9220 Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Notices

Pursuant to 10 CFR 2.202(c)(2)(i), Mr.

Mulkey or any other person adversely

affected by this Order, may, in addition

to demanding a hearing, at the time the

answer is filed or sooner, move the

presiding officer to set aside the

immediate effectiveness of the Order on

the ground that the Order, including the

need for immediate effectiveness, is not

based on adequate evidence, but on

mere suspicion, unfounded allegations,

or error.

In the absence of any request for

hearing, or written approval of an

extension of time in which to request a

hearing, the provisions specified in

Section IV above shall be final 20 days

from the date of this Order without

further order or proceedings. If an

extension of time for requesting a

hearing has been approved, the

provisions specified in Section IV shall

be final when the extension expires if a

hearing request has not been received.

AN ANSWER OR A REQUEST FOR

HEARING SHALL NOT STAY THE

IMMEDIATE EFFECTIVENESS OF THIS

ORDER.

Dated at Rockville, Maryland this 18th day

of February 1997.

For the Nuclear Regulatory Commission.

Edward L. Jordan,

Deputy Executive Director for Regulatory

Effectiveness, Program Oversight,

Investigations and Enforcement.

[FR Doc. 97–4998 Filed 2–27–97; 8:45 am]

BILLING CODE 7590–01–P

[Docket No. 50–397; License No. NPF–21

EA 96–327]

In the Matter of Washington Public

Power Supply System Washington

Nuclear Project-2; Order Imposing Civil

Monetary Penalty

I

Washington Public Power Supply

System (Supply System or Licensee) is

the holder of reactor operating license

NPF–21 issued by the Nuclear

Regulatory Commission (NRC or

Commission) on April 13, 1984. The

license authorizes the Licensee to

operate Washington Nuclear Project 2

(WNP–2) in accordance with the

conditions specified therein.

II

An inspection of the Licensee’s

activities was conducted June 28

through September 4, 1996. The results

of this inspection indicated that the

Licensee had not conducted its

activities in full compliance with NRC

requirements. A written Notice of

Violation and Proposed Imposition of

Civil Penalty (Notice) was served upon

the Licensee by letter dated November

26, 1996. The Notice described the

violations, including the provisions of

the NRC’s requirements that the

Licensee had violated, and the amount

of the civil penalty proposed for the

violations.

The Licensee responded to the Notice

in a letter dated December 23, 1996. In

its response, the Licensee admitted that

the violations had occurred but

requested reconsideration of the

proposed civil penalty, citing the

following reasons: (1) A penalty of

$50,000 would be more consistent with

the purposes of the NRC’s enforcement

policy; (2) there was no systemic

breakdown in operational activities at

WNP–2; (3) additional credit should be

given for corrective actions; and (4) the

enforcement action placed too much

emphasis on a previous surveillancerelated violation.

III

After consideration of the Licensee’s

response and the statements of fact,

explanation, and argument for

mitigation contained therein, the NRC

staff has determined, as set forth in the

Appendix to this Order, that the

Licensee has not provided a basis for

mitigation of the civil penalty and that

the penalty proposed for the violations

in the Notice should be imposed.

IV

In view of the foregoing and pursuant

to Section 234 of the Atomic Energy Act

of 1954, as amended (Act), 42 U.S.C.

2282, and 10 CFR 2.205, It is hereby

ordered that:

The Licensee pay a civil penalty in

the amount of $100,000 within 30 days

of the date of this Order, by check, draft,

money order, or electronic transfer,

payable to the Treasurer of the United

States and mailed to James Lieberman,

Director, Office of Enforcement, U.S.

Nuclear Regulatory Commission, One

White Flint North, 11555 Rockville

Pike, Rockville, MD 20852–2738.

V

The Licensee may request a hearing

within 30 days of the date of this Order.

Where good cause is shown,

consideration will be given to extending

the time to request a hearing. A request

for extension of time must be made in

writing to the Director, Office of

Enforcement, U.S. Nuclear Regulatory

Commission Washington, DC 20555,

and include a statement of good cause

for the extension. A request for a

hearing should be clearly marked as a

‘‘Request for an Enforcement Hearing’’

and shall be addressed to the Director,

Office of Enforcement, U.S. Nuclear

Regulatory Commission Washington, DC

20555, with a copy to the Commission’s

Document Control Desk, Washington,

DC 20555. Copies also shall be sent to

the Assistant General Counsel for

Hearings and Enforcement at the same

address and to the Regional

Administrator, NRC Region IV, 611

Ryan Plaza Drive, Suite 400, Arlington,

TX 76055.

