```

[Senate Hearing 108-104]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 108-104

                    NUCLEAR REGULATORY COMMISSION: 
                       OVERSIGHT OF 2003 PROGRAMS

=======================================================================

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE, 
                           AND NUCLEAR SAFETY

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 13, 2003

                               __________

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

                                 ______

88-294              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      ONE HUNDRED EIGHTH CONGRESS
                             first session

                  JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia             JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri        MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio            HARRY REID, Nevada
MICHAEL D. CRAPO, Idaho              BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island         JOSEPH I. LIEBERMAN, Connecticut
JOHN CORNYN, Texas                   BARBARA BOXER, California
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
CRAIG THOMAS, Wyoming                THOMAS R. CARPER, Delaware
WAYNE ALLARD, Colorado               HILLARY RODHAM CLINTON, New York
                     Andrew Wheeler, Staff Director
                 Ken Connolly, Minority Staff Director
                                 ------                                

     Subcommittee on Clean Air, Climate Change, and Nuclear Safety

                  GEORGE V. VOINOVICH, Ohio, Chairman
MICHAEL D. CRAPO, Idaho              THOMAS R. CARPER, Delaware
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
JOHN CORNYN, Texas                   HARRY REID, Nevada
CRAIG THOMAS, Wyoming                HILLARY RODHAM CLINTON, New York

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

                           FEBRUARY 13, 2003
                           OPENING STATEMENTS

Carper, Hon. Thomas R., U.S. Senator from the State of Wyoming...     9
Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New 
  York...........................................................    20
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     7
Jeffords, James M., U.S. Senator from the State of Vermont.......    10
Reid, Hon. Harry, U.S. Senator from the State of Nevada..........    47
Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     1

                               WITNESSES

Bell, Hubert T., Inspector General, U.S. Nuclear Regulatory 
  Commission, accompanied by: George A. Mulley, Senior Level 
  Assistant for Investigative Operations, Nuclear Regulatory 
  Commission and Stephen D. Dingbaum, Assistant Inspector General 
  for Audits, Nuclear Regulatory Commission......................    40
    Prepared statement...........................................   113
    Responses to additional questions from:
        Senator Carper...........................................   120
        Senator Clinton..........................................   121
        Senator Inhofe...........................................   118
        Senator Voinovich........................................   120
Meserve, Richard A., Chairman, U.S. Nuclear Regulatory 
  Commission, accompanied by: Greta Joy Dicus, Commissioner; Nils 
  J. Diaz, Commissioner; Edward McGaffigan, Jr., Commissioner and 
  Jeffrey S. Merrifield, Commissioner............................    11
    Event Notification...........................................    87
    Inspection Report............................................88-110
    Letter from Glen W. Meyer, chief, Projects Branch 3, Division 
      of Reactor Projects, regarding Salem Nuclear Generating 
      Station--NRC Inspection Report No. 50-272/02-09, 50-311/02-
      09.........................................................87-110
    Prepared statement...........................................    48
    Press Release No. 03-052, April 29, 2003...............55-57, 78-80
    Responses to additional questions from:
        Senator Carper...........................................    86
        Senator Inhofe...........................................    52
        Senator Jeffords.........................................    55
        Senator Lieberman........................................    70
        Senator Voinovich........................................    59
    Staff Response to OIG's October 16, 2002, Report, ``Review of 
      NRC's Handling and Marking of Sensitive Unclassified 
      Information''..............................................    76

                          ADDITIONAL MATERIAL

Witt, Jere, prepared statement...................................   121

 
                    NUCLEAR REGULATORY COMMISSION: 
                       OVERSIGHT OF 2003 PROGRAMS

                              ----------                              

                      THURSDAY, FEBRUARY 13, 2003

                               U.S. Senate,
         Committee on Environment and Public Works,
                 Subcommittee on Clean Air, Climate Change 
                                        and Nuclear Safety,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9.30 a.m. in 
room 406, Dirksen Senate Office Building, Hon. George V. 
Voinovich (chairman of the subcommittee) presiding.
    Present: Senators Voinovich, Inhofe, Carper, Jeffords, and 
Clinton.

  OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR 
                     FROM THE STATE OF OHIO

    Senator Voinovich. Good morning. The hearing will come to 
order.
    Today's hearing continues our ongoing oversight of the 
Nuclear Regulatory Commission. This oversight began by my 
predecessor, the chairman of this committee, Senator Inhofe 
back in 1998, and this is the fifth oversight hearing in 6 
years. I believe that Chairman Inhofe deserves a lot of credit 
for starting these hearings. It is my intention as chairman to 
continue this strong oversight.
    One of the main issues that I have had of what I would like 
to discuss today is an incident involving a nuclear plant in my 
State. While this may be the first time that I am discussing 
this matter at a public hearing it is not my only involvement, 
and I appreciate that the NRC has been open to my requests for 
information. I am particularly thankful to Chairman Meserve for 
his willingness to keep me apprised of the situation. I want to 
thank all of the NRC commissioners and inspector general for 
being here today with us.
    Today's hearing is the first of these oversight hearings 
since the tragic events of September 11th. As all of you are 
undoubtedly aware concerns over terrorists attacks on America's 
nuclear facilities are real and are warranted. Members of this 
committee on both sides of the aisle, including myself, have 
worked with the Administration on the creation of the 
Department of Homeland Security and the protection of our 
nuclear facilities. Senator Jeffords, while he was chairman of 
this committee, worked very hard on this issue, as have Senator 
Reid and Senator Clinton.
    I was pleased that Senator Jeffords held one hearing on 
nuclear security and then a second closed hearing that I 
requested for national security reasons. Chairman Inhofe and I 
intend to hold hearings later this year on the issue of nuclear 
security and will likely mark up a nuclear security bill.
    Because we intend to hold those hearings and markups later, 
I would ask that we keep the focus of the hearings today on the 
operations budget and oversight activities of the Nuclear 
Regulatory Commission rather than on the very valid issue 
surrounding nuclear safety or security. The mission of the 
Nuclear Regulatory Commission is one of the most vital missions 
carried out by the Federal Government--to regulate the Nation's 
civilian use of the by-products source and special nuclear 
materials, to ensure adequate protection of public health and 
safety, to promote the common defense and security, and to 
protect the environment.
    I want to focus for just a minute on these three aspects of 
this regulatory mission which is laid out in the Atomic Energy 
Act of 1954 and the Energy Reorganization Act of 1974. The 
first and most important of the NRC's critical missions is 
regulation of nuclear materials in order to ensure adequate 
protection of public health and safety. I want to make myself 
perfectly clear here: The No. 1 issue for the NRC is safety. 
Period. There is no greater issue. I want the people I serve in 
Ohio and my fellow Americans to be safe and it is the NRC's job 
to guarantee it.
    As you are well aware, there have been some serious 
problems at the Davis-Besse Nuclear Power Station since this 
panel's last oversight hearing and the reactor at Davis-Besse 
located at Oak Harbor and operated by First Energy. It has been 
shut down for over a year. Investigations conducted by First 
Energy and the NRC have revealed that boric acid corrosion had 
eaten entirely through a 6.63 inch thick carbon steel RVP head, 
and almost entirely through a thin internal liner of stainless 
steel cladding. The stainless steel cladding, which is not 
designed to act as a system pressure boundary, was the only 
thing preventing a major loss of coolant, an accident that 
could have released some 60,000 gallons of highly radioactive 
liquid from the reactor into the containment area.
    Following this discovery, I was assured that there were 
safety measures in place that would have prevented a major 
nuclear accident. I was told that the people of Ohio were safe 
because of the design of the plant. To my dismay, I read in a 
newspaper article on Tuesday in the Akron Beacon Journal 
entitled ``Nuclear Plant's Cooling System Flawed.'' It seems 
that the emergency cooling system at Davis-Besse that is 
intended to prevent a nuclear disaster--from First Energy, 
``would not have worked.'' This is from the First Energy 
engineer--``would not have worked as it's designed to work.''
    Although I was told immediately following this incident 
there were adequate safety measures in place to prevent a 
disaster, the fact of the matter is that the plant's safety 
measures might have been sufficient really troubles me. And I 
would like some answers to that and I want somebody to tell me 
what's going on.
    But it does not stop there. Subsequent investigations have 
also revealed that both First Energy and the NRC missed several 
opportunities to identify and correct the corrosion problem 
before last February. In fact, the NRC has concluded that the 
boric acid problems have been present and discoverable since 
1996. This is particularly troubling to me. Simply put, I want 
to get to the bottom of these events. I have expressed my 
extreme concern to First Energy over what has happened. I have 
asked the GAO to investigate what happened at Davis-Besse. Now 
it is your turn to hear of my concern.
    It is simply not good enough to know what happened at 
Davis-Besse. I want to know what the NRC has done to correct 
the problems. I want to know what the NRC is going to do to 
prevent this from ever happening again at Davis-Besse or, for 
that matter, any other nuclear facility in America. I want to 
know what the NRC is doing to get Davis-Besse back on line in a 
manner that will absolutely protect the people of my State. I 
am pleased that the people most intimately affected by Davis-
Besse, the people of Ottawa County, are so actively involved in 
the determination of when and if Davis-Besse will be on line.
    I would like to read a portion of the statement from Jere 
Witt, Ottawa County administrator, who has asked that I submit 
his statement in our record of this hearing. ``A renewed 
stringent regulation by the NRC must be part of this process. 
This regulation must be based on knowledge and common sense, 
not one influenced by political agendas. My personal thanks to 
the NRC staff, especially Jim Dyer, Jack Grobe, Bill Dean, and 
Christina Lippa for their open and candid discussion with the 
residents of Ottawa County and myself. They have gone above and 
beyond to ensure that we are informed. I would also like to 
express my appreciation to First Energy, especially to Peter 
Berg, Bob Saunders, and Lou Meyers, for allowing me to 
participate on the Restart Overview Panel. They have provided 
me free access to all facets of Davis-Besse.''
    I would like unanimous consent to include the entire 
statement that was submitted to me. There being none, it will 
be in the record.
    I appreciate the fact that the people most impacted by this 
are intimately involved in this whole business--I hope that you 
think that we provide you comfortable chairs because you are 
going to be sitting in them for a long time until we are 
absolutely assured that this kind of thing is never going to 
happen again in our country.
    The second purpose of the NRC is to promote the common 
defense and security. Since the terrorists attack on September 
11, 2001, this committee has conducted a comprehensive review 
of the Nation's nuclear facilities, held hearings on their 
safety and security, marked up nuclear safety security 
legislation, and participated in the creation of the Department 
of Homeland Security.
    Although the NRC has not been moved under the Department of 
Homeland Security, it is most important that the commission be 
considered as a Homeland Security agency. President Bush's 
fiscal year 2004 budget requests include $53.1 million for 
homeland activities at the NRC, more than a 50 percent 
increase. I would like to hear from the commission what it 
intends to do with this money and how it intends to work with 
the newly created Department of Homeland Security.
    There are also some other questions that I think we all 
have concerning your recent budget proposal that need an 
explanation. Particularly, it is my understanding that the 
Administration has proposed cutting spending on inspection 
activities. I just don't understand that, especially when 
according to what I have read the NRC did an inadequate job of 
inspecting and monitoring what was going on at Davis-Besse.
    As chairman of the Subcommittee on Oversight of Government 
Management in the Federal Workforce, I am convinced that if the 
NRC has the right people with the right knowledge and skills in 
the right place at the right time--if they had--and if First 
Energy had had the right people with the right knowledge and 
skills at the right time and the right place, we wouldn't be 
here today having this hearing.
    Lastly, the third of the NRC's critical missions is to 
protect the environment. Over the last 40 years, nuclear energy 
has proven to be a safe, reliable, clean source of energy. It 
currently produces 20 percent of our electricity and since 
1973, the use of nuclear energy to generate electricity has 
prevented 62 million tons of sulphur dioxide, over 32 million 
tons of nitrogen, and over 2.6 billion tons of carbon being 
released into the air.
    The Energy Information Administration predicts that we will 
need about a 30 percent increase in electrical generation by 
the year 2050. We are dependent on fossil fuels, coal, oil, and 
natural gas--and we will be for the foreseeable future, 
although we are making some significant progress in the use of 
renewables. Nuclear energy continues to be our next best 
alternative. If we are going to be serious about protecting our 
environment while providing safe, reliable, and affordable 
electricity to all Americans, we need to increase our use of 
renewables, improve how we burn fossil fuels, promote 
efficiency, promote renewables, and increase the development of 
nuclear energy. If we are to do this we must ensure to the 
public that those facilities now in operation are safe.
    I am anxious to hear from the witnesses today about how 
they can guarantee that they are safe. Our witnesses today 
include the chairman and commissioners of the Nuclear 
Regulatory Commission as well as the Inspector General of the 
Nuclear Regulatory Commission. I would like to thank Chairman 
Meserve and the rest of the commission for coming down here to 
discuss these issues. I look forward to their testimony and 
working with my colleagues on this issue.
    [The prepared statement of Senator Voinovich follows:]

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

    The hearing will come to order. Good Morning.
    Today's hearing continues our ongoing oversight of the Nuclear 
Regulatory Commission. This oversight began by my predecessor, Chairman 
Inhofe, when he was the chairman of this subcommittee in 1998, and is 
the 5th oversight hearing in 6 years. I believe that Chairman Inhofe 
deserves a lot of credit for starting these hearings. It is my 
intention as chairman to continue this strong oversight.
    One of the main issues that I would like to discuss today is an 
incident involving a nuclear plant in my State of Ohio. While this may 
be the first time that I am discussing the matter at a public hearing, 
this is not my only involvement. I appreciate that the NRC has been 
open and responsive to my requests for information. I am particularly 
thankful to Chairman Meserve and his willingness to keep me apprised of 
this situation. I want to thank all of the NRC commissioners and 
Inspector General for being here today.
    Today's hearing is the first of these oversight hearings since the 
tragic events of September 11, 2001. As all of you are undoubtedly 
aware, concerns over terrorist attacks on America's nuclear facilities 
are real and are warranted.
    Members of this committee on both sides of the aisle--including 
myself--have worked with the Administration on the creation of the 
Department of Homeland Security and the protection of our nuclear 
facilities. Senator Jeffords while he was chairman of this committee 
worked very hard on this issue, as have Senators Reid and Clinton.
    I was pleased that Senator Jeffords held one hearing on nuclear 
security and then a second closed hearing that I requested for national 
security reasons. Chairman Inhofe and I intend to hold hearings later 
this year on the issue of nuclear security and will likely mark up a 
nuclear security bill.
    Because we intend to hold those hearings and markups later, I would 
ask that we keep the focus of this hearing on the operations, budget, 
and oversight activities of the Nuclear Regulatory Commission--rather 
than on the very valid issues surrounding nuclear security.
    The Mission of the Nuclear Regulatory Commission is one of the most 
vital missions carried out by the Federal Government--to regulate the 
Nation's civilian use of byproduct, source, and special nuclear 
materials to ensure adequate protection of public health and safety, to 
promote the common defense and security, and to protect the 
environment.
    I want to focus for just a minute on the three aspects of this 
regulatory mission--which is laid out in the Atomic Energy Act of 1954 
and the Energy Reorganization Act of 1974.
    The first, and most important, of the NRC's critical missions is 
regulation of nuclear materials in order to ensure adequate protection 
of public health and safety.
    I want to make myself perfectly clear here: The No. 1 issue for the 
NRC is safety. Period. There is no greater issue. I want the people I 
serve in Ohio and my fellow Americans to be safe, and it is the NRC's 
job to guarantee it.
    As you are well aware, there have been some serious problems at the 
Davis-Besse Nuclear Power Station since this panel's last oversight 
hearing and the reactor at Davis-Besse, located in Oak Harbor, OH, and 
operated by First Energy, has been shut down for a year.
    Investigations--conducted by FirstEnergy and the NRC--have revealed 
that boric acid corrosion had eaten entirely through a 6.63 inch thick 
carbon-steel RPV head, and almost entirely through a thin internal 
liner of stainless steel cladding. This stainless steel cladding, which 
is not designed to act as a system pressure boundary, was the only 
thing preventing a major Loss-of-Coolant accident that could have 
released some 60,000 gallons of highly radioactive liquid from the 
reactor and into the containment area.
    Following this discovery, I was assured that there were safety 
measures in place that would have prevented a major nuclear accident. I 
was told that the people of Ohio were safe because of the design of the 
plant. To my dismay, I read a newspaper article on Tuesday in the Akron 
Beacon Journal entitled ``Nuclear plant's cooling system flawed.'' It 
seems that the emergency cooling system at Davis-Besse that is intended 
to prevent a nuclear disaster, and I quote from a FirstEnergy engineer, 
``would not have worked as it's designed to work.'' Although I was told 
immediately following this incident that there were adequate safety 
measures in place to prevent a disaster, the fact of the matter is that 
this plant's safety measures might have been deficient. I was told one 
thing but read in the newspaper another. I want some answers. I want 
someone to tell me what is going on here.
    But is does not stop there. Subsequent investigations have also 
revealed that both FirstEnergy and the NRC missed several opportunities 
to identify and correct the corrosion problem before last February. In 
fact, the NRC has concluded that the boric acid problems had been 
present and discoverable since 1996. This is particularly troubling to 
me.
    Simply put, I want to get to the bottom of these events. I have 
expressed my extreme concern to FirstEnergy over what has happened. I 
have asked the GAO to investigate what happened at Davis Besse, and now 
it is your turn to hear my concern.
    It is simply not good enough to know what happened at Davis Besse. 
I want to know what the NRC has done to correct the problems. I want to 
know what the NRC is doing to prevent this from ever happening again at 
Davis-Besse or any other nuclear power plant in America. And I want to 
know what the NRC is doing to get Davis-Besse back online in a manner 
that will absolutely protect the people of Ohio.
    I am pleased that the people most intimately affected by Davis-
Besse, the people of Ottawa County are so actively involved in the 
determination of when and if Davis-Besse will be online.
    I would like to read a portion of a statement by Jere Witt, Ottawa 
County Administrator, who has asked that I submit his statement in our 
record of this hearing:
    ``A renewed stringent regulation by the NRC must be part of this 
process. This regulation must be based on knowledge and common sense, 
not one influenced by political agenda's. My personal thanks to NRC 
staff especially (Jim Dyer, Jack Grobe, Bill Dean, Christine Lipa) for 
their open and candid discussion with the residents of Ottawa County 
and myself. They have gone above and beyond to insure we are informed. 
I would also like to express my appreciation to FirstEnergy especially 
(Peter Berg, Bob Saunders, Lew Myers) for allowing me to participate on 
the Restart Overview Panel. They have provided me free access to all 
facets of Davis-Besse.''
    I ask unanimous consent that the entire statement be submitted into 
the record. No objection heard, it is so ordered.
    With that being said, I hope that you think we provide comfortable 
chairs for our witnesses, because you are going to be sitting in them 
again and again until this committee is absolutely assured that you 
have taken the necessary steps to prevent this kind of potential 
disaster from ever happening again.
    The second of the NRC's critical missions is to promote the common 
defense and security.
    Since the terrorist attacks of September 2001, this committee has 
conducted a comprehensive review of the nation's nuclear facilities, 
held hearings on their safety and security, marked up nuclear security 
legislation and participated in the creation of the Department of 
Homeland Security. As I have already mentioned, we intend to hold more 
hearings on this topic later.
    Although the NRC was not moved into the Department of Homeland 
Security, it is most important that the commission be considered as a 
Homeland Security Agency. President Bush's fiscal year 2004 Budget 
request includes $53.1 million for Homeland Security activities at the 
NRC--more than a 50 percent increase. I would like to hear from the 
commission what it intends to do with this money and how it intends to 
work with the newly created Department of Homeland Security. There are 
also some other questions that I think we all have concerning your 
recent budget proposal that need an explanation. Particularly, it is my 
understanding that the Administration has proposed cutting spending on 
inspection activities. I just don't understand that, especially when 
according to what I have read, the NRC did an inadequate job on 
inspecting and monitoring what was going on at Davis-Besse.
    As chairman of the Subcommittee on Oversight of Government 
Management and the Federal Workforce, I am convinced that if the NRC 
had the right people, with the right knowledge and skills in the right 
place at the right time--and if FirstEnergy had the right people, with 
the right knowledge and skills in the right place at the right time--we 
would not be having this discussion today.
    Lastly, the third of the NRC's critical missions is to protect the 
environment.
    Over the last 40 years, nuclear energy has proven to be a safe, 
reliable, and clean source of energy. It currently produces 20 percent 
of our electricity, and since 1973 the use of nuclear energy to 
generate electricity has prevented 62 million tons of sulfur dioxide, 
over 32 million tons of nitrogen, and over 2.6 billion tons of carbon 
from being released into our air.
    The Energy Information Administration predicts that we will need 
about a 30 percent increase in electrical generation by the year 2015. 
Today, we are dependent on fossil fuels--coal, oil, and natural gas--
and we will be for the foreseeable future. Nuclear energy continues to 
be our next best alternative.
    If we are going to be serious about protecting our environment 
while providing safe, reliable and affordable electricity to all 
Americans, we need to increase our use of renewable energy, improve how 
we burn fossil fuels, promote efficiency, and increase the development 
of nuclear energy.
    If we are to do this we must ensure the public that those 
facilities now in operation are safe. I am anxious to hear from our 
witnesses today about how they can guarantee that they are safe.
    Our witnesses today include the chairman and commissioners of the 
Nuclear Regulatory Commission, as well as the Inspector General of the 
Nuclear Regulatory Commission. I would like to thank Chairman Meserve 
and the rest of the commission for coming down here to discuss these 
issues, and I look forward to their testimony and to working with my 
colleagues on these issues.

    Senator Voinovich. I would now like to call on the ranking 
member of this subcommittee, Chairman Inhofe.

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

    Senator Inhofe. I had asked the ranking member if he would 
defer to me for probably less than 2 minutes.
    Senator Carper. And I had refused.
    [Laughter.]
    Senator Inhofe. Oh, well.
    Senator Carper. I am happy to.
    Senator Inhofe. Thank you very much, Senator Carper. I 
appreciate it. We have Secretary Rumsfeld and General Meyers 
before the Senate Armed Forces Committee at this very time and 
I have to go back down there.
    I would like to put my whole opening statement in the 
record.
    I would just mention a couple of things. In 1998, as you 
mentioned Mr. Chairman, there had not been any oversight of NRC 
for many years. We found--and it's true with any bureaucracy if 
there's no oversight, things are happening that shouldn't be 
happening. I just want to compliment this group before us. We 
got in there. We looked at the problems that were there and 
have made a lot of corrections.
    Mr. Meserve, I understand that this may be your last time 
you will be appearing before us. We certainly wish you the very 
best. Mr. Diaz, I understand that your mother is having surgery 
and you may have to leave early. Of course, we will say a 
prayer for her, OK?
    The last thing I want to do is just emphasize something the 
chairman said. We have an energy crisis in this country. When 
we consider an energy bill, we recognize that this Nation needs 
all forms of energy. We need renewables; we need fossil fuels; 
we need the natural gas; ane we need nuclear energy. Senator 
Voinovich, you and I can remember people marching in the 
streets against the nuclear plants--the same people during the 
ambient air hearings who were concerned about air pollution. We 
don't have air pollution with nuclear energy. In this country, 
we are only 20 percent dependent upon nuclear energy. It really 
should be more than that.
    I am hoping that we are going to be able to do something 
about using this nuclear energy to help us with the current 
crisis. I am fearful of a lot of the legislation that I see 
around that might be cutting back on some forms of energy 
because right now we need it all.
    So, Mr. Chairman, you and the ranking member have an 
awesome obligation to America to do what you can to keep the 
progress going for nuclear energy to get more of it for America 
and to run this great economic machine of ours.
    The other day commented on a talk show, ``You can't run the 
most highly industrialized nation in the history of the world 
with windmills.'' There are a lot of people that believe we can 
do that. However, until that great day comes, we need all forms 
of energy, including nuclear energy.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Inhofe follows:]

 Statement of Hon. Jim Inhofe, U.S. Senator from the State of Oklahoma

    Thank you Mr. Chairman. Welcome to Chairman Meserve and all of the 
commissioners. Commissioner Diaz--I understand your mother will be 
having surgery tomorrow and you may have to leave this hearing early to 
catch your flight. I wish my very best to you and her and I hope she 
enjoys a speedy recovery.
    I also want to take a moment to publicly thank Chairman Meserve as 
this may be the last time we see him before this committee. I can think 
of no higher compliment than to say you are leaving the NRC a more 
effective and efficient Agency than when you first assumed your 
position as chairman. Job well done and we all wish you well. I have 
always been an advocate of nuclear power. Nuclear power has proven to 
be a safe, reliable and clean source of energy. Over the next 15 years, 
our energy demands will increase by nearly 30 percent. If we are to 
meet the energy demands of the future, and we are serious about 
reducing utility emissions, then we should get serious about the zero 
emissions energy production that nuclear power provides. Nuclear 
facilities are more efficient today than ever before and we are 
exploring new, even better technologies. We should be excited about the 
future of nuclear energy. I am pleased with NRC's commitment to both 
license renewal and new reactor licensing as they are key to the 
continued success of this clean, efficient energy. And this Commitee 
must do its part, and we should start by reauthorizing Price-Anderson. 
In 1998, as chairman of this subcommittee, I began a series of 
oversight hearings of the NRC. The hearing I held in 1998 was the first 
held by this committee in years. Fortunately, every year since that 
time we have had the commission appear before us. I expect that 
rigorous oversight of the NRC to continue.
    In fact, the committee will hold another nuclear hearing in the 
near future that will focus on the security of our nuclear energy 
infrastructure. In this time of the constant threat posed by those who 
wish to do harm to our Nation and freedom loving people, protecting our 
Nation's commercial nuclear infrastructure, and more importantly, those 
who live near these facilities, is paramount.
    When I began conducting oversight of the NRC, I did so with the 
goal of changing the bureaucratic atmosphere that had infected the NRC. 
By 1998, the NRC had become an Agency of process, not results. It was 
neither efficient nor effective. If the Agency was to improve it had to 
employ a more results oriented approach--one that was risk-based and 
science-based, not one mired in unnecessary process and paperwork. I am 
pleased that in the last 5 years, we have seen tremendous strides and 
those who work for the NRC should be proud. This approach has made the 
NRC a lean and more effective regulatory Agency.
    But while I am pleased with the progress, many challenges remain.
    Today, this committee will be probing for answers, not only 
regarding the day-to-day activities of the commission, but also more 
pointed concerns that have recently come to light. Davis-Besse in Ohio 
is one such situation where a number of questions have arisen. Those 
questions need to be answered and public confidence restored. I applaud 
Senator Voinovich for what he has already done. For some time now he 
has been asking the tough questions and demanding answers of all 
involved. He has used his leadership position both forcefully and 
responsibly. The people of Ohio are fortunate to have such a good 
person as their Senator.
    As the chairman of the full committee, you can count on support and 
my continued attention to the NRC and its mission. Thank you.

    Senator Carper. Thank you, Mr. Chairman. I look forward to 
working with you in your new capacity as chairman of the 
Environment and Public Works Committee.
    Senator Inhofe. Thank you, Senator Carper.
    Senator Voinovich. Now I would like call on the ranking 
member of this subcommittee, Senator Carper. Governor Carper 
and I have been friends for a long period of time. We are the 
only two graduates of the Ohio State University here in the 
U.S. Senate. Senator Carper and I worked very closely with each 
other while we were both involved in leadership positions in 
the National Governor's Association. I am really delighted that 
Tom and I are going to be working together on this 
subcommittee. I think because of that we made some fruitful 
things happen there.

 OPENING STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM 
                     THE STATE OF DELAWARE

    Senator Carper. Thank you very much, Mr. Chairman.
    To our witnesses today, we welcome you. We thank you for 
your stewardship and for joining us. Governor Voinovich and I 
have served together--we haven't really sat together like this 
for about 10 years now. He was chairman of the National 
Governor's Association when I was vice chairman and I was 
privileged to succeed him there. He was chairman of the Jobs 
for America's Graduates. I was his vice chairman. Here we are 
here today. He is the chairman of this subcommittee and I am 
still his sidekick. We have worked on a lot of things together. 
My hope is that we will find plenty of common ground. I think 
we will.
    I am just delighted that Senator Lieberman is running for 
President. That gives me an opportunity to serve as the ranking 
member. I hope he stays in that campaign for as long as he can. 
God bless him.
    [Laughter.]
    Senator Carper. I just want to say--and this is following 
up on some of the comments of Chairman Voinovich. I am an old 
Navy guy, and in the Navy we have aircraft carriers that are 
essentially floating nuclear reactors. We have submarines that 
are essentially a floating nuclear reactor. When you spend time 
around vessels that rely on nuclear power largely, and you know 
people who have lived on those for 3 years, you have a greater 
degree of comfort with nuclear power than you otherwise would.
    I am concerned, however, with the points that Senator 
Voinovich raises about Davis-Besse. I think Senator Clinton is 
going to be along later and she will raise some concerns about 
a plant--I think it is called Indian Point--up in New York. I 
will raise with you some concerns about releases of tritium, I 
think in the groundwater, around the Salem One Nuclear Power 
Plant just across the river from us in Delaware--right across 
the Delaware River--in Salem, New Jersey, where some tritium 
apparently last December leaked into the groundwater and was 
just reported this past week.
    I think that I--and certainly in Senator Inhofe, Senator 
Voinovich--that you have people who believe that nuclear power 
is important and part of our electric generation in this 
country. It ought to be a more important aspect as we go 
forward. One of the best ways to ensure that it is, is to 
address the concerns that he is raising on Davis-Besse, and 
that I will raise on Salem, and that Senator Clinton will raise 
with respect to Indian Point.
    Before I come back to the issue of nuclear power, let me 
say, Mr. Chairman, that I am delighted to be on this 
subcommittee particularly with you, but the subcommittee's 
jurisdiction obviously not only includes nuclear issues but 
also clean air issues. We live in a day where, gosh, 55 percent 
of our oil today will come from foreign sources--55 percent. 
And it is growing. We are on a verge of a war with Iraq. We 
still actually import some oil from them directly or 
indirectly.
    Nuclear power can help us to alleviate the need for that 
foreign oil. We had a trade deficit of about $400 billion last 
year. A lot of that was oil--not all of it--but a lot of it was 
oil. Nuclear power can help us to reduce that trade deficit, 
too.
    One of the reasons why I tend to be a proponent of nuclear 
power, though, deals with not just the reductions in foreign 
oil imports, but with the reduction in CO2 
emissions. The President has proposed--and I think Senator 
Inhofe will introduce later, maybe this month or next--the 
President's Clear Skies initiative which addresses sulfur 
dioxide, nitrogen oxide, and mercury releases from our power 
plants. My hope is that at the end of the day we can add a 
fourth ``P'' to that package and that would be carbon dioxide.
    The ranking Democrat on this committee, Senator Jeffords, I 
believe unveiled yesterday his ``Four P'' proposal--he is 
walking in the room right now. That is pretty good timing, 
Senator Jeffords. He introduced his ``Four P'' legislation 
yesterday. The President's proposal does not include that. My 
hope is that we can come to a consensus maybe around a proposal 
that Senator Chafee, Senator Breaux, Senator Boxer, and I 
introduced last year which will be reintroduced in here shortly 
to address all four pollutants into our environment.
    Having said that, we are delighted that you are here. We 
thank you for coming, and, Mr. Chairman, to you for holding 
this hearing. We very much look forward to working with you on 
these issues, on the issues of clean air and particularly 
carbon dioxide as we go forth. Thank you.
    Senator Voinovich. Thank you. Senator Jeffords is the 
ranking member of the full committee.
    Senator Jeffords, we welcome you this morning. Would you 
like to make an opening statement?

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Senator Jeffords. Yes, I would.
    Chairman Meserve, and Commissioners Dicus, Diaz, 
McGaffigan, as well as Inspector General Bell, we appreciate 
your appearing before the subcommittee and on this oversight.
    First, allow me to take this opportunity to express my 
thanks and appreciation to Commissioner Meserve as he leaves 
the Nuclear Regulatory Commission to become president of the 
Carnegie Institute. Great. Going up. I congratulate you, Mr. 
Chairman, on this prestigious assignment and wish you much 
success. We are very sorry to lose you, though, at the NRC, 
particularly in these difficult times as we work to ensure the 
safety of the nuclear facilities against a variety of threats. 
I commend you for the fine service you have given to the NRC 
and to your government, and trust that you will continue to 
lend your expertise and assistance--and I know that you will--
and wish you the very best of luck.
    This hearing will provide us with the general overview of 
matters before the NRC. I will not take the subcommittee's time 
with a long statement, but I will have a few questions to ask 
at the conclusion of the testimony. It is nice to have you all 
here.
    Senator Voinovich. Thank you. I, too, would again 
underscore how much we appreciate all of you being here with us 
this morning. Mr. Meserve, I again appreciate the leadership 
that you have provided to the Nuclear Regulatory Commission and 
the wonderful open relationship that I have had with you over 
the last several years.
    Mr. Meserve, I would like you to begin.

    STATEMENT OF RICHARD A. MESERVE, CHAIRMAN, U.S. NUCLEAR 
    REGULATORY COMMISSION ACCOMPANIED BY: GRETA JOY DICUS, 
 COMMISSIONER; NILS J. DIAZ, COMMISSIONER; EDWARD McGAFFIGAN, 
   JR., COMMISSIONER AND JEFFREY S. MERRIFIELD, COMMISSIONER

    Mr. Meserve. Chairman Voinovich, Senator Jeffords, Senator 
Carper, it is a pleasure to appear before you today with my 
fellow commissioners to discuss the Nuclear Regulatory 
Commission's program. We would like to thank you and the 
committee for the past support and advice we have received over 
the years. The commission looks forward to working with you and 
the new Congress.
    As has been indicated, I have announced my decision to 
leave the NRC at the end of March, a little more than a year 
before my term ends, to assume the presidency of the Carnegie 
Institution of Washington. This decision did not come easily 
since I have thoroughly enjoyed my tenure as chairman, and the 
opportunity it has provided me to work on issues of importance 
to the Nation. My colleagues and I have served during a period 
of great tragedy and great challenges. I view my tenure as the 
NRC chairman with great personal pride and accomplishment.
    I believe that fiscal year 2002 and the first 4\1/2\ months 
of this fiscal year have been marked by significant 
achievements by our Agency. My full statement, which I have 
submitted for the record, enumerates a few of these 
achievements and challenges. The monthly reports we submit to 
you and our other authorization and appropriations 
subcommittees provide a more detailed description of our 
activities.
    Over the past 17 months, the commission has undertaken a 
comprehensive review of our safeguards and security programs in 
close consultation with the Department of Homeland Security and 
the other Federal agencies, and with significant involvement by 
State agencies.
    Out of that review has come, No. 1, a series of interim 
compensatory measures to strengthen security at our licensed 
facilities and during transportation of spent fuel. No. 2, a 
five-tier advisory system compatible with the Homeland Security 
advisory system. No. 3, orders to strengthen our access 
authorization programs at power reactors. No. 4, proposed 
orders to strengthen guard training and address guard fatigue.
    We have provided revised design basis threats for comment 
to other Federal agencies, the States, and cleared industry 
personnel. We have undertaken enhanced tabletop security 
exercises at our reactor facilities and will, by the end of 
this month, begin enhanced force-on-force exercises at these 
facilities. We have defined actions to ensure better control of 
high-risk radioactive sources of the most concern for potential 
use in a radiological dispersal device.
    In short, we have a comprehensive and aggressive program to 
enhance security. Nuclear facilities had very significant 
security before September 11th and that security has been 
greatly strengthened in the aftermath of the attacks. The past 
17 months have seen the maturing of our new reactor oversight 
process. We, and most stakeholders, believe that this new 
program is a significant improvement over our old inspection 
process. The transition to the new process has gone remarkably 
well, although it is still a work-in-progress on which we will 
make further improvements.
    The Davis-Besse plant has been our greatest recent 
challenge. Mr. Chairman, you addressed this matter in great 
detail, and we have had meetings about it. Our full statement 
summarizes the issues and activities regarding Davis-Besse. The 
NRC staff has devoted significant resources to the Davis-Besse 
plant and to the broader issues raised by this incident.
    The plant will return to operation only after the staff is 
convinced, through intensive inspections, both that the plant 
is physically ready to operate, and perhaps more importantly, 
that the safety culture at the plant, which the licensee has 
identified as the main root cause of the incident, is on the 
path to recovery. We also recognize that there were failings by 
the NRC in connection with this episode. We have undertaken an 
aggressive lessons-learned exercise and are implementing the 
resulting high-priority recommendations.
    Our statement for the record also describes some 
significant achievements in our reactor licensing program, 
including license renewals, power uprates, and license 
transfers. We are preparing for potential new reactor 
construction. We expect to review three early site permits 
starting this year and are undertaking the review of one 
advanced reactor design, the Westinghouse AP-1000, and are in 
the pre-application phase for several others.
    In our materials program, the NRC, in partnership with the 
agreement States, conducts a comprehensive program to ensure 
the safe use of radiological materials in a variety of medical 
and industrial settings. The commission has completed a complex 
rulemaking on the medical use of byproduct material, and now 
faces the challenge of implementing that rule.
    The commission has also been implementing a major rule 
change relating to large fuel cycle facilities and several 
major licensing reviews are underway or soon will be submitted 
that will test the application of that rule.
    The staff has made progress on a wide array of programs 
relating to the safe disposal of nuclear waste. A central focus 
is the preparation for the Department of Energy's application 
to construct a high-level waste repository at Yucca Mountain, 
NV. The application is expected in December 2004. Over the past 
year, the staff has issued a draft Yucca Mountain review plan 
for public comment and has conducted numerous public meetings 
with DOE in anticipation of an application. The technical 
issues involved will be substantial and the NRC decisions will 
be closely scrutinized. We are preparing for that reality.
    Our budget proposal for fiscal year 2004 will allow the NRC 
to continue to protect public health and safety, promote the 
common defense and security, and protect the environment, while 
providing sufficient resources to address increasing personnel 
costs and workloads. We are seeking an increase in our budget, 
but the increased workload justifies it.
    Mr. Chairman, the NRC has accomplished much over the past 
year and has many important initiatives underway. This reflects 
the reality that we are in a time of striking change. 
Fortunately, the NRC is up to the challenges before it.
    My colleagues and I would welcome the opportunity to 
respond to your questions. Thank you.
    Senator Voinovich. Thank you, Mr. Meserve.
    Do any of the other members of the commission want to share 
with us some of your observations? Again, I appreciate your 
being here. Mr. Merrifield? Mr. Diaz? Ms. Dicus? Mr. 
McGaffigan?
    Mr. McGaffigan. Waiting for your questions, sir.
    Mr. Meserve. We want to make sure we spend the time 
addressing the issues that you want to raise with us.
    Senator Voinovich. Well, I'll begin. I think that in the 
tradition of the committee we will have 5-minute rounds.
    I will start off with one of the most disturbing pieces of 
this whole Davis-Besse incident, which is as the investigation 
moves along, continues to unravel surprises. The latest 
development, as I mentioned in my statement, is that we were 
all were told if the container had broken and gone through the 
liner, that there wouldn't have been a problem.
    I have been told that if the reactor lid had given way, a 
major disaster would not have occurred. Now we find that that 
may not be true. I am very upset about that because we relied 
on the credibility of the information that was provided to us.
    I would like to have some answers about that. The question 
I have is: Are we going to have more surprises as we move 
along? Mr. Meserve?
    Mr. Meserve. We had spent an enormous amount of effort to 
monitor the causes of the event at the Davis-Besse plant and 
obviously are spending a great deal of effort to make sure that 
the necessary corrective actions are in place. I visited you in 
your office and I informed you that there were safety systems 
in place that would have served to prevent a severe accident in 
the event that there had been a rupture of the cladding on the 
top of the reactor pressure vessel head.
    Of course, we are dealing with a situation that didn't 
happen, so we have to speculate and we have to rely on 
analysis. Fortunately, a rupture didn't happen. In fact, the 
preliminary work that the NRC has undertaken would suggest that 
the cladding would have held for a considerable period of time 
without rupturing. If it had, we would have had the following 
circumstances unfold. The primary coolant in the reactor is at 
high temperature and stays as a liquid because it is at very 
high pressure.
    If you were to have a rupture of the top of the head, there 
would have been a depressurization of the reactor and that 
liquid that is at high temperature--well above the boiling 
point of water--would have flashed to steam. So you would have 
had an ejection of the cooling water from the reactor.
    All reactors are designed to be able to address an event of 
that kind, which is called a loss of coolant accident. And so 
there are safety systems that inject water into the core in 
order to preserve cooling. Those systems would have operated 
and, in fact, they are designed to be able to handle a break 
that is 20 times larger than the one that would have occurred 
in the event that there had been a rupture of the cavity at the 
top of the Davis-Besse head.
    The concern that has recently arisen is that there is a 
large volume of water that is held in reserve that flows into 
the reactor to cool the reactor, and that would fill the 
reactor and would be flowing out. It would be collected for 
recirculation--there is not an infinite supply of water that is 
available.
    Mr. Merrifield. It is 400,000 gallons.
    Mr. Meserve. Mr. Merrifield has indicated that it would be 
400,000 gallons of water that would be available in tanks. And 
then the way the system works is that the water collects in a 
sump at the base of the reactor building and then that is 
recirculated back through the reactor. There are certain sprays 
that occur in the containment to control temperature and 
pressure and absent chemical processes.
    The issue that has recently been raised--and this was 
identified by the licensee--is a question as to whether there 
would have been clogging of the sump as a result of debris that 
might have accumulated in the sump and have covered the screens 
and prevented the water from being able to flow to the 
recirculation pumps.
    There is another issue that has arisen recently. There was 
a gap in the screening that might have allowed a large piece of 
debris to get through and have damaged the impeller on the 
pump, or conceivably could have constricted or been captured 
in----
    Senator Voinovich. The engineer said it would not have 
worked as it is designed to work. It seems to me that if you 
had some backup system in place, that somebody would anticipate 
that debris would fall around, that screens could be cluttered, 
and so on and so forth. Then the question really is: Is that 
design adequate, or more than adequate, to get the job done?
    Mr. Meserve. The analysis that we have undertaken is 
preliminary. We are dealing with what-ifs here, that the screen 
would have been--that that sump system would have been adequate 
to handle the Davis-Besse style event. One could imagine 
circumstances where the debris--because there was material that 
was in the containment that shouldn't have been there--coatings 
that were improper--that materials might have been released and 
collected in the sump.
    So we have an issue that was brought to us by the licensee 
that we are analyzing and that is being addressed. The licensee 
is on top of this issue, but it is unfortunate that it existed. 
We don't think it would have created a problem if there had 
been a rupture, but it is a problem that needs to be corrected. 
It is being corrected. The screens have an area of about 50 
square feet--that is the original design--that is, within the 
tech specs for the original design. The licensee has changed 
that to a screen system with 1,200 square feet of screen 
surface area. So it gives you an enormously larger area within 
which the water could flow so that you don't have the same 
issues associated with debris possibly clogging the screen.
    This unfortunate event obviously reflects the continuing 
issues that we have had with the licensee in assuring that 
there is an appropriate safety culture, to make sure that the 
licensee is addressing problems such as this one. We are moving 
in that direction.
    Senator Voinovich. If you anticipated what might have 
happened and the design as it was might not have worked, are 
they going to be able to follow procedures so that it won't 
again? Will debris be a problem, and more important than that, 
are the containment facilities at other plants of the same 
design being inspected?
    Mr. Meserve. One of the steps that is being taken by Davis-
Besse has been to change this whole sump collection system to 
one with a much larger screen area. This is part of the 
collective measures that are being put in place before the 
reactor will restart. We have been following the issue and 
interacting with licensee on the general issue of making sure 
that the sump systems is operable.
    Senator Voinovich. My time is up.
    Mr. Diaz, do you want to comment?
    Mr. Diaz. I would just like to make an observation which 
maybe doesn't reflect on my 6 years as commissioner. I worked 
40 years as a nuclear engineer. Sometimes the way we talk and 
the way that things are interpreted, are not exactly the way 
that we see them.
    Let me assure you that I do not see that at any one time 
there was an impending disaster in Davis-Besse. I am firmly 
convinced that the cladding could have withstood twice the 
pressure in the reactor for quite a period of time. I am also 
convinced that although it might not have worked well, the 
circulation system in the containment--it would have cooled the 
reactor quite adequately.
    We are very demanding. We are almost perfectionists. And 
maybe that is rightly so. Maybe that is the way we have to be. 
But I think there was plenty of margin to assure the safety of 
the people of Ohio. There is really significant evidence that 
points out that this was not an impending disaster, that there 
was not something that was about ready to burst and create a 
cloud of radioactivity. All of the systems, including the 
containment, were able to perform their functions. I think the 
committee should know that. They were there. They might not 
have been perfect, but they were there and they would have been 
able to reduce this in whatever way it happens to a real small 
accident. I would not have suspected in any way a release of 
radioactivity to the environment. Thank you, sir.
    Senator Voinovich. Thank you.
    Senator Carper.
    Senator Carper. Thank you, Mr. Chairman.
    I have a localized question. I am reminded here of the 
questions from Senator Voinovich and myself--and if Senator 
Clinton joins us--and of the old adage from Tip O'Neill that 
``politics is local.'' The chairman is interested in Davis-
Besse. I am interested in Salem, New Jersey, right across the 
Delaware River from us. Senator Clinton is interested in Indian 
Point.
    I am also interested in the larger issues including the 
next generation nuclear power, and threats from the security 
side. I would hopefully have a chance to address those as well. 
I look forward to hearing from some of the other commissioners 
here. Sitting in your shoes you must want to just burst out and 
say something to us. I hope you will feel comfortable in doing 
that when the spirit moves you.
    Let me just focus initially, though, on Salem, NJ. Right 
across the Delaware River is a nuclear power plant. In fact, 
there are a couple of reactors Salem One and Salem Two. Earlier 
this week--I think it was on Tuesday--we learned that a small 
amount of tritium was discovered in the groundwater next to one 
of the spent fuel buildings there. I believe it was the Salem 
One nuclear reactor.
    As I mentioned earlier, I believe in nuclear power. I 
believe it is an important part of meeting our power needs in 
this country. Having said that, we obviously have an oversight 
requirement to make sure that our citizens are protected. As 
one who is a proponent of safe nuclear power, I believe if we 
are going to have more of it, we have to be absolutely sure, 
absolutely convincing, to the people in my State and your 
States around the country, that we are going to do every single 
thing that we can to ensure their safety.
    I think it was Mr. Diaz who said, ``We are very demanding. 
We are perfectionists.'' Good for you. That is exactly what we 
want you to be and the kind of standards we want you to set. 
But my question of the commissioners this morning is: How does 
the NRC respond in a case such as the one in Salem, New Jersey, 
where you have the owner of the reactor notifying--I think the 
commission back in December--that there had been a discovery of 
some tritium in the groundwater next to the spent fuel 
building, and the information is made public in February?
    I am not one who believes in that there is more to this 
than needs to be the case. But I just want to know: Why the 
delay? How do you normally proceed when you learn from the 
owner of the plant that there has been a discovery of this? 
What can we tell our citizens in Delaware? What can you tell 
the folks over in New Jersey? What is the responsibility of the 
plant owner in this case, PSC&G in cases like this? Again, if 
tritium was discovered and reported as having gotten into the 
groundwater in December, why does it become public in February?
    Mr. Meserve. Well, let me say that we do have substantial 
inspection resources that are present at every site. We have a 
resident inspector at every reactor. That is where his duty 
station is. It is to monitor situations at the plant. But the 
reality is that these are complex machines. Licensees have 
primary responsibility for assuring the safe operation of the 
facilities. We have stringent requirements we place on the 
licensees as to what expectations we have of them.
    I will have to respond for the record on the details of 
when we learned about the event at Salem and when the 
information became public. It is my understanding with regard 
to the situation that there has been the detection of tritium 
in the groundwater in the immediate vicinity of the spent fuel 
pool. That is, within 20 feet or so of the spent fuel pool. It 
is at levels that are about three times the State groundwater 
standards for tritium in groundwater. Nothing has been found in 
the monitoring wells on the periphery of the plant. There seems 
to be a very localized area of not very high concentrations of 
tritium.
    There are aggressive efforts that are being undertaken by 
the licensee, with our supervision, to try to find the source 
of the leak and to repair it. Let me say that the State is also 
actively involved in pursuing this issue because of its 
interest in assuring that groundwater resources are protected.
    Senator Carper. Would one of you talk to us about tritium? 
Is it something that we ought to be more concerned about? Less 
concerned about? Talk to us a bit about tritium for those of us 
who majored in economics.
    Mr. Diaz. Very little concern, sir.
    Ms. Dicus. Yes, very little concern.
    Mr. Diaz. It is about the least harmful of all the 
radiological substances that you can deal with. So it is a very 
minor radioisotope as far as hazards to the biological systems. 
It is just really--you know, it is radioactive but its 
radioactivity is, in many ways, not harmless, but is really 
quite tolerable and has a very large easy pathway through the 
human body. It is excreted easily. It is not accumulated. There 
are many, many things with tritium that although it is not 
nice, makes it a ``nice'' radioisotope.
    Ms. Dicus. Mr. Chairman, if I could, I want to echo what 
Commissioner Diaz has said. It's a beta emitter which only has 
any effect, if any, at the cellular level. But as he said, it 
is easily eliminated. It is not one of the radioisotopes we 
have great concern about. It is also a radioisotope that is 
somewhat difficult to--it has the ability to go where it wants 
to go when it wants to go there. It can be difficult to 
contain. That is maybe one of the reasons we have seen it in 
groundwater immediately near the spent fuel pools.
    So, as a health physicist, I can reiterate what my fellow 
commissioner has said. I am very comfortable with the 
situation. Would we rather it not be there? Of course. But it's 
not the issue that we would be highly concerned about.
    Mr. McGaffigan. I would just add that tritium is heavy 
hydrogen. It is the isotope of hydrogen that has two extra 
neutrons in the nucleus. The EPA standard--and I believe the 
State of New Jersey standard--is 20,000 picocuries per liter of 
drinking water or groundwater. They treat them equivalently. 
That equates to about 1/50th the dose that you get in a year. 
If you got the limit, you would get about 1/50th of the dose 
you would get working in the Capitol as a result of the 
granite-emitting gamma rays at you because the radium is 
decaying.
    My son was a Senate page for Senator Warner a couple of 
years ago. We did a physics project for the Page program. We 
walked around the Capitol with a Micro-R meter. As I said, the 
drinking water standard for tritium is about 1/50th of what you 
get walking around the Capitol serving here.
    Mr. Meserve. You have a much more dangerous job.
    Mr. McGaffigan. You have a much more dangerous job.
    [Laughter.]
    Mr. Merrifield. Senator, you said you wanted to hear from 
us so you get to hear all. I agree with what my fellow 
commissioners have said. I look at it a little differently. I 
worked, as you know, on the Environment Committee for some 
years. I was one of the Superfund and RCRA counsels. So it is 
very clear to me that the concerns that the public, the States, 
the counties, and the others have about the protection of 
groundwater. It is a vital resource that people really care 
about.
    I want to tell you--you have heard some explanation today 
as to public hazards of that spill and that we don't believe 
that this presents a significant public hazard at all, given 
the proximity of the site and the fact that it is not spreading 
significantly we can say with some assurance. But we also have 
a concern about the environment.
    We in our mandate have a requirement that a licensee have 
sufficient funding available for decommissioning activities. 
And so at the end of the day someday when this plant is shut 
down, we will undertake those decommissioning activities. Part 
of that is to make sure that the environment is protected as 
well. So the licensees are on top of it. They are working hand-
in-hand with us. We are concerned about public health. We are 
also very concerned about the environment.
    Senator Carper. Thank you.
    Ms. Dicus.
    Ms. Dicus. Thank you. I just want to add to the 
explanations that you are hearing. We are not making light of 
the issue. We don't like the fact that it is there. We are just 
trying to reassure what the hazard is and we assure you what we 
are concerned about, that we are not making light of the issue.
    Senator Carper. Mr. Chairman, again, some people in our 
country are given to conspiracies and they worry about 
conspiracies. I am not one of those people. I think the best 
way to confront those who are skeptical of nuclear power is 
with the facts much as you presented them. Not to hold things 
back. Not to hold things back for a month or two, either, but 
to be fully forthcoming and to share with us and with the 
people of New Jersey and Delaware what we know. I think in the 
end the truth can be the best antidote here as well.
    Mr. Meserve. All of us are committed to having a completely 
open Agency. I think we are viewed, quite frankly, as one of 
the most open agencies in Government. We completely share your 
view that we will never have the confidence of the public in 
what we do unless our decisions and the bases for them are 
accessible to the American people.
    Senator Carper. Thank you.
    Senator Voinovich. Senator Jeffords.
    Senator Jeffords. The attacks of September 11, 2001 have 
increased the need of agencies such as the NRC to keep secure 
any information that might be used by terrorists. Yet it is 
important that we not sacrifice too easily the public's 
interest in accessing information concerning the safe operation 
and security of facilities in their community. We all know, for 
example, that it is often citizen complaints that result in 
improvements that may have been overlooked by those closely 
involved in the process.
