ML20147H540

Transcript of 970331 Public Meeting in Rockville,Md W/Doe Re External Regulation of DOE Facilities.Pp 1-54.W/related Documentation

ML20147H540
Person / Time
Issue date:	03/31/1997
From:	NRC COMMISSION (OCM)
To:
References
REF-10CFR9.7 NUDOCS 9704030268
Download: ML20147H540 (65)

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1250 I St.,N.W., Suite 300 Washington, D.C.20005

'202) M2 40M 9704030260 970331 PDR 10CFR I PT9.7 PDR v

DISCLAIMER This is an unofficial transcript of a meeting of the United States Nuclear Regulatory Commission held on March 31, 1997 in the Commission's office at One White Flint North, Rockville, Maryland. The meeting was open to public attendance and observation. This transcript has not been reviewed, corrected or edited, and it may contain inaccuracies.

The transcript is intended solely for general informational purposes. As provided by 10 CFR 9.103, it is not part of the formal or informal record of decision of the matters discussed. Expressions of opinion in this transcript do not necessarily reflect final determination or beliefs. No pleading or other paper may be filed with the commission in any proceeding as the result of, or addressed i to, any statement or argument contained herein, except as the Commission may authorize.

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1 f 1 UNITED STATES OF AMERICA

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2 NUCLEAR REGULATORY COMMISSION  ;

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3 _ __

4 MEETING WITH DOE ON EXTERNAL 5 REGULATION OF DOE FACILITIES 6 - --

7 PUBLIC MEETING 8

9 Nuclear. Regulatory Commission 10 One White Flint North 11 Rockville, Maryland 12 13 Monday, March 31, 1997 14 15 The Commission met in open session, pursuant to 16 notice, at 2:30 p.m., Shirley A. Jackson, Chairman, 17 presiding.

18 I i

19 COMMISSIONERS PRESENT:

20 SHIRLEY A. JACKSON, Chairman of the Commission l 21 KENNETH C. ROGERS, Commissioner 1

22 GRETA J. DICUS, Commissioner j 23 NILS J. DIAZ, Commissioner 24 EDWARD McGAFFIGAN, JR., Commissioner 25 i l I

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l 1 STAFF AND PRESENTERS SEATED AT THE COMMISSION TABLE.

2 JOHN C. HOYLE, Secretary of the Commission 3 KAREN D. CYR, General Counsel i l

4 THOMAS GRUMBLY, Under Secretary, DOE l

l 5 RAY BERUBE, Deputy Assistant Secretary for Environment

6 RAY PELLETIER, Director, Office of Environmental Policy i L 7 and Assistance '

8 MARY ANNE SULLIVAN, Deputy General Counsel for l,

t 9 Environment and Civilian and Defense Nuclear Programs 10 11 12 l

13 14 15 l l

l 16 l 17-18 l

19 20 21 22 23  !

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] =1 PROCEEDINGS .

4 2 [2 :30 p.m.]  ;

j 3 CHAIRMAN JACKSON: Good afternoon, ladies and j 4

. 4 gentlemen.

. 5 Today, the Commission will be briefed by officials ,

6 of the U.S. Department of Energy on its proposal to have its

! 7 nuclear activities to be regulated externally by the Nuclear 4 ,

8 Regulatory Commission. The Department made an announcement 9 on December 20 of 1996 that it intended to submit i

10 legislation to the Congress to transfer oversight of nuclear  !

11 safety to the NRC. The DOE announcement was made after the 12 completion of a study by an independent advisory committee l

13 and a follow-up study by a DOE working group on external- i i

14 regulation. l l

15 The Commission considered the matter of NRC's l l

16 oversight of DOE nuclear safety as part of its strategic

{

17 assessment and rebaselining initiative. Public comment was l 18 solicited on the issue and the public strongly encouraged ,

i 19 the Commission to pursue the external regulation of DOE 20 nuclear safety. l 21 The DOE's working group recommendation that NRC be f 22 given regulatory oversight of DOE nuclear facilities, along 23 with the strong public support that NRC should have that l 24- oversight responsibility, influenced the Commission's final l 25 decision, which was issued just this last Friday on this j i

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4 1 matter and should be available here.

2 Following the release of the Commission's final 3- decision on Friday, March 28, I did have the opportunity to 4 speak with Secretary Pena. At that time, he had not been 5 briefed on the subject but felt that there was a lot of .

6 forward momentum for this proposal as well as Administration I 7- support. Both the Secretary and I agreed that we will be in 8 contact very shortly. In fact, we will meet to discuss the 9 next steps in this initiative.

I 10 The Commission endorses NRC's taking '

11 responsibility for the regulatory oversight of certain DOE 12 nuclear facilities. The Commission has directed the NRC I 13 staff to establish a task force to^ identify the policy and 14 regulatory r.nd legislative issues that need to be resolved 15 for thie initiative to be successful. The Commission has 16 also instructed the staff to develop a join memorandum of 17 understanding with the Department of Energy to establish the y

18 framework for the legislative and follow-on phases of the 1

. 19 project and I, myself, will be writing.a letter to the 20 Secretary, which I indicated to him in our discussion, 21 laying out the Commission's endorsement and basic position 22 in these matters, as well as some specifics as to how we

> 23 might go forward.

24 Many administrative, technical and legal issues 25 will have to be resolved if NRC is to carry out the ANN RILEY & ASSOCIATES, LTD. j Court Reporters 1250 I Street, N.W., Suite 300 ,

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5 1 Department's proposal. Today's briefing will be a first 2 step in gaining a better understanding of the issues as DOE 3 sees them that need to be resolved between the two agencies 4 if the proposal moves forward. We are looking forward to 5 hearing more details about the DOE proposal.

6 If none of my fellow commissioners have any 7 comments, Mr. Grumbly, would you please proceed? And it's 8 good to see you.

9 MR. GRUMBLY: Nice to see you, Madam Chairman.

10 And I would like to express appreciation to you and to the 11 rest of the Commission for the opportunity to meet this 12 afternoon to talk about this particular proposal.

13 I am pleased to be able to announce that 14 subsequent to the phone call that you had with Secretary 15 Pena that we were able to brief him last Friday and that we 16 came away from the briefing with his general support for the i 17 concept of NRC regulation of DOE. He encouraged additional 18 efforts between DOE and NRC to further define the scope, 19 time frame and other elements required for a smooth 20 transition to NRC regulation but I wanted to emphasize his 21 continued support of the Administration's position in this 22 area.

23 We acknowledge receipt of the Commission's March 28, 1997, memorandum on this matter. We welcome, obviously, 24 25 the Commission's endorsement. We understand and agree with ANN RILEY & ASSOCIATES, LTD.

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i i the conditions that were set forth by the Commission in that i

2 memorandum and we look forward to working with the NRC task 3 force being created by the Commission to resolve many of the i 4 policy, legal and technical issues in this very ambitious 5 but, I think, right proposal to improve the credibility and

• 6 safety of our activities.

7 I believe each of you has a briefing in front of 8 .you with some briefing charts that I am going to use. That 9 and hopefully this will not take too long and we will have 10 plenty of opportunity to respond to questions. Let me just 11 say it is quite odd to look up and see my own picture.

12 [ Laughter.]

13 CHAIRMAN JACKSON: .That's the way we do things 14 around here.

15 MR. GRUMBLY: What we are going to cover here 16 today is a little bit about the current regulatory 17 framework, the historical context, some of the key ,

18 considerations that went into our views as we put this 19 proposal together. The specific NRC phased regulation 20 proposal, how we see this happening in a context of 21 regulated facilities in the DOE becoming many fewer over the 22 next five to ten years, talk a little bit about our l

23 perspective of the annual cost to NRC, summarize the

'24 benefits of external regulations as we see them, lay out a l 25 future schedule and then talk about the legislation that we

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7 1 see happening, l 2 I think you and probably moeL of the people in 3 this room understand that DOE has changed dramatically in  ;

I 4 the last 10 years, that operating from what was just about 4 5 10 years ago or the end of 1986, from an environment in l 6 which we were totally self-regulated, we have changed rather  ;

i 7 dramatically over the last decade. i 8 In the environmental area, we are almost entirely 9 externally regulated at the moment by a combination of the 10 United States Environmental Protection Agency, state and 11 state regulatory agencies. In the worker protection area,

. 12 we are still currently self-regulated although we have a 13 proposal that has just come from the National Academy of 14 Public Administration that reinforces a decision that 15 Secretary O' Leary made early in her administration and that ,

16 is that we ought to work together with the occupational 17 Safety and Health Administration there.

18 And in the nuclear safety arena, we are still 19 self-regulated with some exceptions. For example, as you 20 know, the geologic repository is currently regulated by NRC, 21 lucky you.

22 COMMISSIONER DICUS: Noted.

23 MR. GRUMBLY: But I think, you know, the main 24 thing to understand is that we have been slowly but surely 25 emerging from the cocoon of self-regulation over the last C

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8 1 several years. What we did not mention here, obviously, is 2 that in 1989 the Defense Nuclear Facilities Safety Board was 3 established to actually oversee but not regulate many of 4 DOE's defense nuclear facilities. That establishment 5 happened at a time when the Cold War was still under way and .

