AUDIT REPORT 

Audit of NRC’s License Renewal Program 

OIG-07-A-15 September 6, 2007 

All publicly available OIG reports (including this report) are accessible through 

NRC’s Web site at: 

http:/www.nrc.gov/reading-rm/doc-collections/insp-gen/ 
 September 6, 2007 

MEMORANDUM TO: Luis A. Reyes 

 Executive Director for Operations 

FROM: Stephen D. Dingbaum /RA/ 

 Assistant Inspector General for Audits 

SUBJECT: AUDIT OF NRC’S LICENSE RENEWAL PROGRAM 

 (OIG-07-A-15) 

This report presents the results of the subject audit. The formal comments provided by 

your office on July 6, 2007, are presented in their entirety as Appendix E to this report. 

Appendix F contains OIG’s response. 

Please provide information on actions taken or planned on each of the 

recommendations within 30 days of the date of this memorandum. Actions taken or 

planned are subject to OIG follow-up as stated in Management Directive 6.1. 

If you have any questions or wish to discuss other issues, please call Tony Lipuma at 

415-5910 or me at 415-5915. 

Attachment: As stated 
Electronic Distribution

Frank P. Gillespie, Executive Director, Advisory Committee on Reactor 

 Safeguards/Advisory Committee on Nuclear Waste 

E. Roy Hawkens, Chief Administrative Judge, Atomic Safety and 

 Licensing Board Panel 

Karen D. Cyr, General Counsel 

John F. Cordes, Jr., Director, Office of Commission Appellate Adjudication 

William M. McCabe, Chief Financial Officer 

Margaret M. Doane, Acting Director, Office of International Programs 

Rebecca L. Schmidt, Director, Office of Congressional Affairs 

Eliot B. Brenner, Director, Office of Public Affairs 

Annette Vietti-Cook, Secretary of the Commission 

William F. Kane, Deputy Executive Director for Reactor 

 and Preparedness Programs, OEDO 

Martin J. Virgilio, Deputy Executive Director for Materials, Waste, Research, 

 State, Tribal, and Compliance Programs, OEDO 

Darren B. Ash, Deputy Executive Director for Information Services 

 and Chief Information Officer, OEDO 

Vonna L. Ordaz, Assistant for Operations, OEDO 

Timothy F. Hagan, Director, Office of Administration 

Cynthia A. Carpenter, Director, Office of Enforcement 

Charles L. Miller, Director, Office of Federal and State Materials 

 and Environmental Management Programs 

Guy P. Caputo, Director, Office of Investigations 

Edward T. Baker, Director, Office of Information Services 

James F. McDermott, Director, Office of Human Resources 

R. William Borchardt, Director, Office of New Reactors 

Michael F. Weber, Director, Office of Nuclear Material Safety and Safeguards 

James E. Dyer, Director, Office of Nuclear Reactor Regulation 

Brian W. Sheron, Director, Office of Nuclear Regulatory Research 

Corenthis B. Kelley, Director, Office of Small Business and Civil Rights 

Roy P. Zimmerman, Director, Office of Nuclear Security and Incident Response 

Samuel J. Collins, Regional Administrator, Region I 

William D. Travers, Regional Administrator, Region II 

James L. Caldwell, Regional Administrator, Region III 

Bruce S. Mallett, Regional Administrator, Region IV 

 
Audit of NRC’s License Renewal Program 

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I. EXECUTIVE SUMMARY 

BACKGROUND

U.S. Nuclear Regulatory Commission (NRC) regulations limit the 

term of an initial nuclear reactor operating license to 40 years. 

However, the regulations also allow a license to be renewed for an 

additional 20 years given that the initial term was based on 

economic and anti-trust considerations, not technical limitations. 

Through technical research, NRC concluded that many aging 

phenomena are readily managed and therefore should not preclude 

renewal of a reactor license. 

NRC published requirements for license renewal in the Code of 

Federal Regulations (CFR). 10 CFR Part 541

 addresses operating 

safety issues ─ the main focus of this Office of the Inspector 

General (OIG) report. Part 54 was amended in 1995 to concentrate 

NRC’s reviews on how licensees manage adverse effects of aging 

to provide reasonable assurance that plants will continue to operate 

in accordance with their current licensing basis for the period of 

extended operations. 

PURPOSE

The purpose of OIG’s audit was to determine the effectiveness of 

NRC’s license renewal safety reviews. 

RESULTS IN BRIEF

Overall, NRC has developed a comprehensive license renewal 

process to evaluate applications for extended periods of operation. 

However, OIG identified areas where improvements would enhance 

program operations. Specifically, 

 

1

10 CFR Part 54, Requirements for Renewal of Operating Licenses for Nuclear Power Plants.
Audit of NRC’s License Renewal Program 

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3⁄4 License renewal reporting efforts need improvements 

o Reporting issues exist because the agency has not fully 

established report-writing standards or a report quality 

assurance process. As a result, those who read the 

reports could conclude that regulatory decisions are not 

adequately reviewed and documented. 

3⁄4 Guidance for removing licensee documents from audit sites 

could be clarified 

o Inconsistencies regarding removal of documents result 

from audit teams being prohibited by their management 

from removing licensee-supplied documents from audit 

sites, whereas the inspectors do keep such documents to 

assist in report writing. As a result, it is more difficult for 

audit team members to write their reports without using 

workaround tools. 

3⁄4 Consistent evaluation of operating experience would improve 

NRC reviews 

o Although expected to, audit team members do not 

consistently review or independently verify licenseesupplied operating experience information because 

program managers have not established requirements 

and controls to standardize the conduct and depth of 

such reviews. Consequently, license renewal auditors 

may not have adequate assurances that relevant 

operating experience was captured in the licensee’s 

renewal application for NRC’s consideration. 

3⁄4 More attention is needed to planning for post-renewal 

inspections 

o Post-renewal inspections are considered vital to ensure 

that licensees adhered to commitments made for license 

renewal. However, the agency has only recently focused 

its attention on developing and overseeing details 

associated with these inspections. Inadequate planning 

increases the risk that: licensees could enter into the 

extended period of operation without being in full 

compliance with license renewal terms; inspections will 
Audit of NRC’s License Renewal Program 

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be inconsistently implemented; and inspection and 

technical support resources will be unavailable when 

needed. 

3⁄4 License renewal issues need evaluation for backfit application 

o When NRC imposes new staff positions resulting in new 

review standards, a documented justification is required 

pursuant to the backfit rule. However, new license 

renewal review standards have not followed NRC’s 

backfit policy because NRC does not have a mechanism 

or methodology to trigger such a backfit review. 

Consequently, the use of different review standards 

without a backfit justification may result in several 

management challenges. 

RECOMMENDATIONS

This report makes eight recommendations to help NRC improve the 

effectiveness of its License Renewal Program. Seven of the 

recommendations are addressed to the Executive Director for 

Operations. In consideration of the agency’s formal comments 

concerning the applicability of the backfit rule to license renewal 

applicants, the last recommendation is directed to the Commission. 

A Consolidated List of Recommendations appears in Section IV. 

OIG ANALYSIS OF AGENCY COMMENTS

On May 8, 2007, OIG issued its draft report to the Executive 

Director for Operations. On July 6, 2007, the Deputy Executive 

Director for Reactor Programs provided a formal response to this 

report in which the agency disagreed with OIG’s finding regarding 

applicability of the backfit rule to license renewal applicants. The 

agency’s transmittal letter and specific comments on this report are 

included in their entirety as Appendix E. 

This final report incorporates revisions made, where appropriate, as 

a result of the subsequent meetings with staff and the agency’s 

written comments. Appendix F contains OIG’s analysis of the 

agency’s formal response. 
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ABBREVIATIONS AND ACRONYMS 

ACRS Advisory Committee on Reactor Safeguards 

ADAMS Agencywide Documents Access and Management 

System 

CFR Code of Federal Regulations 

DLR Division of License Renewal 

FY fiscal year 

GALL Generic Aging Lessons Learned 

ISG Interim Staff Guidance 

LRA license renewal application 

NEI Nuclear Energy Institute 

NRC Nuclear Regulatory Commission 

NRR Office of Nuclear Reactor Regulation 

OGC Office of the General Counsel 

OIG Office of the Inspector General 

SOC Statement of Considerations 

SSC systems, structures, and components 
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TABLE OF CONTENTS 

EXECUTIVE SUMMARY....................................................................................i 

ABBREVIATIONS AND ACRONYMS ...............................................................v 

I. BACKGROUND ....................................................................................... 1 

II. PURPOSE................................................................................................ 6 

III. FINDINGS................................................................................................ 7 

 A. LICENSE RENEWAL REPORTING EFFORTS NEED IMPROVEMENTS ........... 7 

 B. GUIDANCE FOR REMOVING LICENSEE DOCUMENTS FROM AUDIT 

 SITES COULD BE CLARIFIED .............................................................. 14 

 C. CONSISTENT EVALUATION OF OPERATING EXPERIENCE WOULD

 IMPROVE NRC REVIEWS................................................................... 18 

 D. MORE ATTENTION IS NEEDED TO PLANNING FOR POST-RENEWAL 

 INSPECTIONS.................................................................................... 24 

 E. LICENSE RENEWAL ISSUES NEED EVALUATION FOR BACKFIT 

 APPLICATION.................................................................................... 31 

 

IV. CONSOLIDATED LIST OF RECOMMENDATIONS .............................. 36 

V. AGENCY COMMENTS .......................................................................... 39 

 

 

 APPENDICES

A. SCOPE AND METHODOLOGY ............................................................... 41 

B. NRC’S DUAL-TRACK LICENSE RENEWAL REVIEW PROCESS .......... 43 

C. OIG CONTENT ANALYSIS ...................................................................... 45 

D. EXAMPLES OF LICENSE RENEWAL APPLICATION TEXT 

REPEATED IN NRC DOCUMENTS ......................................................... 49 

E. FORMAL AGENCY COMMENTS............................................................. 51 

F. OIG ANALYSIS OF AGENCY COMMENTS............................................. 55 
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Audit of NRC’s License Renewal Program 

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I. BACKGROUND 

The Atomic Energy Act of 1954, as amended, and U.S. Nuclear 

Regulatory Commission (NRC) regulations limit the term of an initial 

nuclear reactor operating license to 40 years. The regulations also 

allow a license to be renewed for an additional 20 years given that 

the initial term was based on economic and anti-trust 

considerations, not technical limitations. Nonetheless, NRC 

recognizes that some plant systems, structures, and components 

(SSC) may have been engineered with the expectation of a limited 

40-year service life. Through technical research, NRC concluded 

that many aging phenomena are readily managed and therefore 

should not preclude renewal of a reactor license. 

