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PUBLIC MEETING 2
U.S. NUCLEAR REGULATORY COMMISSION 3        FIRSTENERGY NUCLEAR OPERATING COMPANY 4
5 6    Meeting held on Tuesday, May 24, 2005 at 7  6:00 p.m. at Camp Perry, Clubhouse #600, Port 8  Clinton, Ohio, taken by me, Marlene S. Lewis, 9  Stenotype Reporter and Notary Public in and for 10  the State of Ohio 11 12              -----
13 PANEL MEMBERS PRESENT:
14 U.S. NUCLEAR REGULATORY COMMISSION 15 Steve Reynolds, Chairman for 0350 Panel 16              Davis-Besse facility 17      Christine Lipa, Branch Chief, NRC 18      William Ruland, Vice Chairman, MC 0350 Panel 19      Christopher (Scott) Thomas, Senior Resident Inspector 20 Jon Hopkins, Senior Project Manager -
21                  Davis Besse 22 23 24 25 MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
2 1      MR. REYNOLDS:              Good evening. Can 2  everyone hear me okay? Good evening. Can the 3  people in the back hear me?
4      (Indicating).
5      Okay, thank you. I'd like to welcome 6  everybody to this meeting. This is a meeting 7  between the United States Nuclear Regulatory 8  Commission and FirstEnergy Nuclear Operating 9  Company to discuss -- talk about Davis-Besse.
10      I'd like to welcome Mark Bezilla and your 11  staff, and members of the public and local 12  officials out in the audience. Appreciate you 13  taking the time tonight to come out here for this 14  important meeting.
15      Like I said, this is a public meeting between 16  the Nuclear Regulatory Commission, NRC, and 17  FirstEnergy Operating Company, FENOC, or the 18  licensee.
19      My name is Steve Reynolds, I'm the Chairman of 20  the 0350 Panel. With us also tonight -- and I'm 21  also the Deputy Director of the Division of 22  Reactor Projects in our Region III office, which 23  is in Lisle, Illinois just outside of Chicago.
24  This is a public meeting open for you all to see.
25  At the end of the meeting between Davis-Besse and MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
3 1  the NRC, the NRC will be available for questions 2  and answers. The purpose of the meeting and I'll 3  talk about that more on the slide, next slide, but 4  really it's to talk about our activities, NRC 5  activities, that led up to this meeting and our 6  activities going forward, and we'll hear from the 7  licensee about -- we'll hear from the licensee, 8  how they see themselves, where they've been the 9  last couple years, their commitments to 10    themselves, to us, and to you members of the 11    public going forward, and we'll talk a little bit 12    about our processees so you understand when we 13    talk about 0350 and the oversight process processes and 14    different columns, and, hopefully, you'll get a 15    better understanding of that, so it's been a 16    while, a number of years since Davis-Besse has 17    been in reactor -- again, like I said, at the end 18    we'll be available for questions.
19      There's a copy of the slides, I see many of 20    you have them, and that's good. There's also out 21    in front, there was a feedback form. We'd 22    appreciate if you would take the time to fill 23    those out. We hand those out at all of our 24    public meetings. Just like any other 25    organization, we try to improve our activities and MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
4 1  any feedback you have on how to make this a more 2  informative public feedback forum. You can give 3  it to any one of us here at the NRC or fold it up 4  and stick it in the mail. Next slide.
5      This meeting along with us and FirstEnergy is 6  really for you in the audience to inform you 7  what's going on and the transition of our 8  processees at Davis-Besse, continuing our NRC 9  oversight, we'll talk about what that means, and 10  what's the extras, discuss our Assessment of 11  Perry -- excuse me, Davis-Besse's, plant 12  performance, give the licensee a chance and we'll 13  receive public comments and answers and questions 14  from the public. Next slide, and at this time, 15  I'd like to --
16      MS. LIPA:        It's back at the agenda 17  slide.
18      MR. REYNOLDS:            Oh, I'm sorry. Just have 19  people from the NRC introduce themselves and then, 20  Mark, you can introduce your staff, so --
21      MR. RULAND:            I'm Bill -- excuse me, I'm 22  Bill Ruland. I'm the Vice Chairman of the 23  Davis-Besse 0350 Panel, and I'm a manager from 24  NRC's headquarter's office in Rockville, Maryland.
25      MR. HOPKINS:          I'm Jon Hopkins, Senior MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
5 1  Project Manager from headquarter's Headquarters, NRC, office of 2  Nuclear Reactor Regulation, and a member of the 3  0350 Panel.
4      MS. LIPA:        My name is Christine Lipa 5  and I'm the Branch Chief in the Region III office.
6      MR. REYNOLDS:            They can't hear you back 7  there.
8      MS. LIPA:        My name is Christine Lipa, 9  and I'm the Branch Chief out of the Region III 10  office, and I'm responsible for the NRC's 11  inspection program at Davis-Besse.
12      MR. THOMAS:          My name is Scott Thomas, 13  I'm a the Senior Resident at the Davis-Besse 14  station.
15      MR. REYNOLDS:          Scott, will you introduce 16  the rest of your staff?
17      MR. THOMAS:          Oh, I'm sorry. Jack 18  Rutkowski is also a resident, and Monica 19  Salter-Williams is also at the site, and, oh, 20  Nancy Keller is out front, I don't want to forget 21  Nancy, she's the office assistant at Davis-Besse 22  resident office.
23      MR. REYNOLDS:          And then where's Alex?
24  Oh, over there, and Alex Garmoe, he works with 25  Christine and I in our office in Lisle.
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
6 1      MR. HOPKINS:          Also attending from NRC 2  headquarters is Sarah Brock. She's from our 3  office, general counsel Office of General Counsel.
4      MR. REYNOLDS:            Mark?
5      MR. BEZILLA:        Thanks, Steve. To my 6  right is Steve Loehlein, Director of Engineering.
7  Next to him is Barry Allen, Site Director of 8  Operations. To my far left is Kevin Ostrowski, 9  Manager of Operations. Next to him is Ray Hruby, 10  Manager of Nuclear Oversight, and next to me is 11  Bob Schrauder, Director of Performance 12  Improvement, and in the audience we also have Lew 13  Myers, our Chief Operating Officer; Joe Hagan, our 14  Senior Vice President, and Judy Wrinkel, Vice 15  President of Fleet Oversight.
16      MR. REYNOLDS:          Thank you. Also, if we 17  have any local officials that want to identify 18  themselves, please do so.
19      MR. PAPCUN:            John Papcun, Ottawa County 20  Commissioner.
21      MR. REYNOLDS:          Thanks, John.
22      MR. ARNDT:          Steve Arndt, Ottawa County 23  Commissioner.
24      MR. REYNOLDS:          Thanks, Steve.
25      MR. KOEBEL:          Carl Koebel, Ottawa County MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
7 1  Commissioner.
2      MR. REYNOLDS:            Thank you, Carl.
3      MR. WHITT WITT:                Jere Whitt Witt, County 4  Administrator.
5      MR. REYNOLDS:            Thanks, Jere. We 6  appreciate you taking the time out tonight to come 7  here, and, with that, Christine, I'll turn it over 8  to you.
9      MS. LIPA:          Okay, thank you, Steve.
10  The next slide talks about the 0350 Panel time 11  line, so what I'll just do is I'll review briefly 12  the -- how the 0350 Panel came in to existence and 13  the key milestones along the way.
14      Obviously, on March 6, 2002 was the discovery 15  of the degradation in the reactor vessel head, and 16  that really began some NRC activities that led to 17  the formation of the 0350 Panel on April 29th.
18      Last year on March 8th, after going through 19  our 0350 process, leading up to the decision to 20  allow restart at the facility, we implemented that 21  process and issued an Approval to Restart and a 22  Confirmatory Order, and that was issued on March 23  8th, 2004. Then part of the Confirmatory Order 24  was for Davis-Besse to do independent assessments 25  in four areas and then also to do a mid-cycle MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
8 1  outage and inspect the vessel for any leakage.
2      On February 3rd, Davis-Besse completed their 3  inspections and reported to the NRC they found no 4  evidence of leakage from the operating bottom of 5  the vessel.
6      Then on May 19th is when we transitioned the 7  0350 process where we talked about what activities 8  need to be met to transition out of the 0350 9  process and into the reactor oversight process, 10  and we'll talk more about that. And the 11  transition is to Comp Column 2 of our oversight process 12  and inspection, and then July 1 is at the end of 13  the quarter, it's actually when this takes effect.
14      The next slide talks about part of the 0350 15  process, the assessment that the panel went 16  through to make the determination to return 17  Davis-Besse to the reactor oversight process, and 18  these are mostly words that come right out of our 19  processes and the panel determined for Davis-Besse 20  specific attributes. The NRC performance 21  indicators is part of the ROP, reactor oversight 22  process, ROP, and because of the long-term 23  shutdown some of those performance indicators were 24  not necessarily valid. They might have been 25  green, but they might not have been fully green MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
9 1  for us to do the initial inspection in those 2  areas, so by the end of calendar year 2004, we 3  determined that those performance indicators are 4  now meaningful indicators of performance in those 5  performance areas.
6      Then the next criteria was that the licensee 7  had established an effective long-range 8  improvement plan. The next criteria was licensee 9  sufficiently implemented their Corrective Action 10  Program, and we did additional inspections 11  throughout calendar 2004 to verify these criteria 12  and make sure the criteria was met. The next is 13  Demonstrating Safe Plant Operation and Overall 14  Improving Performance, and then, finally, that the 15  utility had adequate controls in place to address 16  the reasons why we implemented 0350 to begin with.
17      MR. REYNOLDS:            Let me jump in here before 18  you go onto the next slides, a little bit more 19  about how this process worked internally to the 20  NRC. Our panel went through all the different 21  activities the licensee had performed, along with 22  inspections. We met, we made our recommendations 23  to my boss, the regional administration, Jim 24  Caldwell, who is in charge of Region III office.
25  Mr. Caldwell then discusses the removal of the MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
10 1  0350 Panel with Jim Dyer, who is the Director of 2  Office at Nuclear Reactor Regulations here with 3  Bill Ruland and Jon Hopkins and then those two met 4  with our Deputy Executive Director of Operations, 5  who is Bill Cane Kane, and the three of them, based on 6  our recommendations, decide whether or not it's 7  time for Davis-Besse to transition from 0350 to 8  ROP, and they did that, so I just want to give you 9  a little more insight. It was more than just this 10  panel. It was the -- the top agency official 11  making the decisions based on the Panel's 12  recommendations that it was time for Davis-Besse 13  to transition.
14      MS. LIPA:          Okay, thanks for that 15  additional information. Okay, and then the next 16  slide talks about NRC Oversight, so now we're 17  going back to the reactor oversight process which 18  we'll talk in a little more detail later, but we 19  wanted to emphasize that, even though we're going 20  to the ROP, we will conduct inspections beyond --
21  typically what it requires for beyond RO 2 is required for Column 2, we'll 22  talk about Column 2, but the first thing we wanted 23  to talk about was our Inspection of the 24  Independent Assessment required by the 25  Confirmatory Order issued on March 8th.
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
11 1      MR. THOMAS:            And I think just a little 2  more specific on this, the additional inspection 3  or the Confirmatory Order required additional 4  inspections in the area of -- or excuse me, 5  independent assessments in the area -- is that 6  still on? Can you all still hear me? There we 7  go -- in the area of corrective actions, 8  operation -- operation, safe --
9      MS. LIPA:          Try this one.
10      MR. THOMAS:            Hello? Hello? Hello?
11  There we go, the order required independent --
12      MS. LIPA:        Keep talking, he's 13  probably adjusting.
14      MR. THOMAS:            -- independent -- okay.
15  The order required independent assessments in the 16  area of operations, corrective actions, safety 17  culture and engineering. Those were done for 18  calendar year 2004. They are scheduled to be done 19  for calendar year 2005. For each of those 20  independent assessments, the inspectors will be 21  evaluating the inspection plans that the teams 22  will be doing their inspections or their 23  assessments in accordance with as well as the 24  individuals that will be evaluating the 25  individuals' qualifications that will be doing MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
12 1  those assessments.
2      Additionally, they will be monitoring some of 3  the in process activities as well as reviewing the 4  final report to make sure that the assessment was 5  met -- was in compliance with the requirements of 6  the order.
7      Some additional inspection activity will be a 8  problem identification and resolution team inspection.
9  This is in addition to the normally required PIR 10  inspection that's done in accordance with the ROP 11  requirements. The one main focus of this -- this 12  team inspection will be the licensee's progress in 13  addressing reduction of their backlog issues as 14  well as adequacy of completing efforts that were 15  outlined in their cycle 14 improvement plan.
16  Several commitments were outlined in that plan and 17  that will be another focus -- another focus of the 18  PIR inspection. Okay, okay, so that's the 19  additional inspection activities on top of the 20  baseline ROP requirements. One other thing that 21  will be done is a 95001 inspection, which is a 22  follow-up from the White Finding EP issue.
23  That -- one clarification on that, though, is that 24  that's not part of the ROP plus inspection 25  activities. That's part of the process itself in MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
13 1  response to the White Finding and your transition 2  back to Column 2, the Action Matrix, so I think 3  I've covered everything there.
4      MR. REYNOLDS:          Let me just -- based on 5  the trouble with the mic --
6      MR. THOMAS:          Okay.
7      MR. REYNOLDS:          See if I can recap. Can 8  you hear me okay in the back still?
9      UNIDENTIFIED:        No.
10      MR. REYNOLDS:          Can you all hear me?
11  John, can you hear me back there? Can you hear me 12  now, John? Okay, thank you. I'll try to recap.
13  Basically, the reactor oversight program is the 14  normal set of inspections which we do for every 15  nuclear power plant, and Davis-Besse is going back 16  to theirs, but we're adding additional 17  inspections. We're waiting to see, we want them 18  to continue to improve and use the same 19  performance. They've progressed enough and 20  performed adequately, safely and adequately, such 21  that we're ready to transition over, not totally 22  to go back to the ROP, that's why we still have 23  the Confirmatory Order, that's why we're doing the 24  extra inspections. Thank you.
25      MS. LIPA:        Okay, thank you. The MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
14 1  next slide is a graphic of Reactor Oversight 2  Process, and what we have, and I have a more 3  detailed slide later, but we have strategic 4  performance areas, and we have safety 5  cornerstones, and in those areas we do both 6  baseline inspections, and we do this at every 7  plant in the country, and we also have performance 8  indicators, so that's kind of the two halves of 9  the slide up here, and the results from those 10  inspections and the performance indicators go 11  through a significant threshold and those are in 12  through our Action Matrix, and the Action Matrix 13  is an objective defined prior to our process that 14  determines NRC's response depending on the issues 15  that have been identified.
16      The next slide shows the -- obviously, the NRC 17  Overall Safety Mission and the -- you see the 18  three Strategic Performance Areas in yellow, 19  reactor safety, radiation safety, and safeguards, 20  and right below that are seven cornerstones, 21  cornerstones on safety, and how they're divided 22  amongst those Strategic Performance Areas, and 23  these are the areas we do inspection in all these 24  areas, and we have performance indicators in these 25  areas. At the bottom you see cross-cutting MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
15 1  areas. Those are areas that are very important 2  to human performance, safety conscious work 3  environment and problem identification and 4  resolution, and those cut across all the 5  cornerstones, and that's why they're so important.
6      The next slide shows the Action Matrix that I 7  mentioned earlier, and we've got the five boxes 8  across the top that represent the five columns in 9  that. Column 1 is Licensee Response that will get 10  the full baseline inspection and performance 11  indicators will be reviewed, and that will be the 12  extent of the program. Regulatory Response is 13  where Davis-Besse is, and that is additional 14  inspection that Scott mentioned earlier, what we 15  call the 95001, which is a special supplement 16  inspection that follows up on white performance 17  indicators and emergency preparedness and has to 18  do with the sirens, so the way the Action Matrix 19  works is, as you go from left to right, there's 20  increasing on safety significance to the issues, 21  there's increasing NRC inspection, increasing NRC 22  management involvement, and then, as we already 23  discussed, Davis-Besse is in Column 2.
24      Now, I wanted to talk about next upcoming 25  activities. We already talked about Davis-Besse MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
16 1  going to the ROP as of July 1. We'll be doing 2  what Column 2 requires, which is the full baseline 3  plus the extra inspection on the emergency 4  preparedness area. We'll also be doing 5  additional inspections. We mentioned the 6  Additional Problem Identification and Resolution 7  Team Inspection. The way that works for normal 8  plants in ROP is they would get one inspection 9  every other year. What we're doing for 10  Davis-Besse is they're getting additional -- we're 11  having one last year and this year, so this year 12  is the additional PIR inspection, and Scott also 13  mentioned in detail the Confirmatory Order and 14  other inspection.
15      We continue to have resident inspectors on 16  site and regional inspectors from Region III to do 17  the baseline program. We mentioned the 95001, 18  that's a supplemental inspection, about one 19  inspector for a week that will follow-up on the 20  white emergency preparedness issue, and it's 21  scheduled this year, and as part of the reactor 22  oversight process, which is what is known as 23  IMC0305, that's our procedure that guides the 24  process, we do quarterly assessments of the plant 25  performance and part of the reactor oversight MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
17 1  process is we would have one public meeting a 2  year, and that would be the end of cycle, cycle 3  for us would be calendar year, so at the end of 4  this calendar year, we'll be meeting in early 2006 5  to discuss performance and detail and prepare to 6  come out for a public meeting next year, and 7  that's really all I wanted to cover for some of 8  the highlights of the reactor oversight for 9  Davis-Besse and additional items performances for 10  this year and upcoming activities. Anybody else 11  have anything they want to share?
12      (No audible response).
13      Okay, what we'll do next then is turn it over 14  to FirstEnergy.
15      MR. BEZILLA:          Okay, thank you, 16  Christine. Next slide, please. Before I cover 17  our Desired Outcomes, I would just like to state 18  that we know how important assessment and the 19  drive for improvement is and ensuring excellence 20  in operating nuclear power plants. We believe 21  strongly that our efforts over the past few years 22  to assess and make effort to improve our 23  performance are bearing fruit and will provide 24  some anecdotal evidence throughout our 25  presentation tonight. Now, onto our Desired MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
18 1  Outcomes. Our Desired Outcomes are as shown in 2  the slides and will demonstrate that we're ready 3  for the normal plus reactor oversight process, 4  that our operations continue to be safe and 5  conservative and that we are working our committed 6  plan. Next slide, please.
7        Our agenda is at as follows. Barry will discuss 8  plant performance and assessments since the last 9  public meeting.
10        Bob will briefly discuss our program -- or, 11  excuse me, our progress on cycle 14 operational 12  improvement plan and our backlog reduction 13  efforts.
14        I'll discuss recent safety culture and safety 15  conscious work environment progress, and then Ray 16  will provide you with oversight perspectives.
17  With that, I'll turn it over to Barry.
18        MR. ALLEN:          Thank you, Mark. Tonight 19  I'll discuss how the strong safety focus of 20  Davis-Besse personnel has resulted in the 21  continued, safe operation. Next slide, please.
22        Davis-Besse personnel are exhibiting a strong 23  safety focus, and, as a result, the unit continues 24  to operate safely and reliably. The station is 25  currently at 131 consecutive human performance MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
19 1  success days, which is an indication of good human 2  performance on the part of our personnel. Also 3  operating with good plant materiel condition, 4  reliable safety system performance and 106 5  consecutive days of safe service since we've 6  completed our successful steam generator 7  inspection mid-cycle outage. Next slide.
8      Davis-Besse is in the inspection manual 9  Chapter 0350 oversight process. Nonetheless, we 10  internally measure our safety performance utilized 11  in the NRC's reactor oversight process performance 12  indicators. This slide indicates our current 13  safety performance utilizing the NRC performance 14  indicators. All performance indicators are 15  currently green with the exception of the alert 16  notification system reliability indicator, which 17  was discussed earlier, which will turn green at 18  the end of June. Next slide.
19      Davis-Besse continuously utilizes assessments 20  to validate and improve our safety performance.
21  Some examples of this that have been utilized 22  since our last local meeting includes on February 23  25th, we had a successful unannounced staff 24  augmentation drill to assess the readiness of our 25  emergency response organization to respond off MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
20 1  hours.
2      During the week of March 14th, we had an 3  industry accreditation visit. This assessment of 4  our technical skills training program validated 5  our own internal self evaluation report.
6      During the week of March 28th, we had a 7  thorough industry assessment of our primary 8  systems integrity. The most significant insight 9  we received was that our programs and processees processes 10  used to monitor reactor coolant system leakage are 11  comprehensive and provide management with accurate 12  information to assess reactor coolant system 13  leakage.
14      In the last week of March, we also performed a 15  self assessment of our operations training 16  program. This self assessment was performed by a 17  12 person team with two members of our training 18  organization, five members from the operations 19  line organization, three individuals from the 20  fleet, one individual from another utility, and 21  the accreditation team leader of the institution 22  of nuclear power operations Institute of Nuclear Power Operations. Next slide.
23      Our company Nuclear Review Board was also at 24  Davis-Besse on April 5th through the 7th. This 25  Board provides an independent outside assessment MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
21 1  of our safety performance, and the company Nuclear 2  Review Board concluded that the plant is being 3  operated safely.
4      During the week of April 11th, the NRC 5  conducted an inspection of safety culture and 6  safety conscious work environment at Davis-Besse.
7  Improvement was noted with encouragement to 8  continue moving forward in this arena.
9      And on April 18th, FirstEnergy President, Tony 10  Alexander, and the Nuclear Committee of the Board 11  was at Davis-Besse to perform their own 12  independent assessment of the station, and our 13  FirstEnergy President has scheduled routine 14  quarterly visits to the station. Next slide.
15      We also had a successful NRC safety system 16  design and performance capability inspection 17  beginning April 18th. We had extensive dialogue 18  with the inspection team, which resulted in the 19  identification of multiple opportunities for 20  improvement, and last week we held our emergency 21  preparedness evaluated exercise, the NRC 22  inspection of our emergency preparedness 23  performance indicators and an NRC biannual 24  maintenance inspections. These three inspections 25  went well with good dialogue between the station MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
22 1  and the inspector resulting, again, in a number of 2  improvement opportunities being entered into our 3  Corrective Action Program.
4      Additionally, State and County personnel 5  performed very well during the portion of the 6  evaluated exercise which was evaluated by the 7  Federal Emergency Management Agency. Next slide, 8  please.
9      We continuously assess to validate our cycle 10  performance and drive improvements. At 11  Davis-Besse we utilize numerous assessment tools, 12  such as our observation program wherein we observe 13  field work and training on a daily basis. Our 14  duty team members are routinely assigned 15  observations of more challenging tasks. We also 16  utilize site self assessment, for example, the 17  operations training program I mentioned previously 18  falls in this category. Examples of upcoming 19  site assessments include areas of our Corrective 20  Action Program, our emergency response 21  organization, our problem solving and decision 22  making process implementation and radio active radioactive 23  effluence. We also leverage resources to perform 24  common assessments across the fleet. We will 25  utilize this tool to assess work management MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
