ML22347A182

FOIA-2023-000037 - Resp 1 - Interim, Agency Records Subject to the Request Are Enclosed

ML22347A182
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Issue date:	12/08/2022
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FOIA-2023-000037
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OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 May 20, 2021 Dig itally sig ned by Malion Malion A. A. Bartley Date: 202 1.05.20 13:4 3:29 MEMORANDUM TO: Concur: Case Closed

-Bartley

---

-04'00' FROM: Malion A. Bartley Assistant Inspector General for Investigations

SUBJECT:

ALLEGED COLLUSION BETWEEN PG&E AND NRC PERTAINING TO RELEASE OF INFORMATION INVOLVING SEISMIC SAFETY AT DIABLO CANYON (OIG CASE NO.14-033)

ALLEGATION The Nuclear Regulatory Commission (NRC) Office of the Inspector General (OIG),

initiated this investigation in response to public concerns about whether the NRC colluded with Pacific Gas and Electric Company (PG&E), licensee for Diablo Canyon Nuclear Power Plant (DCNPP), for a 2014 simultaneous public release of both the Differing Professional Opinion Appeal Decision Involving Seismic Issues at Diablo Canyon (DPO 2013-002) and the AB1632 seismic report 1 to mislead the public.

The seismic risks at DCNNP have been an evolving external hazard since initial licensing and have been monitored per regulatory requirements. Since additional earthquakes and faults have been discovered since 2014, the NRC and PG&E have consistently reviewed the plant's licensing basis and operability requirements.

We investigated:

1. The collusion allegation;

2. The circumstances surrounding the Differing Professional Opinion (DPO) panel's review of DPO 2013-002; and,

3. A potential release of predecisional information.

1 PG&E seismic report submitted to the State of California pursuant to California Assembly Bill (AB) 1632, "Energy:

planning and forecasting.

THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY- OIG INVESTIGATION

OFFICIAL USE ONLY OIG INVESTIGATION INFORMATION POTENTIAL VIOLATIONS The potential violations relative to this investigation are 5 C.F.R. § 2635, "Standards of Conduct;" NRC Management Directive (MD) 3.4 , "Release of Information to the Public;"

MD 10.159, "The NRC Differing Professional Opinions Program;" and 18 U.S.C. § 371 ,

"Conspiracy to commit offense or to defraud United States."

FINDINGS Issue 1: The OIG did not find evidence to substantiate that the NRC and PG&E colluded on the release dates of the Differing Professional Opinion Appeal Decision Involving Seismic Issues at Diablo Canyon (DPO 2013-002) and the AB1632 seismic report to mislead the public. The OIG did, however, find an appearance of intentional timing of the EDO's decision to predate or coincide with the public release of PG&E's seismic report. Specifically, the OIG found that PG&E informed the NRC during a drop-in visit on August 22, 2014, about its discovery of increased seismic activity and that it would release those results to the public the following month. NRC senior managers appeared to then influence staff to work urgently on the EDO decision report. The EDO decision report was signed on September 9, 2014, and the AB 1632 seismic report was released on September 10, 2014. 2 Issue 2: The OIG found an appearance of a loss of independence during the DPO panel's assessment of DPO 2013-002 because the panel worked with the licensee to acquire additional calculations. The DPO panel told the OIG that since the subject matter of this DPO was technically difficult and there were limited means to acquire the additional information needed, the panel decided to obtain the information from the licensee. The OIG found that MD 10.159 allows for the DPO panel to seek expertise from outside the agency for highly complex situations, but the guidance at the time for doing so needed clarification. NRC Yellow Announcement 20-0094, "Change to the Differing Professional Opinion Process," dated December 4 , 2020, provided for the addition of a tiger team of subject matter experts to assist DPO panels with complex issues.

Issue 3: The OIG did not find that then-Region IV ._ (b_l(7_J(c

_J_ _ _ _ _ _ _==:---------,

b)(? )(Cl release of predecisional information violated MD 3.4. Although b)(? )(C) 1 prov1 e the DPO submitter's name to the licensee when PG&E was requested to do additional calculations by the DPO panel, it was not done in conjunction with a declaration that the individual had submitted the DPO. The licensee was aware that the 2 ADAMS Accession No. ML14260A063.

