ML20137B692
| ML20137B692 | |
| Person / Time | |
|---|---|
| Issue date: | 01/09/1986 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| References | |
| REF-10CFR9.7 NUDOCS 8601160037 | |
| Download: ML20137B692 (69) | |
Text
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ORIGINAL r'~
UNITED STATES OF AMERICA
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NUCLEAR REGULATORY COMMISSION In the matter of:
COMMISSION MEETING Briefing by TVA on I
Corporate Plan i
(Public Meeting)
Docket No.
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Location: Washington, D. C.
Date: Thursday, January 9, 1986 Pages:
1 - 62 I
i 8601160037 860109 PDR 10CFR PT9.7 PDR ANN RILEY & ASSOCIATES Court Reporters
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1625 I St., N.W.
i Suite 921 l
Washington, D.C. 20006 l
(202) 293-3950 t
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1 D i SCLA I MER 2
3 4
5 6
This is an unofficial transcript of a meeting of the 7
United States Nuclear Regulatory Commission held on a
1/09/86 In the Commission's office at 1717 H Gtreet, 9
N.W.,
Washington, D.C.
The meeting was open to public 10 attendance and observation.
This transcript has not been 11 reviewed, corrected, or edited, and it may contain 12 inaccuracies.
13 The transcript is intended solely for general 14 informational purposes.
As provided by 10 CFR 9.103, it is 15 not part of the formal or informal record of decision of'the 16 matters discussed.
Expressions of opinion in this transcript 17 do not necessarily reflect final determination or beliefs.
No 18 pleading or other paper may be filed with the Commission in I
19 any proceeding as the result of or addressed to any stafement 20 or argument contained herein, except as the Commission may 21 authorize.
22 23 24 25
f 1
1 UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY COMMISSION 3
4 BRIEPING BY TVA ON CORPORATE PLAN i
5 6
PUBLIC MEETING 7
8 Nuclear Regulatory Commission 9
1717 "H"
Street, Northwest to Peam 1130 11 Washington, D.C.
12 Thursday, January 9,
1986 13 The Commission met in open session, pursuant to 14 notice, at 10:05 o' clock a.m.,
NUNZIO J.
PALLADINO, Chairman 15 of the Commission, presiding.
16 COMMISSIONERS PRESENT:
17 NUNZIO J.
PALLADINO, Chairman of the Commission 18 THOMAS M.
ROBERTS, Member of the Commission 19 JAMES X.
ASSELSTINE, Member ot.the Commission 20 FREDERICK M.
BERNTHAL, Member of the Commission 21 LANDO W.
ZECH, Member of the Commission j
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STAFF AND PRESENTERS SEATED AT COMMISSION TABLE:
2 S.
CHILK 3
H.
PLAINE 4
C.H.
DEAN 5
R.M.
FREEMAN 6
J.B.
WATERS 4
7 C.
MASON 4
8 W.F.
WILLIS 9
H.S.
SANGER i
10 AUDIENCE SPEAKERS:
11 W.
COTTLE i
12 13
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[10:05 a.m.3 3
CHAIRMAN PALLADINO:
Good morning, ladies and 4
gentlemen.
This morning the TVA Board of Directors will briet 5
the Commission on the TVA Corporate Plan.
Earlier this week, 6
the Commission met with the NRC Staff to discuss the Staff's
?
TVA review efforts.
The meeting the Commission has this 8
morning is the first one that the Commissioners have had with 9
the TVA Board.
10 Their letter dated January 6,
1986 suggests that 11 TVA focus on two items, review of the history from TVA*s 12 vantage point, which led to the current situation on TVA*s 13 nuclear facilities, and identification of major issues as TVA 14 currently sees them.
15 We also would welcome any report status that the 16 Board may wish to make.
17 The Commission recognizes that TVA has a significant 18 amount of work underway and a significant amount of work to 19 do.
The Commission also recognizes that the Board of 20 Directors has just recently approved significant management 21 changes in the TVA organization.
Although TVA may not be able 22 to answer all our questions at today's meeting, the Commission 23 feels that today*s meeting would be very helpful in the 24 development of a common understanding by both of our agencies 25 of the problems.that we face.
1 Near the end of today*s meeting, I would like to 2
discuss when a tollow-up meeting with TVA might be held.
3 I understand that members of the NRC Region II Stati 4
are listening in on the telephone.
Let me ask before we begin 5
whother any of my fellow Commissioners have any additional 6
opening remarks that they would like to make at this time.
]
e.
7 LCommissioners responded negatively.]
8 CHAIRMAN PALLADINO:
Let me turn the meeting over to 9
Mr. Charles Dean, Chairman of the Board of Directors at TVA.
10 MR. DEAN:
Good morning, Mr. Chairman and members of 11 the Commission.
We appreciate this time on your schedule 12 today to discuss TVA*s nuclear program.
13 I am Charles Dean, Jr.,
Chairman of the Board of 14 Directors of the Tennessee Valley Authority.
With me are my 15 colleagues on the Board, Director Richard M.
Freeman, on my 16 left, Director John B.
Waters, on my-right.
Also at the table 17 with us is our General Manager, William F.
Willis, who is 18 right next to Mr. Waters, and Herb Sanger, our General 19 Counsel, and Charles Mason, the Deputy Manager of Nuclear 20 Power.
There are other key nuclear executives and statt 21 members with us today, back in the audience.
22 As each Board member personally knows and as the i
i 23 Commission is fully aware, the TVA nuclear power program is in i
24 great difficulty.
TVA*s performance has-deteriorated from a 25 position of leadership in the nuclear industry.
Each of the 4
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Board members recognizes the seriousness of the situation, and 2
the necessity for vigorous and effective steps to remedy it.
3 Each Board member is personally committed to restoring the 4
confidence of NRC, the Tennessee Valley Region, and the 5
nation as a whole in TVA's ability to safely and efficiently 6
operate its plants.
?
We have taken aggressive steps toward this goal, and 8
are giving first priority in our daily activities to the 9
nuclear program.
However, as one of the Ccmmissioners 10 remarked on Tuesday, TVA*s nuclear power problems did not 11 occur overnight and they will not be corrected overnight.
12 The common root cause of TVA's litany of technical 13 difficulties is management in nature.
One'of the most serious 14 problems in our view has been the failure of TVA to develop 15 and keep qualified managers.
We have lost fine talent.
We 16 have not developed additional talent that we need and now we 17 find ourselves with limited high level management and 18 operating experience.
19 Another problem has been the inadequate authority of 20 cur managers.
Clear lines of responsibility and 21 accountability have not existed.
The effects of this diffuse 22 management was compounded by an outdated organizational 23 structure.
24 An outgrowth of our management problem has been a 25 serious lack of communication between managers and employees.
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1 This has led to a tear by some TVA employees that intimidation 2
ann harassment by TVA managers will follow their raising 3
potential nuclear safety problems.
These perceptions existed 4
despite the Board's etterts to make it clear that it will not 5
tolerate the intimidation of employees expressing such views.
6 In the last year, the Board has supported major
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efforts to regain communication with and the trust and 8
confidence of our employees.
The Board has taken aggressive 9
action to remedy its management problems by bringing on board 10 a new top manager of the nuclear program and investing him i
11 with authority to match his responsibility.
12 In seeking a nuclear advisor to the Board, my 13 colleagues and I had met with Steven A.
White.
We were so 14 impressed with his reputation and credentials, insight into 15 our management problems, relevant experience and leadership, 16 that we determined to add him not only as an advisor to 17 the Board, but as te single _ executive with overall 18 responsibility and full authority for all aspects of the total 19 TVA nuclear program.
20 Steve White served with the Navy for 33' years and 21 retired after serving (5 a tour star Admiral in. charge of the 22_
Navy *s Material Command.
That Command consisted of 250,000 23 people and was responsible, among other things, for procuring i
24 the Navy's ships, including nuclear ships, aircraft, 25 electronics systems, shore facilities,-and other Navy e
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supplies.
2 He is a product of the nuclear Navy.
His experience 3
there ranged from serving aboard the Navy's first nuclear 4
submarine to serving as an assistant to Admiral Rickover, and 5
finally as Commander of 90 nuclear powered submarines.
6 We are very pleased to have Steve White as TVA's
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Manager of Nuclear Power, and he reports next Monday.
Steve 8
White comes to us for two years on an employee loan through 9
Stone & Webster Engineering Corporation.
10 To clearly define his role, we entered into a 11 written Memorandum of Understanding between Steve White and 12 the TVA Board of Directors.
It establishes.our mutual 13 objectives of providing TVA with management capability so that 14 at the end of two years, the TVA nuclear power program will be 15 improved and TVA will have enhanced capacity to manage the 16 program with permanent TVA personnel.
17 The essence of our Memorandum of Understanding is 18 that Steve White has responsibility and authority to manage 19 our overall nuclear program.
j 20 Some of the highlights are Steve White will have 21 direct authority and responsibility for the management, I
l 22 control and supervision of TVA's entire nuclear power program, i
23 including, but not limited to, the design, construction, 24 maintenance, and operation of all existing or planned TVA 25 nuclear power plants.
This includes authority to establish l
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management and operating. policies and procedures to TVA's 2
nuclear power program, including any aspect of personnel 3
management, development, and communication.
4 He has direct access to the TVA Board of Directors 5
and reports directly to the General Manager-and the Board of 6
Directors.
He may be removed only'by the Board.
7 Subject to reservations of authority to the.TVA 8
Board and General Manager, he is authorized to hire, remove 9
and assign both TVA and contractor personnel, and to redirect 10 and/or restructure the activities and functions of TVA offices 11 insofar as nuclear power activities are involved.
12 He has direct responsibility for providing nuclear 13 power program budget and financial information to the General 14 Manager and Board and for developing and recommending nuclear 15 power program budgets for Board approval.
16 The internal TVA activities and functions necessary 17 to the successful operation of the TVA nuclear power program, l
18 including the Nuclear Safety Review Staff, shall report to i
19 Steve White.
20 He is authorized and dirtoted.by the Board.to 21 cooperate fully with the. United States Nuclear Regulatory 22 Commission and any other agency, entity,. governmental or 23 otherwise, with jurisdiction over or interest in TVA's nuclear 24 power program, to ensure the safe, reliable and efficient j
25 design, construction,-operation and maintenance of-TVA*s
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nuclear facilities.
He will be responsible for all aspects of 2
TVA*s relations with NRC and other agencies and entities.
3 This should measurably improve TVA's communications with the Commission.
5 Steve White *s first effort will be analyzing over P
6 the next thirty days details of our most serious technical, 7
management, and communication problems.
At the end of that 8
time, he will report his evaluation of the situation and plans 9
for corrective action to the Board and to the Commission.
10 The Board is confident that its actions which I have 1
11 outlined will enable the TVA nuclear power program to meet the 12 high expectations of both the TVA Board and the NRC.