    As the NRC revises its policies and regulations in light of 
the events of September 11, how do you intend to balance the 
need for security against the public's interest in knowing what 
the Government is doing in regard to nuclear power plants?
    Mr. Meserve. Well, this is a very difficult issue, as I 
just said to Senator Carper. We have long been leaning forward 
in making information available to the American people about 
our activities. One of things that we have had to recognize 
after September 11th is that some of the information that we 
had been routinely providing before that time might be of 
substantial assistance to terrorists intent on a malevolent act 
at one of our facilities.
    So we have had a task force that has tried to develop 
guidance which we are prepared to share with you that guides 
those decisions. We have a very substantial widely used website 
that we took down temporarily and screened the material. We 
have now put that website back up after removing some of the 
material that had been there previously.
    It is hard to tell you in an overview exactly how the 
process works but it is one where you try to look at the nature 
of the information, try to balance the public's right to know 
and the interest it might have for terrorists. We try to make 
sensible decisions.
    Many of our activities in the security area in particular 
are ones that we have had to hold confidential as a result of 
the fact that we do not want to aid those who might be planning 
to attack a nuclear facility. So those are areas that we have 
withheld as Safeguards Information.
    Senator Jeffords. Thank you.
    Mr. McGaffigan. Mr. Chairman, I just might add that this is 
an issue we had a lot of discussion with your staff on last 
year. There is a provision in the Atomic Energy Act, Section 
147, that this committee passed in 1980 that provides us 
something that no other agency of government has, namely, a 
sensitive unclassified information category against which there 
are civil penalties if the information is disclosed. I think 
the committee did a very good job in 1980 in laying out a 
definition of safeguards information. Indeed, it could be a 
model for people thinking about the chemical industry or other 
industries, how you might handle it. I won't read the 
provision.
    But we have to keep a lot of this information from the 
public just as you do in defending the Capitol or defending the 
White House or defending other critical elements. We can't talk 
about the details of the security in public. We have a very 
robust effort talking with other agencies of government, 
talking with cleared individuals in State government, talking 
to your staffs who are cleared. We are happy to have as much 
input from cleared folks as we can get. But I know the details 
of defending the Capitol are secret, and some top secret--and 
appropriately so. Some of our information is secret. And we are 
bringing licensees into--for the first time, really, we are 
getting a large number of people within the nuclear power 
industry with secret level security clearances.
    That's an initiative that I think, again, we are ahead of 
other agencies in doing. We are having some trouble, in all 
honesty, with the foreign ownership, control, and influence 
decisions that have to be made for each of these licensees that 
sometimes have complex corporate situations. But we are getting 
it done. We are having a dialog with as broad a group of people 
as possible to get a broader prospective. We are getting a lot 
of input from the guards on the front lines. Some of it is 
through the media.
    We would prefer to get it directly in a classified setting, 
but we have a lot of debate about what the right training 
requirements are, what the right design basis threat is, what 
is the right place to draw the line between safeguards 
information and unclassified information. We are happy to work 
with the committee and with whoever we can. But there is some 
degree of information--just as you here in the Capitol don't 
want to have your security divulged, we have potentially very 
dire consequences if some of our facilities were successfully 
attacked. We have to protect that information.
    Senator Voinovich. I would comment that as we moved into 
this new life that we are living after September 11, we are 
being more restrictive about the information that we provided 
the public. It underscores how important it is that the public 
have faith in the integrity and the credibility of the 
organization that has that information. That is very important. 
I think that your responsibility and of other agencies, that in 
the past had given out such information, now are more 
restrictive.
    We welcome Senator Clinton this morning.
    Senator Jeffords. Ms. Dicus.
    Ms. Dicus. Just a quick comment with regards to the 
safeguards information. We have identified a policy issue that 
we need perhaps to take another look at the criteria that we 
use to decide if something should be safeguards information or 
official use only information. I think the commission is going 
to take a look at that and be sure that our criteria are clear 
and we know when to call something safeguards or no.
    Senator Voinovich. Senator Clinton.

OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON, U.S. SENATOR 
                   FROM THE STATE OF NEW YORK

    Senator Clinton. Thank you very much, Mr. Chairman. I echo 
your concerns that part of our challenge is obviously to keep 
confidential information that would in the wrong hands be 
troublesome and even dangerous, but to establish enough 
confidence and trust so that people know that they are getting 
information that they need in order to act.
    As this panel and the committee knows, I have a lot of 
concerns regarding the safety and security of our nuclear 
plants, but in particular the plants at Indian Point because of 
their proximity to a very highly densely populated area and 
because of the topography of the area in which they are 
located, which makes evacuation and emergency preparedness an 
extraordinary challenge.
    Yesterday, Chairman Meserve spent an hour with me and other 
members of the New York congressional delegation as well as a 
few local elected officials from West Chester County where the 
plants are located. I am very grateful, and I thank the 
chairman for his time.
    As a result of the concerns that we are facing with respect 
to Indian Point, the Governor of our State asked the former 
head of the Federal Emergency Management Agency, James Lee 
Witt, to review the emergency preparedness. I was very grateful 
that the Governor reached out to have such an independent 
study, somebody from the outside with a history of knowing what 
emergencies are.
    As a result of that draft report, even more questions were 
raised because the bottom line was that it seemed unlikely that 
the kind of evacuation envisioned from either an accidental or 
a terrorist attack that resulted in some kind of release would 
be practical and able to be implemented.
    Furthermore, Chairman Witt expressed his findings that it 
may even be that the standards by which we are judging such 
matters are not adequate to the times in which we currently 
live. I did write to Chairman Meserve and ask for the NRC's 
response to these very legitimate questions raised by Mr. 
Witt's report. I was frankly concerned and I have talked to the 
chairman about this, that the chairman characterized the Witt 
report as placing ``undue weight on the impact of potential 
acts of terrorism on emergency planning and preparedness.''
    I have just come from a classified briefing with Secretary 
Rich. We know the level of threat with which we are living. We 
know that cities like New York and Washington continue to 
remain at the top of the terrorists' potential targets. I don't 
think we can place undue weight on the impact of potential acts 
of terrorism.
    I also believe that the difference between an accidental 
release and a release caused by terrorism is not the same. Yes, 
indeed, perhaps the same amount of radioactive material would 
be released into the atmosphere. But the conditions under which 
that release takes place, the circumstances governing how 
responses are carried out, who is left at the plant to carry 
out such responses, the level of panic that is communicated and 
spread through the neighboring area, is not at all equivalent.
    I have already told the chairman that from my perspective 
we have to not only do everything we can possibly imagine, 
putting ourselves unfortunately and as disgusting a practice as 
this might be, into the minds of those who wish to destroy us. 
And nothing, therefore, is unimaginable.
    I know that the NRC under the very dedicated leadership of 
these commissioners has always tried to do what it thought 
needed to be done. I just believe we are not thinking hard 
enough, strategically enough, and taking sufficient actions 
either in fact, or communicating those to the public 
sufficiently to reassure them that we are doing what we believe 
needs to be done.
    Now, in the Inspector General's testimony that has been 
submitted, there are findings from a 2000 event inquiry at 
Indian Point Two, including the finding that Indian Point Two 
was a plant that struggled with various challenges in the area 
of emergency preparedness. The OIG learned that recurring 
weaknesses that had gone uncorrected appeared to play a role in 
the poor emergency response performance, and that communication 
between offsite emergency preparedness officials and the NRC 
was nonexistent.
    Similar findings have been replicated both by the GAO and 
by the Witt report. So clearly, Mr. Chairman, we have a problem 
when it comes to communications between offsite emergency 
preparedness officials, but even more importantly, the people 
who are expected to carry out the plans.
    Just very bluntly, given the topography, the narrow winding 
roads, the fact that this plant is smack up against the Hudson 
River on one side and then winds through lots of beautiful 
small towns on the other, suggests that we have problems 
already in planning, and certainly suggests that a lot of 
people in the event--particularly of a terrorist attack--are 
going to be torn, as we all would, between trying to do what 
Secretary Ridge and the Department of Homeland Security has 
told us which is, set a place where you can meet your family, 
you know, figure out how you are going to be taking care of 
that primary responsibility, and fulfilling your official 
duties. I mean, this is human nature. This is going to be an 
enormous undertaking.
    So as a result, the local county executives--Democrat and 
Republican alike--have refused to certify the emergency plans 
for their counties' participation. And the State emergency 
management organization has refused to certify the emergency 
plan. We are now in a kind of limbo between whether FEMA will 
go forward and certify over the objections of local officials 
and State officials, and what role the NRC will play in this.
    So, Chairman Meserve, let me just ask that you give us an 
update with respect to what the NRC and the plant operator have 
done to ensure that the onsite emergency preparedness 
weaknesses that have been identified at the plants have been 
corrected, and whether there is going to be a continuing 
problem, as the IG found, that the NRC decided to allow Indian 
Point Two time to correct its deficiencies, and that that 
decision outweighed the benefit of increasing NRC oversight, 
which strikes some of us as a trend we are seeing at the NRC.
    Could you comment on both my concerns and those specific 
questions?
    Mr. Meserve. I would be very pleased to respond, Senator. 
Let me make a couple of comments in responding to your 
questions.
    First, let me assure you that we take the Witt report very 
seriously. This was a very substantial effort by a 
knowledgeable individual and we are not diminishing the 
significance or the importance of that report. We will--and 
are--reviewing that report and its recommendations very 
carefully.
    Second, I think it's important that I clarify what perhaps 
was ambiguous in my letter. We were not intending to suggest--
and do not suggest--that we view terrorism as a subject that is 
not a subject of great concern to us, to the licensee, to you, 
and to the American people. In fact, we have spent an enormous 
amount of time over the period since September 11 in assuring 
ourselves that there are adequate security measures in place at 
all of our nuclear power plants and other significant licensees 
that might be the targets for a terrorist attack.
    I will come back in a moment to the specifics with regard 
to Indian Point.
    The point that I was trying to make in the letter was 
merely to say that as a normal part of our emergency planning 
we do consider events that involve large releases of 
radioactivity in very short periods of time. And the point we 
were making is that one could imagine scenarios terrorists 
could cause that might causes releases of large amounts of 
radioactivity in a short period of time. But these events are 
not unique.
    We believe, based on our vulnerability studies, that we 
have enveloped those events within the types of accidents that 
we routinely consider. So the point in my letter was merely to 
say that terrorism is not unique in its capacity to cause those 
sorts of events and such events have been a traditional part of 
our emergency planning.
    With regard to Indian Point, I would say that there have 
been very significant measures that have been taken by the 
licensee as the result both of advisories that we have issued 
and orders that we have issued to all of our reactor licensees. 
We have significantly enhanced the manpower that exists as 
guards at the facilities. The standoff distances for access to 
the plants has been increased.
    The coordination with local law enforcement has been 
increased and, in fact, as I am sure you know at Indian Point, 
there is a substantial complement of National Guard troops that 
is available on the perimeter of that facility and remain 
there, and have remained there since September 11.
    So we have worked also in making sure that the licensees 
are prepared to deal with various contingencies. In fact, there 
are 30 or 40 different areas in which we have placed 
requirements on all of our licensees. Of course, those apply at 
Indian Point, and the licensee is meeting our orders. We have 
had very significant inspection resources devoted to Indian 
Point both in tabletop exercises and also having our security 
experts, with assistance from expert contractors, visit that 
facility. We have satisfied ourselves that the security there 
is adequate.
    That is not to say that everything is perfect. We have been 
finding problems and they are being addressed. One of the 
problems at Indian Point has had to do with the substantial 
demands on the guard forces--the guards were working very long 
hours. And so we had issues of fatigue of guards. It has been a 
source of discontent that has appeared in the press as well.
    We have been trying to address that issue in the short term 
by way of an order that would impose limits on the hours of 
guards and, over the longer term, by including guards within a 
fitness for duty rulemaking that we would encompass those 
matters.
    There are issues as to training for which we are also 
contemplating taking action in the near-term. That has been an 
issue at Indian Point. We have spent a lot of time in talking 
to the guards who have been raising concerns, to make sure that 
we understand them. Where there are allegations of problems, we 
run them to ground.
    So we are making very major efforts at Indian Point, I can 
assure you, to satisfy ourselves, that the security there is 
adequate.
    Mr. McGaffigan. Senator Clinton, might I add a few items? 
The chairman makes the point that security is something that we 
consider in emergency planning. Even before September 11th, 
earlier in 2001, the chairman and I were involved in an 
exercise at the Palo Verde nuclear station--an emergency 
exercise that had a very large FBI contingent involved. More 
recently, we have done a security-induced event at the Diablo 
Canyon facility in California. We had done that previously in 
Virginia at the BWXT Lynchburg Category I fuel cycle facility 
where there is highly enriched uranium.
    One of the things I think we can do at some point--and I 
haven't even talked about this with my fellow commissioners--
but just to help bring alive the point that the chairman made, 
perhaps the next exercise we do at Indian Point, either two or 
three, we can have a security-induced--the hypothetical event 
that causes the system to be exercised could well be a security 
event, just as we have done at Diablo Canyon and as we have 
done at Palo Verde.
    I think then the issues that you raise, we may be able to 
get greater public confidence. I try very hard. Matt Wald 
called me the day that the spent fuel pool study came out. We 
tried to communicate. I tried to assure him that the physical 
security that the spent fuel pools at Indian Point--it is 
almost impossible, barring the mother of all earthquakes in 
which case we would have other problems--for that pool to 
drain. It is in bedrock. It is below grade.
    The report that Matt was asking me to comment on made the 
point that if you can keep the pool at 40 percent full with 
water, you will not get any zirc-clad ignition and you will not 
get any offsite releases. It is physically impossible to get 
those pools with any sort of terrorist event to drain below 50 
percent deep. One of them is entirely below grade. The other 
has a very small area above the fuel where you could poke a 
hole in the pool if you could get through many feet of 
concrete. That particular point is inaccessible to aircraft.
    So there is no--we try to bat down these things, especially 
in your State, when these issues arise. Those spent fuel 
pools--there may be issues at other places, and we don't think 
so. But in your pools it is physically impossible. So we try. 
We try to bat these things.
    In emergency planning, one of the points we made is that 
the 10-mile emergency zones that were chosen in the late 1970s 
are the basis for emergency planning. Those were chosen based 
on the science we had at the time and the multi-agency process 
involving FEMA, the Environmental Protection Agency, and the 
NRC. That was based on the science we knew then.
    Since then, unfortunately we have had the Three Mile Island 
event and the Chernobyl event, and we have discovered that we 
were very, very conservative in choosing that 10-mile zone. 
It's very hard to imagine events that fully exercise the 10-
mile zone, 314 square miles of people.
    The events that we actually hypothesized in our exercises--
we typically are thinking about a quadrant in a 5-mile zone 
where we can imagine somebody getting more than one rem, and we 
in a disciplined way, talking to officials, it's the State's 
call--I guess in New York's case, the local communities' call 
to make these decisions as to: Do we evacuate this quadrant of 
the 5-mile emergency planning zone where the wind is moving?
    We need to communicate to the public that we understand 
that these are very conservative zones that were chosen in the 
late 1970s and if we were doing it today, based on today's 
science, many in the industry would argue that the zones should 
be brought in. We have not gone there. We have kept the 
conservative larger zones.
    Senator Clinton. Mr. Chairman, if I could just----
    Senator Voinovich. I think we are running out of time on 
this question. I would like to wrap it up so we can get on with 
some other questions.
    Senator Clinton. One quick follow up to Commissioner 
McGaffigan.
    What you just said, I would appreciate having the 
commission commit to doing a force-on-force test at Indian 
Point and sooner instead of later. It is something that I----
    Mr. McGaffigan. I was talking about an emergency planning 
test. The force-on-force is separate.
    Senator Clinton. Well, it fits. There is a whole set of 
concerns that we are addressing here. I think that we should do 
it. It would be far better if there could be a clear conveyance 
of the information that you tell us with such intensity and 
sincerity, but which does not communicate. And even at the end 
of it, when you get something like a report from James Lee 
Witt, whom I have the highest regard for, which says that 
everybody is honest. People are telling you what they believe. 
But the standards are not adequate. So it doesn't really 
matter.
    So that is where the disconnect occurs. We just have a lot 
of unanswered questions that are very troubling to people.
    Mr. Merrifield. Senator Clinton, in fact we have been 
working with Entergy. The chairman may correct me, but I think 
we have plans underway to have a force-on-force exercise with 
Entergy at that site. I believe it is in the June-July 
timeframe. So I think we agree that that is clearly a plant 
that has a priority.
    I know the chairman wants to move on, but I do want to make 
a couple of really quick observations. I agree with the 
comments the other commissioners have made about emergency 
exercises and terrorism. I was the commissioner that led our 
joint exercise with the FBI at our BWXT facility. I also led 
the exercise relative to Diablo Canyon, the first time we had a 
security-initiated event since September 11, 2001.
    I will tell you that we take those exercises as 
commissioners very seriously. Each one of us leads one of those 
exercises each year that includes hundreds of participants. 
Many folks on our staff, probably 50 folks in our headquarters, 
our regional staff, people onsite, FEMA, Federal agencies, 
State and local governments, and utilities. It is an enormous 
effort and one that I would certainly welcome and suggest that 
you come view when we do one of those again to see what we do.
    We are going to take James Lee Witt's recommendations very 
seriously. We are going to look at them. I agree with the 
chairman that we are not to belittle those. Where we work with 
FEMA, where we can identify improvements, and where there are 
those that need to be made, we certainly will.
    The last thing I would say is this: You quoted the IG's 
report from the 1990s. There is one significant thing that has 
changed in that time period. At the time when they were looking 
at those issues the plant was owned by ConEd. That was a 
utility that had one site, Indian Point Two, and it arguably 
did not have the commitment to keeping that facility where it 
should be--from a material condition and from having the staff 
treat that plant the way it should.
    I remember when I first came to the commission in 1998, I 
had a lot of discussions with our regional administrator 
because we had those concerns about that plant. Entergy has 
come in. The tone has changed. They have put a significant 
investment into the site. They have certainly changed the way 
that they do business around there. They have an expertise with 
many, many plants.
    So that is a component that we certainly look at. The 
attitude that they have in terms of making sure that that plant 
is operated appropriately is certainly--I would argue a lot 
healthier than what we were dealing with when the IG was 
looking at that report and ConEd back in the 1998-1999 
timeframe.
    Senator Clinton. Thank you.
    Senator Voinovich. Thank you. We did spend a lot of time on 
that issue but it's instructive about what you are trying to do 
at Indian Point. I think it's applicable to other sites around 
the country. It should give some assurance that you are really 
paying attention to the issue of security. I think that's 
important to people's comfort level.
    I think you have copies of pictures at your table of the 
corrosion at the reactor heads at Davis-Besse. I have seen them 
several times. You have them. It is my understanding that these 
pictures were taken as part of an inspection of the facility in 
April 2000.
    I further understand that the photographs were included in 
a report that First Energy filed with the NRC in 2000 and that 
the NRC did not review that file and that the NRC regularly 
fails to review these types of reports. I also understand that 
the corrosion present in these pictures was present and visible 
during multiple inspections as far back as 1996 and that it was 
noted in multiple reports as far back as 1996.
    If this is true, I think that this committee may have to 
take a serious look at an overhaul of the NRC's day-to-day 
oversight at these nuclear facilities. Is it true that these 
pictures were contained in a report submitted to the NRC that 
was not even looked at until the reactor was shut down?
    Mr. Meserve. Senator, my understanding is that the licensee 
had a condition report that it prepared in 2000 that included 
this picture. This was not a picture that was, to our 
knowledge, shared with the NRC. However, there is an allegation 
that has been made that the picture was shown to an NRC 
inspector who did not follow up on the picture. This is a 
matter that is under investigation by the Inspector General.
    Mr. McGaffigan. But that allegation was made only last 
week, sir. So the allegation that an inspector saw this picture 
was made at a hearing we had before the commission last week.
    Senator Voinovich. So it's recent? And you're looking into 
it?
    Mr. Meserve. We are looking into it.
    Mr. McGaffigan. We are looking into it.
    Mr. Meserve. The Inspector General is looking into it. This 
kind of thing we would refer to the Inspector General.
    Senator Voinovich. The fundamental question is: Why didn't 
you as a routine matter see this?
    Does the NRC need to have a fundamental overhaul of the way 
they do their inspections?
    Mr. Meserve. Let me respond to it this way. We have sought 
to undertake a major overhaul of our inspection program, to 
focus our inspection resources on the most risk-significant 
issues. And if there was a failing by the NRC in connection 
with this episode, it was the failure to appreciate that the 
kind of circumstances found at Davis-Besse could arise.
    We had a conjunction of two phenomena that we had not 
linked together--which is stress corrosion cracking and the 
head corrosion. We had not seen that at another plant. One of 
things that we have done as a result of this incident is to 
have a very major lessons-learned effort to determine what was 
wrong with our system that we did not catch this.
    That has resulted on the order of 50 recommendations that 
have been briefed to the commission. We have directed that 
nearly all of those recommendations be pursued. There is an 
action plan that we will be receiving an action plan and a 
schedule for the implementation of the high priority 
recommendations within the next few weeks.
    We see this as a failure of our inspection system, as well. 
And we are changing it to try to deal with it.
    Senator Voinovich. Would any of the other commissioners 
want to comment on this?
    Mr. McGaffigan. I would just echo what the chairman said. 
Obviously this head is not a clean head and the licensee had 
other documents that suggested that their head was clean. Our 
inspector--if this was presented to him--it would be a major 
shortcoming not to have seen it.
    Senator Voinovich. So what you are saying is that if it was 
found that it wasn't reviewed. Then is it a major shortcoming 
in the way these reports are reviewed by the Nuclear Regulatory 
Commission?
    Mr. McGaffigan. Yes, sir.
    Senator Voinovich. Also, in the NRC budget, there is a 
reduction in the amount of money for inspection. At least, that 
is what it appears to be. How can you get the job done if you 
don't have the budget, to have the people, to get the job done?
    Mr. McGaffigan. We all have the same answer but we will let 
the chairman make it.
    Mr. Meserve. We do have a very slight reduction in the 
budget from fiscal year 2003 to 2004. It is about $400,000 out 
of about $73 million for inspection activities.
    That is not a decision that the inspection resources on the 
ground at the plants should be reduced. In fact, what it 
reflects is that we are into the fourth year of our 
implementation of this inspection program, and we believe that 
a lot of the overhead activities--the guidance, the training of 
the people--can now appropriately ramp down because of 
experience.
    This budget was developed, however, before the lessons-
learned report came in. We certainly have the flexibility 
within our budget to make adjustments to the allocation of 
resources and if there is more that needs to be spent on 
inspection capacities to be able to do the job, we have the 
flexibility to do that and will do it. The budget you are 
seeing does reflect something that was developed by us before 
the full impact of the Davis-Besse episode was appreciated by 
us.
    Mr. Merrifield. Let me just underscore a couple of things 
the chairman said. You showed us this photo. It is clear that 
if our inspector had this photo and didn't act on it, then we 
have to retrain our staff and make sure they have a higher 
sensitivity about that. And if anybody looks at this photo--as 
we would--it raises concerns. So we have to fix that.
    Your question, though is: Does that bring a question about 
the fundamental nature of the way in which we do inspections? 
And I would ask the chairman not to overreact on that. As our 
chairman has said, we had a task force that spent 7,000 hours 
meeting with the local county you talked about--Ottawa County--
our own folks, folks outside the agencies, saying, ``Is there a 
way in which we can fix and modify our process so that things 
like this don't happen again?'' That resulted in the adoption 
of the recommendations the chairman has spoken about.
    But I want to underscore the issue of the inspections. We 
are not taking any reduction in inspections next year. The 
savings that the chairman has talked about was a reduction--
because we have this new oversight program that we have been 
working on for years--there are some generic issues related to 
that that we don't have to do anymore. So that's part of the 
savings.
    The other part of the savings that results in a reduction 
is the fact that we are doing a better job of planning our 
inspections before the inspections actually take place. This 
committee and Congress have asked us to work efficiently and 
effectively. We provided hand-held tools--electronic tools--to 
our inspectors so that when they go out on their inspections 
they don't have to spend 3, 4, or 5 hours in order to prepare 
for their inspection. They can spend one-half hour doing it.
    So we are getting the results of some of those efficiency 
savings so that more that our inspectors' time is being spent 
on inspections and less time during paperwork. That's the 
result of what you see in that drop. We are not reducing 
inspections this year.
    Senator Voinovich. Mr. Diaz.
    Then Ms. Dicus.
    Mr. Diaz. Mr. Chairman, just one simple comment. The bottom 
line to me is that this issue was preventable. We need to do a 
better job of making sure that the licensee and us have all the 
processes that are needed so it is prevented. And it was 
preventable. We don't like it any more than you do that we 
might have had to rely for a potential rupture on a safety 
system. That is not acceptable and we are taking the steps 
necessary so this issue will not be repeated.
    Senator Voinovich. Ms. Dicus.
    Ms. Dicus. Thank you. Clearly we, on this issue, have done, 
as part of the issue, a ``mea culpa'' on it. Clearly we missed 
something that it is only part of the issue and perhaps we 
should have found.
    When we had our commission hearing on Davis-Besse that 
Commissioner McGaffigan referenced, one of the questions I 
asked of our staff--we had three panels, our staff, the 
licensee, and then stakeholder involvement, including Ottawa 
County, as a matter of fact.
    One of the questions I asked my staff was: How do I know I 
don't have another smoking gun out there? I don't want this 
commission to be back here next year with another licensee, 
another plant, that we had something happen. In this case we 
had a problem, a technical problem at the plant. We did not 
have an incident which I think the chairman has made clear, as 
well as, I think, Commissioner Diaz. The redundant systems we 
had worked, but that is not what we are interested in having. 
So our staff--the highly technical, very capable staff that we 
have at the NRC--they know that this commission is looking at 
the inspection program, looking at the oversight program that 
we have because I don't want any more smoking guns. I made that 
very clear in the briefing that we had.
    Senator Voinovich. Well, I'd like to see what it was and 
what the new plant is, the building of what Mr. Merrifield 
said. I am also interested in two other areas. One of those is 
the area of human capital. Another hat that I wear is as 
chairman of the Subcommittee on Oversight of Government 
Management in the Federal Workforce. I would like to have a 
report from you in terms of the capacity of the people that you 
have on board, the potential for retirements, and your ability 
to attract the people that you are going to need.
    I always quote the statistic that you have more people over 
60--6 times more over 60 than you do under 30. So often it 
depends on the kind of people that you have that are working 
that determines whether or not you can get the job done.
    Also, have any sanctions been taken against individuals who 
have worked for the NRC where it is obvious that they didn't do 
the job that they were supposed to do?
    Mr. Meserve. Let me just say just quickly on human capital 
that we would be happy to provide you with a report. We 
appreciate your leadership on that issue.
    I can report to you that the 6-to-1 ratio that you 
mentioned--and I appreciate the fact that you have used it 
elsewhere--is no longer correct. I am afraid I now must say 
that we have made great progress and it is now 2-to-1.
    But unfortunately, I can't tell you that the problem is 
solved. It was comparatively easy to change that ratio because 
we hired a lot of younger people. With such a big leverage of 
six-to-one, we were able to change the ratio quickly. But we 
still have a serious situation. Thirty-six percent of our 
employees, including fifty-two percent of our managers, can 
retire within 5 years. We need to build capacity at this 
Agency. We are uniquely dependent upon the skills of our staff.
    I have sent you a letter with some suggestions as to things 
that could be done. We very much appreciate your leadership in 
that area.
    With regard to sanctions against the NRC staff there is, of 
course, the investigation that we mentioned a few minutes ago 
about whether somebody had seen this. Some actions could arise 
from that matter if it is substantiated. We have not taken any 
other sanctions. We view the problem that arose at Davis-Besse 
as an institutional failure and not a failure of the particular 
individuals.
    Among the lessons learned is to change our inspection 
resources to make sure that people focus on issues associated 
with this matter, to make sure that we have trained our people 
so that they recognize this sort of situation and have the 
capacity to deal with it, that we have the research in hand to 
understand the underlying phenomena and have a better handle on 
these types of issues.
    Let me say there has been an enormous issue in the 
industry, as well, to address the head issue. We have issued 
orders, including an order earlier this week, to enhance the 
inspection that is undertaken of the reactor vessel heads and 
of the nozzles that are on them. So I think we have this 
particular issue well in hand. The issues here are not ones 
that are directed at individuals but rather, quite frankly, at 
an institutional failure that we are aggressively addressing.
    Mr. McGaffigan. Mr. Chairman, my comment may go more to 
your last question. One of the lessons learned from Davis-Besse 
was we were assuming the place was better than it was. And not 
only ``we,'' but the Institute for Nuclear Power Operations in 
Atlanta, which is an industry group that evaluates the plants, 
also thought the plant was better than it was. As a result, we 
had a single resident inspector there when we should have had 
two. And the resident was not fully trained for part of his 
tenure, at a crucial time.
    We had an engineer position back in Chicago that was also 
vacant for part of the time. We had a project manager back in 
Chicago who was focused on the Clinton plant, which was a plant 
in trouble at the time. And then we had the project manager for 
Davis-Besse back at headquarters. Instead of having our nominal 
5-year tenure, we had 9 people in 10 years in that position.
    So one of the things that I think the staff has learned as 
a result of Davis-Besse is that we can't tolerate long periods 
of time when we don't have the right number of inspectors at 
the site--we can't tolerate these vacancies. And yet like all 
Federal agencies, especially Federal agencies where there are 
changes of station, like the military, people rotate, we have 
to manage it.
    There are a couple of us at this end of the table who have 
been concerned. We went a few years ago from having three 
inspectors at a typical two-unit site--Davis-Besse is a one-
unit site--but we had an N-Plus-One policy--at least one more 
inspector than the number and no less than two. We have not 
always been there. And then it becomes crucial that we backfill 
with regional inspectors when we don't have the right number of 
people at the site.
    I think we are learning that lesson. But it is very 
difficult. We can't assume somebody is a good guy. We have to 
carry out the minimal inspection program and do that 
aggressively at all of the sites. I think that is a lesson we 
are learning. But there is some real problem at Davis-Besse, I 
think, in our culture, in that we were assuming that the plant 
was better than it was, and the industry institution with whom 
we talk had a similar view, that this plant was better than it, 
in fact, was.
    Mr. Merrifield. Mr. Chairman, I would say that I think one 
of the significant lessons that we have learned from the Davis-
Besse episode is that we need to make sure we have the tools 
and the people that we can deploy.
    Senator Voinovich. What I would like to do is this. You 
have Davis-Besse. Mr. McGaffigan, you have done a nice job of 
describing it in terms of the personnel thing of ``Here is what 
was there.'' Then you went on to describe what should have been 
there.
    I want to know what should have been there and what you are 
doing to make sure that what should have been done is going to 
be there because you are going to have the people there to do 
it.
    Mr. McGaffigan. The question today, sir, is not Davis-Besse 
because we have more resources than you can imagine at Davis-
Besse. The question is. Are we doing it somewhere else?
    Senator Voinovich. That is a good example. You can use this 
as a case study that illustrates, ``We blew it. This is what we 
should have had.'' Multiply that realization across all the 
other facilities to determine the organizational needs and 
personnel to ensure that you have the people at the right place 
with the right skills and knowledge at the right time.
    Senator Carper has to leave for a security briefing. 
Senator Carper.
    Senator Carper. Thank you. I apologize for having to leave 
again. We appreciate your being here today and your service. 
Mr. Meserve, we wish you well in your next post. Thank you for 
your leadership.
    I said earlier for those of us who are concerned about 
reducing the threat of global warming, large amounts of carbon 
dioxide into our air, nuclear energy can provide real help 
there to alleviate those, I think, grave concerns. To the 
extent that we are concerned as a Nation about the ever-growing 
dependence on the importing of foreign oil and a burgeoning 
trade deficit, a greater reliance on nuclear energy can help us 
on that front as well.
    Your stewardship and your diligence in making sure that 
there is a commitment to perfection--in Mr. Diaz's words--a 
commitment to perfection in the operation of these plants, or 
something as close to that as we can humanely achieve is very 
much needed, especially at this time.
    I am going to ask a couple of questions for the record and 
I will submit those in writing.
    One of the questions that I will ask is going back to what 
sounds like what was experienced at Davis-Besse and maybe at 
this facility in New York State, a more modest incident. But 
one of the questions I will be asking for the record is for you 
to find out for us and to report back on the delay until the 
time the information was actually released as public 
information to the rest of us.
    The final question I want to ask--and this focuses more on 
a national issue. Mr. Meserve, in your comments earlier, you 
began to touch on some of the new technology, the next 
generation of plants that may be in the offing. Just take a 
couple of minutes and give us a bit more information on what 
might lie ahead in that regard.
    Mr. Meserve. Of course, we do not make the decision as to 
whether nuclear plants should be built. That decision is made 
by others; our focus is making sure there is adequate 
protection of public health and safety. We anticipate that 
there may be such construction in the future.
    We have revised our regulatory system and our licensees are 
taking advantage of it in the preparation for new construction. 
We expect this year, for example, that there will be three 
early site permits. That's a way to get environmental issues 
associated with a site examined early before there is an 
investment, to make sure that the site is suitable for the 
construction of a plant.
    We also have an opportunity that our revised regulations 
provide for design certification. We have certified three 
designs. We have one that is in the process and a number that 
are coming. These range from evolutions from current-types of 
reactors with upgraded capabilities, to reactors that are 
entirely different--gas-cooled reactors, for example, which use 
helium as the working fluid rather than water.
    All of these reactors reflect efforts to try to deal with 
safety issues. Some of them use passive safety systems so that 
rather than relying on pumps and mechanical devices in order to 
assure that there is adequate cooling, they rely on gravity or 
pressure to drive injection and thermally driven circulation as 
the vehicle for cooling so you don't have the dependence on the 
reliability of a mechanical device.
    A number of vendors are brining these types of ideas for 
possible construction to us or are talking about bringing them 
to us for our review. If we certify them, that is a more 
streamlined process for the eventual application of these 
improved technologies in new construction.
    Nobody has yet made the decision to come forward and say, 
``We really want to do it. We are going to file an application 
to proceed with construction and operation.'' There is 
discussion in the industry about that possibility. It may be a 
year or two before that happens, but as indicated by the early 
site permits and the certified designs, people are laying the 
groundwork for those decisions to be made.
    Mr. Merrifield. I would also add. Teams are thinking about 
the way we do business. In our country we no longer manufacture 
the vessels. We talked about the vessel head at Davis-Besse. We 
don't manufacture those components anymore in the United 
States. We don't manufacture steam generators. Those are 
manufactured in Japan, Korea, Spain, and Canada.
    So we are going to have to change our way of doing business 
if those reactor orders take place. We are going to put people 
on planes and send them abroad and figure out how do we do 
those inspections. We do some of that now because we do 
inspections at foreign facilities.
    So there are a lot of things that we have to plan on to 
make sure that we are ready if, in fact, as the chairman has 
mentioned, a utility were to decide to go ahead and build a 
plant.
    A second element to that, however, are the sites 
themselves. As you may have heard--and the chairman touched 
upon--there are three utilities--Entergy at its Grand Gulf site 
in Mississippi, Dominion, with its North Anna site in Virginia, 
and Exelon with its Clinton site in Illinois--have all 
announced their decision this year to come in and seek pre-
licensing of the sites for the future.
    So that is another step and sort of a toe in the water, so 
to speak, of the utilities. We will be working to review those 
sites to see if they are appropriate for the potential 
placement of plants down the line.
    Mr. McGaffigan. Senator Carper, I might just mention, given 
your prior experience with the Navy, we do have somebody who 
does build reactors. As you know, this year we completed the 
review of the Virginia class submarine nuclear steam supply 
system for the Naval Nuclear Propulsion program. It is a 
classified effort, but we in public said that our judgment was 
that this was an improvement on the already wonderful record of 
the Navy in the previous reactor designs that the Navy had. So 
the Navy does continue to advance technology for its particular 
uses.
    Senator Carper. Thank you all. Thank you, Mr. Chairman.
    Senator Voinovich. Senator Clinton.
    Senator Clinton. Thank you. Can I rely on what I heard in 
the previous round of questioning that we will confirm for the 
record that there will be a force-on-force drill at Indian 
Point in June or July?
    Mr. Meserve. I can confirm that Entergy has agreed that it 
will be an early exercise. The precise date has not been 
established. June or July is a possibility. It is conceivable 
even it might be earlier.
    Senator Clinton. Thank you, Mr. Chairman.
    Mr. McGaffigan. Senator Clinton, may I also add that we are 
probably not going to announce the date to the public. When a 
plant actually has one of these security exercises, it is 
potentially a little vulnerable. We have twice as many people 
there because you have the shadow force and the force that is 
actually still guarding the plant. We will probably not 
announce that it occurred until after the fact, just so you 
understand that.
    Senator Clinton. Just so long as my neighbors don't think 
they are being invaded, that's fine with me.
    [Laughter.]
    Mr. McGaffigan. That's actually something we have thought 
about. We will not at Indian Point use the full sound system. 
You will not hear a battle going on. In a more remote location 
we have gear where it does sound like you have a full battle 
going on.
    Senator Clinton. That would be good.
    [Laughter.]
    Mr. Merrifield. I do want to allude to it, though. What 
Commissioner McGaffigan is talking about is one of the 
enhancements that we are making. We have decided to move ahead 
and adopt a system that the military uses.
    Senator Clinton. Good.
    Mr. Merrifield. Laser indicators to target individuals who 
may be invading the plant. Typically the military also uses 
blanks as part of that program. The commission has 
affirmatively said that we do not believe in using blanks in 
highly populated areas where it might disturb local citizens. 
It is something we are concerned about. So we certainly hear 
you on that.
    Senator Clinton. That's helpful. And following on that, 
when is the NRC going to revise the design basis threat to 
reflect the new threat environment in which we find ourselves?
    Mr. McGaffigan. We have a design basis threat that is now 
out for interagency review. We work on this issue with other 
knowledgeable agencies including the FBI and the intelligence 
community. We are receiving comments on that as we speak. The 
commission has set a schedule for itself we are aiming to 
complete that work--have scheduled to complete that work by the 
end of March.
    Senator Clinton. Thank you.
    Mr. Merrifield. If we do achieve that, I think we will be 
the first Agency in Government that will have revised its 
design basis threat after September 11th.
    Senator Clinton. That's good news.
    Yes, sir?
    Mr. Diaz. In reality, we do have a de facto new design 
basis threat that we established a year ago. So although there 
was an old DBT, the newer security requirements make for a much 
larger DBT than the older one. So a de facto DBT has existed 
for almost a year.
    Senator Clinton. Good. Mr. Chairman, I am going to have to 
leave to go to the Armed Services Committee, but I have a 
question that I would like to submit to Inspector General Bell. 
I want to read it because it follows up on what we were talking 
about previously.
    As I understand it, the Inspector General's office is 
currently working on a report concerning NRC's enforcement of 
regulatory requirements and commitments at the Indian Point Two 
nuclear power plant. I understand that the Inspector General 
has been working on this report for quite some kind. My staff 
has had several discussions with the Office of the IG about the 
report. I have an extreme interest in receiving that report.
    In fact, I wrote to the IG about it just last week in the 
hope that it could be released before this hearing, or that at 
least we could hear about its findings because it goes to the 
point that the IG report that I previously referred to was 
dated 2000. It was a retrospective report. We do need this 
updated report. But the release keeps being pushed back. I 
would like a date certain as to when this report will be 
released. I would very much like to let the commission and the 
IG know that this is a matter I will continue to raise in this 
committee.
    Then I will submit a second question for the IG with 
respect to some of the issues that the chairman has addressed 
concerning Davis-Besse and the workforce capacities and 
training.
    Before I leave, if any commissioners have any comment on my 
questions concerning the IG report, I would be interested in 
hearing them.
    Mr. Meserve. Let me say that, as you know, the whole 
function of the IG is to be a very independent operation. We 
welcome and carefully consider the IG recommendations. I am 
aware as well that the IG report with regard to Indian Point is 
underway. I don't interfere and none of my colleagues interfere 
with the IG's effort. So, the answer will have to come from the 
IG as to what the schedule is for that report. We don't try to 
control--it would defeat the purpose of the IG, quite frankly, 
if we tried to exercise those sorts of controls on him.
    We would be very happy to respond with regard to Davis-
Besse and the various issues that you have.
    Senator Clinton. Thank you. Finally, Mr. Chairman, I would 
like to express my appreciation to Chairman Meserve for his 
service. I know this is probably the last time you will appear 
before this committee, at least if the schedule is any 
indication; perhaps not. But I personally want to thank you for 
your service, as I thank the other commissioners.
    We are all in uncharted terrain right now. I think it is 
important that we ask the hard questions. We push each other 
within Government, from outside of Government, as hard as we 
can, to be creative, to think about all these issues perhaps in 
a new and different way because I believe we have to be 
hypervigilant and perhaps more committed to thinking outside 
the traditional boxes that have served us well in the past but 
are no longer adequate to what we are confronting today.
    But I have enjoyed my working relationship with the 
chairman. We have often disagreed and he continues to object to 
the Nuclear Security Act which I am going to continue to press 
forward on.
    [Laughter.]
    Senator Clinton. But I am very grateful that a person of 
his commitment and caliber would be in public service. I regret 
his loss to public service and this commission. Thank you.
    Mr. Meserve. I very much appreciate your comments. I should 
state for the record there are only aspects of the bill that I 
object to.
    [Laughter.]
    Senator Voinovich. We will be having another hearing on 
that.
    Senator Clinton. Well, maybe I will see you again.
    [Laughter.]
    Senator Voinovich. The lessons-learned report cites 
significant problems with the safety culture at Davis-Besse. A 
report by the Institute of Nuclear Power Operations--and I am 
going to quote from it:

    ``A major contributor to this event was a shift in focus at all 
levels of the organization from implementing high standards to 
justifying minimum standards. This reduction of standards resulted from 
excessive focusing on meeting short-term production goals, lack of 
management oversight, base problem solving, justification of plant 
problems, isolation, ineffective use of operating experience, and lack 
of sensitivity to nuclear safety.
    ``A report by the NRC's Inspector General showed that only 53 
percent of the NRC employees feel that is safe to speak up in the NRC 
about safety issues. That report also states that almost 25 percent of 
the NRC employees do not believe that the NRC's commitment to public 
safety is apparent in what we do on a day-to-day basis.''

    These are statistics that frankly are unacceptable. I would 
like you, Chairman Meserve, to comment on it. Do we have a 
culture there where we are not encouraging our people to speak 
up about issues and be forthright?
    Mr. Meserve. I am very pleased that you raised that issue, 
Senator. What you are referring to is a survey of safety 
culture that was conducted by the Inspector General. And 
perhaps your questions could also be directed at him.
    Let me say that in many respects this is a report which we 
received with great enthusiasm. The report shows very 
significant improvement in terms of the attitudes of the NRC 
employees in most areas, significant improvement--often double-
digit improvement--in things like morale, commitment, respect 
for the leadership and so forth, over a previous survey that 
had been done in 1998. And it similarly showed that in nearly 
all areas that the NRC staff stood up well in these various 
metrics as compared with benchmarks that were drawn from other 
R&D agencies or from the R&D world in general.
    There were some issues, as all these reports obviously 
raise some issues. And one of the issues that was raised was an 
area called the ``Continuous Improvement Commitment,'' I 
believe. It included attitudes toward safety, among other 
elements, in which there were statistics where we fell short. 
We take that very seriously.
    What we have done is asked our executive director for 
operations, who is the principal staff officer, to undertake an 
examination of the underlying root causes for that problem and 
how we should address it. So we took this report as indicating 
that we had made enormous progress over the past time and stand 
up well in general in comparison with our benchmarks. But we do 
have some issues that we need to address, and we are addressing 
them.
    Senator Voinovich. And one of them is a comfort level on 
the part of people to speak out?
    Mr. Meserve. That is an issue. We demand that our licensees 
provide a system in which people are comfortable to speak up. 
We can ask no less of ourselves.
    Mr. McGaffigan. Mr. Chairman, I might just go ahead, sir. 
We try to lead from the top on this issue, Mr. Chairman. At 
every opportunity we, as commissioners, have to encourage staff 
to raise issues. We have something in our system, a formal 
process, for dissenting views within the staff, the differing 
professional view and the differing professional opinion 
process.
    I can't tell you how often we encourage people to raise 
issues at the very top. And we give them the opportunity to 
address us when an issue is before us. Recently we had an issue 
with regard to a new rule that we are going to be putting out 
for risk informing our reactor regulations. And we had the 
three people who had filed dissenting views from the consensus 
position of the staff appear before the commission.
    People raising dissenting views have, during my tenure on 
numerous occasions, changed commission policy over the last 6 
years. So we try to lead--and I think the senior staff is 
trying to lead--by encouraging those views to come forward. We 
are best when we have the full diversity of views of our staff. 
I use this opportunity today, sort of through this question and 
answer, to reiterate that from the commission on down we want 
those opposing views. That is how you get the best public 
policy, I believe.
    Mr. Merrifield. Mr. Chairman, I completely agree with the 
characterization that Commissioner McGaffigan has made, and I 
would add further that virtually all of us have a policy--the 
commission having an open door policy, of saying to staff--and 
we have said this repeatedly in public--if you have a concern, 
come on in our door.
    In the last few months I have had folks who have taken me 
up on that, who have come in and raised concerns. You can ask 
the Inspector General. I had one recently. A person brought an 
issue up. And I referred it to him to take a look into it. 
That's the way it should work. That's the position we have. Our 
staff should be raising safety concerns and we should foster an 
environment in which they are comfortable in doing so.
    I would say that given what Commissioner McGaffigan has 
spoken about, and what I have spoken about, we were somewhat 
puzzled by that particular outcome. We kind of thought we had 
an environment in which we were doing that. Obviously members 
of our staff didn't feel that way, and I think there is a 
commitment among the commission as a whole that we are going to 
fix that problem.
    Mr. Diaz. But it does seem that if you look at the 
statistics from a group that actually is not in high positions 
in the commission, and they might have felt--and we need to be 
very responsive to it--that they couldn't really freely discuss 
these issues. I think we now realize that that is an issue that 
we need to look further. We have all of these discussions at 
multiple levels with top management--that is not the problem. 
We go to middle management--that is not the problem. It seems 
like it is further down in the innards of our staff. That is an 
issue that we really need to address.
    Senator Voinovich. I would like to agree that the report 
indicated that there has been improvement. But it also pointed 
out that half the Agency's employees--53 percent--feel it is 
safe to speak up. This is a significant 5 percent increase from 
1998 that say they don't believe the NRC's commitment to public 
safety is apparent in what we do on a day-to-day basis.
    Obviously we can monitor this situation and perhaps have 
another survey made in the near future to just compare it with 
what the statistics were from the one that just was done and 
see where you are. But I am very pleased to hear that you do 
encourage people because I think that's the only way that you 
can have a healthy organization is by encouraging people to 
speak up and to disagree, and especially in the kind of work 
that you are doing.
    Mr. Merrifield. Mr. Chairman, in the second point that you 
were making, I think some of that goes to the issue of 
communications. We have an Agency which is a result of our 
organization back in 1975. The notion at that time was because 
we were split from the Atomic Energy Commission, we should not 
at all be promotional. And I think that feeling has trickled 
down into the fact that sometimes the Agency isn't as 
promotional of itself to explain to the public what we do and 
how we do it and our commitment to safety.
    I think if you ask any of us, if you ask any of our 
management, and hopefully if you ask our staff, we are 
committed to making sure that these plants and the other people 
that we license are safe. Perhaps we can, and should, take as a 
lesson from this survey that we can do a better job of 
communicating that to the public.
    I think if we do a better job of doing that, our staff will 
have more engagement in terms of having confidence, and, in 
fact, that the public perceives us that way. I think that is 
part of what that second question was all about.
    Senator Voinovich. Well, I have found from my experience 
that you have your internal customers and you have your 
external ones. Too often we pay attention to the external ones 
instead of working with the internal ones.
    How much participation do your people have? You are coming 
back now. You are reviewing what you are doing, to do it 
better, and so forth. How much input are you getting from the 
people that are actually doing the job? Do you have quality 
management at all in the Nuclear Regulatory Commission? Do you 
have self-improvement teams or anything of that sort?
    Mr. Meserve. We have, as a general philosophy, been trying 
to flatten the organization, to take out layers of management, 
to put the responsibility at lower levels so people who should 
be doing the job are doing the job, strengthen the 
communications at all levels with regard to how things are 
going. We have constant efforts to monitor how we are doing in 
this area. We very much welcome the input that the IG and 
others provide to us.
    So we are trying. We see this as an essential area for the 
fulfillment of our mission. It's a way, quite frankly, for us 
to deal with some of our human capital issues. We want to have 
people who have pride in the work that they are doing, feel 
responsible for the work, and have fulfillment from their work. 
All of this is integrated, I believe, in our achievement of our 
overall objective.
    Senator Voinovich. I would be interested in your looking at 
the way you are operating the organization. I would be 
interested--and don't have to do it today--but I would like to 
have it in writing of some specific examples where you are 
doing things differently and the reason why you are, where the 
people who are actually doing the job have come back and 
recommended how they think they can do their job better.
    Mr. Meserve. We would be pleased to do that.
    Mr. Diaz. Mr. Chairman, there is a cultural issue that I 
think you should be aware of that I think impacts on all of 
this. The AUC has been trying to become more risk-informed and 
performance-based through the years. That is a dramatic change 
to many of our staff members. Many of them are still very 
devoted--and maybe rightly so--to the way that we were doing 
things.
    So when you get these changes, actually you get diverse 
opinions. And we welcome the diversity of opinions because in 
many ways it gives us checks and balances. So I am saying that 
there are many people in our staff that see some of our new 
processes as advancing a little too fast, and the commission 
needs to deal with the fact of how do we keep the staff in 
there and at the same time go forth with changes.
    Senator Voinovich. Mr. Diaz, I understand that. We 
instituted quality management in Ohio with some 58,000 
employees.
    Mr. Diaz. I see.
    Senator Voinovich. The biggest problem I had were the 
managers who had grown up in a command-and-control environment 
that didn't want to change because they enjoyed telling 
everybody what to do. But it is very important that the 
management style change if you are going to have an efficient 
organization that is going to have continuous improvement.
    The last question I have of the panel is, as the 
administrator of the Ottawa County Commission said, they are 
interested in getting this facility back on line, but in a 
manner that will absolutely protect the people of Ohio. I would 
like you to comment on just where are we in this initiative.
    Mr. Meserve. Well, we have a special process that we put in 
place for situations like the Davis-Besse plant. That involves 
a very substantial inspection effort by some of our most 
qualified people to evaluate the circumstances at the plant, to 
assure that the underlying issues that resulted in the problems 
have been corrected. Only if we are satisfied that the 
necessary improvements are in place, will we be in a position 
to authorize the restart. This is a plant that cannot restart 
without an authorization from the NRC.
    This has been an ongoing effort. There are very substantial 
modifications that the licensee is making. There is a very 
important test that they need to undertake to bring the reactor 
under pressure without a nuclear reaction occurring, to be able 
to test the new head, and to test the possibility of events 
that might occur on the bottom of the reactor.
    So, there are a number of important steps that need to take 
place, including this test and the completion of the various 
upgrades, before the NRC would be in a position to authorize 
this facility to restart.
    Senator Voinovich. Do you have any kind of a timeline?
    Mr. Meserve. I believe that First Energy has expressed 
aspirations of late spring for completing that effort. I think 
it is too early for us to be able to say that we are 
sufficiently confident that that is a realistic date.
    Mr. Merrifield. I would add, Mr. Chairman, that we are 
going to use a disciplined approach. The chairman talked about 
our 0-50 inspection process. It is disciplined. We want to make 
sure that it is timely, but as much as we want to make sure it 
is timely, we want to make sure it is done right, and that we 
are confident that they are operating safely.
    Senator Voinovich. I need both criteria. I want you to do 
it right.
    I do have a few more questions for you, but I will submit 
them to you in writing so we can get on with our next witness.
    I thank you very much for your being here today. Chairman 
Meserve, thank you for your service to your country. I think 
that too often we take for granted the fact that people like 
yourselves are willing to step forward and take on positions on 
commissions like this that could be partly controversial and 
stressful, but I know that you do it because you want to 
contribute to your country.
    I would like to say one other thing to you. I am going to 
be touching base with you maybe a little bit more often than 
maybe some of the other chairmen because I do believe in 
nuclear power. If we are going to go forward with nuclear power 
in this country, however, we really have to allay the fears of 
a lot of folks. And you know, there are some people who don't 
like nuclear power, and any chance they have to find something 
that they can pick at, they will do it. So that even puts a 
much heavier burden on the Nuclear Regulatory Commission to do 
a superlative job.
    I wish I could get some of my colleagues to understand 
this--that we are now in a new world since September 11. It's 
changed our lives. It's changed the responsibilities that we 
all have. It's changed the public's interest in some of things 
that maybe we took for granted before, but no longer.
    So it is a heavy burden that you all have. Again, I 
appreciate your willingness to serve. I am going to be spending 
more time with you than perhaps those in the past because I 
think it's necessary. Thank you very much.
    Mr. Meserve. Thank you.
    Senator Voinovich. Our next witness is Hubert Bell, 
Inspector General for the Nuclear Regulatory Commission.
    We welcome you to this hearing this morning, Mr. Bell, and 
would appreciate your testimony. I apologize that we don't have 
more members of this committee here today but there are lots of 
things going on as you well know. You may proceed with your 
testimony.

