ML20210Q746
| ML20210Q746 | |
| Person / Time | |
|---|---|
| Site: | Millstone  |
| Issue date: | 08/21/1997 |
| From: | NRC OFFICE OF THE INSPECTOR GENERAL (OIG) |
| To: | |
| Shared Package | |
| ML20210Q736 | List: |
| References | |
| OIG-97A-01, OIG-97A-1, NUDOCS 9709020126 | |
| Download: ML20210Q746 (25) | |
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TO RESOLVE TOR ISSU OlG/97A-01 August 21,1997
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NRC Needs Comprehensive Plan to Resolve Regulatory issues
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j REPORT SYNOPSIS t
{ in 1993, the Nuclear Regulatory Commission (NRC) became aware of engineering practices at Northeast Utilities', Millstone Unit 1, which were outside of Millstone's design bases and a violation of its license. Over the next two years, additional NRC
{ inspections and reviews of operations at all three Millstone units identified numerous I other issues of concern regarding licensed activities and design bases compliance. )
In 1995, NRC received allegations regarding improprieties at the Maine Yankee
{ Nuclear Power Plant while it was shut down for refueling.
j Prompted by these events, issues identified in related Office of the inspector l General reports, and other intemal reviews, the agency initiated a number of actions to address regulatory weaknesses. These actions included establishing Millstone and Maine Yankee Lessons Learned task groups and requesting licensees provide information on the design bases documentation for each plant. The Millstone Lessons Learned reports identified a number of regulatory weaknesses relating to
{ the use of certain regulatory terms,, including: licensee commitment, final safety analysis report, design bases and licensing basis. The Commission is currently evaluating and preparing its response to the staff on these issues. Our audit work
( found that the meanings of these regulatory terms are unclear to many NRC and licerisee staff.
{ in addition, the incident at Maine Yankee demonstrated the agency's vulnerability from reliance on licensees to provide information on commitments they have made to the NRC. Commitments are made in responso to an issue of some regulatory k concern and; therefore, we believe if the concern was significant enough for the agency to request licensees take an action, the agency should track and verify its completion.
In response to the events at Millstone and Maine Yankee, the agency has taken a number of actions, and has plans for more, related to enforcing strict compliance with regulatory requirements which have large resource costs to both the agency and the industry. We found that some of these actions may not produce a safety benefit commensurate with their cost to the agency to enforce, and to the industry to implement. We believe NRC needs to recognize the cost to verify compliance with regulatory requirements may not produce commensurate safety benefits, in I addition, experiences with the agency's efforts to develop risk-informed, performance-based regulations, specifically the Maintenance Rule, have also proven to be costly to both the agency and the industry.
olG/97A 01 Pee i I
I NRC Needs Compreh(nsive Plan to Reso!ve Regulatory issues We recognize NRC needs to be assured that licensees are operating their plants safely by enforcing regulatory requirements. However, our review indicates there is the potential for a conflict between the goal of focusing on issues of greatest safety significance and focusing agency resources on verifying licensee compliance with regulations of limited safety benefit. Therefore, it is critical for the agency to strike a balance between compliance with current requirements and the move to risk informed, performance-based regulation. One of the priniary purposes of risk-infarmed, performance-based regulation is to allow the agency to target its resources on issues of greatest safety significance. We believe a comprehensive, integrated plan could be used to guide the agency in focusing resources on the most safety significant issues. As a part of this plan, NRC needs to clearly '
articulate how it will meet its goal of moving to a risk informed, performance-based regulatory system while maintaining regulatory standards, in addition, we believe thtt a focus on plant safety will enhance the agency's credibility as an effective .
regulator.
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L NRC Needs Comprehensive Plan to Resolve Regulatory issues TABLE OF CONTENTS ,
REPORT SYNOPSIS ... .... . . . .. .. . .. . .. . i INTRODUCTION . . . . . .. .. ........ ... ...... . .. . . 1 BACKGROUND ..........,..... . ...... ,,....... ... .. 2
( FINDINGS . . . . , ....... .. .., .............. ..... ..... .5 NRC NEEDS TO CLEARLY DEFINE AND COMMUNICATE lMPORTANT REGULATORY TERMS . , . . . .. . .... , ,. ..... 6 Reliance on Licensees for Commitment Information May
[ Leave NRC Vulnerable .. . .. . . . .... . 7 COST OF REGULATORY REQUIREMENTS NEEDS TO BE
{ COMMENSURATE WITH SAFETY BENEFIT . . . . . 8 CONCLUSION . 11
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RECOMMENDATION . . . .... . . . . 12
[ AGENCY COMMENTS . . . ... .. . ... .... .. ... . . 13
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APPENDICES I Objectives, Scope, And Methodology ll Agency Comments
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til Major Contributors To This Report
[ IV Glossary: Office of the inspector General Products
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OlG/91A 01 F .
I NRC Needs Comprehensive Plan to Resolve Regulatory issues b
( INTRODUCTION
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in 1993, the Nuclear Regulatory Commission (NRC) became aware of refueling practices at Northeast Utilities' Millstone Unit 1, which were outside of Millstone's design bases and a violation of its operating license. Over the next two years, additional NRC inspections and reviews of opSrations at Millstone identified
{ numerous other issues of concern regarding licensed activities and design bases compliance, in addition, allegations regarding improprieties at the Maine Yankee Nuclear Power Plant were received by the NRC in 1995 while it was shut down for
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refueling. As of July 10,1997, Millstone and Maine Yankee remain shut down while taking corrective actions prior to their restarting.
