United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Oversight 

and Investigations, Committee on Energy 

and Commerce, U.S. House of 

Representatives

NUCLEAR REGULATORY 

COMMISSION 

Preliminary Observations 

on Its Process to Oversee 

the Safe Operation of 

Nuclear Power Plants 

Statement of Jim Wells, Director 

Natural Resources and Environment 

For Release on Delivery

Expected at 4:00 p.m. EDT

Monday, June 19, 2006

 

GAO-06-888T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-06-888T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Jim Wells (202) 

512-3841 or wellsj@gao.gov. 

Highlights of GAO-06-888T, a testimony 

before the Subcommittee on Oversight 

and Investigations, Committee on Energy 

and Commerce, U.S. House of 

Representatives 

June 19, 2006

NUCLEAR REGULATORY COMMISSION

Preliminary Observations on Its Process 

to Oversee the Safe Operation of Nuclear 

Power Plants 

NRC uses various tools to oversee the safe operation of nuclear power 

plants, including physical plant inspections and quantitative measures or 

indicators of plant performance. To apply these tools, NRC uses a riskinformed and graded approach—that is, one considering safety significance 

in deciding on the equipment and operating procedures to be inspected and 

employing increasing levels of regulatory attention to plants based on the 

severity of identified performance problems. The tools include three types 

of inspections—baseline, supplemental, and special. All plants receive 

baseline inspections of plant operations almost continuously by NRC 

inspectors. When NRC becomes aware of a performance problem at a plant, 

it conducts supplemental inspections, which expand the scope of baseline 

inspections. NRC conducts special inspections to investigate specific safety 

incidents or events that are of particular interest to NRC because of their 

potential significance to safety. The plants also self-report on their safety 

performance using performance indicators for plant operations related to 

safety, such as the number of unplanned reactor shutdowns. 

Since 2001, NRC’s ROP has resulted in more than 4,000 inspection findings 

concerning nuclear power plant licensees’ failure to comply with regulations 

or other safe operating procedures. About 97 percent of these findings were 

for actions or failures NRC considered important to correct but of low 

significance to overall safe operation of the plants. In contrast, 12 of the 

inspection findings, or less than 1 percent, were of the highest levels of 

significance to safety. On the basis of its findings and the performance 

indicators, NRC has subjected more than three-quarters of the 103 operating 

plants to oversight beyond the baseline inspections for varying amounts of 

time. 

NRC has improved several key areas of the ROP, largely in response to 

independent reviews and feedback from stakeholders. These improvements 

include better focusing its inspections on those areas most important to 

safety, reducing the time needed to determine the risk significance of 

inspection findings, and modifying the way that some performance 

indicators are measured. NRC also recently undertook a major initiative to 

improve its ability to address plants’ safety culture—that is, the 

organizational characteristics that ensure that issues affecting nuclear plant 

safety receive the attention their significance warrants. GAO and others have 

found this to be a significant shortcoming in the ROP. Although some 

industry officials have expressed concern that its changes could 

introduce undue subjectivity to NRC’s oversight, given the difficulty in 

measuring these often intangible and complex concepts, other 

stakeholders believe its approach will provide NRC better tools to 

address safety culture issues at plants. NRC officials acknowledge that its 

effort is only a step in an incremental approach and that continual 

monitoring, improvements, and oversight will be needed to fully detect 

deteriorating safety conditions before an event occurs. 

The Nuclear Regulatory 

Commission (NRC) has the 

responsibility to provide oversight 

to ensure that the nation’s 103 

commercial nuclear power plants 

are operated safely. While the 

safety of these plants has always 

been important, since radioactive 

release could harm the public and 

the environment, NRC’s oversight 

has become even more critical as 

the Congress and the nation 

consider the potential resurgence 

of nuclear power in helping to meet 

the nation’s growing energy needs. 

Prior to 2000, NRC was criticized 

for having a safety oversight 

process that was not always 

focused on the most important 

safety issues and in some cases, 

was overly subjective. To address 

these and other concerns, NRC 

implemented a new oversight 

process—the Reactor Oversight 

Process (ROP). NRC continues to 

modify the ROP to incorporate 

feedback from stakeholders and in 

response to other external events. 

This testimony summarizes 

information on (1) how NRC 

oversees nuclear power plants, (2) 

the results of the ROP over the past 

several years, and (3) the aspects 

of the ROP that need improvement 

and the status of NRC’s efforts to 

improve them. This testimony 

discusses preliminary results of 

GAO’s work. GAO will report in full 

at a later date. GAO analyzed 

program-wide information, 

inspection results covering 5 years 

of ROP operations, and detailed 

findings from a sample of 11 plants. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss our ongoing review of how the 

Nuclear Regulatory Commission (NRC) oversees the safe operation of the

nation’s 103 operating commercial nuclear power plants, which provide 

about 20 percent of U.S. electricity. The safety of these plants, which are 

located at 65 sites in 31 states, has always been important, as an accident 

could result in the release of radioactive material and potentially harm 

public health and the environment. NRC is responsible for issuing 

regulations, licensing and overseeing plants, and requiring necessary 

actions to protect public health and safety, while plant operators are 

responsible for safely operating their plants in accordance with their 

licenses. NRC’s oversight has become even more critical as the Congress 

and the nation consider the potential resurgence of nuclear power in 

helping to meet the nation’s growing energy needs. No new orders for a 

plant have been placed since the 1979 accident at the Three Mile Island 

plant, but in the face of concerns about aging plants, energy security, 

global warming, and the ever increasing need for energy to fuel the 

nation’s economy, nuclear power is resurfacing as a principal option. An 

accident could threaten public confidence in nuclear power just as it 

begins to emerge from the shadows of the Three Mile Island accident. It is 

critical that NRC be able to ensure that nuclear power plants are operated

safely and that public confidence about their safety is high. 

