ML20206G832
| ML20206G832 | |
| Person / Time | |
|---|---|
| Issue date: | 05/04/1999 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| References | |
| REF-10CFR9.7 NUDOCS 9905100157 | |
| Download: ML20206G832 (161) | |
Text
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OR 'GLNA'.
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 1
Title:
MEETING ON NRC RESPONSE TO STAKEHOLDERS' CONCERNS Location:
Rockville, Maryland Date:
Tuesday, May 4,1999 7
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Pages:
1 - 134 V
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- CiNhbLEY & ASSOCIATES, LTD.
h 1025 Connecticut Avenue,NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 i
CERTIFICATE 9905100157 990504 P
.7 PDR F 7 9 '!
DISCLAIMER This is an unofficial transcript of a meeting of the United States Nuclear Regulatory Commission held on May 4, 1999, in the Commission's office at One White Flint North, Rockville, Maryland.
The meeting was open to public attendance and observation.
This transcript has not been reviewed, corrected or edited, and it may contain inaccuracies.
The transcript is intended solely for general.
informational purposes.
As provided by 10 CFR 9.103, it is not part of the formal or informal record of decision of the matters discussed.
Expressions of opinion in this transcript do not necessarily reflect final determination or beliefs.
No pleading or other paper may be filed with the Commission in any proceeding as the result of, or addressed to, any statement or argument contained herein, except as the Commission may authorize.
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_ UNITED STATES OF AMERICA 21 NUCLEAR REGULATORY COMMISSION l
l3.
OFFICE OF THE SECRETARY
'4-
~***
5-MEETING ON 6f NRC. RESPONSE TO'STAKEHOLDERS' CONCERNS 7
c 8-9 Nuclear Regulatory Commission
'10 One White Flint North 11 Rockville, Maryland 12-Tuesday,.May 4, 1999 13 14 The Commission met in open session, pursuant to 15 notice, at 9:09'a.m., Shirley A. Jackson, Chairman, 16
-presiding.
17 18 COMMISSIONERS PRESENT:
19.
SHIRLEY A.
JACKSON, Chairman of the Commission 20 JEFFREY S. MERRIFIELD, Commissioner 1
21 NILS J. DIAZ, Comraissioner i
22 GRETA J. DICUS, Commissioner 23
. EDWARD McGAFFIGAN, JR.,
Commissioner l2 4 l
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STAFF AND PRESENTERS SEATED AT THE COMMISSION TABLE:
2 JOE F..COLVIN,.NEI 3-
-JAMES T.
THODES, INPO 4
DONALD C. HINTZ, Entergy 5
W.G. RAIRSTON, III, Southern, Operating e
6
. Company, Inc.
7 JIM P. O'HANLON, Virginia Electric &
8 Power Company 9
JAMES R.
CURTISS, Winston & Strawn 10 DAVID LOCHBAUM, Union of Concerned Scientists 11 THOMAS W.
ORTCIGER, IDNS 12.
PAUL GUNTER, NIRS 13 WILLIAM D. TRAVERS, EDO 14 SAM COLLINS, NRR 15 HUB MILLER, NRC Region 1 16 17 18 19-20 21-22 23 24 25 ANN RILEY & ASSOCIATES, LTD.
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'l P R O C'E E D I N G_S 2'
[9:09 a.m.)
3 CHAIRMAN JACKSON:
Good morning and welcome.
4 Today',- the Commission _once again has the opportunity to meet 5
with several-interested stakeholders in a continuation of U
6' our previous meetings held in July'and November of last 71 year.
8 As before, we're meeting in a round table format 9
to promote open dialogue.
Based on feedback received j
10 following the last meeting, our goal today is to focus on a 11 more specific topic list than in the past.
Our proposed 3
12 agenda topics were culled from that feedback, as well as 13 current salient issues.
14 We will keep the agenda on the screen above for 15 reference.
We also have solicited agenda input from the 16 attendees and have left the option open to include other 17 topics, if time permits, as noted by the space for 18 additional suggested topics on the overhead.
19 Several topics were suggested by Mr. Lochbaum and 20 Mr. Ortciger.
We can address these topics as time permits i
21 at the end of our meeting or consider them as topics for p
22 future stakeholder meetings.
23 You also will note that one of my staff, Steve 2
24-Cahill, periodically will be summarizing key points on the 25 screen as we proceed.
We are entering the information age ANN RILEY & ASSOCIATES, LTD.
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here.
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The agency is committed to attaining input from as l
3 broad.a spectrum of'our stakeholders as possible.
So some i
4 of you will notice that many.of the faces at the table are i
5
-quite different from those at the last meeting.
I would 9
6 like'to thank each of you for agreeing to participate.
.7 Starting on my far right, I would like to go 8
around the room ~and introduce each of them and to extend to 9
them the Commission's welcome.
10 First, Mr.. Hub Miller, who is the Regional 11 Administrator of NRC Region I.
Good morning, Hub.
Mr. Paul
(
12 Gunter, who is Director of the Reactor Watchdog Project of j
13 the Nuclear Information Resource Service.
NIRS has been an 14 active stakeholder in NRC policy and discussions and I would 15 like to particularly.thank Mr. Gunter, because if I was told 16 correctly,-you recently were married and you cut short your 17 honeymoon to be here, and that's a real commitment.
18 MR. GUNTER:
Postponed
)
19 CHAIRMAN JACKSON:
Postponed, okay.
Even so, 20-that's a real. commitment and I really appreciate that.
We l
-21 really do.
22 Jim O'Hanlon, who is Chief Nuclear Officer of l
23 Dominion Generation,
,cxi morning.
One of his Virginia 24 po"er plants recently implemented one of our risk-informed 25' r-agulation licensing initiatives.
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Dr. Will'iam Travers,'who you all-know.
I skipped
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2 Commissioner McGaffigan, they have me out of order, but I'm 3
skipping all the Commissioners actually.
Bill is the NRC 4
Director, Executive Director for Operations.
=5 Mr. Donald Hintz, President of Entergy.
His 6
' involvement in'both license renewal and license transfer 7
will-be pertinent current input for:our discussion.
8 Dr. James Rhodes, Chairman and CEO of the 9
Institute'for Nuclear Power Operations, and he will provide
.0 valuable perspective on overall' industry performance, 1
as 11 well as the fact that he, too, was a CEO of a nuclear 12 utility.
13
.To my left, Mr. George Hairston, President and CEO 14 of Southern Nuclear Operating Company.
His experience, 15 through the mind set of a large nuclear operator, will be 16 beneficial to our discussions.
I just recently have visited 17 his Plant Vogtle and had a good time.
18 Mr. David Lochbaum, Nuclear Safety Engineer, with 19 the Union of Concerned Scientists.
UCS has provided, we-20 believe, very balanced and diverse input to the NRC and we 21' value UCS' comments and Mr. Lochbaum's participation not 22 just in this stakeholder meeting, but in a number of other 23 fora.
24 Mr. Thomas Ortciger, who is Director of the 25 Illinois Department of Nuclear.Safetyi one of the plants in y
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Illinois,. Quad Cities,.will be participating shortly as a
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pilot plant for the new assessment process.
3-The Honorable Mr. James R. Curtiss is a former NRC l
4 Commissioner.
Mr.-Curtiss is now a partner in the law firm L
5 of1Winston & Strawn.
His work on the Hill, his work as a i
'6 Commissioner, and.now on behalf of the nuclear industry, in 7
his-legal practice, allows him to bring a unique perspective 8
to-our discussions.
9 Mr. Joe Colvin, President and~CEO of the Nuclear 10
' Energy Institute.
Mr. Colvin has been active in the nuclear 11 association for over 15 years, has been a consistent
-12 participant in these meetings, and has taken a leadership 13' position in trying to drive change with respect to how
'14 nuclear is viewed nationally, as well as in the regulatory 15,
. process.
16 Mr. Sam Collins, Director of the NRC Office of 17 Nuclear Reactor Regulation and sits at the focal point of a 18 lot of what's been~ going on.
'19 I'm not specifically introducing the 20 Commissioners, since this is a, quote-unquote, Commission 21' stakeholder meeting and you're our guests, but I will 22 recognize them, so in case any of you don't know who they j
23 are.
24-Commissioner Jeffrey Merrifield, Commissioner Nils 25 Diaz,. Commissioner Greta Dicus, and Commissioner Edward 1
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1 McGaffigan.
2 We're striving to be as inclusive as possible, but 3
we recognize that not every stakeholder can be at the table.
4 So let me reemphasize that the Commission needs to hear from 5
every stakeholder, whether it is in this forum or in other 6
avenues that.we routinely provide.
7 Endeavors such as this one, though, and our others 8
are key.to the NRC continuing to improve the effectiveness 9
of its oversight of all of our' licensees.
10 I've always believed that the regulatory process 11 should be as participatory as possible, with input from all 12 the stakeholders, the industries we regulate, members of the 13-public, state and local governments, and other stakeholders, 4
14 This actually needs to be a routine way of 15 thinking at the NRC and we believe we've begun to turn that 16 corner.
However, I.must follow that statement with the 17 caveat that the involvement must always, for a regulator, be 18 balanced and that involvement must help to guide, not to
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19 dictate our decision-making.
This meeting continues to be 20 an opportune time to stop and to review what we have 21 accomplished as a result of our efforts at change and to 22 consider both what is left to be done and the cautions to be 23 considered as we proceed.
24 In doing this, we should begin by recognizing that 25 a significant change has been occurring at the NRC for some ANN RILEY & ASSOCIATES, LTD.
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S-8 1-time and that it will have to continue, and it will continue 2
as we gain insights into areas for NRC improvement as a 3
result of active stakeholder involvement.
4 I will not spend the time to enumerate the many 5
outcomes we believe we have achieved.
Suffice it to say the 6
staff continues to make very good progress on the
{
7 comprehensive tasking memorandum items and we have many 8
initiatives that are nearing fruition.
9 There'also have been an enormous number of other 10 initiatives which have not been captured in that tasking 11 memo or the tasking memo response, as well as all of our 12 day-to-day work which, on all of these things, are ongoing 13 and they're captured together with_the tasking memorandum 14 items in our planning, budgeting and performance management 15 process, about which the Commission will hold a public
'16 meeting-this afternoon.
17 I am proud that throughout this period of change, 18 we have continued our primary focus of protecting public 19 health and safety -- what I have referred to in the past as 20 holding the center.
Of course, we still have more to do.
21 There are a_ great many areas in which we've made' substantial 22 progress, but there are also many that as yet are 23 incomplete.
24 For example, although we have met all of our major 25 milestones to.date in the license renewal efforts, we still ANN RILEY & ASSOCIATES, LTD.
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have technical issues and stakeholder issues to resolve and 2
there are.even. adjudicatory issues that continue in the 3
background.
4 Upon the completion of the Commission 5
deliberation, we need to initiate and carefully monitor the t
6 task of risk-informing 10 CFR Part 50.
We're on the brink 7
of a final rule change to 10 CFR 50.59 and the maintenance 8
rule.
The pilot program for the new reactor oversight 9
process is in the near term future.
10 But that will only be the beginning of more work 11 to refine further the processes we learn from its 12 implementation.
The list goes on and on.
And all of this 13 just represents part of the reactor side of our 14 responsibilities as the Nuclear Regulatory Commission.
15 But the processes, the framework and the vision we 16 have established offer us.the right set of tools, we 17 believe, to get the job done.
I hope that all of you find 18
.cause for encouragement in the process and the changes the 19 NRC is undertaking and that I can motivate you as we go 20 through in the topical areas to comment on your perceptions.
21 These meetings in the past have been very candid 22 and'we would like to invite a similar level of interaction 23 and candor at this meeting.
24 On behalf of the Commission, I again, reiterate 25 our thanks to those who may not be at the table, including
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other members of the NRC, the GAO Congressional staff, 2.
members of the public or the press, for your interest and i-l 3
participation.
- 4 Our goal is to concentrate on a specific topic 5-list, so,' consequently, unlike our last meeting, we will
'6 move directly~into discussions in each topic area.
So to 7
that end, I would like to introduce our first topic area.
I 8
believe that all of them have.been circulated in 9
correspondence to the participants in the meeting.
10 Our first topic area is risk-informed initiatives.
11 The Commission has placed a high priority on risk-informing 12 numerous aspects of our regulatory process and for that 13 reason, we start with this area, because it's one of our 14 most visible framework changes.
15 Stakeholder input, as you know, played an 16 important part in the formulation of our probabilistic risk 17 assessment PRA policy statement and the subsequent 18 formulation and initial use of NRC risk-informed regulation 19 guidance for licensing action.
As a result, the NRC has 20 approved applications in the areas of graded quality 21 assurance, in-service testing of pumps and valves, and 22 in-service inspection of reactor plant piping.
23 We also have engendered a much improved 24' understanding of the applicability of risk assessment to 25 regulatory functions at all levels of the staff.
Still, as ANN RILEY & ASSOCIATES, LTD.
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always, much remains to be done.
We have a pending staff' 2
requirements memorandum from the Commission which will
.3.
delineate the frameworkLfor the Commission plan for
- risk-informing parts of 10 CFR Part 50, 4
5-This will be a major long-term undertaking and 6
will include -pilots :ba various initiatives and developing risk-informed definitions of terms such as safety-related 7.
8 and important to safety.
9 We also have initiatives underway to consider 10 improved fire risk assessment methods, The staff has 11 identified the. maintenance' rule change, the so-called 12 "should" to "shall" as a good starting point for 13 risk-informing Part 50.
The change to the rule is due, 14 initial change is due to the Commission within the next two 15 weeks.
16' We have a Commission briefing scheduled tomorrow 17-to help us come to closure on some of the remaining issues 18 and the revitalized 10 CFR 50.59 also is due to the 19 Commission next week.
20 We believe all of these initiatives will add a 21 greater degree of objectivity and coherence to our 22 regulations by arriving finally at risk-informed definitions 23 and scopes for the requirements under which reactor 24 facilities operate.
With all that lies ahead of us, we need 25 the input and so let me begin to get the input by asking Mr.
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.O'Hanlon if he would address this topic first, and then I
'2 would turn to Mr. Lochbaum for any comments he would wish to 3
make, and then we will open the discussion.
4' As I said, Mr. Steven Cahill will be trying to 5
capture the essence of the discussion as we, in fact, go l
6_
along.
1 7
Mr. O'Hanlon.
8 MR. O'HANLON:
Madam Chairman, Commissioners, good 9
morning.
I appreciate the-opportunity to participate in 10 this stakeholder meeting.
11 We support the use of risk information as part of la the regulatory process.
Risk information has already 13 allowed us to focus our resources and attention in some 14 areas where safety and efficiency have been improved.
15 You've mentioned the example in the introductory comments.
16 We've implemented risk-informed ISI, in-service 17 inspection, at one of our Surry units.
As a result, some 18 systems have decreased.the inspections, but some have 19 increased, and the core damage frequency has improved.
20 While we do endorse the use of risk information, 21
.let us not forget.that the existing body of regulations have 22 produced an enviable safety record.
As we consider l
i 23' producing an entire new body of regulations, we must ensure 24 that the safety and economic benefits are commensurate with i
1 25 the resources required to develop and implement the new I
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resources.
2 What I'm trying to say here is we must apply the 3
risk-informed 10 CFR 50 in the right areas.
4 I suggest that we keep some perspective with the 5
issues that we tackle.
I'm particularly interested in 6
seeing that the necessary resources are given to the 7
forthcoming license renewal applications, and that's another 8
topic we'll be talking about.
9 Timeliness is also a factor that we should keep in
\\
10 mind, and I will mention a recent example.
The NRC issued, 11 on March 29, a final rule providing some flexibility in the 12 frequency of independent audits for emergency preparedness 13 safeguards and security plans.
That's great.
Until you 14 remember that we submitted the original petition for 15 rulemaking in December of 1993.
16 This was a rulemaking that received fewer than a 17 dozen public comments, all but one in support, and raised no 18 significant safety issues.
19 It's in the spirit of timeliness that I recommend 20 that we know move expeditiously to risk-inform the scope of 21 the maintenance rule and to resolve the questions remaining 22 regarding the implementation of 10 CFR 50.59, and you 23 mentioned both of these just a moment ago.
24 Thank you, Madam Chair.
25 CRAIRMAN JACKSON:
Thank you.
Mr. O'Hanlon, I ANN RILEY & ASSOCIATES, LTD.
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actually have a question for you.
2 MR. O'HANLON:
That's not surprising, ma'am.
3 CHAIRMAN JACKSON:
That's right.
You know my i
'4-personality and my reputation, which is all true.
You made 5
the statement'that we must apply a risk-informed 10 CFR Part
'6 50 in the right areas.
One could potentially pose the 7
question that if one is really doing risk-informed 8
regulation, that by definition, that' focuses you in the 9'
right area.
10 Would you comment on that?
As opposed to a priori 11 deciding what areas can be risk-informed.
Is not 12 risk-informed regulation an overall comprehensive approach 13 to. focusing on the right areas?
14-MR. O'HANLON:
Yes.
What I'm saying is that I 15 don't think you can take all of 10 CFR 50 and just replace 16 it at once.
I.hink you can take a look at the entire body 17 of-10 CFR Part 50 and use risk information on that body to 18 find out what areas it makes sense to go in and use risk 19 information would be beneficial, and not just say we're 20 going to change everything, where there is going to be 21.
-little benefit of doing that.
22 My personal feeling is that when we do that, there 23 is going to be a spectrum and there's going to be areas that 24 we're going to want to focus on quickly and there is going 25 to be sufficient clarification that those are the areas of ANN RILEY & ASSOCIATES, LTD.
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1 high safety significance and we can gain from that, j
2 I~think there is going to be maybe a high, medium 3
and low level of areas.
But some of them, and in-service 4
inspection is an example, it makes sense that you can look 5
-at this particular area, this block, in total, that area, i
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risk-inform that, and then use it as an option for I
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7 regulation, as opposed to just forcing everybody to go 8-
.through it.
9 CHAIRMAN JACKSON:
Mr. Lochbaum, do you have
.10 comments you wish to make?
11 MR. LOCHBAUM:
I guess the only comments we would 12 have would be on the 10 CFR 50.59.
The old rule is any increase in the margin of safety required prior NRC approval 13 14 and that was -- if not the most abused rule, was probably in 15 the top five, where licensees had trouble following that 16 rule.
17 The new rule change seems to add this gray area of j
18 margin of safety.
Considering the old rule was black and 19 white and there was trouble following it, diluting the rule l
l 20 and creating this gray area doesn't seem to be really 21 addressing the issue at hand.
22 So we're not overly confident that that will solve 23 the problem that has afflicted this rule for so many years.
24 CHAIRMAN JACKSON:
Commissioner Diaz, would you 25.
care to make a comment?
I know you've thought a lot about ANN RILEY & ASSOCIATES, LTD.
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1 margin of safety issues.
2' COMMISSIONER DIAZ:
I will tend to agree with Mr.
=3 Lochbaum that ambiguity in any rule doesn't help anybody in 4-the long run.
I think that is an issue that we have to 5
' face, that sometimes we provide flexibility with the I
6 intention of making the rule more useable and it ends up 7
_being less' useable and creates more problems.
8 So in many ways, providing greater definition is
'9-the right thing to do.
I do believe that in the case of l
10 50.59, we actually have a very strong backbone in the tech I
1 11 specs that actually support whatever we're going to be doing 12 in the area of 50.59 that will not really allow a margin of 13 safety to deviate.
14 But how they interact, how they are supported, I 15 think, is an area that probably needs further definition.
16 COMMISSIONER JACKSON:
Anyone else?
Sam, would 17 you like to make a comment?
-18 MR. COLLINS:
I think the comments up to this 19 point are appropriate.
I think I would prefer to look at 20' the-existing rule as being perhaps too restrictive and in 21 the risk-informed performance-based arena, what we need to 22 be careful of is that we're able to measure, at any point in 23 Ltime, where the new proposed rule allows margins to be, 24' given that there are margins and there are safety areas that 25 exist for consideration as we make changes to the plant.
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1 We have inspected this area quite heavily.
I'm 2
not sure I.would agree that it's been abused.
I think 3
there's been perhaps interpretations that were necessary by 4
the agency.and that's'probably a result of it being so 5
restrictive that none is none.
That's hard to disagree i
6 with.
7 Any, rule change is going'to provide for some 8-
~ period of transition.
I'think we~need to monitor that.
i 9-We'll-do that with the licensees and with'our inspeccors, j
i 10 Ultimately, the language has to be clear enough so that the 11 licensees-are provided the ability to comply in a reasonable 12 fashion.
The effectiveness of the rule can be judged 13 objectively by our stakeholders, and, as importantly, it has 14 to be inspectable so that the inspectors can have a 15 reasonable realm to deal with it as far as verification of 16 compliance.
17,
'Then after that, it's a matter of enforcing our 18 regulations.
19 CHAIRMAN JACKSON:
Commissioner McGaffigan.
20 COMMISSIONER McGAFFIGAN:
This is a little bit off 12 1' the subject, because 50.59 is not going to be a 22 risk-informed rule. But'I'd just like to defend what I l
23J believe we're headed towards, which is to provide some I
24 additional flexibility.
25 In my view, it's a waste of resources.
It's I
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risk-informed.only in the sense that looking at trivial 2
changes and forcing those into license amendment space is 3
something that's not a good use of either our or licensee 4
resources.
So I basically believe we're in the right 5
direction and the margin of safety criterion turning into a 6
fission product barrier criterion I think is appropriate.
7 I was interested -- I don't know whether I could 8
make a suggestion to the Chair.
Mr. Ortciger had some 9
interesting comments.
10 COMMISSIONER JACKSON:
I'm coming to him.
He's on
'11 my list.
12 COMMISSIONER McGAFFIGAN:
In this area, and I 13 thought he might be interesting to hear from.
14 COMMISSIONER JACKSON:
Mr. Ortciger.
15 MR. ORTCIGER:
That was a very good segue.
We, as 16 a department, certainly. support the activities of the 17 Commission and as most of the members are aware, we have had 18 a resident inspector program in Illinois for over nine years 19 now, and it has been based on risk information.
20 We believe it's a solid and strong program and we 21 support the activities of the NRC.
22-What we find, though, of concern is that there is 23 no requirement for quality PRAs.
We believe the NRC should 24 require PRAs of at least Regulatory Guide 1.174 quality.
We 25 also'believe that this should not be a voluntary program, ANN RILEY & ASSOCIATES, LTD.
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'l but has to move toward an overall, overarching, 2'
risk-informing process.
3 If both the industry and the NRC is serious.about 4
modifying _their regulations and inspection activities, it 5
cannot be done on this voluntary basis.
,That is why, 6
although this is the way the process could move, we don't 7
feel that it is demonstrating that that is'where it's going 8
to go, and that is of our concern.
9 If the public is going to feel that we are 10 attempting to do something that's going to be an 11 improvement, then it's not going to be acceptable as a 12 voluntary process.
Both the regulated community and the 13 regulator are responding and I believe this is a positive 14 attitude, but we should make the best use of our risk 15 information and carry out our responsibilities thoroughly 16 and not on a voluntary basis.
17 I would leave it at that.
_18 CHAIRMAN JACKSON:
Sam, did you want to make an 19 additional comment?
20 MR. COLLINS:
On the topic, but off the direct 21 remarks just made, I would like to respond to Mr. O'Hanlon's 22 issue of' timeliness, which I think.is appropriate to 23 validation.
Responsiveness is another way to put that 24 particular goal.
5 We_did receive the VEPCO petition in January of 2
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'94.
Our tracking would indicate in a more current sense of 2
how we do business, that we really focused on that.
In May 3
of
'97, the proposed rule package was put together.
We 4
received Commission approval in the beginning of '97 to 5
pursue that package and since then, I think it's marched 6
along fairly smartly in the process.
]
7 So I do acknowledge the comment.
It's a valid 8
issue.
I'd like to think, based on the current processes, 9
that we are capable of being more responsive and looking at 10 the back-end of the process.
I think it's worked well once 11 it came into the process that we have now.
We're focusing 12 and prioritizing our work.
It's validation.
13 CHAIRMAN JACKSON:
Mr. Colvin, please.