23 1  effectiveness, conduct of operations, and work 2  force efficiencies and effectiveness throughout 3  the remainder of the year.
4      MR. HOPKINS:            Barry, let me ask a 5  question, I may be ahead of time, but you're 6  getting to industry assessments.
7      MR. ALLEN:            Yes.
8      MR. HOPKINS:            Are you having your 9  staff -- or are they taking part in the 10  assessments of other utilities?
11      MR. ALLEN:          Jon, as a quick example, 12  the short answer is yes. In operations, for 13  instance, we've had several shift managers on 14  industry visits at numerous other stations, so 15  we're doing quite a bit of that and getting some 16  pretty positive feedback.
17      MR. HOPKINS:          All right, thank you.
18      MR. ALLEN:          In the area of industry 19  assessments, these are also utilized to allow us a 20  strong leverage that utilize industry specialties 21  to assess our performance, and examples of these 22  areas completed so far this year include our 23  technical skills training evaluation, we evaluated 24  work management, also our primary systems 25  integrity review, which I mentioned previously, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
24 1  and we also have numerous industry assessments 2  remaining this year, including areas such as our 3  Corrective Action Program, our transformers, our 4  switch yard controls, evaluation of plant 5  performance and operations training assessment.
6  We also had numerous assessments from multiple 7  oversight groups such as the organization --
8  oversight organization at Davis-Besse led by Ray 9  Hruby, the company Nuclear Review Board, which 10  reviews our performance on a quarterly basis, the 11  Nuclear Committee of the Board, which provides 12  additional oversight, our FirstEnergy President, 13  who periodically visits the station, and our 14  monthly performance review meetings with the 15  executive leadership team.
16      In addition to the assessments I've already 17  mentioned, we also have four Confirmatory Orders, 18  independent assessments of our operations 19  performance, Corrective Action Program, 20  organizational safety culture and safety conscious 21  work environment and engineering programs 22  effectiveness, which we use the Confirmatory Order 23  independent assessments as independent validation 24  of our own extensive assessment processes.
25      MS. LIPA:          The question I have for MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
25 1  you, Barry, is how do you integrate the results 2  from all these different assessments, and how do 3  you prioritize the actions you plan to take?
4      MR. ALLEN:            Christine, we utilize our 5  Corrective Action Program, all the assessments, 6  opportunities for improving and entering into our 7  Corrective Action Program, and then each of our 8  managers, each department on a quarterly basis or 9  monthly basis go back and look at all of that data 10  from all the different inputs, so we use, for 11  instance, a bidding process, the department 12  manager uses input from all these assessments, bin 13  the results, look for common things, and then the 14  senior management team will review those results 15  and look for cross-cutting things across the 16  station.
17      MS. LIPA:          So it sounds like you're 18  relying on some training --
19      MR. ALLEN:            Yes.
20      MS. LIPA:          -- to prioritize the 21  results or the plans you plan to take, and then do 22  you have action plans that you develop for each 23  one of these assessments or just for certain ones?
24      MR. ALLEN:            We have action plans, 25  again, Christine, that get entered into our MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
26 1  Corrective Action Program, so all the opportunity 2  for improvement identified will get entered into 3  our Corrective Action Program, and then we'll 4  track those through that program.
5      MS. LIPA:          Okay, thank you.
6      MR. ALLEN:            Next slide, please.
7      In summary, our people at Davis-Besse have a 8  very strong safety focus, which has resulted in 9  safety conservative operation of the unit and 10  which will ensure continued safety conservative 11  operation of the unit. That concludes my 12  presentation.
13      MR. REYNOLDS:            Barry, could you talk some 14  more about the results from the mid-cycle outage 15  both from a performance issues point of view and 16  from a safety conscious work environment point of 17  view?
18      MR. ALLEN:          We will --
19      MR. REYNOLDS:            Or if somebody will?
20      MR. ALLEN:          Mark will discuss the 21  mid-cycle outage in more detail.
22      MR. REYNOLDS:            Okay, thank you.
23      MR. ALLEN:          If there is no further 24  questions, I'll turn the presentation over to Bob 25  Schrauder.
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
27 1      MR. SCHRAUDER:            Thank you, Barry. Very 2  briefly, I want to go over the status of some of 3  the commitments that we made to you.
4      In November of 2003, as we were preparing to 5  restart the plant, we submitted to you what we 6  identified as an integrated restart report. That 7  report contained some 38 commitments of either 8  ongoing activities that we committed to continue 9  doing or additional actions that we would take to 10  ensure the continuous improvement of Davis-Besse.
11  To date, as you can see on the slide, we have 12  completed 31 of those 38 commitments.
13      We also submitted what we call the cycle 14 14  operational improvement plan, which included an 15  additional 94 commitments to the regulator that we 16  would either continue to do or additional actions 17  that we would take. To date, we have closed 71 18  of those commitments, and we are on track to 19  complete the remaining commitments that we have 20  made to you in those regards.
21      MR. REYNOLDS:          And cycle 14 ends next --
22      MR. SCHRAUDER:            Cycle 14 completes after 23  the end of the next refueling outage --
24      MR. REYNOLDS:          Which is?
25      MR. SCHRAUDER:            -- which is in the spring MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
28 1  of next year.
2      MR. REYNOLDS:          Okay.
3      MR. SCHRAUDER:          Okay, the next slide, 4  please.
5      One of the areas that we -- you and we both 6  paid particular attention to was the amount of 7  backlog items that we had open, actions to 8  complete at the site. The way we're tracking 9  that is what we call this total site open 10  documents, and these things include corrective 11  actions, condition report evaluations, corrective 12  maintenance items, elective maintenance items, 13  procedure change request, anything that requires 14  us to take action is included in the open site 15  documents report. When we came out of the long 16  outage, we had approximately 18,000 open site 17  documents to work on. In addition to that, since 18  the time that we restarted the plant, we have 19  generated an additional 14,000 roughly actions to 20  take in some regard. This graph goes back to 21  July of '04 and shows the current status of the in 22  minus the out or the reduction of the backlog of 23  items. We call that a backlog because it's over 24  and above what we would consider a normal 25  throughput or workload. We've done some industry MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
29 1  bench marking in all of the areas and have come to 2  the conclusion that for our plant and our size 3  plant a workload is somewhere between around 4,500 4  to 6,500 open documents that you can expect at any 5  given time, and our goal has been to reduce what 6  is currently a backlog down to a workload by the 7  end of this cycle, or by the end of the refueling 8  outage. This demonstrates that we are on target 9  currently to meet that goal, and we feel we're 10  doing a pretty good job of reducing the backlog 11  and converting it into an ongoing workload for us 12  that we'll be able to maintain at approximately 13  that level going forward.
14      MR. REYNOLDS:          And just to help everybody 15  out here, backlog reduction has been an area of 16  concern for the NRC and remains so, in fact, this 17  is one of the areas where we'll be doing 18  additional inspections this coming year, so, 19  again, backlog reduction is getting additional 20  inspection above the reactor oversight process 21  which was of concern.
22      MR. SCHRAUDER:          That concludes my remarks 23  unless there are any questions.
24      (NO AUDIBLE RESPONSE).
25    MR. BEZILLA:          Okay, thanks, Bob. Next MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
30 1  slide. So what is safety culture? We've defined 2  it as that assembly of characteristics and 3  attributes in organizations and individuals which 4  establishes that an overriding priority toward 5  nuclear safety activities and issues receive the 6  attention warranted by their significance.
7      And what is safety conscious work environment?
8  An environment in which personnel are encouraged 9  to identify problems, are confident that problems 10  will be effectively evaluated and corrected, and 11  are protected from any form of retaliation as a 12  result of having raised issues. I believe my --
13  the Davis-Besse people have a strong safety focus.
14  Next slide, please.
15      Prior to our steam generator inspection 16  mid-cycle outage a little over four months ago, 17  the management team adopted the following areas of 18  focus to demonstrate clear overriding priorities 19  for nuclear, industrial, radiological and 20  environmental safety. A safety versus schedule 21  focus, overall communication quality, openness of 22  communication of emergent issues, openness for 23  employee ideas for solutions to emergent plan 24  issues, resolution and disposition of emergent 25  issues and engagement of the workforce. As a MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
31 1  result of this focus and effort, I'm pleased to 2  inform you that we have seen positive results.
3  Feedback from our employees in general is 4  positive. Our employees are engaged. For 5  example, employees participate in problem solving 6  and decision making teams, and they are 7  participating in our training review committees 8  and our curriculum review committees which lay out 9  the future trainees for their respective sections 10  and departments. Management is engaged. The 11  best example here is the implementation of our 12  duty teams. The duty team has key members of the 13  staff engaged in day-to-day activities, and 14  they're available, I'll say 24 hours a day, at a 15  moment's notice to respond to any plant issues 16  that may arise, and, in a minute, I'll share the 17  results of a recent eight question survey that was 18  administered shortly after the steam generator 19  inspection mid-cycle outage. The purpose of the 20  survey was to solicit feedback from our folks for 21  the management team to see how we were doing in 22  regard to our focus areas. Also, based on some 23  input from you all as to how do you compare to 24  other nuclear sites, nuclear facilities from a 25  safety culture, safety conscious work environment MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
32 1  standpoint, we also found that industry group 2  utilities services alliance that conducts safety 3  culture assessments very similar to the survey 4  that we conduct on an annual basis in accordance 5  with our nuclear operating practice. We spent --
6  we sent them our November 2004 survey results and 7  asked them to compare us to a recent population of 8  other facilities or peers, if you will, that they 9  had surveyed, and the results were encouraging.
10  What we saw was we were not an outlier, and in 11  some areas compared very favorably, in fact, very 12  positive to our peers. Next slide, please.
13      MR. REYNOLDS:            Mark, before you go on --
14      MR. BEZILLA:        Yes.
15      MR. REYNOLDS:            Again, I want to talk 16  about safety culture, safety conscious work 17  environment as obviously one of the areas of the 18  Confirmatory Order. The licensee, from our point 19  of view, still has to do more work there. Is it 20  safe enough right now, I think we are still 21  looking to focus on that through independent 22  assessments, and we're willing to do more 23  inspections in that area, so that's, again, the 24  extra inspections we're going to do in this area, 25  safety culture, safety conscious work environment.
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
33 1        MR. BEZILLA:          Now, Steve, the next few 2  slides are, I'll say, the results of our post 3  steam generator mid-cycle outage survey. Next 4  slide. What we have at the time is the question 5  that was asked on the survey, and then we put 6  together the results in a pie chart, and we 7  strongly agree, the agree and the generally agree 8  are in the blue, green, and dark blue. The 9  disagree and strongly disagree are in yellow and 10  red, and we did that so it would be pretty visible 11  from a distance because sometimes I know numbers 12  and things are hard to see, and what we found is 13  in the previous surveys sometimes our folks just 14  don't know or they don't have an opinion so we 15  gave them a don't know, an opportunity to just, 16  I'll say, abstain from commenting if they didn't 17  have anything from a positive or a negative or an 18  agree or disagree standpoint. So, in regard to 19  the first question here, decisions appropriately 20  weighted safety significance relative to schedule, 21  and, as we said, that was one of our focus areas.
22  You can see the results are fairly positive, I'll 23  say, in fact, very positive from our folks, and 24  some of the comments that came with the survey 25  results, and these are our people providing us MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
34 1  feedback, what we did well, problem solving teams 2  worked through issues and evaluated plant 3  conditions to determine how to proceed without 4  feeling pressured to meet schedules or at the 5  expense of safety, the outage directors and 6  assistant outage directors emphasized safety over 7  schedule. Next slide.
8      The next question was, I was kept generally 9  informed of what was happening and why, and, 10  again, you can see very positive response. A few 11  disagrees, but, in general, very positive. What 12  went well during the mid-cycle, Bob and Steve, who 13  were the outage directors put out daily e-mails, 14  and those were very well received. We had an 15  outage newsletter that helped keep our folks in 16  the know. Our morning meetings were informative 17  and detailed. Shift turnovers were very 18  thorough, and we had an outage log summary that 19  was computerized so you could get in and check 20  what was going on if you cared to on your own.
21  Those were all a number of positives.
22      One of the feedback items that we got that 23  said we could have done better on was communicate 24  how many hours behind or ahead of schedule we 25  were, and I think I mentioned it before, but we MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
35 1  made a conscious decision to not focus on 2  schedule. About a week into the outage, our 3  people couldn't stand it, and they said you got to 4  let us know where we're at in regard to the 5  critical fact path -- where we are at in regard to the 6  schedule, you got to keep us informed, so we may 7  have went too far in the one direction, but we 8  took that feedback. All right, next slide, 9  please.
10      The third question was, employees were 11  encouraged to identify emergent issues, and you 12  can see here again, very positive response by our 13  folks. Again, some of the -- what we did well 14  comments, the outage control center atmosphere was 15  open and supportive, and we were encouraged to 16  identify emergent issues as soon as possible.
17  Next slide, please.
18      Employee input was encouraged to help resolve 19  emergent issues, again, very positive response.
20  Some things on what we got -- what we did well, 21  performed problem solving -- or formed problem 22  solving teams that were multi-disciplined, 23  included the craft, encouraged to provide input, 24  not pressured to find quick solutions, and the 25  outage directors and the outage control center MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
36 1  were receptive to input, and one of the items in 2  this question that we got where we could have done 3  better was to provide better explanation of the 4  basis used to make decisions to the staff and the 5  team, and that was an area of focus, and we tried 6  to make sure we were clear on why we made the 7  decisions we made, but we got feedback, and we 8  know we can improve, and we will work to improve.
9  Next slide.
10      MR. REYNOLDS:            That's an area that I 11  think everyone assumes probably will be better --
12  not only internally, but the NRC provides the 13  basis for every decision, so if you could remember 14  internally the basis behind the decisions.
15      MR. BEZILLA:          Yes, we agree. The next 16  question, emergent issues were appropriately 17  investigated, prioritized and resolved, and, 18  again, pretty positive response from our folks.
19  A couple of things that we did well, problem 20  solving and decision making and emergent issues 21  manager helped to resolve issues in a timely, 22  focused manner. For this outage we had a number 23  of individuals, a few individuals that called the 24  emergent issues manager whenever something popped 25  up that was not part of the plan, they got it, and MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
37 1  then they had the resources to figure out, did we 2  need a problem solving decision making plan, who 3  should be on the team, what resources would we 4  need, and the team, I think, felt very positive 5  about those individuals, how they formed and, I'll 6  say, coordinated activities to resolve issues that 7  came about during the outage. Next slide.
8      I think this was the seventh question, I was 9  engaged and we were aligned as a team during the 10  outage, a few strongly disagrees and agrees here, 11  but, again, overall pretty positive response, and, 12  again, what did we do well outage director --
13  outage directors communicated well. Senior 14  management, that would probably be Barry and I in 15  this case, didn't bird-dog, concentrated on big 16  issues, and the daily meetings kept communications 17  flowing, and then one of the things under this 18  question we could have done better, provide 19  additional training on outage assignments upfront, 20  and as we did with all of these comments, we took 21  them and put them into our outage critique, and 22  then we'll have additional follow-up, but we 23  thought that was of particular note that our 24  people wanted to have a better idea if they were 25  stepping into a new role during the outage, and we MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
38 1  owe it to them to provide them the information and 2  the training to be successful, so we took that to 3  heart. And then the last question, next slide.
4      Do you feel good about what we achieved during 5  the outage, and little less than 98 percent 6  positive response, and we felt pretty good about 7  that, and what we did well, some comments on this 8  question performed every task safely and 9  efficiently, worked as a team, handled emergent 10  issues well, reduced dose and contamination 11  throughout the plant, good work environment in the 12  outage control center, and the plant was returned 13  to service in better shape than when we headed 14  into the outage, and one of the things we got back 15  as a could have done better, communicate critical 16  path activities and key equipment problems, and 17  even though that was a focus area for us, we said, 18  okay, we got it, but we can do better, okay, we'll 19  try to do better.
20      A couple of additional things we thought were 21  worth mentioning here because they're what our 22  people told us, and this is what they said is that 23  senior management team demonstrated the performing 24  work activities in the correct and safe manner was 25  the highest priority. More emphasis was put on MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
39 1  getting the job done right no matter what the cost 2  or schedule. Emergent issues were handled with 3  calm observations, clear data and fact gathering 4  and team approaches to resolutions, and then this 5  was sort of the kicker, and the one gal that took 6  all this data and put all this together, she put a 7  little slide with, I'll say, people holding up 8  sort of a trophy, and this is how she thought and 9  she felt was probably the key comment, we're 10    beginning to function as a team. I found trust 11    and honesty in the outage support center.
12    Leadership, I saw a team dedicated to doing what 13    was safe and what was right. I found support when 14    needed, and I never felt alone, and I just thought 15    that was a very positive statement from our folks.
16      A couple recommendations going forward in 17    regard to this question, keep the conservative 18    safety focus management approach, build on what we 19    did in the mid-cycle, communicate, communicate, 20    communicate, so those were the results of our 21    eight question survey and the result of some of 22    the focus that the management teams put on the 23    outage and beyond from a safety culture, safety 24    conscious work environment standpoint.
25      MS. LIPA:            (Indicating).
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
40 1      MR. BEZILLA:          Yes, Christine.
2      MS. LIPA:          Just a couple questions.
3      Did you tell us the number that responded to 4  the survey?
5      MR. BEZILLA:          The number was 199 of our 6  approximately 700 people.
7      MS. LIPA:          And what was the method 8  that people were handed surveys, did you have an 9  in-box or e-mail, or what was the method that they 10  were given the choice to participate in the survey 11  or not?
12      MR. BEZILLA:          It was a computer capable 13  response, it was a hard copy response, it was 14  e-mail to the staff management projection, and I 15  think we even ran in our news article a couple of 16  items in there that said, hey, we need your 17  feedback, please take a minute and fill out the 18  survey for us, so with a lot of communication 19  methods to get the feedback.
20      MS. LIPA:          Okay, thank you.
21      MR. BEZILLA:        Okay, my next slide.
22      In conclusion, I believe we have a healthy 23  safety culture at Davis-Besse, and I know we have 24  people that will raise issues and concerns. And 25  if there is nothing else, I'll turn it over to MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
41 1  Ray.
2        MR. HRUBY:          Thanks, Mark. Good 3  evening. Barry, Bob and Mark have already 4  discussed some of the results of the recent 5  activities at Davis-Besse. Today, I will be 6  presenting some of the quality oversight 7  organization's independent observations.
8        First, I want to begin by stating that based 9  on our observations and assessments the oversight 10  section concludes that Davis-Besse continues to be 11  operated in a safe manner. Next slide, please.
12      Now, I will be presenting some of the 13  highlights of the results of quality oversight 14  organization's first quarter assessment. The 15  details of the assessment are contained in quality 16  filled observations and the assessment findings 17  have been entered into the corrective action site.
18  Quality oversight audited 23 primary elements in 19  the four functional areas of operations, 20  engineering, maintenance, and support during the 21  first quarter using our internal assessment 22  process.
23      Four performance categories are used to rate 24  the effectiveness of programs and primary 25  elements. These rating are effective, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
42 1  satisfactory, marginally effective, and 2  ineffective. During the first quarter, one 3  primary element was rated effective, 19 were rated 4  satisfactory, three were rated marginally 5  effective, and there were no primary elements that 6  were rated ineffective.
7      During the first quarter, nuclear oversight 8  also reconciled the environment attribute and 9  rated it to be satisfactory. The conduct of 10  radiation protection was the primary element that 11  was rated effective. Contributing to this rating 12  were effective exposure and contamination and 13  controls that were demonstrated during the 14  mid-cycle steam generator inspection outage.
15      Three primary elements were rated marginally 16  effective. The first of these was the limiting 17  conditions for operating technical specification, 18  tracking primary element in the operation program 19  area. This rating was adversely affected by 20  technical specification compliance issues that 21  occurred during the first and second quarters of 22  2004.
23      Four other primary elements were rated 24  satisfactory. The second primary element to be 25  rated marginally effective was corrective action MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
43 1  effectiveness. Improvements continue with some 2  aspects of the Corrective Action Program, and 3  action plans were in place to address other areas 4  for improvement; however, a relatively large 5  backlog and timeliness issues still challenge 6  overall program effectiveness.
7      And the third primary element that was rated 8  marginally effective was emergency response 9  performance indicators. The emergency plan 10  control and contents primary element was rated 11  satisfactory. This indicates that the program 12  controls required to respond to emergency remain 13  satisfactory. Next slide.
14      MR. REYNOLDS:          Before you go on.
15      MR. HRUBY:          Okay.
16      MR. REYNOLDS:          First, I'd appreciate it 17  if you'd comment about oversights' overall 18  assessments of Davis-Besse, something we're always 19  looking for is oversights' assessments and how the 20  plant is operating, so I appreciate that. Now, 21  my question is, the three primary elements that we 22  have marginally effective, how long have they been 23  marginally effective based on how you count 24  quarter-wise or however?
25      MR. HRUBY:          Let me look here. Okay, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
