NOTATION VOTE

RESPONSE SHEET

TO: Annette Vietti-Cook, Secretary

FROM: Commissioner Ostendorff

SUBJECT: SECY-16-0075: PROPOSED MERGER OF THE
OFFICES OF NEW REACTORS AND NUCLEAR
REACTOR REGULATION

Approved XX _ Disapproved Abstain Not Participating

COMMENTS: Below Attached XX _ None

Entered in STARS

Yes X Lith eub,f

No Signature , 7

— WS VE

Date


Commissioner Ostendorffs Comments on SECY-16-0075,
“Proposed Merger of the Offices of New Reactors and Nuclear Reactor Regulation”

| appreciate the staff's paper on the NRR and NRO merger. Though | will soon be leaving the
NRC when my term ends June 30, | want to communicate my views on certain aspects of the
paper.

First, | will address future workload considerations. With regard to NRO, the new reactor
workload has reduced significantly since | arrived at the NRC in 2010. At that time, the staff
was reviewing sixteen combined license applications for twenty-eight new units. Four of these
reviews were completed, and combined licenses were issued for seven units. However, about
half of the twenty-eight applications have been withdrawn or suspended at the request of the
applicant. This leaves four applications for seven units under review, and these reviews are
scheduled to be completed within a year. Since 2010, the NRC has also completed the AP1000
and ABWR design certification amendments and the ESBWR design certification. We are
scheduled to receive only one application for a small modular reactor design certification
(NuScale) in the next few years, and realistically we are still several years away from any non-
light water reactor applications.

Similarly, with regard to NRR, the number of operating reactors is decreasing. Five units
prematurely shut down over the last three years and another seven units are slated for closure
in the next three years. Just today, Pacific Gas and Electric announced that they are no longer
seeking to renew the operating license for Diablo Canyon and will close the facility in 2025.

Second, | will address the office differences referenced in the paper. | agree that some
differences exist and that a merger of the two offices would address the offices’ occasionally
divergent approaches in a manner that is consistent with our Principles of Good Regulation.
Among the relevant differences | see are the technical approaches to addressing flooding
hazards and digital instrumentation and control.

Third, | understand the concern that there may never be a good time to merge. But | do not see
value in the Commission’s approving a merger in concept without an accompanying target date
for an actual merger. Concrete dates are necessary to allow the NRC to properly plan for
personnel staffing (e.g., future SES succession planning), budget formulation, and office space
requirements. None of these can be effectively accomplished without a concrete timeline.

It is under this backdrop that I vote to approve the reorganization plan to merge NRR and NRO.
The merger should begin by October 1, 2018, and the merger should be fully implemented no
later than September 30, 2019. This allows ample time to conduct a smooth and thoughtful
transition and to factor the merger into the FY19 budget request, succession planning, and
future SES candidate decisions. The Directors of the NRR and NRO should consider
opportunities to commence merger activities prior to the beginning of FY19.

In formulating the merger plan, the staff should not limit itself to prior or current organizational
structures (i.e., the NRR organization prior to establishing NRO or the current NRO and NRR
organization). Rather, the EDO and Office Directors should take a strategic look at where the
work is and will be and start with a clean slate.


If facts change such that there is a significant increase in the projected new reactor workload,
the staff should inform the Commission of any impacts to the transition plan and should request
a change to the merger schedule, if necessary.