June 27, 2005

EA-05-037

Gregg R. Overbeck, Senior Vice 

 President, Nuclear

Arizona Public Service Company

P.O. Box 52034

Phoenix, AZ 85072-2034

SUBJECT: NOTICE OF VIOLATION (NRC INSPECTION REPORT 05000528/2005011,

05000529/2005011, AND 05000530/2005011)

Dear Mr. Overbeck:

This refers to the inspection of Palo Verde Nuclear Generating Station (Palo Verde) emergency

plan changes, the results of which were documented in Palo Verde inspection report 2005-011

issued on April 5, 2005. On March 4, 2005, the results of this inspection were discussed with

members of your staff during an exit meeting at the Palo Verde facility. We informed Arizona

Public Service (APS) at that time that we had identified an apparent violation of NRC

requirements for which escalated enforcement action was being considered.

The apparent violation involved making a change to the Palo Verde emergency plan which

appeared to have decreased the plan’s effectiveness. Specifically, certain emergency action

level (EAL) definitions that relied on field radiation survey results were modified in a way that

made them technically inaccurate and unable to be implemented as written. NRC regulations in

10 CFR 50.54(q) permit a licensee to make emergency plan changes without NRC approval

only if the changes do not decrease the effectiveness of the plan.

In the letter transmitting the inspection report, we provided APS an opportunity to address the

apparent violation at a predecisional enforcement conference or in a written response before

NRC made a final enforcement decision. APS requested an opportunity for a conference, and

on June 1, 2005, a predecisional enforcement conference was conducted in the NRC’s Region

IV office with members of the Palo Verde staff to discuss APS’s position on the apparent

violation, its significance, its root cause, and any corrective actions taken or planned.

At the conference, APS admitted the violation, and attributed it, in part, to inadequate radiation

protection expertise in the emergency planning department, a failure to subject the plan change

to cross-organizational reviews, and a failure to provide appropriate training when

responsibilities for emergency plan changes were transferred from one organization to another. 

APS acknowledged that the resulting conflict in procedural guidance (i.e., the EAL changes

were not consistent with existing implementing procedures) could delay classification of an

emergency or result in an event being mis-classified. APS stated that the potential for these

problems was minimal because the implementing procedures were still correct and because the
Arizona Public Service Co. -2-

1 APS was issued a Severity Level III violation and $50,000 civil penalty on April 8, 2005, for a 1992

violation of 10 CFR 50.59. However, that violation was reflective of performance more than a decade earlier, and the

citation for it was not within the 2-year period preceding the identification of the emergency plan change issue.

training and knowledge of the radiation protection staff would overcome any confusion created

by the discrepant EALs.

APS’s corrective actions were particularly comprehensive; most noteworthy was the action APS

took to probe beyond the specific violation to identify root causes which revealed program

weaknesses in knowledge transfer and cross-organizational reviews of plan changes. At the

conference, APS stated that it had taken the following actions: (1) revised the affected EALs to

their previous definitions; (2) reviewed other emergency plan changes involving EALs made

since 1994; (3) evaluated changes made to the Palo Verde security, fire protection and quality

assurance plans; (4) developed training and job qualification requirements for those making

emergency plan changes; (5) assigned radiation protection and operations personnel to the

emergency planning department; (6) coached emergency plan personnel in the need for rigor,

attention to detail and questioning attitude; and (7) assigned a new emergency plan manager.

Based on the information developed during the inspection, and consideration of the information

that APS provided during the conference, the NRC has determined that a violation of NRC

requirements occurred. The violation is cited in the enclosed Notice of Violation (Notice) and

involved violating the requirements of 10 CFR 50.54(q). Specifically, APS made an emergency

plan change that decreased the plan’s effectiveness, and did so without prior NRC approval. 

This violation was assessed in accordance with the NRC Enforcement Policy because making

this plan change without NRC approval impacted the regulatory process.

While this violation did not result in any actual safety consequences, it created the potential for

confusion caused by differences between EAL definitions and emergency plan implementing

procedures. As APS acknowledged at the conference, this had the potential to delay

classification or result in mis-classification of an emergency. Also, the violation was indicative

of a larger problem in APS’s review of emergency plan changes, as discovered during APS’s

root cause analysis following the identification of the violation.