Prompted by these events, issues identified in related Office of the inspector General (OlG) reports, and other internal reviews, the agency initiated a number
( of actions to address reguiatory weaknesses. These actions included establishing Millstone and Maine Yankee Lessons Learned task groups; evaluating possible changes to 10 CFR 50.59', " Changes, Tests, and Experiments;" and issuing a
( 10 CFR 50.54(f)8 letter to licensees requesting information on the design bases documentation for each plant. The Commission has made some policy decisions based on staff recommendations in the Millstone Lessons Learned reports and will decide on other policy issues in the future, At the same time, the Commission is also committed to making NRC's regulations more risk-informed and performance-based. OlG conducted this review to evaluate agency actions undertaken to respond to regulatory weaknesses identified as a result of these incidents and subsequent intemal self-assessments, and the effect of these actions on long-range regu:atory gekis. We interviewed NRC managers and staff at headquarters and selected regional offices, and industry representativas. Appendix l contains additional information regarding our objectives, scope, and methodology.
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10 CFR 50.59 requires a licensee to review proposed changes to their facility or procedures as described in their safety analysis report to determine if the proposed change can be made without prior NRC approval.
2 10 CFR 50.54(f)is a regulation which allows the NRC to request information from a licensee in the form of a wntten statement, signed under oath or affirmation.
( olG/97A-01 PaDe i
NRC Needs Comprehensive Plan to Resolve Regulatory issues BACKGROUND NRC staff, the Commission, and the nuclear industry have long debated the need for more precise definitions for such regulatory terms as current licensing basis, design bases, and licensee commitments. In general, the licensing basis includes technical specifications, license conditions, licensee responses to generic letters g and bulletins, the regulations, and the Final Safety Analysis Report (FSAR)8 The 3 design bases contain information which identify the functions to be performed by the systems, structures, and components in a nuclear power plant.
The topic of licensee commitments, which may or may not be considered as part of the licensing basis, has seen much controversy pertaining to theii er'nition, legal standing, and enforceability. Licensees can make commitments which fall outside of any enforceable arena, and therefore, are not subject to any regulatory controls.
On the other hand, some commitments made by licensees may be made part of the licensing basis, and therefore, enforceable. An intemal guidance document issued in 1981 emphasized that agency staff should refrain from making a common practice of relying on licensees' commitments for granting licenses and/or amendment approvals. While this guidance did not provide a formal definition of licensee commitments, it did state that licensee commitments considered crucial in E
the decision-making process should be identified in documents of appropriate 3 importance and should be documented by the licensees, identified in the staffs safety evaluation report, and reflected in the plants' FSARs as part of the technical B
q specifications or as a license condition. Once a commitment becomes part of the m FSAR, it becomes a legally binding, controllable item. However, when the 1981 guidance was revised and reissued in 1989, the Office of Nuclear Reactor Regulation (NRR) did not reaffirm this policy.
In the late 1980s, NRC special inspection teams found that some licensees were not adequately maintaining their design bases documentation. The NRC considered the need to develop additional regulatory requirements to implement mandatory design document reconstitution programs, but decided in 1991 that the existing requirements were suTficient. The Commission issued a policy statement in August 1992 summarizing NRC regulations relating to design basis information E
and emphasizing the importance of a thorough review prior to making any g modifications to a facility. The statement also discussed staff plans to issue a generic letter which would request each licensee to voluntarily submit information 3
The Final Safety Analysis Report (FSAR) is a licensing document that provides a description and safety analysis of the site. the design, normal and emergency operation, potential accidents, predicted consequences of such accidents. and the means proposed to prevent or mitigate the consequences of such accidents.
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I NRC Needs Comprehensive Plan to Resolve Regulatory issues !
l about their programs for improving their design bases documentation, or reasons for not ha ing such a program. The Industry's trade association put forth, and the NRC confirmed, that meny licensees were already implementing reconstitution programs to improve design bases documentation. Therefore, in 1993, the NRC decided not to issue this generic letter, but to rely instead on the licensees' individual commitments to conduct self assessments and to correct deficiencies.
In January 1993, NRC established a Regulatory Review Group (RRG) which was tasked to review power reactor regulations and related processes, programs, and practices. The RRG recommended defining the term " commitment" and creating a process for changing licensee commitments. The RRG deemed this recommendation to be so important that they developed a proposed rulemaking on this subject and attached it to the final report which was issued in August 1993.
However, NRC managers did not recommend that the Commission adopt the RRG recommendation, in the final RRG implementation status report, issued in February 1996, the staff also determined that the definitions of " current licensing basis" in 10 CFR Part 54 and " design basis"!n 10 CFR Part 50 were adequate and shculd not be changed nor added to additional regulations.
In October 1993, Northeast Utilities submitted to the NRC a licensee event report stating that Millstone Unit i had been off-loading all the nuclear fuel during refueling outages, even though the licensee's design bases stated that only one-third of the fuel was to be removed. The NRC followed up on this matter with several inspection reports between the periods of April 1994 and September 1995 to verify plant operations and compliance. A supplemental report submitted in December 1995 contained detailed information that showed Millstone had repeatedly refueled in a manner inconsistent with its updated FSAR.
Events at Millstone prompted several internal reviews, including investigations by NRC's OlG and the Office of investigations. In November 1995, the NRC Chairman directed the staff to perform a Millstone lessons learned review. A task group was formed to conduct this review to " explore whether existing oversight processes need improvement or new processes need to be developed which would have produced earlier NRC recognition of an action on Millstone Unit 1 noncompliance with its FSAR." The events at Millstone also prompted the NRC to conduct inspections on the maintenance of licensing basis information, particularly relating to the design bases, at a number of licensees. These inspections found that other plants had not appropriately accounted for, nor documented changes made to their operating licenses, including changes to licensee commitments. As a result, the agency initiated several actions to address these weaknesses, including evaluating possible changes to 10 CFR 50.59, and issuing a 10 CFR 50.54(f) letter to each licensed utility directing them to provide information on their processes for maintaining their design bases information.