14 MR. COLVIN:
Madam Chairman, I'd like to go back 15 to a question you asked Mr. O'Hanlon and then segue into the 16 issue of PSA and risk application.
I think that if you look 17 at Part 50 of the NRC's regulations, there are probably, 18 depending on how you count them, if you count each part and 19 each appendix and so on, in round numbers, there's a couple 20 hundred of them.
21 If you look at which ones really apply to a 22 licensee as compared to what directs the agency, there are 23 probably less than a hundred.
We counted them one time and 24 if my memory recalls, somewhere about 90 parts of the CFR 25 Part 50 that really a licensee regulates the day-to-day ANN RILEY & ASSOCIATES, LTD.
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.1 activities of the plant.
2 So I guess if we're looking at risk-informing Part 3
50,'there are certainly some regulations that would be 4
naturally outside of that in how the agency does business, 5
how it's organized and other factors.
I mean, just to kind 6
'of set those aside.
7 I think that if you then go down to the 8
regulations that affect'the licensee day-to-day, there is 9
still anothe'r wide spectrum of regulations which there would 10 be a benefit to the agency and to the public and to the 11 licensee to risk-inform.
12 General design criteria, for the most part, I 13 would say, probably don't naturally fit into moving into a 14 risk-informed analysis and so on as the starting point.
I 15 think that those are things which have been the foundation
~16 for safety and ought to be perhaps looked at, but at a later 17 time.
18 But there are other regulations which, in fact, 19 we're working on, whether we're talking about the quality 20 assurance program or we're talking about the maintenance 21 rule and other aspects, or perhaps even security, where 22 there is a great benefit to taking that focus.
23 So I think that it will -- while we're talking 24-about. risk-informing all of Part 50, in reality, we're 25 talking about risk-informing those parts of the regulations ANN RILEY & ASSOCIATES, LTD.
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which naturally fit, and~there would be benefit to take that 2.
resource commitment to make that transition.
3-I guess the second point on the PSA and the 4
application of'PSA, I think that we ought to look at, when 5
we talk about risk-informed, whether we're talking about 6
doing it all in PRA or PSA space or we're talking about 7
using-the empirical knowledge and experience that we've had.
8 I think if you view that in the context of, say, 9
an ISI or.an IST program, we're really risk-informing it 10 based upon, in large measure,- inspections that have shown 11 the results over a long period of time, where we have a very 12 vast number of empirical-data, and then kind of taking that 13 and using some of the risk tools.
14 So I think it takes a balance of approaches as we 15' see it today and use the tools that are available to us.
So 16-while I agree with the comments about the importance of 17 moving forward, to get common agreement and a common 18 baseline on PSA and other technologies, I think that's an 19 important step, some of the applications don't necessarily 20 require that to, in fact, reap the benefit for the agency or 21 for the public.
22 CRAIRMAN JACKSON:
Commissioner Diaz.
23 COMMISSIONER DIAZ:
It just occurred to me that when you're 24 trying to prioritize what should really be risk-informed and 25.
we look at the foundation of even Part 50, isn't ANN RILEY & ASSOCIATES, LTD.
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risk-informing how we deal with structures, systems and 2
components, the fundamental corner piece?
A question.
3 CHAIRMAN JACKSON:
Joe.
4 MR. COLVIN:
I guess since you've tapped me, I
. ill try to answer that I.think the answer is yes.
I 5
w 6
think what we.have to look at is where there are -- I mean, 7
when we go.into risk-informing the. regulations, we're trying 8-
'to measure, in some way,-the connection between what's-9 required by the regulation and how that provides an adequate 10 levelfof protection of public health and safety.
11-In the areas in which we have breakdowns in that 12 are typically within the systems, structures and components 13 of the facility and how they're maintained and those factors 14 and the reliability of those systems and so on.
15 So I said,- I guess, from a natural, if you want a 16 gut feeling, I think that is a natural place to start.
'17 Also, I'm not sure that I would want to be limited, because 18 we might find, as we move forward, that there are other 19 opportunities which give promise to making some changes that 20.
would be beneficial.
21 CHAIRMAN JACKSON:
I had a couple of questions I 22-
, wanted to pose.
A current issue of debate is what forum 23 should be used to risk-inform the scope of some' rule; that 24 is, the embodiment of language directly into the body of the 25 rule or in associated guidance documents.
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Is there a point of view that different panelists I
2 have on this?
I would be interested in hearing from you.
3 Yes, Mr. Lochbaum.
j t
4 MR. LOCHBAUM:
I guess our view is it should be in 5
the rule and not in the guidance documents, because that
{
6 gets back into what we feel has plagued the industry for a j
7 while, the subjective application of guidance documentation.
8 Some regions are more strict than others.
9 So if you put it in a rule, that would be our 10 preference, because it tends to promote consistency.
- Also, 11 it tends to promote public comment on a proposed rule as 12 opposed to public comment on a guidance document.
It's hard 13 to get people really enthused about commenting on a guidance 14 document.
It's hard to get them enthused about commenting 15 on a rule, but guidance documents are even tougher.
16 CHAIRMAN JACKSON:
Yes, please.
17 MR. HAIRSTON:
I wasn't assigned this one, but my 18 personal opinion is on the rule, we ought to have our 19 principles in the rule and I think all too often we pass a 20 rule or you pass a rule and after you've had several pilots 21 or the first plants are under that rule, things come out i
22 that you hadn't thought about.
I i
23 I think we may be into some of that right now in 24 license renewal.
I would tend to have the rule set the i
25 fundamental principles and the fundamental rules that you' re 1
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. going to be governed by'and then have a guidance document 2-that is somewhat more flexible to give the specifics, i
l 3
CHAIRMAN JACKSON:
Actually, that raises an 4
interesting point, because there's been a lot of discussion 5'
about' risk-informing the scope of a rule, and I could argue 6
that at a certain level, I don't know what that means,
.7 because in the end, the scope is plant-specific, because'the 8
plants.are designed and operated differently.
.{
9
.But what one really wants to risk-inform is the fundamenta1' principles or the scope-determining methodology, 10 11 and then-it has to be fleshed out, as you say, with flexible
-12 guidance and, if necessary, with some examples that speak to 4
13 how then those principles are to be applied on a 14 plant-specific basis.
15-I know when one begins to talk about being 16 plant-specific, it make some people shudder, because then 17 they-think arbitrariness and lack of consistency.
18 But I unist say in looking and having thought about 19
'this a long time, I fail to see how one can risk-inform the i
20 scope of a rule for all time,.for all plants.
21 Mr. Curtiss.
22 MR. CURTISS:
Let me respond to a couple of points 23 that'have come up and just revert to one of my favorite 24 topics, which is the maintenance rule, because I think it 25 illustrates the point that you're making.
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_I guess I would focus on three aspects of the
'2-experience that the agency has had with this initiative.
3
'The first is that as I think Mr. Hairston has said, 4'
principles need to be established in the rule, but they need 5
to be established with: clarity.
So that as one looks at the 6
regulation, whether it's the licensee that is seeking to 7
ycomply with the regulation or the staff that is seeking to 8
develop _ guidance for the regulation, that the regulation 9
sets forth, in a clear and unequivocal way, what the i
10 Commission's expectations are.
1 11 I think in this particular area, the Commission's
{
12 effort to follow the development of the guidance and take 13 the level of interest has been key to the success of the 14 rule, because this is a first of the kind initiative.
15 I think the second point that I would make, and it 16 really goes to the juncture that you're at now with the 17 maintenance rule, I think it's a key juncture, is that over 18 the,past four or five years of its implementation, what 19 we've found is that the risk insights, as I think Joe Colvin 20 has said, that have been. gained by the inspections and what 21 we know with the pilot inspections and the application of 22 the-rule, have served, I think, to inform, to a greater 23 extent than existed in 1991, how a mid-course correction
~24 might be made in the regulation itself, because the 25 regulation may drive a scope that is broader in terms of a ANN RILEY & ASSOCIATES, LTD.
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.1 principle-establishing' framework.
2 I've reflected a lot on that and on your emphasis, 3
Chairman Jackson, on risk-informed and performance-based, 4
.and,. frankly, what I think has happened.is that when the 5
. rule was initially promulgated, it was really more 6
performance-based.than it was risk-informed.
We had the 7-concept,.I think, at the time, that performance-based ought 8.
to mean we're focused on results, but not necessarily the 9
prescriptive programs on how to get there, and we had a good 10 sense, I think, of what needed to be done to risk-inform-the 11 rule,-but certainly not a' sense that could benefit from 12-everything that's happened since the rule was promulgated 13 and as it's been implemented.
14 So I think in answer to your question, how do you 15 establish the right risk scope and risk focus, the 16 maintenance rule, I guess, stands for the proposition that 17 it may be an iterative process, where, as you develop risk
~18 insights and where there is a need for mid-course correction 19 of the rule itself, I think the receptivity of the 20 Commission today to making that change is important.
21 But secondarily, the guidance that needs to lay 22 out how that rule is implemented is something that is going 23 to be the fundamental forum and I think the guidance that's 24 been developed by the industry and embraced by the 25 Commission in the joint guidance development process is a ANN RILEY & ASSOCIATES, LTD.
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- good example of how that can work.
2 But fundamentally, the clarity in the rule and the 3:
oversight of the development of the guidance process, I think, are ultimately going to be the key.to the success of 5-any rule.
6
. CHAIRMAN JACKSON:
Yes, Mr. Colvin.
7.
MR. COLVIN:
I' wanted to follow up on that same 8
, question.
I appreciate Mr. Curtiss going first, because I 9
know that all of you dubbed me the historian previously on l'0-the maintenance rule.
He precedes me in that, and with that
'11.
honor.
12
.I think that the answer to your question on the 4
13
. guidance is really a combination of answers.
I think the 14 panelists, the participants have already addressed that 15
-fairly-well.
I'd just like to make a couple comments.
16 I think we need, when we. talk guidance, we need to 17 decide what do we mean by guidance.
I think that goes back 18.
.somewhat historically.
If we talk.about a regulatory guide, 19 which provides guidance, and we take it to what it says in 20 the introduction, that that regulatory guide is'one 21 acceptable way to meet the intent of_the rule, not the only 22 way,.then.we have a guidance document that provides the type 23' of flexibility that was. intended.
24 I think historically, however, what we saw was
.25" that was theLexpected way and, in many cases, through the ANN RILEY & ASSOCIATES, LTD.
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inspectics process, was used to get each licensee to follow 2
that particular path.
3
.The other point I would make on guidance is that 4
as we move forward to issue a new regulation or another part
's or to make a change, it's important to communicate the 6
expectation of the Commission in that process,'the 7
rulemaking process, to the degree that it will allow 8-stakeholders to meaningfully comment on that rule and to 9
provide.that kind of. feedback.
10 So it's important for the Commission, I think, and 11 the Commission has taken these steps, to a large degree, as 12 to provide guidance documents and definitions and other 13 materials as part of that process to allow that to, in fact, 14-work to the highest degree possible.
15 I think it's in that context that it's important 16 to get the guidance out, whether it's in draft or other 17 processes, or to develop a process that solicits input on 18 the guidance, such as we did in the maintenance rule or such 19~
as we.have done in other major rulemaking, such as even goes 20
.back to the station blackout rulemaking, where we had an 21 industry /NRC/ stakeholder set of meetings to develop an 22
. acceptable way.
'23 In fact, that turned out, in most of those cases, 24 to be the normal way that people use, because it turned out 25 to be the most efficient way possible.
So that helped both ANN RILEY & ASSOCIATES, LTD.
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the agency and the licensees to follow that process.
2 CHAIRMAN JACKSON:
I would very much agree with 3
you-that'it's important that the Commission should make its 1
1
' intention clear in moving to make a rule change or 4
b 5
promulgating a new rule, because all too often, we end up in 6
a mode of trading language as opposed to understanding what i
7-we're trying to accomplish, what we, as a regulatory agency, 8
are trying to accomplish and how that plays off against what 9
those.we regulate and members of the public think need to 10 occur in an area.
11 I think that that is an area we can improve upon, 12 in fact.
Sam, I'm going to come to you, but I think Mr.
13 Gunter wanted to make a comment.
14 MR. GUNTER:
I would just comment that this is a 15 particular area of concern for us in that first of all, I 16 think that this whole risk-informing p'rocess should be put into light of.the stage that it's coming to this industry, 17' 18 where we're seeing, from a public interest point of view, l
19 we're seeing a beleaguered industry faced with more 20 uncertainties with regard to age-related degradation or a 21 whole host of issues that are placing greater economic
'22 burdens.
23 While the term flexibility in regulation is being
'24 used here,.what we interpret that to mean is elasticity in 25 regulation, in that literally the regulations are being l
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provided, the ability to stretch to meet a particular 2
' economic concern faced by'the industry.
3 I think this is most clearly represented in an issue that we've been.following very closely in terms of 4
5-fire protection and the effort to risk-inform fire 6
protection derives completely, from our perspective,'out of 7
the economic hardship brought on by widespread deployment of 8
inoperable fire barriers and fire penetration seals.
9-So in order to meet that challenge, rather than 10 replace the system with an. operable barrier, that we're now l
11 looking to risk-inform the regulation to provide this 12 elasticity.
13 But when we talk about holding to the center on 14 public health and safety, I don't believe that you do the issue justice by allowing this stretching of the regulation 15 16 to meet what we debate to be the real issue of lessening the 17-economic burden to the industry.
18 CHAIRMAN JACKSON:
Well, let me make one comment 19 to that, and it's.just a statement of fact.
From my point 20 of; view, my interest in risk-informing fire protection 21 regulation doesn't have to do with inoperable fire barriers, 22-per se, but in having to do fundamentally with a focus of 23 mine on risk-informing everything we do.
That's number one.
24
-Secondly, early in my-tenure, and this may make 25_
some people shudder, I had always made the point that we ANN RILEY & ASSOCIATES, LTD.
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should not regulate by exemption and that if one finds that 2
one has a rule or a requirement that somehow de facto makes 3
us have to exempt everything, then we need to look at 4
whether the rule is necessary or not or what fundamentally 5
is wrong with the rule, so that it has a coherent way of 6
addressing differences in plants, so that everyone is not 7
handcuffed the same way, but ensures that we cover what 8
needs to be covered from a health and safety point of view.
9 But we may have gotten into a situation where --
10 it's not unlike what I was mentioning earlier, where we end 11 up trading language and the discussion shifts, so that one 12 has lost sight of what it was that one wanted to accomplish 13 in the first place.
14 But I don't believe that I or the Commission 15 believes that it's meant to provide an elastic blanket over 16 things that are important.
It may, again, I think, because 17 of this issue of maybe our needing to improve in stating 18 intent, that there are conflicting messages that get sent.
19 Let me go to Sam, and then I will come to 20 Commissioner McGaffigan.
21 MR. COLLINS:
Just taking the opportunity to 22 comment on Mr. Gunter's issue.
I think it's a valid issue 23 that we cannot afford to give the impression or, by 24 practice, look at only one side of risk-informing.
The 25 Chairman is fond of saying it's a double-edged sword, and ANN RILEY & ASSOCIATES, LTD.
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1
' truth in,the process application should have us applying L
I 2
both sides of that instrument.
3_
Fire. protection may be a very good example, as we 4
went-through the process, Paul, to try to understand fire 5
protection better in.a risk-informed manner.
I had a
'6-meeting. yesterday with staff on'a package that's going to 7
-the Commission on all of the attributes of the fire 8
protection program.
9 There are multiple barriers, as you know, fire l
10 penetration seals is just one, there are others, for the
'11 prevention and the detection'and mitigation of fires and 12 then the safe shutdown aspect.
13 Some of those are probably more important than 14 others, given those multiple bets.
Some may very well have 15 to.be heightened'as far as our existing requirements under a 16 risk-informed rule.
Others may be less.
17 But what we have to do is strive for that balance 18 and not look at just one side of risk and then be able, in a 19 scrutable fashion, not only to the Commission, but to the-20 other stakeholders, to indicate why those processes depict 21 the requirements the way they are.
Then they're subject for 22 debate.
.23 So I think we do have, when we look at risk, a 24 tendency to look_at how that would benefit not only the 25 industry in applying their limited resources, but in the L
I L
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staff.
We can't lose sight of the fact that maintaining the 2-safety aspect of how we measure our outcomes and our 3
attribute list ensures that we look at the escalation 4
necessary, and then we'll be' judged based on that.
5 My original point was going to be on the question, 6
Chairman, you asked about how to structure the format for 7
providing for risk information or risk insights.
Working 8
with the program office and the staff and hoping to provide l
9
. guidance and processes for Hub and the regional 10 administrators, particularly the inspectors, I believe we 11
'have to. deal with the hierarchy.
There has to be some 1
12 underpinning of requirements, well understood, probably 13 initially deterministic, that set the framework for our 14 bounds as far as regulations and limits and how much is 15 enough, in that. traditional sense.
16 Then as we move forward, we become smarter.
We 17 apply new technologies.
We use industry experience.
Under 18
.the auspices of applying risk-informed, we have to be able 19 to come back to a center of what is risk-informed and what 20 do you apply it to, whether that's structures, systems and 21 components, as applied under the tech spec definition, 22 whether it's the configuration risk management program, and 23 whether the general framework applies to Reg Guide 1.174, I 24 believe we need to keep coming back to a center in that 25 I'
regard and use those. languages consistently.
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I would agree with Mr. Hairston that I believe 2
rules can be encumbered with too much language, but they 3
need to point in a direction.
They need to allow the 4
application of different processes and then bound those 5
processes and point to the application of further guidance 6
that may actually be a little more flexible, but not so 7
much, as Mr. Lochbaum indicated, that it's inconsistent.
8 Where the rubber meets the road at the interface 9
with the inspectors and the reviewers, there needs to be 10 enough guidance such that there is consistency and coherency 11 in how we do our work.
12 We've learned recently, the maintenance rule is a 13 good example, that the use of oversight with a light ~ touch, 14 which means that inspection findings are run through a 15 common place, enforcement may have an oversight board, 16 training is always an issue, and providing updates to our 17 inspectors and to provide for the turnover, we can't lose 18 sight of the back end of our processes wherein we reinforce 19 the application of these rules to provide feedback and 20 experience.
21 So there is as much of that which is ongoing 22 forward effort that has to be addressed as structuring your 23 rule.
So I think we're learning that and we have that set 24 up for 50.59, for example, where we presume that any change 25 to the maintenance rule as far as scope would have a similar ANN RILEY & ASSOCIATES, LTD.
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process.
2 CHAIRMAN JACKSON:
. Commissioner McGaffigan.
3
. COMMISSIONER McGAFFIGAN:
I just want to go back to the fire protection and back to some of the points the I
4 t
5 Chairman made.
The fundamental problem, as I said at the 6
Commission briefing on this, I think, goes back to the
~
7 history of the Appendix R rulemaking.
The industry 81 representatives could correct me, but I believe that's the 9
last. final rule of the Commission that was actually 10 challenged in U.S. Appeals Court.
11 If you read -- I think it's Judge Mickva was the 12 chair of the panel, and a very liberal panel of the U.S.
13 Appeals Court came awful close to throwing that rule out on 14-the grounds it was arbitrary and capricious and arrived at 15 at-the last minute, with all sorts of new things added.
16 That was the industry argument.
And they said, well, we'll 17 not overturn the rule based on the NRC pleadings, but we're 18 going to grant exemptions to everybody left, right and 19 center.
20 So in some sense, and that was our main pleading 21'
.and they said give them the flexibility the NRC claims 22 they're going to use, we will not find the rulemaking --
23 this is'a non-lawyer describing a judicial decision, I will 24 add.
But that's a failed rulemaking, in some sense.
25 We now have lived for, what is it, 17 years, 18
[.
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-years with a rulemaking that just was not done very well and 1
2 where we promised, in order to get the rule not overturned, 3
.that we would be using exemptions.
4 CHAIRMAN JACKSON:
But rather than improve the 5'
' failed rulemaking, we're trying to do it in guidance as 6
opposed to'doing a rulemaking.
7-COMMISSIONER McGAFFIGAN:
At the moment, I think 8
we're trying to do a consolidated guidance to try to keep 9
the practice under this rule consolidated in one place and 10 then we're going to think about risk-informing once we get 11 some standard from some standards body, as I understand it.
12 But basically, I think the consolidated guidance 13 the staff is working on is going to try to consolidate the 14_
practice'under which we have granted exemptions left, right j
15 and center for the last umpteen years.
16 But as I say, going back and trying to be an 17 historian, and I'm not one, and I'm not a lawyer either, 18 that the problem originated with the original rule and it's 19 probably the epitome of how;not to rule-make.
20 CHAIRMAN JACKSON:
Yes.
21 COMMISSIONER DIAZ:
This is an issue that I think 22 is very fundamental..
I do believe that you can risk-inform 23 a scope in a rule by providing a series of definitions.
The 24 bottom line is what do youfrisk-inform.
What you need to 25 risk-inform is two things.
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-1?
.First, you needEto risk-inform the decision-making of the 2-licensee, so they have'a boundary, they have an area that 3-they.have to work with,.because that's what rules are.
4
.They're going to exercise, they're going to manage.
So the 5
rule has.to be clear on what the licensee is going to do.
6.
The second is.that, of' course, we have to be able
'7 to see that those requirement's are safety -- are risk-bound, 8
are clear,-and-that we can-enforce it.
9-The thing with'the' guidance, and there are a few 10 people in here that have a' lot more experience than I have 11 with guidance, is that it is a document-with a certain 12 amount-of comfort as existed between the staff and the 13 licensees.
There has always been a little bit of trade-in 14 and.a little bit of flexibility on it, and I think that's
,15
'okay.
l 16 I thinkithat should be th'ere, but we are at a 17 stage in'which further definition in the front end could I
18 actually make the guidance better, make the guidance more 19 focused, have the flexibility that is needed operationally,
'20 to have the der'.nition that is.needed, so the people out
-21
' there that are doing the work know what they have to do and 22 for us to know where we have to focus.
23 I think this tradeoff is a very important thing.
24
.This is where, quoting Madam Chairman, the rubber meets the 25' road, because people are really many times, quote, regulated i'
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by the guidance.
If the guidance is fussy, then the 2
. enforcement is going,to;be' fussy or the people are not going
.3-to'do it right.
4 There has to be some convergence on how much 5
flexibility and how much the rule can have.
I think this is 6J Eul area.that really requires additional effort.
7' CHAIRMAN. JACKSON:
You opened a kind of a 8
Pandora's box from a consistency point of view, and let me 9
just make two comments.
10 One is I don't disagree with you, frankly, from 11.
.the point of view of definition, but when you begin to talk i
12.
definition, you're not talking about risk-informing the 13 scope.
You're talking about bounding what people do and how 14 they go about doing it.
That's what the definitions 15 accomplish.
16 They don't set a scope for all time for each
'17 plant, and that's the point I really wanted to make.
So I 18 don't believe we're disagreeing, but it's a question of what 19 you mean by when you talk about risk-informing the scope.
2 CF It's risk-informing -- you're having definitions that allow 21 you to make risk-informed determinations in given cases 22 within some bounds.
23 But we have to be. careful about arguing that it is 24 very important to get these fundamental definitions down and 25 fundamental underpinnings and we go about it apace with ANN RILEY & ASSOCIATES, LTD.
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. respect to certain rules and then we're in an area like fire 2
protection and you say we don't want to regulate by 3
guidance, then.we don't want to regulate by guidance.
1 4
So in the end, the Commission is going to have to, i
'S in my~ mind, it may not be now, just out of expediency, but i
6 it has to address this issue of what is the fundamental 7
underpinning of fire protection and what are you going to do 8
about it.
That's not biasing how it comes out one way or i
9 another, but we're talking about consolidating guidance and 10 doing various things with guidance, and in the one case, and 11 that's okay, but in the other case we' argue for months that
'12 we have to get the fundamental rule right, 13 I'm arguing, as an operational principle, from my 14 perspective, for a regulatory agency, we have to get the 15-fundamental underpinnings right in all of these key areas.
16
.So one way or the other, we're going to have to 17 come back to fire protection, is my perspective.
But we've 18 been arguing among ourselves.
I'm really interested in 19 hearing from some of the industry folks, because you may 20 tell us that we're walking off the planet here.
