ML18054A663
| ML18054A663 | |
| Person / Time | |
|---|---|
| Issue date: | 02/12/2018 |
| From: | NRC/OCM |
| To: | |
| kjd1 | |
| References | |
| NRC-3517 | |
| Download: ML18054A663 (73) | |
Text
Official Transcript of Proceedings NUCLEAR REGULATORY COMMISSIONTitle:Public Meeting on FY 2018 Proposed Fee RuleDocket Number:N/A Location:Rockville, Maryland Date:February 12, 2018Work Order No.:NRC-3517Pages 1-72 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 ON FY 2018 PROPOSED FEE RULE 4+ + + + +5 MONDAY 6 FEBRUARY 12, 2018 7+ + + + +8 ROCKVILLE, MARYLAND 9+ + + + +10 The meeting convened in the Commissioners' 11 Hearing Room at the Nuclear Regulatory Commission, One 12 White Flint North, 11555 Rockville Pike, at 1:00 p.m., 13 Maureen Wylie, Chief Financial Officer, presiding.
14 15 NRC STAFF PRESENT 16 MAUREEN E. WYLIE, Chief Financial Officer, OCFO 17 LUIS BETANCOURT, Facilitator 18 ALISON RIVERA, Facilitator 19 MICHELLE ALBERT, OGC 20 CAMILLA BARROR, NMSS 21 WILLIAM BLANEY, OCFO 22 JAMES COYLE, OCFO 23 LEIRA CUADRADO, NMSS 24 CRAIG ERLANGER, NMSS 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 BEN FICKS, OCFO 1 CHRISTINE GALSTER, OCFO 2 BRIAN HARRIS, OCFO 3 JO JACOBS, OCFO 4 ROBERT JOHNSON, NMSS 5 MICHELE KAPLAN, OCFO 6 CLARE KASPUTYS, OCM 7 JOHN MCKIRGAN, NMSS 8 KEVIN RAMSEY, NMSS 9 JENNIFER RAND, NMSS 10 SOLY SOTO, NMSS 11 RENU SURI, OCFO 12 RAM TIWARI, OCFO 13 JULIE WARD, NMSS 14 15 ALSO PRESENT 16 JOHN BUTLER, Nuclear Energy Institute 17 RICHARD FREUDENBERGER, Nuclear Fuel Services 18 HILARY LANE, Nuclear Energy Institute 19 JANET SCHLUETER, Nuclear Energy Institute 20 DOUGLAS WEAVER, Westinghouse 21 TONY ZIMMERMAN, Duke Energy 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 CFO Opening Remarks 2 Maureen Wylie...............4 3 Establish Ground Rules for Meeting 4 Luis Betancourt..............9 5 Key Features of the NRC FY 2018 Budget 6 Budgetary Considerations 7 Maureen Wylie...............12 8 Fuel Facilities 9 Craig Erlanger..............18 10 FY 2018 Proposed Fee Rule 11 Christine Galster.............30 12 Fee Transformation 13 Renu Suri.................41 14 Public Comments Submission 15 Maureen Wylie...............45 16Q&A.......................47 17 CFO Closing Remarks 18 Maureen Wylie...............71 19 Meeting Adjourned................72 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.2MS. WYLIE: Good afternoon. Thank you all 3for coming. I'm Maureen Wylie. I'm the CFO of the 4 Nuclear Regulatory Commission, obviously.
5 I'd like to thank everybody who's 6participating here either as a -- here in the room 7with us or by phone or on the webinar. I really 8 appreciate your interest in budgeting and fees. I'm 9 very excited to be presenting our FY 18 fee rule. I 10 believe that this is an important part of enhancing 11 our dialogue about fee setting and fee policy.
12 As industry has crested over a number of 13 years we've been accelerating the schedule associated 14with the development of the fee rule. As we did last 15 year, the -- having our meeting here in February is a 16 result of our publishing the rule early in January.
17 Unfortunately, uncertainty about appropriations leaves 18 it open as to when our final fee rule will be 19 published.
20 You do have our commitment, however, that 21 as soon as that is resolved we'll be working 22 expeditiously to attempt to meet our performance goal 23as soon as possible. So your input on the proposed 24fee rule is an important part of our process. 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 5 really appreciate it.
1 What are the big headline messages?
2 There's a substantial change in our hourly 3 professional rate in part because of the change in the 4 number of mission-direct FTEs that are used in the 5calculation of the rate. The rate itself increases 6 from $263 an hour to 270.
7 There's been also a small increase in our 8productive hours. As you know, we do that calculation 9 each year both for budget purposes and for the 10purposes of development of the rule. Christie Galster 11 will talk about that a little bit later.
12 Because of the changes in the hourly rate 13 some of our flat fees for licenses have also changed, 14 and we'll talk about that a little bit.
15So next slide, please. I want to cover 16 the agenda with you and introduce my fellow panelists.
17First to my right is Craig Erlanger. He's the 18Director of the Division of Fuel Cycle Safety, 19 Safeguards and Environmental Review in the Office of 20 Nuclear Material Safety and Safeguards. And because 21 of the interest in the topic of fees for fuel 22 facilities, we'll be discussing that business lines 23 budget for 2018.
24 Christie Galster to my left is the senior 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 6 accountant on our License Fee Policy Team. Christie 1is the numbers genius of the group. She'll discuss 2 important aspects of how we calculate fees and the fee 3 rule. Thank you very much for coming up today.
4 Renu Suri on my right is our fee 5 transformation product -- excuse me, project member 6 who will discuss our accomplishments associated with 7 fee transformation, both current and those activities 8 which are still on our schedule as planned.
9 And then of course because there is a 10 direct relationship between our budget and our fees 11 I'll be discussing generally how the budget in 2018 12 reflects our activities.
13 When we get to the question and answer 14 period Bill Blaney, all the way over on the left, who 15 is also on our License Fee Policy Team, will be 16 available to answer questions.
17 So thank you all to the panelists.
18 Next slide, please. Okay. For those of 19 you for whom this is new or is a refresher I want to 20 talk a little bit about the basics before we get too 21 far underway. The Omnibus Budget Reconciliation Act 22 of 1990, also known as OBRA-90, as amended, requires 23that we collect approximately 90 percent of our 24 current year appropriation in the year that it 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 7 enacted.
1 Every year we conduct a major rulemaking, 2 this administrative rule, within that fairly 3 compresses time frame, and we also do some of the 4basic things as we would every year. So we do data 5 gathering, both from the budget and gathering the most 6important and available workload data. We do some 7 significant calculations which are provided to you in 8 the work papers. We update the rule itself and then 9 we respond to your public comments. We collect fees 10 under 10 CFR Part 70; that is the actual fee-for-11 service, and under Part 71 for annual fees.
12So let's go to the next slide, please. I 13want to take just a moment to address the potential 14 for out-of-scope comments. Over time we've received 15 quite a few out-of-scope comments, but over the last 16few years we've noticed a significant decrease in 17those. And I believe that's a part of our dialogue 18 between the Agency, staff, and industry, both in 19general and with specific licensees. We also believe 20 strongly that as we continue to provide transparency 21 about fees understanding increases and therefore this 22 idea that out-of-scope comments are necessary will 23 decline. So I appreciate your role in that process.
24 Out-of-scope comments are generally those 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 that are not either associated with the calculation of 1 fees, changes to the fee regulation itself or to the 2fee schedules. Some common questions that we receive 3 are about additional necessary efficiencies in order 4 to achieve mission goals more cheaply. We're always 5 interested in that feedback; I'm happy to take that 6 input, but that's not going to be responded to as a 7 part of our rulemaking process.
8 We also get feedback about changes to our 9 overall regulatory process such as the common 10 prioritization of rulemaking, cumulative effects of 11 regulation and risk-informed performance-based 12licensing, and regulatory processes. Those in 13 particular are of important concern to the Agency, 14 both to the Commission and to the staff writ large.
15 This is just not the venue for dealing with them. I 16 urge you to seek out appropriate venues for that input 17 as you still have it or to send letters to the Agency 18 directly, because we are of course interested in your 19 feedback.20 In closing on this topic I just want to 21 emphasize that we are continually reevaluating our 22 fee-setting process, and so we are always interested 23 in your input about how we can make the process more 24 transparent, fair, and timely, both for your as 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 licensees and for us as the Federal Government trying 1 to get through this major rulemaking process.
2 As you make your questions and comments 3today I appreciate that. I would also ask you to 4 submit them for mally in our process so that we can 5 disposition them correctly.
6 And now I'd like to turn things over to 7 our moderator.
8 Please introduce yourself and give us the 9 ground rules for the meeting.
10MR. BETANCOURT: Well, good afternoon 11everybody. I would like to thank everybody to attend 12 the meeting today. My name is Luis Betancourt and I 13am one of the two facilitators today. Alison Rivera, 14 who's on that side, she's going to be doing a little 15 of the Q&A aspect.
16 So our purpose today is to have everybody 17 to have a very productive meeting to -- involve. So 18 what I would like to do now is to propose some of the 19 ground rules that we want to have.
20 First of all, let's talk about logistics.
21 You want to going to the restroom, please go to that 22 door and make to the left, and the ladies' will be on 23 the left; the guys' will be on the right.
24 In the case of an emergency, please follow 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 10 to the staff to the nearest exit on one -- on each one 1 of these sides.