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I NRC Ne6ds Comprehensive Plan to Resolve Regulatory issues I
The Millstone Lessons Learned Report, Part 1, issued September 1996, consisted f
of a staff-level review with recommendations related to inspection, licensing, enforcement and licensee reporting. The report stated that the agency's lack of emphasis on verifying FSARs and the misinterpretatit n and non-implementation of 10 CFR 50.71(e), the FSAR update rule, by staff and licensees contributed to the inadequate maintenance of the FSARs by licensees. The report also stated that g reviews of licensee reports indicated that some licensees do not meet all of the g commitments made to the NRC. Millstone Lessons Leamed Report, Part 2, issued in February 1997, presented the Commission with options and recommendations g for addressing the policy issues related to its findings in the Part i report. The Part E 2 report included recommendations that the licensees explicitly identify licensing basis commitments in all future communications. The report also recommended that the agency review selected past licensing commitments to verify their implementation, and that a system be developed by the agency to identify, track, and follow up on licensee commitments. A number of long-term recommendations which would require rulemaking and need Commission direction prior to any further actions were also mcde, including the need to reevaluate the definition of " current licensing basis" and development of a plan to establich a control system for licensing basis commitments which are currently outside of regulatory control.
However, the task group noted that all of their recommendations have resource :
implications which could be significant for the agency and the licensees.
Subsequent to the completion of our field work and in response to the staff's recommendations, the Commission issued a Staff Requirements Memorandum (SRM) on May 20,1997. In this SRM, the Commission approved most of the staff's short-term recommendations and requested that the staff provide a paper discussing experiences gained with their implementation. In addition, the Commission stated that any future staff recommendations should address potential backfit' implications, in addition to the problems at Millstone, NRC and OlG also conducted a number of inquiries in response to allegations mada in 1995 regarding Maine Yankee's .
Inadequate analyses of its emergency core cooling system and deliberate misrepresentations of these analyses on license amendment submittals. The Maine Yankee Lessons Learned Task Group found that the licensee dd not comply with NRC requirements regarding the use of a computer code for analyzing severe accidents, and that there was a weakness in regard to the agency's review process E The group recommended improvements in the consistency and uniformity in code 3
- reviews, particularly the need to provide clear, formal guidance on the various types 4 10 CFR 50.109, known as the "Backfit Rule," requires NRC to justify certain new regulatory requirements through a cost-benefit analysis.
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k NRC Needs Comprehensive Plan to Resolve Regulatory issues of licensee commitments and NRC staff responsibilities for tracking and verifying licensee commitments,
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in an August 1996 meeting with the utility officials, NRC's Executive Director for Operations (EDO) stated that the NRC's position has always been that the
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individual licensees are responsible for maintaining design bases documentation ar.d for " performing necessary assessments of design and procedure changes
( which are required by NRC regulations." However, the EDO noted that the Millstone operations which were outside of their design bases represented a breach of confidence NRC placed in licensees. Maine Yankee's noncompliance with
{ licensee commitments is another example of a breach of NRC's confidence.
The NRC's draft Strategic Plan proposes that the agency make its regulations more risk-informed and performance-based to accomplish it's mission in a more efficient and cost-effective manner. The Chairman has stated that this approach will allow the agency and industry to target resources on those areas of nuclear operations which have the grentest safety significance. The Commission issued the Maintenance Rule, which went into effect last year as one of the agency's first significant efforts at creating a risk-informed, performance based rule. The need
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to regulate in an efficient manner is becoming increasingly important as agency resources continue to decline. The level of full time equivaleats in the agency is
{ projected to be reduced by more than 10% by FY 1998 from its FY 1993 level, and may further decrease as government downsizing continues. Contractor support dollars have also been significantly decreased. The increased use of risk insights f may help the agency better identify areas where unnecessary regulations exist and where new requirements are needed. In April 1997, the Commission affirmed this policy by informing the staff that they should continue with this effort.
FINDINGS The events at Millstone and Maine Yankee underscore the need for the NRC to re-evaluate and clarify certain aspects of its regulatory system. In particular, we found that: 1) the uafinition of a number of regulatory terms are not clear to licensees and staff; 2) the agency routinely relies on licensees to provide information on commitments made to the NRC; and 3) recent agency actions are significantly f impacting NRC and licensee resources and may not be adding substantially to operational safety. While the Commission has addressed some of these concerns, we believe the agency needs to resolve other long-standing regulatory concems by developing and implementing a comprehensive, integrated plan to guide and manage the staff in making these changes.
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I NRC Needs Comprehensive Pian to Resolve Regulatory issues NRC NEEDS TO CLEARLY DEFINE AND COMMUNICATE IMPORTANT REGULATORY TERMS The Millstone Lessons Learned reports identified a number of regulatory weaknesses relating to the use of certain regulatory terms, including licensee commitments, FSAR, design bases and licensing basis. Our audit work confirmed that the meanings of these regulatory terms are unclear to many NRC and licensee E
staff. In particular, we found that the agency has not provided clear guidance to y.
regional personnel, such as plant inspectors, on which licensee commitments are enforceable and which are not, and how to interpret a plant's licensing basis and design bases. Therefore, we believe regional offices, headquarters, and licensee staff may be operating with different understandings of these important regulatory terms.
The Millstone Lessons Learned Report, Part 2, stated that the utility identified the lack of understanding of the interrelationship of licensing and design documents as one root cause of the incident at Millstone. The staff recommended providing additional guidance and increased regulatory focus on design bases issues and the updating of FSARs. In particular, the staff addressed the need to publish guidance ca the definition of design bases. 'ne staff also identified a numbe of long-term actions which could be used to address the regulatory weaknesses identified, but g these actions would have significant impact on agency and licensee resources and 5 were not recommended by the staff to be immediately implemented.
