and safety or security is based on the Commission's view that it should, in these circumstances, consider

the direct and indirect costs of implementation in making safety decisions under the Atomic Energy Act.

The consideration and weighing of costs contemplated by the rule applies to backfits that are intended to result in incremental safety improvements for a plant that already provides an acceptable level of protection. In this area the Commission believes that direct and indirect-implementation costs are especially relevant. Without cost as a competing consideration in these circumstances, the regulatory process takes on the characteristics of a quest for a risk-free plant, an unattainable objective as recognized by Congress in establishing the standard of no undue risk in the' Atomic Energy Act.

Section 50.109(a)(4) creates exceptions for modifications necessary to bring a facility into compliance or to ensure through immediately effective regulatory action that a licensee meets a standard of no undue risk to public health and safety. In cases involving the compliance exception, backfit analysis is not ,

required and the standard does not apply. The compliance exception is intended to address situations in which the licensee has failed to meet known and established standards of the Commission because' of omission or mistake of fact. It should be noted that new or modified interpretations of what constitutes compliance would not fall within the exception and would require a backfit analysis and application of the standard.

The exception for immediately effective regulatory actions that are necessary to ensure that a licensee meets the standard of no undue risk to the public health and safety exception permits the Commission to act in emergency l

a T

situations to ensure that operation of the backfit rule will not preclude the ,

Commission from ensuring that minimum standards are met to protect public health and safety. The exception anticipates the existence of significant new information or the occurrence of an event which clearly demonstrates that the standard of no undue risk to the public health and safety cannot be maintained ,

without the designated modification. Moreover, the presumption of safety which ordinarily accompanies the issuance of any license must be overcome in order for the exception to be used. As with the compliance exception, ther~e is no intent on the part of the Commission to include within the scope of the exception new or modified interpretations of what constitutes no undue risk to thepublichealtha$dsafety. In such a case, ths rule applies. The rule _

also provides that a backfit imposed by immediately effective regulatory action shall not relieve the Commission of performing an analysis after the fact to document the safety significance and appropriateness of the action taken.

For those modifications which are to ensure that the facility poses no undue risk to the public health and safety and which are not deemed to require inmediately effective regulatory action, analyses are required; these analyses, however, should not involve cost considerations except only insofar as cost contributes to selecting the solution among various acceptable alternatives to ensuring no undue risk to public health and safety.

To ensure that the discipline is maintained in the process and that the exceptions do not become the rule, the Commission directs the staff to document each exception. Documentation shall include a precise statement of l

the specific objectives of and reasons for the modification and the basis for the exception. It may also serve useful regulatory purposes to include such

. matters as a general description of the activity that would be required by the licensees or applicants in order to complete the modification and the identification by type, design and vintage of the design approvals, manu-facturing licenses for production or utilization facilities to which the modification would apply.

Section 50.109(b) " grandfathers" backfits imposed prior to the effective date of this rule.

Section 50.109(c) sets out nine factors to be used by the staff in its backfit analysis. Finally, 5 50.109(d) explicitly recognizes the responsibility of the Executive Director for Operations to manage the Commission's backfitting program in general and requires approval of backfit analyses by the Executive Director for Operations or his or her designee.

As a matter of information, it may be noted that the nine factors in 650.109(c) have precedent in existing NRC practices as seen in the Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission, NUREG/BR-0058,

the approved CRGR Charter and the Commission's approved plan for the l management of plant-specific backfitting, SECY-83-321. 2/

The nine factors to be used by the Staff for a systematic and documented analysis are listed under 50.109(c) and read as follows: "(1) statement of the specific objectives that the proposed backfit is designed to achieve; (2) general description of the activity that would be required by the licensee or applicant in crder to complete the backfit; (3) potential change in risk to the public from the accidental offsite release of radioactive materials; (4) potential impact on radiological exposure of facility employees; (5) installation and continuing costs associated with backfit, including the cost of facility down time for the cost of construction delay; (6) the potential safety impact of changes in plant or operational complexity in-cluding the effect on other proposed and existing regulatory requirements; (7) the estimated resource burden on the NRC associated with the proposed backfit, and the availability of such resources; (8) the potential impact of differences in facility type, design or age on the relevancy and practicality of the proposed backfit; (9) whether the proposed backfit is interim or final and, if interim, the justification for imposing the proposed backfit on an

-2/ The Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Comission, NUREG/BR-0058, is available for inspection or copying for a fee in the NRC Public Document Room.1717 H Street, NW., Washington, D.C.

This report may be purchased from the U.S. Government Printing Office (GPO) by_ calling 202-275-2060 or by writing the GPO, P.O. Box 37082, Washington, DC 20013-7082. It may also be purchased from the National Technical Information Service, U.S. Department of Comerce, 5285 Port Royal Road, Springfield, VA 22161.

o o

interim basis. These nine factors are to be used as balancing mechanisms in the decisionmaking process for backfitting.

During internal review of the rule, a question was raised as to whether licensing action should be withheld during backfit review. The answer is that the rule never contemplated such a withholding. To the contrary, until a backfit analysis is complete, licensing action should continue along a course consistent with normal practice. For clarification of the point, 950.109(d) was added to the final rule.

Section 50.109(e) emphasizes and codifies the Connission's intent that backfit management is of paramount importance to responsible regulatory practice.

Accordingly, the Executive Director for Operations is responsible for implementation of the backfit rule.

It may be noted that the resolution of any backfit case can be by Commission rule or order, or by written commitment of a licensee. Recognition of this point completes the design of the backfit management process and establishes that licensee compliance with approved backfits may be accomplished by voluntary commitment, but that the legal instrument of a rule or order can and will be used if necessary.

The proposal to amend 10 CFR Part 50, Appendix 0 is necessary to conform Appendix 0 to the final rule. The amendment provides that information l requests to the approval holder regarding an approved design shall be evaluated prior to issuance to ensure that the burden to be imposed on

respondents is justified in view of the potential safety significance of the issue to be addressed in the requested information. Each such evaluation performed by the NRC staff shall be in accordance with 10 CFR 9 50.54(f) and shall be approved by the Executive Director for Operations or his designees prior to issuance of the request.

Section 2.204 is amended to ensure that any order for modification of a license involving a backfit is subject to the provisions of the new 550.109.

Commissioner Asselstine and Commissioner Bernthal disapprove this final rule.

The separate views and comments of Commissioners follow.

] ,

Separate Statement of Chairman Palladino 1

t i During my tenure as Chairman, I have sought a new system of backfit controls for NRC that would ensure that a backfit is analyzed and that an explicit ,

i

! judgment of its safety and cost consequences is made. This new rule does just I that.

f Although a previous version of an NRC backfit rule has been on the books, it has rarely been followed. In addition, documentation in too many cases has l been. non-existent or inadequate to identify and justify the safety and cost consequences of past NRC-imposed backfits.

l The steps to this new backfit rule have been deliberate and, I believe, l thorough. In 1983 we issued a policy statement announcing interim backfit l

l

t controls and our intent to conduct rulemaking to establish a new backfit rule.

48 F.R. 44173 (1983). At the same time, we published an advanced notice of rulemaking soliciting public comments on various proposals for the long-term management of the backfitting process, both plant-specific and generic. 48 F.R. 44217 (1983). In November 1984, we published a notice of proposed rulemaking, seeking public comment on an NRC proposal and on a number of specific questions designed to elicit public views on significant issues and alternatives. The Cannission held a number of public meetings on backfitting, and received the advice of the Regulatory Reform Task Force and senior agency officials.