6 we believe that the world hen continued to change over the 7 last seven or eight years and that it's appropriate now to 8 begin moving in a different direction.

9 The historical context for this, you summarized a 10 little bit, Madam Chairman, in your opening remarks, but 11 just so that we get it all on the record, beginning in March 12 of '94, there were some initial congressional proposals 13 initially put forward by Congressman George Miller from the 14 state of California, who was then chair of the House Natural 15 Resources Committee, t. hat would have resulted in external 16 regulation of DOE nuclear facilities. )

l 17 At that time, the Administration and the Secretary l 18 responded with a counterproposal saying that we would like 19 to put together an advisory committee in the department to 20 take perhaps a less fevered look at this issue than 21 sometimes can be given by the Congress. So we put together 22 an advisory committee that was headed by former NRC Acting 23 Chairman John Ahearn. And people, with people from around 24 really the nuclear complex including Joe DiNunno, one of the  ;

25 members of the Defense Nuclear Facilities Safety Board.

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9 1 That advisory committee reported in December 1995, 2 crossed the Rubicon with respect to the decision that in 3 fact we ought to be regulated by an external entity in this 4 area but like, I suppose, many advisory committees, they 5 didn't come up with the recommendation that we asked them 6 for, which was what should be the agency that should do 7 this. .

8 So in January of '96, the then-Secretary O' Leary r

9 asked Ray Berube, on my right, the Deputy Assistant 10 Secretary for Environment, Safety and Health, specializing i 11 in the environment, to work with me and a group of my 12 colleagues in the department to come up with a 13 recommendation to her on, all right, which entity, which 14 combination of entities should actually get into this l 15 external regulation area.

16 In December we reported and the former Secretary t

17 selected the phased NRC option that we are going to discuss  ;

18 today and, as I indicated, just this past Friday we had the 19 opportunity to brief Secretary Pena and he supports the P

20 direction in'which we are going.

21 The key considerations, and these are really your 22 key considerations that you sent to us I believe in early 23 1996 or late in 1995, I can't remember, about some of the 24 considerations that you thought we ought to consider and we 25 took these very seriously as we went through the process of ANN RILEY & ASSOCIATES, LTD.

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l' coming up with our own proposal, j 2 First, that there be a single nuclear facility 1 3 regulator, once we got.to the end of this process. We think 4 that that is the right place to be. I think the issues of l

5. how quickly one can get there are things that we had to .

i 6 consider very much in the forefront of our deliberations. l 7 That there be a flexible regulatory approach. And I must  ;

i

.8 say one of the things that we emphasized with the new 9 Secretary on Friday and that he was very clear about in 10 discussions with us is that it would be necessary for this l 6

11 proposal to be successful that both the NRC and the DOE  !

12 probably had to change some together, if this were going to 13 ~ work. That the sort of facilities that the Commission is  :

1 14 used to regulating most thoroughly, the sort of commercial l 15 nuclear facilities, are somewhat different than some of our l 16 more exotic facilities, such as Rocky Flats and a few other 17 places that we have --

Having been to Hanford. j 18 CHAIRMAN JACKSON:

l 19 MR. GRUMBLY: Right. l 20 Nonetheless, I think the notion that there l 21 probably is room for us both to improve our approach is  :

22 something that we need to keep in mind. Clear legislative ]

23 authorities, who can argue with that? Obviously, we need to i 24 do that. I think one of the issues that is on the table now 25 is whether even to get started whether we need some *}!

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1 additional legislation to get started in this. '

2 Adequate transition planning,,I have to say that 3 Ray and I and the rest of the task force, having lived for 4 some time with the transition from DOE self-regulation on i

5 the environment to the kind of regulatory situation that we  !

6 have now, felt very strongly that we did not want to get 7 into the same type of situation that we encountered early on'  !

8 in the environmental area, which is to say on day zero you ,

9 are self-regulated, on day one you are externally regulated, .

10 on day two you are so out of compliance that you have to 11 sign up to all of these onerous agreements that then tie up 12 your budget for the next 37 years.  !

13 So we were very clear in thinking about this that ,

i 14 we needed to achieve adequate transition planning and have a 15 realistic time frame and scope so that we_could bite this 16 apple in a way that we could all digest.

17 You obviously also talked about the need for 18 adequate resources and, of course, that's on both sides of i 19 the fence. That is both in terms of the Commission's 20 ability to have the resources to do the kind of regulation i

21 that is necessary so that you can be the kind of credible l 22 regulators that you need to be and, also, the resources for 23 us to actually make whatever improvements to come into )

24 compliance with what would need to be done.

25 Then, finally, opportunities for public ANN RILEY & ASSOCIATES, LTD. j Court Reporters 1250 I Street, N.W., Suite 300 Washington, D.C. 20005 I (202) 842-0034 i i

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12 1 involvement. This is one of those opportunities for public 2 involvement but I really took this as a much -- we really 3 took this as a much wider piece than that. That is that we 4 believe, and I certainly believe very strongly in this, that 5 the time is past when the federal government can operate .

6 under the covers of secrecy, that everything that gets done 7 has got to be done out in the bright light of day. It makes i

8 it harder sometimes but that's just the way it is. So l

9 having this sort of accountable public environment in which 10 we are all responsible for what we do is absolutely a sine )

11 qua non to moving forward. l 1

i 12 We came up with a phased regulatory plan in which  :

1 13 we have tried and, of course, there were a lot of different j 14 options that we considered in putting this together, ranging i 15 from do it now, don't do it at all, do it with the Defense

)

16 Board, do it with the NRC. You know, a variety of options l l

17 that expanded and contracted and we finc.lly came up with 18 this, around which we got substantial consensus in the DOE.

19 I mean, when I say substantial consensus, I really l 20 don't think there was maybe but one person on the Committee l l

21 who had a different view ultimately when we came out, that '

22 this was the right option to propose at that time and place.

23 And just to not be too long-winded about it, the options are l 4

24 that this would be a 10-year -- the selection was that this i 25 would be a 10-year phase in. We can talk about whether 10 3

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, 1 makes sense or not but you will see that there is some 2 analytic basis for it when we get to th,e next slide. f 3 In the first five years, the Commission would pick 4 up selected defense programs, environmental management and 5 all energy research and nuclear energy, nuclear facilities  ;

6 for regulation. That in the six- to ten-year time frame, 7 there would be regulation of selected defense program 8 nuclear facilities and all environmental management, energy i

9 research and nuclear energy, nuclear facilities by the NRC.

4 10 After 10 years, the total package would be here. i 11 With respect to the Defense Board recognizing the 12 really substantial expertise that the Defense Board and the 13 staff had, we felt that it would be appropriate that over 14 the next five years that we retain current oversight by the 15 Defense Board of the current DP and EM facilities while we 16 got them into shape to actually transfer them to NRC.

17 We don't want to have a situation where we have a 18 huge cliff on the day when most of these facilities are 19 taken over. We want to try to work over the next five 20 years, just to pick the number, five years plus whatever 21 amount of time it takes to get legislation in this area so 22 that really by the time most of these facilities, however 23 many there are, switch to the NRC, there really will be a

. 24 relatively smooth transition and not a huge gradient in 25 terms of what's needed to c.ake things happen.

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14 1

.In the 6 to 10-year period of time the Defense i

2 Board would oversee only the defense programs at nuclear 3 facilities. Nuclear explosive safety, by the way, would 4

stay under all of these options with the Department of 5 Energy. We're not asking you to regulate the actual

• 6 development and testing, whatever form that testing would 7

take, of DOE's nuclear weapons facilities, and I suspect 4

8 that one of the areas that our working groups will have to 9

explore is exactly which facilities fall into that category 10 and which would fall into other defense programs facilities, 11 but I think that's something that's not totally clear yet 12 and something that we need to get straight.

13 And finally, after the 10-year period of time, the 14 very talented members of the Defense Board staff would in 15 fact merge with your colleagues at the NRC and the Defense 16 4

Board itself would dissolve, having I think in that period 17 of time been in existence for about 18 years, gone through 18 several different transformations, really helped improve 19 dramatically the safety in the DOE complex, and I think 20 really unlike many organizations in the world, can be said 21 to have done the job that it was set up to do.

22 If you look at the next slide, one of the reasons 23 why we decided that it was important to pick a 10-year 24 period was we took a look for cost purposes and for, you 25 know, how big is this elephant. We took a look at how many ANN RILEY & ASSOCIATES, LTD.

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1 facilities were we actually talking about here, and one of 2 the things that we discovered as we went through'this -- and f 3 this is based on data from the DOE field, so this is not  ;

4 data that's been, you know, invented by some staff person 5 back here at headquarters, but rather came in from the field l 6 complexes -- well, how many nuclear facilities would there l 7 be over x period of time? ,

8 Of course what you see is that right at about that 9 10-year point you get a relatively -- you go from nearly 600 i 10 facilities to roughly a little over 200. The vast majority l 11 of those are facilities that will be going through the so-12 called EM process, the environmental management process, so 13 when you look at the chart, and I don't think we've brought 14 that chart with us, but if you take a look at how this big 15 blue line breaks up to the different programs, the reason 16 why it drops off so dramatically primarily is because of the 17 reduction in environmental management facilities that will .

