ML20155J598

Transcript of 981106 457th ACRS Meeting in Rockville,Md.Pp 319-450.Certificate & Supporting Documentation Encl

ML20155J598
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Issue date:	11/06/1998
From:	Advisory Committee on Reactor Safeguards
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ACRS-T-3056, NUDOCS 9811120215
Download: ML20155J598 (172)

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l T'S V -DISCLAIMER UNITED STATES NUCLEAR REGULATORY COMMISSION'S ADVISORY COMMITTEE ON REACTOR SAFEGUARDS NOVEMBER 6, 1998 The contents of this transcript of the proceeding of the United States Nuclear Regulatory Commission Advisory l( ) Committee on Reactor Safeguards, taken on November 6,

1998, as reported herein, is a record of the discussions recorded at the meeting held on the above date.

This transcript had not been reviewed, corrected and edited and it may contain inaccuracies. O

319 I 1 UNITED STATES NUCLEAR REGULATORY COMMISSION -2 ADVISORY COMMITTEE ON REACTOR SAFEGUARDS 3. c 4 MEETING: 457TH ADVISORY COMMITTEE ON REACTOR SAFEGUARDS 5 (ACRS) 6 7 U.S. Nuclear Regulatory Commission 8 Conference Room 2B3 9 Two White Flint North 10 Rockville, Maryland 11 Friday, November 6, 1998 12 13 The subcommittee met, pursuant to notice, at 8:30 14 a'. m. ( 15 L MEMBERS PRESENT: .16 DR. ROBERT L. SEALE, Chairman, ACRS 17 DR. GEORGE APOSTOLAKIS, Member, ACRS 18 DR. JOHN J..BARTON, Member, ACRS .19 DR. MARIO H. FONTANA, Member, ACRS 20' DR. DON W. MILLER, Member,'ACRS-21 DR. THOMAS S. KRESS, Member, ACRS

22 DR. DANA A.

POWERS, Member, ACRS 23 DR. WILLIAM L. SHACK, Member, ACRS 24 .DR. ROBERT _E. UHRIG, Member, ACRS -25 DR. GRAHAM B. WALLIS, Member, ACRS O' ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202)'842-0034

320 1 PROCEEDINGS (} 2 (8:30 a.m.] v 3 CHAIRMAN SEALE: The meeting will now come to 4 order. 5 This is the third day of the 457th meeting of the 6 Advisory Committee on Reactor Safeguards. During today's 7 meeting the committee will consider the following: proposed 8 inspection procedure for graded quality assurance; Salem 9 Nuclear Plant's Units 1 and 2; the report of the Planning 10 and Procedures Subcommittee; future ACRS activities; 11 reconciliation of ACRS comments and recommendations; and 12 proposed ACRS reports. 13 A portion of today's meeting may be closed to 14 discussion' organizational and personnel matters that relate f) 15 solely to the internal personnel rules and practices of this v 16 Advisory Committee and matters the release of which would 17 constitute a clearly unwarranted invasion of personal 18 privacy. t 19 This meeting is being conducted in accordance with 20 the provisions of the Federal Advisory Committee Act. Dr. 21 John T. Larkins is the Designated Federal Official for the 22 initial portion of the meeting. 23 We have received no written statements or requests 24 for time to make oral statements from members of the public 25 regarding today's session. r~s ANN RILEY & ASSOCIATES, LTD. (,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

321 1 A transcript of portions of the meeting 16 being i i t l () 2 kept and it is requested that the speakers use one of the , %_) 3 microphones, identify themselves and speak with sufficient 4 clarity and volume so that they can be readily heard. i 5 I would like to ask the members' cooperation in i 6 helping us to assure that we don't get bogged down in the 7 detailed final editing of our letters later on in the L 8 meeting. We have gone through several of the letters now 9 and received what we are led to believe are the major 10 comments regarding content that individuals may have. If 11 you feel there's some issue that has not been aired yet, we 12 would appreciate your getting that information to the 13 subcommittee chairman and the lead engineer before we get 14 into the final editing process so that we can try to ,f%) '( 15 accommodate you. 16 We'll be somewhat judgmental if someone comes in 17 with eleventh hour comments. You better have a pretty good 18 reason. 19 Okay. The first item on the agenda is the 20 proposed inspection procedure for graded QA. John, that is 21 your subcommittee so I would appreciate it if you would lead 22 us through that. 23 MR. BARTON: Thank you, Mr. Chairman. Good 24 morning. L 25 The purpose of this session is to hear a briefing L O. ANN RILEY & ASSOCIATES, LTD. '\\,,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

322 -1 by and have discussions with the NRC Staff regarding the g 'Y 2 proposed NRC inspection procedure which provides guidance r ,_ V .- 3 for inspectors to evaluate the effectiveness of licensees' 4 . graded quality assurance program. 5. This procedure provides for programmatic baseline i L 6 inspections and for reactive inspections in response to 7~ component-failures where graded QA controls were applied by 8 the licensee. .I L 9-At this time I would like to turn it over to Susan 10 -Black to introduce her presenters. Susan? 11 MS. BLACK: Hello. Suzanne Black, Branch Chief, 12 Quality Assurance under Inspection and Maintenance Branch 13 and we have See-Meng Wong, who actually works for Mark 14 Rubin. We have Juan Peralta and Larry Campbell. Bob Graham Y h 15-is also here for questions, answers. l - () 16 MR. PERALTA: Good morning. My name is Juan 17 Peralta from the Quality Assurance Maintenance and 18 Inspection Branch. Here with me today are also Larry 19 Campbell, in the QA Branch, and'See-Meng Wong, who 20 represents the PRA Branch, NRR. 21 'Before we go over the details of the procedure, I 22 would like to go over a brief background of our activities 23 in-graded QA and the PRA implementation plan. 24 Although graded QA began in late 1993 once the 25 Commission adopted the PRA implementation plan, all our p t /~N ANN RILEY & ASSOCIATES, LTD. ,k, Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 (202) 842-0034 l, L-

323 1 efforts were concentrated in developing guidance within that . /~'S 2-new umbrella. As a result, graded QA was predirected, if , k, l 3-you will, to concentrate on the development of PRA specific 4 guidance'and standards for the purpose of regulabory 5 obligation in that area. 1 6 As a result, as you are no doubt aware, a Reg 7 Guide was issued, Reg Guide 1.176, for graded QA, was issued 8 in August of this year. 9 Before the adoption of the PRA implementation 10 i lan, we had been working with three volunteer licensees -- 11 Grand Gulf,.Palo Verde and South Texas. Except for South 12 Texas, however, the volunteers felt that they could all 13 implement graded QA without NRC approval for guidance. They L 14 felt they could do it within the' constraints of their own -- I~ \\- . L ). of_the current QA program description and commitment. l 15 16 Based on that approach, we felt that it was not 17 necessary to do it or to develop a standard review-plan 18 specific for graded QA as had been done for the other 19 risk-informed applications under the PRA umbrella. 20 In March of 1996 South Texas came in with a formal 21 submittal requesting NRC approval of their QA program 22' description. After several iterations including a site 23 visit, the NRC Staff approved the South Texas graded QA 24 program through SECY-97-229. L 25 DR. SHACK: The other pilots didn't feel the need (~% ANN RILEY & ASSOCIATES, LTD. ( ) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 [ Washington, D.C. 20036 l (202) 842-0034 t

1 324 1 because they applied this on a more restricted basis or j) 2-their lawyers just took a different look at the regulations V. ~3 than South Texas? 4 MR. PERALTA: No, not necessarily. It's just that -5 they felt everyone was doing -- 6 DR. LARKINS: Excuse me. You have to speak into 7 the mike. The transcriber has a hard time hearing you. 8 MR. PERALTA: I'm sorry. Everyone had a different 9 approach. They felt -- everyone targeted different' areas of l-10' QA for obligation and Grand Gulf and Palo Verde primarily 11 was concerned with procurement. South Texas had a much more 12 ' aggressive approach which required triggering, if you will, 13 the' ANSI standards and the commitment. 14 MS. BLACK: Can I give an example? Grand Gulf -- 'Y [U 15 their definition of graded QA was they were no longer going i 16. to be required to go'to an Appendix B supplier. They could 17 buy safety-related items through commercial grade and -18 dedicate them, and we considered that wasn't really what is 19 classically considered graded QA, and so they weren't going 20 nearly as far as South Texas. 21 MR. CAMPBELL: The regulations, 10 CFR Part 21, 22- -already provided for commercial grade item dedication and 1 L 23 . basically as a follow-up we have had discussions with Palo 24 LVerde and they are kind of in a standby mode to see what 25 South Texas and the industry will be doing. l s ,q. ANN RILEY & ASSOCIATES, LTD. (,) ' Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l

. _ _ _ _ _.. _. _ _ _ _ _ _ _. _. = _. _. _ _ _.. _ _ 325 1 MR. PERALTA: We then began working specifically l 2 on the IP as:soon as the decision had been made not to 3 pursue an SRP, so therefore we concentrated our efforts on 4 developing a procedure that would capture all the lessons 5 learned from our interactions with South Texas and the other '6 volunteers and one which.at the same time would remain 7 consistent with the guidance promulgated in Reg Guide 1.176. 8 That brings me to the end of the-introduction and 9 Larry and See-Meng will go over the detail and the specifics 10 of the inspection procedure, i l 11-MR. CAMPBELL: My name is Larry Campbell. I am an { 12 Operations Engineer in the Quality Assurance Inspection and 13 Maintenance Branch and as has been said earlier, the 14 objectives of this inspection procedure is to evaluate the fr() 15 appropriateness and effectiveness of the-licensee's 16 methodologies used to identify the relative safety i 17-significance of SSCs and to verify the associated ] 18 Lapplications of the quality assurance controls in a gra'ed d 19 manner. 20 The inspection procedure is divided into two 21 sections, of which one is the baseline programmatic 22 inspection. That is the majority of the IP. 23 There is a brief description in a provision in the 24 inspection procedure for a targeted reactive inspection. 25 For the next several slides we will be discussing the / ^g ANN RILEY & ASSOCIATES, LTD. (,_j Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034'

L i 1 326 1 baseline inspection and we do have a specific slide where we L((l Y 2 will.get into some detail on the targeted reactive i \\, ~ L '3 inspection. l 4 DR. WALLIS: I would like to ask you about the 5 first bullet there -. identify relative safety significance. 6-MR. CAMPBELL:

Yes, j

7 DR. WALLIS: This is the result of quite a bit of 8 analysis. 9 MR. CAMPBELL: Yes. t. 10 DR. WALLIS: Do you inspect analysis? 11 MR. CAMPBELL: We will be providing additional j 12-detail in several of the future slides but to answer your 13 question, we will be -- there will be two elements of the I 14 -programmatic inspection. One will be to review the actual r'N ,.( j 15 categorization process, review the procedure, the controls, 16 the training of the personnel. Then once the items have 17-been-categorized as high or low or-maybe if there's three l 18 categorizations, those that are categorized as low safety i 19-significance we will then be seeing how the quality 20 assurance controls have been applied to those SSCs or 21 categorized as LSS or low safety significance. 22 DR. WALLIS: What would seem to be important is 23 'how the licensee decides what is high and what is low. 24 MR. CAMPBELL: Yes. '25 DR. WALLIS: Is that done by fairly in-depth i I' i ~ [N ANN RILEY & ASSOCIATES, LTD. , (_) Court Reporters l 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 Y

327 1 analysis using probabilities and things or is it done by /T 2 judgment? L) 3 MR. CAMPBELL: It is a combination of PRA, 4 probabilistic and deterministic methods and See-Meng Wong 5 will be going into a lot of details in that area, probably I 6 think two or three slides. 7 MR. WONG: Yes, we have two or three slides in j 8 this area in which we are reviewing the licensee's 9 application of the risk-informed methods and the adequacy of 10 the risk-informed methods in the application of the graded 11 QA program. 12 DR. POWERS: It seems to me you've asked a 13 question that only requires a yes or no answer. Are you 14 going to inspect the analyses that lead to the ) 15 categorization or not? v 16 MR. CAMPBELL: Yes. 17 MR. WONG: Yes. 18 DR. POWERS: There is your answer. 19 [ Laughter.] 20 MR. CAMPBELL: For the baseline inspection, we 21 envision two elements of the inspection. One will be an 22 extensive inspection preparation. The other will be the 23 actual onsite inspection. 24 As part of the inspection preparation, the 25 inspector should obtain and be knowledgeable of the relevant ('T ANN RILEY & ASSOCIATES, LTD. (_) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

328 1 license-and documentation. In other words, if we don't have 2 it in the office, we will obtain it from the licensee, the 3 various implementing procedures for categorization for the 4. application of graded QA' controls. We will have the 5 licensee's QA program description which describes the graded 6 quality assurance process. We would review these in detail 7 in the office so once we get to the site, we will be fairly 8 familiar with the categorization process as well as the 9 process for determining the appropriate QA controls to be 10 applied to SSCs that have been identified as low safety 11 significance. 12 I can go_into a lot more detail than this, but 13 essentially we wanted to emphasize to ACRS the fact that we 14 will be doing a lot of front-end planning prior to going to [ i 15 -the site, so once we get to the site we will be ready to go. %) 16 In the past I have seen inspections where we have 17 _gone to the site. You ask for the procedures. You ask for 18 the QA program. You ask for the implementing documents and 19 it's eaten up two or three days of time, so we hope to do a 20 lot of preplanning so when we go to the site we can get 21 right at looking at the categorization analysis and process 22 as well as the QA program applications. 23 MR. WONG: My name is See-Meng Wong. I am the 24 reliability and risk analyst in the PSA Branch, NRR. My 25 involvement in the development of this inspection procedure (g ANN RILEY & ASSOCIATES, LTD. (,,/ ' 1025 Connecticut Avenue, NW, Suite 1014 Court Reporters Wat:hington, D.C. 20036 (202) 842-0034

-~ -c.- -.c..- -~ ~. . - ~ i. L 329 1 for graded quality assurance is to address the various ' (~} 2 aspects of how the licensee would apply risk-informed V 3 methods'in the graded QA implementation program. i 4 This next couple of slides addresses the L -5: inspection preparation in terms of the types of j l-l' 6 documentation we will be looking for in the two inspection L 7-areas. 8 The first inspection area is the selection and r- .9 evaluation of the SSC categorization and the second part 10 essentially is the safety significance categorization l 11 process that the licensee may have in place, because this is 12 a key or important element of'the graded QA process. l 13-In the first part, the documentation that I am ( 14-looking-for to select and evaluate the SSC categorization is 1 b) 15 to take the listing of the SSCs in the safety significant fl A.) 16 category. This is to see how they have identified the-17 candidate SSCs that they are going to apply their graded QA 18 . processes. '19' The second type of documentation we are looking I 20-for is.the ranking of the low safety significance SSCs. We 21 want to be assured that those that have been categorized as 1 l 22 low safety significance are indeed low safety significance 23 and.is a combination of not only the PRA quantitative _24-analysis but also the expert panel considerations to assure 25 that they take into account, say, the operating experience 1 r'3 ANN RILEY & ASSOCIATES, LTD. jg_) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 p (202) 842-0034 i F

l 330 and the knowledge of the SSCs and therefore those components 1 t3 2 that are assigned low safety significance be SSCs that will O 3 have reduced QA controls. 4 DR. WALLIS: Suppose you see some sort of expert 5 panel evaluation, maybe it is a matrix or something -- 6 MR. WONG: Yes. 7 DR. WALLIS: -- and they do some ranking and you 8 look at it. In what way is the inspector able to challenge 9 this decision? Does the inspector simply say I looked at an 10 expert panel decision and because the experts made it, it's 11 okay? 12 MR. WONG: One of the things from my experience in 13 some of the inspections that I am involved in the 14 maintenance rule is that we -- two ways. One, we will sit I) 15 down with the expert panel and go over the deliberations LJ 16 that they have done and challenge and argue something that 17 may have been categorized as just on the borderline as high 18 safety significance but they have not categorized it as low 19 safety significance, and go through that argument with them. 20. The other process will be we will observe the 21 expert panel meeting deliberations and see how they go about 22 the process. 23 MR. BARTON: If the licensee does not agree with 24 your classifications, it's different than the licensee's 25 expert panel, is that now going to be a cited violation? l p ANN RILEY & ASSOCIATES, LTD. ! / Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l l

.-~. _. l L 331 l-1 MR. WONG: Okay -- that -- you are not supposed to 2 cite'whether it is a violation or not. Well, there's no } 3 requirement, this new rule or requirement and so it is very 4 hard for us to do that, but all we can do is to tell the 5 licensees that they may have to relook at the categorization 6 of these SSCs. l 7 MR. BARTON: And the licensee says I have done it 8 and I am satisfied and this is where it's going to stay -- 9 it's going to stay in this bin, and then you guys are not l 10' happy with that. What are you goirq to do? 11 MR. RUBIN: This is Mark Rubin from the Staff. I l 12 am certainly not an expert on enforcement actions, but a 13 process similar to the maintenance rule could have a 14 multitude of outcomes. p . t i 15 During the course of the evaluations that were l \\~J 16 just discussed, the licensee may conclude that perhaps he t 17 didn't categorize it correctly. If as stated though they 18 believe they did and they remain with their categorization, 19 it could be identified perhaps an an unresolved weakness or 20 if the Staff believes that their process was defective, and l 21 that is what resulted in an incorrect categorization, it 22 could indeed be cited as a violation. It could indeed be j l 23 cited as a violation of the implementation of the graded QA l L I l 24 process, that.they did not rank commensurate with the safety l -25 importance of the SSC. l A ANN RILEY & ASSOCIATES, LTD. ls) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 l (202) 842-0034 I l-l

l 332 1 MR. BARTON: Thank you. /"N - 2 DR. POWERS: Is that one of those things where .s 3 because you disagree with what the licensee did then ipso 4 _ facto there is a defect in the process? Would he have to go 5 find something that looks, smacks and feels like it might be f 6 perhaps maybe a weakness that leads to this? i 7 MR. GRAHAM: This is Bob Graham, if I could 8 elaborate further, we have recognized that there is very j 9 little guidance in the area of enforcement in this area and 10 we understand the need to develop an enforcement guidance 11 memorandum which would amplify on the considerations and the 12 treatment of issues that result from this particular 13 inspection effort, so that they are properly handled within 14 the enforcement framework, so we envision that we will need A. ( 15 to work with our Department of Enforcement people and the x 16 Regional. Staff so that we can articulate a logic and a 17 process for handling weaknesses, deficiencies, violations 18 that result from this particular inspection effort. { 19 MR. CAMPBELL: This is Larry Campbell. I would 20 add that if the Staff has objective evidence to the extent 21 that it is indeed high and it was categorized as low, 22 Appendix B to 10 CFR, Part 50 does require that the 23 requirements of Appendix B apply commensurate with the 24 safety significance of the SSC, so if it is indeed high, one 25 could refer to the rule in Appendix B as being the criteria t ANN RILEY & ASSOCIATES, LTD. 9(,,T) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 1 l Washington, D.C. 20036 (202) 842-0034 l L L .I

. --. ~ - - ~ _ -.. 333 l' for identifying noncompliance -- well, you will be in /~N 2 noncompliance with Appendix B, because if it is truly high, t] 3 Appendix B would not necessarily let you grade as a low 4 safety significant item. '5 MR. PERALTA: This is Juan Peralta. Also as a 6 consideration is the fact of when this procedure will be 7 triggered, the context of it. 8 This is a procedure that will be left to the 9_ discretion of the regions to initiate, so presumably it's 10 either being a failure or there's been some concern for 11 programmatic weaknesses of a particular licensee before this 12 procedure is triggered. 13 DR. WALLIS: Mr. Campbell said if it is indeed 14 high. Now there is not an objective experiment or something [JY 15 you can perform to determine if it is indeed. It is what it 16 is defined to be by whoever makes the decision? 17 MS. BLACK: This is Susie Black. If I could give 18 an example that might help clarify it, at one of the early 19 sites of the maintenance rule baseline inspection the expert 20 panel had taken the-list of high risk significant SSCs and 21 decided to look at them closer and see which ones they could 22 make low, and they picked three systems that they made low, 23 and their justification was that there was a backup system 24 to perform that same function, but when you looked at the 25. PRA that backup system was modelled and these SSCs still p, ANN RILEY & ASSOCIATES, LTD. (j Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

s 334 1 were high from the PRA' standpoint, and so that is the kind (g - 2 of justification where we would say that this is kind of V 3 black and white. 4 You don't really have a good basis for changing 5 these to low, but there are going to be a lot of other 6 situations where it will be a judgment and I think we run 7 into that all the time in inspections. This is just a 8 little tougher, 9 MR. WONG: Okay. The types of documentation we 10 are looking for is to_look at the SSCs or any plant 11 modifications that are not in the updated PRA model. We 12 want to make sure that the licensee has done adequate 13' -engineering analysis to determine that system function 14 failures will not degrade safety significant functions and [J\\ 15 also the SSC-versus equipment function matrix. We want to s-16 look at SSCs and how they rank their functions below the 17 system level. 18 In the safety significance categorization process, j 19. the information we are looking for is to see how they 20 documented the use of the PRA methodology in the graded QA 21' program. Documentation on their PRA updating process -- 22 that means how they have updated the models to reflect the 23 as-operated plant configuration, how they updated their 24 database to reflect any changes in the reliability that they 25 have experienced, also documentation on the scope -- scope _Q-ANN RILEY & ASSOCIATES, LTD. (j' 1025 Connecticut Avenue, NW, Suite 1014 Court Reporters Washington, D.C. 20036 (202) 842-0034

m . ~. _ - _ __ 335 1 1l level of detail and quality of the PRA. ' /~N 2' The scope, what we are looking for is to ensure d -3 that they cover some of the SSCs that may not be modeled in 4 an internal event Level 1 PRA model, for example, 5 containment performance SSCs. 6 The level of detail we want to look at -- how far 7 they go.using a basic event type PRa or is there 8 modularization which may have some masking effects in the 9 risk ranking methodology that they use. 10 In quality of the PRA, essentially we just want to 11 make.sure that there is documentation either they have got 12 peer review or not and if the reasonableness of the quality 13 we will go further. 14' DR. MILLER: How do you judge the reasonableness L/s }. 15 of the quality? Right now we are dealing with looking at s 16-PRA quality through standards and/or certification, so you 17 don't have the advantage of that at this point. 18' MR. WONG: Right. We don't have the advantage 19 because given these facts, we probably have a very short 20: time and so whatever documentation that we could get, you 21-Lknow, to make a quick judgment that they are not so far off, 22 your numbers are not so far off, you know, than what it 723 appears to be, and in this area there are ongoing 24 initiatives with the PRA standards and I think Mark -- 25-MR. RUBIN: This is certainly a difficult area, as .(~%- ANN RILEY &' ASSOCIATES, LTD. ' s, Court Reporters-1025 Connecticut Avenue, NW, Suite 1014 2 84 b3

