July 16, 2015

MEMORANDUM TO: Marissa G. Bailey, Director

Division of Fuel Cycle Safety, Safeguards,

 and Environmental Review

Office of Nuclear Material Safety 

 and Safeguards

FROM: Soly I. Soto-Lugo, Project Manager /MGuardiola for RA/

Fuel Manufacturing Branch

Division of Fuel Cycle Safety, Safeguards,

 and Environmental Review

Office of Nuclear Material Safety 

 and Safeguards

SUBJECT: SUMMARY OF JUNE 11, 2015, MEETING WITH THE INDUSTRY 

AND STAKEHOLDERS TO DISCUSS FUEL CYCLE REGULATORY 

ACTIVITIES AND CUMULATIVE EFFECTS OF REGULATION

The staff of the U.S. Nuclear Regulatory Commission (NRC) met with representatives of the

Nuclear Energy Institute (NEI), fuel cycle industry, and members of the public on June 11, 2015, 

in Rockville, Maryland. The purpose of the Category 2 public meeting was to discuss several 

topics of mutual interest, including the Revised Fuel Cycle Oversight Process, Part 26

Rulemaking on the U.S. Department of Health and Human Services (HHS) guidelines, the

agency’s plans to conduct a cyber security rulemaking, and Cumulative Effects of Regulation. 

The meeting announcement is available in the Agencywide Documents Access and 

Management System (ADAMS) under the accession number ML15159A550.

Revised Fuel Cycle Oversight Process 

The presentation on the Revised Fuel Cycle Oversight Process (RFCOP) discussed the NRC’s 

vision overall of the RFCOP and the activities associated with it, including a proposed definition 

of a performance deficiency. Industry commented that the definition should only involve 

violations and stated that the term “written commitments” seemed to expand the scope to 

include deficiencies that were not associated with violations. Both the staff and industry agreed 

that more work needs to be completed before an acceptable definition of a performance 

deficiency is reached. The staff reviewed the current status of the cornerstones, key safety and 

security attributes, and associated inspectable areas.

CONTACT: Soly I. Soto-Lugo, NMSS/FCSE

 (301) 415-7528
M. Bailey 2

Several industry representatives provided detailed comments on how to improve some of the 

language and overall structure. In addition, the NRC staff reiterated that an adequate corrective 

action program (CAP) is a prerequisite for participation in RFCOP and several industry 

representatives asserted that they do not plan on submitting a license amendment to commit 

their CAP to Regulatory Guide (RG) 3.75, “Corrective Action Programs for Fuel Cycle Facilities,” 

or another acceptable standard. Both industry and the staff agreed that developing 

performance indicators was not a feasible effort and that inspection is sufficient to cover the key 

safety and security attributes under each cornerstone. The staff and industry also discussed the 

possibility of taking another look at the resources allocated to the core inspection program and 

several approaches to include cross-cutting areas in a revised performance assessment 

process.

10 CFR Part 26 HHS Guidelines Rulemaking

The Office of Nuclear Security and Incident Response staff discussed the rulemaking initiative 

to better align Title 10 of the Code of Federal Regulations (10 CFR) Part 26 drug testing 

provisions with those described in HHS’ Mandatory Guidelines for Federal Workplace Drug 

Testing. The staff presented the history of this rulemaking and the incorporation of lessons 

learned from rule implementation that support and justify this staff-proposed rulemaking. The 

staff then outlined the technical provisions that would be changed, the safety and security 

outcomes that should result from the proposed amendments and the estimated costs on all 

affected entities, with a particular emphasis on the low costs associated with proposed rule 

implementation at the Category I fuel cycle facilities. After this presentation, the staff then 

provided its views on a future staff-proposed rulemaking (i.e., the Part 26 “Technical Issues” 

rulemaking, a designated high priority rule). This was presented to inform the affected external 

stakeholders that societal changes in substance abuse will continue to occur and challenge the 

effectiveness of the Part 26 rule; however, under the technical issues rulemaking the staff will 

work, in part, to establish a regulatory framework that better addresses societal changes in drug 

use and improve upon the flexibility afforded in Part 26 to help reduce the occurrence of future 

drug-related rulemakings.

Cyber Security Rulemaking

The staff discussed the agency’s plans to conduct a cyber security rulemaking for fuel cycle 

facilities. The presentation addressed the following topics: a summary of the Commission’s 

direction in SRM-SECY-14-0-147, “Cyber Security for Fuel Cycle Facilities” dated March 24, 

2015; projected timeline for the rulemaking; an overview of the proposed technical approach;

and a request for feedback on licensee’s voluntary cyber security efforts.