2 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION DPO submitter had previously submitted nonconcurrences 3 because they were publicly available and addressed the same issue as the technical content of the DPO.

Additionally, the OIG found that PG&E initially thought the additional calculations were for the NRC commissioners.

The OIG briefed these findings to NRC Region IV Regional Administrator, Scott MORRIS, and he stated that he was "compelled" to discuss these findings with his management team.

BASIS OF FINDINGS BACKGROUND DCNNP is an electricity-generating nuclear facility located west of Avila Beach, California. The plant has two Westinghouse pressurized-water nuclear reactors owned and operated by PG&E, its license holder. PG&E plans to permanently cease operation of both reactors between 2024 and 2025. 4 NRC General Design Criterion 2 (GDC 2), Appendix A, Part 50, requires nuclear power plant structures, systems, and components important to safety be designed to withstand the effects of natural phenomena, such as earthquakes, tornadoes, hurricanes, floods, tsunami, and seiches, without loss of capability to perform their safety functions. The GDC 2 is the Commission's principal seismic and geologic guide for its evaluation of the suitability of proposed sites for nuclear power plants and plant design bases. Based on current information available concerning faults and earthquake occurrence and effect, these criteria are revised as necessary when more complete information becomes available.

From the initial licensing of the DCNPP, seismic faults have been an evolving external hazard that PG&E committed to monitor, and the company has provided the NRC with updated seismic testing results several times, including in 2009, 2011, and 2014. For each of these updates, the seismic activity was stronger, but PG&E completed operability determinations 5 and found DCNPP components continue to meet regulations and design margins.

3 NCP 2011-103 (ML113220073) and NCP 2012-001 (ML120450843).

4 By letter dated November 27, 2018 (ADAMS Accession No. ML18331A553), the licensee informed the NRC of its intent to permanently cease operations for Diablo Canyon Unit 1 on November 2, 2024, and Unit 2 on August 26, 2025.

5 The Standard Technical Specifications (NUREGs 1430-1434) define "operable/operability as a system, subsystem, train, component, or device shall be OPERABLE or have OPERABILITY when it is capable of performing its specified safety functions, and when all necessary attendant instrumentation, controls, normal or emergency electrical power, cooling and seal water, lubrication, and other auxiliary equipment that are required for the system, subsystem, train, component, or device to perform its function(s) are also capable of performing their related support function(s)."

3 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION As a part of the NRC's Reactor Oversight Process (ROP), the NRC inspects operability determinations and reports the agency's findings in an integrated inspection report. If NRC staff members do not agree with the agency's reported finding , they may employ the Non-Concurrence Process 6 (NCP) and DPO program to express their dissent to management.

The DPO program allows staff members to have their differing views considered by the highest-level managers in their organizations. It also provides managers an independent three-person DPO panel, which reviews the issue and documents its conclusions in a report. The panel issues its decisions to the DPO submitter, who may appeal the decision to the EDO. The EDO's decision is final with no additional recourse.

CHRONOLOGY On July 19, 2013, now retired Senior Resident Inspector (SRI) Dr. Michael PECK submitted a DPO maintaining that NRC responses regarding the 2011 seismic fault were inconsistent with both operability requirements and the design basis of the plant.

PECK followed the agency process as stated in MD 10.159 and sought a response to his seismic concerns through the DPO program after two unsuccessful non concurrences.

On May 29, 2014, Office of Nuclear Reactor Regulation Director Eric J. LEEDS (retired) issued his decision that did not substantiate the DPO, and on June 23, 2014, PECK appealed the decision to the EDO.

On August 22, 2014, during a drop-in meeting at NRC headquarters, PG&E informed NRC management that a new seismic study found increased seismic faults at DCNPP, and that PG&E planned to announce that finding publicly in early September.

On September 9, 2014, the EDO upheld the DPO Panel's decision, and on September 10, 2014, PG&E publicly released the new seismic study results in the AB1632 seismic report. The OIG determined that if EDO's decision was delivered before the release of PG&E's report, PECK could not appeal and the EDO's decision would be final; however, if PG&E's report was released first, the NRC may have been obligated to reevaluate the technical merits of the DPO based on the new seismic information.

