NUREG-1530

Reassessment of NRC's Dollar

Per Person-Rem Conversion

Factor Policy

U.S. Nuclear Regulatory Commission

Office of Nuclear Regulatory Research
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NUREG-1530

Reassessment of NRC's Dollar

Per Person-Rem Conversion

Factor Policy

Manuscript Completed: December 1995

Date Published: December 1995

Division of Regulatory Applications

Office of Nuclear Regulatory Research

U.S. Nuclear Regulatory Commission

Washington, DC 20555-0001

ABSTRACT

The Nuclear Regulatory Commission has

completed a review and analysis of its dollar per

person-rem conversion factor policy. As a result

of this review, the NRC has decided to adopt a

$2000 per person-rem conversion factor, subject it

to present worth considerations, and limit its

scope solely to health effects. This is in contrast

to the previous policy and staff practice of using

an undiscounted $1000 per person-rem

conversion factor that served as a surrogate for all

offsite consequences (health and offsite property).

This policy shift has been incorporated in

"Regulatory Analysis Guidelines of the U.S.

Nuclear Regulatory Commission,"

NUREG/BR-0058, Revision 2, November 1995.

iii In NUREG-1530

CONTENTS

Page

A B STR A C T ............................................................................. iii

A BBREV IATIO N S ....................................................................... vii

1 BA CK G R O U ND ..................................................................... 1

2 HISTORICAL DEVELOPMENT ...................................................... 1

3 REGULATORY APPLICATIONS ..................................................... 3

3.1 Routine Emissions from Nuclear Power Plants ....................................... 4

312 A ccidental Releases ............................................................... 4

3.3 Part 20 ALARA Program .......................................................... 4

4 TECHNICAL STUDIES AND REVIEWS .............................................. 5

5 SCOPE OF DOLLAR PER PERSON-REM VALUE .................................... 6

6 APPROACHES TO VALUING THE HEALTH DETRIMENT ........................... 7

6.1 Human Capital Method .................................................. 7

6.2 W illingness-to-Pay M ethod ........................................................ 8

6.3 Values Implied by Government Agency Expenditures ................................. 10

6.4 Values Implied by Regulatory Requirements Imposed by Government Agencies ......... 10

6.5 Values Based on Radiation Protection Activities in Other Countries .................... 10

6.6 Representative Value of a Statistical Life ............................................ 11

7 RISK COEFFICIENTS FOR STOCHASTIC HEALTH EFFECTS ........................ 11

8 DOLLAR PER PERSON-REM CONVERSION FACTOR ............................... 12

9 IMPLICATIONS OF REVISED CONVERSION FACTOR POLICY ...................... 13

10 PROCESS TO INCORPORATE THE REVISED DOLLAR PER PERSON-REM

VALUE AS NRC POLICY ............................................................ 14

v NUREG-1530

ABBREVIATIONS

ALARA as low as reasonably achievable

BEIR V Committee on the Biological

Effects of Ionizing Radiation

BNL Brookhaven National Laboratory

CPSC Consumer Product Safety

Commission

DOT Department of Transportation

EPA Environmental Protection Agency

GDP gross domestic product

GESSAR General Electric Standard Safety

Analysis Report

GI generic issue

HECOM Health Effects Cost Model

ICRP International Commission on

Radiation Protection

MACCS MELCOR Accident Consequence

Code System

NCRP

NEPA

NRC

OMB

OSHA

PNL

PRA

SAMDA

TMI

UNSCEAR

USI

WTP

National Council on Radiation

Protection

National Environmental Policy Act

Nuclear Regulatory Commission

Office of Management and Budget

Occupational Safety and Health

Administration

Pacific Northwest Laboratory

probablistic risk assessment

Severe Accident Mitigation Design

Alternative

Three Mile Island

United Nations Scientific

Committee on the Effects of

Atomic Radiation

unresolved safety issues

Willingness-to-Pay

vii NUREG-1530

1. BACKGROUND

For approximately the last two decades, the U.S.

Nuclear Regulatory Commission (NRC) and its

predecessor agency, the Atomic Energy

Commission, have used a conversion factor of

$1000 per person-rem1 as the monetary valuation

of the consequences associated with radiological

exposure. That is, an increase or decrease in

person-rem is valued at $1000 per person-rem in

order to allow a quantitative comparison of the

values and impacts associated with a proposed

regulatory decision.

This value has been used as a reference point in

NRC regulatory analyses2 including those

involving (a) routine emissions, (b) accidental

releases, and (c) 10 CFR Part 20 as low as

reasonably achievable (ALARA) programs.

The NRC prepares regulatory analyses for

proposed actions imposing requirements on

licensees. The analyses include an examination of

the values and impacts associated with alternative

approaches to meeting the particular regulatory

objectives. The conclusions and

recommendations included in a regulatory

analysis are neither final nor binding, but rather

are intended to enhance the soundness of

decisions made by NRC managers and the

Commission. Regulatory actions needed to ensure

adequate protection of the health and safety of

the public [see section 182(a) of the Atomic

Energy Act and 10 CFR 50.109(a)(4)(ii)] from the

operation of production and utilization facilities

do not require a regulatory analysis. Thus the

$1000 per person-rem conversion factor does not

apply to these actions, except in assessing possible

alternative approaches to achieve the necessary

level of adequate protection.

Over the years, the NRC has become increasingly

aware of alternative estimates and methodological

'In order to be consistent with the Commission's policy on

metrication, the conversion factor should be expressed in dollars

per person-centisievert with the value in English units following

parenthetically. Note that a sievert is equal to 100 rems.

Therefore, for example, $1000 per person-rem is equal to $1000

per person cSv. However, for purposes of continuity and to

facilitate review, dollars per person-rem shall be the unit used

throughout this report. 2Guidance for the preparation of NRC's regulatory analyses is in

Regulatory Analysis Guidelines of the US. Nuclear Regulatory

Commission, NUREG/BR-0058, Rev. 2.

approaches for arriving at a conversion factor. In

addition, questions have surfaced on the

continued validity of the $1000 per person-rem

conversion factor because basic parameters such

as the value of the dollar and risk factors (e.g.,

latent cancer fatality estimates per person-rem)

have changed considerably over this period. Such

factors have potentially significant effects on the

appropriateness of the $1000 per person-rem

conversion factor. In the NRC's view, a thorough

reassessment of the dollar per person-rem value

and its application in NRC regulatory

decisionmaking is needed.

The NRC's revision is based on a relatively simple

and straightforward logic in which the new dollar

per person-rem conversion factor attempts to

capture the dollar value of the health detriment

resulting from radiation exposure. As such, the

proposed formulation considers the dollar value

of the health detriment, and a risk factor that

establishes the nominal probability for stochostic

health effects attributable to radiological

exposure. The latter term takes into account fatal

and non-fatal cancers, and hereditary effects. It

needs to be emphasized that the resulting dollar

per person-rem conversion factor is not applicable

to deterministic health effects, including early

fatalities, which could result from very high doses

to particular individuals. In this way, the

conversion factor is compatible with the

Commission's Safety Goal Policy wherein the

Commission made clear that no death will ever be "acceptable" in the sense that the Commission

would regard it as a routine or permissible event.

