ML20205C688

Summary of ACRS Subcommittee on Regulatory Policies & Practices 870114 Meeting W/Nrc,Inpo & NUMARC in Washington, DC Re Nuclear Regulatory Process

ML20205C688
Person / Time
Issue date:	01/16/1987
From:	Advisory Committee on Reactor Safeguards
To:	Advisory Committee on Reactor Safeguards
References
ACRS-2486, NUDOCS 8703300238
Download: ML20205C688 (12)

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DATE ISSUED: 1/16/87 ACRS REGULATORY POLICIES AND PRACTICES SUBCOMMITTEE MEETING MINUTES JANUARY 14, 1987 WASHINGTON, DC

Purpose:

The purpose of the meeting was to begin a current review of the nuclear regulatory process. The Subcommittee spent a large portion of the day hearing from NRC representatives concerning the states public utility commissions programs for incentives and penalties to utilities for plant performance.

i Representatives of the NRC, INP0 and NUMARC were the principal partici-pants in the meeting to discuss state incentive programs and industry programs being carried out to improve plant performance.

The meeting was a round-table discussion among the participants. It began at 9:00 am and adjourned at 3:00 pm. There were no handouts at the meeting. The entire meeting was open to members of the public. There were no written or oral statements from members of the public.

PRINCIPAL ATTENDEES: The principal attendees at the meeting included:

ACRS OTHERS H. Lewis, Chairman J. Peterson, State Programs i F. Remick, Member

• F. Brennemon, NRR C. Siess, Member

• W. Conway, INPO C. Wylie, Member J. Griffin, NUMARC W. Kerr, Member D. Ward, Member G. Quittschreiber ACRS Staff

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Reg. Policies & Practices Minutes January 14, 1987 MEETING HIGHLIGHTS, AGREEMENTS, AND ' REQUESTS

1. Executive Session Dr. Harold Lewis, Subcommittee Chairman, discussed the Subcommit-tee's assignment to undertake a review of the regulatory process.

2. Mr. James Peterson, NRC State Programs Branch, Presentation and Discussion on Tracing the Incentives from Public Utility Commissions >

to the Public Utilities.

The state incentive programs are the individual states Public Utility Commission's (PUC) performance mechanisms to measure util-ities efficiency levels and to award or penalize them for per-formance above or below acceptable levels. The objective is not safety performance, but is economic only. State incentive programs are in effect in 16 states, affecting 41 reactors, with additional states considering such programs.

The NRC is tracking these incentive programs to see if they do have an impact on safety. The incentives vary widely between states.

Some states award only, while other states penalize only. Awards and penalties range from hundreds of dollars to millions of dollars.

Awards to utilities usually go into the general operating fund via the form of rate increases. NRC required changes can usually be factored into the downtime; however, the burden of proof is normally on the utilities. Since the performance formula determines the required performance, utilities normally have to justify any changes to the formula calculations.

In response to a question from Mr. Wiley concerning funding for utility initiated safety changes, William Conway, INPO, said that utilities would have to fund these changes on their own. In re-sponse to questions from Dr. Lewis concerning the PUCs input on safety changes, Conway said the PUCs would formally come to the NRC

Reg. Policies & Practices Minutes January 14, 1987 for technical safety inputs, sihce they would not normally have safety experts working directly for them. It was noted that in some states where awards are given, the program may be discontinued.

3. Dr. Faith Brennemon, NRR, Presentation and Discussion of Pos:ible Safety Effects of Incentives from Public Utility Commissions to the Public Utilities.

Dr Brennemon felt the state incentive programs have a negative impact on safety. There is no correlation between PUC incentives and good or poor plant performance. In response to a question from Mr. Ward concerning how such a correlation might be made, Brennemon said the performance indicator program and the SALP might be used.

Dr. Lewis was not convinced that establishing performance incentives could have a positive effect but could see possible negative ef-fects.

