ML18128A031

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SECY-93-086: Backfit Considerations
ML18128A031
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Issue date: 04/01/1993
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POLICY ISSUE April 1~ 1993 (Notation Vote) SECY-93-086 FOR: The Commissioners FROM: James M. Taylor, Executive Director for Operations

SUBJECT:

BACKFIT CONSIDERATIONS PURPOSE:

To obtain a Commission decision on whether and how to amend 10 CFR 50.109 to make its backfit provisions more responsive to the Commission's needs regarding rulemaking.

CATEGORY:

This paper co_vers a major policy question requiring Commission consideration.

Whether the backfit provisions of 10 CFR 50.109 should be revised to address difficulties encountered in situations where a seemingly worthwhile change to the regulations cannot be adopted because of difficulties in demonstrating that the change represents a "substantial increase in the overall protection of the public health and safety or the common defense and security" a~

required by 10 CFR 50.109.

BACKGROUND:

The Backfit Rule in 10 CFR 50.109 governs the process by which the Commission determines whether to impose new requirements on existing nuclear power reactors. The Backfit Rule requires that a backfit analysis be conducted for each proposed requirement to demonstrate that: (i} a substantial increase in CONTACT:

Donald Hopkins, RES 492-3784

The Commissioners 2 the overall protection of the public health and safety or the common defense and security would be derived from the backfit, and (ii) direct and indirect costs of implementation are justified in view of the increased protection.

However, under §50.109(a)(4), these criteria are not applicable if the new requirements are for the purpose of:

{i) bringing a facility into compliance with existing NRC regulations, orders or licensee commitments; (ii) ensuring that the facility provides adequate protection to the health and safety of the public; or (iii) defining the level of protection regarded as adequate.

Subsequent to the issuance of the Commission's final Backfit Rule on September 20, 1985, the Union of Concerned Scientists argued on judicial review that economic costs may never be a factor in safety decisions under the Atomic Energy Act. The D. C. Circuit held on review that economic costs may be considered for backfits which go beyond adequate protection but not for backfits required to ensure, define, or redefine adequate protection, and remanded the Backfit Rule back to NRC for further consideration. This caused the Commission to issue a clarified rule in 1988 which corresponded exactly to the Courts findings. The rule was then upheld on a second round of judicial review.

In developing the Backfit Rule, a specific purpose was to prevent the imposition of requirements (e.g., rules and staff developed guidance and practices) not needed to assure adequate protection or compliance and of

  • marginal overall safety benefit or with costs out of proportion to the safety benefits. This objective, considered central to regulatory stability, was to assure that NRC and industry's resources and attention were focused on safety problems for which there was a clearly defined need to be addressed through rulemaking or other regulatory means. Small incremental improvements were thought to be not commensurate with the establishment of regulatory requirements needed to assure safety, and only improvements in safety which are sufficiently large and clearly justified should be pursued. The aim of the Backfit Rule was to instill into the regulatory process the need for disciplined analysis of proposed new requirements and regulatory initiatives.

There was also a concern that the backfit process be better managed with more complete analysis and documentation of benefits and costs. It should be noted that, by OGC interpretation, relaxations in requirements are not considered backfits and thus, are not subject to the Backfit Rule. Also, OGC does not interpret the Backfit Rule as applicable to purely administrative matters, recordkeeping and reporting requirements, or statutory requirements.

Since promulgation of the Backfit Rule, there have been a number of rulemaking actions where considerable agency resources have been expended addressing whether a proposed rule meets the "substantial increase in overall protection"

The Commissioners 3 (safety enhancement) criterion. For many rulemaking actions it has been difficult or impossible, even with large expenditure of resources, to clearly demonstrate that this safety enhancement criterion has been met. For a number of these cases, the situation reflects the problem that the purpose of the new or revised rulemaking action was not to substantially increase the margin of safety. In these instances, the justifications for rulemakings were based on other reasons, e.g., rules to codify industry practice, and thus were recommended for adoption even though there may not be a convincing demonstration that the safety enhancement criterion was satisfied.

