Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Notices 17829

Dated: April 3, 1995.

M. Rebecca Winkler,

Committee Management Officer.

[FR Doc. 95–8571 Filed 4–6–95; 8:45 am]

BILLING CODE 7555–01–M

NUCLEAR REGULATORY

COMMISSION

[Docket No. STN 50–528]

Arizona Public Service Company, et

al.; (Palo Verde Nuclear Generating

Station, Unit No. 1), Exemption

I

The Arizona Public Service Company,

et al. (APS or the licensee) is the holder

of Facility Operating License No. NPF–

41, which authorizes operation of the

Palo Verde Nuclear Generating Station,

Unit No. 1 (PVNGS–1). The license

provides, among other things, that

PVNGS–1 is subject to all rules,

regulations, and orders of the U.S.

Nuclear Regulatory Commission (the

Commission or NRC) now or hereafter

in effect. The PVNGS–1 facility is a

pressurized water reactor located at the

licensee’s site in Maricopa County,

Arizona.

II

Section III.D.1.(a) of Appendix J to 10

CFR Part 50 requires the performance of

three Type A containment integrated

leakage rate tests (ILRTs) at

approximately equal intervals during

each 10-year service period of the

primary containment. The third test of

each set shall be conducted when the

plant is shut down for the 10-year

inservice inspection.

III

By letter dated December 28, 1994,

the licensee requested temporary relief

from the requirement to perform a set of

three Type A tests at approximately

equal intervals during each 10-year

service period of the primary

containment. The requested exemption

would permit a one-time interval

extension of the third Type A test by

approximately 20 months (from the

1995 refueling outage, which begins in

May 1995, to the sixth refueling outage

(1R6), currently scheduled for

September 1996) and would permit the

third Type A test of the 10-year

inservice inspection period not to

correspond with the end of the inservice

inspection interval.

The licensee’s request concluded that

the proposed changes for PVNGS–1, a

one-time extension of the interval

between the second and third ILRTs and

a decoupling of the third test from the

outage corresponding to the end of the

10-year inservice inspection period, is

justified for the following reasons:

The previous testing history at

PVNGS–1 provides substantial

justification for the proposed test

interval extension. Type A testing is

performed to determine that the total

leakage from primary containment does

not exceed the maximum allowable

leakage rate (La) as specified in the

PVNGS–1 technical specifications (TS).

The primary containment maximum

allowable leakage rate provides an input

assumption to the calculation required

to ensure that the maximum potential

offsite dose during a design basis

accident does not result in a dose in

excess of that specified in 10 CFR 100.

The allowable La for PVNGS–1 is 0.10

percent by weight of the containment air

per 24 hours at Pa, where Pa is defined

as the calculated peak internal

containment pressure related to the

design basis accident, specified in the

PVNGS–1 TS as 49.5 psig. The

acceptance criteria for the Type A test

is 75 percent of La or 0.075 percent by

weight of the containment air per 24

hours at Pa.

In each of the two previous periodic

ILRTs at PVNGS–1 (the results were

0.066 percent and 0.067 percent by

weight of the containment air per 24

hours at Pa, respectively), the results

obtained were below the test acceptance

criteria of 75 percent of La or 0.075

percent by weight of the containment air

per 24 hours at Pa, thereby,

demonstrating that PVNGS–1 is a lowleakage containment.

The licensee performed a plantspecific study concluding that the

extension of the Type A test has a

negligible impact on overall risk. This

study relied heavily on the existing

Type B and C testing program which is

not affected by this exemption, and will

continue to effectively detect

containment leakage.

Additionally, the licensee stated that

its exemption request meets the

requirements of 10 CFR 50.12,

paragraphs (a)(2)(ii) (the underlying

purpose of the regulation is achieved),

and (a)(2)(iii) (compliance would result

in undue hardship or other costs that

are significantly in excess of those

contemplated when the regulation was

adopted), for the following reasons:

The licensee categorized mechanisms

that could cause degradation of the

containment into two types: (1)

Degradation due to work which is

performed as part of a modification or

maintenance activity on a component or

system (activity based); or (2)

degradation resulting from a time based

failure mechanism (i.e., deterioration of

the containment structure due to

pressure, temperature, radiation,

chemical or other such effects). To

address the potential degradation due to

an activity based mechanism, the

licensee reviewed containment system

related modifications performed since

the last Type A test. The licensee

concluded that the modifications

performed did not impact containment

integrity, or the modifications have, or

will be, tested adequately to ensure that

there is no degradation from an activity

based mechanism. In addition, the

licensee maintains administrative

controls which ensure that an

appropriate retest, including local leak

rate testing, if applicable, is specified for

maintenance activities which affect

primary containment integrity.

