ML19088A271

Transcript: Holtec Pre-decisional Enforcement Conference (Pec) EA-18-151 Public Official Transcript

ML19088A271
Person / Time
Site:	Holtec
Issue date:	01/09/2019
From:	NRC/OCM
To:
Terry T L
References
EA-18-151, NRC-0024
Download: ML19088A271 (110)

Text

Official Transcript of Proceedings NUCLEAR REGULATORY COMMISSIONTitle:Pre-decisional Enforcement Conference (PEC)Between U.S. Nuclear Regulatory Commission

and Holtec InternationalDocket Number:EA-18-151 Location:Rockville, Maryland Date:January 9, 2019Work Order No.:NRC-0024Pages 1-109 NEAL R. GROSS AND CO., INC.

Court Reporters and Transcribers 1323 Rhode Island Avenue, N.W.

Washington, D.C. 20005 (202) 234-4433 1 UNITED STATES OF AMERICA 1 NUCLEAR REGULATORY COMMISSION 2+ + + + +3 PUBLIC MEETING 4+ + + + +5 PRE-DECISIONAL ENFORCEMENT CONFERENCE (PEC) BETWEEN 6 U.S. NUCLEAR REGULATORY COMMISSION AND HOLTEC 7 INTERNATIONAL (EA-18-151) 8+ + + + +9 WEDNESDAY, 10 JANUARY 9, 2019 11+ + + + +12 ROCKVILLE, MARYLAND 13+ + + + +14 The meeting was held in the Commissioners' 15 Hearing Room at the Nuclear Regulatory Commission, One 16 White Flint North, 11555 Rockville Pike, at 1:00 p.m.

17 PRESENT FROM THE NRC:

18 MICHELE BURGESS, NMSS 19 MARLONE DAVIS, NMSS 20 MICHAEL LAYTON, NMSS 21 EARL LOVE, NMSS 22 PATRICIA SILVA, NMSS 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 2 ALSO PRESENT:

1 2 STEFAN ANTON, Holtec 3 CHUCK BULLARD, Holtec 4 KIM MANZIONE, Holtec 5 KRISHNA P. SINGH, Holtec 6 ROBERT TINDAL, Holtec 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 3 T-A-B-L-E O-F C-O-N-T-E-N-T-S 1 Page 2 Introduction/Opening Remarks 3Michael Layton, NRC4 4 Overview of NRC's Enforcement Process 5Michele Burgess, NRC9 6 Preliminary Inspection Findings 7Patricia Silva, NRC17 8 Licensee Presentation 9Dr. Krishna Singh20 10Question and Answer Session73 11Closing Remarks80 12Public Comment81 13Adjourned109 14 15 16 17 18 19 20 21 22 23 24 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 4 P R O C E E D I N G S 1 (1:00 p.m.)

2MR. LAYTON: Thank you, Fran. Good 3afternoon, everyone. We are now on the record. This 4 meeting is being webcast and also transcribed.

5 I am Michael Layton, the Division Director 6 for the Division of Spent Fuel Management at the 7 Nuclear Regulatory Commission's Office of Nuclear 8 Materials Safety and Safeguards.

9 Today we will be conducting a pre-10 decisional enforcement conference to discuss apparent 11 violations of NRC requirements identified during our 12 announced routine inspection of your Holtec 13 International corporate offices in Camden, New Jersey.

14 Two apparent violations were identified 15during this inspection. The details of the inspection 16 and the apparent violations are described in the NRC's 17 inspection report, which is available on the NRC 18 website, and I also believe that there is a link in 19 the meeting announcement.

20 In summary, the apparent violations 21 involve Holtec's failure to establish adequate design 22 control measures associated with the design change for 23 the shim stand-offs in its multi-purpose storage 24 canister, and, also, appropriate performance of design 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 5 change evaluations in accordance with the requirements 1 of 10 CFR 72.48.

2 Specifically, this design change involved 3 the use of stainless steel stand-off pins on the 4bottom of the fuel basket assembly shims. The NRC 5 does not consider that there is an immediate safety 6 concern associated with the loaded canisters using the 7 steel stand-off pins, but some questions remain 8 regarding the potential safety significance if the 9 canisters with failed stand-off pins were loaded above 10 the prescribed thermal limits.

11 This conference is an opportunity for 12 Holtec International to provide any additional 13 information or evaluations associated with the two 14 apparent violations to inform the NRC's final 15 enforcement decision.

16 Before I go further I would like to 17 introduce the remaining NRC representatives at the 18 table and give Holtec an opportunity to introduce its 19 representatives at the table.

20 For the persons on the bridge line, there 21 will be an opportunity at the end of the conference to 22 identify yourselves and provide comments to the NRC 23regarding this meeting. Earl, would you lead us off, 24 please?25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 6MR. LOVE: Yes, Mike. My name is Earl 1Love. I am a Senior Transportation and Storage Safety 2Inspector. I work for the Office of Nuclear Materials 3 Safety and Safeguards, Division of Spent Fuel 4Management, Inspections and Operations Branch. I was 5 the lead inspector on the Holtec inspection.

6MS. SILVA: Good afternoon. I am Patricia 7Silva. I am the Chief of the Inspections and 8 Operations Branch in the Division of Spent Fuel 9 Management.

10MS. BURGESS: Hi, I am Michele Burgess.

11 I am the Enforcement Coordinator for the office.

12MR. DAVIS: Hello. I am Marlone Davis.

13 I was also on the inspection team, Senior Safety, 14 Storage, and Protection Inspector.

15 MR. LAYTON: Thank you. Dr. Singh?

16DR. SINGH: Yes, thank you, Mr. Layton.

17 I think you gave a very concise and factual summary of 18the situation. I will provide additional information 19 for Holtec in these proceedings.

20 I have with me some of the principle 21people who work in our program. I will ask them to 22 introduce themselves to you before we proceed and then 23 I'll take over and go make the presentation, subject 24 to your concurrence from the podium.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 7 MR. LAYTON: Thank you.

1 DR. SINGH: Okay, thank you.

2 MR. LAYTON: Thank you.

3 DR. SINGH: Kim?

4MS. MANZIONE: I am Kim Manzione. I am 5 the Licensing Manager for Holtec International.

6 MR. BULLARD: Hi, I am Chuck Bullard. I 7 am the Director of Engineering Mechanics at Holtec 8 International.

9DR. ANTON: Hi, I am Stefan Anton and I am 10 VP of Engineering and Licensing at Holtec 11 International.

12MR. TINDAL: Good afternoon. I am Rob 13Tindal. I am the Senior Director of Projects at 14 Holtec.15MR. LAYTON: Thank you all and welcome.

16 I do want to emphasize that the NRC has not made a 17 final determination of the apparent violations 18 occurrence as they were described or that an 19 enforcement action will be taken.

20 This conference is an important step in 21our deliberative process for making decisions. The 22 purpose of the conference is to afford Holtec the 23 opportunity to provide NRC with additional information 24 for the NRC to make an informed enforcement decision.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 8 However, no decisions will be reached or 1discussed during this conference.

For Holtec I 2 encourage you to be candid in providing your 3 perspectives on the apparent violations, their 4 significant circumstances surrounding the apparent 5 violations, corrective actions taken and planned, and 6 another information that you believe will be relevant 7 to the NRC's enforcement decision.

8 And as a reminder this is a public 9meeting. Any sensitive and business propriety 10 information should not be presented in this meeting.

11 If such information is needed it may be provided to 12 the NRC in writing following this meeting.

13 Following my opening remarks Michele 14 Burgess, our Office Enforcement Coordinator, will 15 discuss the Agency's enforcement policy and process.

16 Then Patricia Silva, Chief of the Inspection and 17 Operations Branch, will describe the apparent 18 violations in more detail.

19 After that you will be given an 20 opportunity to respond and present any information 21 that you would like the NRC to consider as we make our 22 final decision.

23 I also want to note that the question and 24 answer session that is listed in the agenda includes 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 9 a 30-minute recess before the conference is concluded 1 so that the NRC participants can briefly review what 2 was presented and determine if there are any follow 3 questions that the NRC may have.

4 We'll take that recess and then address 5 any final questions we have and then proceed with 6concluding remarks. Do you have any questions on what 7 I have described thus far?

8 DR. SINGH: No, we do not.

9MR. LAYTON: Thank you. I will now ask 10 Ms. Burgess to discuss the Agency's enforcement policy 11 and process. Michele?

12MS. BURGESS: Hello. I am Michele 13Burgess. I am one of the Enforcement Coordinators for 14 the office, NMSS, and what I would like to do is give 15 a brief overview of the NRC enforcement process and 16 program, so it's the generic process, not the 17 specifics of the case.

18 There are some slides that are being 19broadcast now. So on Slide 2 the NRC enforcement 20process consists of a number of steps. The first step 21 is a record to review our inspection, an investigation 22 step where we are gathering information.

23 Then there is a NRC review of the 24 information on the issues that we have gathered and 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 10then there is an exit meeting with the entity, that 1 could be a licensee, a certificate holder, non-2 licensee individual, whoever it is that is subject to 3 the inspection at that point, where we will discuss 4 whatever our apparent findings are, their apparent 5 findings at that point.

6 And then the next step would be a letter 7 to that entity that would be that formal documentation 8 of what our findings were, so that's the letter that 9 you received from the NRC.

10 The next step in the process is our pre-11 decisional enforcement conference, and you'll hear the 12 word PEC, that's our shorthand for that, and the 13 purpose of this step as Mike said was it's for the 14 entity to provide any additional information that you 15 want us to know before we make our final decision, 16 anything that you think that we don't already have.

17 There is no decision that is being made at 18the PEC. This is just another step in the information 19 gathering stages, and this is the step that we are at 20 right now.

21 So after the PEC the step that follows we 22 are going to review all of the information, that is 23everything that is provided to us in all the steps 24 above, so everything from the investigation, the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 11 inspection, exit meetings, conversations, emails that 1 have come through, as well as any information that you 2 provide to us at this PEC.

3 And all of that will -- We'll take that 4 together and then we'll make the final Agency decision 5 and then we will communicate that decision to you guys 6in writing. So you can see that it is a series of 7 steps, it's a deliberative process to get to the end 8 point.9Slide 3. I want to focus on the step that 10we are at today. Our enforcement manual and policy 11 are on the NRC website, so they are publicly 12 available, and it describes in great detail everything 13 that we have but I wanted to focus this on the stuff 14 that we are trying to accomplish today.

15 The NRC's PEC letter to Holtec provides 16 our basic understanding and our basic perceptions at 17 this point.

18 The PEC, again, is your opportunity, I 19 wanted to stress, for you to let us know anything that 20 you think we need to know, anything you want us to 21 take into consideration, your perspectives, including 22whether the violation occurred, if there is any 23 information regarding the identification, how it was 24 identified, and your involvement in that.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 12 Corrective actions are very important in 1this discussion. As part of final decision-making 2 process we need to hear that from you now so we can 3take all things into consideration, and it could 4 include what are things that you have already done, 5 immediate things to address the immediate issues as 6 well as long-term things to address the underlying how 7 did the particular example we are dealing, how did 8 that occur, what's going to be put in place for long-9 term in corrective actions to be able to ensure that 10 it doesn't happen again to mitigate the possibility of 11 it happening again.

12 Another thing that you might be is are 13 able to provide us information about how you see the 14 characterization of both the significance, the events, 15 the specific events that played out, and you sent in 16 a presentation already that you are already addressing 17 some of these things it looks like.

18 So for Slide 4, after the PEC is when we 19 are actually going to make our decision in our process 20 and that is going to encompass a number of points.

21 Again, it's whether the violation occurred, the 22significance of the violation, and then a final 23 decision on if any an what enforcement action we might 24 take.25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 13Slide Number 5. There is a number of 1 possible outcomes when we take action of we take 2action. It can range all the way from no action at 3 all through a notice of violation, which is a written 4 documentation a violation occurred.

5 It could be that notice of violation along 6with a civil penalty, which is a monetary fine. It 7 could encompass an order which is very specific to 8 this particular situation over and above just a 9 generic statement of a violation.

10 It could include specific actions that we 11require you to take. Where we end up with which of 12 those things on the range depends on the specifics of 13 the particular case, and that's why, again, it's 14 really important for you to tell us everything that 15you think we need to know so we can make our best 16 decision.17Slide Number 6. So as part of the NRC 18 final decision we are going to categorize any 19 violations with respect to their significance and the 20 chart that is up there now is Severity Level 1 through 21 4.22 Severity Level 1 are our most significant 23 concerns through Severity Level 4 which is less 24significant. It still is a concern, however, it's 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 14 just not as significant.

1 If it doesn't meet these then we classify 2those as minor. You guys have used that term in your 3presentation. I think 1 through 3 are considered 4 escalated.

5 So on Slide 7 there is four factors that 6we consider when we are assigning severity level. We 7 look at the actual safety consequences, so the 8 particular example we have at hand.

9 We look at the potential safety 10 consequences both of the example at hand as well as 11 the underlying how did that happen, not even the 12 particular example at hand but what could have 13 happened if there is an underlying failure of a 14 process.15We look at the impact on the regulatory 16 process and we take into consideration any 17 willfulness.

18Slide 8. So escalated violations have the 19 potential for a civil penalty and we use a methodical 20 way to determine whether or not, as a standard 21 process, whether or not we should have a civil penalty 22 and what that civil penalty might be, and it's based 23 on a number of actions.