18 have to be regulated.  ;

19 This assumes that the decontamination and  ;

20 decommissioning of facilities will occur under the aegis of 21 the Environmental Protection Agency, not under the NRC, so 22 the actual, you know, knocking the buildings down would not 23 be proposed to be part of the NRC responsibility as opposed 24 to the actual operation of DOE facilities that are there.

25 That's again another subject for conversation, but our ANN RILEY & ASSOCIATES, LTD. -

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16 1 conception and the reason why the line goes down so 2 dramatically is once you're in the D&D area, you're outside 1

3 of the nuclear safety r6gulatory environment. That's

, I 4 consistent with where we've been with the Environmental 5 Protection Agency for the last several years. So what we .

i 6 wanted to do was' bring on the number of regulated facilities 7 in such a way over time so that essentially the lines met at l 8 an appropriate place.

9 In terms of annual costs to the NRC this is i

10 something that I may let my colleague, Mr. Berube, talk to ,

11 more, if you're interested in it, but we had a low estimate ,

12 and a high estimate. We believe that there's pretty good 13 consensus between the two agencies about what it would cost 14 you, although this is obviously something that's much more I 15 in your bailiwick than ours, people are obviously concerned ,

16 about the costs of this enterprise, but if you take a look 17 at this costing, once you get out to the 10-year period of 18 time, an increment of no more than $75 to $80 million a i

19 year, and you take a look at the declining number of 20 facilities that the DOE has to regulate, fundamentally what )

l 21 we're going to do is -- as a government, now -- is, and we l 22 can, you know, there's all kinds of ways to decide how to do 23 this, but as a government what we're going to do is fund j 24 your regulatory activities over the money saved from the 25 closure in part of the DOE facilities as well as funding the l

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1  :

17 1 incremental costs of improving the DOE facilities by virtue 2 of the fact that we're getting out of so many.

~

1 3 So the way in which we're able to deal with the )<

4 budget baselines that we're presented with over the next 5 ,

5 to 10 years is driven very greatly by our ability to get out  !

6 of the number of facilities that we're talking about here. l 7 So this, the chart that has the blue and the red lines, the ,

8 number of regulated facilities, has & tendency to drive the 9 overall capability of the system to absorb the costs in a I 10 tough Federal budget situation, although I would have to say 11 that, you know, to me, I'd be willing to make the case i 12 straight up to the Congress and to the OMB that an 13 incremental 75 million a year, if that was all we were 14 talking about, would be worth doing anyway. As we went 15 through the process, because -- why is that? -- because of  :

i 16 the tremendous benefits I think that the society will derive 17 in an area that we all know to be quite divisive and 18 problematic.

19 And the first is obvious, and that is that this 20 proposal eliminates the inherent conflict of interest from 21 the current self-regulation that we have. I think all we 22 have to do is look at the situation that we've encountered 23 in the last several months at the Brookhaven National 24 Laboratory on Long Island to see how people's perceptions 25 are problematic in an environment where you have the same ANN RILEY & ASSOCIATES, LTD.

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18 1

entity regulating itself that's supposed to be operating 2

essentially the facility, and I think that it's just really 3

a continuation of where we've been over the last 25 years of 4 regulation to try to separate the regulated from the 5 operator -- or the regulator from the operator at the same -

6 time. So I think that this is a very powerful argument that 7 the public can understand and can fundamentally agree with.

8 We actually believe that this proposal, taken together with 9 our own efforts to improve DOE's internal safety and health 10 program, will in fact enhance the safety and health of the 11 complex.

1 12 And one thing I want to be quite clear about. We 13 are not talking here in this proposal about deeding over the 14 responsibility for making DOE safe to you. That's our 15 responsibility. The responsibility of the men and women who 16 work for the Department of Energy is to ensure that our  :

17 organization, our facilities, are safe, in the same way that i 18 it's the responsibility of the Du Pont Corporation, any of 19 the other corporations in America, to be safe, it's our 20 responsibility to do that, and +.n fact being able to 21 emphasize the line safety responsibility of our managers to 22 be able to ensure that they understand that it is their 23 responsibility and not to look over the shoulders at the 24 environment, safety, and health orgaraization inside DOE that l 25 in fact can make our place better, our managers need to know

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19 1 that they have the responsibility on the line for having 2 these facilities be safe.

3 Your job is to essentially set the rules of the 4 road so that consistently over time without regard to 5 changes in administration, without regard to changes in the 6 flavors of the month, safety policies that any particular 7 administration might come up with, is to ensure the kind of 8 consistency, predictable and stable environment within which 1 9 our men and women can do their job. I'm absolutely 10 convinced that the combination of our improving our own i

11 safety capabilities inside plus you setting fair, flexible,  ;

12 reasonable rules of the road, will in fact make the DOE 13 complex safer than it is today.

14 I think also this particular proposal will  !

15 increase the public trust and confidence because it will 16 lead to much greater stakeholder involvement through open 17 regulatory processes. We spend enormous sums of money 18 complying with recommendations that are essentially I i

19 developed by extraordinarily fine technical people but are 1 20 developed outside of the light of day. To me that's just 21 not where the public wants us to be these days. People need

^

22 to know the whys, the wherefores, and in a budget 23 environment that's increasingly constrained, we need to 24 identify why we need to make certain kinds of safety I 25 investments, and those safety investments need to be open to ANN RILEY & ASSOCIATES, LTD.

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20 1

1 public comment.and review. j 2 I also think actually that enhanced safety will 1

3 provide for real savings. We've seen that in a number of 4 places that the ability to solve a problem once rather than 5 to Band-Aid it over time really makes our places safer - '

6 rather than less safe, i 7 In terms of the future schedule, the first -- we 8 were pessimists when we put this together. Our Secretary

• 9 asked me on Friday, well, why do you think it'll take two 10 years to get through the process, and I said well, hey, put i 11 our shoulders to the wheel, we'll probably be done a lot 12 quicker than that. But we made an assumption that the 13 entire process of developing, submitting, and passing l 14 legislation would take an entire Congress, and obviously 15 we've just lived through a transition, so we've -- I won't  ;

i 16 say lost, but we've been essentially in neutral for a couple 17 of months while we went through the process of getting a new  ;

18 Secretary, thereby, I think, reinforcing the fact that it 19 could take two years to actually come up, get, and pass t 20 legislation, assuming we can rally the kind of public and )'

21 congressional support for this idea that we need. And then 22 you can see the time line for implementation of the two 23 phases. ,

1 24 In briefing people on the Hill about this, what  ;

. I 25 we've really gotten I suppose is -- and I don't mean this as ANN RILEY & ASSOCIATES, LTD.

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21  !

i 1 a term from. psychiatry -- we've'gotten bipolar responses to l

i 2 this proposal. .Actually we've gotten a lot more support on  !

3 the Hill for advancing the pace of this exercise than I l 4 certainly would have expected going in, and obviously there 3 5 are some people who believe that the DOE is somehow giving j c

6 up its responsibility by going in this direction. I think L 7- that there's a path that can be charted through the Congress 8 that will in fact result in legislation here, but I'm not i

9 going to sit here and tell you that I think that it's a slam 1

10 dunk. It's going to be something.that if we're serious 11 about it is going to have to be worked at.

i 12 What I can assure you of is that Secretary Pena's 13 support will be quite meaningful in the administration, that l

14 there is very solid support ice this inside all of the 15 councils of the executive branch, at the moment, and that I 16 there's really a good opportunity to make progress on this  !

17 at this point.  ;

i 18 What we'd like to do is -- and have been involved, i 19 and now we will get much more deeply involved in it again --

20 is develop the legislative proposal, and.that may be 21 proposals, that could be plural, because there may be some 22 things that need to be done in the near term as well as in 23 the long term about this. We'll obviously need to work 24 together to identify the very specific facilities -- and by l 25 facilities I mean building by building, in some cases in ANN RILEY & ASSOCIATES, LTD.

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1 l

22 l I some of our complex -- that will have to be regulated.

2 We'll want to move as quickly as we can on the energy l 3 research side of the equation, because we think there are

~

4 real near-term opportunities there. We'd also like to work l l

5 as quickly as we can to bring any new facilities that we're -l 6 building under this arena as quickly as possible. We don't i

7 see any advantage to building new facilities and having them 8 operate under an old regulatory or oversight framework if 9 we're going to move to a new one.

10 Obviously we'd have to work together to develop 11 the standards to be applied to each facility, with you all 12 ultimately having the last call on-this, develop the 13 schedules for regulation, do some pilots, develop whatever 14 draft rules are needed to regulate, and then train up the 15 people who are necessary to do this job.

