ML20217G168

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Transcript of 960828 Meeting in Rockville,Md Re Briefing on Certification of Usec.Pp 1-57
ML20217G168
Person / Time
Issue date: 08/28/1996
From:
NRC COMMISSION (OCM)
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ML20008B475 List:
References
FRN-62FR6664, RULE-PR-2, RULE-PR-40, RULE-PR-70, RULE-PR-76 AF56-2-032, AF56-2-32, NUDOCS 9710090254
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UNITED
STATES OF~ AMERICA NUCLEAR REGULATORY COMMISSION BRIEFlNG ON CERTIFICATION OF.USEC -

PUBLIC MEETING-4 -

I- Nuclear Regulatory Commission I Room 1F-16.

11555 Rockville Pike -

Rockville, Maryland Wednesday,. August 28, 1996 The Commission met'in open session, pursuant to notice, at 10:00 a.m., the Honorable SHIRLEY A. . JACKSON, Chairman of the Commission, presiding.

-COMMISSIONERS PRESENT:

SHIRLEY A.-JACKSON, Chairman of the Commission KENNETH C. ROGERS, Member of-the Commission

, GRETA J. DICUS,. Member of the Commission NILS J..DIAZ,-Member of the Commission EDWARD McGAFFIGAN,-JR.~, Member of the Commission i

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97i0090254 971003 PDR N2F *"9 664

' STAFF AND PRESENTERS SEATED-AT' COMMISSION TABLE:

JOHN C. HOYLE,. Secretary KAREN D. CYR,' Ge'1eral Counsel WILLIAM: TIMBERS, President & CEO, USEC WILLIAM AXELSON, Acting Deputy Administration,

. Region II-CARL PAPERIELLO, Director _~NMSS-JOHN HICKEY,-Chief,-Enrichment' Branch, NMSS WALTER SCHWINK, Section Chief, Uranium Enrichment Standards, NMSS

-JAMES TAYLOR, EDO i

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3 PROCEED-INGS

_ _ CHAIRMAN JACKSON: Good morning,_ ladies and.

.gtntlemen.-

I_both want to welcome and to introduce:to you Commissioner _ Edward McGaffigan, who is in his first public meating as a commissioner..

-Do-you have any comment you wouldclike to make?

COMMISSIONER McGAFFIGAN: Thank you, Dr. Jackson.

I just will-say the-same thing here-I said upstairs. ~ I_ intend to try.to be the best commissioner I can

,be11n the coming three years and-ten months. I--bring a different perspective._ All my. friends upstairs-are largely from the Defense world. I hope that perspective helps ctrcngthen the Commission.

Thank you'.-

CHAIRMAN JACKSON: I had on a previous meeting thic week introduced our other newest commissioner, Er, Nils Dicz, -I had introduced him in a smaller public meeting.

Would-you like to make a comment?

COMMISSIONER DIAZ: I'd just like to say that I am rcally gladLI am no longer the union member of the Commission.

[ Laughter.]

CHAIRMAN, JACKSON: Thank you.

This morning, Mr. William Timbers of the United

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4 States-Enrichment Corporation and the NRC staff will brief the Commission on the results of the certification process for the USEC gaseous diffusion facilities, located in Paducah, Kentucky and Portsmouth, Ohio.

The Energy Policy Act of 1992 and the USEC, that is,.U. S. Enrichment Corporation Privatization Act of 1996

-placed the responsibility of certifying the gaseous diffusion plants on the NRC. Since the 1992 act, the Commission has established standards for the plants that will protect public health and safety. We have also established a certification process.

In September of 1995, USEC submitted a revised enet.ification application that is being addressed and is the sti'iict of discussion here. The staff has briefed the I Commission a number of times regarding the status of the certification process. Following a previous briefing, the Commission directed the staff to prepare a paper summarizing the safety assessment and to brief the Commission when the certification process was complete, but before issuing certification. That is, then, the subject of this public meeting and we look forward to hearing about the results.

I understand that copies of the staff papers and charte are available at the entrances to the meeting.

Do any of my fellow commissioners have any additional comments?

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[No response.)

CHAIRMAN JACKSON: If not, Mr. Timbers, you may-procted.

MR.--TIMBERS: Thank-you, Chairman.

First of-all, before I begin, I would like to say c^few; remarks.- 'First of all, I~would like to introduce my collcagues with me_m.ere today. First of all, is George Rifckes,--who is execttive-vice-president for Operations for USEC and Rob Woolley, who is manager for Nuclear Regulatory _.

Assurance _at-USEC.

Second of-all, as an executive.in,the nuclear fuel-buoiness, it is tremendous from_our industry standpoint to b3 the first to sit in. front'of-five commissioners for a long time with the Nuclear Regulatory Commission. I think thtt it is an indication of an additional commitmeo 'o this ar nn_and'we are very pleased to be sitting here todat and prccsnting to the entire Commission.

I think the first time I-addressed the Commission, thoro were two commissioners. So, great progress has been mado in the last couple of years in that regard.

I would like to move-to my remarks regarding our ob:arvations about the regulatory process. I'd first like to rccognize Chairman Jackson, Commissioner Dicus,

. Commissioner _ Rogers, Commissioner Diaz and Commissioner McGaffigan and members of the NRC staff. I thank you for 4

6 lths opportunity to'be_here today;and'to offer:first my brief _l 1

comments ~about the application processLfor certification of  ;

our gaseous diffusion-plants:and second, to clearly state j

'.USEC's position and philosophy as a regulated nuclear fuel-comp;ny._under the NRC. ..

d We:have been actively a certification application '

for'the-gaseous diffusionLplants since 1994. In May of-o-1995,-I: appeared by-the NRC Commission and committed USEC to licten carefully'to"NRC's' concerns and direction, to address  :

-each and every issue raised by the NRC.and communicate- l completely and openly, directly with-the NRC.

We have diligently pursued each of these 1

commitments over the past 15 months and we were met with an

, Cqunlly diligent. effort on the part of the NRC staff. Both USEC and the Commission staff have worked very hard to get

hgro-today._ Our far-ranging and-intensive interactions have

, involved diverse experts from_the Commission, the Department-

,=of Energy, USEC, Lockheed-Martin Utility Services and

~Lothars, working together to conclude a unique undertaking.

There was no precedent for NRC certification and r gulation of an operating gaseous diffusion plant and we chnro the. challenges of developing a sound framework for z

NRC'O-regulations of these plants. To be sure,~none of the participants thought this would be an easy or ctraightforward process. It has, _in' fact, been a tough, a I-

7 challenging and perhaps not surprisingly, even a bit contentious ~ process at times.

Since all~of usLhave been working in uncharted

.tcrritory, differing perspectives, considerations and Lconstraints came into play._ I'm gratified that all parties involved have been able to constructively. address and r concile.these matters so that there is an agreement on the methods by-which we will continue the safe operation of the

, _plcnts. -We are now on the threshold of completing the

. initial step toward certification and_ moving to the next Gttga, the operation of the gaseous diffusion plants under NRC regulations.

The 110 reactors and nine fuel facilities-that the

~13tC regulates have nuclear operating histories, the past

.txp;riences which have been well known to the NRC since thosa facilities were first' licensed and operated. The Prducah and_Portsmouth plants are-the first facilities to be circady in (7eration prior to coming under NRC regulation.

I know the uniqueness of the situation is well understood.

Sinc 3 we are bringing to you sul existing history, we will focuc-on what we want to be and the company that we will be.

There is an agreement that, historically, the gaScous diffusion plants have been safely operated. I want to CCsure you and the NRC staff that, first, we are confident about our. ability to continue such safe

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operations. Second,:we-are equally _ committed to working with the NRC to secure and maintain-yourJcontinued_ +

,- confidence in us and in our performance.

I.make this commitment not only-because you-would cxp3ct no less from^us,1but also because of another-c.notivation as well.- It makes good-business sanse. Safety 1oEgood1for.the: bottom line. It'is-a key element.in our -

ovsrall1 business' strategy.

