July 12, 2002

EA-02-031

Mr. M. Warner

Site Vice President

Kewaunee and Point Beach Nuclear Plants

Nuclear Management Company, LLC

6610 Nuclear Road

Two Rivers, WI 54241

SUBJECT: POINT BEACH NUCLEAR PLANT FINAL SIGNIFICANCE

DETERMINATION FOR A RED FINDING AND NOTICE OF VIOLATION

NRC SPECIAL INSPECTION REPORT NO. 50-266/01-17(DRS); 

50-301/01-17(DRS)

Dear Mr. Warner:

The purpose of this letter is to provide you with the final results of our review of the apparent

violations and preliminary significance determination of the finding identified in the subject

report of the Special Inspection we conducted. The finding and violations involved the potential

common mode failure of the auxiliary feedwater (AFW) pumps during specific accident

scenarios that you discovered during your efforts to update your probabilistic risk assessment

(PRA) of the Point Beach Nuclear Plant. The inspection report described apparent violations of

10 CFR Part 50, Appendix B, Criterion V, “Instructions, Procedures, and Drawings,” for

inadequate procedures and 10 CFR Part 50, Appendix B, Criterion XVI, “Corrective Actions,” for

seven instances where you should have identified and corrected the vulnerability. The

inspection finding was assessed using the significance determination process and was

preliminarily characterized as Red, i.e., a finding of high importance to safety that could result in

increased NRC inspection and other NRC action. 

At your request, a Regulatory Conference was held on April 29, 2002, to further discuss your

views on the apparent violations and preliminary risk significance determination. A copy of the

handouts used at this conference are enclosed. During the conference, you provided your

assessment of the significance of the finding and detailed your staff’s corrective actions,

including the root cause evaluations. You agreed with the NRC’s preliminary assessment of the

risk significance associated with the finding and the apparent violation of 10 CFR Part 50,

Appendix B, Criterion V; however, you disagreed with the violation of 10 CFR Part 50, Appendix

B, Criterion XVI. You argued that the proposed instances of inadequate corrective actions

either did not specifically relate to the root cause of the problem or that it was not reasonable to

expect appropriate corrective actions because the PRA techniques used to discover the

problems were not used as a formal tool until 1999. Additionally, you proposed that the finding

be treated as an old design issue as specified in NRC Inspection Manual Chapter (MC) 0305,

“Operating Reactor Assessment Program,” and that there was no need for additional

inspection.
M. Warner -2-

After considering the information developed during the inspection and the information your staff

provided at the conference, we have concluded that a violation of 10 CFR Part 50, Appendix B,

Criterion XVI, is appropriate for two of the originally proposed seven examples. The root cause

of the finding was your failure to recognize that the AFW system minimum flow recirculation

valves must be able to close during certain scenarios to allow full flow to the steam generators

and open in other scenarios to allow adequate recirculating flow to protect the running AFW

pumps. Until recently, your procedures and system design only considered the closed safety

function for event response. The specific examples included in the violation occurred in 1997 at

a time when your design basis document for the AFW system identified both open and closed

safety functions as appropriate for the recirculation valves. In March 1997, you identified that a

loss of instrument air to the AFW flow control valves could cause system failure and reported

this in Licensee Event Report 97-014-00. An appropriate extent of condition review should

have identified the same vulnerability for the recirculation valves given their stated open safety

function identified in the AFW system design basis document. Similarly, in October 1997,

Condition Report 97-3363 identified a discrepancy with your inservice test program and the

design basis document concerning the open safety function of the recirculation valves. An

inadequate evaluation of this condition report resulted in revising the design basis document to

delete the open safety function. We also concluded that the PRA techniques you utilized in

2001 to identify this issue were a valuable engineering tool to assess its significance, but were

not required to identify this AFW system vulnerability. 

Although not cited, your response to Generic Letter 88-14, “Instrument Air Supply Problems

Affecting Safety-Related Equipment,” could also have identified and addressed the AFW

system vulnerability associated with loss of instrument air. Generic Letter 88-14 requested that

licensees verify that emergency procedures and training were adequate to ensure that safetyrelated equipment would function as intended on a loss of instrument air and to verify that

safety-related components would perform as expected on a loss of the instrument air system,

including that air-operated component failure positions were correct for assuring required safety

functions. This generic correspondence should have directed your attention to this very

vulnerability with the air-operated AFW pump recirculation valves. 