Prior to 2000, NRC was criticized for having a safety oversight process that 

was not always focused on the most important safety issues and in some 

cases, regulatory activities were redundant, inefficient, and overly 

subjective. While its new process—which NRC refers to as the Reactor 

Oversight Process (ROP)—is similar to its prior process in that the 

oversight activities largely consist of physical plant inspections, the 

inspections now focus on more important safety issues and the goal is to 

make assessments of plants’ safety performance more objective, 

predictable, and understandable. The unexpected discovery, in March 

2002, of extensive corrosion and a pineapple-size hole in the reactor vessel 

head—a vital barrier preventing a radioactive release—at the Davis-Besse 

nuclear power plant in Ohio led NRC to re-examine its safety oversight 

and other regulatory processes to determine how such corrosion could be

missed. Based on the lessons learned from the event, NRC made several 

changes to the ROP. NRC continues to annually assess the ROP by 

obtaining feedback from the industry and other stakeholders such as 

public interest groups, and incorporates this feedback and other 

information into specific performance metrics to assess its effectiveness. 

Page 1 GAO-06-888T 
We are preparing a report to you and other Members of the Congress later 

this year on (1) how NRC oversees nuclear power plants to ensure that 

they are operated safely, (2) the results of the ROP over the past several 

years in terms of the number and types of inspection findings, and (3) the 

aspects of the ROP that need improvement and the status of NRC’s efforts 

to improve them.1

 To examine how NRC oversees plants, we reviewed 

NRC’s regulations, inspection manuals, and other guidance documents; 

interviewed NRC headquarters and regional officials and regional and onsite inspectors; visited the Salem and Hope Creek nuclear power plants; 

and attended several public meetings covering various nuclear power 

plant oversight topics. To examine the results of the ROP over the past 

several years, we analyzed NRC data on nuclear plant safety for 2001 

through 2005, the years since implementation of the ROP for which data

were available for the full year, and discussed our analysis with NRC 

officials. We assessed the reliability of this data and determined that the 

data were sufficiently reliable for the purposes of our report. To examine 

areas of the ROP that need improvement and the status of NRC’s efforts to 

improve them, we reviewed NRC documents, including annual selfassessment reports; interviewed officials from NRC and outside 

stakeholder groups; and attended several key public meetings covering 

proposed changes to oversight procedures. We also reviewed various 

external evaluations of the ROP, including our prior reports and those of 

the NRC Inspector General. Additionally, we selected a nonprobability 

sample of 6 nuclear power sites (totaling 11 plants) that provided coverage

of each of NRC’s four regional offices and varying levels of plant 

performance and NRC oversight since 2000. We reviewed relevant 

inspection reports and assessment documents and interviewed NRC and 

industry officials at each site to examine how NRC applies the ROP to 

identify and correct safety problems. We are conducting this work in 

accordance with generally accepted government auditing standards. We 

performed the work reflected in this testimony from July 2005 to June 

2006. 

 1

Physical security, which is also covered by the ROP, is not included in this review. For 

information on NRC’s physical security, see GAO, Nuclear Power Plants: Efforts Made to

Upgrade Security, but the Nuclear Regulatory Commission’s Design Basis Threat 

Process Should Be Improved, GAO-06-388 (Washington, D.C.: Mar. 14, 2006).

Page 2 GAO-06-888T 
To date, our work indicates the following: 

• NRC uses various tools to oversee the safe operation of nuclear power 

plants, including physical plant inspections of equipment and records and

quantitative measures or indicators of plant performance such as the 

number of unplanned shutdowns. NRC uses a graded and risk-informed 

approach—that is, one considering safety significance in deciding on the 

equipment or operating procedures to be inspected and employing 

increasing levels of regulatory attention to plants based on the severity of 

identified performance problems—to apply these tools. All plants receive 

baseline inspections, which are inspections of plant operations that are 

conducted almost continuously by NRC inspectors usually located at each 

nuclear power plant site. When NRC becomes aware of a performance 

problem at a plant, it conducts supplemental inspections, which expand

the scope of baseline inspections. NRC conducts special inspections to 

investigate specific safety incidents or events that are of particular interest

to NRC because of their potential significance to safety. The plants also 

self-report on their safety performance using performance measures or 

indicators in quarterly reports submitted to NRC. Plants’ quarterly reports 

of performance indicators are verified by NRC’s on-site inspectors. NRC 

analyzes each of its inspection findings to determine the finding’s 

significance in terms of safety, and applies increasing levels of oversight 

based on the number and level of risk of the findings identified. 

• Since 2001, NRC’s ROP has resulted in more than 4,000 inspection findings 

concerning nuclear power plant licensees’ failure to comply with 

regulations or other safe operating procedures. About 97 percent of these 

findings were for actions or failures NRC considered important to correct 

but of very low significance to overall safe operation of the plants. For 

example, a finding of very low risk significance was issued at one plant 

after a worker failed to wear the proper radiation detector and at another 

plant because the operator failed to properly evaluate and approve the 

storage of flammable materials in the vicinity of safety-related equipment. 