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It has been today. It has:since wa b:gan'our operation in 1993.

In implementing the nandates of the Energy Policy

'Act, USEC's management developed a three-part-commitment'to cuccted. The three elements'of that commitment are

, ~ performance, efficiency and' safety. -None can exist-without tha others. Each depends upon the.others for success..

Production, performance and efficiency keeps people employed Lcnd>makes profits, which are required to make investments cnd cafety possible. Safe operations protect the company's acacets'and assures that efficiency and production goals can b2 met.

Neither_a facility owner nor the regulator should '

focus on one_ element at the exclusion of the others, JWe-visw them as; inseparable. Safety is a continuous process.

It 10 not anLend.- We have and we will-continue to work for'

w ys to impreve.

We have,.for example, reorganized'the plants along.

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9 functional lines. We have brought in individuals with

~nuclcar' plant' operating experience to complement experienced plcnt staff.

Consistent.with NRC's' interests, we have enhanced USEC's oversight of plant operations. Last fall, we catablished a safety, safeguards and quality organization at th9 Dite,- reporting to Mr. Rifakes, USEC's executive vice-prc ident. This' organization is responsible for assuring cppliance with applicable regulatory requirements and USEC policies.

We have established new management expectations cbout rigor and formality of operations. To further improve plent safety and operations, we have formed a plant performance review committee or PPRC, composed of outside rcpr:sentatives with extensive nuclear experience, to provide an objective external perspective to our senior op3rntions management. This committee has been meeting for th3 past 18 months.

We have developed an action plan to provide a cound basis for improvement of management controls to insure ccfo operations of the plants. For example,.we are cnh2ncing management. controls over policy and procedural programs, corrective action programs, performance measures, cudits and self-assessment and training programs. With DOE, wa cre preparing a new accent analysis to serve as the l

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-tOchnicallbaseline for the plants.

We have learned a great deal and we are improving on our abilities. We are committed to constant review and

' continuous improvement of our performance. We have been

.conciatentLin our. commitment-to a vision for the future operation of the plants. That vision must always start with

.cccuring the safety of:the public, our workers and the icnvironment.- There is no room'for. complacency.. We will centinually work-to. maintain and approve margins of nuclear cnd industrial safety.

I also want again to acknowledge-NRC for its well-c2rn d_ reputation for excellence in the conduct of its

~ r:gulatory activities._ I commit to you that weLwill be open -

E cnd responsive in:all of our dealings with the Commission.

. We have made commitments. We have made commitments to ourselves. We have made commitments _to our-

employees, to our contractors'and to you, the Commission.
W3 t ke.the commitments--that we have made in the application l ;cnd the compliance plans and the naw technical safety i

rcquirements very seriously. -I want to reconfirm to you that, our first and foremost commitment without reservation of cny kind is the safe operation of our plants.

- We look forward to a successful and productive roletionship with you our new regulator, as we both work

ralcntlessly to maintain the same goal, the continued safe I

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11 op: ration of the uranium enrichment plants.

Thank you.

CHAIRMAN JACKSON: Thank you.

Mr. Timbers, can you tell us a little about how privatization has impacted the certification action or vice-

' var:2 if at all with the linkages? Then I or, I believe, Commissioner McGaffigan may have a follow on question for you?

MR. TIMBERS: Most everything we do is intCrrelated. There are many activities that we are involved in. I have constantly maintained from the

_privatization standpoint that these plants for 40 years have op;rcted safely. They have operated largely efficiently and productively.by the Department of Energy and its prcd;cessors.

Accordingly, from a privatization standpoint --

cnd I have made this to the representatives of the financial community -- that it should not -- the certification process 13 c continuum in the regulatory environment we work in and chould not have an impact on the privatization per se. We cro currently regulated at this moment by the Department of En3rgy. We are regulated. The regulation will change under NRC to a different form and a different regime. All that will do is continue the safe operation and continue the

-r:gulation in even a more rigorous manner than has been done-

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'~in;the past. _

So, what.it-will do for privatization,'it will'not

impair'the timing or-the impact of privatization. What it:

do;0 do-is provide investors greater insurance thatithe Lplcnts will continue the safe operation.

I come from the-private sector and I.do emphasize

-cgnin that it-makes good-business sense tu run safe plants.

Wa find _that, from aniinvestor's standpoint,,from a

~privatization standpoint,-the implementation of the .

cOrtification process 1here now and the regulations from NRC will,only enhance the.privatization efforts and the priv;tization results of USEC.

CHAIRMAN JACKSON: I-.had a follow on question hnving to do with your being.the U.'S. Government executive cg:nt relative co some issues _with high enriched uranium.

I'm going--to defer to-Commissioner McGaffigan.

COMMISSIONER McGAFFIGAN: I'd like to just cxplore something that'was on the front page of the "New i' York Times"-today. It-probably brings my national security bico out in the open right at the outset. That is one'of our functions!as a ' commission is to protect the national occurity as well.as public health and safety. It strikes me

. that, Russian highly enriched uranium makes it very.

difficult for you to make a profit.

The'"New York Times" article talks about an l

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13 L incident-that: occurred earlier this summer where our --

LS:nator Domenici: managed,to get you'allLto buy some Russian-highly enriched uraniumtwhich-you-were reluctant-to by, ,

_ cccordingsto the article,- because of its: threat to profits.

Have we set youTup-for: failure? Can you possible -

lmako k' profit if we do the_right thing'by our national- -- !

,:Occurity. interests'and we buy-the Russian highly enriched urcnium.in the quantities that'we should buy it? .

-I prefacedLthat by also-saying, last month, the Nunn-Lugar-Domenici amendment passed the Senate S8 or 99 to

! :nothing and I think that-the sentiment _in the-Congress to i d:01'with the. post-cold war effects-of vast amounts of Ru Dian weapons material being available is seif-evident.

Tho! Congress _is intent on working on this.

1So, how do you make a profit when you have this Evcat amount of-Russian HEU to be blended down and which

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Congress probably, if not now maybe'next year, will tell you th:t-you need to buy in quantity?

MR.-_ TIMBERS Well, I'm glad'you asked the

=qucction.

I guess first:of-all, one of the first things

-comeone told me when I came to. Washington is, the news rcports written in any kind of newspaper,-in_due deference:

L to the press, are generally;about 50 percent accurate, i . Thoro _is another 50 percent that-has not been shcwn. I l

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14 might quibble:withithe percentages on-this article, but I

-think that-premise still holds true here.

- Let me state a couple of things first.

This Russian HEU deal, this megatons to megawatts d0cl~is: working.. It.has been proven to be--extremely cucc:ssful. I think-it is one of the great natin'.al. policy

.cucc ssessin the lastLthree years.- There'are a lot of commentators, pundit, professors thatLwould like to create a C2000ndra environment.- But' Commissioner, let me say

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clenrly, Lit-isn't there.

.There is=a contract that we operatefunder that i

ctipulates the maximum amount of quantities to be brought in in cny given~ year.. We are exceeding them. We are exceeding tho;s. We are= exceeding the quantities the contract calls for. . We are bringing;in the material consistent with national security interests.

I think that at this point ---in the first-year, Lw3' brought in~six metric _ tons of. highly enriched uranium.

That was in 1995. .In 1996, we will. bring.a total contract of<12 metric tons. I would point out to you, Commissioner, tho contract called for-ten. We are going to bring in 12 thic year. We are under discussions of what the delivery

<chould be'in 1997.-

Now, let me make something very,.very clear.

We are executive-agents for the Unitec States of

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15 America. I-don't have a forei I don't have 10 Ru sian desk in my company. gn policy desk.

Therefore, we do not set foraign' policy. We act under the guidance and direction of tha: United States Government.

Now, in the discussions that go on with the Ruccian Federation, I don't particularly care to negotiate thoJo-discussions in-the "New York Times," but we do talk at oll-times with.the United States Government and related cg:ncies on this. . I think it is clear to say that,=in any

'diccussions we have with the Russian Federation, we brief

-thofgovernment before the meeting. . We brief-che government during the meeting and we brief the government about the r;;ults.

