S. HRG. 108–507

OVERSIGHT OF THE NUCLEAR REGULATORY

COMMISSION

HEARING

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE,

AND NUCLEAR SAFETY

OF THE

COMMITTEE ON ENVIRONMENT AND

PUBLIC WORKS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MAY 20, 2004

Printed for the use of the Committee on Environment and Public Works

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OVERSIGHT OF THE NUCLEAR REGULATORY COMMISSION

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94–607 PDF 2006

S. HRG. 108–507

OVERSIGHT OF THE NUCLEAR REGULATORY

COMMISSION

HEARING

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE,

AND NUCLEAR SAFETY

OF THE

COMMITTEE ON ENVIRONMENT AND

PUBLIC WORKS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MAY 20, 2004

Printed for the use of the Committee on Environment and Public Works

(

(II)

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

JAMES M. INHOFE, Oklahoma, Chairman

JOHN W. WARNER, Virginia

CHRISTOPHER S. BOND, Missouri

GEORGE V. VOINOVICH, Ohio

MICHAEL D. CRAPO, Idaho

LINCOLN CHAFEE, Rhode Island

JOHN CORNYN, Texas

LISA MURKOWSKI, Alaska

CRAIG THOMAS, Wyoming

WAYNE ALLARD, Colorado

JAMES M. JEFFORDS, Vermont

MAX BAUCUS, Montana

HARRY REID, Nevada

BOB GRAHAM, Florida

JOSEPH I. LIEBERMAN, Connecticut

BARBARA BOXER, California

RON WYDEN, Oregon

THOMAS R. CARPER, Delaware

HILLARY RODHAM CLINTON, New York

ANDREW WHEELER, Majority Staff Director

KEN CONNOLLY, Minority Staff Director

SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE, AND NUCLEAR SAFETY

GEORGE V. VOINOVICH, Ohio, Chairman

MICHAEL D. CRAPO, Idaho

CHRISTOPHER S. BOND, Missouri

JOHN CORNYN, Texas

CRAIG THOMAS, Wyoming

THOMAS R. CARPER, Delaware

JOSEPH I. LIEBERMAN, Connecticut

HARRY REID, Nevada

HILLARY RODHAM CLINTON, New York

(III)

CONTENTS

Page

MAY 20, 2004

OPENING STATEMENTS

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 9

Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New York ........ 29

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 4

Jeffords, Hon. James M., U.S. Senator from the State of Vermont .................... 20

Reid, Hon. Harry, U.S. Senator from the State of Nevada .................................. 22

Voinovich, Hon. George V., U.S. Senator from the State of Ohio ........................ 1

WITNESSES

Diaz, Nils J., Chairman, U.S. Nuclear Regulatory Commission .......................... 6

Prepared statement .......................................................................................... 49

Responses to additional questions from:

Senator Inhofe ........................................................................................... 57

Senator Jeffords ......................................................................................... 58

Senator Lieberman .................................................................................... 71

Senator Voinovich ..................................................................................... 63

Fertel, Marvin, senior vice president of Nuclear Generation, Nuclear Energy

Institute ................................................................................................................ 36

Prepared statement .......................................................................................... 209

Responses to additional questions from:

Senator Inhofe ........................................................................................... 218

Senator Jeffords ......................................................................................... 219

Senator Voinovich ..................................................................................... 220

Jones, Barclay, professor, Department of Nuclear, Plasma, and Radiological

Engineering, University of Illinois at Urbana-Champaign .............................. 42

Prepared statement .......................................................................................... 313

Kray, Marilyn, vice president for project development, Exelon Generation ....... 40

Prepared statement .......................................................................................... 307

Responses to additional questions from Senator Jeffords ............................. 312

Lochbaum, David, nuclear safety engineer, Union of Concerned Scientist ........ 39

Prepared statement .......................................................................................... 299

Responses to additional questions from Senator Jeffords ............................. 306

McGaffigan, Edward., Jr. Commissioner, U.S. Nuclear Regulatory Commission ........................................................................................................................ 9

Merrifield, Jeffrey S., Commissioner, U.S. Nuclear Regulatory Commission ..... 9

ADDITIONAL MATERIAL

Letter, Nils J. Diaz, NRC, dated June 2, 2004 ..................................................... 17

Reports:

GAO, Nuclear Regulation, NRC Needs to More Aggressively and Comprehensively Resolve Issues Related to the Davis-Besse Nuclear Power

Plant’s Shutdown, May 2004 ...................................................................... 73–208

Institute of Nuclear Power Operations, Principles for a Strong Nuclear

Safety Culture............................................................................................ 224–238

National Academy for Nuclear Training Educational Assistance Program,

April 2003................................................................................................... 320–335

Nuclear Energy Institute, NEI Work Force Survey, May 2004 ................ 239–298

Nuclear Energy Research Advisory Committee, Nuclear Power Engineering Curriculum Task Force....................................................................... 314–319

Page

IV

Text, Amendment to the Energy bill, S. 14 ........................................................... 15

(1)

OVERSIGHT OF THE NUCLEAR REGULATORY

COMMISSION

THURSDAY, MAY 20, 2004

U.S. SENATE,

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,

SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE, AND

NUCLEAR SAFETY,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:33 a.m. in room

406, Senate Dirksen Building, the Hon. George V. Voinovich,

(chairman of the subcommittee) presiding.

Present: Senators Voinovich, Carper, Reid, Clinton, Jeffords [ex

officio] and Inhofe [ex officio].

OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S.

SENATOR FROM THE STATE OF OHIO

Senator VOINOVICH. The subcommittee will come to order. I

would like to thank the witnesses for being here today.

I apologize for the delay in starting the hearing today. We had

the pleasure of spending 45 minutes with the President of the

United States where he did an outstanding job of laying out where

we have been and where we are going with our domestic policy,

and also in foreign relations.

Today’s hearing continues our ongoing oversight of the Nuclear

Regulatory Commission. This is the sixth in a series of oversight

hearings that began in 1998 when Senator Inhofe was Chairman

of this subcommittee. I thank Chairman Inhofe for his leadership

on this issue as strong oversight of the NRC is critical to the welfare of the American people.

Nuclear power is necessary and a sound part of our energy future. It makes sense for our environment and for our economy. It

is a reliable and stable source of energy, providing 20 percent of

the country’s electricity with zero harmful air emissions. In my

State it provides about 12 percent of the energy that is produced.

In order to harmonize our economic, energy, and environmental

needs, nuclear power must continue to grow. The NRC plays a vital

role in its future. The three basic components of NRC’s mission are

to regulate the Nation’s civilian use of nuclear materials in order

to promote the common defense and security, protect the environment, and ensure fail safe protection of public health and safety.

While we so often talk about the goals of our Agencies, we need

to also talk about whether they have the work force and the budget

to get the job done. We have goals that we set. Too often, my obserVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
2

vation has been, that we do not spend enough time on the human

resources and the budget we need to get the job done.

As I have done in the two previous oversight hearings that I

have chaired, I want to make myself perfectly clear.

The No. 1 issue for the NRC is safety. Period. There is no greater

issue. It is critical that the NRC be a credible Agency that can

guarantee the safety of the Nation’s 103 operating nuclear plants.

Unfortunately, the NRC’s credibility is in serious questions these

days due to the March 2, 2002, shutdown of the Davis-Besse Nuclear Power Station, which is located in my home State in Oak

Harbor. The discovery of a pineapple-sized cavity in the plant’s vessel head forced the shutdown of the plant for 2 years. This incident

has been referred to as: ‘‘The most serious safety issue confronting

the Nation’s commercial nuclear power industry since the accident

at Three Mile Island in 1979.’’

While I am pleased that the plant has been restarted, is running

at 100 percent, and has had no additional problems, many questions remain about the NRC’s actions before and after this incident. I asked the General Accounting Office: ‘‘The NRC needs to

more aggressively and comprehensively resolve issues related at

the Davis-Besse Nuclear Power Plant shutdown.’’ The report was

released this week to be put into the record.

Without objection, so ordered.

[The referenced document follows on page 73.]

Senator VOINOVICH. This report looked at three questions: No. 1,

why did not the NRC identify and prevent the vessel head corrosion at Davis-Besse? No. 2, was NRC’s process for deciding to allow

the plant to delay shut down credible? No. 3, is sufficient action

being taken to prevent similar future problems?

I have serious concerns about the answers GAO found to these

three questions. I want to hear from the Commissioners today on

the following issues: Communication failures, questionable risk

analysis, and the NRC’s refusal to assess licensee safety culture, or

to develop specific guidelines for when to shut down a plant.

Let me be clear. I do not want these issues addressed in the context of what happened, but what is going to be done to make sure

that nothing like this happens again. Since this is my main concern, the following from the GAO report is even more appalling:

‘‘The underlying causes of the Davis-Besse incident underscore the potential for

another incident to occur. This potential is reinforced by the fact that both prior

NRC Lessons Learned Task Forces and we, GAO, have found similar weakness in

many of the same NRC programs that led to the Davis-Besse incident. NRC has not

followed up on prior Task Force recommendations to assess whether the lessons

learned were institutionalized.’’

They are talking about not only the lessons learned from this investigation that was made, but other investigations that have been

made in the past. They have said that the lessons learned from

those other incidents have not been followed through by the Nuclear Regulatory Commission.

Basically, the GAO found that many of the same problems identified in this investigation were also identified in incidents before

Davis-Besse but never have been fully addressed. This is unacceptable. I am not going to let the Davis-Besse Lessons Learned Task

Force recommendations fall by the wayside.

3

Unfortunately, the GAO claims that this may happen because of

resource constraints at the NRC which gets back to their budget

and the number and quality of individuals that are working for the

Commission.

At this point, I want to state for the record that this is not a

Davis-Besse hearing. This incident basically serves as the model to

what can happen when we lose focus on the main issue—safety.

The NRC and the industry must hold themselves to a higher standard. In fairness to the Commission, I was impressed by their fastidiousness in deciding when Davis-Besse was ready to be restarted. This is the kind of scrutiny that I want to see for all the

facilities of our country.

As Chairman of the Subcommittee on Oversight of Government

Management in the Federal Work Force, and the Governmental Affairs Committee, I know that this level of oversight is dependent

upon the human capital needs of the NRC, which I have long been

concerned about. I am convinced that if both the NRC and

FirstEnergy had the right people with the right knowledge and

skills and the right place at the right time, the Davis-Besse incident would never have happened.

Moreover, if the NRC is going to be able to move forward and

credibly guarantee the safety of our nuclear facilities, they need to

make sure they have enough people with the necessary level of

knowledge and experience. I was shocked when I first reviewed the

NRC and found that they had six times as many employees over

the age of 60 than under 30. I know, Mr. Diaz, you have been

working on that. But I want to hear more about it today. I know

the Commission has been working hard, as I said, on this issue. I

am interested to know what progress is being made in that regard.

In addition to the implementation of the Lessons Learned Task

Force recommendations, several important licensing issues are all

occurring at the same time—relicensing for existing plants, which

is an enormous responsibility, potential applications to build new

facilities, and Yucca Mountain.

Everybody should understand this.

I am interested in hearing from all the witnesses today about the

human capital situation throughout the industry. I am glad we

have representatives here from academia on what is being done out

there to address this issue.

I welcome all the witnesses here today and look forward to a

good and thorough discussion about how the NRC and the industry

will move forward with credibility with the right people and with

safety at the forefront of all actions to ensure that nuclear power

continues to be an important part of meeting our economic energy

and environment needs.

That being said, the most important thing we need to do is to

give complete assurance to the people of this country that our nuclear facilities are fail safe. This is very important because many

people have come to me over the last 2 years and expressed concerns about being safe.

I will never forget the telephone calls I got from friends of mine

after the Davis-Besse incident that are in the area and said,

‘‘George, what is going on? I thought things were fine. People of

this country have to know when they go to bed at night that these

4

are fail safe. They have nothing to worry about. Our stress level

is enough as it is to be worrying about nuclear power in this country.’’ Simply put, people ought not to go to bed, as I said, worrying

about the safety of our nuclear power plants.

I notice that our distinguished Chairman is here, who was the

Chairman of this subcommittee. Before you came in, I acknowledged to our witnesses and to those here that you started this in

1998 to review the Nuclear Regulatory Commission.

OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S.

SENATOR FROM THE STATE OF OKLAHOMA

Senator INHOFE. That is right; we did. Mr. Chairman, I appreciate your carrying this on. That is right; in 1998 we had an oversight hearing when I became Chairman of this subcommittee. It

was the first oversight hearing in over 10 years. That is not right.

We corrected it. Many good things have happened since that time.

We have made progress. Each one of you has been a part of that.

You are aware of this progress.

The relicensing program, which no one thought would work in

1998, has become almost routine. Major reforms have taken place

on the enforcement side. We have seen real progress with the NRC

moving toward risk-based approaches.

Recent events have tested the NRC and thus far I am generally

pleased with how the Commission has responded. We need to learn

from these challenges, implementing solutions, and moving forward. Backsliding into the inefficient and ineffective days of the

past is not an option. We are just not going to do it.

Acting Chairman Diaz, Commissioners Merrifield and

McGaffigan—the three of you and the staff of the NRC should be

commended for the work that you have done. Of course, no job is

ever finished. I believe that you have as many challenges facing

you today as we did in 1998, if not more.

Unfortunately, unless the White House can find a replacement

for Admiral Grossenbacher, whose nomination languished over 7

months before he withdrew in pursuit of other opportunities—in

frustration, I might add—I fear that you will be the three-person

Commission for a while.

During today’s hearing and over the coming months, I would like

to hear your thoughts and views from the second panel on this

issues. There have been a few safety issues in the last few years,

such as: No. 1, some recent events at Vermont Yankee. No. 2, how

well is the risk-based approach working? As an Agency are you

able to identify the real risks and address them in a safe manner?

No. 3, the NRC and the nuclear industry has a large number of

employees, close to retirement age, as was stated by the Chairman,

do you and will you have a staff to replace them in order to address

the major problems that are coming up, such as the continuing relicensing process, the permit application for Yucca Mountain, and

the potential permits from the different consortiums who are interested in building new nuclear facilities? All three of these events

will be occurring at roughly the same time. Do you have the resources that you need to address these?

In addition to the employees that the NRC headquarters and the

Resident Inspectors, we also have four NRC regions which have

5

been in place since the 1970’s. Would the NRC function more effectively if we consolidated all of the staff to the headquarters keeping

the Resident Inspectors in place?

This could eliminate some redundancy and overhead and help

provide the headquarters with the experienced staff they need.

How is the interaction between the EPA and the NRC on the setting of radiation standards? I have long thought the EPA does not

do an adequate job assessing the real risks involved in radiation.

Now that the politics of the standards set by the EPA for Yucca

Mountain are over, perhaps it is time to address EPA’s performance also.

I would just like to say both Senator Voinovich and I are very

concerned with the crisis we have in this country. It is an energy

crisis. I cannot think of any group, any Commission, that is going

to have to be more proactive in helping to resolve this. We often

say that we had a good Energy bill that passed the House. It just

did not pass the Senate. But it addressed nuclear energy as well

as all the other forms. I think Senator Voinovich and I are together

in saying that we need all of them. We need fossil fuel. We need

coal. We need nuclear. We need renewables. You folks will be playing a very active part in that as we pursue new opportunities in

nuclear energy.

I look forward to hearing my three good friends who are witnesses.

[The prepared statement of Senator Inhofe follows.]

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE

STATE OF OKLAHOMA

First, I would like to thank Chairman Voinovich for holding today’s annual oversight hearing which continues the process I started in 1998 when I was the Chairman of this subcommittee. Since 1998 the NRC has made tremendous progress.

The relicensing program, which no one thought would work in 1998, has become

almost routine. Major reforms have taken place on the enforcement side, and we

have seen real progress with the NRC moving toward risk-based approaches.

Recent events have tested the NRC—and thus far I am generally pleased with

how the Commission has responded. We need to learn from these challenges, implement solutions and move forward. Backsliding into the inefficient and ineffective

days of the past is not an option.

Acting Chairman Diaz, and Commissioner’s Merrifield and McGaffigan; the three

of you and the staff at the NRC should be commended for the work you have done.

Of course no job is ever finished and I believe you have as many challenges facing

you today as we did in 1998, if not more. Unfortunately, unless the White House

can find a replacement for Admiral Grossenbacher, whose nomination languished

for over 7 months before he withdrew to pursue other opportunities, I fear you will

be a three-person Commission for awhile.

During today’s hearing and over the coming months, I would like to hear your

thoughts, and the views from the second panel, on several issues.

(1) There have been a few safety issues in the last few years, such as some recent

events at Vermont Yankee. How well is the risk-based approach working. As an

Agency, are you able to identify the real risks and address them in a safe manner?

(2) The NRC, and the nuclear industry, has a large number of employees close

to the retirement age. Do you and will you have the staff in place to address the

major upcoming issues such as:

the continuing relicensing process,

the permit application for Yucca Mountain, and

the potential permits from the different consortiums, who are interested in

building new nuclear facilities.

All three of these events will be occurring at roughly the same time, do you have

the resources that you need?

6

(3) In addition to the employees at the NRC headquarters and the resident inspectors, we also have four NRC Regions, which have been in place since the 70’s. Would

the NRC function more efficiently if we consolidated all of the staff to the headquarters, keeping the resident inspectors in place? This could eliminate some redundancy in overhead and help provide the Headquarters with the experienced staff

they need.

(4) How is the interaction between the EPA and the NRC on the setting of radiation standards? I have long thought that the EPA does not do an adequate job assessing the real risks involved in radiation. Now that the politics of the standards

set by EPA for Yucca Mountain are over, perhaps it is time to address EPA’s performance.

With these issues in mind, I am interested in today’s testimony and the views of

the witnesses from both panels. Thank you.

Senator VOINOVICH. Thank you very much, Senator Inhofe.

Due to the late start of the hearing, I am going to ask my colleagues and the witnesses to limit their remarks to 5 minutes.

Mr. Diaz, I think we made it clear that we expect you to lead

off. We are expecting 2-minute summaries from Mr. McGaffigan

and Mr. Merrifield. We welcome you. You have a heavy responsibility. We know that. We are anxious to hear from you.

Mr. Diaz.

STATEMENT OF NILS J. DIAZ, CHAIRMAN, U.S. NUCLEAR

REGULATORY COMMISSION

Mr. DIAZ. Thank you, Mr. Chairman, Senator Inhofe, and members of the subcommittee. I appreciate the opportunity to appear

before you today with Commissioner McGaffigan and Commissioner Merrifield. We are, of course, here to discuss the Nuclear

Regulatory Commission’s activities, to protect the public health and

safety, to protect the common defense and security, and to protect

the environment. We also appreciate the past support that we have

received from the subcommittee and the committee as a whole, and

we look forward to continuing working with you.

In recent years we have seen significant changes in the oversight

exercised by the NRC in the areas of safety, security, and emergency preparedness. Perhaps, like Senator Inhofe said, we have

seen significant changes since 1998. We are pleased to be working

with the subcommittee since that time, and the committee as a

whole.

Overall, the industry has performed well in these three areas of

safety, security, and preparedness. The NRC has become increasingly focused on those matters that are most important to safety

and continues to increase the use of risked-informed decisionmaking.

From a regulator’s viewpoint, there are grounds for cautious optimism about the state of nuclear safety today.

The level of reactor safety has increased steadily. From the

standpoint of American public protection, the record is indeed admirable with not a single member of the public ever exposed to a

harmful level of radiation from a U.S. nuclear power plant. We intend to keep it that way.

The revised Reactor Oversight Process, which we established

over 3 years ago, continues to provide to the Agency a disciplined

approach to the determinations of licensees’ performance. At the

end of the 2003 calendar year, there were two plants designated for

the highest level of scrutiny under the Reactor Oversight Process—

7

the Cooper Plant in Nebraska, and the Point Beach Plant in Wisconsin.

The Cooper and Point Beach Plants have received significant attention from our regional and headquarters office. We are confident

that these plants are on the path to resolving long—standing problems.

Over the past 2 years, the NRC staff has also devoted significant

resources for enhanced regulatory oversight of the Davis-Besse

Plant following the discovery of extensive degradation of the reactor vessel head, including the in-depth assessment of the startup

oversight process.

The existence, undetected for so long, of a hole in the head of the

reactor was an unacceptable failure on the part of the licensee and

of the NRC. Specifically, it was a failure to conduct the activities

necessary to minimize the potential for degradation of the primary

coolant pressure boundary. In other words, process execution, including communications, broke down.

On March 8, 2004, after an extensive plant recovery program and

comprehensive corrective actions by the licensee,

FirstEnergy, and after considerable NRC inspection and assessment, the staff gave approval for the restart of Davis-Besse. Our

full statement discusses the critical review and actions the NRC

has taken to address the Davis-Besse Lessons Learned Task Force

and the Inspector General’s recommendations.

We have already provided our comments on the GAO’s draft report on Davis-Besse. We are reviewing the GAO’s recently finalized

report.

Let me turn for a minute to other significant achievements, specifically in our reactor licensing programs.

A significant type of reactor licensing action, called a power

uprate, is a request to raise the maximum power level at which a

plant may be operated. Power uprates range from requests for

small increases of less than 2 percent based on the recapture of

power measurement uncertainty, to large increases in the range of

15 percent to 20 percent of full power that require substantial

hardware modification to the plants.

To date, the NRC has approved 101 power uprates which have

added safely approximately 4,175 megawatts electric to the nation’s

electric general capacity, and this is the equivalent of about four

large nuclear power plants.

Currently, the NRC has four power uprate applications under review and expects to receive an additional 25 applications through

calendar year 2005. This would add approximately 1,760

megawatts electric to the Nation’s electric generating capacity. The

focus of our review of this application has been, and will continue

to be on safety.

License renewals are another significant type of licensing action.

In 2003, 13 units had their licensees renewed for an additional 20

years. We expect that almost all of the 104 reactors licensed to operate will apply for renewal of their licenses. The NRC also is

ready to accept applications for new power plants. In September

and October of last year, we received three early site permit applications for sites in Virginia, Illinois, and Mississippi where operating reactors already exist.

8

We have already certified three new reactor designs. In addition,

the NRC is currently reviewing the Westinghouse AP—1000 design

certification application. The staff has met all scheduled milestones

for the AP–1000 design review and is on track to issue a recommendation to the Commission this fall on final design approval.

The NRC staff is also actively reviewing pre-application issues on

two additional designs and has four other designs in various stages

of pre-application review.

The Commission has continued to enhance security of licensed

nuclear facilities and materials through close communication and

coordination with other Agencies in the intelligence and law enforcement communities, and with the Department of Homeland Security. We have established an enhanced set of security requirements for power reactors that are appropriate in the post-9/11

threat environment.

In treating emergency preparedness as another level of defense

in-depth, we are recognizing it as an integral part of our approach

to protecting the public. Reactor fuel, reactor coolant system, containment, emergency preparedness—these are four barriers, each

one complementing the others and each one designed, tested, and

inspected to provide reasonable assurance of protecting the public

and the environment from radiological releases.

In the area of material security, we have coordinated closely with

other Federal Agencies, State, and affected licensee groups to develop additional security requirements for two classes of materials

licensees who possess high-risk radioactive materials. Our full

statement discusses our activities and comprehensive programs for

ensuring the safety of importing, exporting, and transportation of

nuclear materials.

The Commission’s activities also extend to the front end of the

fuel cycle and they continue to increase. The first proposed new enrichment facility will be located in New Mexico and the second in

Ohio. Louisiana Energy Services submitted an application for its

facility in Eunice, New Mexico, to the NRC in December 2003. U.S.

Enrichment Corporation is expected to submit its application to the

NRC for its site in Piketon, OH, in August 2004.

The Commission has directed its staff to conduct reviews of the

applications for the two proposed enrichment facilities in a timely

manner. The staff continues to review a request to authorize construction of a mixed oxide fuel fabrication facility at the Savannah

River site in South Carolina as part of the Department of Energy’s

program to dispose of excess weapons grade plutonium.

The NRC has also made progress on a wide array of programs

relating to the safe disposal of nuclear waste. A central focus on

these programs is to ensure that the Agency is prepared to review

an application by the Department of Energy to construct a highlevel radioactive waste repository at Yucca Mountain, NV. The application is expected to be submitted to NRC in December 2004,

and we are prepared to fulfill our role.

We continue to develop the programs and dedicate resources to

ensure that the human capital of the Agency is adequate to meet

the needs of the Agency and, in this respect, we also are adding

significant resources to develop the critical thinking skills of our

work force.

9

Mr. Chairman, I can assure you that the Commission will continue to be very active in directing and managing the staff efforts

in ensuring adequate protection of public health and safety, promoting the common defense and security, and protecting the environment in the application of nuclear technology for civilian use.

We appreciate the opportunity to appear before you today.

We welcome your questions. I would ask that my written statement be placed in the record in its entirety.

Senator VOINOVICH. Thank you very much, Mr. Diaz.

I appreciate your testimony this morning. I notice you went over

the 5 minutes, but I wanted to give you more of an opportunity to

get your statement out in front of us.

Mr. DIAZ. I appreciate that, Mr. Chairman.

Senator VOINOVICH. Mr. Merrifield.

STATEMENT OF JEFFREY S. MERRIFIELD, COMMISSIONER,

U.S. NUCLEAR REGULATORY COMMISSION

Mr. MERRIFIELD. Mr. Chairman, in light of the time, I would just

want to say thank you for the opportunity and the challenges you

have presented for us, the opportunity to show off what we do, a

challenge to do better in terms of our effort to make sure that safety remains our No. 1 issue, as you outlined it.

I think also today we want to thank you for the strong interest

that the committee as a whole has shown in issues of human capital and your particular interest. Again, I think that is something

that we would be prepared to discuss in our testimony and questions.

Thank you, Mr. Chairman.

Senator VOINOVICH. Thank you, Mr. Merrifield.

Mr. McGaffigan.

STATEMENT OF EDWARD MCGAFFIGAN, JR., COMMISSIONER,

U.S. NUCLEAR REGULATORY COMMISSION

Mr. MCGAFFIGAN. Mr. Chairman, I concur in Chairman Diaz’s

statement. I look forward to your questions. I want to maximize

the amount of time to answer your questions.

Senator VOINOVICH. Thank you, very much, Mr. McGaffigan.

The Ranking Member of the subcommittee is here. Senator Carper, would you like to share with us an opening statement?

Senator CARPER. I have a statement for the record that I would

like to insert into the record.

Senator VOINOVICH. Without objection, so ordered.

OPENING STATEMENT OF HON. THOMAS R. CARPER, U.S.

SENATOR FROM THE STATE OF DELAWARE

Senator CARPER. Thank you. I would just like to jump right into

questions. I thank our witnesses. We are delighted that you are

here. Thank you.

Senator VOINOVICH. We have had six NRC oversight hearings, as

I mentioned, since 1998. Before this time, it is my understanding

that not many of these hearings were held, and that the Commission basically had a free reign.

Over the past 2 years, I have watched the NRC disagree with

just about anyone who has analyzed the Commission’s actions surVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
10

rounding the Davis-Besse incident, including the Inspector General, and now the GAO. I am concerned about that. I feel strongly,

and I know my fellow colleagues agree with me that this committee

must provide strong oversight.

Based on some of your recent actions, what kind of assurances

can you give us and the American public that you take our oversight seriously? We have talked at past hearings about the human

capital needs in the NRC and the industry as a large number of

employees are close to retirement age. There are several important

licensing. You have gone into them.

The list of things that you have to do is just overwhelming. It

must be unique in the history of the NRC to have so much work

that is on your plate that you need to deal with. The GAO claims

that you have been slow in implementing lessons learned because

of resource constraints. They specifically cite too few staff and experience levels among existing staff.

What I want to know is: Is that true? What are some of the constraints? How can we fix this? I want you to be candid with me.

If you do not have the budget, or if there is something wrong that

you need that you do not have that you cannot get the job done,

we want to know about it today.

Mr. Diaz, we will start with you. If the other Commissioners

want to chime in, we would welcome that.

Mr. DIAZ. Mr. Chairman, I want to say that we welcome the

oversight. I believe that it has actually helped the Agency to become more focused on the issues that are of concern to the Congress and to the Nation. In no way do we see this as anything but

actually helping us do our job better.

We do disagree with some of the criticism from outside, and

probably it is because we are always looking forward at what we

are going to do, and not only going back. Some of the criticisms are

probably past their time. Some of them have a significant basis and

we have taken the necessary actions to correct them.

Senator VOINOVICH. Mr. Diaz, one of the things I like to do is

this. Let us zero in on your budget and the human resources that

you have. Are they adequate to get the job done? That is what I

want to hear. Where are you on this?

Mr. DIAZ. Our budget is adequate. Our human resources are getting systematically upgraded. We have established a program to

improve the capabilities of our inspectors and our staff to deal with

issues. We are working in a very disciplined manner to address the

issues of communications.

We want everybody in the Agency that needs information to have

that information. We want that information to go up the ladder.

Senator VOINOVICH. Let me ask you this. How much retirement

have you had in the last years? How many new people have you

brought in? What is the level of the number of employees that you

have versus what you had before?

Mr. DIAZ. We are increasing our staffing to over 3,100 FTEs. We

were around 2,850 in fiscal year 2002. So we actually have an increase of about 250. I do not know the exact number. We continue

to bring in not only people that are young that we can train, but

we bring in mature people with the right skills. We have been able

to develop a data base that allows us to match skills with the

11

needs. We continue to work these issues in a very systematic manner.

Mr. MERRIFIELD. Mr. Chairman, one of the things you mentioned

and pointed out before is the concern about the age of our work

force. That is one that we have worked very hard on in the last

few years. You mentioned the statistic that at one time we had six

times as many people over the age of 60 as we did under the age

of 30. I do not know the exact ratio at this point. I think it is somewhere in the nature of about 11⁄2-to-1 or 2-to-1. We have dramatically reduced that number by a significant effort to reach out to a

wide diversity of universities and colleges. We have brought in a

lot of very exciting, new, well educated, members of our work force

that are really going to allow us to grow in the future and maintain

that high level of expertise we have had in the past.

Senator VOINOVICH. My past recollection is that some of the universities where they have some of these reactors at the universities, that they were closing those down. I recall for example, the

University of Michigan. What is the status out there in terms of

the availability of people?

Mr. DIAZ. The level of the decline has stabilized. In fact, many

of the large programs have actually experienced some increases.

We continue to be concerned with the capability of the infrastructure to give us the right person.

I think it is a problem across the industry.

But I do believe that right now we are getting the talent that we

need. It might be more difficult in the years to come as more people

retire and we lack the experienced personnel to fill their places.

That is why one of the things that we have asked, Mr. Chairman,

is the ability to retain some of our senior people that are retiring

without a penalty. In other words, when they retire from the Federal work force, if they come to work for us, they lose some of their

benefits.

Senator VOINOVICH. I understand that. One of the things that I

am trying to do with the legislation that we introduced would deal

with that problem. But right now you are being restricted because

if you bring them back, they lose their retirement. Would you like

to be able to bring them back to work part-time to help you with

the transition?

Mr. DIAZ. We have had exceptions made, but we certainly will

welcome your support in that area.

Mr. MERRIFIELD. Mr. Chairman, I would also say that you have

championed in the Energy bill legislation that would enhance the

training programs for our Agency and provide an additional $1 million in training. That is Section 622 of the Energy bill on the House

side and a similar provision on the Senate side. We would certainly

appreciate your support of that legislation. It would certainly help

us as well.

Mr. MCGAFFIGAN. Mr. Chairman, if I could, I would respond to

your question on resources. Chairman Diaz is absolutely correct.

We have the resources if we got our budget to do what we need

to do in the year ahead. All of you know better than we do what

the prospects of our getting our budget this year are.

If we are in a continuing resolution situation with a flat budget,

we basically are flat in all areas except for preparing for the Yucca

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Mountain application and in advanced reactors. There could be significant instability in those two areas. But in areas such as following up on the Davis-Besse lessons learned, we are absolutely

committed to dedicating the resources necessary there.

I have been at all six of these hearings. Chairman Diaz has as

well. Agencies over their lifetimes go through ups and downs.

When Chairman Diaz and I came on the Commission in 1996, we

were in a sustained down period. There had been significant erosion in staff. There had been no promotions, essentially. We had

not had an SES development class for many years. Our first SES

development class was chosen in 1999.

We have had a second, and we are about to have a third. But

for many years, with declining budgets and the need to manage an

Agency in decline, things were postponed.

We, over the last 5 years, have been actively trying to recover

from that period. Will the recovery be complete?

We are going to face challenges in the years ahead because there

was that period where we had to manage a very significant decline

in resources, anticipating an industry in decline, which turned out

not to be true.

Senator VOINOVICH. Thank you very much.

Senator Carper.

Senator Carper. Thank you, Mr. Chairman.

I know we have a couple of panels here. Is the expectation that

we would have one round of questions for each panel?

Senator VOINOVICH. Well, I anticipated two rounds for the Commission of 5 minutes each.

Senator CARPER. Thank you. I think I want to start with a more

general question and then maybe come to something more specific

to a part of the country in which I live and represent. A couple of

months ago I took a bunch of Boy Scouts from Wilmington, DE

down to the Norfolk Naval Station, as I do every few years. Both

our boys are active in scouting. I took Troop 67 back to the Norfolk

Naval Station.

We visited submarines and nuclear powered submarines and

ships, and an aircraft carrier in port.

The aircraft carrier itself is about 1,000 feet long. It is at least

20 stories high. There are roughly 5,000 sailors aboard the ship.

When the airplane is on board, I think it brings a lot more people

and maybe 75 or so aircraft. The interesting thing for me about the

nuclear-powered carrier is that it stops to refuel about once every

25 years, unlike the other ships that were on either side of it which

need to refuel about every week. For me, that is always a good reminder that nuclear energy is not just an important part of our

military and our naval forces, but it is also an important part of

our energy.

Looking over the briefing materials, I was reminded again of the

amount of CO2, carbon dioxide, that the nuclear power plants do

not put into the air. I was reminded of the amount of dollars that

reliance on nuclear energy does not add to our trade deficit. I was

reminded of the reduction in imported oil that a reliance on nuclear

power for the generation of electricity affords us.

I sit here today as one who believes that it is important that we

continue to maintain and strengthen going forward our reliance on

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nuclear energy as part of, not all of, but part of our energy needs

in this country.

I was going to get into some of the questioning that our Chairman got into with respect to qualified personnel. I think he has

covered that about as much as I would want to. I would to focus

instead on the future of nuclear energy in our country and a little

bit about the transportation of nuclear waste. Then I have a couple

of specific questions that deal with the nuclear power plant on the

other side of the Delaware River from us in Salem, NJ.

I would just start off with a couple of questions about nuclear energy. I am going to ask you to be fairly brief in responding to these

questions. I will direct them, Chairman Diaz, to you and ask you

to defer to your colleagues and your fellow Commissioners to jump

in whenever you feel the need.

I think today about 22 percent of our electricity supply comes

from nuclear energy. I guess my first question is: Twenty years

from now, do you think we will still be getting 22 percent of our

electricity from nuclear power? Do you think it will be more? Do

you think it will be less?

Mr. DIAZ. I believe that that question probably should be answered by the next panel. We are ready to do our job of regulating

the industry. The industry is considering additions to the fleet. We

believe that we have done what we needed to do which was to ensure that anyone that wanted a license to be renewed for an extra

period of time of 20 years would have a fair, equitable, and disciplined approach to renewing that license. I think the process that

is in place is working well.

So in many respects, one of the things that has happened is that

we have been able to have the existing fleet working. We have also

been able to certify new designs that if the industry wants to, they

will be able to use those certified designs to add new plants to the

fleet. But it is the industry which needs to make that decision.

I believe that the best that they can do under the present circumstances is to maintain over the next 15 years the 20 percent

to 21 percent that they are presently generating. That would include a few new nuclear power plants because the overall capacity

is increasing.

Senator CARPER. Thank you. You alluded to this. Maybe somebody is going to be proposing to build a new nuclear plant or two.

Just sketch for me very briefly the approval process that they go

through with respect to your Agency.

Mr. DIAZ. Very quickly, we have two processes—an old process

and a new process, that we believe is better, which the Congress

actually established. These new processes combine an operating license, which allows the industry to apply simultaneously for the

construction license and the operating permit. We already have

three applications for early site permits to clear the environmental

concerns of a site. We also have certified the designs, which means

that the industry or the utility can actually apply to put that certified design on a pre-approved site, making the period of the license for their construction and operation shorter, something the

industry is very much in favor of. The Congress approved that

process in 1992.

14

Senator CARPER. Thank you. Could we talk a little bit about the

transportation of nuclear waste to Yucca Mountain? I seem to recall that there is some full-scale testing of these casks that were

to carry the nuclear waste that was either scheduled to take place

or has taken place. Can you just bring us up to speed on that?

What is involved in these tests? What kind of schedule do you have

for them? Is there some kind of system for double-checking the results from those tests?

Mr. DIAZ. We have conducted what is called one-quarter scale

testing. The science and technology for such a test is sufficient to

scale this one-quarter scale to full size. We have had one railroad

cask built under these conditions. But I think 2 years ago precisely

in the Senate, the Commission concurred that we were going to do

full-scale testing, meaning that we were going to take a cask and

actually in its full size we are going to conduct all the necessary

testing to ensure that it will be protective of public health and safety, as it is used to transport spent fuel.

We have not done the tests. They are scheduled. The Commission

just approved the purchase of a full-scale rail cask. We have now

published and we have received comments on the testing procedures. We expect that this will be done probably in the next 3 to

4 years.

Senator CARPER. Thank you.

Thank you, Mr. Chairman.

Senator VOINOVICH. Without objection, I would like to enter into

the record the amendment to the Energy bill, S. 14, which was an

amendment that was part of the bill that passed in 2003 and to

bring to the committee’s attention that these very important

amendments are in the Energy bill, which we have not passed. I

think that the public should understand that this Energy bill, in

addition to dealing with natural gas, oil, and so many other areas,

including another issue that was before this committee, and that

in terms of the reliability of standards that we need in order to

avoid a black out as we had last year, are all in this Energy bill.

If this Congress goes home without passing an Energy bill, we

are doing a great disservice to the people of this country. So I just

want to enter these into the record so that it appears why it is so

important that we get that legislation passed.

Without objection, so ordered.

[The referenced document follows:]

15

16

Senator VOINOVICH. One other thing, before I forget it.

We had a big hearing here on the issue of the security of our nuclear facilities. I believe Senator Jeffords was the one who instigated that. As a result of that hearing, there were some questions

asked, and you were kind enough to come and meet with us in

closed session. I want to compliment Senator Jeffords because he,

at that time, said that he thought it was a good idea.

I want you to know that in the near future, after talking with

the members of this committee, we may again ask you to come into

a closed session to update us on where you are in terms of the security of those facilities from terrorist actions.