The rule that emerged is a good one. Contrary to the claim of Commissioner Asselstine, the rule is not designed to stymie regulation. What the rule requires is an analysis and an explicit judgement that a proposed safety requirement is justified. A Commission concerned about the protection of public health and safety -- which this Commission is, Commissioner ,

Asselstine's comments notwithstanding -- will find ample freedom to make sound safety decisions based on analysis. Further, the rule provides that its requirements do not apply if a proposed safety measure is needed to assure compliance with NRC requirements or protection against imminent public risk.

It seems somewhat late in the day for a Commissioner now to argue for the first time that this backfit rulemaking, which we initiated almost two years ago, is unnecessary. To my knowledge, when we started, all Commissioners l

agreed that our experience under the existing NRC backfit rule had not been

! satisfactory and that backfit controls of some sort were needed. The decision l

to incorporate controls into a rule will mean that the Commission can be held accountable in the future for how it implements those controls. Further, the decision to adopt a rule also means that modifications of the controls will

. involve public participation.

4 Similarly unfounded is Commissioner Asselstine's criticism of the backfit standard in this rule. The Commission gave considerable attention to the standard during the rulemaking and adopted the following explanation of

" substantial increase" in protection of health and safety:

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Substantial means "important or significant 1n a large amount, extent, or degree." Under such a standard, the Commission would not ordinarily expect that safety improvements would be required as backfits which result in an insignificant or small benefit to public health and safety or the common defense and security, regardless of the implementation costs. On the other hand, the standard is not intended to be interpreted ,

in a manner that would result in disapprovals of worthwhile safety or security improvements having costs that are justified in view of the increased protection that would be provided.

I do not believe that this standard can reasonably be criticized as " intended to block new safety requirements."

Commissioner Asselstine simply ignores the words of the rule when he contends that it requires a backfit analysis that is skewed against new safety

.equirements. Section 50.109(c) provides that "any ... information relevant

'I and material to the proposed backfit" may be considered in the analysis and, '

thus, taken into account in the safety decision. This language provides, in i my judgement, ample room for Comission reliance on, among other things, the expertise of its staff to supplement other analytical tools in order to provide an adequate basis for a particular backfit decision.

In response to Commissioner Bernthal's statement, I am disappointed that we

! could not agree on how to apply backfit controls to future rulemakings. I believe that our differences are really very small.

Modifications to plants or plant procedures can result from new or modified NRC requirements adopted by rulemaking. Therefore, future rulemakings should be covered in principle by backfit controls. The alternative would be a system where plant specific backfits are analyzed and documented but generic rule backfits are riot. Such an alternative would leave a significant area of

! backfitting formally uncontrolled without apparent reason. ,

i i

Moreover, I believe that the Commission would be creating questions without apparent answers if it chose to control plant specific backfits by a backfit i rule and generic rule backfits by internal agency management and guidance. By 4

subordinating generic rule backfits to internal agency management for the l

stated reason of preserving " flexibility", the Comission could be seen as sending the message that it does not wish to'be held accountable for the '

application of backfitting controls to future rulemakings. This outcome could well serve to undermine the agency's efforts to manage backfitting.

l I -

Application of the backfit rule will not result in the Comission making unsound safety or backfit decisions in future rulemakings. The main thrust of the backfit rule is to apply analysis, including analysis of costs, before a backfit is imposed. The rule only requires analysis of "such ... factors as may be appropriate ..." The decisional standard is only that the costs of the backfit be " justified in view of the protection to public health and safety afforded by the backfit." Further, as noted earlier, the rule provides that its requirements do not apply if a proposed safety measure is needed to assure compliance with NRC requirements or protection against iminent public risk. Thus, the backfit rule provides. sufficient flexibility for the Comission in future rulemakings.

Finally, the Commission can suspend the backfit rule in a future rulemaking if there is good reason. Thus, while it is our intent that this rule apply to backfitting that arises from future rulemaking, the final judgement on this issue will rest with the Commission. If it believes that there is good cause, the Comission could state, in the notice of proposed rulemaking for a future rule, that it was proposing not to apply some or all of the provisions of this

- backfit rule and request public concent on the underlying reasons. If, after considering public coments, the Comission finds good cause, it can so state in the notice of final rulemaking.

I concur in the views of Comissioners Roberts and Zech.

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l Coments of Commissioner Roberts and Comissioner Zech Safety is paramount to the execution of our mission. We believe that the backfit rule is entirely compatible with and supportive of this principle.

Unmanaged, uncoordinated and inadequately analyzed backfits, on the other hand, are not. There is nothing in the backfit rule which would stand in the way of a Commission action which is needed to protect the public health and safety or in the way of the adoption of policy changes which a majority of the Comission believes are warranted in the circumstances.

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We believe that in the execution of our mission to provide reasonable assurance that the public health and safety are protected, we must have in place criteria and a system for the timely application of justified changes in regulatory requirements. The so-called backfitting regulation which has been in place for many years has not completely satisfied this need. Although it established a broad standard, it did not also provide for a system to assure that backfitting decisionmaking to apply the standard is done in a disciplined, systematic manner. The regulatory system needs a backfitting rule which is complementary to our overall regulatory mission and which is practical to implement. Our chief reason for voting to adopt this backfit rula is that it provides for a disciplined and formalized review of regulatory requirements to assure that there is a rational basis for modifications to a nuclear power plant. The rule, along with its explanatory statement, also provides guidance and direction to the staff regarding backfit management and control. This disciplined approach to backfitting will, in our judgement.

improve the overall effectiveness and certainty in the regulatory process, thus enhancing our regulatory mission.

Discipline and management of backfitting do not mean that safety actions which are justified will be obstructed, or that the Commission will not continue to have the discretion to adopt policies and rules which it believes will serve to enhance the protection of the public health and safety. Instead, they mean that attention and priorities will be focused on areas where action is justified to carry out our regulatory responsibilities. Inadequately managed and controlled backfitting, on the other hand, provide no assurance that modifications, indi$1 dually and collectively, are-in the best overall interest of protecting the public health and safety.

We have carefully considered the views of our dissenting colleagues, and although we respect them, we see the matter quite differently. As we have noted, we believe that this backfitting rule serves a vital regulatory need.

We see no reason why the important subject of rulemaking which may involve generic backf.itting should be excluded from coverage. It is true, as one_of our colleagues points out, that rulemaking is subject to the procedures in the Administrative Procedure Act. It is also correct that we have in place a Committee to Review Generic Requirements (CRGR) and have informal practices which, in their totality may, in an individual case, serve the purpose of the rule if everything falls into place properly in a rulemaking proceeding. The chance of this happening, however, is not to us an acceptable Substitute for the system which is being put in place as a matter of overall Commission i

policy in the backfitting rule. And even assuming that, under its present

I charter and under its incumbent chairman, the CRGR did cover all of the l elements of the backfitting rule, this is not the equivalent of published  ;

Comission policy which states the applicable criteria and procedures. The policy and system which are set forth in the backfit rule provide a much sounder foundation for Comission control over future rulemaking requirements than relying exclusively on existing procedures.

We believe that the procedural requirements of the Administrative Procedure Act and the functions of the CRGR are compatible with the objectives of the backfit rule. However, we also believe that application of the rule to

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rulemaking is necessary to assure consistent appitcation of the backfitting

policy under a prescribed uniform system, regardless of whether a proposed change is generic or plant specific.