13 Mr. Freeman, would you like to make any comments?
14 MR. FREEkAN:
I would only say to the Commission 15 that I along with my colleague, Mr. Waters, participated in 16 the drafting and preparation of this statement.
We speak with l
17 one voice on this matter, in presenting our testimony, and in l
18 explaining to you the reasons we selected Mr. White, and the 19 charge and the power which we have given him to carry out the 20 responsibili'.ies.
21 MR. DEAN:
Mr. Waters, would you like to comment?
l 22 MR. WATERS:
Mr. Chairman, just to again underscore 23 and sign off of the statement as made by Chairman Dean.
I 24 would like to emphasize that while we are obviously pleased to u
25 have Admiral White in TVA*s nuclear power program, the I
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Commission should take interest in this, that the Board *s 2
total involvement in TVA*s nuclear program will continue.
I 3
am sure I speak for my colleagues in this matter.
We realize 4
our responsibility and we intend to continue to pursue it and l
5 to meet that responsibility and the challenge we face.
6 ME. DEAN:
Mr. Chairman, we know.that you have some I
t 7
questions for us.
We have tried to leave plenty of time for 8
that.
9 CHAIRMAN PALLADINO:
All right.
Thank you very 10 much, gentlemen.
We very much appreciate your being here 11 today.
I must say I am heartened by the appointment of a
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12 strong leader in your nuclear power program and wish you well 13 in making sure the program is carried forth.
14 I have several questions.
I will start with a i
15 couple of them and then turn to my colleagues.
If they do not i
16 cover any of the other items, I will cover them also.
17 My first question has to do with the responsibility i
18 and authority given to Mr. White.
You indicate he has to get 19 budget approval, and that is not surprising.
Must he come i
20 back to the Board for approvals of any other aspects of his 21 operations?
i 22 MR. DEAN:
There are what~
call codes-in TVA, that we i
23 apply to all offices.
Of course, the Office of Nuclear' Power 24 is an ottice which is a major portion of T V A'.
.The code l
25 requirements which are generic to all offices would certainly I
11 1
be applicable to Mr. White *s nuclear power operation.
2 For example, suppose he might want to remove someone
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3 that is a high level official in his organization.
That would 4
have to be approved up to the Board level at TVA.
He knows he 5
has our support and that would be most likely that we would go 6
right along with such a recommendation.
7 CHAIRMAN PALLADINO:
With regard to his taking hold 8
of the operation, you feel he has the authority that is 9
needed?
10 MR. DEAN:
Yes, sir.
He has the technical or the 11 written backing he needs, plus the moral backing of the Board 12 of Directors and the General Manager.
13 CHAIRMAN PALLADINO:
Let me turn to a couple of 14 other questions, and then I will turn to my colleagues.
15 Earlier this week, the Staff Advisor advised it has 16 been very difficult to communicate with the many different 17 people in TVA, particularly with people having specific 18 responsibilities.
There would appear to be no one person 19 responsible in some of these cases.
20 The Staff would like a TVA point of contact for each 21 of these major areas of concern.
Will TVA provide Staff a 22 listing of the personnel designated as points of contact?
23 MR. DEAN:
I understand your question, Mr. Chairman, 24 because I was fortunate enough to be at the briefing Tuesday 25 and then had some further discussions with Mr. Denton about' l
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this type of thing.
He said, for example, some time ago, TVA 2
came up to have a briefing on some welding issues, for 3
example, and there was no apparent spokesman for the entire 4
group.
I can assure you this situation will be remedied and 5
you will definitely have a key person clearly assigned to be 6
the spokesman on matters such as welding, for example, and 7
other key issues that the Statt is working with TVA on.
8 MR. FREEMAN:
I think we should add, however, 9
Mr. Chairman, that the decisions of the structure, 10 re-structure, so that we have an accountability within the 11 organisation will of course be Mr. White's responsibility.
I 12 have no doubt that given his experience, that he 'eill want the 13 same thing that you want, and that is for every given issue, 14 there is someone within the agency who is clearly responsible 15 to him and who can speak for the agency.
It will be his 16 decision, of course, to take those steps.
f 17 CHAIRMAN PALLADINO:
I think you are right.
He will 18 certainly have to be involved in this.
I was interested in 19 making sure attention to this particular item is given.
20 MR. FREEMAN:
We understand the issue very clearly, j
21 Chuck Mason on my left, has been concerned with the same 22 things, and has already indeed taken some steps in that 23 regard.
I do want to caution that we want to be careful as a i
24 board at this stage, not to be in a position of telling 25 Mr. White, who we have given a new charge.. what we expect him 4
13 1
to do in any specific sense.
That would be unfair to him, and 2
I think we do not want to do anything that will hamper his 3
ability to carry out the responsibility we have cast on him.
4 CHAIRMAN PALLADINO:
Let me turn to another 5
question.
Obviously, it would be better for the Staff to 6
interface with TVA prior to receiving TVA*s final submittals 7
on what ought to be done.
It is not in our best interest to 8
determine that TVA's approach has been unacceptable at the 9
receipt of a submittal 10 In this perspective, the Staff has indicated an 11 intention to work with TVA, as TVA approaches possible 12 solutions, as acceptance criteria are developed.
13 Do you feel you are getting adequate interaction 14 with our Stati?
15 MR. DEAN:
Yes, sir.
I personally don't deal as 16 much with the Staff as some of the people line Mr. Mason.
NRC 17 has a Task Force that is specifically assigned to TVA.
i 18 Mr. Mason, if you would like to amplify on your 19 relationship with that Task Force, it would be fine.
20 MR. MASON:
I think in the last couple of months, we 21 have seen a significant improvement in the relationship that 22 you are referring to, and getting our heads together, going 23 over various stages of development with the Statt before we 24 put the concluding report together for_ submittal.
25 I-think the welding meeting we had earlier this week
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is a good example of that.
The EQ inspections that are 2
ongoing now is another good example of that.
I am encouraged 3
by that type of support and involvement.
4 MR. FREEMAN:
I read the transcript and particularly 5
Commissioner Asselstine's comments and concerns, which I think 6
we share and which your question reflects, and that is that it 7
is our responsibility, of course, to go forward and solve our 8
problems and take the steps necessary.
It is also important 9
that 11 the Commission has reservations, the Staff has 10 reservations, that we know shout that early on.
11 I think as Chuck has reported to us, this meeting 12 on the welding, we came forward with a plan, and the Staff 13 will respond to that, so we will n o't be led down any garden 14 paths.
We appreciate that the Commission is concerned about 15 that as are we.
16 CHAIRMAN PALLADINO:
I think it is very important to 17 work as closely together in identifying the problems and the 18 criteria on which the problems would be resolved.
19 Let me ask two other questions and I will turn to my 20 colleagues.
21 In the new TVA organization, will the Nuclear Safety 22 Review Staff have the same responsibilities, or will their 23 scope of responsibilities be changed, either increased or 24 reduced, and will the line organization continue to be 25 responsible for implementing the NSRS finding?
a 33 1
MR. DEAN:
This is the type of thing that Mr. White 2
is going to have to review after he gets here, Mr. Chairman.
3 The NSRS will be --
4 CHAIRMAN PALLADINO:
In your statement I think you 5
said that 6
MR. DEAN:
NSRS will report to Mr. White.
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MR. FREEMAN:
How it works, of course, will be his 8
decision.
One of the things I am sure both we and you will be 9
interested in when he reports back to us in thirty days will 10 be that issue.
We have given him the authority to deal with 11 NSRS.
It will report to him.
How that relationship will 12 work, of course, is his decision.
13 CHAIRMAN PALLADINO:
In your statement, you referred 14 to the concerns of employees that they don't feel comfortable 1$
in reporting issues to management.
I gather you have taken 16 steps to try and improve that.
Nevertheless, at our last 17 meeting, I got the sense there is still concern on the part of r
18 employees.
I was wondering what further ettorts you might see 19 to improve the confidence that the employees have in bringing 20 itema to the attention of management?
21 MR. DEAN:
We have done some drastic things to 22 improve employee communications in this last year.
Surveys 1
23 indicate that the employee confidence in communicating in the l
24 line is much higher than it has been.
We are pleased with 25 that. -There always needs to be a place where employees feel
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they can sound off, as-it were, outside of the normal line-2 relationships.
Coincident with Mr. White coming aboard, we 3
are appointing at TVA an Inspector General, who is responsible l
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only to the Board and to Congress, who will offer yet another 4
5 hotline nochanism for any employee about any issue, to sound 6
off and have it properly investigated.
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MR. WATERS:
Mr. Chairman, I would like to expand on 1
8 that if I may.
We realise in TVA that we h'a v e to earn the l
9 respect and the acceptance of a number of groups.
One is this 10 Commission.
We realise also that we must conduct ourself from 11 now on and in the future so that we do earn the confidence of 12 our employees in that they feel secure in expressing valid l
13 concerns, that they are not worried about being intimidated or I
14 harassed.
15 We realise that we have had a problem in-that.
The 4
4 16 extensive survey at Watts Bar showed us how very serious and 17 how widespread this problem was.
The numbers were surprising 18 to us.
They shocked us.
19 We entered into p'rocedures that we thought to h' ave 1
20 and to thoroughly analyse these complaints.
We are still 21 trying to fine tune'this mechanism so that we can respond to 22 these complaints, put them into the proper categories where i
23 they are safety related or non-safety related and make sure I
24 that if they are. applicable in oth'er places other than-Watts 25 Bar, that that concern is expressed and:then finally to j
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1 tdemonstrate in the future that a n'y employee a 't TVA need not 2
fear expressing a concern that is valid and expressing a 3
concern whether it is valid or not, that he will not suffer
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any intimidation or reprisal.
5 We have to earn that right, Mr. C airman.
I think
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. we are on the road back to doing it but we myst do it yet and t
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we intend to earn that confidence.l x
8 CHAIRMAN PALLADINO:
A related matter and I think 1
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9 this reflects possibly employee morale, at a recent 10 requalification program that the statt has undertaken where it 11 was performed, a large percentage of reactor operators and sa l
12 senior reactor operators didn't pass the requalification s.
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This, I think, gives us great,cause for concern and s.
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7 15 I was wondering to what extent this is due to insufficient l
I 16 t' raining or insufficient repetitive training or is it s
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'sy employees?
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19 MR. DEAN:
We are as concerned as you, Mr. Chairman,
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20 about that.
I had a conversation this morning with Mr. Bibb s.
21 who is our site manager at Browns Ferry where this test was s
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?'given.
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24 yet because we have not received all of the information we 25 need to do it, but we are trying to study the nature of the t
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i test, where the breakdowns were, the nature of the population
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2 of people that took the test and I can assure you we will be 3
prepared to discuss this with you in some detail later on.
4 Hight now we are still in the preliminary stages of 5
trying to analyze the situation and I think that you need to 6
know, we all need to know, what the root cause is and I can 7
just assure you we will have to come back to you on that.
