ML20199L342
| ML20199L342 | |
| Person / Time | |
|---|---|
| Issue date: | 05/14/1986 |
| From: | NRC COMMISSION (OCM) |
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| Shared Package | |
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| NUDOCS 8607090378 | |
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NUCLEAR REGULATORY COMMISSION BACKFIT WORKSliOP WITH INDUSTRY Trdnscript of the proceedings convened May 14, 1986, at 9:30 o' clock, a.m.,
at the Omni International Hotel, Atlanta, Georgia.
.i.
VOLUME I OF TWO VOLUMES 9
NEWBERRY & COMPANY General Court Reporters 2727 Eaton Place i
Atlanta, Georgia 3O341 Phone (404) 524-O618 8607090378 860630 PDR MISC 8607090361 PDR
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ESE1EEEE 2
SUBJECT SPEAKER PAGE 3
Introduction Mr. Grace 3
4 Utility backfit perspective Mr. Mcdonald 11 5
The Backfit Rule Mr. Sniezek 21 6
Implementation of backfits Mr. Cox 53 7
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10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NGWBGRRY& COMPANY
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1 EESSEEE1EEE 2
MR. GRACE:
3 Good morning and welcome to Atlanta.
I'm Nelson 4
Grace, the Regional Administrator in Region Two.
5 We are pleased to play host to this important meeting.
6 I'm pleased to see such a good turnout this morning.
7 The purpose of this workshop, as you know, is to pro-a mote a general understanding of recent NRC regulations e
pertaining to backfitting and the procedures associated to with implementing these regulations, especially as re-ij lated to plant-specific backfitting.
12 We in the NRC have worked for the past several 13 years to put in place some important institutional 14 changes designed to better manage the way we impose new 15 or changed requirements, which has, admittedly, not al-16 ways been managed well in the past.
Today, we will 17 discuss both the backfit rule and our procedures for 18 implementing that rule.
is We look forward to hearing from you, the industry 20 representatives, concerning how you plan to deal with 21 backfitting issues.
We're also interested in hearing 22 what actions NRC may take to assure that the policy, as 23 implemented, will achieve our objectives.
This is one 24 of relatively few NRC initiatives that requires as much 25 or more of the NRC staff effort as of the industry.
NGWBGRRY& COMPANY
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However, your understanding of the policy and your 2
interaction with the staff in the implementation of the 3
policy are key ingredients in making it work.
4 There are several people here from headquarters; 5
and, since there have been several changes in the 6
attendees'since I got my list, I think I'll just go 7
across the head table and ask each person to identify 8
himself.
Bob?
9 MR. BURNETT:
10 I'm Bob Burnett, Director of Safeguards.
11 MR. GOLLAR:
12 Karl Gollar, from the Office of Research.
13 MR. GRIMES:
14 Brian Grimes, Director of the Office of Inspectior 15 and Enforcement.
16 MR. BERNERO:
17 I'm Bob Bernero, Director of BWR Licensing.
18 MR. SNIEZEK:
19 I'm Jim Sniezek.
I'm the Acting Deputy Executive 20 Director, Regional Operations and Generic Requirements.
21 MR. COX:
22 I'm Tom Cox, Senior Program Manager in the EDO's 23 office.
24 MR. GRACE:
25 And, in addition, as you know, we have Pat NG\\Y/BGRRY & COMPANY
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1 Mcdonald at the head table, who will be giving us some 2
words.
3 In addition, we have several key managers from 4
the regional office in attendance.
I'm not sure where 5
they' re sitting, so let me ask Al Gibson and Vince 6
Panciera to rise.
Al is the Director, and Vince is the 7
Deputy Director, of the Division or Reactor Safety.
I e
think most of you know them.
9 Brad Jones, our regional counsel, is here, I to believe.
Maybe he's still trying to find the room.
11 Phil Stohr, the Director of the Division of Radi-12 ation Safety and Safeguards, is here, along with Doug 13 Collins and Ken Barr, part of the management team in 14 DRSS.
15 Then, Luis Reyes, who is the Acting Director of 16 the Division of Reactor Projects, is here, along with 17 Kerry Landis.
And a couple of other staff people, I 18 believe, are in attendance from DRP, Division of Reactor 19 Projects.
20 Let me mention a couple of administrative matters.
21 During the coffee breaks, about all we can offer is 22 direction to the cafe, which is across the bridge, in 23 the hotel on the floor above the lobby.
I find the ele-24 vator over there is the only way to get up and down, and 25 there's a long wait.
But, apparently, we have difficulty NGWBGRRY & COMPANY
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providing coffee at meetings such as this without break-2 ing the law.
So, unfortunately, we have to go across 3
the bridge and get our coffee over there.
4 Messages will be brought into the meeting as we 5
receive them for individuals.
There are phones in the 6
lobby downstairs, immediately down the escalator, if you 7
~ need to use the telephone.
8 For lunch, there are a number of restaurants in 9
the Omni, right across the bridge; and there are some 10 fast-food places.
There is a very good Italian restau-11 rant, if you want to indulge to that extent.
12 I believe we have a court reporter here, and a 13 transcript will be available of this meeting.
14 Finally, let me suggest that you use the micro-15 phone and give your name and affiliation if you have 16 any questions.
With regard to questions, there are a 17 number of cards, like so, outside on the table, if 18 you'd rather write down your question and submit it.
19 Also, we have our latest Region Two organizational i
20 chart available, out on the table.
Our organization is 21 in a dynamic situation; but, as of 9:00 o' clock this 22 morning, it's current.
23 Now, before I turn the meeting over to Jim Sniezeh 24 let me briefly describe what the new backfit process 25 means to the way the Region conducts its business.
My NGWBGRRY & COMPANY
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staff and I firmly support the Commission's backfit 2
policy goals of a stable regulatory framework and a 3
disciplined process 'for evaluating and ' imposing new 4
requirements.
5 Although one focus of this policy is on the kinds 6
of licensing actions historically taken by the program-7 ming office and headquarters, we are aware that there a
may be instances where regional inspectors appear to be e
asking for new requirements that you may believe go io beyond what our regulations require.
But the resident 11 inspectors and the region based inspectors, as the front 12 line regulatory presence at the operating plants, often 13 must make judgements and interpretations of licensing 14 or ID documents such as tech-specs, bulletins, previous 15 enforcement correspondence and regulatory guides.
They 16 are sometimes involved in a level of detail that is not 17 explicitly described in existing regulatory documents.
18 We can't possibly anticipate and cover all of the detail to that may come up.
M We intend to conduct our business with full recog-21 nition of our responsibility to assure that you meet 22 the safety levels established by your current licensing 23 basis and, in addition, to assure that we identify addi-24 tional safety measures, where appropriate, which we are 25 willing to demonstrate are needed and are justified.
NGWBGRRY & COMPANY
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The reasons for many of the inspectors' sug-2 gestions for improvement is that we anticipate a level 3
of performance that goes beyond mere compliance.
After 4
all, mere compliance with our regulations is certainly 5
necessary but by no means is sufficient to ensure a 6
perfectly safe operation.
We're sensitive to the fact 7
that some of your managers may feel pressured into ac-a cepting the inspectors' suggestions for fear that g
disagreeing with an inspector may lead to interface 10 Problems in the future.
We don't appreciate licensees ti who just lie down and play dead when the NRC snaps its 12 fingers.
In fact, as an aside, I might say that I gave 13 a talk at a local A & S meeting here about 6 months ago i4 and a person came up to me af terwards and said they were 15 from Alabama Power.
I said, "Oh I like Pat Mcdonald, 16 he gives me a good argument every once in a while."
17 Well, I learned later that that got back to Pat and he's is stepped up his offensive.
19 (Laughter.)
20 MR. GRACE:
21 But, we do appreciate that kind of healthy inter-22 action.
But we don't appreciate, either, licensees whc 23 take issue with every suggestion for improvement.
We 24 can't afford that as we try to implement this policy 25 because, remember, we're already being criticized; NGVBGRRY & COMPANY
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people are skeptical; people are concerned that this 2
policy is going to stifle any new improvements.
And we 3
just can't allow that to happen, or the policy will be 4
changed and the pendulum will swing back in the other 5
direction again.
And none of us want that.
6 Our inspectors and examiners have been instructed 7
that, when dealing with licensees, we must be firm but 8
fair and we must conduct ourselves in a professional 9
manner.
Our inspection actions must be based on techni-10 cal considerations and not merely on the authority of 11 our positions as government authorities wielding power.
12 We have procedures in place for our managers to review 13 inspection reports to ensure that these policies are 14 followed.
There will be a lot of management involvement.
15 Regulating within the backfit rule and policy directives 16 of the backfit Manual Chapter will help assure well-17 reasoned and justified staff positions.
Where instances 18 of honest disagreements with our inspectors occur, you 19 should encourage your managers to discuss such disagree-20 ments with the inspectors or their supervisors.
There 21 will be no retribution on our part, certainly, for 22 candid talk; it's a healthy kind of interchange.
23 If there are concerns that come to your attention 24 about our inspection program or how it's being carried 25 out, even if it does not involve backfitting, we would NGWBGRRY & COMPANY
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appreciate a call and would be happy to meet with you to 2
talk about your concerns.
3 If these policies are to be effective, you also 4
have a responsibility to bring serious interface prob-5 lems to our attention.
We should not let problems 6
persist without talking them out.
7 I think we're ready now to turn the meeting over a
to Jim Sniezek.
9 MR. SNIEZEK:
NN to Good j morning, ladies and gentlemen.
Before we get 11 into the rest of our presentations, I want to review just 12 briefly with you the order of business for the day.
The 13 start for our second presentation is utility perspective 14 on the importance of the backfit rule followed by a 15 description of the rule itself and what it means.
That 16 will be followed by a break and then a thorough discus-17 sion of the backfit Manual Chapter 0514.
That will be 18 followed by lunch.
19 After lunch, we will reconvene with a discussion 20 by a panel of utility representatives regarding what the 21 backfit rule means to the utilities and the management 22 of their programs, followed by a break and then a panel 23 discussion, with adjournment around 4 o' clock.
24 I want to emphasize that during the course of the 25 presentations, right in the middle of the presentation, NGWGGRRY & COMPANY
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if you have a question on what's being said, if there's 2
something you don't understand, please raise the ques-3 tion at that time.
You don't have to wait until the 4
end of the speaker's presentation.
5 I would now like to introduce Mr. Pat Mcdonald.
6 He's a Senior Vice-President, Alabama Power Company, who 7
will discuss utility perspective on the importance of 8
the backfit rule.
Pat?
9 MR. MCDONALD:
10 Thank you, Jim.
Backfitting:
What is it?
How 11 should backfitting be approached?
Who should take the 12 lead?
What implications does backfitting hold for 13 decision making?
These are some of the questions that i
14 I hope we address here today.
15 As many of you are aware, our industry has been 16 working with the NRC for a number of years to determine 17 a sound backfitting rule.
Industry's efforts have been 18 led by the AIF, ~EEI and the Nuclear Utility Backfitting 19 and Reform Group.
The industry began to press for a 20 backfitting rule because we believed a rule was neces-21 sary to ensure the protection of the public health and 22 safety.
Our concern in the early 1980's was that new 23 requirements were being imposed at a breakneck speed.
24 Questions began to arise concerning the adequacy of the 25 evaluations of licensing initiatives.
With every NGWBGRRY & COMPANY
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retrofit to a plant, certain benefits were expected.
2 However, there were also unavoidable effects in the 3
terms of diversion of resources and management attention 4
away from important issues.
Utility managers found them-selves in the positions of simply reacting to NRC 5
6 initiatives instead of taking preventive measures to as-7 sure that problems did not arise.
It also appeared that 8
important questions concerning the implementation of new requirements were not often addressed ia a meaningful 9
to and timely manner.
This gave rise to the increased con-11 cern on both the part of NRC and the industry that the 12 regulatory process was not working as well as it could.
13 Now, more than ever, I believe that the backfittin g rule is necessary to assure fully the protection of the 14 15 public health and safety.
As will become clear during 16 today's discussion, the rule does not prohibit backfits; it simply provides that backfits are imposed only when 17 18 necessary and only after the backfit is thoroughly con-19 sidered by both NRC and industry.
The factors listed in 20 the rule that are to be considered are. factors that 21 should be considered by any decision-maker.
In this 22 sense, the backfitting rule is an important management 23 tool.
24 I'm pleased to be here today because this is a 25 joint workshop of participants from both the NRC and NGWBERRY & COMPANY
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and industry.
Our joint participation reflects one im-2 portant underlying aspect of the backfitting rule.
That 3
aspect is cooperation between the industry and NRC.
4 I believe in the strongest possible terms that the 5
backfitting rule is not a hurdle that should be thrown 6
in front of the NRC when it believes that a backfit ough t 7
to be implemented.
Rather, it is a means for both 8
industry and the NRC to assure that both of our re-9 sources are used to address areas where those resources to are truly needed and can be effectively used.
NRC and 11 industry should be vigilant in identifying potential 12 backfits and assuring that the backfits are necessary.
13 When they are, they should be implemented.
14 The ability to recognize backfits is an essential 15 Part of the backfitting process.
It is also one for 16 which I believe the licensees must take the ultimate 17 responsibility.
Because we operate our plants, we should 18 know them better_than anyone else.
And within our or-19 ganizations, those who design, instruct, operate and 20 maintain the plants at the working level should have the 21 most intimate knowledge.
22 Each of us here today will play a key role in the 23 backfitting process.
It is important that we understand 24 that process.
To develop and broaden this understanding,
25 we should consider the backfitting rule not in just the NGWBGRRY & COMPANY
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terms of what the rule requirca or how the NRC plans to 2
implement those requirements.
aather, we must consider the rule in terms of its place in the total regulatory 3
4 process.
Of course, it is important to understand the 5
specific elements of the rule and the procedures that 6
implement the rule.
It's a good rule, and the procedure s y
the NRC developed for its implementation are sound.
Those procedures and rules must be given the opportunity 8
g to work.
They are structured to assure quick and correc t
in resolutions of backfitting issues.
i, But familiarity with the rule and its implemen-12 ting procedures are not enough.
It is equally important 13 to understand that the backfitting rule is intended to 14 change the way both we and NRC do business.
As the in-15 dustry matures and the NRC focuses increasingly on 16 Operating plants, it is important for licensees to ex-17 press their views to the NRC, just as Dr. Nelson Grace is requested that we do so in his remarks.
Neither we nor tg the NRC have a monopoly on wisdom.
Both our consider-i 20 ations together of what needs to be done will increase 21 the likelihood that the correct decision will be made.
22 The backfitting rule is a significant tool in this 23 Process.
NRC has often told the industry that if the 24 regulatory process is to work, there must be a free ex-l 25 change between the licensees and NRC.
I remember on NGWBGRRY& COMPANY l
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several occasions, Dick Stello, during considering this 2
backfitting process, putting a challenge up to us as a 3
group to personally and individually -
"Get in there and do something, don't just criticize; do something. "
4 5
And I feel that in this process we did help to develop 6
this rule.
I believe that this rule is a challenge 7
to the industry to scrutinize the NRC proposed backfits a
for the sake of perspective.
We must accept that chal-g lenge.
Af ter examining a proposed backfit,. if we genuinely to believe that it is not warranted or another approach 33 would be more effective in addressing the area of con-12 cern, we ought to tell the NRC.
On the other hand, we 13 need to be sensitive to the responsibility to anticipate 34 needed plant improvements.
If we believe they are 15 necessary, we shouldn't wait for the NRC to tell us to 16 do it.
We should act on our own initiative.
That's 17 sound management, anyplace.
18 This rule will only be effective if it's used for Is the proper application and in the proper manner.
That 20 rests with us just as much as it does with the NRC. NRC 23 shouldn't be reluctant to apply the rule, where appli-l 22 cable; and we should not use the rule to roadblock an 23 NRC initiative.
24 Now, I'm very pleased to be here today for three l
25 specific reasons.
The first is in celebration that we NGWBGRRY& COMPANY l
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have this rule.
It was a long time in coming; every one 2
of us here worked on it.
We have it.
We're thankful 3
for it.
I'm sure that the Soviet utility managers and 4
the public would love to have this rule.
It's a good 5
rule.
6 The second reason I'm glad to be here is to help 7
participate in, encourage and nourish an unlimited part-8 nership -- unlimited in a tax sense, maybe; but really, 9
unlimited in terms of responsibility -- an unlimited to partnership among us all for the health and safety of 11 our planet to ensure they're running properly.
As we 12 have seen in the Russian incident, one of the biggest 13 factors that sets us apart is our ability to work in a 14
" free society" and to have meetings such as this where 15 people can come to those microphones and make a 16 difference in what happens.
17 The third special reason is one that I take very 18 personally.
I feel a strong personal responsibility to 19 my conscience, to my profession and to my morality that 20 through meetings like this and through the backfitting 21 process we never know of a problem such as the situation 22 that might be backfitted wherein an 0-ring will not 23 work under a given set of conditions.
Thank you.
24 MR. SNIEZEK:
25 Thank you, Pat.
As Nelson Grace and Pat Mcdonald NGWBGRRY & COMPANY
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mentioned, we have worked hard over the past several yea rs 2
to develop a backfit management process which will ensur e 3
that necessary safety improvements are in fact implemen-4 ted and that unnecessary requirements and staff position s 5
are not promulgated.
We believe that it is extremely 6
important that the industry understands how the staff 7
intends to implement the backfit rule, and that's the 8
Purpose of these 4 workshops we are having with industry.
g In my discussion of the rule, I'm going to give you a 10 brief backgound as to what led to the rule, discuss the 11 definitions, the applicability of controls, the excep-12 tions to the rule -- when the rule does not apply -- the 13 analysis required by the staff when the staff intends to 14 backfit, discuss the staff responsibilities in backfit 15 resolution.
Also, I'll discuss briefly requests for 16 information.
17 The background:
As you all are painfully aware, 18 the TMI action plan had a far-reaching impact on both 19 the industry and NRC resources.
They were stretched al-20 most to the breaking point.
Based on early feedback we 21 received fro'm the industry and the NRC staff, it indi-22 cated that the scope, depth and timing of many of the 23 actions coming out of the TMI action plan were causing a 24 Problem.
As a result, the NRC chartered a survey of.
25 licensees which was' led by'one of:our regional admini-strators with assistance from senior. headquarters and regio NPY/BGRRY & COMPANY t
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management.
And in that survey, they visited 12 dtilities, 2
discussed at every level of management -- corporate and 3
staff management -- the impact of the NRC actions coming 4
out of the TMI action plan.
The results of that survey 5
were published in 1981 NUREG-0839, and it had one single 6
finding.
Let me quote that finding.
Open quote.
"Not-7 withstanding competence and good intentions of the staff a
the pace and nature of regulatory actions have caused a 9
potential safety problem of unknown dimension."
Close 10 quote.
As a result of that finding, as a result of that 11 survey, the Commission established the Committee to Re-12 view Generic Requirements in 1981.
It was felt at that 13 time that generic requirements, generic staff positions 14 coming out of the NRC were having the most impact on 15 utilities.
And therefore, we first attacked the manage-16 ment structure for managing generic requirements and 17 staff positions.
At the same time, however, the Regula-18 tory Reform Task Force was established with a charter of 19 examining several regulatory activities and how they 20 could be improved.
Among these was the backfitting pro-21 cess.
As a result of the efforts of the Regulatory Re-22 form Task Force and staff initiatives, in 1983 the Com-23 mission ordered instructions to the staff and procedures 24 were developed to govern plant-specific backfitting pro-25 cess.
Also in 1983, the advanced notice of proposed rula NGwegpRY & COMPANY t
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making, the forerunner of the current 50.109, was 2
published.
3 Backfitting:
In the discussion that the Commission 4
had on backfitting, they really lumped 2 things into the 5
backfitting.
That was the request for information rule 6
50.54(f), which really isn't backfitting, but veve in-g 7
cluded it for discussion purposes, and the backfitting 8
rule itself, 50.109. These were published in the Federal 9
Register on September 20, 1985 and became effective on 10 October 21 of last year.
I want to stress right up 11 front, backfitting is not bad.
But, it's a key element 12 of the regulatory process to ensure continued public 13 health and safety.
However, backfitting must be done in 14 a managed, disciplined manner if we are to ensure the 15 continued public health and safety through the backfit-16 ting process.
That's what this backfitting regulation 17 is all about, having a management disciplined process 18 for imposing backfits.
19 The backfit rule encompasses generic actions; tha t.
20 is,. management actions is through the CRGR process, the 21 Committee to Review Generic Requirements.
That's nothing 22 new; that was in place before the current version of the 23 backfit rule became effective.
And we aren't going to
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24 spend much time today talking about that process, but it.
25 also applies to the plant-specific actions.
And that's NGWBGRRY& COMPANY
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covered by Manual Chapter 0514, and a copy of that was 2
sent to each utility.
It applies to power reactors; and 3
it applies to backfits imposed after October 21, 1985.
4 Let's discuss the request for information rule 5
50.54 (f).
The purpose of the request for information 6
rule is to ensure that there is a solid rationale for 7
requesting information from licensees.
In other words, 8
the staff is not just to request information from li-g censees unless the staff has a good reason.
After 10 issuance of a license, the Commission may request licen-gg see statements under oath in order to enable the 12 Commission to determine whether a license should be sus-13 Pended, modified or revoked.
However, a written g
justification is now required by the staff to determine 15 whether or not the request is justified in light of the 16 burden to be imposed upon the licensee providing the 37 information and the potential safety significance of the 18 information.
The intent here is that the staff not re-19 quest information that is not of safety importance but 20 which will place a large burden on'the utility supplying 21 that information.
The staff is required to do an anal-22 ysis up front to make sure that the~costf.is.comensurate 23 with the safety information that is being requested.
As 24 far as the management control, prior to issuance of a 25 information request under 50.54 (f), it must be approved NGWBGRRY & COMPANY
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by the EDO or its designee.
Now, the designees are the 2
Office Directors of NRR, IE or NMSS; or the Regional 3
Administrators, or their Deputies, with no further 4
redelegation.
So you know when you receive a 50.54 (f) 5 request, it has been reviewed and approved by very 6
senior agency managers.
Now, there is an exception.
7 Justification for the information request is not require d 8
when the information is being sought to verify compli-9 ance with a licensing basis.
to What is the licensing basis?
That is what you 11 have committed to in your SER or other documented corre-12 spondence to the NRC; it's what is in the rules; it's 13 what is in your license conditions, what is in orders 14 and what is in tech-specs.
That established a licensing 15 basis for your facility.
If the request is to verify 16 compliance with a licensing basis, the justification is 17 not required.
Any questions on that?
18 (No response.)
19 MR. SNIEZEK:
20 Let's go on to the backfit rule itself, then, 21 which is the heart of the discussion today.
First off, 22 the definition.
