[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                   A REVIEW OF THE NRC'S REACTOR OVERSIGHT 
                                    PROCESS


                                    HEARING

                                   BEFORE THE

                 SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                     OF THE 

                            COMMITTEE ON ENERGY AND 
                                    COMMERCE

                           HOUSE OF REPRESENTATIVES


                          ONE HUNDRED NINTH CONGRESS

                                SECOND SESSION


                                JUNE 19, 2006

                              Serial No. 109-104

         Printed for the use of the Committee on Energy and Commerce

Available via the World Wide Web:  http://www.access.gpo.gov/congress/house



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                     COMMITTEE ON ENERGY AND COMMERCE
                        JOE BARTON, Texas, Chairman
RALPH M. HALL, Texas                      JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida                  Ranking Member
  Vice Chairman                           HENRY A. WAXMAN, California
FRED UPTON, Michigan                      EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida                    RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                     EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia                      FRANK PALLONE, JR., New Jersey
ED WHITFIELD, Kentucky                    SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia                  BART GORDON, Tennessee
BARBARA CUBIN, Wyoming                    BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois                    ANNA G. ESHOO, California
HEATHER WILSON, New Mexico                BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona                  ELIOT L. ENGEL, New York
CHARLES W. "CHIP" PICKERING,  Mississippi ALBERT R. WYNN, Maryland
  Vice Chairman                           GENE GREEN, Texas
VITO FOSSELLA, New York                   TED STRICKLAND, Ohio
ROY BLUNT, Missouri                       DIANA DEGETTE, Colorado
STEVE BUYER, Indiana                      LOIS CAPPS, California
GEORGE RADANOVICH, California             MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire            TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania             JIM DAVIS, Florida
MARY BONO, California                     JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon                       HILDA L. SOLIS, California
LEE TERRY, Nebraska                       CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey                 JAY INSLEE, Washington
MIKE ROGERS, Michigan                     TAMMY BALDWIN, Wisconsin
C.L. "BUTCH" OTTER, Idaho                 MIKE ROSS, Arkansas                       
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee

                    BUD ALBRIGHT, Staff Director
                   DAVID CAVICKE, General Counsel
   REID P. F. STUNTZ, Minority Staff Director and Chief Counsel


             SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
                   ED WHITFIELD, Kentucky, Chairman
CLIFF STEARNS, Florida                    BART STUPAK, Michigan
CHARLES W. "CHIP"                           Ranking Member
PICKERING,  Mississippi                   DIANA DEGETTE, Colorado
CHARLES F. BASS, New                      JAN SCHAKOWSKY, Illinois
Hampshire                                 JAY INSLEE, Washington
GREG WALDEN, Oregon                       TAMMY BALDWIN, Wisconsin
MIKE FERGUSON, New Jersey                 HENRY A. WAXMAN, California
MICHAEL C. BURGESS, Texas                 JOHN D. DINGELL, Michigan
MARSHA BLACKBURN, Tennessee                 (EX OFFICIO)                            
JOE BARTON, Texas
  (EX OFFICIO)

                              CONTENTS


                                                                       Page
Testimony of:

        Wells, Jim, Director, Natural Resources and the 
                Environment, Government Accountability Office	        10
        McGaffigan, Jr., Hon. Edward, Commissioner,  
                Nuclear Regulatory Commission	                        37
        Gunter, Paul, Director, Reactor Watchdog Project, 
                Nuclear Information and Resource Service	        54
Additional material submitted for the record:
        Wells, Jim, Director, Natural Resources and the 
                Environment, Government Accountability Office, 
                response for the record	                                62
        McGaffigan, Jr., Hon. Edward, Commissioner, U.S. 
                Nuclear Regulatory Commission, response for the 
                record	                                                65

                A REVIEW OF THE NRC'S REACTOR OVERSIGHT 
                                  PROCESS


                           MONDAY, JUNE 19, 2006

                         HOUSE OF REPRESENTATIVES,
                    COMMITTEE ON ENERGY AND COMMERCE,
             SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,
                                                         Washington, DC.


        The subcommittee met, pursuant to notice, at 4:05 p.m., in 
Room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
[Chairman] presiding.
        Present:  Representatives Whitfield, Burgess, Barton (Ex 
Officio), Schakowsky, and Inslee.
        Staff Present:  Dwight Cates, Professional Staff Member; 
Matthew Johnson, Legislative Clerk; Edith Holleman, Minority 
Counsel; Elizabeth Ertel, Minority Senior Staff Assistant; and 
Jonathan Brater, Minority Staff Assistant.
        MR. WHITFIELD.  If I could have your attention, it was our 
intent to begin this hearing at 4:00 p.m., and as you can see, it is 
about five after.  There has been a delay in some transportation as 
members come back to the District, and we do expect a couple 
Members will be here in about 5 or 10 minutes.  And when they 
arrive, we will get started.  So I apologize for the delay, and we 
will get started as soon as possible.  Thank you.
        The hearing will come to order.  It didn't take as long as I 
thought, Jan.  Today we are going to review the status of the 
Nuclear Regulatory Commission's Reactor Oversight Process.  
Initiated in the year 2000, the Reactor Oversight Process was 
intended to create a risk-informed tiered approach to ensuring plant 
safety by focusing on three key areas:  reactor safety, radiation 
safety for plant workers and the public, and physical security of the 
plant against sabotage or security threats.  
        The NRC developed the reactor process to apply more 
objective, timely, and risk-informed criteria in assessing plant 
performance while seeking to more effectively and efficiently 
regulate the industry.  Given the fact that it has now been in place 
for almost 6 years, last spring I, along with several other members 
requested the GAO, the General Accountability Office, review the 
effectiveness of the NRC's Reactor Oversight Process.  
        We asked for this review in part because there have been a few 
very serious safety incidents that have raised questions about 
NRC's ability to identify and resolve significant safety issues 
before they occur.  For instance, in February of 2002, a very large 
hole was discovered on the reactor vessel head at the Davis-Besse 
plant in Ohio.  Up until that point, NRC inspectors had given the 
Davis-Besse plant "green" findings for all aspects of plant 
performance.  For those of you who are not familiar with NRC's 
color coding system, a "green" finding indicates that performance 
objectives are fully met.  
        Unfortunately these green findings were entirely wrong.  For 
several years, NRC failed to identify near catastrophic boric acid 
corrosion so severe that less than one half of an inch of metal 
remained on the reactor vessel head.  Clearly, the NRC's Reactor 
Oversight Process failed to anticipate the significant safety issue.  
To its credit, NRC has made significant strides in the Reactor 
Oversight Process in the years since the Davis-Besse incident.  I 
understand that new revisions are about to be implemented to the 
Reactor Oversight Process to address safety culture issues that led 
to the problems at Davis-Besse.  
        NRC is also working closely with industry to improve selected 
performance indicators.  These reforms are critical, particularly in 
light of the nuclear industry's renewed interests in the development 
of a new fleet of nuclear reactors.  We need the nuclear industry to 
construct several new reactors to meet growing energy demands.  
However, we must also maintain the aging fleet of existing 
reactors.  I expect that many of the 103 domestic reactors will be in 
operation decades beyond their initial 40-year design.  Thus, NRC 
must continue to adapt the Reactor Oversight Process to anticipate 
new safety challenges presented by new reactor designs and also 
adapt to new safety challenges associated with the aging 
component issues that NRC and the nuclear industry have yet to 
discover.  
        We look forward to the testimony today of all the witnesses.  
And at this time, I'd like to recognize Ms. Schakowsky of Illinois 
for her opening statement.  
	[The prepared statement of Hon. Ed Whitfield follows:]

PREPARED STATEMENT OF THE HON. ED WHITFIELD, CHAIRMAN, 
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

        This hearing will come to order.  Today we will review the 
status of the Nuclear Regulatory Commission's Reactor Oversight 
Process.  Initiated in the year 2000, the Reactor Oversight Process 
was intended to create a risk-informed, tiered approach to ensuring 
plant safety by focusing on three key areas - reactor safety, 
radiation safety for plant workers and the public, and physical 
security of the plant against sabotage or security threats.  
        The NRC developed the reactor oversight process to apply 
more objective, timely, and risk-informed criteria in assessing 
plant performance, while seeking to more effectively and 
efficiently regulate the industry.  Given the fact that it has now 
been in place for almost 6 years, last Spring I along with several 
other Members requested the General Accountability Office 
review the effectiveness of NRC's reactor oversight process.  
        I asked for this review, in part, because there have been a few 
very serious safety incidents that have raised questions about 
NRC's ability to identify and resolve significant safety issues 
before they occur.  
        For instance, in February of 2002, a very large hole was 
discovered on the reactor vessel head at the Davis Besse plant in 
Ohio.  Up until that point, NRC inspectors had given the Davis 
Besse plant "green" findings for all aspects of plant performance.  
For those of you who are not familiar with NRC's color coding 
system, a "green" finding indicates that performance objectives are 
fully met.  Unfortunately, these "green" findings were entirely 
wrong.  For several years NRC failed to identify near-catastrophic 
boric acid corrosion so severe that less than one half of an inch of 
metal remained on the reactor vessel head.  Clearly the NRC's 
reactor oversight process failed to anticipate this significant safety 
issue.
        To its credit, NRC has made significant strides in the reactor 
oversight process in the years since the Davis Besse incident.  I 
understand that new revisions are about to be implemented to the 
reactor oversight process to address safety culture issues that led to 
the problems at Davis Besse.  NRC is also working closely with 
industry to improve selected performance indicators.
        These reforms are critical, particularly in light of the nuclear 
industry's renewed interest in the development of a new fleet of 
nuclear reactors.  We need the nuclear industry to construct several 
new reactors to meet growing energy demands.  However, we must 
also maintain the aging fleet of existing reactors.  
        I expect many of the 103 domestic reactors will be in operation 
decades beyond their initial 40-year design basis.  Thus, NRC must 
continue to adapt the reactor oversight process to anticipate new 
safety challenges presented by new reactor designs, and also adapt 
to new safety challenges associated with aging component issues 
NRC and the nuclear industry has have yet to discover.  
        I look forward to the testimony of today's witnesses, and I 
yield back the balance of my time. 

        MS. SCHAKOWSKY.  Thank you, Mr. Chairman, and thank you 
for holding today's hearing on the Nuclear Regulatory 
Commission's Reactor Oversight Process, the ROP.  A number of 
recent incidents at nuclear plants in Illinois and throughout the 
Nation have put in doubt whether the NRC's safety standards and 
inspection processes are adequate.  I'm interested to know whether 
the NRC has learned from incidents like Davis-Besse and 
restructured its oversight process sufficiently to prevent their 
recurrence.  
        Since President Bush has proposed new nuclear development 
as a signature part of his energy policy, we must ensure that the 
NRC safety procedures are foolproof and that they deter future 
incidents.  Since the Reactor Oversight Process was implemented 
in 2000, safety inspections found plants or employees had failed to 
comply with safe operating procedures in over 4,000 instances.  
And while many of those incidents were classified as "green" 
under the system, "green" doesn't mean all clear.  It means that a 
plant or an employee failed to meet the NRC safety standards.  
        I look forward to hearing whether that number is an 
improvement over the number of incidents that occurred before the 
ROP was in place and whether the ROP has promoted a culture of 
safety and accountability in our Nation's nuclear plants.  
In Illinois, which has 11 nuclear reactors, several incidents at 
Exelon plants has demonstrated that even after the implementation 
of the ROP, there have been a number of safety hazards and 
radioactive leaks that have threatened public health.  This 
February, Exelon disclosed to the public that between 1996 and 
2003, two Illinois plants spilled radioactive cancer-causing tritium 
on four occasions.  Not only did this expose holes in oversight, it 
also highlighted the nuclear industry's failure to disclose threats to 
public health.  One of the most immediate ways the Energy and 
Commerce Committee could promote nuclear safety would be to 
consider the Nuclear Release Notice Act, sponsored by Senator 
Obama and Congressman Weller, which would force the nuclear 
industry to notify the State, county, and public, whenever there's 
an unplanned release of radioactive material in excess of legal 
limits.  
        Illinois enacted legislation this year which requires nuclear 
plants to report leaks of radioactive material that contaminate 
groundwater, surface water, and the soil to regulators within 24 
hours.  In addition to these unannounced radioactive leaks, on 
February 20, there was a rare onsite emergency at Exelon's 
LaSalle facility involving control rods that are used to shut reactors 
down.  The NRC has subsequently released a report that states that 
the side area emergency declared at LaSalle overstated the 
problem, but the incident raised several questions.  
        First, shouldn't there be Federal standards regulated by the 
NRC which outline what constitutes a nuclear emergency and 
mandates a particular Federal response?  In addition, under the 
ROP, individual plants are inspected more or less regularly based 
on their individual histories.  The incidents at Davis-Besse and 
LaSalle beg the question, aren't all of the nation's 103 nuclear 
plants inspected and regulated with the highest possible frequency 
and standards?  
        Mr. Chairman, the residents of a town like Seabrook, New 
Hampshire; Salem, New Jersey; and Braidwood, Illinois, want to 
know definitively things have changed since Three Mile Island.  
They and their families want to believe that they have nothing to 
fear from the nuclear plants in their towns and from the water 
supplies which feed the plants.  Over the past several years, there 
have been over 4,000 unsafe incidents at the Nation's 103 nuclear 
plants.  I ask our witnesses, is the ROP the best and safest reactor 
oversight system that we could possibly have?  Knowing that so 
many plants have failed to meet the NRC's current safety 
standards, do we have the capacity and oversight system to safely 
expand the number of reactors in this country?  
        Today we should not only judge whether the ROP has been 
effective, but we should also take a broader look to determine 
whether the President's plan to expand nuclear development in this 
country is safe and warranted.  Thank you.  
        MR. WHITFIELD.  Thank you, Ms. Schakowsky.  At this time, 
Dr. Burgess, do you have an opening statement?  
        MR. BURGESS.  Mr. Chairman, in the interest of time, I will 
submit what I have for the record, and we'll go right on to the 
witnesses. 
	[Additional statements submitted for the record follows:]

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, 
COMMITTEE ON ENERGY AND COMMERCE

        Mr. Chairman, thank you for holding this important hearing.  
Nuclear power is a critical source of approximately twenty percent 
of the electricity we generate each year.  I want that number to 
increase over the next decade, and many of the provisions in the 
Energy Policy Act we passed last year will help pave the way for 
the construction of a new generation of nuclear power plants.  
Principal among these provisions was the reauthorization of the 
Price Anderson Act.
        The public has a strong and growing confidence in nuclear 
power because it is proven to be reliable, and it is proven to be 
safe.  The nuclear industry has demonstrated a willingness to adapt 
quickly when new safety or design issues are discovered, and it has 
worked closely with the NRC to resolve these issues quickly. 
        The reactor oversight process at NRC continues to evolve, and 
I am pleased with the Commission's willingness to seek feedback 
from external stakeholders.  All groups ranging from nuclear 
power supporters to environmental activists have a seat at the table 
when NRC seeks feedback on its reactor oversight process.
        The future of nuclear power will depend on whether we can 
maintain the public trust that NRC and the industry have developed 
over the years.  I feel confident that the Commission and the NRC 
staff are committed to this task.  
        With respect to licensing new power plants, there is a lot of 
work yet to do at NRC.  The Commission will be challenged with a 
significant workload as new license applications arrive.  It is 
critical that NRC maintain the public's trust by keeping a clear 
focus on safety.
        I understand that GAO has a generally positive review of 
NRC's reactor oversight process.  I look forward to hearing from 
both NRC and GAO on what we can do to further improve the 
process.
        I thank the Chairman, and I yield back.

PREPARED STATEMENT OF THE HON. CLIFF STEARNS, A 
REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

        Mr. Chairman, today's hearing on the Nuclear Regulatory 
Commission's (NRC) gives us an opportunity to learn more about 
the efficiency and effectiveness of the reactor oversight process 
(ROP).  Six years after its deployment, I am eager to see if the 
development of objective, risk-informed, and timely measurement 
criteria of the ROP has brought some improvement in safety and 
efficiency.
        The NRC fulfills a vital role in safeguarding our health and 
environment.  Our nation boasts the safest reactors in the world--
and the nuclear industry shares our desire to keep it that way.
        The ROP was developed in order to improve the performance, 
reduce unnecessary regulation, while improving the NRC's 
management of reactor safety.  The ROP focuses on three key 
areas: reactor safety; radiation safety; and security of the plant 
against sabotage and other physical threats. Combining these 
performance indicators with NRC inspections, we end up with a 
color-coded rating system.  Green indicates good performance, red 
indicates sub-par performance, yellow indicates a reduction in 
safety, and red indicates a serious reduction in safety.  A plant 
earning any rating less than green triggers further inspections and 
reviews.   Without improvement, the NRC can resort to civil orders 
or even the suspension of the reactor's operating license.
        The color-coded system appears to offer improvements in 
compliance and safety, but we must be wary of simplifying 
regulation too far--we have no wish for a trite oversight program.  
Nor do we want to see a color-coding system as useless as the 
Department of Homeland Security's color-coded alert system.
        Of course, while I share the concerns of our witness from the 
activist group Nuclear Information and Resource Service that the 
NRC vigilantly protect our nation, I do not equate the number of 
enforcement actions with the quality of oversight or the level of 
safety improvement.
        Indeed, the NRC appears to be exercising greater flexibility in 
methods of safety improvement.  For instance, following the 
discovery of severe corrosion on the reactor vessel head at the 
David Besse (pronounced BESS - EE) plant in 2002, the NRC 
evaluated the problem, and adapted its findings to expand the ROP 
performance indicators into new areas, and to tailor new 
recommendations for plant operators.
        Mr. Chairman, we have devoted significant time and effort in 
this Committee to expanding America's supply of nuclear power.  
I hope our witnesses this afternoon will help us see how far we 
have some on the safety of our 103 nuclear reactors, and what 
factors we still must address as we seek to add many more.