24 One is whether or not it was wilful, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 15 whether or not there is any recent history on any 1 other escalated violations, whether it's the entity or 2 the NRC that identified the violation, and whether the 3 entity had timely and complete corrective actions.

4 And the purpose for that graded approach 5 is to give credit, give relief, give acknowledgment to 6 entities that are identifying their own problems, for 7 example through QA programs, as well as licensees that 8are entities that once they identify the problem, 9regardless of who identified it, they promptly and 10 timely and completely correct the situation and ensure 11it's not going to happen. So the graded approach 12 allows for consideration of those factors.

13Slide Number 9. The actual amount of the 14 CP is dependent on the type of entity or licensee and 15 the severity of the violation.

16 And, in short, entities that handle large 17 amounts of, or larger amounts of radioactive material, 18 or they could have a greater impact on the public or 19 the environment tend to have the larger amounts where 20those entities having a smaller more limited scope 21 would have the smaller CP amounts as base values.

22 And then, also, the severity level, the 23 higher the severity level, are going to have the 24 higher civil penalties associated with it as a base 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 16 value as opposed to the lower severity levels.

1 For Slide Number 10, regardless of the 2 outcome of that standard process that I just described 3 the NRC can exercise discretion to either escalate or 4 mitigate civil penalty based on the particular 5 circumstances for that particular case, for example 6 where it is particular egregious what happened or 7 where there might be some significant exposures to 8 members of the public or an environment are some 9 examples.10Slide Number 11. If the NRC takes 11 enforcement action it's going to be publically 12available. It will be in ADAMS, it will be on the 13 NRC's public website, and then in the event that there 14 is a civil penalty or we issue an order normally there 15 is also a press release associated with that.

16Slide Number 12. There is also the 17 ability to challenge our finding. When we issue our 18 final action there are processes in place where if you 19 disagree with it that you can challenge the finding.

20 Depending upon what exactly the final 21 action turns out to be, it will tell you what the 22processes are available for that. There will be 23instructions in the final action that we give you. It 24 will have that instructions on there for how you can 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 17 follow through whatever options are open to you.

1Slide 13. So just to summarize the steps 2 that are going to follow from this step forward, we 3 are going to review all of the information that we 4 have and then we are going to make our final decision.

5 That final decision is going to be 6communicated to you guys. We strive to make our final 7 decision in a timely manner, that is normally 30 to 60 8 days.9 However, of course, the length of time for 10 any particular case could also be dependent on, you 11 know, the volume of material that we are looking at, 12 how much you are going to give us today, but our 13 normal timeframe is about 30 to 60 days, and that's 14 going to be in writing to you guys and it would be 15 publicly available.

16Slide Number 14. So this concludes the 17 presentation of the process, the details of the 18 process with the process that we are going to work 19 through, and if there weren't any particular questions 20 on the process then I would turn it over to Patti for 21--22 DR. SINGH: Yes, we have no questions.

23MS. SILVA: Okay. Thank you, Michele.

24 Again, I am Patricia Silva, the Chief of the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 18Inspections and Operations Branch. The apparent 1 violations that are subject to this conference were 2 described in the NRC's Choice Letter EA-18-151 issued 3 on November 29, 2018.

4 In brief, the apparent violations involve 5 1) failure to establish adequate design control 6 measures as part of the selection and review of 7 suitability of application of materials, parts, 8 equipment, and processes that are essential to the 9 functions of the structure, system, and components 10 which are important to safety in accordance with 10 11 CFR 72.146(a) Design Control, and, 2) failure to 12 perform a 10 CFR 72.48 evaluation, which is the change 13 process.14 On or after August 2016 Holtec failed to 15 establish adequate design control measures as part of 16 selecting foreign stainless steel stand-off pins as an 17alternative for supporting the fuel basket shims in 18 its multi-purpose canister.

19 The stand-off pins are essential to the 20 function of the fuel basket to maintain support and 21 ensure the shims stay elevated to allow helium gas to 22 circulate and cool the fuel assemblies within the 23 multi-purpose canister.

24 Regarding the 10 CFR 72.48 change process 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 19 Holtec failed to perform a written evaluation to 1 demonstrate that a design change for multi-purpose 2 canister stainless steel stand-off pins did not 3 require an amendment to the certificate of compliance.

4 Holtec completed the 72.48 screening and 5 incorrectly determined that a written evaluation was 6not needed. During a November 26, 2018, telephonic 7 exit meeting you and Mr. Earl Love of the NRC 8 discussed these apparent violations, the potential 9 significance of the issues, and the need for lasting 10 and effective corrective actions.

11 This conference will provide an 12 opportunity for you to provide your perspective on 13 these matters and any other information you believe 14 the NRC should take into consideration in making an 15 enforcement decision.

16 In presenting any corrective actions you 17 should be aware that promptness and comprehensiveness 18 of your actions will be considered in assessing the 19 potential civil penalty for the apparent violations.

20 Unless there are any questions at this 21 time we now want to give you the opportunity to 22 provide any information that you would like us to 23 consider prior to the final decision in this matter.

24DR. SINGH: Thank you. We have no 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 20questions on your statements. If it is permissible 1 should I begin the presentation?

2 MR. LAYTON: Yes, please.

3DR. SINGH: Okay. Thank you. Well thank 4 you all for giving us the opportunity to provide you 5 what I will characterize as the additional 6 information, and there is a substantial body of 7 additional information as you must have surmised from 8 the material we sent you yesterday.

9 We believe that the information that we 10 provided you, and I will articulate further in this 11 presentation, should help you make the right decision.

12 Just to deal with some housekeeping 13 material, yesterday we sent you all substantiating 14 documents that you might need to consult in making 15 your decision related to the shim stand-off episode.

16 Okay, we will use the term shim stand-off, 17SSO, throughout this presentation. So I will later 18 explain to you what they look like and what their real 19 significance is, but we want to make sure that 20 information is provided to you as promptly as possible 21 if you have any follow-up questions.

22 This document, the presentation, which is 23 about 37 pages, will be shared with you and you may 24treat this as an authoritative document on our 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 21 position.1There may be some minor edits based on 2your questions and if we see that we are not 3 absolutely clear in our position we will edit it 4 appropriately and provide you the final draft for the 5 site.6 But the intent is to reach out to you as 7 comprehensively as possible to provide you all the 8necessary information. If we do that well then we 9 know you will come to the right decision.

10 Getting to Slide Number 3, the purpose of 11 this presentation, and they tell you up front what we 12 plan to present to you, but first with a whole lot of 13 data.14 The first point that will provide you 15 additional information to show that the entire 16 population of SSOs plays no role, and the emphasis is 17 on no, no role in the saf ety function of any of the 18 MPCs that have been loaded across the country, and I 19don't mean a minor role, no role, okay. We will prove 20 it to you later.

21 Stated differently, the loaded MPCs will 22 fulfill their intended function without exceeding any 23 regulatory limits under all applicable conditions of 24 storage and transport even if they had no SSOs.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 22 Because the SSOs play no role in the 1 safety performance of the loaded MPCs they can be 2 correctly characterized as not-important-to-safety, 3 meaning NITS, which is an item in our vernacular, so 4 I will start using the term NITS going forward.

5 Now I just want to make sure that we don't 6get lost in terminology. We use the term basket shim 7 assembly, which consists of the basket shims 8 themselves and the short SSOs that you are so familiar 9 with.10 Together they constitute the basket shim 11 assembly. Individually one is the basket, the upper 12 one, and the bottom one is the SSO, and we 13 differentiate them because they are two constituents 14 that are put together to make the assembly, okay.

15 Now I should also in the purpose of this 16 presentation is to inform you that learning from this 17 episode Holtec has performed a stem-to-stern 18 reappraisal of its processes and operating procedures 19 and made numerous improvements to prevent damage to 20 equipment during handling in manufacturing and 21 transport to the site and other similar activities 22 which are typically outside the scope of normal safety 23analyses. This has been taken to heart and we will 24 show you what we have done in some detail.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 23Going to the next slide. An additional 1 purpose of this presentation is to provide you 2 additional facts and insights to clarify and further 3 inform NRC's findings summarized in the inspection 4 report.5 I would point out to you, to state 6speaking in clearer jargon, I will point out to you 7 that there are some places in the inspection report 8 where one can misconstrue the information.

9 We will share that with you to the major 10 ones here and minor ones perhaps through email 11 correspondence that will help us make this document, 12 your inspection report, truly definitive.

13 No document is ever without NITS and minor 14errors. We all know. Those of us who prepare 15documents know it. We are all somewhat fallible.

16 Well, we will provide you the information so the final 17 document, your document, is equally free of any NITS 18 and discrepancies.

19 Now we will provide information to you and 20 safety analyses of the loaded MPC under the 21 hypothetical assumption, I emphasize hypothetical 22 assumption, that if no SSOs were installed, I mean 23 that's what determines whether they are of any value, 24 they provide and they serve any function.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 24 For the loaded MPCs we have determined, 1 and we will show you, that the thermal analyses 2 demonstrate that all regulatory limits are met without 3 any SSO present in any of the canisters that had been 4 loaded.5 That is how, totally superfluous to the 6function of the canister there. We will also show you 7 that the structural analyses demonstrate that 8 integrity of the stored fuel and the fuel basket is 9 fully preserved under bounding seismic loads for the 10 sites where they have been loaded, okay.

11 In other words, this, if you were to quote 12 Shakespeare, is much ado about nothing, at least that 13 is our perspective. The violations occurred because 14 of inadequate consideration of manufacturing 15 challenges in the design and human performance error 16 during manufacturing.

17 We concede that that has been a weakness 18 in our program and to that extent we have taken it to 19 heart to fix these weaknesses, but I should also 20 hasten to add that if you look at the documents that 21 guide us your NRC-approved NEI guidance document in 22 72.48, I did a search, word search, on the word 23"manufacturing," not a single mention of the word.

24 Now this is not to defend, please 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 25 understand I am not defending what has happened here, 1 but the guidance documents do set the tone and our 2 program, of course, is heavily, heavily, influenced by 3 the guidance document, was not truly attuned to 4 looking at the consequences of manufacturing 5 operations on the design.

6 Now I will speak to it more later, but as 7you said be candid, I am being absolutely candid. You 8 won't find any discussion of manufacturing in the 9 guidance documents and that is where the problem has 10 occurred here.

11 Thank goodness the problem, manufacturing 12 problem, occurred with an item that is not safety 13 significant for the canisters we have loaded and, 14 therefore, there is no consequence, but we like to 15 think deeper, what caused it, why is it that we did 16 not catch it in our design stage.

17 In looking deeper we found that there is, 18 indeed, in our industry there is the nexus between 19manufacturing and design has been weak. It's actually 20 true in every industry, but certainly that's not an 21 excuse.22 We need to fix it and we have made 23 numerous changes in our program to ensure that this 24 sort of thing will never happen again.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 26Now that will be -- I will further, 1further elaborate on it later, and as I said, this, 2 after I get your questions and items if I have to 3 change any verbiage we will change it so this becomes 4 a definitive document for you to reference, by "this" 5 I mean this presentation becomes a definitive document 6 for you to consider as additional information.

7 Now the violations they both pertain to 8basket shim stand-offs. The first one it says "Holtec 9 failed to establish adequate design control measures 10 as part of the selection and review of suitability of 11 application of alternate four inch shim standoff 12 pins." 13 Well where we really failed is in looking 14 at potential fabrication errors and that could happen 15and it did happen. Design control is, you can 16 consider it a part of design control, but the real 17 error lay in the fact that we did not consider the 18 consequences, the working that occurs to this 19 structure during manufacturing and how it might 20 influence the outcome of manufacturing.

21 That really is the problem here as we see 22it. And, you know, you are familiar in the industry, 23 I mean there have been, you know, today the instances 24 of stress corrosion and cracking on reactor heads, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 27 well it owes its origin to inadequate consideration of 1 manufacturing in the design.

2 There are numerous examples, very, very 3 significant examples in the industry, but that is not, 4again, to ask for, to excuse ourselves. This is a 5 fact of life.

6 Today and at this point in time the 7 industry has been inadequately sensitive to the inter-8relationship between manufacturing and design. At 9Holtec we have fixed it. We have fixed it in spades, 10 and if you come back to visit us you will see what we 11 have done.

12 The other violation unfortunately is you 13 said "Holtec failed to perform a written evaluation to 14 demonstrate that a design change for multi-purpose 15 canister stainless steel standoff pin did not require 16 a CoC Amendment." 17 I will humbly submit that this statement 18is not correct. We did perform a full evaluation when 19 we made the design change to the shim stand-off from 20 monolithic shim.

21 It was done. What we did not do is when 22 we received field notice of observed isolated failures 23 of the shim stand-off when we did the safety 24 evaluation for that, 72.48, we did not take it to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 28 final evaluation, okay.

1 So as stated, I think we understand what 2 you intended to say and we have taken it that way, but 3 I think the language in the violation should be, just 4 for the sake of posterity should be clarified we did 5 do a full evaluation of the original stand-off.

6 That does not take away from the fact that 7 we did not do, and it is a lesson for us to be 8 learned, we did not do the evaluation when the field 9 change information came to us, okay.

10So, please, don't take it again as an 11excuse. This is not a defense, this is only to 12correct the record. The record should speak 13 correctly.

14 Now basket shims, I am going to give you 15 a brief, a very brief low down on the shims, what they 16 are, so when we have further discussion you are as 17 well informed as I am in talking about them.

18 The shims, they are shown in golden color 19around the basket, these are made out of a high 20temperature aluminum alloy. They are designed with 21 holes inside them, so they are hollow shims.

