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MAY 151955 MEMORANDUM FOR: Robert B. Minogue, Director Office of Nuclear Regulatory Research i l
FROM: Edwin G. Triner, Director Division of Budget and Analysis Office of Resource Management
SUBJECT:
REVIEW OF CRGR REVIEW PACKAGE OF PROPOSED REGULATORY GUIDE 1.99, REVISION 2 The Cost Analysis Group (CAG) has reviewed your memorandum (with enclosures) to Victor Stello, entitled "CRGR Review of Proposed Regulatory Guide 1.99, Revision 2, Radiation Damage to Reactor Vessel Materials." We note that this CRGR review package contains two reports prepared by the CAG. The first (Enclosure 7), detailed our coments on PNL's draft value-impact assessment, and the second (Enclosure 8), provided a refined estimate of the replacement energy cost penalty.
In the context of the current CRGR package, Enclosure 7 is now anachronistic.
Specifically, our Enclosure 7 provided detailed cements and concerns with PNL's draft Value-Impact Analysis of September 1984. That draft has now been replaced with a final PNL report which has incorporated most of the concerns we identified and has been included as Enclosure 6 in the CRGR package. To an initial reader, most of the issues we raise in Enclosure 7 would now appear either misplaced or in error. We therefore recommend that the attached state-ment be affixed to the front of Enclosure 7 of the CRGR package in order to clarify any inconsistencies that may currently exist.
Notwithstanding PNL's revisions, the CAG still maintains that its plant specific replacement energy cost estimates (enclosure 8) are a far more accurate depiction of the principle cost impact and should be adopted in the regulatory analysis. Our estimate, of $70,742,000 was based on a 10% discount rate which is the recomended interest rate for NRC regulatory analyses. An alternative estimate, based on a 5% discount rate is herein provided of
$121,846,000. This is in response to a coment submitted by NRR, and is in recognition that a 5% discount rate is frequently provided for sensitivity purposes.
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, Robert B. Minogue '!e also note that NRR provided RES with comments taking issue with the estimated start-up and shut-down times requirad due to the proposed revision.
CAG based its plant-specific replacement energy cost estimates upon the start-up and shut-down times provided by RES. Should RES desire the calculation of new plant-specific replacement energy costs in response to NRR's comments, CAG would be able to provide revised RES estimates in a timely fashion.
With the attachment of the Addendum to Enclosure 7 of the CRGR package, we concur in the proposed memo to V. Stallo.
Original signed by Edwin G.Triner IdwinG.Triner, Director Division of Budget and Analysis Office of Resource Management
Attachment:
Addendum to " Review of Cost Analysis Contaired in Value Impact Analysis for Revision 2 of Regulatory.
Guide 1.9E' cc w/ attachment:
P. Randall, NRR
!l. !! inners, NRR bec w/ attachment:
E. Triner, RM/B R. Shumway, RM/B-RM/B Rdg. File (5)
L. Donnelly, RM/BR >
a B. Richter, RM/BR)
RM/BR PAG Staff (5)
RM/BR Subj File - Cost Analysis L. Barry, RM R. Scroggins, RM N. Monaco, RM/BP L. Schaub, RM/BOS Disc Code: BRIAN 1 - 5/8 Minogue Memo "c>lR.M..
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1 ADDENDUM TO ENCLOSURE 7:
" REVIEW OF COST ANALYSIS CONTAINED IN VALUE IMPACT ANALYSIS FOR REVISION 2 0F REGULATORY GUIDE 1.99" This review provides comments on the September 1984 draft version of PNL's
" Proposed Revision 2 of Regulatory Guide 1.99 Value Impact Analysis." The reader should be alerted that subsequent revisions, as reflected in PNL's current version of the value impact analysis (Enclosure 6 of this regulatory package), have negated a number of the specific comments contained in this report.
However, issu.es we view as still being relevant are:
- 1. PNL's failure to use reactor specific replacement energy costs, and
- 2. PNL's failure to include savings in replacement energy costs from those plants having start-up and shut-down times which will be positively impacted.
