Draft Regulatory Analysis for Proposed Rule: 

Approval of American Society of Mechanical 

Engineers Code Cases 

(NRC-2012-0059); RIN 3150-AJ13 

U.S. Nuclear Regulatory Commission 

Office of Nuclear Reactor Regulation 

January 5, 2016 

U.S. Nuclear Regulatory Commission 

Office of Nuclear Reactor Regulation 

ADAMS Accession No. ML15041A816 
ii 

Table of Contents 

List of Figures ......................................................................................................................................... iv

List of Tables ........................................................................................................................................... v

Abbreviations and Acronyms ................................................................................................................. vi

Abstract ................................................................................................................................................ viii

Executive Summary ............................................................................................................................... ix

1. Introduction ................................................................................................................................. 11

2. Statement of the Problem and Objective ................................................................................... 11

2.1. Background ....................................................................................................................... 11

2.2. Objective ........................................................................................................................... 13

2.3. Statement of the Problem ................................................................................................. 13

3. Identification and Analysis of the Alternative Approaches ......................................................... 14

3.1. Alternative 1 – No-action alternative ................................................................................ 14

3.2. Alternative 2 – Incorporate by Reference NRC-Approved ASME BPV and OM Code 

Cases ................................................................................................................................ 15

4. Evaluation of Benefits and Costs ............................................................................................... 16

4.1. Identification of Affected Attributes ................................................................................... 16

4.2. Analytical Methodology ..................................................................................................... 19

4.2.1. Regulatory Baseline ......................................................................................................... 19

4.2.2. Discount Rates ................................................................................................................. 19

4.2.3. Cost/Benefit Inflators ........................................................................................................ 20

4.2.4. Labor Rates ...................................................................................................................... 21

4.2.5. Affected Entities ................................................................................................................ 21

4.2.6. Sign Conventions ............................................................................................................. 22

4.2.7. Code Case Horizon .......................................................................................................... 23

4.2.8. Dollar per Person-Rem Conversion Factor ...................................................................... 23

4.2.9. Replacement Power Cost ................................................................................................. 23

4.2.10. Base Year ......................................................................................................................... 24

4.2.11. Cost Estimation ................................................................................................................ 24

4.2.12. Conditioned Code Cases .................................................................................................. 26

5. Presentation of Results .............................................................................................................. 30

5.1. Public Health (Accident) ................................................................................................... 30

5.2. Occupational Health (Accident) ........................................................................................ 31

5.3. Occupational Health (Routine) ......................................................................................... 31

5.4. Onsite Property — Power Replacement .......................................................................... 32

5.5. Industry Implementation ................................................................................................... 33

5.6. Industry Operation ............................................................................................................ 33

5.6.1. Averted Costs from Code Case Alternative Request Submittals ..................................... 34

5.6.2. Conditioned Code Cases Costs ....................................................................................... 36

5.6.3. Total Industry Operations Costs ....................................................................................... 39

5.7. NRC Implementation ........................................................................................................ 39

5.8. NRC Operation ................................................................................................................. 40

5.8.1. NRC Operation Averted Cost Sensitivity .......................................................................... 41

5.9. Improvements in Knowledge ............................................................................................ 41

5.10. Regulatory Efficiency ........................................................................................................ 41

5.11. Disaggregation ................................................................................................................. 42

5.12. Uncertainty Analysis ......................................................................................................... 42
iii 

5.12.1. Uncertainty Analysis Results ............................................................................................ 43

5.12.2. Summary of Uncertainty Analysis..................................................................................... 49

5.13. Independent Cost Estimate .............................................................................................. 50

5.14. Summary .......................................................................................................................... 51

5.14.1. Quantified Net Benefit ...................................................................................................... 51

5.14.2. Nonquantified Benefits ..................................................................................................... 52

5.14.3. Nonquantified Costs ......................................................................................................... 53

5.15. Safety Goal Evaluation ..................................................................................................... 53

6. Decision Rationale ..................................................................................................................... 53

7. Implementation Schedule ........................................................................................................... 55

8. Regulatory Guides ...................................................................................................................... 55

9. References ................................................................................................................................. 56

Appendix A: Industry Labor Rates ...................................................................................................... 59

Appendix B: Uncertainty Analysis Variables ....................................................................................... 61
iv 

List of Figures 

Figure 1 Industry Implementation Costs .................................................................................. 44

Figure 2 NRC Implementation Costs ....................................................................................... 44

Figure 3 Industry Operations Costs (7% Discount Rate) ......................................................... 45

Figure 4 Industry Operations Averted Costs (3% Discount Rate) ........................................... 45

Figure 5 NRC Operations Averted Costs (7% Discount Rate) ................................................ 46

Figure 6 NRC Operations Costs Averted (3% Discount Rate) ................................................ 46

Figure 7 Total (7% Discount Rate) .......................................................................................... 47

Figure 8 Total (3% Discount Rate) .......................................................................................... 47

Figure 9 Net Benefit (Cost) Tornado Diagram based on 7-percent Discount Rate – Inputs 

Ranked by Effect on Output Mean ............................................................................ 49

Figure 10 Net Benefit (Cost) Tornado Diagram based on 3-percent Discount Rate – Inputs 

Ranked by Effect on Output Mean ............................................................................ 49
v 

List of Tables 

Table 1 Consumer Price Index—All Urban Consumers, U.S. City Average .......................... 20

Table 2 Dollar per Person-Rem Conversion Factor ............................................................... 23

Table 3 Average Wholesale Electricity Price with a Nuclear Power Plant Outage ................. 24

Table 4 Estimated Replacement Power Hourly Costs for a Typical BWR ............................. 24

Table 5 List of Conditioned Code Cases ................................................................................ 26

Table 6 Occupational Health Impacts .................................................................................... 31

Table 7 Code Case 795-1 Short-Term Replacement Power Costs ....................................... 32

Table 8 Industry Implementation Costs .................................................................................. 33

Table 9 Averted Industry Operation Costs ............................................................................. 35

Table 10 Averted Industry Operation Costs for Hypothetical Reactor Code Case Alternative 

Request Submittal ..................................................................................................... 35

Table 11 Incremental Industry Operations Costs for Conditioned Code Case N-638-6 

(Operating Reactors only) ......................................................................................... 36

Table 12 Incremental Industry Operations Costs for Conditioned Code Case N-789 

(Operating Reactors only) ......................................................................................... 37

Table 13 Incremental Operations Costs for Conditioned Code Case N-795 

(Operating BWRs) ..................................................................................................... 37

Table 14 Incremental Operations Costs for Conditioned Code Case N-799 for a Hypothetical 

New Reactor .............................................................................................................. 37

Table 15 Incremental Industry Costs for Conditioned Code Case OMN-19 for New Reactors 38

Table 16 Industry Cost Summary ............................................................................................. 39

Table 17 NRC Implementation Costs ....................................................................................... 40

Table 18 NRC Operation Costs ................................................................................................ 40

Table 19 Averted NRC Operation Costs for New Reactor ASME Code Case Alternative 

Request Submittal ..................................................................................................... 41

Table 20 Disaggregation .......................................................................................................... 42

Table 21 Uncertainty Results Descriptive Statistics ................................................................. 48

Table 22 Regulatory Analysis Estimate Changes .................................................................... 51

Table 23 Total Net Benefits and Costs ..................................................................................... 52

Table 24 Summary of Totals .................................................................................................... 53

 
vi 

Abbreviations and Acronyms 

ADAMS agencywide documents access and management system 

APA Administrative Procedures Act 

ASME American Society of Mechanical Engineers 

BLS U.S. Department of Labor Bureau of Labor Statistics 

BPV Boiler and Pressure Vessel 

BWR boiling-water reactor 

CC concrete containment 

CFR Code of Federal Regulations 

CNWRA Center for Nuclear Waste Regulatory Analyses 

COL combined license 

CP construction permit 

CPI-U Consumer Price Index for all urban consumers 

DG draft regulatory guide 

FR Federal Register 

GAO General Accountability Office 

IAEA International Atomic Energy Agency 

ICE independent cost estimate 

ISI inservice inspection 

IST inservice testing 

LOE level of effort 

MC metal containment 

NDT nil ductility temperature 

NPV net present value 

NRC U.S. Nuclear Regulatory Commission 

NTTAA National Technology Transfer and Advancement Act 

OFR Office of the Federal Register 

OL operating license 

OM operation and maintenance 

OM Code Code for Operation and Maintenance of Nuclear Power Plants 

OMB U.S. Office of Management and Budget 

PERT program evaluation and review technique 
vii 

PPA power purchase agreements 

PWR pressurized-water reactor 

Rev. revision 

RG final regulatory guide 

SI international system of units 

U.S.C. United States Code 
viii 

Abstract 

This proposed rule would incorporate by reference into the U.S. Nuclear Regulatory 

Commission’s (NRC’s) regulations at 10 CFR 50.55a the latest revisions of the NRC Regulatory 

Guides (RGs) listing American Society of Mechanical Engineers (ASME) Boiler and Pressure 

Vessel (BPV) and Operations and Maintenance (OM) Code Cases that the NRC find to be 

acceptable, or acceptable with NRC-specified conditions (“conditionally acceptable”). The NRC 

is revising RGs to identify the Code Cases that are newly approved by the NRC. Regulatory 

Guide 1.84, Revision 37 (Draft Regulatory Guide (DG)-1295), would supersede the 

incorporation by reference of Revision 36; RG 1.147, Revision 18 (DG-1296), would supersede 

the incorporation by reference of Revision 17; and RG 1.192, Revision 2 (DG-1297), would 

supersede the incorporation by reference of Revision 1. 

The ASME Code Cases that are the subject of this rulemaking are the new and revised 

Section III and Section XI Code Cases listed in Supplement 11 to the 2007 BPV Code through 

Supplement 10 to the 2010 BPV Code, and the OM Code Cases published with the 

2009 Edition through the 2012 Edition. This document presents a draft regulatory analysis of 

the proposed incorporation by reference rule for the three RGs listing the Code Cases newly 

approved by the NRC. 

To improve the credibility of the NRC staff cost estimates for this regulatory action, the NRC 

staff cross-checked its results with an independent cost estimate and conducted sensitivity 

analysis to identify variables most affecting cost estimates (i.e. cost drivers). 

 
ix 

Executive Summary 

The U.S. Nuclear Regulatory Commission (NRC) is proposing to amend its regulations to 

incorporate by reference the latest revisions of three NRC Regulatory Guides (RGs) approving 

new and revised Code Cases published by the American Society for Mechanical Engineers 

(ASME). The NRC is revising RGs to identify the Code Cases that are newly approved by the 

NRC. The three regulatory guides that would be incorporated by reference are RG 1.84, 

“Design, Fabrication, and Materials Code Case Acceptability, ASME Section III,” Revision 37 

(DG-1295 for this proposed rule); RG 1.147, “Inservice Inspection Code Case Acceptability, 

ASME Section XI, Division 1,” Revision 18 (DG-1296); and RG 1.192, “Operation and 

Maintenance [OM] Code Case Acceptability, ASME OM Code,” Revision 2 (DG-1297). 

The proposed action would allow nuclear power plant licensees and applicants for construction 

permits (CPs), operating licenses (OLs), combined licenses (COLs), standard design 

certifications, standard design approvals, and manufacturing licenses, to use the Code Cases 

newly listed in these RGs as alternatives to engineering standards for the construction, inservice 

inspection (ISI), and inservice testing (IST) of nuclear power plant components. 

The analysis presented in this document examines the benefits and costs of the proposed 

rulemaking and implementing guidance relative to the baseline case (i.e., the no action 

alternative). 

The key findings are as follows: 

• Proposed Rule Analysis. The NRC staff-recommended proposed rule and 

implementation guidance would result in a cost-justified change based on the net 

averted cost to the industry that ranges from $3.35 million using a 7-percent discount 

rate to $3.98 million using a 3-percent discount rate. Relative to the regulatory baseline, 

the NRC would realize a net averted cost of $2.15 million using a 7-percent discount rate 

or $2.54 million using a 3-percent discount rate. 

According to Executive Order 12866, Regulatory Planning and Overview, (58 FR 190), 

an economically significant regulatory action is one that would have an annual effect on 

the economy of $100 million or more. From a cost perspective, this proposed 

rulemaking does not reach this threshold. 

• Non-quantified Benefits. Other beneficial factors include meeting the NRC goal of 

ensuring the protection of public health and safety and the environment through the 

NRC’s approval of new ASME Code Cases, which allow the use of the most current 

methods and technology. In addition, the staff-recommended alternative would help 

ensure that the NRC’s actions are effective, efficient, realistic, and timely by eliminating 

the need for unnecessary NRC review of plant-specific alternative requests. This 

alternative also would support the NRC’s goal of maintaining an open regulatory process 

because approving ASME Code Cases demonstrates the NRC’s commitment to 
x 

participate in the National Consensus Standards process per the National Technology 

Transfer and Advancement Act (NTTAA) of 1995. Other important characteristics the 

NRC staff analyzed are the industry’s familiarity with the well-established process of 

approving Code Cases through NRC regulatory guides, the value of a Code Case 

approval process is that the Code Cases are consistently applied across the industry, 

and the value of continuing to support the use of the most updated and technically sound 

techniques developed by the ASME. Considering both the quantitative information and 

the non-quantitative information, the rulemaking is justified. 

• Decision Rationale. Relative to the no action baseline, the NRC staff concludes that the 

quantitative benefits justify the quantitative costs of this proposed rule. 
11 

1. Introduction 

This document presents the draft regulatory analysis for the ASME Code Cases proposed rule 

(the NRC’s Agencywide Documents Access and Management System (ADAMS) Accession 

No. ML15041A813) and the three associated NRC draft regulatory guides: 

• DG-1295, “Design, Fabrication, and Materials Code Case Acceptability, ASME 

Section III,” (ADAMS Accession No. ML15027A002); 

• DG-1296, “Inservice Inspection Code Case Acceptability, ASME Section XI, Division 1,” 

(ADAMS Accession No. ML15027A202); and 

• DG-1297, “Operation and Maintenance Code Acceptability, ASME OM Code,” (ADAMS 

Accession No. ML15027A330). 

The recommended regulatory action incorporates by reference the latest revisions of the three 

regulatory guides listed above so that the NRC approves as alternatives for use to the ASME 

Code Editions and Addenda, the newly-identified ASME Code Cases. 

2. Statement of the Problem and Objective 

2.1. Background 

General Design Criterion 1, “Quality Standards and Records,” of Appendix A, “General Design 

Criteria for Nuclear Power Plants,” to 10 CFR Part 50 requires, in part, states that: 

Structures, systems, and components important to safety shall be designed, 

fabricated, erected, and tested to quality standards commensurate with the 

importance of the safety function to be performed. Where generally recognized 

codes and standards are used, they shall be identified and evaluated to 

determine their applicability, adequacy, and sufficiency and shall be 

supplemented or modified as necessary to ensure a quality product in keeping 

with the required safety function. 