Our audit work found that the application of certain regulatory terms and processes were not clearly understood by NRC and licensee staff. Both regional and headquarters NRC staff we spoke with believe that the regulatory terms " licensing basis" and " design bases" are not well defined, making it diiiicult to know how to apply them. For example, one manager described confusion over whether a system at a plant was to be considered " safety-related" or not; the system had been classified as safety-related during licensing, but another NRC report described the system as not being safety significant. The manager stated that a lack of clarity regarding what documents are part of the licensing basis is keeping this issue from being resolved. The lack of clarity of the important regulatory term "c'esign bases" was brought up as a concem at a recent workshop for NRC project managers. This E
problem has become more evident with the recent emphasis by the agency on g compliance with regulatory requirements related to licensing and design bases.
Licensee staff described how the lack of a clear definition of these terms causes E problems in interpreting what is required and what is outside regulation, creating E disagreements and communication problems between NRC and licensee staff. For example, resident inspectors we spoke with described a disagreement with licensee staff on whether certain design features were considered part of the design basea.
Each case specific interpretation may need to be rnade by headquarters and takes time to resolve.
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NRC Needs Comprehensive Plan to Resolve Regulatory issues The Commission has directed the staff to continue the implementation of most of ,
the short term recommendations listed in the Lessons Learned report. While the l recommendations to be implemented address the terms
- licensee commitment" and
" design bases," the Commission has not approved action on defining or clarifying the use of
- licensing basis" or "FSAR."
RELIANCE ON LICENSEES FOR COMMITMENT INFORMATION MAY LEAVE NRC VULNERABLE l NRC does not have a centralized system for tracking licensee commitments and, l in most cases, must rely upon licensees to provide information on commitments they have made. As rep > ted in a prior OlG report5, the incident at the Maine l Yankee nuclear power pl.at demonstrates NRC's vulnerability from a policy of relying on licensees to track commitments they have made regarding plant operations. In this case, the licensee committed to using a certain computer program for analyzing potential accidents, but did not meet this commitment. NRC closed out the action item without verifying that the licensee had complied with the commitment.
{' Commitments are made in response to an issue of some regulatory concern and; therefore, we believe if the concern was significant enough for the agency to request licensees to take action, it is worth tracking and verifying its completion.
NRC staff with responsibility for licensee commitments should be able to readily access reliable information on those commitments. Commitments may be requirements of the licensa and be formalized in the FSAR or they may be made in docketed correspondence, such as licensee event reports, responses to notices of violation, and responses to generic letters. Commitments not in the FSAR are not controlled by the regulatory process and may be changed without notifying NRC, NRC and the industry are taking actions to address the management of licensee commitments. As part of its Process Improvement Plan, NRR Projects divisions are developing a commitment management program to revise how licensee cammitments are handled in the licensing process. As part of this program, NRR staff have recommended to the Commission that a computerized commitment tracking system be established. The staff intends for all important commitments made after the process is developed to be included in the system. Important commitments are those that the staff has relied on as a basis for approving a licensee's proposed action. The staff will also review selected past licensing issues to identify existing commitments and to verify their implementadon. In addition, NRC Staffs Actions Related to Regulation at Maine Yankee, (Case No.96-04S, May 8, 1996).
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NRC Needs Comprehensive Plan to Resolve Regulatory issues NRC staff recommended having licensees explicitly identify their licensing basis f commitments in future written communications and to encourage licensees to use guidance for managing commitments developed by the Nuclear Energy Institute (NEI), the industry's trade association, and endorsed by NRC. NEI's " Guideline for Managing NRC Commitments" describes a process for managing and cha ,ging commitments made to the NRC.
The Commissior') Lay 1997 SRM responding to the Millstone Lessons Learned report approved the staffs continuing development of a system to identify and track g licensee commitments. We endorse the agency's implementation or this action B item.
COST OF REGULATORY REQUIREMEN fS NEEDS TO BE COMMENSURATE WITH SAFETY BENEFIT We believe that while recent regulatory actions and requirements may have enhanced NRC's confide, ice in licensees' design control practices, they may not necessarily produce a safety benefit commensurate with their cost to the industry to implement and the agency to enforce. In response to the events at Millstone and Maine Yankee, the agency has taken a number of actions, and has plans for more, related to enforcing strict compliance with all regulatory requirements. These g action.i have had significant resource implications for both the agency and the E industry. In addition, experiences with the agency's efforts to develop risk-informed, 4
performance-based regulations, specifically the Maintenance Rule, have in our opinion, also proven to be costly to both the agency and the industry with potentially little foreseeable increases in safety.
While compliance with regulatory requirements is important, in a time of diminishing I resources NRC needs to focus on those areas which provide the greatest safety benefit. Emphasizing strict adherence to all NRC requirements, some of which may not be safety significant, may result in an ineffective use of resources. In fact, the EDO recently stated that "...you can have a plant with significant compliance trouble and still be a low risk plant." Therefore, it is essential that the agency balance the safety benefits gained from its emphasis on strict compliance with licensing and design bases documentation with the associated cost. Now is the time for NRC and the industry to identify those requirements which significantly contribute to plant safety and eliminate those which do not. The goal of this effort is to minimize the expenditure of limited resources on compliance with non-safety E significant requirements at the expense of those which are essential to the safe 5 operation of a nuclear power plant.
The events at Millstone and Maine Yankee have caused the NRC to take on a number of compliance-oriented activities that have a significant impact on agency resources. For example, NRC staff estimate that approximately $1.6 million will be olG/97A-01 Page 8 l
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NRC Needs Comprehensive Plan to Resolve Regulatory issues spent on contractors, and over 20,000 staff hours will be used to conduct a review
{ of Millstone's design bases and licensing basis, in addition, it is projected that another $2.6 million will be spent on contractors to review Millstone corrective !
actions, as well as 16 full time NRC staff to ensure the licensee is adequately prepared to resume operating the facility. NRC staff pointed out these estimates are in addition to the significant inspection resources already being used by Region l I at Millstone. Further, the agency projects about $5 million will be spent on l contractors to conduct design bases inspections at other plants. These actions have had, and will continue to have, significant impacts on other NRC regulatory activities. For example, the demand for agency resources to hire architect / engineer contractors for the dt sign bases inspections has forced the agency to eliminaie I iniegrated Performante Assessment Process inspections, a program initiated in j response to the need to better integrate disparate information from various agency I
assessments in order to ensure potential safety issues are recognized and resolved before they become plant problems, in addition, some regional managers reported that the shift of resources to Millstone could eliminate regional initiative inspections at some plants, as well as impact Maintenance Rule inspections, and follow-ups on design bases 3 ,fsrmaib1 other licensees have submitted in response to the 50.54(f)
{ requeet.
