Nuclear Energy: NRC Has Made Progress in Implementing Its Reactor Oversight and Licensing Processes but Continues to Face Challenges
Published: 2007-10-03T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Nuclear Regulatory Commission (NRC) is responsible for overseeing the nation's 104 commercial nuclear power reactors to ensure they are operated safely. Since 2000, NRC has used a formal Reactor Oversight Process (ROP) to oversee safety. NRC is also responsible for licensing the construction and operation of new reactors. Electric power companies have announced plans to submit 20 applications in the next 18 months. This testimony is based on GAO reports that reviewed (1) how NRC implements the ROP, (2) the results of the ROP over several years, (3) the status of NRC's efforts to improve the ROP, (4) NRC's efforts to prepare its workforce and manage its workload for new reactor licensing, and (5) NRC's efforts to develop its regulatory framework and review processes for new reactor activities. In conducting this work, GAO analyzed programwide information and interviewed cognizant NRC managers and industry representatives.
section_title: What GAO Found
paragraphs: In implementing its ROP, NRC uses various tools and takes a risk-informed and graded approach to ensure the safety of nuclear power facilities. The ROP primarily relies on physical inspections of equipment and operations and quantitative measures or indicators of performance at each facility to assess the status of safety and determine appropriate levels of oversight. Since 2001, NRC has made more than 4,000 inspection findings that reactor unit operators had not fully complied with safety procedures. Almost all of these findings were for actions NRC considered important to correct but of low significance to safe operations. As a result of NRC inspections, more than 75 percent of the nation's reactor units received some level of increased oversight while five units were subjected to NRC's highest level of oversight for long periods because their performance problems were more systemic. In 2006, GAO reported that NRC has generally taken a proactive approach to improving its ROP. However, concerted efforts will be needed to address shortcomings, particularly in identifying and addressing early indications of declining reactor safety performance. For example, NRC is implementing several enhancements to the ROP to better assess a facility's safety culture--organizational characteristics that ensure safety issues receive the attention their significance warrants. GAO made recommendations to further improve this effort, and NRC has taken initial steps to implement them. NRC has taken important steps to prepare its workforce for new licensing reviews, but several key activities are still underway and uncertainties remain about its management of the expected surge of applications. For example, NRC has increased funding, hired hundreds of new employees, and created and partly staffed a new office. However, NRC has not completed its development of some computer-based tools for enhancing the consistency and coordination of application reviews and has not fully developed criteria for setting priorities if the workload exceeds available resources. Also, while NRC's Office of New Reactors established a resource management board for coordinating certain office review activities, it has not clearly defined the extent of the board's responsibilities. NRC agreed with recommendations GAO made to further improve its workload management. NRC has revised most of its primary regulatory framework and review processes, including its rules, guidance, and oversight criteria to provide for early resolution of issues, standardization, and enhanced predictability. However, NRC has not yet completed some associated rules, guidance, and review process components, including revisions to its environmental guidance, its hearing process, and its process for requesting additional information from applicants. Without these components, expected efficiencies and predictability may be limited regarding the total time an applicant needs to obtain a license. NRC agreed with a recommendation GAO made to further improve its application review process.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the adequacy of the Nuclear  Regulatory Commission’s (NRC) Reactor Oversight Process (ROP) to  ensure public health and safety. Through the ROP, NRC oversees the  operation of the nation’s 104 commercial nuclear power reactors, which  provide about 20 percent of the nation’s electricity. The safety of these  reactors, which are located at 65 facilities in 31 states, has always been  important because an accident could result in the release of radioactive  material with potentially serious adverse effects on public health and the  environment. NRC is responsible for inspecting operating nuclear power  facilities, while facility operators are responsible for safely operating their  facilities. NRC has the authority to take actions, up to and including  shutting down a reactor, if conditions are not being met and the reactor  poses an undue risk to public health and safety.
NRC is also responsible for licensing the construction and operation of  new reactors. Since 1989, NRC has worked to develop a regulatory  framework and review process for licensing new reactors that allow an  electric power company to obtain a construction permit and an operating  license through a single combined license (COL) based on one of a  number of standard reactor designs. The COL is NRC’s response to the  nuclear industry’s concerns about the length and complexity of NRC’s  former two-step process of issuing a construction permit followed by an  operating license. NRC has been working to complete this process  because electric power companies have announced plans to submit 20  applications in the next 18 months for licenses to build and operate 31 new  reactor units—nearly three decades after the last order was placed for a  new civilian nuclear power reactor unit in the United States.
