Nuclear Energy: NRC's Workforce and Processes for New Reactor Licensing Are Generally in Place, but Uncertainties Remain as Industry Begins to Submit Applications
Published: 2007-09-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Nearly three decades after the last order for a new nuclear power reactor in the United States, electric power companies plan to submit 20 applications in the next 18 months to the Nuclear Regulatory Commission (NRC) for licenses to build and operate new reactors. Since 1989, NRC has developed a new license review process that allows a 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. NRC expects its new process to enhance the efficiency and predictability of its reviews. GAO reviewed NRC's readiness to evaluate these applications by examining the steps NRC has taken to (1) prepare its workforce and manage its workload and (2) develop its regulatory framework and review process for new reactor activities. GAO reviewed NRC documents for new reactor workforce staffing and training, examined NRC's guidance for the review of license applications, interviewed NRC managers and representatives of nearly all of the COL applicants, and observed NRC's public meetings.
section_title: What GAO Found
paragraphs: NRC has taken many steps to prepare its workforce for new reactor licensing reviews, but several key elements of its preparations are still underway. As a result, uncertainties remain about NRC's ability to manage its workload associated with the surge of applications. Specifically, NRC has increased its funding for new reactor activities, created the Office of New Reactors and reorganized several other offices, and hired a significant number of entry-level and midlevel professionals. To assist its staff in reviewing the applications, NRC also plans to contract out about one-third of its fiscal year 2008 workload. However, several elements of NRC's preparatory activities are still in progress, including hiring for some critical positions; developing key training courses; and developing computer-based tools intended to enhance consistency and coordination in reviewing like sections of COL applications. In addition, NRC has not fully developed criteria for setting priorities if the workload exceeds available staff and contractor resources. Finally, while the Office of New Reactors established a cross-divisional resource management board early in 2007 for coordinating certain office review activities, it has not clearly defined the extent of the board's responsibilities. NRC has significantly revised its regulatory framework and review process to prepare for licensing new reactors, but until NRC completes certain additional actions, it may not fully realize the anticipated benefits of the new process. NRC has revised, augmented, and clarified most rules, guidance, and inspection oversight criteria to provide for early resolution of issues, standardization, and predictability in the license review process. However, NRC has not yet completed several actions to implement this process. For example, NRC only recently modified its acceptance review process to include an evaluation of the application's technical sufficiency in addition to its completeness. NRC plans to complete new acceptance review guidance and tools reflecting this change by the end of September 2007. NRC also is refining its process for tracking requests to each applicant for more information but has not developed a coordinating mechanism to avoid unnecessarily requesting information from multiple applicants.

section_title: Letter
paragraphs: Nearly three decades after the last order was placed for a new civilian  nuclear power reactor in the United States, electric power companies are  again showing interest in nuclear power.  This interest reflects the nation’s  growing demand for electricity, which will require the addition of  substantial new generating capacity.  It also has coincided with ever- increasing U.S. dependence on foreign oil, higher natural gas prices, and  uncertainty about future restrictions on the carbon dioxide emissions of  coal-fired power plants.  To reduce the nation’s dependence on crude oil,  the Energy Policy Act of 2005 authorizes the Department of Energy (DOE)  to diversify the U.S. energy portfolio by, among other things, providing  financial incentives to stimulate investment in new nuclear power reactor  projects, which can cost more than $4 billion.  The Nuclear Energy  Institute, which represents the nuclear power industry, estimates that the  industry has spent more than $2 billion during the past 3 years in  preparation for applying to the Nuclear Regulatory Commission (NRC) for  licenses to build and operate new reactors.
In 1989, NRC promulgated 10 CFR Part 52, which establishes a new  combined license (COL) for electric power companies to obtain a license  to build and operate a new reactor.  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.  The COL process provides a one-step approval process  that authorizes a licensee to construct and conditionally operate a nuclear  power plant; as such, it is intended to provide predictability and early  resolution of issues in the review process.  In addition, as shown in figure  1, NRC 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.  NRC also plans to issue new  regulations addressing the construction activities companies can conduct  with NRC authorization and oversight (through a limited work  authorization).
As of September 2007, electric power companies had informed NRC of  their intent to submit 20 COL applications between October 2007 and  about April 2009—5 by December 2007 alone.  As shown in figure 2, these  companies plan to use five reactor designs:  General Electric’s Advanced  Boiling Water Reactor (ABWR) and Economic Simplified Boiling Water  Reactor (ESBWR), Westinghouse’s Advanced Passive 1000 (AP1000),  AREVA’s Evolutionary Pressurized Water Reactor (U.S. EPR), and  Mitsubishi Heavy Industries’ Advanced Pressurized Water Reactor (U.S.  APWR).  NRC has certified two designs that the companies plan to use— ABWR in 1997 and AP1000 in 2006—and is currently reviewing the ESBWR  design.  The U.S. EPR and U.S. APWR designs have not yet been  submitted to NRC for review, although at least one reactor using each  design is under construction in another country.  Design applications may  total up to 15,000 pages, and reference to the certified design will  represent a large part of a COL application.
Under the COL process, NRC estimates that the first few applications will  require about 100,000 hours of staff review and identified around 2,500  associated NRC 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 June 2007, NRC approved several actions to improve the use  of its resources and further streamline and increase the predictability of its  review process.  These actions may decrease the overall duration of a  given review, depending on how they are implemented.