22Now why are they hollow? They are hollow 23because they allow the helium to circulate. They 24 become the downcomer for helium, flow comes up the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 29 basket cells, the storage cells, and then goes around 1 and comes down the downcomer and enters the bottom 2 plenum.3 So there is a small contribution to heat 4 transfer from this helium circulation. Okay, that's 5why they are there. There are a lot of them as you 6can see pictorial, and later I will give you the 7 count, a lot of shims that surround the basket, okay, 8 and each shim has a number of shim stand-offs, okay, 9 so these things are important to remember as we go 10 forward.11 Now let's talk about the shim stand-offs.

12Next slide, which is Number 7. The shim stand-off are 13the part of the basket shim assembly. They are as Mr.

14 Layton correctly described is made of stainless steel 15 and threaded bars.

16 There are typically three in number per 17shim, and realize there are many shims. So, for 18 example, in our MPC-37, which is being used at SONGS, 19 there are 88 shim stand-offs and there are 32 shims, 20so you realize there is a large population of them, 21 it's not just a single shim or two or three shims.

22 So when we say one shim was found failed, 23 one shim stand-off was found to have failed, meaning 24 one out of 88, not a widespread failure, okay. And, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 30 by the way, when we designed these we designed that 1 out of three one has failed, in other words it's not 2 available.

3 That was the design basis. And we never 4 exceeded that in the observed data. So this is just 5 to give you a glimpse of what I am going to tell you 6 later, okay.

7 There is the failure that has occurred in 8 manufacturing, it occurred during manufacturing, is a 9 very, very small fraction of the number of shim 10 standoffs we have installed.

11 Now at the bottom you will see the new 12 design on the right which shows the little shim stand-13 offs, they are about four inches long in a shim column 14 which is about 160 to 180 inches long, so they are 15 very short when you look at them actually in what they 16 look like.

17 They are minuscule in their presence and 18 as it turns out minuscule in significance as well.

19 Now why do we have these shim stand-offs you must 20 wonder?21 Well we install them for two things, one, 22the fabricability is easier. It is easier to 23 fabricate with the shim stand-offs than the old design 24 which you see on the left with the monolithic shims.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 31 The second goal, and really the real 1 driver, was to open up the bottom flow area for helium 2to flow more freely. Now you can call this technical 3 greed. We wanted to get a little more kilowatts out 4 of the same canister, not a lot, but a little more.

5 So these two factors motivated us to 6introduce the shim stand-off. The shim stand-off 7 themselves as I will tell you, as I have said to you 8 already, are not important to safety.

9 The basket shims, which is, I will speak 10 to them later, their ID is Class C, okay, the lowest 11grade of ITS. Let's go to Slide 8. As I said we have 12 the SSOs are multiple steel bars tapped into the 13 bottom face of each shim column to elevate them above 14 the MPC baseplate to further promote natural 15 convection of helium inside the MPC.

16 Now you know that there is no free lunch 17in nature. When you do that, when you increase helium 18 convection by opening the area then you reduce 19 conduction because you have to make a hole in the 20 shim.21 So the hole in the shim that I showed you 22 earlier, the hollow shims, they improve the thermal 23 circulation, the natural circulation of helium, but 24 they reduce the conduction because you don't have the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 32 solid shims there.

1 So in that effect it's a slight increase, 2 still a positive in the ledger of heat transfer. It 3 does give you more heat transfer, but not a whole lot, 4and that's why today when we are defending the shim 5stand-off we make the perverse assumption they have 6 all disappeared and still the canister performs, it 7 still delivers the heat duty that we have licensed it 8 to do.9 So both MPC-68M for HI-STORM 100 that have 10 been deployed at a couple sites and MP-38 in UMAX, HI-11 STORM UMAX, which was being deployed at Southern 12 California SONGS.

13 But that's the reason, I am giving you the 14 physical reason why the statements I am making to you 15with respect to the non-significance of the shim 16 stand-offs is founded in solid science.

17 Okay, now let's look at the bottom column 18table here. MPC-37, which the only affected plant is 19SONGS, has 32 basket shims, as I said earlier, and 20it's got 88 shim stand-offs. There is a large 21 population of them at the bottom, it's not just one, 22and BWR basket has 28 shim columns and 76 SSOs. In 23 both cases a large number of stand-offs and a large 24 number of shims.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 33 Now let's go through the history of what 1 happened and the timeline to show you how proactive we 2 have been and how unsparing we have been of self-3 criticism and acting on the weaknesses we have found.

4 First, the SSOs were introduced via an ECO 5 and 72.48 process which involved performing qualifying 6safety analyses. They were all performed and the 7 analyses showed acceptable safety margins.

8 The 72.48 change through that process we 9 did not see and the reason why that could not be done 10with a full screening and full evaluation. It's an 11 ITSC item and at every single predicate of safety, 12 criticality, shielding, thermal hydraulics, they were 13all met. They were all met within the NRC guidelines.

14 So that's why we did 72.48 and we accepted 15 them in the system, and, frankly, although they have 16been criticized badly, and if you see in the social 17 media, truly maligned, these SSOs are perfectly fine 18 for their intended function.

19 They will mate any canister made now or in 20 the future, although we have stopped making them 21 because of the industrial propaganda, but the shim 22 stand-offs are perfectly fine for their intended 23 function.24 What happened is a manufacturing error, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 34and you can do that to anything and end up with a 1problem with the product. So the 72.48 that was done 2 I respectfully submit was complete, adequate, and it 3 stands on its own.

4 Now during manufacturing we involve, we 5perform repeated rolling of the MPC shell. During 6 this rolling process is primarily when the problems 7 occurred.8 The shim stand-off, they are like little 9 cantilevers, and if there is a differential motion 10 between the rolling action of the baseplate, if it's 11 at an angle from horizontal, which it is for peening 12 purposes, then the cantilever tended to impose large 13 loads and bent them.

14That is what happened. Now I will tell 15 you I was a witness to a manufacturing evolution.

16 Almost 40 years ago we were making a component cooling 17 water heat exchanger, it's a large heat exchanger, you 18 must see that.

19 It was for Watts Bar Nuclear Plant and it 20 had like 4000 tubes, a large 60-foot long unit.

21 Tested it, inspected it, it was fine. Then the last 22 step was to install saddles (phonetic) on the shell.

23 For that it had to be rolled and the rolling was done 24 a little too roughly, wasn't done slowly, and that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 35 turned every single tube inside into a snake.

1 Nobody, including me, thought of it, but 2it happened. The whole unit had to be junked.

3 Manufacturing can add in serious problems and if one 4 does not consider such things, potential problems 5 during manufacturing, you have loads that are far in 6 excess, in some cases loads that you see in actual 7 operation.

8 You know, you take an MPC shell, we take 9 a flat plate and we roll it, the amount of strain that 10we put on that plate to roll it is enormous. You 11don't see that in actual operation. So manufacturing 12 is not to be discounted.

13 The consequence of manufacturing to the 14 well-being of the equipment we under appreciate it.

15 We have under appreciated no more. We are now going 16 to look at it with a fine-tooth comb.

17 If you see our procedures on the checks we 18 do, manufacturing now looms large as consequence of 19different evolutions. I would respectfully submit 20 that that is not so in the industry at this time, it's 21 not happening.

22 So basically the statement that I wanted 23 to make is that the SSOs, they are robust under design 24basis loadings for the MPCs. These loadings are 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 36 diametrical.

1 The load during manufacturing were 2 circumferential and these things, these SSOs, are not 3 strong against those loads and that's why they bent, 4 okay.5 That's the physical fact, that we did not 6foresee it. We did not foresee that problem. I 7 readily admit to you that we showed our limitation, 8 our technical limitation of whether it is unique to us 9 or to the rest of the world, but I leave for you to 10 decide.11 But there has been -- This was definitely, 12definitely an eye-opener for us. We have learned big 13 time how to treat manufacturing evolutions more 14 respectfully.

15Now our next item, Item 10, the basket 16shim assembly. Page 10, I mean. The basket shim 17assembly serves to position the fuel basket. What 18 does it do? I am explaining to you here.

19 It serves to position the fuel basket 20inside the MPC. Its safety function is relatively 21minor. What does it do? It plays no role in 22 reactivity control whatsoever.

23 Its contribution to radiation blockage is 24negligible. It's assistance in heat rejection as I 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 37 said earlier is rather minor because the conduction 1 that we will have had from it if it were a solid shim 2 is significantly reduced because we make them hollow, 3 but it's still valuable.

4 It is not zero and, therefore, that's why 5it's ITS-C. It does make some contribution. It also 6serves to provide a conformal contact between the 7shell and the basket profile because the basket 8 profile is zigzagged and the shell is round.

9 It provides the -- It acts truly as a shim 10and joins the two. So that's the function of the 11 basket shim assembly.

12 Now why are the SSOs, which are part of 13 the basket shim assembly, their merit being classified 14as NITS? Because they don't provide, as you see in 15 the middle of this slide, Page 11, they don't provide 16 any meaningful radiation shielding or criticality 17control. Actually it provides zero shielding and 18 criticality control.

19 And the results of FSAR compliant, meaning 20 using the model approved in the SAR, using that model 21 we have found, we have done thermal analysis and 22 seismic analysis on loaded MPCs and we provide, the 23 analyses provided definitive evidence that the SSOs 24 lack a safety function and that's why the SSOs are not 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 38 important to safety.

1 Every loaded MPC meets the entire set of 2 regulatory safety criteria if all of its SSOs were 3 absent altogether. I can't make a stronger case for 4 a superfluous item.

5Let's go to the next slide, 12. This 6 slide speaks to your question, Michele, who 7identified. We identified this violation. It was 8 identified by Holtec's site services team at SONGS and 9 it was not an accidental finding either.

10 We have a program we call Site Acceptance 11 Testing and Inspection Examination where we look for 12 foreign materials before we load them and we found 13 this broken one, broken shim during that inspection.

14 So this was part of our quality assurance 15program. It was not just a fortuitous act of God, we 16 actually found it, and after finding it, yes, just to 17 get you back, end of 2017 the SSO design has been 18 introduced to the Engineering Change Order.

19 In February 2018 is when our site 20 inspection team at SONGS found this broken SSO, one 21broken SSO. The next thing we did speaks very much to 22 your criteria for enforcement action.

23 We asked all clients to perform focused 24 inspection of every SSO-bearing MPC to ensure that all 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 39 SSOs are intact prior to loading the canister. That 1 was done immediately.

2 We made the headquarters, NRC 3 headquarters, aware of the issue and provided regular 4updates and copies of all safety evaluations and 5answered questions from NRC staff. So this wasn't --

6 This was totally transparent with you from day one.

7Next slide, 13. Of course, the first 8 thing you would do in a proper QA organization is to 9 do a root cause evaluation, and we did the root cause 10 evaluation immediately which included factory and site 11 inspections of manufactured MPCs that were in the shop 12 at the site.

13 We determined the statistical probability 14of SSO failure based on the data we had. We collected 15 data on a large number of SSOs during manufacturing 16 evolutions, and we performed safety analyses to assess 17 the consequence of assuming a bounding assumption of 18 failed SSOs and a comprehensive reappraisal of the 19 procedures and practices.

20 All this was done working day and night 21 right after this issue was identified and we 22 identified numerous areas of improvement in our 23 program that we included in our root cause evaluation 24 report and we presented it to the NRC's inspection 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 40 team in May of 2018.

1 We didn't stop there. We did additional 2 corrective actions guided by NRC Information Notice-3 96-28. These corrective actions were defined purely 4 in pursuit of operational excellence subsequent to 5 NRC's visit and they have been, I inform you 6 unequivocally, they have all been implemented already.

7 This is not in a long-term program, the 8implement. We have already implemented all the 9 corrective action, immediate corrective actions and 10 the ones that followed upon more thoughtful evaluation 11 and analysis.

12 And just to give you a quick information 13 on the statistics of the SSO-equipped MPCS, first of 14 all the affected models are MPC-37, which are 37 PWR 15 assemblies, and then MPC-68M, which are 68 BWR fuel 16 assemblies.

17 At the time of the self-identified issue 18 with the broken SSO 121 MPSs were equipped with SSOs.

19 The table below you will see MPC-68M BWR have 22 20 loaded, nine at Holtec's fabrication facility, and 28 21 delivered but not loaded. MPC-27 has four loaded at 22 SONGS and 26 at Holtec's fabrication facility and 32 23 delivered but not loaded.

24 We, the only plants where we continued 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 41 loading are the two BWR plants, correct me if I am 1 wrong, two BWR plants, and these plants we determined 2that you don't need any of the SSOs. You can toss 3 them out and they still meet all the requirements.

4They comply with the CoC, not with some 5 reduced thermal limit, which, by the way, your 6 inspection says, that is factually not right, okay.

7 Our MPCs could do fine indeed without these SSOs.

8 You can screw them off and they will be 9fine. They perform -- They meet all of the 10requirements of the certificate. Okay. So the SSO 11 inspection census is we checked and documented over 50 12 percent of all SSOs.

13There were about 8400 of them. We checked 144200 and we documented it. With others we checked and 15 replaced as necessary, but based on the documented, if 16 you just consider the ones that we inspected and 17 documented, 0.12 percent were found broken, 0.12 18 percent.19 And 1.22 percent were found to have a 20 slight bend and they were found both in peened MPCs, 21 which were only for SONGS, and in un-peened ones, 22 which were for everyone else.