        MR. WHITFIELD.  Thank you very much.  Today we're going to 
have two panels of witnesses, and in the first panel--I welcome 
you--we have Mr. Jim Wells, who is the Director of Energy in the 
Natural Resources and the Environment, at the Government 
Accountability Office.  And I certainly welcome the Honorable 
Edward McGaffigan, who is the Commissioner of the U.S. Nuclear 
Regulatory Commission.  Mr. Wells, you are accompanied today 
by Alyssa Hundrup.  Will she be testifying?  
        MR. WELLS.  Yes, she will, Mr. Chairman.  
        MR. WHITFIELD.  As you know, this is an Oversight and 
Investigations hearing, and it is our practice to take testimony 
under oath.  Do either of the three of you have any difficulty 
testifying under oath?  And do you intend to be represented by 
legal counsel today?  
        MR. WELLS.  No.  
        MR. WHITFIELD.  If you would stand, I will swear you in.  
        [Witnesses sworn.]

TESTIMONY OF JIM WELLS, DIRECTOR, ENERGY, NATURAL RESOURCES, AND THE 
ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE; AND HON. EDWARD MCGAFFIGAN, 
COMMISSIONER; U.S. NUCLEAR REGULATORY COMMISSION  

        MR. WHITFIELD.  Thank you.  You are now sworn in.  And 
Mr. Wells, we'll call upon you for your 5 minute opening 
statement.  
        MR. WELLS.  Thank you, Mr. Chairman, members of the 
subcommittee.  
        MR. WHITFIELD.  Be sure to turn your microphone on.  
        MR. WELLS.  It's on, but it's not recording.  Light's on.  Hello.  
Testing, one two.  Testing, one two.  Okay.  We've got it now.  
        MR. WHITFIELD.  Thank you.  
        MR. WELLS.  The safe operation of commercial nuclear power 
plants is a private industry responsibility.  The law says that the 
NRC as the regulatory commission must ensure that this happens.  
A lot is riding on how good a job NRC is doing.  Some of us 
remember Three Mile Island in '79, the 2000 steam pipe leak at 
Indian Point, and Davis-Besse in 2002.  Avoiding accidents is 
paramount to achieving public confidence that the industry and 
NRC are doing a good job as we think about advancing the future 
of nuclear power.  
        Given how complex and how hard we are using these plants to 
produce 20 percent of our Nation's energy needs, the safety record 
is pretty good.  Prior to 2000, NRC was criticized for doing 
oversight that was redundant, inefficient, overly subjective, and not 
always focused on the most important safety issues.  GAO, the 
Congress, the industry, and even many in NRC were not happy 
with the old inspection program.  NRC's new process, based on 
what we've been able to learn, is similar to the old in terms of 
physical plant inspections, but it's now more objective, 
predictable, and risk informed.  The unexpected discovery at 
Davis-Besse plant as, Mr. Chairman, you mentioned the 
pineapple-sized hole in the reactor vessel head, I think it was a 
wake-up call that the ROP did not work as planned.  
        Some good came out of this, as NRC has changed and 
improved its operations, and improved oversight as a result and 
incorporated new things in the ROP process which we can talk 
about later.  As mentioned, NRC has identified over 4,000 
inspection findings in the 5 years of the new operation of the ROP 
program.  About 97 percent of those findings, 3,900, were for 
actions or failures NRC considered it was important to correct, but 
they were of low significance to overall safety operation.  The 
good news is that these findings have been corrected.  In contrast, 
12 of the findings that have occurred, or less than 1 percent, were 
the highest level of significance to safety, that still allows 
continuous operation at those plants.  All of these caused NRC to 
immediately inform the public and increase the levels of inspection 
in oversight.  Some of these are still outstanding 3 and 4 years 
later, due to the significance of the finding or the time it's taken to 
resolve them.
        Nothing has been found to date to warrant a shutdown of a 
nuclear power plant.  This possibility, however, was debated 
within the Commission during the early days at Davis-Besse as the 
plant was experiencing problems.  GAO, when it did its work at 
Davis-Besse, told the NRC that we thought that their procedures 
for knowing when to shut a plant down should be revised.  Overall, 
the ROP process has worked to subject more than three-fourths of 
the Nation's 103 operating plants to some oversight level beyond 
the regular baseline inspection over the last 5 years.  
        When we issue the report later this September, it will give good 
marks to what appears to be good quality inspections being 
performed by regional and on-site inspectors, and that NRC is 
being responsive to independent reviews and feedback from 
stakeholders like GAO.  The new risk process based on our 
assessment is better focusing its current inspections on areas that 
are most important to safety, and NRC is showing willingness to 
continuously improve.  
        One significant shortcoming in the ROP is that it is not as 
effective as it could be in identifying early indications of 
deteriorating safety cultures within the plant before problems 
develop.  Clearly, safety culture attributes, such as attention to 
detail, adherence to procedures, and effective, corrective, and 
preventive actions have a significant impact on safety 
performance.  The findings of Davis-Besse showed this.  
        Although somewhat slow to act, NRC is beginning to get the 
safety culture worked into the oversight process, even though it's 
somewhat controversial as we talk about it today.  There is 
pushback from the commercial nuclear industry about its 
workability.  Having a regulatory body, such as NRC, getting into 
issues that have traditionally been viewed as the purview of the 
licensee such as maintaining a safety-conscious work environment, 
human performance, and problem identification and resolution can 
be viewed by some as adding undue subjectivity to the NRC 
oversight as a regulator.  On the other hand, providing NRC better 
tools to address safety culture to detect deteriorating safety 
conditions, such as existed at Davis-Besse, before an event occurs 
can be a positive thing.  GAO's conclusion is that the evidence 
says that NRC needs to do safety culture reviews.  
        The verdict is still out as to whether they can do that or not.  I 
will stop here and say that NRC is devoting considerable effort to 
its oversight activities.  The current and changing process to GAO 
appears logical, well structured, and rigorous.  This does not mean 
that the NRC process is perfect.  NRC's safety culture may be the 
most important improvement in the future ROP program.  As we 
complete our work, we will be examining whether NRC needs to 
do more, and we think there are some areas of improvement in 
how information on how well nuclear power plants are operating 
safely can be presented to the public and other stakeholders in a 
more understandable manner, and we look forward to issuing our 
report in the next few months.  Thank you, Mr. Chairman.  
        MR. WHITFIELD.  Thank you, Mr. Wells.  
        [The prepared statement of Jim Wells follows:] 



PREPARED STATEMENT OF JIM WELLS, DIRECTOR, NATURAL 
RESOURCES AND THE ENVIRONMENT, GOVERNMENT 
ACCOUNTABILITY OFFICE

 

        MR. WHITFIELD.  At this time, Mr. McGaffigan, you are 
recognized for your 5 minutes.
        MR. MCGAFFIGAN.  Thank you, Mr. Chairman.  It is a pleasure 
to appear before you today on behalf of the Nuclear Regulatory 
Commission to discuss the Reactor Oversight Process.  I should 
say at the outset, I find myself in almost total agreement with 
almost everything that Mr. Wells said.  So you won't see a lot of 
disagreement today.
        When Chairman Diaz and I came to the NRC in 1996, our 
Reactor Oversight Process needed serious attention.  It was not as 
transparent or risk informed as it could be, and the watch list of 
problem plants, which I think grew to as many as 13 plants, did not 
integrate the results of performance indicators, although we had 
performance indicators.  The process was criticized by the public, 
by the industry, and as Mr. Wells just added, by the Commission 
itself.  
        Therefore, the Commission unanimously decided to develop a 
new process that would be better than the one the staff was using, 
and we decided to involve the industry and other stakeholders in 
the development of the process from its very beginning.  The new 
process was piloted in 1999 and was fully implemented in April of 
2000.  Since implementation, we have continued to improve the 
process by incorporating lessons learned from our experiences.  
We know we're not perfect, and we know we have a long way to 
go to achieve an even better product.  The Commission believes 
that the Reactor Oversight Process is one of the NRC's most 
important achievements over the last 10 years.  
        I have a few view graphs up there, and they're in my 
testimony.  There are five columns in an Action Matrix.  That's the 
viewgraph on the left.  We have no plants in the far right, or 
unacceptable performance column, at the current time.  We have 
89 of 103 plants in the far left licensee response column.  Every 
quarter we produce an updated summary that is two clicks away 
from our home page for every plant in America.  We happen to 
have the Seabrook plant up there.  I guess we thought 
Congressman Bass might be attending.  And you can see the 
performance indicators and the inspection findings for that plant 
and for all 103 plants are at our Web page, and you can click on 
that and understand what the inspection findings were for that plant 
during that quarter, and you could also go back to previous 
quarters.  
        So we have constructed a program that we're very proud of in 
terms of its transparency.  I would contrast it to, say, the FAA's 
program.  Mr. Stupak's plane, he probably could have gotten on 
time-data from FAA if he had clicked on their Web page for 
whatever airlines he was taking back here today.  He would not 
have any data about the maintenance on that plane.  This industry 
is unique in having data on maintenance and every aspect of these 
plants, other than security, very publicly available, and we're very 
proud of that.  
        The performance indicators and inspection findings determine 
what level of oversight a plant receives.  You receive more 
oversight as you move down the columns.  Very, very 
infrequently, we'll make a deviation from the so-called Action 
Matrix and do more or less inspections at that plant.  But most of 
the time, it's to do more.  Seven out of nine times during the 6 
years, we've made numerous improvements to the Reactor 
Oversight Process.  The three most important recent ones are the 
safety culture change that's going to be implemented on July 1 that 
Mr. Wells referred to, a Mitigating Systems Performance Indicator 
that is going to give us deep insight into the performance of 
mitigating systems at these plants, and we're going to have several 
white findings in the first quarter.  
        That's implemented this quarter, and the data will become 
available in July.  And the third is a very robust change to our 
engineering inspection program that was advocated by Chairman 
Diaz and that we believe is providing very good insights into the 
engineering aspects of the plant.  The Reactor Oversight Process 
will continue to improve and evolve.  It is our intention to take 
criticism from wherever it comes, Government Accountability 
Office, our Inspector General, the industry, the public, and try to 
make improvements based on that criticism.  
        As I say, we're going to continue to improve as we go forward.  
We do not set ourselves a perfection standard, but we set ourselves 
a very high standard, and we know that the process that we have 
today is far, far better than the process that Chairman Diaz and I 
inherited when we joined the Commission in 1996.  
        If I could just, for one moment, just say one thing, 
Mr. Chairman, about Chairman Diaz.  He couldn't be here today.  
He's in his last 11 days as Chairman of the NRC.  I happen to be a 
Democrat.  He happens to be a Republican.  But he has done an 
absolutely outstanding job during his 10 years working for the 
American people, and he deserves all the credit that he's going to 
get in these last 11 days in office, probably far more than he wants 
to get.  And it's been an honor serving with him.  Thank you, 
Mr. Chairman. 
        [The prepared statement of Hon. Edward McGaffigan follows:] 

PREPARED STATEMENT OF HON. EDWARD MCGAFFIGAN, JR., 
COMMISSIONER, U.S. NUCLEAR REGULATORY COMMISSION

        Mr. Chairman and Members of the Subcommittee, it is a 
pleasure to appear before you on behalf of the U.S. Nuclear 
Regulatory Commission (NRC) to discuss our Reactor Oversight 
Process (ROP).  When Chairman Diaz and I came to the NRC in 
1996, the reactor oversight process needed serious attention.  It 
was not as transparent or risk informed as it could be, and the 
watch list of problem plants did not integrate the results of 
performance indicators (PIs).  The process was criticized by the 
public and the industry.  Therefore, the Commission unanimously 
decided to develop a new process that would be better than the one 
the staff was using and to involve the industry and other 
stakeholders in its development.  The new process was piloted in 
1999 and fully implemented in April 2000.  Since implementation, 
we have continued to improve the process by incorporating lessons 
learned from our experience.  The Commission believes that the 
Reactor Oversight Process is one of NRC's most important 
achievements in the past 10 years.
        The ROP is a risk-informed process that focuses inspections on 
activities or areas that are most important to plant safety based on 
each plant's design and that increases the level of regulatory 
oversight as a licensee's performance declines.  The ROP requires 
that inspections be performed by NRC inspectors in seven 
fundamental areas that we call cornerstones, to measure plant 
performance and maintain safe plant operation.  These inspections 
routinely evaluate plant design, modifications, maintenance, and 
operations.  The ROP also uses PIs which are reported to the NRC 
each quarter by the licensees.  The NRC uses a four color system 
to characterize inspection findings and performance indicators.  
The color of an inspection finding or PI is determined by a defined 
significance determination process.  Green inspection findings or 
PIs indicate very low risk significance and therefore have little or 
no impact on safety.  White, yellow, or red inspection findings or 
PIs represent increasing degrees of safety significance.
        The performance indicators and inspection findings determine 
what level of oversight a plant receives.  For example, the NRC 
determines if a plant should be in a column requiring greater 
scrutiny of its performance.  If so, it receives more inspections.  A 
plant is assigned a column based on its performance as indicated 
by the inspection findings and PIs.  Therefore, the licensee's 
performance ultimately determines the column in which a plant is 
placed, it is not based on a subjective determination by NRC 
managers.  Currently 85 of the 103 operating reactors are in the 
lowest, or licensee response, risk column of the Action Matrix and 
are receiving the baseline inspections.  Eleven plants are in the 
second column, while 4 plants are in the third column, and 3 are in 
the fourth column; all of these 18 plants are receiving additional 
oversight.  No plants are in the fifth or unacceptable shutdown 
performance column.
        The NRC has focused on improving the transparency of the 
ROP to the public from its inception through stakeholder 
involvement and open communications.  The staff has used a 
variety of communication methods to ensure that stakeholders have 
access to ROP information and results, and have an opportunity to 
participate in the process and provide feedback.  The ROP web 
page provides the public with easy access to PIs and the latest plant 
assessment results and other useful information about the ROP.  
For example, these posters, which reflect the information posted on 
our web site, provide the latest information for the Seabrook plant 
in New Hampshire, including PIs and inspection findings, with 
links to the plant's inspection reports, assessment letters, and other 
ROP-related information.  The ROP has allowed us to provide the 
public better and more current information on the safety of the 
nuclear plants than is provided to the public for other elements of 
the infrastructure.  I should also add that the NRC staff conducts an 
annual meeting near each reactor to share the staff's assessment 
with the public.
        Very infrequently the NRC staff decides to modify the amount 
of oversight that is prescribed by the Action Matrix.  This has 
happened nine times in five years, and in seven of the nine cases, 
the staff has decided to do more than prescribed.   Any deviation 
from the ROP is first proposed by one of our four regional 
Administrators, and a public and well documented process is used 
to decide on the deviation.  Deviations from the ROP must be 
approved by the Executive Director for Operations, and the 
Commission is informed.  An example of a current deviation 
involves an increase in NRC oversight for the Salem and Hope 
Creek plants in the area of safety conscious work environment.  
The staff reviews each deviation to determine if changes to the 
ROP program are needed.  Deviations are described and their 
significance is explained during a public Commission meeting held 
annually.
        The NRC has made numerous improvements to the ROP since 
its initial implementation, many as a result of independent program 
evaluations and feedback from internal and external stakeholders.  
The inspection program and associated resources have been 
adjusted to better focus on risk-significant issues, with significant 
enhancements in the areas of problem identification and resolution, 
fire protection, safety culture, design engineering, and in-service 
inspections of safety-related components.  Some of these changes 
were based on lessons learned from the agency's experience with 
the Davis-Besse reactor vessel head degradation.  The timeliness 
and consistency of determining the significance of inspection 
findings have notably improved over the past several years due to 
program enhancements and an increased management focus.  The 
plant assessment process has been modified to improve its 
predictability, particularly in the treatment of cross-cutting issues 
such as human performance, old design issues, and plants with 
significant performance deficiencies.
        Three recent improvements to the ROP are the use of a new 
performance indicator, a greater focus on licensee safety culture, 
and a strengthened engineering inspection.  This quarter, we have 
implemented the Mitigating System Performance Index (MSPI), a 
risk-informed performance indicator that combines component 
reliability and availability with plant-specific probabilistic risk 
assessment (PRA) information to arrive at a single performance 
index for five important systems.  This performance indicator is 
complex, but it will give us real insights into key systems for 
mitigating accidents.  Most importantly, it has brought the entire 
industry to a needed level of quality for so-called Level 1, internal 
initiating event probabilistic risk assessments.  The MSPI replaced 
the safety system unavailability PIs, and licensees are scheduled to 
submit their initial data sets in July 2006.  The NRC has also been 
working with internal and external stakeholders to enhance the 
ROP to more fully address safety culture.  We have enhanced 
inspection procedures and developed processes to determine 
whether an assessment of safety culture is needed for plants with 
recognized performance deficiencies.  The NRC staff is nearing 
completion of this effort and plans to fully implement the 
enhancements on July 1, 2006.  The NRC recently undertook a 
substantial effort to strengthen its engineering inspection to 
increase the scrutiny of risk significant components and operator 
actions.  The new component-based inspection ensures that the 
selected components are capable of performing their intended 
safety functions by verifying that the design bases have been 
properly implemented and maintained.  The review includes 
evaluating the adequacy of the engineering calculations and 
analyses, the installed configuration, operating procedures, and 
testing and maintenance activities.  A similar process is used to 
inspect risk significant operator actions.
        The Reactor Oversight Process continues to evolve and 
improve.  The staff performs an annual self-assessment of the 
reactor oversight process to evaluate the overall effectiveness of 
the process.  In addition to the annual ROP self-assessment 
program, several independent evaluations have been performed 
since the beginning of the ROP to analyze its effectiveness and 
identify improvements.  The Office of the NRC Inspector General 
(OIG), the Office of Management and Budget (OMB), our 
Advisory Committee on Reactor Safeguards (ACRS), and a task 
force formed as a result of the Davis-Besse vessel head 
degradation have all performed evaluations related to the ROP.  
These evaluations have generally provided favorable results but 
have also suggested potential areas of improvement for the agency 
to consider.  The Commission welcomes these critiques.  For 
example, the OMB Program Assessment Rating Tool (PART) 
evaluation of the ROP in 2003, resulted in a score of 89 percent, 
which corresponds to an "Effective" rating of the management of 
the program.  The Government Accountability Office (GAO) in its 
work following the Davis-Besse vessel head degradation incident 
has suggested areas for improvement in the ROP and is currently 
performing an independent evaluation of the ROP.  The GAO has 
completed numerous staff interviews, reviewed ROP guidance 
documents, and performed a number of case studies over the past 
several months.  We expect to receive a draft report of the GAO's 
findings in the next month or so with the final report later this year.
        The NRC will continue to improve the ROP, increase its 
transparency and incorporate additional risk informed measures.  
Since I arrived at the Commission, the oversight process has 
become a much better system.  We welcome feedback from our 
stakeholders and believe that such feedback will assist us as we 
continue to refine the process.  
        I appreciate the opportunity to appear before you today, and the 
Commission looks forward to continuing to work with the 
Committee.  I welcome your comments and questions.