As such, the NRC has determined that the potential common mode failure of the Point Beach

AFW pumps is a violation of 10 CFR Part 50, Appendix B, Criteria V and XVI, as cited in the

enclosed Notice of Violation (Notice). The circumstances surrounding the violation are

described in detail in the subject inspection report. In accordance with the NRC Enforcement

Policy, NUREG-1600, the Notice is considered escalated enforcement action because it is

associated with a Red finding. You are required to respond to this letter and should follow the

instructions specified in the enclosed Notice when preparing your response.
M. Warner -3-

Based on the information contained in the subject inspection report and obtained during the

regulatory conference, the NRC has concluded that the finding is appropriately characterized as

Red. A finding characterized as Red is an issue of high importance to safety that normally

could result in substantially increased NRC inspection and other NRC action. You have 30

calendar days from the date of this letter to appeal the staff’s determination of significance for

the identified Red finding. Such appeals will be considered to have merit only if they meet the

criteria given in MC 0609, Attachment 2. 

We also considered your proposal that this issue be treated as an old design issue as specified

in MC 0305. We recognize that your staff identified the issue and took prompt corrective

actions to revise procedures and train operators to address the immediate safety concerns

associated with the issue. Additionally, your staff installed backup pneumatic supplies for the

recirculation valves to improve the safety of the AFW system design. We also concluded that

although opportunities existed to identify the issue, they occurred several years ago and are not

necessarily indicative of current performance. However, additional information is needed for us

to complete our evaluation of whether or not it is appropriate to treat this issue as an old design

issue. We therefore plan to conduct some additional inspection. Such inspection effort would

be limited to an evaluation of your corrective actions and the basis for your assessment that

similar issues would be appropriately addressed in your corrective action program. We would

also review your plans to continue the initiative to update the Point Beach Nuclear Plant

Probabilistic Risk Assessment so that other potential risk significant issues may be identified if

they exist. We will inform you, by separate correspondence, of our plans for this inspection. 

Following that inspection, we will complete our evaluation of whether or not it is appropriate to

treat the issue as an old design issue and inform you of our decision. 

If we determine that treatment as an old design issue is appropriate, then, in accordance with

Section 6.06.a. of MC 0305, the NRC will not use this finding in consideration of Point Beach’s

overall performance in the Action Matrix. This means that the issue will be posted on the NRC’s

Web site as a Red finding for a period of 4 quarters. However, Point Beach will not be placed

in the Multiple/Repetitive Degraded Cornerstone Column of the Action Matrix nor will the

specified actions associated with this column be taken as would normally occur for a Red

finding. The purpose of this approach is to place a premium on licensees initiating efforts to

identify and correct safety-significant issues that are not likely to be identified by routine efforts

before degraded safety systems are called upon to work. 

However, if treatment as an old design issue is not determined to be appropriate, then the issue

will be posted on the NRC’s Web site as a Red finding for a period of 4 quarters, Point Beach

will be placed in the Multiple/Repetitive Degraded Cornerstone Column of the Action Matrix, and

the NRC will take the appropriate actions in accordance with the guidance provided in 

MC 0305.
M. Warner -4-

In accordance with 10 CFR 2.790 of the NRC’s “Rules of Practice,” a copy of this letter and

its enclosures will be available electronically for public inspection in the NRC Public

Document Room or from the Publically Available Records (PARS) component of NRC’s

document system (ADAMS). ADAMS is accessible from the NRC Web site at

http://www.nrc.gov/reading-rm/adams.html (the Public Electronic Reading Room).