21 Mr. Hairston, I don't know if you have any 22 comments you want to make.
23 MR. RAIRSTON:
Actually, this is a issue I'm going 24 to lightly address in license renewal, where you do have 25 very good guidance in the rule, and I think there is an ANN RILEY & ASSOCIATES, LTD.
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' issue or a point that we may be overlooking.
i l
2" As you' develop the guidance, somebody has got to 3'
ensure that.the' guidance is in accordance with the
'4 principles of the rule.
5-CHAIRMAN JACKSON:
That's true.
6 MR. HAIRSTON:
And sometimes the problem is not 7
the underpinning of the rule, but how we read.that.
We've 8
said-it's very important to understand where is the 9-Commission coming from, what was the background.
We've
.10 learned a' lot out of the maintenance rule.
'll So I don't think you can write all the guidance-in
.i 12 the rule.
It just won' t work.
We've proved that.
If you l
13 do, we're back to prescriptive regulation.
14-CHAIRMAN JACKSON:
That's right.
15-MR. HAIRSTON:
But I.think it's a lot easier to 16 sit-up here and talk about this than to go out and do it.
I 17
.just. appreciate the fact that you all are struggling, staff 18 and.the Commission is struggling with this issue, bacause I j
19 think it's a fundamental issue that has not been struggled 20
'with in the past, and I think you ought-to be commended for
]
'21
'it.
.g.
22 CHAIRMAN JACKSON:
Thank you.
Mr. Hintz, do you 23 have any thoughts about this?
.o 24 MR. HINTZ:
I dcn't think I have.any thoughts that 25~
= haven't already been covered.
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CHAIRMAN JACKSON:
Mr. O'Hanlon, do you have any-2 thoughts on it?
~3
.MR O'HANLON:
Nothing further to add.
~4 CHAIRMAN JACKSON:
Okay.
Are there any further 5
comments anyone would like to have on this general topic?
I 6
thought what I would do is that we would move on.
It's not 7
in the order you saw things listed, but I think we ought to 8
discuss another risk-informed change process, and that has 9
to do with the revision of our reactor oversight program.
10 We began with some focused attempts to improve the 11 objectivity and transparency of the senior management I
12 meeting assessment processes, with eliminating programs like 13 the watch list and-the SALP, and then transitioning to an 14-annual meeting schedule.
15 We had an intermediate attempt to improve the 16
-objectivity, transparency, scrutability, predictability, et 17
. cetera, of the senior management meeting process, and that 18 was IRAP, but recognizing the flaws in it, the Commission 19.
really had the staff do an overall rethinking of all of our 20 processes, including inspection assessment and enforcement.
21-That rethinking has occurred in terms of 23
-cornerstones of safety-as a coherent starting point for our 23 reactor oversight and flowing from that and with that, we 24
.have developed and will be-implementing a risk-informed 25 baseline inspection program and our review of enforcement ANN RILEY & ASSOCIATES, LTD.
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)
has led to a new direction for the enforcement program to I
1 2
compliment the assessment process.
3 As you know, the new process will use action thresholds that are consistent with our recently issued Reg 4
5-Guide 1.174, which is entitled An Approach For Using 6
Probabilistic Risk. Assessment in Risk-Informed Decisions on 7
Plant-Specific Changes to the Licensing Basis, p
8 We have a pending, again, staff requirements 9
memorandum from the Commission delineating the new direction 10 of our program and we have nine pilot plants that appear 11 eager to start implementation of the new process for what is 12~
initially projected as a six-month trial period, but we j
13 recognize they need longer time, during which I'm sure both 14 sides will learn many lessons.
15 And-judging from the response of those plants 16 volunteering to be pilot plants, as well as the licensee, 17 Congressional, and public interest group interest in the 18 pilots, this initiative will be under a lot of scrutiny and 19 will be closely monitored for its effectiveness to see that 20 it achieves the outcomes desired.
21 Now, no other effort better demonstrates to me the 3
22 value of the extensive interaction among the various 23 stakeholders, the nuclear reactor industry, the public 24 interest groups, other members of the public, state and 25 local governments, Congressional stakeholders, the NRC ANN RILEY & ASSOCIATES, LTD.
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. staff, and the Commission.
21 We've instituted lmany_ changes, but we're still in 3-an interim ~ period,;in that we have a vision of the future.
14 We'have.a framework th'at has been laid out, but we're still 51 living in the'present.
The NRC, of course, has to remain focused.on our task and not be' distracted as we go along, 6
.7-and many of.you have warned me and warned'the-Commission 8
'about change management, but.we do have to still maintain 9
effective oversight of our power reactor operations, both to 10:
keepfthe focus, as Sam says, on maintaining safety, but also 11' in-maintaining our public credibility.
12 But the future does hold much promise and 13
-anticipation by many,. promise-for a predictable and 14
' effective regulator, promise for the clear and objective 115 thresholds of safety that will dictate agency responses, and I
16
. promise'for a fair and: consistent assessment and enforcement 17..
process.
i 18 Mr. Colvin, I know that you and the NEI have been 19
' actively involved in the evolution of this process and I 2 0.-
believe'you could give'us a good starting point for our 21 discussions.
,Since I'like to advertise ahead of time, I 22"
'would.then ask Mr. Lochbaum to. share his perspective, 23' because he has been equally involved in the new reactor f24'
. oversight program.
- Then, Dr.. Rhodes, since you have what I 25
. call?thefintegrated point of view, I-would ask you to share i
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some of your1 integrated perspective based on. industry g-
= 21 performance and your assessment of where we seem to be 3-
' going.
41 I will'go in that order, and then-open the floor
-5.
for further discussion.
Mr. Colvin.
6 MR. COLVIN:
Thank you, Chairman.
I'd just like 7:
to makefa couple comments.
I.think.that if we take a step 8
back and look at-what the agency has proposed'and the 9-efforts and the work of the agency in this activity, I think 10-it really stands as a model for any: agency and for 11 government in. general as to the benefits of an approach of integrating the stakeholders in a process and really trying 12 13 to get in : there and do something that is going to-make a 14 significant difference, and I'm very optimistic and I think 15 that the industry as a whole is looking at this' program as a 16
_ ay of addressing some things that we grappled with as an i
w
- 17 industry and.you grappled with as a Commission for many 18 years.
19 That is-really how do we bridge this tie between 20
~ performance at-the plant and protection of public health and 21.
safetyLin a way that provides some simple objective measures 22 of what.we're all' talking about and clarifies the 23' expectation.
24
- I remember the safety goal initiation and the 25,
' policies and the discussions and we got in a long what do we ANN RILEY & ASSOCIATES, LTD.
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mean by this and what do we mean by that, and how do we tie 2
it together.
I think what the staff has done with a lot of 3
solicitation of input has been able to, in fact, define 4
those in terms that really make rational, reasonable sense, 5
and I think give the agency, the industry, and ultimately, 6
when this implemented, the public, the tools which will 7
allow them to understand where the plants are performing, 8
what the agency is going to do in each of the cases where 9
there is a slip-in the performance, and at what level of 4
10 thresholds that would occur.
11 So I think that this really, again, I think, 12 stands as a model.
We looked very hard for many years at 13 many other agencies that regulate industries for safety.
14 None of them have made this type of transition to date.
15 None of them have crossed that -- have been able to j
16 penetrate that, solving this problem.
4 17 So I'd commend the Commission and the senior l
18 management and all the people working on this, This is a 19 very important effort and the integration of the inspection i
e 20 activities, the assessment of how you measure the j
21 performance, and ultimately, when necessary, what i
22 enforcement action you take and how that's taken is a very I
23, important piece of having an integrated system and program, i
j i
24 and I think that's where I see a tremendous benefit for all.
l l
25 CHAIRMAN JACKSON:
Thank you.
Mr. Colvin, are l
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S-47 there.particular vulnerabilities'you think we need to be 1
2, mindful of as we go forward?
3 MR. COLVIN:
I don't see any initial 4'
vulnerabilities.
I think that the approach that you've 5
taken.in laying out a series of pilot plants and trying to 6
work through that system and.taking the lessons learned from 7
that is a.very important step.
8 As we learned through the maintenance rule, as Mr.
9 Curtiss indicated we learned a lot from that over a period 10 of years.
I think that we have the ability to learn a lot 11 from these pilot plants very early on and try to address any 12 questions that might arise and une"pected or unintended x
13 consequences from the various activities.
14-I think that we ought to hold -- not speculate --
15 I think we could speculate, certainly I could' speculate on 16 lots of potential problems in different areas, but I think 17 we.ought to learn from the pilot plants and look at that and then make some reasoned and rationed judgment.
18 19 CHAIRMAN JACKSON:
Mr. Lochbaum.
20 MR. LOCHBAUM:
I think we share a lot of the 21 optimism about the new program.
It looks really good on 22 paper.
How it's implemented will be the key to its success.
1 23 But what encourages us about that aspect of it is that
'24 -
there's a lot of feedback loops built into the process that
'25 will allow c-verybody to look at how it's going and provide ANN RILEY & ASSOCIATES, LTD.
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that input.and based on past results, it should allow any 2'
-corrections, mid-course corrections to be made.
3 So'I think if there are any deficiencies, they 4
seem to be' capably fleshed out during the pilot and being 5
corrected before it's taken nationwide, 6-We'will. speculate a little bit, despite the 7
warning.
One vulnerability we see is how inspector findings
.8' and inspection findings are factored-into the process, but 9-we're not going to say that that's a doomed-process.
We'll 10 look at that during.the pilot and make'any comments 11 appropriate at that time.
12 CHAIRMAN JACKSON:
Mr. Rhodes.
13 MR. RHODES:
First, I'd like to say, Chairman j
14 Jackson, I appreciate the opportunity to be here.
i 15 CHAIRMAN JACKSON:
We're glad you're here.
16 MR. RHODES:
Thank you.
We, too, believe.the 17 Institute of Nuclear Power Operations and the new oversight 18 process is certainly going in the right direction.
We i
'19
. applaud it.
We support it.
We've been involved to some 20 degree.
21 Of course, as you well know, imposed focus is on th'e day-to-day operation.and maintenance of the plants, the 22' 23 training.of personnel, and the exchange of information
~24 related to that.
'25 So our focus really has to been and will continue ANN RILEY & ASSOCIATES, LTD.
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-to'be to go beyond the regulations'and operating safely and reliably the nation's nuclear plants.
'2 c
3' I feel the new oversight process will allow the industry and INPO,_ working with the industry, to focus on
- 4-i:
5 excellence perhaps even more so than we have in the past.
I 6
think it will allow us to really focus on the hard 7
day-to-day issues and put our. resources more appropriately 8-there.
9 So for that reason, in addition to others, I think Id
-the direction you're going is right on target.
11 Of course, as you well know, the performance of 12 the industry perhaps allows this more, it's the performance 11 3 safety and reliability standpoint, has improved dramatically 14 over the last decade or so.
i
-15 Just since the last stakeholders meeting on i
16 November 13, I believe, the results of'the 1998 are in and, 17 as you know, the performance indicators that INPO and the 18 industry uses, the so-called WANO performance indicators, 19 are at an all-time high, measuring everything from safety 20 system performance to radioactive goals and the like.
21 In 1985 or '86, the aggregate performance of these 22 ten _ indicators was 43 points out of 100.
In 1998, the 23-aggregate performance was double that, more than double 24 that, 89 points out of 100.
25 Your own data, which your INPO actually agrees ANN RILEY & ASSOCIATES, LTD.
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with very much, on significant_ events per unit per reactor 2.
year is at an all-time low, an improvement of some 60-fold 3
from the '80s, it's.04 events per reactor per year.
4 So I think with the new oversight process, we can
-- vue in the industry can continue to focus on improving 5
6' even more this already very fine performance.
7 Lastly, I would say it's encouraging the plants, 8
particularly those ten or so over the last two or three 9
years that have been in long-term shutdowns, are now 10 recovering.
As you well know, most are back on line.
The 11 most recent, LaSalle Unit 2, came on line, I believe it was 12 in power operation in April, and Clinton is in startup now, 13
'and Millstone 2, I believe, is ready for startup.
14 So I'think that's also a positive indication of 15 the industry performance moving in the right direction.
)
16 CHAIRMAN JACKSON:
Let me ask you this.
You made 17 a comment, in a certain sense, that the performance of the la industry allows this kind of a change or process to go 19 forward.
j 20 A devil's advocate question would b,e if this were 21 1986 and-you had the industry performance you referred to 22
.then, would this still be the right oversight process?
23 MR. RHODES:
I actually think it would.
Of 24 course, nobody knows the answer to that.
I think if we had 25 had this oversight process in 1986, I think the industry ANN RILEY & ASSOCIATES, LTD.
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could have.gotten to these levels of performance even sooner 2
than the ten or 12' years.
That's just a judgment call.
13 In any event,.whether it's 1986 or 1998, I think I4:
i it s the right way to go forward in 1999.
S CHAIRMAN JACKSON:
Of course, I naturally believe
'6 that But.my metric is that it has to be a process that we 7-
.believe and, as you say, you have to go through the pilots, 8
et ceters, that we believe will work ~for all levels of 9
performance,. because it is meant to be objective and to have 10 thresholds of performance and so on.
And so in the end --
11-you know, I never talk about the fact that -- I mean, I 12 acknowledge the improved safety performance of the industry, 13~
and you know that.
I've said that even in speeches.
14 But I never link the promulgation and 15 implementation of'this program to that, because in the end, 16 as a regulatory agency, whatever we have in place to assess 17 what our licensees do has to work and it can't be based on 18 the fact that the industry is good or better, et cetera, 19 because in the end, we have to do certain things and they 20 should be linked more clearly, the cornerstones of safety,
.21 and we have to have a baseline program that allows us to see 22 what we need to see.
J23-Do you feel that the new process will have any impact on.how INPO goes about doing its business?
.24 L 25.
MR. RHODES:
I don't think it will have a ANN RILEY & ASSOCIATES, LTD.
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I think, as I said before or alluded
'2 to, it will really allow INPO and the industry to spend even 3
more resources on focusing on excellence, which certainly is 4
supported by the NRC.
5 One other comment I might make, that I should have 6
made earlier,.is that as you well know, INPO's programs have 7
been performance-based for almost 20 years now and I think 8
they have stood the industry-in good stead, have been one of 9
.the reasons for the. success of -- the improvement of 10 performance of the plants over the last decade or so.
i 11 So I certainly support very much the direction I
12 you're going, because I think it's, based on our experience, 13 the performance-based processes are very effective.
14 INPO has not been, quite frankly, involved in the 15 risk-informed process very much, but we're even looking at 16 that.
That may have some applicability.
It may be a 17 e.Tange, in response to your question, to the way INPO does 18 buLiness.
19 But it's not clear to me that risk insights or 20 risk-informed processes apply quite as much to the 21 excellence that we're pursuing with the regulation.
22 CHAIRMAN JACKSON:
Let me solicit some comment 23-from.some of those who actually have the nuclear operations, 24 if they have any comments or any caveats.
Mr. Hairston, 25 please.
. ANN RILEY & ASSOCIATES, LTD.
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53 1;
- MR. HAIRSTON
The question about 1985-86 came up c
2 andTI couldn't let.this pass.
We are one of the companies-3 ithat have-walked _the halls of these buildings and before 4
that in-Bethesda, at NUMARC, and many of you remember Pat 5-Mcdonald,yand this was his mission in life, was getting the 16.
assessment. process out of the SALP'and into something that's 7
more objective and performance-based.
8'
- When I heard that the Commission had agreed to
~
9 Lthese pilots, it was pretty _well reported and I could hear a-10
. voice in the wilderness, Pat, who is now six years retired, 11.
free at last.
And I can tell you, I have talked to Pat and 12 he is ecstatic over this and he is a man, and many like him, 13 Bill Lee,'that spent a lifetime working on issues like this
'l 14 and the fact that you work and you work and there's many 15
' Commissioners that have. worked on this issue, both current 16
'and past.
17 And the fact that we've made the progress gives 18 you light at'the end of the tunnel on other issues that are 19 harder than this.
But Pat knew I was coming up here and I 20 know, Chairman Jackson, you might not know the whole history 21 of.this, but if Louis Reyes and his predecessor, who had to i
22 sit through SALP meetings and listen to Pat's first five 23 minutes, would be appreciative of this.
24' But I think it's a great step in the right 25 direction and I think it's good for the region.
I think the ANN RILEY &-ASSOCIATES, LTD.
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region was in a position of being somewhat subjective.
I 2
think part of this and how this plays out in the pilots, the 3
most.important thing is there has to be a dialogue between 4-the region and the plant.
I don't care about the grades, I 5
l don't care about the_ indicators.
They're all good and we 6
need to look at them.
7 But in the end, the plant needs to know how the 8
' region is looking at their operation.
Another data point.
9 We get this from INPO and the interim program we're using 10 right now basically does that.
i I
11 So I think that this is a great step, but I'think 12 it is a step and I think we have to look at these pilots and 13 continue the dialogue in order to clear this industry up to 14 the next level.
15 CHAIRMAN JACKSON:
When I came into NRC, the 16 Towers-Parrin report had just been done.
One aspect of it 17
-- and it turns out I was in the building that day, there 18 was a Commission meeting.
I was not confirmed at that 19 point, but I was in the building.
So, in fact, I watched 20 the Commission meeting where the Powers-Parrin results were 21 being laid out on the monitors from some hole in the wall 22
'they put me in at that time.
They didn't want anybody to 23 know I was here.
24 One aspect of that had to do with inconsistency or 4
'25 perceived' inconsistency from region to region and you've ANN RILEY & ASSOCIATES, LTD.
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- L mentioned here the importance of the industry / regional 2
dialogue.
3 How do you feel or do you feel, at least as you 4
understand it, that there are sufficient objective measures S.
or safeguards built into the new process to police that 6
consistency?
s 7
MR. HAIRSTON:
I think we're off to a great start.
8 I won't sit here and tell you.there are not concerns that I 9
have.
I know there are concerns that you have.
We have to 10 implement.it.
11 But.I think we're on the right fundamental plane, 12 and this is not to cut off feedback.
We have an 13' understanding with our resident that if they feel something, 14 whether it's performance-based or not performance-based, I
15 want to-know that.
But the way that whole SALP came out, 16 with grades and scores, just never felt good about it, 17 whether you got all ones or whether you got two ones and two 18 twos.
19 So I think this, one, does give us a performance 20 measure, and, at the same time, it leaves open the dialogue 21 between the regulator and the people running the plant.
22 CHAIRMAN JACKSON:
I'm going to -- I know there 23 are various people who want to speak.
I want to finish 24 hearing from the industry participants.
Then I'm going to 25 hear from'our Regional Administrator, who is here, and then ANN RILEY & ASSOCIATES, LTD.
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from Commissioner Merrifield.
2 Mr. O'Hanlon.
3 MR. O'RANLON:
Thank you, Madam Chairman.
I agree 4
that the process is a good process that we're going to and 5
if the process is good, which I think it is a good process, 6
that regardless of plant operations, whether it be good or 7
not so good, that it would be a good indicator.
8 I think on the -- it's a big step toward using the 9
same standard nationally as opposed to regionally, which has 10 been a comment and you were just talking about that a moment 11 ago, that we say, well, this region versus that region, I 12 think this will do away with those type of questions.
13 I think it can compare just across one set of 14 indicators.
And I think it is going to be more objective.
15-There are some discussions on particular indicators and 16 whether we all agree on them, but I think we're talking not 17 with the overall concept so much the specific items.
18 CHAIRMAN JACKSON:
Let me ask you a question.
Do 19 you understand that the process is not just performance 20 indicator?
21 MR. O'HANLON:
It's performance indicators and 22 poor base inspections.
Yes, I understand that.
I believe 23 everybody else does, as well.
24 I don't think there are indicators, and I think 25 most people agree, that you can't have indicators for I
l l
l ANN RILEY & ASSOCIATES, LTD.
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everything, but some things that you just need to go and 2
inspect, and I think there are some cases where, if there 3
are not current indicators and we don't feel there are good 4
indicators, let's not force an indicator on it that we don't have high confidence will be a good representation of what 5
6 that area is.
7 I would say, also, possibly that this new process 8
will give some sort of predictiveness to how a utility or a 9
plant is doing.
I know we talked years -- several -- a 10 while back about trying to have predictive indicators and 11 many of us have wrestled with it, tried to come up with a 12 system.
13 I don't think this is the absolute system, but I think --
14 and we intend to do this, the new process -- while we're 15 doing a pilot at other places, we're going to do it 16 ourselves, but also go back and look at how we've scored 17 ourselves in the past and see how we plot, and I think there 18 will be a little bit of predictiveness on overall 19 performance that can be helpful towards us.
20 CHAIRMAN JACKSON:
Mr. Hintz, 21 MR. HINTZ:
I'm personally excited about the 22 prospects of this new oversight program and I think it will 23 be hopefully more objective and less subjective.
I chair 24 the Nuclear Oversight Committee for NEI and the Strategic 25 Issue Oversight Committee, and that's represented by all the ANN RILEY & ASSOCIATES, LTD.
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. chief nuclear officers,_and we have a report on the progress 1.
2' of.this program.
3 I think.there is overwhelming support by the
'-4
. industry and I agree witn Jim, I think there is at least a
' potential that we could have improved the industry even 5J 6.
. faster:under this program, because I think the NRC and the 7
industry hopefully can put their valuable resources more on
-8
' issues that are really.important to safety, and I think this 9
will help us do it.
10 So the best I can tell, industry is really excited 11 ab6ut it and we're anxiously looking forward'to the pilots 12-to see how they go and what we can learn from them.
13 CHAIRMAN JACKSON:
Any caveats?
)
14 MR. HINTZ:
No, other than I'm sure we're going to 15 see things during the pilots that we didn't anticipate and 16' we probably have to do a little checking and adjusting.
But 17 I'think the way this has been handled, by going ahead with 18 the pilots, I think there'has been excellent interaction 19 between the various stakeholders and hopefully all our 20 objectives are the same, to try to operate these plants 21 safer and better.
-2 2 -
So I think the whole process so far has been very 23 positive.
1 24 CHAIRMAN JACKSON:
I'm going to call on Hub 25 Miller, the Region I Regional Administrator.
Hub, if you ANN RILEY &. ASSOCIATES, LTD.
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'could feed into-your comments, at least based on your
~ 2
. perspective, from where you sit today, whether you feel the inspectors are on board and to what extent you feel they are 3
4 ready for this, at least for the pilots, and just generally 5
that whole situation.
(
'6 MR. MILLER:
Well, this is an enormous change, of 7
course.
We' have focused a lot on change manageraent and, in 8
fact, have borrowed a lot from what the industry has done, 5F as the industry has undergone significant change.
10 Of course, communication is the starting point and 11 the middle point and end point really and a lot of what we 1:2 have done is in addition to working with Sam and the folks 13 from the program office who are developing the process, in 14 addition to providing training, we spent a great deal of 15'
. time at the beginning talking about the need for change, why 16 is it necessary to change.
17 And I think I'm pleased to say that it didn't take 18 that long really for inspectors to and the inspection staff
'19 to see the need.
We have done a lot and I think NRC is, in 20 fact, a part of the -- has contributed to the improvement in 21 safety that has been talked about here.
'22 But I think at the same time, there was 23.
recognition, on reflection, that there needs to be greater 24 consistency, greater objectivity.
And much of what has --
25 much of the rules and the process by which we regulate has ANN RILEY & ASSOCIATES, LTD.
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p S-60 1-grown'up ad hoc over the years.
So I think there was an l
L 2
~ appreciation that it seemed conceivable that by stepping 3
back and.looking at things in a very fundamental way and in 4
a systematic way, derive a new oversight process, that there 5
just simply had to be' good coming out of this.
6 So I think, in fact, recently, in one of our 7
change communication sessions, I got an interesting 18 reaction,'which_is move off the need for change, bring it 9
on, and I think'--=so I think there is an eagerness on the 10 part of the inspection staff-to get on with the pilots.
11 Now, I have to say that I've got a tough sell, of 12 course, because inspectors are trained.
Their job is to be 13 inquisitive, to. challenge, and to question.
So I think 14 while I can report that there is this eagerness to move into 15' this new regime, at the same time, there is an interest in 16 making sure that the details, aF we work those out, that 17 those details -- that the program, as'it is implemented, is, 18 in fact, consistent with those general principles that we 19 are -- that the Commission,.that staff, as we've developed a 20 new process, that it's consistent with those objectives.
