Nuclear Regulatory Commission: Preliminary Observations on Its Process to Oversee the Safe Operation of Nuclear Power Plants
Published: 2006-06-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Nuclear Regulatory Commission (NRC) has the responsibility to provide oversight to ensure that the nation's 103 commercial nuclear power plants are operated safely. While the safety of these plants has always been important, since radioactive release could harm the public and the environment, NRC's oversight has become even more critical as the Congress and the nation consider the potential resurgence of nuclear power in helping to meet the nation's growing energy needs. Prior to 2000, NRC was criticized for having a safety oversight process that was not always focused on the most important safety issues and in some cases, was overly subjective. To address these and other concerns, NRC implemented a new oversight process--the Reactor Oversight Process (ROP). NRC continues to modify the ROP to incorporate feedback from stakeholders and in response to other external events. This testimony summarizes information on (1) how NRC oversees nuclear power plants, (2) the results of the ROP over the past several years, and (3) the aspects of the ROP that need improvement and the status of NRC's efforts to improve them. This testimony discusses preliminary results of GAO's work. GAO will report in full at a later date. GAO analyzed program-wide information, inspection results covering 5 years of ROP operations, and detailed findings from a sample of 11 plants.
section_title: What GAO Found
paragraphs: NRC uses various tools to oversee the safe operation of nuclear power plants, including physical plant inspections and quantitative measures or indicators of plant performance. To apply these tools, NRC uses a riskinformed and graded approach--that is, one considering safety significance in deciding on the equipment and operating procedures to be inspected and employing increasing levels of regulatory attention to plants based on the severity of identified performance problems. The tools include three types of inspections--baseline, supplemental, and special. All plants receive baseline inspections of plant operations almost continuously by NRC inspectors. When NRC becomes aware of a performance problem at a plant, it conducts supplemental inspections, which expand the scope of baseline inspections. NRC conducts special inspections to investigate specific safety incidents or events that are of particular interest to NRC because of their potential significance to safety. The plants also self-report on their safety performance using performance indicators for plant operations related to safety, such as the number of unplanned reactor shutdowns. Since 2001, NRC's ROP has resulted in more than 4,000 inspection findings concerning nuclear power plant licensees' failure to comply with regulations or other safe operating procedures. About 97 percent of these findings were for actions or failures NRC considered important to correct but of low significance to overall safe operation of the plants. In contrast, 12 of the inspection findings, or less than 1 percent, were of the highest levels of significance to safety. On the basis of its findings and the performance indicators, NRC has subjected more than three-quarters of the 103 operating plants to oversight beyond the baseline inspections for varying amounts of time. NRC has improved several key areas of the ROP, largely in response to independent reviews and feedback from stakeholders. These improvements include better focusing its inspections on those areas most important to safety, reducing the time needed to determine the risk significance of inspection findings, and modifying the way that some performance indicators are measured. NRC also recently undertook a major initiative to improve its ability to address plants' safety culture--that is, the organizational characteristics that ensure that issues affecting nuclear plant safety receive the attention their significance warrants. GAO and others have found this to be a significant shortcoming in the ROP. Although some industry officials have expressed concern that its changes could introduce undue subjectivity to NRC's oversight, given the difficulty in measuring these often intangible and complex concepts, other stakeholders believe its approach will provide NRC better tools to address safety culture issues at plants. NRC officials acknowledge that its effort is only a step in an incremental approach and that continual monitoring, improvements, and oversight will be needed to fully detect deteriorating safety conditions before an event occurs.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our ongoing review of how the  Nuclear Regulatory Commission (NRC) oversees the safe operation of the  nation’s 103 operating commercial nuclear power plants, which provide  about 20 percent of U.S. electricity. The safety of these plants, which are  located at 65 sites in 31 states, has always been important, as an accident  could result in the release of radioactive material and potentially harm  public health and the environment. NRC is responsible for issuing  regulations, licensing and overseeing plants, and requiring necessary  actions to protect public health and safety, while plant operators are  responsible for safely operating their plants in accordance with their  licenses. NRC’s oversight has become even more critical as the Congress  and the nation consider the potential resurgence of nuclear power in  helping to meet the nation’s growing energy needs. No new orders for a  plant have been placed since the 1979 accident at the Three Mile Island  plant, but in the face of concerns about aging plants, energy security,  global warming, and the ever increasing need for energy to fuel the  nation’s economy, nuclear power is resurfacing as a principal option. An  accident could threaten public confidence in nuclear power just as it  begins to emerge from the shadows of the Three Mile Island accident. It is  critical that NRC be able to ensure that nuclear power plants are operated  safely and that public confidence about their safety is high.