The National Technology Transfer and Advancement Act of 1995, Pub. L. 104-113 mandates 

that, where the Federal agency determines that government regulation is required, that the NRC 

use an available voluntary consensus standard to carry out the Federal agency’s objective, 

unless it is inconsistent with law or otherwise impractical. In carrying out this legislation, Federal 

agencies are to consult with voluntary consensus standards bodies and participate with such 

bodies in the development of technical standards when such participation is in the public 

interest and compatible with the agency mission, priorities, and budget resources. 
12 

Provisions of the ASME BPV Code have been used since 1971 as one part of the regulatory 

framework to establish the necessary design, fabrication, construction, testing, and performance 

requirements for structures, systems, and components important to safety. Various technical 

interests (e.g., utility, manufacturing, insurance, regulatory) are represented on the ASME 

standards committees that develop, among other things, improved methods for the construction 

and inservice inspection of ASME Class 1, 2, 3, metal containment (MC), and concrete 

containment (CC) nuclear power plant components. This broad spectrum of stakeholder 

participation helps to ensure that various interests are considered. 

In 1990, the ASME published the initial edition of the OM Code that provides rules IST of pumps 

and valves. The ASME Committee on Operation and Maintenance of Nuclear Power Plants 

developed and maintains the OM Code. The ASME Board on Nuclear Codes and Standards 

directive transferred responsibility for development and maintenance of rules for the IST of 

pumps and valves from the ASME Section XI Subcommittee on Nuclear Inservice Inspection to 

the ASME OM Code Committee and lead for the development of the OM Code. 

Section 50.55a of the NRC regulations requires that nuclear power plant owners construct 

Class 1, Class 2, and Class 3 components in accordance with Section III, Division 1, of the 

ASME BPV Code. Section 50.55a also requires that owners perform ISI of Class 1, Class 2, 

Class 3, Class MC, and Class CC components in accordance with Section XI, Division 1, of the 

BPV Code, and that they perform IST of Class 1, Class 2, and Class 3 safety-related pumps 

and valves in accordance with the OM Code. The ASME also publishes Code Cases on a 

quarterly basis (Sections III and XI) or every two years (OM Code) to provide alternatives to 

existing Code requirements developed and approved by ASME. The ASME Code Cases are 

developed to gain experience with new technology before incorporation into the ASME Code, 

permit licensees to use advancements in ISI and IST; provide alternative examinations for older 

plants, provide an expeditious response to user needs, and provide a limited, clearly focused 

alternative to specific ASME Code provisions. 

The NRC prepared DG-1295, “Design and Fabrication Code Case Acceptability, ASME 

Section III” (draft RG 1.84), DG-1296, “Inservice Inspection Code Case Acceptability, ASME 

Section XI, Division 1” (draft RG 1.147), and DG-1297, “Operation and Maintenance Code 

Acceptability, ASME OM Code” (draft RG 1.192). In these draft regulatory guides, the NRC 

identifies those ASME Code Cases that were determined to be acceptable alternatives to 

applicable parts of Section III, Section XI, and the OM Code. The ASME Code Cases that were 

revised are listed in Supplement 11 to the 2007 BPV Code through Supplement 10 to the 

2010 BPV Code, and the OM Code Cases published with the 2009 Edition through the 

2012 Edition. 

The NRC’s practice is to review ASME BPV and OM Code Cases, determine their acceptability, 

and specify the NRC’s findings in the above stated regulatory guides. The NRC has permitted 

nuclear power plant licensees to adopt the NRC-approved Code Cases listed in these RGs as 

alternatives to the requirements in the ASME BPV Code and the OM Code, which the NRC has 

incorporated by reference into the NRC’s regulations at 10 CFR 50.55a and either mandated or 
13 

approved for use. Because the practice of generally referencing the RGs may not fully satisfy 

the notice and comment provisions of the Administrative Procedure Act of 1946 (APA) 

(5 U.S.C. 551 et seq.), as amended, the NRC determined that it is necessary to include these 

Code Cases in the NRC’s regulations through the incorporation by reference process. 

Incorporating by reference into the NRC’s regulations the latest revisions of the three regulatory 

guides identifying NRC-approved Code Cases provides these Code Cases the same legal 

status and the same notice and comment provisions as the ASME BPV Code and the OM Code 

requirements that are incorporated by reference in 10 CFR 50.55a. 

2.2. Objective 

The objective of this regulatory action is to incorporate by reference the latest revisions of three 

draft regulatory guides that list Code Cases, published by the ASME and approved by the NRC. 

These are RG 1.84, “Design, Fabrication, and Materials Code Case Acceptability, ASME 

Section III,” Revision 37; RG 1.147, “Inservice Inspection Code Case Acceptability, ASME 

Section XI, Division 1,” Revision 18; and RG 1.192, “Operation and Maintenance Code Case 

Acceptability, ASME OM Code,” Revision 2. These revisions supersede the incorporation by 

reference of RG 1.84, Revision 36; RG 1.147, Revision 17; and RG 1.192, Revision 1. This 

regulatory action improves the effectiveness of future licensing actions, is consistent with the 

provisions of the NTTAA, which encourages Federal regulatory agencies to consider adopting 

voluntary consensus standards as an alternative to de novo agency development of standards 

affecting an industry, and is consistent with the NRC policy of evaluating the latest versions of 

consensus standards already approved by the NRC in terms of their suitability for endorsement 

by regulation or regulatory guide. 

2.3. Statement of the Problem 

The endorsement of a Code Case in these regulatory guides constitutes acceptance of their 

technical positions for applications not precluded by regulatory or other requirements or by the 

recommendations in this or other regulatory guides. With regard to the use of any Code Case, it 

is the responsibility of the licensee to make certain that use of the Code Case does not conflict 

with regulatory requirements (e.g., plant technical specifications) or licensee commitments. The 

Code Cases listed in the regulatory guides are acceptable for use within the limits specified in 

the Code Case, if they are used with any identified limitations or modifications. 

The ASME may revise Code Cases for many reasons, such as incorporating operational 

examination and testing experience or to update material requirements based on research 

results. On occasion, an inaccuracy in an equation is discovered or an examination as 

practiced is found not to be adequate to detect a newly discovered degradation mechanism. 

Therefore, it follows that when a licensee initially implements a Code Case, 10 CFR 50.55a 

requires that the licensee implement the most recent version of that Code Case as listed in the 

approved or conditionally approved tables in 10 CFR 50.55a. An alternative could be submitted 

and approved through alternative requests, under 10 CFR 50.55a(z), where a licensee could 

apply to use a previous Code Case and the NRC would evaluate on a case-by-case basis. 
14 

Section III applies only to new construction (i.e., the edition and addenda to be used in the 

construction of a plant are selected based upon the date of the construction permit and are not 

changed thereafter, except voluntarily by the licensee). Hence, if an ASME Section III Code 

Case is implemented by a licensee, and a later version of the Code Case is incorporated by 

reference into 10 CFR 50.55a and listed in the RG tables, that licensee may use either version 

of the Code Case. 

Section XI ISI and OM IST programs are updated every ten years to the latest edition and 

addenda of Section XI that were incorporated by reference into 10 CFR 50.55a and in effect 

twelve months before the start of the next inspection interval. Licensees who were using a 

Code Case prior to the effective date of its revision may continue to use the previous version for 

the remainder of the 120-month ISI or IST interval. This relieves licensees of the burden of 

having to update their ISI or IST program each time ASME revises a Code Case. Because 

Code Cases are applicable to specific editions and addenda, and because ASME may revise 

Code Cases that are no longer accurate or adequate; licensees choosing to continue to use a 

Code Case during the subsequent ISI interval must implement the latest version incorporation 

by reference in 10 CFR 50.55a and listed in the RGs or apply for an alternative request under 

10 CFR 50.55a(z). 

3. Identification and Analysis of the Alternative Approaches 

Given the existing data and information, the NRC considers a rule change to be the most 

effective way to implement the NRC-approved ASME Code Cases. Two alternatives are 

identified by the NRC: Alternative 1 – the no-action alternative (i.e., status quo, regulatory 

baseline) and Alternative 2 - incorporate by reference NRC-approved ASME BPV Code Cases 

in RG 1.84, Revision 37; RG 1.147, Revision 18; and OM Code Cases in RG 1.192, Revision 2 

into 10 CFR 50.55a through rulemaking. 

3.1. Alternative 1 – No-action alternative 

The no-action alternative (status quo, regulatory baseline) is a non-rulemaking alternative. The 

no-action alternative would not revise the NRC’s regulations to incorporate by reference the 

latest revisions of these three regulatory guides and 2) would not make conforming changes to 

10 CFR 50.55a to comply with the Office of the Federal Register (OFR) guidance for 

incorporating by reference multiple standards into regulations. The no-action alternative would 

cause licensees and applicants that desire to use these ASME Code Cases to request and 

receive approval from the NRC for the use of alternatives under 10 CFR 50.55a(z). The NRC 

does not recommend this alternative for the following reasons: 

• Licensees and applicants would need to submit requests for alternatives to apply Code 

Cases under 10 CFR 50.55a(z) since those Code Cases are not being approved in the 

RGs and are not being incorporated by reference in 10 CFR 50.55a. This process would 

result in increased regulatory burden to licensees, applicants, and the NRC. 
15 

• Public confidence in the NRC as an effective regulator may be reduced because the 

ASME periodically publishes, revises, and annuls its Code Cases. Under Alternative 1, 

outdated material and possibly inaccurate information would remain incorporated by 

reference in the Code of Federal Regulations. 

• This alternative does not meet the intent of NTTAA, which encourages Federal 

regulatory agencies to consider adopting voluntary consensus standards as an 

alternative to de novo agency development of standards affecting an industry. 

3.2. Alternative 2 – Incorporate by Reference NRC-Approved ASME BPV and 

OM Code Cases 

Alternative 2 would incorporate by reference the latest revisions of the regulatory guides listing 

Code Cases newly approved by the NRC. This alternative would allow licensees and applicants 

to implement these ASME Code Cases and their conditions and modifications, if any, without 

seeking prior NRC approval. This alternative continues NRC’s process of periodic rulemakings 

to incorporate by reference in 10 CFR 50.55a the latest regulatory guides that list 

NRC-approved alternatives to the provisions of the ASME BPV and OM Codes. 

The NRC recommends the rulemaking alternative for the following reasons: 

• This alternative reduces regulatory burden on applicants for holders of licenses for 

nuclear power plants by eliminating the need for licensees to submit plant specific 

requests for alternatives in accordance with 10 CFR 50.55a(z) and reduces the need for 

the NRC to review those submittals. 

• This alternative meets the NRC goal of ensuring the protection of public health and 

safety and the environment by continuing to provide NRC approval of new ASME Code 

Cases that allow the use of the most current methods and technology. 

• This alternative supports the NRC’s goal of maintaining an open regulatory process by 

informing the public about and by having the opportunity for the public to participate in 

the regulatory process. 

• This alternative supports the NRC’s commitment to participate in the national consensus 

standard process through the approval of these ASME Code Cases and it conforms to 

NTTAA requirements. 

• The initial burden on the NRC to update the regulations by incorporation by reference 

the editions and addenda of the ASME BPV and OM Codes is more than offset by the 

reduction in the number of plant-specific alternative requests that the NRC would 

evaluate. Section 4 of this analysis provides a discussion of the costs and benefits of 

this alternative relative to the regulatory baseline (Alternative 1). 
16 

4. Evaluation of Benefits and Costs 

This section examines the benefits and costs expected to result from Alternative 2 relative to the 

regulatory baseline (Alternative 1). All costs and benefits are monetized, when possible. The 

total costs and benefits are then summed to determine whether the difference between the 

costs and benefits results in a positive benefit. In some cases, benefits and costs are not 

monetized because meaningful quantification is not possible. 

4.1. Identification of Affected Attributes 

This section identifies the components of the public and private sectors, commonly referred to 

as attributes that are expected to be affected by the alternatives identified in section 3. The 

alternatives would apply to licensees and applicants of nuclear power plants and holders of 

nuclear power plant design certifications. The NRC believes that nuclear power plant licensees 

would be the primary beneficiaries. An inventory of the impacted attributes was developed 

using the list provided in Chapter 5 of the NRC’s “Regulatory Analysis Technical Evaluation 

Handbook” (Ref. 10). 

The affected attributes are the following: 

• Public Health (Accident). This attribute accounts for expected changes in radiation 

exposure to the public caused by changes in accident frequencies or accident 

consequences associated with the alternative (i.e., delta risk). Alternative 2 relative to 

the regulatory baseline (Alternative 1) meets the NRC goal of ensuring the protection of 

public health and safety and the environment by continuing to provide NRC approval of 

new ASME Code Cases that allow the use of the most current methods and technology 

and may decrease the likelihood for an accident and, thus decreases the overall risk to 

the public health. 

• Occupational Health (Accident). This attribute measures health effects, immediate and 

long-term, associated with site workers because of changes in accident frequency or 

accident consequences associated with the alternative (i.e., delta risk). A decrease in 

worker radiological exposure is a decrease in risk (i.e., benefit); an increase in worker 

exposures is an increase in risk (i.e., negative benefit). The use of ASME Code Cases 

may decrease the incremental risk to occupational health following an accident, but this 

effect is not easily quantifiable. For example, advancements in inservice inspection (ISI) 

and inservice testing (IST) may result in an incremental decrease in the frequency of an 

accident resulting in averted worker post-accident radiological exposure when compared 

to the regulatory baseline. 

• Occupational Health (Routine). This attribute accounts for radiological exposures to 

workers during normal facility operations (i.e., non-accident situations). For many types 

of proposed actions, there would be an increase in worker exposures; sometimes this 

would be a one-time effect (e.g., installation or modification of equipment in a radiation 
17 

area), and sometimes it would be an ongoing effect (e.g., routine surveillance or 

maintenance of contaminated equipment or equipment in a radiation area). The use of 

ASME Code Cases may affect occupational health due to radiological exposure. This is 

a result of the addition time required to perform the additional weld examinations and 

pressure testing that are called for in the Code Case conditions that would result in 

increased occupational radiation exposure when compared to the regulatory baseline. 

• Industry Implementation. This attribute accounts for the projected net economic effect 

on the affected licensees to implement the mandated changes. Costs include 

procedural and administrative activities to maintenance, inspection, or testing 

procedures. 

• Industry Operation. This attribute accounts for the projected net economic effect caused 

by routine and recurring activities required by the proposed alternative on all affected 

licensees. Under Alternative 2, a licensee of a nuclear power plant would no longer be 

required to submit a Code Case alternative request under the 10 CFR 50.55a(z), which 

would provide a net benefit (i.e., averted cost) to the licensee. 

Section 50.55a of the NRC regulations requires that nuclear power plant owners 

construct Class 1, Class 2, and Class 3 components in accordance with Section III, 

Division 1, of the ASME BPV Code. Section 50.55a also requires that owners perform 

ISI of Class 1, Class 2, Class 3, Class MC, and Class CC components in accordance 

with Section XI, Division 1, of the BPV Code, and that they perform IST of Class 1, 

Class 2, and Class 3 safety-related pumps and valves in accordance with the OM Code. 

Until 2012, the ASME issued new editions of the ASME BPV Code every 3 years and 

addenda to the editions annually, except in years when a new edition was issued. 

Similarly, the ASME published new editions and addenda of the ASME OM Code. 