The APA does not provide such a system, but does, of course, provide for the important procedural requirement of assuring that there is adequate public notice and opportunity to coment. This does not provide the assurance needed that the substantive matters covered in the backfit rule will be considered either by the staff or the Comission in the Comission's rulemaking decision.

There is no requirement for anyone to participate in a rulemaking proceeding, and even for'those-who choose to participate, there is no provision to assure that there will be systematic and comprehensive coverage of backfitting issues. Indeed, it appears unusual for either the staff's recomendation to the Comission or for the final rulemaking decision to address in any detail, if at all, the application of new requirements to existing licenses and applications. A rulemaking proceeding which meets all of the procedural

requirements of the APA would not necessarily assure that the subject matter in the backfit rule is indeed covered. This is not surprising because the objectives of the APA and the backfit rule are, as noted, fundamentally different. Furthermore, we are not able to distinguish, for purposes of the objectives of this backfitting rule, between backfitting modifications which are imposed by individuals in specific plant-by-plant situations and modifications which are imposed by a change in a regulation in a rulemaking proceeding. In each instance a disciplined system should be followed to assure that the backfit is fully understood and justified in terms of its safety relationship and its related costs.

If the backfitting policy and system are sound and are needed, as we believe they are, the straightforward way to go about dealing with the backfit problem is to publish a Commission policy. This is what the backfitting rule does.

We do not share the concern of our dissenting colleague regarding the litigative risks because rulemaking is covered. We are informed that that risk should be minimal. But regardless of whether it is or it isn't, if the rule is neeoed, if it makes sense, and if it is a responsible regulatory action on our part, we should be prepared to defend our decisions in its application.

In summary, vna support fully the backfit rule, including its coverage of rulemaking. The rule will bring discipline and accountability to the imposition of plant modifications by the Commission by establishing criteria and a system for rational decisionmaking. Without any question, we believe

44 _

this approach will enhance the quality of our mission to assure that the public health and safety are protected in our licensing and regulatory requirements decisions.

Separate Views of Comissioner Asselstine In adopting this backfitting rule, the Comission continues its inexorable march down the path toward non-regulation of the nuclear industry.

In two previous decisions the Comission found acceptable the present level of risk of a severe accident at the most highly populated site for an operating nuclearplantinthiscountry. See, Consolidated-Edison Company of New York (Indian Point, Unit No. 2), CLI 85-6, 21 NRC 1043 (1985). The Comission's decision was made without an adequate explanation or rationale; it was made without an adequate analysis of the issues;.and it was made by ignoring the enormous uncertainties in our methods for estimating risks. The Comission then extended that decision to all nuclear plants through its Severe Accident Policy Statement. See, " Policy Statement on Severe Reactor Accidents Regarding Future Designs and Existing Plants," 50 Fed. RS . 32138 (August 8,1985). This backfitting rule is 'another part of the Comission's withdrawal from active regulation of the industry.

The Comission's rule in effect says that nuclear reactor risks are so acceptable and so well understood that the burden of proof for lowering the risk to the public must be placed on the proponent of improved safety even if that proponent is the Commission itself. This optimistic view of the risks posed by nuclear power plants is unjustified. 'The Comission's adoption of

this rule is truly an unprecedented step in the annals of regulation. I can think of no other instance in which a regulatory agency has been so eager to stymie its own ability to carry out its responsibilities. Indeed, the adoption of this rule is the most compelling evidence to date of the Commission majority's open hostility to the regulatory mission of this agency.

I do not believe that there is a need for a formal Commission regulation

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restricting the Commission's ability to require safety improvements for nuclear power reactors. My opinion is shared'by our reactor safety technical

i. staff, including the Commission's chief safety officer. The Commission's purported reason foi promulgating this rule is to add " discipline" to the backfitting process. The Commission can add discipline to the backfitting process without at the same time unnecessarily limiting its own discretion to

. impose new safety requirements by fettering itself with this rule. Further, by adding layer upon layer of procedures to the backfitting process the

! Commission has created a lawyer's paradise in which litigation over procedural irregularities may hamper the Commission's ability to impose needed safety' l requirements.

I Even if I felt that a backfit rule were appropriate, I would not support a rule as poorly thought out as is this one. This rule sets a threshold

standard for improvements to safety which is much too high given our present understanding of risk and the uncertainties associated with our methods of f estimating risk. .Further, the factors to be considered in determining whether I i

! a backfit should be imposed are skewed against imposing new requirements. In

l

-l addition, the Comission's determination of risk in the cost-benefit balance is to be based on unreliable risk analyses.

The consequence of this rule is to limit the NRC staff's and even the Comission's ability to identify and correct safety weaknesses at the nuclear power plants in operation and under construction in this country. As a result, these weakresses are likely to persist until they cause serious operating events or accidents which pose a direct threat to the health and safety of the public. This rule, then, further ensures a continuation of the piecemeal, reactive approach to safety which has been responsible for many of

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the failures of the past. By this step, the Com tssion is moving in the wrong direction -- a direction that will likely result in further serious operating events, more accidents, and a lower level of safety than that achieved in many more forward-thinking countries in the world. I discuss each of my reasons for opposing this rule in more detail below.

The Nature of the Backfitting Problem When asked to describe the backfitting problem, most of our licensees point to the substantial number of hardware modifications, procedural changes and human factors improvements which have been required by the NRC in recent years. The bulk of these new requirements can be traced to three sources:

the Comission's fire protection rule; its rule requiring the environmental qualification of electrical equipment; and the Comission's response to the Three Mile Island accident. It is worth noting that each of these broad safety initiatives was adopted by the Comission itself in response to the

_ 47 -

t l identification of significant areas of safety vulnerability within the industry.

Typically, the industry does not challenge the need for improvements in fire protection or the need to assure that safety-related electrical equipment

will be able to function under serious accident conditions. Nor does the industry deny the need to address the numerous safety weaknesses brought to 4- light by the Three Mile Island accident. Rather, the industry largely focuses its criticisms on the process used to translate those broad areas of needed

, improvement into specific modifications to plant hardware, procedures and operations.

The industry raises five specific complaints. First, our licensees argue

that new requirements often fail to define clearly what is expected of the industry. Second, they contend that the implementation of these requirements

-- the process by which more general directives are translated into specific

. modifications -- is not well managed. In support of this argument, the industry points to some past failures in documenting proposed modifications, in ensuring consistency-in making plant-specific implementation decisions, in i

providing effective management oversight of plant-specific decisions, and in providing a fair opportunity to appeal objectionable staf f-proposed i

modifications. Third, our licensees assert that specific plant modifications are proposed by staff members who have a single narrow area of interest, and little consideration is given to the overall safety impact of.the proposed change. Fourth, the industry argues that the staff's implementation process all too often fails to provide a final decision from the staff on the adequacy

of the licensee's efforts to comply with a requirement until after the licensee has made the modification to its plant. This process, they contend, exposes the industry to second-guessing by the NRC staff and sometimes leads to making repeated modifications to address the same problem. Finally, the licensees argue that the Commission sometimes adopts arbitrary and unrealistic deadlines for the implementation of new requirements. More than anything

! else, these complaints focus on the management of the backfitting process.

