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a REVIEW OF COST ANALYSIS CONTAINEO IN DECEMBER 1984 ORAFT OF
. " REGULATORY ANALYSIS OF RECOMMENDATIONS CONCERNING OPERATOR SHIFT SCHEDULING AND OVERTIME IN NUCLEAR POWER PLANTS" .
MARCH 1985
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COST ANALYSIS GROUP OFFICE OF RESOURCE MANAGEMENT
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CAG REVIEW OF DECEMBER 1984 DRAFT OF " REGULATORY ANALYSIS OF RECCMMENDATIONS CONCERNING OPERATOR SHIFT SCHEDULING AND OVERTIME IN NUCLEAR POWER PLANTS This report is in response to a request from the Msfon of Human Factors Safety to review the regulatory analysis in support of the Shift Scheduling Project. Consistent with the CAG's charge, our coments focus on the cost analysis portion of the regulatory analysis. Little attention has been directed at the benefit side (avoided costs of accidents), or the structuring of the alternatives themselves. Volume I, which established many of the ground rules, was not submitted to the CAG and subsequently, was not reviewed.
With the exception of the first six coments, which are scmewhat general in scope, our cements are very specific to individual'section of PNL's draft report. These latter cements are identified by page and other location descriptors to direct the reader to the area of concern.
- 1. In general, the cost analysis appears to consider the full range of cost implications associated with the proposed action. The level of detail, clarity of presentation and computational accuracy, is on the whole good.
Consistency with the guidance provided in NRC's handbooks for value impact assessments and cost estimating is high.
- 2. The estimate of cost savings from increases in plant availability is depicted as a function of the daily cost of replacement energy and the anticipated increase in capacity factor. The current analysis assumes
$300,000 per day as the best estimate for daily replacement energy based on information provided in NRR Office Letter No. 16. This estimate is for the most part based on fairly simolfstic assumptions and subjective considerations. Given the importance of these cost savings to the overall value impact assessment, it would be more prudent to base your estimate of the daily cost of replacement energy on a more substantial footing. The NRC has developed plant specific daily replacement energy cost estimates for 108 reactors. These estimates were derived from probabilistic production-cost simulations of pooled utility-system operations. The average replacement energy cost per reactor is easily obtainable from this source and would provide a far more accurate and justifiable basis for this most important averted cost. Attached is NUREG/CR-4012, Replacement Energy Costs for Nuclear Electricity-Generating Units in the United States. You are referred specifically to Table 5.1 on Pages 2 thru 4
- 3. For each of the attributes, high and low estimates are appropriately identified in order to capture the uncertainty inherent in the quantification effort. However, none of these upper and lower bound values are brought forward to the value impact sumary tables where the overall assessment is presented. It would be useful to include these in the value impact sumary tables (e.g., Tables 3.2 - 3.10, 3.13). NET BENEFIT and RATIO totals for the high and low scenarios should suffice.
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- 4. The quantification of industry operating costs is significantly affected by your estimates of number of new operators recuired and the assumed j
improvement in the capacity factor. Although these items are discussed in detail in Appendix 8, you fail to identify the likely range of values 1
these parameters can assume. It would be extremely useful if, at appropriate places in Appendix B, you were to state that for the j different value impact scenarios discussed in this report the number of i additional operators assumed ranges from X to X , and capacity factor 3 increases range from X% to X i%. Also, in the sammary value impact tables themselves, you should identify the specific values assumed for these parameters. The attached Table 3.4, from the contractor's report, provides an example of how CAG's comments (3) and (4) could be j accommodated, l S. Results for a number of scenarios suggest that industry costs are either nil or generate net savings because of improved availability of reactors.
1 If this is'an accurate reflection of the effect on industry, one must question why industry has not moved in the direction of these proposals independent of NRC requirements. This appears worthy of discussion because without it the savings in industry operating costs, as depicted in the report, could be viewed as suspect by many readers.
I 6.