Prior to 2000, NRC was criticized for having a safety oversight process that  was not always focused on the most important safety issues and in some  cases, regulatory activities were redundant, inefficient, and overly  subjective. While its new process—which NRC refers to as the Reactor  Oversight Process (ROP)—is similar to its prior process in that the  oversight activities largely consist of physical plant inspections, the  inspections now focus on more important safety issues and the goal is to  make assessments of plants’ safety performance 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 plant 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 the 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.
We are preparing a report to you and other Members of the Congress later  this year on (1) how NRC oversees nuclear power plants to ensure that  they are operated safely, (2) the results of the ROP over the past several  years in terms of the number and types of inspection findings, and (3) the  aspects of the ROP that need improvement and the status of NRC’s efforts  to improve them. To examine how NRC oversees plants, we reviewed  NRC’s regulations, inspection manuals, and other guidance documents;  interviewed NRC headquarters and regional officials and regional and on- site inspectors; visited the Salem and Hope Creek nuclear power plants;  and attended several public meetings covering various nuclear power  plant oversight topics. To examine the results of the ROP over the past  several years, we analyzed NRC data on nuclear plant safety for 2001  through 2005, the years since implementation of the ROP for which data  were available for the full year, and discussed our analysis with NRC  officials. We assessed the reliability of this data and determined that the  data were sufficiently reliable for the purposes of our report. To examine  areas of the ROP that need improvement and the status of NRC’s efforts to  improve them, we reviewed NRC documents, including annual self- assessment reports; interviewed officials from NRC and outside  stakeholder groups; and attended several key public meetings covering  proposed changes to oversight procedures. We also reviewed various  external evaluations of the ROP, including our prior reports and those of  the NRC Inspector General. Additionally, we selected a nonprobability  sample of 6 nuclear power sites (totaling 11 plants) that provided coverage  of each of NRC’s four regional offices and varying levels of plant  performance and NRC oversight since 2000. We reviewed relevant  inspection reports and assessment documents and interviewed NRC and  industry officials at each site to examine how NRC applies the ROP to  identify and correct safety problems. We are conducting this work in  accordance with generally accepted government auditing standards. We  performed the work reflected in this testimony from July 2005 to June  2006.
To date, our work indicates the following:    NRC uses various tools to oversee the safe operation of nuclear power  plants, including physical plant inspections of equipment and records and  quantitative measures or indicators of plant performance such as the  number of unplanned shutdowns. NRC uses a graded and risk-informed  approach—that is, one considering safety significance in deciding on the  equipment or operating procedures to be inspected and employing  increasing levels of regulatory attention to plants based on the severity of  identified performance problems—to apply these tools. All plants receive  baseline inspections, which are inspections of plant operations that are  conducted almost continuously by NRC inspectors usually located at each  nuclear power plant site. When NRC becomes aware of a performance  problem at a plant, it conducts supplemental inspections, which expand  the scope of baseline inspections. NRC conducts special inspections to  investigate specific safety incidents or events that are of particular interest  to NRC because of their potential significance to safety. The plants also  self-report on their safety performance using performance measures or  indicators in quarterly reports submitted to NRC. Plants’ quarterly reports  of performance indicators are verified by NRC’s on-site inspectors. NRC  analyzes each of its inspection findings to determine the finding’s  significance in terms of safety, and applies increasing levels of oversight  based on the number and level of risk of the findings identified.
Since 2001, NRC’s ROP has resulted in more than 4,000 inspection findings  concerning nuclear power plant licensees’ failure to comply with  regulations or other safe operating procedures. About 97 percent of these  findings were for actions or failures NRC considered important to correct  but of very low significance to overall safe operation of the plants. For  example, a finding of very low risk significance was issued at one plant  after a worker failed to wear the proper radiation detector and at another  plant because the operator failed to properly evaluate and approve the  storage of flammable materials in the vicinity of safety-related equipment.  In contrast, 12 of the inspection findings, or less than 1 percent, were of  the highest levels of significance to safety. For example, NRC issued a  finding of the highest risk significance at one plant after a steam generator  tube failed, causing an increased risk of the release of radioactive material.  Similarly, there were 156 instances, or less than 1 percent, in which data  reported for individual performance indicators were outside NRC’s  acceptable category of performance. On the basis of its findings and the  performance indicators, NRC has subjected more than three-quarters of  the 103 operating plants to oversight beyond the baseline inspections for  varying amounts of time. Over the past 5 years, 5 plants have been subject  to the highest level of NRC oversight that still allows continued  operations. According to NRC officials, the results of its oversight process  at an industry or summary level serve as an indicator of overall industry  performance, which to date indicates good safety performance.