336 1 you clearly pointed out. I would just note that the PRA ()) input is just one element of the ranking categorization 2 L 3 process. In fact, Susie, correct me if I am incorrect, but 4 Appendix B in ranking the QA requirements commensurate with 5 safety does not explicitly require use of the PRA at all, 6 and we still allow some categorization or some graded 7 processes. 8 We have the experiences from the maintenance rule 9 inspections. We have some guidance in the Reg Guide 1.74 10 and the inspectors will I'm sure be keying in on what 11 quality programs the utility implemented themselves and take 12 a look at those quality programs. If they see any results 13. that lead them to question the outcome of the PRA analysis, 14 something that looks funny, they can certainly' focus in that ,m (O) 15 area, but the inspection time is limited. 16 Basically the end-product is the SSC categories 17 and if the categorization appears appropriate through the 18 expert panel process with PRA then the outcome is what is 19 desired, but if something is found to be weak when they look 20 at the utility's PRA quality process, essentially they 21 didn't have one, the PRA has not been updated since the 22 original IPE and there have been significant plant changes, 23 those are clearly areas that would have to be well handled 24 by the expert panel. If they were not, then the PRA quality l 25 would become somewhat more significant. ['N ANN RILEY & ASSOCIATES, LTD. () Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l

337 1 DR. MILLER: So'those two areas are easy to have / 2 - Q) an objective evaluation, whether it has been updated and 3 where they have a peer review panel. Those are easy to do. 4 MR. RUBIN: You certainly can look at the 5 documentation of their internal quality process, yes, 6 DR. MILLER: But a certification and/or standards 7 certainly would be helpful in this. 8 MR. RUBIN: It would certainly seem to be, and in 9-fact we have a pilot underway right now as part of a diesel 10 generator AOT extension request at Perry to utilize a 11 industry peer review, the utility's peer review on the Perry 12 PRA, which essentially follows the industry -- 13 DR. MILLER: Certification? 14 MR. RUBIN: -- certification process, and we.are r 15 trying to get experience on using that peer review as part 16 of our licensing review here and we hope to learn a number 17 of things from that process that would be applicable later 18 on. 19 DR. MILLER: Perry has had the BWR Owners Group 20 certification? 12 1 - MR. RUBIN: Yes. 22 DR. WALLIS: So how many plants does an inspector-23' get involved with? Is this sort of a resident inspector 24 dealing with one plant or is this an inspector travelling 25 ~from plant to plant? A ANN RILEY & ASSOCIATES, LTD. (_)' Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

- ~ - -.. .... ~.. 338 1 MR. CAMPBELL: Well, right now we do not envision ('N 2 this inspection procedure having an initial wide use. There i) are three pilot inspections. Grand Gulf and Palo Verde m 1 3 4-essentially we're doing a commercial grade item dedication 5 in accordance with 10 CFR Part 21, 6 South Texas' project probably right now would be 7 the only candidate for this particular -- 8 DR. WALLIS: It's a one shot thing. My question 9 then is irrelevant. I was going to ask how much of the 10 inspector's experience.at one plant was transferable to - 11 another one, but that is probably way down the road ~ 12 somewhere. 1 13 MR. CAMPBELL: Yes. .14 MR. WONG: Yes. Okay, the last item of ()' 15 documentation we are looking for is the expert panel 16 deliberations and this is to assure that some of the l 17 categorizations and the quality of the PRA, the expert panel L 18 would look at it and compensate for some of the deficiencies 19 that they may have in place at that time. 20 DR. WALLIS: Just going back to my other question, 21 if you have three pilot plants, at least the inspectors can 22 compare notes between plants, because what I would be 23 interested in would be if there is any correlation at all .24 between the results they get at one plant and the ones they 25 get in another. l ANN RILEY & ASSOCIATES, LTD. 1,,, Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 L

339 1 MR. CAMPBELL: Yes. For example, very similar to /"% 2-the maintenance rule, but not quite on that scale by any t 'V 3 means at all, the same core group of inspectors from 4 Headquarters when to Palo Verde, South Texas and Grand Gulf. 5 Keep in mind that as this procedure is implemented in the 6 future and hopefully it will be, we will be tracking and 7' capturing lessons learned. 8 We will be enhancing the procedure as we do 9 inspections as it is being implcmented, but you are 10 absolutely correct. Right now there's very limited use as 11 we see in the future, but there is use, it is part of the 12 PRA implementation plan and we hope in the future it will be 13 utilized. Well, it is there in case it needs to be 14 utilized. L[Vl 15 CHAIRMAN SEALE: Let me verify something. This 16 particular program, will it be, if you will, under the 17 direct-scrutiny of Headquarters or will the Region IV 18 inspection. group be the first line of contact on this 19 inspection process? 20 MR. GRAHAM: This is Bob Graham. As with any 21 inspection procedure, the regions have the prime L 22 responsibility for implementation. We expect there would be 23 consultation with Headquarters staff during this process. i-24 As Larry indicated, we will be providing 25 programmatic oversight from Headquarters but the assignment f y~'s ANN RILEY & ASSOCIATES, LTD. il / Court Reporters s 1025 Connecticut Avenue, NW, Suite 1014 [- Washington, D.C. 20036 L (202) 842-0034 !~

340 1 of inspectors, the triggering of this inspection procedure rg 2 rests with the regional offices , (.) 3 CHAIRMAN SEALE: It is perhaps not an accident 4 that all four of these happen to be in Region IV and so 5 it's -- that.at least is helpful in that kind of i 6 consistency. l 7 MR. BARTON: You said something earlier, that this 8 is part of the PRA implementation plan. 9 Does that mean that I am going to see a similar 10 procedure for risk-informed ISI programs, IST programs? 11 Anybody that uses the programs that come out of the PRA l 12 plan, you are' going to have special procedures so you will l l 13 have those for those plants that use it and the routine l 14 inspection plans for plants that don't choose to go to l 4 [D ' 15 risk-informed?- Are we going to wind up with two sets of l s_/ 16 books on inspection programs and procedures? 17. Have we created a monster here? 1 18-MR. RUBIN: This is Mark Rubin from the Staff. 19 We don't have our inspection crews here today, but i E 20 this is a specialized procedure, I think a recognition of 21 the fact that there will be some implementation of GQA 22 processes without prior Staff review and approval 23 There may be some other specialized inspection 24 procedures, maybe possibly ISI, but that hasn't been I don't .25 think finalized yet. Those other programs, at least in the i

d<^'

ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 ( Washington, D.C. 20036 l (202) 842-0034 l-

, ~. _ _ - -. -. -. - - - ~. ~. _. l \\ 341 1 current stage of Staff interaction, require extensive Staff L (Q 2 reviews, prior reviews and approvals -- ISI, IST -- and so 3 on a plant-specific basis there were very close, careful l 4 looks including site audits and reviews prior to approval, l 5 and that isn't necessarily going to be the case with graded 6 QA. 1 l 7 MR. CAMPBELL: This is Larry Campbell again. 8-After we have done our in-house preparation-and i-9 the team is familiar with the categorization process us well 10 as the application of the graded QA controls, how that is 11 supposed to be dcne at the site in accordance with the QA j 12 program description and procedures, we then will go to the 13 site, and I guess the first step in the evaluation process I 14 is to, once you get to the site, just to attempt to confirm '[ ) 15 that the contrcls and the procedures and in the quality

%) -

16 assurance program descriptions are being implemented. 17 For example, we will probably select -- well, the. 18 inspection procedure says select five areas to review. 19 However, based on our experience, there may not be five SSCs l

20 that have been subjected to graded QA or if they have been 21 subjected to graded QA they may all be in the procurement f

22 area. I 23-Regardless, what we will attempt to do is to i 24 confirm that the licensee is applying the graded QA controls 25 consistent with their QA program description. l -("'T ANN RILEY & ASSOCIATES, LTD. (_) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 ~ l Washington,.D.C. 20036 I (202) 842-0034 p

342 l 1 For example, the QA program descriptions currently 2 require that inspectors who inspect work be certified to Reg ) s3 Guides and national standards. 4 In graded-QA space the licensee may hcve elected 5 to have peer inspection by a. qualified, knowledgeable craft f l; 6 person. If this is indeed the case, and that is what is 7 being applied out there, we would confirm that their l 8 procedures and quality assurance program descriptions permit 9 this. I 10' Another example would be in the area of 11 procurement. 12 The licensees currently for high safety 13 significant applications are required to go in and do a full 14. audit forisource inspection of the supplier to review, and /~% .( ) 15 accept the QA program description, and there's all kinds of 116 additional provisions that they do to buy safety-related 17 equipment from a vendor. 18 In the case of graded quality assurance, their QA 19 program-description may permit them only to review the QA 20-program description that the vendor has to invoke that 21 contractually on the vendor and to not do any source 22 inspections or any full-blown audits at the vendor's 23 facility. 24 Regardless,.we will be looking at the procurement .25 packages, the design packages, the maintenance work orders, I. l l ) /N ANN RILEY & ASSOCIATES, LTD. 3 l S,) Court. Reporters s l 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 (202) 842-0034 i 1

343 1 the tests and all the activities associated with graded QA ' (% 2 and the programmatic inspection which we are still talking %) 3 about we will confirm that programmatically the graded QA 4 controls are in accordance with their QA program 5 descriptions and procedures. 6 MR. BARTON: Larry, you started talking about the 7 actual inspection and you mentioned five SSC evaluations 8 approximately will be performed. 9 One of the things you say in your procedure you 10 are going to look at -- to evaluate the expert panel's 11 conclusions and the use of PRA and traditional engineering 12 considerations for bidding the SSCs. 13 In the next page of your procedure you are talking 14 about inspectors should verify if plant SSCs have not been j f ,') 15 reclassified as nonsafety related based on risk LJ 16 considerations. 17 Should that mean risk considerations only, because 18 I get the impression that I shouldn't look at risk if I am 19 going to reclassify a system. I don't think that is what 20 you intend. 21 MR. CAMPBELL: No -- 22 MR. BARTON: You mean you have to do some 23 traditional engineering as well as risk you reclassify? 24 MR. CAMPBELL: We have a slide on that coming 25 up -- (~] ANN RILEY & ASSOCIATES, LTD. (,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 1 l

~ i 344 1 MR. BARTON: ~Okay,-fine. [.. l

('

2 MR. CAMPBELL: But I will answer the question now x,} 3 because it's probably' appropriate. i 4 Since our initial -- going back to 1995, we have 5 emphasized the fact that Appendix B does permit for graded 6 qualityJassurance requirements but not technical l 7-requirements. 8 If one would want to no longer apply seismic 9 requirements, environmental qualification requirements, that 10 is outside the scope of Appendix B and that would have to be ~11 handled through the 50.59 change. process design control 12 process. 13 That was the intent of what we were trying to say 14 I believe in that one section is that the inspector should ~ .15 ' confirm through interviews, discussions, reviewing the 16 procedures that graded QA.is not the mechanism for changing t 17 technical requirements. 18 The one activity that we will be looking at also 19 during the inspection is the training for personnel t-L 20 - performing graded-QA activities. This will also include E 21 those performing the categorization process as well as those 22 .that are selecting and applying the graded QA controls. L 23' Historically and I guess as a rule most licensees 24 have committed to Reg Guides via their tech specs and QA 25 programs for qualification of the plant staff personnel. 1 ' jq. ANN RILEY.& ASSOCIATES, LTD. -(,). Court Reporters 1025 Connecticut Avenue,-NW, Suite 1014 ( Washington, D.C. 20036 l (202)'842-0034

7. -

345 1 This goes into various disciplines like engineering, .(i 2' technical reviewers, maintenance, ops, so we would expect < \\s. / ' 3 that each licensee would have at least elaborated on the L 4 ' qualification process for their -- for personnel involved in 5 the graded QA process. This will probably be more critical 6 and receive more oversight or inspecticn during a reactive 7 inspection, because it could well be that the root cause for 8 the reactive inspection would be the fact that the personnel 9 ' performing the graded QA activities were not adequately l 10 trained. 11 DR. MILLER: Are there any-training guidelines for 12 these type people or is that ad hoc at this point? 13 MR. CAMPBELL: I will' defer to Bob Graham and I 14 maybe Mr. Rubin, but what I have found is they take these () 15 . basic.like Reg Guide 1.8, which endorses ANSI 18.7 or ANS 16 3-1 and in there the licensee'has utilized those standards 17 for personnel performing engineering analysis or-design j 18 analysis. Those standards also provide for the j 19' qualifications of the operations staff as well as the 20 maintenance personnel. 21 What I envision is that the licensees would just 22 build upon that. I don't know. Mr. Rubin, are there any -- L 23' would you like to comment? 24 MR. RUBIN: Well, during the maintenance rule I 25 inspections the qualifications of the expert panel were L 1 ,/~N ANN RILEY & ASSOCIATES, LTD. 3 Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l~ . Washington, D.C. 20036 l (202) 842-0034 l l

. _-.~ 346 1 looked at -- the' training they were given so all the members (} 2' had enough' understanding of the limitations of PRA to know 3i .why:they.were there, what they were s i to be 4 supplementing, considering. 5 The scope of the membership of the expert panels 6 was looked'at -- did they have experts in the diversity of 7 fields needed to understand maintenance and engineering as 8' well as the risk technology issues. 9, There weren't any explicit guidance requirements i ~ 10 that I am aware of, but the overall qualifications were 11 looked at fairly carefully as part of the inspection '12 process. It was more a validation that the licensee had 13 identified themselves appropriate qualifications and 14 training needs and then implemented them, and their f] .15 identification was what was looked at by the inspection ( f 16 team. 17 DR. MILLER: But nothing as rigorous -- like for

18 operators or maintenance people?

19 MR. RUBIN: No. 20 DR. MILLER: Would that be of value in the future 21 to have more guidelines such as developed by INPO or others, 22' or is that something that would be useful in this particular 23 approach? 24 MR. PERALTA: Certainly the standards are useful, 25 especially in new areas. f(,)/ ANN RILEY & ASSOCIATES, LTD. Court Reporters -1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 i (202) 842-0034 e r t-f

347 1 CHAIRMAN SEALE: Are we going to wait until the 2-horse jumps over the fence to find out where the low spot is 3 and then we'll fix it? 4 MR. CAMPBELL: For an engineer to cite doing a 5 complicated seismic analysis or a plant mod for the 6 rerouting pipe and they do a complicated stress analysis, I 7 see.the-PRA analysis as being a complicated analysis and to 8 the best of my knowledge, there's no unique standards out 9 there for personnel performing seismic analysis and stress 10 analysis, but what we do when we look into those areas, we 11 make sure that the individual that is performing, say, 12 seismic analysis, that they are properly trained, qualified, 13 they have the required education and experience 14: requirements,-and like I said, most of this stems out of Reg 15 Guide 1.8, which'-- I think the title is-Qualification of 16 Personnel Performing Activities at Nuclear Power Plants. 17 DR. MILLER: Yes. That has been revised, in fact. -18 MR. CAMPBELL': As a matter of fact, I believe Reg. 19 Guide 1.8 will be going.out for public comment within the- '20 next two or three months. 21 MR. WONG: This. 9ee-Meng Wong here again. 22 The two aspects of the graded QA inspection 23 procedure, as I have stated earlier, is in two areas. One 24 is in the selection and evaluaticn of the SSC 25 categorizations. We.want to evaluate how they have selected /"'i ANN RILEY & ASSOCIATES, LTD. (_) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034-

348 1 the SSCs they are going to apply to graded QA and in ~'\\ 2 (b addition to an earlier question is that besides the PRA 3 analysis are the traditional engineering considerations are 4 also looked at as to how the licensee arrived at the 5 categorizations. 6 Now the inspection procedure is written to address 7 on a generic basis some sites where you have just two 8 categories, high and low safety significant categories. 9 What we are attempting here is that there are some sites 10 that may use high, medium, and low categorizations of the 11 SSCs, so the guidance here that is -- or the instructions 12 that are given to the inspectors to look at the 13 safety-related, low safety significance and the non 14 safety-related, high safety significant or if there are (n) 15 medium safety significant SSCs. 16 The sample size that we are talking about is five 17 and the choice of the sample size -- it could be larger or 18 smaller sample size depending on the QA activities, the 19 complexities of the QA activities and available time. 20 Bear in mind that the inspection is probably one 21 week and one individual who has got PRA analyst experience 22 and background to review this documentation, so that is why 23 we chose five. 24 In this area we will also be looking at the SSCs 25 that are just below the criterion threshold for high safety /' ANN RILEY & ASSOCIATES, LTD. (_ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

349 j 1 significance designation ar.d in Reg Guide 1.176 there is a (~ 2 paragraph that says that this criterion which how you divide ('T' ) 3 high safety significance from low safety significance, we 4 have allowed it to be justified by the licensee and to 5 reflect the estimated risk levels of the plant. That is the 6 guidance to date that we have. 7 The next part of the inspection is to look at the 8 safety significant categorization process that the licensees 9 have in place and the area we are looking at is the risk i 10 ranking methodology, the importance measures that are 11 used -- at least two importance measures, for example risk 12 achievement worth, which looks at the importance of the SSCs 13 when it is not available and also the risk reduction worth 14 when the risk, the importance of the SSCs when it is . (m) 15 perfectly reliable. 16 There are substitutes to risk achievement worth or 4 17 substitutes for the risk reduction worth in that you use the 18 Fossill-Vasily measure, so again the flexibility here is 19 given to the licensee in whatever importance measures as 20 long as there is two types of measures are being used. 21 The expert panel considerations we want to look at 22 very carefully to make sure that all the categorizations are 23 reasonable and are in the right bins. 24 The last item in categorization process we want to 25 make sure that all the operating modes and initiating events /~T-ANN RILEY & ASSOCIATES, LTD. (,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 -Washington, D.C. 20036 (202) 842-0034

-. ~. - ._ _ ~.---... - - - 350 1 are considered. [ (Vg 2 CHAIRMAN SEALE: I don't know. I am probably l l 3 asking an off-the-wall question, but yesterday we heard a i 4 different, on a different subject we learned about L 5 essentially binning activities or processes into two l 6 categories, and basically the' selection of high or low 7 safety significance is a binning process, and my 1 8 recollection is that when I heard about this whole activity 9 that that was the extent of the binning -- that is, high 10 safety' significance and low safety significance. 31 In listening to what you had on the previous 12 slide, it appears that there are now five and maybe some 13 ' gray areas in between bins. Is that getting you into 14 trouble? .( 15 I-mean are you being creative beyond the initial 16 scope of your marching orders, so to speak? 17 MR. RUBIN: This is Mark Rubin. 18 I am not sure I fully appreciate all the elements 19 of your question and so jump in if I.am answering something 20. you didn't ask. 21 CHAIRMAN SEALE: Sure, sure. 22 MR. RUBIN: But the-attempt here is not at all to 23 'make: fine gradations. 124_ High and low'is just fine through a process like 12 5. this. i lI , ! [) ~ S ANN RILEY & ASSOCIATES, LTD. L (_ Court Reporters ~ 1025. Connecticut Avenue, NW, Suite 1014 Washington,-D.C. 20036 (202) 842-0034

d 351 1 CHAIRMAN SEALE: Okay. ( 2 MR. RUBIN: South Texas proposed a middle 3 category, essentially risk achievement worth between two and 4 ten to give themselves the ability to grade more easily and i 5 to adjust more easily for their.own purposes, and the '6 numbers they chose and what they did in that mid-category 7 made sense to us, and so we approved it. 8 The benefit -- we don't want sharp lines, as you 9 will remember from a lot of previous discussion -- 10 CHAIRMAN SEALE: I have heard about that one. 11 MR. RUBIN: -- but we are very sensitive to that, 12 .but for items that are on a boundary of a guideline -- 13 CHAIRMAN SEALE:.Yes -- 114 MR. RUBIN: -- that is certainly an area where an 1 , (v, 15 inspector as well as a Headquarters analyst should probe, 16 and that is why, looking at the demarcations, is something 17 that is very useful. 11 8 CHAIRMAN SEALE: Okay. You have -- very good. 19 Good answer. Thank you. 20 MR.. CAMPBELL: We've talked about a few of these 21 ~already, so the first two bullets we have talked about. 22 I just want to emphasize again when we select the { 23 packages, the. selection may be limited mainly because of the

24 activities that the licensee has performed, and again we are 25 going to try to confirm that the graded QA controls-that are

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-.__.__.__._.______.__.-._..-..._._.___.._._m._. 352 i i being applied.do indeed conform to their procedures and what [d \\ 2 is in the quality assurance program description. p .3 We will attempt.however if we are at site and \\; 4: there are ongoing graded QA activities such as in j 5 procurement'or even categorization, design control, we would j L 6 like to observe some of the graded QA activities in the 7f Longoing mode,-so there is flexibility in the IP. 8 .If we-get at the site and we find there are p L9' ongoing graded QA activities, we will give them top 10 . priority. 11 One area that we also will be looking'at -- there. ~ i 12 are certain SSCs'that are non-safety related that have been l 1 13. categorized'as high safety significant. There are no rules 14 in'10 CFR Appendix B'that mandate that you apply Appendix B'

(Oj 15 to these SSCs.

However, because of their safety i 16' significance, we will be evaluating the controls that the 17 licensees have-applied to ensure that for these SSCs if they l 18 are called up, they will perform their required function. 19 DR. POWERS: Jmd if you find that those -- the ':2 0 application of those controls is not what you want, what 21 happens?. You are not going to cite'against Appendix B -- or 22' cite against the standards? 23 MR. CAMPBELL: No, no,_that's why I opened'up by

24-saying there's no requirements.but if you take a look at the 2 5 ~-

quality assurance program change that South Texas submitted, O, Juai RILEY & ASSOCIATES, LTD. Court Reporters 1025-Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l' I ...,.m,.