 

        MR. WHITFIELD.  Well, thank you, Mr. McGaffigan, and I 
appreciate you mentioning Mr. Diaz because I think we all believe 
that he's done a real good job and has made some significant 
improvements in the agency.  And we appreciate the testimony of 
both you and Mr. Wells.  
        In the second panel today, our witness is Mr. Paul Gunter, who 
is the Director of the Reactor Watchdog Project for the Nuclear 
Information and Resource Service.  And Mr. Wells, I wanted to 
ask you a question about in Mr. Gunter's written statement, he 
suggested that the NRC has cut corners in several of the safety 
cornerstones, including reactor safety, barrier integrity, physical 
security, and mitigating systems.  
Now, you've had extensive research of the Reactor Oversight 
Process and have been involved in this.  Do you agree with that 
statement?  Or do you feel like that's inaccurate?  
        MR. WELLS.  Mr. Chairman, I've not had the pleasure nor am I 
aware that my team has had any opportunity to look at the 
evidence that he's basing that statement on.  I can tell you that the 
GAO was aware of the old program that the NRC had.  It is clear 
that they had more inspection staff at the time.  It's clear that they 
had more findings than the current ROP program.  They were 
looking at different things, and sometimes that's what they were 
being criticized for.  They were more procedural or administrative 
in nature and maybe not as significantly related to the actual safety 
concerns.  It's clear that the existing ROP has fewer inspectors 
available, but from my understanding when I looked, they've been 
better targeted in terms of what they're looking at.  So I'm unable 
to really comment on his conclusion without seeing his evidence.  I 
would be glad to seek him out after this testimony.  
        MR. WHITFIELD.  Okay.  Mr. McGaffigan, Mr. Gunter also 
made the comment and he expresses serious concerns with NRC's 
Fire Safety Program.  Can you please explain the current status of 
the NRC's Fire Safety Program and also explain whether you 
believe the NRC has done everything they can do in this area.  
        MR. MCGAFFIGAN.  Sir, we put very significant resources into 
fire safety inspections.  We are, at the moment, in a transition, we 
hope, to a risk-informed fire safety regime based on National Fire 
Protection Association Standard 805, which is a consensus 
standard that we endorsed in a recent rulemaking.  We have, I 
believe, almost 40 plants lined up to try to utilize this new 
risk-informed program.  Fire protection has been problematic, in 
all honesty, since the early '80s, when the NRC adopted a fire 
protection rule 10 CFR 50.48, and then we were sued by the 
industry, and the only way the appeals court said the rule could go 
into effect was if we promised to hand out exemptions left, right, 
and center, which we did promise, and we did do.  
        It's a very problematic area at the current time, because every 
plant has its own fire safety basis.  So we're hoping, and we have 
invested our resources in recent years on making a transition to a 
risk-informed fire protection system to replace 50.48 based on the 
NFPA 805 standard.  
        MR. WHITFIELD.  Thank you.  Mr. McGaffigan, we have a list 
here of each of NRC's "yellow" and "red" inspection findings.  
And Mr. Wells, I guess, mentioned in his testimony, there are only 
a total of 12 such findings issued since the beginning of the 
Reactor Oversight Process.  But of the five "red" inspection 
findings, three were given to the Point Beach plant in Wisconsin 
relating to problems with the plant's auxiliary feed water pumps, 
and these problems date back as far as 2001, yet each of these 
"red" inspection findings at Point Beach is still open, meaning the 
underlying safety problems are unresolved.  
        So why has the NRC been unable to resolve these ongoing 
safety issues at Point Beach over the past five years?  
        MS. SCHAKOWSKY.  Mr. Chairman, before you get that answer, 
I am just wondering--I'm sorry, I have to run.  I'm wondering if I 
could have permission to submit these questions to be answered in 
writing.  
        MR. WHITFIELD.  Absolutely.  Without objection, absolutely.  
        MS. SCHAKOWSKY.  Thank you.  
        MR. WHITFIELD.  And thank you for coming to help us.  Thank 
you.  
        MR. MCGAFFIGAN.  Mr. Chairman, the Point Beach facility has 
been in the fourth column of our Action Matrix for several years 
now.  It is frustrating to the Commission and to the staff and I'm 
sure to the licensee.  We have closed out part of the issues.  There 
has actually been some internal controversy within the agency 
about closing out one of the issues recently, and we have a process 
for trying to resolve that.  The hope is that they are now on the path 
to resolving these issues.  There were engineering issues.  There 
were issues in terms of follow-up that have beset that plant for the 
last, as you say, 3 or 4 years.  
        It does not mean that the plant is unsafe.  It is much better 
today than it was when we first found these issues, but it has not 
yet been released.  Open means that they are not yet released from 
the additional oversight in our process.  They have not performed 
all the actions required under a confirmatory action letter that was 
issued to them, outlining what they had to do to close out all 
aspects of their "red" findings.  
        MR. WHITFIELD.  But I take it you don't see anything 
fundamentally wrong or systemically wrong with the oversight 
Reactor Oversight Process?  
        MR. MCGAFFIGAN.  We don't see anything fundamentally 
wrong.  At the last annual meeting we had last month, we talked 
about whether we needed to have licensees who were in this fourth 
column of the Action Matrix appear before the Commission, 
particularly licensees who had been in that for an extended period 
of time, and we've asked the staff to come back to us and for next 
year's annual meeting, that might be the extra push needed to 
encourage people to not spend too much time carrying out the 
corrective actions that we want them to carry out.  
        MR. WHITFIELD.  Now, Commissioner McGaffigan, the NRC 
recently briefed our committee staff regarding several ongoing 
physical security problems at the Turkey Point plant in Florida.  
And I understand that over the past few years, there have been a 
series of security infractions at Turkey Point with respect to 
security equipment.  For instance, in one case, a security guard at 
the site intentionally removed the firing pins from two weapons, 
rendering the weapons useless.  In another case, body armor was 
tampered with.  In another case, someone drilled a hole in a gas 
mask used by one of the guards.  And I was wondering if you 
might just comment on how the Reactor Oversight Process found 
what went wrong that allowed these chronic security problems to 
go undetected for several years before NRC became aware of the 
problem.  
        MR. MCGAFFIGAN.  Sir, the security part of our process is one 
where we have put enormous resources since 9/11.  We believed 
that we do find problems at these plants.  We are particularly proud 
of our force-on-force exercises in the post-9/11 environment that 
are enormously better, infinitely better than what we did before 
9/11.  I'm not totally comfortable discussing the details of Turkey 
Point in public because I don't want to put a finger on Turkey 
Point.  Turkey Point, we have said, that there was a very bad 
incident publicly in which we brought in the FBI with a hole 
drilled where it should not have been during a recent outage, but 
Turkey Point is not an outlier by any means.  I don't want to rate 
the plants in security space because we haven't done that since 
9/11 on our home page.  
        We have deleted the performance indicators, all of which were 
"green" forever.  They didn't provide useful information to the 
public, and we deleted the inspection findings.  What we have just 
recently done--and I will admit I was in the minority--is that we 
decided to put summary inspection reports about security findings 
onto the Web page.  Just a summary, not the details.  And if there 
are greater than "green" findings, we will note that without noting 
the number or without noting what the exact nature of the security 
findings were.  For less than "green" findings--or for "green" 
findings, we will simply note that there were "green" findings and 
again, not discuss the details.  So I'm not comfortable getting into 
security details.  We don't want to help terrorists target any 
particular plant or know anything that is current information about 
any security deficiency at one of our plants.  
        MR. WHITFIELD.  And this looks like maybe some disgruntled 
employee or whatever.  I won't speculate on it.  But I think overall, 
this GAO report was quite positive, and I think you all should be 
commended for the great progress that you're making.  Obviously, 
any infraction or a problem in this area is something we have to be 
quite concerned about, but I appreciate it.  My time has expired, 
and I thank you for your hard work.
        I recognize the full committee Chairman, Mr. Barton from 
Texas.  
        CHAIRMAN BARTON.  Mr. Chairman, I'm actually supposedly 
chairing another meeting right now.  So I just came to show 
support for the hearing.  I think the reports that have come out are 
generally favorable.  I share some of the concerns some of the 
watchdog groups do, especially on anti-terrorist security.  I think 
we still need to be vigilant there, but we appear to be addressing 
that.  
        MR. MCGAFFIGAN.  Sir, the amount of resources that we're 
putting into security today is a large factor of what we put in 
before 9/11, and we believe that we have excellent force-on-force 
exercises that we're now carrying out once every 3 years at every 
site, and we're getting deep insights, we're finding problems, and 
people are fixing them before we leave the site.  I don't want to go 
into the details, but we are finding problems, and we're fixing 
them.  
        CHAIRMAN BARTON.  I guess I should give the other two 
witnesses an opportunity to comment on that.  
        MR. WELLS.  We have been active in reporting on the NRC 
security program in both classified and unclassified reports.  
Clearly NRC, I would agree, has expended a tremendous amount 
of resource and has come a long way in terms of testing the 
security at our commercial nuclear power plants, but I too would 
share some interest and concern that the NRC continue to seek 
ways to inform the American public about the types of activities 
that are underway and the types of activities that exist to help 
improve the public's perception about the quality of security that 
exists at our nuclear power plants.  We have shared 
recommendations with the NRC to look at ways in which more 
information can be made available to the public and still protect 
security concerns.  We think NRC could still do a better job at that.  
        CHAIRMAN BARTON.  Is she with you?  
        MR. WELLS.  Yes.  
        CHAIRMAN BARTON.  Thank you, Mr. Chairman.  
        MR. WHITFIELD.  Thank you, Mr. Chairman.  Dr. Burgess.  
        MR. BURGESS.  Thank you, Mr. Chairman.  Mr. McGaffigan, if 
I could just ask you a question on the force-on-force exercises, and 
if it is information that you can't tell us, then just so indicate.  But 
on a force-on-force exercise, are all sides aware that these 
exercises are happening?  
        MR. MCGAFFIGAN.  Yes, sir.  We have to.  We are criticized 
for giving too much lead time to the licensees.  We have tried to 
cut that back, but we have to conduct an exercise at one of these 
sites, say, South Texas or Comanche Peak, the licensee has to have 
enough lead time so that they can have two sets of security guards 
there.  One protecting the plant.  One armed with so-called MILES 
gear, laser target designator-type gear to play in the exercise.  So 
they have twice the normal security force there for the exercise.  
We are increasingly doing night exercises because that would be 
the time when the plant might be more vulnerable, if you were a 
terrorist, you might have less to worry about in terms of being 
identified as you approach the plant.  So we give them about 8 to 
10 weeks notice.  They put together their plans.  We table top with 
them.  We have some ideas for how to improve the table top aspect 
by bringing in something called JCATS, which is used by the 
military, which we're hoping to pilot soon.  Joint combined arms 
tactical simulation that's used by--Lawrence Livermore is the 
keeper of that software.  
        We have vastly improved the quality of the attacking force that 
we use.  They are professional now.  We used to have retired state 
policemen or retired security guards from other plants serving as 
the attacking force.  We have a professional attacking force today.  
They are under NRC's supervision.  We have a very qualified 
government contractor who comes in and helps us design the 
attacks that we use.  The typical exercise has three attacks on each 
of three consecutive evenings, Tuesday, Wednesday, Thursday 
typically.  And we exploit where our experts believe the 
weaknesses in that plant's security strategy are.  
        And most of the time, the vast majority of the time our 
attacking force is repelled.  In some cases, the attacking force is 
successful in reaching target sets, and we don't want that to happen 
but very, very infrequently.  But the vast majority of the time, I 
will tell you--we're working on an annual report at the current 
time, Mr. Chairman, Mr. Burgess, that will summarize last year's 
results of force-on-force exercises, and that should be available to 
the Congress next month.  We're not going to identify individual 
plants, but we will tell you what we found as a general matter, and 
we will tell you examples of the sort of things that we did find and 
that we did improve as a result of the exercises.  
        I will give you one example.  We did this in a closed session 
that Mr. Wells and I were at recently.  I'm not going to name the 
site, but this particular site had decided to use an armored 
personnel carrier as part of its protective strategy.  That's a pretty 
bad thing in the hands of a terrorist adversary.  And unfortunately, 
the adversary managed to get control of the armored personnel 
carrier for reasons that I won't go into now, but that will never 
happen again.  The licensee now understands why it cannot have 
the armored personnel carrier, which is theoretically a good idea, 
located where it was.  They were using it for owner-controlled area 
patrols outside the protected area.  They are never going to allow 
that armor personnel carrier to be overwhelmed again and seized.  
        MR. BURGESS.  I hope not.  
        MR. MCGAFFIGAN.  Yeah.  
        MR. BURGESS.  We've had a lot of discussion here in this 
committee about the issue of cyber security.  Can you address what 
you're doing in that realm?  
        MR. MCGAFFIGAN.  We have a program that we have worked 
out with the experts and with the industry itself.  The Department 
of Homeland Security is very supportive of it.  They have a draft 
nuclear sector security plan out for public comment at the current 
time that has cyber security and whether the industry implements 
fully pursuant to the NRC guidance in cyber security as one of the 
metrics that they're proposing.  Our plants are not particularly 
vulnerable to cyber security problems currently because all of the 
safety systems are generally analog and separated.  They're not 
accessible.  Some things like, you know, the grid--the 
interconnection between the plant and the grid are accessible 
because they have to be--but a terrorist, the plants are not 
particularly susceptible to cyber security, and we have, we think, a 
sound program that if fully implemented by the industry will 
preclude problems with cyber security.  
        MR. BURGESS.  I don't know whether I should ask this of 
Mr. Wells or Mr. McGaffigan, but this list that the Chairman 
alluded to earlier under the "yellow" indicator at Indian Point II, 
four of seven operator crews failed to pass annual license 
requalification exams.  That, to me just as a layperson, that's a 
little startling.  Are we taking steps to address that and correct that?  
        MR. MCGAFFIGAN.  Sir, those steps have been taken a long 
time ago.  If they don't pass, they don't run the reactor.  We have a 
very vigorous program both of initial qualification and 
requalification for all of our operators.  They all have to have an 
NRC license to operate a power reactor.  We take that very 
seriously.  The industry takes it very seriously.  
        MR. BURGESS.  But you had a 50 percent failure rate according 
to this.  
        MR. MCGAFFIGAN.  One plant.  One plant that was in trouble, 
as you can see above, for other reasons in the same time period, 
and that plant also has undergone a change in ownership since that 
time period.  Entergy Corporation now runs that plant.  Indian 
Point II in 2001 was--I forget whether it was Con Ed or NYPA, I 
always got them mixed up, New York Power Authority--the 
Consolidated Edison was then running Indian Point II, and 
Entergy, which it runs a fleet of nuclear plants, holds itself to a 
very high standard, is now in charge there.  
        And you know, as a general matter, I personally believe that 
the consolidation that has taken place in the industry, getting rid of 
people like Con Ed and NYPA and Boston Edison at Pilgrim and 
lots of other folks who were single-unit utilities back when I joined 
the NRC and having them instead now be part of large fleets run 
by the Exelons and Entergys and Dukes and Constellations, it has 
been a huge step forward in safety.  These folks are serious.  
They're committed to the nuclear business.  When the CEOs of 
some of those former firms used to come into my office, you could 
tell that they were just figuring out how to exit from the nuclear 
business, and they sometimes provided resources to the staff, 
commensurate with their desire to not be in the nuclear business.  
The new folks provide resources that are needed to maintain the 
plant in a highly safe condition.  
        MR. BURGESS.  It seems like whenever there's an incident or an 
accident, it wasn't just one event that caused it but a chain of 
events, and the Navy's been so successful with their nuclear 
submarine program within their culture of safety that just will 
accept no deviation.  I just wondered if we would be better served 
if we sought to achieve that high a safety standard.  Now, 
Mr. Wells, you point out that the NRC, over 5 years has over 4,000 
inspections and 97 percent of these were considered of low 
significance to the overall safe operations of the plant.  And in fact, 
if we have such a low level of findings, is it because the plants are 
doing a good job or we're not looking hard enough?  
        MR. WELLS.  Could be both.  
        MR. BURGESS.  Yeah.  And therein is part of the problem.  And 
that's when it wasn't part of this committee, but it's part of the 
investigation for the space shuttle disaster 2 years ago, reviewing 
the nuclear submarine program in the Navy, again, they've 
compiled a remarkable safety record since 1963, and one that 
they're rightly very proud of, and it stems from an unwillingness to 
accept any deviation, any deviation from standard.  And I just 
wonder if our Nuclear Regulatory Commission should achieve to 
strive for that same high standard.  
        MR. WELLS.  Mr. Congressman, you know, my first reaction is 
that clearly, we've heard debate within NRC as well as in the 
industry.  The industry itself talks a lot about excellence and a lot 
of their inspections are designed to excellence, which is a little 
different than what you were talking about in the Navy program, 
even within the NRC circles, they're talking about the safety 
culture, which, in their mind, is a little different definition than 
excellence.  Clearly the results that we've seen, the three plants 
that are in the highest level of safety oversight, the four plants that 
are in the second highest level of oversight, and the 11 plants that 
are currently in increased levels of oversight, in each and every one 
of these plants there are issues relating to repeating and recurring 
type of events, and repeating and recurring examples where 
corrective action has not been as timely or corrected the first time.  
So there seems to be a theme across the industry in terms of what 
causes some of these plants to be less good performers than other 
plants, and it seems to be this cross-cutting environment where 
there's a safety culture out there that they're not, in fact, doing the 
types of things that maybe you've experienced and seen in the 
Navy program.  
        MR. BURGESS.  Mr. Chairman, this is an important aspect.  I 
hope this is not the last time we'll visit it.  With that, my time's 
expired.  I'll yield back.  
        MR. WHITFIELD.  Thank you, Dr. Burgess.  And one other 
comment I would make, Commissioner McGaffigan, I touched on 
this earlier about the Reactor Oversight Process, but I will just ask 
you in closing, are you confident today yourself as a commissioner 
that this Reactor Oversight Process can proactively identify 
emerging safety issues like the one at Davis-Besse before similar 
major safety problems occur?  
        MR. MCGAFFIGAN.  Sir, I don't think I can honestly answer 
that in the affirmative.  I think that's too high a standard for a 
program.  Will we ever make the Davis-Besse mistake again?  No.  
But the problem is we do not have a leading indicator of bad 
performance.  
        When I first came to the Commission and we were designing 
the Reactor Oversight Process, Mr. Edward Jordan, who was one 
of our most senior staff and had been with us since the day the 
NRC was created, gave us new commissioners a lecture about 
leading indicators, and the then-two-decade-plus effort by the NRC 
staff to find leading indicators and to find ways to get ahead of 
problems; and every time we find one, or we think we find one and 
we pilot it, we find out it's a leading indicator of both good and 
bad performance.  
        So we don't have a magic indicator.  Do we have the best 
program that human beings can design at this stage?  Yes, I will 
affirmatively answer that.  But will we always be ahead of 
degrading performance?  I think that is a standard that a human 
institution is probably not going to achieve.  Are we doing all we 
can to try to achieve it?  Yes.  But I cannot promise you there will 
not be another incident in the future where we get surprised.  
We're doing all we can to prevent it, but I cannot promise you that 
the system is infallible.  
        MR. WHITFIELD.  Well, thank you all very much.  We 
appreciate your being here.  We appreciate your testimony.  And as 
I said earlier, the GAO report on this was generally positive with 
some areas of concern, obviously.  But we look forward to 
maintaining contact with you as we continue efforts to improve 
nuclear safety in the country.  So with that, you all are dismissed.  
        At this time I'd like to call up the second panel, which consists 
of one person, and that is Mr. Paul Gunter, who is, as I said, 
Director of the Reactor Watchdog Project for the Nuclear 
Information and Resource Service.  
        Mr. Gunter, it's good to see you this afternoon.  We appreciate 
your being here.  
        MR. GUNTER.  Thank you very much.  
        MR. WHITFIELD.  As you know, in Oversight and 
Investigations, we take testimony under oath.  And do you have 
any difficulty of testifying under oath today?  
        MR. GUNTER.  I do not.  
        MR. WHITFIELD.  And do you have legal counsel with you?  
        MR. GUNTER.  I do not.  
        MR. WHITFIELD.  Thank you, Mr. Gunter.  You are now under 
oath, and I would recognize you for your five-minute opening 
statement.  Thank you.

