ML20136D709

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Cost Analysis Group Review of Regulatory Impact Analyses of Proposed Insider Rulemaking
ML20136D709
Person / Time
Issue date: 03/26/1985
From:
NRC OFFICE OF RESOURCE MANAGEMENT (ORM)
To:
Shared Package
ML20136C160 List:
References
FOIA-85-361, FRN-49FR30726 AB17-2-13, NUDOCS 8511210350
Download: ML20136D709 (4)
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COST AllALYSIS ' GROUP'S REVIEW 0F THE REGULATORY IMPACT ANALYSES OF THE

. PROPOSED INSIDER RULEMAKI!!G pared by:

COST ANALYSIS GROUP "0FFICE OF RESOURCE MANAGEMENT

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COST ANALYSIS GROUP'S REVIEW 0F THE REGULATORY IMPACT ANALYSIS.

OF THE PROPOSED INSIDER RULEMAKING d

This re' port is a review of the cost analys'is portions of NMSS's value impact analyses of the. Proposed Insider Safeguards Rules and is provided under the direction of the Cost Analysis Group's (CAG) Charter.  ;

There are three proposed. rules within this action: 1) Access Authorization

- Rule (Sc.reening Requirements),'2) Search Requirements Rule (Pat-Down Search Issue), and 3) Miscellaneous Safeguards-Related Amendments (Access Controls, Vital Area Designation, etc.). Each contains its own' value impact analysis, but some of our comments hold for all'of the analyses. For example, some of the data used is outdated and therefore the resulting cost estimates are not as current at they should be. Another problem is that future costs are not discounted. Lastly, while the cost burden resulting from paper work is considered in the cost estimates, a special section under Statutory Considerations address.ing that' issue should be included.

The specific comments follow:

I. Access Authorization Rule Page 2 - Under 1.3.1 NRC Ooerations, cost estimates are made for initial a'

and subsequent annual costs. Following the format established in "A Handbook for Value-Impact Assessment," NUREG/CR-3568, the costs could more accurately be identified as NRC Implementation and HRC Operation costs respectively.

Pags 3 - The NRC imolementation cost could be expressed as a function of the total number of sites expected to be in existence based on current expectations. Future sites are very near-term and small in number. (There are presently 56 operating sites.)

The NRC operating cost could be a function of the annual main-tenance effort and a recurring inspection effort, if any. The annual value could then be present valued over the assumed life expectancy of'the plants.

Footnote 2. refers to an operating cost, not an implementation cost as indicated.

Page 4 - The costs to NRC in subsequent years are said to exclude cost i

' increases due to inflation. If you ident ify costs as being 4 expressed in constant dollars, inflation will be implicity accounted for. Future year costs should be discounted.

The operating (annual) costs should only include maintenance and recurring inspections. Future plants are very near-tem and limited in number. They should be included in implementation i costs for computational purposes. Also, assuming that six new plants will be licensed each year is not consistent with present information and implicitly assumes each of the plants will be on a new site.

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Section 1.3.2 contains estimates as to the incremental impact the proposed action would have on other government agencies in percentage and qualitative terms. Presenting the impacts in dollar values would be more useful.

Page 6 - Estimated industry savings are underestimated because of using the 48 site figure.

Assuming the same number of people per site is questionable, especially for multiplant sites.

Page 7 - This particular analysis assumes that half-time duties of a professional cost S42,000/ year f.e., an $84,000 per staff year cost is used. An estimate of $124,800 per staff year is used on Page 4.

The industry's initial costs and annual maintenance costs are better denoted as their implementation and operation costs as defined in NUREG/CR-3568. Also,'the costs occurring in future years should be discounted.

Page 10 - The estimated cost is again understated because only 48 sites are assumed.

1.3.4 The Public, The third paragraph should include the revised data and read: " Based on generation of 292,100 million net kilowatt hours of electricity by nuclear reactors and a generating cost of about 3.3 cents per kilowatt hour (DOE's Annual Energy Review, AorTT 1984 and DOE's Update - Nuclear Power Program, September 1984), the industry spends about 9.6 billion to cover nuclear generating costs." Underlined portions indicate changes. The next sentence in that paragraph expresses implementation and maintenance costs as percentage increases of the total nuclear electrical generating costs.

i This could confuse some readers as the percentages are rather small, but do represent some nontrivial costs.

Page 18 - Industry (savings per site) are incorrect. The existing plants will have no cost savings associated with licensees establish-L

' ing a reciprocity program, not savings of $190K as indicated.

This is because the proposed rule waives the background .

investigation requirement for persons employed prior to the effective date of the rule. As for new plants, the estimated savings per site per year should be reported as net savings of

$150.0K (page 6), not the $190K indicated here.

4 II. Search Requirements Rule Page 1 - The analysis uses 48 sites, understating the costs.

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Page 2 - NRC's future annual operating costs should be discounted.

While paperwork cost burdens do not appear to be a significant

' cost component, statutcry consideration requires that they be addressed. A statement to the effect that none or only a minimal paperwork cost b'urden is associated with this proposed change should suffice.

The assumption of six p[ ants per year is not valid. See our comment concerning Page 4 of the first analysis. The costs described under Industry Operations are actually implementation costs.

III. Miscellaneous Safeguards - Related Amendments This action has five objectives listed in 1.1 Descriotion. However, under 1.3 Value/Imoact of Prooosed Actions, no mention is made of objectives (iii) " Permit the supervision of safeguards measures during safety emergencies."

Page 6 - The estimated cost is again understated because only 48 sites are assumed.

Page 7 - Under 1.4 Decision on the Proposed Action, a benefit of.the amendments is said to be " lower costs to fully implement NRC regulations regarding reactor safeguards." However, the costs and savings presented in Section 1.3 sum to over $800K per unit, therefore it is not clear where the " lower costs" are occurring.

It appears that paperwork considerations are not a large cost burden for the miscellaneous amendments but a statement under 2.5 Statutory Considerations indicating such would be beneficial.

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