In the literally thousands of backfitting decisions made by the NRC over the-past several years I am sure that some examples can be found to support each of these complaints. However, I believe that each of the industry's valid concerns is addressed by the administrative backfitting management improvements already adopted by the Commission.

Why A Rule?

The Comission claims that this rule is necessary to provide a " man-agement process" for the adoption of Comission regulations and staff interpretations of those regulations. Implicit in the Comission's expla-nation of this rule is a feeling on the part of the Comission that it is necessary to add discipline to the backfitting process. The Comission never clearly explains why if added discipline is necessary they must embed that discipline or management process in a formal agency rule. The Comission also refuses to explain the connection between discipline and the necessity for a substantial threshold that must be sunnounted before safety can be improved.

Further, the Comission never adequately explains why it cannot accomplish 1

l l

improved management of the backfitting process without at the same time limiting its own discretion to require safety improvements by requiring that Commission rules comply not only with the Administrative Procedure Act, but also with this rule.

By choosing to adopt this rule the Commission admits failure. The Commission admits that it has been incapable of solving administrative 1y whatever problems it sees with the management of the backfitting process. By adopting this rule, the Commission says to the world that it so mistrusts its own ability to act in a sensible manner and it so mistrusts its ability to control the NRC stahf that it must have a formal rule which limits the Commission's discretion and which can be used as a bludgeon to control the staff.

The irony of this all is that the administrative actions taken by the Commission to formalize the backfitting process have already been successful ..

in adding discipline to the process and in addressing the valid concerns of the industry. A senior official of one of the utilities involved most actively in the backfit debate recently told me that when his company first expressed its concerns about backfitting all it wanted was to get NRC management to pay attention to backfitting problems. The company simply wanted a brief written statement for each proposed backfit describing the proposed change and the NRC staff's reasons for requiring the change, together with the right to appeal to upper NRC management the decisions being made at the lower levels of the NRC staff. Their objective, this official said, is

l 1

l already being achieved by the Commission's internal management directions to l the NRC staff.

Whatever "backfitting problem" exists is really a management problem.

The Commission's statement of considerations acknowledges that. And, the

, problem is being corrected independently of this rule. Why then must this rule be promulgated without delay? Apparently it is because the movement to put in place a backfit rule is much like an avalanche -- once it starts rolling it cannot be slowed down or changed in course.

Lawyer's Paradise -

By embedding the Commission's backfit management process in the form of a rule, the Commission has chosen to formalize a process which ought to be a purely internal management tool. In doing so, the Commission has imposed upon

itself a particular management process as a legal requirement which cannot be i ignored, adapted to circumstances, or changed without once again going through formal rulemaking procedures. The rule provides a myriad of opportunities for licensees to invoke procedural irregularities in challenging the Commission's rules and its backfitting decisions. The rule lends itself readily to being used as a delaying tactic by uncooperative licensees, and it has the potential

. for hamstringing the Commission's ability to impose needed safety improvements while the legal wrangling goes on and on and on.

The Commission's decision to include Commission rulemaking within the coverage of the backfit rule is an excellent example of the

overproceduralization of the backfit process. The Administrative Procedure

! Act and cases interpreting it set out requirements for rulemaking. Interested parties are given an opportunity to comment on the proposed agency action before it goes into effect. The Comission must then take those comments into account before promulgating a final rule. The courts can then review Commission action and test it for reasonableness and rationality. The Commission wishes to add on to these legal requirements a very high standard or threshold the Commission must meet before it can institute safety improvements.- Further, the rule requires a strict cost-benefit balance,

something the courts have not found is required by the Atomic Energy Act or

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the Administrative Procedure Act. Contrary to Chairman Palladino's assertion, the Commission cannot decide whether to follow these new, more stringent

} requirements in individual rulemaking proceedings on a case-by-case basis.

i This regulation now becomes binding on the Comission, and must be followed in all future rulemakings.

i j In addition to this, the backfit rule applies to staff interpretations of Comission rules.. By the rule's literal terms, any staff interpretation of a Comission rule would also have to meet the requirements of the backfit rule.

4 Thus, the Comission would be required to meet a high threshold and perform a cost-benefit balance for any rule it issues, and the staff would then have to again meet the same high threshold and perform a new cost-benefit balance before it could interpret that rule. That.is absurd, but that is what the rule appears to require.

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Even if rulemaking were not to be included within the scope of this rule, staff interpretations of Commission rules would be. This presents an interesting dilemma. The Commission's 1985 Policy and Planning Guidance states

"The Commission intends to shift its regulatory emphasis away from detailed, prescriptive requirements toward performance criteria." See,

.NUREG-0885 Issue 4, "U.S. Nuclear Regulatory Commission Policy and Planning i Guidance 1985." This means that new rules will tend to be general in nature.

It is difficult for safety reviewers and inspectors to review and inspect generalities. They need to develop positions on acceptance criteria, hardware requirements, applicable quality assurance provisions, technical l '

specifications, etc.I The rule would require that these interpretations meet

the' requirements of the backfit rule. Thus, if rulemakings are outside-the scope of the backfit rule, but interpretations of those rules are not, it may create a situation where the staff cannot adequately interpret the rule because the interpretations would not meet the backfitting requirements, even l though the Commission's rule has been othenvise legally promulgated.

i i If these are the results the Comission intended, then the Commission's

! backfit rule makes no sense whatsoever. If this is not what the Commission i

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intended, then the Commission should make that absolutely clear. Such I

ambiguities do nothing but provide fodder for litigation. These problems

! illustrate further how poorly written-and how poorly explained is this rule.

These are the kinds of issues one should not have to make guesses about.

l It is interesting to note that my colleagues constantly complain about i the length and over-legalization of the licensing process, often arguing that

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1 there are too many procedures and that the process is too formal. Yet, those same Comissioners who want to make the licensing process as simple and informal as possible have here added layer upon layer of procedures to the l backfitting process. In fact, they have added procedures far beyond those I which are legally required, and in the process have added new opportunities for litigation, i

Barrier to Improved Safety f The Commission's rule sets up a threshold standard that the Comission must meet before it can adopt new safety requirements. Under this rule, the j Comission cannot reduce the radiological risks to the public unless it first determines that a proposed safety improvement provides a " substantial increase in the overall protection of the public health and safety or the common defense and security." Section50.109(a)(3). Thus, the Comission creates a significant barrier to reactor safety improvements.

i The Comission's explanation in the statement of considerations of what 1

it means by " substantial increase" is so unclear as to be useless. However, an indication of what the Comission really intends can be found in the Commission's recent Indian Point decision. 21 NRC 1043. In that proceeding, j the Commission's technical staff and Licensing Board urged the Comission to require a set of safety in:provements for the reactors sited at the most highly i

populated locations in this country. Upon learning that those improvements j only cut the risks to the public in half, the Comission rejected them as.not providing a " substantial" increase in protection. -21 NRC 1043.

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I would prefer a standard which does not set such a high threshold for the imposition of safety improvements. In fact, I proposed such a standard.

Under my proposed standard the Agency would require improved safety upon a determination that a proposed measure provides a net increase in the protection of the public health and safety and that the costs of this improvement are not incommensurate with the increased protection. This standard would allow more improvements in safety than would the Comission's standard b'ut would still exclude proposed changes which would result _in only

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I trivial safety improvements. The Comission rejected this standard because it does not present a high enough barrier to block new safety requirements.