The timeline for the rulemaking will consist of 3 three parts: (1) develop the regulatory basis 

[April – December 2015]; (2) develop the proposed rule and guidance [January – December 

2016]; and (3) develop the final rule and guidance [January – December 2017]. Currently, 

public meetings are scheduled to occur in July, September, and December 2015. NEI 

expressed interest in conducting additional public meetings as needed including in the spring of 

2016, which the NRC supports.

The technical approach proposed by the NRC would apply a graded set of requirements to the 

safety, security (physical and information), emergency preparedness, and material control and 

accounting based on the category/type of the facility. The application of controls will vary by the 
M. Bailey 3

type of facility and type of control, (e.g., material control and accounting may not apply to all 

categories of facilities). The guidance will provide a mechanism to screen out systems or digital 

assets that would not require any controls to be applied. Industry indicated that they would like 

to see NRC’s regulatory approach be risk-informed, consequence-based, and focused on digital 

assets directly associated with protecting health, safety, and security with clearly identified 

consequences of concern. The NRC plans to use the existing cyber security reactor 

requirements in 10 CFR 73.54 as a starting point and information drawn from the draft cyber 

security order proposed in SECY-14-0147. The SRM directs the NRC to remain informed about 

the licensee’s voluntary efforts. NEI previously described industry’s voluntary efforts in its 

July 3, 2013, letter, “Industry Comments on Draft Fuel Cycle Cyber Security Order, 

Requirements and Guidance,” which include the following program elements: (1) a cyber 

security assessment team; (2) cyber training; (3) control of portable media; and (4) cyber 

security incident response. At this time, NEI does not plan to issue guidance associated with 

this effort. Industry indicated that each licensee is implementing a significant, voluntary cyber 

security program that uses the four program elements identified in the NEI letter as guidelines.

The NRC noted that multiple threat vectors must be evaluated, beyond portable media. Industry 

expressed concern that the NRC was seeking to expand the Integrated Safety Analysis (ISA) to 

address malevolent acts and insider threats. The NRC stated the cyber security rule would not 

change any aspect of the ISA requirements in 10 CFR Part 70, Subpart H. Although the cyber 

security program could be informed by the ISA, the program would be independent of the ISA 

(i.e., would not be used to demonstrate compliance with the performance requirements).

This was the first public meeting to discuss the Commission’s directed cyber security 

rulemaking. As part of the development of the regulatory basis, the NRC plans to conduct 

several site visits to observe current cyber security programs in place at licensee facilities. The 

detailed proposals for rule language and guidance are in their early stages of development. The 

NRC will hold additional public meetings. The NRC recommended to industry that they send 

representatives who are knowledgeable in their security and information technology programs. 

The NRC will continue to seek stakeholder input to develop a regulatory framework that uses a 

graded, consequence-based approach in an efficient and effective regulatory structure for fuel 

cycle facilities.

Cumulative Effects of Regulation

The NRC provided updates to the various rulemaking and regulatory activities involving the fuel 

cycle industry. The NRC staff communicated that 10 CFR Part 40 rulemaking activities and 

chemical security and RG 3.55 (non-rulemaking activities) were removed from the integrated 

schedule. For 10 CFR Part 40 rulemaking, the Commission approved the staff’s request to 

terminate it on April 27, 2015. Per SRM-14-0112 issued on April 16, 2015, the Commission 

disapproved the staff recommendation for chemical security and directed the staff to monitor 

changes in the Department of Homeland Security Chemical Facility Anti-Terrorism Standards 

(DHS CFATS) listing of chemicals of interest and should identify a mechanism to inform relevant 

licensees of changes to the DHS CFATS list of chemicals of interest. With regard to the update 

of RG 3.55, “Standard Format and Content for License Applications for Uranium Hexafluoride 

Source Material Facilities,” the NRC staff determined to remove this activity from the integrated 

schedule because this it will only apply to one specific type of facility rather than all fuel cycle 

facilities.
M. Bailey 4

As part of ongoing discussions related to CER, staff and industry discussed certain aspects of 

the Part 21 rulemaking. Industry sought further clarification related to the proposed definition of 

a basic component and potential guidance for commercial grade dedication for fuel cycle 

facilities. In order to provide insights into the proposed definition of a basic component, staff 

explained: (1) the relationship between substantial safety hazards and the risk associated with 

worker and public consequences under Subpart H of 10 CFR Part 70; (2) regulatory 

infrastructure and precedent related to substantial safety hazards, including excerpts from 

NUREG-0302, Revision 1, “Remarks Presented (Questions/Answers Discussed) at Public 

Regional Meetings to Discuss Regulations (10 CFR Part 21) for Reporting of Defects and 

Noncompliance”; and (3) the concept of how deviations in basic components can be defects 

without actual consequences because Part 21 refers to conditions that “could” create a 

substantial safety hazard. The staff discussed proposed guidance related to commercial grade 

dedication for fuel cycle facilities and how it would potentially describe implementation of a 

management measures program as fulfilling the intent of the dedication process. Industry 

reiterated its concerns with the rulemaking and emphasized that they did not believe there was 

sufficient need for the rulemaking in order to maintain safety at fuel cycle facilities.