2 As a general reminder there is no foods 3allow or drinks in this room except for water. For 4 the people in the room, please remember to -- there's 5 a sign-in sheet on the front. We would like for you 6 to also register.
7 Next what I would like to do is to go over 8 what can you expect for this afternoon.
9 So the purpose of today's meeting is to 10 talk about the updates to the fiscal year 2018 11proposed rules. The meeting is scheduled between 1:00 12 to 3:00.13 As a general reminder this is a category 14 2 public meeting where members of the public are 15 invited to participate at designated times in the 16 agenda. 17 There will be three presentations from the 18staff followed by the Q&A. And after that we're going 19 to open up the microphone and let people on the phone 20 for public feedback.
21 We would like to make every effort for all 22 of the stakeholders to have an opportunity to speak 23 today, so to help us please keep your questions brief 24 and also focus on the subject matter at hand.
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 Just to let you know, today is an 1 opportunity to provide formal comments to the proposed 2fee rule. During the presentation the staff will 3 provide the means to do that.
4 In the views that we have so many people 5 on the phone, instead of actually introducing 6 yourself, what I would like to do is for each of you 7 to email your name, position and organization to Bill 8 Blaney at williamblaney@nrc.gov.
9 Before we begin let's actually talk about 10some of the general background on the process. We 11 have folks participating in today's meeting by phone 12 and webinar, so it's very important to ensure that 13 everybody can hear and follow the meeting. For that 14reason I would like to for those in the room to use 15 the microphones, which it's this one over here, when 16asking questions. And for those in the audience, 17 please use the standing microphone.
18 The people that are on the phone, please 19remember to mute your phones. You can use star six to 20 prevent background noises for being a distraction.
21 When we get to the Q&A portion, we're going to open up 22 the microphone and we will give you specific details 23 on how you can actually indicate your questions.
24 There's also to the webinar, 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 12 answer -- there's a chat feature that you can send 1your questions and we will actually read the 2 questions, depending on what they are.
3 Finally, public meetings forms are located 4at the side of the ledges. Please be sure to fill one 5out. You can leave one with the NRC participants here 6or drop it in the mail. Your opinion is very 7 important for us to actually -- so we can improve our 8 openness and transparency in the public meetings.
9 Simply log on and locate this meeting under the public 10 meeting schedule and you will find the feedback form.
11 That being said, let's actually now start 12the public meeting. And I would like to turn to over 13 to Maureen so we can start doing the presentation.
14 Thank you.
15 MS. WYLIE: Thank you very much.
16So unique considerations. This will be a 17 little bit of an explanation of how we actually 18 receive our budget from the Congress and how that has 19 resulted in the numbers that you see in the proposed 20 fee rule today.
21 So let's start with our proposed budget 22authority. It is 967 million. That's based on a 23couple of things. It is our FY 2018 Congressional 24 Budget Justification amount, which is 952 million with 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 13 an addition of 15 million for the Integrated 1 University Program, which while it was not originally 2 requested in our budget, is currently reflected in 3 both the House and the Senate marks for our budget as 4 they exist today.
5 So we chose this number in order to give 6 you the largest possible number rather to have a 7 process where we'd have a low number of the proposed 8 and then perhaps a larger number during the final 9 process.10 As compared to the 917.1 million that we 11 received as an appropriation for 2017, the increase in 12 total budget authority of 49.9 million is due in part 13 to a request for 30 million in the Nuclear Waste Fund.
14 That is excluded from fee recovery.
15 The current CR is expected to conclude on 16March 23rd. We are very hopeful that we'll have a 17 final appropriation by then, but we can't say for sure 18until something actually happens. This has been quite 19 an exciting appropriations process for us this year.
20 So after we get to our -- through our 21 billing adjustments we would propose to collect $826.7 22 million in fees. That would be an increase of $20.8 23 million from our 2017 target of 805.9 million.
24 Why is that? Well primarily in 2017 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 14 appropriation of 917.1 was reduced from the amount 1 that we would have received because we also received 2 Congressional direction to use $23 million in prior 3 year unobligated carryover balances.
4 So we don't budget for carryover, so our 5-- the number that we use for the proposed rule, which 6 reflects the Congressional Budget Justification, does 7 not make an assumption about the use of these 8 carryover balances.
9 I just want you to be very clear that what 10 looks like an increase from a budgetary perspective is 11 also a fairly level level of effort activity from 2017 12 to 2018 with the major exception of our request for 13 Nuclear Waste Fund resources.
14 We expect based on the House and Senate 15 marks that we see on the Hill today that we will again 16 be directed to partially fund our activities through 17 the use of these unobligated carryover balances, but 18 we won't know how much or whether until we receive our 19final appropriation. Those balances reflect funds 20 that industry has already paid fee on, and so you'll 21 not be billed for those again.
22Next slide, please. So we have some 23 efficiency and workload changes that are inherent to 24 the 2017 budget -- excuse me, 2018 budget, and let me 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 15just start with Project Aim. So of course in last 1 year's fee rule we had an extensive discussion about 2 the re-baselining of our Agency's workload, reviewing 3 our current and project workload and developing lower 4 priority lists. That's activities that could either 5 be shed or performed or performed with fewer 6 resources.
7 The 2018 budget continues to reflect those 8 changes, both of the original roughly 39 million that 9 you rolled out in the 2017 budget, but additional 10 savings that were taken for the first time in 2018 to 11 bring our total amount to $48 million and 185 FTE.
12 We will close out our Project Aim 13activity, but we won't stop focusing on efficiency, 14effectiveness, and agility. I'm confident that at 15 Commission direction and in our processes we will be 16 continuing our efficiency seeking without having major 17organizational effort in that direction. At least 18 that's what I see today and what I would expect to see 19 going forward.
20So moving on from Project Aim and it's 21 overall budget impact I want to highlight some changes 22from the 2017 enacted budget for reactor safety.
23 Given that the reactor community pays for about 84 24 percent of our appropriation, it -- I'm sure 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 16 these are areas of particular interest.
1 So there were some increases in the 2018 2 budget because of increased workload in several areas.
3 One of the most important areas is risk-informed 4licensing actions and amendment requests. We received 5one subsequent license renewal application. And 6 because of how carryover was funded we have what looks 7 like increases in the research product line, but is in 8 fact a continuation of activity that was funded by 9 carryover but would now be funded by our budget 10 request.11 Those increases are partially offset by 12 decreases because we understand that through 13 efficiency seeking we can do what needs to be done 14from more of an add shed point of view. So we've had 15 either declining or completed workload in the 16 following areas:
17 We've completed our COL application 18 reviews. We've cleared the Fukushima Near-Term Task 19Force Tier 1, 2 and 3 activities. We budgeted for the 20closure of the Fort Calhoun Station. We've completed 21 the NFPA 805 license amendment requests that were 22budgeted in 2017. We completed certain license 23renewals. We eliminated potassium iodide as there 24 were no states this year that were expecting us 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 17replenish their requirement. And then of course we 1 still have those re-baselining efficiencies associated 2 with both the reactor oversight process; in particular 3 the inspection writing process associated with the 4 fielding of our new Reactor Program System, also known 5 as replacement RPS, and simplifications in the 6 significant determination process.
7Next slide, please. I'd also want to move 8on to materials and waste safety. That's about 20 9 percent roughly of our budget. And there were -- in 10 this area we had some significant decreases because of 11 declining or completing workload in the following 12 areas: 13 For fuel facilities we had a reduction in 14 inspection review of the mixed oxide fuel fabrication 15 facility and the Westinghouse license renewal.
16 Craig's going to talk a lot more about that in a 17 moment.18 For decommissioning and low-level waste we 19 had the completion of reviews for license amendments 20for Strata Energy and Jane Dough, reductions in 21 licensing work and efficiencies gained through the 22 realignment of the Uranium Mill Tailing Radiation 23 Control Act, UMTRCA, one of my favorite acronyms, 24 which primarily affected the Department of Energy.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 18 For spent fuel and storage and reactor 1 decommissioning we had reductions in the certificates 2 of compliance for DoE and decreased major 3 transportation licensing actions anticipated for '18.
4 We also maintained resources for the waste 5 control specialists' application in case that it was 6-- its suspension was lifted. We had 4,600 hours0.00694 days <br />0.167 hours <br />9.920635e-4 weeks <br />2.283e-4 months <br /> 7 expected for that activity and 1.2 million that would 8 have been associated with Part 170 billing. So it 9 does affect how bills are associated with the rest of 10 the class.
11 And then finally, for materials users 12 efficiencies gained through process enhancements and 13 re-baselining for the Materials Users Program was 14 reflected in those requirements.
15 And then I'm going to turn this over to 16 Craig so that he can talk about the fuels facilities 17 business line.
18 Thank you, Craig.
19 MR. ERLANGER: Thank you, Maureen.
20 Could we go to slide 11, please?
21MS. WYLIE: I'm going to -- ooh, there 22 should be --
23MR. ERLANGER: Slide 12? Perfect. Thank 24 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 19 MS. WYLIE: Okay. And then I'm going to 1 go back to mission support.
2MR. ERLANGER: Okay. Good afternoon 3everyone. My name is Craig Erlanger and I'm the 4 director of the Division of Fuel Cycle Safety, 5 Safeguards and Environmental Review in the Office of 6 Nuclear Material Safety and Safeguards.