8 CHAIRMAN PALLADINO:
All right.
We will be 9
interested further in the requalification and the training 10 program.
11 MR. DEAN:
You can be assured that we are, too.
12 CHAIRMAN PALLADINO:
All right.
We will look 13 forward to hearing more about.that.
Let me turn to my l
14 colleagues and then depending on time, we will come to some 15 other questions.
Commissioner Roberts.
16 COMMISSIONER ROBERTS:
From the Chairman's statement 17 which you all have clearly said you support you point out some 18 problems, inadequate authority by managers, clear lines of 19 responsibility and accountability compounded by an outdated 20 organizational structure.
21 Now you have stated these problems.
Do I understand 22 that you are looking to Mr. White to provide some workable 23 solutions to those problems?
24 MR. DEAN:
Some of the problems have already been 25 attacked, Mr. Roberts.
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The organizational structure that is referred to, an n s I
2 example of that would be+the ctact that up until fairly s
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recently all of our engineers or essentially all of them 4
worked out of one central location in Knoxville.
5 An example of what we have done there is we have 6
assigned blocksiot engineers or actually moved them to the S
7 stations, the sites, whers they can have hands-on contact with 8
the material they are>actually designing and re-designing and 9
whatever.
10 That is a good exa ple of things that we have 11 already d o n e '.
We haven *t just been' sitting and waiting for 12 these changas.
There have been things done.
There may be 13 more things done but that is an example of things that we have 14 done.
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15 COMMISSIONER ROBERTS:
When does Mr. White report?
3 1
16 MR. DEAN:
Monday.
S.
c.
17 COMMISSIONER ROBERTS:
That is all I have.
21 8 CHAIRMAN PALLADINO:
Al1.right. ' Jim.
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k 19 COMMISSIONER ASSELSTINE:
Let me start with maybe a:
20 few comments and then I have,a few questions that follow along i
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21 the lines that Joe raised with you.
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22 Let me say a t-the outset that I had the-chance 23 visit'with you all a n d,'a number of' members of your staff when' i
24 I visited Watts Bar in Knoxville last month.
Ifwould say that, 1
25 there are a number of things.that I want-to highlight from 3
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that visit.
2 One of them was the conversation I started out with 3
with Bill Willis where Bill said that TVA's attitude now was 4
that we have to shake the tree, get all the issues out on the 5
table, make sure that we have all of them identified and once 6
and for all resolved.
7 That is what is necessary to restore the long term 8
health and stability of the program at TVA.
I think that is 9
absolutely right and I think that is just the right attitude.
10 We talked about that as well when I was down there.
i 11 I think we need to look at the past to make sure 12 that we do have all of those issues and to make sure that wo 13 don't make some of the mistakes that we did make in the past.
14 I think that applies to both organizations.
15 I have been fairly tough on you all and I think you 16 proL*bly agree with that and I have been fairly tough on us as 17 well.
18 I think when all of the evidence is out what we will 19 see is that many of the warning signs were there on a lot of 20 these problems.
We knew about them.
You knew about them.
21 Somehow or other, they didn't get fixed in the past.
22 I think the attitude that Bill espoused is exactly 23 the right one.
Let's make sure this time we all understand 24 them and that we have the effective-corrective actionsithat we 25 all want to see to restore this program to long term health' t
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and stability.
2 I think the management changes that you all are 3
making are commendable.
I agree with Joe's comment that in 4
bringinp in a new team that team will have to prove itself and 5
what we will be looking for is their performance.
I think 6
that is a step in the right direction.
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The Inspector General, I think also, is a step in 8
the right direction.
I don't know that individual but anyone 9
who can run the Washington office has to be a fairly capable 10 person.
I think that is a positive step.
11 I also have to say that many of the people I talked 12 with restored my confidence that TVA has many very capable and 13 dedicated people within its organization.
14 I was impressed with the operating staff at Watts 15 Bar.
I was impressed with the nuclear safety review staff 16 people that I talked with.
I think that is one of your 17 strengths and I agree with your assessmsnt that the weakness 18 has been tn the way those people are managed.
19 I also want to agree with the comment that Fred made 20 a couple of days ago and that Joe, you repeated in your 21 opening statement and that is that these problems occurred 22 over a long period of time and the solutions are not going to 23 come overnight.
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24 It is going to take a lot of effort on your part.
25 It is going to take a lot of effort on our part to make sure i
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1 that the solutions are there and that they are going to bring
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2 about a program that you and we and the.public can have 3
confidence in over the long. term.
4 I wanted to at least share those initial 5
observations with you based upon my visit and what I have seen 6
you have been doing over the past several weeks.
4 7
I recognize that a lot of today's. discussion 8
probably does have to be fairly preliminary particularly.in 9
terms of the program that you are. putting in place, the 10 corrective program, given the management-changes that you-have 11 made.
j 12 Let me pursue at least just a ~1ew questions to the 13 extent that we can at least at this first session.
14 One question I had was the status of the submittals t
15 that you have already made.
You have made submittals on 16 corporate plan, Sequoyah and the employee concern program.
I 17 take it you may want to at'least reflect on-those and review r
18 those with your management team.
What should we take the i
19 status of those to be?
20 MR. FREEMAN:
I think those are on hold until we i
21 report further to you and we suggested because Steve White had i
1 22 suggested that he felt that he needed 30 days after he arrived 23 to assess the situation and then we would hope.that you would
~
t 24 permit us to report back atlthat stage:and I think one has to i
j 25 say'that so:far.as the dates reflected'there, those are on i
fs I
F v
e T
e n
=
23 1
hold.
2 COMMISSIONER ASSELSTINE:
That would apply both to 3
the elements of the program and to the time tables of the 4
various plants?
5 MR. FREEMAN:
Yes, sir.
6 MR. DEAN:
They will all have to be reviewed.
7 MR. FREEMAN:
Chuck was saying he doesn*t anticipate-8 any major changes and that may be the case but again we don *t 9
want to be in a position of tying the hands of the person.we 10 have given responsibility to.
11 COMMISSIONER ASSELSTINE:
All right.
12 MR. FREEMAN:
It may very well be that there are not 13 major changes.
14 MR. MASON:
Let me make one comment about that.
We 15 are going to proceed on what we have told you in the 16 submittals and if takes two weeks for a change to be 17 identified, we are going to proceed until that change is 18 identified.
19 COMMISSIONER ASSELSTINE:
Fair enough.
20 MR. FREEMAN:
We are not stopping the music.
I 21 assume you understood that.
22 COMMISSIONER ASSELSTINE:
You are continuing on 23 the same program but at least as far as these are the elements 24 that we think have to be_ done and once these are done we are 25 satisfied and-here is a time table where we think we'will have
s 24 1
those conclusions.
That part at least is on hold.
2 MR. DEAN:
There is one cautionary thing and it is 3
underlined in the comments that Chuck made.
Let's just say 4
that we have certain elements of our environmental 5
qualification program that we expect to have done by January 6
15th.
7 That is a good goal it it is or it isn't but it is a 8
goal that is important in trying to make that goal is an 9
example of what I am talking.about.
10 COMMISSIONER ASSELSTINE:
I also had a question.
11 One of the things that I did when I was in Knoxville was to 12 meet with the nuclear safety review stati as you know.
13 They gave me a presentation both on their structure 14 and organization, how they were approaching their role in the 15 employee concern program and they also gave me a list of their 16 perceptions of the status of the Watts Bar plant.
17 When I came back I gave that to the staff and they 18 were sufficiently concerned about that to ask you in a 19 50.54(1) letter whether TVA as a whole agreed with those 20 perceptions of 11 not, what their view was particularly as to 21 compliance with their quality assurance regulations.
22 I wondered 11 you had a view at least at this point 23 on that question.
24 MR. FREEMAN:
We have-a formal request which we of 25 course will respond.
We have had the-same presentation that
25 1
you had from the safety review staff and obviously the line 2
and the safety review staff on this issue do not agree and 3
that is a corporate. issue that we will have to present back to 4
the Commission.
4 5
COMMISSIONER ASSELSTINE:
All right.
6 MR. DEAN:
Mr. Denton, of course, signed the letter 7
and we talked to him, I did when we were up here.the other 4
8 day.
He did agree that it was reasonable, that the initial 9
letter gave the time for the corporate response as being today 10 and he has agreed to give us a little more time and you should 4
4 l
11 know that.
12 We confirmed that conversation with a letter I 13 handed him this morning but we will certainly not, obviously 1
14 will not ignore the request.
We will as Dick said pursue it.
15 COMMISSIONER ASSELSTINE:
All right.
Good.
Perhaps i
16 you can't answer this question until you get a response to 17 that letter but if you can I would be interested in your 18 perceptions of the TVA quality assurance program perhaps not 19 as it applies specifically to Watts Bar but in general say l
20 looking back over the past six or eight years or so.
r 21 I remember after the Browns Ferry fire one of the 22 conclusions that I think TVA reachen and that we reached was l
23 that quality. assurance was a concern and that the kind of 24 quality assurance program that will lead to effective 25 construction and plant operations.wasn*t there at the time.
+
l I
{
l
t i
20 1
I would be interested in your views about whether 2
you think that has been a continuing problem or on-and-off and 3
since that time and perhaps even continuing to the prcsont.
4 MR. DEAN:
It still is of concern and probably still 5
needs improvement.
But getting back to a six or eight year 6
history, Mr. Willis, do you want to touch on that a little 7
bit?
8 MR. WILLIS:
I believe we have had problems going up 9
the scale and down the scale.
There have been times that wo 10 have had good programs and there have been times that the 11 program did not accomplish the total intent of the program.
12 We realize that we have to have some more intensity in the 13 program and make it work better.
14 The programmatic aspects of the program are probably 15 in good shape.
The tail end $1 the program, the 16 implementation of what comes out of that program needs 17 continual work.
That is one of the areas that we have 18 discussed with Steve White and the exact organizational 19 picture of QA in TVA where it can be most ettective to get the 20 job done.
21 One of the bigger problem areas that.we have to 22 address is having clear separation of'the QA responsibilities 23 and what is the responsibility in quality achievement.
Some 24 review of it recently has given us. indication that our QA 25 organization is maybe'too much involved in detail and not
27 1
enough in the assuring end of the business that they review
/
2 and test the program to see 11 it is meeting its intent and 3
getting the follow-up.
4 We have had good periods in the last six or seven 5
years and we have had periods where that didn*t appear to work 6
well.
We believe we do have a good program in place.
We
?
believe we have some further work to do in implementation of 8
that program to get the results of what we want out of it.
9 COMMISSIONER ASSELSTINE:
It strikes me that you 10 have two challenges and Joe, you mentioned that you thought 11 that the principal root cause of many of TVA*s difficulties 12 were the management problems.
13 It strikes me that management problems are certainly 1
14 there and they have to be attacked but the other part of the 15 coin or the other side of the coin is to then identity the l
16 consequences of the management weaknesses, those areas where
,l 17 there may be technical deficiencies either in operations of 18 the plant, in the operating plants or in the construction of 19 the plants that arose out of the management weaknesses in the l
20 past.