There are 2 essential components in the 23 definition of the backfit rule.
One is the substance of 24 the issue; the second is the timing of the proposal.
25 Substance and timing; these are the 2 essential ingredi-NGWBGRRY & COMPANY
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ents.
Let's talk about the substance first.
A backfit 2
is a change to a system, structure, component or design 3
of a facility; or a change to the design approval or 4
manufacturing license, or a change to the procedures or 5
organization.
And by procedures or organization, we mea n 6
it in the broadest sense of the term, not a narrow sense,
7 a broad sense.
And such change may result from either 8
a new or amended rule of the Commission or imposition 9
of a new or amended staff position.
A staff position is 10 a staff document which interprets the rule or describes 11 how the staff intends to implement the rule.
The types 12 of documents we describe as staff positions are the 13 standard review plan, regulatory guides, branch technica l 14 positions, bulletins, things of that nature.
Those are 15 our staff positions.
That's the substance of the rule.
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16 MR. MCDONALD:
17 May I ask a question, Jim?
18 MR. SNIEZEK:
19 Sure thing, Pat.
20 MR. MCDONALD:
21 When he invited us to ask a question he probably 22 never anticipated that I would get up on the stand here 23 and ask a question.
But in explaining it, you say that 24 it applies to changes to procedures or organizations.
I 25 don't recall anything in the backfitting rule saying NGWBGRRY & COMPANY
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specifically it applies to such things as the qualifica-2 tion requirements.
I had a person asking me yesterday 3
why the proposed rule on required engineering degrees 4
for senior reactor operators was covered in the backfit-5 ting rules.
Could you answer that?
6 MR. SNIEZEK:
7 It's a good question.
There is no doubt that the a
backfitting rule applies to qualification standards.
If 9
there's a new rule that comes out on qualification stan-10 dards, it must meet the backfitting test.
If there is a 11 new staff position that comes out on the qualification 12 standards, it must meet the backfitting test.
When I 13 said organization and procedures in the broadest context 14 of the word, that's what I meant.
15 MR. MCDONALD:
16 Thank you.
17 MR. SNIEZEK:
N 18 I'm glad Pat.did that.
It broke the ice.
As other 19 people have questions, please, at any time, get up and 20 interrupt; and let's discuss it at that time.
Don't be 21 bashful.
22 All right.
Now, the second part of the rule; we've 23 talked substance, let's talk timing. The big "and" up ther 24 was a change to being required as a result of'an NRC.act:.or '
25 and the new or amended rule or staff position occurs NGWBGRRY & COMPANY
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after the date of CP issuance for CP's issued after 2
October 21st of last year.
This is looking for the futu::e 3
plants.
What this says is for future plants, the day 4
you get your CP, any change after that while you're 5
building that plant is a backfit and has to be analyzed 6
pursuant to the backfit rule.
The second time-line is 7
6 months before docketing of the OL.
That's for CP's a
issued before October 21st of last year.
And the intent 9
of that time-line is to capture the current NTOL's.
If 10 you've got a plant that's a current NTOL, the CP was ti obviously issued before October 21st.
That means that, 12 6 montne before you docketed your OL, that's where you'r e
13 locked in as far as time-line.
Any change after that 14 will be analyzed pursuant to the backfit rule.
The third j
15 time-line is issuance of the OL, and that's for current 16 OL holders.
If you've got a current operating reactor, 17 what you were locked in on when you were issued your OL 18
-- that's your time-line.
Any changes a~fter'that'will b a 19 considered under the backfit rule.
And then, issuance 20 of design approval under Appendices M, N and O of the 21 regulation:
With the date of issuance of design approv-22 al, any changes to the standardized design after that 23 will be treated under the backfit rule.
Now, let me lay 24 the caveat.
Backfits imposed before October 21, 1985, 25 are grandfathered.
That means the staff doesn't have to j
NGWBGRRY & COMPANY
25 go back, and you can't claim backfit on something that 1
2 happened before October 21, 1985.
Now, when Tom Cox 3
gives his presentation, a little later on, he will use 4
the date May 1, 1985, because that was the effective 5
date of the Manual Chapter 0514 which was in place before 6
the rule was finalized and had the essential ingredients 7
in it.
As far as staff implementation, we're using 8
May 1, 1985 as the grandfather date.
9 MR. MCDONALD:
10 I've got another question.
11 MR. SNIEZEK:
12 Surely.
13 MR. MCDONALD:
14 Jim, where are you going to address -- later per-15 haps -- what the initiation of backfitting means with 16 respect to what you just said?
What constitutes the 17 initiation of a backfit?
18 MR. SNIEZEK:
19 I will address that now.
Tom will repeat it some-20 what in his presentation.
Correct me if I don't really 21 address the full question.
22 Initiation of backfitting:
First off, the backfit 23 rule is not meant to stifle communications between the 24 staff and the licensee.
The communications, the good 25 dialogue between the inspectors and the licensee, NGWBGRRY & COMPANY w
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26 1
between the reviewer and the licensee, is meant to con-2 tinue.
In fact, we hope it would be enhanced by the 3
backfit rule.
However, in those discussions, if it is 4
the intent of the NRC personnel to make you change the 5
way you were doing business through a new interpretatior.
6 of a staff position, then it is clear that the NRC staff 7
is backfitting.
And before the NRC staff would do that, 8
they are required to do the backfit analysis that is 9
specified in the Manual Chapter.
10 MR. MCDONALD:
11 I didn't ask my question properly.
I was really 12 referring to the grandfathering.
These dates you gave 13
-- when you said something that was initiated before 14 then -- Do you understand what I mean?
15 MR. SNIEZEK:
16 All right.
If you did not get the staff position 17 in writing before that date and you get it after that 18 date, it's a backfit.
The staff position has to be in 19 writing.
If there is just discussion back and forth 20 before that time about the potential requiring something 21 to be done and it wasn't put in writing, then you did 22 not get the NRC staff position.
We're talking about a 23 written position.
24 MR. MCDONALD:
25 I've got to ask you one more question and I promis.
NGWBGRRY & COMPANY l
27 1
not to ask you any more.
Now, a lot of staff positions 2
get written up; and then, sometime later, they're for-3 warded to the Commission, they're kicked back and forth, 4
they're wrestled around.
So, what if the staff had a 5
position, they submit it to commissioners, the commis-6 sioners delayed or for some other reason action was not 7
taken on it, and that was a year ago.
Does that still 8
constitute -- is that still covered under the grand-9 father?
10 MR. SNIEZEK:
11 A staff position is effective when you get it.
If 12 it is something that requires Commission review, it's 13 not in place until after the Commission finishes their 14 deliberations.
For example, if the staff had a pro-15 posed rule, final rule, that was before the Commission; and the Commission -- went down to the Commission in 16 17 July of 85, if the Commission didn't act on it until 18 November of 85, it would be a backfit because it's after 19 October 21st, when the final NRC action took place.
In 20 fact, the Commission is passing back to the staff rules 21 in that category for accomplishment of a backfit analysi s.
22 MR. STRINGFELLOW:
23 Excuse me.
I've got a question, please.
With re-24 gard to the NTOL's --
25 MR. SNIEZEK:
NGWBGRRY & COMPANY
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Can you give your name?
2 MR. STRINGFELLOW:
3 Oh.
Yes, excuse me.
My name is Jack Stringfello w 4
and I'm with Southern Company Services.
With regard to 5
the NTOL, when you say 6 months before docketing of OL, does that mean the receipt of the operating license or 6
7 the application for the operating license?
8 MR. SNIEZEK:
g That means the docketing.
That's the receipt of to the application for the operating license, whenever it's ij docketed.
There's a docketed date for your application.
12 We're talking application, not the OL issues.
MR. STRINGFELLOW:
13 34 Thank you.
MR. SNIEZEK:
15 16 Now that we have the substance and timing pretty 17 well fixed in our minds, let's talk a little about the 18 backfit analysis that's required.
Remember, backfit i
ig isn't bad.
Nobody's saying backfit is bad.
Backfit is 20 good; it's a viable part of the process, but it has to 21 be managed and it has to be controlled.
And to make sure 22 that backfitting remains good, there is a systematic and 23 documented analysis required for backfits the NRC seeks 24 to impose.
This is to ensure that safety is in fact 25 being improved.
We don't want it to stay neutral.
NGWBGRRY & COMPANY
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1 We don't want it to decrease.
We want it to improve.
We require the utility to take an action.
First off, we 2
have to look at what we're proposing and determine how 3
4 it should be prioritized and scheduled, in light of the other regulatory activities at the facility.
Ofentimes, 5
there is a tendency -- both in your organization and in 6
the NRC -- that when a part of the organization proposes y
something, it is very important to that part of the or-g g
ganization.
Well, they have to look at how it fits inte the entire scheme of events, the entire regulatory pro-in cess.
How important is it?
How should it be scheduled 3,
in light of everything else?
So that, hopefully, the 12 m st safety significant things are being scheduled and 13 prioitized so they're done first and they're not pre-34 empted by something of lesser safety significance.
The 15 staff also has to take into account the specific objec-16 17 tives of the backfit.
What problem are we trying to 18 correct?
Oftentimes, we found through the CRGR process the staff comes over with a good proposal.
We ask a very Is 20 simple question:
What problem are you trying to correcti 21 And sometimes it's hard to get the answer.
We have to understand what we want to accomplish, what we're trying 22 23 to correct.
And then, we can judge whether or not the 24 Propcsed action will actually correct that problem in 25 the best way.
NGWBGRRY & COMPANY
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The second thing is what activity will be required 2
of the licensee.
Will he have to do a lot of redesign, 3
training of operators, plant testing, procedure changes, 4
things of that nature?
Without looking at those types 5
of activities, it's hard for us to gauge the impact.
6 It's hard for us to determine when it should be sched-7 uled.
So you have to look at those types of things.
g A very important one, probably the most important g
one -- in fact, it is the most important one.
What's jo the change in the accidental off-site radiological risk 3i to the public?
That's what it's all about.
How is it 12 going to impact on the public?
That is normally expres-13 sed in terms of man-rem.
And that's: Is it going to be 34 positive, add person-rem; or is it going to save person-rem:
15 MR. SPARKS:
16 I'm John sparks from TVA and I have a question.
17 I've gotten a little confused between your information 18 request and application to backfit rule, and I have a 19 specific question about that.
20 MR. SNIEZEK:
21 Okay.
22 MR. SPARKS:
23 The information request can be applied when you4re 24 asking information about how we meet out design bases 25 without going to review or getting an approval -- a l
l NGWBGRRY& COMPANY
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specific type of approval.
If you require us to spend a 2
great deal of money proving that we meet our design basis 3
or it required a great deal of our design and engineer-4 ing time to prove or reprove something we've already Proven by getting an operating license and gone through 5
6 many years before, is that considered a backfit?
Or 7
would that be something you would be allowed to request under the Freedom of Information Act?
8 MR. SNIEZEK:
g I didn't understand the reference to the Freedom 10 of Information Act, ij MR. SPARKS:
12 Okay. What I'm asking is, if you make' a request or 13 y
put out a staff position which requires us to spend a great deal of time, effort and money to redocument some-15 thing you've previously approved in our plant design, 16 is that a backfit or not?
17 18 MR. SNIEZEK:
ig If you have an operating license -- I'll use the 20 terms you used - ~ that means we wrote off on your anafys.s.
Whether we reviewed it or not, you submitted your SER.
21 22 We wrote -off on your analysis.
If we later change our staff position because we don't think we want to accept 23 24 that type of analysis anymore and ask you to re-do your l
25 analysis using other considerations, that would be a l
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backfit, because we have changed the staff position from 2
a previous staff position.
And I'm going to be talking 3
just a little bit more about that, later on.
- However, 4
if it's done for the purpose of ensuring there is no 5
undue risk to the public health and safety, the public 6
undue risk standard, the analysis specified in the back-7 fit rule does not have to be done.
But there are.2 8
other things we have to do; and I'll be covering that a 9
little later in my presentation.
to MR. SPARKS:
11 Thank you.
12 MR. SNIEZEK:
13 All right.
I just finished talking about the most 14 important aspect of the backfit rule, and. that's what is 15 the impact on the public health and safety in terms of 16 man-rem?
What's the potential impact under the radiolog-17 ical exposure to on-site workers due to the installation 18 and continued maintenance of the modification?
One of is the things we found in some of the proposals was that 20 there may be a potential saving in man-rem to the public 21 of say a thousand man-rem, but there's a certain in-22 crease for occupational exposure of two thousand man-rem 23 Well, that doesn't sound like a very reasonable trade-off 24 over the life of plant, so we want to look at that to 25 see what the trade-off is.
NGWBGRRY & COMPANY
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We have to examine the installation and continuing 2
licensee costs of the modification.
This includes plant 3
downtime and replacement power.
We have to examine the 4
impact on operational complexity and the relationship tc 5
regulatory requirements.
That's to ensure that we're 6
not getting duplicate requests, we don't have 2 positions 7
doing the same thing; to ensure that we don't have other 8
proposals coming forward which will accomplish the same 9
thing that we're trying to propose now; it's to help in to the scheduling, again, to fit the priorities together and 11 examine the impact on NRC resources.
If we're asking 12 the utilities to do something that's going to come in 13 for NRC review before they're allowed to implement, we 14 have to look at do we have the resources available to 15 do the review?
When will we get that review done?
It 16 doesn't make sense to have a licensee required to submit 17 something within 120 days and we don't review it for 3 years.
So we want to examine that.
Or we might change 18 19 the way we do business because something we were going 20 to do, an in-house review, we don't have the resources 21 to do.
Maybe we'll decide to have the utility do it; 22 and the only review we'll do is a field inspection at 23 some time, no pre-review required.
We examine the im-24 pact on the differences in facility types.
It it applies 25 to just BNW facilities, just to combustion engineering, NGWBGRRY & COMPANY
34 1
just to GE Mark II's, whatever.
This factor ohly applies 2
to the generic requirements that's not analyzed in the 3
plant-specific applications.
We examined whether the 4
action the staff is proposing to take is interim or fi-5 nal.
We don't want a lot of interim actions out there 6
where we're going to come back and drop the other shee 7
in another year.
So, if it's an interim action, there 8
has to be adequate justification as to why is it neces-9 sary to take an interim action if we have not come up to with our final conclusion on the subject yet.
And we get into other germane factors, such things as how many 11 12 years of operation does the facility have left?
What's 13 the performance record of the facility?
What does their 14 staffing level look like?
What's been their operator 15 Passing rate on exams?
What kind of SALP reports have 16 they been getting?
As you look at the different areas, it can influence the decision especially on the plant-17 18 specific basis in either a positive or negative fashion, 19 depending on your perspective.
20 Backfit determination:
The determination of 21 whether or not to impose a backfit is based on the back-22 fit analysis, taking into account tactors that I just 23 reviewed.
50.109 (a) (3) very clearly states that the 24 Commission shall require backfit only if there is a sub-25 stantial increase in overall protection of the public NGWBGRRY& COMPANY
35 1
health and safety and the costs of implementation are 2
justified in light of that increase to the public health 3
and safety.
This is a judgement call.
There's no al-4 gorithm that we plot; there is no specific definition of 5
what is a substantial increase.
But substantial means 6
it's of real substance, it's not trivial, it's not imag-7 inary.
There will be an increase:
that's the finding a
that has to be made.
9 I mentioned a while ago there are some exceptions K,
to the backfit analysis.
There are times when the back-li fit analysis of 50.109 (c).and the justification of (a') (3 1
12 are not required.
They're not required if the change is 13 necessary for compliance with rules, orders, license 14 conditions or licensee commitments to the NRC.
If you're 15 committed to the NRC in your SER and docketed licensing 16 correspondence and in response to a notice of violation 17 to take an action, to require you to take that action is 18 not a backfit.
The other one: analysis and justification 19 are not required if the action is being taken to ensure 20 no undue risk.
Now, that no-undue-risk determination 21 has to be made by the Director of NRR or the Director of 22 IE or the Director of the Office Nuclear Materials Safety 23 and Safeguards.
Those are the 3 people that can make 24 that determination.
However, there has to be a docu-25 mented evaluation of the exception to the backfit rule, NEWBGRRY & COMPANY
36 1
and it has to contain the basis for invoking the excep-2 tion and the reason for the change.
If, pursuant to 3
50.109 (a) (2), a backfit is imposed because of the no 4
undue risk consideration, there is an analysis required.
5 It's a 2-part analysis.
That analysis has to address 6
the safety significance of the issue and also the appro-7 priateness of the action being taken.
However, in 8
addressing the appropriateness of the action being taken,
9 cost is not a consideration.
If one of those 3 office to directors finds there's a "no undue risk" situation, he it is authorized to require any action necessary to move 12 the threshold of safety above the no undue risk thresh-13 old; and he is not to take into account cost in balancing 14 safety.
There is no safety-cost trade-off.
The safety 15 standard must be met, period.
I'll say, however, cost 16 can come into play if there are various acceptable ways 17 of reaching that undue risk consideration.
Cost can be 18 a factor in determining which alternative is chosen to 19 get the plant safety above the no undue risk threshold.
20 I would mention, also, that if it's an immediate safety 21 concern and if an immediately effective action is initi-22 ated by that office director, this analysis required by 23 50.109 (a) (2) may be done after the fact and need not be 24 done before the modification is imposed on the utility.
25 What's the impact on licensing?
50.109 (d) of the l
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37 1
rule states that the licensing action should not be 2
withheld pending the analysis required by 50.109 (c).
3 That means we don't intend to hold the utility hostage 1
4 while we're discussing a backfit consideration, while 5
we're doing the analysis.
Now, the staff has taken the e
rule one step further in its Manual Chapter, and I'll 7
mention that here.
The staff has extended this concept 8
to construction and to operations.
If we're proposing 9
a backfit and going through our analysis, we will not to stop construction and we are not to stop operations 11 while we are doing that analysis.
We've also taken it a 12 step further to incorporate the appeals process, the 13 appeals process specified in the Manual Chapter.
In 14 other words, if a backfit has been initiated, the staff' s 15 doing an analysis, the utility appeals it, we will not 16 withhold any action while the analysis or appeals pro-17 cess is being followed.
That means that the utility goes 18 about its business as usual, without staff interference, 19 during that time.
20 Responsibilities within the NRC:
50.109 states that 21 the Executive Director for Operations is responsible for 1
22 the implementation of 50.109.
It requires that the 23 Executive Director for Operations or his designee ap-24 prove all analyses.
The Executive Director has made 25 limited designees.
They are the office directors NGWBGRRY& COMPANY
38 1
or their deputies and the regional administrators and 2
their deputies, with no further redelegation.
It's the 3
intent of the NRC to make sure that backfits are managed 4
by the senior management of our agency.
5 This concludes the elements of my presentation.
6 I'd be pleased to entertain any questions you may have 7
at this time.
8 MR. BEMIS:
g I have several questions.
One, it appears the to backfit rule only applies to part'50 licenses as opposed to 11 like a 50'.'55 license.
12 MR. SNIEZEK:
13 That's correct.
It only applies to part 50.
14 MR. BEMIS:
15 How do utilities handle what is normally taken as 16 implicit approval if in response to a rule that is put 17 out the utility writes back and says, "this is our under -
18 standing, this is what we are going to implement" and 19 either there is not written response back from the Com-20 mission or in a SER that's developed a given point is 21 not specifically called out, the licensee goes ahead and 22 implements according to what they submitted and at a 23 later date an inspector comes out and says, "no, that's 24 not what the rule meant."
Is that considered a backfit?
25 MR. SNIEZEK:
NGWBGRRY & COMPANY
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All right.
That's really a two-part question, as 2
I recall it.
Let me address that, because I think it's 3
a very important question.
In the Manual Chapter, we 4
talk about tacit approval by the staff.
The intent there 5
is that if there's a general rule, you submit your pro-6 grams for implementing the rule and you tell the staff 7
that "This is the way we're implementing it," if time 8
drags on -- And we don't define a time, for obvious g
reasons.
But if time drags on, you never hear back and in you implement what you told the staff you were going to ij do and, four years later, you get a staff reply that sayn, 12
" Hey, we don' t accept this," at that point, you would be 13 in backfit.
I used four years, which is pretty obvious.
14 If it was six months before you got a rcsponse, I'm not 15 sure if that would be a backfit or not.
But what it is 16 If you tell the staf f you' re going to do something a 17 certain way, the staff owes you a timely response as to is whether it's acceptable or not under the rule.
If some-Ig something is addressed in your SER -- Say you made a sub-20 mittal to the staff on an issue saying, "Here's how I'm 21 going to do my business," an SER is written without an 22 OPen question in that area, if you're got a clean SER, 23 let's say -- and maybe not every element of your proposal 24 was addressed in that SER, explicitly -- if an inspector 25 or reviewer comes out at a later time and says what you NGWBGRRY& COMPANY
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are doing isn't good enough, that's a backfit, unless 2
there's a very explicit part of the rule that is not 3
being implemented.
Then it would not be a backfit be-4 cause the backfit rule does not set in abeyance the need 5
to comply with all existing rules and regulations.
It 6
would have to be very explicit, like saying you've got 7
you've got have 3 pumps, and-you'.ve only got two.'.That a
would be very explicit.
Bob, do you want to add any-e thing to that for now?
10 11 MR. BERNERO:
12 I think I could add a couple of useful comments if 13 I invoked an example.
If you have a proposed system 14 before the reviewer and it's going through a review 15 cycle over a reasonable period of time and even if there 16 is an open unresolved issue in it, if the staff finally 17 concludes that systems like this have been done before, 18 there is a long licensing precedent; but for some reason 19 they want to do this one in a different interpretation 20 of the rules, that is a backfit and we will treat it as 21 a backfit.
If, on the other hand, that same issue is 22 before the reviewer and there's a back-and-forth with 23 the utility, and it becomes apparent at the end of a 24 very long delay and untimely delay that, when you really 25 look into things, clearly established conditions in the NGWBGRRY& COMPANY i
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41 1
standard review plan or another appropriate source, reg, 2
guides, or whatever, that are expected to be satisfied 3
are not satisfied, then that is not a backfit.
It's 4
just that there was an untimely or late discovery of 5
non-compliance with a clear requirement from before.
6 I've just recently had both of those examples come 7
before me.
8 MR. BEMIS:
9 I had one further question.
If a licensee makes a 10 commitment, maybe even a commitment that's opposed to 11 the rules, requirements or standards, and for some reaso n 12 it's fallen through the cracks or it's.been inspected 13 over and over; and then all of a sudden it's discovered 14 that it is a commitment that was made, does that fall 15 under the backfit rule?
16 MR. SNIEZEK:
17 If you make a commitment to do whatever it is and 18 you don't do it and then an inspector or reviewer says 19 you've got to do it, that is not a backfit because it is 20 a commitment you made to the Commission.