The agency's reactions to Millstone and Maine Yankee have also had a significant impact on licensee resources. For example, the resource impact of responding to NRC's request for additional design bases information, estimated by the agency to require 400 hours0.00463 days <br />0.111 hours <br />6.613757e-4 weeks <br />1.522e-4 months <br /> of licensee staff time, has averaged over 2,000 hours0 days <br />0 hours <br />0 weeks <br />0 months <br /> per plant, according to the NEl, NEl also stated that the burden from this request has significantly impacted an industry initiative to provide additional assurance that they are maintaining their licensing basis and operating their plants in conformance with it. In addition, one licensee told us that NRC's recent emphasis on compliance has shifted their resources to non-safety significant issues. The shift of resources has also hampered the licensee's efforts to standardize their technical specifications, an initiative promoted by the agency. Another licensee stated that the emphasis on compliance has slowed their efforts to incorporate risk-informed insights into their operations, While we recognize that it is important that NRC has confidence in licensees' design and licensing programs, much of the compliance-oriented inspection work to date has tumed up little of safety significance. The staff has stated that it may be difficult to quantify the ri.sk associated with deficiencies in plant design or in implementation of the design; however, the agency's review of FSAR issues found none with risk significant generic implications out of 202 issues reviewed. While some NRC staff felt these inspections were valuable, other managers told us that the inspections of licensees' design bases have provided few safety significant findings; in fact, only one Level til violation, the lowest level violation for which a civil penalty is olGl97A 01 Page 9
NRC Needs Comprehensive Plan to Resolve Regulatory issues considered, has been issued at the time of this report. Additionally, a recent review of design errors reported from 1985-1995 concluded that the number of design errors has been steadily decreasing since the early 1990s even though the number I of NRC inspector hours for engineering related inspection modules has increased during the same time period. About two percent of these errors were significant enough to warrant further evaluation. Further, the staff has reported, in Part 2 of the Millstone Lessons Learned report, that regulatory analysis of the long term actions relating to design and licensing basis "would not show them to be a substantialincrease in overall protection." Thus, the staff concluded that they may g not be able to justify these actions under 10 CFR 50.109, "Backfitting." Licensees 4 we spoke with also felt that the agency's emphasis on compliance issues is costing !
them significant resources without necessarily improving plant safety.
One of the reasons NRC and the industry worked together to adopt risk-informed, performance-based regulations was to help target agency and industry resources where they will produce the greatest safety benefit. The investment to develop these regulations also requires significant resources. For example, Maintenance Rule implementation, including the development of the guidance, workshops, -
training, and baseline inspections, has been resource-intensive for the agency, as well as being costly for licensees to implement. However, the rule is not projected to provide resource savings in the future. Furthermore, the rule was aimed at, and has been justified on the basis of, addressing problems with licensee balance-of-plant systems' However, a report by the Office of Analysis and Evaluation of 5 Operational Data shows that by 1995 the number of transients7 caused by balar'.e- E of-plant systems had been reduced to less than a third of what it was in 1985.
In summary, in a time of diminishing resources, NRC needs to focus resources where they can provide the greatest aafety benefit. While licensee compliance with NRC requirements is important, not all of these requirements are necessarily safety significant. For example, it was recently recognized that certain requirements for fire barrier penetration seals had no technical basis and that the staff plans to eliminate these requirements through a rule change. We believe the agency has imposed requirements by means other than by regulation, which may not provide significant safety benefits, yet licensees must meet them and NRC must expend resources to verify licensee compliance. Specifically, the agency may be imposing undue requirements by compelling licensees to make certain commitments in response to agency generic communications and to violations.
- Balance-of-plant" refers to all nuclear plant systems except the Reactor Protection g System. Control Rod Drive, and Reactor Coolant System. For examp%, the turbine, g generator, and pnmary feedwater systems are all considered part of the balanc0-of-plant.
7 A " transient" is an unplanned challenge to a plant safety system.
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NRC resus Comprehent,1ve Plan to Resolve Regulatory issues Now is the time to identify those requirements which do not significantly add to plant safety and work to eliminate them. Both NRC and the industry recognize the 1 significant resource investment needed to ensure compliance with all NRC I requirements. The idea of eliminating unnecessary requirements is not a new one l and we recognize that it is a difficult task. However, one Commissioner recently stated that the time is right for the industry to propose new initiatives aimed at !
making NRC regulations more in line with safety, and that Qe Commission is open j to working with the industry to eliminate requirements lacking a true t'exus to safety. l The Chairman has also stated that it is NRC's responsibility, to its health and safety mission, to work within a regulatory framework that is efficient and effective for both the NRC and the nuclear energy industry.
i CONCLUSION Recent events at Maine Yankee and Millstone have demonstrated weaknesses in I NRC's regulatory system. The Millstone Lesson Learned reports identified the need to more clearly define design bases and licensing basis, concerns confirmed by our audit work. We believe that in order to regulate effectively, important regulatory terms must be clarified and their meaning communicated to licensees, the NRC staff, and the public, in addition, the incident at Maine Yankee raises questions regarding NRC's policy of re;ying on licensees to track licensee commitments. OlG believes the agency needs to revisit this long-standing policy. As long as the agency reHes on licensees to provide the information on commitments, NRC will be vulnerable to incidents like that which occurred at Maine Yankee.
