### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 1 DEPARTMENT OF ENERGY OFFICE OF NONPROLIFERATION AND INTERNATIONAL SECURITY (NIS)

PROPOSED CHANGES TO DOE PART 810 ASSISTANCE TO FOREIGN NUCLEAR ACTIVITIES PUBLIC MEETING

Grand Hyatt 1000 H Street, N.W. Washington, D.C.

Friday, November 15, 2013 9:11 a.m.

Reported by: Christine Allen, Capital Reporting Company

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 2 1 A P P E A R A N C E S 2 Jeff Bedell, Los Alamos National Laboratory Alisa Beyninson, Government Accountability Office 3 David Blee, USNIC H. Brendan Burke, George Washington University Law School 4 Malcolm Burke, U.S. Department of Commerce Ian Butterfield, Livingston Group 5 Jorge Canovas, University of Pennsylvania Dwight Cates, Fluor Corporation 6 Preeti Chaudhari, U.S. Department of Energy Steve Clagett, Department of Commerce 7 Joyce Connery, National Security Staff Jean Cornell, ML Strategies 8 Jennifer Dahnke, DOE/NNSA Colleen Deegan, Bechtel 9 Aubrey DeVilliez, American Nuclear Society Vincent Esposito, House Committee on Energy and Commerce 10 Madeleine Foley, DOE/NNSA Ted Garrish, Chem2Hill 11 Richard Goorevich, DOE/NNSA Kelly Hochstetler, University of Virginia 12 Gisele Irola, DOE/NNSA Ted Jones, Nuclear Energy Institute 13 Anna Jones, Morgan, Lewis & Bockius LLP David Kincaid, U.S. Department of Commerce 14 Lenka Kollar, Argonne National Laboratory/Consultant Jay Kraemer, Fried, Frank, Harris, Shriver & Jacobson LLP 15 Ajay Kuntamukkala, Hogan Lovells Joshua Madrigal, AREVA 16 Melissa Mann, URENCO Inc Stephen Markus, Pillsbury Winthrop Shaw Pittman LLP 17 LaReina Parker, DOE/NNSA Craig Piercy, American Nuclear Society 18 Alex Polonsky, Morgan, Lewis & Bockius LLP Millicent Ronnlund, Balch & Bingham LLP 19 George C. Rudy, Integrated Systems Technology Linda Schenk, ERIN 20 Michele Scott, U.S. Department of Commerce Matthew Shruhan, U.S.-India Business Council 21 Brooke Smith, Nuclear Regulatory Commission Gretchen Smith, DOE/NNSA 22 Carlton Stoiber, Talisman International

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 3 1 A P P E A R A N C E S [Continued] 2 Goran P. Stojkovich, Babcock & Wilcox Katie Strangis, U.S. Department of Energy 3 Richard Stratford, Department of State Chris Toomey, Pacific Northwest National Laboratory 4 Matthew Tynan, Hogan Lovells Piet van der Heide, Enrichment Technology US, Inc. 5 Jeff Wilkins, U.S. Department of Energy Tom Wood, Pacific Northwest national Laboratory 6 Bill Woodward, Holtec Jennifer Young, Government Accountability Office 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 4 1 A G E N D A 2 PAGE Welcome 3 Katie Strangis 5 4 Part 810 Process improvement Project 5 NNSA: Project Plans and goals Richard Goorevich 6 6 State: 7 Understanding Foreign Assurances: Why, Who, What, Where, When, How 8 Richard Stratford 26 9 NNSA: E-Licensing Jeff Wilkins 33 10 Q&A on Process 43 11 12 Break 77 13 NNSA: Part 810 Rulemaking Overview Part 810: Purpose, History and Scope 77 14 What is changed 15 What's not changed 16 Next Steps in Rulemaking Process 17 Richard Goorevich 79 18 PNNL: Economic Impact of the Proposed Changes Tom Wood 89 19 Chris Toomey 95 20 Comments and questions from public to panel 101 21 Closing Remarks Joyce Connery 141 22

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 5 1 P R O C E E D I N G S 2 MS. STRANGIS: Good morning, everyone. 3 Happy Friday and thank you all for coming. My name is 4 Katie Strangis. I currently work for Rich Goorevich 5 and NNSA. I think I know most, if not all, of you. 6 Welcome to our second public meeting on our 810 process 7 and rule making. 8 Just as a reminder, we are under ex parte 9 rules for the part of the conversation where we talk 10 about the rule making and for the entire presentation, 11 we are having it transcribed. So, just so you know, 12 anything you say I going to be recorded and will be 13 placed on our public website. 14 We've changed our agenda a little bit for 15 this meeting in that the first part of the presentation 16 is going to focus on Part 810 process improvement. And 17 we're just going to take you through some of the things 18 we're doing, a lot of it based on your feedback to 19 improve the 810 process. 20 Dick Stratford is going to take us through 21 understanding how foreign assurances work and how we 22 can maybe improve that process. And then we have Jeff

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 6 1 Wilkins who's going to take us through our plan for our 2 new E-licensing system. 3 At the end of that we're going to do a 4 question and answer session and at that point you're 5 able to ask any questions about that section. We're 6 not under any sort of restrictions on what we can 7 answer. 8 We'll then take a break and get into the 9 rulemaking and more into our economic impact that we 10 submitted, as well. So, without further ado I will 11 turn it over to Rich. 12 MR. GOOREVICH: Okay. Well, thanks, everyone 13 and good morning. I know this meeting's happening a 14 little later. I guess when we first met in August we 15 had anticipated a meeting to take place in and around 16 the 1st of October. I think, as you all know, for 17 reasons out of our control, that we couldn't hold the 18 meeting then. As a result of those circumstances, what 19 we've done is we've scheduled the meeting now and we've 20 extended the date out for the comment period on the new 21 rule to take into account the fact that we couldn't 22 meet our commitment that we'd made in August.

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 7 1 So we're happy to be here. It's a little bit 2 cozy in this room, but I think it's a very functional 3 room for what we're going to do. The idea here over 4 the next couple of hours is to take your through some 5 of the elements and areas that we really could not-- 6 that we didn't have a chance to get into in the first 7 meeting and to really take the opportunity to solicit 8 your views on what you've seen so far in your study of 9 the SNOPR and how we're doing. 10 But as Katie said, what I'm going to do is 11 I'm going to take you through a little bit of the 12 process improvement ideas that we have, with the help 13 of Dick Stratford from State Department on the 14 assurance process and then Jeff Wilkins from our CIO's 15 office is building our E-licensing system. 16 So I think we've covered this. Katie talking 17 about that and then, as you can see from the bottom, 18 after the break we'll then get into the rulemaking 19 itself. 20 A couple of slides on background, just to 21 sort of insure that everyone knows why--this is sort of 22 the point where before they close the door on the

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 8 1 airplane and they say, are you really sure you want to 2 go to San Diego? Well, this is the part where we say, 3 we're here to talk about Part 810, which implements 4 Section 57b of the Atomic Energy Act and it explains 5 what is--which I think is, we all know 57b prohibits 6 all assistance to foreign atomic energy activities 7 direct or indirect. This is the direct or indirect 8 assistance that you'll hear us talking about in the 9 production of, or the development of, special nuclear 10 material. 11 And then talking how the Secretary of Energy 12 must authorize these requirements and he makes these 13 decisions after coming to what we call a non14 inimicality finding and with the concurrence of the 15 State Department and in consultation with the other 16 parts of the agency, Commerce, NRC, DOD, and it covers 17 all SMN activities, whether for weapons or for 18 commercial purposes, so there's no distinction in the 19 law. 20 The scope, we can exempt some elements of 21 these activities and generally that's where it's found, 22 in the current 810.2, but it's a necessary regulation,

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 9 1 810, because of what the law requires the secretary to 2 do. We have the ability to generally authorize and I 3 think we've laid out, I think, in the SNOPR the reasons 4 for what we're going to be. How we're going to make 5 the determinations moving forward on what's generally 6 authorized and what's going to be in the requirements 7 for--if it's not generally authorized, what specific 8 authorization requires and, again, the inimicality 9 finding of the secretary. So essentially, what Part 10 810 does is it lays out the pathways for how to 11 implement 57b. 12 So, the rulemaking schedule, well, we started 13 the original rulemaking by issuing what we call the 14 NOPR--Notice of Proposed Rulemaking--in September 2011 15 and then in December of that year we received the 16 comments on the NOPR. 17 We then took some time and we went through 18 and really studied the comments, revised and reviewed 19 and because of the number of significant changes that 20 we felt were necessary to the NOPR, as a reflection of 21 our studying the comments that we received, we then 22 decided to issue a supplemental NOPR, rather than go to

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 10 1 a final rule. We really did want to solicit more 2 feedback from the public. 3 August 2nd we went ahead and issued the 4 SNOPR, had the public meeting. We're now having the 5 second public meeting and then comments are due on 6 November 29th, and I know one of the questions that we 7 will probably be asked is, what's our intention with 8 the schedule further on regarding this? Well, our 9 intention is to really, again, study the comments that 10 we get and try and turn around as quickly as possible 11 then the next steps in going to, then, the final rule. 12 We don't expect it to take nearly a year and 13 a half, our hope is that we can do it in terms of 14 months, not years. And then try and get the rule out 15 and get it moving. But there's an element of this from 16 which we understood from the comments we got, which is 17 that it's good to change the rule, but the process 18 itself has to change. 19 I think one of the things that we've become 20 aware of internally over the past years is how industry 21 is being conducting is evolving. It's no longer being 22 conducted in the way the last time this rule was

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 11 1 touched, which was the mid or early 1980s. Business is 2 evolving. How business is being done, how assistance 3 is being carried out, the importance of this trade and 4 this assistance, not only from a commercial standpoint, 5 but as part of a broader U.S. Government policy on 6 energy and on non-proliferation means that the pace of 7 activities is increasing and increasing in a way that 8 our current processes really do not support as well as 9 we would like to see them support. 10 So we recognize that the process needs to be 11 changed. But for us, sitting where we sit, we can only 12 see one part of all the activities that the public has 13 to go through in getting business, and marketing 14 business, and signing contracts, and implementing 15 contracts, to get that assistance out there. 16 What the public comments provided us was some 17 insight into the challenges that industry and the 18 public are facing with those elements of requirements. 19 We had anecdotal information and evidence based upon 20 our direct dealings with certain applicants that were 21 willing to explain that to us, but what we didn't get 22 was a very good- -what we don't have and because of

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 12 1 where we sit, didn't have was a very good sense of 2 exactly how all the pieces were fitting together. And 3 through the public comment period and through the 4 creation of Team USA that Joyce is leading at the White 5 House, we now feel that we have a much, much better 6 view of how the 810 processes that we have should be 7 fixed and how to go forward. 8 Now, what I'm going to do is spend a few 9 minutes talking about what we're doing right now to 10 undertake those reviews and you'll see how some of the 11 public comments that we receive today fit into the 12 public process. 13 Most of you have probably seen this slide 14 before, which pretty much takes you through the three 15 stages of the authorization process, where the first 16 stage is essentially the initial review where we 17 receive the license application. We go through 18 internal reviews, both my staff--which also includes 19 the technical expertise at the National Labs. We talk 20 with our Office of Nuclear Energy and we talk with our 21 legal advisors to try and get a determination on that. 22 We then develop what we call the analysis. If

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 13 1 you look in the current regulation, there's 8 questions 2 we have to answer for the Secretary, so we can make the 3 non-inimicality finding and we answer those questions 4 at that point and then send the approval for 5 recommendation to the interagency for review and moving 6 forward. 7 We send approvals for recommendations. If we 8 think that the application will be denied for any 9 reason, we don't send it through the process until 10 we've talked to the company and the applicant, and we 11 make a determination as to working with the applicant 12 as to how we could change the application, change the 13 nature of the business, structure it in a way where we 14 feel confident that the interagency will come back with 15 an approval. 16 So the first stage is, we think, is very 17 important because it really helps and should set the 18 stage for approval in the stages moving forward. 19 Stage 2, agency review. Well, we've done our 20 analysis, we've sent it to the agency, State, Commerce, 21 Defense, and they take a look at it. At the same time 22 that we ask them for their comments and their views,

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 14 1 and to concur with our recommendation, we also then ask 2 the State Department to request formal assurances from 3 the host government. And Dick will talk a little bit 4 about how we do that and why we do that. 5 When we get the clearances from the 6 interagency and we get the assurances from our partner 7 country's government, then we move to the approval 8 process which is essentially taking the package, taking 9 the assurances, taking the recommendations, drafting 10 the formal what we call authorization from the 11 secretary to the applicant. It then goes through the 12 entire DOE review process again, up to the secretary 13 and the authorization is granted and moving forward. 14 I know that one of the comments that we'll 15 get in questions is why the Secretary of Energy? It's 16 not on the slide, but something that I think will--if 17 the question is asked, we will point people to the 18 Atomic Energy Act. 19 The Atomic Energy Act. I think it's Section 20 161, there are certain things that are non- delegable 21 for the secretary to do. For example, one of the 22 things that is non-delegable for the secretary to do is

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 15 1 determinations on restricted data. What's considered 2 classified and what isn't. The definition of what is to 3 be treated as special nuclear material, I believe, is 4 that. 5 There's a reference in 161 to 57b(2) and it 6 says that it's non-delegable. So it's not a decision 7 that, in our process, that we can at our level make 8 that determination to ask the secretary to delegate it 9 down. It would require a change in the law itself. 10 So, there's certain things we can do in the 11 process approval and there's certain things that we 12 can't do. And we're going to try and improve the 13 things that we can do, as best we can. 14 So what did we learn from the comments? Well, 15 we've learned that the authorization process is 16 considered slow, opaque, and unpredictable. These are 17 words and sentiments directly from the commenters. I'm 18 not going to quibble on whether I agree with all of 19 them or not, but this is certainly what we're hearing 20 and that's enough for us to understand that we need to 21 improve the process. 22 Commenters sought to exempt or generally

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 16 1 authorized country's technologies or transactions to 2 avoid the time consuming authorization process. There 3 are certain ways that we can look at countries, but in 4 the end it's going to come down to, again, the 5 secretary being able to make the non-inimicality 6 finding. 7 In our view, if folks feel that we need to 8 change a regulation to avoid the process, we probably 9 need to look at the process before we worry about 10 changing the regulation. And for us, understanding 11 that was certainly important for us. And, again, 12 pushing us to change and improve the process. 13 Commenters offered many process improvement 14 ideas and that process improvement is the key to better 15 regulation. If people feel this is slow, opaque, and 16 unpredictable--and I'm really mostly worried about the 17 opaque and unpredictable because any regulatory process 18 should be transparent and predictable and efficient-- 19 then we need to make changes. And that's what we're 20 doing, we're going to fix the process overall with 21 limitation. 22 Now, what are the qualities of a good 810

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 17 1 process? First and foremost, we have to meet the 2 intention of the law. We have to have effective threat 3 reduction. And, as I just said, we need to be open, 4 transparent, predictable and understandable. That is 5 also something that I think is going to be very 6 important to my office as we move forward; 7 understandable. One of the comments that we've heard 8 over and over again is that it's hard to understand the 9 810 regulation. 10 Lots of regulations are hard to understand 11 and we think we've gotten a lot of good suggestions on 12 how we can make it more understandable, and I'll talk 13 about that a little bit. 14 Efficiencies, we have to be more efficient. 15 As I said, the pace of business as you all know is 16 faster than we can respond to right now in our current 17 process and it's not going to slow down. It's just 18 going to get faster. And so we need to find a way to 19 make our processes efficient and flexible to be able to 20 meet the requirements that our applicants have. 21 And effective nuclear trade support--we're 22 competing in the global nuclear market and us having

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 18 1 U.S. applicants, U.S. industry, U.S. 2 technology spread throughout the world is 3 important. It's important from an economic policy and 4 it's important from a non-proliferation policy, but we 5 have to be able to strike the balance between trade 6 promotion and the proliferation risk that's inherent 7 within the technology that we're dealing with. 8 So what are our objective? Well, our 9 objectives is very straight forward. To be 10 transparent, predictable, and understandable and to 11 reduce the time, okay? I think that it's not one over 12 the other and that we can reduce the time if we're 13 transparent, predictable, and understandable. And if 14 we're transparent, predictable, and understandable 15 we'll reduce the time. So I think those are the keys 16 to us. 17 We need to continue to meet our obligations 18 under the law and that we have to recognize that our 19 poor performance puts suppliers at risk and at a 20 competitive disadvantage. And so we understand that 21 we're in the service business and so we have to provide 22 the service, but, again, we have to strike the balance.