21 MR. BEMIS:
22 Thank you.
23 MR. STEVENS:
24 Rod Stevens, Florida Power & Light.
With respect 25 to certain parts of the regulations that require periodi:
NGWBGRRY & COMPANY
42 I
upgrading, and I'm thinking specifically of the hind-sight program requirements to upgrade the program to 2
3 later versions of ASME Section 11, the licensees are 4
required to upgrade to the extent that it's practical, 5
and determinations of impracticality are required for e
NRC review and approval for determinations.
In your 7
discussion on when justifications are or are not re-quired for backfits, should the current staff position l
a e
require plant modifications that are consistant with to newer versions of the code, for example, is that then 11 exempt or not applicable under the backfit rule?
12 MR. SNIEZEK:
13
- 50. 55 (a) is not applicable under the backfit rule.
What would be applicable is there would be a current reg 14 15 guide or a current standard review plan which would 1
16 incorporate the new code of provisions.
When that code 17 of provisions is adopted under 50.55 (a), it's already 18 gone through the generic review process and therefore is it would not come under the plant-specific backfit 20 processes.
21 MR. STEVENS:
22 To the extent that there's a determination on NRC's
\\
a 23 part, to the extent practical I guess that de'termi-i 24 nation isn't evaluated then if current staff positions 25 says that something must be done a certain way?
NGWBGRRY & COMPANY
43 1
MR. SNIEZEK:
2 Right.
That does not come under the backfit 3
Process.
4 MR. STEVENS:
5 Thank you.
6 MR. SNIEZEK:
7 Bob, do you have anything else on that one?
8 MR. BERNERO:
g (Shakes head negatively.)
MR. CESARE:
10 11 Guy Cesare, Missippi Power and Light.
The questioa I had, to summarize it in a single one, is to what exten 12 l
13 in conducting the backfit analysis does the staff see 14 support from the utilities?
To explain what I mean, in 15 attacking the analysis, you have the two standards of 16 overall protection and then cost limitation.
It's been 17 my experience that while many parameters are reviewed, is the staff's position often focuses on one component or is system.
And to get at overall protection, you really 20 have to enlist or have some sophisticated things such as 21 PRA,and similar mechanisms and -- To the extent that you 22 have that capability or we have that capability, I guess 23 it's not clear to me.
In the implementation costs, 24 largely; a lot of that information, the cost per man-rem 25 and other factors to be considered in that aspect NGWBGRRY & COMPANY
44 1
-- Often, the accuracy of the bulk of that information 2
depends on the utility.
So where do you see the staff 3
in your appraisal at this point of their ability to 4
conduct that analysis without the utility, or do you see 5
a lot of requests for information from the staff to us 6
to support your backfit analysis?
7 MR. SNIEZEK:
8 I would expect to see a lot of dialogue between 9
the staff and the utility on the various issues when the 10 staff even thinks about starting an action to impose some 11 new requirement on the utility.
I think it's only 12 through the up-front informal dialogue that the staff 13 obtains the best information from the utility.
It's to 14 the utility's advantage to interface with the staff very 15 thoroughly at that time to eliminate any misunderstand-16 ings regarding the safety significance or possible costs 17 of implementation before people start setting their feet 18 in concrete, I would envision.
I had mentioned some of 19 the things that the staff should take into account as 20 far as what activities will a licensee have to do.
Will 21 he have to train people?
Will he have to devise pro-22 cedures?
Will they have to do design modifications?
23 I would expect that in order'.for'the staff.to get a good 24 handle on that they would have'.to dialogue with the 26
///
NGWBGRRY & COMPANY
45 1
utility.
Now, there is a concern that I have heard 2
expressed before that the utilities will say, " Gee, we've 3
been burdened with detailed requests for information 4
to justify the staff's backfit analysis.
That is not the intent and I would not expect to see that happen.
5 6
However, I would expect to see good dialogue between the 7
staff and the utility.
And I'd like to have Bob address 8
that somewhat, also.
9 MR. BERNERO:
to Yeah.
I'd just like to add to that.
The staff considers itself responsible for developing intelligent 11 and sound cost-benefit analyses or averted-risk analyses.
12 13 There is a responsibility -- and, I think, a usual 14 practice -- to have the dialogue with the owner of the 15 plant, especially where the owner of the plant is having 16 some PRA element from another plant applied to his plant, 17 because of possible inapplicability.
You people know your i
18 plants better than we do.
And if the system analysis from 19 another plant isn't quite applicable, we really need to 20 get that feedback.
21 But I would caution you that I think we have had 22 good dialogue, and I can think of some dramatic examples 23 where an attempt to have a cost-benefit analysis has 24 found a wash.
Some of you may remember a time, about 25 two years ago, I think, where the staff was going NGWBGRRY& COMPANY
46 1
to backfit PORV's for a certain class of reactor that 2
didn't have them.
And the cost-benefit analysis was a 3
hot debate and not clearly justifying the change.
So 4
we have that responsibility; and, of course, we do not 5
intend and do not burden the owner with a demand for a 6
complete PRA every time we want to develop information 7
for cost-benefit analysis.
But we do offer the owner a
and invite the owner to comment on the backfit analysis g
because we want to make sure it's a sound one.
10 MR. SNIEZEK:
gi As Tom Cox Will mention in his presentation *in det 12 When the staff sends you a letter, right up front it's 13 supposed to say, "This is a backfit.
Included is our 14 backfit analysis."
And that analysis, if you disagree 15 with it, is a basis for your appeal.
16 MR. CESARE:
17 Thank you.
18 MR. McLAUGIILIN:
19 Lamar McLaughlin, Florida Power and Light.
Mr.
20 Sniezek, at the time your initial backfit rule was 21 written, certain costs were apparently not to be include 22 in analysis or specific costs were written into the 23 analysis to be performed.
My question is, will averted 24 on-site costs be included in approved analyses?
25 MR. SNIEZEK:
26 Even before the backfit rule was considered, the NGWBGRRY& COMPANY
47 i
staf f always had regulatory-analysis guidelines, such as NUREG BR0058.
As part of that analysis, you are to show 2
averted on-site costs.
We always display that.
How it'n 3
4 taken into account during the decision-making process is another issue.
They'll be looked at.
There is no algo-5 6
rithm, again I'll mention, that is applied.
There is no 7
magic number.
There is no $1,000.00 per man-rem ratio that's applied to decide whether or not to impose the g
It will be calculated, it will be examined, it g
will be looked at.
And it won't receive a lot of the 10 consideration, however, on the benefit side of the ij 89""Di "*
12 Let me go back one step further on the answer.
13 As you know, that was the debate in the Commission's 14 consideration of the safety-rule policy.
And we were 15 specifically told at that time not to use it in our 16 37 decision process.
That debate is still ongoing within 18 the Commission.
And if the Commission comes out one way gg or another, that will really dispose of how it will be 20 treated in the backfit, also.
MR. SPARKS:
21 22 John Sparks from TVA, again.
I'd like to clarify my earlier question.
I think you've answered part of it 23 in your discussion on undue risk, and I want to make sure 24 25 I have a good understanding of what you said.
I guess NGWBGRRY & COMPANY
48 1
I'd pose this question.
If an NRC request for proof of 2
the acceptability of an already approved plant design 3
is requested and such request requires an extensive additional analysis -- in other words, it's going to 4
5 take a lot of engineering man-hours and time and effort 6
to re-approve something that's already been approved by 7
the NRC, using a backfit -- Or I think I understood that 8
it is a backfit unless an exception is taken because of e
a fear of undue risk to the public health and safety.
30 Did I understand that correctly?
11 MR. SNIEZEK:
12 That's correct.
13 MR. SPARKS:
14 Thank you.
15 MR. WEATHERFORD:
16 Neal Weatherford, Duke Power.
We've recently been 17 involved in an exchange with the staff where they have 18 indicated that we could afford to go out and spend x 19 number of dollars to reduce a core-melt sequence to I
i 20 zero.
In that particular case, is it not incumbent uponi 21 the staff to indicate specific modifications that they 22 would have us make versus, say, just "Go spend x dollars 23 to make that better"?
24 MR. SNIEZEK:
25 I would answer your question, not knowing the NGWBGRRY& COMPANY
49 1
details, that if anybody would say you could go out and 2
spend money to reduce a core-melt sequence to zero, 3
they're whistling Dixie.
I don't know if that's possiblee 4
MR. WEATHERFORD:
5 They were doing that to bound the number of dollars 6
that you could afford to spend in this particular area.
7 MR. SNIEZEK:
8 I stay with what I said.
I don' t think they car 9
ever tell you to reduce a core-melt sequence to zero.
10 I don't think that's possible technically.
On the other 11 hand, I would prefer and I think it would be the NRC 12 position, that the NRC is probably the least capable, 13 between the utility organizations and the NRC, to say 14 "This is the specific fix that will have the most bang 15 for the dollar in your plant."
I think the utility is 16 much more capable of doing that than the NRC staff; and 17 I would hope that, if there is a specific core-melt 18 sequence that you're trying to reduce, that it is the 19 utility that would come up with the proposal to reduce 20 it, and not the NRC staff.
21 Again, I'll turn it over to Bob to see what he's 22 got to add on it.
23 MR. BERNERO:
24 In all of these discussions, when you get into 25 averting a particular core-melt sequence, people usually NGWBGRRY & COMPANY
50 1
use a factor of ten or a factor of 100 reduction, since 2
there is rarely an infinite reduction.
But the point is 3
the primary basis of backfit-analysis justification is 4
averted off-site health risk.
And if you've got,a parti -
5 cular plant vulnerability that results in off-site health a
risk, the fraction or the quantification of off-site 7
health risk depends on some very elegant and highly 8
debatable containment-performance analyses.
In other 9
Words, not only does the core have to melt, the contain-10 ment has to fail to get the material off-site to do the 11 damage. Quite often, in such a debate, we'.ll point out"that 12 the mere economic benefit of averting the core melt 13 swamps the consideration or makes it clearly worthwhile.
14 I don't know the particulars of the one you're talking 15 about.
I've heard it come up that way many times.
16 MR. WEATHERFORD:
l 17 Thank you.
18 MR. ZIMMERMAN:
19 I'm Sherwood Zimmerman, with Carolina Power and 20 Light.
Your slide 'on -backfit determination said that 21 you would only require a backfit if it_was a substantial 22 increase in protection and if the costs were justified.
23 If you should miss the backfit official rule by, say, a 24 day -- if you've missed the grandfather date, so it's 25 not officially a backfit -- could you still expect that NGWBGRRY& COMPANY 1
51 1
the staff would apply those same standards, even if it 2
wasn't officially a backfit?
3 MR. SNIEZEK:
4 I would expect the staff to include the same 5
standard.
In fact, I'm aware that the staff is applying 1
e the same standard because our Manual Chapter rules in 7
place effective May first and even some of those that a
were rated as backfits before then -- I know MLR is e
applying the same backfit process at this time.
10 MR. ZIMMERMAN:
11 One other question.
Bob mentioned an example 12 whereby maybe six previous plants had met a particular 13 standard review plan or reg guide and-that, therefore, 14 would be the expected staff position.
The fact that the 15 SRP's and the reg guides allow alternates in the first 16 place -- Just because you don't meet them and the six 17 previous applicants did meet them, does that necessarily 18 mean that you're opposed to the applicable reg guides?
19 MR. SNIEZEK:
20 Let me talk about that a little bit and amplify 21 what Bob was saying there.
The NRC staff position is 22 expressed in the reg guides and in the standard review P an.
It is not expressed in what a specific plant is l
23 24 required to do.
So, because one plant or two plants did 25 something based on whatever dealings with the NRC they i
NGWBERRY & COMPANY
52 1
had, that does not establish the NRC staff position.
2 It's what's written in the reg guide and what's written 3
in the standard review plan or the branch technical 4
position that establishes the NRC position on the subjec t.
5 MR. ZIMMERMAN:
6 But is that necessarily the staff position because 7
it's written there, or is it just one way of meeting it 8
with other alternates that are equally as good?
9 MR. SNIEZEK:
10 That is the staff position.
But it is not legally 11 binding; it is not required to be done that way.
There 12 are other alternatives, ways that can be used to satisfy 13 the regulation.
14 MR. ZIMMERMAN:
15 So it's not the only --
16 MR. SNIEZEK:
17 It is definitely not the only way, and it says tha".
18 right in front of every reg guide, as I recall, in front 19 of the standard review plan.
20 If that's it for now, let's take a ten-minute 21 break or so.
Let's be back at 10:40.
22 (Brief recess.)
23 MR. SNIEZEK:
24 We're ready to resume at this time.
The next 25 speaker is Tom Cox, senior program manager in the office NGWBGRRY& COMPANY
53 1
of the Executive Director for Operations.
Tom probably 2
knows more about the backfit rule and its implementation 3
than any other member of the staff.
Tom is going to talk mainly about Chapter 0514, which is the staff's process 4
5 for implementing the backfit rule.
6 MR. COX:
7 Thank you, Jim.
I guess everybody is coffeed and 8
watered and relaxed and ready to go again.
9 As you can tell from this cover slide, we're really, 10 now, going to talk about implementation, getting into 11 the nitty gritty of what staff is going to do with this 12 backfit rule.
Understand, too, that we are talking abou ;
13 self-imposed restraints on our regulatory practice.
This 14 is new for the Agency.
You heard Dr. Grace mention that 15 this rule requires much of the staff.
I don't know any 16 clearer way that you could put that.
That is the simple 17 fact.
It takes quite a bit of work.
It has taken quite is a bit.
It will continue to take more work to change a 19 philosophy of regulation that's more than 20 years old.
20 Management from top to bottom is being asked to modify 21 the way that we promulgate new requirements, and we've 22 been working at it for several months.
I think you can 23 understand that we come from a long tradition of emphasin 24 on safety alone, and we don't want to kill our emphasis 25 on safety.
So there's a lot of tradition and practice NGWBGRRY& COMPANY
54 1
embedded in the way we have done business.
When we are working on a particular new issue, particularly a plant-2 3
specific application to your plant, and that dialogue 4
is being maintained, you have to remember that staff and 5
reviewers, branch chiefs, section chiefs are sent out a
there to do a job in a little different way.
We some-times get enmeshed in our personal hang-ups, and we've 7
8 got our personal alligator snapping at our back side; g
and it's sometimes more difficult to remember you were 10 sent to drain the swamp.
33 It's important, also, as mentioned by Pat Mcdonald 12 and Dr. Grace, that the industry.know this process uas 13 well as the staff knows it.
And I hope we will shed some light on 'that before the end of the morning.
There have 14 15 already been many good questions on Jim's presentation.
16 Maybe there won't be that many on this one.
But, again, 17 I would reiterate, as Jim did, please ask questions at 18 any time.
Just stop me by raising your hand.
Please is identify yourself clearly at the mikes in the aisle so 20 that the transcription can be enhanced and you won't see 23 your name spelled backwards.
22 As I mentioned, this is about implementation of the 23 backfit rule.
This implementation by the staff is really going to be centered on something we call Manual Chapter 24 g
25 0514.
It's referred to different ways.
But the process NGWBGRRY& COMPANY
55 we are going to go through is really formally defined in staff documents at two levels. Today, we're really 2
3 going to talk about the upper-level document, Chapter 0514, which is the Executive Director for Operations' 4
or the EDO's directive to the staff as to how to conduct 5
6 this process.
There are also office-level directives by regional administrators and program office directors tha 7
g vern the way that their staffs will conduct this procc 8
us in consonance with the 0514 directive.
You all have 10 copies of the 0514 directive.
Just keep in mind that there are more detailed procedures in each regional 3,
ffice and in NRR, NMSS and IE.
Those more detailed 12 documents that I mentioned were actually in place in 13 1985, just about a year ago, in the initial form.
- But, 15 f course, with the issuance of a final backfit rule las; 16 September, effective in October, those documents needed 37 revision, as did Chapter 0514.
The 0514 was recently revised and ' issued to the staff and industry, to the 18 is industry for the first time, fo rmally, to each CEO under 20 a cover letter that said, "Here it is.
We think it's imPortant that your staff understand this and be willing 21 i
22 to operate with it and within it."
And we also announced 23 that we intended to have this type of meeting.
24 The office proocedures are currently being revised, 25 In fact, each Regional Administrator and Program Office l
NGWBGRRY & COMPANY
.-. _ = - - __.
56 Director has already submitted a revised version to the 1
2 EDO's office.
I'd like to spend just a few moments stating that 3
3 we have put in some effort in training the staff as to 4
5 the contents of these documents.
We've had nine seminar:s during 1985 on the Chapter with major program offices 6
including Research, which office you may not think nor-y mally is involved in backfitting; but of course, many a
g reg guides and proposed rules come out of the Office of go Research.
We've been around to the five Regions, not only to discuss the Chapter, but in separate meetings 33 12 last year.
We had relatively short two-to-three-hour workshops on how to go about doing cost-benefit analyses 13 34 All in all, we've talked to over 700 staff members.
And it's the intent to do that again, go out again this year 15 to and review the Chapter as it now is slightly modified.
For most of the talk this morning, we're really 17 18 going to really center on the EDO-level directive to to the staff, the Chapter.
We're going to go over the ele-20 ments in the Chapter briefly to summarize them or to out -
21 line them.
Then we'll go through each of the elements 22 in a little more detail.
I'll show you some examples of how to identify backfits or actual examples of identifyii 23 g
24 backfits which are fairly important, because that is one 25 of the keys.
As you heard someone else say today, the NGWBGRRY & COMPANY
57 1
most important thing about a backfit is knowing it when 2
you see it.
And that's certainly the beginning of any 3
process to manage the promulgation of a backfit.
And 4
we'll talk, then, briefly, at the end, about some actual 5
applications in the licensing arena; that is, the prin-8 ciples of applying the process in the licensing arena, 7
the inspection area and the enforcement area.
3 Just to review what is in the Chapter before dis-9 cussing them individually, we have responsibilities and to authorities outlined for the EDO office directors and 11 regional administrators and the staff, responsibilities 12 and authorities for all levels.
Secondly, there are --
13 The second element and several following that are actually 14 requirements on the staf f in their conduct of the procesa.
15 Jim discussed the one that I believe is number two there,
16 54(f) information requests.
I won't spend any more time 17 on that unless there are specific questions.
18 Then there are requirements on identifying plant-19 specific backfits.
That's a fairly major one, and it's 20 in that area we'll talk about the examples.
There are 21 requirements in preparing and handling the regulatory 22 analysis.
Jim covered that one pretty well.
There are 23 staff requirements for conducting the appeal process, 24 for implementing backfits; and there's a section in the i
25 Chapter on record-keeping and reporting.
I will cover i
NGWBGRRY& COMPANY
o i
58 1
1 that only a little bit right now, just to mention that there is an agency-wide record-keeping and reporting 2
3 system that we call the Pitant-Specific Backfit System 4
or PSBS, for short, that is primarily a PC-based data 5
base that is accessible by terminals in each of the five 6
Regions and each of three headquarters offices.
In that 4
data base, which is maintained at NIH in their computers 7
e are all the backfits that were ever processed or that ar e 4
e in process, with certain key information in there, not to merely bean-counting information -- that is, dates and 11 places -- but substance in text fields that will describe 12 the purpose of the backfit, who has the next action, wha 13 some of the decisions were and how they were made. You 14 will not see a detailed regulatory analysis in that data 15 base, but we maintain that data base so that any staffer i
16 can find out at any time what is in the backfit manageme it 17 process throughout the agency.
18 I think there are a couple of sections in the Chap:er 19 on exceptions and definitions.
The exceptions were j
20 covered by Jim Sniezek.
We will go over the definitions 21 of a backfit.
4 22 And an Appendix is at the end, Appendix A, which 23 is essentially a several-page guide on how some back-24 fitting identification and decisions mighc actually be i
25 made in different parts of the staff's daily work.
NGWBGRRY & COMPANY
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59 1
Now, we're going to go back and get into a little bit more some of the details in the individual Chapter 2
3 sections.
This particular one, on responsibilities and 4
authorities, we don' t have to cover too heavily because, 5
again, Jim went over this in the just-previous talk.
Buu e
keep in mind that the EDO is responsible to the Commis-i sion for the successful conduct of this entire project.
7 s
That is a change that has been included since the first 9
edition of Chapter 0514.
The Commission instigated this change, and it's an indication of the importance they to 11 ascribe to this whole process.
12 Notwithstanding the EDO's responsibility, he is 13 able to delegate certain responsibility to office 14 Directors and Regional Administrators; and he has done 15 that.
These senior managers will review specific cases is and make decisions.
Maybe I should remind you again:
[
17 We are now talking about plant-specific backfits, not is generic decisions that are processed through the 19 Committee to Review Generic Requirements.
The EDO may 20 review and modify decisions that are made by Office 21 Directors and the Regional Administrators, but it is at 22 the EDO's election, not required by the Commission.
In 23 general, the EDO will be the final appeal authority; but,
24 also, in general, it is not expected that it will be 25 necesasry for the EDO to make many of those decisions in NGWBGRRY & COMPANY
60 1
the context of our Chapter 0514 process.
2 The Director of the ROGR staff -- that is now 3
Jim Sniezek -- shall assure that the controls are 4
developed, maintained and communicated to the licensees.
5 Obviously, we're doing some of that right now.
Another example of that would be the letter to each utility's 6
CEO that was sent out in March, passing on the Chapter 7
8 0514.
Office Directors and administrators will also ass ure 9
that office procedures are in place in each office for 10 managing the plant-specific backfit that I've discussedI.
11 Office Directors and Regional Administrators shall 12 approve regulatory analyses, and they shall make the 13 backfit determinations af ter a backfit's identified, before transmitting the proposed backfit with its analy-14 15 sis to the licensee.
That is a particular responsibility 16 of that office.
They will also consider claims of back-17 fit by other than the NRC staff.
Obviously, for all 18 practical purposes, those claims of backfit will arise 19 primarily from licensees.
The Office Directors will make 20 final decisions on appeal, unless the licensee carries 21 the appeal to the EDO, having received the Office 22 Director's decision.
23 The staff has primary responsibility to identify 24 backfits, and this is an element that we are trying to 25 inculcate in staff practice, staff thinking.
Recognize 1
NGWBGRRY & COMPANY
G1 i
l 1
it when you have it, identify it, bring it up, tell your 2
management about it and identify that a regulatory analy" 3
sis should be initiated.
We are taking on ourselves the first responsibility to identify backfits.
4 5
Now, just to facilitate an understanding, before 6
we get too enmeshed in this, it's worth repeating -- the 7
working definition of a plant-specific backfit.
We 8
derived it from the backfit rule.
Now, Jim went over 9
this; perhaps this will be done in slightly different 10 words.
A little reinforcement, we feel, is good at this 11 point.
A staff position may be a backfit if it would 12 cause a change from already applicable regulatory staff 13 positions.