Since the enactment of the Energy Policy Act of 2005, NRC has  accelerated its efforts to build up its new reactor workforce and develop  the necessary processes for licensing new reactors.  NRC projects that its  total workforce size needs to grow from about 3,100 employees to about  4,000 employees by 2010.  NRC created the Office of New Reactors (NRO)  in October 2006 to lead the new reactor reviews and anticipates that it will  employ about 500 people and spend several million dollars a month for  contractor support to conduct these reviews in 2008.  In January 2007, we  reported that NRC had been generally effective in recruiting, developing,  and retaining a critically skilled workforce and had taken several actions  to enhance its overall workforce capacity; however, we identified several  challenges that will require a considerable level of flexibility, staff  commitment, and successful strategic human capital management for NRC  to be able to appropriately adapt to shifting human capital needs.   Accordingly, we recommended that NRC take actions to further address  its current and future needs for a critically skilled workforce, and NRC  agreed with our recommendations.
In this context, you asked us to review NRC’s readiness to evaluate  applications for new reactor licenses.  Specifically, we examined the steps  NRC has taken to (1) prepare its workforce to review new reactor license  applications and to manage its workload and (2) develop its regulatory  framework and key review processes for new reactor activities.
To address these questions, among other things, we reviewed NRC  documents for new reactor workforce staffing and training, examined  NRC’s regulations and guidance for its review of license applications,  observed internal NRC management meetings, and interviewed NRC  managers in NRO and the Offices of Nuclear Security and Incident  Response, Nuclear Regulatory Research, and General Counsel.  We also  obtained the perspectives of the Advisory Committee on Reactor  Safeguards, a statutory body of scientists and engineers, and the Atomic  Safety and Licensing Board Panel.  In addition, we held discussions with  nearly all of the announced COL applicants to obtain their views on the  efficiency and usefulness of the COL process and its implementation.   Finally, we observed several of NRC’s public meetings on the new reactor  licensing process.  We conducted our work from January 2007 through  September 2007 in accordance with generally accepted government  auditing standards.  A fuller discussion of our scope and methodology is  presented at the end of our report.
subsections: section_title: Background
paragraphs: The Energy Reorganization Act of 1974 established NRC as an  independent agency, headed by a five-member Commission, to regulate  the nation’s civilian use—commercial, industrial, academic, and medical— of nuclear energy and materials, including nuclear power reactors and  research and test reactors.  NRC’s mission is to ensure that civilian users  of nuclear materials adequately (1) protect public health and safety; (2)  promote the common defense and security, including securing special  nuclear materials against radiological sabotage and theft or diversion; and  (3) protect the environment.  NRC’s budget authority grew from $626  million for fiscal year 2004 to $824.9 million in fiscal year 2007, and NRC  requested $916.6 million for fiscal year 2008.  By law, NRC is required to  recover about 90 percent of its budget authority each fiscal year, less  certain specified amounts, through the fees it charges licensees and  applicants.  NRC staff grew from 3,110 as of September 2004 to 3,536  employees as of August 2007.
NRC’s design-centered review approach is central to its streamlined COL  review process because it allows multiple applicants to reference a  particular design by including common information in their applications.   Specifically, NRC reviews standardized application content for a reactor  design at one site—known as the reference COL.  Companies using the  same design can then refer to this reference COL content in their  applications to decrease NRC’s need to conduct the same level of review  twice on the same application content.  NRC expects that this design- centered review approach will provide the applicant with more certainty  about the application process and improve its efficiency in reviewing COL  applications without compromising safety.
The design-centered review approach intends to leverage work NRC  conducts through its design certification process.  During that process,  NRC examines any possible limits on operations and safety, resolves any  issues that arise, and uses a rule-making process to establish a  standardized reactor unit design that is not subject to major modifications  during the COL review process.  However, if a COL application does not  reference a design certification, the applicant will have to submit the  required design information in its COL application.  Furthermore, NRC  staff will review any design variations the applicant makes to the reference  COL.
For each application, NRC staff prepare the project’s Environmental  Impact Statement and review other site-specific factors affecting safety  and security because these factors are not standard.  Accordingly, 10 CFR  Part 52 requires that the COL application provide data and assessments of  these factors.  Alternatively, an applicant may opt to provide this  information by applying for an early site permit, which allows the  applicant to evaluate the suitability of a given site without going through  the full COL application process.  Once NRC issues an early site permit,  the applicant can reference the permit in its COL application without  resubmitting the site information.
section_title: NRC Has Implemented Many Actions to Prepare Its Workforce for New Reactor Licensing Reviews, but Several Key Elements Are Still Under Way
paragraphs: In preparing for COL application reviews in the time frame since our  January 2007 report, NRC has continued its hiring and training efforts and  made substantial progress in implementing reviewer and management  tools.  It also has developed a systematic project management approach— which includes models for planning and scheduling activities and  contractor support activities—so that it can apply sufficient resources to  several applications simultaneously.  However, NRC has not yet fully  developed criteria for allocating resources across COL applications, and it  has not applied separate decision-making criteria for allocating funding for  licensing activities and for support activities, such as developing  computer-based review tools.
subsections: section_title: NRC Has Taken Steps to Increase Staffing, Training, and Reviewer Tools to Support Its New Reactor Efforts, but Several Actions Are Not Complete
paragraphs: In response to the electric power industry’s growing commitment to  building new reactors following the enactment of the Energy Policy Act of  2005, NRC has significantly increased its hiring and funding for its new  reactor licensing program.  NRC’s overall budget requests for new reactor  licensing activities increased from nearly $50 million in fiscal year 2006 to  about $175 million for fiscal year 2008.  To understand what resources the  agency would need, NRC staff developed estimates for how many full-time  equivalent (FTE) positions would be needed to review various  applications: about 120 FTEs for a design certification, about 60 FTEs for a  reference COL, and about 30 FTEs for a subsequent COL.  NRC officials  noted that the reference COL staff-time estimate does not include any  efficiencies gained through applying the design-centered review approach.