7 This afternoon I'll be providing you with 8 an overview of the fuel facility line FY 18 budget.
9 If you'd turn to the next slide, please.
10 This slide lists the products within the fuel 11facilities business line. The fuel facilities 12 business line is composed of mission-direct resources, 13 mission-indirect resource, and some resources that are 14 excluded from the fee base.
15 As we would expect, the majority of the 16 business line resources are in mission-direct 17 resources and they fund the NRC's core activities 18 including event response, international activities, 19licensing, oversight, and rulemaking. Mission-20 indirect resources, they support the execution of 21 activities such as supervisors, training and travel.
22 They include staff again of supervisors, licensing 23 assistants, administrative assistants, and legal 24 counsel.25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 20 I would like to note that while generic 1 homeland security is vitally important and a vitally 2 important part of the fuel facilities business line, 3 it is excluded from the fee base, and that means that 4 it is not part of the 90 percent that the NRC 5 recovers.
6 In Christie Galster's presentation, which 7 is next on the agenda, she'll provide some additional 8detail about the resources assigned to the fuel 9 facilities business line products.
10Next slide, please. On this slide I'm 11 going to provide you just an overview of some of the 12 activities accomplished by the fuel facilities 13 business line. The fuel facilities business line is 14responsible for ensuring the safety and security of 15 fuel cycle facilities and greater than critical mass 16facilities. The business line leads the licensing and 17 oversight activities for these facilities as well as 18 the NRC's implementation of the domestic Material 19 Control and Accounting Program and the International 20 Safeguards Program.
21 This slide provides an overview of some of 22 the activities that are being conducted in fiscal year 23 2018. I'd like to draw your attention to the fourth 24 and fifth bullets on this slide to give you a little 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 bit more information related to them. The Part 40 1 facility that's being referenced is the Honeywell 2license renewal that is presently being reviewed by 3 the staff, and the fifth bullet is referencing the 4 Westinghouse Columbia fuel fabrication license renewal 5 that the staff is reviewing and anticipates being 6 completed in fiscal year 2018.
7 Next slide, please. The fuel facilities 8 business line experienced a period of significant 9 workload increase between fiscal years 2018 and 2013, 10 and we also saw a corresponding increase in the 11budget. And that's shown on the incline on the chart 12 that you're looking at right now.
13 Some of the reasons for the increase 14 included four major license applications reviews, 15 including mandatory and contested hearings, and those 16 reviews were related to the AREVA Eagle Rock facility, 17 Global Laser Enrichment, International Isotopes and 18the MOX facility. There were also two major 19 facilities that were under construction during this 20 time frame, and that is LES and MOX.
21 We also completed license renewals for 22 five major fuel cycle facilities: Honeywell, Paducah, 23 NFS, GNFA, and AREVA Richland, and also for five 24greater than critical mass facilities. During this 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 time period we also reviewed three new greater than 1 critical mass license applications.
2 Additionally, the events in Fukushima had 3 a direct impact on the work within the business line.
4 As many of you are aware, we issued Generic Letter 52015-01 related to natural phenomena hazards. That 6 effort involved inspections at each of the major fuel 7 cycle facilities and the conducting of inspection and 8 issuing a specific order for one of our licensees, as 9 well as the development of the Generic Letter and 10associated guidance. And lastly, we received a 11 significant amount of licensing actions by LES as the 12 facility was being constructed.
13 Between FY 13 and 2018 the business line 14 experienced a significant workload decrease and a 15 decrease in our CBJ numbers, Congressional Budget 16Justification numbers. Some of the reasons for the 17 decrease included a reduced level of licensing actions 18 and complexity, reduced construction inspections, 19 reduced effort on major renewals, as they're mostly 20 finished how, a reduced level of infrastructure 21 development, and a reduction in the number of 22 operating fuel cycle facilities.
23 Since 2011 six licensees have been removed 24 from the fee class. Portsmouth was removed in 2011, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 23 AREVA Lynchburg in 2012, General Atomics in 2012 as 1 well, and Paducah in 2015. I'd like to specifically 2 note that this year GE Vallecitos is now in materials 3 fee class 1-F and not the fuel facilities fee class.
4 And Centrus' Lead Cascade facility has entered 5 decommissioning and as such is not paying annual fees, 6 but they pay direct fees as appropriate.
7 Since the NRC formulates its budget two 8years in advance, it takes time to adjust when the 9 work doesn't materialize or changes. The NRC though 10 continues to actively evaluate resource requirements 11 and evaluate efficiencies that could reduce resources 12 needed and make corrections as appropriate during the 13 budget execution.
14 The NRC recognizes that Part 171 fees have 15also increased. We continue to right-size the fuel 16 facilities business line in the current and future 17years. As indicated on the right side of the chart 18 shown on the slide, the size of the fuel facility 19business line has decreased. You will see this 20 decreasing trend continue when the proposed FY 2019 21 budget numbers are released in the near future. NRC 22 will also continue to evaluate options through a 23 reduced percentage of the budget assigned to annual 24 fees. 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 Next slide, please. The fuel facilities 1 budget increased between FY 17 and FY 18 by $1.2 2 million, or 3.5 percent, due to a 1 FTE increase as 3 the result of a comparability adjustment between the 4nuclear material users business line to support an 5 increase in fuel facilities enforcement activities.
6 This change reflects where the work is being done and 7who should be charged for the work. And the other 8 cause of the increase was the cost associated with 9 fully-costed FTE.
10 I'd like to just reiterate that we 11 continue to evaluate NRC resource requirements to 12 address fact-of-life changes between budget 13formulation and budget execution. With that in mind, 14 the NRC continues to evaluate programmatic 15 efficiencies that have the potential to result in 16further resource reductions. And in that case I'm 17 referring to dollars or FTE.
18 Next slide, please.
19MS. WYLIE: Okay. Thank you very much, 20 Craig. I'd like to go back to slide 10.
21 MR. ERLANGER: I have one more slide.
22 MS. WYLIE: You have one more slide?
23 MR. ERLANGER: I do. One more.
24MS. WYLIE: Go back. I'm causing chaos 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 25 the team here.
1 What slide is it? Seventeen?
2 MR. ERLANGER: Seventeen.
3 MS. WYLIE: I thought you were done.
4 MR. ERLANGER: I just got one more quick 5 one.6 MS. WYLIE: Oh, okay.
7 MR. ERLANGER: Thank you. Over the last 8year the Office of Nuclear Material Safety and 9 Safeguards has been reevaluating our programs and fee 10 classes and considering alternate organizational, 11budget and fee structures. As part of that effort on 12 December 13th, 2017 the staff initiated external 13 outreach and conducted a public meeting to describe 14 the current method for calculating annual fees for the 15 fuel facilities fee class.
16 In this meeting the staff provided and 17 overview of the existing fuel facilities effort matrix 18 and a proposed alternative to the methodology used to 19 calculate annual fees. The staff sought feedback on 20 that method and discuss opportunities and options for 21 improvement. During the meeting the staff requested 22written comments from stakeholders. To date the staff 23has received eight letters. The analysis of those 24 comments are ongoing.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 26 In short, comments were mixed as to 1 whether the NRC staff should continue working on 2 changes to the methodology for calculating fees at 3this time. Some stakeholders indicated the staff 4 should continue with this effort while others stated 5 the staff should consider alternatives such as a 6 reduction of budgeted resources before changing the 7 current fuel facility effort matrix.
8 The staff will continue to evaluate the 9 comments received and will provide another opportunity 10 for stakeholder engagement at a second public meeting.
11 This meeting will be scheduled soon.
12 The staff intends to provide a 13 recommendation regarding the continued use of the 14 effort factors matrix. The goal would be to provide 15 that recommendation to support the FY 2019 proposed 16fee rule. I mention this; and I can build upon 17 Maureen's comment, I thought it was important to 18 address it in this forum, but none of the changes I 19 just discussed would impact the FY 2018 proposed fee 20 rule.21 Transitioning to the second bullet, in 22 order to increase transparency in 2017 the fuel 23 facilities business line provided data on the cost of 24 various licensing actions to licensees and publicly 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 communicated generic estimates and ranges for fees for 1 new types of work based on historical expenses for 2similar actions. The information is available on our 3 public web site and the link is provided on this 4 slide.5 And with that we can transfer --
6MS. WYLIE: I apologize for stepping on --
7 because obviously it's the most important message of 8 all.9 So the fact that we've received so much 10 input was actually very refreshing.
We really 11 appreciate the time that everybody took to respond.
12Now we'll go back to slide 10. Okay.
13Let's talk a little bit about agency support. It's 14 always an area that people are very interested in.
15 So agency support resources fund agency-16wide corporate infrastructure. So administrative 17 overhead such as financial management, acquisition, 18rent, those things that would be consistent whether 19 you're in the public or private sector.
20 It also funds certain policy support-21 related activity such as congressional affairs, public 22 affairs, legal, adjudicatory support to the 23 Commission, the Office of the Executive Director for 24 Operations, and the Commissioners' offices. We also 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 include in this category the resources for the Office 1 of the Inspector General.
2 Agency support component rose $3.5 3 million, or 1.1 percent, from 2017, mainly the result 4 of information technology increases for our 5 infrastructure services such as ADAMS, enterprise 6 search and our public web site, IT security and IT 7 strategic management such as consolidation of our data 8 centers and making key improvements to leverage 9authoritative data sources. If you're involved -- if 10 you receive an invoice, you're going to see some of 11 the outcome of that activity as a part of our fees 12 transformation activity.