There is nothing in the Backfit Rule requiring that the "substantial increase" in safety be expressed in quantitative terms, and in cases where this has not been po*ssible, such as in personnel -issues not amenable to PRA analysis (e.g. fitness for duty or access authorization), the justification for proceeding has relied on qualitative factors. Whether such factors constitute a "substantial improvement involves judgement. As a result, reasonable 0

individuals have differed in this regard, and such disagreements have lead to more lengthy staff reviews being applied than estimated, causing inevitable delays in completing the rulemakings.

By SRM dated October 29, 1992 (Enclosure 1), the Commission directed the staff to review NRC experience in implementing the backfit rule and develop recommendations to address the difficulties encountered in situations such as the Appendix J and Fitness-For-Duty rulemakings where seemingly worthwhile changes to the regulations did not result in "substantial increase in the overall protection of the public health and safety or the common defense and security," as required by the current Backfit Rule.

The staff examined the preamble to the final backfit rule published on September 20, 1985, and the many memoranda written to the Commission by OGC interpreting the backfit rule and offering advice on the options open to the NRC with respect to satisfying the backfit rule. The staff believes that the options discussed by OGC in its July 6, 1989 memorandum are the basic options still available. The staff recognizes the value of the disciplined analysis required by the backfit rule, but believes that the similar function of the regulatory analysis required under NRC rulemaking procedures can effectively serve the same purpose. The central question continues to be whether rulemaking subject to the Backfit Rule can be justified as providing substantial benefits and yet not result in substantial improvement in the margin of protection to public health and safety.

DISCUSSION:

There have been several areas of difficulty where rulemakings thought to be worthwhile are difficult to justify quantitatively under the narrow safety enhancement criterion of the Backfit Rule. Some of those are identified as follows.

The Commissioners 4

  • Rulemakings to achieve consistency with national and international standards, or consistency with state-of-art technology, or advanced risk assessment methodology were somet~mes recommended to assure licensee programs reflect current knowledge and are not based on obsolete regulatory requirem~nts.
  • Requirements related to security, emergency response, or personnel {e.g., Fitness-for-Duty) which are not amenable to quantification and must be expressed in qualitative terms.
  • Codification of industry practices in order to assure that all licensees, and not just a high percentage, achieve expected performance results and that backsliding does not occur.

Examples of rulemaking backfits which are representative of these areas are detailed in Enclosure 2.

The primary difference in the options offered here is whether to specify acceptance criteria which are parallel to and provide an alternate basis to the safety enhancement criterion as an acceptable justification for backfits.

If we are to provide flexibility in the rulemaking area, the principal foreseeable alternative to broadening the acceptance criteria in the Backfit Rule is to exclude rulemaking from the Backfit Rule either totally or on a case-by-case basis. In either situation, however, the staff would be expected to carry out a disciplined regulatory analysis for the rulemaking initiative and speak to the need (or lack thereof) for the rulemaking initiative to achieve the backfit safety enhancement criterion. In addition, for each of the options, the rulemaking will continue to be reviewed in accordance with the CRGR charter. It should be noted that these options have been developed only with respect to rulemakings subject to Commission approval. No changes were evaluated or proposed for other applications of the Backfit Rule through staff action.

The optional approaches addressing the above issue are as follows:

1. Amend the Backfit Rule so that no rulemaking actions are subject to its requirements, and rely on the regulatory analysis, CRGR review, public colllllent, and direct Commission involvement to assure that only rules which are worthwhile and justified are promulgated.

PRO:

  • Would give the Commission additional flexibility to consider benefits other than those which would constitute safety enhancement as a justification for backfitting.
  • The broad exclusion would save the effort of considering whether the Backfit Rule should apply to each individual rulemaking.
  • The use of agency resources would likely be reduced in attempting to satisfy the safety enhancement criterion for rulemakings where

The Commissioners 5 it is difficult to demonstrate that such an enhancement exists or where safety enhancement was not the objective.