As requested, my remarks today will focus on our September 2006 report,  which examined how NRC implements the ROP to oversee reactor  operations safety, the results of the ROP over the past several years, and  the status of NRC’s efforts to improve the ROP from 2001 through 2005. In  addition, on September 21, 2007, we issued a report to you on the steps  NRC has taken to prepare its workforce and manage its workload for new  reactor licensing and to develop its regulatory framework and key review  processes for new reactor activities.
To examine NRC’s oversight of operating reactors through the ROP, we  assessed NRC’s policies and guidance documents, examined inspection  manuals and findings reports, and reviewed the level of oversight it  provided as a result of its findings. We analyzed NRC data on nuclear  reactor safety for 2001 through 2005, including an assessment of their  reliability, which we determined were sufficiently reliable for the purposes  of our report. We also analyzed NRC’s annual self-assessment reports and  relevant inspection documents, reviewed external evaluations of the ROP,  and interviewed several NRC managers and external stakeholders.  Physical security, which is also covered by the ROP, was not included in  this review. In addition, to examine NRC’s readiness to evaluate new  reactor license applications, we reviewed NRC documents for new reactor  workforce staffing and training, examined NRC’s regulations and  guidance, and interviewed managers in NRC’s Office of New Reactors and  several other offices with responsibilities related to new reactor efforts.  Furthermore, we interviewed nearly all of the announced applicants to  obtain their views on the efficiency and usefulness of NRC’s application  review process and observed several of NRC’s public meetings on the new  reactor licensing process. Our ROP work was conducted from July 2005  through July 2006, and our new reactor licensing work from January 2007  through September 2007, in accordance with generally accepted  government auditing standards.
subsections: section_title: Background
paragraphs: NRC’s Office of Nuclear Reactor Regulation provides overall direction for  the oversight process and the Office of Enforcement is responsible for  ensuring that appropriate enforcement actions are taken when  performance issues are identified. NRC’s regional offices are responsible  for implementing the ROP, along with the inspectors who work directly at  each of the nuclear power facilities. NRC relies on on-site resident  inspectors to assess conditions and the licensees’ quality assurance  programs, such as those required for maintenance and problem  identification and resolution. With its current resources, NRC can inspect  only a relatively small sample of the numerous activities going on during  complex operations. NRC noted that nuclear power facilities’ improved  operating experience over more than 25 years allows it to focus its  inspections more on safety significant activities.
One key ROP goal is to make safety performance assessments more  objective, predictable, and understandable. The unexpected discovery, in  March 2002, of extensive corrosion and a pineapple-size hole in the reactor  vessel head—a vital barrier preventing a radioactive release—at the Davis- Besse nuclear power facility in Ohio led NRC to re-examine its safety  oversight and other regulatory processes to determine how such corrosion  could be missed. Based on the lessons learned from that event, NRC made  several changes to the ROP. NRC continues to annually assess the ROP by  obtaining feedback from the industry and other stakeholders such as  public interest groups, and incorporates this feedback and other  information into specific performance metrics to assess its effectiveness.
In anticipation of licensing new reactors, NRC has accelerated its efforts  to build up its new reactor workforce. NRC’s workforce has grown from  about 3,100 employees in 2004 to about 3,500 employees as of August 2007,  and NRC projects that its total workforce size needs will grow to about  4,000 employees by 2010.
NRC estimates that the first few COL applications will require about  100,000 hours of staff review and identified around 2,500 associated review  activities related to each application’s detailed safety, environmental,  operational, security, and financial information, which may total several  thousand pages. NRC anticipates that for each application, the review  process will take 42 months—including 30 months for its staff review,  followed by approximately 12 months for a public hearing. In addition to  the COL, NRC has established (1) the design certification, which  standardizes the design of a given reactor for all power companies using it,  with modifications limited to site-specific needs, and (2) an early site  permit, which allows a potential applicant to resolve many preliminary  siting issues before filing a COL application. Electric power companies  plan to use five different reactor designs in their COL applications.