In contrast, 12 of the inspection findings, or less than 1 percent, were of 

the highest levels of significance to safety. For example, NRC issued a 

finding of the highest risk significance at one plant after a steam generator

tube failed, causing an increased risk of the release of radioactive material. 

Similarly, there were 156 instances, or less than 1 percent, in which data 

reported for individual performance indicators were outside NRC’s 

acceptable category of performance. On the basis of its findings and the 

performance indicators, NRC has subjected more than three-quarters of 

the 103 operating plants to oversight beyond the baseline inspections for 

varying amounts of time. Over the past 5 years, 5 plants have been subject

to the highest level of NRC oversight that still allows continued 

Page 3 GAO-06-888T 
operations. According to NRC officials, the results of its oversight process 

at an industry or summary level serve as an indicator of overall industry 

performance, which to date indicates good safety performance. 

• NRC has improved several key areas of the ROP, largely in response to 

independent reviews and feedback from stakeholders, including its 

regional and on-site inspectors, usually obtained during NRC’s annual selfassessment of the oversight process. These improvements include better 

focusing its inspections on those areas most important to safety, reducing 

the time needed to determine the risk significance of inspection findings, 

and modifying the way that some performance indicators are measured. 

For the most part, NRC considers these efforts to be refinements rather 

than significant changes. One significant shortcoming in the ROP that we 

and others have found is that it is not as effective as it could be in 

identifying and addressing early indications of deteriorating safety at 

nuclear power plants before problems develop. In response to this 

concern, NRC recently undertook a major initiative to improve its ability 

to address plants’ safety culture—that is, the organizational characteristics

that ensure that issues affecting nuclear plant safety receive the attention

their significance warrants. NRC and others have long recognized that 

safety culture attributes, such as attention to detail, adherence to 

procedures, and effective corrective and preventative action, have a 

significant impact on a plant’s safety performance. NRC is taking action to 

improve how it incorporates safety culture into the ROP by redefining and 

increasing its focus on more qualitative and cross-cutting issues or aspects 

of plant performance—including a safety conscious work environment, 

human performance, and problem identification and resolution—and 

developing new requirements to more directly assess safety culture at 

poorer performing plants. Some of its actions have been controversial. 

Although some industry officials have expressed concern that these 

changes could introduce undue subjectivity to NRC’s oversight, given the 

difficulty in measuring these often intangible and complex concepts, other 

stakeholders believe this approach will provide NRC better tools to 

address safety culture issues at plants. NRC officials acknowledge that this

effort is only a step in an incremental approach and that continual 

monitoring, improvements, and oversight will be needed to fully detect 

deteriorating safety conditions before an event occurs. 

NRC is devoting considerable effort to overseeing the safe operation of the

nation’s commercial nuclear power plants, and its process for doing so 

appears logical and well-structured. This does not mean that NRC’s 

oversight is perfect. However, NRC is also demonstrating that it is aware 

of this fact and is willing to make changes to improve. Its efforts to 

continuously obtain feedback and consider the need for improvement to 

Page 4 GAO-06-888T 
the ROP are important as nuclear power plants age and the nation 

considers building new plants. In this regard, its safety culture initiative

may be its most important improvement to the ROP. As we complete our 

work, we will be examining whether NRC needs a more formal mechanism 

to assess the effectiveness of this initiative, including incorporating 

stakeholder feedback and developing specific measures to assess its 

performance. It has been more than 4 years since Davis-Besse, and it 

appears that NRC is now taking concrete actions to begin incorporating 

safety culture into the ROP. 

I would also like to point out that the ROP is a very open process in that 

NRC provides the public and its other stakeholders with considerable 

specific and detailed information on its activities and findings with regard 

to safety at individual plants. However, to ensure or foster even greater 

public confidence in safety oversight, as we complete our work, we will be 

examining whether NRC can make this information more meaningful by

providing industry-wide or summary data for key components of its 

oversight process. This information may provide a useful measure of 

overall industry performance and allow for comparisons between the 

safety performance of a specific plant to that of the industry as a whole. 

NRC is an independent agency of over 3,200 employees established by the 

Energy Reorganization Act of 1974 to regulate civilian—that is, 

commercial, industrial, academic, and medical—use of nuclear materials. 

NRC is headed by a five-member Commission. The President appoints the 

Commission members, who are confirmed by the Senate, and designates 

one of them to serve as Chairman and official spokesperson. The 

Commission as a whole formulates policies and regulations governing 

nuclear reactor and materials safety, issues orders to licensees, and 

adjudicates legal matters brought before it. 

NRC and the licensees of nuclear power plants share the responsibility for 

ensuring that commercial nuclear power reactors are operated safely. NRC 

is responsible for issuing regulations, licensing and inspecting plants, and 

requiring action, as necessary, to protect public health and safety. Plant

licensees have the primary responsibility for safely operating their plants 

in accordance with their licenses and NRC regulations. NRC has the 

authority to take actions, up to and including shutting down a plant, if 

licensing conditions are not being met and the plant poses an undue risk to 

public health and safety.

