ML20237A152

SER Re Mgt Services Agreement at Clinton Power Station. Approval Under 10CFR50.80 Not Required

ML20237A152
Person / Time
Site:	Clinton
Issue date:	08/07/1998
From:	NRC (Affiliation Not Assigned)
To:
Shared Package
ML20237A149	List: ML20237A147 ML20237A152
References
NUDOCS 9808130132
Download: ML20237A152 (3)

Text

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l' p*"49 y \ UNITED STATE 8 o NUCLEAR REGULATORY COMMISSION

. g o, WASHINGTON, D.C. SomeHoot s...../

SAFETY EVALUATION BY THE OFFICE OF NUCLEAR REACTOR REGULATION MANAGEMENT SERVICES AGREEMENT AT CLINTON POWER STATION ILLINOIS POWER COMPANY DOCKET NO. 50-461 l

I. BACKGROUND lilinois Power Company (IP) is the holder of Operating License NPF-62 for the Clinton Power Station. By letter dated January 5,1998, Illinois Power informed the NRC that it was entering into a management services agreement with PECO Energy to provide senior management oversight for the Clinton Power Station. Mr. Walter G. MacFarland IV was named Chief Nuclear Officer for Clinton, reporting directly to the Chief Executive Officer and President of Illinois Power.

There were two subsequent conference calls between Illinois Power and NRC staff members on January 12,1998, and March 24,1998, in which details of the service agreement were discussed. By letter dated January 23,1998, Illinois Power forwarded a copy of the draft services agreement and concluded in the cover letter that neither the management services agreement with PECO Energy nor the resulting specific management changes would, in their opinion, require NRC approval. By letter dated April 1,1996, Illinois Power forwarded a copy of the final management services agreement.

During the March 24,1998, conference call, the staff was informed that Mr. MacFarland had -

resigned his PECO corporate officer position and had been named a Vice President of Illinois Power. He remains a PECO employee, although he is an officer of IP as well.

A Clinton Power Station organization chart forwarded to the NRC Project Manager on February 3,1998, identified positions being staffed with PECO personnel. Of the nine managers reporting directly to the Chief Nuclear Officer, Mr. MacFarland, three are to be PECO personnel: the Station Manager, the Maintenance Manager, and the Manager of Work i

Management. Of the four directors reporting to the Station Manager, only one, the Director of Operations, is to be a PECO employee. Another PECO manager will serve as Supervisor of Operations Services and report to the Director of Operations. Of the six supervisors reporting to the Maintenance Manager, only one, the Supervisor of Electrical Maintenance, is to be a PECO employee. Of the four supervisors reporting to the Manager of Work Management, one will be a PECO employee, the Director of Work Coordination. One additional PECO employee will serve as Director of Design Engineering and report to the IP Manager of the Nuclear Station Engineering Department. A total of nine positions are being filled by PECO personnel.

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11. ANALYSIS The transfer of licenses is govemed by 10 CFR 50.80, which states that "no license for a production or utilization facility, or any right thereunder, shall be transferred, assigned, or in any manner disposed of, either voluntarily or involuntarily, directly or indirectly, through trar'sier of control of the license to any person, unless the Commission shall give its consent in writing? In

reviewing license transfers, the Commission must determine whether the proposed tranMree is qualified to be the holder of the license, and whether the license transfer is consistent with applicable provisions of law, regulations, and orders issued by the Commission. ,

l In SECY-g7-304," Response to Staff Requirements Memorandum: SECY-97-144,' Potential Policy 16 sues Raised by Non-Owner Operators," it was noted that various altemative non- 4

l. owner operator arrangements would be pursued by licensees as utilities evolve under i deregulation. With regard to these new arrangements, the decision on whether consent under 10 CFR 50.80 is necessary depends on the extent to which operating control is being transferred and the degree of autonomy being granted to the operating company.

The service agreement between IP and PECO is similar in certain respects to the Maine Yankee management services agreement with Entergy Nuclear, Inc., signed in early 1997. In its letter of April 1,1998, IP maintained that there was ample regulatory precedent involving l similar arrangements for contract management services to support its conclusion that IP would l in substance remain the licensed operator (as well as owner) of the Clinton facility, maintaining ultimate control over plant operations.

l l During the March 24,1998, conference call with the NRC staff, IP maintained that a new i operating entity was not being created. The service agreement states that PECO management personnel serving at Clinton Station will be treated as employees of IP for operational and functional purposes and will exercise their authority in the IP organization on behalf of, and subject to the direction of, IP senior management. With the Chief Nuclear Officer becoming an officer of IP, the licensee maintains that there is no transfer of authority to PECO.

. Management personnel from PECO serving at the Clinton station will be receiving technical

!- direction not from senior management back at PECO but from the IP organization. Alllicensed j operators at Clinton will remain solely employees of IP.

During the January 12,1998, conference call with IP, the staff requested confirmation that the management changes proposed under the services agreement would be consistent with the Final Safety Analysis Report licensing bases or that appropriate change requests would be submitted, in its letter of April 1,1998, IP stated that as of that date nine management positions had been filled by PECO employees and none of the management changes required changes to the plant Technical Specifications.

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lli. CONCLUSIONS The determination of whether consent under 10 CFR 50.80 is necessary depends on the extent to which operating controlis being transferred. If a transfer of control under 10 CFR 50.80 is viewed as a transfer of the ultimate authority granted under a license, then it would follow that a licensee who has chosen to hire and use contractors to perform activities under the facility license has not transferred control, as long as the licensee has retained the authority to direct the activities of the contractor, including, for example actions to shut down or start up the reactor, and has the ability to terminate such contract services.

! The staff concludes that notwithstanding the management services agreement between IP and l PECO, IP retains authority and responsibility for the safe operation of the plant and for regulatory compliance. ' In addition, PECO Energy will not be performing activities that would require a license. Approval under 10 CFR 50.00 is therefore not required.

Regardless of whether 10 CFR 50.80 consent is required, a licensee engaging contract service company management personnel must verify that the contract managers meet the requisite qualifications for the positions they are holding, if there is any disparity between the committed / required qualifications for a position and the actual qualifications of the new l

manager (s), then the licensee should pursue the appropriate method to resolve the disparity.

Verification that PECO management personnel meet required educational and experience requirements for the positions they are filling at Clinton will be accomplished via NRC inspection and regulatory programs.

l PrincipalContributor: M. Davis l

I Date: August 7, 1998 l

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