I 21 I would be interested in your sense for how far 22 along you think you are An identifying those hardware and 23 personnel consequences of the management weaknesses in the 24 program and 11 you could give me some examples of some of the 25 more significant ones that you have identified so far that you l
t
a 28 j
l 1
think have to be addressed.
l
,f 2
MR. DEAN:
I think that would be a good question for 3
Mr. Mason to discuss.
l l
4 MR. MASON:
I think that varies from site to s'i t e.
1 5
One good example of a consequence of a management ability in 6
pursuit of excellqnce if you want to use those words is 7
configuration of management.
8 COMMISSIONER ASSELSTINE:
Yes.
9 MR. MASON:
At Browns Ferry the problem in 10 configuration of management is significantly more severe than I
11 it is at Sequoyah and it is different also at Watts Bar.
12 That is an example of I think a result that we are j
4 13 attacking with vigor and we are going to pursue corporate wide j
14 as well as the specifics that are involved at each plant.
i 15 COMMISSIONER ASSELSTINE:-
Yes.
16 MR. MASON:
We are going to examine several 17 different areas in that regard.
I think most of our major 18 technical problems you can see significant differences between 19 plants and between different groups of the engineering 20 organization.
21 COMMISSIONER ASSELSTINE; The employee concern r
22 program I guess is one obvious way of trying to identity some 23 of the technical concerns that have arisen from the management i
24 problems of the past.
t 25 Are there other ways that you are pursuing those i
e
+
29 1
1 other than the employee concern program?
r 2
MR. MASON:
We have had a lot of people look at us 3
particularly in the last six months.
We have had INFO and 4
Stone and Webster and Bechtel and NRC, of course.
We think we 5
have pretty well gotten to the point now, the INFO corporate 6
evaluation for example I think identified pretty much the same 7
areas, same major areas, configuration of management, lack of 8
accountability, that sort of item that the NRC statt had of 9
course picked up on earlier and that also some of the other 10 groups had looked at us including the categorization of the 11 employee concerns indicate in these same areas that we have i
12 signit'icant weaknesses.
13 COMMISSIONER ASSELSTINE:
How many 50.55te) reports 14 have been filed as a result of the employee concern program so 15 tar?
16 MR. MASON:
I can*t answer that question i
17 specifically but I will ask Willie Brown it he might know on i
18 Watts Bar.
19 MR. COTTLE:
I believe I can answer the question 20 with an approximation.
21 CHAIRMAN PALLADINO:
Please stand up and identity 22 yourself.
23 MR. COTTLE:
I"am Bill Cottle, site director at l
l 24 Watts Bar.
There have been out of the concerns that we have l
l 25 reviewed thus far there have been approximately 20 issues on
a 30 1.
which non-conforming reports'have been generated either 2
directly as a result of the concern or a report that maybe was 3
identified and just ties in very closely with an identified 4
concern and that is out of some, I believe, 200 concerns that 4
5 have been really looked at and the generic review of the K 6
forms.
7 I don *t have the exact figures on 50.55(e)
I would 1
8 say probably on the order of eight to ten of those reports 9
have resulted in a 50.55(e) type reports.
2 10 COMMISSIONER ASSELSTINE:
The 20 NCR*s are your 11 internal NCR's?
i 12 MR. COTTLE:
Yes, sir.
j I
13 COMMISSIONER ASSELSTINE:
All right.
The perception 1
14 that we received from the statt on the employee' concern 15 program is that a very high percentage like over half of those 16 concerns are proving out to be valid technical concerns.
Is l
17 that your understanding as well?
18 MR. FREEMAN:
Yes, it is running about 50-50.
19 Sometimes a concern is substantiated but it has no 20 consequences.
21 COMMISSIONER ASSELSTINE:
Right.
22 MR. FREEMAN:
We are measuring substantiated ones at 4
23 about 50-50.
24 COMMISSIONER ASSELSTINE:
All right.
I was pleased i
25 to hear the discussion with Joe.on the one person from each
^
m.
- m. -
=
31 1
side question in terms of resolving significant issues.
It is j (
2 one I had raised on Tuesday.
I think the burden is on us as 3
- well, 4
The way the system will help work effectively is it i
5 we also have one person you can turn to on significant issues 1
6 and that person can speak for the NRC.
I think you a.11 do not 7
have a monopoly on that problem in terms of identafying who 8
speaks for the agency.
9 CHAIRMAN PALLADINO:
May I make one other comment, 10 Jim?
11 COMMISSIONER ASSELSTINE:
Sur.ely.
12 CHAIRMAN PALLADINO:
I think this has to extent.to 13 include interactions with contractors--
1 14 COMMISSIONER ASSELSTINE:
That's right.
15 CHAIRMAN PALLADINO:
-- when contractors speak for 16 TVA.
I 17 COMMISSIONER ASSELSTINE:
On both sides.
18 MR. FREEMAN:
That has been part of our problem as i
19 well.
Chuck Mason has made great progress on our side in i
20 getting project managers from our side so there is one voice.
21 We still have some progress to make.
l 22 COMMISSIONER ASSELSTINE:
I had a couple of
(
23 questions on intimidation and harassment and then maybe 1 24 will stop for a while and let Fred and Lando ask some 25 questions as well.
i r.
.-.-.._v..,.
=
32 1
I would be interested in your perceptions of what
(
2 you found in terms of past activities on intimidation and 3
harassment and also on the employee concerns that you have 4
received in that area.
Are those likewise proving at least a 5
high percentage of those, are they also proving to be valid 6
concerns.
7 MR. DEAN:
Let me ask Mr. Sanger to earn his lunch 8
by discussing that, Mr. Asselstine.
9 MR. SANGER:
I hope I can do more than the lunch 10 that is provided.
11 (Laughter.)
12 MR. DEAN:
A box lunch at that.
13 (Laughter.)
14 COMMISSIONER BERNTHAL:
You mean you are letting 15 your people eat lunch right now?
16 (Laughter.)
17 MR. FREEMAN:
Only the Board doesn't get lunch.
18 (Laughter.)
19 MR. DEAN:
John Waters doesn't think we get anything 20 else.
Go ahead.
21 MR. SANGER:
We had a total of 96 complaints.
We s
22 have completed investigations of 15 of those.
We have two 23 additional that we will release this week.
We have nine more 24 that are substantially completed.
So that is the range that I 25 would make my conclusion from.
l
b a
33 1
As the Commission knows to do those investigations 2
properly it takes a great deal of time, you have to be very 3
careful.
We want, of course, to assure that the Board's 4
policy of having employees feel able to express their views is 5
turthered in our investigations.
6 We also have to be sure that the investigations are 7
fair to those against whom charges are made.
8 I personally spent a great deal of time with some of 9
the Commission people including Ben Hayes and we discussed 10 thoroughly with them how we do it.
We have showed them all of l
11 our reports.
i 12 Of the 15 completed reports, I reported to the Board 13 that there was one case of what I thought was clear i
14 intimidation.
That manager's termination has been proposed.
15 The reason I say proposed as you know, this particular i
16 individual was a veteran and there are certain kinds of notice ll 17 and appeal rights that go along with that.
18 In other cases I reported to the Board that some 19 managers I thought while not harassing employees had failed 20 to carry out the board's policy and I suggested to the Board 21 the appropriate management action that could be taken with i
j 22 regard to those people.
l 23 I did not find intimidation in those particular 24 instances but I thought something should be done with the 25 managers to have the Board's policy better understood, better t
=
34 1
expressed and better applied.
2 Some of the cases involve using the system.
I will 3
give you an example or a couple that I think are the best 4
examples.
One employee was working for us and was collecting 5
unemployment compensation at the same time.
The employee was-6 fired.
Indeed, those kinds of things have to be reported to
?
the appropriate prosecuting authorities.
The person was 8
prosecuted.
That person still claimed intimidation.
There
~
i 9
was simply nothing to it.
10 Another instance was some employees had bandied i
11 together with some national groups and were making claims of 12 exemption from federal income tax responsibilities.
Those are r
13 frivolous kinds of claims.
14 So what I would say to you is that we have found 15 some harassment.
Action is being taken.
We are doing this 16 in a very fair way.
We have an independent contractor who is 17 actually gathering the information.
We review the information l
18 in my office and 11 it is adequate, we will make our 19 determination.
It it is not, we send it back to the f
20 contractor for additional work.
21 The reason we did it that way was to try to assure 22 employees that they could fully state what they want.
I think 23 it is working well.
I am sorry that we have not completed the 24 96.
We can't do it thoroughly in that time but we will do it.
25 I will assure the Commission of this.
Whatever we i
4.
i 35 i
i i
find will be reported.
I think the employees have confidence 2
in that.
Indeed a good number of these employees after the 3
information is given to my office, for example, have expressed 4
their willingness to have their identities disclosed and I 5
think that is a good sign and I think that is a sign of 6
progress in the ettort.
7 COMMISSIONER ASSELSTINE:
Do you see any evidence 8
that there are continuing problems say over the past year 9
where there may have been instances of intimidation or i
10 harassment of employees within the TVA organization for 11 raising safety concerns?
12 MR. SANGER:
I think unfortunately that a good deal 13 of our problem related to a past incident and was a carry-over 14 of the past incident.
That is the DeFord matter.
We 15 corrected that including acting unilaterally on our own with 16 regard to some other people who were involved in that in 17 taking corrective action.
18 COMMISSIONER ASSELSTINE:
Any complaints though 19 within the past say year or so?
20 MR. SANGER:
Yes, we have had complaints.
21 COMMISSIONER ASSELSTINE:
All right.
22 MR. SANGER:
Six years ago the TVA board on its own 23 and I was there and the TVA board initiated on i ts own 24 volition this policy of encouraging employees to express their i
25 views.
e
36 1
I have always had very strong support in the work
/-
2 that I have done in investigating that from the Board.
Some 3
of that did not carry through to management.
I have reported 4
that to the Board and I have had the Board's strong support in 5
the actions that I have recommended.
6 As you know, it doesn*t particularly enhance my 7
popularity to find that other managers have harassed.
That 8
is what we have done and that is what I am directed to do by 9
the Board and I will do that as long as that is my direction.
10 COMMISSIONER ASSELSTINE:
Have you sorted out what i
11 the new Inspector General is going to do in terms of the t
12 continuing of that?
13 MR. FREEMAN:
He will take over that responsibility.
4 14 COMMISSIONER ASSELSTINE:
All right.
15 MR. FREEMAN:
Which the General Counsel cheerfully 16 relinquishes.
17 COMMISSIONER BERNTHAL:
I am sure.