2. HISTORICAL DEVELOPMENT

The issue of assigning a monetary value to

radiation dose in regulatory decisionmaking arose

in 1974 during the hearing for a rulemaking

addressing routine emissions from nuclear power

reactors (the rule subsequently issued appears at

10 CFR Part 50, Appendix I).J In adopting design

criteria for limiting routine emissions from power

plants, the Commission argued for a cost-benefit

test. The Commission felt that "such a

cost-benefit analysis requires that both the costs

3

U.S. Nuclear Regulatory Commission, Numerical Guides for

Design Objectives and Limiting Conditions for Operating to Meet

the Criterion 'As Low as is Reasonably Achievable" for

Radioactive Material in Light-Water-Cooled Nuclear Power

Reactor Effluents, Opinion of the Commission, April 30, 1975.

1 NUREG-1530
and the benefits from the reduction in dose levels

to the population be expressed in commensurate

units, and it seems sound that these units be units

of money. Accordingly, to accomplish the

cost-benefit balancing, it is necessary that the

worth of a decrease of a person-rem be assigned

monetary values." 4

The Commission stated that "the record, in our

view, does not provide an adequate basis to

choose a specific dollar value for the worth of

decreasing the population dose by a man-rem."

Published studies at that time that were

mentioned in the record of the rulemaking, gave

values ranging from $10 to $980 per person-rem.

The Commission concluded that "there is no

consensus in this record or otherwise regarding

the proper value for the worth of a manrem," and

that "we also recognize that Selection of such

values is difficult since it involves, in addition to

actuarial considerations that are commonly

reduced to financial terms, aesthetic, moral, and

human values that are difficult to quantify." 5 The

final outcome was a Commission decision to

adopt as an interim measure, the value of $1000

per person-rem for cost-benefit evaluations. 6

Two Executive Orders issued during the Ford

administration (E.O. 11821 and E.O. 11949)

encouraged Federal agencies to perform

value-impact type evaluations of proposed

regulatory requirements to demonstrate adequate

justification for new requirements. The NRC

became committed to this type of evaluation, and

issued Value-Impact Guidelines in December 1977

(SECY-77-388A). This document referred to the

techniques and detailed consequence analyses

used in the Reactor Safety Study, WASH-1400, and

recommended that the person-rem averted from

proposed changes be multiplied..."by $1000 per

man-rem (or other agreed upon value)," in order

to place the benefit (value) in the same units as

cost (impact).

In 1977, Congress added Section 210 to the

Energy Reorganization Act of 1974, directing the

NRC to develop a plan for the identification and

analysis of unresolved safety issues (USI) relating

to nuclear reactors. In response, the NRC

developed a program for the identification,

4

Federal Register, May 5, 1975 (40 FR 19439), page 19439.

5

Ibid.

6

Ibid.

prioritization, and resolution of USI's and generic

issues (GI). Guidance relating to the assignment

of priorities was issued in 1982, with the

publication of 'A Prioritization of Generic Safety

Issues," NUREG-0933. The guidance included

the use of the $1000 per person-rem value in

setting the priority of USIs and GIs. Issues

identified as high priority were then subject to

resolution via a more detailed value-impact

analysis that also utilized the $1000 per

person-rem value. In both these contexts, the

$1000 per person-rem value has been used as a

figure of merit and as one factor in the respective

assessments.

In January and December 1983, the NRC

published NUREG/BR-0058, "Regulatory

Analysis Guidelines of the U.S. Nuclear

Regulatory Commission" (Guidelines), and

NUREG/CR-3568, 'A Handbook for

Value-Impact Assessment" ("1983 Handbook"),

respectively. These documents were issued to

formalize NRC's policies and procedures for

analyzing the values and impacts of proposed

regulatory requirements. The $1000 per

person-rem figure was not mentioned in the 1983

Guidelines or in Revision 1 to the Guidelines

issued in May 1984, but the accompanying 1983

Handbook recommended that the analyst use a

range of values, one of which should be $1000 per

person-rem. 7 Since the 1983 Handbook provides

the implementation guidance for performing NRC

regulatory analyses, it became standard practice

of the NRC staff to apply this guidance whenever

a quantitative regulatory analysis or value-impact

analysis was performed.

The NRC requires a regulatory analysis for a

broad range of regulatory actions. In general, all

mechanisms used by the staff to establish or

communicate generic requirements, requests, or

staff positions, that would affect a change in the

use of resources by its licensees will include an

accompanying regtilatory analysis. These

mechanisms include rules, bulletins, generic

letters, regulatory guides, orders, standard review

plans, branch technical positions, and standard

technical specifications. Thus, staff guidance on

value-impact and regulatory analyses has

provided the NRC with a mechanism to consider

$1000 per person-rem as a figure of merit in most

7S. W Heaberlin, et al., 'A Handbook for Value-Impact

Assessment," NUREG/CR-3568. Section 3.2.2., 1983.

NUREG-1530 2
regulatory decisions affecting power reactor as

well as nonpower-reactor licensees. In practice, however, a number of regulatory analyses did not

quantify the person-rem averted and thus did not

use a dollar per person-rem value.

In 1983, the NRC issued an interim Policy

Statement on Safety Goals for the Operation of

Nuclear Power Plants for use during a 2-year trial

period. 8 In this statement, the Commission

adopted qualitative and quantitative design goals

for limiting individual and societal mortality risks

from severe accidents. Also in this Statement, the

Commission stated that the benefit of an

incremental reduction of societal mortality risks

should be compared with the associated costs on

the basis of $1000 per person-rem averted as one

consideration in decisions on safety

improvements. The value proposed was in 1983

dollars and was to be modified to reflect general

inflation in the future. At the end of the 2-year

interim period, a number of comments were

received on this value. Widely different values

were suggested ranging from about $100 per

person-rem to values in excess of $1000 per

person-rem. Respondents who believed the $1000

value was too low did not provide another

number, but merely indicated that the value

should be raised. Discussion of $1000 per

person-rem, and any proposed use, were deleted

in the Final Policy Statement on Safety Goals

when published in August 1986 (51 FR 30028),

following completion of the 2-year trial period. 9

In 1985, the NRC staff revisited the $1000 per

person-rem valuation and its use in regulatory

analyses of nuclear power plant improvements

designed to enhance safety. Although the

monetary value of averted person-rem of radiation

exposure up to that time referred only to averted

health effects, (for example, averted latent cancer

fatalities), the use of $1000 per person-rem was

evaluated and subsequently defined at that time

as a surrogate for all averted offsite losses, health

as well as property. The basis for this

determination is in an October 23, 1985,

memorandum from NRC's Executive Director for

8

U.S. Nuclear Regulatory Commission, "Safety Goals for Nuclear

Power Plant Operation," NUREG-0880, Rev. 1, May 1983.

9

The $1000 per person-rem value was mentioned in the separate

views of Commissioner Bernthal (51 FR 30033).

Operations to the Commissioners. 10 This

interpretation was subsequently adopted in all

NRC regulatory analyses and value-impact

analyses in which offsite radioactive releases were

subject to monetary valuation.

In February 1982, as part of the Three Mile Island

(TMI) Action Plan, the Commission promulgated

10 CFR 50.34(f)(1)(i) that required certain nuclear

power plant license applicants to prepare

plant-specific probabilistic risk assessments

(PRAs) to identify possible design alternatives for

nuclear power plants. As a result of this rule,

value-impact analyses were prepared in 1985 for

the GESSAR (General Electric Standard Safety

Analysis Report) design. Eighty design-specific

enhancements were analyzed with $1000 per

person-rem used as the screening criterion. PRAs

are now used for existing operating nuclear power

plants (as a result of NRC Generic Letter 88-20)

and for future reactor designs.