Dr. Brennemon noted the following:

1. When PUCs place a cap on construction costs there is a disin-centive to make plants safer.

2. When utilities are punished by not passing on costs to rate-payers for replacement power when units are shutdown, there is an incentive to keep plants running and to defer maintenance.

3. When PUCs use capacity and availability factors there is an incentive to delay maintenance until plant outages.

4. It is in the best interest of a utility to take care of prob-lems quickly so that they don't have unplanned shutdowns.

Dr. Brenneman discussed a New York proposal, expressed by Gail Schwartz from the New York PUC, to Commissioner Zech, Tom Murley, and others,

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Reg. Policies & Practices Minutes January 14, 1987 which would allow an increase in utility rate of return and bonuses to employees for evaluations using INP0 and industry data and considering the NRC's SALP data. A report has been sent to the NRC and others for evaluation. The initial NRC reaction is negative, since it could place tremendous pressure on NRC personnel performing the SALPs, since millions of dollars of incentives might result from the NRC's stroke of a pen.

Also, utilities might put pressure on SALP rating personnel to give good ratings, and the burden of proof could be on the NRC to prove ratings.

Since New York is a national trend setter there is a heightened interest in the NRC, especially since this program is tied to safety. The Commission has not taken this matter up formally, but NRC management has already indicated that they feel that incentives for safety are a good idea.

Dr. Kerr noted that the NRC has been awarding safety for years by letting plants operate, and gives penalties for violations of NRC requirements.

Dr. Remick added that high SALP ratings result in fewer inspections, which is a form of reward. Dr. Lewis expressed a concern that PUCs are

" tinkering with safety issues", disallowing large amounts of maintenance.

Conway noted that it was common for PUCs to feel they are experts on determining which improvements are necessary to justify money expenditures.

4. Mr. William F. Conway, INPO, Presentation and Discussion of INP0s Impact on Nuclear Plant Safety and the Regulatory Process.

Mr. William Conway representing INP0, provided a detailed descrip-tion of the INP0 program, which is pushing toward self management of the nuclear industry. He said the utilities fully accept the fact of peer review by professionals and know that trouble at one plant

Reg. Policies & Practices Minutes January 14, 1987 does affect all plants. INP0 h'as a full time staff of 400 people and is augmented by a large staff from industry.

INP0s main functions are to provide the following:

(a) Evaluation of each plant every 14 months (b) Nationwide training and accreditation (c) Information exchange among members (d) Assistance using experienced specialists to deal with specific problems.

There has been a formal relationship between INP0 and the NRC since early 1982 with a letter of agreement.

INP0 selected 10 performance indicatcrs in 1985. These were select-ed after 3 years of monitoring detailed data from the member plants.

INP0 is opposed to the NRC developing indicators for regulatory action, e.g. unplanned scrams, since they feel a strong focus on a narrow group of indicators can be a problem.

Dr. Remick noted that Mr. Conway talked about self management but not self regulation. Mr. Ward noted that Conway talked about the NRC regulation of hardware and design, but not people. Much of the risk is from people related issues. Mr. Conway said that industry over time has accepted the role the regulator plays in design, but does not believe the capability exists in the regulatory body to manage. The ability to manage rests with the people who own and operate the plants. Conway felt the Utilities should be permitted to manage without the regulation process. Mr. Ward noted that industry has accepted t'he regulators role in selection of systems m _

Reg. Policies & Practices Minutes January 14, 1987 and equipment but is unwilling 10 accept the regulators role in people related issues.

Dr. Kerr applauded the formation of INP0 and agreed that the respon-sibility for management has to be in the industry. He felt we may have reached the point in equipment performance where a significant portion of the risk may be coming from people performance. If we are to continue to look for potential weak spots we may have to look at people. Conway noted that INP0 feels that with increased perfor-mance, risk potential is decreased. This cannot be clearly demon-strated, but over time they see this. Performance indicators continue to show an improving trend.

Dr. Siess asked if there was any known relationship between perfor-mance indicator results and PRA risk. No one present at the meeting could cite any known results.