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 19 1 So what are we going to do to help improve 2 the idea? Well, one of the ideas that we've heard and 3 that we continue to hear, and people have shown us 4 examples from others that have much deeper and much 5 more comprehensive and wider regulatory experiences 6 than we do, is to go ahead and put together a guide--a 7 sort of user's guide. 8 So while we'll have the regulation, 9 certainly--whatever that looks like--out there, one of 10 the things that we want to do is we want to create, as 11 part of our process improvement, a guide that includes 12 advisory opinions, frequently asked questions, and it 13 goes through and tries to explain in layman's terms 14 what the rule means. And how do you apply for an 15 authorization? What happens once you apply for that 16 authorization? And all the interpretations that we may 17 have taken, either from a legal or technical standpoint 18 that we have in the advisory opinions, to provide the 19 applicant with more resources to really understand the 20 rule and to be able to more efficiently and effectively 21 go through the application process. 22 We're going to be working on reducing the

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 20 1 response times for foreign government assurances. Now, 2 this isn't solely a DOE activity. In fact, it's not 3 really a DOE activity, it's really a State Department 4 activity, but in partnership with State Department we 5 are looking at where we can find those efficiencies. 6 But again, there's only so much we can do. We have 7 some ideas we can implement, some Dick will talk about 8 here, some we can't because of the nature of those 9 activities. 10 But that's going to be key to this. That's 11 really the second stage of the slide that I showed, how 12 do we reduce the time for foreign government 13 assurances? And then reduce the internal DOE and 14 interagency reviews. We're looking for overlap. Where 15 are we looking at the same thing multiple times when we 16 don't have to, and we shouldn't be looking at the same 17 thing multiple times. 18 If we've made determinations and decisions 19 about essentially the same technology and the same 20 entities before, can we somehow borrow from those 21 determinations that have been made? We're going to 22 create fast track procedures for authorization of

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 21 1 activities that present the lowest risk. The idea 2 there is to try and build a rule that can be more 3 flexible--be flexible in a changing time. And be 4 flexible in a way that responds to the global industry 5 needs. And I think there are examples of that that are 6 in the SNOPR right now, such as how we're treating the 7 definitions of operational safety. 8 As we all know, post-Fukushima, this is going 9 to be an area that is going to continue to get a lot 10 more attention and a lot more expertise brought to it 11 to try and have the safest possible nuclear industry we 12 can. We want to create a rule, have the rule be in the 13 position, and to have our processes be in the position 14 to be able to respond to those changes that the global 15 industry that all the governments in the industry that 16 are associated with nuclear technology can be able to 17 take advantage of. So, developing a process that's 18 flexible--a fast track process or a flexible process-- 19 is important to us. 20 And I think, finally, one of the things that 21 we heard loud and clear is, can we drag the 810 rule 22 into, at least, the late 20th century by creating a

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 22 1 computer E-licensing system and our CIO is here and is 2 going to talk a little bit about what we're doing. 3 My fear had always been that our licensing 4 load probably wasn't to the point where we needed to 5 invest as the department millions of dollars to develop 6 an E-licensing system, but I think from what we've 7 heard, we do need to do this and we think we can find 8 efficiencies once the system's in place, to help move 9 the process along. And with Jeff's office, I think we 10 can find a way to do it in a cost effective manner, as 11 well, which is important, obviously, to the department 12 and to tax payers, as well. 13 So how are we going to implement all of this? 14 What are we going to do? Well, what we're doing is 15 we're going to use the Six Sigma analysis to help 16 select the best ideas. 17 So how are we going about--next slide-- what 18 are we going to do? Well, we acknowledge that the 19 process can and should be improved, we're committed to 20 process improvement, and the goal at the end of all of 21 this is to make the process, ISO 9001 compliant. My 22 department is moving through all of its business

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 23 1 functions and its larger construction and program 2 efforts to become ISO 9001 compliant. 3 In the end, we want our process, the 810 4 process, to also be ISO 9001 compliant. And not only 5 compliant, my goal is to go and to seek the ISO 9001 6 certification, as well. That would then make us in the 7 U.S. Government the only export control process that 8 had gone through this kind of review, that would be ISO 9 9001 compliant, and would be ISO 9001 certified. 10 And so, the idea then is that through that, 11 in maintaining that certification, it forces us to look 12 at our process and to continue to improve and to 13 continue to find efficiencies. So that's the goal. 14 The goal is to force us to be better and to stay 15 better. 16 So, we have project plan and methods are set. 17 We have a team that's assembled and we're underway on 18 this project and it is--although it was informed by the 19 rulemaking, it is separate from the rulemaking. So, 20 regardless of what happens with the rulemaking, we 21 still have a separate track and we're on target to be 22 able to improve and go through this process all the

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 24 1 way. 2 So, who's doing what to whom? My office is 3 the NIS and we're the lead Six Sigma project, so where 4 are we? Well, we're interviewing applicants, internal 5 administrators, and getting input from applicant groups 6 to determine the necessary and desirable features and 7 functions for the process. 8 We're determining necessary and desirable 9 licensing functions and features and we're providing 10 that to the CIO and we're identifying performance 11 issues and recommending improvements to what we're 12 getting back and forth. The CIO, Jeff, he's in charge 13 of essentially designing the architecture for the E14 licensing system and the software development and then 15 ultimate implementation. And then there's a whole 16 other group in NNSA, called the NA-QA, and they're 17 there to help us go through the ISO 9001 compliance and 18 certification process. 19 So, what is Six Sigma? Well, it's a quality 20 improvement tool and it's based on a rigorous fact21 driven approach, at least that's what C.J. keeps 22 telling me it's about. And up until now we have no

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 25 1 reason to doubt him. We have to determine the 2 critical--the quality characteristics. And this really 3 where C.J. 4 disappears for hours on end during the day to 5 go to what he says are interviews. They tend to be 6 done at Starbucks, as near as I can tell. And I'm not 7 really seeing him dip into his wallet too often at the 8 Starbucks, so whatever he's doing, I'm sure he's doing 9 it, you know, he's having a good time doing it. 10 So we've done interviewing the applicant and 11 the customers. We're interviewing the internal DUE and 12 interagency customers and I'll be honest with you, I've 13 not been part of this process at all. They firewalled 14 me and Katie off from this as the managers so that what 15 they're getting in the interview process isn't somehow 16 tainted by us, either having our own preconceived ideas 17 on what this should look like. 18 The next thing that the team's going to do is 19 measure quantified performance. To then analyze using 20 the metrics and then make essentially the 21 recommendations, and then for us to implement the 22 recommendations.

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 26 1 So what I want to do now is really then get 2 into the E-licensing aspects, but before we get into 3 the E-licensing aspects I think it's important because, 4 as we're going through and before--because the E5 licensing is really where all the process improvements 6 come together, but us understanding and going through 7 the Six Sigma with regards to how we handle the 8 application and how we do our analysis and how we do 9 the paperwork is only part of it. 10 As we stated in Stage 2, there's another 11 part of it and that is the interaction with the foreign 12 governments and that's required for the secretary to 13 make the non-inimicality finding and that's where we 14 turn the process over to the State Department. So I 15 think before we go to Jeff and talk about what 16 ultimately the computer E-licensing system will look 17 like, let me pass it over to Dick, who's going to talk 18 a little bit about what State Department's role in the 19 810 process is and, 20 MR. STRATFORD: Thanks, Rich. I'm Dick 21 Stratford. I'm the director of what used to be called 22 Nuclear Energy Affairs, which means that we handle the

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 27 1 diplomatic aspects of virtually everything to do with 2 peaceful nuclear energy. These days it's called Nuclear 3 Energy Safety and Security because a couple of years 4 ago we inherited all the folks who had responsibility 5 for the nuclear safety issues. 6 There are two things I never learned to do in 7 roughly a 40 year career in mostly nuclear affairs--the 8 bad news is that I never learned to type and that's a 9 huge burden, believe it or not. The good news is I 10 never learned to do PowerPoint, so you are spared 11 slides this morning. 12 The State role in the Part 810 process is in 13 once sense limited and in another sense critical 14 because we are on the critical path. Under the law, in 15 order to issue an 810, DOE has to consult with various 16 agencies, Commerce, NRC, et cetera. But before the 17 Secretary of Energy can approve a Part 810 application, 18 he has to get the concurrence of the Secretary of 19 State. 20 Now, why are we on the critical path? Well, a 21 couple of reasons. Number one, exports are 22 fundamentally a foreign policy matter, as well as a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 28 1 trade and commercial issue. More specifically, under 2 the Nuclear Suppliers Group guidelines we are committed 3 to insure that trigger list transfers and trigger list 4 technology transfers are subject to government to 5 government commitments of, number one, peaceful uses. 6 Number two, no retransfer of the technology without 7 consent and, number three, in some cases that there 8 will be no transfer of items produced through the use 9 of the technology or items produced that are 10 replicated. 11 So, how does it all work? DOE gets a Part 12 810 application. DOE analyzes the application and does 13 a write-up. If the write-up is negative, we'll 14 probably never hear about it because they will call the 15 company and say, you really don't want a "no" letter, 16 do you? 17 However, if the analysis is positive, then 18 they send it over to us and say, you're responsible for 19 government to government foreign affairs matters, so we 20 need the relevant assurances and we need your letter of 21 consent. Will you please go get the assurances? And 22 that's what we do. We send a cable out to the embassy

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 29 1 or the relevant whatever--embassy, consulate, whatever2 -and say, for this application we need assurances of. 3 Now those assurances don't have to come from the 4 foreign ministry. They only have to come from a both 5 an agency and a person who is authorized to commit that 6 government to those assurances. 7 Now, how long does it take to get those 8 assurances? In some cases it comes back very quickly. 9 They're so used to it that we go out with a cable and 10 we might, by the end of the week, get a cable back 11 saying, Mr. So-and-So says that you have the 12 assurances, et cetera, et cetera. 13 Does it always turn around quickly? No. 14 Sometimes it can take months before we get a reply. 15 Now, who is really slow in terms of getting back to us 16 on assurances? Well, we can't really mention any 17 names, but there are two nuclear weapon states who we 18 shall say are slower than some others. 19 Now, we get the assurances back, what happens 20 next? Well, usually the next day there's a letter that 21 goes back out to DOE saying that the Department of 22 State concurs in the relevant 810 and we have the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 30 1 assurances from So-and-so in the state. And I'm the 2 person who has been signing those letters for many 3 years. 4 The relevant time frame for the Executive 5 Branch to approve an 810 is 60 days, total. Do we 6 always make it in 60 days? Most of the time yes, 7 sometimes no; back to countries that don't reply very 8 quickly. What happens if we run out of the 60 days? 9 [In the case of NRC license applications,*] Well, then, actually we have to notify Congress every

10 time and I'm the one who signs out the letters saying, 11 oh, by the way, we have a case, it's been 60 days, it 12 hasn't been approved and the reason it hasn't been 13 approved is because we have not gotten the relevant 14 assurances. 15 Now, that's the process in a nutshell. I 16 want to make clear that the government assurances 17 requirement is for all transfers of trigger list items 18 for nuclear fuel cycle use, except for de minimis 19 quantities of nuclear material. Now, I say for nuclear 20 fuel cycle use because if you have transfers of certain 21 materials for non-fuel cycle use, such as deuterium gas 22 for fiber-optic production, heavy water for deuterated

* Added by DOE/NNSA for clarification.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 31 1 compounds for pharmaceutical purposes, or depleted 2 uranium for non-nuclear industrial purposes, then we 3 don't need government to government assurances. 4 Now, what about intangible technology and 5 software? And the answer is, yes. We don't 6 distinguish between tangible and intangible. Tangible 7 would be a blueprint for building a reactor. 8 Intangible would be the scientist or engineer who knows 9 what the blueprint looks like and goes off to the other 10 country to consult and provide assistance. That's 11 intangible technology. And that person has to get a 12 Part 810 before he can do that. 13 Many years ago, in the late 1980s, there was 14 a case where somebody came to me and said, we 15 understand that there are roughly 25 Americans who are 16 consulting for utility in a country I won't mention, 17 but it would have required a Part 810 approval. What 18 are we going to do about it? This is illegal. These 19 people are committing a crime. So we thought about it 20 for not too long and said, I'll tell you what we're 21 going to do. We're going to send out a message to the 22 relevant embassy and the embassy is going to be asked

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 32 1 to go see those people, one by one, and to tell them 2 that they have two choices. They can come home within 3 a reasonable period of time--I forget what it was, six 4 weeks, two months--or if they don't, their name is 5 going to be placed on a watch list at the border and 6 when they do come home they're going to be picked up 7 and then they're going to be in trouble. Everybody came 8 home. 9 So that's just an incidence where 810 10 actually did apply to intangible technology, namely 11 somebody going abroad to assist a foreign nuclear 12 program. So, with that, that's our role in a nutshell. 13 As I said, it's a limited role, but it's a critical 14 one. Ultimately, we have to concur or the 810 can't go 15 forward. In most cases it's pro forma. All of the 16 analyses that we see are generally positive, so if you 17 get the assurances, the answer is it's easy to write 18 back very quickly and say, you have our concurrence, go 19 ahead. 20 Okay, I'm going to stop there. That's our 21 role, but I'll be happy to answer questions when we get 22 to the Q&A part.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 33 1 MR. GOOREVICH: Well, instead of me standing 2 up, I'm just going to introduce Jeff from sitting down. 3 So, as I said, we're moving ahead with 4 building an E-licensing system. An E-licensing system 5 is, as I said, is going to reflect the process 6 improvement aspects of this. And so we've turned 7 internally to our CIO's office to help us build the 8 system and that's why we've asked Jeff to come here 9 today to give us a little bit of a preview on what that 10 looks like. 11 MR. WILKINS: All right, thank you, Rich. 12 Good morning everybody. I'm glad to be here with you 13 to give you a little high level overview on the 14 approach we're taking to building an E810 E- licensing 15 system. 16 As Rich said, I'm Jeff Wilkins, I'm the 17 Associate Chief Information Officer for IT operations 18 with the NNSA CIO's office. We've been partnered up 19 with Rich and is team for about the past six months, 20 kind of getting my technical team and me up to speed a 21 little better on the existing process. The planned 22 process improvements and the way that we might sensibly

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 34 1 and iteratively leverage technology to make things 2 better going forward. 3 So, a little bit about my talk this morning. 4 We'll go into a little bit of the background. I'm sure 5 you're all well aware, and Rich has really highlighted 6 it in terms of the existing process during his talk. 7 We'll talk about the process that we will use to design 8 a system iteratively going forward. We'll talk 9 specifically about the Phase 1 objectives for the 10 system and the benefits that we expect to deliver to 11 all of the stakeholders who are involved in this 12 process and talk a little bit about specifically how it 13 will affect you going forward as stakeholders in the 14 process. 15 So, a little bit more of the background. So 16 what we've found--again, knowing nothing about 810 17 licensing prior to six months ago--we found that it 18 generally works well in terms of producing the desired 19 end result, but it faces some challenges. Some of the 20 things that Rich talked about. It could be more open, 21 it could be more transparent, it could be more 22 predictable, it could be more understandable. So

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 35 1 there's a lack of a visible feedback loop, so there's 2 the transparency piece. We could certainly stand to be 3 able to collaborate better among the different 4 stakeholders as any given application goes through the 5 process. And there is a lack of a consolidated 6 repository of information--some of the challenges that 7 Rich spoke of. 8 So what we're going to do is simply build a 9 centralized system to provide a cleaner solution to 10 manage the process. So the way that we're doing this, 11 as I've said, we've worked together to build a features 12 list and set out high level objectives. We've 13 determined the logical structure of the final solution 14 and what that's going to be. And I'll talk a little 15 bit more about this and follow on slides. 16 Essentially, there's a public piece, right, 17 that needs to be available to applicants, foreign 18 governments, other agencies, and then there's an 19 internal piece for NNSA processing. So, as you can 20 imagine, the public piece is inherently less secure and 21 would house less sensitive data. The things NNSA needs 22 to do behind the firewall will be contained in the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 36 1 other component of the system. 2 We're going to utilize a phased approach in 3 building out the system, as I said before. Phase 1 is 4 going to be focused on that public site and work on 5 really improving the transparency for the end users, 6 for the applicants. We're going to facilitate the 7 interagency review process during Phase 1. And, in 8 terms of a rough schedule, once we've finalized and 9 gotten NIS sign off on the Phase 1 requirements, we 10 expect that development process to take around 3 11 months, okay? 12 Phase 2 is going to be that internal piece to 13 streamline NNSA's processes, get everything in one 14 place, impose some standardization, and the electronic 15 repository. We expect to include the requirements 16 analysis and the build out of the initial operating 17 capability to take around six to nine months, okay? 18 And then Phase 3 is really kind of ongoing. 19 Building in additional features and functionality. 20 Enhancing and incorporating feedback from the initial 21 phases and generally improving the whole site and 22 supporting the process improvement efforts that NIS is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 37 1 undergoing. That would be, as I said, ongoing with 2 perhaps quarterly revisions and updates--releases. 3 So, again, I've used the word iteratively 4 incrementally quite a few times. You know, there are 5 quite a few examples in the federal IT space and the 6 corporate IT space, most notably Healthcare.gov 7 recently. If you try to be all things to all people 8 all at once and make a big splash, you assume a very 9 high level of risk. So, what we want to do is apply 10 technology smartly and iteratively to the most pressing 11 pain points first and then work forward. 12 If you're dealing in small chunks, it gives 13 you the opportunity to course correct in small doses 14 going forward so that eventually, when you get to the 15 end state, you're hitting the mark, okay? So we really 16 take that seriously and that's how we try to do 17 everything within our CIO shop. 18 And also, the testing, we'll be doing phase 19 testing, right? So there will be internal testing 20 first, and then we'll put it out to the stakeholders 21 for alpha and beta testing prior to release, to make 22 sure that we have the opportunity to have all of the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 38 1 feedback that we need in order to make sure that the 2 actual releases are providing the functionality and the 3 end result that you all expect. 4 So, specifically, some of the objectives and 5 benefits, as we've said over and over again: 6 transparency, so applicants will be able to 7 see in real time the current status and history of 8 their submission. So if a company has multiple 9 submissions, they'll be able to see all of their 10 records when they log in. And, as Rich mentioned, he's 11 going to build out a guide and all of those documents 12 in the associated FAQs, glossaries and things like 13 that, will be accessible via the online system where 14 they can be updated, managed, and you can access them 15 any time. 16 As far as accountability, you can track your 17 application through the process. There will be 18 auditability to comply with the ISO 9001 initiatives. 19 And so, every action in the system will have a user 20 name and a date and time stamp associated with it, so 21 that we can understand what's going on within the 22 system.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 39 1 And, again, the milestone history: you'll 2 have easy access to be able to see how long your 3 request has been in a given stage of the approval 4 process. So, if it's at State, if it's with a foreign 5 government, you can see where it is right now and how 6 long it's been at that point in the process. 7 Efficiency. We understand that right now 8 there are often duplicate copies of application 9 packages or lengthy documents that float around so that 10 different parties can review and comment on them. The 11 system will facilitate one copy. It lives in the 12 system. Everybody goes to that, rather than having to 13 manage multiple copies, manage your versions of 14 documents and things like that. You'll know when an 15 action is required. You'll get a notification. You 16 don't have to go check the system every day to see if 17 an action is required on your part. So that will be an 18 improvement. 19 Uniformity. Again, as part of having it 20 electronic, having one instance--we'll work with NIS to 21 understand what data fields, what formats, are needed 22 for each submission type so that it's as easy as