Per NRC MD 10.159, the EDO has 80 days to produce a timely decision on a DPO appeal; for DPO-2013-002, the appeal decision was completed in 79 days.

6 NRC's NCP is to be used by an eligible NRC employee with differing views about a document in the concurrence process to formally indicate disagreement with the document.

4 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION FINDING 1: THE OIG DID NOT FIND COLLUSION TO MISLEAD THE PUBLIC BUT FOUND APPEARANCE OF INTENTIONAL TIMING The OIG did not find evidence that the NRC and PG&E colluded on the releases of the EDO's decision on the DPO appeal and the AB1632 seismic report to mislead public, but did find an appearance of intentional timing of the release of the two documents.

Though the DPO was not discussed at the drop-in visit, PG&E's decision to release its discovery of increased seismic activity to the public was. PG&~'s tbeo.J<bl(7l(Cl fbl(7l(Cl Iand the PG&E ~1b_ -l<7_l<C_l _ _ _ _ _ _~

~b)(7)(C) ltold the OIG that the DPO results were not discussed at the arop-In.

Satorius Met With Peck On July 30, 2014, then-EDO Mark SATORIUS met with PECK, and they discussed their views on the issues raised by DPO-2013-002. PECK told SATORIUS he was not raising a safety issue at DNCPP with his DPO, and they agreed the DPO was raising instead a regulatory compliance matter that was possibly caused by the procedural complexities of the current NRC's licensing process.

EDO Staff Expedited Reporting to Release Prior to PG&E Report SATORIUS said that following his meeting with PECK, he took a week off and then in the middle of August 2014 he decided to rule against the DPO decision appeal. Due to the technical complexity of this DPO, it took him and l<bl(7l(Cl I tbl(7l(Cl INuclear Materials Safety Safeguards (NMSS), NRC, five drafts penned over 3 weeks before his ruling was released via official memorandum on September 9, 2014.

NRC senior managers appeared to influence staff to work with urgency on the EDO's decision report, including sending drafts for comments to SATORIUS' personal email address while he was on vacation. An email dated Thursday, September 4, 2014 (marked as high importance), said, "Our goal was to have had our comments incorporated for Mark's consideration this weekend by COB today and to email it to his home address." The email continued, "I also heard yesterday that the state's report was not going to be publicly available until Sept. 10 so Mark might be able to issue his decision on the 9th."

DPO Panel Member Reviewed PG&E Report Before Rendering Its Decision The OIG found the lead technical DPO panel member was tasked to review the pre-public release of the AB1632 seismic report. On August 20, 2014, NRC senior managers were preparing for the upcoming drop-in by PG&E and the DPO appeal decision when (b)(7)(Cl Nuclear Reactor Regulation (NRR) ._ l<b_l<7_l<_

cJ_ _ _____.

>O><c) , emaI ed staff about "the need for a comm plan of some 5

THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION type for the report and the DPO." An NRC project manager developed a Diablo Canyon Seismic Report Communication Plan that included a proposal to ask PG&E to provide a draft copy of the AB1632 report in an electronic reading room. The request was submitted to PG&E because the staff was being asked to perform a preliminary assessment of the information provided in the drop-in that was referred to as "problematic."

By August 26, 2014, the NRC's communication included review of the AB1632 report prior to the public release. Additionally, the lead technical DPO panel member was asked to be involved in the review of the report to "to see if there are any showstoppers in the new analysis of Shoreline Fault ground motions."

7 f bl( l<C> Itold the OIG that PG&E shared information on the AB 1632 seismic report prior to the public release because it had been communicating regularly on the progress of the reports. He said, "neither of us wants 7 to be surprised." It was PG&E's understanding that the NRC wanted the access for "the state and communication plan and also in support of the regional operability ... "

On August 29, 2014, then-NRC Chairman Allison M. MACFARLANE requested a briefing on both the soon-to-be-released AB1632 seismic information and the DPO-2013-002 appeal. An NRR branch chief responded to the request: " ... although the panel's report is done, the DPO is open until the appeal is complete and you can always ask the panel to do more." Then SATORIUS replied to the NRR branch chief, "I don't disagree, however, the DPO will not be finished when the chairman briefing takes place."