TESTIMONY OF PAUL GUNTER, DIRECTOR, THE REACTOR WATCHDOG PROJECT, NUCLEAR 
INFORMATION AND RESOURCE SERVICE  
  
        MR. GUNTER.  Good afternoon.  My name is Paul Gunter.  I am 
director of the Reactor Watchdog Project. 
        MR. WHITFIELD.  Do you have your microphone on, 
Mr. Gunter?  
        MR. GUNTER.  I believe it is on.  Is it on now?  It's on now.  
Thank you.  
        I want to thank you for the opportunity to share with you today 
some of the public interest community's concerns and insights 
with the Nuclear Regulatory Commission's current Regulatory 
Oversight Process.  Whether you are for or against nuclear power, 
we can all agree that safety and security must be regarded as top 
priorities at all of the Nation's atomic power plants.  While the 
new Reactor Oversight Process represents an improvement over 
the old systematic assessment of licensee performance, NIRS does 
not have confidence that this latest version is being fairly applied 
to hold the public safety and security in the highest regard.  The 
public is concerned with evidence that the regulatory agency is 
cutting corners at safety and security cornerstones under the new 
process, particularly in the areas of assessment, inspection and 
enforcement.  In March 2002, the Davis-Besse nuclear power 
station 20 miles outside of Toledo had not one greater than "green" 
finding when the worst reactor safety condition in the United 
States since Three Mile Island accident was discovered.  The 
public became acutely aware with the discovery of the severely 
corroded hole in the head of the reactor pressure vessel that a lack 
of greater than "green" finding under the new oversight process 
does not necessarily equate to an assurance of safety.  The NRC 
technical staff, in fact, had identified a potentially significant 
safety issue at Davis-Besse where six of the seven operating 
Babcock & Wilcox reactors had received inspections identifying 
cracking in susceptible material that fabricated the control rod 
drive mechanism penetration sleeves.  
        Davis-Besse was the only other Babcock & Wilcox reactor not 
inspected.  Using its regulatory guidance, the NRC technical staff 
quantified the uncertain but growing risk of continued operation of 
Davis-Besse and found the risk to be unacceptable.  An order was 
drafted and finalized in November of 2001 by the staff of the 
Nuclear Reactor Regulation to shut down the reactor in December 
2001 for a safety inspection of the reactor vessel head.  However, 
the final order was never issued.  Instead, according to the NRC 
Office of Inspector General report, quote, "during its review of the 
potentially hazardous condition at Davis-Besse, the NRC staff 
considered the financial impact to the licensee of an unscheduled 
plant shutdown" which "was contrary to the goal of NRC bulletin 
2001-01 to have at-risk reactors conduct timely inspections to 
ensure that NRC regulatory requirements related to reactor coolant 
leakage were met."  
        The OIG went on to state that, "with respect to Davis-Besse 
specifically, OIG reviewed a November 21, 2001 internal NRC 
memorandum related to a discussion between the nuclear reactor 
regulation director and First Energy Nuclear Operating 
Corporation president.  The document conveyed that the NRR 
director had spoken to FENOC president and was aware of the 
licensee's financial concerns pertaining to an unscheduled 
shutdown.  According to the memorandum, the FENOC president 
told the NRR director that the impact of shutdown prior to 
February 2002 would be significant, and Davis-Besse would be 
better positioned for a shutdown in February because of the 
availability of replacement fuel.  The FENOC president confirmed 
to OIG that this discussion took place."  
        The NRC order was pulled.  Moreover, the OIG reported that 
"NRC appears to have informally established an unreasonably high 
burden for requiring absolute proof of a safety problem versus lack 
of reasonable assurance of maintaining public health and safety 
before it will act to shut down a power plant.  The staff articulated 
this standard to OIG as a rationale for allowing Davis-Besse to 
operate until February 16, 2002, even in light of information that 
had strongly indicated Davis-Besse was not in compliance with 
NRC regulations and plant technical specifications and may have 
operated with reduced safety margins."  When the reactor was shut 
down in February 2002, not only did the licensee find cracking in 
the identified trouble spot but corrosive reactor coolant had been 
leaking through a crack over an extended time period and eaten a 
cavity into the reactor vessel through 6 3/4 inches of carbon steel.  
        A Federal laboratory study postulated that if a reactor 
continued to operate for as little as 2 additional months, the reactor 
pressure vessel may have ruptured during operation.  To date, there 
has been not a more compelling case for shutting down a reactor 
for safety-related inspections under any NRC regulatory oversight 
process and, in this case, occurred under the new oversight 
process. 
        A NRC lessons-learned task force was formulated to address 
the many mistakes that led up to the near miss accident at 
Davis-Besse and looked extensively at how to avoid similar 
accidents in the future. 
        However, the task force leaves one glaring omission 
unaddressed and unanswered in its mission:  how in order to shut 
down Davis-Besse for safety inspections based on the agency's 
technical staff's risk informed and study judgment was canceled 
subsequent to the meeting between NRC senior management and a 
Davis-Besse executive officer. 
        Furthermore, the Davis-Besse task force still leaves open the 
issue of how the new oversight process informally requires, quote, 
"absolute proof of a safety problem," unquote, to shut down a 
reactor for safety inspections, while the same oversight process 
only requires reasonable assurance to start up that reactor.  
        In view of the identified public safety concerns and findings of 
the OIG report, an effective ROP should not set the bar so high for 
the burden of proof of the safety problem to be beyond the reach of 
timely regulatory action so as to first consider the financial 
interests of a licensee. 
        Similarly, NIRS' written testimony reflects that the public has 
no confidence in the security cornerstone for the ROP that is more 
determined by the regulators' assessment of how much the nuclear 
industry is willing to afford rather than a set of requirements of 
what is realistically needed to defend these potential radiological 
targets against existing threats.  
        My written testimony also looks at how under both the old and 
the new ROP widespread noncompliances with critical fire 
protection regulations for qualified fire barrier protection of the 
safe shutdown of the reactor in the event of fire have lingered 
unresolved for more than a decade, without resolution and without 
Federal enforcement action to require compliance.   In the 
meantime, more firebearing materials are emerging as inoperable.  
        Congressman Dingell stated the obvious at a 1993 Oversight 
and Investigations hearing on fire protection noncompliances and 
the NRC oversight process more than 13 years ago.  He said, "One 
must inquire whether a regulatory process which approves matters 
as a matter of courtesy is serving the public interest or, in fact, 
whether it is in fact a regulatory system.  The question is, how does 
this happen.  It results from a curious blind faith of NRC regulators 
and assurances made by utilities and by the industries they 
regulate."  
        Thank you. 
[The prepared statement of Mr. Paul Gunter follows:] 

PREPARED STATEMENT OF MR. PAUL GUNTER, DIRECTOR, 
REACTOR WATCHDOG PROJECT, NUCLEAR INFORMATION AND 
RESOURCE SERVICE

        The public must look to the United States Nuclear Regulatory 
Commission's (NRC) oversight process to establish and uphold the 
safety and security standard in the day-to-day operation and 
maintenance of nuclear power plants through a rigorous process of 
assessment, inspection and enforcement.  While the new Reactor 
Oversight Process (ROP) represents an improvement over the old 
Systematic Assessment of Licensee Performance, NIRS does not 
have confidence that this latest version is being fairly applied to 
hold the public safety and security in the highest regard.
        The public is concerned with evidence that the regulatory 
agency is cutting corners at safety and security cornerstones under 
the new process particularly in the areas of assessment, inspection 
and enforcement.
        In view of identified public safety concerns, an effective ROP 
should not set the bar so high for the burden of proof of a safety 
problem to be beyond the reach of timely regulatory action so as to 
first consider the financial interests of a licensee.
        The public has no confidence in a Physical Protection 
Cornerstone of the ROP that is more determined by the regulator's 
assessment of how much the nuclear industry is willing to afford 
rather than a set of requirements of what is realistically needed to 
defend these potential radiological targets against existing threats. 
        Under both the old and new ROP, non-compliance with critical 
fire protection regulations for the safe shutdown of the reactor in 
the event of fire has lingered unresolved for more than a decade 
without resolution and without federal enforcement action to 
require compliance.
        Congressman Dingell stated the obvious at that 1993 hearing 
on fire protection non-compliances and the NRC oversight process 
more than 13 years ago, "One must inquire whether a regulatory 
process which approves matters as a matter of courtesy is serving 
the public interest or, in fact, whether it is in fact a regulatory 
system.  The question is, how does this happen. It results from a 
curious blind faith of NRC regulators and assurances made by 
utilities and by the industries that they regulate."


	Good afternoon. My name is Paul Gunter. I am Director of the 
Reactor Watchdog Project for Nuclear Information and Resource 
Service in Takoma Park, Maryland. 
	I want to thank you for the opportunity to share with you today 
some of the public interest community's insights and concerns 
with the Nuclear Regulatory Commission's current Reactor 
Oversight Process.
	Whether you are for or against nuclear power, we can all agree 
that safety and security must be regarded as top priorities at all of 
the nation's atomic power plants. It is all the more true with aging 
reactors in the Post September 11th world where safety margins 
and the security bar must be regarded with the highest standard. 
	Today, the public must look to the United States Nuclear 
Regulatory Commission's (NRC) oversight process to establish 
and uphold that standard in the day-to-day operation and 
maintenance of nuclear power plants through a rigorous process of 
assessment, inspection and enforcement.  Unfortunately, we do not 
have confidence that the latest version of the oversight process is 
being fairly applied to hold our safety and security in the highest 
regard.
	Following the Three Mile Island accident in 1979, NRC 
developed the Systematic Assessment of Licensee Performance. A 
significant drawback to the SALP process was the fact that the 
program did not have a rating for unacceptable performance. 
Following a near-miss accident in 1985 at Ohio's Davis-Besse 
nuclear power station, NRC established a "Watch List" of reactors 
that warranted heightened safety-related regulatory attention.  
Public confidence steadily eroded under the old SALP where 
reactors like the two units at the Dresden nuclear power station 
outside of Chicago were allowed to remain on the agency's 
"Watch List" for eight years of an eleven year period all the while 
NRC management knew that reactor safety margins were 
significantly eroded. As the U.S. General Accounting Office 
pointed out, "NRC has not taken aggressive enforcement action to 
force the licensees to fix their long-standing safety problems on a 
timely basis.  As a result, the plant's condition has worsened, 
making safety margins smaller."  NRC senior management's 
repeatedly failure to address declining safety performance at 
nuclear reactors eventually emerged on the cover of TIME 
magazine. 
	In April 2000, NRC implemented the current reactor oversight 
process. In the view of industry the revision of the oversight 
process came about as the result of improved reactor performance 
and the need to remove overly burdensome regulatory oversight 
process.  In the view public interest and safety groups the revised 
process was necessitated by the repeated failure of NRC 
management to address documented and declining reactor safety 
performance.
	The obvious question today is whether or not we have a better 
reactor oversight process that accurately assesses reactor safety and 
security conditions, timely captures problems without gambling 
public safety and security and carries out enforcement actions to 
assure that problems are effectively remedied and not recurring.   
The Reactor Oversight Process is only as effective as the agency is 
able and willing to accurately assess safety and security problems 
and take timely enforcement action when violations occur and 
problems are not addressed.
	The public is concerned with evidence that the regulatory 
agency is cutting corners at a safety and security cornerstones 
under the new process particularly in the areas of assessment, 
inspection and enforcement.