Starting in 2012, the ASME decided to issue editions of its BPV and OM Codes (no 

addenda) every 2 years with the BPV Code to be issued on the odd years 

(e.g., 2013, 2015) and the OM Code to be issued on the even years (e.g., 2012, 2014). 

The ASME also publishes Code Cases on a quarterly basis (Sections III and XI) or every 

two years (OM Code) to provide alternatives to existing Code requirements developed 

and approved by ASME. Code Cases are developed to gain experience with new 

technology prior to incorporation into the ASME Code, permit licensees to use 

advancements in ISI and IST; provide alternative examinations for older plants, provide 

an expeditious response to user needs, and provide a limited, clearly focused alternative 

to specific ASME Code provisions. 

Under Alternative 2, licensees and applicants are allowed to implement endorsed ASME 

Code Cases and their conditions and modifications without seeking prior NRC approval. 

This alternative continues NRC’s process of periodic rulemakings to incorporate by 

reference in 10 CFR 50.55a the latest regulatory guides that list NRC-approved 

alternatives to the provisions of the ASME BPV and OM Codes. 
18 

The Code Case requests and subsequent costs are considered sunk (i.e., already 

incurred) for issued design certifications, submitted design certifications under review, 

and submitted reactor applications to the NRC. 

• NRC Implementation. This attribute accounts for the projected net economic effect on 

the NRC to place the proposed alternative into operation. To implement Alternative 2, 

the NRC incurs a cost in relation to Alternative 1 (i.e., regulatory baseline) for developing 

the proposed and final rule and updating corresponding guidance in RG 1.84, RG 1.147, 

and RG 1.192. 

• NRC Operation. This attribute accounts for the projected net economic effect on the 

NRC after the proposed action is implemented. If the NRC does not approve a Code 

Case that a licensee or applicant wants to use, the licensee or applicant typically would 

request, under 10 CFR 50.55a(z), permission to use the ASME Code Cases through a 

submittal. This submittal requires additional NRC staff time to evaluate the Code Case 

to determine its acceptability and whether any limitations or modifications should apply. 

Under Alternative 2, these Code Case alternative requests would not be required, which 

results in a net benefit (i.e., averted cost) for the NRC. 

The NRC review costs for Code Case alternative requests submitted to the NRC before 

the effective date of the final rule are sunk costs and are not considered further in this 

regulatory analysis. 

• Improvements in Knowledge. This attribute accounts for improvements in knowledge by 

industry and NRC staff gaining experience with new technology prior to incorporation 

into the ASME Code, and permitting licensees to use advancements in ISI and IST. 

Improvements in ISI and IST may also result in the earlier identification of material 

degradation that if undetected could result in further degradation that eventually results 

in a plant transient. 

• Regulatory Efficiency. This attribute accounts for regulatory and compliance 

improvements resulting from the implementation of Alternative 2 relative to the 

regulatory baseline. Alternative 2 would increase regulatory efficiency as licensees and 

applicants that wish to use NRC-approved ASME Code Cases would not require 10 CFR 

50.55a(z) alternative requests. Further, Alternative 2 is consistent with the provisions of 

the NTTAA that encourages Federal agencies to consider adopting voluntary consensus 

standards as an alternative to de novo agency development of standards affecting an 

industry. Alternative 2 is consistent with NRC policy of evaluating the latest versions of 

consensus standards in terms of their suitability for endorsement by regulations and 

regulatory guides. In addition, Alternative 2 is consistent with NRC’s goal to harmonize 

with international standards to improve regulatory efficiency for both the NRC and 

international standards groups. 
19 

• Attributes with No Effects. Attributes not expected to be affected under any of the 

alternatives include the following: public health (routine), offsite property, onsite 

property, other government, general public, antitrust considerations, safeguards and 

security considerations, environmental considerations addressing Section 102(2) of the 

National Environmental Policy Act of 1979, and other considerations. 

4.2. Analytical Methodology 

This section describes the process used to evaluate costs and benefits associated with the 

proposed alternatives, consistent with the guidance provided in NUREG/BR-0058, “Regulatory 

Analysis Guidelines of the U.S. Nuclear Regulatory Commission” (Ref. 11). The benefits 

include desirable changes in affected attributes (e.g., monetary savings, improved safety, 

reduced burden on licensees, streamlined process), while the costs include any undesirable 

changes in affected attributes (e.g., monetary costs). 

The analysis evaluates four attributes on a quantitative basis: occupational health (routine), 

industry implementation, industry operation, NRC implementation, and NRC operation. 

Quantitative analysis requires a baseline characterization of the affected universe, including 

characterization of factors such as the number of affected entities, the type and complexity of 

the NRC conditioned Code Case tasks, and the administrative processes and procedures that 

licensees or applicants would implement, or no longer implement, because of the proposed 

alternative. The remaining four attributes are evaluated using non-quantitative techniques 

because the benefits and costs relating to consistent policy application and improvements in ISI 

and IST techniques are not possible or practical (i.e., due to lack of methodologies or data). 

Sections 4.2.1 through 4.2.9 describe the analytical method and assumptions used in the 

quantitative and non-quantitative analysis of these attributes. 

4.2.1. Regulatory Baseline 

This draft regulatory analysis measures the incremental effects of the proposed rule relative to a 

baseline that reflects anticipated behavior in the event the NRC undertakes no other regulatory 

(Alternative 1, the no-action alternative). As part of the regulatory baseline used in this analysis, 

the NRC staff assumes full licensee compliance with existing NRC regulations. Section 5 

presents the estimated incremental costs and benefits of incorporation by reference 

NRC-approved ASME BPV and OM Code Cases (Alternative 2) relative to this baseline. 

4.2.2. Discount Rates 

In accordance with guidance from the Office of Management and Budget (OMB) Circular 

No. A-4 (Ref. 22) and NUREG/BR-0058, Rev. 4, net present worth calculations are used to 

determine how much society would need to invest today to ensure that the designated dollar 

amount is available in a given year in the future. By using present worth values, costs and 

benefits, regardless of when the cost or benefit is incurred in time, are valued to a reference 

year for comparison. Based on OMB Circular No. A-4 and consistent with NRC past practice 

and guidance, present worth calculations are presented using three-percent and seven-percent 
20 

real discount rates.1 A three-percent discount rate approximates the real rate of return on 

long-term government debt, which serves as a proxy for the real rate of return on savings to 

reflect reliance on a social rate of time preference discounting concept. A seven-percent 

discount rate approximates the marginal pretax real rate of return on an average investment in 

the private sector, and is the appropriate discount rate whenever the main effect of a regulation 

is to displace or alter the use of capital in the private sector. A seven-percent rate is consistent 

with an opportunity cost of capital2 concept to reflect the time value of resources directed to 

meet regulatory requirements. 

4.2.3. Cost/Benefit Inflators 

To evaluate the costs and benefits consistently, the analysis inputs are inflated into 

2016 dollars. The most common inflator is the Consumer Price Index for all urban consumers 

(CPI-U), developed by the U.S. Department of Labor, Bureau of Labor Statistics (BLS). The 

formula to determine the amount in 2016 dollars is 

CPIUଶ଴ଵ଺

CPIU୚ୟ୪୳ୣ	ଢ଼ୣୟ୰

∗ Value୚ୟ୪୳ୣ	ଢ଼ୣୟ୰ = Valueଶ଴ଵ଺

Values of CPI-U used in this cost-benefit analysis are summarized in Table 1. 

Table 1 Consumer Price Index—All Urban Consumers, U.S. City Average 

Base Year CPI-U Annual 

Averagea

Forecast percent change 

from previous yearb

2000 172.2 

2011 224.939 

2012 229.594 

2013 232.957 

2014 236.736 

2015 239.340 1.10% 

2016 244.606 2.20% 

a United States Bureau of Labor Statistics, CPI Detailed Report, December 2014. “Table 24. Historical 

Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, All-Items,” December, 2014. 

Web. 16 Apr. 2015. http://www.bls.gov/cpi/tables.htm.) 

b United States Congressional Budget Office, The Budget and Economic Outlook: 2015 to 2025. “Table 2-1. 

CBO’s Economic Projections for Calendar Years 2015 to 2025,” January 2015. Web. Sept. 2015. 

http://www.cbo.gov/sites/default/files/cbofiles/attachments/49892-Outlook2015.pdf. 

 

1 The NRC did not use the discount rates presented in Appendix C to OMB Circular No. A-94 (Ref. 23). The OMB 

discount rates are used for lease-purchase and cost-effectiveness analysis, as specified in the Circular, and do 

not apply to regulatory analysis or benefit-cost analysis of public investment. 

2 Opportunity cost is the value of the next best alternative to a particular activity or resource. An analyst does not 

need to assess opportunity cost in monetary terms. Opportunity cost can be assessed in terms of anything that 

is of value. 
21 

4.2.4. Labor Rates 

For regulatory analysis purposes, labor rates are developed wherein only variable costs that are 

directly related to the implementation and operation and maintenance of the proposed 

requirement are included. This approach is consistent with guidance set forth in 

NUREG/CR-4627, “Generic Cost Estimates,” (Ref. 8) and general cost-benefit methodology. 

The NRC incremental labor rate is $124 per hour.3

The estimated mean industry incremental labor rate is $105 per hour. The NRC staff derived 

these labor rates according to data provided by the BLS. The NRC staff used the 2014 

Occupational Employment and Wages data, which provided labor categories and the mean 

hourly wage rate by job type and used the inflator discussed in Section 4.2.3 to inflate these 

labor rate data to 2016 dollars. The labor rates used in the analysis reflect total compensation, 

which includes health and retirement benefits (using a burden factor of 2.0). The NRC staff 

used the BLS data tables to select appropriate hourly labor rates for performing the estimated 

procedural, licensing, and utility related work necessary during and following implementation of 

the proposed alternative. In establishing this labor rate, wages paid for the individuals 

performing the work plus the associated fringe benefit component of labor cost (i.e., the time for 

plant management over and above those directly expensed) are considered incremental 

expenses and are included. The NRC staff also verified that these labor rates are consistent 

with wage rates submitted by industry in recent severe accident mitigation alternatives cost 

estimates. Appendix A of this regulatory analysis provides a breakdown of the labor categories 

considered that may be required to implement this proposed rule. The NRC staff performed an 

uncertainty analysis, which is discussed in Section 5.12. 

4.2.5. Affected Entities 

• Operating reactor units – The NRC staff models 61 U.S. light-water nuclear power reactors 

sites in this analysis.4 One conditioned Code Case, N-795, is specific to boiling-water 

reactor (BWR) designs for which there are 23 BWR sites. Watts Bar Nuclear Power Plant, 

Unit 2 received its operating license in October 2015 and is expected to begin operation by 

year end. Note that during calendar year 2019, the Oyster Creek and Pilgrim units, both 

BWR sites, plan to prematurely shutdown resulting in 21 BWR sites.5

 

3 The NRC labor rates presented here differ from those developed under the NRC’s license fee recovery program 

(10 CFR Part 170). The NRC labor rates for fee recovery purposes are set for cost recovery of the services 

rendered and as such include nonincremental costs (e.g., overhead, administrative, and logistical support costs). 

4 Based on information obtained from NRC, 2015-2016 Information Digest (NUREG-1350, Volume 27), 

“Appendix H: U.S. Commercial Nuclear Power Reactor Operating Licenses - Expiration by Year, 2013–2049,” 

June 2015. Available at: http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1350/, last accessed on 

November 19, 2015 (Ref. 13). 

5 On November 18, 2015, Entergy Nuclear Operations, Inc. certified to the NRC that it has decided to permanently 

cease power operations at the James A. FitzPatrick Power Plant at the end of the current fuel cycle, which is 
22 

• Future operating reactor units – The NRC staff assumes that there are four future operating 

light-water nuclear power reactors that would be affected by the proposed final rule and are 

considered in this analysis. The future nuclear power reactor units are Vogtle Electric 

Generating Plant, Units 3 and 4 (Vogtle 3 and 4), assumed to begin operations in 2019 and 

2020, respectively; and Virgil C. Summer Nuclear Station, Units 2 and 3 (Summer 2 and 3), 

assumed to begin operations in 2019 and 2020, respectively.6

To account for new nuclear power reactors under construction that are anticipated to begin 

operation beginning in 2019, the NRC modeled a hypothetical nuclear power reactor to analyze 

the costs and benefits. The NRC assumes that there would be no significant differences 

between the future operating reactor units listed above and the modelled hypothetical nuclear 

power reactor. The NRC staff assumes these new reactor units would be a pressurized-water 

reactor (PWR) design. 

Assumptions Related to Affected Entities

Other potential new reactors licensed under 10 CFR Part 52 and small modular reactors, are 

not included in this analysis. In the case that additional Part 52 applicants are issued licenses 

and are under construction, the regulatory analysis for the final rule would reflect that change.7

4.2.6. Sign Conventions 

The sign conventions used in this analysis are all favorable consequences for the alternative are 

positive and all adverse consequences for the alternative are negative. For example, additional 

costs above the regulatory baseline are shown as negative values and cost savings and averted 

costs are shown as positive values. Negative values are shown using parentheses 

(e.g., negative $500 is displayed as ($500)). 

 

expected to occur in late 2016 or early 2017 (Ref. 29). This announcement was made after the regulatory 

analysis was completed and will be incorporated as part of the final rule. The impact of this announcement 

would reduce the number of BWR sites to 20, which is the BWR site low estimate value used in the uncertainty 

analysis (see Appendix B). 

6 The timing and certainty for operation of the Bellefonte Nuclear Station, Units 1 and 2, as well as other new 

operating licenses are too speculative to be included in this regulatory analysis. 

7 The Bellefonte Nuclear Power Station is not included in this analysis because the site does not have any 

operating units and new construction is indefinitely delayed. Bellefonte Units 1 and 2 are under the Commission 

Policy Statement on Deferred Plants (52 FR 38077; October 14, 1987). Fermi, Unit 3 is not included in this draft 

analysis because as of May 1, 2015, the NRC issued a combined license to DTE Electric Company but DTE 

Electric Company has no immediate plans to begin construction. If the construction plans change for these units 

during the final rule phase, the regulatory analysis will be updated accordingly to reflect the costs and benefits of 

the rule on these additional units. 
23 

4.2.7. Code Case Horizon 

The NRC staff assumes that incorporation of ASME Code Cases would occur within two cycles 

of issuing a new edition of the Code or within six years, whichever occurs first. A six-year 

period for the effective use of Code Case, a relatively short period, was used for two reasons. 

First, because ASME updates the edition of the Code every two years, it is likely that those 

Code Cases used by industry would be incorporated into the Code. Second, as the alternatives 

within this regulatory analysis have up-front costs with benefits that accrue in later years through 

averted costs (e.g., licensees and applicants no longer need to submit a Code Case alternative 

request), shorter time horizons place heavier emphasis on the implementation costs than on its 

benefits. In this analysis, a six-year horizon is selected to provide an estimate of the 

Alternative 2 impact. 

