ML20245H102
| ML20245H102 | |
| Person / Time | |
|---|---|
| Site: | Nine Mile Point  |
| Issue date: | 08/02/1989 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| References | |
| REF-10CFR9.7 NUDOCS 8908160311 | |
| Download: ML20245H102 (102) | |
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UNITED STATES OF AMERICA M43 't i NUCLEAR REGULATORY COMMIS SION :% l 1
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Location: ROCKV1LLE, MARYLAND gh AQj;
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NEAL R. GROSS AND CO., INC. ..
Y wk COURT REPORTERS AND TRANSCRIBERS 1323 Rhode Island Avenue, Northwest .g;'p.g" 3 -'
20005 Washington, D.C.
(202) 234-4433 0908160311 090802 #
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'f DISCLAIMER
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This is an unofficial' transcript of a meeting of the United ' States Nuclear Regulatory Commission held *on
.. August 2 1989, in the Commission's ' of fice 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 purpose =. 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 i
. the Commission in.any proceeding as the result of; or
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addressed- to, any statement or argument contained herein, except as the Commission may authorize.
NEAL R. GROSS l.
COURT REPORTER $ AND TRAN5CRIBER$
1323 RHoDE ISLAND AVENUE, N.W.
(202) 234-4433 WASHINGTON, D.C. 20005 (202) 232-6600 l
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. .. 1 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 1
i BRIEFING ON STATUS OF NINE MILE POINT-1 PUBLIC MEETING l l
Nuclear Regulatory Commission One White F] int North Rockville, Maryland 1
- , Wednesday, August 2, 1989 t_b The Commission met in open session, pursuant to n o t :i c e , at 10:00 a.m., Kenneth M. Carr, Chairman, presiding.
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COMMISSIONERS PRESENT:
KENNETil M. CARR, Chairman of the Commission l THOMAS M. ROBFRTS, Commissioner l KENNETil C. ROGERS, Commissioner )
JAMES R. CURTISS, Commissioner I l
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NEAL R. GROSS 1323 Rhode Isinnd Avenue, N.W. )
Washington, D.C. 20005 ]
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STAFF.AND; PRESENTERS. SEATED-AT THE COMMISSION TABLE:
SAMUEL J. CHILK, Secretary WILLIAM C. PARLER, General Counsel WILLIAM DONLON, Chairman /CEO, Niagara Mohawk-
!? JOHN ENDRIES, President,-Niagara Mohawk- -
LAWRENCE BURKHARDT, III, Executive ~V.P., ' Nuclear JAMES WILLIS,-Nuclear Superintendent JAMES' TAYLOR,. Deputy Executive Director for Operations 1
._ THOMAS.MURLEY, Director, NRR WILLIAM RUSSELL, Regional Administrator MARYLEE.SL$SSON, Project. Manager k--
WILLIAM. COOK,. Senior Resident, Nine Mile Point a
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J NEAL R. GROSS l l 1323 Rhode Island Avenue, N.W. j Washington, D.C. 20005 l (202) 231-4433
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hN ' l' P-R-0-C-E-E-D-I-N-G-S 2 10:00 a.m.
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- 3 CHAIRMAN l CARR
- Good- morning,; ladies and 4, gentlemen. >
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5 The . purpose .of today's meeting is. for- -
.6. Niagara Mohawk Power Corporationiand the'NRC staff.to.
7 ~brief the Commission on the current status. of . Nine 8' Mile' Point Unit l '.
9 Nine Mile Point Unit I has been shut down 10 since December 1987. In' July 1988, Nine Mile Point- {
'i 11 Unit, I was identified 'by NRC senior management as a-1 12 plant that the NRC will. monitor closely. In addition, I l
- 13 the NRC issued a confirmatory action . letter LL .J -
14: documenting the licensee's commitment not to restart 15 the unit without NRC permission.
16 Of particular interest .to the Commission 17 today are the status of plans to restart Nine Mile -l 18 Point Unit 3, the effectiveness of Niagara Mohawk's 19 corrective action plans in resolving problems, and the 20 current financial status of the corporation as it 21 relates to the operational safety of the Nine Mile 22 Point units.
23 Copies of today's slide presentation are 24 available at the entrance to the meeting room.
25 Do my fellow Commissioners have any opening
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- i. . i NEAI, R. GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 (202) 234-4433
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1 2 I would like to welcome the representatives !
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3 of Niagara Mohawk here today. I J
4 Mr. Donlon, please proceed with your 5 presentation.
6 MR. DONLON: - Thank you, Mr. Chairman, and {
7 good morning, members of the Commission. 1 8 I am William J. Donlon, Chairman of the 9 Board and Chief Executive Officer of Niagara Mohawk 10 Power Corporation and I certainly appreciale the 11 opport uni t y to appear before you and speak to you this 12 morning regarding the progress that Niagara Mohawk has 13 made in addressing the issues identified at Nine Mile 14 Point Unit I and preparing the plant for rest art and 15 successful 1ong-term operation.
16 Seated with me at the table today are John 17 Endries, President of Niagara Mohawk, Larry Burkhardt, i 18 Executive Vice President of Nuclear Operations; and 19 Jim Wi1lis, General Superintendent, Nuclear 20 Generation.
21 In addition, key members of our operations 22 and support staffs are here today and are available to i 23 answer any questions, 24 I am particularly pleased to introduce to 25 you Larry Burkhardt who joined our staff in the fall NEAL R. GROSS 1323 Rhode Irland Avenue, N.W.
Washington, D.C. 20005 (202) 234--4433
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~d 1 of 1988 and who has responsibility for all of Niagara 2 Mohawk's nuclear activities. Mr. Burkhardt comes to 3 Niagara Mohawk following a distinguished naval career.
4 He's a graduate of the Naval Academy. Larry retired
- 5. after a 32 year distinguished, I might say, Naval 6 career, during which ~he rose to the rank of Rear 7 Admiral. Larry had a significant involvement in the 8 Nuclear Navy program and his last duty assignment was 9 as Deputy Chief of Naval Operations for Manpower 10 Personnel and Training.
11 Mr. Burkhardt will discuss the details of i 12 our program to improve nuclear operntions.
13 Foilowing Mr. Burkhardt's presentation, Jack t.
14 Endries will discuss the current financial situation 15 at Niagara Mohawk and the impact of regulation by the 16 NRC and the New York State Public Service Commission.
17 Before we begin our presentation, I want to l
10 emphasize at the outset that we are fully capable of 19 and committed to financing the improvements that are 20 needed for our nuclear operations and we intend to 21 totally address the needs, not only of Unit 1, but of 22 our entire nuclear operation.
23 As Mr. Endries will discuss in detail, we j 24 continue to have full access to the financial market s 25 and are fully capable of providing funds needed to r-t _._
NEAL H. GHOSS 1323 Rhode Island Avenue, N.h.
Washington, D.C. 20005 (202! 234-4433
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6' L 1 assure safe operations. Even without near-term rate 2 .. relief on the part of the New York State Commission,
[' '3' the company will continue to show a. profit, although I'
'4 must admit-' that - it will be smaller than we and our.
N 5 shareholders would'like to see.
G In . short, we have- the capebility to fund 7 both our near-term- and our long-term improvement i 8 ~ programs, ineluding-our. program.to upgrade and add to 9 our operating staff.
'10 'I also want to- state that everyone at i
11' Niagara Mohawk associated .with the nuclear- program, !
12 from the top down, now recognizes-the significance of 13 .the problems associated with our nuclear program . and 14 the'need for sustained improvement- ,
i 1.5 In performance at Unit 1, we also recognize 16 that while substantial progress has been made as we 17 sit here, overall superior performance over the long- !
18 term can really only be sustained by assuring that 19 fundamental cultural changes have occurred.
20 It was a terrible disappointment to me to-21 recognize that a facility that we once probably ~
22 considered to be an industry leader has deteriorated 23 in performance to the extent that NRC intervention was 24 required. I can assure you that there has been much 25 soul searching by top management on the reasons for 1
NEAL R. GROSS 1323 Rhode Island Avenue, N.W. l Washingt on, D.C. 20005 (202) 234-4433
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l= our fall. As CEO,-I accept' full responsibility for 1
.2 our commitment to return our. nuclear operations to a
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l L. 3~ level of performance that we'can all be.proud of and-
'4 we are taking effective. actions'toward that end, in my .
.5 opinion.-
l 6 We believe we now know what our problems.
7 are. We have committed ' thousands of manhours and 1
8 hundreds of people, from. senior management to the day-9 to-day. operating staff, .to the process of. identifying
-10 and correcting deficiencies in our performance. -Our 11 process has been one of involvement- o'f all levels of 12 our nuclear employees and not solutions dictated from
- - 13 above, b -
.14 We recognize that- the problems are far 15 deeper than mere hardware concerns. We are where we 16 are because we have failed to keep - pace with the 17 continuing changes in our industry and the 18 appropriat ely higher performance expectations that 19 exist. We l>ecame complacent evidently and satisfied 20 with the status quo, one could say.
21 We recognize now that we focused our 22 resources on the completion of Unit 2 to the detriment 23 of Unit I and we recognize that in order to get well, 24 we must continue to make changes to our corporate 25 culture. We must overcome the s e n t> e of complacency.
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NEAL R. GHOSS 1323 Rhode Island Avenue, N.W.
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- 1. We must become better at identifying and resolving .g l
c 2 problems - and we- must hold all of- our managers -
.3 accountable to follow through on commitments. We'must .
t 4 .. communicate better with our worker's and we-must listen 5' to' them.
GL I can report to'you today'that we are making i
7 substantial progress in this regard. Mr. Burkhardt' i l
1 8 will: describe that progress in some detail. But I .
4 9 would like.to-point out that one significant step has .q 10 been the changes in our management staff. We have i
11 substantially added to and reorganized our-management 12 team. I believe our management team is now strong, 13 skilled and capable of running our nuclear operations -
9 14 the way that they should and must be run.
15 I can also report that Unit 2 has been 3
d 16 operating for 98 consecutive days While iotal days I
17 of operation itself is certainly not an ultimate goal.
18 it does demonstrate that we have come to grips with 19 some of the equipment and personnel problems we have 20 encountered.
21 However, I must report to you that we have )
22 had a recent setback with regard to operator 23 requalification at Unit 2. You can be assured that we 24 'will get to the root of that problem and we'll 25 thoroughly eval uai e iis implications with regard to NEAL R. GROSS 1323 Rhode Island Avenue, N.W. l Washington, D.C. 20005 f202) 234-4433 j l
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M; - ~1 ~ Unit .1. 'Mr. Burkhardt will fill ' you in on. those 2 details..
.3 We are, with' regard to our entire nuclear 4- program, not.yet where we want to be and where we are 5 . going to be. 'In fact, .I .
don't believe that we will 6 ever be or should ever be~ completely satisfied with 7 our performance. As I noted,. .there is no.such' thing 8 'a s ~ s t a t u s . q u o in the nuclear. industry an d L w'e realize 9 that=now. Either we constantly work to get better or 10- we will~almost certainly get worse.
11 Nevertheless, I hope t hat' our. presentation
- 12. will be useful.to you and that I can report to you'and p 13 your ' staff shortly that we have made sufficient L.. J 11- progress' such that we will be ready t o- resume 15 operation of Unit 1.
1G I now will ask Mr. Burkhardt to discuss our 17 restari efforts.
18 CHAIRMAN CARR: Thank you.
ID MR. BURKHARDT: Good morning, gentlemen.
20 I'm Larry Burkhardt. You Commissioners may recall 21 that I met individually with each of you in March.to 22 discuss my goals. I 23 I would like at this time also to introduce, 24 in addition to Jim Willis, others of our staff that 25 l've brought here in case you may have a desire or I
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NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 )
(202) 234-4433
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, I reason to question them. Kim Dahlberg, who is the 2 Unit 1 Superintendent; Jim Perry, our Vice President 3 of QA and a member of our restart panel; Ed Hoffman, 4 who is the Staff Director for our restart panel and is 5 normally the Vice President of Non-nuclear QA for 6 Niagara Mohawk; and S ta n Wilczek, who is our Manager l
7 of Licensing and is a member of the integrated team of 8 key managers which is led by Kim Dahlberg, which I'll 9 he discussing as I discuss the status of the restart 10 effort.