Cutting Corners in Reactor Safety and the Barrier Integrity 
Cornerstone 
	In March 2002, the Davis-Besse nuclear generating station, 20 
miles outside of Toledo, Ohio had not one greater-than-Green 
performance indicator or inspection finding when the worst reactor 
safety condition in the United States since the Three Mile Island 
accident was discovered.  The public became acutely aware with 
the discovery of the severely corroded hole-in-the-head of the 
Davis-Besse reactor pressure vessel that a lack-of-greater-than-
Green finding under the new Reactor Oversight Process does not 
necessarily equate to an assurance of safety.  In fact, disturbing 
photographic evidence of extensive corrosion was available to the 
NRC oversight process when the reactor was allowed to restart in 
April 2000, the same month that the new ROP was initiated.
	The NRC technical staff had, in fact, identified a potentially 
significant safety issue at Davis-Besse where six of the seven 
operating Babcox & Wilcox reactors had received inspections 
identifying cracking in a susceptible material that fabricated the 
control rod drive mechanism penetration sleeves. Davis-Besse was 
the only other B&W reactor not inspected. An Order was drafted 
and finalized in November 2001 by the staff of Nuclear Reactor 
Regulation to shut down the reactor in December 2001 for a safety 
inspection of the reactor vessel head.  However, the final Order 
was never issued. When the reactor was shut down in February 
2002, not only did the operator find cracking in the identified 
trouble spot but corrosive reactor coolant had been leaking through 
the crack over an extended time period and eaten a cavity into the 
reactor vessel head through six and three quarter inches of carbon 
steel. A federal laboratory study postulated that if the corrosion 
rate had been allowed to continue for as little as two additional 
months the reactor pressure vessel may have ruptured. 
	A subsequent investigation by the NRC Office of Inspector 
General (OIG) concluded that "during its review of the potentially 
hazardous condition at Davis-Besse, the NRC staff considered the 
financial impact to the licensee of an unscheduled plant shutdown" 
and "was contrary to the goal of NRC Bulletin 2001-01 to have at 
risk reactors conduct timely inspections to ensure that NRC 
regulatory requirements related to reactor coolant leakage were 
met."   The OIG went on to state that "With respect to Davis-
Besse specifically, OIG reviewed a November 21 2001 internal 
NRC memorandum related to a discussion between the NRR 
(Nuclear Reactor Regulation) Director and the FENOC (First 
Energy Nuclear Operating Corporation) President. The document 
conveyed that the NRR Director had spoken to the FENOC 
President and was aware of the licensee's financial concerns 
pertaining to an unscheduled shutdown. According to the 
memorandum, the FENOC President told the NRR Director that 
the impact of a shutdown prior to February 2002 would be 
significant, and Davis-Besse would be better positioned for a shut 
down in February because of the availability of replacement fuel.  
The FENOC President confirmed to OIG that this discussion took 
place."   The NRC Order was subsequently pulled.
	Moreover, the OIG also reported that, "NRC appears to have 
informally established an unreasonably high burden of requiring 
absolute proof of a safety problem, versus lack of reasonable 
assurance of maintaining public health and safety, before it will 
act to shut down a power plant. The staff articulated this standard 
to OIG as a rationale for allowing Davis-Besse to operate until 
February 16, 2002, even in light of information that strongly 
indicated Davis-Besse was not in compliance with NRC 
regulations and plant technical specifications and may have 
operated with reduced safety margins." 
	In view of such public safety concerns, an effective Reactor 
Oversight Process should not set the bar so high for the burden of 
proof of a safety problem to be beyond the reach of timely 
regulatory action so as to first consider the financial interests of an 
operator. 
	The tendency for NRC to overlook significant safety warnings 
signs under the current ROP remains a concern to the public 
interest community today. 

Cutting Corners in Safeguards and the Physical Protection 
Cornerstone
	Along the same lines, the security bar for nuclear power 
stations should not be set so low so that Reactor Oversight Process 
performance indicators can not accurately assess the adequacy of 
reactor site security to defend against a terrorist attack and assess 
site vulnerabilities in need of timely resolution.
	For example, testimony given this year by the Government 
Accountability Office (GAO) before the Subcommittee on 
National Security, Emerging Threats, and International Relations 
in the House Committee on Government Reform, raises concerns 
about the Reactor Oversight Process and the Design Basis Threat 
(DBT), which sets the thresholds for adversary characteristics that 
reactor sites are required to be able to defend against with a high 
degree of confidence.   
	The GAO looked at the rigor of inspections and drills used to 
test security force readiness that determine the findings of the 
Physical Protection Cornerstone. GAO identified that NRC staff 
analyzed intelligence information in determining adversary 
characteristics including weapons that could be used in an attack as 
well as exchanged information with the Department of Energy, 
which has a DBT for comparable facilities that process or store 
radiological materials and as such are potential targets for 
radiological sabotage.  GAO found that "NRC generally 
established less rigorous requirements than DOE-for example, 
with regard to the types of equipment that could be used in an 
attack. The DOE DBT includes a number of weapons not included 
in the NRC DBT.  Inclusion of such weapons in the NRC DBT for 
nuclear power plants would have required plants to take 
substantial security measures." 
	The GAO report reflects the concern of a broad range of public 
interest groups that the DBT as measured under the current Reactor 
Oversight Process does not reflect staff recommendation as 
formulated from intelligence information. Instead, GAO found 
"the NRC staff made changes to some recommendations after 
obtaining feedback from stakeholders, including the nuclear 
industry, which objected to certain proposed changes, such as the 
inclusion of certain weapons. NRC officials said the changes 
resulted from the further analysis of intelligence information. 
Nevertheless, GAO found that the process used to obtain 
stakeholder feedback created the appearance that changes were 
made based on what the industry considered reasonable and 
feasible to defend against rather than on what an assessment of the 
terrorist threat called for." 
	The public has no confidence in a Physical Protection 
Cornerstone of the ROP that is more determined by the regulators 
assessment of how much the nuclear industry is willing to afford 
rather than a set of requirements of what is realistically needed to 
defend these potential radiological targets against existing threats. 

Cutting Corners in Reactor Safety and Mitigating Systems 
Cornerstone 
	As stated on the NRC website with regard to the Reactor 
Safety and Mitigating Systems Cornerstone "The objective of this 
cornerstone is to monitor the availability, reliability, and 
capability of systems that mitigate the effects of initiating events to 
prevent core damage. Licensees reduce the likelihood of reactor 
accidents by maintaining the availability and reliability of 
mitigating systems." 
	Fire is potentially one of the highest risk initiating events. 
NIRS has long been concerned with the regulatory oversight 
process and specifically the protection of electrical cables for 
control, power and instrumentation equipment necessary to safely 
shut down the reactor in the event of fire. A nearly catastrophic fire 
that burned for seven hours at the Browns Ferry nuclear power 
station in 1975 resulted in the promulgation of new requirements 
for NRC's fire code.  
	We remain concerned with the questionable adequacy of the 
Reactor Oversight Process for post-fire safe shutdown 
requirements, today.
	In 1992, NRC declared Thermo-Lag 330-1 fire barriers 
inoperable. Thermo-Lag 330-1 was then the most widely deployed 
fire barrier system used throughout the nuclear power industry.  An 
industry whistleblower had exposed that the fire barrier wrap 
system could not pass standardized industry fire tests and did not 
meet the fire endurance requirements for protecting safe shut down 
electrical cables from fire damage, specifically where redundant 
safe shut down electrical systems were co-located in the same fire 
zone and could be destroyed by a single fire.
	In March 1993, this Subcommittee held a hearing on "Fire 
Safety at Nuclear Power Plants" then chaired by Congressman 
John Dingell.  I attended that hearing on behalf of Nuclear 
Information and Resource Service with particular concern for 
public safety involving the inoperable fire barrier wrap system.
	Congressman Dingell stated at that hearing "This is what Yogi 
Berra might describe as dï¿½jï¿½ vu all over again."  As 
Congressman Dingell further stated, "The regulators, again 
appear to have exhibited some substantial failures in regulatory 
oversight, in passivity and in paralyses."  Congressman Dingell 
went on to say, "NRC accepted the utility's assurances, apparently 
without adequate scrutiny, and the material (Thermo-Lag 330-1) 
was installed in about 80 reactors across the country. The 
committee has received serious allegations that these result in 
substandard fire protection in those plants. The certifications 
continue to be accepted by NRC, in spite of the fact that NRC staff 
was given ample evidence of problems over a period extending 
over ten years." 
	The bogus fire barrier resulted in NRC staff reviews and 
repeated meetings for five more years with nuclear power plant 
operators and the industry lobby group, then Nuclear Utility 
Management and Resources Council (NUMARC) and now the 
Nuclear Energy Institute.  During that time, fire watches, as 
compensatory measures, were put in place for what would amount 
to more than six years at some sites despite the 1993 testimony by 
then Commissioner Ivan Selin before the same Subcommittee on 
Oversight and Investigations stating that fire watches were only 
intended for temporary durations of 6 to 9 months. "They don't 
expect them for 2 years fulltime," said Selin.  During that 
extensive period of non-compliance many operators came to 
agreements with NRC staff to bring reactor fire protection 
violations into compliance with the applicable fire code (10 CFR 
50.48 and 10 CFR 50 Appendix R III.G.2).  About two dozen units 
were finally issued NRC Confirmatory Action Orders in 1998 to 
come into compliance by 2000 because of their inability to provide 
an acceptable and timely corrective action program for the 
inoperable fire barriers. 
	In 2000, the NRC implemented the new Reactor Oversight 
Process which included a series of systematic inspections of 
licensees' safe shutdown capability.  A series of baseline fire 
protection inspections were conducted at reactor sites by NRC 
inspectors. During these baseline inspections, NRC inspectors 
discovered that many licensees had in fact not upgraded or 
replaced inoperable Thermo-Lag 330-1 fire barriers as agreed to 
NRC staff in their Thermo-Lag Corrective Action Programs and 
Confirmatory Action Orders.  Between 1998 and 2001, licensees 
that received NRC Orders sent NRC letters indicating completion 
of the ordered Thermo-Lag corrective action. To date, those Orders 
remain in effect, neither rescinded nor relaxed.  What has 
happened to the enforcement of those Orders under the Reactor 
Oversight Process?
	We now know that instead of complying with Thermo-Lag 
Action Programs and Confirmatory Orders, licensees widely 
substituted "operator manual actions" that were in large part 
unreviewed and unapproved by NRC staff. These industry self-
initiated manual actions allowed electrical circuits required under 
regulations as to be maintained free from fire damage to be 
sacrificed in the fire by taking no action on installing compliant 
fire barriers or establishing a minimum cable separation between 
redundant systems. The operator manual actions would instead 
send station personnel to the end piece of safety equipment and 
manually operate it or turn off spurious operations. The manual 
actions can be complicated, multi-tasked and require tools, ladders, 
key cards and even breathing apparatus to accomplish safety-
related functions under duress of fire and potentially even attack.  
Given the difficulty in predicting fire behavior, the manual actions 
might not be achievable.
   	Enforcement Discretion and non-cited violations for non-
compliances were put into place by NRC for unapproved operator 
manual actions.   In 2005, NRC initiated a rulemaking to codify 
operator manual action in lieu of coming into compliance with 
physical fire protection design features; rated and operable fire 
barriers and minimal separation requirements used in conjunction 
with detection and automated suppression. After failing to get an 
endorsement from either the nuclear industry or the public interest 
community, NRC abandoned the rulemaking effort in March 2006.
	NRC is now planning to accept "feasible and reliable" 
Operator Manual Actions as "temporary" compensatory actions 
(an additional three years on top of non-compliances going back to 
1992) for inoperable fire barriers and failure to provide minimum 
cable separation while licensees to submit a large number of 
exemptions from fire protection requirements and move to a 
voluntary risk-informed and performance-based fire protection 
system.  The public lacks confidence in such analytical fire 
protection over physical fire protection features. To offer one basic 
reason for this lack of confidence, fire protection is fundamental to 
the security infrastructure in protecting the public from 
radiological sabotage. Terrorism can neither be effectively risk-
informed or performance-based. 
        In the mean time, there is the recurrence of the Thermo-Lag 
"dï¿½jï¿½ vu all over again" with additional inoperable fire barrier 
system materials widely employed by the nuclear industry for 
protection of safe shut down electrical systems having been 
identified.   HEMYC and MT fire barriers, are now demonstrated 
to dramatically fail the same standardized fire tests and do not 
assure that safe shut down equipment can be maintained free from 
fire damage in the event of a significant fire at a U.S. reactor.  
NRC has set about to take regulatory action along the same paths 
as its 1992 discovery of inoperable Thermo-Lag barriers that 
remain an unresolved problem today under the new Regulatory 
Oversight Process. Given the unresolved nature of the problem 
created by inoperable Thermo-Lag, the public has little cause to 
have confidence that the current Regulatory Oversight Program 
will find closure any time sooner for HEMYC / MT fire barriers. 
Congressman Dingell stated the obvious at that 1993 hearing 
on fire protection and the NRC oversight process more than 13 
years ago, "One must inquire whether a regulatory process which 
approves matters as a matter of courtesy is serving the public 
interest or, in fact, whether it is in fact a regulatory system.  The 
question is, how does this happen. It results from a curious blind 
faith of NRC regulators and assurances made by utilities and by 
the industries that they regulate." 

        MR. WHITFIELD.  Thank you, Mr. Gunter.  
        Obviously, you have some real concerns about this process, 
and I would ask the NRC and the GAO in its written testimony 
point out that the NRC has a proactive approach to improving the 
reactor oversight process and several mechanisms in place to 
incorporate feedback from both external and internal stakeholders.  
        And I was just curious from your experience, do you provide 
feedback and give-and-take with the NRC about these issues that 
you find deficient?  Do you feel like you have an open dialogue 
with them or not?
        MR. GUNTER.  Yes, sir.  We have been involved in meetings, 
public meetings both with the staff and the Commission.  It 
remains a concern as to whether or not those meetings result in 
actions that we believe serve the public interests, particularly with-
-an example is in the area of fire protection--
        MR. WHITFIELD.  Right.
        MR. GUNTER. --where we have been in meetings for well on 
13 years with this regard.  And we remain concerned that the 
issues are not only not closed, and the lingering safety concerns, 
but we have more inoperable fire barriers emerging. 
        MR. WHITFIELD.  I have never met you, Mr. Gunter, before, 
and I am assuming that you are supportive of the use of nuclear 
energy; but your organization and you, personally, feel that there 
are some major safety issues out there that just have not been 
addressed to the way that you would like; would that be correct?
        MR. GUNTER.  No, sir.  We are openly opposed to the 
continued operation of nuclear power and its expansion.  This 
industry has had 50 years to prove itself, and it not only has not 
met the market tests, but it continues to raise growing safety 
concerns as well as nuclear waste and environmental concerns. 
        MR. WHITFIELD.  Okay.  You also point out that the public has 
no confidence in the physical protection cornerstone of the reactor 
oversight process.  So I am assuming that you feel like they are 
vulnerable to attack, that it is just inadequate, the protection in 
place is simply inadequate; is that right?
        MR. GUNTER.  There is the question, first of all, of design, and 
it is hard to suggest that all reactors carry the same vulnerability.  
They don't.  We have recognized that there are some sites that are 
more vulnerable than others, some designs more vulnerable than 
others.  And it also comes down to the question of how much 
security is enough and how much security is to be afforded, and is 
the industry willing to afford that, and is the agency in a position to 
enforce such levels of adequate security?  
        So there are many aspects to this that, you know, make it a 
Gordian Knot. 
        MR. WHITFIELD.  Okay.  We have a vote on the floor.  We are 
going to have three or four votes.  And rather than keeping you for 
the entire time, at this time I will recognize Mr. Inslee for any 
questions that he may have.  
        MR. INSLEE.  Thank you.  
        I just wonder, bottom line, how do you compare public safety, 
the status, from before the Reactor Oversight Process was put into 
place.  Better?  Worse?  The same?
        MR. GUNTER.  You know, it is difficult to measure if, in fact, 
the process is not picking up the significant safety issues.  Again, I 
go back to our concerns with the Davis-Besse finding that there 
were no greater than "green" findings, that everything was running 
along safely, supposedly, about three-sixteenths of an inch of 
stainless steel was bulging off the top of the reactor vessel head.  
        It raises significant confidence in the current oversight 
processes' ability to not only identify safety issues in a timely 
fashion, but for technical assessments to be translated into 
enforcement actions, which I think was a significant failing in the 
Davis-Besse issue.
        MR. INSLEE.  Thank you.  
        MR. WHITFIELD.  Is that all of your questions, Mr. Inslee?  
        Dr. Burgess, do you have any?  
        MR. BURGESS.  I'll submit them in writing. 
        MR. WHITFIELD.  All right.  Well, Mr. Gunter, I want to 
genuinely appreciate you being here today to express your 
concerns.  We do have your testimony, and I want to thank the 
other panel of witnesses again.  As I said, this is a very important 
area.  Nuclear energy does provide about 20 percent of the 
electricity produced in the U.S. today, and we do need to ensure 
the safety so that hopefully we can expand nuclear energy.  I know 
that is not where you all are coming from, but we can continue to 
have the dialogue and the debate, and thank you very much for 
being with us today.
        And with that, the hearing is adjourned.
        [Whereupon, at 5:15 p.m., the subcommittee was adjourned.]

