RIS 2001-06, Criterion for Triggering a Review Under 10 CFR 50.80 for Non-Owner Operator Service Companies

Criterion for Triggering a Review Under 10 CFR 50.80 for Non-Owner Operator Service Companies

ML010390294
Person / Time
Issue date:	02/15/2001
From:	Matthews D Division of Regulatory Improvement Programs
To:
References
RIS-01-006
Download: ML010390294 (7)

UNITEDSTATESNUCLEARREGULATORYCOMMISSIONOFFICEOFNUCLEARREACTORREGULATIONWASHINGTON,D.C.20555-0001February15,2001NRCREGULATORYISSUESUMMARY2001-06CRITERIAFORTRIGGERINGAREVIEWUNDER10CFR50.80FORNON-OWNEROPERATORSERVICECOMPANIES

ADDRESSEES

Allholdersofoperatinglicensesfornuclearpowerreactors.

INTENT

TheU.S.NuclearRegulatoryCommission(NRC)isissuingthisregulatoryissuesummary(RIS)toinformlicenseesofthecriteriafordeterminingwhentheuseofcontractserviceoperating companiesinconnectionwiththeoperationormaintenanceofnuclearpowerreactorsrequires approvalbytheNRCundertheregulationsgoverningtransfersoflicensesin10CFR50.80.

ThisRISrequiresnoactionorwrittenresponseonthepartofanaddressee.

BACKGROUND

INFORMATIONAccordingto10CFR50.80,"TransferofLicenses,"theCommissionmustgiveitsconsentinwritingbeforealicenseforaproductionorutilizationfacilitymaybetransferred,assigned,orin anymannerdisposedof.Asnuclearutilitiesevolve,theNRCrecognizesthatlicenseesmay pursuevariousalternativeandpotentiallycomplexarrangementswithnon-owneroperators.

WhetheralicenseemustsubmitanapplicationtotheNRCforapprovalunder10CFR50.80

dependsontheextenttowhichoperatingcontrolisbeingtransferredandthedegreeof autonomybeinggrantedtotheoperatingcompany.TheNRCrecognizesthatmoredetailed guidanceonwhentoobtaintheagency'sapprovalofnewarrangementswouldbehelpful.This RISprovidesinformationsothatthenuclearindustryandNRCstaffmayhaveacommon understandingofthecriteriafordecidingwhentheuseofanon-owneroperatingservice companyrequiresNRCreviewandapprovalundertherequirementsof10CFR50.80.Todate,mostcasesofnon-owneroperatingcompanieshaveinvolvedanexistingoperationsorganizationthatsplitofffromtheownerandtransferredtoanewlyformedoperatingcompany inconnectionwithareorganizationormergeragreement.Oneexampleinvolvedthetransfer approvalandlicenseamendmentsforFarleyUnits1and2,HatchUnits1and2,andVogtle Units1and2whenSouthernNuclearOperatingCompanybecamethelicensedoperatorofthe facilitiesreplacingAlabamaPowerCompanyandGeorgiaPowerCompany.Allthree companiesaresubsidiariesoftheSouthernCompany.Anotherexamplewasthetransfer approvalandlicenseamendmentforRiverBendUnit1whenEntergyOperations,Inc.,a subsidiaryofEntergyCorporation,becamethelicensedoperatoratthesametimethatML010390294 RIS2001-06Page2of5EntergyCorporationacquiredGulfStatesUtilities,theformerowner.Ineachcase,therewasnowholesalechangeofoperationspersonnel;theexistingoperationsorganizationwasmerely transferredtoanewoperatingcompany.Ineachcase,thelicenseesrecognizedthata10CFR

50.80licensetransferreviewandapprovalwasnecessary.Inafurtherexample,inearly1997,MaineYankeeAtomicPowerCompany(MaineYankee)signedamanagementservicesagreementwithEntergyNuclear,Inc.(ENI),underwhichENI