11 You may note in your package that you've j 12 been provided an organization chart for reference 13 during the discussion.
14 As Bill has meniloned, before discussing the I 15 status of the restart effort of Unit 1, I wanted to 1
16 address an immediate concern with Unit 2 operator i
17 requali ficalion program. i i
i 18 In the past two weeks, we have experienced j l
19 an unacceptably high failure rate on requalification j 20 exams. Clearly, our training program has been 21 ineffective in preparing our Unit 2 operat ors for i 22 requalification. I was surprised and very i 1
23 disappointed at this. Recent Unit 2 operator j 24 evaluations by INPO and one by the NRC have been l 25 positive. Ilow ev e r , we have found weaknesses in NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
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<.I "J= 1 communication, our.prioritization of actions.and' role-
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2 definition ~in - our . simulator scenarios. _And we have 3 found what . appears to.be improper. time and clarity 4 validation of a written examination. The ' result.' was 5 an unacceptably high failure rate and :an appropriate.
6 characterization of otr training program of being-
! 7 -- ' unsatisfactory.
8 While. the training program i s' 9 unsatisfactory, I 'do not believe the. rigor of the
~10 . examination process is in question. There was- close H 11 agreement in the past two. weeks between our 12 examinati on ' result s and the NRC's parallel grading.
13 So- therefore, I believe that all those we have 14 examined for requalification in the past month are 15 truly qualified and those are the only operators that IG we are using to man ihe plant at this time in a four 17 crew, 12 hour1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br /> shift rotation.
18 We also have commenced remedial action for 19 those who have failed the examination in the last 20 month and we have instituted increased monitoring by 21 management of shift operations and in our four shi f t 22 crews have placed an additional SRO for three SR0s on i
23 each shi f t to make sure that until we have better )
24 established the roles and the priorities, that we do 25 have plenty of SRO coverage per shift.
I O-NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 (202) 234-4433 1
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d 1 We are examining the last crew this week a I
2 that had not yet been examined for requalification and l 3 the NRC staff is participating with us in that i
4 examination. They are, in fact, in the simulator as ]
l 5 we speak. The results of that exa'mination will be 1 l
6 known by probably tom 6rrow afternoon. If they-pass, l 1
7 it is our intention to continue the remediation of 8 those who have failed the examination and also to 9 continue to operate in that four shift rotation until
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l 10 a planned two week outage starts o r, the 9th of j l
11 September. 'l 12 If, on the other hand, Crew D is not 13 successful in passing their requalificatlon, it is our 14 decision to shut down the plant und prepare and ]
I 16 administer with the NRC another requalification ,
- t 16 examination for those who requalified in the last j
17 month on our exam only. We will probably at that j 18 point consider starting the Unit 2 outage next week 1
l 19 and continue the outage while remediating the failures 20 and reexamining those who have passed only a Niagara 21 Mohawk exam. We are not certain that we have all of I 22 the parts for diesel overhaul, and so we may or may l
l 23 not commence the outage because of that. .
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24 Anyway, that's the situation and we're l l I l
25 distressed by it and we're going to fix it. We're in J l
NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 j j (202) 234-4433 '
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1 13-1- full agreement ~ with the NRC staff in their evaluation
, .2 of the.way things are.
3 Turning to Unit l' training, in'May of this 4 year five of six crews and all SRos and Unit- 1 5 '. operators were found to be fully. satisfactory by NRC .,
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,G inspectors i n c a r r y i n g- out ' EOPs . . This was a great- ]
l 7 improvement over.the situation before because this was 8 - one of'the issues which.resulted.in the confirmatory 9 action . let t er, their inability to do that. So, we D
.10 were pleased with that great improvement. In fact, 11 .the inspectors remark / that considering all.that they-12 'had been through, that they were surprised at how well 13 they did.
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14 However, there were weaknesses, weaknesses-15 related to communications and teamwork and in the 16 assignment of responsibilities of the crew. We have 17 clearly defined their role definition. We weren't 18 smart enough to get t hat d e f.i n i t i o n over to Unit 2 in 19 time. Thry have it now. I have been asked in the 1
- 20. inspection report why the communications and teamwork i
21 weaknesses still existed. They were far better than !
22 would have been seen six months before and you don't 23 change those communications and teamwork practices 24 overnight.
25 There's been continual improvement and while 1
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NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
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'they were not up to the. standards we would like to see 2 when they were examined, the fact that five of the six
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- 3. crews.- did' a very successful job indicates 't o me that 4; there was good progress and-we continue to-see further-5- progress L and we'11' press on to make sure that we 6' become excellent in that area of communications and 7 teamwork.
.8 I will now discuss our Unit I restart' 9 effort. .By way of background, in December' '87,. Nine
-10 Mile Point Unit I was shut down due -to excessive
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vibration in the feed water system. During -the 12 shutdown, Niagara Mohawk found and committed io 13' resolve identified problems associataed with the in-14 service inspection program. In the course of the 15 outage, additional technical and management 16 deficiencies were identified both by Niagara Mohawk 17 and by the Nuclear Regulatory Commission. These 18 deficiencies led to the issuance of a confirmatory 19 action letter, 88-17, dated July 24, 1988.
20 The first two conditions of the confirmatory J
21 action letter were:
22 One, determine and document our assessment 23 of the root causes of why Niagara Mohawk's line 24 management has not been effective in recognizing and 25 remedying problems.
NEA1, R. GROSS 1323 Rhode Island Avenue, N.W.
Washington, D.C. 20005 (202') 234-4433
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d Second, prepare a proposed restart 1 action 2 plan which provides the corrective actions for those 3 root causes and submit it to the NRC Region I 4 administrator for review and approval.
5 In accordance with the third requirement of 6 the confirmatory acti6n letter, a written report of 7 readiness of Nine Mile Point Unit 1 for restart will 8 be provided to the regional administrator as necessary 9 actions are nearing completion. This report will also 10 confirm that line leadership skills are sufficient for 11 restart. I will speak about that report a little 12 later.
7 13 As a result of the confirmatory action t . _]
14 letter, a restart action plan was developed. It was 15 developed deliberately and systematically to utilize 16 and build on the existing strengths of the Nuclear 17 Division and support organization of Niagaru' Mohawk.
18 We used input from tbroughout ihe nuclear organization 19 to determine, analyze and propose corrective actions 20 where problems had been encountered and weaknesses 21 experienced. The plan has been enhanced by feedback 22 and buy-in from all levels of personnel, from 23 operations, engineering and support operations. It 24 was also reviewed by the Institute of Nuclear Power 25 Operations.
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NEAL R. CROSS 1323 Rhode Island Avenue, N.W.
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1 Niagara Mohawk's senior management, which 2 has been an integral part of the restart effort from 3 the outset, approved submission of the plan on 4 December 22nd of 1988. Based on discussion with an i S NRC staff restart panel, chaired by Bill Kane, we G submitted a clarifying- first revision to the plan on 7 March 2nd of this year and a limited second revision 8 on July lith to amplify the plan in the areas of 9 standards of performance, chain of command strength 10 and t raining act ions. This revision has been reviewed 11 with the NRC staff restart panel last week rnd e 12 public meeting is planned by them for August 23rd to 13 receive public comments on the plan.
14 The restart action plan cons.t it ut es the 15 short-term actions, that i r. those necessary for 16 rest art of Nine Mile point Unit 1, and represents 17 Niagara Mohawk's commitment to improved performance.
18 A nuclear improvement program has been 19 developed in parallel with the rest art effort. It 20 includes near-term and long-term corrective act ions e
21 across our entire nuclear program for addressing 22 management and organizational effectiveness and longer 23 term programs associated with specific technical 24 issues. This nuclear improvement program is the 25 bridge to the future.
NFA1, R. GROSS 1323 Rhode Island Avenue, N.W.
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17 1 In developing the restart action plant, 2 Niagara Mohawk implemented a systematic approach to 3 assure that issues were identified, and those were 4 both specific issues and underlying management 5 effectiveness issues; that issues were thoroughly l 6 analyzed to determine their root causes; that 7 effective corrective actions were identified which 8 addressed these root causes; that appropriate 9 accountability was assigned such that corrective 10 actions are fully implemented: and that follow-vp 11 evaluations are performed to assess whether corrective 12 act ions - are truly accomplishing the desired change in m 13 performance.
cJ 14 The 18 specific issues are listed in your 15 handout. However, it is more important that I discuss 16 with you the underlying root causes of deficient 17 management effectiveness. These fise underlying root 18 causes are.
19 One, management planning and goal setting 20 have not kept pace with the changing needs of the 21 Nuclear Division.
22 Two, the process of identifying and i
23 resolving concerns and problems was less than 24 adequate {
1 25 Three, management had a technical rather l
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NEAL H. GROSS l 1323 Rhode Island Avenue, N.W. )
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.! 'I 1 than a people focus. J 1
2 Four, standards of performance had not been 3 defined or described sufficiently for assessment and 4 self-assessments have not been consistent or 5 effective. i 6' Five, lack of effective teamwork within the .
1 7 Nuclear Division with support organizations was 8 evidenced by lack of coordination, cooperation and 9 communication in carrying out responsibilities.
10 These underlying root causes formed the 11 overall basis for specifying corrective action 12 objectives which characterize the direction and 13 performance level to be achieved. The plan contains 14 summaries of long-term strategies for continued 15 actions af t er restart. These actions, which are 1G contnined in the nuclear improvement program, will 17 establish levels of performance beyond that necessary i 1B io support safe operation and are therefore not 19 required before restart.
20 Niagara Mohawk recognizes that fully 21 addressing the underlying root causes is necessarily a 22 long-term effort involving, among other things, 23 cultural change. But a comprehensive effort to change 24 the culture of the Nuclear Division is already well 25 underway, as I will describe.
NEAI H. CHOSS 1323 Rhode Island Avenue, N.K.
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Each ' specific issue ..in t he . restart action
'2. ' plan wac assigned!to a Niagara Mohawk.line'mana'ger to.
3 oversee. the analysis, for. root causes with i' participation of line management' fros' other 5 departments and assistance from a restart task force.
6 The same line manager was also responsible for-7 determining corrective and. verification actions. The-8 line managers , in conjunction with the rest art ~ task
~.9 force and an. integrated team of about 20 key 10 responsible managers, assured that proposed corrective 11 actions adequately addressed the issue and that the 12 verifientinn steps provided sufficient evidence of 4- completion.
.J - 13 This review was continued by senior
'u 14 management who provided feedback to the line managers.
15 To assure management follow through on 1G commitments and correct ive actions, each responsible 17 manager was required to establish and commit to 18 completinn dates for his ections and will personally 19 certify satisfactory completion of those corrective j 20 actions.
21 Independent verification is carried out in 22 accordance with the plan. Once verification of a 23 particular issue is complete, the matter is reviewed 24 by the site operations review committee before restart 25 requirements are deemed to be satisfied and before the i
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NEAL R. GROSS 1323 Hbode Island Avenue, N.W.
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e 1 Nuclear Regulatory Commission staff is notified that a L
2 specific action and its verification have been l
3 completed.
4 Our safety review and audit board also 5 conducts independent review of selected completed 6 issues.
7 But we didn't think that was enough and so, 8 therefore, a structured, independent, self-assessment 9 process is being utilized to ensure successful 10 completion of the restart action plan and preparation 11 of the readiness for restart report. We have formed a 12 restart review panel chaired by myself and consisting 13 of Niagara Mohawk senior management, representatives 14 from other nuclear utilities and an outside 15 consultant. We have also requested an INPO assist 1G team restart assessment.