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, REACTORCATEGORIES,COSTANDIMPLEMENTATION SCHEDULE FOR PROPOSED REVISION 2 TO REGULATORY GUIDE 1.12 This enclosure addresses the categories of reactors to which the proposed revision of the guide is applicable. Also described are the assessed costs to the licensee or applicant and recommended implementation schedules.
I. Reactor Categories The staff intends to use the proposed revision of the guide to evaluate the seismic instrumentation and maintenance procedures in all operating reactors, and construction permit and operating license applicants. The proposed regulatory position reflects the current NRC staff practice in use since September 1973 for instrumentation requirements and October 1974 (introduction of Standard
, Technical Specification) for most maintenance procedures. The " Plants Affected" section (Enclosure 8 - Paragraph I) summarizes the impact of the proposed guide revision.
1 If an earthquake were to occur near a nuclear power plant, the most useful information of the plant's response would be from the onsite seismic instrumenta-tion. An evaluation to determine if the Operating Basis Earthquake (OBE) criteria had been exceeded requiring plant shutdown, would be less credible without accurate and reliable data. No area in the United States can be eliminated from the consideration of the earthquake hazard. Strong motion earthquakes have occurred at U.S. nuclear power plants. The June 7, 1975 Ferndale Earthquake near the Humbolt Bay Power Plant produced the strongest earthquake motions to which a U.S. nuclear power plant has so far been subjected. The baseline -corrected peak acceleration developed in the free field (Storage Building) were 0.35g and 0.26g in the transverse and longitudinal directions respectively. The facility was designed for a horizontal SSE of 0.25g. There was no observed damage to the facility resulting from the earthquake motion.
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, The safety significance of installing the recommended earthquake instru-mentation is not related to safely shuting down the plant but enabling its safe operation by evaluating:
- 1. whether or not the design response spectra has been exceeded.
- 2. whether or not the calculated vibratory responses used in the design of representative Category I structures a,nd equipment has been exceeded at
- instrumented locations, and
- 3. the applicability of the mathematical models used in the seismic analysis of building and equipment.
, II. Implementation Schedule Except in cases in which the licensee pr'oposes an acceptable alternative
, method for complying with specific portions of the Commission's regulations, j the NRC staff intends to recommend that all licensees modify their technical specifications to make them consistent with the recommendations contained in the proposed revision to the guide. The staff recommends accomplishing this in two phases.
- 1. Phase 1 Install and maintain on triaxial time history accelerograph at each of the following locations:
(a) free field (b) containment foundation, and (c) independent Category I structures foundation where the response is L
different from that of the containment structure. ,
l Note: 1. If soil-structure interaction is negligible, a single instrument may be located on the " free field" or the containment foundation.
- 2. The option stated in Paragraph 4.1.6(2) of the Standard is acceptable.
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- 2. Phase 2 Install and maintain the remaining instrumentation (e.g., response ,
1 spectrum recorders, peak accelerographs, etc.) recommended by this guide.
The implementation of this guide will be established by the Division of
. Licensing, NRR, for each licensee based upon appropriate consideration of cir-cumstances. This should facilitate efficient use of utility resources.
l The backfitting of the first phase relates directly to safety significance.
The installed triaxial time-history accelerographs will measure and permanently record the absolute acceleration versus time at the instrumented foundations.
l This data will enable the utility (and NRC staff) to quickly determine if the 6
instrumented locations have exceeded the predetermined level of ground accelera-6 a I tion. The second phase of the backfit requirement is safety significant and also cost beneficial (see Section IV -Cost-Benefit Calculation) to the utility.
! Data from these instruments will show if measured responses exceeded those used in the design and whether or not the plant can possibly continue to operate.
Since the method ~ described in the proposed guide revision is being and will continue to be used in the evaluation of submittals in connection with applications for construction permits and operating licenses a phased implementation schedule is not proposed.
III. Assessed Cost Financial impact estimates related to the proposed revision to the guide are:
A. Plants receiving a full power operating license prior to Safety Guide 12 (March 1971).
- 1. Approximate number of plants - 16 l
- 2. Equipment purchase and installation. l Phase I - $50,000 Phase II - $100,000 i
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- 3. Engineering - $150,000 l h'
- 4. Maintenance and calibration - $15,000 annually.