Mr. MCGAFFIGAN. Mr. Chairman, if I could, I would make one

comment on the legislation. In 1998, when Senator Inhofe had the

first hearing, we also had not had a lot of legislation passed in

many years. The Energy Policy Act of 1992 was the last significant

piece of legislation that affected the NRC. Chairman Diaz just referred to one of its provisions.

In the intervening 6 years, aside from Senator Inhofe’s provision

with regard to the fee base, we are still anxiously waiting for the

legislation. There are a whole series of provisions in the Energy bill

that we believe are noncontroversial. We appreciate both Houses’

support in the safety, security, and budgeting area. We would dearly appreciate this being passed.

Some provisions involve safety, some security, others budgeting

matters, such as our ability to have fees for other Agencies. There

are a whole host of provisions that you, Senator Inhofe, Senator

Jeffords, and others have supported, which we would very much

like to see enacted, if at all possible.

Senator VOINOVICH. There is one other thing that I would like

would be a memo from the Commission about the harm that is

done to you with a continuing budget resolution. We have, in the

last couple of years, had this continuing resolution. I do not think

my colleagues in the Senate and the House of Representatives understand how negative and how bad that has been for our Agencies. We just kind of take it for granted. ‘‘Well, we were not able

to get the job done, so we are going to have a continuing resolution.’’

But they do not understand what a terrible impact that has on

your ability to plan and get things done in your respective Agencies. It is not only yours, it is right across the board. We do not

talk about it enough. So I would like you to prepare something that

maybe I can share with our colleagues and let them know why we

need to get our appropriations passed on time around this place.

Mr. DIAZ. We will be pleased to do so.

Senator VOINOVICH. Without objection, so ordered.

[The referenced document follows.]

17

18

19

Senator VOINOVICH. Senator Inhofe.

Senator INHOFE. I think you ought to get it to him today.

[Laughter.]

Senator INHOFE. We talked about this back in 1998. We want action now. I have to say, Commissioner Diaz, I was disappointed in

your answer to Senator Carper’s question on what you see in the

future. I cannot imagine with the serious, serious energy crisis that

we have today that we would not be looking out there saying, ‘‘Yes,

we are going to have more.’’

I am looking at a chart right now—France, 77 percent; Ukraine,

44 percent; South Korea, 37 percent. I just cannot imagine that we

would be looking in the future and not saying, ‘‘This is probably

singularly the most available one that we can go to, to resolve this

crisis.’’

It is a crisis right now. Finally, the prices have gone up to the

point where people realize it is. We have held two hearings in our

full committee on natural gas prices, on gasoline, and all this. We

know we have to get out there and go after all forms of energy

which means exploring in places we have not explored. Yesterday

on the Senate floor I reminded the Senators that in my State of

Oklahoma, which is a big State in terms of marginal production,

that is 15 barrels a day or less.

If we had all the marginal wells flowing today that have been

closed in the last 10 years, it would produce more oil than we are

currently importing from Saudi Arabia. Then you get into nuclear.

I was surprised. I did not know about all these new tests coming

up, Senator Carper. I just wonder why you need new tests. I can

remember the old tests when they dropped a container a quarter

of a mile on concrete and it is sustained it. It went through fire.

They put in on the railroad tracks and a train coming along at a

hundred miles an hour.

We have progressed to the point where I hope we do not just

keep replowing those fields over and over again. Then you look at

some of the ways that some of the extreme environmentalist’s community look at nuclear. It is kind of interesting that same Green

Party that has shut down nuclear in Germany is encouraging it in

France, and France is the beneficiary because they are selling the

electricity or the power to Germany.

I just hope that you become aggressive and recognize that we

have a great need in this country to resolve our energy crisis, and

nuclear has to be a major part of it. Are there any comments from

any of the Commissioners?

Mr. DIAZ. Senator, we are aggressive in doing our role. My response is based on what the industry estimates their plan is, which

is called ‘‘2020.’’ My response is based on what the Department of

Energy, which is actually actively trying to develop nuclear power,

indicates. The electrical capacity of the Nation is growing. Therefore, the 20 percent that nuclear power generates now, 15 years

from now, will be less, and maybe will be 15 percent or 16 percent.

The industry has proposed a plan to build additional capacity. The

Commission is ready to do its role of licensing.

Senator INHOFE. OK. That is the other thing I want to get before

my time expires here. In 1999, Chairman Jackson said that the reVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00025 Fmt 6633 Sfmt 6601 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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licensing they are anticipating would take from 30 months to 36

months.

Mr. DIAZ. We are down, sir, to about 25 months.

Senator INHOFE. That is good. I like to hear that. But the concern is with the process slowed down on relicensing when you start

preparing for Yucca Mountain. Can you keep the progress going?

Mr. DIAZ. We can keep the progress going. We have to manage

our resources because the resources are limited. But we do not believe that there will be a significant impact on the relicensing process. We are going to manage it this year to about 12. We have said

that we can manage eight per year. We are working with the industry to make sure they have a disciplined approach in providing

us with the applications. So I do not think there is going to be any

significant impact.

Mr. MERRIFIELD. In fact, Mr. Chairman, our staff had come to

the Commission last year and said, ‘‘We want to budget and be prepared to deal with ten license renewals a year.’’ The Commission

said that was not good enough. We wanted them to do 12 a year.

We recognize, as you do, we want to deal with this in a disciplined

process, but deal with it in a timely way. I agree with the Chairman. We are going to make sure we do both.

Senator INHOFE. Thank you. My time has expired.

You talked about when the Chairman in his opening remarks referred to 60 percent of the employees are over 60. I thought you

were describing the U.S. Senate at that time. I thought that we

might be having some serious problems in the NRC if that is the

case.

[Laughter.]

Senator INHOFE. Thank you, Mr. Chairman.

Senator VOINOVICH. Senator Jeffords, I know that you wanted to

have a statement made. Do you want to do that now or do you

want to continue the questioning of these witnesses and perhaps

give your statement before the second panel of witnesses are called

up? I will let you decide that.

Senator JEFFORDS. I think I would like to do that now if I can.

I have another engagement I have to get to.

Senator VOINOVICH. All right.

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S.

SENATOR FROM THE STATE OF VERMONT

Senator JEFFORDS. Thank you, Mr. Chairman. Today’s hearing

continues our ongoing oversight of the Nuclear Regulatory Commission. I believe this is the sixth oversight hearing the subcommittee

has had in the last 7 years.

Chairman Voinovich, you and Ranking Member Carper deserve

credit for continuing to commitment to hold these hearings regularly.

Today I want to discuss both the NRC’s handling of extended

power uprates and a recent incident involving missing pieces of

fuel rods at the Vermont Yankee Nuclear Power Plant in my State.

I appreciate that Chairman Diaz and Commissioner Merrifield

have been willing to discuss my concerns about the recent events

in Vermont Yankee with me directly.

21

I also want to say to the Chairman and all the Commissioners

that I am pleased that you are all here today.

The mission of the Nuclear Regulatory Commission is one of the

most vital missions carried on by the Federal Government.

Regulating the Nation’s civilian use of nuclear materials, ensuring adequate protection of public health and safety when these materials are used or disposed of, and protecting the environment are

all critical.

I want to make myself perfectly clear, and I know the Chairman

and the Ranking Member of the subcommittee share my views,

that the top priority for the NRC is safety. There is no greater

issue than safety. I want the people of Vermont and across the

country to be safe. It is NRC’s job to guarantee that.

As you are well aware, there has been serious problems at

Vermont Yankee since this panel’s last oversight hearing. Vermont

Yankee operated by Entergy, discovered that two pieces of radioactive fuel rods were missing from the plant’s storage facilities last

month. Officials with Energy Nuclear have said that they could not

find the two rods—one 7 inches and one 17 inches long. Either is

capable of quickly giving a lethal dose of radiation to an unshielded

handler.

The NRC has been involved in Vermont Yankee inspections

using a remote control camera to see if they have misplaced the

rods among the 2,787 spent fuel rods in the plant’s spent fuel pool.

The NRC is also working with the utility to review records to see

if the two missing fuel rods from the plant are in the waste facilities at South Carolina or Washington.

Company officials speculate that the rods may have been confused with low-level waste and shipped out to out-of-State storage

sites. So far, efforts to locate the rods at the Vermont Yankee facility have failed. This is an outrageous and frightening situation for

Vermont families. The Commission must commit its resources to

ensure that the material is accounted for immediately.

I stand ready to assist the NRC in any way possible to make

sure that these materials are found and secured. But I note that

this is the second incident of missing nuclear fuels at Northeast

nuclear plants in 5 years. When the Millstone incident occurred,

NRC said that fuel rods had never before gone missing in the history of the commercial nuclear plants in the United States.

I know that the materials at the Vermont Yankee were found to

be missing due, in part, to the new inspection procedures the NRC

instituted after Millstone. The sad fact is that the fuel is again

missing. I do not want missing fuel to become the norm. It is not

enough to tell the public that we think it is likely that highly radioactive material went into storage.

We must improve our nuclear materials accounting system and

we must do so now. I want to know what the NRC is going to do

to prevent this from ever happening again in Vermont Yankee or

anywhere.

Keeping with my view that the safety is job one at the NRC, I

would also like to know what the NRC is doing to ensure that any

boost in Vermont Yankee’s power will be reviewed in a thorough

manner. Entergy has asked the NRC to approve its proposal to

boost the power from Vermont Yankee by 20 percent. As you know,

22

the NRC must determine whether or not such an extended power

uprate will jeopardize the plant’s ability to operate safely.

I expect the NRC to explain, design, and conduct a review that

will allow Vermonters to have confidence when the uprate is approved for Vermont Yankee. In the long term, I am pleased that

the NRC agreed with Senator Leahy and my request to hold a public meeting in Vermont in March to explain the uprate review process.

Many constituents have told me that this was a helpful meeting,

but more needs to be done to inform and assure Vermonters. The

review of the Vermont Yankee uprate will be the first time that the

NRC will conduct such a review using the new extended power rate

guidelines issued in December 2003.

I am also pleased that the NRC has agreed to conduct a pilot inspection and collection of additional information as requested by

the Vermont Public Service Board. The purpose of this additional

inspection will be to collect data about the plant’s operations under

the proposed boosted power conduction.

This is the information Vermonters want. I am pleased that my

State will be doing a service to the country as they work with the

NRC through the use of the new guidelines and implementation of

the new pilot inspection program.

The NRC has an opportunity to assure this subcommittee that

they will make their new site guidelines and inspections work, that

they will implement them in a thoroughly transparent way, and

that they will strive to address the concerns of the public.

If we are going to be serious about protecting our environment

while providing safe, reliable, and affordable electricity for all

Americans, we need to increase our use of renewables, improve

how to burn fossil fuels, promote energy efficiency, and make sure

that nuclear plants operate well and safely.

Thank you, Chairman Diaz and the rest of the Commissioners.

I look forward to your response.

Thank you, Mr. Chairman.

Senator REID. Mr. Chairman?

Senator VOINOVICH. Senator Reid?

Senator REID. I apologize to you and the Ranking Member for

being late. I have a relatively short statement I would like to give.

Senator VOINOVICH. Without objection, certainly.

OPENING STATEMENT OF HON. HARRY REID, U.S. SENATOR

FROM THE STATE OF NEVADA

Senator REID. Thank you very much.

First of all, let me say to Chairman Diaz, Commissioner

McGaffigan, and Commissioner Merrifield, I think you have one of

the most responsible jobs we have in our entire Government. There

is no way that I can adequately portray the importance, I think,

of the work that you have to do. You have such a long list of critical duties. All of these duties have been made more important as

a result of what happened on 9/11. Of course, we know you license,

inspect, and oversee nuclear facilities. This is done to assure their

safety and make sure that the operations go well at overseas decommissioning of facilities and enforce the laws that we write in

conjunction with the President.

23

The NRC cannot perform these critical functions properly,

though, when it is not operating with its full compliment of five

Commissioners. But that is the situation we have today. The NRC

is operating with only three Commissioners.

For example, the distinguished Chair of the full committee, Senator Inhofe, my friend, indicated earlier today that he thinks that

there has been enough testing done on casks. I think if the Commission goes forward on the information, scientific in nature that

we now have on these casks, it would be a terrible disservice, not

only to our country, but to the world.

In February, the President sent to the Senate a member of my

staff to fill one of the two vacancies that now exist with this very

short-bodied Nuclear Regulatory Commission. The President’s willingness to do this says more about Dr. Jaczko’s qualifications than

any testimonials that I could offer on his behalf. He has met with

every member of this committee that has wanted to discuss his experience, his background, and his views. The committee’s view of

that role of the NRC has also been something that he has discussed

with Senators I thank my colleagues for taking this time to meet

with Dr. Jaczko.

But despite these meetings and the fact that several other nominees have had hearings and have been marked up by this committee, his nomination has languished. While I would like to fill

the remaining fifth slot at the NRC, there is simply is a nominee

with clear paperwork and other items in order to do that. In that

way, we could have a Democrat and a Republican.

But I do not think that waiting is an option. The President of the

United States felt the same way. I have pledged to work against

the committee completing other business here on the floor until

this nominee gets a markup. I have served on this committee for

18 years now, and have done so because I really like the work on

this committee. I have had opportunities to go elsewhere, but I like

what we do. I like our jurisdiction.

I do not take the action of blocking the committee’s other business lightly. But I do so here because the Commission is charged

with ensuring the safety of the Nation’s nuclear power plants. That

is very important, as I have already indicated. I do not think you

can do your job when you do not have the adequate staff.

I believe not having a hearing is abdication of this committee’s

duty. At least one of the three Commissioners who has already testified before this committee to date, Commissioner McGaffigan,

agrees with me. I think the other two would also acknowledge that

it would be better if you had a full complement of Commissioners.

In 2003, Commissioner McGaffigan commented, ‘‘I personally do

not like vacancies. I think we would best when there are five.’’

I acknowledge that. I would hope that my colleagues here on the

subcommittee would do whatever they could to get this committee

to move forward and put Dr. Greg Jaczko on the Senate floor. Then

we will take whatever chances we have there. But to hold this up

in committee is not going to be good for the work of this committee.

Again, Chairman Voinovich and Ranking Member Carper, I appreciate very much your allowing me to speak, me coming in late

and leaving early. I appreciate it very much. The work that is

24

being done here, the oversight of this subcommittee, is extremely

important.

Senator VOINOVICH. Thank you, Senator Reid. I, too, am concerned about the lack of two individuals on the committee.

Perhaps we can spend some time working on it. But I would like

to remind you from what my staff tells me that your side of the

aisle blocked a hearing on Admiral Grossenbacher for 7 months.

Senator REID. That is really not quite true. They gave you some

bad information, Senator Voinovich. What happened is that there

was an agreement that we would do both of these together. By the

time the togetherness came, he had found another job, which was

really too bad, because I thought he had some extremely good

qualifications to serve on this Commission. I think these gentlemen

here would have been better for having had the Admiral on this

Nuclear Regulatory Commission.

I would also say this, Senator Voinovich. Up here there is a lot

of blame to go around. ‘‘He did it; I did it; you did it.’’ But the fact

of the matter is that we now have a Commission and we have a

man who has a Ph.D., in physics who has had experienced administratively. He has had it in the Legislative Branch of Government.

He would do an outstanding job working with these three gentlemen.

I have said a long time ago, but the Admiral withdrew not because of anything I did, I wish the Administration would come forward with someone else. For reasons I do not understand they have

not. I am willing to work any way that I can to make sure that

there are five and not four.

Thank you very much.

Senator VOINOVICH. Senator Carper.

Senator Carper. I have a story that relates to the Admiral before

you got here, Senator Reid, I shared with my colleagues that every

couple of years I take a bunch of Boy Scouts down to the Norfolk

Naval Station to spend a weekend and sleep in the barracks, eat

in the galleys, and climb all over the submarines, ships, and aircraft carriers.

You and I are runners. We like to exercise. One morning, 2 years

ago when I was down there, I got up real early and went out and

ran on a Sunday morning. As I was running around the base, it

was just about daybreak, I ran by this one house.

There are some beautiful homes on the Norfolk Naval Station

where some of the senior officers live. I went by this one home and

I looked. There was a flag in front of the home. It looked just like

the Delaware flag. Just like it. It was about half dark. I stopped

my run. I went over there and I held the flag in my hands. By

golly, it was the Delaware flag.

It turned out that the house was the Delaware House. They have

like 20 or 25 houses on bases that are named after various States.

The person who lives in the Delaware House is the head of U.S.

Submarine Forces around the world. That person was the Admiral.

He lived there at the time.

We went back after breakfast that Sunday morning and knocked

on his door and got him up to let him know that there were some

people there from Delaware. Later on he came back for a hearing

25

to be nominated. He seemed like a good guy. I am sorry it did not

work out.

Senator REID. Yes, he is the best. I would just say that anytime

we talk about submarines, my being from Searchlight, NV, I hope

you understand that we are responsible for the submarines communicating with each around the world. We have a huge Lorenz Station there in Searchlight. Those very interesting lights are flashing

at night all the time. They have all kinds of ghost stories and everything. But the Lorenz Station makes our submarine fleet as successful as it, and that is in Searchlight. Well, a little out of Searchlight.

Senator CARPER. Would that be the suburbs of Searchlight?

Senator REID. Yes.

[Laughter.]

Senator VOINOVICH. We will be continuing with the questioning.

NRC’s concern about safety culture was one of the last issues resolved before Davis-Besse was allowed to restart. As a condition of

the restart, you required FirstEnergy to conduct an independent

assessment of the safety culture at Davis-Besse annually for the

next 5 years. I remember that part of the reason why you did not

do it was that you came in and you said, ‘‘The safety culture has

not changed. Get it right.’’ You came back. It may have been three

times that you did that before you let it open up.

Additionally, NRC’s Advisory Committee on Reactor Safeguards

recommended that the NRC pursue the development of a methodology for assessing safety culture. This assessment is performed

widely in other countries.

With all that being said, why do you disagree with everyone that

you should put in place a regulation to monitor safety culture? Why

do we not have a regulation in terms of safety culture? It seems

to me that if the internal people that are running these operations,

if there is not a high safety culture, that is something that we

should be very concerned about it. You were concerned about it.

The issue is: Why are you not doing something about it?

Why have you looked at the GAO report and said, ‘‘We are not

going to do that.’’?

Mr. DIAZ. Sir, obviously the Commission is very concerned with

the safety culture at each and every one of our facilities. However,

we believe that the safety culture as a whole becomes sometimes

ambiguous. We are not in the business of managing these utilities

or these reactors.

Senator VOINOVICH. The question I have is this. Why do the Europeans do it? They have a lot of nuclear facilities in Europe. It is

my understanding that they do go in and they do monitor the safety culture. You are going to be going into Davis-Besse for the next

5 years. You certainly are going to have to have some standard

that you used to assess the safety culture during that period.

You had a standard to use because you said you were not going

to let them open because they did not have the safety culture. Why

do not we make that applicable to all the facilities?

Mr. DIAZ. Because it will get into an area that the Commission

believes that we should not be, which in managing the facility.

Senator VOINOVICH. But you are doing it at Davis-Besse. You are

going to go in there for the next 5 years.

26

Mr. DIAZ. But what we are going to do is that we are going to

assess what the safety culture is and then we are going to assess

how the management of the facility deals with the safety issues.

That is our responsibility. We will deal with how they manage safety. We have indicators. We have many ways of actually addressing

that issue. The safety culture issue becomes imbedded inside of the

relationships between the employees and the management. We do

not believe that is the role of the Commission.

Senator VOINOVICH. We have another 102 of these facilities

around the country. The Commission does not have, as part of their

regulatory responsibilities, some appraisal to come back? Somebody

says, ‘‘Hey, we talked to some of the employees. It appears that

they are not really that cognizant of safety. They are not concerned

about it.’’

Mr. MERRIFIELD. We are concerned with safety.

Mr. MCGAFFIGAN. Mr. Chairman, we do deal with safety culture

issues as they arise, but they tend to manifest themselves somewhere else in our system. We can get our hands around it that

way. We have an allegations process. We take allegations that we

get from individuals at nuclear power plants very, very seriously.

Senator VOINOVICH. Do you have a survey of employees about

certain questions you ask about safety?

Mr. MCGAFFIGAN. We do not ourselves survey, but if we detect

that there is a problem at a facility—and we have done this on

more than one occasion—we require the licensee to do surveys. I

believe we did this at South Texas.

Senator VOINOVICH. I have to tell you there is a disagreement

here. I think you should do it. I want to talk to you about it. I do

not think you are giving a good enough reason. If they do it in Europe, you are doing it at Davis-Besse, you ought to have the same

kind of thing. An independent survey. You might have disgruntled

employees. But there are certain questions that you can ask. There

are certain observations that you can make in terms of whether or

not you have that kind of safety consciousness there. That is very

important because it deals with the internal people that are there

every day. If they do not have safety utmost in their mind, they

are not going to get the job done.

Mr. MERRIFIELD. Senator, there is something that we do that

some of the Europeans do not. We have onsite inspectors every day

who talk to plant personnel in the control room, in the engineering

spaces, to line staffs, the mechanics who are doing the piping

work—we have an opportunity first hand——

Senator VOINOVICH. You did not find it out at Davis-Besse. You

had somebody there. That is the next question I am asking is about

the communication. GAO and the Inspector General identified communications as one of the major factors that led to the NRC not

to prevent the Davis-Besse incident. Perhaps most concerning is

the statement in the GAO report, ‘‘The Resident Inspector at the

Davis-Besse Plant never saw generic bulletins and letters issued by

NRC on boric acid and corrosion, although only a few are generated

each year.’’

That is communication. So you had somebody on board and they

did not know that the safety culture there was not there because

27

of some reason that it was not part of their job. Second of all, you

get into the issue of communications.

Mr. DIAZ. We do agree that communications were faulty. We

have taken every necessary step to address the issue of communications. I believe that it was more than communications. It was

lack of the technical know-how that this issue could really result

in a significant corrosion of the head.

We have addressed both the communication issues and the technical issues and how to deal with them.

Senator VOINOVICH. Do you have people on board on all 103

other facilities?

Mr. DIAZ. Yes, sir.

Mr. MERRIFIELD. Yes, sir.

Mr. MCGAFFIGAN. Yes, sir.

Senator VOINOVICH. And probably the company pays for it, I

would suspect.

Mr. MERRIFIELD. Yes, they do.

Mr. DIAZ. Through fees.

Senator VOINOVICH. I have to tell you something. If I were running a show, those would be the most important people that I

would have in my organization. They are onsite. I would have them

really trained. I would have them being watchdogs, to know the

technical aspects of it, to be able to look at the management, to

look at the attitudes of the employees, and to be able to get back

to you. How much training do you give these people?

Mr. DIAZ. We totally agree. We give significant training, but if

you look at the directives and what the staff has been asked to do

during the last year and a half, we are going to increase the training, both the technical capabilities and the communication capabilities.

I believe we have been responsive to the issues. I assure you that

we have taken this very seriously. Corrections are being put in

place.

Senator VOINOVICH. I am going to tell you. I am going to visit

a couple of facilities and I am going to check up for myself. I want

to know what you are doing on those individuals. I would like some

further discourse with you about this issue of safety. I think the

attitude of people, in terms of safety, is paramount. They are the

ones that are doing the work.

Mr. DIAZ. Absolutely. I will work on the opportunity Senator.

Mr. MERRIFIELD. Senator, I was going to say that obviously you

have gotten into some areas we can give additional detail through

your staff, through briefings. Obviously this is something you have

a great interest in. We will make sure that we get you the information.

Senator VOINOVICH. Without objection, so ordered.

Mr. MCGAFFIGAN. Mr. Chairman, I would just mention that we

have been following Resident Inspector demographics. You are interested in our demographics as a whole Agency. But we require

an annual report from our staff on Resident Inspector demographics. We discuss Resident Inspector demographics at an annual meeting that we have with the staff. We have had problems.

Clearly Davis-Besse was our worst hour. We have challenged our

regional administrators to bring in additional people. In some inVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00033 Fmt 6633 Sfmt 6601 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
28

stances, they are double encumbering these positions now so that

you will have a trainee there while the person who is rotating out

is still there.

We are dedicated to having at least two individuals at every site.

At some sites like Indian Point we have a lot more, but at least

two individuals. We have three, I believe, at the moment, at DavisBesse. We have turnover. About the time that Chairman Diaz and

I came on the Commission, we mandated instead of a 5-year rotation for Residents, that it be a 7-year rotation. Well, we are coming

up on the 7th year. At the moment, there is a tremendous amount

of movement from one site to another.

We do that because we do not want people to homestead and get

too comfortable. We want new eyes coming into the site and a new

perspective, a different engineering background, perhaps, so they

will see different things. But we have a lot of turnover at the moment in our Resident Inspector corps. They move from one site to

another. But we have been monitoring it and we have been challenging our regional administrators to do a good job in managing

it. We pay attention to it. We have all the data we can share with

your staff.

Senator VOINOVICH. Thank you.

Senator Jeffords.

Senator JEFFORDS. Thank you, Mr. Chairman.

I have several questions about our little problem in Vermont. I

would like to try a couple here and then will submit others in writing.

At the briefing in preparation for this hearing, your staff indicated that the remote camera search of the spent fuel pool in

Vermont Yankee is complete and the missing fuel rod pieces have

not been found. This information was repeated in a May 19, 2004

story, in the Rutland Herald.

Is it the case that the search pool is complete? What are the next

steps that will be taken to locate the missing fuel?

Mr. DIAZ. The licensee, with oversight from the NRC, has completed the search of the spent fuel pool. They have not found the

missing fragments of the spent fuel. That does not mean that the

issue is closed. We will continue to work with the licensee to ascertain whether these pieces of fuel were shipped outside of the facility with other waste. We are going to try to make sure that we find

out where it ended. We are not sure that we can really find these

pieces. I am going to be perfectly honest with you.

In the case of Millstone, we conducted with the licensee a major

year-and-a-half process. The possibility is that this was packaged

with other radioactive waste and it did not alarm. Therefore, it did

not show up as a significantly radioactive piece. It ended up probably in one of the low—level waste disposal sites.

Mr. MERRIFIELD. But just to clarify, too, we are still doing our

investigation. But as we found with Millstone, it is plausible that

those activities may be a legacy issue for us and the licensee and

may have been activities that dated back to the early 1980’s.

Mr. DIAZ. It was a 1980 piece of fuel; yes.

Senator JEFFORDS. On May 4, 2004, NRC responded to the

Vermont Public Service Board’s request for additional independent

reviews of Vermont Yankee. Your letter stated that ‘‘A pilot engiVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00034 Fmt 6633 Sfmt 6601 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
29

neering assessment would be conducted. The assessment team will

be comprised of NRC staff, State officials, and at least two independent contractors.’’

What will the NRC do to ensure that the independence of the

independent contractors? What will be the process for selecting

them? What qualifications will they need to have?

Mr. DIAZ. Our staff has very defined procedures for selecting contractors. This is a new type of risk-informed inspection that we believe that would become a mainstay of the way we do things with

facilities. As an engineering assessment, we are going to ensure

that there is absolutely no connection between the contractors or

even the staff that is going to be dedicated to this activity. They

will have a certain amount of separation from the Vermont facility.

We, of course, are an independent Agency. We are going to ensure that this work is done independently. You can have our complete assurances of that.

Senator JEFFORDS. I have additional questions, Mr. Chairman

which I will submit to you in writing for answers in writing.

Thank you, Mr. Chairman.

Senator VOINOVICH. Without objection, so ordered. Thank you,

Senator Jeffords.

Senator Clinton.

OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON,

U.S. SENATOR FROM THE STATE OF NEW YORK

Senator CLINTON. Thank you, Mr. Chairman. Mr. Chairman I

thank you for holding this hearing. I appreciate your statement

with respect to Davis-Besse. I would like to associate myself with

the concerns in this GAO report. It is clearly a finding that we

need additional resources and support for the safety mission that

the NRC is responsible for implementing.

I am concerned, as the Commissioners know, about the overall

safety of these aging plants and, in particular, the situation at Indian Point. In March of this year the NRC upgraded the Indian

Point safety rating to green. It is my understanding that this

change in rating reflected work that had been done to conduct

training, modify electrical systems, fix a firewall, and take other

steps to improve safety. These are all welcome steps.

But I am concerned that one consequence of this green rating is

less frequent inspections by the NRC. I am concerned for three reasons: First, NRC’s year-end inspection report for Indian Point lists

a range of tasks that have yet to be done, including a repair backlog and improving staff performance.

Second, Indian Point is unique among nuclear facilities in that

about 20 million people live within a 50-mile radius of the plant.

Third, the documented oversight failures by the NRC at DavisBesse call into question the effectiveness of the NRC’s business-asusual oversight.

My question is this: How does the NRC justify less frequent inspections at Indian Point? Would you not agree that the unique

setting, and certainly the public concern about Indian Point argue

for continued NRC oversight at the highest possible levels?

Mr. DIAZ. Senator, we are continuing to increase oversight at Indian Point. You are correct that we found that the licensee has

30

made progress in addressing a series of issues. That does not mean

that we are satisfied or that we are going to actually do much less

than what is required.

We intend to maintain oversight at a level that is commensurate

to the findings that we have. We believe that we have sufficient

oversight to maintain the facility in the safe condition that it

should be. We have an extra inspector. Yesterday I was at the

plant. I was assured by the Regional Administrator that we are

maintaining the level of oversight that is commensurate with the

needs of Indian Point.

Mr. MCGAFFIGAN. I might add that our Regional Administrator,

Mr. Miller, has asked for a deviation from our normal oversight

process for heightened oversight at Indian Point. Similarly, our Regional Administrator in Region IV has asked for continued maintenance of heightened oversight at the Cooper Station in Nebraska.

Both of those plants got themselves into Column 4 of our socalled ‘‘action matrix’’ which is the multiple degraded cornerstone

column. In both cases, our Regional Administrators are saying, ‘‘We

are going to be extra careful and do extra inspections until such

time as we are really satisfied that everything is OK.’’

They are in Column 2 of our action matrix at the moment, but

they are being treated as if they are in a higher column. Mr. Miller

has maintained the inspection resources, I believe, at Indian Point,

that are unprecedented at any other plant.

Mr. DIAZ. Absolutely. So it is recognizing that the licensee has

made progress and it should be so indicated. But we are continuing

to increase the oversight at Indian Point.

Senator CLINTON. Thank you. As you know, the Federal Emergency Management Agency is scheduled to conduct a drill at Indian

Point during the week of June 7th to gauge the effectiveness of the

emergency plans for the surrounding counties. This whole issue of

evacuation in the event of an emergency has been one of my highest priorities.

Now I know that FEMA has the primary responsibility to evaluate emergency planning at nuclear power plants, but ultimately an

effective emergency plan is a condition of an operating license from

the Nuclear Regulatory Commission. It just impractical and not believable that a 10-mile radius, as currently envisioned in the emergency plan, in an area as densely populated as metro New York

City, represents a fair and realistic emergency evaluation plan.

Let me ask you this. To what extent is the NRC involved in the

planning of the June 7th drill? Would it not make sense to be realistic and broaden the geographic scope of the exercise to get a

clearer idea of what our real challenges are?

Mr. DIAZ. Senator, the NRC is directly, intensely, and aggressively participating in the issue of the exercise. The fact is that was

the reason for my visit yesterday. It was exclusively dedicated to

the exercise. I did this at the plant, but it was all emergency planning.

I believe that from yesterday we had very fruitful meetings, including meeting with the county executives. Out of the meeting,

even a more realistic plan that we have devised is now taking

place.

Senator CLINTON. Good.

31

Mr. DIAZ. We actually addressed some of the issues of concern directly with those who have the responsibility of carrying out those

responsibilities. We did not resolve all the issues, as you can imagine. We still have some questions to answer. But I believe we went

a long way toward planning and eventually executing an exercise

that is realistic. I believe the exercise calls for a series of measures

that will be testing the capability of the counties to evacuate people. I believe that many of those things are now being put in a better perspective. I really appreciate the opportunity to have been

there and to listen directly to what their concerns were. They are

being addressed.

Senator CLINTON. Thank you.

Thank you, Mr. Chairman.

Senator VOINOVICH. Senator Carper, you have one last round,

and then we are going to go to the next panel.

Senator CARPER. Thank you, Mr. Chairman.

I think it was last year it was revealed that a small amount of

a substance called tritium was discovered in the ground water either next to or beneath the ground on part of the Salem One Nuclear Reactor. Over the last year or so, efforts have been underway

to try to understand and to respond to the contamination that had

been ongoing.

I have a couple of questions. Let me just sort of run through

them and then we can go back and pick them up, if you will. What

is the role of the NRC in a case like this? Could we start when the

reactor’s owner, which is PSEG, notified your Agency of the elevated readings in the ground water. What steps does the NRC take

in order to protect workers and to protect public safety? How do

you go about identifying the scope of the problem? How do you ensure that the response plan is adequate? If we could start there,

that would be helpful.

Mr. DIAZ. Sure. The NRC is directly involved, not only in the

oversight of the protection of the workers and of the people, but in

any release of radioactivity from the side boundary. That is one of

our major areas of responsibilities.

In the case of tritium, tritium is not a very hazardous radioactive

material. If we put them on a scale, it probably comes, I would call,

at the very bottom. However, that does not mean that we are not

concerned with it. We, of course, do things in a risk-informed manner. Tritium is a very insidious material. You think you have got

it, and it will escape. It mixes with water. It mixes with steam. It

really has many ways of flowing where it should not be.

In the case of the Salem Hope Creek, tritium was found outside

leaking from the spent fuel pool in a very small concentration. We

have been working with the licensee. We have ascertained that

there has been no further contamination of the water which is our

main concern. The dilutions are still relatively low, but we are trying to make sure that the licensee addresses why this escaped.

They think they know where the issue is. It is a liner error of the

spent fuel pool.

We have taken this issue very seriously and continue to work

with them to make sure the issue is addressed and satisfied.

Mr. MERRIFIELD. Senator, just to put a little of a boundary

around this, this leak was identified as a result of a well that is

32

very close in proximity to the plant. The water that had come from

the pool containing the tritium has not gone across the boundaries

of the plant property. It does not present any danger to the wildlife

or people who live around the plant.

So we are very much on top of it in terms of monitoring that release. We are working very closely with the State of New Jersey

to make sure that we monitor that and have the licensee deal with

it in the appropriate way.

Senator CARPER. What is the responsibility, if you will, of the

owner of the plant, PSEG in this particular case? Do you believe

that they have met their responsibilities to the NRC and to the

community?

Mr. DIAZ. Yes, presently they are meeting those responsibilities

in this particular operation.

Senator CARPER. The second question also relates to the Salem

Hope Creek Plant. It deals with the culture of safety that exists at

the plant. I understand that over the past year or so that the NRC

has been engaged in a special review of the safety culture of the

Salem Hope Creek reactors in New Jersey.

This is a couple of plants that are about 15 miles away from my

house on the other side of the Delaware River. You can see it on

a pretty clear day. Apparently this review that was launched in response to questions about the ability of the plant management and

the operators to maintain an environment where questions, including those about the operation and the safety of the place could be

freely raised by the employees and would be fully addressed by the

management.

I just want to know what is the status of this review by the NRC.

Are you satisfied that the plant operator, PSEG, has addressed any

areas that need improvement? Are there any additional steps that

need to be required of the plant and the plant operator?

Finally, is the safety culture a concern at other reactors and at

other plants?

Mr. DIAZ. Safety culture is an issue that we gauge from my viewpoint from how the managers of the plant manage safety.

In the case of the Salem Hope Creek, our Regional Administrator

saw signs that there could be a degradation of the safety culture.

He aggressively addressed it even before there were really any

major issues that were identified. He used the processes that we

have to call it to the attention of the licensees. The licensees have

been responding.

We are not satisfied yet that everything that needs to be done

has been done, but a process has begun. We believe they are doing

the right thing. We are going to be watching carefully to make sure

that they actually take the entire matter not only very seriously,

but take it into a completion that we can say, ‘‘Yes, you have satisfied what we wanted you to do.’’ It is ongoing.

Mr. MERRIFIELD. One thing, also, both Senator Carper and Mr.

Chairman, that we did not mention when we were answering the

Chairman’s questions on safety culture. We, in fact, are sponsoring

as an Agency a workshop in which we bring licensees in to meet

with our staff to try to identify best practices in safety culture. So

we do have a direct engagement on this issue in terms of trying

33

to enhance and identify better ways for licensees to enhance the

culture of their own plants.

The Institute for Nuclear Power Operations, which is a separate

industry-funded organization in Atlanta has 300 or 400 people who

work for it. They have a separate initiative underway in which

they are intensively looking at this very same issue, again to try

to enhance the overall level of the safety culture at the plants. We

are collaborating with them to the extent that they are keeping us

informed of their activities. We are very interested in the work that

they are doing. We want to assess where they are in relation to

where we are.

I did want to fill that in to give you a little bit better understanding that we do take the issue of safety culture quite seriously.

We recognize what other of our international partners are doing.

We want to make sure that we are doing it in the right way for

the licensees that we oversee.

Mr. DIAZ. If I may add, on the issue of Davis-Besse, on safety

culture, the licensee did not meet its own standards of safety culture. We do hold them accountable for those standards. We want

every licensee to have very high standards.

Senator VOINOVICH. You should set the standards for them.

Mr. DIAZ. Well, that is an issue that is a very difficult issue.

Again, we might be getting into the prerogative of the management

of this facility. The Commission has been discussing this for many

years. We actually do much more than our European colleagues in

the area of oversight, much more intrusive, much more in there,

much more looking over what happened.

I do not think there is a match in the world for the way that the

NRC conducts oversight of nuclear facilities anywhere. I will stand

by that statement.

Mr. MCGAFFIGAN. Mr. Chairman, I might just add that you are

citing the European example. The main European example that I

am aware of is that our UK counterparts have a license condition

that they have imposed on their reactors that basically gets the

regulator, the Nuclear Installations Directorate involved in any

staff change at the plant. So if you want to decrease the number

of people in Department ‘‘X’’ by ‘‘y,’’ you have to come in to the regulator and talk to him about it.

I remember Chairman Inhofe got wind of that a few hearings ago

and asked us about whether we thought that that was our role. We

said very firmly that that was not our role. I am not sure that gets

at safety culture.

Senator VOINOVICH. The thing is that is not the role I am asking

you to make.

Mr. MCGAFFIGAN. No, no; I understand. But that is a European

precedent. The European precedent that is often—times cited is the

UK license condition that gets them involved in essentially labor

management issues and having a regulator trying to determine

what number of people are needed in each department.

We have respectfully said no to that. There are other approaches

to safety culture. I think our approach, which is when we find a

problem, whether it is at Hope Creek Salem, or South Texas, or

Davis-Besse, we then ask the licensee to do a lot of the surveying

that you do. But do you do that for all 103 plants where, for the

34

most part, we do not have any other symptom coming up? That

could be quite burdensome. Then in judging the results, it gets to

be very, very subjective. So that has been the problem that we have

faced.