section_title: NRC Uses Various Tools and Takes a Risk-Informed and Graded Approach to Ensuring the Safety of Nuclear Power Facilities
paragraphs: In implementing its ROP, NRC oversees the safe operation of nuclear  power facilities through physical inspections of the various complex plant  equipment and operations, reviews of reactor operator records, and  quantitative measures or indicators of each reactor’s performance. (See  table 1 for a more expansive treatment of these tools.) These tools are  risk-informed in that they focus on the aspects of operations considered  most important to safety. NRC bases its oversight process on the principle  and requirement that licensees have programs in place to routinely  identify and address performance issues without NRC’s direct  involvement. Thus, an important aspect of NRC’s inspection process is  ensuring the effectiveness of licensee programs designed to identify and  correct problems. On the basis of the number and risk significance of  inspection findings and performance indicators, NRC places each reactor  unit into one of five performance categories on its action matrix, which  corresponds to graded, or increasing, levels of oversight. NRC assesses  overall facility performance and communicates the results to licensees and  the public on a semiannual basis.
section_title: The ROP Has Identified Numerous Problems at Nuclear Power Facilities, but Few Have Been Considered Significant to Their Safe Operation
paragraphs: From 2001 through 2005, the ROP identified performance deficiencies  through more than 4,000 inspection findings at nuclear power facilities.  Ninety-seven percent of these findings were designated green—very low  risk to safe facility operations, but important to correct. Two percent (86)  were white findings that were considered to be of low to moderate risk  significance. Twelve findings were of the highest levels of risk  significance—7 yellow and 5 red. More recently, from January 2006  through June 2007, NRC identified an additional 1,174 green findings, 27  white findings, 1 yellow finding, and no red findings.
NRC also reviews performance indicators data—used to monitor different  aspects of operational safety—that facility operators report to categorize  the level of reactor unit performance for each indicator. From 2001  through June 2007, NRC reported that less than 1 percent of over 39,000  indicator reports exceeded acceptable performance thresholds and nearly  half of all reactor units have never had a performance indicator fall  outside of the acceptable level. Through June 2007, 3 of the 16  performance indicators have always been reported to be within acceptable  performance levels—measuring the amount of time that the residual heat  removal safety system is unavailable, monitoring the integrity of a  radiation barrier, and monitoring radiological releases. Since 2001, three  reactor units have reported a yellow indicator for one performance  indicator. No red indicators have ever been reported.
For varying periods from 2001 through 2005, on the combined basis of  inspection findings and performance indicators, NRC has subjected more  than 75 percent of the reactor units to oversight beyond the baseline  inspections. While most reactors received the lowest level of increased  oversight through a supplemental inspection, five reactors were subjected  to NRC’s highest level of oversight. Reactor units in this category were  generally subjected to this higher oversight for long periods due to the  more systemic nature of their performance problems. Currently, 1 unit is  receiving the highest level of oversight by NRC, and 10 units at 6 facilities  are receiving the second level of oversight.
NRC inspectors at the facilities we reviewed indicated that when a reactor  unit’s performance declines it is often the result of deficiencies or  ineffectiveness in one or more of the three cross-cutting areas—problem  identification and resolution, human performance, and a safety-conscious  work environment. NRC inspectors cited examples of possible cross- cutting issues: (1) a facility does not have an effective corrective action  program that appropriately identified and resolved problems early; (2) a  facility employee has not followed correct maintenance procedures, and  NRC made a finding associated with the human performance area; and (3)  facility management is complacent by not paying attention to detail or  adhering to procedures. Our examination of ROP data found that all  reactor units that NRC subjected to its highest level of oversight had  findings related to one or more of these substantive cross-cutting issues. In  addition, recent NRC inspections have found more problems associated  with these cross-cutting issues, in part because of new guidance for  identifying and documenting them.
section_title: NRC Continues to Make Improvements to Its ROP in Key Areas
paragraphs: Our 2006 report found that NRC has generally taken a proactive approach  to continuously improving its oversight process, in response to  recommendations that grew out of the Davis-Besse incident; independent  reviews; and feedback that is usually obtained during NRC’s annual self- assessment of its oversight process from stakeholders, including its  regional and on-site inspectors. Continued efforts will be needed to  address other shortcomings or opportunities for improvement, however,  particularly in improving its ability to identify and address early  indications of declining safety performance at nuclear power facilities. For  the most part, NRC considers these efforts to be refinements to its  oversight process, rather than significant changes.
Specific areas that NRC is addressing include the following:    To better focus efforts on the areas most important to safety, NRC has  formalized its process for periodically revising its inspection procedures.  In particular, NRC completed substantive changes to its inspection and  assessment program documents—including those currently guiding the  highest level of NRC inspections—to more fully incorporate safety culture.