NRC has improved several key areas of the ROP, largely in response to  independent reviews and feedback from stakeholders, including its  regional and on-site inspectors, usually obtained during NRC’s annual self- assessment of the oversight process. These improvements include better  focusing its inspections on those areas most important to safety, reducing  the time needed to determine the risk significance of inspection findings,  and modifying the way that some performance indicators are measured.  For the most part, NRC considers these efforts to be refinements rather  than significant changes. One significant shortcoming in the ROP that we  and others have found is that it is not as effective as it could be in  identifying and addressing early indications of deteriorating safety at  nuclear power plants before problems develop. In response to this  concern, NRC recently undertook a major initiative to improve its ability  to address plants’ safety culture—that is, the organizational characteristics  that ensure that issues affecting nuclear plant safety receive the attention  their significance warrants. NRC and others have long recognized that  safety culture attributes, such as attention to detail, adherence to  procedures, and effective corrective and preventative action, have a  significant impact on a plant’s safety performance. NRC is taking action to  improve how it incorporates safety culture into the ROP by redefining and  increasing its focus on more qualitative and cross-cutting issues or aspects  of plant performance—including a safety conscious work environment,  human performance, and problem identification and resolution—and  developing new requirements to more directly assess safety culture at  poorer performing plants. Some of its actions have been controversial.  Although some industry officials have expressed concern that these  changes could introduce undue subjectivity to NRC’s oversight, given the  difficulty in measuring these often intangible and complex concepts, other  stakeholders believe this approach will provide NRC better tools to  address safety culture issues at plants. NRC officials acknowledge that this  effort is only a step in an incremental approach and that continual  monitoring, improvements, and oversight will be needed to fully detect  deteriorating safety conditions before an event occurs.
NRC is devoting considerable effort to overseeing the safe operation of the  nation’s commercial nuclear power plants, and its process for doing so  appears logical and well-structured. This does not mean that NRC’s  oversight is perfect. However, NRC is also demonstrating that it is aware  of this fact and is willing to make changes to improve. Its efforts to  continuously obtain feedback and consider the need for improvement to  the ROP are important as nuclear power plants age and the nation  considers building new plants. In this regard, its safety culture initiative  may be its most important improvement to the ROP. As we complete our  work, we will be examining whether NRC needs a more formal mechanism  to assess the effectiveness of this initiative, including incorporating  stakeholder feedback and developing specific measures to assess its  performance. It has been more than 4 years since Davis-Besse, and it  appears that NRC is now taking concrete actions to begin incorporating  safety culture into the ROP.
I would also like to point out that the ROP is a very open process in that  NRC provides the public and its other stakeholders with considerable  specific and detailed information on its activities and findings with regard  to safety at individual plants. However, to ensure or foster even greater  public confidence in safety oversight, as we complete our work, we will be  examining whether NRC can make this information more meaningful by  providing industry-wide or summary data for key components of its  oversight process. This information may provide a useful measure of  overall industry performance and allow for comparisons between the  safety performance of a specific plant to that of the industry as a whole.
subsections: section_title: Background
paragraphs: NRC is an independent agency of over 3,200 employees established by the  Energy Reorganization Act of 1974 to regulate civilian—that is,  commercial, industrial, academic, and medical—use of nuclear materials.  NRC is headed by a five-member Commission. The President appoints the  Commission members, who are confirmed by the Senate, and designates  one of them to serve as Chairman and official spokesperson. The  Commission as a whole formulates policies and regulations governing  nuclear reactor and materials safety, issues orders to licensees, and  adjudicates legal matters brought before it.
NRC and the licensees of nuclear power plants share the responsibility for  ensuring that commercial nuclear power reactors are operated safely. NRC  is responsible for issuing regulations, licensing and inspecting plants, and  requiring action, as necessary, to protect public health and safety. Plant  licensees have the primary responsibility for safely operating their plants  in accordance with their licenses and NRC regulations. NRC has the  authority to take actions, up to and including shutting down a plant, if  licensing conditions are not being met and the plant poses an undue risk to  public health and safety.
Nuclear power plants have many physical structures, systems, and  components, and licensees have numerous activities under way, 24-hours  a day, to ensure that plants operate safely. NRC relies on, among other  things, its on-site resident inspectors to assess plant 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 plant operations. According to NRC, its  focus on the more safety significant activities is made possible by the fact  that safety performance at plants has improved as a result of more than 25  years of operating experience.