18 COMMISSIONER ASSELSTINE:
You mentioned that you-19 have made a lot of efforts over the past year and I have seen 20 some of those in trying to sord a message to people that the 21 Board and senior management within the TVA organisation is 22 interested in hearing concerns that employees have and that 23 employees who have raised concerns are not going to be harmed 24 or adversely atiected and that the Board is not going to 25 tolerate that.
l l
l
a 37 l
t i
How well do you think you are doing in getting that
{
2 message across and how are you gauging the change in attitude 3
from say about a year ago when you had a sizeable percentage 4
of the employees at Watts Bar saying, "We don't think that we 5
can safely raise the concerns that we have."
6 MR. DEAN:
As I mentioned earlier, I touched on it, i
7 We have conducted surveys of employees at the various sites l
8 and they are randomly selected, anonymous and they are very i
9 encouraging.
I will see to it that you get a copy of that 10 information.
11 MR. FREEMAN:
That does report progress.
12 MR. DEAN:
It does indicate a considerable I
13 improvement in employee confidence and that type of thing.
I 14 might mention on this same general subject, you and I had a r
15 discussion not long ago about the way you handle this.
As 16 Herb Sanger correctly pointed out, we have always had policies 17 that encouraged people to speak up.
f 18 We are trying to improve the way that you handle 19 these differing opinions which is something the'NRC has i
20 addressed.
It is one thing to speak up but then what do you 21 do siter the speaking up is done.
22 We are moving to get a little better fix on how you 23 handle differing opinions.
What you heard the other day with 24 the NSRS will be a different opinion from what somebody else 25 will have and that has to be handled in a very clean, i
l
~. =. -_-
s'
~
38 1
objective manner.
We are working on that, too.
2 COMMISSIONEN ASSELSTINE:
Why don't I stop there?
3 CHAIRMAN PALLADINO:
All right.
Fred?
4 COMMISSIONER BEENTHAL:
We occasionally have 5
dittering opinions on how to handle things at the table here i
6 even, that we've learned how to handle.
r
?
CHAIRMAN PALLADINO:
Oh, nol 8
[ Laughter.J 9
ME. DEAN:
And.we always agree.
10 MR. FREEMAN:
We agree on the important things.
4 11 COMMISSIONER BEENTHAL:
I just wanted to say that I 12 concur entirely with the comments that the Chairman has made i
13 and that Tom, Jim, and I guess all'of us have made or will 1
j 14 make, that I think you've taken an extremely significant and l
15 eminently appropriate step in bringing on an individual of the 4
16 credentials and talent and management ability of Admiral 4
17 White, and I have little doubt that you.and we are going to 18 see our way out of this within;some reasonable period of time i
l 19 here.
20
[ Comuni s s i on e r Roberts leaves the meeting r o o m.']
1 21 I might mention that in 1979, in June, a date that 22 was not chosen by accident, as I'm sure you know, I toured all 1
23 of the TVA nuclear facilities, now seven: years ago or whenever-24 it was -
close to that, I guess -- and came back't'o 25 Washington with the general impression that I believe many 4
f
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-,s
,-,.,e--
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-,.- - +-
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i 39 1
people had, including many people in the NRC, and I think 2
justifiably had, that Tennessee Valley Authority was one of 3
the leaders, 11 not the leader, in strong and forward-looking 4
nuclear programs.
5 I was particularly impressed at the depth of the i
6 talent and the experience and capability of the personnel, as
?
I guess Jim has mentioned as well He was impressed more 8
recently with that.
And I have to relate that, although I 9
have visited a number of TVA facilities since that time, in 10 August I was down to visit the training facility again for the 11 first time since 1979, down in Chattanooga, and then also 12 later on went out to Sequoyah, but partly tc accommodate some 13 of our friends in the media, I made the mistake, I guess, of 14 having a press conference before I actually toured the 15 facilities, because they preferred it that way, and in that f
16 press conference, once of the things that, quite frankly, I 17 had forgotten over the years, I guess, or since the last time, 18 at least, that I had done a tour of the training center and 19 some of your institutional facilities down there, was the 20 strength that does exist within the TVA organization, and that i
21 strength is still there.
22 You have, as you know better than we do, you have a i
l 23 tremendously impressive capability down there.
It's an 24 organization that's 30,000 strong.
You have an engineering 25 staff that's certainly second to very few, if any, in the l
40 1
country.
And so all of the pieces are there, and again, I'm
'/
2 encouraged that with this latest management decision now, that 3
those pieces will begin to fall back into place, as they once 4
were.
4 5
With that background, I'm curious, though, to know 6
whether the Board has sat back I'm sure you must have a i
f 7
number of times by now and reflected on how we got into 8
this situation.
9 I have to say that the letter of Congressman 10 Dingell, which has been fairly wc11 publicised by now and a
11 which we've all read more than once, some of us, I guess, 12 takes some issue, for example, with the NRC's role in all of 13 the ditticulties that you've experienced over the last few 14 years.
And to the extent that Chairman Dingell is right i
15 and I think there is an element of truth in some of the i
16 points he makes to the extent that he*s right about the 17 NRC's role, I suspect that, for our part at least, that this 18 situation developed, in part, because of a kind of incredulity 19 that this could be happening to an organization as strong as 20 TVA, and I suspect the Board has felt that way from time to f
21 time as wel1, f
22 But all of that aside, could you give me any comment 23 cn that?
Have you thought very much about how we got into 1
24 thist i
25 One of the issues, of course, that's been raised is i
r.
,.~.
41 1
the salary issue, but I suspect that*s not all of it.
I don *t
/
2 know if you have any broad commentary you could otter or not.
i 3
How did we get into this situation?
4 MR. DEAN:
There is a possibility that because of 5
TVA*s leadership as a pioneer in the nuclear business, which 6
goes way back even before your visit in 1979, there is a 7
possibility that the people charged with nuclear operations in 8
the agency were perhaps less responsive to outside supervision 9
and regulation than some utility that might have been younger, 10 getting into it, might have been.
11 I think that may be a piece of the situation.
And 12 there are other pieces.
13 Browns Ferry is certainly a way before TMI plant, 14 and it is a plant thtt has required considerable modification,.
l 15 and it*s a three-unit plant, and they're not as easy to run, i
16 and modifying a three-unit plant while you're running at.the 17 same time is a very complex matter, and that has posed its own 18 set of problems.
19 Sequoyah is something of a ditterent world.
It*s a 20 tairly new plant.
It has a good running record.
Sequoyah was 21 a case where the EQ situation slipped up on us.
There were 9
22 groups within TVA that telt that our EQ was in good shape.
23 There were others that thought it was suspect.
An outside i
24 group was brought in and said, "You*d better go back and redo 25 revisit the scene."
42 1
So Sequoyah, we*ve got, in essence, several you
(
2 could say several nuclear programs.
The Browns Ferry program 3
is one situation; the Sequoyah. situation is somewhat 4
different, and I think this, you know you could probably 5
write a good book, Mr. Bernthal, on all the various things 4
6 that happened.
I'd like to think that we still have a lot of, 7
as you pointed out, a lot of competent people, and we're i
8 getting our act together.
9 MR. FREEMAN:
As someone, I. guess, who was the only 10 person here who was there in 1979, let me give you my 11 observations, for whatever they're worth.
12 We*ve all agreed, I think, that it is a management 13 problem that needs its managers.
We did, indeed, have l
14 tremendous attrition of top talent.
Most of the reason for 15 that attrition was salary; not all, but most.
16 But more seriously, we could not. bring in outside 17 talent, which I think overy organisation needs, especially one 18 as old as we are.
We're 52 years old.
You must bring in an 19 infusion of outside talent, and we were not able to do that 20 within the salary structures in Nuclear.
We were able to do 21 it in many other areas, but not in Nuclear, so that we lost 22 good people because of salary.
We were unable to track talent 23 from outside, which we much needed to give a better mix, so 4
^
24 they weren*t so ingrown.
25 Certainly, the Chairman *s comment about some of the f
l
~
43 1
attitudes with r6ppect to regulation and outside, quote, 2
" interference," unquote, I think were there as well.
3
[ Commissioner Roberts reenters the meeting room.3 4
MR. FREEMAN:
And finally, part of it was structure, 5
and if I may be permitted a personal note, in June, that same 6
month of 1979, my colleague, Dave Freeman, and I appeared 7
before this Commission none of you were then present, of 8
course to report on the steps we were taking after Three i
9 Mile Island to improve our nuclear performance.
1 10 We had a Blue Book, presented it, and explained it, 11 and we were with the Commission for about an hour.
We were 12 very proud.
I think it we had carried out most of those 13 things in the way we had outl'ined them, we would not be in the 14 situation that we're now in.
15 But to give you an example of one of the timid steps 16 we outlined, at that stage, 1979, our engineering organisation 17 did not have a separate nuclear branch, an ottice as a 18 division and a division as a branch.
This report recommended 19 that we establish a separate nuclear branch within our 20 engineering organisation, and we thought that was a bold step, 21 Of course, that was not a bold step.
It was not a 22 bold enough step.
We're now establishing a nuclear ottice, 23 which will have divisions and branches within it.
24 So in part, it was structural, and our failure as a 25 very large engineering organisation to get our structure in
_ _ ~ - -
l 44 1
line and have the managers and the talent needed to move 2
forward.
3 MR. WATERS:
Dr. Bernthal, I can't. resist i
4 contributing a little bit to your question, even though I've 5
only been on board a little bit over a year.
6 But I live in Severe County, and I remember when f
7 World War II was on, and President Roosevelt told TVA to 8
provide the power for the Manhattan Project at Oak Ridge, and i
9 TVA built the dam in my county, Douglas Dam, in eleven months, I
10 and it was generating electricity, an engineering test that 11 was almost unheard of then and certainly now, never to be 12 repeated, probably, j
t I
13 And this was, I think somewhat tells the kind of 14 people that were at TVA.
You know, they'went in, and they got 15 the job done.
and I say, I know it*s unfortunate i
16 Unfortunately 17 other people made the change.
For some reason, TVA, long 18 before I got there, even though I was a TVA advocate and 19 admired TVA, because it had increased the quality of my life,_
i 20 but some reason or another, you can*t build a nuclear plant 21 that way.
I know that now.
It's been --- I've had to learn j
22 that.
You can't send the troops in and move the earth and
[
1 23 pour the concrete and say, "Run it,"
and figure it out you 24 know, it something's wrong, 11x it.
It's finally, you know, 25 dawned on me that it must be somewhat comparable to building
s s
s s
45 b
5 s
1 0
1 an airplane.
You've got to know that it will fly before you
'A s
2 get it up in the air.
\\
E hard\\ lesson, I think, for the type of 3
And that's a 4
people we had, and, they -- we didn*t have that kind at 5
leadership and management that made that cha tie necessary, and i
i 6
wy had to learn it very, very ditticult.
It*s been 4
7 ditticult to learn, but I think we have.