23 So basically the conclusion based on as 24 found conditions is that none of the basket shims have 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 42 suffered failure of all of its SSOs, far from it.

1 It's in the order of 1.2 percent and that's not 2 failure, the bending is not failure.

3We'll talk about it later. The real fail 4 was 0.12 percent, which I think we will all agree is 5 statistically insignificant where you have 88 of them 6 in the canister and you are assuming that one out of 7 three is not available in the design basis.

8 So clearly the failure was well, well 9within what we had engineered it for. We performed 10 evaluation of a broken SSO in the MPC and we found 11 that it had no safety impact in storage.

12Going to Slide 16. We performed an 13 immediate operability review and concluded that all 26 14 loaded systems were safe and could continue to render 15 their intended function without exceeding any 16 regulatory limits, I emphasize any regulatory limits, 17 under all applicable conditions of storage and 18 transport.

19There isn't an MPC loaded, a Holtec MPC 20 loaded, anywhere that violates the CoC you have issued 21 to us. None. Zero.

22 The thermal safety evaluation for the 23 immediate operability review were based on an MPC's 24 as-loaded heat loads under the overarching assumption 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 43 that every SSO has failed and become inoperative.

1 The seismic analyses used a bounding 2 earthquake that bounded the DBE of the plants which 3 were executing loadings. It showed that if only one 4 SSO remained functional out of three in each shim that 5 will not get damaged, the SSO will not be damaged by 6 the earthquake.

7 Now I am careful here, the language in 8 this transparency is rather ambiguous, I should be 9clearer. The SSOs do nothing for earthquakes, 10 nothing. They are not needed for earthquakes.

11 The real loading is transferred form the 12 MPC basket through the shim, basket shim, and the 13 wall, but there is no, these little shim stand-offs 14 are, they are just spectators to the earthquake.

15 The don't really contribute anything and 16if they failed there would be no consequence. As a 17 matter of fact if there were no SSOs the MPC 18 structural extent would not be changed one bit.

19 So they truly are, other than providing a 20 little oomph of thermal heat transfer they do nothing 21of value. They do nothing. And that is critical for 22 all us to remember.

23 In all seismic analyses that we have done, 24we have done so many of them, I mean you have the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 44 reports, all of that has been done to see does 1 anything happened to the fuel, does anything happen to 2 the basket walls.

3 Of course nothing happens, you can see 4physically see in the return that it does not. So all 5 we have done is to evaluate if we assume a certain 6 number of SSOs have failed will the remaining ones 7 fail also, and the answer is they don't fail.

8 For normal earthquakes you can only assume 9 one available even for California's Coastal Commission 10 Earthquake, we call it most severe earthquake, by the 11 way it is the strongest earthquake.

12It is stronger than this, too. It is 13 strongest earthquake recorded by mankind anywhere.

14 And even under that earthquake if you had the design 15 basis two shims, two SSOs, it does not fail. That's 16 the design basis, it does not fail.

17 So you can assume one, one has been lost, 18and every single shim, all 32 shims and there is 19 still, shim stand-offs will not fail, and I must 20 emphasize they have no consequence to the seismic 21 performance for the vital elements in the MPC, which 22 is the fuel and the basket cell walls, because they do 23 participate in criticality in other activities.

24 So that is -- and I'm hoping, I hope, that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 45 the additional information I'm providing you is useful 1in reaching your conclusions. Because there is a lot 2 of information here.

3 And some of it you will need to verify 4 with your own experts, which we will greatly welcome.

5But I think at the end of the day you will conclude 6 that you won't be in the sandbox, I am.

7If we really have that problem, then I 8 will not have made this presentation, I'd have one of 9 the other guys do it.

10 But I see, I see that there is no problem 11 at all. None for our customers, those who are using 12 it or the system.

13 But we have replaced the design with what 14I call a monolithic shim. So there is no more 15standoffs. So, they will not be around, they are not 16 going to be for anyone to kick them around.

17 But while we say we don't have them, there 18 is no problem with them meeting the design basis 19 loads, folks. No problem.

20 Because I have personally evaluated, 21 checked people's, people's reports and calculations 22 before I stand here and tell you this. Okay.

23 Now we're at SONGS, going to slide, Page 24 17. SONGS MPCs. All four loaded MPCs at SONGS were 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 46 reconfirmed to meet all applicable regulatory criteria 1 for onsite storage and transport, under the assumption 2that only one SSO has been damaged in every basket 3 shim.4 Now, that by the way is, a statement could 5 be made more strongly, I'm sorry, a statement can be 6 made -- excuse me.

7 The statement can be made that the MPCs, 8 SSOs, survive the most severe earthquake postulated.

9 But if they failed, they don't have any consequence 10 through safety function of the MPC.

11 So, if the actual statement could be much 12stronger than what's here. And in the revised draft, 13 we will state that because this kind of gives the 14 sense that perhaps they are necessary. They're not.

15 They're not necessary.

16 And, basically, the evaluations for the 17SONGS MPC is summarized here on Page 17. It basically 18states what I've said to you many times already in 19 this presentation.

20Let's go on to the next one. There was a 21 supplemental seismic analysis that NRC inspection team 22 identified when they were there.

23 They said, hey, check it, if you assume 24 that there are only two shim standards and they're 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 47 both bent and evaluate whether the shims will survive.

1 Shim standards will survive.

2So we performed that calculation. And, 3again, found that they do survive. They remain 4 intact.5 Again, if they didn't, wouldn't matter 6that the MPC failed. It's just that they are not 7 important if safety item failed. Okay.

8 So we have, by May of 2018, we have 9 performed a large number of MPC seismic analyses to 10 basically evaluate the performance of the SSOs.

11 And they're all documented and available 12to you. They were requested, both by our Holtec user 13 group members, which our user group, as you know, it 14 has about 60 members and they're not shy to ask 15 questions.

16So, questions they asked. They were also 17answered. And they are all in the documentation 18 packages here.

19Now, let's go to Page 19. Now we'll talk 20 about thermal safety performance.

21 Again, the thermal analyses were performed 22 under the non-credible conservative assumption that 23 every SSO had vanished non-mechanistically. Somehow 24 disappeared causing every basket shim to drop down and 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 48 block the down-comer to bottom plenum flow.

1 Meaning, that the helium circulation has 2been completely arrested. With that assumption and 3 using the licensing basis model that's approved by the 4 NRC and our FSAR, we find that the design basis heat 5load of 36.9 kilowatt is met unconditionally. We meet 6 the temperature limits.

7 And, the other parameters, the less 8 important parameters, like MPC internal pressure 9 helium and all, they are meet also.

10 In other words, assuming that every MPC 11 SSO, and every MPC has completely disappeared, does 12 not affect thermal conclusion at all. There's still 13 plenty of margin.

14 Now, let's go to MPC-37 in UMAX. That's 15 on Page 20.

16 We performed calculation based on a heat 17load. Again, assuming that every SSO has vanished.

18 So all these shims are sitting on top of the MPC 19 baseplate.

20 We found that at a heat load of 37.6 21kilowatt we meet all the regulator limits. All the 22limits. And by the way, they are permissible heat 23load in the HI-STORM UMAX CoC at 37.06. So we 24 actually use a higher heat load than what is 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 49 authorized under the current CoC.

1 This was done, I think, our thermal 2analyst became a little over exuberant. Took, used a 3 larger number than he had to.

4But the answer remains the same. That we 5meet the temperature limit and the pressure. And all 6 other height of parameters with good margins.

7Therefore, we can go to the summary on 8Page 21. Even though the inspections did not indicate 9even one basket shim to have dropped down to the 10 baseplate because the failed SSOs supporting it, the 11 thermal analysis was carried out assuming that every 12SSO and every shim has failed. Causing every shim to 13 drop down to the baseplate, blocking the flow from the 14 down-comer to the inlet plenum.

15 Even under this counterfactual assumption 16 that every SSO has failed, the peak fuel cladding 17 temperature, under the CoC limited heat load, remains 18 below the ISG-11 Rev 3 limits for MPC-68M in HI-STROM 19 100 and MPC-37 in HI-STROM UMAX.

20 In other words, the SSOs are irrelevant to 21 the regulatory thermal compliance of the MPCs in both 22 vertical ventilator modules involved here. They are 23 irrelevant.

24 Now, if they're irrelevant, then I guess 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 50they're one category below NITS is in it. They are 1 totally irrelevant.

2 And I will request to you to reconsider, 3 this is one of the fundamental technical fillers that 4I request to you. This is not the SSOs I have, the 5 MPCs have no use for them.

6 I mean, you know, for the ones -- now, if 7 you went to higher heat loads in the future and 8needed, then it will be different. But right now, as 9 matters stand, and we did not send a letter to the 10 users as is stated in the inspection report asking 11 them to limit the heat load.

12 We did not because there was no need for 13it, okay? So that also needs to be corrected. I will 14 give you all the changes that we think you should make 15 to align it with what actually has happened.

16 Now, Page 22, we say, SSO serve no role in 17structure compliance of the MPC. We say that because 18 SSOs do not affect the seismic behavior of the MPCs.

19 They are an importance, thereby they are important as 20 a human fingernail is in the strength of the human 21muscle. They really have no structural contribution.

22 So, with that, I'll move on the next 23applicant. I'm not going to read every sentence here.

24 I think you know where I'm at.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 51 Now, Page 23 gives you the data on how the 1 SSOs perform, assuming a certain number of them has 2been lost. Like one out of three lost. That would be 3 32 of them lost in a canister.

4 MPC-37, we find that they will still meet 5 the earthquake, the monstrous earthquake of California 6 postulated.

7 If two out of three were lost, just make 8 an empirical assumption, two out of three. Meaning, 9 64 out of 88 are lost.

10 Even then, the remainder of them will not 11 fail under the earthquake. And I said, even if they 12 failed, they have no consequence on safety performance 13 of the canister.

14 So that is the no MPC that is currently 15loaded, needs to be modified. It meets the NRC CoC 16and the regulations to the letter. There's no 17 violation at all.

18 Now, having said that, while I defend it 19 to you, I am sensitive to the fact that you may think 20that we don't take it seriously. That is not true at 21 all. We take it very, very seriously.

22 Even though these things did not have a 23 safety consequence, they have a huge safety 24consequence. They will have in the future, if we 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 52 don't learn from these.

1 If we don't make changes someday, 2 something actually safety significant will be 3affected. So, it's in that spirit that we are making 4a whole lot of changes, adding additional barriers, 5 doing things in that in the future, whether it's a 6 small and insidious matter or a significant matter, it 7 will be caught. Or changed.

8 Here, in this case, thank goodness it was 9caught in our last barrier onsite inspection. We want 10 it caught in the first barrier, which is when we do 11the initial design reviews. That's when we want it 12 caught.13Okay. Let's go on to Page 25. Yes, on 24 14 I just want to tell you, 16 additional MPCs were 15loaded. Ten of them at VY and six of them at Columbia 16 Generating Station after they were reinspected, 17 checked that they are the original damaged SSO.

18 And then of course, margins are in 19enormous. It is in the case of, there was no need to 20 replace the SSOs, they are huge margins.

21 But the others that were not being loaded, 22 if the client wanted them replaced, we replaced them.

23 So, the ones that were in our shop, we replaced them.

24 Those that we're loading later and therefore were not 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 53 on the schedule, the immediate constraint, we replaced 1 them. We replaced them with monolithic shims.

2 Now, that is, we replaced them, but even 3 before replacing them, they met their CoC requirement 4 in full measure. We replaced them anyway.

5 You know, a ton of people shout and say 6they see no good. You have to do things to basically 7 eliminate these attacks. And some of the attack, as 8you know, in the social media has been vociferous. So 9 we replaced it.

10 But there was no real technical reason to 11 replace them. I guess that's important to make that 12 distinction here.

13 Now, let's go to, let's make an assay of 14apparent Violation A. Violation A sites, Holtec fails 15 to establish adequate design control measures as part 16 of selection and review of suitability of application 17 of alternate four inch shim standoff pins.

18 We determine it to be a deficiency in the 19 design change process, which did not ensure 20 manufacturing operations were considered and 21evaluated. I get back to the same point, the nexus 22 between manufacturing and design has not been, at 23Holtec, as strong as it should be to ensure future 24 failure of failures.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 54 I would readily concede to that because 1that is a fact. That will be the truthful thing to 2 say.3 So we accept the Violation A, but we posit 4 that for the above reasons that we have given you so 5 far, that this should be considered a minor violation, 6 if you consider it a violation at all.

7 And the lifecycle of new design 8 implementation, from design to manufacturing to site 9implementation, has three barriers, we know that. One 10 is design review process, the other one is factory 11acceptance test. There's a typo here, we'll fix it 12 later. And the third is site acceptance test.

13 In this particular case, the deviation, 14 discrepancy or anomaly, call it what you will, was 15 found inside acceptance histories. We wish it 16 happened in the first design review phase.

17 That is, that's how we look at it as our 18challenge going forward. That these things get 19 captured and fixed in the very beginning of the 20 lifecycle of the product, not towards the end.

21Okay, let's go to the next one, 26. We 22 took a number of corrective actions. And that's one 23of your enforcement questions. So, we thought that 24 we'd go to the slide to it, tell you what we did.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 55 The immediate corrective actions, while 1 the operating procedures and practices succeeded in 2 flagging the SSO anomaly, indicating the QA program 3 worked as a whole, the root core evaluation indicated 4 the pressing need to implement definitive corrective 5 action to preclude occurrence.