SATORIUS told the OIG that he handled the appeal decision. Among the steps he took to rule on this matter, SATORI US listed: 1) reading/studying DPO-2013-002; 2) recruiting SAMPSON's assistance to help him with the coordination and redaction process of this appeal decision; 3) corroborating with 'M arc DAPAS, then-Regional Administrator of Region IV, NRC, if there were newly developed DCNPP seismic information; and 4 consulting with,_)_<7)_<c_),__.....,_________________.

(b)<7xc) , NRR, NRC, and b)(?)(C) Office of International Programs (OIP), NRC, as they participa e In e ear- erm Task Force Review of Insights from the Fukushima Daiichi accident. As a result of his evaluation, SATORIUS understood that DPO-2013-002 was raising a procedural issue rather than raising a safety concern.

FINDING 2: THE OIG FOUND THE APPEARANCE OF LOSS OF INDEPENDENCE IN DPO 2013-002 7 f b)(?)(C) Itranscript says "what's" instead of "wants" as a transcription error. (line 23; page 78) 6 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION During the initial review of PECK's DPO, the panel recognized it needed additional information to assess the technical adequacy of the concerns and it did not have the necessary data available, so it requested additional calculations from PG&E in December 2013, which the licensee considered an informal request. PG&E performed the additional calculations, developing a hypothetical 8 report for the NRC that was not docketed in ADAMS because the report was not being used for an official agency action. In March 2014, two of the DPO panel members reviewed the report at a PG&E off-site location and used information from it to write their DPO panel report that did not support PECK's concerns. Relying on the panel's recommendations, the then-NRR director denied DPO-2013-002 on May 29, 2014.

By requesting the licensee perform additional calculations on PECK's seismic concerns, the OIG found an appearance of loss of independence during the DPO panel 's assessment of DPO 2013-002. The DPO panel told the OIG that since the subject matter of this DPO was technically difficult and there were limited means to acquire the additional information needed, the panel decided to obtain the information from the licensee. The OIG learned that MD 10.159 allows for the DPO panel to seek expertise and "use technical assistance from other NRC offices and regions or from outside the agency, as necessary, to address a highly specialized issue," but that the guidance needed to be clarified. The OIG found that clarification was provided in NRC Yellow Announcement 20-0094, dated December 4, 2020, which provided for the addition of a tiger team of subject matter experts to assist DPO Panels with complex issues.

The OIG learned that PG&E hosted an in-person meeting on March 5, 2014, to review the additional calculations informally requested by the NRC. Two of the three panel members reviewed the information at PG&E offices and asked questions for about 8 hours9.259259e-5 days <br />0.00222 hours <br />1.322751e-5 weeks <br />3.044e-6 months <br />. PG&E agreed to the onsite reviews but did not authorize the panel to keep copies to prevent the hypothetical comparisons from becoming public.

OIG learned from bl<7><C>

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uired the DPO panel members to obtain additional information from the licensee to support the evaluation. (b)(7)(C) was aware that two panel members flew out to California and talked with b)(7 )(C) told OIG, " ... that all communication between the licensee and the panel members was regulated by NRR."

The OIG learned through subpoena of emails that the licensee made engineering judgements without NRC involvement for data they used in calculations. Based on PG&E testimony, the data chosen were not based on the design basis of the plant; however, the data were not required because the licensee was performing these 8 Long-term Seismic Program Update Shoreline Fault Zone Studies Hypothetical Comparison of Damped in-Structure. (Ref: l~/l7><itranscript, page 72/357) 7 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAb use ONbY - OIG INVESTIGATION INFORMATION calculations for an NRC "request" and not a licensing action . PG&E senior managers told the OIG they did not feel pressured to complete this request.

Additionally, subpoenaed emails confirmed that PG&E support of NRC's request for additional calculations also provided an opportunity for PG&E to further su ort the operability concerns documented in NCPs by the SRI. Specifically, (b)(?)(C) aid,

" ... we welcomed the opportunity to put a nail in it [SRI operability concerns]."