17 The Chief Executive Officer, the President, 18 and the Board of Directors, including its Nuclear I 19 Oversight Committee, part icipat e as well. The final 20 decision regarding the company's readiness for restart 1
21 will be made by the CEO and reported to the NRC Region s
22 I administrator.
23 The purpose of the restart self-assessment 24 is to determine that the corrective actions contained I i,
25 in the rest art action plan have been effective in NEAL R. GROSS 1323 Rhode Tsinnd Avenue, N.W. l Washington, D.C. 20005 l
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I solving:1he problems identified.
. !The' key element of-2,-
t his 'sel f-assessment . processi is the work carried - out 3 by. the restart review . panel and -its : support staff. .
4 Panel- members :have broad , experience .and extensive 5 knowledge of general management practices, ' nuclear-6 operations, m a i n t e rra n c e , engineering,. quality 71 assurance and regulation.
B The panel members are: Mr. Joe Ash, Vice 9 President of Consumer Services for Niagara Mohawk; Mr.
10 Don Hall, Senior V.P., Illinois Power Company; Mr. Joe
=11 Hendrie, a consultant and a former NHC Chairman; Mr.
12 Roger' Kober, President of Rochester Gas and Electric L- 13 Company; and Mr. ' Jim Perry,. the V.P. of Quality 14 ' Assurance for. Niagara Mohawk; and I am on'the panel as 15 Chairman.
1G The panel support staff consists of a. staff 17 director, Ed Hoffman; three assessment area 18 coordinators, 19 primary assessors and 12 19 interviewers. Additional people contribute on an as-20 needed basis. The assessors acted as the direct 21 extension of the panel members. Assessors were chosen 22 who had the knowledge of the subject areas and who 23 were independent of the line function that had direct 24 responsibility for execut ing t he corrective actions.
25 The panel members, ofher ihan myself, l'
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22 1 divided the assessment issues and took personal 2 responsibility to act as advisors to the members of 3 the support staff for the panel for each of these 4 issues. This structure allowed each panel member to 5 focus his attention in areas where his expertise was G greatest.
7 Assessments were started well before the 8 corrective actions were scheduled to be completed.
9 The two main reasons for assessing in parallel to the 10 task activities were to provide early feedback to the Il 1ine organization when the assessment team saw 12 probably shortfalls and to allow the assessors to 13 develop multiple data points so that trends could be 14 observed in the management effectiveness issues.
15 The initial assecament activities started 1G back in March of '89 and have continued since that 17 time, with monthly panel meetings, one of which was 18 joint 1y conducted with our Nuclear oversight 19 Committee In addition to the guidance provided at 20 the formal panel meetings, each panel member, in his l 21 advisor capacity, has met with assigned assessors and 22 task managers to participate in the assessment 23 analysis and the resolution of concerns brought about 24 through the assessment.
25 The pane] members have a l e, o observed work l
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1 activities in the plant and inspected the plant for !
2 cleanliness and material condition. The members have ]
3 observed simulator training at the training center and 4 observed operators in the plant. The panel members 5 have also observed Nuclear Division personnel in 6 various work situations to determine if employees 7 behsvior exhibits the proper skills and attitudes to 8 support improvements in the five management 9 effectiveness areas.
10 The panel members were not easy to satisfy.
Il Those of you who may know some of them would not be 12 surprised by that. We had scheduled a new integrated 13 priority system as a longer term effort and an
"~
14 integrated problem solving program as a longer term 15 effort in the nuclear improvement program and, based 16 on their insistence, we have expedited that and have 17 made considerable progress in those areas.
18 In the management effect iveness areas, there 19 are not absolute, quantitative criteria to rely on to 20 determine adequate progress toward achieving the 21 desired state. In many instances, the panel members 22 looked for the desired behavior being exhibit ed by 23 managers in the more senior levels of the organization 24 and for the required management programs being in 25 place.
i L ._
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] -1 Where;the right-example is being modeled by.
2' 'the senior managers and with 'the standards 'of.
3- performance in place and being given high-visibility, 4' the panel is more confident that the desired behaviors 5 and skills will' become the norm in 'the Nuclear 6 Division. -
7 As the panel finds that the unit' is 8 achieving readiness for -rest art and has draf ted' the 9 required report, INPO will send in an assist team to 10 review our assessments and provide an independent look 11 .at the unit's readiness for restart. This assessed 12 visit is scheduled to occur in mid-August.
13 I will then present our proposed readiness 14 for restart report'to the Nuclear Oversight Committee 15 of the Board of Directors. After discussion with the-10 Oversight committee, the report will'be presented to 17 the Chairman of the Board, CEO, for final approval and 18 transmittal to the NRC Region I administrator.
19 To provide continuing self-assessment, a 1 1
20 permanent, independent assessment group reporting to 21 me has been established. This group will pick up the i
22 lessons learned in the ongoing restart self-assessment q 23 process and use them in the future. Assessments will l 24 concentrate initially on the management effectiveness 25 areas to ensure that the positive momentum achieved to NEAL H. GROSS 1323 Rhode Island Avenue, N.W.
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[ k- 11 dat'e continues.
2 I would now like to discuss ~our progress.
.g
.3 There are several- important- Niagara Mohawk 2 actions 4- that must be completed befork restart. I.will discuss 5 those now.
6 They include completing physical readiness, 7- completing the specific and ' underlying root' cause 8 restart. actions, and submitting- the. readiness for 9 rest art report . The bulk of the physical work, such 10 as in-service inspection, is completed. System 31- testing is in progress, refueling is scheduled for
-12 August and the physical plant readiness for restart is
- - 13 planned f'ro October.
L
- 34. As of last week, about two-thirds of the 15 specific issue corrective actions have been comp]eted' 16 and signed off and - aboat_ one-half of the underlying 17 root cause issues have been completed and signed off.
18 We hope to submit the readiness for restart report in 19 late August, but in any case we will cubmit it only 20 when we are absolutely sure we will be ready for 21 restart.
22 l'd like to give you some physical examples 23 of the work that's been done and remains to be done. -l 24 -We have completed since December of '87 some 10,000 25 work requests. We have 388 left to go for reload and l'
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NEAI, R. GEOSS 1323 Rhode Island Avenue, N.W.
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26 1 about 1,000 left to be signed off before restart since 2 we're concentrating on the reload issues. We see 3 those being completed in accordance with the schedule 4 we've talked about. We've completed some 8,000 5 inspections and tests, including over 3500 ISI 6 inspections. There remain only four ISI inspections 7 before reload and 100 before restart that cannot be 8 done before reload. That's sort of where the status 9 is on the physical work to be done.
10 The underlying root cause/ assessors and the 11 panel members believe that substantial progress has 1 12 also been made in those areas, but we are continuing 13 to assess and check that progress. The foundation for 14 that belief is the changed behavior being modeled by 15 my direet reports and their managers. Some examples of 1G si gni fi enn t improvements are as I mentioned. There's 17 a draft Nuclear Division priority system already 18 developed.
19 Tenmwork has improved significantly, 20 especially in areas where it had been poor, between 21 nuclear generation and nuclear engineering. There ;
22 have been off-sites between those two groups. l 23 The concept of working to and being judged 24 by a standard, the Nuclear Division standards of 25 performance, is gaining wide acceptance. The uni fi ed NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
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J 1 methodology for following a problem from 2 identification to implementation is being developed by 3 a team from across the division and is being used in ;
i I'
4 the restart effort.
5 I have held two series of what we call town 6 hall meetings. Those are ten, two hour sessions with 4 7 every employee in the Nuclear Division and all the i 8 support employees. I conducted the first series in 9 December of '88 and the second series in June of '89. l t
i 10 1 can tell you that the difference in attitudes, j Il questions and comments was very marked between those j i
12 two meetings. There was a tremendous improvement in I
- 13 each one of those areas and the questions turned from L .__ }
14 irritants to those things which can be done to help us 15 improve the operation.
16 At that town hall meeting, I addressed in I 17 great detail our new standards of performance. At 18 this time I'd like to en11 to your attention the small l 1
19 cards that have been handed out to you Commissioners.
I 20 These cards are wallet cards which each member of the 1 21 division is expected to have in his wallet or, as Jim 22 Willis does it, in his shirt pocket so it will be l J
23 close to his heart. They include a vision statement.
24 a mission statement, our objectives and goals and they .
1 25 also include these standards of performance. The d
i !
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1 vision, mission and goals tell us what it .'i s -. we ' re 2 trying to~ accomplish and.the standar'ds of performance
- 3. tell us how we.want to achieve . them. .They are the 4 mirror by'which we measure our performance.
5 I ' have seen r e p e a t e d l'y ,. . a n'd _ t h e assessors 6 have seen and reported these. standards of performance 7 being embraced across'the division from top to bottom.
8 In June I attended a' conduct of.' operat ions s 9 briefing with the operators. . As they' were ' talking 10 about professionalism in operations, the instructors 11 were, 'the' operators. broke out their standards of 12 performance to see if the instructors knew what- .t hey .
13 were talking about and it turned out, of course, that
~14 what t hey were talking about matched pretty well what 15 was in our standards'of performance.
16 A first line 'supervi sor reported that he-
. 17 keepe them on his dresser at home. Jim Willis, as I .
i- 18 said, carries them in his shirt pocket. Managers are 19 asking their direct reports to call them on failure to 20 exemplify these standards of performance. I even got 21 questioned myself after losing my patience one day as 22 to why I hadn't demonstrated professionalism in that 23 regard.
24 So, it's a very healthy thing and the 25 standards are far more demanding on the management l
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1 than they are on the troops and they recognize that i 2 and it gives them a way to deal with their managers 3 and say, "But, Manager, you don't seem to be doing 4 like it says in this little card here. Why aren't you 5 listening to us? Why aren't you getting our ideas?" j l
6 I would encourage you to talk to some of the other 7' people here, particularly Ed Hoffmen, who's done a lot 8 of interviewing as the staff director of our restart 9 panel, to see what short of impressions they've had of 10 these standards becoming not just written on a piece 11 of paper but engraved on people's hearts.
12 At any rate, in summary, I believe, and
~q 13 Niagara Mohawk believes, that we have fulfilled the ud 14 first two steps required by the Nuclear Regulatory 15 Commission's confirmatory action letter for the 16 restart of Nine Mile point Unit 3. The company has 17 established a comprehensive program to correct 18 identified problems in improved performance, drawing 19 on past successes, learning from past shortcomings and 20 utilizing a comprehensive self-evaluation process.
21 The restart action plan is being carried out 22 with the assistance and input from various levels of 23 personnel in the Nuclear Division and senior 24 management. Root causes have been identified, 25 corrective actions established, verification l
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30 i L 1 activities planned, and long-term strategies outlined.
l l 2 The completion of those activities identified in the 3 restart action plan and their thorough verification, i 4 review, assessment and acceptance by all levels of
]
i 5 Niagara Mohawk personnel, will be effective to prevent .)
G recurring problems and permit a restart readiness 7 determination by the company.
l 8 And then, the nuclear improvement program is j 3
9 the bridge to long-term effectiveness and our vision 10 to one day be the best.
11 In conclusion, we have made considerable 12 progress. We have en aggressive, success-oriented 13 schedule, but we will assure ourselves that we will be 14 ready for restart before we submit the readiness for 15 restart report. We will be back to update the 1G Commission after that report is submitted. !
17 1 am aware that Commissioner Curtiss is 18 planning t o visit Nine Mile Point in late August and I 19 invite the other Commissioners to visit also and see 20 our progress first-hand, if your schedules permit.
21 Thank you very much. I'd like to turn it 22 over now to our President, Jack Endries, to discuss 23 the financial situation.
i 24 MR. ENDRIES: Thank you, Larry.
25 Good morning. I understand that you have an i
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'1 interest in our financial ' situation. and, in addition i q
2- related to; that, some , views that we - have concerning 3 .the' state and federal regulations of the company.
4 As far as the federal and state regulation-5 of - our . operations, o u r'.' s i t ua t i on' is one illustration 6i o f. a . generic 1 issue, ~ which undoubtedly. impacts each 7 plant, a1though you have ' jurisdiction,. albeit that' 8 each one.'would be a little different, some more subtle
~9 'than others.