- It would appear that attempts to limit overtime can also have a negative effect on safety. Operators presumably perform many procedures that are i not currently mandatory but are viewed as good prcctice. Faced with i
! overtime constraints, utilities may direct operators to forego these discretionary tasks in an attempt to keep new hires to a minimum. Safety and plant availability could be adversely affected.
- 7. Page 3.13, first bullet - The conelusion that large net-benefits and a high val.ue-impact ratio occur for all three cases is not true with respect to case three. ,
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- 8. Page 3.14, Table 3.5 - Industry operating costs are reported as 1.2E8 under the assumption that 20% present overtime is reduced to 10%
overtime. This is an identical cost impact as appears in Table 3.3 (30%
present overtime reduced to 10% overtime). Given that the quantification i
of this value is driven by the change in number of operators and change
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in capacity factor, one would intuitively expect these cost impacts to be quantitatively different.
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. 9. Page 3.19, fifth line - Although the equation for 60 produces a reasonable value, and is consistent with the assumptions you have set forth, it does not appear to be totally logical. The following equation, 6 0 = (1.(% overtime before) - 1) *45 1.(% overtime after) would appear to produce more logical .results because the number of new i
' hires would be directly proportional to the number of hours that would have'to be made up. For example, if 45 workers are currently working at 4
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. . _ _ . _ _ _ . _ _ _ . , _ _ _ . - _ _ ~ . _ _ , _ . _ . _ - _ . . _ .
[ l 30% overtime this would translate into a work effort of 45
- 2704 hours0.0313 days <br />0.751 hours <br />0.00447 weeks <br />0.00103 months <br /> =
121,680 hours0.00787 days <br />0.189 hours <br />0.00112 weeks <br />2.5874e-4 months <br />. If a new requirement limits overtime to 20%, each worker
- could onl
- workers (y work i.e., 2496 hours0.0289 days <br />0.693 hours <br />0.00413 weeks <br />9.49728e-4 months <br />. This 121,680/2496) or 3.75would new translate hires (i.e., into1.348.75
- 1)*45 total " 3.75. -
U The equation in the text produces 4.5 additional hires which suggasts
' that reducing overtime will expand the total work effort beyond 9 hat >
existed prior to implementation.
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- 10. Page 3.20, NRC Development - No real basis is provided for this cost estimate. It would be helpful if the NRC procedures necessary to perform
- this function were identified with associated levels of effort and hourly costs provided. This would enable the reader to assess the reasonableness of this cost estimate. Recognizing that this is a
' relatively small impact, the contractor should not expend much e.ffort in this regard.
- 11. Page 3.20 NRC Implementation - The best estimate of $200,000 appears totally inadequate. Based on the description in the report, license amendments would be required. License amendments must be perfonned for each reactor'which, in turn, implies reactor specific ... (1) reviews, (2) safety evalucitions, (3) significance and hazards analyses, (4)'
Federal Register Notices and publishing costs, (5) legal and management reviews, etc. Given that there are projected to be almost 100 licensed reactors (96) by the end of 1985, each subject to such a review, the NRC
! implementation cost might more typically be on the order of 5 to 6 times
- the $200,000 estimate provided in the report.
- 12. Page 3.36 NRC Implementation Costs - comment 11 (above) would appear to apply here as well.
- 13. Pages 8.2 to 8.4 Occupational Exposure (Accidental) - Occupational exposure is estimated as a function of the change in accident frequency i times the expected dose. However, a major impact of the proposed requirement is to add operators at the site which in turn should increase the expected occupational dose. This latter point does not seem to be 1
captured in the computational approach employed in the report.
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- 14. Page 8.12, lith line - 83/132 should be 88/132 to produce - $34,733.
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Note, it is fully recognized that the reactor population is a moving
' target and I am not suggesting that estimates be revised accordingly, but as of mid-February 1985 NRC estimates are:
Power Reactors with operating licenses by year-end.