8 And it sounds like an excuse, perhaps, and maybe it 7
s l
9 is, but I think that some at that mentality was part of the 4
i 10 problem, and maybe in a moment at just reflecting on what TVA 11 did, you know, there's a.little sympathy for it, perhaps.
i 12 COMyISSIONER BERNTHAL:
I appreciate the comments.
=
'13 I do have one or two more specitio questions that I wanted to J+
get to, if I can take a couple of minutes here.
1 s
..a l
15 The issue of salary has run through a couple of s
1
\\l 16 commentsgere.
As you know, this Commission commented to the 17 Congress on,the issue of salary last summer.
I would have k
k 18 preferred that th t comment,had been stronger at that time shssdeof
,i 19 than it was.
The salary was laid before the' Congress 1-l 20 by the TVA itself, as I recall, some years ago, and Congress i
l 21 has twice now, at least, rejected that as a significant issue.
i i
22 I think it's pretty clear, and has been for some 23 time, that that l 's a significant issue and is a contributor to it 24 TVA's ditticulties today.
23 I have a question about that, and I'd also like to
)
i 5
s s s
s u
t
4G 1
give you the opportunity to set the record straight, because I 2
think there have been a number of misleading media reports 3
recently about the size of the contract that*s associated 4
with Admiral White and his group, which is, after all, a 5
contract, as I understand it, with Stone & Webster, and I also 6
understand that there are other individuals that will be 7
working with Admiral White on that contract.
I 8
Could you give me some idea in that context and 9
you can set the record straight, as well, if you choose on the 10 issue of compensation -- but I understand that there are 11 several others coming in with Admiral White?
12 How many others will be working with that team?
13 It*s not just Admiral White, is it?
There are several others 14 as well, aren*t there?
15 MR. DEAN:
He has stated in the presence of some 16 members of the Commission, and in my presence, particularly 17 Tuesday when he was up visiting around some, that he intends a
j 18 to bring in five or six people, not all from Stone & Webster, i
19 but from wherever he thinks he can name them, but I know I
20 one is from General Electric.
They're from different places.
l 21 And those people will not be he*s not j
they won *t be line i
22 TVA people.
They will be to help him assess the situation.
23 They won *t be here, many of them, more than a few weeks, and 24 he will use them to prepare his initial review of the 25 situation we find ourselves in,. which you will be -- which he
1 47 1
has agreed to share with the Commission, of course, and the 2
Board when it's done.
3 Those will not be he has made no proposals for 4
any other fulf-time TVA employees, none whatsoever, until he 5
finishes this initici review, and those are not people that he 6
says he'd do well to get thess apeople at all.
One of them is 7
the chief engineer for the General Electric Corporation, I
8 mean, you just don't get that guy to come in on a very 9
permanent kind of basis.
But he's going to help him put 10 together this initial evaluation.
11 Now we have contracted with Stone & Webster for the 12 services o1 Admiral White, and if he wants some other people 13 from them -- and, in fact, one or two of the people he's going 14 to bring in initially will be some Stone & Webster people, 15 very high-level people, that will o'nly be here for awhile le they pay him out of the money we give them.
I do not know s
17 what they pay him.
He's on contract to them.
18 We have another contract with them that releases him a
19 to us, and he, as far as foreall intents and purposes, he's 20 just another office manager at TVA, but we have contracted for 21 his services for.t'wo years.
Our goal is, at the end of two 22 years, to have as many reactors running as possible and i
statie'd-with full-time TVA personnel - '
23 24 Now t he, ; s.a l a r y cap, the pay cI p, the Board has --
s J,
25-we've got many lumps to show for our comments on'that_
(
n 1
i j i- _,
- 4,4
-~. -
48 1
particular subject.
We have asked for permission to pay t
2 people more than we make in certain circumstances, a n'd somehow I
i 3
it just seems like that's a hard thing to get sold.
to stay with the' pay I
4 MR. FREEMAN:
We have not 4
cap for just a minute -- we continue and will continue to urge 6
6 j
6 the Congress to make the changes necessary so that we can
?
compensate people in terms of salary at a competitive level, i
8 Until such time as we are to do so, we cannot stand still, and 9
we are not, and with the help of our General Counsel, we have f
10 found ways in which we can attract people until such time as 11 the pay cap is changed, attract people and bring them in, and
[
l 12 one of the ways in which we're able to do it is on a loan-i 13 basis.
I'd much prefer not to do it that way, but it will 14 work.
It's workin'g at Browns Ferry.
It's not a permanent 15 solution, but it will work, and I think. Mr. Bibb is 16 demonstrating that he can lead the troops at Browns Ferry, 17 oven though he is not, quote, "a permanent employee," bdt is a 18 loaned employee.
19 And given some care in the way we.go.about this, I h
20 think it will help us over this, what I. hope to be a temporary 21
_ period.
22 COMMISSIONER BERNTHAL:
Have you sense here of what 23 happens after two years?
At some point, you have to make.a 1
24 transition.
You can't answer that entirely now, of course, 25 but w
-a~
.y y,---
~
1 49 1
MR. FREEMAN:
We have -- we either can continue on a
!5
/
2 contract, it the pay cap has not been resolved l
3 COMMISSIONER BERNTHAL:
Right, right.
4 MR. FREEMAN:
There are two ways we're going about 1
5 this.
We were'able to bring Chuck Mason back by a series of 6
by a number of specific kinds of increases in compensation, 7
not salary.
The limitation in the Act is salary.
So that he, 8
in effect, is receiving in total compensation a competitive 1
9 amount of compensation.
That is one way indirectly to be sole a
i 10 to attract people, and we will continue to use that method.
l~
11 It passes muster with our General Counsel, and the GAO i
12 indicated a year or so ago that they had no problem with it, 13 so it's available to us, but nearly as desirable as having the 14 pay cap removed.
15 The contract method is the least desirable for two 16 reasons:
One, it is a loan, and secondly,.it' costs us more.
17 It affects our ratepayers also.
18 CHAIRMAN PALLADINO:
I am quite sympathetic to your 19 problem with regard to the salary.
I recognize the s' alary.as 20 one of the motivations, strong motivations, that causes people l
21 to work one place as opposed to another.
However, it is not 22 the only factor.
I would hope that you would not'look so 23 exclusively to salary, as'some'of-the other motivating:
24 features of employment are overlooked.
25 ThecFederal. Government, in the: wide. varieties of
50 1
highly technical areas, faces the same problem.
There have 2
been successes in those areas as well as at TVA in the past.
3 What keeps many of the people is challenging work, 4
opportunity to contribute, make sure they are doing it 5
ettectively, an opportunity to grow, and get some real job 6
satisfaction.
7 I would hope while I don't criticize you for looking 8
at salary, I think it is an important point that you have to 9
look at, I would hope you would also look at all the other 10 aspects that motivate people to work for TVA.
11 MR. FREEMAN:
I assure you we have, and we are very 12 proud of TVA's record, long term record, of being able to hold 13 on to people, and we still are, even though they are under 14 compensated.
15 MR. DEAN:
There are people in this rcom, 16 Mr. Chairman, sitting at this table and behind the Board, 17 there are quite a few of them who are with TVA because of the 18 challenge of the work and the fact that they love'the agency.
19 I am sure they can go out and make quite a bit more on the 20 outside.
21 COMMISSIONER BERNTHAL:
Tennessee isn't 4 bad place 22 to live either, Mr. Chairman.
23
. CHAIRMAN PALLADINO:
You are right.
I lived there 1
24 two and a half years.
I have a certain fondness for Tennessee 25 and for the TVA Lake System.
$1 1
COMMISSIONER HERNTHAL:
I am about finished.
I did 2
want to bring out the point, and I think it is an important 3
one, that Admiral White is not going to be in this thing 4
entirely long, that there is a team, as I understand it, that 5
is coming in with him.
I think that is good.
I think this is 6
a bit more than an one man job at this point, or one person 7
Job, I should say.
I am very pleased to hear that he is 8
assembling a talented group, the way it sounds, and I think we 9
can expect good things from them in the months and weeks 10 ahead.
11 MR. FREEMAN:
We are placing no limitations on him 12 in that respect.
13 COMMISSIONER BERNTHAL:
That is all I have for now.
14 CHAIRMAN PALLADINO:
Thank you.
Lando?
15 COMMISSIONER ZECH:
I have had the opportunity to 16 visit your plants at Browns Ferry and Watts Bar and also 17 Sequoyah, and also the opportunity to discuss with you, the 18 members of the Board, some of my impressions.
I won *t repeat 19 those here.
Certainly my observation of the plants is they 20 are clean, your operators have been very good.
21 As we have discussed before, the line management 22 problems are serious.
The problems of coordination and follow l
23 through, in my view, are a-big part of that.
I am pleased to l
1
(
24 see that you are addressing them with what I consider a great 25 deal of moral courage.
I recognize this has been very-
52 1
difficult for the Board.
I commend you for your actions.
2 I do know Admiral White very well.
We served 3
together many years ago.
You are getting a very confident, 4
very dedicated individual, in my view.
As has been previously 5
stated, he can't do it all by himself.
He will need the 6
Board *s support.
He will need the support of his colleagues 7
at TVA and all of TVA*s workers, all the people that work in 8
the TVA organisation, as well as the community.
He will need 9
the Board *s support in resources, both people an( money.
He 10 will also need time.
In my view, the problems that you have I
11 at TVA do need time, to address fully and satisfactorily.
12 In my view, my impressions certainly were that you 13 have many fine people *at TVA.
You also have many fine 14 programs, that by themselves, looking in isolation, certainly 15 are commendable, but it has been my impression, having 16 reviewed some of your programs, that the programs in concept i
17 were sound, but as has been mentioned here at.the table 18 previously, and I would agree, execution has not always been i
19 as vigorous perhaps or.as good as the concept.
To me,..that is 20 part of management, and that shows that the follow through has 21 not been as good as it should have been.
22 Another observation that I have had, and I think it.
23 is very important in the management considerations that you 24 have been looking at very carefully recently, is coordination,.
25 coordination between the various divisions and offices of.your-i I
y
- ~. -
53 1
1 organization.
I 2
I think probably the people have individually done a 3
very fine job, but there hasn't been the coordination, in my i
4 view, that would have brought the cohesiveness together.
I 5
think that is something that you are addressing.
I i
6 Steve White will need your strong support.
He can't l
7.
do it alone.
8 I think it is important to recognize that we at the 9
NRC have our responsibilities for regulating, to assure that k
10 public health and safety will be protected.
You at TVA have i
11 responsibilities for constructing your p 1'a n t s, maintaining I
12 your plants, for operating your plants, managing your plants, i
i 13 in such a manner that public health and safety will be t
i 14 protected.
Whereas we have that common goal, 'we come at it in I
i i
15 different directions.
l 16 I think it is important:that you continue the close j
17 relationship with the Commission and the Statt.
I think the
(
I 18 important thing is to lay the problems on the table,' candidly,.
i i
I 19 honestly, and look at them so that we all understand them and 20 can solve them.