In February 1989, the U.S. Court of Appeals

directed the NRC to consider Severe Accident

Mitigation Design Alternatives (SAMDA) as part

of the NRC's environmental review process under

the National Environmental Policy Act (NEPA)

before granting a full power license to owners of

nuclear power plants.11 The staff subsequently

performed SAMDA analyses for the Limerick and

Comanche Peak nuclear power plants. A

SAMDA analysis was also prepared for the

"Draft Generic Environmental Impact Statement

for License Renewal of Nuclear Plants"

(NUREG-1437). In all these cases, the staff used

the $1000 per person-rem value as a screen to

compare values and impacts. If designs were

within an order of magnitude of being justified,

they were analyzed further. No design changes

were deemed necessary as a result of these

SAMDA analyses.

3. REGULATORY APPLICATIONS

The $1000 per person-rem conversion factor has

been applied by the NRC in a variety of

regulatory applications including the evaluation of

(1) routine emissions from nuclear power plants,

10

Memorandum, W J. Dircks to Commission, "Basis for

Quantifying Off-Site Property Losses," October 23, 1985.

1"Limerick Ecology Action, Inc., v NRC, 869 F2d 719 (3d Cir.

1989).

3 NUREG-1530
(2) accidental releases, and (3) radiation

protection practices.

3.1 Routine Emissions from Nuclear Power

Plants

The only place the $1000 per person-rem value

currently appears in the NRC's regulations is at

10 CFR Part 50, App. I (Sec. II)(D) in a

paragraph relating to items to be included in a

license applicant's radwaste system. Essentially, in

designing the radwaste system, the licensee is not

required to install additional effluent controls to

reduce routine emissions below 3 millirem per

year for water effluents and 5 millirem per year

for airborne effluents if the cost of the resultant

reduction in the exposure of the population within

50 miles is greater than $1000 per total body

person-rem or $1000 per person-rem to the

thyroid.

The $1000 per person-rem criterion has served as

a significant decision factor in NRC's radwaste

design approval decisions for nuclear power

plants. Guidance for performing the dose

calculation and resulting dollar valuation is

contained in the NRC's Regulatory Guides 1.109

and 1.110, respectively. Procedurally, applicants

for a nuclear plant license are to use $1000 per

person-rem in a cost-benefit analysis in order to

justify their radwaste system design. The design

is then subject to NRC approval and, depending

upon the outcome of this review, possible revision.

Essentially, all nuclear power plant operating

licenses issued after 1975 have followed this

procedure. Although NRC's regulations only

speak to the use of the $1000 per person-rem

value in consideration of the radwaste system

design, the staff believes that to some extent it has

also influenced licensees' design considerations

for radwaste storage facilities.

From a procedural standpoint, use of the $1000

per person-rem value as a determinant in

decisions involving radwaste systems has generally

worked well. The decision criterion is well defined

and effective staff procedures and licensee

guidance are in place. However, from a practical

perspective the $1000 per person-rem value

appears to have had relatively little effect on the

radwaste system designs proposed by applicants

and ultimately approved by the NRC. The reason

is that system designs are relatively insensitive to

an increase, within an order of magnitude, in the

$1000 per person-rem criterion because of the

relatively high cost of the design alternatives.

3.2 Accidental Releases

A frequent use of the $1000 per person-rem

valuation has involved NRC programs, reviews,

and decisions in which accidental radiological

releases are a consideration. This is because

safety enhancement regulatory actions constitute a

major NRC initiative, and accidental releases tend

to be a dominant factor in these regulatory

decisions.

From a procedural standpoint, the $1000

conversion factor has also appeared to function as

a useful guide in regulatory decisions in which

accidental radiological releases are a

consideration. As noted in Section 2 of this

report, since 1985, the $1000 value has been

interpreted by the NRC to include an allowance

for all offsite property consequences of a nuclear

power plant accident. This broader

interpretation can be problematic for the reasons

noted in Section 5 of this report.

3.3 Part 20 ALARA Program

The regulation 10 CFR Part 20 establishes

standards for protection against radiation hazards

arising out of activities under licenses issued by

the NRC. A guiding principle for Part 20

(codified at 10 CFR 20.1101(b)) is for licensees to

make every reasonable effort to maintain.

radiation exposures, and releases of radioactive

materials, as low as is reasonably achievable. Part

20 applies to all NRC licensees (power reactor,

nonpower reactor, fuel cycle facilities and

radioactive source and materials licensees) and

concerns the release of radioactive material and

associated occupational and public dose incurred

as a result of normal licensee activities.

ALARA is defined at 10 CFR 20.1003 as making

every reasonable effort to maintain exposures to

radiation as far below the Part 20 dose limits as is

practical, taking into account the state of

technology, the economics of improvements in

relation to benefits to the health and safety of the

public and occupational workers, other societal

and socioeconomic considerations, and the

utilization of nuclear energy in the public interest.

Given this definition, it would appear that a

dollar value per person-rem should play a pivotal role in cost-benefit tradeoffs used in establishing

NUREG-1530 4
reasonableness under the Part 20 ALARA

program. However, Part 20 itself does not

address the use of the $1000 per person-rem value

although one regulatory guide12 (Regulatory

Guide 8.37) suggests its use. In this regard, the

NRC is aware that current industry practice,

particularly in the power reactor arena, is to value

an averted person-rem at a higher dollar value

owing to manpower constraints and other labor

cost considerations that are integral to the

licensees' cost-benefit tradeoffs. Licensees are

encouraged to continue to use such higher values

for their own ALARA determinations.

Regulatory Guide 8.37 advises materials licensees

that they should consider engineering options to

achieve ALARA goals in the release of effluents

and that modifications should be implemented

unless an analysis indicates that a substantial

reduction in collective dose would not result or

the costs are considered unreasonable. One basis

for reasonableness identified in this regulatory

guide is a quantitative cost-benefit analysis which

requires the use of a dollar value per unit dose

averted. The Regulatory Guide indicates that

$1000 per person-rem is an acceptable value for

this purpose.

In 1992 for an enhanced participatory rulemaking

on radiological criteria for decommissioning, the

NRC issued a notice (57 FR 58727) that identified

issues to be discussed at forthcoming workshops

on the proposed rulemaking. One subissue

dealing with ALARA considerations asked: "... if

a cost versus benefit analysis were used, what

monetary value per averted collective dose (i.e.,

dollar/person-rem) should the Commission use as

a basis for making the determination?" In

responding to the subissue, only two commenters

mentioned specific values. One recommended a

value of $50,000 per person-rem for general public

dose reduction. Another stated that even in 1993

dollars, the $1000 value is still higher than most

assessments of the dollar value placed on health

impacts based on real safety or medical policy

decisions. Neither commenter provided a basis

for their recommendations.

1

2

Regulatory Guide 8.37, 'ALARA Levels for Effluents from

Materials Facilities," July 1993.

4. TECHNICAL STUDIES AND

REVIEWS

As part of the NRC's overall reassessment effort

of an appropriate dollar per person-rem

conversion value, the Brookhaven National

Laboratory (BNL) completed two studies for the

NRC that addressed dollar per person-rem

valuation. The first, entitled "Cost-Benefit

Considerations in Regulatory Analysis," by V

Mubayi, et al.,13 assessed the continued validity of

the $1000 per person-rem value. In addition, this

study re-evaluated the dollar per person-rem value

based on the more recent state of knowledge

including reports issued by the International

Commission on Radiation Protection (ICRP), the

National Council on Radiation Protection and

Measurements (NCRP), the United Nations

Scientific Committee on the Effects of Atomic

Radiation (UNSCEAR), and the Committee on

the Biological Effects of Ionizing Radiation (BEIR

V) of the National Research Council.