So, the implications are referred to in this crticle, that_we are making unilateral decisions,-that is not-the way it works. Everybody knows who the executive cgcncy works and what our responsibilities are and how we

=h;v3 conducted our affairs-knows that, the 50 percent error 1

in the "New York Times"1 applies certainly to that arena

-th3ro.

You have asked also, have we set you up:for failure. This is a difficult issue. It always has been a difficult. issues, but we at USEC have faced-difficu2 t issues cinca we began in this organization. Just the very nature of baing certified has been a more difficult process. It

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. 16 hno beenca longer process than we.all anticipated. These kinda of~ challenges are consistent with our-operations.

There is-a long commitment by myself personally _

Cnd by.USEC as a corporation =to the successful implementation of this deal.- We think.it makes good business sense. ,We think it makes good national policy

- ccn 9 and it happens to be a fortunate confluence of both of

- thocoLissues To bring this material into the marketplace,

. wa cre the only entity that has the_ financial resources to provide _the stability of this deal. We are the only entity _

. that has the technical resources to solve the problems that

-hava been inherent in creating a brand new transaction like.

thic. We are the only antity that has the market p:natration,to be able to bring the materialtin and sell it out'into-the marketplace.- _That is why we are the executive

- cg:nt.

Now, let me just give you an idea r. bout the technical _ side.

-Again, the commentaries, the commentators, the

. pundits and the professors always were wringing their hands chout why wasn't this thing done. Why wasn't this thing --

lut_me just move _all' this stuff out of Russia and put it

- h3ra-in the United Statee.

Well, unfortunately, it always easy to_ sit in an ivory tower and Dake these kinds of observations. But this k

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-had=never been done before._ It-took.us over a year meeting-

bi-mouthly with' Russians to work.out-the technical -

con 2iderations about how this_was to be done.- Let me give

-you anLexample.

The Russians asked us - :they said that we cannot_

mest ASTM specs, which tho contract = called for.. Would-you mind J f we gave out- outiof-spec -material? We asked them,

~ wall,_what is that out-of-spec material? Well, it-has

plutonium in it. I thought,.this is a little problematic.

'Now, the professort in the ivory towers'could say, well, ok2y, they'junt decided to say no. But what we_did.do, we didn't do-that.

We" met 1bi-monthly with the Russians that first

y02r and came up with ways and used our technical resources-to work with them to find a;way to bring the material.ir.

cpec. It is delivered today according to ASTM regulations.

It took us'a while to do that. It wasn't easy. That is-I ju;t one example of meeting the technical capabilities to be ablo to meet this.

The. introduction of this material into the marketplace makes good business sense to us. 'You know, we are in this tough situation to try to run a business, a

' rtgulated business but still maintain this responsibility..

-It le clear tnat this is an imperative for national

.c curity, that-the material como out of Russia, that this p

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18-db31 work.- We believe that. -IfLwe"are not involved in it, iif wa're not: involved in it,----we'reEgoingfto see the materitl on"the other-side'of'the-fence.

We couldusee-the materialifrom-our purchasing _it.

Ifswa_

it; don'tipurchase-it,-someone else is going to purchase We-areJgoing to see it in_theimarketplace.

Now,= L if you were .; involved with a' commodity. and you {

1 htd the' opportunity to take,this commodity, purchase it and lyou hadithe-financial' wherewithal and you h?d>the technical capability and you had the market penetration to-be able to

introduce it into the marketplace and do it in a stable way,

-provide; stable pricing, which is a requirement under the

.cu; pension agreement and do this-in a way that protects the-inntionalisecurity, you'd rather do that:than have it

introduced in an
ad hoc manner that has impacts in terms of

,tha marketplace, price stability. a I think,that it-is clear-that it makes-sense to us i thatiwe continue-to serve'in that role. We want to serve in that role.- .We:think-itimakes good: business sense because if Lwa: don't serve'in.that role, we are going to see it in.the markstplace in any-+ vent. _

CHAIRMAN-JACKSON: -Thank you.. _ _

COMMISSIONER.McGAFFIGAN:- Could JE just ask one

-thing?- _

-CHAIRMAN JACKSON: _Go ahead.

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19 COMMISSIONER McGAFFIGAN: _ This really_maybe goes

- to our_own staff,:but there clearly is a. dialogue. You've

..tc1ktd about briefing people before, during and after mestings with the Russians. There appears to be a dialogue that-goes on,-if this is 50 percent correct, perhaps with tha.cenior. levels of,theLDepartment of Energy as to how much you' choul.d exceed the contract this year by.

-When you cease to be regulated by DOE and come ovar to us, do-we_then become the entity that engages in

- - that dialogue - ,

MR. TIMBERS: No, no.

COMMISSIONER'McGAFFIGAN: -- or will'iticontinue

, to ba the Department of Energy and the Department of State?

MR TIMBERS: It is actually led by the National S2curity Council and our interface on a day.to day basis.is with the State Department. We are supported by the

- D:partment of Energy. . So, those are the three that are involved in.it.

There has.been completed a memorandum of agreement bstwsen USEC, the State: Department, National' Security Council and Department of Energy exactly about how that I- diclogue will occur, exactly how the interface would be conducted and also what our rights and responsibilities are

- cnd what the rights and responsibilities of the_ United States are, how changes could be made. It has all been laid-

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.out in the memorandum of agreement.:: - .

So,:-therefore, it-does not' involve ---in that

-tregard,fitidoes not involve-the NRC. :I think that all this

! memorandum of' agreement has done is codify our existing

- practices 'of dialogue; comunication and consultation.

CHAIRMAN JACKSON: I think we will go on.

Commissioner _ Rogers?

,j_ COMMISSIONER ROGERS: I am curious!with respect to L wh:t you anticipate DOE's role will beLin your long term-future in connection with any of the technical that.would be

. : of concern to _us from a safety point of view?

!' .MR. TIMBERS: I think I'would defer to George  ;

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Rifckes.on that question.

CHAIRMAN JACKSON
= Would youfspeak et'the podium
=or-you.can come to the table.-

4 MR. RIFAKES:. As you know, we are still dealing

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UithTHEU; Thatfis a DOE responsibility. In NRC space, wei

'cr@ limited to dealing with material that-is ten percent.or -

lecc enriched. Anything in' excess of that,-DOE will continue to be'the regulator.

Additionally, there are DOE operations ongoing at th2 Oites.1 We have an interface with' DOE to the extent that 4 1ntsrface enters NRC space, obviously the relationship'is thsra.. - Finally, DOE is the. landlord and-they have a say on

,' mattars-of-safety in the landlord's sense that we are going

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21 to htve to comply with. . __

So,.the relationship, while NRC willibe the

~nuclcar regulator with respect to the' material 1we are producing, the relationship is going to be a tripartite rolctionship for a-long-time.

COMMISSIONER ROGERS: Will you have-to' depend upon DOE)for doing analyses to-back up your responses to any questions that NRC may have? _ .

MR. RIFAKES: We don't anticipate that.

COMMISSIONER ROGERS: You will be able to be self-contnined then?

4 NR. RIFAKES: Yes, self-contained or with contractors cn through contractors just like all your other

. lic nsees are.- ,

COMMISSiUNER ROGERS: Well now, since you have a

-combinationLof DOE-regulated and NRC-regulated activities on

.cito, how do you visualize keeping those-segregated in the cento that, if you-really got two-styles of regulation and-thsy are-always going to be somewhat different, ho" do-you k: p those from getting mixed?

MR. RIFAKES: -Well, there are two styles of r:gulations. There are two araas where-regulation occurs.