CON:

  • Exemption of the rulemaking actions could create a perception that new rulemakings of marginal safety benefit and justification may be adopted.
  • The perception could be created that the Commission is willing to drop its demands on staff to carry out disciplined analysis for staff proposed new requirements and regulatory initiatives.
  • Potential concern may be the cumulative licensee resources to comply with a number of new rulemakings aimed at objectives other than substantially enhanced public safety.
  • Concern may be expressed about why the safety enhancement standard should remain for backfits imposed other than by rulemaking.
2. Amend the Backfit Rule by deleting, revising. or supplementing the safety enhancement criterion for addressing rulemakings which are worthwhile but do not meet this criterion.

PRO:

  • Would preserve the discipline of the Backfit Rule while giving the Commission the flexibility to consider benefits other than safety enhancement as justification for backfitting.
  • By specifying what additional benefits can be considered to justify backfitting, the Commission would be keeping the door partially shut on consideration of benefits which are not sufficiently direct or substantial.
  • The use of agency resources would likely be reduced in attempting to satisfy the safety enhancement criterion for rules where it is difficult to demonstrate such an enhancement exists or where a safety enhancement was not the objective.

CON:

  • If the safety enhancement criterion is supplemented, staff may not be able to anticipate all criteria needed to afford the Commission sufficient flexibility.
  • Potential concern may be the cumulative licensee resources to comply with new rulemakings.
  • Concern may be expressed about why the safety enhancement standard should remain for backfits imposed other than by rulemaking.
3. Clarify through a policy statement that the Commission can and intends to use the current provisions of 10 CFR 50.12(a) to exempt a particular rulemaking action from the Backfit Rule after determining that the

The Commissioners 6 benefits are worthwhile and justified, even though the Backfit Rule's safety enhancement criterion is not satisfied.

PRO:

  • Would provide a clear signal that the Commission intends to exercise its existing flexibility to consider benefits other than a substantial increase in protection as justification for backfitting where good cause exists.
  • Public involvement in proposed rulemaking actions would address the use of the exemption provision and would serve as input to a final Commission decision on whether to exempt that action from the Backfit Rule.
  • Recognizes the need for thoughtful departure from the backfit rule in rare instances.
  • Adoption of a policy statement minimizes the argument that the Backfit Rule itself has changed.

CON:

  • The exercise of this option may be arbitrary and resource intensive in the absence of a definition of the "special circumstances 11 for determining that a rulemaking that the Commission wishes to exempt from the Backfit Rule should be treated differently from other rulemakings:
4. No action. Continue the status quo.

PRO:

  • No reversal of the decision made in 1985 to apply the "substantial increase in protection 11 criterion to rulemaking backfits .

CON:

  • Past difficulties will continue.
  • Substantial staff time would continue to be expended in attempting to satisfy the safety enhancement criterion for rulemaking where it is difficult to demonstrate such an enhancement or where safety enhancement was not the objective.

DISCUSSION OF OPTIONS:

In summary, of the three options which call for change, Option 1, the general exclusion from the Backfit Rule for all rulemaking, would involve the least resources to implement. However, because the Commission, in 1985, chose to apply the backfit rule to rulemaking actions, this option would be a*shift in Commission policy away from the principles underlying the Backfit Rule. This is because the purpose of the Backfit Rule is not just assuring that backfits are imposed only after an appropriate high-level management review, but to prevent imposition of certain requirements under any circumstances. Moreover, at the time the Backfit Rule was promulgated, many of the backfits, which were the subjects of the strongest industry complaints, were imposed by the

The Commissioners 7 Commission through rulemaking. It may also appear to some that there would be an increased risk of proliferation of rulemakings which are not addressed to the protection of the public health and safety. However, a counterview would remain the same as offered at that time, namely, with Commission involvement and the discipline from the requirements of the Administrative Procedure Act (APA), the process of regulatory impact analysis, an in-depth review by CRGR, and with the option of a judicial review, these concerns should be small .