Apparently, the Comission is interested in more than simply bringing discipline to the backfitting process. Rather, it is really interested in tying its own and the staff's hands to restrict the number of safety improvements. If the Comission really only wanted discipline and sound thinking to be brought to the backfitting process, it would not feel the need to propose such a stringent threshold for safety improvements, d

Tipping the Scale Against Safety The rule specifies nine factors that "are to be used as balancing mechanisms in the decisionmaking process for backfitting". See, Section 50.109(c) for list of factors. If one cuts through the extraneous matter in that section of the rule, one finds that the Comission requires cost-benefit analyses to be performed on all proposals for backfits. Of course, in cost-benefit analyses the bottom.line depends on what factors one chooses to put on the scale.

Not satisfied that a high threshold standard will sufficiently limit the number of backfits, the Commission has also decided to stack the cost-benefit balance. The only benefit the Commission is able to identify as being-appropriately considered in decisions.on whether safety should be improved is the " potential change in the risk to the public from the accidental off-site release of radioactive material." Section50.109(c)(3). Risk is typically defined as the probability of an accident multiplied by the consequences, with the latter expressed as the collective dose to the public (person-rem).

However, even here the Agency's typical practice is to ignore societal doses beyond a 50 mile radius. As calculations of accident consequences indicate,

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this procedure captures less than half of the health consequences of core meltdown accidents.

The Commission refuses to include among the " balancing factors" the averted costs of off-site property damage resulting from radiological releases. The Commission does not seem to realize that core meltdown accidents can contaminate off-site property to hazardous radiation levels and that there is a real benefit in preventing that from occurring. Averting the necessity to decontaminate such property is a real benefit of backfits which lessen the likelihood of off-site releases of radioactive materials. Since these costs in some instances substantially exceed the monetized value of averted health effects resulting from accidents, the Commission has no defensible basis for omitting from the " balancing factors" off-site property decontamination costs.

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The Commission also rejects the inclusion of the benefits derived from averting damage to the plant itself. The TMI-2 accident, which apparently did not result in extensive melting of the reactor core or substantial offsite releases of radioactivity, resulted in billions of dollars in plant damage, plant clean-up and power replacement costs. The Commission's rule fails to recognize that preventing such costs has a public benefit. The Commission

$ chooses to ignore averted replacement power costs associated with safety improvements that prevent accidents. However, in order to inflate the costs side of the equation which weighs against backfitting, the rule requires consideration of the replacement power costs for the facility downtime associated with implementing a backfit. -

At the same time the Commission ignores the benefits of backfits, the Commission tries to include every conceivable " cost" of the backfit in the balance. The rule includes costs such as installation and other costs associated with physically changing the plant; the cost of facility downtime, e.g. replacement power costs, etc; the cost of construction delay; and, radiological impact on facility employees. The Commission has even thrown the cost to the NRC (resource burden on the.NRC) into the balance.

Obviously this stacking of the deck against safety improvements indicates once again that the Commission is interested in more than just adding discipline to the backfitting process.

The Commission majority tries to argue that the' balance of costs and benefits is not slanted because other benefits beyond those enumerated in the

rule can be considered. Their own actions contradict this argument. In adopting this rule, the Connission majority expressly rejected proposals to include additional health and safety and economic benefits of proposed backfits that would have resulted in a fair and even-handed consideration of all relevant costs and benefits. Given its own actions, the true intent of the Comission majority is beyond doubt.

i Reliance on Indefensible Analyses The Comission's rule places great reliance on Probabilistic Risk

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Analyses (PRA's). In determining the " change in risk" as reouired by this i

2 rule, the Connission intends to rely on the bottom-line results of PRA's.

l Unfortunately, numbers produced by these analyses amount really to only l estimated guesses; yet, the Comis'sion intends to rely heavily on these numbers, which nearly all PRA practitioners agree are unreliable, in

! determining whether to require improvements in safety. '

Preparation of a PRA requires that the analyst calculate the core meltdown probability. Given a particular core meltdown scenario, the analyst must then calculate the containment failure mode, the quantity of radioactive fission products released from the containment (the " source term"), the dispersion of the fission products in the atmosphere and finally the radiation j doses to the public. The calculated probabilities from all of the above are

multiplied by the aggregate doses to the public. This is the risk to the i

public.

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To calculate the change in risk, as required by this rule, the analyst must first calculate the risk to the public before a proposed safety improvement is implemented, and then calculate the risk assuming the improvement is made. Unfortunately the necessary calculations cannot be made based on data, and scientifically accepted principles and methodologies.

Because of major inadequacies in the data base, because of the vast complexity of nuclear plants, because a tremendous number of assumptions must be made, because all contributors to risk cannot be quantified and because core meltdown phenomena are poorly understood, no one calculation of risk yields a remotely meaningful value of risk. I discussed the meaningless nature of these risk estimate's in more detail in my separate views on the Severe Accident Policy Statement.

Our experience with the Davis Besse plant provides an excellent example of the inadequacies of PRA's for truly predicting risk. It also illustrates the shortcomings of a system which relies heavily on strict cost-benefit balances for making decisions on safety improvements. The Davis Besse plant has one of the most (if not the most) unreliable emergency feedwater systems (EFS) of any nuclear plant in this country. The NRC staff has been trying to require Davis Besse to upgrade its EFS reliability. However, for the last several years, the licensee has been using reliability and cost-benefit analyses to argue that substantial upgrades should not be required. Two independent reliability analyses (one by the utility and one by the NRC staff) were performed on the EFS at Davis Besse. The results of these two studies differed by a factor of 100 in their estimate of the reliability of the systems. The studies also differed on what was the most cost-effective way to y - -- -vm- *r-- -e e--e- - - - y-

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upgrade the system. The utility argued that its cost-benefit analyses showed t

that only some low-cost minor changes were justifiable while the staff argued l l ,

that its cost-benefit analyses supported more significant modifications.

Because the Connission-required cost-benefit analyses could not demonstrate

the necessity of a particular way to upgrade the EFS reliability, the staff

! could not require a substantial upgrade of that system even though the plant continued to operate with an unreliable but crucial safety system during the

several years of the PRA debate between the staff and the utility.

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The Jane 9, 1985 Davis Besse event demonstrated that the PRA analyses were wrong. Davis liesse had a loss of all feedwater that involved the failure of 14 sepirate pieces of equipment. (See, NUREG-1154, " Loss of Main and Auxiliary Feedwater Event-at the Davis-Besse Plant on June 9, 1985"). The event led the Agency's chief safety officer to observe: "I believe that the i recent Davis-Besse event illustrates that, in the real world, system and i component reliabilities can degrade below those we and the industry routinely j assume in estimating core melt frequencies." (See memorandum from Harold R.

1 Denton to William J. Dircks, dated June 27,1985). Further, it appears that the steam and feedwater rupture control system had a significant role in

! causing the loss of emergency feedwater. Yet that system was not even I included as a possible contributor to the unreliability of the emergency feedwater system in either of the independent reliability studies. Despite this clear evidence of the wea'knesses in PRA studies and their potential 'for manipulation and distortion, the Connission persists in using them and in requiring their use by the staff in this rule as the basis for deciding on i safety improveirents.

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Although this rule will have a negative impact on all aspects of the Commission's reactor safety activities, its effects are likely to be greatest in the area of improving human performance. Recent operating experience indicates that roughly half of all-significant operating events can be traced to inadequate human performance in such areas as reactor operations, surveillance testing and maintenance. A number of the Commission's post-TMI requirements have focused on human performance, but recent operating experience demonstrates the need for further improvements in this area.