Commercial nuclear power plants are designed according to a “defense in  depth” philosophy revolving around redundant, diverse, and reliable safety  systems. For example, two or more key components are put in place so  that if one fails, there is another to back it up. Plants have numerous built- in sensors to monitor important indicators such as water temperature and  pressure. Plants also have physical barriers to contain the radiation and  provide emergency protection. For example, the nuclear fuel is contained  in a ceramic pellet to lock in the radioactive byproducts and then the fuel  pellets are sealed inside rods made of special material designed to contain  fission products, and the fuel rods are placed in reactors housed in  containment buildings made of several feet of concrete and steel.
Furthermore, the nuclear power industry formed an organization, the  Institute of Nuclear Power Operations (INPO) with the mission to  “promote the highest levels of safety and reliability-to promote excellence- in the operation of nuclear electric generating plants.” INPO provides a  system of personnel training and qualification for all key positions at  nuclear power plants and workers undergo both periodic training and  assessment. INPO also conducts periodic evaluations of operating nuclear  plants, focusing on plant safety and reliability, in the areas of operations,  maintenance, engineering, radiological protection, chemistry, and training.  Licensees make these evaluations available to the NRC for review, and the  NRC staff uses the evaluations as a means to determine whether its  oversight process has missed any performance issues.
section_title: NRC Uses Various Tools and Takes a Graded and Risk- Informed Approach to Ensuring the Safety of Nuclear Power Plants
paragraphs: NRC uses various tools to oversee the safe operation of nuclear power  plants, generally consisting of physical plant inspections of equipment and  records and objective indicators of plant performance. These tools are  risk-informed in that they are focused on the issues considered most  important to plant safety. Based on the results of the information it  collects through these efforts, NRC takes a graded approach to its  oversight, increasing the level of regulatory attention to plants based on  the severity of identified performance issues. NRC bases its regulatory  oversight process on the principle and requirement that plant licensees  routinely identify and address performance issues without NRC’s direct  involvement. An important aspect of NRC’s inspections is ensuring the  effectiveness of licensee quality assurance programs. NRC assesses overall  plant performance and communicates these results to licensees on a semi- annual basis.
During fiscal year 2005, NRC inspectors spent a total of 411,490 hours on  plant inspection activities (an average of 77 hours per week at each plant).  The majority of these inspection efforts were spent on baseline  inspections, which all plants receive on an almost continuous basis.  Baseline inspections, which are mostly conducted by the two to three NRC  inspectors located at each nuclear power plant site, evaluate the safety  performance of plant operations and review plant effectiveness at  identifying and resolving its safety problems. There are more than 30  baseline inspection procedures, conducted at varying intervals, ranging  from quarterly to triennially, and involving both physical observation of  plant activities and reviews of plant reports and data. The inspection  procedures are risk-informed to focus inspectors’ efforts on the most  important areas of plant safety in four ways: 1) areas of inspection are  included in the set of baseline procedures based on, in part, their risk  importance, 2) risk information is used to help determine the frequency  and scope of inspections, 3) the selection of activities to inspect within  each procedure is informed with plant-specific risk information, and 4) the  inspectors are trained in the use of risk information in planning their  inspections.
For inspection findings found to be more than minor, NRC uses its  significance determination process (SDP) to assign each finding one of  four colors to reflect its risk significance. Green findings equate to very  low risk significance, while white, yellow, and red colors represent  increasing levels of risk, respectively. Throughout its application of the  SDP, NRC incorporates information from the licensee, and the licensee  has the opportunity to formally appeal the final determination that is  made.
In addition to assigning each finding a color based on its risk significance,  all findings are evaluated to determine if certain aspects of plant  performance, referred to as cross-cutting issues, were a contributing cause  to the performance problem. The cross-cutting issues are comprised of (1)  problem identification and resolution, (2) human performance, and (3)  safety consciousness in the work environment. To illustrate, in analyzing  the failure of a valve to operate properly, NRC inspectors determined that  the plant licensee had not followed the correct procedures when  performing maintenance on the valve, and thus NRC concluded the finding  was associated with the human performance cross-cutting area. If NRC  determines that there are multiple findings during the 12-month  assessment period with documented cross-cutting aspects, more than  three findings with the same causal theme, and NRC has a concern about  the licensee’s progress in addressing these areas, it may determine that the  licensee has a “substantive” cross-cutting issue. Opening a substantive  cross-cutting issue serves as a way for NRC to notify the plant licensee  that problems have been identified in one of the areas and that NRC will  focus its inspection efforts in the cross-cutting area of concern.