6 And the following activity were completed 7as part of the corrective action. One, perform safety 8analysis of loaded units to ensure their safety. You 9 have already heard this.

10 Two, we completed all applicable safety 11analysis packages for archival reference. And they're 12 now available to you.

13 Three, we inspected all non-loaded units 14 and identified necessary actions on a case-by-case 15 basis to make sure they were in full compliance.

16 Three, we replaced SSOs with monolithic 17 shim design in all applicable MPC's licensing and 18 fabrication drawings and reconciled all analysis 19 packages with the modified design.

20 We are no longer making shims with SSO, I 21guess you can surmise. But we have replaced the 22 design and now we are using monolithic shim design.

23 Simply because they haven't identified so 24 much, even though they do the job, they meet the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 56 requirements. But there has been so much ink wasted 1 on them that we should, we simply got rid of it. So 2 now we have monolithic shim designs.

3 And we have been using it now for several 4 months. This is already in process.

5 Now, a strategy to preclude reoccurrence, 6 Page 27, we want to preclude reoccurrence.

7Absolutely. I don't want to be here again talking 8 about another enforcement, I don't want to hear from 9 you in writing that we violated something, even if it 10 is below reinforcement.

11 You know, we have been doing, we have been 12 on NRC's triennial review going back over 30 years.

13 We never had most of our, virtually all of them, many 14 times you wrote complementary, NRC can only be only so 15 complementary, there is a line you draw, but you 16 certainly, certainly have been positive in your 17 comments.18 And this time, to go from there to this is 19 very hurtful. And we have to take everything, adopt 20 every measure possible that it never happens again.

21 So this slide tells you what our strategy has been to 22 ensure that it doesn't happen.

23 One, we have looked at a project design 24 development, manufacturing and site implementation 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 57process, not just design control, to a critical 1reappraisal. Which mean leveraging the large body of 2 condition reports, nonconformance reports, field 3 condition reports accumulated over the past 30 years.

4 And we wanted to coax out of the many 5 wisdom we can get to include in our review, our front 6 review process. Not just on design control, but the 7 interaction of design with manufacturing, interaction 8 of design, which transportation of the equipment, they 9 are heavy pieces of equipment, and you have to 10consider transportation also. And of course, site 11 applications.

12 Every one of them we have looked at to see 13how we can improve our operating processes. Processes 14 which, of course, are then embedded in procedures 15 which allow our people to follow through and check 16 every one of them.

17 Using, we have also worked to define 18 problems that have not happened but might happen in 19the future. We are taking a, what I'll call a 20 holistic view. What can happen.

21 That is not yet discovered, in the 22 industry or by us. And we have implemented measures 23 that would, that will protect us from that.

24 You know, I pause here to tell you, I 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 58touched on this before. The manufacturing is far 1 more, far more complicated, an affair, that meets the 2 eye.3 There is, in the past three years, we have 4 modified just a shell rolling process, and a butt-5 welding process, to significantly reduce residual 6 stresses in the welds that will protect the canister 7 down the road from stress corrosion and cracking.

8 And on the face of it, if you look at our 9 canister or any other canister, they look the same.

10 But we have reduced the surface stresses 11 significantly.

12 We'll share with you details, but we have 13 done it because we think, as a company that, among few 14 companies that actually design and manufacture, we 15 have an obligation to search across, across the entire 16 lifecycle of the project, product, and come up with 17 solutions so it does not happen.

18 You know, you take a simple operation like 19drilling. You drill a tube sheet, the drilling 20 operation looks innocuous, it makes holes basically.

21 But the act of drilling, if you use the 22 wrong kind of drilling process, you will bend that 23 tube sheet. Because of compressive stresses exerted 24 during.25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 59 And if that happens, and you have, for 1 example, a vertical unit, then your surface will no 2 longer be horizontal, and it may not perform as well 3in service. And I took the simplest of operations 4 drilling.5 So, manufacturing is the elephant in the 6 room. We need to consider it every single evolution 7and check it against design. That is what we are 8 training our engineers to do. In other words, never 9 again.10Okay. The next item, we have established 11 a system in our place now where we have the design 12 team and we have the critic team.

13The design team, we call them the Red 14Team. I don't know why, they are not all Republicans, 15 but we call them the Red Team. They're job is to be 16 involved in the design development process.

17 And that includes manufacturing, experts, 18site services experts. In other words, this team 19 ought to be able to develop designs that are free from 20 manufacturing or site service errors.

21 And then we have the Blue Team, whose job 22is to critique. And they have to be only those people 23 who are not members of the original design team. So 24 they're not contaminated by the thought process.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 60 And we instituted that right after May.

1Right after your visit. So now, everything goes 2through. There is two, two independent teams and they 3 check.4And I can tell you a lot of good things 5have come out of it. We have identified some very, 6 very good things.

7 And another item we are doing, is we do 8more cross-discipline training. So, our people who 9 are in the fox holes of thermal analysis and structure 10 analysis, we try to cross train them more so they can 11see. They can see how one discipline impacts the 12 other.13 This is also important when you're doing 14 a product development. A good product development.

15Page 28. There is now initial design 16 development, at least in the dry storage program, I 17 require that the concept is presented to me first 18before it even goes to the Red Team process. To 19 basically see if there are, and I have been doing this 20 work for almost 50 years now, so I do make sure that 21I check them myself. And before that, it goes into 22 Red Team and later Blue team reviews.

23 We have strengthened our questionnaire for 24 the engineering change orders, design review drawings, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 61 to embed all the requirements for manufacturing 1 considerations. So they get checked.

2 Not only are the teams encouraged, but 3 they have to answer questionnaires that they have 4 actually done it.

5 We, and this process will continue as we, 6 from continuing operations to the wisdom we receive, 7we will embed. It's going to be a continuous 8 feedback.9 We are also, we have developed a formal 10 protocol to quantify risk associated with design and 11process changes. If you're developing something new, 12a great risk there then there is if you're doing 13 second or third of a kind.

14 So, if this is a new product, increased 15 risk, the number of barriers and checks have been 16 enormously increased.

17 And I keep repeating that it's not just 18manufacturing, we have site services. Actual loadings 19 that are also part of the mix even though these, the 20 violation does not address it.

21 Now, the next one, apparently Violation B, 22 as I told you, we actually did do complete evaluation.

23 We did not stop our screening when we introduced the 24 shim standards.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 62 And later, by the way, when we do, we had 1 two additional, maybe this is what confused you folks, 2 we had two additional 72.48's that addressed the field 3discrepancy that we found. The discrepancy of VY and 4 that SONGS, they were also put in the 72.48 process.

5 And there we didn't go to full completion, okay.

6That is, that's the difference. And I 7 think we understood what you wanted to say we are 8 taking it that way, but it ought to be fixed in the 9 documents for future reference.

10 Because the item involved is not important 11 to safety, I respectfully submit that this violation 12 should be considered minor. Or sub-minor. Whatever 13 you will, it certainly does not merit, I think, to be 14 called a significant violation.

15 Now, next page, Page 30, the second bullet 16 is important. We have provided remedial training on 1772.48 process implementation to our personnel. Those 18 we've provided. A couple of them are sitting in the 19 audience here.

20 We have also reinforced expectation to err 21 on the side of conservatism when determining whether 22 a 72.48 evolution, evaluation is needed versus 23screening only. There will be far more 72.48 full 24 evaluation than screening in the future.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 63 Unless the change is so minor that they 1 evidentially, and consequential, we will do 72.48 full 2 evaluation in every case just to be not, get into this 3 unclear territory.

4Okay. We did do extent of conditions, 5Page 31. We did do extent of conditions and we found, 6 first, we did full evaluation and we found the 7conclusions did not change for those two. They did 8 not change. They have no safety significance.

9And then we did extent of conditions. And 10 we concluded that this was an isolated incident, it 11was nonrecurring. We reviewed all 72.48's going back 12three years. Give you the last previous clientele 13 inspection. We didn't find any.

14 So, we can tell you that this was an 15 isolated incident, if you call it a violation.

16 Although you may reconsider calling it a violation.

17 But if you do, there's an isolated event and it's 18 certainly by the smells, it looks minor. If at all.

19Okay. I am on Page 32. Synopsis of 20 lessons learned. I'll go through it quickly.

21 We have made an intensive corporate effort 22 to include nuances of manufacturing and site services 23 in SSC's design development effort. And I have said 24 this before, this here is in written words committing 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 64 to you.1 We intensify training the company 2 personnel on the symbiotic relationship between design 3and manufacturing. Personnel must be given deep 4 immersion and real-life manufacturing.

5 Now, you know, some of you know, that we 6 put up a brand new manufacturing plant right next to 7our design office. The problem we suffered before, 8 our people have to go 300 miles to Pittsburgh to 9receive the hardware. And that problem has been 10 remedied. Now they can walk 200 feet and go see the 11 equipment being made.

12 The idea is to make them a stakeholder in 13manufacturing. They don't know it yet, I want to 14require them to know how to weld also. But it is, the 15 intention is to make our people full complete 16 engineers for the product, not just specialists who 17 are on the, focus in one area.

18 The third item is broaden this ECO 72.48 19 process to include in-depth consideration of 20manufacturing and site operations. This has been 21lacking in our 72.48 and ECO questionnaires. As I 22 have stated to you earlier, I think it's lacking 23 industrywide.

24 The next item, increase the in-process 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 65 review and critique of the following design decisions.

1 That's where we have red team/blue team, and these are 2 separate teams. One does not influence the other.

3 And, of course, continuously upgrade the 4 procedures using lessons learned from continuing 5operations. Complacency is the enemy of quality. We 6 want to continue driving.

7 So, we get to the summary now that you 8must be waiting for after my long monolog. As we have 9 discussed in detail, our analysis shows that, assuming 10 all SSOs fail and become inoperative, the loaded MPCs 11 fulfill their intended function without exceeding any 12 regulatory limits under all applicable conditions of 13 storage and transport.

14 Two, hence, the SSOs play no role in the 15 safety performance of loaded MPCs and can be correctly 16 characterized as Not-Important-to-Safety item in the 17Basket Shim Assembly. And therefore, we accept the 18violations. While we accept them with equanimity, we 19 believe that they entailed minor or no safety 20 significance.

21 To prevent recurrence, Holtec has 22 performed a stem-to-stern reappraisal of processes and 23 operating procedures and made numerous improvements to 24 prevent damage to equipment during handling in 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 66 manufacturing and transport to the site and other 1 similar activities outside the scope of normal safety 2 analysis.3 Now, getting to your side of the equation, 4 we took a look at your Enforcement Manual, and it said 5the following conditions under which NRC will most 6likely not consider escalated enforcement actions. We 7 reproduce them here.

8 One, "safety significance of the issue 9 being minor". I would say it's either minor or sub-10 minor. It certainly is not more than minor.

11 Item 2, the "issue is self-identified by 12 the licensee and promptly placed in licensee's 13Corrective Action Program". We have done that. It 14 was self-identified by us, and we had promptly put it, 15 immediately it in a root cause evaluation corrective 16 action program.

17 Three, "licensee promptly completes Root 18 Cause Analysis Report," which we did. This happened 19in March. We arrived in May. It was done and 20 delivered to you to look at.

21 Item 4, "promptly completes all required 22 corrective actions". We have not only completed all 23 required corrective actions, we have gone way beyond 24 that and looked at all future events that can possibly 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 67 plague us and installed corrective actions. I think 1 you will give us an A+ if you come back and take a 2 look at it and what we have done.

3 And finally, the "issue was not caused by 4 any willful actions." Well, I don't have to comment 5 on that. You know it was not willful.

6 So, as the supplemental information 7 provided in this presentation indicates, we fully meet 8 every one of the above criteria in your Enforcement 9 Manual.10That's the summary. Now here, the next 11 slide, which is 35, this is as much for us as it is 12 for everybody else in the industry and you, as the 13enforcer. We think the problem behind the SSO 14 malfunction is a pervasive lack of knowledge in the 15 industry regarding many collateral effects of 16manufacturing on the hardware's performance. This is 17pervasive. We own up to it. Yes, we have failed 18here. But, then, your people who are versed in 19 manufacturing and know the industry I think will 20 collaborate my statement that there is a general lack 21 of expertise.

22Okay. I would say with a slight 23 diffidence that in your regulatory literature, NEI's 24 guidance, and Holtec's own internal controls, the 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 68 attention paid to the complex role played by 1fabrication processes has been inadequate. As I said, 2 your NEI guidance document, which you have endorsed, 3doesn't even utter the word "manufacturing". So, this 4 is something more for a general knowledge.

5 I think industry, you folks, I recommend, 6 I request you lead in this area to try to look at the 7equipment in an organic whole, not just design 8control. It's manufacturing. It is site services.

9It's transportation. It's all of it. They should get 10 their place in the sun, in the product development 11 process.12 Now our step -- and we have taken it to 13 heart -- we are going to. I can promise you with as 14 much certitude as I can, because I can't tell the 15 future, but I can tell you that this kind of a problem 16 which deals with design not properly vetted for 17 manufacturing or site services will never happen 18 again.19At Holtec it will never happen again. But 20it's a problem that can happen anywhere today. It is.

21It is. I know our industry and I know even the 22aerospace industry. It will happen because, overall, 23 there is lack of emphasis on the nexus between 24 manufacturing and design, not enough.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 69Okay. At our place, we have begun a 1 personnel training program to emphasize this message 2 by examples, by showing how important it can be. We 3have expanded our design change execution and 72.48 4 screening processes to integrate considerations to 5 design, manufacturing, and site operations and their 6 effect on each other. You will see that our ECO and 7 72.48 questionnaires have been substantially beefed-8 up, and they are all loaded with questions probing the 9 effect of manufacturing in the design, the backwards 10 effect.11And I said before we have placed our 12 engineers right next door to where the manufacturing 13 is done, so they can learn by osmosis and by actual 14interaction with the shop people. This is part of our 15 training process.