Mr. MERRIFIELD. Mr. Chairman, if I may, I would add two quick

things. When I worked as a counsel on this committee, it was quite

popular to look at what are the Europeans doing versus what we

are doing. I think those translations are not always made correctly.

There is an issue of what does the regulation or law look like on

paper versus where are you in terms of the enforcement of those

regulations. There are quite stark differences between the Europeans and between this country.

Senator VOINOVICH. In the GAO report, ‘‘The International Atomic Energy and its member nations have developed guidance and

procedures for addressing safety culture at nuclear power plants.

Today, several countries, such as Brazil, Canada, Finland, Sweden,

and the United Kingdom assess plant safety culture or licensee’s

own assessments of their safety culture.’’

I am just saying that we are going to have to spend a little more

time on this issue of safety. I want to know just exactly what you

are doing. Why did not the person who was on board at DavisBesse understand that they did not have a culture of safety in the

place? Where were the standards? Do you negotiate the standards?

There are a lot of questions here in terms of management. I am

not asking you to micro-manage these outfits. We should set some

standards that are agreed upon, and then make sure that they are

being upheld.

Mr. MERRIFIELD. Mr. Chairman, one of the very important things

that we do as an Agency is benchmark. We meet collaboratively

with our international partners and try to identify best practices.

Members of the Commission do as well. I have been to most of the

major European partners, as have others. These are most of our

counterparts internationally.

I could tell you in private my observations about some of them.

I think we do a pretty damn good job in this country. I am not

going to back away from that statement. Now, the heart of your

matter is that we missed an issue of safety culture at Davis-Besse.

It led to an identifiable problem. I think there is complete agreement with you that we need to get to the heart of the issue.

Senator VOINOVICH. Well, there is the other facility that Senator

Carper mentioned where they missed a safety culture.

Mr. MCGAFFIGAN. Mr. Chairman, one of the issues Commissioner

Merrifield mentioned is INPO’s involvement. INPO has a lot more

credibility, frankly, than Federal bureaucrats do going in and talking frankly with their industry peers, ‘‘We do not like your incentive system for your executives here.’’

But to legislate a rule that says that you will have a safety gate

for executive incentive payments is another issue. The South Texas

project last year did absolutely wonderfully in dealing with a problem that showed up in March of last year. We have commended

them for it. The industry has commended them for it. They took

an absolutely first-rate approach to dealing with the issue.

But their incentive structure, they once told me, is that they

have a safety gate in their executive incentives. Should that be a

35

rule that you first have to meet all your safety goals before you get

paid other incentive payments?

Senator VOINOVICH. You let them decide how they achieve it. If

they want to put a safety rule in, and that is the way they get high

performance evaluation of their people to meet the standard, if

they want to do it that way, fine. They can do it anyway they want

to. The main thing is to make sure that we have the highest standards of safety and the people working in the plant get it.

Mr. MCGAFFIGAN. We agree. That is the benchmarking that

Commissioner Merrifield talks about. We think we are going to get

to a point where people adopt very good practices in areas that are

very hard to regulate through the processes that the industry itself

regulates.

I think this industry, through the Institute of Nuclear Power Operations established after Three Mile Island, is absolutely committed to what the late Bill Lee, the Duke executive said, ‘‘They

are only as good as the weakest member.’’ They are trying to learn

the lessons of Davis-Besse every bit as much as we are trying to

learn the lessons of Davis-Besse. Davis-Besse was on their good

guy list, too, just like they were on ours. They are committed to not

letting that happen again. They are looking at these issues that executives peer reviewing each other——

Senator VOINOVICH. I want to know if you are dedicated to making sure that it does not happen again.

Mr. DIAZ. Of course, we are.

Mr. MERRIFIELD. Yes, sir; yes, sir.

Senator VOINOVICH. You are a regulatory Agency.

Mr. MCGAFFIGAN. Yes, sir. And we are going to do everything

that we can do within the bounds of what a Federal regulator

should do to make sure that Davis-Besse do not happen. We are

absolutely dedicated to that. We wake up every day. Our staff

wakes up every day dedicated to that purpose.

Mr. MERRIFIELD. Mr. Chairman, you have shown great leadership in holding our feet to the fire on the safety issues arising from

Davis-Besse. We fully appreciate and recognize the concern that

you have and the concerns raised by GAO. The issues of the safety

culture are tough issues. They are not easily discussed or resolved.

I think that you are pointing out that we need to have further

dialog with you and others on this matter. I think that is a reasonable request and one that we can certainly say that we will continue in the future.

Mr. DIAZ. But I would like to reassure you that we are totally

dedicated to making sure that every aspect of the safety of these

plants, including how the managers manage safety culture, is not

only important, but we are committed to making sure that happens.

Senator VOINOVICH. We are going to talk about setting standards. If you will not do it, I will get legislation passed to get it

done. But we are going to talk about it. I would rather do by regulation and by working with the industry. But this is a big issue.

I have run some operations. It is the mentality of the people who

work there that make the difference. If they slough it off and they

do not care about it, and it is not high on the list—performance

36

evaluations are very important. That is one of the ways that you

get people’s attention.

They ought not to be mandated, but if I were a business and

safety was very important, I would give that some consideration in

terms of performance evaluations so everybody knew this was important and if you did not do your job in that area, then you are

not doing your job.

Mr. MCGAFFIGAN. Sir, I could not agree with you more that that

is exactly what we would like all of our licensees to do—to make

sure that the incentive system puts safety first. I do not think that

necessarily was the case at Davis-Besse. I think the industry is

learning that lesson, but it is very, very hard. We have gotten reports from GAO, as they have said before, that we should regulate

in this area. No one has given us an existence proof of a regulation

that can be implemented. That is what we are looking for.

Senator VOINOVICH. We can talk about that.

We should get onto to the next panel. Thank you very much. We

look forward to spending some time with you about this issue and

a couple of others.

Mr. DIAZ. Thank you.

Mr. MCGAFFIGAN. Thank you.

Mr. MERRIFIELD. Thank you.

Senator VOINOVICH. The record is going to be held open for questions from Members of the committee.

Without objection, so ordered.

Senator Inhofe asked that this be submitted in the record in response to Senator Reid.

‘‘I understand in my absence that Senator Reid said there was an agreement to

hold Admiral Grossenbacher until a Democrat had been nominated, thereby linking

the two nominees. I want to state for the record that we never had such an agreement. We tried to hold a hearing on Admiral Grossenbacher several times. Each

time we were blocked by the minority.’’

Without objection, we will put this in the record.

Senator VOINOVICH. I apologize to the second panel for the delay.

I hope it has not inconvenienced you too much. We are going to ask

that you limit your statements to 5 minutes. We want to assure

you that your full statements will be in the record before this committee.

We are pleased to have Marvin Fertel, senior vice president of

Nuclear Generation; David Lochbaum, nuclear safety engineer,

Union of Concerned Scientists; Marilyn Kray, vice president for

project development, Exelon Generation; and Barkley Jones, professor, Department of Nuclear, Plasma, and Radiological Engineering, University of Illinois at Urbana—Champaign.

Thank you all for being here today with us. We will start with

Mr. Fertel.

STATEMENT OF MARVIN FERTEL, SENIOR VICE PRESIDENT

OF NUCLEAR GENERATION, NUCLEAR ENERGY INSTITUTE

Mr. FERTEL. Thank you, Chairman Voinovich, and Ranking

Member Carper.

I appreciate the opportunity to represent NEI’s member companies before this subcommittee today. While my written testimony

37

is much broader, my comments today will briefly discuss three key

points.

No. 1, our country’s 103 nuclear power plants are critical to our

economy, energy security, and environmental goals, and currently

produce electricity for one in every five homes and businesses.

No. 2, an effective, credible, stable, and efficient NRC is vital to

both assuring protection of public health and safety, and to providing an environment that allows for positive business decisions

concerning our existing plants and those of tomorrow.

No. 3, I will comment on industry actions to address the issue

of the degradation of materials used in nuclear plant components

and systems.

Over the past decade, our 103 nuclear plants have achieved

record levels of production and efficiency while maintaining the

highest levels of safety. As our second largest source of electricity,

U.S. nuclear power plants produced 767 billion kilowatt hours in

2003, which represents a 25 percent increase compared to 10 years

ago.

Nuclear power plants are also the most affordable baseload

source of electricity today, with costs lower than those for coal and

natural gas and oil. In an economy that is seeing great volatility

in the course of oil, gas, and coal, electricity from nuclear plants

provides consumers and businesses with a high degree of price stability.

As this subcommittee is responsible for Federal clean air policy,

I am sure that you are aware that nuclear power generates threefourths of all emission-free electricity in the United States. This

Monday, Exxon-Mobile ran a full-page ad in the Washington Post,

talking about its efforts to reduce greenhouse gas emissions. The

company was rightfully proud to advertise that its 80 co-generation

facilities reduced emissions by an amount equivalent to taking a

million cars off the road, a rather impressive feat.

But to put nuclear’s clean air value to our Nation in perspective,

annually the nuclear energy industry impact on greenhouse gas

emissions is over 100 times greater, the equivalent of eliminating

the greenhouse gas emissions from 138 million cars, or about 9 out

of every 10 U.S. passenger cars.

Nuclear is indeed our largest source of emission-free electricity.

To enjoy this benefit, our existing plants must continue to operate

and new plants must be built in the coming years. This depends

on the NRC’s effectiveness as a safety regulator as well as its efficiency.

As others on this panel will emphasize, regulatory uncertainty is

the largest perceived risk with new nuclear plant construction. Providing certainty, predictability, and stability will be essential to attract investment in our new advanced design reactors.

We now have 4 years of experience with the NRC’s revised oversight process. This new oversight process is a major success for

safety and for improved regulatory stability. The new process focuses on those areas of the plant that are most important to safety.

It has improved transparency to all stakeholders, as well as enhanced objectivity and regulatory stability.

The industry fully supports the NRC’s efforts to make the regulatory process more safety focused. We believe it work is far from

38

complete. The Agency must move forward systematically and aggressively to incorporate its safety focused approach into the rules

themselves.

We also acknowledge the Agency for its progress in reviewing applications for license renewal of existing plants. Four years ago the

process was anything but certain. Today the Agency’s businesslike

approach to the reviews has resulted in a renewal of the licenses

for about one-quarter of the Nation’s plants. We expect almost all

plants will go for license renewal.

The lessons learned from the license renewal process and the discipline inherent in it must be applied as the Agency faces new challenges in the licensing process for the Yucca Mountain project, and

the licensing of new facilities such as the new uranium enrichment

facilities.

We urge this committee to systematically monitor NRC’s

progress on changing the regulations to be more risk—informed, on

their continued activities to review license renewable applications,

and on all of their new facility licensing reviews.

As you are aware, the nuclear industry fully pays for all the costs

associated with NRC regulation. In fact, nuclear power plant owners pay for all costs associated with their operation, including all

externalities. We are the only industrial facilities to do so.

Four years ago this committee supported, and Congress passed,

a law that reduced the fees paid by the industry as a share of the

NRC budget by up to 10 percent. The industry urges this committee to renew carefully the NRC’s fee structure and its budget

which has grown significantly over the past few years. Industry

fees should not be used for services that do not directly support

regulation of the industry.

As discussed in my written testimony, industry also believes that

the NRC could operate more efficiently at reduced costs to licensees. To achieve this would require a systematic review of NRC resources, their priorities, and a holistic view of the NRC work force

and attrition issues.

Finally, I would like to mention the industry’s response to the

issue of material degradation at the Davis-Besse plant. While significant materials management programs were in place for decades,

the industry aggressively responded and has acted on the DavisBesse experience. We have expanded our programs in this area,

and more importantly, through NEI have developed an integrated,

coordinated, and much more proactive material management program. The industry will invest at least $65 million annually in this

effort.

I can assure you that along with the NRC we are fully committed

to detecting and resolving material issues well before they pose any

challenge of safe operations of our plants.

Mr. Chairman, no one values the safe operation of our plants

more than the people that work at the plants and the owners of

those plants. Sound business practice is not just regulations that

require the owners to maintain and operate the plants with safety

as the top priority. Your concern about safety culture is fully appreciated and shared by us. I would welcome the opportunity to discuss with you and your colleagues the bases for achieving the type

of safety culture we all would strive for.

39

The continued oversight of the NRC by this committee to ensure

a credible, effective, efficient, and stable regulatory process is both

appreciated and needed. Furthermore, a disciplined focus on NRC

resources and budget issues has never been more appropriate than

now.

We thank this committee for its past actions. We welcome your

continued focus on achieving greater efficiencies in the future.

Thank you. I would ask that my written statement be placed in the

record in its entirety.

Senator VOINOVICH. Thank you very much, Mr. Fertel.

Mr. Lochbaum.

STATEMENT OF DAVID LOCHBAUM, NUCLEAR SAFETY

ENGINEER, UNION OF CONCERNED SCIENTISTS

Mr. Lochbaum. Thank you, Mr. Chairman, and Senator Carper.

Twenty-five years ago, a Three Mile Island reactor outside Harrisburg, PA experienced the worst nuclear power plant accident in

U.S. history. That accident was not caused by uniquely bad conditions. It resulted from broad-based problems at many reactors that

eventually produced a meltdown at one of them. The post-accident

inquiries resulted in extensive changes at both the nuclear industry and the NRC.

This history is relevant to today’s hearing because compelling

evidence suggests that extensive degraded conditions at many reactor sites are again being tolerated. The NRC’s response to these

warning signs have amounted to little more than rearranging the

deck chairs on the Titanic.

Fortunately, there is still time for the NRC to plot a different

course so as to avoid the icebergs looming on the horizon. Earlier

this week, GAO released a report on the NRC’s mishandling of

safety issues at the Davis-Besse Nuclear Plant. GAO identified several problems NRC should correct. The GAO and the media made

much of the fact that the NRC rejected many of the findings.

The larger concern is that the NRC has seldom fixed findings

made by its internal and external auditors, even those findings to

which it agreed. I reviewed reports issued by the NRC’s Lessons

Learned Task Forces, the NRC Inspector General and the GAO

over the past 8 years and saw the same regulatory problems contributing to unacceptable safety levels at plant after plant.

Earlier this week the GAO reported that the NRC is not addressing three systemic problems underscored by the Davis-Besse incident. The first problem is that the NRC’s process for assessing

safety at nuclear power plants is not adequate for detecting early

indications of deteriorating safety. GAO reported this very same

finding in January 1999, July 1998, May 1997, and January 1996.

The second problem identified by GAO was NRC’s decision—

making guidance does not specifically address shutdown discussions or explain how different safety considerations, such as quantitative estimates of risk should be weighed. The NRC Inspector

General reported virtually identical findings in May 2003, December 2002, and August 2002. The GAO reported this very same problem in February 1999.

The third problem identified by GAO was that the NRC does not

have adequate management controls for systematically tracking acVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00045 Fmt 6633 Sfmt 6601 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
40

tions that it has taken in response to incidents at plants to determine if the actions were sufficient. GAO reported a virtually identical problem in September 2003, involving security. The NRC Lessons Learned Task Force reported this problem in September 2002.

The NRC’s Inspector General reported this problem in August

2000. GAO reported this problem more broadly in May 1997.

Thus, the NRC is much like Bill Murray in the movie, Groundhog Day. They keep relieving the same problems over and over instead of fixing them. Bill Murray’s movie lasted about 90 minutes.

The NRC’s rut dates back two decades and continues today.

Davis-Besse is the 28th reactor in the past 20 years to be shut

down for a year or longer to fix safety problems. The NRC must

fix its chronic problems to end its ‘‘Groundhog Day.’’

The 28 reactors that endured these lengthy outages brought in

new management to direct the recovery efforts. New managers can

assess policies and practices unencumbered by tradition. New managers can strike out new paths without implicitly conceding that it

led workers down the wrong roads in the past. New management

is a tried-and-true method for bringing about timely reforms, yet

it is an untried method at NRC.

A few of NRC’s managers are new to the Agency. Most worked

their way up through the ranks. Consequently, they all come from

the same mold and have the same habits. Retirements and reorganizations merely put different faces on the same management

styles. Reform efforts fail because repackaging and reapplying that

management style cannot yield meaningful changes.

UCS is not advocating a massive infusion of new managers at

the NRC. That would be unfair. That would be the fastest and surest fix, but it would be unfair to oust many fine public servants.

Instead, we urge changes to the NRC’s hiring and promotion

practices. Retirements and voluntary departures should become opportunities for finding the most qualified replacement, not just the

most qualified replacement within NRC.

One of the NRC’s strengths is talented, capable, and dedicated

employees. Properly led, they can make sure that nuclear power’s

costs are not too high and nuclear power safety levels are not too

low.

On behalf of UCS, I wish to thank this subcommittee for conducting this hearing and inviting our views on this subject. Thank

you. I would ask that my written statement be placed in the record

in its entirety.

Senator VOINOVICH. Thank you very much, Mr. Lochbaum.

Ms. Kray.

STATEMENT OF MARILYN KRAY, VICE PRESIDENT FOR

PROJECT DEVELOPMENT, EXELON GENERATION

Ms. KRAY. Good afternoon, Mr. Chairman and Senator Carper. I

am with Exelon Nuclear. I am also here in the capacity as a lead

representative for NuStart Energy Development.

I preface my remarks today with an observation of the opportune

timing of this hearing. There are a number of factors converging

to establish a platform requiring not only our attention but also our

action. These factors are: the heightened concern with the stability

of our electricity supply, the recognized need for fuel diversity, and

41

less dependence on foreign energy sources, the increased concern

with the environment, and increasing demand for electricity, both

domestically and globally.

These factors suggest the need to revisit each component of our

generation mix. I will be here to discuss only the nuclear power

component which provides, as stated, approximately 20 percent of

our electricity needs. In response to an earlier question, it is my

opinion that our current fleet of operating reactors cannot uphold

the current 20 percent contribution.

As with any form of energy, nuclear power has both its risks as

well as its benefits. We must be forever vigilant of the need to continuously assess the operational safety of our plants, internalizing

the lessons learned from TMI, and more recently, Davis-Besse. We

must also identify a long-term solution to our nuclear waste problem.

It is fair also to acknowledge the benefits of nuclear power—

being clean, reliable, and currently economic. I assert that the benefits outweigh the risks, implying that this generation alternative,

along with the others, needs to be preserved.

Preserving the nuclear power option, may sound like a passive

strategy, but the reality is that it requires coordinated actions by

both the Government and the nuclear industry. I was pleased when

the DoE announced the Nuclear Power 2010 Initiative. It was established to confront some of the challenges which are unique to

nuclear investments. As part of this program, the DoE issued a solicitation inviting power companies to submit proposals to address

two of the significant investment challenges, these being regulatory

predictability and completion of designs.

The NuStart Energy Development, LLC, was formed solely for

the purpose of responding to this solicitation. It was one of three

industry consortia to submit a proposal. Since submitting my written testimony only a few days ago, I am pleased to announce that

Florida Power and Light has also joined the consortium, making it

now eight power companies and two reactor vendors.

Our proposal to the DoE spans a 7-year-period from 2004 to

2010. The total cost is $800 million, with the industry committed

to providing one-half, or $400 million. The end result of this project

will be a full demonstration of the NRC licensing process, and the

completion of the design engineering work for the two selected U.S.

reactors. Together these will significantly reduce the time to market for new plants and also alleviate some major areas of uncertainty.

Beyond the Nuclear Power 2010 program, however, is a need to

financially incent first mover investors. Possible incentive mechanisms include those modeled after other energy and public works

projects.

In summary, preserving the nuclear power option requires action. In the near term, we must fund the Nuclear Power 2010 Initiative, specifically $80 million for fiscal year 2005, to cover all

three consortia proposals. In the long term, we must adopt energy

policy that establishes methods to promote large capital investments into our energy sector while presenting reasonable risks to

shareholders.

42

Thank you for the privilege to share these thoughts with you. I

would ask that my written statement be placed in the record in its

entirety.

Senator VOINOVICH. Thank you very much, Ms. Kray.

Mr. Jones.

STATEMENT OF BARCLAY JONES, PROFESSOR, DEPARTMENT

OF NUCLEAR, PLASMA, AND RADIOLOGICAL ENGINEERING,

UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN

Mr. JONES. Chairman Voinovich and Senator Carper, I am

pleased to be here as representative of the nuclear engineering

educational community. My background is listed in the front end

of the material that I have submitted for the record.

What I would like to do is highlight a few issues that I brought

up in the testimony, but would like to expand briefly upon. I listed

four of the timely jobs that the NRC has before it. Those have been

brought forward this morning.

There is discussion about whether there is sufficient manpower

available to meet job demand. From the production of manpower

point of view and where the universities fit in, it is unclear that

the present shortfall in the production of nuclear engineers will

satisfy the demand. The difference currently is in the order of hundreds per year.

We are increasing our number of undergraduates in the programs, but you must realize that as you add freshmen to programs,

it is 4 years, at least, before they graduate and arrive on the work

force scene. It is several year beyond that before you would say

they are experienced to the point where they would be trusted to

handle significant positions within the power companies, NRC and

other positions into which they go.

So my urging to you is to keep track of the demographics and

look where resources can be spent in order to ensure that the production of nuclear engineers will be there when needed.

The current work force demographic is very skewed to upper age

levels. We have heard this morning of the shortfall of experienced

people as retirements are occurring. We think that the universities

can and will play a pivotal role, but their resource base is one that

is limited by what the universities can afford to put into small programs which nuclear engineering programs typically are.

Nuclear engineering programs tend to be much smaller than

those in mechanical, electrical, computer sciences, et cetera. Therefore, a demand for new faculty and for increased expenditures is

hard fought by other departments within the university organization.

I indicated in my statement that it takes an enlightened administration to respond favorably to the nuclear engineering national

needs. My institution has just gone through a 1-year review of

whether our nuclear engineering program should be retained or

dismantled. This is in a State with 11 operating reactors and over

50 percent of the electrical power supplied from nuclear power. We

are the only university in the State with a nuclear engineering program. I am happy to report that the outcome was positive and we

are now in a position of being able to recruit for new faculty.

43

It is worth noting that Illinois has a similar demographic in its

work force with other nuclear engineering educational programs.

Three of us are at or past retirement age. That is out of nine faculty, currently. To replace us and to have overlap requires immediate hiring. The internal competitive pressures are such that is

difficult to gain in numbers. The future at Illinois and at sister institutions requires that Government aid, which has been coming

from the Office of Nuclear Energy part of DoE, and other government and industry sources is very helpful. It supports fellowships,

research and more recently infrastructure for the programs.

It has basically saved the day in a lot of cases for nuclear engineering departments.

But the number of departments has continued to shrink. So our

ability to be able to produce the output required is still limited.

Fortunately, the young people coming into universities are signing

up in nuclear engineering departments in larger numbers. We

think that, overall we will be able to supply an increased number

of graduates and to sustain the discipline.

I would be happy to respond to other points that I have raised,

if you have questions. I appreciate the opportunity to speak with

you. I would ask that my written statement be placed in the record

in its entirety.

Senator VOINOVICH. Thank you very much, Mr. Jones.

I really am interested, Dr. Jones, in this issue of where we are

going to get the people to get the job done. Is it the Department

of Energy that is providing you some help right now?

Mr. JONES. Yes, they have instituted various research programs

which basically support the graduate side of the house, but these

supply the grist, if you will, to sustain undergraduate programs as

well. They have the Nuclear Engineering Education Research

(NEER) program, which recently has had increased funding level.

They also have had a Nuclear Energy Research Initiative (NERI)

program in conjunction with National Laboratories and Industry.

Unfortunately, that one has shrunk dramatically in funding. They

also have introduced an International Nuclear Energy Research

Initiative I–NERI which provides resources for the Federal role in

International Cooperation on Energy Innovation. The Innovations

in Nuclear Infrastructure and Education (INIE) program, which

was established in FY 2002, strengthens the Nation’s university

nuclear engineering education programs through innovative use of

the university research and training reactors and encouraging strategic partnerships between the universities, the DOE national laboratories, and U.S. industry. These are restricted to being run

through universities. These programs are very helpful.

The fellowships and scholarships that DoE provides and that

INPO provides, and that NRC, to a limited extent provides, are

also very helpful. If you look back at the beginning of nuclear engineering in the late 1950’s and throughout the 1960’s and into the

1970’s, the traineeships and fellowships that were provided at that

time basically attracted the interest and talent that made the robust programs that initiated the discipline. I think we need to go

back into that mode, where we have larger numbers of them to attract the quality people that are needed to sustain the industry, to

44

sustain the security and oversight levels that we need for the

plants, and to provide the needed continuing manpower.

Senator VOINOVICH. Do you have a national organization that

you belong to?

Mr. JONES. Yes, it is an ad hoc one. It is called NEDHO, the Nuclear Engineering Department Heads Organization. I chaired it 10

or 12 years ago. It interacts and works closely with the Department

of Energy, the Nuclear Energy Institute, the National Academy for

Nuclear Training (Educational Assistance Program) of the Institute

for Nuclear Power Operations (INPO) and with the American Nuclear Society, as well as other nuclear related entities.

Senator VOINOVICH. I would be very interested if you could get

your organization to provide me with a memorandum or whatever

that would lay out what you really think needs to be done in terms

of the Federal Government’s role in providing the people that we

are going to need for this industry in this country.

I understand that some of the schools have closed down their nuclear engineering departments; is that correct?

Mr. JONES. That is correct. We are down to less than 30 now.

Senator VOINOVICH. How many were there before?

Mr. JONES. It started out in the 1970’s and 1980’s with about 60.

Senator VOINOVICH. Well, I would welcome that from you.

Mr. JONES. Absolutely.

Senator VOINOVICH. Without objection, so ordered.

[The referenced document follows on page 224.]

Senator VOINOVICH. Mr. Fertel, what is the industry doing about

this also? You have to be as much concerned as the people in the

NRC. You need them in the industry.

Mr. FERTEL. Actually, from NEI’s perspective, we are actually

very much involved with the program. We work very closely with

NEDO, and actually with the American Nuclear Society and then

with NRC and DoE looking at the manpower and womanpower the

work force needs going out over the next 20 years and have identified where the real needs are.

For instance, Dr. Jones mentioned the fact that DoE supports the

program. They are now going to support program for health physics

schools because we are seeing that we are really shorted in health

physicists going out over the next 10 years. That has been very

useful.

We will provide you, Mr. Chairman, the results of the work that

we have been doing which is an effort to be much more integrated

across the entire community, not just the industry side, but really

what Government thinks they will need, what the industry thinks

it will need, and where we see the resources coming.

I was at a DoE Advisory Committee meeting in the last two days

and they talked about the program that was just mentioned. Their

program is doing pretty well there. It is run by Bill Magwashot.

They are spending about $21 million supporting everything from

fellowships and scholarships to research reactors at the universities.

While we have lost a number of schools and, in fact, lost three

research reactors in recent years, the trends are all much better

now. School programs are growing. One of the things that DoE has

been able to facilitate the universities working together rather than

45

competing with each other to try to use resources. That has actually turned out to be a positive for everybody.

We will share with you, Mr. Chairman, the work that NEI has

done with the others. It is not just us.

Senator VOINOVICH. I would like to see it just to see where you

are and where you think you need to go and what role you should

be playing because you are interested in it and the university

should be in it, as well as DoE.

Without objection, so ordered.

[The referenced document follows on page 239.]

Mr. FERTEL. We just completed a survey that will be very insightful as to where the resource needs really are.

Senator VOINOVICH. Are you familiar with the Partnership for

Public Service?

Mr. FERTEL. Just vaguely.

Senator VOINOVICH. Well, there is a guy named Sam Heyman

that contributed $25 million to set up this Partnership for Public

Service. The whole aim of the organization is to make universities

knowledgeable of the needs that we have in the Federal Government for the best and brightest people. Many of the industries in

this country are participating in that program.

Dr. Jones, are you familiar with the Partnership for Public Service?

Mr. JONES. No, I am not.

Senator VOINOVICH. I will get you information on it.

They are out talking to universities about the opportunities that

are available and how they can help them advertise those opportunities.

What do you attribute the fact that you are getting more students than you did before, more interest?

Mr. JONES. I think partly with the support that has come in from

the several programs mentioned earlier. The job market is good,

the salaries are high. There is an enhanced recruiting program

that goes into the high schools to make the discipline more visible

to the incoming student. I think there are a variety of these activities that are occurring and making the difference. In addition, we

are working much harder at attracting students than we have previously.

Senator VOINOVICH. Good. Dr. Jones, do not retire. We need you.

In this Energy bill, we do have some really good provisions that

will help to deal with that. I am trying to get some flexibility

through. This specifically deals with this retirement and bringing

people back on a part-time basis to take care of the transition and

move along. There is other legislation that we have that bring in

people from outside on a contract basis to come in and help them

out. There is just a lot more flexibility for them.

There are little simple things like if they go out and hire somebody that is maybe in the middle of their career, that when they

come to work for the Federal Government they do not have to wait

15 years before they get a month’s vacation. There are a lot of little

simple things that we could be done to make it a lot easier.

But I am very interested in that. I have another hat and that

is the Oversight of Government Management in the Federal Work

46

Force. So that is why I am so interested in this whole issue of

human capital.

The other question I would like all of you to comment on, if you

feel that you have something constructive to say about it is this

whole little debate I had with the members of the Commission in

regard to safety and the safety culture.

Mr. Fertel, I think if I heard you right, you said we are not there

yet. I am not asking for micro-managing, but it seems to me that

there are certain kinds of standards that the NRC can recommend

through regulation or what have you, and then have people that

are onsite that are aware of the standards. They said 7 years, but

I am not sure it should be 7 years. That may be too long for people

to be at a place. I think maybe after three or 4 years it is time to

go because you do, after a while, get kind of used to the ‘‘Old Boy’’

network and stuff.

It seems to me that if you had some really competent people that

were paid competitively, they could be looking after a lot of stuff.

It is a no-brainer, I think, to find out that people are pretty sloppily about safety.

Mr. FERTEL. First of all, on Davis-Besse, there is no excuse for

the licensee, for the NRC, or actually even for the industry overall

because SAMPO had gone into Davis-Besse on evaluations and not

identified the problem. So it was a total breakdown of every aspect

of what you should look for to make sure that those things do not

happen.

David mentioned Three Mile Island 25 years ago. He is concerned that we are maybe on the crest of another situation like

that. After Three Mile Island, as he said, INPO was formed, the

Institute of Nuclear Power Operations, an awful lot of other things

happened, too, as an industry and as regulators at NRC.

As an industry, we changed the whole way we look at training.

We got into a systematic approach to training. We put simulators

at every site. There is a whole different regime for training.

We looked at procedures, the way our operators react to events.

They went from basically thinking we could figure out every event

and you could just take Event ‘‘A’’ and I will react to it, to a process

that is more symptom based, almost like doctors treat patients

when they come in. What are the symptoms? How do I stabilize the

patient? How do I stabilize the reactor? It was a massive culture

change.

I think when I look at the Davis-Besse event, and when I look

at it, I am saying, as a sort of collective group of people in the industry, what we felt was that it was a breakdown in safety. Now,

NRC has a role to play in helping learn from that. The industry

has a role to play in the aggregate, which is INPO, NEI, and others. Then the licensees have a role to play. I think that the struggle you are hearing when you spoke to the Commissioners, and the

struggle that we would have is figuring out the right roles for each

of those.

You are exactly right. The NRC should set standards. They

should set regulatory standards on safety that if you are meeting,

it is clear that you are focused on the right things. Beyond that,

the industry, and what was alluded to by the Chairman was the

industry is responsible for management. What we do not want to

47

ever do is take that accountability away. You want to maintain the

accountability of safety as job one from the top CEO on down

through the people on the floor doing the work.

INPO has now gone out and basically did a self—assessment on

why they did not find a safety culture people. They are out talking

to people at the plants as part of their evaluations regularly. The

type of safety culture that allowed Davis-Besse to occur should

have been identified. So they have now reassessed how they do

their evaluations because there was a failure there.

They have also developed a safety culture program that we are

now going to out to share with the rest of the industry.

How would you know good safety culture when you saw it? How

would you know it when it was not there? Some of the easy things

that people say is: If you walk around the plant, basically cleanliness is an indication. Well, if you look at what was going on at

Davis-Besse, changing filters every week rather than monthly, is

an indication of a problem.

It should have been picked up. Some of this is not rocket science.

It is a breakdown. I think that figuring out where you regulate and

where you make sure things are visible, and I think using a resident much more effectively is important. You commented that

those are your really important people. Get them trained the right

way. I think the Commission has heard that. I think it is hard for

a resident to look at everything.

Coming over here in a car, I was talking with Dr. Jones and he

said, ‘‘Well, what does the resident look for?’’ I said, ‘‘Well, maybe

that is one of the things that NRC has to reassess. Rather than

checking every little thing, they should be looking for bigger and

broader indications of problems.’’

I would encourage right now at this point this. We are very seriously looking, from an industry standpoint, what do you do about

the Davis-Besse experience? Complacency is the worst thing that

can happen in our industry. Everybody knows it. Everybody says

it. It has been said repeatedly by NRC Commissioners.

Senator VOINOVICH. I want to tell you something. The reason I

am interested in this is because I support nuclear power.

Mr. FERTEL. I understand that, sir. You want it to succeed.

Senator VOINOVICH. But the fact of the matter is that you are not

going to have more nuclear power until you resolve some issues.

One of the big issues over the years has been, and it has prevented

us from moving power, is? What do we do with nuclear waste? We

think that problem has been solved with Yucca Mountain and so

forth. We still have a long way to go with that.

But the fact of the matter is that if the public feels that these

are fail-safe, that we have a responsible way of dealing with nuclear waste, you will be able to get the support that we need to

move in that direction. So we agree. We should have coal. We

should have nuclear. We should have all of it and be working toward renewables; the whole thing.

But if you do not have the regulation, if you do not have the environment, then in terms of support for that, it is difficult. The

same thing is even with investors. You are going to go out and try

to find investors to put it in. If you have a problem of: ‘‘Where do

you put this stuff? I have these problems with safety things. The

48

public is not for it.’’ Then I do not want to invest in one of these

deals.

That is what we are trying to do here. It seems to me that the

industry itself should be way out in front on everything you do.

Mr. FERTEL. Well, it certainly is. David’s comment about what he

have seen on the industry side when we change people around

when there is a problem, I think is true. I think maybe that is a

lesson that NRC could look at. It may not be standards that have

to be changed, even though there probably are some. It may be the

way people look at things when they are there. Your comment that

if you are there for a long time, it all blends together.

It may not even be an ‘‘Old Boy’’ network as much as I have always seen it look like this. I am not seeing a difference. It is not

the kind of eyes you want looking at stuff.

What I would like to do is probably share with you what we are

doing in the industry, and share with you what INPO is doing and

maybe offer some suggestions on what we think NRC could do. I

am not sure that there is a silver bullet stand that they could

issue. I think it is more of a menu of things that we all need to

do to assure that safety culture is correct and that safety is always

on everybody’s mind.

Senator VOINOVICH. Thank you.

Mr. Lochbaum, do you want to comment on that?

Then we are going to have to wrap it up. First it was the President, and now it is the Secretary of Defense who is going to meeting with the members of the Senate. I want to make sure I get over

there and hear what he has to say.

Mr. LOCHBAUM. Just very briefly. I just wanted to say that the

NRC has a safety culture problem of its own. Surveys conducted by

the Inspector General and the GAO have shown that, for example,

that the NRC workers who have raised safety issues, one-third of

them feel that they have been retaliated against for having done

so. Those kinds of problems that Davis-Besse had to fix, we feel the

NRC needs to fix internally so it has a good safety culture, as well

as all the plants in the country. Thank you.

Senator VOINOVICH. I would be interested in working with the

GAO and maybe getting input from you folks is: What is the standard is that we use to make sure that these things that have been

long standing are taken care of?

I think that is the problem. I think we should lay this out, work

with some people, get the standards, and then just basically say,

‘‘Here are the problems.’’ Then when we come back for the next

hearing, we want to do some things in the office beyond the hearings. But I am just saying that you have some measuring device

to know whether or not you actually have made an improvement

in the area.

Mr. LOCHBAUM. One thing the NRC has incorporated into its reactor oversight program is a formal feedback mechanism every year

where they go out and see: ‘‘Have we achieved the expectation we

set out for this?’’ I think broadening that and continuing that is a

good way to see if whatever fixes you implement, did you achieve

what you were trying to do, and not cause some unintended consequences somewhere else.

49

So I think that NRC initiative was a good thing to do. I think

they should continue that.

Senator VOINOVICH. Mr. Fertel, Mr. Lochbaum, or anybody,

maybe one of the nicest things that we could do for the NRC would

be to maybe find the best program in the country that monitors

those kinds of things from a business point of view, and institute

it there. It seems to me that that is missing. Maybe we could get

a little public/private partnership going here and come in and help

them out with that. It seems that they have had an ongoing problem with that.

Like Mr. Diaz, they are all conscientious people that want to do

the right thing. I do not mean hiring a consultant, but maybe the

industry should think about that. This is an Agency that is very

important to you.

Dr. Lochbaum, it is important to you. I challenge you. Could we

sit down with them and say: ‘‘Here is what you should do. Find the

best outfit in the country and say: ‘Would you be willing to come

in and spend some time over there?’ ’’

When I was Governor, I had private sector people to come in and

spend 6 months and some of them for a year pro bono to help

shape up some of the operations that we had in city and State government. It is very frustrating to me that we have these lessons

learned but from Mr. Lochbaum’s point, we have had lessons

learned and lessons learned. We have had GAO reports, and we

have had inspectors generals. I do not think that these are people

who do not care. But maybe they need some help.

Mr. LOCHBAUM. We did send a letter to the Commission on February 2nd volunteering to help on the safety culture issues. We

thought they did a good job in addressing the Hope Creek and

Salem issues. We volunteered to help work with the industry and

with the NRC to figure out what is the right answer.

Senator VOINOVICH. I am going to suggest that to Mr. Diaz that

maybe we could get a little group together in my office and talk

about it and see where we can go.

Mr. LOCHBAUM. We would be glad to.

Senator VOINOVICH. That would be very good.

I want to thank you very much. You have been very patient. I

appreciate your conscientiousness. We have a challenge ahead of

us.

Thank you.

[Whereupon, at 1 p.m., the subcommittee was adjourned, to reconvene at the call of the chair.]

[Additional statements submitted for record follow:]

STATEMENT OF CHAIRMAN NILS DIAZ, NUCLEAR REGULATORY COMMISSION

Mr. Chairman and members of the subcommittee, it is a pleasure to appear before

you today with my fellow Commissioners to discuss the Nuclear Regulatory Commission’s programs. We appreciate the past support that we have received from the

subcommittee and the committee as a whole, and we look forward to continue working with you.