Indeed, virtually all members of the Commission have advocated further

measures to improve the qualifications, experience and training of plant

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personnel. Specific' ally, members of the Commission have spoken in favor of increasing the engineering knowledge and skills of plant operators and requiring the use of plant-reference simulators for operator training and testing. Common sense and sound engineering judgment tell us that such measures will have a positive effect in improving plant performance. Yet, it will be especially difficult to assess how such proposed requirements will reduce the risk of a core melt accident which might result in harm to the public. Thus, the practical effect of this rule will be to thwart the efforts of the NRC staff to develop new safety requirements in the. area of human.

performance where such requirements could be of the greatest safety benefit.

. Ignoring Uncertainties The Commission also fails to deal with the huge uncertainties associated with the risks of nuclear reactors. The actual risks could be up to 100 times

the value frequently picked by the Commission. One would think that the i

uncertainties about the level of safety achieved at the operating reactors would have a bearing on whether reactor safety should be improved. I proposed that the Comission articulate its expectations on the handling of uncertainties in the backfitting decisionmaking process before allowing this rule to become effective. The Comission rejected my proposal. There is no reference in this rule to uncertainties in reactor risks or to how uncertainties are to be factored into safety decisions. The Comission's silence simply reaffirms its practice of ignoring the enormous uncertainties in nuclear risks when deciding whether'to improve the protection of the public health and safety.

Selective Application of the Rule The Comission's stated manner of applying this rule is also troubling.

First, according to the statement of Considerations, a licensee may request an amendment to its license and the NRC staff is not required to considet whether the amendment represents a " substantial increase in the overall protection of j the public health and safety." However, if the NRC staff wants to amend a l license to establish a more stringent standard, the staff must first demonstrate that the amendment meets that backfitting standard. Thus, the rule stacks the deck in favor of the industry and against the NRC staff.

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l But more troubling is the Comission's apparent intent to apply this backfit rule with its high threshold and cost-benefit analysis only to those new Comission requirements which are intended to improve safety. If one reads the Comission's rule literally, it applies to ay change in Comission

requirements, both a change to make requirements more stringent and one to relax requirements. Further, the Comission states in its statement of l considerations: "(T)here is no intent on the part of the Comission to

! include within the scope of the exceptions (to the rule) new or modified interpretations of what constitutes no undue risk to the public health and safety. In such a case,.the rule applies." All of this seems to indicate l that the backfit rule applies across the board to new Comission regulations and interpretations.

However, the Comission's actions and rhetoric would seem to indicate otherwise. The Consission has been devoting and continues to devote

! considerable agency resources to relaxing the current emergency core cooling regulations and the emergency planning regulations. For example, the staff is.

developing new and relaxed (relative to the current staff position) acceptance criteria for emergency core cooling systems that would effectively allow the licensees to increase the power level of the operating reactors. Likewise, j the Consission assigns resources to work on a rule that would allow less comprehensive evacuation planning. Both activities involve new or modified i interpretations of what constitutes compliance, involve a modified l interpretation of what constitutes "no undue risk," and do not fall within any of the exemptions to the backfit rule. Thus, if one reads the backfit rule j literally, thc Commission must determine that increasing the power level of reactors and diminishing the level of emergency preparedness result in a i " substantial increase in the overall protection of the public health and safety or comon defense and security." It would take quite a bit of convoluted argument to find that relaxing safety standards meets the rule's 2

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substantial increase requirement. One can only conclude that either the Commission is wasting resources on these activities or that it does not intend to apply the backfit rule to actions which relax existing safety standards.

J This problem of interpretation is another example of how poorly thought out and how poorly written is this rule. The Commission should make clear exactly what is the scope of this rule, and should revise the rule accordingly. Otherwise, this apparent ambiguity once again produces nothing but fuel for litigation.

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Conclusion I might be as sanguine as is the Commission about the current state of reactor safety, and I might be willing to restrict the Commission's ability to reouire safety improvements if. there were a clear understanding of the level i of safety already achieved at plants and if that understanding demonstrated

, that the potential for severe accidents is indeed very remote. Unfortunately, the Commission does not have a clear understanding of the level of safety of current reactors.

The Commission does not know where we are on the learning curve for reactor performance, and there is a distinct possibility of one or more severe accidents in the foreseeable future. Operating experience indicates that a total loss of a safety system.is not a rare event, that multiple independent failures do occur, that there are component and reliability problems, that operating practices are frequently deficient, and that there are a wide range t

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of adverse systems interactions. The Commission is reluctant to face these i

4 facts and to demand improved safety because that might suggest to the public that the existing reactors are unsafe and might hinder the further development of the nuclear industry.

In my view, another severe accident may well bring to a halt further development of the nuclear industry and, if people are injured, may jeopardize continued operation of existing reactors. The Commission has said there is about a 50-50 chance of another severe accident in the next twenty years. The-Commission finds that risk so acceptable that it can now, through this rule, put roadblocks in the way of further safety improvements. I find the Commission's actions to be not only unwise but harmful to the public interest and potentially hazardous to the public health and safety. '

The Commission will next turn its attention to the forth and final action that will complete the framework for deciding whether the NRC and the industry will pursue safety issues before accidents occur, i.e. the Safety Goal Policy Statement. That will the the final opportunity to come to grips with the pivotal issues the Commission has steadfastly avoided over the last several years. As I wrote in my separate' views on the Severe Accident Policy Statement, it is encouraging that there appears to be an emerging consensus within the NRC senior technical staff and within the ACRS in favor of safety improvements to reduce severe accident risks. However, it is dismaying that the Commission, having lost all sight of the broadest lessons learned from the TMI-2 accident, has chosen to hinder enhancing the protection of the public health and safety through this backfit rule.

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Views of Commissioner Bernthal I had fully expected to support the Commission's final rule on backfitting.

Unfortunately, an eleventh-hour decision by the majority has added a destructive provision that at best can only confuse the public and our licensees by its misrepresentation of the role and options of the Connission in rulemaking; at worst it contains the seeds for rulemaking chaos, with 4

litigative risks, unpredictability, and lengthened timetables that will result in more, rather than less uncertainty in the Commission's entire licensing and regulatory process." Such a backfitting rule is surely not in the public l interest or in the interest of our licensees.

In a word, my principal quarrel with the rule adopted by the Commission is its inclusion of rulemaking in the definition of backfitting. Indeed, the mere i

e idea of imposing its own rule on the statutory procedures for rulemaking as ,

set forth in the Administrative Procedures Act should have given the Commission majority long pause, to say the least.

But in its apparent desire to appear to have voluntarily circumscribed its own authority and flexibility for rulemaking (when it cannot, of course, ultimately do so), the Commission has instead chosen to run the risk of creating new, legally binding requirements for rulemaking, requirements which will only widen the target for anyone seeking to challenge a final rule.

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It is not even clear just who.it is the Commission believes will be served by this action. Far from lending discipline and order to the rulemaking process, what the Commission majority has done will help insure that our often long and tortured consideration of rules will become even longer, more tortured, and more confusing. More ominously, should a future Commission find common-sense public health and safety measures unduly confused and obstructed by the backfit rule, it may in frustration choose simply to begin issuing by order

" rules"Lthat today would be subjected to the careful, disciplined process set forth in the Administrative Procedures Act.