In the early 1990s, NRC published requirements for license renewal 

in the Code of Federal Regulations (CFR). 10 CFR Part 51 

addresses environmental issues.2

 10 CFR Part 543 addresses 

operating safety issues ─ the main focus of this Office of the 

Inspector General (OIG) report. Part 54 was amended in 1995 to 

concentrate NRC’s reviews on how licensees manage adverse 

effects of aging to provide reasonable assurance that plants will 

continue to operate in accordance with their current licensing basis 

for the period of extended operations. 

In July 2001, NRC issued NUREG-1801, Generic Aging Lessons 

Learned (GALL) Report, as the agency’s primary technical basis 

document for NRC-approved programs for managing the aging of a 

large number of structures and components that are subject to 

aging management reviews. 

 Agency Assumptions 

The two key principles of license renewal are: 1) NRC’s existing 

regulatory process adequately ensures that currently operating 

plants will continue to maintain adequate levels of safety during 

extended operation, with the possible exception of detrimental 

 

2

 In response to the National Environmental Policy Act, NRC also pursued an environmental rule, 10 CFR 

Part 51, Environmental Protection Regulations for Domestic Licensing and Related Regulatory Functions, 

revised 1996. 

3

 10 CFR Part 54, Requirements for Renewal of Operating Licenses for Nuclear Power Plants.
Audit of NRC’s License Renewal Program 

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effects of aging on certain SSCs, and a few other issues that may 

arise during the period of extended operation; and 2) each plant’s 

licensing basis is required to be maintained during the renewal term 

in the same manner and extent as during the original licensing 

term. NRC incorporates the following assumptions into its reviews 

of license renewal applications: 

3⁄4 an applicant should rely on the plant’s current licensing basis,4

actual plant-specific experience, applicable industry-wide 

operating experience, and existing engineering evaluations to 

determine which plant SSCs are the initial focus of a license 

renewal review; and 

3⁄4 a plant’s “active” components5 do not require additional review 

during license renewal because aging effects of active 

components are more readily detected and corrected through 

routine surveillance and maintenance. Therefore, the license 

renewal process limits its reviews to “passive and long-lived” 

plant structures and components,6 time-limited aging analyses,7

and aging management programs for renewal-related 

components. 

 Review Process and Program Responsibilities 

In order to assess the reliability of its assumptions about aging, 

NRC uses a review process that proceeds along two parallel tracks: 

 

4

 “Current licensing basis” is the set of NRC requirements applicable to a specific plant and a licensee’s 

written regulatory commitments for ensuring compliance and operation within applicable NRC requirements 

and the plant-specific design basis that are docketed and in effect. 

5 “Active” components include motors, diesel generators, cooling fans, batteries, relays, and switches. 

6 “Passive” and “long-lived” structures and components are those that perform an intended function without 

moving parts or a change in properties, and those not subject to replacement based on qualified life or 

specified time period, respectively. Passive and long-lived SSCs include reactor vessels, reactor coolant 

system piping, steam generators, pressurizers, pump casings, and valve bodies. 

7

 “Time-limited aging analyses” are licensee calculations and analyses that: involve SSCs within the scope 

of license renewal; consider aging effects; involve assumptions defined by the current 40-year operating 

term; are relevant for making a safety decision; involve basis for decision that SSCs are capable of 

performing their intended functions; and are contained in or referenced in the current license basis. 
Audit of NRC’s License Renewal Program 

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a safety review (Part 54) and an environmental review (Part 51). 

Figure 1 reflects a simplified license renewal safety review process. 

(See Appendix B for the NRC’s dual-track license renewal review 

process.) 

 Figure 1 

 

 Source: OIG-creation based on NRC information 

As reflected in Figure 1, the safety review process consists of 

headquarters-based technical reviews, on-site audits, and regionbased inspections. Primary responsibility for the license renewal 

program lies within NRC’s Office of Nuclear Reactor Regulation 

(NRR), Division of License Renewal (DLR). DLR project teams, 

consisting of technical auditors and engineer consultants, perform 

on-site audits to review the supporting documentation for those 

aging management programs and aging management reviews cited 

in the licensee’s application as consistent with the GALL Report or 

based on NRC-accepted past precedence. Concurrently, NRR’s 

headquarters-based engineering divisions review scoping and 

screening of SSCs, plant-specific aging management programs and 

aging management reviews, and other items not addressed in the 

GALL Report (e.g., unresolved or emergent issues). The results of 

the NRC staff’s review are documented in a safety evaluation 

report. 

Additionally, teams of specialized inspectors from NRC’s four 

region offices travel to the reactor sites to verify the licensees’ 

claims that current or proposed aging management programs will 

be effective. 

Region 

issues 

inspection 

Report & RA 

Letter 

HQ conducts 

tech reviews & 

on-site audit(s) 

HQ issues 

Safety 

Evaluation 

Report

ACRS 

Review 

Simplified Safety Review Process 

Safety review 

of license 

renewal 

applications Regions 

conduct on-site 

inspection(s) 

NRC issues

decision on 

renewal 
Audit of NRC’s License Renewal Program 

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The Advisory Committee on Reactor Safeguards (ACRS) acts as 

an independent third-party oversight group who reviews safety 

evaluation report findings as well as inspection report findings and 

makes recommendations on the renewal application to the 

Commission. Throughout the process, NRC's Office of the General 

Counsel (OGC) provides legal and regulatory interpretations as 

needed and formally reviews and concurs on the safety evaluation 

reports. When applicable, the Atomic Safety and Licensing Board 

rules on stakeholders’ requests for license renewal hearings. 

Application Review Timelines and Costs 8

As shown in Figure 2, renewal application processing can take 

more than 4 years ─ approximately 2 years and $20 million is spent 

by licensees to research, document, and prepare a license renewal 

application for submission. For NRC’s review and decision on an 

application, it typically takes 22 months and $4 million without a 

hearing, and a projected 30 months9

 with a hearing. 

Figure 2 

 Application Preparation and Review Process 

 

 

8

 Regulations allow for renewal applications to be submitted as early as 20 years before expiration of a 

current license, but licensees technically have until the end of their 40-year license to apply for an extension. 

However, NRC notes that if a “sufficient” application is not submitted at least 5 years prior to license 

expiration, a plant may have to cease operations until the renewal decision is made. 

9

 OIG notes that NRC’s projected 30-month schedule, including a hearing, has not yet been tested because 

none of the license renewals granted to date went through a hearing process. 
Audit of NRC’s License Renewal Program 

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Status of License Renewals 

The agency’s extensive experience with license renewal issues 

began in 1982. As of April 2007, approximately one-half of the 

Nation’s licensed reactors have either received renewed licenses or 

are currently under review. Specifically, license extension requests 

for 48 of the 104 licensed power reactor units in the U.S. have been 

reviewed and approved. Additionally, eight renewal applications 

are currently under review while licensees representing an 

additional 23 plants have announced intentions to submit renewal 

applications through 2013. 

 Proactive License Renewal Program Features 

NRC incorporated several features into the license renewal 

program that correspond to the agency’s Principles of Good 

Regulation. For example, 

3⁄4 Several facets of openness are built into the process for public 

involvement, including open meetings and opportunities to 

request an adjudicatory hearing. 

3⁄4 For a more efficient license renewal review process: 

 

o the GALL Report was developed to document the basis 

for determining whether existing programs are adequate 

and for identifying those programs that warrant particular 

attention during NRC’s review of a license renewal 

application, 

o NRC Regulatory Guide 1.18810 helps standardize the 

format and content of license renewal applications, and 

o the audit function enables NRC staff to review more 

applications simultaneously by reducing the need for 

requests for additional information. 

 

10 Regulatory Guide 1.188, Standard Format and Content For Applications to Renew Nuclear Power Plant 

Operating Licenses. 
Audit of NRC’s License Renewal Program 

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3⁄4 Some NRC staff and industry representatives made favorable 

comments to OIG about the clarity of NRC’s guidance regarding 

the expected content for a renewal application and NRC’s 

adherence to its established review schedule, which provides 

reliable planning assistance to NRC technical engineering 

divisions and future license renewal applicants. 

II. PURPOSE 

The purpose of OIG’s audit was to determine the effectiveness of 

NRC’s license renewal safety reviews. Appendix A provides a 

detailed description of the audit’s scope and methodology. 
Audit of NRC’s License Renewal Program 

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III. FINDINGS 

Overall, NRC has developed a comprehensive license renewal 

process to evaluate applications for extended periods of operation. 

However, OIG identified areas where improvements would enhance 

program operations. Specifically, 

A. license renewal reporting efforts need improvements, 

B. guidance for removing licensee documents from audit sites 

could be clarified, 

C. consistent evaluation of operating experience would improve 

NRC reviews, 

D. more attention is needed to planning for post-renewal 

inspections, and 

E. license renewal issues need evaluation for backfit 

application. 

A. NRC’s License Renewal Reporting Efforts Need Improvements 

 

Improvements to the staff’s reporting efforts could provide 

necessary support for NRC’s license renewal decisions. Adequate 

documentation of review methodologies and support for staff 

conclusions in license renewal reports is important for supporting 

the sufficiency and rigor of NRC’s review process. However, the 

NRC staff does not consistently provide adequate descriptions of 

audit methodology or support for conclusions in license renewal 

reports. This is because DLR has not fully established reportwriting standards and does not have a report quality assurance 

process to ensure adequate documentation. As a result, 

stakeholders and others who read the reports could conclude that 

regulatory decisions are not adequately reviewed and documented. 

Review Documentation Standards and Current Guidance

NRC's license renewal reviews must be supported to demonstrate 

the adequacy and rigor of NRC’s review process. One way to 

accomplish this is to have documentation to support conclusions in 

NRC’s license renewal reports, which include the license renewal 
Audit of NRC’s License Renewal Program 

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audit, inspection, and safety evaluation reports. DLR’s audit 

guidance also acknowledges the importance of documentation for 

reaching conclusions in the audit reports. 