353 1 .you definitely would not write a violation against a ( ) regulation but you would cite them for not following their 2 3 procedures. 4 However, some licensees, South Texas and Palo 5 Verde, we didn't probe that deep enough, but they may have 6 no procedures or QA program description that would mandate 7 that they apply any controls, augmented controls, but at 8 Palo Verde and at South Texas we did find, especially South 9 Texas -- no, I'm sorry, at Grand Gulf, they were indeed 10 applying augmented controls to this category of SSCs. 11 We have touched on the last slide already -- I 12 mean the last bullet, but I just want to emphasize we will 13 be discussing with the licensees to ensure that they are not 14 revising technical requirements under their graded QA ( ) 15 process. 1G MR. BARTON: And they are not reclassifying solely 17 on risk considerations. 18 MR. GRAHAM: Well, if I could amplify on that '19 MR. BARTON: Sure. 20 MR. GRAHAM: The reason we have that prohibition 21 in here is the current regulations are very prescriptive on 22 classifying items as safety-related. Basically if it is 23 part of the' reactor. coolant pressure boundary, if it is used 24 to shut the plant down or maintain safe shutdown in an 25 offsite dose consideration, so it paints a very clear l.. (T ANN RILEY & ASSOCIATES, LTD. ' (m,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

354 1 picture for' design engineers to look at the functions ('] 2 performed and it is basically a go/no go decision criterion, %) 3 and it does not identify a risk element. 4 Gary Holahan as part of the Part 50 overall review 5 is looking at defining "important to safety" and " safety 6 related" in the context of risk perspectives, and we would 7 adjust this inspection procedure if the regulations change 8 but right now there is no explicit input, risk input in the 9 safety classification process. 10 MR. PERALTA: This is Juan Peralta again. One of 11 the basic premises throughout this whole graded QA framework 12 is the idea of having a very dynamic and comprehensive 13 feedback mechanism and corrective actions. Due to the 14 nature of the inability of the PRA to clearly and explicitly im (% >) 15 capture the effects of changes due to graded control -- due { 16 to reductions in QA controls, we have always emphasized the 17 need to have this very comprehensive process. 1 18 Basically, we anticipate that this process will be 19 captured by current licensee processes, for example, the 20 maintenance rule would definitely serve very well this 21 process as long as the licensee has a process built in that 22 looks at failures at the system or component level. And ] 23 with regard to corrective actions, we don't see any major 24 changes or the need to have anything beyond more than what 25 they have right now, as long as they have an effective /~~% ANN RILEY & ASSOCIATES, LTD. is,,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

. _ _ _.. - ~.... _ _. 355 1 ~ implementation of that process. (~} 2 Another aspect which is more -- a bit closer to QA LU 3 itself.is the fact that we expect the licensee will be 4 looking -- will be self-assessing their own processes to 5 make sure that the process is working as expected, that they 6 look at failures.in the industry and in their own plant to 7 adjust the control as necessary. .8 DR. POWERS: When you' find an item, any item, that 9 has a suddenly higher failure rate than maybe you had in the 10 - past, what do you do with the QA program? 11 MR. PERALTA: Purely from a QA standpoint?

Well, 12 they have -- licensees have to have a corrective action 13 process..While the corrective action process only triggers 14 a review of root cause for significant condition diverse

, () .15' quality, they -- the licensees are obligated to look at the

16 effect of those failures and decide whether it is caused by 17 design inadequacy or maintenance practices.

So there is 18 already a process in place for that. 19 DR. BARTON: You would.also expect them to look 20 for similar components, other applications, et cetera, to 21 see how it affects those systems' functions or whatever. 22 MR.'PERALTA: In cases where they made assumptions 23 -- or they made reductions for similar components throughout 24 the plant, yes. 25 DR. POWERS:. We have, for this hypothetical D. ANN RILEY & ASSOCIATES, LTD. (,/ - Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 w 4 9 M-n---J m -.w -m-4-e,t- .W-'

- -. -.... - -. -. - - -. - -. ~.. h 356 11 example, we have a component, o pretty good history, then I( 2 they went into the.QA program, they.said it is a pretty 3' reliable device, we don't have to do very much on it, it 4 seems to work. But, now, all of a sudden, failures go way 5 up. No obvious flaw in what you have got, I mean it is the 1.. I i 6-same thing over and over again, but it fails. What do you 7 do? i 8 MR. PERALTA: I guess we want to look at whether 9- -- whether it has been effectively graded QA. I mean is the 10' SSC within the umbrella of the graded QA program at the 11-site, or that would definitely have to be captured under the L 12 regular corrective action processes, 13 MR. CAMPBELL: What we envision licensees doing, 14 and South Texas has this in their quality assurance program (G) 15 change submittal that we approved, was for the low safety 16 significant SSCs, we would expect for all the failures, for 17 each failure, for them to identify and quote an apparent 18 cause. 19 And, for example, let's say the apparent cause of 20 a valve failing was the material associated with the stem '~ 21 was the wrong material, And it could well be'that they, as i -22' part of the graded QA program, they curtailed their amount 23 of source inspections or audits at the vendor. 24 One failure may not trigger corrective action and 25 feedback where you adjust the controls, but if there is a L l ANN RILEY & ASSOCIATES, LTD. 4 Court Reporters s-i 1025 Connecticut Avenue, NW, Suite 1014-Washington, D.C. 20036 (202) 842-0034 ~.

1 357 1 trend and you have several failures, we would expect the 2 licensee to perhaps question whether or not there has been -3 some change at the manufacturing facility and is it x 4. appropriate for them to go back into the facility and maybe 5 so source inspection or have an audit. So this is what the 6 corrective action and feedback mechanisms would do, and we 7 feel that South Texas has a pretty good program in place. 8 .We really haven't evaluated the other licensees 9 programs yet because they haven't submitted anything to us 10-or there hasn't'been a reason to evaluate them. 11' DR. POWERS: I think you told me what I was j \\ 12 anxious to hear, which was that it may.be that QA had' 13 nothing to do with the failure. 14 MR. PERALTA: That is correct. - 15 DR. POWERS: And there's nothing you can do with ~ 16- 'the QA program. -On the other hand, it may be that it-is 17 indeed a QA correctable sort of problem, you just have to 18 look. 19 MR. PERALTA: There is definitely an area of 20 overlap _with the maintenance rule. - 21 CHAIRMAN SEALE: In'that regard, you have already -l 22: mentioned that Gary Holahan and his activity on the revision 23 of Part.50 is looking at' things which influence -- are I 24 .likely to in' fluence your implementation of this rule, i 25. redefinition of some terminologies like safety significance j ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025. Connecticut. Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

F t 358 1 and so forth. '(^N .2 I.think we are particularly sensitive to the fact b~ 3 that there are tentacles that tend to run from one 4 ' application of the rules over to the other and there is a 5 high level of integration of these rules with respect to 1 6 each other. 7-Has Gary made a specific request to you for you to 8 essentially let him know of places where you think a 9 revision of Part 50 would impact on.this particular rule? 10 MR. PERALTA: You mean Appendix B? 11 CHAIRMAN SEALE: Well, no, this -- I shouldn't say 12 rule, this particular pilot application. l'3 MR. PERALTA: Well, a slight correction there. 14 Originally, they were considered pilots, but then, again, [ 15 they changed their designation, they were called volunteers. c L 16 CHAIRMAN SEALE: Well, maybe that is in 17 recognition of the fact that there is almost universal 18 admonition about the risks associated with volunteering, I p 19-don't know. 20 MS. BLACK: To answer your question, though -- 21 this is Susie Black, and I am involved with that process. I 22 CHAIRMAN SEALE: Sure. i. L 23 MS. BLACK: And we have somebody from Bob Graham's 24 staff that is following it closely, because we realize it j h 25 will not only impact graded QA but -- l l 1 O ANN RILEY & ASSOCIATES, LTD. k) Court Reporters s 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 l (202) 842-0034 -y,., ,a-.. -, _ -., p 3 en a --+ - ,,y y

_.. ~. _ _ _.. _. _. _ -. _ _. _. _. _ _ _ _. -.. 359 1 1 CHAIRMAN SEALE: Everything. 2 MS. BLACK: -- everything else. 3 CHAIRMAN SEALE: Yeah. Yeah. 4 MS. BLACK: .So we are following that closely. 5 CHAIRMAN SEALE: Okay. Fine. I am sure you were, L 6 but I thought I would let you know that we are going to be 7 .asking questions about that, too, as we go down the road. 8 MR. CAMPBELL: Speaking of down the road a ways, I 9 personally do not envision reactive inspection to happen any l-I -10 time soon. Once the graded QA program is in place, it has

11 been going along for a while, as the regional people get

.12 familiar.with it, the resident inspectors get familiar with 13 it, they will probably be alerted either by -- during plan 14-Lof the day's meetings or through their review of corrective l .15 actions and nonconformances, they will probably see trends 16 occurring. 17 Again, it is a regional initiative whether they 18 want to go in and do. limited reactive inspections. If a 19 reactive inspection is warranted, the first part of the. ~20- . inspection would be to interface with the licensee and take 21-a look at their initial evaluation of the failure. 2 2.- -And we have touched on this already, but the '23i failure could be the result of a design error, where graded 24 QA controls were applied and you didn't have an extensive l, 25 independent-design verification. It could be the result of F i-l' M ANN RILEY & ASSOCIATES, LTD. 'V Court Reporters L 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202)-842-0034

360 1 a manufacturing error on the part of the vendor as a result i 2 of not doing a source inspection. 3 The licensee probably, if you have repetitive -4 areas -- errors, or failures, or they would have escalated 5 from an apparent cause perhaps to a root cause. So in a 1 6 reactive inspection, the inspector would look at the 7 licensee's cause evaluation as well as do their own 1 8 independent evaluation. ) i 9 One key item during a reactive inspection, and 10 this has been touched on previously, if the item did fail 11 and there are other identical or similar items in the plant 12 that have had graded QA controls applied and those controls 13 are similar, they, too, would be put in a suspect group and 14 the inspector or inspection team would question this area. 15 There is one other category that may be somewhat 16 confusing,'but I will try to explain it. Many times at a .17 site there is a need for equipment, material on an urgent 18 matter. Several times you may -- I know in the past there 19 has been items that were in the warehouse, and, potentially, 20 you could have an item or items in the warehouse that were l 21 low safety significant that had graded QA controls applied 22 to them, and the licensee would attempt to upgrade that in 23~ an emergency situation to use it in a high significant 24 application. -25 That, too, should be evaluated to take a look at ANN RILEY & ASSOCIATES, LTD. i Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 l (202) 842-0034

.. -.. - _ -. ~. -. -. _. - i 361 l 1 what low safety significant SSCs were upgraded for high / 2 safety significant application, and to see if any of the 3 failure mechanisms'could have been carried over in that 4 upgrading process. 5 In a reactive inspection, we feel that there would -6 be a far more intensive look into the training activities to 7 see if inadequate training might have contributed to the 8 f ailures'. 9 MR. PERALTA: That brings us to the next slide, 10 current status. Larry already touched on the last two-11' bullets. The comment period expires on the 9th of this 12; month. We have gotten input from.-- and comments from 13-Region I and some NRR staffers, and we certainly welcome 14 your comments. 15' Anything you would like to -- 16 CHAIRMAN SEALE: Did you ask'for comments from 17 Region IV? 18 MR. PERALTA: .Yes, we did. Yes. 19 CHAIRMAN SEALE: Okay.

20 MR. CAMPBELL:

We have asked for comments from all 21' the Regions and several of the offices. 22-CHAIRMAN SEALE: They are going to be carrying the 23. water-on this thing, so it seems like they ought to have 24. -some input. 25 MR. PERALTA: Well, things, I guess -- things may 2 l-1' i ANN RILEY & ASSOCIATES, LTD. g' Court Reporters l 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

~. _ _ _ 362 i 1-be changing in South Texas, for example, because they have d(~\\ let us know that they haven't achieved the level of success 2 3. that they expected to achieve with the graded QA. They felt 4 they had to go beyond Appendix B and graded QA. 5 DR. BARTON: What was their problem with the 6. program? 7 MR. PERALTA: Not a problem, it is just that they 8 9 DR.' BARTON: Why don't they think that they are 10 ~ getting the benefit out of it or something? What are the ] 11' issues that South-Texas has got by trying to implement 12 graded QA?' i 13 MS. BLACK: I can answer that. When they tried to 14 change their quality assurance program, the director of -() 15 engineering, or their engineering vice president said, well, 16 these are still code pumps, we still have to buy'ASME code i 1 71 pumps and do the. code testing and you are not going to save '18 any money by just changing the QA verification requirements. 19 So they have come in and made a presentation. In 2 0 -- fact, that will be part of I think the paper that Gary 21-Holahan is working on in risk informing. They would like to 22 be a pilot plant on that now. 23-So they ran into the technical requirements that 12 4 we tho'ught they would probably run into when they V 25 implemented graded QA. ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

l l 363 l 1 DR. BARTON: Really, they didn't -- the economic 2 savings were there, as they thought, by getting into this 3 program. 4-MS. BLACK: Right. l 5 DR. BARTON: I have one other question. You have 1 6 inspection resource estimate in the procedure, and you talk 7 about estimated inspection hours to complete all the j 8 inspection requirements when you do both a reactive and 9 programmatic option, when they are both implemented, you are 10 going to do a programmatic program inspection and a-11 reactive, and you come up with so many inspection hours. 12 And then you also talk in that section about only doing one 13 . inspection program or the other, just doing a programmatic 14 or a reactive, and the amount of hours. And I just wonder ) 15-whether that all adds up, just go check the numbers. Maybe ( .16 they are right. At 10:00 last night, I kept going through 17 them and I said I am~not sure added up. 18 MS. BLACK: Okay. We'll take that as a comment. 19 DR. BARTON: All right. 20 DR. MILLER: If the South Texas experience was not 21 what they expected, do we believe that will discourage 22 others from moving into the GQA process? 23 MR. PERALTA: Definitely. 24 MS. BLACK: I don't think anybody else is 12 5 encouraged anyway. .There is more discouragement. f i- [.. ~ \\ ANN.RILEY & ASSOCIATES, LTD.

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Court Reporters l ~ 1025 Connecticut Avenue, NW, Suite 1014 -Washington, D.C. 20036 (202) 842-0034

364 1 MR.. CAMPBELL: I believe that in some of the 2 systems that South Texas thought they could get the 3 advantage of in the area of procurement, a lot of those were 4 mechanical systems and they were code systems which would 5 requirement items or modifications to be in accordance with l 6 the ASME code, Section 3, which would require code stamp and l 7 then certification. Whereas, you know, if they had been l 8 electrical systems that didn't have unique ASME l 9 requirements, -- I am not saying it is unique to South 10 Texas, but I think for the projected savings they had in l 11 their upcoming modifications, that the ASME was a snag. The l 12 ASME certification of the replacement components was a 13 . factor. 14 DR. MILLER: Is there further effort going on to r () 15 see if we can see if that snag can be changed? 16 .MR. RUBIN: This is -- let me ask you this. This 17 is Mark Rubin. Yeah, they, as Susie said, they have 18. indicated their desire to interact with us to resolve the 19 impediments to the benefits they wanted to achieve. What 20 they'have suggested -- they haven't come in, the specifics 21 yet. What'they have suggested is a number of regulatory 22: exemptions that would get them out from under seismic, EQ 23-requirements for equipment that just should be appropriately 24 non-safety important. 25 We are considering whether interaction on a pilot s I ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 l l (202)-842-0034

365 1 level at this stage would be the most effective way of doing 1 2 it, or folding into the Part 50 revision process. So it is 3 currently being though at our end. At the same time, the 4 potential benefits -- and impediments were originally 5 recognized by them. I remember a meeting back two years 6 where they recognized that there would be other code 7 requirements that they would have to deal with. 8 I think what happened is they underestimated how 9-many components those would impact. At the same time, back 10 a couple of years ago, we are looking at some of the other 11 volunteer plants, they would bring in examples of equipment 12 they could purchase off the QA rolls. For instance, Palo 13 Verde showed a $3 fuse block and a $300 fuse block. Of 14 course, they were identical. One had $297 worth of paper j ) 15 work on it. So the benefits are clearly there. 16 DR. BARTON: Can I also go through a commercial 17 dedication-program and come up with the same bottom line? 18 MR. PERALTA: .Yes. 19 MR. CAMPBELL: Yes, but that commercial grade 20 dedication involves identifying critical characteristics and 21 verifying them. And there are some costs, some additional 22 costs associated with that. 23. DR. BARTON: I understand that. '24 DR. MILLER:.But if that could be done generically 25 for a group of plants, then that -- Os ANN RILEY & ASSOCIATES, LTD. Court Reporters .1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

. -. ~...~ -.. -. 366 1 MR. CAMPBELL: That could be done generically, but { 2' I think ASME Section 3 is a unique requirement and they are .3 petitioning through 50.55 (e) for relief for the ASME. l 4 DR. SHACK: But that is not even an NRC code. 5 MR. PERALTA: No. I l 6 MR. CAMPBELL: It is a bit beyond graded QA. 7 DR. POWERS: Well, it is certainly not confidence 8 inspiring that they would underestimate a thing like that, is it? I mean you would think that they would have a very 9 10 good estimate on how.many things were covered by ASME codes. 11' CHAIRMAN SEALE: You know, when you began, I had a 12 feeling that I probably should have remember the differences 13 between the expectations or anticipated coverage of the 14 three, and I will try to use your word now, volunteers in P) ( 15 their programs. But I have to say that it was at best 16 fuzzy. And now there is a level of maturity that you have 17 reached, at least to the extent that you have got one out l -18. there that is pretty well defined, and two others that are .19 coming along in slightly different features, and so on. -20 I wonder if it would be possible to p'

together, 21-just based on these, a template that would identify the 22~

range of options that might exist in graded QA. And then an 23 overlay which would be -- which would identify the span of .24-coverage for these three options. I think it might help us 25 get a feel for what is involved. And, indeed, it might be a C ANN RILEY & ASSOCIATES, LTD. - (_/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

. - - - - ~ 367 L1' tool that could be used in resolving some of these semantic f}- 2 difficulties that-seem to come into what the expectations .y -3 are and what the coverage might be and so on, Just 4 something to think about as you -- 5 MR. PERALTA: This is Juan Peralta. Are you 6 talking about range of options that the licensees -- I mean 7 the volunteers elected to? 8 CHAIRMAN SEALE: Well, I think -- yeah, that would 9 certainly be necessary in doing the overlay, but if you can 10 identify other areas where graded QA might be a useful 11 approach that none of them have looked at, I think that 12 would be informative too. 13 MR. GRAHAM: This is Bob Graham. Certainly, we 14 will take your comment under advisement. In fact, we have y () 15 some of those templates in rough form early in this process. 16 We can -- we went through the 18 criterion and the 17 associated standards and tried to anticipate areas where 18 licensees would want to seek relief. 19 CHAIRMAN SEALE: Yeah. 20 MR. GRAHAM: And so we have some of that in-house. 21 It hasn't been well-polished, but we can certainly re-look 22 at that. '23~ CHAIRMAN SEALE: Again, I realize you don't have 24. anything else to do. 25 [ Laughter.] (\\ ANN RILEY & ASSOCIATES, LTD. a,f. Court Reporters s 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

i 1 368 4 1 CHAIRMAN SEALE: But, I think~it could be a useful { (~'N ' 2 tool-and that is the reason I made that -- j T j' i i 3 MR. CAMPBELL: I believe South Texas touched on 4 most of the major areas. For example, they didn't want to 5-have two document control programs on-site. They didn't I 6: want.to have two audit programs. They didn't want to have 7 two programs.for qualifying their non-destructive examiners. 1 8 CHAIRMAN SEALE: Yeah. l J 9 MR. CAMPBELL: So I believe South Texas touched on 10 the majority of the areas that were fruitful areas, and that 11 ' ils kind of reflected in the Reg. Guide, the graded QA Reg. 4 12 Guide, those areas. And there is -- this does refer to that 13 Reg. Guide,.so a lot of that overlay probably -- and this is 14 one case where the Reg. Guide may be more detailed than the () 15 IP, and the IP.does refer to the Reg. Guide. 16 DR. BARTON: Any comments from the industry or 17 others?. 18- [:No response.] I 19 DR. BARTON: I want to thank you for the 20 presentation. j 21 MR. PERALTA: We would like to thank you for j 22 having.us be here. 23 DR. BARTON: Mr. Chairman, we will turn it back l 24 .over-to'you at this time. 25-CHAIRMAN SEALE: Okay. Thank you. p ANN RILEY & ASSOCIATES, LTD. -\\j Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

369 1 DR. BARTON: Oh, there is a committee action, we () 2 are expected to issue a letter on -- V 3 CHAIRMAN SEALE: Yes. 4 DR. BARTON: On this procedure. 5 CHAIRMAN SEALE: Okay. Well, thank you again, and 6 we appreciate your taking the time to come down and let us 7 know about this. I think we understand it a little better 8 anyway. Thank you very much. 9 Let's see, the next item is scheduled for -- 10 DR. BARTON: Salem at 10:15. 11 CHAIRMAN SEALE: 10:15. And that is going to be 12 the -- 13 DR. BARTON: Salem 1 and 2. 14 CHAIRMAN SEALE: Yes, Salem 1 and 2. And I guess (~/) 15 they won't be here until 10:15. I think everyone has got N-16 something to do that they can be working on. 17 DR. BARTON: Bob, do you want to take care of 18 this? 19 CHAIRMAN SEALE: Okay. I guess, if you want to do 20 that. It shouldn't take but a few minutes. The 21 reconciliation of comments, it is only one item. It has to 22 do with the emergency core cooling system strainer blockage 23 issue. 24 DR. BARTON: Right. 25 CHAIRMAN SEALE: And that is yours, John. fs ANN RILEY & ASSOCIATES, LTD. (,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 J

_.____-_._.__._.._._.-.~..m_ l' l 370 f.- - 1 DR. BARTON: Yes. The response we got'from the L l J[N .EDO on this addressed -- or responded to our items one for 2-3 one, and I don't have any problem. I think it was a l 4 satisfactory response. 5-CHAIRMAN SEALE: Okay. So you recommend that we q 6 7. DR. BARTON: We accept the responses as written. 8 CHAIRMAN SEALE: Okay. Okay. Fine. Is.there any 9 adverse' evaluation of that response? LS 10 [No response.] 11' CHAIRMAN SEALE': Henring none, I will just rule -12 that we accept it. Okay. We will get back at 10:15. In i 13 the interim, if you want to -- you might talk to --'you can 14,; work on things youchave got in the mill, those of you that '15' 'do. 16 (Recess.] 17 CHAIRMAN SEALE: We'll resume our meeting. The 18 next item on the agenda is the Salem Nuclear Plants 1 and 2 E 19 experience, I guess is the way to say it. And John is our 20 Chairman of that subcommittee, so, John, will you introduce 21 our speakers. 1 22 DR. BARTON: Thank you, Mr. Chairman. Plant 23 Operations Subcommittee of the ACRS has been following ~24: plants that have been in extended shutdowns. Salem Unit 1 25. and 2 are examples of one of those units and the briefing ~ = (( )N ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

- -.~.. --.- -.-.-._--. 371 I-1- from Salem today will be similar to what we have heard in ! f) 1L the past from other extended shutdown plants and it will V 3 cover the reasons for shutdown and actions taken by the t 4 utility, lessons learned, and current status of the plant. I .5 At this time I will turn the presentation over to 6 Lou Storz from PSE&G. I 7 MR. STORZ: Good morning, everyone. It is our 8 pleasure to come here today to kind of recap the story at [ 9 the Salem Units. My name is Lou Storz, I am the senior vice 10 president of Nuclear Operations. I think briefly I will 11 just give you a quick background on my experience as I have 12 .been in the nuclear power business since 1962. 13 I was in the United-States Navy Nuclear Program, 14 I have worked at six different utilities, just about every [( ) 15 job at the facility, including engineering, training and 16

quality, I was an original loaner at INPO in 1979 after the 17 Three Mile Island event.