44 1  the corrective action effectiveness has been 2  marginally effective for the last two periods.
3      MR. REYNOLDS:            Do you remember what it 4  was before that?
5      MR. HRUBY:            No, I don't have that 6  information, but we could get that for you.
7      MR. REYNOLDS:            I was wondering if it was 8  above training or --
9      MR. HRUBY:            I would have to get that 10  information.
11      MR. REYNOLDS:            Okay.
12      MR. HRUBY:            The performance indicators 13  in the emergency preparedness area was white 14  during the last -- which was satisfactory, and 15  that was largely marginal due to the performance 16  indicators, white indicators that we have 17  currently.
18      MR. REYNOLDS:            Okay. And your first one?
19      MR. HRUBY:            Oh, the first one was 20  limited conditions for operation. I don't have 21  the data for that, so I'll have to get back to you 22  on that.
23      MR. REYNOLDS:            Okay. I was trying to 24  put you on the spot, see if know.
25      MR. OSTROWSKI:            If I can repeat the MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
45 1  question, you're looking for what was the overall 2  rating?
3      MR. REYNOLDS:              What I'm really -- my 4  specific question is how long has it been 5  marginally effective, what's the trend? Is it 6  staying flat, no improvement, have we gone from 7  ineffective to marginally effective, that 8  direction, or are we going from satisfactory to 9  marginally effective?
10      MR. HRUBY:            I don't have the rating, 11  but I can tell you that based on our assessments 12  in the first quarter of operation performance and 13  the technical specification alliance there, there 14  has been improvement. As I stated, the 15  marginally effective rating was largely due to 16  events that occurred in first and second quarter 17  of 2004, so there has been improvement in 18  operation, if that answers your question.
19      MR. REYNOLDS:            Yes, it does. Thank you.
20      MR. THOMAS:              Ray, you may cover this in 21  your next slide, but let me ask it anyway so you 22  can bring it in if that's where you're going to 23  cover it.
24      MR. REYNOLDS:            Can you hear Scott?
25      UNIDENTIFIED:            No.
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
46 1      MR. THOMAS:          How about now?
2      UNIDENTIFIED:        No.
3      MR. THOMAS:          Can you hear me now?
4      MR. REYNOLDS:          It's not working.
5      MR. THOMAS:          The question that I have, 6  ideally in regards to the identification of 7  issues, you know what we like to see is licensee 8  staff, you know, identify the significant majority 9  of issues, QA and oversight, identifying the much 10  smaller sub-set of the issues, and then there 11  would be nothing left for us to find, okay, so, in 12  your opinion, where is QA in that spectrum? Are 13  you finding too many issues, are you -- issues 14  that should be identified by, you know, the 15  licensee staff, do you understand my question, or 16  I can try again?
17      MR. HRUBY:        No, I understand your question.
18  You're asking if relative to the line organization 19  is oversight identifying more than we should, less 20  than we should or about the right amount?
21      MR. THOMAS:            Yes.
22      MR. HRUBY:          Okay.
23      MR. THOMAS:            And any insights that you 24  have to go along with --
25      MR. HRUBY:          Okay. In the past, I'm MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
47 1  going from memory here, so -- I believe the 2  identification rate for internal oversight was 3  running roughly 10 percent. Recently, I've seen 4  some data that that shows that that percentage is 5  lower than it has been, so it's indication to me 6  that the organization is identifying more 7  conditions adverse quality relative to oversight 8  than they have been, if that answers your 9  question.
10      MR. BEZILLA:          Scott, let me help Ray 11  here, Ray, so a line, a line -- line's goal is to 12  identify all of their problems, right, so anything 13  Ray identifies is a failure on, say, on our part, 14  all right, so we strive to find all of those, in 15  fact, we have goals set up, but the last look/see 16  for, I believe it was April time frame we were 17  about 84 percent where the line had identified 84 18  out of 100 things, a line's was identified. Ray's 19  guys were identifying about seven out of 100 20  things, and then the remainder was identified by 21  either you all or other outside organizations that 22  came in and looked at us, right, and where we'd 23  like to be is up in the 90's where we're 24  identifying over 90 percent of the items, I'll say 25  self-identification type range, so that's an area MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
48 1  we watch, and I'll try to help Ray here, I'd just 2  as soon him not find anything, but if the line 3  doesn't find it, I'd much rather have him find it 4  than have you guys have to look for it and find 5  it, all right, so that's our goal, and that's 6  where we want to be. We want to be identifying 7  things within the line, and, worse case, have Ray 8  and his guys identify issues.
9      MR. THOMAS:              Okay.
10      MR. HRUBY:            Okay, next slide. Next I 11  want to talk about some independent insights and 12  future focus area. First procedure use and 13  adherence remain a site-wide cross-cutting concern 14  at Davis-Besse. Although improvements have been 15  noted in adherence to step-by-step procedures, 16  adherence in the field general reference procedure 17  remains now. Continued management attention in 18  this area is warranted to ensure that corrective 19  actions are implemented to address this procedure 20  use and adherence issue.
21      Second, operations performance remains a focus 22  for quality oversight organization, although 23  oversight has observed some improvement in overall 24  operations performance since 2004. Some 25  operations performance issues indicate that there MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
49 1  are still some areas that need to be improved.
2      Third, relatively large overall site-wide 3  workload continues to be an issue at Davis-Besse.
4  Oversight will continue to closely monitor the 5  backlog activities to ensure they're being 6  performed in a quality manner.
7      Fourth, management behaviors in organizational 8  performance remains a focus for the oversight 9  section. Our observations and feedback from site 10  personnel indicate the Davis-Besse management team 11  continues to consistently exhibit the appropriate 12  safety culture and encourages a healthy safety 13  conscious work environment.
14      And, fifth, the Davis-Besse line organization 15  continues to be very responsive when oversight 16  expresses concerns or intervenes station 17  activities. Davis-Besse line organization has 18  also on a number of occasions recognized the 19  oversight section for being intrusive and critical 20  and for adding value during the performance of 21  station activities. This concludes my 22  presentation. Are there any questions?
23      MR. REYNOLDS:            I want to go back to the 24  third bulletin, overall site-wide workload, and, I 25  guess, ask individually, Steve, Barry, and, Bob, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
50 1  do you have the staff and resources that you need 2  to address workload and the backlog reduction?
3      MR. ALLEN:          Yes -- yes, we do, Steve, 4  and I think if you look at just the relevance of 5  that chart and if you look at the graph that Bob 6  put up, of course you can see we have been making 7  progress, pretty consistent progress, and that's 8  with the staff and resources we've always had, and 9  we continue to make progress, we continue our 10  ability to stay on our work and get where we're 11  projecting our overall workload to be.
12      MR. LOEHLEIN:          Yeah, and speaking for 13  engineering, Steve, we have maybe in some ways 14  surprised ourselves. We have been training ahead 15  of the curves we originally projected for 16  ourselves, and on each challenge we've had, we 17  continue to make good progress on the backlog 18  reduction numbers and the level and commitment of 19  resources we have, so we're real confident in our 20  ability to continue to reduce the backlog.
21      MR. SCHRAUDER:            I'd say, yes, we have the 22  resources we need. If we need additional 23  resources and have asked for them, we've got them 24  then. We do have some augmented staff, I'd say 25  right now. Particular areas that I'm working on MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
51 1  is procedure, backlog reduction, and we have a 2  group of contract procedure writers that's 3  assisting us in that, so, as you know, we have had 4  set aside some additional funds for last year and 5  this year for Davis-Besse, specifically to work 6  out these items, so, to date, we have been given 7  the resources that we need and we'll expect that 8  to continue.
9      MR. REYNOLDS:            Thank you.
10      MR. THOMAS:            That includes PM back --
11  specific, PM backlogs as far as projected 12  backlogs, staffing to work off plant maintenance 13  activities, etc. Did that include that sub-set of 14  work?
15      MR. SCHRAUDER:            I'm not sure I understand 16  your question, Scott.
17      MR. ALLEN:          Scott, if you're asking 18  about the PM backlog --
19      MR. THOMAS:            Yes.
20      MR. ALLEN:          -- yes, that includes 21  that, that's part of the maintenance backlog and 22  that's included.
23      MR. THOMAS:            Okay.
24      MR. HOPKINS:            Ray, last bulletin on 25  organizational responsiveness, how do you monitor MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
52 1  that, what do you assess to check that?
2      MR. HRUBY:          What we did is, as you're 3  probably aware, conducted a survey and interviews 4  late last year, and what we did was we, based on 5  the results of the surveys specifically focused on 6  management behaviors and organization and 7  performance, one of the mid-cycle outages and 8  beyond, and we largely based that on our own 9  observations, sitting in the meetings, sitting 10  with the problem solving teams, monitoring the 11  Corrective Action Program and performance and 12  follow-up discussions with individuals, let's say, 13  and so those are the types of tools we use to make 14  our assessment.
15      MR. HOPKINS:          So a lot of the check is 16  on management decision making then?
17      MR. HRUBY:          Well, it's not just 18  management decision making, it's people bringing 19  up issues, expressing concerns, writing condition 20  reports, and then the management responds to the 21  concerns that are raised. We're watching the 22  whole process.
23      MR. HOPKINS:          Okay, thank you.
24      MR. BEZILLA:        Okay, next slide. Before 25  I conclude, Steve, there's one individual that MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
53 1  played a very key role, I'll say, in getting us 2  off of the 0350 process and has also helped 3  another FENOC site here in the most recent past, 4  and I usually don't get a chance to get the last 5  word, but I might tonight, okay, but before I do 6  that, I'd like to offer Lew Myers, our chief 7  operating officer, a moment if he had any remarks 8  he'd like to make at this meeting? Lew?
9      MR. MYERS:            I do think there's some 10  things worth noting is that -- let me tell you 11  what I heard tonight is that -- and one thing I 12  don't think we said is --
13      MR. REYNOLDS:            Can you hear back there?
14      UNIDENTIFIED:            No.
15      MR. MYERS:            Okay, can you hear me?
16      UNIDENTIFIED:            Yeah.
17      MR. MYERS:            One of the things that was 18  said tonight is that, you know, we should be proud 19  of our company, FirstEnergy, their support is 20  throughout the return to service this plant and 21  continues to support us to improve the operation 22  of the facility and provide the resources we need 23  for good performance. I also heard that you said 24  we're really proud of our employees, that we think 25  they're demonstrating a good safety focus, but I MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
54 1  also heard NRC to say in the Confirmatory Order 2  program, this is only Step 2, you know, we still 3  have Step 3. Step 3 -- 2 means you'll continue 4  to watch our safety culture for a long length of 5  time. You know, I think the plant is performing 6  well. I continue to monitor the pre-job 7  briefings, said when we started the plant the 8  Corrective Action Program, decision making and 9  troubleshooting process and the leak rate programs 10  would service well, I believe they are, and, once 11  again, what I heard out of the NRC tonight is this 12  is only the second step in regaining public trust, 13  and we must continue to address our backlogs and 14  we've committed to do that. We must continue to 15  meet our commitments to you, and we've committed 16  to do that, and we're demonstrating that. I 17  heard Bob say that. We must demonstrate that our 18  work preparedness continues to improve and that 19  we're ready to handle issues and address them 20  properly, and we must continue to earn the trust, 21  and we do that by having a strong assessment 22  process that you'll monitor throughout the 23  Confirmatory Order and Step 3 of being a normal 24  plant. That's what I heard tonight, and I think 25  you have our commitment to moving forward. Thank MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
55 1  you.
2      MR. REYNOLDS:            Thanks, Lew.
3      MR. BEZILLA:            Okay, thank you, Lew. So 4  in conclusion, today at Davis-Besse we have 5  employees who are people with a strong safety 6  focus. We have an engaged workforce, healthy 7  safety systems, reliable equipment performance, 8  fleet governance in oversight and desire to 9  improve in everything we do.
10      I'd like to thank all those groups and 11  individuals that helped us through the last three 12  years. These groups include you all, the 13  regulator, our industry peer groups, which you 14  heard a number of these guys talk about, state, 15  and local representatives and officials, and the 16  community at large. This team, Davis-Besse, will 17  remain committed to safe and conservative 18  operation, and we will strive for continuous 19  improvement in all that we do. Thank you very 20  much.
21      MR. REYNOLDS:            Thanks. Let's -- now, if 22  we can, let's go to the very last slide.
23      MR. BEZILLA:            Which one, Steve?
24      MS. LIPA:          Last slide of the NRC 25  packet.
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
56 1      MR. REYNOLDS:            Yes.
2      MR. BEZILLA:          Oh, the NRC slide back 3  here? The last slide for NRC.
4      MR. REYNOLDS:            I have not skipped the 5  question and answer period, I just want to go to 6  this slide, and then we'll get questions. I 7  don't know if Scott or John, anything you want to 8  say at this time?
9      MR. HOPKINS:          Yeah, I'll start off, you 10  can fill in here if someone else wants to address 11  this. We have been holding these routine 12  periodic public meetings here for several years 13  now as part of the 0350 Panel. I'm not sure how 14  well it's been explained, but when we go to the 15  reactor oversight process, these normal public 16  meetings will not be held like this. We will 17  have always an annual meeting where we will talk 18  about the assessment of the plant operations for 19  next year and also talk about our upcoming 20  inspections, and that occurs annually, but this 21  number of public meetings will not be happening.
22      The NRC has a public affairs office in both 23  Region III and in headquarters. We have our web 24  site, which you can see at the bottom where you 25  can feedback and contact us. Of course, there is MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
57 1  the Resident Inspectors here at site that can 2  always be contacted, the NRC's phone number is in 3  the phone book, so there are ways to continue to 4  contact us when we are in the reactor oversight 5  process over at Davis-Besse, and that's all I have 6  to say.
7      MR. REYNOLDS:          Thanks, Jon.
8      MR. THOMAS:          I have nothing.
9      MR. REYNOLDS:          Christine?
10      MS. LIPA:        No.
11      MR. REYNOLDS:          Bill?
12      MR. RULAND:          Just a couple thoughts.
13  We've -- at least for me, I have done this now for 14  two years, and what has struck me about this --
15  these public meetings is the public accountability 16  that I feel personally about having these 17  meetings. There is something about getting up in 18  front of members of the public and these folks 19  seeing what we do and the decisions we make, and 20  it's that public accountability that is really at 21  the heart of what the NRC is all about, and, 22  ultimately, I think what FENOC is all about, and I 23  don't think we're going to lose that, and I hope 24  we don't, that we go back to our what I'll say our 25  standard business is, and we maintain a sense of MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
58 1  that public accountability. It's something that 2  I believe that the NRC holds very dearly, and I 3  think this process has taught us both how easy it 4  is to lose that public trust and how very, very 5  difficult it is to regain it, and that's just kind 6  of my personal reflection on this.
7      Just on another note, we issued on May 19 a 8  letter that transitioned you folks to the normal 9  oversight process, and I think I heard that you 10  acknowledged you're not there yet, Lew said that 11  you're basically at Step 2, and we agree you're 12  not there yet. You're going to have to do 13  independent assessments for another four years.
14  We're going to watch those. We're going to make 15  sure that those are done right because when we 16  issue that Confirmatory Order, we want to make 17  sure that your performance truly was sustained, 18  and we're going to keep doing that, not only 19  through those independent assessments, but through 20  our routine operations, and, finally, we're 21  basically going to be going to almost routine 22  work, and it's in that routine work that sometimes 23  we lose that edge and on this verging subject we are converging, NRC staff 24  and FENOC, which I think I've already heard is 25  that we're really not going to make it routine.
MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
59 1  We're going to make vigilance routine, and I think 2  that's what the public deserves, and I know the 3  NRC staff is prepared to commit to that. Thank 4  you.
5      MR. REYNOLDS:            Thanks, Bill. You may 6  have to bear with me because I may repeat some of 7  the things that Bill said, but first thing I want 8  to say to members of the public -- it's not 9  working -- can you hear me now, I may end up 10  repeating some of the things that Bill said, 11  you'll have to bear with me, but the first, I want 12  to tell the members of the audience that you're 13  very lucky in that your local officials, your 14  Ottawa County Commissioners, have been and are 15  very involved in Davis-Besse, and from working at 16  the NRC for a long time and interacting with a lot 17  of different utility process sites, the level of 18  commitment from the Ottawa County Commissioners is 19  to be applauded, and you're well served in a 20  nuclear safety point of view from them, and we'll 21  continue to interact with them, and I think FENOC 22  is going to continue doing that. I lost my mike 23  again.
24      (APPLAUSE).
25      MR. REYNOLDS:            I don't know if I'll lose MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
60 1  my mike, again, but I'll just stand up here.
2  Again, the Ottawa County Commissioners, they did a 3  good job and are continuing.
4      We've heard tonight that the NRC has enough 5  confidence in the licensee to operate the plant 6  safely. We'll be transitioning out of 0350 back 7  to the oversight process with additional 8  inspections. They can ride their bicycle, but 9  they need training wheels. We've heard from the 10  licensee their commitment to continue to improve 11  and you've heard publicly, we met with them 12  separately, and they committed to us also to 13  continue to those meetings to continue to go 14  forward and improve, that's important, that's 15  important for Davis-Besse and important for FENOC 16  and important for the nuclear industry and 17  definitely important for the public. The NRC has 18  also improved over the last three years. Nobody 19  in this business wants another Davis-Besse to 20  happen, period, so, when Bill Ruland talked about 21  vigilance, it goes for every person that works in 22  the nuclear business whether you're a regulator or 23  licensee or a contractor, so, vigilance is key.
24      While I have the floor, I do want to take the 25  opportunity to thank the NRC staff, Bill Ruland, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
61 1  Jon Hopkins, Christine Lipa, Scott Thomas, Scott's 2  staff has lived Davis-Besse for a long, long time 3  and it's a huge effort for the NRC to follow a 4  plant like this, to follow three years' worth of 5  effort to restart, to make the call whether the 6  plant is safe to operate, to make the call that 7  they're ready to return out of the 0350 and back 8  into the reactor oversight process with additional 9  inspections, so I want to thank each and every one 10  of you, appreciate the effort. Also, my 11  predecessor, Jack Grobe, made significant efforts 12  here, so -- he's not here, of course, but he can 13  read it on the record, so thanks to Jack, and 14  thanks to each and every one of you. I think 15  several of you actually work at Davis-Besse, and 16  it takes individuals, each and every one of you 17  each and each and every day to do your very best 18  job, to ask the tough questions and do the job 19  right the first time, so -- and members of the 20  public that don't work at Davis-Besse, your 21  vigilance in making sure that activities both from 22  the licensee and from the NRC that we do our job 23  day in and day out. We want you to stay vigilant 24  also.
25      With that, I think I'll close. We'll take a MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
62 1  short break and then come back for questions. If 2  any of you are not staying for questions, I 3  appreciate you coming, and drive safely, so, with 4  that, we'll take a -- probably a 10 minute break 5  and be able to answer questions.
6      THEREUPON, a brief recess took place.
7      MR. RULAND:          Okay, let's get started.
8  We're ready, take a seat, please, and we'll get 9  started.
10      MR. REYNOLDS:          Let's get started. All 11  right. The way I'd like to do this is offer the 12  elected officials the opportunity to go first, so 13  if you have any questions.
14      MR. PAPCUN:          Thanks, Steve. Since I'm 15  older than Lew, I'll go first.
16      (Laughter).
17      I'm John Papcun, President of the Board this 18  year, and on behalf of my colleagues, Carl Koebel 19  and Steve Arndt, first of all, I'd like to thank 20  the NRC, the panel, and all your employees for 21  working with us in the last couple years, 22  cooperation and your work ethic is wonderful. We 23  also want to thank you for allowing Jere Whitt Witt, 24  our County Administrator, to serve on your Davis-Besses 25  oversight committee. We thank Jere for all his MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
63 1  hard efforts on behalf of the employees and the 2  general public in serving on that committee, which 3  I believe is unprecedented in the United States, 4  is it not?
5      MR. REYNOLDS:            I believe so, yes.
6      MR. PAPCUN:            So that's great!
7      Your extra meetings and lunches and dinners 8  and breakfasts with us to keep us up-to-date is 9  most welcome.
10      Secondly, I'd like to thank FirstEnergy for 11  providing the resources and the key personnel to 12  get the plant back going, that's most appreciated, 13  saved over 800 jobs in our little community here, 14  we appreciate that very much, and, of course, most 15  of all, to the employees; without which, their 16  endeavors, this never would have happened, but 17  don't stand on your morals, keep working and make 18  this the best plant in the country. I do have 19  one hit, though, for my old eyes, it's easy to 20  follow the colors on the pie charts on the screen, 21  but the black and white on here, Lew, you can't 22  follow, so you need to come up with the money to 23  either make color copies or change this to A, B, 24  C, D, E or cross action or something because the 25  two that conflict is generally agree and strongly MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
64 1  disagree on the black and white, so thank you very 2  much.
3      (Laughter).
4      MR. REYNOLDS:            Thank you, John.
5      MR. WHITT WITT:            Hi, I'm Jere Whitt Witt, County 6  Administrator, Ottawa County. First of all, I 7  would like to thank the NRC also for your 8  professionalism through this, the insight, my 9  education. I learned more than in my four years I 10  spent in college, I think, in going through this 11  two years of process. I remember an infamous 12  quote from Lew Myers early on in this process, and 13  I think that quote went something along the lines 14  of, it's hard to call your baby ugly. That baby 15  got pretty over three years, didn't it, Lew?
16      MR. MYERS:            Absolutely. I'm right 17  here.
18      MR. WHITT WITT:            And I also remember Lew 19  saying I'm going to bring in a new management 20  team, and he did that, and I applaud their 21  efforts. They certainly turned this around, and 22  he also sat in his office one day and said, these 23  are good people, they can make it happen, and I 24  think the biggest applause tonight needs to go to 25  the employees of Davis-Besse because they are MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
65 1  truly the ones that made this happen, and we thank 2  you for that.
3      (APPLAUSE).
4      MR. REYNOLDS:          Thank you, Carl -- Jere.
5      Any other elected officials? If not, how 6  about members of the public that do not work at 7  Davis-Besse?
8      (NO AUDIBLE RESPONSE).
9      MR. REYNOLDS:          Okay, then we'll open to 10  anybody, anybody like to ask us a question?
11  Going once, twice, three times. Everybody have a 12  very safe night and, again, thank you for coming 13  out.
14      THEREUPON, the hearing concluded at 7:38 p.m.
15 16 17 18 19 20 21 22 23 24 25 MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900
 
