February 3, 2004

EA 03-224

Mr. Christopher M. Crane

President and CNO

Exelon Nuclear

200 Exelon Way

KSA3-E

Kennett Square, PA 19348

SUBJECT: FINAL SIGNIFICANCE DETERMINATION FOR A WHITE FINDING AND

NOTICE OF VIOLATION

(NRC Inspection Report No. 50-277/03-13 and 50-278/03-13)

Peach Bottom Atomic Power Station, Units 2 and 3

Dear Mr. Crane:

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

determination for the preliminary White finding identified at Unit 2 during an inspection

completed on November 18, 2003. The results of the inspection were discussed with you and

other members of your staff at an exit meeting on November 18, 2003. The inspection finding

was assessed using the significance determination process and was preliminarily characterized

as White, a finding with low to moderate importance to safety, which may require additional

NRC inspections. 

This preliminary White finding involved issues related to the E2 emergency diesel generator

(EDG), one of four EDGs that constitute the highly risk important standby emergency AC power

system. Specifically, implementation of a deficient maintenance procedure during installation of

EDG cylinder liner adapter gaskets in 1992 eventually allowed combustion gas to leak into the

jacket water cooling system over time. This condition ultimately led to a low jacket water

pressure condition and an automatic trip of the EDG on September 15, 2003. In addition,

corrective actions taken when low jacket water pressure conditions were observed on the E2

EDG in March and April 2003, were inadequate because an action request was closed without

resolving the low jacket water pressure condition, which was indicative of a continuing EDG

performance problem.

In a letter dated December 18, 2003, the NRC transmitted the referenced inspection report and

provided you an opportunity to either request a regulatory conference to discuss this finding, or

explain your position in a written response. In a telephone conversation on January 6, 2003, 

Mr. M. Gallagher, Director, Licensing and Regulatory Affairs, informed Mr. R. Crlenjak, NRC,

Region I, that Exelon did not contest the risk significance of this finding, declined an opportunity

to discuss this finding in a Regulatory Conference, and would not be providing a written

response prior to issuance of this Final Significance Determination.

After considering the information developed during the inspection, the NRC has concluded that

the inspection finding at Unit 2 is appropriately characterized as White, an issue with low to

moderate importance to safety, which may require additional NRC inspections. You have

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

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

the criteria given in NRC Inspection Manual Chapter 0609, Attachment 2.
Mr. C. M. Crane 2

The NRC has also determined that the White finding resulted in two violations, as described in

the enclosed Notice of Violation (Notice). The circumstances surrounding these violations were

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

Enforcement Policy, NUREG-1600, the Notice of Violation is considered escalated enforcement

action because it is associated with a White finding.

The NRC has concluded that information regarding the reason for the violations, the corrective

actions taken and planned to correct the violations and prevent recurrence, and the date when

full compliance was achieved are already adequately addressed on the docket as summarized

in NRC Inspection Report 50-277/03-13; 50-278/03-13 dated December 18, 2003. Therefore,

you are not required to respond to this letter unless the description therein does not accurately

reflect your corrective actions or your position. In that case, or if you choose to provide

additional information, you should follow the instructions specified in the enclosed Notice.

Because plant performance for this issue has been determined to be in the regulatory response

band, we will use the NRC Action Matrix to determine the most appropriate NRC response for

this event. We will notify you, by separate correspondence, of that determination.

In addition, although the deficiency associated with the E2 EDG affected both Peach Bottom

units, the NRC has concluded that the inspection finding for Unit 3 is appropriately

characterized as Green, an issue of very low safety significance. The finding for Unit 3 is less

risk significant than Unit 2 because there are fewer safety-related electrical loads powered by

the E2 EDG on Unit 3.

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

enclosure will be 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). ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/

adams.html (the Public Electronic Reading Room). The NRC also includes significant

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

Significant Enforcement Actions.

Sincerely, 

/RA/ James T. Wiggins Acting For/

Hubert J. Miller

Regional Administrator

Docket Nos: 50-277, 50-278

License Nos: DPR-44, DPR-56

Enclosure: Notice of Violation
Mr. C. M. Crane 3

cc w/encl: President and CNO, Exelon Nuclear

Chief Operating Officer, Exelon Generation Company, LLC

Site Vice President, Peach Bottom Atomic Power Station

Plant Manager, Peach Bottom Atomic Power Station

Regulatory Assurance Manager - Peach Bottom

Senior Vice President, Nuclear Services

Vice President, Mid-Atlantic Operations 

Vice President - Operations Support

Vice President - Licensing and Regulatory Affairs

Director, Licensing, Exelon Generation Company, LLC

Manager, Licensing - Limerick and Peach Bottom

Vice President, General Counsel and Secretary

Correspondence Control Desk

Manager License Renewal

D. Quinlan, Manager, Financial Control, PSEG

R. McLean, Power Plant and Environmental Review Division

D. Levin, Acting Secretary of Harford County Council

Mr. & Mrs. Dennis Hiebert, Peach Bottom Alliance

Mr. & Mrs. Kip Adams

D. Allard, Director, Pennsylvania Bureau of Radiation Protection

R. Janati, Chief, Division of Nuclear Safety, Pennsylvania Bureau of 

 Radiation Protection

Director, Nuclear Training

TMI - Alert (TMIA)