DLR is responsible for conducting on-site audits of the license 

renewal applications. The license renewal auditors, referred to 

internally as the project team, use a handbook titled, Project Team 

Guidance for License Renewal Application Safety Reviews, to 

guide the conduct of the audit. A peer review checklist in the 

Project Team Guidance reminds the reviewer to make sure the 

conclusions in the audit report are supported by adequate technical 

bases. 

Review Methodology and Conclusions are Not Fully Described 

in Reports 

License renewal audit, inspection, and safety evaluation reports do 

not provide full descriptions of the methodology the staff used to 

review an aging management program or provide full support for 

the staff’s conclusions. In some cases, the language presented in 

the audit and safety evaluation reports mirrors the language 

provided by the licensee in its license renewal application, which, 

according to NRC, may have been taken by the licensee out of the 

GALL Report and placed in the application. 

OIG performed a content analysis of audit, inspection, and safety 

evaluation reports for a judgmental sample11 of license renewal 

applications submitted between September 2000 and January 

2006.12 For its analysis, OIG focused on narrative passages in the 

applications and reports that addressed the operating experience 

program element for a selection of aging management programs.13 

OIG’s analysis resulted in 458 report narrative samples. 

 

11 Results of this judgmental sample are limited to the population of license renewal applications sampled. 

12 The judgmental sample of applications represents a cross-section of plant ages, technologies, year of 

renewal, NRC application review process used, and NRC region. A detailed description of OIG’s content 

analysis methodology is presented in Appendix C. 

13 Operating experience is one of ten GALL program elements that a licensee’s aging management program 

must satisfy in order to secure approval from NRC. 
Audit of NRC’s License Renewal Program 

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OIG found that approximately 76 percent of the audit, inspection, 

and safety evaluation report samples did not provide substantive 

NRC comments about operating experience. Operating experience 

is a critical facet of the review process. For its analysis, OIG 

defined non-substantive samples as those that 1) did not describe 

any review methodology for operating experience or provide any

specific support for the staff’s conclusions; or 2) provided 

information that was identical or nearly identical to the information 

provided in the licensee’s renewal application. Figure 3 depicts, by 

plant license renewal application, the percent of report samples that 

did not provide substantive NRC comments about operating 

experience. 

Figure 3 

Percent of Report Samples Lacking Substantive Operating Experience 

Comments, by Plant 

0% 20% 40% 60% 80% 100%

Palisades

Oyster Creek

Vermont Yankee

Monticello

Millstone

Browns Ferry

Brunswick

D.C. Cook

Point Beach

Dresden/Quad Cities

Ginna

Turkey Point

St. Lucie

 Source: OIG analysis of NRC license renewal audit, inspection, and safety evaluation reports; 

and of license renewal applications. 

In some cases, the identical or nearly identical word-for-word 

repetition of renewal application text found in the audit, inspection, 

or safety evaluation reports are not offset or otherwise marked to 

indicate the text is identical to that found in the license renewal 

application. The lack of precision in differentiating quoted and 

unquoted text makes it difficult for the reader to distinguish between 

the licensee-provided data and NRC staff’s independent 

assessment methodology and conclusion. A reader could conclude 

that they were reading NRC’s independent analysis and 

conclusions when, in fact, it was the licensee’s conclusions. While 
Audit of NRC’s License Renewal Program 

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NRC reviewers may have actually performed such an independent 

review, a comparison between the license renewal application and 

the audit report may cast doubt as to what, exactly, NRC did to 

independently review the licensee’s program other than restate 

what was provided in the renewal application. 

For example, NRC's narrative description of operating experience 

for Millstone's flow-accelerated corrosion program is nearly identical 

to the description provided in the licensee’s renewal application. 

NRC's Millstone audit report, shown on the right side of Table 1 

below, presents information about the trending successes in the 

Millstone flow-accelerated corrosion program and gives the 

appearance of the audit team’s independent review and analysis. 

In fact, this passage is nearly identical to that presented in the 

license renewal application, shown in the left column of the table. 

Moreover, while NRC states that the project team reviewed 

operating experience, there is no discussion of what precisely was 

reviewed. 

Table 1 

Sample Comparison of Licensee and NRC Report Narrative14

Source: OIG analysis 

 

14 Additional examples are provided in Appendix D. 

Millstone Unit 2 renewal application NRC’s Millstone renewal audit report 

The number of planned and unplanned 

replacements has generally trended downward 

over the past several years due to the 

establishment of the Flow-Accelerated Corrosion 

program and following the recommendations 

identified in NSAC-202L. (p. B-42) 

The project team reviewed operating experience 

for the applicant’s Flow-Accelerated Corrosion 

program. The number of planned and unplanned 

replacements has generally trended downward 

over the past several years due to the 

establishment of the Flow-Accelerated Corrosion 

program and following the recommendations 

identified in NSAC-202L. (p. 67-8) 
Audit of NRC’s License Renewal Program 

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NRC staff stated that when the licensee claims an aging 

management program is consistent with the GALL Report, the 

licensee may copy the operating experience from the GALL Report,

and the safety evaluation report may copy the application. 

However, OIG’s analysis shows that—for the audit, inspection, and 

safety evaluation reports sampled—the staff’s description of the 

methods used and the support they provided for their conclusions 

often lack substance. 

Staff Report-Writing Standards Are Not Fully Established 

DLR management has not fully established report-writing standards 

for describing the license renewal review methodology and 

providing support for conclusions in NRC license renewal audit, 

inspection, and safety evaluation reports. DLR managers said that 

they expected license renewal staff to use their own language and 

avoid copying directly from the license renewal application when 

writing renewal reports. The managers said they are aware of the 

importance of demonstrating NRC’s independence in the license 

renewal reviews. DLR managers also said that they have verbally 

communicated and stressed their expectations to the staff. Yet, the 

Project Team Guidance does not reiterate these expectations or 

provide any report-writing standards that would support 

management’s expectations. The Project Team Guidance instead 

focuses on the process of compiling the audit and safety evaluation 

reports and not on the quality of information presented in these 

reports. 

DLR management pointed to some report quality assurance tools 

that involved audit team leader, peer group, and branch chief 

reviews of the audit and safety evaluation reports. DLR places the 

greatest emphasis on the audit team leader review to control report 

quality. DLR management and staff said that the peer review, 

conducted near the end of the report-writing process, is not a pageby-page review of the audit and safety evaluation reports but is 

primarily a spot review seeking to correct major mistakes in the 

reports. However, these tools have not ensured that the reports 

contain substantive documentation of NRC’s application review 

methodology and independent support for staff conclusions. 

Essentially, DLR lacks a complete report quality assurance process 

to ensure documentation of the staff’s aging management program 

review methodology and substantive support for staff conclusions. 
Audit of NRC’s License Renewal Program 

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While the team leader and peer review tools currently in place 

could form the basis of a report quality assurance process, DLR 

does not currently have any way to measure or determine the 

effectiveness of these team leader and peer reviews. Nor does the 

Division have procedures that would specify additional report 

quality assurance steps to take, given a pattern or trend in 

discovered problems. Such procedures would help DLR 

management refine the report quality assurance process to meet 

the quality assurance needs of the audit teams and division 

directors, as well as those—like ACRS members—who depend on 

the audit and safety evaluation reports for their review 

responsibilities. 

NRC Basis for Conclusions Important to Stakeholders

The basis for conclusions reached by NRC license renewal review 

staff is important to stakeholders and others who read NRC’s 

reports. The lack of an effective report quality assurance process 

to ensure that review methodology and support for conclusions are 

provided in the license renewal reports could lead readers to 

conclude that regulatory decisions are not adequately reviewed and 

documented. Furthermore, providing more substantive analysis 

and conclusions would help NRC better meet its strategic goal of 

transparency. 

NRC internal users—such as members of the ACRS—benefit from 

more substantive discussions of license renewal review 

methodologies and support for conclusions. ACRS members said 

that they rely on information in all of the license renewal reports, 

and pointed specifically to the value of the level of detail in the audit 

reports. 

 RECOMMENDATIONS:

OIG recommends that the Executive Director for Operations: 

1. Establish report-writing standards in the Project Team Guidance

for describing the license renewal review methodology and 

providing support for conclusions in the license renewal reports. 
Audit of NRC’s License Renewal Program 

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2. Revise the report quality assurance process for license renewal 

report review to include: 

• establishing management controls for NRR and DLR 

management to gauge the effectiveness of team leader and 

peer group report reviews, and 

• implementing procedures that would specify additional report 

quality assurance steps to be taken in the event that the 

team leader and peer group report reviews fail to ensure 

report quality to management’s expectations. 
Audit of NRC’s License Renewal Program 

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B. Guidance for Removing Licensee Documents from Audit Sites 

Could Be Clarified 

OIG found inconsistencies in the guidance provided to license 

renewal auditors with regard to removing licensee documents 

obtained at audit sites. License renewal audit teams should collect 

and document the information they review during site visits. 

However, audit teams are prohibited by DLR from removing 

licensee documents from the audit site, which makes it more 

difficult for audit team members to write their reports without using 

workaround tools. DLR’s policy also creates document handling 

inconsistencies with inspectors, who do keep documents obtained 

from the licensee’s site. 

Information Collection Guidance 

As noted earlier, the license renewal audit team uses the Project 

Team Guidance, to guide the conduct of the audit. With regard to 

documentation, the Project Team Guidance exhorts auditors to 

“properly collect and document the information they review during 

site visits,” especially for information used as a basis for reaching a 

conclusion regarding the audit and safety evaluation reports. 

Audit Teams Prohibited from Removing Licensee Documents 

from Audit Site 

License renewal audit teams, as a matter of DLR policy, are 

prohibited by their management from removing copies of licenseeprovided documents from the audit site. The licensee provides an 

extensive amount of bases and technical documents for DLR 

auditors. DLR auditors review these documents for information that 

may answer their questions about the license renewal application. 

Licensee staff may exert great effort to make multiple copies of 

documents available, both in hard copy and on compact disc. 

Because DLR management prohibits auditors from removing 

licensee-provided documents, auditors use the time available onsite to peruse the documents and interview licensee staff. 

License renewal auditors said that being allowed to take documents 

offsite would aid them in writing and supporting their audit and 

safety evaluation report inputs. They thus resorted to removing 

documents provided by the licensee in violation of the Division’s 

policy. 
Audit of NRC’s License Renewal Program 

15

DLR management's policy to prohibit license renewal auditors from 

removing licensee-provided documents from the audit site is also 

contrary to the policy and practice for license renewal inspectors. 