 STATEMENT OF HUBERT T. BELL, INSPECTOR GENERAL, U.S. NUCLEAR 
REGULATORY COMMISSION ACCOMPANIED BY: GEORGE A. MULLEY, SENIOR 
     LEVEL ASSISTANT FOR INVESTIGATIVE OPERATIONS, NUCLEAR 
   REGULATORY COMMISSION AND STEPHEN D. DINGBAUM, ASSISTANT 
  INSPECTOR GENERAL FOR AUDITS, NUCLEAR REGULATORY COMMISSION

    Mr. Bell. Good morning. Mr. Chairman and members of the 
subcommittee, it is a pleasure to appear before you today. I am 
accompanied today by Mr. Stephen Dingbaum, Assistant Inspector 
General for Audits, and Mr. George Mulley, Senior Level 
Assistant for Investigative Operations.
    As you know, the mission of the Office of the Inspector 
General at the Nuclear Regulatory Commission is to assist NRC 
by ensuring integrity, efficiency, and accountability in the 
Agency's programs that regulate the civilian use of byproduct, 
source and special nuclear material in a manner that adequately 
protects public health and safety and the environment while 
promoting the Nation's common defense and security.
    My office carries out this mission by independently and 
objectively conducting and supervising audits and 
investigations related to NRC's programs and operations; 
preventing and detecting fraud, waste, and abuse; and promoting 
economy, efficiency, and effectiveness in NRC's programs and 
operations.
    To perform these activities, the OIG employs auditors, 
management analysts, criminal investigators, investigative 
analysts, legal counsel, and support personnel. The OIG also 
uses private-sector contractors to audit NRC's financial 
statements as mandated by the Chief Financial Officers Act, and 
for other audit, investigative, and information technology 
technical support services.
    To fulfill our audit mission, we conduct performance, 
financial, and contract audits. In addition, the audit staff 
prepares special evaluation reports that present OIG's 
perspectives or information on specific topics. OIG's 
investigative program is carried out by performing 
investigations relating to the integrity of NRC's programs and 
operations.
    Also, periodically the investigative staff conducts event 
inquiries which yield investigative reports documenting the 
examination of events or Agency regulatory actions that do not 
specifically involve individual misconduct. Instead, these 
reports identify staff actions that may have contributed to the 
occurrence of an event.
    Recent work performed by my audit and investigative staff 
in furtherance of our mission include an event inquiry into the 
NRC decision to allow Davis-Besse to continue to operate beyond 
an NRC established deadline without performing vessel head 
penetration nozzle inspections.
    Additionally, we conducted an event inquiry to address 
concerns resulting from an incident at Indian Point during 
which the power plant experienced a steam generator tube 
rupture in one of its four steam generators.
    In the area of nuclear materials we investigated the 
reported loss of two spent nuclear fuel rods at Millstone 
Nuclear Power Station Unit 1. In addition, we addressed 
unrelated allegations that the NRC and the Department of Energy 
representatives conducted meetings that were contrary to 
mandates regarding Government activities concerning the Yucca 
Mountain nuclear waste repository site and made decisions 
during these meetings from which Nevada representatives were 
unlawfully excluded.
    We also engaged an independent contractor to conduct a 
survey of NRC's workforce to: (1) measure NRC safety culture 
and climate; (2) compare the results against NRC's 1998 Safety 
Culture and Climate Survey; and (3) to compare the results to 
Government and national benchmarks.
    Additionally, pursuant to the requirements of the 
Government Information Security Reform Act, we completed a 
review of NRC's implementation of its Information Security 
Program, and in response to a congressional request, reviewed 
the adequacy of NRC's programs for handling and releasing 
sensitive documents.
    A key goal of the OIG is to add value to NRC's regulatory 
and administrative programs. The OIG is encouraged by the 
Agency's actions to address OIG's findings, and to implement 
many of the recommendations made by my office. There are many 
examples of collaborative work between my staff and Agency 
managers in an effort to refine the effectiveness and 
efficiency of Agency programs.
    While some challenges remain, the OIG supports the Agency's 
commitment to ensure the effective regulation of the Nation's 
civilian use of nuclear power and to the integrity of its 
programs that ultimately protect the health and safety of the 
public. OIG will remain steadfast in its resolve to assist the 
NRC in fulfilling this important mission.
    Mr. Chairman and members of the subcommittee, this 
concludes my report on the activities of my office during the 
recent past. We would be pleased to answer any questions at 
this time.
    Senator Voinovich. We reviewed your investigation into the 
events that took place at Davis-Besse and want you to know how 
much we appreciate your efforts.
    I've got a couple of questions about your investigation. 
You have been staying in touch with what's been going on. Do 
you believe that the NRC is doing everything it can to prevent 
another incident like the one at Davis-Besse?
    Mr. Bell. Senator Voinovich, I believe that NRC conducts 
the various activities as a regulator of nuclear power in a 
very competent manner. As shown, the events at Davis-Besse on 
occasion and the actions taken or not by licensees and the 
Agency can have a large cost consequence.
    This is not new in the history of the nuclear industry or 
NRC. What seems to be more prevalent today in both business and 
regulatory environments without regard to the venue are 
financial considerations. Typically a decision has an 
associated cost and it is taken into consideration. In today's 
regulatory environment, the NRC is readdressing what is meant 
by an acceptable level of risk and its relationship to safety.
    Are we to the point where we are placing the public at an 
unacceptable risk? I don't believe so. The events at Davis-
Besse and possibly Indian Point, in my view, are instances 
where it appears that both the industry and the NRC allowed 
higher risks to be assumed. Should these risks be considered to 
be unacceptable? I cannot say.
    The licensee and the NRC staff must answer that question. 
The NRC and its licensees must, however, eventually come to 
terms as to the appropriate balance among risks, safety, and 
any identified cost.
    I believe that on balance, however, the incidents at Indian 
Point and Davis-Besse indicate that we are moving close to the 
undue risk line.
    Senator Voinovich. Moving forward to the what?
    Mr. Bell. The undue risk line. There's a line where we are 
moving closer to becoming unsafe.
    Senator Voinovich. Your opinion is that when you have a 
balance, that you think that too often the considerations are 
financial and not enough toward to the risk involved; is that 
right?
    Mr. Bell. No, I am saying that--we don't say that the cost 
outweighs the risk. What we are saying is that any time the 
risk changes, then there is a cost associated with the change 
that is involved. And that is when the decision has to be made. 
Whether you draw the line or you make them do the change, 
without regard to the cost, or you simply accept the risk. To 
me, there is a meeting point as to what is acceptable or not 
acceptable.
    Senator Voinovich. Well, obviously from your report it was 
too much toward the financial and what you think needs to be 
done is that we need to move more toward the risk and if there 
is any opportunity for something to happen, that your opinion 
would be that they would take the action immediately and lessen 
the impact in terms of the financial impact that it would have; 
is that what you are basically saying?
    Mr. Bell. Well, our report didn't say that it was only 
financially driven. What we said was that there was a decision 
to be made about the technical and safety issues and also the 
cost involved. We merely pointed out those two issues. I think 
the inference from the press was that of the Agency was leaning 
toward cost.
    But our report did not conclude--in fact, that the Agency 
erred on the side of finances over safety. What we said was 
they looked at the financial burden that would result from an 
early shutdown. We said that those are the two issues that we 
pointed out. They made the decision; the Agency made the 
decision, sir.
    Senator Voinovich. The interesting thing to me is that they 
based it on information that was not as good as it should be. 
Had they been given the best information, do you think that 
they would have made the same decision--to delay the shutdown 
of that facility?
    Mr. Bell. Could I have Mr. Mulley go over just what we did 
in a capsulized form? Then I think that the question will 
answer itself. I would ask that Mr. Mulley take 2 minutes and 
explain the work that we did at Davis-Besse.
    Senator Voinovich. Go ahead.
    Mr. Mulley. Mr. Chairman, in direct answer to your 
question----
    Senator Voinovich. Give us your name again.
    Mr. Mulley. My name is George Mulley. I am the Senior Level 
Assistant for Investigative Operations at the OIG Nuclear 
Regulatory Commission.
    As a direct answer to your question, I believe the answer 
is: Had the staff known what they know now, there is no doubt 
in our mind that they would not have allowed that plant to 
continue to operate. I think the findings of that inquiry show 
that the staff was weighing the financial impact of a plant 
shutting down several months early versus the information they 
had at the time.
    I think this is a fact of life in the regulatory 
environment we have now. We don't believe that the staff gave 
undue consideration to the financial impact. There is some 
language in our finding that says the staff's decision to allow 
them to operate was driven by finances.
    The point we're trying to make there is that on one side of 
the equation you have the technical status of the plant, you 
have some very serious questions being asked about the safety 
of the plant. Absent the financial considerations, we believe, 
FENOC would have shut down Davis-Besse right away. Financially 
that had an adverse impact.
    We also believe the staff considered the financial question 
of how much it is going to cost to shut this plant down early. 
And as a result of that they continued to have a dialog with 
Davis-Besse to try to find a way to accommodate the situation 
they were in. It was going to cost a lot of money and they 
weren't prepared to conduct the inspection required by the 
bulletin prior to the middle of February sometime.
    Senator Voinovich. So, if they had had better information, 
you believe that they would not have made the decision that 
they made?
    Mr. Mulley. I firmly believe that; yes, sir.
    Senator Voinovich. And you would say that whenever they 
have such information and must make a decision like this, that 
they should do a better job of documenting their analysis and 
conclusions?
    Mr. Mulley. Yes, sir.
    Senator Voinovich. If you are going to make a decision like 
this, you really must consider all the details--why you did it, 
etc. It's a very transparent process in the decisionmaking. The 
question of arbitrariness, or influence, or something like that 
can't be an issue in that equation.
    Mr. Mulley. Yes, sir. Our investigation shows that the 
decision made to allow the plant to continue to operate 
apparently was made--for lack of a better word--at an ad hoc 
meeting at the end of a day involving an unspecified number of 
unnamed people. There was no record of the meeting made, and 
there was no record until quite a bit later of the 
justification that the staff used for making the decision to 
accept the compensatory measures and to allow the plant to 
continue to operate.
    Senator Voinovich. That's interesting. What I read--and I 
can't remember where--was that they had two meetings. They had 
one meeting in which a vote was taken not to do it. Then they 
came back and reconsidered it. So that would speak to more 
deliberation than what you have just indicated.
    Mr. Mulley. There was actually one meeting with two votes. 
A vote was asked initially of the staff as to whether or not 
the staff felt that the order should be issued. There was a 
majority of the staff that felt that the order should not be 
issued, that the compensatory measures were adequate.
    But there were several people who disagreed. Then there was 
a second question based on the results of the first, were there 
any people who felt that there was an immediate safety concern 
if we allowed Davis-Besse to continue to operate until February 
16th. The result of that vote was unanimous. Nobody felt that 
allowing the plant to operate an additional 6 weeks would 
result in an immediate public safety issue.
    Senator Voinovich. How long did that meeting last, by the 
way?
    Mr. Mulley. We don't know, sir.
    Senator Voinovich. I think it points out that if you are 
going to make that kind of decision, first of all, you have to 
have the best information, and then it has to be very well 
documented in all of its aspects.
    Mr. Mulley. Yes, sir.
    Senator Voinovich. You were here for the first testimony?
    Mr. Bell. Yes, sir.
    Senator Voinovich. There are photos that were taken as part 
of the inspection of the facility in April and that they were 
included in the report of First Energy and that that report 
wasn't reviewed by the NRC. I found that you are just now 
looking into that. So it was just about 10 days or a week ago?
    Mr. Bell. Yes, sir.
    Senator Voinovich. I would be very interested in hearing 
the results of your report. It underscores how important it is 
that they overhaul the way they go about doing their job.
    In addition, your report talked about the attitude--and I 
think that is so important about the employees. Again, 53 
percent of the employees feel that it is safe to speak up in 
the NRC about safety issues. How does that compare with other 
organizations of this type? Do you have any statistical 
background on it? Is that 53 percent----
    Mr. Bell. I can submit for the record the exact numbers, 
Mr. Chairman.
    But we think that this 53 percent is above or equal to the 
national norm. As was noted, prior to 1998 when we did this 
first safety culture and climate survey, my office had no way 
of knowing or gauging what the safety culture and climate was. 
So we did the initial survey in 1998 and then subsequently did 
the follow up survey.
    In all areas except two, there was significant improvement 
in all areas. I think in all except two areas, they either 
match or exceed the national norm benchmark that was set. So 53 
percent in reality may be just a little over half, but compared 
to the national norm, the survey indicated that they were at 
norm or above the national norm in all categories except in the 
area of continuous improvement commitment.
    Senator Voinovich. Turning to your investigation into 
improper contacts between the Department of Energy and the NRC 
over the licensing of Yucca, I recall that you determined that 
DOE and NRC have not had any improper discussions on that 
matter? I want to clarify that because you brought that up 
because you were looking into it.
    Mr. Bell. Yes, sir. Those allegations were that they were 
meeting illegally. As a matter of fact, those meetings were all 
sanctioned. The meetings that involved the DOE and NRC 
personnel in terms of the progress of applying for the 
licenses--those meetings were aboveboard and there was nothing 
improper about the meetings or the personnel involved in the 
meetings.
    Senator Voinovich. In your opinion, is the NRC prepared to 
address the licensing request by the Department of Energy in an 
independent and impartial manner?
    Mr. Bell. The license application is not due to NRC until 
really late 2004. We intend, next year, in our 2004 audit plan, 
to look at some of the audit areas for the licensing 
requirements. So I can't say today because we haven't done any 
work in that area because the license applications haven't been 
filed yet. So we really haven't done much work. We're really 
not in a position to answer that question today, sir.
    Senator Voinovich. We had an inspector general when I was 
Governor of the State of Ohio. I talked to him a couple of 
years ago, since I have been in the Senate. He is doing 
something that I thought was very well taken; where they had 
issues that could be very controversial, an agency said to the 
inspector general, ``You know, what are some of the things that 
we ought to be looking out for as we are going through this 
process. We want to avoid the appearance of unprofessionalism 
or impropriety when it's all over and done with. What are some 
of the things that we should be looking at?'' This would be 
without having to compromise the independence of it.
    I don't know what the final outcome of that was but he 
thought that was a healthy thing for him to be doing with some 
of these agencies to help avoid them making mistakes and doing 
things that are improper.
    Mr. Bell. We have done a few things in terms of just being 
on the forefront of it. For instance, in our last information 
and planning conference that we do every year, we highlighted 
the issues surrounding NRC's readiness to receive a potential 
license application from DOE. We used NRC employee panels at 
our information conference to discuss the information and 
receive information on the things that were going to be 
perceived as happening that we needed to get involved in. So 
the dialog stages of it have begun to occur.
    Senator Voinovich. So there is communication between you 
and the NRC?
    Mr. Bell. We are having dialog; yes, sir.
    Senator Voinovich. I have several other questions that I 
will want to ask of you. I will put them to you in writing. We 
would appreciate your responding to them.
    Let me pose the same question that I asked the NRC: Do you 
have a budget that's adequate for you to do the job that you 
have been asked to do? Second, are you able to attract the 
competent people that you need? You are overseeing an agency 
that is pretty sophisticated in terms of what they are doing 
and the quality of the people that are working there. In terms 
of your operation, to start off with, are you able to attract 
the competent people that you need to get the job done? What 
does your budget look like?
    Mr. Bell. In the budget for 2004, we have asked for $7.3 
million and 47 FTEs, which for us would represent three new 
positions. What we had envisioned--there's a short answer and a 
long answer.
    The short answer is that I feel we have very competent 
people. We have been fortunate to attract some of the best and 
the brightest. That's the good side. The down side sometimes is 
in the IG community, for various and sundry reasons, they don't 
like to travel. They come here and they don't like the work we 
are doing. Then they move on to other law enforcement agencies, 
or other IG agencies.
    So sometimes, especially in the investigative side, there 
has been a little more turnover than I would like. The audit 
side for us has been a lot more stable. But the good part is 
that as people leave, I have always been able to get competent 
investigators to replace them.
    The three new positions--and what we really intend to do, 
is to create a technical unit which will do more of the 
technical audits of the Agency. We are also in the process, and 
in the final review process, of hiring for the first time in my 
office an engineer, a person with an engineering background. 
That is just to help us to better understand the work that we 
are doing.
    I mean, right now if we do an inquiry--and I think part of 
it will be my response to Senator Clinton, that the report that 
she has asked me for that I can't turn over to her yet is 
because it is incomplete. And it is incomplete because we have 
not finished the technical review end of it. It doesn't make 
sense for us to issue reports if they are technically flawed 
because we aren't the technical experts. So as we complete our 
work, we do have an outside contractor that we look to for the 
technical issues.
    So hopefully when we bring on this field engineer position, 
we will be in a better position to do more in real time in 
terms of making sure what we farm out now is closer to what we 
think it is and what we are doing is right.
    Senator Voinovich. That is a problem that runs through a 
lot of agencies is that too often they have to go out to third 
parties to do the work for them. They don't have people inside 
the Agency that can really fully comprehend what the private 
outfit is doing for them, or for that matter, monitor the work 
that the private outfit is doing.
    So you are going to remedy that situation. That's good.
    Mr. Bell. In the past when we have had investigations that 
involve anything technical, we have gone to the Agency and they 
have given us engineers on loan to actually help us with the 
technical aspects of investigations. When you do any inquiry, 
certainly to keep the independent aspect of it on the up-and-
up, we have to make sure that we do have a real independent 
review of the work that we have done.
    Senator Voinovich. Are there any other comments that you 
would like to make here this morning? It's almost afternoon.
    Mr. Bell. No, sir.
    Senator Voinovich. Well, I thank you for the good work that 
you have done. I am going to continue to stay in touch with 
your office in terms of Davis-Besse specifically.
    Mr. Bell. Yes, sir.
    Senator Voinovich. It's the 25th year anniversary of the 
inspector generals. The chairman of your group is over at the 
Department of the Federal Highway Administration. He came in to 
see me. I am going to be meeting with your group to talk about 
inspector generals and your challenges, and to see if there is 
something that through the other hat that I wear, I can be of 
help to you. Thank you very much.
    Mr. Bell. We are planning a big celebration.
    [Laughter.]
    Senator Voinovich. Thanks, everybody, for being here.
    [Whereupon, at 12:12 p.m., the subcommittee was adjourned, 
to reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
 Statement of Senator Harry Reid, U.S. Senator from the State of Nevada
    Mr. Chairman, I want to thank you for calling this hearing today.
    Under former Chairman Jeffords leadership, this committee succeeded 
in passing important bipartisan legislation to improve the security of 
our Nation's nuclear facilities.
    I look forward to working with the new subcommittee and full 
committee chairmen to move that legislation again quickly.
    Today we are hearing from the Nuclear Regulatory Commission and the 
NRC Inspector General about general oversight issues at the NRC.
    Until the last Congress it was rare to see the NRC here. Too often 
this Agency has not had the careful watchful eye of the Congress. That 
has led to some areas of real concern.
    In the last few years, we have seen America's aging fleet of 
nuclear reactors show their technological wrinkles. These wrinkles are 
not just surface blemishes--they are signs of real problems ahead, 
unless we take a new aggressive approach to regulating our Nation's 
nuclear power plants.
    To move in this direction, we need an agency that is committed to 
protecting the public health and safety--not just preserving the profit 
margins of the nuclear power industry.
    These concerns are not only shared by the public, but even by NRC 
staff.
    A recent report by the Inspector General and I hope he will 
elaborate on this in his own testimony paints a bleak picture of the 
NRC's commitment to safety and security.
    According to that report, a survey conducted by the Inspector 
General found that a third of the Agency's employees question the 
Agency's commitment to public safety and nearly half are not 
comfortable raising concerns about safety issues within the Agency.
    The survey also found that some NRC employees worry that safety 
training requirements for nuclear facilities are outdated and ``leave 
the security of the nuclear sites . . . vulnerable to sabotage.''
    This is extremely troubling to me and I hope the commissioners will 
tell us what they are doing to reform this climate at the NRC.
    I am extremely concerned by this, because the Nuclear Regulatory 
Commission now has the important responsibility of evaluating a license 
for the proposed nuclear waste repository outside Las Vegas, NV.
    I expect the NRC to reverse its recent attachment to the proponents 
of repository and take a strong stand against the licensing of this 
facility.
    So far the Federal Government has been more concerned with moving 
this process along than with making this process fair. The NRC is an 
independent regulator and should live up to its responsibility by 
taking the following concrete steps prior to the onset of a licensing 
proceeding:
    First, the NRC should revise its regulations to ensure that the NRC 
staff acts as a party to the licensing proceeding. Although the NRC 
staff typically plays this role, there has never been a case in which 
the Federal Government has been the license applicant.
    Second, the NRC should ensure that the members of the Atomic Safety 
and Licensing Boards used for the Yucca Mountain license review are 
selected from people outside the Agency with strict conflict of 
interest protections.
    Finally, the NRC should strongly reaffirm the importance of 
maintaining the formal adjudicatory hearing process for the Yucca 
Mountain license. In particular, there should be full rights to cross 
examination and discovery.
    Implementing these recommendations would go a long way to ensuring 
that the NRC holds a fair and balanced Yucca Mountain license review.
    In the next few years, the NRC will be faced with some of its 
greatest challenges since the Three Mile Island accident.
    There is a continuing need to upgrade security at nuclear power 
plants.
    There will potentially be a license review of the proposed nuclear 
waste repository outside Las Vegas, NV.
    There will be a need to reexamine the safety of our Nation's aging 
fleet of nuclear reactors.
    I hope the NRC officials here today will give us some understanding 
of how they plan to meet these challenges in a way that puts the health 
and safety of our citizens foremost.
    I look forward to hearing from Chairman Meserve, the other 
commissioners and the inspector general.

                               __________
        Statement of Richard A. Meserve, Chairman, U.S. Nuclear 
                         Regulatory Commission

                              INTRODUCTION

    Mr. Chairman, and members of the subcommittee, it is a pleasure to 
appear before you today with my fellow Commissioners to discuss the 
Nuclear Regulatory Commission's programs. We appreciate the past 
support that we have received from the subcommittee and the committee 
as a whole, and we look forward to working with you in the new 
Congress.
    Mr. Chairman, I believe that fiscal year 2002 and the first 4\1/2\ 
months of fiscal year 2003 have been marked by significant achievements 
by our Agency in the face of great challenges. Let me enumerate a few 
of our achievements and the challenges. I will not go into great detail 
here because I submit a monthly report on our activities to you and our 
other authorization and appropriations subcommittees.

                                SECURITY

    Over the past 17 months, the Commission has undertaken a 
comprehensive review of safeguards and security programs, in close 
consultation with the Department of Homeland Security and other Federal 
agencies and with significant involvement by State agencies. Out of 
that review has come a series of interim compensatory measures (ICMs) 
to strengthen nuclear security at power reactors, Category I fuel cycle 
facilities, decommissioning reactors, research and test reactors, 
independent spent fuel storage facilities, the two gaseous diffusion 
plants, and the conversion facility, as well as in the transportation 
of spent fuel. Last August we put in place a five-tier threat advisory 
system compatible with the Homeland Security Advisory System, and we 
have used that system twice, including just last week, to improve 
security measures at our licensed facilities. We have issued Orders to 
strengthen our access authorization programs at power reactors. We have 
drafted proposed Orders to strengthen guard training and address guard 
fatigue. We have provided revised design basis threats (DBTs) for 
comment to other Federal agencies, the States and cleared industry 
personnel. We have been conducting enhanced table-top security 
exercises at our reactor facilities and will by the end of this month 
begin enhanced force-on-force exercises at these facilities. We will 
conduct force-on-force exercises on a 3-year cycle and have requested 
the resources to do this in our fiscal year 2004 budget. We have 
defined the actions that we need to take to ensure better control of 
high risk radioactive sources containing radioactive isotopes of the 
most concern for potential use in a radiological dispersal device.
    In short, we have a comprehensive and aggressive program to enhance 
security. Nuclear facilities had very significant security before 
September 11th and that security has been greatly strengthened in the 
aftermath of the attacks.

                        REACTOR SAFETY PROGRAMS

    The past 17 months have seen the maturing of our new reactor 
oversight process.
    We and most stakeholders believe that this new program is a 
significant improvement over our old inspection, enforcement and 
assessment processes. One of its strongest factors is its transparency 
and accessibility to members of the public. You will find on our web 
page performance indicators and inspection findings for every power 
reactor, as well as our current assessment of that reactor's overall 
performance. The transition to the new process has gone remarkably 
well, although it is still a work in progress on which we will make 
further improvements.
    Overall the industry has performed very well. As of the end of 
2002, there was one plant designated for the highest level of scrutiny, 
the Cooper plant in Nebraska, and one other plant, the Davis-Besse 
plant in Ohio, which is effectively being treated similarly under our 
Manual Chapter 0350 restart process. The Cooper plant has received 
significant attention from both our Region IV and headquarters staffs, 
and we are confident that it is on a path to resolving long-standing 
problems.
    The Davis-Besse plant has been our greatest recent challenge. Mr. 
Chairman, you have followed this matter in detail and we have had 
meetings about this. But let me try to summarize the issues for your 
colleagues.
    In February 2001, Duke Energy, the licensee at the Oconee Nuclear 
Station, conducted a vessel head inspection at its Unit 3. The vessel 
head is the very large steel structure that serves as the top of the 
reactor pressure vessel. Duke found circumferential cracking in several 
control rod drive mechanism penetration nozzles within the vessel head. 
The NRC staff immediately recognized the significance of these 
inspection findings--the possibility of the ejection of the control rod 
drive mechanism--and initiated a series of actions to ensure that any 
similar cracking would be promptly detected and repaired at other 
pressurized water reactors.
    The Davis-Besse plant was one which the staff and the industry 
believed potentially had high susceptibility to such cracking. The 
staff's August 2001 bulletin called for such plants to conduct vessel 
head inspections by December 31, 2001, unless a later time could be 
justified. Davis-Besse petitioned for additional time (until April 
2002) to complete the inspection. The staff initially planned to issue 
a shutdown Order, but decided in November 2001 to grant Davis-Besse a 
46-day extension on the vessel head inspection requirement. When Davis-
Besse shut down and conducted the required inspection, they found no 
through-wall circumferential cracking in the CRDM penetration welds, 
but, as they began to repair the axial cracks, they unexpectedly found 
a large cavity in the carbon steel of the reactor head. The cavity had 
been caused by corrosion due to the presence of boric acid.
    This degradation was preventable, and the licensee's actions 
leading up to the discovery of the corrosion in March 2002 are 
unacceptable. This discovery has led to investigations, which are 
ongoing, of the licensee's actions. It has led us to focus large 
inspection resources on the facility as it seeks to restart its reactor 
with a new vessel head. It has also caused the Commission's staff to 
focus on mistakes the NRC made in dealing with boric acid corrosion 
issues in the 1990's. In this connection, an internal lessons-learned 
task force has made a comprehensive set of recommendations related to 
inspections, assessment of operating experience, NRC staff training and 
experience, and the assessment of stress corrosion cracking, boric acid 
corrosion, and barrier integrity requirements. The NRC staff is now 
developing action plans to implement the highest priority 
recommendations on an aggressive schedule. On Tuesday of this week NRC 
issued orders to all 69 pressurized water reactor licensees outlining 
much tougher vessel head inspection requirements than those previously 
required by our regulations and by industry codes.
    The Commission staff has devoted significant resources to the 
Davis-Besse plant and to the broader issues raised by the Davis-Besse 
incident. Davis-Besse will only return to operation after the staff is 
convinced through intensive inspections both that the plant is 
physically ready to operate, and, perhaps more importantly, that the 
safety culture at the plant, which the licensee has identified as the 
main root cause of this event, is on the path to recovery.

                       REACTOR LICENSING PROGRAMS

    Let me now turn to significant achievements in our reactor 
licensing programs. Four reactors--Hatch 1 and 2 in Georgia and Turkey 
Point 3 and 4 in Florida--have had their licenses renewed to operate 
for 20 additional years. That brings the total of renewed licenses to 
ten. The staff currently has license renewal applications under review 
for 20 additional units. In every instance, the staff has met its 
timeliness goals in carrying out the safety and environmental reviews 
required by our regulations. This is truly a remarkable achievement. 
Today we expect almost all of the 104 reactors licensed to operate to 
apply for renewal of their licenses. The staff will continue to face an 
increasing workload in this area for the next several years as a bow 
wave of license renewal applications are submitted (echoing the bow 
wave of nuclear reactor construction in the 1970's).
    The Commission also carefully reviews requests to raise the maximum 
power level at which a plant may be operated. These so-called power 
uprates range from requests for small increases based on better 
flowmeter technology, to large requests in the 15 to 20 percent range 
that require substantial hardware modifications at the plants. In all 
instances, staff must be satisfied that safety margins are maintained. 
In 2001 and 2002, the NRC approved 40 power uprates, which have added 
approximately 1800 megawatts electric to the Nation's generating 
capacity--the equivalent of two large power plants. We expect a similar 
pace of uprates in the years ahead.
    The staff has similarly processed a series of license transfer 
applications that have allowed significant consolidation within the 
nuclear power industry. Most of these transfers were processed within a 
6-month target, and, with one exception, the NRC was not the last 
regulatory agency to grant the necessary approval.
    The NRC staff is preparing for potential new reactor and reactor 
design applications. The staff is on target to conduct a timely review 
of the Westinghouse AP-1000 design certification. It is preparing to 
review three early site permit requests expected later this year. The 
staff is also in the pre-application phase in dealing with potential 
design certifications for several additional reactor designs. And the 
staff is making infrastructure improvements to prepare for a potential 
combined operating license request. These are resource-intensive 
activities, and our fiscal year 2004 budget request provides for the 
necessary significant growth to meet this challenge.

                           MATERIALS PROGRAM

    Mr. Chairman, the NRC in partnership with 32 Agreement States also 
conducts a comprehensive program to ensure the safe use of radiological 
materials in a variety of medical and industrial settings.
    In the last 17 months, the Commission has completed a complex 
rulemaking on medical use of byproduct material--a rulemaking on which 
there was significant interaction with the Congress. We now face the 
challenge of implementing that rule and assuring that compatible 
regulations are adopted in the 32 Agreement States.
    The Commission has also been implementing a major rule change 
relating to large fuel cycle facilities. This rule requires the 
submission of an integrated safety assessment for all new licenses and 
license renewals that applies risk insights to the regulation of these 
facilities. Several major licensing reviews underway or soon to be 
submitted will test the new rule. Substantial new construction of fuel 
cycle facilities is planned in the near future, including a mixed oxide 
(MOx) fuel fabrication facility in South Carolina as part of the 
Department of Energy's program to dispose of excess weapons grade 
plutonium, as well as two new gas centrifuge enrichment facilities, one 
in Tennessee proposed by Louisiana Energy Services (LES) and one in 
Ohio proposed by U.S. Enrichment Corporation. The staff is also 
providing support to our Russian colleagues at Gosatomnadzor (GAN) 
regarding the licensing of a Russian MOx facility, which will have an 
identical design to the U.S. facility.

                         NUCLEAR WASTE PROGRAMS

    The Commission staff has made progress on a wide array of programs 
relating to the safe disposal of nuclear waste.
    A central focus of this program is the preparation for the 
Department of Energy's (DOE's) application to construct a high-level 
waste repository at Yucca Mountain, NV. That application is currently 
expected in December 2004. Over the past year the staff has issued a 
draft Yucca Mountain Review Plan for public comment and has conducted 
numerous public meetings with DOE in anticipation of its application. 
Preparations are now underway for the conduct of the licensing 
proceeding, including the creation of an information technology system 
to handle the large number of complex documents that will be involved. 
This licensing proceeding will present the NRC with a formidable 
challenge. The technical issues involved will be substantial. Moreover, 
no single NRC decision or set of decisions since the response to Three 
Mile Island accident is likely to be scrutinized as closely as those 
concerning this one-of-a-kind facility.
    Yucca Mountain is by no means the sole activity in our waste 
program. The Commission staff has a substantial effort underway in the 
area of dry cask storage of spent reactor fuel. Storage and transport 
casks continue to be certified. Independent Spent Fuel Storage 
Installations (ISFSIs) continue to be licensed. The Atomic Safety and 
Licensing Board panel will soon issue its final decisions on the 
Private Fuel Storage (PFS) ISFSI in Utah. And the Surrey ISFSI in 
Virginia is the lead facility for ISFSI license renewal. Indeed, our 
workload related to ISFSIs and dry cask storage in general will 
increase substantially in the years ahead based on licensees' plans to 
adopt dry cask storage at their sites. We also have a major research 
program underway, the Package Performance Study (PPS), which will 
conduct full-scale integrity tests of both truck and rail casks under 
stringent conditions. The PPS test protocols are being issued for 
public comment.
    The NRC staff is also continuing to make significant progress in 
decommissioning contaminated sites. The staff has identified several 
issues requiring Commission attention, particularly in the area of 
making the restricted release and institutional control provisions in 
our license termination rule work in practice.

                             HUMAN CAPITAL

    The NRC is very dependent on a strong and capable work force for 
the effective execution of its activities. The Commission's human 
capital planning integrates strategies for finding and attracting new 
staff, and for promoting employee development, succession planning, and 
retention. In this connection, the Commission has developed and 
implemented a strategic workforce planning system to identify and 
monitor its human capital assets and needs. This includes the 
development of an agency-wide online skills and competency system which 
is used to identify gaps in needed skills and to address critical 
skills shortages; the development of a restructuring initiative to more 
closely align NRC's organizational structure with its human capital 
goals; and the development of a web-based vacancy announcement system 
that includes online application, rating, ranking, and referral 
features. The Agency has also implemented two leadership competency 
development programs to select high-performing individuals and train 
them for future mid-level and senior-level leadership positions. In 
addition, the Agency has continued to support its fellowship and 
scholarship programs and identified a significant number of highly 
qualified entry level candidates through participation in recruitment 
events and career fairs.
    NRC is utilizing a variety of incentives to remain competitive with 
the private sector. So far we have been successful in attracting new 
staff, particularly at entry-levels. Nonetheless, it is likely to 
become more difficult for the Commission, as for many Federal agencies, 
to hire and retain personnel with the knowledge, skills, and abilities 
to conduct the safety reviews, licensing, research, and oversight 
actions that are essential to our safety mission. Moreover, the number 
of individuals with the technical skills critical to the achievement of 
the Commission's safety mission is rapidly declining in the Nation, and 
the educational system is not replacing them. The maintenance of 
technically competent staff will continue to challenge governmental, 
academic, and industry entities associated with nuclear technology for 
some time to come.

                                 BUDGET

    The NRC has proposed a fiscal year 2004 budget of $626.1 million. 
This represents approximately a 7 percent ($41.1 million) increase over 
the fiscal year 2003 budget. This budget proposal will allow the NRC to 
continue to protect the public health and safety, promote the common 
defense and security, and protect the environment, while providing 
sufficient resources to address increasing personnel costs and 
increasing workloads. Approximately 25 percent of the budget growth is 
for personnel costs, primarily the pay raise that the President has 
authorized for Federal employees. The remaining increase serves several 
other needs. First, the NRC's proposed fiscal year 2004 budget supports 
enhanced security efforts to protect public safety and security. Toward 
that end, the NRC is strengthening its safeguards and security programs 
for nuclear reactors, other NRC-regulated facilities, and radioactive 
materials. Second, the proposed budget addresses the growing interest 
in building new nuclear power plants. It strengthens the capability of 
the NRC to conduct reviews of new reactor designs and early site permit 
applications. Third, the budget enables the Agency to process the 
increasing flow of applications for license renewal. Finally, with 
Presidential and congressional approval of the proposed Yucca Mountain 
site for a HLW repository, the pace of the NRC's high-level waste 
program is increasing, and the proposed budget enables the NRC to 
continue its preparations for the license application that the U.S. 
Department of Energy plans to submit in late 2004. In short, we have 
important new work and there is strong justification for the budget 
increase that we seek.

                               CONCLUSION

    Mr. Chairman, the NRC obviously has many important initiatives 
underway. This reflects the reality that we are in a time of striking 
change. Fortunately the NRC is up to the challenges before it.
    I have had the privilege of leading the Commission for over 3 
years. I can tell you that I am proud of the people with whom I work. 
They are dedicated to ensuring the safe use of nuclear technology for 
the benefit of the Nation. You will not find a more technically 
competent and hard-working workforce in the Federal Government. Thanks 
to them the NRC has accomplished many milestones during my tenure and 
will accomplish many more after I step down.
    We appreciate the opportunity to appear before you today. My 
colleagues and I welcome the opportunity to respond to your questions.

                                 ______
                                 
   Responses by Richard Meserve to Additional Questions from Senator 
                                 Inhofe

    Question 1. What commitment has the NRC made to new reactor 
licensing? What are the challenges faced by the NRC, and what is being 
done to address those challenges in order to ensure a successful 
program?
    Response. The NRC has made a substantial commitment to new reactor 
licensing. In response to increased industry interest in the possible 
of deployment of new nuclear plants, the NRC assessed its technical, 
licensing, and inspection capabilities, and identified enhancements to 
support new reactor licensing. The results of this assessment are 
contained in SECY-01-0188, ``Future Licensing and Inspection Readiness 
Assessment (FLIRA),'' dated October 12, 2001. To implement 
recommendations developed as a part of FLIRA, the NRC has provided 
resources to the Office of Nuclear Reactor Regulation (NRR) to perform 
new reactor licensing work and has created the New Reactor Licensing 
Project Office (NRLPO) in NRR to serve as the coordinating organization 
for new reactor licensing issues. In addition, the Office of Nuclear 
Regulatory Research (RES) has focused resources on the early 
identification of potentially important safety issues, and associated 
development of the technical basis for resolution of identified issues. 
In addition to providing this support to the new reactor licensing 
work, RES is leading NRC's effort for the pre-application review of 
non-light-water reactor (non-LWR) designs, such as General Atomic's 
high-temperature gas-cooled (HTGR) Gas Turbine-Modular Helium Reactor 
(GT-MHR) design. Non-LWR HTGR designs present new technical issues and 
challenges that are different from current generation commercial 
reactors, and will require an infrastructure of expertise, analytical 
tools and facilities to meet these new challenges. The NRC is also 
examining its licensing processes for new reactor design in 10 CFR Part 
52 to determine if changes can be made to increase the effectiveness 
and efficiency of those processes.
    The short-term challenge facing the NRC is resolving issues 
associated with the review of design certification applications, early 
site permit applications, and for making infrastructure improvements to 
ensure that tools, information, and regulatory processes are in place 
for the efficient, effective, and realistic review of new site and 
reactor applications. Particularly challenging are design concepts that 
are significantly different from current U.S. operating reactors. The 
staff is currently reviewing Westinghouse's AP1000 design certification 
application and has six other designs in various stages of pre-
application review. In addition, pre-application discussions are taking 
place in preparation for three early site permit (ESP) applications 
expected later this year. The NRC has also begun developing a 
construction inspection program for advanced reactors. The status of 
this work and its associated challenges are provided to the Commission 
and the public in the form of semi-annual updates to the FLIRA report 
mentioned above. The latest update, titled, ``Semiannual Update of the 
Status of New Reactor Licensing Activities,'' dated January 8, 2003, is 
publicly available at the following address: http://www.nrc.gov/
reading-rm/doc-collections/commission/secys/2003/secy2003-0005/2003-
0005scy.html.
    The fiscal year 2004 budget request currently provides for the 
resources to perform this work. However, it should be noted new reactor 
licensing work has been very difficult to budget because of the high 
uncertainty associated with some of the applications. Although the NRC 
certified three advanced reactor designs in the 1990's, the industry's 
interest in new plant deployment appeared to decline, and the NRC's 
effort similarly decreased. About 2 years ago, industry activities 
associated with design certifications and early site permits increased 
and the NRC initiated the activities described above. If industry's 
plans change drastically and more work is identified, the Commission 
would have difficulty accommodating this new work without a 
supplemental budget increase. This is because the requested budget for 
fiscal year 2004 does not have enough resources to allow funds to be 
redirected to support additional new reactor licensing work without 
impacting other high priority work such as security, license renewal 
and power uprates.
    The longer-term challenge is ensuring that the staff has the 
adequate skills to perform the reviews and inspections to support new 
reactor licensing. To address this challenge, NRC's Office of Human 
Resources has developed a plan of action for implementing a Strategic 
Workforce Planning process designed to maintain the NRC's core capacity 
and allow it to support new reactor licensing activities.

    Question 2. Could you tell us what has been done in the past year, 
and what is planned for the future, with regard to cask testing? There 
was recently a tunnel fire in Baltimore--and that has raised some 
concerns with the durability of spent fuel casks. What would have been 
the impact of the Baltimore tunnel fire on a cask?
    Response. Since 1999, the NRC has been conducting a Spent Fuel 
Transportation Package Performance Study, which among other things is 
planning full scale testing (both impact and fire tests), in order to 
demonstrate the predictive capability of computer models and the 
performance of currently licensed spent fuel cask designs. Physical 
tests are currently planned in the 2004-2005 timeframe. The staff 
recently issued NUREG-1768 ``United States Nuclear Regulatory 
Commission Package Performance Study Test Protocols,'' which outlines 
how the staff is proposing to test a selection of spent fuel 
transportation casks. Much of the supporting analyses and development 
of the protocols report occurred in the past year. The staff is seeking 
public comments of the test protocols until May 30, 2003.
    NRC certification requirements for transportation cask designs (10 
CFR Part 71) include an evaluation of cask response to a hypothetical 
fire accident. Separately, the NRC, working with the National 
Transportation Safety Board and the National Institutes of Sciences and 
Technology, has completed an extensive assessment of the fire that 
occurred in the Howard Street tunnel (the Baltimore Tunnel Fire).
    The fire conditions were analytically imposed on a currently 
licensed spent fuel transportation cask. This assessment evaluated the 
response of a transportation cask to that thermal environment inside 
the tunnel. Staff provided their evaluation of a hypothetical event 
involving a spent fuel transportation cask in SECY-03-0002, dated 
January 6, 2003. The staff concluded that there would have been no 
failure of the structural components of the transport cask, no failure 
of the canister containing the spent fuel inside the transportation 
cask, and no release of radioactive materials from this analyzed event.

    Question 3. I know that much is being done to ensure that a Davis-
Besse type of situation doesn't occur again--i.e., reactor heads. But 
what is the NRC doing to address other ``passive'' areas in order to 
avoid, not necessarily a repeat of Davis-Besse, but a similar, 
unacceptable situation from occurring? What sort of changes in 
oversight is the NRC considering with regard to those ``passive'' 
areas?
    Response. In March 2002, the NRC issued Bulletin 2002-01, ``Reactor 
Pressure Vessel Head Degradation and Reactor Coolant Pressure Boundary 
Integrity.'' With the then-newly discovered severe boric acid corrosion 
of the Davis-Besse head, the purpose of this bulletin was to obtain 
information related to the integrity of the reactor coolant pressure 
boundary including the reactor pressure vessel head and the extent to 
which inspection programs for boric acid corrosion satisfy applicable 
regulatory requirements. The bulletin notes that ``this information 
will also be used by the NRC staff to determine the need for, and to 
guide the development of, additional regulatory actions to address 
degradation of the reactor pressure vessel head and/or other portions 
of the reactor coolant pressure boundary. Such regulatory actions could 
include regulatory requirements for augmented inspection programs . . 
.'' Based, in part, on the review of the information provided under 
this bulletin, on February 11, 2003, the staff issued Orders to all 
licensees of pressurized water reactors establishing interim inspection 
requirements for reactor pressure vessel heads. The staff is continuing 
to study the need for additional regulatory requirements for 
inspections of other passive areas in the reactor coolant pressure 
boundary.
    Regarding changes in oversight being considered for other passive 
areas, the staff is developing inspection guidance that will provide 
for timely, periodic inspection of plant boric acid corrosion control 
(BACC) programs. This task will take into account any new BACC 
inspection requirements that the staff may develop and is scheduled to 
be completed early in 2004.
    In internalizing lessons learned from Davis-Besse, the staff will 
pursue improvements to requirements pertaining to reactor coolant 
system leakage such that licensees properly discriminate between 
unidentified and identified leakage, and that better on-line enhanced 
leakage detection systems may be installed to detect leakage rates 
significantly less than one gpm. The staff will also develop inspection 
guidance that includes action levels to trigger increasing levels of 
NRC interaction with licensees to correspond to increasing levels of 
RCS unidentified leakage.

    Question 4. Chairman Meserve noted that the NRC has been working on 
the design basis threat (DBT) in consultation with the Department of 
Homeland Security, the Central Intelligence Agency and other Federal 
entities. Could you please describe what is involved in that 
consultation and what role these agencies are playing in the review of 
the design basis threat?
    Response. The NRC reviewed the DBTs in the context of the Agency's 
comprehensive re-evaluation of its safeguards and security programs. 
This review included significant input from the Intelligence Community, 
the Departments of Defense, Energy, and Homeland Security, the Federal 
Bureau of Investigation, other Federal agencies, and State officials. 
We rely upon the Intelligence Community and other Federal agencies to 
provide information on the targets, tactics, training, and capabilities 
of terrorists and other adversaries who may pose a threat to nuclear 
facilities and activities. They also describe the domestic and 
international threat environment. NRC then determines the subset of the 
domestic threat against which NRC operating power reactor licensees and 
Category I fuel cycle facility licensees should have primary 
responsibility to defend. In making this determination, NRC assesses 
the limits on the adversary characteristics against which a private 
sector guard force can reasonably be expected to defend. In early 
January 2003, NRC sent a staff draft of the DBT attributes to these 
Federal agencies as well as authorized State officials, and met with 
them to discuss their comments on the draft attributes. The Commission 
issued Orders on April 29, 2003, revising the DBT both for nuclear 
power plants and for Category I fuel cycle facilities.

    Question 5(a). The President's Budget for fiscal year 2004 includes 
a proposal to extend the NRC user fee at 90 percent of the NRC's 
overall budget. As you may know, this committee considered and passed 
the initial legislation that has led to a gradual reduction of the user 
fee from 100 percent to 90 percent. At the time that legislation was 
being considered, the NRC used data to show that approximately 
licensees directly benefited from 90 percent of the NRC's budget which 
was the basis for that legislation. Has the NRC conducted a similar 
analysis this year to determine the cost of ``indirect'' services that 
the NRC provides? Can the NRC provide such information to the 
committee?
    Response. Yes. This year, NRC has estimated the cost of 
``indirect'' services that were included in the analysis based on the 
90 percent recovery rate. Examples of activities included in the 
estimate were international activities, Agreement State oversight, and 
fee exemptions for nonprofit educational institutions. The estimate for 
fiscal year 2003 is $55.1 million, which is approximately 10 percent of 
the NRC's fiscal year 2003 total budget authority less funding from the 
Nuclear Waste Fund.
    The analysis supporting the 90 percent recovery rate was completed 
prior to the events of September 11th, which ultimately resulted in the 
NRC funding homeland security activities. As discussed in our answer to 
the question concerning fee recovery for homeland security funding, we 
believe there are activities associated with homeland security that may 
be of ``indirect'' benefit to NRC licensees and, therefore, should be 
funded off the fee base for fairness and equity reasons similar to 
those identified in the previously referenced analysis.

    Question 5(b). The President's Budget for fiscal year 2004 includes 
a proposal to extend the NRC user fee at 90 percent of the NRC's 
overall budget. As you may know, this committee considered and passed 
the initial legislation that has led to a gradual reduction of the user 
fee from 100 percent to 90 percent. At the time that legislation was 
being considered, the NRC used data to show that approximately 
licensees directly benefited from 90 percent of the NRC's budget which 
was the basis for that legislation. Does the NRC believe that 
additional security-related costs should be added to the fee base?
    Response. The Commission does not support additional homeland 
security-related costs being included in the fee base. Subsequent to 
the events of September 11th, the NRC has received additional funding 
for homeland security-related activities from two different sources. 
For fiscal year 2002, the NRC homeland security activities were funded 
from the General Fund of the U.S. Treasury. That is, the funds were not 
added to the fee base. The President's fiscal year 2003 budget proposed 
that NRC's additional security-related costs continue to be financed 
from the General Fund, as they were in fiscal year 2002. The Congress 
did not adopt this proposal in its fiscal year 2003 appropriations and 
funded NRC's homeland security activities from the fee base. The 
President's fiscal year 2004 budget includes the NRC costs for homeland 
security in the fee base, consistent with the final fiscal year 2003 
appropriations.
    As you stated in your question, the President's Budget for fiscal 
year 2004 includes a proposal to extend NRC user fee at 90 percent of 
the NRC's overall budget. As indicated in my earlier response, the 
resulting 10 percent of the fee base will only cover the costs of the 
pre-September 11th activities that cause fairness and equity concerns. 
We believe there are homeland security activities that cause fairness 
and equity concerns similar to those that were addressed in the 
previous 10 percent. Thus, these costs should not be added to the fee 
base. To accomplish this, the NRC user fees need to be reduced beyond 
the proposed 90 percent of NRC's overall budget.
    An example of the homeland security activities that cause fairness 
and equity concerns is our efforts to improve control and 
accountability of radioactive sources. These activities are designed to 
prevent the potential diversion and misuse of radioactive sources in 
radiological dispersal devices (RDD) and, therefore, enhance national 
security by safeguarding the entire citizenry of the United States. 
NRC's safeguards and security activities for RDDs will also support 
Agreement States and international efforts, similar to certain safety 
activities that are already excluded from fees as a result of the 
previous legislation.

                                 ______
                                 
       Responses by Richard Meserve to Additional questions from 
                            Senator Jeffords

    Question 1. Commissioner Merrifield testified that the Commission 
has a design basis threat out for interagency review, and that the 
Commission is currently receiving comments and expects to have 
``completed that work by the end of March.'' Does this mean the 
Commission expects to have comments back by the end of March, or that 
the revision of the design basis threat will be completed by the end of 
March?
    Response. On April 29, 2003, the Commission issued Orders revising 
the design basis threat (DBT) both for nuclear power plants and for 
Category I fuel cycle facilities; the attached press releases describe 
these actions.

                                 ______
                                 
   U.S. Nuclear Regulatory Commission, NRC Press Release No. 03-052, 
                             April 29, 2003

                                NRC News

 NRC APPROVES CHANGES TO THE DESIGN BASIS THREAT AND ISSUES ORDER FOR 
                    CATEGORY 1 FUEL CYCLE FACILITIES

    The Nuclear Regulatory Commission, after extensive deliberation and 
interaction with stakeholders, has approved changes to the design basis 
threat (DBT) for two category 1 fuel cycle facilities in Virginia and 
Tennessee that possess enriched uranium used in nuclear reactors. The 
changes will be issued by an Order amending the design basis threat for 
theft or diversion of strategic quantities of special nuclear material.
    The Order, which is being issued today, will be effective 
immediately but allows a transition period for full implementation. 
With this action completed, the Commission expects that there will be a 
period of regulatory stability during which the two licensees can 
consolidate this and previously ordered security enhancements.
    The details of the design basis threat for theft or diversion are 
confidential national security information and will not be released to 
the public. Today's Order builds on the changes made by the 
Commission's August 21, 2002 Order which made interim security 
enhancements at these two facilities. The DBT was arrived at after 
discussions with cleared stakeholders from other Federal agencies, the 
two State governments and the two licensees.
    Under NRC regulations, category 1 fuel cycle facility licensees 
must ensure that the physical protection plan for each site is designed 
and implemented to provide high assurance in defending against the DBT 
to ensure adequate protection of public health and safety and common 
defense and security. Changes in those plans will now be made and 
submitted to NRC for approval.
    ``With the completion of this Order,'' Chairman Nils J. Diaz said, 
``the public should be reassured that the nation's category 1 fuel 
facilities are well-secured against potential threats. The NRC intends 
to continue working closely with the Department of Homeland Security 
and other Federal agencies, as well as with State and local law 
enforcement and emergency planning officials to ensure an overall 
integrated approach to the security of these critical facilities.''

                                 ______
                                 
   U.S. Nuclear Regulatory Commission, NRC Press Release No. 03-053, 
                             April 29, 2003

                                NRC News
 NRC APPROVES CHANGES TO THE DESIGN BASIS THREAT AND ISSUES ORDERS FOR 
            NUCLEAR POWER PLANTS TO FURTHER ENHANCE SECURITY

    The Nuclear Regulatory Commission, after extensive deliberation and 
interaction with stakeholders, has approved changes to the design basis 
threat (DBT). The Commission believes that the DBT represents the 
largest reasonable threat against which a regulated private guard force 
should be expected to defend under existing law. These changes will be 
issued by Order.
    In addition, the Commission has approved the issuance of two other 
Orders to nuclear plants regarding work hours, training, and 
qualification requirements for security personnel to further enhance 
protection of public health and safety, as well as the common defense 
and security. The three Orders will be issued to all 103 operating 
commercial nuclear power plants.
    The three Orders, which are being issued today, will be effective 
immediately, but allow transition periods for full implementation. With 
these actions, the Commission expects that there will be a period of 
regulatory stability during which operating commercial plant licensees 
will be able to consolidate these and previously ordered security 
enhancements.