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 40 1 possible for the applicant to insure that they're 2 providing all the right information in the right 3 structure. And then, again, we'll try to make it 4 intuitive so that you don't need to take a course in 5 order to understand how to use the system. We'll use 6 standard design elements that you see out on the 7 Internet and so if you're at least surfing the web, if 8 you know how to type-- sorry, Dick--if you're doing 9 that, then you should have a pretty easy time of 10 navigating through the site, doing what you need to do. 11 And then, in this arena security is very, 12 very important. That's the major driver for developing 13 two different components of the system, right? There 14 are things that necessarily need to remain behind the 15 firewall. All of the internal things, a lot of the 16 supporting documents will need to go in on the NNSA 17 side behind the firewall, so that will be the Phase 2 18 piece. The public facing stuff, we want to make it as 19 easy as possible for self-registration, for being able 20 to access the information that you need to determine 21 the status of your application. 22 And then there will be a secure transfer of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 41 1 information between the public and the private side 2 that we manage very closely, in terms of the security. 3 But again, both components will be secured at an 4 appropriate level. All data will be encrypted and then 5 you'll only have access to the information that you 6 should have access to. Everything will be controlled on 7 a role-based basis. So folks who shouldn't have access 8 to your information, won't, okay? So we take that 9 very, very seriously and that will be a major focus of 10 how we design the system. 11 All right, so I'm moving through pretty 12 quickly. How will it affect you? It's going to 13 compliment the improved process. NIS is doing this the 14 right way. IT is not a magic bullet that can fix 15 broken processes or suboptimize processes. They're 16 doing the tough work first to improve the current 17 process, make sure that it works well and then we'll 18 automate the stuff that we need to reduce time, right? 19 Improve transparency via electronic means. 20 This is the right way to do things. And we 21 fight that battle every day. We have a lot of people 22 who believe that IT is the magic solution to fix

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 42 1 horribly broken business processes and so it's been a 2 joy to work with the team in that regard. 3 NIS has made it very clear to us that we need 4 to stress and enable the ability for the current 5 support team to still be engaged, right? We don't want 6 to facilitate the NIS team hiding behind the system, 7 right? And they've assured us that they won't do that. 8 The system won't replace that personal care that you 9 currently get, as you go through the process. It will 10 just augment the current process. 11 And again, to the iterative phase nature of 12 things, it'll be a phase transition. We're not going 13 to flip a light switch and go immediately from totally 14 paper-based to completely electronic and automated. 15 It's going to phase in over time, so that there's not 16 going to be anything too shocking or dramatic. And, 17 again, it will give us the opportunity to course 18 correct as needed. 19 And then, ultimately, presumably the desired 20 end state would minimize manual entry and minimize the 21 use of hard copy documents and work to be as secure and 22 automated as possible, okay?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 43 1 So I moved a little quickly, but I think 2 we'll have time for questions, so I look forward to 3 talking further with you. Again, thank you and we're 4 very glad to be a part of this process. 5 MS. STRANGIS: I just want to remind everyone 6 that all the presentations you see today will be 7 available on our website hopefully today, if not early 8 next week. So you'll be able to pull those up. 9 We're going to take questions now on the 10 first portion of it. We have two people with 11 microphones. If you have a question, please state your 12 name and affiliation and remember that everything's 13 being transcribed and will also be placed on our 14 website. So, right up here? 15 MR. JONES: Hi, my name is Ted Jones. I'm 16 with Nuclear Energy Institute. First, I'd like to 17 thank you for going out of your way for having this 18 second meeting today. I know it wasn't an easy thing 19 to do and the shutdown created the inconvenience of 20 extending the time period for public comment and our 21 members appreciate it. 22 Not all of them were able to be here today.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 44 1 Many of them are, so I'm asking some of these questions 2 on their behalf. We have an export controls taskforce 3 with about 45 individuals, representing more than two 4 dozen companies, many of them here. And they have been 5 guiding all of our work at NEI. 6 My first question regards the objective of 7 the process improvement. We understand that any 8 regulator wants to be efficient and to the extent 9 there's inefficiencies, there needs to be some 10 improvement, but since you mentioned in your initial 11 remarks that effective trade support is one of the 12 goals of this regulation. And since you've 13 acknowledged that it's an increasingly competitive 14 international market that we're dealing with, I'd just 15 like to start with an observation that reduction of 16 processing times can't just happen in a vacuum. We 17 actually need--it's critical that the reduction in 18 processing times close the gap in the processing times 19 of other countries equivalent approval processes. 20 And if you look at Japan, South Korea, 21 Russia, those times are 15 to 90 days for equivalent 22 processes, as a study prepared by Pillsbury for NEI

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 45 1 last year shows. So I know that we're not talking 2 right now about the SNOPR. These process improvements 3 are taking place outside of it, but I hope that they 4 can be undertaken with an eye towards closing the gap 5 and keeping our companies competitive with our 6 international rivals. 7 To that end I'd like to ask about the E8 licensing process. If there are any--acknowledging 9 that there's an iterative process of phases, you 10 mentioned that you have a features list, would DOE be 11 able to share the features list with the phases during 12 which these features have been scheduled to be 13 implemented? Because the NEI export controls taskforce 14 provided some recommendations, including some timing 15 features that I think could bring the Part 810 specific 16 authorization process a little closer into line with 17 these other countries, which have binding time limits 18 in their rules. So that's my question. 19 MR. GOOREVICH: Me then you? 20 MR. WILKINS: Yeah. 21 MR. GOOREVICH: So thanks, Ted, for the 22 question. Yeah, we're aware of the importance of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 46 1 making our process work so that our applicants can be 2 as competitive as possible. But again, one of the 3 things that I stated early on, we'll fix the things we 4 can fix. And that's our goal, to fix the things that 5 we can fix and to automate it as much as possible 6 because of the transparency and the efficiency and the 7 understandability that we want. 8 And so, what we have to do is we have to look 9 at our processes internally and our processes that are 10 required by the legal requirements that we as the 11 government and you as the applicants or you as the 12 public have because of what's based in law. So when 13 people come to us and say, well, my competitor or 14 somebody else can get something through somebody else's 15 system faster than ours, there's an element of our 16 processes that's involved in that. But there's also an 17 element of how that country's legal system and 18 regulatory system is set up. And if, for example, a 19 country allows for nuclear technology transfers to be 20 transferred under an existing bilateral framework, they 21 can probably move faster than we can. 22 But if they don't have a framework with that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 47 1 country, they probably can't transfer it at all. Where 2 our system is slightly different. It allows us to 3 transfer things to countries that you don't have a 123 4 with. 5 So there are pros and cons to everyone's 6 system and what we are trying to do is fix our system 7 to be the best that it can be, based upon the legal 8 requirements that have been laid out for us to do. So, 9 for us it's about making our system work as best as it 10 can. We understand that there's a comparative factor 11 to it, but it's not driving us to competitive factor. 12 What's driving us is making our system work better for 13 you--for the public's needs. 14 When it comes to the actual can we share? 15 I'll leave that to Jeff as to what he needs to do with 16 the development and what kind of feedback that he feels 17 he needs to make the system work. 18 MR. WILKINS: Right. So in terms of sharing 19 the feature lists as they are grouped within the 20 phases, you know, we're working through that and 21 whenever Rich is comfortable that it's suitable for 22 public dissemination, we're happy to provide that. So

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 48 1 that's your call. 2 But the thing I wanted to state is that the 3 thing that the IT system will bring is the milestone 4 reporting, right? What you have right now, as I 5 understand it, everything's anecdotal. It seems like it 6 takes country XYZ a long time to do this or it seems 7 like we're not very efficient in getting through this 8 part of the process, over which we don't have any 9 control. 10 Having an automated system with reporting and 11 tracking will provide the management information that 12 NIS needs in order to exert influence on other parties. 13 To get them to be more responsive and more timely in 14 executing their parts of the process, so that's the 15 value we want to add. 16 MR. GOOREVICH: So the answer is, Ted, yes. 17 As they make them available to us and we're in 18 agreement, then we will make it available for public 19 consumption. 20 MR. JONES: Thank you. 21 MS. STRANGIS: Over here. 22 MR. PIERCY: Thank you. Good morning,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 49 1 everyone. Craig Piercy, with the American Nuclear 2 Society. Let me echo Ted's comment in thanking you for 3 doing a second public briefing. The American Nuclear 4 Society, 12,000 members of the American nuclear 5 community--many of whom work both for U.S. 6 nuclear suppliers and also for the agencies 7 that actually regulate those suppliers through the 810 8 process. 9 My question today focuses on the issue of 10 foreign assurances. Dick, you said you've had the 11 benefit of not learning how to do PowerPoint, but you 12 did do a PowerPoint in August and in that PowerPoint 13 you talked about doing foreign assurances in accordance 14 with long-standing U.S. 15 policy and Nuclear Supplier Group guidelines. 16 I'm trying to understand a little bit more 17 about it because foreign assurances seem to be in many 18 ways the long pole in the tent here and that can really 19 contribute to the really long delays. So, I guess what 20 I'm getting at is the scope and nature of our foreign 21 assurances now, is that anywhere required in law or 22 regulation? Or is that something that's developed

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 50 1 organically over time? 2 And so, along those lines, we hear that other 3 countries move faster on foreign assurances, are they 4 asking for the same things or are we asking more? And 5 if so, why are we asking for more and is that grounded 6 someplace? 7 And then the second question I have is, is 8 there a possibility or is there a case where the State 9 can provide its concurrence to an application without 10 getting assurances? Without getting a signed foreign 11 assurance document? Thank you in advance. 12 MR. STRATFORD: If we're going to send out 13 reactors, fuel, major components for reactors, Section 14 123 of the AEA applies. And you have to have, for a 15 non-nuclear weapons state, full scope safeguards--which 16 means peaceful uses. 17 Peaceful uses and no retransfer without 18 consent are required by the Nuclear Suppliers 19 guidelines. That's something everybody has to do. 20 Whether for technology that's based in law as 21 components are, I actually don't know the answer to the 22 question. But I'm sure Rich does, since they implement

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 51 1 Part 810. 2 Assurances are the long pole in the tent. It 3 just does not take DOE that long to do the written 4 analysis and get it over to us, and if we have the 5 assurances in hand, it takes us about a day or two to 6 get the letter back to DOE. 7 Generic assurances can be done for a specific 8 list of items for specific purposes. Remember, most 9 countries are generally authorized. When a country is 10 not generally authorized it's usually because there's 11 something going on in the country that we would not 12 assist. 13 So, for example, you'll never see China or 14 Russia generally authorized for the simple reason that 15 they are nuclear weapon states. You can do anything 16 that you want with--pick a country-- Belgium, but you 17 can't do anything that you want with Russia or China 18 because there are certain places that you can't go and 19 certain places you can't assist. 20 Sometimes, when a case takes too long, we 21 will prod and say, what's the problem? And I had a 22 specific instance of that not too long ago where a U.S.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 52 1 company proposed to partner with a country; one of 2 those two states I mentioned that are sometimes a 3 little slow. And we did not get an answer for a long 4 time and DOE called up and said, what do you suppose 5 the problem is over there? 6 So, we sent out something and asked the 7 embassy to go in and say, so, what's the problem? And 8 the answer came back, well, there's actually two 9 problems. Number one, the company hasn't contacted us 10 and number two, we have no idea who the company is. 11 We've never heard of them. Now, for diplomatic reasons 12 I did not put in the cable, ask the next question, 13 which is, so why didn't you ask, instead of just 14 sitting there? 15 So what we did is call back the DOE and said, 16 call your applicant. Tell your applicant to call the 17 proposed partner and tell the proposed partner to go 18 into X-agency and see Y-person, so that Y-person will 19 know what's going on and be prepared to give the 20 assurances. And then we got the assurances. 21 Yes, it's a long pole. Yes, we have to do 22 it. And to the extent that we can find a way to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 53 1 streamline the process via generic assurances, we'll do 2 it. 3 MR. GOOREVICH: Yeah, so specifically 57b 4 does not require foreign government assurances. It 5 requires that the secretary make the non- inimicality 6 finding. I've been doing this in DOE for 23 years. 7 I've been doing 810s or working closely in this area 8 for 21 of those some years. I'm hard pressed to think 9 of a Secretary of Energy who is willing to sign off on 10 an authorization for which the State Department cannot 11 guarantee that the technology would not be 12 retransferred to somebody else, or diverted. 13 So, while it's not required in the law, it's 14 kind of hard for the secretary to make the non15 inimicality finding because if the technology was 16 diverted because the other government wasn't aware that 17 it was there and wasn't keeping an eye on it, you know, 18 think about transfers within the weapons states. And 19 then the question comes back, how was the secretary 20 able to make the non- inimicality finding and allow 21 this to happen. So it's sort of a Catch-22. 22 The issue really crystallized with the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 54 1 Nuclear Suppliers Group guidelines. And when the 2 nuclear Suppliers Group guidelines changed in 1993, to 3 add technology explicitly on the control list. So now 4 our obligations to the Nuclear Suppliers Group 5 guidelines say that we can only make the transfer when 6 we're sure of the peaceful uses. No retransfer, 7 physical protection, but that doesn't really apply in 8 the technology, and full scope safeguards. And, again, 9 in weapons states it doesn't apply in that case. 10 So we do have a commitment through the NSG. 11 It's not required by law, but then again, when we send 12 a package up to the Secretary of Energy and he says, 13 well, are we sure that the other government's aware of 14 this and going to treat this as we expect them to treat 15 it? Without the assurances the answer is, no, Mr. 16 Secretary and, you know, your guess would be as good as 17 mine as to whether a Secretary of Energy would actually 18 sign that out without it. 19 Up until now I haven't been brave enough to 20 take that risk. And, you know, whether State 21 Department would ultimately give us the concurrence 22 without it is--because of the NSG commitment--is the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 55 1 other issue. 2 MR. PIERCY: Can I, just quick, a follow- up 3 question? So, Dick, are you going to Six Sigma the 4 foreign assurances process? 5 MR. STRATFORD: You know, in all honesty, I 6 don't know what Six Sigma is, so the answer is probably 7 not. 8 [Laughter.] 9 MR. STRATFORD: But will we try to streamline 10 the process where possible? Yes. Does it generally 11 work fairly quickly? Yes. Does it not work quickly 12 all of the time? Unfortunately, yes. In which case, 13 the only thing you can do is prod them. Send out a 14 note and say, go see Mr. So- and-so or Ms. So-and-So 15 and say, so what's the problem here? 16 MS. STRANGIS: Over here. 17 MR. CATES: Hi, Dwight Cates with Fluor. This 18 presentation is impressive. I think it's clear that 19 you guys have pulled it together. And you've talked 20 about it in several presentations I've been at over the 21 past two years, but I think it's coming together at a 22 point where it appears that when this is implemented

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 56 1 you will be shortening the time it takes for Specific 2 Authorizations to get through the process. 3 The first quick questions, how many days do 4 you think you'll shorten it by, on average? What's the 5 metric goal here? 6 MR. GOOREVICH: I don't--because each one is 7 different, it's hard to say how much we'll shorten the 8 process by, but my goal is to get it from application 9 to signature within 90 days. That's published right now 10 in the Federal Register notice. 11 MR. CATES: Okay. And the second question 12 is, this is outside of the rulemaking process. It's 13 very exhaustive. You're clearly an interagency effort 14 here, but if each of you were to be replaced tomorrow, 15 how would the new administrators of this program know 16 what to follow or what the requirements are? Is there 17 going to be a DOE interagency memo? Or is there going 18 to be an order--a memorandum of understanding that kind 19 of sets this out and what your expectations are? 20 Because at the staff level you're clearly 21 trying to make this work, but it's your effort. It's 22 your office's effort, it is not a requirement, so how

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 57 1 does this live over 10, 20, 30 years? 2 MR. GOOREVICH: Well, I think the first 3 question--back to you, Dwight--is what are you offering 4 Dick and I? 5 [Laughter.] 6 MR. STRATFORD: You said you were going to 7 replace us, so we want to know what the offer is? 8 9 MR. GOOREVICH: He's not cheap, by the way. 10 Well, the NNPA of '78 requires that the executive 11 branch publish its process on export applications. So 12 Commerce, NRC--Commerce for the Nuclear Referral List, 13 NRC--us--currently have a Federal Register notice, I 14 think it's dated, like, 1982, that lays out the process 15 and how it works. So, ultimately, since we're making so 16 many changes to our process, we feel that we'll have to 17 go back and certainly update how the DOE process will 18 work and incorporate now a lot of the changes that 19 we're going to make. So we'll come out as a Federal 20 Register notice. 21 Internally, though, yes, part of the ISO 9001 22 compliance and certification is that we develop our own

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 58 1 internal processes, guidelines, guidance, et cetera. 2 Now whether that's going to be enshrined as a DOE order 3 or as an internal memo- -or how it's done and how to do 4 this internally, we have to take a look at. Quite 5 frankly, that's sort of at the end of the process 6 improvement plan. 7 We have the ability to do a DOE order if we 8 want to, but since it really only affects certain parts 9 of DOE and not all of DOE, the management tends to shy 10 away from doing actual orders. But we will have to as 11 part of the ISO 9001 compliance certification and then 12 to maintain and be in compliance and certification, we 13 will have to somehow innumerate all of these processes. 14 The interagency part will be done through the 15 Federal Register notice, so there will be actually two 16 elements that will have to be update or created to 17 enshrine that, okay? 18 MS. STRANGIS: Here and then behind you. 19 MS. MANN: Thank you. Melissa Mann with 20 URENCO. Let me just echo some of the comments we've 21 heard and really congratulate you all on the 22 professionalism of this process. This meeting, in