We'll get to that last phrase in a minute; 14 you'll see that in the rule itself, the very first para-15 graph of the rule, too:
A change from already applicable 16 regulatory staff positions.
17 Second, that staff position is a backfit, a pro-18 posed backfit, if it's a change and it meets the timing 19 constraints which are explained in the second item, firs:
20 identified to the licensee in writing after certain 21 licensing milestones.
For an operating reactor, your 22 licensing milestone is the license issuance and any 23 subsequent formal documents that later become part of 24 the licensing basis.
For operating reactor license 25 applications; that is, operating license applications in NGWBGRRY & COMPANY
62 1
review, that licensing milestone is six months before 2
docketing of that operating license application.
- And, 3
of course, for new applications coming along after the 4
rule, once they are awarded a CP, that becomes the 5
licensing basis; and changes subsequent to the CP issuance 6
will be proposed backfits.
7 Then, the standardized applications -- and that's a
simple enough, too.
The basis is design approval.
9 A minute to think about what is the meaning of 10 plant-specific, since that's what we're talking about 11 here-- only plant-specific backfit management.
We really 12 mean, primarily and for most of the time, unique to one 13 docket -- a single change proposed for a particular 14 docket number.
In practical application, however, it's 15 possible that it may be unique to more than one unit at 16 the same site, if the same change affects all units in 17 the same way.
A procedural change, for instance, that is 18 applicable to the same units, to all three units at a 19 site, we will consider that a plant-specific change.
20 But, to get back to the important definition and 21 important phrase here, " applicable regulatory staff 22 positions," if a proposed change or modification is 23 different from applicable regulatory staff position, thea 24 it is a backfit; then it may be a backfit, not until.
25 So what are those?
NGWBGRRY& COMPANY
63 1
Well, obviously, it's easy enough to say that the 2
positions which are applicable are those already a part 3
of the licensing basis of a licensee.
So what are 4
those?
We've divided them into three general categories 5
The legal requirements are quite obvious: regulations, 6
orders, licenses -- meaning license amendments --
7 conditions, tech-specs, those matters which are unques-8 tionably matters of a legally binding requirement.
9 Secondly, we have written commitments by the to licensee, FSAR -docketed correspondence, even LER's, 11 confirmatory letters of one kind or another, written 12 commitments officially issued by a licensee under an 13 officer of the company or over the signature of an 14 officer of the company.
15 Then there are NRC staff positions.
These are 16 generic; they're officially approved as applicable to 17 a specific licensee.
These may be -- these are, in 18 general -- positions that come out of CRGR review, regu-19 latory guides, standard review plans officially approved 20 as the generic position of the staff.
The standard 21 review plan, branch technical position, regulatory guide;,
22 generic letters, bulletins -
generic documents which the 23 licensee has committed to.
-- We have a question.
24 MR. FALLON:
25 Yes.
Merle Fallon, Newman and Holtzinger.
With NGWBGRRY & COMPANY
64 1
respect to these staff positions, it's perhaps a little 2
off track and I'm not taking advantage of this.
But 3
with respect to emergency planning and preparedness, NRC 4
has a memorandum of understanding with FEMA.
And FEMA 5
has a number of what they call guidance memoranda which a
they're constantly changing and updating and imposing 7
requirements.
Would consideration be given to that in a
the backfit process?
9 MR. COX:
10 We're responsigle to the NRC positions.
I think I 11 can answer it that way for you.
You don't answer to 12 FEMA directly.
Is that the answer to your question?
13 MR. FALLON:
14 Yes, but the NRC is supposed to review these FEMA 15 documents, and they do impose different kinds of require--
16 ments on licensees.
17 MR. COX:
18 When the NRC reviews such documents and takes a 19 position and embeds that position in some written docu-20 ment that is applicable to your plant, then you are 21 responsible for recognizing that as an NRC staff position 22 MR. FALLON:
23 Thank you.
24 MR. SNIEZEK:
25 Let me add a little bit to that.
If it is a FEMA NGV/BGRRY & COMPANY
65 1
document and addresses state and local governments, it 2
is not directly applicable to licensees, utilities.
As 3
I understand it, the NRC would not be involved in any 4
backfit process between the local government, the state 5
and the utility.
That is between you and the state, you 6
and the local government and you and FEMA.
We would not 7
be involved in that.
8 Brian, do you have anything to add to that?
8 MR. GRIMES:
10 I think that's a correct answer.
11 MR. COX:
12 Okay.
Let's go to your next view graph here on 13 identifying plant-specific backfits.
We've just run 14 over the definition.
Now, if there aren't any more is questions on that, we can move on to ideatifying plant-16 specific backfits.
Another question?
17 MR. MCDONALD:
18 Pat Mcdonald, Alabama Power.
Assuming that you 18 have made a generic backfit analysis and issued it from 20 the Commission and I look at it and say that the analysi s 21 that you performed does not fit my facility, do I then 22 follow the route for plant-specific backfit in trying to 23 resolve that?
24 MR. COX:
25 In general, when the staff treats a generic backfi t NGWBGRRY & COMPANY
66 1
issue and it goes through the staff's generic processes,
2 the CRGR review, CRGR recommendations, EDO approval and,
3 ultimately, Commission approval if that is necessary, as 4
a rule or some other appropriate Commission-approved s
matter, there is then no other responsibility on the e
part c.f that staff either during thE process or after to 7
do a plant-specific backfit analysis.
It would then be a
up to the licensee, an individual licensee, if you reall:r 9
felt you had a case such that the generic analysis done was totally inapplicable to your facility.
io, 11 MR. MCDONALD:
12 You said " totally."
13 MR. COX:
14 Well, by that, I mean, if you have a good case, 15 you want to make a reasoned argument that there is some-thing really different about your facility such that in 16 17 your own considered judgment you would want to appeal 18 this on that basis, you actually can do that.
In the 19 Manual Chapter, you will find -- I believe it's under 20
" Exceptions" -- that the EDO can consider an argument 21 that adequate analyses were not done that are applicable 22 to a particular facility and can grant some -- could 23 make some other decision on that basis.
24 MR. MCDONALD:
25 Thank you.
NGWBGRRY & COMPANY
67 1
MR. COX:
2 There is an out.
But, generally, when the staff 3
does its work, generically, it is going to look at dif-4 ferent classes of plants.
It will look at, for instance 5
BWR Mark II's or Westinghouse 3-Loop's and make decision s e
on backfitting generically that can be compartmented 7
into separate classes of plants.
It's possible that, 8
even after that work is done, you might feel that there 9
is a specific case to be made on a specific plant.
10 MR. SNIEZEK:
11 Tom, let me add a little bit to that.
What he jus 1.
12 said is exactly correct.
However, I want to make it 13 clear that it does not normally come to the EDO at that 14 time.
It would follow a normal plant-specific appeal 15 process, up that route, starting within the office that 16 imposed the staff position.
I should mention, also, that 17 if that generic process resulted in a rule, the plant-18 specific appeal process does not apply.
Once a rule is 19 issued, you would come in under the exemption process on l
20 the rule itself, not the appeal process for plant-l 21 specific backfitting.
22 MR. COX:
23 Okay.
I think perhaps we can now move to identi-24 fying plant-specific backfits.
As we mentioned earlier, 1
25 the NRC staff are those holding the primary responsibility i
NGWBGRRY& COMPANY l
68 1
to identify proposed backfits.
By this, we mean staff 2
at all levels, starting with the reviewer.
If there is 3
continuing dialogue that results from, perhaps, some 4
difficulty in deciding whether or not an issue is a back-5 fit, it may be necessary to raise the dialogue through 6
different management levels to get a resolution.
But at 7
some point, the staff should make its decision and let 8
the licensee know.
Let's note that, on the second item 9
there, when the NRC staff does identify a backfit, then it's incumbent on the staff to immediately proceed to to the regulatory analysis and the required determination 11 12 that must be made. based on that analysis before communi-13 cating the backfit to the licensee.
This does not mean 14 that there might not be some verbal dialogue across a 15 table where there is a communication of a potential back -
fit; but communicating a backfit and regulatory analysis 16 17 in accordance with the Chapter process means the written 18 backfit and the regulatory analysis going to the licen-19 see from an Office Director or Regional Administrator; 20 and it will say, "It's our position that you should do 21 this.
Here is a proposed backfit, and here is the regu-22 latory analysis to support it."
23 When the Office Director or Regional Administrator 24 does communicate the backfit in that way with the analy-25 sis, a copy will go to the EDO..
An NRC-identified NGWBGRRY& COMPANY
69 1
backfit will be issued by the Office of the Director or 2
Regional Administrator.
3 Now, a licensee can initiate a claim of backfit.
4 The claim should be written to the Office Director or 5
Regional Administrator who issued the position.
And, of 6
course, when we say " issued the position," I mean issued 7
the position without identifying it as a backfit.
The 8
licensee may claim that it was by writing to that issuing 9
officer with a copy to the EDO.
10 Paragraph five reit' ates what I said a few moments 11 ago.
When the staff det ines that a position claimed 12 to be a backfit is in fact a backfit, we will start the 13 regulatory process immediately.
If the staff determines 14 that the claimed backfit is not a backfit, the Office 15 Director or Regional Administrator simply documents the 16 basis for this decision and transmits it to the licensee.
17 You will get a letter saying, "Here's why we don' t think 18 it's a backfit." This basis is required to be forwarded 19 with the transmittal.
20 In case of a licensee claim of backfit, the Office 21 Director or Regional Administrator receiving this claim 22 will report to the EDO and inform the licensee within 23 three weeks of the receipt of claim.
Now, what is he 24 reporting?
He's simply reporting on the results of his 25 determination as to whether the claim is or is not a NGWBGRRY& COMPANY
9n 1
He will also give some particulars on his plan 2
for proceeding to resolve this issue with the licensee.
3 So it's not a totally resolved issue.
And in the case 4
that the officer agreed that it was a backfit, it 5
doesn' t mean that the regulatory analysis is all done 6
within three weeks.
All it means is that you're getting 7
a prompt reply to the licensee as to where the staff 8
stands on its determination as to whether or not the 9
backfit is in fact a backfit or not.
10 To continue, the staff-proposed position may be 11 found not to be a backfit for these reasons.
Either it's 12 a previously applicable regulatory position and would be 13 described under (r), or a Program Office Director may 14 determine that the modification is necessary to ensure 15 no undue risk.
In these cases, we're not going to do a 16 regulatory analysis.
But, as Jim described to you, there 17 is a documented evaluation that must be done by the 18 Director to support the action taken.
This is not a full-19 blown regulatory anslysis; it's merely support for the 20 staff position that we're either dealing with a previously 21 applicable position or we're dealing with a change that 22 must be put in place to ensure no undue risk at that plant.
23 Now, when all this takes place and the licensee 24 is informed, for example, that a claimed backfit really 25 is not a backfit, the licensee can stall appeal that NGWBGRRY & COMPANY
71 1
determination because, at this point, all we have is a 2
determination.
3 Now, those are the essential elements of identify-ing a backfit and what the staff does.
4 Let's try to go through just a few examples of what we're talking about 5
Let's look at Example number one there.
8 This one starts 7
with a licensee.
Of course, by this, I mean we have an 8
operating plant already.
It received a certain EQ approval, equipment qualification approval, on some g
10 electrical equipment in 1982.
I see a number of you 33 reaching for paper here.
This was a separate handout of 12 three pages stapled together.
The licensee receives an 13 EQ approval in 1982.
Later on, the licensee is offici-ally notified in February of '85 that staff wants an g
additional test of that particular piece of equipment.
15 What are some questions that you ask to try to determine 16 17 whether or not this is a backfit?
18 Is it a changed staff position?
It certainly is, Certain testing is accepted by the staff in '82.
Later ig the staff indicates in writing that it wants an 20 on, 21 additional test.
There is a change in the staff positio 1.
22 What's the timing?
Well, definitely af ter this 23 reactor was first licensed.
Is it a previously applicable position?
No; the 24 25 new position was not ever before in the licensing basis NGWBGRRY & COMPANY
=
72 1
of that plant, previously approved licensing basis for 2
1982.
3 Was the licensee directed to do this?
Yes, formally 4
made known to the licensee in February, 1985.
5 So what's the conclusion?
Well, this isn't meant 6
to be a trick question; but, as a matter of fact, the 7
new position was taken by the staff in February 1985, a
which is prior to May first, 1985, when this Chapter 051.l 9
was officially given to the staff to implement.
So, in to a theoretical sense, it does not qualify for 0514 consideration; but I have to tell you that I'm quite 11 a
certain that NRR would look at this in a process that 1:
13 was very similar to what you find in the Manual Chapter.
14 Take a look at the second example.
15 MR. CHESNUT:
16 So, Tom, that would be considered a backfit under 17 the old backfit rule.
Isn't that correct, since it was 18 a change in position since the plant was licensed and 19 was originally approved?
20 MR. COX:
21 Yes, if you want to really go back to the old 22 backfit rule, which nobody wanted to do for the 20 years 23 it was in force, that's true, theoretically.
That rule 24 addressed substantial changes required for public health 25 and safety after CP issuance; they would be backfits.
NGWBGRRY& COMPANY
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MR. CHESNUT:
2 More than theoretically.
It's a backfit?
3 MR. COX:
4 Yes, if you wanted to invoke that.
But that rule, 5
you know, now, since October of '85, has been supplanted 6
by a new rule.
So, if you hadn't already invoked that rule, you would now have to invoke the new one.
7 8
Here's an example, number two.
There was an inspection report in June 1984 -- again, an operating g
l P ant.
The inspection report explicitly approved the 10 licensee's procedure for design-change control; in fact, is the overall design-change control program.
And this 12 inspection report stated that the applicable standards 13 14 were met.
Now, we have another inspection report in September 1985 -- this one probably written by a dif-15 16 ferent inspector.
It states that a new staff position regarding adequacy of procedure was to be applied.
He 17 18 now wants certain additional material to be included in 19 the procedure.
It clearly wasn't there before.
20 Again, ask some questions:
Is it a changed staff 21 Position?
Yes.
It occurs after licensing on an operating l
22 P ant.
23 Is it a previously applicable position?
-- Because,
24 if it was, there would be no backfit -- No, this was not 25 a previously applicable position.
We had a clear and NGWBGRRY & COMPANY
74
)
1 explicit approval a little over a year before this; and,
2 now, we have essentially a new position requirement.
3 So, no; it's not a previously applicable position.
This 4
is something new.
5 Is a change to be imposed?
Yes; the inspection 6
report says we believe this new material should be added 7
to the procedure.
8 So the conclusion in this case is that it is a e
proposed backfit and should be handled under Chapter 0514.
1 10 Is there any question on that one?
11 (No response.)'
12 Okay.
Let's take the third example.
Here we have 13 a plant in operating license review.
The licensing 14 application was docketed in December 1981.
Now, the NRC is saying that positions on accumulator tank level and 15 16 pressure that exist in reg guide 1.97, revision two, 17 December 1980, should be met.
The licensee claims a 18 backfit under 50.49.
19 What are the questions to ask here?
Is it a changed 20 staff position?
No, because this position was in place 21 with revision two of 1.D7 as of December 1980, well 22 before the operating license was docketed, more than six 23 months before it was docketed.
So that position was a 24 part of the basis on which the staff began its review of 25 this operating license application.
And that's clear by NGWBGRRY& COMPANY
75 1
the timing; that's your next question -- before OL 2
docketing.
3 Is it a previously applicable position?
Yes, for 4
those reasons.
5 Is a change to be imposed?
Yes; we're saying that 6
is our generic staff position; we believe you should do 7
it this way.
Of course, you have the option of proposing a
a different way; but it is our position you should do it 9
like this.
10 So the conclusion is this one is not a proposed it backfit.
Question?
12 MR. TERRILL:
13 Yes.
Dennis Terrill, TVA.
Let me take this examp..e 14 one step further.
Suppose we had in the docket an 15 exemption to a previously approved regulatory position 16 and, because the staff hasn't acted on it in several 17 years, we had taken the risk upon ourselves and imple-18 mented the exemption the way we proposed it.
If, some-19 where down the line, the staff, with the tacit under-20 standing that it was acceptable, reverses that decision, 21 is that a backfit?
22 MR. COX:
L; 23 You have an exemption request on file with the 24 staff, and it's been there for years?
25 MR. TERRILL:
26 Yes.
NGWBGRRY & COMPANY
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MR. COX:
2 Assuming that acceptance of that position would no4:
3 require an explicit difference from what the rule states 4
that it really would just be a change in interpretation, 5
which is your normal staff documents, an SRP or reg 6
guide, you should, under the tacit-acceptance principle, 7
have a valid position in having gone ahead and done that 8
But, if the exemption involves in any way a change from 9
what is explicitly in the rule, something that should be to done, you may be in trouble because you must comply with rules as 'they are explicitly read.
The staff interpre-11 12 tation is another matter.
13 Bob, do you want to say anything to that?
14 MR. BERNERO:
15 No.
I think you've got it.
If there is a request 16 4
for exemption that's before the Commission for a very 17 long time, that in itself is a flaw.
I'm not sure that 18 that makes it a backfit.
It's still an exception under 19 the rule.
But that's an administrative flaw, a grave 20 error.
That shouldn't be.
21 MR. SHIEZEK:
22 I'd like to add to that -- I agree with Bob.
If 23 it's an exemption request from a rule, you must abide by 24 the rule until your exemption request is approved.
If 25 it's saying you don't want to abide by a staff position 26 in the reg guide or the standard review plan, you propose NGWBGRRY& COMPANY
77 1
an alternative approach and you don't hear back from the 2
staff, then the staff forcing you years later to do wha t 3
was in the original staff position may be considered a 4
5 MR. CESARE:
6 Guy Cesare, Mississippi Power and Light.
In 7
Example number one, the new staff position did not quali fy 8
because the position was taken prior to May one.
Does 9
the new position have to be taken and clearly applicable 10 to the plant, or can it be a later revision, say, of a 11 reg guide or an SRE Chapter?
For example, we have taken positions and were licensed in 1982 on a given selection 12 13 of revisions to reg guides.
And, certainly, there are 14 later revisions.
Does the fact that those revisions are 15 out -- are they not now subject to backfit if they were 16 invoked on the plant?
17 MR. COX:
18 If lat.er revisions came out and staff wan ed to 19 invoke those on the plant, those would be backfits.
If 20 your licensing basis was set in 1982, then later changes 21 to that licensing basis would be proposed backfits.
22 MR. CESARE:
23 So the new staff position -- it has to be applied 24 specifically to that plant, my plant?
25 MR. COX:
a.
' ' i. ' c7 '
r'~
i:
26 That's the process we're talking about here -- is 1
NGWBGRRY& COMPANY l
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)
when your particular plant is directed to make a change I
2 to its licensing basis.
I'm assuming we're not talking 3
about a generic requirement here.
4 MR. CESARE:
5 Thank you.
6 MR. ZIMMERMAN:
Sherwood Zimmerman, Carolina Power and Light.
7 On a
this particular example you have up on the slide -- and maybe this has been asked in a different way -- if anoth a
er to applicant had the exact same situation and the staff published a safety evaluation allowing that situation, 11 12 would that then become, also, an applicable staff position?
13 MR. COX:
14 Not necessarily.
If, for some other applicant, 15 there was a plant-specific position taken, that does not 16 mean that you can immediately jump in there and claim 17 that as the staff position.
18 MR. ZIMMERMAN:
to Even though, theoretically, it's the exact same 20 situation?
21 MR. COX:
22 You would have to demonstrate that to your staff 23 reviewing management and make an appropriate argument.
24 MR. SNIEZEK:
4 25 Tom, let me emphasize something here.
The staff NGWBGRRY & COMPANY
79 1
position is generically expressed in the standard review 2
plan, reg guides, branch technical positions, et cetera.
3 A position that it takes with a specific licensee is 4
only specifically applicable to that licensee, and it 5
cannot be used for or against another licensee.
6 MR. ZIMMERMAN:
7 Second question, on reg guide positions in general 8
Wouldn't it be true that the applicable staff position 9
is that either the reg guide or another way of meeting that requirement is a staff position?
In other words, 10 is it only the reg guide position?
11 12 MR. COX:
13 The staff's generic position is the one in the 14 staff-approved generic document.
If there is a differen :
position approved on a plant-sepcific basis for your 15 16 plant, then that becomes the licensing basis for your 17 plant.
But the only staff generic position is the one in 18 the staff generic document.
19 Okay.
If there aren't any other questions on 20 those examples, we'll move from discussing the identifi-21 cation of backfits --
22 MR. GRACE:
23 Tom, could I make a general comment?
24 MR. COX:
25 Certainly.
NGWBGRRY & COMPANY
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MR. GRACE:
2 Each of the speakers has stressed the need for us 3
to work cooperatively and constructively together in a 4
professional manner and, hopefully, hear each other out, 5
understand each other and reach a meeting of the minds 8
before we get involved in this detailed process.
I thinJt this presentation serves very well to help us identify 7
a what is a backfit, and the examples bring it out very e
clearly.
I'm afraid it may be implied -- and I don't i
think it's intended -- that we anticipate opposition and 10
~
polarization a't the very outset, necessitating long-11 winded analyses and arguments ad infinitum on these 12 13 various issues.
I would hope -- and it may sound naive 14
-- that, when a new suggestion comes up, from whatever 15 source, that, oftentimes, the licensee will say, " Hey, 16 that's a good idea; let's implement it" without getting involved in the detailed process -- because, let's face 17 18 it, folks, some of these issues will not lend themselves 19 to quantitative analysis.
I think, oftentimes, we kid 20 ourselves into thinking that we can come up with quanti-21 tative results in areas that just defy that kind of 22 analysis.
So some judgments, some subjective observa-23 tions, may come into play.
And where people are deter-mined to werk cooperatively together and reach a meeting 24 25 t
NGWBGRRY& COMPANY l
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81 1
of the minds, I think that's more likely to happen.
2 MR. SNIEZEK:
3 I think Nelson has made a good point.
But I want 4
to make sure everyone understands.
The backfit analysis 5
that is done does not have to be a quantitative analysis 6
it can be purely a qualitative analysis or qualitative 7
to the extent that quantitative analysis doesn't enter 8
in.
So there is no implication that you have to have a 9
PRA in order to do a backfit analysis.
10 MR. COX:
11 Okay.
Let's move to the regulatory analysis now 12 and speak a little bit about what it is the staff intend: s 13 to do.
This is Section 043 in your Manual Chapter.
The 14 regulatory analysis -- Having an idsntified backfit, the 15 regulatory analysis will be initiated for the backfit 16 that's either identified by the staff or one claimed 17 by a licensee. and subsequently agreed on by the staff 18 that it was a backfit.
So the staff starts its regula-18 tory analysis.
This can be, at the very beginning, a 20 fairly rough scoping analysis in which they may look at 21 the possible reduction in off-site risk and roughly how 22 much it will cost.