Background 

Page 5 GAO-06-888T 
Nuclear power plants have many physical structures, systems, and 

components, and licensees have numerous activities under way, 24-hours 

a day, to ensure that plants operate safely. NRC relies on, among other 

things, its on-site resident inspectors to assess plant conditions and the 

licensees’ quality assurance programs such as those required for 

maintenance and problem identification and resolution. With its current 

resources, NRC can inspect only a relatively small sample of the numerous 

activities going on during complex plant operations. According to NRC, its 

focus on the more safety significant activities is made possible by the fact 

that safety performance at plants has improved as a result of more than 25 

years of operating experience. 

Commercial nuclear power plants are designed according to a “defense in

depth” philosophy revolving around redundant, diverse, and reliable safety

systems. For example, two or more key components are put in place so 

that if one fails, there is another to back it up. Plants have numerous builtin sensors to monitor important indicators such as water temperature and 

pressure. Plants also have physical barriers to contain the radiation and 

provide emergency protection. For example, the nuclear fuel is contained 

in a ceramic pellet to lock in the radioactive byproducts and then the fuel 

pellets are sealed inside rods made of special material designed to contain 

fission products, and the fuel rods are placed in reactors housed in 

containment buildings made of several feet of concrete and steel. 

Furthermore, the nuclear power industry formed an organization, the 

Institute of Nuclear Power Operations (INPO) with the mission to 

“promote the highest levels of safety and reliability-to promote excellencein the operation of nuclear electric generating plants.” INPO provides a 

system of personnel training and qualification for all key positions at 

nuclear power plants and workers undergo both periodic training and 

assessment. INPO also conducts periodic evaluations of operating nuclear 

plants, focusing on plant safety and reliability, in the areas of operations, 

maintenance, engineering, radiological protection, chemistry, and training. 

Licensees make these evaluations available to the NRC for review, and the 

NRC staff uses the evaluations as a means to determine whether its 

oversight process has missed any performance issues. 

Page 6 GAO-06-888T 
NRC uses various tools to oversee the safe operation of nuclear power 

plants, generally consisting of physical plant inspections of equipment and 

records and objective indicators of plant performance. These tools are 

risk-informed in that they are focused on the issues considered most 

important to plant safety. Based on the results of the information it 

collects through these efforts, NRC takes a graded approach to its 

oversight, increasing the level of regulatory attention to plants based on 

the severity of identified performance issues. NRC bases its regulatory 

oversight process on the principle and requirement that plant licensees 

routinely identify and address performance issues without NRC’s direct 

involvement. An important aspect of NRC’s inspections is ensuring the 

effectiveness of licensee quality assurance programs. NRC assesses overall 

plant performance and communicates these results to licensees on a semiannual basis. 

During fiscal year 2005, NRC inspectors spent a total of 411,490 hours on 

plant inspection activities (an average of 77 hours per week at each plant). 

The majority of these inspection efforts were spent on baseline 

inspections, which all plants receive on an almost continuous basis. 

Baseline inspections, which are mostly conducted by the two to three NRC 

inspectors located at each nuclear power plant site, evaluate the safety 

performance of plant operations and review plant effectiveness at 

identifying and resolving its safety problems.2

 There are more than 30 

baseline inspection procedures, conducted at varying intervals, ranging 

from quarterly to triennially, and involving both physical observation of 

plant activities and reviews of plant reports and data. The inspection 

procedures are risk-informed to focus inspectors’ efforts on the most 

important areas of plant safety in four ways: 1) areas of inspection are 

included in the set of baseline procedures based on, in part, their risk 

importance, 2) risk information is used to help determine the frequency

and scope of inspections, 3) the selection of activities to inspect within 

each procedure is informed with plant-specific risk information, and 4) the 

inspectors are trained in the use of risk information in planning their 

inspections. 

NRC Uses Various 

Tools and Takes a 

Graded and RiskInformed Approach to 

Ensuring the Safety of 

Nuclear Power Plants 

 2

Certain baseline inspections may also be done by regional staff because of their expertise 

in particular aspects of plant operations. 

Page 7 GAO-06-888T 
For inspection findings found to be more than minor,3

 NRC uses its 

significance determination process (SDP) to assign each finding one of 

four colors to reflect its risk significance.4

 Green findings equate to very

low risk significance, while white, yellow, and red colors represent 

increasing levels of risk, respectively. Throughout its application of the 

SDP, NRC incorporates information from the licensee, and the licensee 

has the opportunity to formally appeal the final determination that is 

made. 

In addition to assigning each finding a color based on its risk significance,

all findings are evaluated to determine if certain aspects of plant 

performance, referred to as cross-cutting issues, were a contributing cause 

to the performance problem. The cross-cutting issues are comprised of (1) 

problem identification and resolution, (2) human performance, and (3) 

safety consciousness in the work environment. To illustrate, in analyzing 

the failure of a valve to operate properly, NRC inspectors determined that 

the plant licensee had not followed the correct procedures when 

performing maintenance on the valve, and thus NRC concluded the finding 

was associated with the human performance cross-cutting area. If NRC 

determines that there are multiple findings during the 12-month 

assessment period with documented cross-cutting aspects, more than 

three findings with the same causal theme, and NRC has a concern about 

the licensee’s progress in addressing these areas, it may determine that the 

licensee has a “substantive” cross-cutting issue. Opening a substantive 

cross-cutting issue serves as a way for NRC to notify the plant licensee 

that problems have been identified in one of the areas and that NRC will 

focus its inspection efforts in the cross-cutting area of concern. 