    These Orders, in combination with the recently issued Order in the 
area of access authorization, enhance the already strong defense 
capability at these sites using three interdependent elements directed 
to best protect the public, with the appropriate resources placed at 
the right places. These elements are:
    the revised Design Basis Threat and associated defensive 
capabilities derived from previous measures that the Commission 
directed; tighter work hour control and more robust training 
requirements for security personnel, to increase their capability to 
respond to threats; and enhanced access authorization controls to 
ensure all plant personnel with access to critical areas have had the 
most rigorous background checks permitted by law.
    The Order that imposes revisions to the Design Basis Threat 
requires power plants to implement additional protective actions to 
protect against sabotage by terrorists and other adversaries. The 
details of the design basis threat are safeguards information pursuant 
to Section 147 of the Atomic Energy Act and will not be released to the 
public. This Order builds on the changes made by the Commission's 
February 25, 2002 Order. The Commission believes that this DBT 
represents the largest reasonable threat against which a regulated 
private security force should be expected to defend under existing law. 
It was arrived at after extensive deliberation and interaction with 
cleared stakeholders from other Federal agencies, State governments and 
industry.
    Under NRC regulations, power reactor licensees must ensure that the 
physical protection plan for each site is designed and implemented to 
provide high assurance in defending against the DBT to ensure adequate 
protection of public health and safety and common defense and security. 
Extensive changes in those physical protection plans will now be made 
and submitted to NRC for approval.
    The second Order describes additional measures related to security 
force personnel fitness for duty and security force work hours. It is 
to ensure that excessive work hours do not challenge the ability of 
nuclear power plant security forces to remain vigilant and effectively 
perform their duties in protecting the plants. However, the Order does 
include provisions to allow increases in work hours under certain 
conditions, once specific requirements are met. The NRC developed this 
unclassified Order through a public process. The NRC carefully 
considered comments from power reactor licensees, security force 
personnel, public citizen groups and other agencies in reaching its 
final decision. The Order will be publicly available on NRC's website 
at: http://www.nrc.gov.
    The third Order describes additional requirements related to the 
development and application of an enhanced training and qualification 
program for armed security personnel at power reactor facilities. These 
additional measures include security drills and exercises appropriate 
for the protective strategies and capabilities required to protect the 
nuclear power plants against sabotage by an assaulting force. This 
Order requires more frequent firearms training and qualification under 
a broader range of conditions consistent with site-specific protective 
strategies. The details of the enhanced training requirements are 
safeguards information, and will not be released to the public. As with 
the DBT Order, the Commission solicited comments on a draft training 
Order from cleared stakeholders, including security personnel and took 
those comments under consideration in reaching its final decision.
    ``With the completion of these complementary Orders,'' Chairman 
Nils J. Diaz said, ``the public should be reassured that the nation's 
nuclear power plants are well-secured against potential threats. The 
NRC intends to continue working closely with the Department of Homeland 
Security and other Federal agencies, as well as with State and local 
law enforcement and emergency planning officials to ensure an overall 
integrated approach to the security of these critical facilities.''
                                 ______
                                 
    Question 2. Commissioner Merrifield testified that the Commission 
has a design basis threat out for interagency review, and that the 
Commission is currently receiving comments and expects to have 
``completed that work by the end of March.'' What is the nature of the 
document NRC has out for agency review? Is it an advanced notice of 
proposed rulemaking? Is it a draft proposed rule?
    Response. Although the DBTs are generally described in 10 CFR 73.1, 
the specifics of the DBTs which are most important in the review 
process are not described in the regulations due to the classified or 
sensitive unclassified information involved. The specific information 
regarding adversary characteristics of the DBT for radiological 
sabotage--such as the size, capability, and weaponry of the attacking 
force--is classified as Safeguards Information under Section 147 of the 
Atomic Energy Act of 1954, as amended. The specific information 
regarding adversary characteristics of the DBT for theft or diversion 
of formula quantities of strategic special nuclear material is 
confidential national security information. The NRC staff sent a draft 
set of these adversary attributes to authorized stakeholders on January 
2, 2003, in the form of a letter. The NRC focused its effort on the 
specific adversary attributes and would not put those in the regulation 
because of their sensitive nature. The Commission issued Orders 
revising the DBT both for nuclear power plants and for Category I fuel 
cycle facilities on April 29, 2003, to ensure that necessary additional 
measures are implemented in the near future. In the longer term, the 
Commission intends to proceed with rulemaking, as appropriate.

    Question 3. Commissioner Merrifield testified that the Commission 
has a design basis threat out for interagency review, and that the 
Commission is currently receiving comments and expects to have 
``completed that work by the end of March.'' Please identify all 
agencies and persons to whom the Commission has provided this document 
that is currently out for agency review?
    Response. The staff transmitted the January 2 , 2003 letters to the 
Central Intelligence Agency, Defense Intelligence Agency, Department of 
Homeland Security, the Federal Bureau of Investigation, and Departments 
of Energy, Defense, and State and the U.S. Coast Guard, to licensees 
that operate nuclear power reactors and Category I fuel cycle 
facilities, and to officials in States where these nuclear facilities 
are located. We have also provided or discussed the attributes with 
staff from congressional oversight committees, Homeland Security 
Council, Duke Cogema Stone and Webster (applicants for Mixed Oxide fuel 
fabrication facility) and Westinghouse (vendor for new reactor design 
review). On April 29, 2003, the Commission issued separate Orders 
revising the DBT for both nuclear power reactors and for Category I 
fuel cycle facilities.

    Question 4. Does the NRC intend to revise its design basis threat 
regulations, and if so, when does it anticipate completing that 
revision?
    Response. Yes. The Commission issued Orders revising the DBT both 
for nuclear power plants and for Category I fuel cycle facilities on 
April 29, 2003. Rulemakings to modify unclassified DBT descriptions in 
10 CFR Part 73.1 will follow, as appropriate, but would not discuss any 
of the detailed adversary characteristics contained in the DBTs.

    Question 5. Commissioner Diaz testified as follows: ``In reality, 
we do have a de facto new design basis threat that we established a 
year ago. So although it was a DBT, the security requirements are for a 
much larger DBT than the older one. So a de facto DBT has existed for 
almost a year.'' Please explain the nature of this new design basis 
threat. Is it consistent with the Commission's existing design basis 
threat regulations? If not, please explain what the ``new design basis 
threat'' is. Please also explain how its implementation is consistent 
with the NRC rules and the requirements of the Administrative 
Procedures Act.
    Response. The Commission issued Orders on April 29, 2003, revising 
the design basis threats (DBT) both for nuclear power plants and for 
Category I fuel cycle facilities. Chairman Diaz' comment referred to 
the fact that the NRC issued Orders on February 25, 2002, to implement 
interim compensatory measures (ICMs) to provide protection against an 
adversary force and characteristics exceeding the DBT in place prior to 
September 11. The ICMs identified protective measures to be implemented 
prior to the Agency formally redefining the DBT because we had not 
established the entire set of parameters needed for long term 
decisionmaking and there was an urgent need for heightened security, 
with uniform and enforceable requirements. The details and attributes 
of a postulated threat were not provided, yet the security requirements 
established significantly enhanced defensive capabilities to match new 
threat conditions.
    Although the approximate size and attributes of the threat were not 
formally described in our Orders, the licensee actions that we required 
were based on our preliminary assessment of the new threat ``licensees 
must defend their facilities against.'' The DBT in existence before 
April 29 combined with the ``size and attributes of the threat'' 
implied by the new compensatory measures could be considered to have 
established a defacto-DBT. The defacto interim DBT for power reactors 
was used since last July in the enhanced adversary characteristics used 
in the table-top security exercises which resumed in July 2002 and in 
the force-on-force security exercises which resumed in February 2003.
    The Commission established revised DBTs with its Orders of April 
29, 2003, requiring licensees to revise their physical security and 
safeguards contingency plans to comply with the revised DBT defined in 
the Order. The issuance of Orders is authorized by the Commission's 
broad authority in the Atomic Energy Act for the protection of the 
public health and safety and the common defense and security, as well 
as by the Commission's implementing regulations. These Orders comply 
with all applicable provisions of the Administrative Procedure Act, 
including providing the opportunity to request a hearing. However, the 
specific details of the design basis threat for radiological sabotage 
are Safeguards Information and will not be released to the public.

    Question 6. Chairman Meserve testified that the NRC has a task 
force that is developing guidance on how to decide whether material 
should be withheld from public disclosure. Please provide information 
as to any guidelines or criteria this task force has developed.
    Response. Two days after the terrorist attacks, the Defense 
Department requested that NRC shut down its web site because they 
believed it contained sensitive information that could be helpful to 
terrorists. For several days, our web site only made limited, basic 
information available on employment, public meetings, news releases and 
links to our electronic document system. We recognized our web site had 
to be restored quickly, or public confidence in our Agency could be 
negatively impacted. However, we also needed to strike a balance 
between the public's right to know and the need to protect sensitive 
information. We convened a Task Force made up of representatives from 
our program offices to develop criteria and guidance for the staff so 
that they could make informed decisions about the specific types of 
information that could be released to the public. Coincidentally, at 
the time of the terrorist attacks, we were undertaking a major re-
design of our web site. The new site was designed to improve the 
public's access to information, make navigation easier, and give 
greater visibility to frequently accessed information. General 
information that was not considered sensitive was incrementally 
restored to our web site under the new design. After several months of 
deliberation, the Task Force recommended to the Commission that certain 
criteria should be applied when making a determination about the 
availability of certain documents. Guidance was issued to the staff in 
June 2002, to assist them in making decisions on when to withhold 
certain documents from the public, including posting them to the web 
site or entering them into our ADAMS public library. The general thrust 
of the criteria was that information should be withheld only if its 
release could provide a clear and significant benefit to an adversary 
in a potential attack. The scope of the criteria was limited to 
documents that will be generated in the future, and not on existing 
documents that could not be retrieved because they were housed in 
locations beyond our control. The guidance suggested withholding plant-
specific information such as site-specific security measures, access 
controls, construction details, or information useful to breach key 
barriers. The Task Force remains available for specific issues that may 
arise from the guidance issued to the staff.

    Question 7. Will these general criteria or guidance be made 
available to the public? If so, will NRC issue a regulation? If not a 
regulation, what other form will this public release take? If this 
general guidance will not be provided to the public, please explain why 
not.
    Response. The criteria have been made available to the public 
through the voting record on COMSECY-02-0015. We are not planning to 
issue regulations to our licensees regarding these criteria. However, 
we are preparing a Regulatory Issues Summary, which is a guidance 
document for licensees, so they can protect certain information when 
transmitted to the NRC. Further, Section 147 of the Atomic Energy Act 
provides the statutory basis for Safeguards Information, a category of 
sensitive unclassified information that is protected from public 
disclosure.

    Question 8. Is the NRC also ensuring that potentially affected 
private citizens, or non-governmental groups whose mission it is to 
address safety or security issues at commercial nuclear power plants, 
will, if they obtain appropriate clearances, have input into NRC 
decisionmaking, including changes to the design basis threat? If so, 
how is NRC accomplishing this? If not, why is NRC not doing this?
    Response. The NRC is very interested in the views of all its 
stakeholders. This was true before September 11, 2001, as evidenced by 
the long history of public meetings and extensive information available 
to the public, and it remains true today. Since September 11, 2001, 
however, control of sensitive information has been particularly 
important and protecting sensitive information has been a major concern 
for all government agencies.
    Prior to gaining access to sensitive information, NRC needs to 
determine that an individual has a ``need to know'' the information and 
the necessary background check or clearance. Even if a person has the 
appropriate clearance, they may not have a ``need to know''. NRC 
determines ``need to know'' in 10CFR Part 25 as a ``determination made 
by an authorized holder of classified information that a prospective 
recipient requires access to a specific classified information to 
perform or assist in a lawful and authorized governmental function 
under cognizance of the Commission.''
    This new sensitivity to access to information has reduced the 
opportunity for the public to access as much information as in the 
past. However, for adjudicatory proceedings, the Commission's rules of 
practice specify how interested parties may obtain access to restricted 
data and national security information. There have been limited 
situations in specific hearings where appropriately cleared individuals 
representing private citizens or non-governmental organizations have 
been granted access, with restrictions, to specific sensitive 
information. In an ongoing proceeding concerning the application to 
construct a Mixed Oxide (MOx) Facility at Savannah River, the NRC's 
Licensing Board found recently that the intervener had made a 
sufficient showing for its expert witness and counsel of record to make 
specific applications for security clearances.
    The NRC has sought other means of maintaining a dialog with the 
non-industry stakeholders. One way this is done is to invite 
representatives of State and local government agencies, including local 
law enforcement officials, to attend meetings on security issues and 
provide their perspective.

                               __________
     Responses by Richard A. Meserve to Additional Questions from 
                           Senator Voinovich

    Question 1. One of the most disturbing pieces of this whole Davis-
Besse incident is that as the investigation progresses it continues to 
unravel surprises. This latest development that I read about in the 
newspaper on the emergency cooling system is most troubling. Now--have 
you found out everything that happened at Davis-Besse? Can you assure 
me that there will be no more surprises here?
    Response. While the majority of problem discovery activities are 
complete at Davis-Besse, design review activities are ongoing which may 
reveal additional deficiencies requiring correction.
    In response to the discovery of the reactor head degradation at 
Davis-Besse in March 2002, the NRC established a special Oversight 
Panel to guide the NRC's response to the situation and provide 
oversight for Davis-Besse's recovery efforts. The Panel, led by senior 
managers from the Region III and Headquarters offices, is ensuring that 
FirstEnergy Nuclear Operating Company identifies all causal factors 
contributing to the head degradation, bounds the scope of the impact of 
those causal factors, and implements lasting corrective action before 
any restart and future operation of the reactor.
    In August 2002, the Oversight Panel issued its first Checklist of 
required actions to be accomplished prior to restart based on the 
inspection findings and root cause analysis issues identified at that 
time. Since then, we have revised the Checklist to include new areas of 
concern such as the radiological protection program and containment 
sump modifications. The Restart Checklist is used to provide a concise 
summary of the status of major activities necessary for closeout before 
the Panel could consider a request for restart of the facility. The 
checklist is updated as significant new issues emerge.
    In May 2002, the licensee submitted its first Return-to-Service 
Plan, which identified key improvements necessary for restart. This 
plan considered NRC-identified input as well as issues that FirstEnergy 
determined were necessary in order for the plant to run reliably in the 
future. Actions included replacement of the reactor vessel head, 
correcting degraded conditions within the containment due to boric acid 
corrosion, verifying the design of key safety systems, improving safety 
programs and improving the management and human performance of the site 
workforce. This area, which involves safety culture aspects of the 
organization, will require long term continued emphasis to ensure 
lasting corrective action. The NRC Restart Checklist and FirstEnergy 
Return-to-Service Plan are aligned though the Oversight Panel 
activities.
    The NRC is also addressing the issue of potential wrongdoing on the 
part of FirstEnergy managers and staff. The NRC Office of 
Investigations has an ongoing investigation into matters at Davis-
Besse. The Oversight Panel is closely monitoring the investigative 
activities and will ensure appropriate actions are completed before 
restart is considered.

    Question 2. I believe that you have copies of several pictures that 
were distributed during the hearing of the corrosion on the reactor 
heads at Davis-Besse. It is my understanding that these pictures were 
taken as part of an inspection of the facility in April 2000. I further 
understand that these photographs were included in a report that 
FirstEnergy filed with NRC in 2000, that the NRC did not review that 
file, and that the NRC regularly fails to review these types of 
reports. I also understand that the corrosion present in these pictures 
was present and visible during multiple inspections as far back as 1996 
and that it was noted in multiple reports as far back as 1996. If this 
is true, then I think that this Committee may have to take a very, very 
serious look at some fundamental overhaul of the NRC's day-to-day 
oversight at these nuclear facilities. Is it true that these pictures 
were contained in a report submitted to the NRC that was not even 
looked at until after the reactor was shut down?
    Response. The photograph of the reactor vessel head and service 
structure depicting corrosion trails on the reactor head streaming from 
openings in the base of the service structure was not submitted to the 
NRC.
    A power reactor licensee normally generates several thousand 
internal ``condition reports'' each year. A condition report describes 
a deficiency in plant equipment or programs and is used to track 
corrective actions and ensure adequate resolution of the problem. One 
condition report generated in April 2000 contained as an attachment the 
referenced photograph. The routine NRC inspection program examines a 
sample of onsite activities including condition reports. That specific 
condition report existed in the files at Davis-Besse, but was not 
selected as part of a routine baseline inspection sample.
    An allegation has been made that the picture was shown to an NRC 
inspector in 2000. This is a matter that is under investigation by the 
Office of the Inspector General.

    Question 3. What have you done to sanction the people involved in 
the day-to-day oversight of Davis-Besse as a result of this (vessel 
head corrosion) discovery?
    Response. The NRC views the problem that arose at Davis-Besse as an 
institutional failure and not a failure of the particular individuals. 
There has been no sanction of any NRC individual as a result of the 
reactor pressure vessel head degradation at Davis-Besse. We are taking 
action to correct this institutional failure.

    Question 4. What changes are you making or contemplating to the 
overall day-to-day oversight at nuclear power plants (as a result of 
Davis-Besse)?
    Response. The Davis-Besse Lessons Learned Task Force identified a 
number of program and implementation issues that may have contributed 
to the inability of the Agency to detect the issues at Davis-Besse in a 
more timely manner. The Commission approved proceeding with the 
recommendations identified for action by senior NRC management. The 
Task Force's recommendations are currently being evaluated and 
implemented; changes to the Reactor Oversight Process (ROP) will be 
made as appropriate. For example, the NRC plans to evaluate how to 
improve the use of industry operating experience in the ROP, and will 
evaluate the need for additional or improved barrier integrity 
performance indicators. An evaluation will also be performed to 
determine whether a more direct method is needed to assess and react to 
performance weaknesses in the cross-cutting areas of human performance, 
problem identification and resolution, and safety conscious work 
environment. The results of this evaluation will be communicated to the 
Commission in the staff's semi-annual status reports on the Davis-Besse 
Lessons Learned Action Plans, as well as annual ROP self-assessment 
report for Calendar Year 2003.

    Question 5. The Lessons Learned Report cites significant problems 
with the safety culture at Davis-Besse. A report written by the 
Institute of Nuclear Power Operations states--and I am going to quote 
from the report here--``A major contributor to this event was shift in 
the focus at all levels of the organization from implementing high 
standards to justifying minimum standards. This reduction in standards 
resulted from excessive focus on meeting short-term production goals, a 
lack of management oversight, symptom-based problem-solving, 
justification of plant problems, isolationism, ineffective use of 
operating experience, and a lack of sensitivity to nuclear safety. The 
lessons learned at Davis-Besse are universal in nature and should be 
used by all nuclear stations.'' A report by the NRC's Inspector General 
showed that only 53 percent of NRC employees feel that it is ``safe to 
speak up in the NRC'' about safety issues. That report also states that 
almost one-fourth of NRC employees do not believe that ``the NRC's 
commitment to public safety is apparent in what we do on a day-to-day 
basis.'' These statistics are frankly unacceptable. As I mentioned in 
my opening remarks, the No. 1 priority for the NRC needs to be the 
safety of the public. What is the Commission doing to change things and 
instill a more appropriate level of safety culture in both the NRC's 
operations and in the facilities that you regulate?
    Response. Regarding safety culture in the NRC's operations, the NRC 
Executive Director for Operations established a Task Group to review 
the Inspector General's 2002 Safety Culture and Climate survey results, 
identify the key areas for improvement, and identify potential options 
for improvement. The Task Group is working to develop a better 
understanding of the survey results including the factors that 
influenced them. This will allow the Agency to identify and implement 
improvements in an effective and efficient manner, while continuing to 
build on those improvements already underway. We are committed to 
assuring a culture at the NRC where employees feel free to speak about 
a variety of topics, and where differing opinions are not only welcome, 
but are encouraged.
    The current policy of reviewing safety culture is specified in the 
staff requirements memorandum (SRM) to SECY-98-059, ``Proposed Options 
for Assessing the Performance and Competency of Licensee Management.'' 
The SRM approved current staff practice of inferring licensee 
management performance from performance based inspections, routine 
assessments, and event follow-up. In addition, the SRM to SECY-98-176, 
``Proposed Options for Assessing a Licensee's Safety Conscious Work 
Environment,'' approved the staff's assessment of the safety conscious 
work environment, part of safety culture, on a case-by-case basis while 
encouraging licensees to use third parties to survey their own safety 
conscious work environment. The SRM also allowed the staff to develop 
and implement additional guidance and training of inspectors in support 
of more complete and consistent program implementation. More recently, 
in the SRM to SECY-02-0166, the Commission unanimously reiterated its 
opposition to pursing rulemaking for oversight of a safety conscious 
work environment. The Commission believed that such a rule would be 
subjective in nature, difficult to inspect and enforce, would likely 
intrude on management prerogatives and might well cause a chilling 
effect on the most effective safety culture element--the commitment of 
management to a safety conscious work environment. In light of efforts 
by foreign regulators to measure and regulate safety culture, at the 
Commission's direction the staff is monitoring developments abroad so 
as to ensure that the Commission remains informed about these efforts 
and their effectiveness. In particular, because subjectivity is a 
principal concern of the Commission regarding the direct regulation of 
safety culture, the staff will monitor efforts to develop more 
objective measures that can serve as indicators of possible problems 
with safety culture.
    Finally, the Commission is supportive of the efforts of the 
Institute of Nuclear Power Operations (INPO) to address issues relating 
to safety culture through its monitoring of licensees.

    Question 6. The Lessons Learned Report--produced by an NRC Task 
Force--states that staffing and resources problems existed at Davis-
Besse. That report states that ``Regional staffing and resource issues 
challenged the NRC's ability to provide effective regulatory oversight 
of (Davis-Besse).'' The report goes on to list recommendations to 
address what looks like to me to be a human capital problem. How much 
of a role did NRC's human capital problems play in this incident, and 
what can be done to address it? Do you have enough people with the 
right skills to accomplish your mission?
    Response. Human capital problems were not a significant contributor 
to the failures of the NRC to discover the reactor head degradation 
earlier at Davis-Besse. Throughout this period, both resident inspector 
positions at Davis-Besse were staffed with the exception of 11 months 
(December 1998 to October 1999), when there was only one resident 
inspector assigned to the site. The inspection program consists of a 
baseline level of inspection effort plus a range of additional 
inspection effort to be expended based on the assessment of licensee 
performance. While the NRC accomplished all required inspections at 
Davis-Besse throughout this time period, the level of effort was lower 
than the average facility due to the Agency's perception of good 
licensee performance.
    As presented in the Lessons Learned Task Force report, there were 
four major areas requiring NRC improvement:
     Assessment of Stress Corrosion Cracking of Reactor 
Materials
     Assessment of Operating Experience, Integration of 
Operating Experience into Training and Review of Program Effectiveness 
Reviews
     Evaluation of Inspection, Assessment and Project 
Management Guidance
     Assessment of Barrier Integrity Requirements.
    In accordance with Lessons Learned Task Force Recommendation 
3.3.5(3), the NRC will monitor resident inspector staffing levels and 
develop human resource strategies to be more effective during inspector 
turnovers; specifically, the time between a resident inspector leaving 
a plant site and the arrival of the new inspector.
    All inspections to ensure the health and safety of the public at 
the U.S. nuclear power facilities continue to be accomplished. The NRC 
has undertaken aggressive action to maintain the high quality and 
capability of its workforce, including hiring experienced professionals 
and highly qualified entry level staff.

    Question 7. I am extremely concerned that in light of the situation 
at Davis-Besse and the Task Force's report, that the NRC's budget for 
fiscal year 2004 proposes to cut funding for inspections. This 
basically means that there will be less people our there doing what we 
need them to do--inspecting. Could you please comment on the rational 
behind this request?
    Response. The NRC budget for the entire Reactor Inspection and 
Performance Assessment program in fiscal year 2003 is $73,610,000, with 
$73,172,000 requested for fiscal year 2004, for a net decrease of 
$438,000. Although there was a net decrease in this budget area for 
fiscal year 2004, resources for the specific activities involved in the 
inspection and assessment of licensee performance were increased from 
fiscal year 2003. These increases were made to reflect several lessons 
learned and inspection program enhancements that were deemed to be 
appropriate based on the first couple of years of Reactor Oversight 
Process (ROP) implementation. However, in addition to providing the 
resources for the conduct of inspections, this budget area encompasses 
the many different work activities necessary to develop and maintain 
the inspection program. This includes, for example, program development 
and oversight by Headquarters staff and the time necessary for regional 
inspection staff to prepare for inspections and then document the 
results. With the ROP reaching its fourth year of implementation, 
program development costs have decreased as would be expected and 
certain efficiencies have been realized in many of these areas, 
resulting in less resources being required to support the inspection 
program. Overall, these reductions in the program support areas offset 
the increases in resources for conducting actual inspection and 
assessment, and resulted in the overall net decrease for this budget 
area. The result is that there will not be a negative impact on the 
number of inspectors performing the important mission of inspecting the 
nation's nuclear facilities.
    In addition, the fiscal year 2004 budget was prepared before the 
full extent of Davis-Besse lessons learned were known to the staff and 
could be reflected in the budget for inspection and assessment. The 
fiscal year 2004 budget has recently been reviewed by the staff with 
Davis-Besse lessons learned and inspection follow-up activities 
factored in. The staff expects that this will result in an increase in 
budgeted resources above what was initially requested for the Reactor 
Inspection and Performance Assessment program in fiscal year 2004.

    Question 8. As I stated in my opening statement at the hearing, 
this facility (Davis-Besse) needs to get back online, but in a manner 
that will absolutely protect the people of Ohio. Please comment on what 
the NRC has specifically done and will do to meet that objective.
    Response. The NRC clearly defined those actions necessary to be 
taken to ensure safe restart and operation of the Davis-Besse facility.
    Shortly after discovery of the reactor head degradation, the NRC 
issued a Confirmatory Action Letter documenting specific commitments 
including the commitment of FirstEnergy to obtain NRC approval prior to 
restart of Davis-Besse. On April 29, 2002, the NRC established a 
special Oversight Panel, led by senior managers from Region III and 
Headquarters, to coordinate and oversee NRC activities necessary to 
address repairs and performance deficiencies at the plant in order to 
assure that it can operate safely. The Oversight Panel established a 
Restart Checklist that contains those actions necessary to be resolved 
before restart of Davis-Besse would be considered. The Oversight Panel 
has been directing NRC activities to provide effective assessment of 
Davis-Besse recovery actions and regularly reports its progress 
publicly.
    The Oversight Panel will remain in place as long as necessary, 
typically 6-12 months following restart, to ensure that corrective 
actions are and continue to be effective. At the point in time that the 
Oversight Panel is satisfied that the corrective actions at Davis-Besse 
are lasting and that the routine reactor oversight program is 
sufficient to provide effective oversight, the Panel will recommend to 
NRC senior management that Panel activities be terminated.

    Question 9. The NRC asked for a significant increase in fiscal year 
2004 budget for homeland security. What does the NRC plan to do with 
this proposed funding increase?
    Response. NRC's homeland security resources increased by 
approximately $17.5 million in fiscal year 2004. This results from an 
increase of $27 million in expanded efforts for controlling high-risk 
radioactive sources, conducting more frequent force-on-force exercises, 
reviewing revised nuclear power plant security plans, conducting 
research on mitigation strategies for potential vulnerabilities, and 
developing and completing regulatory improvements associated with 
homeland security initiatives. These increases are offset by a 
reduction of approximately $9.5 million resulting from the completion 
of vulnerability assessments for storage and transportation activities, 
and completion of NRC security enhancements for the NRC buildings.
    The $27 million increase includes $11.6 million for enhancing the 
tracking and regulatory control of high-risk radioactive materials. 
This effort involves accountability of radioactive sources within the 
Nation's borders and the export and import of high-risk sources. The 
objectives are to prevent the potential use of high-risk radioactive 
sources in a radiological dispersal device and to increase safety and 
security by reducing the number of incidents involving inadequate 
control of high-risk sources both domestically and internationally. 
This will reduce the potential malevolent use of radiological material, 
which could result in significant public health and safety or 
environmental impacts. Resources for force-on-force exercises at NRC 
licensed facilities increased approximately $7.0 million. The NRC staff 
has started conducting force-on-force exercises, using enhanced threat 
capabilities, and plans to conduct these exercises at each nuclear 
power plant on a 3-year cycle compared to the previous 8-year cycle. 
Resources for conducting research on mitigation strategies for 
potential vulnerabilities increased approximately $6.0 million due 
primarily to risk-informed vulnerability assessments and mitigation 
analyses at nuclear power plants to various modes of potential attack, 
spent fuel pool analyses, and support for radiological dispersal device 
research. An increase of $2.4 million will be used to support necessary 
regulatory improvements related to homeland security initiatives, 
including rulemaking and guidance development. The staff will also 
require significant additional resources to review the revised security 
plans at all operating commercial reactor and Category I fuel cycle 
licensees, which will be submitted in fiscal year 2004 pursuant to 
Orders issued by the Commission on April 29, 2003.

    Question 10. As you know, the NRC was not moved into the Department 
of Homeland Security. How does the Commission intend to work with the 
newly created Department of Homeland Security? What steps are you 
currently taking in this regard?
    Response. The NRC has already established a cooperative working 
relationship with the Department of Homeland Security (DHS). We 
continue to make progress in enhancing coordination and collaboration 
with DHS and other agencies on matters of homeland security. The Office 
of Nuclear Security and Incident Response was formed in April 2002 to 
unite the Agency's safeguards and security functions with the incident 
response program. NRC has established a full-time liaison with the 
Department of Homeland Security (DHS), as well as strengthened existing 
coordination with other agencies and organizations, such as the 
Homeland Security Council, Federal Bureau of Investigation, and the 
Central Intelligence Agency. We provide Situation Reports (SITREPS) to 
DHS twice a day, promptly exchange sensitive event information with DHS 
as incidents occur, coordinate changes in threat levels, and hold 
frequent meetings with DHS to discuss policy issues and status of 
activities of mutual interest. In addition, NRC currently participates 
in numerous interagency working groups, that are hosted by or involve 
participation by DHS, such as the working group that conducted the 
operational plan for Operation Liberty Shield.

    Question 11. I have read in the newspapers over the last month that 
two nuclear plants, one in Tennessee and other in Texas, have also 
discovered coolant leaks that were causing corrosion. This seems to be 
an industry-wide problem. Can you tell me about the situation at these 
plants and what the NRC is doing to prevent anything like what happened 
as Davis-Besse from occurring anywhere else?
    Response. Both of the nuclear power facilities in Texas, Comanche 
Peak Unit 1, and the South Texas Project Units 1 and 2, have conducted 
visual inspections of their reactor vessel heads during their 
respective maintenance outages in Fall 2002 and early Spring 2003. 
Inspections revealed small reactor coolant leaks from the canopy seal 
welds associated with the control rod drive mechanisms. While not 
considered reactor pressure boundary leakage, these leaks sometimes 
result in the accumulation of boric acid on the reactor vessel heads. 
The licensees repaired the leaks and cleaned the boric acid deposits on 
the reactor vessel heads. Contrary to media reports of corrosion to the 
Comanche Peak Unit 1 vessel head, these leaks did not cause corrosion 
of either of the reactor vessel heads.
    The NRC resident inspection staffs at these facilities and others 
nationwide have increased their oversight of licensee inspections and 
have implemented NRC inspections pursuant to an Order that was issued 
to all pressurized water reactors that required more comprehensive and 
frequent vessel head inspections to better assure that the situation 
that occurred at Davis-Besse does not occur at these plants.
    In January 2003, the Tennessee Valley Authority (TVA), the licensee 
for Sequoyah Unit 2, identified an accumulation of boric acid deposits 
on insulation covering the reactor pressure vessel head (RPVH). These 
deposits were the result of a leaking pipe fitting connecting two 
sections of a reactor vessel instrument line that was disconnected and 
then later reconnected during the plant's May 2002 outage. Leakage from 
the fitting seeped through a seam in the insulation onto the RPVH. 
While cleaning the area of the leakage, the licensee observed minor 
corrosion on the RPVH and determined that the affected area was small. 
The measurements taken indicated that the corroded area was in the 
shape of a groove less than half an inch wide, about five inches long, 
and at most about one-eighth of an inch deep. The RPV head is at least 
six inches thick in this area.
    The NRC performed an onsite review of the corroded area and the 
piping fitting that had leaked, and reviewed the licensee's technical 
information and initial evaluations. Based on the cleaning of the 
corroded area, removal of the boric acid from the area, repair of the 
leaking pipe fitting, verification of no other leaking components onto 
the RPVH, and review of the technical information and initial 
evaluations, the NRC staff identified no immediate safety concerns.
    Subsequently, the NRC issued Information Notice 2003-02, ``Recent 
Experience with Reactor Coolant System Leakage and Boric Acid 
Corrosion,'' on January 16, 2003, to notify the nuclear operating plant 
industry of the potential of leakage from fittings disconnected and 
reconnected during reactor vessel head assembly and disassembly.
    In March 2003, during inspections required by an NRC Order issued 
to the industry on February 11, 2003, TVA identified boric acid 
deposits on the Sequoyah Unit 1 RPVH. The licensee conducted 
examinations to determine if RPVH nozzle cracks could have been the 
cause of this leakage. To date, the licensee has not confirmed any 
nozzle cracking and believes the source of the boric acid deposits was 
from leakage of control rod drive canopy seals, which was corrected 
years ago. After cleaning up the deposits, no corrosion of the RPV head 
was identified. Currently, the NRC staff is independently assessing the 
adequacy of the Sequoyah licensee's inspections and analysis.
    As mentioned previously, the NRC issued an Order amending the 
licenses of all pressurized water reactor facilities in February 2003. 
This Order requires inspections that are more reliable than the 
previously required visual inspections in determining the presence of 
reactor pressure vessel head cracking or leakage. As utilities look 
harder as a result of this Order, there may be more reported 
occurrences of discovered cracks or even minor leakage. Supplemental 
inspections performed in response to NRC Bulletins issued in 2002 
identified no significant findings of RPVH leakage. The intent of the 
increased vigilance in this area is to identify minor problems now so 
that they may be corrected. Longer-term rulemaking is currently planned 
to incorporate improved vessel head inspection requirements into the 
NRC's regulations.

    Question 12. The NRC has stated that it did not consider corrosion 
of the reactor head a threat prior to the discovery in March 2002 
because officials at the Davis-Besse facility informed them that the 
heads were regularly cleaned and inspected during the refueling 
shutdowns prior to the discovery. Obviously, this was not the case. 
What changes are the NRC making to ensure this never happens again?
    Response. To address the immediate concerns raised by the 
increasing discovery of problems with reactor pressure vessel heads 
(RPVHs) at pressurized water reactors (PWRs), the NRC issued a series 
of bulletins and other communications. The long-term resolution of this 
issue is expected to involve changes to the American Society of 
Mechanical Engineers Boiler and Pressure Vessel Code (ASME Code) and 
will involve changes to the NRC regulations in 10 CFR 50.55a, ``Codes 
and Standards.'' Although licensees' actions to date have provided 
reasonable assurance of adequate protection of public health and safety 
for the near-term operating cycles, the NRC deemed it appropriate to 
establish a clear regulatory framework pending the revision of 10 CFR 
50.55a. Therefore, the NRC issued order EA-03-009 on February 11, 2003, 
that imposes requirements for PWR licensees to inspect RPVHs and 
related penetration nozzles pending the revision of 10 CFR 50.55a. The 
NRC issued Temporary Instruction 2515/150 for inspectors to assess the 
adequacy of licensees' RPVH and vessel head penetration inspection 
activities.
    The NRC inspection program guidance will be revised to ensure more 
effective review and evaluation of licensee's programs for boric acid 
corrosion control (BACC). Staff will collect information available 
worldwide on boric acid corrosion of pressure boundary materials and 
operating experience feedback to date for developing the inspection 
guidance. The revised inspection guidance will provide guidance to 
determine the adequacy of BACC programs (timely and periodic inspection 
of PWR plant BACC programs, implementation effectiveness, ability to 
identify leakage, and adequacy of evaluation of leaks).

    Question 13. I understand that several contract workers at Davis-
Besse tested positive for radiation exposure when they reported to work 
at their next assigned nuclear plant last February (some contract 
employees travel from facility to facility to fulfill their contracts). 
I also understand that these employees did not test positive for 
radiation exposure when they left Davis-Besse. Has the NRC determined 
how these workers were exposed and how that exposure was not detected 
at Davis-Besse when they left the facility?
    Response. On February 20, 2002, several contract workers were both 
internally and externally contaminated with radioactive material while 
installing equipment inside the steam generators at Davis-Besse. The 
licensee specified radiological controls for the work which were based 
on historical data for the radiological conditions inside the steam 
generators. However, the radiological conditions were significantly 
different during February 2002. There were several indications that 
radiological conditions were more severe warranting additional 
precautions for worker safety. However, the licensee failed to 
adequately evaluate those indications prior to worker entries into the 
steam generators.
    NRC review of the circumstances surrounding the steam generator 
work revealed that Davis-Besse staff failed to adequately assess the 
radiological conditions in the workers' environment, failed to provide 
appropriate protection for those workers, failed to adequately monitor 
worker exposure to radiation and failed to prevent the release of 
minute radiological particles that the workers carried offsite. The 
workers were not overexposed and the offsite release of materials did 
not pose a health risk to the public.

    Question 14. This situation at Davis-Besse has provided plenty of 
ammunition to those who oppose nuclear energy. I agree with them that 
this is a serious matter, but I still believe that nuclear power is an 
important and necessary part of our energy future. What does the NRC 
plan to do to increase public confidence in the safety of nuclear 
energy following this event?
    Response. The NRC actively seeks, includes and values stakeholder 
input in key activities. Enhancing public confidence in the NRC as a 
strong and credible regulator is one of our four Performance Goals. 
Following the Davis-Besse event, the NRC responded to the vessel head 
degradation with a series of actions, including evaluating the event, 
forming a special oversight panel, and commissioning an independent 
Lessons Learned Task Force to assess its regulatory processes. Each of 
these actions was implemented with significant stakeholder input and 
communication.
    The Oversight Panel has established a Communications Plan and a 
Communications Team to ensure that the activities of the NRC and those 
of Davis-Besse are made known to interested members of the public. 
Examples of public access to information regarding Davis-Besse include 
a monthly newsletter and an extensive web site. The Panel has conducted 
over 40 public meetings. Typically there are more than one hundred 
individuals attending the meetings. Outside call-in telephone lines are 
arranged for some meetings and most meetings are transcribed, with the 
transcripts posted on the NRC web page. Extensive information about the 
Davis-Besse reactor vessel head damage and the ensuing activities is 
also available on the NRC web site. In addition, State of Ohio 
personnel regularly accompany NRC inspectors and the Ottawa County 
Administrator is a member of FirstEnergy's Restart Oversight Panel. The 
Commission met publically with FirstEnergy and the NRC staff to discuss 
the facility status, followed by a public forum with key interested 
stakeholders.
    The NRC's Lessons Learned Task Force conducted an independent 
evaluation of the NRC staff's regulatory processes related to assuring 
reactor vessel head integrity in order to identify and recommend areas 
of improvement applicable to the NRC and/or the industry. The scope of 
the task force effort included: reactor oversight process issues, 
regulatory process issues, research activities, applicable practices 
used in the international community, and the NRC's generic issue 
process. The Task Force invited input at public meetings on its charter 
and publicly presented its results. The Commission received the results 
of the Task Force efforts at a public meeting, followed by a public 
forum on the issues with key interested stakeholders, and directed the 
staff to proceed with implementing the recommendations identified for 
action by senior NRC management.
    The NRC has also initiated multiple activities at reactors similar 
in design to Davis-Besse to ensure that the issues that caused the 
problems at Davis-Besse were not occurring at other facilities. The 
development of these actions included public dialog and input from all 
concerned stakeholders. The NRC's public web site includes direct links 
to extensive information regarding the NRCs safety initiatives with 
these other reactors.
    The NRC has received positive comments regarding the amount of 
information provided to the public and the openness with which the NRC 
conducts its activities. Our redesigned web site is easier to navigate, 
provides more information, and is more user-friendly than before--
making it easy to access information regarding this and other safety 
issues.
    The NRC intends to continue placing a high priority on public 
involvement and will ensure that Davis-Besse can operate safely before 
the plant is permitted to restart.

    Question 15. Senator Voinovich would like information provided 
regarding the new reactor oversight process.
    Response. The current reactor oversight process for power reactors 
uses a variety of tools to monitor and evaluate the performance of 
commercial nuclear power plants. The process is designed to focus on 
those plant activities most important to safety.
    The NRC uses inspection findings together with objective 
performance indicators to assess plant performance. An ``action 
matrix'' provides consistent agency action based on licensee 
performance in seven cornerstones of safety: (1) initiating events, (2) 
mitigating systems, (3) integrity of barriers to release of 
radioactivity, (4) emergency preparedness, (5) occupational radiation 
safety, (6) public radiation safety, and (7) physical protection.
    The Performance Indicators and the assessment of inspection 
findings are posted to the NRC web site, using the color notation of 
their significance-green, white, yellow, or red. Green indicates that 
performance is acceptable while red represents unacceptable 
performance. The NRC addresses any significant performance issues, as 
necessary, and follows up any other performance issues until they are 
corrected.
    The results of reactor oversight are documented in inspection 
reports and performance indicators. Inspection reports, correspondence, 
and other information about the performance of reactor facilities are 
available to the public in the Agency's document management system 
(ADAMS). Inspection reports, issued on each inspection, are also 
available on the reactor oversight process web page.
    The NRC's Office of Public Affairs has issued NUREG-1649, ``Reactor 
Oversight Process,'' dated July 2000, to provide a plain English 
description of the ROP to our internal and external stakeholders. To 
view this publication go to: http://www.nrc.gov/reading-rm/doc-
collections/nuregs/staff/sr1649/r3/index.html.
    In addition, general information about the ROP can be found at 
NRC's public web page (www.NRC.gov). From the NRC home page, click on 
the task-bar tab for ``Nuclear Reactors.'' That will bring up a page 
with a light-blue ``Quick Links'' box on the right. Follow the 
``Reactor Oversight Process'' links to obtain specific information 
about the program.
    There are three primary pages that will provide you with different 
types of information that can be accessed by typing in addresses as 
follows:
    (1) For plant performance information and a high-level summary of 
the ROP, go to:
    http://www.nrc.gov/NRR/OVERSIGHT/ASSESS/index.html
    (2) The ROP Program Documents page provides a consolidated listing 
and access to specific program guidance for the key areas of the ROP, 
including performance indicators, inspection, and assessment. This page 
also provides links to the policy documents for the ROP, including the 
annual ROP self-assessment Commission papers.
    To access this page, go to:
    http://www.nrc.gov/reactors/operating/oversight/program-
documents.html
    (3) For a more detailed look at documents pertaining to the 
inspection of NRC-licensed activities, including the inspection 
procedures used by our inspectors in the field, go to the Inspection 
Manual at:
    http://www.nrc.gov/reading-rm/doc-collections/insp-manual/
    To download a copy of the attached NUREG-1649, go to:
    http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1649/
r3/sr1649r3.pdf

    Question 16. Senator Voinovich would like human capital 
information: what is the NRC's capacity to keep staff on board and 
ability to hire the people the Agency needs?
    Response. Over the last 2\1/2\ years, NRC has implemented a 
strategic workforce planning process that provides for the systematic 
and ongoing identification of critical skills gaps and the application 
of a variety of human capital strategies to close them. With an active 
partnership between program managers throughout the Agency and human 
resources staff, NRC is currently enjoying success in hiring and 
retaining the staff it needs to carry out its vital mission. However, 
the Agency also recognizes that it must continue to understand and 
address its strategic human capital management challenges, and it would 
welcome any assistance Congress could provide to train, hire, and 
retain individuals with critical skills needed by NRC.
    To aid retention, NRC provides a high quality work environment and 
a variety of incentives and flexibilities. With a focus on continual 
learning, the Agency supports training and development programs in 
technical, non-technical, and leadership skills. The human capital 
budget also funds graduate and senior fellowships, retention 
allowances, relocation bonuses, and quality of work life programs. 
Attrition, including losses due to retirement, remains relatively low. 
Since fiscal year 2000, attrition has ranged between 5 and 6 percent; 
while in the late 1990's, it jumped to 7.5 percent. Clearly, the 
economy and the opportunities in the labor market affect employees' 
decisions about continued government employment.
    Through an aggressive, targeted recruitment program for diverse 
entry-level and experienced candidates, NRC is currently competing 
successfully to acquire the skills it needs. The Agency is benefiting 
from the condition of the economy and from NRC's varied recruiting, 
staffing, and compensation tools. By reinvigorating the cooperative 
education program and strategically using recruitment bonuses, 
undergraduate scholarships, and the summer hire program, the Agency has 
been able to attract and hire entry-level staff. By using a flexible 
compensation system and recruiting tools such as Monster.com, NRC has 
had recent success in attracting and hiring experienced staff with 
specialized technical skills. Over the last year, the Agency hired 261 
new permanent employees. Of these new employees, 67 highly qualified 
engineers and scientists joined the Agency's Nuclear Safety Intern 
Program.
    NRC actively monitors the relevant labor market and the results it 
is achieving in the strategic management of human capital. The Agency 
recognizes that external factors, including the economy, impact the 
strategies it must use to hire and retain the critical technical talent 
it needs. Through an ongoing planning, implementation, and assessment 
process, NRC is working to assure that it will continue to maintain the 
technical competence of it's workforce. To help maintain and continue 
these recent successes, NRC would welcome and strongly support human 
capital provisions of the type reflected in S. 1591, which was 
introduced by Senator Voinovich in the last session of Congress.

    Question 17a. Senator Voinovich asked: What resources should have 
been in place at Davis-Besse?
    Response. Davis-Besse is a single unit pressurized water reactor 
facility. NRC policy dictates that inspection for this type of facility 
be performed by both onsite resident inspectors and region-based 
specialist inspectors. The complement of onsite resident inspectors 
includes two full time positions--a qualified senior resident inspector 
and a qualified resident inspector. Specialist inspections are 
conducted by drawing upon various regional staff inspection resources; 
these inspections are managed by a Projects Branch in the regional 
office. Staffing for a typical projects branch includes a Branch Chief 
and a Project Engineer. Ordinarily a projects branch is responsible for 
two to three reactor sites.

    Question 17b. What was in place?
    Response. Since at least 1996, at least one fully qualified NRC 
inspector has always been assigned to the Davis-Besse site. For most of 
that time, both of the resident inspector positions were staffed with 
qualified inspectors. One exception involved a 20-month period 
(November 1998 to July 2000) when only one fully qualified resident 
inspector was assigned. For an 11-month period (November 1998 to 
October 1999), there was one resident inspector assigned to the site. 
When the second resident reported to the site in October 1999, he was 
partially qualified until July 2000, when he achieved full 
qualification. Periodic specialist inspections were also conducted at 
Davis-Besse.
    The regional Branch Chief position has always been filled, but the 
Project Engineer position was not permanently staffed from June 1997 
through June 1998, and then again from September 1999 through May 2000. 
This latter position is not required. In the NRC's independent 
``Lessons Learned Task Force'' report, it was noted that the cognizant 
Branch Chief for Davis-Besse focused a large amount of his time on the 
Clinton nuclear facility, a plant in the same branch as Davis-Besse 
that was under the NRC's intensive ``Manual Chapter 0350'' Oversight 
Process. The same report indicated that senior regional management 
determined that the assigned Branch Chief provided effective oversight 
of all of his assigned plants.

    Question 17c. What is the NRC doing to ensure that a similar 
problem isn't occurring elsewhere?
    Response. NRC policies specify that two resident inspectors be 
assigned to Davis-Besse. As noted above, there was a 20-month period of 
time when only one fully qualified inspector was assigned to the 
facility. In response to an NRC ``Lessons Learned Task Force 
recommendation, the NRC will now more closely monitor resident 
inspector staffing levels and develop human resource strategies to 
better manage inspector turnovers. Specifically, NRC policy will be 
revised and effort will be focused on minimizing the time between when 
a resident inspector leaves a plant site and when a fully qualified 
replacement inspector arrives. In addition, the NRC Executive Director 
for Operations recently issued guidance that permits the assignment of 
additional inspectors to a site beyond the planned staffing in 
anticipation of staff turnover. Additional long-term improvements are 
also being reviewed and evaluated as part of the ongoing, continuing 
improvement process.
    Prior to implementation of a revised Reactor Oversight Process in 
2000, the NRC inspection program permitted significant variability in 
the application of inspection resources, largely based on assessed 
facility performance. The total inspection hours at Davis-Besse for the 
3 years of 1998, 1999, and 2000 were lower than most other single unit 
sites, although the hours were consistent with the facility performance 
documented through the previous reactor oversight program. The new 
program mandates that a minimum baseline inspection effort be completed 
at every nuclear facility.
    All inspections at U.S. nuclear power facilities to ensure the 
health and safety of the public continue to be accomplished. The NRC 
has undertaken aggressive action to maintain the high quality and 
capability of its workforce, including hiring experienced professionals 
and highly qualified entry level staff.

    Question 18. Provide specific examples of how the NRC is doing 
things differently as a result of employees coming forward with 
recommendations on how to do the job better.
    Response. This is an important subject that we continue to work on 
to achieve further improvements. There are a variety of forums and 
processes, both formal and informal, available to NRC employees who 
wish to make recommendations on improvements and efficiencies with 
regards to policy and safety issues or administrative matters. We have 
encouraged the staff to engage managers in informal, personal feedback 
in the course of their daily business. Two of the more formal processes 
for providing feedback are the NRC's suggestion program and the filing 
of differing professional views. NRC's review and concurrence process 
for work products also provides staff, supervisors, and managers 
opportunities to offer changes in approach and direction. In addition, 
periodic staff meetings, management retreats, focus groups, task or 
work groups, self assessments, and a feedback form process (where 
suggestions or recommendations are brought forward and considered) 
provide platforms for direct employee involvement in determining 
policies, processes, and procedures. The Agency has an ``open door 
policy that encourages staff at all levels to interact with managers 
anywhere in the Agency.
    The attached pages provide some specific examples of changes to 
NRC's business practices that have occurred as a result of employee 
recommendations.

                                EXAMPLES

     Two recent employee recommendations brought forward 
through the Agency's Differing Professional View/Differing Professional 
Opinion (DPV/DPO) process resulted in several enhancements to an 
ongoing review of NRC's Significance Determination Process. Another 
employee raised a DPV regarding the appropriateness of the resolution 
of an allegation raised by a licensee employee which resulted in a re-
review of the allegation by the inspection staff and a change in 
position on the disposition of the allegation.
     NRC employees from all four NRC regional offices and the 
Technical Training Center, working with the inspection program staff in 
the Office of Nuclear Reactor Regulation, completely revised the 
process for training and qualifying NRC power reactor, research and 
test reactor, decommissioning, vendor, and construction inspectors and 
operator license examiners to increase efficiency in the program.
     Managers in the regions generally meet two times a year 
with all reactor inspectors, and two additional times with senior 
resident inspectors, to solicit feedback and recommendations from the 
staff on how the Reactor Oversight Program (ROP) can be improved. The 
best practices are compiled and placed on the regional internal web 
sites for viewing by all staff, and have resulted in changes to 
inspection procedures.
     Senior resident inspectors met to discuss the lessons 
learned from the Davis-Besse event, and developed a list of 
recommendations for internal process changes. One recommendation 
resulted in the sharing of a list of special areas to emphasize when 
inspecting licensee performance during refueling outages and reactor 
containment or drywell walk downs.
     In addition, the staff has made recommendations which have 
improved focus on safety and skills in conducting inspections, such as:
     Inspectors have been actively involved in the 
implementation of, and improvement to, the ROP since its inception.
     Unique inspection techniques, best practices and notable 
findings are shared among inspectors for use as a reference tool. Some 
best practices were in heat sink, permanent modifications, and 
maintenance rule inspections. Typically, the information is provided 
electronically for inspectors to view.
     An inspector newsletter, initiated in January 2003 and 
published bimonthly, shares information on a variety of findings and 
solicits feedback.
    Other suggestions from the NRC staff have been acted upon and used 
to improve how they do their job:
     The use of docking stations, laptop computers, and other 
technologies to reduce paperwork and speed up completion of inspection 
reports.
     The use of global positioning devices and cellular 
telephones to aid in real time communications with licensees and 
location of mobile or fixed radiation monitoring equipment around 
nuclear power plants.
     Improved use of electronic printing allows inspection 
teams to receive inspection reference material and drawings 
electronically instead of having licensee's mail large volumes of 
drawings.
     During resident inspector seminars, individual inspectors 
regularly share insights or lessons learned with other inspectors. In 
addition, inspectors regularly interact with Headquarters counterparts 
on several working groups to improve specific inspection areas. One 
example is a focus group looking into the inspection of corrective 
action program effectiveness.
     A recent example of a recommendation raised through the 
Employee Suggestion program involved implementation of a quicker and 
more cost-effective way of transmitting final letters to persons that 
had raised safety concerns using the contract overnight service instead 
of certified mail.
     Staff have made recommendations to add, expand, or re-
locate certain training for efficiency and cost savings.