When NRC becomes aware of one or more performance problems at a  plant that are assigned a risk color greater-than-green (white, yellow, or  red), it conducts supplemental inspections. Supplemental inspections,  which are performed by regional staff, expand the scope beyond baseline  inspection procedures and are designed to focus on diagnosing the cause  of the specific performance deficiency. NRC increases the scope of its  supplemental inspection procedures based on the number of greater-than- green findings identified, the area where the performance problem was  identified, and the risk color assigned. For example, if one white finding is  identified, NRC conducts a follow-up inspection directed at assessing the  licensee’s corrective actions to ensure they were sufficient in both  correcting the specific problem identified and identifying and addressing  the root and contributing causes to prevent recurrence of a similar  problem. If multiple yellow findings or a single red finding is identified,  NRC conducts a much more comprehensive inspection which includes  obtaining information to determine whether continued operation of the  plant is acceptable and whether additional regulatory actions are  necessary to address declining plant performance. This type of more  extensive inspection is usually conducted by a multi-disciplinary team of  NRC inspectors and may take place over a period of several months. NRC  inspectors assess the adequacy of the licensee’s programs and processes  such as those for identifying, evaluating, and correcting performance  issues and the overall root and contributing causes of identified  performance deficiencies.
NRC conducts special inspections when specific events occur at plants  that are of particular interest to NRC because of their potential safety  significance. Special inspections are conducted to determine the cause of  the event and assess the licensee’s response. For special inspections, a  team of experts is formed and an inspection charter issued that describes  the scope of the inspection efforts. At one plant we reviewed, for example,  a special inspection was conducted to investigate the circumstances  surrounding the discovery of leakage from a spent fuel storage pool.  Among the objectives of this inspection were to assess the adequacy of the  plant licensee’s determination of the source and cause of the leak, the risk  significance of the leakage, and the proposed strategies to mitigate leakage  that had already occurred and repair the problem to prevent further  leakage.
In addition to its various inspections, NRC also collects plant performance  information through a performance indicator program, which it maintains  in cooperation with the nuclear power industry. On a quarterly basis, each  plant submits data for 15 separate performance indicators. These objective  numeric measures of plant operations are designed to measure plant  performance related to safety in various aspects of plant operations. For  example, one indicator measures the number of unplanned reactor  shutdowns during the previous four quarters while another measures the  capability of alert and notification system sirens, which notify residents  living near the plant in the event of an accident. Working with the nuclear  power industry, NRC established specific criteria for acceptable  performance with thresholds set and assigned colors to reflect increasing  risk according to established safety margins for each of the indicators.  Green indicators reflect performance within the acceptable range while  white, yellow, and red colors represent decreasing plant performance,  respectively. NRC inspectors review and verify the data submitted for each  performance indicator annually through the baseline inspection process. If  questions arise about how to calculate a particular indicator or what the  correct value should be, there is a formal feedback process in place to  resolve the issue. When performance indicator thresholds are exceeded,  NRC responds in a graded fashion by performing supplemental inspections  that range in scope depending on the significance of the performance  issue.
Under the ROP, NRC places each plant into a performance category on the  agency’s action matrix, which corresponds to increasing levels of  oversight based on the number and risk significance of inspection findings  and performance indicators. The action matrix is NRC’s formal method of  determining what additional oversight procedures—mostly supplemental  inspections—are required. Greater-than-green inspection findings are  included in the action matrix for a minimum of four quarters to allow  sufficient time for additional findings to accumulate that may indicate  more pervasive performance problems requiring additional NRC oversight.  If a licensee fails to correct the performance problems within the initial  four quarters, the finding may be held open and considered for additional  oversight for more than the minimum four quarters.
At the end of each 6-month period, NRC issues an assessment letter to  each plant licensee. This letter describes what level of oversight the plant  will receive according to its placement in the action matrix performance  categories, what actions NRC is expecting the plant licensee to take as a  result of the performance issues identified, and any documented  substantive cross-cutting issues. NRC also holds an annual public meeting  at or near each plant site to review performance and address questions  about the plant’s performance from members of the public and other  interested stakeholders. Most inspection reports, assessment letters and  other materials related to NRC’s oversight processes are made publicly  available through a NRC website devoted to the ROP. The website also  includes plant-specific quarterly summaries of green or greater inspection  findings and all the performance indicators.
section_title: NRC Has Continually Identified Problems at Nuclear Power Plants but Few Have Been Considered Significant to Safe Operation of the Plants
paragraphs: The ROP has identified numerous performance deficiencies as inspection  findings at nuclear power plants since it was first implemented, but most  of these were considered to be of very low risk to safe plant operations.  Similarly, there have been very few instances in which performance  indicator data exceeded acceptable standards. As a result, few plants have  been subjected to high levels of oversight.
