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# Regulatory Analysis

A regulatory analysis is a formal analysis of a proposed government agency requirement, including estimates of benefits and costs that are quantified to the fullest extent possible . The NRC uses regulatory analyses to consider preferred alternatives from the potential courses of action studied. A regulatory analysis contains estimates of benefits and costs with a conclusion as to whether the proposed regulatory action is cost justified and documents the analysis in an organized and understandable format.

A regulatory analysis is performed to support numerous actions affecting reactor and material licensees but is always required by NRC policy when an NRC action is expected to impact industry resources. In general, the NRC ensures that all mechanisms used to establish or communicate generic requirements, guidance, requests or staff positions that would affect a change in the use of resources by its licensees include an accompanying regulatory analysis. These mechanisms include rules, bulletins, generic letters, regulatory guides, orders, standard review plans, branch technical positions, and standard technical specifications. Regulatory analyses are used to comply with Office of Management and Budget guidance and executive orders and as a decision tool for policy makers by providing a rationale for action and transparency for agency decision making.

There are several primary documents that the NRC follows when performing regulatory analyses; they are discussed below:

**References:**
        -  **Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission**  NUREG/BR-0058, "Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission," provides detailed information on the circumstances when regulatory analysis is required at the NRC and the process and components of an effective regulatory analysis. 
        -  **The Rulemaking Process**  Management Directive 6.3, "The Rulemaking Process", details the rulemaking process for NRC employees, and describes where and how the regulatory analysis integrates with rulemaking. 
        -  **Executive Order 12866**  Executive Order 12866, “Regulatory Planning and Review,” contains principles of regulation, and the elements of a cost-benefit analysis that are relevant to regulatory analysis. The NRC, while not bound to Executive Order 12866, as an independent agency, voluntarily complies with certain requirements in the executive order. 
        -  **NUREG-1530, Revision 1**  NUREG-1530, Revision 1, “The Reassessment of NRC's Dollar Per Person-Rem Conversion Factor Policy, Final Report” describes how the NRC uses the dollar per person-rem conversion factor in developing cost-benefit analyses to determine the monetary valuation of the consequences associated with radiological exposures. When the conversion factor has changed by more than $1,000, the NRC re-evaluates the baseline values for the values of statistical life and cancer mortality risk coefficient. 
        -  **NUREG-2242**  NUREG-2242, “Replacement Energy Cost Estimates for Nuclear Power Plants: 2020-2030” describes how replacement energy costs are estimated for the United States wholesale electricity market regions with nuclear electricity-generating units over the 2020–2030 report period. These estimates were developed to assist the U.S. Nuclear Regulatory Commission (NRC) in evaluating proposed regulatory actions that (1) require safety modifications that might necessitate temporary reactor outages and (2) reduce the potential for the loss of generation associated with a possible severe reactor accident. 
        -  **Regulatory Analysis Supporting Data**  **NRC Labor Rates for Regulatory Analyses**  NUREG/BR-0058 describes the steps for estimating NRC implementation costs for a proposed regulatory action. The NRC’s labor rates are determined using the methodology in Abstract 5.2 of NUREG/CR-4627. This methodology considers only variable costs (including salary and benefits) that are directly related to the implementation, operation, and maintenance of the amendments. The NRC’s labor rates are distributed annually.  YearAnnual Labor Rate*Annual Productive Hours**Hourly Rate2022$222,2781551$1432021$217,5441524$1432020$206,7331510$1372019$197,9751510$1312018$194,0201500$1292017$189,3011440$1312016$183,7021420$1292015$181,3011420$1282014$176,5221420$1242013$167,0031375$1212012$173,0001375$1262011$172,0001451$1192010$170,0001451$117 	* Annual labor rate rounded to the nearest thousand dollars.  	** The budget instructions for the planning year provides the number of productive hours per full time equivalent (FTE) to use to formulate that fiscal year’s budget.
        -  **Dollar Per Person-Rem Conversion**  The dollar per person-rem conversion factor is adjusted annually based on inflation and real income growth using the methodology contained in Chapter 7 of NUREG-1530.  This conversion factor has been updated to $7,100 in 2022 dollars based on the application of an updated best estimate value of statistical life (VSL) of $12.3 million and the U.S. Environmental Protection Agency’s cancer mortality risk coefficient of 5.8 × 10-4 per person rem. Two alternative conversion factors were also updated for use in sensitivity analyses.  ParameterBestLowHigh2014 Year VSL9.00E+065.30E+061.32E+07Inflation1.1913Real Income Growth1.314VSL Income Elasticity0.5Fully Adjusted VSL1.23E+077.24E+061.80E+07Cancer Mortality Risk Coefficient5.80 x 10-42023 Year Dollar per Person-Rem Conversion Factor$7,100$4,200$10,500 

Page Last Reviewed/Updated Tuesday, February 21, 2023

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Page Last Reviewed/Updated Tuesday, February 21, 2023