1985 96 1986 106 l 1987 114
- - 1988 118 1989 and beyond 127 (includes 7 that are currently i indefinitely delayed) 1
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- 15. Page B.20, Estimation of Manpower Cost Increases - For a recurring cost such as this, an explicit assumption should be made concerning real
. increases in price. The analysis is silent on this point and thus the implication is that all prices are increasing at the rate of general inflation which translates into a zero real rate of increase. That is, all recurring costs are assumed to be constant in 1985 dollars. For most recurring costs this .is not an unreasonable assumption. However, past experience with reactor operator salaries suggests that significant real increases have occurred in the past. Further, given current shortages in numbers of operators and the additional demands that would be exerted by this proposal, it would appear reasonable to expect wages to continue,to increase at some real rate out into the future. Because this cost impact is a major component in the overall cost assessment, it would be desirable to add this cost consideration to your analysis. At a minimum, if you choose to do nothing, you should acknowledge the potential understatement of this cost impact.
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, TABLE 3.4 Value-Impact Summary - Recommended Alternative Assumptions: 30% Present Overtime Reduced to 5% Overtime s.
1 Dose Reduction 4
(person-rem) Evaluation ($)(a)
- Attribute Best Estimate Best Estimate 1 Public Health 4.6E6 4.6E8 Occupational Exposure (Accidental)' 3.7E3 3.7E6 Occupational Exposure (Routine) -2.7E4 -2.7E7 Offsite Property 9.4E7
- Onsite Property 5.9E7
{ Regulatory Efficiency NQ Improvements in Knowledge NQ d
Industry Implementation -1.7E8 -
! Industry Operation
- 2.0E8
} NRC Development -7.5E4 i NRC Operation -4.5E6 g ,
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- NET BENEFIT
- ** Sum Over All Affected Attributes ($) 6.2E8
] RATIO:** Public Dose Redu'ction/ Sum of All NRC and
! Industry Costs /(person-rem /$100) -14.948(b) i NA = Not Affected NQ = Not Quantified (a) Note: Favorable or beneficial consequences of a proposed action have a -
.' positive sign. Unfavorable or adverse consequences have a negative sign.
For instance, an increase in industry or NRC operating costs would be i
considered an unfavorable consequence and should be entered in the table with a negative sign.
(b) Because the ratio should typically be expressed as a positive number; the ,
- absolute value of the sum of all costs (industry, NRC, and other) is used in the denominator. The significance of the magnitude of a negative value-impact ratio is different from a positive ratio. .In this case, a-negative ratio is caused by a not cost savinas, which is given a negative sign in-the denominator of the ratio to distinguish it from a cost increase.
Assumes capacity factor increase (CFI) of _ %, and number of new operators
( 0) of ,
Net BeneTTt and Ratio, based en upper bound estimates of attributes, are and , respectively.
Ket BeneTit and Ratio, based on lower bound estimates of attributes, are
_ and _ , respectively.
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' JAR 2 5 !SS5 MEMORANDUM FOR: Ralph M. Wilde, Program Assistant to the Director Division of Fuel Cycle and Material Safety Office of Nuclear Material Safety and Safeguards
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FROM: Edwin G. Triner, Director Division of Budget and Analysis Office of Resource Management
SUBJECT:
THE COST ANALYSIS GROUP'S (CAG) COMMENTS ON THE REGULATORY l' IMPACT ANALYSIS OF THE PROPOSED REVISIONS TO 10 CFR 73.71 --
REPORTING OF SAFEGUARDS EVENTS i
- i Please find attached CAG's comments on the requiatory imcact analysis portion i
of the Revisions to 10 CFR 73.71 -- Reporting of Safeguards Events. The analysis from the proposed clearly shows cost reductions to both the NRC and industry resulting revisions.
Our review concludes that no major changes are j
required. However, there are some reconnendations we offer which may be of use, even to your future impact analyses.
~ 1 i* Should you have any questions concerning this review, please contact Brian Richter, X 27770.
Original Signed by E
L dwin G.Triner Edwin G. Triner, Director Ofvision of Budget and Analysis Office of Resource Management
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