4.2.8. Dollar per Person-Rem Conversion Factor 

The NRC is currently proposing to revise the dollar per person-rem averted conversion factor of 

$2,000 per person-rem based on recent information regarding the value of a statistical life and 

cancer risk factors. The NRC staff included the proposed updated dollar per person rem values 

provided in Table 2 in this analysis.8

Table 2 Dollar per Person-Rem Conversion Factor 

Low estimate Base case High estimate 

$2,000 $3,550 $5,100 

4.2.9. Replacement Power Cost 

Replacement power costs are the costs for “replacing” the energy generated by the plant when 

the NRC requirements on a Code Case specify or result in extended power plant downtime, 

during which the plant is not generating electricity. The NRC assumes that licensees engage in 

power purchase agreements (PPA) to economically replace power.9 Although not all licensees 

may have PPAs, the licensee would still need to replace the lost power any time the nuclear 

power plant is not operating in order to meet its electrical supply obligations. 

The NRC is currently updating its estimates for replacement energy costs based on a 

U.S. competitive electricity market area model. The updated model provides the replacement 

energy costs by day, week, and year, based on the market area for each year between 

years 2010 and 2020. For each U.S. power market area, a lowest and highest cost 

 

8 The dollar per person-rem conversion factor values range from the current approved value of $2,000 to the draft 

proposed value of $5,100 contained in NUREG-1530, Rev. 1 (draft) released for public comment (Ref. 25). 

9 The NRC assumes that the power plant licensee is contractually required to provide power generated by the 

plant, and, therefore, the licensee purchases “replacement power” in order to fulfill its contractual requirements. 
24 

replacement energy cost estimate was calculated, normalizing for reactor megawatt rating 

differences. The estimated replacement energy costs per megawatt-hour for all seven 

U.S. power market areas are provided in Table 3. 

Table 3 Average Wholesale Electricity Price with a Nuclear Power Plant Outage 

U.S. power 

market area 

Low range 

$/MWe-hr (2016 dollars) 

High range 

$/MWe-hr (2016 dollars) 

NYISO $43.10 $47.83 

PJM $42.17 $42.53 

MISO $37.69 $40.74 

SPP $37.51 $37.69 

SERC $40.41 $40.97 

ERCOT $40.97 $40.97 

WECC $39.07 $40.30 

The estimated replacement power cost ranges from a low estimate of $37.51 per MW-hour to a 

high estimate of $47.83 per MW-hour with an average value of $40.85 per MW-hr. The average 

BWR rated electrical output is 1,049 MWe.10

Based on these estimates, the average estimated replacement energy hourly cost for a typical 

BWR reactor is provided in Table 4. 

Table 4 Estimated Replacement Power Hourly Costs for a Typical BWR 

Low estimate 

(2016 dollars) 

Base case estimate

(2016 dollars) 

High estimate 

(2016 dollars) 

$39,400 $42,900 $50,200 

4.2.10. Base Year 

The assumed date of implementation of the final rule is year 2016 so the monetized benefits 

and costs in this analysis are expressed in year 2016 dollars. One-time implementation costs 

are assumed to be incurred in year 2016. Ongoing and annual costs of operation related to the 

alternatives are assumed to begin in year 2017 unless otherwise stated and are then discounted 

into year 2016 dollars. 

4.2.11. Cost Estimation 

In order to estimate the costs associated with the evaluated alternatives, the NRC staff used a 

work breakdown approach to deconstruct the requirements according to the required activities 

 

10 The NRC staff calculated the average BWR rated electrical output value from IAEA Power Reactor Information 

System data (Ref. 26). 
25 

for each requirement. For each required activity, the NRC further subdivided the work across 

labor categories (i.e., executives, managers, technical staff, administrative staff, and licensing 

staff). The NRC staff estimated the required level of effort (LOE) for each required activity and 

used a blended labor rate to develop bottoms-up cost estimates. 

The NRC staff gathered data from several sources and consulted ASME Code working group 

members to develop levels of effort and unit cost estimates. The NRC staff applied several cost 

estimation methods in this analysis. The professional knowledge and judgment of the NRC staff 

were used to estimate many of the costs and benefits. Additionally, a build-up method, 

solicitation of licensee input, and extrapolation techniques were used to estimate costs and 

benefits. Finally, an independent cost estimate was performed to compare to NRC staff’s cost 

estimates to be responsive to the General Accountability Office (GAO) concerns and 

recommendations (Ref. 27). 

The NRC staff began by estimating some activities using the engineering build-up method of 

cost estimation, which combined incremental costs of an activity from the bottom up to estimate 

a total cost. For this step, the NRC reviewed previous license submittals and extracted the 

length of each section, in page numbers, and the NRC used these data to develop preliminary 

levels of effort. 

The NRC staff consulted subject matter experts within and outside of the agency to develop 

most of the LOE estimates used in the analysis. For example, for both cost savings and the 

costs of the proposed rule, the NRC staff consulted licensees when estimating the level of effort 

required for ASME Code Case impacts. Additionally, the NRC staff contributed to the 

estimation of levels of effort for review-related activities. 

The NRC staff extrapolated to estimate some cost activities, which relies on actual past or 

current costs to estimate the future cost of similar activities. For instance, to calculate the 

estimated averted costs of alternative requests and the preparation of the final rule and 

accompanying regulatory guidance, it was necessary for the NRC staff to extrapolate the labor 

categories responsible for the work based on past data. For steps in the current and proposed 

alternative with no data, however, the NRC staff estimated the level of effort based on similar 

steps in the process for which data are available. 

To evaluate the effect of uncertainty in the model, the NRC staff employed Monte Carlo 

simulation, which is an approach to uncertainty analysis where input variables are expressed as 

distributions. The simulation was run 10,000 times and values were chosen at random from the 

distributions of the input variables provided in Appendix B. The result was a distribution of 

values for the output variable of interest. With Monte Carlo simulation, it is also possible to 

determine the input variables that have the greatest effect on the value of the output variable. 

See Section 5.12 for a detailed description of the Monte Carlo simulation methods and a 

presentation of the results. 
26 

4.2.12. Conditioned Code Cases 

The NRC staff analyzes ASME Code Cases to determine whether the Code Cases are 

a) acceptable without conditions, b) generally acceptable with conditions, or c) not approved. 

When the NRC generally approves Code Cases with conditions, there may be additional 

regulatory burden on licensees to meet the conditioned Code Cases. The conditions would 

specify, for each applicable Code Case, the additional activities that must be performed, the 

limits on the activities specified in the Code Case, and/or the supplemental information needed 

to provide clarity. These ASME Code Cases are included in Table 2 of DG-1295, DG-1296, and 

DG-1297. The NRC’s evaluation of the Code Cases and the reasons for the NRC’s proposed 

conditions are discussed in the proposed rule and in the draft guides. The conditioned Code 

Cases would have additional resource burden on licensees under the Industry Operation 

affected attribute. A list of conditioned Code Cases is provided in Table 5. 

Table 5 List of Conditioned Code Cases 

DG 

Listing 

Conditioned 

Code Case 

Number 

New Condition Description11

Incremental 

Resources 

Required12

DG-1296 N-593-2 (1) Essentially 100 percent (not less than 90 percent) 

of the examination volume A-B-C-D-E-F-G-H must be 

inspected. (Note: the above condition is identical to 

condition on the use of Code Case N-593, RG 1.147, 

Rev. 16.) 

(2) The examination volume specified in Section XI, 

Table IWB-2500-1, Examination Category B-D, must 

be used for the examination of steam generator 

nozzle-to-vessel welds at least once prior to using the 

reduced examination volume allowed by Code 

Case N-593-2. 

No additional hours for 

condition (1) because it is 

part of the regulatory 

baseline. Condition (2) is 

related to scheduling and 

requires no additional 

hours compared to 

unconditionally approving 

the Code Case. 

DG-1296 N-638-6 (1) Demonstration for ultrasonic examination of the 

repaired volume is required using representative 

samples, which contain construction type flaws. 

(2) Section 1(b)(1) for through-wall circumferential 

welds is unacceptable. 

These two conditions 

require minimal additional 

effort for the following 

reasons. Condition (1), 

would require 4-6 weld 

examinations per 

refueling outage. The 

NRC staff estimates that 

each weld examination 

would require 8 hours. 

This would result in an 

incremental cost impact 

to industry for every 

refueling outage. 

DG-1296 N-666-1 (1) A surface examination (magnetic particle or liquid 

penetrant) must be performed after installation of the 

weld overlay and seal weld on Class 1 and 2 piping 

socket welds. Fabrication defects, if detected, must 

be dispositioned using the surface examination 

With respect to Condition 

(1), the NRC estimates 

that 2 additional hours 

would be necessary to 

prepare and perform the 

 

11 This information is copied directly from the respective draft guide. 

12 These incremental hours are the additional time necessary to conform to the NRC conditioned Code Case when 

using the same Code Case with no NRC conditions as the baseline. 
27 

DG 

Listing 

Conditioned 

Code Case 

Number 

New Condition Description11

Incremental 

Resources 

Required12

acceptance criteria of the Construction Code identified 

in the Repair/Replacement Plan. 

(2) A VT-1 visual examination is required to be 

performed after completion of the weld overlay and 

seal weld for Class 3 piping. (Note: Code Case N-666 

was unconditionally approved in Rev. 17 of RG 1.147.) 

surface examination and 

to disposition any 

fabrication defects 

detected per weld. 

Condition (2) would 

require an extra hour to 

perform the visual 

examination. This would 

result in a one-time cost 

impact to industry. 

DG-1296 N-749 In lieu of the upper shelf transition temperature, Tc, 

as defined in the Code Case, the following shall be 

used: 

Tc = 170.4 °F + 0.814 x RTNDT (in U.S. Customary 

Units), and 

Tc = 73.6 °C + 0.814 x RTNDT (in SI Units). 

Alternatively, the licensee may use a different Tc value 

if it can be justified by plant-specific Charpy Curves. 

These conditioned Code 

Cases are for calculation 

purposes and, therefore, 

require no-to-minimal 

incremental effort. 

DG-1296 N-754 (1) The conditions imposed on the optimized weld 

overlay design in the NRC safety evaluation for 

MRP-169, Revision 1-A (ADAMS Accession 

No. ML101620010 and ML101660468) must be 

satisfied. 

(2) The preservice and inservice inspections of the 

overlaid weld must satisfy 10 CFR 

50.55a(g)(6)(ii)(F). 

(3) The first layer of weld metal deposited shall not 

be credited toward the required optimized weld 

overlay thickness unless the chromium content of 

the first layer is at least 24 per cent. The presence 

of the first layer shall be considered in the design 

analysis requirements of paragraph 2(b) of Code 

Case N-754 regardless of the chromium content. 

None of these conditions 

requires additional effort 

because licensees must 

meet either currently 

acceptable NRC 

approvals (for Condition 

(1) or the criteria for 

Conditions (2) and (3)). 

DG-1296 N-778 Licensees must submit the following reports to the 

regulatory authority: 

(1) The preservice inspection summary report must 

be submitted prior to the date of placement of the 

unit into commercial service. 

(2) The inservice inspection summary report must be 

submitted within 90 calendar days of the completion 

of each refueling outage. 

The ASME approved 

Code Case requires the 

licensees to submit these 

reports, but gives no 

requirements related to 

when the reports should 

be submitted. The 

conditions provide 

submittal requirements 

and therefore require no 

additional effort if the 

Code Case was approved 

without conditions. 

DG-1296 N-789 (1) Areas containing pressure pads shall be visually 

observed at least once per month to monitor for 

evidence of leakage. If the areas containing pressure 

pads are not accessible for direct observation, then 

monitoring would be accomplished by visual 

assessment of surrounding areas or ground surface 

areas above pressure pads on buried piping, or 

monitoring of leakage collection systems, if available. 

(2) For the pressure pad design, the higher of the 

2 times the actual measured corrosion rate and 

4 times the estimated maximum corrosion rate for 

the system must be used. If the actual measured 

Condition (1) requires 

additional inspections of 

the pressure pads. The 

NRC staff estimates that 

there would most likely be 

3 pad inspections 

performed. The NRC 

staff estimates that the 

incremental time required 

to perform a visual 

inspection of an additional 

three pads would require 
28 

DG 

Listing 

Conditioned 

Code Case 

Number 

New Condition Description11

Incremental 

Resources 

Required12

corrosion rate in the degraded location is 

unavailable, the estimated maximum corrosion rate 

for the system assumed in the design must be 

calculated based on the same degradation 

mechanism as the degraded location. 

between one and ten 

labor hours with a best 

estimate of 1.5 hours. 

These visual inspections 

would be performed at 

least once a month. 

Condition (2) is used for 

calculation purposes and 

therefore, requires no 

additional effort beyond 

approval of the Code 

Case without conditions. 

DG-1296 N-795 (1) The use of nuclear heat to conduct the 

boiling-water reactor (BWR) Class 1 system leakage 

test is prohibited (i.e., the reactor must be in a noncritical state). 

a. This condition also applies to pressure 

testing of reactor coolant pressure boundary 

components repaired or replaced in 

accordance with Section XI, IWA-4000. 

(2) The test condition holding times, after 

pressurization to test conditions, and before the 

visual examinations commence, shall be 1 hour for 

non-insulated components. 

Condition (1) requires no 

additional effort compared 

to unconditional approval 

of the Code Case. The 

NRC staff estimates that 

Condition (2)(a) would 

require an incremental 

effort of 45 minutes to 

perform the examination. 

The NRC staff estimates 

that the repair and 

replacement would occur 

twice per ten-year period 

per reactor. This Code 

Case is applicable only to 

BWR designs. 

DG-1296 N-799 (1) The gap between the ultrasonic probe and 

component surface shall not exceed 1/32 in. If the 

gap exceeds 1/32 in., the weld shall be considered to 

be unexamined unless the examination technique is 

successfully demonstrated on representative 

mockups. 

(2) The following requirements must be implemented 

when applying this Code Case to ensure that welds 

are adequately inspected: 

a. Examination requirements of Section XI, 

Mandatory Appendix I, paragraph I-3200(c) 

must be applied. 

b. The examination of the dissimilar metal welds 

joining vessel nozzles to components must be 

full volume, including the cast austenitic 

stainless steel component of the weld. 

c. Ultrasonic depth and sizing qualifications for 

cast austenitic stainless steel components 

must follow Appendix VIII, Supplement 10, 

using representative cast austenitic stainless 

steel mockups containing representative 

cracks and be independent of other 

Supplement 10 qualifications. 

d. For components with wall thicknesses beyond 

the crack detection and sizing capabilities of a 

through-wall ultrasonic performance-based 

qualification, the examination’s acceptability 

shall be based on an ultrasonic examination of 

the qualified examination volume and a flaw 

evaluation of the largest hypothetical crack 

Condition (1) requires no 

additional effort compared 

to unconditional approval 

of the Code Case. 

Condition (2) is a 

stipulation for use. The 

NRC staff estimates that 

each weld inspection 

would require 5 additional 

labor hours. The NRC 

staff’s best estimate is 

that 2 welds would be 

inspected. The NRC 

staff’s low estimate is 1 

weld and its high estimate 

is 5 welds. The NRC staff 

notes that there could be 

significant costs from this 

conditioned Code Case if 

flaws in the components 

are detected. 