I think our Staff, in my' view, is also a very 21 dedicated-and confident group of people, who want to work very 22 hard to do whatever they can to assist you, but you must 23-realize, in my view, that the responsibility for constructing, 24 maintaining, operating, managing, is yours.
Our I
25 responsibility is.to provide that regulatory framework that
+
f
94 1
will allow the citizens of our country to have confidence in
/
2 public health and safety.
l 3
We can come very close together and should work very 4
close together to accomplish our mutual goal.
5 I think that the need to follow through and 6
coordinate on these things is so important.
I do think, at 7
least in my judgment, that perhaps has not been a great 8
strength at TVA.
You have tremendous talent, great 9
capability, great potential.
There is no reason in my view 4
10 that it can't be re-tocused and brought back to a great 11 strength.
12 I think the attitude that you have shown and the 13 courage you have shown in the steps to solve the problem is 14 certainly a very important first step.
There is much yet to 15 be done.
I think you have shown leadership that is 16 necessary.
Now I think we must follow through and do what has 17 to be done, as difficult as it might be, to make sure that the 18 tremendous capability of TVA is brought back to the state of 19 leadership at which it should be, and I think we all agree.
20 I would be very interested in making sure that here 21 today you give us a commitment that after Steve White has'had 22 a chance to review the situation and get the benefit of those l
23 who are going.to come in and assist him,.as you pointed out, 24 Chairman Dean, in analyzing and looking over the situation, 25 that within a-thirty day period, aftez-ne takes over, he come i
55 1
back to this Commission and give us his status report at that i
2 time, perhaps a brief analysis of what has taken place, but 3
more importantly, what is he going to do about it now, and how 4
he is going to follow through.
That will give me the 5
assurante that we are together cooperating to not only 6
identity the problem but to do something about it, the follow
?
through, check on it, re-check on it, make sure that we have 8
this situation under control and working constructively to 9
solve the problem.
10 I think that is the course you are on.
We at the 11 NRC want to do everything we can to work very closely with you 12 to ensure that the citizens of Tennessee Valley and of our j
13 country are better served by our actions.
I think we are on 14 the road to doing Just that' here today.
15 MR. DEAN:
Commissioner, we of the TVA Board have 16 had very little on our minds in recent months but the nuclear 17 program at TVA.
We are not going to just hand the reins to 18 Steve White and say, have at it.
We are going to be right.in 19 there with him.
He has stated to us and to some of the 20 Commissioners that he needs thirty days to look the situation 21 over, and he intends to file a full report of what he finds 22 and what he and his group feels needs to be done from that 23 point forward.
You shall have the kind of report that you 24 asked for.
t 25 MR. FREEMAN:
A face to face meeting.
l t
56 1-MR. DEAN:
Yes, he would plan to come here and do.
/
2 that.
3 CHAIRMAN PALLADINO:
Thank you.
4 COMMISSIONER ASSELSTINE:
If I can add one thing to 5
that, I agree very much with Lando*s request.
I think that 6
would be a very effective thing to do.
7 Let me make one plea, if I could, that when he comes 8
back, or perhaps even before, if possible, that we have from 9
you all and with his advice as well, a list of what the e
10 problems are.
We have talked a lot about a lot of individual 11 ones today.
You have raised some.
Lando has raised a number 12 of them, Fred did, and I did as well.
If we.could have from 13 you a list of each problem area that you see, looking back l
14 over the history of the past several years and your 15 understanding of the present situation, and for each one, what 16 you think the root cause or causes of the problem was, and the 17 implications of ine problem for the conditions of the plant, 18 the physical condition of_the plant or the capability of your-19 plants to operate.
20 It seems to me if you have those-things, then you l
l 21 can take the next step which is to explain, as we go' forward, j
22 how your corrective program is going to address each one in a 23 way that will provide a lasting and effective correction to
+
24 the problem.
I would urge that-you provide.that before you 25 come-back the next-time, before Steve comes back, so,that can l
- r. - *,
s
57 1
be a framework for discussing his understanding and your 2
understanding of where we are.
3 I would urge you especially to focus on quality 4
assurance.
I think you are right to ask for more time to 1
5 address the 50.54(f) letter.
I think it is a terribly 6
important issue.
In my mind, many of those eaalier items, 7
instances of particular problems, the employee concern program 8
has identified, may well just be symptoms of that bottom line 9
conclusion on that slide, on the quality assurance program.
10 I think an understanding of the past failures or 11 weaknesses in the quality assurance program is essential in 12 order to be able to trace back through and find out what is it 13 we have to look at consistent with the philosophy that Bill 14 espoused, shaking the tree and Lando advocated, getting 15 everything out on the table and make sure we really understand 16 what the situation is.
17 I would add that plea as well to what L'ando 18 requested.
19 MR. DEAN:
We will certainly do that, Commissioner.
20 MR. FREEAAN:
I think the only question is whether 21 it can be done in advance of the thirty days.
22 COMMISSIONER ASSELSTINE:
Fine.
23 MR. FREEMAN:
He is going to have a full boat.
24 COMMISSIONER ZECH:
I would agree with the 25 comments.
I think when he comes to the thirty days, he could
_. _. -._ _. _, _ - _...._.. _ ~. _.. _
3 58 g
1 give us those kind of comments at that time.
2 CHAIRMAN PALLADINO:
Let me suggest that we not put 3
any constraints on his work methodology, whereby he has to 4
divert efforts to meet some specific need of ours.
Of course, 5
there are times when I have to do that.
I do not think in 6
this case we should put that constraint on him.
7 MR. FREEMAN:
We appreciats that comment.
'I think J
1 8
this will fit.
I think one of the constraints that the Board 9
wants to put on itself in the next thirty days is to give him 10 the time.
11 COMMISSIONER ZECH:
Knowing Steve White, I would 12 expect that when he comes back in thirty days, he will give us 13 just exactly what Commissioner Asselstine has asked for.
I 1
14 feel certain that is what he would expect to do, as an l
15 introduction to what he is going to talk to us about.
I agree 1
l 16 with the comments.
I think we should i n d e e'd give him the time i
17 to do it.
We would like to get him back here sooner.
I 18 recognize that thirty days is probably an appropriate time to 19 let him get his arms around this.
I.would e x p e c't he would 20 have no trouble with giving us that' kind of assessment, which 21 I agree would be valuable.
+
22 COMMISSIONER ASSELSTINE:
I would give you 23 flexibility to decide how you go'about doing it and when-you 24 do it.
It does seem to me it is an essential and. logical l
25 starting point, that we understand what it is that_we are I
t-
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59 1
dealing with here, that you understand it.
Until we do that, I
)
/
2 it is very difficult to come to grips with the elements of the i
3
' corrective program, and it is difficult for you and for us to 4
have confidence that program is going to work.
5 MR. DEAN:
As they say in East Tennessee,-we all 6
need to be singing off the same sheet of music.
?
COMMISSIONER ASSELSTINE:
That is right.
I think if 8
there is a lesson for all of us from the past, it is don *t i
9 rush ahead with a corrective program, hoping that it will 10 work, untia you understand what the problems are and you 11 really have some basis for assurance that this really comes to u
12 grips with it.
13 COMMISSIONER BERNTHAL:
I would just make the 14 comment that I think most people understand, and I certainly 15 hope that your rate payers understand that this question of 16 resources is a tremendous edge that the Tennessee Valley l
17 Authority has here, and some of the other ditticult situations i
18 that the Commission and our Statt have had to face with other 19 utilities, perhaps other individual plants.
We have often had 20 to deal with situations where the structure and the underlying 21 organization and resources simply were not there.to begin l
22 with.
23 You have tremendous resources, human resources,.
24 institutional resources.
You have a depth of talent and-25 experience.
That gives you
- a. tremendous leg up.
I think we-t I
t
,e o
,c.
60 I
have come to a new beginning here.
I am willing to predict s
2 that within two or three years, we are going to see once again 3
the Tennessee Valley Authority will be one of the leaders in 4
this business.
I am confident that is going to happen.
5 CHAIRMAN PALLADINO:
Thank you, 6
I have two further questions.
One has already been i
?
brought up, but the other one would be, when would be a good 8
time to meet with Mr. White and appropriate other TVA people?
)
9 And I gather it's on the order of 30 days.
That would give 10 them time enough to at least get familiar with his job.
11 MR. FREEMAN:
That's the time he specified to us, so 12 I think that that is satisfactory.
13 CHAIRMAN PALLADINO:
Then we'll work toward that 14 goal.
15 I had one other question, and Commissioner Bernthal 16 referred to it.
Looking beyond the two years, in one of your 17 press releases, there was a statement that went something like 18 this I was just looking for the actual statement but 19 Admiral White's main goal, or one of his main goals, is to 20 have as many TVA plants as possible online within two ' fears 21 and with TVA people.
22 And that*s going to be a challenge that's going to i
23
-- to him, but to the Board as well, because as you indicated 24 before, you have been losing talented people, and you have to 25 create a climate in which you're going to retain talented
(
i i
9
r ** a 61 1
people.
You may very well have to recruit new, good, talented r
2 people.
You're going to have to upgrade some of the people.
3 And that*s going to mean quite a training program, both with 4
regard to their job knowledge requirements and with regard to 5
their attitudes that lend support to maintaining good morale 6
and a good working relationship.
t.
?
And i don't know if you've thought about that, but 8
11 you have any comments you'd like to make on that now, I'd 9
appreciate it.
But it is one to which we're going to have to 10 look as time goes on.
11 MR. FREEMAN:
That was not simply in the press 12 release.
We agreed on what our common objective was, and as 13 some of you, I'm sure, know, one of Steve White *s he f
14 doesn*t want me to call him Admiral strengths he has 15 many, but one of them is in training, and he has indicated 16 that he wishes to emphasize, to put in place a program, so 17 that when he leaves us, we have a trained cadre of permanent 18 people.
That's one of the important objectives, not-just that 19 we have the plants running and an organization that is 20 tunctioning to some degree of stability and permanence there, 21 and he shares that objective, which, of course, is ours.
22 CHAIRMAN PALLADINO:
Okay.
Well, I think it is a ss.
t 23 matter that you're jointly going to have to give attention to.
24 I have a number of other technical problems, 25 questions, I think, that are better left for our next session r
a PRESENTATION OF C. H. DEAN, JR.
CHAIRMAN, BOARD OF DIRECTORS TENNESSEE VALLEY AUTHORITY BEFORE THE NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C.
JANUARY 9, 1986 GOOD MORNING.
MR. CHAIRMAN AND MEMBERS OF THE COMMISSION, WE APPRECIATE THIS TIME ON YOUR SCHEDULE TODAY TO DISCUSS TVA'S NUCLEAR PROGRAM.
I AM CHARLES H. DEAN, JR., CHAIRMAN OF THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY.
WITH ME ARE MY COLLEAGUES ON THE BOARD, DIRECTOR.
RICHARD M. FREEMAN AND DIRECTOR JOHN B. WATERS.