The second BNL study is entitled "Value of Public

Health and Safety Actions and Radiation Dose

Avoided," by John W Baum. 14 This report

incorporates and builds upon the literature review

contained in the Mubayi work with a focus on

recent literature on the value of a statistical life

that can serve as a representative measure of the

dollar value of the health detriment. In addition,

the report includes related values of dose avoided

in radiation protection, and agencies and

organizations in several countries were contacted

by Baum to obtain information on the values

being used or considered by them.

Baum's review identified a wide range of

references and estimates that were categorized

into 11 broad subject areas. The 11 subject areas

and corresponding median values for the value of

saving a statistical life are as follows:

* transportation safety, $0.26 million

* health care actions, $0.37 million

13

V Mubayi, G. Anandalingam, L Neymotin, and V. Sailor,

"Cost-Benefit Considerations in Regulatory Analysis,"

NUREG/CR-6349, Brookhaven National Laboratory, Upton,

New York, October 1995.

14J. W Baum, "Value of Public Health and Safety Actions and

Radiation Dose Avoided," NUREG/CR-6212, Brookhaven

National Laboratory, Upton, New York, May 1994.

5 NUREG-1530
" consumer products safety, $0.49 million

* values employed by U. S. Government agencies, $1.5

million

* consumer choices, $2.2 million

* wage/risk compensation, $2.5 million

* willingness-to-pay surveys, $2.7 million

" chemical carcinogen regulation, $2.9 million

* risk reducing regulations, $6.1 million

* occupational safety, $9 million

* radiation related activities, $15 million.

The median value of saving a statistical life for

these 11 subject areas was $2.5 million, while the

mean was $3.9 million.

Mubayi's report is somewhat more ambitious in

that it also translates the value of a statistical life

to a dollar per person-rem value. There is

however a noticeable difference between Mubayi's

conversion and that considered by the NRC in

this paper. Mubayi's translation explicitly

includes present worth considerations whereas in

the NRC's formulation presented herein, the

dollar per person-rem value appears on an

undiscounted basis. However, when used in any

particular regulatory application, NRC value

impact guidance would require it, too, to be

subject to present worth considerations. The

difference is largely perceived as procedural

although in comparing the staff's and Mubayi's

dollar per person-rem results, the staff's estimate

appears to be significantly larger than Mubayi's

result.

Readers interested in a more detailed

understanding of the data and issues underlying

this report are encouraged to review the Mubayi

and Baum reports. The Baum and Mubayi

reports have been published as NUREG/CR-6212,

and as NUREG/CR-6349.

5. SCOPE OF DOLLAR PER

PERSON-REM VALUE

The NRC acknowledges that the dollar conversion

factor of a person-rem is a highly complex issue

and that a myriad of factors can logically be taken

into account in deriving such a value. The NRC

also recognizes that there is a wide divergence in

views, some of which are highly philosophical in

nature, and thus there is unlikely to be one clearly

preferable choice that will please all interested

parties. Furthermore, the NRC recognizes that

simplicity, ease of calculation, and providing a

readily understandable approach with practical

application to a wide range of regulatory issues is

desirable if the dollar per person-rem value is to

be effectively employed. Overall, the NRC believes

that a reasonable or representative value

approach is best suited for NRC regulatory

decisionmaking. The NRC emphasizes that such

a value serves as only one input to the

decisionmaker and in fact is unlikely to be a sole

determinant to that decision. The most common

application of dollar per person-rem conversion

values is as a screening tool in value-impact

analyses where "close" calls would be subject to

more detailed follow-up analysis, and more

careful scrutiny by NRC management.

In terms of scope, and specifically whether the

dollar per person-rem value should cover both

health effects and all other offsite consequences15

of exposure or contamination, the NRC proposes

that the dollar per person-rem value serve only as

a dollar proxy for the health effects associated

with a person-rem of dose, and should not be

used as a surrogate for these other consequences

that could be attributable to radiological

exposure. To the extent other considerations exist,

these should be calculated separately and

incorporated into the overall value-impact

assessment.

Thus, for example, under this approach, for issues

involving severe power reactor accidents, offsite

property consequences will be estimated based on

results from the MELCOR Accident

Consequence Code System (MACCS). This

computer code was developed for the NRC at the

Sandia National Laboratories and represents a

significant advancement in the development of

severe accident analysis methods, and results in

improved offsite economic cost estimates relative

to earlier consequence code results (CRAC and

CRAC2). MACCS' economic parameters are in

the process of being updated. When completed,

1

5

Offsite consequences could include such items as lost wages,

relocation expenses of the evacuated population, decontamination

costs, denial of property areas, interdiction of foods or drink, and

limitations on hunting and fishing.

NUJREG-15306 6
representative values for a spectrum of severe

power reactor accidents will be developed and

incorporated in NUREG/BR-0184, "Regulatory

Analysis Technical Evaluation Handbook." For

generic requirements, these estimates should

provide an acceptable and relatively easy way to

incorporate direct and explicit consideration of

offsite property consequences. As noted

previously, this would be a departure from the

current NRC practice where the dollar per

person-rem value is assumed to include an

allowance for offsite property losses.

Three fundamental considerations underly an

approach that separately values the health and

other consequences of radiological exposure:

(1) Offsite property consequences can vary

dramatically depending on the nature, timing,

location, and magnitude of the radiological

release. For example, in the case of the Three

Mile Island Unit 2 (TM1-2) accident in 1979,

offsite property damage was almost nonexistent. 16

Alternatively, if a Chernobyl-type release occurred

in the United States and led to the same physical

consequences as actually happened in the

environs of Chernobyl, the offsite damage costs

(not including health-related costs) would likely be

in the billions of dollars. Thus, the dollar

quantification needs to take into account the full

spectrum of potential accidents.

(2) Combining health- and nonhealth-related

consequences together would overstate the dollar

valuation of radiation exposure in certain

applications such as occupational doses, routine

emissions, doses from contaminated sites, and

nonpower reactor accidental releases where offsite

property losses are not an expected outcome.

(3) The sole purpose of the dollar per person-rem

value is to allow the values and the impacts from

a change in radioactive exposure to be compared

to other factors in commensurate units, that is,

dollars. There is consequently no need to include

other impacts such as offsite property or the value

of destroyed foodstuffs in the dollar per

person-rem conversion factor since these items

can be and are normally expressed directly in

dollars. Similarly, to the extent that occupational

16

U.S. Nuclear Regulatory Commission, Special Inquiry Group,

"Three Mile Island, A Report to the Commissioners and the

Public," NUREG/CR-1250, Vol. II, Part 2.

exposures involve labor cost considerations, these

impacts would be addressed as a separate

additive element in the value-impact analysis.

The intent, therefore, is to provide a

representative dollar per person-rem threshold

value, tied exclusively to health risks, that can be

used in all NRC regulatory applications.

6. APPROACHES TO VALUING THE

HEALTH DETRIMENT

In this proposed formulation, computation of the

updated dollar per person-rem valuation requires

consideration of (1) the dollar value of the health

detriment and (2) a risk factor that establishes the

nominal probability for stochastic health effects 17

attributable to radiological exposure. The

product of these two elements is the dollar per

person-rem conversion factor.