And it's at this point that we fully 23 expect this dialogue to be continuing between the in-24 spectors and the inspected.
In this period, the analysia 25 could be terminated by the staff if, at any point, what NGWBGRRY & COMPANY 1
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82 1
is done supports dropping the issue.
At this point, all the parties would be notified; and the disposition of 2
the issue would be entered in our plant-specific backfi 3
t 4
system.
But, if the analysis continues to show' that the 5
issue is worth pursuing, it may go to completion; and th e appropriate Office Director or Regional Administrator 6
would make the determination that in fact substantial 7
additional overall protection is possible and that the e
indirect and direct cost of this protection or improveme g
at jo in safety are justified.
With this determination, which must be made before 33 12 proposing the backfit, that backfit would then be communi-13 cated, along with the regulatory analysis that was done 14 by the staff, to the licensee.
I can't emphasize enough 15 though -- And perhaps, again, it's very possible that that analysis that is done would be done with some input 16 17 from the affected licensee.
At any rate, the Office Director or Administrator will make that determination 18 is and forward a copy of all these documents to the EDO 20 prior to transmitting to the licensee.
Again, that's essentially just a courtesy copy to keep the EDO in-21 22 formed.
And, as Jim has hinted here several times, you aren't going to see, necessarily, a 50-page pack of 23 24 paper here that is a regulatory analysis.
This could be 25 done in a few pages.
And it may be quantitative, if NGWBGRRY & COMPANY
o 83 1
there are quantitative data available; and it may be 2
qualitative, in daat event.
A typical example of where 3
you may be able to do something quantitative is for those 4
plants that have a plant-specific PRA.
5 Now, to impose the backfit, the Office Director or 6
Regional Administrator must make that finding to move 7
forward and impose it: substantial increase in protection, 8
direct and indirect costs justified.
9 What's in the regulatory analysis?
What is really to in our process, as compared to what you see in the nine 11 elements you see in the backfit rule that Jim Sniezek 12 went through?
Well, there are 13 elements in the Chapter 13 0514 analysis.
Why?
Chapter 0514 drops number eight 14 in the rule analysis because it's generic, having to do 15 with variations in the types and age of the plants.
16 Obviously, if we're talking about a plant-specific, one 17 licensee, that is meaningless.
A lot of other elements 18 are added to our analysis.
Jim covered some of them.
19 Qualitative factors including operational trends, events,
20 SALP reviews or similar performance reports, perhaps 21 LER's -- We want the staff to consider other offices 22 than the one proposing the backfit and consider what 23 might be necessary in the way of interoffice coordination 24 to actually put this backfit in place and manage that 25 change in the plant from the standpoint of inspection NGWBGRRY & COMPANY
o RA 1
and enforcement over the remaining life of the plan.
2 We want them to consider the basis for the schedule for 1
3 implementation.
Some plants already have integrated 4
schedules.
We will certainly work out with each licens ee 5
what the best place for implementing a particular issue 6
would be in their own plant-modification schedule.
7 Our staff must consider our own schedule for staff 8
actions, what must be done on a particular issue and the 9
importance of the issue relative to other ongoing safety -
10 related work in the facility.
11 But, getting really to the heart of it, let me 12 emphasize again in the next few graphs that the primary 13 focus of a regulatory analysis will be on the evaluation 14 of four items:
effect on public risk -- and that should 15 be a reduction in public risk.
There will be an 16 expected value --even if qualitative, there will be an 17 expected value -
of the risk that would be averted if 18 this improvement were put in place.
We don't look at 19 that totally in isolation, though; and you must also 20 consider whether the proposed change will have an effect 21 on occupational exposure -- not just to put the change in 22 place, but to maintain it over the remaining life of the 23 plant.
Those items, A and B, are balanced by the instal-24 lation and continuing costs, including down time for 25 construction delay.
And lastly, NRC costs, which, for NGWBGRRY & COMPANY
85 1
many issues, are far less than the industry costs; but, 2
nevertheless, in some cases, may be significant.
That's 3
the primary focus of our regulatory analysis.
4 Now, in the next few graphs -- I hope not to spend 5
too much time on this.
But you can see here some of the 6
documents that are available to the staff and the indus-7 try individual licensees for getting some insights into 8
what may be done in regulatory analysis.
The first of 9
those is the EDO-level Directive to the Staff of a 10 couple of years ago, stating that regulatory analyses 11 will be done for certain proposed requirements.
And 12 those are most proposed requirements.
The second docu-13 ment there is a handbook which really is a workbook.
It 14 goes through many of the attributes of a cost-benefit 15 analysis and explains how to get at quantitative values 16 where appropriate starting data is available.
The last 17 document is essentially what it says there; is has many 18 factors for actually evaluating the engineering and 19 construction costs within nuclear power plants.
20 Now, to get to the appeal process, which, of 21 course, follows after identification of a backfit, 22 completion of regulatory analysis and forwarding the 23 analysis and the backfit to a licensee.
The licensee at 24 that point can implement or appeal, and now we're talking 25 about what the Chapter says about the appeal process.
NGWBGRRY & COMPANY
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There are in there essentially two types. -- And let me 2
point out that this is Section 044 in the 0514 Chapter.
3 There are two types: A, to reverse a denial of a licensee 4
claim; and, secondly, in the event that the staff has 5
identified a backfit and proposed one, the licensee may 6
want to appeal to modify or withdraw that staff-proposed 7
These are handled in slightly different ways.
8 First, looking at the appeal to reverse a denial, your 9
appeal should be addressed to the Director of the Program 10 Office having responsibility for that particular propose d 11 position, with a copy to the EDO.
This is a simple 12 letter stating why you believe that you have a reasonable 13 position to appeal.
The appeal should be based on the 1-4 NRC evaluation that came to you in response to your ini-15 tial claim.
As you remember, there was an NRC evaluation 16 of why the claim was denied, if it was.
That NRC eval-17 uation is not a regulatory analysis; it is simply a 18 statement by the office as to why they felt that that 19 claim of backfit was not really a proposed backfit.
You 20 should put in any new or additional information bearing 21 on that determination that was made by the NRC.
The 22 appeal will be decided by the Program Office Director if 23 it's not resolved at a lower level.
Now, I mention that 24 only because the detailed office procedures for conducting 25 this process may have, as they did a year ago, perhaps NGWBGRRY& COMPANY
6 n,
I two levels of appeal within a regional office; for 2
instance, at Divisional Director prior to getting to the 3
Regional Director.
4 The second type of appeal, to modify or withdraw a 5
staff-proposed backfit:
This should be addressed to the 6
Office Director or Regional Administrator who issued the 7
backfit, with a copy to the EDO.
This appeal should a
focus on the rationale in the regulatory analysis that 9
you received with the proposed backfit.
You may have additional information that wasn't considered by the 10 staff, or you may feel that you are able to point out a 11 12 deficiency in the analysis.
This appeal will be decided by the Program Office Director, if not resolved at a lowe 13 r
14 level within that Program Office.
15 For both of these types, certain process controls 16 obtain; and they are these:
The Office Director or the 17 Regional Administrator will report to the EDO within 18 three weeks after receiving the appeal concerning the 19 plan for resolving the appeal.
At this point, the 20 licensee will be informed; and, if there are changes as 21 the appeal progresses, the licensee will be informed 22 again.
The decision by the Office Director may be 23 appealed to the EDO unless resolution is already achieved.
24 A claim of backfit and a subsequent denial that is upheld 25 is not to go further in the context of this process.
NGWBGRRY& COMPANY
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There are other remedies available.
Summaries of all 2
appeal meetings will be provided to the licensee and 3
placed in the PDR's.
We're trying to make this an open 4
process.
Subsequent to that appeal, anybody can read
- 5 about what's going on.
Now, that's all I'm-going to.say 6
about the appeal process.
Before moving into implementa-7 tion, we might pause a moment for questions.
8 MR. CHESNUT:
9 Steve Chesnut, Georgia Power.
Tom, have any of the 10 cost-benefit documents that you've handled on that slide 11
-- have they been approved by the Commission, or are they 12 the only way you do a cost-benefit analysis, or can the 13 licensee or applicant come in and appeal based on the 14 cost-benefit balance procedure that you used?
15 MR. COX:
16 I think the question is, "Can the licensee appeal 17 on the basis that we used certain documents or didn't 18 use certain documenfs in conducting a cost-benefit 19 analysis?"
20 MR. CHESNUT:
i 21 Well, the manner in which you do a cost-benefit 22 analysis affects the finding for the backfit ruir which 23 says that the cost must be justified in view of the 24 benefits from the improvements.
So, is that a me.tter 25 for discussion -- the procedures used for conducting NGWBGRRY& COMPANY
s i
89 1
cost-benefit analysis -- or are'the procedures that are 2
being used in those analyses still evolving?
3 MR. COX:
4 You can make an appeal on any basis the licensee 5
feels he can make a case.
The staff will consider an 6
appeal.
There are not specific approvals of particular 7
documents that must be used in conducting a cost-a bendfit analysis.
The EDO's general guidance in the 9
first document that I've referenced there, NUREG 0058 --
10 at the EDO level, it suggests that a document such as th e 11 workbook NUREG 3568 may be used.
It does not require its use, and the Commission has not endorsed and required th 12 e
13 use of any particular documents.
So, at some time, it 14 may happen.
We don't know what may come out of safety-goal policy or other pending rule makings; but, at this 15 16 time, there is no structure that is required for cost-17 benefit analysis.
18 Okay.
Implementation:
What happens here when all 19 is said and done?
The first opportunity for implementa-20 tion, of course, comes when the staff first issues the 21 backfit and regulatory analysis.
The licensee at this 22 point can decide either to implement or appeal.
If they 23 appeal and a subsequent final decision is made to backfiu 24 again, the licensee could elect to implement the staff 25 decision.
But if the appeal is exhausted and the I
NGWBGRRY& COMPANY
O 90 licensee does not elect to implement, the backfit -- the 1
proposed backfit -- may be imposed by order of an Offic 2
e 3
Implementation Will normally be accomplished on a negotiated schedule.
4 This integrated schedule process that we're familiar with may be used.
5 6
The staff position may be imposed without a regu-latory analysis if the position is not a backfit or if d 7
ie backfit is necessary to assure no undue risk.
a The EDO is e
notified, dnd the documented evaluation, which covers objectives and reasons, must be prepared.
This evaluation 10 would normally come out with the action taken by the NRC ij 12 Let me repeat.
This is not a regulatory analysis; it is 13 not a backfit analysis; it is simply stating objectives 14 and reasons.
If the Program OD believes that immediatel: r effective action is necessary in an undue-risk situation, 15 the evaluation can even follow the imposition.
16 If an 17 order is written, it's incumbent on the licensee to obey 18 the order, to put it into effect.
Is However, under implementation -- and you've heard this before -- our actions in progress to either promul-20 21 gate a backfit, to conduct the appeal of that proposed 22 backfit, will not interrupt cn delay construction, oper-t ations or licensing-- again, unless it's an immediately 23 24 hffectife o' ~rdeE based bn a no-undue-rksk situ'ation. T 25 it for implementation.
Fairly direct.
l I
{
i l
NGWBGRRY& COMPANY l
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m e
e d
91 1
Now we'll just review in a few graphs here what s one 2
of the concepts are that we think about ir. determining 3
whether a staff action is a backfit.
4 We have a question.
5 MR. DOMBY:
6 Art Domby, Georgia Power.
You were centering on 7
the implementation by the staff.
And I'm wondering when in the context of an enforcement proceeding, a licensee e
claims that a previously applicable staff position has e
changed, what internal procedures or considerations may to be put into effect within the Commission for assuring 11 that the interrelationship is known about and dealt with 12 13 MR. COX:
14 Let me give you a kind of generalized answer.
A claim of backfit can be put in by a licensec if you 15 believe that a previously applicable position is being 16 17 changed.
That's an appropriate time to make a claim of 18 backfit.
I'll defer to Jim here to try answering your 1e question as it applies to an enforcement proceeding.
20 MR. SNIEZEK:
21 I would assume the enforcement proceeding is not 22 in the hearing context at this time, but it's more in 23 the discussion process, in an enforcement conference, 24 because the hearing process is very clearly fixed in our 25 regulations -- the rights of all parties.
Backfitting l
NGWBGRRY& COMPANY
o 92 1
does apply in enforcement contexts.
If you are being 2
required by the staff to do a specific thing, take a 3
specific action that is not explicitly required by our 4
legal requirements or a previous licensee commitment, 5
that would be a backfit.
6 However, as Dr. Grace had mentioned before, if you have violated a requirement and you got a notice of vio-7 lation af ter having an enforcement conference, there's a
9 a give-and-take across-the-table discussion about it.
10 Sometimes, the utility asks for advice; sometimes, they ask the NRC what they think is appropriate remedial 11 12 action.
And that discussion back and forth is not a 13 backfit.
If you decide, yes, it's something you think is worthwhile doing and you want to go out and do it --
14 15 you truly volunteer to do it, truly volunteer to do it 16
-- it's not a backfit.
If the staff says, "By golly, 17 you have to do this, or we're not going to be satisfied,"
18 and what they're requiring you to do is not a previously 19 applicable staff position, applicable to your facility, 20 that could be construed as a backfit unless you're 21 entering into the no-undue-risk situation, which is a 22 judgment call.
23 l MR. DOMBY:
24 Let's take a more specific example.
Suppose a 25 licensee commits to a specific reg guide and then, in NGWBERRY & COMPANY
o 93 I
the context of an inspection, an inspector does not i
believe that the licensee has met the commitment, and 3
the licensee believes that the inspector is interpreting 4
the reg guide in a new manner than it has previously been 5
applied or interpreted by the staff.
A notice of 6
violation is issued.
In the context of dealing with tha n 7
notice of violation, the licensee believes there's been e
a change in staff position; i.e., the inspector is giving 9
a new interpretation to a reg guide at either the regional 10 level or at other levels within the NRC.
Is there going I
11 to be any interchange of information with regard to 12 whether or not this is a backfit?
It seems to me you 13 could end up inconsistent in the enforcement conference 1-4 with an overall application of the reg guide.
And 15 there's an interrelationship there.
16 MR. SNIEZEK:
17 I think the existing staff process for exchange of 18 information to the staff will exist and will be used.
19 There are no new processes that will be established.
20 There is no question in my mind that, occasionally, 21 there will be different interpretations by the staff the 22 same way there are different interpretations within the 23 industry and within an individual utility.
You cannot 24 prevent that.
But that is one of the reasons why you 26 have the enforcement conference, when senior managers of NGWBGRRY f, COMPANY
94 1
NRC and the utility are both involved.
And I believe 2
that most of those type situations can be resolved to 3
everyone's benefit.
4 MR. COX:
5 Another question.
6 MR. STEVENS:
7 Rod Stevens, Florida Power and Light.
Exploring your implementation slide position four a little earlier,
a I asked the question if the regulations require periodic g
10 updating.
And I refer to the in-service inspection reg-11 ulations.
It says that the staff position may be imposed 12 without regulatory analysis if the position is not a 13 backfit.
And I think we established that, where the 14 regulations require upgrade or updating, then that falls 15 out of the backfit realm.
Is that not correct?
I 16 MR. COX:
17 Correct.
18 MR. STEVENS:
19 But it says, in these cases, EDO is notified; and 20 a documented evaluation stating objectives and reasons 21 must be prepared.
Evaluation must normally issue with 22 the action taken by NRC.
Thinking of a specific example 23 in this case which occurred fairly recently, I'm not 24 aware that EDO was notified; and I'm just wondering, if 25 it isn't considered under the backfit rule; that is, it'a NGWBGRRY & COMPANY
3 95 1
1 clearly not a backfit -- we established that earlier --
4 2
then does the licensee or can the licensee expect that 3
EDO is notified?
Can we expect documented evaluations 4
stating objectives and reasons?
Many times, the addi-5 tional requirements specify that current staff position 6
requires this; and, not only that, it shall be implemented 7
by some time.
So that kind of avoids the negotiation of 8
appropriate implementation schedules.
I 9
The second part of my question is, in these cases where there are non-negotiated implementation schedules, to 11 can the licensee appeal under some manner, since it's 12 clearly not a backfit -- we established that.
But is 13 there some appeal process; and, during that appeal, is 14 the implementation schedule deferred until resolution of j
15 the appeal?
18 MR. COX:
j
]
17 I think the answer to your last question would be, i
18 essentially, yes, in that the' implementation schedule'is i
19 to be negotiated.
But, eventually, some negotiated 20 j
settlement has to be reached at some level of management -
21 and that just has to be accomplished.
There isn't a 22 formal appeal set up for appealing an implementation I
23 schedule.
l 24 The early part of your question -- We're really 25 here to discuss a policy and procedures for implementing i
NGWBGRRY& COMPANY
s 96 1
this.
We can't, at this stage, be apologists for any-thing that's happening in a particular specific action 2
3 because we can't take the time here to discuss the 4
details of a plant-specific situation.
Basically, though, you can expect -- And I think your question was, 5
"What can we expect the conduct of this process to be?"
e l
7 You can expect from the staff what you see and hear here today as to the conduct of the backfit management under 8
g this Chapter.
You know, if it says that certain notifi-cations are supposed to be mad,e, those are supposed to to 11 be made.
And you really need to work with the, perhaps, Regional or Program Office management as necessary to 12 make sure that these steps are taken in a given case.
13 14 MR. GRACE:
15 Yeah.
Let us discuss that specific example after 16 the meeting, sometime, because we'd like to understand 17 better your concela and respond to it.
18 MR. SNIEZEK:
19 I think he's asked a couple of questions that can be answered very straightforwardly right now.
Bob 20 21 Bernero, I'd ask you to talk about the scheduling issue.
I'd like to address whether or not the EDO is notified.
22 23 Very clearly, the rule 50,55 (a), generic, the EDO is aware up front.that it's been passed, the analysis 24 25 has been done, it's gone through the CRGR process; and NGWBGRRY & COMPANY
97 he knows there is no plant-specific backfit analysis th 1
a<.
2 will be performed.
So the EDO is aware of all of those 3
types of instances.
He doesn't get informed that you are negotiating a specific schedule on an individual-4 5
utility basis.
He knows that's going on, so he's not 6
involved in that process.
He is involved in that generi c 7
end of the process, not the plant-specific.
Bob, can you address the scheduling issue?
g g
MR. BERNERO:
g3 Yes.
As far as the schedule for implementation, I would say it's a general practice now that we try to sit n
down with each licensee, since the majority of the plant 12 a
13 aren't operating, and have an integrated approach to 14 setting priority for actions.
And those that are more beneficial economically, administratively or in safety g,
or whatever the priority basis is -- those that are more 16 beneficial get preferential treatment in scheduling.
17 And it's not uncommon now to renegotiate things on a 10 schedule because a supplier went out of busin'ss or some Ig 20 such thing that often comes up.
21 But when you do a backfit analysis, you establish n
a justification for doing the thing.
And you thereby also establish a safety priority for it, whether it's a 23 24 very, very important one or it's a justified but not l
25 very urgent one.
And that can readily be worked into the r
l l
NGWBGRRY & COMPANY
9'8 1
integrated schedule for the project.
I think that's 2
getting to be a fairly common practice.
3 MR. COX:
4 Any other questions?
5 (No response.)
6 Let's go, then, to the last few view graphs, where i
7 We'll run through some summarized application of some of a
the principles we've been talking about.
We need to 9
think about these questions:
Is the position a previously to applicable staff position?
What's the timing of that position relative to your licensing basis and the regu-11 12 latory milestones of that basis?
Has the licensee really volunteered to take this action? -- Because, if the staff 13 14 is not im,' sing the change, it's not a backfit.
Actions 15 proposed by the licensee resulting from the dialogue which we've been talking about over and over again this 16 17 morning are not backfits.
If proposed by the licensee, i
18 it is not a backfit.
19 Would the position cause the licensee to change 20 design, construction or operation?
Change from a 21 previously applicable licensee basis is all-important.
22 Is the action directing, telling, coercing or merely 23 suggesting or asking the licensee to consider a staff-24 proposed action?
This, again, helps to make the differeric e 25 between or to discern the difference between imposition NGVBGRRY& COMPANY
99 I
and something that the licensee sees is important to do 2
and should be done and is willing to do.
Is the licensee 3
in explicit non-compliance with a rule, regulation, 4
license condition, tech-spec? -- Because that is a 5
rather black and white crossover point.
It is not a 6
backfit to require those things to be met.
Written 7
commitments to the NRC are just that.
They are expected 8
to be met.
Insistence that a licensee meet them is not 9
a backfit, to Looking at the inspection process, inspection by 11 itself is an activity that is not a backfit.
Inspectors 12 make findings, simply assess the current condition of 13 safety at a facility.
Inspection is not a backfit.
14 Identification of deficiencies in discussions with 15 licensees are not backfits; this is part of the assess-16 ment process and the dialogue of conveying the findings 17 to the licensees.
A licensee agreement to take actions 18 in response to findings is not a backfit, provided the 19 licensee is not given an ultimatum.
I think we mentionec 20 that.
As long as the inspection force is not saying, 21 "You must do A or B,"
it is not a backfit.
Now, if the 22 staff indicates that a certain action is the only way 23 for the staff to be satisfied, that action is a backfit.
24 Look at the enforcement process here, and perhaps 25 it will reinforce what Jim just stated in response to NGWBGRRY & COMPANY
e 100 I
a question. " Enforcement of requirements and written 2
commitments not backfits."
requesting corrective action is not a backfit.
Commit-4 ments in response to a notice of violation is not a 5
backfit because they are commitments voluntarily made.
6 Discussions during conferences and responses to requests 7
for advice are not backfits; that's part of the ongoing 8
dialogue.
But, at the end there, you see that a state-9 ment to the licensee directing a specific action is a 10 backfit.
11 Look at it in the licensing context, particularly 12 the use of the Standard Review Plan.
We all understand that the Standard Review Plan is the management-approved 13 14 scope and depth of review, to give our staff reasonable 15 assurance that you are satisfying the NRC regulations.
16 The regulations must be satisfied.
Our staff documents 17 below the level of regulations are intended to provide 18 ways in which licensees and applicants may satisfy the 19 regulations.
Using the current Standard Review Plan in 20 an operating license review is not a ba '
t if that 21 Standard Review Plan or that Standard Review Plan section 22 was effective six months prior to the start of that 23 OL review; that is, six months prior to docketing.
24 Using acceptance criteria more stringent than or in 25 addition to the criteria is a backfit.
I 2
NGWBGRRY & COMPANY
101 i
A couple more associated with licensing.
Staff discussions regarding the merits of actions beyond SRP 2
criteria are not backfits.
This may be a parallel to 3
4 an inspection-exit interview where the inspector may ask you to consider doing some things that.may be beyond the current licensing basis.