Of more than 4,000 inspection findings identified between 2001 and 2005,  97 percent were green. While green findings are considered to be of “very  low” safety significance, they represent a performance deficiency on the  part of the plant licensee and thus are important to correct. Green findings  consist of such things as finding that a worker failed to wear the proper  radiation detector or finding that a licensee did not properly evaluate and  approve the storage of flammable materials in the vicinity of safety-related  equipment. NRC does not follow-up on the corrective action taken for  every green finding identified; rather, it relies on the licensee to address  and track their resolution through the plant’s corrective action program.  NRC does, however, periodically follow-up on some of the actions taken  by the licensee to address green findings through an inspection  specifically designed to evaluate the effectiveness of the licensee’s  corrective action program. NRC officials stated that green findings provide  useful information on plant performance and NRC inspectors use the  findings to identify performance trends in certain areas and help inform  their selection of areas to focus on during future inspections. In contrast  to the many green findings, NRC has identified 12 findings of the highest  risk significance (7 yellow and 5 red), accounting for less than 1 percent of  the findings since 2001. For example, one plant was issued a red finding— the highest risk significance—after a steam generator tube failed, causing  an increased risk in the release of radioactive material.
Similar to the inspection findings, most performance indicator reports  have shown the indicators to be within the acceptable levels of  performance. Only 156, or less than one percent of over 30,000 indicator  reports from 2001 to 2005, exceeded the acceptable performance  threshold. Four of the 15 performance indicators have always been  reported to be within acceptable performance levels. In addition, 46 plants  have never had a performance indicator fall outside of the acceptable level  and only three plants reported having a yellow indicator for one  performance measure; no red indicators have ever been reported.
On the basis of its inspection findings and performance indicators, NRC  has subjected more than three quarters of the 103 operating plants to at  least some level of increased oversight (beyond the baseline inspections)  for varying amounts of time. Most of these plants received the lowest level  of increased oversight, consisting of a supplemental inspection, to follow- up on the identification of one or two white inspection findings or  performance indicators. Five plants have received the highest level of  plant oversight for which NRC allows plants to continue operations, due to  the identification of multiple white or yellow findings and/or the  identification of a red finding. One plant received this level of oversight  because NRC determined that the licensee failed to address the common  causes of two white findings and held them open for more than four  quarters. One of these findings involved the recurrent failure of a service  water pump because the licensee failed to take adequate corrective action  after the first failure.
NRC inspectors at the plants we reviewed indicated that, when plant  performance declines, it is often the result of ineffective corrective action  programs, problems related to human performance, or complacent  management, which often results in deficiencies in one or more of the  cross-cutting areas. In assessing the results of the ROP data, we found that  all plants subjected to NRC’s highest level of oversight also had a  substantive cross-cutting issue open either prior to or during the time that  it was subjected to increased oversight inspections.
Overall, NRC’s oversight process shows mostly consistent results from  2001 to 2005. For example, the total number of green findings at all plants  ranged from 657 to 889 per year and the total number of other findings  ranged from 10 to 30 per year with no strong trend (see fig. 1).
Only in the area of cross-cutting issues—or inspection findings for which  one or more cross-cutting issues was associated—is an increasing trend  evident (see fig. 2). According to NRC, the reason for this increase is due  in part to the development of guidance on the identification and  documentation of cross-cutting issues and its increased emphasis in more  recent years.
According to NRC officials, the results of its oversight process at an  industry or summary level serve as an indicator of industry performance,  which to date indicates good safety performance. On an annual basis, NRC  analyzes the overall results of its inspection and performance indicator  programs and compares them with industry level performance metrics to  ensure all metrics are consistent and takes action if adverse trends are  identified. While NRC communicates the results of its oversight process on  a plant-specific basis to plant managers, members of the public, and other  government agencies through annual public meetings held at or near each  site and an internet Web site, it does not publicly summarize the overall  results of its oversight process, such as the total number and types of  inspection findings and performance indicators falling outside of  acceptable performance categories, on a regular basis.
section_title: NRC Continues to Make Improvements to its Reactor Oversight Process in Key Areas
paragraphs: NRC has taken a proactive approach to improving its reactor oversight  process. It has several mechanisms in place to incorporate feedback from  both external and internal stakeholders and is currently working on  improvements in key areas of the process, including better focusing  inspections on areas most important to safety, improving its timeliness in  determining the risk significance of its inspection findings, and modifying  the way that it measures some performance indicators. NRC is also  working to address what we believe is a significant shortcoming in its  oversight process by improving its ability to address plants’ safety culture,  allowing it to better identify and address early indications of deteriorating  safety at plants before performance problems develop.