For example, NRC region-based license renewal inspectors said 

that the renewal inspection teams can and do take documents from 

the site. The inspectors said it is standard procedure to dispose of 

licensee documents once their report is written. 

Guidance for Removing Licensee Documents from Audit Sites 

is Inconsistent

OIG found inconsistencies in the guidance provided to license 

renewal auditors with regard to removing copies of licenseeprovided documents from audit sites. DLR management provides 

the audit teams with verbal guidance to never remove licensee 

documents obtained from the audit site. However, DLR's Project 

Team Guidance appears to permit some removal of licensee 

documents from an audit site, as indicated on page 26: 

“The project team shall not take documents from an 

applicant’s site for in-office review, unless the documents are 

either already in ADAMS or the applicant agrees that the 

NRC can put the document in ADAMS.” 15

Elsewhere, the Project Team Guidance states that “if the 

documentation cannot go on the docket or into ADAMS then it 

cannot be taken off site.” A more permissive document removal 

policy is provided to inspectors through Inspection Manual Chapter 

0620.16 It provides a number of acceptable practices for obtaining 

licensee documents, including sending an inspector to the site or 

using the licensee’s equipment to make copies of relevant 

materials. The guidance states that copies of licensee records and 

documents may be reviewed offsite with the licensee’s permission. 

When asked the reason for the more restrictive verbal removal 

policy, DLR managers echoed the rationale provided by the Project 

Team Guidance. They said that most documents provided by the 

 

15 ADAMS is NRC’s Agencywide Documents Access and Management System. 

16 Inspection Manual Chapter 0620, Inspection Documents and Records, dated January 27, 2006. 
Audit of NRC’s License Renewal Program 

16

licensee at the audit site have not been docketed by NRC and, 

therefore, DLR does not want license renewal auditors to bring the 

undocketed items back to headquarters. According to DLR 

management, OGC told NRR staff that all documents that NRC 

auditors bring back “must be docketed." 

A senior attorney involved with the License Renewal Program said 

that OGC warned NRR management not to take documents unless 

they are willing to “give them up” through a Freedom of Information 

Act request or via a mandatory disclosure requirement for a 

hearing. The OGC attorney could not identify any specific guidance 

that required NRC to put licensee documents on the docket, and 

admitted that NRC’s criteria regarding what licensee documents 

must be docketed by the agency is unclear. 

The OGC attorney also said that the practice among region-based 

inspectors to remove licensee-provided documents from a license 

renewal site is acceptable. However, the attorney expressed 

concern about the inconsistent practices of the license renewal 

audit and inspection staffs regarding the removal of documents 

from license renewal sites. 

Consequences of DLR’s Documentation Policies and Practices

DLR’s prohibition on its audit staff from removing documents 

provided by the licensee at license renewal sites makes it more 

difficult for the auditors to write their inputs to the audit and safety 

evaluation reports. Instead, the audit staff has to rely on notes and 

memory, and use other source document workarounds—such as 

worksheets and the licensee-managed database of questions and 

answers—to construct input for the audit and safety evaluation 

reports. Given the Division’s greater reliance on the staff to 

perform audits with fewer contractors, any effort to provide auditors 

with source documents may contribute to review efficiencies. 

Furthermore, NRR’s policy also leads to document handling 

inconsistencies between the license renewal audit and inspection 

teams. The same blanket prohibition on removal of licensee 

documents from the licensee’s site does not extend to license 

renewal inspectors. 
Audit of NRC’s License Renewal Program 

17

RECOMMENDATION:

OIG recommends that the Executive Director for Operations: 

3. Clarify guidance and adjust procedures for auditors’ and 

inspectors’ removal of licensee-provided documents from 

license renewal sites 
Audit of NRC’s License Renewal Program 

18

C. Consistent Evaluation of Operating Experience Would Improve 

NRC Reviews

License renewal audit teams have a unique opportunity to improve 

the NRC license renewal review with a deeper and more consistent 

approach to reviewing operating experience. Operating experience 

plays an important role in license renewal, and the license renewal 

staff is expected to review plant-specific operating experience, 

including corrective actions. Yet, audit team members do not 

review operating experience consistently. Furthermore, most audit 

team members do not conduct independent verification of operating 

experience, instead relying on licensee-supplied information. This 

is because program managers have not established requirements 

and controls to standardize the conduct and depth of such reviews. 

In the absence of conducting independent verification of plantspecific operating experience, license renewal auditors may not 

have adequate assurances that relevant operating experience was 

captured in the licensee’s renewal application for NRC’s 

consideration. 

The Importance of Operating Experience to License Renewal 

Operating experience plays an important role in license renewal 

and figures prominently in a licensee’s renewal application. NRC’s 

Standard Review Plan for Review of License Renewal Applications 

for Nuclear Power Plants (Standard Review Plan) instructs NRC 

staff to assess 10 program elements for each aging management 

program submitted in a licensee’s renewal application. Operating 

experience is listed as one of these 10 elements, and defined in 

brief in the Generic Aging Lessons Learned (GALL) Report

summary as follows: 

“Operating experience involving the aging management 

program, including past corrective actions resulting in 

program enhancements or additional programs, should 

provide objective evidence to support a determination that 

the effects of aging will be adequately managed so that the 

structure and component intended functions will be 

maintained during the period of extended operation.” (p. 2) 

Operating experience is also an important part of two other aging 

management program elements: specifically, detection of aging 

effects, and monitoring and trending. The Standard Review Plan 
Audit of NRC’s License Renewal Program 

19

also calls attention to the importance of the licensee’s plant-specific 

operating experience in relation to scoping and screening, aging 

management review, and time-limited aging analyses activities. 

DLR management also said that it expects its license renewal staff 

to review plant-specific operating experience, including corrective 

actions. Given the Standard Review Plan’s emphasis on operating 

experience and on management’s expectations, OIG concludes 

there is ample reason for the licensee to provide—and NRC to 

review—sufficient amounts of operating experience information and 

data. 

Operating Experience Is Not Consistently Reviewed or 

Independently Verified 

When reviewing aging management programs, license renewal 

audit team members do not approach their reviews of operating 

experience consistently and, furthermore, most team members do 

not conduct independent verification of operating experience. 

Team members are assigned aging management programs to 

review based on their areas of expertise. A more experienced 

reviewer or auditor may look more in-depth at, or conduct 

independent spot checks of, licensee-submitted information 

provided in the license renewal application. 

OIG asked license renewal auditors and management about the 

appropriateness of conducting independent searches of licensee 

operating experience. Such searches might examine the licensees’ 

corrective actions, system health reports, and inspection results. 

NRR managers said that they expect the audit teams to review 

plant-specific operating experience. Some managers said they 

expected license renewal auditors to perform their own searches of 

corrective actions rather than rely solely on information provided by 

the licensee. 

However, license renewal auditors said that they generally do not 

conduct independent searches of licensee corrective action 

databases and that auditors would not normally review a plant’s 

corrective action program for each aging management program 

because the industry-wide experience is already known. One 

reviewer said that it is the licensee’s responsibility to provide NRC 

with plant-specific operating experience that is different from 

industry-wide operating experience. The auditor reviews only what 

the licensee provided in its application. Another reviewer said 
Audit of NRC’s License Renewal Program 

20

that capturing plant-specific operating experience is timeconsuming or that it is too difficult to learn how to use the licensees’ 

corrective action program databases. 

With the assistance of an OIG technical advisor having a general 

engineering background, OIG sought to learn how difficult it would 

be to generate a useful database report of corrective actions. OIG 

staff visited two separate plants owned by large utility companies 

and, using computers attached to the respective owners’ local area 

networks, performed keyword searches of the corrective action 

databases.17 OIG’s technical advisor searched the available 

network data for the host plant and for several other already 

renewed plants in their respective fleets.18 

From these searches, OIG was able to identify a number of areas 

for each plant that would warrant follow-up questions for licensees 

regarding past performance of license renewal aging management 

programs. Given the time to conduct and analyze the database 

searches, OIG concluded that accessing the corrective action 

databases was relatively easy and provided access to a good deal 

of information of potential value to license renewal audit teams. 

OIG does not believe that the results of such a search would 

necessarily validate an entire aging management program, but the 

endeavor does identify a relatively easy way for license renewal 

auditors to conduct an independent check of the information 

provided by the licensee. 

Requirements to Independently Verify Operating Experience 

Have Not Been Established 

License renewal program managers have not established 

requirements or controls to standardize the conduct of independent 

verifications and depth of probes of plant-specific operating 

experience during audit reviews of licensee applications. That is 

not to suggest that DLR management has failed to mention the 

importance of reviewing operating experience to audit teams. On 

 

17 Keywords included “corrosion,” “cracking,” “fatigue,” “leak,” “pitting,” “drywell,” “HPCI,” “primary 

containment,” “secondary containment,” and “Torus.” 

18 It is important to note that OIG staff had no previous experience or familiarity using these databases. At 

both plant sites, OIG staff needed approximately 5 hours total to learn basic search mechanisms for the 

corrective action databases, and then perform the keyword search for three plants in each fleet. 
Audit of NRC’s License Renewal Program 

21

the contrary, OIG observed DLR management discussing the 

importance of plant-specific operating experience with license 

renewal auditors at a team meeting. 

DLR management has not set any formal requirements that license 

renewal audit teams independently verify plant-specific operating 

experience as a standard part of their reviews. The Project Team 

Guidance handbook instructs reviewers to compare program 

elements for the plant’s aging management programs to the 

corresponding program elements for GALL-identified aging 

management programs. But the Project Team Guidance handbook 

does not include any specific direction about how this should be 

accomplished. Essentially, the guidance leaves a lot of leeway to 

individual auditors to review operating experience as they see fit. 

DLR also has no controls to monitor and enforce operating 

experience verification, which incorporate independent searches of 

corrective action databases. One manager said that more 

management controls to bring consistency to the reviews would be 

welcomed. The manager pointed out that DLR management can 

require audit teams to perform deeper probes of operating 

experience, but has no way of determining whether the auditors 

follow through. 

Auditors May Not Be Aware of All Relevant Operating 

Experience

In the absence of conducting independent verification of plantspecific operating experience, license renewal auditors may not 

have adequate assurances that all relevant operating experience 

was captured in the licensee’s renewal application. As reported 

above, OIG was able to identify a number of areas for each plant 

that would warrant follow-up questions for licensees regarding past 

performance of license renewal aging management programs. 