Staff, your staff and.our staff, spend countless hours

-trying_to delineate those-in order to assure that we do not s do. DOE-type activities.in a manner that is violative of NRC I

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rsquirements.- I think that has~been pretty well-handled and

--it~101well documented-in the application-and--in the rocponses-to questions. '

COMMISSIONER._ ROGERS:- Roughly-what percentage of, -

C y, your total activities would~be regulated by DOE _and -

-whtt would be-regulated by-NRC? _ _ . _ _

MR.-RIFAKES: Long run, it is going to be a very cmall~ percentage. Today,_I-would believe it's--going to be

-lGC3 than ten-percent.-

As you know, we are, handling some HEU at Portcmouth. We are feeding it into the: cascade in-order to change _its identity to LEU. That is a DOE requirement. The 1 vary massiveLnature of..our operations and of the role of NRC #

within those operationsuleads me to believe-that-it.woul( he

clcarly less than-ten: percent, maybe even less than five.

Rob, do you want4to venture a guess in there?

MR.-WOOLLEY: I. agree with you. _.

MR.'RIFAKPS: It's: going-to be very small and over time, as-the HEU is= disposed of, that will get less and '

ic:a. Hopefully, some day, there won't be any.  ;^

COMMISSIONER' ROGERS
Fine, thank'you.

. CHAIRMAN JACKSON:- Commissioner Diaz?

Cote (ISSIONER DIAZ: _ Yes, I guess we're going to--

tclk about the same issue now that Commissioner McGaffigan brought it'up.-

From a safety point of-view, if we start i

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23 mixing large amounts of HEU from Russia, is the variability cnd the. composition of the materials -- which I am sure you cra experienced -- is- it going to pose longer term safety concerns as far as fuel? Are your plans going to be able to caccntially homogenize it to the point where it will be indistinguishable?

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MR. TIMBERS: We receive -- actually, it is always c misnomer to talk about the Russian deals and HEU deals, bec;use we receive low enrich uranium, LEU FOB.St.

Patcraburg. The blending down occurs in Russia. So, the transportation on the high seas and our receipt of it is in low cnriched uranium just like we produce, at specific COCOys that we request. This is in the neighborhood of four to five percent just like ve produce out of our plant.

When I say that we have worked with the Russians to meet the ASTM specs, it was very important to the long torm success of this deal over 20 years that, this material ba viewed in the international marketplace as transparent to U. S. material.

So, what we are supply is a commodity that is produced in Russia, derived-from nuclear weapons HEU. So, I do not think those concerns that you have described apply horo because we are going to - we are receiving and have b2:n receiving since June of 1995 a commodity that looks and ceto just like the material that we have. There are small

.-. . - . - - . - . - . - . _ - . - . ~ . - . , -

1 4

24 i

.icotopicochanges than what we normally produce.- That isi' r

within the._ specifications _of our contracts-with our

cuctomers. ,

COMMISSIONER.DIAZ:1 Yes.

I'm not concerned ~about1therisotopic' enrichment..of.

thoEuranium.--I-am concerned about'contaminationewith other matcrials.

MR. RIFAKES: .The material' meets the AS M specs

= for comercial nuclear fuel. Everything'they-have delivered:

hac-been well within-that~ specification.

COM4ISSIONER - DIAZ: . A l l 1 r i g h t'.

MR. . TIMBERS:-'That is why!we:: worked a year with

?the,Russiansito insure that did. occur.- If, in' fact, we just-Caid, okay, you don't have'.to meet AS W ,-we-would have a 20-

':y;cr problem. Now,;we have spent a year solving-that'

' problem,-which helps put,the deal on a: stable,. technical

- bacio . -

COMMISSIONER DIAZ: Okay, thank-you, ,

' CHAIRMAN JACKSON:- -Yes?

COMMISSIONER McGAFFIGAN:- Just to follow up on

-Nilo,-you just mentioned-a moment--ago-that you have some HEU at-Portsmouth.__ Is there some'HEU that-comes in as HEU that

'icinot-blended down?-

MR.: TIMBERS:J No, this is U. S. HEU.

COMMISSIONER'McGAFFIGAN:

. U. S.--HEU, okay.=

I 25 So, that you are doing for the U. S. Government?  ;

MR.LTIMBERS: 'Yes or material that has been -l trcnsferred to us.

I would like to just make one last c . ment here.

CHAIRMAN JACKSON: One last comment.

MR. TIMBERS:~ It is about the 50 percent rate and I:think it is good to put this into context.

I-personal 1*' volunteered and passed on a message to the "New York Times" reporter, if you would-like to talk to m2. He refused. He did not want to talk to me. So, any tima someone writes an article of that sort, where they do not want to talk to the one who is in charge of one side of tha transacczon and only is giving the view of a few people

-out of Cambridge, Massachusetts, I think it falls within the 50 parcent test.

CHAIRMAN JACKSON: I think we are not here to d2 bate the quality of press reporting nor are we here to dtbate-U. S.

foreign policy within the USEC context. So, I'm going to take it back down to a very basic set of  ;

qua:tions.

MR. TIMBERS: We welcome that and we welcome our purpose in being here and that is, certification of our gassous diffusion. plants.

CHAIRMAN JACKSON: Well, let me just ask'you a couple of straightforward questions.

l-l l

l 26 My staff tells me that different companies within tho Lockheed-Martin group have contracts to operate the g20 ous diffusion plants with the USEC on the one hand and clco to prepare the upgraded safety analysis reports for DOE on the other. Is the separation of the companies within the group sufficient to avoid any potential conflicts of intcrest?

MR. TIMBERS: Well, George, do'you want to?

MR. RIFAKES: They have done more than jurt build c Chinese wall between these two companies. T1.ey act very-comp 3titively far everything. When we came over and did the trenaition, Lockheed-Martin Utility Service,was advising us.

En rgy Services, which is the LOE company, was advising them cnd I can tell you, it was a very, very tough negotiation.

N3ither Cv;r since.

side gave any qu&rter and they have acted that way CHAIRMAN JACKSON: Okay, thank you.

! If NRC certifies the two plants, what assurances l do wa have that you will, in fact, meet your commitments and timetables during the transition period? Let me give a little bit of specificity to it.

l The NRC staff has mentioned the number of

! tcchnical areas that have yet to be resolved. Also, the upgrcded safety analysis report is likely to add to the list

. of n eded improvements. These actions do have costs l

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A 27 cccociated with them, in fact, can be costly, lias the privatization affected or will it affect your ability or your decision making relative to the sch:duling of these safety improvements?

MR. TIMBERS: Well, there are two things. One is tha cost and the other is the scheduling relative to privctization. Again, we think the plants are fun safely.

DOB currently regulates them. The.te is no question in terms of the expoeure and safety to the public employees or to the cnvironment. We view this as an ongoing, continuing basis.

As comebody who has had experience on the other side of the fcnco, I do not necessarily see any difficulty in a privatization that is actually consummated during this tren2fer period.

In terms of the costs, the costs in terms of completing this regulatory process has been worked out with tha DOE representing the United States Government about how th3 costs are allocated between the U. S. Government and USEC, as a private corporation. So, on a going forward bacio, a company c- investors who would purchase USEC would und rstand cleat y that delineation of costs and rccponsibilitiet.

CllAIRMAN JACKSON: Okay.

Can USEC negotiate the upgraded safety analysis rcport with DOE or muut you accept whatever DOE provides.

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=t 28 MR.-RIFAKES: I'm not sure negotiation is a fair

, charccterization.: DOE has_the responsibility to prepare it.  :

W3, like Comission staf f, have opportunities to comment and - ~

wh0ro we_have disagreement, if we.have a technical basis for  !

thnt disagreement and it is soundi I'm sure that DOE-would  ;

cec:pt a change.

. I actually.have a question for; CHAIRMAN JACKSON:  :

DOE,..whoever the representative _is in the audience. Is the -

upgrcded' safety analysis report on schedule? Will it-datinitely be lesued in February of next year?

MR. PARKS: I am Joe Parks, Oak Ridge Operations i Office.

The answer is yes to that question. ,

CHAIRMAN JACKSON:- My understanding.is, we are to got copies of that from you at the-same time that it-is- .

criginally provided=to USEC; is that correct?  !