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 59 1 particular, I agree with Dwight, it is really 2 impressing. And we do appreciate the opportunities for 3 comment. 4 I want to get down a little nitty-grittier on 5 the E-licensing system, though, and maybe, Jeff, you 6 could comment. 7 One of the things that my company is very 8 careful about and that we spend a lot of time looking 9 at is loading sensitive information on a server and 10 then sending it off into the public. Can you talk a 11 little bit about the security features of the E12 licensing system? 13 MR. WILKINS: So essentially we're going to 14 design the front-end system, the public system, to only 15 call for the type of information which is appropriate 16 for that type of system. And then we will work with 17 Rich and his team to adapt the process, to allow for 18 the submission of more sensitive documents in a manner 19 so that they only live in the system that's behind the 20 firewall-- the component that's behind the firewall. 21 You know, we are subject to some very, very 22 strict information security requirements and that's

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 60 1 just inherent within all of NNSA. So if there's 2 anything that reaches the UCNI level or anything like 3 that, it's not going to be on the public system, right? 4 So without getting into specifics, we still have to 5 work through all of those details. We will provide a 6 very high level of assurance and, as appropriate, we 7 would be willing to share our information security 8 documents with the appropriate parties. To make sure 9 that everyone's comfortable with putting the 10 information there. 11 MR. RUDY: George Rudy, Integrated Systems 12 Technology, an independent consultant. I've got three 13 questions and I can take them one at a time or I can 14 give all three of them to you here. 15 First, if we were to make an application 16 tomorrow, use the old rules? Or is there some magic 17 date we should wait until we apply to make sure we have 18 all of the-- 19 MS. STRANGIS: That gets into the rulemaking 20 end of it? 21 MR. RUDY: Yeah. 22 MS. STRANGIS: Yeah. We're not doing that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 61 1 part now. Just process improvement questions, please. 2 Just about the presentation. 3 MR. RUDY: Okay. Okay, then maybe the next 4 question will work? If there are several technical 5 service companies and at least two or three product 6 companies that will be applying 810s, and this gets 7 back to your internal communication and making the 8 process work better, what is your recommendation on 9 their submitting their applications so that they, I'm 10 going to say, co- identify, that we are all working on 11 the same project? Is that within the question? 12 MS. STRANGIS: Yep. 13 MR. GOOREVICH: So, yeah, under the current 14 rules--and I don't think at least the process won't 15 change, as we envision the process. If there's a group 16 of companies-- 17 MR. RUDY: Synced to the same project. 18 MR. GOOREVICH: --a team is coming together 19 to need an application. There two ways. First of all, 20 we'd like to have a discussion with whoever's going to 21 be responsible for the team because there's essentially 22 two ways to do it.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 62 1 One way to do it is that somebody steps up as 2 the lead for that team and then makes the application 3 on behalf of the team. So, you know, in some larger 4 projects, like reactor builds, a team comes together 5 and they sort of identify themselves as a unique 6 person, using the legal vernacular of the term, but 7 they're different. It may be four companies and 8 they're not the companies, they are the team. They're 9 Team Maryland bidding on this project. 10 And so an application will come forward as 11 the team and then we take into account all of that. In 12 terms of the processing and how they communicate, you 13 know, the paperwork all comes in together as the team 14 paperwork and, when we implement the E-licensing 15 system, they will have a unique identifier as that 16 team. 17 The other way is, is that the companies 18 decide that for whatever reason nobody wants to step up 19 and take the licensing liability of doing that, and 20 they can all apply individually, but they ask them to 21 sort of link the project together in their applications 22 so that way, when we send it around to the interagency,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 63 1 we're saying, well, here's the first, but there's going 2 to be four more coming. It's all for this project. 3 State Department, when you go off and get the 4 assurances, let's be aware and inform the other 5 government that we're expecting four more. And when we 6 do this we ask State Department--and State Department 7 does this--to get the assurances for everyone up front 8 for the project. 9 MR. RUDY: Sure. 10 MR. GOOREVICH: So then when the other ones 11 come in, we don't actually have to wait on the 12 assurances. We have them and we can just issue the 13 paperwork. But our preference is that the team comes 14 forward because we don't want to have to send four or 15 five packages to the Secretary of Energy for 16 essentially the same activity. 17 MR. RUDY: Okay. 18 MR. GOOREVICH: But that's completely up to 19 the companies. And we understand there are business 20 reasons why they may or may not choose that route. 21 MR. RUDY: My final question, at least for 22 now, the secretary recently visited China and made

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 64 1 agreements for commercial nuclear development, both 2 within China and then selling products and projects 3 elsewhere. How does that affect all of this? I mean, 4 what is that final agreement, which I have not seen, 5 but I know that something exists? And how would it 6 affect the 810 relationships as it relates to China? 7 MR. GOOREVICH: Well, in terms of the 8 process, I haven't seen an agreement, either. So if 9 there is one where there-- 10 MR. RUDY: There was a meeting. 11 MR. GOOREVICH: A meeting, yes. An 12 agreement, I'm not aware of, but if there was a written 13 agreement between us and the Chinese that said, this is 14 how we're going to improve our processes and the 15 assurance process, that would then be factored in and 16 it would be a discussion with the State Department for 17 how we will make the process work. But again, if you 18 haven't seen it, I haven't seen it, either. 19 MR. RUDY: Something's afoot, but I don't 20 have it. 21 MR. GOOREVICH: This is Washington. 22 Everything's afoot.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 65 1 2 MS. STRANGIS: Over here, Jay? 3 MR. KRAEMER: Good morning, I'm Jay Kraemer. 4 I'm a retired lawyer. 5 MS. STRANGIS: Me, too. 6 [Laughter.] 7 MR. KRAEMER: Thank you for coming in and 8 making this presentation, which is very illuminating. 9 I have two questions and the first is for Dick. I 10 think you've put your finger exactly on it with the 11 need for additional generic assurances. I think it's 12 going to be particularly useful, in light of the 13 proposal in the SNOPR to expand the list of countries 14 requiring a specific authorizations by 77 countries. 15 But I wonder what specific plans you have at 16 this point to go forward with those generic assurances, 17 particularly in those countries-- certainly including 18 China--where the market of the next decade seems to be 19 focused, at least for new build. And in pursuing those 20 generic assurances in the principal market countries 21 abroad, what the industry can do to facilitate your 22 undertaking in that regard?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 66 1 MR. STRATFORD: Well, to be blunt, we don't 2 have any plans to go seek generic assurances from a 3 particular country. But keep in mind that where we are 4 going is that the generally authorized countries will 5 be everybody with whom we have a Section 123 agreement. 6 And the ones that require specific authorization are 7 the ones that don't. 8 Translated, for the most part, those are the 9 countries with whom we are not doing nuclear business. 10 Now, there are going to be occasions where Mr. X says, 11 I want to go off and talk to Ghana about specifics, 12 with regard to a reactor, et cetera. And I need to 13 show blueprints, et cetera, et cetera. That's going to 14 require a specific authorization and there's not much 15 generic that we're going to be doing with Ghana. 16 However, if a company were to come in and say 17 it would streamline the process for us if we could get 18 generic authorization for country X, we would certainly 19 be willing to look at it. I mean, if it's a country 20 with whom we have no concerns and they're prepared to 21 give us generic assurance to cover a long list of 22 specific activities, that would be okay. As long as we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 67 1 know what the activities and where the activity is 2 going to take place. 3 So, if a company comes in and says, I want to 4 help country X, there are six locations that they want 5 me to do things at and these are the things they want 6 me to do at these locations, the answer is, yeah, I'd 7 give that serious consideration. And probably say, 8 yeah. Let's go out and ask for the assurances, but it 9 depends on the country. 10 MR. KRAEMER: Thank you. And Jeff, my second 11 question is for you. You indicated that the computer 12 arrangements that you have would provide notice to the 13 applicant if there were some action required of the 14 applicant. And I wonder if it's practicable to provide 15 notice whenever there's a change in status? 16 MR. WILKINS: Sure. 17 MR. KRAEMER: Because, I mean, it's the 18 absence of a change in status which requires the 19 applicant to check every day. So if the applicant 20 automatically got notice, then that would make the 21 system much more useful from the applicant's 22 standpoint.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 68 1 MR. WILKINS: It's certainly doable and that 2 should be expected. You know, reminders are certainly 3 a common approach to system design, so, yeah, that's 4 fine. 5 MR. KRAEMER: Thank you very much. 6 MR. WILKINS: Sure. 7 MS. STRANGIS: Right up here. 8 MR. BLEE: David Blee, U.S. Nuclear 9 Infrastructure Council. Again, echo. We appreciate 10 the response to this and the outreach. I think it 11 importantly portends well for the future, with respect 12 to these process reforms which we think are critical, 13 and work--certainly--in tandem with the rulemaking, 14 which we'll talk about in a little while. 15 And, of course, we endorse prompt, clear, 16 predictable as the goals. I'd say the only tweak I had 17 on your comments were to move the effective nuclear 18 trade currently ranking in the fourth position to, at 19 least, the number two slot behind effective threat 20 reduction. 21 And then the process of reforms follow 22 because obviously what we're interested in is effective

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 69 1 nuclear trade, representing a consortium of 50 2 businesses to that end. In terms of--as I think some 3 of you have heard from some of the folks here, the 4 enshrinement of this process is critical, to use a word 5 that's been used. And I can understand why you don't 6 want to enshrine it in the regulation, however I think 7 it's critical to provide some definitization of that 8 process through whatever mechanism you feel is a good 9 one, since you've been doing some good play calling 10 lately. So we look forward to more in that regard. 11 As far as the--I would suggest--you know, 12 Dick, I've read a few books on Six Sigma and I'm not 13 sure what it's all about, either, but I hope there are 14 typing lessons, by the way for him in this budget. 15 [Laughter.] 16 MR. BLEE: But in terms of the--a 360 review, 17 I think, again, of what exactly is being done on the 18 international regulatory front would seem to be able to 19 be embraced by a Six Sigma review, in some respects. 20 So, again, that's always a healthy thing to do. 21 So, again, thank you for your continued 22 responsiveness and your outreach today and we look

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 70 1 forward to the coffee break and the next session. 2 MR. GOOREVICH: So, yeah, David, thanks for 3 the comments. My biggest fear coming out of this 4 meeting was exactly your comment there because now I 5 can envision C.J. saying he needs to go to Europe to 6 start interviewing people for the Six Sigma process. 7 He said next week, which now calls into 8 question C.J.'s analytical abilities because I would 9 have waited until the spring, C.J. Paris in the 10 springtime is a lot better than Paris in November. 11 You know, one of the things that I tried to 12 stress and that I think is important is, what we heard 13 from the comments. What we're now hearing as--we're 14 hearing from applicants about business is that how 15 business is being conducted is changing. It's evolving. 16 It's always evolving and that whatever process we put 17 in process today will have some flexibility in it, but 18 at some point that flexibility will end and applicants 19 will be looking for--because they're doing things 20 differently with their customers or they're doing 21 things differently with their teaming partners--will 22 say, your process is no good anymore, Rich. Fix it.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 71 1 If I'm still here, but Dwight may hire me away, so-- 2 from what I heard today. 3 So when I say enshrined, it's about insuring 4 that we all know what we're doing, but I don't want it 5 to be so set in stone that we have to go through a 6 heavy lift to adjust to be able to meet the 7 requirements of the applicants. 8 And one of the things that we've learned here 9 is that these requirements are not stagnant. It won't 10 be stagnant and we shouldn't expect them to be 11 stagnant. We should expect them to change. And so for 12 us the challenge, you know, really, not just for my 13 group, DOE, but for all of us in the U.S. Government 14 is, how do you implement regulation in an ever changing 15 world? Because the nature of regulation is that, you 16 know, we expect processes and we expect things to 17 remain the same because to be transparent, to be fair, 18 to be all those things, regulation tends to have to 19 sort of just be stagnant. So that's really the 20 challenge and it's really a larger conceptual question 21 that we're grappling with, which is, the nuclear 22 industries, it's moving fast. It's faster than we can

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 72 1 ever write regulation, so how do we implement processes 2 to add some flexibility, don't lock it in, so that we 3 can then change and evolve with the industry? 4 Hopefully, a little bit ahead of the industry so that 5 there really isn't the lag time. 6 MR. BLEE: Yeah, I think you're trying to 7 actually, in retrospect, maybe to--maybe the better 8 word is just the definitization, but schedules, 9 metrics, those sorts of things. Enshrinement would 10 connote, certainly, installation, a one-time coronation 11 or entombment. So we'd prefer not to have that. Yeah, 12 so, living, breathing, all that other good stuff. 13 MR. GOOREVICH: Yeah, entombment's a good 14 word. 15 MS. STRANGIS: Ted? 16 MR. JONES: I just want follow up a question 17 I heard Craig Piercy ask earlier. Maybe I missed the 18 answer. He, I think, asked if we are asking in the way 19 of foreign government assurances something different 20 from what other supplier countries are asking? And if 21 so, then why? 22 MR. STRATFORD: The answer is if they're a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 73 1 member of Nuclear Suppliers Group, no, because the same 2 applies to everybody. Now, I'll know better, exactly 3 what's going to happen probably within a few weeks 4 because one of the NSG governments is running a survey 5 on government to government assurances. And, as a 6 matter of fact, I've got our answers in front of me. 7 What are the forms of governmental assurances 8 required? Well, when the answer comes back to that 9 from all the members I'll know precisely what they're 10 asking. 11 Do you require assurances for all trigger 12 list items? Yes, we do. Do you require a governmental 13 assurance for intangible? Yes, we do. 14 Do you have cases where a governmental 15 assurance can be replaced by an end user statement from 16 the customer? In commerce cases, that's true and 17 sometimes an item that's on the list is being used for 18 a dual list purpose, in which case an end user 19 statement would work. 20 Do you have a target time set? Yes, we try 21 to get it done within 60 days, but assurances can take 22 longer. What's the average turn around? A few days to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 74 1 a week for most cases. 2 And do you have any suggestions for 3 streamlining the process, was the last question that 4 the country asked and the answer was that situation I 5 told you about where the country that you're asking it 6 from has no idea who you're talking about. In which 7 case there should be sort of a generic advice to all 8 companies who apply for 810s, which is tell your 9 customer to please be aware of the need for assurances 10 and tell the customer to get in contact with the 11 appropriate authorities, which I think would be good 12 advice up front, so you're not sitting there for five 13 or six weeks and we're sitting there waiting for 14 assurances that the other country doesn't want to give 15 because they don't know who you're talking about. 16 MS. STRANGIS: Let's take one more question 17 and then go to-- 18 MR. JONES: Let me add something on. 19 MS. STRANGIS: Okay. 20 MR. JONES: Just by way of clarification, 21 Dick's the outgoing chair of the Nuclear Suppliers 22 Group and a member of the troika. I chair the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 75 1 consultative group of the NSG. This was started 2 because there was a view within the group that 3 assurance processes aren't working very well for a 4 number of governments, okay? 5 So I understand certain individuals do 6 studies and kind of get some licensing data, but this 7 is because the NSG recognizes that we need more 8 information and we need to do better. 9 Now, your next question will be, well, can we 10 see the results of the survey? And the answer is no. 11 It's NSG confidential information, therefore U.S. 12 Government official use only. But certainly the 13 results of the survey is something that we're going to 14 be factoring into our process improvement as we go 15 forward. 16 Okay, I'm done now. 17 MS. STRANGIS: Okay. 18 MR. RUDY: Yes, George Rudy again. A 19 question for Mr. Wilkins. And this goes hand-in- glove 20 with the question I asked earlier regarding the 21 applications timeline. When would tracking, do you 22 think, be available so that we can be on top of what

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 76 1 we're doing? 2 MR. WILKINS: So, as I stated during my 3 presentation, sort of the expected roll-out timeline 4 for Phase 1, which is the public facing phase of it is 5 going to be T plus three months or so, if you will, 6 from the time that those requirements are codified and 7 approved by NIS. 8 At that time there will be an initial 9 operating capability of tracking. You'll have a 10 certain level of visibility into the status of your 11 application. Now, because the back end will be a 12 follow on phase, there'll be some degree of manual 13 updating on the part of NIS to put the statuses in the 14 system. That's kind of how we expect it to work, so 15 sort of T plus three months or so. You'll start to see 16 improvements in that regard. And that gets back to the 17 word I used 50,000 times during my briefing which was 18 iterative and/or incremental. 19 We want to do this in a way so that you start 20 basically immediately to see benefits, rather than 21 waiting two years for this huge project to complete 22 that, by the time two years has elapsed, will probably

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 77 1 miss the mark, right? Does that answer your question 2 well enough? 3 MR. RUDY: Yes, sir. 4 MR. WILKINS: Okay. 5 MS. STRANGIS: So keep in mind there will be 6 time later for you to provide us with more feedback, so 7 let's take about a 15 minute break. We are the 8 government, so we have no refreshments, but there's a 9 Starbucks upstairs. 10 [Break.] 11 MS. STRANGIS: So we're going to get started 12 again. If everyone would take their seats, that would 13 be great. Okay, we're going to start with the second 14 part of our presentation today and that's the proposed 15 Rulemaking Overview. So with that I will turn it over 16 once again to Rich. 17 MR. GOOREVICH: Okay, so what did we learn 18 this morning? We learned that Dick can't type and he's 19 even worse at PowerPoint, which is fine. You know, 20 I've gone--many of you have seen me give these talks 21 before and at some point I've got to give a story, so-- 22 Katie's a little nervous because we went a little long

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 78 1 the last session, but I have to give this story. 2 My wife's a teacher in Montgomery County and, 3 you know, as part of being a teacher you have to go 4 through the summer license renewals, continuing 5 education. And right after we were married and I 6 started working at DOE--probably my second or third 7 year at DOE--she had to take one on science. You know, 8 one of these summer-long things on science and this was 9 really before PowerPoint was the rage. 10 She walked in one day and the session was on 11 nuclear and there was someone from the NRC there-- 12 Brooke--and it was an engineer and he was going to talk 13 about nuclear technology and it's like a four hour 14 class in the mornings that she had to take. This guy 15 walked in with five inches of transparencies, with an 16 overhead projector, and just started. 17 He started with Transparency 1 and he went 18 four hours straight. Transparency after transparency 19 after--my wife, all she took from it was nuclear and 20 government. She came back home and then said, is that 21 what you do? And so, my wife's view for many years 22 was, that's all I did at work was just make