16 In sum, this is not an easy task to undertake.

17 None of these things ever are, but it seems to me that 18 whether you pick a five-year period of time or a ten-year 19 period of time, the time is today to start working on this.  !

20 So we appreciate the opportunity to chat with you.

21 CHAIRMAN JACKSON: Thank you, Mr. Under Secretary. I 22 Let me begin by asking you a few questions and 1

23 then I'll defer to my Commission colleagues.

24 This ten-year schedule, is this related to a specific plan that DOE has relative to decommissioning or 25

. \

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23 1 closing?

L 2 MR. GRUMBLY: No. No, this is not for example 1

3' related to the Environmental Management Ten Year Plan that's i 4 been out on the street.  !

l l- 5 I mean it happens to coincide but it wasn't f

6 developed that way. It was simply the Task Force's best '

7 estimate at the time of what it would take to get from here 8 to there in a way that was orderly and that could meet the 9 demands that~we have, but it is not written in stone. There 10 .are certainly ways-to accelerate it, if we should want to do 11 that, and we think that that would be feasible too.

12 Frankly, if we get the sense mutually that there's 13 sufficient political support for this, we could advance the 1 14 time period quite considerably.

15 CHAIRMAN JACKSON: I am looking at this number. l 16 This is on page 7 of the regulated facilities, and you 17 reference a decreasing number of facilities.

18 MR. GRUMBLY: Right.

19 CHAIRMAN JACKSON: And I guess I am interested l

20 does this relate to a known plan for the closure of -- ]

l 21 MR. GRUMBLY: This represents, as I understand it, l 22 and Ray Pelletier is here -- why don't you jump in, since 23 you put the number together? -- this relates to a roll-up of {

24 an information call that we made from our field offices 25 based upon the best currently available targets estimates  !

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24 1 that we have from the Office of Management and Budget, but 2 fundamentally the views of our people i,s that a lot of this 3 is not related to -- within certain bounds it's not related 4 to whether the department has 5.4 or 5.7 or 5.9 billion 5 that, you know, while there's -- I wouldn't want anybody to .

6 hold me to a point estimate in any given year that roughly 7 how this is how things are going to be, right?

8 MR. PELLETIER: That's accurate, Tom.

9 We simply ask the sites in five years which 10 facilities will be expected to be shut down, which 11 facilities you expect to continue operating for some time, 12 and they gave us back numbers and we just plugged them into 13 the graph.

14 CHAIRMAN JACKSON: Okay. Could you give me -- you 15 mentioned D&D facilities -- facilities undst Decommissioning 16 and Decontamination would be under EPA and not NRC with the 17 knocking down of buildings, so I would take it that the 18 Hanford Tank Waste Remediation project is not a knocking 19 down of buildings?

20 MR. GRUMBLY: No, we would envision that being one 21 of the early entrants into this program.

22 CHAIRMAN JACKSON: Okay. Then if I am looking at 23 page 8. I am going to try to go fast here. These costs are 24 on an ongoing basis and therefore do not include what the 25 transition costs would be?

i l

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- . . - .- . -._ - - - - . .- _ = --_.- - -- -

25 1 I mean --

2 MR. GRUMBLY: Well, these are costs to you, now.

3 These are not costs to the DOE system, right?

4 MR. BERUBE: That's right. When the Advisory 5 Committee that Mr. Grumbly mentioned earlier was conductin'g 6 its study, it requested from NRC Staff an estimate of the 7 costs and what we did was adjust that cost estimate to _

8 reflect the decreased universe of facilities, down from 600 l 9 to roughly just a little over 200, and then we ran that very >

10 rough estimate by NRC Staff, and so there is general f 11 agreement that that is order of magnitude corre'ct.

12 CHAIRMAN JACKSON: No, I understand. I guess what 13 I am.really trying to get at though is the following.

14 You mentioned not having cliff regulations.

15 MR. GRUMBLY: Yes.

16 CHAIRMAN JACKSON: And therefore, you know, one .

17 would have some transition period, and so you imagine during 18 that transition period all of the costs would be borne by 19 DOE, is that correct?

l 20 MR. GRUMBLY: Right.

21 MR. BERUBE: Right. This chart is merely NRC 22 costs, not DOE costs associated with the transition.

23 CHAIRMAN JACKSON: Right, but -- okay. With the i

24 transition itself --  ;

25 MR. BERUBE: Getting the facilities --

lt I .

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m .- . . . _ __ _ - . ._ _ . . _ . . _ . . - . __ - _ . . _. . . . _ _ -.

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26 1 MR. GRUMBLY: In shape.

I-l 2 MR. BERUBE: -- upgraded - ,

3 CHAIRMAN JACKSON: In good shape.

l- 4 MR. BERUBE: -- so that we can transfer them over  ;

5 to external regulation by NRC. ,

6 CHAIRMAN JACKSON: Okay.

7 MR. BERUBE: There is a separate estimate of costs 8 associated with those upgrades, and it is a rough estimate  ;

9 that we have used. It's 10 percent of the amount that we [

10 spend on safety and health within the DOE complex.

i 11 MR. GRUMBLY: Just to give you a sense of this, 12- we -- our current, if you look at the President's budget for 13 fiscal year 1998, you'll see for example an environmental l 14 program estimate that goes out through -02 of about $5.5 15 billion.

16 CHAIRMAN JACKSON: Yes.

17- MR. GRUMBLY: Steady, right? We expect that 18 sum -- but then you can look at the facility aspect and see  !

19 the number of facilities going down in that period of time.

20 CHAIRMAN JACKSON: Right.

, 21 MR. GRUMBLY: So conceptually what we are going to .

22 be doing is funding whatever improvements that we have on 23 the difference between, as we bring facilities out of 24 service, how we have to shift funding to improve those 25 facilities that still exist.

P l .

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27 1 ,e W don't want to be in the business of making 2 major upgrades on facilities that are not going to be 3 cperational by the time you get around to them.

4 CHAIRMAN JACKSON: Yes. I guess all I am really 5 trying to understand is what we mean by annual costs to NRO.

6 Let me explain to you_what I mean.

7 Today if we in our regulation of a reactor site --

8 I don't know -- you know, we are 100 percent fee-based. I 9 think this is all in the public domain. We're tatning 10 roughly $3 million per reactor site.

11 So if I look at this viewgraph that says 200 12 facilities and realizing that they are different, okay, you 13 know, out at some 10 year window after the legislative 14 phase, then you are talking 200 facilities for $75 million, 15 and so my mathematics -- that is what I am trying to talk 16 about when you talk about the apportionment of costs, you I 17 know, what do we mean?

18 Do you mean some kind of infrastructural cost to 19 NRC on_which other costs would be added? See, that is all I ,

20 am really trying to find out.

l 21 MR. BERUBE: Okay, and let me answer by indicating 22 that again when the Advisory Committee was doing its study 23 it came to NRC Staff, which applied these cost factors by l 24 the different types of facilities.

25 CHAIRMAN JACKSON: Okay.

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28 1 MR. BERUBE: Now we have lumped all of the 2

facilities together but -- and then just simply pro-rated 3

down, but we think it's still a representative estimate of 4

the cost that includes all of the things that you did 5 mention.

• 6 CHAIRMAN JACKSON: Okay, so let's round this up to 7

$100 million -- so we are saying $100 million for 200 8

facilities, so you are basically talking about some kind of 9

averaged, amortized -- you know, annualized cost of on the 10 order of a half million, where some could be more and some 11 could be less. Is that the point?

12 MR. BERUBE: Yes, although I feel fairly 13 comfortable with the $75 million.

14 [ Laughter.)

15 CHAIRMAN JACKSON: I know your point. Okay. Let 16 me just ask you a couple quick questions about the 17 legislative phase, and then I'll defer to --

18 MR. GRUMBLY: Because if it gets to the $600

'19 million phase we can forget about this.

20 CHAIRMAN JACKSON: What assistance or working 21 relationship would DOE expect from NRC during the next two 22 years while we're in the legislative phase.

23 MR. BERUBE: I think that the task force that the 24 Commission is proposing to create and deal with all of these <

25 issues, the policy, legal, technical issues, is exactly the ,

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29 1 thing that we need at DOE to interact then with NRC. j 2 I think we need to work on identifying likely 3 pilots, the additional MOUs that will allow NRC to work with i 4 DOE in all of this over the time that it takes to get the 5 legislation enacted.

6 CHAIRMAN JACKSON: Have you yourself created a 7 task force that would be -- have you identified a group and 8 a point person that would work with our task group to move 9 things along in this phase?

10 MR. GRUMBLY: Well, you can bet that Dr. Berube 11 here is going to be central to that as well as Ms. Sullivan

-12 in the General Counsel's office, but really we were -- you 13 know, we have had a Secretary for 17 days now and actually I .

14 think that the fact that this was on his agenda as early as i 15 it was is interesting, but we'll be identifying a task force 16 now that we have his direction to move forward so that we 17 can do the kind of interaction that you are talking about.  :,

1 18 CHAIRMAN JACKSON: Okay. Let me ask you this.  ;

}

19 Has DOE developed any preliminary legislation that )

20 would in any sense transfer a regulatory responsibility or 21 be enabling in any way at this point, and if so, can you 22 describe it?