B. Plants receiving a full power operating license after Safety Guide 12 and prior to proposed Revision 1 to Regulatory Guide 1.12 (September 1973).
- 1. Approximate number of plants - 11
- 2. Equipment purchase and installation.
4 Phase I - 0
,. } Phase II - $75,000
- 3. Engineering - $150,000
- 4. Maintenance and calibration - $15,000 annually.
J C. Plants receiving a full power operating license after proposed Revision 1 to l Regulatory Guide 1.12.
i 1. Approximate number of plants - 31
-l 2. Equipment purchase and installation, and'related engineering - $0
- 3. Maintenance and calibration - $15,000 annually.
D. Multi-unit sites
- 1. Approximate number - 19
- 2. Cost associated with first unit - see Category A, B or C as appropriate.
- 3. Cost associated with other units - unknown, depends if same seismic response is expected at other units.
IV. Cost-Benefit Calculation For purposes of doing a cost evaluation, the following assumptions are made:
- 1. the frequency of exceeding the OBE is one in 500 reactor years of operation,
- 2. there is a 40 year plant life,
- 3. days of downtime is defined as the possible minimum number of days a facility may be shutdown because the recommended instrumentation was not present/
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l working and the utility could not demonstrate that the design response spectra and the calculated responses at the instrumented locations had not been exceeded, and
- 4. the cost associated with downtime is $300K/ day. i l
Based on these assumptions a compariso'n of instrument and maintenance costs incurred for the remaining years of plant operation, and the number of days the facility must be shutdown to justify the expense is presented.
Downtime Number Years of Cost x of Days x Plant Operation Total
$K/ Day Down Remaining = Instrument and 500 Reactor Years of Operation /0BE event Maictenance Cost 1
Therefore, Totai Instrument Number of _ and Ma ntenance Cost x 500 Reactor Years of Operation /0BE event Days Down - Years of riant 300 K/ Day - Downtire cost Life Remaining Case 1 - New Plant o Years of plant life remaining - 40 o Total cost = $150K + $150K + $15K(40) = $900K Instruments Engineering Maintenance Number of " ($900K) (500)^ = 37.5 Days Days Down (40) (300K/ Day)
Case 2 - 5 year Old Plant o Years of plant life remaining - 35 o Total cost (from Paragraph III(c))
$0 + $0 + (15K)(35) = $525K Instr. Engr. Maint.
Number of _
($525)(500) = 25 Days Days Down - (35) ($300K/ Day) 5
Case 3 - 10 Year Old Plant o Years of plant life remaining - 30 o Total cost (from Paragraph III(B))
$75K + $150K + ($15)(30) = $675K Instr. Engr. Maint.
Number of _ ($675)(500) = 37.5 Days Days Down ~ (30)($300K/ Day)
Case 4 - 20 year Old Plant o Years of plant life remaining - 20 o Total cost (from Paragraph III(A))
$150K + $150K ($15K)(20) = $600K Instr. Engr. Maint.
Number of _ ($600?(500) = 50 Days Days Down - (20)(S300K/ Day)
Increasing the downtime cost from $300K/ day to $500K/ day reduces the " number of days down" calculation by 40%. The " number of days down" associated with cases 1 though 4 would be 22.5 days, 15 days, 22.5 days, and 30 days respectively.
Another approach is to consider the present value (PV) of the $15K maintenance s annu/ity. Using this approach, a discount rate of 10% and a downtime of $300K/ day is assumed.
Case Discount Maint. Cost Total Cost No. Days No. Factor (Factor x $15K) (Instr & Engr & Maint) Down 1 9.779 $147K $447K 19 2 9.644 145K 145K 7 3 9.427 142K 366K 20 4 8.514 120K 428K 36 l
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From the equation PV = 1 -(1 + r)g where PV is the present value of $1.00 received in "n" years at a discount interest rate of "r".
The installation of the recommended instrumentation is cost beneficial to the utility since the number of downtime days (as defined in assumption 3) would most likely exceed those specified above when one considers time necessary for plant inspections, possible analysis, and NRC staff, utility and public meetings.
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