We also found that a number of actions being undertaken in response to events at l the Millstone nuclear power plant will require significant costs both to the agency and the licensees, yet may have little effect on the day-to-day operational safety of the plants. In addition, other regulatory requirements, such as the Maintenance Rule, may be focusing much of the agency's attention and resources on areas which may not increase plant safety. While it must assure itself and the public that there is sufficient licensee management control of design and licensing requirements, NRC needs to recognize that its emphasis on compliance has the potential for causing resources to be spent on issues which may provide little safety benefit. At some point, NRC managers need to determine whether the design and licensing problems they have identified are a serious regulatory concern requiring a continued application of resources. Such a point may be at the time the agency makes a determination regarding the reasonable assurance statements related to management controls in response to Federal Managers Financial Integrity Act requirements. In its FY 1996 Accountability Report, the agency stated that it does not believe the issues raised from the events at Millstone resulted from a material weakness in management controls, but that the extent of the problem is unclear.
We believe that the agency should be in a position to determine the seriousness of olG/97A 01 Page 11
NRC Needs Comprehensive Plan to Resolve Regulatory issues any management controls weaknesses that may be present when it makes its reasonable assurance statements for FY 1997.
As agency resources continue to decline, NRC must strike a balance between compliance with current requirements and the move to risk informed, performance-based regulation, while continuing to focus on plant safety. NRC, there'nre, needs to assure that its regulatory actions produce a safety benefit commoi 4 urate with their resource cost. Also, in the long run, a focus on plant safety will enhaace the l
agency's ciedibility as an effective regulator.
RECOMMENDATION NRC needs to establish a comprehensive, integrated plan to ensure that its resources are directed at the most safety significant issues and that it strikes an appropriate balance between complia' ice with current requirements and the goal of moving to risk-informed, peiformance based regulation. Such a plan should include steps to:
-- conduct a systematic review of current requirements to assure NRC and licensee resources are used h a manner most conducive to improving plant safety;
- develop a threshold to help managers recognize when the costs exceed the benefits from the current focus on compliance-oriented inspections and reviews; ,
- clearly define and communicate the meaning and requirements of important aspects of the regulatory system, including design bases, licensing basis, FSAR, and licensee commitments;
-- revisit the agency's policy of relying on licensees to provide E information on commitments made to the agency; E
-- clearly articulate how it will meet its goal of moving to a risk- E informed, performance-based regulatory system while maintaining E regulatory standards;
-- develop outcome-based performance measures and milestones for this effort; and,
- be integrated with the agency's long-term Strategic Plan.
I I
OlGl97A 01 Page12
NRC Needs Comprehensive Plan to Resolve Regulatory issues
(
AGENCY COMMENTS
(
The L < >uty Executive Director for Regulatory Programs agrees with the objectives ,
[
of the reports recommendation. However, he stated that rather than conducting a l l separate effort to accomplish these objectives, the staff will factor insights from the report into other on-going agency activities, including the strategic assessment, strategic plan, performance plan, budget review and development, multiple program
)
improvement initiatives, the rulemaking process, the planning framework, and the '
GPRA implementation. We agree that no separate effort is necessary to address the report's recommendation as long as quarterly reports are provided to OlG on
{
the progress being made through these activities. with specific focus r.n the seven elements we recommended be included in a comprehensive plan.
l
{
l 1
OlG/97A 01 Page 13 w
[
r Appendix l
( NRC Needs Comprehensive Plan to Resolve Regulatory issues
]
I
( OBJECTIVES, SCOPE, AND METHODOLOGY The objective of this audit was to evaluate agency efforts to address the regulatory j
{ weaknesses identified by the Millstone and Maine Yankee Lessons Learned reports I and related internal reviews. .
During the audit we obtained the views of managers and staff from the Nuclear Regulatory Commission (NRC) and selected utilities. To obtain the headquarters
( perspective, we interviewed senior managers and staff of the Office of Nuclear Reactor Regulation and the Office of the General Counsel.
( To complement this information, we interviewed resident and region based inspectors, Branch Chiefs, Division Directors, a Deputy Regional Administrator, and a Regional Administrator in NRC's Regions I and IV.
To obtain the utility industry perspective, we interviewed representatives of the Nuclear Energy Institute and managers and staff at two nuclear power plants.
We also reviewed documentation relating to this issue obtained from both NRC and the industry.
We conducted this audit in accordance with generally accepted government auditing standards between October 1996 and April 1997.
(
{
{
Appendix ll NRC Needs Comprehensive Plan to Resolve Regulatory issues 9
[9 ** * * % . UNITED STATES
!)'L['j NUCLEAR REGULATORY COMMISSION d,
y ,g y j wAs> so10N, o C. Mt>We August 13, 1997 MEMORANDUM 10: Thomas J. Barchi Assistant inspector General for Audits FROM: Hugh Thompson, Jr.
Deputy E.xecutive Directo gk g, f/ ,_
for Regulatory Programs SUBJECl: DRAFT REPORT - NRC NEEDS COM EHENSIVE PLAN TO RESOLVE REGULATORY ISSVES By memorandum dated July ll,1997, your office provided to me the results of l its review of the agency's response to the events at Millstone and Maine Yankee, and . Jested Comments, lhe staff reviewed your draft report and its comments pre ..sted in tne attachment. Proposed changes to some of the wording I
are noted with changes in bold letters. Overall, the staff found the report to be an accurate reflection of issues being reviewed and ongoing in the Office of Nuclear Reactor Regulation.
