ML20237D651

Responds to Which Provided Comments on Proposed FY98 Fee Rule & Request for Reconsideration of Denial of Exemption Request.For Reasons Stated,Nrc Again Denying Request

ML20237D651
Person / Time
Site:	Portsmouth Gaseous Diffusion Plant, 07007001
Issue date:	08/25/1998
From:	Funches J NRC OFFICE OF THE CONTROLLER
To:	Toelle S UNITED STATES ENRICHMENT CORP. (USEC)
References
NUDOCS 9808270109
Download: ML20237D651 (4)

Text

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ecrog p* JS" UNITED STATES NUCLEAR REGULATORY COMMISSION f WASHINGTON, D.c. 20555 4 001

% *****f August 25, 1998 United States Enrichment Corporation Attn: Steven A. Toelle, Nuclear Regulatory Assurance and Policy Manager 6903 Rockledge Drive -

Bethesda, MD 20817-1818

Dear Mr. Toelle:

I am responding to your May 1,1998, letter providing comments on the proposed FY 1998 fee rule and a request for reconsideration of the denial of your exemption request. In the final rule published June 10,1998, in the Federal Reaister (31843), we stated that your request for reconsideration of the denial of your exemption request would be responded to separately. For the reasons explained below, we are again denying your request.

You based your request for reconsideration of the May 8,1998, denial on three facetb Single Process, Hazards, and Regulatory Effort. The Office of Nuclear Material Safety ane: '

Safeguards has carefully reviewed all the arguments you have put forth and has provided the following response.

1. Single Process USEC asserts that the two GDPs are the operational equivalent of a single plant in that both plants are part of one process to produce enriched uranium product suitable for fabrication of light water reactor fuel. Although business considerations currently require USEC to operate the facilities together, Portsmouth is capable of independent production. While the Paducah facility can only produce up to 2.75 percent, analysis to support enrichment to 5 percent has been conducted for the Paducah facility. The plants are treated as independent facilities by the NRC. There is a unique safety analysis report for each facility and the Technical Safety Requirements, although similar in some aspects, contain unique requirements. Each facility has a separate Certificate of Compliance and separate NRC project managers, as well as two Resident inspectors at each facility. Certification actions, including amendments (management involvement), are separate, as are enforcement actions, petition actions, etc. While some of the programmatic regulatory effort covers both facilities, there are activities that are specific to each facility.

USEC points out that its major policies and programs for the GDPs are largely identical. While g it is true that the major policies are established for both plants, the implementation at each GDP differs and has resulted in unique regulatory effort. The fire protection system and classified material at Paducah, and the nuclear criticality safety program and the HEU program at Portsmouth are examples of such efforts.

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S. Toelle - 2. Hazards USEC asserts that because the predominant hazard associated with the GDPs is the same as other LEU facilities and the types of potential accidents are similar, their annual fee should be reduced to a value commensurate with the fees for LEU facilities. The comparison to the LEU facilities is not appropriate. While the predominant hazard, presence of UF., is the same, the manner in which UF. is handled is very different. The LEU facilities deal with UF. only at the front end of their processes; the UFe is converted to a less hazardous form of uranium. The GDPs handle UF. from the beginning to the end of their process and handle much higher volumes. Except as a transition phase during vaporization, LEU facilities do not routinely handle liquid UF.; the GDPs handle large volumes. As the NRC has stated in the past, the risk of accidental release of UF, is higher at the GDPs. Other types of accidents that could occur at either a GDP or an LEU facility are fire and a criticality accident. Due to the large inventory of lube oil present at the GDPs, the risk of a fire at the GDPs is considered to be higher. The GDPs also have more operations that rely on a single contingency to prevent a criticality accident than do the LEU facilities. As a result of these additional considerations (i.e., large inventory of liquid UF. and associated risk of accidental release, higher risk of fire, and greater reliance on single contingency to prevent a nuclear criticality), the NRC has had to spend more 1 time and effort in the GDP review activities.

3. Regulatory Effort i

USEC asserts that the GDPs employ safety and safeguards measures which are directly l

comparable to LEU facilities. While some activities are comparable, others are not. )

Consequently, the NRC expends more regulatory effort which is directed solely to address GDP specific activities as discussed below. The LEU facilities do not routinely handle liquid UF.

except as a transition phase during vaporization. In the safeguards area, while the basic requirements are the same, implementation differs significantly, particularly in the method for determining inventory holdup. The LEU facilities shut down operations, clean out the equipment and take measurements. The GDPs do not shut down the cascade to calculate the holdup for the cascade. The staff is also undertaking regulatory effort that applies only to the GDPs.

Rulemaking activity is underway to revise Part 76. Changes are also being made on reporting guidance documents for material accountancy and control that primarily affect the GDPs because the GDPs could not report using the existing guidance. In addition, the GDPs possess I classified information which the LEU facilities do not possess.

USEC objects to including the Annual Report to Congress, backfit, and the development of a Standard Review Plan (SRP) in the generic programmatic effort expended for the GDPs. USEC is correct in stating that the Annual Report process is in lieu of a Licensee Performance Review (LPR) conducted for other facilities. This means that the information gathered to support i an LPR is used in preparation of the Annual Report. A second review is not conducted.

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Mugust 25e 1998

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S. Toelle However, the Annual Report process includes effort beyond what is necessary for an LPR.

! While USEC is cerect in saying that backfit has not yet been applied to the GDPs, it is not correct to say that no effort has been expended. The staff has been prepiring procedures for applying backfit to the GDPs. In fact, USEC provided comments on the draft that appeared in the Federal Reaister. As for the SRP, USEC states it is unaware of any SRP (other than for l privatization) and felt that an SRP was not now necessary. The staff has expended effort in drafting an SRP that could be used for future renewals of USEC's Certificate of Compliance.

USEC also refers to a table in a December 29,1997, internal NRC memorandum and provided specific comments with regard to the table. This table was not used in determining the 1998 I

annual fees. However some general comments follow: USEC argues that the programmatic effort should not be different among Category lli facilities. This does not recognize that some of

( the regulatory guidance is being revised specifically to address reporting issues at the GDPs. It also does not recognize the necessary interactions with the Department of Energy on HEU down blending, HEU possessed by USEC under DOE control, and the discovery of material above the Category til possession limits at Portsmouth. As USEC points out, the HEU downblending is conducted under DOE oversight. However, there has been NRC coordination activities with DOE to address the HEU project. The GDPs, although Category lli facilities, do l possess HEU as scrap and in equipment. In addition, the location and storage of HEU is not I always well documented or controlled, such as: the recent discovery of HEU in a pigtail at Portsmouth that caused the facility to exceed its Category ill possession limit. USEC claims that each LEU facility handles liquid UF' and that the regulatory effort required to address liquid UP should be the same regardless of the quantity of material onsite. We cannot agree. First, the LEU facilities do not routinely handle liquid UP. In fact, one of LEU facilities does not handle i UF' at all. Second, the volume of liquid UP handled, as well as the manner in which it is  !'

handled, increases the regulatory effort.

In conclusion, after a careful review and analysis of the information you provided , I am unable to conclude that the requirements for an exemption have been satisfied.

1 Sincerely, J Origba! sY,cdby Jesse funds:

Jesse L. Funches Chief Financial Officer Distnbubon (See attached list)

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Distribution: Letter to Steven Toelle. Dated 8/25/98 ,

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