Testimony DPO panel member, fbl(7l(C) I told the OIG that he reviewed the "hypothetical" report and he accepted it at face value because it was not a formal submittal and it "jived" with the information the DPO panel had. jbl(?J(c did not care what they called the report since he knew the licensee was not doing t 1s calculation "for the record." ~)(?)(~l I added, that "it appeared responsive to the information we had conveyed. They di no mention any intermediate reports or any problems that they had along the way in developing this. My recollection , it was a very straight forward process for them ... "

When the OIG asked ~b)(?)(cl if PG&E's additional calculations showed an

• t to the 7

safety of the plant, even though it was found during an informal request, (bl< l(C told the OIG, "And if there was information that says this new information might show that the licensing basis might be exceeded, then yes I think, even without citing chapter and verse of the regulation, a common understanding amongst the licensee that that information should be shared with the NRC, that would be my expectation."

~b)(7)(C) I The OIG learned from .... l ____,that a "Scientific Branch" of the NRC was tasked with putting together research data to help draw conclusions on the adequacy of seismic capability of DCNPP. A couple of members of the Scientific Branch contacted DCNPP staff and requested some unique studies be performed using actual plant data.

fbl(7l(C) Iadded that the request was very specific in the application of the way those data were to be used; it was " ... not a standard methodology that we would typically de lo ... " The NRC requested PG&E provide them results of that data analysis.

b)(?)(Cl added that PG&E never did officially enter it into its system. It was a "one-off' ana ys1s using the prescribed method requested by the NRC.

When the OIG asked rb)(?)(C) lit PG&E was following the direction of the NRC and furthering a specific request or expectation, he said:

"That's accurate, yes. I mean we, as our regulator we always like to support their needs because we appreciate their role in overseeing the licensee .. .. They .. .needed information from us to pursue whatever... they were doing ... However, we were very clear that this request was a nonstandard analysis, we were not going to keep records of it, and it was 8

THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION not going to be permanent plant documentation. It was just information ...to those scientists looking at it."

f bl(? )(C) hold the OIG that a "hypothetical" report was developed for the NRC with the results of the study. He added that PG&E would not make this report public because it did not go through the internal review process, and it did not subscribe to a certain standard.

r b)(? )(C) I told the OIG that he recalled having several conference calls with f~;)(C l"to make sure that we were applying the data in the very specific methods tha ey .. .asked us to do."

FINDING 3: THE OIG DID NOT FIND A RELEASE OF PREDECISIONAL INFORMATION VIOLATED REGULATIONS The OIG did not find that i<bl(? l(Cl I violated MD 3.4 when he s oke with PG&E about the NRC's request for additional calculations. Althou h b)(? )(Cl did provide PECK's name in an email exchange with (bl(7l(Cl Regulatory Services, DCNPP, when PG&E was requested to do additional calculations by the DPO panel, the release was not in conjunction with a declaration that PECK had submitted a DPO. The licensee was aware that PECK had previously submitted nonconcurrences because they were publicly available and addressed the same issue as the technical content of the DPO. Prior to the conversation between l<bl(7l<Cl land f b)(? )(C) I PG&E had internal discussions regarding the NRC's request for a teleconference. S ecifically, internal emails between DCNPP personnel, including r b)(? )(C) I, (b)(? )(C) and b)(? )(C) indicate some level of confusion over the information the NRC was seeking.

n ecember 9, 2013, several emails circulated with statements including, "It would help to know what they were interested in," " ...we need to understand what is being asked and for what purpose so we can properly prepare and have the right people available," and " ... I will reiterate that we need more information to support a productive phone call."

A December 11 , 2013 email stated:

7

• 1<bl( l(Cl Isaid that the three independent NRC reviewers that have asked for a telecon with us regarding seismic damping are investigating one of the concerns from Dr. Peck. r b)(?)(C !thought that the people that talked to him when he was on site last time (8/29) would be very capable of answering the NRC's questions. He said that the three individuals have spent a lot of time reviewing the DCNPP concerns and we can expect they 9

THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF T HE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION will ask very specific questions. Since the UCS 9 report mentioned below referenced Dr. Peck's contention we expect they are trying to get clear speaking points for the commissioners."

The OIG determined that (b)(?)(C) conversation was a result of PG&E'~ cea111est fa~

clarification regarding the in orma 10n being sought by the NRC. Although._~b-)(?_><c_>_ ___,j disclosed PECK's name in this conversation, there was no reference to a DPO panel investigation, and the licensee believed the information was sought to present to the Commission.