OIG’s work in this area was, in part, informed by a discrepancy 

noted while reviewing the Oconee license renewal application. 

NRC received the Oconee plant’s license renewal application in 

July 1998, whereupon the application remained under review until 

renewal was granted in May 2000. The application stated that 

minor local containment coatings failures had been observed and 
Audit of NRC’s License Renewal Program 

22

repaired. Yet, the Oconee corrective action program contained 20 

entries for degraded coatings from 1995-2003.19 OIG’s analysis of 

this corrective action program indicates that the coatings aging 

management program had not been implemented consistent with 

the statements in the Oconee license renewal application. In fact, 

coatings degradation was a continuing problem at the Oconee 

Nuclear Station as of Spring 2004, the date of the photograph 

presented in Figure 4 below, casting doubt on the efficacy of 

Oconee’s aging management program for coatings. 

Figure 4 

Example of Coatings Degradation at Oconee 

 

 Source: NRC Inspector 

NRC license renewal reports do not indicate that NRC reviewers 

independently verified Oconee’s operating experience for coatings. 

The license renewal inspection report states that the inspection 

included a review of the program description documents and 

discussion of the program with a site engineer. The inspection 

report concluded, based on the program document review and the 

 

19 Six of the entries were made prior to the submittal of the license renewal application in 1998. Two of the 

entries were made after the renewal application was submitted, but prior to the granting of the renewed 

license in May of 2000. 
Audit of NRC’s License Renewal Program 

23

discussion, that the “team verified that this previously existing 

program was implemented as described in the [license renewal 

application].” The license renewal safety evaluation report for 

Oconee quotes or paraphrases passages from the Oconee renewal 

application, including the licensee’s conclusion that the program is 

based on well-established industry standards and has been revised 

as necessary on the basis of plant experience. The staff 

acknowledged in the safety evaluation report that the licensee did 

not provide coatings program operating experience in its 

application, yet the staff did not offer any indication of having 

conducted an independent look at coatings operating experience. 

OIG contends that a quickly-performed, independent search of the 

Oconee corrective action database would have revealed 

discrepancies with the information and assessment provided by the 

licensee in the renewal application. Such a search would have 

generated the corrective action reports that described continuing 

coatings problems and raised questions about the licensee’s 

contention that minor local containment coatings failures have been 

observed and repaired. Moreover, performing and documenting 

this type of search helps NRC prevent the appearance that license 

renewal reviewers trust information provided by the licensee in the 

renewal application without verification. 

RECOMMENDATION:

OIG recommends that the Executive Director for Operations: 

4. Establish requirements and management controls to 

standardize the conduct and depth of license renewal operating 

experience reviews. 
Audit of NRC’s License Renewal Program 

24

D. More Attention Is Needed to Planning for Post-Renewal 

Inspections 

NRC considers post-renewal inspections vital to ensure that 

licensees adhered to commitments made for license renewal.20 

However, post-renewal inspection planning is incomplete because 

the agency has only recently focused its attention on developing 

and overseeing details associated with these inspections. 

Inadequate planning increases the risk that: licensees could enter 

into the extended period of operation without being in full 

compliance with license renewal terms; inspections will be 

inconsistently implemented; and inspection and technical support 

resources will be unavailable when needed. 

Timely Inspection Planning Is Essential 

Post-renewal inspections will play a vital role in ensuring that 

licensees followed through on their license renewal commitments 

and, therefore, thorough planning for these inspections is essential. 

Regional inspection guidance states that the best inspection plans 

are prepared well in advance, list clear expectations, and should be 

developed by working closely with the key customers – for license 

renewal that means NRC and licensee staffs. Thorough planning 

would help ensure appropriate inspection resource needs are met 

and bring consistency to the implementation of the post-renewal 

inspections.

Post-Renewal Inspection Details Are Not Fully Developed 

Despite the importance of planning for the required post-renewal 

inspections, details have not been fully developed. Inspection 

Manual Chapter 251621 states that a post-renewal inspection, in 

accordance with Inspection Procedure 71003, Post-Approval Site 

Inspection for License Renewal, will be conducted at sites receiving 

an NRC-approved license extension. Inspection Manual Chapter 

2516 also identifies NRR as the organization responsible for 

 

20 NRC established a two-phase license renewal inspection program: the phase one inspections occur 

during the safety review process and phase two consists of post-renewal inspections (i.e., after NRC has 

granted the license extension). Planning for the post-renewal inspections is the focus of this report section. 

21 Inspection Manual Chapter 2516, Policy and Guidance for the License Renewal Inspection Programs. 
Audit of NRC’s License Renewal Program 

25

planning and overseeing license renewal inspections. NRC’s four 

regions are then responsible for implementing the inspections. 

Although the agency has initiated a revision to Inspection 

Procedure 71003, details regarding the scope, timing, and resource 

determinations of these inspections have not been specified or fully 

developed. NRC anticipates that all relevant issues will be 

addressed in the revised procedure. 

Undefined Scope

Inspection Procedure 71003 states that the purpose of postrenewal inspections is to verify that licensees implemented renewal 

aging management programs and activities in accordance with: the 

requirements of 10 CFR Part 54; renewal-specific license 

commitments; and NRC’s safety evaluation report. However, the 

inspection procedure as written does not give the specifics of the 

breadth and scope expected of these inspections, such as: 

3⁄4 the sample size of the aging management programs or licensee 

commitments to be inspected; 

3⁄4 whether there are licensee commitments and aging 

management programs established after the application was 

approved that must be included in the sample; 

3⁄4 whether inspectors must have headquarters’ concurrence on 

potentially unresolved commitments, who in NRR should be 

contacted and how, and when that interaction should occur; and 

3⁄4 who determines, and on what basis, whether the licensee 

continues to meet the commitments required for operating into 

the extended period. 

Timing of Post-Renewal Inspections is Not Clearly Understood

Timing of the post-renewal inspections is critical because NRC will 

use the results to determine whether a licensee can safely continue 

to operate into an extended period. However, Inspection 

Procedure 71003 gives a broad range for, and NRC’s written and 

verbal expectations vary on, the timing required for conducting the 

post-renewal inspections. As a result, region staff and licensees do 

not have sufficient detailed information needed to plan for the 

upcoming post-renewal inspections even though the first of these 
Audit of NRC’s License Renewal Program 

26

inspections are due in calendar year 2009. It is important that the 

revision to Inspection Procedure 71003 provide the necessary 

details. 

 Regional Impact 

Inspection Procedure 71003 states that post-renewal inspections 

should be implemented either before or shortly after the 

commencement of the extended period of operation. Yet, another 

agency document says that the post-renewal inspections will be 

performed ‘in the vicinity of’ the period of extended operation – 

within a year prior to or following the extended license taking effect. 

Neither document defines the basis for the time periods established 

for conducting these inspections. [emphasis added] 

NRC expects the number of new license renewal applications 

requiring NRC inspections to peak in FY 2009. The peak in new 

license renewal activity coincides with the timeframe for conducting 

the first post-renewal inspections. Because region-based 

inspectors are not dedicated solely to license renewal matters, the 

post-renewal inspection activities must be factored into their overall 

inspection schedules. The regions’ inspection planning horizon is 

18 months. NRC’s FY 2009 proposed budget includes a request 

for the regions to conduct the needed post-renewal inspections. 

 Licensee Impact 

For planning and budgeting purposes, industry representatives 

from the Nuclear Energy Institute (NEI) and licensee organizations 

have repeatedly requested that NRC provide more specific details 

on the post-renewal inspections. At a January 2007 NRC/NEI 

interface meeting, industry again requested detailed information 

regarding NRC’s expectations for implementing these inspections. 

An NRC senior manager responded that the details, including the 

timeline, for the post-renewal inspections are “being worked on but 

as yet there is no schedule defined.” 

In addition, industry and NRC managers, as well as inspection staff, 

have expressed different positions with regard to the timing of the 

post-renewal inspections, including when license renewal 

commitments must be ready for NRC’s post-renewal inspection. 
Audit of NRC’s License Renewal Program 

27

The following paraphrased exchange between a licensee and NRC 

license renewal senior managers at the January 2007 NRC/NEI 

meeting demonstrates NRC’s inconsistent expectations: 

A renewal licensee expressed confusion over the 

timing of the 71003 inspections. According to 

the licensee, an NRC regional lead inspector 

announced that post-renewal inspections in one 

region will occur in 2008 even though the original 

license in question does not expire until 

sometime in 2009. A senior DLR manager 

responded that licensees technically have until 

the end of the full 40-year license to meet the 

conditions of the license extension. However, 

another key license renewal manager countered 

that renewal commitments should be completed 

2 years before license expiration so that NRC 

can verify the commitments are effective before 

licensees enter the extended period of operation. 

Inspection Resource Needs Are Not Fully Developed

Agency managers acknowledge that resource planning for the postrenewal inspections is important. However, agency managers 

acknowledge that post-renewal inspection staffing and budget 

needs have not been fully developed. Furthermore, management 

questions whether information needed to prepare accurate postrenewal inspection budget requests will be available in a timely 

manner. 

License renewal program management told OIG that planning for 

the post-renewal inspections is not only important, but particularly 

timely given the recent request for the NRR’s FY 2009 budget 

needs. However, as stated above, the regions have not yet 

factored these inspections into the overall inspection schedule and 

planning is hindered because there is not consensus on what 

resources will be needed. For example, Inspection Procedure 

71003 estimates that the post-renewal inspection teams will consist 

of five members ─ four inspectors and a team leader. The 

inspection procedure also estimates that each inspection will take 5 

to 6 weeks, including 2 weeks on-site, and require about .52 fulltime equivalents. Although acknowledging that none of these 

inspections have occurred as yet, a senior region manager 
Audit of NRC’s License Renewal Program 

28

responsible for inspection program scheduling and oversight 

estimates that it will take half the time on-site and twice the 

resources to perform the post-renewal inspections given the 

narrowly defined scope in Inspection Procedure 71003. 

There is also no indication that the resource estimates established 

in Inspection Procedure 71003 factor in the potential need for 

multiple rounds of inspections and/or the time needed should the 

inspectors require headquarters technical support for issue 

resolution. Because NRR has not finalized the details about the 

scope, timing, and responsibilities for the post-renewal inspections, 

it is questionable whether an accurate and meaningful budget 

request can be prepared. It is necessary that the revision to 

Inspection Procedure 71003 address these issues. 