Therefore, this violation has been categorized in accordance with the NRC Enforcement Policy

at Severity Level III. In accordance with the Enforcement Policy, a base civil penalty in the

amount of $65,000 is considered for a Severity Level III violation. Because Palo Verde was not

the subject of escalated enforcement action under the NRC Enforcement Policy in the 2 years

preceding the identification of this issue,1

 the NRC considered whether credit was warranted for

Corrective Action in accordance with the civil penalty assessment process in Section VI.C.2 of

the Enforcement Policy. The NRC determined that corrective action credit was warranted

because APS’s corrective actions, described earlier, were prompt and comprehensive. 

Compliance was restored by revising the affected EALs to their previous definitions. This

results in no civil penalty being assessed for this violation.

Therefore, in recognition of the corrective actions taken, and in accordance with the provisions

of the NRC Enforcement Policy regarding treatment of prior escalated enforcement actions, I

have been authorized, after consultation with the Director, Office of Enforcement, not to

propose a civil penalty in this case. However, significant violations in the future could result in a
Arizona Public Service Co. -3-

civil penalty as there are now two examples of escalated enforcement action taken against APS

since April 2005.

APS is required to respond to this letter and should follow the instructions specified in the

enclosed Notice when preparing a response. The NRC will use this response, in part, to

determine whether further enforcement action is necessary to ensure compliance with

regulatory requirements.

APS’s extent of condition review identified another violation involving an emergency plan

change made without NRC approval and which reduced the effectiveness of the plan. 

Specifically, APS identified a change to an EAL definition involving core exit thermocouple

temperature readings which APS concluded was a decrease in plan effectiveness. This

violation would have warranted classification at Severity Level III. However, the NRC is

exercising enforcement discretion, as provided for in section VII.B.4 of the NRC Enforcement

Policy, and is electing not to consider enforcement action for this issue. Specifically, APS

identified this violation as part of its corrective action for the violation identified by the NRC and

took corrective action within a reasonable time following discovery, ultimately deciding to revise

the EAL to its previous version. In addition, the violation appears to have resulted from similar

weaknesses in the plan change process, and it would not substantially change the safety

significance of the initial violation.

In accordance with 10 CFR 2.390 of the NRC's "Rules of Practice," a copy of this letter, its

enclosure, and APS’s response will be made available electronically for public inspection in the

NRC Public Document Room or from the NRC’s document system (ADAMS), accessible from

the NRC Web site at http://www.nrc.gov/reading-rm/adams.html. To the extent possible, the

response should not include any personal privacy, proprietary, or safeguards information so

that it can be made available to the Public without redaction. The NRC also includes significant

enforcement actions on its Web site at www.nrc.gov; select What We Do, Enforcement, then

Significant Enforcement Actions.

Sincerely,

/RA/

Bruce S. Mallett

Regional Administrator

Dockets: 50-528, 50-529, 50-530

Licenses: NPF-41, NPF-51, NPF-74

Enclosure: Notice of Violation
Arizona Public Service Co. -4-

cc w/Enclosure:

Steve Olea

Arizona Corporation Commission

1200 W. Washington Street

Phoenix, AZ 85007

Douglas K. Porter, Senior Counsel

Southern California Edison Company

Law Department, Generation Resources

P.O. Box 800

Rosemead, CA 91770

Chairman

Maricopa County Board of Supervisors

301 W. Jefferson, 10th Floor

Phoenix, AZ 85003

Aubrey V. Godwin, Director

Arizona Radiation Regulatory Agency

4814 South 40 Street

Phoenix, AZ 85040

Craig K. Seaman, Director

Regulatory Affairs

Palo Verde Nuclear Generating Station

Mail Station 7636

P.O. Box 52034

Phoenix, AZ 85072-2034

Hector R. Puente

Vice President, Power Generation

El Paso Electric Company

310 E. Palm Lane, Suite 310

Phoenix, AZ 85004

Jeffrey T. Weikert

Assistant General Counsel

El Paso Electric Company

Mail Location 167

123 W. Mills

El Paso, TX 79901

John W. Schumann

Los Angeles Department of Water & Power

Southern California Public Power Authority

P.O. Box 51111, Room 1255-C

Los Angeles, CA 90051-0100

John Taylor

Public Service Company of New Mexico

2401 Aztec NE, MS Z110

Albuquerque, NM 87107-4224

Thomas D. Champ

Southern California Edison Company

5000 Pacific Coast Hwy, Bldg. D1B

San Clemente, CA 92672

Robert Henry

Salt River Project

6504 East Thomas Road

Scottsdale, AZ 85251

Brian Almon

Public Utility Commission

William B. Travis Building

P.O. Box 13326

1701 North Congress Avenue

Austin, TX 78701-3326

Karen O'Regan

Environmental Program Manager

City of Phoenix

Office of Environmental Programs

200 West Washington Street

Phoenix, AZ 85003
NOTICE OF VIOLATION

Arizona Public Service Company Dockets: 50-528, 50-529, 50-530

Palo Verde Nuclear Generating Station Licenses: NPF-41, NPF-51, NPF-74

EA-05-037

During an NRC inspection conducted on September 29, 2004 to March 4, 2005, a violation of

NRC requirements was identified. In accordance with the NRC Enforcement Policy, the

violation is listed below:

10 CFR 50.54(q) states in part, "A licensee authorized to possess and operate a nuclear

power reactor shall follow and maintain in effect emergency plans which meet the

standards in §50.47(b) and the requirements in appendix E of this part .... The nuclear

power reactor licensee may make changes to these plans without Commission approval

only if the changes do not decrease the effectiveness of the plans and the plans, as

changed, continue to meet the standards of §50.47(b) and the requirements of appendix

E to this part.

Contrary to the above, on September 29, 2004, and lasting until February 8, 2005, the

licensee made a change to its emergency plan without prior Commission approval which

decreased the plan’s effectiveness. The licensee removed a classifiable condition from

two emergency action level (EAL) definitions, which made the EALs technically

inaccurate and unable to be implemented as written. For example, with respect to EAL

3-16, the licensee removed the condition, "Site Boundary dose rate > 100 mrem/hr

Deep Dose Equivalent as measured with portable instrumentation," and replaced it with

"Field survey result or valid dose assessment indicates > 100 mrem TEDE or > 500

mrem thyroid CDE at the Site Boundary ...." Similar revisions were made to EAL 3-19.

The revised EALs could not be effectively implemented because field survey

instruments cannot directly determine TEDE (Total Effective Dose Equivalent). This

revision to the EALs decreased the effectiveness of the plans because it had the

potential to create confusion and delay an emergency classification or result in misclassifying an emergency classification.

This is a Severity Level III violation (Supplement VIII).

Pursuant to the provisions of 10 CFR 2.201, Arizona Public Service Company is hereby

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

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

Regional Administrator, Region IV, 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;

EA-05-037" 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. The 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
-2-

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

time. 

If APS contests this enforcement action, it should also provide a copy of the response, with the

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

Commission, Washington, DC 20555-0001. 

Because APS’s response will be made available electronically for public inspection in the NRC

Public Document Room or from the NRC's document system (ADAMS), accessible from the

NRC Web site at http://www.nrc.gov/reading-rm/adams.html, 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. If personal privacy or proprietary information is

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

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

response that deletes such information. If APS requests withholding of such material, it must

specifically identify the portions of your response that it seeks to have withheld and provide in

detail the bases for its 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 2.390(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. 

Dated this 27th day of June 2005
Arizona Public Service Co., Palo Verde, EA-05-037

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via e-mail:

Sanborn - GFS Vasquez - GMV

Gwynn - TPG Mallett - BSM1

R4ALLEGE Smith - KDS1

Maier - WAM Chamberlain - DDC

Howell - ATH Lantz - REL

Powers - DAP Vegel - AXV

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SISP Review Completed: GFS ADAMS: : Yes Initials: GFS

: Publicly Available : Non-Sensitive

DOCUMENT NAME:ML051780380.wpd

ACES C:OB C:DRP/D D:DRS

SANBORN GODY PRUETT CHAMBERLAIN

/RA/ /RA/ /RA/ /RA/

6/13/2005 6/20/2005 6/14/2005 6/17/2005

RC D:OE DRA RA

FULLER JOHNSON GWYNN MALLETT

/RA/ C. Nolan for viaE /RA/ /RA/

6/17/2005 6/23/2005 6/20/2005 6/23/2005

OFFICIAL RECORD COPY T=Telephone E=E-mail F=Fax