The OIG learned from fbl(?)(C) Ithat the DPO panel should not disclose predecisional information outside of the agency. She also noted that "there are times, as in the DPO process in this investigation, in which DPO panel may need to interview people outside the agency and/or speak with licensees to obtain additional information to support the evaluation."

I

~}(?>( told the OIG that ~b)(?)(C) I was very "thoughtful" not to mention that they were investigating a DPO, but that there was an emerging need to have additional information and it was purely a technical framework, "and that was all that needed to be said."

~b)(?)(Cl ltold the OIG that he did not specifically recall the NRC mentioning that the request for the study was for a DPO, and that "they were investigating something that was internal to the NRC."

fb)(?)(C) Itold OIG that he only remembers rb)(?)(C) Iinvolvement in the SRl's NCPs, and recalled that Kb)(?)(C) Iwas resooosiblj for resolvin the NCPs since he was the NRC Region IV~imc jfor DNCPP. i<b)(?)(C) _ said that (b)(?)(C) did his due diligence while addressing the NCPs and included PG&E's concern.

DISPOSITION This investigation was referred to the United States Attorney's Office (USAO), Northern District of California, for consideration of potential criminal misconduct involving PG&E and NRC; however, it declined prosecution.

It is recommended that this investigation be closed to the files of this office for the following reasons: the USAO declined prosecution of investigation, NRC individuals involved are no longer employed by the federal government, the OIG could not substantiate collusion between PG&E and NRC, the OIG briefed the current NRC Region IV regional administrator on performance concerns with appearance of a loss of 9 Union of Concerned Scientists.

10 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION independence by the DPO panel for using PG&E for technical assistance, the Region IV regional administrator committed to reviewing agency policies, and the NRC also addressed this issue by providing additional guidance and resources.

11 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USE ONLY OIG INVESTIGATION lt-.lFORMATION

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0 NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 October 6, 2020 OFFICE OF THE INSPECTOR GENERAL MEMORANDUM TO: Concur: Case Close~*,t,~ ,,&,~

Malion Bartley CY Deputy Assistant Inspector General for vesti ations (b)(7)(C)

FROM:

Senior Special Agent, (b)(7)(Cl

SUBJECT:

NRC OVERSIGHT PERTAINING TO SEISMIC ISSUES AT THE DIABLO CANYON POWER PLANT (O/G CASE NO.15-010)

SUMMARY

OF RESULTS ALLEGATION The Office of the Inspector General (OIG), U.S . Nuclear Regulatory Commission (NRC),

proactively investigated NRC staff's oversight of Diablo Canyon Nuclear Power Plant (DCNPP}; specifically, whether NRC staff addressed seismic information and issues consistent with relevant NRG requirements for Pacific Gas and Electric's (PG&E) current licensing basis (CLB). 1 The OIG focused this investigation on the NRC's oversight of both PG&E's final safety analysis report (FSAR) and PG&E's replacement of major equipment including the steam generator and reactor vessel head.

Potential Violation: Management Directive 8.13, "Reactor Oversight Process (ROP)."

1 10 C.F.R. § 54.3, "Definitions," defines the CLB as the set of NRC requirements applicable to a specific plant and a licensee's written commitments for ensuring compliance with and operation within applicable NRC requirements and the plant-specific design basis (including all modifications and additions to such commitments over the life of the license) that are docketed and in effect. It also includes the plant-specific design basis information defined in 10 C.F.R. 50.2, "Definitions," as documented in the most recent final safety analysis report (FSAR) as required by 10 C.F.R. 50.71, "Maintenance of records, making of reports."

THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT ANO ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY- OIG INVESTIGATION INFORMATION

OfflCb\L U~c ONLY OIG INVESTIGATION FORMATION FINDINGS The OIG found that the NRC provided oversight after PG&E discovered incorrect seismic design criteria at DCNPP in accordance with MD 8.13. Specifically, the NRC inspected and issued violations to PG&E for inadequate maintenance of its FSAR that impacted the accuracy of its CLB. We also determined that Region IV inspectors monitored the Licensing Basis Verification Project (LBVP), which was PG&E's corrective action addressing the violation, for more than 4 years after the LBVP was initiated.