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The only rationale the majority has offered for wanting to include rulemaking under the backfit rule is to " discipline" the Commission (i.e., to protect the Commission from itself). If the Commission is incapable.of disciplining itself in the rulemaking process as it stands (what with the existing Canmittee to Review Generic Requirements and the Commission's incontestable authority and ineluctable responsibility to instruct the staff), then I doubt that rule laid upon rule will do much to teach the Commission the virtue of self-discipline.

More specifically, the Commission majority presumably knows that the backfit threshold criteria applied to rulemaking would apply not just on a plant-specific basis (which it should be recalled was the intent of the original backfitting initiative), but to generic decisions that may affect dozens of plants, and in fact to rulemaking on all but procedural matters, rulemaking that may or may not have the remotest connection to what the public and our licensees normally consider a plant "backfit". The scope of  !

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Commission rulemaking responsibilities thus often involves broad public policy considerations, and those considerations can rise above elements as simple as cost-benefit analysis to reach issues as fundamental as fairness and individual rights. The Commission's backfit rule, if applied to rulemaking itself, will thus serve only to trivialize in appearance and confuse in

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practice the many factors to be weighed in rulemaking.

As one small example of the morass into which the Commission majority has wandered, consider (as the Commission currently is considering) whether there should be a requirement that radiation workers be provided their dose records

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annually. The " benefit" of this "backfit" of Commission rules may seem clear, but it might very well never pass the cost-benefit test. Indeed, it is difficult to imagine a rule that would involve the human-factors element of plant operations, and that would also be amenable to straightforward cost-benefit analysis.

Rulemaking as it exists involves numerous inherent procedural checks and balances to insure that each proposal is carefully considered prior to adoption. Indeed, rulemaking is the forum which provides the greatest number of. checks against arbitrary action by the Staff or Commission. Much of the analysis (including cost-benefit) which the new backfitting rule would require is already done informally throughout the process of considering and adopting new regulations.

If the Commission wishes to insure still more structure in the rulemaking process, structure which could take into account every single factor set forth

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in the backfit rule and more, there are ample means of doing so by simple internal agency management. Such methods would reaffirm existing Comission guidelines to the Staff without opening the door to additional needless litigation as a consequence of vague new, legally enforceable, Commission-created rights added to those already available to all parties under the APA.

The entire backfit rulemaking was undertaken to bring order and accountability to plant modifications heretofore sometimes imposed without the benefit of systematic evaluation and justification. In rulemaking per se, that objective

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has always been we11' within the Comission's grasp -- it is, after all, the Comission that makes rules. For good measure, the Comission also has the Administrative Procedures Act as a matter of law, and its own Comittee to ~

i Review Generic Requirements as a matter of internal administrative policy to assist it in carrying out such considered decision-making. Casting the net of the new backfit rule over Comission rule-making (almost as an afterthought, as it happened in this case) is thus at best an exercise in pointless symbolism, and at worst potentially destructive of the Comission's entire rule-making process.

Unneeded law is bad law, and unneeded regulation is bad regulation. The Comission majority has imposed on this agency new regulatory obligations in rulemaking that are not only unneeded, but which the Comission majority itself hopes and trusts will be of little practical (i.e. legally enforceable) consequence. To the extent that this rule will affect rulemaking, it will therefore be a bad rule. In sum, the Comission majority has inexplicably

insisted on fixing not only what is, but what ain't broke. I will not be a party to such poor judgment.

ENVIRONMENTAL IMPACT: CATEGORICAL EXCLUSION The NRC has determined that this final rule is- the type of action described in categorical exclusion 10 CFR 51.22(c)(3). Therefore, neither an environmen-tal impact statement nor an environmental assessment has been preparedforthisfinalrule. -

PAPERWORK REDUCTION ACT. STATEMENT This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 el seq.). Existing requirements were approved by the Office of Management and Budget, Approval Number 3150-0011.

REGULATORY FLEXIBILITY ACT CERTIFICATION 1

In accordance with the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b),

the Commission hereby certifies that this final rule, if promulgated, will not have a significant economic impact on a substantial number of small entities.

The affected facilities are licensed under the provisions of 10 CFR 50.21(b) and 10 CFR 50.22. The companies that own these facilities do not fall within l

70 the scope of "small entities" as set forth in the Regulatory Flexibility Act or the Small Business Size Standards set forth in regulations issued by the Small Business Administration in 13 CFR Part 121.

LIST OF SUBJECTS IN 10 CFR PART 50 Antitrust, Classified information, Fire prevention, Incorporation by reference, Intergovernmental relations, Nuclear power plants and reactors.

Penalty, Radiation protection, Reactor siting criteria, Reporting and recordkeeping requirements.

l For the reasons set out in the preamble and_ under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as. .,

amended, and 5 U.S.C. 553, the NRC is adopting.the following amendments to 10 CFR Parts 2 and 50.

PART 50-DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES

1. The authority citation for Part 50 continues to read as follows:

AUTHORITY: Secs. 103, 104, 161, 182, 183, 186, 189, 68 Stat. 936, 937, 948, 953, 954, 955, 956, as amended, sec. 234, 83 Stat.1244, as amended (42 U.S.C. 2133, 2134, 2201, 2232, 2233, 2236, 2239, 2282); secs.'201, 202, 206,- 88 Stat. 1242, 1244, 1246, as amended (42 U.S.C. 5841, 5842, 5846),unlessotherwisenoted.

Section 50.7 also issued under Pub. l.95-601, sec. 10, 92 Stat. 2951 (42 U.S.C.5851). Sections 50.57(d). 40.58. 50.91, and 50.92 also issued under Pub. L.97-415,96 Stat.2071,2073(42U.S.C.2133,2239). Section 50.78 also' issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Sections 50.80-50.81 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C.2234). Sections 50.100-50.102 also issued under sec. 186, 68 Stat.

955 (42 U.S.C. 2236).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273),

55 50.10(a), (b), and (c), 50.44, 50.46, 50.48, 50.54, and 50.80(a) are issued under sec. 161b, 68 Stat. 948, as amended (42 U.S.C. 2201(b));

il50.10(b)and(c)and50.54areissuedundersec. 1611, 68 Stat. 949, as amended (42 U.S.C. 2201(i)); and il 50.55(e), 50.59(b), 50.70, 50.71, 50.72, 50.73, and 50.78 are issued under sec. 1610, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).

2. In 9 50.54, paragraph (f) is revised to read as follows:

650.54 Conditions of licenses.

(f) The licensee shall at any time before expiration of the license, uponrequ$stoftheCommissionsubmitwrittenstatements, signed under oath or affirmation, to enable the Commission to determine whether or.not the license should be modified, suspended or revoked. Except for information sought to verify licensee compliance with the current licensing basis for that facility, the NRC must prepare the reason or reasons for each information request prior to issuance to ensure that the burden to be imposed on respondents is justified in view of the potential safety significance of the issue to be addressed in the requested information. Each such justification provided for an evaluation performed by the NRC staff must be approved by the Executive Director for Operations or his or her designee prior to issuance of the request.