16 In conclusion, all loaded canisters with 17SSOs fully meet their CoC certifications, with no 18 exceptions.

19 The SSOs in the loaded MPCs can be 20characterized as NITS. Their sole function is to add 21 thermal margin by enhancing the MPC's heat generation 22 rate. That's all they do.

23 That said, we accept your Notice of 24 Violation, but our assessments show that their 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 70significance is not visible. They really don't in 1this case. I make a differentiation between this 2 particular case and the weaknesses in our program that 3it has revealed. The weaknesses is where we are 4 focusing to invest them for the future.

5 We accept the violation records of 6 changes, but our full 72.48 evaluation did not screen 7to a higher significance. We went back and did the 8 full evaluation, and it did not screen to a higher 9significance. So, even if we had done a full 10 evaluation of these field observations -- the initial 11 one was done, full evaluation -- if we had done it, 12 the conclusion would not have been any different, and 13 rightfully so.

14 And finally, Holtec has revamped and 15 upgraded the entire array of processes and procedures, 16 including those pertaining to project planning, design 17 control, 72.49 screening and screening regimen, and 18 this informed decisionmaking. We have revamped them 19 completely.

20 Now I'm going to give you a couple -- last 21 page, this is the very last slide -- I'm going to give 22 you a couple of little NITS. Look, anybody who 23 prepares a document like this with just so many 24facets, there's going to be some discrepancies. Okay?

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 71 We have not established yet that we are God or you are 1God. You're going to have some errors, some 2discrepancies. And I'm just going to point out a 3 couple to you, not to emphasize them, but it is 4 necessary.

5 I think I'll recommend that you amend your 6 document with the factual changes that's necessary to 7 them, just like we will amend this document, this 8 presentation, and give it to you, based on what we 9 learned from you that we may not have covered 10completely. So, there is an official authoritative 11 detail for you and from us going forward.

12 Now pointing to Violation A, Enclosure 1 13says SSOs support the Fuel Basket. They don't. They 14don't support the Fuel Basket. They support the Shim.

15Okay. So, that statement, you know, we understand 16 that it is not a vitally important statement, but it's 17 good to fix it, so it does not stand on its own.

18 Enclosure 2 says that Holtec informed 19 licensees to limit the heat load below NRC approved 20 limits. Not true. We did not and there was no need 21for such a notification. And we did not make this 22notification. This may have factored in your 23 enforcement action thought process. So, this is 24 important. Okay?

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 72 On Violation B, Enclosure 1 states that, 1 for the design change for the SSOs, "Holtec completed 2 a 72.48 screening and incorrectly determined that a 3 written evaluation was not needed." As you know, as 4 I told you, we did do full evaluation.

5 And I should conclude by stating -- and 6 there are many other small NITS that we will give you; 7 we'll just mark it up and give it to you. You know, 8 this is not important to the discussion here.

9 But the loaded canisters, I want to tell 10 to you folks and anybody listening in, the loaded 11 canisters do not, and never have, posed any risk to 12 public health and safety, as is being incorrectly and 13 continuously alleged by certain activists in the 14social media. We regret such canards because they are 15 without any facts and they're inflammatory.

16 Thank you.

17 MR. LAYTON: Thank you, Dr. Singh.

18 Is there a need for any broad clarifying 19 questions from the NRC panel/staff before we adjourn 20 for our caucus?

21 (No response.)

22We thank you. And again, Dr. Singh, thank 23 you very much for the detailed explanation that you 24 provided in the presentation.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 73 We'll now go off the record and take a 1 short recess to allow NRC to briefly caucus.

2 For the folks that are on the conference 3line, please stay on the conference line. As soon as 4 the NRC completes our caucus, we'll rejoin the 5 conference line and resume the predecisional 6 enforcement conference.

7 So, we'll now take a break for the caucus.

8 Thank you.

9 (Whereupon, the foregoing matter went off 10 the record at 2:43 p.m. and went back on the record at 11 3:28 p.m.)

12MR. LAYTON: We are going to go back on 13 the record.

14 And the NRC staff has a couple of 15 clarifying questions that we would like to ask Holtec 16 as part of the predecisional enforcement conference.

17THE OPERATOR: Thank you very much, Mr.

18 Layton.19And you are live. Your guests are in 20 conference with you at this time.

21 MR. LAYTON: Okay. Thank you.

22 THE OPERATOR: You're welcome.

23 MR. LAYTON: Okay. Again, thank you for 24the presentation. There are a couple of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 74 clarifications on things that we've seen in the slides 1and, also, what we heard in your statements. And 2 recognize we're not requesting you submit information 3 to us, but if you think it's going to be helpful to 4 your explanations, we would encourage you to provide 5 additional information.

6 So, to make it a little bit easier, I'm 7 going to refer back, because I've put all my notes on 8 the pages of the presentations.

9 Early in the introduction to the 10 presentation, Dr.

Singh -- and I want to make sure 11 that I heard correctly -- you said that yesterday 12 Holtec sent all pertinent information to NRC. And I 13 want to make sure I'm clear. Do you mean that the 14 presentation information was sent yesterday or was 15 there other information that was sent to us?

16MS. MANZIONE: Yes, Mike, we went you a 17 letter with attached information on structural 18 analysis, thermal analysis, and 72.48s, and then, the 19appropriate proprietary withholding information. I 20 have a copy, if you would like me to hand it to you.

21 But we sent it through your document control, through 22 the appropriate processes.

23MR. LAYTON: Thank you. So, you confirmed 24that I don't miss things when I'm listening. Thank 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 75you. If you have a copy of the transmittal letter, if 1 you can give that to us now, that will be adequate, 2 and then, we can look for it. I do appreciate that.

3 Thank you.

4Also, if you wish, can you provide the 5 Final Root Cause Analysis that you described in your 6 presentation that includes the corrective actions for 7 our consideration?

8DR. SINGH: Of course we will. Of course 9 we will. Thank you.

10 We will also provide you this presentation 11 with some of the NITS that we found, you know, just 12 going through it.

13 MR. LAYTON: Okay.

14DR. SINGH: So, it will be final, pure, 15 and pristine for your use.

16 MR. LAYTON: Okay. Thank you.

17DR. SINGH: And we would, subject to your 18 approval, send you a marked-up copy of your Inspection 19 Report where we think some of the material may not be 20 quite --21MR. LAYTON: We'll accept that. We're not 22 requesting, or I'm not sure what action we'll take on 23 it, but we'll certainly accept it and we appreciate 24 it.25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 76 DR. SINGH: Beside the revised draft, it 1 will be helpful.

2 MR. LAYTON: Yes. Thank you.

3 DR. SINGH: Okay.

4MR. LAYTON: And throughout your 5 presentation, you refer to some analyses and, then, 6also a report or two. And I reference, I think, slide 719. Let me get to that point. Slide 19 on thermal 8analysis. And on slide 20, you reference a Holtec 9 HI2188123 report.

10 DR. SINGH: Uh-hum.

11MR. LAYTON: And if you think those would 12 assist in consideration of our decision, if you would 13 provide those if you think they're appropriate?

14MS. MANZIONE: The thermal report is an 15 attachment to the s ubmittal letter we sent you 16 yesterday.

17 MR. LAYTON: Thank you.

18 DR. SINGH: And how about the other one, 19 the structural?

20MS. MANZIONE: Yes, the structural report 21 is also there, and there's a couple of other things, 22 but that specific number that's referenced in the 23 presentation is an attachment.

24 MR. LAYTON: Very good. Thank you.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 77DR. SINGH: And they will simply 1substantiate the statements made here. They don't 2 provide new information by way of suitability of the 3-- they basically provide the substantiating 4 calculations --

5 MR. LAYTON: Okay.

6DR. SINGH: -- that stand behind the 7 statements made here.

8MR. LAYTON: And then, many of us also 9 understood that in the early parts of the inspection 10 and evaluation, we understood that there was some 11 communication to licensees regarding the limit of 12 thermal loading, based on the shim analyses. And in 13 your presentation, I thought I heard that you said 14that there was no such communication. Could you 15 clarify that for us, so we just have a clear 16 understanding?

17 MR. TINDAL: So, that's correct. We did 18 not limit the thermal capacity of the system.

19 Immediately upon discovery, we notified the users.

20 What we did do was an operability review for the 21 loaded systems with the current heat loads to perform 22 the safety, to validate the safety function of the 23canisters for what was already in storage. But we did 24not limit any heat capacity of the systems. And we 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 78 can provide that communication to the Users Group, to 1 you guys, as a supplemental information.

2MR. LAYTON: Well, if you think it will be 3 helpful.4 And I believe what Kim has already said, 5evaluations on the 72.48 for our consideration have 6 already been included in the transmittal letter.

7I'm going to look at our NRC staff. Is 8 there anything that I missed or mischaracterized or 9 something else that we should identify?

10DR. SINGH: Yes, we should. We should 11 also tell you that we provided you a two-page memo 12 that we showed to Holtec User Group, that we sent to 13 our User Group giving our position in this matter.

14We have also provided that to the NRC. Is 15 that right, Kim?

16DR. ANTON: Yes, we have provided that, 17but I don't think we have provided that formally. So, 18 we might do that.

19DR. SINGH: We should share that with you.

20DR. ANTON: We will surely share that, to 21put that on the record. I think we did that just 22 informally, yes.

23MR. LAYTON: Okay. Jorge, would you go to 24 the microphone, please?

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 79MR. SOLIS: You mentioned a thermal 1analysis report. I mean, if they wish to provide the 2 analysis themselves, that would be very helpful.

3 DR. SINGH: Surely.

4 MR. SOLIS: Right.

5DR. SINGH: Yes. I think we already have, 6 haven't we, Kim?

7MR. LAYTON: Yes, I think Kim indicated 8 that that's part of the package that was just sent to 9 us.10MS. MANZIONE: You can see the attachment 11 is that. But just to clarify --

12MR. SOLIS: That will probably not be 13 sufficient for me.

14MS. MANZIONE: You're talking about input 15 and output-type analysis?

16MR. SOLIS: Actual analysis. That's 17 right.18 MS. MANZIONE: All right. Understood.

19MR. LAYTON: Again, that's if you think it 20 would be helpful.

21 DR. SINGH: Give them everything.

22 MR. LAYTON: Well, hold on. Hold on.

23 (Laughter.)

24Hold on. We're not requesting 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 80 everything --

1 DR. SINGH: Okay.

2MR. LAYTON: -- because we have a time 3 goal for this evaluation, and we're not going to do a 4complete re-review of the certificate. We're not 5 going to do a complete re-review of the inspection.

6 We're only providing you an opportunity to provide us 7 what information you think will help us to make an 8 informed enforcement decision.

9DR. SINGH: Understand. I will not swamp 10 you with paper. Okay. Understand.

11MR. LAYTON: Is there anything else to 12 include from NRC staff?

13 (No response.)

14 So, with that, I'll enter in my closing 15remarks. In closing to this predecisional enforcement 16 conference, I note that the NRC will consider the 17 information we obtained here today in making the 18 enforcement decision and, also, information that you 19 provided under separate cover or will provide under 20separate cover. And we'll notify you by telephone and 21 in writing when we are ready to announce our decision.

22 I remind everyone that the apparent 23 violations discussed at this conference are subject to 24 further review, and it may be revised prior to any 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 81 resulting enforcement action; and that the statements 1 or expressions of opinion made by NRC employees at 2 this conference, or the lack thereof, are not intended 3 to represent a final Agency position or determination.

4With that, this conference is closed. We 5 are now off the record.

6 For the people on the phone, we'll open 7 the phone lines for comments very shortly.

8 (Whereupon, the foregoing matter went off 9 the record at 3:37 p.m. and went back on the record at 10 3:38 p.m.)

11MR. LAYTON: Okay. We're going to move 12 into the comments from the public portion of today's 13meeting. But, before I open the floor to any comments 14 from the public, I would like to clarify that the NRC 15 does not believe that there is an imminent safety 16 threat with the canisters that are currently loaded 17with the standoff pins. Additional review of these 18 canisters may be warranted, based on the outcome of 19NRC's review of these apparent violations and the 20 information that we receive.

21 Fran?22THE OPERATOR: Yes, sir, I understand 23 we're ready for Q&A from the public.

24 MR. LAYTON: We are.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 82THE OPERATOR: If you'd like to ask a 1 question over the telephone, please press *1, unmute 2 your phone, and record your name clearly, please, when 3prompted. Your name is needed to introduce your 4question. If you decide to withdraw that request, 5press *2. But, again, to ask a question, please press 6*, then 1, and record your name.

7 One moment, please, for our first 8 question.9 (Pause.)10 Our first request is from Nana Vadiar.

11 Ma'am, your line is open now.

12 MS. VADIAR: Thank you.

13 According to the NRC's own Executive 14 Summary, Holtec is in violation of their NRC license 15requirements. Therefore, the four buried cans at San 16 Onofre create, quote/unquote, "a possibility of a 17 malfunction of a different result than any previously 18 evaluated in the Final Safety Analysis Report, FSAR".