To support its review of new reactor COL applications, NRC initially  reorganized the Office of Nuclear Reactor Regulation to create a division  solely responsible for new reactor licensing work and substantially  increased its size to more than 750 employees by hiring of entry- and  midlevel employees.  In August 2006, NRC created NRO to better prepare  for new reactor licensing while ensuring that the Office of Nuclear Reactor  Regulation maintained appropriate focus on the safety of the 104 currently  operating reactors, and began phasing staff into NRO, primarily from the  Office of Nuclear Reactor Regulation, in October 2006.  NRO is expected  to grow from 350 employees in August 2007 to about 500 staff during fiscal  year 2008.  In addition, NRC is increasing staff to five other offices with  new reactor responsibilities. FTEs for new reactor activities in these  offices will increase from 50 to about 90 FTEs in fiscal year 2008, as hiring  continues.  For example, for new reactor work, the Office of Nuclear  Security and Incident Response plans to have four times as many staff and  the Office of the General Counsel two times as many staff; the Atomic  Safety and Licensing Board Panel plans to hire at least two times as many  staff, as well as more panelists committed to new reactor work.  The  Advisory Committee on Reactor Safeguards and the Office of Nuclear  Regulatory Research FTE levels will also slightly increase.  Several of  these offices also reorganized to assume their new responsibilities.  Table  1 identifies the new reactor responsibilities of several NRC offices.
NRC has taken steps to expeditiously staff NRO in part because more than  half of the work for a 30-month COL review is conducted in the first year.   NRO reached its fiscal year 2007 staffing level by filling its midlevel and  higher positions, phasing in existing NRC employees, and hiring new  employees.  Regarding fiscal year 2007, NRO managers noted that (1)  budget constraints had limited hiring until NRC’s fiscal year 2007  appropriation was enacted in February 2007 and (2) demanding workloads  made it difficult for NRC staff to develop vacancy announcements and  select and interview candidates.  Some critical vacancies remain, and NRO  will need to grow by an additional 30 percent to reach its fiscal year 2008  target.  NRO managers expressed some concern about whether NRO will  have sufficient staff with expertise to fill such critical vacancies as project  management, structural engineering, and digital instrumentation and  control.  Several managers in NRO and other NRC offices also expressed  concern about NRC’s ability to retain staff in the intermediate and longer  term and provide sufficient physical space for them.
Regarding training, NRC has taken several steps to build on its existing  curriculum so staff can be prepared to review new reactor license  applications.  Specifically, for new reactor licensing training, in early 2007  NRO adapted some of the Office of Nuclear Reactor Regulation’s training  to contain technical and regulatory content for new reactors.  NRC also  offers basic regulatory and technical overview training across a range of  areas.  In 2008, NRC plans to launch several new courses that will include  both overview and detailed training on new reactor designs.  To the extent  possible, NRO and other offices are also using on-the-job training  opportunities to ensure employees have some exposure to the breadth and  depth of new reactor work, including shadowing and mentoring programs.
The in-depth and on-the-job training opportunities made available to staff  have been somewhat limited to date.  For example, the implementation of  some technical training courses was delayed because some reactor design  features need further clarification, and NRC’s budget was constrained  until February 2007, when its fiscal year 2007 appropriation was enacted.   It is unclear whether employees working on some new reactor activities  will be able to take these courses before their work group’s design  certification or COL applications arrive.  In addition, some NRC staff  conducting new reactor licensing work will not have related practical  experience because they have not participated in early site permit, design  certification, or preapplication activities.
NRC is in the process of putting new tools into place to support reviewers  as they conduct their work.  These tools are designed to enhance  productivity and ensure a more consistent and coordinated application  review process by providing easily accessible pointers to key reviewer  guidance and other information.  Some tools are also intended to provide a  means to document and share knowledge and lessons learned. (See  table 2.)
The development or completion of such computer-based tools as the RAI  system has been delayed until fiscal year 2008 because NRC management  gave higher priority to such activities as developing limited work  authorization guidance, publishing a proposed rule for assessing aircraft  impact characteristics not included in design basis, and completing  licensing work already in process.  As a result, staff reviews may not be as  timely and consistent until these computer-based tools are available, and  NRC may not benefit from intended productivity efficiencies.
section_title: NRC Is Implementing a Project Management Approach for Its New Reactor Licensing Program but Needs to Make Further Enhancements
paragraphs: As part of its workforce preparation, NRC is using a project management  approach to conduct and coordinate COL reviews so it can apply sufficient  resources to several applications simultaneously.  With this approach,  NRC intends to enhance its overall ability to ensure priorities are  appropriate, eliminate uneven workload, and allow managers to  appropriately assess progress.  As table 3 shows, the project management  approach includes four components intended to communicate the  processes, procedures, and tools to complete new reactor licensing  projects.  They include (1) a Licensing Program Plan manual, (2) general  and application-specific models and templates—whose estimates NRO  took several steps to refine in 2007, (3) a Microsoft Project tool, and (4) a  contracting support strategy.  In addition, from June through September  2007, NRO provided information to staff involved in new reactor activities  to familiarize them with this approach.
Because it plans to rely on contractors to perform about one-third of its  overall review work, NRC issued a request for proposals, developed a  contracting toolkit for staff that includes generic templates to facilitate  drafting of statements of work, and took steps to enter into or revise  interagency agreements with several DOE laboratories.  NRC plans to  obligate about $60 million to contractors in fiscal year 2008 to assist  reviewers on both the safety and environmental portions of the COL  applications.  In addition, in fiscal year 2007 NRO used contractors to  document its overall project management approach and conduct a  program assessment and gap analysis for identifying additional process  improvements, among other things.