Board of Supervisors, Peach Bottom Township

R. Fletcher, Department of Environment, Radiological Health Program

J. Johnsrud, National Energy Committee, Sierra Club

Public Service Commission of Maryland, Engineering Division

J. Bradley Fewell, Assistant General Counsel, Exelon Nuclear

Commonwealth of Pennsylvania

State of Maryland
Mr. C. M. Crane 4

DISTRIBUTION:

ADAMS (PARS)

SECY

CA

OEMAIL

OEWEB

WTravers, EDO

SCollins, DEDR

FCongel, OE

DDambly, OGC

LChandler, OGC

JDyer, NRR

BBorchardt, NRR

JJolicoeur, OEDO

BRogers, NRR

MCheok, RES

Enforcement Coordinators RII, RIII, RIV

SGagner, OPA

HBell, OIG

GCaputo, OI

LTremper, OC 

JClifford, NRR

GWunder, PM, NRR

SWall, PM, NRR (Backup)

HMiller, RA/JWiggins, DRA (1) 

MShanbaky, DRP, RI

DFlorek, DRP, RI

CSmith, DRP, Senior Resident Inspector

DSchroeder, DRP, Resident Inspector

Region I Docket Room (with concurrences)

NPerry, DRP

RCrlenjak, DRS

DScrenci/NSheehan, PAO-RI

KFarrar, RI

DHolody, RI

RUrban, RI

BWelling, RI

CBixler, RI

Region I OE Files (with concurrences)

DOCUMENT NAME: C:\ORPCheckout\FileNET\ML040340185.wpd

After declaring this document “An Official Agency Record” it will be released to the Public.

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 RI/ORA RI/ORA RI/DRP RI/DRP RI/DRS

NAME R Urban RJU DHolody DJH MShanbaky MMS RBlough ARB WLanning RJC for

DATE 01/15/04 01/22/04 01/15/04 01/16/04 01/15 /04

OFFICE RI/ORA RA/RI HQ/OE HQ/NRR/DIPM

NAME Kfarrar KLF HMiller JTW for FCongel JGL for * BBoger BB *

DATE 01/21/04 01/23/04 01/29/04 01/28/04

*per e-mail OFFICIAL RECORD COPY
NOTICE OF VIOLATION

Exelon Generation Company, LLC Docket Nos. 50-277; 50-278

Peach Bottom Units 2 and 3 License Nos. DPR-44; DPR-56

EA-03-224

During an NRC inspection conducted between September 24, 2003 - November 18, 2003, two

violations of NRC requirements were identified. In accordance with the "General Statement of

Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the violations are listed

below: 

A. Technical Specification 5.4.1 states, in part, that written procedures shall be established,

implemented, and maintained covering the applicable procedures recommended in

Regulatory Guide 1.33, Appendix A, November 1972. Regulatory Guide 1.33 lists

procedures for performing maintenance that can affect the performance of safety

related equipment. 

Contrary to the above, between July 1992 and September 2003, Exelon did not maintain

maintenance procedure M-052-011, “Standby Diesel Generator Cylinder Liner

Replacement,” Revision 1, dated March 24, 1992, because it did not incorporate

adequate guidance to ensure proper sealing of adaptor gaskets. Specifically, the

procedure did not include directions to inspect the adapter gaskets prior to installation to

ensure that a required annealing process did not cause gasket damage or irregularities. 

Prior notice of this issue was specified in Fairbanks Morse Service Information Letter 

A-15 dated June 22, 1987. 

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

measures be established to assure that conditions adverse to quality, such as

malfunctions and deficiencies, are promptly identified and corrected. 

Contrary to the above, when low, swinging jacket water pressure indications were

identified in March and April 2003, actions taken to correct the condition were

inadequate. Although Exelon initiated a maintenance action request for the observed

conditions, the action request was closed without performing several troubleshooting

steps that could have identified the problem, such as checks of air or combustion gas inleakage and engine compression. These troubleshooting steps were specified in the

Fairbanks Morse vendor manual. 

These violations are associated with a WHITE significance determination process

finding for Unit 2 and a GREEN significance determination process finding for Unit 3.

The NRC has concluded that information regarding the reason for the violations, the corrective

actions taken and planned to correct the violations and prevent recurrence, and the date when

full compliance was achieved are already adequately addressed on the docket in NRC

Inspection Report 50-277/03-13; 50-278/03-13 dated December 18, 2003. However, you are

required to submit a written statement or explanation pursuant to 10 CFR 2.201 if the

description therein does not accurately reflect your corrective actions or your position. In that

case, or if you choose to respond, clearly mark your response as a "Reply to a Notice of

Violation; EA-03-224," and send it to the U.S. Nuclear Regulatory Commission, ATTN: 

Document Control Desk, Washington, DC 20555, with a copy to the Regional Administrator,

Region I, 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.
Notice of Violation 2

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, U.S. Nuclear Regulatory

Commission, Washington, DC 20555-0001. 

If you choose to respond, your 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. Therefore, 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.

In accordance with 10 CFR 19.11, you may be required to post this Notice within 2 working

days. 

Dated this 3rd day of February 2004.