We also found that the NRC inspected the prompt operability assessments (POAs)2 and the Nuclear Steam System Supply (NSSS) project; the NSSS project reanalyzed the safety components with the correct seismic design criteria. Furthermore, staff performed an inspection under 10 C.F.R. 50.59, "Changes, tests and experiments,"

which allows for changes to the plant without prior NRC approval, and issued a violation for PG&E's change in analysis methodology during the NSSS project. Additionally, in October 2015, the NRC issued a noncited green violation for 10 C.F.R. 50, Appendix 8, Criteria 111, "Design Control," for the failure to include the Hosgri plus Loss of Coolant Accident (LOCA) load. 3 BASIS OF FINDINGS BACKGROUND AND CHRONOLOGY DCNPP was designed in the 1960s, received its construction licenses in the 1970s, and was issued full power facility operating licenses by the NRC for Units 1 and 2, in 1984 and 1985, respectively. The CLB includes the FSAR that documents the design requirements for safety components that are commonly referred to as safety structures, systems, and components (SSCs4 ); it is the SSCs that provide reasonable assurance that the facility can be operated without undue risk to the health and safety of the public.

According to NRC's ROP, inspectors use plant FSARs to obtain, verify, and evaluate information during inspections. This includes 10 C.F.R. 50.59 inspections for changes to SSCs.

2 In accordance with IMC 0326, "Operability Determinations," a POA- is how the licensee determines if there is reasonable ass.urance a safety component can perform its specified safety function.

• 3 Hosgri is the name of the seismic fault found during DCNPP's initial licensing.

4 The SSCs in nuclear power plants are required to comply with the American Society of Mechanical Engineers Boiler and Pressure Vessel Code as described in 10 C.F.R. 50.55a, "Codes and standards." Examples of design criteria are tables within FSARs that contain the numerical parameters for "Load Combination and Stress Criteria."

Additionally, the design basis identifies methodologies, or the calculational framework, used in the design analysis.

2 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL u:,c ONLY - OIG INVESTIGATION FORMATION During a routine 2010 ROP inspection, the NRC questioned the adequacy of DCNPP's FSAR and issued a violation: To address the inspection violation, PG&E performed two root cause evaluations that substantiated concerns with FSAR infonnation. In November 2010, PG&E initiated the LBVP to assess whether the DCNPP licensing .

basis had been adequately maintained and to correct any identified deficiencie$ since completion of the original FSAR.

During the early stages of the LBVP, PG&E identified a significant design concern:

PG&E found a FSAR error that it had omitted the load combination for the Hosgri plus LOCA load. This omission has ~een present in all FSAR versions since initial issuance in 1984, indicating that any components replaced from 1984 to 2010 did not have the load combination necessary.

Several .safety components, *including the steam generator and reactor vessel head, were replaced in the early 2000s and used the incorrect FSAR information. Therefore, PG&E initiated two actions to correct the issue. First, in January 2011, PG&E performed a POA for the nonconforming condition of omitting this load in replacement safety components. The NRC inspected the POA, found the components met DCNPP's CLB, and reported no findings in its Integrated Inspection Report.

Second, the licensee commissioned the Nuclear Steam System Supply (NSSS) project to reanalyze all the safety components to include the Hosgri plus LOCA load the in calculations. For one of the methodologies used for this analysis, PG&E initially submitted to the NRC a liGense amendment request, but that request was withdrawn and the licensee completed a 10 C.F.R. 50.59 review, which determined that the change in the methodlogy met NRC criteria.

In 2015, nearing the completion of the LBVP, which took more than 5 years, PG&E revi~ed its POAs that addressed the correction of the error for omission of the Hosgri plus LOCA load for replaced safety components.

NRC's OVERSIGHT OF THE LBVP Region IV staff that PG&E voluntarily initiated the LBVP program in 2010 to reconstitute its design and licensing basis as described in DCNPP's CLB. PG&E informed the public of the LBVP and stated its objectives and time frame for this program.

The OIG learned that a Region IV [blm<cl I was "informally" tasked with providing "independent oversight of this project. Although he did not follow an~ ,...,.,,..,..._,,

inspection procedure or any other specific guidance document, the Region IV r b)(l)(C) r b)(l )(C) Iused his experience and knowledge to provide oversight of this project.