66 1              CERTIFICATE 2    STATE OF OHIO )
                ) ss.
3    COUNTY OF HURON )
4 I, Marlene S. Lewis, Stenotype Reporter and 5    Notary Public within and for the State aforesaid, duly commissioned and qualified, do hereby certify 6    that the foregoing, consisting of 65 pages, was taken by me in stenotype and was reduced to 7    writing by me by means of Computer-Aided Transcription; that the foregoing is a true and 8    complete transcript of the proceedings held in that room on the 24th day of May 2005 before the 9    Nuclear Regulatory Commission.
10      I also further certify that I was present in the room during all of the proceedings.
11 12      IN WITNESS WHEREOF, I have hereunto set my hand and seal of office at Wakeman, Ohio this 13    day of            , 2005.
14 15 Marlene S. Lewis 16                      Notary Public 3922 Court Road 17                      Wakeman, OH 44889 18              My commission expires 4/28/09 19 20 21 22 23 24 25 MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900}}

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6:00 Pm Transcript of Public Meeting Between NRC and FENOC Davis-Besse Nuclear Power Station
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1 1

PUBLIC MEETING 2

U.S. NUCLEAR REGULATORY COMMISSION 3 FIRSTENERGY NUCLEAR OPERATING COMPANY 4

5 6 Meeting held on Tuesday, May 24, 2005 at 7 6:00 p.m. at Camp Perry, Clubhouse #600, Port 8 Clinton, Ohio, taken by me, Marlene S. Lewis, 9 Stenotype Reporter and Notary Public in and for 10 the State of Ohio 11 12 -----

13 PANEL MEMBERS PRESENT:

14 U.S. NUCLEAR REGULATORY COMMISSION 15 Steve Reynolds, Chairman for 0350 Panel 16 Davis-Besse facility 17 Christine Lipa, Branch Chief, NRC 18 William Ruland, Vice Chairman, MC 0350 Panel 19 Christopher (Scott) Thomas, Senior Resident Inspector 20 Jon Hopkins, Senior Project Manager -

21 Davis Besse 22 23 24 25 MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

2 1 MR. REYNOLDS: Good evening. Can 2 everyone hear me okay? Good evening. Can the 3 people in the back hear me?