According to NRC officials, the ROP was implemented with the  understanding that it would be an evolving process and improvements  would be made as lessons-learned were identified. Each fall NRC solicits  feedback from external stakeholders, including industry organizations,  public interest groups, and state and local officials, through a survey  published in the Federal Register. NRC also conducts an internal survey of  its site, regional, and headquarters program and management staff every  other year to obtain their opinions on the effectiveness of the ROP.  Additionally, NRC has in place a formal feedback mechanism whereby  NRC staff can submit recommendations for improving various oversight  components and NRC staff meet with industry officials on a monthly  basis—in addition to various meetings, workshops, and conferences—to  discuss oversight implementation issues and concerns. NRC staff also  incorporates direction provided by the NRC Commissioners and  recommendations from independent evaluations such as from GAO and  the NRC Inspector General. The results of these efforts are pulled together  in the form of an annual self-assessment report, which outlines the overall  results of its outreach and the changes it intends to make in the year  ahead.
According to NRC officials, the changes made to the ROP since its  implementation in 2000—including those made in response to the Davis- Besse incident—have generally been refinements to the existing process  rather than significant changes to how it conducts its oversight. In the case  of Davis-Besse, NRC formed a task force to review the agency’s regulatory  processes. The task force’s report, issued in September 2002, contained  more than 50 recommendations, many associated with the ROP. Among  the more significant ROP-related recommendations were those to enhance  the performance indicator that monitors unidentified leakage to be more  accurate, develop specific guidance to inspect boric acid control programs  and vessel head penetration nozzles, modify the inspection program to  provide for better follow-up of longstanding issues, and enhance the  guidance for managing plants that are in an extended shutdown condition  as a result of significant performance problems. NRC program officials  told us that the task force’s most significant recommendations were in  areas outside of the ROP, such as improving the agency’s operating  experience program. According to NRC, it has implemented almost all of  the task force’s recommendations.
Other modifications that NRC has recently made or is in the process of  making include the following:    NRC recently revised seven of its baseline inspection procedures to better  focus the level and scope of its inspection efforts on those areas most  important to safety. These revisions resulted from a detailed analysis in  2005 of its more than 30 baseline inspection procedures. The effort  involved analyzing the number of findings resulting from each of its  inspection procedures and the time spent directly observing plant  activities or reviewing licensee paperwork, among other things.
NRC has efforts underway to improve what it refers to as its significance  determination process (SDP). An audit by the NRC Inspector General, a  review by a special task group formed by NRC, and feedback from other  stakeholders have pointed to several significant weaknesses with the SDP.  For example, internal and external stakeholders raised concerns about the  amount of time, level of effort, and knowledge and resources required to  determine the risk significance of some findings. Industry officials  commented that because most inspection findings are green, one white  finding at a plant can place it in the “bottom quartile” of plants from a  performance perspective. Therefore, industry officials explained, licensees  try to avoid this placement and will expend a great deal of effort and  resources to provide additional data to NRC to ensure the risk level of a  finding is appropriately characterized. This can add significant time to the  process because different technical tools may be used that then must be  incorporated with NRC’s tools and processes. The delay in assigning a  color to a finding while the new information is being considered could also  affect a plant’s placement on NRC’s action matrix, essentially delaying the  increased oversight called for if the finding is determined to be greater- than-green. NRC developed a SDP Improvement Plan in order to address  these and other concerns and track its progress in implementing key  changes. For example, NRC introduced a new process aimed at improving  timeliness by engaging decision-makers earlier in the process to more  quickly identify the scope of the evaluation, the resources needed, and the  schedule to complete the evaluation.
NRC is also taking actions to improve its performance indicators. These  actions are partly to address concerns that the indicators have not  contributed to the early identification of poorly performing plants to the  degree originally envisioned as they are almost always within acceptable  performance levels (green). There have been several cases where plants  reported an acceptable performance indicator and performance problems  were subsequently identified. For example, NRC inspectors at one plant  noted that while performance indicator data related to its alert and  notification system in place for emergency preparedness had always been  reported green, the system had not always been verified to be functioning  properly. On the other hand, industry officials believe that the high  percentage of indicators that are green is indicative of plants’ good  performance. Several plant managers told us that they closely monitor and  manage to the acceptable performance thresholds established for each  indicator, and will often take action to address performance issues well  before the indicator crosses the acceptable performance threshold.  Because NRC inspectors verify indicator data once a year, a potential  disagreement over the data might not surface for up to a year after it is  reported, and it may take even longer to resolve the disagreement with the  licensee. Similar to delays with the SDP, a delay in assigning a color while  the disagreement is resolved could affect a plant’s placement on NRC’s  action matrix, and delay the increased oversight called for if the indicator  is determined to be greater-than-green. NRC plans to work with the  industry to review selected indicator definitions to make interpretation  more concise and reduce the number of discrepancies. To date, NRC has  focused significant effort on developing a key indicator to address known  problems with the performance indicators measuring the unavailability of  safety systems. NRC is also in the process of changing the definition for  several other indicators, in addition to considering the feasibility of new  indicators.