23 MR. GRUMBLY: We have a draft but it is very much 24 a preliminary draft at this point and I think we would 25 probably prefer --

i i

1- 1 i

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1 30  !

1 CHAIRMAN JACKSON: Not to have to --

l 2 MR. GRUMBLY: -- not to embarrass ourselves by  !

~

3 describing it in detail at the moment. i 4 Mary Anne?

5 MS. SULLIVAN: I have not actually even seen the .

6 draft. It's in n very preliminary stage. ,

7 CHAIRMAN JACKSON: So you have not had an ,

8 interaction with NRC attorneys on this -- i

(

9 MS. SULLIVAN: Not yet.

10 CHAIRMAN JACKSON: -- this draft. l 11 MR. GRUMBLY: No. We have really been waiting for ,

t 12 this little watershed to make that happen. -

i 13 CHAIRMAN JACKSON: Then one last thing. I want to  ;

14 revisit the question of the sense of Congressional support  ;

i 15 for this proposal.

16 You mentioned this was, as you say, in non- .

i 17 psychiatric terms a bipolar response.

18 But there was support for in some sense advancing 19 things. Is this response bipartisan where it is positive?

20 MR. GRUMBLY: Yes, I think I can say that.

21 It's actually been quite surprising to me to go up 22 on the Hill to committees like -- and this was just at the 23' staff level -- I want to emphasize that. I haven't talked 24 about this with any of the principals so far, but at the ,

staff level of several of the committees there's been a fair 25 r

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i 31 1 amount of interest in accelerating the proposal.

2 I think, you know, the interest really stems from 3 trying to get as clear as possible a sense for who is really 4 regulating DOE.

. 5 One of the problems that we have, Madam Chairman, 6 is a lack of clarity sometimes about roles and 7 responsibilities, and if you have too many people engaged in 8 giving too much direction to the same people, what we end up 9 having is multiplying costs rather than eliminating them.

10 Actually, a lot of the interest is driven by a 11 desire to drive down the costs of health and safety 12 regulation in the Department, so, you know, we certainly 13 still have all the support that we had from Congressman 14 Miller and other people who initially suggested this who 15 came from the Democratic side of the equation, and what I 16 have been surprised at is how much support has been building 17 for this frcm the Majority side of the equation at the 18 moment.

19 CHAIRMAN JACKSON: You mentioned having not so 20 many different regulators but you do reference EPA, OSHA and 21 then there is the issue of the states.

22 MR. GRUMBLY: Just like any other corporation.

23 CHAIRMAN JACKSON: Okay, so you are thinking of 24 delineation of responsibility in a way not unlike there 25 would be delineation today for private entities bem an --

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-1 MR GRUMBLY: Yes.

2 CHAIRMAN JACKSON: -- between OSHA, EPA -- 1 3 MR. GRUMBLY: Yes. The basis for this support, 4

frankly, inside the Administration rests on a simple 5 premise: the Department of Energy should be treated as much -

6 like corporate America as possible.

{

7  !

Recognizing the difference that we get our money  !

8 the old-fashioned way -- it's appropriated -- but 9

nonetheless the intellectual model is behave and be seen as 10 much like the private sector as possible.

11 CHAIRMAN JACKSON: Okay. Commissioner Rogers.  ;

12 COMMISSIONER ROGERS: Well, just coming back to 13 the cost question, I know you've got a lot of things rolled i i

14 together here in the facilities definition, but what is a 15 facility?

16 MR. BERUBE: It's everything from a. reprocessing {

l 17 canyon to a hot cell. And we actually do have a detailed 18 list of facilities that we would envision as our next step,

. 19 sitting down with NRC staff and working through this in a 20 very detailed manner.

21 COMMISSIONER ROGERS: Well, I was just trying to -

22 make a little sense out of, you know, trying to correlate {

23 the schedule on page 6 of what happens in the first five, 24 the next five, and after that years, and the types of facilities that NRC would be taking over regulation of and 25 I

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33 1 how that might relate to the cost question. In the first 2 five years what do you see as the mix of hot cells to larger 3 facilities? What is that, and how does that compare with 4 the next five years?

I 5 MR. BERUBE: Okay. In fact the phasing program 6 that we came up with reflected the different types of 7 facilities as well as the numbers. And Ray, help me on 8 this, but as I recall, given that total universe, the ER --

9 energy research -- and nuclear energy facilities account for 10 about 20 percent of the total universe currently of nuclear 11 facilities. Now in addition that population includes things 12 for which NRC currently regulates in the private sector, 13 some research reactors, for example, and other things like 14 that. So it seemed to us to make sense that that's where we 15 should start this transition.

16 Now in addition, though, given that the end point 17 here, this anticipated, this NRC regulation of everything, 18 anything new, any new nuclear facility, would just seem to 19 make good, common sense to start NRC involvement in that on 20 day 1 as opposed to doing it some other way and then running 21 into a major obstacle. So that's the terminology on 22 selected DP and EM facilities. What we have in mind there 23 are the new nuclear facilities.

' Now, that second phase then, what's happening 24 i 25 there, as Mr. Grumbly indicated, is the second phase really l l l

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34 1 picks up all of the environmental management facilities, but 2 what's happening over time with those, a lot of them are 3 being shut down, Aad more important with respect to nuclear 4 safety, the nuclear 1.azard, hopefully will be redressed at 5 that point in time. -

i 6 Now that's the concept generally. I think again 7

we need to work out site by site and facility by facility 8' with NRC staff whether that in fact is the case, and to the extent it's not, then we're going to have to make some 9

10 contingency plans for those.

11 MR. GRUMBLY: It's probably worth noting that part 22 of the proposal, at least in the report that Secretary 13 O' Leary accepted, is that if you were to follow this model  ;

14 at the end of the five-year process you would have to lay a 15 proposal on the table really with the Congress to flip to 16 the next round, which is to say the President would get 17 another bite at this apple. So either on a facility-by-18 facility or groups of facilities, the -- you know, we don't 19 envision just tossing these over the transom at somebody 20 before they're ready to be regulated by somebody else.

21 There has to be some fail-safe systems built into this.

22 MR. BERUBE: And then the third phase picks up 23 what's left of the defense weapons complex at that point in 24 time, which may not -- definitely will not include the sort 25 of nuclear facility production facilities we had in the ANN RILEY & ASSOCIATES, LTD.

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35 (

1 past, So that's the general concept behind this phasing. .

2 And as Mr. Grumbly is pointing out and what we tried to f, 3 depict in this chart on page 7 is that what's envisioned j 4 here is a ramping up and not a sudden step function. And

~, ' 5 during the first phase where we're moving toward external

6 regulation of the energy research and nuclear energy 7 facilities, we'd be planning for all of the environmental 6 management facilities, laying out detailed schedules for 1 9 getting those facilities that will come under external 10 regulation upgraded. So it's all a phasing approach to this ,

{

11 transition.

12 COMMISSIONER ROGERS: Well, what I was looking at 4 13 is the annual cost to NRC, and I noticed that, you know, r

j 14 there's a slope change between the first five years and the 15 second five years, and there's also a slope change in the -

16 cost and also in the number of facilities. Are they i 17 disproportional. In other words, is it the same cost per .

18 facility in the first and the next five, and the only change 19 in the slope of the cost is because the number of regulated ,

20 facilities is going up more rapidly?

21 MR. BERUBE: Yes.

22 COMMISSIONER ROGERS: So that doesn't take into 23 account anything about the nature of what might be different 24 in the next five from the first five? i 25 MR. BERUBE: That's right. It does not. And we I 1

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a

l 36 1 envision, again, this cost estimate -- I 2 COMMISSIONER ROGERS: It's a very rough cut.  ;

3 MR. BERUBE: That's right. It was prepared just 4 to answer the general question how much is this going to 5 cost, how much will it cost NRC, how much will it cost DOE? .

6 And we acknowledged the need to get down to a finer level'of 7 precision with respect to budget requests.

l 8 MR. GRUMBLY: Am I right, Ray, to emphasize again l 9 that this cost estimate was one that was developed with the 10 NRC staff?

l 11 MR. BERUBE: We took the original NRC staff I

12 estimate that was done for the advisory committee and then j 1

13 made a pro-rated adjustment to it and explained to NRC staff ,

1 14 that that's what we had done. There was general agreement 15 that this was ballpark okay.