MR. SPARKS: We have made that comitment.  ;

CHAIRMAN JACKSON: Okay, thank you. '

Any further questions from the comissioners?:  ;

(No response.]  !

CHAIRMAN JACKSON- If not, thank you',_Mr. Timbers.

I think we will hear from the NRC staff. -

MR. TIMBERS: Thank you.

CHAIRMAN JACKSON: Mr. Taylor.

MR. TAYLOR: _ Good ~ morning.  !

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29 With me at the table today are Carl Paperiello, ,

dircctor of the Office of Nuclear Material Safety and S3fcguards, Bill Axelson on my.far right, acting deputy, l Rcgional Administrative Region III, John Hickey, the chief  :

of the Enrichment Branch and Walt Schwink, the section chief l l for the Enrichment Standards Section.

-Also, I would like to note that our two senior 1 l rcoidents are here today. I will ask them to stand, Charlie  !

l Cox from the Portsmouth plant and Ken O'Brien from the ,

l:P ducah plant.

The staff has been working for over three years to octcblish the regulatory framework and complete the initial

! cartification of the USEC enrichment plants. When we

'~briofed you last March, there were still some significant i cofoty issues which required resolution before the staff ,

could certify the plants. Those issues have now been c ticfactorily addressed by USEC.

As described in our Co 'ission paper, SECY 96-180, the staff is now prepared to move towards the issuance -

of-the initial certification based on its finding that there 10 rcasonable assurance that USEC can continue to operate

th9 Cnrichment plant safely and in compliance with NRC i

~ rcquirements.

Dr. Paperiello will now brief you on how the staff  :

-hno reached its conclusions and how it plans to continue to  ;

a I

- .. ._ -, , __ __ ___ _ _ _ _ ____ _~_._._ - . . _ _ . _ _ . -

l

30 implement the initial certification process.

Carl.

DR. PAPERIELLO: Good morning.

After the Commission briefing in March and the status of the certification of U. S. Enrichment Corporation, tho Commission directed the staff in a memorandum dated April 3rd that, after the certification process is completed Cnd prior to issuing the certification, the staff is to prcpare a paper summarizing safety assessments and be prcpared to brief the Commission. The Commission urged the stCff to move ahead as expeditiously as possible, but at the came time, to insure that safety issues were not overlooked.

The methodology used to resolve significant safety iscu:s and how it unfolded into the compliance plans in the c rtification process needed to be clearly delineated and documented. My staff and I are here to respond to these dircctions.

We will review the legislative direction from Congress, particularly since the USEC Privatization Act of 1996 passed since our last briefing. We will discuss our impicmenting regulations and briefly review the history of cortification activities. I will then ask Mr. Axelson to briofly discuss Region III's activities at the gaseous diffusion plants. Then I will discuss the resolution of the l cignificant safety issues raised at the last Commission

31 me ting. We will discuss our interaction with other gov 0rnment entities and the public and then I will discuss

.tho basic mechanics of the issuance of the certification documents and the actions.

Can I have slide number two?

[ Slide.)

DR. PAPERIELLO: The Energy Policy Act of 1992 did o number of things relevant to the gaseous diffusion plants.

U. S. Enrichment Corporation was established to lease and op: rate the gaseous diffusion plants. The Department of Enorgy was responsible for preexisting conditions at the g;ccous diffusion plants and any costs associated with those prccxisting conditions.

The law applied the antitrust laws, OSHA rcquirements and Section 206, reporting defects, what we would call Part 21 under our regulations and Section 211, employee protection of the Energy Reorganization Act to the U. S. Enrichment Corporation.

The NRC was required within two years to establish ctendards for certification of gaseous diffusion plants.

AnnuSily, the NRC, consulting with DOE and the EPA must .

rcport to Congress on the status of health, safety and cnvironmental conditions at the gaseous diffusion plants.

NRC Chall establish a certification process to ensure U. S.

Enrichment Corporation complies with NRC regulations.

l

, s. , . _ ... _ _ - _ _- _ .. _ .. - _ . _ - _ _ --_-_ _ _ --- _._

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32 i F The law provided for annual certification of

';*'was 5 diffusion plants. It assigned environmental -

regulation of the gaseous diffusion plants to the United

' -StctceLEnvironmental Protection Agency and authorized U. S. '

Enrichment Corporation to be the U. S. agent for Russian cpecial nuclear material..

7te certification process was established by the

. . Commission.in Title 10, Code of Federal Regulations, Part 76,: issued in September of 1994. The regulations 4

implement the legislation. For example,-it re@ ires us to i consult with the EPA' prior to doing the certification. It bacically, besides our normal requirements, broadens all the t I d tcilt'of the legislation. It provided for a U. S. .

Enrichment Corporation application for certification and a DOE-prepared compliance plan.

We have reviewed the submittals that were required

, by 10 CFR 76.- We have held the public meetings required by

. :the regulation. We have solicited input from the cppropriate federal,' local-and state governmental org:nizations that are required by Part 76. We.have prcpared a compliance evaluation report, detailing how the cpplication and the compliance plan meets our regulations. i Wa cre at the point to-issue an affirmative decision on the '

4 c0rtification. .

. May I have the next line?

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33  :

The latest legislation provides for the privatization of the United States Enrichment Corporation. i Th ro are some things that changed.

It extends the NRC certification interval for up to five years. It gives the NRC exclusive responsibility i for regulating radiological hazards. OSHA has the i rO ponsibility for non radiological hazards and requires a memorandum of understanding between OSKA and the NRC. It giv 3 tne NRC civil penalty authority. It prohibits-foreign control of U. S. Enrichment Corporation.

It1 authorizes one step licensing of AVLIS, atomic v:por laser enrichment. It specifies that judicial j challenges to the NRC certification decisions and rules will be in the Federal Courts of Appeal rather than the federal

. Dictrict Courts. It requires upon request that DOE accept low level waste for disposal from the gaseous diffusion plcnts and other NRC licensed enrichment facilities. ,

It does not appear to affect-the certification-  ;

cch dule. We are working to implement the provisions of the Priv;tization Act, such as, changing the enforcement policy to recognize the -- it will apply to the gaseous diffusion plcnts and to amend Part 76 to change the annual c rtification period and other provisions of the act. -

Can I have the-next alide't

[ Slide.)

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34 l

DR. PAPERIELLO: The original certification cpplication was submitted in April of 1995, but found so in d:quate that it was not accepted for review. After working with the USEC staff for several months, the

cpplicant resubmitted a revised application in September of l 1995. After review and additional revision, the application 10 now considered complete and acceptable.

The initial compliance plan w.s submitted in '

l November of 1995, but USEC also submitted numerous cxc:ptions to the plan. After several revisions, we find l

th3 compliance plan is now acceptable.

As part of the application, the U. S. Enrichment Corporation has submitted technical safety requirements.

Th:23 will replace the EDE operational safety requirements currcntly in place. These requirements play about the same rolo as technical specifications in reactor licensing and include safety limits, limiting conditions for operation, curvoillance requirements, administrative controls and many of the same things that one finds in reactor technical cp:cifications.

Because the plants currently operate under DOE rcquirements, they will do so until the NRC assumes juricdiction.

I would now like to turn over to Mr. Axelson, the ccting deputy regional administrator for Region III, who I

l

35 will briefly discuss regional activities.

MR. AXELSON: Thank you, Carl.

Some additional background information. I will briofly discuss what the Region's role has been since the En rgy Policy Act of 1992. First, we were extensively coordinating all of our regional activities with h::dquarters. We staffed each gaseous diffusion plants with a ccnior resident and a resident inspector and we organized c rcgional branch to be in alignment with headquarters including consolidation of all other Region III fuel fccility activities into one branch.

During this interim period, we provided extensive training to our inspection staffs, both headquarters and rcgion, including special training for some of our key

, c:nior managers. We trained on unique areas of gaseous diffusion operation, chemical safety, UF6 handling safety, cylinder testing and certification inspections, some new-type training that we were not familiar with. Our resident in:pectors have been extensively involved with the cortification process, assisting headquarters staff c ntinuously. We think the resident inspectors brought field operational insights into the certification process which added value.