I have had extended experience in l 18 1 starting up new units and: recovering plants that have had 19 problems, including Davis-Besse, I also worked at Nine Mile 20. 1 and 2 and now here at the Salem Units. 21 With me today, which will also be giving part of 22 the presentation, is Dave Garchow and Dave came from Palo 23 LVerde. He is a director of system engineering there. He 24 was a licensed SRO. Dave started with us as the system (25 engineering. director during the recovery. He later took on

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l 372 1 the steam generator project. I asked him to be the recovery l /s 2 plant manager for Unit 2, which he did, and now he is the L 3 director of design engineering for our facility. 4 Dave Powell came to us from Turkey Point. Dave 5 held the position of technical manager, license and services 6 manager. Dave was a certified SRO. Dave also worked for 7 the NRC as a reactor systems specialist in the Event 8 Analysis Branch, and Dave began his career in the United 9 States Navy where he finished up as a Navy commander. 10 Let's go to the next slide. By way of background, 11 the Salems are 4 loop Westinghouse units. They received 12 their full operating licenses in 1977 and 1981. They put 13 out about 3334 megawatts thermal. The history of those 14 units had been pretty spotty in their entire life, but now rs lV) 15 we think we have got the material condition of the 16 facilities and the design issues corrected. 17 Let's go to the next slide. Today we are going to 13 provide you a brief summary of the shutdown. I am going to 19 highlight the root causes, what the PSE&G management 20 recovery actions were. We are going to talk about the 21 recovery plan. Dave is going to talk about the recovery in 22 more detail, Dave Garchow, and Dave Powell will review the 23 regulatory processes and interfaces that we went through to 24 make the recovery. 25 We had developed, the new team had developed a 10 i j\\, ANN RILEY & ASSOCIATES, LTD. (_) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 i i

373 1 step -- or 10 action plans for the recovery, and I am going s 2 (d to lead you through to how we arrived at preparing those. 3 And let's go to the next slide. 4 First off, Jim Ferlund, the CEO of Public Service 5 Electric and Gas, in 1994, sensed that there was problems at 6 his facility and he recruited Leon Eliason from Northern 7 -States Power to be his new chief nuclear officer. Leon got 8 there in about October '94, recognized that there was a weak 9 corrective action and quality assurance program, and a weak 10 Employee Concerns Program and began working diligently to 11 put those in place, hired a new quality assurance director. 12 During his first six calendar months, though, as 13 he got more familiar with the plant, there was continuing 14 problems with the ventilation system, decay heat removal and ( 15 other equipment issues. He also identified during that 16 period a lack of ownership, low standards and little 17 accountability in the working ranks of the organization. 18 A lot of the work-arounds that had been there for 19 years had actually been proceduralized, he made that 20 observation, and, overall the corrective action program was 21-very weak. 22 These identifications, along with a review of 23 events at the plant, and there had been significant events, -24 four AITs and a five year time frame from 1991 to 1994 25 ending with the grass intrusion event. ANN RILEY & ASSOCIATES, LTD. g,j). Court-Reporters 1025' Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

~. .~ .- ~ - - -~...- - 374 l 1-He made a determination that he needed to shut.the !!(g~$ . plants down and improve their safety and reliability prior 2' 3 to restart. That was confirmed with a CAL letter from the 4 NRC in the June timeframe of 1994. This clearly -- l 5 DR. BARTON: 1994 or '95? l 6 MR. STORZ: Excuse me. Excuse me,-1995. The t I '7 spring of 1995. L 8 At that point, a decision was made to restructure ( 9 the management team and. Leon recruited myself, Bert Simpson, 10 anL engineering professional that worked at Palo Verde, and 11 .the three of us then recruited nearly a 100 percent new 12 senior management team. 13 During that period of time, from about June of 19 14 -- late June of 1995 till December, we did extensive reviews () 15 of the organization, including interviewing 100 percent of 16 'the operators. -We debriefed a lot of the system engineers, 17 maintenance personnel, and began compiling a list of issues 18-that needed to be dealt with. 19 We used internal resources. We had a special 20 assessment manager assigned to us from INPO and we hired 21-some consultants. '22 The results of all this review resulted in what we 23 ~ called'our three major areas of root cause, ineffective 24; corrective. action program, plant material condition 25 weakneFses, and human performance and Cultural issues. And s (g ANN RILEY & ASSOCIATES, LTD. ij Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

375 1 those were the three categories that we binned the problems 2 in. 3 .Let's go to the next slide. With that as a 4 background, this new management team was pretty much in -5 place by October. It included a new training director, new 6 engineering directors, new licensing quality maintenance and .7 plant general manager positions, and many sub-level managers 8 were replaced. 9 We presented, during our recovery plan 10 presentation, a chart that showed only two managers from the i 11 previous organization had survived at manager position-1 12 ' levels and that was one of our radiation protection managers 13 and one of our lower level maintenance managers. All other -14 people had been replaced or some people reassigned.- 15 With that team in place, we asked the team to 16 develop the recovery plans, and there was nine specific .17 - -plans developed, which are listed here. And I think what 18- . sets this apart from maybe some other plans you have seen, ~ 19 they were totally developed by company employees. We did -20 not use consultants. We kept it simple, clean, easy to 21 ' understand..And since they developed the plan, we created a 22 cense of ownership and accountability.that hadn't been there 23 in prior plants that had been put in place, to try to the 24. organization to function better. '25-DR. POWERS: I might just interject at this point 4 j /N ANN RILEY & ASSOCIATES, LTD. h-Court Reporters .1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

i 376 1 that the committee is wrestling with some proposals to 2 change the enforcement policy that hinge on use of 3-corrective action programs at plants. So that as you go 4 through your presentation, you can feel free to emphasize i 5. things about your. corrective action programs. l 6 'MR. STORZ: Okay. We can tell you that it is a .7 high volume,. low threshold plant and it created a tremendous 8' . backlog. We will talk about that, Dave will talk about that l L ~9' .some as we go through. 10 DR. POWERS: What we are most concerned about is 11 1 that the corrective action. program is addressing issues of a 1:2

variety of levels of safety significance.

And NRC comes 13 along and finds low level violations and gives you 30 days 14 to respond to them. That clearly.must' create some () 11 5 disruption in your corrective action programs on things that 16-may have higher safety significance. We would like to hear 17; what your thoughts are on that subject. L .18-MR. STORZ: Okay. I think what we would like to 19; .do maybe is complete our formal presentation and we will -- 20' .maybe-we can have some discussion around that subject. 21-DR. POWERS: That would be fine. That's good. 22-MR. STORZ: Okay. Our goal in building these nine i 23. . specific plans was to_ establish an effective corrective i 24-action' program, improve the performance on standards. One I l ~ 25' of the clear things that I found, based on my years of l t i l /^ ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025. Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 v.

377 I working in this business, was a lack of standards. /N 2 For example, just to give you a simple example, I ' Q 3 toured the facilities and I asked employees who their boss 4 was, and they would give you the I don't know salute and 5 they really didn't have any bosses. I actually developed a 6 memo and said, I am going to keep coming around, and by 7 September the 15th, you are going to fail miserably if you 8 can't tell me who your boss is. And the operations 9 superintendents, the shift supervisors, wrote their name on 10 little pieces of paper and gave it to the equipment 11 operators. Said if he asks you, I am your boss. 12 Now, that is Just how disconnected the leadership 13 was from the workers. So if you don't know who your boss 14 is, you know there has nobody been discussing standards with (v) 15 you. 16 CHAIRMAN SEALE: But probably more important, 17-though, is did he also say, and if you have a problem, come 18 see me. 19 MR. STORZ: Well, I am not sure he had learned how 20 to use that attachment to being the boss. 21 CHAIRMAN SEALE: Okay. 22 MR. STORZ: I think right now he just wanted to 23 make sure that I thought everybody had a boss. 24 CHAIRMAN SEALE: Okay. 25 MR. STORZ: Right. One of the things that I never , ("'T ANN RILEY & ASSOCIATES, LTD. ) (_,1 Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

378 ) 1 will forget, Tim Martin, then regional administrator, said, /'N 2 well, Lou, I think you can fix the material condition of the

h 3.

plant and I think you can probably fix the process and 4 procedures, but we have grave doubts whether or not you are 5 . going to correct the cultural issues at this site. That was 6 in -- that was two days after I had reported on board, we 7 had-a.public meeting, and so he asked me how I was going to 8' deal with that. And it is about leadership, it is about 9 having teamwork, and it is about training and having a touch 10 ' corrective action program, those are the four cornerstones 11 of the recovery process. 12 Clearly, the equipment reliability issues at the 13 station were of our primary concern. Without the equipment 14 reliability, you really don't make a lot of progress, so we ew 1 ( 15 devoted a lot of early review work in finding out what was i A s/ s 16 wrong with the plant. 17 I think with this, I will turn over the details to L 18 Dave, and Dave is going to cover a lot of the details of 19 recovery. And as the plant manager of starting up the first 20 unit and working with experience in design, he also did a 21 great job in interfacing with the NRC and resolving a lot of 22 technical issues. Dave. 23 MR. GARCHOW: Okay. Good. Thank you, Lou. And 24 good morning to the ACRS members. 25 What I would like to talk about for a minute is kN) Court Reporters ANN RILEY & ASSOCIATES, LTD. 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202)~ 842-0034 i~ r

379 1 just our process for recovery, and the process was geared f 'N. 2 around' fixing the plant, fixing the processes, and fixing ra 3 the people. And we did that, we fixed all three of those i i 4 areas using the same process, which I will describe. 5 First, we used a system readiness process to i 6 promote the teamwork Lou was talking about, and we put 7 system teams together of operators and engineers and key 8 maintenance personnel, and they did a programmatic review of 9 system performance, reviewing past historical documentation, i 10 interviewing operators and reviewing previous trip reports, 11 we were able to assemble for each of the -- we started with 12 46 key systems and then, as we found the issues, we expanded 1 13 that to 88 systems and the plant and developed a 14 comprehensive phased approach for recovering the systems one [) 15 .at a time using these system teams. v 16 As a result of this, each of these teams had to 17_ present their findings to a Management Review Committee, 18 which the station general manager, myself, chaired, along 19 with other key management personnel that we had brought in. 1 20 So that promoted the accountability Lou talked about. We 21 charged those system teams with identifying and tracking to 22 completion, the solving of the issues on their systems. So 23 besides fixing the hardware, we were starting to promote the 24 teamwork and accountability as part of -- with the people 25 -issues.

O)

ANN RILEY & ASSOCIATES, LTD. l(' 1025 Connecticut Avenue, NW, Suite 1014 Court Reporters L Washington, D.C. 20036 (202) 842-0034

380 1 DR. WALLIS: Well, I understand you had 88 systems )#N 2 and the management didn't know if they were operable or not. g O 3 MR. GARCHOW: I_wouldn't say operable or not. 4 When I use operable, being a licensed personnel, I use that 5 as big O " Operable." We knew there were various states of 6 degradation.on the various systems that we reviewed.

And, 7

in fact, during our reviews, we determined that eight 8 systems had caused 45 of 54 forced down-powers and outages 9 since 1988. So 54 down-powers and outages caused by the 10 same eight systems. 11 We dug after those. systems. As a result, we 12 completed 273 modifications to those systems and did a 13 comprehensive test program at the end, which I will talk 14 about, to validate that we achieved the desired results. () 15 Additionally, when we went out to the 88 systems, 16 we ended up_ completing around 40,000 activities, including 17 over 550 station modifications to each facility, up to and 18 including a complete steam generator replacement for Salem 19 Unit 1. 20 CHAIRMAN SEALE: Excuse me. You say that eight 21 systems were responsible for -- 22 MR. GARCHOW: Forty-five of 54 down-powers, trips 23' and transients. 24 CHAIRMAN SEALE: Okay. So, there were 54 in all? 25 MR. GARCHOW: Yes, since -- between 1988 and 1995 ANN RILEY & ASSOCIATES, LTD. i(, Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 (-

381 I l' when we did our review. (~'j 2 CHAIRMAN SEALE: Okay. Sure. So they were 80 ny 3 percent of.the problem, basically. 4 MR. GARCHOW: Yes. So we knew we could get a long 5 ways on recovering the equipment performance if we could fix U 6 'those eight systems, t 7 CHAIRMAN SEALE: Okay. 8 MR. GARCHOW: We also than -- so I talked about 9 the system teams coming before the Management Review 10 Committee. That was the key station managers, and we 11 approved every restart action plan and reviewed progress on 12 all technical issues that we needed to resolve. Dave Powell 13 will talk later in the presentation. 14 We assembled a list of technical issues that we '( ) 15 wanted to solve to the Management Review Committee. The NRC 16 also had those lists and Dave will talk about the process in 17 which we.kept the lists equal to one another, so there were '18 no lapses in communication. And we had a process of L19 approving those technical issues where the owners had to 20 come present a package for the Management Review Committee 21 approval to demonstrate to us that they had solved the 22 problem, and we did that prior to submitting these restart .23 packages to the Nuclear Regulatory Commission. i 24 We, additionally, approved the system and 25 component testing plans. We, as part of the recovery at l ANN RILEY & ASSOCIATES, LTD. 1,) - Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 ( Washington, D.C. 20036 (202) 842-0034

382 1 Salem Unit 2 and 1, we essentially did a new plant start-up ./~N 2 test-plan, had very similar elements. We had a test review 3 board, we did comprehensive component level testing, and 4 then system level testing, and then plant level testing, up 5 and. including a -- from 90 percent power, just the securing 6 .of a main.feedwater pump to demonstrate that our new digital 7 feed system and our steam bypass system'to the condenser 8 could handle a loss of the feed pump. Both of those tests 9 for Salem Unit 1 and Unit 2 were done satisfactorily with no 10 -issues. 11 And, in fact, subsequent operation, we have had 12 the opportunity to have two loss of feed pump issues at 13 Salem and Hope Creek where the plant responded fine. The 1 14 feedwater system was the largest contribution system to j ) '15' plant trips and transients out of those eight systems that I 16 discussed previously. 17 MR. STORZ: I think it should be noted that prior 18 to the installation of this new equipment, there wasn't any 19 feed pump trip where they survived a trip and didn't trip 20 the plant. So this was a significant change. A lot of 21 these problems were with feed pumps. 22 DR. MILLER: You had the original feedwater 23 system, Westinghouse feedwater system, analog system? 24 MR. STORZ: That is correct. That is correct. 12 5 And now we have the Westinghouse advanced digital feed 4 / ANN RILEY & ASSOCIATES, LTD. 'q, Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 (202) 842-0034 I l i

383 -1 system that is at several Westinghouse plants. (i(~}. 2 MR.'GARCHOW: Now, for operational readiness, we i%J l' 3 had accountability managers present testimony that their 4 processes that they were. responsible for met the regulatory 5' requirements and would contribute to safe operation. So we 6 took our-processes, assigned owners, did self-assessments of j ~7 these processes. In many cases, brought in other industry 8-and used INPO personnel to help us write the assessments up. I 9 And then these managers that owned these processes had to l'0 demonstrate that they were fixed and able to support safe 11 operation, and that was in our restart plan to do that. And 1 12 the same Management Review Comraittee reviewed those, j 13 As you can demonstrate with my discussion, there 14 were six or eight of us that reviewed just about everything l ['T 15 .before we started up, and spent a lot of time in discussion N_) 16 and challenge meetings as our Management Review Committee in l 17 the afternoons. And we also, another benefit of this 18 process that we didn't design into it but we got out of it 19 .is the learning, because it really allowed us to do some L 20 very good coaching in a very good form to our front line 21 personnel coming in and presenting their issues so we could L '22 reinforce our standards in a very collective, consistent 100 manner throughout the process. We reviewed the processes in L l 24 that way. l 25 System teams had to come in and demonstrate their p/ ANN RILEY & ASSOCIATES, LTD. ' g, Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 2 84 b3 i

i l l 384 1 -systems met the design requirements and that we had fixed

j'~}

2 causes of previous poor performance in the systems, and that \\ ' L.) l 3 before we -- and that we had a test program that would 4 further demonstrate the system's ability to perform its 5 -function. 6 Prior to changing operational modes, starting with 7 reloading the core, during the majority of the recovery we 8 had off-loaded the core to the spent fuel pool, so we didn't 9 have to worry too much about protecting the core other than 10 the systems for spent fuel pool cooling. To go from putting 11 the core back in, all the way up through_ mode 1, we used the 12 affirmation process where the op. superintendents, leading 13 their system teams and their crews, had to come in and 14 affirm to the Management Committee that they were ready to 1 15 support restart. V 16 MR. STORZ: In this case, the op. superintendents 17-are what you probably are more familiar 27.lled shift 18 supervisors. Our lead man at the plant is called an 19 operations superintendent, and they, the six or seven of 20 them that were certified, that we are going to use the run 21 the plant, did a lot of this affirmation. They are the ones 22 that had the long memories from the past and we wanted them ~23 to sign-off that the equipment was now fixed. 24 DR. POWERS: I guess I am not familiar with this 25 thing that you call-the affirmation process. 1 []/ ANN RILEY & ASSOCIATES, LTD. g Court Reporters 1025~ Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

385 1 MR. GARCHOW: Yes. (} 2 DR. POWERS: Can you give me some insights? I V 3 mean why this over some other process. 4 MR. GARCHOW: Well, we wanted, as Lou talked 5 about, raising standards and creating accountability, it was 6 one of our goals for fixing the people. So everything we 7 did while we were fixing the hardware had to also have an 8 ele.nent of increasing our standv rds and accountability of 9 our folks. To stand before -- I mean our Management Review 10 Committee did not look totally unlike this kind of set up, 11 around a board with somebody standing up with an overhead 12 saying that they affirmed that this system, or the op. 13 superintendents affirmed that my crew understands the role 14 of tech specs, what we are going to do when we have n) ( 15 transients, what my standards for three-way communication is ,) 16 in the control room, right on down the line for our 17 operation standards. They had to stand up in front of the 18 Management Review team and affirm that they could do that, 19 and sign their name on the affirmation process. So it was a 20 way of creating accountability. 21 DR. POWERS: And why is this better than some 22 other method? 23 MR. GARCHOW: I wouldn't say it is better. We 24 didn't really look at any other methods. This was the 25 method we came up with and I can tell you it worked. (~')\\ ANN RILEY & ASSOCIATES, LTD. (_ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

L 386 1 DR. BARTON: I think it was very fitting based on I['T ' 2 the culture that you had. ~%.)- 3 MR. STORZ:. We were trying to make a behavior l 4 change. Gee, Lou, I told you this thing wouldn't work in 5 automatic. I am telling them -- tell me it is working in 6 automatic or I am not going to start the plant up. So when 7 they convinced themselves it was working in automatic, I E said sign on the dotted line, we will take that check. And 9 we used that kind of thinking to create accountability. 10 MR. GARCHOW: We also had to model the ways, the 11 Senior Management Team. So it didn't -- accountability i 12 wasn't just for the workers, it was for my team and myself. 13 So our process that we designed required, when our 14 Management Review Committee and I had satisfied myself we (n) 15 were ready to safely operate the facility, I had to sign a 16 letter out to Lou saying that I was convinced we could 17- . operate the facility safely and sign my name to it. And 18 then Lou did a process where he discussed, he talked to 19 several plant personnel, the ops people, did some 20 walk-arounds of the facility, and then Lou had to sign a 21 letter to Leon Eliason, the CEO, that he had done a review 22 of what I had done, in his own independent review, and that 23 we were ready to start up. 24 And then our process also required our quality 25 assurance director to do the quality process, which was l- [~h ANN RILEY & ASSOCIATES, LTD. (m,,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 I Washington, D.C. 20036 (202) 842-0034 L