21 And'I think-that Dave Lochbaum mentioned it 22 earlier, the feedback process'is an important one.
It's an 23-importantLone to the inspectors.
It's important that they 24 know that.as we work through this, that you will make H25 adjustments to make the outcome, the implementation be a l
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1 good one.and:really have.it be consistent with these broad 2'
. goals that really no one~can argue.
E3 1 CHAIRMAN JACKSONr Commissioner Merrifield.
\\
4L
' COMMISSIONER.MERRIFIELD:
To layer on some of the 5
comments'that you made, Chairman, as well as some of those
'6 made by-George Hairston and Mr. Hintz', I'd say a couple of 7=
things.
8-First,.I'think not only is this process looking at
-9
-- being looked'at with some anticipation by the individuals 10-around the table, our stakeholders and others nationally, I 11'-
,think,:also, even some discussions I had last week, there is
{
l 12 some international interest in this, as well, and perhaps, 13-again, we can provide leadership to many other sister 14 regulatory agencies we have internationally and help them 15 along in this guidance, as well.
16:
I have one strong belief about'a pilot project.
I 17 think that if we're going to.go into the pilot project, I 18 think the staff does have this' attitude that we need-to go
-19 into it.without blinders on and with a recognition that this.
.201 program may evolve and that-what we end up with after having 21-gone through the pilots may be significantly different.
I 22' think we need to be willing to accept'that.
H23 LThe analogy I use is that of the Air Force testing 24 one of its airplanes.
It does not merely test the airplane 25 can fly-and whether-it can get from point A to point B, but ANN RILEY & ASSOCIATES, LTD.
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it tests how fast it can go, whether the wings are the right 2
shape or whether the instrumentation is doing what'it needs 3
to do.
4.
So I think in a similar contex't, we need to really 5.
~ vigorously test this' pilot and recognize that'it may not be
~6
'a full rollout in six months.
We may need to take additional time, but I think that's time well spent.
7
'8 That takes me to the final comment that I want to 1
9 make about this.
I know George talked about celebrating the 10 end.of the SALP process, but I think we all need to 11 recognize that the SALP process and the watch list were activities that were looked at very favorably by the public 12 13 and'I think many in the public had a great deal of
,14 confidence, and I think it's important for us, as we go 15 through this process, to make sure that ultimately the 16-inspection and enforcement of the system we come up and that 17 we all congratulate ourselves about has that same level of 18 public confidence that we're looking at the right areas and 19 doing the right things, because ultimately, in the end, if
- :20 we do not have the public confidence, I don't think that 21 suits either this. agency or the licensees that we regulate.
' 22 So I think we need to keep that in mind.
1 23-CHAIRMAN JACKSON:
I would hope that the public 24 confidence, in fact, is strengthened coming out of this 25 process.
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COMMISSIONER MERRIFIELD:
I would agree.
2 CHAIRMAN JACKSON:
And I like your analogy about 3
the plane, since I also use plane analogies.
One could 4
argue that the fundamental performance metric is that the 5
plane doesn't crash.
That's where we want to make sure we 6
keep moving along.
7 Sam, you wanted to make a comment.
8 MR. COLLINS:
I always get nervous when we're in 9'
-violent agreement.
10 CHAIRMAN JACKSON:
Yes, right.
11 MR. COLLINS:
But I acknowledge the points 12-previously made most recently.
One of the challenges that I 13 had written down has been acknowledged by the last two 14 speakers.
It's that we need to maintain, as an agency, we 15 can't lose sight of our effectiveness as a strong, credible 16 regulator and how we're viewed by our stakeholders in that 17 sense.
18 That's not inconsistent with the new oversight 19 program.
However, we need to be making these changes for 20 the right reasons.
There is a perception, we've heard it, 21 acquiescing to the industry, that's out there.
I think the I
22 validity of the program itself as far as what it measures, 23 where we are in the response bands, allowing the industry to 24 control the ability to respond to the initial indicators of i
25 issues, is an attribute.
]
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The agency's measured response provides some 2
predictability to the process.
Again, going back in i
l 3
history, I was struck by everyone's dissatisfaction'with the 4
SALP.
Mr. Lochbaum was dissatisfied for the same reasons 5-the industry was,- basically, as far as the scrutability, 6-predictability, the continuity of the process between senior 7
management and.the planning, and I think this~ oversight 8
process will provide-for'that to take place.
9 It's been a massive effort.
Alan Madison is here, 10 representing the team which includes both the region and i
11 research, most of the reactor safety program people at the 12 agency that's touched by this program at one point or 13 another.
14 I know the inspectors are concerned about our 15 ability to respond to issues.
Hub has expressed that.
We i
16 have to have the ability to follow our noses on these 17 insights and instincts in a way that provides for, again, 18 scrutability.of our resources and be able to transfer that 19 information to the industry, because I think our insights l-20
.are worthy of consideration.
They may not end up to be 21 requirements, but there needs to be a forum, as Mr. Hairston
~
22 said, to exchange that information in a way that's open to 23 the public and provides for appropriate response.
24 Ultimately, the goal, I believe, is not to engage 25 on the validity of the information, which was the tendency l
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of SALP, does this information.mean the same thing to all of
'2 o'ur stakeholders, but'to talk about the response, what is 3
the appropriate. action that is to be taken both by the industry and is'the public educated on the significance of 4
5 that, is the agency engaged at the appropriate level.
6
'If we can achieve'that goal and plan our resources
.7 appropriately, maintain the credible regulator and-maintain 8
the center for safety, then I think the program will be a-i l
9 success.
10 It's a lot of work to do between now and the end 11 of.the pilot.
12 CHAIRMAN JACKSON:
Thank you.
I think it's --
13
' COMMISSIONER McGAFFIGAN:
Madam Chairman.
14 CHAIRMAN JACKSON:
Please.
15 0?MMISSIONER McGAFFIGAN:
Just on the -- there is 16 one issue that'Mr. Ortciger raised in his prepared' remarks 17 that hasn't come up and I just want to. acknowledge it, and 18 that's the issue in the reactor oversight program of whether 19 we should be looking at management.
20 This is also something GAO, who is not here, has 21-criticized us for not doing and I just think I'd take a 22 moment and say why we are not -- don't have~a management i
1 23 cornerstone, as I understand it, at the current time.
It 24 comes down to despite the fact that when Mr. Kenyon arrived 25 at Millstone, Mr. Kingsley at Con Ed, they talked, I think, ANN RILEY>& ASSOCIATES, LTD.
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both about dysfunctional management structures they found.
2 The thought is that the rest of the structure will 3
provide us the information.
There will be symptoms other 4
than the dysfunctional management that we will receive 5
through the performance indicators, through inspection, in 6
the core inspection program'.
7 But I think it's something that just is not going 8
to'go away, since this has been a consistent thing with GAO.
9 Mr. Ortciger is raising the concern and I understand some of 10
'our European colleagues also are -- and maybe bureaucrats in 11 Europe have higher standing than bureaucrats in America, but 12 some of our European colleagues are focusing their f
13 regulatory efforts more on management.
14 So we're a little bit out of align and I think we 15 have to acknowledge that and I believe w'e're on the right 16 course, but I don't know whether Mr. Ortciger or others want 17 to comment.
That is an issue that has been pervading the
~
18 subject for some time.
l 19 CHAIRMAN JACKSON:
Mr. Ortciger, do.you have a 20 comment?
-21 MR. ORTCIGER:
I almost wanted to speak on this a 22 little earlier, because I really believe this is a good 23 solid program and I'm almost apologetic that I put these 24 comments in here, because the issue of management, the issue 25 of culture, the issue of human attitudes and employee ANN RILEY & ASSOCIATES, LTD.
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performance, and, as I indicated, are cross-cutting issues 2
and probably need their own cornerstone.
3 The more I've thought about this over the last 4
week, week and a half, the more I think it would disturb the 5
program that you have put together initially and will not 6
give this program a chance.
7 I would almost say I withdraw this comment.
8 COMMISSIONER McGAFFIGAN:
If we could get GAO to 9
do the same, we'd be in good shape.
10 MR. ORTCIGER:
But it's there and we know it's 11 there and Oliver has addressed it and any number of people 12 have addressed it, and someday it may be true that what 13 we've designed, what you have designed here will drive 14 management to look more closely at this.
But I think at 15 this point, it would be very dangerous to look at this type 16 of cornerstone or performance indicator.
17 CHAIRMAN JACKSON:
Commissioner Diaz.
18 COMMISSIONER DIAZ:
I just wanted to remark that 19 as we look at the genesis of the oversight process, we all 20 seem to be focusing on the end points of performance 21 indicators and inspection.
22 However, the real start of this program was how do 23 we process information from the plants in a very, very 24 transparent, clear way.
It's that information flow that 25 provides a robust foundation for this program and it might ANN RILEY & ASSOCIATES, LTD.
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S-68 be in the interchange and in the actual analysis of the FIMS 1
2
-in between plants and how they relate to each other where a 3
lot of the raw data provides the industry and us some basis 4
for how we get to a:certain point.
1 5
I'd like maybe, if Madam Chairman allows me to, to
{
6' ask Mr. Rhodes and Mr. O'Hanlon to comment on is the
\\
i industry considering.looking at PIMS from other plants and 7
8 using that information, which has not been yet manipulated 9
by indicators, as a way of informing themselves and using 10
'the fact that this periodicity, there is a lot of good 11 features in the data processing itself before you get to the 12-performance indicators.
13 MR. RHODES:
The answer is yes.
I believe we are, 14 at INPO, looking at a lot of data.
As you know, the 15 performance indicators, the WANO performance indicators that 16 I alluded.to earlier, are sort of a wrap-up of a lot more 17 data that we have.
18 I would agree with what I think you're saying, 19-that looking at that data will be, to some degree, a leading 20 indicator which will allow management to function normally 21 and not have to be beat over the head with outside forces.
22 So I very much agree with, I think, the gist of 23 your comments and Mr. Ortciger, that using the more 24 objective process will allow.and encourage industry to deal 25 directly with management issues which will hopefully prevent ANN RILEY & ASSOCIATES, LTD.
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some of the dysfunctional situations that were referred to 2
earlier.
3 CHAIRMAN JACKSON:
Mr. O'Hanlon, and then Mr.
4 Gunter.
5 MR. O'HANLON:
Looking at the data from the other 6
plants, we're very interested in that.
We have been heavily involved with NEI and the NRC in developing this new 7
8 process, the oversight process.
We volunteered to be one of 9
the pilot plants.
Unfortunately, we weren't picked, but 10 part of the reason for that is that we wanted to learn how 11 to use the data and be in the process.
12 But we intend to stay very much involved 13 throughout the entire pilot process.
I mentioned earlier that we're going to be doing the assessment on ourselves, 14 15 doing the data,,and certainly wherever we can get data from 16 other sources, we will do that, just so that we can learn 17 and continue to improve.
18 So yes, wherever we can get the data, we will.
19 Not to see how somebody else is doing, but just so that we 20 can learn and how we can continue to improve.
21 CHAIRMAN JACKSON:
Mr. Gunter.
22 MR. GUNTER:
I think the agency and the industry 23 can anticipate that public interest groups are going to be 24 scrutinizing this very closely in terms of how this is a 25 contributor to further self-regulation by this industry.
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1 Particularly of concern is the fact that we're now 2
also seeing the introduction of greater foreign ownership issues and how this potentially impacts jurisdiction'by this 3
4 agency over foreign corporate board control and management 5
of U.S.
reactors.
6 I think that this is very germane to the l
I 7
discussion we're having right here.
8 CHAIRMAN JACKSON:
I wanted to go back to 9
something that Sam Collins said.
He made a point that he 10 would hope that we would get to a point that we would not 11 focus on the validity of the information, but on the 12 response to the information.
So I would like to just kind 13 of issue my own caveat that we all not kind of get off on 14 just the objectivity of the information or how we get it and 15 how we process it, but on that issue of the response to the 16 information, whether we are in a response band that has to
'17 do with industry response or a. response band that has to do 18 with NRC action, because in the end, the information is only 19 as good as what you do with it.
20 That's an issue I've been driving at NRC; namely, 21 what are we going to do with what we find out, but that's an 22 issue I think for the nuclear industry; what are you going 23 to do with what you find out, because in the end, that is 24 where public credibility ultimately resides.
25 In addition, it provides, if there isn't a, ANN RILEY & ASSOCIATES, LTD.
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- quote-unquote,~ direct look at management behavior, it provides the performance oriented way of inferring that
'2 3
behaviori,because in the end, management is as management
=4 does.
You'all have performance objectives, and you like to
'5 quote me on that one.
6>
So the issue is what we do with what we find out 7
and so I would just'like to kind of leave that on the table, 3-8 as I takeltheLChairman's prerogative and move on to the next 9.
topic'.
10-I would like'to introduce'the topic of license 11 renewal and depending upon how'that time goes, we'll then 12-talk about license transfer.
Then we'll take a break.
13 I actually think that we have an opportunity, 14
~ depending upon people's schedules, to wrap this up before 15 lunch.
But it may be a slight extension past 12:00, if 16 people are willing to indulge that, because we will only 1 '7 -
then have two additional topics after we talk about license 18
-renewal and license transfer.
19; We are operating on the premise that we need to 20 allow for.the continued operation of existing plants, where 21.
justified, in a stable, predictable and timely license a
22 renewal process.
23 As we'do that, we have to make sure that we are
'24 ensuring the protection of public health and safety and the
- 25' environment, and that our decisions can be technically ANN RILEY & ASSOCIATES, LTD.
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- justified, because the metric for success, from the 2
regulatory point of view, is not do we eventually renew a 3,
. license', but.have we adequately evaluated the technical 4
issues and established a comprehensive review and inspection 5
' process for license renewal that ensure that reactor safety 6'
.is' maintained; so that if we do renew the licenr 2, that 7.
'there is confidence that that has been achieved.
8 We know that I have charged the Executive Council 9
withioverseeing~the license renewal efforts, primarily to 10 focus on ensuring resources get deployed in the right way i
11' and to ensure that any issues that are generic are elevated, 12 as they should be, to the Commission.
13 The Commissio.1 has. issued case-specific orders laying out an aggressive adjudicatory schedule for reviewing
.14 15
-the first.two license renewal applications, for Calvert 16' Cliffs and Oconee, and they have a targeted completion
'17 timeframe of 30 to 36 months.
j 18 NRC management meets monthly with the applicants 19 to monitor progress and resources and to try to resolve 20; emergent renewal issues.
So far, all of our milestones for 21 the reviews have been met.
We recently issued the draft 22 environmental impact statement for the Calvert Cliffs 23 application, which has caused some response in the Congress.
24
-The initial safety evaluation report has been 25
- completed and released.on schedule and the Commission had ANN RILEY & ASSOCIATES, LTD.
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. projected a decision.onfCalvert' Cliffs by'May of 2000, in 1
2' the absence of a hearing.
3-
'But our officialelestimate remains 30 to 36 months j
\\
14
- from application to decision, because the 25 months, which 4
5' is:what:the'May 2000 date would represent, is predicated on 1
6
- no adjudicatory hearing.
)
?
j 7
~We do expect more license renewal applications.
n 1
8 The'Entergy: application for Arkansas Nuclear 1 is expected
'9 this December and Turkey Point and Hatch also have recently 10 announced plans to license renew.
11-We have asked for-what we believe to be sufficient i
12 resources in our FY-2000' budget to handle anticipated new 13 activities.
We also are continuing to work with NEI on a 14 standard application-format and continue to incorporate 15 lessons learned from our first two applications for i
16 subsequent reviews.
l 17 So everything would' appear to be going well, but i
18 there are concerns.
One, some have commented that the i
19 public-is left out of the process.
UCS has made that
~
20
. comment. -And that petitions and requests to intervene have 21 been inappropriately dismissed.
At least one is under 22 review at the Appeals Court level.
- 23L Although some have praised the NRC for creating a-24-stable-and efficient regulatory process, some have commented 25.
that our process is not effective and virtually guarantees ANN RILEY & ASSOCIATES, LTD.
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approval of renewal.
Third, some in the industry have 2'
-raised issues that they feel need to be treated on a more 3
generic basis and particularly with respect to the proper 4
scope of the existing programs and the extent to which they 5
can be credited for aging management as opposed to being 6.
reexamined.
{
-7 Why don'.t I begin with Mr. Hairston, followed by 8
Mr. Lochbaum, Mr. Ortciger, and Mr. Hintz.
Mr. Hairston, 3
9 MR. HAIRSTON:
Thank you, Chairman Jackson, 10
, Commissioners, fellow stakeholders.
11 I didn't want to let pass that I'm up here off my 12 honeymoon.
My wife and I have been on a honeymoon for 30 13 years.
14 CHAIRMAN JACKSON:
That's the best kind.
15 MR. HAIRSTON:
It's real exciting to be here.
16 CHAIRMAN JACKSON:
My husband calls our 17-anniversary a license renewal each year.
18 MR. HAIRSTON:
That was my perspective.
That was 19 not 100 percent probably agreement.
But it's real exciting 20 to be here.
I'm only going to talk a few minutes about 21 license renewal.
But many of these issues we've talks i 22 about a long time and the' fact that we have a stakeholders 23 meeting is just unbelievable to me.
2-4 You look around this table at the stakeholders and 25 we can come together and we can share our views, whether ANN RILEY & ASSOCIATES, LTD.
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they're consistent or not consistent, because I think it's 2
one of the most telling things on where we are today in the 3
regulatory environment.
4 I think if anything, we need to continue this.
5 You look at the risk-informed initiatives, the oversight 6
process, pilots that are going on, and it really is 7
exciting.
8 But on to license renewal.
I don't have to give a 9
sermon about the importance to this body of nuclear power I
10 plants, as we all grapple with clean air issues.
Obviously, 11 nuclear power is important to us, it's our industry.
But 12 it's very important to the American public that at least our 13 current plants continue to operate and operate safely and 14 reliably.
I think a major component of that is the license 15 renewal process.
16 We have two plants that are going through the 17 renewal application and we have several others waiting in 18 the queue.
Hatch will be submitting in December or early in 19 the year 2000.
20 I think a lot has gone right on license renewal.
21 Certainly there has been a lot of dialogue.
The current 3
22 applications and the timeframes for review are on schedule 23 and it's just a lot for us to be pleased with.
24 I think timeliness is one aspect, but as we go 25 through these two renewal applications, I think some issues ANN RILEY & ASSOCIATES, LTD.
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-1 are emerging and I briefly want to mention one of them.
2 We believe that Part 54 was very explicit with 3
respect to,the current licensing basis and current program.
.4 Rather than debate the technicalities of that today, I'll 5
just mention that I:believe some of the things that are 6-happening in the current review of these two renewal 7
applicati'ons may not be' totally consistent with our 8
-understanding of what the rule was based on.
9
.A letter is going to be sent to the Commission 10 from NEI, I think today or tomorrow, that really defines in 11 a more specific way what these concerns are and there will 12 be some visits over the next week.
13 I think what I want to talk about is really 14 backing up to what'we talked about a while ago.
These are 15 generic issues and I think we want to guard against settling 16.
generic issues on specific applications.
This is what we 17 got into in the '70s and we ended up sort of all over the 18
' place.
19 I will grant the Commissioners, I may be off base 1
20 on this, but I'm still open, but what I would recommend on 21 current' licensing basis and on current programs, that we 22 have a dialogue-at the Commission level and let us 23 understand this as these two programs are going through.
24 I have heard it says that, well, on one of these 25
' applications, it's not a lot of money and let's move on.
l l
L ANN RILEY & ASSOCIATES, LTD.
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But I.think we're up here looking at the industry as a whole i
2
-and such a great. job has~been done on this, that I think we
.3 really need to spend:the time and do some dialogue, and.if 14 guidance is needed-to the staff, that doing the reviews, 5
then let's get it done generically.
6 If we're?off base,'if we miss something, then we 7
learn something.
But I have-heard this issue'about current 8
. licensing' programs from'my people,. putting together our 9
program.
It's a big-concern.
I know that some of the 10 people we're working with with other plants have a concern.
11 I think if there is one thing we've learned, it's 12 don't hold our concerns back, let's lay them on the table.
13 So I would really ask the Commission, as we come f
-14 up over'the next week, talk through this issue and try to 15 get an understanding of it and if something is off, then 16
~let's get it on. track early.
17 Again, let me just say I just really appreciate 18 the opportunity.to be here.
I think the more of this, where 19 all the stakeholders are here, is important and I just 20.
commend everybody for spending the time to do this.
21 Thank you.
22' CHAIRMAN JACKSON:
Mr. Lochbaum.
23 MR. LOCHBAUM:
We were concerned the last couple m
24 times I was up here that the remodeling being done next
'25 door, we heard, was to put in a drive-through window for ANN RILEY & ASSOCIATES, LTD.
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I'm glad to see that wasn't the case.
2 We talked earlier today about risk-informed 3
initiatives.
License renewal increases the risk by 50 4
_ percent, at least.
It's a fairly significant increase.
So 5
it needs to be done properly.
6 If the' risk per year is X and you've got a 40-year 7
license, that's 40X, 20 year extension would be 60X.
So 8
that's a 50 percent increase.
9 CHAIRMAN JACKSON:
I don't quite do my statistics 10 that way.
But do go on.
11 MR. LOCHBAUM:
It's because of PRAs.
The concern 12 we have is that the process virtually eliminates public 12 participation, and that -- it's not a new issue for us.
In 14 1991, we testified before Congress, and the words that Diane 15 Kern.said'then are applicable today.
16 The example -- and she forecast it wasn't very 17 hard -- she forecasted the process would eliminate public 18 participation, and Calvert Cliffs is proving Diane very much 19 correct.
20 I went in the public document room and looked at 21' the number of supplements and cottactions to the Calvert 22' Cliffs-license application.
There were at least 47 23
. individual supplements and clarifications.
There is also a 24 13-page list'of errata to the original application.
It's a 25
.very small_ font, too.
So this is-quite a bit of information
~
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79 1-that was not contained in the original application.
2^
All of that information was received after the 3-public comment period on the application had closed.
So the public had no opportunity to review the correct and complete 4
5 application before they chose to intervene or not.
~
6 We were -- we met with the National Whistleblower 7
Center prior to the closing of the comment period and we Q
8 just there wasn't anything for us to look at it to 9
provide anything to intervene on by August 7.
So we told 10
-Steve Cohen we could not intervene on a policy issue.
11 That whole process -- I was quote last month in 12 the Washington Post as saying that the process is a sham.
13 That was a misquote.
I actually said scam, but it's close 14 enough.
15 It doesn't -- the NRC and the licensee are using 16 the number of public meetings as a measure of public 17 participation.
You could have a meeting every day where the 18 public can come in and be patronized, and that doesn't count 19 as public participation. That's attendance.
That's not 20 participation.
21 Unless the rules change, where the public can 22
'actually get involved and review a complete document, not a 23
' blank piece of paper, and provide any meaningful comments, 24
_you're not going to have confidence in the rule or the 25 results that come from that process.
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'l-Basically, we're reiterating the objection we had 2
.in 1991 and in~several venues since then.
3 Thank you.
f
_4?
CHAIRMAN JACKSON:
What would you say has to 5'
happen at this point to address your concern?
6 MR. LOCHBAUM:
I'think it's fair that the public 7
should have at leact a 30-day public comment period once the 8
application'is finally complete.
That.would be, as a 9'
minimum,.an opportunity for the public.
The same 10 opportunity with the same rights and privileges that the 11 public had up through' August.7 of last year.
.12 There may not be somebody or any group that wants 13' to intervene, but to be asked to look at an incomplete and 14' inaccurateLdocument in 30 days, I think, was not meeting with:the intent of the rule and the purpose of this agency.
16 CHAIRMAN JACKSON:
Mr. Ortciger.
. 17.
MR. ORTCIGER:
Our position on this would be to
)
i 18
.say had you started down this road of risk information and 19 plant' operations. earlier, where we are today in terms of 20'
.. discussing license renewal, in terms of' degradation-of plant 21
' components, and the risks associated with their failure
- 22 twould not be as an important issue, because we would have 23 had PRAs.in place,.we would have had more risk information, 1
- 24
.and I think would have been in a better position to satisfy t'e public as to where or why you feel we can do these plant 25' h
l i
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life extensions.