The NRC staff discussion also addressed development of guidance documents. The NRC staff 

stated that Revision 2 to NUREG-1520 was made publicly available in June 2015. Industry 

noted that consolidation efforts for material control and accounting RG might be impacted by the 

10 CFR Part 74 rulemaking. The NRC staff clarified that the rulemaking will not impact the 

consolidation effort because the guidance provided in these RG is not tied to the rulemaking.

The NRC staff also committed to review the information on the integrated schedule 

and supplement, and to post these documents on the public website available at 

http://www.nrc.gov/materials/fuelcycle-fac/regs-guides-comm.html#cumeffects. The slides 

for the meeting presentation are included in Enclosure 1 and the attendees list is available in 

Enclosure 2. Enclosure 3 is the fuel cycle integrated schedule, and Enclosure 4 is the 

supplement to that schedule. No regulatory decisions or commitments were made during the 

meeting.

Enclosures:

1. Slide Presentations (ML15174A118)

2. Attendance List (ML15174A120)

3. Fuel Cycle Integrated Schedule (ML15174A125)

4. Supplement to the Fuel Cycle Integrated Schedule (ML15174A129)

cc w/enclosures: Janet Schlueter
M. Bailey 4

As part of ongoing discussions related to CER, staff and industry discussed certain aspects of 

the Part 21 rulemaking. Industry sought further clarification related to the proposed definition of 

a basic component and potential guidance for commercial grade dedication for fuel cycle 

facilities. In order to provide insights into the proposed definition of a basic component, staff 

explained: (1) the relationship between substantial safety hazards and the risk associated with 

worker and public consequences under Subpart H of 10 CFR Part 70; (2) regulatory 

infrastructure and precedent related to substantial safety hazards, including excerpts from 

NUREG-0302, Revision 1, “Remarks Presented (Questions/Answers Discussed) at Public 

Regional Meetings to Discuss Regulations (10 CFR Part 21) for Reporting of Defects and 

Noncompliance”; and (3) the concept of how deviations in basic components can be defects 

without actual consequences because Part 21 refers to conditions that “could” create a 

substantial safety hazard. The staff discussed proposed guidance related to commercial grade 

dedication for fuel cycle facilities and how it would potentially describe implementation of a 

management measures program as fulfilling the intent of the dedication process. Industry 

reiterated its concerns with the rulemaking and emphasized that they did not believe there was 

sufficient need for the rulemaking in order to maintain safety at fuel cycle facilities.

The NRC staff discussion also addressed development of guidance documents. The NRC staff 

stated that Revision 2 to NUREG-1520 was made publicly available in June 2015. Industry 

noted that consolidation efforts for material control and accounting RG might be impacted by the 

10 CFR Part 74 rulemaking. The NRC staff clarified that the rulemaking will not impact the 

consolidation effort because the guidance provided in these RG is not tied to the rulemaking.

The NRC staff also committed to review the information on the integrated schedule 

and supplement, and to post these documents on the public website available at 

http://www.nrc.gov/materials/fuelcycle-fac/regs-guides-comm.html#cumeffects. The slides 

for the meeting presentation are included in Enclosure 1 and the attendees list is available in 

Enclosure 2. Enclosure 3 is the fuel cycle integrated schedule, and Enclosure 4 is the 

supplement to that schedule. No regulatory decisions or commitments were made during the 

meeting.

Enclosures:

1. Slide Presentations (ML15174A118)

2. Attendance List (ML15174A120)

3. Fuel Cycle Integrated Schedule (ML15174A125)

4. Supplement to the Fuel Cycle Integrated Schedule (ML15174A129)

cc w/enclosures: Janet Schlueter

DISTRIBUTION:

FCSE r/f

ADAMS Accession No.: ML15174A117 Package No.: ML15174A130

OFFICE FCSE/FMB FCSE/FMB FCSE/FMB FCSE/FMB

NAME SSoto DMiller for 

TBrockington

RJohnson MGuardiola for

SSoto

DATE 6/24/2015 7/15/2015 7/16/2015 7/16/15

OFFICIAL USE ONLY