    In the materials area, initiatives in tracking, oversight and 
follow-up reviews of materials Agreement State Programs have been 
undertaken as the result of suggestions by staff. In addition:
     Staff has suggested and management has supported 
implementation of several enhancements to the Integrated Materials 
Performance Evaluation Program (IMPEP). This program is used to 
evaluate both NRC Regions and Agreement State radioactive material 
programs. These enhancements include establishment of both a list 
server for team members and an IMPEP website for resource information, 
resulting in more efficient and effective completion of IMPEP reviews.
     At the staff's suggestion, management agreed that 
responsibility for issuing and signing draft IMPEP reports should be 
delegated to the IMPEP Team Leader. This change has streamlined the 
concurrence process and has resulted in efficiencies in the timeliness 
of issuance of these draft IMPEP reports.
     Staff conceptualized and management supported 
implementation of a new allegation web site for Agreement State 
allegations and concerns. The new web site allows members of the public 
to go directly to the State with concerns regarding areas of their 
regulatory responsibility. Staff also suggested enhancements in the 
review of Agreement State regulations and increased use of electronic 
communications with Agreement States.
    A revision to the byproduct materials inspection program focusing 
inspection on risk significant activities was initiated based on staff 
review and recommendation.

                               __________
       Responses by Richard Meserve to Additional Questions from 
                           Senator Lieberman

    Question 1. What concrete steps has the NRC taken to ensure better 
accounting of special nuclear materials and to achieve a higher level 
of confidence in its regulation of special nuclear material? Has the 
NRC considered resuming periodic Material Control and Accounting 
inspections at nuclear power reactors?
    Response. The NRC is examining material control and accounting 
(MC&A) programs as part of its comprehensive review of the Agency's 
safeguards and security program that is being undertaken in response to 
the terrorist activities of September 11, 2001. While this review 
proceeds, the NRC continues to conduct MC&A inspections at fuel cycle 
facilities. The MC&A inspection activities for nuclear power plants are 
being considered as part of this review.
    In the interim, the NRC has developed a Temporary Instruction (TI) 
to use for conducting audits of MC&A programs at nuclear power plants. 
This TI will help NRC ascertain the breadth and scope of the MC&A 
issues which were identified as a result of the evaluation of missing 
fuel rods at Millstone. The NRC will begin implementing the TI at 
several sites this year and will complete the audits at all sites in 
2004. The NRC will also conduct detailed inspections of MC&A at six 
nuclear power plants in 2004. Using the results from the MC&A program 
review, the implementation of the TI, and the inspections at six 
plants, the NRC will determine what, if any, changes to the MC&A 
program, including the scope and frequency of MC&A inspections at 
nuclear power plants, are needed in the context of the overall 
safeguards program review.

    Question 2. Because previous NRC inspections at Millstone did not 
report the fuel rods missing and the NRC no longer performs routine 
Material Control and Accounting inspections at nuclear power reactors, 
how confident can the Agency be that this problem is not more 
widespread?
    Response. As noted in Question 1, staff plans to examine MC&A 
programs as part of the comprehensive review of the Agency's safeguards 
and security program that is being undertaken in response to the 
terrorist activities of September 11, 2001. The staff has developed a 
Temporary Instruction (TI) to ascertain the breadth and scope of the 
MC&A issues which were identified at Millstone. The staff will begin 
implementing the TI at several sites this year by conducting an audit 
of the plants' MC&A process. The NRC will complete the audit at all 
sites in 2004. In addition, the NRC will conduct full-scale inspections 
at six nuclear power plants. Changes, if any, to the MC&A program will 
be evaluated based on the results from these efforts, and as a whole in 
the context of the overall safeguards program.

    Question 3. I understand that on March 19, 1999, Dominion Nuclear 
Connecticut filed an application for a license amendment to increase 
the storage capacity of its Millstone Unit 3 spent fuel pool from 756 
assemblies to 1860 assemblies. The pool currently has 21 high-density 
fuel racks; the license amendment would allow an additional 15. What is 
the status of NRC action on this application? Has it been approved?
    Response. The NRC approved the license amendment by letter dated 
November 28, 2000 (Accession No. ML003744387).

    Question 4. In reviewing this application, what alternatives for 
storage of nuclear waste did/will the NRC consider? I understand that 
on March 19, 1999, Dominion Nuclear Connecticut filed an application 
for a license amendment to increase the storage capacity of its 
Millstone Unit 3 spent fuel pool from 756 assemblies to 1860 
assemblies. The pool currently has 21 high-density fuel racks; the 
license amendment would allow an additional 15. What is the status of 
NRC action on this application? Has it been approved?
    Response. The NRC reviews the application as submitted by the 
licensee and either approves or denies the application based on 
technical considerations. The licensee's application was judged to be 
acceptable. NRC review of alternatives for storage of nuclear waste is 
not required as part of this application.

    Question 5. In reviewing an application to increase the capacity of 
a spent fuel pool, does the NRC take into account the extent to which 
this action may increase security risks to the plant and possible 
consequences of pool failure in the event of an accident or security 
breach at the plant. Were these considerations taken into account in 
the review of the Millstone Unit 3 expansion request?
    Response. In accordance with 10 CFR 73, ``Physical Protection of 
Plants and Materials,'' each operator of a nuclear power plant is 
required to provide substantial physical protection against 
radiological sabotage, including the use of detection devices, 
barriers, access controls, and armed guards. Spent fuel pools are 
located within protected areas of the plant, which require physical 
security. A change to the capacity of the spent fuel pool does not 
directly impact the security measures that protect it. Since September 
11, 2001, several orders and numerous advisories have been issued by 
the NRC to all commercial nuclear plants which improved the physical 
security at the nuclear plants, including their spent fuel pools. 
Additional enhancements are under consideration.
    In accordance with 10 CFR 50.92, ``Issuance of Amendment,'' license 
amendments issued to increase spent fuel pool capacity are normally 
found to involve no significant hazards consideration. This means that 
the proposed amendment would not (1) involve a significant increase in 
the probability or consequences of an accident previously evaluated; or 
(2) create the possibility of a new or different kind of accident from 
any accident previously evaluated; or (3) involve a significant 
reduction in a margin of safety. Because of the robust design and 
construction of spent fuel pools, the major failure of a spent fuel 
pool is considered very unlikely and is beyond the design basis of the 
plant. Nonetheless, the NRC is doing analyses of spent fuel pool 
vulnerability to a terrorist event. The National Research Council in 
its 2002 report, Making the Nation Safer: The Role of Science and 
Technology in Countering Terrorism, found: ``The threat of terrorist 
attacks on spent fuel storage facilities, like reactors, is highly 
dependent on design characteristics. Moreover, spent fuel generates 
orders of magnitude less heat than an operating reactor, so that 
emergency cooling of the fuel in the case of an attack could probably 
be accomplished using `low tech' measures that could be implemented 
without significant exposure of workers to radiation.'' The Commission 
agrees with this statement. One of the design characteristics of the 
Millstone 3 spent fuel pool is that the pool is partially below grade, 
which means that in even a worst case terrorist attack, continuing to 
cool the fuel and preventing any offsite consequences is eased 
considerably. The NRC reviews the technical aspects of the application, 
as specified in the Standard Review Plan, NUREG-0800, section 9.1.2, 
``Spent Fuel Storage.'' This includes verifying conformance with 10 CFR 
50, Appendix A, General Design Criteria 2, 4, 5, 61, 62, and 63. For 
example, the effect of the increased number of fuel assemblies on 
subcriticality criteria, heat load, and seismic qualification are 
reviewed. For the Millstone Unit 3 expansion request, the NRC reviewed 
the technical aspects of the application as described above.

    Question 6. Please describe the current NRC procedures to prevent 
loss of water from spent rod pools from various causes, including acts 
of malice. Please describe current NRC procedures to avoid a fire in 
the fuel pool resulting from a loss of water and to extinguish a fire 
in the fuel pool should one occur.
    Response. By NRC regulation, spent fuel pools are designed to 
prevent a substantial loss of coolant inventory under accident 
conditions, which include credible random equipment failures and severe 
natural phenomena, such as earthquakes and hurricanes. This criterion 
ensures the structure of the pool is robust. In addition, each plant 
has redundant sources of spent fuel pool makeup, each with at least the 
capacity to maintain water level following a loss of forced cooling or 
a failure of the pool's stainless steel liner. Plant emergency 
procedures include directions for aligning these makeup water sources 
to the spent fuel pool. In response to the events of September 2001, 
the NRC issued the Safeguards Advisories for Power Reactors which 
included guidance for licensees to consider alternate sources and 
methods for spent fuel pool makeup. Also, as part of the February 25, 
2002, Orders and Interim Compensatory Measures, the NRC directed 
licensees to develop guidance and strategies to maintain or restore 
spent fuel pool cooling capabilities using existing or readily 
available resources. It is expected that these strategies would result 
in plant operators developing alternate means of using the 
aforementioned systems for a broader range of plant damage conditions, 
including the loss of large areas of the plant.

    Question 7. What steps has the NRC taken to make spent rod pools 
more secure at plants like Millstone since the events of September 
2001? What additional steps/studies does the NRC plan to undertake? If 
additional study of this subject is planned, what is the timeframe for 
NRC completion of the work (please indicate month and year)? Is the NRC 
evaluating alternatives for hardening these and other types of nuclear 
waste storage facilities?
    Response. Spent fuel pools are robust structures constructed of 
thick concrete walls with stainless steel liners, and are designed to 
withstand earthquakes and other severe events. NRC's ongoing 
comprehensive safeguards and security program re-evaluation includes 
the consideration of potential threats, consequences and risks of 
terrorist attacks using various explosives or other techniques on spent 
fuel pools and spent nuclear fuel dry storage casks. An assessment plan 
is being developed to comprehensively review potential vulnerabilities 
at spent fuel pools, including both internal and external threats. 
Completion of the majority of these studies is scheduled for late-2003. 
The results of the studies will determine whether additional security 
measures beyond those already taken at these sites are necessary.
    Orders were issued by the Commission on February 25, 2002, to 
operating reactors, on May 23, 2002, to decommissioning reactors and to 
independent spent fuel storage installations (ISFSIs) using wet 
storage, and on October 16, 2002, to ISFSIs using dry storage, to 
enhance the security measures for spent fuel. The specific security 
measures are Safeguards Information under Section 147 of the Atomic 
Energy Act of 1954, as amended, but generally include requirements for 
increased patrols, augmented security forces and capabilities, 
additional security posts, vehicle stand-off distances, and enhanced 
coordination with law enforcement authorities. In addition, as 
mentioned in response to the previous question, the February 25, 2002, 
Order also directed licensees to develop guidance and strategies to 
maintain or restore spent fuel pool cooling capabilities using existing 
or available resources. At pools, such as the Millstone 2 and 3 pools, 
which are partially below grade, this task, as noted above, is eased 
considerably by that design characteristic.

    Question 8. What concrete steps has the NRC taken to ensure that 
NRC staff with appropriate technical expertise evaluate inspection 
reports like the 1997 inspection report on Indian Point Unit 2?
    Response. The Nuclear Regulatory Commission (NRC) reviewed its 
previous process for treatment of the Steam Generator Inspection 
Summary Reports as part of the Steam Generator Action Plan. The action 
plan was intended to direct and monitor the NRC's effort to ensure 
issues such as the evaluation of Steam Generator Inspection Reports are 
appropriately tracked and dispositioned.
    In April 2001, a formal process for performing a technical review 
of licensees' Steam Generator Inspection Summary Reports against newly 
developed formal written review guidance was implemented. NRC project 
managers were instructed to send the Inspection Summary Reports 
required by the plant's technical specifications to the technical staff 
for review as soon as the reports were received. The technical staff is 
cognizant of the timing of the industry's maintenance outages that 
include steam generator inspections, so the technical staff checks that 
they have received all of the Steam Generator Inspection Summary 
Reports that are due to the NRC. The Inspection Summary Reports are put 
into the formal work planning process at the NRC, which tracks the work 
until completion. A safety evaluation is written as a result of the 
review, and is provided to the licensee.
    To ensure a consistent review of the summary reports by the 
technical staff, the staff uses formal review guidance that provides a 
discussion of the technical elements of the inspection summaries that 
need to be reviewed by the staff, with a discussion of how to evaluate 
the elements. In addition, the review guidance instructs reviewers 
(e.g., junior reviewers) to explore and discuss findings and issues 
with more senior reviewers, as needed. Issues or questions that are 
raised by any of the reviewers are handled through the normal NRC 
review process, i.e., discussing the issues with the licensee through 
formal written requests for additional information, phone calls, and 
public meetings.

    Question 9. What concrete steps has the NRC taken to ensure that 
NRC staff conduct an adequate review of license amendment requests such 
as the 1999 request to amend the license to extend the steam generator 
inspection interval? In particular, has the NRC instituted adequate 
controls to demonstrate that all steps of its process for responding to 
license amendment requests are completed and supported by sufficient 
documentation?
    Response. Shortly after the February 2000 tube failure, the Office 
of Nuclear Reactor Regulation (NRR) initiated a self-critical review of 
its activities and processes used in the prior evaluation of the IP2 
steam generator license amendment. In addition to a peer review by the 
Office of Research, NRR also commissioned a lessons-learned review, the 
objective of which was to evaluate the NRC staff's technical and 
regulatory processes related to assuring SG tube integrity in order to 
identify and recommend areas for improvements applicable to the NRC 
and/or the industry. On August 29, 2000, the OIG issued its event 
inquiry, ``NRC's Response to the February 15, 2000, Steam Generator 
Tube Rupture at Indian Point Unit 2 Power Plant.'' The OIG had 
initiated this inquiry because of concerns from Congress and the public 
about the IP2 event. In particular, the OIG had concluded that ``the 
process does not provide adequate controls to demonstrate that all 
process steps are completed and supported by adequate documentation.'' 
The OIG made several recommendations to enhance the process. The 
comments and recommendations raised by OIG were factored into the 
lessons-learned charter.
    Based on the results of its lessons-learned review, NRR prepared 
improved guidance detailing the processes and expectations for reviews 
of license amendments. NRR Office Instruction LIC-101, ``License 
Amendment Review Procedures,'' provides guidance to the staff, in 
particular, about (1) better planning and tracking of the work involved 
in processing a license amendment, (2) improved control of documents 
used in the review process and which form the basis of its conclusions, 
(3) ensuring adequate definition of the regulatory and technical basis 
for its review and conclusions, and (4) explicitly identifying the 
basis for its conclusions. In addition, NRR provided training to its 
staff on the process and management expectations.
    In a memorandum dated June 4, 2002, the OIG concluded that adequate 
corrective actions had been implemented to correct the deficiencies 
noted in the report and that no further action was necessary.

    Question 10. What steps has the NRC taken to improve communications 
between offsite emergency preparedness officials and the NRC to improve 
emergency preparedness response during the incidents such as the 
February 15, 2000 incident at Unit 2?
    Response. The NRC staff, at the suggestion of the GAO report on 
Indian Point Emergency Preparedness, has assessed the Agency's policies 
for non-emergency communication with State and local officials. This 
activity had previously been initiated in response to findings 
documented in an NRC Office of the Inspector General report. Our 
assessment of NRC communication practices has concluded that existing 
practices are generally adequate and the level of interaction and 
communication needed between the NRC and local officials remains a 
site-specific variable. At some sites, regular interaction with NRC 
representatives is appropriate. However, at other sites, less frequent 
interaction with NRC representatives has been adequate absent unusual 
site activities. However, to further enhance the availability of NRC 
staff to local officials and members of the public, the NRC has revised 
inspection guidance for regional management to consider the site 
specific needs for contacts with the members of the public and offsite 
officials and inspection resources.
    In the case of Indian Point, over the past several years the NRC 
has had extensive interactions with local government and elected 
officials regarding developments at that site. The NRC has briefed 
local officials on important plant events and NRC actions on a 
continuing basis. The NRC routinely holds meetings in the local area 
which are open to public observation and provide opportunities for 
comments and questions from the local public. Local officials or their 
staffs attend these meetings. On a number of occasions the NRC 
conducted pre-meeting briefings for local officials to facilitate 
information exchange. The NRC also consistently provides early 
notifications to congressional, State and local officials of any 
significant site activity or significant correspondence with the 
licensee. As a matter of management philosophy, the NRC encourages an 
``open door'' policy with regard to access by the public, State and 
local officials to the NRC staff.

    Question 11. Do the NRC and/or FEMA plan to take any interim 
measures to address the significant concerns identified in the draft 
Witt report?
    Response. Yes. The matters addressed in the draft report in large 
measure relate to offsite planning and preparedness, which falls 
primarily under FEMA's authority. While the NRC reserves the right to 
any judgment as to the overall state of emergency planning and 
preparedness, in keeping with the longstanding understanding between 
FEMA and the NRC, we look initially to FEMA for its views on the draft 
report relating to offsite preparedness. On February 21, 2003, FEMA 
issued its report on the September 2002 emergency preparedness exercise 
at Indian Point. We are continuing our review of this FEMA report which 
addresses a variety of planning issues including FEMA's conclusions 
regarding concerns raised by Witt and Associates.
    One important issue identified by the Witt report relates to plant 
security and the effect of potential terrorism. Since the terrorist 
attacks of September 11, 2001, the NRC has taken a number of steps to 
enhance the already high level of security at the nation's nuclear 
power plants. These steps have resulted in, among other things, more 
guards being trained and placed on duty at the plants, providing an 
even higher level of security at what were already the best protected 
commercial facilities prior to the September 11, 2001, attacks. The 
NRC's actions have included issuing Orders in February 2002 formalizing 
certain security enhancements as requirements, issuing more than 40 
advisories to licensees to describe threat conditions or recommend 
protective measures, issuing an NRC Threat Advisory and Protective 
Measures System, consistent with the Homeland Security Advisory System, 
to rapidly respond to national changes in the threat environment, and 
other actions. Additionally, NRC's February 2002 security Orders 
specifically required licensees to enhance their emergency response 
plans as appropriate in light of the current threat environment. 
Licensees were required to ensure that emergency response plans were 
compatible with enhanced security measures. During 2003, the NRC 
resumed force-on-force exercises in a pilot program. In addition, the 
NRC has embarked on a number of studies to assess and address the 
vulnerability of nuclear plants from the new threats confronting the 
United States.
    Emergency preparedness programs are designed to cope with a 
spectrum of accidents including those involving rapid, large releases 
of radioactivity. Emergency response plans are tested during frequent 
(e.g., quarterly or more often) small-scale drills and periodic full-
scale emergency exercises that simulate serious reactor accidents, 
which have invariably included postulating large releases of 
radioactivity that occur shortly after the initiation of events The 
plans and their implementation are periodically reviewed to confirm 
that they are being adequately maintained and address changing 
circumstances appropriate to any given site.

    Question 12. Please describe the types of actions available to the 
NRC and/or FEMA to assess the adequacy of an approved emergency 
response plan if there is an allegation that the plan is insufficient 
to protect the public health and safety of citizens living within the 
emergency plan zones for the nuclear power facilities included in the 
submission by providing reasonable assurance that State and local 
governments can and intend to effect appropriate protective measure 
offsite in the event of a radiological emergency. Please describe the 
range of actions available to the NRC and/or FEMA if they find that an 
emergency response plan is no longer adequate. Has the NRC and/or FEMA 
made such a finding in the past? If so, please describe the specific 
NRC and/or FEMA response in each instance. Has the NRC and/or FEMA 
action included suspension of the plant's license or temporary shutdown 
of the plant?
    Response. When offsite emergency preparedness (EP) issues are 
raised to the NRC, either by allegation, 2.206 petitions, general 
correspondence or other communications, the NRC will request the 
assistance of FEMA. Offsite EP issues raised in inquiries to the NRC 
regions will be referred to NRC Headquarters (HQ) for resolution. If at 
any time during the review FEMA determines that the issues involved 
could potentially affect its reasonable assurance finding for the site 
in question, FEMA will immediately bring this preliminary assessment to 
the attention of the NRC. At that time, FEMA and NRC will determine 
what additional steps need to be taken to resolve the issue.
    If FEMA determines under 44 CFR 350.13 of its regulations that 
offsite emergency plans or preparedness are not adequate to provide 
reasonable assurance that appropriate protective measures can be taken 
in the event of a radiological emergency to protect the health and 
safety of the public, FEMA shall, as described in its rule, advise the 
Governor of the affected State, and the NRC of that initial 
determination.
    If after 4 months from the date of the initial notification the 
deficiency is not corrected, or an acceptable plan for correcting the 
deficiency has not been submitted, then FEMA shall withdraw approval of 
the plans and immediately inform the NRC and the Governor of the 
affected State and shall publish in the Federal Register and local 
newspaper notice of its withdrawal of approval. Upon receiving 
notification of such action from FEMA, the NRC will promptly review 
FEMA's findings and determinations and formally document the NRC's 
position. When, as described, in 10 CFR 50.54(s)(2)(ii) and 50.54(s)(3) 
of its regulations, the NRC finds the state of emergency preparedness 
does not provide reasonable assurance that adequate protective measures 
can and will be taken in the event of a radiological emergency and if 
after 4 months the deficiencies are not corrected, the Commission will 
determine whether the reactor shall be shut down until such 
deficiencies are remedied or whether other enforcement action is 
appropriate. In determining whether a shutdown or other enforcement 
action is appropriate (including taking such actions before the 4-month 
period has expired), the Commission shall take into account, among 
other factors, whether the licensee can demonstrate to the Commission's 
satisfaction that the deficiencies in the plan are not significant for 
the plant in question, or that adequate interim compensating actions 
have been or will be taken promptly, or that there are other compelling 
reasons for continued operation.
    10 CFR 50.54 (3) states that ``Nothing in this paragraph shall be 
construed as limiting the authority of the Commission to take action 
under any other regulation or authority of the Commission or at any 
time other than that specified in this paragraph.'' Accordingly, the 
NRC's February 2002 security Orders specifically required licensees to 
enhance their emergency response plans as appropriate in light of the 
current threat environment. The NRC has embarked on a number of studies 
to assess the vulnerability of nuclear plants to terrorist attacks. 
Should any of the vulnerability studies indicate a need we would not 
hesitate to issue additional Orders as necessary.
    The NRC has not suspended a plant's license or ordered a temporary 
shutdown of the plant based on emergency preparedness issues. However, 
after Hurricane Andrew, for example, the Turkey Point Nuclear power 
plant delayed restart due to offsite emergency preparedness concerns. 
The following are examples of NRC actions relative to offsite planning 
deficiencies:
    As a result of the first full-scale exercise in 1982 for Indian 
Point 3, FEMA identified five deficiencies in the exercise report and 
the NRC issued a 120-day letter on August 3, 1982. The March 1983 
exercise showed progress but two deficiencies remained. On May 5, 1983, 
the Commission voted 5 to 0 to close the plant by June 9, 1983 unless 
FEMA indicated sufficient progress to resolve the remaining two 
deficiencies. A State compensating plan was developed for counties 
unable or refusing to participate. On June 8, 1983, FEMA reported 
progress was made and on June 9 the Commission voted 3 to 2 to allow 
continued operation. Following the November 1984 full-scale exercise, 
FEMA reported that the Deficiencies had been fully corrected and there 
was reasonable assurance. In the June 1986 exercise 6 deficiencies were 
identified. These deficiencies were remediated through exercises by 
November 1986.
    For Shoreham, utility compensating plans were developed and 
implemented at the licensing stage when Suffolk County and New York 
State (NYS) both refused to participate in the planning process. The 
utility provided and trained employees in all functions of plan 
implementation and passed a full-scale demonstration of the utility 
plan prior to a full-power license being issued. Shortly after this the 
plant was sold to NYS and then decommissioned.
    For the Seabrook case, prior to licensing, Massachusetts and its 
towns as well as several New Hampshire towns refused to participate in 
the emergency preparedness activities for Seabrook including not 
permitting the erection of siren poles in Massachusetts. As in the 
Shoreham case compensating plans were developed and staffed by the 
utility for Massachusetts under the `realism rule' in 10 CFR 
50.47(c)(1). The State of New Hampshire developed compensating plans 
for the towns that refused to participate. The qualifying exercise 
prior to the full-power license was successfully conducted for both 
States. After Seabrook became operational and a change in Massachusetts 
leadership occurred, Massachusetts rejoined the planning process for 
Seabrook. The New Hampshire towns also began participating with the 
State in the planning effort.

    Question 13. I understand that the State of New York and several of 
the counties surrounding the Indian Point Plant have declined to 
provide annual certification of continued adequacy of the emergency 
preparedness for fiscal year 2003. Is this accurate? Please describe 
the annual State and local government certification requirement. What 
is the effect of the failure of a State and/or local government to 
provide the annual certification?
    Response. Yes, it is true that the State of New York and the 
counties surrounding the Indian Point nuclear plant did not submit 
their annual letters of certification (ALCs). However, the State of New 
York did submit their ALCs for the upstate risk counties: Oswego (for 
the Nine Mile Point and Fitzpatrick plants); and Monroe and Wayne 
(Ginna plant). It is important to remember that the ALC is not a 
certification of the adequacy of emergency plans and preparedness, but 
rather, a list of emergency preparedness activities that the State and 
local jurisdictions need to perform or address during the year.
    The ALC is a method that State and local governments with 
radiological emergency planning and preparedness responsibilities use 
to inform FEMA that the requisite preparedness activities have been 
completed for the previous calendar year. These activities include: 
distribution of public education and information materials to the 
residents; testing of radiological instruments; exercises; practice 
drills of various types, such as for emergency communications; 
training; updating of plans and Letters of Agreement; and completion of 
alert and notification tests.
    The requisite information concerning local preparedness activities 
is provided by those local governments to the State. The State then 
submits the information to FEMA along with the information on 
completion of the State's own annual preparedness activities. The 
initiation of the ALC can be found in FEMA Guidance Memorandum PR-1, 
Section C. If a State fails to submit this information for a specific 
site, FEMA regional staff may make staff assistance visits to the 
various jurisdictions for the purpose of verifying local efforts to 
update and maintain plans, training and readiness. For Indian Point, 
this would have to be done with the assistance of the State of New 
York, which provides the multi-jurisdiction oversight that ensures a 
consistent planning foundation. This is true throughout the Nation with 
all planning for nuclear sites as well as planning for any major event.
    FEMA has given the State and counties involved with emergency 
preparedness for the Indian Point site until May 2, 2003, to submit the 
necessary plans and documents including critical evacuation planning 
elements. FEMA expects this submittal to also contain documents 
normally submitted as part of the ALC, such as Letters of Agreement and 
updated school plans.

    Question 14. What concrete steps does the NRC plan in response to 
the findings of the fiscal year 2002 Evaluation of the NRC's 
Information Security Program that (1) the NRC security program is not 
well integrated and not consistently implemented across the Agency; and 
(2) NRC officials have not clearly defined the responsibility and 
accountability for all aspects of the information security program 
within its organizational structure?
    Response. In response to the independent evaluation of the NRC 
Information Security Program, the NRC developed a plan of action and 
milestones (POA&M) that has been formally submitted to the Office of 
Management and Budget (OMB). NRC is also required to file a quarterly 
report, providing updated status information for all of the actions 
listed in the POA&M. The POA&M includes specific action items to 
address the finding noted in the evaluation. The NRC security program 
is currently governed by a number of policy directives (management 
directives) that provide guidance for the security disciplines of 
physical security, personnel security, telecommunications security, 
classified information security, sensitive unclassified information 
security, and automated information systems security. In response to 
the September 11th terrorist event, the NRC made a number of 
organizational adjustments and re-aligned a number of the security 
functions. The management directives that clarified the details of the 
NRC security program are all being updated, with a completion date of 
December 2003. The management directive that defined the 
responsibilities and accountability for the NRC information systems 
security program will be the first policy directive that will be 
updated, and it is scheduled to be finalized by July 1, 2003. In 
updating all of the security policy directives, the NRC will ensure 
that all elements of the NRC security program are well integrated and 
consistently implemented across the Agency.

    Question 15. How does the NRC plan to respond to recent Office of 
Inspector General findings (detailed in the written statement for this 
hearing) that (1) NRC program guidance does not adequately protect 
``Official Use Only'' documents from inadvertent public disclosure; (2) 
training on handling, marking, and protecting sensitive unclassified 
information is not provided to all NRC employees and contractors on a 
regular basis; and (3) NRC employees are not consistently implementing 
the requirement to report incidents of inadequate release of sensitive 
unclassified information to the Office of the Executive Director for 
Operations?
    Response. On December 19, 2002, the NRC staff responded to the 
OIG's October 16, 2002, report, ``Review of NRC's Handling and Marking 
of Sensitive Unclassified Information''; the staff response is 
enclosed. The staff's memorandum to the OIG agreed with the OIG 
findings and included a response for each specific recommendation. With 
respect to the protection of Official Use Only (OUO) documents, the 
staff will issue more prescriptive guidance in a revision to Management 
Directive 12.6. Training regarding the handling of OUO information and 
reporting of incidents regarding its handling is included in a more 
comprehensive program on the handling of all types of sensitive 
information.

                                 ______
                                 
  Staff Response to OIG's October 16, 2002, Report, ``Review of NRC's 
      Handling and Marking of Sensitive Unclassified Information''

December 19, 2002

Memorandum to: Stephen D. Dingbaum, Assistant Inspector General for 
Audits

From: William D. Travers /RA/, Executive Director for Operations

Subject: NRC's Handling and Marking of Sensitive Unclassified 
Information (OIG-03-A-01)

    This memorandum provides the staff's response to the findings and 
recommendations discussed in OIG-03-A-01, Review of NRC's Handling and 
Marking of Sensitive Unclassified Information, dated October 16, 2002.
    Recommendation 1. Update the guidance for OUO documents to require 
clear identification of sensitive unclassified information to prevent 
its inadvertent disclosure.
    Response. Agree. More prescriptive guidance for OUO will reduce the 
likelihood of inadvertent releases of sensitive unclassified 
information. The staff will conduct a total review of MD 12.6, NRC 
Sensitive Unclassified Information Security Program, and make 
appropriate changes concerning the marking and use of OUO cover sheets. 
We expect this action to be completed not later than July 31, 2003.
    Recommendation 2. Mandate consistent use of defined markings on 
documents containing Official Use Only information and clarify the 
markings that should be used on sensitive unclassified information.
    Response. Agree. Consistent use of OUO markings would enhance the 
identifiability of sensitive documents and contribute to the reduction 
of inadvertent disclosures. Additional guidance for OUO marking, where 
appropriate, will be prescriptive and will be part of the revision of 
MD 12.6 expected by July 31, 2003.
    Recommendation 3. Conduct annual mandatory training for all NRC 
employees and contractors on the procedures for marking and handling 
sensitive unclassified information.
    Response. Agree. Training would heighten employee awareness and 
knowledge as well as improve employee handling of sensitive 
unclassified information. However, it may be ineffective to develop a 
specialized training program dedicated solely to sensitive unclassified 
information. An agency-wide comprehensive security education program 
for handling both classified and sensitive unclassified information 
would place increased emphasis on sensitive unclassified information. 
Therefore, the staff is exploring the creation of computer-based 
training to include handling and marking of both classified and 
sensitive unclassified information.
    Recommendation 4. Train NRC employees and contractors on the 
requirement to report incidents of inadvertent releases of sensitive 
unclassified information to the OEDO in accordance with MD 3.4.
    Response. Agree. The staff will emphasize the requirement to report 
inadvertent releases of sensitive unclassified information to OEDO in 
any future security presentations for employees and contractors.

    Question 16. In the Performance and Accountability Report for 2002, 
the NRC indicates that it has been conducting a comprehensive review of 
its programs and security of the nuclear facilities and activities it 
regulates, and has made significant changes to its regulatory programs 
and has enhanced the already robust security of sensitive facilities 
and activities, including a new homeland security threat advisory 
system. Please describe the additional concrete steps the NRC has taken 
to improve security at all nuclear power plants and at the Indian Point 
and Millstone Nuclear Power Plants, in particular.
    Response. Immediately following the terrorist attacks of September 
11, 2001, the NRC issued a series of safeguards and threat advisories 
to the major licensed facilities, including Indian Point and Millstone, 
placing them on the highest security level. Many of the strengthened 
security measures became requirements as a result of NRC Orders issued 
to all licensed operating nuclear power plants on February 25, 2002, 
and to other sensitive nuclear facilities in the following months. The 
specific details of the new requirements are Safeguards Information, 
under Section 147 of the Atomic Energy Act, as amended, and cannot be 
disclosed in a public document; however, generally the new requirements 
include increased security patrols, augmented security forces, 
additional security posts, increased vehicle standoff distances, 
tightened facility access controls, and enhanced coordination with the 
law enforcement and intelligence communities. The NRC worked with the 
FBI, the Nuclear Energy Institute, and our licensees to review access 
lists of employees working at nuclear power plants to identify any 
individual whose name matched the FBI Watch List. We determined that 
there were no positive matches. Subsequently, on January 7, 2003, the 
NRC issued immediately effective Orders to all 103 operating commercial 
nuclear power plants requiring that licensees enhance their programs 
that control access to the facility. Some of the requirements formalize 
a series of security measures that NRC licensees had taken in response 
to advisories issued by the NRC in the aftermath of the September 11, 
2001, terrorist attacks. Additional security enhancements, developed 
during our ongoing security review, are also provided in the Orders. 
The specific security measures addressed by the Orders, which 
supplement existing regulatory requirements, are classified as 
Safeguards Information under Section 147 of the Atomic Energy Act, as 
amended, and 10 CFR 73.21. The measures generally include restricting 
temporary unescorted access to a facility and with the February 25, 
2002 Orders, the January 7 Orders will remain in effect until the 
Commission determines otherwise.
    The Commission has completed an initial assessment of power reactor 
facility vulnerabilities to intentional malevolent use of commercial 
aircraft in suicidal attacks and has initiated a broad-ranging research 
program to understand the vulnerabilities of various classes of 
facilities to a wide spectrum of attacks. Although our work in this 
area is ongoing, the Commission has directed nuclear power plant 
licensees to develop specific plans and strategies to respond to an 
event that could result in damage to large areas of their plants from 
impacts, explosions or fire. In addition, licensees must provide 
assurance that their emergency planning resources are sufficient to 
respond to such an event.
    The Commission worked closely with other Federal agencies to revise 
the design basis threats that provide the foundation for the security 
programs of nuclear power plant and Category I fuel cycle facility 
licensees; Orders revising the DBT were issued on April 29, 2003; the 
enclosed press releases provide details on this action. The 
Commission's Orders to these licensees in February and August 2002 
effectively enhanced security in the interim while this work was 
underway. Full security performance reviews, including force-on-force 
exercises, have resumed at these facilities and will be conducted on a 
3-year cycle instead of the 8-year cycle that had been used for nuclear 
power reactors prior to September 11, 2001. These reviews initially 
commenced last summer with seven table top exercises that for the first 
time involved a wide array of Federal, State and local law enforcement 
and emergency planning officials.
    The NRC has developed a new Threat Advisory and Protective Measures 
System in response to Homeland Security Presidential Directive 3 and as 
revised by Homeland Security Presidential Directive 5. When a new 
Homeland Security Advisory System (HSAS) threat condition is declared, 
the NRC promptly notifies affected licensees of the condition and 
advises them to the appropriate predefined protective measures that 
have been developed for each threat level. The new system for NRC 
licensees has been formally communicated to licensees, Governors, State 
Homeland Security Advisors, Federal agency administrators and other 
appropriate officials. The new system replaces the NRC's 1998 threat 
advisory system and covers additional classes of licensees not included 
in the 1998 system.
    As for site-specific actions, each licensee was required to respond 
to the NRC Orders they received by describing the actions the licensee 
planned to take to implement the required actions in accordance with 
the terms of the Orders. All licensees, including licensees for Indian 
Point and Millstone, responded and implemented the required actions in 
accordance with the terms of the Orders. The implementation of the 
Orders and associated interim compensatory measures have been reviewed 
by resident inspectors and region-based security inspectors.

                                 ______
                                 
                                NRC NEWS
 NRC APPROVES CHANGES TO THE DESIGN BASIS THREAT AND ISSUES ORDER FOR 
                    CATEGORY 1 FUEL CYCLE FACILITIES

    The Nuclear Regulatory Commission, after extensive deliberation and 
interaction with stakeholders, has approved changes to the design basis 
threat (DBT) for two category 1 fuel cycle facilities in Virginia and 
Tennessee that possess enriched uranium used in nuclear reactors. The 
changes will be issued by an Order amending the design basis threat for 
theft or diversion of strategic quantities of special nuclear material.
    The Order, which is being issued today, will be effective 
immediately but allows a transition period for full implementation. 
With this action completed, the Commission expects that there will be a 
period of regulatory stability during which the two licensees can 
consolidate this and previously ordered security enhancements.
    The details of the design basis threat for theft or diversion are 
confidential national security information and will not be released to 
the public. Today's Order builds on the changes made by the 
Commission's August 21, 2002 Order which made interim security 
enhancements at these two facilities. The DBT was arrived at after 
discussions with cleared stakeholders from other Federal agencies, the 
two State governments and the two licensees.
    Under NRC regulations, category 1 fuel cycle facility licensees 
must ensure that the physical protection plan for each site is designed 
and implemented to provide high assurance in defending against the DBT 
to ensure adequate protection of public health and safety and common 
defense and security. Changes in those plans will now be made and 
submitted to NRC for approval.
    ``With the completion of this Order,'' Chairman Nils J. Diaz said, 
``the public should be reassured that the nation's category 1 fuel 
facilities are well-secured against potential threats. The NRC intends 
to continue working closely with the Department of Homeland Security 
and other Federal agencies, as well as with State and local law 
enforcement and emergency planning officials to ensure an overall 
integrated approach to the security of these critical facilities.

                                 ______
                                 
                                NRC NEWS
 NRC APPROVES CHANGES TO THE DESIGN BASIS THREAT AND ISSUES ORDERS FOR 
            NUCLEAR POWER PLANTS TO FURTHER ENHANCE SECURITY

    The Nuclear Regulatory Commission, after extensive deliberation and 
interaction with stakeholders, has approved changes to the design basis 
threat (DBT). The Commission believes that the DBT represents the 
largest reasonable threat against which a regulated private guard force 
should be expected to defend under existing law. These changes will be 
issued by Order.
    In addition, the Commission has approved the issuance of two other 
Orders to nuclear plants regarding work hours, training, and 
qualification requirements for security personnel to further enhance 
protection of public health and safety, as well as the common defense 
and security. The three Orders will be issued to all 103 operating 
commercial nuclear power plants.
    The three Orders, which are being issued today, will be effective 
immediately, but allow transition periods for full implementation. With 
these actions, the Commission expects that there will be a period of 
regulatory stability during which operating commercial plant licensees 
will be able to consolidate these and previously ordered security 
enhancements.
    These Orders, in combination with the recently issued Order in the 
area of access authorization, enhance the already strong defense 
capability at these sites using three interdependent elements directed 
to best protect the public, with the appropriate resources placed at 
the right places. These elements are:
     the revised Design Basis Threat and associated defensive 
capabilities derived from previous measures that the Commission 
directed;
     tighter work hour control and more robust training 
requirements for security personnel, to increase their capability to 
respond to threats; and
     enhanced access authorization controls to ensure all plant 
personnel with access to critical areas have had the most rigorous 
background checks permitted by law.
    The Order that imposes revisions to the Design Basis Threat 
requires power plants to implement additional protective actions to 
protect against sabotage by terrorists and other adversaries. The 
details of the design basis threat are safeguards information pursuant 
to Section 147 of the Atomic Energy Act and will not be released to the 
public. This Order builds on the changes made by the Commission's 
February 25, 2002 Order. The Commission believes that this DBT 
represents the largest reasonable threat against which a regulated 
private security force should be expected to defend under existing law. 
It was arrived at after extensive deliberation and interaction with 
cleared stakeholders from other Federal agencies, State governments and 
industry.
    Under NRC regulations, power reactor licensees must ensure that the 
physical protection plan for each site is designed and implemented to 
provide high assurance in defending against the DBT to ensure adequate 
protection of public health and safety and common defense and security. 
Extensive changes in those physical protection plans will now be made 
and submitted to NRC for approval.
    The second Order describes additional measures related to security 
force personnel fitness for duty and security force work hours. It is 
to ensure that excessive work hours do not challenge the ability of 
nuclear power plant security forces to remain vigilant and effectively 
perform their duties in protecting the plants. However, the Order does 
include provisions to allow increases in work hours under certain 
conditions, once specific requirements are met. The NRC developed this 
unclassified Order through a public process. The NRC carefully 
considered comments from power reactor licensees, security force 
personnel, public citizen groups and other agencies in reaching its 
final decision. The Order will be publicly available on NRC's website 
at: http://www.nrc.gov.
    The third Order describes additional requirements related to the 
development and application of an enhanced training and qualification 
program for armed security personnel at power reactor facilities. These 
additional measures include security drills and exercises appropriate 
for the protective strategies and capabilities required to protect the 
nuclear power plants against sabotage by an assaulting force. This 
Order requires more frequent firearms training and qualification under 
a broader range of conditions consistent with site-specific protective 
strategies. The details of the enhanced training requirements are 
safeguards information, and will not be released to the public. As with 
the DBT Order, the Commission solicited comments on a draft training 
Order from cleared stakeholders, including security personnel and took 
those comments under consideration in reaching its final decision.
    ``With the completion of these complementary Orders,'' Chairman 
Nils J. Diaz said, ``the public should be reassured that the nation's 
nuclear power plants are well-secured against potential threats. The 
NRC intends to continue working closely with the Department of Homeland 
Security and other Federal agencies, as well as with State and local 
law enforcement and emergency planning officials to ensure an overall 
integrated approach to the security of these critical facilities.''

                                 ______
                                 
    Question 17. In the Performance and Accountability Report for 2002, 
the NRC indicates that it is studying the potential vulnerability of 
nuclear power plants, fuel cycle facilities, and nuclear fuel and 
materials storage and transportation containers, including deliberate 
aircraft crashes on power reactor facilities and storage and 
transportation casks. When does the NRC anticipate this study to be 
completed (please indicate month and year)?
    Response. In January 2002, the NRC completed an initial assessment 
of the scope of vulnerabilities to aircraft attack. It provided 
insights that were factored into the interim compensatory measures 
developed (in February 2002) for nuclear power plants, and influenced 
NRC's interactions with other Federal agencies. More detailed analyses 
for nuclear power plants are expected to be completed by September 2003 
with a final report due in December of this year. More detailed 
analyses for storage and transportation casks are expected to be 
completed by December 2003. The vulnerability assessments for cyber 
terrorism are anticipated in August 2003 and results from the 
irradiator vulnerability studies are scheduled for June 2003.

    Question 18. As part of these reviews, is the NRC considering 
whether it requires/would benefit from changes to its existing legal 
authority? In the Performance and Accountability Report for 2002, the 
NRC indicates that it has been conducting a comprehensive review of its 
programs and security of the nuclear facilities and activities it 
regulates, and has made significant changes to its regulatory programs 
and has enhanced the already robust security of sensitive facilities 
and activities, including a new homeland security threat advisory 
system.
    Response. Yes. The NRC for more than a decade has submitted 
proposed legislation to the Congress that would enhance security at 
NRC-regulated facilities. Last year, the Commission identified 
additional measures, particularly relating to access authorization, and 
communicated those to the Congress. Unfortunately, Congress has not 
enacted these proposals. The Commission has been consulting with 
Congress on appropriate security legislation.

    Question 19. Has the NRC consulted with interested stakeholders 
(Federal, State, and local government; interest groups; and the public) 
in conducting these reviews? In the Performance and Accountability 
Report for 2002, the NRC indicates that it has been conducting a 
comprehensive review of its programs and security of the nuclear 
facilities and activities it regulates, and has made significant 
changes to its regulatory programs and has enhanced the already robust 
security of sensitive facilities and activities, including a new 
homeland security threat advisory system.
    Response. The NRC has coordinated its review of this issue with 
appropriate Federal agencies and licensees and industry representatives 
authorized to receive Safeguards Information. We have involved the 
States in our review of the design basis threats, in our preparation of 
Regulatory Issue Summaries to put in place a five-tier threat advisory 
system, consistent with HSPD-3, and in our review of potential 
additional measures for materials licensees. We have shared all Orders 
and Homeland Security Advisory System documents with the affected 
States.
    When possible, such as in developing our Fatigue Order, we have 
followed an open process, with drafts being shared on our web page and 
open meetings to discuss the drafts.
    However, direct public involvement on sensitive or classified 
papers is not possible. We do, however, take into account input 
received from interested stakeholder groups to the extent possible.

    Question 20. The NRC completed a new round of tabletop exercises 
using the expanded threat scenarios for power reactor facilities and 
selected fuel cycle facilities in November 2002. Does the NRC plan to 
[write] a report on these exercises? If so, when will the report be 
released (please indicate month and year)? Does the NRC plan to make 
the report available to the public?
    Response. The staff submitted SECY-02-0223, ``Expanded Table-Top 
Drill Lessons Learned and Proposed Force-on-Force Testing Pilot 
Program'' on December 16, 2002, and the Commission approved this 
planned approach on January 23, 2003. Because the staff paper and 
Commission decision contain Safeguards Information under Section 147 of 
the Atomic Energy Act, as amended, and other sensitive information, 
there are no plans to release these documents to the public.

    Question 21. In fiscal year 2003, the NRC plans to complete its 
review and revision of the design basis threat that provides the 
foundation for the security programs of nuclear power plant and 
Category I fuel cycle facility licensees. Please indicate the month in 
which this review will be completed. What criteria has the NRC 
established for this review? Will it account for security threats due 
to terrorist activities?
    Response. On April 29, 2003, the Commission issued Orders revising 
the DBT both for nuclear power plants and for Category I fuel cycle 
facilities. The DBTs are based on criminal and terrorist activities and 
capabilities worldwide that pose a threat to licensed nuclear 
facilities and activities. This review of the DBT included significant 
input from the intelligence community, the Department of Defense, 
Energy and Homeland Security, the Federal Bureau of Investigation, 
other Federal agencies and State officials. We rely upon the 
intelligence community and other Federal agencies to provide 
information on the targets, tactics, training and capabilities of 
terrorists and other adversaries who may pose a threat to nuclear 
facilities and activities. They also describe the domestic and 
international threat environment. NRC then determines the subset of the 
domestic threat against which NRC operating power reactor licensees and 
Category I fuel cycle licensees should have primary responsibility to 
defend. In making this determination, NRC assesses the limits on the 
adversary characteristics against which private sector guard force can 
reasonably be expected to defend.

    Question 22. In the Performance and Accountability Report for 2002, 
the NRC described plans to conduct full security performance reviews, 
including force-on-force exercises at each nuclear power plant on a 3-
year cycle instead of the 8-year cycle that has been used prior to 
September 11. Does the NRC plan to begin the first force-on-force 
exercises in fiscal year 2003? How many such reviews will be conducted 
in fiscal year 2003? How does the NRC plan to prioritize the review of 
plants? Please confirm my understanding that Chairman Meserve committed 
to a force-on-force exercise at the Indian Point plant during this 
calendar year.
    Response. In February 2003, the NRC resumed force-on-force 
exercises using expanded adversary characteristics in a pilot program. 
We will conduct the pilot program force-on-force exercises at a rate of 
about two exercises per month, until the revised DBT is effective, at 
which time the NRC will transition to the revised force-on-force 
performance evaluation program. There will be a force-on-force exercise 
at Indian Point during CY2003. The method for prioritization of plants 
selected for force-on-force performance assessments will be determined 
as part of the pilot program.

    Question 23. Does the NRC plan to review the adequacy of the 
existing 10-mile emergency planning zone around nuclear power plants? 
How does NRC protect public health and safety of citizens living 20-, 
50-, 100-miles downwind of nuclear power plants?
    Response. Since September 11, 2001, NRC has been studying the 
potential vulnerability of nuclear power plants. Nothing in our studies 
thus far would indicate a problem with the adequacy of the existing 10-
mile plume exposure pathway emergency planning zone (EPZ) around 
nuclear power plants, or the existing 50-mile ingestion exposure 
pathway EPZ.
    An NRC/EPA task force provided the planning basis for offsite 
emergency preparedness efforts considered necessary and prudent for 
large power reactors in 1978 in NUREG-0396, EPA 520/1-78-016, 
``Planning Basis for the Development of State and Local Government 
Radiological Emergency Response Plans in Support of Light Water Nuclear 
Power Plants'' (``Planning Basis for Radiological Emergency 
Preparedness (REP) Plans''). This planning basis was later incorporated 
into NRC and FEMA regulations.
    Since 1978, NRC's understanding of possible source terms resulting 
from severe accidents has improved considerably. NUREG-1465 outlines 
that improved understanding. NUREG-1465 would indicate that the 1978 
NRC/EPA task force report was even more conservative in the spectrum of 
accident scenarios encompassed by the 10- and 50-mile EPZs than 
originally envisioned.
    At present, commercial nuclear power plants in the United States 
have two concentric emergency planning zones (EPZs). EPZs are defined 
as the areas for which planning is needed to assure that prompt and 
effective actions can be taken to protect the public in the event of an 
accident. The choice of the size of the EPZs represents a judgment on 
the extent of detailed planning which must be performed to assure an 
adequate response. In a particular emergency, protective actions might 
well be restricted to a small part of the planning zones. On the other 
hand, for the worst conceivable accidents, protective actions might 
need to be taken outside the planning zones. The current EPZ distances 
are considered large enough to provide a response base that would 
support activity outside the planning zone should this ever be needed.
    The first zone, called the plume exposure pathway EPZ, is an area 
of about 10 miles in radius from the center of the plant. The major 
protective actions planned for this EPZ, evacuation and sheltering, 
supplemented by the prophylactic use of potassium iodide (KI), where 
States have chosen to add that measure, would be employed to reduce 
fatalities and injuries from exposure to the radioactive plume from the 
most severe of the core-melt accidents, and to limit unnecessary 
radiation exposures to the public from less severe accidents. The 
second zone, called the ingestion pathway EPZ, is an area of about 50 
miles in radius from the center of the plant. The major protective 
actions planned for this zone, putting livestock on stored feed and 
controlling food and water, would be employed to reduce exposure to the 
public from ingestion of contaminated food and water. The ingestion 
exposure pathway EPZ of 50 miles was selected because Federal 
protective action guidelines would generally not be exceeded beyond 50 
miles for a wide spectrum of hypothetical accidents. It is not likely 
that protective actions would need to be taken for the entire 10- or 
50-mile emergency planning zones, respectively, even for a significant 
release. However, these response measures can and will be expanded if 
the conditions of a particular accident so warrant.

    Question 24. I understand that on December 18, 2002, in five 
separate licensing proceedings for power plants, the NRC issued orders 
rejecting NEPA claims related to security risks because security risks 
are incalculable due to the undetermined probability of an attack. 
Please explain these NRC rulings in detail. How does/will the NRC 
address these security vulnerabilities in its licensing procedures for 
specific plants? Does the NRC's commitment to ``probabilistic risk-
informed management prevent the Agency from addressing security 
vulnerabilities?
    Response. In Private Fuel Storage (a dry cask independent spent 
fuel storage installation), Duke Cogema Stone & Webster (a mixed oxide 
fuel fabrication facility), Millstone (expansion of the spent fuel 
storage pool capacity at a commercial reactor site), and McGuire/
Catawba (license renewal for four commercial reactors), the Commission 
considered whether the National Environmental Policy Act (NEPA) 
requires the NRC, in rendering licensing decisions, to consider the 
impacts of terrorism.
    At the outset of its decision, the Commission stressed that it had 
already strengthened its security requirements for licensees in 
multiple areas, acting under its AEA-rooted duty to protect ``public 
health and safety'' and the ``common defense and security.'' The 
Commission also explained that further changes to address terrorist 
threats though the security and safeguards requirements for NRC-
regulated facilities could result from an ongoing examination of 
security regulations and programs.
    On the legal question concerning NEPA, the Commission held that 
NEPA does not require a terrorism review, and that an environmental 
impact statement is not the appropriate format in which to address the 
challenges of terrorism. The Commission's December 18 adjudicatory 
decision rested, essentially, on four grounds. First, the link between 
an agency licensing decision and terrorism is too speculative and 
remote from the licensing decision. Second, the risk of a terrorist 
attack at a nuclear facility cannot be adequately determined. The NRC's 
policy with respect to use of risk information is that this technology 
should be used to the maximum extent possible in all agency regulatory 
decisionmaking, to the extent practical, given the state of technology 
of risk methods and data [Ref: the Commission's PRA Policy Statement of 
1995]. In the case of assessing risk from terrorist acts, a major 
limitation in the state of technology is the inability to estimate the 
frequency of the initiating act. Since September 11, the NRC staff has 
been investigating means by which risk information can be used in 
security-related regulatory decisionmaking, even in recognition of this 
important limitation. Third, NEPA does not require a ``worst case 
analysis,'' which ``creates a distorted picture of a project's impacts 
and wastes agency resources.'' Lastly, NEPA's public process is not an 
appropriate forum for considering sensitive security issues. Moreover, 
given the Commission's existing efforts under the Atomic Energy Act, it 
was not obvious what additional information or insights a formal NEPA 
review of such issues would yield.

    Question 25. The citizens of Connecticut and across the United 
States are increasingly concerned about the safety and security of 
nuclear power plants near their homes, particularly during our 
heightened state of terrorism alert. What steps has the NRC taken to 
provide regular updates to the public about its ongoing work to address 
security concerns? What steps has the NRC taken to provide regular 
information to residents of areas surrounding individual plants about 
specific measures at those plants?