2 Having said that, and this whole process was not 3
in place, plant life-extension is going to be, I think, very 4
strongly based on addressing very rigorous PRAs, which will 5
be important in' identifying the risk important system.
6
-I don't,know how this is going to be implemented,
'7 but I can see this as the direction that we're attempting to 8
go.
9 But I guess the first point is had we had what we 10 discussed ~ earlier today in place five years ago, ten years 11 ago, I think it would have been a lot easier in doing the 12 plant license extensions today.
13 CHAIRMAN JACKSON:
What do you feel ought to 14 happen on a go-forward basis?
15 MR. ORTCIGER:
I think you have to continue the 16
~ way you're going.
I can't see opening up this process 17 again.
18 COMMISSIONER McGAFFIGAN:
Madam Chairman.
19 CHAIRMAN JACKSON:
Please.
20 COMMISSIONER McGAFFIGAN:
I think.I will make 21 public some comments I've made to Mr. Lochbaum on the phone 22 with' regard to this public participation.
23 In point of fact, the application for Calvert 24 Cliffs was available in April and it wasn't -- there was a 25
.30-day window in which somebody had to come forward, I ANN RILEY & ASSOCIATES, LTD.
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{
1 believe, under our rules, and again, I'm not a lawyer, and 2
claim standing and make a general contention.
3 Specific contentions, I believe, did not have to I
4 be formulated until well into November or December.
So by 5
the time, I believe, that the National Whistleblower Center 6
had had six months to look at a very voluminous application.
\\
7 To say that there is an errata sheet or to say that there 8
are a few changes that have been made, there was a 9
voluminous application to justify the extension of a 10 license, in which there was potentially many technical 11 issues that could have been raised.
12 We, during that 180-day period, did not receive 13 anything that would come close to the longstanding rules of 14 the Commission with regard to what is a contention and what 15 detail has to support it.
16 So I think Mr. Lochbaum is asking for a 17 fundamental change in our Part 2 hearing process, but I 18 think it's breathtaking what basically would allow our REI l
19.
process the ongoing exchange to become something that's open l
i 20
-for contentions forever.
So I'm very uncomfortable with it.
21 I think that said, there is a lot of opportunity l
1 22 for public involvement in the process without a hearing.
23-The environment impact statement process goes on.
The 24 comments have to be dealt with formally.
If we don't deal 25 with.the public comments we receive, I think you can haul us ANN RILEY & ASSOCIATES, LTD.
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into court.
2 The safety evaluation report is public.
People 3
can pour over the safety evaluation report and comment on L4.
it.
The ACRS process, which, by statute, has to follow the 5
staff' evaluation process or would be somewhat parallel, as I 6
understand.the ACRS at the moment, is a public process in 7
which folks have participated in the past.and I would 3
8 encourage them to-participate this time.
9 And the Commission, at the end, has to make a 10 decision, as the Chairman has said, sometime next April or 11 May, and this will be a pretty profound decisions.
If l
12 issues have actually arisen, I can't imagine the Commission l
13 not dealing with them, whether there is a hearing or no 14 hearing.
.15 But I thought I'd just make those points.
16 CHAIRMAN JACKSON:
Other comments, Mr. Hintz?
Any 17 comments you wanted to make?
18 MR. HINTZ:
As the Chairman mentioned, we're going 19
-ahead with an application of Unit 1 at the end of this year 20 and we've had a lot of discussions with Baltimore Gas &
21' Electric and Duke on the process, and we're really 22 encouraged about how well that is going.
- 23 So we're looking forward to submitting our 24 application and getting on with it.
The feedback we've had 25 has been very positive the way it's been handled.
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CHAIRMAN JACKSON:
Mr. Curtiss.
2 MR. CURTISS:
Chairman-Jackson, let me just pick 3
up on your. comment, that you-asked a couple of times about
-4' before we go forward here in terms of the license renewal
)
5-initiative.
q 6-In a sense, the real success of this program is I
.7 demonstrated by what I think you're going to see for the l
8 coming years, and that is that based upon the discipline 9
' handling in the first two applications, there are going to 10 be a lot more that come before.the agency, two that have
'11 been' mentioned here and perhaps as many as 20 or 30 over the 12 coming years.
13 So this is potentially a real growth business, as 14 you;1ook at what the staff has done, and I think the staff 15 has done a remarkable job in both of these cases.
It does 16 seem to me that recognizing the limited resources that the 17 agency has, that there are a couple. things that can be done.
18 One-is to capture the experience that has gone forward in 19 the two cases and to revise the standard review plan to 20 accommodate that experience, so that the review process 21 doesn't have to be reinvented at every step of the process.
22~
In that context, I do believe that the question
-23 that Mr. Hairston raised about the need to come in and 24 defend existing programs needs to be worked through as a 25 policy issue and reflected in the SRP.
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.The other thing that I know in the case of Calvert 2
Cliffs has been extremely helpful, and I think it's a 3-thought worth considering for the future, is that.the
' oversight processes that have been established, including 4
5 the steering committee, the active involvement of this 6'
Commission'and presumably future Commissions, have been real 7
central, I think, as a mechanism to identify and raise
\\
8 issues and get them resolved quickly.
\\
l 9
Those two things taken together, it seams to me, 10
'have the benefit or potential benefit of streamlining the 11 process beyond what we've seen in the first two cases.
t 12 The schedules have been met.
It does seem to me 13 that there have been some issues of first impression.
But 14 the ability to incorporate those lessons in a go-forward SRP 15 of some' sort may actually make this a more efficient' process 16 and particularly when you may see a number of. additional 17 applications.
18 CHAIRMAN JACKSON:
Further comments?
Dr. Travers.
19 DR. TRAVERS:
Chairman Jackson, I'd just like to 20 acknowledge that by doing, in the context of license 21 renewal, we have an agreement that there are a number of 22 issues that have been. identified, we think license renewal 23 is fundamentally a success story in the context of Calvert 24 Cliffs and Oconee and-we're working those issues out.
25 Interestingly enough, not exactly the same way in ANN RILEY & ASSOCIATES, LTD.
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-1 each instance.
So consistent with what I think Mr. Hairston 2-and Jim Curtiss mentioned, there are opportunities.
We 3
intend to take advantage of them as we move forward, 4'
identify those, perhaps identify some policy issues that-may 5
need to be addressed by the Commission as we move forward.
6 There may be perhaps even implications for the 7
rule itself, because there.may be-some instances where the 8
view that you have of what the rule requires or doesn't 9
require may be at odds with our own read.
10 But fundamentally, we think we're at a good place 11 relative to Calvert Cliffs and Oconee.
In parallel with 12 that, we are actively considering the issues that have been 13 raised.
There is a white paper and apparently we're going 14 to be receiving some more information from NEI shortly that 15 will continue to foster that kind of understanding and 16 perhaps resolutions as we move forward.
17 CHAIRMAN JACKSON:
I appreciate your point about
.18
-capturing experience and folding that into the standard 19.
review plan.
The staff is aware that I had explicitly asked j
20
-them at a certain point to freeze the scope of the draft 21~
-plan in order to have a stable basis for reviewing the i
22 initial applications and the document around which the
'23 actual work plan could be structured, but with the full 24 intent that as there are issues that are raised and as there 25 are lessons-learned along the way, there has to be a ANN RILEY & ASSOCIATES, LTD.
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87 1.
mechanism to, in-fact, _ fold that back into updates of the 2
plan.
3 But at any given-point, there has to be a certain 4
level of stability, if, for no other reason, than it's fair 5.
to everybody concerned, it lays out our expectations and it 6
. allows'us to focus the work and it forms a good legal basis 7
for what we do.
8 So these are non-trivial aspects of it, but I 9
think the full intent -- and Sam and I have had a number of 10 discussions about that -- is to, in fact, fold in the 11 lessons learned.
12 Let me move on, unless there are further comments.
13 Mr. Gunter.
14 MR. GUNTER:
I would just take this opportunity to 15 reiterate our objection, albeit briefly, but it's obvious to 16 us that in the light that there are only two growth areas 17
.apparently left for this industry, that being 18 decommissioning and licensing renewal, it comes as no 19 surprise to our group, who basically witnessed the licensing 20 of many of these plants by your predecessors, but it -- our 21_
objection stems from the f act that this appears to be 22-.
nothing more than a simple railroad.
23 That the most contentious issues have been taken 24 out of the public purview for challenge and such obvious 25-issues as age-related degradation and the proliferation of ANN RILEY & ASSOCIATES, LTD.
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nuclear waste, without any demonstrated management plan that 2
has any confidence, I think just underscores the fact that 3
.this process will not move forward with public confidence 4
unless there are some radical changes to it.
5 CHAIRMAN JACKSON:
What do you feel needs to occur 6
on a go-forward basis?
7 MR. GUNTER:
Obviously, the whole generic 8
environmental impact' statement, I think, needs to be opened
.9 up again in terms of exactly what will be before the table 10 for the public to intervene on.
And the fact that the 11 agency has narrowed its scope only furthers ont our 12 suspicions, but the apparent evidence that this was a fait 13
-d' accompli for the industry to advance candidates for 14 license renewal.
15 CHAIRMAN JACKSON:
Comments?
Okay, let me move 16 on.
17-I know that all of us have spent a significant-18 amount of time over the past couple of years examining and 19 preparing for the changes introduced by the deregulation of 20 the electric utility industry and as that transition to a 21 more competitive markets on the generation side has begun to 22 take shape, we have seen a lot of changes, internal, 23 restructuring, ownership changes.
Some of you have taken on h
24 new titles and new roles, and we have worked to try to 25
-understand and respond accordingly.
We focused on four ANN RILEY & ASSOCIATES, LTD.
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' general areas, as I mentioned at the Regulatory Information 2
Conference in April.
WeLalways are looking at the 3
continuation of' safe nuclear operations and ensuring that 4
there'is no cost impact on that.
Electrical grid 3
reliability, which is not directly.within our regulatory 5'
6 purview, but we are concerned on the impact on the plants.
7 The availability of' funds for decommissioning and, of 8
course, license transfers.
And we.have seen an uptick 9
increase in license transfer applications as a result of 10
.some corporate restructuring, but really fundamentally due 11 to the sale of nuclear power plants.
12 So in December of 1998, the Commission issued a 13 rule that provides uniform rules of practice for hearing 14 requests associated with license _ transfer application.
We 15 also are developing guidance documents and really are using i
16 them for evaluating these transfers, and there have been 17 numerous meetings held with various stakeholders.
18 The overall effect has been to improve our degree 19 of preparedness.
I think most of you know that the first 20 agency license transfer review was completed on April 13th 21 when we approved the transfer of TMI 1 to Amergen, and just 22 yesterday the NRC Commission approved the transfer of the 23 Pilgrim license from Boston Edison to Entergy Nuclear 24 Generating Company.
And so Mr. Hintz, of course, and I 25 think Mr. Curtis and Mr. Gunter, then I would call on you to ANN RILEY & ASSOCIATES, LTD.
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'l make pertinent comments in this area, to get us started.
2 Mr. Hintz.
3 MR. HINTZ:
Thank you, Chairman Jackson.
4 Let me start out by saying I did not interrupt my 5
honeymoon to attend this meeting.
6 (Laughter.]
7 MR. HINTZ:
And after getting hit by a cement 8
truck, you don't know how happy I am to be here.
9
[ Laughter.]
10 MR. HINTZ:
As was mentioned, we just got the 11 approval of transfer of the Pilgrim 1. cense and that 12 process, you know, from my perspective, went very well.
I 13 think it was handled in a timely and efficient manner, and 14 based on the comments that I have had from Corbin, I think 15 he would say the same thing about the transfer of the 16 license of TMI, 17 CHAIRMAN JACKSON: Tell Corbin A'Six Month McNeil 18 that that was within six months.
19
[ Laughter.)
20 MR. HINTZ:
Okay, I'll tell him that.
21 But I would probably caution you that I believe 22 that you are going to see an unexpected number of requests 23 in the next few years, and I think that is going to be based 24 on a number of things.
25 One is I think you are going to see more outright ANN RILEY & ASSOCIATES, LTD.
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sales of nuclear plants.
Quite a few utilities have talked 2
to Entergy, and I suspect talking to other utilities.
You I
3 are seeing'the setting up of operating companies that will 4
require license transfers.
I think some of these 7..erating 5
companies will result in Gencos, which again will require a 6
license transfer.
Some of the restructuring changes that 7'
are going on I think will affect the majority of minority O
owners, and that will require a license change, and then just general consolidation of the ownership of some of these 9
10 j ointly-owned plants.
So I think it is really important 11 that we do have an efficient process and, if possible, have 12 the generic issues, you know, be addressed sort of once and 13 not be an issue for each license transfer, and I would 14 encourage the use of a legislative type hearing which I 15 think makes the process more efficient.
i 16 I know this is sort of obvious, but you know, these license transfers are really being caused by a 17 18 dramatic restructuring of the electric utility business, and 19 that is resulting from encouragement by the regulators for 20 divestiture of some parts of the business.
In some cases, 21 if there's a lot of incentives being given, pick whether or l
l 22 not you want to be in the wires business or in the 23 generation business, and you have seen the fossil plants 24 going first, but the preference would be to have the 25 utilities do something with the nuclear plants.
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I think.you are seeing a number of the single 2-nuclear unit utilities wanting to focus on other parts of
.3' the business, that they don't see that the nuclear is a big-4 part-of their business, and that they would just as soon, 5
you know, get out of that business.
6 I think'you are seeing marginally competitive L
L 7
plants that are looking for synergies, and.sometimes those 8
synergies, you know, can be obtained by being part of a 9
larger organization.
So I think there is, you know, a lot 10 of' forces that are driving this' change, and I think it is 11 going to result in a lot of requests for changes over the
-12 next few years.
And I think if we don't have an efficient process in place, a number of these smaller units will be 14 unnecessarily shut down because of economics, where they 15 probably, you know, could remain in the energy mix of this 16 country if they could be part of another organization.
17 I guess just'.one other issue I will throw on the 18 table, and that's not directly related to the NRC, but we 19-really have to get resolution on how to transfer these 20 decommissioning funds without adverse tax consequences, 21 because on the larger units, if you can't transfer them 22
. without tax consequences,*in my opinion, the unit will 23 probably.still be transferred and it will continue to
- 2:4
. operate, but the utility that is selling that plant will be
'25
.that plant will be worth considerably less.
But my l
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concern is on a' number'of plants, the. economics ere such 21
-that you:can't pay the. couple-hundred million. dollars in 13; taxes cx1 the decommissioning fund and so you won't see the 4
transfer, and some of those, I think, will result'in
.5 premature, unnecessary shutdowns.
'6-
~ CHAIRMAN JACKSON:
Let-me ask you a question, but
'7~
l'et'me. preface it with a. comment, and they are actually 8-disconnected.
9
.You-know, the comment is that the Commission
- 10.
obviously has been approached about conmenting on this issue i
11.
of tax consequences,. and some members of the Commission are 12 willing to lean further forward than others, but it's 13-important'that, you know, whatever the Commission has to say
.14 about this is within the context of our role as a health and 15 safety regulator, what the treatment of decommissioning
.16.
funds will have to do with that.
So, you know, we-undertook 17 the rulemaking on decommissioning funds and the 18 decompissioning funding assurance because obviously-that, 19 you know, will assure the availability of decommissioning 20
. funds for the safe decommissioning of these plants, as is 21 important.
So I'just kind of wanted to lay that on the 22 table because'it is -- you should just know it is playing in 23 the background within the Commission, and there is not
'24 universal agreement at this stage of the game as to what 25 might be said,. although I think there is probably agreement ANN RILEY & ASSOCIATES, LTD.
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that something could be done.
2 Let me have Mr. Curtiss make a comment.
3 I didn't ask my question.
My' question was, you 4
kept speaking to the issue of having an efficient process, 5
and I. guess I just want to know'are there things that you 6
have seen that'give you pause in terms of a particular 7
concern, or is it more a continue in the mode that the 8
Commission has been in to this point?
9 MR. HINTZ:
From'what I saw in the transfer 10 license of Pilgrim, there was no part of that that gave me 11 any-particular concern.
I think more, you know, generically j
12 and for the industry, I think the two areas that I do have l
13
'some concern is I think you are going to see probably more
-14 requests than you are anticipating in whether or not, you 15 know, you-will have the resources to address those timely, I 16 guess would be one concern.
17 And the second thing is I think we should all --
18 although it wasn't a problem with Pilgrim, but I think 19 anything-that can be handled generically, because I think 20 you are going to see so many of them, I think would be in 21 both the industry's and the NRC's best' interest.
22 CHAIRMAN JACKSON:
Okay.
Mr. Curtiss.
23 MR. CURTISS:
I would just add, I think, a couple 24 of. points to what Mr. Hintz has said.
I do think there was 25 a point in time when the regulatory process as it relates to ANN RILEY & ASSOCIATES, LTD.
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r S-95 1-the1issuancelof li~ censes and license amendments was 2
perceived as unpredictable and oftentimes critical path on 3
some of these issues, and largely because of two well-known 4
cases that'came before the Licensing Board that were lengthy 5
and unpredictable in the outcome.
To the Commission's w
6 credit, I think the steps that have been taken in the 7
- context of license transfers and licensing actions that
-8 relate to what's happening within the industry and the 9
restructuring that Mr. Hintz has referred to have largely 10 addressed.the fundamental issues that we see as we advise : clients or in the other capacities that I'have with 12-individual companies.
.13 In particular, I think the step that the 14 Commission took to bring more discipline to the Licensing 15.
Board process, where a case comes before the Licensing 16 Board, including the promulgation of the procedures that 17 were adopted for license transfer actions, helped to provide 18 a more productive and focused framework for the addressing 19 of issues in that context.
20 The Commission also, I think, took several steps 21 in the area of establishing the criteria for reviewing these 22 actions, and here I think of issues related to sort of non-23 traditional ownership of nuclear plants by non-electric 24 utilities where financial qualifications issues could be 25
.very nettlesome.
And I think what the Commission has ANN RILEY & ASSOCIATES, LTD.
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r S-96 developed and the Staff has worked on really have provided 1
2 some solid foundation for how to address those issues.
~
3 The only remaining issues I guess I see that still 4
warrant attention h.sve been referred to in one way or 5
another here.
I know the Commission has recommended 6
legislative authority dealing with the foreign ownership 7
issue, and I'think that is going to be an important 8
initiative to move forward on.
In the context'of your 9
current legislative authority, I think there is substantial latitude for the Commission to address the foreign ownership 10 11 question, but ultimately I think it would.be beneficial for
-12 the Congress to enact that legislation.
j 13 Secondly, it seems to me that as the question of 14 non-electric utility ownership becomes a bigger issue, maybe
.beyond what was. originally proposed in the Great Bay case, 15 16 that there are going to'be instances where additional 17 guidance may be useful on what the review criteria are going 18 to be on financial qualifications and other related issues.
j 19 And then finally I would comment on the question l
20 that Mr. Hintz has raised about the tax consequences of 21 decommissioning funds, and Chairman, the question that I 22 think you alluded to, which is what is the nexus between 23 that issue and the agency's regulatory responsibilities for 24
. overseeing and regulating nuclear power plants, and I do 25 think one can make an argument that there is an interest ANN RILEY & ASSOCIATES, LTD.
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^
'2 goes th' rough this consolidation, to the extent that that is 3.
a beneficial thing, if this is an impediment or.issuefthat 4
needs to.be' addressed, to facilitate that happening, that 5
that is consistent with your regulatory role.
I understand 6
"that there.may be another argument on that' question, but it 7
does seem to me that there is an-interest that you do have 8'
in this area.
9 CHAIRMAN JACKSON:
I think, though, that there is 10.
a question with respect to it in terms of not having tax 11 consequences to transactions being separate and distinct 12 from some total flexibility of licensees to use those 13-transactions or funds that may come out of them.
If one is 14 below the. actual limit of funds that our regulations 15 prescribe, that these funds, you know, a number of companies
-16 have quote, unquote, overfunded pension funds, and they use 17 those funds for various other things that don't have to do 18 with pensions, and that's allowed.
But there is an issue 19' having to do with the net amount that the Commission 20 prescribes to have put away.
21 MR. CURTISS:
I certainly agree with the emphasis 22
'the Commission --
23 CHAIRMAN JACKSON:
And even if one, you know, has 24 some transactions that allow some boost, but one hasn't 25
' reached that level yet.
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MR'.
CURTISS:
Right.
2 CHAIRMAN JACKSON:
There's a real question about, l
3
.you know -- because when I. kind of' brought that up with a j
4 group that shall remain nameless, people kind of seemed a 5-little bit uneasy, which led me to believe that' people had
{
6 some-thoughts about using the ability to do transactions 7-with_ respect to these funds, for uses other than f
8 decommissioning, you know, with it still below a certain 9
level.
And as long as we are clear on that, then --
l 10 MR. CURTISS:
Yes.
I think the Commission's 1
1 single-minded focus over the past several years on ensuring 11 12 that irrespective of what happens with the transfers, that 13 sufficient funds need to be available for decommissioning,
.14 that ought to be respected both at the federal and the state 15 levels.
I think it is. aul important aspect here because as 16 these transactions involve new ownership arrangements,
_17.
decommission is clearly -- the adequacy of decommissioning 18_
funding is clearly a central focus of the agency.
19 CHAIRMAN JACKSON:
Okay.
Thank you.
20 Mr. Gunter.
-21 MR. GUNTER:
Well, one particular concern I would 22 like to focus on is just the whole apparent yard-sale nature
-23 of these license transfers, and how it applies to foreign 24 ownership, in.that obviously some of our critical concerns 23 with this regard has to do with whether or not your agency, ANN RILEY & ASSOCIATES, LTD.
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with all-its apparent difficulties in foreign oversight
)
1 historically,.can now take on the added burden and challenge l
2 j
.of jurisdictional issues _over foreign corporate boardrooms, 3
i 4
I think this has a direct bearing on public health 5
and safety here in the United States, and it opens up any 6
number-of issues, including the final disposition of nuclear 7
materials which can.-- are involved in the_ proliferation of 8
-nuclear. weapons,.as well as the environmental problems j
9 associated with high level nuclear waste and low level 10-nuclear waste.
I think this -- it just opens a whole 11 Pandora's box of issues here, and it is going to be a 12 significant challenge to this agency and to the 13
-environ' mental future.
1 14 CHAIRMAN JACKSON:
. Well, you are aware of the 15 fact that there are a number of fuel cycle facilities, 16 including fuel tabrication facilities, that in point of fact 17' have foreign, quote, unquote, owners, and so one could make 18 an argument that burning nuclear fuel in a reactor puts it 19 into a more proliferation-resistant form, if one were 20 concerned about the ultimate disposition of the materials.
21 Do you have a point of view about foreign ownership of fuel 22 cycle facilities as operating units?
23 MR. GUNTER:
- Well, I_ guess our point of view has 24-to do with our concerns with regard to using nuclear waste 25 as a currency, and the issues that are associated with the ANN RILEY & ASSOCIATES, LTD.
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.1 proliferation of this material as a currency, that is both 2
valuable to industry and military applications, and certainly we have concerns with. regard to foreign ownership 3
4 of those fuel cycle facilities as well, but we certainly view this as a departure for accelerating this whole problem 5-
\\
6 by opening it up to foreign ownership of those reactors.
I 7
CHAIRMAN JACKSON:
Commissioner McGaffigan.
8 COMMISSIONER McGAFFIGAN:
Well, I just follow on 9
your point, Madam Chairman, that foreign ownership has been 10 allowed and welcomed in order to keep a viable fuel facility 11 industry in this country for more than a decade, and I think 12 we only have one' firm, General Electric, that is still in 13 American hands, and-I think we have done a good job 14 overseeing the fuel cycle facilities.
There has been no 15 problem dealing with foreign corporate boards, nor has the.
16 Food and Drug Administration had any problem dealing with 17 European or Japanese drug manufacturers, or whatever.
So I 18 we live in an international economy.
There are no non-19
. proliferation issues that come up at these plants.