If a hearing is requested, the

Commission will issue an Order

designating the time and place of the

hearing. If the Licensee fails to request

a hearing within 30 days of the date of

this Order (or if written approval of an

extension of time in which to request a

hearing has not been granted), the

provisions of this Order shall be

effective without further proceedings. If

payment has not been made by that

time, the matter may be referred to the

Attorney General for collection.

In the event the Licensee requests a

hearing as provided above, the issues to

be considered at such hearing shall be:

Whether, on the basis of the violations

admitted by the Licensee, this Order

should be sustained.

Dated at Rockville, Maryland this 14th day

of February 1997.

For the Nuclear Regulatory Commission.

James Lieberman,

Director, Office of Enforcement.

Appendix—Evaluation and Conclusion

On November 26, 1996 a Notice of

Violation and Proposed Imposition of Civil

Penalty (Notice) was issued for violations

identified during an NRC inspection. The

Washington Public Power Supply System

(Supply System or Licensee) responded to

the Notice on December 23, 1996. The

Supply System admitted the violations but

requested reconsideration of the amount of

the civil penalty. A summary of the

Licensee’s reasons for a reduction in the

amount of the civil penalty and the NRC’s

evaluation of those reasons follow:

Summary of Licensee’s Request for

Reconsideration and NRC Evaluation

1. The Supply System stated that, given the

NRC’s recognition of the Supply System’s

identification of most of the violations and its

prompt and comprehensive corrective

actions, a more appropriate regulatory

message would be a penalty at the base

amount of $50,000. The Supply System cited

the intent of the NRC’s Enforcement Policy

(General Statement of Policy and Procedures

for NRC Enforcement Actions, NUREG–1600)

to encourage prompt identification and

prompt, comprehensive correction of

violations.

NRC Response: The NRC recognized that

the Supply System identified most of the

violations and that its corrective actions were

prompt and comprehensive. In fact, as the

Supply System noted in its response, the

NRC characterized this as a sign of improved

performance. Had the NRC considered no
Federal Register / Vol. 62, No. 40 / Friday, February 28, 1997 / Notices 9221

additional information, no civil penalty

would have been assessed for these

violations, in accordance with the civil

penalty assessment process described in

VI.B.2 of the Enforcement Policy. However,

the NRC utilized its enforcement discretion,

as described in Section VII.A.1 of the

Enforcement Policy, to assess a civil penalty

in the amount of $100,000. This section of

the policy permits the NRC to assess a

penalty where none might otherwise be

proposed, or to increase the amount of a civil

penalty, to reflect the safety or regulatory

significance of the violations. In this case, the

NRC utilized its discretion to propose a

$100,000 civil penalty for two primary

reasons. First, the Supply System had been

cited in August 1995, for violations in the

Supply System’s surveillance requirements

program as part of an escalated enforcement

action (EA 95–096). The number of similar

violations that occurred over a relatively

short period of time in 1996 demonstrated

serious weaknesses in the Supply System’s

surveillance requirements program and

showed that the Supply System’s 1995

corrective actions had not gone far enough to

address these weaknesses. Secondly, the NRC

utilized discretion to emphasize the

fundamental importance of the surveillance

program and to express its concern that, at

this stage in the operation of this facility,

weaknesses would exist as serious as those

evidenced by the numerous violations

forming the basis of this enforcement action.

The NRC determined that a civil penalty

larger than the $50,000 civil penalty assessed

in 1995 was warranted in these

circumstances and proposed a $100,000 civil

penalty for this matter.

2. The Supply System stated that there was

no systemic breakdown in operational

activities.

NRC Response: The NRC accepts this

statement, but it has little relevance to the

current enforcement action. The NRC based

its action on the serious weaknesses in the

surveillance program at WNP–2, as

evidenced by several surveillance-related

violations occurring over a relatively short

period of time, and the ineffectiveness of

previous corrective actions to preclude

recurrence. These violations were considered

collectively as a Severity Level III problem in

accordance with Supplement I of the

Enforcement Policy. The Supply System’s

assertion that these violations did not

represent a ‘‘systemic breakdown’’ in

operational activities does not affect the

NRC’s perspective or the enforcement action.

There was clearly a programmatic issue.

3. The Supply System stated that

additional credit should be given for its

prompt and comprehensive corrective

actions.