While NRO managers, COL applicants, and reactor designers are generally  optimistic about the overall readiness of NRO’s staff to review COL  applications, NRC faces the following challenges:
Developing decision criteria for addressing competing priorities.
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—all of  which NRC expects to have in its review process over the next 18  months.  However, NRC has not yet ranked initial COL application  factors for making resource allocations and schedule decisions if  licensing work exceeds NRC’s new reactor budget.  These factors  include the quality and completeness of the application itself, the  extent to which the COL application references an early site permit or  design certification, evidence of the applicant’s financial commitment  to build a reactor in the near term, and other factors.  In commenting  on recommendations in our draft report, NRO officials said that NRC  will develop these criteria by the end of 2007.
Maximizing the use of the Microsoft Project tool.  In June 2007, NRO  began using the Microsoft Project tool to schedule certain internal  activities and work related to design certification and early site permit  applications already under review.  To effectively schedule tasks, the  Microsoft Project tool needs several layers of NRC staff to regularly  estimate and note their progress on each task.  Entering this  information into the system is a new practice that officials  acknowledged will require some adjustment.  Even with this tool, it  will be a complex undertaking for staff and managers to regularly  update and monitor entries, evaluate them for a range of user needs,  and review reports generated to assess progress.  While NRC has  dedicated scheduling and project management resources to coordinate  and direct activities, it is too soon to tell whether they are sufficient.   Accordingly, understanding workflow, evaluating reports, and  continually assessing resource utilization will take some time to  become established practice.  Most COL applicants generally  supported NRC’s use of the Microsoft Project tool and noted that it  could promote more accountability for adhering to established  schedules than has historically been the case.
Managing the increased reliance on contractors.  NRO plans to use  contracts to support at least one-third of the COL application review  process—for fiscal year 2008, NRO’s budget request is about the same  for contractor support as it is for staff salaries and benefits.  NRC’s  efforts to implement its contractor support strategy are still under way.   For example, NRO staff and managers initially defined particular work  they expected contractors to conduct in fiscal year 2008.  Specifically,  NRO plans to use more than 200 task orders for a broad range of skills  under at least 10 umbrella contracts or interagency agreements.   Contractors are to support about 50 percent of the site-specific and  environmental review work, as they did to review early site permit  applications.  As of early September 2007, NRO staff had completed  most initial statements of technical work to be included in each task  order, and NRC had awarded three of four commercial contracts and  entered into three of seven interagency agreements planned for fiscal  year 2008.  NRC plans to have the remaining contracts and agreements  in place by the beginning of October 2007.
Allocating funding for developing reviewer and management tools.
In fiscal year 2008, NRC will have hundreds of licensing activities  under way and other internal activities to support the review of COL  applications and certification of reactor designs.  Evaluating the  importance of completing activities that support the reviews—such as  ensuring the smooth operation of the Microsoft Project tool, revising  computer-based reviewer tools for enhancing productivity, delivering  contractor training, increasing information technology support, or  revising remaining guidance—may not be as important as completing  priority licensing priorities.  However, NRC has not developed criteria  to determine how it will allocate resources between licensing activities  and developing reviewer and management tools.
Clarifying the Resource Management Board’s role.  In May 2007,  NRO’s management team formed a board of deputy division directors  that meets weekly.  The board is responsible for developing decision- making processes if certain milestones are in danger of not being met,  and NRO therefore has to significantly shift resources.  While NRO  expects the board to recommend actions to mitigate the impact on  overall scheduling if such changes are required, it is unclear whether  the board will have any role in generally setting priorities and directing  resource allocation.  Without such clarification, NRO may miss  opportunities for more effectively managing multiple activities  associated with reviewing as many as 20 applications, certifying  designs, granting early site permits, and reviewing applications for  limited work authorizations.  NRC managers recognize this problem  and plan to address it.
According to NRO officials, some efforts are still under way and the  effectiveness of others cannot be determined until the application review  begins.  Consequently, NRO plans to periodically assess the project  management approach’s effectiveness.
section_title: NRC Has Significantly Revised Its Overall Regulatory Framework and Review Process, but Several Activities Are Still in Progress
paragraphs: In redesigning its regulatory framework to better resolve issues early and  promote standardization and predictability in the licensing process, NRC  reached out to stakeholders, particularly those who would be seeking  certification for designs or applying for licenses.  Industry stakeholders  generally consider NRC’s design-centered review approach and revised  framework to be an improvement over NRC’s prior process.  However,  NRC has not explained to applicants how it plans to implement its revised  processes for accepting (docketing) a COL application, requesting  additional information, or conducting hearings.  These uncertainties may  limit expected efficiencies and predictability regarding the total time a  COL applicant needs to obtain a license.
subsections: section_title: NRC Has Revised Most Key Regulations and Guidance with Considerable Involvement of Stakeholders
paragraphs: During the past 4 years, NRC has taken several steps to significantly revise  and augment its primary regulatory framework to prepare for licensing  and construction of new reactors.  This framework consists of NRC’s 10  CFR Part 52 rule; guidance to aid licensees in developing COL application  content, such as the Regulatory Guide 1.206; safety and environmental  standard review plans that guide reviewers in evaluating applications; and  criteria to guide inspectors examining operational programs and  construction activities.  The framework also includes ancillary rules and  guidance related to security, limited work authorization, and fitness for  duty.  (See table 4 and app. I for more information about the framework’s  major components and remaining work.)
