ML24204A242
| ML24204A242 | |
| Person / Time | |
|---|---|
| Issue date: | 11/01/2024 |
| From: | Andrea Veil Office of Nuclear Reactor Regulation |
| To: | Fosaaen C NuScale |
| Felts, R., NRR/DRO, 301-415-8529 | |
| Shared Package | |
| ML24177A234 | List: |
| References | |
| Download: ML24204A242 (2) | |
Text
Ms. Carrie Fosaaen Vice President, Regulatory Affairs NuScale Power, LLC 1100 NE Circle Blvd., Suite 200 Corvallis, OR 97330
SUBJECT:
REQUEST FOR NRC ACTIONS TO PROMPTLY ENABLE CONSTRUCTION OF ASME CODE ITEMS WITHOUT AN OWNER
Dear Ms. Fosaaen:
Thank you for your letter dated June 21, 2024, requesting that the U.S. Nuclear Regulatory Commission (NRC) take prompt action to enable construction of American Society of Mechanical Engineers (ASME) Code items without the establishment of an Owner (Agencywide Documents Access and Management System Accession (ADAMS) Accession No. ML24177A233). The NRC has explored potential flexibilities in our existing regulatory framework to develop this response.
In brief, NuScale has requested reconsideration of the NRC staffs conditional approval of ASME Code Case (CC) N-883, Construction of Items Prior to the Establishment of a Section III, Division 1 Owner,Section III, Division 1, which limits use of CC N-883 to specific categories of licensees. NuScale requests that the NRC approve use of CC N-883 by unlicensed entities.
NuScale also requests that the NRC issue an order to establish CC N-883 as a requirement for NuScale for the construction of ASME Code components to be transferred to a U.S. Owner.
NuScale is not an NRC licensee or applicant for an NRC license. NuScale entered into a commercial contract with an ASME Certificate Holder for the fabrication of components, but no NRC licensee or applicant for an NRC license was a party to the contract. The Atomic Energy Act of 1954, as amended (the Act), does not require a license to fabricate such components and ASME Certificate Holders currently do not need to obtain NRC licenses to fabricate components under the ASME Code for use in NRC-licensed facilities. As explained below, the NRC does not have regulatory authority over ASME Certificate Holders who are unlicensed, except to the extent they are acting as contractors to or suppliers of an NRC licensee or license applicant.
Because no NRC licensee or applicant for an NRC license was a party to NuScales commercial contract, the NRC cannot require or allow the use of CC N-883 as requested.
The staff notes that the engagements needed to ascertain the appropriate regulatory approach for the requested activities did not occur. For example, the NRC staff was not aware that NuScale entered into a commercial contract for long-lead materials for a reactor pressure vessel (RPV) for use on future fabrication of NuScale RPVs with another ASME Certificate Holder in November 2022 until NuScale issued its press release announcing this contract. NuScale entered into this contract before an applicant submitted an application to the NRC for a limited work authorization, construction permit, operating license, or combined license referencing the NuScale standard certified design or standard design approval (SDA) application; no NRC licensee or license applicant was a party to this contract. NuScale did not engage with the staff on the challenges that would be created by such an arrangement. NuScale subsequently November 1, 2024
C. Fosaaen informed the staff that the materials are intended to be procured and retained in the fabricators inventory system for future use on an ASME-Code-stamped RPV, and NuScale will neither procure nor take physical possession of any materials for use in the fabrication of an RPV.
Accordingly, and because these materials were procured under a commercial contract, and not by an NRC licensee or applicant for an NRC license, the NRC does not have any regulatory authority with respect to these items.
Below, I respond to and clarify some information presented in your letter. I also provide in the enclosure to this letter a discussion of the actions taken by the NRC staff since receipt of your original request for approval of a Title 10 of the Code of Federal Regulations (10 CFR) 50.55a(z)
ASME Code alternative in a letter dated December 14, 2022 (ADAMS Accession No. ML22348A266). The NRC appreciates the circumstances surrounding this request and, as discussed below, is working diligently to identify a long-term solution to the question of how a component fabricator can qualify components as nuclear-grade in the absence of an Owner.