4 (Indicating).

5 Okay, thank you. I'd like to welcome 6 everybody to this meeting. This is a meeting 7 between the United States Nuclear Regulatory 8 Commission and FirstEnergy Nuclear Operating 9 Company to discuss -- talk about Davis-Besse.

10 I'd like to welcome Mark Bezilla and your 11 staff, and members of the public and local 12 officials out in the audience. Appreciate you 13 taking the time tonight to come out here for this 14 important meeting.

15 Like I said, this is a public meeting between 16 the Nuclear Regulatory Commission, NRC, and 17 FirstEnergy Operating Company, FENOC, or the 18 licensee.

19 My name is Steve Reynolds, I'm the Chairman of 20 the 0350 Panel. With us also tonight -- and I'm 21 also the Deputy Director of the Division of 22 Reactor Projects in our Region III office, which 23 is in Lisle, Illinois just outside of Chicago.

24 This is a public meeting open for you all to see.

25 At the end of the meeting between Davis-Besse and MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

3 1 the NRC, the NRC will be available for questions 2 and answers. The purpose of the meeting and I'll 3 talk about that more on the slide, next slide, but 4 really it's to talk about our activities, NRC 5 activities, that led up to this meeting and our 6 activities going forward, and we'll hear from the 7 licensee about -- we'll hear from the licensee, 8 how they see themselves, where they've been the 9 last couple years, their commitments to 10 themselves, to us, and to you members of the 11 public going forward, and we'll talk a little bit 12 about our processees so you understand when we 13 talk about 0350 and the oversight process processes and 14 different columns, and, hopefully, you'll get a 15 better understanding of that, so it's been a 16 while, a number of years since Davis-Besse has 17 been in reactor -- again, like I said, at the end 18 we'll be available for questions.

19 There's a copy of the slides, I see many of 20 you have them, and that's good. There's also out 21 in front, there was a feedback form. We'd 22 appreciate if you would take the time to fill 23 those out. We hand those out at all of our 24 public meetings. Just like any other 25 organization, we try to improve our activities and MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

4 1 any feedback you have on how to make this a more 2 informative public feedback forum. You can give 3 it to any one of us here at the NRC or fold it up 4 and stick it in the mail. Next slide.

5 This meeting along with us and FirstEnergy is 6 really for you in the audience to inform you 7 what's going on and the transition of our 8 processees at Davis-Besse, continuing our NRC 9 oversight, we'll talk about what that means, and 10 what's the extras, discuss our Assessment of 11 Perry -- excuse me, Davis-Besse's, plant 12 performance, give the licensee a chance and we'll 13 receive public comments and answers and questions 14 from the public. Next slide, and at this time, 15 I'd like to --

16 MS. LIPA: It's back at the agenda 17 slide.

18 MR. REYNOLDS: Oh, I'm sorry. Just have 19 people from the NRC introduce themselves and then, 20 Mark, you can introduce your staff, so --

21 MR. RULAND: I'm Bill -- excuse me, I'm 22 Bill Ruland. I'm the Vice Chairman of the 23 Davis-Besse 0350 Panel, and I'm a manager from 24 NRC's headquarter's office in Rockville, Maryland.

25 MR. HOPKINS: I'm Jon Hopkins, Senior MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

5 1 Project Manager from headquarter's Headquarters, NRC, office of 2 Nuclear Reactor Regulation, and a member of the 3 0350 Panel.

4 MS. LIPA: My name is Christine Lipa 5 and I'm the Branch Chief in the Region III office.

6 MR. REYNOLDS: They can't hear you back 7 there.

8 MS. LIPA: My name is Christine Lipa, 9 and I'm the Branch Chief out of the Region III 10 office, and I'm responsible for the NRC's 11 inspection program at Davis-Besse.

12 MR. THOMAS: My name is Scott Thomas, 13 I'm a the Senior Resident at the Davis-Besse 14 station.

15 MR. REYNOLDS: Scott, will you introduce 16 the rest of your staff?

17 MR. THOMAS: Oh, I'm sorry. Jack 18 Rutkowski is also a resident, and Monica 19 Salter-Williams is also at the site, and, oh, 20 Nancy Keller is out front, I don't want to forget 21 Nancy, she's the office assistant at Davis-Besse 22 resident office.

23 MR. REYNOLDS: And then where's Alex?

24 Oh, over there, and Alex Garmoe, he works with 25 Christine and I in our office in Lisle.

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

6 1 MR. HOPKINS: Also attending from NRC 2 headquarters is Sarah Brock. She's from our 3 office, general counsel Office of General Counsel.

4 MR. REYNOLDS: Mark?

5 MR. BEZILLA: Thanks, Steve. To my 6 right is Steve Loehlein, Director of Engineering.

7 Next to him is Barry Allen, Site Director of 8 Operations. To my far left is Kevin Ostrowski, 9 Manager of Operations. Next to him is Ray Hruby, 10 Manager of Nuclear Oversight, and next to me is 11 Bob Schrauder, Director of Performance 12 Improvement, and in the audience we also have Lew 13 Myers, our Chief Operating Officer; Joe Hagan, our 14 Senior Vice President, and Judy Wrinkel, Vice 15 President of Fleet Oversight.

16 MR. REYNOLDS: Thank you. Also, if we 17 have any local officials that want to identify 18 themselves, please do so.

19 MR. PAPCUN: John Papcun, Ottawa County 20 Commissioner.

21 MR. REYNOLDS: Thanks, John.

22 MR. ARNDT: Steve Arndt, Ottawa County 23 Commissioner.

24 MR. REYNOLDS: Thanks, Steve.

25 MR. KOEBEL: Carl Koebel, Ottawa County MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

7 1 Commissioner.

2 MR. REYNOLDS: Thank you, Carl.

3 MR. WHITT WITT: Jere Whitt Witt, County 4 Administrator.

5 MR. REYNOLDS: Thanks, Jere. We 6 appreciate you taking the time out tonight to come 7 here, and, with that, Christine, I'll turn it over 8 to you.

9 MS. LIPA: Okay, thank you, Steve.

10 The next slide talks about the 0350 Panel time 11 line, so what I'll just do is I'll review briefly 12 the -- how the 0350 Panel came in to existence and 13 the key milestones along the way.

14 Obviously, on March 6, 2002 was the discovery 15 of the degradation in the reactor vessel head, and 16 that really began some NRC activities that led to 17 the formation of the 0350 Panel on April 29th.

18 Last year on March 8th, after going through 19 our 0350 process, leading up to the decision to 20 allow restart at the facility, we implemented that 21 process and issued an Approval to Restart and a 22 Confirmatory Order, and that was issued on March 23 8th, 2004. Then part of the Confirmatory Order 24 was for Davis-Besse to do independent assessments 25 in four areas and then also to do a mid-cycle MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

8 1 outage and inspect the vessel for any leakage.

2 On February 3rd, Davis-Besse completed their 3 inspections and reported to the NRC they found no 4 evidence of leakage from the operating bottom of 5 the vessel.

6 Then on May 19th is when we transitioned the 7 0350 process where we talked about what activities 8 need to be met to transition out of the 0350 9 process and into the reactor oversight process, 10 and we'll talk more about that. And the 11 transition is to Comp Column 2 of our oversight process 12 and inspection, and then July 1 is at the end of 13 the quarter, it's actually when this takes effect.

14 The next slide talks about part of the 0350 15 process, the assessment that the panel went 16 through to make the determination to return 17 Davis-Besse to the reactor oversight process, and 18 these are mostly words that come right out of our 19 processes and the panel determined for Davis-Besse 20 specific attributes. The NRC performance 21 indicators is part of the ROP, reactor oversight 22 process, ROP, and because of the long-term 23 shutdown some of those performance indicators were 24 not necessarily valid. They might have been 25 green, but they might not have been fully green MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

9 1 for us to do the initial inspection in those 2 areas, so by the end of calendar year 2004, we 3 determined that those performance indicators are 4 now meaningful indicators of performance in those 5 performance areas.

6 Then the next criteria was that the licensee 7 had established an effective long-range 8 improvement plan. The next criteria was licensee 9 sufficiently implemented their Corrective Action 10 Program, and we did additional inspections 11 throughout calendar 2004 to verify these criteria 12 and make sure the criteria was met. The next is 13 Demonstrating Safe Plant Operation and Overall 14 Improving Performance, and then, finally, that the 15 utility had adequate controls in place to address 16 the reasons why we implemented 0350 to begin with.

17 MR. REYNOLDS: Let me jump in here before 18 you go onto the next slides, a little bit more 19 about how this process worked internally to the 20 NRC. Our panel went through all the different 21 activities the licensee had performed, along with 22 inspections. We met, we made our recommendations 23 to my boss, the regional administration, Jim 24 Caldwell, who is in charge of Region III office.

25 Mr. Caldwell then discusses the removal of the MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

10 1 0350 Panel with Jim Dyer, who is the Director of 2 Office at Nuclear Reactor Regulations here with 3 Bill Ruland and Jon Hopkins and then those two met 4 with our Deputy Executive Director of Operations, 5 who is Bill Cane Kane, and the three of them, based on 6 our recommendations, decide whether or not it's 7 time for Davis-Besse to transition from 0350 to 8 ROP, and they did that, so I just want to give you 9 a little more insight. It was more than just this 10 panel. It was the -- the top agency official 11 making the decisions based on the Panel's 12 recommendations that it was time for Davis-Besse 13 to transition.

14 MS. LIPA: Okay, thanks for that 15 additional information. Okay, and then the next 16 slide talks about NRC Oversight, so now we're 17 going back to the reactor oversight process which 18 we'll talk in a little more detail later, but we 19 wanted to emphasize that, even though we're going 20 to the ROP, we will conduct inspections beyond --

21 typically what it requires for beyond RO 2 is required for Column 2, we'll 22 talk about Column 2, but the first thing we wanted 23 to talk about was our Inspection of the 24 Independent Assessment required by the 25 Confirmatory Order issued on March 8th.

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

11 1 MR. THOMAS: And I think just a little 2 more specific on this, the additional inspection 3 or the Confirmatory Order required additional 4 inspections in the area of -- or excuse me, 5 independent assessments in the area -- is that 6 still on? Can you all still hear me? There we 7 go -- in the area of corrective actions, 8 operation -- operation, safe --

9 MS. LIPA: Try this one.

10 MR. THOMAS: Hello? Hello? Hello?

11 There we go, the order required independent --

12 MS. LIPA: Keep talking, he's 13 probably adjusting.

14 MR. THOMAS: -- independent -- okay.

15 The order required independent assessments in the 16 area of operations, corrective actions, safety 17 culture and engineering. Those were done for 18 calendar year 2004. They are scheduled to be done 19 for calendar year 2005. For each of those 20 independent assessments, the inspectors will be 21 evaluating the inspection plans that the teams 22 will be doing their inspections or their 23 assessments in accordance with as well as the 24 individuals that will be evaluating the 25 individuals' qualifications that will be doing MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

12 1 those assessments.

2 Additionally, they will be monitoring some of 3 the in process activities as well as reviewing the 4 final report to make sure that the assessment was 5 met -- was in compliance with the requirements of 6 the order.

7 Some additional inspection activity will be a 8 problem identification and resolution team inspection.

9 This is in addition to the normally required PIR 10 inspection that's done in accordance with the ROP 11 requirements. The one main focus of this -- this 12 team inspection will be the licensee's progress in 13 addressing reduction of their backlog issues as 14 well as adequacy of completing efforts that were 15 outlined in their cycle 14 improvement plan.

16 Several commitments were outlined in that plan and 17 that will be another focus -- another focus of the 18 PIR inspection. Okay, okay, so that's the 19 additional inspection activities on top of the 20 baseline ROP requirements. One other thing that 21 will be done is a 95001 inspection, which is a 22 follow-up from the White Finding EP issue.

23 That -- one clarification on that, though, is that 24 that's not part of the ROP plus inspection 25 activities. That's part of the process itself in MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

13 1 response to the White Finding and your transition 2 back to Column 2, the Action Matrix, so I think 3 I've covered everything there.

4 MR. REYNOLDS: Let me just -- based on 5 the trouble with the mic --

6 MR. THOMAS: Okay.

7 MR. REYNOLDS: See if I can recap. Can 8 you hear me okay in the back still?

9 UNIDENTIFIED: No.

10 MR. REYNOLDS: Can you all hear me?

11 John, can you hear me back there? Can you hear me 12 now, John? Okay, thank you. I'll try to recap.

13 Basically, the reactor oversight program is the 14 normal set of inspections which we do for every 15 nuclear power plant, and Davis-Besse is going back 16 to theirs, but we're adding additional 17 inspections. We're waiting to see, we want them 18 to continue to improve and use the same 19 performance. They've progressed enough and 20 performed adequately, safely and adequately, such 21 that we're ready to transition over, not totally 22 to go back to the ROP, that's why we still have 23 the Confirmatory Order, that's why we're doing the 24 extra inspections. Thank you.

25 MS. LIPA: Okay, thank you. The MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

14 1 next slide is a graphic of Reactor Oversight 2 Process, and what we have, and I have a more 3 detailed slide later, but we have strategic 4 performance areas, and we have safety 5 cornerstones, and in those areas we do both 6 baseline inspections, and we do this at every 7 plant in the country, and we also have performance 8 indicators, so that's kind of the two halves of 9 the slide up here, and the results from those 10 inspections and the performance indicators go 11 through a significant threshold and those are in 12 through our Action Matrix, and the Action Matrix 13 is an objective defined prior to our process that 14 determines NRC's response depending on the issues 15 that have been identified.

16 The next slide shows the -- obviously, the NRC 17 Overall Safety Mission and the -- you see the 18 three Strategic Performance Areas in yellow, 19 reactor safety, radiation safety, and safeguards, 20 and right below that are seven cornerstones, 21 cornerstones on safety, and how they're divided 22 amongst those Strategic Performance Areas, and 23 these are the areas we do inspection in all these 24 areas, and we have performance indicators in these 25 areas. At the bottom you see cross-cutting MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

15 1 areas. Those are areas that are very important 2 to human performance, safety conscious work 3 environment and problem identification and 4 resolution, and those cut across all the 5 cornerstones, and that's why they're so important.

6 The next slide shows the Action Matrix that I 7 mentioned earlier, and we've got the five boxes 8 across the top that represent the five columns in 9 that. Column 1 is Licensee Response that will get 10 the full baseline inspection and performance 11 indicators will be reviewed, and that will be the 12 extent of the program. Regulatory Response is 13 where Davis-Besse is, and that is additional 14 inspection that Scott mentioned earlier, what we 15 call the 95001, which is a special supplement 16 inspection that follows up on white performance 17 indicators and emergency preparedness and has to 18 do with the sirens, so the way the Action Matrix 19 works is, as you go from left to right, there's 20 increasing on safety significance to the issues, 21 there's increasing NRC inspection, increasing NRC 22 management involvement, and then, as we already 23 discussed, Davis-Besse is in Column 2.

24 Now, I wanted to talk about next upcoming 25 activities. We already talked about Davis-Besse MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

16 1 going to the ROP as of July 1. We'll be doing 2 what Column 2 requires, which is the full baseline 3 plus the extra inspection on the emergency 4 preparedness area. We'll also be doing 5 additional inspections. We mentioned the 6 Additional Problem Identification and Resolution 7 Team Inspection. The way that works for normal 8 plants in ROP is they would get one inspection 9 every other year. What we're doing for 10 Davis-Besse is they're getting additional -- we're 11 having one last year and this year, so this year 12 is the additional PIR inspection, and Scott also 13 mentioned in detail the Confirmatory Order and 14 other inspection.