In revising and augmenting this regulatory framework, NRC took steps to  convey key changes and solicit feedback through public meetings and  formal interactions with stakeholders to help resolve issues early.  NRC  also solicited information from potential applicants for planning purposes.   In addition, NRC frequently reached out to applicants and reactor  designers during 2006 and 2007 regarding new reactor licensing by  supporting the formation and activities of design-centered  working groups for COL applicants and design certification  applicants to help standardize COL application content and format  and clarify NRC’s expectations for the level of detail in COL  applications; and holding several public meetings related to specific technical  areas—such as digital instrumentation and control, probabilistic  risk assessment, and seismic analyses—and operational program  areas, including quality assurance, reactor component  manufacturer inspections, training, and emergency planning.
NRC accelerated some schedules to have key components of the  regulatory framework in place before applications are submitted.  Both  applicants and NRC acknowledge that the accelerated, overlapping time  frames for power companies to prepare their COL applications while NRC  revises its regulatory framework have neither been ideal nor fully  avoidable.  Specifically, NRC did not promulgate its Part 52 rule until  August 28, 2007, 4 months after originally planned.  NRC is still in the  process of completing some rules and guidance related to both licensing  and construction activities.  Applicants expressed some concern that  NRC’s review of applications, in some areas, could change as long as these  components remain incomplete.  For example, in September 2006, NRC  proposed a rule to update physical protection requirements, which  officials told us is not due out in final form until 2008.  In addition, its  limited work authorization rule, while substantially complete, will not be   available in final form before October 2007, and NRC is in the process of  developing associated guidance.  NRC has not yet told applicants how it  will apply resources to limited work authorization applications or how this  will affect individual COL application review schedules.  Also, 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.  Furthermore, NRC is  continuing to develop several components of the Inspections, Tests,  Analyses, and Acceptance Criteria (ITAAC) process, such as the final  closeout review for ensuring all criteria are met.  Finally, NRC has just  begun its multiyear process of staffing its Construction Inspection  Program; efforts to date have primarily included conducting a range of  quality assurance inspections activities.
section_title: While NRC Has Taken Steps to Advance the Design-centered Review Approach, Some Aspects of the Implementation Process Are Not Yet Complete
paragraphs: NRC and applicants have taken steps to advance how the design-centered  review approach will be implemented during 2008 and 2009 to facilitate  NRC’s review of applications for at least 20 COLs, 3 design certifications, 1  design certification amendment, and 1 early site permit, as well as 1 or  more limited work authorizations.  Figure 3 presents a simplified diagram  of the COL application review process, including estimated time frames  associated with each aspect of the review; major preapplication activities  and postlicensing activities associated with the completion and  verification of ITAAC after the Commission grants the COL; and  information about the construction time period should an applicant  choose to build a plant.
NRC officials expect to develop schedule estimates for each application  after it is received, conduct an estimated 60-day initial review of technical  sufficiency and completeness as a basis for docketing an application; and  if the application is found acceptable, develop an estimated schedule for  completing the review.  The COL review process includes three primary  areas of review: the safety/technical review, which results in a Safety  Evaluation Report; the environmental review, which results in an  Environmental Impact Statement; and the adjudicatory review, which  results in hearing findings/orders.
Throughout the safety and environmental reviews, NRC typically develops  several hundred requests for additional information that range in length  and complexity to ascertain the sufficiency of the information the  applicant has provided so that NRC can develop its findings.  NRC officials  estimated that the safety review will take 30 months, the environmental  review 24 months.  Prehearing activities take place concurrently with the  staff’s reviews, while the hearing on any contested issues and on the  uncontested portion of the application takes about 12 months once NRC  staff have completed their safety and environmental review documents.
COL applicants and reactor designers told us they support NRC’s design- centered review approach.  They expect that standard applications will  enable NRC staff, to the maximum extent practical, to use a “one issue,  one review, one position” strategy.  They said this approach is feasible if  applicants and NRC staff implement it as intended, in accordance with  guidance set out in NRC’s Regulatory Guide 1.206 and Standard Review  Plan.  Most applicants and managers stated that they plan to be thorough,  timely, and disciplined in implementing the process for reviewing COL  applications.  However, they also expected that some processes and  procedures will be clarified during the implementation process.   Furthermore, several COL and design applicants jointly developed detailed  matrixes to identify all reference COL application parts that are identical  to the design and all subsequent COL application parts that are identical to  the reference COL.  These parts are incorporated by reference, other parts  are clearly identified as including some similar content, and the remaining  parts are clearly identified as site specific.  Also, the Nuclear Energy  Institute and applicants developed standard templates for certain parts of  the application content—for example, some operational programs—and  NRC agreed to their use.
While NRC has substantially defined its COL review process, it is not yet  clear how the agency will implement a few key components.  For example,  NRC is revising the acceptance review process and the conduct of  hearings in response to an internal task force’s recommendations.   Consequently, uncertainties remain about how these processes will be  implemented, which may make it more difficult for applicants to know  what information they must provide and how NRC will review their  applications:     Clarifying recent acceptance review process changes.  In June 2007, 3  months before it expected to receive the first COL applications, NRC  announced it would expand its acceptance review process to include not  only an evaluation of the application’s completeness but also its technical  sufficiency.  NRC also increased the allotted amount of time for this  review from 30 to 60 days.  The intent of the new process is to enable NRC  to identify areas of potential concern early in the process and discuss them  with the applicant.  NRC expects that applicants will submit high-quality,  complete applications for docketing.  By the end of September 2007, NRC  plans to publicly release associated internal guidance that its staff will use  for deciding whether to accept, delay, or reject docketing.