Option 2 would most retain the flavor of the existing Backfit Rule for rulemaking actions, but could involve a difficult rulemaking to codify alternative criteria in the Backfit Rule that would prove practical and resource efficient. Furthermore, any change involving the safety enhancement criterion will need to be evaluated for possible application to the backfits other than rulemaking whether imposed by the Commission or staff.

Option 3, to consider exemption for each rulemaking action based on its individual merits, would have intermediate resource requirements based on justifying exemptions for individual rulemakings. The Commission has not yet chosen to exempt itself from the Backfit Rule on a case specific basis. The advantage of this option is that the specific exemption provisions of 10 CFR 50.12{a) are already in place. However, OGC has advised against the use of the exemption because of the difficulty in distinguishing the exempted rule from all other rules to which the Backfit Rule still applies.

Option 4 speaks for itself and would not ease the difficulties encountered to date for worthwhile rulemaking initiatives.

RESOURCE ESTIMATE:

The staff believes there will be a net savings in resources if Option 1, 2, or 3 is selected. The greatest savings would come under Option 1. If rulemaking is needed, then approximately one FTE over a 2-year period would be required.

This would not involve additi~nal resources over those currently included in the Five-Year Plan.

RECOMMENDATION:

That the Commission:

Choose Option 3 which will clearly put the Commission pn record that it intends to use its authority pursuant to 10 CFR 50.12(a) to promulgate rules which, as a matter of policy are in the public interest, notwithstanding the provisions of 10 CFR 50.109. This option retains the existing provisions of 10 CFR 50.109 which are well understood by both the staff and industry and will not result in the possibility of confusion because of a change in 10 CFR 50.109 criteria. Likewise, adoption of Option 3 will not provide an opportunity to reopen IO CFR 50.109 to challenge as occurred in 1985. Also the granting of exemptions is expected to be rare.

The Co11111issioners 8 OGC disagrees with Option 3 and prefers either Option I or 2 if rule changes are to be considered. OGC does not believe that Option 3 will be workable, since practice to date suggests that rules which are candidates for exemptions will be difficult to distinguish from other rules to which the backfit rule will still apply, and yet such distinctions will be necessary to avoid the exercise of exemption power from appearing arbitrary. Moreover, it is the judgement of the General Counsel that an exemption by exemption approach is not a sound regulatory approach to achieve a regulatory policy objective which is inconsistent with an existing regulation. The regulation should be changed to cover the objective. This is also consistent with the regulatory position the Commission has previously expressed in connection with frequently invoked exemptions for operating licenses (e.g., for leak rates and criticality monitoring}.

SCHEDULING:

No specific circumstance is known to staff which would require Commission action by any particular date in the near future.

COORDINATION:

The Office of the General Counsel has participated actively in the development of this paper and concurs in its content.

~* ~~ff ames H. Taylor Executive Director for Operations

Enclosures:

l. SRM dtd October 29, 1992
2. Rulemaking Backfits Representative of Difficult Areas

ACTION - Beckjord, RES/

UNITED ST ATES Murley, NRR NUCLEAR REGULATORY COMMISSION WASHINGTON. 0.C. 20555 Cys: Taylor Sniezek Thompson October 29, 1992 Blaha OFFICE OF THE Jordan SECRETARY MEMORANDUM FOR: James M. Taylor i

Executive Director for Operations William c. Parler General Counsel FROM: Samuel J. Chilk, Secre a

SUBJECT:

COMJC-92-007 - SECY-92 0: PROPOSED AMENDMENTS ro THE FITNESS FOR-DUTY ROJ.,E; SECY-91-348: ISSUANCE OF FINAL REVISION TO APPENDIX J TO 10 CFR PART 50 -- BACKFIT CONSIDERATIONS The Commission (with all Commissioners agreeing} has agreed that the staff and the Office of the General Counsel (OGC), in the context ot*their work on the Fitness-For-Duty rule and Appendix J rule changes, should review NRC experience in implementing the backfit rule and develop recommendations, including the need for possible cb~ges to 10 CFR 50.109, to address the difficulties encountered in situations such as the Appendix J and Fitness-For-Duty rulemakings where seemingly worthwhile changes to the regulations cannot be shown to result in "substantial increase in the overall protection of the public.health and safety or the common defense and security," as required by the current backfit rule. The analysis and recommendations should take into account the review and analysis provided by OGC in its July 6, 1989 memorandum to the Commission.