Our inspection staffs, both headquarters and rcgion, have done some limited benchmarking at other fuel i

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36 fccilities. We senior residents routinely visit both fCcilities as benchmarking and also visited a gaseous diffusion plant in France. We plan to do some more benchmarking at other fuel facilities in the U. S.

During the interim period, we-apent considerable time in the field learning the gaseous diffusion plants and g:ncrolly-assessing plant performance. Our future in pection focus, both the region and Leadquarters, will be clo301y monitored to compliance plan, closure and evaluate tha focility's readiness to make the transition from DOE to NRC: regulatory jurisdiction over the next 180 days. We will b3 paying particular attention to USEC training and implementation of the new tech spec requirements.

Thank you, Carl.

DR. =aPERIELLO: .Thank you.

Can-I have the next slide?

[ Slide.)

DR. PAPERIELLO: At our March 1996 briefing, we toldLthe Commission there were significant safety issues that still required resolution. These involved worker-protcction,-quality assurance, technical safety rcquirements, responsibility for DOE material'in USEC lease cpaco,-elevated enrichment levels, seismic safety and the cofoty analysic report upgrade. They have been resolved.

Th3 Commission paper presents in the attachment how they i

i f L 37 wero resolved. Let mo briefly discuss them. i Worker protection. We have required USEC to have tcchnical safety requirements to ensure protection of the wark 0rs at the gaseous diffusion plants from death or-c rious injury, from potential accidents involving either  !

urcnium hexafluoride or hazardous chemicals or potential '

criticality. Essentially, the way that has been done is, tcchnical specifications that relate to either releases of matcrial or alarms or alarms not functioning, in addition to cortcin mechanical actions, kloo-have limits and cpacifications on what employees are allowed to do, areas th;y are allowed to enter, protective equipment they must- ,

uso.

Por example, if there'is a work area in which  ;

clorum are inoperable. So, that is basically how the worker protection is worked'into the technical safety requirements.

Another issue is quality assurance. Part 76 rcquires a QA program for safety systems and their support cy:tems. Revision 2 of the application, did not provide cd:quate QA for certain safety systems, such as those conc 3rning uranium hexafluoride confinement, criticality protcction, prevention and fire protection. The QA program d Ocribed in the current versions of the application and the compliance plan is acceptable to the staff and has cpplication of QA to these areas.

38 Third, technical safety requirements. Many of the tcchnical safety requirements that USEC submitted in earlier vorcions of its application were not acceptable. They were tho-cubject of numerous meetings and, frankly, it was the

'1 cot issue that was closed out. It was not until earlier this month that we had a satisfactory set of TSRs. I asked tho ctaff how the numbers compared and I have some detailed numbers, but roughly there are about half as many TSRs as thoro were OSRs.

Of course, a number of the OSRs dealt with what DOB rGfers to as asset protection and not just safety ictuOo. A number of what was in the OSRs wound up going into procedures rather than in the TSRs.

CHAIRMAN JACKSON: Carl, perhaps you'd better for tho Commission's edification delineate what-the TSRs are.

You cort of mentioned --

DR. PAPERIELLO They are technical --

CHAIRMAN JACKSON: -

versus the OSRs.

DR. PAPERIELLO: Okay.

Operational -- DOE had operational safety r quirements on the gaseous diffusion plants. They, again,

.wsro like the technical specifications for a reactor, although some of them don't --not just with safety, but alco the protection of their investment in the plant. Of pcourco,theymaponeonone. If'you read them, they are L

I

39 liko tech specs. They are multiple pieces. They are not an Cxact mapping. We wind up with-about half as many TSRs or toch cpecs as we had OSRs.

Is that responsive?

CHAIRMAN JACKSON: I thought you just said the OSR3 were like tech specs.

DR. PAPERIELLO: Well, they did not have tech cpece, but they act like tech there are limits. On a reactor, you have a safety limit. You have a limit --

CHAIRMAN JACKSON: No, I understand that.

The OSRs are like tech specs?

DR. PAPER!ELLO: Right.

CHAIRMAN JACKSON: The TSRs are?

DR. PAPERIELLO: Sort'of like tech specs, too.

CHAIRMAN JACKSON: Also.

DR. PAPERIELLO: Only in DOE's space, they are OSR3.

When we started this in April of 1995, we had only on3 --

CHAIRMAN JACKSON: I'm sorry.

(Laughter.)

DR. PAPEkIELLO: I'm sorry.

CHAIRMAN JACKSON: Never mind. I hope we have the DR. PAPERIELLO: The TSR for autoclaving,

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l 40 cutoclave testing was of particular concern. This was dicctmced at the last Commission meeting.

CHAIRMAN JACKSON: Yes, DP. PAPERIELLO: Autoclaves are used to safely i

confine uranium hexafluoride cylinder related accidental ralC2ces. While the cylinders are heated to feed their .

contcnts into tha enrichment processor, carry out sampling out transfer operations. Essentially, it is a steam jacket cround a big cylinder. There are 13 autoclaves at l Portcmouth and 22 at Paducah. The autoclaves have not been subjcct or had not been subject to tests at accident praccure since they were initially installed.

The safety concern is whether autoclaves can perform as assumed if there is an accidental release of UF6.

At iccue was the proposed pressure level of tests which was only a fraction of the accident pressure and the frequency.

of th3 tests. USEC initiated limited confirmatory tests at cccid^nt pressures in early spring of 1996 and will ruri such tosto quarterly. However, staff deemed these Lests inad:quate because certain important valves were not being tC;tCd in the current equipment configuration.

The compliance plan now commits U. S. Enrichment C rporation to expeditiously modify the autoclaves and to; ting procedures so that adequate tests can be performed.

CHAIRMAN JACKSON: What does expeditious mean?

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! I 41 I DR. PAPERIELLO: Mr. O'Brien, you have the  !

! d tkils.  !

MR. O'BRIEN: Xen O'Brien, I'm the senior resident  !

, Ct tho Paducah plant.

l Expeditiously means it will be accomplished - the time table for Paducah is by March of this year when we take i ov0r. The time table for Portsmouth, for some of the other

! valv;a is a little longer. However, they have developed  ;

enothar methodology which will find with a reasonable  ;

' cocurence that they will operate in the interim.

DR. PAPERIELLO: DOE material in USEC lease space.

i Fcr many years, certain DOH owned materials have been stored l in parts of several process buildings of both gaseous diffusion plants. These materials include both  ;

-r:dioact. ely contaminated wastes and potentially

, 031vcgeabio equipment and materials. In some cases, the -

qutntities of uranium are undetermined. The mattcr will be Erc2cived by instalJing appropriate signs and markers to .

id:ntify and delineato such areas.

  • The areas - )

CHAIRMAN JACKSON:' How many such areas are there?

DR. PAPERIELLO - Mr. O'Brien, what are the areas ,

l'that are going to be deleased and returned? ,

MR. O'BRIEN: Throughout all the buildings that th:y use for the cascade, there are a multitude of areas.

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42 Th y are anywhere from ten square feet to hundreds of square fcat that encompass previously maintained materials or old equipment or wastes that the DOE presently has and have to tCk3 care of.

CilAIRMAN JACKSON: Are there going to be any Cfforts to consolidate the material or for DOE to remove the natcrial?

MR. O'BRIEN: Right now, the issue of removing it 10 0 DOE issue. The issue of consolidation is one they have b :n looking at as part of the overall process of looking at it. They have actually done some repackaging of some of the material to make it easier for both maintaining it and inventory on an ongoing basis.

CRAIRMAN JACKSON: Is there any possibility of any of that material radiologically contaminating other areas und:r USEC's control?

MR. O'BRIEN: That is a sensitivity that we have moro monitoring in on an ongoing basis, based upon in:pection activities in the field.

CHAIRMAN JACKSON: If that is the case, who then would be responsible for the cleanup and how would we Cnforce it?