The fuel 20 is quite non-proliferation-resistant when it leaves the 21 plants, and I just -- you know, _there is a foreign ownership 22 control standard plan that's been out for comment, and I 23 assume we have gotten comments on it, and as people have 24 alluded to, it is part of our legislative program to try to 25 fix this issue, and so it will be debated in Congress, but -
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'l 12 CHAIRMAN JACKSON:
You realize, Mr. Gunter, that 3
even if the foreign ownership' restriction, quote, unquote, 4
were lifted, that the non-inimicality determination that the l
5 Commission would make with respect to any transfer' of a
6
. ownership or foreign ownership remains, the non-inimicality 7
determination.
8 MR. GUNTER:
Could you explain that a little bit?
I 9
CHAIRMAN JACKSON:
The Commission, in making any 10 determination with respect to foreign ownership, has to 11 concomitantly make a determination that such a transfer not 12 be inimical to the common defense and security.
13 COMMISSIONER McGAFFIGAN:
That is in Section 103 14 and 104 of the Atomic Energy Act, and irrespective of the 15 preceding sentence that deals with ownership issues, and 16 obviously that would preclude in the fuel cycle facilities, 17 it would have precluded us from -- although not that 18 section, other sections.
If Muamar Khaddafi had volunteered 19 to buy out= Westinghouse's fuel cycle facilities, I don't 20 think it would have passed muster.
So there is a -- but 21' European or other owner, they allow cross-ownership by 22 American firms in Europe, and it's the modern world.
We 23
. ould have to make common defense and security w
24 determination, and we have not ever proposed to touch that.
25 MR. GUNTER:
I would just add, though, that it --
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1 I think that we are all in agreement that the modern world 2:
is becoraing1 increasingly a dangerous place, particularly
'with -- when -- as thisLmaterial gains more credibility as 3
4
' currency, and that's of particular concern in light of the
-5 unpredictability of'-future government instability.around --
6:
you.know, on a. global. scale.
It just seems to me that this 7.
is an issue that we should be keeping in-house for our own i
8 security as'well as our own ability to control the 9
. environmental issues associated with it.
i
.10 -
CRAIRMAN JACKSON:
I think we are really here to 11'
. hear frcm you, not to necessarily debate you.
But we are 12 not proposing to let the' nuclear plants leave the country, l
13 and that is an important issue.
14
.MR. ' GUNTER :
Control, though, is the issue, and' 15 jurisdiction and enforcement of issues.
16 CHAIRMAN JACKSON:
Let me just say that in what is 17 proposed -- and I would invite you to actually scrutinize i
18 the proposed standard review plan in this area -- those 19 issues,. in fact, are ones that the Commission has focused i
'20 on, the issue of who controls what and so on.
And if there 21 are suggestions that you could make to us relative to that
-22 inLterms of how we might strengthen things in that regard, I 23 think that would-be good.
.24 MR. GUNTER:
Well, I think, to begin with, I think j
i 2 5 -.
that you don't allow -- that you don't uphold the current 1
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Atomic Energy'Act prohibition.
I think that is why it's j
2
'there, and to give.this material credibility, I think
.3-nuclear. waste, particularly as a currency, and --
4 CHAIRMAN JACKSON:
That's what I'm missing.
How does this give nuclear waste as a currency credibility? 'Can 5
6
.you explain that to us a little bit?-
i 7
MR. GUNTER:
Well, it -- I think that it's a 8.
slippery slope that I'm referencing in terms of as we allow' 9
greater foreign ownership of U.S.
reactors, that opens the 10-question of what happens with nuclear waste, what happens 11 with the nuclear materials generated after the fact, and 12 that's one issue.
13 Thehe are the associated issues, though, of your 14 own agency's history of its inability to adequately enforce 15 safety issues, regulations, and how that's going to.be 16 impacted by trying to exert your jurisdiction on foreign 17 corporate boardrooms.
18-CHAIRMAN JACKSON:
In some ways what you are l
19 talking about relates to, to some extent, the issue of 20 management again, and I will just say that in the end, the 21 NRC always has the prerogative that if it feels that public 22 health and safety is threatened, to shut down an operation, 23-to lift the license, et cetera, of going through due 24 process.
And so I don't believe that the agency intends to 25 move away from that, and we will.have to see where we go.
I ANN RILEY & ASSOCIATES, LTD.
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personally.believe we are going to have more situations like 2
Mr. Hintz's, where he's going to go around and buy up 3
everybody's nuclear plants, but_we will see where it goes.
4 That's just my prediction, and.you know how predictions are.
l 5
It's a free statement and, you know, it's worth what it 6-cost.
.7-I think what we will do is try to take about a 10-8 minute break and then come back and finish our discussion on 9
the' final topics, PBPM and-2.206 petitions.
Is that 10 reasonable?
I just think it's a more efficient use of 11 everybody's time.
Okay.
Thank you.
]
12.
[ Recess.]
.13 CHAIRMNN JACKSON:
We have two more topics to 14 cover.
The first is the Planning, Budgeting and Performance 15
' Management process of the NRC and the strategic plan.
A 16 major goal of the NRC is to become an outcomes-oriented
-17 performance-based organization, and the primary strategy for 18 achieving this goal is to create a disciplined, integrated 19 process for planning, budgeting, and measuring performance, 20 and our PBPM process -- it's the acronym for Planning, 21 Budgeting, and Performance Management -- implements this 22 strategy.
23 The four phases of it are, first, planning; 24 namely, setting the strategic direction and planning the 25 work.
A second, determining the resources required for ANN RILEY & ASSOCIATES, LTD.
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.1-
'that.
Third is' measuring and monitoring performance.
And 2
fourth is assessing the progress toward and identifying ways 3
to improve outcomes.
4.
The PBPM process was used to develop the initial 5
NRC strategic plan in the fall of 1998.
It also was used in 6
the development of the FY2000 budget.
It is a work in
.7-progress.
We are continuing to refine and to implement the 8
PBPM process to improve our integrated planning, to advance 9
toward our goal of, as I say, becoming outcomes-oriented and 10 performance-based.
11 As part of this effort, the NRC requested Arthur 12 Andersen Consulting to conduct an assessment of the PBPM and 13 to use the Office of Nuclear Reactor Regulation as a pilot 14 to further the implementation of PBPM.
This afternoon at 15 2:00, 2:00 p.m.,
the Staff will be briefing the Commission 16 on the PBPM process and the results of the pilot.
You are, 17 of course, all invited to observe.
The Commission is in the 18 process of updating the strategic plan to reflect more fully 19 the regulatory reform efforts underway.
We are 20 concentrating our efforts on the update of the nuclear 21 reactor safety arena.
22 Additionally, the update of the strategic plan has 23 benefited again from a review by Arthur Andersen to make our 24 activities more effective and efficient, and outcomes-based.
25 As part of this review, five outcome goals have been ANN RILEY & ASSOCIATES, LTD.
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identified,' which weJanticipate will be incorporated into 2-
'the' strategic plan.
We expect to have a revised strategic 13
. plan available for public comment soon.
However, we 4:
nonetheless are-anxious to get your views on these outcome
[
t
- 5 goals today and your general comments, if you have them, on
.6 the PBPM process.
7 The outcomes goals are, first, maintaining safety; 8
second, reducing unnecessary regulatory burden; third, 9
increasing public confidence; and four, increasing our 10.
internal efficiency and effectiveness.
And the fifth goal 11 is enhancing our ability to make realistic decisions that are timely and predictable.
12 13 I am going to ask Dr. Travers to tackle this topic 14 first.
15 DR. TRAVERS:
Thank you, Chairman.
16 I have to admit that about a year and a half ago 17 when I first heard about planning, budgeting, and 18 performance management, it seemed to me that'any discussion 19 of that topic might be a sure-fire cure for insomnia, but 20 since then I have become enthusiastic about its potential i
21
'and its usefulness in NRC.
And, in fact, we have been 22 actively' pursuing furthering the conceptual objectives of 23 PBPM beginning, as the Chairman indicated, around 1997, we 24 used itfto sope extent, some limited extent, in our last 25 budget cycle, and we are using it in this current budget ANN RILEY & ASSOCIATES, LTD.
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cycle even further.
2 I think if you talk to the managers in the Office 3
of Nuclear Reactor Regulation and more recently in the 4-Office of Research and the Office of Nuclear Materials 5
Safety and Safeguards, you are going to detect in. fact, I i
6 think you.will rapidly get the sense of a great deal of 7
-enthusiasm for this process and its' ability to help us plan l
i 8,
work against established outcomes, help us in our 9
fundamental objective to be outcome-oriented and 10 performance-based.
We have made some considerable progress 11 in this regard.
The Office of Nuclear Reactor Regulation, i
12 in particular, facilitated with Arthur Andersen, has gone i
13 through a process of defining or identifying work that 14 aligns with the outcomes that we have talked about here, 15 including sunsetting, or at least looking at opportunities j
16 to sunset some work that had been ongoing.
17 So it's a process that we recognize we need to 18 further refine, particularly in the context of an agency-19 wide strategy, arena strategy, but we are furthering it, and 20 as I indicated, more recently in the Offices of Research and 21 NMSS.
22 As the Chairman mentioned, this afternoon we are 23 going to be going through a discussion of PBPM in some t
24 considerable detail.
Additionally, and importantly, we are l
l 25' also going to be issuing a strategic plan for the reactor i
f ANN RILEY & ASSOCIATES, LTD.
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arena some time early summer, and my own view is that there 2
is a' key element of PBPM that relates to this meeting, and I
-3 would like to just. discuss it for a moment,.and that simply is that-we look at PBPM process as an opportunity to help 4
5 institutionalize some of the current agency initiatives that 6
have been' discussed at this meeting, in fact, have been discussed in a; number of meetings that we have had recently, 7
8
' including the regulatory information conference.
9 Particularly~what I am talking about in the 10 context of PBPM-is a requirement in the process that calls 11
-for an assessment of how we are doing, how we are in fact 12 performing against the established outcomes.
It includes 13 assessments that we would. conduct on our own.
It includes 14 assessments that would perhaps from time to time be carried 15 out by third-party organizations, perhaps most importantly, 16 it. includes assessments from our stakeholders as to how we 17 are doing.
And we view the PBPM process and this input, 18 these assessments from various sources, as providing an 19 opportunity to feed the cycle back into the redefining or 20 refinement, at.least, of our strategic goals.
21 So we view this meeting, we view certainly PBPM as 22
- a. process, a tool, really, that can help us achieve this 23' objective.
24-I'want to invite everyone who can to come to the
'25-meeting this. afternoon.
I think you will find it-ANN RILEY & ASSOCIATES, LTD.
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interesting.
As I said, I think you will find a lot of 2
enthusiasm on the part of the senior managers for our 3
efforts thus far.
As the Chairman indicated, we recognize that we have a ways to go in optimizing the process, but we 4
5 are confident that with some further refinements and
^
6 Commission endorsement that we can make this process work 7
even better.
8 CHAIRMAN JACKSON:
Thank you.
9 Commissioner Merrifield, 10 COMMISSIONER MERRIFIELD:
Thank you, Chairman.
11 I share the. enthusiasm of Mr. Travers for this 12 process.
I think it will be a very positive effort in terms 13 of bringing us the kind of management style that we need.
14 One of the things, when I was preparing for our 15 meeting this afternoon, reviewing the Arthur Andersen 16 report, it recognized some of the unique characteristics of 17 this agency; most notably the Commission, the Chairman and 18 the other four members, in a role that makes in the whole 19 planning process, that brings with it, obviously, some 20 difficulties, some of which are pointed out in the report.
21 Most notably, it had some criticism, limited criticism for 22 us and our tendency perhaps to micromanage, but also 23 recognizes the fact that it's difficult, given it's a five-24 member commission, to always come to resolution of issues 25 which,,of course, ultimately the ability of the Commission ANN RILEY & ASSOCIATES, LTD.
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2 proportionate to.the ability of the Staff to do so.
3 But I guess I want to form this in a couple of 4
. questions.
We do have some CEOs here today who are 5
responsible for operating large corporations and frequently a
I 6
deal with management structures and consultants who come in 7
and try to tell you how to improve the way in which you can l
8 reach the bottom line and serve your own stakeholders, be 9
they stockholders or be they the utility customers that you 10 represent'.
And I am wondering, given this, if you have some 11 insights as to how, given the unique nature of our 12 Commission, we can appropriately direct our Staff and how 13 perhaps you have dealt with some of the issues and
'14; tendencies of micromanaging your staff, and how we might 15 take some lessons from that.
Don or George, you had some 16-insights you-wanted to share?
17 MR. HAIRSTON:
Of course, I'm not privy to 18 everything y'all are working on, but just reading some of 19
-the trade articles, you are dealing with this issue of where 20 you can get together as a body and discuss non-decisional 21 things.
I have seen -- and I have made this comment to 22
-y'all on a number of occasions, that that's something that 23 really you;need to do.
I'm not talking about decisional 24 issues, but I know there are times that we just sort of have 25 to get together in a room with my leadership team, and Jack, ANN RILEY & ASSOCIATES, LTD.
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-1 Dave, Barry, and Barnie, and people like that, and say now 2
.where are we going.
And just where everybody can do their 3
views.
I.think that is a big step, if y'all are moving in 4
that direction.
5 I think the other tendency-is, that we have had, 6
is to overmanage.
I think you don't want to do that, but I 7
gave you a couple. examples today of where I think you'need 8
to stick your nose in at the front of the process, at the front of1the proc'ess,.and then assume that your leadership 9-10-team is going to implement the guidance you give them.
I 11 really see the Commission moving more in that direction.
So 12 I think y'all are on the'right path.
I think you have got 13 to stay the course.
I think listen to people like Arthur 14 Andersen, listen to what they have to say, and understanding 15 what they have to say, and then you're the only people that 16 really know how the Commission, how this Commission works, 17 and so it is your final decision, you've got to make it.
18 But I appreciate the fact that you are wrestling with these 19 kinds of issues.
I think it's going to be better for your 20 staff, better for all the stakeholders.
21 CNAIRMAN JACKSON:
Mr. Hintz, and then I am going 22 to ask Mr. Curtiss, since in fact was a member of the 23 Commisison.
24 MR. HINTZ:
As George said, I really, you know, am 25 pleased that you are struggling with those issues and you ANN RILEY & ASSOCIATES, LTD.
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are dealing with those issues, but I don't know that I have 1
l2-
'got any insightful comments that I can give you.
But I
-3
.think those are, you know, extremely important issues, and.
1 i
4 the fact that you areLtaking quality time to deal with them, f,
'51
'I think is extremely important, and I am pleased to see
~
6-
-that.
1 7-CHAIRMAN-JACKSON:
Mr. Curtiss, 8
MR. CURTISS:
Let.me offer a couple of comments, 9
and I, too, am not a student of the PBPM process, although 10 the fact that it has an acronym I think reflects that it has 11 some staying power, so --
12
~[ Laughter.)
13 CHAIRMAN JACKSON:
Always got to have that.
14 MR. CURTISS:
I am impressed with what little I 15 know about this subject because it does seem to me as I 16 looked at the materials from the previous meetings'and the 17 tasking memo and so forth, by far and away the most i
18 significant challenge, in'my. view, and it's been said in 19 previous meetings, so it's not an original thought, is the 20.
change management process that you have to cp) through here, 21-and I think, as Jeff's question alluded to, there are others
- 22 here that have gone through-that in a private sector context
- 23' but don't deal with the kind of issues that you have here, 24 not the least of which is a commission structure that brings 25
.a'new commissioner and a new chairman to the agency IdRT RILEY &' ASSOCIATES, LTD.
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periodically,'so that structure changes statutorily, as well 2
as the subject that I just want to talk about in a minute, 3
and that is the_ structure of the Commission, the l
-4 Headquarters _ Staff and the Region itself.
But I know when I 5
'came to the Commission in 88 thinking about the fact that 6
five years is going to go pretty quickly, it occurred to me 7
that I~ought to.have a pretty good sense of the three or 8
four things that I wanted to do, and the maintenance rule is 9'
one, and there are two or three others, license renewal and 10 high level waste issues.
And against that backdrop, I am 11 struck with how much has been accomplished and what has been 12 set forth and the discipline that the PBPM process has
~13-brought to managing the significant changes that are going 14 on right now.
15-So I think that is a real testament to the 16 commitment that you all have made, not just identifying the 17 changes, but managing the successful outcome of the changes.
18 And my only hope, I guess, and I trust most people here 19 would agree with this, is that as you see the transition 20 occur, Chairman Jackson, at the end of your term, and 21 understanding that this set of initiatives really had a 22 strong foundation in the entire Commission and the entire 23 Staff, things are going to change at that level, and it does 24' s'eem to me that the ability to sustain the progress on the 25 initiatives that you have underway, if there is a question ANN RILEY & ASSOCIATES, LTD.
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S-114 1-mark outside of the' agency, it would be that.
What will i
2 happen with respect to the initiatives and their 3
sustainability.
And I have a lot of confidence, as I look 4
around the room, at'the people involved here, that there 5
will be a seamless transition and those initiatives will go 6
forward smoothly.
7 But let me'just offer an observation here that is 8
_not squarely on point, but it's something that I guess I 9
characterize more as a rumination rather than a 10 recommendation at this point.
If you look at what has been 11 described in some way here about what's happening with the 12-industry and the potential consolidation of utilities i
13 operating nuclear plants as one factor, if you consider the 14 budgetary pressures that the agency is under and I think 15 will continue to be under in terms of the FTEs and the 15 downsizing of the manager to staff ratio, and on this 17 question of how you ensure that there is continued line of 18 sight accountability throughout the organization on these 19 very important initiatives, it does seem to me that at some 20 point it's worth asking the question about how the agency is 21 structured in terms of the headquarters region model.
And I 22 haven't given that a whole lot of thought, and hence don't 23 couch this as a recommendation, but perhaps there is some 24.
merit to looking at the question about whether there is a 25
-point in time over the next three to five to 10 years where ANN RILEY & ASSOCIATES,'LTD.
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-one might see a consolidated agency from the standpoint of
~
2.
the regions and the headquarters, with maybe some inspection 3
-staff focused in.the regions.
And I say that for a couple 4
~ of reasons:
5 One, it.does seem to address what will continue to 6
be downward' pressures on the agency and its staff and its senior managers, and the importance of having the right 7-8 senior managers in the right place.
9 Number two, if you have at some point six to 12, 10-15 utilities'th'at are operating plants, you have to envision 11.
a circumstance where they're operating plants -- a single 12 entity'is operating plants in what now may be multiple 131 regions, which in my mind creates the kind of challenge that 14 I know that Don-Hintz dealt with when he had two plants in 15 two different regions.
16 And then, third, it does seem to me that on this 17 question of ensuring sustainability of the initiatives that 18-you have underway, and the ability to make sure that you 19-have got line of sight accountability and close focus of the
-20 type that Mr. Hairston described when he gets his team 21
-together, that-there may be some merit to such a concept 22 from that perspective.
So I offer that as sort of a topic
- 23
,somewhat.related but not quite related to the PBPM process, 24 but at least worth considering as you look at how you are 25 going to manage change and how-the industry is going to ANN RILEY & ASSOCIATES, LTD.
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evolve over the next five to ten years.
2 CHAIRMAN JACKSON:
Thank you.
That was a 3
provocative and, I think, very thoughtful comment.
I would 4
just make two comments.
I think that, you know, people are 5
ruminating about that, but the thing I have ordered the j
6 Staff to do -- and you may have even heard me speak to, I l
7 believe, at the INPO CEO Conference -- is that it is 8
important to start from the right end of the paragraph; that 9
moving into this pilot program vis-a-vis a new oversight, we 10 are risk-informing the regulations, we are anticipating and 11 beginning to process license transfer and license renewal 12 applications, and so what happens is going to be driven by 13 what happens, and I think it is important that one know that 14 change may, and most likely will, involve an examination or 15 re-examination of how the agency is structured, but it is 16 not whose ultimate form should bias what we do going in.
17 And that's what I mean by starting at the right end of the 13 paragraph, that we have a lot of work underway, and I think 19 over the course of the next year, a lot more things will 20 become more clear, but that will inform decision-making 21 relative to that.
22 Nonetheless, in the meantime, PBPM and other work 23 change processes are being implemented in a way that will 24 allow us to both handle the work on our plate in as 25 effective a way as we can, but also be as informed about how ANN RILEY & ASSOCIATES, LTD.
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we do our work, coupled with any external changes that 2
and changes in our regulatory program -- that would drive a 3
given structural model.
So I welcome your raising that 4-issue, but at the same time I have always maintained that we
-5 have to start-at the right end of the paragraph.
6 Sam, I don't know if you had any generalized 7
comments.
I'know-you are going to be talking this 8
afternoon,1so I don't want to preempt that, but if you have 9
any general comments you want to make in this area.
10 MR. COLLINS:
Thank you.
Morrie and Jack Silver 11 have the lead this afternoon, so I 12 CHAIRMAN JACKSON:
So you can talk.
Okay.
1 13 MR. COLLINS:
We are sensitive as the lead office 14 for the agency, NRR, to the impacts of the PBPM process, as
.15 well as its limitations.
Commissioner McGaffigan and I had 16 this conversation before.
I threatened to bring a potted I ';
plant to the Commission meeting, but 18'
[ Laughter.]
-19 MR. COLLINS:
-- but you can only plan, quite 20 frankly, so much work as far as the outgoing schedule is 21 concerned. 'The NRR organization, by necessity, has to be 22 responsive to the Commission, has to be responsive to the
)
23
' active work, it's part of what we do.
I believe if we ever i
24 get to the point where we can plan in an outgoing fashion 80 25 percent of our work, that will probably be as close as we ANN RILEY & ASSOCIATES, LTD.
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But what this process does' allow is for the discipline 2~
to acknowledge the impacts.
It's something we have perhaps
)
1 3
been searching for in the past, as well as the ability to
~4 respond.
51 Many of the issues that we discussed here today,.
6 public perception issues, new issues we hadn't. anticipated 7
years ago,like the' transfer of foreign ownership, how many i
8
. plants do-we.have coming in for license renewal.
I've heard 9-valid concern expressed, is the agency positioned source-10-wise, talent-wise for some of these challenges of the 11 future.
This process allows us to look at those in a way, 12 at the plan in a way that makes our response credible and 13 dependable, and it raises the balance issues that we 14 discussed, about this balance between r, educing unnecessary 15 regulatory burdens and a balance between being efficient and 16 effective by being able to communicate to our stakeholders 17
'like we are here today on the types of issues.that we talked j
18~
about.
Within NRP, I believe that through all the work of 191 the Staff,:.they are' positioned very well--for it.
I don't 20 think we could let go of.this process and still be as 21; credible as we have been for the past year and a half, to 22 focus on change and get things done to help'other regions.
23 I didn't mention the regions in this process, but clearly
-24 the. regions are involved through.their operating plants, 25
-through the'PBPM, they are supporting the program office in ANN RILEY & ASSOCIATES, LTD.
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'l our goals.
2 We are.at the point now where we are looking at 3
organizational and individual effectiveness, starting to 4
look at the attributes of leadership, team work.
We are 5
focusing on areas that the Staff has brought forward.
Can 6
ve get to where we want to go as an organization without 7
' centralized planning and work processes?
We have issues in 8
that area.
How are we going to handle as an agency the 9
shutdown plants, a process we have looked at for a while.
10 What is our involvement in a shut-down plant.
The old 350 11 process, as far as oversight, how is that -- the Staff 12 actually is engaged in bringing those issues forward and 13 saying for us to be effective, we should address that.
So 14 again we have a lot of work to do that I believe will help 15 position us for the future and some of the successes and 16 challenges that we talked about today.
17 CHAIRMAN JACKSON:
Thank you.
18 The next area and the final area I would like to 19 Miscuss is the quality of our 10 CFR 2.206 petition process, 20 and this is a crucial and a valued aspect of our regulatory 21-regime.
It is meant to allow the voice of any stakeholder 22 to be heard and the concern of that stakeholder to be 23 reviewed appropriately and expeditiously.
I 24 In that vein, we have reviewed an have worked to 25 revitalize our process for responding -- in order to respond i
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1 to stakeholder criticisms that this process is slow, t
2 unresponsive and unclear.