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3. In i 50.109, paragraph (a) is revised, paragraph (b) is deleted, paragraph (c) is revised and redesignated (b), and new paragraphs (c), (d) and (e) are added to read as follows:

950.109 Backfitting.

(a)(1) Backfitting is defined 'as the modification of or addition to systems, structures, components, or design of a facility; or the design approval or manufacturing license for a facility; or the procedures or organization required to design, construct or operate a facility; any of which may result from a new or amended provision in the Comission rules or the imposition of a regulatory staff position interpreting the Comission rules that is either new or different from a previously applicable staff position after:

(1) the date of issuance of the construction pennit for the facility for facilities having construction permits issued after October 21, 1985; or (ii)sixmonthsbeforethedateofdocketingoftheoperating license application for the facility for facilities havirg construction permits issued befve October 21, 1985; or (iii) the date of issuance of the operating license for the facility for facilities having operating licenses; or

I (iv) the date of issuance of the design approval under Appendix M, N or 0 of this part.

(2) The Commission shall require a systematic and documented analysis pursuant to paragraph (c) of this section for backfits which it seeks to impose. Imposition of a backfit purusant to paragraph (a)4(11) of this section shall not relieve the Comission of performing an analysis after the fact to document the safety significance and appropriateness of the action taken.

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(3) The Commission shall require the backfitting of a facility only when it determines, based on the analysis described in paragraph (c) of this section, that there is a substantial increase in the overall protection of the public health and safety or the comon defense and security to be derived from the backfit and that the direct and indirect costs of implementation for that facility are justified in view of this increased protection.

(4) Theprovisionsofparagraphs(a)(2)and(a)(3)ofthissectionare inapplicable and, therefore, backfit analysis is not required and the standard does not apply where the staff finds and declares, with appropriate documented evaluation for its finding, either:

(1) that a modification is necessary to bring a facility into .

ccmpliance with a license or the rules or orders of the

1 Consission, or into conformance with written connitments by the licensee; or (ii) that an immediately effective regulatory action is necessary to ensure that the facility poses no undue risk to the public health and safety. 2/

i Such documented evaluation shall include a statement of the 3

objectives of and reasons for the modification and the basis for invoking the exception.

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(b) Paragraph (a) of this section shall not apply to backfits imposed prior to October 21, 1985.

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(c) In reaching the determination required by paragraph (a) of this section, the Commission will consider how the backfit should be prioritized and scheduled in light of other regulatory activities ongoing at the

{ facility and, in addition, will consider information available l

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}/ For those modifications which are to ensure that the facility poses no undue risk to the public health and safety and which are not deemed to require immediately effective regulatory action, analyses are required; these analyses, however, should not involve cost considerations except i only insofar as cost contributes to selecting the solution among various

acceptable alternatives to ensuring no undue risk to public health and safety.

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concerning any of the following factors as may be appropriate and any other information relevant and material to the proposed backfit:

(1) Statement of the specific objectives t. hat the proposed backfit is designed to achieve; .

(2) General description of the activity that would be required by the licensee or applicant in order to complete the backfit; ,

(3) Potential change in the risk to the public from the accidental off-site release of radioactive material; (4) Potential impact on radiological exposure of facility employees;

-(5) Installationandcontinuingcostsassoctatedwiththebackfit, including the cost of facility downtime or the cost of construction delay; (6) The potential safety impact of changes'in plant or operational I complexity, including the relationship to proposed and existing i regulatory requirements; (7) The estimated resource burden on the flRC associated with the proposed backfit and the availability of such resources; (8) The potential impact of differences in facility type, design or age I on the relevancy and practicality of the proposed backfit;  !

(9) Whether the proposed backfit is interim or final and, if interim, I the justification for imposing the proposed backfit on an interim basis.

l (d) No licensing action will be withheld during the pendency of backfit analyses required by the Connissicn's rules.,  ;

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(e) The Executive Director for Operations shall be responsible for implementation of this section and all analyses required by this section shall be approved by the Executive Director for Operations or his designee.

4. In Appendix 0 to 10 CFR Part 50, a new section (8) is added to read as follows:

APPENDIX 0 - STANDARDIZATION OF DESIGN; STAFF REVIEW 0F STANDARD DESIGNS.

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8. Information requests to the approval holder regarding an approved design shall be evaluated prior to issuance to ensure that~the burden to be imposed on respondents is justified in view of the potential safety significance of the issue to be addressed in the request'd e information. Each such evaluation performed by the NRC staff shall be in accordance with 10 CFR 6 50.54(f) and shall be approved by the Executive Director for Operations er his or her designee prior to issuance of the request.

5. The authority citation for Part 2 continues to read as follows:

Authority: Secs. 161, 181, 68 Stat. 948, 953, as amended (42 U.S.C. 2201, 2231 ; sec. 191, as amended Pub. L.84-615, 76 Stat. 408 (42 U.S.C.

2241 ; sec. 201, 88 Stat. 1342, as amended (42 U.S.C. 5841; 5 U.S.C. 552.

Section 2.101 as issued under secs. 53.62, 63.81, 103, 104, 105, 68 Stat.

930, 932, 933, 935, 936, 937, 938, as amended (42 U.S. 2073, 2092, 2093, 2111, 2133, 2134, 2135); sec. 102, Pub. L.91-190, 63 Stat. 853, as

amended (42 U.S.C. 4332); sec. 301, 88 Stat. 1248 (42 U.S.C. 5871).

Sections 2.102, 2.103, 2.104, 2.105, 2.721 also issued under secs.102, 103, 104, 105, 183, 189, 68 Stat. 936, 937, 938, 954, 955, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2233, 2239). Section 2.105 also issued under Pub. L.97-415, 96 Stat. 2073 (42 U.S.C. 2239). Sections 2.200-2.206 also issued under secs. 186, 234, 68 Stat. 955, 83 Stat. 444, as amended (42 U.S.C. 2236, 2282); sec. 206, 88 Stat. 1246 (42 U.S.C.

5846). Sections 2.300-2.309 also issued under Pub. L.97-415, 96 Stat.

2071 (42 U.S.C. 2133). Sections 2.600-2.606 also issued under sec.102, Pub. L.91-190, 83 Stat. 853 as amended (42 U.S.C. 4332). Sections 2.700a, 2.781 also issued under 5 U.S.C. 554. Sections 2.754, 2.760, 2.770, 2.780 also isued under 5 U.S.C. 557. Section 2.790 also issued under sec. 103, 68 Stat. 936, as amended (42 U.S.C. 2133) and 5 U.S.C.

552. Sections 2.800 and 2.808 also issued under 5 U.S.C. 553. Section 2.809 also issued under 5. U.S.C. 553 and sec. 29, Pub. L.85-256, 71 Stat.579,asamended(42U.S.C.2039). Appendix A also issued under sec.

6, Pub. L.91-580, 84 Stat. 1473 (42 U.S.C. 2135).

6. Section 2.204 is revised to read as follows:

62.204 Order for modification of license.

The Commission may modify a license by issuing an amendment on notice to the licensee that the licensee may demand a hearing with respect to all or any part of the amendment within twenty (20) days from the date of the notice or such longer period as the notice may provide. The amendment will become effective on the expiration of the 20-day period during which the licensee may demand a hearing. If, the licensee requests a hearing during this 20-day period, the amendment will beccme effective on the date specified in an order made following the hearing. When the Commission finds that the public health, safety, or interest so requires, the order may be made immediately effective.

If the amendment involves a backfit, the provisions of $50.109 of this chapter shall be followed.

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Dated at Washington, D.C., this 17 th day of September, 1985.

f For the Nuclear Regulatory Comission.

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S'amuel J. Chilk, Secretary of the Comnission.

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