Asking that these things 6
t be considered or discussion of the merits of doing some-4 7
thing beyond the current licensing basis is not a back-8 fit unless that staff person leaves you with no reason-able alternative but to implement this change.
Asking questions to verify conformance with the Standard Review Plan or any other generic document likc FSAR's, regula-tions and tech-specs, asking questions to verify conformance with those things is not a backfit.
And you g
see the parallel to that in the 54 (f) information request, where it says as long as we're asking for infor--
mation to verify conformance or compliance with a curren:
37 basis, it's not a backfit.
It does not require special 18 evaluation.
Finally, application of current criteria to 9,
an operating plant generally is a backfit unless that g
specific Standard Review Plan section was specifically 21 approved for implementation or application to your plant g
Summarizing, backfitting is absolutely an expected 23 staff activity.
We can' t avoid it.
It's necessary in a 24 responsible regulatory process.
We know we are going to 25 NGWBGRRY& COMPANY
102 1
from time to time, find that there are improvements that 2
will substantially add to overall protection.
We simply 3
must do this in a controlled way managed by the NRC with 4
check points for the NRC and the industry and even the 5
public.
6 I'll take a question right here.
Don Edwards?
l 7
MR. EDWARDS:
s Tom, you stated several times that a demand to take 9
a specific action is a backfit.
Suppose the elispute is 10 not over the specific action, but rather that action 11 need be taken at all.
Presumably, the licensee would 12
- say, "I'm adequately doing whatever it is"; and the staff 13 would say, "No, you must do something here."
In a very 14 general way, isn't that also falling into this type of 15 discussion?
16 MR. COX:
17 If the something is undefined, but';it's. clearly to 18 be in addition to the current licensing basis, that may 19 turn out to be a backfit.
20 The last point made here is that backfitting 21 concepts really are fairly straightforward.
Of course, 22 there are some c,m.stions in your mind; and we don't 23 propose that we have every answer in every case.
But th:.s i
24 is where informed managers will work matters out in a 25 dialogue; that's been mentioned by several of our NGWBGRRY & COMPANY
a 103 1
principal speakers here today.
There's no substitute for active, spirited, respon$ible dialogue in the NRC 2
3 relationship.
We want to promote that, not stifle it.
4 But the basic concepts are these:
You must ask, 5
"Is the position a previously applicable staff position?
6 What's the status of your plant in the regulatory process; 7
that is, what is your licensing basis?" A very important a
collection of information: the licensing basis for the g
plant must be known at all times.
"Is the licensee to being coerced?"
Those new positions which the staff 11 seeks to impose are what are backfits, not those that 12 the licensee sees are reasonable, prudent and, in their 13 mind, necessary to do and which they then volunteer to 14 do.
"Is compliance or conformance involved?" -- Straigh u-15 forward, explicit compliance with existing regulations 16 or other legally binding requirements.
Those are some 17 general things to consider.
18 Lastly, just keep in mind the process itself as to Ig what it is.
What are we trying to do?
We're trying 20 to be responsible in identifying proposed issues as 21 backfits and then determining whether or not they provide 22 substantial additional protection for which the indirect 23 and direct costs are justified.
If we propose those 24 things, we then will do the regulatory analysis which 25 receives management approval; and, hopefully, we will al._
NGWBGRRY & COMPANY
e 104 1
work toward that important part of this process.
We 2
want management approval so that appropriate levels of 3
NRC and industry management are responsible for what 4
goes on in the process and for what ultimately becomes 5
a requirement in the licensing basis.
These will be 6
transmitted to the licensee, which means that the licen-7 see has the opportunity to review an NRC-documented 8
basis for what it proposes to impose.
The licensee has g
an opportunity to implement, on its own volition, be-10 cause it sees that something is the responsible and i,
prudent thing to do; or it may appeal, when that is 12 apprcpriate.
13 Then there's the final disposition.
Again, keep 34 in mind that you have an opportunity at the end to 15 implement something freely; or the end of the process 16 could be or may be that the proposed backfit could be 17 subject to imposition by order of the appropriate 18 Office Director.
Ig That's the end of my prepared remarks.
Are there 20 any other questions?
21 MR. TUNSTILL:
22 I'm Jack Tunstill with Florida Power Corporation.
23 I have a question regarding
-- in the beginning, you 24 talked about the Regional offices and the individual 25 Directors having procedures; and you also said one NGWBGRRY & COMPANY
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reason we're here is to know how you're going to conduct 2
business.
Are there any plans to let Jicensees have 3
access to the Regional procedures or the Directors'?
I 4
realize, on the Directors', there's quite a bit of them; 5
but maybe on the Regional level, Dr. Grace, for Region 6
Two, for example --
7 MR. SNIEZEK:
a I made a commitment at the workshop in Region One g
that regional office procedures would be sent by the to regional office to each of the utilities in their Region is and that the headquarters' new office procedures would 12 be placed in the PDR.
13 MR. TUNSTILL:
14 And in the future, when modifications are made to 15 those, will they also be --
16 MR. SNIEZEK:
17 They'll be made available.
18 MR. TUNSTILL:
19 Thank you, sir.
20 MR. COX:
21 Any other' questions?
22 (No response.)
23 If not, then I'll turn it back over to Jim Sniezek 24 MR. SNIEZEK:
l 25 I want to say that, early on in the presentation i
~
NGWBGRRY & COMPANY
=_
106 I
while I was speaking, I made a mistake in one of my 2
answers.
I forget who it was who asked me the question 3
whether backfitting applied to Part 55; and I said no.
4 The answer should be yes.
The reason why it applies to
)
5 Part 55 is because backfitting process applies to any e
change in a staff position or regulation which could i
7 cause a change in the way power reactors conduct their 3
activities, make modifications to plants, et cetera.
e Therefore, a change to Part 55 regulation woul'd require to a backfit analysis.
In fact, one has just recently come ii before the CRGR where a backfit analysis was done. ' Like-12 wise, Part 20 is having a backfit analysis because it 13 affects power reactors.
So I was wrong in the answer I t
i 14 gave earlier this morning.
i 15 I want to remind everyone that if you have' ques-16 tions you want to write on the cards, go ahead and write j
17 them on the cards during lunch break or any other break i
i 18 and turn them in at the table.
We'll collect those, and Ig we'll cover those during the Q&A session later this 20 afternoon.
i 21 Since they're moving a little slowly at this place 2
22 during lunch, let's take an hour and 15 minutes and
}
23 resume at 1:30 this afternoon.
Thank you.
j 24 (Proceedings recessed at 12:15 o' clock, p.m.)
1 26 l
NGWBGRRY& COMPANY
r 7
107 1
CEE21EICA2E 2
STATE OF GEORGIA 3
COUNTY OF DEKALB 4
I, T.
L*. Flynn, Jr., being a Certified Court Reporter 5
and Notary Public in and for the State of Georgia at Large, 6
hereby certify that the foregoing is a true and complete 7
transcription of that portion of the proceedings which it g
represents.
'O 11 T.
L.
F n
Jr.
12 C.C.R. A-632 13 14 (SEAL) 15 16 (SEAL) 17 18 19 20 21 22 23 24 25 NGV/BGRRY & COMPANY
NUCLEAR REGULATORY COMMISSION BACKFIT WORKSHOP WITH INDUSTRY Transcript of the proceedings conve'ned March 14,
'1986, at 1:30 o' clock, p.m., at the Omni' International Hotel, f,
Atlanta, Georgia.
~
e VOLUME II OF TWO VOLUMES l
.c.
NEWBERRY & COMPANY General Court Reporters 2727 Eaton Ploce Attonto. Georgio 30341 Phone (404) 524-O618
]
Y 2
1 1
SSE1EEEE 2
SUBJECT SPEAKER PAGE 3
Introduction MR. DON EDWARDS 3
4 Industry Backfit Guideline MR. GENE KURTZ 5
5 Backfit program rationale MR. DON EDWARDS 9
6 Backfit prudency consider-ations MR. EICK REYNOLDS 16 7
27 Summary MR. S. HARTMAN s
0 and A MR. J.H. SNIEZEK 30 9
10 11 12 13 14 15 16 17 18 19 g
N 21
~
22
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g3 24 25 i
NGWBGRRY & COMPANY
3 1
PROCEEDINGS (CONT'D) l i
2 MR. EDWARDS:
l 3
As industry representatives, we are very pleased t
4 to be able to share in this Workshop.
We thank Dr. Grace 5
for holding it.
[
i 8
I was surprised or concerned -- I guess I'm con-7 cerned -- about the public. attitude towards the nuclear 8
power community.
I checked into the hotel last night e
and said, "I have a reservation."
And they said, "No, to you don't."
I said, "I'd like to take a look at the it room."
And they said, "Well, you go'through the lobby, 12 through the double doors, down..the stairway..
And 13 I thought, " Gee, they're doing thi5 to keep us away from i
14 everybody."
15 But I found out.the problem is just the press.
I 16 opened up the Atlanta Constitution, and there was a 17 cartoon with a little picture that showed two babushkas, 18 Russian grandmothers; and they're walking past this to chain-link fence.
And they're carrying 1,o, aves of bread, 1
m and the background is this containment structure with 21 smoke coming out.
One says to the other, "I don't know, 22 Comrade.
Mine's toasted, Ioo."
Sorry.
23 (Laughter. )
~
24 This morning, you heard the NRC describe their i
25 procedures for implementation; and, this af ternoon, 5
NGWBGRRY & COMPANY f
i 4
I we're going to tell you how to do it.
This afternoon, 2
we're going to make some recommendations for licensees j
3 to consider.
You've been given, in the handout package, 4
a copy of the " Guideline for Evaluation of Backfits."
5 And that's just what it is; it',s a guideline intended l
6 for your use in your implementation of the backfit rule.
'l l
7 It will be explained this afternoon by Mr. Gene Kurtz, s
who's Director of Nuclear Engineering at Duquesne Power 9
and Light.
AfgerGene, I will offer some considerations l
to to you for your development of a backfit-management pro-11 gram.
My name is Don Edwards; I'mwithhankeeAtomic 12 Electric.
Next, Mr. Nick Reynolds, a partner in:. Bishop, 13 Liberman, Cook, Purcell and Reynollis.in. Washington,.D.C.
14 will discuss a very important emerging issue, that of 15 prudence.
I think he!s going to point out the backfit-16 management program may not be an option; it may be 17 necessary.
I think Gene can attest to the benefits to 18 be derived.
On your agenda, the next speaker is Mr.
19 Bart Cowan, who's a partner in Eckert, Seamans, Cherin 20 and'Mellott in Pittsburgh.
Bart has been detained in 21 Pittsburgh today.
Pinch-hitting for Bart is Sandy Hart-22 man, also of Bishop, Liberman.
Sandy has been involved 23 in the development of the inddstry version of the back-24 fit.. rule, support of the backfit rule and development of 25 the guideline.
Sandy is going to be tying together the l
NGWBERRY & COMPANY l
m
7 s
I industry comments in sort of an overall perspective.
2 I think you're going to hear three or four 3
recurring themes this afternoon.
You've heard them this 4
morning.
First of all, the backfit rule is a process; 5
it's not a stop.
Identification of backfits is where a 6
lot of attention needs to be focused.
You have to 7
approach this in a very systematic way.
And, finally, e
it's going to require a joint effort.
As Jim said this 9
morning, we'd 1ike questions at any time.
There ars to cards available for writing out questions you'd like to 11 have answered.
If you do use the microphone, please 12 identify yourself with your name, so the reporter can 13 get your name.
I'd be pleased to have some questions 14 from the industry side.
We're at high SIFL risk up 15 here, and we'd appreciate your care that we're not in-16 jured.
SIFL?
That's a self-inflicted frontal lobotomy, 17 and it happens when you finally pass out and go down on 18 the table like that, if we don',t get'any questions.
19 At this. time, I'd like to turn it over to Gene.
20 MR. KURTZ:
21 Good afternoon.
What we've done is prepare an 22 industry guideline to assist you in implementing the
-w' 23 backfit rule.
The " Guideline" was prepared through the 24 Atomic Industrial Forum, AIF,'in Newport.
'You. notice 25 that it's a guideline; it's not a requirement to be NGWBGRRY & COMPANY
~
s a
1 followed.
What we have in the contents of the "Guidelino" 2
-- there's a discussion of the final rule.
Now, this 3
discussion is in an easy-read type format.
We've taken 4
it out of the hands of the lawyers and attempted to put 5
it in a fashion that is easy for you to read.
- Again, 8
the theme comes through that the backfitting process is 7
there to allow plant changes, it's not there to stifle 1
e them.
It's to put it into the context of making plant e
changes as part of normal, routine business; in other to words, to put it in the realm of logical business 11 decisions, rather than hip-shooting.
In the discussion of the final rule, it's very 12 13 important to know when you have a backfit.
I know that 14 sounds kind of strange; but, basically, the best thing to -- If you're not sure that you have one, it's quite 15 16 possible you'll be shot down in the first round that 17 you attempt to implement the backfit rule.
The very key is element is identification of the backfit itself.
It's 19 your responsibility to know your licensing. basis.
It's 20 quite likely that, even though Jim Sniezek pointed out, 21 and Tom Cox, that the staff intends to identify backfits.
22 it's highly unlikely that the staff will do it.
The 23 reason is not because they're att.empting to intimidate you or ratchet 'you in some fashion; it's because they're 24 25 coming from the context that they do not know your NGWBGRRY& COMPANY
7 1
licensing basis.
They have a different mission; they're 2
interested in nuclear safety.
Agreed, we're all inter-3 ested in nuclear safety.
But they do not know the 4
details of your licensing basis, your commitments and 5
what is in your license.
Therefore, it's going to be e
up to you to identify the backfit.
7 That's why we have the backfit checklist.
That 8
will assist you in identifying whether you really have 9
a backfit or not.
Now, bear in mind, when you do attemp :
10 to file one of these, the first thing you're going to 11 get from the staff, likely, is the fact that it's not a 12 backfit.
Now, don't let that scare you in any fashion.
13 Again, that's because-they do not know the ' details of 14 your plant.
This checklist will help give you assurance 15 that you do in fact have one and wili assist you in 16 building up your strategy of showing that you do in 17 fact have one and set forth the process to allow you to 18 go implement the procedure.
19 Again, just an, example of what's in the checklist:
20 It's a series of questions that you can go down and see 21 if you do in fact meet the criteria of applying for a 22 backfit.
23 Now, in the flow diagrams, what we've done is 24 taken the staff's procedure and charted it'out for you.
25 Now, the procedure may appear a little complex, but each NGWBGRRY & COMPANY
- ~. - -
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8 1
organization has their own style of writing procedures.
2 Bear in mind that the procedure is only used if in fact 3
you have a backfit.
So, once the backfit is identified, 4
then you're into the procedures that are identified.as 5
to flow.
6 The appendices have the total text of the final
,[
7 backfit rule.
But the interesting part there is the e
examples of backfit situations.
And what we've done is 9
prepared two ca,se studies for you.
I recommend you read 10 those in detail and understand those case studies.
We've
{
11 also included the full text of the staff's Manual Chap-j 12 ter 0514.
13 Backfitting is a tortuous path; it's not something i
14 that comes about quite easily.
Again, the s taf f 's l
15 mission is one of safety.
And we all have pride in 16 defending a posture that one has taken.
So, when you t
17 first attempt to file one, the staff will then say it 18 doesn' t meet the criteria and so forth.
What the back-19
. fitting procedure doeq is put this in a systematic l
20 process to allow rational people to make logical deci-21 sions.
And, hopefully, it will lead to a balanced l
22
~
nuclear power policy.
i e~
23 We have experienced all these things throughout l
24 the Duquesne process of filing our backfits', which we i
25 did 17 times.
In all those cases, most of the NRC i
NGWBGRRY & COMPANY l
9 1
represented here today in the management aspect encouragt 4 2
Duquesne to proceed with the process.
They were only interested in seeing that it was a balanced system to 3
4 1
ensure that the plant changes in fact were necessary an d
5 were implemented.
I'd like to point out, also, that it has been highlighted in the Duquesne prudency audit of 6
7 Beaver Valley II.
Now, the audit report is not out yet.
e The auditors were made aware of it.
It should be out s
within the next 90 days.
At that time, I will make sure either through Tom Cox or through Tom Tipton of the AIF, 10 that we get that infomation out to you, to see how it it 12 was in fact used.
I do know that it was not'a detrinent to the Beaver Valley II project, but I don't know how 13 14 much of a benefit it was.
15 Are there any questions?
16 (No response.)
17 With that, I'd like to turn it over to Don Edwards 18 MR. EDWARDS:
to I'm going to pre,sent and try to answe.r two ques-20 tions to you.
The first one deals with "Why have a 21 program at all?"
And the answers involve several con-22 siderations.
First of all,' you will not be able to really utilize the rule unless you have a systematic e- '
23 progr,am in place at your utility in order to implement 24 25 your management control over changes.
It is probably l
l NGWBGRRY 6. COMPANY
l 10 l
1 there in place, but this is another aspect of management r
2 control.
You're going to hear in a few minutes that the i
3 backfit management program will probably be necessary 4
because of the prudency issue.
But, first and foremost, f
i 5
a structured backfit-management program enables you to 8
focus on the real issues of safety.
You want to be sure 3
i t
t 7
that any plant change is a substantial improvement in l
8 safety and in reliability.
You want a system in place to i
l 9
be able to do that.
You want to determine if a potential to backfit means a substantial improvement in safety, and l
11 you want to know whether or not the change relates to 4
12 your licensing basis to determine whether it's a backfit I
I 13 at all.
You can' t determine if it'[s a backfit if you l
l 1-4 don't understand the current licensing basis of your
{
)
l P ant.
You also want to ensure that changes do not con-15 i
I 16 flict.
You don't want to affect the intent of previous
{
1 i
17 changes, and you don' t want to undermine or change unknou i
i 18 ingly your licensing basis.
19 As I said, prudency is going to be discussed in i
20 the next few minutes.
We're all aware of the increasing j
i 21 second-guessing going on by the economic regulator at
{
l 22 this point.
Your system needs to provide a means for 23 you to demonstrate the correctness of your decision.
So 24 one of the attributes of your backfit manag'ement program 25 must be the documentation of the backfit decision you NGWBGRRY& COMPANY
-.n....
11 1
make or the agreement you make to implement a backfit.
2 You have to document the facts available at the time that 3
warrant the decision; you have to document that the action 4
you took was in fact a required response, and you have to 5
document the fact that the requirement was a legal 8
requirement in the context of the rule.
Remember, now, 7
the backfit rule cuts both. ways.
You can't merely say, a
"They made me do it."
g Good management control is a result of good infor-go mation; and good information about changes that are in u
Progress or committed or planned allows informed actions 12 like the opportunity to integrate some changes, the Opportunity to prioritize changes Nnd the opportunity to 13 1
34 compare the bases underlying the changes and make sure 15 you're taking a consistent approach in evaluating them.
I 16 The~ old 50.109 didn' t work because it wasn' t used.
1 j
17 This rule won't work if it isn't used, either; and we is don't want a retrograde step, to go back to an undisci-to plined approach to backfits.
Nnd we don't'want confusion t
t 20 over requirements.
You heard this morning that NRC has 21 a system of central control.
They've implemented standard procedures, and tNey're striving for consistent 22 23 interpretation.
And over the past decade, the complaint 24 that,I've heard is that there are apparently a lot of 25 NRC's, and they all do things a little bit differently; i
1 j
NGWBGRRY& COMPANY
19 1
and, quite of ten, their underlying analysis doesn't 2
appear to be adequate.
Well, NRC is addressing these 3
criticisms; and, with a backfit-management program, you 4
can monitor their striving for consistency.
But you can 5
also establish consistency in your own organization.
e That's a great advantage.
7 So, what is this backfit-management program?
I'm a
going to discuss the characteristics of a program you 9
might need.
I',m not going to give you specific proceduros.
to In other words, I'm going to tell you what I think you 11 need, what we, collectively think you need, not how you 12 should do it.
I will explain that in a moment.
13 As all important programs, you've got to start with management commitment and management support at all 14 15 levels.
This type of a program is going to have to be is one that is fully understood by all employees, one that 17 uses a standard procedure, because a failure at one is level will result in a failure of the system.
I think a 19
,backfit-management prpgram is effective if'. it incorpo-20 rates itself into your program that you have already for 21 treating modifications because all modifications, I thinh should be treated under thN same systematic process.
22 You need a uniform standard of acceptance of a change, regard 23 24 less.of the source.
You need an internal c'onsistency l
2s in justification so you can allow comparison and a
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13 1
prioritization between jobs.
2 And, in this particul&r case, you need sound 3
positions for interaction with NRC.
You want to be able 4
to discuss a potential backfit from the safety standpoint, 5
from a plant-complexity standpoint and from an impact-6 benefit standpoint -- and not just dollar cost.
You also 7
received a brief description of a NES report that's a
recently been released that deals with exposure or 9
dose incurred by plant workers.
That's an interesting 6
to report because it highlights the impact of worker dose 11 and the magni,tude of worker dose in the five-year 12 period of the study.
It indicates that's another factor that really needs to be looded at and carefully 13 14 considered.
15 I said before that you need a systematic process.
16 You need to be able to identify where backfits come 17 from. You need a knowledge of possible sources.
In the is NRC flow chart, it lists about three pages, of possible 19
. sources.
You.need to, be aware of those.. You need to 20 know, at least in the instance you're dealing with and 21 more generally and uniformly across the board, the licensingbasisofyourplInt, prior to dealing with 22
~~ '
imposition of a backfit.
As Gene said, the major problem 23 24 is knowing that you have a backfit situati6n.
You start 25 from the licensing basis and the particular change to NGWBGRRY & COMPANY
14 1
th at.
And with that information, you can validate a 2
You can assure that the safety issue is clear.
3 You can look at the package presented to you by the staf:
4 and make sure that's complete.
You can review that 5
analysis -- not because you want, necessarily, to attack a
the staff; but you have an obligation to be sure that 7
the analysis is correct.
You can identify possible dis-8 agreements and put those on a factual basis and then 9
provide management with the opportunity to make a decision on whether or not you're going to appeal.
- Now, 10 they may decide not to, but that's an option.
it 2
Let me say a word about the appeal process.
The perception of the old 50.109 was thdt it kicked in only 13 when there was a violent dispute and that no licensees a
14 wanted to use it very.often because nobody wanted to be 15 to a bad guy.
My understanding of the new 109 is that it recognizes that we' re dealing with a very complex, tech-17 nical situation in a very complex environmpnt and that la facts can appear different to reasonable people and that is 20 what we need is a process to get those differences out 21 and resolve them.
The objective we're striving for is maximum benefit in safety knd in plant reliability.
22 I
23 think it was pointed out before that there are two 24 aspects of appeal.
One is the applicabilit'y of the n
25 process at all, and the second is the outcome of a NGWBGRRY& COMPANY
15 i
1 decision.