When NRC becomes aware of one or more performance problems at a 

plant that are assigned a risk color greater-than-green (white, yellow, or 

red), it conducts supplemental inspections. Supplemental inspections, 

which are performed by regional staff, expand the scope beyond baseline 

inspection procedures and are designed to focus on diagnosing the cause 

of the specific performance deficiency. NRC increases the scope of its 

supplemental inspection procedures based on the number of greater-than-

 3

Minor issues are defined by NRC as those that have little actual safety consequences, little 

or no potential to impact safety, little impact on the regulatory process, and no willfulness. 

4

The SDP essentially evaluates how an inspection finding impacts the margin of safety of a

plant. The impact is largely evaluated through the use of information on operating 

experience and risk estimates calculated using probabilistic risk assessment (PRA). 

Page 8 GAO-06-888T 
green findings identified, the area where the performance problem was 

identified, and the risk color assigned. For example, if one white finding is

identified, NRC conducts a follow-up inspection directed at assessing the 

licensee’s corrective actions to ensure they were sufficient in both 

correcting the specific problem identified and identifying and addressing 

the root and contributing causes to prevent recurrence of a similar 

problem. If multiple yellow findings or a single red finding is identified, 

NRC conducts a much more comprehensive inspection which includes 

obtaining information to determine whether continued operation of the 

plant is acceptable and whether additional regulatory actions are 

necessary to address declining plant performance. This type of more 

extensive inspection is usually conducted by a multi-disciplinary team of 

NRC inspectors and may take place over a period of several months. NRC 

inspectors assess the adequacy of the licensee’s programs and processes 

such as those for identifying, evaluating, and correcting performance 

issues and the overall root and contributing causes of identified 

performance deficiencies. 

NRC conducts special inspections when specific events occur at plants 

that are of particular interest to NRC because of their potential safety 

significance. Special inspections are conducted to determine the cause of 

the event and assess the licensee’s response. For special inspections, a 

team of experts is formed and an inspection charter issued that describes 

the scope of the inspection efforts. At one plant we reviewed, for example, 

a special inspection was conducted to investigate the circumstances 

surrounding the discovery of leakage from a spent fuel storage pool. 

Among the objectives of this inspection were to assess the adequacy of the 

plant licensee’s determination of the source and cause of the leak, the risk 

significance of the leakage, and the proposed strategies to mitigate leakage 

that had already occurred and repair the problem to prevent further 

leakage. 

In addition to its various inspections, NRC also collects plant performance 

information through a performance indicator program, which it maintains 

in cooperation with the nuclear power industry. On a quarterly basis, each 

plant submits data for 15 separate performance indicators. These objective 

numeric measures of plant operations are designed to measure plant 

performance related to safety in various aspects of plant operations. For 

example, one indicator measures the number of unplanned reactor 

shutdowns during the previous four quarters while another measures the 

capability of alert and notification system sirens, which notify residents 

living near the plant in the event of an accident. Working with the nuclear

power industry, NRC established specific criteria for acceptable 

Page 9 GAO-06-888T 
performance with thresholds set and assigned colors to reflect increasing 

risk according to established safety margins for each of the indicators. 

Green indicators reflect performance within the acceptable range while 

white, yellow, and red colors represent decreasing plant performance, 

respectively. NRC inspectors review and verify the data submitted for each

performance indicator annually through the baseline inspection process. If 

questions arise about how to calculate a particular indicator or what the 

correct value should be, there is a formal feedback process in place to 

resolve the issue. When performance indicator thresholds are exceeded, 

NRC responds in a graded fashion by performing supplemental inspections 

that range in scope depending on the significance of the performance 

issue. 

Under the ROP, NRC places each plant into a performance category on the 

agency’s action matrix, which corresponds to increasing levels of 

oversight based on the number and risk significance of inspection findings 

and performance indicators. The action matrix is NRC’s formal method of 

determining what additional oversight procedures—mostly supplemental 

inspections—are required.5

 Greater-than-green inspection findings are 

included in the action matrix for a minimum of four quarters to allow 

sufficient time for additional findings to accumulate that may indicate

more pervasive performance problems requiring additional NRC oversight. 

If a licensee fails to correct the performance problems within the initial 

four quarters, the finding may be held open and considered for additional 

oversight for more than the minimum four quarters. 

At the end of each 6-month period, NRC issues an assessment letter to 

each plant licensee. This letter describes what level of oversight the plant 

will receive according to its placement in the action matrix performance 

categories, what actions NRC is expecting the plant licensee to take as a 

result of the performance issues identified, and any documented 

substantive cross-cutting issues. NRC also holds an annual public meeting 

at or near each plant site to review performance and address questions 

about the plant’s performance from members of the public and other 

interested stakeholders. Most inspection reports, assessment letters and 

other materials related to NRC’s oversight processes are made publicly

available through a NRC website devoted to the ROP. The website also 

 5

NRC officials can also increase or decrease oversight in ways not in accordance with those 

specified by the action matrix by requesting a deviation. This provision is intended for rare

instances when the oversight levels dictated by the action matrix are not appropriate to 

address a particular performance problem and a more tailored approach is required. 

Page 10 GAO-06-888T 
includes plant-specific quarterly summaries of green or greater inspection 

findings and all the performance indicators. 