16 COMMISSIONER ROGERS: I think that the ballpark 1 17 characterization should be emphasized.

18 MR. GRUMBLY: Having said that, I think it's 19 important to emphasize that I was not being facetious 20 before. If the cost of this starts to get up in the quarter 21 of a billion dollars a year category, we can forget about 22 getting that money from the Congress. So I don't know where 23 the notch point is in this, but speaking as a short-timer, 24 it's something that people better take into account and not l

25 let the cost of this grow dramatically or, you know -- l 1

I

. l ANN RILEY & ASSOCIATES, LTD. l Court Reporters 1250 I Street, N.W., Suite 300 Washington, D.C. 20005 (202) 842-0034

i 37 1 CHAIRMAN JACKSON: Let me make a comment. .

l 2 actually, which may relate to the notch point. You know, l 3 you talked about facilities, your new facilities, or 4 facilities that look like or are like facilities the NRC

. 5 currently regulates. You also talk about the legislative 6 phase activities in terms of initiating pilots. So the 7 question I was going to ask is kind of a follow-on in terms 8 of this, it falls into the financial part, is do you 9 consider the initiatives to first of all include the pilots, 10 rather to include initiatives already under way, such as the 11 Hanford.

12 MR. BERUBE: Yes.

13 CHAIRMAN JACKSON: Secondly, would you intend for 14 the pilots to be risk-informed, that that sould be a 15 selection mechanism out of E possible universe, because in 16 principle that could be a model and would define a notch 17 point, so to speak.

18 MR. GRUMBLY: I certainly think that would be one 19 of the major considerations, yes, perhaps not the only one.

20 COMMISSIONER ROGERS: Yeah, well I think that, I 21 don't know, I don't know exactly what the NRC staff took up 22 with you in detail, although we did see preliminary 23 estimates of this over a year ago or so, and they were very 24 rough, I mean, they were very rough. So my only point is

~

25 without being unkind I would be cautious about how ANN RILEY & AF30CIATES, LTD.

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38 1 comfortable you feel with that $75 million.

2 MR. GRUMBLY: I just want to --

3 COMMISSIONER ROGERS: You know, there's a lot of 4 review has to go in as to what kinds of facilities, and even 5 so, I don't think probably our staff would be willing to say .

6 that, you know, that's a final number that they si:pport at 7 this point. I think you have to see how the analysis comes 8 out.

9 MR. GRUMBLY: I want to be clear, Mr. Rogers, that 10 the first draft, as I understand it, numbers that you saw 11 had an assumption in it that you were going to regulate 630 12 facilities. So one of the major drivers in the initial 13 staff estimate was the numbers of facilities, and that's 14 been changed quite a bit.

15 COMMISSIONER ROGERS: Well, you take the 600 and 16 divide it by some total -- to take some total number and 17 divide it by 600 and then take that number and start using 18 it when you get down to the smaller number of facilities, 19 you're going to be in real trouble.

20 CHAIRMAN JACKSON: I think though that it's clear 21 that we're not going to work out a number here at this 22 table, and therefore the actual wiggle room is somewhere 23 between perhaps this initial slice and what the Under 24 Secretary refers to as the notch point, and so we work at 25 it. '

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39 1 MR. GRUMBLY: I would just urge you to consider 2 the fact that for whatever its problems, the defense nuclear 3 facilities safety Board oversees the entire DOE complex for 4 $16 million.

5 CHAIRMAN JACKSON: Well, as I say, we'll stay i

6 where we were. )

l 7 COMMISSIONER ROGERS: It's irrelevant.

l 8 MR. GRUMBLY: Not irrelevant to them. l 9 COMMISSIONER ROGERS: Well, it is to me.

10 At any rate, let's turn to slide 10, and what 11 happens at the end of five years in the little vertical 12 dotted line between partial external regulation and complete 13 external regulation? What do you see happening at that 14 point, and who do you see involved in deciding whether 15 that's ready to happen to go from phase 1 to phase 2?

16 M". BERUBE- Okay, what we had envisioned is 17 basically a status report reporting back on how phase 1 went 18 in terms of the transition, the associated cost, problems 19 that were encountered, and then it provides for the 20 Secretary to make a recommendation to the President as to 21 whether or not to continue into phase 2, and the President 22 turn to Congress and, as I recall, we have a few different 23 options on how that legislation could work. It could be a i

24 lie-before-Congress mechanism where the -- unless the two  !

' l 25 Houses of Congress -- and Mary Anne, maybe you can help me

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40 I with this,one -- objected, the implementation program would 2 go forward if that were the President's decision.

3 MR. GRUMBLY: Right.

4 MR. BERUBE: There's an element of that that's 5 related to the cost, because there was concern -- and again

• 6 I think this has to do with the total universe of facilities 7 that we originally were talking about, the 630-plus --  !

1 8 concern that if you tried to have all those facilities 9 operate under NRC regulation, there wasn't enough money in 10 the Treasury to do that, and of course that isn't what the 11 plan is, and it wouldn't make a whole lot of sense to  !

12 develop a regulatory structure for facilities that are out 13 of operation and going to be D&D'd. So to address that 14 concern we provided this relief provision that would allow a 15 revisit of cost in other aspects of this before going to the 16 next phase and then finally the same thing for the final 17 phase.

18 CHAIRMAN JACKSON: Commissioner Dicus.

. 19 COMMISSIONER DICUS: Yes, let's go to slide 5 on 20 the key considerations, and it's a question that the 21 chairman has already addressed with you, but I want to take 22 it a step further or get it clarified. This is on the 23 single entity regulating nuclear safety, and together with 24 what the role of the States may be. As we all know, you 25 have activities at the facilities, such as accelerators, X-ANN RILEY & ASSOCIATES, LTD.

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I I

i l

41 ,

l 1 rays, which we do not regulate. So is it clearly understood l 2 that that would not necessarily change, but you would work

, l 3 with the States for that regulatory --

4 MR. BERUBE: Yes. Yes, it is. l 5 COMMISSIONER DICUS: That would be coordinated in l 1

6 some way with this 10-year plan? I 7 MR. BERUBE: Yes, ma'am.

8 COMMISSIONER DICUS: Then go to -- and not to beat l

9 a dead horse -- but go to slides 7 and 8. Just a couple of l l

10 points that I want to make.

11 It seems as though these cost considerations, and 12 we all know we can't come up with a figure, and we're not  ;

13 interested in doing that, but we're interested in looking at 14 trends, and some concepts here. I'm very much keyed on this 15 number of facilities going down. Now what is this doesn't j 16 happen, this schedule is not made? That changes obviously I

17 the slope and everything else here, and I simply want to 18 make that point.

19 The second point, I think you said you're 20 considering in the neighborhood of 10-percent increase in 21 cost over what the facilities are costing now to bring them 22 up to a standard, did I hear that right, for roughly 23 that's --

24 MR. BERUBE: Ten percent. J

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25 COMMISSIONER DICUS: Is that across the board?

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l 42 1 ,MR. BERUBE: Yes.

i

' 6 2 COMMISSIONER DICUS: For all of the facilities, or 3

some will be more and some will be less?

4 MR. BERUBE: We used a rough approximation of 10 1

5 percent, and we based that on a limited benchmarking study,

• 6 we went to some NRC-regulated entities to get an indication 7 of what sort of cost increases they believe are related to 8 NRC regulation. Interestingly, some of them pointed out, by

9 .the way, that they think actually they have cost reductions 10 associated with NRC regulation. But it ranged from 4 11 percent to 24 percent, but a strong grouping around 5 to 10 12 percent. Then we used the 10 percent to be conservative in 13 trying to develop our estimates, and we applied that against 14 what the Department is currently spending for health and 15 safety. The Department of Energy does not budget separately 16 for health and safety, so all you can do is come up with j 17 estimateb.

18 COMMISSIONER DICUS: Okay. I was a little l

19 concerned about the 10 percent and how you arrive at the {

20 figure. Having had experience in dealing with the gaseous 21 diffusion plants, you know, there were some -- a lot of 22 money had to be spent to bring those in.

23 MR. BERUBE: We also looked at the experience with 24 the gaseous diffusion plants to try to validate the 25 estimates, and I don't think it would have been correct to '

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43 1 use the uranium enrichment plants, the gaseous diffusion 2 plants, as representative for everything in the Department.

3 COMMISSIONER DICUS: And I would agree.

4 MR. BERUBE: We ran a rough validation.

. 5 COMMISSIONER DICUS: What about also, one final 6 point, and then we can give up the mike, as it is, but what 7 about unknowns, for example, the Brookhaven Laboratory 8 problem. Those considerations are out there. Is that built 9 in -- that has to be built in. .

10 CHAIRMAN JACKSON: Do you have a contingency --

11 COMMISSIONER DICUS: A contingency plan.

12 CHAIRMAN JACKSON: For emergent issues.

13 MR. GRUMBLY: No, we don't have a contingency for 14 emergent issues. What we have is -- for example, what we 15 have to do at the moment is take a look at all of our 16 programs across the Department and see where we could put 17 the money together for the appropriate reprogrammings to 18 deal with this situation at Brookhaven. But I actually 19 think that that situation actually argues this case, in that 20 my very strong belief is that if you all had been regulating 21 Brookhaven over the last 10 years that at the very least the 22 pool -- the fuel pool leak is something that (a) would have 23 been identified sooner and, two, would have been remediated 24 sooner. So I'm hopeful that -- actually we use Brookhaven 25 as an example of what we can avoid rather than what we have l

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l 44 l

1 to budget for.