19 Unquote.20 At San Onofre, this equates to three 21 possible malfunction results: (a) broken shims; (b) 22 broken shims that impede fuel assembly cooling; (c) 23 overheated fuel assemblies resulting in a radioactive 24 release.25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 83 Since this defective system is in 1 violation of 10 CFR 72.48, will NRC consider taking 2 decisive correction action to require Holtec to 3 retrieve and inspect those cans with the affected 4 shims at Vermont Yankee and, also, San Onofre?

5 Thank you.

6 MR. LAYTON: Yes, this is Mike Layton.

7 Thank you for the question and the 8 comments.9 The purpose of this panel, the 10 predecisional enforcement panel, and the following 11 decisions that will happen based on what we determine 12 from the evaluation, the information that we get from 13 Holtec, is designed to provide the significance of the 14safety issues and, also, whether there are any 15 followup actions that need to be taken.

16 The items that you identified in your 17 comment and questions are ones that we are very 18 interested in evaluating as part of our enforcement 19process that we're currently in. So, I would offer 20 that the outcomes of our deliberation and our 21 enforcement decision will be made public, and if you 22 have any further comments after we finish our 23 enforcement process, to please let us know and bring 24 them forward.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 84 We had a question in the room?

1 MR. GUNTER: Thank you.

2 My name is Paul Gun ter, and I'm with 3Beyond Nuclear. We're a public interest group in 4 Takoma Park, Maryland.

5 So, the question I have for NRC has to do 6 with your deliberative process for escalated 7 enforcement action and how the Agency is factoring any 8 previous or subsequent violations by Holtec. And in 9 specific, I'm referencing EA 18.155, which has to do 10 with SONGS cask downloading, and the fact that there 11 were three Level IV violations involving frequent cask 12 loading incidents and the failure to identify adverse 13 conditions, failure to adequate program training, 14 failure for proficiency in training, and failures for 15 certifications of individuals involved in the cask 16 downloading operations. It also involved failure to 17 provide adequate procedures for dry cask downloading 18 operations and, in fact, disabling of important safety 19 procedures, and failure to timely report violations to 20 the NRC within the required 24-hour period.

21 So, how does the Agency incorporate in its 22 enforced action, you know, escalated enforcement 23 action, such things as how EA 18.151 and EA 18.155 are 24 related, possibly related, particularly in terms of a 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 85pattern of behavior?

So, I guess one of the 1 questions, if you would, please, just inform me where 2 the status of EA 18.155 is and how you could possibly 3 or if there's need to incorporate it in your current 4 decision?5MR. LAYTON: Okay. Thank you, Mr. Gunter.

6 Off the top of my head, the EA that you're 7 referring to is the misalignment at SONGS, is that 8 correct?9 MR. GUNTER: Correct.

10MR. LAYTON: There's one clarification 11that needs to be made from what you read. The 12 inspection and the activities in that enforcement 13 action are directed at the licensee, Southern 14 California Edison, not Holtec.

15 So, from the standpoint of your question 16 about how that will be considered in this enforcement 17 action, we are focused on the two violations that were 18cited in the inspection at Holtec's facility. The 19 enforcement action of which you're referencing is 20 going to occur on a separate path, where I believe 21 there will be a pre-enforcement conference associated 22with that enforcement action. I don't know offhand 23 whether it's been scheduled or not, but I know that 24 they're very close to probably doing the press release 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 86 on the timing for that enforcement action.

1MR. GUNTER: Okay. I did note in the 2 enforcement action from 18.155 that both the licensee 3 and Holtec were involved and related in the 4 downloading anomalies that resulted in these frequent 5 contacts between the silo wall and the cask 6downloading. So, I appreciate your making its 7 distinction, but -- so, I'm to understand that only, 8 in what you're saying now, only the SONGS operator is 9 involved in that particular enforcement proceeding?

10MR. LAYTON: Right. Just to be clear 11 again, the focus of that enforcement action is the 12licensee, Southern California Edison. Holtec is an 13 operator contractor contracted to Southern California 14Edison. The way that NRC views responsibility, is the 15 best way I can frame it, for actions that occur at a 16 licensed facility is the licensee is the one who is 17 responsible for that.

18 So, if there are corrective actions that 19 have to come, that result from that enforcement 20action, it will be incumbent on Southern California 21 Edison to do those corrective actions. If there are 22 learnings or things that Southern California Edison, 23 in particular, would like Holtec to make adjustments 24 or improvements in how they are performing their 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 87 contract with Southern California Edison, that is at 1 the discretion and the decision of the licensee.

2 MR. GUNTER: Okay. Thank you.

3MR. LAYTON: Are there any other questions 4 on the phone?

5THE OPERATOR: We have right now six over 6 the phone line. So, I'll move on.

7 Our next is from Gary Headrick of San 8 Clemente Green.

9 Sir, your line is open.

10MR. HEADRICK: Yes. Hello. Yes. I'm in 11 charge of San Clemente Green, which is representing 12 about 5,000 concerned citizens living near San Onofre.

13 And I just have to start by saying I'm 14 pretty offended by the remarks Dr. Singh ended his 15comments with about the activists. And we're just 16concerned citizens, first off. You know, we listen to 17 an admiral of the Navy who's pro-nuclear, and he's 18 concerned about the way nuclear waste is being 19handled. We are listening to physicists and 20 engineers, and we don't claim to be experts, but we're 21 unpaid concerned citizens combating the efforts of a 22 for-profit corporation that's being reckless with our 23 lives and our livelihoods. So, you know, I think he 24 should back off on blaming us. This is not a social 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 88 media problem; it's incompetence on his part.

1 MR. LAYTON: So, Gary, I appreciate your 2comment. Could you focus your comments to the NRC and 3 on this proceeding, please?

4MR. HEADRICK: Sure. There is a 5 whistleblower or a concerned employee that contacted 6 us about contractual incentive built in for a 7 financial incentive for Holtec to complete the job 8sooner rather than later. And I talked to Tom 9 Palmisano at Edison about this, and he could not 10confirm or deny it. Will the NRC look into that?

11Because it is not proprietary information, as Tom 12Palmisano responded. But I'd like to know if there is 13 an incentive for them to rush through these things and 14 make the kind of mistakes they're making, if the NRC 15 will look into it and prohibit that kind of 16 contractual agreement.

17MR. LAYTON: That's a very good question.

18 MR. HEADRICK: Well, that's how mistakes 19like these faulty shim pins are created. I think it's 20 relevant to this topic.

21MR. LAYTON: No, I appreciate your 22pointing that out and your comment and concern. What 23 I need to do to clarify as to what the role of NRC is, 24 is really, as you're well aware, because we've had 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 89 many conversations in the past, that NRC is focused on 1the safety of the operations. To the point where we, 2 as you suggest, that we would get involved in looking 3 at contractual arrangements between licensees and 4 their subcontractors or any contractual arrangement 5 with any licensee, that isn't something that NRC would 6get involved in. Where we would be very interested is 7if there turns out to be safety issues or safety 8 concerns that result from, I would say, poor 9 implementation of work habits or things like that that 10 have a result in a safety finding.

11MR. HEADRICK: Well, this is only the 12 first incident that we're discussing about the pins.

13 You know, they almost dropped a canister. There's a 14pattern of ineptness that's all design-based. It's 15Holtec's issues. They're gouging canisters as they're 16lowering. This is not a manufacturing problem. It's 17a design problem. And I would expect the NRC to 18protect the public. Even if it's a little bit out of 19 your jurisdiction, you should be concerned, as I am, 20 about contractual incentives that may create 21opportunities for errors. So, I don't understand why 22 you're limiting yourself.

23MR. LAYTON: No, I appreciate -- again, I 24appreciate your view. And from the standpoint of 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 90 things that are within our view and what we are 1 concerned about in protecting the public, we are 2concerned about protecting the public. That is the 3DNA of our mission. We focus on the activities and 4 whether there is any safety risk or potential safety 5 risk to the public.

6 Going in, from our perspective, and trying 7 to regulate contracting is not part of what this 8Agency does. If activities result in safety findings 9 and potential safety risks, we will evaluate those and 10 we will take actions.

11 From the standpoint, I think what you're 12 alluding to, of identification of several types of 13activities that are now in enforcement, those are 14 things that do get the consideration -- and I'll defer 15 to our Office Enforcement Coordinator -- that they do 16 not necessarily go unviewed or undiscussed or 17 unevaluated within NRC.

18 MS. BURGESS: This is Michele Burgess.

19 I just want to make a general statement.

20 Mr. Layton's been speaking specifically of the Holtec 21 process, but I just wanted to raise just a general 22thing. If there is a concern that is raised or you 23 have a concern, we do have processes within the NRC 24 for you to be able to put those on the table for NRC 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 91evaluations. We have an allegations process, and you 1 can submit that to an allegations process and it would 2 be reviewed.

3 What Mr. Layton is talking about is 4 anything that we've identified and it's resulted in a 5violation or an apparent violation, we handle it 6through the enforcement process. And if it hasn't 7 resulted in a safety issue that is an actual violation 8 of NRC requirements, then we can enforce, we can take 9 on enforcement action. That's to disposition things 10 that have been determined to be violations.

11 So, the space that you perhaps might be 12 talking about is our allegations space, and there is 13a process for that. On the NRC website, there on our 14 public website, there are mechanisms where you could 15 submit those concerns and they can be evaluated.

16 Did that address what you're asking for?

17THE OPERATOR: I have removed him from 18 queue since we have another handful in queue.

19 MS. BURGESS: Okay.

20THE OPERATOR: Do you want me to readdress 21 that?22MR. LAYTON: No. Just proceed with 23 additional folks that have questions, please.

24THE OPERATOR: Our next up at bat here is 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 92 Donna Gilmore of San Onofre Safety.

1 Ma'am, your line is open.

2MS. GILMORE: Okay. Thank you very much.

3 Hi, Kris.4 One of the things the NRC said in their 5 presentation is that you look at this in line of other 6violations, that type of thing. I think this is a 7 perfect time to do that.

8 Well, No. 1, the four canisters loaded at 9 San Onofre, Tom Palmisano admitted that the inside of 10 those, the inside bottom of those were not inspected.

11 They didn't have the tools to even do that inspection.

12So, I raise this as an issue for the NRC. Were the 13 inside bottoms of all the canisters loaded with the 14 defective shims, were they inspected, the bottoms 15 inspected? Because they weren't at San Onofre. Tom 16said he didn't have the tools to do it. And I know 17 that's a requirement of the NRC, that before you fill 18 a canister, you're supposed to inspect it thoroughly 19inside and outside. So, that's one issue I think 20 that's related here.

21 Another issue is the NRC admitted every 22 single canister loaded at San Onofre is unavoidably 23 being gouged. There's only a quarter-inch clearance 24 between the canister wall and a steel guide ring 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 93protruding out in the center. This is an engineering 1 design issue that should apply to Holtec, not just to 2their design. You know, places where they deviated 3 from the design need to be considered in this, in what 4 you're looking at now because it's all related to an 5 endemic problem of Holtec of bad, inferior engineering 6 design and a flagrant disregard for NRC regulations, 7 where they do better to ask forgiveness than 8 permission.

9 And I have sympathy for the NRC's position 10here. I know you have a lot of good engineers that 11 are doing the best they can, and Holtec does not make 12 that easy.

13 Thank you.

14MR. LAYTON: Okay. Thanks for your 15comments, Donna. And again, as I indicated to the 16 first caller, much of what you bring forward in 17 reference to SONGS is really more, pertains more to 18the enforcement action on the misalignment. So, 19 again, that will be going through its own enforcement 20 process, and I believe there is going to be a 21 predecisional enforcement conference for that 22 enforcement. So, I would encourage you to watch the 23 press releases of when that's indicated that that's 24 going to occur.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 94 Are there any more questions?

1 THE OPERATOR: We have five more at this 2 time.3 MR. LAYTON: Sure.

4 THE OPERATOR: Bill Weigel, your line is 5 open now. You may ask your question.

6 MR. WEIGEL: Thank you.

7 I have a question regarding the admission 8 today by Dr. Singh and Holtec on the record of their 9 manufacturing incompetence and subsequent equipment 10 failure, and the fact that the NRC Charter contains a 11pledge to protect public safety. I'm curious how the 12 NRC can allow for the public to be exposed to Holtec's 13 real-time experiment of unproven design that at 14 anytime could potentially cause failures that would 15 lead to the potential loss of life or property of 16 millions of people.

17 And also, if the NRC is aware and 18 comfortable with the fact that they can become liable 19 as individuals for suits against public officials in 20 their individual capacity, per Title 42 USC, the 21 Public Health and Welfare, Subsection 1983, which 22 imposes liability without defense on state and local 23 officials who, acting under color of law in their 24 individual capacity, deprive plaintiffs. Plaintiffs 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 95have rights created by the Constitution and federal 1 law, of which the 14th Amendment guarantees life, 2 liberty, and property. If there was an event that 3 would lead to the loss of any of these items, that's 4 what's on the line.

5 And as a Southern California resident, I 6 would like to know how we can file for an immediate 7 cease and desist on this criminally negligent project 8 and pursue the element of safety jurisdiction from the 9 California Coastal Commission permit that was issued 10 on 10/12/15, of which they rejected an attempt to have 11 the permit rejected because they are not in charge of 12 the jurisdiction of the safety element, which the NRC 13 is in charge of.

14 And if the NRC is not in charge of onsite 15 safety for contractor practices, who is and who can we 16contact regarding these recent failures? Or are we 17 allowing the open air conflict of interest to have a 18 for-profit corporation police itself while it's 19 clearly demonstrating criminal negligence?