The ROP has identified numerous performance deficiencies as inspection 

findings at nuclear power plants since it was first implemented, but most 

of these were considered to be of very low risk to safe plant operations. 

Similarly, there have been very few instances in which performance 

indicator data exceeded acceptable standards. As a result, few plants have

been subjected to high levels of oversight. 

Of more than 4,000 inspection findings identified between 2001 and 2005,

97 percent were green. While green findings are considered to be of “very

low” safety significance, they represent a performance deficiency on the 

part of the plant licensee and thus are important to correct. Green findings 

consist of such things as finding that a worker failed to wear the proper 

radiation detector or finding that a licensee did not properly evaluate and

approve the storage of flammable materials in the vicinity of safety-related

equipment. NRC does not follow-up on the corrective action taken for 

every green finding identified; rather, it relies on the licensee to address 

and track their resolution through the plant’s corrective action program. 

NRC does, however, periodically follow-up on some of the actions taken 

by the licensee to address green findings through an inspection 

specifically designed to evaluate the effectiveness of the licensee’s 

corrective action program. NRC officials stated that green findings provide 

useful information on plant performance and NRC inspectors use the 

findings to identify performance trends in certain areas and help inform 

their selection of areas to focus on during future inspections. In contrast 

to the many green findings, NRC has identified 12 findings of the highest 

risk significance (7 yellow and 5 red), accounting for less than 1 percent of 

the findings since 2001. For example, one plant was issued a red finding—

the highest risk significance—after a steam generator tube failed, causing 

an increased risk in the release of radioactive material. 

Similar to the inspection findings, most performance indicator reports 

have shown the indicators to be within the acceptable levels of 

performance. Only 156, or less than one percent of over 30,000 indicator 

reports from 2001 to 2005, exceeded the acceptable performance 

threshold. Four of the 15 performance indicators have always been 

reported to be within acceptable performance levels. In addition, 46 plants 

have never had a performance indicator fall outside of the acceptable level 

and only three plants reported having a yellow indicator for one 

performance measure; no red indicators have ever been reported. 

NRC Has Continually 

Identified Problems at 

Nuclear Power Plants 

but Few Have Been 

Considered 

Significant to Safe 

Operation of the 

Plants 

Page 11 GAO-06-888T 
On the basis of its inspection findings and performance indicators, NRC 

has subjected more than three quarters of the 103 operating plants to at 

least some level of increased oversight (beyond the baseline inspections) 

for varying amounts of time. Most of these plants received the lowest level

of increased oversight, consisting of a supplemental inspection, to followup on the identification of one or two white inspection findings or 

performance indicators. Five plants have received the highest level of

plant oversight for which NRC allows plants to continue operations, due to 

the identification of multiple white or yellow findings and/or the 

identification of a red finding.6

 One plant received this level of oversight 

because NRC determined that the licensee failed to address the common 

causes of two white findings and held them open for more than four 

quarters. One of these findings involved the recurrent failure of a service

water pump because the licensee failed to take adequate corrective action 

after the first failure. 

NRC inspectors at the plants we reviewed indicated that, when plant 

performance declines, it is often the result of ineffective corrective action 

programs, problems related to human performance, or complacent 

management, which often results in deficiencies in one or more of the 

cross-cutting areas. In assessing the results of the ROP data, we found that 

all plants subjected to NRC’s highest level of oversight also had a 

substantive cross-cutting issue open either prior to or during the time that

it was subjected to increased oversight inspections. 

Overall, NRC’s oversight process shows mostly consistent results from 

2001 to 2005. For example, the total number of green findings at all plants 

ranged from 657 to 889 per year and the total number of other findings 

ranged from 10 to 30 per year with no strong trend (see fig. 1). 

 6

NRC has one additional oversight category for plants with unacceptable performance. 

Plants placed into this category are not permitted to operate. 

Page 12 GAO-06-888T 
Figure 1: ROP Inspection Findings by Year 

Only in the area of cross-cutting issues—or inspection findings for which 

one or more cross-cutting issues was associated—is an increasing trend 

evident (see fig. 2). According to NRC, the reason for this increase is due 

in part to the development of guidance on the identification and 

documentation of cross-cutting issues and its increased emphasis in more 

recent years. 

Page 13 GAO-06-888T 
Figure 2: Trend of ROP Findings with Cross-Cutting Issues

According to NRC officials, the results of its oversight process at an 

industry or summary level serve as an indicator of industry performance, 

which to date indicates good safety performance. On an annual basis, NRC 

analyzes the overall results of its inspection and performance indicator 

programs and compares them with industry level performance metrics to 

ensure all metrics are consistent and takes action if adverse trends are 

identified. While NRC communicates the results of its oversight process on 

a plant-specific basis to plant managers, members of the public, and other 

government agencies through annual public meetings held at or near each

site and an internet Web site, it does not publicly summarize the overall

results of its oversight process, such as the total number and types of 

inspection findings and performance indicators falling outside of 

acceptable performance categories, on a regular basis. 

Page 14 GAO-06-888T 
NRC has taken a proactive approach to improving its reactor oversight 

process. It has several mechanisms in place to incorporate feedback from 

both external and internal stakeholders and is currently working on 

improvements in key areas of the process, including better focusing 

inspections on areas most important to safety, improving its timeliness in 

determining the risk significance of its inspection findings, and modifying 

the way that it measures some performance indicators. NRC is also 

working to address what we believe is a significant shortcoming in its 

oversight process by improving its ability to address plants’ safety culture, 

allowing it to better identify and address early indications of deteriorating 

safety at plants before performance problems develop. 