10 Of course, accountability of the regulated.
11 utility is of overriding importance. Niagara Mohawk 12 ~ readily- acknowledges and willingly accepts its-13' responsibility to be accountable to the public through t.
'14 'both federal and ' state regulat ory . bodies. Niagara 15 Mohawk expects to be subject to regulation, on one 16 hand for safet y - and on the other hand for economic 17 matters.
18 Let me briefly discuss the substance of ihat 19 economic regulation, particularly as it applies to our 20 nuclear operations. During the construction of Nine 21 Mile Point Unit 2, the company was subject to a cap on 22 the const ruct ion costs imposed by the Public Service 23 Commission.
24 COMMISSIONER ROBERTS: When was that i
25 imposed?
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- 1. MR.-ENDRIES: In the early 1980s. The. plant U 2 -was completed in 1988, but the ' cap ' was initiated in 3 the ~ early- 1980s. - -That cap evolved into . a' set tlement ou
'4_ agreement. in : 1985 that resulted in Niagara ' Mohawk's-
'5- shareholders- absorbing, ultimate 17, over $800 million 6 in construction costs. I' would 't ote, however, that>
7 - neit her ' unit ~, Unit. 1 or 2, is subject to : specific 8 -performance. incentives.
-9 Under the New York scheme' of regulation,-
10 plant. operation, except fuel, maintenance and 11 investment- costs, are projected in rates. Variances 12 from projected costs are generally absorbed by
-13 ' shareholders. . Projected. fuel costs --
.14 CHAIRMAN CARR: Would you repeat.that?
15 MR. ENDRIES: Sure. The' operation expenses, 16- excluding fuel, maintenance and i n v e s t.m e n t costs, are 17 projected in rate cases. You're going to haggle over 18 the projections, but once the projections are 19 established in rates, whatever happens in the way of 20 actual results are absorbed by shareholders. In other 21 words, their rates are specifically set for a given 22 period of time.
23 The fuel is handled somewhat differently in 24 that we have a fuel adjustment clause. So, projected 25 fuel and purchase power costs are used in establishing NEAL R. GROSS 1323 Rhode Inland Avenue, N.W.
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- 1 a . forecast. 'But actual fuel ' and replacement- power 2- costs are generally recovered'..in rates through. the j
'3- fuel' costs. So, generally speaking, while ' there's ' ,
4 some incentive arrangements that ' relate to the fuel !
5 . cost, most . differences are adjusted monthly ' through 6- the fuel adjustment clause.
7 Now, there is an'important exception that's
'8 existed-.related to Nine Mile i replacement power costs 9 from. January 1st of 1989 through June 30th. I'll be 10 talking more about that in just a-few minutes.
11' COMMISSIONER ROBERTS: Do 'you have any 12 service area outside the State of New York?
- 13 MR. ENDRIES: No, not subject t o New York Lu-
.14 regulation. .We have a rather small service, electric 15 uti1ity, in Canade, just over ihe border into Canada,
- 16 near Niagara Falls. But most of our operations are in 17 New York State, Upstate New York. We have both gas
- 18 and elect ric service that we offer.
39 In addition to the rate cases and the 20 projects thnt are made for that purpose, the company
+
21 .is also subject to prudence evaluations, with 22 imprudent 1y incurred costs being absorbed .by 23 shareholders.
24 COMMISSIONER ROBERTS: Imprudently as i
25 determiraed by the public Service Commission? i i
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- ): MR. ENDRIES: That's correct. Yes. After l.
1 2 an investigation is made, generally speaking, with 3- t'es t imony and hearings and that sort. of thing, they j'4 reach a conclusion that could be appealed in the 5 courts. But basically, they make the. determination.
6 CHAIRMAN CARR: Is- that - a. review of the 7 maintenance operating and' investment costs then?
8 MR. ENDRIES: Yes, as well as fuel, 9 CHAIRMAN CARR: So, they --
10- MR. ENDRIES: Every part of our operations.
'll CHAIRMAN CARR: _So, it's a review of the
- 12' contract they've already made with you.
13 MR. ENDRIES: I suppose you could look at'it' 14 that way, yes.
15 CHAIRMAN CARR: How well you've executed it IG perhaps?
17 MR. ENDRIES: Yes. The standard of prudence 18 is applied in that situation.
19 CHAIRMAN CARR: Okay.
20 MR. ENDRIES: As far as our financial 21 situation, I can state with full c c,n fi d en ce that we 22 fu]Iy expect to be able to finance the costs of our 23 nuclear ope r a t .i on s and planned improvements.
24 Let me provide you with a brief overview of )
25 our financial situation. At the end of last year, as t
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35 g ~ ~3 F .1 I f. mentioned, Niagar's Mohawk agreed- .to suspend l[ -2' collection 'of _$225,000.00 a day ~ o f' Nine Mile 1 it
[' 3' replacement power costs until June 30th or the return 4' of Nine Mile 1 to. service' if that were to occur P 5- earlier. Of course,- the unit is atill out of service.
'6 We hope, however, to resume full recover.y of 7 replacement power-- costs shortly. In New York, 8 collection of replacement power costs through the fuel
, 9 ~ adj.istment clause is subject to' refund the customers, E
- 10. as I mentioned, 'if the fuel costs are subsequently-
'11 found.to have been imprudently incurred.
12- In- addition to foregoing - these replacement' e- 13- power costs of Unit 1, we have been incurring extra
~
14 expenses related to operation an'd . main t enance as we 15 work to get the unit back into operation. These have 16 been running above the normal levels that were
- 17. projected to take place when our elect ric base rates i
18 were set some time ago. These extra expenses . have -
19 been running at a rate of about $5 to $6 million per j 20 month.
21 As a result of the replacement power costs 22 being absorbed and the extra operation and maintenance 23 expenses being absorbed, our earnings and cash flows 24 and interest coverage, which is important to our 25 credit ratings, have severely dropped. The company r-1
.i NEAI. H. GROSS 1323 Rhode Island Avenue, N.W. j Washington, D.C. 20005 1 (202') 234-4433
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. h a s p e t'i t i o n e d. the PSC to allow the recognition .as
'I 2' revenue'of.a' portion.of a pension l fund settlement that 3 produced an $83 million gain and a property tex refund.
4 of about $5 million.
,5' In addition, the company plans to file on 6 August 4th, so that's this Friday,.a rate. case. seeking 7 an increase in rates of about $370 million, effective 8- July. 1,- 1990. So, next summer. There is .the 9 possibility that the rate request might > be settled 10 without' litigation. Normally a rate case takes- 11 11 . months to decide. So that's why the rates wouldn't be 12 effective until July 1, 1990. But it may be settled 13 without litigation.
14 In addition to attempting to improve Niagara
' 15 Mohawk's financial situation through the PSC, we've IG taken ot her steps. For example, we have negotiated 17 bank credit 1ines to exclude Nine Mile 1 outage 18 expenses from the coverage tests, the interest 19 coverage tests that I mentioned earlier, necessary to 20 qualify for the credit. As a result, we expect to 21 have continued access to our bank credit.
22 The company current has access to the 23 financial markets and while the terms of that access !
24 may worsen in coming months, we do not expect to lose 25 that access.
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U l' l' We've?recently deferred a decision"on paying i.
- 2 our third : quarter dividend. 'to ' common. shareholders.
3 Even if we ultimately decide not to pay it,,we do.not
- 4. foresee an inability to ; finance. There'may be some 5- ' impact : on. the' price of our stock and perhaps o n .' t h e 1 '
- 6. rating of: our debt,-but we are confident that we.will s
-7' have: access to the funds'tha't we need to carry out our 8 responsibilities, including those relating-to nuclear 9 ' operations.
10 The PSC's. statutory authority to exercise 11 general supervision of all electric corporations in 12 our state .is extensive. As it applies to nuclear 13 - operations, the PSC has a presence both at the site-
~~
14 and at Niagara Mohawk corporate headquarters and our
- 15 other offices. These PSC. representatives have access.
16 to substantially all documentation at the facility.
17 The PSC representatives also have access to all 18 employees at the site and meetings of the company 19 involving the nuclear units.
20 As you may know, the PSC staff, the Attorney 6
21 General, and the Consumer Protection Board in New York 22 State all are routinely copied on correspondence from i 23 the Nuclear Regulatory Commission.
24 There exists a basic tension between the 25 requirements of NRC regulation and state regulation.
I
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.I p 1 The' NRC's- regulatory structure and enforcement t.: 2 philosophy is~largely prospective in its approach. It 3 seeks to encourage ! 'a- utility _ to ' be self-critical and'
- 4. completely open . about its shortcomings' and errors so 5 that root causes 'may be determined and corrective 6 action initiated.
7 The role of the state regulatory . body has
~8 tended to be both retrospective, in an effort to 9 . insure the regulated company does not benefit 10 financially -from imprudent acts, and prospective.
11 Compliance with the NRC's regulatory philosophy often
- 12. .. r e s u l t s in a documentary record that may occasion.
13 financial penalties being imposed by the state 14 regulator.
15 Certainly, Niagara Mohawk, as 'a matter of.
16 policy -and practice, does not and will not sacrifice 17 compliance with safety regulations to protect itself
.]8 financially. To be frank, there probably always will 19 be a tension between this state and federal 20 regulation, the dual regulation that we encounter. We 21 do have discussions underway with the staff of the 22 state regulators to see how we might reduce that l
23 tension.
24 In summary, Niagara Mohawk is confident it 25 can continue to assure that protection of the public NE AI, R . GHOSS 1323 Rhode Island Avenue, N.W.
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!n. 41 'I health and safety, improve .-its performance, and meet,
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- 2 NRC expectations while still satisfying the' mandate:of- ..
3' the Public Service Commission ~ to prot'ect the. rate- 1 1
j-) 4 payers.
' 5 .. Thank you.
[I- 6' COMMISSIONER CURTISS: 'Is that contingent.
-7 upon ' achieving or realizing any or all- of -the-8 contingent steps that. .you- . identified, the- rate
- . . i 9- request, the pension settlement, the property tax
.10 treatment? Or irrespective of those prospective 1 1 '- actions, do you siill have that confidence?
'12 ' MR. ENDRIES: Well, we feel, based on.our-
- 13 present expectations for the unit return to' operation 14; .and so forth, that even without these short-term
'15 relief measures, we'll continue'to have access to the
'I G financial markets and so forth that we'll need. We 17 may suffer, as I indicated, some worsening in the 18 terms if our credit rating were to be lowered and so 19 forth, it may be more costly to borrow, I expect that 20 it would he, but we would still have accesa.
21 CHAIRMAN CARR: Is the $250,000.00 a day i
22 that was from January 1st to June 30, is that a given 23 that ihat's atopped and no longen being charged?
24 MR. ENDRIES: It's not a given. Maybe I 25 misspoke. Just to be precise, it's $225,000.00 a day.
'~
't .i
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-1 But that was withheld and not. billed to customers and 2 put aside, not recorded as any income to the company 3 on the possibility that it might ultimately be billed.
4 But it is possible, I'll say theoretically possible, 5 that that money even could be billed to customers if j 6 we undertake a prudence investigation'and are able to 7- defend ourselves fully.
8 CHAIRMAN CARR: I guess my question is, 9 after June 30th, you can bill it to customers? Is 10 that a given?
Il MR. ENDRIES: Well, it's not a given. The 12 agreement indicates that after June 30th we should be i i
13 able to. But as a practical matter, we expect the 14 Public Service Commission to address this matter and 15 we have discussions underway dealing with it now.
10 CllAIRMAN CARR: Okay.
17 MR. DONLON: Well, I mighi conclude, 18 centlemen, by stating that om behalf of Niagara 19 Mohawk, I would like io thank you for giving us the 20 opportunity to make this presentation this morning.
i 21 We have tried to give you a balanced and realistic l 22 appraisal of our problems, why our performance 23 deteriorated, how we evaluated and grappled with those 24 problems and formulated a plan io overcome our 25 weaknesses.