387 1 running independent to the process I just described, to 2 affirm to the CNO that we were ready. And we had an j 3 independent team, led by Jack Martin, former NRC Regional 4 Administrator, that did another independent review. 5 And Leon Eliason used all three of those reviews, 6 from Lou and Bert, from the quality assurance director, and 7 from the. independent team led by Jack Martin, before Leon 8 sent the letter to Mr. Miller saying that the Salem units 9 were ready to restart. 10 So we built this chain of accountability up 11 through our process, starting from the worker right up 12 through the chief nuclear officer. 13 DR. BARTON: Was this presentation ever made to 14 the board of directors and the board directors had to come i ()' 15 to the site to hear it? 16 MR. GARCHOW: There was -- yeah, the board of 17 directors did.come to the site. I can think of several 18 times during the process. In fact, our Nuclear Subcommittee 19 of the board had an accelerated board meeting scheduled. 20 During the period of the time of the recovery, they met more H21 often.than they typically would meet, during the recovery, 22 to get briefed on this. 23 MR. STORZ: The on-site Nuclear Safety Review -24 Board, the corporate board, had a representative that 25-reported that reported directed to the subcommittee of the f)\\ ANN RILEY & ASSOCIATES, LTD. (m, Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

~. 388 1-Nuclear Board. This process that we are talking about here, 1 2 Leon and myself, and Bert, and this member that is on our 3 Safety Committee reported out to the subcommittee that we 4 'were ready to restart the plant. 5 DR. BARTON: This is a subcommittee, a Nuclear 6 Subcommittee of the board of directors? l 7 MR. STORZ: Board of directors, that's correct. 8 Yes. l 9 DR. BARTON: Has the whole board of directors, 10 Public Service, ever come to the site during this process, 11 MR. STORZ: Since my -- I have been there three 12 yeare, they have been down three times, most recently about 13 a month ago. 14 DR. BARTON:

Okay, j

) 15 MR..GARCHOW: So, as you can see, this process was 16 formal, structured, and provided us a framework to develop 17 accountability in our people. Relative -- so what were the 18 results and some of the key factors of fixing the plant on 19 the hardware,'as I said, we did about 550 mods. 20 Some of the more significant ones were we unified 21 the control room. Previously at Salem, the Unit 1 and Unit 22 2 control rooms were separate, and the layout was such that 23 it didn't promote command control. We essentially gutted 24 the control room architecture, not the panels, but the 25 layout in the walls and made a common control room with an ANN RILEY & ASSOCIATES, LTD. (,,. 1025 Connecticut Avenue, NW, Suite 1014 Court Reporters Washington, D.C. 20036 (202) 842-0034

389 1 elevated command and control perch for the control room -[A 2. supervisor, with our new P250 computer system, having him %) i 3 the tools to be able to direct the operators in a horseshoe 4 type function. 5 We also brought the shift manager, operations 6 shift superintendent, out into the control room area with 7 his office with a clear view of both control rooms. Lou was 8 actually the champion of the control room mod and believed 1 9 if we were going to really change the standards and 10 operations, we had to have a near operating room type of a 11 mentality in the control room, so we needed to give them a 12 first class control room if we expected first class 13 operations. 14 To that end, one of our independent team members, 15 a former plant manager from Surry that was on this 16 independent team that Jack Martin chaired, noted when he 17 came in the control room that there was a reverence you felt i 18 now when you walked:in the door, which was much different 19 than the Salem of the past. 20 We'also upgraded our annunciator system, as I 21 mentioned before, put in an advanced digital feedwater 22 control system. We upgraded all of our electronics for our 23 Hagan controllers. They have been the cause of several 24 events over the years, the misoperation or poor operation of 25 the Hagan control system. We have rebuilt that. And we .p ANN RILEY & ASSOCIATES, LTD. 'g,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

390 1 also put in a very elaborate CFCU accumulator system to { /T 2 handle Generic Letter 96-06, so we now have a keep-filled i _) s 3 system that when we have a plant trip, it keeps the service 4 water header filled all the way back to the containment fan 5 coil units to avoid a 2-phase condition in the fan coils. 6 Additionally, we discovered and corrected some 7 cable separation deficiencies. 8 DR. WALLIS: Did you have 2-phase conditions in 9 the past? 10 MR. GARCHOW: Yes, we had indications where we had 11 had some very minor water hammers occur during loss of power 12 scenarios. Never had complicated that, never had damaged 13 them. 14 DR. WALLIS: This was never fixed until you guys I 'i 15 came on board and decided what to do about it? V 16 MR. GARCHOW: Well, we had had a position that had 17 been taken in the past that we believed that minor 2-phase 18 condition with water hammer was acceptable. When Generic 19 Letter 96-06 came up, it very much clarified what the 20 expectation was on the licensing basis and it was clear that 21 we couldn't defenu that position. 22 And then we found a cable separation issue in our 23 cable spreading room that we remediated. It had to do with 24 the separation of cables in free air and we remediated that 25 situation. ("N ANN RILEY & ASSOCIATES, LTD. (_) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

l' 391 1 So, along the way we were recovering the people. }T 2 We set high standards in training and we changed the passing tis / s I l 3-criteria from 80 -- from 70 percent to 80 percent for our 4 training courses, and we also made that change in our 1 5 -bargaining unit contract. Our expectation that we had for 6 training, we challenged our students to do as well as you 7. can do, not just meet the minimum. That was our constant 8 theme in training. 9 For accountability -- I want to talk about that 10 for a second. You can't legislate accountability. You 11 can't just have Lou send out a memo saying that we are going 12 to be accountable. That isn't going to work. You have to -13 create situations, management has to create situations in 14 which accountability can grow. As I was discussing, the ( 15 Management Review Committee was a situation which-encourages 16-accountability. 17 We restored accountability at the worker level by 18 improving our supervisory skills. We rated and ranked all 19 of our employees at the NBU and gave them honest feedback on 20 their shortfalls and gave them an opportunity to improve, if they didn't improve, we made it very clear what the .1 but 2 22 consequences were. So we raised the accountability in that 23 manner. '24 We also implemented a communications exchange i 25 process so that we could make sure that management messages /7 ANN RILEY & ASSOCIATES, LTD. ' (_,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l'

. ~ 392 1 were very clearly communicated from the Senior Management 2 Team down to the workers. 3 MR. STORZ: Just to give you an example of that 4 kind of behavioral change, it was okay to flunk-requal 5 training. Management would leave you over there for a 6 couple of more weeks, buff you back up, and give you another 1 7 exam. So a lot of our what I would call lazier performers, 8 not necessarily less smart, but lazy, that would keep them 9- -off shift for another week or two. 10 Well, I put out a letter than said you can flunk 11 requal once and then you are going to have to go through 12 some escalated management review. And some our poor 13 ' historical performers suddenly became our best students' So 14 it was about direction and then holding them accountable. I ( 15' mean this just wasn't there before. And so that got turned l-16 around rather quickly and has stayed turned around. 17 MR. GARCHOW: We gave our supervisors training 18 that is called MARC, which Management Action Review 19 Checklist, it is a vendor provided training that Lou is 20 familiar with from his previous assignments. 21 The MARC principles for our supervisors, we told 22 our supervisors and trained them that people will do a good 23 job if they know what a good job looks like. And it was 24 supervision's job to show the workers what a good job looks 25 like. And we also provided very clear expectations on ANN RILEY & ASSOCIATES, LTD. 4t Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 L Washington, D.C. 20036 l (202) 842-0034 i

393 1 procedure adherence, up to and including having the union's ('~') 2 senior management sign a management expectations letter V 3 reinforcing-that procedure adherence at a nuclear power 4 plant is not optional, and that was a combined signed letter 5 between Lou Storz and our senior union leadership. So there 6 was no doubt on either side what the expectation was where 7 the accountability was for following procedures. 8 We additionally had a process in place with our 9 low threshold corrective action program where we said we 10 have an expectation, if you mess up, you fecs up, and that 11 you still have to be accountable for your actions, but the 12 accountability will be much more severe if you are not 13 up-front and forthright with information so we can get to 14 the root cause of problems. That was receivable acceptably () 15 by the employees. And even though we were doing tough 16 accountability, and you heard Lou talk about changing people 17 out, during this period of time, the input to our corrective 18 action program continued to increase. So people were still 19 write up problems that they saw. 20 We used a term called intervention. If you look 21 up intervention in the dictionary it says to intercede to 22 change the course of events. And we used interventions 23 where we needed to, where we recognized that just having an 24 incremental slow change wasn't going to get us where we 25 needed to get to quick enough. . () AlRT RILEY & ASSOCIATES, LTD. (_,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

1 394 1. So within operations and maintenance engineering, 2_ we did interventions, formal interventions. And for 3 ~ operations and maintenance, we pulled the operations and 4 maintenance folks out of the plant, gave them very tough 5 initial. exams to show where they were at. I have a 6 philosophy, I believe that people change when the pain of f 7 not changing exceeds the pain of change. Right. That's why 8-people quit smoking. I mean it is true in any number of 9 areas. 10 Well, to get people past the denial stage, we had 11 to give_them tough tests right when they got to training, so 12 they could convince themselves that they weren't as. good as 13 they thought they were. Once we got them past denial and 14 gave them opportunity to improve, most of-them grabbed onto 1 () 15' that opportunity. We retrained and retested them, and we 16 had some very encouraging results compared to our initial 17 test versus our retest. 18 CHAIRMAN SEALE: You must have been a muleskinner 19 in an earlier life. 20 MR. GARCHOW: I am not sure how to answer that. 21 CHAIRMAN SEALE: With a two by four. 22 DR. BARTON: The answer is yes. 23 [ Laughter.) 24 CHAIRMAN SEALE: With a two by four you get their 25 attention, I guess. That's a compliment. [kq ANN RILEY & ASSOCIATES, LTD. ,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 i l-

.395 1 MR. STORZ: Dave prides himself as being a gentle ("'s 2 person, but I think he has emulated some coaching that he 3 got. 4 MR. GARCHOW: Lou has been a good influence on me 5 in that regard. 6 So, for maintenance, we were having troubles with 7 -- we were having trouble with the maintenance returning 8 equipment to operations acceptably, even as late as June and 9 July of 1996, so a year into the recovery. And we 10 determined that the only way that we were going to be 11 successful is pull the entire maintenance crowd out and 12 replace them temporarily with qualified contractors for 13 about a 12 to 13 week period. -14 That send a message to the maintenance folks that D [G 15 (1) they could be replaced, (2) when they did that, they 16 didn't think that the replacement workers could do the job. 17 LThe reality was, because of our contract incentives, we 18 actually got'more work done and higher quality work done 19 during that period maintenance was in training than we were 20 with our in-house staff when they were in the plant. That 21 sent a message to them. And, also, the pretest that we did, 22 where we'showed that they weren't as good as they thought 23-that were, did that. 24 And we used a process where we set up simulated .25 job areas. We are blessed with very good training n ANN.RILEY & ASSOCIATES, LTD. .'(,) Court Reporters 7 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

396 1-facilities at Public Service Electric and Gas, so we could \\ [i - 2' set.up' motor-operated-valve areas,.we could set up relay V. 3_ fealibrations, and actually set up step-out pads and make 4 people dress-out. So we could set all the standards that we 5 expected for procedure adherence, for RP posting, so we 6_ weren't just judging the~ mechanic's ability to perform the ~ task, we were using these testing, practical factors testing 8 to-demonstrate procedure adherence, following RP rules, 9 stopping when they don't see something that is right, 10 self-checking, STAR, all of those were tested. .11 MR. STORZ: For example, we actually put some 12 buggered-up procedures in there that they were.using, and 13-part of the test was to see if they found the problem or l 14 'just blew right by it. And after they found out that those p) ( 15-were in there, a lot more attention was being given to the '16 written instructions. 17 DR. POWERS: What did.they do? They come through 18-and-you have given them a procedure that has a flaw in it, a- .19 flaw -- a. task that can't be done, or a task that ought not 20 be done? '21 MR. STORZ: Some of each. 22-DR. POWERS: So what did they do? .23 L MR. STORZ: In the beginning, the first few found 24 out that they were blowing by steps. You know, they were p 25 reading the step, not paying any attention, and then when we ? O ANN RILEY & ASSOCIATES, LTD. A, Court Reporters s i 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 f a 3 y- +r -r ..-,r,

397 1 graded them as a failure, even though they had actually done V(\\ 2 the job right, they didn't follow the procedure, or they 3 missed a step in the procedure, or there was a step in there 4 that had they done it, in some cases they tried to do them, 5 and then began to realize this procedure is messed up. 6 Now, that is kind of a behavioral transformation 7 . training. The first few never caught them. But then they 8 suddenly realized if they looked for it, or if they actually l 9. read the procedure, they would be successful. And then they 10 would stop and say this procedure is messed up and they 11 would go get a supervisor like they are supposed to, to see 12 if they can proceed with the job or if they have to stop the 13 job. 14 So they began to understand what our expectation ( 15' was. 16 MR. GARCHOW: In fact, an example of that that I 17 remember'is we did management observations of this 18 maintenance training, and I was out watching a senior I&C l 19 tech calibrate a Rosemont transmitter, and I mean we gave 20 him a correct procedure. Well, the reality is this 21' individual, even though he was a senior tech, couldn't 22 ' calibrate a Rosemont transmitter, and after about an ). h' 23 hour-and-a-half, he was nearly in tears. When he came to -- 24 because people change when the pain of not changing, that 25 was his point of realizing that. He recognized that he (] ANN RILEY-& ASSOCIATES, LTD.

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Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

~ ._....-~..--c--.-_ - -..-... ~. - - - 398 1-couldn't do. Before, he was a victim. Ops got him, the u[ 2.. procedure'got him. I.didn't have enough time, planning, you 3 know, everybody was the problem. 4-We' stripped all of those away in those maintenance l c5 practical factors, where it was-just literally the 6 individual, his hands and a Rosemont transmitter, and at 7 that point he recognized he wasn't really as good as he 8 thought as he was.- And we had numerous examples like that. 1 9 MR. STORZ: The other issue was just about every 10-one of the employees, there was a management person out 11 .there' observing the training. 12 MR. GARCHOW: Right. 13-MR. STORZ: And they had.not seen us participate 14 in training. They had not seen us to try to find out if .l () 15 there was something wrong with the training program. 16 And I remember going out and the guy would say, 17 man, I got the rottenest luck of the draw, you are going to 18 be watching me today. And the guy was replacing a seal on a 19' pump, and we had purchased a lot of great tools at the L 20 plant, and there was a device there to tamp-on the new seal. 21 In the old days you used to use like an old block. 22 So.it said use the tamp-on seal tool. And he is looking l l 23-around at all these tools that he has got. I didn't know 24 what it was either. I had never seen one of these, but 25~ there was a set of cuffs that would fit over different size ,Q ANN RILEY & ASSOCIATES, LTD. (_) . Court Reporters 1025-Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 .(202) 842-0034 L I =.

- =. _ - - l 399 1 shafts, and he finally -- it was okay to esk for help, y'% 2 because there was an instructor there, and he 2inally said, ) ' %.)) \\ ~3 well, if I knew which one of these special tools I ,a s 4 -supposed to be using, I could tamp this thing on, becaust 5 before~they would have reached into their box and got their 6 oak jobby out and tapped it out. 7 So we found out that a lot of the special tooling, 8 they had never been trained on. So the procedure said use 9 this special tool. Well, they had been using their own i 10 tools for years and had never bothered to get them out. 11 These are -- when you talk about the corrective action 12 program, these management observations paid off in big bucks 13 in finding holes in our own processes. 14 MR. GARCHOW: So within engineering, we mF.de the 0

(r~~T 15 engineers pull back examples of their work products they had l

%-) \\ 16-performed, 50.59, DCBs, corrective action evaluaticn 17 calculations, and through a rigorous process using the new 18 engineering managers, the engineering managers and the i 19 engineers had to come in, for each of our engineering 20 employees, and demonstrate to the senior VP of engineering 21 and the directors of engineering, in a panel, that these 22 individuals were qualified to perform their task. So we did l 23 a 100 percent baseline of all the engineers to ensure that j 24 they were qualified to do their tasks. 25 And out of that, we had numerous engineers that we p/J ANN RILEY & ASSOCIATES, LTD. (_ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

400 1- ~ pulled quals:on and then had to remediate them very similar /~N 2 -- very similar to what we did in maintenance and Q-3 operations. ~Because obviously, we couldn't do the 4. intervention in engineering exactly the same, you know, you 5 can't ---it is sort of.hard to-go watch someone do a calc, 6- ~you know, and tell them their pencil'is not sharp or. 7- 'something, you know, so we had to be a little creative.in ~ 8 how we assessed the skills of the engineers, and we came up 9 with_that approach, with this 100 percent qualification work 10 product review for'the engineers. 11 So, what were the results? As a result, during 12 this period of time, about two-and-a-half years, there were '13 about 400 employees that left the NBU, and they left.for two 14 reasons. They either could not or they chose not to meet .D( 15 the new standards we had imposed. And, in_ fact, one of the 16 op superintendents came in-to the ops. manager and actually 17 said that he was resigning, not because he was mad, not-

18

-because he thought-we were screwed up, he came to the 19 realization the night before that he never could perform in 20 the control room to the standards that we were setting and .21 'he was quitting. 22 DR. FONTANA: Four hundred out of how many? 23-MR. GARCHOW: About 2100. And then we replaced 24 those will skilled technicians from other plants in L 25 engineering. We hired college kids and experienced i ' D(_) ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l. Washington, D.C. 20036 l (202) 842-0034 b

401 .1 engineers from other facilities. So we actually had a ~N[J little bit of bringing in and buying high standards by 2 3 hiring people from very successful plants when we had these 4 people quit. Or I talked about our rating and ranking 5 process, there were several people that we 6 performance-managed out that weren't meeting our standards 7 and did not demonstrate over a reasonable period of time j l 8 that they were going to change. 1 9 During this period, I wanted to comment a little 10 on the Employee Concerns Program, because during this 11 changing of accountability, we wanted to make sure that we 12 continued to have a welcoming environment and that people 13 were willing to raise problems. We did numerous surveys, 14 and through this period of increasing standards and

f%

( ) 15 accountability, the number of worker-identified problems i 16 continued to increase. So we saw no indications, and we 17 pulsed it quite often to ensure that while we were j 18 reinforcing the standards and accountability, we made sure 19 we didn't' create a chilling environment, because we still 20 needed people to identify problems at the front line, and we 21 are very -- very mindful of that as a management team. i.. l 22 With regards to the processes, we created a i-L 23 corrective action program with low threshold and high l 24 volume, and within that we have a graded approach to root 25 cause. So lower significant events, we just find, fix and 1 f\\ ANN.RILEY & ASSOCIATES, LTD. E Court Reporters ' s 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

402 1 ' trend. The next level of significance, we will do an ) ~ 2_ ' apparent cause and fix it, do an apparent cause, and trend 3 the apparent causes. But for events that we determine to be ~4 significant as a management team, we will put a formal root I i 5 cause team in place and go do a formal root cause to find i 6 and correct the problem. 7; DR. POWERS: Do you have a particular process that 8. you-follow for root cause analysis? 9 MR. GARCHOW: We used FPI, which is now PPI. 10 Plant Performance Improvement International by Dr. Chew is 11 the framework of our corrective action program and our root 12 cause. So, there's numerous other plants that have a l 13 program that looks identical to ours. 14 MR. STORZ: We also train -- r~ (N) 15 DR. POWERS: It is very popular. I 16 MR. STORZ: We also train our people on the 17 barrier process that INPO has supported. Not all the people 11 8 were trained on that, but a lot of the operations 19 department. 20 DR. POWERS: I am familiar with it. 21 MR. STORZ: It is just a set of barriers between a 22 beginning point and the safe end point and you move up to 23 certain barriers. It is a fairly simple, easy to train an 24 operator that is making rounds. What are your barriers 25 between you and causing a piece of equipment to go s .f ANN RILEY & ASSOCIATES, LTD. \\ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 j Washington, D.C. 20036 (202) 842-0034 t

403 1 inoperable, for example, jT, 2 MR. GARCHOW: We also knew that we had to train V-3 our folks, we had to offer them the opportunity to improve 4 their skills. We reestablished line management ownership of 5 training. Initially, when the new management team arrived, 6 training was something the training department did, and you 7 sent your people over there and they came back and that was 8 training. 9 DR. BARTON: But continued to be accredited by 10 INPO even though that was the practice at the site? 11 MR. GARCHOW: There's varying levels of how that 12 is implemented. We had a program in place that met the 13 INPO, the INPO standards in most cases. We had had findings 14 in that area, and had been working to correct them. But (n) 15 this was a case where it wasn't going to -- the previous (./ 16 philosophy was working at these changes in an incremental 17 basis. We knew that if we were going to make the kinds of 18 step change for Salem that we needed, we needed to give that 19 incremental change process that was underway a little bit of 20 gas. 21 So some of these issues had been recognized as 22 self-identified issues in previous INPO reports. 23 .MR. STORZ: The operations group at Salem had been 24 on probation when we arrived there. 25 DR. BARTON: Okay. ,f's. ANN RILEY & ASSOCIATES, LTD. (,,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

l 404 1 MR. STORZ: There was -- there is a clock when you (N 2 get-put on probation by INPO. \\s-3 DR. BARTON: Right. 1 4 MR. STORZ: I had to go down and request an 5-extension because the new management team needed more time. 6 Since both units were in cold' shutdown, they allowed us 7 another about five months of time to go in and we did 8 another assesament, another complete assessment. We hired a 9 new training director. We shifted over to I would say the 10 more advanced programs that had been successful with INPO 11 accreditation and they allowed us another additional two 1 12 months to work, in addition to the five I asked for, to work 13 on the equipment operator level training programs. 14 DR. BARTON: Okay. ] 15 MR. GARCHOW: We established peer evaluations out 16 in training. We instituted technician based job 17 qualification OJT and OJE. We raised the standards for 18 passing, as I previously mentioned. We used training 19 expectations, attendance and performance in individual 20 employee performance reviews, so we anchored that 21 expectation in performance reviews. 22 CHAIRMAN SEALE: Was the final certification of 23 technician type people done by their supervisors rather than 24 the training department? l 25 MR. GARCHOW: Yes. The ownership of i (^\\ ANN RILEY & ASSOCIATES, LTD. ) Court Reporters \\ 1025 Connecticut Avenue, NW, Suite 1014 i Washington, D.C. 20036 l_ (202) 842-0034 I

