ML20136C679

Enforcement Criteria for EQ Enforcement

ML20136C679
Person / Time
Issue date:	07/17/1986
From:	NRC
To:
References
PROC-860717-01, PROC-860717-1, NUDOCS 9703120149
Download: ML20136C679 (5)

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.- ENFORCEMENT CRITERIA FOR EQ ENFORCEMENT L

ADV/MW l Application of th4 " Clearly knew, or shoul'd have'known 'th'sl _-

[j The staff believe's it is unlikely that licensees will be identified that

" clearly knew" they had equipment for which qualification cannot be established.

The staff believes from discussions with licensees that all licensees who were

. aware before November 30 that they had equipment for which qualification could not be established elected to shut down rather than operate in noncompliance

,under the daily penalty provision. Thus, the issue in most cases will be for the staff to determine whether the licensee " clearly should have known" that

' its equipment was not qualified. The staff will examine the circumstances in each case to make the determination. The factors the staff will examine include:

1. Did the licensee have vendor-supplied documentation that demonstrated that the equipment was qualified?

2 .' Did the licensee perform adequate receiving and/or field verification inspection to determine that the configuration of the installed equipment matched the configuration of the equipment that was qualified by the vendor?

3. Did the licensee have prior notice from any source that equipment qualification deficiencies might exist?

4. Did some licensees identify similar problems and correct them before the deadline?

To illustrate how these factors would be applied in specific cases, the staff will use as an example in the discussion which follows deficiencies in the qualification of the internal wiring of certain valve operators recently identified at several plants. Vendor EQ test reports provided to licensees were ambiguous regarding whether the internal wiring of the operators was qualified by the reports. It has now been determined that vendor EQ test reports did not include qualification of the internal wiring of the operators and that the wiring used in the test operators could be different than the wiring installed in production units. Subsequent wiring modifications by the valve manufacturer or by the installer have introduced additional wiring which was not covered by the operator qualification reports. Physical inspection has shown instances of unidentified or not qualified wiring installed in several valve operators.

These operators are used on a wide variety of valves at the plants and in many cases were used on valves which were part of systems covered by technical specifications (TS) such as containment isolation valves. The wiring in the operators should have been qualified by November 30, 1985. Thus, plants at which such significant deficiencies are identified after the deadline for which further testing or analysis is required to establish qualification and which operated in noncompliance are subject to a possible penalty of $5,000 per item per day if such licensees clearly knew or clearly should have known of the deficiencies. In some plants, this could amount to a substantial penalty.

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! With regard to the first two factors, reliance on vendor-supplied information i on testing of equipment and performance of receiving and/or field verification l-inspections, the licensees took the position that the EQ test reports provided i by the vendor' covered the wiring and did not perform adequate receiving or j field verification inspections to positively identify the internal wiring, j We and the licensees now know that the vendor test reports did not cover the wiring in-the operators.

t In addressing qualification by test, paragraph (f) of 10 CFR 50.49 requires

that each item of electrical equipment important to safety must be qualified by l testing an identical item or testing a similar item with supporting analysis

that the equipment to be qualified is acceptable. It may not be reasonable to i rely entirely on vendor-supplied information in establishing similarity since i changes to complex equipment are likely to occur during the manufacturing l process and/or installation A comprehensive receiving and/or field verification

! inspection of the equipment by the licensees should be conducted to identify significant discrepancies between the as-installed vs. qualified configurations.

With regard to the third factor, prior notice of similar problems, the results i of one field verification inspection of equipment prompted IE to issue an j Information Notice in 1983 to alert licensees to several deficiencies affecting 1 equipment qualification. This Notice discussed a construction deficiency report related to inspection of valve operators at a plant under construction. Among several specific qualification-related concerns, this Notice stated that "No identification was evident on certain materials internal to the valve operators (e.g., wiring, insulation, etc.)" and stated that "It is not presently known whether these-types are qualified for the service conditions." This Information Notice also highlighted the fact that "Information obtained from purchase order files and qualification files does not agree with the installed components."

Based on the above, the staff concluded this document provided prior notice of the potential problems with certain valve operators. Given this information, it was unreasonable for licensees to rely entirely on the vendor reports without doing additional work to ensure that the wiring was qualified.

With regard to the fourth factor, some licensees did identify and correct this problem before the November 30, 10 5 deadline. The unqualified wiring was identified by these licensees as a result of walkdown verification of the installed equipment or comprehensive review of qualification files.

After consideration of all of these factors, the staff has concluded that in the case of the wiring, licensees " clearly should have known" that the vendor documentation was not adequate to support qualification.

Time Period to be Considered for Daily Civil Penalty Once the staff concludes that the " clearly knew or should have known" test is applicable, the staff must determine the appropriate period over which to assess a daily civil penalty. The staff has concluded that the appropriate period is from November 30, 1985 to the' time the licensee completes its evaluation and schedules corrective action. This approach should encourage timely identification and evaluations by licensees of the qualification of the equipment. A licensee should not be penalized for each day after the problem

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is identified and ' appropriate corrective action is scheduled that it elects to operate until. thetproblem is fixed assuming a reasonable determination was made that it was safe.,to allow continued operation. Imposing daily civil penalties until the violation is corrected would provide strong incentives for shutdown even though the licensee had determined that continued operation for some

- reasonable period of time is not unsafe. However, if the licensee's determination

< that it was safe to operate is later found to be in error, shutdown ma'y be required and the licensee may be subject to daily civil penalties. Since such penalties are likely to quickly become abnormally high, particularly as the length of time between the November 30 deadline and the date of inspection increases, the staff has determined that some cap on the possible amount of the civil penalty 3hould be imposed. The staff has determined that this is appropriate especially for those cases in which the " clearly should have known" test is applied as opposed to cases in which the licensee " clearly knew" that they were not in compliance. The staff has selected a cap of $500,000 per item or approximately the amount that would be imposed for one item that was deficient for 100 days after the deadline. The mitigation factors would then be applied {

to mitigate from $500,000 per item down if appropriate. Similarly, since the l

reasonableness of the schedule for corrective action is a factor to be considered for mitigation of the daily civil penalty, if the licensee-fails to meet its schedule, additional civil penalties will be considered.