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I. 1 As you have heard today, we have made 1
2 considerable progress towards our short-term goal of restant 3 n o'st- of Unit I and our longer-term goal of nuclear 4 excellence. We are not there yet and we are not going 5 to come to your staff for permission to restart until 6 we have satisfied oursolves through a rigorous, in-7 depth process that we are ready. ,
i 8 The final decisions as to whether the j 9 restart report should be submitted and whether we are 10 ready are --
indeed, will be mine. These are l 11 decisions I will not take lightly. I can tell you 12 that we are committed to do everything that is ;
l 13 necessary to reach our goals, both the short-term goal t
14 of resuming Unit 1 again 1o service, and our long-term 15 goal of sustained, superior operation where our total 1G nuclear operations are concerned.
17 From a financial perspective, as Jack has 18 indicated and as I did also, the company is capable of 19 fulfilling all requirements to assure safe operations 20 in pursuing full implementation of its nuclear 21 improvement Irogram.
22 I assure you that my commitment to fund 23 these programs will remain our highest priority.
24 Larry Burkhardt and our nuclear managers will have 25 sufficient financial resources so that they can I
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42 I accomplish their jobs.
2 Let me also assure you that we will continue 3 to meet both the letter and the spirit of all 4 requirements for safe operations. We will continue to 5 be up front with the resident inspectors, with the 6 region and with headquarters in reporting problems and 7 in discussing issues, all without regard to whether 1 8 any prudence issue might ultimately arise. There is 9 no other way that we can realistically operate.
10 We hope to return to this table in a 11 relatively short time to tell you about the completion 12 of our restart process and to present the reasons why 13 we believe that we will be ready for restart. In the 14 meantime, the company will leave no stone unturned in 15 assuring that it meets all regulatory and self-imposed 16 requirements for restart.
17 Again, I thank you for your time and your 18 attention and we certainly would welcome any questions 1D ihat you may have.
20 CHAIRMAN CARR: Thank you, sir.
21 Commissioner Roberts?
22 COMMISSIONER ROBERTS: No questions. It 23 seems to me you've been forthright and candid about 24 your previous shortcomings and problems and I 25 certainly wish you success in achieving your stated NEAL R. GROSS l 1323 Rhode Island Avenue, N.W.
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2 MR. DONLON: Thank you, Commissioner.
3 CHAIRMAN CARR: Commissioner Rogers?
4 COMMISSIONER ROGERS: Yes, I've got a number 5 of little things that I'd like to hear a little bit 6 more about on.
7 A general comment. I didn't see your latest 8 SALP until just a little while ago. While, of course, 9 it does deal with a prior period, there are e number 10 of things in there that gave me considerable unease.
Il I considered it very bad.
12 MR. D 0NI.O N : We did too.
1 13 COMMISSIONER ROGERS: It's the kind of--
~
. I 14 some of the things that were in there, I just -- it 15 kind of curled my hair. In terms of operator 1C attitudes toward training, the ability of experienced 17 overni ors to not understand or fo]Iow emergency 18 operating procedures and, in general, just indications 19 of a very had attitude of experienced operators toward 20 their responsibilities. Their behavior during exams, 21 kinds of things that absolutely have to be rooted out 22 and changed without any question. One wonders in 23 reading that whether we're not seeing another Peach 24 Bottom siiuation developing.
25 So, of course, t h i u, is a review of the past i
- i. _
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- 1 - and not necessarily of the present and . certainly,- 'I -
2: hope, not of the future. So I' suppose it's really not.
3 of great' point to try-to go specifically on each of 4 'the points of deficiency '. in the SALP, but simply . to' 5~ register, a very- strong concern .over the operator 6 lq6estion and mana'gement oversight of operators.
7 The . comment that Unit 'l' operators during-8 this assess 6ent period' .were not - attending the 9 requal.ification classes as required was' mind boggling.
-10 Senior management was not -insuring that- all.
Il requalification requirements were completed prior to
-12 submitting licensed operator renewal applications.
13 Where were they? Where were.these people?
14 There's no point in my reading through th'e 15 -list, but~the tone of it is something that's extremely 16 : disquieting. As you know, it isn't cany to get into a 17 bad situation. It takes. time and it takes time to get
- 18. out of it. I hope that somehow we can -- when the 19 time comes with all of your good work, which is very 20 impressive and very well presented -- when the time 21 comes for you to come before us again towards restart,
' 22 that somehow this question of attitudes of the people 23 who are going to run the plant ia the control room, 24 can be addressed in a way that gives us confidence 25 that that. problem really has been dealt with.
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__._. 45 1 MR. BURKHARDT: I'd be pleased to address 2 some indications of good progress in that area now, if 3 you don't mind. There was a special team inspection 4 that was conducted in February and early March, which 5 is just about the end of the SALP period. There was 6 an operator who displaped a completely unprofessional 7 attitude in the classroom and was removed from 8 operator duties. I personally talked to every one of 9 the operating crews and every manager and supervisor 10 af t er that. Shortly thereafter, we have an INPO 13 evaluation, site evaluation, in mid-March and a 12 corporate evaluation in early April. We were actually q 13 commended for attitudes in that INPO evaluatio.n In ud fact, the special team inspection in the first two 14 15 weeks commented on strongly positive attitudes but not 3G specifically in the operat or area. So, I think that 17 that clearly is an accurate portrayal of the situation 18 as it was.
19 In May of this year, when your inspectors 20 came in to inspect the Unit 1 operator's proficiency 21 in conducting the E0Ps, an area which they had been 22 unsatisfactory in as mentioned in the SALP, they found i 23 that not only that five of the six crews were fully 24 satisfactory, but I questioned them at some length at i
25 the exit and they found no indications of anything but i l 1 u -
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46 I professional attitudes and good cooperation between 2 training and operations, which was also noted by INPO.
3 ) So, while I'm the first one to say you don't 4 change attitudes overnight, I can tell you at least 5 this, that the behaviors have changed and the 6 operators know from me that if they demonstrate those 7 attitudes, that I'm going to pull their jersey and 8 pull them off the field. I said it to them in those 9 words and we've already demonstrated it with one of 10 them. I think they've gotten the message, but they 11 needed to get it. So, there's nothing wrong with that 12 report. It's just that it ended in February, before 13 we even issued our schedule of actions for the restart 14 netion plan.
15 COMMISSIONER ROGERS: Well, it's just as 1G you've said, that behavior can change, you can change 17 behavior immediately, but attitudes are something i
18 underlying, they're underneath that --
19 MR. BURKHARDT: Cultural change.
20 COMMISSIONER ROGERS: -
that take much 21 longer to address.
22 I think that it is a matter of grave concern 23 because it isn't easy to change those and you've got a 24 work force there, you've got a trained professional 25 force of operators you've got to deal with. The whole NEA1 R. GROSS 1323 Rhode Island Avenue, N.W.
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i 47 I I I d 1 culture of that group has to be somehow or other 2 register totally differently from --
3 MR. BURKHARDT: If you would permit me, I'd 4 like to ask Kim Dahlberg, who is the Unit 5 Superintendent, to talk about that because he's with 6 them constantly.
7 COMMISSIONER ROGERS: I think it's worth our 8 hearing.
9 CHAIRMAN CARR: Go to the microphone and 10 identify yourself, please.
Il MR. DAHLBERG: Commissioner, I'm Kim 12 Dahlberg, the Unit 1 Station Superintendent. It's 13 been -- I guess my anniversary has come and gone. It
- t. . d 14 was August 1st when I took over as Station 15 Superintendent Unit 1. My background was in 30 maintenance. I was Maintenance Superintendent for 17 nine years for the site.
18 One of the items that I first started 19 noticing was the attitudes of my operators. ]'ve 20 spent many hours, four hour sessions, with a number of 21 groups of my ops, management. Not only my SSSs, my 22 station supervisors, but their leaders as well.
23 talking about change and talking about as we go 24 through this change that it is emotional, that there 25 is anger, there is fear of the unknown, that it's ,j u s t I
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{' 1 1 normal to have those; emotions,'and that we're going to I J
2' go through . it together and that it's going to take.
l 3 some time. Like you said, it 'doesn't~.get changed '
14- overnight. Behaviors'do get changed.
~'5 I had an experience a couple weeks ago where G, I.had one of my. senior Osos over in the simulator. He
.7 had'one of his. reactor operators on the board.and they 8 . we r e .. go i n'g through a scenario. .One of the a r e a s ' t'h a t
'9 . we've been working on is feedback and communication.
- 10. The- operator, at . the same time he manipulated -- 'I 11 think ' it .was' either a pump or a valve, mentioned'to f12 his SSS that he was doing it. At that time, the SSS 13 corrected him and said, "You need to make sure you'1et 14 me know prior to you manipulating.a pump or a valve or 15 turning it on or off."
1G Over in the corner, a few minutes after, 1 */ that CSO went over to his E-man and reprimanded him.
18 and said, " Don't you ever, ever turn on a pump or 19 valve without you letting our leader, our SSS, know."
20 He was a senior CSO, a peer, that did that to him.
21 I dare say a few months ago that wouldn't 22 have happened. That's just one example of numerous 23 examples that I've seen. But like you said and Larry 24 said, it's going to take some time to get to the point 25 that we want to fet to.
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1 1 COMMISSIONER HOGERS: Well, w21st we see is, 2 we see the effect --
the operators displaying a 3 certain attitude and so on and so forth. But we know 4 that that came about by a management deficiency.
5 MR. DONLON: No question.
6 COMMISSIONER ROGERS: That that's where 7 you're seeing it and that attitude has to be changed 8 to those folks. But they weren't necessarily 9 responsible for the creation of the environment that 10 had led to that.
11 MR. DONLON: Not at all.
12 COMMISSIONER ROGERS: So, while it's easy
- - 13 for us to point to the end effect and decide that t
14 ihai's a problem t hat has to be changed, that isn't 15 necessarily the root cause of that problem.
10 MR. DONLON: Ti st art s at the top. That's 17 why this is his first anniversary as the station 18 superintendent.
19 COMMISSIONER ROGERS: Someplace there's a 20 management deficiency that led to that, either in 21 resentment against management or some wrong signals or 22 whatever it was that led to that and the correction 23 has to involve much more than the operators 24 themselves.
l 25 MR. DONLON: That's right and it has.
f l
t -
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50 1 There's a whole new staff leading that unit now.
2 COMMISSIONER ROGERS: I was also concerned
- 3. about the deficiencies in engineering performance.
4 Very disquieting. I wonder if you can say something 5 about that, at least as mentioned in the SALP on pages 6 31 and 32. There were comments of inability of the i
7 engineering department to consistently deliver quality 8 work. It isn't that they couldn't, but they just 9 didn't do it. Again, apparently, inadequate 10 management oversight of the engineering function.
11 So, I'd like to hear a few words about what 12 you're doing there and also I'd like to ask do you 13 have a systems engineer program and are you using 14 that? How does that possibly relate to this problem?
15 M2. BURKHARDT: With regard to engineering, 10 there were serious deficiencies in engineering support 17 of operations. One of them has been remedied by 18 establishing a site engineering function because the 19 engineering offices are about an hour's drive from the 20 plant. That has been very, very successful in the 21 support of our restart efforts.
22 Jim Willis is establishing, and we have l
23 established positions for and are hiring people for l 24 system engineers within nuclear generation, what 25 you're talking about there. We also are gcing to have NEAL R. GROSS 1323 Rhode island Avenue, N.W.
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J l system design engineer expects back at the corporate 2 engineering functien.
3 But it is true that the engineering 4 leadership and the proper management of the 5 engineering function was less than adequate. If you 6 look at our restart action plan and our nuclear 7 improvement program, which is an internal document, 8 you will see many actions to improve that.
O I have been personally involved with the 10 Vice President of Nuclear Engineering and he very 11 readily admits the shortcomings that occurred before.
12 He's doing better. His people are doing better.
-; 13 Part of our problem is there was an L . _]
14 excessive reliance on the AE to do the engineering 15 functicn. We have more contractors than employees in 16 our Engineering Depa rt ment and we're trying to wean l 'T ourselves away from that. There's a learning process 18 for some of those managers who never have really 19 properly managed before. But we've seen marked 20 improvement. They are trying very hard, but they're 21 still learning and it will be a while before they 22 learn.