To address concerns about the amount of time, level of effort, and  knowledge and resources required to determine the risk significance of  some inspection findings, NRC has modified its significance determination  process, which, according to NRC’s 2006 self-assessment, has significantly  improved timeliness.
To address concerns that performance indicators did not facilitate the  early identification of poor performance, NRC has modified several  indicators to make them more risk-informed for identifying the risks  associated with changes in the availability and reliability of important  safety systems. In addition, NRC revised an indicator to more accurately  reflect the frequency of events that upset reactor unit stability and  challenge critical safety functions. NRC is considering options for revising  indicators for emergency preparedness and reactor cooling systems. Both  NRC’s 2006 self-assessment and internal staff survey cited the need to  further improve the performance indicators and their associated guidance.
Although NRC and others have long recognized the effects of a facility’s  safety culture on performance, NRC did not undertake efforts to better  incorporate safety culture into the ROP until 2005, when it formed a  working group to lead the agency’s efforts. To date, the group has  completed guidance for identifying, addressing, and evaluating cross- cutting issues specific to safety culture.
Our 2006 report concluded that NRC’s efforts to incorporate safety culture  into the ROP may be its most critical future change to the ROP and  recommended that NRC aggressively monitor; evaluate; and, if needed,  implement additional measures to increase the effectiveness of its initial  safety culture changes. We also recommended that NRC consider  developing specific indicators to measure important aspects of safety  culture through its performance indicator program. While NRC has largely  implemented initial safety culture enhancements to the ROP that primarily  address cross-cutting issues, it does not plan to take any additional actions  to further implement either recommendation before it completes its  assessment of an 18-month implementation phase at the end of this year.  This assessment will include lessons learned that NRC managers have  compiled since July 2006, including insights from internal and external  stakeholders about the effectiveness of ROP enhancements.
In addition, we recommended that NRC, in line with its desire to make the  ROP an open process, make available additional information on the safety  culture at nuclear power facilities to the public and its other stakeholders  to provide a more comprehensive picture of performance. NRC has  implemented this recommendation by modifying its ROP Web site to fully  explain the review process regarding cross-cutting issues and safety  culture, and now provides data and correspondence on the reactor units  or facilities that have substantive open cross-cutting issues.
section_title: NRC Has Implemented Many Actions to Prepare Its Workforce for New Reactor Licensing Reviews and Manage Its Workload, but Several Key Elements Are Still Under Way
paragraphs: NRC has prepared its workforce for new reactor licensing reviews by  increasing funding for new reactor activities, reorganizing several offices,  creating and partly staffing the Office of New Reactors (NRO), and hiring a  significant number of entry-level and midlevel professionals. As of August  2007, NRC had assigned about 350 staff to NRO, about 10 percent of the  total NRC workforce; however, some critical positions are vacant, and the  office plans to grow to about 500 employees in 2008. To assist its staff in  reviewing the safety and environmental portions of the applications, NRC  plans to contract out about $60 million in fiscal year 2008 through support  agreements with several Department of Energy national laboratories and  contracts with commercial companies. NRC also has rolled out several  new training courses, but it is still developing content for in-depth training  on reactor designs.
NRC is using a project management approach to better schedule, manage,  and coordinate COL application and design certification reviews. While  NRC has made progress, several elements of NRC’s activities to prepare its  workforce are still under way, as the following illustrates:    NRC has developed plans for allocating resources for a design certification  application and an early site permit it is currently reviewing, 20 COL  applications, 2 additional design certification applications, and a design  certification amendment application. However, NRC has not yet developed  specific criteria to set priorities for reviewing these applications if it needs  to decide which applications take precedence. Without criteria, NRC  managers are likely to find it more difficult to decide how to allocate  resources across several high-priority areas. Accordingly, we  recommended that NRC fully develop and implement criteria for setting  priorities to allocate resources across applications by January 2008, which  NRC has agreed to do.
NRC is developing computer-based project management and reviewer  tools to assist staff in scheduling and reviewing multiple applications at  the same time. For example, Safety Evaluation Report templates are  designed to assist COL reviewers by providing standardized content that  will enable them to leverage work completed during the design  certification review process. However, the implementation of this and  other tools has been delayed. We recommended that NRC provide the  resources for implementing reviewer and management tools needed to  ensure that the most important tools will be available as soon as is  practicable, but no later than March 2008, which NRC has agreed to do.