20MR. LAYTON: I appreciate your prepared 21comments, Bill. I'm going to turn -- I believe there 22 is one question in there on how you can intervene or 23provide a question to the NRC. And I'm going to turn 24 it over to Michele Burgess to let you know.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 96 MS. BURGESS: This is Michele Burgess.

1 There were a number of questions in there.

2 One of them was how you could request us to take 3action. And we do have a process. It's within 2.206, 4 10 CFR 2.206, and it provides a process for you to 5 make such requests.

6MR. WEIGEL: I also was wanting a 7 clarification based upon the Charter for the Nuclear 8 Regulatory Commission and its pledge to protect public 9 safety, how they can be acting in good faith upon that 10 pledge, given the admissions on the record today by 11 Dr. Singh and Holtec of manufacturing incompetence, 12 and how there can be any trust given to them at this 13 point to not have a further lurking problem that could 14 be realized in real time which could cause a 15 disastrous event in Southern California, irreversibly 16 depriving people of life, liberty, and property.

17MS. BURGESS: To recap some of the things 18 we've said before and our process, the stage that 19we're at in our process is information gathering. Mr.

20 Layton specifically said that, at this point in time, 21 we don't see an immediate health and safety issue that 22requires an immediate order. What that means is 23 that's not to say that there isn't a concern, but it's 24 just a concern that we can allow our due process to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 97play itself out. That's what we're in the process of 1 right now.

2 So, as we're taking the information that 3 we've collected so far in inspection, the additional 4 information that's been provided today included the 5statements that you've referenced. We're going to be 6 taking all of that into consideration for our final 7 action.8 MR. LAYTON: Thank you.

9 Fran, can we have the next question, 10 please?11THE OPERATOR: Yes. Raymond Lutz with 12 Citizens' Oversight, your line is now open.

13 MR. LUTZ: Yes, thank you very much.

14 I have been following the San Onofre 15 situation here.

16 But, first, let me just say that I'm a 17 little bit disturbed that public comments are not 18 included in the official record of your meeting.

19 And also, I'd like to complain that your 20 notices for this meeting were very difficult to get 21 the information for when the meeting was going to be, 22 what number to call, and where to go, and that the 23time on the webinar website does not have the time 24zone. So, it's very hard to know what time that 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 98actually represents. Apparently, it changes based on 1 where you are.

2 Now today, we heard, we learned about the 3 fact that Holtec had made this change and not notified 4the NRC about it in advance. And this is the largest 5concern here. And we also heard Mr. Singh admit that 6 there were, quote, "many other changes," unquote, made 7 to their process, such as the bottom plate, how it 8 mates with the shell, and I guess some of the welding 9 there.10 And at this point, because they changed 11 the design so radically with regard to these shims by 12 changing completely the design and putting these pins 13 in the bottom, which obviously would bend over any 14 kind of handling, how many other things have been 15 changed in this design that Holtec is not telling us 16 about? I think this warrants a full review of these 17 various many other changes that Mr. Singh admits to.

18 We need to find out where we stand with regard to 19 these changes that were being made.

20 And we know this is also -- and I hate to 21 bring this up because you said the errors in loading 22 these into the holes is a separate thing, but I beg to 23differ. This is the same dry cask storage system that 24we're talking about. It's all one system. And you've 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 99 now decided to split it up and say that the shim issue 1is not the same as the dropped canister issue. And 2 they, for some reason in the dropped canister issue 3 area, have decided that there's no design issues at 4all, and it all has to do with handling of by SCE 5 rather than a design issue.

6 Well, how many design changes did Holtec 7 make to other aspects of this system, not just the 8 pins, but other things such as that retainer guide 9ring, as they're calling it? Was that a change? And 10 did you guys approve that in advance or was it 11 something that they just did behind closed door?

12 So, I'm going to request that you make a 13 full review of this cask storage system and not 14 breaking it up amongst these various discrepancies 15 that you've found so far and putting those into 16 separate categories, but, instead, to unify this and 17 put it under one broader view and take a look at the 18 entire problem.

19 Now I also want to bring one other thing 20 up, and that is Mr. Singh did not deny that this was 21intentional. He scoffed at it and said, oh, you know, 22 of course, who would ever ask that question, this sort 23of thing. But he didn't say that it was not 24 intentional.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 100 And I request that the NRC turn this over 1 to the Federal Bureau of Investigation to find out if 2 this was intentional or not, if it's beyond the scope 3 of your abilities to do so within your own source.

4 So, again, please broaden the scope, 5 include these two categories, and I would definitely 6 demand a full review of this dry cask storage system, 7 including all of these various failures that are now 8happening, and everything that Mr. Singh has said, 9 these many other changes, and make sure that you know 10 what those are.

11 Thank you.

12MR. LAYTON: Yes, thank you, Mr. Lutz, for 13your comments. What I would offer is I'm going to ask 14 Michele Burgess again to give you the information to 15 bring your concerns forward under the petition 16 process, the 2.206 petition process.

17MS. BURGESS: Yes, this is Michele 18 Burgess.19 One general comment, though, is regarding 20design changes. Our process does allow those to be 21made in some cases under certain parameters, and 22 that's actually the issue that we are dealing with 23right now in this enforcement action. So, it's not 24going unaddressed as a general issue. That's exactly 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 101 what we're here for in this particular enforcement 1 action.2 Relative to your comments about requesting 3a full review and action, that is, again, our 2.206 4 petition process.

5 And you also mentioned that you had some 6specific information. Again, I'd just mention that we 7 do have a process called our allegation process, that 8 if you have specific information and concerns that you 9 need us or you're asking us to follow up on, that that 10process is available to you as well. It gets it into 11 the processes that exist currently.

12 THE OPERATOR: Thank you very much.

13Our next request now is from Rich Van 14 Every.15 Sir, your line is open.

16MR. VAN EVERY: Thank you. Yes, I 17 appreciate the opportunity to get to sharing. I'm a 18 concerned citizen in Southern California right near 19 San Onofre.

20 And my question is, given that you don't 21 see the shims or the canisters that are being gouged 22 upon loading as an immediate problem, at what time do 23 you foresee having a thorough inspection of the inside 24 of these canisters, given there's no practical way to 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 102 go about that?

1 I personally request that you consider 2 finding how the NRC can really stand for safety by 3 mandating thick-walled casks that can be, or any 4 supplement storage system that isn't a temporary 5 solution to this long-term issue that we're going to 6 have.7 So, I'm really hoping that you can put 8 more pressure on Holtec or other manufacturers to make 9 sure that no compromise is being made for safety and 10 stop it by these major corporations.

11 Thank you.

12 MR. LAYTON: Thank you for your comment.

13 Is there another question, Fran?

14 THE OPERATOR: Yes, we have a few.

15 Raymond Shadis, New England Coalition.

16 Sir, your line is open.

17 MR. SHADIS: Thank you.

18 In short, we concur with Holtec's warnings 19 regarding the errors and defects at the 20manufacturing/design interface. The unanalyzed 21 stresses introduced by metal forming, machining, and 22 plating are, in our opinion, a bad actor in operating 23 plant failures, not only in manufacturing, but in 24 repair, modification, and remediation.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 103 However, that said, quality control or 1 quality assurance has to remain primarily the 2unassignable responsibility of the licensee. Holtec, 3 I thought rather glibly, passed off responsibility for 4 defective pins or pin sockets or pin placement on the 5manufacturer or on their vendor. There is no way for 6 NRC to trace defects back to their source. Somebody 7 has to take responsibility at some weigh station in 8 the whole process, and I think that needs to be the 9 licensee.10 In that same vein, downstream of Holtec's 11 administrative and materials failures was Entergy 12 Vermont Yankee. If Entergy Vermont Yankee was using 13 a modified canister, they s hould have filed an 14amendment to their ISFSI license. As it happened, 15 they stopped loading canisters and inspected, decided 16 that what was fixable was fixed, and much didn't need 17fixing. And they simply moved on to complete loading 18 a full array of canisters.

19This should not have been allowed. NRC 20should look into it. Many small errors at the end of 21the day can equal a determinant one. So, these 22 formalities such as reporting and regulator review 23must be meticulously observed. That's our comment on 24 that.25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 104 And one final one on the pins, the locator 1pins. The MPC, as it was termed many times in today's 2discussion, means Multipurpose Canister. It is a 3canister that is intended for transportation. You 4know, it's in the name. We didn't see any analysis of 5 any potential isometric loading due to broken shim 6 pins during a transportation accident. It is unfair 7 to pass this on to the Department of Energy and to 8 other affected persons at the time this fuel is 9transferred for transportation. I don't know how that 10 works in NRC's game plan, but it really needs to be 11 considered.

12 Thank you.

13MR. LAYTON: Well, thank you for your 14 comments.15 Is there someone else on the line?

16THE OPERATOR: Yes. Charles Langley, 17Public Watchdog, your line is open. Charles Langley, 18 could you check your mute button, please?

19 (No response.)

20I'll move on. Chris Gorman, your line is 21 open, ma'am.

22MS. GORMAN: Yes. I'm a concerned citizen 23living within the 50-mile radius of San Onofre. I've 24 been following this for some time.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 105 My understanding is that the licensee is 1 planning to resume transferring these containers into 2 storage the middle of this month, and that's long 3 before you finish your evaluation on this issue.

4 And also, I'm very concerned about this 5retainer guide ring. I think that is an accident 6 waiting to happen, and that is both a design and a 7 manufacturing problem which is being overlooked, 8 because your comment a little while ago was that 9 you're focusing, when it comes to that retainer guide 10 ring, you're focusing, you're looking at that as a 11 misalignment issue, which I believe you're relating 12 that just simply to lack of proper training and 13operating procedures. But I really believe that that 14 is a definite both design and manufacturing problem.

15 It's an accident waiting to happen.

16 Right now, you have a container, a -- what 17 would you -- I guess the MPC sitting there above 18 ground waiting to be downloaded. I'm very concerned 19 about what's going to happen when they go to download 20 that, even if they do have better training, because of 21 the design.

22And also, the thing that I think is 23 critically important, a lot of what Mr. Singh was 24 saying about these pins and them not being necessary, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 106and that the cooling will happen in a, you know, 1 adequate way, that's all pretty much theoretical, as 2 far as I'm concerned, because unless you actually go 3 in there and look -- you need to go inside and 4actually inspect. And my understanding is that, once 5it's downloaded, they can't be inspected. That's a 6 real concern.

7 I think there's a huge, big issue here.

8 And if you just narrow it down to the fact that these 9 are just, oh, these unnecessary pins that don't matter 10 anyway, it's not a safety issue, and if you, then, 11 say, okay, well, we're just going to say this is okay 12 and move on and continue with the downloading, you're 13 really overlooking all the much bigger, major 14 problems.15 And I would like you to address these and 16 specifically answer me back about this retainer guide 17 ring and the fact that the, you know, the design and 18 manufacturing is substandard and about inspecting 19 inside.20 MR. LAYTON: Yes, thank you, Ms. Gorman.

21 What I would offer is that the issues that 22 you're bringing forward really have more relevance to 23 the enforcement action that is going to be proceeding 24 very shortly for the misalignment event at San Onofre.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 107 I think we have time for one more 1 question.2THE OPERATOR: Marvin Lewis of the public, 3 your line is open, sir.

4MR. LEWIS: Thank you very much. I 5 appreciate that you're keeping it open for one more 6 question from the public. This is supposed to go on 7until five o'clock. It's only 4:15 on my clock. I 8 sure would like to hear other questions from the 9 public.10My question is a simple one. First of 11 all, this Dr. Singh spoke for quite a while, over an 12 hour1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br /> from my watch, about various subjects. And one 13 of the subjects he brought up was very, very 14 interesting to me because I've been bringing it up a 15 lot, too; namely, the manufacturing stresses that 16 occur are not watched and not reported on.

17 I don't know if you have any idea what 18 manufacturing stresses are, but let me give you an 19example. Many people leave their car out at night, 20 come back in the morning, and the window is broken.

21 And sure enough, nobody has threw rock; nobody touched 22 that window. The manufacturing stresses were enough 23 to break a window on a car.

24 And I say that the manufacturing stresses 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 108 can do a heck of a lot. And since Dr. Singh brought 1 it up and pointed out how deficient the requirements 2 are on the guidances, namely, the books that the NRC 3 puts out to help manufacturers and licensees meet 4these safety requirements. They're called "guidances" 5 or "guides". And Dr. Singh pointed out himself that 6 there was not even one mention of manufacturing or 7 manufacturing defects in the whole schmear.

8 I think that's a pretty important thing to 9 look at, and I hope you will before we have an 10 accident, and it shows that something we didn't even 11 worry about, namely, hanging maintenance tags, can 12destroy an entire nuclear power plant. Well, residual 13 stresses can destroy a lot more than a simple 14canister, and we're not looking at that. And I really 15feel it's deficient. And so has Dr. Singh pointed out 16 it's deficient that you're not looking at the 17 manufacturing problems, the manufacturing stresses.

18 And I hope you will do so.

19 I'm not saying that's the only error, but 20 since that's an error that was pointed out by Dr.

21 Singh himself, I hope that you get after it and do 22 something about it.

23 Thank you.

24 MR. LAYTON: Thank you.

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 109 And we have exceeded our 30-minute 1timeframe for public comments. So, I would offer that 2 we are adjourning today.

3 Thank you.

4 (Whereupon, at 4:21 p.m., the proceedings 5 in the above-entitled matter were adjourned.)

6 7 8

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