23 We're bringingt in some experienced advisors, 24 sort of sea daddies, is what we would call them in the 25 Navy, to help them during ihis process of getting up i
t _
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_ 1 -to speed. They were in.over their head a little' bit.
U 2 There'sino question about. that. They did good' work, 3 lbut they didn't manage their work' well. enough such 4 that the prioritization was right and that. was- the
.5 biggest problem. It was ' not so much that they.were 6' .doing poor work. It's just that they were trying to 7 so hard to do everything, that they.didn't have their' 8 priorities correct.
9 He ' was also assigning managers as project 10 managers and leaving them as absentee managers'in the 11 . organization where they should have '_been managing-12 rather than raising up another manager to take that 13- over,- because you can't have an absent ee manager.
14 He's learned those lessons and we've seen some marked 15 improvement there. But it was, I'd say, the most 3G difficuli area we had to get the management
<17 improvement, was in Engineering and we still have a 18 long way to go.
39 COMMISSIONER ROGERS: I think someone
- 20 mentioned it a little bit, perhaps yourself, 21 engineering participation in the ISI program.
22 MR. BURKHARDT: They'.re in charge of it.
23 COMMISSIONER ROGERS: Well, I think this 24 isn't the place to try to go into details on that.
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b- 1 participation is in setting ISI procedures.
2 MR. BURKHARDT: Very. Very much so. ,
3 COMMISSIONER ROGERS: It's very important.
4 MR. BURKHARDT: Yes. The project manager 5 for ISI is a direct repor't to the Vice President of 6 Nuclear Engineering and we'd be glad to brief you on 7 our ISI program. It's one of the specific issues in i 8 our restart action plan and one that has been assessed
, 9 very carefully by Doctor Joe Hendrie, as a matter of 10 fact. He's the one that's been assessing that area.
11 MR. DONLON: Commissioner, you did question 12 whether we had implemented or are planning to a system 13 engineer concept.
14 Larry, you may want i o --
15 MR. BURERARDT: I did mention it.
10 COMMISSIONER ROGERS: You did mention it, 17 yes.
18 MR. BURKHARDT: How many do you have 19 manpower?
20 MR. WILLIS: We have approximately 20 now l
21 and we would expect that we'd add another 25 or so in 22 1990.
23 MR. BURKHARDT: For botb units.
24 COMMISSIONER ROGERS: All right. I didn't 25 hear any w o r d r; on the fire protection sit uat ion. That i
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54 I was in decline during the SALP period. Are you 2 addressing that?
3 MR. BURKHARDT: That is a specific issue in 4 the restart action plan and has been well addressed, 5 verified and assessed.
6 COMMISSIONER ROGERS: Okay. Your little 7 booklet is very nice, very interesting, it looks 8 excellent. I haven't read it'in detail --
9 MR. BURKHARDT: I would encourage you to 10 read it.
1] COMMISSIONER ROGERS: -
since it was 12 presented to us, but it looks like a very fine 13 initiative. Just along these lines, what is the 14 status of your operators having developed and signed a 15 professionalism code? Has that been done?
16 MR. BURKHARDT: Yes.
17 MR. WILLIS: Yes, that was developed --
18 MR. BURKHARDT: That was done before.
19 MR. WILLIS: That was developed, oh, about 20 the April, May, June time frame of last year.
21 MR. BURKHARDT: But it's more important to 22 me that we all live by a code.
23 COMMISSIONER ROGERS: Oh, absolutely.
24 Absolutely. No question about it. But I was just 25 curious about that because that's a focal point very NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
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- 1- of t en - of this kind of activity becauseJin more plants s
2 -that I've' visited ' the operator-developed, internally 3 developed, a code of professionalism is up next-to the 4 control room with everybody's. individually. signed copy; 5- of'it, including.usually top management as'well.
6 Turning to the question of regulation 'that .
7 Mr. . Endries - raised, I wonder if you could'be so ~ good 8 as to send us any kind of examples of si tuations. in 9 which there is-the possibility of some kind of a~ state
- 10 ' disagreement and adverse financial consequence to you 11 by ihe- State Public Service Commission' that is in 12 conflict with an NRC initiative or regulation. I'd m- 13 very much 1ike to, and I'm sure- the other 14 Commissioners as well would like to see any ~ specific 15 cases of where that kind of disagreement. and tension 16 that you're in~the middle of exists.
17 11's a matter of personal concern to me. I-18- intend 't o represent the NRC on the NARUC Board and 19 these are issues which I try to bring up with NARUC.
20 I'd like very much to see documentation of any 21 specific examples of an NRC initiative which, if 22 followed by you, which I'm sure you will follow, would 23 put you in a financial penalty situation with respect 24 to the public Service Conmission. And if you'd be so 25 kood as to send us any documentation of that.
I i.
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56 t' i l' MR. ENDRIES: I'm not sure that we have any 2 situations where they would automatically put.us into ,
3 a penalty, but it's the potential. The tension comes 4 from the potential of these things coming.about.
5 COMMISSIONER ROCERS: Well, or where you see 6 you're being torn between two competing initiatives.
7 MR. ENDRIES: Sure.
8 COMMISSIONER ROGERS: Yes.
9 MR. ENDRIES: We have a very important 10 example of t hat right now with Nine Mile 1 outage. We 11 know that it's already been formally - a proceeding l 12 has already been formally initiated by the public 13 Service Commission to examine the prudence of the Nine 14 Mile 1 outage. So, we know that all the 15 documentation, all these meetings and findings and so 16 forth associat ed with this that we provided to you is ,
l i
17 available to them and -- j 1
l 18 CHAIRMAN CARR: But when you negotinte with j l
19 them, I assume you negotiate the scheduled outages. '
l I 20 MR. ENDRIES: Negotiate the scheduled ;
21 outages? l 22 CHAIRMAN CARR: To get those on the rate 23 base.
l 24 MR. ENDRIES: Yes, we do make an estimate of 1
25 scheduled outages, right.
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57 FA 1 CHAIRMAN CARR: And you don't negotiate 2 unscheduled outages?
3 MR. ENDRIES: Well, there's a general 4 estimate made of what the capacity factor is likely to 5 be.
G CHAIRMAN CARR: Okay.
7 MR. BURKHARDT: I think there's another 8 impact that I think is important and probably should 9 be mentioned to explain why we agreed to defer the 10 replacement power costs. The impact on the 11 organization of having to go through these prudence .l 12 hearings is a great drain. So, the principal reason
-, 13 for doing that was to put off the prudence hearing l 14 until after we could get restarted because if we tried 15 to do the prudence hearing in the middle of the IG outage, we probably never would finish it. So that's 17 another impact, and they did that for us, but that's 18 what's cost us $225,000.00 a day to do that.
19 COMMISSIONER ROGERS: I see that you said 20 that neither Units 1 nor 2 are subject to specific 21 performance incentives. Do you expect that to 22 continue or is that a possibility that that kind of 23 initiative might come back to you from the state?
24 MR. D O N I.O N : That would be speculation on 25 our part Altbough, to answer it to the best of my I
l_
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I ability based'on an opinion, Commissioner, I would say 2 we do not see that in New York State. There was a 3 movement, if you will, back a few years ago among one 4 of the Commissioners in New York State to implement 5 those kind of incentives, or disincentives if you're G looking at it from a safety standpoint. But I think j 7 they pulled away from that. I think they do recognize 8 the down sides of that.
9 COMMISSIONER ROGERS: Well, I want to say 10 that they're not always a very strong ' safety 11 disincentive. There might be a small one. But 12 sometimes they're very bad. It depends on how they're 13 constructed. The ones which just pose a very big 14 penalty for making a decision not to shut down, to get 15 another week's run-in in a measuring period, that's a 16 very bad kind of a situalion that I'd like to try to 17 discourage any PUCs or PSCs from initiating.
18 But some penalty, some small penalty for a 19 short period or a larger penalty for a longer period !
20 of time of poor performance, I don't necessarily have 21 any problem with that. That's just the reality of 22 life. But I don't think that one should pay a very 23 big penalty for taking a safety action.
24 MR. DONLON: I would like to say on this 25 subject, Commissioner Rogers, to add a totally--
I l
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i '- =3 1 well, perhaps bleak picture where the New York State
- 2. ' Commission is concerned in this area. . They ,have 3 become very interested in ' t he -. s el f-as s e's smen t concept employed by the NHC, to the. extent that I know that' 5 .they've had some meetings with some staff people G inquiring as to how .the:NRC implements that. To this 7 extent', we' ve . had - some conversations with them about-l J8 employing a self-assessment type of program, notD only 9 with the - nuclear but throughout other parts of our i 10 corporation.
Il Now, we don't know where this .is going to-12 head, but up to this point in conversations with them, j-' 13 the indications are that they recognize that if we're 14 going to be self-critical, even in a non-nuclear 15 arena, again, that t hey. can ' t very well expect us to 1G do.so fully. and openly and totally, if you will, if i 17 they're going to come back and hold it against us and 18 he punitive later on.
19 So, I think there's some hope, if you will, 20- in.that regard where New York State is concerned.
21 COMMISSIONER ROGERS: Good. Well, thank you 22 very much.
23 CHAIRMAN CARR: Commissioner Curtiss? ;
24 COMMISSIONER CURTISS: Just one area that I l
25 want to follow up on Commissioner Roger's point.
si L -
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60 1 Mr. Endries, you spoke about the inherent 2 tension between the state and the federal regulators 3 and in particular the fact that that tension may be 4 exacerbated by the documentation that the Commission 5 requires and that's an inherent part of our process.
6 I guess the question I have is for you, Mr.
7 Burkhardt. Your shop is really where the rubber hits 8 the road on that question. And a concern that I think 9 our people have expressed in the past is that that 10 kind of tension, although not direct, may lead to 11 subtle influence over the willingness of people down 12 in the organization to identify problems within the 13 organization and take corrective actions. Corrective 14 actions in the special team inspections is a weakness 15 that had been identified.
1G I guess I'd appreciate your thoughts on what 17 steps you see as appropriate or that you've taken to 18 ensure that that subtle pressure that Mr. Endries 19 talked about, it may be inherent in the process, does 20 not lead to that kind of subtle diminution of the 21 responsibility to report and document in the manner 22 that I think our people expect.
23 MR. BURKHARDT: Yes. Well, I can't speak 24 too well for the past, since I was not there, but 1 25 can say that when I arrived there was a tendency to NEA1, R. GROSS 1323 Rhode Island Avenue. N.W.
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b- 1 not report problems up the chain. I'm not so sure 2 that it was the tension on the public Service 3 Commission, but perhaps the fact that there wasn't the 4 effective action taken when they were reported. You 5 know, the people down on the deck plates are more 6 likely to report if they think somebody's going to do 7 something about it rather than worrying about a 8 prudency hearing that would come out.
9 I'think we've turned that around. In fact, 10 one of the things in the restart action plan was to 11 ask every person in the division to report every 12 problem that he was aware of that had not been 13 officia))y reported. We got a huge number of problems I
LJ 14 reported. When we had the special team inspection and 15 when INpo came in, one of the things that they said IG was that they were unable to find any problems that 17 they could find that we had not only had reported and 18 were in our corrective action plan.
19 So, I think our track record in the last 20 eight months of reporting problems has been excellent.
21 What we still have to complete is how to resolve them 22 in a mere timely fashion than we do, but I think we 23 know what our problems are. As far as I'm concerned 24 and certainly I have tried to lead by example here, 25 one of my leadership principals is that any situation i
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I that's a problem, if I as the leader don't know about 2 it and I want to hear about it and no one ever gets 3 any sort of sanction for reporting a problem, but they 4 get a pretty good one for not reporting.
5 As I used to say, I learned that from G Admiral Rickover. The first messenger didn't get 7 shot, he got a medal. It was the second messenger .
I 8 that got shot.