This Code Case is 

applicable only to new 

reactor designs. 
29 

DG 

Listing 

Conditioned 

Code Case 

Number 

New Condition Description11

Incremental 

Resources 

Required12

that could exist in the volume and not be 

qualified for ultrasonic examination. 

e. Cracks detected and not depth sized to 

Appendix VIII type performance-based 

procedures, equipment, and personnel 

qualifications shall be repaired or removed. 

DG-1297 OMN-16 Figure 1 was inadvertently omitted from OMN-16, 

Revision 1, in the 2012 Edition of the OM Code. This 

Code Case is approved for use provided it is 

supplemented with Figure 1 of OMN-16 that is in the 

2006 Addendum of the OM Code. 

(Note: OMN-16, 2006 Addenda, was unconditionally 

approved in Rev. 1 of RG 1.192.) 

The NRC staff expects no 

incremental change in 

resource requirements 

between the 

unconditioned and the 

conditioned Code Case. 

DG-1297 OMN-18 The upper end values of the Group A Test Acceptable 

Ranges for flow and differential pressure (or, 

discharge pressure) must be 1.06Qr and 1.06∆Pr (or 

1.06Pr), respectively, as applicable to the pump type. 

The high values of the Required Action Ranges for 

flow and differential pressure (or discharge pressure) 

must be >1.06Qr and >1.06∆Pr (or 1.06Pr), 

respectively, as applicable to the pump type. 

The NRC staff expects 

that this condition 

requires no additional 

effort compared to the 

Code Case without 

conditions. 

DG-1297 OMN-19 Applicants or licensees who use this Code Case must 

implement a pump periodic verification test program. 

A pump periodic verification test is defined as a test 

that verifies a pump can meet the required (differential 

or discharge) pressure as applicable, at its highest 

design basis accident flow rate. 

The applicant or licensee must: 

a. Identify those certain applicable pumps with 

specific design basis accident flow rates in the 

applicant’s or licensee’s credited safety 

analysis (e.g., technical specifications, 

technical requirements program, or updated 

safety analysis report) for inclusion in this 

program. 

b. Perform the pump periodic verification test at 

least once every two years. 

c. Determine whether the pump periodic 

verification test is required before declaring the 

pump operable following replacement, repair, 

or maintenance on the pump. 

d. Declare the pump inoperable if the pump 

periodic verification test flow rate and 

associated differential pressure (or discharge 

pressure for positive displacement pumps) 

cannot be achieved. 

e. Maintain the necessary records for the pump 

periodic verification tests, including the 

applicable test parameters (e.g., flow rate and 

associated differential pressure, or flow rate 

and associated discharge pressure, and speed 

for variable speed pumps) and their basis. 

f. Account for the pump periodic verification test 

instrument accuracies in the test acceptance 

criteria. 

g. The applicant or licensee need not perform a 

pump periodic verification test if the design 

basis accident flow rate in the applicant’s or 

This alternative provides 

for an alternative upper 

limit level for a 

comprehensive pump 

test. For this code case, 

work packages for 

periodic pump verification 

tests would have to be 

written. The NRC staff 

estimates that each work 

package would require 

40 labor hours. 

Additionally 16 labor 

hours would be required 

to update test procedures 

and 16 labor hours would 

be required to determine 

test points and inspection 

requirements to perform 

the initial test. The NRC 

staff estimates that onehalf labor hour is required 

to test each pump. The 

NRC staff estimates that 

this periodic pump 

verification would apply to 

21 pumps per unit. The 

periodic pump tests are 

performed every two 

years. The NRC staff 

estimates that 0.5 hours 

are required to prepare 

each subsequent periodic 

test work package. 
30 

DG 

Listing 

Conditioned 

Code Case 

Number 

New Condition Description11

Incremental 

Resources 

Required12

licensee’s safety analysis is bounded by the 

comprehensive pump test or Group A test. 

5. Presentation of Results 

This section presents the quantitative and non-quantitative results by attribute relative to the 

regulatory baseline. As described in the previous sections, costs and benefits are quantified 

where possible and can have either a positive or a negative algebraic signs, depending on 

whether the proposed alternative has a favorable or adverse effect relative to the regulatory 

baseline (Alternative 1). A discussion is provided for those attributes not easily represented in 

monetary values. This ex ante cost-benefit analyses13 provides useful information that can be 

used when deciding whether to select an alternative, even if the analysis is based on estimates 

of the future costs and benefits. 

The NRC Regulatory Analysis Guidelines state that the NRC’s periodic review and endorsement 

of consensus standards such as new versions of the ASME Codes and associated Code Cases 

is a special case. This is because consensus standards have already undergone extensive 

external review and have been endorsed by industry. In addition, endorsement of the ASME 

Codes and Code Cases has been longstanding NRC policy. Licensees and applicants 

participate in the development of the ASME Codes and Code Cases and are aware that periodic 

updating of the ASME Code is part of the regulatory process. Code Cases are 

ASME-developed alternatives to the ASME BPV and OM Codes that licensees and applicants 

may voluntarily choose to adopt without an alternative request if approved through incorporation 

by reference in the NRC’s regulations. Finally, endorsement of the ASME Codes and Code 

Cases is consistent with the NTTAA, inasmuch as the NRC has determined that there are 

sound regulatory reasons for establishing regulatory requirements for design, maintenance, ISI, 

and IST and examination by rulemaking. 

In a typical incorporation of Code Cases, the NRC endorsements can involve hundreds, if not 

thousands, of individual provisions. Evaluating the benefit vis-à-vis the cost of each individual 

provision in this regulatory analysis would be prohibitive, and the value gained by performing 

such an exercise would be limited. Thus, this regulatory analysis does not evaluate individual 

requirements of the consensus standards. 

5.1. Public Health (Accident) 

Industry practice to adopt ASME BPV and OM Code Cases that incorporation by reference into 

the regulations may incrementally reduce the likelihood of a radiological accident in a positive, 

but not easily quantifiable, manner. Pursuing Alternative 2 would continue to meet the NRC’s 

goal of maintaining safety by continuing to provide NRC approval of new ASME Code Cases to 

 

13 An ex ante cost-benefit analysis is prepared before a policy, program, or alternative is in place and can assist in 

the decision about whether resources should be allocated to that alternative. 
31 

gain experience with new technology prior to incorporation into the ASME Code, permit 

licensees to use advancements in ISI and IST; provide alternative examinations for older plants, 

provide an expeditious response to user needs, and provide a limited, clearly focused 

alternative to specific ASME Code provisions. Improvements in ISI and IST may also result in 

the earlier identification of material degradation that if undetected could result in further 

degradation that eventually results in a plant transient. As such, Alternative 2 maintains the 

same level or may provide an incremental improvement in safety when compared to the 

regulatory baseline. 

5.2. Occupational Health (Accident) 

The NRC’s practice to review ASME BPV and OM Code Cases, determine their acceptability, 

and specify its finding in regulatory guides that are incorporated by reference into the 

regulations assures that the mandated ASME Code requirement and approved Code 

alternatives result in an acceptable level of quality and safety. Pursuing Alternative 2 would 

continue to meet the NRC’s goal of maintaining safety by continuing to provide NRC approval of 

new ASME Code Cases to gain experience with new technology prior to incorporation into the 

ASME Code, permit licensees to use advancements in ISI and IST; provide alternative 

examinations for older plants, provide an expeditious response to user needs, and provide a 

limited, clearly focused alternative to specific ASME Code provisions. The NRC expects that 

licensee and applicant voluntary use of NRC-approved Code Cases would reduce occupational 

radiation exposure in a positive, but not easily quantifiable, manner. For example, the NRC staff 

expects that the use of the approved Code Cases would result in an incremental decrease in 

the likelihood of an accident and would reduce worker radiological exposures during routine 

inspections or testing when compared to the regulatory baseline. 

The proposed rule alternative (Alternative 2) would allow licensees and applicants to apply 

voluntarily NRC-approved Code Cases, sometimes with NRC-specified conditions. The 

approved Code Cases are listed in three regulatory guides that are proposed to be incorporated 

by reference into 10 CFR 50.55a. 

5.3. Occupational Health (Routine) 

The NRC staff estimates that the use of ASME Code Cases would affect occupational health 

due to radiological exposure. The following Code Cases would result in an incremental 

increase in worker radiological exposure during routine inspections when compared to the 

regulatory baseline. 

Table 6 Occupational Health Impacts 

Code Case No. of workers Incremental Dose 

per worker (mrem) 

Annual Incremental 

Dose (mrem) 

N-638 2 25 50 

N-789 2 25 50 

N-799 2 25 50 
32 

This is a result of the ISI that relates to the additional weld examinations and inspection of the 

pressure pads, due to the imposed conditions of the Code Cases. Consequently, industry 

would incur a total cost that ranges from ($227,000) (7-percent NPV) to ($254,000) (3-percent 

NPV). The cost incurred is calculated based on the mean estimate of the dollar per person-rem 

value of $3,550. 

5.4. Onsite Property — Power Replacement 

For Code Case 795-1, the NRC requires that the hold times after reaching the test conditions 

must be held for one hour for non-insulated components, which is 45 minutes longer than that 

required by the current Code Case. The pressure test is an outage critical path item; therefore, 

extending the pressure test time would extend the outage to perform the test of the repaired or 

replaced components. The NRC staff estimates that this requirement would add 45 minutes to 

a plant outage for the repair or replacement activities. The staff assumed that this test would be 

performed twice per 10-year inservice inspection for each BWR unit with the first occurrences in 

2017 and evenly distributed throughout the 10-year interval. The cost estimated is the cost to 

replace the power that is not generated during the additional 45 minutes. Industry labor to 

perform the test is addressed in Section 5.6.2. 

Using the estimated short-term replacement power hourly costs for a typical U.S. BWR provided 

in Table 4 and the incremental 45 minute increase in outage time to perform the conditioned 

Code Case 795-1 test, for which the frequency of the repair and replacement would occur twice 

per ten-year period per BWR unit. The estimated short-term replacement power costs are 

shown in Table 7. 

Table 7 Code Case 795-1 Short-Term Replacement Power Costs 

Year 

Mean 

Incremental 

Test Duration 

(Hr) 

No. of BWR 

outages 

with Code 

Case 795-1 

inspections 

Mean ShortTerm 

Replacement 

Power Cost 

(S/Hr) 

Mean Short-Term Replacement Power 

Cost (2016 $) 

Undiscounted 7% NPV 3% NPV 

2017 0.75 7 $43,533 ($228,550) ($213,598) ($221,893)

2018 0.75 7 $43,533 ($228,550) ($199,624) ($215,430)

2019 0.75 6 $43,533 ($195,900) ($159,913) ($179,276)

2020 0.75 6 $43,533 ($195,900) ($149,451) ($174,055)

2021 0.75 6 $43,533 ($195,900) ($139,674) ($168,985)

Total Cost ($1,044,800) ($862,260) ($959,639)

Table 7 shows that industry would incur a total cost, due to short-term replacement power, that 

ranges from ($862,000) using a 7-percent discount rate to ($960,000) using a 3-percent 

discount rate. 
33 

5.5. Industry Implementation 

The NRC staff estimates that updating 10 CFR 50.55a to conform to OFR’s guidance on 

incorporation by reference required by Alternative 2 would result in administrative revisions to 

update technical material and references for an estimated 50 plant procedures for each nuclear 

reactor unit. The NRC staff estimates that this one-time cost to revise, review, approve, and 

issue these procedures would occur in year 2016 and would require five hours per procedure. 

The best estimate for the total industry implementation cost of this change is provided in Table 

8. The estimates below also include the resources required to implement the procedure 

changes affected by the conditioned Code Cases. The NRC staff estimates the industry 

implementation cost for 61 operating nuclear power plant sites would incur a cost of 

($1.93 million). 

For Code Case N-666-1, the acceptance of the weld overlay as part of the pre-service exam 

results in a one-time industry implementation cost of ($25,000) shown in Table 8. 

The total industry implementation costs are ($1,96 million). 

Table 8 Industry Implementation Costs 

Year Activities 

No. of 

Reactor 

Sites 

No. of Procedures 

per Reactor Site 

No. of 

Hours 

Labor 

Rate 

One-Time 

Implementation 

Cost 

2016 

Revise plant procedure 

to incorporate revised 

references 

61 50 5 $127 ($1,933,000) 

Perform Code Case 

N-666-1 test 61 -- 3.3 $127 ($25,000) 

Total ($1,958,000) 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars 

A hypothetical new reactor that begins commercial operation after year 2016 would issue its 

initial ISI and IST procedures with the updated references and would incur no incremental costs. 

5.6. Industry Operation 

The use of ASME BPV and OM Code Cases is beneficial to NRC nuclear power plant licensees 

and applicants for several reasons. Licensees and applicants may use Code Cases 

immediately following NRC approval. In addition, Code Cases are stand-alone alternatives to 

specific provisions contained in the ASME Code, which makes their implementation 

straightforward. Hence, a Code Case is a good tool for introducing the use of advanced 
34 

techniques, procedures, and measures on a trial basis to gain experience prior to the 

incorporation of the alternatives into the ASME Code and the NRC approval of the later editions 

and addenda. This experience is used to either refine or reject the new provisions. Code 

Cases are also suited for use in areas where the application of risk-informed principles indicates 

that there are too many examinations or tests or that occupational exposure can be reduced. 

Alternative 2 has the advantage that, on implementation of the final rule, licensees and 

applicants would be able to use the Code Cases that the NRC approved through the revised 

regulatory guides compared to Alternative 1. Therefore under Alternative 2, licensees and 

applicants would be permitted to apply the Code Cases listed in the subject regulatory guides 

without the need to seek NRC approval through a request for use of alternatives under 

10 CFR 50.55a(z). 

5.6.1. Averted Costs from Code Case Alternative Request Submittals 

Submission of an alternative request to the NRC can be expensive. Once ASME issues a Code 

Case, the licensee or applicant must make a determination as to the applicability of the Code 

Case to its facility and the benefit derived therein. If the licensee or applicants determine that 

use of the Code Case would be beneficial and it has not been approved by the NRC, a request 

for the use of the Code Case alternative must be prepared, and appropriate levels of licensee or 

applicant management must review and approve the request prior to submission to the NRC. A 

review of Code Case alternate requests submitted to the NRC over the last five years identified 

that these submittals ranged from a few pages to several hundred pages with an average length 

of approximately 32 pages with average technical complexity. Therefore, the NRC staff 

estimates that a Code Case alternative request submittal requires an average of 300 hours of 

effort to develop the technical justification and an additional 80 hours to perform research, 

review, approve, process, and submit the document to the NRC for use of alternatives under 

10 CFR 50.55a(z). The NRC assumes that licensees or applicants would decide whether an 

alternative request should be sought by weighing the cost against the benefit to be derived. In 

some cases, licensees may decide to forfeit the benefits of using a Code Case, whether in 

terms of radiological considerations or burden reduction. 