Sincerely,

/RA/

J. E. Dyer

Regional Administrator

Docket Nos. 50-266; 50-301

License Nos. DPR-24; DPR-27

Enclosures: 1. Notice of Violation

2. NRC April 29, 2002 Regulatory Conference Slides

3. NMC April 29, 2002 Regulatory Conference Slides

4. NMC Photograph of Recirculation Valve

5. NMC April 29, 2002 Regulatory Conference Timeline

cc w/encls: R. Grigg, President and Chief

 Operating Officer, WEPCo

R. Anderson, Executive Vice President

 and Chief Nuclear Officer

T. Webb, Licensing Manager

D. Weaver, Nuclear Asset Manager

T. Taylor, Plant Manager

A. Cayia, Site Director

J. O’Neill, Jr., Shaw, Pittman, 

 Potts & Trowbridge

K. Duveneck, Town Chairman

 Town of Two Creeks

D. Graham, Director

 Bureau of Field Operations

A. Bie, Chairperson, Wisconsin

 Public Service Commission

S. Jenkins, Electric Division

 Wisconsin Public Service Commission

State Liaison Officer
M. Warner -4-

In accordance with 10 CFR 2.790 of the NRC’s “Rules of Practice,” a copy of this letter and

its enclosures will be available electronically for public inspection in the NRC Public

Document Room or from the Publically Available Records (PARS) component of NRC’s

document system (ADAMS). ADAMS is accessible from the NRC Web site at

http://www.nrc.gov/reading-rm/adams.html (the Public Electronic Reading Room).

Sincerely,

/RA/

J. E. Dyer

Regional Administrator

Docket Nos. 50-266; 50-301

License Nos. DPR-24; DPR-27

Enclosures: 1. Notice of Violation

2. NRC April 29, 2002 Regulatory Conference Slides

3. NMC April 29, 2002 Regulatory Conference Slides

4. NMC Photograph of Recirculation Valve

5. NMC April 29, 2002 Regulatory Conference Timeline

cc w/encls: R. Grigg, President and Chief

 Operating Officer, WEPCo

R. Anderson, Executive Vice President

 and Chief Nuclear Officer

T. Webb, Licensing Manager

D. Weaver, Nuclear Asset Manager

T. Taylor, Plant Manager

A. Cayia, Site Director

J. O’Neill, Jr., Shaw, Pittman, 

 Potts & Trowbridge

K. Duveneck, Town Chairman

 Town of Two Creeks

D. Graham, Director

 Bureau of Field Operations

A. Bie, Chairperson, Wisconsin

 Public Service Commission

S. Jenkins, Electric Division

 Wisconsin Public Service Commission

State Liaison Officer

DOCUMENT NAME:C:\ORPCheckout\FileNET\ML021960124.wpd

To receive a copy of this document, indicate in the box: "C" = Copy without attachment/enclosure "E" = Copy with attachment/enclosure "N" = No copy

OFFICE RIII RIII RIII RIII RIII

NAME RLangstaff:jb JJacobson JGrobe GGrant BClayton

DATE 07/05/02 06/06/02 06/21/02 06/25/02 07/10/02

OFFICE NRR RIII

NAME MSartorius for

per telecom

CCarpenter

JDyer

DATE 07/09/02 07/12/02

OFFICIAL RECORD COPY
M. Warner -5-

ADAMS Distribution:

WDR 

DFT 

BAW

RidsNrrDipmIipb

HBC

PGK1

DRPIII

DRSIII

PLB1

JRK1

SECY 

OCA 

M. Banerjee, NRR

G. Tracy, Chief, Division of Inspection Program Management, IOLB, NRR

H. Nieh, Region III Coordinator, OEDO

W. Travers, EDO

W. Kane, DEDRP

F. Congel, OE

J. Dixon-Herrity, OE

J. Dyer, RIII:RA

L. Chandler, OGC

D. Dambly, OGC

S. Collins, NRR

R. Borchardt, NRR

D. Holody, RI Enforcement Coordinator

C. Evans, RII Enforcement Coordinator

G. Sanborn, RIV Enforcement Coordinator

L. Dudes, NRR 

P. Krohn, SRI

S. Gagner, OPA

H. Bell, OIG

G. Caputo, OI

F. Combs, OSTP

D. Dandois, OCFO/DAF/LFARB

J. Strasma, RIII:PA

V. Mitlyng

R. Lickus, RIII

J. Lynch, RIII

OEWEB

OEMAIL
NOTICE OF VIOLATION

Nuclear Management Company, LLC. Docket Nos. 50-266; 50-301

Point Beach Nuclear Plant License Nos. DPR-24; DPR-27

EA-02-031

During an NRC inspection conducted on December 3, 2001, through February 28, 2002, a

violation of NRC requirements was identified. In accordance with the "General Statement of

Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the violation is listed

below:

10 CFR Part 50, Appendix B, Criterion V, “Instructions, Procedures, and Drawings,”

requires, in part, that activities affecting quality shall be prescribed by documented

instructions, procedures, or drawings, of a type appropriate to the circumstances.