MR. O'BRIEN: Right now, DOE and USEC have a memo regarding the interaction between the two different fccilities and the material stored in the facilities. That 1

i i

43 would be something that they would have to work out between tha two of'them to ensure that safety is maintained, which 10 discussed in the certification process.

CHAIRMAN JACKSON: Has the material been completely characterized?

MR. O'BRIEN: It depends on your definition of the word characterized.

CHAIRMAN JACKSON: You can use your definition.

[ Laughter.]

MR. O'BRIENs Based upon my definition, there is Cn cdequate understanding right now of what the material is to cnsure that there is not an immediate safety concern, yco.

CHAIRMAN JACKSON: Okay, thank you.

MR. O'BRIEN: You are welcome.

DR. PAPERIELLO: The areas in which DOE material 10 Ctored will be deleased and returned to DOE, which has cgrc d to assume responsibility including regulatory rc:ponsibility for the areas for the contained material.

Noto that, DOE still owns the site and continues to conduct its own self-regulated operation separate from USEC in both 1ccc d and deleased areas. This situation will require l

cp cial attention and coordination after cet-ification to cccure that DOE activities do not negatively impact the i COfGty of USEC operations regulated by the NRC.

6 I _

L I 44 l Elevated enrichment levels. USEC has requested

  • tha certification of the Portsmouth plant at uranium  !

! enrichment levels of ten percent or less. By doing so, it cvoids more. criticality protection and safeguards, physical  !

c:curity and material control and accountability i rcquirements accompanying possession of highly enriched i urcnium. Currently, unplanned enrichment in small amounts  !

b;tw:en' ten and 20 percent is occurring in the process at  :

tho Portsmouth gaseous diffusion plants, caused by both the i USEC enrichment process and DOE blending down of HEU. i You insert the material into the cascade and with  !

tho-way-the cascades work, this is unavoidable. - The issue is rcsolved by having USEC agree to establish and maintain  !

cdditional safety and safeguards measures as long as the l down-blending program continues in that portion of the c20c:de where this is occurring. -

Seismic safety. In 1995, DOE identified ctructural weaknesses in two of the four main processing i buildings at the Paducah plant. Now, the Paducah plant is .

loc ted in the New Madrid area, you know, in that part of th3 United States.

DOE-ordered USEC to make plant l' modifications to improve seismic capability. Compensatory ccfoty measures were also ordered, including operating -

( prcccures and personnel access restrictions until plant ,

modifications could be completed.  :

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Current schedules call for completion of plant  !

. modifications by late 1997. Since the modifications will  ;

ntt be completed before initial certification, the c:ntinuation of interim and compensatory measures and completion of-plant modifications have been incorporated into the compliance plan for the Paducah plant. .

CHAIRMAN JACKSON: Excuse me, Dr. Paperiello. l Did the NRC staff conduct a separate analysis of I th] DOE-ordered. modifications and the interim compensatory meScures? I mean, how did we determine that the -

modifications and interim measurer were adequate?  :

DR. PAPERIELLO: John?  !

MR. HICKEY: Well, we did not conduct a completely

  • ind: pendent-analysis, but we reviewed the analysis that was dona and satisfied ourselves that it was a reasonable and thorough analysis and that-the modifications were cppropriate and that the plan was approprikte. .

CHAIRMAN JACKSON: So, we determined that these modifications and cha.ngee were sufficient for Paducah to operate until this Decemoer, 1997 updated seismic hazard ,

r port?

MR. HICKEY: Correct.

COMMISSIONER ROGERS: Just on that, in reading i

.ycur slide, on this bullet you say USEC to submit updated coicmic analysis by December, 1997. What you just seem to

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c y to me in, we know what is in that analysis; is that  ;

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- MR. HICKEY: That is referring to the actual catimate of the sefr.mic risk at the site, not the mechanical l cnd (tructural fixes to the plant.

- Cole (ISSIONBR PMiBRS: Right.

. NR. HICKEY: 'ihe analysis csed data up through 1985 and more data has come in since then. So, we want an '

updnted analyJis that refkects the newer seismic data that ,

h o come in sinct hFaf. -

DR. PAPECIFsLO: We).ls ' right nov, the plints will ,

only withstand an earthquake acceleration -- thest 3 particular plantw where they ceed the seismic upgrade -- of point- .05g, which is estiinated to be an 80-year return

.carthquake. The plants were believed to end were expected

.in the 1985 safety analysis report-to withstand a 250 year rcturn earthquake, which was an acceleration of .15g._

What wo arc doing is -- and what the upgrade is, is to

.upgrcde tha plant to withstand that stress.

There have ber:n some iwsues raised that mora-rcc nt seismic data which is possessed by the- U. S. -

G ological Survey, but which is not published and not peer

  • r0 viewed, .rmny 'suggest somewhat higher accelerations on a ,

250-year return: frequency. So, the decision to be made was,  ;

do wa wait until'that day to get analyzed, put off any_

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47 upgrcde for another couple of years which may make no difference or do we do-the immediate repair now. Get the plcnt up to the .159 thing and then what do you do with the n:w data.

We decided that if it makes-a big difference ard you con justify spending an additional money and adequate prot 0ction,-using the kind of cost benefit that we would use-in b2ckfit, that is how we would make the decision on how to u;o the new data. It is really.a trade off. Do we turn cround and wait a couple more years and do nothing or do we upgrcde now and then-relook at the new data and see whether or not they make a substantial difference. If they make a cub;tential difference, then you will do more upgrade. If

-it do:s not make a substantial difference, you won't.

CHAIRMAN JACKSON: Will the updated seismic hazard cnSly0is incorporate or be required to incorporate this po;t 1985 data?

15t. HICKEY: Yes.

DR. PAPERIELLO: Yes.

CHAIRMAN JACKSON: Okay.

We are convinced that the compensatory measures

. cad the changes, the modifications that have alread mada cre sufficient to ensure adequate protection. y been DR. PAPERIELLO: Yes, because you run the cascades et cub-atmospheric limits to release. We have done the l

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48 cecid:nt analysis. We had it submitted. We-did an ind: pendent analysis and the off-side effects are very limitcd.

Finally, the' upgrade.of the safety analysis report. Since 1985, DOE has initiated various efforts to confirm assumptions, correct errors, address weaknesses and rcduc3 uncertainty in the existing SAR for each gaseous

' diffusion plant, with a completion schedule date of February of 1997. The staff is requiring that, within six months after DOE issuance of the upgraded safety analysis report cnd cny associated findings, USEC must review and submit them to the NRC along with proposed resolutions of findings Cnd cny proposed certificate modifications.

There are assumptions made in the application that thic SAR upgrade is going to have to confirm.- Obviously, if it does not confirm them, that will have to be reconciled.

  • The. upgraded SARs will be reviewed and approved by th3 NRC and then will constitute the operating safety basis for'the gaseous diffusion plants. This matter is a compliance plan item.

Can you show the next slide?

'[ Slide.)

DR. PAPERIELLO: We have conducted all the

. coordination with other federal, state and local agancies and members of the public required by the_ regulations. We I

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49 rCccived 11 comments letters, including those from two EPA rcgions which were response to the consultation requirements of Part 76. The compliance evaluation reports addross all tha comments received in detail.

Most of the issues most trequently raised involve mattors addressed in the compliance plan, such as, seismic iccucs and emergency preparedness or addressed by law, such cc, disposal of waste, principally dapleted uranium tails cnd civil penalty authority. This its not meant to be all-inclusive, but when I read through the comments and sort of mada check marks on how rany appeared most often, they were tho ones that appeared most often. We have addressed every comment that we received in the compliance evaluation rcport.

The next slide.

[ Slide.)

DR. PAPERIELLO: We completed the required coordination with EPA and OSHA and we signed the memorandum of MOU with OSHA on July 26th of 1996.

Next slide.

[ Slide.)