2 COMMISSIONER DICUS: Well, I tend to agree with 3 you, but, you know, the point is if we --

i 4 COMMISSIONER ROGERS: I understand.

5 COMMISSIONER DICUS: Already taken Brookhaven over

• 6 and then discovered this problem.

7 MR. GRUMBLY: Well, but let me emphasize the i l

8 necessity to, I think, get into the ramp up so that we l 9 really are planning beforehand with some degree of certainty 10 so that we encounter whatever additional problems are going 11 to be before we make it subject to your regulatory 12 authority. Now I can't guarantee that if you were to take 13 over energy research reactors tomorrow the rest that you 14 wouldn't have found this problem. Obviously you would have, 1 15 and that would have been some difficulty.

16 CHAIRMAN JACKSON: That's why it's a ramp up.

17 MR. GRUMBLY: Yes, yes.

18 CHAIRMAN JACKSON: Anything else?

l 19 Commissioner Diaz.

20 COMMISSIONER DIAZ: Yes. You talked earlier about 21 work protection and OSHA and I guess the report from the 22 National Academy of Public Administration recommends that 23 radiation protection be given to OSHA. Has DOE revised that 24 position to consider that actually we do radiation 25 protection?

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45 1 MR. GRUMBLY: I think that we recognize that we 2 have to reconcile that position. We haven't done so yet.  !

l 3 CHAIRMAN JACKSON: Anything else?

4 Commissioner McGaffigan?

~

5 COMMISSIONER McGAFFIGAN: I'm going to beat on the 6 dead horse, the cost horse. That slide number eight, one j 7 thing that I think is clear is the slope that the intercept l 8 at year zero isn't zero. We're already looking forward to

! 9 Hanford tanks, we're budgeting $2 million this year to just l l

i 10 do something that we don't really have authority to do yet 11 until we get some legislative -- that we wouldn't be able to 12 do if you returned to us in 1999 or 2000.

13 So there is some number, and it may well be close 14 to $10 million, as you start to think about a bunch of sites 15 that you have to -- we have to get our regulatory framework 16 in place and work with you and we will have very complex 17 sites like the Hanford tank vitrification and then we will 18 have some much less complex sites. So I think there is an 19 intercept there above zero and maybe the staff can work out 20 what it is.

21 I also am impressed. Commissioner Dicus referred 22 to the USEC case and we all have to hope that that isn't 23 going to be typical but that -- your report refers to an e

24 enlightened compliance regime and we did something with the 25 gaseous diffusion plant short of full licensing ANN RILEY & ASSOCIATES, LTD.

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l 46 i

l 1 certification and it was intensive on our part. The staff 2 could give you the dollars. And it was terribly -- the 3 number, I think, that has been cited to me is it took $200 4 million to get those plants -- DOE cost, not NRC cost -- to 5 get those plants up -- or USEC costs -- to get those plants .

6 up to where they needed to be; 170 of that was what they had 7 to spend to get them up to the place where they should have 8 been and 30 of it was whatever additional costs we imposed 9 through the licensing process. At least that's what I have 10 heard.

11 So my sense is, looking at your complex and having 12 some experience with it, there may well be a few others like 13 that out there that are going to be outliers where this 10 14 percent is going to prove to be just way, way off. Ten 15 percent may well be accurate for many of the less complex 16 facilities but for these, you know, I can think of several 17 other cases which are likely to be ongoing which may 18 surprise us sharply on the upside and I just make that 19 point.

20 MR. GRUMBLY: I take that point as the same one 21 that Commissioner Rogers was making, that there is going to 22 be quite a bit of variability in terms of what it costs to 23 get in compliance. We do have some numbers and maybe I can 24 submit these for the record but just to put the gaseous 25 diffusion plant costs into some kind of perspective, the ANN RILEY & ASSOCIATES, LTD.

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47 1 operating costs over four years for the gaseous diffusion 2 plants is about $2.4 billion. Our best estimate on the 3 corrective action costs were 105 million on top of that.

4 The NRC certification costs were 3 million and the 5 DOE certification costs were 35. So if you actually look at 6 the corrective action costs, as a percent of the total 7 operating costs of the facility, it actually is inside that-8 10 percent range that we were talking about.

9 Now, you're right, we can't afford at every 10 facility, I mean, gosh, if each facility were to cost that 11 amount of money, we would be cooked. So that is not 12 certainly what we envision.

13 I do think that the gaseous diffusion experience 14 points out the necessity for another point that was made 15 here. We talked about flexible regulatory approach. It 16 does seem to me that there are a lot of lessons that can be 17 learned on both sides from the gaseous diffusion experience 18 and we ought to spend some time making sure that we have 19 learned all those lessons so that we don't have an unduly 20 expensive process as we go forward.

21 COMMISSIONER McGAFFIGAN: Your report refers to a 22 workable, enlightened compliance regulatory framework. I 23 don't expect that is again something the staff may flesh out 24 a bit. But what do you have in mind?

25 Do you believe that any of your sites, take the ANN RILEY & ASSOCIATES, LTD.

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48 1 ones that you are proposing the first few years, the NE and 2 ER sites, do you think that they can come in and apply for 3 broad scope license and really be licensed or even the less 4 complex, familiar sites do you think will have to make 5 adjustments?

• 6 MR. BERUBE: I think there is potential there but 7 we have to work a lot more details out with NRC staff. The 8 concept of the enlightened compliance was not ours; we stole 9 that. We borrowed it from NRC. It is basically dcing 10 things better and smarter and, yeah, there is always 11 opportunity for that. Performance based.

12 CHAIRMAN JACKSON: They got it from the i

13 certification process.

14 COMMISSIONER McGAFFIGAN: Nick Timbers may have 15 some views on that.

16 The enforcement aspect, once we have this 17 regulatory framework in place, and this is really following 18 up again on one of Commissioner Dicus's questions, and we 19 have a problem arise and it is not the current contractor's 20 fault perhaps or, I don't -- you know, it will depend on 21 some fairly complex contract clause as to whether you guys 22 try to blame the contractor or they try to blame you. How 23 do we enforce at a site or facility, it's facility by i 24 facility, as I understand it, not site by site, where we, as 25 the regulator, find you and your contractor going like this. i ANN RILEY & ASSOCIATES, LTD.

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49 1 MR. GRUMBLY: Mary Anne, why dcn't you talk about 2 how we are enforced against in che environmental arena at 3 the moment.

4 MS. SULLIVAN: There is some variability. At many

. 5 of our facilities, both DOE as owner and the contractor as 6 operator are on a permit, on a license and the state 7 regulators are free to enforce against either or both.

l 8 Whatever contract disputes may exist between DOE and its M&O 9 contractor should not have the NRC entangled.

10 Whoever you hold liable will be liable and then we 11 fight out with our M&O contractor whether they are 12 responsible for a fine or penalty or corrective action or we 13 are. But you will have clear regulatory authority to 14 enforce against whoever is on the license or the 15 certification.

16 CHAIRMAN JACKSON: You realize that part of what 17 happens in enforcement space is not just civil penalties but 18 the ability to shut a facility down for cause.

19 MR. GRUMBLY: We have that now.

20 COMMISSIONER McGAFFIGAN: In the area of pilots --

J 21 MR. GRUMBLY: From the public's perspective, that 22 has to be the case. If you don't have that capability with 23 respect to us, this is a paper tiger.

24 COMMISSIONER McGAFFIGAN: In the area of pilots, 25 again looking at these early phase projects, the NE and ER, ANN RILEY & ASSOCIATES, LTD.

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50 1 you currently regulate them through contract clauses 2 largely, is that -- I mean, contract clauses and various 3 orders that come out through the DOE system. How -- if you 4 try to do one, earlier, Tom, you talked about doing 5 something as quickly as possible at some of the ER sites. -

6 How quickly could you -- are you going to have to 7 renegotiate contracts and take some of those contract 8 clauses out or how complex is the interaction between this 9 regulatory change that you are proposing and your  ;

1 10 contracting system? l 11 MS. SULLIVAN: We will have to renegotiate l 12 contracts because we do currently regulate through our 13 contracts. But there will be a period required to draft and I

14 implement legislation and any contract amendments could be 15 accomplished during that time frame.

l

)

16 I will tell you that particularly at the NE and j 9

17 the ER facilities, our contractors are champing at the bit 18 to be regulated by NRC. So we would expect to be able to 19 move through the contract negotiations expeditiously.

20 Certainly I would not expect that to be the lagging item.

21 COMMISSIONER McGAFFIGAN: So that might 22 take -- that would have to wait for the legislation to be 23 completed and then very quickly negotiated after that? Or 24 could you do them ahead of time?

i 25 MS. SULLIVAN: My assumption is we could be ANN RILEY & ASSOCIATES, LTD.

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51 1- working in parallel, recognizing that final action on a 2 contract would have to await the shape of the final 3L legislation.

4 MR. BERUBE: Related to that, we have already

. 5 initiated.within DOE, but we need to work this with NRC 6 staff a comparability study, looking at the DOE orders and 7- seeing how they compare with NRC requirements- . To the 8 extent there is close comparability, that is going to make 9 that transition a whole lot easier.