15 We continue to have resident inspectors on 16 site and regional inspectors from Region III to do 17 the baseline program. We mentioned the 95001, 18 that's a supplemental inspection, about one 19 inspector for a week that will follow-up on the 20 white emergency preparedness issue, and it's 21 scheduled this year, and as part of the reactor 22 oversight process, which is what is known as 23 IMC0305, that's our procedure that guides the 24 process, we do quarterly assessments of the plant 25 performance and part of the reactor oversight MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

17 1 process is we would have one public meeting a 2 year, and that would be the end of cycle, cycle 3 for us would be calendar year, so at the end of 4 this calendar year, we'll be meeting in early 2006 5 to discuss performance and detail and prepare to 6 come out for a public meeting next year, and 7 that's really all I wanted to cover for some of 8 the highlights of the reactor oversight for 9 Davis-Besse and additional items performances for 10 this year and upcoming activities. Anybody else 11 have anything they want to share?

12 (No audible response).

13 Okay, what we'll do next then is turn it over 14 to FirstEnergy.

15 MR. BEZILLA: Okay, thank you, 16 Christine. Next slide, please. Before I cover 17 our Desired Outcomes, I would just like to state 18 that we know how important assessment and the 19 drive for improvement is and ensuring excellence 20 in operating nuclear power plants. We believe 21 strongly that our efforts over the past few years 22 to assess and make effort to improve our 23 performance are bearing fruit and will provide 24 some anecdotal evidence throughout our 25 presentation tonight. Now, onto our Desired MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

18 1 Outcomes. Our Desired Outcomes are as shown in 2 the slides and will demonstrate that we're ready 3 for the normal plus reactor oversight process, 4 that our operations continue to be safe and 5 conservative and that we are working our committed 6 plan. Next slide, please.

7 Our agenda is at as follows. Barry will discuss 8 plant performance and assessments since the last 9 public meeting.

10 Bob will briefly discuss our program -- or, 11 excuse me, our progress on cycle 14 operational 12 improvement plan and our backlog reduction 13 efforts.

14 I'll discuss recent safety culture and safety 15 conscious work environment progress, and then Ray 16 will provide you with oversight perspectives.

17 With that, I'll turn it over to Barry.

18 MR. ALLEN: Thank you, Mark. Tonight 19 I'll discuss how the strong safety focus of 20 Davis-Besse personnel has resulted in the 21 continued, safe operation. Next slide, please.

22 Davis-Besse personnel are exhibiting a strong 23 safety focus, and, as a result, the unit continues 24 to operate safely and reliably. The station is 25 currently at 131 consecutive human performance MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

19 1 success days, which is an indication of good human 2 performance on the part of our personnel. Also 3 operating with good plant materiel condition, 4 reliable safety system performance and 106 5 consecutive days of safe service since we've 6 completed our successful steam generator 7 inspection mid-cycle outage. Next slide.

8 Davis-Besse is in the inspection manual 9 Chapter 0350 oversight process. Nonetheless, we 10 internally measure our safety performance utilized 11 in the NRC's reactor oversight process performance 12 indicators. This slide indicates our current 13 safety performance utilizing the NRC performance 14 indicators. All performance indicators are 15 currently green with the exception of the alert 16 notification system reliability indicator, which 17 was discussed earlier, which will turn green at 18 the end of June. Next slide.

19 Davis-Besse continuously utilizes assessments 20 to validate and improve our safety performance.

21 Some examples of this that have been utilized 22 since our last local meeting includes on February 23 25th, we had a successful unannounced staff 24 augmentation drill to assess the readiness of our 25 emergency response organization to respond off MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

20 1 hours.

2 During the week of March 14th, we had an 3 industry accreditation visit. This assessment of 4 our technical skills training program validated 5 our own internal self evaluation report.

6 During the week of March 28th, we had a 7 thorough industry assessment of our primary 8 systems integrity. The most significant insight 9 we received was that our programs and processees processes 10 used to monitor reactor coolant system leakage are 11 comprehensive and provide management with accurate 12 information to assess reactor coolant system 13 leakage.

14 In the last week of March, we also performed a 15 self assessment of our operations training 16 program. This self assessment was performed by a 17 12 person team with two members of our training 18 organization, five members from the operations 19 line organization, three individuals from the 20 fleet, one individual from another utility, and 21 the accreditation team leader of the institution 22 of nuclear power operations Institute of Nuclear Power Operations. Next slide.

23 Our company Nuclear Review Board was also at 24 Davis-Besse on April 5th through the 7th. This 25 Board provides an independent outside assessment MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

21 1 of our safety performance, and the company Nuclear 2 Review Board concluded that the plant is being 3 operated safely.

4 During the week of April 11th, the NRC 5 conducted an inspection of safety culture and 6 safety conscious work environment at Davis-Besse.

7 Improvement was noted with encouragement to 8 continue moving forward in this arena.

9 And on April 18th, FirstEnergy President, Tony 10 Alexander, and the Nuclear Committee of the Board 11 was at Davis-Besse to perform their own 12 independent assessment of the station, and our 13 FirstEnergy President has scheduled routine 14 quarterly visits to the station. Next slide.

15 We also had a successful NRC safety system 16 design and performance capability inspection 17 beginning April 18th. We had extensive dialogue 18 with the inspection team, which resulted in the 19 identification of multiple opportunities for 20 improvement, and last week we held our emergency 21 preparedness evaluated exercise, the NRC 22 inspection of our emergency preparedness 23 performance indicators and an NRC biannual 24 maintenance inspections. These three inspections 25 went well with good dialogue between the station MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

22 1 and the inspector resulting, again, in a number of 2 improvement opportunities being entered into our 3 Corrective Action Program.

4 Additionally, State and County personnel 5 performed very well during the portion of the 6 evaluated exercise which was evaluated by the 7 Federal Emergency Management Agency. Next slide, 8 please.

9 We continuously assess to validate our cycle 10 performance and drive improvements. At 11 Davis-Besse we utilize numerous assessment tools, 12 such as our observation program wherein we observe 13 field work and training on a daily basis. Our 14 duty team members are routinely assigned 15 observations of more challenging tasks. We also 16 utilize site self assessment, for example, the 17 operations training program I mentioned previously 18 falls in this category. Examples of upcoming 19 site assessments include areas of our Corrective 20 Action Program, our emergency response 21 organization, our problem solving and decision 22 making process implementation and radio active radioactive 23 effluence. We also leverage resources to perform 24 common assessments across the fleet. We will 25 utilize this tool to assess work management MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

23 1 effectiveness, conduct of operations, and work 2 force efficiencies and effectiveness throughout 3 the remainder of the year.

4 MR. HOPKINS: Barry, let me ask a 5 question, I may be ahead of time, but you're 6 getting to industry assessments.

7 MR. ALLEN: Yes.

8 MR. HOPKINS: Are you having your 9 staff -- or are they taking part in the 10 assessments of other utilities?

11 MR. ALLEN: Jon, as a quick example, 12 the short answer is yes. In operations, for 13 instance, we've had several shift managers on 14 industry visits at numerous other stations, so 15 we're doing quite a bit of that and getting some 16 pretty positive feedback.

17 MR. HOPKINS: All right, thank you.

18 MR. ALLEN: In the area of industry 19 assessments, these are also utilized to allow us a 20 strong leverage that utilize industry specialties 21 to assess our performance, and examples of these 22 areas completed so far this year include our 23 technical skills training evaluation, we evaluated 24 work management, also our primary systems 25 integrity review, which I mentioned previously, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

24 1 and we also have numerous industry assessments 2 remaining this year, including areas such as our 3 Corrective Action Program, our transformers, our 4 switch yard controls, evaluation of plant 5 performance and operations training assessment.

6 We also had numerous assessments from multiple 7 oversight groups such as the organization --

8 oversight organization at Davis-Besse led by Ray 9 Hruby, the company Nuclear Review Board, which 10 reviews our performance on a quarterly basis, the 11 Nuclear Committee of the Board, which provides 12 additional oversight, our FirstEnergy President, 13 who periodically visits the station, and our 14 monthly performance review meetings with the 15 executive leadership team.

16 In addition to the assessments I've already 17 mentioned, we also have four Confirmatory Orders, 18 independent assessments of our operations 19 performance, Corrective Action Program, 20 organizational safety culture and safety conscious 21 work environment and engineering programs 22 effectiveness, which we use the Confirmatory Order 23 independent assessments as independent validation 24 of our own extensive assessment processes.

25 MS. LIPA: The question I have for MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

25 1 you, Barry, is how do you integrate the results 2 from all these different assessments, and how do 3 you prioritize the actions you plan to take?

4 MR. ALLEN: Christine, we utilize our 5 Corrective Action Program, all the assessments, 6 opportunities for improving and entering into our 7 Corrective Action Program, and then each of our 8 managers, each department on a quarterly basis or 9 monthly basis go back and look at all of that data 10 from all the different inputs, so we use, for 11 instance, a bidding process, the department 12 manager uses input from all these assessments, bin 13 the results, look for common things, and then the 14 senior management team will review those results 15 and look for cross-cutting things across the 16 station.

17 MS. LIPA: So it sounds like you're 18 relying on some training --

19 MR. ALLEN: Yes.

20 MS. LIPA: -- to prioritize the 21 results or the plans you plan to take, and then do 22 you have action plans that you develop for each 23 one of these assessments or just for certain ones?

24 MR. ALLEN: We have action plans, 25 again, Christine, that get entered into our MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

26 1 Corrective Action Program, so all the opportunity 2 for improvement identified will get entered into 3 our Corrective Action Program, and then we'll 4 track those through that program.

5 MS. LIPA: Okay, thank you.

6 MR. ALLEN: Next slide, please.

7 In summary, our people at Davis-Besse have a 8 very strong safety focus, which has resulted in 9 safety conservative operation of the unit and 10 which will ensure continued safety conservative 11 operation of the unit. That concludes my 12 presentation.

13 MR. REYNOLDS: Barry, could you talk some 14 more about the results from the mid-cycle outage 15 both from a performance issues point of view and 16 from a safety conscious work environment point of 17 view?

18 MR. ALLEN: We will --

19 MR. REYNOLDS: Or if somebody will?

20 MR. ALLEN: Mark will discuss the 21 mid-cycle outage in more detail.

22 MR. REYNOLDS: Okay, thank you.

23 MR. ALLEN: If there is no further 24 questions, I'll turn the presentation over to Bob 25 Schrauder.

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

27 1 MR. SCHRAUDER: Thank you, Barry. Very 2 briefly, I want to go over the status of some of 3 the commitments that we made to you.

4 In November of 2003, as we were preparing to 5 restart the plant, we submitted to you what we 6 identified as an integrated restart report. That 7 report contained some 38 commitments of either 8 ongoing activities that we committed to continue 9 doing or additional actions that we would take to 10 ensure the continuous improvement of Davis-Besse.

11 To date, as you can see on the slide, we have 12 completed 31 of those 38 commitments.

13 We also submitted what we call the cycle 14 14 operational improvement plan, which included an 15 additional 94 commitments to the regulator that we 16 would either continue to do or additional actions 17 that we would take. To date, we have closed 71 18 of those commitments, and we are on track to 19 complete the remaining commitments that we have 20 made to you in those regards.

21 MR. REYNOLDS: And cycle 14 ends next --

22 MR. SCHRAUDER: Cycle 14 completes after 23 the end of the next refueling outage --

24 MR. REYNOLDS: Which is?

25 MR. SCHRAUDER: -- which is in the spring MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

28 1 of next year.

2 MR. REYNOLDS: Okay.

3 MR. SCHRAUDER: Okay, the next slide, 4 please.

5 One of the areas that we -- you and we both 6 paid particular attention to was the amount of 7 backlog items that we had open, actions to 8 complete at the site. The way we're tracking 9 that is what we call this total site open 10 documents, and these things include corrective 11 actions, condition report evaluations, corrective 12 maintenance items, elective maintenance items, 13 procedure change request, anything that requires 14 us to take action is included in the open site 15 documents report. When we came out of the long 16 outage, we had approximately 18,000 open site 17 documents to work on. In addition to that, since 18 the time that we restarted the plant, we have 19 generated an additional 14,000 roughly actions to 20 take in some regard. This graph goes back to 21 July of '04 and shows the current status of the in 22 minus the out or the reduction of the backlog of 23 items. We call that a backlog because it's over 24 and above what we would consider a normal 25 throughput or workload. We've done some industry MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

29 1 bench marking in all of the areas and have come to 2 the conclusion that for our plant and our size 3 plant a workload is somewhere between around 4,500 4 to 6,500 open documents that you can expect at any 5 given time, and our goal has been to reduce what 6 is currently a backlog down to a workload by the 7 end of this cycle, or by the end of the refueling 8 outage. This demonstrates that we are on target 9 currently to meet that goal, and we feel we're 10 doing a pretty good job of reducing the backlog 11 and converting it into an ongoing workload for us 12 that we'll be able to maintain at approximately 13 that level going forward.

14 MR. REYNOLDS: And just to help everybody 15 out here, backlog reduction has been an area of 16 concern for the NRC and remains so, in fact, this 17 is one of the areas where we'll be doing 18 additional inspections this coming year, so, 19 again, backlog reduction is getting additional 20 inspection above the reactor oversight process 21 which was of concern.

22 MR. SCHRAUDER: That concludes my remarks 23 unless there are any questions.

24 (NO AUDIBLE RESPONSE).

25 MR. BEZILLA: Okay, thanks, Bob. Next MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

30 1 slide. So what is safety culture? We've defined 2 it as that assembly of characteristics and 3 attributes in organizations and individuals which 4 establishes that an overriding priority toward 5 nuclear safety activities and issues receive the 6 attention warranted by their significance.

7 And what is safety conscious work environment?

8 An environment in which personnel are encouraged 9 to identify problems, are confident that problems 10 will be effectively evaluated and corrected, and 11 are protected from any form of retaliation as a 12 result of having raised issues. I believe my --

13 the Davis-Besse people have a strong safety focus.

14 Next slide, please.

15 Prior to our steam generator inspection 16 mid-cycle outage a little over four months ago, 17 the management team adopted the following areas of 18 focus to demonstrate clear overriding priorities 19 for nuclear, industrial, radiological and 20 environmental safety. A safety versus schedule 21 focus, overall communication quality, openness of 22 communication of emergent issues, openness for 23 employee ideas for solutions to emergent plan 24 issues, resolution and disposition of emergent 25 issues and engagement of the workforce. As a MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

31 1 result of this focus and effort, I'm pleased to 2 inform you that we have seen positive results.

3 Feedback from our employees in general is 4 positive. Our employees are engaged. For 5 example, employees participate in problem solving 6 and decision making teams, and they are 7 participating in our training review committees 8 and our curriculum review committees which lay out 9 the future trainees for their respective sections 10 and departments. Management is engaged. The 11 best example here is the implementation of our 12 duty teams. The duty team has key members of the 13 staff engaged in day-to-day activities, and 14 they're available, I'll say 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day, at a 15 moment's notice to respond to any plant issues 16 that may arise, and, in a minute, I'll share the 17 results of a recent eight question survey that was 18 administered shortly after the steam generator 19 inspection mid-cycle outage. The purpose of the 20 survey was to solicit feedback from our folks for 21 the management team to see how we were doing in 22 regard to our focus areas. Also, based on some 23 input from you all as to how do you compare to 24 other nuclear sites, nuclear facilities from a 25 safety culture, safety conscious work environment MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

32 1 standpoint, we also found that industry group 2 utilities services alliance that conducts safety 3 culture assessments very similar to the survey 4 that we conduct on an annual basis in accordance 5 with our nuclear operating practice. We spent --

6 we sent them our November 2004 survey results and 7 asked them to compare us to a recent population of 8 other facilities or peers, if you will, that they 9 had surveyed, and the results were encouraging.

10 What we saw was we were not an outlier, and in 11 some areas compared very favorably, in fact, very 12 positive to our peers. Next slide, please.

13 MR. REYNOLDS: Mark, before you go on --

14 MR. BEZILLA: Yes.

15 MR. REYNOLDS: Again, I want to talk 16 about safety culture, safety conscious work 17 environment as obviously one of the areas of the 18 Confirmatory Order. The licensee, from our point 19 of view, still has to do more work there. Is it 20 safe enough right now, I think we are still 21 looking to focus on that through independent 22 assessments, and we're willing to do more 23 inspections in that area, so that's, again, the 24 extra inspections we're going to do in this area, 25 safety culture, safety conscious work environment.