As you know, the NRC’s mission is to license and regulate the Nation’s civilian

use of byproduct, source, and special nuclear materials to ensure adequate protection of public health and safety, promote the common defense and security, and protect the environment. The Commission does not have a promotional role—rather,

the agency seeks to ensure the safe application of nuclear technology if society elects

to pursue the nuclear energy option. The Commission recognizes, however, that its

50

regulatory system should not establish inappropriate impediments to the application

of nuclear technology. Many of the Commission’s initiatives over the past several

years have focused on maintaining or enhancing safety and security while simultaneously improving the effectiveness and efficiency of our regulatory system.

With your permission Mr. Chairman, I will highlight a few of our ongoing initiatives and achievements.

REACTOR SAFETY PROGRAMS

The past 3 years have seen the maturing of the reactor oversight process. We believe that this program is a significant improvement over the former inspection, enforcement, and assessment processes. We received external recognition of the effectiveness of our Reactor Inspection and Performance Assessment program when the

Office of Management and Budget evaluated it using its Performance Assessment

Rating Tool (PART) and awarded the top rating, ‘‘effective,’’ a rating achieved by

only 11 percent of the Federal programs assessed. One of its strongest attributes

is its transparency and accessibility to members of the public. You will find performance indicators and inspection findings for every power reactor on NRC’s public web

site page, as well as our current assessment of each reactor’s overall performance.

The transition to the reactor oversight process has gone well, and we will strive to

make further improvements.

Overall, the industry has performed well. As of the end of CY 2003, there were

two plants designated for the highest level of scrutiny under the reactor oversight

process, the Cooper plant in Nebraska and the Point Beach plant in Wisconsin. In

addition, the Davis-Besse plant in Ohio has been treated under our Manual Chapter

0350 Startup Oversight Process. The Cooper and Point Beach plants have received

significant attention from our regional and headquarters offices, and we are confident that these plants are on a path to resolving long-standing problems.

Over the past 2 years, the NRC staff has devoted significant resources for enhanced regulatory oversight of the Davis-Besse plant following the discovery of extensive degradation of the reactor vessel head. After an extgensive plant recovery

program and comprehensive corrective actions by the licensee, FirstEnergy, and considerable NRC inspection and assessment, the staff determined that there was reasonable assurance that the plant could be safely restarted and operated. This decision was made in a deliberate manner, based on sound regulatory and technical

findings, and in accordance with the requirements of Federal statutes and NRC regulations. On March 8, 2004, the NRC staff gave approval for the restart of DavisBesse. In addition, the staff issued a confirmatory Order requiring independent assessments and inspections at Davis-Besse to assure that long-term corrective actions

remain effective. The NRC’s oversight panel will continue to coordinate the inspection and regulatory activities for Davis-Besse until plant performance warrants resumption of the normal reactor oversight process.

We acknowledge the extensive interest in, and concerns about, the restart of

Davis-Besse by area residents; public interest groups; Federal, State, and local officials; and others. We have conducted our regulatory responsibilities in an open and

candid manner, keeping the public informed to the maximum extent possible at

each step of the process. We have not been able to share the results of our Office

of Investigations’ reports because those have been referred to the Department of

Justice for its consideration. Those reports have, however, been fully considered by

NRC staff prior to restart. We have had extensive communication with our stakeholders, including establishing a web site and issuing monthly newsletters. Also

during the past 2 years, the NRC staff conducted 75 public meetings on Davis-Besse

most of these meetings were held in the vicinity of the plant and held 50 briefings

for Federal, State, and local government officials. The oversight panel will continue

to hold periodic public meetings near Davis-Besse with FirstEnergy officials to review the status of ongoing activities at the plant.

Concurrently, we have undertaken a significant and critical review of our programmatic and oversight activities to evaluate our own actions associated with the

reactor vessel head degradation at Davis-Besse. These actions have considered the

Davis-Besse Lessons Learned Task Force Report. The Task Force completed its review in September 2002 and issued a report that contained a number of recommendations for improvements to the reactor research, oversight, and licensing

programs. These recommendations are being implemented as part of four action

plans, encompassing: (1) stress corrosion cracking, (2) operating experience program

effectiveness, (3) inspection, assessment and project management guidance, and (4)

barrier integrity requirements. Of the 49 recommendations, 16 were completed in

2003, including all seven high priority items scheduled to be completed that year.

Inspection program guidance was revised to address the high-priority recommendaVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00056 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
51

tions regarding followup to long-standing equipment issues and oversight of plants

in extended shutdowns. Enhancements to inspector training programs were initiated. Guidance was issued regarding the adequate documentation of certain decisions. We continue to work on addressing the remaining recommendations and are

making significant progress. Except for three items, all other high-priority recommendations will be completed by the end of 2004. The remaining high priority

items will be completed during 2005.

In April 2004, we completed an examination of reactor vessel cladding and structural analyses. Based on these efforts, the staff concluded that near-term vessel failure was unlikely and that it was highly likely the vessel could have operated safely

for at least several more months following the February 2002 Davis-Besse shutdown. As you are aware, the plant restarted with a new reactor vessel head; thus,

the degraded condition no longer exists.

The NRC’s Office of the Inspector General conducted an inquiry into our oversight

of the Davis-Besse reactor vessel head degradation. The issues identified in the IG’s

report are similar to a subset of those identified by the Lessons Learned Task Force;

and as such, corrective actions have either been completed or are in progress for

each of the IG’s findings. The IG was particularly concerned with the flow of information within the agency—communication between headquarters, the regional offices, and the resident inspector staff. We are committed to improving this communication and have already witnessed a lowering threshold for raising issues. For example, there has been a significant increase in the scope and level of detail discussed during daily status meetings among NRC regional, headquarters, and site

offices, as well as improvements in internal communications. We have also placed

renewed emphasis on improving communication with the international nuclear community to ensure that new issues are promptly communicated as they arise. Going

forward, we are dedicated to improving our inspection and assessment programs to

prevent recurrence of this or similar significant challenges to safety.

REACTOR LICENSING PROGRAMS

Let me now turn to significant achievements in our reactor licensing programs.

The reactor licensing program ensures that operating nuclear power plants maintain adequate protection of public health and safety throughout the plant’s operating life. NRC licensing activities include reviewing license applications and

changes to existing licenses, reviewing reactor events for safety significance, and improving safety regulations and guidance. In fiscal year 2003, the NRC met or exceeded all established measures for the timeliness and quantity of completed nuclear power plant licensing-related actions.

The reactor licensing program’s timeliness in responding to licensee requests has

improved dramatically since 1997. At the end of fiscal year 2003, 96 percent of licensing actions in the working inventory were less than 1 year old and 100 percent

of licensing actions in the working inventory were less than 2 years old. We also

completed 500 other licensing activities, most of which were associated with identification and resolution of emerging technical issues. For example, we issued generic

communications to the industry alerting them to emerging issues such as leakage

from reactor pressure vessel lower head penetrations, the potential impact of debris

blockage on emergency sump recirculation at pressurized-water reactors, and control

room habitability. We will not be able to sustain this level of timeliness in fiscal

year 2004 because of a very large volume of security licensing actions which we are

giving the highest priority. We are managing our licensing action inventory to ensure that appropriate timeliness goals are being established for each action, and

that no safety-significant issue is left untreated.

A significant type of reactor licensing action, called a power uprate, is a request

to raise the maximum power level at which a plant may be operated. Improvement

of instrument accuracy and plant hardware modifications have allowed licensees to

submit power uprate applications for NRC review and approval. The focus of our

review of these applications has been and will continue to be on safety. In addition,

we continue to monitor operating experience closely to identify issues that may affect power uprate implementation.

Power uprates range from requests for small increases of less than 2 percent

based on the recapture of power measurement uncertainty, to large increases in the

range of 15 to 20 percent that require substantial hardware modifications to the

plants. In all instances, the NRC must be satisfied that appropriate safety margins

remain. To date, the NRC has approved 101 power uprates which have safely added

approximately 4175 megawatts electric to the nation’s electric generating capacity

and is the equivalent of about four large nuclear power plants.

52

Currently, the NRC has four power uprate applications under review and expects

to receive an additional 25 applications through calendar year 2005. This would add

approximately 1760 megawatts electric to the nation’s electric generating capacity.

The NRC recently issued a Review Standard for Extended Power Uprates (i.e.,

uprates that increase the current power by 7 percent or more), which is available

publicly, that enhances the NRC’s focus on safety and improves consistency, predictability, and efficiency of these reviews.

As stated earlier, the NRC monitors operating experience at plants that have implemented power uprates. Cases of steam dryer cracking and flow-induced vibration

damage affecting components and supports for the main steam and feedwater lines

have been observed at some of these plants. We conducted inspections to identify

the causes of several of these issues and evaluated many of the repairs performed

by the licensees. We continue to monitor the industry’s generic response to these

issues and will consider additional regulatory action, as appropriate.

License renewals are another significant type of licensing action. In 2003, thirteen

units—North Anna Units 1 and 2 and Surry Units 1 and 2 in Virginia, Peach Bottom Units 2 and 3 in Pennsylvania, Saint Lucie Units 1 and 2 in Florida, Fort Calhoun in Nebraska, McGuire Units 1 and 2 in North Carolina, and Catawba Units

1 and 2 in South Carolina—had their licenses extended for an additional 20 years.

Thus far in 2004, 2 units—H.B. Robinson, Unit 2 and V.C. Summer, Unit 1 in South

Carolina—have had their licenses renewed. That brings the total of renewed reactor

licenses to twenty-five. The staff currently has license renewal applications under

review for seventeen additional units. In every instance, the staff has met its timeliness goals in carrying out the safety and environmental reviews required by our regulations. If all of the applications currently under review are approved, approximately 40 percent of the nuclear power plants in the U.S. will have extended their

operating licenses. We expect that almost all of the 104 reactors licensed to operate

will apply for renewal of their licenses. The staff will continue to face a significant

workload in this area with the sustained strong interest in license renewal by nuclear power plant operators due to many benefits of license renewal.

While improved performance of operating nuclear power plants has resulted in

significant increases in their electrical output, it is expected that continuing increased demands for electricity will need to be addressed by construction of new

generating capacity. As a result, industry interest in new construction of nuclear

power plants in the U.S. has recently emerged. The NRC is ready to accept applications for new power plants. New nuclear power plants will likely utilize 10 CFR

Part 52, which provides a stable and predictable licensing process. This process ensures that all safety and environmental issues, including emergency preparedness

and security, are resolved prior to the construction of a new nuclear power plant.

The design certification part of the process resolves the safety issues related to the

plant design, while the early site permit process resolves safety and environmental

issues related to a potential site. The issues resolved in these two parts can then

be referenced in an application which would lead to a combined construction permit

and operating license, referred to as a combined license. This license contains inspections, tests, analyses, and acceptance criteria that must be attained before the

facility can commence operation.

As you know, the NRC has already certified three new reactor designs. These designs include General Electric’s Advanced Boiling Water Reactor and Westinghouse’s AP600 and System 80+ designs. In addition to the three advanced reactor

designs already certified, there are new nuclear power plant technologies which

some believe can provide enhanced safety, improved efficiency, and lower costs. The

NRC staff is currently reviewing the Westinghouse AP1000 design certification application. The staff has met all scheduled milestones for the AP1000 design review

and is on track to issue its recommendations to the Commission this fall on whether

the final design should be certified. This recommendation would be followed by the

design certification rule in 2005. The NRC staff is also actively reviewing pre-application issues on two additional designs and has four other designs in various stages

of pre-application review.

In September and October of last year, we received three early site permit applications for sites in Virginia, Illinois, and Mississippi where operating reactors already exist. The staff has established schedules to complete the safety reviews and

environmental impact statements in approximately 2 years. The mandatory adjudicatory hearings associated with the early site permits will be concluded after completion of the NRC staff’s technical review. As with design certification rulemaking,

issues resolved in the early site permit proceedings will not be revisited during a

combined license proceeding absent new and compelling information.

53

SECURITY

During the past year, the Commission has continued to enhance security of licensed nuclear facilities and materials through close communication and coordination with other agencies in the intelligence and law enforcement communities and

with the Department of Homeland Security. For commercial nuclear power reactors,

we issued Orders in April 2003 to impose a revised design basis threat (DBT) and

enhanced requirements for security officer work hour limits (to ensure officers remained fit for duty) and standards for their training and qualification. With these

requirements, we have established an enhanced set of security requirements for

power reactors that is appropriate in the post-9/11 threat environment. The workhour limits and the previously imposed access authorization enhancements have

been fully implemented. Revisions to site security plans (including training and

qualification) and site modifications to provide protection against the revised DBT

have been submitted to the NRC for review and implementation. The review is in

progress with full implementation scheduled for October 2004. We have redefined

our baseline inspection program for security and are phasing in the new inspection

program consistent with the new requirements. As a complement to licensee security measures, NRC is working with the Department of Homeland Security and the

Homeland Security Council, and other partners to enhance the integrated Federal,

State, and local response to threats.

We continue to conduct force-on-force exercises to evaluate licensees’ defensive capabilities and identify areas for improvement. During 2003, we implemented a pilot

force-on-force exercise program and conducted exercises at 15 power plants to evaluate the significance and impact of enhanced adversary characteristics and associated

compensatory measures and to develop program improvements to enhance the realism and effectiveness of the exercises. In 2004, we are conducting exercises roughly

twice a month to evaluate the effectiveness of program enhancements including the

use of Multiple Integrated Laser Enhancement System (MILES) equipment, adversary force standards, improved controller training, and other enhancements to improve the realism of the exercises while maintaining safety of both the plant and

personnel. In November of this year, we will begin full implementation of the triennial force-on-force exercise program for power reactors.

In the area of materials security, we have coordinated closely with State agencies

and affected licensee groups to develop additional security requirements for two

classes of materials licensees who possess high-risk radioactive materials (irradiator

licensees and manufacturers and distributors of radioactive materials). We are preparing proposed Orders for other materials users. We are developing enhanced import and export controls for high-risk sources. In addition, we have developed an interim data base for high-risk sources and, with the assistance of other Federal agencies as well as the States, we are laying the foundations for the national source

tracking system. We are also engaged with other Federal agencies to increase security involving transportation of large quantities of radioactive materials and are conducting a comprehensive review of material control and accounting requirements

and practices.

The NRC has completed most of its work on vulnerability assessments and identification of mitigation strategies for a broad range of threats to NRC-licensed activities involving radioactive materials and nuclear facilities. Thus far, the results of

these studies have validated the actions NRC has taken to enhance security. These

efforts have continued to affirm the robustness of these facilities, the effectiveness

of redundant systems and defense-in-depth design principles, and the value of effective programs for operator training and emergency preparedness. Our vulnerability

studies confirm that the likelihood of damaging the reactor core and releasing radioactivity that could affect public health and safety is low. Further, the studies confirm that even in the unlikely event of a radiological release due to terrorist use

of a large aircraft, NRC’s emergency planning basis remains valid. The aircraft vulnerability studies also indicate that significant damage to a spent fuel pool is improbable, that it is highly unlikely that the impact on a dry spent fuel storage cask

would cause a significant release of radioactivity, and that the impact of a large aircraft on a transportation cask would not result in a release of radioactive material.

Thus, we believe that nuclear power plant safety, security, and emergency planning

programs continue to provide reasonable assurance of adequate protection of the

public health and safety.

In summary, NRC licensees had robust private sector security programs long before the attacks of September 11, 2001, and those programs have been further enhanced over the past 30 months. We continue to ensure that our licensees implement effective security programs for the current threat environment. In addition, we

continue to work closely with our Federal, State, and local partners and with the

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private sector to ensure an appropriate integrated response to threats to licensed

nuclear facilities and materials.

EMERGENCY PREPAREDNESS PROGRAM

The events of September 11, 2001, highlighted the need to examine the way the

NRC is organized to carry out its safeguards, security, and incident response functions. Consequently, the NRC has taken several actions in response to the new environment, including the issuance of compensatory measures and Orders to licensees,

re-examination of the emergency planning basis, creation of the Office of Nuclear

Security and Incident Response, and evaluation of reactor integrity to new threats.

In addition, the NRC as well as our stakeholders have become increasingly aware

of the importance of emergency preparedness to mitigating the effects of potential

security threats. Along with this increased awareness, the NRC recognizes the need

for increased communication of our emergency preparedness activities with internal

and external stakeholders, including the public; industry; the international nuclear

community; and Federal, state, and local government agencies. As a result, the NRC

established the Nuclear Emergency Preparedness Project Office. The Project Office

is responsible for the continuing development and refinement of emergency preparedness policies, regulations, programs, and guidelines for both currently licensed

nuclear reactors and potential new nuclear reactors. The Project Office provides

technical expertise regarding emergency preparedness issues to other NRC offices

and also coordinates and manages emergency preparedness communications with internal and external stakeholders including the public, industry, the international

nuclear community, and Federal, State, and local government agencies.

MATERIALS PROGRAM

The NRC, in partnership with the 33 Agreement States, conducts a comprehensive program to ensure the safe use of radiological materials in a variety of medical

and industrial settings. As some of NRC’s responsibilities, including inspection and

licensing actions, have been assumed by Agreement States, our success depends in

part on their success, and we closely coordinate our activities with the States.

Recently, the Commission has completed a complex rulemaking on the medical

uses of byproduct material—a rulemaking in which there was significant interaction

with Congress. We are now implementing that rule and assuring that compatible

regulations are adopted by the Agreement States.

The NRC is developing a web-based materials licensing system. The system is expected to provide a secure method for licensees to request licensing actions and to

view the status of licensing actions on the Web. In addition, the NRC, with assistance from other Federal agencies and the States, is creating a National Source

Tracking System that will be used to monitor radioactive sources in quantities of

concern with respect to a radiological dispersal device (RDD) threat. The development of the National Source Tracking System will remain a high priority effort.

The Commission has also implemented a major rule change related to large fuel

cycle facilities. This rule requires licensees and applicants to perform an integrated

safety analysis that applies risk-based insights to the regulation of their facilities.

Major licensing reviews currently underway, or soon to be submitted, will test the

new rule. These licensing reviews include two new gas centrifuge enrichment facilities.

The first proposed enrichment facility would be located in New Mexico and the

second in Ohio. Louisiana Energy Services submitted an application for its facility

in Eunice, New Mexico, to the NRC in December 2003. U.S. Enrichment Corporation

is expected to submit its application to the NRC for its site in Piketon, Ohio, in August 2004. The Commission has directed its staff to conduct reviews of the applications for the two proposed enrichment facilities in a timely manner. The Commission will endeavor to identify efficiencies and provide the necessary resources to reduce the time the agency needs to complete these reviews.

The staff is currently reviewing a request to authorize construction of a mixed

oxide (MOX) fuel fabrication facility at the Savannah River site in South Carolina

as part of the Department of Energy’s program to dispose of excess weapons grade

plutonium. The staff is also providing support to its Russian counterparts regarding

the licensing of a Russian MOX facility that will have a design similar to the U.S.

facility.

In addition to the new facilities discussed above, the NRC regulates several other

existing fuel facilities. NRC’s oversight of these facilities includes licensing actions,

inspection, enforcement, and assessment of licensee performance. Our Fuel Facilities Licensing and Inspection program was the second of our regulatory programs

assessed under the Office of Management and Budget’s Performance Assessment

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Rating Tool (PART) and awarded the top rating, ‘‘effective,’’ a rating achieved by

only 11 percent of the Federal programs evaluated.

NUCLEAR WASTE PROGRAM

The NRC staff has made progress on a wide array of programs relating to the

safe disposal of nuclear waste. A central focus of these programs is to ensure that

the agency is prepared to review an application by the Department of Energy to construct a high-level radioactive waste repository at Yucca Mountain, Nevada.

Progress has been made in our pre-application interactions with DOE in addressing

technical issues that are significant to repository performance. The application is expected to be submitted to NRC in December 2004. The NRC would make a docketing decision on the license application, and, if docketed, review the license application and make a determination regarding to what extent the Yucca Mountain Final

Environmental Impact Statement can be adopted.

We are also preparing to conduct a related licensing proceeding. Our preparations

include the creation of an information technology system to handle the large number

of complex documents that will be involved and the leasing of a hearing facility near

Las Vegas, Nevada. This licensing proceeding will present the NRC with a formidable challenge and the technical issues involved will be substantial. Moreover, no

single NRC decision or set of decisions, since the Three Mile Island accident, is likely to be scrutinized as closely as those concerning this one-of-a-kind facility.

In our waste program, the NRC staff also has a substantial effort underway in

the area of dry cask storage of spent reactor fuel. Storage and transport cask designs continue to be reviewed and certified. Independent Spent Fuel Storage Installations (ISFSIs) continue to be licensed and inspected. The Atomic Safety and Licensing Board currently is expected to issue its final decision on the proposed Private Fuel Storage ISFSI in Utah early in 2005. The Surry ISFSI in Virginia is the

lead facility for license renewal. Indeed, our workload related to ISFSIs and dry

cask storage in general will increase substantially in the years ahead. This projection is based on licensees’ plans to adopt dry cask storage at their sites. We are currently formulating a major research program, the Package Performance Study,

which will include a demonstration test of the robustness of NRC-certified spent fuel

transportation casks.

The NRC staff is also continuing to make significant progress in ensuring the decommissioning of contaminated sites. The staff identified several policy issues requiring Commission direction that will help expedite decommissioning under NRC’s

License Termination Rule, and the Commission has provided the necessary guidance. Complicated decommissioning sites that pose technical challenges include the

Safety Light site near Bloomsburg, Pennsylvania. We are currently working with

the Environmental Protection Agency to have this site included on the National Priority List to make other Federal resources available for the cleanup of this site.

HUMAN CAPITAL

The NRC is very dependent on a highly skilled and experienced work force for

the effective execution of its activities. The Commission’s human capital planning

integrates strategies for finding and attracting new staff, and for promoting employee development, succession planning, and retention. The Commission has developed and implemented a strategic work force planning system to identify and monitor its human capital assets and needs and to address critical skills shortages. This

includes the use of an agency-wide online skills and competency system to identify

gaps in needed skills; the ongoing review of NRC’s organizational structure to align

with its mission and goals; and the development of a web-based staffing system that

includes online application, rating, ranking, and referral features. The agency has

also implemented two leadership competency development programs to select highperforming individuals and train them for future mid-level and senior-level leadership positions. In addition, the agency has continued to support its fellowship and

scholarship programs and identified a significant number of diverse, highly qualified

entry-level candidates through participation in recruitment events and career fairs.

NRC is utilizing a variety of recruitment and retention incentives to remain competitive with the private sector. So far we have been successful in attracting and

retaining new staff, particularly at entry levels. Nonetheless, it is likely to become

more difficult for NRC to hire and retain personnel with the knowledge, skills, and

abilities to conduct the safety reviews, licensing, research, and oversight actions

that are essential to our safety mission. Moreover, the number of individuals with

the technical skills critical to the achievement of the Commission’s safety mission

is rapidly declining in the Nation, and the educational system is not replacing them.

The maintenance of technically competent staff will continue to challenge governVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00061 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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mental, academic, and industry entities associated with nuclear technology for some

time to come.

BUDGET

The NRC has proposed a Fiscal Year 2005 budget of $670.3 million. In developing

the budget, the Commission has ensured that we continue only those programs that

are effective in meeting our mission and goals. Even with our efforts to be more efficient in our utilization of resources, we must still request a Fiscal Year 2005 budget

increase of approximately 7 percent ($44 million) over the Fiscal Year 2004 budget

for essential activities. This budget proposal will allow the NRC to continue to protect the public health and safety, promote the common defense and security, and

protect the environment, while providing sufficient resources to address increasing

personnel costs and new work. Approximately 32 percent ($14 million) of the budget

growth is for personnel costs, primarily the pay raise that the President has authorized for Federal employees. The remaining increase supports our High-Level Waste

and Nuclear Reactor Safety programs. We are requesting an increase of approximately $30 million for our High-Level Waste program to initiate the review of the

anticipated DOE application to construct a high-level waste repository at Yucca

Mountain and to conduct a Package Performance Study, which will confirm that our

regulations provide for the safe transportation of spent nuclear fuel even under accident scenarios. We are also requesting an increase of approximately $10 million for

our Nuclear Reactor Safety programs primarily to keep pace with industry interest

in new reactor initiatives and to strengthen our reactor inspection and performance

assessment activities. These increases are offset by a decrease of approximately $10

million in our Homeland Security programs for completed homeland security activities.

LEGISLATIVE NEEDS

Over the years, the NRC has repeatedly expressed its support of enactment of legislation needed to strengthen the security of facilities regulated by the Commission.

Although we did not support all the provisions contained in bills that addressed nuclear security in the first session of this Congress, we were encouraged by Congressional action on the subject. Although, the Commission has used existing authority

to ensure robust security for nuclear power plants and high risk radioactive materials, provisions that the Commission supports would provide the statutory authority for steps that we believe should be taken to further enhance the protection of

the country’s nuclear infrastructure and prevent malevolent use of radioactive material. In particular, the Commission supports enactment of the nuclear security-related provisions contained in H.R. 6, as approved by the conferees on that bill in

the last session of this Congress, and S. 2095, which has been introduced in this

session.

The proposals that the Commission believes to be most important are: (1) authorization of security officers at NRC-regulated facilities and activities to receive, possess, and, in appropriate circumstances, use more powerful weapons against terrorist attacks, (2) enlargement of the classes of NRC-regulated entities and activities

whose employees are subject to fingerprinting and criminal history background

checks, (3) Federal criminalization of unauthorized introduction of dangerous weapons into nuclear facilities, (4) Federal criminalization of sabotage of additional classes of nuclear facilities, fuel, and material, (5) authorization for NRC to carry out

a training and fellowship program to address shortages of individuals with critical

nuclear regulatory skills, and (6) extension of NRC’s regulatory oversight to discrete

sources of accelerator-produced radioactive material and radium–226. All but the

last of these are included in H.R. 6 and S. 2095.

In addition, enactment of the following proposals would enhance the NRC’s ability

to protect the public health and safety:

(1) long-term extension of the Price-Anderson Act;

(2) authorization to charge Federal agencies fees for licensing and inspections,

rather than recouping the costs of these activities through charges to other licensees;

(3) authorization for costs of security-related activities to be covered from the general fund (except for fingerprinting, criminal background checks, and security inspections);

(4) elimination of NRC’s antitrust review authority over new power reactor license

applications;

(5) clarification of the length of combined construction permits and operating licenses for new reactors;

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(6) allowing rehired annuitants to receive full pay from the NRC for their services

without reduction in pension payments;

(7) authorization to compensate individuals with critical skills at rates competitive

with rates paid to persons with similar skills in the private sector;

(8) modification of the organizational conflict of interest provisions in the Atomic

Energy Act to allow the agency to engage valuable expertise at a national laboratory

that also performs work for the nuclear industry; and

(9) authorization to establish and participate in science, engineering, and law

partnership outreach programs to increase the participation of Historically Black

Colleges and Universities, Hispanic Serving Institutions, and Tribes.

All but the last three proposals are included in H.R. 6 and S. 2095. We look forward to working with you on the enactment of these proposals by this Congress.

CONCLUSION

Mr. Chairman, I can assure you that the Commission will continue to be very active in managing the staff’s efforts on ensuring the adequate protection of public

health and safety, promoting common defense and security, and protecting the environment in the application of nuclear technology for civilian use.

We appreciate the opportunity to appear before you today. My colleagues and I

welcome the opportunity to respond to your questions.

RESPONSES BY NILS J. DIAS TO ADDITIONAL QUESTIONS FROM SENATOR INHOFE

Question 1. Have you considered the possibility of consolidating the employees at

the four Regions to headquarters? Since every nuclear reactor has full-time NRC

resident inspectors located at each facility, is it really necessary to have four regional offices? Please provide a breakdown as to the functions performed solely at

the Regional Offices, and those functions which are performed at both headquarters

and in the regions.

Response. The NRC reviewed regional consolidation as recently as last year. Reviews were also conducted during the 1994–1995 timeframe, which resulted in the

closure of NRC’s Region V office in California, and in 1998 and 2002. The most recent review was in response to the fiscal year 2003 Energy and Water Development

Appropriations Act, (House Report 108–10 and Senate Report 107–220), which directed the NRC to report to the Congress on regulatory efficiencies that would be

gained by consolidating or eliminating regional offices. The Commission provided a

response on June 26, 2003. The report noted that the Commission believes that in

the context of its fundamental mission, a strong regional presence is essential for

the effective implementation of the agency’s health, safety, and security programs.

Public health and safety are better served with critical NRC expertise located

close to the geographical area of our licensed activities. Whether overseeing routine

licensed activities or reacting to unforseen circumstances, a regional office can rapidly muster critical resources to a facility when a situation needs immediate attention and time is of the essence.

The regional staff have unique expertise in the area of field inspections and are

familiar with the licensee location, procedures, strengths, and weaknesses. The four

regional offices each oversee 21 to 32 operating reactors, which enables the NRC to

deploy first responders to incidents and emergencies in four different geographical

locations. Homeland security initiatives and objectives provide additional compelling

reasons for the agency’s current regional structure. All the regional offices are involved in heightened security, safeguards, and emergency preparedness activities in

light of the current threat environment.

The NRC’s regional structure aligns well with the Administration’s emphasis on

close coordination with constituents and stakeholders. Regional offices bring NRC

closer to the public it serves, giving stakeholders access to NRC officials in their

own region of the country, thereby enhancing relationships with local and state officials and increasing public confidence in the NRC.

With regard to the functions carried out by the regions and headquarters, the regional offices execute established NRC policies and assigned programs relating to

inspection, licensing, incident response, governmental liaison, resource management

and human resources. Each of the regional offices implement inspection and public

interface activities in the following nine areas: investigations, public affairs, legal

affairs, allegations/enforcement, State liaison, resource management, nuclear materials safety, reactor projects, and reactor safety. NRC headquarters develops policy

and inspection guidance for programs assigned to the regional offices and assesses

the effectiveness and uniformity of the regions’ implementation of those programs.

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The Commission does look for efficiencies in the operation of its regional offices.

For example, the Commission recently consolidated responsibility for all major fuel

cycle facilities in its Atlanta office. Additionally, in 2000 the Commission attempted

to close the NRC Technical Training Center, which is located in Chattanooga, Tennessee and move the approximately 27 personnel to our Rockville, Maryland headquarters. We had based the decision on justifiable training efficiencies to be gained

from such a move. Nevertheless, the NRC was precluded from making the change

by language included in Public Law 106–246, The Military Construction Appropriations Act.

Question 2. How is the interaction between the EPA and the NRC on the setting

of radiation standards? Now that the standards for Yucca Mountain have been set,

I think we should give serious consideration to consolidating the process at the

NRC. Is it feasible/possible for the EPA’s functions to be consolidated at the NRC?

Response. EPA derives its responsibility to set generally applicable radiation

standards from the statutory Reorganization Plan No. 3 of 1970. This plan gives

EPA authority to set generally applicable standards for the protection of the general

environment from radioactive material. As noted in the OMB Memorandum dated

December 7, 1973, known as the Ash Memorandum, EPA initially construed its responsibilities too broadly. The memorandum directed that EPA should continue setting standards for the total amount of radiation in the general environment from

all facilities combined in the uranium fuel cycle. Facility specific standards would

be set by the NRC (formerly the AEC) with EPA review and comment. Since that

time the two agencies have continued to interact to avoid overlap and duplication

regarding standards that apply to NRC regulated facilities. However, these interactions have generally been difficult and largely unsuccessful. Interface has occurred

in a number of venues, and on a variety of topics under the Atomic Energy Act.

NRC’s interactions with EPA have consistently focused upon achieving an effective

regulatory environment that protects public health and safety and minimizes duplication. NRC has worked to achieve this coordination through the Interagency Steering Committee on Radiation Standards (ISCORS), and through a Memorandum of

Understanding. Overlap in legislative mandates continues to result in differences

between the agencies.

As to EPA’s Yucca Mountain standards (the authority for which derives from the

Nuclear Waste Policy Act and the Energy Policy Act of 1992), we would note that

the U.S. Court of Appeals for the DC Circuit issued a decision on July 9, 2004, in

NEI v. EPA that vacated a part of EPA’s Yucca Mountain standards in 40 CFR Part

197 (and NRC’s identical standards in 10 CFR Part 63). Thus, at this time, we cannot say that the ‘‘standards for Yucca Mountain have been set.’’

EPA’s Yucca Mountain standard setting function aside, it would be possible, with

legislation, to transfer EPA’s radiation standard setting functions established by Reorganization Plan No. 3 of 1970 to the NRC as well as related standard setting for

accelerator-produced radioactive material and certain discrete sources not currently

covered by the Atomic Energy Act. If such a step were taken, roles and responsibilities would need to be carefully defined to clarify multiple legislative mandates from

which each agency’s authority derives. In addition, this consolidation would require

adjustment of resources.

RESPONSES BY NILS J. DIAS TO ADDITIONAL QUESTIONS FROM SENATOR JEFFORDS

Question 1. I have a question regarding record keeping related to nuclear fuel. It

is my understanding that the NRC used to have a more direct role in keeping

records on the location of nuclear fuel and waste at power plants, but that it

changed its policy in the 1980’s. Now the license holders are primarily responsible

for this task. In light of what has happened at Vermont Yankee, and with the increase in buying and selling of nuclear plants to new owners, is the NRC reconsidering taking a more active role? Would you need additional authority from Congress

to do so.

Response. In general, the NRC Material Control And Accounting (MC&A) inspection program verifies whether licensees have limited their possession and use of

Special Nuclear Material (SNM), including spent fuel, to the locations and purposes

authorized by their operating licenses. In addition, during these inspections, the

NRC determines whether licensees have implemented adequate and effective programs to account for and control the SNM in their possession. Prior to 1988, the

NRC routinely inspected MC&A programs at nuclear power plants including the location of spent fuel. This inspection process focused on fuel rod assemblies but not

individual components, such as fuel rods. However, the NRC has never had an acVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00064 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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tive or direct role in the creation or maintenance of records for the licensee. This

has always been the licensee’s responsibility.

Findings from MC&A inspections at power reactors prior to 1988 did not indicate

that there were major deficiencies in power reactor licensees’ MC&A programs. At

that time, the NRC considered there was low risk of improper storage of spent fuel

at a power reactor since physical and radiological characteristics of spent fuel made

it highly unlikely that spent fuel could be safely removed from the fuel pool without

proper equipment and procedures. Therefore, In 1988 the NRC chose to allocate inspection resources to other more risk-significant areas.

In 2001, the NRC staff conducted a re-examination of MC&A vulnerabilities as

part of the comprehensive review of the NRC’s Safeguards and Security Program

which was conducted in response to a November 2000 event at Millstone Unit 1,

in which two irradiated fuel rods were reported missing from the spent fuel pool.

The Millstone events as well as subsequent equivalent events at other facilities involved individual fuel rods which were removed from fuel assemblies and the disassembly occurred well before 1988.

As part of the lessons learned from the Millstone Unit 1 event, the NRC staff developed Temporary Instruction (TI) 2515/154, ‘‘Spent Fuel Material Control and Accounting at Nuclear Plants,’’ dated November 26, 2003, to enhance the NRC’s inspection of licensees’ MC&A programs. The TI provides specific inspection guidance

to NRC inspectors and consists of three phases. The first phase requires the NRC

resident inspector at the reactor to determine through interviews if a licensee has

ever removed irradiated fuel rods from a fuel assembly. If the answer is yes, Phase

II of the TI is then implemented. Phase II of the TI determines, through detailed

questions and review of records and physical inspection, if a licensee’s MC&A program is adequate to account for items located in the spent fuel pool. At a minimum,

Phase III of the TI will be implemented at plants where it has been determined that

a licensee’s MC&A program has potential deficiencies. Phase III is a much more detailed inspection of the MC&A program, which will be conducted by experienced

MC&A inspectors and includes verification of records and the location in the spent

fuel pool of all spent fuel rods that have been separated from their parent fuel assemblies. The NRC is developing a Bulletin which will be issued to power reactor

licensees and requests information from licensees about their MC&A programs. The

responses to this Bulletin will further inform the conduct of the Phase III inspections. A longer term decision regarding NRC inspection activities will be completed

after the results of Phase III inspections have been evaluated. No additional authority is needed to conduct inspection activities in this area.

Question 2. The discovery of missing fuel rods at Vermont Yankee resulted from

NRC inspections required of all plants as a followup to the loss of fuel at the Millstone plant. Have other plants reported missing fuel? And when will the inspection

of other plants be completed?

Response. Yes, Humboldt Bay Nuclear Power Plant has reported missing fuel rod

segments. Pacific Gas and Electric, the licensee, was unable to locate the missing

segments in most likely and accessible locations. The NRC continues to provide

oversight of key search activities and will conduct a management meeting in late

September 2004.

MC&A inspections are being conducted under Temporary Instruction 2515/154.

Phases I and II of the temporary instruction, which are inspections conducted by

the Resident Inspectors, have been completed at all plants. NRC is currently evaluating the information gathered during Phases I and II and plans to conduct additional inspections at some plants under Phase III. The temporary instruction calls

for the Phase III inspections to be completed by November 2005.

Question 3a. On May 4, 2004, the NRC responded to the Vermont Public Service

Board’s request for additional independent review at Vermont Yankee. Your letter

stated that a pilot engineering assessment would be conducted. The assessment

team will be comprised of NRC staff, state officials, and at least two independent

contractors. When will these inspections start?

Response. The inspection team was onsite at the Vermont Yankee facility during

the weeks of August 9 and 16 and is scheduled to be onsite the week of August 30.

Question 3b. On May 4, 2004, the NRC responded to the Vermont Public Service

Board’s request for additional independent review at Vermont Yankee. Your letter

stated that a pilot engineering assessment would be conducted. The assessment

team will be comprised of NRC staff, state officials, and at least two independent

contractors. Will you commit to having an independent observer in addition to the

independent contractor on the team?

Response. The Vermont Yankee team will consist of a team leader, three NRC inspectors, three contractors, and a member from the NRC nuclear safety professional

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development program. The team leader will come from our program office in headquarters and is currently responsible for the overall engineering pilot program effort. He has extensive experience leading engineering team inspections and no previous involvement or inspection experience at Vermont Yankee. The three contractors have diverse backgrounds in the electrical, mechanical, and instrumentation

areas, and have never been directly employed by Vermont Yankee or its owner,

Entergy, and have not performed contract work for Vermont Yankee or Entergy for

at least the last 2 years. The other NRC inspection team members will not have

served or participated on engineering inspections at Vermont Yankee in the past 2

years. In accordance with our Memorandum of Understanding with Vermont, there

also will be an observer from the State of Vermont who will be able to provide an

independent perspective on the inspection. There were no plans for additional observers. Additional observers who do not have unescorted access could impede the

effectiveness of the inspection effort as they would need to be continuously escorted

while onsite.