So, for an appeal, your backfit-management 2
program should allow development of responses that 3
provide cogent arguments on legitimate issues.
You 4
want to focus on resolution of differences, but one basis for that is the common ground that exists on the 5
8 issue.
You want to be able to monitor the appeal 7
process so you can track your appeal through the system.
Finally, you want to be able to incorporate that into 3
e your own work control.
As I said before, justifications to of all tasks should be done on a uniform basis to allow prioritization and to allow you to schedule and track 11
~
12 and, finally, to report.
Your system needs to be compre;hensive in that not 13 14 only does it deal with changes at your facility, but it needs to be aware of situations at other utilities.
is Depending on the exact nature of the way your management 16 17 process works, you want to know the NRC treatment of 18 similar actions at other facilitics; you want to be able is to identify potential generic actions.
Along those lines 20 NUMARC has endorsed an initiative to establish what's 21 called a Backfit Coordinator at each utility.
The list-22 ing of these Backfit Coordi ators is going to be maintaired by AIF and distributed to each Coordinator so that he 23 t
will knme his counterpart in each utility.
24
' his is the T
25 rudimentary start of an information network.
And in I
NGWBGRRY & COMPANY 4
e 16 1
June, there will be a workshop 'for those Coordinators so 2
that they can go forward and do good.
If your utility 3
hasn't named your coordinator, have him measured for 4
armor and send his name to Tom Tipton.
5 The last attribute of the system that you're going 8
to have to install at your utility is the fact that it 7
has to be yours.
And that's why my presentation is very a
ethereal and not very procedural.
You want to integrate 9
this into your management process so that there are to control of resources, so that you manage the interface 11 with the NRC and that you have a rationale for the 12 decisions that are made.
The program has to be imple-mented by your organization on m$ny levels that involve 13 14 many aspects of the information report.
15 And, since I'm sure that was crystal clear and 16 there are no que.tions, I'll turn it over to Nick 17 Reynolds.
18 MR. REYNOLDS:
19 Our industry has long complained about the shifting 20 sands of NRC regulation.
Some requirements have been imposed and then changed by the Agency and then changed 21 22 again.
Following TMI, tNe situation got worse.
In my 23 opinion, the regulatory process at the NRC hemorrhaged 24 in,the wake 'f TMI; and a long list of new requirements o
25 was imposed on licensees.
And the complaints grew NGWBGRRY & COMPANY
17 1
louder, not because new requirements were imposed, but 2
because the process for developing new requirements was 3
perceived as having become uncontrolled.
4 The greatest incentive for licensees and the NRC 5
to satisfy the backfitting rule is safety.
As we have a
heard today, the rule is in part the result of concerns 7
expressed by the industry as to the manner in which back "
s fits are being managed.
The NRC listened to our concerna.
9 It evaluated them, and it concluded that they had merit.
10 The Agency concluded trat the controls were necessary to 11 ensure that facility modifications imposed by the NRC aro 12 in fact required and would have no unintended side 13 effects.
.I 14 There is another incentive for licensees to make 15 sure that the backfitting rule is satisfied.
This incen~
tive is one that is being increasingly provided by our Is 17 economic regulators and, indeed, by boards of directors, 18 both of which are now holding utility management account-It able for prudent construction, operation and maintenance 20 of power reactors.
So my task today is to shift the 21 emphasis away from the discussion of safety toward the 22 implications that the backfitting rule has on this j'
23 economic incentive.
1 24
... Both the Atomic Energy Act and the United States J
25 Supreme Court tell us that state Public Utility w
i
)
l l
NGWBERRY & COMPANY
18 1
Commissions have full authority to investigate the pru-2 dency of costs associated with construction, operation 3
and maintenance of power reactors.
In the past, these 4
rate-making bodies generally have allowed the recovery 5
of costs incurred by licensees to satisfy the NRC e
requirements that had been imposed on them.
These costs 7
included both the direct costs of the backfits, as well e
as the indirect costs of replacement power.
e
!!y survey,of the economic side indicates to me that l
10 this appears to be changing.
It may not be enough in l
11 the future for your companies to represent to Public 12 Utility Commissions that costs were incurred'as a result i
13 of NRC-imposed requirements.
Instead, you may have to 14 demonstrate that you took the initiative to ensure that i
15 NRC regulations were satisfied in the most cost-16 effective way possible.
In short, you must demonstrate 17 that the conduct of your affairs in this arena was 18 performed prudently.
i l
19 During my discuqsion this af ternoonj.I will focus 20 on three aspects.
Firs t, I will survey very briefly the 1
l 21 rate-making treatment of backfitting costs.
I don ' t neec.
to dwell on that at any lehgth because most of you, if 22
~~'
73 not all of you, are familiar with some of the horror 24 stories that have come down in recent years'.
These 25 cases that I will discuss demonstrate an increasing 1
l
}
l NGWBGRRY & COMPANY
10
)
l 1
willingness of economic regulators to second-guess both 2
the manner in which a utility seeks to resolve an 3
issue with the NRC and the manner in which modifications 4
are executed.
I will then identify some implications that 5
the backfitting rule may have for economic regulation of a
power reactors.
And, finally, I will suggest a number o:
7 principles that licensees may want to follow to protect themselves, should they have to just1fy the prudence of a
a their actions.
There have been a number of past de,cisions address-to ing rate-makin.g trea tment of backfittin.g c. osts.
11 One 12 group of these decisions involved NRC requirements that licensees analyze seismic-stress design in light of new 13 14 information.
To meet this requirement, some plants were is forced to shut down for extended periods to conduct acti-vities such as piping verification and anchorage inspec-is 17 tions.
An example of more reasonable rate regulation, is which occurred in 1980, was in one state where the Commis. -
19 sion allowed a. nuclear, utility to recover '62 million 20 dollars in replacement-power costs resulting from the 21 outage to evaluate the seismic question.
That PUC found
~
22 no imprudency in the original design of the plant or in 23 the failure of the licensee to appreciate the need at the time of construction to strengthen pipe supports 24 25 because, at the time of construction, the plant met NRC NGWBGRRY& COMPANY
O i
'20 i
1 seismic criteria.
Similarly, in 1980, another rate i
2 commission allowed full recovery of 20 million dollar.s h
3 in replacement-power costs, again associated with an out j
4 age to evaluate seismic design.
s
.More recent decisions indicate a shift toward e
increasingly stringent economic regulation by Public 7
Service Commissions.
Economic regulators are scrutinizing a
with particular care construction and maintenance costs j
s associated with power reactors.
This scrutiny extends to to backfitting costs, as well as to initial-construction
{
I 11 costs.
j One state Public Service Commission recently i
12 excluded from a utility's rate base 1.4 bi111on dollars 13 in total construction costs for that reactor.
There's no 1
14 secret:
This is Shoreham, New York Public Service Com-15 mission.
Part of this disallowance was attributable to d
what the Public Service Commission called "the licensee'o 1s 17 failure.
" and this is a quote, to pursue prompt is resolution of regulatory issues that significantly is
.affected the plant's post and schedule."
These issues 20 involved various NRC-imposed backfits that arose during 21 construction of the reactor.
In 1972, the staff imposed 22 new requirements for analyzing high-energy line breaks l
23 outside of-containment.
The PUC found that because 24 this, quote, ".
had the potential of requiring sub-as stantial redesign work and costly backfitting.." --
.i NGVBGRRY& COMPANY i
I
s D
21 1
close the quote -- the PUC found that the utility should 2
have pressed the NRC for an early ruling on the pipe-3 break requirements for the plant.
Having failed to do 4
so, the PUC struck from the rate base that portion of 5
the plant cost attributable to that activity.
The PUC e
disallowed redesign and rework costs that ultimately 7
became necessary to satisfy the pipe-break requirements.
e There were other disallowances.
For example, there were 9
disallowances pertaining to costs resulting from the 10 NRC's adoption of new ASME piping-code requirements, the 11 NRC's issuance of new separation criteria for cable --
12 that was in 1974 -- the NRC's issuance in 1972 of guid-ancerelatingtoseismicdesignfoYcable-traysupports.
13 14 In another case just a few weeks ago, a state PUC 15 ruled that a utility deserved only 40 percent of a 194 to million dollar rate increase related to construction of 17 a reactor.
According to the PUC, the utility had un-18 reasonable and unexplained cost increases,and inefficien :
le
.and imprudent.managem,ent.
The utility was.the owner of 20 a power reactor under construction; and, according to 21 the PUC, the utility failed to assert aggressive manage-22 ment over the project, inc'luding the performance of
- ~
internal audits.
23 Now, the parade of horribles is becorhing longer, 24 2s and I don't plan to dwell on it now with more examples.
NGWBGRRY& COMPANY
22 1
The point is that the trend is clear:
At least in the 2
near future, economic regulators will increasingly 3
scrutinize plant costs carefully; and it may not suffice 4
to offer as a justification for backfitting costs the 5
mere statement that the NRC made you do it.
e Now, given this trend in economic regulation, the 7
backfitting rule about which you've heard so much today a
raises some important rate-making questions.
If a utiliuy e
accepts a staff-imposed backfit without assuring that th e
to backfitting procedure is followed, an economic regulator 11 may question,whether the utility did all it could do to 12 minimize the cost of the backfit.
The economic regulator couldfindthatmanagementactedi$prudentlyinspending 13 14 money for a backfit without scrutinizing the staff's 15 technical basis 'cnr pressing its exceptions vigorously is enough.
In addition, if the backfit causes an outage to 17 be extended, the utility may be criticized for inefficient 18 outage management.
is However, in my view, it's not enough'. simply to 20 assure that the backfitting process is followed.
The 21 utility may also have to press the NRC to decide areas 22 of disagreement promptly l'n order to avoid a situation 23 in which the utility is later forced to incur costs for 24 modification that then have to be reworked when they get 25 a final answer from the Agency.
In the example I cited NGWBGRRY& COMPANY
91 1
earlier, the utility took exception to some cable-2 separation criteria in Regulatory Guide 1.75.
It did 3
not get an answer from the Agency on its exception.
It 4
proceeded at its own risk; and the PUC ultimately found 5
that, while a substantial amount of the installations wan 8
recoverable by the utility, at least 10 percent of the 7
work was not.
The Commission disallowed the costs 8
associated with that work, and that is a direct. result of 9
the failure of the utility to obtain prompt answers from to the Agency.
11 As a result of the increasingly aggressive economic 12 regulation of nuclear utilities and the deve'lopment andimplementationbytheNRCoftNisbackfitting-13
)
14 management process, I believe that nuclear utilities should follow a number of principles for evaluating back-15 fits in terms of the sensitivities of the economic regu-to 17 lator.
These principles are, first, before incurring 18 costs in connection with a backfit, the utility should i
19 satisfy itself that a, sound technical basis exists for 20 the backfit.
This means working together with the NRC 21 staff to understand the technical basis for what the 22 staff proposes, how the desired safety improvement can be 1
o' 23 obtained at the least cost, and challenging the necessity 24 for.the backfit if a challenge is appropria'te.
If the 25 utility is satisfied as to the technical need for the 1
J NGWBGRRY& COMPANY
24 1
backfit, it should schedule the necessary work to minimine 2
facility down time.
3
- Second, at a minimum, e.ach of you should obtain al; 4
necessary regulatory approvals on a timely basis and s
take advantage of planned outages to complete the work.
(
3 I am particularly hawkish on the issue of getting the y
7 answers from the regulator.. We all know, in the past, 1
a how business has been conducted by this Agency: You've 1
9 sat around for six months, a year, two years without an 1
10 answer to questions that are vital to how you proceed.
J 11 It's a new day here.
You've heard the management of thi o 12 Agency say this morning that they are committed to promp i
13 answerstolicenseequestions,andYoushouldholdthem 14 accountable for that.
They mean what they say, and it's 15 to your advantage to get those answers promptly.
Failing I
l 1s to do so places you at substantial risk before your i
i, 17 economic regulator.
j 18 Third, if the utility takes exception to all or j
to part of a backfit, it,should present its ex.ceptions to i
to the NRC in a timely and well-documented fashion.
There-21 af ter, the utility should seek prompt resolution of the l
22 issue.
In appropriate case's, staff decisions should be 23 appealed to upper staff management.
l 24
... Fourth, from the prudency perspective' the utility 1
25 should document each step of its decision-making process,
I I
i l
NGVBERRY & COMPANY
s 25 1
For example, if a utility concludes that a backfit is 2
technically justified, this justification should be 3
developed in detail at the time the utility decision is 4
made to proceed with the backfit.
You're not documenting 5
it for the sake of the NRC; youf re documenting it for the 8
sake of your stockholders because, if you don't have the 7
paper trail, your PUC will come af ter you.
8 Similarly, if a utility elects to contest a back-e fit, its technical justification, likewise, should be 10 developed from the outset in order to minimize delay and 11 present the most efficient case you can to the Agency.
12 If the utility finds that the NRC is not meeting its goal of promptly resolving backfitding appeals, it should 13 14 advise staff management of the fact in writing.
And if 15 Jim Sniezek does what he did last week in King of Prussin,
he will give you his home telephone number; and you can is 17 call him at any hour of the night or day.
18 (Laughter.)
19 And he'll see to,it that things are.. resolved 20 promptly.
Right?
l 21 MR. SNIEZEK 22 (No response.)
o' 23 MR. REYNOLDS:
24
...Now, I don't mean to imply that the f' ling of an i
25 appeal under the backfitting process will be the litmus NGWBGRRY& COMPANY
o 26 test of prudency.
What I do suggest is that, as a resul<.
2 of the new backfitting rule and procedures which are now in place, utilities' complaints about changing and con-3 flicting requirements imposed on their plants may not 4
5 carry as much weight with rate, commissions as they once 4
e did.
I also believe that economic regulators will con-tinue to increase their scrutiny of the way we do busi-y a
ness, and they will expect each licensee to consider car a-fully the need for a backfit and to develop management e
techniques to assure that necessary backfits are imple-10 mented quickly and efficiently.
For these reasons, I believe,that the. backfitting i
rule is a very 'important tool of piudent management that 13 L
we in the industry ignore only at our peril.
- Now, 34 15 stipppd of all the ver.biage, what does this mean?
It 1
16 means that each power-reactor licensee must -- not should
(
not may -- must develop an efficient and vigilant procesa gy is to recognize a backfit, first; to determine, second,
)
whether the backfit is needed; and, if so,, to proceed H,
efficiently with its implementation; and if not, third, I
20 to invoke the procedures in the backfitting rule with tho 21 22 NRC staff.
4 i
23 And why must we do this?f Well, it's our obligatioa e.-
l 24 under federal law to do it.
The backfitting rule, you l
i heard this morning from Mr. Mcdonald and from the Agency.
as i
4
)
NEWBGRRY & COMPANY I
i
27 i
i i
{
1 is not an obstacle to safety improvements.
It is, in my i
j 2
view, a road map for the NRC and the industry to follow j
3 to assure that plant modifications are necessary and
)
4 justified.- Neither the staff nor the industry may ignoro i
?
5 the rule, because it is a binding requirement.
Just as
(
)
8 NRC staffers who refuse or neglect to follow the rule l
7 will be held accountable by. staff management, so licenseos 1
I e
who refuse or neglect to follow the road map will be e
held accountabl,e by those concerned with the efficient j
i 10 plant operation, construction and maintenance, be they i
11 your Public U,tility Commission or your board of 12 directors or both.
Thank you.
i 1
13 MR. HARTMAN:
4 j
1-4 The good news is that I'm the last industry Is speaker.
It's been a long day, but I'd like you to thini t s
j 18 back to what Mr. Mcdonald asked this morning when we 17 began the conference.
He started with a couple of ques-18 tions.
He asked, "Backfitting: What is it?"
And the
[
i to Agency this morning explained to us what b'ackfitting is 30 under their procedures.
Mr. Mcdonald asked, "How should 21 backfitting decisions be approached?"
And we heard a 22 lot about that this mornin.
Don and Gene, during 1
\\
23 their discussion, identified a number of management tech" t
i 24 niques that industry may want to take adva'ntage of.
I 25 Pat also asked, "What are the implications of backfitting?"
i i
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NGWBERRY & COMPANY
28 o
1 And Nick, during his remarks, discussed a few of those 2
implications -- implications that go far beyond the 3
health and safety questions, implications of backfitting 4
that go byeond the NRC.
5 During today's workshop, a number of themes were 6
stressed;. and I'd like to bring these things together.
7 Essentially, there are three.
First, the backfitting a
process is discipline.
Backfits should be thought out.
s Is the problem being solved?
Are all the implications oY io the backfit understood?
i 11 The second theme of backfitting:
The backfitting l
12 process is good management.
Have all of us, industry 1
I 13 and the NRC, thought through the backfit, both in terms l
14 of its need and in terms of its ef fectiveness?
And have 15 all of us, industry and the NRC, thought through how tha 16 backfit should be integrated into other ongoing plant 17 activities?
In other words, are we, industry and the 18 NRC, using our resources as efficiently as we can to 19 solve problems?
20 And the last theme:
For the backfitting process 21 to work, there must be cooperation between the NRC and 22 industry.
We have repeatedly heard this morning that the 23 backfitting rule is not a hurdle to be thrown in front 24 of the NRC to block NRC initiatives simply because they 25 were proposed by the NRC.
Rather, the backfitting rule NGWBGRRY & COMPANY
29 1
is a process.
It's a cooperative process both in terms 2
of identifying backfits and in terms of assessing the 3
need for and effectiveness of those backfits.
4 In short, what are we talking about?
We're talking 5
about the need to change the way we do business.
We've 8
heard NRC management here and elsewhere commit that they 7
are going to be changing the way they do business.
We've 8
heard about efforts on the part of NRC management to 9
train their staff, to sensitize them to backfitting im-10 plications of their decisions.
The same should be true 11 of industry.
Now, how should we change the way we go 12 about doing business?
First, open communication.
- Again, 13 we've heard commitment from NRC management that there 14 will be no retribution for raising safety concerns, that is the NRC is interested in discussing legitimate issues.
16 How else should we change the way we go about doing busi-17 ness?
Through disciplined implementation of the back-18 fitting rule.
It ultimately is up to industry to make 19 sure that all of the factors identified in the backfitting I
20 process are addressed and addressed effectively.
As 21 Pat Mcdonald indicated this morning, we know our plants; 1
22 we're most familicr with them.
It's our responsibility 23 to run them.
24 In short, you'll have an improved decision-making 25 process.
That's what backfitting is about.
And I'd urgo NGWBGRRY & COMPANY
30 each of you to keep these themes in mind when you go bach i
2 to your respective home utilities and you're confronted 3
with a backfitting issue.
Thank you.
4 MR. SNIEZEK:
5 Thank you for your remarks.
6 Before we get into our question-and-answer session l
7 we'll take a very short break.
I want to remind you of a
a couple of things. This is_your last chance to get in o
any written questions you may have.
Also, copies of the to attendance list will be available at the registration ti desk outside the doors.
If you desire a copy of the 12 transcript of the meeting, I believe you should give your 13 name and address to the reporter here and make arrange-14 ments with him to get copies of the transcript.
We're not going to foot the bill for the transcripts; you'll 15 16 be billed directly.
And we will be placing a copy in 17 the PDR.
However, if you'll be back here in about ten minutes at 25 till 3:00, we'll resume with the question-18 to and-answer session.
20 (Brief recess.)
21 MR. SNIEZEK:
22 I guess we're ready to start the Q&A session.
- Firat, 23 we'll cover all the written questions we have here; and 24 then we'll go to questions from the floor.
25 I'll handle the first question.
It's "For vintage NGWBGRRY & COMPANY
31 o
i plants, staff positions and interpretations are not 2
necessarily available."
And it goes on to another part 3
of the question.
Let me address this first part, first.
4 For a vintage plant, the staff positions are basically 5
what's expressed in your SER, what's expressed in your a
license conditions and tech specs, what's expressed in 7
your commitments to the NRC and what's expressed in the a
regulations.
New regulatory guides, new branch technical g
positions, new standard review plans, are not part of the in staff positions that apply to your plant.
Now, if you're is talking about a specific interpretation, once the NRC 12 wrote that SER and granted you a license, that means thau 13 the staff agreed with the interpretations as they were 34 being implemented by you when you designed, constructed 15 and brought that plant into operation.
So I don't think 16 there should be too much question.
Again, if there is 17 a question on some issue, the burden of proof will go 18 back to the NRC to determine what the licensing basis is for your plant was.
20 The next part of the question -- The first part was 21 really a statement; I wanted to address that statement.
22 The question is, "If a current staff interpretation of a 23 previous position is different from the utility's under-24 standing, can the licensee request consideration under 25 the backfit rule for required changes?"
NGWBGRRY & COMPANY i
32 i
1 Yes, you can.
{
2 The next question, I want to address to Bob Berner o.
3 "What standards exist for determining that a modificatio n 4
is necessary to ensure no undue risk?"
Bob?
5 MR. BERNERO:
6 Thanks a lot.
The question of no undue risk has 7
been a troublesome one for a long time.
And, in fact, we a
have two approaches to it.
One is one that one of our 9
former Commissioners called a revealed standard.
You 10 look back at all the regulatory decisions and requiremen us 11 for design-basis accident, some of which are rather fic-12 titious in character.
If you see a deviation signifi-13 cantly departing from the protection afforded by that 14 spectrum of design bases, that could be taken on its 15 face as an example of something that could constitute an 16 undue risk.
17 A more modern interpretation is one that I think 18 we use more today, based on risk analysis over the last 19 10 years, that whenever there is a deviation even from 20 '
explicit regulatory requirements, we almost automaticall:r,
21 now, look at it and say, " Realistically, does this con-22 stitute a unique vulnerability to core melt, severe 23 core damage or core melt and radioactive release?"
And 24 the methods, of course, are now quite developed to do 25 initial estimates of the vulnerability of a plant to a NGWBGRRY& COMPANY
33 1
unique accident sequence or vulnerability of one kind or 2
another; and we have a data base sufficient to say that 3
this plant, as compared to a typical plant of its type,
(
is uniquely more vulnerable than the others.
And I think, 5
now, we are much more likely to use that latter as the 6
basis of undue' risk or no undue risk; that if we look 7
at it and the plant appears to Iae significantly more 8
vulnerable to some damaging sequence, we would then be g
able to establish a first-order argument that it does to constitute undue risk.'
it MR. SNIEZEK:
12 I'll address this question; and that is, "What is 13 the NRC's definition of a written commitment by the 14 licensee?"
15 The written commitment by the licensee to the NRC 16 is a commitment that's in writing.
17 (Laughter. )
18 Let me talk about that a little bit more.
A written commitment is what you say you're going to do in your 1g 20 FSAR.
A written commitment is what you say that you will 21 do in a licensee-event type report to the NRC, in your 22 corrective-action statement.