According to NRC officials, the ROP was implemented with the 

understanding that it would be an evolving process and improvements 

would be made as lessons-learned were identified. Each fall NRC solicits 

feedback from external stakeholders, including industry organizations, 

public interest groups, and state and local officials, through a survey 

published in the Federal Register. NRC also conducts an internal survey of

its site, regional, and headquarters program and management staff every 

other year to obtain their opinions on the effectiveness of the ROP. 

Additionally, NRC has in place a formal feedback mechanism whereby 

NRC staff can submit recommendations for improving various oversight 

components and NRC staff meet with industry officials on a monthly 

basis—in addition to various meetings, workshops, and conferences—to 

discuss oversight implementation issues and concerns. NRC staff also 

incorporates direction provided by the NRC Commissioners and 

recommendations from independent evaluations such as from GAO and 

the NRC Inspector General. The results of these efforts are pulled together 

in the form of an annual self-assessment report, which outlines the overall 

results of its outreach and the changes it intends to make in the year 

ahead. 

According to NRC officials, the changes made to the ROP since its 

implementation in 2000—including those made in response to the DavisBesse incident—have generally been refinements to the existing process 

rather than significant changes to how it conducts its oversight. In the case 

of Davis-Besse, NRC formed a task force to review the agency’s regulatory

processes. The task force’s report, issued in September 2002, contained 

more than 50 recommendations, many associated with the ROP. Among 

the more significant ROP-related recommendations were those to enhance 

the performance indicator that monitors unidentified leakage to be more 

accurate, develop specific guidance to inspect boric acid control programs 

and vessel head penetration nozzles, modify the inspection program to 

NRC Continues to 

Make Improvements 

to its Reactor 

Oversight Process in 

Key Areas 

Page 15 GAO-06-888T 
provide for better follow-up of longstanding issues, and enhance the 

guidance for managing plants that are in an extended shutdown condition 

as a result of significant performance problems. NRC program officials 

told us that the task force’s most significant recommendations were in 

areas outside of the ROP, such as improving the agency’s operating 

experience program. According to NRC, it has implemented almost all of 

the task force’s recommendations. 

Other modifications that NRC has recently made or is in the process of 

making include the following: 

• NRC recently revised seven of its baseline inspection procedures to better 

focus the level and scope of its inspection efforts on those areas most 

important to safety. These revisions resulted from a detailed analysis in 

2005 of its more than 30 baseline inspection procedures. The effort 

involved analyzing the number of findings resulting from each of its 

inspection procedures and the time spent directly observing plant 

activities or reviewing licensee paperwork, among other things. 

• NRC has efforts underway to improve what it refers to as its significance 

determination process (SDP). An audit by the NRC Inspector General, a 

review by a special task group formed by NRC, and feedback from other 

stakeholders have pointed to several significant weaknesses with the SDP. 

For example, internal and external stakeholders raised concerns about the 

amount of time, level of effort, and knowledge and resources required to 

determine the risk significance of some findings. Industry officials 

commented that because most inspection findings are green, one white 

finding at a plant can place it in the “bottom quartile” of plants from a 

performance perspective. Therefore, industry officials explained, licensees 

try to avoid this placement and will expend a great deal of effort and 

resources to provide additional data to NRC to ensure the risk level of a 

finding is appropriately characterized. This can add significant time to the 

process because different technical tools may be used that then must be 

incorporated with NRC’s tools and processes. The delay in assigning a 

color to a finding while the new information is being considered could also 

affect a plant’s placement on NRC’s action matrix, essentially delaying the 

increased oversight called for if the finding is determined to be greaterthan-green. NRC developed a SDP Improvement Plan in order to address 

these and other concerns and track its progress in implementing key 

changes. For example, NRC introduced a new process aimed at improving 

timeliness by engaging decision-makers earlier in the process to more 

quickly identify the scope of the evaluation, the resources needed, and the 

schedule to complete the evaluation.

Page 16 GAO-06-888T 
• NRC is also taking actions to improve its performance indicators. These 

actions are partly to address concerns that the indicators have not 

contributed to the early identification of poorly performing plants to the 

degree originally envisioned as they are almost always within acceptable 

performance levels (green). There have been several cases where plants 

reported an acceptable performance indicator and performance problems 

were subsequently identified. For example, NRC inspectors at one plant 

noted that while performance indicator data related to its alert and 

notification system in place for emergency preparedness had always been

reported green, the system had not always been verified to be functioning 

properly. On the other hand, industry officials believe that the high 

percentage of indicators that are green is indicative of plants’ good 

performance. Several plant managers told us that they closely monitor and 

manage to the acceptable performance thresholds established for each 

indicator, and will often take action to address performance issues well 

before the indicator crosses the acceptable performance threshold. 

Because NRC inspectors verify indicator data once a year, a potential 

disagreement over the data might not surface for up to a year after it is 

reported, and it may take even longer to resolve the disagreement with the 

licensee. Similar to delays with the SDP, a delay in assigning a color while 

the disagreement is resolved could affect a plant’s placement on NRC’s 

action matrix, and delay the increased oversight called for if the indicator

is determined to be greater-than-green. NRC plans to work with the 

industry to review selected indicator definitions to make interpretation 

more concise and reduce the number of discrepancies. To date, NRC has 

focused significant effort on developing a key indicator to address known 

problems with the performance indicators measuring the unavailability of

safety systems. NRC is also in the process of changing the definition for 

several other indicators, in addition to considering the feasibility of new 

indicators. 