Question 4. There have been on-going allegations from nuclear advocacy groups

in New England that NRC staff ‘‘misled’’ Senator Leahy and me regarding the extent to which the NRC’s new power uprate guidelines were related to the Independent Safety Assessment conducted at Maine Yankee. These allegations have

been made to the Commission in writing.

Will you clarify this issue and provide a summary to the subcommittee of the provisions of the extended power uprate guidelines that were explicitly drawn from

Maine Yankee Independent Safety Assessment?

Response. The NRC received a letter from Mr. Ray Shadis on March 24, 2004,

regarding the NRC communications with yourself and Senator Leahy. He expressed

concerns that you were misinformed about the nature and the evolution of the

NRC’s newly adopted Review Standard for extended power uprates (EPUs) and the

scope of the EPU review process.

In a letter to the NRC on February 27, 2004, you accurately stated that the NRC

Review Standard for EPUs incorporates lessons learned from an independent assessment conducted at Maine Yankee. On March 29, 2004, the NRC responded to

your letter and further reiterated that the Maine Yankee lessons learned was one

input, along with others, into the development of the Review Standard. Our letter

of March 29, 2004, provides a broader discussion of the NRC’s review process and

inspections related to the proposed power uprate.

The development of the Review Standard for EPUs included a review of past experience, a part of which was a review of various reports related to the Maine Yankee

Lessons Learned such as:

• Memorandum from the Office of the Inspector General to the Chairman and

Commissioners, ‘‘Event Inquiry—Maine Yankee Atomic Power Station (Case 96–

04S),’’ dated May 8, 1996.

• Letter to C. Frizzle, Maine Yankee Atomic Power Company, from S. Jackson,

(former) Chairman, NRC, forwarding the ‘‘Independent Safety Assessment (ISA) of

Maine Yankee Atomic Power Company,’’ dated October 7, 1996.

• Report of the Maine Yankee Lessons Learned Task Group, dated December

1996.

• Memorandum to W. Travers from S. Collins, ‘‘Status of NRR Staff Actions Resulting from the Independent Assessment of Maine Yankee Atomic Power Company,’’ dated January 11, 2001.

• Power Uprate Amendment for Surry Units 1 and 2—License Amendment Nos.

203 and 203, dated August 3, 1995.

• Power Uprate Amendment for Fermi 2—License Amendment No. 87, dated September 9, 1992.

The Maine Yankee Lessons Learned Task Group had identified ‘‘Review Areas

Not Addressed’’ by comparing twenty-two previous power uprate safety evaluations

to the most recent pressurized-water reactor and boiling-water reactor safety evaluations (i.e., for Surry Units 1 and 2 and Fermi 2) and noting inconsistencies in

the review scope. These areas were: human factors, station blackout, standby liquid

control system, reactor vessel/internal stresses, control rod drive mechanisms, steam

generator tube integrity, reactor coolant pumps, pressurizer, piping, equipment

qualification, fire protection, control room habitability, loss-of-coolant accident

(LOCA)/main steam line break containment performance, safety-related pumps net

positive suction head, post-LOCA combustible gas control, service water, component

cooling water, spent fuel pool cooling, heating ventilation air conditioning, radwaste,

circulating water system, main steam, main turbine, instrumentation and control

setpoints, reactor coolant system flow, auxiliary feedwater, residual heat removal,

and general design criteria (GDC)–17 electric power systems.

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In the Review Standard for EPUs, the staff included the ‘‘Review Areas Not Addressed’’ identified by the Maine Yankee Lessons Learned Task Group, along with

information developed from other past experience reviews. The staff also reviewed

the Maine Yankee Lessons Learned Task Group recommendations for improving the

overall power uprate review process and this information was used in the development of the process guidance portion of the Review Standard for EPUs.

Specific to the issue of what experience from the Maine Yankee Independent Safety Assessment was incorporated into the EPU review guidance, the letter to C. Frizzle, Maine Yankee Atomic Power Company, from S. Jackson, (former) Chairman,

NRC, forwarding the ‘‘Independent Safety Assessment of Maine Yankee Atomic

Power Company,’’ dated October 7, 1996, contained five issues in Section 6.0, ‘‘Regulatory Issues.’’ These areas were: (1) analytical code validation, (2) compliance with

Safety Evaluation Reports, (3) Licensing Reviews for Power Uprates, (4) Regulatory

Guide 1.1, ‘‘Net positive Suction Head for Emergency Core Cooling and Containment

Heat Removal System Pumps (Safety Guide 1),’’ and (5) Inspection Program.

The staff broke these issues into 33 actions in the following action categories: (1)

Adequacy of Analytical Code Validation, (2) Adequacy of NRC Review of Analysis

Codes, (3) Compliance with Safety Evaluation Reports, (4) Adequacy of Licensing

Reviews for Power Uprates, (5) Clarity and Intent of NRC Regulatory Guide 1.1

(Safety Guide 1), (6) Adequacy of the NRC Inspection Program, (7) Agency Expectations regarding Licensee Performance, (8) Cumulative Effect of Operator

Workarounds, (9) Agency Policy regarding Licensee Design Basis Recovery Efforts,

(10) Public Involvement in the Assessment Process, and (11) Licensee Response to

the ISA Report.

The staff has completed 30 of the 33 actions. Three actions are on-going. These

three actions are related to adequacy of analytical code validation. The staff’s interim action is the issuance of the Draft Regulatory Guide DG–1096, ‘‘Transient and

Accident Analysis Methods,’’ and Draft Standard Review Plan (SRP) 15.0.2, ‘‘Review

of Analytical Computer Codes.’’ The staff is resolving the public comments for these

documents. The staff’s actions will be complete when the final Regulatory Guide and

SRP are issued. However, the staff placed guidance in the Review Standard for

EPUs (RS–001) for the staff to confirm that licensees used codes and methods approved for the plant-specific application and the licensee’s use of the codes and

methods complies with any limitations, restrictions, and conditions specified in the

approving safety evaluation.

Question 5a. Constituents have raised concerns with me regarding the process for

requesting a public hearing on the Vermont Yankee power uprate. I request that

you clarify two issues:

First, my constituents believe that the time in which they need to request a hearing begins when the notice of the application appears on the Commission’s web site

rather than in the Federal Register. Isn’t the Federal Register notice, when one is

submitted, the official start of the clock for hearing requests? Will that be the case

for Vermont Yankee?

Response. The publication date of the Federal Register notice on the Vermont

Yankee power uprate amendment begins the period for requesting a hearing. A notice of opportunity to request a hearing for the Vermont Yankee power uprate was

published in the Federal Register on July 1, 2004 (69 FR 39976), with a 60 day period for hearing requests.

Question 5b. Constituents have raised concerns with me regarding the process for

requesting a public hearing on the Vermont Yankee power uprate. I request that

you clarify two issues:

Second, my constituents are concerned about both the evidentiary and standing

requirements contained in the new NRC hearing regulations. In response to a request for a hearing, does the NRC have the discretion to decide whether or not to

use its current or former regulations to govern the hearing process?

Response. The Commission does have considerable discretion to modify by order,

in individual cases, the adjudicatory procedures to be applied in a particular proceeding. However, the new 10 CFR Part 2 rule (69 FR 2182, January 14, 2004), applies (by its terms) to proceedings noticed after February 13, 2004, which includes

the Vermont Yankee power uprate proceeding. The new Part 2 is the product of a

long and comprehensive rulemaking effort concerning the rules of practice. It does

not change the evidentiary or standing requirements that were in the old Part 2.

The new Part 2 does include new requirements regarding the submission of admissible contentions in informal proceedings, but these contention requirements are essentially the same as the contention requirements that applied under the old Part

2 proceedings involving power reactor license amendment requests. The new Part

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2 requires that contentions be submitted as part of the petition to intervene/request

for hearing.

Question 6a. On May 18, 2004, Senator Inhofe and I received a letter from you

regarding the Commission’s views on nuclear waste that is incidental to reprocessing at Department of Defense facilities. (NOTE: The NRC letter was in reference

to DOE facilities, not DOD facilities). I noted with some dismay that while the

Vermont Public Service Board waited 7 weeks for a reply to its questions regarding

the proposed power uprate at Vermont Yankee, this response was obtained the same

day questions were submitted to the NRC. I have a few questions regarding this

letter, and I have written to you regarding this matter.

In the letter you write that the NRC ‘‘does not have regulatory authority or jurisdiction’’ over the Savannah River, Hanford, or Idaho facilities. Isn’t that because the

high-level waste storage tanks at these locations were authorized only for shortterm, temporary storage, and not for permanent disposal?

Response. Section 202(4) of the Energy Reorganization Act of 1974 gives NRC licensing and related regulatory authority over DOE facilities ‘‘authorized for the express purpose of subsequent long-term storage of high-level radioactive waste generated by [DOE], which are not used for, or are part of, research and development

activities.’’ There are three important elements in this jurisdictional grant: (1) Congress must have expressly authorized the facility for its purpose; (2) that purpose

must be long-term storage; and (3) the radioactive wastes to be stored must be highlevel radioactive waste (HLW). All three elements must be present for NRC’s jurisdiction to attach to a particular DOE facility. NRC currently does not have regulatory authority over the Savannah River Site (SRS), Hanford, and Idaho National

Engineering and Environmental Laboratory (INEEL) radioactive waste storage

tanks because Congress has not expressly authorized use of these tanks for the purpose of long-term storage of DOE’s HLW. NRC’s view that it does not have regulatory authority over the DOE radioactive waste storage tanks has been upheld by

the courts. See Natural Resources Defense Council v. NRC, 606 F.2d 1261, 1266–

1268 (D.C. Cir. 1979).

Question 6b. On May 18, 2004, Senator Inhofe and I received a letter from you

regarding the Commission’s views on nuclear waste that is incidental to reprocessing at Department of Defense facilities. (NOTE: The NRC letter was in reference

to DOE facilities, not DOD facilities). I noted with some dismay that while the

Vermont Public Service Board waited 7 weeks for a reply to its questions regarding

the proposed power uprate at Vermont Yankee, this response was obtained the same

day questions were submitted to the NRC. I have a few questions regarding this

letter, and I have written to you regarding this matter.

Isn’t it the case that under Section 202 of the Energy Reorganization Act, the

NRC has regulatory authority and jurisdiction over any ‘‘facilities authorized for the

express purpose of . . . long-term storage of high-level radioactive waste generated

by’’ the Department of Energy?

Response. Yes. As stated above, under Section 202(4) of the Energy Reorganization Act of 1974, NRC has regulatory authority and jurisdiction over any facilities

authorized for the express purpose of subsequent long-term storage of HLW generated by DOE, which are not used for, or are part of, research and development

activities.

Question 6c. On May 18, 2004, Senator Inhofe and I received a letter from you

regarding the Commission’s views on nuclear waste that is incidental to reprocessing at Department of Defense facilities. (NOTE: The NRC letter was in reference

to DOE facilities, not DOD facilities). I noted with some dismay that while the

Vermont Public Service Board waited 7 weeks for a reply to its questions regarding

the proposed power uprate at Vermont Yankee, this response was obtained the same

day questions were submitted to the NRC. I have a few questions regarding this

letter, and I have written to you regarding this matter.

Wouldn’t legislation allowing DOE to say that high-level waste isn’t high-level

anymore circumvent the NRC’s responsibility for licensing and regulating the facility in which permanent disposal is to take place? Have you actually reviewed and

taken a position on Section 3116 of the DOD Authorization bill that is presently on

the Senate floor?

Response. Legislation allowing DOE to exclude radioactive material meeting certain criteria from the definition of HLW would not necessarily affect the scope of

NRC’s jurisdiction under the Energy Reorganization Act of 1974. NRC does not currently have jurisdiction nor responsibility for licensing and regulating the radioactive waste storage tanks at SRS, Hanford and INEEL because Congress has not

expressly authorized use of these tanks for the purpose of long-term storage of

DOE’s HLW. Unless Congress expressly authorizes use of the tanks for disposal of

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DOE’s HLW, NRC would not have jurisdiction irrespective of whether the waste remaining in the tanks is considered to be HLW or waste-incidental-to-reprocessing

(WIR). NRC has expressed its general views on WIR in the Commission’s letter of

May 18, 2004 to you and Senator Inhofe. NRC also responded to your June 2, 2004,

letter regarding NRC’s jurisdiction over HLW tanks at SRS and possible effects of

the proposed Section 3116 in a letter to you dated July 15, 2004.

RESPONSES BY NILS J. DIAS TO ADDITIONAL QUESTIONS FROM SENATOR VOINOVICH

Question 1. GAO claims that the recommendations are being implemented slowly

because of resource constraints at the NRC. What are some of these constraints and

what needs to be done to address them?

Response. After the Davis-Besse Lessons Learned Task Force (task force) published its final report in October 2002, the NRC convened a Senior Management Review Team to prioritize the task force’s recommendations as high, medium, and low

priority and provide guidance on an overall plan to implement the recommendations. An overall plan to put the recommendations in place was provided to the

Commission in March 2003. In this plan, four specific action plans were developed

to address the high-priority recommendations in the following areas: (1) stress corrosion cracking; (2) operating experience; (3) inspection, assessment, and project management; and (4) barrier integrity requirements. Two medium-priority and 3 lowpriority items were included in the action plans because they were closely tied to

high-priority items. Resource implications of these action plans were specifically provided in the overall plan, and agency resources were reallocated to carry out the

high-priority recommendations effectively. In subsequent reviews as work progressed, additional resources have been allocated.

The overall plan called for implementation of the medium and low-priority recommendations that were not captured by the action plans in accordance with the

NRC’s Planning, Budgeting, and Performance Management (PBPM) process. The

PBPM process is an established process which prioritizes work in accordance with

safety benefits. All of the medium and low priority recommendations were reviewed

through the PBPM process prior to the first semiannual report (August 2003). Implementation schedules and resource allocation were established commensurate

with the perceived safety benefit relative to other NRC activities. These schedules

have been periodically revised in accordance with the PBPM process, but are being

tracked to completion. Status information is reviewed semi-annually by the Commission. The Commission believes that resources have been appropriately allocated to

this program. See the answer to question No. 2 for status of task force recommendations.

The NRC is committed to the effective implementation of the task force’s recommendations. In addition to completing the implementation of recommended actions, the NRC will complete effectiveness reviews to ensure implementation meets

the intended purposes and to ensure that certain changes are ‘‘institutionalized.’’

Question 2. What progress are you making in implementing the Davis-Besse lessons-learned task force (DBLLTF) recommendations?

Response. There were 49 DBLLTF recommendations that were recommended for

implementation after the senior management review. The 21 high-priority, 2 medium priority, and 3 low priority recommendations were captured in four action

plans and the remaining 23 recommendations (14 medium-priority and 9 low-priority) were to be completed in accordance with priorities established through the

PBPM process, as described in the answer to question No. 1. The status of implementation is reviewed frequently and schedules are adjusted as needed to reflect

new information or conditions.

Since my testimony on May 20, 2004, some additional items have been completed

and the schedules for others have been changed. The status of the 49 recommendations as of August 19, 2004, is as follows:

• Sixteen were completed in 2003. This included all 7 high-priority items scheduled for completion during 2003, plus 9 lower priority recommendations. Seven

lower priority items were rescheduled.

• Eight additional items (4 high-priority and 4 lower priority) have been completed to date in 2004.

• Fifteen additional items (3 high-priority, 10 medium-priority, and 2 low-priority)

are planned for completion by December 2004.

• Six additional items (5 high-priority and 1 low-priority) are planned for completion by May 2005.

• The remaining 4 items (2 high-priority, 1 medium-priority, and 1 low-priority)

do not have a current completion schedule, primarily because the scope of work deVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00069 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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pends on the outcome of other recommendations, actions by industry, or completion

of research activities. However, work on these items should be substantially complete in 2005.

In summary, as of June 30, 2004, 11 of the 21 high-priority recommendations and

13 of the lower priority items have been completed and work is in progress on the

remaining items. In fact, seventy percent of all the recommendations will be in place

by the end of calendar year 2004, with the expectation that all will be substantially

complete in 2005. The activities that will extend beyond 2005 include rulemaking

activities for Reactor Vessel Head inspection, which are expected to be completed

in 2006, and other potential regulatory requirement revisions regarding Reactor

Coolant System leakage, which will be identified in 2005 following review of a research report on leakage detection and monitoring technologies.

Question 3. GAO claims that several of the issues that led NRC to not prevent

the Davis-Besse incident were identified in past GAO reports, Commission lessonslearned task force recommendations, and Inspector General reports. The GAO also

states that the NRC is reviewing ‘‘the effectiveness of its response to past NRC lessons-learned task force reports.’’ What is the progress of the review you are performing on your effectiveness to fully implement past recommendations?

Response. The charter of the Davis-Besse lessons learned task force included a direction to look back at previous task force reports to determine whether they suggested any recurring or similar problems. The task force’s review uncovered potentially recurring programmatic issues and these issues were discussed in Appendix

F of the task force report. As a result of this effort, one of the task force’s recommendations was to conduct a more detailed effectiveness review of the actions

taken in response to past lessons-learned reviews. This recommended action has

been completed. The results of the review are being considered by NRC senior management and the Commission to identify and take corrective actions, as necessary.

Question 4. How are you addressing NRC’s major communication failures that

GAO identified as playing a significant role in the Davis-Besse incident?

Response. The NRC recognize that communications failures were an underlying

cause for issues discovered at Davis-Besse (DB). The corrective actions outlined in

the lessons-learned task force (LLTF) action plans address communications beyond

the topic of boric acid corrosion control. For example, corrective actions in the area

of operating experience development and use are focused on enhancing communications. The recommendations to strengthen inspection guidance, institute training to

reinforce a questioning attitude on the part of management and staff, and change

the Inspection Manual to provide guidance for the staff to pursue issues identified

during plant status reviews are intended to establish more definitive expectations

for improved communications of operating experience. Developing the most effective

and efficient communications channels will be key to the successful implementation

of a more effective operating experience program.

Beyond the DBLLTF Action Plan, the agency has several ongoing initiatives that

provide examples of efforts to more broadly improve intra-agency communications.

These examples include establishment of a Communication Council reporting to the

Executive Director for Operations and the creation of a communications specialist

position reporting to the Office of Nuclear Reactor Regulation (NRR) Deputy Director. NRR also continues to improve and enhance its Web site as a focused means

of communicating with both internal and external stakeholders. From a regional

perspective, examples of communication enhancements include lowering the threshold for communication of plant issues on morning status calls, devoting additional

time to discussing lessons learned from plant events and inspection findings during

counterpart meetings, and developing enhanced guidance for documenting significant operational event followup decisions. In another example, NRC has recently revised guidance for NRC project managers for operating reactor sites to enhance the

expectation for communication with NRC resident inspectors at the sites with regard to linkage between licensing actions and relevant operating experience at the

sites. Collectively, these examples provide a strong indication that NRC headquarters and regional staff have understood and sought to address two of the most

important lessons from the Davis-Besse event. These two issues are (1) that on occasion, information initially considered to have low significance by the first NRC recipient is later found to be of greater significance once the information is shared and

evaluated more collegially; and (2) with regard to the complex nature of commercial

nuclear power operations, no one person can be aware of all aspects of an issue. As

a result, the more information that is shared, the more likely significant problems

will be identified and appropriate action(s) taken.

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Question 5. What is NRC’s human capital situation? What are the top things Congress can do to support NRC’s human capital development?

Response. Although NRC continues to make progress in acquiring, developing, deploying and retaining the human capital critical to the accomplishment of its safety,

security, and emergency preparedness mission, the agency continues to be challenged by aging work force issues and by new work requiring hard-to-find skills.

The agency’s systematic strategic work force planning system is identifying potential skill gaps and the agency is devoting resources to address them. The following

additional authorities would greatly help the agency meet these challenges quickly

and successfully:

• Provide the agency $5M ($1M in fiscal year 2004 through fiscal year 2008) for

training to address knowledge transfer and close critical nuclear safety/security/

emergency preparedness skills gaps through employee training, and to fund the

grant programs described below.

• Allow the agency to establish a fellowship program at institutions of higher

learning to pay the tuition of undergraduate students in disciplines of interest to

NRC in return for an obligation for the individual to accept employment with the

NRC upon graduation. These programs support the development of a supply of graduates with technical skills needed for NRC’s future work force.

• Allow the agency to establish a partnership program with historically black colleges and universities, Hispanic serving institutions and tribal colleges. Such a program would broaden the recruiting base from which NRC draws new employees.

• Broaden the authority under Section 31a. and b. of the AEA to provide grants,

loans, cooperative agreements, contracts, and equipment to academic institutions in

support of courses, studies, training, curriculum, and disciplines important to nuclear safety. The agency would use this authority to support academic research and

analysis in disciplines important to nuclear safety. This activity fosters the maintenance of centers of excellence at universities in fields of interest to the NRC. Enhancing such excellence at academic institutions generates a pool of expert faculty

members on whom NRC might draw for consultant, advisory board, or administrative judge assignments.

• Provide the agency independent authority to waive the pension offset when hiring retired Federal employees. The agency already has limited authority from OPM

to waive the pension offset, but it is time-limited, expiring in fiscal year 2006, and

it applies only to engineers and scientists. It does not cover intelligence analysts,

security specialists, or others whose knowledge and skill may be critical to the agency and who would decline re-employment absent the waiver. More flexible authority

to waive the pension offset would, for example, enable the agency to deal with emergency needs and accomplish knowledge transfer in critical skill areas.

• Provide the agency direct-hire authority where expedited action to meet critical

needs is required, for example, in engineering and scientific areas, intelligence analysis, and security to work on high priority safety, security, and emergency preparedness projects, and authority to compensate experts in these areas at higher pay

rates. Under very restrictive circumstances, some direct-hire authority may be obtained from OPM, but we believe that independent NRC legislative authority would

permit the agency to develop a direct-hire program that best meets its needs. Independent NRC legislative authority to pay salaries and/or additional compensation at

a higher rate than the current EX-III cap, $145,600 (e.g., up to the Vice President’s

salary) would enable the agency to hire critically needed experts for whom the current salary range is inadequate. This would be similar to DOD’s unique legislative

authority which permits higher salaries to experts, or to NASA’s, which permits

higher compensation for critical positions.

Question 6. What is required of onsite inspectors in terms of their daily responsibilities? What are their weekly hours, salary, other benefits, etc.? How much do

the inspectors move around the country? How are they recruited and what are the

basic qualifications? How are they trained?

Response. NRC resident inspectors perform a basic mission in determining whether a licensee operates the plant safely and meets current regulatory requirements

and commitments, including in the area of security. Their main focus is on performing in-depth evaluations of materials, systems, incidents, and abnormal conditions. Resident inspectors assist in determining the safety significance of events and

findings, recommend enforcement action, and prepare reports of findings and licensee performance. More recently, resident inspectors have taken on an increasing

role in security. All resident offices now have secure telephone and fax capability.

Additionally, resident inspectors represent the NRC to the licensee, state and local

officials, and the news media. Resident inspectors attend daily plant status meetings and review plant status reports. Major daily activities include control room and

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plant area walkdowns. They also communicate with regional offices on a daily basis

to discuss plant status. Reactor resident inspectors are required to relocate from

their site no later than at the end of a 7-year assignment. Very rarely are exceptions

granted beyond the 7-year maximum tour length. Inspectors also relocate for promotions, voluntary reassignments, or at management’s discretion. It is common for

resident inspectors to occasionally participate in inspections at other sites.

To recruit and retain qualified resident inspectors, the NRC established a special

salary schedule in 1981 for inspectors at nuclear power plants. The special salary

schedule provides a 3 additional step increase. Resident inspector pay levels are in

the GG–11 ($55,904 for 2004) through GG–14 ($104,071 for 2004) pay range. In addition to this special salary schedule, inspectors receive locality pay. Inspectors typically work 40 hours a week, some of which may be on weekends or backshifts. The

inspector policy regarding backshift coverage is described in NRC Inspection Manual Chapter, IMC 2515, ‘‘Light-water Reactor Inspection Program Operations

Phase.’’ The inspectors are compensated with premium pay for backshift coverages.

Additionally, inspectors are offered the same benefits that most other Federal employees are offered, including leave, health benefits, life insurance, retirement benefits, and paid moving expenses.

Resident inspectors are mostly recruited from within the agency, usually from the

inspection staff at the regional offices. The goal is to have inspectors who are technically proficient and well-versed in NRC policy, structure, and procedures. In rare

cases, a position is advertised outside the agency and any candidate would have to

have substantial relevant experience and undertake extensive training and qualification before being qualified as an inspector. The basic qualification for inspectors

typically include a bachelor’s degree in an engineering, scientific, or technical field.

Areas of study include electrical engineering, mechanical engineering, nuclear engineering, fire protection, metallurgy, and health physics. In many cases, inspectors

have substantial relevant experience outside of the NRC, either in the nuclear industry or the Nuclear Navy.

NRC has specific guidance that governs inspector training and qualifications for

reactor inspectors. New hires are typically assigned to a regional office as an inspector trainee. The training and qualification program is designed to ensure the development of competency in the four general areas of: (1) legal basis and regulatory

processes; (2) technical expertise; (3) regulatory practices; and (4) personal and

interpersonal effectiveness. The inspector qualification process begins with the

Basic-Level Program, designed to allow individuals to begin their training the first

day they start work at the NRC. The emphasis in the Basic-Level Program is mainly on structured, self-paced and self-directed individual study and on-the-job activities. As a competency-based program, the emphasis is on practicing specific activities until the individual can meet the evaluation criteria. Therefore, completion of

the Basic-Level Training Program can take several months.

Upon completion of the Basic-Level Training Program, the inspector completes the

Proficiency-Level Training Program, which consists of two aspects of inspector performance: General Proficiency and Technical Proficiency. General Proficiency focuses

on developing the Inspection, Teamwork and Interpersonal Skills needed by an inspector to function either independently or as part of a team to implement the inspection and oversight program. Technical Proficiency develops the appropriate

depth of knowledge in one of the seven specific technical inspection areas, such as

Operations and Engineering. The final qualification activity is an oral examination

before a Board, designed to evaluate the ability of an individual to integrate and

apply the acquired knowledge, skill, and attitudes in field situations. Upon passing

the Qualification Board, the inspector is fully qualified and can be assigned the full

scope of inspection-related activities to be independently performed.

Question 7. Why specifically do you disagree with GAO’s recommendation that you

develop a set process and guidance for deciding whether to shutdown a plant?

Response. As stated in NRC’s response to the draft report entitled ‘‘Nuclear Regulation: NRC Needs to More Aggressively and Comprehensively Resolve Issues Related to the Davis-Besse Nuclear Power Plant’s Shutdown’’ (GAO–04–415) dated

May 5, 2004, we disagreed with the GAO’s finding that the NRC does not have specific guidance for deciding on plant shutdowns and with the report’s related recommendation identifying the need for NRC to develop specific guidance and a welldefined process to determine when to shut down a nuclear power plant. We believe

our regulations, guidance, and processes on plant shutdown provide sufficient guidance in the vast majority of situations. Plant technical specifications, as well as

many other NRC requirements and processes, provide a spectrum of conditions

under which plant shutdown would be required. Plants have been shut down numerous times in the past in accordance with NRC requirements, and these shutVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00072 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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downs do not require explicit actions by NRC (i.e., Orders). From time to time, however, a unique situation may present itself in which sufficient information may not

exist or the information available may not be sufficiently clear to apply existing

rules and regulations definitively. In these unique instances, the NRC’s most senior

managers, after consultation with staff experts and given all of the information

available at the time, will decide whether to require a plant shutdown. Risk information is used consistent with Regulatory Guide (RG) 1.174, ‘‘An Approach for

Using Probabilistic Risk Assessment in Risk-Informed Decisions on Plant-Specific

Changes to the Licensing Basis.’’ This process considers deterministic factors as well

as probabilistic factors (i.e., risk information) to evaluate whether a proposed plant

configuration is acceptable for operation. We regard the combined use of deterministic and probabilistic factors to be a strength of our decisionmaking process.

With respect to the recommendation to develop specific guidance for deciding

when to shut down a nuclear power plant, we acknowledge that the decisionmaking

guidance we used in the Davis-Besse situation, RG 1.174, is guidance for approving

license change requests. Although we continue to believe that the risk-informed decisionmaking process in RG 1.174 is generally applicable to a wide range of NRC

decisionmaking, we agree that it would be useful to develop additional risk-informed

guidance on how to address emergent issues.

The NRC agrees with the GAO that NRC staff lacked sufficient and appropriate

documentation of its decision on Davis-Besse. Effective communication, including

proper documentation of our decisions, will be the key to improving the accountability and credibility of our decisions in the future. This was one of the task force’s

findings and a number of recommendations were made to correct this deficiency.

The agency is committed to making sure future decisions are documented in a proper and timely manner.

Question 8. Does NRC have the tools needed to quickly license such applications

as the gas centrifuge plant that USEC has decided to build in Piketon, Ohio?

Response. The NRC has the tools and resources to conduct gas centrifuge plant

license application reviews expeditiously, if we receive our budget request from Congress. The NRC is committed to conducting such reviews in a manner that ensures

that the plant would be safe and secure and would not be detrimental to the environment. After the application for USEC Inc.’s commercial gas centrifuge plant in

Piketon, Ohio, is submitted, the NRC staff will conduct its safety, security and environmental reviews on a timeframe similar to that established for Louisiana Energy

Services’ gas centrifuge enrichment plant license application submitted in December

2003. Through identifying efficiencies in the review process and reprogramming resources, we have been able to reduce the projected time needed to complete such

reviews. In January 2004, the NRC completed its review for USEC Inc.’s license application for its gas centrifuge demonstration and test ‘‘Lead Cascade’’ facility. This

was slightly ahead of the 1-year review schedule that the NRC had projected at the

time USEC Inc. had submitted its Lead Cascade license application in February

2003.

However, as I noted in my June 2, 2004, letter to you, a continuing resolution in

fiscal year 2005 would likely delay our review of various new license applications,

including the enrichment plants in New Mexico and Ohio.

Question 9. Why specifically do you disagree with GAO’s recommendation that you

develop a methodology to assess early indications of deteriorating safety at nuclear

power plants?

Response. GAO’s specific recommendation was to develop a methodology to assess

licensees’ safety culture that includes indicators of and inspection information on

patterns of licensee performance as well as on licensees’ organization and processes.

GAO recommended that NRC should collect and analyze this data, either during the

course of the agency’s routine inspection program or during separate targeted assessments, or during both routine and targeted inspections and assessments. The

GAO maintained this would provide an early warning of deteriorating or declining

performance and future safety problems.

Some context would be helpful in addressing this question. When some of the current Commissioners started with the Commission in the 1996–97 timeframe, the

NRC staff was using a process for assessing and identifying plants with degraded

performance that involved a subjective assessment of licensee performance, the socalled ‘‘systematic assessment of licensee performance (SALP).’’ Plants were given

subjective SALP scores in four areas. Performance indicators data, while collected,

were not systematically utilized. Indeed, which inputs were most important in a

SALP assessment often varied from region to region, even from plant to plant within a region. These subjective SALP assessments then fed into a senior management

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meeting process, conducted every 6 months, the output of which was a so-called

‘‘watch list.’’

In 1997, the Commission unanimously charged the staff with replacing the SALP/

watch list process with a process that was far more uniform (in its use of performance indicators and inspection findings, more systematic, more visible to the public,

and more timely. In doing this the Commission had the benefit of an excellent

study, done in a very short time period, by a contractor, Arthur Andersen. That

study looked at significant deviations in licensee performance based on nine NRC

performance indicators, and identified plant trends going back 10 years using the

composite performance indicators. The obvious question that arose from that study

was whether the NRC staff would have made better decisions on allocating inspection resources and assessing licensee performance if they had simply used the Arthur Andersen methodology rather than the highly subjective SALP/watch list process. There is a very good discussion of the Arthur Andersen report and the NRC

staff’s and Commission’s response to that report in the transcripts (available on our

web page) of the February 18, 1997 and the April 24, 1997 Commission meetings.

At the very outset of the design of what we call today the reactor oversight process (ROP), the Commission was interested in trying to get leading indicators of licensee performance. Today, 7 years later, we have an enormously improved assessment process for power reactor licensees, the ROP. It systematically and objectively

uses inspection findings and performance indicators to place plants in categories

(columns of a so-called action matrix) and assigns inspection resources. It is transparent. It is uniform. It is timely. It was piloted in 1999 at 13 plants at 9 sites and

went into full force at all plants on April 1, 2000.

While it is an enormous improvement over the old SALP/watch list process, the

Commission recognizes that the ROP must be constantly improved and we have established a process for developing, testing and making improvements, such as improved performance indicators. The ROP process did identify early problems at the

Cooper power plant in Nebraska and resulted in NRC and licensee actions to arrest

a decline in performance before any significant safety issues arose. However, the

ROP process, like the SALP/watch list process before it (and the parallel Institute

of Nuclear Power Operations (INPO) assessment process) missed the declining performance at Davis-Besse that contributed so clearly in hindsight to the February

2002 vessel head degradation event.

That all said, the Commission continues to encourage the early identification of

declining performance and safety problems. The NRC is committed to licensees’ developing and maintaining a strong safety culture, including commitment to safety,

technical expertise, and good management. Through the years, the Commission has

taken a number of actions in the area of safety culture, including the issuance of

the Policy Statement entitled ‘‘Conduct of Nuclear Power Operations’’ (54 FR 3424,

01/24/89). The Commission issued the Policy Statement to help foster the development and maintenance of a safety culture at every facility licensed by the NRC. It

also stated that ‘‘. . . management has the duty and obligation to foster the development of a ’safety culture’ at each facility and to provide a professional working environment, in the control room and throughout the facility, that assures safe operations. Management must provide the leadership that nurtures and perpetuates the

safety culture.’’

In a 1996 Policy Statement, entitled ‘‘Freedom of Employees in the Nuclear Industry to Raise Safety Concerns Without Fear of Retaliation,’’ the Commission stated

‘‘. . . licensees and other employers subject to NRC authority will establish and

maintain safety-conscious environments in which employees feel free to raise safety

concerns, both to their management and to the NRC without fear of retaliation.’’ If

issues are noted in the maintenance of a safety-conscious work environment, the

NRC calls this to the attention of the licensee and states the problem in the NRC’s

semiannual assessment letters to the licensee.

The Commission recognizes the difficulty in objectively assessing certain aspects

of safety culture. As noted in the Commission comments on the draft GAO report,

the NRC ROP currently assesses some underlying elements of safety culture such

as identification and resolution of problems. NRC will continue to assess, based on

objective parameters and direct observations of performance, how effectively licensees are managing safety at each facility. NRC’s assessments and actions include:

• direct, daily observation of licensee operation of the facilities.

• problem identification and resolution (PI&R) inspections.

• followup of individual allegations and trending.

• enforcement of employee protection regulations.

• safety-conscious work environment assessments.

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• early and aggressive action where safety performance or safety culture issues

are confirmed (e.g., recent actions taken to address safety culture issues at the

Salem and Hope Creek plants).

In March 2003, the Commission directed the NRC staff to develop guidance that

would identify to our licensees the best practices to encourage a safety-conscious

work environment. The Commission also directed the staff to monitor efforts by foreign regulators to develop objective measures that serve as indicators of possible

problems with safety culture. Following the Congressional hearing on May 20, 2004,

I directed the NRC staff to provide options and recommendations in this area. The

staff provided information to the Commission on July 1, 2004. The Commission has

decided to proceed with public notice of a draft generic communication on establishing and maintaining a safety-conscious work environment. The Commission also

decided to enhance the ROP treatment of cross-cutting issues to more fully address

safety culture and ensure NRC inspectors are properly trained in the area of safety

culture. This is in addition to the evaluations of the licensees’ safety-conscious work

environment, the problem identification and resolution process, and human performance already included in the ROP. The NRC notifies licensees of degraded performance in these areas in the semiannual assessment letters which are issued to all

power reactor licensees and are publicly available.

In summary, the existing regulatory infrastructure previously outlined provides a

framework for monitoring the impact of licensee safety culture on performance, and

NRC oversight will be enhanced over the next 2 years by:

• revising the ROP to more fully address safety culture.

• taking followup actions in response to the Davis-Besse Lessons Learned Task

Force recommendations.

• developing enhanced guidance to our licensees by identifying best practices to

encourage a safety-conscious work environment and to promote the NRC’s expectations.

• closely monitoring efforts by foreign regulators to measure and regulate safety

culture.

Therefore, we believe that we are continuing to make substantial progress on developing and refining an assessment process to assess early indications of deteriorating safety at nuclear power plants. What we can not promise is that the result

of these efforts will be a validated methodology in the area of safety culture of declining licensee performance. That is clearly our goal, as it was in 1997, and as it

was for our predecessors on the Commission in 1986. A lot of excellent research has

been carried out for many years here and abroad without defining such a leading

indicator or set of indicators. By carrying out a program of constant improvement

in our ROP, the Commission believes that we are moving toward that ideal as rapidly as our knowledge will allow.

Question 10. What steps have you required at Davis-Besse but not at other plants

around the country? Why have these steps not been required at other plants? Additionally, you have required that Davis-Besse conduct independent assessments of

safety culture over the next 5 years. Why have you not required the same types of

assessments, such as surveys, at other plants?

Response. The requirements imposed on the Davis-Besse Nuclear Power Station

that are beyond those at other operating reactors in the United States are annual

independent assessments for 5 years in the areas of operations, engineering, corrective actions, and safety culture, and inspections of the reactor coolant system pressure boundary during a midcycle outage. These additional requirements are contained in the Confirmatory Order issued to Davis-Besse on March 8, 2004, modifying the Davis-Besse license. These plant-specific actions were designed to ensure

sustained safe performance of the facility.

One fundamental regulation applicable to all operating reactors requires that significant conditions adverse to quality be corrected, the cause determined, and actions taken to preclude repetition (10 C.F.R. 50, Appendix B, Criterion XVI). The

licensee program in place to implement these requirements is commonly referred to

as the corrective action program. The reactor pressure vessel head degradation identified at Davis-Besse in early 2002 was a significant condition adverse to quality.

Davis-Besse was required to correct the degradation, understand the cause(s), both

from a hardware and organizational perspective, and take actions to address those

cause(s) to prevent recurrence as required by NRC regulations.

Since early 2002, following the discovery of the reactor pressure vessel head degradation, Davis-Besse has been removed from the routine reactor oversight process

(ROP) applicable to operating reactors and placed under a special oversight process

in accordance with the NRC’s Inspection Manual Chapter 0350, ‘‘Oversight of Operating Reactor Facilities in an Extended Shutdown as a Result of Significant PerVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00075 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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formance Problems.’’ Pursuant to that manual chapter, the NRC established a special Oversight Panel and issued a Restart Checklist listing those actions that had

to be completed prior to restart of the plant. The items on the Restart Checklist captured the critical actions necessary for the facility to comply with the corrective action program requirements applicable to all operating reactors.