13 These increases in corporate support were 14offset by a reduction of 101 full-time equivalents 15 which included a reduction of 73 FTE specifically 16 associated with right-sizing our corporate agency-wide 17 support activities in balance with the changes to our 18 programmatic workload.
19 Throughout 2017 we worked hard to get to 20 our funded workload numbers for 2018 and we ended up 21 executing a very small reduction in force, but because 22 of the intensive management that we provided over the 23 course of the year, while we had people take some 24 downgrades of their -- and changes in their positions 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 we were not required to separate anybody from the 1agency. It was a very strenuous process and we 2believe it was handled appropriately for the full 3 efficiency of the Agency.
4 The biggest change in the policy support 5 arena is an increase to support five Commissioners 6expected in 2018. Because of the use of carryover 7 resources in 2017 we only received an appropriation of 8$4.5 million for the Commission and we used 3 million 9 in carryover to fund the rest of the activities.
10There was a small increase in the Office of the 11 Inspector General associated with planned contract 12 audit of the Agency's 2018 financial statements.
13Next slide, please. So here we go in the 14 rest of our process. So of course as I mentioned in 15 the open we still have some budgetary uncertainty this 16 year and we still need to collect approximately 90 17 percent in the year of the appropriation. So we are 18 as motivated to get out a final rule as you are 19motivated to receive one so that you'll be able to 20 budget and execute appropriately.
21 If when the current CR expires and we --
22 and there -- we don't receive a full appropriation, 23 one of the other options could be that we would 24receive a full-year CR. Then the fee rule is going 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 30 look a lot like the 2017 fee rule. We -- as I said, 1we do hope to receive a full appropriation, but if 2 you're trying to do war gaming or just to anticipate 3 what your fees might be, you can also look at the 2017 4 fee rule.5 Our goal is to have the rule out as 6 quickly as possible. We would be challenged to meet 730 June if we get an appropriation on the 23rd. That 8 is our hope, that we would be able to process that, 9 but of course we can't go to a final rule until we get 10 a final action from the Congress.
11 So this is the end of the budgetary 12consideration segment. Let me just address how you 13 would submit your comments.
14Go to the next slide, please. Click 15through Craig. I liked how that line -- you're going 16 to do that afterwards? Okay.
17So next slide. Christie Galster is going 18 to go over how we actually calculate the rule.
19MS. GALSTER: Good afternoon. As Maureen 20mentioned, my name is Christine Galster. I'm a senior 21 accountant of the Licensee Policy Team at OCFO.
22 Today I'll be presenting an overview of 23the NRC's proposed 2018 fee rule. In this briefing 24 I'll be reviewing the fee rule process, calculation 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 31methods for both Part 170 and 171 with specific fee 1 class examples.
2Next slide. As stated in the 2018 3 proposed fee rule our budgetary authority is based on 4 the 2018 Congressional Budget Justification in the 5amount of 952 million. And as Maureen stated earlier, 6 are adjusted for the Integrated University Program of 7 15 million resulting in a total budgetary authority of 8 967 million, a rise of 49.9 million from the previous 9 year.10 Next slide. Here I'll review the budget 11 and fee recovery amounts for the 2018 proposed fee 12rule. As mentioned, the total budget authority is 967 13 million offset by excluded fee items for Nuclear Waste 14 Fund, generic homeland security, Defense Nuclear 15Facilities Safety Board, and WIR. This total 47.6 16 million, an increase of 24.5 million with the 17 inclusion of the Nuclear Waste Fund's 30 million this 18year. Multip lying our 90 percent required fee 19 recovery rate by the fee-based budget of 919.4 million 20 results in a total amount to recover of 827.5 million 21 that you'll see in the top circle there.
22 After the billing adjustments for Part 171 23 that we do for timing differences the amount to 24 collect from annual fees and fees for services 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 32 826.7 million, which is a 21 million rise from the 1 prior year.
2Next. As we discussed, NRC is required to 3 collect approximately 90 percent of the annual budget 4through fees. The remaining 10 percent that is not 5 covered is required to offset certain fee relief 6activities. Listed here are the fee relief activities 7shown in two groups. Group 1 is no existing licensees 8 to charge such as Agreement States which regulate 9 their own radioactive material licenses or 10 international conventions and treaties.
11 Group 2 is based on existing law or policy 12 such as research and rulemaking for material 13 decommissioning, and beginning in 2018 the fee relief 14 for non-military sites contaminated due to historic 15 uses of radium.
16 For 2018 the total fee relief activities 17 declined by 4.4 million in part from reductions under 18 scholarships and fellowships and work load for medical 19isotope production infrastructure. Due to the rise in 20 the budgetary authority the 10 percent fee relief 21allowance also rose by 2.5 million. This resulted in 22 reducing the fee relief surcharge from 2017 by 6.9 23 million, or 57 percent.
24 As a side note, the work papers last year 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 were modified to include details regarding assistance, 1 conventions and treaties, and specific cooperation 2 activities included within the international fee 3 relief category.
4Next slide. Another modification which 5 began in 2017 proposed fee rule and the associated 6 work papers was providing definitions of the hourly 7 rate components: mission-direct; mission-indirect; 8 agency support, which includes corporate support and 9the IG; and offsetting receipts, and included the 10 productive hours assumption using the development of 11 the hourly rate.
12 For the 2018 fee rule and the associated 13 work papers we propose to revise those definitions of 14 the professional hourly rate components for further 15 consistency and clarity, as well as propose to codify 16 associated definitions in the Title X Code of Federal 17 Regulations of Part 170.
18 In reviewing the professional hourly rate 19 methodology I'll discuss how the components are 20 utilized in calculating the proposed Part 170 hourly 21 rate. The professional hourly rates budget includes 22 all mission-direct salaries and benefits, mission-23 indirect program support, and agency support resources 24 totaling 790.3 million for the proposed 2018 fee rule, 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 34 which is an increase of 2.9 million, or 0.4 percent 1 from the previous year.
2 The hourly rate budget is then divided by 3 the mission-direct FTEs of 1,938 times the mission-4direct FTE's productive hours of 1,510. This 5 calculates a proposed 2018 Part 170 hourly rate of 6$270, an increase of $7, or 2.6 percent from the 7previous year. The hourly rate increase is primarily 8 due to the decline of 58, or 3 percent mission-direct 9 FTE from 2017, which is offset by the slight rise in 10 the productive hours.
11 The FTE rate at the bottom represents the 12full cost of an FTE. It's calculated by utilizing the 13 790.3 million budget that you see above divided by the 141,938 mission-direct FTE. For 2018 this rate 15 increased by 13,000 from the previous year.
16 This slide illustrates the hourly rate as 17 a formula with the budgetary resources in the 18 numerator and the denominator the direct number of 19 mission-direct FTEs times the productive hours, 20 equaling the 270 hourly rate.
21 Next? Continuing with our discussion on 22 Part 170 fees, in order to develop the estimated Part 23 170 billings by fee class we utilize actual billing 24 data from four quarters including the hourly rate 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 35charges and contract work. It's adjusted for workload 1 projections and the changes in the hourly rate.
2 In order to expedite the fee rule 3 publication the billing data used to estimate the Part 4 170 billings was changed in the 2017 fee rule and will 5 carry forward in the 2018 fee rules. The proposed 6 rule will utilize four quarters of the prior year 7 invoice data, while during the final fee rule will use 8 a combination of two years of the -- two quarters of 9the prior year and two quarters of the current year 10billing data. By giving up some precision in our Part 11 170 estimates we achieve the acceleration of the fee 12 rule publications.
13Next. Now before we start discussing the 14 categorization of Part 170 and 171 fees by fee class 15 I believe it's necessary to understand the formulation 16 of the fee-based budgets from the Congressional Budget 17 Justification. Beginning with the CBJ business line 18 budgets the program offices analyze in detail their 19 budgetary resources and allocate to various fee 20 classes and fee relief categories.
21 The chart here -- the chart above 22 illustrates where the majority of each business line 23 budget is allocated by license fee class. There are 24 five notable differences between the business lines 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 36and the fee class budgets. This is a different way of 1 monetizing the budget resources for fee billing 2purposes. These reconciling items consist of:
3 budgetary resources excluded from the fee calculation, 4 which is your generic homeland security; mission-5 indirect program support resources, which pulls into 6 your hourly rate calculation; business line resources 7 allocated to other fee classes and fee relief 8 categories; and budget resources allocated from other 9 business lines; and the utilization of a full-costed 10FTE. This crosswalk chart can be viewed in the CBJ as 11 well as the free rule work papers beginning in 2017.
12Next. Within this slide we will review 13 what transpires after the budgetary resources are 14 allocated to the power reactor fee class in three 15summarizing steps illustrating a five-year trend. As 16 you can see in step 1 the 2018 budgetary resource for 17 power reactors is 693 million, a decline from 2014 of 18 106.3 million and currently at a 22.7 million increase 19 from the previous year. This variance is mainly the 20 result of research activities requiring current year 21 funding rather than utilizing prior year carryover as 22 was the case in 2017, as Maureen explained earlier.
23 In step 2 the estimated fees for services 24 in 2018 totalled 247.1 million, a decline by 3.6 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 37percent, or 9.2 million. The outcome of SCG&E's 1 decision to abandon the construction of two new 2 nuclear units at VC Summer Nuclear Station.