405 1 qualifications of employees at the NBU is the supervisors ) and managers, not the training department. 2 '3 MR. STORZ: And before any supervisor can 4 supervise that, I have to interview them. I am in their 5 sign-off. They complete their INPO accredited training, 6 then there's a series of interviews wit. their senior 7 management. 8 CHAIRMAN SEALE: And time-wise, this was in what 9 time period? 10 MR. GARCHOW: Late '95 to the fall of '97, we 11 completed the majority of these actions I am discussing. 12 And we also formed a union-management oversight panel for 13 training, we called it Joint Qual Review Board, and that 14-made the bargaining unit part of the process for our ( 15 training and gave them -- because we made a commitment to 16 the worker that we would increase their skills, and that was 17 seen as positive by the bargaining unit, and they were very 18 instrumental in our success in improving training. I would 19 probably yield it would_have been much more difficult 20 without that kind of partnership. 21 DR. MILLER: The Salem units, are they completely 22 unionized or is that 23 MR. GARCHOW: We didn't mention at the beginning, '24 we are one site. We have two Salem units and one Hope Creek 25 unit, and they are'about 600 yards apart. So it is ~ ANN RILEY & ASSOCIATES, LTD. . g) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

406 1 literally one site, you come in through the same security. } 2 DR. BARTON: All people involved in nuclear 3 activities are now at the site? 4 MR. GARCHOW: Yes. All is a comprehensive word, 5 but I would say yes. 6-DR. MILLER: And the Hope site went through the 7 same process also? 8 MR. GARCHOW: That's an interesting question. We 9 have got a trend letter for Hope Creek for declining 10 - performance in the fall of '95, and we knew that when we 11 were recovering these, that we couldn't just do it at Salem, 12 so the majority of what I am talking about, it may be on a 13 lower scale because the problems weren't nearly as deep, but 14 we did very similar things that I am discussing today for () 15 Hope Creek. And that was part of our Hope Creek excellence 16 plan to get -- to reverse the declining trend at Hope Creek. 7 So this was essentially done as one management team. 18 DR. MILLER: Is Hope Creek also a Westinghouse 19 plant? 20 MR. GARCHOW: No. 21 DR. BARTON: It's a boiler. -22 MR. STORZ: The level of decline in the equipment 23-performance wasn't nEarly as severe, but the decline in the cultural issues was just about the same. The knowledge 24 25 level of'the players at Hope Creek, because of a newer l [\\,]/ ANN RILEY & ASSOCIATES, LTD. l Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 I (202) 842-0034 I

3 407 1 plant, and many of them had gone through the start-up i (V) 2 program, was superior to the knowledge level of folks at 3 Salem, but it was declining very rapidly. So they performed i 4 better on these intervention exams that we did and their 5 maintenance had been slightly better over the near term. 6 But if you would just sum it up, you would have to say that 7 there wasn't a lot of difference in the management and the 8 accountability issues. 9 DR. MILLER: So Hope Creek has new managers? ) 10 MR. STORZ: Hope Creek has as many new managers i 11 and individuals as Salem. 12 DR. MILLER: Is there a cross-fertilization ) 13. amongst penole, in other words, people from Hope Creek come 14 to Salem and work, or is it totally isolated? I v) 15 MR. STORZ: The maintenance, engineering, quality, t 16 radiation protection areas are pretty much becoming 17 integrated. We are still working on dual qualifying some 18 operations personnel for our next change. 19 DR. POWERS: -That sounds challenging. 20 MR. STORZ: Well, see, when you get to a certain 21 level, we want them to view the site as one site, and we can 22 get SRO license on one unit and a certification on the 23 other, and then we would let them make operational and i 24 management decisions for the whole facility. That is what 25 our game' plan actually is going to do. /' ANN RILEY & ASSOCIATES, LTD. .k Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

..~ 408 { 1 MR. GARCHOW: We would never expect the control i ( 2 . room operator to report one day at Salem and the next day at i 3 Hope Creek. That is not reasonable. 4 MR. STORZ: We are talking at the management level 5 here. 6: MR. GARCHOW: Right. Also, within emergency I 7 planning, we changed our emergency planning, our management. '8 We made the line organization responsible for emergency 9 planning. Some of the similar culture we talked about in .10 training was there for. emergency planning. That was 11-something done by the emergency planning organization. 12 Lou wrote a letter right when he got there telling 13 everybody they had to have at least two jobs, their regular 14 job and an emergency planning job. So we fostered line j 15 management ownership and participation in emergency 16 planning. 17 We'also put a big effort'to increase the 18 communication with our states that were in the emergency 19 planning zone and put a lot of effort into that. 20 We increased the frequency and depth of our drills 21 and added objectives. So we currently right now do -- we 22 h' ave four emergency planning teams, and we do drills 23 quarterly for each team, and then we do desktops monthly for 24-various facilities. We are keeping that out in front of our .5 people routinely. That was one of our big improvements. 2 [~T ANN RILEY & ASSOCIATES, LTD. L ' m,/ Court Reporters \\ 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

-_.~.. -. 409 1 DR. POWERS: This includes fire protection plans? i

r'N 2

MR. GARCHOW: Yeah, the fire protection \\\\ ) 3 participates in fire drills and participates in various 4 E-plan scenarios. 5 Self-assessments, we knew that was the key, that 6 we wanted to find our problems before others did. So we 7 have a site -- common site self-assessment procedure and we 8 linked it to the corrective action program, so findings that 1 i 9 we find that are significant in a self-assessment are backed 10 by our corrective action program. And, as I mentioned, we l 11 train people in root cause analysis. l 12 We are continuing to still focus on 13 self-assessments. We recognize as a management team we are 14 still not where we want to be, but we implemented a program () 15 which didn't exist prior and made a lot of efforts in that l 16 area. 17 I guess, in conclusion, in 40 minutes I tried to 18 describe what two hours of work was in -- or two years of 19 work, I mean, not two hours -- two years of work was in 40 20 minutes, but the key, if I had to walk away, and let me 21 . reinforce it again, it is setting high standards and driving l 22 accountability -- make people want to be accountable, H-23 'because there is really job satisfaction in being l 24 accountable for something. And those were the two keys from 25 my perspective. I 1 ('Pg ANN RILEY & ASSOCIATES, LTD. T,) Court Reporters 1025 Connectic",t Avenue, NW, Suite 1014 2 84 - b34

i 410 l' As we were completing our recovery actions, it was jr" 2 O} .obviously necessary to maintain a very health working 3 relationship with the NRC and our State of New Jersey Bureau 4-of Nuclear Engineering, who were involved in our restart 5 process. And to discuss how we optimized that communication 6 throughout this two-year period, I will turn it over to Dave -7 Powell, our Director of NBU Licensing. 8 DR. POWERS: Before you get away, let me ask a 9. question -- a little bi'. - about management theory here. It 10 seems to me that you have'come in and imposed a Theory X 11 management structure and been successful in getting 12 turnaround which Theory K is very good at doing. Do you see 13 it as now you are moving.into the sustained activity, or do 14 you think you are still in the -- where you do turnaround ( 15 kinds of activities? Or have you gotten the. level you want 16 to get to? 17. MR. STORZ: We have a slide that we put together 18 and gave to the NRC here, I guess about four or five months 19 ago.

Yeah, In fact, I'll leave a copy here with you.

And '20 this slide actually -- it is-not in there. I don't have the slide with me, but the slide talks about we are now moving -21 22 away from the directional, high task oriented, do it this 23i way, do it that way approach to a more team oriented, 2 41 participative organization. .25 We have sent almost' half of our employees through ~ ANN RILEY-& ASSOCIATES, LTD. Court Reporters '1025 Conn 3cticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 (202) 842-0034

411 1 a Dale Carnegie self-improvement kind of program, 800 and ('T 2 some employees out of the 2,000 who are there. 3 DR. POWERS: That's a bunch. 4 MR. STORZ: All of our supervision has been MARC 5 trained on these simple principles that we have talked 6 about. And now, with the arrival of Harry Kizer, we are 7 transitioning into a gentler, kinder organization. And 8 simply, this first part was teaching. We are in practicing 9 now, and we are going to be in perfecting. And we are in this transition period from the teaching to the perfecting. 10 11 And so there is some of each going on yet. Some of the 12 directional coaching, still some stiff coaching. 13 We are heading into the counseling and advisory 14 approach. And soon we will be in what I would describe as ,.--(y) 15 the delegate mode, and that is where Harry wants us to be. 16 That is where the team -- we are working on team-building 17 amongst our own organization. We are acting like a baseball 18 team, you play left field, you play right field, and now we 19 are going to shift we are going to shift into the basketball 20 team mode, where there is inter-changeability and 21 cross-training, and accountability. 22 So that is kind of what we are doing, and we feel 23 like we are being successful at that. But at the same time, 24 there is this worry that complacency and business as usual 25 will break out. So I am on one side of the equation, (~') ANN RILEY & ASSOCIATES, LTD. (_/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

412 1 holding the line a little bit. The organization is pulling 2 over the other, so cautiously going through this transition. ) 3 And I think this is the critical -- the critical 4 time. The next year, we will see how well we have driven 5 down this accountability business and the behavior changes. 6 'And we are trying to shift to'you get for every minute you 7 are out there to a performance-based, pay for performance 8 organization. That is kind of what you wanted to hear, but 9 that is where we are headed. 10 MR. GARCHOW: Let me give you a practical example 11 of that. Our 9:00 morning management meeting, a J' 12 . year-and-a-half ago it was chaired by the plant manager. We 13 would issues and at the beginning we would just collectively 14 say this is what we need to go do, and let's go get about () 15 doing it. Then we transitioned into -- and I can remember 16 doing this personally, saying, okay, here is the issue, what 17 do you think we ought to do? And then I could say, well, we 18 have got to think about this, this and this. 19 And, now, at our 9:00 meeting, the directors and 20 Lou sit around the outside ring'and at'the middle table are 21 all the key line managers for Salem and Hope Creek and they 22 discuss the issues of the day, and many days we don't say a 23 word, or we just offer some insights based on our 24-experience. So we have transferred the baton down to the 25 managers, who are now trying to transfer it down to the O ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l-

1 413 1 superintendents, to get to this more participative team

_(~}

2 style of management, as opposed to just telling people what C/ 3 to do. 4 DR. BART0N: Do you see the time when you get to 5 where the shift supervisor runs that morning meeting? 6 MR. GARCHOW: Yes. He is there right now and the 7 meeting is run by the ops. folks. That was another thing we 8 didn't mention in our presentation, but one of the things 9 that Lou has as a core value that we implement, is that l 10 Salem and Hope Creek are an operations led organization. 11 DR. MILLER: Let me go back to my question en the 12 union situation. First of all, how high level are ycur 13 union people, up to what level of supervision? Are any 14 supervisors -- (n) 15 MR. GARCHOW: No supervisors are part of the v 16 bargaining unit. 17 DR. MILLER: They are not. Oftentimes -- 18 DR. BARTON: Control operator union? 19 MR. GARCHOW: Yes. 20 DR. BARTON: Okay. 21 DR. MILLER: So operators, control room operators 22 are not shift supervisors? 23 MR. STORZ: No SROs are in the union. 24 CHAIRMAN SEALE: Okay. j 25 DR. MILLER: Now, oftentimes, the concepts you are () ANN RILEY & ASSOCIATES, LTD. (,_/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 l (202) 842-0034 f

m.. -m.. i 414 E 1 talking about in conflict sometimes with the union i /~* 2 philosophy. How is that working out as far as h 3 accountability and as far as this pay for performance versus 4 pay for hours? 5 MR. GARCHOW: Our contract has a management rights 6 clause, and we have made it very clear.through some very 7 open dialogue, every Monday morning in Lou's office with the 8 union management. 9 DR. MILLER: You have a management rights clause, 10 . Okay. 11 MR. GARCHOW: Yes. Where we-have the right'to run 12 the facility and where -- and what rules we have committed 13 to in the contract, we discussed that in an open forum and-14 have -- and for many months with the senior union t 15 leadership. L 1!6 DR. MILLER: The senior labor leadership is all on 17 board, as much as that can happen? -18 MR, STORZ: It is all about trust when you are '19 dealing with labor, labor leaders, and we have run off the 20 contractors. Contractors, and I have trained people how to 21 be insulators, carpenters,. assemble workers, and for the 22 first time in recorded history in out there, this past June, 23' we were at zero level contractors. We have maintained a l 24 very' low level this summer. Historically, it had never been 25 below 300. So I am holding up my end of the bargain. .I am t. L ANN.RILEY & ASSOCIATES, LTD. Court Reporters L 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

415 1 cross-training people. We are committing to them, to keep 2 the contractors to a minimum, and that will be a commitment. 3 If I' achieve that, their trust of management is 4 going to improve. They are going to give back some, by 5 practice, management rights that they think they own.

Now, 6

I am going to have to work -- maybe have-to do some 7 arbitrations to restore that. And we have been to 8 arbitration on several issues, some of which I have won, 9' some I haven't. But that is the process. You have to be 10 patient. You can't get real discouraged. And you have to ,11 build-a trust relationship. 12 They view me as a very hard individual but they 13 trust me now because I haven't done things that I didn't 14 tell them' ahead of time. .() 15 DR. MILLER: I think that is -- I-understand that 16 is the key. Good rapport between the union leadership and 17 the management. 18 MR. STORZ: Right. We think we have the best 19 working relationship that has been established out there in 20 many years. 21 DR. UHRIG: Do you bring in outside contractors .22 for-things like steam generator replacement? 23 MR. STORZ: Yes, sir. .We used a lot of -24. contractors during this long outage. We did a scheduled 25' plan outage this past summer where we replaced the safety /~% ANN RILEY & ASSOCIATES, LTD. k,,). Court Reporters -1025 Connecticut Avenue, NW, Suite 1014 -Washington, D.C. 20036 (202) 842-0034

416 1 ' valves on Unit 2, and we didn't use any contractors. They (h 2 see that as a real breakthrough. Before, management always N,.j' 3 went out and got contractors, pushed them out of the way and 4 did the work. And in this case, it was planned, executed 5 and delivered by our in-house work force. 6 I actually think that is the biggest turnaround 7 item that I can share with you. Other people see some -- we 8 have got a list of positives here, I put my big check mark 9 by that. And it is interesting that the board members also 10 viewed'that.as a significant change from what they had heard 11 about the facility for years, I am talking about the 12 corporate board. 13 DR. UHRIG: Dave. i 14 MR. POWELL: Good morning, gentlemen. The last s 15 time I was in front of the ACRS was about 13 years ago, I 16' was with the NRC at that time, but it is a pleasure to be 17 back here. The surroundings are a little bit better than 18 the rooms that you all had to deal with back them. l' 19 DR. POWERS: An arguable point. 20 [ Laughter.) 21 MR. POWELL: So I am here to discuss the 22-regulatory interface function that invariably goes along H 23 with'a process that we went through both on our side of the 24 house, as well as the NRC's side. But before I get started 25 with that, I would like -- Dave alluded to the fact that we /~'} ANN RILEY & ASSOCIATES, LTD. k_/ Court Reporters s 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l lI i'

.._m 4 417 1 have other stakeholders that we have to deal with, in 2 particular, the Bureau of Nuclear Engineering with the State 3 of New Jersey, as well as the environmental folks, too, i 4 because there is quite a bit of environmental requirements 5 over in New Jersey that we are subject to, so we had to 6 interface with the New Jersey DEP also. 7 And also on top of that, we had to do quite a bit 8 of communicating with various Senators' staffs, because both 9 Senator Biden and Senator Lobiondo were very, very ~ 10 interested in how we were progressing and what our 11 interactions were like. So all of those activities were 12 . ongoing during this two-and-a-half year period where we were 13 trying to communicate everything that we had done to all - 14 interested parties at that time. () 15 To start off, I will just go over the problem 16-identification. I.know Dave talked at length what we did. -17 But in December of '95, we had met'with the NRC in a public 18 meeting down at the site, where we essentially presented our - 19 restart' action plan. It was'quite an elaborate document. 1 . 20 We were going -- we adopted it, I can't remember if it'was 21 right after or right before that, for the NRC to review and 22 take a look at, because they were also drafting their own 23 restart action plan in accordance with their Manual Chapter 24-

350, 25 So we gave them ours, they took a look at it, and,

) O ANN RILEY & ASSOCIATES, LTD. Court Reporters 3 .1025 Connecticut Avenue, NW, Suite 1014-Washington, D.C. 20036 (202) 842-0034

l t 418 1. obviously, there was some dialogue as to what we had in I ('N) 2 ours. They took a look at what they thought was needed at 'J 3 the site. And, fortunately, sometime around January or l 4 February, we found that the fit was -- was real tight. 5-Okay. Our restart action plan mimicked theirs quite a bit. 6 We were able to proceed from that point, basically, with a 7 fairly consistent set of action plans on both sides of the 8 house. 9 Now, we committed to ensuring that all of the 10 action plans, as part of the Manual Chapter 350 items, were 11, completed prior to restart. They would be reviewed by the 12 NRC and signed off, and some of that I will talk to right 13 now. 14 In total, there was 116 programmatic issues and ' - [ )) 15 technical issues for both sites. Some of them were Unit 16 1-specific, some of those were Unit 2-specific and some them 17 'were combined. I will talk about the Unit 2 ones first 18 because Unit 2 was the first unit to come online even though 19 originally Unit 1 was slated to be the lead unit, but then 20 we found the problems with the steam generator tubes and we 21 opted to change-out the steam generators during this outage. 22 There were 46 technical issues on Unit 2 in common 23 that we were reviewing, as well as the NRC, and then there 24 was 31 programmatic issues that had to get resolved prior to 25 us basically being allowed to start the unit back up. ! O ANN RILEY & ASSOCIATES, LTD. (,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

419 1 On the Unit 1 side there was -- after all that had (~T 2 been done, all the common issues were taken care of, then we d 3 had an additional 28 technical issues on Unit 1 that needed 4 to be resolved prior to Unit 1 restart and eight 5 programmatic issues that were more or less specific to Unit 6 1. 7 In terms of problem resolution, again, Dave 8 alluded to the fact that we had assigned teams of 9 individuals headed up primarily by operations personnel, but 10 interspersed with basically maintenance, design engineering, 11 system engineering personnel, and each of these teams would 12 go through their whole process, do whatever they needed to 13 do to get their particular item in a position where it could 14 be presented to the various management groups that it would [) 15 have to go through. That would be our Station Operating 16 Review Committee, which is SORC, okay, which would then lead 17 up into the Management Review Committee that Dave talked 18 about at some length. 19 The process was quite elaborate. There was 20 additional teams on the engineering level that reviewed all 21 of these action items before they ever got up to the SORC 22 boards. So, like in the areas, for instance, that dealt 23 with just the overall testing program, we had a separate 24 board that would review all the tests and sign-off on the 25 test before it ever came to our safety board. So it was ,Q ANN RILEY & ASSOCIATES, LTD. (,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

420 1 quite an elaborate deal. l ("T 2 There was a review by peer groups for each of Q 1 3 'those groups. In other words, we would either bring in an 4 outside peer group or somebody within the station would take 5 a look at those packages to ensure that they were ready to 1 6 be brought up to management and get reviewed. We were 7 pretty successful in getting most of the packages through, 8 but management being what it was, there was a lot of stuff l 9 that we wanted to see on top of what was presented. So many 10 times people were turned away, packages weren't good enough 11 yet, or issues were brought out to resolution, and so we 12 turned them back. They had to come back and represent. 13 Typical examples were some issues -- technical 14 issues dealing with inservice inspection, and Dave alluded () 15 to the cable separation issue with the free air separation. 16 That -- we went through quite a few renditions on how we 17 were going to resolve that problem. Ultimately, we 18 implemented a portion of IEEE, I believe it was 384. I have 19 got it in here somewhere, but -- 20 MR. STORZ: That solution, I felt threatened by. 21 You know, when you start poking around in cables in a 25 i 22 year old plant. But we -- I believe even Hub Miller and l 23 _some folks from the NRR came up, when we had worked out what l' 24. we thought the right solutions were, and walked the plant R25 down~ showing them what we -- you know, you try -- it is hard l ~% ANN RILEY & ASSOCIATES, LTD. Court Reporters s i 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

421 1 to describe something, what you are doing with cables on a () 2 piece of paper at a meeting. 3 So there was a lot of interchange on that, and we 4-quickly came to some solutions.that satisfied everybody, and 5-it was manageable, you know, it wasn't one of these i 6 debilitating discoveries just discouraged the hell out of l 7 us. Because this came kind.of late in the recovery process 8 when we discovered it. I could just see another big setback 9 and ugly decisions being made about -- l 10 DR. BARTON: How did you find this, how did you 1 11 stumble across it? How did you stumble across this problem? 12 MR. POWELL: I can talk to that. Originally, 13 there was inspection that was performed back around 1991 14-that brought out a question about.the free air space. Our ) ( 15 FSAR was not really specific as to what we were committed to 16, with respect to IEEE 279 and some other issues. 17~ So the question was raised, through one of the 18 inspectors that was down there resolving this specific i 19 technical issue -- this was one of the technical issues that 20 .needed to be resolved, brought it into question again, and { 21 to -- basically, said the licensing basis and design basis, 22 which hitherto didn't really exist for that free air space. '23' We went through the design process and then committed to an l 24-IEEE standard that allowed us to take credit for most of the 25-configurations that we already had within the plant. ANN RILEY & ASSOCIATES, LTD. s Court Reporters l 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l

422 1-There was some cabling that required us to go back /"'N 2 and actually shield as a result of this, but for the most O 3 part, we were able to invoke a newer IEEE standard that we 4 committed to for moving forward. 5 I think it was a very good find by the NRC 6 inspector and I think the follow-through by both Salem and 7 the NRC was pretty good in this case. Although, like Lou 8 said, it was nip and tuck there for a while. 9 As I indicated, after the packages were pretty l 10 much brought up and, you know, reviewed by the MRC, then 11 they were signed-off by the GM of operations, which at that 12 time was Dave, for the most part. Then the packages were 13 formulated and presented to the NRC, because they had to 14 review all the information, come back, verify everything r~s. I i 15 that we said was correct. So they had quite an elaborate %J 16 inspection team on site throughout most of this process. We 17 also had, obviously, the Salem Assessment Panel, which is 18 part of the Manual Chapter 350 process for plants that are 19 in the condition. And the board, I think, would review a 20 lot of this information and make judgments as to whether or 21 not specific packages could be closed out for purposes of 22 ultimately allowing the unit to restart. So it was quite -- 23 quite a process. 24 On top of all this, we had other oversight boards. i 25 Lou and Dave both alluded to some of them. We did implement O ANN RILEY & ASSOCIATES, LTD. (_,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 j (202) 842-0034 l l-

. ~ _ 423 1 the Nuclear Review Board concept. I don't believe it 2 existed before the new management team came on board. We 3 implemented that because most of had seen a process like 4 that. It would be -- it was made up of some very, very 5 senior outside individuals from outside of our company who 6 would review all of the activities that were ongoing at the 7 site at the time, as well as our own senior management who 8 would also participate as part of that board. 9 Lou alluded to the fact that there was an 1 10 individual who was also on that team who reported directly 11 to the board of directors, there actually was a board of 12 directors, and that individual was the liaison between the 13 Nuclear Committee of the board and our Nuclear Review Board. l 14 DR. POWERS: Had the Nuclear Committee of the 1 -,( ) 15 board of directors been involved prior to you people coming 16 in here, or was it -- was he new? 17 MR. STORZ: There had been a Nuclear Committee of 18 the board prior to our arrival. Leon created the Nuclear 11 9 Review Board on site when he arrived. That was part of his 20 beefing up the quality assessment process. But the Nuclear 21 Committee of the board had been in place I think for many 22 years. 23 DR. POWERS: So their oversight might not be 24 especially useful? ~25 DR. BARTON: Watch out. That was chaired by the t

1. /}

ANN RILEY & ASSOCIATES, LTD. s,f Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

) 424 1 former -- by the present Chairman of the Commission. 2 -[ Laughter.) 3 DR. POWERS: That, too, is telling. 4 CHAIRMAN SEALE: It sounds like there are a lot of 5 bodies around. 6 MR. GARCHOW: No comment. i 7 DR. POWERS: Yeah, you don't have to comment on 8' that.one. 9 DR. MILLER: Well, did the Nuclear Committee of l - 10 the. board change personnel during this period? 11 RMR. GARCHOW: Yes, they did. 12 MR. STORZ: Yes. 3. J13 MR. GARCHOW: Do you want to tell them'who the 14 ' board members were? () 15= MR. STORZ': Forrest Remmick -- Forrest Remmick was 16 added to the board, I think that is the specific big change. 17 The other members were previous board members. But one 18 board member.is the CEO of Foster Wheeler,-he knows a lot 19 .about -- he knows a lot about power production. And they 20 had a head of one of the electronics companies in New Jersey 21 is:on that board. So they are --

22 DR. MILLER:

These are actual all board members? 2' 3 - MR. GARCHOW: Yes.