Regarding time based failure

mechanisms, the licensee concluded

that risk of a non-detectable increase in

the primary containment leakage is

considered negligible due to the 10 CFR

Part 50, Appendix J, Type B and C

testing program. The licensee stated that

without actual accident conditions,

structural deterioration is a gradual

phenomenon which requires periods of

time well in excess of the proposed 81-

month test interval which would result

by performing the third periodic Type A

test during the sixth refueling outage in

Unit 1. Other than accident conditions,

the only external mechanism inducing

stress of the containment structure is the

test itself. The licensee maintains that

the longer test interval would, therefore,

lessen the frequency of stressing the

containment.

Additionally, the licensee has

performed the general inspections of the

accessible interior and exterior surfaces

of the containment structures and

components prior to the previous Type

A tests, as required by 10 CFR Part 50,

Appendix J, Section V.A. These

inspections are intended to uncover any

evidence of structural deterioration

which may affect either the containment

structural integrity or leak tightness. At

PVNGS–1, there has been no evidence

of structural deterioration that would

impact structural integrity or leak

tightness. In a phone conversation with

the licensee on March 23, 1995, the staff

noted that these inspections, though

limited in scope, provide an important

added level of confidence. The licensee

committed to perform the general

containment civil inspection during the

upcoming refueling outage (1R5).

The 10 CFR Part 50, Appendix J, Type

B tests are intended to detect local leaks

and to measure leakage across pressure

containing or leakage limitingboundaries other than valves, such as

containment penetrations incorporating
17830 Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Notices

resilient seals, gaskets, doors, hatches,

etc. The 10 CFR Part 50, Appendix J,

Type C tests are intended to measure

reactor system primary containment

isolation valve leakage rates. The

frequency and scope of Type B and C

testing is not being altered by this

proposed exemption request. The

acceptance criterion for Type B and C

testing is 0.6 La. This acceptance

criterion is for the sum of all valves and

penetrations subject to Type B and C

testing and represents a considerable

portion of the Type A test allowable

leakage. The results of the as-left

combined Type B and C leakage

measured since the last Unit 1 Type A

test are 0.054 La, 0.06 La, and 0.13 La (for

the February 1991, May 1992, and

November 1993 outages, respectively).

The licensee maintains that these test

results are substantially below the

acceptance criterion of 0.60 La and

demonstrate a good historic

performance of containment integrity.

The proposed schedular exemption

would allow the third Type A leakage

rate test in Unit 1 to be performed

during the Fall 1996 (IR6) refueling

outage, which meets the 10 CFR Part 50,

Appendix J, requirement of performing

three tests in a 10-year time period. The

performance of a fourth Type A test

during the Unit 1 seventh refueling

outage, in order to coincide with the

outage at the completion of the

extended 10-year ISI interval, is not

deemed to be appropriate, as it would

result in additional radiation exposure

to personnel, increased length of the

refueling outage and significant

additional cost. Omitting the test will

result in dose savings by eliminating

contamination and by reducing

radiation exposure from the venting and

draining of piping penetrations

necessary to establish the appropriate

test conditions. There would also be

dose savings from eliminating the need

to install and remove the temporary

instrumentation necessary to perform

the Type A test. Performing a fourth

Type A test would also increase the

duration of the affected outage by

approximately 3 days and result in

additional costs associated with this

increase.

A PVNGS–1 plant-specific analysis

was performed to evaluate the potential

for extending the Type A test frequency.

The PVNGS–1 plant-specific analysis

considered the extension of the interval

to as much as 240 months. The

conclusion of the analysis was that the

extension of the Type A test interval has

a negligible impact on overall risk. The

licensee’s exemption request does not

alter the frequency for performance of

Type A testing (i.e., it still maintains a

frequency of 3 tests per 10 years).

However, the licensee maintains that

the data from this study support the

requested exemption from the

requirement of 10 CFR Part 50,

Appendix J, regarding ‘‘approximately

equal intervals.’’ The interval between

the second and third Type A tests

would be 81 months with this

exemption. The PVNGS–1 plant-specific

analysis supports the use of a 240-

month interval with a negligible impact

on overall risk.

The licensee referenced 10 CFR

50.12(a)(2)(ii) as a basis for this

exemption. This section defines such a

circumstance where ‘‘application of the

regulation in the particular

circumstances would not serve the

underlying purpose of the rule or is not

necessary to achieve the underlying

purpose of the rule * * * .’’ The

underlying purpose of 10 CFR Part 50,

Appendix J, Section III.D.1.(a), is to

establish and maintain a level of

confidence that any primary

containment leakage, during a

hypothetical design basis accident, will

remain less than or equal to the

maximum allowable value, La, by

performing periodic Type A testing.