3 The results in step 3 totalling 451.3 4 million show an increase in the overall recovery 5 annual fee amount by 5.8 percent, or 24.8 million.
6 Divided by 99 reactors equals a total annual fee per 7 reactor of 4,549,000, an increase of 251,000.
8Next slide. For our next annual fee 9 calculation we'll discuss the fuel facilities fee 10class. In step 1 the 2018 budgetary resources 11 allocated to fuel facilities class was 35.1 million.
12 This is a 26 percent, or $12 million decline from 13 2014, however, when compared to 2017 it is a rise of 14 1.2 million, or 3 percent resulting from a change of 15 1 FTE in the amount of fully-costed FTEs.
16 The estimated Part 170 billings you see in 17 step 2 totaled 9.3 million, a slight decline of 18 300,000 or 3.2 percent due to two major completions 19 with mixed oxide fuel fabrication facility structure 20 review and the Westinghouse's license renewal.
21 Although the remaining overall annual fee 22 recovery amount rose by 800,000 in step 3, with the 23 departures in 2017 of Lead Cascade in the first 24 quarter and the downgrade of GE Vallecitos during 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 38 fourth quarter of 2017 the 2018 increased annual fee 1 recovery amount was distributed by two less licensees 2 resulting in a 6.5 percent rise in the annual fees for 3 that fee class.
4 Next. Within this slide I'll review the 5 spent fuel storage and reactor decommissioning fee 6 class over the past five years. Comparing 2014 to 7 today's 2018 proposed fee rule budget the increase is 8 1.8 million while the estimated Part 170 billings rose 9by 2.9 million. This resulted in a five-year variance 10 of the annual fee recovery amount declining by 100,000 11 along with decline with one licensee.
12 Based upon the 2018 fee rule of 34.6 13 million the budgetary resources increased when 14 comparing to the previous year by 5.1 million due in 15 part to some activities requiring current year funding 16 rather than utilizing $1 million of carryover as was 17the case in 2017. In addition, 2018 resources 18 supported two environmental review applications and 19 efforts updating and consolidating Standard Review 20 Plans.21 The Part 170 estimated billings of 8.3 22 million rose slightly by 400,000, which was 23 anticipated to be 1.2 million higher if waste control 24 specialists had not suspended their environmental 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 39review application. The remaining fee recovery amount 1 of 27.4 million increased by 4.4 million as compared 2 to the previous year. Divided by 122 licensees, the 3 rise in annual fee per license rose by 37,000 4 resulting in a total 2018 annual fee of 225,000.
5Next. The next annual fee calculation 6 we'll be discussing today uranium recovery fee class.
7 this fee class is quite unique and it's a combination 8 of two uranium recovery groups making the calculations 9 a bit more complex than our early examples. Since 10 2002 the NRC has allocated the total annual fee amount 11 for this fee class between the Department of Energy 12 UMTRCA Program and the remaining UR licensees.
13 As illustrated by the chart the 2018 14 budgetary resources declined by approximately 760,000 15 due to reductions in licensing, workload and 16realignment of the UMTRCA Program. The estimated Part 17 170 billings overall decreased by 510,000 as a result 18 of completed reviews for Strata Energy and Jane Dough.
19 When comparing 2017 to 2018 proposed the allocated 20 amounts so to be recovered through annual fees remains 21 stable for the remaining UR licensees.
22The last fee class I'll be reviewing is 23the material users fee class. This year we propose to 24 increase the fee subcategories from one established 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 402015 to a total of eight this year. The NRC staff 1 determined in order to accurately reflect the cost of 2 service provided on licen sees with six or more 3 locations compared to licenses with less required 4establishment of additional subcategories. The 5 subcategories were created for licensees under fee 6 categories 3A, 3B, 3C, 3O, 3P, 7A and 7B.
7 The changes for the subcategories include 8revisions to regulations 10 CFR Part 170 and 171. For 9 each original fee category two subcategories were 10 created for location sites between 6 through 20, and 11 greater than 20.
12 Now during 2018 the budgetary resources 13 had a reduction of approximately 700,000 due to 14 process enhancements and re-baselining of the 15 Materials Program under Project Aim along with 16 decreases in the low-level waste surcharge and fee 17 relief adjustments contributing to the reduction of 18 1.2 million in the annual fee recovery amount. With 19 approximately 55 material user fee categories 20 including the new subcategories 32 categories remain 21 stable or had reduced annual fees for 2018, ranging 22 from 0 to 21 percent.
23 This concludes my presentation on the 24 overview. Thank you very much.
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 MS. WYLIE: Thank you, Christie.
1 So now we're going to take a short break.
2 We've given you a lot of numbers and a lot of details, 3 so we want to give you a chance to think about that.
4 And I'm just looking for the time we'd like you to 5come back. The break is 10 minutes. Thanks very 6 much. 7 (Whereupon, the above-entitled matter went 8 off the record at 1:51 p.m. and resumed at 2:00 p.m.)
9MS. WYLIE: Okay. Thank you very much for 10returning so promptly. I really appreciate it. We 11 have one more short presentation before we open the 12 microphones for the question and answer period.
13 I'd like to turn the presentation over to 14 Renu Suri, who's going to talk about fees 15 transformation, and then I'll speak to how to take 16 your comments.
17 MS. SURI: Thank you, Maureen.
18So my name is Renu Suri. I'm here to tell 19 you about the Fees Transformation Project.
20 A brief history first: So based on 21 comments received from you all and other external 22 stakeholders the Project Aim SRM, or the staff 23 requirements memorandum, included the Commission 24 direction to simplify how NRC calculates its fees, 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 improve transparency of the fee setting process and 1 improve the timeliness of NRC's communications about 2 the fees.3 So the Fees Transformation Project is the 4 Office of Chief Financial Officer's response to this 5Commission direction. The goal is to make the fee 6 process more transparent, timely and equitable within 7 the statutory requirements of the Independent Offices 8 Appropriation Act, which is the IOAA, and the OBRA-990. So I just wanted to point out that we are 10transparent, timely and equitable right now. We're 11 trying to be more.
12 So the Fees Transformation Project 13 includes administrative or process changes and policy 14changes for the fiscal years 2017 through 2020. In 15 October of 2016 the Commission directed the staff to 16 complete these fee setting process improvements as 17soon as we could. So during this presentation I will 18 give you examples of some improvements and how they 19 have met the goals that we have set for ourselves.
20 So process improvements completed in FY 212017. I'm glad to say we completed all 14 of the 22 activities that we had put ourselves for, and in fact 23 we accelerated three from FY 2018. These were all 24completed by September of 2017. And some of these 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 improvements were adding additional content to our 1 Congressional Budget Justifications to help licensees 2 understand how the planned workload impacts fees.
3 We also put in actual amounts, execution 4 amounts comparing the budget to the actual amounts in 5the Congressional Budget Justification. And we posted 6 the estimated cost of various licensing actions for 7 both reactors and Materials Program on the NRC's 8 public web site. Craig referenced it when he talked 9 about the fuel facilities estimates that are on the 10 fuel facilities web page.
11 So we -- there is another place that you 12 can go to see where we have posted all these 13estimates. If you go to our license fees web page, 14 under the fee rule we have a table of accomplishments 15 and on the table of accomplishments we have added the 16web pages where you can go. So the top line of our 17 web page is on this slide. And all these actions 18 that I just spoke about improve the transparency of 19our fee setting process. We communicated to you as to 20 how we do it.
21 There was another accomplishment that we 22 had in 2017, and that was to facilitate publishing the 23 proposed and final fee rule earlier. We did that in 242017. We're going to continue for 2018. And to do 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 that we modified the way we calculate our Part 170 or 1our full-cost fees. And Christie had pointed that out 2 in our presentation.
3 Improvements to be implemented in fiscal 4year 2018. So in the current fiscal year, which we 5 are in 2018, these are the improvements that we are 6planning to do: We're going to revise the methodology 7 of charging overhead time for project managers and 8 resident inspectors.
9 We are going to add identification of each 10NRC staff member on the invoice. In fact, our latest 11invoices that went out in January had not only a 12 clearer description of the -- our activities, they 13 also included the staff name of folks -- staff, NRC 14 staff who worked on the project.
15 We also want to provide the stakeholders 16 insight into our annual fees versus user fees and we 17 are going to do that by adding a table to our FY 2018 18 final fee rule which will give you the amounts that we 19collected for Part 170. That's the user fees and the 20 annual fees by fee class.
21 And the FY 2019 Congressional Budget 22 Justification which was released today includes in 23 each business line chapter a statement about how the 24 project line impacts the annual fees.
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 For 2019 and beyond the major improvements 1 that we are looking at; these are not all of them, but 2 the two major ones that I wanted to talk about, is NRC 3 is considering alternatives to accelerate the 4 transition to e-invoicing, an electronic billing 5system. And we have developed a project plan for the 6 flat fees pilot, and that is scheduled to be completed 7 by September 2020. So the e-invoicing we think will 8 help with our timeliness and the flat fees will help 9 with our equitability goal.
10 That's all I have.
11 MS. WYLIE: Thank you very much, Renu.
12 Well, so let's go to the slide where we 13discuss how to submit your comments. That's slide 12.
14No? Thirty-five? Okay. Great. One of these days 15 I'm going to figure out the numbering.