NRO established a cross-divisional resource management board early in  2007 for resolving resource allocation issues if major review milestones  are at risk of not being met. However, it has not clearly defined the board’s  role, if any, in setting priorities or directing resource allocation. Because  NRO expects to review at least 20 COL applications and 6 design  certification, early site permit, and limited work authorization applications  associated with its new reactor program over the next 18 months, it may  not be able to efficiently manage thousands of activities simultaneously  that are associated with these reviews. NRC managers we spoke with  recognize this problem and plan to address it. We recommended that NRC  clarify the responsibilities of NRO’s Resource Management Board in  facilitating the coordination and communication of resource allocation  decisions, which NRC has agreed to do.
section_title: NRC Has Significantly Revised Its Overall Regulatory Framework and Review Process, but Several Activities Are Still in Progress
paragraphs: NRC has significantly revised most of its primary regulatory framework  and review process to prepare for licensing new reactors. Specifically,  NRC has revised and augmented its rules, guidance, and oversight criteria  for licensing and constructing new reactors primarily to provide for early  resolution of issues, standardization, and predictability in the licensing  process. In making these changes, NRC has regularly interacted with  nuclear industry stakeholders to determine which parts of an application’s  technical and operational content could be standardized and to clarify  guidance on certain technical matters. In addition, NRC just completed  modifications to its acceptance review process to include an evaluation of  the application’s technical sufficiency as well as its completeness and  made internal acceptance review guidance available last week. While NRC  has made progress in these areas, it has not yet completed some ancillary  rules and regulatory guidance, or actions to implement certain review  process components. For example, because NRC only recently solicited  public comments to further update its environmental guidance, applicants  may have more difficulty developing specific COL content for unresolved  issues. In addition, while NRC proposed a rule to update physical  protection requirements in September 2006, officials told us that it will not  be made final until 2008. Furthermore, NRC’s limited work authorization  rule, while substantially complete, will not be available in final form before  October 2007. Lastly, NRC is revising its policy for conducting hearings on  both the contested and uncontested portions of applications.
In addition, NRC is refining its processes to track its requests for  additional information to each applicant. In some instances, applicants  using the same reference reactor design may be asked the same question,  and one applicant may have already provided a satisfactory answer. With a  completed tracking process, the second reviewer could access the  previously submitted information to avoid duplication. We recommended  that NRC enhance the process for requesting additional information by (1)  providing more specific guidance to staff on the development and  resolution of requests for additional information within and across design  centers and (2) explaining forthcoming workflow and electronic process  revisions to COL applicants in a timely manner. NRC has agreed to do so.
In conclusion, the safe operation of the nation’s nuclear power facilities  has always been of fundamental importance and has received even more  emphasis recently as the nation faces an expected resurgence in the  licensing and construction of new nuclear reactors to help meet our  growing electricity needs. Our assessment of the ROP has found that NRC  has made considerable effort to continuously improve its oversight  activities and to prompt industry to make constant management  improvements. However, while the current oversight process appears  logical and well-structured, NRC recognizes the need to make further  improvements in such areas as the timeliness of its significant  determination process and the redefinition of some performance  indicators. Regulating the often complex and intangible aspects of safety  culture is clearly challenging. While NRC had taken some concrete actions  to incorporate safety culture into the ROP and now has a structured  process in place through its inspection program, we recommended that  NRC continue to act to improve its safety culture efforts. NRC plans to  evaluate the effectiveness of its current actions at the end of this year  before considering any further implementation of our recommendations.  We continue to believe that NRC needs to give this issue attention in  further revising the ROP so that it can better identify and address early  indications of declining safety performance at nuclear power facilities.
NRC has made important strides in revising its regulatory framework and  review process for licensing new nuclear reactors to improve timeliness  and provide more predictability and consistency during reviews.  Nevertheless, NRC’s workforce will face a daunting task in completing  certain regulatory actions currently under way and implementing this new  process as it faces a surge in applications over the next 18 months—the  first of which has just been submitted. We identified four actions that NRC  could take to better ensure its workforce is prepared to review new  reactor applications and that its review processes more efficiently and  effectively facilitate reviews, and NRC agreed to implement them.
Mr. Chairman, this completes my prepared statement. I would be happy to  respond to any questions you or the other Members of the Subcommittee  may have at this time.
section_title: Contact and Acknowledgments
paragraphs: For further information about this testimony, please contact Mark  Gaffigan, at (202) 512-3841 or by e-mail at gaffiganm@gao.gov. Richard  Cheston, Assistant Director; Sarah J. Lynch; Alyssa M. Hundrup; and David  Stikkers made key contributions to this testimony.
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