I would now like to discuss what we believe is one of NRC’s most  important efforts to improve its oversight process by increasing its ability  to identify and address deteriorating safety culture at plants. NRC and  others have long recognized that safety culture and the attributes that  make up safety culture, such as attention to detail, adherence to  procedures, and effective corrective and preventative action, have a  significant impact on a plant’s performance. Despite this recognition and  several external groups’ recommendations to better incorporate safety  culture aspects into its oversight process, it did not include specific  measures to explicitly address plant safety culture when it developed the  ROP in 2000. The 2002 Davis-Besse reactor vessel head incident  highlighted that this was a significant weakness in the ROP. In  investigating this event, we and others found that NRC did not have an  effective means to identify and address early indications of deteriorating  safety at plants before performance problems develop. Largely as a result  of this event, in August 2004, the NRC Commission directed the NRC staff  to enhance the ROP by more fully addressing safety culture.
In response to the Commission’s directive, the NRC staff formed a safety  culture working group in early 2005. The working group incorporated the  input of its stakeholders through a series of public meetings held in late  2005 and early 2006. In February 2006, NRC issued its proposed approach  to better incorporate safety culture into the ROP. NRC officials expect to  fully implement all changes effective in July 2006.
NRC’s proposed safety culture changes largely consist of two main  approaches: first, clarifying the identification and treatment of cross- cutting issues in its inspection processes and second, developing a  structured way for NRC to determine the need for a safety culture  evaluation of plants. NRC has developed new definitions for each of its  cross-cutting issues to more fully address safety culture aspects and  additional guidance on their treatment once they are identified. For  example, the problem identification and resolution cross-cutting area is  now comprised of several components—corrective action program, self  and independent assessments, and operating experience. NRC inspectors  are to assess every inspection finding to determine if it is associated with  one or more of the components that make up each of the cross-cutting  areas. Inspectors then determine, on a semi-annual basis, if a substantive  cross-cutting issue exists on the basis of the number and areas of cross- cutting components identified. If the same substantive cross-cutting issue  is identified in three consecutive assessment periods, NRC may request  that the licensee perform an assessment of its safety culture. The intent is  to provide an opportunity to diagnose a potentially declining safety culture  before significant safety performance problems occur.
Under its approach, NRC would expect the licensees of plants with more  than one white color finding or one yellow finding to evaluate whether the  performance issues were in any way caused by any safety culture  components, and NRC might request the licensee to complete an  independent assessment of its safety culture, if the licensee did not  identify an important safety culture component. For plants where more  significant or multiple findings have been identified, the NRC would not  only independently evaluate the adequacy of the independent assessment  of the licensee’s safety culture, but it might also conduct its own  independent assessment of the licensee’s safety culture.
Some of NRC’s proposed actions regarding safety culture have been  controversial, and not all stakeholders completely agree with the agency’s  approach. For example, the nuclear power industry has expressed concern  that the changes could introduce undue subjectivity to NRC’s oversight,  given the difficulty in measuring these often intangible and complex  concepts. Several of the nuclear power plant managers at the sites we  reviewed said that it is not always clear why a cross-cutting issue was  associated with finding, or what it will take to clear themselves once  they’ve been identified as having a substantive cross-cutting issue open.  Some industry officials worry that this initiative will further increase the  number of findings that have cross-cutting elements associated with them  and if all of the findings have them they will lose their value. Industry  officials also warn that if it is not implemented carefully, it could divert  resources away from other important safety issues. Other external  stakeholders, on the other hand, suggest that this effort is an important  step in improving NRC’s ability to identify performance issues at plants  before they result in performance problems. Importantly, there will be  additional tools in place for NRC to use when it identifies potential safety  culture concerns. NRC officials view this effort as the beginning step in an  incremental approach and acknowledge that continual monitoring,  improvements, and oversight will be needed in order to better allow  inspectors to detect deteriorating safety conditions at plants before events  occur. NRC plans to evaluate stakeholder feedback and make changes  based on lessons learned from its initial implementation of its changes as  part of its annual self-assessment process for calendar year 2007.
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: GAO Contact and Staff Acknowledgments
paragraphs: For further information about this testimony, please contact me at (202)  512-3841 (or at wellsj@gao.gov). Raymond H. Smith, Jr. (Assistant  Director), Alyssa M. Hundrup, Alison O’Neill, and Dave Stikkers made key  contributions to this testimony.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.