16 So the deadline for submitting your formal 17comments is the 1st of March. You may submit your 18 comments by any of the following means unless you --
19 let's just -- so go to the Federal Rulemaking web 20site. The docket that you would refer to is attached 21here. Questions about the dockets go to Carol 22 Gallagher, and her number is listed as well as her 23 email. 24 For technical questions please contact 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 anyone on my staff, if you have an issue, and we'll 1make sure we get you in the right direction. And then 2 there is an email for rulemaking comments, and you may 3 also fax them to our executive secretary as listed 4 above. 5 Okay. Next slide. Go back one. Sorry.
6 So you can -- if you're still inclined you can use 7snail mail. The address is listed here. You may drop 8them off by hand. We have a mechanism to allow that.
9Of course that's from 7:30 to 4:15. And then of 10 course you could look at the rule and there will be 11 some additional information.
12 So for further information about this or 13 any other aspect of our fee recovery Brian Harris is 14 our new acting team lead for license fee policy 15 activity here in my office. Michelle Kaplan, who is 16 the former team lead is off on a special assignment.
17 We look forward to your inputs.
18You can go to the next slide, please. All 19 right. And of course I am always interested in your 20 views and your feedback, so please feel free to 21 contact me directly. That number rings in my office 22and of course my last name is spelled W-Y-L-I-E. I 23look forward to receiving emails. And we also have 24 addresses for Craig and the members of my Licensee Fee 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 Policy Team.
1Next slide, please. Q&A. The floor is 2 yours.3MS. RIVERA: Good afternoon everyone.
4 Again, I'm Alison Rivera and I'll be conducting the 5Q&A portion of this meeting. Thank you for your time 6 and attention.
7 Again, my goal during this period is to 8 collect comments and questions on the presentations 9that you've heard. Maureen just went over how you can 10 formally submit comments on the proposed rule itself.
11 Again, my goal is to make sure that all 12 the stakeholders that are interested in providing a 13 comment or question have an opportunity to do so, so 14 if you could keep your comments brief, that would be 15 great. 16 While we're opening up the phone lines I'd 17 like to check in with those in the audience to see if 18anyone has a question. I can either provide you this 19 hand-held or you can use the microphone to the side.
20 And those on the webinar are also welcome to use the 21chat feature. And may I ask that you provide your 22 name and affiliation first. Thanks.
23MR. BUTLER: Thank you. John Butler with 24NEI. Maureen, thank you for responding to our request 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 to accelerate the process for the fee rule.
1 Unfortunately we're both victims of that success.
2 With -- there isn't a final appropriation for '18, so 3 there's 100 percent chance that what's in the proposed 4 fee rule will change. Is there any possibility of 5 reissuing for comment once there is a final 6 appropriation for '18?
7MS. WYLIE: So unfortunately we would not 8 be able to get the full administrative rule process 9completed if we reissued a second proposed rule. Our 10 challenge is that we need to give 60 days for --
11 between the publication of the final rule and when the 12 rule actually becomes effective, because the rule is 13 a major rule.
14 We're also driven by our statutory 15requirement to collect within the year. So I have to 16 be -- using last year as an example, we published at 17 such a time that we had 26 days to collect between the 18 day the rule became effective and the end of the 19fiscal year on 30 September. So that's one of the 20reasons that we use the highest possible number. It's 21 very clear that our appropriators, when you look at 22both the House and the Senate marks, are looking at 23different ways to budget us. So we wanted to make 24 sure that people knew what the worst case scenario 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 49could be. I just don't have a path to doing a second 1 proposed rule and stay on time for OBRA-90.
2MR. BUTLER: If I could follow up then, is 3 there a way to provide some information -- I don't 4 know how to phrase this. If there were a 10 percent 5 change between the -- what's in the current proposed 6 fee rule and the final appropriation, would there be 7 simply a 10 percent change across the board and the 8 Part 171 fees? I suspect not. But some guidance on 9 what to expect once a final appropriation is made.
10 MS. WYLIE: Unfortunately, when we see a 11table in the -- let me put it another way: One of the 12 reasons that the world is complicated between budget 13 and fees is that we budget at the business line and 14 program level and we execute the fee rule in 15categories and classes, right? So there -- we've 16 spent a significant part of our time today talking 17 about the differences and the reconciling differences 18 between the budget and the fee rule.
19 We actually receive our budget in control 20 points which are different yet again from how we do 21both our budget and the fee rule. So even if I get a 22 10 percent across the board reduction, how that would 23 actually apply by class might vary. Typically, if I 24 get a 10 percent reduction, it's not taken simply 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 50across the board. There are some reductions that the 1Congress may take or not take. So usually by the time 2 I do the new calculations to support the new 3 appropriation, I'm on a pretty tight timeline to get 4 the final fee rolled out anyway.
5 So as much as I'd like to provide you with 6 an additional calculation, particularly in this year 7 where we're already looking at no earlier than March 8 23rd, I just don't have enough time in the fiscal year 9to get all that work done. And it usually takes us 10 some time, which would be expressed as our 11 implementation planning process, to translate what we 12 receive from the Congress in terms of control points 13 to programs, product lines and products here in the 14 Agency. 15 MR. BUTLER: Thank you.
16MS. RIVERA: Thanks. Was there other 17 questions in the room?
18MR. WEAVER: Hi, I'm Doug Weaver with 19 Westinghouse. Thank you for taking my questions.
20 You mentioned that this -- in the ground 21rules a lot of this a lot of the content is off 22limits. Do you have a suggestion about how should the 23 industry, or anyone for that matter, provide content 24on the -- like for example, '19 or '20. What's 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 51 opportunity.
1 MS. WYLIE: So of course if you submit a 2 comment that's not germane to the fee rule, we just 3won't respond to it in the rule. It doesn't mean that 4 we won't try to disposition your comment 5 appropriately. We have received correspondence from 6 both NEI and from companies independently, 7 correspondence that's sent to the Commission, 8 correspondence that's sent to the EDO where we try to 9 respond to your questions or comments.
10 So the real purpose for articulating the 11 issues around out-of-scope comments is to reduce the 12 number of non-germane things that we're trying to 13 dispose in the rule process given the short timelines 14that are available. So if Westinghouse has particular 15 issues of concerns related to efficiency, 16 effectiveness, particular processes, if we have a 17 regulatory activity open at the time, of course you 18 can respond to those regulatory opportunities or you 19 can address your feedback to me, to the EDO, or to the 20 Commission as you deem appropriate.
21 MR. WEAVER: Okay. Thank you. And if I 22 could have one question, please?
23 MS. WYLIE: Sure.
24 MR. WEAVER: It was on slide 28 from 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 52 presentation.
1 MS. WYLIE: Let's go to 28.
2MR. WEAVER: It was the example for the 3 fuel -- yes, that's it.
4 MS. WYLIE: Okay.
5MR. WEAVER: If you look at those numbers 6-- I looked at the fee rules going back to 2008, the 7 final fee rules --
8 MS. WYLIE: Thank you.
9MR. WEAVER: -- and it was fun. It was 10fun finding them, for one. But what you notice is the 11 Part 170 billings as a function of the top line used 12 to be -- in the years 2008 to 2012 used to be close to 1350 percent of the top line. Now you can see that 9.3 14 in the proposed rule is only a little more than a 15quarter. And so what that means is the staff's direct 16 effort is -- other than what gets billed to us in 17inspection and licensing is invisible. So three-18 quarters of the staff's effort we don't know what 19 you're doing. The work papers don't speak to it.
20 I just looked at the '19 Congressional 21Budget Justification. It doesn't say what I'm buying 22 for my annual fee, because in the case of Westinghouse 23 our annual fee has gone from $900,000 in 2008 to 2.8 24million. At the same time the level of effort that'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 53 being directed to billable activities keeps shrinking.
1 So -- and so I'll -- we'll write 2 separately on why -- the content, but I guess is it 3 fair to say -- can we get more meat into the future 4 work papers or in the Congressional Budget 5 Justification that explains what am I buying with that 6 three-quarters of the staff's time that's not billed 7to us on an hourly basis? Is that -- I hope it's 8 clear.9 MS. WYLIE: So let me start and then I'm 10 going to turn to Craig --
11 MR. WEAVER: Sure.
12MS. WYLIE: -- and see if he has anything 13 additional to add.
14So just want to remind people that the 15 Congressional Budget Justification for this meeting is 16the '18 budget. Okay? So this is one of the 17 challenges that the budgets and the fee rules are not 18 quite at the same schedule. We'll blame that on the 19 federal budgeting process being different than what we 20 do for fee purposes.
21 So we take your feedback about additional 22 information in the Congressional Budget Justification.
23 If you go back even to '16, you'll see that there's 24 been substantial increases in the amount 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 54information. This is a task that we don't take 1lightly. And we also recognize that the work in each 2 of the fee classes is different, and so it somewhat 3 defies standardization.
4 Having said that, what we talk about in 5 terms of workload is typically we tend to err on the 6 side of this is the Part 170 activity rather than a 7 more fulsome explanation of the Part 171-funded 8activity. So broadly speaking, infrastructure 9 associated with support of the Part 170 goes into the 10 rate, so that's one of the reasons that the rate for 11 professional hours is going up. But in specific I 12 would turn to Craig to talk about some of the non-170 13 activities in his business line.