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

33 1 MR. BEZILLA: Now, Steve, the next few 2 slides are, I'll say, the results of our post 3 steam generator mid-cycle outage survey. Next 4 slide. What we have at the time is the question 5 that was asked on the survey, and then we put 6 together the results in a pie chart, and we 7 strongly agree, the agree and the generally agree 8 are in the blue, green, and dark blue. The 9 disagree and strongly disagree are in yellow and 10 red, and we did that so it would be pretty visible 11 from a distance because sometimes I know numbers 12 and things are hard to see, and what we found is 13 in the previous surveys sometimes our folks just 14 don't know or they don't have an opinion so we 15 gave them a don't know, an opportunity to just, 16 I'll say, abstain from commenting if they didn't 17 have anything from a positive or a negative or an 18 agree or disagree standpoint. So, in regard to 19 the first question here, decisions appropriately 20 weighted safety significance relative to schedule, 21 and, as we said, that was one of our focus areas.

22 You can see the results are fairly positive, I'll 23 say, in fact, very positive from our folks, and 24 some of the comments that came with the survey 25 results, and these are our people providing us MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

34 1 feedback, what we did well, problem solving teams 2 worked through issues and evaluated plant 3 conditions to determine how to proceed without 4 feeling pressured to meet schedules or at the 5 expense of safety, the outage directors and 6 assistant outage directors emphasized safety over 7 schedule. Next slide.

8 The next question was, I was kept generally 9 informed of what was happening and why, and, 10 again, you can see very positive response. A few 11 disagrees, but, in general, very positive. What 12 went well during the mid-cycle, Bob and Steve, who 13 were the outage directors put out daily e-mails, 14 and those were very well received. We had an 15 outage newsletter that helped keep our folks in 16 the know. Our morning meetings were informative 17 and detailed. Shift turnovers were very 18 thorough, and we had an outage log summary that 19 was computerized so you could get in and check 20 what was going on if you cared to on your own.

21 Those were all a number of positives.

22 One of the feedback items that we got that 23 said we could have done better on was communicate 24 how many hours behind or ahead of schedule we 25 were, and I think I mentioned it before, but we MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

35 1 made a conscious decision to not focus on 2 schedule. About a week into the outage, our 3 people couldn't stand it, and they said you got to 4 let us know where we're at in regard to the 5 critical fact path -- where we are at in regard to the 6 schedule, you got to keep us informed, so we may 7 have went too far in the one direction, but we 8 took that feedback. All right, next slide, 9 please.

10 The third question was, employees were 11 encouraged to identify emergent issues, and you 12 can see here again, very positive response by our 13 folks. Again, some of the -- what we did well 14 comments, the outage control center atmosphere was 15 open and supportive, and we were encouraged to 16 identify emergent issues as soon as possible.

17 Next slide, please.

18 Employee input was encouraged to help resolve 19 emergent issues, again, very positive response.

20 Some things on what we got -- what we did well, 21 performed problem solving -- or formed problem 22 solving teams that were multi-disciplined, 23 included the craft, encouraged to provide input, 24 not pressured to find quick solutions, and the 25 outage directors and the outage control center MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

36 1 were receptive to input, and one of the items in 2 this question that we got where we could have done 3 better was to provide better explanation of the 4 basis used to make decisions to the staff and the 5 team, and that was an area of focus, and we tried 6 to make sure we were clear on why we made the 7 decisions we made, but we got feedback, and we 8 know we can improve, and we will work to improve.

9 Next slide.

10 MR. REYNOLDS: That's an area that I 11 think everyone assumes probably will be better --

12 not only internally, but the NRC provides the 13 basis for every decision, so if you could remember 14 internally the basis behind the decisions.

15 MR. BEZILLA: Yes, we agree. The next 16 question, emergent issues were appropriately 17 investigated, prioritized and resolved, and, 18 again, pretty positive response from our folks.

19 A couple of things that we did well, problem 20 solving and decision making and emergent issues 21 manager helped to resolve issues in a timely, 22 focused manner. For this outage we had a number 23 of individuals, a few individuals that called the 24 emergent issues manager whenever something popped 25 up that was not part of the plan, they got it, and MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

37 1 then they had the resources to figure out, did we 2 need a problem solving decision making plan, who 3 should be on the team, what resources would we 4 need, and the team, I think, felt very positive 5 about those individuals, how they formed and, I'll 6 say, coordinated activities to resolve issues that 7 came about during the outage. Next slide.

8 I think this was the seventh question, I was 9 engaged and we were aligned as a team during the 10 outage, a few strongly disagrees and agrees here, 11 but, again, overall pretty positive response, and, 12 again, what did we do well outage director --

13 outage directors communicated well. Senior 14 management, that would probably be Barry and I in 15 this case, didn't bird-dog, concentrated on big 16 issues, and the daily meetings kept communications 17 flowing, and then one of the things under this 18 question we could have done better, provide 19 additional training on outage assignments upfront, 20 and as we did with all of these comments, we took 21 them and put them into our outage critique, and 22 then we'll have additional follow-up, but we 23 thought that was of particular note that our 24 people wanted to have a better idea if they were 25 stepping into a new role during the outage, and we MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

38 1 owe it to them to provide them the information and 2 the training to be successful, so we took that to 3 heart. And then the last question, next slide.

4 Do you feel good about what we achieved during 5 the outage, and little less than 98 percent 6 positive response, and we felt pretty good about 7 that, and what we did well, some comments on this 8 question performed every task safely and 9 efficiently, worked as a team, handled emergent 10 issues well, reduced dose and contamination 11 throughout the plant, good work environment in the 12 outage control center, and the plant was returned 13 to service in better shape than when we headed 14 into the outage, and one of the things we got back 15 as a could have done better, communicate critical 16 path activities and key equipment problems, and 17 even though that was a focus area for us, we said, 18 okay, we got it, but we can do better, okay, we'll 19 try to do better.

20 A couple of additional things we thought were 21 worth mentioning here because they're what our 22 people told us, and this is what they said is that 23 senior management team demonstrated the performing 24 work activities in the correct and safe manner was 25 the highest priority. More emphasis was put on MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

39 1 getting the job done right no matter what the cost 2 or schedule. Emergent issues were handled with 3 calm observations, clear data and fact gathering 4 and team approaches to resolutions, and then this 5 was sort of the kicker, and the one gal that took 6 all this data and put all this together, she put a 7 little slide with, I'll say, people holding up 8 sort of a trophy, and this is how she thought and 9 she felt was probably the key comment, we're 10 beginning to function as a team. I found trust 11 and honesty in the outage support center.

12 Leadership, I saw a team dedicated to doing what 13 was safe and what was right. I found support when 14 needed, and I never felt alone, and I just thought 15 that was a very positive statement from our folks.

16 A couple recommendations going forward in 17 regard to this question, keep the conservative 18 safety focus management approach, build on what we 19 did in the mid-cycle, communicate, communicate, 20 communicate, so those were the results of our 21 eight question survey and the result of some of 22 the focus that the management teams put on the 23 outage and beyond from a safety culture, safety 24 conscious work environment standpoint.

25 MS. LIPA: (Indicating).

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

40 1 MR. BEZILLA: Yes, Christine.

2 MS. LIPA: Just a couple questions.

3 Did you tell us the number that responded to 4 the survey?

5 MR. BEZILLA: The number was 199 of our 6 approximately 700 people.

7 MS. LIPA: And what was the method 8 that people were handed surveys, did you have an 9 in-box or e-mail, or what was the method that they 10 were given the choice to participate in the survey 11 or not?

12 MR. BEZILLA: It was a computer capable 13 response, it was a hard copy response, it was 14 e-mail to the staff management projection, and I 15 think we even ran in our news article a couple of 16 items in there that said, hey, we need your 17 feedback, please take a minute and fill out the 18 survey for us, so with a lot of communication 19 methods to get the feedback.

20 MS. LIPA: Okay, thank you.

21 MR. BEZILLA: Okay, my next slide.

22 In conclusion, I believe we have a healthy 23 safety culture at Davis-Besse, and I know we have 24 people that will raise issues and concerns. And 25 if there is nothing else, I'll turn it over to MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

41 1 Ray.

2 MR. HRUBY: Thanks, Mark. Good 3 evening. Barry, Bob and Mark have already 4 discussed some of the results of the recent 5 activities at Davis-Besse. Today, I will be 6 presenting some of the quality oversight 7 organization's independent observations.

8 First, I want to begin by stating that based 9 on our observations and assessments the oversight 10 section concludes that Davis-Besse continues to be 11 operated in a safe manner. Next slide, please.

12 Now, I will be presenting some of the 13 highlights of the results of quality oversight 14 organization's first quarter assessment. The 15 details of the assessment are contained in quality 16 filled observations and the assessment findings 17 have been entered into the corrective action site.

18 Quality oversight audited 23 primary elements in 19 the four functional areas of operations, 20 engineering, maintenance, and support during the 21 first quarter using our internal assessment 22 process.

23 Four performance categories are used to rate 24 the effectiveness of programs and primary 25 elements. These rating are effective, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

42 1 satisfactory, marginally effective, and 2 ineffective. During the first quarter, one 3 primary element was rated effective, 19 were rated 4 satisfactory, three were rated marginally 5 effective, and there were no primary elements that 6 were rated ineffective.

7 During the first quarter, nuclear oversight 8 also reconciled the environment attribute and 9 rated it to be satisfactory. The conduct of 10 radiation protection was the primary element that 11 was rated effective. Contributing to this rating 12 were effective exposure and contamination and 13 controls that were demonstrated during the 14 mid-cycle steam generator inspection outage.

15 Three primary elements were rated marginally 16 effective. The first of these was the limiting 17 conditions for operating technical specification, 18 tracking primary element in the operation program 19 area. This rating was adversely affected by 20 technical specification compliance issues that 21 occurred during the first and second quarters of 22 2004.

23 Four other primary elements were rated 24 satisfactory. The second primary element to be 25 rated marginally effective was corrective action MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

43 1 effectiveness. Improvements continue with some 2 aspects of the Corrective Action Program, and 3 action plans were in place to address other areas 4 for improvement; however, a relatively large 5 backlog and timeliness issues still challenge 6 overall program effectiveness.

7 And the third primary element that was rated 8 marginally effective was emergency response 9 performance indicators. The emergency plan 10 control and contents primary element was rated 11 satisfactory. This indicates that the program 12 controls required to respond to emergency remain 13 satisfactory. Next slide.

14 MR. REYNOLDS: Before you go on.

15 MR. HRUBY: Okay.

16 MR. REYNOLDS: First, I'd appreciate it 17 if you'd comment about oversights' overall 18 assessments of Davis-Besse, something we're always 19 looking for is oversights' assessments and how the 20 plant is operating, so I appreciate that. Now, 21 my question is, the three primary elements that we 22 have marginally effective, how long have they been 23 marginally effective based on how you count 24 quarter-wise or however?

25 MR. HRUBY: Let me look here. Okay, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

44 1 the corrective action effectiveness has been 2 marginally effective for the last two periods.

3 MR. REYNOLDS: Do you remember what it 4 was before that?

5 MR. HRUBY: No, I don't have that 6 information, but we could get that for you.

7 MR. REYNOLDS: I was wondering if it was 8 above training or --

9 MR. HRUBY: I would have to get that 10 information.

11 MR. REYNOLDS: Okay.

12 MR. HRUBY: The performance indicators 13 in the emergency preparedness area was white 14 during the last -- which was satisfactory, and 15 that was largely marginal due to the performance 16 indicators, white indicators that we have 17 currently.

18 MR. REYNOLDS: Okay. And your first one?

19 MR. HRUBY: Oh, the first one was 20 limited conditions for operation. I don't have 21 the data for that, so I'll have to get back to you 22 on that.

23 MR. REYNOLDS: Okay. I was trying to 24 put you on the spot, see if know.

25 MR. OSTROWSKI: If I can repeat the MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

45 1 question, you're looking for what was the overall 2 rating?

3 MR. REYNOLDS: What I'm really -- my 4 specific question is how long has it been 5 marginally effective, what's the trend? Is it 6 staying flat, no improvement, have we gone from 7 ineffective to marginally effective, that 8 direction, or are we going from satisfactory to 9 marginally effective?

10 MR. HRUBY: I don't have the rating, 11 but I can tell you that based on our assessments 12 in the first quarter of operation performance and 13 the technical specification alliance there, there 14 has been improvement. As I stated, the 15 marginally effective rating was largely due to 16 events that occurred in first and second quarter 17 of 2004, so there has been improvement in 18 operation, if that answers your question.

19 MR. REYNOLDS: Yes, it does. Thank you.

20 MR. THOMAS: Ray, you may cover this in 21 your next slide, but let me ask it anyway so you 22 can bring it in if that's where you're going to 23 cover it.

24 MR. REYNOLDS: Can you hear Scott?

25 UNIDENTIFIED: No.

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

46 1 MR. THOMAS: How about now?

2 UNIDENTIFIED: No.

3 MR. THOMAS: Can you hear me now?

4 MR. REYNOLDS: It's not working.

5 MR. THOMAS: The question that I have, 6 ideally in regards to the identification of 7 issues, you know what we like to see is licensee 8 staff, you know, identify the significant majority 9 of issues, QA and oversight, identifying the much 10 smaller sub-set of the issues, and then there 11 would be nothing left for us to find, okay, so, in 12 your opinion, where is QA in that spectrum? Are 13 you finding too many issues, are you -- issues 14 that should be identified by, you know, the 15 licensee staff, do you understand my question, or 16 I can try again?

17 MR. HRUBY: No, I understand your question.

18 You're asking if relative to the line organization 19 is oversight identifying more than we should, less 20 than we should or about the right amount?

21 MR. THOMAS: Yes.

22 MR. HRUBY: Okay.

23 MR. THOMAS: And any insights that you 24 have to go along with --

25 MR. HRUBY: Okay. In the past, I'm MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

47 1 going from memory here, so -- I believe the 2 identification rate for internal oversight was 3 running roughly 10 percent. Recently, I've seen 4 some data that that shows that that percentage is 5 lower than it has been, so it's indication to me 6 that the organization is identifying more 7 conditions adverse quality relative to oversight 8 than they have been, if that answers your 9 question.

10 MR. BEZILLA: Scott, let me help Ray 11 here, Ray, so a line, a line -- line's goal is to 12 identify all of their problems, right, so anything 13 Ray identifies is a failure on, say, on our part, 14 all right, so we strive to find all of those, in 15 fact, we have goals set up, but the last look/see 16 for, I believe it was April time frame we were 17 about 84 percent where the line had identified 84 18 out of 100 things, a line's was identified. Ray's 19 guys were identifying about seven out of 100 20 things, and then the remainder was identified by 21 either you all or other outside organizations that 22 came in and looked at us, right, and where we'd 23 like to be is up in the 90's where we're 24 identifying over 90 percent of the items, I'll say 25 self-identification type range, so that's an area MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

48 1 we watch, and I'll try to help Ray here, I'd just 2 as soon him not find anything, but if the line 3 doesn't find it, I'd much rather have him find it 4 than have you guys have to look for it and find 5 it, all right, so that's our goal, and that's 6 where we want to be. We want to be identifying 7 things within the line, and, worse case, have Ray 8 and his guys identify issues.

9 MR. THOMAS: Okay.

10 MR. HRUBY: Okay, next slide. Next I 11 want to talk about some independent insights and 12 future focus area. First procedure use and 13 adherence remain a site-wide cross-cutting concern 14 at Davis-Besse. Although improvements have been 15 noted in adherence to step-by-step procedures, 16 adherence in the field general reference procedure 17 remains now. Continued management attention in 18 this area is warranted to ensure that corrective 19 actions are implemented to address this procedure 20 use and adherence issue.

21 Second, operations performance remains a focus 22 for quality oversight organization, although 23 oversight has observed some improvement in overall 24 operations performance since 2004. Some 25 operations performance issues indicate that there MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

49 1 are still some areas that need to be improved.

2 Third, relatively large overall site-wide 3 workload continues to be an issue at Davis-Besse.

4 Oversight will continue to closely monitor the 5 backlog activities to ensure they're being 6 performed in a quality manner.

7 Fourth, management behaviors in organizational 8 performance remains a focus for the oversight 9 section. Our observations and feedback from site 10 personnel indicate the Davis-Besse management team 11 continues to consistently exhibit the appropriate 12 safety culture and encourages a healthy safety 13 conscious work environment.

14 And, fifth, the Davis-Besse line organization 15 continues to be very responsive when oversight 16 expresses concerns or intervenes station 17 activities. Davis-Besse line organization has 18 also on a number of occasions recognized the 19 oversight section for being intrusive and critical 20 and for adding value during the performance of 21 station activities. This concludes my 22 presentation. Are there any questions?

23 MR. REYNOLDS: I want to go back to the 24 third bulletin, overall site-wide workload, and, I 25 guess, ask individually, Steve, Barry, and, Bob, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

50 1 do you have the staff and resources that you need 2 to address workload and the backlog reduction?

3 MR. ALLEN: Yes -- yes, we do, Steve, 4 and I think if you look at just the relevance of 5 that chart and if you look at the graph that Bob 6 put up, of course you can see we have been making 7 progress, pretty consistent progress, and that's 8 with the staff and resources we've always had, and 9 we continue to make progress, we continue our 10 ability to stay on our work and get where we're 11 projecting our overall workload to be.