3 In fact, I included the 2.206 petition process in 4
my tasking memo to the Staff, directing that we focus on 5
being responsive and on improving our timeliness.
We need 6
to be more open with petitioners, similar to the efforts we 7
have made to be more open with our licensees and other 8'
stakeholders.
Some actions we took under the tasking memo 9
included we established a petition review board --
10 established petition review boards for early management 11 involvement in the process.
We posted petition status on 12 our web site, established timeliness performance matrix, 13 provided our internal review process procedure to 14 petitioners, and surveyed petitioners in January for 15 feedback on how to improve our process.
Ne have seen 16 improved timeliness of our petition responses, and we have a 17 pending change to our internal process for handling 18 petitions due to be implemented this June, and it will 19 include first changing the informal hearing process to 20 public meetings; providing petitioners approximately one-l 21 half hour to present their petitions to the petition review 22 board;. assigning a single staff point of contact; and 23 conducting more telephone contact with petitioners; adding 24 petitioners to appropriate plant service lists which 25 petitions are pending.
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However, we do remain' aware of criticism from petitioners that our process needs further improvement and 2
3 may not have considered all.the needed stakeholder input.
Considering the aforementioned value of this part of our 4
5 regulatory-regime, I think it is essential to solicit 6
unfiltered feedback on this issue, and to that end, I would 7
like Mr. Lochbaum to start, and then I would like to ask Mr.
8 Gunter to share his insights.
9 MR. LOCHBAUM:
In the written comments that we 10 provided for today's meeting, we looked at how the Staff is f
11 addressing a number of other issues that are before
{
12 stakeholders and how the Staff is dealing with this issue.
j 13 In the tasking memorandum, they have defined 14 design bases, and the Staff action was to meet with NEI.
15 The applicability of the backfit rule to decommissioning; 16
. meetings with NEI.
Request for additional information; 17 stakeholder meeting with NEI.
Application of backfit rule; 18 meeting with NEI.
And on the 2.206 petition, obtain i
19 stakeholder feedback, which was a telephone call.
20' If you look at how the Staff deals with these 21 other issues, it is to meet with the people, the 22 stakeholders who have the issues face to face to make sure 23 they understand what the issues are, and then discuss what 24 resolution might address those issues.
25 On the 2.206, the Staff basically feels that there ANN RILEY-& ASSOCIATES, LTD.
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is no concern in the public.
The~ Staff ---the public just t
2 doesn't understand the process.
If they understood it i
3 better,.they would be -- they.would love it, and there's-4, really no need to do much substantive action to address 5
their issues.
It's a -- you-know, the great unwashed again 6
still just' don't get the picture.
And I don't think that's i
7
'the case.
We submitted a number of petitions in the last
]
1 8
year.
We don't do them to address the Staff.
-We do them to 9
get media. attention because that's the only way we can 10 engage the Staff on technical issues, to get media 11 attention,-to focus on the issue, to get the Staff to 12 address the issue. -That's wrong.
We shouldn't be doing
'13 that.
But there's no other way, either through 2.206 or the j
14 allegation process, to bring a sincere technical issue to 15 the Staff and have it discussed and resolved.
Absent that I
16 process, we are forced to do something to get outside 17 pressure on this agency, and that something is media Lattention,.which is relatively easy to do on nuclear power
.18 -
19 issues.
20 So until either the' allegation.and/or the 2.206 21 process is fixed, that's going to continue to do it.
It's a 3
22-
' great media hook to say that some group is petitioning the 23 government on a safety issue.
It's an automatic media draw
'24 or media hook, and it's wrong for us to do it, and it's 25
. wrong that the fundamental root cause is that this agency
'i i
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doesn't have a valid 2.206 process.
2 CHAIRMAN JACKSON:
So what needs to change?
Can 3
you give us some specifics?
What needs to change?
4 MR. LOCHBAUM:
A few years ago, I don't know when 5
and who, but the Staff determined that the 2.206 process was 6
limited to suspension, revocation or termination, or j
7 suspension of a license.
The law, the statute says other 8
actions, which we interpreted to be force a regulation or 9
some other action that might be out there, but it's a strict i
j 10 one of those three things.
If you don't meet that, your 11 petition is automatically bounced back, and we feel that is 12 wrong, because most of the time we are not -- we are just 13 trying to get some safety issue fixed, not wanting to 14 suspend a license or revoke it.
15 A good example is D.C. Cook.
Everything we asked j
16 for in the petition was done by the Staff; more than we 17 asked for, yet the petition was formally denied because we 18 asked for suspension or revoking.
So it's a -- the way the 19 Staff has defined the regulation has led to some problems.
20 In addition, the Staff very seldom contacts the 21 petitioner like they do with licensees for license 22 amendments.
We maintain that if the Staff treated 23 petitioners -- or licensees the same way they treated 24 petitioners, there would be very few license amendments 25 granted because the Staff would not send out requests for ANN RILEY & ASSOCIATES, LTD.
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-1 additional information and other things that the Staff uses 2
when the licensee doesn't submit a full and complete
-3 application.
But when a petition comes through that might 4
.be missing something or the Staff may not misunderstand it, 5
they just deny it, it's a simple process and meets the 6
timeliness standard.
So that kind of equity, we feel, needs 7
to be' built into the process.
8 CHAIRMAN JACKSON:
Okay.
Thank you.
9 Mr. Gunter.
10 MR. GUNTER:
I would agree with Mr. Lochbaum's 11 remarks and only add that a couple of areas'that we would 12 suggest -- well, one particular area would be for there to 13 be some greater contact between the petitioner and the 14' petition review board.
That's basically a behind-the-15 closed-door process at this point.
We don't even really 16 know often who the review board is in terms of personality 17 and their particular expertise, but it would be helpful for 18 there to be a -- it would be a confidence move on the part
.19 of the agency's part to open this process up so there'd be 20.
more-face-to-face meeting between petitioner and petition 21-review board.
But ultimately I believe that the only 22 measure you have to restore public confidence is to provide 23 us with adjudicatory review of this whole procedure.
That 24 ultimately speaks to your willingness to air these issues 25:
out to the full extent, and to give the public a truly ANN RILEY & ASSOCIATES, LTD.
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independent review of the issues and an opportunity to 2
present their concerns, albeit that you will have, you know, 3
the technical expertise in it, but adjudicatory review does provide us to bring in independent expertise to really 4
5 counter Staff argument, or to, you know, bring out our 6
differences or where we are off base.
But this has come up time and time again in terms of the ability of adjudicatory 7
8 review and, frankly, the industry is absolutely opposed to 9
it, and we have gone through this before, I believe it was 10 back in '93 or
'94, where the whole 2.206 process was reviewed and the adjudicatory review issue was brought up, 11 12 and it's a stone wall in terms of both agency and industry's 13 willingness to open it up.
But I think that's ultimately 14 where we begin to move towards gaining -- regaining 15 confidence in the agency, by airing these issues fully in an 16 independent court of.1.aw.
17 CHAIRMAN JACKSON:
Do you feel that every issue 18 should be adjudicated and --
19 MR. GUNTER:
Certainly --
20 CHAIRMAN JACKSON:
You're saying that every issue 21 should be adjudicated and merits adjudication?
22 MR. GUNTER:
It should be open for adjudication.
23 I mean there are, you know, there -- you know, there may be 24 trivial petitions that you have to deal with, and certainly 25 we are not saying that every petition be adjudicated.
But ANN RILEY & ASSCCIATES, LTD.
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.certainly the more legitimate issues such as thermal lag, 1
2:
. fire barriers, which, you know, is an issue that persists in 3
this agency now seven years after the original 2.206 4
petition was presented, certainly something like this, you 5
know, would have merit in some court of law.,
And so I think 6'
there's got to be a filtering process, you know, by the 7
various issues themselves as to whether or not they are.
8 going to be adjudicated.
9 CHAIRMAN JACKSON:
Further comment?
10 Mr. Collins?
11 MR. COLLINS:
I don't disagree with the 12 characterization of the insights of the 2.206 process.
I do 13 disagree with~the characterization of Staff's view of 2.206 14 petitioners.
I don't think it's appropriate for other 15 individuals to speak about Staff's view of other 16 individuals.
What we do, and what I have done personally in 17 contrast to the great unwashed remark, is contact 18 Iindividuals personally that have submitted petitions.
Dr.
19 Shearon has'also done that, as have the Staff's -- for at 20
.least the-past four to six months, this has been in 21 progress, based partly on-the valid comments about the 22 performance.of 2.206-Plus we had a very extensive program 23 to upgrade to 2.206, but we.have limitations, and again w!e 24 have to look at the interpretations of 2.206.
We have been 25 working with OGC on that,-and OGC has helped us as far as ANN RILEY & ASSOCIATES, LTD.
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what room we have to operate in, within the bounds of past 2
precedent and how far past we can go just in language, but 3
ultimately maintain some of the points in 2.206 in the 4
statute itself.
The process, I believe, in the past six to eight months has varied significantly from past practice.
5 6
We have allowed hearings in instances when people take 7
advantage of those with regard to which they are intended, e
8 and in some cases are abused, but they are -- that opened up 9
and people have the ability to present views in hearing --
10 in one case we went to a very extensive effort to broadcast 11 the hearings to other parties involved at remote locations -
12
- based on power plant issues.
13 As far as the timeliness, our goals have improved 14 our timeliness as far as the goal 100 percent, but we are 15 still below the overall goal.
We have to address the 16 topics, some 120 days for some of the technical petitions 17 that we receive, or in fact we may have to reprogram our 18 resources.
f 19 Ultimately the Staff's tracking efforts here under 20 the petition item runs through both the long term and short 21 term efforts which get to some.of the areas, Paul, that you 22 and David indicated as far as participation at the front end 23 in front of the review board, or clarification of the 24 issues.
Do we need to have a process which mirrors license 25 amendments for request for additional information to clarify ANN RILEY & ASSOCIATES, LTD.
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and get the petition to a point where all the information is l'
L 2,
available.
But ultimately I think that 2.206 process may 3
not satisfy some of the intent of our stakeholders.
They L
.4 may-have to look-to other processes, whether they be the i
5.
. ability to request inspections in certain areas.
As Mr.
' Lochbaum indicated, if this vehicle is'the only one in town 7
.that's available1 to get to some areas where the Staff needs 8
'to.be responsive, that this vehicle will not satisfy all of 9
.the stakeholders in that area.
When it's appropriate, 10
. David,~I'll point those out.
11 CHAIRMAN JACKSON:
Well, thank you.
12 In closing, let me.thank all of the participants
-13 for.your comments and your insights, and this remains a time
- 14' of fundamental change for the NRC, and we believe the change 15 is a necessary and healthy organization.
If you are not 16 changing,_you are not. alive.
And to the" extent that our 17.
stakeholders have aided us in identifying areas for NRC
-18 improvement and focus, they have our gratitude, you have our 19
-gratitude.
2 0 -~
'The Commission will reflect upon the issues 21
discussed today and.will.takecthe actions we can to address 22
<stakeholders' concerns within the confines of our primary
~
mission as a regulator tasked with the ensuring public
- 23-24:
health and: safety in the environment.
14B will use your 25 input 7in improving our regulatory effectiveness, in ANN RILEY & ASSOCIATES, LTD.
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positioning the NRC for changes and in changing the NRC.
1 2
Now aspects of some topics we have discussed today have 3
particular interest to'me.
With respect to risk-informed 4
regulation, I agree that timeliness of all our actions needs 4
5
.to be a priority.
I believe NRC responsiveness, actually, 6
willfresult from risk prioritization of what ana do.
7 1-understand the concerns that have been raised 8
relative to PRA quality, the nature of voluntary process in 9
that regard, and that flexibility can be perceived as 10 elasticity, and so we have to be clear on how we posit what 11 we do.
12 Much discussion was spent on the use of rules as 13 guiding principles, and the
,ortance of guidance, not only 14 in providing necessary defit. tion, but in accurately 15 following the intent of any rule.
16 With respect to reactor oversight, there seemed to be much= unanimity that this revision is a step in the right 17 18 direction, but that open dialogue must be maintained between 19 plants and the regions and other stakeholders.
Our metric 20' will be whether we have the degree of consistency region to 21 region that we hope to have.
22 Changed management principles must be applied, and f
23 the NRC ability to respond must be preserved.
The NRC must 24
' implement the process with an open mind and accept that it 25 may need to further change the process.
This is what I ANN RILEY & ASSOCIATES, LTD.
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think we heard.
I am aware.that this change can be 2'
perceived as a further move to self-regulation of the 3
industry.
We have to guard against that, but we have to 4-explain what we are trying to do so that that perception 5
does not either become reality or persist in the minds of 6
the public.
7 I reiterate that the, you know, essential.
8 question, an essential question is what will the NRC and the
'9 industry and the public do with what the process reveals; 10-that one has to close the loop; it's not just gathering 11 information, but what is done with the information.
12 With respect to license renewal, the Commission is 13 very aware that the process may give the appearance of 114 further. acquiescence to the industry, and that contentious 15 issues seem removed from public intervention.
Yet as 16-Commissioner McGaffigan previously summarized, there have 17.
been extensive efforts at in fact facilitating public 18 comment; 19 The NRC will review the standard review plan, 20 using lessons learned from the first two applications.
21 On license transfer, as an outcrop of electric 22 futilityz deregulation, the NRC does expect and is planning 23 for an increased number of transfers, each with its own 24 unique' facets, and perhaps we need to revisit our planning 25' assumptdons in that regard, in light of some of the comments
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we heard.
2 The Commission understands the concerns relative 3
to tax issues and foreign ownership and control issues, but I will reiterate that the NRC must assess inimicality to the 4
S
.U.S. interests, to common defense and security, and that 6
-this is a broad net that allows us to capture what we need 7
to capture.
But what the Commission has focused on is the 8
'NRC not being an impediment procedurally.
That does not 9
mean that technically where the concerns are identified that 10 we will not put appropriate license conditions in place.
11 With respect to 2.206, I noted the improvements we 12 have been making and that we plan to make during my 13 introduction on this topic, and that the Commission is 14 committed to ensuring and improving upon the public's 15 ability to effectively participate.
16 We heard you relative to the equity concerns, and 17
-the greater contact, that perhaps we need to review further 18 the interpretation of the 2.206 rule itself, but as Mr.
19 Collins said, we may need to look to other processes as 20 paths for providing public input.
We will implement the 21; changes that I have outlined, but we.will continually 22
. reassess and structure this process as necessary.
23 Now with respect to PBPM, this is an important 24 shift for the NRC, to become more outcomes-oriented.
We do 25 plan on including self and third-party assessments as part ANN RILEY & ASSOCIATES, LTD Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D. C.. 20036 (202) 842-0034
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of-that process, and we welcome your input, but -- and I 2-remind all of you that whatever we do, we always have to 3
start at the right end of the paragraph.
4.
Since this will be my last stakeholders meeting, A
5 unless you all are planning to come back within the next six 6
cn: seven weeks, I won't be here, let me close by saying that t
- 7 I have enjoyed these meetings.
We have come a long way down i
e 8
the pike.
I have appreciated our stakeholders' criticisms l
9 and suggestions and, in fact, this was-perhaps too much of a 10 love fest for me.
I can't get used to it.
But I sincerely will miss interacting with the nuclear community on a daily 11 12 basis, and.while all of us may not have always seen eye to 13-eye on the issues before us, I do admire all of you, NRC 14 Staff, public interest groups, state government officials, 15 industry groups and regulated entities.
But I am confident 16 that the changes that the NRC has initiated will be 17-
' sustained following my departure, and that we will remain 118 committed to the path we are on.
I believe that I am
'l'eaving an agency with a renewed ability to take on and to 19 20 make difficult decisions and to act when appropriate, but 21 also one with an improved desire to bring coherency and 1
22 scrutability to the actions it takes, while seeking to 23 impose only the necessary burden on licensees.
24 I thank you again for your participation, and if 25.
there are no further comments --
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COMMISSIONER.MERRIFIELD:
Chairman --
{
2 CHAIRMAN JACKSON:
-- we are adjourned.
3' COMMISSIONER MERRIFIELD:
Chairman, I'd like to i
1 4
make a comment.
5 CHAIRMAN JACKSON:
Please.
6 COMMISSIONER MERRIFIELD:
I want to join my 7
appreciation that you expressed to all the members that came 8
today and spending even a few hours today, we have had some 9
folks that have had to travel a long way, and we really do 10 appreciate it.
I appreciate the fact that you have done 11 that.
12 I would agree with the Chairman, I think these are 13 very useful.
As a Commissioner who will be here till the 14 year 2002, I certainly look forward to a repeat of these l
15 stakeholder meetings.
I have found them-very useful.
The 16 first one I had was a few mere days after I became a 17 Commissioner, and I think I have enjoyed them even more, and 18 I enjoyed it even more today.
19 The one comment I would like to make, all too 20 frequently we as an agency focus only on issues associated
-21 with reactors.
I look forward and will encourage my fellow 22 Commissioners who will' remain that we ought to be having a 23 stakeholder meeting on some of the other issues our agency 24 deals with, some of the materials issues, because I think 25 those are some areas which could also use some appropriate ANN RILEY & ASSOCIATES, LTD.
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stakeholder input.
Thank you, Chairman.
2 CHAIRMAN' JACKSON:
Thank you.
3 As I say,-you have always heard me say, we are not 4
.the Nuclear Reactor Regulatory Commission.
5' Adjourned.
.6
[Whereupon,'at 12:46 p.m.,
the briefing was l
7 adjourned.].
l
.9 10-4
.11-12 13 14 l
15 j
16
.17-18 19 20 21 22 23' 24~
25 ANN RILEY & ASSOCIATES, LTD.
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CERTIFICATE This is to certify that the attached description of a meeting
-of the U.S. Nuclear Regulatory Commission entitled:
TITLE'OF MEETING:
MEETING ON NRC RESPONSE TO e
STAKEHOLDERS' CONCERNS PLACE OF MEETING:
Rockville, Maryland DATE.OF MEETING:
Tuesday, May 4, 1999
.was held.as herein appears, is a true and accurate record of the meeting, and that this is the original transcript thereof taken stenographically by me,- thereafter reduced to typewriting by me or under the direction of the court reporting company Transcriber:Natalie Renner
+
Reporter:
Mike Paulus
E Opening Comments by James P. O'Hanlon, President, COO and CNO Dominion Generation NRC Stakeholders Meeting Rockville, MD May 4,1999 Good Morning.
Madam Chairman, Commissioners, I appreciate the opportunity to participate in this stakeholders meeting.
As the operators and regulators of the nuclear power industry in this country we share the mutual responsibility of operating our nuclear power plants safely and reliably. This means operating the plants under regulatory standards that will assure the public of their safety but without imposing unwarranted operating or economic burdens.
An open and frank exchange ofinformation among the industry, the regulator, and the public is imperative if we are to maintain a proper balance of our mutual responsibilities. I see these stakeholders meetings as one more way for us to improve our communications and I'm pleased to be here.
Overall, Virginia Power's relationship with the NRC has been open, professional, and cordial. We may not always agree with NRC fmdings or conclusions but we've felt free to discuss the issues in a frank manner. This does not mean, however, that there aren't areas that could be improved.
We have shown that safe performance can not only be maintained, but also improved with more wisely utilized resources. For this reason we support the use of risk information as pan of the regulatory process-Risk information has already allowed us to focus our resources and attention in some areas where safety and efficiency have been improved.
. For example, we've implemented risk based ISI for one of our Surry units.
As a result, some systems have increased inspections, some decreased, and core damage frequency has improved.
However, for risk information to be effective it must be applied in a consistent and disciplined manner across the stafI We often fmd ourselves living in two different regulatory worlds at the same time depending on what section of the staff we interact with.
Virginia Power has been actively involved with NEl and the NRC in various activities updating the regulatory process and allowing for the use of risk information We do e
endorse the use of risk information, but let us not forget that the existing body of regulations has produced an enviable safety record. As we consider producing an entire new body ofregulations, we must ensure that the safety and economic benefits are commensurate with the resources required to develop and implement the new processes.
I suggest that we keep some perspective with the issues that we tackle.
I'm particularly interested in seeing that the necessary resources are given to all forthcoming license renewal applications.. We give nothing but kudos to the Commission for its attention to the first two license renewal applications and its commitment to meeting the schedules.
As a utility expecting to submit our license renewal applications in the not too distant future, I urge the Commission to maintain the same level of resources and management controls for those plants that follow.
Timeliness is also a factor that we should keep in mind.
I'll mention a recent example.
The NRC issued on March 29 a final rule providing some flexibility in the frequency of independent audits for the emergency preparedness, safeguards, and security plans.
That's great until you remember that we submitted the original petition for rulemaking in December 1993. And this was a rulemaking that received fewer than a dozen public comrnents - all but one in support - and raised no significant safety issues.
It's in the spirit of timeliness that I recommend that we now move expeditiously to risk-inform the scope of the maintenance rule and to resolve the questions remaining -
regarding the implementation of 10 CFR 50.59 In conclusion, we recognize the changes and improvements accomplished by the,
Commission and the staffin the last year.
I hope that we continue to move in the direction of these changes, making sure that we correct errors as we go along, and taking care of not changing some things just for the sake of changing.
As Chairman Jackson often says, it's the results that count.
Thank you.
A e
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COMMISSIOL---
May 4,1999 Meeting Comments by Director Thomas W Ortciger Illinois Department of Nuclear Safety k
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n (a) Risk-informed initiatives for NRC's regulatory framework, including the maintenance rule (10CFR50.65), and Changes, Tests, and Experiments (10CFR50.59).
The Illinois Department of Nuclear Safety favors using risk information in plant operational and regulatory matters. Over the years, we have consistently encouraged the Nuclear Regulatory Commission (NRC) to incorporate probabilistic risk assessment (PRA) information where it is practicable. Both the regulated community and the regulator are responsible for protecting the health and safety of the public and should make use of the best source of risk information available to carry out that responsibility.
We think the best available source of risk information is a plant-specific, up-to-date PRA, supported by plant-specific data where available.
The industry seems to have embraced the risk-informed concept in its proposals for reducing regulatory burden, including:
the proposed reforms to the plant assessment and regulatory inspection processes; industry guidance for maintaining Updated Final Safety Analysis Reports; e
- 4e maintenance rule guidance for selecting systems, structures, and components; and recommendations o,n graded quality assurance and inservice inspection.
e Therefore, our conclusion is that at least part of the industry wants to use risk information as a focus of activities.
NRC's intent seems to be clearly stated in the PRA policy statement. This same philosophy is echoed in other "use of PRA" guidance documents. In addition, the Safety Goal Policy was an articulation of acceptable risk to the public. Other initiatives to risk-inform 10 CFR Part 50 are underway.
Currently, use of risk information by licensees is strictly voluntary, and there is no requirement for a quality PRA. We at IDNS think it is time for the industry and NRC to demonstrate to the public their seriousness about risk-informing these processes by requiring licensees to have plant-specific, current PRAs supported by plant-specific data where possible. If the industry is serious about a risk-management focus, and the NRC is serious about modifying their regulations and inspection activities accordingly, it cannot be done on a voluntary basis. We believe NRC should require PRAs of at least Regulatory Guide 1.174 quality. The quality can be upgraded as PRA standards are developed and mature, similar to the way revised ASME codes are adopted.
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r In summary, we fully support the efforts to risk-inform the regulatory process, and the Department will support all the workshops, training sessions, and other activities surrounding these efforts. We also support developing the best analytical tools available for that purpose, and endorse the American Society of Mechanical Engineers effort to develop an overall quality standard for PRAs for the industry and the NRC. Therefore, we recommend that current and rigorous PRAs be required by regulation.
(b) License Renewal.
Plant Life Extension issues address age-related degradation of plant components and the risks associated with their failure. We think that age-related degradation should be managed on an on-going basis, and that crossing from year 40 of operation to year 41 should not matter greatly as far as licensed activities are concerned. We agree that age-related degradation can be managed under the maintenance rule, but are not confident that it is. This is an area where NRC and IDNS resident inspectors can better focus inspection activities. Plant life extension is another area where rigorous PRAs are valuable in identifying risk-important systems, structures and components for consideration in renewal applications.