Better managing the request for additional information process.  Such  requests to assess technical sufficiency during the review process have  been a central component of prior safety and environmental reviews, yet a  few steps remain to better ensure efficiency.  NRC is still developing its  process for tracking requests for additional information from applicants.   However, NRC cannot yet coordinate these requests to multiple applicants  who are using the same reactor design, which may lead to unnecessary  duplication of effort.  For example, 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.  If NRC’s  tracking system were in place, the second reviewer could have access to  the previously submitted information, thereby avoiding another request for  information and improving the efficiency of the review.  Several COL  applicants also expressed concern that duplicative or unnecessarily  detailed requests for information may result because many of the reviews  will be conducted simultaneously by multiple reviewers.  Until the revised  process is available to staff and communicated to stakeholders, it is  unclear whether NRC will gain intended efficiencies in applying the  design-centered review approach to its request for information process.
Addressing ITAAC process implementation concerns early.  Some NRC  staff and COL applicants said they would benefit from further discussion  about how NRC will (1) oversee the applicant’s implementation of ITAAC  for the construction and operation of the new nuclear reactor units and (2)  determine that an ITAAC is complete.  In addition, applicants will need to  inform NRC about certain procurement and construction activities, such  as the acquisition of major parts.
Completing revisions to the hearing process.  NRC is revising its policy  for conducting hearings on both the contested and uncontested portions  of applications.
In June 2007, NRC issued a proposed policy statement that would allow  the Atomic Safety and Licensing Board Panel to consolidate hearings  on contentions related to the standardized portions of multiple  applications.
The process for hearings for the uncontested portion of the COL  proceeding may change.  The Commission plans to seek legislative  authority from the Congress to eliminate the statutory requirement to  conduct a hearing even if no one has requested it in order to conserve  resources.  If a hearing must be held, however, the Commission has  taken steps to assume responsibility for conducting the uncontested  portion of hearings.  Currently, the Atomic Safety and Licensing Board  Panel is responsible for conducting all of NRC’s hearings, not just those  associated with new reactor applications.  NRC assumes that it would  save considerable staff and Panel resources if the Commission takes  the responsibility for this portion of the hearings because it could  conduct a different style of hearing.
Beyond the changing processes and unresolved technical issues that  remain—such as evaluating applicants’ use of digital instrumentation and  controls, NRC faces some general constraints because of the short or  overlapping time frames between the preparation of its regulatory  framework and process and the submission of applications starting in  October 2007.  For instance, for the environmental component of NRC’s  review, NRC would prefer to have about 22 months of preapplication  discussions with the applicants to allow staff to plan its work more  effectively and identify potential areas of concern.  However, these  discussions are at the applicant’s discretion; none of the fiscal year 2008  applications will begin with this lead time, and some may have had as little  as 2 months.  Also, while NRC has scheduled considerable resources to  conduct design certification reviews concurrently with its COL reviews,  applicants have announced plans to use two new reactor designs that have  not been submitted to NRC for certification, a reactor designer is  amending its previously certified design, and another designer may also  revise its design.  These additional changes likely will tax NRC’s resources  and stafftime.
section_title: Conclusions
paragraphs: NRC has made major strides in developing its new licensing process for  nuclear reactors to improve timeliness and provide more predictability  and consistency during reviews.  Nevertheless, NRC will face a daunting  task in implementing this new process while at the same time facing a  surge in applications over the next 18 months.
We recognize that NRC cannot prepare for all contingencies in its review  of license applications under this new process, but we also find that NRC  could be better positioned to manage the process if it further refined the  criteria and processes it has already put into place.  First, while NRC has  identified factors for staff to consider in developing the fiscal year 2008  budget proposal for new reactor activities, it has not made plans to use  these factors in making resource allocations and schedule decisions.  As a  result, NRC may find it difficult to set priorities as it begins to review  applications early next year.  Second, NRC has not implemented some  reviewer and management support tools that are intended to facilitate  efficiency and productivity, and may not devote sufficient resources to  their completion in the future.  Third, NRO established the Resource  Management Board to recommend actions when the office is at risk of  missing major milestones.  However, NRO has not specified the extent to  which the board is responsible for generally setting priorities or allocating  resources, which is likely to be much more challenging once applications  are submitted.  NRC managers plan to clarify the board’s responsibilities.   Finally, the design-centered approach is premised, in part, on streamlining  the review process through standardization.  However, NRC has not  worked out a process for coordinating multiple, similar requests for  additional information, which could facilitate greater efficiencies.
section_title: Recommendations for Executive Action
paragraphs: To better ensure that its workforce is prepared to review new reactor  applications and its review processes more efficiently and effectively  facilitate reviews, we recommend that NRC take the following four  actions:
Fully develop and implement criteria for setting priorities to allocate  resources across applications by January 2008.
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.
Clarify the responsibilities of NRO’s Resource Management Board in  facilitating the coordination and communication of resource allocation  decisions.
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.
section_title: Agency Comments
paragraphs: We provided NRC with a draft of this report for its review and comment.   In written comments, NRC agreed with our recommendations.  (See app.  II.)  In addition, NRC provided comments to improve the report’s technical  accuracy, which we have incorporated as appropriate.
section_title: Scope and Methodology
paragraphs: To examine the steps NRC has taken to prepare its workforce to review  new reactor license applications and manage its workload, we obtained  information about its workforce preparation by reviewing NRC  documents, conducting semi-structured interviews with several managers  directly responsible for the planning and implementation of new reactor  licensing activities, and observing internal NRC meetings.  More  specifically, we reviewed strategy and commission papers, licensing  program planning documents and briefings, and a range of documents  regarding reorganization, staffing, training, hiring, contracting, and project  scheduling.  We supplemented this information through interviews with  NRC managers in NRO; the offices of Nuclear Security and Incident  Response, Nuclear Regulatory Research, General Counsel, and Human  Resources; the Advisory Committee on Reactor Safeguards; and the  Atomic Safety and Licensing Board Panel.  We also observed several NRO- specific internal management meetings and employee training sessions,  and NRO staff demonstrated their Microsoft Project tool and associated  scheduling models and templates.  We updated NRC workforce data  presented in our January 2007 report entitled Human Capital:  Retirements and Anticipated New Reactor Applications Will Challenge  NRC’s Workforce.  We also obtained budget data from NRC’s Office of the  Chief Financial Officer and determined that these data were sufficiently  reliable for the purposes of this report.