With respect to the dollar value of the health

detriment, the NRC has reviewed the literature on

the value of a statistical life. As discussed

previously, the literature is highly diverse and

dollar estimates vary dramatically. Based on the

various methodological approaches and individual

case results reported in the two BNL studies, it is

apparent that varying degrees of justification exist

over a very wide range of values. A review of the

more common and relevant approaches to

valuation of a statistical life follows.

6.1 Human Capital Method

The value of a life saved has often been estimated

using purely economic considerations. The

simplest of these is the human capital approach

in which health effects and life shortening are

typically estimated in terms of lost production

and a dollar allowance for medical care. The

production loss, which is the dominant dollar

consideration, is often calculated based on the

expected lifetime earnings of the individual whose

life is prematurely ended. For unidentifiable

individuals in the general public, this calculation

is sometimes based on per capita gross domestic

product (GDP), or per capita income. This model

17Stochastic health effects, i.e., cancer and heredity disorders, result

from cells being modified rather than killed as a result of a low

dose of radiation. The probability of a cancer resulting from

radiation increases with increments of dose, probably with no threshold. ICRP Publication 60, "1990 Recommendations of the

International Commission on Radiological Protection," Vol. 21,

No. 1-3, published for the ICRP by Pergamon Press, Oxford,

U.K., p. 69, 1991.

7 NUREG-1530
does not directly attribute a monetary burden to

physical and psychological suffering.

According to Baum, per capita income in 1990

was about $50 per calendar day. The average

value of a statistical life saved can then be

estimated from the average life-span shortening

expected if the risk is not avoided. For

radiation-induced cancers, this averages about 15

years, 18 yielding a value of statistical life saved of

about 15 yr x 365 day/yr x $50/day = $270,000.

Adding costs of medical treatment would increase

this by about 20 percent, whereas discounting

future earnings and costs using a representative

discount rate would approximately halve the value

of a statistical life on a present worth basis.

Mubayi's report includes discussion of

NRC-sponsored research conducted by the Pacific

Northwest Laboratory (PNL). PNL developed the

"Health Effects Cost Model" (HECOM), which

utilizes the health effect incidence estimates from

accident consequence models to calculate the

discounted sum of the economic costs associated

with population exposure to ionizing radiation. 19

Direct costs include expenses for medical

treatment for specific acute injuries, and delayed

somatic and genetic effects. Indirect costs are

evaluated in terms of "loss of human capital" (i.e.,

the productivity loss to society as a result of

illness and premature death). Productivity loss is

measured in terms of wages, modified to include

nonwage-earning labor (household services).

HECOM does not directly attribute a monetary

burden to physical and psychological suffering.

Estimates of the value of avoided dose were made

by Mubayi using the HECOM model.

Calculations were based on 20- and 30-year old

male and female populations, and future medical

costs and the loss of future earnings were subject

to present worth considerations based on 3

percent and 7 percent real discount rates.

Mubayi's results were updated to 1990 dollars

using the inflation data from the medical costs

and consumer price indices over this period.

Based on Mubayi's adjustments to the HECOM

model, exclusive of any adjustments to account for

1

8lCRP, op. cit., p. 134.

1

9

L A. Nieves and J. J. "Ihwil, "The Economic Costs of

Radiation-Induced Health Effects: Estimated and Simulation,"

NUREG/CR-481 1:PNL-6097, Pacific Northwest Laboratory,

August 1988.

pain and suffering, a best-estimate for the value of

a statistical life is on the order of about $500,000.

The human capital approach reduces the value of

human life to only economic considerations, and

as such, has many recognized shortcomings.2°

This approach typically ignores pain and

suffering, lost enjoyment of life, and the value to

family and community that is not reflected in

GDP. It also has an implicit assumption that

nonproductive individuals, (e.g., retired,

unemployed) have minimal value. A report

prepared for the Administrative Conference of the

United States concluded that by 1988, use of the

human capital method to value a statistical life in

regulatory situations had lost whatever adherents

it formally had.21

Interestingly, note that in 1993, the Health Physics

Society issued a policy statement that linked the

dollar valuation of a person-rem to the portion of

gross domestic product currently being spent on

extending life expectancy. 22 Computationally, this

valuation is very similar to the human capital

approach although its intention is not to assign a

value to human life, but rather to optimize the use

of limited resources for improving life expectancy

and health benefits, when all risks are considered.

This approach produces recommended values

ranging from $40 to $200 per person-rem.

6.2 Willingness-to-Pay Method

The value society (i.e., an average person) places

on improving safety is frequently based on the

"willingness-to-pay" (WTP) approach. In theory,

if there were a market for "buying" safety, then

this approach would yield the price that the

average "consumer" would be willing to pay to

reduce the probability of death or what they

would accept to have that probability increased.

By using such an approach, the valuation of risk

reduction is believed to reflect societal

preferences and when applied in a cost-benefit

framework will, in theory, reflect correct public

allocation decisions. Quantification can, however,

20

A. Bequele, 'The Cost and Benefits of Protecting and Saving

Lives at Work: Some Issues." International Labour Review, Vol.

123, No. 1, January-February 1984.

21

C. P. Gilette and T. D. Hopkins, Federal Agency Valuations of

Human Life," p. 53, July 1988.

22

Health Physics Society, "Position Satement on Radiation Dose

Limits for the General Public, Part II," March 1993.

NUREG-1530 8
be very difficult and the method is criticized

because of*the large uncertainties in derived

values. Nevertheless, many believe that such an

approach is preferred to alternatives for

estimating the value of a statistical life,

particularly the human capital approach. The

WTP approach is recommended by the Office of

Management and Budget (OMB) as the preferred

methodology for monetizing changes in the risk of

fatalities. In addition, Recommendation No.

88-7 of the Administrative Conference of the

United States states that "WTP provides the most

inclusive analysis currently available for

evaluating the benefits derived from regulatory

reduction of fatalities."

WTP studies related to valuing a statistical life

can be grouped into three categories: consumer

market studies, wage-risk studies, and contingent

valuation studies.24

The first category of WTP studies involves

society's WTP based on actual consumer market

studies. Such studies typically examine the

tradeoffs between risk and benefits that people

make in their consumptive decisions (e.g., seat

belts, medical diagnostic tests, etc.). Based on

their cost and probability of saving life, the cost

of saving a life could be viewed as a proxy for the

value of a life saved. In reality, however, many of

these safety features reflect highly cost-effective

ways to save lives and may understate what

society is willing to spend to avert death. As a

result, although such estimates provide an

interesting and important perspective (i.e., what

society is spending to save life), the upper end

values of $2.2 to $3.4 million from Baum's

consumer market review appear to more

appropriately reflect the value of an averted

death. This is because the dollar conversion

factor of concern to the NRC is a threshold value

that reflects how much society is or would be

willing to spend to avoid a statistical death. The

fact that, for certain risks, life can be saved

23Office of Management and Budget, "Regulatory Impact Analysis

Guidance," Appendix V, p. 634, in "Regulatory Program of the

United States Government: April 1, 1992 - March 31, 1993,"

Document No. S/N 041-001-00388-6, U.S. Government Printing

Office, Washington, DC.

24

A Fisher, L G. Chestnut, and D. M. Violette, "The Value of

Reducing Risks of Death: A Note of New Evidence," Journal of

Policy Analysis and Management, Vol. 8, No. 1, pp 89, 1989.

relatively inexpensively should have little bearing

on this consideration.