12 MR. LOEHLEIN: Yeah, and speaking for 13 engineering, Steve, we have maybe in some ways 14 surprised ourselves. We have been training ahead 15 of the curves we originally projected for 16 ourselves, and on each challenge we've had, we 17 continue to make good progress on the backlog 18 reduction numbers and the level and commitment of 19 resources we have, so we're real confident in our 20 ability to continue to reduce the backlog.

21 MR. SCHRAUDER: I'd say, yes, we have the 22 resources we need. If we need additional 23 resources and have asked for them, we've got them 24 then. We do have some augmented staff, I'd say 25 right now. Particular areas that I'm working on MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

51 1 is procedure, backlog reduction, and we have a 2 group of contract procedure writers that's 3 assisting us in that, so, as you know, we have had 4 set aside some additional funds for last year and 5 this year for Davis-Besse, specifically to work 6 out these items, so, to date, we have been given 7 the resources that we need and we'll expect that 8 to continue.

9 MR. REYNOLDS: Thank you.

10 MR. THOMAS: That includes PM back --

11 specific, PM backlogs as far as projected 12 backlogs, staffing to work off plant maintenance 13 activities, etc. Did that include that sub-set of 14 work?

15 MR. SCHRAUDER: I'm not sure I understand 16 your question, Scott.

17 MR. ALLEN: Scott, if you're asking 18 about the PM backlog --

19 MR. THOMAS: Yes.

20 MR. ALLEN: -- yes, that includes 21 that, that's part of the maintenance backlog and 22 that's included.

23 MR. THOMAS: Okay.

24 MR. HOPKINS: Ray, last bulletin on 25 organizational responsiveness, how do you monitor MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

52 1 that, what do you assess to check that?

2 MR. HRUBY: What we did is, as you're 3 probably aware, conducted a survey and interviews 4 late last year, and what we did was we, based on 5 the results of the surveys specifically focused on 6 management behaviors and organization and 7 performance, one of the mid-cycle outages and 8 beyond, and we largely based that on our own 9 observations, sitting in the meetings, sitting 10 with the problem solving teams, monitoring the 11 Corrective Action Program and performance and 12 follow-up discussions with individuals, let's say, 13 and so those are the types of tools we use to make 14 our assessment.

15 MR. HOPKINS: So a lot of the check is 16 on management decision making then?

17 MR. HRUBY: Well, it's not just 18 management decision making, it's people bringing 19 up issues, expressing concerns, writing condition 20 reports, and then the management responds to the 21 concerns that are raised. We're watching the 22 whole process.

23 MR. HOPKINS: Okay, thank you.

24 MR. BEZILLA: Okay, next slide. Before 25 I conclude, Steve, there's one individual that MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

53 1 played a very key role, I'll say, in getting us 2 off of the 0350 process and has also helped 3 another FENOC site here in the most recent past, 4 and I usually don't get a chance to get the last 5 word, but I might tonight, okay, but before I do 6 that, I'd like to offer Lew Myers, our chief 7 operating officer, a moment if he had any remarks 8 he'd like to make at this meeting? Lew?

9 MR. MYERS: I do think there's some 10 things worth noting is that -- let me tell you 11 what I heard tonight is that -- and one thing I 12 don't think we said is --

13 MR. REYNOLDS: Can you hear back there?

14 UNIDENTIFIED: No.

15 MR. MYERS: Okay, can you hear me?

16 UNIDENTIFIED: Yeah.

17 MR. MYERS: One of the things that was 18 said tonight is that, you know, we should be proud 19 of our company, FirstEnergy, their support is 20 throughout the return to service this plant and 21 continues to support us to improve the operation 22 of the facility and provide the resources we need 23 for good performance. I also heard that you said 24 we're really proud of our employees, that we think 25 they're demonstrating a good safety focus, but I MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

54 1 also heard NRC to say in the Confirmatory Order 2 program, this is only Step 2, you know, we still 3 have Step 3. Step 3 -- 2 means you'll continue 4 to watch our safety culture for a long length of 5 time. You know, I think the plant is performing 6 well. I continue to monitor the pre-job 7 briefings, said when we started the plant the 8 Corrective Action Program, decision making and 9 troubleshooting process and the leak rate programs 10 would service well, I believe they are, and, once 11 again, what I heard out of the NRC tonight is this 12 is only the second step in regaining public trust, 13 and we must continue to address our backlogs and 14 we've committed to do that. We must continue to 15 meet our commitments to you, and we've committed 16 to do that, and we're demonstrating that. I 17 heard Bob say that. We must demonstrate that our 18 work preparedness continues to improve and that 19 we're ready to handle issues and address them 20 properly, and we must continue to earn the trust, 21 and we do that by having a strong assessment 22 process that you'll monitor throughout the 23 Confirmatory Order and Step 3 of being a normal 24 plant. That's what I heard tonight, and I think 25 you have our commitment to moving forward. Thank MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

55 1 you.

2 MR. REYNOLDS: Thanks, Lew.

3 MR. BEZILLA: Okay, thank you, Lew. So 4 in conclusion, today at Davis-Besse we have 5 employees who are people with a strong safety 6 focus. We have an engaged workforce, healthy 7 safety systems, reliable equipment performance, 8 fleet governance in oversight and desire to 9 improve in everything we do.

10 I'd like to thank all those groups and 11 individuals that helped us through the last three 12 years. These groups include you all, the 13 regulator, our industry peer groups, which you 14 heard a number of these guys talk about, state, 15 and local representatives and officials, and the 16 community at large. This team, Davis-Besse, will 17 remain committed to safe and conservative 18 operation, and we will strive for continuous 19 improvement in all that we do. Thank you very 20 much.

21 MR. REYNOLDS: Thanks. Let's -- now, if 22 we can, let's go to the very last slide.

23 MR. BEZILLA: Which one, Steve?

24 MS. LIPA: Last slide of the NRC 25 packet.

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

56 1 MR. REYNOLDS: Yes.

2 MR. BEZILLA: Oh, the NRC slide back 3 here? The last slide for NRC.

4 MR. REYNOLDS: I have not skipped the 5 question and answer period, I just want to go to 6 this slide, and then we'll get questions. I 7 don't know if Scott or John, anything you want to 8 say at this time?

9 MR. HOPKINS: Yeah, I'll start off, you 10 can fill in here if someone else wants to address 11 this. We have been holding these routine 12 periodic public meetings here for several years 13 now as part of the 0350 Panel. I'm not sure how 14 well it's been explained, but when we go to the 15 reactor oversight process, these normal public 16 meetings will not be held like this. We will 17 have always an annual meeting where we will talk 18 about the assessment of the plant operations for 19 next year and also talk about our upcoming 20 inspections, and that occurs annually, but this 21 number of public meetings will not be happening.

22 The NRC has a public affairs office in both 23 Region III and in headquarters. We have our web 24 site, which you can see at the bottom where you 25 can feedback and contact us. Of course, there is MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

57 1 the Resident Inspectors here at site that can 2 always be contacted, the NRC's phone number is in 3 the phone book, so there are ways to continue to 4 contact us when we are in the reactor oversight 5 process over at Davis-Besse, and that's all I have 6 to say.

7 MR. REYNOLDS: Thanks, Jon.

8 MR. THOMAS: I have nothing.

9 MR. REYNOLDS: Christine?

10 MS. LIPA: No.

11 MR. REYNOLDS: Bill?

12 MR. RULAND: Just a couple thoughts.

13 We've -- at least for me, I have done this now for 14 two years, and what has struck me about this --

15 these public meetings is the public accountability 16 that I feel personally about having these 17 meetings. There is something about getting up in 18 front of members of the public and these folks 19 seeing what we do and the decisions we make, and 20 it's that public accountability that is really at 21 the heart of what the NRC is all about, and, 22 ultimately, I think what FENOC is all about, and I 23 don't think we're going to lose that, and I hope 24 we don't, that we go back to our what I'll say our 25 standard business is, and we maintain a sense of MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

58 1 that public accountability. It's something that 2 I believe that the NRC holds very dearly, and I 3 think this process has taught us both how easy it 4 is to lose that public trust and how very, very 5 difficult it is to regain it, and that's just kind 6 of my personal reflection on this.

7 Just on another note, we issued on May 19 a 8 letter that transitioned you folks to the normal 9 oversight process, and I think I heard that you 10 acknowledged you're not there yet, Lew said that 11 you're basically at Step 2, and we agree you're 12 not there yet. You're going to have to do 13 independent assessments for another four years.

14 We're going to watch those. We're going to make 15 sure that those are done right because when we 16 issue that Confirmatory Order, we want to make 17 sure that your performance truly was sustained, 18 and we're going to keep doing that, not only 19 through those independent assessments, but through 20 our routine operations, and, finally, we're 21 basically going to be going to almost routine 22 work, and it's in that routine work that sometimes 23 we lose that edge and on this verging subject we are converging, NRC staff 24 and FENOC, which I think I've already heard is 25 that we're really not going to make it routine.

MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

59 1 We're going to make vigilance routine, and I think 2 that's what the public deserves, and I know the 3 NRC staff is prepared to commit to that. Thank 4 you.

5 MR. REYNOLDS: Thanks, Bill. You may 6 have to bear with me because I may repeat some of 7 the things that Bill said, but first thing I want 8 to say to members of the public -- it's not 9 working -- can you hear me now, I may end up 10 repeating some of the things that Bill said, 11 you'll have to bear with me, but the first, I want 12 to tell the members of the audience that you're 13 very lucky in that your local officials, your 14 Ottawa County Commissioners, have been and are 15 very involved in Davis-Besse, and from working at 16 the NRC for a long time and interacting with a lot 17 of different utility process sites, the level of 18 commitment from the Ottawa County Commissioners is 19 to be applauded, and you're well served in a 20 nuclear safety point of view from them, and we'll 21 continue to interact with them, and I think FENOC 22 is going to continue doing that. I lost my mike 23 again.

24 (APPLAUSE).

25 MR. REYNOLDS: I don't know if I'll lose MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

60 1 my mike, again, but I'll just stand up here.

2 Again, the Ottawa County Commissioners, they did a 3 good job and are continuing.

4 We've heard tonight that the NRC has enough 5 confidence in the licensee to operate the plant 6 safely. We'll be transitioning out of 0350 back 7 to the oversight process with additional 8 inspections. They can ride their bicycle, but 9 they need training wheels. We've heard from the 10 licensee their commitment to continue to improve 11 and you've heard publicly, we met with them 12 separately, and they committed to us also to 13 continue to those meetings to continue to go 14 forward and improve, that's important, that's 15 important for Davis-Besse and important for FENOC 16 and important for the nuclear industry and 17 definitely important for the public. The NRC has 18 also improved over the last three years. Nobody 19 in this business wants another Davis-Besse to 20 happen, period, so, when Bill Ruland talked about 21 vigilance, it goes for every person that works in 22 the nuclear business whether you're a regulator or 23 licensee or a contractor, so, vigilance is key.

24 While I have the floor, I do want to take the 25 opportunity to thank the NRC staff, Bill Ruland, MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

61 1 Jon Hopkins, Christine Lipa, Scott Thomas, Scott's 2 staff has lived Davis-Besse for a long, long time 3 and it's a huge effort for the NRC to follow a 4 plant like this, to follow three years' worth of 5 effort to restart, to make the call whether the 6 plant is safe to operate, to make the call that 7 they're ready to return out of the 0350 and back 8 into the reactor oversight process with additional 9 inspections, so I want to thank each and every one 10 of you, appreciate the effort. Also, my 11 predecessor, Jack Grobe, made significant efforts 12 here, so -- he's not here, of course, but he can 13 read it on the record, so thanks to Jack, and 14 thanks to each and every one of you. I think 15 several of you actually work at Davis-Besse, and 16 it takes individuals, each and every one of you 17 each and each and every day to do your very best 18 job, to ask the tough questions and do the job 19 right the first time, so -- and members of the 20 public that don't work at Davis-Besse, your 21 vigilance in making sure that activities both from 22 the licensee and from the NRC that we do our job 23 day in and day out. We want you to stay vigilant 24 also.

25 With that, I think I'll close. We'll take a MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

62 1 short break and then come back for questions. If 2 any of you are not staying for questions, I 3 appreciate you coming, and drive safely, so, with 4 that, we'll take a -- probably a 10 minute break 5 and be able to answer questions.

6 THEREUPON, a brief recess took place.

7 MR. RULAND: Okay, let's get started.

8 We're ready, take a seat, please, and we'll get 9 started.

10 MR. REYNOLDS: Let's get started. All 11 right. The way I'd like to do this is offer the 12 elected officials the opportunity to go first, so 13 if you have any questions.

14 MR. PAPCUN: Thanks, Steve. Since I'm 15 older than Lew, I'll go first.

16 (Laughter).

17 I'm John Papcun, President of the Board this 18 year, and on behalf of my colleagues, Carl Koebel 19 and Steve Arndt, first of all, I'd like to thank 20 the NRC, the panel, and all your employees for 21 working with us in the last couple years, 22 cooperation and your work ethic is wonderful. We 23 also want to thank you for allowing Jere Whitt Witt, 24 our County Administrator, to serve on your Davis-Besses 25 oversight committee. We thank Jere for all his MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

63 1 hard efforts on behalf of the employees and the 2 general public in serving on that committee, which 3 I believe is unprecedented in the United States, 4 is it not?

5 MR. REYNOLDS: I believe so, yes.

6 MR. PAPCUN: So that's great!

7 Your extra meetings and lunches and dinners 8 and breakfasts with us to keep us up-to-date is 9 most welcome.

10 Secondly, I'd like to thank FirstEnergy for 11 providing the resources and the key personnel to 12 get the plant back going, that's most appreciated, 13 saved over 800 jobs in our little community here, 14 we appreciate that very much, and, of course, most 15 of all, to the employees; without which, their 16 endeavors, this never would have happened, but 17 don't stand on your morals, keep working and make 18 this the best plant in the country. I do have 19 one hit, though, for my old eyes, it's easy to 20 follow the colors on the pie charts on the screen, 21 but the black and white on here, Lew, you can't 22 follow, so you need to come up with the money to 23 either make color copies or change this to A, B, 24 C, D, E or cross action or something because the 25 two that conflict is generally agree and strongly MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

64 1 disagree on the black and white, so thank you very 2 much.

3 (Laughter).

4 MR. REYNOLDS: Thank you, John.

5 MR. WHITT WITT: Hi, I'm Jere Whitt Witt, County 6 Administrator, Ottawa County. First of all, I 7 would like to thank the NRC also for your 8 professionalism through this, the insight, my 9 education. I learned more than in my four years I 10 spent in college, I think, in going through this 11 two years of process. I remember an infamous 12 quote from Lew Myers early on in this process, and 13 I think that quote went something along the lines 14 of, it's hard to call your baby ugly. That baby 15 got pretty over three years, didn't it, Lew?

16 MR. MYERS: Absolutely. I'm right 17 here.

18 MR. WHITT WITT: And I also remember Lew 19 saying I'm going to bring in a new management 20 team, and he did that, and I applaud their 21 efforts. They certainly turned this around, and 22 he also sat in his office one day and said, these 23 are good people, they can make it happen, and I 24 think the biggest applause tonight needs to go to 25 the employees of Davis-Besse because they are MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

65 1 truly the ones that made this happen, and we thank 2 you for that.

3 (APPLAUSE).

4 MR. REYNOLDS: Thank you, Carl -- Jere.

5 Any other elected officials? If not, how 6 about members of the public that do not work at 7 Davis-Besse?

8 (NO AUDIBLE RESPONSE).

9 MR. REYNOLDS: Okay, then we'll open to 10 anybody, anybody like to ask us a question?

11 Going once, twice, three times. Everybody have a 12 very safe night and, again, thank you for coming 13 out.

14 THEREUPON, the hearing concluded at 7:38 p.m.

15 16 17 18 19 20 21 22 23 24 25 MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

66 1 CERTIFICATE 2 STATE OF OHIO )

) ss.

3 COUNTY OF HURON )

4 I, Marlene S. Lewis, Stenotype Reporter and 5 Notary Public within and for the State aforesaid, duly commissioned and qualified, do hereby certify 6 that the foregoing, consisting of 65 pages, was taken by me in stenotype and was reduced to 7 writing by me by means of Computer-Aided Transcription; that the foregoing is a true and 8 complete transcript of the proceedings held in that room on the 24th day of May 2005 before the 9 Nuclear Regulatory Commission.

10 I also further certify that I was present in the room during all of the proceedings.

11 12 IN WITNESS WHEREOF, I have hereunto set my hand and seal of office at Wakeman, Ohio this 13 day of , 2005.

14 15 Marlene S. Lewis 16 Notary Public 3922 Court Road 17 Wakeman, OH 44889 18 My commission expires 4/28/09 19 20 21 22 23 24 25 MARLENE S. LEWIS & ASSOC. REPORTERS (419) 929-0505 (888) 799-3900

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