To examine the steps NRC has taken to develop its regulatory framework  and key processes, we reviewed various NRC reports, meeting transcripts  and minutes, and strategy and commission papers and supplemented this  information with interviews with cognizant NRC managers.  We conducted  semi-structured interviews with representatives from 2 nuclear power  consortia and 16 of the 17 electric power companies that have announced  plans to file a COL application, as well as 2 reactor design companies.  We  also interviewed officials of the Nuclear Energy Institute; the Union of  Concerned Scientists; the Institute of Nuclear Power Operations; Winston  and Strawn, LLP; and the Georgia Public Service Commission.  In addition,  we observed several of NRC’s design-centered working group and public  meetings focused on new reactor licensing activities, and attended  conferences held on new reactor licensing.
As agreed with your offices, unless you publicly announce the contents of  this report, we plan no further distribution until 30 days from the report  date.  At that time, we will send copies to appropriate congressional  committees, the Chairman of NRC, the Director of the Office of  Management and Budget, and other interested parties.  We will also make  copies available to others upon request.  In addition, the report will be  available at no charge on the GAO Web site at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-3841 or gaffiganm@gao.gov.  Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report.  GAO staff who made major contributions to this  report are listed in appendix III.
section_title: Appendix I: Major Components of NRC’s New Reactor Licensing Framework
subsections: section_title: 10 CFR Part 52 rule making: Governs the issuance of standard design certifications, early site permits, and combined licenses (COL) for nuclear power plants. The final rule amends or makes conforming changes to 10 CFR Parts 1, 2, 10, 19, 20, 21, 25, 26, 50, 51, 52, 54, 55, 72, 73, 75, 95, 140, 170, and 171.
paragraphs: In April 1989, NRC promulgated 10 CFR Part 52 to reform its  licensing process for new nuclear power plants.
In December 1998, NRC issued SECY-98-282, “Part 52  Rulemaking Plan,” to update 10 CFR Part 52 based on its  experience in using the standard design certification process.
In March 2006, NRC published a revised proposed rule to update  Part 52 for public comment.
In October 2006, NRC staff forwarded draft final rule to the  Commission for consideration.
In April 2007, the Commission made the rule final, pending certain  revisions.
On May 22, 2007, NRC posted the draft final rule on its Web site  while the Office of Management and Budget completed its review.
On August 28, 2007, the final rule was published in the Federal  Register.
Development of Regulatory Guide 1.206, “Combined  License Applications for Nuclear Power Plants”:  Describes  and makes available to the public (1) data that NRC staff need  in reviewing applications for permits and licenses, (2) methods  that NRC staff consider acceptable for use in implementing  specific parts of the agency’s regulations, and (3) techniques  that NRC staff use in evaluating specific problems or  postulated accidents.
In September 2006, NRC staff posted Draft Guide 1145, the  precursor to Regulatory Guide 1.206, on its Web site for public  comment.
In April 2007, NRC posted completed sections of Regulatory  Guide 1.206 for preliminary use.
In June 2007, NRC issued final guide in total.
Update of high-priority regulatory guides:  Provides  guidance to applicants on implementing specific parts of the  regulations, techniques used by the NRC staff in evaluating  specific problems or postulated accidents, and data the staff  will need to review permit or license applications.
In July 2006, NRC staff identified about 30 high-priority regulatory  guides to update by March 2007.
Public comment period for the high-priority regulatory guides  ended in December 2006.
In March 2007, NRC staff completed publishing these guides for  new reactor licensing activities.
Update of Safety Standard Review Plan (SRP), “Standard  Review Plan for the Review of Safety Analysis Reports for  Nuclear Power Plants,” NUREG 0800:  Provides guidance to  NRC staff for evaluating whether an applicant or licensee  complies with 10 CFR Parts 50 and 52.  SRP’s principal  purpose is to ensure the quality and uniformity of staff safety  reviews.
In August 2004, NRC staff began issuing updates to SRP  sections.  The staff also made public its reprioritized schedule for  updating SRP sections starting in April 2005 to support new  reactor licensing.
In January 2006, NRC accelerated the issuance schedule to  March 2007.
In March 2007, NRC issued all SRP chapters, except chapter 19  on probabilistic risk assessment.
In June 2007, NRC issued the probabilistic risk assessment  chapter.
Update of Environmental Standard Review Plan (ESRP),  “Standard Review Plans for Environmental Reviews for  Nuclear Power Plants,” NUREG 1555:  Provides guidance to  NRC staff for conducting environmental reviews of nuclear  power plant license applications.
NRC last updated ESRP in 1999.
In 2006, NRC staff prioritized ESRP sections and began to update  them.
Draft Revision 1 revises one or more sections of nearly all  chapters.
In August 2007, NRC convened a public meeting to obtain  comments on draft revisions and is accepting comments through  mid-September 2007.
Limited Work Authorization rule making: Revises (1) the  scope of activities for which a construction permit, COL, or  limited work authorization is necessary; (2) the scope of  construction activities that may be performed under a limited  work authorization; and (3) the review and approval process for  limited work authorization requests.
In March 2006, NRC published a proposed rule that would  substantially amend Part 52, but not Part 50.
In response to public comments, NRC prepared a supplemental  proposed rule intended to reduce the time between an applicant’s  decision to proceed with a COL application and the start of  commercial operation.