wouldprovideoperationsmanagementpersonnel,includingtheMaineYankeePresidentand theVicePresident,Licensing.TheENIpersonnelprovidedwouldbecomeemployeesofMaine YankeewhileremainingemployeesofENIandwouldserveatthepleasureofandtake directionfromtheMaineYankeeBoardofDirectors.MaineYankeestatedinalettertothe NRCthatithadconcludedthatneitherthemanagementservicesagreementwithENInorthe specificmanagementchangeswouldrequirepriorNRCapprovalorachangetotheTechnical Specifications.TheNRCstaffconcurredwiththisassessmentsinceMaineYankeeretained ultimatesafety-relateddecisionmakingauthorityandENIpersonnelwouldbecomeemployees ofMaineYankeeaswellasofENI.InJanuary1998,IllinoisPowerCompany(IP)enteredintoamanagementservicesagreementwithPECOEnergyfornuclearoperationalsupportatClintonPowerStation.Theservice agreementbetweenIPandPECOwassimilarincertainaspectstotheMaineYankee managementservicesagreementwithENI.TheserviceagreementstatedthatPECO

managementpersonnelservingatClintonwouldbetreatedasemployeesofIPforoperational andfunctionalpurposesandwouldexercisetheirauthorityintheIPorganizationonbehalfof, andsubjecttothedirectionof,IPseniormanagement.OnePECOmanagerwasappointedby theIPBoardofDirectorsasChiefNuclearOfficer,servingastheseniornuclearmanagerat ClintonandreportingdirectlytotheChiefExecutiveOfficerandPresidentofIP.PECOalso providedadditionalexperiencednuclearmanagerstoassistIPintheoperationofthestation.

AlllicensedoperatorsatClintonremainedemployeesofIPalone.ThestaffagreedwithIP's conclusionthat,notwithstandingthemanagementservicesagreementbetweenIPandPECO,

IPretainedtheauthorityandresponsibilityforthesafeoperationoftheplantandforregulatory compliance.Inaddition,PECOwouldnotbeperformingactivitiesthatwouldrequirealicense.

Approvalunder10CFR50.80was,therefore,notrequired.Inlate1999,severalmidwesternutilitiesagreedtocombinetheiroperatingstaffstoformtheNuclearManagementCompany(NMC).NMC'scorporatepurposewastoprovideservicesin connectionwiththeoperationandeventualdecommissioningoflicensednuclearfacilitieson behalfofandforthebenefitoftheownerutilities.NMCwasestablishedasaWisconsinlimited liabilitycorporationownedequallybyAlliantEnergyNuclear,LLC,NSPNuclearCorporation, WECNuclearCorporation,andWPSNuclearCorporation.AlliantEnergyNuclear,LLC,isa whollyownedsubsidiaryofAlliantEnergyCorporation,theparentholdingcompanyofIES

UtilitiesInc.,ownerandoperatoroftheDuaneArnoldEnergyCenter.NSPNuclearCorporation isawhollyownedsubsidiaryofNorthernStatesPowerCompany,ownerandoperatorofthe PrairieIslandandMonticelloNuclearPlants.WECNuclearCorporationisawhollyowned subsidiaryofWisconsinEnergyCorporation,theparentholdingcompanyofWisconsinElectric PowerCompany,whichownsandoperatesthePointBeachNuclearPlant.WPSNuclear CorporationisawhollyownedsubsidiaryofWPSResources,Inc.,theparentholdingcompany

1Thatis,finaldecisionmakingauthorityisdefinedasauthoritytomakeadecisionthatcannotbemodified,overruled,orisnotsubjecttoreversalexceptbythedecisionmaker.RIS2001-06Page3of5ofWisconsinPublicServiceCorporation,majorityownerandoperatorofKewauneeNuclearPlant.InNovember2000,ConsumersEnergyCompany,ownerandoperatorofthePalisades Plant,joinedtheotherownersmentionedaboveinrequestingatransferofoperatingauthority undereachrespectivelicensetoNMC.IneachcasetheownersoftheNMCmemberplants retainedownershipoftheirrespectivefacilitiesandretainedthenecessaryauthorityunderthe licensestopossesstheplants.Pursuantto10CFR50.80,theNRCreviewedthetransfersand issuedconforminglicenseamendmentstoincludeNMCasalicenseeandtodesignateNMCas thelicenseeauthorizedtouseandoperateeachofthefacilitiesinaccordancewiththeterms andconditionsofthelicenses.SUMMARYOFISSUENRCreviewandconsentarenecessarywhenalicenseforanuclearpowerplantoranyrightthereunderistobetransferredorassigned.TheNRCstaffhasdevelopedcriteriaforjudging whethertheuseofadifferentornewnuclearpowerplantoperatingentityinvolvesatransfer andrequiresNRCreviewandconsentunder10CFR50.80.Thecriteriaaretobeusedin conjunctionwiththeconceptoffinaldecisionmakingauthority:ifanentity,forexample,a servicecompany,providesadvicebutdoesnothavetheauthoritytomakeafinaldecision(i.e.,