The staff agrees and recognizes that improvements in staff processes can be made Sased on Millstone and Maine Yankee Lessons Learned efforts. As an agency of limited resources and staf f, we also recognize that we must make informed choices in applying our resources to the most safety-significant activities. As we continue to develop and implement process improvements, we need to carefully assess the staff resources necessary to accomplish the initiatives, for example, the staff has actions underway to identify, track and verify those commitments that the staff relied on to make regulatory decisions. Based on limited staff resources, as this initiative progresses, we may need to consider the verification of selected commitments (e.g., those related to licensing actions) on an audit basis, similar to what is currently done in the inspection program. Recognizing the importance of assessing the licensees' processes for managing commitments, the staff intends to conduct a l series of audits of licensee programs for managing commitments made to the
) NRC. The staff will provide further details in this area and other areas related to the Millstone and Maine Yankee Lessons Learned efforts in our response to your report, if you have any questions, please do not hesitate to contact my office.
Attachment:
As stated CONTACT: Cynthia A. Carpenter, NRR (301) 415-3641 OlG/97A oi Pagei of6
I Appendix ll NRC Needs Comprehensive Plan to Resolve Reoulatory lasues Connents on Draft O!G Report
- 1. Eagg 1. second en iqttph. second sentence: The staff is reviewing options to present to the Commission with respect to 10 CFR 50.59. A decision to revise 10 CFR 50.59 has not been made at this time. This 3 sentence would be better clarified by stating, "These actions included 3 establishing Millstone and Maine Yankee Lessons Learned task groups, evaluating possible changes to 10 CFR 50.59...*
- 2. Paae 1. footnote 11 The portrayal of the 10 CFR 50.59 process in this f ootnote would be better clarified as folius. *10 CFR 50.59 requires a licensee to review proposed changes to their facility or procedures as described in their safety analysis report to determine if the proposed change can be mde without prior NRC approval."
- 3. Etge 2. last ottgaraoh. last sentence on paae: The design bases also contain values of controlling parameters. We recommend the sentence read as follows: *lhe design bases contain information which identify the functions to be performeJ by the systems, structures, and components of a facility and values of controlling parameters. l
- 4. Elge 2. footnote 2: 10 CFR 50.54(f) is better characterized as a E' regulation, rather than a regulatory process. E
- 5. E.aae 2. footnote 3: The f5AR does not provide a complete description of the site; instead, the FSAR provides design basis information.
Additionally, the FSAR is better characterized as a safety analysis rcther than a safety evaluation. We recommend that the first part of the footnote be revised to read at follows: *The final Safety Analysis Report (FSAR) is a licensing document that provides a design basis description and safety analysis of the site ....
- 6. Paae 3. first caraaranh. fifth and six1.h sentences: This sentence would be better clarified by modifying the sentence to read as follows:
- While this guidance did not provide a formal definition of licensee commitments, it did state that licensee commitments considered crucial in the decision-making process should be reflected in the plant's FSAR, included in technical specifications, or incorporated in license conditions."
1he 1981 guidance, *NRR Office letter No. 34 - Utility Commitments," was issued in 1981, and re-issued on May 29, 1985. The re-issuance of the g 1981 guidance in 1985 did re-affirm the mentioned policy. However, in E 1989, NRR re-issued a status of effective NRR Office Letters, and NRR Office Letter No. 34 was not listed as still in effect, but rather to be updated. This update did not occur.
I ATTACHMD4T olomA 01 Page 2 of 6
1 L
Appendix il NRC Needs Comprehensive Plan to Resolve Regulatory issues 2-
- 7. Pace 3. second oaraaraoh. third sentence:
- To clarify that the policy statement issued in August 1992 related to design basis information, it is recommended that the sentence be revised to read as follows. "The Commission issued a policy statement in August 1992 summarizing NRC
( regulations calating to design basis information and emphasizing ..."
- 8. Pace 4. first full caraaranh. fourth sentence: It is recommended that the paragraph be deleted or modified based on the following information,
(
in the RRG implementation Plan (SECY-94-003, " Plan for Impicmenting
. Regulatory Review Group Recommendations"), the staff informed the Commission possible, endorse that industry for Topic Area 7 [ines regarding what constitutes aCurrent Licensing guidel commitment and the types of controls to be placed on changing I
I commitments. The staff also informed the Commission that it would ren sess the need to develop rulemaking after guidance was implemented.
The NRC staff's finding that guidance prepared by NE! Was an acceptable means of controlling commitments was documented in SECY-95-300, " Nuclear Energy institute's Guidance Document. ' Guideline for Managing NRC Commitments,'" dated December 20, 1995, in a letter to NEl dated
( January 24, 1996, the staff informed the industry that the NEl guidance was acceptable and that the NRC would monitor licensees' implementation of the NEl guideline or their alternate commitnent control processes in
( order to assess the need to promulgate staff guidance or rulemaking.
The staff is currently preparing to conduct a se,'es of audits of licensee programs for managing commitments made to the NRC . On the basis of the results of the audits, the staff will determine what additional actions are warranted. Future activities may include increasing the scope of the audits to include all reactor licensees, conducting workshops on the audit findings, and incorporating review of commitment management programs into routine NRC inspection activities.
It is likely that additional actions in the area of commitment management will also be needed as part of the overall integration of the various activities associated with improving the NRC's oversight of the current licensing basis of power reactor facilities. The staff will evaluate the effectiveness of the NEl guidance and reassess the need for rulemaking after gaining experience with its implementation.
- 9. Paae 5. first naraaraoh. last sentene: Same comment as No.l. The staff is reviewing options to present to the Commission with respect to 10 CFR 50.E9. A decision to avise 10 CFR 50.59 has not been made at this time. This sentence would be better clarified as follows. "As a result, the agency initiated several actions to address these weaknesses, including a review of 10 CFR 50.59, and issuing a 10 CFR 50.54(f) letter to each licensed utility directing them to provide information on their processes for maintaining their design bases information."
OlG/97A 01 Page 3 of 6
Appendix ll NRC Needs Comprehensive Plan to Resolve Regulatory issues
-3
- 10. Paae 6. second full paraaraoh. second stntence: Replace the words
- severe accidents," with the words "small break LOCAs."