As an initial matter, NuScale included the definition of construction provided in the ASME Code to support its analysis of 10 CFR 50.10 as part of its request for the NRC staffs unconditional approval of CC N-883.1 The definition of construction in the ASME Code differs from the definition of construction in 10 CFR 50.10. Specifically, 10 CFR 50.10(a)(2)(viii) excludes the procurement or fabrication of components or portions of the proposed facility occurring at other than the final, in place location of the facility from the definition of construction under Part 50.10, for which a license is required. The definition of construction in the ASME Code, in contrast, applies to the fabrication of components under the Code. Your letter appears to use these different definitions of construction interchangeably, but the two definitions are mutually exclusive.
As to your request for the NRC to take prompt action to enable construction of ASME Code items without the establishment of an Owner (here meaning fabrication of components in accordance with the ASME Code by an ASME Certificate Holder), the NRC does not currently have the regulatory authority in accordance with the Act to carry out this request as written (i.e., without rulemaking). The Act focuses on regulating licensees. The NRC has jurisdiction over unlicensed entities in certain limited circumstances not present hereif, for example, they possess regulated material or a facility that requires a license. Beyond that, the structure of the Act plainly indicates that Congress limited the Commissions authority to holding licensees and their agents responsible for assuring adequate protection of the public health and safety and the common defense and security. Further, neither an SDA nor a Design Certification rule (DCR) is a license, and neither one confers specific rights or obligations on the entity who applied for it, unless that entity serves as a contractor or subcontractor for an NRC licensee or applicant for a license.
Absent such status, the NRC has no regulatory authority over such an entity. Nevertheless, NuScale could take actions within the existing regulatory framework. Each of these actions necessarily involves some risk for NuScale.
In the near term, NuScale may wish to consider applying for a manufacturing license. To be acceptable, NuScales application would have to meet the requirements in 10 CFR Part 52, Subpart F, and include the structures, systems, and components (SSCs) NuScale proposes to begin fabricating or procure, as well as the necessary technical information describing a device 1 Enclosure 1 to NuScales June 21 letter uses the definition of Owner from the American Society of Mechanical Engineers (ASME) Code with the plain language meaning - i.e., that a person is a legal owner of components or will eventually own a reactor (need a license to acquire the reactor and subsequently own it) - even if the person is not a licensee or an applicant for a license.
C. Fosaaen or equipment that is capable of making use of special nuclear material as specified in the Act.
This option would allow NuScale to be considered an Owner under ASME standards once the application is docketed, and NuScales design and fabrication of its reactor then would be under the NRCs jurisdiction. To the extent it is applicable, NuScale could leverage information it has already submitted to support its Certified Standard Design or its SDA application to develop an acceptable manufacturing license application under Part 52. Should NuScale wish to pursue a manufacturing license, we encourage preapplication engagement to provide certainty of information needs as well as to begin interactions that can enable progress in the very near term.
The manufacturing license approach would not apply to components that have already been manufactured without an Owner as defined in the ASME Code. To use such a component, an applicant or licensee will need to demonstrate that the component meets the applicable requirements of the ASME Code, as incorporated by reference in 10 CFR 50.55a (e.g., by reconciliation), and is capable of performing its safety function as demonstrated by a process meeting the QA requirements of 10 CFR Part 50, Appendix B. Should an applicant or prospective applicant for an NRC license wish to use components without an Owner, we recommend that the applicant engage with the NRC to ensure the acceptability of using such components in the proposed facility. Here, if NuScales intent is to enable a future NRC licensee or license applicant to use the forgings fabricated in accordance with the commercial contract NuScale entered into in November 2022, NuScale could propose methods for accepting these forgings that can be discussed in public meetings to frame the regulatory path that will resolve this specific issue.