adecisionthatcannotbemodified,overruled,orisnotsubjecttoreversalbythecurrent licensee), 1therehasbeennotransferofauthority.Aseniormanagerreviewingcontractordecisionsafterthefactwouldnotbeconsideredtohavefinaldecisionmakingauthority,unless theseniormanagercouldreverseoroverrulethecontractordecisions.Thefollowingarealistofareasthestaffconsidersindeterminingwhetherthetransferoffinaldecisionmakingauthoritymakes10CFR50.80reviewnecessary:*Decisiontocontinueoperationorshutdownforrepairs*Decisiontostartuptheplant

• Authoritytomakeoperabilitydeterminationsforsafety-relatedequipment

• Authoritytochangestaffinglevelsforlicensedpersonnel

• AuthoritytomakeorganizationalchangesforTSrequiredpositions

• Decisiontodeferrepairsonsafety-relatedequipment

• Authorityforqualityassuranceresponsibilities(selectingaudits,approvingauditreports,acceptingauditresponses)*Budget-settingandspendingauthority

• Authoritytocontrolthetermsofemploymentforlicensedstaff

• Authorityoverthedesigncontrolofthefacility

• Decisiontocontinueoperationsorpermanentlyceaseoperation

• AuthoritytodeterminewhetherNRCapprovalisneededunder10CFR50.59

• Authoritytoperformmaintenanceonsafety-relatedequipment

• Authorityfortheemergencypreparednessprogram

• Authoritytoapprovelicenseeeventreports

• Authoritytodecidewhethertomakea10CFR50.72report

• Authoritytoprovidehealthphysicsprogramservices

2TheNRCnotesthatlinesofauthorityandresponsibilityintheorganizationalchainofcommandarespecifiedintheAdministrativeControlssectionoftheplant'sTechnical Specifications(Section5.0oftheStandardTechnicalSpecifications).TheNRCstaffexpects licenseesconsideringtheuseofservicecompanymanagementtoexaminetheirlicensingbasis toseewhatmanagementstructure,authorities,andresponsibilitieshavebeenapproved.Ifthe linesofauthorityorresponsibilitiesspecifiedintheTechnicalSpecificationsarebeingchanged, thechangesmustbereviewedandapprovedbytheNRCasalicenseamendmentunder

10CFR50.90.TheNRCexpectsthatlicenseeswillensurethatservicecompanypersonnel meeteducationalandexperiencerequirementsspecifiedintheTechnicalSpecificationsforthe positionstheywillbetakingandwillseekapprovalforanylicensechangesthatmaybe necessary,aboveandbeyondanytransferapprovalandconformingamendmentapproval.RIS2001-06Page4of5*Authoritytoprovidechemistryprogramservices*Authoritytoprovidefireprotectionprogramservices

• Authorityforengineeringworkonsafety-relatedsystems

• Authorityformaintainingdesignbasisdocumentation

• AuthorityforcomplianceengineeringorlicensingengineeringservicesThislistmaynotbecomplete.Thestaffhasattemptedtoidentifyrepresentativeexamplesofactivitiesthatmayrequirea10CFR50.80review.Authorityforsitesecurityprogramservices wasnotincludedinthelistbecauseservicecompanieshandlingsitesecuritytypicallydonot provideservicesinotherareas.Ifaservicecompanycurrentlyprovidingsecurityprogram serviceswerebeingconsideredforacontracttoprovideservicesinsomeoftheabove-listed areas,a10CFR50.80reviewmayberequired.