Included in the Restart Checklist is the completion of comprehensive root cause

assessments. As part of these assessments, Davis-Besse identified equipment problems, organizational and human performance issues, and program and procedure

deficiencies. The organizational and human performance issues Davis-Besse identified included safety culture concerns. Consequently, in addition to the inspection

and repair of equipment, and improvement in programs and procedures, enhancements to human performance, organizational effectiveness and safety culture were

also included in the Restart Checklist. Pursuant to the corrective action program requirements in 10 C.F.R. 50, Appendix B, similar actions would be required to be

accomplished at any operating reactor with equivalent performance deficiencies as

Davis-Besse.

One aspect of the performance problems at Davis-Besse was the ineffectiveness

of licensee self-assessments and audits to identify degrading performance over time.

The additional requirements for independent assessments imposed on Davis-Besse

through the Confirmatory Order are unique to Davis-Besse. They are intended to

assure lasting improvement in the effectiveness of the licensee’s own internal assessments of performance and to ensure sustained safe performance of the facility.

The Confirmatory Order requires the results of these independent assessments be

provided to the NRC in publicly available documents.

Question 11. What have you changed since the Davis-Besse incident to address

the lessons-learned task force (LLTF) recommendations about safety? How do these

changes interact with other initiatives that you are doing or have done?

Response. All of the lessons-learned task force recommendations are tied to safety

in either a direct or indirect manner. The items considered by the senior management review team to have direct linkage with corrective actions for Davis-Besse root

causes were assigned the highest priority. The NRC staff has been focused on completing actions related to these recommendations in the most expeditious and efficient manner possible. Some examples of changes at the NRC related to the DavisBesse lessons learned activity include: (1) An enhanced focus on communications,

particularly regarding communications between the plant sites, regions, and NRC

headquarters; (2) completion of a comprehensive evaluation of the operating experience assessment function with associated organizational changes that are being implemented; and (3) focused enhancements to NRC inspection guidance that relate

to maintaining a questioning attitude in all aspects of inspection and assessment

activities.

In the communications area, actions taken in response to the LLTF recommendations complement the broader agency initiative on enhancing communications both

within the NRC and with external stakeholders. Actions taken in response to LLTF

recommendations have also complemented the broader agency initiative on risk-informing agency decisionmaking processes through focusing resources on areas most

critical to safety.

Question 12. In the past, have you considered regulating safety culture? If so,

what conclusions have been reached and why? What changes (if any) have you made

in response to these considerations?

Response. In 1989, the NRC first set forth its expectation that licensees establish

a strong safety culture in its ‘‘Policy Statement on the Conduct of Operations.’’ The

NRC continues to place a high value on the importance of establishing and maintaining a strong safety culture at licensed facilities. The Commission has considered

various staff proposals for directly regulating the area of safety-conscious work environment (SCWE), one attribute of safety culture, and approved assessment of SCWE

by the NRC staff on a case-by-case basis. The Commission has also directed the staff

to: (1) develop further guidance that would identify for the industry practices to encourage a SCWE; and (2) monitor efforts by foreign countries to develop objective

measures that may serve as indicators of possible problems with safety culture. The

Commission is taking additional measures as discussed in the response to Question

9.

Question 13a. What are other countries doing to regulate safety culture at their

nuclear plants?

Response. Currently, only one country, Finland, has a specific regulation that directly addresses safety culture. Several other countries, including England, Spain,

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Canada, Sweden and France, inspect for safety culture problems even though they

do not have specific regulations in the area of safety culture.

Question 13b. How is this different from what is done in the U.S.?

Response. The United States has no specific regulation for safety culture, but

NRC conducts safety culture evaluations on a case-by-case basis. A subset of underlying elements of safety culture, such as identification and resolution of problems

and maintenance of a safety conscious work environment, currently are assessed

through the Reactor Oversight Process (ROP). Please see the response to part (A)

above.

Question 13c. Are there any foreign regulations and/or practices that should be

replicated in the U.S.?

Response. The NRC staff continues to monitor activities in other countries to determine how foreign regulators measure and regulate safety culture, but has not

identified any regulations or practices in other countries to be considered for implementation in the United States.

RESPONSES BY NILS J. DIAS TO ADDITIONAL QUESTIONS FROM SENATOR LIEBERMAN

OFFICIAL USE ONLY

Question 1. Chairman Diaz, should there [be] a no-fly zone around the Indian

Point power plant? It is my understanding that we have established no-fly zones

around Disney theme parks, for security concerns. Why do we have no fly zones

around theme parks, but not our nuclear facilities?

Response. A publicly available map details the three nautical mile, 3000 foot altitude no-fly zone around the Walt Disney theme parks. Commercial air traffic, however, is allowed to transit through the zone. Pursuant to Federal Aviation Administration regulations (14 CFR Section 99.7), a published flight restriction is in place

for nuclear power plants, which, in part, states ‘‘. . . pilots . . . are advised to avoid

the airspace above or in proximity to all nuclear power plants. Pilots should not circle or loiter in the vicinity of such facilities. Pilots who do so can expect to be interviewed by law enforcement personnel . . .’’

OFFICIAL USE ONLY

May be exempt from public release under the Freedom of Information Act (5

U.S.C. 552)

Exemption Number, 5, Nuclear Regulatory Commission review required before

public release.

Name and organization of person making determination, John E. Tomlinson,

NSIR/DO

Date of Determination, July 12, 2004

OFFICIAL USE ONLY

The Indian Point facility is located in proximity to two major airports and within

miles of a third airport. Instituting a broad ‘‘no-fly’’ zone for the Indian Point facility

would be problematic and have substantial repercussions for each of those airports

and for area transportation. The protection of nuclear plants, including the Indian

Point facility, is dependent on multiple measures, which in the aggregate result in

the ability to maintain public health and safety. The Federal Aviation Administration (FAA), the North American Aerospace Defense Command (NORAD); and the

Transportation Security Administration (TSA) manage programs that are intended

to prevent assaults by air. For example, the TSA continues to oversee the implementation of multiple countermeasures such as the Federal Air Marshal program, enhanced passenger and baggage screening, and hardened flight decks. The FAA and

NORAD have much improved ability to detect deviations from flight paths today

than on 09/11/01. NORAD has the ability to communicate with every nuclear power

plant control room, either directly or through the NRC Incident Response Center,

upon detection of a possible threat. This allows the plant operator to place the plant

in a safe condition while NORAD attempts to intercept this threat. These programs,

combined with the response capabilities of local authorities provide a significant defense-in-depth to address such threats.

OFFICIAL USE ONLY

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Question 2. I am concerned about the Evacuation Plans for the area around Indian Point. My constituents have first-hand experience with the fact that our roads

are already carrying nearly twice as much traffic as they were designed for. I–95

and I–84 are reduced to stop-and-go speeds on a daily basis. It will require very

careful planning based on realistic assumptions to be sure that our roads aren’t reduced to a standstill in the event of an evacuation. Is it realistic to assume, for example, that families will be willing to separate to facilitate the evacuation, or would

it be more realistic to assume that families will gather together first, and that each

family will stay together, to evacuate as a family? Have we done the best demographic studies possible to facilitate evacuation plans?

Response. The NRC is responsible for evaluating the adequacy of onsite emergency plans developed by the nuclear power plant licensee. The Federal Emergency

Management Agency (FEMA) is responsible for assessing the adequacy of offsite

(state and local) radiological emergency planning and preparedness activities.

FEMA informed the NRC and Governor Pataki of New York, on July 25, 2003, that,

‘‘after carefully considering all available information, we have reasonable assurance

that appropriate protective measures to protect the health and safety of surrounding

communities can be taken and are capable of being implemented in the event of a

radiological incident at the Indian Point facility.’’

FEMA’s finding recognized that the affected counties had received an updated

‘‘evacuation time estimate ‘‘ (ETE) study (incorporating 2000 census data and shadow evacuation estimates) for the 10 mile emergency planning zone. The counties

had specifically included the updated ETE study in their Radiological Emergency

Preparedness Plans. The ETE revisions included the latest census data, consideration that some family units will reunite prior to evacuation, an expanded geographic area of analysis, and an analysis of shadow evacuation. Shadow evacuation

refers to people outside the evacuation zone who also decide to evacuate. In addition, the evacuation estimates required for nuclear evacuation plans must examine

the sensitivity of evacuation times to key variables, including the nature and limits

of transportation facilities in the affected area and other factors that may affect

evacuation time, such as the public’s use of public transportation or need for special

transportation. The New York State and affected county plans provide for an active

response to traffic obstructions in the event of a radiological emergency at Indian

Point. Alternate evacuation routes are pre-designated. Responsibilities are assigned

and resources identified for detecting and responding to traffic bottlenecks using law

enforcement and public works personnel and equipment.

Considering those FEMA findings and determinations in conjunction with the

NRC onsite assessments, the NRC did not alter its determination that the overall

state of emergency preparedness at Indian Point 2 and 3 provides reasonable assurance that adequate protective measures can and will be taken in the event of a radiological emergency.

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STATEMENT OF MARVIN FERTEL, SENIOR VICE PRESIDENT OF NUCLEAR GENERATION, NUCLEAR ENERGY INSTITUTE

Chairman Voinovich, Ranking Member Carper and distinguished members of the

subcommittee, I am Marvin Fertel, senior vice president and chief nuclear officer

at the Nuclear Energy Institute (NEI). I am honored to represent NEI’s member

companies before this subcommittee today. Nuclear energy is vitally important to

our environment, particularly in meeting the nation’s clean air goals, and to our nation’s energy security. It is also necessary that the nuclear industry has a Federal

regulatory agency that is stable, effective and efficient.

NEI is responsible for developing policy for the United States nuclear industry.

NEI’s 270 corporate and other members include every United States energy company that operates a nuclear plant, as well as a wide variety of organizations and

businesses involved in the use of radioisotopes for beneficial purposes. NEI’s membership also includes nuclear fuel cycle companies, suppliers, engineering and consulting firms, national research laboratories, and manufacturers of radiopharmaceuticals, universities, labor unions and law firms.

The 103 reactors in the United States are among the world’s most efficient and

reliable. Nuclear energy is the largest source of emission-free electricity in the

United States and the nation’s second-largest source of electricity after coal. The

U.S. nuclear energy sector is also the world’s largest, generating more electricity

than the nuclear sectors of France and Japan-the next two largest-combined. On a

percentage basis, nuclear energy provides electricity for 20 percent of American

homes and businesses. Globally, 18 nations generate a higher percentage of electricity from nuclear energy that the United States, including France at 78 percent,

Japan at 35 percent. Nuclear energy is growing rapidly in the burgeoning economics

like China and India.

This testimony addresses:

(1) actions needed to preserve this vital energy resource

(2) essential steps needed to enhance progress toward a long-term, stable regulatory approach in the United States

(3) essential Nuclear Regulatory Commission funding issues

(4) changes needed in the Atomic Energy Act

(5) industry initiatives toward preserving the integrity of materials, including

metals that comprise components and equipment used in nuclear power plants

(6) the need for resolution of conflicting radiation protection policies

(7) advances in nuclear power plant security.

NUCLEAR POWER PLANTS CONTINUE TO OPERATE AT RECORD SAFETY AND

PERFORMANCE LEVELS

During the past decade, U.S. nuclear power plants have achieved record levels of

production and efficiency while maintaining the highest levels of safety in the electricity sector. U.S. nuclear power plants produced 767 billion kilowatt-hours of electricity in 2003, a 25 percent increase compared to 1993 output and the third best

production year ever. Although no new U.S. plants have been built during this period, this increased production is equivalent to adding 19 new 1,000-megawatt (MW)

plants over the 10-year period.

U.S. nuclear plants achieved a capacity factor of about 90 percent in 2003. This

average is approximately double the capacity factors of 20 years ago and is the highest of any generating source in the United States. In 2002, coal-fired power plants

had a capacity factor of about 69 percent; combined-cycle natural gas power plants,

40 percent; hydropower, 35 percent; and wind, 29 percent. Overall nuclear plant

performance has been increasing steadily over the past decade as measured by the

Institute of Nuclear Power Operations.

Nuclear energy continues to be the most affordable baseload source of electricity

for businesses and consumers. Average production costs in 2002 of 1.71 cents per

kilowatt-hour (kWh) were lower than those for coal (1.85 cents per kWh), natural

gas (4.06 cents per kWh) and oil (4.41 cents per kWh). Preliminary production costs

for 2003 show that low-cost trend continuing.

Throughout this period of record production and efficiency, the industry has maintained a steadfast commitment to safety. The level of significant events equipment

malfunctions or operational anomalies is 30 times lower than it was at the end of

the 1980’s. The industry average is currently 0.03 annual events per reactor, which

is equivalent to three reportable events per year.

With productivity and reliability on the rise and production costs falling, the profitability of nuclear plants also is improving. The industry expects incremental gains

in profitability to continue for several more years. In addition to improving profitability, companies plan to increase revenue through power uprates. With these

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uprates and the restart of the Browns Ferry reactor in Alabama, the industry expects to add approximately 10,000 megawatts to the U.S. electricity system over the

next decade.

The efficiency and competitiveness of nuclear power plants are driving factors in

the decision by U.S. energy companies to seek renewal of operating licenses from

the Nuclear Regulatory Commission. One-quarter of U.S. reactors already have been

approved by the NRC to extend their reactor operating licenses from 40 to 60 years.

Seventeen other reactors are in the queue for NRC review of their license renewal

applications, and the industry expects that nearly all reactors will pursue license

extensions. The Department of Energy’s Energy Information Agency is recognizing

this trend in its most recent energy forecast.

NUCLEAR ENERGY: AN ESSENTIAL COMPONENT OF OUR NATION’S CLEAN AIR GOALS

Nuclear energy plays a vital role in U.S. energy security and diversity, producing

electricity safely and cleanly for one of every five U.S. homes and businesses. Before

the oil shocks of the early 1970’s, nuclear power provided just 4 percent of our electricity supply, and oil provided about 20 percent. The situation is now reversed, as

nuclear energy essentially has phased out oil use in the electricity sector.

This steady growth of nuclear power over the past three decades has produced

enormous environmental and clean air benefits. Nuclear energy now generates

three-fourths of all emission-free electricity generation in the United States and is

making significant reductions in harmful emissions into the atmosphere from the

industrial sector. Between 1973 and 2001, U.S. nuclear power plants avoided the

emission of 70.3 million tons of sulfur dioxide (SO2) and 35.6 million tons of nitrogen

oxide (NOx), compared to fuels that otherwise would have produced electricity.

The value of the emissions prevented by using nuclear power is essential in meeting clean air regulations. In 2002, U.S. nuclear power plants avoided the emission

of about 3.4 million tons of sulfur dioxide and about 1.4 million tons of nitrogen

oxide. The requirements imposed by the 1990 Clean Air Act Amendments reduced

SO2 emissions from the electric power sector between 1990 and 2002 by 5.5 million

tons per year and NOx emissions by 2.3 million tons per year. Thus, in a single

year, using nuclear power plants to generate electricity has eliminated nearly as

much in emissions than has been achieved over a 12-year period by all other sources

combined.

To put these numbers into perspective further, the NOx emissions prevented by

U.S. nuclear power plants are the equivalent of eliminating the NOx emissions from

6 of every 10 passenger cars on our roads today. The carbon emissions prevented

by U.S. nuclear power plants are equivalent to eliminating the carbon emissions

from nine of every 10 passenger cars on our roads.

According to a report issued last year by the U.S. Environmental Protection Agency and the Ozone Transport Commission, nuclear energy was one of the most significant compliance tools for reducing NOx emissions in Northeastern and mid-Atlantic states. The EPA assessment found that energy companies have been shifting

electricity production from fossil-fueled power plants to emission-free nuclear power

plants to help comply with Federal air pollution laws.

Nuclear energy also is an environmental imperative for reducing greenhouse

gases. New York is a good example of this phenomenon. New York’s greenhouse gas

emissions from fuel combustion have decreased 1 percent from 1990 to 2002, despite

a growth in population and the number of automobiles on the road. The increased

production from the state’s six nuclear power plants offset the need for electricity

production at other power plants and therefore reduced greenhouse gas emissions

during that period.

In 1990, the FitzPatrick, Ginna, Indian Point and Nine Mile Point nuclear power

plants generated more than 24 billion kilowatt-hours of electricity in New York. By

2000, nuclear energy production increased by 60 percent to more than 40,000 billion

kilowatt-hours. This increase in nuclear production allowed for a decrease in the use

of other fuels and offset an increase in emissions from the rising use of natural gas.

The result is an overall 23 percent reduction in greenhouse gas emissions from the

electricity sector.

Two reactors at the Indian Point Energy Center near New York City produced

15.7 billion kilowatt-hours of electricity in 2003, approximately 11 percent of New

York’s power and enough for 1.5 million households. Some are recommending closure of the Indian Point Energy Center because of security concerns, but such a

move would sacrifice a critical source of power for the state and needlessly reverse

progress that New York has made in reducing greenhouse gas emissions. EPA has

determined that all five counties that surround Indian Point already do not comply

with Federal air rules. Taking Indian Point off the New York electricity grid would

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worsen air quality and unnecessarily drive up the cost of electricity to consumers

and businesses.

As the New York example shows, nuclear energy is vital to our nation’s clean air

programs. Expanding nuclear energy production through continued efficiency gains

and building new nuclear plants would further enhance the role of nuclear energy

in our environmental goals. Recent studies by the Earth Institute at Columbia University and the Massachusetts Institute of Technology underscore the importance of

nuclear energy and renewable energy sources in meeting energy and environmental

goals that are inextricably linked.

A STABLE, EFFECTIVE, EFFICIENT NRC IS VITAL TO THE OPERATION OF EXISTING

REACTORS AND THE FUTURE EXPANSION OF NUCLEAR POWER

Nuclear power plants are a strategic national asset that contribute the fuel and

technology diversity that is the foundation of our electric supply system. Together,

large coal and nuclear power plants produce 70 percent of our nation’s electricity,

with a mix of hydroelectric, natural gas and renewables providing the balance. But

this energy diversity is at risk because today’s business and market conditions hamper investment in new large capital-intensive technologies, such as advanced design

nuclear power plants and clean coal power plants. Although the industry expects

that most reactors will be relicensed, the nuclear industry’s potential obviously is

severely limited if new nuclear plants cannot be financed.

The United States faces a critical need for investment in energy infrastructure,

including advanced nuclear designs. Nuclear plants are the most reliable of our

sources of electricity and offer the greatest degree of price stability. Yet, since the

passage of the Energy Policy Act of 1992, our Nation has built approximately

284,000 megawatts (MW) of natural gas-fired generating capacity more than 90 percent of the new capacity added during this period. Only 4,355 MW of new nuclear

capacity and 9,500 MW of new coal-fired capacity have been added to the electricity

grid during that same period.

The nuclear energy industry is committed to the construction of new nuclear

plants when the business conditions are appropriate. However, most of the factors

involved in building new reactors the structure of the industry and markets, the

technology itself and the Federal licensing process have changed since the last nuclear power plants were built.

The industry has been working for several years on regulatory, financial and legislative initiatives that encourage investment in new nuclear plants. For example,

recognizing that the construction of large power plants has a high degree of business risk, the industry proposed legislative initiatives that provide Federal financial

support for the first few new nuclear plant designs. In addition, the industry supports the DOE’s Nuclear Power 2010 program aimed at developing, in partnership

with companies, detailed design and engineering on advanced reactor designs and

demonstrate the early site permit and combined construction and operating license

process.

More pertinent to the jurisdiction of this subcommittee is the prospect that companies would pursue new nuclear plants would be greatly enhanced by continuity

and stability in the regulatory processes and regulatory environment at the NRC.

Regulatory uncertainty is the largest perceived risk with new nuclear plant construction, so any reduction in stability of the regulatory process will damage industry and financial community prospects for new nuclear plants.

Regulatory stability and continuity also are vital for the continued success of current nuclear plants. As I have previously noted, that fleet continues to operate at

high levels of safety and efficiency, and the NRC should regulate the industry commensurate to this excellent record of performance.

THE NRC REACTOR OVERSIGHT PROCESS HAS PROVEN SUCCESSFUL

The NRC now has 4 years of experience with its revised reactor oversight process,

first launched in April 2000. The new oversight process focuses on those areas of

the plant that are most important to safety. The new approach is successful in improving the transparency, objectivity and efficiency of regulatory oversight. It is an

enormous improvement over the agency’s previous approach to evaluating nuclear

plant safety.

The revised oversight process combines the results of performance indicators in

18 key areas and findings from an average of 2,500 hours of inspections per reactor

to determine the appropriate allocation of inspection resources across the fleet of operating plants. The results among the nations 103 operating reactors after the first

quarter of 2004 were as follows:

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1The Davis-Besse plant is receiving special inspection outside of the normal regulatory framework.

• Seventy-seven reactors had all green performance indicators and inspection

findings and will receive the baseline level of NRC inspection (approximately 2,500

hours per year).

• Twenty reactors had a single white performance indicator or inspection finding

and will receive supplemental inspection beyond the baseline effort.

• Five reactors had more than one single white indicator or finding in a performance area or had white indicators or findings in different performance areas and will

receive more in-depth inspection.1

During the past 4 years, there have been 83 performance indicators and 114 inspection findings across the industry that are less than the highest NRC level.

Given that the 4-years encompass about 400 reactor operating years and over 1 million hours of NRC inspection, these results demonstrate that the industry continues

to operate at excellent levels of safety. Although an internal NRC report expressed

concern about the declining number of ‘‘non-green’’ performance indicators, the industry views this trend as achieving success and a strong example of the soundness

of performance-based regulation.

THE NEED FOR CONTINUED REGULATORY CHANGE

The NRC, however, has struggled to implement safety-focused insights into Federal regulation fully. The agency has made admirable progress in employing safetyfocused principles that properly apply probabilistic risk assessment to apply regulation where it is needed. Although the NRC has applied the safety-focused approach

to the reactor oversight process, it has yet to incorporate this into the actual regulations. This would result in a vastly more effective and efficient regulatory process,

but much work remains to codify the safety-focused principles as part of the rules

themselves.

Rulemaking initiatives have been under way for several years to apply the safetyfocused principles to 10 CFR Part 50, which deals with regulation of nuclear facilities. Successful promulgation of these rules is critical to the effective and efficient

regulation of nuclear facilities. These rules also could aid in establishing a more stable and predictable regulatory process that supports both current and future nuclear

plants.

This approach is particularly necessary to address issues such as the integrity of

plant materials—metals and alloys used in plant components and equipment. In addition, the application of the safety-focused principles is essential to the regulation

of programs related to the structural integrity of reactor systems and components.

The NRC also has undertaken other projects of concern to the industry. With congressional approval of Yucca Mountain as the site of a national repository for used

nuclear fuel, DOE in December is scheduled to submit a license application to the

NRC for the construction of that facility. Having one Federal agency review and approve the actions of another is relatively unique and represents a major challenge

for both agencies. The NRC has been actively engaged with DOE in prelicensing activities. The industry supports the efforts of the NRC to date and believes that it

is providing sound oversight of the project. It is in the interest of all parties that

the repository be built and operated safely.

In reviewing the Yucca Mountain license application, the NRC will create multiple licensing boards. Creating and coordinating these various bodies will test the

agency’s management. The industry strongly urges continued oversight by this and

other congressional committees to assure efficient management of resources and to

hold the NRC to its timetable of acting on the license application within 3 years

of receipt.

The NRC also is active in licensing new nuclear facilities. Louisiana Energy Services (LES) submitted an application for the licensing of a new enrichment facility

in January, and a similar license application is expected from the U.S. Enrichment

Company within the next few months. The NRC responded to the LES application

with an order that the application review be completed within 30 months, and the

NRC appears to be keeping to that schedule.

The industry is following the management of the LES applications closely, given

that prior efforts by the NRC to review applications for new facilities have taken

many years to resolve. Unnecessary delays in the licensing process for nuclear facilities add significant business risk and hamper the development of the nuclear industry. The industry encourages congressional oversight of these license applications to

ensure that they are processed in a timely and thorough manner.

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NRC BUDGET AND STAFFING LEVELS REQUIRE REVIEW

The NRC’s budget has increased significantly over the past 5 years. The NRC’s

proposed fiscal 2005 budget totals $670.3 million, an increase of $44.2 from the fiscal 2004 budget, and the highest ever for this agency. This is, in large part, due

to expanded security programs and staffing for those programs. However, the industry believes that the NRC has failed to leverage opportunities to become more efficient.

Just as consolidation within the industry resulted in more nuclear plants being

operated by a smaller number of companies, the NRC should review its regional

structure and determine if changes are needed to respond to the new industry structure. In addition to the implementation of the revised reactor oversight process, the

natural consolidation of the industry provides an opportunity for the NRC to reallocate existing resources.

About 4 years ago, the Environment and Public Works Committee approved legislation that renewed the NRC’s authority to collect user fees to offset its budget.

That proposal was eventually passed into law in a slightly modified form. As a result, general revenues will be used to fund 10 percent of the NRC’s budget in the

coming fiscal year. That legislation expires at the end of the fiscal year 2005, and

the NRC’s budget again will be fully funded by user fees despite many programs

that do not benefit the industry.

As some form of reauthorization of the user fee is likely to be passed next year,

the industry urges the committee to review the current fee structure and to identify

improvements for the NRC. The industry believes that the NRC should tie activities

and fees together. We believe it is inappropriate to categorize about 75 percent of

the agency’s budget in one ‘‘general’’ account (part 171). In addition, the committee’s

action 4 years ago that resulted in 10 percent of the agency’s budget coming from

general revenues was based upon a calculation of those services that do not directly

benefit NRC licensees. The percentage of these services that do not benefit licensees

should be reviewed, particularly in light of increased national security expenses that

should be funded through general revenues. The industry supports legislative efforts

that call for much of the security program at the NRC to be funded from general

revenues and appreciates the committee’s support of that proposal.

THE INDUSTRY RECOMMENDS CHANGES TO THE ATOMIC ENERGY ACT

The industry continues to support several proposed changes to the Atomic Energy

Act. These proposals will facilitate reform of the NRC and its regulatory processes

to ensure the effective and efficient regulation of the industry.

• In order to provide the commission with the flexibility and discretion to manage

and organize the NRC in the most appropriate manner, Sections 203, 204 and 205

of the Atomic Energy Act should be repealed.

• Congress should remove the restriction on foreign ownership of commercial nuclear facilities.

• When a combined construction and operating license is issued by the NRC for

a new nuclear power plant, Congress should clarify that the license term begins

when the plant commences operation rather than when the license is issued.

• Congress should remove the requirement that the NRC conduct antitrust reviews as other Federal agencies, notably the Securities and Exchange Commission,

the Federal Trade Commission, the Justice Department, and the Federal Energy

Regulatory Commission, conduct such reviews.

The industry is aware of and appreciates the efforts of the committee to pass several of these proposals into law. In addition, the industry strongly supports, and

also appreciates, efforts of this committee to ensure that Price-Anderson Act coverage will be available to companies that are considering building new nuclear

power plants and other nuclear facilities. The industry supports the Price-Anderson

Act reauthorization language included in the energy bill conference report.

RADIATION PROTECTION POLICY MUST BE SCIENCE-BASED AND CONSISTENT

As the industry works to increase energy production, it remains committed to

maintaining the highest priority on safety. Achieving this goal depends in large part

on the Federal Government’s setting a uniform radiation protection policy. The policy should be based on the best available science and should be applied equitably

and consistently by every Federal agency across all programs.

Duplicative and conflicting regulation by different agencies, using different criteria, must be eliminated. In this area, Federal radiation protection policy falls

short. Senator Pete Domenici requested in 2000 that the General Accounting Office

(GAO) produce a report on this issue. The report—‘‘Radiation Standards: Scientific

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Basis Inconclusive, and the EPA and NRC Disagreement Continues’’ (GAO/

RCED00–152)—concluded that U.S. radiation protection standards ‘‘lack a conclusively verified scientific basis,’’ involve ‘‘differing exposure limits’’ due to policy disagreements between Federal agencies, and ‘‘raise questions of inefficient, conflicting

dual regulation.’’ A troubling conclusion of the GAO report is that the costs related

to complying with such standards ‘‘will be immense, likely in the hundreds of billions of dollars’’ of private and public funds.

This situation has persisted for years, without any substantial resolution. For example, Senator John Glenn, as chairman of the Senate Committee on Governmental

Affairs, asked the GAO to report on this issue in 1994. The GAO report, ‘‘Nuclear

Health and Safety: Consensus on Acceptable Radiation Risk to the Public is Lacking’’ (GAO/RCED–94–190), concluded that ‘‘differences exist in the limits on human

exposure to radiation set by Federal agencies, raising questions about the precision,

credibility, and overall effectiveness of Federal radiation standards and guidelines

affecting public health.’’

What is particularly troubling is that the 2000 report requested by Senator

Domenici, issued 6 years after the report requested by Senator Glenn, reflected that

the situation was essentially unchanged. Now 4 years later, the nuclear energy industry still notes little substantive progress in resolving the issue of duplicative and

conflicting radiation standards.

Although Federal regulatory agencies contend this protects public health, it discourages enhancements to public health protection and the cost-effectiveness of

doing so. In addition, this situation undermines public confidence in regulatory activities and, in the end, inhibits the availability the vast health and quality-of-life

benefits from commercial applications of nuclear technology. This situation also creates significant uncertainties in projecting costs and schedules of licensing and

building of new plants, the decommissioning of facilities that are no longer operational, and the disposal of radioactive waste.

Federal radiation protection policy must provide a foundation to protect public

health and safety, make the best use of public funding and resources, and help build

public trust and confidence in Federal decisions. The current conflicting radiation

standards and duplicative regulation work against those principles.

Recently, the NRC and EPA have pursued initiatives to resolve duplication and

conflict in their regulatory programs for radiation safety. The NRC and EPA have

agreed on a communication process that addresses their conflicting standards for decommissioning site cleanups. Also, the agencies are coordinating efforts to create a

more integrated framework for regulating the safe disposition of low-activity radioactive material and mixed (radiological and chemical) waste.

However, the greatest impediment to resolving issues of duplicative authority and

conflicting standards are the various laws that mandate the respective agencies’ regulatory programs. Congress should resolve the policy issues that the agencies cannot

resolve on their own. We encourage this committee to provide appropriate, continued oversight to ensure that consistent radiation policy is established through legislation.

INDUSTRY HAS LAUNCHED A PROACTIVE, COMPREHENSIVE MATERIALS

MANAGEMENT PROGRAM

The nuclear industry has long known that radiation could have effects on metals

and other structural materials previously unknown to scientists or engineers. Because commercial nuclear reactors operate at high temperatures and pressures, it

had to find materials able to withstand radiation, stress, wear and corrosion.

Through experience, it has.

Some of the initial materials used to fabricate reactor and power generation components did not perform as well as predicted. In response, the industry, over the

past 20 years, has formed four major programs related to boiling water reactor vessel internals, steam generator management, pressurized water reactor materials reliability, and robust fuels. Working with EPRI and the Institute of Nuclear Power

Operators (INPO), these efforts have been successful in addressing many materials

issues.

Despite these efforts, an inspection at the Davis-Besse nuclear plant in 2002 identified component damage stemming from two issues: reactor vessel nozzle cracking

and boric acid leakage. Since 1988, all U.S. pressurized water reactors have had

programs for preventing boric acid leakage. In the early 1990’s, the NRC and the

industry began examining the potential for reactor vessel nozzle cracking, after tiny

cracks were found in nozzles at a French reactor.

Nozzle cracking and boric acid leakage at Davis-Besse combined to create a problem that the nuclear industry had not experienced before: significant corrosion on

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a reactor vessel head. The corrosion was caused by water that contains boric acid.

The cracks developed over several years, ultimately permitting a small amount of

water containing boric acid to leak and come into contact with the reactor vessel

head.

As a result of this corrosion, the Davis-Besse plant was shut down for corrective

measures. In March, the NRC approved FirstEnergy’s corrective actions and ongoing

plant maintenance changes and permitted Davis-Besse to restart. FirstEnergy replaced the reactor vessel head at Davis-Besse and the NRC conducted a thorough

inspection of the reactor. In addition, the company implemented, with NRC oversight, an overhaul of its management and management practices at the site.

The nuclear industry and the NRC have responded quickly and responsibly to the

Davis-Besse event. As the NRC has also been invited to testify, the commissioners

can best detail actions taken by the agency. However two of these actions merit special attention: additional inspections of all U.S. pressurized water reactors and

changes in the agency’s oversight process to facilitate early detection of the type of

corrosion that occurred at Davis-Besse.

The nuclear industry has also responded to the event. INPO investigated the

event and issued a report with recommendations aimed at preventing a similar

event. EPRI, the industry’s research organization, had previously developed a technical document on boric-acid corrosion inspection and leakage detection. The owners

of pressurized water reactors have completed inspections recommended by the NRC.

There are no indications at any other plant of corrosion on reactor vessel heads

similar to that found on Davis-Besse. Small cracks were found on the nozzles at several plants and reactor owners have scheduled replacement of 30 vessel heads by

2007. To date, vessel heads have been replaced at eleven nuclear plants. In the

meantime, all of these reactors will continue to operate safely.

Perhaps more importantly, the nuclear industry has also developed a integrated,

coordinated, and proactive nuclear plant materials program. In 2003, a task force

composed of senior industry executives with broad experience in materials issues,

working with materials experts, completed a broad assessment of industry programs. Although materials integrity has long been a part of the industry’s research

and maintenance programs, companies are now replacing more equipment and components more rapidly than expected. The task force found that the industry would

benefit from a proactive program to assess and, when needed, replace plant components and materials.

Among the findings of the industry assessment is the recognition that when significant materials issues become known, they quickly consume all the attention, personnel and funding of diverse current materials groups. Current programs differ in

levels of funding, scope, assessment processes, executive involvement, personnel resources and other areas. No industry group had looked holistically at the management of nuclear materials issues.

The recent industry assessment stressed the importance of funding and organizational commitment to oversee materials issues. The assessment concluded that consistent funding at the level required to resolve current materials issues is a prerequisite to remaining an effective nuclear plant operator. As a result, the industry

will spend nearly $65 million annually on this effort. We have put new inspection

protocols in place and have developed techniques to anticipate and detect potential

problems.

NEI also has taken proactive action to address materials degradation at our nation’s nuclear power plants. With the unanimous support of the chief nuclear officer

of each company that operates a nuclear power plant, NEI has established an industry wide initiative to integrate materials programs and to establish ongoing, comprehensive management of materials issues. This approach integrates existing activities by INPO, EPRI and reactor owners’ groups and refocuses them for future

efforts. An executive-level oversight structure is in place to ensure appropriate resources and attention is given to ensure effective management of materials issues.

The Davis-Besse event prompted the NRC and the nuclear industry to reexamine

its programs for materials management issues. The industry is committed to detecting and resolving materials issues before they challenge the safe operation of our

facilities. The industry believes that the NRC has taken appropriate steps to address these issues. Additionally, the industry believes that a proactive industry-led

program, supported with appropriate resources, is the preferred approach.

U.S. NUCLEAR POWER PLANTS ARE THE MOST SECURE INDUSTRIAL FACILITIES BEFORE

9/11 AND EVEN MORE SECURE TODAY

NEI has not had the opportunity, since the tragic attack of Sept. 11, 2001, to review with this subcommittee the actions that the industry has taken in response

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to increased security concerns created by that event. The nuclear industry fully recognizes that the health, economic and national security benefits from nuclear energy

easily could be overruled if our plants cannot be operated safely, even in the current

environment of concern over terrorism.

Even prior to Sept. 11, 2001, our nuclear power plants were the most secure industrial facilities in the United States. They were built to withstand extreme natural events, such as earthquakes and hurricanes, and the NRC has for more than

20 years required that private security forces defend against an attacking force of

saboteurs intent on causing a release of radiation. The facilities are even more secure today, with voluntary and NRC-required security and emergency response implemented since 2001.

In analyzing this changing global environment, the nuclear industry started with

the firm knowledge that nuclear power plants although robust and difficult targets

to penetrate nonetheless are considered by some to be potential terrorist targets.

However, as stated by former NRC Chairman Richard Meserve:

It should be recognized that nuclear power plants are massive structures with

thick exterior walls and interior barriers of reinforced concrete. The plants are

designed to withstand tornadoes, hurricanes, fires, floods, and earthquakes. As

a result, the structures inherently afford a measure of protection against deliberate aircraft impacts. In addition, the defense-in-depth philosophy used in nuclear facility design means that plants have redundant and separated systems

in order to ensure safety. That is, active components, such as pumps, have

backups as part of the basic design philosophy. This provides a capability to respond to a variety of events including aircraft attack.

As former Chairman Meserve noted, the industry’s ‘‘defense-in-depth’’ philosophy

includes protection by well-trained, heavily armed security officers, fortified perimeters and sophisticated detection systems. The industry also assumes that potential

attackers may attempt to achieve the help of a sympathetic insider, so the companies that operate nuclear plants conduct extensive background checks before hiring

employees. Even then, to be conservative, our security plans assume that attackers

are successful in obtaining insider help.

SECURITY AT NUCLEAR FACILITIES HAS INCREASED SIGNIFICANTLY SINCE SEPT. 11, 2001

Nuclear power plants were our nation’s most secure industrial facilities before

Sept. 11, 2001, but new threats required the industry to take action to bolster security even more. The industry has increased well-trained, paramilitary security forces

at the plants by one-third, to some 7,000 officers at 67 sites. The industry also has

worked with the NRC to implement the security improvements mandated both in

2002 and 2003. Overall, the industry has invested more than $500 million in security-related improvements since September 2001, and the industry will invest another $500 million in security enhancements by the end of this year.

The industry’s security has been recognized as excellent in independent assessments conducted by the Progressive Policy Institute, a panel of security and infrastructure experts for The Washington Post and by current and former law enforcement officials. The Progressive Policy Institute, in a report issued last summer, gave

nuclear plant security its only A rating. When The Washington Post reviewed security in several U.S. private and government sectors a year after Sept. 11, a panel

of experts gave the nuclear industry a rating of ‘‘A-/B+’’ the second-highest rating

in the survey. More recently, the National Journal, in a bipartisan survey, gave nuclear plant security its third-highest ranking.

A copy of an NEI publication entitled ‘‘Post-Sept. 11 Improvements in Nuclear

Plant Security Set U.S. Industry Standard’’ is attached. It provides additional detail

regarding the many security changes that have been made at our plants since September 2001.

The nuclear industry has cooperated and worked with the NRC to review nuclear

plant security completely, and many improvements have been implemented as a result. Changes include measures to provide additional protection against vehicle

bombs, as well as additional protective measures against water- and land-based assaults. The industry has increased security patrols, augmented security forces,

added more security posts, increased vehicle standoff distances, tightened access

controls, and enhanced coordination with state and local law enforcement.