10 CFR Part 50, Appendix B, Criterion XVI, “Corrective Action,” requires, in part, that

measures shall be established to assure that conditions adverse to quality are promptly

identified and corrected. In the case of significant conditions adverse to quality, the

measures shall assure that the cause of the condition is determined and corrective

actions taken to preclude repetition.

Contrary to the above, as of November 29, 2001, activities affecting quality were not

prescribed by documented instructions, procedures, or drawings, of a type appropriate

to the circumstances. Specifically, procedures EOP-0.1 Unit 1, “Reactor Trip

Response,” Revision 24, and EOP-0.1 Unit 2, “Reactor Trip Response,” Revision 23, did

not provide adequate operator instructions to verify that the auxiliary feedwater (AFW)

pump minimum flow recirculation valves were open while controlling AFW flow upon low

instrument air header pressure. Low header pressure would cause the AFW pump

minimum flow recirculation valves to fail closed, a significant condition adverse to quality

which resulted in potential failure of the AFW pumps as a result of blocking the

discharge flow path. From at least 1997 to 2001, the licensee failed to promptly identify

and correct a condition adverse to quality. Prior opportunities to identify this failure

mode included:

• In October 1997, the safety function of the minimum flow recirculation valves

was considered in response to Condition Report 97-3363.

• In March 1997, the licensee identified a failure mode of the AFW system due to

the loss of instrument air as discussed in Licensee Event 

Report 97-14-00.

This violation is associated with a Red SDP finding.
Notice of Violation -2-

Pursuant to the provisions of 10 CFR 2.201, Nuclear Management Company, LLC., is hereby

required to submit a written statement or explanation to the U.S. Nuclear Regulatory

Commission, ATTN: Document Control Desk, Washington, DC 20555-0001, with a copy to the

Regional Administrator, Region III, and a copy to the NRC Resident Inspector at the facility that

is the subject of this Notice, within 30 days of the date of the letter transmitting this Notice of

Violation (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and

should include for each violation: (1) the reason for the violation, or, if contested, the basis for

disputing the violation or severity level, (2) the corrective steps that have been taken and the

results achieved, (3) the corrective steps that will be taken to avoid further violations, and (4) the

date when full compliance will be achieved. Your response may reference or include previous

docketed correspondence, if the correspondence adequately addresses the required response. 

If an adequate reply is not received within the time specified in this Notice, an order or a

Demand for Information may be issued as to why the license should not be modified,

suspended, or revoked, or why such other action as may be proper should not be taken. Where

good cause is shown, consideration will be given to extending the response time. 

If you contest this enforcement action, you should also provide a copy of your response, with the

basis for your denial, to the Director, Office of Enforcement, United States Nuclear Regulatory

Commission, Washington, DC 20555-0001. 

Because your response will be made available electronically for public inspection in the NRC

Public Document Room or from the Publicly Available Records (PARS) component of NRC’s

document system (ADAMS), to the extent possible, it should not include any personal privacy,

proprietary, or safeguards information so that it can be made available to the public without

redaction. ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm.html

(the Public Electronic Reading Room). If personal privacy or proprietary information is

necessary to provide an acceptable response, then please provide a bracketed copy of your

response that identifies the information that should be protected and a redacted copy of your

response that deletes such information. If you request withholding of such material, you must

specifically identify the portions of your response that you seek to have withheld and provide in

detail the bases for your claim of withholding (e.g., explain why the disclosure of information will

create an unwarranted invasion of personal privacy or provide the information required by 

10 CFR 2.790(b) to support a request for withholding confidential commercial or financial

information). If safeguards information is necessary to provide an acceptable response, please

provide the level of protection described in 10 CFR 73.21. 

In accordance with 10 CFR 19.11, you may be required to post this Notice within two working

days. 

Dated this _12th___ day of July 2002