9 So that's the way that we are. I think if l
10 you'll talk to your staff and I think if you talk to 11 the Public Service Commission staff -- in discussions 12 that I've had with them there has been a feeling of a 13 greater degree of openness and a grcater degree of 14 candor on our part. In fact, even with the horrible 15 SALP we had, it was reported to me by the NRC staff 16 person who led the SALP that it was the worst SALP 17 that we'd ever had, but the SALP meeting we'd ever had 18 to discuss what we were going to do about it and where 19 it st ood.
20 In fact, all of the items that are in the 21 SALP we can address by just referencing things in our 22 nuclear improvement program and our restart action 23 plan because we have them all ongoing.
24 COMMISSIONER CURTISS: Along the lines of 25 what Commissioner Rogers has suggested, I guess I'd be NEAL R. GROSS 1323 Rhode Island Asenue, N.W.
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.I 1 interested since you have raised the topic here today 2 and questioned the tension between the federal and 3 state regulators. If it does appear that you see any 4- diminution, subtle or otherwise, in the documentation 5 or reporting or willingness'that results from whatever 6 review the PSC might undertake --
7 MR. BURKHARDT: It's an absolute trap. You 8 can't win by doing that. I think we've convinced the 9 people by that. You're going to lose in the end.
10 I have to tell you this. There's some 11 tension in being totally open with the NRC. You can 12 get some penalties from that, although I've seen a 13 tremendous amount of constructive cooperation. We had L.
14 one situation where we had a violation and did not get 15 a penalty because we had been so effective in finding 10 it and reporting it.
17 But with any regulator, you might say to 18 yourself, "Maybe I shouldn't report it," but my 19 experience has been throughout my career that that's a 20 trap and the best way to be is to be totally open and 21 candid about where you stand. As an old shipmate of 22 mine used to say, "Whenever Naval Reactors calls, tell You don't have to remember what you I
?? them the truth.
24 said."
25 CHAlHMAN CAHR: That's an accurate report.
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f 1 COMMISSIONER CURTISS: I'll turn it back to 2 him.
3 COMMISSIONER ROBERTS: Inside joke.
4 CHAIRMAN CARR: Are any of your operators 5 dual licensed for both plants?
6 MR. WILLIS: No.
7 CHAIRMAN CARR: Okay. And I can almost tell 8 you that one of the first clues you can look for to 9 going downhill is a record run. As I read through, 10 you had a record run at Nine Mile Point 1 in '85.
11 MR. BURKHARDT: Yes.
12 CHAIRMAN CARR: And there's nowhere to go 13 but down. You've got to expect those kinds of things.
14 The operators get the feeling that we're good and 15 things are running right and we just, an you said, 1G tend to get complacent.
17 I'm a ]itile bit concerned because when they 18 put my book together I don't know where I got these 19 nice charts from that somebody sent me.
20 MR. BURKHARDT: Those are almost 23 meaningless, which is why I didn't discuss them, l 22 because the work is done. A lot of the paperwork 23 hasn't been signed off.
24 CHAIRMAN CARR: I was worried about the l
25 trends, needless to say.
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_ 1, 1 MR. BURKHARDT: Yes. Right. When you look 2 at those, it looks like it will be 1991 before we get 3 done. ;
4 CHAIRMAN CARR: Right.
5 MR. BURKHARDT: That's why I didn't show you G those.
7 CHAIRMAN CARR: But that didn't keep me from 8 worrying about them. So, this is a case of more --
9 MR. BURKHARDT: Must have gotten them from 10 the Public Service Commission. I don't think we were 11 supposed to give them to you.
12 CHAIRMAN CARR: Oh, well, we've got guys
- 13 everywhere. What you're telling me is this is like a u_
14 paperwork follow-up rather than a lack of performance.
15 MR. BURKRARDT: That's exnctly right.
IG Exactly right. And regardless of that, if the trend 17 doesn't come down to zero, we don't say we're ready.
IR CHAIRMAN CARR: I understand-that.
19 MR. BURKHARDT: But we look at that every 20 Wednesday. We go over each one of those things and ;
21 we -- )
i 22 CHAIRMAN CARR: If there are no further '
23 questions for you, why we'll excuse you and ask the 24 staff to step forward. Thank you very much.
25 MR. BURKHARDT: Thank you.
I L _
NEAL H. CROSS 1323 Rhode Isinnd Avenue, N.W.
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. n 66 fr MR. DONLON:
1 Thank you. ,
2 CHAIRMAN CARR: Mr. Taylor, you may proceed.
3 MR. TAYLOR: Good morning, sir. With me at 4 the table, t o my right, Doctor Murley, and the Project 5 Manager for Nine Mile, Marylee S10ssen. To my left, l 6 of course, Bill Russell, the Regional Administrator, 7 and Bill Cook who is a Senior Resident at Nine Mile.
8 Before turning over, I'd like to mention 9 several things. First, the staff has been very 10 closely monitoring the recovery and the improvements 11 that have been outlined to you here today. We've had 12 extra efforts, we've had a diagnostic inspection. We 13 do have a restart panel which has been active and 14 which is keeping up with the company projected 15 improvements and directing inspection effort to be 16 sure that the things are happening. So that will be 17 continuing and Bill will be giving you more details on 18 that 19 I'd like to make a second point, that we'll 20 also attempt as a staff to be alert to any signs that 21 we can see that financial or PSC pressures are 22 detracting from current or planned nuclear safety 23 performance. That's difficult sometimes for us to do, 24 but we'll be alert to it as we are, wherever the 25 feeling is the tension is particularly strong. We'll NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
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( e 67 I continue to do that.
2 The third point as mentioned by Mr. Donlon, 3 the staff and the company will plan to come to the 4 Commission shortly before the planned restart which, 5 as mentioned to you, is now projected in October. We 6 will continue to monitor that and be prepared +o brief -
7 you before the planned restart.
8 With that introduction, I'll now ask Bill 9 Russell fo brief you on current staff work and what 10 we've planned.
Il MR. RUSSELL: My plan is to update the 12 Commission since I last briefed you on Nine Mile 1,
- 13 which as the June 1st meeting. Many of the issues 1
..d 14 was planning to discuss were covered and I won't 15 repeat those.
16 One area I think is significant, and it was 17 not discussed, and that was the special team 18 inspection that was conducted r.imilar to a diagnostic.
19 It was a joint NRR, Region I inspection. The 20 important finding from that inspection was the 21 confirmation of the adequacy of the scope of the 22 restart plan as submitted by the licensee.
23 That is that the problems which the 24 inspection team found were, in fact, already covered 25 within the scope of the restart plan. That has given r-L -
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1 us confidence that there is a good definition now of 2 the problems that need to be addressed. That's I 3 particularly significant in light of the history of 4 problems not flowing up within the organization such 0 that they can be dealt with.
6 We currently have revision two of the plan 7 under review. This revision, as was mentioned by the 8 licensee, addresses two areas which I identified on 9 June 1st as being deficient. One was the area of 10 management follow through on commitments to ensure 11 that they have been effectively put in place and the 12 licensee did summarize their activities for assuring-13 that those commitments are met.
14 The second area has to do with training.
15 This is training in the broadest context to nia k e sure 16 that ihe staff understands the organization's 17 approach, their policies. So it 's not limited to 18 operated training or maintenance training, but really 19 an understanding of the goals and the objectives of 20 the organization.
21 The staff has formed a joint Region 1 22 Headquarters panel of senior managers and staff to 23 conduct the review of both the restart plan and to l
l 24 coordinate inspection activities and to make i
25 recommendations to senior management and assure that NEAL R. GROSS 1323 Rhode I r.l a n d Avenue, N.W.
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69 1 problems are identified and raised early in that 2 review. That panel has met eight times and they are 3 currently in the stages of final review of revision 4 two of the plan.
5 We do intend to solicit public comments on 6 the plan now that we have a complete plan with this 7 latest revision and a public meeting is planned for 8 August 23rd in Oswego and we are receiving cooperation 9 from local officials to conduct that meeting.
10 As it relates to status --
11 COMMISSIONER ROGERS: Excuse me. What does 12 revision two mean? Does that mean that that's the m 13 second version or the third version?
I t__J 14 MR. RUSSELL: This is the third. The first 15 plan --
IC COMMISSIONER ROGERS: Okay. So it does mean 17 revision two. It's the second revision.
18 MR. RUSSELL: Yes, sir. The first plan came i
19 in in December, approximately six months after issuing l
l 20 the confirmation of action letter. The first revision 21 was in March, which was just about the time frame of 22 completion of the special team inspection and the 23 issuance of the SALP report.
24 This second revision addressed the two 25 principal issues of management follow through and i
L --
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1 training and the staff has concluded overall at this p 1
2 point that it is a reasonable plan and that the 3 company should proceed with implementation while we 4 finish our review. We don't have any serious 5 fundamental problems with the plan as it exists now 6 and we are in the process of finalizing our review.
7 The panel is, in addition to tracking 8 routine items from inspection reports, open items, 9 things like that. There are a subset of 24 specific 10 items, some of which were ident ifi ed in the handout-11 materials provided by the licensee and some were 12 discussed. We presently have six of those items 13 closed.
14 One of the items which we've closed is an 15 issue associated with the Torus wall thinning. To 16 give you a feel for the quality of the company's 17 review of items, through their assessment process and 18 t. h e i r review, they have decided that some aspects of 19 their analysis of Torus wall thinning was not 20 sufficient to meet their own standards. That is being 21 reopened and additional measurements are being taken 22 to resolve their internal questions. This is one that 23 the staff had, in fact, closed out.
24 I wanted to highlight this because it is a 25 case where their standards in this instance are more NEAl. H. GROSS 1323 Rhode Island Avenue, N.h.
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, I
'k- 1 rigorous than the standards that were imposed by the 2 staff.
3 Let me focus mostly on activities that are 4 planned between now and the time of restart. I've 5 mentioned the public meeting. An additional issue is G we have a team inspection that's planned for late 7 August to review some allegations of past harassment 8 and intimidation issues.
9 In addition, we plan a thorough review cf 10 the licensee's s e l f- a s s e s smen t report and their 11 readiness for rest art We expect to have that report 12 in hand for approximately two weeks prior to 13 conducting a major team inspection, which we call an 14 integrated assessment team inspection. The purpose of 15 that inspection is to independently con fi rm the 1G adequacy and the effectiveness of ihe corrective 17 actions taken by the licensee and to assure that the 18 organization fully understands its own structure, y 19 responsibilities and that the issues that we've seen 3 20 in the past with management effectiveness have been k
21 addressed to the extent they can be with the plant j 1
22 shutdown.
23 We are presently having discussion with the 24 licensee on the approach to power ascension, how they 1
25 are going to conduct s e l f- a s s e s sme n t during the power !
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1 increase, and at what points there will be discussion 2 between the staff and the licensee in a phased 3 approach to resumption of power. We have not yet 4 completed that~ review, but it is currently ongoing and 5 we would expect to be in a position to brief the 6 Commission on that at the next meeting.
7 We are planning augmented inspection 8 coverage during the power ascension, similar to what 9 we have done .a t Peach Bottom and Pilgrim with periods 10 of- time being covered around the clock and when 11 activities are stable with lesser coverage.
12 Those were the principal points I wished to 13 cover with respect to Unit 1. There are some issues 14 rel at ed to the requalification program at Unit 2 that 15 I want ed to highlight. !
16 The company has identified clearly that they 17 also concluded the program was unsatisfactory. But 1 1
~
18 think it's important io note that in the grading of 19 the examinations, we grade crew performance, command 20 and control, communications, teamwork and how they 21 handle the plant on the simulator. The NRC concluded 22 that two of six crews performed unsatisfactorily. The 23 licensee concluded that three crews were 24 unsat inf act ory.
25 On ihe writien examination that was NEAL 11. GHOSS 1323 Rhode Island Avenue, N.W.
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" - 1 mentioned, the grading was essentially identical with 2 both the NRC and the licensee failing seven 3 individuals. On the operating test, this is the 4 individual performance on the simulator as well as the 5 plant walk through portion of the examination, the NRC 6 in the plant walk through concluded that three 7 individuals did not perform satisfactorily. The 8 ut ilit y also concluded three were unsatisfactory.