10 MS. SULLIVAN: In fact, in our recent rulemakings, 11 as we have developed our rules, we have looked to the'NRC 12' rules' as a major source of learning.

13 CHAIRMAN JACKSON: Being the lawyer, do you have 14 any particular caveats or thoughts about the legislative 15 phase that we need to hear about? I mean, I know you said 16 you are not comfortable, _that the draft is so much a draft, t 17 nor have you.seen it, that you would not like to comment.

18 But we --

19 MS. SULLIVAN: I have been involved in discussions 20 toward tho development of the draft. I just think our own 21 thinking has been evolving about what's needed. As the L

22 lawyer, I would only say we need the legislation to be clear l

r 23 so that everybody knows what the rules of the road are. But i

! 24- I have been working with this working group for over a year 25 now and I think that this can only improve nuclear safety in l ANN RILEY & ASSOCIATES, LTD.

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52 1

DOE" facilities so I strongly-support it. I 2 t CHAIRMAN JACKSON: Any respon,se from our lawyer? t i

3 MS. CYR: t I think she's right. It would certainly '

4 add clarity to the situation. ,

5 I CHAIRMAN JACKSON: Commissioner McGaffigan?-

• 6 COMMISSIONER McGAFFIGAN: That'is all I had.

7 Although speaking as a former congressional aide, if you 8 expect clear legislation -- '

9 [ Laughter. ] i 10 MS. SULLIVAN: i We can always hope, 111 CHAIRMAN JACKSON: That's right. Hope springs 12 eternal.

i 13 Well, thank you very much, Mr. Grumbly, and your I 14 colleagues for a most informative briefing. i 15 As I had indicated in my opening remarks, the

-16 Commission does endorse the department's proposal for 17

. external regulation of nuclear facilities and believes that 18 external regulation by the NRC would serve the best-19 interests of the public and contribute to protecting 20 facility workers, the public and the environment. Today's 21 briefing was.a good start for the many interactions that 22 .will be needed between our agencies if this initiative is to 23 succeed.

24 In the staff requirements memorandum that the I

25 Commission issued last' Friday, the Commission directed the .

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53 1 staff to complete several of its directives by June 30 of 2 this year. Perhaps the Department of Energy as well as the 3 NRC task force can brief the Commission in that same time 4 frame on the status and progress that has been made on the

. 5 initiative at that point.

6 The Commission encourages the staffs of both 7 agencies to work together openly and cooperatively on a 8 project that the Commission believes will be challenging to 9 both agencies. But even though the Commission recognizes 10 the complexity of the tasks that lie ahead, we have

11 confidence that the external regulation of DOE's nuclear 12 facilities by the NRC can succeed in a manner that serves l 13 the public well. To that end, I would say that both DOE and 14 NRC need to develop on an expedited basis an MOU, a l d

15 memorandum of understanding, to establish the framework for i 16 the legislative and follow-on phases to identify key l l

17 regulatory and technical issues, to identify candidate 18 facilities.

4 l 19 Also, both agencies need to work with the OMB to 20 get relief from personnel ceilings, particularly for us.

21 But have you work with us for both the legislative and the 1

22 follow-on phases.

l 23 In the interim, I would ask DOE if you would study 1

24 the staff requirements memorandum from the Commission to the  !

25 staff because it is fairly detailed and prescriptive with l

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l l

54 i 1 respect to the issues we feel need to be addressed as well 2 as the approach that NRC would propose,to take. I would 3 also urge you to form a corresponding working group with a i i

4 designated point of contact. The designated point of i l

5 contact for us wi31 be Dr. Carl Paperiello, who heads our -

6 Office of Nuclear Materials Safety and Safeguards.

7 I would thank the Secretary and urge Secretary 8 Pena's continued support of this initiative.

9 So, unless my fellow commissioners have further 10 comments, we are adjourned.

11 [Whereupon, at 3:42 p.m., the meeting was 12 concluded.]

13 14 15 16 17 18 19 20 1

21 22 23 24

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l h

J CERTIFICATE This is to certify that the attached description of a meeting ,

of the U.S. Nuclear Regulatory Commission entitled:

TITLE OF MEETING: MEETING WITH DOE ON EXTERNAL j l

REGULATION OF DOE FACILITIES - PUBLIC MEETING I

PLACE OF MEETING: Rockville, Maryland DATE OF MEETING: Monday, March 31, 1997 was held as herein appears, is a true and accurate record of the meeting, and that this is the original transcript thereof taken stenographically by me, thereafter reduced to typewriting by me or under the direction of the court reporting company Transcriber: $lwtstL,nA,s,A,-ffhn#C Michael Paulus Reporter:

4 i

External Regulation

~

of Deparinient of Energy Nuclear Facilities Under Secretary Thomas P. Grumbly March 31,1997

t l

Briefing Roadmap i

l a.- r r ew.

' eme-w.m. <

e Current Regulatory Framework l,

e Historical Context e Key Considerations e Phased NRC Regulation j o Regulated Facilities ,

e Annual Costs to NRC e Benefits of External Regulation e Overview of the Future Schedule e Legislative Phase Activities 2

Current Regulatory Framework

--w. . vm ,

o Environmental - DOE is generally externally regulated e Worker Protection - DOE is currently self-regulated ,

e Nuclear Safety - DOE is generally self-regulated with some exceptions, e.g., geologic repository is regulated by NRC I

3 i

. _____ _7 l

Historical Context l

e March 1994 - Congressional proposals for  ;

external regulation of DOE nuclear facilities e January 1995 - Secretary responded by establishing an Advisory Committee e December 1995 - Advisory Committee Report l'

! issued with no recommendation on which entity should be the external regulator e January 1996 - Secretary created DOE Working

Group on External Regulation e December 1996 - Working Group Report issued and former Secretary selected phased NRC option i

Key Considerations o Single entity regulating nuclear safety e Flexible regulatory approach e Clear legislative authorities e Adequate transition planning e Realistic timeframe and scope  !

e Adequate resources e Opportunities for public involvement ,

i

Phased NRC Regulation j NRC DNFSB o 0 - 5 years -- Regulation of e 0 - 5 years - Current oversight selected DP & EM and all ER & of DP & EM nuclear facilities NE nuclear facilities e 6 - 10 years - Oversight of o 6 - 10 years -- Regulation of only DP nuclear facilities

! selected DP nuclear facilities i .and all EM, ER & NE nuclear .

facilities l

l .

e After 10 years - DNFSB staff o After 10 years -- Regulation of merges with NRC all DOE nuclear facilities 6

__J

Number of Regulated Facilities  !

.,m.,__ - . _

g .r., 4 ,*. ? ^

600

• l 1

500 -

e l 3 400 i

-Decreasing Number g .

a (Facilities

- 300 y i

.o /

E 2 0 0 -y --- g a ,

z Increasing Number f Regulated Facilities ,,

100 V  ;

O  :  ; ,  :  :  : il  :  :  : ,

2 3 4 5 6 7 8 9 10 11 12 l 0 1 Y e a rs 7 !

- . p &

Annual Costs to XRC

, - e e* w .

__ye,...,, i t

80

~

s 70 - t 60 r .

o 50

-High Estimate il -Low Estimate

/ I f  !

=

= , f t E 40 '

.c  ;

o 30 l

O i 2

20 f 10

/

i

!  ! l l l l l I 0  : I  !

O 1 2 3 4 5 6 7 8 9 10 11 12  :

i Years 8 i

[

l

[

t l

Benefits of External Regulation o Eliminates inherent conflict of interest from current self-regulation l e Enhances safety and health e Provides stable, efficient and predictable safety environment e Contributes to stakeholder involvement through '

open regulatory process; increases public trust l

and confidence e Enhanced safety provides for real cost savings i

l l

l

Overview of the Future Schedule v" - v~ " ' ' ' '

Development of 1,egislation Innlementation of Leeklation l

Legislative '

Proposal to ,t ;3g, g

'8"R'*55 I Enacted i

I-i Implementation Phase i Implementation Phase 2 Planning for External l Partial Extemal l Complete External i aci an i . tio. . ..~

i I

I l 1

5 YEARS 5 YEARS APPROXIMATElY 2 YEARS

~

10

l Legislative Phase Activities

^

..,...n.

~ - - - , . . .

i e Develop legislative proposal e Identify nuclear facilities to be regulated e Identifyldevelop standards to be applied to each facility e Develop facility schedules for regulation e initiate pilot (s) e Develop draft rule rzeeded to regulate e Training II i

r

_ - _ _ _ _ . - _ _ _ _ - - . - _ - - - _ _ _ - - - _ _ _ - - - _ _ _ . _ - _ - _ - - _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ _ _ _ - - _ _ _ _ _ _ - _ _ - _ - - - - - - _ _ _ - _ _ _ _ _ - - - _ - _ _ _ _ _ _ _ _ _ - - - _ _ _ _ _ _ - _ _ _ - - _