DR. PAPERIELLO: Part 76.62 (a) provides that upon finding of compliance with the Commission's regulations for iccunnce of a certificate and/or approval of a compliance plcn, the director of the Office of Nuclear Material Safety l

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l cnd Safeguards shall issue a: written decision ruplaining the  !

d:cicion. The director may issue a certificate of ,

compliance covering those areas where the corporation is in '

compliance with applicable Commission requirements and cpprove a compliance plan for the remaining areas, if any, i of non-compliance.

I am ready to take the actions that are specified l in that regulation.-

CRAIRMAN JACKSON: I think that your slide l relative to issuing the actual certificates of compliance by l August 30th should .be verbally corrected relative to what is

, rcquired.

l DR. PAPERIELLO: .Yes.

After we submitted the paper to the Commission, ,

th3 Office of General Counsel informed us that.they believed that-the certificate of decision should be issued first and l .th n after the 15-day comment period, that the certificate of compliance De issued if-there were no comments.

May I have the next slide? ,

l [ Slide.)

DR. PAPERIELLO: I would propose to issue the "Fcd0ral-Register" notice with the director's decision. I would also issue a proposed compliance certificate and the compliance evaluation report for each plant. The compliance l .ctrtificate has certain requirements in it, generally very 4

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51 i chort, the usual tie down conditions. The corporation has '

to conduct its operations in accordance with the statements '

cnd representations in the certificate application and in tho compliance plan.

They have to conduct operations in accordance with  !

tho technical specifications requirements. It will become  ;

i cffective on March 3, 1997. It is exempt 3d from special -

. cuthorizations, as noted in Chapter 1, Section 1.8 of the i S3foty Analysis Report. What that really deals with is ,

icboling containers.

Part 20 requires every container of radioactive- l matorial to bear a conspicuous label. It is rather normal

, for us to exenpt fuel facilities and I even believe rc2ctors, but I certainly know fuel facilities. Every  :

contciner of radioactive material does not have to be.  :

Icbeled with radioactive material.~ Basically,-you label the

-wholo facility, the area in which the material is used, the >

containers of a certain size and diminish that contain rcdioactive material. '

The second exemption is from the requirements of '

. 10 CFR 7631 and 7636, requiring the submittal of an annual r n:wal. What we have done is, condition the license to mako it reflect what is in the recent law, rather than what 10 in-the regulations. .Of course, we are amending the regulations to conform with the new law.

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l 52 i We are proposing that the certificate shall run  !

Lthrough'the end of 1998 and the renewal application will be

-filed lln April of 1998. So essentially,.we are looking at- ,

tho-initial certification for two years. The logic behind '

that is, most of the compliance plan items will be complete  ;

by 1998. That-provides a good opportunity to renew the teartificate, most likely, for a longer period of time.  !

Can I have the next slide?  !

[ Slide.) l DR. PAPERIELLO: There is a limited 15 day appeals. l proc 0ss for the director's decision. The appeal is limited to oither the U. S Enrichme..t-Corporation or any person >

who20 interests may be affected and who has either provided written comments?in response to-previous " Federal Register" notice or provided oral comments at public meetings. . Thc

-percon must file a petition with the commission within 15 d;ya after.the'" Federal Register" notice publication. The d:cicion becomes final unless Commission grants the petition ,

for review or otherwise acts within 60 days after the publication of the " Federal Register" notice.

If no petition is received in the designated 15-day period, I propose to issue the final certificates.

Next slide.. ,

(Slide.)

DR. PAPERIELLO: Power' reactor licensing. There 1

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53 C20 o preoperational testing program and usually a shakedown period prior to' licensing when the licensee would operate und:r its proposed technical specifications prior to initial lic nsing. That is to find out whether they work, if people trained and are used to operating under those requirements.

In the case of the gaseous diffusion plants, they

.cre' operated-under DOD's regulations-and DOE's. Operational C2foty requirements. These are similar but not identical to th3 NRC's technical safety repirements.- At USEC's request, w3.htd planned a phase-in period of 120 days in order to

.rcvice procedures and, more importantly, train the staff during this transition period.

CHAIRMAN JACKSON: Does that mean that DOE will havai the enforcement authority --

DR. PAPERIELLO: Yes.

CHAIRMAN JACKSON: -- or we will have certified tho plants?

DR.-PAPERIELLO: We will have certified, but to

'become effective on March 3rd. In the interim, during the

, transition period, DOE regulates and has enforcement cuthority.

On August 16th, the USEC informed me that 120 1 daya, based-on recent experience, was probably too short for th3-process and-180 days was-requested.

After consulting with DOE who decided that that was -- if we agreed, that was h

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'rcccenable, we decided that the certificate's effective-date would be set at March 3rd as the date for the NRC to arsume juricdiction. We originally proposed, I thir.k, D3cember 29th.-

We have NRC resident inspectors at the site and th y have been there since-1994. They will be inspecting impicmentation of compliance plan items, actions during the trenoition period.

The last slide.

[ Slide.) -

DR. PAPERIELLO - We have developed a certification

- proc:ss and a regulatory basis for making required findings on'the application and the compliance plan. We believe that the cpplication-and the compliance plan provide for continued-safe operation of-the-gaseous diffusion plants.and 1tho,ctaffsis ready to issue the initial certification d3ciclon.- We are also prepared to assume regulatory

ovoraight from DOE following-the transition period.

-In addition-to the summary shown here, I want to toll you that my staff will prepare the following

= proc;dures for-conducting the annual assessments for Congress, the backfitting. procedures, if need,11f we need to backfit and a recertification standard review plan. These

-will be-issued as similar procedures for-analogous cctivities at reactors or fuel' facilities, as appropriate.

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Thank you.

CHAIRMAN JACKSON: Thank-you, Dr. Paperiello.

I-think1that the recertification standard:-review

-plan'-is'very important from the point _of view of lessons 11carned.

DR.-PAPERIELLO: Yes, o

_. CHAIRMAN JACKSON: You had spoken _with-the Commission about that_and certainly_with me at an earlier -

date. In fact,_will that be in place in a time frame that

le= timely --

DR.JPAPERIELLO: Definitely.

CHAIRMAN JACKSON: -- for the certification?

DR. PATERIELLO:- Definitely.

CHAIRMAN JACKSON - Okay.

So, . there will be suf ficient time: to complete the

-rGcartification decision by December of 1998?

DR.-PAPERIELLO: That's right.

CHAIRMAN JACKSON: Okay.

Commissioner Rogers?- _ _

1 COMMISSIONER ROGERS: No,.I-think all of my questions have been dealt with, i CHAIRMAN JACKSON: Commissioner Diaz?

COMMISSIONER DIAZ: No questions. l CHAIRMAN JACKSON:- Well, the Commission-would like -l to thank the staff and Mr.-Timbers for an excellent briefing i

! . 56 -

, en the-results.of'the-safety assessment for USEf's gaseous, diffusion plants. I-compliment the staff'for-your diligent

. 'offortslin evaluating USEC's certification application as i

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wall as for preparing to take overzthe: regulatory _ oversight '

cnd bringing this first certification _ process to closure -

-ItDis'new for us and I=am sure it is new:for USEC.-

So, the1 Commission would also like to:thank Mr. Timbers for

' hic presentation as_well as the: responsiveness of the Department of. Energy in attending and' answering questions-at thio briefing.- _ _

The Commission is being asked to approve by

. -ntgative consent the issuance by August-30, 1996 of the 4

c3rtification and the follow-on-period, the certificates of compliance for-the-USEC's two gaseous diffusion plants.- So, I<cncourage my fellow. commissioners and myself .ta) review the mattor expeditiously relative to-those-dates.- -

i - I'would~ note that, once the. plants are certified, j thara are still-a. number of issues that must be resolved both during the transition phase.from DOE to NRC juricdiction.1 Then-following receipt of the safety _ analysis i: rcport upgrade in"early 1997 that we_ discussed, that-the USEC will'have to make.a determined effort-to implement the

,n0rd:d-changes in a timely manner.

So, again,-I-thank everyone. Unless there are further* comments, we are adjourned.

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Pon, at 11:24 a.m., the briefing was concluded.)

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