RESPONSE FOR THE RECORD OF JIM WELLS, DIRECTOR, NATURAL 
RESOURCES AND THE ENVIRONMENT, GOVERNMENT 
ACCOUNTABILITY OFFICE

The Honorable Jan D. Schakowsky

1. Four years ago, the fifth most dangerous nuclear reactor 
incident in 25 years occurred at FirstEnergy's Davis-Besse 
plant.  The Reactor Oversight Process was already in place, and 
Davis-Besse was in the green with its ratings. The public 
obviously wasn't safe then.  Is there any guarantee that this 
type of incident wouldn't occur again?  Are we safer now than 
we were then?
         There is no question this event caught NRC and many 
by surprise.  The event did cause action and the 
industry and NRC thoroughly explored the causes, 
learned lessons, and NRC's ROP was improved.  It is 
not possible to guarantee that this type of incident 
won't happen again, but it is unlikely there will be 
another incident identical to that at Davis-Besse.  I 
think that NRC's oversight overall has improved as a 
result of the wake-up call that it got from such a serious 
incident.  
	 NRC's recent actions to assess and focus attention on 
safety culture should better provide early indications of 
declining plant performance.


2. Early this year, the Nuclear Regulatory Commission (NRC) 
staff raised questions about the effectiveness of the 
performance indicator program, saying that if all the results 
were "green," perhaps it didn't really measure anything of 
value. What is your position on the performance indicator 
program?
	 I would respond that we share NRC's and industry's 
concern that the existing performance indicators are 
less than perfect.  Performance indicators can be 
valuable because they provide objective measures that 
licensees can use for managing their plants.  
Performance indicators also focus attention on areas 
important to safety.  However, if measures are always 
green as they have been, you should question their 
value.  It's good that they are green if this means that 
licensees are performing well nearly all the time.  But 
there have been cases where performance indicators did 
not seem to accurately reflect performance (e.g. Davis 
Besse or the issue with warning sirens at Indian Point).  
We understand there are changes being made to 
improve these indicators in the future.    


3. Initially, NRC staff estimated that about 5 percent of the 
findings under the Reactor Oversight Process would be greater 
than green. But less than 1 percent have fallen into that 
category.  Does that mean all the reactors are safer than they 
were five years ago, or are the findings not measuring the right 
safety indicators?
	 It is true that the industry has logged a pretty impressive 
safety record over many years of operations and many 
issues related to safety have been corrected and 
improved.  Nevertheless, NRC has acknowledged that 
many indicators may need to be redesigned to serve as a 
better measure of performance.  In cooperation with the 
industry, NRC recently introduced one new key 
performance indicator, the mitigating systems 
performance indicator, and they intend to assess others 
as well.
	 At the nuclear power plant sites we looked at, we found 
that plant managers pay close attention to performance 
indicators and manage their plants so as not to exceed 
thresholds-that is, they stated they would take action 
to fix the issue well before the indicator exceeded the 
threshold.  In reality a lot is riding on well these plants 
perform, for example within the financial and 
shareholder community as well as the public 
perceptions of how safe these plants are.


4. At Davis-Besse, prior to the 2002 incident, the plant was all 
green, but there were serious problems under this new system.  
One of them was an overall poor safety culture.  But it has 
taken the NRC four year to make changes to the oversight 
process to address safety culture.  Why has it taken so long?
	 Our 2004 report, which analyzed the events at Davis-Besse, 
confirmed the findings that a poor safety culture played a 
major role in the unfortunate events that played out.  Based 
on what we found, as well as others, we recommended 
NRC take action to get involved.  We concluded their 
oversight should address safety culture issues.  I think it is 
fair to say NRC has been hesitant to become involved in 
areas related to plant management.  NRC officials told us 
for years that their role as the regulator was to regulate and 
not tell the industry how to run the plants.  Their view was 
safety culture perhaps crossed the line too far into 
operations of the plant. Also, subjective issues such as 
safety culture are difficult to incorporate into their objective 
processes under the ROP.  We think it is fair to question 
how quickly NRC moves forward to incorporate this 
change in oversight. 


5. You stated in your testimony that overall plant performance 
declines when there are ineffective corrective action programs, 
problems related to human performance, or complacent 
management.  How successful is the NRC in uncovering these 
kinds of "culture" problems?
	 The case of Davis Besse illustrated that the ROP failed in a 
sense, and did not have adequate tools for addressing 
declining safety culture.  The primary tool being used at the 
time was the identification of substantive cross-cutting 
issues.  NRC was struggling somewhat in consistently 
applying, identifying and watching these types of 
indicators.  As a result, the meaningfulness of these 
determinations did not necessarily result in any real 
consequences.  A weakness of the ROP was an underlying 
assumption that problems in these areas will be revealed 
through inspection findings.  As Davis-Besse illustrated, 
however, this assumption is not always valid.
	 NRC's new safety culture initiative should provide them 
better tools to assess plant safety culture, but officials 
acknowledge this initiative is only a first step, and further 
modifications to the ROP may be needed.


6. What is the Government Accountability Office's view of the 
new safety culture oversight process?
	 As we have testified, NRC's ROP is not perfect, but we 
believe it is getting better than it was when it was created in 
2000.  NRC's initial step to implement revisions or 
modifications related to monitoring safety culture within 
the plants is being met with resistance and a challenge to 
NRC's existing authority.  Even within the NRC there are 
varying opinions on how or if this will work.  It is an 
important step toward preventing future problems like 
those encountered at Davis-Besse.  But NRC is just starting 
its implementation and will need to carefully monitor this 
initiative to ensure that it is achieving the goals for which it 
was designed.


RESPONSE FOR THE RECORD OF HON. EDWARD MCGAFFIGAN, JR., 
COMMISSIONER, U.S. NUCLEAR REGULATORY COMMISSION

QUESTIONS FROM REPRESENTATIVE BLACKBURN:

QUESTION 1. Mr. McGaffigan, what advantage does a 
risk-informed, performance-based approach to 
fire safety have over the prior deterministic 
approach?

ANSWER:	
        The advantage that a risk-informed, performance-based 
approach offers is that it allows licensees to perform realistic 
assessments of the risks to the public due to potential fires at 
plants.  The results of these assessments enable the licensees to 
gain risk insights associated with specific fire protection issues and 
focus their resources where the most risk-significant issues exist, 
thereby improving the protection of the public health and safety.  
Additionally, the NRC staff may independently consider such 
insights to help focus its safety reviews and resources on the most 
risk-significant issues.   Consequently, a risk-informed, 
performance-based approach enhances both the NRC and its 
licensees' focus on safety, while simultaneously reducing 
unnecessary burdens.
        The deterministic Fire Protection Regulation 10 CFR 50.48, 
"Fire Protection," was first published in 1981, in the aftermath of a 
significant fire that occurred at the Browns Ferry Nuclear Plant in 
1975.  The NRC required a large number of nuclear plants that 
were already in operation or in advanced stages of construction in 
1981 to comply with the deterministic requirements imposed by 
this rule.  At that time probabilistic risk tools were not sufficiently 
mature to be used for this new rule, and some of the requirements 
imposed undue hardship that was not necessary to achieve the 
underlying purpose of the fire protection rule.  As a result, many 
licensees requested relief from certain of these new requirements 
using the NRC's exemption process under 10 CFR 50.12 "Specific 
Exemptions."  NRC staff then reviewed and approved about one 
thousand exemptions of specific requirements of the rule.  These 
reviews posed significant resource burdens on both the licensees 
and NRC staff, in most cases without commensurate safety 
benefits.
        The fire protection inspections continue to reveal additional 
findings, many of which have limited safety benefit, where 
licensees do not meet some of the deterministic requirements.  
Therefore, resolving these issues provides a very limited increase 
in safety while continuing to pose undue resource burdens on the 
staff and the licensees, and simultaneously diverting limited 
licensee and NRC staff resources from more safety significant 
issues.


QUESTION 2.	The NRC advisory committee on reactor 
safeguards state that only a few nuclear plants 
have full scope fire risk assessments. 

(A)	How many plants have this assessment? 

ANSWER:	
        Performance of a full scope fire risk assessment is not a 
regulatory requirement.  All operating reactors have performed 
evaluations of the risk associated with fires as a part of their 
response to Generic Letter 88-20, Supplement 4, entitled 
"Individual Plant Examination for External Events."  These 
assessments used conservative bounding assumptions in their 
analysis and identified the important factors that contributed to the 
risk imposed by fires.  Therefore, even though these analyses did 
not constitute full scope risk assessments for most licensees, they 
were of sufficient quality to identify "risk outliers," i.e., instances 
where the relative risks were high.  
        The NRC has not collected information on the exact number of 
plants that possess a full scope fire risk assessment.  However, to 
date 40 nuclear units have informed the NRC that they intend to 
adopt the performance-based fire protection rule, 10 CFR 50.48(c), 
"National Fire Protection Association Standard NFPA 805."  This 
performance-based rule is commonly referred to as the "NFPA 805 
Rule," since it endorses a standard developed by the National Fire 
Protection Association (NFPA) with a few exceptions.  Most 
licensees who have committed to adopt the NFPA 805 Rule, 
committed to perform Fire Probabilistic Risk Assessments (PRAs).

(B)	Does your ROP contain a requirement for 
nuclear reactors to have this assessment? 

ANSWER:					
        At the present time, there are no NRC requirements for nuclear 
reactors to have a full scope risk assessment and NRC 
requirements do not require a fire PRA specifically.  The ROP 
defines the NRC's inspection and assessment activities for nuclear 
reactors and does not impose regulatory requirements.


(C)	(If no) Why not, especially since the 
advisory committee says it is absolutely 
necessary as plants move to the risk-informed 
approach?

ANSWER:	
        The advisory committee's statement pertains only to those 
licensees who voluntarily adopt risk-informed alternatives to the 
current regulations, specifically, in reference to those licensees 
who plan to adopt the NFPA 805 rule (10 CFR 50.48(c)).
Licensees that adopt the performance-based alternative to the 
current deterministic requirement must use Probabilistic Risk 
Assessment (PRA) tools to justify changes to the plant.  The NRC 
staff plans to review the fire risk assessment capability of licensees 
that plan to adopt a performance-based alternative to the 
deterministic regulations, prior to granting their request to adopt a 
risk-informed, performance-based licensing basis for fire 
protection.


QUESTION 3.	It is my understanding that the NRC sent a 
generic letter to nuclear plants that use Hemyc 
and MT fire barrier systems to take corrective 
actions.

(A)	What is the status of compliance with this 
letter? 

ANSWER:	
        The NRC issued Generic Letter 2006-03, entitled "Potentially 
Nonconforming Hemyc and MT Fire Barrier Configurations," on 
April 10, 2006.  This Generic Letter requested licensees to inform 
the NRC whether they are in compliance with NRC's fire 
protection regulation 10 CFR 50.48, in light of the new 
information developed by the NRC during testing on the Hemyc 
and MT fire barrier systems' performance.  
        Under 10 CFR 50.54(f), all licensees are required to respond to 
NRC's request for information communicated via this Generic 
Letter.  All licensees have complied with the requirement to 
respond to Generic Letter 2006-03.


(B)	What penalties are available if they do not 
comply? 

ANSWER:	
        All plants have complied with the NRC requirements to 
provide responses per 10 CFR 50.54(f), to the Generic Letter.  
        Most licensees have informed us that they are in compliance 
with 10 CFR 50.48, primarily because they do not use Hemyc or 
MT fire barriers in their facilities.  However, some plants have 
declared their Hemyc and MT fire barriers inoperable in light of 
the new testing data developed by the NRC regarding the 
performance of these fire barriers.  Licensees may continue to 
operate in certain instances where noncompliances are discovered 
while such noncompliance are being corrected, as long as the NRC 
has reasonable assurance that the noncompliance conditions have 
minimal effects on public health and safety.  Since all plants with 
potential noncompliances have implemented compensatory 
measures, and informed us of their plans to take corrective actions, 
the NRC concluded that the plants may continue to operate until 
they re-establish compliance.  
        As such, currently the NRC has no plans to take any 
enforcement action.  The NRC plans to use its periodic fire 
protection inspections to ensure that the licensees are 
implementing and following their corrective actions.


(C)	What is the likelihood of a fire causing a 
nuclear plant to meltdown or causing core 
damage if the plants are using these inadequate 
fire barrier systems? 

ANSWER:	
	The NRC staff has assessed the likelihood of a fire causing a 
nuclear plant meltdown or core damage of plants using these fire 
barrier systems and determined that the likelihood is low for 
several reasons. 
	As a 1-hour rated fire barrier, Hemyc is installed only in fire 
areas where fire detection and automatic fire suppression systems 
are present, or in fire areas where the licensee has previously 
obtained an exemption from the automatic fire suppression 
requirement because such suppression was deemed unnecessary 
(for example in areas where there is a negligible potential for fire 
due to low or no combustible material or ignition sources).  The 
Hemyc fire barrier systems used at these plants constitute just one 
of several layers of defense-in-depth (fire detection, manual 
suppression, and automatic suppression) designed to protect the 
plant in the event of a fire.
	For MT fire barrier systems, which consist of several layers of 
materials, the outermost being Hemyc, the NRC staff also 
concluded that the risk was low.  In confirmatory fire testing, the 
MT fire barrier system demonstrated nearly an hour of protection 
in every test run.  As such, the NRC concluded that the MT fire 
barrier systems would provide sufficient time for a fire brigade to 
reach and actively suppress the fire before cable damage is 
expected to occur.
	The NRC's tests exposed the Hemyc and MT material to 
higher temperatures and more rapid temperature increases than are 
expected in fire areas where Hemyc and MT fire barrier systems 
are installed.  The NRC considered the safety margins between the 
test and actual conditions to be sufficient such that the installed 
Hemyc and MT fire barrier systems are unlikely to be challenged 
at a level where failure sufficient to cause cable damage would 
occur.