(El>O/OGC) (SECY suspense: 1/12/93) 9200242 RES/NRR - Obtain early OGC and CRGR inputs to, this policy *action.

cc: The Chairman Speci a1 OEDO Note;_

Commissl...q.per Rogers l b~oad base of impacts 1s requi.red on this Commissf'one!'- CUrtiss policy action and the final proposal will be Commissioner Roick subject to an added level of senior management _

Commissioner de Planque review.

OJ:G

Enclosure 2 Rulemaking Backfits Representative of Difficult Areas

  • Rulemakings to achieve consistency with national and international standards, or consistency with state-of-art technology, or advanced risk assessment methodology were sometimes recommended to assure licensee programs reflect current knowledge and are not based on obsolete regulatory requirements.

Revised Part 20 - This regulation, which applies to both materials licensees and power reactors, was initiated prior to final issuance of the Backfit Rule. It established dose limits for the embryo-fetus, reflected a new method of limiting radiation exposure, achieved conformance with Presidential guidance, and national and international standards, and required ALARA programs. Since these requirements deal with a broad range of licensees and issues, their benefits are difficult to quantify. Furthermore, because the current exposures to the public other than the embryo-fetus were not significantly affected because of voluntary ALARA programs, it was difficult to clearly show that the new rule actually constituted a substantial increase in the protection of public health and safety. The Commission finally approved the rule on the basis that substantial additional protection would result for power reactors. However, the Commission concluded that it could also have promulgated Part 20 as redefining adequate protection.

Appendix J - This regulation was not developed to address safety problems in containment testing, but rather to allow a new industry code and new methodologies and techniques to be used, generally recognized as desirable. The changes were both relaxations in requirements and new requirements, and overall the staff believed the regulation was "safety neutral." The relaxations were not subject to the Backfit Rule, and the new requirements are backfits. Whether the new requirements constituted a "substantial increase in the overall protection of the public health and safety or the common defense and security" was difficult to clearly establish. As a result, this proposed regulation may not clearly confirm to the Backfit Rule even though it is recognized as P.roviding advantages and benefits over the existing regulation.

2

  • Requirements related to security, emergency response, or personnel (e.g., Fitness-for-Duty) which are not amenable to quantification and must be expressed in qualitative terms.

A considerable amount of staff resources have gone into analyzing the benefits associated with such rules as:

IO CFR 73 on access authorization; 10 CFR 50, Appendix Eon the Emergency Response Data System; and 10 CFR 26, Fitness for Duty. Such initiatives tend to be .costly, yet the benefits are qualitative in nature and generally based on assumptions rather than comprehensive analysis based on realistic data.

Because the increment of safety provided by the initiative cannot be unambiguously shown as meeting the safety enhancement criterion, it is necessary to rely on qualitative arguments on which it is often difficult to reach consensus.

  • Codification of industry practices in order to assure that all licensees, and not just a high percentage, achieve expected performance results and that backsliding does not occur.

Recent examples in this category were the Maintenance Rule and Access Authorization. Whenever a large fraction of the industry is voluntarily implementing a program, it is difficult to show that a substantial increase in protection will result from NRC rulemaking. Yet, for the Maintenance Rule. for example, the Commission believed that maintenance needed to be codified to assure adequate programs at all plants. In this case, the regulatory analysis for the maintenance rule cited the financial benefit from increased plant availability, and the "substantial increase in the overall protection of the public health and safety or the common defense and security" was based on need to avoid industry backsliding. In the absence of well-defined and understood criteria for judging whether the increase in public protection is substantial, such determinations are often subject to criticism and controversy.

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