In April 2003, the NRC issued new security requirements that effectively revised

the agency’s ‘‘design basis threat,’’ which defines the characteristics of the threat

against which a plant must defend and is the foundation for the industry’s security

programs. Since then, the nuclear industry has been working in cooperation with

the NRC to resolve issues related to the new orders and in late April of this year,

every company that operates a nuclear power plant submitted revised security plans

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to the NRC. These plans determine how each plant will be able to meet the new

standards by the NRC-imposed deadline of October 29.

Regarding an issue that received a considerable amount of congressional concern,

the industry has worked with the NRC to develop a revised program to constantly

test the security at our facilities. This program includes ‘‘force-on-force’’ drills using

advanced equipment. Although the tests were suspended for several months after

Sept. 11, they are being conducted at plants throughout the nation. Every plant will

conduct NRC-evaluated force-on-force exercises at least once every 3 years, in addition to exercises conducted by energy companies on a more frequent basis.

It is highly unlikely that attackers could successfully breach security at a nuclear

power plant and produce a release of radiation that would endanger the residents

near the plant. NRC Chairman Nils Diaz on May 15 said that facilities that shield

reactor fuel the containment building, spent fuel pools or dry storage containers are

protected from scenarios as extreme as an aircraft crashing into a nuclear power

plant. ‘‘The NRC has conducted an extensive analysis of the potential vulnerability

of nuclear power plants to aircraft attacks,’’ Diaz said. ‘‘While the analysis is classified, the NRC remains convinced that nuclear power plants are the most heavily

protected civilian facilities in the United States.’’ Diaz noted that the possibility that

such an attack would result in a radiological release is low.

Even so, we recognize that the security programs at our nuclear power plants

must not be static. We are constantly reviewing and reevaluating our security programs. In that regard, the industry is ready to work with this subcommittee to help

you and the American public better understand our industry’s strong commitment

to security and protecting public safety.

Mr. Chairman, the nuclear energy industry is proud of our efforts in security and

emergency preparedness. We believe that no other industry can match or even approach the level of sophistication and commitment that the nuclear industry has exhibited in operating safe and secure power plants.

We have enhanced security significantly since the Sept. 11 terrorist attacks and

we continue to work with Federal, state and local officials to ensure there is a seamless shield of protection at our facilities both for our workers and for residents who

live near our facilities. The industry also needs regulatory stability during this period of complying with the most recent NRC security requirements and thereafter.

The industry’s plans to meet the new NRC requirements include costly physical improvements that will bolster plant security. Constantly changing the security requirements could delay current improvements or could result in the improvements

being outdated even as they are being built.

NEI SUPPORTS NRC-ENDORSED LEGISLATIVE PROPOSALS AND URGES THE

SUBCOMMITTEE TO SUPPORT COMPREHENSIVE ENERGY LEGISLATION

The nuclear energy industry has followed the legislative proposals of the Senate

Environment and Public Works Committee closely over the past 2 years. The industry appreciates the cooperation that members and staff, on a bipartisan basis, have

provided.

In general, the industry has supported several NRC proposals on security, and we

appreciate the committee’s efforts in including those initiatives in legislation approved last year and in agreeing to include those proposals as part of the comprehensive energy bill conference report still be considered by the Senate. We were

disappointed that language was not agreed upon to resolve the issue regarding

when our security personnel may use deadly force. We continue to support efforts

to assure that they can use deadly force under appropriate circumstances. Although

the industry still has concerns regarding the proposals in the energy bill conference

report, it supports passage of the legislation, along with those proposals included

in a broad energy package for America.

Mr. Chairman, the nuclear energy industry has responded to many of the concerns that the full committee voiced regarding security at our plants over the past

2 years. The NRC has created a new security division. The industry’s security is

being tested with force-on-force drills on a more frequent basis. The design basis

threat has been increased to reflect today’s potential security threats after the NRC

conducted a review of the requirements with other Federal agencies. Our emergency

response plans, already the gold standard for emergency planning, have been improved.

The industry remains hopeful that an energy bill, including nuclear security provisions, can be passed this year. Yet, we urge this subcommittee and the full committee to consider that this industry has maintained its long-standing commitment

to security, is making the changes required to defend against new threats and is

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re-examining its emergency preparedness programs to ensure that our facilities continue to be the most secure in the nation.

By October 29, we will have spent approximately $1 billion industry wide on security enhancements, working with the NRC and Department of Homeland Security.

The industry will continue its long-standing practice of re-examining security based

on emerging global events. We take that initiative as an industry and we must do

so in a climate of regulatory stability and certainty so that there is time to comply

with the new requirements imposed by the NRC and bring stability to the programs

that make America’s nuclear power plants the most secure industrial facilities in

the country.

CONCLUSION

America’s 103 nuclear power plants comprise a critical element of our energy portfolio. Nuclear power is vital not only to our nation’s energy security and economic

future but also to our environmental and clean air goals. The industry continues to

operate nuclear plants safely and efficiently. During the past decade, performance

and safety have been consistently at, or near, record levels. In addition, nuclear

power plants also are the most secure industrial facilities in the country.

The nuclear industry has significantly increased the amount of electricity that it

generates over the past two decades. But for the nuclear industry to continue generating three-quarters of our nation’s emission-free electricity, new nuclear plants

must be built. The industry has made great strides toward its goal of constructing

new nuclear plants and is committed to achieving this objective in the near term.

The NRC plays an important role in the nuclear energy sector. Achieving the goal

of new plant construction depends on a stable regulatory environment, one that

assures the safe operation of our plants. The NRC has made significant progress toward this end, yet more must be done. The NRC must continue to modernize its

regulatory environment to incorporate safety-focused principles. For the nuclear industry to continue to play an important role in our nation’s energy and environmental future, the NRC must be more effective and more efficient.

RESPONSES BY MARVIN FERTEL TO ADDITIONAL QUESTIONS FROM SENATOR INHOFE

Question 1. In your opinion, with the resident inspectors, is it necessary today to

continue having four NRC regions as well?

Response. We believe it is likely that the NRC could gain additional efficiencies

and effectiveness by further consolidation of its regional offices. As noted in my testimony, the NRC’s budget and overall staffing levels have increased significantly

over the past several years. According to its budget request for fiscal year 2000, the

NRC was to have 2,810 full time equivalent employees. But, by fiscal year 2005,

that number had increased to 3,109. Most of this increase reflects efforts to address

uprates, relicensing, new plant licensing, emergency preparedness and security.

While these are areas the industry recognizes as priority activities requiring NRC

resources, we believe the NRC has other areas where resource commitments could

be decreased or reassigned to address the priority areas and where efficiencies could

be gained-both improving NRC regulatory effectiveness and also decreasing licensee

costs. Specifically, recognizing the extremely high level of plant performance in the

industry, the more effective and safety-focused reactor oversight process, and the

changes in ownership and management of operating plants in the industry, the NRC

should be able to decrease resources committed to inspections and should seriously

consider further consolidation of their regional offices.

With specific regard to the regional offices, a key factor that should be considered

in evaluating the structure of the regional offices is the amount of industry consolidation that has taken place. When the regional offices were created, all of the operating units owned by an individual utility were located in the same NRC region and

one regional office would interface with the utility management team. Today, we

have individual utilities that own operating units in multiple regions, creating a situation where multiple regions are interacting with one utility management group.

We don’t believe this is necessarily the most effective way for the NRC to oversee

company performance, or for licensees to effectively interact with the regulator.

The industry also believes that the NRC could become more efficient by eliminating, or consolidating its regional offices. Each regional office has approximately

65 positions that do not have any direct inspection responsibility. The functions of

these individuals include management positions, administrative staff, public affairs

offices, travel offices, etc. There are also considerable facility-related costs.

In assessing its overall organizational staffing levels, the NRC should also avoid

creating large new permanent staff positions to handle short-term resource requireVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00224 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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ments. A specific example where this appears to be the case is in the area of security. With the changes to the regulatory requirements and to licensee plans and

strategies, the NRC has faced a ‘‘bow-wave’’ of activities over the past 3 years. However, going forward, the industry, not the NRC, has the bulk of implementation requirements. NRC should assess their staffing needs, everywhere and particularly in

the area of security, based upon a longer-term perspective of fulfilling their responsibilities and be careful to not establish large organizations that do not have relevant longer-term activities to fulfill.

In summary, the industry believes that the changing regulatory environment as

well as the changing nature of the industry has provided opportunities for the NRC

to review and evaluate its staffing levels and that the NRC has significant opportunities to increase both efficiency and effectiveness by both structural organizational

changes and more focused staff assignments. Consolidating its regional offices is but

one example of how legitimate increases in staffing levels in some areas could be

offset by decreases elsewhere without diminishing NRC’s effectiveness.

Question 2. Has NEI noticed a difference in the way the NRC conducts their enforcement actions since they have been moving toward risk-based decisionmaking?

Response. The enforcement program changes that were put in place coincident

with the revised Reactor Oversight Process have resulted in enforcement actions

that are much more closely tied to the significance of the performance issue. This

is a much improved process and has led to a better safety focus on performance

issues. However, further enhancements can be made.

In our view, there remain compliance requirements that have little or no safety

significance. For example, over 98 percent of the NRC’s inspection findings are determined to have little or no safety significance. The new enforcement policy appropriately defers these issues to licensee management for resolution as part of the

plant’s corrective action program, with follow-up from the resident inspector to ensure the issues are properly addressed. In many cases, these issues had already

been identified by the licensee. What this result says is that significant NRC inspection resources are being committed to issues of low, or no safety significance.

While the output from the Reactor Oversight Process is successfully focusing NRC

resources on safety-related issues, the fact that 98 percent of the inspection findings

have little or no safety significance, is indictive of a situation where the inspectors

are inspecting existing codified regulations which are not safety focused. In essence,

while the oversight process and its enforcement process have been made safety-focused, many of the existing codified regulations are not safety-focused. This is a primary area where the NRC’s inspection/enforcement requirements can be more riskinformed.

While the Commission is committed to addressing this issue, and while some

progress is being made in revising outdated and ineffective regulatory requirements,

the pace of change is far too slow to provide any significant improvement in the

foreseeable future. The Commission should set a goal of eliminating or modifying

those regulations that have little safety value within 5 years. In an attempt to facilitate such changes, the industry has provided the NRC with a white paper describing

a new, risk-informed regulatory framework, which includes sample regulation language that is risk-informed and performance-based where appropriate. The new

framework is technology neutral and could be applied to both current and future

plants.

RESPONSE BY MARVIN FERTEL TO AN ADDITIONAL QUESTION FROM

SENATOR JEFFORDS

Question. Mr. Fertel, in light of the consolidation in the nuclear industry you describe in your testimony, do you think the NRC should be doing more to track

wastes and fuels?

Response. The industry fully recognizes and accepts its responsibility to safely

and securely control and manage fresh nuclear fuel and all byproducts, including

spent nuclear fuel generated at the plants. We find the recent, though very limited,

incidents unacceptable from a credibility and public confidence perspective, though

they posed no threat to public health and safety.

The NRC currently has strict regulatory requirements regarding the control and

recordkeeping associated with special nuclear material, including new fuel, spent

nuclear fuel, high-level wastes and low-level wastes. To meet these requirements,

every commercial nuclear power plant utilizes computerized systems to track the

movements and storage locations of all nuclear materials. Every delivery to the site

and transports away from the site are tracked and recorded.

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The industry recognizes that there have been three recent problems identified

that raise questions regarding the effectiveness of the current regulations. However,

events contributing to the recently identified concerns occurred decades ago. At the

Vermont Yankee plant, the used fuel pieces that could not be properly accounted

were subsequently found at the plant in the used fuel storage pool. In the Millstone

event, fuel rods that were also unaccounted for were determined by the NRC to not

be a public safety hazard and that they were most likely disposed of in a low-level

waste facility and thus properly sequestered away from the public. The most recent

problem is expected to result in finding the material in the pool.

The industry and the NRC have proactively investigated these circumstances to

develop lessons learned and initiate corrective actions. In addition, the NRC has informed all licensees about these circumstances and expects the licensees to review

the effectiveness of their individual material control and accounting programs in

order to avoid similar problems at their facilities.

The consolidation of the industry, as described in my testimony, has little or no

impact upon the NRC’s ability to control and track nuclear materials at the sites

owned by those companies. Regardless of the owner, the requirements are clear and

the recordkeeping should be accurate. Also, with respect to consolidation, a valid argument could be made, for example, that the consolidation and thus shared management of several facilities will result in better and more uniform management practices.

In our view, these few incidents, while undesirable, did not pose a threat to health

and safety. On the positive side, they demonstrated the value of the inspection and

reporting requirements imposed by the NRC, illustrated the transparency of the

NRC process to the public, resulted in a very systematic resolution of the identified

problem, and provided lessons-learned to the NRC and he industry. As such, we believe the existing regulatory requirements are both adequate and effective. The

strength of these tracking systems and the utilities commitment to safety have resulted in what in an excellent overall record of controlling and tracking nuclear material by the NRC.

RESPONSES BY MARVIN FERTEL TO ADDITIONAL QUESTIONS FROM

SENATOR VOINOVICH

Question 1a. What are the human capital needs in the nuclear industry?

Response. The nuclear energy industry recognizes that it faces a human resource

challenge. It has an aging work force, which will require careful evaluation and

comprehensive planning in order for the industry to meet its human resources needs

over the next decade.

In 2003, NEI completed a comprehensive staffing study which indicated that nearly 28 percent of workers at generating stations and 35 percent of workers at key

suppliers will be eligible to retire within the next 5 years. (A copy of the study is

attached.) Further, significant skills shortages were identified in the 2001 NEI

Staffing Study. Absent some proactive industry and government initiatives, we

project that demand will exceed supply for nuclear engineers by 56 percent and

health physicists by 63 percent. It is important to keep in mind that all of these

assessments were based on the continued operation of the current fleet and have

not considered the work force demands for the construction and operation of new

plants, which could add thousands to the work force need in the latter part of the

next decade.

We are particularly concerned that there are very few education and training programs available at universities or community colleges for health physicists, radiation protection technicians, chemistry technicians, instrumentation and control

technicians (analogue) and non-destructive examination professionals.

Question 1b. What can be done to help human capital development in the industry?

Response. As result of our concerns in this area, NEI recommends continued support for University Programs in the Department of Energy’s Office of Nuclear Energy at the $27.5 million level and expansion of these programs to include funding

support for Health Physics programs. In addition, support for the development of

e-learning and community college initiatives in a variety of fields including radiation protection, instrumentation and control, and non-destructive examination

would greatly assist the industry to successfully tackle its work force challenges. In

this area, NEI urges support for the Department of Labor’s High Growth Job Training Initiative at the administration requested funding level of $250 million specifically for community college programs. Finally, NEI recommends that all of the agencies whose mandates encompass supporting education and training in this area, inVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00226 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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cluding the National Science Foundation, the Departments of Energy, Labor and

Education work collaboratively with the industry in new program design and development to ensure that appropriate, seamless and adequate programs are supported

and to avoid needless duplication of programs.

In addition to the broad-based industry activities, the Federal Government can

play a large role in assisting the industry and the American worker in gaining the

education and job skills necessary for employment in the nuclear industry. Furthermore, programs that build a competency in this area will also help ensure a pool

of qualified candidates with nuclear and radiological skills for the Departments of

Energy, Defense and Homeland Security, the Nuclear Regulatory Commission and

the national laboratory system.

Question 2. Do you agree or disagree with GAO’s recommendation that the NRC

should develop a methodology to assess early indications of deteriorating safety at

nuclear power plants? Why? What do you think the NRC should do to address safety

culture at nuclear plants around the country?

Response. The NRC certainly has the responsibility to assess indications of deteriorating safety at nuclear plants and to take appropriate regulatory actions. They

had that responsibility prior to Davis-Besse and the responsibility remains.

There is, however, single metric the NRC can use to effectively evaluate safety

culture. Therefore, when the GAO says the NRC should develop a ‘‘methodology’’ to

assess safety culture, I believe that the best manner for the NRC to achieve that

goal is for the NRC to ensure that it is effectively integrating safety culture insights

from all its activities. My following comments explain how I would implement such

a ‘‘methodology’’.

The NRC has been very systematic in reviewing the Davis-Besse event to identify

improvements in their assessment process. A lessons-learned task force (LLTF) was

established by the NRC to develop recommendations from the Davis-Besse event to

improve the NRC’s regulatory process. I believe the actions taken are consistent

with the industry’s view of the event.

While the creation and maintenance of the desired safety culture is the responsibility of corporate and plant management, the NRC does have an important role to

ensure that the desired safety culture exists. In 1989 the Commission issued a policy statement that outlined the expectation that the management of a nuclear plant

has the duty and obligation to foster the development of a ‘‘safety culture’’ at each

facility and provide a professional working environment that assures safe operations.

The NRC currently has many tools to assure that result. As there are generally

two full time inspectors at every nuclear plant site, the NRC has a real-time view

of the performance of every nuclear plant. The NRC also performs inspections of

systems and components during operation and shutdown conditions. These inspections give the NRC the ability to make continuous observations of performance, including safety culture.

Following the Davis-Besse incident, the NRC through the LLTF, recognized several areas for improvement in observation training and questioning attitude of the

resident inspectors regarding the maintenance of a safety culture at the plant and

has improved its oversight by enhancing the recognition of safety culture concerns

by the resident inspectors.

The reactor oversight process (ROP), through the performance indicators and

cross-cutting issue inspections, provides a view of unit performance, material condition and culture at the plants. Complimentary to the ROP is the corrective action

program at every nuclear plant. Not only does the NRC have real time access to

the daily review of corrective action documents but they also perform periodic inspections of the performance indicators, corrective action programs and work activities. These inspections provide valuable insight into the way safety issues are identified, trended and resolved, all providing good indications of the safety culture at

the plants.

The NRC should use all the program reviews, inspections and direct oversight by

resident inspectors discussed above plus the allegation and employee concerns programs, which is a component of a safety conscious work environment, to review safety culture at nuclear plants.

In addition, the NRC has a memorandum of agreement with the Institute of Nuclear Power Operations (INPO) to allow them to place observers on the evaluation

teams that perform the every 2 year plant evaluations for the industry. These teams

specifically look at the safety culture of the plant and review the results of the evaluation directly with the company’s chief executive officer. INPO has increased its

focus on safety culture since the Davis-Besse incident.

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The strength of safety culture can best be determined by a combination of direct

contact with station personnel and management, reviewing results of plant performance, trending allegations resulting from the safety conscious work environment,

routine inspections, and inspections of the corrective action process. The onsite resident inspectors along with the various visiting inspectors provide continuous, as

well as, periodic sampling of the safety culture at a nuclear plant. The inspectors

observe behavior during routine operation, refueling outages and special evolutions.

They can determine, if properly trained, when there is a major shift in culture at

a plant. This concept was recently demonstrated by the identification of a problem

and the significant actions taken by the NRC at the Salem-Hope Creek nuclear

plants.

Taking into consideration the changes the NRC has made based upon their DavisBesse LLTF plus all the activities and opportunities to observe and evaluate safety

culture, the NRC currently has the ability to effectively assure that every site maintains a safety culture. As part of its ‘‘methodology’’, the NRC should continue to integrate, and look for ways to improve, the input from its systematic oversight, inspections and safety conscious work environment related allegations to gather the

complete picture of safety culture at a plant.

Question 3a. What has the industry learned from the Davis-Besse incident? What

changes have been made across the industry?

Response. The industry recognizes that the Davis Besse incident was the result

of a significant failure on the part of the company, the industry, as well as the NRC.

As such, it has taken many actions to not only identify lessons-learned but also to

assure that every plant has acted to implement changes and recommendations as

a result.

The industry participated on many of the teams that were sent to Davis-Besse

to help determine root cause and corrective actions. Due to this direct participation,

several changes have occurred throughout the industry. As discussed, subsequently

in this answer, INPO has been the major driver in changing its processes and in

driving change in the industry.

One of the major lessons-learned was a heightened awareness of plant material

condition and degradation mechanisms. To address this issue, senior industry leadership through NEI developed an initiative to address the material condition and

degradation at nuclear plants. This initiative is more fully explained in my written

testimony already submitted to the subcommittee. Because of this increased focus

on materials, the industry has taken a very aggressive stance on inspections and

repair/replacement of components susceptible to material degradation, e.g. steam

generators and reactor vessel heads.

Question 3b. Please detail the work that Nuclear Energy Institute (NEI) and the

Institute of Nuclear Power Operations (INPO) has done on safety culture and safety-conscious work environment.

Response. With respect to safety culture, NEI has played a role in activities relating to safety culture and safety conscious work environment (SCWE). NEI has sponsored forums and formed working groups to address safety culture and SCWE

issues. NEI has assisted in the development of guidelines for principles associated

with safety culture and guidelines for developing robust employee concerns programs which is an important aspect of SCWE. The latter guideline has been shared

on our public web site so that all nuclear related industries can share our collective

expertise and lessons learned.

Following the Davis-Besse event, major systematic changes were made to INPO’s

programs. From an industry perspective, the assessment and oversight of safety culture for the industry, falls directly within the domain of the INPO. INPO has significantly changed its oversight of nuclear plants, particularly in the area of safety

culture, as a result of the Davis-Besse incident.

INPO established a very aggressive internal program review related to safety culture following the Davis-Besse incident in the fall 2002. This review developed recommendations that were acted upon by the INPO executives resulting in comprehensive and broad-based corrective actions that touched every cornerstone and

technical employee. Many of the corrective actions were focused on the plant evaluation process and how INPO evaluates safety culture. Safety culture ‘‘touch points’’

were adopted from pre-evaluation analysis to preexit meeting to exit meeting with

the utility CEO. Safety culture is now discussed with each utility CEO as part of

the evaluation process.

INPO also conducted a series of workshops for the industry to cover the lessons

learned from Davis-Besse and INPO. These work shops were regional throughout

the United States and included participation by the Davis-Besse management team.

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Along with the internal review and workshops, INPO also issued a Significant Operating Experience Report (SOER) in November 2002 to be implemented by every

U.S. nuclear utility. The SOER contained three specific recommendations summarized as follows: (1) to discuss the Davis-Besse case study outline (provided with the

SOER) with all nuclear organization managers and supervisors. Continue this effort

periodically with all new managers and supervisors. Include a discussion of the

technical and non-technical contributors to the event; (2) to conduct a self-assessment to determine to what degree your organization has a healthy respect for nuclear safety and that nuclear safety is not compromised by production priorities. The

self-assessment should emphasize the leadership skills and approaches necessary to

achieve and maintain the proper focus on nuclear safety. The components of this

self-assessment should be included in the plants on-going self-assessment program;

and (3) to identify and document abnormal plant conditions or indications at your

station that cannot be readily explained. Pay particular attention to long-term unexplained conditions. Thoroughly investigate and evaluate each condition individually

and in an aggregate to determine the causes and potential consequences and to ensure timely and effective resolution.

INPO members were asked to provide a copy of their internal self-assessment required by the SOER to be reviewed by INPO mangers and executives. The aggregate

findings of the self-assessments were shared with the utility CEOs at the November

2003 CEO Conference. The discussion highlighted some of the industry’s safety culture best practices, including how some CEOs were personally communicating their

safety culture expectations.

In addition, INPO developed a principles document with the assistance of several

prominent current and retired nuclear industry executives and a smaller number of

culture experts. The document is titled, ‘‘Principles for a Strong Nuclear Safety Culture’’. (A copy is attached.)

The document was introduced at the November CEO Conference with the expectation that the CEOs will use the principles during discussions with utility senior

management and that each utility will incorporate the principles into their nuclear

program. As part of INPO’s systematic evaluations of individual plants, the implementation of the principles will be assessed.

Safety culture discussions have been incorporated into the appropriate leadership

courses and seminars offered through INPO. These seminars cover all levels of the

nuclear plant management structure. Safety culture will also continue to be a primary theme at the Annual INPO-CEO Conferences.

In conclusion, the lessons-learned from the Davis-Besse event have resulted in

major changes to almost all of the ongoing INPO programs, most prominently the

evaluations program and its leadership training programs. Of equal significance, the

importance of safety culture and its characteristics are now a fundamental theme

in all interactions with CEO’s, NEI, INPO and the leadership in the industry are

committed to prevent events like what occurred at Davis-Besse. The increased focus

on and to substantive programmatic changes made to address safety culture should

result in success on that commitment.

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STATEMENT OF DAVID LOCHBAUM, NUCLEAR SAFETY ENGINEER, ON BEHALF OF

UNION OF CONCERNED SCIENTISTS

On behalf of the Union of Concerned Scientists (UCS), it is my pleasure to appear

before this subcommittee. My name is David Lochbaum. After obtaining a degree

in nuclear engineering from The University of Tennessee in 1979, I spent more than

17 years in the nuclear industry, mostly at operating power reactors in Georgia,

Alabama, Mississippi, Kansas, New Jersey, Pennsylvania, New York, Ohio, and

Connecticut, before joining UCS in October 1996 as their nuclear safety engineer.

UCS, established in 1969 as a non-profit, public interest group, seeks to ensure that

people have clean air, energy and transportation, as well as food that are produced

in a safe and sustainable manner. UCS has monitored nuclear plant safety issues

for over 30 years.

LESSONS FROM THE PAST

Twenty five years ago this past March, the Three Mile Island Unit 2 reactor outside Harrisburg, Pennsylvania experienced the worst nuclear plant accident in U.S.

history. The 25th anniversary of that meltdown got considerable media attention.

One reporter asked me how the nuclear industry would be different today had the

Three Mile Island accident not happened. ‘‘There would be no difference,’’ I answered him, ‘‘because that accident was bound to happen—if not at Three Mile Island, then at some other reactor.’’ One-of-a-kind design flaws, isolated operator

training deficiencies, or unique equipment failures did not cause the accident. Degraded conditions prevalent at and tolerated on all reactor sites ultimately produced

a meltdown at one site—Three Mile Island. The many post-mortem inquiries into

that accident resulted in extensive changes in the organization and management of

the nuclear industry and its regulator, the Nuclear Regulatory Commission (NRC).

This history is relevant to today’s hearing because compelling evidence suggests

that extensive, degraded conditions at reactor sites are once again being tolerated.

The NRC’s response to these warning signs have amounted to little more than rearranging the deck chairs on the Titanic. Fortunately, there is still time for the NRC

to plot a different course so as to avoid the icebergs looming on the horizon.

WARNING SIGNS IN THE PRESENT

The Davis-Besse nuclear plant in Ohio recently restarted after being shut down

more than 2 years for repairs to emergency equipment. The NRC concluded that deteriorating conditions at Davis-Besse had, over a period of nearly 6 years, reduced

safety margins to the point where the reactor was within two to 13 months of having an accident like Three Mile Island. The NRC identified more than four-dozen

flaws in its regulatory oversight processes that allowed Davis-Besse to flirt with disaster. Many of those regulatory flaws remain uncorrected and are not even scheduled for correction.

Davis-Besse is not an isolated case. It is the twenty-eighth (28th) nuclear power

reactor to be shut down for a year or longer for safety repairs since September 1984.

In fact, there has not been a single minute in the past two decades without at least

one reactor mired in a year-plus outage.

A year-plus outage adversely affects the reliability of the electrical power grid. It

adversely affects the costs paid by ratepayers for electricity and the returns received

by stockholders. It adversely affects safety levels exposing workers and the public

to undue hazards. Twenty-eight year-plus outages in 20 years is an extremely poor

report card for both the nuclear industry and its regulator. Nuclear safety problems

must be found and fixed before they grow to epidemic proportions.

The NRC’s report cards from internal and external auditors are equally bad, especially since so many of yesterday’s problems still factor into today’s problems. Very

little is getting fixed. A review of reports issued by NRC Lessons Learned Task

Forces, the NRC Office of the Inspector General (OIG), and the U.S. General Accounting Office (GAO) over the past 8 years shows the same regulatory problems

contributing again and again to unacceptable safety levels. Examples of these recurring, uncorrected findings are:

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The NRC attempted to remedy the shortcomings identified by its auditors. However, these efforts failed to achieve the necessary outcome of preventing recurrence.

The NRC’s current regulatory processes rated Davis-Besse in 2002 as one of the best

performing reactors in the U.S.—it now appears that Davis-Besse was the worst

performer. Obviously, the NRC failed to correct enough of its many shortcomings.

If the agency corrected its regulatory impairments, it would be able to detect declining safety levels sooner and intervene long before year-plus outages are needed to

restore the necessary safety margins.

ROADBLOCKS TO NRC REFORMS

The NRC has many talented and capable employees committed to the agency’s

vital mission of protecting public health and safety. But as NASA learned with the

Challenger tragedy and re-learned with the Columbia tragedy, technologies where

risk is dominated by high-consequence, low-probability events require much more

than the commitment of talented, capable workers. They require an unrelenting, uncompromising approach to safety.

The NRC strives to provide that level of oversight, but falls short too often as

demonstrated by the 28 year-plus reactor outages in the past 20 years. The agency’s

efforts are stymied by its hiring and promotion policies. Very few of the NRC’s senior technical managers are new to the agency. The majority worked their way up

through the ranks. Consequently, NRC’s managers come from the same mold and

have the same habits. Retirements and reorganizations at NRC merely put new

faces on the same management style. Reform efforts fail because merely re-packaging and re-applying that management style cannot yield substantive changes.

The aforementioned 28 reactors that endured lengthy outages shared the common

trait of bringing in new—really new—management to direct the restart and recovery efforts. New management is the fastest way to meaningful and lasting reforms.

New managers can assess policies and practices unencumbered by ‘‘traditions.’’ New

managers can stake out a new path with implicitly conceding it led troops down old

paths. New management is a tried and true method for bringing about needed reforms in a timely manner. Yet it is an untried method at NRC, which desperately

needs reform at any pace.

UCS is not advocating a massive infusion of new managers at NRC. This would

be the fastest and surest way to the much-needed reforms, but it would be unfair

to many fine public servants who have devoted many years of hard work on nuclear

safety issues. Instead, we urge Congress to work with the NRC to revamp the agency’s hiring and promotion policies. Retirements and other voluntary departures

should provide opportunities for finding the most qualified replacements—not just

the most qualified replacements from within the NRC. The salaries and benefits for

NRC managers must be sufficient to attract and retain qualified candidates from

inside and outside the agency.

NUCLEAR CROSSROADS

The future of nuclear power in the United States depends on decisions made now.

The NRC’s regulatory impairments make nuclear power’s cost and risks higher than

is necessary. Left unchecked, the only question is whether economics or disaster will

bring down the curtain on nuclear power in America.

Whatever role nuclear power plays in our energy future, the NRC must become

an effective regulator. To hasten that transformation, the agency needs fresh perspectives from outside managers. One of the NRC’s strengths is its work force of

talented, capable, and dedicated employees. Properly led, they can make sure that

nuclear power’s costs are not too high or its safety levels too low.

The NRC is like NASA in that both agencies struggle with complex technologies

where risk is dominated by low probability, high consequence events. We hope NRC

is unlike NASA in not needing a tragic reminder to trigger the reform efforts that

are so desperately needed.

The time for NRC to reform is running out. The Three Mile Island meltdown and

other nuclear accidents at Chernobyl, Browns Ferry, St. Laurent, Fermi Unit 1, SL–

1, and Sodium Reactor Experiment occurred in the first year or two of the plant’s

lifetime—during the break-in phase. As indicated in the figure of what is called the

‘‘bathtub curve’’ due to its distinctive shape, risk of failure is highest early and late

in life. The 104 nuclear power reactors in the U.S. are heading toward, if not already within, the wear-out phase of life where risk once again rises. The NRC recurring, chronic problems must be fixed if the American public is to be adequately protected from the hazards of aging nuclear power plants.

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On behalf of UCS, I wish to thank the subcommittee for conducting this hearing

on nuclear plant security and for considering our views on the matter.

RESPONSES BY DAVID LOCHBAUM TO ADDITIONAL QUESTIONS FROM

SENATOR JEFFORDS

Question 1. How can NRC enhance its enforcement efforts? In your view, is the

issue a lack of personnel, or is additional training needed?

Response. The two major problems with the NRC’s enforcement efforts are timeliness and clarity of communications. Based on the NRC’s ability to meet schedule

goals in other areas—such as reviewing license amendment requests—we believe

that timeliness in enforcement actions can be achieved without additional staffing.

The clarity of NRC’s communications about enforcement actions can be improved by

a combination of training and process refinements.

The NRC’s enforcement actions on nuclear plant safety issues since spring of 2000

fall into two categories: willful violations and non-willful violations. Willful violations involve determinations by the NRC that plant personnel and/or management

knowingly and deliberately violated regulations. Such determinations can prompt

the NRC into enforcement actions such as fines against the individuals involved and

the company. Non-willful violations involve determinations by the NRC that companies unknowingly or inadvertently failed to comply with regulations. Both categories

suffer from lack of timely NRC decisions that harm plant owners and the public.

When the NRC ultimately determines that no violations occurred, clouds of suspicion hung longer than necessary over suspected individuals and companies. On

the other hand, when the NRC ultimately determines that violations occurred, individuals and companies remained at the controls of nuclear power plants unaccountable longer than necessary.

The fix is simple—the NRC must establish schedule goals for enforcement decisions and abide by them. The NRC established goals for decisions involving license

renewal requests and has met every single deadline to date despite some involving

intervenor action. Likewise, the NRC established goals for decisions involving other

licensing requests by plant owners and it meets those deadlines over 95 percent of

the time. By applying this proven management control to its enforcement decisions,

the NRC should be able to achieve the similar on-time performance.

Regarding clarity of communications about enforcement actions, I began engaging

the NRC in 1997 in a continuing series of discussions and correspondence about inconsistent enforcement actions. Many of those discussions occurred during public

meetings conducted by NRC where representatives of the Nuclear Energy Institute

(NEI), the nuclear industry’s trade group, expressed similar comments about the

vagueness of NRC’s communications. By procedure, the NRC’s communications

about enforcement actions use templates where blanks for specific information (i.e.,

who, when, where) are filled in. This ‘boilerplate’ approach to communications forcefits varying reasons into the same messages. When queried by me or NEI, the NRC

promptly reveals the true reasons why enforcement actions were or were not taken.

Obviously, the true reasons had not been withheld for privacy or legal reasons or

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the NRC could not have divulged them so freely during public meetings and in public correspondence.

Again, the fix is simple—the NRC must publicly divulge the true reasons for its

enforcement decisions. The current procedure that makes the NRC issue trite communications must be revised. Training on the revised procedure should be given to

NRC staffers.

Question 2. Nuclear plants that are seeking license renewal may not always conform to current safety standards, but to a number of regulations dating back 40

years with exemptions, deviations, and waivers granted along the way. While each

individual exemption or waiver may be justified and not reducing safety margins,

the cumulative effective of so many exceptions can adversely affect safety. What

should NRC be doing to properly manage the risk at aging reactors? Is having all

plants meet current standards the appropriate solution?

Response. Having all nuclear plants conform to current standards before being

granted permission to operate for up to 20 additional years would solve the problem.

But that solution poses an undue burden on plant owners, their ratepayers and

stockholders. Therefore, UCS advocates that the NRC adopt a more practical and

reasonable solution.

The NRC’s license renewal process assumes that nuclear power plants have adequate safety margins today and focuses the license renewal review efforts on aging

mechanisms with the potential for eroding those safety margins. UCS feels strongly

that this license renewal process must also include the NRC’s verification that today’s safety margins are indeed adequate.

The adequacy of safety margins is established by the NRC’s regulations. UCS is

not aware of a single U.S. nuclear power plant that meets today’s regulations. Instead, U.S. nuclear power plants are supposed to meet (a) the regulations in effect

when the NRC initially licensed them to operate, and (b) regulations subsequently

adopted by the NRC that the agency specifically applied to existing plants (otherwise, the new regulations only applied to reactors licensed thereafter by the NRC).

In addition, the NRC approved literally thousands of waivers, deviations, and exemptions to the regulations.

A prime purpose of the NRC’s reactor oversight process is to determine if the reactors meet their applicable regulations (not today’s regulations, but the hodge-podge

of old regulations, new regulations, and hundreds of approved waivers, deviations,

and exemptions).

Collectively, the NRC’s reactor oversight process and its license renewal process

seek to assure that a reactor has the safety margins provided by applicable regulations and that aging of structures and equipment throughout two more decades of

operation will not erode those safety margins. The vital missing link is a verification

that the reactor’s safety margins provide the public with protection comparable to

that afforded by today’s regulations.

Before the NRC grants a license renewal, the NRC should verify the adequacy of

today’s safety margins by formally reviewing the regulations applicable to a reactor

and all the approved waivers, deviations, and exemptions from those applicable regulations against the agency’s current regulations. [NOTE: Wherever possible, the

NRC’s review should be streamlined by limiting its scope to only a comparison of

regulations having a safety nexus. For example, regulations involving merely the

frequency and content of reports to be submitted to the NRC by licensees could be

excluded.]

UCS believes that it is necessary, practical, and prudent for the NRC to verify

the adequacy of today’s safety margins before granting a 20-year extension to the

original 40-year license. After all, an option to extending the life of the 40-year old

reactor would be to construct a brand new reactor at the same site to use the same

transmission lines and infrastructure. There is no question that a new reactor would

have to meet today’s regulations and the safety margins they require. Prudent protection of public health dictates there should be no unanswered questions about

whether ancient reactors have comparable safety margins.

STATEMENT OF MARILYN KRAY, VICE PRESIDENT FOR PROJECT DEVELOPMENT,

EXELON GENERATION, ON BEHALF OF NUSTART ENERGY DEVELOPMENT LLC

Chairman Voinovich, Senator Carper, and Members of the Subcommittee:

I am Marilyn Kray, Vice President of Project Development for Exelon Nuclear, a

subsidiary of Exelon Corporation. I am appearing today in my capacity as the lead

representative of NuStart Energy Development, a recently formed consortium of

power companies and reactor vendors. Thank you for the opportunity to appear before you today.

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1 Calculated by the Nuclear Energy Institute using regional fuel emission rates from EPA

CEMS data and individual plant generation data from the Energy Information Administration.

Last updated September 2003. 2 U.S. DOE/Nuclear Power Industry, Strategic Plan for Light Water Reactors Research and

Development, First Edition, February 2004.

Congress has an important role in providing oversight of the Nuclear Regulatory

Commission, and this oversight will be particularly important as the Commission

proceeds with a new process for licensing nuclear power plants. My testimony today

will focus on the benefits of nuclear power, the Department of Energy’s Nuclear

Power 2010 Initiative, the formation of NuStart Energy Development, and the prerequisites for the construction of new nuclear power plants.

BENEFITS OF NUCLEAR POWER

Nuclear power is a safe, clean, reliable and economic method of generating electricity. Indeed, the nation’s 103 operating reactors provided over 20 percent of the

electricity generated in the United States last year.