A second WTP approach involves wage-risk

compensation. This is one of the most thoroughly

studied approaches and presumes that the value

that workers place on their lives is measurable

based on observed wage differentials in

occupations of varying risks. An advantage of

this approach is that quantification is relatively

easy because it is based on situations where real

markets actually exist. Limitations of the

wage-risk approach include workers (1) that may

not know the extent of risk in particular

occupations; (2) that may not be able to change

occupations freely where risks are of concern; and

(3) that may not incorporate the pain and

suffering of friends and relatives, some of whom

may be economically dependent on the worker, in

their decisionmaking. Further it has been argued

that, in many instances, wages and job-related

fatalities seem to be inversely related since

low-wage occupations tend to have a higher

fatality rate than high-wage occupations. The

Baum report identifies over 30 individual wage

risk studies. For many of these studies,

adjustments were made to try and make the

studies as comparable and consistent as possible.

On this basis, Baum reports value of statistical

life estimates in 1990 dollars in a relatively narrow

range ($1.2 million to $3.7 million) and a median

value of $2.5 million.

The third WTP approach, contingent valuation

studies, involves survey techniques to elicit

responses to questions that postulate hypothetical

market choices. The respondents are presented

factual information, often during a personal interview. This information includes a detailed

description of the goods being valued and the

circumstances under which they are being made

available. Respondents are queried on the price

they would be willing to pay for the goods, as well

as the respondent's own personal characteristics

(e.g., age and income). The questions are

carefully designed to minimize bias, and various

techniques are used to randomize the sample and

eliminate "poor" quality data. Although in theory

this approach should most closely define society's

price for buying safety, it is also the most difficult

to quantify. Moreover, the public's perception of

risk is not always consistent with the results

obtained from analytical studies. Also, the means

or approaches to measure the public's perceptions

9 NUREG-1530
are often open to a variety of interpretations,

resulting in answers that are inconsistent or

inappropriate because of differing and undefined

assumptions. Given these considerations and

limitations, Baum reports value of statistical life

estimates in 1990 dollars ranging from a low of

$0.1 million to a high of $15.6 million, with a

median value of $3.1 million.

6.3 Values Implied by Government Agency

Expenditures

The Baum report summarizes studies where the

value of saving a statistical life can be implied by

the expenditures of Government agencies in the

United States. Baum groups these studies into

expenditures on health care, traffic safety, and

programs to reduce radiation exposure. The

studies imply values of saving a statistical life over

a wide dollar range: all amounts are in 1990

dollars.

The health care expenditures data imply a value

of a statistical life ranging from $12,000 for

scoliosis and neuromuscular disease to $2.6

million for kidney dialysis. The traffic safety data

imply values ranging from $85,000 for regulatory

and warning signs to $710,000 for clearing

roadside recovery areas. Implied values from

government expenditures to reduce radiation

exposure range as high as $490 million to reduce

exposure in the defense high-level radioactive

waste program. The comparable figure for the

civilian radioactive waste program is $44 million.

6.4 Values Implied by Regulatory

Requirements Imposed by Government

Agencies

Baum also includes a number of examples in his

report where a value of a statistical life can be

inferred from the costs associated with

implementing safety-related regulations. His

report reviews data published by Travis, et al.25

on the costs and risk reduction of 11 regulations

issued by Federal agencies involving chemical

carcinogenic products. Values (in 1990 dollars)

per fatal-cancer avoided range from $0.04 million

for chromium to $25 million for chlorobenzilate.

The median value is $2.9 million (Baum, Table 8).

25C. C. Travis, S. R. Pack, and A. Fisher, "Cost-Effectiveness as a

Factor in Cancer Risk Management," Environmental International,

Vol. 13, pp. 469-474, 1987.

Travis, et al. concluded that when lifetime cancer

risk exceeds about 4 x 10-3, chemicals were

regulated regardless of cost. Alternatively, if the

lifetime risk ranged from 10-6 to 4 x 10-3,

regulations were only implemented if the value of

a statistical life was less than $2 million. Thus,

the relevance of relatively high dollar estimates of

the value of a statistical life derived from previous

regulatory decisions is uncertain or unclear, since

it is most likely that in these instances the

decision was not based on a cost-benefit analysis

but rather was based solely on the unacceptability

of the risk.

Baum cites examples of other regulatory actions

taken by the Department of Transportation

(DOT), the Environmental Protection Agency

(EPA), the Occupational Safety and Health

Administration (OSHA), and the Consumer

Product Safety Commission (CPSC) where the

implied value of a statistical life in 1990 dollars

ranges from $130,000 to $91 billion. Recent work

by Van Houtven and Cropper suggests that the

implied value of a statistical life used by EPA in

regulating asbestos under the Toxic Substances

Control Act and pesticides under the Federal

Insecticide, Fungicide, and Rodenticide Act falls

between $49 and $52 million (measured in 1989

dollars). 26 OMB has compiled a list of a large

number of Federal agency actions where the cost

of a premature death averted (in 1990 dollars) as

a result of an agency's regulatory actions ranges

from $.1 to $5,700,000 million. 27

6.5 Values Based on Radiation Protection

Activities in Other Countries

Baum's review included contacting other countries

to obtain information on their cost-benefit

guidance in dealing with radiation protection

issues. In the United Kingdom (UK), the National

Radiological Protection Board (NRPB) has

considered both the human capital and WTP

approaches in estimating an appropriate value of

a statistical life. Up until about 1990, the NRPB

resisted using values based on WTP because of, in

their view, the paucity of reliable WTP data.

Recently, the NRPB has cited with approval a

recommendation for a value of statistical life in

the range of about $3 million to $4.5 million, and

26

G. L Van Houlven and M. L Cropper, "When is a Life Too

Costly to Save? The Evidence from Environmental Regulations,"

Resources, Resources for the Future, p. 6, Winter 1994.

27 0MB, op. cit., p. 28.

NUREG-1530 10
a study28 indicating a value of statistical life on

the order of $2.4 million in 1990 dollars.

It is interesting to note that the UK also looked at

the value of statistical life in ddaling with

transportation safety issues. In 1988, a report

sponsored by the UK Department of Transport

proposed that the then current reliance on the

human capital approach be abandoned in favor of

the WTP approach and that the value of life be

set at about $1.0 million (in 1990 U.S. dollars). In

1989, the UK sponsored a WTP survey involving

over 1000 respondents and professional

interviewers. This study concluded that residents

in the UK were prepared to spend $3.2 million for

certain highway improvements to save a life.

6.6 Representative Value of a Statistical

Life

As noted earlier, the variation in the value of

statistical life as estimated and used for a number

of applications is tremendously broad (less than

$100,000 to billions of dollars). However, when

viewed critically, it appears that median values for

a realistic value of a statistical life tend to range

from a low of about $1.3 million to a high slightly

over $3 million. Both higher and lower estimates

were identified and evaluated; however, higher

estimates seem to result from decisions based

primarily on motivations other than the WTP

concept, and lower estimates seem to reflect more

the cost of saving a life rather than the value of

life. The NRC also chose to dismiss the human

capital approach for estimating the value of a

statistical life because it understates value by only

addressing one aspect of human life.