QUESTION 4.	What collaborations has NRC had with other 
countries in developing an adequate fire risk 
assessment of nuclear plants?
ANSWER:	
	The NRC is actively involved in a number of national and 
international fire risk assessment programs.  On the international 
level, the NRC is a member of the Organization for Economic Co-
Operation and Development (OECD) Nuclear Energy Agency 
(NEA) Fire Incident Records Exchange Project.  In this project, the 
NRC is partnering with members from Canada, Finland, France, 
Germany, Japan, Spain, Sweden, Czech Republic, Netherlands and 
Switzerland to develop an international nuclear power plant (NPP) 
fire event data base.  This data base will provide insights on fire 
frequency information and insights regarding international NPP 
fire experience.
	The NRC is an active member of the International 
Collaborative Fire Model Project (ICFMP) with members from the 
United Kingdom, Germany, France, and Finland.  The goal of this 
working group is to exercise the current fire modeling tools and 
determine their merit for use when performing risk assessment of 
NPPs.  The NRC, in collaboration with the Electric Power 
Research Institute (EPRI) issued the draft joint report NUREG-
1824, "Verification and Validation of Selected Fire Models for 
Nuclear Power Plant Applications," in January 2006 for public 
comment.  NUREG-1824 utilized experimental data from this 
international project to perform the analysis of the fire models.  
The final report, NUREG-1824 will be issued early in 2007. 
	The NRC, again in collaboration with EPRI, issued 
NUREG/CR-6850, "Fire PRA Methodology for Nuclear Power 
Facilities" in September 2005.  This report documents state-of-the-
art methods, tools, and data for the conduct of a fire PRA in a 
commercial NPP.  The NRC and EPRI have held two public 
workshops to date on this report.  In addition to the US 
stakeholders and NRC inspectors, the workshops have been 
attended by foreign regulators and licensees from the United 
Kingdom, Canada, Germany, France, Japan, Korea, Finland and 
Sweden.  Feedback from these international attendees indicate that 
the joint NRC/EPRI program is currently the most advanced NPP 
Fire PRA program available today.
	While the Fire-Induced Damage to Electrical Cables and 
Circuits - Working Group was active, the NRC along with 
representatives from Germany, France, and Canada worked 
together to improve the technical basis for understanding the 
damage thresholds, damage mechanisms, failure modes, and 
consequences of fire-induced cable failures in NPPs, and supported 
the development of improved methods, tools, and data for 
predicting fire-induced circuit responses. 
	The NRC has met twice this year with Germany, France, and 
Belgium, to discuss conducting a joint research program to better 
understand electrical failures and resulting explosions and fires 
from High Energy Arcing Faults.  These events have happened 
world wide and have the potential to pose a significant challenge to 
a NPP.  Meetings are being scheduled for 2007 to finalize a work 
plan to start this research.   The NRC continues to collaborate with 
national and international partners in the area of fire risk 
assessment and actively seeks partners when projects can be 
mutually beneficial to all parties. 


QUESTION 5.	What type of risk (low, moderate, high) does 
your ROP assign to inadequate medium voltage 
switch gear?  (This type of gear can affect a 
significant electrical fault and cause fires.)		

ANSWER:	
	The Reactor Oversight Process (ROP) does not assign a 
universal risk characterization for medium voltage switchgear.  
The relative risk importance of this class of switchgear depends on 
the specific type of power plant, the location of the switchgear 
within the plant, the proximity to other plant equipment and 
electrical cables, and/or the specific electrical loads being serviced 
by the switchgear.  The ROP contains a Significance 
Determination Process (SDP) that provides a means for the NRC to 
characterize the risk significance of licensee performance 
deficiencies including those that may result in deficient medium 
voltage switchgear. The SDP uses probabilistic risk assessment 
methods and qualitative methods to characterize the potential 
increase in plant risk using risk metrics such as change in core 
damage frequency (CDF). 
	For switchgear failures that do not represent a potential fire 
issue (e.g., an electrical breaker that prematurely opens and 
de-energizes equipment), the SDP under NRC Manual Chapter 
609, contains general guidance on how to assess the importance of 
the issue.  In these types of cases, the risk significance depends on 
factors such as a switchgear defect indirectly causing a reactor 
shutdown, unavailability of the service loads affected by the 
switchgear in question, and in some cases the length of time the 
condition existed.
	Additionally, energized medium voltage switchgear in itself 
creates a potential fire hazard.  NRC regulations require fire 
protection from these hazards when such switchgear is located in 
important locations within nuclear power stations.  For inspection 
findings related to licensees' failure to meet federal fire protection 
requirements, the SDP contains a dedicated section (NRC Manual 
Chapter 609, Appendix F) to assess the risk significance of the 
condition including technical guidance on the treatment of medium 
voltage switchgear.  Risk analysis for such cases are often complex 
since issues involve numerous variables such as fire growth 
modeling, time to fire damage of any adjacent equipment/cables, 
automatic fire suppression capability, fire brigade response, and 
plant operator's response to place the reactor in a safe shutdown 
condition.   However, it should be noted that in the five years of 
the ROP, no fire protection issues have resulted in risk greater than 
the low-to-moderate risk range.  Issues that are of low-to-moderate 
risk are called >White' findings under the color scheme used in the 
SDP and is the second lowest color in the hierarchy of 
significance.



QUESTIONS FROM REPRESENTATIVE STEARNS:

QUESTION 1.	Would you please explain how the new ROP 
system will improve the regulatory review 
process for approving new nuclear power plants?

ANSWER:	
	The Reactor Oversight Process (ROP) is focused on operating 
power plants.  The ROP allows the NRC staff to evaluate and 
respond consistently to licensee performance issues by using a 
series of performance indicators and NRC inspections.  Both the 
performance indicators and inspections are focused on operating 
reactors.  As a result, the ROP has no role in the licensing review 
and approval of a new nuclear plant.  However, once licensed, 
constructed, and operating, each new plant will be monitored using 
the tools of the ROP, including the performance indicators and 
NRC inspections.


QUESTION 2.	With respect to "risk-informed" regulations, how 
does their oversight fit into the new reactor 
oversight process?  Do you see the two efforts 
complimenting each other?  Are you happy with 
the progress that you are making in this regard? 

ANSWER:	
	The Reactor Oversight Process (ROP) assesses, through 
scrutiny of carefully selected samples, whether licensee activities 
are properly conducted; whether licensees comply with NRC 
regulations; and whether plant equipment is properly maintained to 
ensure safe operations.  Because there are many aspects of facility 
operation and maintenance, the NRC inspects utility programs and 
processes on a risk-informed sampling basis to obtain 
representative information.  As regulations change and as we 
pursue other risk-informed initiatives, we evaluate the ROP to 
determine if changes need to be made in the oversight of licensee 
activities.  Therefore, the ROP and the risk-informed regulatory 
changes will complement each other.
	The NRC has made significant progress in the area of risk-
informing its activities over the last several years.  Nevertheless, a 
significant amount of work remains.   NRC continues to pursue a 
number of risk-informed initiatives, including rulemaking and 
licensing actions.   At the same time, the industry and the NRC are 
working to develop appropriate standards for the probabilistic risk 
analysis tools needed to support these activities.  NRC is 
continuing to work to expand its capabilities in this area.


QUESTION 3.	I understand that the reactor safety aspects of the 
ROP have a reasonably objective set of criteria 
for determining safety impacts and associated 
colors.  However, it appears that the non-reactor 
safety aspects (Emergency Preparedness, 
Radiation Protection and Security) are far more 
subjective, and can generate results that don't 
make sense. This can confuse the public and may 
contradict your own assessment. What steps is 
the NRC taking to improve the objectivity of 
these non-reactor aspects, to ensure findings are 
colored more consistently with the reactor 
findings?

ANSWER:	
	The creation of significance determination processes (SDPs) 
across all seven cornerstones of safety, was a significant shift 
toward improved objectivity and transparency from our previous 
reactor assessment process.  The SDPs for non-reactor safety 
cornerstones, such as Emergency Preparedness (EP), Radiation 
Protection, and Security, are not able to utilize probabilistic tools 
as those SDPs associated with reactor safety systems do.  In 
establishing the SDPs for the non-reactor safety areas, it was not 
possible to consistently relate deficient performance to quantitative 
risk measures such as core damage frequency or large early release 
frequency.    From the start the staff has worked with industry and 
public stakeholder input, to the extent possible, to define SDPs in 
the non-reactor safety areas that result in agency responses that are 
considered appropriate for a range of performance problems.  We 
continue to meet monthly with industry in public meetings to 
discuss SDP issues and potential improvements.
	For example, the EP cornerstone risk-informs the significance 
of a finding by reflecting the potential impact on public health and 
safety.  A group of emergency preparedness subject matter experts, 
including NRC staff, industry stakeholders and members of the 
public, identified the most risk significant aspects of emergency 
planning as (1) emergency classification; (2) notification of offsite 
response organizations; and (3) public protective action 
recommendations.  Identification of the most risk significant EP 
aspects established a reasonably defined hierarchy of the 
significance of emergency planning findings consistent with the 
risk-informed approach utilized by the reactor safety aspects of the 
reactor oversight process.
	With respect to the Security cornerstone, the NRC reviews all 
security-related inspection findings before they are included in an 
NRC inspection report.  The review is conducted by an agency-
wide panel that is headed by a manager from the Office of Nuclear 
Security and Incident Response.  The Security Findings Review 
Panel assures consistency between all licensees and all four NRC 
regions, and helps assure that the significance of the security 
findings are consistent, objective, and predictable.  In addition, 
findings that potentially could be greater than very low security 
significance are forwarded to an NRC enforcement panel named 
the Significance and Enforcement Review Panel to reach an 
agency determination of significance.
	The agency issued its current physical protection significance 
determination process (PPSDP) for security in July 2004.  The 
PPSDP provides for consistent, objective, and predictable results.  
Since then, the NRC staff has been continuously evaluating and 
monitoring the results of the PPSDP, further ensuring an objective 
and consistent approach.  The end result of this evaluation will be 
to make any noted improvements to the SDP for security.


QUESTIONS FROM REPRESENTATIVE SCHAKOWSKY:

QUESTION 1. 	The near-accident at FirstEnergy's Davis-Besse 
plant in 2002 was ranked as the fifth most 
dangerous incident in the Nuclear Regulatory 
Commission's (NRC) history.  Boric acid leaks 
had put a very large hole in the reactor vessel's 
head. This occurred under the Reactor Oversight 
Process reviewed in the recent hearing.  The 
Union of Concerned Scientists and the Nuclear 
Information and Resource Service said this 
failure occurred because NRC headquarters staff 
did not back up the inspection staff who had 
proposed a mandatory shutdown because 
FirstEnergy refused to shut down voluntarily as 
the owners of all of the similar reactors had done.  
The NRC Inspector General found that the NRC 
put the financial impact of the shutdown on 
FirstEnergy above public safety.  What has the 
NRC done to change those priorities?

ANSWER:	
	Assuring the public health and safety is and always has been 
the highest priority of the NRC.   The NRC Chairman's response 
to the Inspector General and the NRR Director's response to David 
Lochbaum corrected factual inaccuracies in the referenced 
documents.
	In his January 8, 2003, response to the NRC Inspector General, 
then NRC Chairman Richard Meserve stated:

"There are several significant failings in the report.   First, and 
perhaps most important, the report incorrectly indicates that the 
decision to allow the brief period of continued operation was 
driven in large part by the interest in reducing the financial 
impact on the licensee.  The underlying inspections of reactor 
pressure vessel heads at all pressurized water reactors were 
undertaken as a result of staff safety concerns about 
circumferential nozzle cracking.   And, as your report has 
found, the NRC staff allowed the Davis-Besse reactor to 
continue to operate only after the relevant expert staff reached 
unanimous agreement that there was no significant safety 
concern relating to nozzle cracks that would preclude the brief 
period of extended operation.  It is a significant failing that the 
report does not acknowledge this fact in its findings.  Assuring 
the public health and safety is the highest priority of the NRC, 
and we believe that the staff's action was consistent with this 
requirement."

Similarly, in a letter dated December 13, 2002, Samuel Collins, 
Director of NRR, responded to the assertions in David Lochbaum's 
letter dated October 14, 2002, as follows:

"With regard to the NRC's regulatory activities, contrary to 
your assertion in Item 4 of your letter, NRC management did 
not overrule safety concerns of the staff in allowing Davis-
Besse to operate until February 16, 2002.  Rather, the technical 
staff recommended to management its conclusion, based on 
risk-informed decision making criteria and the information 
available to the staff, that the plant could operate until February 
16, 2002, without undue risk to the public health and safety.  In 
addition, the 

NRC sent Davis-Besse a closeout letter in response to Bulletin 
2001-01.  It provides much greater detail regarding the staff's 
decision making process."

QUESTION 2.	Have any changes been made in procedures used 
by the NRC headquarters staff when considering 
a shutdown recommendation from the inspection 
staff?  Because any unplanned shutdowns will 
have a significant financial impact on the 
licensee, is it now NRC policy that public safety 
takes precedence over financial impact in a 
situation such as Davis-Besse? 

ANSWER:	
	Assuring the public health and safety is and always will be the 
highest priority of the NRC.  Following the Davis-Besse reactor 
vessel corrosion issue, the NRC Executive Director for Operations 
chartered a Lessons Learned Task Force which was charged with 
conducting an evaluation of NRC's regulatory processes.  
Significant improvements have been made to NRC processes and 
procedures as a result of implementing the recommendations made 
by the task force.   These improvements include a more proactive 
program for evaluating materials degradation; a revitalized and 
robust assessment of operational experience; enhanced internal and 
external communications and communications protocols; specific 
and detailed inspections program enhancements including resident 
inspector staffing; and the maintenance of a safety-conscious 
attitude by the NRC staff.  
	As an example, a new office instruction was issued which gives 
guidance on the performance and documentation of an analysis 
conducted to determine the appropriate regulatory response to an 
emerging issue.  The guidance builds on the principles of risk-
informed regulation presented in Regulatory Guide 1.174, "An 
Approach for Using Probabilistic Risk Assessment in Risk-
Informed Decisions on Plant-Specific Changes to the Licensing 
Basis," and includes consideration of conformance with 
regulations, maintenance of defense-in-depth and safety margins, 
performance monitoring, as well as risk considerations.  This 
office instruction is intended to apply when there is not an 
otherwise applicable NRC decision-making process.


QUESTION 3.	In the Davis-Besse incident, the concerns of the 
regulatory division staff over the effectiveness of 
FirstEnergy's mitigation steps used to justify 
keeping the nuclear plant open beyond the 
proposed shutdown date were never documented.  
Could that happen today, or does the NRC have 
better procedures to track and document its 
discussions and decisions?

ANSWER:	
	As a result of the examination of the Davis-Besse reactor vessel 
corrosion incident, and the report generated by the Davis-Besse 
Lessons Learned Task Force, NRC has made several key changes 
to how it communicates both internally and externally.  There has 
been substantial advancement in the use of information technology 
in making operating experience available to internal users and 
members of the public.  There is a new database for managing all 
reported events, as well as a new operating experience information 
gateway that consolidates a large collection of individual databases 
and Web sources of information onto a single Web access page.   
The NRC Office of Nuclear Reactor Regulation has a new 
communication tool to promptly notify NRC staff of developing 
operating experience in their areas of expertise.  Users may also 
use this tool to examine recent or developing operating experience 
in their respective areas.  The NRC issued improved guidance in 
developing generic communications, establishing criteria for 
acceptable responses from licensees, properly documenting 
evaluations of licensee responses, and performing follow-up 
verification of licensee information.
	As an example, NRC developed Office Instruction LIC-504, 
"Integrated Risk-Informed Decision-Making Process for Emergent 
Issues," which provides a number of templates for documenting 
both the analysis supporting a decision, and the decision itself.  In 
documenting the decision, the office instruction stresses the 
importance of identifying the driving factors behind the decision, 
the limitations of and uncertainties associated with the supporting 
analyses, and providing the rationale behind the decision.  LIC-504 
has been issued for use and is expected to be invoked whenever 
there is not an otherwise applicable NRC decision-making process 
for dealing with a licensing issue.


QUESTION 4.	In Davis-Besse, it was clearly a situation where 
the licensee that protested got the NRC to back 
off.  Licensees that did the right thing and closed 
down their plants in a timely manner were 
penalized. Unfortunately, Davis-Besse had the 
most serious corrosion and cracking problems of 
all of the reactors.  What has the NRC done to 
prevent that from happening again?

ANSWER:	
	As indicated in the response to Question 1, the NRC staff made 
the decision based on a determination that there was no significant 
safety concern associated with the brief period of extended 
operation.  This risk-informed decision took into account 
commitments by the licensee  to reduce the proposed period of 
operation by half and to institute additional compensatory 
measures.  The responses to Questions 2 and 3 detail the additional 
procedural guidance provided to the staff since the event.


QUESTION 5. 	Critics have stated that the NRC's fine of $4.5 
million against FirstEnergy, the owner of 
Davis-Besse, was "paltry" and a "slap on the 
wrist" for an incident in which the NRC later 
calculated the odds of a nuclear meltdown were 6 
in 1,000.  What are your views on the size of the 
fine? 