I would now like to discuss what we believe is one of NRC’s most 

important efforts to improve its oversight process by increasing its ability 

to identify and address deteriorating safety culture at plants. NRC and 

others have long recognized that safety culture and the attributes that 

make up safety culture, such as attention to detail, adherence to 

procedures, and effective corrective and preventative action, have a 

significant impact on a plant’s performance. Despite this recognition and

several external groups’ recommendations to better incorporate safety 

culture aspects into its oversight process, it did not include specific 

measures to explicitly address plant safety culture when it developed the 

ROP in 2000. The 2002 Davis-Besse reactor vessel head incident 

highlighted that this was a significant weakness in the ROP. In 

investigating this event, we and others found that NRC did not have an 

Page 17 GAO-06-888T 
effective means to identify and address early indications of deteriorating 

safety at plants before performance problems develop.7

 Largely as a result

of this event, in August 2004, the NRC Commission directed the NRC staff 

to enhance the ROP by more fully addressing safety culture.

In response to the Commission’s directive, the NRC staff formed a safety 

culture working group in early 2005. The working group incorporated the 

input of its stakeholders through a series of public meetings held in late

2005 and early 2006. In February 2006, NRC issued its proposed approach

to better incorporate safety culture into the ROP. NRC officials expect to

fully implement all changes effective in July 2006.

NRC’s proposed safety culture changes largely consist of two main 

approaches: first, clarifying the identification and treatment of crosscutting issues in its inspection processes and second, developing a 

structured way for NRC to determine the need for a safety culture 

evaluation of plants. NRC has developed new definitions for each of its 

cross-cutting issues to more fully address safety culture aspects and 

additional guidance on their treatment once they are identified. For 

example, the problem identification and resolution cross-cutting area is 

now comprised of several components—corrective action program, self 

and independent assessments, and operating experience. NRC inspectors 

are to assess every inspection finding to determine if it is associated with 

one or more of the components that make up each of the cross-cutting 

areas. Inspectors then determine, on a semi-annual basis, if a substantive 

cross-cutting issue exists on the basis of the number and areas of crosscutting components identified. If the same substantive cross-cutting issue 

is identified in three consecutive assessment periods, NRC may request 

that the licensee perform an assessment of its safety culture. The intent is

to provide an opportunity to diagnose a potentially declining safety culture 

before significant safety performance problems occur. 

Under its approach, NRC would expect the licensees of plants with more 

than one white color finding or one yellow finding to evaluate whether the 

performance issues were in any way caused by any safety culture 

components, and NRC might request the licensee to complete an 

independent assessment of its safety culture, if the licensee did not 

 7

GAO, Nuclear Regulation: NRC Needs to More Aggressively and Comprehensively

Resolve Issues Related to the Davis-Besse Nuclear Power Plant’s Shutdown, GAO-04-415

(Washington, D.C.: May 17, 2004). 

Page 18 GAO-06-888T 
identify an important safety culture component. For plants where more 

significant or multiple findings have been identified, the NRC would not 

only independently evaluate the adequacy of the independent assessment 

of the licensee’s safety culture, but it might also conduct its own 

independent assessment of the licensee’s safety culture. 

Some of NRC’s proposed actions regarding safety culture have been 

controversial, and not all stakeholders completely agree with the agency’s 

approach. For example, the nuclear power industry has expressed concern 

that the changes could introduce undue subjectivity to NRC’s oversight, 

given the difficulty in measuring these often intangible and complex 

concepts. Several of the nuclear power plant managers at the sites we 

reviewed said that it is not always clear why a cross-cutting issue was 

associated with finding, or what it will take to clear themselves once 

they’ve been identified as having a substantive cross-cutting issue open. 

Some industry officials worry that this initiative will further increase the 

number of findings that have cross-cutting elements associated with them

and if all of the findings have them they will lose their value. Industry 

officials also warn that if it is not implemented carefully, it could divert 

resources away from other important safety issues. Other external 

stakeholders, on the other hand, suggest that this effort is an important 

step in improving NRC’s ability to identify performance issues at plants 

before they result in performance problems. Importantly, there will be 

additional tools in place for NRC to use when it identifies potential safety 

culture concerns. NRC officials view this effort as the beginning step in an

incremental approach and acknowledge that continual monitoring, 

improvements, and oversight will be needed in order to better allow 

inspectors to detect deteriorating safety conditions at plants before events

occur. NRC plans to evaluate stakeholder feedback and make changes 

based on lessons learned from its initial implementation of its changes as 

part of its annual self-assessment process for calendar year 2007. 

Mr. Chairman, this completes my prepared statement, I would be happy to

respond to any questions you or the other Members of the Subcommittee 

may have at this time. 

For further information about this testimony, please contact me at (202) 

512-3841 (or at wellsj@gao.gov). Raymond H. Smith, Jr. (Assistant 

Director), Alyssa M. Hundrup, Alison O’Neill, and Dave Stikkers made key 

contributions to this testimony. 

Page 19 GAO-06-888T 

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