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 79 1 transparencies and then I'd go off to Vienna with Dick 2 and just turn over the transparencies, one after 3 another for a period of time, which sort of got me off 4 of the idea of PowerPoint because, you know, it's my 5 wife. I've got to seem at least somewhat cool to my 6 wife--not too nerdy. 7 And so the difference between me having 8 PowerPoint slides and Dick not having PowerPoint slides 9 is really a function of the fact that my staff is 10 younger than Dick's staff and they know how to use 11 PowerPoint. So that's why I have PowerPoint slides. 12 You like that one, Zach? Yeah, okay, good. 13 All right, so you guys have all seen these 14 slides before. These are from August--some of the key 15 proposed changes to the SNOPR. 16 Destination classifications. From between 17 the NOPR and the SNOPR, as I talked about in August, we 18 did not make any changes to the GA assay way that we 19 worked it out, for the majority. 20 One of the changes that we did make was that 21 all IAEA project and supply activities, such as Mexico, 22 Laguna Verde project, would remain generally

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 80 1 authorized. There are other PSAs out there. We have a 2 PSA with Jamaica, I think we have one with Chile. 3 Under the U.S. IEA agreement for cooperation, we have 4 the ability to do PSAs, and so anything that's a PSA is 5 the equivalent of a 123 and would be under the general 6 authorization list. 7 Again, as I talked about in August, one of 8 the major reasons for this comes down to the non9 inimicality finding. The issue that we see that we 10 have is that, how does the secretary make the non11 inimicality finding when he's looking at classifying 12 countries? 13 Through the 123 process, through the Non14 Proliferation Assessment Statement, the NPAS, from when 15 we submit a 123 agreement to the Hill for 16 consideration, both the Secretary of State and the 17 Secretary of Energy are signing off and saying that 18 they've made the determination that that country, that 19 end user has made essentially the non- inimicality 20 finding through the paperwork, through the NPAS to the 21 Hill. It is the only place that I know of, and that we 22 can find, where there is a written non-inimicality

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 81 1 finding by both the Secretary of Energy and the 2 Secretary of State regarding nuclear exports. 3 It is a way--the law requires the secretary 4 to make that non-inimicality finding. How does the 5 secretary make that for other countries that are not 6 doing this? Well, if we wanted to make countries, the 7 other way we could do it is we could go through every 8 country in the world and start doing it. The issue is, 9 that would be an extremely long, lengthy process and 10 still then we'd still have the issue of assuring that 11 there was Congressional oversight on these activities, 12 as well. 13 So, as one of the major reasons that we're 14 doing this. Dick talked about some exemptions to that 15 earlier. That remains in effect, but the non16 inimicality finding and meeting the requiremental law 17 is obviously a big factor in driving our requirement. 18 We'll talk about the impact of this or 19 potential impact or lack of impact, depending upon how 20 you want to look at it, in a little bit when we talk a 21 little bit more about the economic study which we were 22 not able to get into during the August meeting and we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 82 1 wanted to make time available to do that here. 2 Other proposed key changes: deemed exports 3 would be generally authorized to foreign nationals 4 employed at the U.S. nuclear facilities if the employee 5 signs confidentiality agreements. Access is authorized 6 in accordance with NRC standards and the employer 7 reports it to access to DOE. It's just a reporting 8 requirement. And we talked about the NRC standards and 9 the NRC gave us a very comprehensive and detailed 10 briefing in August as to what that means and how to go 11 about doing that. But my assumption is that most of 12 you knew how that happened anyways, but we wanted to 13 make sure that everyone was clear on that. 14 It's a major change. What we're saying is, 15 if NRC has the regulatory responsibility, the 16 regulatory responsibility for access, and the ability 17 to perform work at that site remains with the NRC and 18 essentially all we're asking is that we are just 19 informed of it, just for our own records management 20 because right now we are not informed by NRC of 21 everyone who is there on that. So, a major change 22 dealing with the deemed exports.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 83 1 Covered reactor technology. Scope is 2 changing as we've laid out. Narrow to reactor 3 technology related to SNM production, and this is 4 consistent with NRC and Commerce coverage and 5 consistent with our Nuclear Suppliers Group 6 obligations, and so those are some changes that we see, 7 moving forward. 8 Operational safety. Existing rule provides 9 for fast-track authorization for operational safety for 10 nuclear emergency assistance. The problem in the 11 current rule versus what we have in the SNOPR, based 12 upon the comments we heard is there's no definition of 13 operational safety and so we're adding a definition and 14 we're tying the definition to established safety 15 standards. 16 Before I talked about flexibility, as those 17 safety standards evolve, especially in all of the post18 Fukushima discussions, then the definition obviously 19 would evolve, as well. So, we're trying to add some 20 flexibility to keep up with where the global standard 21 is with regards to the operational safety. 22 Authorized safety exchange and benchmarking

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 84 1 programs. So these are what we heard loud and clear 2 from the proposed changes was activities where there's 3 peer reviews and benchmarking done by international 4 organizations to help with the operation of reactors 5 here in the U.S. and safeguarded reactors outside the 6 U.S. We're looking to make that easier and generally 7 authorizing those, as long as we just know about it in 8 advance. 9 And then extended DOE period. Since we're to 10 45 days, but in responses it's not 45 days for us to 11 respond, it's 45 days and if we don't respond, then 12 you're okay to go. The goal is for us to respond 13 positively within that time, but if it gets to be 45 14 days and you haven't heard from us, you'll be okay to 15 go. So it puts the onus on us, rather than the 16 applicant and helps hopefully with some predictability. 17 Other proposed changes: Commerce, NRC, and 18 State approved exports would be exempt from Part 810, 19 again to avoid duplication. Transfer of public 20 information would be generally authorized. We are 21 proposing the standardized definition to make transfers 22 exempt. Activities with remote connection to SNM would

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 85 1 be authorized or not covered--I'm sorry activities that 2 are too remote would essentially not be covered. So, 3 for example, mining and milling, not going to be 4 covered. Too indirect. 5 Medical isotope production. Although it uses 6 SNM, it is not essentially producing or developing SNM, 7 not going to be covered. 8 Fusion and a lot of--when I say back end, I 9 don't mean reprocessing, but I mean after reprocessing10 -sort of some of the disposition in transportation 11 aspects that were covered, essentially because of the 12 broad definition that we had in the NOPR, now in the 13 SNOPR, we've narrowed the definitions down on that. 14 Activities carried out by IAEA personnel 15 would be generally authorized, if they're working for 16 the IAEA, except employees working on an S&T enrichment 17 and reprocessing. And that's because of Section 127 18 and 128 of the Atomic Energy Act that does not allow us 19 that authorization under 57b. 20 Commenters proposals that are not being 21 proposed in the SNOPR. We got into some ideas about 22 deregulating activities of foreign affiliates and then

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 86 1 with the definition of a foreign affiliate that had a 2 certain percentage of ownership or not. 3 You know, when we looked at this and we 4 looked at our interpretations that we've made in the 5 past with the application of 57b, the law and the 6 Congressional Record does not provide us--when the law 7 was created--provide us any guidance on how much-- 8 whether it's U.S. technology or foreign technology. 9 All it says is that a U.S. person providing that 10 assistance and, up until now, the rule and the law have 11 meant any technology regardless of the ownership. 12 It's the person doing the activity, it's not 13 the ownership of the technology and so we don't feel 14 that at this time that we can make that change to 15 incorporate a percentage of ownership on a technology 16 or on assistance because it's still the U.S. person 17 providing it. And so, it gets back to what 57b says 18 that caused us to have some pause on incorporating that 19 into the SNOPR. 20 Persons with dual citizenship, based on the 21 most recent or current residence: here, this was--and 22 I'll be honest with you, this is something that we've

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 87 1 been going back and forth on for a long time, even 2 before the rulemaking, as we get into this. The issue 3 ultimately doesn't come down to the law, it comes down 4 to our NPT obligations. And, essentially, who takes 5 responsibility for this person. So, a person with dual 6 citizenship, really, who does he represent in what's 7 going on? And given our requirements and given UN 8 sanctions, you know, because quite frankly a lot of 9 these cases we get tend to be people who have been 10 sanctioned by the UN, or non-NPT parties having another 11 citizenship and residing in another country, but are 12 not a full citizen of that country. And there are 13 countries that give passports out that are not 14 citizens, or maintain citizenship of both countries. 15 So if we don't really understand who is 16 responsible, which government is taking responsibility 17 for the recipient, it makes it very hard for us to try 18 and implement the requirements of the law. And so, for 19 us, we feel that because of treaty obligations, because 20 of sanctions, obligations, and because of 57b at this 21 time we really could not include--or this time we had 22 to take into account all of the citizenships of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 88 1 individuals, if the recipient is there. 2 Now, having said that, I think what's clear 3 though is that we have to define who the person is in 4 the recipient country. So, for example, if it's a 5 Canadian company and there happens to be a person who 6 works at that Canadian company who is not Canadian and 7 comes from a specific authorized country, the transfer 8 is to the Canadian company. The Canadian company is 9 the person, not every employee in that company. 10 I know there's been some discussion, in other 11 public meetings that 810 may be applied to mean the 12 citizenship of every employee in a particular company, 13 but if we can determine through the application that a 14 company in another country is the person who is 15 responsible for the receipt of the technology, we will 16 not and do not take into account the citizenship of 17 every employee at that company. 18 General authorization of the trial, sales, 19 marketing, and sourcing information, again, we don't 20 really have much ability because of the way 57b writing 21 to have considered it at this time. And then, sort of 22 the flip of the first point on the foreign owned, there

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 89 1 was a proposal on generally authorizing something that 2 is Americanized. And, again, it's the same 3 considerations that we had to take into account. 4 So, with that--kind of that's the overview of 5 SNOPR changes. I didn't want to spend a lot of time 6 because the SNOPR's been out for a lot of comment. I 7 think we want to use as much time to get the feedback 8 from you guys on what you think about the SNOPR and I 9 wanted to make sure that we had time to talk about 10 something that was of interest to everyone at the 11 August meeting that we didn't have a chance to and that 12 was the economic impact analysis that was done as part 13 of our submission to ONB of the SNOPR. So, with that, 14 what I'd like to do is turn it over to Tom Wood and 15 Chris Toomey from PNNL, one of our laboratories who 16 work for the Department of Commerce on performing the 17 economic impact analysis. So, let me give it to Tom. 18 MR. WOOD: Thanks, Rich. I'm just getting it 19 out of the way to get out of the beam from the light. 20 I'm Tom Wood, my colleague Chris Toomey and I were the 21 principle analysts and authors of the economic impact 22 analysis that was incorporated in the SNOPR. It was

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 90 1 done between the publication of the NOPR and the SNOPR, 2 so we came a little late to the party, but I think we 3 had plenty of time to look hard at the problem. 4 As Rich said, PNNL is one of many labs that 5 support the NNSA export control and policy functions 6 routinely. What I'd like to do today and I hopefully 7 can do this briefly, so we have time for questions, is 8 just to frame the problem a little so you understand 9 the questions that we attempted to address in the 10 economic impact analysis and then let Chris talk about 11 the actual calculation of the direction and magnitude 12 of the impact. 13 And I think if you understand the question 14 that will help you make the appropriate input and 15 comments and we want to listen very carefully to your 16 comments. 17 So the scope of the study was generally 18 focused on predicting the measurable impacts of the 19 proposed regulatory change. The principle feature of 20 the regulatory change that we would expect to drive 21 these impacts is this reclassification of country 22 status for the 80 affected countries. Some countries

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 91 1 moving from SA to GA status and some countries moving 2 from GA to SA status. 3 We worked on this problem for several months 4 in this current fiscal year. We got a lot of support 5 and a lot of very insightful and critical coordination 6 collaboration with the Department of Commerce ITA 7 economic staff, led by Joe Flynn and we're very 8 grateful for that. We think it improved the product 9 quite a bit. 10 So, for today, I'm going to talk briefly 11 about conceptual foundations. Chris is going to talk 12 about the actual calculation and quantitative impact. 13 The first point I would like to make is that 14 the scale of the affected markets is actually pretty 15 small compared to the universe of global nuclear trade. 16 This is a pie chart that shows a hypothetical nuclear 17 trade scenario for the next roughly two decades that 18 counts trade basically by the volume or the number of 19 gigawatt electrical capacity in nuclear reactors that 20 is projected to be realized in the world. 21 Now, this particular projection underlying 22 this viewgraph was by UxC, but as you'll see later

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 92 1 there is some other projections we considered, as well. 2 The two very thin slices of the pie at the top 3 represent the trade in the countries that are affected 4 under the proposed regulation. 5 The green slice represents countries for whom 6 810 status is unchanged at SA. The orange slice is 7 unchanged GA countries. Much of the question that we 8 wrestled with in this economic impact analysis dealt 9 with the relative magnitudes of the two small slices, 10 that is the blue and yellow slice, in terms of whether 11 affected trade moving in the direction of SA to GA was 12 larger or smaller than the reverse. But as a starting 13 point, I think it's good to realize the scale of those 14 changes is much less than the global nuclear trade 15 considered as a whole. 16 Another point that I want to emphasize just 17 in starting is that, in a sense, we are analyzing 18 economic impact for an undefined end state. In the 19 sense that we are comparing competitiveness or the 20 integrity of our export process under SA and GA and 21 that we're dealing with historical statistics for the 22 existing SA process, rather than the process that will

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 93 1 come out of the process improvement efforts. And so, 2 in that sense we had to be somewhat flexible and 3 parametric in doing the impact analysis. 4 So, really, the conceptual basis is pretty 5 simple and it's that this relatively lengthy, opaque, 6 uncertain and unclear process under SA is a competitive 7 disadvantage in some cases and we need to understand as 8 far as we can the extent to which that is so. 9 The statistics we had were from a database 10 called the Proprietary Export Database, which really 11 covered about three and a half years of individual 12 transactions in the SA process, in great detail. We 13 didn't have comparative statistics for GA transactions. 14 We had aggregate statistics for GA transactions. 15 I think the key insight in the study--and 16 there may be some discussion of this, but the 17 assumption we made is that whatever impact there is in 18 moving a given country from SA to GA, it would be 19 reversed if you moved the country back in the other 20 direction, so that the effect or the mechanism that 21 causes economic impact is symmetric and that's a key 22 assumption because what it tells you is that the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 94 1 direction of overall economic impact of the proposed 2 regulation is really just a function of the relative 3 trade volumes for those two sets of countries. 4 It's not a function of the extent to which a 5 particular transaction is disadvantaged under a given 6 set of SA rules. As I said earlier, the data that we 7 used is about three and half years of data on specific 8 transactions that were in and had moved through a 9 specific authorization queue. This database describe 10 the nature of each export in some detail. It described 11 the estimated or proposed by the vendor--or expected 12 dollar volume of that export transaction. It tracked 13 the status of approval and denial, if any dates. 14 There were 97 transactions. The average 15 annual dollar volume of this data was about $2 billion 16 a year. 17 So, when looking at this data--and we looked 18 at it in some detail, including familiarizing ourselves 19 with the nature of the transactions and how they had 20 faired in the process, it was very clear from reading 21 the documentation about individual transactions, that 22 there are three drivers for this trade.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 95 1 One is the extent to which countries are 2 planning nuclear power. A lot of this trade is 3 associated with plans for new plants and we were able 4 to identify a subset of the 97 transactions who fell in 5 that category. Similarly, the volume of construction 6 activity is a big driver and it was very clear which 7 transactions were associated with actual construction 8 of plants. 9 Finally, there is some technology that is 10 used in the operation of a plant. Fuel technology, 11 safety technology associated with the continuing 12 operation of plants. That was also easy to identify in 13 the database. So the basic starting point for the 14 quantitative analysis was to sort this set of 15 transactions into those three categories and then 16 conduct a statistical analysis. 17 So, at this point, I'm going to let Chris 18 take over and describe that analysis. We will both be 19 available for questions. 20 MR. TOOMEY: Thanks, Tom. So, building on 21 what Tom has mentioned and described qualitatively, 22 where we started was taking those three categories of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 96 1 trade and trying to identify what is the most relevant 2 time span to do this analysis. And, as we all know, we 3 can't predict the future and that, as Rich has 4 mentioned many times, the future is constantly evolving 5 and probably that evolution is accelerating, which 6 makes the prediction of trade patterns very difficult. 7 However, there's a lot of information out 8 there in the private sector about current market shares 9 and projections of nuclear growth over a defined set of 10 time. And most of those tend to coalesce around the 11 2013 to 2030 range and we were pretty comfortable with 12 that time span, given that it was consistent between 13 the projections and anything beyond that started to get 14 a little bit hazy. 15 Some key assumptions that we made is that the 16 U.S. industry remains as competitive in nuclear 17 technology markets as it has been in the period of 18 record in the database. And that the global trade 19 volumes will evolve consistent with the range of 20 nuclear energy forecasts. 21 When I say, a range, we looked at quite a few 22 and I'll show you the chart of the ones that we