A review of past Code Case alternative request submittal has determined that plant owners 

submit a Code Case alternative request that covers multiple units and multiple plant sites. The 

NRC staff currently receives approximately 30 Code Case alternative request submittals each 

year for the last five years. If Alternative 2 is not adopted to incorporate by reference the 

allowable Code Cases, the NRC estimates that, on average, the number of Code Case 

alternative request submittals may increase until the Code Case is incorporated by ASME into a 

new edition of the BPV Code and the OM Code. The NRC staff estimates that incorporation of 

Code Cases would occur within two cycles of issuing a new edition of the Code or within 

six years. Under Alternative 2, a licensee of a nuclear power plant would no longer be required 

to submit a Code Case alternative request under the new 10 CFR 50.55a(z) which would 

provide a net benefit (i.e., averted cost) to the licensee. As shown in Table 9, the 

implementation of Alternative 2 would result in 30 additional Code Case alternative request 

submittals for Code Cases N-666-1 and N-789 and 12 Code Case alternative request submittals 
35 

for N-795 for a total of 42 alternative requests that would not need to be prepared annually 

under 10 CFR 50.55a(z). The NRC estimates the averted costs from preparing the Code Case 

alternative request submittals would range from $8.36 million using a 7-percent discount rate to 

$9.34 million using a 3-percent discount rate. 

Table 9 Averted Industry Operation Costs 

Year 

Alternative 

Request 

Submittals 

Hours 

per 

Submittal 

Labor 

Rate 

Averted Industry Operation Costs (2016 dollars)

Undiscounted 7% NPV 3% NPV 

2017 42 380 $127 $2,038,968 $1,905,578 $1,979,581 

2018 42 380 $127 $2,038,968 $1,780,914 $1,921,923 

2019 42 380 $127 $2,038,968 $1,664,406 $1,865,945 

2020 42 380 $127 $2,038,968 $1,555,519 $1,811,597 

2021 42 380 $127 $2,038,968 $1,453,756 $1,758,832 

Total $10,190,000 $8,360,000 $9,340,000 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars 

As shown in Table 10, new reactors submitting a Code Case alternative request in the first few 

year after commencing commercial operation beginning in year 2020 would incur a cost that 

ranges from $74,200 using a 7-percent discount rate to $85,700 using a 3-percent discount rate, 

yielding a net positive savings. 

Table 10 Averted Industry Operation Costs for Hypothetical Reactor Code Case Alternative 

Request Submittal 

Year Activities 

Alternative 

Request 

Submittals 

Hours 

per 

Submittal 

Labor 

Rate 

Averted Cost Per Year (2016 dollars) 

Undiscounte

d 7% NPV 3% NPV 

2022 

Average Annual 

Code Case 

alternative 

request 

preparation, 

submission, and 

conforming 

changes 

1 380 $127 $48,165 $32,094 $40,337 

2024 1 380 $127 $48,165 $42,069 $45,400 

Total $96,300 $74,200 $85,700 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars 

Although incorporating the most recent regulatory guides listing NRC-approved Code Cases by 

reference into the Code of Federal Regulations is expected to decrease industry operation 

costs, the NRC has not received data from licensees or applicants stating the number of 

planned ASME Code Case alternative request submittals that would no longer be necessary. 
36 

Because of such uncertainty in these quantifiable industry operation costs, the NRC made 

conservative estimates on the number of alternative request submittals averted and the amount 

of industry resources that would have been otherwise required to prepare these submittals. As 

a result, if the NRC-approved Code Cases considered in this analysis are not useful to the 

affected licensees and applicants, then the averted operation costs presented in Table 9 and 

Table 10 are overstated.

5.6.2. Conditioned Code Cases Costs 

Code Cases with conditions may have additional incremental costs compared to the NRC 

approval of Code Cases without conditions. Section 4.2.12 of this regulatory analysis provides 

an overview of the conditioned Code Cases and the incremental increase in estimated labor 

requirements for meeting those conditioned Code Cases compared to approved Code Cases 

without conditions. Code Cases N-666-1, N-638-6, N-789 and OMN-19 would require 

resources from all NRC licensees, while Code Case N-795 is applicable only to BWRs, and 

N-799 is applicable only to new reactors. Table 11 through Table 15 show the incremental 

industry implementation costs of the conditioned Code Cases. 

Table 11 Incremental Industry Operations Costs for Conditioned Code Case N-638-6 

(Operating Reactors only) 

Year Conditioned Code Case N-638-6 Costs (2016 dollars) 

Undiscounted 7% discount 3% discount 

2017 ($309,267) ($289,035) ($300,260) 

2018 ($314,337) ($274,554) ($296,293) 

2019 ($309,267) ($252,454) ($283,024) 

2020 ($314,337) ($239,807) ($279,285) 

2021 ($309,267) ($220,503) ($266,777) 

Total ($1,556,000) ($1,276,000) ($1,426,000) 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars 
37 

Table 12 Incremental Industry Operations Costs for Conditioned Code Case N-789 

(Operating Reactors only) 

Year Conditioned Code Case N-789 Costs (2016 dollars) 

Undiscounted 7% discount 3% discount 

2017 ($152,716) ($142,725) ($148,268) 

2018 ($152,716) ($133,388) ($143,949) 

2019 ($152,716) ($124,661) ($139,756) 

2020 ($149,760) ($114,251) ($133,060) 

2021 ($149,760) ($106,777) ($129,184) 

Total ($758,000) ($622,000) ($694,000) 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars 

Industry would incur an operating cost to implement Code Case N-795 for the testing and 

inspection of noninsulated components. This Code Case condition requires a hold time of one 

hour, which is 45 minutes longer than required by the current Code Case. The NRC staff 

estimates that this requirement adds 45 minutes to repair and replacement activities. The 

incremental labor cost is provided in Table 13. 

Table 13 Incremental Operations Costs for Conditioned Code Case N-795 (Operating BWRs) 

 Conditioned Code Case N-795 (2016 dollars) 

Year 

No. of Code Case 795-1 

inspections 

Undiscounted 7% discount 3% discount 

2017 7 ($665) ($622) ($646) 

2018 7 ($665) ($581) ($627) 

2019 6 ($570) ($466) ($522) 

2020 6 ($570) ($435) ($507) 

2021 6 ($570) ($407) ($492) 

Total ($3,000) ($2,500) ($2,800) 

 * There may be discrepancies in calculations due to rounding. 

** Short-term replacement power costs are addressed in Section 5.4. 

*** All values are in 2016 dollars 

Table 14 Incremental Operations Costs for Conditioned Code Case N-799 for a Hypothetical 

New Reactor 

Year Conditioned Code Case N-799 (2016 dollars) 

Undiscounted 7% discount 3% discount 

2019 ($2,957) ($2,414) ($2,707) 

2020 ($2,957) ($2,256) ($2,628) 

2021 ($2,957) ($2,109) ($2,551) 

2022 ($2,957) ($1,971) ($2,477) 
38 

Year Conditioned Code Case N-799 (2016 dollars) 

Undiscounted 7% discount 3% discount 

2023 ($2,957) ($1,842) ($2,405) 

Total ($14,800) ($10,600) ($12,800) 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars 

Code Case OMN-19 provides for an alternative upper limit level for a comprehensive pump test. 

For this Code Case, work packages for periodic pump verification tests would need to be 

written. The NRC staff estimates that each work package would require a plant engineer 

40 labor hours to prepare and issue. Additionally, 16 engineering hours would be required to 

update plant test procedures and an additional 16 engineering hours would be required to 

determine test points and inspection requirements to perform the initial test. The NRC staff 

estimates that one-half labor hour is required to test each pump. The NRC staff estimates that 

this periodic pump verification would apply to 21 pumps per unit. The NRC staff assumes that 

the work packages and test procedures would be prepared in 2019 and initial comprehensive 

pump testing would be completed by half of the units in year 2019 with the remaining tests 

completed in year 2020. The periodic pump tests are performed every two years. The NRC 

staff estimates that four hours are required to prepare each subsequent periodic test work 

package and 0.5 hours are required to test each pump. Table 15 provides the estimates of the 

industry costs for conditioned Code Case OMN-19. The estimated industry implementation and 

operation costs range from ($37,000) using a 7-percent discount rate to ($42,000) using a 

3-percent discount rate. 

Table 15 Incremental Industry Costs for Conditioned Code Case OMN-19 for New Reactors 

 Industry Cost (2016 dollars) 

Year Activity No. of 

items 

No. of 

hours 

Labor 

Rate 

No. of 

units Undiscounted 7% 

discount 

3% 

discount 

2019 

Prepare work 

package and 

test procedures 

1 72 $127 4 ($36,504) ($29,798) ($33,406)

2019 Initial pump test 21 0.5 $127 2 ($2,662) ($2,173) ($2,436) 

2020 Initial pump test 21 0.5 $127 2 ($2,662) ($2,031) ($2,365) 

2021 

Prepare 

subsequent 

work package 

1 4 $127 2 ($1,014) ($723) ($875) 

2021 Recurring pump 

test 21 0.5 $127 2 ($2,662) ($1,898) ($2,296) 

2022 

Prepare 

subsequent 

work package 

1 4 $127 2 ($1,014) ($676) ($849) 

2022 Recurring pump 

test 21 0.5 $127 2 ($2,662) ($1,774) ($2,229) 

2023 

Prepare 

subsequent 

work package 

1 4 $127 2 ($1,014) ($631) ($824) 
39 

 Industry Cost (2016 dollars) 

Year Activity No. of 

items 

No. of 

hours 

Labor 

Rate 

No. of 

units Undiscounted 7% discount 

3% 

discount 

2023 Recurring pump 

test 2 4 $127 2 ($2,028) ($1,263) ($1,649) 

2024 

Prepare 

subsequent 

work package 

1 4 $127 2 ($1,014) ($590) ($800) 

2024 Recurring pump 

test 21 0.5 $127 2 ($2,662) ($1,549) ($2,101) 

Total ($47,000) ($37,000) ($42,000)

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars 

*** Tests for OMN-19 are performed every 2 years 

5.6.3. Total Industry Operations Costs 

As shown in Table 16, industry would have averted costs of between $3.53 million using a 

7-percent discount rate to $3.98 million using a 3-percent discount rate. The average unit 

averted cost is approximately $38,000. 

Table 16 Industry Cost Summary 

Cost attribute Labor 

Occupational 

Health 

(Routine) 

Replacement 

Power Undiscounted 7% NPV 3% NPV 

One-time 

implementation ($1,932,922) ($1,932,922) ($1,932,922) ($1,932,922) 

Averted 

Alternative 

requests 

$10,190,000 $10,190,000 $8,360,000 $9,340,000 

Code Case 

N-638-6 ($1,556,477) ($93,189) ($1,649,666) ($1,352,832) ($1,511,018) 

Code Case 

N-666-1 ($25,491) ($25,491) ($25,491) ($25,491) 

Code Case 

N-789 ($757,666) ($183,417) ($941,083) ($772,211) ($862,216) 

Code Case 

N-795 ($3,042) ($1,044,800) ($1,047,842) ($864,771) ($962,433) 

Code Case 

N-799 ($29,600) ($355) ($29,955) ($21,491) ($25,825) 

Code Case 

OMN-19 ($46,517) ($46,517) ($37,298) ($42,227) 

Total $4,516,524 $3,352,986 $3,977,869 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars

5.7. NRC Implementation 

To implement Alternative 2, the NRC incurs a cost in relation to Alternative 1 for developing the 

final rule and the associated regulatory guides. The NRC staff estimates that the development 

of the final rule would require 1,110 hours and the update of the three supporting regulatory 
40 

guides would require 1,180 hours in year 2016. Table 17 shows the estimated cost for 

developing and issuing the final rule and associated regulatory guides is $294,000 

(2016 dollars). 

Table 17 NRC Implementation Costs 

Year Activities 

Hours 

per 

action 

Labor 

rate 

NRC Implementation 

Cost (2016 dollars) 

2016 Develop and issue final Rule and RGs 

1.84, 1.147, and 1.193 2360 $124 ($293,615) 

Total ($294,000) 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars

5.8. NRC Operation 

When the NRC receives a Code Case alternative request, the NRC requires additional NRC 

staff time to evaluate the acceptability of the request relative to the criteria currently NRC 

approved. Under Alternative 2, the NRC would not receive any averted Code Case alternative 

request submittals. As shown in Table 18, the NRC estimates that each Code Case alternative 

request submittal requires 90 hours to perform the technical review including resolving technical 

issues and 30 hours to document the evaluation and respond to the licensee on their request. 

The cost, results in an NRC averted cost of approximately $2.42 million using a 7-percent 

discount rate to $2.81 million using a 3-percent discount rate. 

Table 18 NRC Operation Costs 

Year 

Averted 

Alternative 

Request 

Submittals 

Hours per 

Submittal Labor Rate 

Averted Industry Operation Costs 

(2016 dollars) 

Undiscounted 7% NPV 3% NPV 

2018 42 120 $124 $632,020 $552,031 $595,739 

2019 42 120 $124 $632,020 $515,916 $578,388 

2020 42 120 $124 $632,020 $482,165 $561,541 

2021 42 120 $124 $632,020 $450,621 $545,186 

2022 42 120 $124 $632,020 $421,141 $529,307 

Total $3,160,000 $2,422,000 $2,810,000 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars

As shown in Table 19, industry submitting Code Case alternative requests for new reactors after 

commencing commercial operation in year 2020 would incur an NRC review cost in the 

following year. Consistent with the assumptions made in Section 5.6.1, the NRC staff estimates 

an averted operating costs for new reactors that range from $22,300 using a 7-percent discount 
41 

rate to $26,200 using a 3-percent discount rate, yielding a net savings for each Code Case 

alternative request submittal review. 

Table 19 Averted NRC Operation Costs for New Reactor ASME Code Case Alternative 

Request Submittal 

Year 

Averted 

Alternative 

Request 

Submittals 

Hours per 

Submittal Labor Rate 

Averted NRC Operation Costs 

(2016 dollars) 

Undiscounted 7% discount 3% discount 

2023 1 120 $124 $14,930 $9,297 $12,139 

2025 1 120 $124 $14,930 $13,040 $14,073 

Total $22,300 $26,200 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars

5.8.1. NRC Operation Averted Cost Sensitivity 

Although incorporating the most recent regulatory guides listing NRC-approved Code Cases by 

reference into the Code of Federal Regulations could decrease NRC operation costs, the NRC 

has not received data from licensees stating the number of planned ASME Code Case 

alternative request submittals that would no longer be necessary. Because of such uncertainty 

in the reduced number of planned ASME Code Case alternative request submittals, the NRC 

made what we consider to be conservative estimates on the number of Code Case alternative 

request submittals avoided and the amount of NRC resources that would have been otherwise 

required to review these submittals. The NRC estimates are just that-estimates. Only industry 

feedback or empirical testing can prove these estimates to be sound. As a result, if the 

NRC-approved Code Cases considered in this analysis are not useful to the affected licensees 

and are not used, than the potential averted NRC operation costs presented in Table 18 and 

Table 19 are overstated. 

5.9. Improvements in Knowledge 

Alternative 2 relative to the regulatory baseline (Alternative 1) would improve knowledge by 

industry and NRC staff by gaining experience with new technology prior to incorporation into the 

ASME Code, and permitting licensees to use advancements in ISI and IST. Developing greater 

knowledge and common understanding of the Code plus eliminating unnecessary work better 

enables industry and NRC staff to produce desired on-the-job results, which leads to pride in 

performance and increased job satisfaction. 