In the case of the valve operators described above, in one hypothetical situation, suppose that a Resident Inspector notified one licensee two weeks after the deadline .that the qualification of the valve operators was suspect.

That licensee evaluated the situation and concluded that the qualification of the wiring could not be verified. The licensee performed a final evaluation two weeks later justifying continued operation with the unqualified equipment .

and planned to replace the equipment at the next scheduled refueling outage in j two months. The staff would conclude that this licensee would be subject to a daily civil penalty of $5,000/ item / day for 28 days. .

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Application of the Mitigation Factors ,

Once it has been determined that a licensee may be subject to a daily civil j penalty under this test, Generic Letter 85-15 specifies that the staff should l i

apply certain mitigation factors to determine the amount of the proposed l penalty. The factors specified in the letter were:  ;

1. Did the licensee identify and promptly report the noncompliance with 10 CFR 50.49? .l I

2. Did the licensee apply best efforts to complete environmental qualification within the, deadline? ,

3. Has the licensee proposed actions which can be expected to result in full compliance within a reasonable time?

These factors are self-explanatory. In addition, the staff would consider '

the circumstances of each particular case including the significance of the deficiencies identified, the opportunities available to identify and correct i I

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I them, the timelaken by the licensee to make a determination, the quality

} of the supporting analysis, and the length of time the deficiencies existed before identification. The following discussion illustrates how these

! mitigation factor 5 would be applied in the hypothetical case of a licensee i which identiffed ~the valve operator problem.

l We assume that the licensee identified the potential problem with qualification i

of the internal wiring of valve operators after conversations with the'NRC i Resident Inspector. We assume that it immediately initiated a timely '

j investigation, determined that qualification of its valve operators was not i fully supported due to problems with the internal wiring, and notified the NRC of this detennination via telephone and continued to evaluate the problem.

t Within two weeks of becoming aware of the problem, the licensee submitted a i 10 CFR Part 21 report to the NRC. Included in this submittal was the licensee's

!- justification for continued operation of the plant and a plan for corrective action. ,

! Further we assume that the licensee actively worked to achieve its 10 CFR 50.49 i' deadline of the second refueling outage after March 31, 1982 and was able to i meet it except for some items of equipment for which justifications for continued '

1 operation (JCOs) had been approved. ' Later, NRC was notified by telephone that all work.on equipment scheduled for replacement and/or relocation and covered j- by the previously approved JCOs had been accomplished. Therefore, all equipment within the scope of 10 CFR 50.49 was believed to be qualified well before the November 30, 1985 deadline.

l Finally, we assume that this licensee's 10 CFR Part 21 report submitted to the NRC included a schedule for corrective actions to establish qualification of j' the wiring of all valve operators within the scope of 10 CFR 50.49 and that I this schedule called for the replacement of existing wiring with qualified

wiring on all affected operators within two months.

The staff has concluded that this licensee would be entitled to complete mitigation under these factors. However, to be fair and equitable to those licensees who either took appropriate actions prior to November 30 or shut down

-on November 30 in order to be in compliance, some civil penalty should be imposed.

Thus, the staff has concluded that the daily civil penalty should be adjusted in accordance with the' factors but the civil penalty levied should not be lower than $50,000, the base civil penalty for an ordinary Severity Level III violation, in any case in which significant deficiencies remained at the close of the inspection for which further testing or analysis was required to establish qualification and which the licensee " clearly knew or should have known" existed before the November 30 deadline.  !

i Other Enforcement Regarding Violations of E0 Requirements Identified at Plants Operatirig After November 30 If violations of the EQ rule identified during first-round 1/ nspections i at plants operating after November 30, 1985 apparently existed before the deadline, then the " clearly knew or should have known" test should be applied. If the 1/ First-round inspections are special team inspections to review licensees' compliance with 10 CFR 50.49.

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licensee meets thd test, enforcement should be taken as described above. If the licensee does not meet this test, no enforcement action should be taken.

If the licensee cbid not have reasonably been expected to discover the problem before the November 30 deadline, presumably the noncompliance could not have been avoided a'nd enforcement action to deter future noncompliance would serve no purpose.

If the violations of the EQ rule identified after November 30, 1985 do not relate back to action or lack of action before the deadline; e.g., a modification was made in January 1986 that created the violation, or are identified after first-round inspections are completed, enforcement should be taken under the current Enforcement Policy. The present policy states as an example of Severity Level III: "2. A system designed to prevent or mitigate a serious safety event not being able to perform its intended function under certain conditions (e.g., safety system not operable unless offsite power is available; materials or components not environmentally qualified) " Thus, no changes to the Enforcement Policy are necessary to take into acccr. int EQ violations.

Consistent with the interpretations of the Enfercement Policy in other areas, less significant violations that indicate a programmatic breakdown can also be grouped and categorized as Severity Level III violations.

For licensees that were not in compliance with the rule before the November 30, 1985 deadline and did not' submit timely requests for extension, but which did not operate in noncompliance after the deadline, consistent with the Commission's direction in response to SECY 85-220, (Memorandum from S. J. Chilk to W. J.

Dircks, August 27,1985) the staff will exercise enforcement discretion af ter considering whether adequate JC0's were provided and whether an extension would have been granted if timely filed, i

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