That's a written commitmen':.
23 When you respond to the NRC notice of violation, that 24 response is a written commitment.
When you send a lettez 25 to the NRC, whether or not that letter is under oath of 1
NG\\Y/BGRRY & COMPANY i
34 a
1 affirmation, telling the NRC this is what you're going t o
2 do regarding a certain issue, that is a written commit-3 ment to the NRC.
4 Bob or anybody else, can you think of any other --
5 MR. BERNERO:
6 I would just add to it, based on personal exper-7 ience, there is one thing that I do not consider a 8
commitment to the NRC; and that is the minutes of a g
meeting written by NRC that indicate that the licensee o::
io the applicant committed to do something.
I would consider 11 that a commitment by the owner only if the owner followed 12 up with a letter in the docket or something like 'that.
13 We have had that problem before where, at a meeting, 14 someone interpreted a statement as meaning a commitment; 15 and the NRC person wrote it down and wrote minutes of the 16 meeting.
Unless you adopt that, I wouldn't hold that 17 and I don' t think other managers would hold that, either, 18 as a commitment by you.
19 MR. SNIEZEK; 20 I think that's a very good point, Bob.
I think we 21 should also encourage industry, if they get a copy of the 22 meeting summary and it's wrong, to correct it in writing.
23 MR. BERNERO:
24 dr affirm it.
Ee s.-
25 MR. REYNOLDS:
~
26 Jim, may I add that, given the list that you have NGWBGRRY & COMPANY
35 1
just provided as to what written commitments are, it's 2
obviously very important for licensees to assure that 3
there's some control over written commitments made to 4
the Agency.
For example, I know of some companies that 5
have LER's processed by lower-level people without suffi-6 cient overviews.
And written commitments are made in 7
LER's.
So this is an area where I think management 8
attention is needed -- not just with LER's, but with all 9
possible written commitments that are made to the Agency 10 MR. MCDONALD:
11 Pat Mcdonald.
Do you consider such things as a 12 response to a query concerning compliance with distinct 13 NR owner's groups guidelines on how, item by item, how 14 we comply?
When we respond to that, does that constitute 15 a commitment?
16 MR. SNIEZEK:
17 If your response is addressed to the NRC, because 18 the NRC is looking for information to understand how you 19 are responding to an owner's group inquiry, that would 20 be a written commitment.
If you said you're going to do 21 something, the NRC will take that at face value even 22 though the NRC did not originate the document.
23 MR. MCDONALD:
24 Thank you.
But the question was one of gathering 25 information and if that constituted a commitment.
If, NGWBGRRY& COMPANY e
36 I
for some reason, I wanted to change tomorrow, there's no 2
mechanism set up to go back and change what you're doing.
3 So, without a mechanism to change a commitment, how can 4
there by a commitment?
5 MR. SNIEZEK:
6 There is a mechanism to change a commitment.
You 4
7 meet with the NRC staff or send them additional corre-8 spondence.
The reason why I say the NRC would hold to L
that commitment or considers it a commitment on your l
9 Part is because, when the NRC requests that information, 10 it's information with which they are making a regulatory 11 "What'sthenextsteptheNRCshouldtake?"
12 decision.
13 They're asking what the utility is doing in response to 14 an owners' group document or owners' group position; and 15 the utility comes back and sayr, We are going to do x."
j 16 The NRC may say, " Fine, the industry has responded as a 17 group to the owner's group, and it looks like utilities l
l 18 nre going, uniformly -- they're taking this action.
No 19 other action on the part of the NRC is necessary."
If we did not take that position, we could be misled in our 20 j
understanding of what the industry intends to do regardin 21 g
i 1
22 an issue.
23 MR. MCDONALD:
24 And, likewise, we had a recent letter out, request-ing us to respond on what we were doing with respect to 25 f
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training for senior operators and what have you.
And the 2
letter was written just asking what we were doing.
It 3
didn't seem to say, "Are you going to keep on doing it, 4
or are you going to change or what have you?"
When we 5
respond what we're doing at the time, would that consti-6 tute a commitment in that case?
7 MR. SNIEZEK:
8 We're getting into a very specific issue now.
I g
would say, if you told the staff that this is what you're 10 doing and the staff could interpret it that that's what ji you intended to continue doing, you have an obligation --
12 maybe not legal, but you have an obligation -- to tell 13 the staff when you decide you're going to do something 14 differently.
Otherwise, the staff will have been misled 15 in what they believe you're doing.
16 MR. MCDONALD:
17 Thank you.
18 MR. REYNOLDS:
i to Jim, would you distinguish the situation you just 1
20 described with one in which a licensee voluntarily, 21 without responding to any initiative from the staff, 22 comes forward and sayd he's going to do x?
You take no 23 regulatory action on the basis of what he said; he's just 24 going to do it voluntarily.
What's your position on that 25 one?
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MR. SNIEZEK:
2 I think it's the same.
I am of the view we do not 3
ask licensees for any information unless we have a purpo e 4
for asking for that information, to help us decide 5
whether we should take a regulatory action.
So we have 6
to rely -- we have to take that information at face 7
value.
Let's say we weren' t even addressing this sub-8 ject, an owner's group weren't even addressing this g
subject.
A utility comes in and says, " Hey, Mr. Branch to Chief at NRC, I thought you'd be interested in knowing ij that I have changed my plant procedures to do this type f review."
There must be a reason why they're telling 12 the NRC that.
It must be an influence on our decision' -
13 14 Process in some manner.
MR. REYNOLDS:
15 16 Maybe they're just an open licensee that wants to 17 keep you informed.
18 MR. SNIEZEK:
gg Rigat.
Then if he changes what he's doing, keeping 20 us informed, he ought to tell us that he's changing, also MR. REYNOLDS:
21 22 Right.
But my counsel would be that there is no 23 legal requirement that that licensee do Obat.
He could 24 change it without your approval.
26 MR. SNIEZEK:
26 Yes, he could change it without our approval.
No NGWBGRRY & COMPANY
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question.
Yes, Bob?
2 MR. BERNERO:
3 I'd like to add, I think, one thing that would 4
clarify that.
It's a commitment if there is a clear 5
connection between the information furnished and a revieu 6
issue or a safety issue related to it.
Clearly, there 7
are many things that are furnished in the way of infor-8 mation -- descriptions of certain parts of the turbine 9
building and related apparatus like that, or practices 10 out in the balance of the plant that are of interest, bu t 11 are not crucial or vital to some safety-issue resolution t
12 And they would not be taken as a commitment.
- However, 13 where we really do run into the problem is, for instance if you design a system related to the control room, 14 a
15 control-room habitability system, and then you describe a 16 lot of apparatus in it, a lot of different things.
It's hard to say how much of that was relied on in finding the 17 18 system acceptable for safety purposes and how much wasn't 19 relied on, if you've got it all on a sheet of paper.
Anci 20 so, in a case like that where there was a safety judgment 21 that could be related to all of that information, then I 22 think you should treat that as a commitment.
23 MR. SNIEZEK:
24 Let me give you one more example, and I'll take it 25 from the inspection-enforcement arena.
Let's say you're NGWBGRRY & COMPANY
40 1
issued a notice of violation by the regional office.
You 2
come back with your proposed corrective action and state 3
that you have augmented your procedure to make the shif t 4
supervisor approve a certain step in a process.
NRC sayn 5
your corrective action is fine.
Later on, you decide you 6
don't want that shift supervisor to be in that review 7
process any more and change it.
Now, the NRC has accepted a
your corrective action based on what you've told them.
g If you elect to change later on to a better process, it in would be expected that you would come back and tell the ij NRC that you're changing the process and the reason for 12 the change.
13 MR. MCDONALD:
s 3
14 But don' t we do that in a 50.59 review?
15 MR. SNIEZEK:
16 A 50.59 review only affects changes in the facility 17 as described in your application.
18 MR. MCDONALD:
l Ig Well, this puts us in a situation -- For example, 20 take the chemistry one, to get it to a very simple 21 level.
We respond that we are following the state-22 generated guidelines for conductivity in the steam gener-23 ators, and we say it's.2 at some power level; and then, 24 we decide that we want to drop that to.18.
We change 25 our procedure.
Now, it not being regulation-based l
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because that was handled -- although it was considered au j
2 unreviewed safety question, information was gotten back i
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from the Commission' and, apparently, they decided to not take any regulatory action because things were going 4
5 Pretty well.
6 Now, based upon what you're telling me, if I would change the spec that I'm operating to,.I should say 'that 7
8 I'm changing the spec.
Is that right?
i i
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i i
go Generally, I'd say yes.
If you told us you were 4
4 operating to one spec and you changed the spec in a non-si 1
12 conservative direction, you ought to tell us.
I'm not 13 familiar enough with the specifics of that case.
34 Maybe you are, Bob?
15 MR. BERNERO:
16 (Shakes head negatively. )
^
17 MR. MCDONALD:
I 1
18 Let me make an observation, because I don't want to j
is carry on.
I think this is much too vague for us to 1
}
20 depend upon as a disciplineu
.y of doing business.
I really think we ought to discuss this in another forum, 21 22 Perhaps, because that doesn't give us enough of a founda-23 tion to pursue it on a day-by-day basis.
l 24 MR. SNIEZEK:
25 Let me be very honest.
On a day-to-day basis, if I
I l
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42 a utility tells us they are going to do something, we 2
expect them to do it unless they tell us something 3
contrary.
It's as simple as that.
4 MR. MCDONALD:
5 I understand.
But I don' t think that, in this 6
Particular case, when we're talking about what constitutes 7
a commitment, when you send out, for information -- it's 8
not a response in terms of an LER, it's not another type g
of response; but you're sending it out just for informa-10 tion; and we give it back to you, in a sense, just for information, and there's no regulation involved, there's si continuing guideline involved or anything like that n
12
-- and then you say that any change we make is a change 13 34 to a commitment, that's a very difficult thing to manage.
MR. SNIEZEK:
15 16 I'm saying, if you've told us one thing and you make a change, we request information; you ought to tell 17 j
us so that we have the most current information so that, 18 if we should change our decision based on the information ig 20 you gave us, we're able to do so then.
21 MR. REYNOLDS:
22 The context in which this issue arises is whether 23 it's a backfit if you tell us to do what we've done j
24 voluntarily.
The question is licensing basis.
25 MR. SNIEZEK:
26 It depends upon the context in which the original NGWBGRRY & COMPANY
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question was asked.
t 2
MR. REYNOLDS:
3 I agree; and my definition would be, "If the Agency relied upon something the licensee told them to make a 4
5 regulatory decision," then that's part of the licensing
(
6 basis.
7 MR. SNIEZEK:
t 8
That's correct.
t 9
MR. REYNOLDS:
10 But if a self-initiated measure is taken by a utility that has nothing to do with a requirement of the 11 12 Agency and is not relied upon by the staff, then I think 13 the licensee legally can change that without staff 14 approval; and if the staff came forward and wanted to 15 impose it, it would be a backfit.
Do you agree with that?
16 MR. SNIEZEK:
17 I tend to agree with what you said.
Again --
18 MR. REYNOLDS:
19
" Tend to agree"?
20 MR. SNIEZEK:
21 Yes.
I will not -- It's a question -- You have to 22 take the specifics of the case.
23 MR. REYNOLDS:
24 I'll accept " tend to."
25 MR. SNIEZEK:
26 You won't get any more than that from me, anyway.
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And I thought that was an easy question.
2 (Laughter.)
3 This one, I'll address to Tom Cox.
"How soon must 4
an appeal be made?"
5 MR. COX:
e An appeal should be made as soon as the utility 7
can make the decision that it wants to do that.
There e
is no formal statute of limitations on that, though.
An
)
9 appeal could be quite late -- months.
We haven't set any to limit on that.
Obviously, it should be made soon in the 11 interests of good working relations.
12 MR. SNIEZEK:
i 13 Yeah.
I'd add, on that, we intentionally did not 14 set a time limit because it depends on the complexity of 15 the situation. It's hard to establish a time limit on an 16 appeal.
However, in good faith, we would not expect the 17 utility to use that as a means of thwarting the regula-18 tory process, either.
If we found there was a pattern 19 with any specific utility of using the appeal process as 20 a means of thwarting the regulatory process, I'm sure 21 there'd be some discussions between senior management of 22 that utility and senior management of the Agency.
23 Here's one that I'm going to address and ask Dr.
24 Grace to help me out on it, also.
"What is an inspection 25 module in the context of the hierarchy.of requirements?"
NGWBGRRY & COMPANY
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e Brian Grimes had to leave; and, since I had my first 14 years in the Agency with IE, I'll address it.
2 An inspection module has no place in the hierarchy 3
4 of NRC requirements.
It is not a staff position, it is not an NRC requirement.
An inspection module establishen 5
those items which our inspectors must consider when they 6
-- in arriving at their decision whether or not the 7
utility is operating safely.
That does not mean the e
utility must be or even should, necessarily, be doing g
each of the items that our inspector is checking on.
Otw inspector can make a satisfactory finding for operations even if the utility is not doing many of the line items that are listed in the inspection module.
It is guidance 13 to our inspectors.
In no way does it constitute guidance 14 to the utilities.
15 Ne son, do you have anWng to aM to dan 16 MR. GRACE:
37
^
With my mere two years in I & E, I defer to your ig 14 years.
I think you answered the question very well.
I w uld only add that, again, our inspection goes just 20 so far.
And what our inspection module covers is not 21 necessarily everything.
In fact, by a long shot, it is 22 n t.
23 MR. TUNSTILL:
24 i
N I'd like to follow up, sir, if I could, on that NGWBGRRY & COMPANY
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46 1
question.
I'm Jack Tunstill with the Florida Power 2
Corporation.
If a licensee -- And this is, I guess, 3
directed to Dr. Grace -- if a licensee considers an NRC 4
inspector's interpretation of an existing commitment to 5
be a backfit, should the dialogue be with the regulatory 6
regional level or back to Washington, to the NRR7 7
MR. GRACE:
3 Well, again, I think it must start at the regional e
level.
We, hopefully, would resolve it at the regional to level-11 MR. SNIEZEK:
12 That leads me into a little broader response.
The 13 answer is exactly right.
If, during part of the inspec-14 tion process, the inspector and the licensee have a i
15 difference on whether it's a backfit or not, it goes to 16 the regional process.
Once you've exhausted the regional i
17 process, the appeal, if you're going formally -- I would 18 advise, maybe, an informal dialogue, first, through the to regional chain.
Once you've exhausted the regional 20 appeals through the Administrator of the region, if you 23 are not satisfied, you then can appeal it to the Director 22 of the Office of Inspection Enforcement, who is a program 23 office director.
If it's a licensing issue, you would go 24 right to the program office, which is NRR, unless it was 2s part of the licensing function that has been delegated -
NGWBGRRY & COMPANY
47 1
to the region.
Then you would go to the regional proceso.
2 But you appeal back to the Administrator or the Office 3
Director or the staff person who is out there imposing 4
a backfit.
5 MR. TUNSTILL:
6 The appeal process, then -- you get one appeal; is 7
that it?
8 MR. SNIEZEK:
)
9 Well, let me talk a little bit more about that.
10 If it's an ' inspection appeal, you would normally be at 11 the Division Director level in the region, and then to 12 the Regional Administrator, according to the process in 13 the Manual Chapter.
If you're not satisfied there, you 14 have a third level of appeal, to the Director of the 15 Office of Inspection Enforcement.
In the very, very 16 rare situations, ten to the minus fifth, if it wasn't 17 satisfied there, you could appeal it to the EDO.
18 If it's in the licensing appeal process and the 19 licensing is being done by NRR and the region was not 20 involved in the licensing, you'd have a two-step appeal 21 process to the Division Director level in NRR; and, if 22 you're not satisfied there, you'd go to the Director of 23 NRR, Harold Denton.
Again, in a ten to the minus fif th 24 situation, if you so desired, you could appeal that to 25 the EDO.
Now, that's as far as the Manual Chapter goes.
NGWBGRRY & COMPANY
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t You could always appeal to the Commission, if you want to 2
carry it on.
Section 043 and 045, I believe, are the 3
two sections in the Manual Chapter that address the 4
appeal process, if you want to familiarize yourself with 5
those sections.
6 MR. TUNSTILL:
7 Thank you.
3 MR. SNIEZEK:
9 I'll address this one to Tom Cox.
"Do you publish to a monthly backfit status report?"
11 MR. COX:
12 NRR has, in the past, published monthly backfit 13 status reports.
We're not talking plant-specific back-14 fits.
And I've been assured that these reports are 15 Publicly available and will be in the future.
16 MR. SNIEZEK:
17 Okay.
And I would add that the generic backfits, 18 the CRGR minutes which have the complete package, are 19 put in the PDR, so they are available, also.
20 I'll field this question.
"In view of common 21 agreement on the benefits of the backfit process as good 22 management, is there a willingness within NRC to effect-ivel' disregard the grandfather provisions and agree to 23
?
24 process old issues under the new backfit provisions?"
25 I think, generally speaking, ~ if there is an issue NGWBGRRY& COMPANY
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that you believe has b,een backfit, our experience has 2
been that they have been processed under the current r
3 procedures.
Obviously, there 's a time frame.
We're not 4
going to go back -- If you're already implementing a f
5 staff position and you're going to claim backfit now, we f
6 would not handle that under the process.
I'd ask Bob 7
Bernero if he has anything to add to that response.
l 8
MR. BERNERO:
9 Yeah, I'd say that's true.
We have gone back to 10 some fairly old ones and treated them more or less as 11 if they were a new issue -- perhaps not with exactly the i
4 4
12 same formality we would treat a new backfit, but still i
13 with the same sense of reconsideration, appeal and l
14 review.
i l
15 MR. SNIEZEK:
i 16 I'll handle this question, also.
"Can intervenors l
17 appeal a backfit ruling favorable to a utility within the 18 0514 procedure process, or is 0514 strictly between 19 licensees and the NRC7" 20 0514 was meant to be between licensees and the NRC j
21 If an intervenor would like to request a reversal of a l
22 backfit decision, that would be under the part two 23 process of 2.206 of our regulations.
There is a process i
24 for the public to follow.
But the Manual Chapter was 4
i 25 meant to be between us, was meant to be primarily us,
\\
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our c6ntrol of the NRC process, managing the NRC process 2
And as you recall, the rule doesn't have a specific 3
appeal provision.
That's.something*the staff put in.
4 That's it for the written questions.
Are there 5
any other questions that you may have?
6 MR. BERNERO:
7 Jim, I've got a ques tion for Nick Reynolds.
I think he used the expression in hic talk' that appealing s
a backfit.is not a litmus test for prudency in consider.
e ing additions or modifications to the plan.
Do you think Io there is a litmus test that the Public Utility Commis-11 12 sions would use?
13 MR. REYNOLDS:
14 Yes.
The litmus test that I think will be used and which I would use if I were an economic regulator is 15 16 "Have you documented what y'ou've done?
Do you have a 17 paper justification for whatever conduct you've performed ?
18 If you've agreed with the' staff that a backfit is neces-HI sary, have you justified it technically to your own satis 20 faction and have you documented it?
If you disagree witt 21 the Agency, have you documented that and have you pur-j 22 sued your rights under the rule?"
I think the paper 23 trail is the answer to the litmus test.
24 And by saying that the appeal is not the litmus 25 test, I'm implying that you shouldn't use the rule to i
NGWBGRRY & COMPANY
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obfuscate or interrupt what the NRC is trying to do.
You 2
should only use it when it's appropriate to use it, in 3
a fair and objective mind.
But the litmus test for 4
prudency is the paper trail, just showing what the utility 5
has done.
6 MR. SNIEZEK:
7 Any other questions?
g (No response.)
g Okay.
Let me turn to Don Edwards, who has some g3 concluding remarks on behalf of the industry.
ji MR. EDWARDS:
12 Since I can' t do anything without a slide, I'd just 13 like to list these names for you.
I know you have lots 34 of questions; you just didn't want to take up the time.
15 You have a regulator here.
Here's a way to get ahold 16 of various people.
In case you're wondering, Bart jy Cowan is the chairman of the AIF Lawyers Committee.
He
,i is has worked very hard with the AIF Backfit Committee, is which I chaired, on the development of industry posi-20 tions on rule making.
21 Sandy Hartman I introduced to you before.
22 Gene Kurtz probably has the most practical hands-on 23 experience in implementing the backfit-management progran,
24 which yielded something on the order of 200 million 25 dollars in savings.
There are practical benefits to l
NGWBGRRY& COMPANY
52 1
the programs.
2 Nick Reynolds is, as I think I mentioned, counsel 3
to NU:1 ARC, very prominent in making sure this process 4
developed.
5 Jim Tourtellotte -- I think you're familiar with 6
Jim's work with the Commission.
He's currently an attor-7 ney and consultant.
s And Tom Tipton of the AIF, who is secretary.
9 In closing, let me emphasize that this was a com-10 bined presentation because making this rule work is a 11 joint effort.
Industry representatives appreciate the 12 opportunity to participate.
We certainly thank you for 13 attending.
We hope you've learned enough to go out and 14 make this process work.
It's going to take a lot of 15 effort: by a lot of people on both sides.
Thank you 16 very much.
17 MR. SNIEZEK:
18 In conclusion, I'd like to say that I believe this 19 workshop has been successful, as have our previous two, 20 in promoting a common understanding of the backfit rule no 21 that we jointly understand what the Commission is attempt -
22 ing to accomplish.
We think that a common understanding 23 of the working of the rule is really necessary so that in 24 may ultimately enhance the safety of power plants, which 25 is our common goal.
The key, I believe, is open NGWBGRRY& COMPANY
53 o
1 communications at every level of staff and management.
2 You have to understand that we in the NRC are changing the 3
way we have been doing business.
And that's what this 4
backfit rule and staff process is all about.
If you 5
have questions on the process and how it is supposed to 3
work, feel free to give me a call.
And this is my office 7
number: 301-492-9704.
Or Tom Cox, at 301-492-4357.
8 Remember, backfit is not bad.
But it must be done 9
in a disciplined management process which is designed to 10 ensure the continued protection of public health and 11 safety.
12 I thank you for your participation today.
13 (General applause.)
14 (Proceedings concluded at approximately 3:15, p.m.;
15 16 17 18 19 20 21 22 23 u
a NGWBGRRY & COMPANY
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2 STATE OF GEORGIA i
3 COUNTY OF DEKALB 4 j I,
T.
L.
- Flynn, Jr., being a Certified Court Reporter 5l and Notary Public in and for the State of Georgia at Large, 6
hereby certify that the foregoing is a true and complete 7
transcription of that portion of the proceedings which it 9
represents.
10 11 T.
L.
Flynn, Jr.
12 C.C.R. A-632 13 14 (SEAL) 15 16 (SEAL) 18 19 20 21 22 23 24 25 NGWBGRPY & COMPANY
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