The Subcommittee discussed the effectiveness of INP0. Dr. Remick said that what has been accomplished in the areas of qualification of personnel compared to before the industry effort could no way been accomplished by NRC without industry self management. He felt that the NRC in open forum discussing utility problems was much less effective than the utility CE0s getting together with INP0 to discuss problems.

In response to a question from Dr. Siess concerning whether util-ities are extending their INP0 training programs to non-nuclear facilities, Conway said that he expected quite a few utilities have extended this training to non-nuclear plant personnel.

The Subcommittee discussed how one might handle the complacency that accidents are not really going to happen. Conway said that their best judgement was used to select the final 10 performance

Reg. Policies & Practices Minutes January 14, 1987 indicators which are meant as o'ne increment of an overall set of -

objectives to determine if the plant is operating in a safe manner.

Conway noted that every CEO is held hostage to whatever any other plant does. This awareness comes through the INP0 annual meeting of the CE0s.

5. Mr. John Griffin, Nuclear Utility Management and Resource Committee, NUMARC, Presentation and Discussion of NUMARCs Impact on the Regu-latory Process. -

Mr. Griffin, Senior Vice President of Arkansas Power and Light, said that the 1983 shift in the NRC from new plants to existing plants was the genesis of NUMARC. NUMARC's goal is to restructure along functional lines, which is expected to be in place by July 1, 1987.

The Arkansas nuclear plants have been under the state incentive program for about the last 10 years. The Utility lost 44 million dollars from this program in the first four year period, which included the TMI fixes. Since then, they have gained that amount, plus some, back. Griffin said they try to keep the incentives out of the back of the minds of those making decisions. Everyone in the facility is aware of the incentives and penalties, which do put great pressure on the personnel. He felt that PUCs are highly political in nature and are not always acting in the best interest of the public or the industry.

Dr. Kerr discussed the Japanese policy of not testing during opera-tion but only during down time, and asked whether most of the tests during operation in this country were required by the NRC. It was the general feeling that most of surveillance tests are required by NRC requirements.

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Reg. Policies & Practices Minutes January 14, 1987 Griffin mentioned that TVA is a-member of NUMARC but that NUMARC does not have a role in trying to resolve TVAs problems. NUMARC tries to deal on a generic plant basis.

The Subcommittee discussed the concern about the "adversarial relationship" between the NRC and the utilities. Griffin said changes are occurring as a result of NUMARC working with the Commis-sion to help resolve problems early. This is greatly helping to reduce this adversarial relationship. Griffin felt the industry relationship with the NRC has improved greatly by adding the resi-dent plant inspectors and having them rotate back to headquarters.

Dr. Siess asked whether mature Licensing Project Managers (PMs) would help. Griffin said definitely. Ron Hernan, NRR, added that in 1985 the NRC took steps to enhance the PMs and to give them authority to sign liaison documents. Griffin said they have noticed a big improvement, largely in getting things done. He noted that there has been much less recent turnover of PMs at the Arkansas Plants.

Hernan asked the utilities opinion of whether they should be asked to attend ACRS meetings describing operating reactor events that occur at their plants. Griffin said he would want his rep-resentative to attend any meeting where events at their plants were being discussed. Siess noted that we frequently look at events very early and that utilities may not want to attend.

Griffin described the problems with the random drug testing program at the Arkansas plants. Upon implementation, the utility immediate-ly got a grievance with the union. He said about 6% of all of the job applicants have tested positive. None of the random tests of employees have been positive. Griffin said the unions at the national level are using the sampling as a bargaining tool to obtain something else.

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d Reg. Policies & Practices Minutes January 14, 1987

6. Final Executive Session The Subcommittee discussed its assignment and what it should concen-trate on for the future. They discussed where the responsibility for safety really should be. It was noted that INP0 does cooperate with the NRC but is jealous of NRC using its data. It was noted that INP0 and NUMARC are telling the NRC to go away and let the industry manage; however, their history has not been that good, e.g., the Davis Besse problem which had been known for several years by both the NRC and the utility had not received the action neces-sary to prevent the event. The Subcommittee discussed what the NRC could have done, that they did not do, with regard to the Davis Besse event. It was the general feeling of the Subcommittee that the NRC cannot do much until after an event or until after a violation of regulations takes place.