24 MR.. STORZ:

Yes. The Nuclear Review Board had '25 four-off-site members and three or four, depending on what (" ANN RILEY & ASSOCIATES, LTD. 's,/ ' Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 4 Washington, D.C. 20036 (202) 842-0034 .n

425 1 organization chart we had at the time, in-house members. 2 ) For example, former Regional Administrators, a couple of 3 Regional Administrators on the Nuclear Review Committee. 4 MR. GARCHOW: Okay. Moving on, I can attest to 5 the fact that they were very involved because both Dave and 6 'myself, in addition to Lou, had to give presentations to 7 these individuals because they were very, very interested in 8 what was ongoing down at the site in terms of recovery l 9

process, 10 DR. MILLER:

Coming to~this group is fairly easy 11 then. 12 MR. GARCHOW: Yes, sir. 13 [ Laughter. ] l 14 MR. STORZ: Well, we will just say we have been -- [ ), 15 we have been trained. V 16 MR. GARCHOW: Yes. 17-MR. STORZ: To this point in the presentation. 1 l 18 MR. POWELL: And I would be remiss in not i 19 _ mentioning the involvement of Jim Ferlund himself. Jim -- 20 we found Jim down at the site routinely, on a weekly basis, 21 following the activities that were ongoing on a technical, 22 as well as a personal level at the site change-out, you 23 know, the material condition as Lou alluded to, but also the L 24 cultural aspects. Jim was behind us the whole way and a 25 definite force in a lot of what we did. G ANN RILEY & ASSOCIATES, LTD. f(s,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

426 1 To get into the communications aspects, as you ~h 2 would well expect, there was a lot of open communications, [O 3 and, again, I will allude to the fact that not just with the 4 NRC but other regulatory agencies. And we had frequent 5 public meetings with the NRC staff at the senior management 6 level. Okay. We held some of those down at the site. Some 7 of those were held up at Region I. 8 But that is not to -- you know, below the point 9 that the NRC, in terms of their communications, they were 10 communicating at all levels of the organization. They had 11 their inspectors in there, very intrusive into what was 12 going on in terms of the maintenance activities, in the 13 terms of the operations and training activities. So people 14 throughout the whole organization were communicating and (.y) 15 interacting with the inspectors to let them know what we _3 16 were doing, to get a full picture of everything we were 17 doing on site, 18 So I think -- I know when Mr. Miller would come 19 down, he was always out there talking to the personnel in 20 the field to get a gauge as to what he is hearing from us, 21 you know, the management and what people are actually saying 22 out there in the field. And we would have some open 23 dialogue as to what he perceived from those interactions, as l 24 well as his own staff and us. And I think we were pretty 25 happy to see that most of the time they were in sync. Where i [~)'\\ ANN RILEY & ASSOCIATES, LTD. (m Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l

. _.. _.- _ _ _. _._.. _ _. _ _. _ m 427 l .1 we saw ourselves and where the. people thought we were, and 1 ( 2 that kind of stuff, was what was being communicated at the 3 various levels. 4 MR. GARCHOW: During this period of time, during 5 the recovery, we had a very aggressive senior resident 6 inspector that Salem, that, obviously, as plant manager, I 7 dealt with nearly daily, ceveral times. 8 And I would be remiss in not saying that a piece 9 of the regulatory process I thought was effective, from my 10-point of view, was the involvement of the senior resident 11 inspector, in many different areas. A working relationship ) 12 such that we got to where we could go out together and go i 13 watch things, so.there was no filtering of information. If 14 something wasn't going right, I would call him up and say '() 15 let's go figure out what is going on, so he could get.it 1 16 firsthand, talk to his people. And we found that very, very 17 helpful, and it was a very high quality individual'that was 18 involved in that. 19 MR. POWELL: Here, you will see a couple of 20 presentations that, in particular, I want to bring -- point - 21 out, and that was because prior to each of these, we put out 22 white papers. In one case, prior to the presentation to the L 23-Commissioners, we put this out. It is on the docket. This l l 24' .is where we felt we were at the time. It is a listing, 5 basically, of all the various programmatic issues and some j 2 l ' (~' ANN RILEY & ASSOCIATES, LTD. ( Court Reporters 1 1025 Connecticut Avenue, NW, Suite 1014 ) l-Washington, D.C. 20036 l L (202) 842-0034

- - -. -. -. - - = =. -. 428 1 of the technical issues, where we thought we were, where we ) thought we needed to go still, and what was left on the 2 3 plate, prior to Lou and Jim Ferlund and Leon and Bert 4 Simpson going up there to discuss these issues'with the 5-Commissioners and various executive level managers at the 6 NRC. 7 I think they found that to be very helpful, so we 8 followed that up again with another presentation that Lou 9-alluded to here just recently, another white paper that we J i 10 put out that says, okay, we-have turned a corner,.we have .11 started the units up. It was a successful event-fee 12 start-up for both units. Where do we go from here? And I 13' think Lou talked a little bit about the directive style of 14 management and'we had to, you know, the type X management, ( is get people turned around to a more participatory type of 16 management style, getting people involved in some of the 17-process decision making and whatnot. So that is what that L 18 discusses. Those are the types of discussions that they had .19 at the second meeting where they talked to the EDO and 20 what-have-you. 21 In terms of problem resolution across the board, 22' r for the most part, issues were resolved at the technical 23 level. Daily interface with -- we had daily interface going 24 on with the on-site NRC inspection teams. = 25 There was a team member that was included as part

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Court Reporters 1025 Coanecticut Avenua, NW, Suite 1014 Washington, D.C. 20036 l (F.02 ) 842-0034 r F I- =. f

429 1 of the readiness assessment team inspections who came from / 2 V} the Bureau of Nuclear Engineering to, essentially, monitor 3 the whole process and ask questions about what was going on, 4 because throughout this whole process, the B&E, the New 5 Jersey B&E, as well as the Senators' staffs were very 6 interested as to what was going on, and they would have to 7 go back and talk to them. 8 We held -- monthly meetings were held on site with 9 the NRC to discuss issues and priorities to maximize both of 10 the resources. Obviously, the NRC has a lot of other sites 11 they have to look at, they can't focus-all of their 12 resources just on a plant that is going through the recovery 13 process. So we had meetings to discuss what we could make 14 available to them, what resources they basically had I 15 available to them to allow them to help us meet our V) 16 schedules. 17 There was good open communication and feedback as 18-to what the resource situations looked like in our house as 19 well as their house, and whether or not we could meet the 20 schedules that we had projected for start-up. 21 So these meetings, I would like to say these 22 meetings, in all cases that I was a part of, most of these, 23 'they were held professionally. There wasn't any real 24-bickering. There wasn't any real -- people getting upset or 25 anything like that. The feedback was insightful for both of ANN RILEY & ASSOCIATES, LTD. k(,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

430 l 1 us. If there was hard technical issues on the table, so i . (~'s 2 there was some technical disagreement, because we didn't (_) 3 always agree with -- the NRC would say you need to do it 4 this way, and we would say, no, we think we need to do it 5 this way. This ic our reason why, and then we would come up 6 with some of that -- had discussions. 1 7 I don't feol that we had.any non-threatening -- or l 8 any threatening type of activity, everything was fairly l 9 non-threatening, again, open. And there was a willingness 10' to listen and learn, basically, on both sides of the house. 11 Okay. When you get into these situations, it doesn't help, l, 12 you know,.not listening, so you have got to understand where i 13 all parties are coming from, i 14 Some of the major accomplishments, Dave already ) 15 alluded to, so I won't talk too much on these. But Generic f 16 Letter 96-06 came out at a time when we were just preparing 17 to start up Unit 2. We had a tech spec change request in at 18-that time that affected the containment fan coil unit. 19 Unfortunately, when that came out, because this touched on a 20 design basis requirement for the system, the NRC couldn't 21 issue a no significant hazards on that. 22 We wound up having to technically resolve this 23. issue prior to our restart and that is what we did. We L 24 spent quite a bit of engineering time and whatnot to put in l-25 an accumulator keep-filled system for this on both systems. I (^'s ANN RILEY & ASSOCIATES, LTD. ' 'xj Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 4 l Washington, D.C. 20036 (202) 842-0034 r

431 1 We put in a whole new series of tech specs for the system, 2 .for that portion of the systems that we installed in there 3 prior to restart. And we are happy to say, at least at our 4 site right now, this -- this industry issue right now is 5 closed out. 6 Design licensing basis reconstitution effort. I 7 have got to talk on this one because we recognized back when 8 the letters first were issued to Millstone concerning their 9 licensing basis, design basis, that this was an activity 10 that we would have to go through. The process had already 11 been started, as Dave alluded to, with the system 12 walk-downs, looking at the system configuration and whatnot. 13 What hadn't been done was a review-of the Chapter 14' 15 analysis and match all that information with what we had () 15 out in the field, and a FSAR validation project to go back 16 and look at what was out in the field in operations. So we 17 started that process about four or five months prior the 10 18 CFR 50.54 (f) letter coming out explaining where the 19 utilities had to come back and explain how they were going 20-to operate their systems inside their licensing and design 21 basis. 22 Because of all the activities we did, which 23 included operations reviews, vertical slices, a complete 24 reanalysis, basically, of our Chapter 15 FSAR work, and then 25 some additional work to validate our FSAR, at the time we O/ ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 t-

432 1 had the response to that letter, it was fairly easy for us (T 2 to do that. And, in fact, we presented all of our y/ 3 information to the staff at another open meeting down here. 4 And I think we had a letter later on that indicated the 5 staff agreed that we had provided reasonable -- what is the 6 word, Dave? Reasonable assurance here that we would be 7 continuing to operate. 8 DR. WALLIS: How much effort was this UFSAR 9 project? I mean how many man-years of effort? 10 MR. POWELL: Boy, -- 11 DR. NALLIS: Just a rough idea. I am just trying 12 to see -- 13 MR. GARCHOW: I would say between 15 and 20. 14 DR. WALLIS: It was a major -- a major project. (A) 15 MR. GARCHOW: We had a team of about 20 -- 25 s/ m 16 people on-site and some off-site people working, and some -- 17 and it sort of melded the system readiness. So it was -- we 18 took advantage of numerous things we had going on, and then 19 just had a framework of linking those all together to make 20 the reasonable assurance argument. 21 MR. STORZ: We were in much better shape than most 22 people that got that thing cold, because we had already had 23 a lot of the stuff started. And so it was organizing it 24 properly to meet the intent of the letter. 25 MR. POWELL: And there was just (T ANN RILEY & ASSOCIATES, LTD. (_,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

r 433 1 DR. BARTON: Have you completed that work now, 2 Lou? 3 MR. STORZ: Yes. 4 DR. BARTON: FSAR update and certification, that 5 is still going? 6. MR. GARCHOW: When we submitted our 50.54 (f) 7 response for both Salem and Hope Creek we had a series of 8-ongoing issues that we agreed to do out over the next couple 9 of years. 10 DI.. MWTON: Okay. 11 MR. STORZ: We are auditing and monitoring it on a 12 regular basis, and my understanding is it has been on 13 schedule. 14 MR. POWELL: Okay. Before I turn it over to Lou, .( ) 15 I just wanted to say that the.last thing is that Lou is 16 going to summarize everything that basically we.did and '17-where we are headed. But we had one common goal, and the 18 goal was to' complete all the activities that were needed to ,19 assure-safe and reliable and eventless operation and 20 start-up of the units, which we did. So I will turn it back 21 over to Lou now, if there's no further questions. 22 DR. BARTON: I think you still need to cover high 23 points. I'mean you are only holding up our lunch now, we L24 really don't need it anyhow. 25 MR. STORZ: All right. First off, I have a couple '(_h (~ ANN RILEY & ASSOCIATES, LTD. / Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 . ashington, D.C. 20036 W (202) 842-0034 L

434 1 of slides that highlight some of the points on why we think l (/"N 2 we are being successful. This plan we developed, as I ) 3 mentioned earlier, was prepared our PSE&G employees, there 4-was no. contractors involved in it, and I think it has 5 created a commitment and an ownership. 6 We have retained most of these experts that we 7 hired from the outside. Very few have left. We believe 8 they are in it for the haul now, to finish the job. 9 The recovery process put control of the facility 10 back in the hands of the SROs. We have an operations led 11 department. We have a very simple operating philosophy that -12 says keep the plant in the design basis green band, and we 13 call it the sweet spot. That means automatic operations, 14 "all equipment available, a high availability of all the () 15 safety equipment, and maintain our training. 16 And the test program fixed many longstanding 17. -problems. We are-in a shakedown run now, these two units, 18 in their first operating cycles after return to service. We 19 find that there are still some equipment issues that we have 20 to' deal with. The radiation monitors are on the top of our 21 list. One unit is performing better than the other, it has l 22 got newer equipment. We have got some steam leaks and 23 fiange leaks, and a-fewer minor equipment -- mechanical l 24 equipment problems. We have found some problems with our 25 strainers during the operations. So we have been able to l /^ l ANN RILEY & ASSOCIATES, LTD. (,,3 l Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 L l Washington, D.C. 20036 I _(202) 842-0034 I i I

m. _. .i 435 i l 1 handle those online, and we have had good performance. 1 2 We have devel'oped this conservative operating 3 . philosophy, we will shut the plants down. The organization i L l 4 now finds'that if you find and fix the problems, you will 5 get good performance. They believe it. 6-And I think our best case is the safety valves. 7 We had some weak safety valve design, and when the plant 8 heated up, there were stresses put on the body of this small 9 valve, and it. caused'it to begin to leak, and over a period 10 -of. time that leak grew. 11 We had some similar valves-in the warehouse and we 12 changed those out. In the meantime we got busy and bought 13_ .what we' called the beefed-up valves. We installed those 14. this past summer. That was an operating issue that we () 15 ~ ' discovered after we put Unit 2 online. Unit 1 does not. 16 appear to have the stress-loading on its safety valve pipe. 17 They haven't leaked, but we are going to put new valves.on 18 that plant when we shut it down for refueling. 19 So this business of rigor and ownership has helped 20 us create some of these successes. And the affirmation 21-process, we continue to use that on start-ups in a similar '22 . fashion that we have used during the recovery. 23 We believe we have a very effective 24' self-assessment program beginning. Quality now monitors, '25 they'are not bringing in all the hang-dogs. The / t L l l gN ANN RILEY & ASSOCIATES, LTD. d s Court Reporters l 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

o 436 l' 1 organization is looking at itself. The maintenance L 2 department, engineer department, operations department and 3 our training department self-assessments are finding most of 4 our problems. We monitor that with performance indicators. 5 We have maintained and continue to maintain a 6 proactive relationship with the NRC. We meet with them L 7' regularly. They attend all our meetings. We recently have L 8 'a small, barely detectable leak on one of the steam l 9-generators in Unit 2. We saddled up our team, dug out all 10 the details we had from a very extensive inspection that we 11 had done during the recovery process, and went up and i 12 re-reviewed that with Hub Miller. I think they appreciated i 13 the_ update. We are at like two gallons a day, that is -- 60 _14 _ gallons a day is where you are supposed to elevate your-m() 15 management attention, but-we believe that steam generator l 16-issue are a very important issue, and we had shared that 17 with them. L 18 We have had eventless start-ups. Let's go to the 19 next slide. Of both units, and we have had restarts of Unit 20 2 since the beginning and those were all eventless. We have 21 also restarted the Hope Creek plant two times in refueling 22 outages, eventlessly. So we believe we have learned how to 23 operate the plant, and we think we are reinstilled in the i 24' operators that taking the time to do the job right is the 25 way to operate. And we operate the plant in automatic. ['\\ ANN RILEY & ASSOCIATES, LTD. I Court Reporters 4 1025. Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

=- 437 1 The NRC has lifted the CAL and we have a very I Q)) /' 2 successful graded exercise this past calendar year, and also 3 an ingestion pathway drill that included more than 200 4 federal, state and local agency personnel and was considered 5 a big success. We have had an OSRE evaluation that was ] 6 considered excellent. Ultimately, we were taken off the j l 7 troubled plant list. 8 We have improved our performance at Hope Creek and 9 we were given an improving in all category SALP report with 10 a 1 in services and 2's in the other areas. Salem received 11 a SALP report of two l's, operations and services, and 2's 12 in the other areas, and also -- but Hub clarified the one in 13 operations as a team 1 for the recovery period and the 14 start-up and the eventless operation. So he cautioned us r E(x 15 about human performance issues that we are still working on. o '16 INPO reaccreiited our training programs as a 1 i 17 . site program and all of our maintenance engineering and 18 other training programs have been accredited as 1 site 19 program. And during this past calendar year, in October, we I-20 had no lost time accidents for the first time at all three 21 units. And, as we have mentioned, we have successful i L 22 start-ups. l 23 We believe that behavioral change is still our i 24 biggest challenge and we now have to learn how to do shorter 25 outages, maintain the gains that we have made, not get t l/~N ANN RILEY & ASSOCIATES, LTD. \\m,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 l L (202) 842-0034 L

438 1 1 complacent, and continue to convert more and more of the (~] 2 employees to these winning behaviors. We believe that if 'N_/ 3 ycu get safety, that will beget reliability, which begets 4 cost reductions, and we are in the phase now where we think 5 we are beginning to establish clearer reliability. We have 6 passed the safety phase when we restarted the units. So we 7 are working on reliability and then we are going to begin to 8 working on, next year, of having shorter, more efficient 9 refueling outages and working on bringing our costs down. 10 Now, we are not going to do this at the expense of 11 keeping our high standards. We are not going to do this at 12 the expense of having effective training. And we are 13 clearly grooming these, what I call now, seasoned 14 professionals that helped us restart these units as our new (~hi 15 leaders. -'V 16 And with that, we will take some questions. 17 DR. BARTON: I notice in your recent SALP, the NRC 18 did comment on human performance. I think human performance 19 is going to be an issue that we deal with the rest of our 20 lives and continue to reduce the number of errors and 21 improve human performance. But the other area, which is 22 kind of interesting, was the hit on large maintenance 23 backlog and corrective and preventive maintenance, and also 24 in engineering. 25 1 understand the one in engineering by what you (~'N ANN RILEY & ASSOCIATES, LTD. (,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

439 1 have been going through. Now, you identified a lot of ' (~') 2 problems during the shutdown which added to your backlog. %) 3 But I assume that the new work process system that you are working on, work control process system that you are trying 4 5 to improve, et cetera, and you are into this, I assume 6 maintenance, online maintenance, 13 week schedule, et 7 cetera, et cetera, when you are in that mode, what are your 8 plans to kind of reduce a large backlog? Because you are 9 into windows, you can only fit so much work in the window, 10 because you usually have -- generally have a safety system 11 involved in that window. How are you going to get your 12 backlog down? 13 MR. STORZ: First off, for us to receive our 14 restart of Unit 1, we had to sift through the backlogs and 15 assure ourselves and the NRC that there wasn't any kind of 16 cumulative or collective significance to the backlog. And 17 also we had to, at that time, commit to a backlog reduction 18 plan,-which we submitted. 19 And to give you a little background on that, we 20 had a fairly large backlog at Hope Creek as a result of the 21 same kind of intrusive walk-downs and investigations that we 22 were doing on Salem. Two cycles ago, that backlog was at 23 about 2800 items. Today it is about 450. So it has taken 24 us about two cycles to get the -- what I call the power 25 block, critical backlog numbers down to less than 500. . {) s ANN RILEY & ASSOCIATES, LTD. Court Reporters s,_ 1025 Connecticut Avenue, NW, Suite 1014 h Washington, D.C. 20036 (202) 842-0034 L i_ _j

440-1 DR. BARTON: Why is that. considered a large /g 2 backlog in your.SALP? '\\d 3 MR. STORZ: Well, I am going to get'to the Salem 4L piece. 5 DR. BARTON: Okay. 6' MR. STORZ: -I am trying to give you some 7 - . background. 81 DR. BARTON: Oh, this is Hope' Creek you are taking 9 about. 10 MR. STORZ: Hope Creek. 11. DR. BARTON: Okay. I understand. '12 MR. STORZ: Hope Creek led the transition to the 13-new 13 week cycle. 14 DR. BARTON: Okay.