2Itisdifficulttoidentifypreciselythepointatwhichanoperatingserviceentitymustbeaddedto theoperatinglicenseandthuswhenalicensetransferapplicationmustbefiled.Clearly,some areasaremoreimportantthanothers,andeachoperatingagreementtheNRCreviewsislikely tobeunique.Themoreoperationalareasinwhichanoperatingentityhasfinaldecisionmaking authority,themorelikelyitisthatNRCmustreviewandapproveanapplicationforalicense transferandanamendmenttoaddtheoperatingentitytothelicense.BACKFITDISCUSSIONThisregulatoryissuesummaryrequiresnoactionorwrittenresponse.Consequently,thestaffdidnotperformabackfitanalysis.FEDERALREGISTERNOTIFICATIONAnoticeofopportunityforpubliccommentwasnotpublishedintheFederalRegister becausetheinformationcontainedinthisRISwaspreviouslypublishedasDraftRegulatoryGuideDG-

1086inDecember1999.ThepreliminarycriteriawerepreviouslypublishedintheFederalRegisteronOctober9,1998(Vol.63,No.196,54389-54391).PubliccommentsonDG-1086havebeenincorporatedinthisRIS.

RIS2001-06Page5of5PAPERWORKREDUCTIONACTSTATEMENTThisRISdoesnotrequestanyinformationcollection.Pleasecontacttheleadprojectmanagerlistedbelowifthereareanyquestionsaboutthismatter./RA/DavidB.Matthews,Director DivisionofRegulatoryImprovementPrograms OfficeofNuclearReactorRegulationLeadProjectManager:M.Davis,NRR301-415-1016 E-mail:mjd1@nrc.govAttachment:ListofRecentlyIssuedNRCRegulatoryIssueSummaries RIS2001-06Page5of5PAPERWORKREDUCTIONACTSTATEMENTThisRISdoesnotrequestanyinformationcollection.Pleasecontacttheleadprojectmanagerlistedbelowifthereareanyquestionsaboutthismatter./RA/DavidB.Matthews,Director DivisionofRegulatoryImprovementPrograms OfficeofNuclearReactorRegulationLeadProjectManager:M.Davis,NRR301-415-1016 E-mail:mjd1@nrc.govAttachment:ListofRecentlyIssuedNRCRegulatoryIssueSummariesDistribution

INFile PUBLICAccessionNo.:ML010390294TemplateNo.:NRR-052PubliclyAvailableNon-PubliclyAvailableSensitiveNon-SensitiveOFFICERGEB:DRIPTECHEDITORREGBSC:REGBC:RGEB:DRIPNAMEMDavis*PKleene*RWood*BZalcman*CCarpenter*

DATE01/04/0101/10/0101/11/0101/11/0101/12/01OFFICEOGC*REXBC:REXB:DRIPD:DRIPNAMEJShapaker*LMarsh*DMatthewsDATE02/01/0102/08/0102/08/0102/15/01OFFICIALRECORDCOPY

CITF

______________________________________________________________________________________OL=OperatingLicense CP=ConstructionPermitAttachmentRIS2001-06 Page1of1LISTOFRECENTLYISSUEDNRCREGULATORYISSUESUMMARIES

_____________________________________________________________________________________RegulatoryIssueDateofSummaryNo.SubjectIssuanceIssuedto____________________________________________________________________________________2001-05GuidanceonSubmittingDocumentstotheNRCby ElectronicInformationExchange oronCD-ROM01/25/01Allholdersofoperatinglicensesfornuclearreactorsandall vendorswhoarerequiredtomake submittalstotheU.S.Nuclear RegulatoryCommission(NRC)

pursuanttoPart50ofTitle10of theCodeofFederalRegulations

(10CFRPart50),"Domestic LicensingofProductionand UtilizationFacilities."2001-04IssuanceofUpdatedGuidanceontheTransferofOwnershipor ControlofLicensedActivities (NUREG-1556,Volume15)01/24/01Allmaterialandfuelcycle licensees.2001-03Changes,Tests,andExperiments01/23/01AllU.S.NRCPart50andPart72licenseesandPart72Certificate ofComplianceholders.2001-02GuidanceonRisk-InformedDecisionmakinginLicense AmendmentReviews01/18/01Allholdersofoperatinglicensesfornuclearpowerreactors,except thosewhohavepermanently ceasedoperationsandhave certifiedthatfuelhasbeen permanentlyremovedfromthe reactorvessel.2001-01EligibilityofOperatorLicenseApplicants01/18/01Allholdersofoperatinglicensesfornuclearpowerreactors,except thosewhohavepermanently ceasedoperationsandhave certifiedthatfuelhasbeen permanentlyremovedfromthe reactorvessel.