Mr. Ward discussed the need to know the level of risk related to the General Design Criteria and to the process. Mr. Wylie felt that plants do conform to the General Design Criteria intent with regard to the regulatory guides and the Standard Review Plan, e.g., the GDCs require qualified equipment but there are likely cases where equipment is not actually qualified.

The Subcommittee discussed the question of who has the ultimate responsibility for the plant. Mr. Ward noted that at a recent meeting at Region III, Mr. Keppler said he is always hearing high level people saying industry has the ultimate responsibility for the plant but over the last few years, the Congress, Commissioners, press and others are holding the NRC responsible.

Dr. Lewis discussed to what extent the NRC is responsible for pushing plants to higher levels. Mr. Ward felt that the easy wisdom is that the NRC regulates to some floor and above that one doesn't

Reg. Policies & Practices Minutes January 14, 1987 care. This floor would have some uncertainty band such that random noise does not fall below the band.

Dr. Kerr stated that it appears to some extent that the regulatory process had developed to regulate to regulations and not to safety.

It seems that once the regulations are in place they are frequently enforced by people who do not understand the safety considerations that went into them. Dr. Lewis reinforced the comment by referring to a case where a licensee did calculations using reasonable values, while the NRC did calculations using ridiculously low values. The NRC decision was to do it incorrectly for this one plant in order to be conservative for other plants.

The Subcommittee discussed the NRC's program to review regulatory requirements. Ward noted that we tend to regulate what we know how to regulate. Dr. Kerr suggested that the Subcommittee ought to give some consideration as to whether things are reasonably good or whether they need fixing. Lewis said that with all the talk about the adversarial relationship, it would appear that things are not all that perfect.

The Subcommittee discussed whether NRC does, nor should, operate on a threshold basis and INP0 operate to excellence. Ward didn't feel that the NRC regulates to a threshold level.

The Subcommittee discussed its assignment and decided that it should look into developing a better regulatory philosophy for regulation and concentrate on the NRC's role as it was intended and what it .

should be, by talking to NRC people such as Denton and Stello, and possibly some past NRC people such as Hendrie, Ahearne, and Muntzing. Also, we should see if there is anyone in the NRC at this time that is responsible for looking at such things.

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Reg. Policies & Practices Minutes January 14, 1987 Some specific questions for dis'cussion at a future meeting are as follows:

1. Should the NRC regulate to some threshold? If not to a thres-hold, then what should it regulate to? What is the rationale for regulating to anything other than a threshold?

2. To what extent is the whole body of regulatory practice really codified?

3. Should the NRC regulate to excellence?

4. Should the NRC regulate to the highest level of regulation obtainable?

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5. What is and should be the regulatory philosophy for regulation?

6. What is the NRC role as intended? What should it be?

Dr. Kerr expressed a concern that we may be putting too much empha-sis on severe accidents. A lot of training is being given on accidents which are not very likely to occur.

With regard to the Subcommittee's assignment on the Davis Besse event, it was decided to continue with the Subcommittee's plan of action with regard to the items mentioned above. It was suggested that since the impact of the corrective actions planned have not yet been felt, it would be premature to conclude the results of these actions at this time.

Mr. Ward, expressed a possible concern that the nuclear program keeps urging t5 excellence. He noted the likelihood that there is some total resource of excellence in society. He doubted this resource

Reg. Policies & Practices Minutes January 14, 1987 could be maintained in the nuclear program for the next 30 years if there are no accidents.

NOTE: Additional meeting details can be obtained from a transcript of this meeting available in the NRC Public Document Room,1717 H Street, N.W., Washington, D.C., or can be purchased from ACE-Federal Reporters, 444 North Capitol Street, Washington, DC 20001,(202)347-3700.

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