    Response. In the past, the NRC has striven to ensure public 
confidence by being one of the most open agencies in the U.S. 
Government. We recognize the reality that suspicions are nurtured if 
our activities are not fully accessible to the concerned public. 
However, we also recognize the counterbalancing consideration that open 
discussions of security issues could be exploited by terrorists. 
Therefore, the level of our communication with the general public on 
details of security issues has significantly decreased. We believe that 
extensive interaction with appropriately cleared stakeholders and 
local, State and Federal agency representatives, including the 
Department of Homeland Security and the individual State Homeland 
Security Advisors, is necessary to understand fully the potential 
ramifications of security-related decisions, to ensure reasonable and 
consistent application of security measures across national critical 
infrastructure, and to increase public confidence in the NRC's actions 
and the industry's preparedness to deal with terrorist attacks.
    In this light, the Agency has been meeting often with members of 
the industry, representatives of Federal agencies, including the 
Intelligence Community, and State and local law enforcement 
authorities, and the public when the information is not sensitive, and 
the public when the information is not sensitive, to resolve the issues 
and to ensure a range of perspectives are brought to bear in NRC 
decisionmaking. Although the sensitive nature of the information 
discussed prevents the NRC from opening all these meetings to the 
public, it is expected that the active involvement of Federal, State 
and local government agencies in these discussions will appropriately 
represent the public citizens' interests.
    The NRC also makes available an extensive public website that 
contains a wealth of information on our activities including 
nonsensitive security information. The Office of Public Affairs 
responds to media requests for information and writes press releases to 
announce significant activities. These resources and activities are 
designed to inform the public regularly of pertinent information on 
each plant in as much detail as allowed by requirements for protection 
of Safeguards Information.

    Question 26. I understand that NRC Atomic Safety Licensing Boards 
are currently adjudicating the ``Private Fuel Storage proposal, which 
would involve transporting 44,000 tons of high-level nuclear waste from 
reactors across the country to Utah. In the future, the NRC is also 
expected to consider a DOE license application for shipping 77,000 tons 
of waste to Yucca Mountain. Leaked results of an explosive test on a 
German CASTOR nuclear waste cask demonstrated its vulnerability to 
attack. Apparently, no explosive tests on currently licensed US 
transport casks have been performed. I also understand that the NRC has 
contracted with Sandia National Laboratories to perform limited 
physical tests on nuclear waste transportation casks (the Package 
Performance Study), but this study will not include explosive tests. 
Does the NRC plan to include explosive tests in the Package Performance 
Study test protocol, given the current security context?
    Response. The NRC has a comprehensive program examining security 
issues under the current threat environment. The Package Performance 
Study focuses on the safety of casks in severe transportation 
accidents, not deliberate criminal acts, so explosive threats are not 
part of the Package Performance Study.

    Question 27. What is the NRC currently doing to evaluate and 
address security vulnerabilities of nuclear waste shipments?
    Response. NRC's existing regulations currently contain significant 
safety and security requirements for the transport of radioactive 
material. After the September 11, 2001 event, we also issued advisories 
to increase security in transportation of specific types of radioactive 
material, including spent fuel shipments and shipments referred to as 
Highway Route Controlled Quantities of radioactive material. On October 
3, 2002, the Commission issued Orders to licensees transporting spent 
nuclear fuel and will be considering expedited rulemaking in this area 
as well. In consultation with the Departments of Transportation and 
Homeland Security, we are also reviewing transportation requirements as 
part of our comprehensive review of the safeguards and security 
programs. In addition, NRC is conducting vulnerability analyses to 
assess the risk and consequences of attacks on nuclear waste shipments. 
The results of these analyses will be used to decide on the need for 
any revisions to NRC requirements or regulatory oversight of nuclear 
waste shipments.

    Question 28. What concrete steps is the NRC taking to improve the 
safety culture within the Agency and clearly demonstrate to its staff 
and the public a commitment (to) effective regulation and protecting 
health and safety?
    Response. The results of the Office of the Inspector General's 2002 
Safety Climate and Culture Survey concluded that the NRC has made 
substantial progress in improving its safety culture and climate since 
the last survey was conducted in 1998. The OIG found that NRC has 
improved significantly across nearly every topical area, and in many 
categories the Agency's scores exceeded established national 
benchmarks. However, there were some areas where more information is 
needed to determine underlying causes of employee attitudes that are 
reflected in the areas for improvement and to develop strategies to 
systematically address the underlying causes. In particular, we need to 
further examine the reasons why only slightly more than half of NRC 
employees feel that it is ``safe to speak up in the NRC and how we can 
address that issue. We established a task group representing the major 
program offices to review the survey results, identify the key areas 
for improvement, identify potential options for improvement, and 
develop a schedule for implementing these actions. The task force 
report is due to the Executive Director for Operations (EDO). As 
discussed in the report, there are a number of strengths which should 
be maintained as well as areas for improvement. The Task Group will 
work with the contractor that conducted the survey to gain a better 
understanding of the survey results including the factors that 
influenced the results. This will allow us to identify and implement 
improvements in an efficient manner, while continuing to build on those 
improvements already underway.

    Question 29. What enforcement action will NRC take in response to 
the Davis-Besse incident?
    Response. The NRC staff has not yet arrived at final enforcement 
decisions, thus it is premature to speculate on what enforcement 
outcome is appropriate and when it will be taken. In accordance with 
the NRC Enforcement Policy, the staff will evaluate each identified 
violation and, considering the significance of the violations and the 
surrounding circumstances, will arrive at appropriate sanctions. Within 
this process, on February 25, 2003, the NRC issued a preliminary 
``Red'' significance determination for the apparent violations leading 
to the reactor vessel head incident. A ``Red'' classification signifies 
``high safety significance.'' Completing the significance determination 
for this performance deficiency is one input into the NRC's final 
decision on enforcement action.
    Another critical input will be the results of the ongoing 
investigation by the NRC's Office of Investigations to determine if 
willful violations occurred at Davis Besse. The NRC will also refer any 
Office of Investigation findings to the Department of Justice (DOJ) for 
prosecutive determination if there appear to be criminal violations 
within the NRC's jurisdiction. If DOJ declines to prosecute, the NRC 
would expect to take its enforcement action(s), including any civil 
penalties, within a few months of the completion of the Office of 
Investigations report. If DOJ pursues the case, we normally would not 
take enforcement action until the DOJ proceedings are complete.
    At the outset of its decision, the Commission stressed that it had 
already strengthened its security requirements for licensees in 
multiple areas, acting under its AEA-rooted duty to protect ``public 
health and safety'' and the ``common defense and security.'' The 
Commission also explained that further changes to address terrorist 
threats though the security and safeguards requirements for NRC-
regulated facilities could result from an ongoing examination of 
security regulations and programs.
    On the legal question concerning NEPA, the Commission held that 
NEPA does not require a terrorism review, and that an environmental 
impact statement is not the appropriate format in which to address the 
challenges of terrorism. The Commission's December 18 adjudicatory 
decision rested, essentially, on four grounds. First, the link between 
an agency licensing decision and terrorism is too speculative and 
remote from the licensing decision. Second, the risk of a terrorist 
attack at a nuclear facility cannot be adequately determined. The NRC's 
policy with respect to use of risk information is that this technology 
should be used to the maximum extent possible in all agency regulatory 
decisionmaking, to the extent practical, given the state of technology 
of risk methods and data [Ref: the Commission's PRA Policy Statement of 
1995]. In the case of assessing risk from terrorist acts, a major 
limitation in the state of technology is the inability to estimate the 
frequency of the initiating act. Since September 11, the NRC staff has 
been investigating means by which risk information can be used in 
security-related regulatory decisionmaking, even in recognition of this 
important limitation. Third, NEPA does not require a ``worst case 
analysis, which ``creates a distorted picture of a project's impacts 
and wastes agency resources.'' Lastly, NEPA's public process is not an 
appropriate forum for considering sensitive security issues. Moreover, 
given the Commission's existing efforts under the Atomic Energy Act, it 
was not obvious what additional information or insights a formal NEPA 
review of such issues would yield.

    Question 30. To what extent is the emphasis on production over 
safety, reported on at Davis-Besse, characteristic of operations at 
FirstEnergy's other nuclear power plants and reactors across the 
country?''
    Response. NRC is closely monitoring activities at other FirstEnergy 
plants, Beaver Valley and Perry, for indications of improper focus or 
emphasis. Based on the current NRC onsite inspection and integrated 
assessment activities, there have been no examples identified which 
would indicate an emphasis on production over safety as being 
characteristic of operation at either the Beaver Valley or Perry 
plants. To the contrary, there have been specific recent instances 
where FirstEnergy either shut down plant operations or maintained the 
plant shut down and sacrificed production in order to ensure that 
issues were fully understood and that safety was not impacted.
    In the case of the Beaver Valley Power Station, FirstEnergy has 
made efforts to improve performance since purchasing the facility from 
Duquesne Light Company in December 1999. For example, in April 2001, 
Beaver Valley Unit 1 was voluntarily shut down to replace degrading 
reactor coolant pump seals. The licensee did not attempt to defer this 
repair until a later scheduled outage, which might have been possible 
since the seals were performing adequately at the time. Additionally, 
in May 2002, Beaver Valley Unit 2 was voluntarily shut down to repair a 
Nitrogen line leak on the main transformer. Similarly, this repair 
might have been successfully deferred until a regularly scheduled 
outage. Several major voluntary projects have also been initiated over 
the last 2 years to improve overall safety performance. These projects 
include the Latent Issue Review Project, intended to identify and 
resolve latent deficiencies in risk significant and generation 
significant systems, and the Major Equipment Reliability Program, 
intended to replace major equipment with newer, more reliable equipment 
at the plant.
    In the case of FirstEnergy's Perry Station, in September 2002, the 
plant scrammed during performance of routine turbine testing. While 
attempting to reset the scram following the event, the operator 
identified that a scram discharge volume drain valve failed to function 
properly. FirstEnergy established a problem solving team which 
evaluated the component failure and recommended a design change which 
was implemented prior to unit restart. Additionally, this outage was 
used as an opportunity to replace a recirculation pump seal package 
which had been exhibiting degraded performance. Perry station 
management chose to extend the forced outage caused by the scram beyond 
the time needed to fix the specific problems which led to the shutdown 
in order to resolve these issues.
    With respect to the other operating reactors across the country, 
the NRC routinely observes licensees' performance in this area during 
its performance of baseline inspection activities across the country. 
Specific inspections include the monitoring of the plant operators' 
management of ``on-line risk,'' or the safety risk associated with 
taking important equipment out of service for maintenance while the 
plant is operating, rather than performing a plant shutdown to 
facilitate the maintenance activities. This ``maintenance 
effectiveness'' inspection procedure allows inspectors to determine 
whether licensees are improperly deferring equipment maintenance from 
shutdown conditions to power operations by evaluating this on-line risk 
component. The inspection is performed at every operating plant in the 
country. No significant adverse trends have been detected in this area 
that would suggest other utilities are improperly placing emphasis on 
production over safety by deferring maintenance to periods of power 
operation or to future scheduled outages.

    Question 31. Why did the NRC take such a weak approach to 
regulation at Davis-Besse, giving undue consideration to the financial 
outcomes of decisions critical to public health and safety?
    Response. The decisionmaking process used for addressing the issue 
of Control Rod Drive Mechanism (CRDM) cracking at Davis-Besse 
constituted an appropriate use of risk-informed decisionmaking. The 
information presented by the licensee and the staff analysis showed 
that the likelihood of a loss-of-coolant accident (LOCA) during the 
proposed period of time (from December 31, 2001 to February 16, 2002) 
was small. The staff performed independent calculations to verify that 
a LOCA resulting from a CRDM failure would be effectively mitigated by 
the Emergency Core Cooling Systems. Based on this information, the 
staff concluded that the increased risk of core damage was acceptably 
small and the risk of a Large Early Release (of radioactivity from 
within the containment structure) was very small. This analysis placed 
the results within our guidelines of small changes that were considered 
``acceptable with [continued] management attention.
    Management and staff, given the information available at the time 
the decision was made, concluded that the additional operating time did 
not pose an undue risk.
    The NRC's primary obligation is to ensure adequate protection of 
the public health and safety. Maintaining safety is the primary 
performance goal on which we base the most important of our decisions. 
Only if and when this performance goal is satisfied is there 
consideration of other goals, such as the goal to avoid undue 
regulatory burden. The Commission unanimously concluded that the staff 
did not give undue consideration to the financial outcomes of decisions 
critical to the public health and safety, but rather the staff ensured 
that safety was maintained as its primary obligation.

    Question 32. What steps is the NRC taking to prevent incidents 
similar to Davis-Besse at other nuclear facilities?
    Response. Immediately after discovery of the reactor pressure 
vessel head degradation at Davis-Besse, the NRC issued Bulletin 2002-
01, ``Reactor Pressure Vessel Head Degradation and Reactor Coolant 
Pressure Boundary Integrity,'' on March 18, 2002, requesting 
information from licensees concerning the structural integrity of the 
reactor coolant pressure boundary at pressurized-water reactors (PWR) 
and to assure that no other pressurized water reactors had a degraded 
reactor vessel head. On August 9, 2002, the NRC issued Bulletin 2002-
02, ``Reactor Pressure Vessel Head and Vessel Head Penetration Nozzle 
Inspection Programs,'' requesting information about licensees' plans 
for future inspections and programs for their reactor pressure vessel 
(RPV) heads and penetration nozzles, and providing a more rigorous 
vessel head inspection program that the NRC staff would find 
acceptable.
    The NRC staff issued Orders to PWR licensees in February 2003 to 
ensure that future inspections of RPV heads and penetration nozzles 
will supplement visual examination with non-visual non-destructive 
examination methods, further assuring that the conditions that led to 
the Davis-Besse head degradation will not occur at other plants.
    The NRC formed a Lessons Learned Task Force (LLTF) to review the 
Davis-Besse incident and make recommendations for improvement in the 
NRC's activities. The LLTF has completed its evaluation and made its 
recommendations. The NRC formed a Senior Management Review Team (SRT) 
to review the recommendations and the SRT has recommended approval of 
49 of the 51 recommendations from the LLTF. The NRC staff developed and 
forwarded to the Commission detailed action plans, which will 
facilitate the implementation of the higher priority recommendations. 
These action plans cover areas such as internal review of operating 
experience at nuclear facilities and boric acid corrosion control 
program inspections. The Commission directed the staff to proceed with 
the action plan.

       Responses by Richard Meserve to Additional Questions from 
                             Senator Carper

    Question 1. At today's hearing, you were kind enough to provide 
some background on the events related to release of small amounts of 
tritium at Salem 1 reactor. While I appreciated your response and that 
of the other commissioners regarding the effect of tritium, I remain 
concerned about the timeline regarding the effect of tritium, I remain 
concerned about the timeline regarding the notification of the public 
in cases such as this. Specifically, I would like to know on what date 
the NRC onsite inspector was aware of the situation at Salem? What date 
was the situation reported to the NRC by the plant owner, PSEG? And 
finally, on what date was a public notice of this event issued by the 
NRC?
    Response. On September 18, 2002, Public Service Electric and Gas 
(PSEG) identified contaminated water leakage into the Unit 1 Auxiliary 
Building and initiated an investigation. On November 20, 2002, PSEG 
informed the Salem NRC resident inspectors that the identified water 
leakage into the Unit 1 auxiliary building appeared, based on chemical 
and radiological analyses, to be similar to Unit 1 spent fuel pool 
water. Earlier, on October 1, PSEG had mentioned leakage evaluations to 
the Headquarters Project Manager as part of discussions on outage 
activities, and that the September 18 problem identification document 
was within the PSEG corrective action system.
    When notified, the NRC resident inspectors initiated a review of 
PSEG's actions and evaluations regarding the characterization of the 
leak. Senior regional specialists were sent to the site in early 
December 2002, to provide additional expertise in evaluating PSEG's 
actions relative to characterization of this leakage and its potential 
impact on workers, the public, and the environment. NRC resident and 
regional specialist oversight continued over the next several months 
through direct inspection by resident staff, as well as periodic visits 
and discussions by the regional specialists with PSEG and State of New 
Jersey representatives. No immediate health or safety concerns were 
identified for workers, the public, or the environment.
    On February 6, 2003, the initial inspection activities were 
documented on pages 25-26 of the enclosed quarterly resident inspection 
report (50-272/02-09) for the period ending December 28, 2002. Also, on 
February 6, 2003, PSEG formally reported to the State of New Jersey its 
identification of tritium in two onsite wells near the facility. This 
identification was the first discovery of tritium, external to plant 
structures, above the State's reporting requirement of 1000 pCi/l. 
Consistent with NRC regulations outlined in 10 CFR 50.72, on that same 
day, PSEG reported to the NRC, in an Event Notification (39566) 
(enclosed) that it had formally notified the State of New Jersey 
regarding ``a spill of radioactive material, specifically, tritium.''

                                 ______
                                 
                           Event Notification

  OFFSITE NOTIFICATION TO STATE AND LOCAL AGENCIES REGARDING TRITIUM 
                                 SPILL

    Notification was made to the State of New Jersey to report a spill 
of radioactive material, specifically, tritium at a concentration of 
6.92 E-5 microcuries/ml. The material is presently contained on the 
property of Salem Generating Station and was discovered at 0945 on 
February 6, 2003.
    Soil samples obtained at a depth of 20 feet from 2 monitoring wells 
indicates the presence of tritium. The monitoring wells are adjacent to 
Salem Unit 1 and within the protected area. We recently sampled all 
domestic water supplies and the results were negative. There is no 
indication of any offsite release, there is no threat to the public or 
company employees. We cannot determine at this time if this is an 
existing or historic condition. We are continuing with additional 
analysis to determine the source and extent of the condition.
    The licensee informed State agencies and the NRC resident inspector 
and will inform the local agency of LAC.

                                 ______
                                 
                                                  February 6, 2003.
Mr. Harold W. Keiser, Chief Nuclear Officer and President,
PSEG Nuclear LLC-N09,
P.O. Box 236,
Hancocks Bridge, NJ.

Subject: Salem Nuclear Generating Station--NRC Inspection Report 50-
272/02-09, 50-311/02-09

    Dear Mr. Keiser: On December 28, 2002, the NRC completed an 
inspection of Salem Unit 1 and Unit 2 reactor facilities. The enclosed 
report documents the inspection findings which were discussed on 
January 16, 2003 with Mr. Lon Waldinger and other members of your 
staff.
    The inspection examined activities conducted under your license as 
they relate to safety and compliance with the Commission's rules and 
regulations and with the conditions of your license. The inspectors 
reviewed selected procedures and records, observed activities, and 
interviewed personnel. Specifically, this inspection involved 3 months 
of resident inspection and region-based inspections by radiation 
protection, emergency preparedness, security and in-service inspection 
specialists.
    Based on the results of this inspection, the inspectors identified 
four issues of very low safety significance (Green). All of these 
issues were determined to involve violations of NRC requirements. 
However, because of their very low safety significance and because they 
have been entered into your corrective action program, the NRC is 
treating these issues as non-cited violations in accordance with 
Section VI.A.1 of the NRC's Enforcement Policy.
    Additionally, an unresolved item discussed in Inspection Report 02-
07 involving the failure to maintain the automatic fire suppression 
systems in six electrical areas was fully evaluated using the 
significance determination process during this period and found to be 
of very low significance (Green).
    If you deny the non-cited violations noted in this report, you 
should provide a response with the basis for your denial within 30 days 
of the date of this inspection report to the Nuclear Regulatory 
Commission, ATTN: Document Control Desk, Washington, DC 20555-0001 with 
copies to the Regional Administrator, Region I; the Director, Office of 
Enforcement; and the NRC Resident Inspector at the Salem facility. The 
NRC's program for overseeing the safe operation of commercial nuclear 
power reactors is described at its Reactor Oversight Process website at 
http://www.nrc.gov/reactors/operating/oversight.html.
    Since the terrorist attacks on September 11, 2001, the NRC has 
issued two Orders (dated February 25, 2002 and January 7, 2003) and 
several threat advisories to licensees of commercial power reactors to 
strengthen licensee capabilities, improve security force readiness, and 
enhance access authorization. The NRC also issued Temporary Instruction 
2515/148 on August 28, 2002 that provided guidance to inspectors to 
audit and inspect licensee implementation of the interim compensatory 
measures (ICMs) required by the February 25th Order. Phase 1 of TI 
2515/148 was completed at all commercial nuclear power plants during 
calendar year (CY) 2002, and the remaining inspections are scheduled 
for completion in CY 2003. Additionally, table-top security drills were 
conducted at several licensees to evaluate the impact of expanded 
adversary characteristics and the ICMs on licensee protection and 
mitigative strategies. Information gained and discrepancies identified 
during the audits and drills were reviewed and dispositioned by the 
Office of Nuclear Security and Incident Response. For CY 2003, the NRC 
will continue to monitor overall safeguards and security controls, 
conduct inspections, and resume force-on-force exercises at selected 
power plants. Should threat conditions change, the NRC may issue 
additional Orders, advisories, and temporary instructions to ensure 
adequate safety is being maintained at all commercial power reactors.
    In accordance with 10 CFR 2.790 of the NRC's ``Rules of Practice,'' 
a copy of this letter and its enclosure will be available 
electronically for public inspection in the NRC Public Document Room or 
from the Publicly Available Records (PARS) component of NRC's document 
system (ADAMS). ADAMS is accessible from the NRC Web site at http://
www.nrc.gov/reading-rm/adams.html (the Public Electronic Reading Room).
            Sincerely,
                                     Glenn W. Meyer
                                  Chief, Projects Branch 3,
                                      Division of Reactor Projects.
                                 ______
                                 
                   U.S. Nuclear Regulatory Commission
                                Region I
Docket Nos: 50-272, 50-311

License Nos: DPR-70, DPR-75

Report No: 50-272/2002-09, 50-311/2002-09

Licensee: PSEG Nuclear LLC (PSEG)

Facility: Salem Nuclear Generating Station, Unit 1 and 2

Location: P.O. Box 236, Hancocks Bridge, NJ 08038

Dates: October 1-December 28, 2002

Inspectors: Raymond K. Lorson, Senior Resident Inspector; Fred L. 
Bower, Resident Inspector; Michael C. Modes, Senior Reactor Inspector; 
Dave Silk, Senior Emergency Preparedness Inspector; Jason Jang, Senior 
Radiation Specialist; Joseph T. Furia, Senior Health Physicist; 
Frederick Jaxheimer, Reactor Inspector; Suresh Chaudhary, Reactor 
Inspector; Roy L. Fuhrmeister, Senior Reactor Inspector

Approved By: Glen W. Meyer, Chief, Projects Branch 3, Division of 
Reactor Projects

                           INSPECTION REPORT

       Summary of Findings--IR 05000272-02-09, IR 05000311-02-09
    Public Service Electric Gas Nuclear LLC, Salem Unit 1 and Unit 2 on 
10/1-12/28/02, Heat Sink Performance, Fire Protection, Emergent Work, 
Refueling and Outage, and Temporary Modifications.
    The report covered 3 months of inspection by resident inspectors 
and also included inspection by regional specialists in radiation 
protection, fire protection, security, emergency preparedness and in-
service inspection. This inspection identified five green issues which 
were non-cited violations (NCVs). The significance of most findings is 
indicated by their color (Green, White, Yellow, or Red) using 
Inspection Manual Chapter 0609, Significance Determination Process 
(SDP). Findings for which the SDP does not apply may be ``Green'' or be 
assigned a severity level after NRC management review. The NRC's 
program for overseeing the safe operation of commercial nuclear power 
reactors is described in NUREG-1649, Reactor Oversight Process, 
Revision 3, dated July 2000.

                    A. INSPECTOR IDENTIFIED FINDINGS

Cornerstone: Mitigating Systems

     Green. The inspectors identified that the thermal 
performance testing of heat exchangers in the component cooling water 
(CCW) system was inadequate, in that readily apparent CCW flow rate 
errors existed.
    This NCV of 10 CFR 50, Appendix B, Criterion VI, ``Test Controls,'' 
is greater than minor, because it affected the Mitigating System 
Cornerstone objective of equipment reliability, in that inadequate test 
controls could allow a degraded heat exchanger to go undetected. This 
finding was of very low significance, because the CCW heat exchangers 
remained operable when the flow measurement errors were corrected in 
subsequent evaluations. Also, this finding had an aspect of problem 
identification and resolution, in that an apparent error was not 
identified. (Section R07)
     Green. The inspectors identified that the records of 
troubleshooting and repair activities on the 1PR2 valve and on the 22 
containment fan cooling unit were incorrect and incomplete.
    This NCV of TS 6.10.1.b (records) was greater than minor, because 
it impacted the inspectors' ability to independently assess the 
condition of these components following maintenance activities and it 
affected the Mitigating Systems Cornerstone equipment reliability 
objective. This finding was of very low significance, because the 
components performed acceptably during the post-maintenance testing. 
Also, this finding had an aspect of problem identification and 
resolution, in that it indicated that corrective actions for a 
previous, similar violation (IR 2001-12) had not been effective. 
(Section R13).
     Green. A required decay heat removal support system (11 
CCW room cooler) was removed from service at conditions not permitted 
by Technical Specifications (TS) (refueling cavity level less than 23 
feet.)
    An NCV of TS 6.8.1 was identified for failure to establish and 
implement adequate procedures to control the removal of the 11 CCW room 
cooler from service for maintenance. This finding was greater than 
minor, because it affected the Mitigating System Cornerstone objective 
of equipment availability, in that it resulted in a condition where two 
residual heat removal systems were not operable when required by TS. 
The finding was determined to be of very low significance, since the 11 
CCW pump remained functional when the fan was out of service without 
the necessary compensatory measures. (Section R20)
     Green. The inspectors identified that a temporary 
modification (hose connection and pump) to an operable service water 
header was not properly evaluated.
    This NCV of 10 CFR 50, Appendix B, Criterion III, Design Controls 
was greater than minor, because it affected the Mitigating System 
Cornerstone objective of equipment reliability, in that it could have 
affected the operability of the only service water header while reactor 
de-fueling operations were in-progress. This finding was determined to 
be of very low significance, as the service water header remained 
functional while the hose was attached. (Section R23)
     Green. PSEG did not properly maintain room isolation 
barriers and improperly implemented a modification to the switchgear 
penetration area ventilation system, both of which caused an existing 
fire protection concern on carbon dioxide (CO2) 
concentration to be exacerbated. This finding represents the completion 
of an unresolved item identified in Inspection Report 2002-07 regarding 
the automatic fire suppression system in six safety-related electrical 
areas addressed by the fire protection program.
    When fully evaluated, this finding was determined to be an NCV for 
failure to maintain the fire protection program as required by License 
Conditions 2.C.5 (Unit 1) and 2.C.10 (Unit 2). The finding was greater 
than minor, because it adversely affected the Mitigating System 
Cornerstone objective regarding fire suppression equipment capability. 
The finding was determined to be of very low significance due to the 
multiple trains of mitigating systems which would have survived 
postulated fire events. Also, this finding had an aspect of problem 
identification and resolution, in that ineffective problem evaluation 
existed regarding the preventive maintenance and modifications on the 
affected equipment. (Section OA5.3)

                                 ______
                                 
                             Report Details

                        SUMMARY OF PLANT STATUS

    Unit 1 began the period at full power. On October 10, 2002, the 
unit was shutdown to begin refueling outage 1R15 (Section R20). On 
November 5 the unit was taken critical and power ascension continued 
until November 12 when the unit was returned to full power. On November 
12, the unit was manually tripped in response to a lowering steam 
generator water level condition. The event was investigated and the 
unit was returned to a critical mode on November 12 (Section R14). The 
unit operated at approximately full power for the remainder of the 
period with the exception of power reductions performed at the request 
of the offsite load dispatcher.
    Unit 2 operated throughout the period at approximately full power 
with the exception of power reductions performed at the request of the 
offsite load dispatcher.

1. Reactor Safety
            Initiating Events, Mitigating Systems, and Barrier 
                    Integrity [Reactor--R]

    1R01 Adverse Weather Protection
    a. Inspection Scope.--On December 10 the inspectors performed a 
walkdown of the Salem Unit 1 and Unit 2 service water (SW) system, 
refueling water storage tanks, auxiliary feedwater storage tanks, and 
related heat trace systems to review whether preparations for cold 
weather conditions were appropriate and consistent with operations 
procedure, SC.OP-PT.ZZ-0002(Q), ``Station Preparations for Winter 
Conditions.'' The inspectors also reviewed S1.OP-AB.ZZ-0001(Q), 
``Adverse Environmental Conditions,'' to determine whether PSEG had 
defined responsibilities for tornados, hurricanes and high wind 
conditions.

    b. Findings.--No findings of significance were identified.
    1R04 Equipment Alignment
    a. Inspection Scope.--The inspectors performed two partial system 
walkdowns during the Unit 1 refueling outage (1R15). On multiple days 
the inspectors walked down the 1 SW bay while the 3 SW bay was removed 
from service for maintenance. The inspectors also walked down the 
redundant emergency diesel generators (EDGs) while the EDG associated 
with the out-of-service SW bay was removed from service. Each Unit 1 
EDG was removed from service for maintenance during 1R15. To evaluate 
the operability of the selected train or system when the redundant 
train was out of service, the inspector checked for correct valve and 
power alignments by comparing the positions of valves, switches and 
electrical power breakers to system diagrams. The inspector also 
verified that key standby and support system process parameters were 
acceptable to support operation of the redundant equipment.

    b. Findings.--No findings of significance were identified.
    1R05 Fire Protection
    .1 Fire Area Walkdowns
    a. Inspection Scope.--During the weeks beginning on December 15 and 
December 22, the inspectors walked down accessible portions of six 
areas described below to assess PSEG's control of transient combustible 
material and ignition sources, fire detection and suppression 
capabilities, fire barriers, and any related compensatory measures. As 
part of the inspection, the inspectors reviewed fire protection 
procedure, NC.NA-AP-0025, ``Operational Fire Protection Program,'' and 
engineering document, DE.PS.ZZ-0001-A2-FHA, revision 5, ``Salem Fire 
Protection Report--Fire Hazards Analysis,'' to ascertain the 
requirements for required fire protection design features, fire area 
boundaries, and combustible loading requirements for these areas. The 
following areas were reviewed:
     11 and 12 Diesel Fuel Oil Transfer Pump Rooms (fire areas 
1FA-DG-84H and 1FA-DG-84G)
     Unit 1 and Unit 2 Carbon Dioxide Equipment Rooms (fire 
areas 1FA-DG-84F and 2FA-DG-84F)
     21 and 22 Diesel Fuel Oil Transfer Pump Rooms (fire areas 
2FA-DG-84H and 2FA-DG-84G)
    The inspectors reviewed the following notifications to determine 
whether PSEG appropriately addressed these issues in accordance with 
their corrective action program:
     Notification 20125638 which identified the failure to 
close fire impairment permits when repairs to fire barriers were 
completed.
     Notification 20127260 which documented an inspector 
identified issue involving two potentially degraded fire barrier seals 
(Unit 1).
     Notification 20125301 which involved excessive cycling of 
the carbon dioxide tank compressor (Unit 1).

    b. Findings.--No findings of significance were identified.
    .2 Unannounced Fire Drill Observation
    a. Inspection Scope.--The inspectors observed an unannounced, off-
hours fire drill on December 4, 2002. The drill involved having the 
fire brigade respond to a simulated electrical breaker fire in the 
safety-related 84 foot elevation electrical switchgear room at Salem 
Unit 2. The inspectors verified that the fire brigade responded to the 
hazard area with appropriate breathing apparatus, protective clothing, 
and fire fighting equipment. Additionally, the inspectors verified that 
the fire brigade leader adequately directed the actions of the fire 
brigade, referred to the fire fighting response procedures and 
communicated the fire status to the plant operators. The inspectors 
also verified that the fire brigade established a monitor to ensure 
that the fire did not re-flash and searched the area for potential fire 
victims, and also observed the post-drill critique.
    The inspectors reviewed notification 20125652 which identified a 
deficiency in the development of the fire drill scenario and 
notification 20125656 which identified that a notification was not 
promptly developed for the scenario deficiency to assess whether PSEG 
was appropriately entering items into the corrective action program for 
resolution.

    b. Findings.--No findings of significance were identified.
    1R06 Flood Protection Measures
    a. Inspection Scope.--The inspectors reviewed flood protection 
measures for external sources as described in the Individual Plant 
Examination for External Events. The inspectors reviewed procedure 
SC.MD-PM.ZZ-0036, ``Watertight Door Inspection and Repair,'' and 
selected completed watertight door inspection records. The inspectors 
also reviewed procedure SC.FP-SV.FBR-0026, ``Flood and Fire Barrier 
Penetration Seal Inspection,'' and selected 2002 completed flood seal 
inspection records. The inspectors observed that seal discrepancies 
were documented in notification 20102951. This inspection also included 
tours of various plant areas including 64 feet and 84 feet electrical 
switchgear rooms for Units 1 and 2 that were identified as risk 
significant. The inspector located and toured an underground service 
water pipe and cable tunnel with PSEG engineering personnel. The 
inspectors noted what appeared to be groundwater dripping from several 
conduit seals. Sump pumps in this area had discrepancies which appeared 
to prevent automatic operation.
    The inspectors also attempted to locate and inspect additional 
underground bunkers/manholes subject to flooding that contained risk-
significant cables. At the conclusion of the inspection period, PSEG 
had not identified and provided access to all underground cable vaults 
with safety-related cables. PSEG initiated notification 20127365 to 
inspect the safety-related cable vaults at Salem. PSEG was also 
evaluating their underground cables to determine whether the cables 
were qualified for wetted or submerged service. PSEG initiated 
notification 20105022 to capture these issues in the corrective action 
program. At the completion of this inspection period, the engineering 
evaluation (order 80048125) for these issues had not been completed. 
Therefore, the inspectors were unable to determine whether PSEG 
implemented appropriate corrective actions for industry operating 
experience related to submerged safety-related electrical cables. This 
issue remains unresolved pending further review of PSEG's actions for 
submerged safety-related electrical cables. (URI 50-272 and 311/02-09-
01).

    b. Findings.--No findings of significance were identified.
    1R07 Heat Sink Performance
    a. Inspection Scope.--The inspectors reviewed 12A and 12B CC system 
heat exchanger performance test data collected on October 11, 2002, to 
verify that the heat exchangers met the performance requirements and 
assumptions specified in engineering calculation, S-C-CC-MDC-1798, 
revision 3, ``Component Cooling System Heat Exchangers.'' Additionally, 
the inspectors examined service water and component cooling system 
drawings, reviewed operations procedure, S1.OP-PT.SW-0017, ``12 
Component Cooling Heat Exchanger Heat Transfer Performance Data 
Collection,'' and interviewed a design engineer to verify that the test 
methodology accounted for instrument inaccuracies and differences 
between test and design basis conditions.
    The inspectors also reviewed notification 20125915 which documented 
inspector identified performance test deficiencies to ensure that PSEG 
appropriately entered these issues into the corrective action program 
for resolution. One of the deficiencies involved the failure to 
maintain the data acquisition system test data as required by procedure 
S1.OP-PT.SW-0017. The failure to maintain this quality record affected 
the inspectors' ability to confirm that the average test data values 
were representative of the individual test data samples and was similar 
to the findings discussed Section R13.
    b. Findings
    Introduction. The inspectors identified that the thermal 
performance testing of heat exchangers in the component cooling water 
(CCW) system was inadequate, in that readily apparent CCW flow rate 
errors existed. This finding was determined to be of very low 
significance and was considered a non-cited violation of Appendix B, 
Criterion XI, ``Test Control.''
    Description. The thermal performance testing of the 12A and 12B CC 
heat exchangers was performed in accordance with operations procedure 
S1.OP-PT.SW-0017. The test was designed to compute the fouling factor 
for each heat exchanger based on measured SW and CC system process 
parameters.
    The inspectors identified that the flow values recorded for the CC 
heat exchangers (CC side) were less than the values recorded for the 
same flow stream through the residual heat removal (RHR) heat exchanger 
(i.e. 2636 gpm for the 12B CC heat exchanger vs 3000 gpm for the RHR 
heat exchanger). This was a readily apparent discrepancy since the 
flowrate through the CC heat exchanger, which supplied both the RHR 
heat exchanger in addition to other loads, should have been larger than 
the CC flowrate through the RHR heat exchanger.
    This flow discrepancy introduced a non-conservative error into the 
determination of the 12A and 12B CC heat exchanger fouling factors. A 
PSEG engineer re-computed the fouling factors assuming the higher flow 
values and determined that the heat exchangers remained operable.
    Analysis. The inspectors determined that this finding was 
associated with the procedural quality attribute that affected the 
reliability objective of the Mitigating Systems Cornerstone to properly 
monitor the CC heat exchanger thermal performance, and is therefore 
greater than minor. If left uncorrected, this finding could result in a 
more significant safety concern (i.e. the failure to identify 
unacceptable CC heat exchanger performance through testing). This 
finding was evaluated using the Phase I worksheet of the significance 
determination process (SDP) and determined to be of very low risk 
significance (Green), since the CC heat exchangers remained operable 
when the flow measurement error was corrected. Also, this finding had 
an aspect of problem identification and resolution, in that an apparent 
error was not identified.
    Enforcement. 10 CFR 50, Appendix B, Criterion XI, ``Test Control,'' 
requires, in part, that a test program shall be established to assure 
that all testing required to demonstrate that structures, systems, and 
components will perform satisfactorily in service is identified and 
performed in accordance with written test procedures. Contrary to the 
above, PSEG failed to develop adequate procedural controls for 
measuring the flow through the CC heat exchanger during thermal 
performance testing. Because the failure to adequately measure the flow 
through the CC heat exchanger during thermal performance testing was 
determined to be of very low significance and has been entered into the 
corrective action program (notification 20129515), this violation is 
being treated as a non-cited violation (NCV) consistent with Section 
VI.A of the NRC Enforcement Policy: NCV 50-272/02-09-02, Failure to 
Properly Test the 12 Component Cooling Heat Exchanger.

    1R08 Inservice Inspection Activities
    .1 Inservice Inspection
    a. Inspection Scope.--The inspector reviewed the repair of the 
refueling water storage tank (RWST) to assure it was in compliance with 
the American Society of Mechanical Engineers (ASME) Boiler and Pressure 
Vessel Code (Code). The inspector also reviewed whether PSEG addressed 
the pre-repair condition of the RWST in accordance with ASME Code 
requirements as discussed in Inspection Report 50-272/01-07 (unresolved 
item (URI) 50-272/01-07-01).
    The inspector reviewed the work order implementing the visual 
examination of the reactor head of Unit 1, which included photographic 
examples of penetration leaks from Surry, Oconee, Davis Besse, and 
Crystal River 3, in order to evaluate the scope of the visual 
inspections undertaken by PSEG in response to NRC Bulletin 2002-002. 
The inspector reviewed the visual examination procedure and the 
qualifications of the individuals implementing the visual inspection. 
The inspector reviewed the disposition of the visual examination of the 
head, which indicated there was no evidence of leakage of any kind, 
either from the head penetration or the canopy seal. With the 
inspection personnel who performed the inspection of the reactor head, 
the inspector discussed the visual evaluation of developer residue 
remaining on some of the canopy seal welds. Additionally the inspector 
reviewed the supporting documents for a number of nondestructive 
examinations that had been completed to determine their compliance with 
the ASME Boiler and Pressure Vessel Code requirements.
    The inspector reviewed the Salem Unit 1 Steam Generator Program, 
Steam Generator Aging Management Program, and Steam Generator 
Operational Assessment. The inspector observed the location 
verification for the acquisition of automated eddy current data taken 
from steam generator 14, Column 11, Row 62 taken simultaneously with 
data from a tube located at Column 11, Row 63, using the Framatome 
ROGER manipulator, to verify the data set was controlled and 
opportunities were introduced in the data collection process to capture 
location errors that might cause data offsets. The inspector reviewed, 
with the independent Level III eddy current data analyst, the anomalous 
eddy current drift data of steam generator 14 in the tube located at 
column 10, row 83, the tube located at column 4, row 75, and the tube 
located at column 2, row 85.
    The inspector reviewed the data to determine if PSEG was taking 
into account the lessons-learned at Seabrook Unit 1 steam generators 
because the Salem Unit 1 generators were purchased from Seabrook Unit 2 
as replacement generators and are identical in critical areas to 
Seabrook Unit 1. The inspector discussed the increase in the number of 
anti-vibration bar wear indications between refueling outage 13 and 14 
in order to ascertain what evaluations had been performed. The 
inspector reviewed the disposition of loose parts in steam generator 11 
at tube location Row 1 Column 3 and in steam generator 14 at location 
row 2, column 23. In addition, the inspector discussed, with the 
independent eddy current analyst and PSEG steam generator principal 
engineer, the current evaluation of the previously discovered loose 
parts at row 42, column 62 and column 63 in steam generator 14 in order 
to determine if a previous commitment to monitor and evaluate these 
unplugged tubes had been implemented during the current outage.
    The inspector reviewed randomly selected corrective actions in the 
Steam Generator and Inservice Inspection Programs to determine if 
actions related to the programs were being addressed.
    b. Findings. No findings of significance were identified.
    The inspector determined that PSEG addressed the pre-repair RWST 
condition in accordance with the ASME Code and concluded that no 
violation of NRC requirements had occurred. Therefore, URI 50-272/01-
07-01 is closed.

    1R11 Licensed Operator Requalification
    a. Inspection Scope.--On November 14, 2002, the inspectors observed 
a licensed operator simulator training scenario to assess operators' 
performance and evaluators' critiques. The scenario observed involved 
operator response to a reduction in main transformer cooling and the 
implementation of abnormal procedure S2.OP-AB.LOAD-0001(Q), ``Rapid 
Load Reduction.'' The scenario also involved operator response to a 
leak in the charging system and the implementation of abnormal 
procedures S2.OP-AB.RC-0001(Q), ``Reactor Coolant System Leak'' and 
S2.OP-AB.RAD-0001, ``Abnormal Radiation.'' The inspectors observed the 
in-process critiques conducted by the evaluators in the simulator, and 
reviewed the areas for improvement that were entered into the operator 
training department critique data base.
    b. Findings. No findings of significance were identified.

    1R12 Maintenance Rule Implementation
    a. Inspection Scope.--The inspectors reviewed recent operating 
problems, notifications, system health reports, and maintenance rule 
(MR) performance criteria to determine whether PSEG had effectively 
monitored the performance of the Unit 1 CC water system and the Unit 1 
pressurizer safety relief valves (included with the reactor coolant 
system MR data). The inspector reviewed the planned and completed 
corrective actions for recent system problems involving elevated CC 
pump vibrations and also for a pressurizer ``as found'' set pressure 
test failure (notification 20116997) to ensure that these problems were 
appropriately addressed. The inspector also reviewed PSEG's assessment 
of these issues to evaluate the adequacy of the functional failure 
determinations.
    b. Findings. No findings of significance were identified.

    1R13 Maintenance Risk Assessments and Emergent Work Evaluation
    .1 12 Service Water Header Piping Inspection and WEKO Seal Repair
    a. Inspection Scope.--The inspectors reviewed selected maintenance 
activities associated with the inspection and permanent sealing of the 
12 SW header. On November 30, 2001, a leak was discovered on the 12 SW 
header that was repaired with a temporary rubber WEKO seal. NRC review 
of the operability determination associated with this temporary repair 
was documented in Section 1R15.2 of Inspection Report 2002-07. The 
inspectors reviewed the maintenance records and inspection results of 
the maintenance activities (order 60024893) to inspect this concrete 
piping in accordance with engineering change authorization (ECA) 
80044126, ``No. 12 Service Water Header Piping WEKO Seal 
Installation.'' The review also verified that plant risk was properly 
managed during the installation activities.
    b. Findings. No findings of significance were identified.

    .2 Power Operated Relief Valve 1PR2 Repair
    a. Inspection Scope.--The inspectors reviewed selected emergent 
maintenance activities associated with the troubleshooting and repair 
of Unit 1 power operated relief valve (PORV), 1PR2 and its air operated 
actuator. The 1PR2 valve lifted, caused a brief depressurization during 
plant heat-up, and caused the plant to be cooled down for 
troubleshooting and repairs. The outage control center (OCC) initiated 
a TARP Team (notification 20119917) that implemented the technical 
issues process. PSEG attributed the unexpected lifting of 1PR2 to a 
maintenance technician's failure to install a required spacer during 
the completion of order 60023070. PSEG's root cause analysis of this 
event was performed under notification 20120466 and order 70028106. The 
root cause analysis report had not been issued by the end of the 
inspection period.
    The inspectors reviewed the maintenance records and the results of 
the maintenance activities to repair 1PR2 under orders 60032780 and 
60032911. The inspectors reviewed the completed maintenance procedure, 
SC.IC-PM.RC-0001(Q), ``Pressurizer PORV Valve Actuator Maintenance.'' 
The inspectors also interviewed selected engineering and work planning 
personnel. The inspectors also verified that NRC identified 
discrepancies associated with the calculations of the valve internal 
measurements were documented in notification 20122636.
    b. Findings
    Introduction. The inspectors identified that the records of 
troubleshooting and repair activities on the 1PR2 valve were incorrect 
and incomplete. This finding was evaluated and determined to be of very 
low risk significance (Green), because it did not directly affect the 
operation of a mitigating system. This finding was a recurrence of a 
violation (NCV 2001-12-02) that was previously identified in NRC 
Inspection Report (IR) 2001-12 and indicated that previous attempts to 
correct this problem were ineffective.
    Description. During the review of orders 60032780 and 60032911, the 
inspectors noted discrepancies between the electronic records of the 
work orders and the paper records of the work orders. The discrepancies 
were related to procedures specified to be used versus the procedures 
actually used. The actual work and troubleshooting records were 
incomplete and did not document the principal maintenance activities. 
The inspectors also noted that the 1PR2 air actuator test record was 
retained by the valve engineering in lieu of being retained as a 
quality record. PSEG initiated notifications 20125602 and 20125560 to 
capture these issues in the corrective action program.
    Analysis. This finding adversely impacted the inspectors' ability 
to perform their regulatory oversight function to independently assess 
the operability of equipment important to safety. The finding affected 
the Mitigating System Cornerstone reliability objective and was 
therefore greater than minor. The finding was determined to be very low 
safety significance (Green) since the 1PR2 has been functioning 
satisfactorily since the completion of the maintenance and post-
maintenance testing. Also, this finding had an aspect of problem 
identification and resolution, in that it indicated that corrective 
actions for a previous, similar violation (IR 2002-12) had not been 
effective.
    Enforcement. Technical Specification (TS) 6.10.1.b requires that 
records and logs of principal maintenance activities, inspections, 
repair and replacement of principal items of equipment related to 
nuclear safety be retained for at least 5 years. Contrary to the above, 
PSEG failed to maintain complete and adequate records of inspection and 
maintenance activities performed on the 1PR2. This very low risk 
violation has been entered in the corrective action program 
(notification 20091973) and is being treated as the first example of a 
non-cited violation consistent with the Section VI.A of the NRC's 
Enforcement Policy: NCV 50-272 and 50-311/02-09-03.
    .3 22 Containment Fan Cooling Unit (CFCU)
    a. Inspection Scope.--The inspectors reviewed selected emergent 
maintenance activities associated with the troubleshooting and repair 
of 22 CFCU and its associated flow control valves. These activities 
were selected for inspection, because following scheduled maintenance, 
the 22 CFCU began oscillating from 0-2000 gpm when returned to service. 
Additional aspects of this issue were documented in Sections R15 and 
R19. Engineering personnel were assembled to implement the technical 
issues process. The inspectors reviewed the following corrective action 
and work order documents associated with this issue:
     Notifications 20122677 and 20122736 and order 60033111
     Notifications 20122710 and order 60033240
     Order 60032382
    The inspectors reviewed all the maintenance records and results of 
the maintenance activities provided by PSEG for repairs to the flow 
controls for the 22 CFCU under orders 60033240, 60033111 and 60032382. 
The inspectors reviewed the records of the completed procedure used, 
SH.MD-AP.ZZ-0002(Q), ``Maintenance Department Troubleshooting and 
Repair'' for troubleshooting in accordance with order 60033240.
    The inspectors verified that an inspector-identified discrepancy 
associated with PSEG's failure to include the unavailability of the 22 
CFCU in the weekly risk assessment (week 99), when the work was carried 
over from work week 98, was entered into the corrective action process 
and documented by notification 201220123088.
    b. Findings
    Introduction. The inspectors identified that the records of 
troubleshooting and repair activities on the the 22 containment fan 
cooling unit were incorrect and incomplete. This was the second example 
of this finding. This finding was evaluated and determined to be of 
very low risk significance (Green), because it did not directly affect 
the operation of a mitigating system.
    Description. During the review of notifications 20122677, 20122736 
and 20122710, and orders 60033111, 60033240 and 60032382, the 
inspectors noted discrepancies between the electronic records of the 
work orders and the paper records of the work orders related to 
procedures used. The inspectors also noted that the records of the 
actual work performed were incomplete. Some examples of this 
observation included: records were not found for troubleshooting under 
order 60033111; records were not found for Temporary Modification (TM) 
02-036 that was installed and removed under order 60033240; and records 
were not found for testing under order 60032382. Neither the electronic 
nor the paper records provided the documentation of these principal 
maintenance activities. PSEG documented these issues in the corrective 
action program.
    Analysis. This finding adversely impacted the inspectors' ability 
to perform their regulatory oversight function to independently assess 
the operability of equipment important to safety. This finding affected 
the Mitigating System Cornerstone reliability objective and was 
therefore greater than minor. The finding was of very low safety 
significance, since the 22 CFCU had been tested and found operable 
during post maintenance testing and in service. Also, this finding had 
an aspect of problem identification and resolution, in that it 
indicated that corrective actions for a previous, similar violation (IR 
2002-12) had not been effective.
    Enforcement. Technical Specification 6.10.1.b requires that records 
and logs of principal maintenance activities, inspections, repair and 
replacement of principal items of equipment related to nuclear safety 
be retained for at least 5 years. Contrary to the above, PSEG failed to 
maintain complete and adequate records of inspection and maintenance 
activities performed on the 22 CFCU. This very low risk violation has 
been entered in the corrective action program and is being treated as 
the second example of a non-cited violation consistent with Section 
VI.A of the NRC's Enforcement Policy: NCV 50-272 and 50-311/02-09-03.
    .4 Other Emergent Maintenance Activities
    a. Inspection Scope.--The inspectors reviewed additional selected 
maintenance activities through direct observation, document review 
(risk assessment reviews, operating logs, industry operating experience 
and notifications), and personnel interviews. This review was performed 
to determine whether PSEG properly assessed and managed the risk, and 
performed these activities in accordance with applicable TS and work 
control requirements, including the administrative procedures for 
managing risk associated with conducting maintenance activities during 
both on-line and outage conditions. The following activities were 
reviewed:
     1A, 1B and 1C EDG maintenance outages during 1R15.
     Unit 1 forced outage activities on November 12, 2002.
     Installation of a bus link on the 2C battery on November 
12, 2002.
    b. Findings. No findings of significance were identified.

    1R14 Personnel Performance During Non-routine Plant Evolutions
    .1 Synchronizing Main Generator to the Grid
    a. Inspection Scope.--The inspectors observed selected portions of 
the preparations and synchronization of the main generator to the grid 
on November 6, following the Unit 1 refueling outage and return to Mode 
1. The inspectors verified that the activities were performed in 
accordance with S1.OP-SO.TRB-0001(Q), ``Turbine Generator Startup 
Operations.'' The inspectors noted that management oversight was 
provided by an assistant operations manager and also that identified 
procedural problems were placed into the corrective actions program 
(notifications 20120646 and 20120831).
    b. Findings. No findings of significance were identified.

    .2 Power Operated Relief Valve 1PR2 Lift During Plant 
Pressurization
    a. Inspection Scope.--During plant heatup on November 1, 2002, the 
1PR2 PORV lost closed indication and reactor coolant system pressure 
began to lower. Attempts to close the valve manually were unsuccessful 
and the pressure reduction was terminated by closing the PORV block 
valve, 1PR7. A transient assessment response plan (TARP) team was 
assembled. Subsequently, the plant was cooled down and the valve 
internals were inspected. PSEG determined that a spacer from the 
internal trim package had not been reinstalled when the 1PR2 was worked 
on during the outage. The inspectors verified that this issue was 
entered into the corrective action program (notification 20119917) and 
a level 1 root cause analysis and a review of the human performance 
aspects were planned. The inspectors observed and monitored selected 
portions of the TARP team activities.
    b. Findings. No findings of significance were identified.