In October 2006, NRC published the supplemental proposed rule.
In February 2007, NRC staff submitted a draft final rule to the  Commission for review.
In April 2007, the Commission approved the rule and issued  additional requirements for NRC staff to complete.
The rule was submitted to the Office of Management and Budget  for clearance review on August 30, 2007.
Construction Inspection Program (CIP):  Has several  components and is designed for NRC to develop a level of  confidence in the licensee's programmatic controls. CIP will  involve a combination of differently directed inspections, all of  which are aimed at validating the acceptability of the  construction programs, processes, and products.  The  components include four inspection manual chapters (IMC),  periodic assessment, and vendor oversight activities.
In 2001, NRC renewed prior efforts to update the CIP by  incorporating lessons learned into the revised framework.  The  team includes regional and headquarters licensing and inspection  staff.
In April 2003, NRC issued IMC-2501, "Early Site Permit."  In June 2005, NRC issued IMC-2502, "Pre-Combined License  (Pre-COL) Phase,” on quality assurance, engineering, and  environmental protection.
In April 2006, NRC issued IMC-2503, "Inspections, Tests,  Analyses, and Acceptance Criteria (ITAAC)," for inspecting  construction activities and supporting completion of the ITAAC.
In April 2006, NRC issued IMC-2504, "Non-ITAAC Inspections,"  for inspecting programmatic areas.
In June 2007, NRC published information about how it plans to  enhance its Vendor Inspection Program, including developing  program guidance and increasing audit and inspection activities.
Inspections, Tests, Analyses, and Acceptance Criteria:   Specifies that a COL application must identify the inspections,  tests, and analyses (including those that apply to emergency  planning) that the licensee will perform to provide NRC with  data to determine whether the applicant has met NRC’s  acceptance criteria and the reactor has been constructed and  will operate in conformance with the COL, NRC regulations,  and the Atomic Energy Act.
In 2001, to update the inspection program, NRC formed the  Construction Inspection Team, which includes staff from each  region, new reactor licensing, and inspection program  management.
In October 2005, NRC staff issued “Review of Operational  Programs in a Combined License Application and Generic  Emergency Planning Inspections, Tests, Analyses, and  Acceptance Criteria.”  The Commission then provided policy  direction on license conditions for operational programs in a COL  application and the use of emergency planning/emergency  preparedness ITAAC.
In April 2006, NRC issued IMC-2503, "Inspections, Tests,  Analyses, and Acceptance Criteria," and IMC-2504, “Non-ITAAC  Inspections,” which describe the programs for inspecting  construction activities.
In January 2007, NRC solicited stakeholder input from public  meetings.
In March 2007, NRC staff presented to the Commission its plan for  selecting ITAAC for inspection and closing these ITAAC.
In May 2007, the Commission approved the staff’s approach for  verifying the closure of licensees’ ITAAC through a sample-based  inspection program.
In July 2007, the Advisory Committee on Reactor Safeguards  concurred with the approach and proposed threshold values.
NRC continues to develop inspection procedures; work processes  and procedures to support the closure of ITAAC and the  implementation of the enforcement process; and a methodology  for assessing licensee performance. NRC plans to prioritize  activities to ensure that products will be ready to support inspector  training and inspections.
10 CFR Part 73 rule making on physical protection:   Governs requirements for physical protection of nuclear power  plants.  The rule is intended to codify orders issued in response  to September 11, 2001, and fulfill certain provisions in the  Energy Policy Act of 2005 by (1) enhancing requirements for  access controls, event reporting, security personnel training,  safety and security activity coordination, contingency planning  and radiological sabotage protection and (2) adding  requirements related to background checks for firearms users  and authorization for enhanced weapons.
In October 2006, NRC published a proposed rule to codify several  physical protection orders into sections 73.55 and 73.56.  The  public comment period closed in March 2007.
Since July 2007, NRC has held public meetings on draft guidance  related to this rule making, and has provided specific sections of  the draft guidance to further inform stakeholders and the public.
NRC expects to post the draft final rule for 10 CFR Part 73 on its  Web site in 2008.
Aircraft Impact Assessment rule making: Requires reactor  unit designers to perform a rigorous assessment of design  features that could provide additional inherent protection to  avoid or mitigate the effects of an aircraft impact while reducing  or eliminating the need for operator actions, where practicable.
In April 2007, the Commission directed NRC staff to include  aircraft impact assessment requirements in 10 CFR Part 52.
Since April 2007, NRC has discussed plans for assessing aircraft  impact characteristics not included in design basis with reactor  and plant designers who have submitted applications.
NRC plans to publish a proposed rule for public comment in  September 2007 or later.
10 CFR Part 26 rule making on fitness for duty:  Governs  drug and alcohol testing programs and establishes  requirements for managing worker fatigue at operating nuclear  power plants.
In April 2005, NRC staff presented its proposal to amend the  fitness for duty rule.
In August 2005, NRC published the proposed rule in the Federal  Register.  The public comment period ended in December 2005.
In March 2006, NRC held a public meeting on the public  comments to the proposed rule.
In October 2006, NRC posted the draft final rule on its Web site.
In April 2007, the Commission approved the final rule and directed  staff to continue to engage stakeholders in complete associated  regulatory guidance.
In July 2007, NRC modified the approved rule.  NRC expects to  issue a final rule in early 2008.
section_title: Appendix II: Comments from the Nuclear Regulatory Commission
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Richard Cheston, Assistant  Director; Amanda Leissoo; Sarah J. Lynch; Amanda Miller; Omari Norman;  Carol Herrnstadt Shulman; Julie E. Silvers; and Elizabeth Wood made key  contributions to this report.