14 MR. ERLANGER: Thanks, Maureen.
15Thank you for the comment, Doug. And 16 anything we can do to add transparency and explain 17those fees we want to do that. As Maureen mentioned, 18 over the past couple years we've tried to increase the 19 level of detail that's been provided.
20 To reflect on some of the comments I made 21 in my presentation, the work within the business line 22itself has changed. It does take a bit of time to 23adjust to those changes. And those changes don't 24 necessarily need to be work that didn't materialize.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 55It could have been the change in the type of work. We 1try to do that. We try to do the executionary 2adjustments. And if there's areas for improvement and 3clarity as to what is being covered by those fees, 4 we'll endeavor to provide that clarity.
5 I would just say that is our goal and I do 6 appreciate that the cost of an FTE has increased and 7 that the fee billable work across the fuel facilities 8business line has had a decrease. So we are aware of 9 it and we're adjusting the program.
10The last comment I'll make is while the 11numbers from the CBJ differ from the numbers in the 12 fee class, I would hope that the chart was 13 representative of the overall size of the program and 14 the adjustments we're making to reflect the work we 15have in house, and we'll continue to do that. And 16 when the budget for FY 19 is released in a bit, you'll 17 see some of those similar trends continuing.
18 MS. WYLIE: It's out.
19 MR. ERLANGER: It's out already?
20 MS. WYLIE: It's out, yes.
21 MR. ERLANGER: Okay. And you were going 22 to say, Maureen?
23MS. WYLIE: Let me just add something 24specific to labor costs. So the fully-costed rate 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 56a construct for the fee rule, but within the budget 1 one of the conundrums that we face is that even as we 2 decline in size as an agency and attrit people and not 3 hire, the average cost of our individuals has gone up.
4 The FY 18 budget has within it a 1.9 percent pay 5raise. That's particularly expensive for the NRC 6 because most of our staff is in high-cost areas like 7 here or King of Prussia.
8 There's also the inevitable consequence 9 that I think industry also feels, which is the growth 10 of certain benefit costs, primarily health care. So 11 as long as we continue to have an aging FTE 12 population, that's going to have the consequence of 13increasing our labor costs. So that's one of the 14 things that you see in all of our fee classes, that 15 even though we are attriting; and I would talk about 16 agency support and its impact, we're attriting FTE, 17 but the ones that remain grow more expensive.
18So these are some of the pressures that 19 cause us to continually both put pressure on Craig to 20 find new ways to do his work, but broadly through the 21 Agency have efficiency seeking. Because even though 22 we are getting more efficient, it just costs more 23 every day to do our business. So just like in the 24 private sector we are continuing to look for ways 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 57 reduce our costs.
1 MS. RIVERA: Thank you. I have one more 2 in the room.
3MR. FREUDENBERGER: Thank you. Kind of 4 continuing that same line of discussion. My name is 5Rich Freudenberger. I'm the Safety and Safeguard 6 Director at Nuclear Fuel Services, so I have the honor 7 of representing one of the two facilities licensees 8that has the highest annual fee. So -- and we're one 9 of a smaller licensees. Came from the power reactor 10 side and kind of understand the finances there a 11 little bit, so it does put a particular strain.
12 And what I would like to do and talk on a 13 little bit is to compare the same slide we were just 14 talking about, slide 28, and the variability over the 15 years of the percent changes.
16 MS. WYLIE: Yes.
17 MR. FREUDENBERGER: And then you compare 18 that to slide 15, and slide 15 shows what I assume to 19be changes that were based on direct costs. So I 20 would say we're pretty transparent relative to the 21 direct cost.
22 The indirect cost is the -- reflecting my 23 colleague's comments, is where we're seeing that we 24don't -- we're looking into an abyss. We don't see 25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 58what we're buying with our money. So between BWXT --
1 which I'm actually an employee of BWXT assigned to 2 NFS. I'm representing about $15 million a year that 3 I can not explain three-quarters of that to my 4 customers and they're looking for three to five-year 5contracts with stable prices. And when you look at 6 the variability in what our fees are during that time 7 frame, that's the reality of the challenge that we're 8 facing based on how the fee rules are -- is currently 9 implemented and how this process is currently working.
10MS. WYLIE: So we -- so first of all, 11thank you very much for your input. As you could tell 12 from the previous work that Craig talked about, we are 13 actively looking for ways to make the process as 14 transparent as we can and as fair as we can.
15 What you're really saying is we need to 16 find ways to find additional budgetary efficiencies so 17that you pay less. And we accept that. There are 18 some increases in efficiencies in the 2019 budget.
19 Those pressures will continue as a part of our normal 20 efficiency seeking. They will -- they are also an 21 area of particular concern to the Commission and to 22 the senior leadership in the Office of the Executive 23 Director for Operations.
24 So Craig is getting a lot of help these 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 days in searching for ways to find -- to make his 1budget smaller. And we take your feedback. There is 2a high degree of variability. You have a small number 3of licensees in your case. Any changes in any way 4causes volatility. In that you have commonality with 5the UR community. But the fact that we're having a 6 special section on it here in this fee meeting is 7 intended to be an indication to you of the high 8 priority that we place on the issues and our 9 commitment to continue to work them. Okay?
10MR. ZIMMERMAN: Thank you. My name is 11Tony Zimmerman. I'm with Duke Energy and I appreciate 12 your taking the time for this session today.
13 Along the lines of the questions asked 14 earlier about increasing costs of labor and the cost 15 of doing business with an aging workforce, looking at 16the corporate support functions in the work sheets 17 that represents about 30 to 32 percent of the Agency's 18 overall budget, and the worksheet showed a reduction 19 of -- I believe it was 95 FTE, and yet there was an 20 increase in overall costs of about $21/2 million when 21 you exclude OIG.
22 And so I understand your comment earlier 23 about salaries and benefit costs increasing, and there 24 were other charges associated I believe with rent 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 60 IT upgrades --
1 MS. WYLIE: Yes.
2MR. ZIMMERMAN: -- that offset the loss of 3head count. And so is the Agency doing anything to 4 look at their overall corporate structure or support 5 size or organization to try to make sure it's the 6 right footprint, the right total FTE to minimize the 7 fees passed onto us? Because when the industry sees 8 a reduction in FTE but an increase in fees, that's 9 very difficult to understand when we're facing a 10 climate where plants are shutting down early. Thank 11 you.12MS. WYLIE: I particularly appreciate your 13 concern. I'm actively involved in the budget review 14 for corporate support, probably more so than any other 15 business line.
16 We have just completed two significant 17studies of corporate support. The first that resulted 18in the -- the total number for corporate support is 19around 80. And then another study that is implemented 20 in the FY 19 budget where we also reduced the mission 21 support segment within the programmatic business 22lines. An so for now, given where we are with re-23 baselining and the other Project Aim activities, we 24 think we're about right-sized.
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 The place where we think we'll gain the 1 most efficiency as -- is as we go through our new 2 acquisition strategy associated with IT 3infrastructure. The acronym is GLINDA. In all candor 4 I can't ever explain what that means, but it's an 5 extensive new us of the GSA Schedule 70 contracting 6 process where we use government-wide category 7 management in order to buy our -- to leverage the 8 buying power of the Federal Government to get 9 significant efficiencies in how we buy our IT 10 infrastructure.
11We also have a new process within that 12 where we have -- instead of one large contract per 13 seat we now have a setup where we have internal 14 competition between a number of qualified contracts so 15 that we get competition on every aspect as we let 16 those task orders. So we think the next big area of 17 efficiency will continue to be in information 18 technology.
19It's a conundrum. We know we need 20 qualified trained corporate support employees to 21properly execute our responsibilities. As you're 22 probably well aware from your own corporate 23 governance, we perform a compliance function within 24the Agency as well as a facilitation function. But 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 62 do want to do it for less. With our aging workforce 1 that's harder to do, but we remain committed to 2 efficiency seeking overall.
3So as we go through our agility efforts 4 within the programs and that results in savings in 5 programs, we will look what -- we will re-look what 6the right footprint is for corporate support. Will we 7get big step function adjustments? In the short term 8 that's unlikely, but we're also harvesting single FTE 9 as we find them because we are looking for ways to do 10 it cheaper.
11 While it can be satisfying to have a rule 12 of thumb that says corporate support ought to be about 13 30 percent, in practice that's often a sticky 14relationship. You have changes in a program area.
15 You implement them. You determine you need less and 16then you have a change in corporate. That's a 17trailing change rather than a leading change. So it's 18 a rough-order-of-magnitude kind of estimating strategy 19 rather than a precision machine.
20MS. RIVERA: I'd like to take a moment and 21 just check in with the phone lines and see if there's 22 any licensees on the phone line that had questions.
23 (No audible response.)
24 MS. RIVERA: Hearing none, are there 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 63 members of the public on the phone line that have 1 questions?
2 (No audible response.)
3MS. RIVERA: Turning back to the room, is 4 there anybody that would like to follow up?
5MR. BUTLER: Thank you. John Butler 6again. One of the differences I saw between the 7 proposed fee rule and the 2017 fee rule was there 8 seemed to be an increase in non-labor, mission-direct 9resources. I may have heard the answer to this 10 question when you spoke earlier in that what's in the 11 proposed fee rule now doesn't take into account the 12 use of carryover funds, but can you give us a little 13 bit of info of how much of that increase is due to 14 that reason and how much is a true increase?