9 There was one difference in grading between the two 10 staffs.
11 On the simulator examination, the NRC 12 concluded five of 24 were unsatisfactory. The
-- 13 licensee failed seven individuals. The reason I go ,
- t. .
14 through this is this is an important finding in our 15 basis for continued operation. This licensee has 1G demonstrated a rigorous approach to evaluation of 17 candidates and we feel that while there are 18 deficiencies in the program and that a number of 19 people were not capable of passing the examination, it 20 does not raise a question about those who did indeed 21 pass.
22 We have, as it relat es to corrective action, 23 it was discussed that they have gone to four shifts 24 with three crewc that have been examined by the .
1 25 licensee, crews A, B, and C. Two crews that had I
LJ NEA1, H. CROSS 1323 Rhode Island Avenue, N.W.
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1 74 1 extensive failures, Crews E and F, during the 2 requalification examination have had a total of 15 3 individuals removed from watch standing duties who 4 failed portions of that exam. Those who passed have 5 been used to augment the remaining shifts. One crew 6 is being examined today on the simulator and we expect 7 the plant walk through portion will be done tomorrow 8 and i t. is using the same examination team that 9 conducted the requalification exams over the previous 10 two week period.
11 COMMISSIONER CURTISS: On that crew that's 12 being reexamined and Crew D,. is that a crew made up of 13 people who have been on the board or are those staff 14 licenses?
15 MR. RUSSELL: It is the crew that would be IG standing the watch. This examination would be the 17 station shi f t supervisor and the assistance shift 18 supervisor with the Ros from that crew. So, it is not 19 a mixed crew with staff licenses performing in the l 20 position of the second SRO.
21 COMMISSIONER CURTISS: Okay.
22 MR. RUSSELL: The NBC, in addition, 23 increased our coverage of activities across the 24 weekend once we had the results of the examination 25 last Friday.
1 I
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L___.__________________________ _ _ _ _ _ _ _ . - - _ _ _ _ _ _ - _ _ _ _ - . . - - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ - - _ - - - - - - - - - - - - - . - - - - - - - - - - - - - - - - -
-e ..
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75-(L-
!1< We , . in particular, focused on how . well the.
-2. company _ had defined responsibilities .for emergency
'3' roles and ;how they would be using their . procedures.
1
'4 We addressed their tentatives to duty. We looked at 5 operator attitudes as to whether.those' attitudes were 6- positive or not. -There. was' substantial management-7 oversight. of those activities, including. discussion-8 with each crew prior to. relieving the watch with the 9 operations supervisor and the station superintendent 10 present and providing additional back shift ~ coverage.
11 We don't.know et this time what the results 12: wil.1 be of'the examination. I intend to keep the
-- - 13 staff on site until they have completed grading and
]. 14 will advise the Commission as soon as we have those 15 resu'lts.
' 1G That covers the items that I wanted to
. 17 address and I believe that we're ready to respond to 18 questions.
I l 19 CHAIRMAN CARR: Commissioner Rogers?
l 20 Commissioner Curtiss?
21 COMMISSIONER CURTISS: Just one quick 22 question. This is the fourth program that we've had
,1 23 that hasn't requalled coming unsat. When we go 24 through an evaluation of the steps that the-licensee l
25 takes from here on out to requalify the program, is
.s A -
. NEAL R. GROSS 1323 Rhode Island Avenue, N.W.
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1 that a review that's conducted pretty much on a case 2 by case basis or do we have standards that we would 3 use that would define when that program reaches the 4 point that it's ready for requal.? l l
l 5 DOCTOR MURLEY: Yes, that's a very good 6 question. We have not written out standards that 7 would tell us when a plant is satisfactory again. We 8 recognize now that we've got this experience under our 9 belts that we need to do that. I've instructed my 10 sinff to draft up, based on the experience we've got, 11 what should be standards for requalifying. So we 12 don't have it, but we will be doing that.
13 CRAIRMAN CARR: Was the question whether the 14 program would be requalified as being sat isfact ory or 15 whether the operators?
IG COMMISSIONER CURTISS: The program, not the 17 operators. Once we find an unsat. program, and I 18 think we found them now, what, in four cases?
19 MR. TAYLOR: Yes.
20 COMMISSIONER CURTISS: Ginna, Point Beach, 21 Turkey Point and now here. I guess the question 1 22 have as we get into the six year cycle is what 23 standards we have that we apply. I think you've 24 answered that.
25 DOCTOR MURLEY: Now, each case there, NEAL R. GROSS 1323 Rhode Ir, land Avenue, N.W.
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L 77 1 Commissioner, has been slightly different, the 2 weaknesses.
3 COMMISSIONER CURTISS: I understand that.
4 DOCTOR MURLEY: But I think we've learned 5 enough now to draft some general guidelines.
G CHAIRMAN CARR: Well, it sounds like the 7 program requalified some people. It sounds like the 8 problem is in implementation of the program. Some of 9 their people quali fi ed . So the program can qualify 10 people and, as he said, they have a good program in 11 that it's tough and it's probably more strict than our 12 grading would indicate. So, if the program can
-, 13 qualify one person, obviously it can qualify enough Ld 14 people if you spread it enough.
16 DOCTOR MURLEY: Mr. Chairman, I'm n o t. sure I IG would go that far. If we see that two out of five or 17 three out of six or some significant number of teams 18 fail, and people fail, we say that that's really an 19 unsatisfactory program. Now we need to draft some 20 guidelines of how to get it back up to where we would 2] expect nearly everyone to pass an exam.
22 CHAIRMAN CARR: We're saying the same thing, 23 I think. But whether it's an unsatisfactory program 24 or an unsatisfactory implementation, the results are 25 unsatisfactory.
'. Jl L
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!- i- DOCTOR MURLEY: I see what you're saying, 2 yes. l 3 MR. RUSSELL: In fact, one element of the 4 program that's been endorsed by the policy statement 5 is candidate evaluation. On that element, we 6 concluded, they did very well and they had rigorous 7 standards. It's the preparation of the candidates for 8 that examination which is in question. Whether that's 9 an implementation issue or it's a program issue, we're 10 not certain of yet. ,
)) The focus of our meetings with the company 12 over the last few days, last Friday and again the 13 discussions we've had this week with the meeting on 14 Monday, has been on short-term actions to assure the 15 safety of operation for Unit 2. The company has 1G agreed to provide an action plan to address the 17 deficiencies. A draft of that plan was discussed on 18 Monday. They appear to have the right elements in the 19 plan. It addresses programmatic issues with respect 20 to quality of the written examination because there is 21 a question about the second written exam which six of 22 12 cendidates failed, and there are questions about 23 how they generated and validated the scenarios for use 24 on the simulator. So, there are programmatic issues, 25 there are performance issues and it's a mixed bag of NEAL H. GHOSS 1323 Rhode 1s]nnd Avenue, N.W.
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. . j 79 1 issues where there were weaknesses which the company 2 needs to sort out and describe to the staff. We ,
3 expect to have that for review by mid-week of next 4 week.
5 CHAIRMAN CARR: And I might also add this is 6 our new program and there's going to be some growing 7 pains as people get used to it. We're going to find 8 that they didn't know what they had to do to run a 9 good requalification program and I think it's 10 indicative of the fact that we're finally looking at
- 1) them in the right vein, if you will.
12 COMMISSIONER CURTISS: Just one other quick
- 13 question. I guess it surprised me here that the L
14 training crews that they run through the program 15 aren't the same as the operating crews. They're not IG training their crews that are actually on the board 17 operating together. Is that unusual or is that a 18 cause for concern?
19 MR. RUSSELL. It raised questions. We were 20 aware of that even prior to the examination being 21 conducted. We have not taken a position one way or 22 the other. They do have extra watch standards on each 23 crew. For example, you take one crew with six l
24 individuals, two SRos and four Ros, they broke that up 25 into two crews of four and augmented it with a staff I
i t _
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.4. g 80'
! ; 11 LSRO for - each E one. So you had three . wat ch standers 2 together, plus a staff individual ~who - held ' a license h .' 3 ' _and'that'wasithe mechanism which they. chose to put the
-4' candidates up to judge the requalification program.
- 5. CHAIRMAN CARR: No wonder'they flunked.
6 MR. RUSSELL: We~ raised. concerns about.that 7.- even prior to the examination. The-crew that's being 8 evalua t ed t oday' is the normal crew from the - watch
.9 standers with four candidates, which is the.way.that-10 they have'been training in.the past.
. 31' DOCTOR MURLEY: You might recall that two
~12 years ago we were severely. criticized because our
' 13 examination procedure required the split-up. So,.we 14 stood back from that and we said, "No, no, do it the 15 way . you normally operate." And yet they chose to 1G break it up differently. I think that's probably a 17 part of the problem.
18 MR. TAYLOR: Many of the utilities- are 19 sticking with the crew idea which makes- a lot of 20 sense.
21 MR. RUSSELL: Yes. They're typically 22 putting up watch standing crews and then a crew of !
23 staff operators augmented with extra Ros who are l
24 qualified is typically what we see.
25 COMMISSIONER CURTISS: Okay. That's all I I I
l NEAL R. GROSS 1323 Rhode Island Avenue, N.W. ;
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-d I have.
2 CHAIRMAN CARR: I don't have any questions.
3 Do you all have any other questions?
4 COMMISSIONER CURTISS: No questions.
5 CHAIRMAN CARR: Well, I would like.tc thank 6 'the representatives of Niagara Mohawk Power 7 Corporation and the NRC staff for this briefing.
8 it appears that Niagara Mohawk has made 9 progress in their restart program for Nine Mile Unit !
10 1. However, given recent inspection results with 11 regard to their training program, I continue to be 12 concerned about training at' the facility. The
- 13 training program should receive top management i
L _.J 14 attention to resolve the root cause of the training 15 problems.
16 It has been reassuring to us to hear that 17 top management has confirmed that- there will be made 18 available sufficient resources to support safe 19 operation of the units and also that employees are 20 raising problems to upper management's attention.
21 I must also caution Niagara Mohawk to 22 closely monitor operation of Unit 2 while you're 23 preparing Unit 1 for restart. I request the NRC staff 24 to continue its close monitoring of both the Nine Mile 25 point units and keep the Commission informed.
r L_
NEAL R. GROSS 1323 Rhode Irland Avenue, N.W.
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i . .
82 L -1 If my fellow Commissioners have no other
?- comments, we stand adjourned.
3 (Whereupon, at 11:52 a.m., the -above-4 entitled matter was concluded.)
6 7'
8 9
10 11 12 13 14 15 10 17 18 19 20 21 22 23 24 25 NEAI. H. GROSS 1323 Rhode Island Avenue, N.W.
Washingt on, D.C. 20005 (202) 234-4433
yy e
, , . , .CERTI'FICATE OF TRANSCRIBER i
This is to certify that the attached events of a meeting
,i, of the United States Nuclear Regulatory Commission entitled:
-TITLE OF MEETING: BRIEFING ON STATUS OF NINE MILE POINT-l PLACE OF MEETING: ROCKVILLE, MARYLAND l.
DATE OF MEETING: AUGUST 2, 1989 were' transcribed by me. I further certify that said transcription-is accurate and complete, to the best of my ability, and that the transcript is a true and accurate record of the foregoing events.
- 46 '~
Iv
~
" {l _ .
Reporter's name: Peter Lynch NEAL R. GROSS COURT REPORTER $ AND TRANSCRIBER 5 1323 RHODE ISLAND AVENUE. N.W.
WASHINGTON, D.C. 20005 (202) 232-6600 (202) 234-4433
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- p a ! ADVANCED COPY TO
- The Public Document Roem DATE: 8
-l FROM: SECY Correspondence & Records Branch f.
" Attached are copies of a Commission meeting transcript and related meeting i
document (s). They are being forwarded for entry on the Daily Accession 1.ist and J placement in the Public Document Room. No other distribution is requested or ij required.
.-:k Meeting
Title:
ca 2dafmpri N b ! M -I o u o Meeting Date: 89 Open [ Closed i.
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