Compliance with the ‘‘approximately

equal intervals’’ clause of Appendix J is

not necessary to achieve the underlying

purpose of the rule, as explained in the

above technical justification.

The licensee also referenced 10 CFR

50.12(a)(2)(iii) in its submittal, which

states the NRC may grant exemptions

from requirements of 10 CFR Part 50

when ‘‘compliance would result in

undue hardship or other costs that are

significantly in excess of those

contemplated when the regulation was

adopted, or that are significantly in

excess of those incurred by others

similarly situated * * * .’’ The current

PVNGS–1 Type A test schedule would

require that four Type A tests be

performed in an extended ISI interval.

This current schedule would result in

unnecessary additional radiation

exposure in order to perform the test

and unnecessary costs associated with

the performance of the test and the costs

associated with the increase in the

length of the refueling outage. Regarding

the impact of this exemption on overall

risk, it is the staff’s experience that risk

is insensitive to the Type A test

frequency at values of leakage close to

La. Therefore, while the staff agrees with

the licensee’s conclusion that the risk

increase resulting from granting this

exemption is small, the time interval

has no particular significance.

Additionally, the staff has previously

discussed with the licensee that its

scheduling of containment ILRTs early

in the ISI interval is largely responsible

for the necessity of performing an

additional test, and would not

constitute a hardship that was not

anticipated at the time the rule was

written. Therefore, the staff has

reviewed this exemption request against

the criteria of 10 CFR 50.12(a)(2)(ii).

Section III.D.1.(a) of Appendix J to 10

CFR Part 50 states that a set of three

Type A leakage rate tests shall be

performed at approximately equal

intervals during each 10-year service

period.

The licensee proposes an exemption

to this section which would provide a

one-time interval extension for the Type

A test by approximately 20 months.

Additionally, for schedular reasons, the

final Type A test of the 10-year inservice

inspection period is proposed to be

decoupled from the requirement to

perform it during the same outage (the

final Type A test would be performed

the outage prior (1R6) to the end of the

inservice inspection period).

The Commission has determined that,

pursuant to 10 CFR 50.12(a)(1), this

exemption is authorized by law, will not

present an undue risk to the public

health and safety, and is consistent with

the common defense and security. The

Commission further determined, for the

reasons discussed below, that special

circumstances, as provided in 10 CFR

50.12(a)(2)(ii), are present justifying the

exemption; namely, that application of

the regulation in the particular

circumstances is not necessary to

achieve the underlying purpose of the

rule. The underlying purpose of the

requirement to perform Type A

containment leak rate tests at intervals

during the 10-year service period, is to

ensure that any potential leakage

pathways through the containment

boundary are identified within a time

span that prevents significant

degradation from continuing or

becoming unknown. The NRC staff has

reviewed the basis and supporting

information provided by the licensee in

the exemption request. The NRC staff

has noted that the licensee has a good

record of ensuring a leak-tight

containment. All Type A tests have

passed with adequate margin. The

licensee has also noted that the results

of the Type A testing have been

confirmatory of the Type B and C tests

(which will continue to be performed).

Additionally, the licensee has

committed to perform the general

containment civil inspection during the

upcoming refueling outage (1R5),

thereby providing an added level of

confidence in the continued integrity of

the containment boundary.
Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Notices 17831

1Rule 3a12–7 under the Act provides that options

that are not traded on a national securities exchange

and which relate to securities that are direct

obligations of the U.S. or are issued or guaranteed

by a corporation in which the U.S. has a direct or

indirect interest as shall be designated for

exemption pursuant to Section 3(a)(12) of the Act

are exempt from all provisions of the Act which by

their terms do not apply to ‘‘exempted security’’ or

‘‘exempted securities,’’ provided that the securities

underlying the option represent an obligation equal

to or exceeding $250,000 in principal amount.

2The NYSE clarified that category five of the

proposal applies to OTC margin bonds as defined

in Section 220.2(t) (1), (4), and (5) of Regulation T

under the Act. Telephone conversation between

Richard Nowicki, NYSE, and Yvonne Fraticelli,

Attorney, Options Branch, Division of Market

Regulation, on March 22, 1995 (‘‘March 22

Conversation’’). Section 220.2(t)(1) defines an OTC

margin bond as certain debt securities not traded on

a national securities exchange; Section 220.2(t)(4)

defines an OTC margin bond as a debt security

issued or guaranteed as a general obligation by the

government of a foreign country, its provinces,

states or cities, or a supranational entity, provided

that certain credit rating requirements are satisfied;

and Section 220.2(t)(5) defines an OTC margin bond

as a foreign security that is a nonconvertible debt

security that meets the requirements specified in

Section 220.2(t)(5).

The NRC staff has also made use of a

draft staff report, NUREG–1493, which

provides the technical justification for

the present Appendix J rulemaking

effort which also includes a 10-year test

interval for Type A tests. The integrated

leakage rate test, or Type A test,

measures overall containment leakage.