    .3 Manual Reactor Trip of Salem Unit 1 Due to Low S/G Water Level 
Caused by Feed Pump Runback
    a. Inspection Scope.--The inspectors reviewed the response to a 
Unit 1 reactor trip that occurred on November 12, 2002 following the 
unexpected loss of the 11 main feedwater pump. The 11 main feedwater 
pump trip was caused by the momentary shorting of an electrical probe 
to ground during a troubleshooting activity. The inspectors reviewed 
this event to ensure that the operator response was appropriate and in 
accordance with operating procedures, mitigating equipment operated 
properly, and to confirm that PSEG's post-trip review and corrective 
actions were thorough. The inspectors interviewed operators and 
operations management, reviewed applicable documentation including 
operator logs, the TARP report, the post-trip data package, the 4-hour 
non-emergency event report, applicable notifications and attended the 
post-trip SORC review meeting to ensure that the cause(s) of the event 
were understood and addressed. Additionally, the inspectors reviewed 
notification 20122632 to resolve inspector-identified problems 
associated with the maintenance and implementation of the Trip Hazards 
Area program.
    b. Findings. No findings of significance were identified.

    1R15 Operability Evaluations
    a. Inspection Scope
    .1 Containment Isolation Valve Control Cable Cut
    a. Inspection Scope.--The inspectors reviewed the operability 
determination (CROD)-02-009 (notification 20114253) for a control cable 
for a reactor coolant pump cooling water containment isolation valve 
(1CC118). Design change activities to replace cable fire wrap resulted 
in a six-inch longitudinal cut through the outer jacket, copper 
shielding material, an insulating sheath, an inner protective layer and 
through one conductor's insulation layer. PSEG's visual inspection of 
the cut did not find any damage to any conductors. No alarms were 
received and valve indication was not lost in the control room. PSEG 
tested and verified circuit continuity of the conductors with a 
critical safety function. The inspectors verified that compensatory 
measures were implemented and corrective actions were specified. The 
inspectors also reviewed order 70027181 that documented the follow-up 
operability assessment (CRFA) performed in accordance with procedure 
SH.OP-AP.ZZ-0108, ``Operability Assessment and Equipment Control 
Program.''
    b. Findings. No findings of significance were identified.

    .2 Control Room Ventilation Radiation Monitor 1R1B
    a. Inspection Scope.--The inspectors reviewed the operability 
determination (CROD)-02-008 (Notification 20113713) for the control 
room ventilation radiation monitor spiking into alarm and realigning 
the control area ventilation (CAV) system. PSEG believed that a faulty 
radiation detector temperature alarm module was producing noise that 
resulted in the spurious radiation alarms and CAV system realignment. 
PSEG performed troubleshooting and determined that the radiation 
detector and the radiation detector heater (required for environmental 
qualification) were working properly. The inspectors verified that 
compensatory measures were implemented and corrective actions were 
specified. The inspectors also reviewed Order 70027081 that documented 
the follow-up operability assessment (CRFA) performed in accordance 
with procedure SH.OP-AP.ZZ-0108, ``Operability Assessment and Equipment 
Control Program.''
    b. Findings. No findings of significance were identified.

    .3 Unit 1 AMSAC
    a. Inspection Scope.--During a control room tour on November 14, 
2002, the inspectors noted that the AMSAC trouble alarm was 
illuminated. Based on discussions with control room operators, the 
inspectors noted that the system was inoperable, the condition had been 
logged and had been entered into the corrective action system 
(notification 20121636). The inspectors discussed the condition further 
with operations and engineering personnel to determine whether the 
AMSAC system had been inoperable when the plant was restarted from the 
Unit 1 forced outage in November. The inspectors reviewed control room 
alarms and determined that the AMSAC system was operable during the 
plant startup. PSEG initiated notifications 20122925, 20122627 and 
20122624 to document that an issue associated with operator awareness 
of the AMSAC system status during the startup and also to identify 
enhancements to the AMSAC alarm response and maintenance procedures.
    b. Findings. No findings of significance were identified.

    .4 22 Containment Fan Coil Unit
    a. Inspection Scope.--On November 20 PSEG maintenance personnel 
performed calibration and testing of the 22 CFCU flow instruments 
(Section R19). On November 23 while attempting to perform procedure 
SC.IC-LC.SW-0001(Q), ``Containment Fan Coil Unit Service Water Flow 
Instruments Loop Calibration,'' in accordance with Order 30069819, 
control room and maintenance personnel observed 0-2000 g.p.m. flow 
oscillations with the 22 CFCU in service. The 22 CFCU was removed from 
service. Unit 2 was in a previously entered (November 19) limiting 
condition for operation (LCO) for scheduled maintenance on the 22 CFCU. 
PSEG performed troubleshooting and found that the SW flow could be 
stabilized with the flow controller in manual control and the flow 
control valve (22SW223) full open. The oscillations returned when the 
controller was returned to automatic control. To resolve the inability 
to control SW flow at the accident flow setpoint, PSEG configured the 
22 CFCU in the manual control mode with the 22SW223 valve full open 
(greater than normal accident flow). The 22 CFCU fans were also 
configured to only operate at the accident (low) speed. PSEG planned to 
limit run time on the 22 CFCU to that required for surveillance 
testing.
    PSEG considered the 22 CFCU degraded, but operable with the flow 
controls in manual in lieu of its normal automatic control mode. The 
inspectors reviewed the operability determination (CROD)-02-011 
(Notification 20122803 and Order 70028270), the regulatory change 
process determination and the 10 CFR 50.59 screening performed for the 
degraded condition. The inspectors also observed the SORC meeting that 
reviewed these documents for safety concerns. The inspector also 
verified that PSEG implemented administrative controls to declare the 
22 CFCU inoperable if the river temperature were to exceed 60 F. The 
inspectors also reviewed the follow-up operability assessment (CRFA) 
documented in order 70028270 that was performed in accordance with 
procedure SH.OP-AP.ZZ-0108, ``Operability Assessment and Equipment 
Control Program.''
    b. Findings. No findings of significance were identified.

    .5 14 Containment Fan Cooling Unit
    a. Inspection Scope.--On December 22 PSEG personnel attempted to 
place the 14 CFCU in the high-speed, low-flow mode of operation for 
valve stroke time testing. The 14 CFCU outlet flow control (accident 
mode) valve (14SW223) slowly stroked closed and one of the normal flow 
control valves (14SW57) indicated open (accident position) with no 
measurable stroke time. Unit 1 was in a previously entered (December 
17) LCO for scheduled maintenance on the 14 CFCU. PSEG formed a TARP 
team to investigate (Notification 20125678). Based on troubleshooting 
PSEG concluded that the most likely cause of this problem was that a 
second normal flow control valve (14SW65) was throttled open. To 
resolve this problem PSEG racked out and removed the control power to 
the high speed fan breaker and performed testing, which demonstrated 
that the 14 CFCU was operable but degraded in this configuration. The 
inspectors reviewed PSEG activities to confirm that the 14 CFCU was 
operable in the ``as left'' configuration.
    b. Findings. No findings of significance were identified.

    1R16 Operator Work-Arounds
    a. Inspection Scope.--On December 9-13 the inspectors reviewed the 
outstanding Salem Unit 1 and Unit 2 operator burdens as described by 
operations procedure, SH.OP-AP.ZZ-0030(Q), ``Operator Burden Program.'' 
Additionally, the inspectors reviewed the open operator workarounds, 
operator concerns, overhead annunciators, control room instrumentation 
and computer point deficiencies. These items were reviewed to ensure 
that identified system deficiencies would not prevent operators from 
properly responding to plant events.
    b. Findings. No findings of significance were identified.

    1R17 Permanent Plant Modifications
    .1 12 Service Water Header Piping WEKO Seal Installation
    a. Inspection Scope.--The inspectors reviewed selected portions of 
a design change (order 80044126) that had modified the 12 SW header 
piping and installed a WEKO seal to restore the degraded header to its 
design qualification. The inspectors reviewed the 10 CFR 50.59 
screening done for this design change. The inspectors also reviewed 
Vendor Technical Document (VTD) 325626 (MPR Associates Calculation 
2449, ``Evaluation of Salem Generating Station Concrete Service Water 
Pipe Specials'') that provided analysis and established bounding 
criteria to demonstrate that the repair of the 12 SW header with a 
double wide WEKO seal and segmented stainless steel cylinder would 
restore the header piping to its original design criteria. The bounding 
criteria included: (1) minimum remaining average wall thickness of the 
unflawed metal; (2) length of the through-wall flaw; (3) limited damage 
to the concrete coating on the steel pipe; (4) mortar coated steel 
piping without pre-stressed concrete; and (5) limited deterioration of 
the longitudinal tie rods. The inspectors verified that the design 
bases, licensing bases, and performance capability of risk significant 
systems and components were not degraded by the design change.
    b. Findings. No findings of significance were identified.

    1R19 Post Maintenance Testing
    a. Inspection Scope.--The inspectors observed the performance of 
post-maintenance testing (PMT) and/or reviewed documentation for 
selected risk-significant systems to assess whether the systems met 
TSs, UFSAR and PSEG procedural requirements. The inspectors assessed 
whether the testing appropriately demonstrated that the systems were 
operationally ready and capable of performing their intended safety 
functions. The following test activities were reviewed:
     Selected maintenance activities associated with the 
troubleshooting and repair of Unit 1 PORV 1PR2 under order 60032911.
     Selected maintenance activities associated with the 
troubleshooting and repair of the 1PR2 air operated actuator under 
order 60032780.
     Calibration of the 22 CFCU loop flow control devices on 
November 20, 2002, in accordance with Order 30069819 and procedure 
SC.IC-LC.SW-0001(Q), ``Containment Fan Coil Unit (CFCU) Service Water 
Flow Instruments Loop Calibration.'' The inspectors also reviewed the 
pre and post calibration testing that was completed in accordance with 
procedure S2.IC-SC.SW-0001(Q), ``Containment Fan Coil Unit Service 
Water Inlet/Outlet Flow.''
     Scheduled maintenance outages on the 12 chilled water pump 
and the 12 component cooling water pump during the week of December 15, 
2002, and EDG maintenance activities performed during 1R15, following 
their completion.
    b. Findings. No findings of significance were identified.

    1R20 Refueling and Outage Activities
    .1 Routine Observations
    a. Inspection Scope.--The inspectors reviewed the key activities 
planned and scheduled for the Unit 1 refueling outage (1R15), the 1R15 
risk assessment report, and the contingency plans developed for the two 
reactor coolant system (RCS) mid-loop operating periods and for the 
removal of the 12 service water header from service. This review was 
performed to determine whether PSEG appropriately assessed and had 
planned actions to manage the risk associated with the 1R15 activities. 
Some of the specific activities reviewed included:
     Plant cooldown data to determine whether the plant 
cooldown was performed in accordance with TS limits.
     Plant configuration to periodically verify its consistency 
with the plant Outage Risk Assessment and Management (ORAM) plan, 
including availability of decay heat removal systems as required.
     Reduced inventory and mid-loop conditions. Reviewed 
contingency plans for inventory control for RCS at mid-loop with fuel 
in the reactor vessel. Verified that a temporary level column was 
installed and that it was periodically monitored to determine the water 
level in the RCS hot leg and the reactor pressure vessel. Reviewed 
preparations for steam generator nozzle dam removal including mock-up 
training. Verified that the containment equipment hatch was secured 
during reduced inventory operations and that the personnel equipment 
hatch could be promptly secured.
     Fuel handling operations, including removal and insertion 
of the fuel bundles and fuel movement within the spent fuel pool. 
Verified that fuel handling was performed in accordance with plant 
procedures and that the location of fuel assemblies, including new fuel 
assemblies, and control elements were tracked from core offload through 
core reload.
     Selected maintenance activities, including RWST discharge 
nozzle weld inspection and restoration, 12 SW header outage and 
internal pipe inspections, and EDG maintenance outages.
     Bare metal visual inspection of the Reactor Pressure 
Vessel (RPV) head with PSEG personnel. Conducted a visual inspection of 
the under-RPV area at normal operating temperature and pressure 
conditions.
     Walkdown of selected areas of the containment and 
pressurizer cubicle during closeout activities and prior to reactor 
startup to identify debris that could affect the performance of the 
containment emergency sump. Identified some minor deficiencies to PSEG 
outage management personnel for resolution following this walkdown.
     Plant restoration, including control of mode changes, 
startup and power ascension activities.
    b. Findings.--A finding (discussed in Section R23) was identified 
involving the failure to properly evaluate a temporary modification to 
the 11 service water header while the 12 service water header was 
removed from service. No other findings of significance were 
identified.

    .2 One Shutdown Cooling Loop Inoperable and less than 23 Feet of 
Water Above the Fuel
    a. Inspection Scope.--On October 25 the inspectors noted a late log 
entry documenting entry into TS Action Statement (TSAS) 3.9.8.2. Entry 
into this TSAS was required when less than two RHR loops are operable 
with the reactor cavity water level less than 23 feet above the top of 
the fuel in the reactor vessel. The inspectors reviewed selected 
procedures, risk and contingency planning documents, control room logs, 
notification 20118564, order 70027847 and discussed the event with PSEG 
operations, outage management, risk assessment and licensing personnel 
to evaluate the adequacy of PSEG's review of this event.
    b. Findings
    Introduction. PSEG removed the 11 component cooling water (CCW) 
pump room cooler fan from service at conditions not permitted by TS 
(i.e., with refueling cavity level less than 23 feet). This finding was 
determined to be of very low risk significance (Green), because during 
the event the 11 CCW pump remained available and functional, and 
therefore did not directly affect the operation of a mitigating system.
    Description. Technical Specification Action Statement 3.9.8.2 
requires that two operable RHR loops be maintained when the reactor 
cavity water level is less than 23 feet above the top of the active 
fuel. At 2:23 a.m. on October 25, 2002, the 1C vital bus was de-
energized with the refueling cavity drained down below a level of 23 
feet of water above the fuel in the reactor vessel. This de-energized 
the fan motor of the 11 CCW pump room cooler that was required to 
support operability of the 11 CCW pump (one of two CCW pumps required 
to maintain two RHR loops operable). This oversight was identified a 
few hours later by an oncoming operating crew.
    Also, PSEG had not implemented the required compensatory measures 
prior to de-energizing the fan room cooler. These actions would have 
included, running the available (12) room cooler, propping open the 11 
CCW pump room door, tagging the auxiliary feedwater pumps out of 
service, stopping the safety injection and containment spray pumps, 
ensuring service water temperature is below 90 F, and monitoring 
atmospheric temperature. PSEG evaluated this issue and identified human 
performance, procedure and administrative controls, supervisory 
oversight and human performance as contributing factors to this event. 
Additionally, the operating procedures did not cover the 11 CCW pump 
and room cooler within 1C vital bus de-energizing guidance. Inadequate 
scheduling and coordination of major outage events and the failure to 
identify required compensatory measures were also identified as 
contributors to this event.
    Analysis. This finding affected the configuration control attribute 
of the availability objective of the Mitigating System Cornerstone 
since it involved the failure to adequately control outage activities 
and affected the operability of required decay removal systems while 
shutdown and was therefore more than minor. The finding was reviewed by 
NRC Senior Reactor Analysts from Region I and NRR and determined to be 
of very low safety significance since the 11 CCW pump was able to 
function for the period of time that the room cooling fan was removed 
from service without the necessary compensatory measures. Therefore, 
the 11 CCW pump remained available and functional.
    Enforcement. Technical Specification 6.8.1.a requires that written 
procedures shall be established and implemented for activities in 
Appendix ``A'' of Regulatory Guide (RG) 1.33. Regulatory Guide 1.33 
requires that procedures be developed to perform maintenance on safety 
related systems. PSEG failed to establish and implement adequate 
procedures prior to conducting maintenance that removed the 11 CCW pump 
room cooler from service. This very low risk violation has been entered 
in the corrective action program (notification 20118564) and is being 
treated as a non-cited violation consistent with the Section VI.A of 
the NRC's Enforcement Policy: NCV 50-272 and 50-311/02-09-04.
    1R22 Surveillance Testing
    .1 Routine Testing
    a. Inspection Scope.--The inspectors reviewed the test results for 
selected risk significant components systems to assess whether the 
components met TS, Updated Final Safety Analysis Report, and PSEG 
procedural requirements. The inspectors assessed whether the testing 
appropriately demonstrated that the components were operationally ready 
and capable of performing their intended safety functions. The 
following tests and activities were reviewed:
     S1.OP-ST.CH-0002(Q), ``Inservice Testing--12 Chilled Water 
Pump''
     S1.OP-ST.CC-0002(Q), ``Inservice Testing--12 Component 
Cooling Pump''
    b. Findings. No findings of significance were identified.

    .2 Containment Air Temperature Surveillance Measurement
    a. Inspection Scope.--The inspectors interviewed design engineers 
and reviewed vendor documentation to determine whether the containment 
integrity design basis accident analysis considered the initial 
temperature of the containment passive heat sinks. This review was 
conducted to determine whether PSEG's method for determining the 
containment average air temperature per TS 4.6.1.5 was consistent with 
the design basis accident analysis assumptions for initial containment 
temperature as discussed in Inspection Report 50-272 & 50-311/01-09 
(URI 50-272 & 50-311/01-09-01).
    b. Findings.--PSEG demonstrated that the initial containment 
temperature assumed in the containment integrity design basis analysis 
considered the initial (i.e. pre-accident) temperature of the 
containment passive heat sinks. The inspectors concluded that PSEG's 
method for measuring containment temperature as described in Inspection 
Report 50-272 & 50-311/01-09 would satisfy design basis accident 
assumptions. Therefore, no violations of NRC requirements were 
identified and URI 50-272 & 50-311/01-09-01 is closed.

    1R23 Temporary Plant Modifications
    a. Inspection Scope.--The inspectors reviewed the following 
temporary modifications (TMs) to assess: (1) the adequacy of the 10 CFR 
50.59 screen or evaluation; (2) the installation and removal conditions 
and instructions; (3) the updating of drawings and procedures; and (4) 
the expected removal date. The following TMs were inspected:
     02-037, ``Bypass Detector Low Temperature Alarm for 
Radiation Monitor 2R1B, Channel 1''
     Installation of a Temporary Hose to the 11SW527 Valve
    b. Findings

    Introduction. The inspectors identified that a temporary 
modification (hose connection and pump) to the service water system was 
not properly evaluated. A Green NCV was identified for failure to 
adequately evaluate a rubber hose that was temporarily attached to the 
only operable service water header as prescribed by 10 CFR 50, Appendix 
B, Criterion III, ``Design Control.''
    Description. The inspectors identified that on October 18, 2002, a 
temporary rubber hose and air-operated pump were connected to the 
11SW527 valve to facilitate draining of leakage from the 12 SW header. 
The hose was approximately 3 inches in diameter, and manually operated 
11SW527 valve was left in the open position. In this configuration the 
temporary hose and air-operated pump formed an extension of the 11 SW 
header pressure boundary and failure of this temporary assembly would 
have adversely affected the capability of the SW system to supply 
required safety-related loads. The 12 SW header was out of service for 
maintenance and reactor core defueling operations were in progress 
while the temporary assembly was connected.
    The inspectors informed operations personnel regarding this concern 
and reviewed operations procedure, S1.OP-SO.SW-0005, ``Service Water 
System Operation,'' and the temporary modification log to determine 
whether this configuration had been previously analyzed. The inspectors 
determined that this configuration had been established without 
performing an adequate engineering evaluation of the potential impact 
of this temporary assembly on the SW system. Operations personnel 
implemented interim corrective measures to shut the 11SW527 valve when 
not actually using the connection to drain the leakage from the 12 SW 
header and initiated notification 20117389 to enhance the procedural 
guidance for control and use of temporary assemblies.
    Analysis. The inspectors determined that this finding was 
associated with the evaluation and use of temporary equipment that 
affected the design control attribute of the capability objective of 
the Mitigating Systems Cornerstone to maintain an operable service 
water system, and is therefore greater than minor. If left uncorrected, 
this finding could have resulted in a more significant safety concern 
(i.e. the failure of the temporary hose assembly could have challenged 
the capability of the only operable service water header while reactor 
core defueling operations were in progress). This finding was evaluated 
using the Phase I worksheet of the SDP and determined to be of very low 
risk significance (Green) since the temporary hose assembly remained 
intact, was installed for a short period of time, and was typically 
attended by a nuclear equipment operator.
    Enforcement. 10 CFR 50, Appendix B, Criterion III, ``Design 
Control,'' requires that applicable regulations for structures, 
systems, and components are properly translated into specifications, 
procedures and drawings. Contrary to the above, PSEG failed to develop 
adequate specifications and procedures prior to connection of a 
temporary hose assembly to the 11 SW header. Because the failure to 
develop adequate controls for this configuration was determined to be 
of very low significance and has been entered into the corrective 
action program (notification 20117389), this violation is being treated 
as a non-cited violation (NCV) consistent with Section VI.A of the NRC 
Enforcement Policy: NCV 50-272/02-09-05, Failure to Properly Evaluate a 
Temporary Installation to the 11 Service Water Header.

2. Radiation Safety
            Occupation Radiation Safety [OS]

    2OS1 Access Control to Radiologically Significant Areas
    a. Inspection Scope.--During the period October 21-25, 2002, the 
inspector reviewed exposure significant work areas, high radiation 
areas, and airborne radioactivity areas in the plant and evaluated 
associated controls and surveys of these areas to determine if the 
controls (i.e., surveys, postings, barricades) were acceptable. The 
primary focus of this inspection was observing and reviewing work 
activities associated with the Unit 1 refueling outage (1R15). For 
these areas the inspector reviewed radiological job requirements and 
attended job briefings to determine if radiological conditions in the 
work area were adequately communicated to workers through briefings and 
postings. The inspector also verified radiological controls, 
radiological job coverage, and contamination controls to ensure the 
accuracy of surveys and applicable posting and barricade requirements. 
The inspector obtained this information via: interviews with PSEG 
personnel; walkdown of systems, structures, and components; and 
examination of records, procedures, or other pertinent documents. The 
inspector determined if prescribed radiation work permits (RWPs), and 
procedure and engineering controls were in place; whether PSEG surveys 
and postings were complete and accurate; and if air samplers were 
properly located. The inspector reviewed RWPs used to access these and 
other high radiation areas to identify the acceptability of work 
control instructions or control barriers specified. The inspector 
reviewed electronic pocket dosimeter alarm set points (both integrated 
dose and dose rate) for conformity with survey indications and plant 
policy. The controls implemented by PSEG were compared to those 
required under plant technical specifications (TS 6.12) and 10 CFR 20, 
Subpart G for control of access to high and locked high radiation 
areas.
    b. Findings. No findings of significance were identified.

    2OS2 As Low As Is Reasonably Achievable (ALARA) Planning and 
Controls
    a. Inspection Scope.--The inspector reviewed ALARA job evaluations, 
exposure estimates, and exposure mitigation requirements and compared 
ALARA plans with the results achieved. A review was performed of the 
integration of ALARA requirements into work procedures and RWP 
documents, the accuracy of person-hour estimates and person-hour 
tracking, and generated shielding requests and their effectiveness in 
dose rate reduction. The inspector obtained this information via: 
interviews with PSEG personnel; walkdown of systems, structures, and 
components; and, examination of records, procedures, or other pertinent 
documents.
    The inspector also reviewed exposure goals established for the Unit 
1 refueling outage (1R15). An outage goal of 110 person-rem had been 
established by PSEG, including the following work activities and their 
outage exposure goal: reactor maintenance (18.500 rem); primary steam 
generator work [including eddy current testing] (20.335 rem); reactor 
coolant pump and motor work (3.460 rem); and, in-service inspection 
(7.700 rem). By day 14 of the outage, outage exposures exceeded 116 
person-rem. The primary reason for exceeding the outage goal identified 
by PSEG was higher than anticipated area dose rates as the result of a 
shutdown crud burst and the subsequent inability to remove the 
radioactive material from the primary coolant in sufficient quantity 
prior to the start of outage work.
    Since the 1999 Unit 1 refueling outage (1R13), this is the third 
time greater than anticipated area dose rates have been created 
following a shutdown crud burst and subsequent primary coolant clean-
up. Similar issues also arose during the 2000 Unit 2 refueling outage 
(2R11). Corrective actions taken after both of these previous outages 
proved insufficient to prevent a recurrence during 1R15.
    b. Findings. No findings of significance were identified.

    2OS3 Radiation Monitoring Instrumentation
    a. Inspection Scope.--The inspector reviewed field instrumentation 
utilized by radiation protection technicians and plant workers to 
measure radioactivity, including portable field survey instruments, 
friskers, portal monitors and small article monitors. The inspector 
reviewed selected radiation protection instruments observed in the 
radiologically controlled area (RCA), specifically verification of 
proper function and certification of appropriate source checks for 
these instruments which were utilized to ensure that occupational 
exposures are maintained in accordance with 10 CFR 20.1201. The 
inspector obtained this information via: interviews with PSEG 
personnel; walkdown of systems, structures, and components; and 
examination of records, procedures, or other pertinent documents.
    b. Findings. No findings of significance were identified.

3. Safeguards
            Physical Protection [PP]
    3PP3 Response to Contingency Events
    a. Inspection Scope.--The inspectors reviewed the status of 
security operations and assessed implementation of the protective 
measures in place as a result of the current, elevated threat 
environment.
    b. Findings. No findings of significance were identified.

4. Other Activities [OA]
            4OA1 Performance Indicator Verification
    .1 Public Radiation Safety Cornerstone
    a. Inspection Scope.--The inspector reviewed a listing of licensee 
event reports for the period January 1, 2002 through October 21, 2002 
for issues related to the public radiation safety performance 
indicator, which measures radiological effluent release occurrences per 
site that exceed 1.5 milli-rem per quarter (mrem/qtr) whole body or 5 
mrem/qtr organ dose for liquid effluents; or 5 mrads/qtr gamma air 
dose, 10 mrads/qtr beta air dose; or 7.5 mrems/qtr organ doses from I-
131, I-133, H-3 and particulates for gaseous effluents.
    b. Findings. No findings of significance were identified.

    .2 Emergency Preparedness
    a. Inspection Scope.--The inspector reviewed PSEG's procedure for 
developing the data for the emergency preparedness PIs which are: (1) 
Drill and Exercise Performance, (2) Emergency Response Organization 
Drill Participation and (3) Alert Notification System (ANS) 
Reliability. The inspector also reviewed PSEG's drill/exercise reports, 
training records and ANS testing data from the fourth quarter of 2001 
to the end of the third quarter of 2002 to verify the accuracy of the 
reported data. The review was performed in accordance with NRC 
Inspection Procedure 71151. The acceptance criteria are 10 CFR 50.9 and 
NEI 99-02, Revision 2, Regulation Assessment Performance Indicator 
Guideline.
    b. Findings. No findings of significance were identified.

    .3 Reactor Scram and Unplanned Power Reductions
    a. Inspection Scope.--The inspectors reviewed the performance 
indicator (PI) data submitted by PSEG for ``Unplanned Scrams per 7000 
Critical Hours,'' ``Scrams with a Loss of Normal Heat Removal,'' and 
``Unplanned Transients per 7000 Critical Hours'' to ensure that the 
data was consistent with the plant operating histories and with the 
guidance contained in NEI 99-02, ``Regulatory Assessment Indicator 
Guideline.'' The inspectors reviewed the data submitted from the third 
quarter of 2001 to the third quarter of 2002.
    b. Findings. No findings of significance were identified.

    4OA2 Identification and Resolution of Problems
    .1 Cross Reference to P&IR Findings Documented Elsewhere
    Section 40A5 describes a finding for failure to be able to achieve 
and maintain a 50 percent concentration of carbon dioxide for 30 
minutes by the fire suppression systems for six safety-related areas. 
The failure of PSEG to identify that modifications to the ventilation 
system to trip the exhaust fans aggravated this previously identified 
condition and to implement timely and effective action for the 
conditions are indicative of potential deficiencies in the licensee's 
corrective action reviews.
    .2 Reactor Safety Cornerstone--Salem Unit 1 Inservice Inspection
    a. Inspection Scope.--The inspector reviewed a sample of corrective 
action reports shown in Attachment 1, which identified problems related 
to ISI issues. The inspector verified that problems were being 
identified, evaluated, appropriately dispositioned, and entered into 
the corrective action program.
    b. Findings. No findings of significance were identified.

    .3 Public Radiation Safety Cornerstone--Salem Unit 1 Auxiliary 
Building Water Leak
    a. Inspection Scope.--The inspectors reviewed PSEG activities 
regarding problem identification and resolution of contaminated water 
leaks into the Auxiliary Building. The review noted the applicable 
information as discussed below.
    On September 18, 2002, PSEG documented (notification 20114071) the 
discovery of water leakage through the Unit 1--78-foot mechanical 
penetration room wall. PSEG also noted that workers' shoes coming from 
the room were contaminated. PSEG took smear and water samples. The 
measurement results indicated that the source of water was from a 
radioactive system. There has been a history of non-contaminated water 
leakage in this area (e.g., notification 20001837 in 1999 and MMIS 
971217047 in 1977).
    On September 25, 2002, PSEG initiated an evaluation (notification 
20114152) to resolve the water leakage. Subsequently, PSEG engineering 
personnel identified a second leak at a spent fuel pool cooling piping 
penetration (between the Unit 1 spent fuel building and the auxiliary 
building) located within the Unit 1 78-foot mechanical penetration 
room.
    On November 20, 2002, PSEG informed the resident inspectors of the 
leak. PSEG personnel reported that chemical analysis of water from the 
leak was indicative of the Unit 1 spent fuel pool. On November 29, PSEG 
began installation of a collection device to capture the leakage from 
under the spent fuel pool cooling line and direct this water to the 
contaminated drain and liquid radwaste systems.
    On December 9-10, 2002, the resident inspectors and a regional 
specialist toured the Unit 1 78-foot mechanical penetration room and 
verified the leak catch device under the spent fuel pool cooling water 
return pipe. The inspectors also toured Unit 1 64-foot switchgear room 
and noted that there was evidence of five (5) water leaks along the 
wall in the room. The leaks appeared to be long established with the 
exception of one (Sample 7). PSEG took five samples and measured for 
boron, tritium, and gamma analyses. The analytical results of the 
Sample No. 7 indicated that the source of water was from a radioactive 
system. Analytical results of the other four (4) samples suggested that 
these were the results of uncontaminated groundwater intrusion. On 
December 9 PSEG assigned a full-time team and developed an action plan 
to address the leaks. Two additional notifications (20123998 and 
20120815) were drafted to document the corrective actions.
    On January 2 and 3, 2003, the inspectors reviewed analytical data, 
including water samples from seven (7) onsite environmental test 
locations. The analytical results for tritium, fission, and activated 
gamma emitters were well below the required lower limits of detection 
(LLDs) listed in the Offsite Dose Calculation Manual (ODCM). The 
inspectors attended PSEG's meetings to observe their discussions of (1) 
soil and water sampling, (2) drilling of permanent deep sampling wells, 
(3) spent fuel pool water make-up rate, (4) integrity of the fuel 
transfer canal, (5) sampling the water at the bottom of spent fuel pool 
to track iodine-131, and (6) monitoring for spent fuel pool water 
leaks.
    b. Findings. No findings of significance were identified at the 
time of this inspection. At the conclusion of the period the inspectors 
were unable to determine whether PSEG met all ODCM and 10 CFR 20 
effluent release requirements since the environmental sampling 
activities had not been completed. This issue will remain unresolved 
pending completion and assessment of the planned environmental 
monitoring activities (URI 50-272/02-09-06).

    .4 Unit 2 Residual Heat Removal System Water-Hammer
    a. Inspection Scope.--An inspection of problem identification and 
resolution for a selected issue was performed to review the 
effectiveness of actions in identifying the problem and the 
implementation of the follow-up corrective actions. The item selected 
for this review was related to notifications 20099566, 20104986, and 
20110575 that documented a water-hammer event during the start of RHR 
pumps 21 and 22 for testing, and the troubleshooting efforts to 
determine the cause. The inspection included the review of the 
troubleshooting efforts, engineering analyses and evaluations, the root 
cause determination, the corrective action plan, and design 
modification and post-modification testing following the installation 
of additional RHR system vents in May 2002. Also, the inspector 
performed a walkdown of the accessible portions of the RHR system, and 
reviewed RHR system fill and vent procedure, and reviewed the design 
and licensing basis for the RHR system.
    The inspector did not identify an operability concern with the 
water hammer events but noted that PSEG's initial efforts to understand 
and resolve this problem did not appear timely. The initial water-
hammer event was identified before the startup from the Unit 2 
refueling outage in May 2002, and the cause was attributed to a check 
valve slamming noise. Based on the document review and interviews, the 
inspector concluded that PSEG troubleshooting activities for this 
problem were delayed until August 2002 (notification 20110575). The 
inspector noted that the eventual investigation of this problem 
appeared to be better focused and thorough.
    b. Findings. No significant findings were identified.

    .5 Human Performance Improvement
    a. Inspection Scope.--During the June 2001 assessment meeting 
between the NRC and PSEG, PSEG senior management indicated that a group 
had been formed to initiate a human performance improvement program. 
Due to continuing human performance issues at Salem, the inspectors 
selected this improvement program for review of measurable performance 
changes regarding the identification and resolution of problems.
    The inspectors found that the improvement program described during 
the 2001 meeting had not been maintained. Also, in the summer of 2002, 
an industry peer review identified that an integrated and visible 
approach to improving human performance was not evident at the site. In 
October 2002 PSEG assigned a new human performance manager and began 
development of a new human performance program initiative. The 
inspectors discussed this initiative with the human performance manager 
and reviewed draft action plans for program implementation. The initial 
implementation has commenced through the communication and training of 
senior and mid-level managers on the initiative and tools for 
implementation. Performance indicators to measure human performance 
improvement are being developed and populated with data. PSEG indicated 
that these performance indicators would provide a meaningful measure of 
performance by the end of 2003. The inspectors determined that it was 
premature to determine the effectiveness of this program.
    b. Findings. No significant findings were identified.

    4OA3 Event Followup
    .1 (Closed) LER 50-311/02-002-00: Containment Internal Pressure Not 
Maintained Within Technical Specification Limits
    On April 20, 2002, PSEG discovered that the instrumentation used to 
monitor the containment internal pressure was reading one-half of the 
actual containment pressure. This lower indicated pressure resulted in 
operation where the actual containment internal pressure exceeded the 
0.3 psig TS 3.6.1.4 limit. The problem resulted from the installation 
of an incorrect part as an equivalent replacement for an 
instrumentation module. PSEG's planned and completed corrective actions 
included repair of the instrument, review of the release calculation 
used in the Annual Radioactive Effluents Report, review for a similar 
problem at Unit 1 and entry of this problem into the corrective action 
program to evaluate the programmatic problems that led to this event. 
No new findings were identified in the inspector's review. This finding 
constitutes a violation of minor significance that is not subject to 
enforcement action in accordance with Section IV of the NRC's 
Enforcement Policy. PSEG documented the problem in notification 
20097451. This LER is closed.
    .2 (Closed) LER 50-272/02-005-00: Unexpected Auto-Start of Turbine 
Driven Auxiliary Feedwater Pump at Start of Refueling Outage
    On October 10, 2002, during the scheduled manual trip to start the 
1R15 refueling outage, an unexpected automatic start of the 13 
auxiliary feedwater pump occurred. Operators responded properly to the 
event. This event resulted from the previous adjustment of the steam 
generator low-low setpoint that was performed in response to a generic 
concern (discussed in Inspection Report 50-272 & 50-311/02-03). PSEG's 
planned and completed corrective actions included evaluation of whether 
further setpoint changes could be implemented to preclude this type of 
event and a review to determine whether this type of event can be 
defined as expected. The LER was reviewed by the inspectors and no 
findings of significance were identified. PSEG documented this event in 
notification 20116128. This LER is closed.
    .3 (Closed) LER 50-272/02-007: Core Alterations Performed Without 
Direct Communications
    On October 16, 2002, while lifting the upper internals from reactor 
vessel, PSEG failed to establish direct communications between the 
control room and the refueling station as required by TS 3.9.5. PSEG's 
planned and completed corrective actions included development of a 
temporary standing order to clarify roles and responsibilities for the 
refueling and operating crews, and procedural enhancements. No new 
findings were identified in the inspector's review. This finding 
constitutes a violation of minor significance that is not subject to 
enforcement action in accordance with Section IV of the NRC's 
Enforcement Policy. PSEG documented the problem in notification 
20116936. This LER is closed.
    4OA5 Other Activities
    .1 TI 2515/150--Reactor Pressure Vessel Head (RPV) and Vessel Head 
Penetration Nozzles (NRC Bulletin 2002-02)
    a. Inspection Scope.--The inspectors reviewed PSEG's activities to 
detect circumferential cracking of RPV head penetration nozzles in 
response to NRC Bulletin 2002-02, ``Reactor Pressure Vessel Head and 
Vessel Head Penetration Nozzle Inspection Programs,'' as specified by 
Temporary Instruction (TI) 2515/150. The activities included interviews 
with analyst personnel and other technical staff, reviews of 
qualification records, procedures, and observations of selected video 
tape and pictures of the reactor vessel closure head visual 
examination. The inspectors also reviewed the susceptibility 
calculation to verify that appropriate plant-specific information was 
used as input. In accordance with TI 2515/150, inspectors verified that 
deficiencies and discrepancies associated with the RCS pressure 
boundary or the examination process was identified and that they were 
placed in PSEG's corrective action process.
    b. Findings. No findings of significance were identified and the 
specific reporting requirements of TI 2515/150 are documented in 
Attachment 1.

    .2 TI 2515/148, Revision 1, Appendix A--Inspection of Nuclear 
Reactor Safeguards Interim Compensatory Measures
    a. Inspection Scope.--An audit of PSEG's performance of the interim 
compensatory measures imposed by the NRC's Order Modifying License, 
issued February 25, 2002 was completed in accordance with the 
specifications of NRC Inspection Manual Temporary Instruction (TI) 
2515/148, Revision 1, Appendix A, dated September 13, 2002.
    b. Findings. No findings of significance were identified.

    .3 (Closed) URI 50-272; 50-311/02-07-01: Failure to maintain the 
Fire Protection Program as described in the FSAR and approved in the 
SERs.
    Introduction. PSEG did not properly maintain room isolation 
barriers and improperly implemented a modification to the switchgear 
penetration area ventilation system, both of which caused an existing 
fire protection concern on carbon dioxide (CO2) 
concentration to be exacerbated. This finding (Green NCV) represents 
the completion of an unresolved item identified in Inspection Report 
2002-07 regarding the automatic fire suppression system in six safety-
related electrical areas addressed by the fire protection program.
    Description. During the 1999 triennial fire protection inspection 
(NRC Inspection Report 50-272&311/99-10), the inspectors identified a 
White finding involving the initial testing of the 4160V switchgear 
room and lower electrical penetration area CO2 fire 
suppression systems. When initially tested in 1974 (Unit 1) and 1979 
(Unit 2), the systems failed to achieve the design concentration of 50 
percent CO2. The inspectors determined that the plant 
condition did not meet the requirements of License Conditions 2.C.5 
(Unit 1) and 2.C.10 (Unit 2), i.e., the fire protection program. The 
CO2 systems as described by PSEG in the FSAR and approved by 
NRC specify a 50 percent CO2 concentration to be maintained 
for 30 minutes.
    Following this finding, PSEG initially attempted to replace the 
CO2 system with a water-based automatic sprinkler system. 
This plan was abandoned due to floor drain system limitations. In April 
2002 PSEG determined that returning the CO2 system to fully 
operable status would be a better alternative.
    PSEG performed tracer gas testing in May 2002 to support re-
analysis of the CO2 systems and to resolve issues associated 
with commitments for CO2 retention in fire areas at Salem. 
The test results predicted achievement of approximately 45 percent 
initial concentrations, which would dissipate to 18 to 28 per cent 
within 20 minutes.
    PSEG identified that the majority of the leakage from the rooms was 
through the CO2 isolation dampers and the fire door seals. 
PSEG subsequently determined that the dampers used were backdraft 
dampers, and therefore improperly utilized for isolation in the 
switchgear and penetration area ventilation system. PSEG also 
determined that the 5 year damper seal replacements recommended by the 
damper manufacturer had never been done.
    The CO2 system design called for the ventilation system 
fans to trip on a CO2 discharge. The initial ventilation 
system design had the supply fans continuing to operate after a 
CO2 discharge, but the exhaust fans tripped. Between 1994 
and 1996 PSEG installed engineering changes 1-EC-3377 and 2-EG-3298 
that permitted the exhaust fans to continue to operate after a 
CO2 discharge, thereby further degrading the ability of the 
CO2 system to achieve and maintain a 50 percent 
CO2 concentration for 30 minutes.
    Analysis. The inspector determined that this finding adversely 
impacted fire suppression equipment capability, affecting the design 
control attribute of the capability objective of the Mitigating Systems 
Cornerstone, and therefore is greater than minor.
    The finding was evaluated using Inspection Manual Chapter (IMC) 
0609, Appendix F. The finding passed the Phase I screening criteria, 
since it affected either manual or automatic suppression, depending 
upon the room.
    For the phase 2 evaluation, the inspector developed fire scenarios 
based on the switchgear units in the areas of concern. The IPEEE fire 
scenarios were used as the starting point. Since the areas had been the 
subject of impairments and had fire watch patrols, the transient 
combustible scenario was not imposed. In addition, the non-propagation 
fire scenarios for the switchgear fires were assumed to become 
propagation scenarios, due to the degraded gaseous suppression systems. 
The most limiting fire scenarios were those which led to a transient 
with loss of power conversion system, and disabled an auxiliary 
feedwater pump and a power operated relief valve. The ignition 
frequencies for these scenarios were summed, and the fire mitigation 
factors applied. The factors gave full credit for the fire brigade. 
Existing electrical raceway fire wrap was credited during scenario 
development by not imposing fire damage to cables which were wrapped. 
The resulting fire mitigation frequency corresponds to Row D of the 
risk estimation matrix (Table 5.6 in Appendix F of IMC 0609). The 
mitigating system capability rating for the remaining auxiliary 
feedwater trains (3) resulted in an overall risk characterization of 
Green.
    Also, this finding had an aspect of problem identification and 
resolution, in that ineffective problem evaluation existed regarding 
the preventive maintenance and modifications on the affected equipment.
    Enforcement. License Conditions 2.C.5 (Unit 1) and 2.C.10 (Unit 2) 
require PSEG to implement and maintain in effect all provisions of the 
fire protection program as approved in the SERs. Contrary to the above, 
PSEG failed to properly maintain room isolation dampers and improperly 
implemented a modification to the switchgear and penetration area 
ventilation system that resulted in the inability of the carbon dioxide 
fire suppression systems for six safety-related areas to maintain the 
design concentration for the specified time period. This self-revealing 
violation of very low safety significance is not being cited since it 
meets the criteria of Section VI of the NRC Enforcement Policy, NUREG-
1600, for being dispositioned as NCV.

    4OA6 Management Meetings
    a. Exit Meeting Summary.--On January 16, 2003, the inspectors 
presented their overall findings to members of PSEG management led by 
Mr. Lon Waldinger. PSEG management stated that none of the information 
reviewed by the inspectors was considered proprietary.
    b. PSEG/NRC Management Meeting.--On December 17 and 18, 2002, the 
NRC Region I Deputy Regional Administrator and the Region I DRP 
Division Director toured Salem Station and met with PSEG management to 
discuss current plant performance issues.

                                 ______
                                 
                 Attachment 1--Supplemental Information

                        A. KEY POINTS OF CONTACT

    C. Banner, EP Supervisor; D. Burgin, EP Manager; H. Berrick, 
Licensing Engineer; T. Cellmer, Radiation Protection Manager; C. 
Conner, NDE Engineer; P. Fabian, Steam Generator Engineer; V. 
Fregonese, Manager Design Engineering; M. Hassler, Radiation Protection 
Operations Superintendent--Salem; H. Malikowski, Materials Engineering; 
J. Nagle, Supervisor Licensing; T. Neufang, ALARA Supervisor--Salem; T. 
Oliveri, NDE/ISI Inspector; R. Schmidt, Materials Engineering; B. 
Sebastian, ALARA and Support Superintendent; W. Treston, Supervisor 
ISI; V. Zabielski, Steam Generator Group Manager.

             B. LIST OF ITEMS OPENED, CLOSED, AND DISCUSSED

    Opened
    50-272&311/02-09-01; URI; Submerged safety-related electrical 
cables appropriate corrective actions. (Section R06).
    50-272/02-09-06; URI; Salem Unit 1 spent fuel pool water leak. 
(Section 4OA2.3).
    Opened/Closed
    50-272/02-09-02; NCV; Failure to properly test the 12 component 
cooling heat exchanger. (Section R07).
    50-272&311/02-09-03; NCV; PSEG failed to maintain complete and 
adequate maintenance records. (Section R13).
    50-272&311/02-09-04; NCV; Shutdown cooling loop inoperable and less 
than 3 feet of water above the fuel. (Section R20).
    50-272/02-09-05; NCV; Failure to properly evaluate a temporary 
installation to the 11 service water header. (Section R23).
    Closed
    50-272/01-07-01; URI; Inservice Inspection Activities. (Section 
R08).
    50-272&311/01-09-01; URI; Containment air temperature surveillance 
measurement. (Section R22).
    50-272&311/02-07-01; URI; Failure to maintain the fire protection 
program as described in the FSAR and approved in the SERS. (Section 
OA5.3).
    50-311/02-02-00; LER; Containment internal pressure not maintained 
within technical specification limits. (Section OA3.1).
    50-272/02-05-00; LER; Unexpected auto-start of the turbine driven 
auxiliary feedwater pump at start of refueling outage. (Section OA3.2).
    50-272/02-07-00; LER; Core alterations performed without direct 
communications. (Section OA3.3).

                     C. LIST OF DOCUMENTS REVIEWED

    In addition to the documents identified in the body of this report, 
the inspectors reviewed the following documents and records:
    Calculation #S-C-RC-MDC-1928, Rev 0, Determination of Effective 
Degradation Years (EDY) at RFO 1R15 (Salem Unit 1) and 2R13 (Salem Unit 
2).
    SH.RA-IS.ZZ-0005(Q), Rev 1, VT-2 Visual Examination of Nuclear 
Class 1, 2 and 3 Systems
    SC.RA-IS.RC-0001(Q), Rev 0, Vessel Head Penetration Examination 
Drawing E 233-048, Closure Head Assembly for 173'' ID Reactor.
    Video tape and still photographs of Bare metal inspection and 
selected RV head nozzles.
    NC.NM-AP.22-0004(Q) NDE Inspector vision tests
    SH.MD-AS. 22-0001(Q) NDE Certificates of Qualification
    Reactor power, RCS Flow and RCS temperature data collected by 
engineering
    LR-N02-0297, Response to NRC Bulletin 2002-02, Reactor Pressure 
Vessel Head and Vessel Head Penetration Nozzle Inspection Programs 
Salem Generating Station Units 1 and 2. September 06, 2002.
    PSEG Technical Specification 6.9.1.5 Annual Reports Salem and Hope 
Creek Generating Stations Docket Nos. 50-272, 50-311, and 50-354 dated 
February 26, 2002.
    Engineering Evaluation No. S-1-RC-MEE-1509 Rev 0--1R14 Steam 
Generator Tubing Operational Assessment for Cycle 15.
    Engineering Evaluation No. S-1-RC-MEE-1507 Rev 0--Salem 1R14 Steam 
Generator Tubing Condition Monitoring Assessment.
    Engineering Evaluation No. S-1-RC-MEE-1691 Rev 0--1R15 Steam 
Generator Degradation Assessment.
     Engineering Evaluation No. S-1-RC-MEE-1508 Rev 0--1R14 Steam 
Generator Tubing Degradation Assessment.
    S1.SG-ST.RCE-0001(Q)-Rev 4 Steam Generator Eddy Current 
Examination.
    54-ISI-400-11 Revision August 27, 2000--Framatome Technologies 
Multi-Frequency Eddy Current Examination of Tubing.
    Examination Technique Specification Sheet #1 Rev 3--Bobbin Probe 
Examination.
    Examination Technique Specification Sheet #2 Rev 0--Rotating Probe 
Examination (115/+Point/080HF).
    Examination Technique Specification Sheet #3 Rev 0--Dual Coil 
Rotating Probe Examination (+Point MR/HF) U-bend.
    Examination Technique Specification Sheet #4 Rev 1--Single Coil 
Rotating Probe Examination (+Point) U-bend.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016623 
B-0.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016624 
B-0.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016625 
B-0.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016626 
B-0.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016627 
B-0.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016628 
B-0.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016629 
B-0.
    6875 by 040 EPRI, ASME, Wear Cal Standard as built drawing--6016630 
B-0.
    Radiographic Examination Record Order 600032565.
    02RF Examination Summary Record 191000--Integrally welded supports 
to reactor coolant pump 11 11-PMP-1LG.
    02RF Examination Summary Record 191100--Integrally welded supports 
to reactor coolant pump 11 11-PMP-2LG.
    02RF Examination Summary Record 221400--Main Steam System Component 
34-MS-2141-1PL-1.
    02RF Examination Summary Record 221500--Main Steam System Component 
34-MS-2141-1PL-2.
    02RF Examination Summary Record 221600--Main Steam System Component 
34-MS-2141-1LP-3 thru 6.
    02RF Examination Summary Record 222000--Main Steam System Component 
34-MS-2141-1PL-7 thru 10.
    02RF Examination Summary Record 222210--Main Steam System Component 
34-MS-2141-1PL-11.
    02RF Examination Summary Record 222215--Main Steam System Component 
34-MS-2141-1PL-12.
    02RF Examination Summary Record 148200--Safety Injection System 
Component 2-SJ-1137-13.
    02RF Examination Summary Record 148300--Safety Injection System 
Component 2-SJ-1137-14.
    02RF Examination Summary Record 148400--Safety Injection System 
Component 2-SJ-1137-15.
    02RF Examination Summary Record 148500--Safety Injection System 
Component 2-SJ-1137-16.
    02RF Examination Summary Record 148900--Safety Injection System 
Component 2-SJ-1137-20.
    02RF Examination Summary Record 005310--Reactor Pressure Vessel 
Closure Head Component 1-RPV-NUTS 1-54.
    Corrective Actions: 20102540, 20097621, 20098121, 20099595, 
20096101, 20096437.
    Maintenance of Emergency Preparedness Performance Indicator (PI) 
Data (NC.EP-DG.ZZ-0001(Z)--Rev 03).
    Notifications and Orders related to the Water-hammer event:
    20099566, 20099608, 20102647, 20104986, 20108933, 20110575, 
20111010, 20111212, 20113051, 20113361, 20115277, 20114030, and 
20113054.
    Procedures
    Filling and Venting Procedure for RHR: S1.OP-SO.RHR-0003(Q), Rev. 
12. Water-hammer Action Plan, Attachment 5 to Procedure NC.PF-AP.ZZ-
0082(Z).
    Engineering Evaluations and Related Documents
    RHR Water-hammer Issue Update, dated September 6, 2002.
    Level 2 Evaluation RHR Water-hammer.
    Event Time Line 04/05/02 through 11/05/02.
    Drawings:
    205350-SIMP, Rev. 02, ECCS-Simplified P&ID, 205332-SIMP, Rev. 01, 
RH R--Simplified P&ID; RH--2-2, Rev. 11, Aux Bld RHR & Safety 
Injection; P&ID for Elv. 45', 55', and 64' RH--2-3, Rev. 10, Reactor 
Containment RHR & SI P&ID for Elv. 78' 0''.

                          D. LIST OF ACRONYMS

ALARA--As Low As Is Reasonably Achievable
ANS--Alert and Notification System
ASME--American Society of Mechanical Engineers
CAV--Control Area Ventilation
CC--Component Cooling
CCW--Component Cooling Water
CFCU--Containment Fan Cooling Unit
CFR--Code of Federal Regulations
CO2--Carbon Dioxide
CY--Calendar Year
ECA--Engineering Change Authorization
EDGs--Emergency Diesel Generators
EDY--Effective Degradation Years
EFPY--Effective Full Power Years
EPRI--Electric Power Research Institute
ICMs--Interim Compensatory Measures
IR--Inspection Report
ISI--Inservice Inspection
LCO--Limiting Condition for Operation
LLDs--Lower Limits of Detection
MR--Maintenance Rule
NCV--Non-Cited Violation
NDE--Non-Destructive Examination
NRC--Nuclear Regulatory Commission
OCC--Outage Control Center
ODCM--Offsite Dose Calculation Manual
ORAM--Outage Risk Assessment and Management
PARS--Publicly Available Records
PI--Performance Indicator
PMT--Post-Maintenance Testing
PORV--Power Operated Relief Valve
PSEG--Public Service Electric Gas
PWSCC--Primary Water Stress Corrosion Cracking
RCA--Radiologically Controlled Area
RCS--Reactor Coolant System
RG--Regulatory Guide
RHR--Residual Heat Removal
RPV--Reactor Pressure Vessel
RV--Reactor Vessel
RWP--Radiation Work Permit
RWST--Refueling Water Storage Tank
SDP--Significance Determination Process
SW--Service Water
TARP--Transient Assessment Response Plan
TI--Temporary Instruction
TM--Temporary Modification
TS--Technical Specifications
TSAS--Technical Specification Action Statement
URI--Unresolved Item
VTD--Vendor Technical Document
     e. ti 2515/150--reactor pressure vessel head and vessel head 
               penetration nozzles reporting requirements
    a.1. Was the examination performed by qualified and knowledgeable 
personnel?
    The examination was performed by qualified and knowledgeable 
personnel. The inspectors found the use of VT-2 certifications 
including required visual examination for utilized personnel. The 
inspection technique utilized for bare metal visual examination was as 
described in the licensee's Bulletin 2002-02 response, dated 6 
September 2002.
    a.2. Was the examination performed in accordance with approved 
procedures?
