ML20136D124

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Review of Cost Analysis Contained in Regulatory Analysis for USI A-40, 'Seismic Design Criteria.'
ML20136D124
Person / Time
Issue date: 09/30/1984
From:
NRC OFFICE OF RESOURCE MANAGEMENT (ORM)
To:
Shared Package
ML20136C160 List:
References
FOIA-85-361, REF-GTECI-A-40, REF-GTECI-SC, TASK-A-40, TASK-OR NUDOCS 8511210228
Download: ML20136D124 (5)
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. 1 REVIEW OF COST ANALYSIS CONTAINED IN REGULATORY ANALYSIS FOR USI A -

SEISMIC DESIGN CRITERIA SEPTEMBER 1984 cared by: COST ANALYSIS GROUP 0FFICE OF RESOURCE MANAGEMENT

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4 USI A-40 SEISMIC DESIGN CRITERIA This report is in response to a request from the Safety Program Evaluation Branch, Division of Safety Technology, NRR to review the cost analysis contained in the Regulatory Analysis for USI A-40 Seismic Design Criteria.

The CAG's ability to comment in a substantive fashion is limited because of a lack of specificity in the cost analysis itself. Cost considerations have been given very limited attention in the subject regulatory analysis. What does exist is very sparse and highly conclusionary in nature. Although the CAG would have preferred to see more detailed discussion and explicit assumptions leading to many of the conclusions concerning costs, we recognize that the approach taken may be viewed as appropriate given that:

A. the benefit side, with which costs must ultimately be compared,fs even more highly uncertain and non-quantitative 1.n character; and

8. the costs identified will only impact the future ifcensee population which may in fact be zero, and even under optimistic conditions must be construed as very small.

For these reasons, extensive revisions that would be costly and time consuming to develop are not prescribed here. The following coments are offered.

1. Potential Impact on Future Construction Costs In the current regulatory analysis, cost considerations are basically '

limited _to the costs associated with the new analyses and information required if the proposed revisions to the SRPs' are adopted. These impacts h

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are viewed as very small. What appears to be a far more important question, and one with a potential for significant incremental cost to future applicants, is how are these new analyses likely to effect the ennstruction ' cost of the structures, systems, and components that must now meet seismic design requirements emanating from these different analyses.

The existing regulatory analysis does briefly touch on this , point but only in the most conclusionary fashion.

Specifically, on page 18 of Enclosure 1 when discussing task area 6, it states ... "no construction changes in future plants are anticipated as a result of the proposed revisions." And again on page 30.1, it concludes that ... ' a reduction in new plant capital costs (is possible) by eliminating or providing alternatives which may remove unquantifiable excessive conservatism."

However, for the bulk of the specific revisions under consideration, the regulatory analysis is silent on how futur'e construction costs may be impacted.

In the CAG's view, this issue is sufficiently important that it warrants explicit identification and discussion when addressing each of the task areas in Part A, as well as the value impact discussion in Part B.

These discussions should present the basis and assumptions leading to your conclusions on this point.

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2. Potential Costs Associated with Alternative Procedures In Part A of the Value-Impact Analysis, 10 out of the 24 specific revisions to SRP's 3.7.1, 3.7.2, and 3.7.3 are immediately dismissed as having no cost impact because ... "they involve clarification, or alternative piocedures on existing requirements." But, it seems to the

[ CAG that alternative procedures can readily result in a change in costs to future licensees. Further explanation concerning your basis for omitting these revisions from value-impact consideration should be provided.

3. Issuance of 50.54(f) Letter The regulatory package also calls for the issuance of a 50.54(f) letter to existing licensees to detennine whether'above ground tanks are designed adequately. This proposed requirement is not subject to a value-impact assessment as it is viewed as merely a preliminary step necessary to determine the extent of the problem and whether further action is called for. The concern with this is that considerable cost can be incurred by the industry in providing the necessary information and analyses. Therefore, NRC management may view it as prudent to justify the issuance of such a letter based on cost-benefit considerations.

Recognizing that lack of infonnation is what requires such a letter in the first place, one should still attempt to develop a value-impact assessment to help evaluate whether this proposed program is warranted. At a A

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4 minimum, such an analysis would require assumptions concerning the likely number of plants (or tanks) impacted, the expected cost to fix a

, tank, other costs associated with the program (e.g. - cost of providing analyses in response to 50'.54(f) letter), and the expected safety consequences of identifying and correcting inadequately designed tanks.

In lieu of developing likely values of each of these parameters, it may be more defensible to develop ranges of expected values. The CAG notes that the regulatory analysis in support of USI A-43 Containment Emergency Sump Performance dealt with a similar situation in that there too, a

,y proposed requirement was the issuance of an NRC letter calling for a systematic plant evaluation. This proposed requirement was asses:ed from a value impact perspective similar 'td'the approach outlined above.

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