Longer-term solutions involve rulemaking. For example, rulemaking could be undertaken to allow the use of components fabricated without the participation of an applicant or licensee (that is, when a reactor designer orders components from a Certificate Holder before an NRC licensee or applicant for a license has been identified). Such a rulemaking would call for specific conditions to be met, such that NRC Appendix B to 10 CFR Part 50 and 10 CFR Part 21 requirements can be satisfied. Alternatively, a rulemaking might be possible to revise the definition of utilization facility to include major components and to create a regulatory scheme that would allow vendors to obtain licenses to fabricate components (the ASME Certificate Holder itself would be directly licensed and stand in the place of an Owner). In several public meetings, the NRC staff has inquired as to whether a rulemaking revising the definition of utilization facility would be beneficial for current and/or future applicants. Both rulemakings raise technical, policy, and legal issues for Commission consideration and public stakeholder comment. Even if the Commission approves entering into the rulemaking process, both the outcome of the rulemaking, and its timetable, are uncertain. Moreover, any rulemaking approach would be prospective and would not apply to components that have already been fabricated or manufactured.
In summary, the NRC staff has determined that under the current regulatory framework, the NRC does not have the regulatory authority to grant NuScales request as written without conducting rulemaking. However, NuScale can proceed with manufacturing components at risk without NRC approval; an NRC licensees ability to use these components would be subject to an acceptance process to be proposed by NuScale and/or other industry representatives (e.g., potential users of the components), and discussed in future public meetings with the staff. The NRC staff is currently analyzing the different rulemaking pathways. In the short term, NuScale may wish to consider applying for a manufacturing license and/or submit a petition for rulemaking for longer-term regulatory predictability.
If you have any questions, please contact Russell Felts at (301) 415-8529 or by email at Russell.Felts@nrc.gov.
C. Fosaaen Sincerely, Andrea D. Veil, Director Office of Nuclear Reactor Regulation
Enclosure:
NRC Staff Assessment of Potential Flexibilities.
Signed by Veil, Andrea on 11/01/24
- via econcurrence NRR-106 Office NRR/DRO/IQVB NRR/DRO/IQVB/BC NRR/DNRL/NLIBLA NRR/DNRL/NRLB/PM Name MFitzgerald KKavanagh SGreen PChowdhury Date 9/26/24 9/26/24 9/24/24 9/26/24 Office NRR/DNRL/NRLB/BC NRR/DRO NRR/DNRL/D NRR/DD(A)
Name MJardaneh RFelts MSampson MFranovich Date 9/25/24 9/26/24 10/16/24 10/23/24 Office OGC NRR/D Name RWeisman AVeil Date 10/23/24
Enclosure NRC Staff Assessment of Potential Flexibilities.
In December 2021, the U.S. Nuclear Regulatory Commission (NRC) staff conditionally approved American Society of Mechanical Engineers (ASME) CC N-883 in Regulatory Guide (RG) 1.84, Design, Fabrication, and Materials Code Case Acceptability, ASME Section III, Revision 39, for use only for the fabrication of items by a holder of a construction permit, operating license, or combined license under 10 CFR Part 50 or Part 52.1 Under the NRCs current regulatory framework, the NRC does not have regulatory authority over ASME Certificate Holders except to the extent they are acting as contractors to or suppliers of an NRC licensee or license applicant.
As a result, the NRC conditioned the use of CC N-883 for entities that fall under its regulatory authority (e.g., holder of a construction permit, operating license, or combined license).2 The NRCs condition for approving use of CC N-883 simply reflects the restriction that the code case already includes.
Since the receipt of NuScales 10 CFR 50.55a(z) request in a letter dated December 14, 2022, the NRC staff has been considering how to address the generic issue of fabrication of ASME Code components by ASME Certificate Holders within the regulatory authority of the NRC without the establishment of an Owner.3 As part of this effort, in mid-2023, ASME formed a Task Group to make changes to CC N-883 to address the NRC staffs comments to the Code Committee on CC N-883 to enhance CC N-883 in preparation for a future request for its use. The NRC staff worked with the ASME Task Group to ensure all the NRCs comments were properly addressed. If approved by ASME, the NRC could expand the applicability of CC N-883 in RG 1.84 to include manufacturing licenses. The NRC staff cannot expand the applicability of CC N-883 to persons who are not NRC licensees or applicants for an NRC license without a Commission-approved rulemaking. Absent a Commission-authorized rulemaking, the NRC staff does not foresee seeking that expansion.