    The visual examination was in accordance with approved and adequate 
procedures.
    a.3. Was the examination able to identify, disposition, and resolve 
deficiencies?
    The examination was adequate to identify, disposition and resolve 
deficiencies.
    a.4. Was the examination capable of identifying the PWSCC 
phenomenon described in the bulletin?
    The examination performed was capable of identifying the PWSCC 
phenomenon described in the Bulletin 2001-01.
    b. What was the condition of the reactor vessel head?
    The general condition of the Reactor Vessel (RV) head was clean 
bare metal with some localized grit or fibrous debris on the uphill 
side of several nozzles. This debris appeared to be a mixture of inert 
foreign material/dirt and did not contain any evidence of boric acid. 
The insulation configuration provides relatively easy access for visual 
examination. No significant visual obstructions were encountered during 
the bare metal inspection.
    c. Could small boron deposits, as described in the Bulletin 2001-
01, ``Circumferential Cracking of Reactor Pressure Vessel Head 
Penetration Nozzles,'' be identified and characterized?
    Small boron deposits, as described in Bulletin 2001-01, could be 
identified and characterized by the visual examination technique used. 
None were found during this visual inspection.
    d. What material deficiencies were identified that required repair?
    No material deficiencies associated with concerns described in 
Bulletin 2001-01 or 2002-02 were found.
    e. What if any, significant items that could impede effective 
examination?
    No significant items were identified that could impede effective 
examination.
    TI 2515/150, Section 04.05 d, requires that inspectors report 
lower-level issues concerning data collection and analysis, and issues 
deemed to be significant to the phenomenon described in Bulletin. The 
inspector found the licensee calculation method was identical to what 
is provided in Appendix C of TI 2515/150. However, several observations 
were made regarding the potential for variations in the inputs for a 
specific plant calculation of effective degradation years (EDY). These 
insights identified by the inspector are provided for information 
below.
     The licensee's calculation for EDY for the Salem units 
does not include uncertainty for the unit Effective Full Power Years 
(EFPY) or RV head temperatures. The licensee and inspectors found no 
evidence that other plants have utilized input parameter uncertainty 
for the relative ranking determination.
     The Salem calculation for EDY utilized reactor thermal 
power data from PSEG fuels which was demonstrated to be more accurate 
and provides a more conservative result for the Salem units than the 
generator electric output data used by MRP-44.
     The Salem Reactor Vessel head closure temperatures were 
calculated by Westinghouse under the WOG program ``Technical Support of 
Generic Letter 97-01, Response for RV Head Penetration Alloy 600 
PWSCC.'' The licensee verified the plant specific inputs utilized 
remained current before using the vendor calculated head temperatures 
in the susceptibility ranking calculation. The inspector found that the 
licensee does not have the information to perform a technical 
comparison of the method utilized by the WOG to determine RV head 
temperatures with the method utilized to obtain the reference plant RV 
head temperature of 600 Deg F in the industry susceptibility model.

                                 ______
                                 
    Question 2. At today's hearing, you were kind enough to provide 
some background on the events related to release of small amounts of 
tritium at Salem 1 reactor. While I appreciated your response and that 
of the other commissioners regarding the effect of tritium, I remain 
concerned about the timeline regarding the effect of tritium, I remain 
concerned about the timeline regarding the notification of the public 
in cases such as this. Also, I would like to know specifically what is 
the responsibility of the plant's owner, PSEG in cases like this?
    Response. The licensee has the responsibility to identify and 
correct problems at its facilities. Licensees are required to have a 
problem identification and resolution program that provides for: (1) 
identification of problems; (2) reporting of problems in accordance 
with established criteria (e.g., NRC, State, and/or internal); (3) 
implementation of mitigating actions as necessary; (4) evaluation of 
any consequences of the problem (e.g., effect on workers, public, or 
the environment); (5) evaluation and determination of causes; (6) 
determination of risk significance; and (7) implementation of 
corrective actions commensurate with that risk significance. The basic 
requirements for these activities are outlined in 10 CFR 50, Appendix 
B. Specifically in this case, when the problem was identified, the 
licensee documented it in its corrective action program, initiated a 
review of the issue consistent with its understanding of the safety 
significance of the problem, implemented various mitigation activities 
to reduce or eliminate potential effects, and reported the issue to the 
State and the NRC when reporting criteria were met.
    PSEG has taken actions to identify the source and extent of the 
leakage, including the drilling of a number of sample wells and 
evaluating sample data. PSEG has also taken action to collect any 
further leakage and is directing it into plant waste systems. The 
licensee is closely monitoring the issue consistent with its corrective 
action program, and is also undertaking a number of activities 
associated with identifying permanent repair options to the spent fuel 
pool. The NRC will continue to evaluate PSEG's activities regarding the 
root cause for the leak and corrective actions. Further, the NRC has 
maintained close coordination with the State of New Jersey and will 
continue to interact frequently with appropriate State officials.

    Question 3. Question about new technologies related to nuclear 
power: As I mentioned, I am a Senator who is interested in learning 
more about nuclear power. In particular, could you elaborate on what 
new power technologies are expected to be deployed in the coming 
decade?
    Response. The NRC's responsibilities are to license and oversee the 
operation of nuclear power plants, and does not promote the use of 
nuclear power associated technologies, or work on the development of 
those technologies. Those activities are conducted by the Department of 
Energy (DOE). DOE has looked at this question recently and organized a 
near-term deployment group to examine prospects for the deployment of 
new nuclear plants in the United States during this decade, and to 
identify obstacles to deployment and actions for resolution. The result 
of DOE's effort is documented in a report titled, ``A Roadmap to Deploy 
New Nuclear Power Plants in the United States by 2010,'' dated October 
31, 2001. This report is available on DOE's website at: http://gen-
iv.ne.doe.gov/MAP-organization.html. The NRC does communicate with DOE 
regarding these activities, to ensure that our activities related to 
advanced reactor design are consistent with DOE's plans. The NRC also 
stays informed of the industry's activities related to advanced reactor 
development and deployment.
    The Nuclear Energy Institute has indicated to the NRC staff that 
its candidate for near term deployment will most likely be from one of 
10 designs. The designs have or will be reviewed in accordance with a 
standard design certification process in accordance with regulations 
contained in 10 CFR Part 52 Subpart B. Through this process the NRC can 
certify a reactor design for 15 years independent of a specific site. 
Three of the ten designs that the nuclear industry is considering have 
already been certified by the NRC, a fourth application for design 
certification is currently under review, and six other designs are 
subjects of pre-application discussions between the NRC and the 
developers of those designs. The following is a synopsis of the various 
designs and their NRC review status:

----------------------------------------------------------------------------------------------------------------
                Design                         Supplier              Size and Type          NRC Review Status
----------------------------------------------------------------------------------------------------------------
System 80+...........................  Westinghouse...........  1354 Megawatt-electric   Certified
                                                                 (MWe) pressurized
                                                                 water reactor.
                                                                 Advanced light water
                                                                 reactor; spherical
                                                                 containment.
Advanced Boiling Water Reactor.......  General Electric.......  1350 MWe boiling water   Certified
                                                                 reactor. Advanced
                                                                 evolutionary design
                                                                 built and operating in
                                                                 Japan.
AP600................................  Westinghouse...........  610 MWe pressurized      Certified
                                                                 water reactor. Uses
                                                                 passive safety
                                                                 features for core
                                                                 cooling.
AP1000...............................  Westinghouse...........  1117 MWe pressurized     Application review in
                                                                 water reactor. Higher    progress
                                                                 capacity version of
                                                                 the AP600.
ESBWR................................  General Electric.......  1390 MWe boiling water   Pre-application review
                                                                 reactor with passive     in progress
                                                                 safety features. Based
                                                                 on earlier passive
                                                                 simplified boiling
                                                                 water reactor, but
                                                                 higher in capacity.
Advanced CANDU Reactor (ACR-700).....  Atomic Energy of Canada  731 MWe CANDU. Heavy     Pre-application review
                                        Limited (AECL).          water moderator with     in progress
                                                                 light water coolant;
                                                                 on-line refueling;
                                                                 based on Canadian
                                                                 CANDU technology.
Gas Turbine Modular Helium reactor...  General Atomics........  288 MWe per module       Pre-application review
                                                                 prismatic graphite       in progress
                                                                 moderated gas-cooled
                                                                 reactor. Modular
                                                                 direct cycle helium-
                                                                 cooled reactor being
                                                                 considered for power
                                                                 production and
                                                                 disposition of excess
                                                                 weapons-grade
                                                                 plutonium in Russia.
SWR-1000.............................  ANP Framatome..........  1253 MWe boiling water   Pre-application review
                                                                 reactor. Based on a      in progress
                                                                 Siemens design;
                                                                 incorporates passive
                                                                 safety features.
International Reactor Innovative and   Westinghouse...........  300 MWe pressurized      Pre-application review
 Secure (IRIS).                                                  water reactor.           in progress
                                                                 Integral primary
                                                                 system plant design;
                                                                 eliminates classic
                                                                 loss-of-coolant-
                                                                 accidents; spherical
                                                                 containment.
Pebble Bed Modular Reactor (PBMR)....  PBMR Pty...............  165 MWe per module gas   Some discussions with
                                                                 cooled reactor.          the staff. PBMR Pty.
                                                                 Modular direct cycle     plans to request a pre-
                                                                 helium-cooled pebble     application review
                                                                 bed design, currently
                                                                 planned for
                                                                 construction in South
                                                                 Africa.
----------------------------------------------------------------------------------------------------------------

    Question 4. You mentioned that three companies are planning to 
submit pre-license applications to the Commission. If those were to be 
approved, what would the likely schedule then be with regard to 
possible construction of a new reactor at one of those sites.
    Response. The staff does not currently have a schedule from 
industry regarding possible construction activities. Currently, the NRC 
is involved in several different reviews to prepare for possible new 
construction. The regulations contained in 10 CFR Part 52 describe a 
standard plant design certification process, an early site permit 
process, and a combined licensing process. (The standard plant design 
certification process is discussed in the previous question). An 
application for a combined license may incorporate by reference a 
standard design certification, an early site permit, both or neither. 
This approach allows early resolution of safety and environmental 
issues. The issues resolved by the design certification process and 
during the early site permit process are not reconsidered during the 
combined license review.
    The three early site permit (ESP) prospective applicants have not 
committed to a timeframe for possible construction at the sites they 
plan to reference. An ESP addresses site safety issues, environmental 
protection issues, and plans for coping with emergencies, independent 
of the review of a specific nuclear plant design. An ESP, if approved, 
is good for 10 to 20 years and can be renewed for an additional 10 to 
20 years. Therefore, there is a long window of opportunity for an 
applicant to reference an ESP in a combined license (COL) application.
    A COL authorizes construction and conditional operation of a 
nuclear power plant. After a COL application is approved, onsite 
construction activities could take place. In a recent meeting with the 
NRC staff, the Nuclear Energy Institute (NEI) indicated that it was 
targeting a potential COL application for calendar year 2005. While the 
ESP process is scheduled to be tested later this year and the staff has 
already certified 3 standard plant designs, a COL application has not 
yet been reviewed by the NRC. NEI did not commit to referencing one of 
the three ESP applications expected in calendar year 2003. Therefore, 
it is possible that industry may use a different site for a COL.
    Regardless, if a COL application were received in calendar year 
2005 and it referenced both an early site permit and standard certified 
design, the staff estimates it would take approximately 27 months for 
the review to be completed. This would place the actual start of 
construction, at the earliest, in the 2007 to 2008 timeframe. Typical 
construction schedules for new reactors based on the heavy reliance on 
modular construction techniques are 5 years. This would result in 
commercial operation of a new nuclear plant, at the earliest, in the 
2012 to 2013 timeframe.

    Question 5. Mr. Chairman, in your written testimony, you made the 
following comment: ``Moreover, the number of individuals with the 
technical skills critical to the achievement of the Commission's safety 
mission is rapidly declining in the Nation, and the educational system 
is not replacing them. The maintenance of technically competent staff 
will challenge governmental, academic, and industry entities associated 
with nuclear technology for some time to come.'' I have heard similar 
assessments from other agencies, but not from any more critical to 
public safety than the NRC. My question is what should we, the 
Congress, do to reverse this trend? And second, what will happen if we 
do not?
    Response. Congress has already taken some steps that help the NRC 
combat the shortage of technical skills needed by the Agency. Recent 
proactive policies and legislation that maximizes human capital 
flexibilities have helped the NRC with its aging staff issue. While 
various recruitment, retention and training flexibilities allow the 
Agency to compete more effectively for existing talent, the pool for 
that talent is drying up. A report published by the U.S. Nuclear 
Engineering Department Heads Organization (NEDHO) in 1999 included 
survey results that indicated school enrollment reductions in nuclear 
engineering of 72 percent for courses at bachelor's level and 46 
percent for courses at master's level, when compared to 1992 levels. At 
the same time that academic enrollments are decreasing, retirements of 
current industry professionals are increasing dramatically. Actions to 
help reverse these trends might include: 1) increased Federal 
Government assistance to colleges and universities; 2) increased 
national recruitment efforts and incentives for hard-to-fill Federal 
positions deemed inherently governmental; and 3) opportunities for 
Federal/academic/private sector employment sabbatical exchanges.
    If some type of action is not taken to reverse trends, then the 
United States may eventually have a more difficult time ensuring the 
safety of current and emergent nuclear technologies. Severe competency 
shortages could eventually force reductions in current regulatory work 
levels, which could adversely affect licensee operations. Even if 
competency shortages of this extreme were avoided, delay in addressing 
the problems will add to the overall cost of solutions.

    Question 6. Mr. Chairman, during the debate last year over the 
Senate approval of Yucca Mountain, one of the key issues was that full-
scale testing of the containers that would be used to transport the 
waste has not been conducted. In your testimony you mentioned something 
about the Package Performance Study to study rail and truck casks at 
full scale. What is involved in these tests, what schedule do you have 
for them, and what is your system for double checking the results?
    Response. The NRC is conducting a Package Performance Study to 
investigate the response of spent nuclear fuel transportation casks to 
transportation accident conditions. In February 2003, the NRC staff 
published for comment a report that contains the NRC's draft plans for 
impact and fire testing proposed to be conducted under this study. This 
report is NUREG-1768 ``United States Nuclear Regulatory Commission 
Package Performance Study Test Protocols.'' The NRC proposes to use an 
actual full scale rail cask and an actual full scale truck cask. The 
impact test that the staff proposed for comment involves a drop from a 
tower onto a very hard target at a speed in excess of current 
regulatory criteria, and the thermal test involves testing the cask in 
a fully engulfing fire that will burn for more than a half hour. The 
public comment period closes May 30, 2003. Following review and 
analysis of the comments, the staff will develop the detailed test 
plans and procedures and initiate procurement of the test specimens and 
testing equipment. Prior to the tests, the computer predictions for the 
expected results will be published. One of the objectives of the study 
is to improve public confidence both in the ability to model the cask's 
performance using computers and in the rigor of the certified cask 
designs. The tests will be conducted under a rigorous quality assurance 
program. The tests will likely be performed in 2004 and 2005.

    Question 7. Has there been progress in selecting or designating 
transportation routes for the high level waste? What is the schedule 
for those designations and who is involved?
    Response. The Federal Motor Carrier Safety Administration, 
Department of Transportation, specifies the routing requirements for 
shipment of high level waste and spent nuclear fuel in Title 49, Code 
of Federal Regulations. State agencies can also designate preferred 
routes within their States. In general, the shipper of the high-level 
waste will designate transportation routes on a case-by-case basis, 
which meet the requirements of Title 49 and any applicable State 
requirements. After these routes are determined, the NRC (for NRC 
licensed material) considers the physical security issues associated 
with the route and may require the shipper to consider additional 
precautions in timing, stops, or other protections if warranted by the 
route. For the proposed high level waste repository, it is our 
understanding that the Department of Energy is developing strategies 
for the transportation of spent fuel which would include routing 
considerations.

    Question 8. The NRC submitted a report last November entitled 
``Inspector General's Assessment of the Most Serious Management 
Challenges Facing the NRC.'' The report identifies nine important 
management challenges, ranging from:
    (a) Protection of nuclear material and facilities used for civilian 
purposes; (b) Proper administration of all aspects of financial 
management; to (c) Protection of data bases and other important NRC 
information.
    What has the Commission done to address the concerns raised in that 
report? Do you believe the IG has accurately characterized the 
challenges facing the NRC?
    Response. The NRC has initiated a number of activities which 
address the management challenges discussed in the IG's report. These 
activities are discussed in the NRC's Budget Estimates and Performance 
Plan, Fiscal Year 2004, NUREG-1000, Volume 19, dated February 2003. The 
approach begins with an assessment of what, if any changes, should be 
made to the NRC's Strategic Plan, including a determination of whether 
our goals, strategies, and measures adequately address the actions that 
are considered necessary to address the challenges. Volume 19 lists the 
nine most serious challenges discussed in the IG's November report and 
describes the actions/milestones being taken by the NRC to address 
these challenges. The management challenge described as ``Protection of 
Information'' was the latest challenge added to the list. We are 
currently analyzing this challenge and will identify actions/milestones 
and schedules in the fiscal year 2005 Performance Plan.
    In response to the second part of the question, the challenges 
discussed in the OIG's report accurately describe the key challenges 
facing the NRC. Key challenges such as those related to human capital, 
described by the IG as maintenance of a highly competent staff to carry 
out NRC's public and safety mission, are similar to those being faced 
by other Federal agencies.

                               __________
            Statement of Hubert T. Bell, Inspector General, 
                   U.S. Nuclear Regulatory Commission

                              INTRODUCTION

    Mr. Chairman, members of the subcommittee, it is a pleasure to 
appear before you today. I am accompanied today by Mr. Stephen 
Dingbaum, Assistant Inspector General for Audits and Mr. George Mulley, 
Senior Level Assistant for Investigative Operations.
    As you know, the mission of the Office of Inspector General (OIG) 
at the Nuclear Regulatory Commission (NRC) is to assist NRC by ensuring 
integrity, efficiency, and accountability in the Agency's programs that 
regulate the civilian use of byproduct, source, and special nuclear 
material in a manner that adequately protects public health and safety 
and the environment, while promoting the Nation's common defense and 
security. Specifically, NRC's OIG supports the Agency by carrying out 
its mandate to (1) independently and objectively conduct and supervise 
audits and investigations related to NRC's programs and operations; (2) 
prevent and detect fraud, waste and abuse; and (3) promote economy, 
efficiency, and effectiveness in NRC's programs and operations. The OIG 
also keeps the NRC Chairman and Members of Congress fully and currently 
informed about problems, recommends corrective actions, and monitors 
NRC's progress in implementing those actions.

                               BACKGROUND

    To perform these activities, the OIG employs auditors, management 
analysts, criminal investigators, investigative analysts, legal counsel 
and support personnel. The OIG also uses private-sector contractors to 
audit NRC's financial statements as mandated by the Chief Financial 
Officers (CFO) Act and for other audit, investigative and information 
technology technical support services.
    To fulfill our audit mission, the OIG conducts performance, 
financial, and contract audits. Performance audits focus on NRC 
administrative and program operations and evaluate the effectiveness 
and efficiency with which managerial responsibilities are carried out 
and whether the programs achieve intended results. Financial audits 
attest to the reasonableness of NRC's financial statements. Contract 
audits evaluate the cost of goods and services procured by NRC from 
commercial enterprises. In addition, the audit staff prepares special 
evaluation reports that present OIG perspectives or information on 
specific topics.
    The OIG's investigative program carries out its mission by 
performing investigations relating to the integrity of NRC's programs 
and operations. Most OIG investigations focus on allegations of fraud, 
waste, and abuse and violations of law or misconduct by NRC employees 
and contractors. Additionally, allegations of irregularities or abuses 
in NRC programs and operations with special emphasis on those 
activities that could adversely impact public health and safety are 
investigated. Also, periodically the investigative staff conducts event 
inquiries, which yield investigative reports documenting the 
examination of events or agency regulatory actions that do not 
specifically involve individual misconduct. Instead, these reports 
identify staff actions that contributed to the occurrence of an event.
    Following are examples of work performed by my audit and 
investigative staffs in furtherance of our mission to ensure integrity, 
efficiency and accountability in NRC's programs.

                             INVESTIGATIONS

Nuclear Reactors
    NRC Regulation of Davis-Besse Regarding Damage to the Reactor 
Vessel Head. The OIG completed an inquiry into concerns raised by the 
Union of Concerned Scientists (UCS) regarding a perceived lack of NRC 
oversight of the Davis-Besse Nuclear Power Station (DBNPS). NRC 
Bulletin 2001-01 sought to have licensees perform inspections, which 
could only be performed when the plant was shut down, by December 31, 
2001, on plants identified as highly susceptible to vessel head 
penetration nozzle cracking. UCS alleged that the NRC allowed DBNPS to 
continue operating past December 31, 2001, despite indications of 
significant cracking to the reactor vessel head.
    As a result of this inquiry, the OIG found, among other things, 
that NRC's decision to allow DBNPS to continue operating beyond 
December 31, 2001, without performing vessel head penetration nozzle 
inspections was driven in large part by a desire to lessen the 
financial impact on the licensee that would result from an early 
shutdown. In addition, the OIG found that NRC staff was reluctant to 
take regulatory action against a licensee absent absolute proof of a 
violation, despite strong indications that DBNPS was not in compliance 
with NRC regulation and plant technical specifications and may have 
operated with reduced safety margins.
    Steam Generator Tube Rupture at Indian Point Unit 2 Power Plant. 
The OIG conducted an event inquiry to address concerns raised by the 
public and Congress as a result of an incident at the Indian Point Unit 
2 Power Plant (IP2), which occurred on February 15, 2000. In that 
incident, IP2, a pressurized water nuclear reactor plant, experienced a 
steam generator tube rupture in one of its four steam generators. The 
OIG's inquiry primarily addressed the adequacy of the NRC staff's 
handling of issues associated with the IP2 steam generator tube 
rupture, as well as the NRC's handling of shortcomings identified in 
the IP2 Emergency Preparedness Plan.
    The OIG found that the last steam generator inspection conducted by 
IP2 took place in 1997, and the results were provided to the NRC staff. 
However, the OIG learned that the NRC staff did not conduct a technical 
review of that steam generator inspection report when IP2 submitted it 
in 1997. The OIG concluded that, had the NRC staff or contractors with 
technical expertise evaluated the IP2 1997 inspection report, the NRC 
could have identified the flaw in steam generator number 24 that was 
indicated in the inspection report. This flaw was the cause of the IP2 
steam generator tube rupture on February 15, 2000.
    Also, the OIG found that, in 1999, the NRC granted a license 
amendment to IP2 to extend their steam generator inspection interval, 
but that the NRC staff conducted an inadequate review of the license 
amendment request.
    During the conduct of this event inquiry, the OIG also found that 
IP2 was a plant that struggled with various challenges in the area of 
emergency preparedness. The OIG learned that recurring weaknesses, that 
had gone uncorrected, appeared to play a role in the poor emergency 
response performance of IP2 during the incident on February 15, 2000. 
The OIG also found that communications between offsite emergency 
preparedness officials and the NRC was non-existent.
Nuclear Materials
    NRC's Regulatory Oversight Over the Control of Special Nuclear 
Material at Millstone Unit 1. The OIG investigated the reported loss of 
two spent nuclear fuel rods at Millstone Nuclear Power Station Unit 1. 
In November 2000, the NRC license holder for Millstone discovered they 
could not locate two spent fuel rods which were last accounted for in 
1978. The OIG investigation reviewed NRC oversight of the licensee's 
special nuclear material accountability program from the late 1970s to 
the present.
    As a result of this investigation, the OIG found that the missing 
fuel rods were last accounted for during a 1978 Nuclear Material 
Control and Accountability (MC&A) inspection at Millstone Unit 1 
conducted by the NRC. In a 1982 MC&A inspection conducted by the NRC, 
the fuel rods were no longer present on the inventory. The OIG 
determined that the NRC inspector did not identify the loss of these 
fuel rods in the 1982 inspection because he relied on an inaccurate 
current inventory amount instead of beginning the inspection with the 
ending inventory amount reflected on the 1978 inspection. The OIG also 
determined that the last MC&A inspection conducted at Millstone was 
1982, and that the NRC ended this inspection program for all nuclear 
power plants in 1985.
    Unlawful Interaction Between NRC and DOE Staffs Regarding Yucca 
Mountain. The OIG conducted an investigation upon receipt of 
allegations by the Attorney General of the State of Nevada that NRC and 
U.S. Department of Energy (DOE) representatives conducted meetings that 
were contrary to mandates regarding Government activities concerning 
the Yucca Mountain nuclear waste repository site. It was alleged that 
NRC and DOE representatives made decisions during these meetings from 
which the State of Nevada representatives were unlawfully excluded.
    As a result of this investigation, the OIG determined that the NRC 
staff did not initiate or coordinate contacts with representatives of 
DOE to develop policies on issues related to Yucca Mountain. OIG also 
learned that NRC and DOE representatives did not meet in violation of 
ex parte provisions. The OIG learned that pre-licensing communications 
between NRC and DOE representatives occurred during informal meetings 
which were held in accordance with the pre-licensing phase of the 
application process and were consistent with NRC regulatory 
requirements and policy mandates.
    Review of NRC's Staff Approval of the Carolina Power & Light (CP&L) 
Request for Expansion of High-Level Radioactive Waste Storage. The OIG 
completed an investigation into concerns raised by members of the 
public and elected State officials that (1) the NRC staff and the 
Atomic Safety and Licensing Board Panel (ASLBP) did not adhere to 
procedures during their review of the Carolina Power and Light's (CP&L) 
request to amend its operating license and increase its spent fuel 
storage capacity at the Shearon Harris Nuclear Power Plant; (2) the NRC 
staff pressured the ASLBP to expedite the approval of the license 
amendment and staff did not sufficiently review all relevant 
contentions; and (3) the NRC was biased toward CP&L and stifled the 
public's participation in the license amendment review process.
    As a result of this investigation, the OIG did not validate claims 
of misconduct by the NRC staff during its review of the CP&L license 
amendment requests. The NRC license amendment process was followed. 
However, the OIG identified several staff actions that gave the 
appearance that during the license amendment review process the NRC was 
not an impartial arbiter. This perception of staff bias toward the 
licensee may have negatively affected the public's confidence in its 
ruling.

                                 AUDITS

Nuclear Reactors
    Review of NRC's License Amendment/Safety Evaluation Process. 
Commercial nuclear power plant licensees submit approximately 1,500 
applications each year to request that the NRC amend their operating 
licenses. Safety evaluations provide the regulatory bases for the 
staff's decisions regarding licensing actions and the technical, 
safety, and legal basis for the Agency's disposition of a license 
amendment request.
    In June 1999, the NRC approved an Indian Point 2 Nuclear Power 
Plant license amendment request to extend the previously established 
steam generator inspection interval. In February 2000, a steam 
generator tube failed. Congressional interest in this event caused the 
OIG to initiate an audit of the safety evaluation process to (1) 
evaluate its efficiency and effectiveness and (2) determine whether 
refinements are needed.
    The OIG audit revealed that the Agency has a detailed process for 
responding to license amendment requests that is well thought out and 
thorough. The process includes the development of safety evaluations 
and all the necessary steps when followed would ensure that the staff 
performs the technical reviews that are required for the Agency to 
approve or disapprove license amendment requests. However, the OIG did 
find that the process did not provide adequate controls to demonstrate 
that all steps are completed and supported by sufficient documentation.
    The NRC has taken steps to strengthen the license amendment/safety 
evaluation process.
    Review of NRC's Significant Determination Process (SDP). The NRC 
regulates the Nation's 104 operating commercial nuclear plants through 
its reactor oversight program. The SDP is a series of analytical steps 
that the NRC staff use to evaluate inspection findings. The process 
uses four colors C Green, White, Yellow, and Red C to indicate the 
significance of inspection findings. While SDP is viewed by the NRC 
staff, licensees, and stakeholders as an improved method for 
establishing the significance of inspection findings, the process still 
needs significant improvement. Specifically, the OIG found that NRC 
should correct phase 2 analysis weaknesses because it provides 
conservative results that are subsequently changed, is used 
infrequently, and adds cost and time to the process. In addition, the 
NRC should take steps to improve SDP timeliness.
NRC Safety Culture and Climate
    2002 Survey of NRC's Safety Culture and Climate. The OIG engaged an 
independent contractor to conduct a survey of NRC's workforce to: (1) 
measure NRC's safety culture and climate, (2) compare the results 
against NRC's 1998 Safety Culture and Climate Survey, and (3) compare 
the results to government and national benchmarks.
    The survey generally concluded that the NRC safety culture and 
climate appears to be improving. Specifically, the workforce views 
itself as effective and dedicated to the NRC safety mission. Comparison 
with the 1998 survey results also indicates improvement in virtually 
every category or topical area. Further, the survey found that most 
scores exceed established national benchmarks for government research 
and technical composites.
    However, the survey did reflect that two program support offices 
will require substantial effort to improve organizational culture and 
climate.
    In addition, the survey also found that Continuous Improvement 
Commitment, that is employees' views on commitment to public safety, 
and whether employees are encouraged to communicate ideas to improve 
safety, regulations and operations, is below norm and a matter of 
concern. Empowerment, Communication, Quality Focus, Management 
Leadership, and Organizational Commitment were determined to be areas 
requiring additional management focus.
    As a counterpoint, dramatic improvement was demonstrated in the 
category, Future of the NRC, that focuses on items that evaluate 
employee's views on how the NRC's regulation of its licensees have 
changed in the past year and will change in the future. That is the way 
people are managed day to day, communication, the quality of work 
produced, productivity, the public image of the Agency, and the NRC as 
a whole. The survey concluded that improvement in these topics can 
positively impact issues gauged in the category Continuous Improvement 
Commitment.
Security Audits
    Government Information Security Reform Act (GISRA). The OIG used an 
independent contractor to perform the second annual evaluation of NRC's 
Information Security Program. The fiscal year 2002 evaluation found 
that NRC made substantial progress in improving its information 
security program to include implementing the recommendations from the 
fiscal year 2001 GISRA assessment. However, the NRC security program is 
not well integrated and not consistently implemented across the Agency. 
In addition, NRC officials have not clearly defined the responsibility 
and accountability for all aspects of the information security program 
within its organizational structure.
    NRC senior managers recently increased attention to the information 
security area. NRC management plans to continue this needed focus to 
enhance program effectiveness and to ensure its consistent 
implementation throughout the Agency.
    Sensitive Unclassified Information. The OIG received a 
congressional request to review the adequacy of the NRC programs for 
handling and releasing sensitive documents after a preliminary draft of 
the Yucca Mountain Review Plan was inadvertently released to the public 
in September 2000. The plan, a predecisional document, was an Official 
Use Only document and should have been treated as sensitive 
unclassified information protected from public disclosure until 
Commission approval was granted.
    The OIG found that the NRC has program guidance to prevent the 
release of sensitive unclassified information. However, the guidance 
does not adequately protect Official Use Only documents from 
inadvertent public disclosure. Additionally, training on handling, 
marking and protecting sensitive unclassified information is not 
provided to all NRC employees and contractors on a regular basis. 
Consequently, many of the staff are not knowledgeable about NRC's 
requirements and guidance in this area. NRC employees are not 
consistently implementing the requirement to report incidents of 
inadvertent release of sensitive unclassified information to the Office 
of the Executive Director for Operations.
    NRC Headquarters Security. The OIG conducted an audit, Review of 
Security at NRC Headquarters, that revealed after security reviews in 
1995 and 1999, the NRC increased its protection of Headquarters 
buildings against unauthorized access. Following the September 11, 2001 
attacks, the NRC further tightened its Headquarters security and 
identified a remaining vulnerability. The Agency is working with the 
General Services Administration regarding a solution for this 
vulnerability. Additionally, OIG auditors found that NRC has 
increasingly hardened its controls to protect against unauthorized 
access to its Headquarters complex, but still needs to do more.
Financial Management
    Audit of NRC's Financial Statements. Since 1994 to the present, the 
NRC has received an unqualified opinion on their financial statements. 
During this timeframe, the annual audits identified a number of 
internal control issues, which did not affect the opinion, the majority 
of which were resolved. However, one internal control issue has 
lingered since the fiscal year 1998 audit: implementation of managerial 
cost accounting in accordance with Federal standards. Although the 
Agency implemented its cost accounting system in fiscal year 2002, the 
system failed to meet Federal accounting standards and systems 
requirements. Cost accounting is a vital component of the Agency's 
ability to correlate its programs with its costs as mandated by the 
Government Performance and Results Act and Federal accounting 
standards. The Agency continues to work on resolving this issue during 
fiscal year 2003.
    Accountability and Control Over NRC's Noncapitalized IT Equipment. 
OIG conducted an audit of the Agency's accountability and control over 
noncapitalized (initial cost of less than $50,000 per item) information 
technology (IT) equipment. The audit found that the Agency's property 
and supply system (PASS), the official data base for agency property 
transactions, is responsible for tracking more than 27,000 pieces of 
noncapitalized equipment valued at approximately $75 million. Of these 
totals, IT equipment comprises approximately 16,000 pieces, with an 
acquisition cost of approximately $51 million.
    This OIG audit revealed that the NRC's property management policies 
for this equipment adhere to applicable laws and regulations, such as 
the Federal Property Management Regulations. However, the management 
controls to implement these policies are inadequate or lacking. Also, 
PASS contains inaccurate information; in fact, OIG statistical 
projections indicated that the system did not accurately reflect the 
locations of as many as 3,571 of the Agency's 16,000 pieces of 
noncapitalized IT equipment costing approximately $8.38 million. The 
Agency has taken steps to reconcile its property inventory and increase 
property controls.
    Software Accountability. The OIG audited NRC's compliance with 
Executive Order 13103, Computer Software Piracy, which requires all 
executive agencies to adopt policies and procedures to promote legal 
software use and proper software management. The review determined that 
the NRC is not in compliance with the Executive Order because its 
policies (management directives) and its procedures (management 
controls) do not address the full scope of the Executive Order's 
requirements. The NRC has not conducted an initial assessment of its 
software, established a baseline for its software inventory, or 
determined whether all software on agency computers is authorized. As a 
result, the NRC needs to incorporate Executive Order requirements into 
its Management Directives System and implement measures to carry out 
the Executive Order. The Agency generally agreed with the report's 
findings and recommendations and is in the process of taking corrective 
action.

                                SUMMARY

    A key goal of the OIG is to add value to NRC's regulatory and 
administrative programs by identifying opportunities for improvement in 
agency operations and by conducting activities to prevent and detect 
fraud, waste and abuse. The OIG is encouraged by the Agency's actions 
to address OIG findings and to implement many of the recommendations 
made by my office. There are many examples of collaborative work 
between my staff and agency managers in an effort to refine the 
effectiveness and efficiency of agency programs.
    While some challenges remain, the OIG supports the Agency's 
commitment to ensure the effective regulation of the Nation's civilian 
use of nuclear power and to the integrity of its programs that 
ultimately protect the health and safety of the public. OIG will 
continue to remain steadfast in its resolve to assist the NRC in 
fulfilling this important mission.
    Mr. Chairman, and members of the subcommittee, this concludes my 
report to you on the activities of my office during the recent past. I 
would be pleased to answer any questions at this time.

                               __________
       Responses by Hubert T. Bell to Additional Questions from 
                             Senator Inhofe

    Question 1. In your opinion, is the NRC doing everything that it 
can and should be doing to prevent another incident like the events at 
Davis-Besse from happening again? If not, what needs to be done?
    Response. The events at Davis-Besse caused the NRC to undertake an 
introspective analysis of the technical and programmatic issues that 
contributed to the event. During this process, the Commission has 
pressed the staff to carefully evaluate the event so that the 
circumstances that gave cause to it are not repeated. The Commission 
has accepted the findings of the agencies Lessons-Learned Task Force 
and has adopted essentially all senior management's associated 
recommendations for corrective action.
    If the recommendations are followed up on, the NRC will be in a 
better position to prevent a recurrence.

    Question 2. Can you assure me that the NRC has found out everything 
that happened at Davis-Besse and that there will be no more surprises 
in this matter?
    Response. Based on the work completed by this office with respect 
to the NRC's regulatory oversight of the Davis-Besse Nuclear Power 
Plant, we believe the NRC staff has demonstrated a willingness to 
identify and address existing problems at the plant. However, this 
office is not in the position to provide assurance that the NRC staff 
or First Energy, the Davis-Besse licensee, have uncovered all the 
safety issues at the plant.

    Question 3. I believe that you have copies of several pictures that 
were distributed during the hearing of the corrosion on the reactor 
heads at Davis-Besse. It is my understanding that these pictures were 
taken as part of an inspection of the facility in April 2000, that 
these photographs were included in a report that First Energy filed 
with the NRC in 2000, and that this report was never even reviewed by 
the NRC. Are you looking into this? What-if any-preliminary thought or 
conclusions do you have?
    Response. The Office of Inspector General has an ongoing 
investigation into the claim that pictures taken by the licensee of the 
corrosion of the Davis-Besse reactor vessel head were provided to NRC 
inspectors during the refueling outage in 2000. As part of this 
investigation, OIG is looking into if, and when, NRC inspectors first 
obtained a copy of Davis-Besse Condition Report 2000-0782 with the 
subject photographs attached. Additionally, OIG is examining whether 
Region III managers appropriately communicated related plant issues to 
inspectors to allow them to appropriately recognize and follow-up on 
indicators of these problems when discovered during inspections.

    Question 4. I understand that a Report that you wrote found that 
only 53 percent of NRC employees feel that it is ``safe to speak up in 
the NRC'' about safety issues. That report also states that almost one-
fourth of NRC employees do not believe that ``the NRC's commitment to 
public safety is apparent in what we do on a day-to-day basis.'' What 
recommendations would you make to improve the safety culture at the 
NRC?
    Response. The OIG's Safety Culture and Climate Survey was 
undertaken to solicit the views and opinions of NRC employees on a wide 
range of subjects, of which Continuous Improvement Commitment is one. 
Continuous Improvement Commitment assesses employee views on NRC's 
commitment to public safety, and whether employees are encouraged to 
communicate ideas to improve safety, regulations, and operations. In 
comparison to the results of the prior 1998 survey that score improved 
by 3 percent to 67 percent, but the results were 4 percent below 
similar governmental norms.
    To improve the safety culture at NRC, OIG's report recommended that 
the Agency focus on seven areas: continuous improvement commitment, 
empowerment, communication, NRC image, quality focus, management 
leadership and organizational commitment.
    The Commission is already taking action to address the issues 
stated in the report. In a memorandum dated January 13, 2003, the 
Chairman advised NRC's Executive Director for Operations that he was 
concerned that more needed to be done to determine the underlying 
causes of the employee attitudes reflected in the identified areas for 
improvement and to develop strategies to address these underlying 
causes systematically. He directed the Executive Director for 
Operations to take the following actions and develop an action plan for 
addressing these matters: (1) develop and conduct a systematic 
assessment of the areas for improvement identified in the report and 
establish appropriate priorities for agency attention; and (2) identify 
the underlying causes for the employee attitudes reflected in each 
area.
    On January 30, 2003, NRC's Executive Director for Operations 
advised the Commission that he created a task group to respond to the 
Chairman's Commission's request.
    We are following the progress of the task group in its addressing 
the Chairman's concerns.

    Question 5. Turning to your investigation into possible improper 
contacts between the Department of Energy and the NRC over the 
potential licensing of Yucca Mountain, I recall that you determined 
that DOE ad NRC have not had any improper discussions on the matter. In 
your opinion, is the NRC prepared to address the licensing request by 
the Department of Energy in an independent and impartial manner when--
and if--it is filed?
    Response. Based on the work conducted to date by this office 
regarding Yucca Mountain, we have no reason to believe that the NRC 
staff will not address any licensee application from the Department of 
Energy in an independent and impartial manner.

    Question 6. Does the fiscal year 2004 Budget Proposal adequately 
fund you and your office to carry out your mission?
    Response. For fiscal year 2004, we requested $7.3 million and 47 
FTE to carry out the mission of my office. This represents a total 
increase of $0.5 million over last year's budget. Included within this 
increase is $0.3 million to support the addition of 3 FTE to our 
technical audit staff, and $.02 million to cover the increased 
personnel costs associated with existing staff.
    If these additional audit resources are provided by Congress, it 
will enhance our capability to focus on NRC programs related to the 
handling and disposal of nuclear waste, nuclear fuel fabrication, and 
nuclear material control and accountability issues. It will also enable 
my office to provide better oversight of the NRC's safety-related 
programs and emerging responsibility at certain DOE laboratories, as 
well as the role of NRC's Enforcement Program. Further, the expanded 
capability will enable OIG to assist the Agency in the early 
identification of problems, thereby giving the NRC an opportunity to 
address the problems at an early stage.
    In assessing the basis for the requested OIG budget, it is 
important to note that three-fourths of the NRC's resources are 
dedicated to program activities related to nuclear reactors, materials, 
and waste, while only one-third of OIG auditors work in these program 
areas. Because of the mandatory nature of audit work in the financial 
and information management areas, we cannot divert our existing 
auditing resources into nuclear program activities. To accommodate this 
disparity, we requested these additional audit resources to accomplish 
a more balanced audit program that is better aligned with NRC 
activities and current events.
        
       Responses by Hubert T. Bell to Additional Questions from 
                           Senator Voinovich

    Question 1. Fifty-three percent of the employees feel that it is 
safe to speak up in the NRC about safety issues. How does that compare 
with other organizations of this type?
    Response. NRC is below the composite scores of other organizations 
in the Government research and technology composite. This composite 
includes the scores of various Department of Defense research, 
development, and technology centers (e.g., Naval Undersea Warfare 
Center) and Department of Energy national laboratories (e.g., Lawrence 
Livermore National Laboratory). The contractor did not have a basis to 
compare NRC to other regulatory agencies; as a result there is no 
direct comparison. NRC is 5 percentage points below the composite for 
the Government research and technology sector.

    Question 2. Do you have any statistical background on it?
    Response. NRC was 53 percent in the 2002 Safety Culture and Climate 
Survey (an 8 percent increase from the 1998 survey, which was 45 
percent).
    U.S. Government research and technology composite was 58 percent.
    U.S. research and development norm (includes Merck, Phillips 
Electronics, and Shell Oil Company) was 59 percent.
    The U.S. National Norm (includes organizations such as American 
Airlines, Citibank, Kerr-McGee, and Pricewaterhouse Coopers) was 56 
percent.
                                 ______
                                 
       Responses by Hubert T. Bell to Additional Questions from 
                             Senator Carper

    Question 1. Do you believe the Commission has reviewed the report 
and taken steps to address the concerns you raised?
    Response. Yes. In the NRC's Performance and Accountability Report 
Fiscal Year 2002, the Agency addresses each of the management 
challenges identified by this office. The Agency's response 
demonstrates its commitment to address the challenges presented and the 
Agency provides examples of progress made during fiscal year 2002. As 
an illustration, during the March 11, 2003, Joint Financial Management 
Improvement Program conference, the Deputy Director of the Office of 
Personnel Management praised the Nuclear Regulatory Commission for its 
efforts in the area of workforce planning.

    Question 2. Do you believe that the Commission has sufficient 
resources to adequately address all of the challenges identified in 
your report?
    Response. In addressing each of the challenges, the Agency does not 
question the adequacy of its resources to make continued progress in 
the challenge areas. OIG is not aware of resource limitations that 
could adversely effect sustained progress for each challenge.

    Question 3. Given what has occurred at Davis-Besse in Ohio, and at 
Indian Point in New York, do you see any connection between the low 
score in this category [Continuous Improvement Category] and these 
events?
    Response. The OIG's Safety Culture and Climate Survey was 
undertaken to solicit the views and opinions of NRC employees on a wide 
range of subjects, of which Continuous Improvement Commitment is one. 
Continuous Improvement Commitment assesses employee views on NRC's 
commitment to public safety, and whether employees are encouraged to 
communicate ideas to improve safety, regulations, and operations.
    In comparison to the results of the prior 1998 survey, that score 
improved by 3 percent to 67 percent, but the results were 4 percent 
below similar governmental norms. We do not see a direct correlation 
between that score and the event that occurred at Indian Point and 
Davis Besse. Our reports concerning the events at Indian Point and 
Davis Besse did not directly address employee attitudes in this area. 
During the investigation, we did observe indications that some 
employees were discouraged from raising different points of view.

    Question 4. What should the Commission, and this committee, be 
doing to raise that score?
    Response. The Commission is already taking action to address the 
issues stated in the report. In a memorandum dated January 13, 2003, 
the Chairman advised NRC's Executive Director for Operations that he 
was concerned that more needed to be done to determine the underlying 
causes of the employee attitudes reflected in the identified areas for 
improvement and to develop strategies to address these underlying 
causes systematically. He directed the Executive Director for 
Operations to take the following actions and develop an action plan for 
addressing these matters: (1) develop and conduct a systematic 
assessment of the areas for improvement identified in the report and 
establish appropriate priorities for agency attention; and (2) identify 
the underlying causes for the employee attitudes reflected in each 
area. We are following the progress of these issues.

                                 ______
                                 
       Responses by Hubert T. Bell to Additional Questions from 
                            Senator Clinton

    Question 1. Mr. Inspector General, is your office currently working 
on a report concerning NRC's enforcement of regulatory requirements and 
commitments at the Indian Point 2 nuclear power plant? If so, how long 
have you been working on that particular report?
    Response. The Office of the Inspection General (OIG) is completing 
its investigation into the effectiveness of NRC's regulation of Indian 
Point Unit 2. A section of this report deals with our review of NRC's 
enforcement of regulatory requirements and commitments at that 
facility. Our investigation was initiated in the spring of 2001. During 
the conduct of the field work, the events of September 11, 2001, 
required a large investigative commitment from this office. In the 
spring of 2002, following on the heels of September 11, the Davis-Besse 
matter developed. Once again, OIG's efforts in response to this event 
took investigative resources from the Indian Point 2 investigation.

    Question 2. My staff has had several discussions with your office 
about this report, and you know of my extreme interest in the report. I 
wrote to you about the report just last week in fact, in the hope that 
you would be able to release the report before the February 13, 2003, 
hearing, or tell us about its findings at the hearing. The release of 
this report seems to keep getting pushed back. Can you please give me a 
date certain that this report will be release?
    Response. The OIG Event Inquiry into the effectiveness of NRC's 
regulation of Indian Point Unit 2 will be released by April 25, 2003.

    Question 3. Concerning your testimony, and your findings regarding 
Davis-Besse, Indian Point, and perhaps other plants around the country, 
would you say that there is any sort of trend in the NRC's behavior, in 
that the Commission appears to give ``undue weight'' to what the 
Commission and the industry consider to be the ``costs'' of regulatory 
oversight? That they in essence give greater consideration to these so-
called ``costs'' and perhaps not as much consideration to the adequate 
protection of human health and safety?
    Response. The NRC has adopted as a Performance Goal: reducing 
unnecessary regulatory burden on stakeholders. As the Agency has 
explained, its purpose is to make agency and licensee resources 
available to more effectively focus on safety issues. The costs 
associated with NRC activities can impact a variety of NRC licensees. 
Considering the associated cost in the decisionmaking process is not 
new for the nuclear industry or the NRC.
    The events at Indian Point and Davis Besse showed that on occasion 
actions taken or not taken have financial consequences. Currently, the 
NRC as part of the exercise of its responsibilities is readdressing 
what is meant by an acceptable level of risk, its relationship to 
safety, and associated costs. The work of my office to date does not 
lead me to believe that the NRC in its reappraisal is placing the 
public at an unacceptable risk.
    The events at Indian Point and Davis Besse are, from my 
perspective, occasions where it appears that both the licensee and the 
NRC allowed higher risks to be assumed. I cannot say that these higher 
risks are unacceptable, but the NRC in its reappraisal deliberations 
must, along with its licensees, gauge what is the appropriate balance 
among risk, public health and safety, and any identified associated 
costs.

                               __________
 Statement of Jere Witt, Ottawa County Administrator and Member of the 
                   Davis-Besse Restart Overview Panel

    Mr. Chairman, members of the subcommittee, it is my pleasure to 
present to you a summary of Ottawa County views on the recent events, 
involving the Nuclear Regulatory Commission and Davis-Besse.
    I am Jere Witt, Ottawa County Administrator for the past 25 years, 
and a member of the Davis-Besse Restart Overview Panel.
    Ottawa County is the biggest stakeholder in this process. The 
residents of Ottawa County are the most affected by the plant.
    Safe operation of the plant has and always will be my first 
priority.
    It should also be noted that the Ottawa County Emergency Management 
Agency has demonstrated itself to be one of the best in the country. 
This has been done involving drills with FEMA, the NRC, and more 
importantly real life scenarios of tornadoes, floods, collapsed 
buildings, etc. The protection of the residents is their only goal.
    My role on the Restart Overview Panel is to represent Ottawa County 
to insure the plant is ready to restart and operate safely.
    I have observed the restart activities since day one, attending 
over 60 meetings, many all day long.
    These meetings include:
    a. Restart Overview Panel monthly meetings
    b. Two tours of containment
    c. NRC public meetings
    d. Updates from NRC staff
    e. Three full day meetings with groups of employees on safety 
conscious work environment
    f. Meeting with employees individually
    g. Two meetings with First Energy Board of Directors--Nuclear 
Committee
    h. Observing many plant activities including the Restart Readiness 
Review Board
    We must evaluate the value of the continued operation of Davis-
Besse in terms of safety and impact to the community. Davis-Besse is 
the largest employer and the largest taxpayer in Ottawa County.
    Obviously Davis-Besse and the NRC made mistakes and we must insure 
it never happens again.
    I have personally been involved in the development of the plan 
putting together the actions required to safely and effectively operate 
Davis-Besse in the future.
    There is a new commitment to safety development and it will 
continue to grow.
    This commitment started with the new management team and 
demonstrated through their actions and involvement with the staff.
    The Leadership in the Action program is making sure it permeates 
through all staff from the top to the bottom.
    Employees are using the new systems, as evidenced by the many 
safety improvements being brought to light and instituted, including 
major ones (Emergency Sump/Decay Heat Valve Pit/Leak Detection Systems, 
etc.).
    This will only help the safety culture continue to grow.
    There is a new system in place for the resolution of open issues. 
Employees are trained on it and see the results.
    Management is out in the plant observing the work and being 
directly involved with the staff.
    The CEO and Board of Directors are very involved as evidence by 
time spent at Davis-Besse and meeting with the Restart Overview Panel.
    The NRC 0350 process has been a good one to get to where we are 
today--We now need a better process to insure it does not happen again.
    My recommendations are as follows:
    a. The NRC should meet at least semi-annually with Ottawa County to 
update the status of the plant and any significant risk issues. We 
should be a player in any discussion of potential safety risks.
    b. The Restart Overview Panel should continue in some format to 
continually review the plant operations and the NRC's review of these 
operations. This panel gives an expert independent review of the plant. 
I am sure many plants have expert consultants that review their 
operations, but my experience on this panel has made me keenly aware of 
how much better this review is done, if they meet as a group. They have 
asked the toughest questions throughout the Davis-Besse. incident and 
continuously challenged each other and the staff. I also believe the 
NRC should be involved at least as an observer. I truly believe that 
independent experts such as this acting as a group could have possibly 
prevented this incident.
    c. The NRC must be fully funded to make the necessary inspections.
    d. NRC employees should not be allowed to become employees of a 
utility for a significant time period.
    I also have some questions:
    a. How will the NRC change its programs to guarantee the proper 
inspections at Davis-Besse, to insure safe operations? What methods 
will you use to assess the effectiveness of these changes and will 
there be independent oversight of these changes?
    b. The company has shown how it is changing the safety culture at 
Davis-Besse and how it will measure its effectiveness. I have not seen 
the plan on how the NRC will change its own safety culture and measure 
its effectiveness. The NRC as the regulator must demonstrate to the 
residents of Ottawa County how they will make necessary changes as 
recommended in the ``Lessons Learned Report''.
    c. I know that First Energy has dealt with the personnel issues of 
those involved in this incident. Ottawa County requests that the NRC 
deals with its own appropriately, if they have not already. This is 
vital to public confidence.

                                SUMMARY

    I will assure that Ottawa County will continue a more active role 
as a partner in future operations of Davis-Besse. We will challenge and 
demand answers from both First Energy and the NRC.
    The systems and programs are in place to safely operate Davis-Besse 
and I am confident that with the proper changes made at Davis-Besse, 
FENOC, First Energy, and the NRC we will all continually monitor all 
facets into the future to protect the residents of Ottawa County.
    A renewed stringent regulation by the NRC must be part of this 
process. This regulation must be based on knowledge and common sense, 
not one influenced by political agenda's.
    My personal thanks to NRC staff especially (Jim Dyer, Jack Grobe, 
Bill Dean, Christine Lipa) for their open and candid discussion with 
the residents of Ottawa County and myself. They have gone above and 
beyond to insure we are informed.
    I would also like to express my appreciation to First Energy 
especially (Peter Berg, Bob Saunders, Lew Myers) for allowing me to 
participate on the Restart Overview Panel. They have provided me free 
access to all facets of Davis-Besse.
    Thank you for the opportunity to provide this information.
  
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