(f) Revision of reactor oversight programs While rigorous PRAs can provide valuable information about the probability of occurrences of certain events, they cannot provide direct information in such areas as declining management programs or human attitudes and performance, which are also imponant to plant safety. IDNS is concerned that these cross-cutting issues may not be detected early enough withot.t their own cornerstone and performance indicators. This concern prompted IDNS to recommend in our comments to SECY 99-007 that another cornerstone be added to measure programmatic and human interfaces.
IDNS is pleased that an Illinois plant was selected as a pilot plant as part of the new program. We look forward to participating with the NRC at Quad Cities as this new program evolves.
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Additional Possible Discussion Topics t
May 4,1999 Meeting FEMA Strategic Review We are concerned that the NRC participated in a Strategic Review process that minimized and trivialized the role and input of State and local response agencies,
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and resulted in guidance that bears resemblance neither to what the "stakeholders"
~ recommended, nor to anything technically sound or practically workable.
i In conducting the Strategic Review (in which NRC participated as members of the Steering Committee), FEMA has once again made a mockery of participatory -
decisionmaking, in direct conflict with the directions for the National Performance Review. In soliciting input for the review, FEMA originally proposed to reduce the States, locals, and utilities in the REP community to the level ofintervenor groups, recognizing neither any value in the experience gained by offsite response organizations (OROs) over the years nor their dedication to protect their citizens.
After intense pressure, FEMA conducted " stakeholder" meetings (an insulting appellation for those who are in fact partners in REP), and even classed the utilities that fund the entire REP program along with the intervenors and the public. After getting considerable input from all parts of the REP community, l
FEMA recently came out with a "strawman" document that in no way reflected the input it received. "Stakeholders" were not given the opportunity to review comments provided by others (or internal FEMA comments), a courtesy that is almost universally extended by other federal agencies as a matter of compliance with the federal administrative procedures statutes. Since the Strategic Review Steering Committee, composed exclusively of federal employees, worked for the most part behind closed doors, outside of public view or even the view ofinvolved "stakeholders", it is crucial that we all (a) know who commented on the various concept papers, the draft final recommendations of the SRSC and the Implementation "strawman"; (b) have access to the detailed comments; and (c) have some indication from FEMA as to how each of the comments received was dealt with.
- Why did NRC abandon its normal method of operations, that includes openness, trust, and reliance on those with most experience, in favor of FEMA's paternalistic, condescending, secretive process, which yielded such a universally unacceptable document?
This document contained, among other objectionable portions, guidance that was technically indefensible and practically unworkable.
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Did the NRC contribute to this strawman document? If not, why not, since they had representatives on the Strategic Review Steering Committee? If so, why did l
NRC not insist that the document be made at the very least technically correct?
l This has been an issue with REP guidance from the beginning: it is rarely clear,
. when a document appears, whether the NRC (or any other Federal agency) has endorsed or even reviewed it. It is surprising that the NRC should be willing to stand by and let another agency promulgate faulty guidance in a program where NRC has the final authority over an operating license.
BOTTOM LINE: NRC's hands-off approach to offsite planning, leaving FEMA and its contractors to develop and promulgate guidance, has been detrimental to the REP program. Federal agencies that have technical expertise should not decline to ensure technical accuracy in REP guidance.
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May 4,1999 Meeting Potassium Iodide (KI)
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IDNS Policy and Rationale IDNS believes that general distribution of KIis inconsistent with the statutory responsibilities to protect the health and safety of the public following a nuclear power plant accident.
Because it protects only one organ against one of the numerous radioisotopes that can be released during a nuclear plant accident, KI cannot be regarded as a panacea for all radiation exposure. The State ofIllinois (and most other states)
. prefers a more effective approach to potential radiation exposure, which is to maintain adequate information and notification networks and emergency response capability such that evacuation of an endangered population, when necessary, can be decided upon early and conducted in an orderly fashion. This concept, as embodied in the Illinois Plan for Radiological Accidents (IPRA), can afford total protection from needless radiation exposure. Thus, the use of KI is best viewed as one aspect of a total personnel protection agenda, and is most appropriate for specific situations where exposure can be estimated and controlled, or where evacuation may be impractical, e.g., emergency workers and immobile, institutionalized populations. The risk of side effects for these individuals remains, but can be recognized and treated promptly.
It has been federal policy for years that the decision to supply potassium iodide belongs to the states. Re-examinations of the issues surrounding KI have all concluded that there is no reason to change this policy. Nothing in current federal guidance prevents any state from providing KI to the general public if it so chooses. Each state with nuclear power plants has already considered this issue, and has adopted in its plans the approach that provides the greatest protection for its populations at risk. Only three states have elected to provide KI for the public.
This fact alone should alert the federal government that the reasons not to do so are both numerous and compelling.
The proposed establishment of a federal stockpile of KI destined for public distribution implies that the states and local governments would have to shoulder the burden of creating a mechanism for distributing the drug under emergency
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conditions, as well as the necessity of maintaining such a distribution system.
Given the acute time dependence of KI's effectiveness, a delay of even a few l
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houu resulting from the inability to obtain and distribute the drug to the public in j
a timely manner would result in ineffective administration of the drug. Such a situation could easily create a false sense of security for individuals, making them less likely to heed official evacuation recommendations and thus putting them at i
greater risk.
Proposed Revision ^o 10CFR50.47
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The phrase "as appropriate" in the proposed language is unclear. Who would make the determination, and based on what criteria, on what was appropriate? It has been the responsibility of offsite response organizations (OROs) to determine how best to protect the population at risk; is this proposed revision once again going to empower FEMA (through either inflexible guidance or rule) to determine
. what each ORO should do? Who would determine, and on what criteria, what j
documentation would be needed to prove that an ORO had " considered" providmg i
KI to the public? Would every ORO be required to write a document about why they do or don't evacuate, why they do or don't shelter, or why they do or don't administer KI? What reasons would be acceptable?
j The decision to administer KI has to be part of a total picture where each ORO j
looks at reactor types, accident scenarios and timing, source terms, existing notification systems and protocols, organization of government, who is in power to make what decisions, what information they get and how timely, the availability of cars or mass transit, weather and road conditions, the psychological condition of the population (willingness to obey government officials, need for personal control 4
of own destiny, etc.). This is one of the points Illinois has been trying to make all along: that this may be useful in certain situations, but not all, and each State should retain the authority to protect its people in the most effective way.
Role of the NRC At the most recent KI Core Group meeting, discu:.sion with representatives from the Hanford Thyroid Disease Study and from the FDA emphasized how many unanswered questions there still are regarding the safety and effectiveness of KI (e.g., the appropriate doses for thyroid blocking). We do not understan, how and why the Commission went ahead originally and agreed to fund stockpiles of KI for the states with all these unanswered questions. In so doing, the NRC skewed the whole process irreversibly and made it almost impossible for the states to re-evaluate their own KI policies in any kind ofimpartial manner. Furthermore, with its most recent decision not to fund the purchase, NRC has sent mixed messages to both the States and the public, creating confusion and consternation.
' In fact, the requirement to consider K; for the public constitutes an unfunded mandate upon offsite response organizations (OROs). Consider the expense involved in re-reviewing plans ' hat have already been approved (and repeatedly recertified as approved); in searching file archives for documentation of decisions made 15 or 20 years ago, or generating new documentation; in conducting public meetings; in developing and conducting the public information campaigns that will be necessary no matter what a State decides regarding KI; in attempting to coordinate these efforts with neighboring States (and to reconcile potentially conflictino policies);in procuring and maintaicing the stockpiles;in training 3
either the public or those responsible for dispensing the medication, and so on.
BOTTOM LINE: NRC has put the Statesin an untenable position on KI. By 4
adding an explicit requirement about considering KI, NRC has in effect announced that it does not trust the States to have made complete and informed decisions, when in fact no information has come forward in the last few years that would dictate reversal of decisions and policies already in place. The whole issue will result in enormous expenditures of resources no matter what decision has been made, and result in no additional public protection. No existing technical information justifies this change in NRC's position. NRC has also sent the public
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- mixed messages about whether K1 is necessary for protection of public health and safety-mixed messages that the States will have to sort out and deal with.
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UNION OF CONCERNED Stakeholder Meeting ill SCIENTISTS Opening Statement As suggested by the breadth and depth of the NRC staff's response to the tas%.; memo and stakeholder concerns, including a large number of completed items and a majority uf remaining a
items on schedule, there has been considerable change by this agency within the past year.
This change was not spontaneous, but was achieved by a lot of work by a lot of people. The Commission and staff clearly deserve much credit for these accomplishments.
While this agency may be headed in the right direction down the right road, it is still too early to declare victory and relax. Sustained effort will be needed to reach the stated objectives of all these change efforts. Without questioning the agency's intentions or desires about reuching the finish line, let me point out why some level of skepticism is warranted. Here are quotes from an NRC document:
a "A major Commission objective. was careful examination of NRC, programs, procedures and requirements to determine the extent of their contributions to effective and efficient regulation."
" Stable and understandable requirements are essential to conduct of the NRC regulatory o
process in an orderly and responsible manner."
' Tome in the regulated industry have contended that uncertainty about regulatory a
requirements and practices is a major concern that can hamper sound management planning."
o "To be fully effective and efficient, regulation must be timely."
i o " Substantial effort has been directed to the resolution of nuclear fuel cycle issues which -
due in large part to insufficient attention paid to this area in the past by both government and industry - have become pacing items for the continued development of nuclear power."
o "The Commission is confident of NRC's ability to face up to and deal with tomorrow's regulatory demands with effective, independent decisions, efficiently and openly."
These quotes are from the NRC's 1975 Annual Report. My purpose in dredging up this information from a quarter century ago is not to criticize the current Commission and staff or past Commissions aPJ staff members. Instead, my purpose is to illustrate that the NRC's objectives are very elusive. Tenacity will be as crucial to success in reaching these objectives as
- the sincere, dedicated efforts which have been, and wNinue to be, demonstrated by the Commission and staff.
Whatever level of skepticism is warranted, that level must be tempered by actions the NRC has taken and will be taking. Features such as these periodic stakeholder meetings and the feedback loops which the staff has built into virtually every item in the tasking memorandum May 4,1999 -
Pagei L.
CcmmCnta on tha NRC Staff'c 04/12/99 Response to the Tasking Memorandum provide opportunities to measure progress against the objectives. Resources can be reallocated cnd mid-course corrections made where appropriate.
Agenda items (c)
Risk-informed initiatives for NRC's regulatory framework including the maintenance rule (10 CFR 50.65) and Changes, tests and experiments (10 CFR 50.59)'
No comment.
(b)
License renewal The following position is taken verbatim from UCS's submittal for the November 13, t
1998, stakeholders meeting. UCS's position is unchanged because NRC's course of action has not changed:
Prior changes to the NRC's license renewal rule and regulatory policies have virtually a
guaranteed that g applications will be approved. These changes totally eliminated meaningful public involvement in the process and have narrowed the scope of the staff's review to render it useless.
The NRC should do the following for all license renewal applications:
- 1. Compare the plant's licensing bases to current safety regulations and justif _aji 1
shortfalls.
- 2. Permit the public to have meaningful - not token - involvement in the process.
(c)
License transfer No comment.
(d)
NRC Strategic Planning, Budgeting, and Performance Management Process No comment.
(s) 2.206 Petition process The staffs actions listed in the tasking memorandum (pages 43 and 44) seem to indicate that the problems with the 2.206 process are limited to time,iness issues. While timeliness has been a problem and improvements in this area will be welcome, it is only a partial resolution of the problems, Compare how the NRC staff is undertaking to " resolve" this problem compared to how the staff is handling problems affecting the industry:
o IV.D Define Design Basis: " Meet with NEl" by 4,1999 Page 2
Comm:nts on tha NRC Staff'o 04/12/99 Response to the Tasking Memorandum IV.H, Applicability of Backfit Rule to Decommissioning Activities: " Meetings o
with NEl on decommissioning rulemaking are planned" IV.1, Requests for Additional Information: " Stakeholder meeting with NEl" o
IV.J: 2.206 Petitions: "Obtain stakeholder feedback on 2.206 process" o
IV.K, Application of the Backfit Rule:" Meeting with NEl on backfit concerns" o
The NRC staff conducts face-to-face meetings with industry to gain a full understanding of the industry's concerns and to float possible remedies.
The NRC called many of the 2.206 petitioners to solicit feedback. During the phone call with Lochbaum (UCS), Gunter (NIRS), and Riccio (Public Citizen), the NRC staffer (H.
Berkow) repeatedly claimed no knowledge about the numerous examples of problems provided. This tactic served as a communication barrier to a dialogue on the issue. It seemed that the t,taffs intent was to fulfill the letter of the tasking memorandum item (i.e.,
"obtain stakeholder feedback") rather than to gain a full and complete understanding of the stakeholder concerns and resolve them.
(f)
Revision of reactor oversight programs No comment.
Non-Agenda items (a)
Public Confidence From recent public meetings, it appears that "Public Confidence" is currently an explicit factor in the NRC staffs decision-making process. It is strongly recommended that this practice be immediately curtailed. As Commissioner Diaz stated during the March 26, 1999, Commission briefing, "public confidence"is not a process, but rather an outcome.
If the NRC staff is successful in its reactor oversight and other regulatory missions, public confidence will follow. If the NRC staff is not successful in its missions, all the PR in the world will fail to restore public confidence. So, the NRC staff should focus its efforts on ensuring success in its missions and let public confidence track that effort.
(b) 01 still needs to be eliminated and its resources relocated to OlG During the last stakeholder meeting, the Public Citizen (Riccio) and UCS (Lochbaum) representatives each called for the NRC Office of Investigations ;o be eliminated and its resources relocated to the NRC Office of the inspector General. Riccio and Lochbaum subsequently met with a Deputy EDO, the Director of O1, and the Director of OE to expiam why this relocation is needed: (1) Ol's past performance investigating allegations is poor and has resulted in harm to some people who submitted the allegations, and (2) 01 has an inher +. irresolvable conflict-of-interest when it investigates allegations that may involve potential errors of omission or commission on the part of the staff.
May 4,1999 Page 3
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$ tate of Ncht.ljersetj l
Christine Todd Whitman Department of Environmental Protection Mert C. mnn.
Governor Com m r ~ ~ row I
United States Nuclear Regulatory Commission Office of the Secretary 4
Attention: Bill Hill l
Washington, D.C. 20555-0001
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Honorable Commissioners:
Thank you for the opportunity to provide comments to the May 4,1999 NRC Stakeholders meeting. As you know, I was present at the November 13,1998 i
Stakeholders meeting and appreciated the opportunity to study the issues and participate in the discussion. I know you will enjoy interacting with other state representatives because our perspectives can vary. I continue to think about how we can improve our regulatory strategies to reduce regulatory costs, but maintain adequate protection. I will i
provide comments on two of the six topics under discussion.
Risk-Informed and Performance Based Regulation t
i The NRC staff has identified three options for risk-informed modification of 10 CFR Part 50. The NRC options are 1) make no changes to the current Part 50, 2) make changes to the overall scope of systems, structures and components (SSCs) covered by those sections of Part 50 requiring special treatment (such as quality assurance, technical specifications, environmental goalification, and 50.59, by formulating new definitions of safety-related and important to safety SSCs), and 3) make char.ges to specific requirements in 6e body of the regulations, including general design criteria (GDC).
1 NRC staffrecommends option 2.
This may not be the correct course. For significant revisions of the regulations, the NRC must show that the existing regulatory approach needs improvement and that a risk-informed approach is in the public's interest, both with a reasonable assurance of 4
adequate protection and with a reduction in regulatory burden or costs.
Admittedly, it is very difficult to show that risk-informed changes result in i
substantial increases to the overall protection of the public health and safety, common defense, and security. Yet the NRC must demonstrate, through effective public communications, that there will be no reduction in public protection and that the risk-informed approach enhances safety decisions, is efficient, is cost effective and reduces regulatory burden.
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The NRC's operating budgets for FY-1999 and FY-2000 do not include the resources in dollars or FTE for either op: ion 2 o option 3. The current thinking is that 1
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' implementing these options would necessitate reallocating resources from other activities within the NRR and RES budgets.
The preliminary cost projections for option's 2 and 3' are substantial and the
, resource allocation ~is long term. NRC staff has recommended option 2 as the most prudent course.'. If the NRC is truly committed to a risk-informed and performance-based regulation, then it should'do'so fully and with significant public participation, even ifit means the additional costs described in option 3. The NRC needs to demonstrate enhanced safety decisions 'as well as eliminate unnecessary regulatory burden. It is
- important tofrecognize that a clear, unambiguous plan should be publicly communicated.
to all stakeholders.
t NRC Preliminary Cost Projectio'ns:
I Option 2: -
.25 -50 (NRR FTE) over 4 to 8 years:-
JNRR technical assistance 250K/yr and j
2 - 3 '(Research FTE) over 2 to 3 years and 500K/yr j
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. Option 3:
100'RES/NRR FTE over not less than 5 years;.
. RES technical assistance of $1 million/yr, J
- If the Commission selects option 2, then some significant policy issues must be addressed. Specifically, they are (1) mandatory versus voluntary compliance with Part
- 50,-(2) industry pilot studies with selected exemptions for Part 50 in advance of rulemaking,!(3) modification of the scope of the Maintenance Rule, and authority for.
applying risk-informed decision making, and (4) authority for applying risk-informed -
decision making. Each of these may complicate the risk-informed regulatory process in unexpected ways.
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- 1) -
Ma' datory versus Voluntary Compliance with Part 50 I
n Mandatory application of sweeping changes to Part 50 could send a signal that i
current plants are less safe than' desired. Mandatory application ofrisk informed changes to Part 50 could have a detrimental effect on the schedule, resources, and extent to which Part 50 could be risk-informed because ofindustry opposition. In both ca' es, the concem '
s could be r' educed by effective communication.' Outreach efforts directed towards both
~ the industry and the public would decrease any negative public perceptions and industry 4
. opposition.
. Voluntary application should allow selection of sub-elements elements of the regulation. The intent of adopting a risk-informed regulation is to be holistic through the appropriate use of probabilistic risk assessments (PRA) and reduce the deterministic
- component employed in Part 50. Selecting, or " cherry picking", would further dilute the intent of risk-based regulation. Therefore, if voluntary compliance is chosen under option 2, selective implementation cannot be permitted.
2)
Industry Pilot Studies With Selected Exemptions to Part 50 in Advance of Rulemaking The rulemaking process associated with a structured phased approach to a risk-informed Part 50 would likely require several years before significant changes are issued.
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4 Pilot studies with selected exemptions may be appropriate. but a mechanism needs to be established to allow timely implementation of changes from " lessons-learned", even if this means changing the course of the initial pact study.
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3)
Modification of Scope of the Maintenance Rule The NRC staff recommends continuing the present rulemaking on 10 CFR 50.65,
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and revising the scope of the Maintenance Rule to be risk-informed.
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If the scope of the Maintenance Rule were to be modified in a risk-informed i
manner, much ofit would be eliminated since many of the SSCs currently monitored have minor impacts on core damage frequency or large scale release frequency. The intent of the Maintenance Rule is to assure the functional capability of a broad range of l
plant SSCs and to reduce safety challenges such as reactor scrams. Modifying the scope of the Maintenance Rule would eliminate a mechanism for obtaining early predictive j
information on the licensee's performance and on equipment reliability and availability.
A scope change that eliminates this mechanism must include an assessment of the impact on safety challenges and the reactor system performance.
i The Maintenance Rule issued by the Commission in 1991 has resulted in many positive outcomes. It must be shown that the existing Maintenance Rule no longer provides reasonable assurance of adequate protection. Adoption of a modified, reduced, risk-informed Maintenance Rule must not merely reduce regulatory burden. It must also assure that safety challenges are not increased.
4)
Authority for Applying Risk-Informed Decision Making Commission guidance presented in the final risk-informed regulatory guidance (RG 1.174) and standard review plans, documents the process and criteria for licensees to use injustifying voluntary risk-informed licensing actions. Although the Commission in its 1995 PRA Policy Statement indicated that the NRC staff should increase the use of PRA in its regulatory activities, no specific requirement exists for licensees to perform risk analyses in support oflicensing actions.
Without rulemaking, severe accident risk will be considered only in those instances where the NRC staff believes adequate protection may be in question, or where the backfit provisions of 50.109 can be satisfied. These conditions establish a high threshold that the NRC staff must achieve in pursuing severe-accidmt issues with licensees, who do not currently support risk-informed licensing actions.
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g If risk-informed regulatory schemes are pursued, then the Cnmmission should require licensees to consider severe accident risk in all licensing activities through option p
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L Other Agency Programs and Areas of Focus -
'I The second topic of"Other Agency Programs and Areas of Focus" for specific
- issues regarding license transfer is another significant challenge for the NRC.
l Effective a' nd efficient review and determination of whether to approve license transfers are important to the public and the parties involved, since the proposed transfers are alleged to benefit ratepayers, customers, utilities and stockholders. Time is essential i
for mergers and acquisitions, which must comply with requirements for approvals by other state and federal agencies, as well as by the NRC. The move towards deregulation and restructuring in the electric utility industry is likely to continue the trend of significant reactor ownership changes and license transfers requiring NRC reviews and appro' al.
v The new Subpart M of 10 CFR Part 2 provides for public participation and
- opportunity for an informal hearing on matters relating to license transfer, specific j
procedures for filing and docketing applications for license transfers, and assigns i
appropriate authorities for issuance of administrative amendments to reflect approved license transfers. This rulemaking will permit processing of transfer applications without
. preparation of environmental assessments.
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j The NRC staff believes there are no significant environmental effects from license transfers. They also believe that license transfers present no safety questions and involve no signilcant hazard considerations. These areas are challenges for state programs since the ultimate responsible party to public health resides locally. ' An environmental assessment as part of the license transfer process helps the state programs i
in their assurance to the public that the license transfers present no significant hazard. If the NRC has data which demonstrates that no environmental effects result from license transfers, then it is essential that they provide it to the states and the public.
More notable, is the need for a standard review plan (SRP) for foreign ownership, control, or domination of applicants for reactor licenses. Sections 103 and 104 of the 2
Atomic Energy Act of 1954 preclude the issuance of a reactor license to an entity that the Commission knows, or has reason to believe, is owned, controlled or dominated by an alien, a foreign corporation, or foreign government. There is limited Commission precedent that serves as guidance in this area, and no standard review plan presently Lexists to ensure uniform application of this guidance. The Department agrees that the SRP needs to integrate all license transfer review criteria including decommissioning funding assurance, technical qualifications, foreign ownership, and antitrust.
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- The approach for including Subpart M " Informal Hearings" of Part 2 with a schedule is a good step in moving the process forward. Areas that have notable public concern, such as transfer applications without an environmental assessment and foreign ownership should be addressed through other processes. Requests for license
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amendments; which involve changes in actual operations or requirements directly involving health ' nd safety-related activities, will continue to be subject to the a
amendment processes currently in use. The new SRP is a good first step in acknowledging the current state of deregulation. However, it does not address other
- common defense and security matters, such as physical security and safeguards. Which process will address these areas ofconcern?
4 Future Stakeholder Topic Finally. I believe that the topic area " Reactor Licensee Performance Assessment"
- for specific issues regarding Performance Assessment Process Improvements, Industry's
- Proposal, and Performance Indicators should be an on-going discussion that brings clar to a significant number of other topical issues that the Commission is discussing.
Stakeholder discussions on the industry's proposed indicators for monitoring plant
. performance would be. helpful in understanding how risk-based performance indicators actually. improve power plant safety decisions.
Thank you for the opportunity to provide comments. Many of these issues would be excellent topics for the " State Liaison Officers" meeting planned for fall 1999. States will have different viewpoints, Many of these decisions are being made'quickly, before we can even comprehend all of the implications. I think about changes to the regulatory structure daily, and I can not keep up with the pace of changes from within your agency.
There are at least 6 other federal agencies involved in radiation protection that are also
- changing rapidly, States are also trying to change the way that they do~ business with the regulated community and the public. It.is overwhelming. Pilot programs and lessons learned are overlapping among different groups, We don't have time to implement lessons learned from one area before another is changing. The sand is shifting beneath our feet.
L' Sincerely, t
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jill Lipoti, Ph.D.
Assistant Director Radiation Protection Programs State of New Jersey
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