5.10. Regulatory Efficiency 

Alternative 2 relative to the regulatory baseline (Alternative 1) would increase regulatory 

efficiency, as licensees that wish to use NRC-approved ASME Code Cases would not require 

alternative requests from NRC regulations. This would provide licensees with flexibility and 
42 

would decrease licensee’s uncertainty when making modifications or preparing to perform ISI or 

IST. Further, Alternative 2 is consistent with the provisions of the NTTAA, which encourages 

Federal regulatory agencies to consider adopting voluntary consensus standards as an 

alternative to de novo agency development of standards affecting an industry. Alternative 2 is 

also consistent with NRC’s policy of evaluating the latest versions of consensus standards in 

terms of their suitability for endorsement by regulations and regulatory guides. Finally, 

Alternative 2 is consistent with NRC’s goal to harmonize with international standards to improve 

regulatory efficiency for both the NRC and international standards groups. 

5.11. Disaggregation 

In order to comply with the guidance in Section 4.3.2, “Criteria for the Treatment of Individual 

Requirements,” of the Regulatory Analysis Guidelines (Ref. 11), the NRC performed a 

screening review to determine if any of the individual requirements (or set of integrated 

requirements) of the final rule would be unnecessary to achieve the objectives of the 

rulemaking. The NRC determined that the objectives of the rulemaking are to incorporate by 

reference regulatory guides and make conforming changes. Furthermore, the NRC concludes 

that each of the proposed rule’s requirements would be necessary to achieve one or more 

objectives of the rulemaking. The results of this determination are set forth in Table 20. 

Therefore, the NRC did not disaggregate and evaluate individual requirements in this 

rulemaking. 

Table 20 Disaggregation Evaluation for the Proposed Rule 

Regulatory Goals for Final Rule 

1) Approve for use 

the new Code Cases 

in each of the 

regulatory guides 

2) Make incorporation by 

reference conforming 

changes 

10 CFR 50.55a(a)(3)(i) NRC Regulatory 

Guide 1.84, Revision 37 X X 

10 CFR 50.55a(a)(3)(ii) NRC Regulatory 

Guide 1.147, Revision 18 X X 

10 CFR 50.55a(a)(3)(iii) NRC Regulatory 

Guide 1.192, Revision 2 X X 

5.12. Uncertainty Analysis 

To determine the robustness of the net benefit estimates, the NRC staff examined how the 

values estimated for benefits and costs change due to uncertainties associated with the staff’s 

analytical assumptions and input data. The NRC used Monte Carlo simulation to examine the 

impact of uncertainty on the estimated net benefits. The NRC staff performed Monte Carlo 

simulations using the @Risk software package by Palisade Corporation.14

 

14 Information about this software is available online at www.palisade.com. 
43 

Monte Carlo simulations involve introducing uncertainty into the analysis by replacing the point 

estimates of the variables used to estimate costs and benefits with probability distributions. By 

defining input variables as probability distributions as opposed to point estimates, the effect of 

uncertainty on the results of the analysis (i.e., the net benefits) can be modeled. 

The probability distributions chosen to represent the different variables in the analysis were 

bounded by the range of estimates collected and the NRC staff’s professional judgment. These 

distributions have mean values calculated from the low, medium and high estimates. These 

estimates, mean values, and assigned distributions are provided in Appendix B. 

When defining the probability distributions for use in the Monte Carlo simulation, other summary 

statistics besides the mean value are needed to characterize the distributions. These other 

summary statistics include the standard deviation of a distribution with a normal shape, or the 

minimum and maximum of a PERT15 distribution. For these distributions, the NRC staff used 

collected input to set the minimum and maximum values of the PERT distributions. 

Lastly, the NRC selected the output variables for the Monte Carlo simulations, which were the 

estimated net benefits. 

5.12.1. Uncertainty Analysis Results 

Ten thousand simulations were run. Figures 1 through 7 display the histograms of the realized 

benefits and costs. The analysis showed that industry would realize averted costs (savings) 

operation costs. By allowing uncertain assumptions and inputs to range across a distribution, 

the results are no longer static and instead spread across a range with varying degrees of 

certainty. In Figure 1, the analysis indicates that 90 percent of the time the simulation model 

was run (out of 10,000 times) the industry implementation costs ranged from ($2.552 million) to 

($1.456 million). In some iterations, the model did result in an estimated industry 

implementation cost as low as ($3.32 million) and as high as ($1.09 million), with a mean value 

of ($1.96 million). 

 

15 A Program Evaluation and Review Technique (PERT) distribution is a special form of the beta distribution with a 

minimum and maximum value specified. The shape parameter is calculated from the defined most likely value. 

The PERT distribution is similar to a Triangular distribution, in that it has the same set of three parameters. 

Technically, it is a special case of a scaled Beta (or Beta General) distribution. It can generally be considered as 

superior to the Triangular distribution when the parameters result in a skewed distribution, as the smooth shape 

of the curve places less emphasis in the direction of skew. Similar to the triangular distribution, the PERT 

distribution is bounded on both sides, and therefore may not be adequate for some modelling purposes where it 

is desired to capture tail or extreme events. 
44 

Figure 1 Industry Implementation Costs 

Figure 2 NRC Implementation Costs 
45 

Figure 3 Industry Operations Costs (7% Discount Rate) 

Figure 4 Industry Operations Averted Costs (3% Discount Rate) 

5.0% 90.0% 5.0%

4.63 8.40

3 4 5 6 7 8 9 10 11 12

Values in Millions ($)

5.0% 90.0% 5.0%

5.17 9.38

3 4 5 6 7 8 9 10 11 12 13

Values in Millions ($)
46 

Figure 5 NRC Operations Averted Costs (7% Discount Rate) 

Figure 6 NRC Operations Costs Averted (3% Discount Rate) 

5.0% 90.0% 5.0%

2.059 2.811

.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40

Values in Millions ($)

5.0% 90.0% 5.0%

2.412 3.290

2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00

Values in Millions ($)
47 

Figure 7 Total (7% Discount Rate) 

Figure 8 Total (3% Discount Rate) 

5.0% 90.0% 5.0%

3.82 7.35

2 3 4 5 6 7 8 9 10 11

Values in Millions ($)

5.0% 90.0% 5.0%

4.63 8.65

2 3 4 5 6 7 8 9 10 11 12

Values in Millions ($)
48 

Table 21 Uncertainty Results Descriptive Statistics 

Uncertainty Result Min Mean Mode Median Max 5% 95% 

Industry 

Implementation 

(One-Time) 

($3.32) ($1.96) ($1.74) ($1.93) ($1.09) ($2.55) ($1.46) 

NRC 

Implementation 

(One-Time) 

($0.36) ($0.29) ($0.29) ($0.29) ($0.23) ($0.33) ($0.27) 

Industry Operation 

(7% Discount Rate) $3.48 $6.37 $5.88 $6.29 $11.18 $4.63 $8.40 

Industry Operation 

(3% Discount Rate) $3.89 $7.02 $6.60 $7.02 $12.49 $5.17 $9.38 

NRC Operation 

(7% Discount Rate) $1.79 $2.42 $2.39 $2.41 $3.25 $2.06 $2.81 

NRC Operation 

(3% Discount Rate) $2.09 $2.84 $2.79 $2.82 $3.80 $2.41 $3.29 

Net Benefit (Cost) 

(7% Discount Rate) $2.30 $5.48 $5.56 $5.42 $10.06 $3.82 $7.35 

Net Benefit (Cost) 

(3% Discount Rate) $2.93 $6.52 $5.82 $6.44 $11.71 $4.63 $8.65 

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 million dollars). 

Figures 9 and 10 show a Tornado Diagram, which identifies the factors whose uncertainty 

drives the largest impact on total costs (and averted costs) for this rulemaking. The uncertainty 

regarding the number of hours required to prepare and disposition an alternative request, the 

range in industry labor rates, and the number of alternative requests averted drive the largest 

amount of uncertainty in the costs (and averted costs) of the rulemaking. The rest of the 

variables in Figures 9 and 10 show diminishing variation with respect to the net benefit mean 

value for this proposed regulatory action. 
49 

Figure 9 Net Benefit (Cost) Tornado Diagram based on 7-percent Discount Rate – Inputs 

Ranked by Effect on Output Mean 

Figure 10 Net Benefit (Cost) Tornado Diagram based on 3-percent Discount Rate – Inputs 

Ranked by Effect on Output Mean 

5.12.2. Summary of Uncertainty Analysis 

A Monte Carlo analysis found that amending the proposed rule would result in a positive net 

benefit (e.g., savings) for all 10,000 simulations using either a 7-percent or a 3-percent discount 

rate. Given the uncertainties involved in obtaining these estimates, there is a reasonable basis 

for concluding that there is high reliability in an NRC finding that the proposed rule represents a 

socially efficient use of resources. 
50 

5.13. Independent Cost Estimate 

In December 2014, the United States Government Accountability Office (GAO) published 

GAO-15–98, “Nuclear Regulatory Commission—NRC Needs to Improve Its Cost Estimates by 

Incorporating More Best Practices” (Ref. 27). The GAO report examined the extent to which 

NRC’s cost estimating procedures support development of reliable cost estimates and follow 

specific best practices that are identified in GAO–09–3SP, “GAO Cost Estimating and Managing 

Capital Program Costs.” As a result of this audit, the GAO recommended that NRC align its 

cost estimating procedures with relevant cost estimating best practices stated in GAO–09–3SP 

(Ref. 28) in an effort to ensure that the future cost estimates of NRC are prepared in accordance 

with relevant cost estimating best practices. Additionally the GAO recommended that the NRC 

demonstrate credibility in its cost estimates by cross-checking their results with independent 

cost estimates (ICEs) that are developed by others and conducting sensitivity analysis to 

identify variables most affecting cost estimates (i.e. cost drivers). 

In response to the GAO concerns and recommendations, the NRC tasked the Center for 

Nuclear Waste Regulatory Analyses (CNWRA) to perform an ICE for this proposed regulatory 

actions. The same cost estimating procedures that NRC staff uses (e.g., NUREG/BR-0058 and 

NUREG/BR-0184) were used, but the methods and techniques employed by CNWRA were 

independent of those used by the NRC staff. The results of both efforts were compared and the 

draft NRC regulatory analysis was revised to incorporate the following changes: 

• removed the incremental cost of Code Case N-666-1 and converted that to a one time 

cost, 

• added the electric power replacement cost due to shutdown of a nuclear unit for repair 

and maintenance, 

• added the cost impact due to routine occupational radiation dose, 

• added pump verification test costs to the OMN Code Cases, and 

• inputs (i.e., the number of labor hours and number of weld examinations) for generating 

the cost uncertainty statistics were revised. 

Based on the ICE input, the NRC staff updated the regulatory analysis to incorporate these 

changes. The impact on the estimated costs are summarized in Table 22. 
51 

Table 22 Regulatory Analysis Estimate Changes for Alternative 2 

Attribute 

Net Benefit (Costs) (7% NPV) 

Pre-ICE NRC 

estimate 

(A) 

Revised NRC 

estimate 

(B) 

Percent change

(A-B)/A 

Industry Implementation ($1,478,000) ($1,932,922) -31% 

Industry Operation $5,560,000 $6,375,346 -15% 

Occupational Health (Routine) ($227,178) NMa

Replacement Power Cost ($862,260) NM 

Total Industry Costs $4,080,000 $3,352,986 18% 

NRC Implementation ($640,000) ($293,615) 54% 

NRC Operation $2,734,000 $2,444,212 11% 

Total NRC Cost $2,090,000 $2,150,597 -2% 

Net Benefit $6,176,000 $5,503,582 11% a Not meaningful 

5.14. Summary 

This regulatory analysis identifies and integrates both quantifiable and nonquantifiable benefits 

and costs that would emerge from incorporating the most recent regulatory guides listing 

NRC-approved Code Cases by reference into the Code of Federal Regulations, in order to 

determine a net integrated benefit-cost figure. 

5.14.1. Quantified Net Benefit 

As shown in Table 23, the estimated total net benefit for Alternative 2 relative to the regulatory 

baseline over the six year time frame of the alternative, the quantitative benefit outweigh the 

costs by a range from approximately $5.5 million (7-percent NPV) to $6.5 million 

(3-percent NPV). 
52 

Table 23 Total Net Benefits and Costs for Alternative 2 

Attribute Total Averted Costs (Costs) 

Undiscounted 7% NPV 3% NPV 

Industry Implementation ($1,932,922) ($1,932,922) ($1,932,922)

Industry Operation $7,771,207 $6,375,346 $7,124,134

Occupational Health (Routine) ($276,961) ($227,178) ($253,704)

Replacement Power Cost ($1,044,800) ($862,260) ($959,639)

Total Industry Costs $4,516,524 $3,352,986 $3,977,869

NRC Implementation ($293,615) ($293,615) ($293,615)

NRC Operation $3,189,958 $2,444,212 $2,836,372

Total NRC Cost $2,896,342 $2,150,597 $2,542,757

Net Benefit $7,412,867 $5,503,582 $6,520,626

* There may be discrepancies in calculations due to rounding. 

** All values are in 2016 dollars

5.14.2. Nonquantified Benefits 

In addition to averted costs from the elimination of planned ASME Code Case alternative 

request submittals, public health (accident), occupational health (accident and routine), 

regulatory efficiency, and increase of knowledge produce a number of nonquantifiable benefits 

for industry and the NRC. For example, advancements in ISI and IST may provide an 

incremental reduction of the likelihood of a radiological accident, incrementally decrease the 

likelihood of post-accident plant worker exposure, and incrementally decrease plant worker 

radiological exposures during routine inspections or testing. Four nonquantifiable benefits from 

regulatory efficiency are that Alternative 2 would provide: 

1) licensees with flexibility and would decrease licensee’s uncertainty when making 

modifications or preparing to perform ISI or IST; 

2) consistency with the provisions of the NTTAA, which encourages Federal regulatory 

agencies to consider adopting voluntary consensus standards as an alternative to de 

novo agency development of standards affecting an industry; 

3) consistency with the NRC’s policy of evaluating the latest versions of consensus 

standards in terms of their suitability for endorsement by regulations and regulatory 

guides; and 

4) consistency with the NRC’s goal to harmonize with international standards to improve 

regulatory efficiency for both the NRC and international standards groups. 

This consistent application resulting from the incorporation by reference of the latest revisions of 

three regulatory guides that include NRC-approved Code Cases into the Code of Federal 

Regulations provides this significant gain in the consistent application of these Code Cases and 

the consistency with the provisions of the NTTAA and the harmonizing with international 

standards. The NRC staff believes that NRC’s timely review and approval of Code Cases 
53 

maintains NRC’s role as an effective industry regulator that would otherwise be undetermined if 

outdated material would remain incorporated by reference in the Code of Federal Regulations. 

Furthermore, the opportunity for staff to improve their knowledge results in increased job 

satisfaction. Developing greater knowledge and common understanding of the Code plus 

eliminating unnecessary work better enables industry and NRC staff to produce desired 

on-the-job results, which leads to pride in performance and increased job satisfaction. 