ANSWER:	
	The total civil penalty was $5.45 million, and represented the 
largest ever issued by NRC.  When determining the amount of the 
civil penalty, NRC considered several factors which included risk, 
safety significance and the economic benefit that FENOC gained 
by operating Davis-Besse with primary coolant pressure boundary 
leakage, a Technical Specification (TS) violation.  In addition to 
the civil penalty, FENOC experienced substantial adverse 
economic impact resulting from their extended outage to replace 
the reactor pressure vessel head and to make improvements to 
satisfy NRC requirements and concerns.  NRC also referred 
potential criminal aspects of the case to the Department of Justice 
which resulted in FENOC's agreement to pay $28 million to defer 
prosecution.    
	The NRC does not consider its approach in assessing civil 
penalties to be punitive, but rather a deterrence to emphasize the 
importance of compliance with requirements and to encourage 
prompt identification and comprehensive correction of violations.  
Therefore, the NRC determined that a civil penalty of $5,000,000 
was appropriate for the violation of the Davis-Besse TS pressure 
boundary leakage requirement.  The TS violation was processed 
under the Reactor Oversight Process (ROP) and determined to be a 
RED finding (a finding of high safety significance) under the 
Significance Determination Process (SDP.)  In addition to the TS 
related violation, the NRC issued civil penalties totaling $450,000 
for four willful violations of NRC requirements associated with 
corrective actions, adherence to procedures, and incomplete and 
inaccurate information.  
	This was the first time the Commission exercised its discretion 
to issue a civil penalty for a violation processed under the ROP and 
given a color under the SDP.  While a civil penalty is not usually 
considered for issues evaluated under the SDP, absent actual 
consequences, the NRC considered this RED finding to be of 
significant regulatory concern and, accordingly, issued the civil 
penalty.


QUESTION 6.	In order to have an effective oversight program, 
the NRC needs adequate staffing and resources.  
The Davis-Besse Lessons Learned Task Force 
concluded that staffing and resource issues 
"challenged the NRC's ability to provide 
effective regulatory oversight" at Davis-Besse. 
Has that problem been resolved? Does the NRC 
have more budget and resources for reactor 
inspections than it did in 2000 and 2001?

ANSWER:	
	The resource issues that challenged the NRC's ability to 
provide effective regulatory oversight at Davis-Besse have been 
resolved and the NRC has more resources for reactor inspections.
	Reactor inspection resources were increased in FY 2004 as a 
direct result of the Davis-Besse events.  Resources for 
supplemental and reactive inspections were increased by 
approximately 15 full time equivalents (FTE) to provide for 
inspection of a plant under NRC Inspection Manual Chapter 0350, 
Oversight of Reactor Facilities in a Shutdown Condition Due to 
Significant Performance and/or Operational Concerns, for follow-
up activities to verify licensees' improvement plans pursuant to 
Inspection Procedures 95002 and 95003, and for reactor pressure 
vessel head inspections.  There is also increased interaction 
between headquarters staff and regional inspection staff during 
monthly conference calls and periodic workshops.  
	Additionally, in 2003, the staff revised the resident inspector 
policy to allow early assignment of new resident and senior 
resident inspectors to a site.  The policy allows the regional 
administrator to assign a permanent resident inspector up to 12 
months before the planned departure of the incumbent resident 
inspector.  Similarly, the regional administrator can assign senior 
resident inspectors up to six months before the planned departure 
of the incumbent.  Regional management also implemented actions 
to reduce inspector vacancies through active recruiting; training 
new hires; and over-hiring in anticipation of retirements, attrition, 
and staff movement.
	Resources for reactor safety and security inspections increased 
approximately 15 percent, by 110 FTE, between FY 2001 and FY 
2007.


QUESTION 7.	In May of this year, you were recently quoted in 
Nucleonics Week as asking if Davis-Besse could 
be relieved of its independent assessment 
obligations at an earlier date than prescribed.  
Can you explain your reasoning in light of the 
fact that this company is still under criminal 
investigation, just paid a $28 million fine, and 
had two former employees indicted for lying to 
the NRC?

ANSWER:	
	To be more specific, Commissioner McGaffigan noted during 
the NRC's May 16, 2006, Agency Action Review Meeting that 
perhaps the NRC should consider whether some of the four 
independent assessment requirements stated in the confirmatory 
order could be suspended, particularly in those areas in which 
Davis-Besse seems to be doing very well.  The order states that the 
regional administrator can suspend all or part of the requirements 
for the independent assessments based on good cause.  
Commissioner McGaffigan was suggesting that perhaps the 
resources could be better spent in other areas.  Commissioner 
McGaffigan mentioned that at least two of the independent 
assessments need to continue and should not be considered for 
suspension, specifically the safety culture and corrective action 
program assessments.
 	If the licensee believes that any or all independent assessments 
are no longer necessary based on acceptable performance in those 
areas, it can formally request relief from the requirements.  The 
staff specifically evaluates the progress of the order requirements 
on at least a semiannual basis during the mid-cycle and end-of-
cycle performance meetings.  In determining whether to suspend 
all or part of the four independent assessment requirements prior to 
the 5-year expiration date, the staff needs to consider the licensee's 
position as to why these additional assessments are not necessary, 
the results of the independent assessments, the robustness of the 
licensee's programs in these areas, and whether those areas and the 
specific issues are adequately covered by the NRC's baseline 
inspection program.  Any agency decision to relieve the licensee of 
its independent assessment obligations ahead of the 5-year time-
frame prescribed in the order will only be achieved through 
thorough analysis and a justified rationale.


QUESTION 8.	One of the great failings at Davis-Besse was the 
lack of a corporate "safety culture."  Next month 
- more than four years after the discovery of the 
corroded reactor vessel head at Davis-Besse - the 
NRC will put in place a process to evaluate a 
licensee's safety culture.  Why did it take so 
long?

ANSWER:	
	The time required to implement the safety culture 
enhancements to the NRC processes was due to a number of 
factors, including that the staff sought to develop an approach to 
assess safety culture in an objective manner by (1) staying within 
the Reactor Oversight Process (ROP) framework, (2) being guided 
by the principles of the ROP (i.e., being objective, transparent, 
understandable, predictable, performance-based and risk-informed) 
(3) integrating information from inspections to develop an 
objective conclusion about licensee safety performance, and (4) 
seeking external stakeholder input throughout the development 
process.  The staff also sought and received direction at a number 
of points from the Commission on safety culture initiative policy 
issues.  Safety culture, as a new area of emphasis, necessitated that 
the staff expend considerable resources to develop an appropriate 
process.  Finally, the analysis of safety culture is very fact 
dependent and is subject to the possibility of subjective outcomes 
if it is not correctly developed and applied.  Given the difficulty of 
this area, the Commission wanted to take the time necessary to get 
it right.  The following is a summary of some of the NRC activities 
over the past four years.

Summary of Activities:
        The degraded reactor vessel head problem was identified by 
the licensee at Davis-Besse on March 5, 2002.  The NRC initiated 
a number of responses to the problem, one of which was the 
formation of the Davis-Besse Lessons Learned Task Force.  The 
purpose of the task force was to conduct an independent evaluation 
of the NRC's regulatory processes related to assuring reactor 
pressure vessel head integrity and to identify and recommend areas 
of improvement for the NRC.  The final task force report was 
issued on September 20, 2002.  While the recommendations 
spanned a wide cross-section of NRC activities, further 
information is provided below to describe the intervening actions 
(between 2002 and 2005) that the NRC took with respect to safety 
culture.
        Several of the task force recommendations related to enhancing 
the reactor oversight process.  The staff initiated a number of 
safety culture-related improvements in the inspection program 
during the period 2002-2005 including: 

        1) Providing required web-based training on the Columbia 
space shuttle accident for inspectors and their managers on 
having a more questioning attitude in the conduct of 
inspections toward safety and the potential consequences 
when an organization's questioning attitude (a safety culture 
aspect) is lost or compromised.  

        2) Modifying inspection procedures to include additional 
inspection requirements to more closely inspect licensee 
corrective action programs (a safety culture component) to 
be alert for conditions such as repetitive equipment failures 
or human performance issues that might warrant additional 
follow-up inspections.

        3) Modifying an inspection procedure to more rigorously 
screen and review licensee corrective action program (a 
safety culture component) deficiency information using a 
semi-annual review to identify trends that might indicate 
the existence of a more significant safety issue. 

        4) Providing more specific guidance for handling inspection 
issues in the areas of human performance and problem 
identification and resolution (which are related to a number 
of safety culture components).  These efforts were designed 
to provide a more direct way to assess and react to licensee 
performance weaknesses in these areas. 

	With regard to a licensee's Safety Conscious Work 
Environment (SCWE), the staff proposed some options and 
recommendations to the Commission and received further 
Commission direction on how to proceed.   A public workshop was 
held in 2004 to discuss the development of a Regulatory Issues 
Summary (RIS) which would provide guidance to the industry on 
establishing and maintaining a SCWE.  Following the public 
meeting, a draft RIS was published in the Federal Register for 
public comment.  The RIS, entitled "Establishing and Maintaining 
a Safety Conscious Work Environment," was issued on August 25, 
2005.  The RIS provided guidance and best practices for licensees 
to establish and maintain an effective SCWE.
	In support of Commission direction provided in 2004, the NRC 
staff formed a Safety Culture Steering Committee, Working 
Group, and Support Team to develop further improvements to the 
ROP relative to safety culture oversight.  Between November 2005 
and February 2006 frequent public meetings were held with 
external stakeholders where the staff, with the participation of 
stakeholders, developed an approach to further enhance the ROP to 
address safety culture.  The enhanced ROP inspection documents 
were revised based on this approach and were then provided for 
further public review and comment.  The NRC staff evaluated the 
public comments and finalized the ROP inspection procedures and 
other ROP documents.  The enhanced ROP provides the NRC with 
a range of regulatory responses to licensee safety culture issues 
that include requesting the licensee perform an assessment of its 
safety culture and for the NRC to assess independently the 
licensee's safety culture.	The staff developed and provided 
training for inspectors and their managers on safety culture and on 
the changes to the ROP prior to implementing the revised ROP 
inspection protocols. The training included focused computer-
based training as well as in-depth classroom type training.  
	All but one of the revised ROP inspection protocols were issued 
on June 22, 2006, and were implemented on July 1, 2006.  The 
remaining revised inspection procedure is expected to be issued in 
August 2006.  The staff is also developing a RIS to provide 
operating reactor licensees information on the changes made to the 
ROP to improve oversight of safety culture.  The RIS is expected 
to be issued shortly. 
	In summary, the staff has expended considerable resources 
since the Davis-Besse head incident to make stepwise 
improvements in the ROP inspection and assessment programs.  
The staff will assess the safety culture improvements as part of its 
annual ROP self-assessment, to ensure that they are meeting the 
goals of the ROP and the Commission direction.


QUESTION 9.	Three years ago, the NRC Inspector General did 
a survey of 1,525 NRC employees and found that 
only half of them felt it was safe to speak up at 
the NRC.  Twenty-four percent did not believe 
that the NRC's commitment to public safety was 
apparent in what the agency did on a day-to-day 
basis.  Has the NRC made any changes to 
improve its own "safety culture"?

ANSWER:	
	Several press reports following the NRC Inspector General's 
2002 safety culture and climate survey report highlighted the 
survey's results in a single category, noting that nearly a third of 
the agency staff question the agency's commitment to safety.   
However, it is important to note that employee attitudes about the 
effectiveness of the NRC as a regulatory entity were covered by 
several other categories in the survey.  As the report notes, the 
results in these categories, "in whole, demonstrate a workforce that 
has become much more positive about the NRC as an 
organization."   
	In addition, the NRC has taken a number of steps to improve its 
safety culture since 2002.  This includes an increased emphasis on 
better face-to-face and employee to supervisor communications, 
development of better senior management communication tools to 
reinforce the agency's safety  consciousness, and enhanced 
leadership training.  The agency also reinforced the paramount 
importance of the NRC's safety mission relative to its other 
strategic goals in a number of communication vehicles.
	The agency also revamped its Differing Professional Opinion 
(DPO) program, which encourages employees to raise any 
concerns and express differing views on any issue with their 
supervisors on a regular basis.   In 2005, the staff participated in 
another safety culture and climate survey.   On average, the NRC 
improved its scores in virtually every category from the 2002 
scores and 66% of the staff indicated they felt it was "safe to speak 
up" in the NRC.   The contractor who conducted the survey noted 
that it is rare, in their experience, that scores improve to this degree 
between survey iterations.  In their evaluation report, they noted 
that  "Efforts to follow-up on the results from 2002 appear to be 
successful and should be implemented once again in 2005."  The 
contractor also noted that in the 2005 survey, the results indicated 
that employees are encouraged to communicate ideas to improve 
nuclear safety, and the scores for continuous commitment to public 
safety were greatly improved.
	The agency recognizes that there is always room for 
improvement.  In response to 2005 survey results, to foster 
continuous improvement in the agency's safety culture, individual 
offices and regions are developing action plans to address specific 
improvement areas.  In addition, the agency has  developed a non-
concurrence policy, so that individuals who may not agree with a 
staff proposal may voice their opinion in a more informal manner 
than is the case with the DPO program.

QUESTION 10.	Early this year, NRC staff raised questions about 
the effectiveness of the performance indicator 
program, saying that if all the results were 
"green," perhaps it didn't really measure anything 
of value.  What is your position on the 
performance indicator program?

ANSWER:	
	The performance indicator (PI) program continues to provide 
the NRC with objective indications  regarding plant performance, 
and it has met the goals and intended outcomes of the ROP.  The 
PI program has generally fulfilled the regulatory principles of 
being objective, risk-informed, understandable, and predictable, 
and it has accomplished the three applicable NRC strategic goals 
(ensuring safety, openness, and effectiveness).   
	The acceptable "green" performance threshold was established 
based on mid-1990's industry performance.  However, the staff and 
some public stakeholders remain concerned with the capability of 
the current PIs to contribute to the identification of declining 
performance.  As a result, the staff is working with industry to 
revise several PIs (changes to the voluntary program require 
agreement by industry).  A new risk-informed PI, mitigating 
system performance index (MSPI), has been developed and is in 
the initial stages of implementation.  Also, the NRC/industry task 
group is working on another indicator for monitoring complicated 
rapid automatic or manual reactor shutdowns.  The staff believes 
that this new PI has the potential to be a leading indicator of 
declining performance in that a plant that has a history of 
complicated scrams may be more likely to have a risk-significant 
scram.  The staff plans to continue to work with the industry to 
revise and/or introduce other PIs to improve the program's 
effectiveness in contributing to the identification of declining 
performance.


QUESTION 11.	Initially NRC staff estimated that about 5 percent 
of the findings under the Reactor Oversight 
Process would be greater than green.  But less 
than 1 percent have fallen into that category.  
Does that mean all the reactors are safer than 
they were five years ago, or are the findings not 
measuring the right safety indicators?

ANSWER:	
	Every year the staff provides an assessment of the reactor 
oversight process (ROP) and the status of the industry trends 
program to the Commission.  As part of the ROP assessment, the 
staff reviews the inspection program and how those resources are 
being used.  Based on the CY2005 review, the Commission 
believes the ROP program is monitoring the correct safety 
performance areas.
	With respect to industry performance over the last 5 years, the 
number of plants in each of the ROP action matrix columns has 
remained relatively stable.  The number of green findings has 
increased 34%, but the number of findings that are greater-than-
green has decreased by 45% over the last 5 years.  In addition, 
most of the industry trend program metrics have shown stable or 
improved trends over the last 5 years.  Based on this information, 
the Commission believes the NRC has seen some improvement in 
licensee performance over the last 5 years.

	

  U.S. General Accounting Office, "Nuclear Regulation: Preventing Problem Plants Requires More 
Effective NRC Action," GAO/RCED-97-145, May 1997, pp. 2-3
  A Special Investigation "Blowing the Whistle on Nuclear Safety: How a showdown at a power 
plant exposed the federal government's failure to enforce its own rules," TIME, March 4, 1996, pp. 
46-54.
  U.S. Nuclear Regulatory Commission, Office of Inspector General, "NRC's Regulation of Davis-
Besse Regarding Damage to the Reactor Vessel Head," Case No. 02-03S, December 30, 2002,  p. 23
  Ibid, OIG, p.17
  Ibid, OIG, p.23
  U.S. Government Accountability Office (GAO), "Nuclear Power: Efforts Made to Upgrade 
Security, but the Nuclear Regulatory Commission's Design Basis Threat Process Should be  
Improved,"  April 4, 2006, 
  Ibid, GAO, p. 9
  Ibid, GAO, Introduction
  http://www.nrc.gov/NRR/OVERSIGHT/ASSESS/cornerstone.html#MS
  "Fire Safety  at Nuclear Power Plants," Hearing before the Subcommittee on Oversight and 
Investigation of the Committee on Energy and Commerce, House of Representatives, One Hundred 
Third Congress, March 3, 1993, Serial No. 103-21, p. 1 
  Ibid, p.1
  Ibid, p. 110.
  NRC Regulatory Issue Summary 2006-XX, Regulatory Expectations with Appendix R Paragraph 
III.G.2 Operator Manual Actions, Public Meeting, June 6, 2006
  NRC Generic Letter 2006-03, "Potentially Nonconforming HEMYC and MT Fire Barrier 
Configurations," April 10, 2006, United States Nuclear Regulatory Commission, Accession No. 
ML053620142. 
  Ibid, Subcommittee Hearing,  p.2
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