The NRC contends that the dollar per person-rem

conversion factor should be reasonable and

representative, and thus should be consistent with

the preponderance of the estimates. A value of a

statistical life of $3 million seems to best match

these objectives. This value (1) is consistent with

results from the WTP approach, which is

recommended by OMB and the Administrative

Conference of the United States, and is most

favored in the literature; (2) reflects median values

of a statistical life estimated in many studies; (3)

2

8D. Ives, D. Thieme, and R. Kemp, 'The Statistical Value of Life

and Safety Investment," Reseach Report No. 13, Environmental

Risk Assessment Unit, Unversity of East Anglis, Norwich, UK,

1993.

is representative of values used by other Federal

agencies responsible for public health and safety;

(4) is in general agreement with values used for

regulatory decisionmaking in other countries; and

5) is specifically cited by OMB as a "best

estimate" for the value of a statistical life using

the WTP approach.29

A representative value of a statistical life and not

an upper bound is appropriate for several

reasons. First, the value will influence national

energy-related decisions, and realistic safety-cost

tradeoffs help to ensure an equitable treatment of

all energy sources or options. Second, a value

that is in reasonable agreement with values used

by other Federal agencies involved in health and

safety will help ensure risk harmonization and

that decisions throughout the Federal

Government reflect an efficient and proper

allocation of society's resources. Third, if too

high a value is chosen, money that would

otherwise be available to society to save lives

would not be available, and a regulatory

requirement could have the perverse effect of

increasing overall mortality risk.30 Finally, a

representative value is a useful guide in making

decisions on "worthwhile" regulatory initiatives

and reflects one reference point. NRC's

regulatory decisions are ultimately based on

numerous considerations of which the results of a

regulatory analysis are but one input. Also, it

bears repeating that the dollar value ultimately

attached to averted dose will have no effect on

actions deemed necessary by the NRC to ensure

adequate protection to the health and safety of

the public.

7. RISK COEFFICIENTS FOR

STOCHASTIC HEALTH EFFECTS

Once an appropriate value of statistical life has

been estimated, the parameter needed to convert

that value to a dollar per person-rem figure is the

risk coefficient that establishes the nominal

probability for stochastic health effects

attributable to radiological exposure. The

national and international bodies (NCRP, ICRP)

responsible for evaluating and recommending

29OMB, op. cit., p. 27.

30

0MB, op, cit., This concept, referred to by OMB as "health-health analysis," is discussed at pages 19-30 of OMB,

"Regulatory Program of the United States Government"

document.

11 NUREG-1530
such a value are in close agreement. The NRC

proposes to use the latest recommendations of the

ICRP as presented in their Publication No. 60. In

general, for doses to the general population, their

recommendation is a risk coefficient of 7.3 x 10-4

per rem.31 This coefficient accounts for the

probability of occurrence of a harmful health

effect and a judgement of the severity of the

effect. The coefficient includes allowances for

fatal and nonfatal cancers and for severe

hereditary effects. The nonfatal cancers and

hereditary effects are translated into loss-of-life

measures based on a perceived relationship

between quality of life and loss of life. In this

way, the value of statistical life is applicable

across all contributors to the total health risk

coefficient. For NRC regulatory applications, it is

proposed that the risk coefficient be reduced to

one significant digit to better reflect the level of

accuracy inherent in its derivation. The risk

coefficient of 7.0 x 10-4 per person-rem can than

be used with the value of a statistical life to derive

a dollar conversion factor per person-rem. Using

the risk coefficient in this manner has the effect of

attributing proportional risks to very small doses

even though there is no convincing evidence of

proportional risks at background levels. However,

in the absence of such evidence, scientific

organizations such as ICRP and NCRP have

concluded that it is prudent to assume a linear

relationship for the purpose of planning and

implementing radiation protection programs.

8. DOLLAR PER PERSON-REM

CONVERSION FACTOR

The dollar per person-rem conversion factor for

health effects can now be calculated as the

product of the value of a statistical life and the

risk coefficient. Based on the preceding

recommendations concerning the value of a

statistical life ($3 million) and the risk coefficient

for stochastic health effects (7.0 x 10-4), the dollar

conversion factor for health effects would equal $2100 per person-rem. Given the large

uncertainties already inherent in this approach, it

would appear reasonable to adopt a dollar

conversion factor rounded to the nearest thousand

dollars. Thus, the NRC proposes that $2000 per

person-rem be used for routine emissions,

accidental releases, and 10 CFR Part 20 ALARA

programs (i.e., occupational exposures).

Pertaining to occupational exposures, the NRC

acknowledges that, for ALARA determinations,

many licensees employ conversion factors in

excess of $2000 per person-rem. This is

particularly true in nondesign ALARA

determinations where licensees consider trade offs

between occupational dose and alternative

technologies and procedures (e.g., additional

shielding, remote or robotic tools). These higher

values are typically influenced by utility-specific

manpower constraints and other labor cost

considerations. These are valid utility

considerations in evaluating occupational

exposures, and licensees are expected to continue

to use these higher conversion factors. Further,

such values are not necessarily inconsistent with

the NRC's $2000 value that only captures health

effects, as other impacts such as labor cost

considerations can be treated as additive elements

in the NRC's value-impact analysis.

The NRC acknowledges that there may be unique

circumstances where other dollar conversion

factors may warrant consideration. For example,

doses to a population whose age distribution is

not representative of the general population could

be subject to a different risk coefficient because

health risks are directly related to the age

distribution of the affected population. Further,

recognizing the uncertainties inherent in

establishing a representative conversion factor,

alternative values to capture the uncertainties may

be warranted. Thus, it would be reasonable to

expect an analyst to include alternative valuations

in regulatory analyses in order to show the

decision maker the sensitivities of the proposed

action to relevant considerations. However, the

base case computations in a regulatory analysis

will normally use the recommended dollar

conversion factor of $2000 per person-rem.

The dollar per person-rem conversion factor is for

stochastic effects only and is not to be applied to

deterministic effects..2 It should also not be

applied to any individual dose that could result in

an early fatality. These omissions are consistent

with NRC's view that the monetizing of mortality

32

Deterministic health effects in humans can result from general or localized tissue irradiation causing an amount of cell killing that

cannot be compensated for by the proliferation of viable cells.

The resulting loss of cells can cause severe and clinically detectable impairment of function in a tissue or organ. ICRP, op.

cit., p. 99. 31

ICRP op. cit., p. 70.

NUREG-1530 12
effects as it relates to the value of any single

individual's life is not appropriate. Rather, its use

is as an estimate of the value of small reductions

in the probability of death for a given population.

From a practical perspective, the NRC believes

that regulatory issues involving deterministic

effects and or early fatalities would be very rare,

and can be addressed on a case-specific basis, as

the need arises.

9. IMPLICATIONS OF REVISED

CONVERSION FACTOR POLICY

The $2000 per person-rem conversion factor

discussed in this report reflects a two-fold

increase from the $1000 per person-rem

conversion factor that has historically been used

by the NRC. However, as discussed in Revision 2

of the NRC's Regulatory Analysis Guidelines, any

increase in the dollar value of health effects will

now be subject to present worth considerations

that will decrease the apparent effect of a new,

higher dollar per person-rem conversion factor.

For most regulatory applications, the net effect of

these two changes is a wash. For example, the

total dollar value of averting one person-rem per

year over a 20-year timeframe is $20,000 based on

an undiscounted $1000 conversion factor policy.

Applying a $2000 conversion factor and assuming

the Guidelines recommendation of a 7-percent

real discount rate results in a total dollar value of

$21,200.

Another change in NRC's conversion factor policy

involves separate quantification of offsite property

consequences. The NRC recognizes that separate

quantification of offsite property will have limited

application in regulatory decision making. This is

because offsite property consequences are not an

expected outcome for most radiological releases.