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 97 1 considered. Taking the qualitative understanding of 2 the types of trade combined with the export dollar 3 volumes that had observed in the PED, we were able to 4 derive a series of base rates. And basically what this 5 means is that we could estimate the dollar value per 6 megawatt for each type of trade. So there's a dollar 7 per megawatt for existing power M&O capacity. There's 8 a dollar per megawatt for every megawatt under 9 construction, and there's a dollar per megawatt for 10 planned or future construction. 11 So we took that data and, as you can see 12 here, we derived these rates. What you'll notice is 13 that the future dollars are worth more than current 14 activities, so the value of trade for existing reactors 15 is fairly low. Construction megawatts are fairly 16 higher and even higher is the planned, projected 17 megawatts. So this does match up with what we were 18 seeing in the pie chart earlier, but this was the basis 19 for all of our estimates. 20 This was then combined with a series of 21 nuclear projections at the country level, which we were 22 able to match up with the SA to GA and GA to SA lists.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 98 1 Just as a reminder, looking at historical 2 nuclear power growth, you know it's been fairly 3 consistent over the last decade or so. Not large, but 4 consistent. We've noted the three famous nuclear 5 incidents, Three Mile Island, Chernobyl, and Fukushima. 6 Obviously, we don't have any information on nuclear 7 growth past Fukushima, but the previous history is 8 fairly instructive in that things are going to be 9 slightly steady. The won't be level, but they will be 10 steady. 11 Looking at the accepted industrial and 12 academic forecasts for the growth of nuclear power, 13 what you see on the left is where the IAEA has tracked 14 up to today and then on the right hand side, in the 15 different colors, are the different projections that we 16 were able to look at to bound our thinking. We have 17 data from WNAH, from UxC, from EIA, as well as NAC and 18 ERI. 19 Some of these data were at aggregate levels, 20 some of these data were at country levels. We were able 21 to use WNA, UxC, NAC to match up our base rates with 22 the country level information so that we could create

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 99 1 the projections that are kind of the center piece of 2 the economic analysis. 3 As I mentioned, WNA, we used both the high 4 and low cases, but as you might have noticed before, 5 WNA High and WNA Low are quite divergent. We also used 6 UxC and data from National Insurance Corporation. And 7 both statistically and within the eye test, WNA Low, 8 UxC, and NAC seem to all coalesce around a series of 9 likely futures. We did, again, look at WNA High and 10 there is an assessment of that projection in the 11 economic analysis you can find online. And we found it 12 to be unlikely sensitivity case, however, it is 13 presented here for sake of completeness. 14 Again, when we take the value at the base 15 rates for each of the countries within each forecast 16 and then aggregated it at the country category and then 17 averaged it both per year, as well as presenting the 18 aggregate number, you can see that trade going from 19 countries that are going from GA to SA is dominated by 20 trade going the other direction. 21 The three countries in the SA to GA category 22 both at an annual average level and in aggregate over

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 100 1 the time period we assessed is significantly larger 2 than the countries in the other category. Again, WNA 3 High reverses that trend, however that particular 4 projection incorporates again the upper bound of 5 perfect outcomes in the nuclear industry in countries 6 that are primarily in the GA to SA category. But 7 again, we feel that the numbers in the first three 8 categories are fairly convincing in that the SA to GA 9 trade, the benefits accrued from those particular sets 10 of countries far outweigh the relative trade disruption 11 going the other direction. 12 As Tom mentioned, there was a component of 13 this where we were dealing with an uncertain future and 14 what we tried to do is understand, or at least get our 15 hands around the potential impacts of those 16 uncertainties. So as these processes improve, as this 17 particular regulation gets implemented, the benefits 18 will begin to accrue and we didn't-- obviously, we 19 can't predict how much or how for how long, so we just 20 did a set of parametric analyses to look at the net 21 impact based on potential trade growth in the SA to GA 22 countries, again, amongst the different projections.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 101 1 And again, this does bear out that the SA to 2 GA benefit to nuclear industry far outweighs what you 3 would see going the other direction. Again, the details 4 of this calculation are found in the report, but again 5 we're trying to grapple with that question of 6 uncertainty. We use between 10 percent and 40 percent 7 just as a bounding case, but at the end of the day what 8 we found is that the way the rule was constructed and 9 the countries that are included in the recent generally 10 authorized update are where nuclear growth is going to 11 be happening, combined with the pie chart at the 12 beginning in that the majority of trade in high volume 13 countries is unaffected. We have found that the 14 economic benefits are potentially accruing to nuclear 15 industry are high and far outweigh what potential 16 disruption we may see in the 77 countries moving from 17 GA to SA. 18 As Tom mentioned, we'd be happy to take any 19 questions that you may have on process, on conclusions, 20 or otherwise. Thank you. 21 MS. STRANGIS: Okay, so we are going to open 22 it up now and then at the end we'll have a few closing

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 102 1 remarks from the lovely Joyce Connery, who is here. 2 You'll notice the panel is a little cozy down here, so 3 Dick Stratford has moved up here, but if he needs to 4 address anything specifically, we'll just get a 5 microphone over to him. 6 So, right now we're really here to hear from 7 you. What do you think of the rule? What kind of 8 feedback can you give to us? What would you like us to 9 think about, in terms of the final rule? You know 10 there are certain things we can't answer, so that's why 11 we're really looking for your comments. So, anyone? 12 [No response.] 13 MS. STRANGIS: No way. 14 MR. JONES: Hi, Ted Jones with Nuclear Energy 15 Institute. I have a list of questions provided by some 16 of the members of our taskforce who couldn't be here 17 today, so if no one else asks them, I'll come back. 18 But I wanted to ask, just since the economic 19 impact assessment presentation was just done, something 20 about that. First, thank you for conducting the 21 assessment. We thought in 2011 an economic impact 22 assessment was appropriate and I think you've

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 103 1 definitely cured that problem with the NOPR and getting 2 this done. However, we do disagree with some of the 3 conclusions based on an analysis that we had made of 4 your assessment by UxC, which is one of your sources, 5 of course. 6 I'm not going to get into that, you'll see it 7 with the industry comment letter that we submit next 8 week, I think. But it did find that there was 9 insufficient empirical data to support the conclusions. 10 The UxC said that the assessment underestimated the 11 commercial impact of shifting countries from general 12 authorization to specific authorization. And 13 overestimated the change in moving a country from 14 specific to general authorization. And then, finally, 15 it found that there was omission of some key additional 16 economic impacts and I wanted to ask a question just 17 about that last point. Did you consider in the study 18 the economic impact of workforce constraints and supply 19 chain constraints as a result of the SNOPR? 20 Such constraints would predictably result 21 from reclassifying 77 countries to require specific 22 authorization. I'm talking about on the one hand the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 104 1 ability of companies to employ qualified personnel from 2 all over the world who've got citizenship in these 77 3 countries. And, on the other hand, the ability to 4 access the whole global supply chain, which is 5 expanding. And to use shops and be competitive, 6 whether these countries are developing nuclear power or 7 not, they still have-- 8 MR. WOOD: Let me respond first to the first 9 part of that comment and question, which I understand, 10 and then maybe clarify the second part, which I don't. 11 First, we did not estimate the impact of 12 moving from GA to SA or the impact from moving from SA 13 in the reverse direction. And the reason for that is, 14 the database was only on SA transactions. And so that 15 was the base case. 16 What we observed and what I will insist is a 17 key feature of this whole problem is that there's no 18 reason to expect that effect not to be reversible or 19 not to be symmetric. And so if a given transaction 20 would have a 5 percent lower probability of being 21 successfully executed under SA rules than under GA 22 rules, then the reverse is true. It's going to have a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 105 1 5 percent better chance if you had reclassified in the 2 opposite direction. 3 So we really did not estimate the strength of 4 that effect. All that we estimated was the underlying 5 trade volumes in the two categories of countries and if 6 you think about the situation with the SNOPR and the 7 process improvement, that's really all we could have 8 done because the end state that we're talking about is 9 not the existing SA process. The data that we had was 10 on the existing SA process and so the end state under 11 an improved SA process will presumably not be quite as 12 bleak as it would have been under the existing process, 13 but you do understand the distinction there. And I 14 will still, once again, insist that that effect, 15 whatever its magnitude, has got to be symmetric. If you 16 gain it going one way, you lose it going the other. 17 And since the countries are moving in both 18 directions, you have to account for both of those 19 possibilities. 20 The second part of your question relating to 21 workforce constraints in SA countries--I think they are 22 significant. I don't see how they are differentially

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 106 1 relevant to SA trade or GA trade and since that's 2 really what we're trying to measure, I don't see 3 exactly how I could incorporate that into the 4 calculation. Do you want to elaborate on that a little 5 bit? 6 MR. JONES: What we've heard from companies 7 is that they may not be selling a nuclear power plant 8 to Singapore, but they have operations there, they have 9 shops that do work as sub- suppliers that they will 10 probably not be able to access. And that's the supply 11 chain side. 12 And then you have the human resources issue, 13 which is, you know, of all these countries-- many of 14 them not developing nuclear power, never even 15 considering it. Maybe not even having shops, there may 16 none the less be-- 17 MS. STRANGIS: Can you hold it closer, 18 please? It's for the transcription. 19 MR. JONES: Yeah. There may be nonetheless 20 be foreign nationals of these countries that are 21 qualified personnel. And given that you're only moving 22 three countries from specific to general authorization,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 107 1 but a net of 77 in the other direction, it's probably 2 going to have--I mean, presumably, I think it would 3 have a much larger impact--negative impact. 4 MR. WOOD: Well, once again, you know, those 5 constraints are very real and very important to the 6 industry, but I don't see that they're differentially 7 relevant in a GA transaction, in a SA transaction. 8 They are constraints and they do limit your ability to 9 do effective business. They also limit the ability of 10 the competition to do effective business and they are 11 no different under a GA process than they are under an 12 SA process, so once again I'm not getting the 13 connection maybe that I need to understand for that. 14 The second observation is that the SA process 15 that we are moving to would hopefully be more 16 transparent, quicker, and more understandable. And 17 might allow you to cope with those constraints in a 18 more effective fashion than the existing process. But, 19 you're right, we did not include that as a quantitative 20 factor in the calculation. 21 MS. STRANGIS: Anyone else have any 22 questions, comments, feedback?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 108 1 [No response.] 2 MS. STRANGIS: Ted, did you have more? 3 MR. BLEE: Sure, I think there is a lot of 4 logic and rationale to all of this. This is certainly 5 a vast improvement over both the process and also the 6 proposed rule. I think from the first one and it's 7 great to see the economic analysis behind this. 8 The one--and I understand the one thing that, 9 again, we don't necessarily have an answer for. We'll 10 probably include it in our comments is, you generally 11 follow the 1, 2, 3s in a general authorization. That's 12 all rational, except when it comes to weapon states-- 13 and, of course, China and India. 14 So taking it up to 30,000 kilometers, there 15 are 150 reactors probably being built there by 2030, 16 half of what is projected. And we understand the Hyde 17 Act in India, and all of that. Is there any kind of 18 hybrid approach--and maybe you can't answer this today, 19 but--hybrid or intermediate approach that can be 20 considered there where you could do a triaging of--some 21 things will have to require specific authorization 22 because they're sort of in a bit of a hybrid zone, if

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 109 1 you know what I mean? 2 Do you follow? 3 MR. GOOREVICH: So, yeah, I get it. I think 4 what I'm hearing you say is--or the question that 5 you're asking is really, I think, something that Dick 6 touched upon in the first part and it's really more a 7 process question than it is a SNOPR question. Which 8 is, if we see that there's a need to somehow address 9 transactions with an individual country and to be able 10 to try and fix our processes, are we willing to do 11 that? 12 And I think what I heard Dick say, and I 13 think what everyone heard Dick say is, yes. We are 14 willing to look at how to work with countries when 15 there isn't a demonstrated need to do that and that we 16 will attempt to try and find a way to insure that we're 17 not unduly burdening legitimate nuclear trade. So I 18 view that more as a process question than a question 19 about the rule. But the answer is, I think, yes. 20 MS. STRANGIS: Anyone else? Over here. And 21 please remember to state your name and affiliation. 22 MR. MARKUS: Yes, hi, Stephen Markus with

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 110 1 Pillsbury. I wanted to ask a question with regard to 2 the reclassification and specifically, I guess, the 3 legal and non-proliferation basis for reclassifying the 4 GA to SA? We've heard from Rich that essentially 5 there's a basis in the Atomic Energy Act for--or a need 6 to incorporate a non- inimicality finding and that 7 essentially will stem from the non-proliferation 8 assessment statement that accompanies a 123 agreement 9 with a partner country. 10 I guess my question has two parts. One, 11 could you elaborate a little bit on the basis for 12 changing the status from GA to SA for the 77 countries, 13 on this new basis given that this process and legal 14 structure has been in place for some time now. 15 And secondly, are there some other mechanisms 16 that might be available other than 123 agreements that 17 might provide the basis for the non-inimicality finding 18 that would enable a country to reach general 19 authorization status? 20 MR. GOOREVICH: Okay. So what I think I 21 heard you say--see, I have to do this so that way 22 Preeti doesn't get upset with me. What I think I heard

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 111 1 you say was, where in the SNOPR have we talked about 2 this? And I think that in the SNOPR we've talked about 3 the justifications associated with why and how we're 4 laying this out. 5 I think what's clear and what we're trying to 6 say in the SNOPR that we're trying very hard to stick 7 to and to comply with 57b. Now the secretary has to 8 make a non-inimicality finding, that's clear in the 9 law. How he goes about doing that and whether there's 10 other ways than a 123 agreement and a NPAS, I believe 11 we've said in the SNOPR that, yes, we would consider 12 that--other ways to do that. 13 non-inimicality finding about the recipient 14 country and it has to be concurred upon by the 15 Department of State. 16 If that happens, then through the 17 Administrative Procedures Act we could move a country 18 from an SA list to a GA list. So, you know, I think 19 the SNOPR does a very good job of laying that out, but 20 I think you're asking the question, have we considered 21 that there are other ways and the answer I think we've 22 said in the SNOPR is, yes, we would consider other

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 112 1 means besides just the NPAS and the 123. Exactly what 2 those are though, we haven't elaborated on and if it 3 presents itself in an opportunity, we'll certainly try 4 to identify those moving forward. 5 MS. STRANGIS: Other questions over here? 6 MR. MADRIGAL: Hi, Joshua Madrigal with 7 AREVA. So I have a couple of questions and they may 8 require some follow-up, so I apologize in advance. 9 But, you know, I wanted to say, as most commenters 10 have, thank you for holding this meeting. I think it's 11 really important because there's a lot of information 12 that we didn't have at the last meeting that we should 13 try to understand in this meeting. 14 So let me start with the economic analysis. 15 Now, we have some questions perhaps that are not as 16 clear and whoever wants to field this, please feel free 17 to, but I'm wondering, in the economic analysis itself 18 is there any value that's attached--what specific value 19 is attached to trade with, let's say, X-country that's 20 under specific authorization? How do you calculate the 21 value of trade with that country? Is it purely in 22 terms of revenue and that's it, or are you including

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 113 1 additional sources of income? 2 So what I'm thinking of specifically is all 3 of the attendant value of worth that may come with 4 starting that initial--let's say it's planning and 5 constructing a power plant. How much revenue is 6 included in your projections? 7 MR. WOOD: Yeah, good question. We perhaps 8 should have been more explicit about that, but the 9 metric we used was the prospective U.S. 10 technology export trade that would be 11 associated with each country and with each scenario. 12 And that was derived from the historical record of how 13 much trade had occurred in each of the three categories 14 we talked about. 15 Now, that's not to say that there won't be 16 other benefits attendant on those exports--that they 17 would generate yet more business, or yet more benefits 18 of some nature in the future. I think the implicit 19 assumption is that whatever those benefits might be, 20 they would be proportional to the dollar volume of the 21 trade itself. So that was our primary metric. 22 MR. MADRIGAL: Great. Okay, if I could ask a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 114 1 follow-on question to that? I think that's really 2 important because we're going back to the database. 3 Now, do I understand correctly the database covers a 4 four-year period? 5 MR. WOOD: It's about 3-1/2. 6 MR. MADRIGAL: Three and a half. And that 3- 7 1/2-year period roughly corresponds with a global 8 economic recession, am I to understand that correctly? 9 MR. WOOD: Yes, you're correct about that. 10 MR. MADRIGAL: Okay, if we could--what caveat 11 then would you place on the project impact, given that 12 the that data we're relying on, given that the 13 projections are coming effectively from a period of 14 soft economic growth and then also--I want to tie this 15 issue as well--the projections we have, a high 16 projection, we have a low projection. We talked about 17 how those roughly correspond, except for the high 18 projection in terms of output to 2030. 19 I wonder if you could go into those 20 particular assumptions though, in terms of whether you 21 think that projection needs to be relooked at, given 22 that--if I'm remembering correctly, a lot of studies

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 115 1 you cite are from 2011, right? The WNA report is from 2 2011, should that-- 3 MR. WOOD: Yeah, the vintage of all of these 4 forecasts was 2011 or 2012, in some cases. Your 5 question about the recession and its significance is a 6 good question. And what one would expect is that the 7 dollar volume base rates for each of these three 8 categories of trade might be depressed during that 9 period, relative to more normal economic times. 10 And you might even conjecture that they would 11 be depressed--that some of them would be more depressed 12 than others. You know, the spending on planned plants 13 is perhaps more discretionary than the spending on 14 construction once you've started construction. And so 15 there could be effects of the recession that would skew 16 those base rates. 17 I think the key thing for us is that the base 18 rates, I think, are a relatively good empirical 19 starting point. The comment was made that the data is 20 insufficient, well, that's about the only data that 21 really bares directly on the volume of nuclear 22 technology trade.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 116 1 If you look at published statistics on 2 nuclear trade it includes a much broader spectrum of 3 goods and services than is regulated under 810. So you 4 can't have it both ways. You can't have comprehensive 5 data and a focus on the regulated trade. And we opted 6 to take data strictly from the regulated trade. 7 MR. MADRIGAL: If I may, just one last 8 follow-on question on this? Why not include a 9 multiplier fact, then? Why rely solely on what we now 10 is a data set that reflects a soft period of soft 11 economic growth? Why not include what you said wasn't 12 included? 13 I mean, we could quibble about what the 14 multiplier fact is, but why not include that in the 15 study? 16 MR. WOOD: We could do that. It's not hard 17 to do that. It would not change the answer in terms of 18 the direction of economic impact, so it's relatively 19 straight forward sensitivity thing to examine that 20 question. And if Rich would like to do that, we'd be 21 happy to help him do that, but it's not going to change 22 your conclusion about the direction of the impact.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 117 1 MS. STRANGIS: So Joyce Connery has to get 2 back to the White House, so we're going to let her give 3 her comments now and then we have the room until 1:00 4 o'clock, so if people want to stay around after that 5 and provide more feedback, they're welcome to do that. 6 MS. CONNERY: Hi, sorry. I didn't mean to 7 interrupt the flow of the conversation on the economic 8 impact study, which sounds like a fascinating 9 conversation for the economists in the room. 10 Anyway, I'm Joyce Connery. I'm the director 11 of Nuclear Energy Policy at the White House. I'm sure 12 most of you know me. The last time we had this 13 meeting, I didn't have dispensation to speak, so Rich 14 spoke for me. When the White House heard that they 15 said, oh, we'll let you speak this time because we 16 don't want Rich speaking for you. 17 [Laughter.] 18 MS. CONNERY: Anyway, and then-- 19 MR. GOOREVICH: It was the clearest you 20 sounded in years. 21 [Laughter.] 22 MS. CONNERY: Exactly, exactly. You couldn't