- 11. Paae 6. fog.tnote 4: It is recommended that this footnote be expanded to provide additional information on the requirements of the backfit rule, in order to be more accurately portrayed. As the footnote is currently written, it implies that 10 CFR 50.109 requires the NRC to justify all E new regulatory requirements with a cost-benefit analysis. A cost- E benefit analysis in accordance with 50.109 is not always required, and 10 CFR 50.109 should to be consulted for each case.
- 12. hoe 9. second oaraaraoh. last sentence: This sentence should be clarified to read as follows: "This problem has become more evident with the recent emphasis by the agency on compliance with regulatory requirements related to licensing and design bases. l
- 13. Paat 10. first caraaraoh. last sentence: Case specific inter)retations do not always need headquarters involvement. This sentence siould be clarified to read as follows: "Each case specific interpretation takes time to resolve, and may require headquarters involvement."
- 14. Paae 13. first full carnarachufifth sentence: The cost of the design bases inspections at other plants is projected to be about $5 million, rather than the $6 million noted.
- 15. Paae 13. first full paraaraph. seventh sentents: This sentence reads that the demand for funds to hire architect / engineer contractors for the design bases inspt.ctions has forced the agency to eliminate IPAP inspections. This is mischaracterized. Instead, it is the demand for agency resources, not technical assistance funds that has forced the agency to eliminate IPAP inspections. Recommend replacing the phrase
" demand for funds" with " demand for agency resources."
- 16. Paae 13. first full paraaraph. last sentence: This sentence states that the shift of resources could eliminate regional initiative inspections and implies that all regional initiative inspections could be eliminated. Some regional initiative inspections at some plants may be eliminated, but not all. A better characterization would be for the sentence to read, "In addition, some regional managers reported that the shif t of resources to Hillstone could eliminate some regional initiative inspections at some plants. ..."
OlG/97A 01 Page 4 of 6 I
L Appendix 11 NRC Needs Comprehensive Plan to Resolve Regulatory lasues I
L
, f 17 Pace 14. first earaarach. second sentente: This sentence should be l
clarified to ensure it is clear that NRC's request for additional information would not be for design bases information, but for r information regarding licensee programs for maintaining design bases.
L lt is recommended that the sentence be modified to read as follows:
- For example, the resource impact of responding to NRC's request for additional information regarding licensee programs for maintaining
( design bases, ..."
- 18. Paae 14. second caraaraoh. third sentence: This sentence indicates that
( only one Level 111 violation is being issued for design bases t inspections. Other apparent violations have been noted at other facilities, and are under consideration for escalated enforcement at this time. Therefore, this sentence, noting that only one Level 111
( violation is being issued, is premature.
- 19. Pace 16. first caracraoh. fourth sentence: It is not clear what is
( meant by the statement, "We believe the agency has imposed requirements by means other than by regulation..." This should be clarified.
I l
(
(
(
l OlG/97A 01 Page 5 of 6
)
i
. j
r L
r Appendix 11!
[ NRC Needs Comprehensive Plan to Resolve Regulatory lasves MAJOR CONTRIBUTORS TO THIS REPORT
(
William D. McDowell
( Team Leader Lindley R. Higgins Senior Management Analyst Catherine M. Colleil Management Analyst
(
i l
l OlG/9fA41 Page 1 of 1
Appendix IV
[ N% Needs Compr:hensiv1 Plan to R solv 3 Regulatory latuit GLOSSARY: OFFICE OF THE INSPECTOR GENERAL PRODUCTS INVEtilGAtlVE
{ 1. INVESTIGATIVE REPORT
- WHITE COVER An Investigative Report documents pertinent facts of a case and describes available evidence
[ relevant to allegations against individuals, including aspects of an allegation not substantieted.
investigative reports do not recommend disciplinary action against individual employees.
Investigative reports are sensitive documents and contain information subject to the Privacy Act restrictions. Reports are given to officials and managers who have a need to know in order to
{ property determine whether administrative action is warranted. The agency is expected to advise the OlG within 90 days of receiving the investigative report as to what disciplinary or other action has been taken in response to investigative report findings.
- 2. EVENTINQUIRY GREENCOVER r The Event inquiry is an investigative product that documents the examination of events or agency Ls actions that do not focus specifically on individual misconduct. These reports identify institutional weaknettes that led to or allowed a problem to occur. The agency is requested to advise the r OlG oNanagerial initiatives taken in response to issues identified in these reports but tracking L lts r; C ndations is not required.
3: MAN. F ' !NT IMPLICA TIONS REPORT (MIR) . MEMORANDUM l
[
MIRr, I aide a
- ROOT CAUSE" analysis sufficient for managers to facilitate correction of problem. and to avoid similar issues in the future. Agency tracking of recommendations is not required.
[ Auoli
- 4. AUDITREPORT BLUE COVER An Audit Report is the documentation of the review, recommendations, and findings resulting from an objective assessment of a program, function, or activity. Audits follow a defined procedure that allows for agency review and comment on draft audit reports. The audit results are also reported
[ in the OlG's " Semiannual Report" to the Congress. Tracking of audit report recommendations and agency response is required.
(. S. SPECIAL EVALUATION REPORT BURGUNDY COVER A Special Evaluation Report documents the results of short term, limited assessments. It provides an initial, quick respotise to a question or issue, and data to determine whether an in-
[ depth independent audit should be planned. Agency tracking of recommendations is not required.
REGULATORY
[ 6. REGULATORY COMMENTARY BROWN COVER Regulatory Commentary is the review of existing and proposed legislation, regulations, and
(' policies so as to assist the agency in preventing and detecting fraud, waste, and abuse la programs and operations. Commentaries cite the IG Act as authority for the review, state the specific law, regulation or policy examined, pertinent background information considered and identifies OlG concerns, observations, and objections. Significant observations regarding action
{ or inaction by the agency are reported in the OlG Semlannual Report to Congress. Each report indicates whether a response is required, Olo/97A41 Page 1 of 1
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