Improved Organizational Focus Is Needed

Post-renewal inspection planning is incomplete because 

management has not focused its attention on developing and 

overseeing plans for this future activity. Until recently, there had 

been little discussion between NRR senior managers and those 

ultimately responsible for implementing and preparing for the postrenewal inspections, namely region-based inspectors and 

licensees. 

NRR is responsible for the development and implementation of 

license renewal programs and activities, and is responsible for 

technical and inspection support. According to agency managers 

and staff, the reason why NRR managers have not focused 

attention on planning the details of Inspection Procedure 71003 is 

because the post-renewal inspections are viewed as activities 

outside of license renewal space and because these inspections 

would not occur for several more years. NRR notes that it started 

an effort to revise Inspection Procedure 71003 in the summer of 

2006. 

Challenges Associated with Incomplete Planning

Using under-developed Inspection Procedure 71003 for planning 

the post-renewal inspections would result in some risks and 

management challenges that could hamper the efficiency and 

effectiveness of the license renewal program. The most significant 
Audit of NRC’s License Renewal Program 

29

concern is that licensees could potentially begin operating into the 

extended period without being in full compliance with the terms or 

intent of their renewed license. 

Planning for the specific timing of the post-renewal inspections is 

important because inspectors are expected to verify license 

renewal commitments that must be in place and accepted before 

the end of the original operating period. Otherwise NRC may be at 

risk of allowing a plant to enter into an extended period of operation 

in noncompliance with the terms or intent of the renewed license. 

This risk would be particularly acute for licensees with outstanding 

commitments to develop and implement new aging management 

programs years after their license renewal applications were 

reviewed and approved. There is no consideration in the license 

renewal process for subjecting new aging management programs 

to the same type of technical sufficiency reviews as existing aging 

management programs. Therefore, scheduling the post-renewal 

inspections needed to confirm the existence or implementation of 

the new aging management programs after the period of extended 

operation has begun exacerbates these risks. 

The lack of a detailed and standardized inspection methodology 

could also lead to inconsistent post-renewal inspections. Without 

this planning, there exists the potential that individual inspectors—

or, at a minimum, each region—will devise their own inspection 

methodology and may not receive the information needed to 

develop site-specific, comprehensive inspection plans, such as 

which version of the GALL Report and other agency requirements 

applies for each inspection. 

Finally, without the information needed to adequately make the 

budget and staffing determinations, the license renewal program 

could be left vulnerable to unanticipated budget and staffing shifts. 

This major challenge, voiced by NRC and industry alike, concerns 

whether necessary inspection resources will be available when the 

time comes to implement the post-renewal inspections. 
Audit of NRC’s License Renewal Program 

30

RECOMMENDATIONS:

OIG recommends that the Executive Director for Operations: 

5. Expedite completion of the details for a revised Inspection 

Procedure 71003. 

6. Communicate the details of revised Inspection Procedure 71003 

to all applicable staff and stakeholders. 
Audit of NRC’s License Renewal Program 

31

E. License Renewal Issues Need Evaluation for Backfit Application 

When NRC imposes new staff positions resulting in new license 

renewal review standards, a documented justification is required 

pursuant to the backfit rule. However, new license renewal review 

standards have not followed NRC’s backfit policy. This condition 

exists because NRC does not have a mechanism or methodology 

to trigger a backfit review. Additionally, NRR has not designated 

any organizational accountability for performing license renewalrelated backfit justifications. Consequently, the use of different 

review standards without a backfit justification may result in several 

management challenges. 

Backfit Requirements 

The Code of Federal Regulations, under 10 CFR 50.109, defines 

backfitting to include new or different staff positions that require 

changes to things such as designs, plant equipment, and 

procedures. As shown below, the regulation also requires that staff 

document its justification for imposing a backfit regardless of which 

justification is cited: 

• a “documented evaluation” is required when backfitting is 

justified (1) for compliance, (2) as necessary for adequate 

protection, or (3) as needed to redefine adequate protection. 

The documented evaluation must include a statement of the 

objectives and reasons for the change and a basis for invoking 

either a compliance exception or adequate protection exception, 

whereas 

• a “systematic and documented analysis,” which includes a costbenefit analysis, is required when the NRC claims a substantial 

increase in public health and safety justifies the cost of a backfit. 

New Staff Positions Are Not Reviewed for Backfit 

Consideration 

NRC captures new insights or emerging issues during license 

renewal reviews and from operating reactor performance. These 

new insights or issues may lead to a new staff position that results 

in a new review standard. However, the staff’s position is that the 
Audit of NRC’s License Renewal Program 

32

backfit rule does not apply to license renewal applicants based on 

exceptions in 10 CFR 54.37(b) and a 1995 Commission Statement 

of Considerations (SOC) published with promulgation of the 

License Renewal Rule. Therefore, new license renewal standards 

are not reviewed and documented for backfit considerations 

because there is no identified procedure to do so. 

New staff positions are documented in Interim Staff Guidance (ISG) 

documents. ISGs are used to communicate new NRC review 

standards to renewal applicants and other interested stakeholders 

until the emerging issues can be incorporated into the next revision 

of the license renewal guidance documents, particularly the GALL 

Report – the primary license renewal guidance document. There 

are two types of ISG documents: clarification and compliance. 

According to the agency, clarification ISGs provide additional 

guidance to renewal applicants to improve the efficiency and 

effectiveness of the license renewal process, and thereby do not 

create new staff positions and do not apply to licensees holding 

renewal licenses. On the other hand, compliance ISGs involve 

meeting the requirements of 10 CFR 54.37(b) and, therefore, do 

apply to both applicants and licensees holding renewed licenses. 

The agency further states that the only ISGs applicable to holders 

of renewed licenses are those compliance ISGs involving “newly 

identified” SSCs that should be in the scope of license renewal in 

accordance with 10 CFR 54.37(b). Finally, the agency concludes 

that requiring licensees to consider aging management for newly 

identified SSCs after a license is renewed is not a backfit issue. 

In November 2006, NRC issued LR-ISG-2006-0122 as a 

“clarification” ISG. The ISG requires current and future license 

renewal applicants to add a new aging management program in 

their applications to address inaccessible areas of the Mark I steel 

containment drywell shell. By requiring a new aging management 

program, this ISG went beyond providing “additional guidance” as 

intended with a clarification ISG. Additionally, the steel 

containment drywell shell is not a newly-identified area but is an 

SSC already within the scope of license renewal reviews. 

Furthermore, there was no documented evaluation or analysis 

 

22 LR-ISG-2006-01, Plant-Specific Aging Management Program for Inaccessible Areas of BWR Mark I Steel 

Containment Drywell Shell, dated November 2006. 
Audit of NRC’s License Renewal Program 

33

justifying whether NRC’s new position should be backfit to already 

renewed licenses. Consequently, plants renewed prior to 

November 2006 may manage aging effects of drywell shells to a 

different standard. Finally, OIG concludes that using LR-ISG-2006-

01 to change the review standard of drywell shell aging 

management represents a miscategorization of this ISG as a 

“clarification” rather than a “compliance” issue. 

Renewal Review Process Does Not Trigger Backfit Evaluations

Although NRC senior managers confirmed that new staff positions 

should be properly justified and they expect that they are, the staff 

has not justified ISGs as required by NRC’s backfit rule. OIG found 

that there is no mechanism in the license renewal review process to 

trigger documented backfit justifications of ISGs, nor is there a 

methodology for conducting such evaluations or analysis of ISGs 

and the new standards they impose. 

OIG’s examination of license renewal guidance documents also 

determined that the organizational accountability for these 

documented justifications has not been clearly established. NRC 

managers and staff gave OIG inconsistent information about where 

the backfit reviews should be assigned. In fact, senior managers 

identified different NRR organizations as currently accountable for 

backfit justifications, none of which conduct backfit reviews. 

Challenges Associated With Unjustified, Nonuniform Review 

Standards 

NRC’s use of different review standards without justification from a 

backfit evaluation or analysis may result in the following 

management challenges: 

3⁄4 the appearance that previous approval standards may have 

been inadequate, 

3⁄4 stakeholders questioning continually changing review 

standards, and 

3⁄4 licensees managing aging effects differently from plant-to-plant. 
Audit of NRC’s License Renewal Program 

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Appearance that Previous Approval Standards May Have Been 

Inadequate

Because ISGs do not receive backfit reviews, there may be an 

appearance that inadequate standards were applied to previously 

approved license renewal applications. As a result, NRC may be 

vulnerable to questions about the adequacy of its approval process 

and the adequacy of those aging management programs already 

approved. 

Stakeholders Question Continually Changing Review Standards 

Licensees have questioned the basis for NRC’s application of 

different review standards in the absence of justification through 

backfit reviews. The agency portrays the license renewal program 

as a living process to be updated for improvement as experience is 

gained. Industry representatives acknowledge the value of process 

improvements, but question the basis for NRC’s continually 

changing requirements as reflected in the following statement from 

an industry license renewal vice president: 

If submissions were good enough before but not now [given 

NRC’s issuance of new standards], does that mean that the 

previously approved applications did not really have enough 

substance to be granted a renewed license? 

Using the backfit process as an integral part of ISG reviews would 

explain and justify NRC’s changing positions and hopefully 

eliminate licensee questions about NRC’s different review 

standards. 

Licensees May Manage Aging Effects Differently from Plant-toPlant

The lack of a systematic application of the backfit process also 

raises potential safety questions when plants manage the same 

aging effects differently without a specific justification. This is 

particularly true when NRC identifies a system or component that 

needs a new aging management program, then requires current 

and future license renewal applicants to address the newlyidentified issue, but does not require already approved licensees to 

do the same. 
Audit of NRC’s License Renewal Program 

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RECOMMENDATIONS:

OIG recommends that the Executive Director for Operations: 

7. Establish a review process to determine whether or not Interim 

Staff Guidance meets the provisions of 10 CFR 54.37(b), and 

document accordingly. 

OIG recommends that the Commission: 

8. Affirm or modify the 1995 Commission’s Statement of 

Considerations position regarding the applicability of the backfit 

rule to license renewal applicants. 
Audit of NRC’s License Renewal Program 

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IV. CONSOLIDATED LIST OF RECOMMENDATIONS 

OIG recommends that the Executive Director for Operations: 

1. Establish report-writing standards in the Project Team Guidance

for describing the license renewal review methodology and 

providing support for conclusions in the license renewal reports. 