5.14.3. Nonquantified Costs 

As discussed in sections 5.6.1 and 5.8.1, the NRC staff believes that incorporation by reference 

the most recent RGs that list NRC-approved Code Cases into the Code of Federal Regulations

would decrease industry and NRC operation costs. If the NRC staff underestimated the number 

of or the complexity of these eliminated submittals, than the averted costs would increase 

proportionally, causing the quantified net cost of Alternative 2 to decrease. 

5.15. Safety Goal Evaluation 

The proposed rule alternative (Alternative 2) would allow licensees and applicants to apply 

voluntarily NRC-approved Code Cases, sometimes with NRC-specified conditions, listed in 

three regulatory guides that are proposed to be incorporated by reference into 10 CFR 50.55a. 

The NRC’s safety goal evaluation is applicable only to regulatory initiatives considered to be 

generic safety enhancement backfits subject to the substantial additional protection standard at 

10 CFR 50.109(a)(3). The NRC does not regard the approval of ASME Code Cases by 

rulemaking to be backfitting (the basis for this determination is set forth in the Federal Register

notice of proposed rulemaking to amend 10 CFR 50.55a). Therefore, a safety goal evaluation is 

not needed for this regulatory analysis. 

6. Decision Rationale 

Table 24 provides the quantified and nonquantified costs and benefits for 

Alternative 2 – incorporating by reference into 10 CFR 50.55a the latest revision of the 

regulatory guides listing Code Cased newly approved for use by the NRC. For the quantitative 

analysis, the best estimate values are used. 

Table 24 Summary of Totals 

Net Monetary Savings (or Costs) – Total 

Present Value 

Non-Monetary Benefits or (Costs) 

Alternative 1: No Action

$0 None 

Alternative 2: Incorporate by Reference NRC-Approved ASME BPV and OM Code Cases 

Industry: 

$3,352,986 using a 7% discount rate 

$3,977,869 using a 3% discount rate 

NRC: 

Non-Monetary Benefits: 

• Public Health (Accident) – the likelihood of a 

radiological accident may be reduced by allowing for 

advancements in ISI and IST that may result in 

earlier identification of material degradation that if 
54 

Net Monetary Savings (or Costs) – Total 

Present Value 

Non-Monetary Benefits or (Costs) 

$2,150,597 using a 7% discount rate 

$2,542,757 using a 3% discount rate 

Net Benefit (Cost): 

$5,503,582 using a 7% discount rate 

$6,520,626 using a 3% discount rate 

The quantified results show that 

Alternative 2 is cost-beneficial. 

undetected could result in further degradation that 

eventually results in a plant transient. 

• Occupational Health (Accident) – advancements in 

ISI and IST may result in an incremental decrease in 

the likelihood of an accident resulting in postaccident worker exposure. 

• Improvement in Knowledge – gain experience with 

new technology and ISI and IST advancements. 

On-the-job learning increases worker satisfaction. 

Eliminating unnecessary work better enables staff to 

produce desired on-the-job results, which leads to 

pride in performance and increased job satisfaction. 

• Regulatory Efficiency – licensees that wish to use 

NRC-approved ASME Code Cases would not 

require exemptions from NRC regulations. This 

practice is consistent with: 

 the provisions of the NTTAA 

 with NRC policy of evaluating the latest versions 

of consensus standards in terms of their 

suitability for endorsement by regulations and 

regulatory guides 

 with NRC’s goal to harmonize with international 

standards to improve regulatory efficiency for 

both the NRC and international standards 

groups 

Non-Monetary Costs: Industry and NRC Operation 

Costs – If the number of planned industry submittals or 

the effort to prepare these submittals are less than the 

NRC assumes within the regulatory analysis, than the 

averted quantified costs are overstated. 

The NRC staff’s evaluation of nonquantitative benefits 

and costs show that Alternative 2 is justified. 

The staff recommends Alternative 2. As shown in Table 24, Alternative 2 relative to the 

regulatory baseline is cost beneficial and would result in a net averted cost to the industry from 

$3.35 million (7-percent NPV) to a $3.98 million (3-percent NPV). Relative to the regulatory 

baseline, the NRC would realize a net benefit of $2.15 million (7-percent NPV) to $2.54 million 

(3-percent NPV) in net benefits. The estimated net benefit is $5.5 million (7-percent NPV) to 

$6.5 million (3-percent NPV). Alternative 2 is also justified when considering the non-monetized 

considerations. Alternative 2 has the benefit of meeting the NRC goal of ensuring the protection 

of public health and safety and the environment through the NRC’s approval of new ASME 

Code Cases that allow the use of the most current methods and technology. In addition, this 

alternative would help ensure that the NRC’s actions are effective, efficient, realistic, and timely 

by eliminating the need for the NRC review of plant-specific alternative requests. This 

alternative would also support the NRC’s goal of maintaining an open regulatory process 
55 

because approving ASME Code Cases demonstrates the NRC’s commitment to participate in 

the national consensus standards process. Based upon the uncertainty analysis discussed in 

Section 5.12, there is a reasonable basis for concluding that there is high reliability in an NRC 

finding that the final rule represents a socially efficient use of resources. 

Other important considerations lead the NRC staff to recommend Alternative 2. These include 

the industry’s familiarity with the well-established process of approving Code Cases through 

NRC regulatory guides, the public perception that the Code Case approval process is consistent 

across the industry, and the public perception that the NRC would continue to support the use of 

the most updated and technically sound techniques developed by the ASME while continuing to 

provide adequate protection to the public. 

The NRC finds Alternative 2 is justified regardless of whether the quantitative information is 

considered by itself, the non-quantitative information is considered by itself, or the quantitative 

and non-quantitative information are considered in an integrated fashion, and when considering 

the uncertainties in the information. Therefore, the NRC has determined that Alternative 2 

should be selected, and the rule be adopted. 

7. Implementation Schedule 

The final rule would become effective 30 days after its publication in the Federal Register. 

8. Regulatory Guides 

The NRC has proposed revisions to Regulatory Guide 1.84, “Design and Fabrication Code 

Case Acceptability, ASME Section III” (Revision 37), Regulatory Guide 1.147, “Inservice 

Inspection Code Case Acceptability, ASME Section XI, Division 1” (Revision 18), and RG 1.192, 

“Operation and Maintenance Code Acceptability, ASME OM Code” (Revision 2). The proposed 

revisions to these regulatory guides identify those Code Cases that have been determined by 

the NRC to be acceptable alternatives to applicable parts of Section III, Section XI, and the 

OM Code. 

 
56 

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58 

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Dollar per Person-Rem Conversion Factor Policy,” 1995. 

25. U.S. Nuclear Regulatory Commission (NRC). NUREG-1530, Rev. 1 (draft) released for 

public comment, “Reassessment of NRC’s Dollar per Person-Rem Conversion Factor 

Policy,” (ADAMS Accession No. ML15237A211) 

26. International Atomic Energy Agency (IAEA) Power Reactor Information System: Country 

Statistics: USA, Accessed at 

https://www.iaea.org/PRIS/CountryStatistics/CountryDetails.aspx?current=US. Last 

update on December 2, 2015. 

27. U.S. General Accountability Office, GAO-15-98, “Nuclear Regulatory Commission Needs 

to Improve Its Cost Estimates by Incorporating More Best Practices,” December 2014, 

Accessed at http://www.gao.gov/products/GAO-15-98. 

28. U.S. General Accountability Office, GAO-09-3SP, “GAO Cost Estimating and Assessment 

Guide: Best Practices for Developing and Managing Capital Program Costs,” March 2009, 

Accessed at http://www.gao.gov/new.items/d093sp.pdf. 

29. Entergy Nuclear Operations, Inc. letter JAFP-15-0133, “Notification of Permanent 

Cessation of Power Operations,” November 18, 2015 (ADAMS Accession 

No. ML15322A273. 
59 

Appendix A: Industry Labor Rates 

Utilities (Sector 22) – Industry: Electric Power Generation, Transmission and Distribution 

(NAICS code 221100)

Position 

Title 

Occupation 

(SOC code) 

Hourly mean 

wage 

(2014 dollars) 

Hourly 25th 

percentile wage 

(2014 dollars) 

Hourly 90th 

percentile wage 

(2014 dollars) 

Source 

Executiv

e 

Top Executives 

(111000) $66.37 $46.64 $99.56 (1) http://www.bls.gov/oes/c

urrent/oes111011.htm 

Chief Executives 

(111011) $95.79 $66.55 $143.69 (1)

http://www.bls.gov/oes/c

urrent/oes_nat.htm#11-

0000 

Average $81.08 $56.60 $121.62 

Manager

s 

First-Line 

Supervisors of 

Production and 

Operating Workers 

(511011) 

$41.40 $32.23 $58.83 http://www.bls.gov/oes/c

urrent/oes511011.htm 

First-Line 

Supervisors of 

Mechanics Installers 

and Repairers 

(491011) 

$39.65 $32.40 $55.47 http://www.bls.gov/oes/c

urrent/oes491011.htm 

Industrial Production 

Managers(113051) $56.26 $43.58 $80.87 http://www.bls.gov/oes/c

urrent/oes113051.htm 

General and 

Operations 

Managers (111021) 

$63.76 $45.77 $95.64 (1) http://www.bls.gov/oes/c

urrent/oes111021.htm 

Average $50.27 $38.50 $72.70 

Technica

l Staff 

Nuclear 

Engineers(172161) $48.84 $40.42 $65.51 http://www.bls.gov/oes/c

urrent/oes172161.htm 

Nuclear 

Technicians(194051

) 

$37.25 $30.76 $49.71 http://www.bls.gov/oes/c

urrent/oes194051.htm 

Nuclear Power 

Reactor Operators 

(518011) 

$39.55 $34.02 $50.45 http://www.bls.gov/oes/c

urrent/oes518011.htm 

Industrial Machinery 

Mechanics (499041) $31.24 $24.86 $44.30 http://www.bls.gov/oes/c

urrent/oes499041.htm 

Average $39.22 $32.52 $52.49 

Admin 

Staff 

Office and 

Administrative 

Support 

Occupations 

(430000) 

$23.15 $16.72 $35.83 

http://www.bls.gov/oes/c

urrent/naics4_221100.ht

m#43-0000 

First-Line 

Supervisors of Office 

and Administrative 

Support Workers 

(431011) 

$34.61 $25.99 $51.79 http://www.bls.gov/oes/c

urrent/oes431011.htm 
60 

Position 

Title 

Occupation 

(SOC code) 

Hourly mean 

wage 

(2014 dollars) 

Hourly 25th 

percentile wage 

(2014 dollars) 

Hourly 90th 

percentile wage 

(2014 dollars) 

Source 

Office Clerks 

General (439061) $19.42 $13.96 $29.05 http://www.bls.gov/oes/c

urrent/oes439061.htm 

Average $25.73 $18.89 $38.89 

Licensing 

Staff 

Paralegals and 

Legal Assistants 

(232011) 

$29.85 $24.85 $40.05 http://www.bls.gov/oes/c

urrent/oes232011.htm 

Lawyers (231011) $73.23 $44.96 $109.85 (1) http://www.bls.gov/oes/c

urrent/oes231011.htm 

Average $51.54 $34.91 $74.95 

Total 

Average $49.57 $36.28 $72.13 

Average multiplied 

by 2 $118.96 $87.07 $173.11 

Value in 2016 

Dollars $122.91 $89.97 $178.87 Consumer Price Index 

Footnotes: 

(1) The BLS wage is equal to or greater than $90.00 per hour or $187,199 per year without specifying a value. For 

this analysis, the NRC staff estimated that the 90th percentile is approximately 30% greater than the mean. 

(2) SOC code: Standard Occupational Classification code -- see http://www.bls.gov/soc/home.htm 

(3) NAICS code: North American Industry Classification System code -- see http://www.bls.gov/bls/naics.htm 

(4) The BLS data was extracted using a custom query function accessible at 

http://www.bls.gov/oes/current/oes111011.htm. The query selected used multiple occupations for one industry. 

The industry sector selected was Sector 22 - Utilities and the industry selected was Industry 221100 - Electric 

Power Generation, Transmission, and Distribution. The table lists the occupation SOC codes. The NRC staff 

extracted the data on September 14, 2015. 
61 

Appendix B: Uncertainty Analysis Variables 

Uncertainty Variable 

Description Distribution Low Estimate

Best 

Estimate

High 

Estimate

Mean 

Value 

General

Number of reactor sites Pert 57 61 61 60.3

Number of reactor units Pert 100 104 104 103.3

Number of BWR sites Pert 20 23 23 22.5

Number of BWR units Pert 31 34 34 33.5

Number of PWR sites Pert 37 38 38 37.8

Number of PWR units Pert 69 70 70 69.8

Number of new reactor units 4.0

Industry (one-time, per site)

Revise plant procedures 

(No. of procedures) Pert 40 50 60 50.0

Hours per procedure Pert 4 5 6 5.0

Industry (annually recurring, per site, Code Cases N-666-1 and N-789) 

Average number of annual Code 

Case alternative request 

submitted16

Pert 26 30 38 30.7

Average number of hours to 

prepare and submit an 

alternative request 

Pert 304 380 456 380.0

Number of incremental hours to 

perform a Code Case N-666-1 

test 

Pert 2 3 6 3.3

Number of incremental hours to 

perform a Code Case N-789 test Pert 0.33 1 1.5 1.0

Industry (annually recurring, per site, Code Case N-795)

Average number of annual Code 

Case alternative request 

submitted15

Pert 10 12 12 11.7

Hours to submit an alternative 

request Pert 96 120 144 120.0 

No. of incremental hours to 

perform Code Case N-795 test Pert 0.5 0.75 1.0 0.75

Industry (annually recurring, per site, Code Case N-799) 

Average number of annual Code 

Case alternative request 

submitted 

 4.0

 

16 This line item is for the whole industry. The other variables in this subsection of this table are per site. 
62 

Uncertainty Variable 

Description Distribution Low Estimate

Best 

Estimate

High 

Estimate

Mean 

Value 

Hours to submit an alternative 

request Pert 304 380 456 380 

Number of incremental hours to 

perform a Code Case N-799 test Pert 5 10 25 11.7 

NRC (one-time)

Issue final rule and supporting 

regulatory guides (hours) Pert 1888 2360 2832 2360 

NRC (recurring)

Hours to disposition an 

alternative request Pert 96 120 144 120 

Conversion Factors 

Dollar per person-rem 

conversion Pert $2,000 $3,550 $5,100 $3,550

Replacement power costs 

(MWe/hr) Pert $39,400 $42,900 $50,200 $43,533

Labor Rates

Industry Pert $90 $123 $179 $127

NRC Pert $120 $124 $130 $124
63 

ADAMS Accession No.: PKG: ML15041A817; Regulatory Analysis: ML15041A816 *via email 

OFFICE NRR/DPR/CA NRR/DPR/CA NRR/DPR/TL NRR/DPR/BC NRR/DPR/DD 

NAME MPurdie CHowells FSchofer TInverso AMohseni 

DATE 4/23/2015 10/30/2015 12/3/2015 12/16/2015 12/23/2015 

OFFICE NRR/DPR/D OGC* 

NAME LKokajko GMizuno 

DATE 1/5/2016 1/4/2016 

OFFICIAL RECORD COPY