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 118 1 even see my lips moving. Anyway, I do have to leave. 2 Not to go back to the White House. I'm actually running 3 a half marathon in Richmond tomorrow and my husband's 4 outside waiting to pick me up, so I apologize for 5 having to run. 6 But I do want to extend my congratulations 7 and thanks to the interagency team who have worked 8 tirelessly to put this together. And we've had a 9 number of bumps in the road, to include a government 10 shutdown which was not planned to forestall the last 11 meeting. It was coincidental and accidental. 12 But I think the main points that I'd like to 13 leave you with today, other than that we are very 14 focused on this at the White House and focused on 15 getting this right for the future of our non16 proliferation regimes, as well as for the future of 17 nuclear commerce. And I think the main points that I'd 18 like to leave you with--there's one, we heard you 19 between the last SNOPR and this one. I think you can 20 see a lot of your comments have been incorporated and 21 we've made a lot of efforts to not only fix the SNOPR 22 to address your comments, but also to address the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 119 1 processes that were constraining our activities prior 2 to this. 3 So both the process and the content of the 4 rule, I think, are something that we've been focused 5 on, thanks to your comments. 6 I'd also like to point out that this is an 7 interagency effort. While Rich tends to be the face of 8 this operation, you'll see that the interagency is 9 sitting in front of you and that's because we work 10 together to make sure that we got this right. And 11 there were some heated arguments amongst ourselves, as 12 well, but I think we all stand by the product that 13 we've come to, so far. 14 And we've looked at all the aspects of this 15 to include competitiveness, as well as the non16 proliferation aspects to make sure that we got the 17 balance correct. 18 So, again, a great deal of work has gone into 19 this. We've been as transparent as possible, we've 20 answered as many questions as possible, we've made Rich 21 available, as well as the interagency, and I personally 22 feel committed to this process going forward. And once

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 120 1 we get to a point of a final rule, we also want to make 2 sure that we continue to do outreach to make sure that 3 the companies are comfortable with what the rule 4 changes are and that they can get through the 5 application processes without any problems. 6 So what I would ask of you, however, is also 7 that you are transparent with us. That if you have 8 comments or concerns that you come to us through the 9 process that we've set forward in the rulemaking and-- 10 you don't have to go through another organization to 11 present us your comments. If you have comments, present 12 them to us so that we know who you are and that you 13 stand by them. 14 So, with that, I'm going to turn it back over 15 to the question and answer period and hope that you 16 have a productive afternoon. Thanks. 17 MS. STRANGIS: I think there's another 18 question over here. 19 MR. PIERCY: Craig Piercy, American Nuclear 20 Society. Not a question, but just more of an overall 21 comment. I think we want to echo the others in 22 congratulating you the interagency team in a much

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 121 1 improved product over where we were before. I think 2 this has been a very good process for give and take 3 between the various stakeholders and government. 4 The one thing I want to leave you with, we 5 will be submitting written comments and I'll leave our 6 particulars for that. But there's a larger issue here 7 that I think that we need to recognize. The SNOPR or 8 the rule is just one part of a system that includes 9 process. It also includes people and it includes 10 authorizing legislation. So it's hard to look at one 11 without looking at the entire system. 12 The one thing that we do see often is that 13 the notions of non-proliferation and notions of nuclear 14 trade are in tension with one another. And the point 15 that ANS really wants people to realize is that if you 16 get it right, the two are synergistic. That our 17 ability to export U.S. goods and services around the 18 world, actually, in the long-term promotes our non19 proliferation objectives by increasing our influence in 20 the world. 21 And so, to the extent that you finalize the 22 language, that thought process ought to be included as

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 122 1 you look at specific provisions. So, with that I thank 2 you. 3 MS. STRANGIS: Thank you. Over here? 4 MR. KRAEMER: Jay Kraemer and I'm still 5 retired. I have a question about the economic work. 6 Is it possible to throw up on the board again the pie 7 chart that you had at the beginning? 8 MS. STRANGIS: Actually-- 9 MR. KRAEMER: Okay, now I'm trying to read 10 this, but if I understand it correctly, some 55 or 56 11 percent of the market, as you projected it, was subject 12 to specific authorization before and continues, subject 13 to specific authorization now? 14 MR. WOOD: Correct. 15 MR. KRAEMER: Is that correct? And so the 16 difference made by the rule is, as compared to that 55 17 percent--about, say, 2.5 percent that's reduced18 - 19 MR. WOOD: Okay, let me state it my way and 20 see if this works for you. The size of the orange and 21 green slices of that pie chart are the countries 22 unaffected by the proposed reclassification. The real

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 123 1 comparison in assessing the effect of the rule is 2 between the size of the small slices. Is the blue one 3 bigger than the yellow one? Is the yellow one bigger 4 than the blue one? 5 For all of the forecasts that we looked at, 6 except for the WNA High forecast, the blue one was 7 bigger than the yellow one. That is to say the 8 effected trade volume in the three countries moving in 9 the direction of SA to GA was larger than the effected 10 trade volume moving in the other direction, even though 11 it came from 77 countries. 12 MR. KRAEMER: But if I understand this 13 correctly, if you didn't move in either direction, 58.5 14 percent of the market would be subject to SA and the 15 rest would not. So the rule-- 16 MR. WOOD: Ninety-five percent of the global 17 perspective trade volume is not affected by the 18 proposed reclassification. 19 MR. KRAEMER: Right, but I'm saying the rule 20 is being re-proposed in toto, right? So it's a whole 21 rule. So I'm asking just to understand the effect of 22 your pie chart that says if the rule goes forward, as

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 124 1 proposed, you would still have a majority--something in 2 excess of 55 percent of the projected market. That 3 requires a specific authorization, is that right? 4 MR. WOOD: that's true. 5 MR. KRAEMER: Okay, did you do a similar pie 6 chart--you probably didn't have any reason to-- with 7 respect to the rule that was put in place in 1986 to 8 determine, as to that rule, how much of the projected 9 market was affected? 10 MR. WOOD: No, we did not. 11 MR. KRAEMER: Well, then I guess I would have 12 the comment that I think Rich has said that when 13 there's a need to address a problem, we'll address it. 14 And, just from my own standpoint, if you have more than 15 a majority of the market which is subject to an SA 16 requirement, that seems to me a problem at least worth 17 attention. 18 MR. WOOD: Well, you know, my domain was the 19 economics and my understanding of the motivation of the 20 classifications both before and during this process is, 21 it's primarily based on proliferation risk. So I can't 22 really speak to that.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 125 1 MR. KRAEMER: No, that was a comment. That 2 wasn't a question. 3 MS. STRANGIS: Okay, anyone else? Over here. 4 MR. JONES: Picking up where Jay left off 5 about that 55 percent and coming back to the question 6 that David, I think, was getting at earlier about the 7 big countries of, let's say, China and India which 8 together account for half of the planned new 9 infrastructure in the next few decades. 10 We made a proposal in 2011 and I think some 11 of the other commenters also made it that some 12 intermediate approaches be taken, between specific and 13 general authorization. And I think our top line 14 recommendation was that they be generally authorized 15 under on the basis of their non- proliferation 16 commitments and their Section 123 agreements, et 17 cetera. 18 But, you know what, I take the explanation 19 that you have concerns about transparency in China and 20 Russia and there's the Hyde Act that pertains to India, 21 so maybe that doesn't permit general authorization. 22 But in the SNOPR there's no comment on the intermediate

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 126 1 measures that we suggested for authorizing transfers to 2 these countries. 3 Given that they're such a huge part of the 4 market--and I think if you did this pie chart for next 5 year, it would be much less than 55 percent. I mean, 6 they're expanding really fast. 7 Given the importance for us to remain 8 relevant, and I know you want to be able to control 9 transfers and if we're not in that market, then we're 10 not going really going to be controlling it or 11 advantaging our exports, either. What sorts of 12 intermediate measures have been considered? And if the 13 SNOPR is not going to entertain some of this 14 alternative suggestions that we made, then why not? 15 Could you elaborate on that? 16 MS. STRANGIS: So, if it wasn't discussed in 17 the SNOPR, we can't really discuss it here because of 18 the ex parte rules, but I assume that will be part of 19 your written comments and we would address it at that 20 point. If you can say something? 21 MR. GOOREVICH: I think I can say something. 22 I don't have all of the written comments in front of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 127 1 me. I think the challenge that we have is in the 2 comments asking the government--well, essentially what 3 you're saying is have we considered in the SNOPR this 4 sort of what you would call semi-general or semi5 specific authorization? Can we create a middle ground? 6 That's not covered in the SNOPR. We'd be 7 interested in any written comments on how we could 8 legally create something along those lines and we would 9 consider it. I think that's right. 10 The ideas that we received in the SNOPR were 11 about how to treat classes of transactions. Not about 12 how to create a whole new regulatory framework and so I 13 think--I can't comment directly on what we've 14 considered or not considered, but what I can say is, 15 that's something that if people have ideas on, then 16 certainly they should provide them in writing. 17 But I would also say, though, that it's 18 something that will have to be discussed about with my 19 interagency colleagues because if DOE accepts something 20 along those lines then there would be pressure on them 21 to consider that, as well. So it would be the 22 government, not just DOE, would consider. But having

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 128 1 said that, if there are ideas out there, we'd certainly 2 be happy to see them and to certainly consider them as 3 part of the public comment period because what you're 4 talking about is a significant change to a regulatory 5 concept. It's not just that the ideas we got were how 6 to treat certain classes of activities, but that's not 7 what I'm hearing in the question and what I think David 8 was trying to get at, okay? 9 MR. JONES: Right. Thank you. 10 MR. RUDY: George Rudy, just a point of 11 clarification. You said earlier, I believe, that the 12 slides would be available probably in a day or so and 13 did I also hear that the questions and the dialogue 14 that's going on here, there's a transcript that will 15 also be available? 16 MS. STRANGIS: Yes, we have a 17 transcriptionist recording everything. I'm not sure of 18 the timeframe for that, but it will absolutely be 19 publicly available. 20 MR. RUDY: Okay, thank you very much. 21 MR. MADRIGAL: Joshua Madrigal, with AREVA. 22 I have a question, if we can go back to process

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 129 1 improvements? I didn't get to ask this in the previous 2 Q&A session, so I thought I'd ask this now. What I 3 wanted to ask is, what information you're entertaining 4 placing in the FAQ? And then, how you envision the 5 process for updating the FAQ? 6 I think this is something that when we're 7 talking about increasing transparency, it's perfectly 8 well to have a system that tracks where we are in terms 9 of applications and so forth, however, before we even 10 get to that stage there's a lot of person to person 11 contact where somebody from my company, for example, 12 may be contacting Rich and saying, you know, I have a 13 question. Before I even submit this, I want to know 14 where I may stand? And there's an associated delay, we 15 could say. I don't know what that is, but there's an 16 associated delay there. And what might lessen that 17 delay--what might improve the process, speed up the 18 process and, indeed, increase transparency is to have a 19 strong FAQ. 20 And one idea that I think might make sense is 21 to have a limited FAQ in a publicly available section, 22 but a more detailed FAQ available to users who have a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 130 1 particular credential, as defined by this new system 2 that's going to be implemented. If you could comment 3 on those? 4 MR. GOOREVICH: Yeah, sure. Our hope is-- 5 and the goal is--that as Jeff talked about for the E 6 System, there will be a place where we will have FAQs 7 and a lot of that we expect will be based upon the sort 8 of questions that we get all the time from people, a 9 lot of phone calls we get. And we pretty much have a 10 good record of what those basic questions are. As well 11 as discussion on interpretations that we've made in the 12 past. 13 And they may be very detailed, such as, is 14 this kind of valve covered? Or it may be very general 15 as to how do you treat dual citizenship, and doing 16 that. But as I stated earlier, our hope is to have a 17 guide and, as I understand it, there are guides that 18 NRC has for how they do their regulations. Maybe 19 Brooke can talk about it. I think Commerce also has 20 guides on how they can do that and I think Steve can 21 talk to that--is to follow their examples. Their tools 22 to the exporters seem to work very well for their

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 131 1 processes and the hope is to do that. 2 But in us developing that, we really do want 3 to get some help from applicants and from industry as 4 to what type of questions and information should be in 5 there. So it's as much a product that is essentially 6 designed in concept and in detail from industry 7 involvement into what should be in the guide, what kind 8 of information, what kind of questions? 9 So we will be asking openly, you know, what 10 should we be putting in here? I don't expect it to be 11 as think as the IRS's guide for how to fill our a 1040 12 EZ form. And I don't expect it to be something that 13 you have to write to Pueblo, Colorado to get a copy of, 14 as other government things are. But maybe Brooke and 15 Steve can talk a little bit about what they do at their 16 agencies because I think ours is going to be very 17 similar to what they do. 18 MS. SMITH: So the NRC is part of--it's 19 domestic licensing program has what's called the New 20 Reg series. You're probably familiar with it. And it 21 provides guidance that, if you follow it, you'd be in 22 compliance with our regulatory and licensing

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 132 1 requirements. And those are generally developed by the 2 technical staff. They're put out for public comment. 3 There's usually public meetings associated with those 4 and then they're republished and they're publicly 5 available and you can access them on our website. And 6 they are updated periodically, as there's regulatory 7 changes and just implementation experience. 8 MS. CLAGETT: As well as with Commerce, we 9 have a number of things on our website. Some 10 frequently asked questions. Also questions as to how 11 to fill out the form, things like that. But also we 12 have a number of outreach seminars, which now--many of 13 them are put on the web, as well. So all of those 14 questions and answers are also available to the public. 15 But, again, it's just more of a general 16 openness. And I think with your frequently asked 17 questions, there's usually very few questions that we 18 answer that we don't want to share with the general 19 public, unless it's very much a company specific 20 commodity or technology specific. 21 If Boeing asked us a question or Westinghouse 22 asks us a question about the interpretation, we want

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 133 1 them to get the same interpretation, so we generally 2 like to get as many of those questions out there as 3 possible, unless it divulges something that's truly 4 company specific or truly confidential. 5 MS. STRANGIS: Jeff? 6 MR. WILKINS: Sorry, this was the easiest mic 7 to get to. So I just wanted to say, in terms of the IT 8 system that we'll build out, yeah, we'll work with Rich 9 and his team to put tools in place to enable them to 10 solicit, collect and aggregate feedback from the 11 community to sort of inform and structure the Q&As and 12 future revisions of the guide, or initial versions of 13 the guide. 14 You know, we can do things like provide a 15 suggestion link that opens a form that allows you to 16 submit your suggestions directly through the site. We 17 can do things like discussion forums where stakeholder, 18 where companies can go in and just post discussion 19 topics and get feedback. And then Rich's team can mine 20 that data for suggestions for ideas to improve the 21 process, the guidelines, the IT system. Any of that. 22 So we'll do everything we can to enable that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 134 1 process for them and to make it as easy as possible to 2 publish updates to the information that they want to 3 share through the system. 4 MS. STRANGIS: We're losing critical mass 5 here, so a few more questions, but--right here. 6 MR. RUDY: George Rudy. I detected in some 7 activities that we've had with your department that 8 whether informal or formal--I'm not sure how it was-- 9 that a real person point of contact was established. 10 Is that a standard procedure or is that something we 11 need to ask for as a program gets bigger? 12 In other words, instead of contacting you 13 directly-- 14 MS. STRANGIS: That's a process question. 15 MR. RUDY: --with every question or do you 16 assign a project quote person to the-- 17 MR. GOOREVICH: So, yeah, we have a staff and 18 as a question comes in, generally, depending upon the 19 question and the workload of the staff, most of the 20 time we will assign a staff member to make contact 21 directly with the company-- 22 MR. RUDY: Okay.