15; MR. STORZ

When we started at Hope Creek, the t .16 maintenanceLdepartment there could. kick out about 350 [- '17 activities a week. Today, with a much more reduced work 1EL force, less contractors, many of the people reassigned to 19 other activities like planning and outage preparations, we 2 01 are'getting about 750 activities a week due to improved 21 planning and working in a higher quality maintenance so we 22 'get-the job done right the first time. ~23 DR. BARTON: Do you have a thinner first team kind l '24 Jof concept on Hope Creek? lL 25 MR. STORZ: Right. l i ("% ANN RILEY & ASSOCIATES, LTD. s Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034-

l 441 1 DR. BARTON: Okay. jT 2 ~ MR. STORZ: We have all those -- we have all the V 3 attributes of the new processes. So we have learned over at 4 ' Hope. Creek, the units have run tremendous over there. We 5 are on a continuous run from the refueling outage, we came 6 out.of December 1st last year. 7 At Salem Unit 2, the unit the quality of the 8 work on Unit 2,.because it was the lead unit, has not been 9 as strong as the quality of the work on our Unit 1. We were 10 training the maintenance department, fundamentally, after 11 the intervention on Unit 2, and their skills were 12 significantly improved when we got'to Unit 1. So the Unit 2 13 backlog and the emergent work on Unit 2 has been_ higher than 14 Unit 1. g"~% I 15 We now thing we have got that stabilized. Its %/ 16 backlog -- or the backlog of both Salem units last January I 17 was about 25,000 items. In March,-when we.put. Unit 1 !~ 18 online,' it was 20,000, and today it is about 10,000. So we-19 have reduced the backlog since May by about 10,000 items. 20 DR. BARTON: Still a significant number of 21 man-hours. 22 MR. STORZ: So we have about 2500, what I would 23 call power block items on each. That is the total backlog 24 number I gave you. We have about 2500 items in the power L 25 block items on both Unit 2 and Unit 1. But the good news is O ANN RILEY & ASSOCIATES, LTD. \\_/ Court Reporters L 1025 Connecticut Avenue, NW, Suite 1014 L Washington, D.C. 20036 ~ i (202) 842-0034

442 1 the productivity of the Salem maintenance department is (~l 2 mirroring what happened over at Hope Creek, as they learn %,) 3 how to use the 13 week outa.fe, online outage maintenance 4 cycle. And we have been very successful, we are meeting our 5 goals that we have established for this year. 6 We think, as it did with Hope Creek, it is going 7 to take a couple of cycles to get it down to what we would 8 call the top quartile backlog level, which is somewhere 9 between 150 and 250. So Hope Creek, the goal was to be at 10 less than 500 by the end of the year. It looks like we are 11 going to be less than 400, which is ahead of the goal, and 12 approaching top quartile level. 13 So that is our plan. We have told, in recent 14 communications with the NRC, we think it is going to take (p; 15 two cycles per unit. First off, we are shaking down those a 16 units that hadn't been run for three years to find other 17 things that need to be fixed, that you don't find when it is 18 in cold iron, 19 And, for example, the PM backlog, delayed or late 20 -- why we were, I don't know, five or 600 items, and that is 21 zero at Hope Creek right now and about four or five per 22 unit. So we have got the PM program now caught up with the 23 13 week cycle. 24 And to give you just a little background on that, 25 the first cycle, the first quarter, the first 13 week (~} ANN RILEY & ASSOCIATES, LTD. (,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

443 1-schedule, we just did PMs, very little corrective. Then we (N 2 started loading in correctives to see how we would do. And \\,,] 3 then we started measuring at week five how much stuff { 4 actually got done.at week one, and now we are measuring what 5 is going in at week 13 and how much is getting done. We 6 have got that all tracking. 7 And so we have trained -- we have to train the -- 8 this is a behavioral transformation. It used to be pile 9 management, bring it down to the shop, I will decide what is i 10 going to be worked on. Well, we went to central planning 11 for the whole site. There was a lot of resistance to that. 12 We are taking turf away from -- I want to work on what I 13 want to work on today, and the shift supervisor in the 14 control room is saying this is what I want you to work on [v) 15 today, my favorite pet projects -- to here is what the 16 organization is going to work on today. 17 DR. BARTON: That is a big change. 18 MR. STORZ: That is a big change. 19 MR. GARCHOW: In the engineering area, real quick, 20 we had about 5,000 total corrective action and other 21 miscellaneous activities in our system, mostly owned by 22 design engineering, so I can speak to that. We have reduced 23 that in half since March, so we are down to now, in design 24 engineering, less than 1500 corrective actions in our 25 organization and going down. /~N ANN RILEY & ASSOCIATES, LTD. (_,) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l l

444

1 During this time there was another piece of

~ 2 backlog not mentioned in the SALP report, because it wasn't 3 in our corrective action program. But this year design 4 engineering has closed out 2400 historical DCPs, up through '5 and including updating over 14,000 drawings. Our goal for j 6 . engineering this year was to start the '99 outage system 7 .with the paper plant equalling the installed plant as a 8 result of all these changes that we did during the outage, 9 and.we have had a big focus in engineering to make that lio happen, and we are being and will be successful with that. 11 DR. BARTON: Since you are up and running, system 12 engineers more able to do a system engineer true role now? 13 MR. GARCHOW: We did a change in engineering last 14 December and created a maintenance engineering organization [ )- 15 and put maintenance engineers in maintenance to handle the T %s 16 equals zero work week emergent problems. And our system 17 engineers have put together system help reports now for all 18 the critical systems in the maintenance rules, so now we 19 have a management. tool.to focus our work. 20 DR. BARTON: It sounds like you are going in the 21 right direction there. Thank you. 22 MR. STORZ: I would like to come back to Mr. 4 23 Powers' question about how do we assign priority and safety 24 significance to our corrective action program. Dave, do you 25 want to take a slice of that? Or maybe we should get an p ANN RILEY & ASSOCIATES, LTD. (_f Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 . Washington, D.C. 20036 (202) 842-0034

445 1 amplification from Mr. Powers on what he is looking for , (~)N 2 there. i ('~ 3 MR. GARCHOW: Every input gets reviewed every 4 morning by a cross-discipline team of maintenance 5 engineering and operations in our work management center, so 6 we have SRO level input to say is this something we really 7 need to, you know, mount -- as Lou says, mount the posse on 8 right now, or are we able to schedule this out? Or do we 9 want to do a formal root cause? 10 That recommendation then gets discussed at our 11 9:00 central management meeting with the plant managers and 12 the operations managers, and the collective team, at that 13 inner table.that I was talking about, has the ability to 14 say, yes, I want a full root cause on this or I want -- and ( 15 I want it reviewed by our Corrective Action Review Board. 16 We have a Management Review Board for our corrective action 17 program, like many utilities have. This is that process of 18 reviewing these issues every day at 9:00 until we get a 19 collective understanding of these significance level. 20 MR. STORZ: Some plants have developed a process 21 in the morning where they will plug in any issues that have 22 come up, test failures, equipment, developing issues, and 23 they get a safety read-out on the plant. 24 Now, we are doing that, but not -- it is not 25 online like maybe like South Texas project, if you are (~^3 ANN RILEY & ASSOCIATES, LTD. l(,,/ Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

446 1-familiar with theirs, or San Onofre. /~ 2 DR. BARTON: San Onofre. 3 MR. STORZ: San Onofre has got a distinct L 4 advantage. They have got Dr. Chew on their staff, all l .5-right. So they are pushing very hard to get that as the way l -6 to do business And, of course, if you have got a Dr. Chew l .7 on your staff, I. guess you could probably get that L 8 . implemented. We are robbing and stealing as fast as we can l. 9 to get our system working that well. 1^ 10 I think it will be a great assist, but I think we l 11 can operate our plants very successfully without that 12' ' device, to be quite honest about it. 13 DR. BARTON: I hope so. l 14 MR. STORZ: I think it is a little bit ' Q) 15 over-sophisticated, for example, for an equipment operator g l 16 or a reactor operator. If he runs his plant in automatic, 17-

and doesn't violate his procedures, and maintains his plant

( 18 in accordance with his tech specs, I feel fully confident we 19 can run these plants safely. So I think it is a great idea, 20 it'shows you how close you may be coming to some of your i ( 21 limits. But as a tool only. l-22 Now, we have got these other, what I call tested 23 tools that are in-place that I think are getting the job 24 done. And it is about people. If people use the things we 25 give them, and management holds them accountable to those /~'\\ ANN RILEY & ASSOCIATES, LTD. k-Court Reporters s 1025 Connecticut Avenue, NW, Suite 1014 i Washington, D.C. 20036 I l~ (202) 842-0034 o -. -. =

447 li things, I think we have got some very solid' principles '2 -in-place, and'have'had for several years. So I am -- I am 3 somewhat from the old school that before we had all the 4 help, we had responsible people running these plants. We 5 had the same kind of results with I think.our simple tech 6 specs and our test program. 7. DR. BARTON: Any other questions for the -- 8 DR. WALLIS: Well, I found your presentation b 9 impressive, fascinating. I notice there are some NRC people 10 here, and I would like to have some perspective on this 11 example. Is this something exceptional where a plant has to 12 spend two years of struggle to get itself in shape? Are 13 there other plants like this? 14 DR. POWERS: I would say this is particularly ' A 15 fast. g -16 'DR. WALLIS: How does this put it in some' sort of 17 perspective? How does this put it.in the perspective'of the l; 18 state of plants across the country? 19 MR. LINVILLE: I am Jim Linville, the Projects 20 Branch Chief in Region I who is responsible for the 21 oversight of the inspection activities at the Salem 22 -facility. I was also Chairman of the Salem Assessment Panel 23 which was mentioned. And I have done this a number of 24 previous times, and there have been a number of these in I 25 Region I over the years. I was the Senior Resident at Salem ANN RILEY & ASSOCIATES, LTD. \\ Court Reporters 4 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

.~ 448 1 after the ATWS in 1983 and, in fact, that is when that /~N 2 Nuclear Oversight Committee of the board was formed, after V 3 that, after the ATWS event in '83. 1 4-I also was involved in the recovery of Peach 5 Bottom in the '80s and had oversight responsibility for 6 Calvert Cliffs and Nine Mile Point when they were on the. 7 problem plant list. And I have to say I started up the 8 Salem Assessment Panel in late '95, early '96,.and then I 9-was off of it for a while and came back as the Chairman for 10 the last year or so of it. And this is the best recovery 11 effort I have seen. 12 It was the longest probably, but the others were 13' at least two years at Peach Bottom, for example, so it has '14 not been unheard of. But this was very well -- a very well ()' 15 managed effort. And the plants, the operation of the plants 16 and the performance of the utility staff since the plants 17 have restarted has demonstrated how successful this effort 18 has been. 19 DR. MILLER: Has this effort had maybe more -20 concentration on the people aspect than some of the previous 21 ones? 22 MR. LINVILLE: No, not really. The recovery at 23 Peach Bottom was focused much more on the people than the 24. one -- 25 DR. WALLIS: Can we go back to how this plant got i l /~% ANN RILEY & ASSOCIATES, LTD. . -(_) Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 l

449 1 into this state in the first place, and is this a common 2 thing with nuclear plants, that they get into a state where 3-they have to be recovered? 4 MR. LINVILLE: Well, you have heard them mention 5 that complacency is their worst enemy and I think most of 6' the plants I have been associated with that have gone 7 through this process'have gotten into that situation by 8 .being very good performers up to some point in time, and 9 then standing still as the rest of the world passed them by, 10 and falling off the cliff, if you will. 11 I guess in this case we probably could have been a 12 bit more proactive. We were certainly criticized for having 13-four AITs and in four years and not bringing down the hammer 14 perhaps sooner. But it'has happened at many plants in the 15 industry. 16 DR. BARTON: Any other questions or comments? 17 [No response.] 18-DR. BARTON: If not, I want to thank you all for 19 coming down. We know the pain and suffering we have been '20 through the last couple of years and it looks like you are 21 on the right path for a good improvement. And we wish luck 22 and continued success at the Salem-Hope Creek facility. 23-Mr. Chairman. 24 CHAIRMAN SEALE: Well, I would just like to say we g also appreciate that continued improvement is more than just 25 (~'). ANN RILEY & ASSOCIATES, LTD. .(f Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034

450 1 a matter of luck..And we encourage you to push it. I am -/~~% 2 glad to hear that your key people on your team don't have U 3 their bags packed, at least I hope that is the case, because 4 it is a people problem. And apparently you have the 5 standards and working relationship that should transition 6 well,.at least we hope so. 7 I would also like to say that this is a 8 presentation that I think-reaffirms the commitment that this 9 committee has to taking the opportunity to learn from'your 10 . experiences, whatever the utility may be, when there have 11 been successful recovery activities. I feel that I 12 understand the problems a lot more and I am sure my 13 colleagues do, too, as a result of the very detailed and 14 good presentation you gave to us. ,/ 15 I want to thank you very much. We wish, again, we \\_/- 16 .wish you luck, but we realize that is not really what is 17 involved so much as your efforts and all. So thank you very 18 much. 19 MR. STORZ: Thank you. 20 CHAIRMAN SEALE: I thank the staff, too. 21 .I believe we can dispense with the recorded 22 transcript for the rest of the day. We will take an hour, 23 until 1:00, for lunch. 24 (Whereupon, at 12:06 p.m, the recorded portion of 25 the meeting was concluded.] I I '(r~' ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 l Washington, D.C. 20036 (202) 842-0034

REPORTER'S CERTIFICATE-I l

(~T This is to certify that the attached proceedings

\\_,) before the United States Nuclear Regulatory Commission in ~ the matter of: f NAME.OF PROCEEDING: MEETING: 457TH ADVISORY COMMITTEE ON REACTOR SAFEGUARDS (ACRS) l ' DOCKET NUMBER: i-PLACE OF PROCEEDING: Rockville, MD [ were held as-herein appears, and that this is the original u transcript thereof for the file of the United States Nuclear Regulatory Commission taken by me and thereafter reduced to typewriting'by me or under the direction of the court ' reporting company, and that the transcript is a true and accurate record of the foregoing proceedings. CA (0 t E V y Jon Hundley Official Reporter Ann Riley & Associates, Ltd. l' t d. -. ~. -

O O O ,#""""yo,, GRADED QUALITY ASSURANCE a ? . DRAFT INSPECTION PROCEDURE e %,*+***f i l [ Presentation to i the Advisory Committee on Reactor Safeguards l t i November 6,1998 i See-Meng Wong, NRR l Larry L. Campbell, NRR j Juan D. Peralta, NRR l t l

o o o !'[ t k i I I BACKGROUND AND OVERALL OBJECTIVES l PRA Implementation Plan f Graded QA volunteer effort i NRC approval of graded QA program i at South Texas (SECY-97-229? I r inspection procedure development i i i 2 l t

r O O O i t PROCEDURE OBJECTIVES Evaluate licensee methodologies used to: j identify relative safety significance of SSCs j verify application of graded QA controls l Guidance for two types of inspections ? basel.ine programmat.ic inspect. ion j targeted reactive inspection i l I i 3 i t i l

O O O i i INSPECTION PREPARATION 4 Review licensee commitments for graded QA = l l Pre-inspection documentation review j i i Graded QA program implementation j i procedures for categorization procedures for assigning graded QA controls procedures for expert panel procedures for periodic assessments i I 4 t i l

O O O i i I INSPECTION PREPARATION PRA application

1. Selection and evaluation of SSC categorizations l

listing of SSCs in safety-significance i categories ranking of LSS SSCs SSCs and plant design modifications not in updated PRA model SSC vs equipment function matrix l 5 i j

O O O INSPECTION PREPARATION (Continued)

2. Safety-significance categorization use of PRA methodology in graded QA program PRA updating process scope, level of detail, and quality of PRA expert panel deliberations 6

O O O SITE INSPECTION Graded QA program implementation program and procedures for categorization of SSCs program and procedures for grading QA controls training for personnel performing graded QA activities i

l t SITE INSPECTION (Continued) Selection and evaluation of SSC categorizations High, medium, or low safety-significant categories safety-related LSS and nonsafety-related HSS 1:and/or MSS? SSCs sample of about 5 SSC evaluations; larger or smaller sample size depends on QA activities, j complexity, and available time SSCs just below criterion threshold for HSS 1:or MSSD designation j 1 8 i l

O O O SITE INSPECTION (Continued) Safety significance categorization risk ranking methodology based on PRA importance measures (e.g., RAW, RRW, etc.D expert Panel considerations consideration of all operating modes and initiating events 9 l

SITE INSPECTION (continued) Selection and evaluation of graded QA controls select SSCs that have had graded QA controls applied review documentation for determining QA controls augmented QA controls for non-SR SSCs categorized as HSS graded QA vs changes to technical requirements 10

O O O L EVALUATION OF CORRECTIVE ACTION AND l OPERATIONAL FEEDBACK l i Licensee's process for adjusting graded QA program based on plant and industry experience i 1 identification of failures or adverse l performance degradation l adjustments to deficient QA controls ~ independent review of apparent and root-cause evaluations l 11 f

t O O O ~ EVALUATION OF CORRECTIVE ACTION AND OPERATIONAL FEEDBACK (Continued) Review periodic graded QA feedback process l industry and plant operating expenence l plant modifications and SSC replacements reliability and availability monitoring at the system or component level i f 12 i [

1 O O O I i P t t v { t REACTIVE INSPECTION REQUIREMENTS t t Initial evaluation of failed SSCs t f i i Assessment of failed SSCs I i f ~ i i l f i t f 13 t i l - - ?

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v\\ I I As we develop, we will take the final step to perfecting the behaviors by fostering individual accountability and ownership. (The learning model described above is i illustrated in the icon below.) GOAL Opig i i Recovery Today Future i l Participative Transitioning Management Style To help us move fonvard with the learning process, we are integrating our various human resources strategies into a single action plan. The action plan is being coordinated by a member of the senior management team and facilitated by our human resources department. Some of the activities underway include organization streamlining, defining staffing needs, evaluating performance, and better utilization of rewards and recognition. l l 16

= O O O in: 0 - Tureezunits oe#M, ~ w. A pgggq@q <1di]$f~~R"~~:~ ~ The Energy Paaple j 3 i} PUBLIC SERVICE ELECTRIC AND GAS xj SALEM NUCLEAR GENERATING i; STATION UNITS 1 AND 2 s .I 5:

. Meeting of the Advisory Committee on a,j Reactor Safeguards 4

i ]E Rockville, Maryland ii November 6,1998 s i 1 iL

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O O O 3 li. .t OPEN NG COMMENTS ,1g b ii L. F. STORZ =

Senior Vice President - Nuclear Operations s

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Background

wi Both Salem Units Are Westinghouse 4 Loop PWRs j Located In Salem County N.J. l Licensed To Operate at 3334MWt Full Operating Licenses Granted In j l 4/6/77 and 5/19/81 4 w___ _ _ _ _ _. _ _. .________._________-.________.-__.-__._______s__-_.m__..__s.__._._-____________-.m..m.____-______-Am.__ __._______.m._-_. m-._m_____.____________._____s_--_.____ _--.m..__

l 'O O O h'l re i IntrOdHCt10H l 2::i UINI!Ill WE WILL PROVIDE A BRIEF

SUMMARY

OF: 4 l Why the Salem Units Shutdown What The Root Causes Were l What The PSE&G Management Recovery Actions Were - Restart Action Plan j I 3 5 4 ) i i

~ o o o Mkd Management Changes 2s rse : ,I Need For a Change g CEO Recognized Need For Change Hired New CNO CNO Hired New Management With Proven Skills Shut Down The Units Until They Could Be ~ Operated Safely And Reliably 6 vW v M % wM-1peare m ew T 15- + N + + Te-n 'e see C+ g*

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l 0 O O NIk Root Cause J.. si:: Determination of Root Cause(s) 2::s l en i l ROOT CAUSE(S) FALL WITHIN 3 l MAJOR AREAS 6 i l -Ineffective Corrective Action Program - Plant Material Condition l - Human Performance And Cultural Issues 1 i i 7 4 L

'O O O ~ t Mk Management Changes 2:s rec : l I Need For a Change g The Salem Restart Action Plan l - 9 Specific Plans Developed to Address l Human Performance, Self Assessment, j Corrective Action, Operations, System & l Equipment Reliability, Maintenance, Work l Control, Engineering, And Training ~ l t l l 8 l ~

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O O O Nk Recovery Process s rc : i Why Were We Successful g Developed & Implemented a Comprehensive Plan Establisled Operations Lead Organization Drove Accountability To Lowest Levels Validated System Reaciness by Affirmation & Testing Effective Quality Self-Assessment and Monitoring Proactive Communications Wit: 1NRC 21 g -r y --gammer y

i o o o Mfk Recent NBU Success l 2:s j ac : l 7 ggg Summary i l l Eventless Startup of Both Salem Lnits NRC Lifts Salem CAL i I Successful Graded Emergency Exercise Successful Ingestion Pathway Exercise Security Operational Safeguard Review Evaluation Salem Taken Off the NRC Watch List 22

3 o o o Nd Recent NBU Success s rs= : m ygg-Summary 3 ~ _ _ _ } .~. .,e ~ A w s -1 Hope Creek SALP Evaluation i Salem SALP Evaluation l INPO Re-Accredits Operator Training l One Year Without a Lost-Time l Accident j Successful Eventless 3 Unit Operations 23 i ~

O O O I h\\ k' s is Charting the Future Alm i i l Continue to Change Peopl'es Behaviors j - To Improve People Performance l Continue To Ground The Organization 1 Fundamentals l - High Standards of Performance j - Effective Training - Effective Leadership 9 24 , -. - - -. _ - -.... - - _...}}