NRC Response: As stated above, the NRC

recognized that the Supply System took

prompt and comprehensive corrective

actions. The penalty was not based on any

perceived shortcomings in the Supply

System’s corrective actions for the current

(1996) violations. The NRC’s concern about

corrective actions was based on the

aforementioned 1995 enforcement action (EA

95–096), in which surveillance-related

violations made up part of a Severity Level

III problem that resulted in a $50,000 civil

penalty being assessed. In EA 95–096, issued

on August 17, 1995, nine violations were

considered in the aggregate as a Severity

Level III problem. Violations E(1), E(2) and F

of EA 95–096 involved changing operational

conditions (modes) with equipment

inoperable, a violation of the Technical

Specifications. In the current enforcement

action, the violations involved changing

modes with equipment inoperable and

changing modes without having conducted

required surveillances. All of these violations

involved the programs and processes in place

to assure that equipment was operable and

that required surveillances had been

conducted prior to changing modes. In taking

its action in 1995, the NRC specifically stated

that it had limited the civil penalty to

$50,000 ‘‘in recognition of the fact that you

have proposed comprehensive corrective

actions.’’ Since those actions were not

effective with respect to surveillance-related

problems that form the basis for this

enforcement action, as well as to emphasize

the fundamental importance of surveillance

program compliance, the NRC proposed a

civil penalty ($100,000) that was larger than

the civil penalty proposed for EA 95–096

($50,000). The NRC notes that the Supply

System’s corrective actions for the 1995

enforcement action did not extend to its

processes for assuring compliance with

surveillance requirements and that, as of the

occurrence of the violations in 1996, no

checklist or other verification method existed

to ensure that surveillances had been

completed prior to changing modes, a

commonly used method of verifying

compliance.

4. The Supply System stated in its

response that the enforcement action placed

too much emphasis on the prior surveillancerelated violation, noting that only one current

violation was similar to a previous violation

only in that it involved errors in LCO

tracking prior to plant mode changes.

NRC Response: The NRC does not agree

that the similarities between the 1995 and

1996 enforcement actions are limited to one

example. As noted above, Violations E(1),

E(2) and F in the 1995 enforcement action

involved making mode changes with

required equipment inoperable. In the

current enforcement action, Violations A, B

(with 3 examples) and C involved changing

modes without having conducted required

surveillances to show equipment operable.

The NRC placed emphasis on this similarity,

and in fact relied upon it as one of the

primary reasons for utilizing enforcement

discretion, to emphasize that escalated

enforcement action had been taken in August

1995, less than one year prior to the current

violations occurring. The NRC’s expectation

is that licensees who receive escalated

enforcement action will take corrective

action that is broad and comprehensive such

that a recurrence of the violations is

precluded or minimized. In this case, it was

apparent that the Supply System’s previous

corrective actions did not address

weaknesses in WNP–2’s programs for

assuring that surveillances were conducted

and that equipment was operable prior to

changing plant modes. Thus, the NRC does

not agree that too much emphasis was placed

on the similarities between the 1995 and

1996 enforcement actions. In addition, as

discussed in response to other arguments

above, the NRC exercised discretion to

emphasize its concern about serious

weaknesses in such a fundamental aspect of

complying with plant Technical

Specifications.

NRC Conclusion

The NRC concludes that its use of

enforcement discretion to propose a $100,000

civil penalty was appropriate and in

accordance with the Enforcement Policy’s

emphasis in Section VII.A.1 of assuring that

the enforcement action reflects the

significance of the circumstances and

conveys the appropriate regulatory message.

Consequently, the proposed civil penalty in

the amount of $100,000 should be imposed

by order.

[FR Doc. 97–5000 Filed 2–27–97; 8:45 am]

BILLING CODE 7590–01–P

OFFICE OF MANAGEMENT AND

BUDGET

Discount Rates for Cost-Effectiveness

Analysis of Federal Programs

AGENCY: Office of Management and

Budget.

ACTION: Revisions to Appendix C of

OMB Circular A–94.

SUMMARY: The Office of Management

and Budget revised Circular A–94 in

1992. The revised Circular specified

certain discount rates to be updated

annually when the interest rate and

inflation assumptions used to prepare

the budget of the United States

Government were changed. These

discount rates are found in Appendix C

of the revised Circular. The updated

discount rates are shown below. The

discount rates in Appendix C are to be

used for cost-effectiveness analysis,

including lease-purchase analysis, as

specified in the revised Circular. They

do not apply to regulatory analysis.

DATES: The revised discount rates are

effective immediately and will be in

effect through February 1998.

FOR FURTHER INFORMATION CONTACT:

Robert B. Anderson, Office of Economic

Policy, Office of Management and

Budget, (202) 395–3381.

Joseph J. Minarik,

Associate Director for Economic Policy, Office

of Management and Budget.

Appendix C

(Revised February 1997)

Discount Rates for Cost-Effectiveness,

Lease Purchase, and Related Analyses

Effective Dates. This appendix is

updated annually around the time of the