This is true for occupational doses, routine

emissions, doses from contaminated sites, and

most accidental releases from nonpower reactors.

However, in those regulatory applications

involving severe power reactor accident scenarios,

the difference in total dollar value could be

important. For example, applying the same

assumptions just stated, but this time including a

$3000 per person-rem allowance for offsite

property consequences, the total dollar value of

averting one person-rem per year over 20 years

would increase from $20,000 to $53,000, an

increase of about a factor of 2.5. Further, under

unique circumstances the differential could be far

more significant. For example, consider a

proposed regulatory re4uirement that reduces the

probability of severe power reactor accidents in

which there is typically a long delay in offsite

release. Since interdiction measures can be very

effective in such cases, the public health and

safety benefit based solely on person-rem averted

would be very small. This however, would

completely omit the large offsite property

consequences associated with the interdiction

effort.

As part of the NRC's overall reassessment of an

appropriate dollar per person-rem conversion

factor, the NRC considered the potential impact

of any change in the $1000 per person-rem factor

on current regulations and past regulatory

decisions. In the introductory sections of this

report, the NRC attempted to characterize the

role that the $1000 per person-rem played, and is

expected to exert in future NRC regulatory

decisions. First, with regard to regulatory

decisions concerning radwaste system design

alternatives for nuclear power plants (10 CFR

Part 50, Appendix I), the NRC staff involved in

those assessments have indicated that increases in

the conversion factor of at least an order of

magnitude would be necessary to justify any

reassessment of these decisions. Thus, the

changes in the conversion factor policy as

considered in this report would not bring into

question these past decisions. Second, for all

other regulatory applications where $1000 per

person-rem has been used by the NRC, the NRC

is not proposing that previous decisions be

reviewed or updated based on this revised

conversion factor policy because in most

regulatory applications the difference in total

dollar valuation is minimal between these two

options. Furthermore, even for regulatory

decisions involving safety enhancements for severe

power reactor accidents where the potential

difference in total dollar valuation could be large,

the NRC does not propose revisiting these past

regulatory decisions unless, on a case-specific

basis, an unanticipated need to do so arises.

There are several reasons for this position. First,

the $1000 per person-rem value has been used by

the NRC as a figure of merit, and as one input

among many in the regulatory decision. Second,

13 NUREG-1530
in recognition of the uncertainties inherent in

such a figure of merit, NRC staff and

decisionmakers would typically rely more heavily

on other considerations when the break-even

conversion factor was close (within a factor of 5)

to the $1000 per person-rem guide. Finally, it is

very likely that the cost of making an

improvement to a licensed facility to reduce the

probability of radiation exposure has increased

commensurately with the increase in dollar

valuation that would result from the changes in

conversion factor policy under consideration in

this report.

10. PROCESS TO INCORPORATE

THE REVISED DOLLAR PER

PERSON-REM VALUE AS NRC

POLICY

The $2000 per person-rem conversion factor and

related changes in NRC's conversion factor policy

have been incorporated in "Regulatory Analysis

Guidelines of the U.S. Nuclear Regulatory

Commission," NUREG/BR-0058, Revision 2,

November 1995. In addition, the NRC intends to

provide more detailed guidance on implementing

this policy in NRC's "Regulatory Analysis

Technical Evaluation Handbook" (Handbook),

which is scheduled to be published in 1996.

The deletion of all references to the present $1000

per person-rem value in existing regulations and

guidance will be considered. The only reference

in the Code of Federal Regulations to the,$1000

per person-rem value is in 10 CFR Part 50,

Appendix I (Sec.II)(D) that concerns routine

emissions for radwaste system designs at power

reactors. Regulatory Guide 1.109 contains

guidance on performing dose calculations and the

use of $1000 per person-rem for the dollar

valuation for radwaste system design alternatives

for power reactors. Also, Regulatory Guide 8.37

suggests the use of $1000 per person-rem in

determining ALARA levels for radiological

effluent from materials facilities. NUREG-0933,

'A Prioritization of Generic Safety Issues" utilizes

$1000 per person-rem in assigning priorities and

resolving generic safety issues. In other regulatory

applications [e.g., regulatory analyses, backfit

analyses, SAMDA analyses, and analyses in

response to 10 CFR 50.34(f)(1)(i)], the NRC

currently draws upon the 1983 "Handbook for

Value-Impact Assessment" as the basis for its

valuation of radiological dose and will

correspondingly draw upon the revised Handbook

when it is issued in final form.

The NRC recognizes that updating the dollar per

person-rem conversion factor may be appropriate

in the future. Consequently, the NRC intends

that the dollar per person-rem conversion factor

be subject to periodic review. The dollar per

person-rem conversion factor would only be

adjusted if changes in the underlying parameters

cause the base conversion factor (when rounded

to the nearest thousand dollars) to shift up or

down by a thousand dollars or more. The NRC's

update will consider such factors as changes in

the value of the dollar, new research addressing

the appropriate value of a statistical life in

governmental decisionmaking, or a change in

recommended radiation risk coefficients.

NUREG-1530 14
NRC FORM 335 U.S. NUCLEAR REGULATORY COMMISSION 1. REPORT NUMBER

(2-89) (Assigned by NRC, Add Vol.,

NRCM 1102, Supp., Rev., and Addendum Num3201, 3202 BIBLIOGRAPHIC DATA SHEET bers, if any.)

(See Instructions on the reverse) NUREG-1530

2. TITLE AND SUBTITLE

Reassessment of NRC's Dollar Per Person-Rem Conversion Factor Policy 3. DATE REPORT PUBLISHED

MONTH I YEAR

December 1995

4. FIN OR GRANT NUMBER

5. AUTHOR(S) 6. TYPE OF REPORT

Technical

7. PERIOD COVERED (Inclusive Dates)

8. PERFORMING ORGANIZATION - NAME AND ADDRESS (If NRC, provide Division, Office or Region, U.S. Nuclear Regulatory Commission, and

mailing address; If contractor, provide name and mailing address.)

Division of Regulatory Applications

Office of Nuclear Regulatory Research

U.S. Nuclear Regulatory Commission

Washington, DC 20555-0001

9. SPONSORING ORGANIZATION - NAME AND ADDRESS (If NRC, type "Same as above"; if contractor, provide NRC Division, Office or Region,

U.S. Nuclear Regulatory Commission, and mailing address.)

Same as item #8

10. SUPPLEMENTARY NOTES

11. ABSTRACT (200 words or less)

The U.S. Nuclear Regulatory Commission (NRC) has completed a review and analysis of its dollar per person-rem

conversion factor policy. As a result of this review, the NRC has decided to adopt a $2000 per person-rem

conversion factor, subject it to present worth considerations, and limit its scope solely to health effects. This is in

contrast to the previous policy and staff practice of using an undiscounted $1000 per person-rem conversion factor

that served as a surrogate for all offsite consequences (health and offsite property). The policy shift has been

incorporated in "Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission," NUREG/BR-0058,

Revision 2, November 1995.

12. KEY WORDS/DESCRIPTORS (List words or phrases that will assist researchers in locating the report.) 13. AVAILABILITY STATEMENT

Unlimited

Value-Impact Analysis 14. SECURITY CLASSIFICATION

Regulatory Analysis (This Page)

Radiological Exposure Unclassified

Dollar Per Person-rem Conversion Factor (This Report)

Value of Statistical Life Unclassified

Health and Safety Benefit 15. NUMBER OF PAGES

16. PRICE

NRC FORM 335 (2-89)
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