2. Revise the report quality assurance process for license renewal 

report review to include: 

• establishing management controls for NRR and DLR 

management to gauge the effectiveness of team leader 

and peer group report reviews, and 

• implementing procedures that would specify additional 

report quality assurance steps to be taken in the event 

that the team leader and peer group report reviews fail to 

ensure report quality to management’s expectations. 

3. Clarify guidance and adjust procedures for auditors’ and 

inspectors’ removal of licensee-provided documents from 

license renewal sites. 

4. Establish requirements and management controls to 

standardize the conduct and depth of license renewal operating 

experience reviews. 

5. Expedite completion of the details for a revised Inspection 

Procedure 71003. 

6. Communicate the details of revised Inspection Procedure 71003 

to all applicable staff and stakeholders. 

7. Establish a review process to determine whether or not Interim 

Staff Guidance meets the provisions of 10 CFR 54.37(b), and 

document accordingly. 
Audit of NRC’s License Renewal Program 

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OIG recommends that the Commission: 

8. Affirm or modify the 1995 Commission’s Statement of 

Considerations position regarding the applicability of the backfit 

rule to license renewal applicants. 
Audit of NRC’s License Renewal Program 

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V. AGENCY COMMENTS 

On May 8, 2007, OIG issued its draft report to the Executive 

Director for Operations. OIG subsequently met with managers from 

DLR and OGC to address specific issues and concerns needing 

further clarification and/or explanation. On July 6, 2007, the Deputy 

Executive Director for Reactor Programs provided a formal 

response to this report in which the agency disagreed with OIG’s 

finding regarding applicability of the backfit rule to license renewal 

applicants. The agency’s transmittal letter and specific comments 

on this report are included in their entirety as Appendix E. 

The staff’s position is that 10 CFR 50.109, “Backfitting,” does not

apply to license renewal (for holders of renewed licenses) with 

respect to new structures, systems or components (SSC) brought 

within the scope of the license renewal rule as required by 10 CFR 

54.37(b). Conversely, the agency acknowledges that the backfit 

rule does generally apply for SSCs that were or should have been 

reviewed during the scope of license renewal review. [emphasis 

added] OIG generally concurs with these two positions, although 

OIG determined that the agency does not have a process to identify 

whether ISGs meet the provisions in 10 CFR 54.37(b) thereby 

making them exempt from backfitting. 

However, OIG disagrees with the staff’s position that the backfitting 

rule does not apply to license renewal applicants based on 

exceptions in 10 CFR 54.37(b) and the 1995 SOC published with 

promulgation of the License Renewal Rule. OIG believes that the 

plain language of the backfit regulation states that the backfit rule is

applicable to holders of an operating license, which by default 

includes applicants seeking a renewed license.23 OIG found no 

exception or provision in either the backfit rule or the License 

Renewal Rule that suspends applicability of the rule to license 

renewal “applicants” or the information in their renewal applications. 

Consequently, the sole regulatory basis for the staff’s position that 

backfitting does not apply to applicants is the 1995 SOC. 

 

23 10 CFR 50.109(a)(1)(iii). 
Audit of NRC’s License Renewal Program 

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OIG notes that the 1995 Commission’s SOC position is 12 years 

old and was written prior to any license renewal applications being 

processed. NRC has now processed 48 license extensions. 

Based on this experience, the SOC needs to be reevaluated. 

This final report incorporates revisions made, where appropriate, as 

a result of the subsequent meetings and the agency’s written 

comments. In addition, based on the agency’s response, OIG 

revised and redirected Recommendation 8 to request that the 

Commission affirm or modify the 1995 Commission’s Statement of 

Considerations position regarding the applicability of the backfit rule 

to license renewal applicants. Appendix F contains OIG’s complete 

analysis of the agency’s formal response. 
Audit of NRC’s License Renewal Program 

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Appendix A 

SCOPE AND METHODOLOGY 

NRC’s license renewal review process follows two paths: safety 

and environmental. The focus of this audit was to determine the 

effectiveness of NRC’s license renewal safety reviews. To address 

the audit objective, OIG reviewed relevant management controls, 

related documentation from internal and external sources, and 

Federal statutes, including reviews of: 

3⁄4 The Atomic Energy Act of 1954 

3⁄4 NEI 95-10, Industry Guideline for Implementing the 

Requirements of 10 CFR Part 54 – The License Renewal 

Rule 

3⁄4 Licensee Corrective Action Program databases 

3⁄4 Code of Federal Regulations, Title 10, Parts 50, 51 and 54

3⁄4 NRR/Division of License Renewal Project Team Guidance

3⁄4 NRR’s Self Assessment of License Renewal Application 

Improved Safety Review Process

3⁄4 Inspection Manual Chapters (IMC) 

- IMC 0620, Inspection Documents and Records 

- IMC 2516, Policy and Guidance for the License Renewal 

Inspection Programs 

- Inspection Procedures 71002 and 71003 

3⁄4 Regulatory Guides 1.147 and 1.188 

3⁄4 Management Directive 8.4, Management of Facility-specific 

Backfitting and Information Collection

3⁄4 NUREGs, including: 

- NUREG-1800, Standard Review Plan for Review of 

License Renewal Applications for Nuclear Power Plants, 

and 
Audit of NRC’s License Renewal Program 

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- NUREG-1801, Generic Aging Lessons Learned (GALL) 

Report 

Auditors conducted interviews with more than 50 agency and 

industry individuals, including: 

3⁄4 NRC senior managers and staff from: 

 

- Headquarters, Rockville, Maryland 

- Region I, King of Prussia, Pennsylvania 

- Region II, Atlanta, Georgia 

- Region III, Lisle, Illinois 

- Region IV, Arlington, Texas 

3⁄4 OGC and ACRS members at NRC Headquarters 

3⁄4 Industry representatives and plant personnel from: 

- The Nuclear Energy Institute 

- Exelon Nuclear 

- Entergy Nuclear 

OIG conducted this audit between March 2006 and December 2006 

in accordance with generally accepted Government auditing 

standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our 

audit objectives. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on our 

audit objectives. 

The major contributors to this report were Anthony Lipuma, Team 

Leader; Catherine Colleli, Audit Manager; Robert K. Wild, Senior 

Management Analyst; Michael Cash, Senior Technical Advisor; and 

Jaclyn Storch, Management Analyst. 
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Appendix B 

NRC’S DUAL-TRACK LICENSE RENEWAL REVIEW PROCESS 
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Appendix C 

OIG CONTENT ANALYSIS 

OIG performed a content analysis of audit reports, inspection 

reports, and safety evaluation reports for a judgmental sample of 

license renewal applications submitted between September 2000 

and January 2006.24 The judgmental sample of license renewal 

applications represents a cross-section of plant ages, technologies, 

year of renewal, NRC review method, and NRC region. For the 

review, OIG focused on narrative passages in the applications and 

reports that addressed the operating experience program element 

for a selection of aging management programs.25 The OIG sample 

generated 458 data points reflecting how the license renewal 

auditor’s methodology and support for conclusions was addressed 

in the audit, inspection, and safety evaluation reports, as shown in 

the following table: 

 

24 OIG chose a judgmental sample in order to assure a mix of different plant types and renewal program 

experience. Consequently, this report presents findings related to the sample only and does not extrapolate 

results from the sample to the entire universe of renewal reviews. 

25 Not all aging management programs were reviewed in OIG’s analysis. OIG selected 11 aging 

management programs for its content analysis and each of these 11 aging management programs were 

reviewed for each sampled plant for consistency. As a result, some aging management programs did not 

apply to a plant, and in such cases OIG did not create a data point for that plant. Moreover, OIG 

acknowledges the possibility that aging management programs not reviewed could have scored differently 

than the results indicated in OIG’s report. 
Audit of NRC’s License Renewal Program 

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Table 2 

Summary of OIG Analysis of Report Documentation for the GALL 

Operating Experience Program Element 

LRA a

 Data Points 

Application Date Total Green Yellow Red 

Vermont Yankee 2006 12 0 12 0 

Oyster Creek 2005 40 0 34 6 

Palisades 2005 42 4 29 9 

Monticello 2005 28 1 23 4 

Millstone 2004 46 0 34 12 

Browns Ferry 2004 40 1 22 17 

Brunswick 2004 42 2 30 10 

Point Beach 2004 38 2 30 6 

D.C. Cook 2003 50 1 37 12 

Dresden/Quad Cities 2003 42 0 11 31 

Ginna 2002 42 0 8 34 

St. Lucie 2001 20 0 10 10 

Turkey Point 2000 16 0 8 8 

Total 458 11 288 159 

Percent 100% 2.4% 62.9% 34.7% 

Source: OIG analysis of NRC license renewal audit, inspection, and safety 

evaluation reports; and of licensee renewal applications. b

 

Notes: 

a. License Renewal Application. 

b. The number of data points by application varies owing to 

applicability of individual aging management programs. Some of 

the older applications pre-date the DLR audit function, and there 

was no inspection report or safety evaluation report yet available for 

Vermont Yankee at the time of OIG’s analysis. 

Table 2 provides subjective “red,” “yellow,” and “green” ratings, 

which reflect the extent to which review methodology is disclosed 

and staff conclusions are supported in the reports. 

3⁄4 A red rating indicates, for an aging management program 

reviewed by NRC, that there was no mention of review 

methodology or no specific support for the staff’s conclusions in 

the audit, inspection, or safety evaluation reports. 

3⁄4 A yellow rating indicates, for an aging management program 

reviewed by NRC, that the audit, inspection, or safety evaluation 

reports cited anecdotal information provided by the licensee or 
Audit of NRC’s License Renewal Program 

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restated language from the license renewal application to 

support staff conclusions. A yellow rating also indicates that the 

methodology reported was limited to reviewing the license 

renewal application and interviewing licensee personnel, or to 

reviewing anecdotal information provided by the licensee. 

3⁄4 A green rating indicates, for an NRC-reviewed aging 

management program, that the audit, inspection, or safety 

evaluation reports provided details regarding the staff’s review 

methodology beyond a simple review of the license renewal 

application or anecdotal information provided by the licensee. 

The green rating also indicates that the staff provided detailed 

and independent support for their conclusions in the report. 