ALSO AT THE TABLE ARE OUR GENERAL MANAGER, WILLIAM F. WILLIS: HERBERT S.
SANGER, JR., OUR GENERAL COUNSEL: AND CHARLES MASON, OUR DEPUTY MANAGER OF NUCLEAR POWER.
AS EACH BOARD MEMBER PERSONALLY KNOWS AND AS THE COMMISSION IS FULLY AWARE, THE TVA NUCLEAR POWER PROGRAM IS IN GREAT DIFFICULTY.
TVA'S PERFORMANCE HAS DETERIORATED FROM A POSITION-0F LEADERSHIP IN THE NUCLEAR INDUSTRY.
EACH OF THE BOARD MEMBERS RECOGNIZES THE SERIOUSNESS OF THE SITUATION AND THE NECESSITY FOR VIG0ROUS AND EFFECTIVE STEPS TO REMEDY IT.
EACH BOARD MEMBER IS PERSONALLY COMMITTED TO RESTORING THE CONFIDENCE OF NRC, THE TENNESSEE VALLEY REGION, AND THE-NATION AS A WHOLE IN TVA'S ABILITY TO SAFELY AND EFFICIENTLY OPERATE ITS PLANTS.
WE HAVE TAKEN AGGRESCIVE STEPS TOWARD THIS G0AL, AND ARE GIVING FIRST PRIORITY IN l
l l
L.
OUR DAILY ACTIVITIES TO THE NUCLEAR PROGRAM.
HOWEVER, AS ONE OF THE COMMISSIONERS REMARKED ON TUESDAY, TVA'S NUCLEAR POWER PROBLEMS DID NOT OCCUR OVERNIGHT AND THEY WILL NOT BE CORRECTED OVERNIGHT.
THE COMMON ROOT CAUSE OF TVA'S LITANY OF TECHNICAL DIFFICULTIES IS MANAGEMENT IN NATURE.
ONE OF THE MOST SERIOUS PROBLEMS IN OUR VIEW HAS BEEN THE FAILURE OF TVA TO DEVELOP AND KEEP QUALIFIED MANAGERS.
WE HAVE LOST FINE TALENT; WE HAVE NOT DEVELOPED ADDITIONAL TALENT THAT WE NEED:
AND NOW WE FIND OURSELVES WITH LIMITED HIGH-LEVEL MANAGEMENT AND l
OPERATING EXPERIENCE.
ANOTHER PROBLEM HAS BEEN THE INADEQUATE AUTHORITY 0F OUR MANAGERS.
CLEAR LINES OF RESPONSIBILITY AND ACCOUNTABILITY HAVE NOT EXISTED.
THE EFFECTS OF THIS DIFFUSE MANAGEMENT WAS COMPOUNDED BY AN OUTDATED ORGANIZATIONAL STRUCTURE.
AN OUTGROWTH OF OUR MANAGEMENT PROBLEM HAS BEEN A SERIOUS LACK 0F COMMUNICATION BETWEEN MANAGERS AND EMPLOYEES.
THIS HAS LED TO A FEAR BY SOME TVA EMPLOYEES THAT INTIMIDATION AND HARASSMENT BY TVA MANAGERS WILL FOLLOW THEIR RAISING POTENTIAL NUCLEAR SAFETY PROBLEMS.
THESE PERCEPTIONS EXISTED DESPITE THE BOARD'S EFFORTS TO MAKE IT CLEAR THAT IT WILL NOT TOLERATE THE INTIMIDATION OF EMPLOYEES EXPRESSING SUCH VIEWS.
IN THE LAST YEAR THE BOARD HAS SUPPORTED MAJOR EFFORTS TO REGAIN COMMUNICATION WITH AND THE TRUST AND CONFIDENCE OF OUR EMPLOYEES.
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THE BOARD HAS TAKEN AGGRESSIVE ACTION TO REMEDY ITS MANAGEMENT PROBLEMS BY BRINGING ON BOARD A NEW TOP MANAGER OF THE NUCLEAR PROGRAM AND INVESTING HIM WITH AUTHORITY TO MATCH HIS RESPONSIBILITY.
IN SEEKING A NUCLEAR ADVISOR TO THE BOARD, MY COLLEAGUES AND I HAD MET WITH STEVEN A. WHITE.
WE WERE S0 IMPRESSED WITH HIS REPUTATION AND CREDENTIALS, INSIGHT INTO OUR MANAGEMENT PROBLEMS, RELEVANT EXPERIENCE, AND LEADERSHIP THAT WE DETERMINE'D TO ADD HIM NOT AS ONLY AN ADVISOR TO THE BOARD BUT AS THE SINGLE EXECUTIVE WITH OVERALL RESPONSIBILITY AND FULL AUTHORITY FOR ALL ASPECTS OF THE TOTAL TVA NUCLEAR PROGRAM.
STEVE WHITE SERVED IN THE NAVY FOR 33 YEARS AND RETIRED AFTER SERVING AS A 4-STAR ADMIRAL IN CHARGE OF THE NAVY'S MATERIAL COMMAND.
THAT COMMAND CONSISTED OF 250,000 PEOPLE AND WAS RESPONSIBLE, AMONG OTHER THINGS, FOR PROCURING THE NAVY'S SHIPS, INCLUDING NUCLEAR SHIPS, AIRCRAFT, ELECTRONICS SYSTEMS, SHORE FACILITIES, AND OTfER NAVY SUPPLIES.
HE IS A PRODUCT 0F THE NUCLEAR NAVY, AND HIS EXPERIENCE THERE RANGED FROM SERVING AB0ARD THE NAVY'S FIRST NUCLEAR SUBMARINE TO SERVING AS AN ASSISTANT TO ADMIRAL RICK 0VER, AND FINALLY AS COMMANDER OF 90 NUCLEAR-POWERED SUBMARINES.
WE ARE VERY PLEASED TO HAVE STEVE WHITE AS TVA'S MANAGER OF NUCLEAR POWER.
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STEVE WHITE COMES TO US FOR TWO YEARS ON AN EMPLOYEE LOAN THROUGH STONE &
WEBSTER ENGINEERING CORPORATION.
TO CLEARLY DEFINE HIS ROLE, WE ENTERED INTO A WRITTEN MEMORANDUM 0F UNDERSTANDING BETWEEN STEVE WHITE AND THE TVA BOARD OF DIRECTORS.
IT ESTABLISHES OUR MUTUAL OBJECTIVES OF PROVIDING TVA WITH MANAGEMENT CAPABILITY S0 THAT AT THE END OF 2 YEARS THE TVA NUCLEAR PROGRAM WILL BE IMPROVED AND TVA WILL HAVE ENHANCED CAPABILITY TO MANAGE THE PROGRAM WITH PERMANENT TVA PERSONNEL.
THE ESSENCE OF OUR MEMORANDUM OF UNDERSTANDING IS THAT STEVE WHITE HAS RESPONSIBILITY AND AUTHORITY TO MANAGE OUR OVERALL NUCLEAR PROGRAM.
SOME OF THE HIGHLIGHTS ARE:
STEVE WHITE WILL HAVE DIRECT AUTHORITY AND RESPONSIBILITY FOR THE MANAGEMENT, CONTROL AND SUPERVISION OF TVA'S ENTIRE NUCLEAR POWER PROGRAM, INCLUDING, BUT NOT LIMITED T0, LHE DESIGN, CONSTRUCTION, MAINTENANCE, AND OPERATION OF ALL EXISTING OR PLANNED TVA NUCLEAR POWER PLANTS.
THIS INCLUDES AUTHORITY TO ESTABLISH MANAGEMENT AND OPERATING POLICIES AND PROCEDURES RELATED TO TVA'S NUCLEAR POWER PROGRAM, INCLUDING ANY ASPECT OF PERSONNEL MANAGEMENT, DEVELOPMENT, AND COMMUNICATION.
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e HE HAS DIRECT ACCESS TO THE TVA BOARD OF DIRECTORS AND REPORTS DIRECTLY TO THE GENERAL MANAGER AND THE BOARD OF DIRECTORS.
HE MAY BE REMOVED ONLY BY THE BOARD.
SUBJECT TO RESERVATIONS OF AUTHORITY TO THE TVA BOARD AND GENERAL
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MANAGER, HE IS AUTHORIZED TO HIRE, REMOVE AND ASSIGN BOTH TVA AND CONTRACTOR PERSONNEL, AND TO REDIRECT AND/0R RESTRUCTURE THE ACTIVITIES AND FUNCTIONS OF TVA 0FFICES INSOFAR AS NUCLEAR POWER ACTIVITIES ARE INVOLVED.
HE HAS DIRECT RESPONSIBILITY FOR PROVIDING NUCLEAR POWER PROGRAM BUDGET AND FINANCIAL INFORMATION T9 THE GENERAL MANAGER AND BOARD AND FOR DEVELOPING AND RECOMMENDING NUCLEAR POWER PROGRAM BUDGETS FOR BOARD APPROVAL.
THE INTERNAL TVA ACTIVITIES AND FUNCTIONS NECESSARY TO THE SUCCESSFUL OPERATION OF THE TVA NUCLEAR POWER PROGRAM, INCLUDING THE NUCLEAR' SAFETY REVIEW STAFF, SHALL REPORT TO STEVE WHITE.
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HE IS AUTHORIZED AND DIRECTED BY THE BOARD TO COOPERATE FULLY WITH THE UNITED STATES NUCLEAR REGULATORY COMMISSION AND ANY OTHER AGENCY OR ENTITY, GOVERNMENTAL OR OTHERWISE, WITH JURISDICTION OVER OR INTEREST TN TVA'S NUCLEAR POWER PROGRAM TO ASSURE THE SAFE, RELIABLE AND EFFICIENT DESIGN, CONSTRUCTION, OPERATION, AND MAINTENANCE OF TVA'S NUCLEAR FACILITIES.
HE WILL BE RESPONSIBLE FOR ALL ASPECTS OF TVA'S RELATIONS WITH NRC AND OTHER AGENCIES AND ENTITIES.
THIS SHOULD MEASURABLY IMPROVE TVA'S COMMUNICATIONS WITH THE COMMISSION.
STEVE WHITE'S FIRST EFFORT WILL BE ANALYZING OVER THE NEXT 30 DAYS' I
DETAILS OF OUR MOST SERIOUS TECHNICAL, MANAGEMENT, AND COMMUNICATION PROBLEMS.
AT THE END OF THAT TIME, HE WILL REPORT HIS EVALUATION OF THE SITUATION AND PLANS FOR CORRECTIVE ACTION TO THE BOARD AND TO THE COMMISSION.
THE BOARD IS CONFIDENT THAT ITS ACTIONS WHICH I HAVE OUTLINED WILL ENABLE THE TVA NUCLEAR POWER PROGRAM TO MEET THE HIGH EXPECTATIONS OF BOTH THE TVA BOARD AND THE NRC.
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