Nuclear plants are safe, both from an operational and a homeland security perspective. Despite concerns expressed by some that nuclear plants would become less

safe as plant operators focused improving operational efficiency, data has shown

that plant performance and safety go hand-in-hand. The best performing plants in

terms of capacity factor also have the fewest safety-related incidents. Operational

excellence not only increases plant output, it also enhances safety. In fact, commercial nuclear plants have an exceptional record of worker safety.

From a security perspective, independent reviews of commercial nuclear power

plants have shown these plants to be perhaps the most secure industrial facilities

in the United States. The same plant features that are used to isolate the public

from radiation also serve to fortify the plants against outside intruders. Nuclear security, already robust prior to September 11, 2001, has been significantly enhanced

since that time. Plants have made significant capital investments to upgrade security and have roughly doubled the size of their security forces.

Nuclear power is also one of the cleanest sources of electric generation. Since nuclear power is not based on combustion, nuclear plants emit none of the air pollutants associated with climate change, acid rain, or smog. Since the electricity produced by nuclear plants displaces electricity that would otherwise be supplied by

fossil-fired power plants, it is estimated that U.S. nuclear plants avoided 3.38 million short tons of sulfur dioxide, 1.39 million short tons of nitrogen oxides, and 189.5

million metric tons of carbon dioxide during 2002.1

Nuclear plants do not discharge pollutants into the water, though they do discharge warm water into the environment. These discharges are carefully regulated

and monitored to protect aquatic life. And while nuclear plants do generate radioactive waste materials, these wastes are carefully managed and are isolated from

the environment.

From a reliability perspective, nuclear plants are an ideal source of baseload generation. Demand for electricity is expected to grow by 50 percent by 2025, according

to the Department of Energy. Nuclear power will be necessary to ensure that the

U.S. maintains a balanced, diverse and reliable electricity supply while protecting

the environment.

In 2003, the U.S. reactor fleet produced 766.5 billion kWh of electricity at an average capacity factor of nearly 90 percent. In part, this is due to the inherent design

philosophy to run for extended periods of time between scheduled refueling outages.

Most nuclear plants now run on a 2-year cycle between refueling outages. Because

of these long run cycles, nuclear plants are not subject to fuel delivery issues that

can affect some generation sources. In addition, unlike other generation sources, nuclear plants are generally not affected by weather conditions.

Finally, nuclear generation has proven to be an extremely cost competitive form

of electricity generation. For 2002, nuclear plant production costs, which encompass

fuel and operation and maintenance costs, were 1.71 cents/kWh. These productions

costs were lower than comparable costs for coal, which were 1.85 cents/kWh, and

significantly lower than natural gas and oil, whose production costs were 4.06 cents/

kWh and 4.41 cents/kWh, respectively.2

DOE’S NUCLEAR POWER 2010 INITIATIVE

Despite the nuclear industry’s impressive performance in recent years, companies

have been reluctant to consider investing in new nuclear plants. Uncertainty regarding the NRC’s new licensing process, new advanced reactor designs, the future regulatory environment, the existence of a repository for used nuclear fuel, and the fuVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00314 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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ture of electricity markets in the U.S. all represent risks that give investors pause

when it comes to nuclear power.

Recognizing the valuable role of nuclear energy in meeting the nation’s current

and future energy needs, Energy Secretary Spencer Abraham unveiled the Department of Energy’s Nuclear Power 2010 initiative in February of 2002. The program

seeks to partner with the private sector to achieve three goals: (1) to evaluate potential sites to host new reactors; (2) to demonstrate the Nuclear Regulatory Commission’s licensing process for new plants; and (3) to conduct research to promote safer

and more efficient nuclear plant technologies in the United States.

In June 2002, the Department awarded grants to Dominion, Entergy, and Exelon

in support of their proposals to develop and submit Early Site Permit applications

to the Nuclear Regulatory Commission. Each company submitted their application

to the NRC for review in the Fall of 2003. Final NRC action on the applications

is expected in 2006.

In November 2003, the Department issued a formal solicitation inviting cooperative agreement applications to demonstrate the NRC’s combined operating license

(COL) process. The solicitation encouraged a consortium approach among power

generation companies, plant owners and operators, reactor vendors, architect engineers and construction companies and proposed a 50 percent minimum industry cost

share over the life of the project.

In 1989, the NRC introduced 10 CFR Part 52, an improved and more efficient licensing process for new nuclear plants. However, this process has not been demonstrated, and the prolonged regulatory interactions on previously licensed plants

only serves to increase the financial community’s uneasiness over the NRC’s licensing process. This is why DOE’s Nuclear Power 2010 Initiative is essential.

The Part 52 process has three subparts: Early Site Permits, Design Certification,

and Combined Construction Permits and Operating Licenses. These subparts have

common concepts and common principles. It is important for these common concepts

and principles to be maintained during the reviews, issuance and implementation

of the Part 52 subparts. For example, one of these common concepts, the Inspections, Tests, Analyses, and Acceptance Criteria (ITAAC), is applicable in design certification and in the combined license element. The principles for the design certification ITAAC are the same as for the combined license ITAAC, though the regulatory reviews may be years apart. If these concepts and principles—which include

implementation—are not maintained, the reviews will become prolonged. Every effort should be made to maintain personnel stability within a project for the duration

of the combined license review and plant construction.

The majority of the existing 103 reactors in the U.S. are unique design. Standardization was not a consideration in the early plants, where incorporating lessons

learned as previous plants were built took priority. In the 1990’s, the industry made

a commitment to standardize new plants to the fullest extent possible. As a result,

once the first plant receives its license, subsequent licensing activities for future

plants of the same design should be easier and take less time. The only issues to

review would be associated with site-specific differences and design compatibility

with the site.

The industry commends the NRC for moving forward with improvements to 10

CFR Part 2, Rules of Practice for Domestic Licensing Proceedings and Issuance of

Orders. These improvements will make the licensing process more objective and efficient, while maintaining full public involvement on issues that are relevant and germane to the proceedings. When coupled with the new Part 52 process, these regulatory and process improvements should assure that a combined construction and

operating license for a completely new design can be issued in 24 months of the application being filed. For subsequent application of the same design, the licensing

review and process should take no more than 18 months. This timeframe assumes

that that all the elements of the Part 52 process are being used (an approved early

site permit, and a certified design) and that there is no need for a formal adjudicatory hearing.

In response to the COL solicitation, three consortia applied for assistance from

DOE. The three consortia include a team composed of Dominion, AECL of Canada,

Bechtel and Hitachi; a team composed of the Tennessee Valley Authority, General

Electric, Bechtel and USEC; and NuStart Energy Development, which includes Constellation Energy, Duke Energy, EDF International North America, Entergy Corporation, Exelon Corporation, Southern Company and the Tennessee Valley Authority, as well as General Electric and Westinghouse.

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NUSTART ENERGY DEVELOPMENT

As noted above, NuStart includes nine participating companies. Of these companies, TVA is a limited participant, providing in-kind services only, while GE and

Westinghouse serve as subcontractors to the formal LLC. The total cost of the project is just over $800 million over a 7-year period. We are

requesting that DOE provide one-half the cost. Each of the six power companies will

provide $1 million cash annually for 5 years from 2004 through 2008, and reduced

amounts in 2009 and 2010. In addition, each of the six power companies will provide

inkind services throughout the 7-year duration of the project, for a total project

share of $6.2 million of cash and in-kind services from each of the six power companies. The reactor vendors will provide significantly greater funding—Westinghouse

approximately $208.3 million and GE approximately $157.2 million—over the course

of the project.

The NuStart Energy Development proposal is divided into three overlapping

phases: Planning, Evaluation and Licensing. The significant activities of each phase

are outlined below:

Planning Phase (2004–2005)

• Finalize consortium organization • Finalize contractual relationships • Prepare for design selection • Identify candidate sites

• Develop general licensing strategy

Evaluation Phase (2004–2005)

• Develop design selection criteria

• Select site

• Finalize licensing strategy

• Reevaluate economic evaluation for nuclear investments

Licensing Phase (2004–2010)

• Receive from NRC Design Certification for selected designs

• Westinghouse AP1000

• General Electric ESBWR

• Issue Request for Proposal to reactor vendors

• Select reactor design for submittal

• Submit COL application to NRC

• COL granted by NRC

PREREQUISITES TO NEW PLANT CONSTRUCTION

As defined by DOE, the scope of the NuStart Energy Development proposal is limited to the pursuit of a combined operating license. The consortium has made no

commitment beyond obtaining the operating license. While the consortium, or members of the consortium, would be able to use the COL to pursue construction of a

new plant, there is no commitment to build a plant once the COL is obtained.

Successful completion of the proposed COL project will address two of the main

areas of risk associated with new nuclear investments—lack of regulatory predictability and lack of completed designs to allow for accurate estimates of construction

and operation cost. The industry expects to develop significant information regarding cost estimates of new plant construction and operation through the COL process.

However, the issue of regulatory uncertainty remains a concern for those companies

interested in pursuing new plant opportunities. The financial community has stated

that it considers regulatory predictability and stability to be prerequisites to obtaining funding for a new nuclear power plant, and continued Congressional attention

toward future regulatory stability and the licensing of new plants will help build

confidence among investors and within the industry.

In addition to mitigating the risks of regulatory predictability and design completion, other pre-conditions are necessary before new nuclear investments can be

made:

(1) Congress and the Administration must fully fund the Nuclear Power 2010

program at $80 million for fiscal year 2005, and DOE must commit to fund the

program at levels that will sustain it to meet the above mentioned targets by

2010.

(2) The industry must continue to ensure outstanding performance of the current fleet of operating reactors. Recent trends indicate that the industry is succeeding: performance and safety indicators are at record levels. For instance,

nuclear plant capacity factors averaged 90 percent, the highest of any source

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of electricity generation. Public perception of new nuclear power is based, in

part, on the performance of the current fleet of operating plants. Thus, continued solid industry performance is essential to maintain the confidence of the

regulators, the financial community and the general public.

(3) Congress and the Administration must continue to support a clear path

forward to resolve the issue of spent fuel disposal. Particular milestones that

will signal progress include adequate funding levels for the Yucca Mountain

program, the submittal of the Yucca Mountain license application by DOE to

the NRC—which is scheduled to occur in December 2004, and the NRC’s timely

review of the application.

(4) Power companies must have confidence that open and competitive wholesale markets for electricity exist. Many power companies are operating in a deregulated environment. Although they no longer need to demonstrate that their

investment in new generation is ‘‘used and useful,’’ these companies must have

confidence that there will be a consistent market for the power. The ideal solution to this issue is to have a power purchase agreement in place for the sale

of the proposed project’s output, at least for the early years of production. In

addition to alleviating the uncertainty regarding the need for the additional

power, the power purchase agreement would remove the risk associated with

price fluctuations by establishing a price schedule for the output. The power

purchase model is used extensively in the wind generation business. In the absence of a power purchase agreement, very high confidence in the projections

for demand growth and market prices will be needed for companies to consider

investing in new nuclear plants.

(5) Congress and the Administration must support incentives to alleviate concerns by the financial community concerning the risks associated with being a

‘‘first mover’’ in the construction of new plants. These incentives are particularly

important given the significant capital investment required for nuclear construction. A number of financial incentives have been identified by the industry

New Plant Task Force in conjunction with the Department of Energy. Some of

the incentives being considered include:

• Insurance against substantial cost increases or cancellation resulting

from the regulatory process

• Low interest government loans or loan guarantees

• Seven year depreciation schedule

• Investment tax credits

• Production tax credits

• Protection against electricity price fluctuations, especially for the early

years of plant operation

A successful and sustainable program to build new nuclear plants in the United

States does not require all of the above incentives. Various combinations or even a

portfolio approach which caps the value of the incentive could be used.

It is important to emphasize that the industry is not seeking a totally risk-free

business environment. Rather, it is seeking government assistance to contain those

risks that are beyond the private sector’s control. The goal is to ensure that the level

of risk associated with the next nuclear plants built in the United States generally

approaches what the electricity industry would consider normal for a commercial

project.

There is ample precedent in other areas for this type of government support for

critical infrastructure. The Transportation Department’s Transportation Infrastructure Finance and Innovation Act (TIFIA) is just one example. The TIFIA was developed to address a similar scenario where major investments in bridges and tunnels

were needed for the common public benefit, but the construction projects were not

attractive enough for individual entities to pursue. The incentives within the TIFIA

framework were developed to stimulate private capital investments using limited

government funds.

SUMMARY

Nuclear power will play a critical role in allowing the Nation to meet its future

energy needs while preserving a sound environment. Not only is nuclear power a

safe, reliable and economic source of electricity—allowing it to meet the nation’s future need for baseload power generation, it is also the only major emissions-free

source of generation currently in operation. While aggressive efforts must be made

to explore and expand other forms of environmentally responsible generation, including wind, solar, biomass, natural gas and clean coal, the U.S. must also take

steps today to ensure that the Nation will enjoy the benefits of a new generation

of nuclear plants in the future.

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Congress and the Administration should fully fund the Department of Energy’s

Nuclear Power 2010 Initiative, take steps to assure a stable regulatory environment,

continue to support work on the Yucca Mountain project, and provide financial incentives for the construction of the first series of new nuclear plants that are built.

RESPONSE BY MARILYN C. KRAY TO AN ADDITIONAL QUESTION FROM

SENATOR JEFFORDS

Question. Nuclear plants that are seeking license renewal may not always conform to current safety standards, but to a number of regulations dating back nearly

40 years with exemptions, deviations, and waivers granted along the way. While

each individual exemption or waiver may be justified and not reducing safety margins, the cumulative effect of so many exceptions can adversely affect safety. Is your

consortium concerned that the new reactor you are proposing will have to meet

standards that older plants do not, and does that present a competitive disadvantage?

Response. The most important aspect of this response is to clarify the

misperception that the existing nuclear plants have defaulted to a relaxed set of

safety standards. The suggestion is that this relaxed safety environment is the result of the vintage of the plants and the cumulative effect of the various exemptions

or waivers granted over the life of a plant.

The activities or tools in place to prevent this relaxed safety environment from

occurring can be categorized into three areas: continuous plant upgrades, reassessment against new regulations and maintenance of a ‘‘living’’ Probabilistic Risk Assessment (PRA).

With respect to the first area, the components and systems of the existing fleet

of plants are continuously tested and monitored to ensure that they are capable of

performing their required safety functions. Based on results of this continuous monitoring as well as pre-emptive actions by the plant owners, equipment and components are periodically upgraded or replaced. Examples of this range from the replacement of small devices such as piping, fittings and valve packings to the replacement of large components such as reactor vessel heads, steam generators and

turbine rotors. Current plant licensees have also installed new, more modern systems to replace or supplement original systems that may become obsolete or no

longer considered adequate. Examples of this include replacement of various analog

control systems with digital control systems. In addition to the owner-initiated upgrades, the Nuclear Regulatory Commission (NRC) also has required licensees to

correct design deficiencies that could impact plant safety.

Regarding the second category of new regulations, the NRC frequently updates its

regulations as a result of improvements to technology and operating experience.

When NRC requirements are changed, the NRC applies a rigorous evaluation standard to determine if the safety benefit of the new requirement justifies imposing the

changes on existing licensees. Examples where licensees have been required to

‘‘backfit’’ new requirements include the many hardware and program changes that

resulted from the accident at Three Mile Island as well as the security enhancement

changes resulting from the September 11 attacks. While later plants may need to

demonstrate compliance with certain requirements beyond those of the existing

plants, cost effective solutions have generally been established which are not onerous when incorporated into the initial plant design engineering prior to construction.

The last area that upholds the safety standards of existing plants is the maintenance of a PRA individualized for each plant. The PRA is a sophisticated computer

model of the entire plant that accounts for each of the risks and mitigators that contribute to potential core damage. The PRA calculates the probability of core damage

based on inputs from all of the modeled systems and components along with their

status. It is this important tool that allows the cumulative effects to be evaluated

including any plant equipment that might be degraded or out of service as a result

of a waiver, exemption or routine maintenance. This allows an ongoing and comprehensive assessment of plant risk to be made as opposed to a ‘‘compartmentalized’’

approach where each condition was evaluated exclusively.

Aside from attempting to characterize the vigilance associated with upholding the

safety standards of existing plants, it is necessary to discuss briefly the design philosophy of the next generation of Advanced Light Water Reactors. The nine power

companies comprising the NuStart consortium deliberately selected two reactor designs based on their optimization of passive safety systems. The two designs selected are the Westinghouse AP1000 and the General Electric ESBWR. The incorporation of ‘‘passive safety systems’’ refers to the design principle wherein laws of naVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00318 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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ture such as gravity feed, convective heat transfer and natural circulation are used

in place of complex systems comprised of numerous pumps, valves and actuation devices. This passive safety system approach translates into very tangible results. For

example, when comparing the AP1000 against current light water reactors, the

Westinghouse AP1000 requires:

• 50 percent fewer safety-related valves • 80 percent less safety-related piping • 35 percent fewer pumps • 85 percent less cable • 45 percent less seismic building volume

For the General Electric ESBWR, similar improvements are realized. Most notably, the ESBWR does not require any safety related diesel generators or safety system pumps, including reactor recirculation pumps. For both of the selected reactor

technologies, this passive safety system approach makes the operation of the plant

safer in that it is less prone to equipment malfunction or human error, and more

economical since there are fewer components to design, construct and maintain.

In summary, the NuStart consortium is not concerned that the new reactors will

be competitively disadvantaged as compared to the existing plants as a result from

any differences in safety standards. The existing plants are continuously upgraded

and re-evaluated. NuStart Energy Development sees that one of the critical elements to the success of a future generation of nuclear plants is the continued strong

performance of the current fleet. Excellent safety performance is needed to establish

and sustain the confidence of the public, regulators, financial community as well as

any future power company investors.

STATEMENT OF BARCLAY G. JONES, PH.D., PROFESSOR, DEPARTMENT OF NUCLEAR, PLASMA, AND RADIOLOGICAL ENGINEERING, UNIVERSITY OF ILLINOIS AT URBANA- CHAMPAIGN

Chairman Voinovich, Mr. Carper and members of the Committee, thank you for

the opportunity to provide your committee with some information and perspectives

about the roll that nuclear engineering programs have in providing a supply of educated professionals to the required work force in the nuclear field. This topic is a

central concern of the Nuclear Engineering Department Heads Organization

(NEDHO), which I chaired several years ago. This organization includes the Heads

and Chairs of all nuclear engineering departments/programs in the US and is broadly representative of our common interests. I am speaking this morning from my personal interests as a long time faculty member and former Head of the Department

of Nuclear, Plasma and Radiological Engineering at the University of Illinois at Urbana-Champaign. It is the sole department of nuclear engineering in Illinois, the

birthplace of the first man-made nuclear reactor and currently the state with the

most operating nuclear power plants, eleven at six sites.

Last year testimony was presented before the Energy Subcommittee of the House

Committee on Science by my colleague Professor James Stubbins at the Hearing on

University Resources for the ‘‘Future of Nuclear Science and Engineering Programs.’’ That presentation delineated the interacting forces that were bringing attention to the need for support and growth of university programs in nuclear science

and engineering to address the manpower needs facing the field. These forces are

equally active today and point to the continued need to nurture and support these

educational programs. In particular, several activities impact directly on the workload of the Nuclear Regulatory Commission and its need for human resources to address them in a timely manner. I will list only four:

• licensing of the Yucca Mountain high level waste repository;

• evaluation of early site permits and combined construction license applications

for new nuclear power plant construction;

• continued evaluation of existing nuclear plant life extension requests: and

• evaluation for licensing of Generation IV reactor designs;

To meet the demands of this increased workload, the Commission will be faced

with strong competition for educated and experienced professionals in the field. The

emerging graduates from nuclear engineering programs generally are not highly experienced, but they are well educated. The experienced workers in the field will continue to be in high demand, but are shrinking in numbers due to the disproportionate distribution of mature persons in the demographic making up the work

force. This will be a continuing and increasing challenge, at least over the next decade.

The work force demographic, thus, becomes a significant issue. It cannot be transformed to meet demand in a short timeframe because of the inherent 4-year BS eduVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00319 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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cational timeframe, and even longer if MS and PhD degrees are involved. In addition, there is a period immediately following graduation in which experience is an

important aspect to fully integrate the graduates into being productive employees.

But all is not bad news.

Over the past 2 or 3 years there have been increases in undergraduate enrollments in nuclear science and engineering programs. This increase will also work its

way into graduate degree programs. However, graduate programs are driven, not so

much by the workplace demand conditions, but by limitations imposed by the availability of funded research contracts to support graduate study. It is important to

note that much of the fundamental research funding is from government sources.

Thus, it is no surprising to observe that there is a strong correlation between such

funding and enrollments. Funding remains a vitally important necessity to retain

viable nuclear science and engineering programs within leading universities.

Focusing more directly on the manpower needs side in the nuclear engineering

field, a common issue emerges, the aging of the experienced work force. In the nuclear power sector, many of the experienced employees will reach normal retirement

age within the present decade. Although there has been downsizing of operating and

support staff at power stations since deregulation of the electric utility industry,

there is projected to remain a shortfall in vital experienced and certified staff. Similar conditions exist in the Nuclear Regulatory Commission technical staff, in government nuclear laboratories and in university nuclear engineering faculties.

These shortages cut across BS, MS and PhD degree levels. The supply of a decade

ago of operational and support staff from US Navy personnel entering the civilian

work force has also diminished. Estimates of the shortfall between BS and MS Annual Employment Needs and students graduated range from 350 in 1999 to more

than 450 in 2003. This has been exacerbated by the rapid and precipitous decline

of enrollments in BS nuclear engineering programs from 1500 in 1992 to less than

500 in 2000. A steady growth has occurred to where there are about 1000 currently

enrolled. Continued growth is projected as next year’s applications and admissions

are remaining steady and strong. Thus, the supply side is currently strong, but well

below the earlier mentioned short fall in graduating numbers of nuclear engineers.

Can the remaining nuclear engineering programs handle the increased enrollments? The answer is generally yes, presently. But the teaching staff are also aging

and replacements need to be immediately acquired to make the transition smooth

and effective. A study in which the distributed age of nuclear engineering faculty

by the Nuclear Energy Institute is incorporated in the bar graph included here. This

clearly shows a skewed distribution with the expected significant retirements in the

next 5 to 10 years. Working against the earlier replacement is the relatively small

size of nuclear engineering departments and enrollments, compared to electrical,

mechanical and computer science units. It requires enlightened administrations to

respond favorably to the nuclear engineering national needs.

In conclusion the educational programs in US universities have much of the necessary infrastructure but will need to replace and add faculty in a timely manner

in order to continue the increased enrollments to meet the discussed personnel demands. Clearly continued and expanded government is essential to retain present

trends and meet projected nuclear engineering staffing needs in the nuclear field.

I would be pleased to respond to your questions.

REPORT OF THE NUCLEAR ENERGY RESEARCH ADVISORY COMMITTEE

NUCLEAR POWER ENGINEERING CURRICULUM TASK FORCE

ANDREW C. KLEIN, CHAIR, OREGON STATE UNIVERSITY; JAMES F. STUBBINS, UNIVERSITY

OF ILLINOIS, CHAMPAIGN-URBANA; GILBERT BROWN, UNIVERSITY OF MASSACHUSETTS,

LOWELL; HAROLD RAY, SOUTHERN CALIFORNIA EDISON; EUGENE S. GRECHECK, DOMINION ENERGY

APRIL 7, 2004

I. Introduction and Charge to the Task Force

In October 2002 the U.S. Department of Energy’s (DOE) Office of Nuclear Energy

Science and Technology asked the Nuclear Energy Research Advisory Committee

(NERAC) to form a Nuclear Power Engineering Curriculum Task Force to investigate the assertion that university nuclear engineering departments and educational programs are not currently producing engineers with education optimal to

the needs of industry.

The specific DOE charge to the Task Force was:

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• In the course of our efforts to support nuclear energy educational infrastructure

in the United States, we have heard from various industry sources that university

nuclear engineering departments are not producing engineers with training optimal

to the needs of industry.

• We request that NERAC form a task force composed of current and former nuclear utility executives and university nuclear engineering professors to discuss and

assess this concern.

• If the concern is found to have merit, we request that this task force evaluate

the need for a new curriculum optimized to the needs of industry. If such a need

is identified, we request that this task force work with expert consultants to outline

an optimal curriculum as a model for the use of university nuclear engineering departments.

• Before any products are finalized, we request that NERAC review its draft conclusions with the broader nuclear industry and university community.

• We defer to the judgment of the task force regarding the time required for this

effort.

During the 2002–03 academic year the Task Force asked all of the universities

that offer undergraduate degree programs in nuclear engineering to voluntarily provide a copy of their current curriculum and their curriculum from sometime in the

second half of the 1980’s. This request was made through an email solicitation to

the Nuclear Engineering Department Heads Organization (NEDHO). In all, 14

schools provided curricula to the Task Force for evaluation. Responses were received

from an excellent distribution of schools both geographically and by size of program.

Information was received from small and large programs and from all corners of the

U.S. It is important to note that all of the programs that responded have maintained accreditation of their undergraduate nuclear engineering programs through

the ABET, Inc., the cognizant organization for engineering accreditation in the

United States.

The list of schools contributing curricula for evaluation includes:

Massachusetts Institute of Technology

North Carolina State University

Oregon State University

Rensselear Polytechnic Institute

Texas A&M University

University of California, Berkeley

University of Florida

University of Illinois at Urbana-Champaign

University of Massachusetts, Lowell

University of Michigan

University of Missouri, Rolla

University of New Mexico

University of Tennessee

University of Wisconsin

The Task Force members conducted the initial analysis of the curricula independently and then the Task Force met on November 4, 2003 to discuss their individual

findings and directions for further analysis.

The curricula from the 14 universities reviewed by the Task Force included

courses and content beginning at general and basic fundamentals that continued

through general engineering science and finished up with specific nuclear engineering discipline subjects. All curricula reviewed include general and basic fundamental

content in advanced mathematics through differential equations, physical sciences

in chemistry and physics and some include additional content in areas such as computer programming, numerical methods and analysis. All curricula also included

education in the fundamental engineering science areas of statics, dynamics, mechanics, materials, economics, thermodynamics, fluid mechanics, and heat transfer

and many curricula include additional content in areas such as electrical fundamentals, control systems and engineering graphics.

Finally, all curricula included content with specialization in the nuclear engineering discipline. The topics covered by all of the curricula include—atomic and nuclear

physics, laboratory classes to measure radiation and radioactivity, the interactions

of radiation with matter, radiation protection, reactor physics and theory, reactor

thermal hydraulics, and nuclear engineering design. Most of the curricula also include material related to nuclear reactor laboratories. Because of the variety of faculty interests from university to university some of the curricula also include more

depth of coverage in topics such as reactor engineering, systems engineering, fuel

management, reactor safety, fuel cycles, nuclear materials, nuclear waste manageVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00321 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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ment, risk assessment, applied radiation protection, radiation transport, fusion and

other diverse topics.

II. Overview of the Evolution in Nuclear Engineering at Universities

The curricula in all engineering and science majors can be expected to evolve over

time as areas of focus become increasingly and decreasingly important to the industries and enterprises that utilize the graduates from the country’s higher education

system. The educational programs in nuclear engineering have also seen these evolutionary developments. When one examines the history of nuclear engineering education during the past half-century in this country, they recognize a variety of

changes from the early days to present. In the 1950’s as the country emerged from

World War II with the realization that there would be a need for nuclear trained

and educated engineers, there were numerous efforts to increase the number of nuclear-trained and—educated engineers and scientists, most notably through the

USAEC fellowship programs and the Reactor School at ORNL. These programs gave

high visibility to the nuclear engineering profession, attracted many outstanding

students, and developed a large cadre of highly educated people. University programs in nuclear engineering also started developing in the late 1950’s, predominantly growing out of departments of physics, mechanical and chemical engineering.

In the 1960’s and 1970’s as commercial nuclear power began to develop, many universities started nuclear engineering programs and extended the educational enterprise in this area from the B.S. to the Ph.D. degree. Many of these same schools

also added research reactors to give their graduates significant hands-on experiences as part of their education. There were also many research opportunities for

students and faculty in the broad nuclear engineering discipline around this time,

some of which directly or indirectly utilized the on-campus nuclear research reactors. In 1973 there were 48 schools that offered undergraduate and graduate education in nuclear engineering and more than 60 research reactors on campuses

around the country. The changes in the power industry (no new plant orders, deregulation, and consolidation of the industry) from the mid-1970’s through the end

of the 1990’s were reflected on the nation’s campuses through declining university

enrollments in nuclear engineering, the closing of university nuclear engineering degree programs and the closing of university research reactors. In response to these

declines, the remaining nuclear engineering programs were forced to restructure

with results that ranged from mergers with other, larger departments to broadening

of their education and research foci. Currently 26 schools that offer one kind of nuclear engineering degree or another remain. There are also 26 on-campus university

research reactors remaining, but not all on campuses with nuclear engineering degree programs.

In 1998 the Nuclear Engineering Department Heads Organization (NEDHO) conducted a study and developed a report that discussed ‘‘the current status and future

directions of the nuclear engineering profession in the United States as viewed by

the nuclear academic community’’. This report also surveyed ‘‘the contributions of

nuclear engineering to enhancing the well being of society, now and in the future’’

and laid out the ‘‘steps that the university community and the U.S. Government can

take to ensure that our national needs are met’’. The report goes on to state that:

‘‘The main conclusion of this report is that the nuclear engineering profession

is essential to the well being of the country since it brings great benefits to society in terms of energy security, national defense, medical health, and industrial

competitiveness. We further recognize that the nuclear engineering profession

is in a period of transition to one encompassing a much broader range of applications of nuclear science and radiation technologies. The country has a persistent demand for nuclear engineers that will almost certainly increase in the

future, notably in nontraditional areas of nuclear engineering.

The report concludes by making the following recommendations:

• The university community needs to make a major cultural shift in its thinking about nuclear engineering education. In essence it has to make a transition

from a curriculum dominated by a single technology, nuclear power, to a unified

curriculum characterized by a common educational core from which flows a

multitude of diverse applications. This core is to be centered on applied nuclear

sciences and encompasses low energy nuclear physics, the interaction of ionizing

radiation with matter, and plasma science and technology.

• In order to satisfy increasing societal demands for nuclear engineers with

training in radiation science and technology it is recommended that the DOE

establish a separately designated, clearly distinguished, program for bionuclear

and radiological research similar to basic energy sciences or high energy physics. Bionuclear technology and radiological engineering are applications of nuVerDate 11-MAY-2000 09:51 Apr 28, 2006 Jkt 094601 PO 00000 Frm 00322 Fmt 6633 Sfmt 6621 G:\DOCS\94607.TXT SENENV2 PsN: SENENV2
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clear engineering of particular importance to the medical health of the country.

Currently, governmental funding of such research is dispersed in many small

segments over many different programs.

Changes in direction for nuclear engineering departments were reflected in this

NEDHO report which was written during a time when industry was consolidating

and it appeared to many observers that most of the existing plants might not pursue re-licensing and would terminate operation at the end of their design life. This

meant that most of the existing power reactor fleet in the U.S. would be retired in

the first quarter of the 21st century. It was also perceived by many that no new

reactors were likely to be in the planning process for more than a decade or beyond.

This perception signaled further declines in university enrollments in nuclear related disciplines with no hope of recovery in the fission power area.

During this time, schools were seen to be moving their research programs away

from power engineering into other varying research directions. This was to be expected since the power industry was not directly supporting the research programs

at the universities. Also during this time nuclear engineering faculty, in order to

meet the demands of their universities for greater research support, began looking

for other applications of their capabilities, some completely outside the nuclear field.

Additionally, when universities were able to replace faculty who left or retired,

schools often replaced them with someone with a research focus away from the

power industry.

Since 1998 much has changed in the nuclear power industry. Most of the currently operating power plants appear to be headed toward re-licensing and upgrade,

new plants are under consideration for construction and operation as early as this

decade, Generation IV reactor concepts are being seriously considered for development and appear to be very competitive with other means of energy generation,

USDOE is developing new research programs on advanced fuel cycles and the direct

production of hydrogen using high temperature heat from a reactor as a new energy

carrier to replace petroleum based transportation fuels. All of these developments

have also spurred significant increases in nuclear-related university enrollments

across the country principally in the nuclear power area.

With current and future changes to the nuclear power industry, perhaps the

charge to the Task Force was too narrowly defined to just including nuclear utilities.

There is a spectrum of needs within the industry, ranging from technician level individuals who can succeed with a high school or community college education and

specialized training through the B.S. or M.S. educated engineers and scientists covering a wide set of disciplines, including what has traditionally been called nuclear

engineering, to PhD educated scientists and engineers needed for the development

of the next generation of nuclear reactors, systems and fuel cycles. The solutions

and types of personnel to provide the solutions that are chosen by each of the entities within the industry will no doubt be different. This indicates that educational

opportunities in the nuclear discipline should be available at all levels.

III. Analysis of NE Curricula and Nuclear Power Industry Needs

The first step in the Task Force’s process was a review of the curricula submitted

by the universities with an eye toward determining whether the curricula of university nuclear engineering departments had changed to such a degree over the past

15 years that they are not producing engineers with ‘‘education optimal to the needs

of industry’’.

It appears from the Task Force’s review that for the most part, the curricula at

the 14 universities who submitted information have not changed considerably over

the past 15 years and are adequate and appropriate to support the needs of the

broad nuclear industry and the power industry in particular. In fact, several programs have strengthened their nuclear engineering course offerings by adding

courses at the Junior and Senior level. This is possible due to the improved math

background of incoming students, which also allows some introductory courses to be

moved into the Freshman and Sophomore years.

There is one area that could be improved in the education of nuclear engineers,

however. That is the development of a practical understanding of the workplace and

the individual practical skills that are needed to be successful. This can be best accomplished by providing a practical work experience for all students interested in

nuclear power engineering. These experiences can be best provided either through

co-op programs throughout the academic year or through summer internships. The

Task Force encourages the university nuclear engineering programs to include at

least one practical work experience opportunity in all of their undergraduate programs. It also encourages the nuclear industry to make numerous opportunities

available for undergraduates studying nuclear engineering in the country. To work,

this approach must be supported by both the universities and industry. This could

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be a required part of each university’s curriculum, and industry would need to make

these opportunities available for all students. To help make internships possible for

students, the Nuclear Energy Institute has recently established an internship clearinghouse on their web site.

The Task Force was also asked to evaluate the need for a new curriculum optimized to the needs of industry. The Task Force’s analysis and discussion led to the

conclusion that a new curriculum was not needed and that the development of a

common, or model, curriculum for use by all academic departments offering the nuclear engineering discipline was not in the best interests of either the schools or the

broad nuclear industry. In general the current nuclear engineering curricula currently are already similar in nature with minor differences between curricula determined by faculty expertise and research interests. The Task Force also believes it

is better to have a mix of curricula with different focus areas in order to stimulate

high quality education and research across the country.

The Task Force also feels that there really is no need for a direct role for the U.S.

Department of Energy in formulating undergraduate nuclear engineering curricula.

Adapting the universities nuclear engineering curricula to meet the needs of the

broad nuclear industry can best be accomplished through following established

ABET accreditation procedures since all schools now are working in a ‘‘continuous

improvement process’’ regime which relies on stakeholders to help them tailor their

curricula to the needs of their constituents. Thus, all ABET accredited programs

have self-correcting, self-regulating processes in place which help them develop curricula suitable to those aspects of the nuclear industry that they are aiming to serve

and that are consistent with the input that they receive from the constituents they

serve.

As a part of the current ABET accreditation process each program must consider

who their clients and constituents are and this is to be used to guide each institution in the design of their curricula. For example, most programs consider their constituents to be the companies in the nuclear power industry (including the operating

companies and utilities, reactor manufacturers, and fuel vendors), the national laboratories, government and regulatory agencies (including DOE), and graduate

schools. A typical university departmental advisory committee is made up of a diverse membership including members from power producers, vendors, utilities, national laboratories and others. The Task Force feels that over the long run, this

process will support the evolution of the best curricula to meet the needs of the

broad nuclear industry. Thus, the Task Force recommends that all sectors of the

broadly based nuclear industry become active with the university nuclear engineering programs across the country to ensure a strong educational environment that

produces graduates who will meet their future staffing needs.

The Task Force’s recommendation for industry involvement in development and

support undergraduate curricula extends to support faculty. The development of

professors in the universities is driven by the need for faculty to build and maintain

strong research programs. This has led many young faculty members to develop research programs in areas that are not of direct interest or applicability to the nuclear power industry. To change this, industry must work more directly with university faculty to develop appropriate research programs. This will enable these faculty

members to bring currency to their classes and work on research issues that will

move the industry forward.

Finally, prior to completion of this report a draft was made available for review

and comment to the nuclear energy community through the Nuclear Engineering

Department Heads Organization, the American Nuclear Society’s Education and

Training Division and Special Task Force on Work Force Issues, the Institute for

Nuclear Power Operations, the Nuclear Energy Institute, and the Electric Power Research Institute. This final report contains certain additions and changes to reflect

the comments that were received as a part of this review.

IV. Conclusions and Recommendations

Conclusion #1: The nuclear engineering curricula at the U.S. universities have not

changed considerably over the past 15 years and are adequate and appropriate to

support the needs of the broad nuclear industry. It is the observation of the Task

Force that the curricula are now stronger, even in the power area, since students

are doing more in their first 2 years of study based on their better math skills, and

because faculty are connecting with students early in their programs in order to

keep them involved in the nuclear engineering degree programs. Furthermore, the

ABET accreditation process supports continuous improvement with input from various constituencies, including the nuclear power sector, and has had a positive effect

on strengthening these programs.

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Conclusion #2: It is impractical to attempt to establish an ‘‘optimal’’ educational

curriculum for all ‘‘nuclear engineers’’ since there is a wide range of needs within

the nuclear industry.

Conclusion #3: There is no need for a direct role for the U.S. Department of Energy in formulating undergraduate nuclear engineering curricula.

Conclusion #4: The one area that could be improved in the education of nuclear

engineers is the development of practical engineering work experience and the individual practical skills appropriate nuclear power venues.

Recommendation #1: The Task Force recommends that the university nuclear engineering programs consider including at least one practical work experience opportunity in all of their undergraduate programs. It also encourages the nuclear industry to make numerous opportunities available for all undergraduates studying nuclear engineering in the country.

Recommendation #2: All components of the nuclear industry should become closely involved in the undergraduate curricula development at universities through

their active participation on departmental advisory committees and boards. This

also supports the ABET ‘‘continuous improvement’’ requirements.

Recommendation #3: All components of the nuclear industry are encouraged to directly support the research programs at universities to develop faculty who will

work on industry specific research problems and involve students with industrial interests.

Recommendation #4: All components of the nuclear industry are encouraged to

support faculty members with research projects, including summer and internship

work experiences and sabbatical opportunities for faculty.

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