OIG conducted additional analysis of the yellow data points to 

determine how closely the application information that was restated 

in the license renewal reports resembled the original information 

provided in the applicable license renewal application. OIG found 

that 191 of the 288 yellow data points, or 41.7 percent of the total 

458 data points, were identical or nearly identical to the information 

provided in the license renewal application. Examples of original 

license renewal application text being repeated in an NRC 

document with no or few clues to indicate to the reader that it is 

repeated prose are provided in Appendix D. 
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Appendix D 

EXAMPLES OF LICENSE RENEWAL APPLICATION TEXT 

REPEATED IN NRC DOCUMENTS 

Original License Renewal Application Text NRC License Renewal Report Text 

Operating experience of Flow-Accelerated Corrosion aging 

management program activities has shown that the 

program can determine susceptible locations for flow 

accelerated corrosion, predict the component degradation, 

and detect the wall thinning in piping, valves, and 

Feedwater Heater shells due to flow-accelerated corrosion. 

In addition, the program provides for reevaluation, repair or 

replacement for locations where calculations indicate an 

area will reach minimum allowable thickness before the 

next inspection. Periodic self-assessments of the program 

have been performed which have identified opportunities 

for program improvements. (Oyster Creek LRA a

, p. B-41.) 

Operating experience of the Flow-Accelerated Corrosion 

Program activities shows that the program can determine 

susceptible locations for Flow-Accelerated Corrosion, 

predict the component degradation, and detect the wall 

thinning in piping, valves, and feedwater heater shells due 

to Flow-Accelerated Corrosion. In addition, the program 

provides for reevaluation, repair, or replacement for 

locations where calculations indicate an area will reach 

minimum allowable thickness before the next inspection. 

Periodic self-assessments of the program have been 

performed which have identified opportunities for program 

improvements. (NRC’s SER b

 with Open Items for Oyster 

Creek, p. 3-14.) 

The OE review shows that the BSEP Bolting Integrity 

Program is continually upgraded based on industry 

experience, research, and routine program performance. 

The Program, through its continual improvement, assures 

the capability of mechanical bolting to support the safe 

operation of BSEP throughout the extended period of 

operation. (Brunswick LRA, p. B-24) 

The applicant also states that the operating experience 

review shows that its bolting integrity program is continually 

upgraded based on industry experience, research, and 

routine program performance. The program, through its 

continual improvement, assures the capability of 

mechanical bolting to support the safe operation of BSEP 

throughout the extended period of operation. (NRC’s Audit 

Report for Brunswick, p. 39) 

The fire water system parameters are monitored, tested 

and piping and component evaluations are performed to 

ensure that the system maintains its intended function. 

Browns Ferry Fire Water System operating experience 

indicates a trend of piping degradation, such as leaks, 

general corrosion, biofouling, etc. Piping is being replaced, 

as required, per corrective actions of the inspection and 

testing activities. (Browns Ferry LRA, p. B-76) 

In LRA Section B.2.1.24, the applicant stated that the fire 

water system parameters are monitored and tested, and 

that piping and component evaluations are performed to 

ensure that the system maintains its intended function. The 

BFN Fire Water System operating experience indicates a 

trend of piping degradation, such as leaks, general 

corrosion, and biofouling, etc. Piping is being replaced, as 

required, in accordance with corrective actions of the 

inspection and testing activities. (NRC’s SER for Browns 

Ferry, p. 3-70) 

A review of operating experience pertaining to the Oil 

Analysis Program determined that program enhancements 

have been made based on industry and plant-specific 

operating experience. For example, the potential for 

possible incompatibility between emergency diesel 

generator fuel oil and lube oil identified at Calvert Cliffs 

Nuclear Power Plant was evaluated and a program change 

was made to ensure the problem was addressed at CNP. 

The review of condition reports indicates that the program 

has detected conditions at levels below which aging 

degradation is expected to occur. (D.C. Cook LRA, p. B77) 

The applicant states in CNP AMP c

 B.1.23, for the 

operating experience program element, that a review of 

operating experience pertaining to this AMP determined 

that program enhancements have been made based on 

industry and plant-specific operating experience. For 

example, the potential for possible incompatibility between 

emergency diesel generator fuel oil and lube oil identified at 

another nuclear power plant was evaluated and a program 

change was made to ensure the problem was addressed. 

The review of condition reports indicates that the program 

has detected conditions at levels below which aging 

degradation is expected to occur. (NRC’s Audit Report for 

D.C. Cook, p. 68) 

Source: OIG analysis of NRC license renewal audit, inspection, and safety evaluation reports; and of license renewal 

applications. 

Notes: 

a. license renewal application 

b. safety evaluation report 

c. aging management program 
Audit of NRC’s License Renewal Program 

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Appendix E 

FORMAL AGENCY COMMENTS 
Audit of NRC’s License Renewal Program 

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Appendix F 

OIG ANALYSIS OF AGENCY COMMENTS 

On May 8, 2007, OIG issued its draft report to the Executive 

Director for Operations. OIG subsequently met with managers from 

the Division of License Renewal and the Office of the General 

Counsel to address specific issues and concerns needing further 

clarification and/or explanation. On May 24, 2007, OIG discussed 

its draft report with agency senior executives. Subsequent to that 

meeting, NRC provided informal comments on the draft report for 

OIG’s consideration. On July 6, 2007, the Deputy Executive 

Director for Reactor Programs provided a formal response to this 

report in which the agency disagreed with OIG’s finding regarding 

applicability of the backfit rule to license renewals applicants (see 

Appendix E). OIG’s analysis of the agency’s response is as 

follows: 

The staff’s position on backfit applicability to license renewal is 

addressed as it pertains to (1) holders of renewed licenses and (2) 

license renewal applicants. As discussed below, OIG agrees in 

part with the agency’s position that under certain circumstances 

backfitting does not apply. However, as reflected in Figure 4, OIG 

disagrees with the agency’s position regarding applicability of the 

backfit rule to license renewal applicants. 

Figure 4 

Application of Backfit to License Renewal 

Holders of Renewed Licenses 

NRC staff and OIG agree that the 

Backfit Rule Does Not Apply, per 10 

CFR 54.37(b)*, to Newly Identified 

SSCs subject to aging management 

or time-limited aging analysis 

License Renewal 

Applicants

OIG believes the Backfit 

Rule Does Apply to New or 

Different Staff Positions 

affecting interpretations of 

license renewal. NRC staff 

disagrees. 

 

Holders of Renewed Licenses 

NRC staff and OIG agree that the 

Backfit Rule Backfit Rule Does 

Apply to New or Different Staff 

Positions affecting SSCs previously 

within the scope of license renewal
Audit of NRC’s License Renewal Program 

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*10 CFR 54.37(b) has provided a specific exception from backfitting requirements for 

holders of renewed licenses, but only regarding “newly” identified SSCs subject to aging 

or time-limited aging analysis. 

Figure 4 demonstrates the applicability of the Backfit Rule only as 

the Rule applies to staff positions regarding license renewal 

interpretations. 

Holders of Renewed Licenses 

OIG agrees with the staff’s position that 10 CFR 50.109, 

“Backfitting,” does not apply to license renewal (for holders of 

renewed licenses) with respect to new structures, systems or 

components (SSC) brought within the scope of the license renewal 

rule as required by 10 CFR 54.37(b). OIG also concurs with the 

staff’s acknowledgement that the backfit rule does generally apply 

for SSCs that were or should have been reviewed during the scope 

of license renewal review. [emphasis added] However, the agency 

does not have a process to identify whether ISGs address new 

SSCs or those previously within the scope of license renewal 

reviews. As a result, there is no documented means to determine 

whether ISGs have met the provisions in 10 CFR 54.37(b) and 

thereby not subject to backfitting. 

License Renewal Applicants

 

Again citing 10 CFR 54.37(b), the staff maintains that the backfitting 

rule does not apply to license renewal applicants. In support of this 

interpretation, the staff references a 1995 Commission SOC 

published with promulgation of the License Renewal Rule. The 

staff repeatedly told OIG that the 1995 SOC is the statement of the 

Commission’s intent which sustains the staff’s current position on 

the continued non-applicability of the backfit rule to license renewal 

applicants. 

In OIG’s opinion, the plain language of the backfit regulation states 

that the backfit rule is applicable to holders of an operating license, 

which by default includes applicants seeking a renewed license.26 

There is no exception in the backfit rule suspending applicability of 

the rule to subject matter related to a license renewal application 

 

26 10 CFR 50.109(a)(1)(iii). 
Audit of NRC’s License Renewal Program 

57

nor is there any provision in the License Renewal Rule indicating 

that backfitting does not apply to “applicants.” Consequently, the 

sole regulatory basis for the staff’s position that backfitting does not 

apply to applicants is the 1995 SOC. 

OIG notes that the SOC does include some discussion of the 

Commission’s rationale regarding backfitting and the license 

renewal regulation. This discussion included the following: 

“There are no licensees currently holding renewed nuclear 

power plant operating licenses who would be affected by this 

rule. No applications for license renewal have been 

docketed. It is also unlikely that any license renewal 

applications will be submitted before this rule becomes 

effective.”27 

OIG’s assessment of the SOC is that the Commission based its 

1995 position on backfitting, at least in part, on the practical reality 

that application of the backfit rule to new staff positions on license 

renewal made no sense at a time when there were no foreseeable 

license renewal applicants, much less current license renewal 

applicants or holders of renewed licenses. In OIG’s opinion, it 

would have served no valid regulatory purpose to require backfitting 

at that time as there were no affected applicants, potential 

applicants, or holders of renewed licenses. However, the 

Commission’s position in the SOC is 12 years old. 

The Commission’s membership and the underlying circumstances 

supporting the 1995 position have significantly changed. 

Specifically, at the time of this report, there are 48 holders of 

renewed licenses, eight current license renewal applicants, and the 

NRC expects approximately 23 new applicants through 2013. 

Within the current environment, applicants, potential applicants, 

and holders of renewed licenses all may be affected by new staff 

positions regarding license renewal. Therefore, the staff’s 

continued reliance on the 1995 SOC regarding the application of 

 

27 Volume 60, Federal Register, at 22491, Page 40, 2nd Paragraph. 
Audit of NRC’s License Renewal Program 

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backfitting to license applicants is questionable. As a result, OIG is 

recommending that the current Commission affirm or modify the 

1995 Statement of Considerations position regarding the 

applicability of the backfit rule to license renewal applicants.