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 135 1 MR. GOOREVICH: --and then essentially any 2 follow-on activities, you work with that staff member. 3 MR. RUDY: Okay. 4 MR. GOOREVICH: So they take on your case. So 5 you essentially get a case officer. You develop a 6 rapport, they understand what's going on. So what we 7 don't want to do is have you work with one person, get 8 an answer and then have to file the application and 9 start new. 10 MR. RUDY: Right. 11 MR. GOOREVICH: We want someone who is 12 familiar with you, the specifics of your case, to be 13 able to help you get the application in and get our 14 analysis done and move forward. 15 MR. RUDY: Okay. All right. 16 MR. ESPOSITO: Vinnie Esposito, Energy and 17 Commerce. Jeff, you said a few times that Phase 1 gets 18 initiated at T-plus. Can you define T-plus a bit more? 19 MR. WILKINS: All right, so we've been 20 working with Rich and his team for pretty much the last 21 six months to understand the process, understand the 22 stakeholder feedback that's been received thus far and

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 136 1 work with them on designing the phased approach and 2 what features we all expect to be in the various 3 phases. 4 So, for that Phase 1, we're the farthest 5 along because that's the first activity that's going to 6 take place. We're, I would say, within a month--yes, 7 Darryann? Sorry, my technical lead's in the back. So 8 we're probably within a month of being at a position 9 where we can present the Phase 1 requirements, 10 features, and plan to Rich and his team for approval. 11 When we get that official approval that 12 that's--and they bless it--then that's the T in T- plus 13 three months or so, in building out the initial 14 operating capability for Phase 1. 15 MR. ESPOSITO: So you would expect in the 16 next two to three months? 17 MR. WILKINS: We would be able to start work 18 in about the next month or two and complete the work 19 about three months following. Okay? 20 MS. STRANGIS: Over here. 21 MR. MARKUS: Stephen Markus, with Pillsbury. 22 I just wanted to follow up on one aspect of my earlier

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 137 1 question regarding the reclassification. You had 2 referred to the analysis and explanation in the SNOPR 3 on the basis for changing the approach from GA to SA-- 4 well, SA to GA, essentially. And one of the statements 5 in the SNOPR referred back to the original NOPR in 6 saying that one aspect of the basis was to recognize 7 the fact that global markets for peaceful nuclear 8 energy and nuclear fuel cycle trading relationships 9 have become more dynamic in recent years. And I was 10 just wondering if you could clarify what is meant by 11 that and how that relates to the new approach to 12 classification? 13 MR. GOOREVICH: Are you asking me what the 14 word dynamic means? 15 MR. MARKUS: Well, in the context, yes. How 16 does the sort of dynamic--how is that word used in this 17 explanation? 18 MR. GOOREVICH: It's been a while since I've 19 actually read the SNOPR word for word, so let me try as 20 best I can to explain what we were attempting to say in 21 there, as much as I can. 22 What we heard and what we saw from comments

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 138 1 and what we understood as we went into the NOPR was 2 that the market's changing. The market is evolving. 3 But we also understood that proliferation was changing 4 and proliferation was evolving. And so, therefore, as 5 you sort of have both ends of a spectrum. 6 You have proliferation concern and you have, 7 at the other end of the spectrum, the market concern. 8 And they're continually evolving and moving. In 9 between you have the regulation and the question that 10 we were grappling with and trying to identify was how 11 can the regulation, which tends to be very inflexible, 12 work while at both ends of the spectrum are sort of 13 pushing and pulling on the regulation to move forward. 14 So, places and markets that we had originally thought 15 were potentially okay and part of a supply chain, we 16 found out through concern, we're supplying the Kahn 17 network. So the question is, when we talk about 18 dynamic, it's dynamic both in terms of market 19 opportunities and supply chains, but it's also dynamic 20 in the fact of proliferation. 21 So the question becomes, then, how does the 22 secretary make a non-inimicality finding within this

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 139 1 dynamic framework? Okay? And so that was the basis of 2 us looking at that. 3 It's not just dynamic from the market, it's 4 also dynamic from the non-proliferation, so I think we 5 have enough recent history to show that places that we 6 had expected to be and had hoped to be fairly safe 7 places to send our technology from the proliferation 8 standpoint turned out not to be the case. 9 So that's what we're grappling with. It 10 comes back to what Joyce said, the balance between 11 those two elements and the dynamic aspects of those two 12 elements, okay? 13 MS. STRANGIS: One more. 14 MR. JONES: Just to follow up on what Stephen 15 was asking, you mentioned that you have recent history 16 to show that places that were deemed to be safe, in 17 fact are not. In the past, when countries were moved 18 from general authorization to specific authorization, 19 that information was shared publicly to justify the 20 change. Would you be able to share this information to 21 justify the change for the 77? And does there exist 22 information for each of the 77?

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 140 1 MR. GOOREVICH: Well, I think that's exactly 2 why we're--well, first, are we getting close to the 3 bottom of the list, Ted? 4 MR. JONES: That's my last one. 5 MR. GOOREVICH: That's the last one? Okay, 6 good. The answer is blue. 7 [Laughter.] 8 MR. GOOREVICH: No, that's the point in all 9 of this, which is to try and be more transparent. You 10 made the statement that in the past when we've changed 11 from--when we've made changes to the list, we've 12 provided evidence. The list hasn't changed since 1984, 13 so I'm not aware of any time that we changed the list 14 where we've provided evidence or provided information. 15 In fact, if you look at the specific 16 authorization list today, it still says Yugoslavia 17 because the way the list was created, it required a 18 rule change. We have not changed the regulation. The 19 only time we changed a regulation was once and that was 20 to add accelerator driven sub-critical assemblies and 21 safety exemptions for former Soviet Union work. We've 22 not changed the rules since.

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 141 1 MR. JONES: I'm talking about changing the 2 country list. 3 MR. GOOREVICH: It requires a rule change. 4 That's one of the--and we haven't changed the rule 5 except for that one time for technical reasons, so we 6 haven't changed the country list. Like I said, we 7 still have Yugoslavia listed on it. 8 So I'm not aware of when we've provided 9 evidence. By changing and moving into this direction 10 and saying that a country linked to a positive non11 inimicality finding by the Secretary of Energy and the 12 Secretary of State, we are providing the public through 13 the 123 process, or any other process that is 14 identified where we can do that, that, yes, there are 15 reasons why we are saying that these are countries that 16 are eligible for general authorization, okay? 17 So that's the answer I have based on my 18 experience with the current 810 rule. 19 MS. STRANGIS: With that I think we can say 20 thank you so much to our panel. And thank you all so 21 much for spending so much time with us today. 22 [Applause.]

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 142 1 MS. STRANGIS: We really look forward to any 2 written comments that you have. I think the comment 3 period closes, I believe, the 29th. 4 (Whereupon, at 12:31 p.m. the MEETING was 5 adjourned.) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 143 1 CERTIFICATE OF COURT REPORTER 2 3 I, CHRISTINE ALLEN, the Court Reporter before whom 4 the foregoing proceeding was taken, do hereby certify 5 that the proceeding was recorded by me; that the 6 proceeding was thereafter reduced to typewriting under 7 my direction; that said transcript is a true and 8 accurate record of the proceeding; that I am neither 9 related to nor employed by any of the parties to this 10 proceeding; and, further, that I have no financial 11 interest in this proceeding. 12 13 14 ___________________________ CHRISTINE ALLEN 15 Digital Court Reporter 16 17 18 19 20 21 22

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 $ $2 94:15 1 1 34:9 36:3,7,9 76:4 78:17 108:11 135:17 136:4,9,14 1/2-year114:7 1:00 117:3 10 57:1 101:6 1000 1:12 101 4:20 1040 131:11 12,000 49:4 12:31 142:4 123 47:3 50:14 66:5 80:5,13,15 110:8,16 111:10 112:1 125:16 141:13 127 85:17 128 85:18 141 4:21 15 1:16 44:21 77:7 150 108:15 161 14:20 15:5 1980s 11:1 31:13 1982 57:14 1984 140:12 1986 124:7 1993 54:2 1st6:16 2 2 13:19 26:10 36:12 40:17 108:11 2.5 122:17 20 57:1 2011 9:14 102:21 115:1,2,4 125:10 2012 115:4 2013 1:16 96:11 2030 96:11 108:15 114:18 20th 21:22 21 53:8 23 53:6 25 31:15 26 4:8 29th 10:6 142:3 2nd 10:3 3 3 36:10,18 114:6 30 57:1 30,000 108:14 3-1/2 114:5 33 4:9 360 69:16 3s 108:11 4 40 27:7 101:6 43 4:10 45 44:3 84:10,11,13 5 5 4:3 104:20 105:1 50 69:1

50,000 76:17 55 122:10,16 124:2 125:5 126:5 56 122:10 57b 8:4,5 9:11 53:3 85:19 86:5,17 87:20 88:20 111:7 57b(2 15:5 58.5 123:13 6 6 4:5 60 30:5,6,8,11 73:21 7 77 4:12,13 65:14 101:16 103:21 104:2 107:1 110:12 123:11 139:21,22 78 57:10 79 4:17 8 8 13:1 80 90:22 810 1:6 4:4,13 5:6,16,19 8:3 9:1,10 12:6 16:22 17:9 21:21 23:3 26:19 27:12,15,17 28:12 29:22 30:5 31:12,17 32:9,14 34:16 45:15 49:7 51:1

64:6 84:18 88:11 92:6 116:3 141:18 810.2 8:22 810s 53:7 61:6 74:8 89 4:18 9 9:11 1:17 90 44:21 56:9 9001 22:21 23:2,4,5,9 24:17 38:18 57:21 58:11 95 4:19 97 94:14 95:4 A a.m1:17 abilities 70:8 ability 9:2 42:4 58:7 80:4 82:16 88:20 104:1,3 107:8,9 121:17 able 6:5 16:5 17:19 18:5 19:20 21:14,16 23:22 35:3 38:6,9 39:2 40:19 43:8,22 45:11 53:20 69:18 71:6 81:22 95:3 97:3,22 98:16,20 106:10 109:9 126:8 135:13 136:17 139:20

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 about--next

22:17 abroad 32:11 65:21 absence 67:18 absolutely128:18 academic 98:12 accelerating 96:5 accelerator 140:20 accepted98:11 accepts 127:19 access 38:14 39:2 40:20 41:5,6,7 82:5,7,16 104:4 106:10 132:5 accessible 38:13 accidental118:11 accompanies 110:8 accordance49:13 82:6 account6:21 62:11 87:22 88:16 89:3 105:18 125:8 accountability2:2 3:6 38:16 accrue100:18 accrued100:9 accruing 101:14 accurate143:8 acknowledge 22:18 acknowledged 44:13 Act 8:4 14:18,19 85:18 108:17 110:5 111:17 125:20 action 38:19 39:15,17 67:13 activities 1:7 8:6,17,21 11:7,12 20:9 21:1 66:22 67:1 79:21 81:11 84:2,22 85:1,14,22 97:14 119:1 128:6 134:7 135:2 activity 20:2,3,4 63:16 67:1 86:12 95:6 136:5 actual38:2 47:14 58:10 90:11 91:12 95:7 actually30:9 32:10 44:17 49:7 50:21 52:8 54:17 58:15 63:11 72:7 91:14 118:2 121:18 122:8 137:19 adapt59:17 add 48:15 54:3 72:2 74:18 83:19 140:20 adding 83:13 additional 36:19 65:11 103:15 113:1 address 90:9 102:4 109:8 118:22 124:13 126:19 adjourned 142:5

adjust71:6 Administrative 111:17 administrators 24:5 56:15 ado 6:10 advance 50:11 84:8 112:8 advantage 21:17 advantaging 126:11 advice 74:7,12 advisors 12:21 advisory19:12,18 AEA50:14 affairs 26:22 28:19 affairs--the 27:7 affect34:13 41:12 64:3,6 affected 90:22 91:14 92:3,11 123:17 124:9 affects 58:8 affiliate 86:1 affiliates 85:22 affiliation 43:12 109:21 afoot64:19,22 after--my78:19 afternoon 120:16 agencies 27:16 35:18 49:6 131:16 agency8:16 13:19,20 29:5

agenda 5:14 aggregate93:14 98:19 99:18,22 133:10 aggregated 99:16 ago 27:4 31:13 51:22 ago--we 34:17 agreement48:18 64:4,8,12,13 66:5 80:3,15 110:8 111:10 agreements 64:1 82:5 110:16 125:16 ahead 10:3 19:6 32:19 33:3 72:4 airplane 8:1 Ajay 2:15 Alamos 2:2 Alex2:18 Alisa 2:2 Allen 1:19 143:3,14 allow 53:20 59:17 85:18 107:17 allows 46:19 47:2 133:15 alpha 37:21 also--I 114:14 alternative126:14 am114:8 143:8 American 2:9,17 49:1,3,4 120:19 Americanized 89:2

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 Americans 31:15 among35:3 amongst 100:22 119:11 analyses 32:16 100:20 analysis 12:22 13:20 22:15 26:8 28:17 36:16 51:4 89:12,17,22 90:10 92:8 93:3 95:14,16,18 96:2 99:2,11 103:3 108:7 112:14,17 135:14 137:2 analysts 89:21 analytical70:8 analyze 25:19 analyzes 28:12 analyzing 92:17 and/or 76:18 and-so 55:14 anecdotal11:19 48:5 Anna 2:13 annual 94:15 99:22 ANS 121:15 answer 6:4,7 13:2,3 31:5 32:17,21 48:16 50:21 52:3,8 54:15 55:6 67:6 72:18,22 73:8 74:4 75:10 77:1 102:10 108:9,18 109:19 111:21 116:17 120:15 132:18 135:8 140:6 141:17 answered 119:20 answers 73:6 132:14 anticipated 6:15 any-- acknowledging 45:8 anymore70:22 anyone 102:11 107:21 109:20 125:3 anything 5:12 42:16 51:15,17 60:2 80:4 96:13 102:4 Anyway 117:10,18 118:1 anyways 82:12 anywhere 49:21 apologize 112:8 118:4 appears 55:22 Applause 141:22 applicant 13:10,11 14:11 19:19 24:5 25:10 40:1 52:16 67:13,14,19 84:16 applicants 11:20 17:20 18:1 24:4 35:17 36:6 38:6 46:1,11 70:14,18 71:7 131:3 applicant's 67:21

application 12:17 13:8,12 19:21 26:8 27:17 28:12 29:2 35:4 38:17 39:8 40:21 50:9 56:8 60:15 61:19 62:2,10 76:11 86:5 88:13 120:5 135:8,13 applications 57:11 61:9 62:21 75:21 129:9 applied 88:11 applies 50:14 73:2 apply 19:14,15 32:10 37:9 54:7,9 60:17 62:20 74:8 applying 61:6 appreciate43:21 59:2 68:9 approach 24:21 33:14 36:2 68:3 108:19 136:1 137:3,11 approach--and 108:18 approaches 125:12 appropriate 41:4 59:15 60:6,8 74:11 90:14 102:22 approval 13:4,15,18 14:7 15:11 31:17 39:3 44:19 94:13 136:10,11

approvals 13:7 approve 27:17 30:5 approved 30:12,13 76:7 84:18 architecture 24:13 area21:9 53:7 areas 7:5 arena40:11 aren't75:3 AREVA 2:15 112:7 128:21 Argonne 2:14 arguments 119:11 arrangements 67:12 aspect136:22 137:6 aspects 26:2,3 27:1 33:6 85:11 119:14,16 139:11 assay79:18 assembled 23:17 assemblies 140:20 assessed 100:1 assessing 123:1 assessment80:14 99:10 102:19,21,22 103:4,10 110:8 assign 134:16,20 assist32:11 51:12,19

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 assistance 1:7 8:6,8 11:2,4,15 31:10 83:10 86:10,16 Associate33:17 associated 21:16 38:12,20 95:3,7,11 111:3 113:11 129:14,16 132:3 assume37:8 126:18 assumption 82:11 93:17,22 113:19 assumptions 96:15 114:20 assurance 7:14 50:11 60:6 64:15 66:21 73:13,15 75:3 assurances 4:7 5:21 14:2,6,9 20:1,13 28:20,21 29:2,3,6,8,12,16 ,19 30:1,14,16 31:3 32:17 49:10,13,17,21 50:3,10 51:2,5,7 52:20 53:1,4 54:15 55:4 63:4,7,12 65:11,16,20 66:2 67:8 72:19 73:5,7,11,21 74:9,14 assured 42:7 assuring 81:10 as--we're 70:13 atomic 8:4,6 14:18,19 85:18 110:5

attached112:19 attached--what 112:18 attempt109:16 attempted 90:9 attempting 137:20 attendant 113:3,16 attention 21:10 124:17 Aubrey2:9 auditability 38:18 augment 42:10 August6:14,22 10:3 49:12 79:17 80:7 81:22 82:10 89:11 August--some 79:14 authorities 74:11 authorization 9:8 12:15 14:10,13 15:15 16:2 19:15,16 20:22 45:16 53:10 66:6,14,18 80:6 83:9 85:19 88:18 94:9 103:12,14,22 106:22 108:11,21 110:19 112:20 122:12,13 124:3 125:13,21 127:5 139:18 140:16 141:16 authorizations

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41:13 comply 38:18 111:7 component36:1 59:20 100:12 components 40:13 41:3 50:13,21 compounds 31:1 comprehensive 19:5 82:9 116:4 computer22:1 26:16 67:11 concept 128:5

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 86:1 definitions 21:7 85:13 definitization 69:7 72:8 degree76:12 delay129:14,16 delays 49:19 delay--what 129:17 delegable 14:20 delegate15:8 deliver34:10 demonstrated 109:15 denial 94:13 denied 13:8 department1:1 2:4,6,13,20 3:2,3,5 7:13 8:15 14:2 20:3,4 22:5,11,22 26:14 29:21 53:10 54:21 63:3,6 64:16 89:16 91:6 111:15 134:7 Department--and 63:6 Department's 26:18 depending 81:19 134:18 depends 67:9 depleted 31:1 depressed 115:8,11 depressed--that 115:11 der3:4 deregulating 85:22 derive 97:4 derived 97:12 113:12 describe 94:9 95:18 described 94:10 95:21 design 34:7 40:6 41:10 59:14 68:3 designed 131:6 designing 24:13 136:1 desirable 24:6,8 desired 34:18 42:19 Destination 79:16 detail93:12 94:10,18 131:6 detailed 82:9 129:22 130:13 details 60:5 101:3 detected 134:6 determination 12:21 13:11 15:8 80:18 determinations 9:5 15:1 20:18,21 determine 24:6 25:1 40:20 88:13 124:8 determined 35:13 determining 24:8

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ERIN 2:19 especially83:17 Esposito 2:9 135:16 136:15 essentially9:9 12:16 14:8 20:19 24:13 25:20 35:16 59:13 61:21 63:16 80:19 82:18 85:2,6,11 87:4 110:4,7 127:2 131:5 135:1,5 137:4 established 83:14 134:9 estimate 97:5 104:11 105:3 estimated 94:11 105:4 estimates 97:19 et27:16 29:12 58:1 66:12,13 125:16 Europe 70:5 eventually37:14 everybody

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### Capital Reporting Company Proposed Changes to DOE Part 810 11-15-2013

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