However, operating experience with all

types of containments used in this

country demonstrates that essentially all

containment leakage can be detected by

local leakage rate tests (Type B and C).

According to results given in NUREG1493, out of 180 ILRT reports covering

110 individual reactors and

approximately 770 years of operating

history, only 5 ILRT failures were found

which local leakage rate testing could

not detect. This is three percent of all

failures. This study agrees with previous

NRC staff studies which show that Type

B and C testing can detect a very large

percentage of containment leaks. The

PVNGS–1 experience has also been

consistent with this.

The Nuclear Management and

Resources Council (NUMARC), now the

Nuclear Energy Institute (NEI), collected

and provided the NRC staff with

summaries of data to assist in the

Appendix J rulemaking effort. NUMARC

collected results of 144 ILRTs from 33

units; 23 ILRTs exceeded 1.0 La. Of

these, only nine were not due to Type

B or C leakage penalties. The NEI data

also added another perspective. The NEI

data show that in about one-third of the

cases exceeding allowable leakage, the

as-found leakage was less than 2 La; in

one case the leakage was found to be

approximately 2 La; in one case the asfound leakage was less then 3 La; one

case approached 10 La; and in one case

the leakage was found to be

approximately 21 La. For about half of

the failed ILRTs, the as-found leakage

was not quantified. These data show

that, for those ILRTs for which the

leakage was quantified, the leakage

values are small in comparison to the

leakage value at which the risk to the

public starts to increase over the value

of risk corresponding the La

(approximately 200 La, as discussed in

NUREG–1493).

Based on generic and plant-specific

data, the NRC staff finds the licensee’s

proposed one-time exemption to permit

a schedular extension of one cycle for

the performance of the Appendix Type

A test, and the decoupling of the third

test to be performed coincident with the

completion of the inservice inspection

period, to be acceptable.

Pursuant to 10 CFR 51.32, the

Commission has determined that

granting this exemption will not have a

significant impact on the human

environment (60 FR 16180).

This exemption is effective upon

issuance and shall expire at the

completion of the 1R7 refueling outage.

For the Nuclear Regulatory Commission.

Dated at Rockville, Maryland, this 31st day

of March 1995.

Elinor G. Adensam,

Acting Director, Division of Reactor Projects—

III/IV, Office of Nuclear Reactor Regulation.

[FR Doc. 95–8585 Filed 4–6–95; 8:45 am]

BILLING CODE 7590–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–35555; File No. SR–NYSE–

95–10]

Self-Regulatory Organizations, Notice

of Filing of Proposed Rule Change by

the New York Stock Exchange, Inc.,

Relating to Margin Requirements for

Over-the-Counter Options and Interest

Rate Composites

March 31, 1995.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on March 9, 1995, the

New York Stock Exchange, Inc.

(‘‘NYSE’’) or ‘‘Exchange’’) filed with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) the proposed

rule change as described in Items I, II

and III below, which Items have been

prepared by the self-regulatory

organization. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The NYSE proposes to amend

Exchange Rule 431, ‘‘Margins’’ to

establish margin requirements for overthe-counter (‘‘OTC’’) options and

interest rate composites. Specifically,

the NYSE proposes to establish initial

and/or maintenance margin

requirements for short positions in OTC

options overlying certain instruments

which are equal to a specified

percentage of the current value of the

underlying component and the

applicable multiplier, if any, plus any

in-the-money amount. The required

OTC option margin may be reduced by

any out-of-the-money amount, but may

not be less than the minimum amount

specified for each option category. The

percentages of the current value of the

underlying components are as follows:

(1) For stock and convertible corporate

debt securities, 30%, with minimum

margin of 10%; (2) for industry index

stock groups, 30%, with minimum

margin of 10%; (3) for broad index stock

groups, 20%, with minimum margin of

10%; (4) for U.S. Government or U.S.

government agency debt securities other

than those exempted by Rule 3a12–7

under the Act,1 5%, with minimum

margin of 3%; (5) for corporate debt

securities registered on a national

securities exchange and OTC margin

bonds as defined in Section 220.2(t) (1),

(4), and (5) 2 of Regulation T under the

Act, 15% with minimum margin of 5%;

and (6) for all other OTC options, 45%,

with minimum margin of 20%.

The text of the proposed rule change

is available at the office of the Secretary,

NYSE, and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization included

statements concerning the purpose of

and basis for the proposed rule change

and discussed any comments it received

on the proposed rule change. The text

of these statements may be examined at

the places specified in Item IV below.

The self-regulatory organization has

prepared summaries, set forth in

sections (A), (B), and (C) below, of the

most significant aspects of such

statements.