1 The Code Case includes the provision in jurisdictions having no specific provisions for the use of this Case, this requirement does not apply[.] It is the NRC staffs understanding that this provision was developed and included by ASME staff to address international stakeholders processes, and to identify ASME as a global standards development organization, because CC N-883 can be used in any country. Nonetheless, the NRC cannot authorize use of CC N-883 by NRC licensees or license applicants without specific provisions to approve it.
2 As noted on the slides for the public meetings on CC N-883 and in the NRC staffs meeting summary (Agencywide Documents Access and Management System (ADAMS) Accession No. ML24164A200), the NRC staff acknowledged that NCA-3211.19(e) limits the construction of items without an Owner to pumps, valves, and some supports to 4 inches nominal pipe size (NPS) or less and that the technical basis for NCA-3211.19(e) continues to be applicable for advanced and small modular reactors. The technical basis has not been developed for ASME code items greater than 4 inches NPS. Further, the requirements of Appendix B to 10 CFR Part 50 are only applicable to NRC license applicants and licensees. As ASME Certificate Holders not acting under a procurement contract with an NRC licensee or license applicant are neither an NRC license applicant nor a licensee, those entities remain outside of the NRCs regulatory jurisdiction. The NRC staff would only have regulatory jurisdiction if an NRC license applicant or licensee were part of the procurement.
3 The NRC staff informed NuScale in a February 2, 2023, public meeting that it would not be able to approve the request as NuScale had no standing under 10 CFR 50.55a(z) since NuScale was neither an NRC license applicant nor a licensee (ML23090A194).
2 During this time, the NRC staff also held two public meetings (ML24164A200 and ML24218A197) to discuss with external stakeholders several potential ideas being considered by the staff for inclusion of CC N-883 into RG 1.84, and to provide an opportunity for external stakeholders to share their views. Four ideas were discussed during these meetings: (1) using the existing Vendor Inspection Program (VIP) to perform inspections at the ASME Certificate Holders facility; (2) using a voluntary ASME Code inspection program instead of the VIP; (3) developing a regulatory framework to issue specific licenses for construction of items by ASME Certificate Holders; and (4) taking no further action. NRC vendor inspections of ASME Certificate Holders facilities are conducted based on safety-related procurement contracts between the ASME Certificate Holders and NRC license applicants or licensees that impose the regulatory requirements of Appendix B to 10 CFR Part 50 and 10 CFR Part 21. Without a license applicants or licensees safety-related procurement contract with a vendor, the NRC does not currently have the regulatory authority to conduct vendor inspections at ASME Certificate Holders facilities; and jurisdiction over a vendor cannot be established on a voluntary basis.
Following the public meetings, the NRC staff also considered whether its regulatory authority with respect to a standard design approval (SDA) or Design Certification rule (DCR) could be a potential way to allow for the fabrication of items under the ASME Code without an Owner.
However, the NRC only has authority over licensed entities and applicants for a license, and neither an SDA nor a DCR is a license; nor does an SDA or DCR confer any specific rights or obligations on the entity that applied for it. Any duties the NRC imposes on a person who applied for an SDA or DCR arise from that persons status as a contractor (including a supplier or consultant) or subcontractor for an NRC licensee or an applicant for an NRC license. Absent this status, the NRC has no regulatory authority over such an entity. Therefore, the NRC determined that it does not have the authority to treat a holder of an SDA or a DCR as an Owner under the ASME Code. Consequently, the NRC cannot include SDA or DCR in the conditional endorsement of the ASME CC N-883.