3 THIS DOCUMENT IS THE PROPERTY OF THE U.S . NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY-OIG INVESTIGATION INFORMATION

OFFICIAL USt: ONLY OIG INVESTIGATION .FORMATION 7

Specifically, we were told that the Region 1vi<bl< l<Cl

• Communicated often, both verbally and in writing, with the PG&E rb)(?)(C) I l(b)(7)(C) I

• Performed site visits to verify FSAR information and corrective actions approximately once *per year.

• Presented a comprehensive overview of the LBVP several times to Region IV management, to include all the acting RAs qver the time period.

7

• Informally communicated the status of the project to his l<b_ L..>< _J<c_>_ ___,

Region IV senior managers told us they were happy PG&E initiated the LBVP without an NRC order or any other regulatory action. Since this project was voluntary, Region IV did not perform any special inspections-. Also, Region IV senior managers told us that PG&E complied with its operating licensing basis because ~he licensee performed many POAs and 10 C.F.R. 50.59 evaluations during the LBVP, initiated hundreds of corrective actions to address concerns found, and_did not self-identify any issues that met the criteria to report as a noncompliance. Additionally, Region IV inspectors monitored LBVP activities and did not find any issues.

NRC'S OVERSIGHT OF METHODOLOGY CHANGES 7

In Octobe_ r 2014, an NRC Regio_n 1vfb>< l<C> l chose as a 10 C.F.R. 50.59 inspection sample the methodology change that was used for the NSSS project, and that inspector contacted the NRC Headquarters' 10 C.F.R. 50.59 expert for technical assistance. In 2015,*the NRC issued a noncited violation of 10 C.F.R., Part 50, Appendix B, Criteria 111, "Design Control." .-,--~-~ *

• We learned from the Region 1vl<bH7><c> lttiat it was a "red flag" when he noticed that the licensee had previously submitted a license amendment request (LAR) for this methodology change, withdrew the LAR, and then made the change under 10 C.F.R. 50.59. .While reviewing the evaluation, the Region IV inspector summarized his concerns and interpretations of the Nuclear Ener y Institute 96-07 guidance in an email to the expert. Thereafter, the Region IV :b)C7)CC) said that he communicated with the expert several times, discussed with Region IV management his concerns, and then issued the violation for an inappropriate reference.

The Region I\/ICbX7)cc) Itold the OIG that DCNPP expeditiously corrected this issue and provided the NRC with another reference plant that had a similar application that was previously approved _(i.e., now-shut-down Fort Calhoun Nuclear Generating Station,

.4 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL USe ONLY OIG INVESTIGATION FORMATION Nebraska). The Re ion IV i<7><C> !reviewed this new reference and agreed. The Region IV (bl<7><C> told the OIG that the immediate closure of this issue had an impact on the enforcement process because it might have been a higher level violation had the licensee not been able to cite a similar-plant's application.

NRC*Region IV managers told us that they did not believe the staff needed to review the 10 C.F.R. 50.59s inspections done for the replacement components after the discovery of the missing Hosgri plus LOCA loads, since the POA determined the components still could perform their safety function. Additionally, since the license identified the requirement to reanalyze the components in the POA, it was captured within the regulatory framework and CLB.

Since we found through this investigation that the NRC provided oversight of PG&E's CLB, it is recommended that this case be closed to the files of our office.

5 THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION

OFFICIAL U$c ONL't" - OIG INVESTIGATION FORMATION Distribution:

Case File No.15-010 Magnum OFC 01 OIG/AIGI OIG/AIGI DIG IG (b)(7)(C)

NAME n.,..

3/4fee R. J. F DATE /2020 '1 ID/2020 ? IL .2 020 f!l 2020 <\13a2020 Io 1ofi2020 OfFlelAI: REeORB GQP¥ 6

THIS DOCUMENT IS THE PROPERTY OF THE U.S. NUCLEAR REGULATORY COMMISSION, OFFICE OF THE INSPECTOR GENERAL (OIG). IF LOANED TO ANOTHER AGENCY, IT AND ITS CONTENTS ARE NOT TO BE REPRODUCED OR DISTRIBUTED OUTSIDE THE RECEIVING AGENCY WITHOUT OIG'S PERMISSION.

OFFICIAL USE ONLY - OIG INVESTIGATION INFORMATION