15 MS. WYLIE: So Christie's going to stand 16by to help me if I get this wrong. So $23 million is 17 the amount of carryover that we used in '17, so the 18bulk of the increase is related to that. Remember, 19 you have to take off the top the $30 million 20 associated with the Nuclear Waste Fund and the other 21 smaller off-the-fee-base appropriations that we 22 receive.
23 There are some minor non-offset costs that 24 are almost entirely associated with increasing FTE 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 costs because again, we had a 1.9 percent pay raise, 1 we had significant increases in benefits and locality 2 pay. So we have attempted to offset those increases 3through our efficiency seeking. The vast majority of 4 the growth is associated with carryover.
5MS. RIVERA: Any other questions in the 6 room?7MS. SCHLUETER: Janet Schlueter, NEI.
8First of all, thank you to Craig for holding the 9 December meeting where we talked about the fuel cycle 10 matrix, and I think we're going to have a follow-up 11meeting to that. And so we appreciate that. We 12 gained some additional insight from that conversation, 13 which I think plays into Doug and Rich's comments.
14 And thank you, Maureen, for responding in 15 such a direct manner, reading right through the tea 16 leaves and being very clear that we're looking for 17 efficiencies in the indirect portion of the budget.
18So there were two other areas that I 19wanted to focus on a little bit turning to uranium 20recovery. So if Wyoming goes agreement, there's a 21 staff paper that says that there would be 16 FTE, I 22 believe, that the budget could potentially be reduced 23 by, but I haven't really heard NRC go into any real 24 in-depth discussion about how that will occur, because 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 that is eminent potentially on October 1.
1 MS. WYLIE: So I'm going to give you the 2 best answer I can, and Craig would be happy to -- you 3 want to start --
4 MR. ERLANGER: Sure.
5 MS. WYLIE: -- and then I'll --
6MS. SCHLUETER: I mean, what will that 7 look like potentially for the other program --
8 (Simultaneous speaking.)
9MR. ERLANGER: Craig Erlanger, NRC.
10Janet, thanks for the question. What I'm going to do 11 is I will take an action coming out of this meeting 12 and talk to John Tappert, the director of the 13 division.
14What I can also tell
-- what I want to 15 tell you is that the discussions are ongoing about 16 what that looks like for the Agency and where the 17 reductions are in the budget. So while I'm not 18representing that business line, I can tell you 19 they've put effort towards exploring what it would 20 look like if Wyoming does become a material -- excuse 21me, an Agreement State. What I'll do coming out of 22 her though is follow up and get you some details about 23 how that translates into budget formulation and 24 execution and the whole --
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 (Simultaneous speaking.)
1MS. WYLIE: But only for 2018 and '19.
2Okay? So we just need to be clear. There is a paper 3 at work at the direction of the Commission that has 4not been sent to the Commission yet. So there are 5 multiple avenues being worked, multiple options. We 6are committed very directly. We are committed to 7 reducing and to managing the impact that it would have 8 on remaining licensees.
9 MS. SCHLUETER: Okay.
10MS. WYLIE: That's really the bottom line.
11 MR. ERLANGER: And they have I would say 12a best guess estimate for dates and timelines. I'm 13 not sure what's publicly available at this point, but 14 I'll ask that group to follow up and we'll find a 15 forum to have that discussion.
16 MS. SCHLUETER: Okay. And then it bears 17 the related question about are the resource 18 expenditures worth it for the flat fee pilot --
19 MS. WYLIE: We may adjust --
20 MS. SCHLUETER: -- if there's only three 21 people left?
22 MS. WYLIE: -- based on that, if there's 23 only two, yes.
24 MS. SCHLUETER: Yes.
25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 67MS. WYLIE: We may adjust. When we 1 started on the flat fee journey --
2 MS. SCHLUETER: Right.
3 MS. WYLIE: -- this was not --
4 MS. SCHLUETER: Right.
5MS. WYLIE: It wasn't a thing, right? And 6 so we've been marching in a very deliberate way to 7make sure that we had quality data. There's been some 8 frustration with that in some areas, but the risk is 9 then if you get it wrong, it's bad particularly if the 10 Agreement State switchover is delayed for whatever 11reason. It may still be worthwhile. But you're 12 exactly right. We would adjust accordingly.
13MS. SCHLUETER: Okay. And then last one:
14 Ms. Suri, I believe you made the comment that there 15 would potentially be changes to the methodology for 16 the cost or rate associated with project managers and 17resident inspectors. Would there be some opportunity 18 for engagement with stakeholders on those changes this 19 fiscal year or next?
20 MS. WYLIE: Go ahead.
21MS. SURI: So we talked about this in our 22 proposed fee rule about the change in methodology.
23 So, yes, this is -- February 28th is when the comment 24period expires. So, yes, we are open 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 68 stakeholder comments on that.
1MS. SCHLUETER: Oh, so you're referring to 2 anything beyond what's in the --
3 MS. SURI: Correct.
4MS. SCHLUETER: -- paper, like with the 5 six percent and --
6MS. SURI: Correct. We are planning to 7 eliminate the six percent that goes on the invoice and 8 instead have our staff charge their indirect time to 9 activity codes that will be billed to licensees.
10 MS. SCHLUETER: Okay. All right. Thank 11 you.12MS. WYLIE: And that would allow you to 13 see it on your new invoice. We'll be having another 14 public meeting where we talk about changes to invoices 15 and our new processes, but I'd like to just give you 16 an unsolicited opportunity to look at the new invoice.
17 This has been a critical part of our transparency 18activity. We have a lot of new information on the 19invoices. And I ha ve enough to hand out to most of 20 the public that's present, so I'll give them to you on 21 the way out. Sorry.
22MS. RIVERA: No, you're totally fine.
23 Plugs. 24 Any other comments or questions from 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 69 room?1MR. ZIMMERMAN: Thank you. Tony Zimmerman 2again with Duke Energy. And looking through the work 3 sheets and the proposed rule staff makes a lot of 4 their -- their assumptions are based on dollars spent 5and FTE. And at that times that becomes difficult to 6 correlate to actual reductions, staffing reductions to 7 look at what the numbers of NRC staff engaged in 8 licensee review activities are.
9 Is there a cross-chart that aligns FTE to 10 staffing actual head count reductions that we've seen 11like in the '14, '15, '16, '17. Are those numbers 12 available? I'm focused on --
13 MS. WYLIE: By fee class?
14MR. ZIMMERMAN: Well, I'm focused on power 15 reactors. That's where my concern is.
16 MS. WYLIE: So in the President's budget 17 request there's a table that shows you the reduction 18 by agency. Do we have --
19 MS. GALSTER: In the work papers we have 20 each -- by each fee class we've broken it down by 21 contract dollars and the number of FTEs and then the 22FTE rate. So you can compare between it between this 23 year and the last year. We do have that in the work 24 papers.25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W.(202) 234-4433WASHINGTON, D.C. 20005-3701(202) 234-4433 70 MS. WYLIE: But you'd like to be able to 1 say -- see it further back in time?
2 MR. ZIMMERMAN: Well, I -- the -- in the 3 work papers it does show the dollar amount and the 4 FTE, but when you have multiple staff members that 20 5 percent of their time may go towards a specific 6 activity and you add that up to get a full-time 7equivalent or an FTE. Is the FTE -- one FTE directly 8 equivalent to one staff reduction, for example, when 9 you look at the change from '18 proposed and '17.
10 When you see a 95 reduction in FTE at corporate is 11 that 95 people that --
12 (Simultaneous speaking.)
13MS. WYLIE: That's very close to -- in 14 corporate it's almost one to one FTE to actual person.
15 That's not always true because in some cases you use 16part time or summer hire. But if you're looking at 17 corporate staff reductions, they're pretty much 18 straightforward head count.
19 Now as I said, we did manage to reduce by 20moving people to funded workload. We did that 21 primarily through early-out buyouts and people taking 22 downgrades. So we didn't actually attrit anyone out 23the door. We're pretty proud of that. There were no 24involuntary departures. But, yes, that's pretty close 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 to FTE and faces for corporate.
1MS. RIVERA: Is there anybody on the phone 2 line that has a question?
3 (No audible response.)
4MS. RIVERA: Anybody else in the in-person 5 audience?6 (No audible response.)
7MS. RIVERA: Okay. Before I turn it back 8 to Maureen for closing, I'll just remind you one last 9 time if you could sign in as you're departing and 10 picking up your invoice sheet.
11 Maureen?12MS. WYLIE: Thank you all very much, both 13 to our external participants, industry, stakeholders, 14 and to the NRC employees who participated today.
15 Nothing makes me happier than to talk about fees and 16 educate new people about them.
17 We take your input extremely seriously.
18We understand that it's real money for you. It's 19really money for us, too. And it's part of our 20responsibility as the Office of the Chief Financial 21 Officer, and as all federal employees to make sure 22 that the citizen gets value for the dollar and as a 23 stakeholder required to pay for services, you get 24 value for your dollar.
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 We've had several different dates talked 1about as to when your comments are due. I've been 2 assured that the real date is February 26th, so please 3get your formal comments in by that time. The 4 presentation materials have the variety of ways you 5 can do that. You can also refer to the rule.
6 Thank you very much for your kind 7 attention. I believe we're adjourned.
8 (Whereupon, the above-ent itled matter went 9 off the record at 2:43 p.m.)
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