[Senate Hearing 110-1211]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 110-1211

 
                    NRC'S REACTOR OVERSIGHT PROCESS 

=======================================================================

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 3, 2007

                               __________

  Printed for the use of the Committee on Environment and Public Works

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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED TENTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming1
BERNARD SANDERS, Vermont             LARRY E. CRAIG, Idaho
AMY KLOBUCHAR, Minnesota             LAMAR ALEXANDER, Tennessee
SHELDON WHITEHOUSE, Rhode Island     CHRISTOPHER S. BOND, Missouri

       Bettina Poirier, Majority Staff Director and Chief Counsel
                Andrew Wheeler, Minority Staff Director
                                 ------                                

1Note: During the 110th Congress, Senator Craig 
    Thomas, of Wyoming, passed away on June 4, 2007. Senator John 
    Barrasso, of Wyoming, joined the committee on July 10, 2007.
                              ----------                              

              Subcommittee on Clean Air and Nuclear Safety

                  THOMAS R. CARPER, Delaware, Chairman
JOSEPH I. LIEBERMAN, Connecticut     GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
BERNARD SANDERS, Vermont             LAMAR ALEXANDER, Tennessee
BARBARA BOXER, California, (ex       JAMES M. INHOFE, Oklahoma, (ex 
    officio)                             officio)



                            C O N T E N T S

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                                                                   Page

                            OCTOBER 3, 2007
                           OPENING STATEMENTS

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     4
Voinovich, Hon. George, U.S. Senator from the State of Ohio......     6
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     7
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....     8
Craig, Hon. Larry E., U.S. Senator from the State of Idaho.......    13
Isakson, Hon. Johnny, U.S. Senator from the State of Georgia.....    14
Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee..    15
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland    16

                               WITNESSES

Klein, Hon. Dale E., Chairman, U.S. Nuclear Regulatory Commission    18
    Prepared statement...........................................    19
    Responses to additional questions from:
        Senator Boxer............................................    22
        Senator Inhofe...........................................    24
Jaczko, Hon. Gregory B., Commissioner, Nuclear Regulatory 
  Commission.....................................................    34
Lyons, Hon. Peter B., Commissioner, Nuclear Regulatory Commission    35
Lochbaum, David A., Director, Nuclear Safety Project, Union of 
  Concerned Scientists...........................................    53
    Prepared statement...........................................    55
    Responses to additional questions from:
        Senator Boxer............................................    60
        Senator Inhofe...........................................    61
Fertel, Marvin S., Senior Vice President and Chief Nuclear 
  Officer, Nuclear Energy Institute..............................    63
    Prepared statement...........................................    65
    Responses to additional questions from:
        Senator Boxer............................................    68
        Senator Inhofe...........................................    70
Gaffigan, Mark, Acting Director, Natural Resources and 
  Environment, U.S. Government Accountability Office.............    70
    Prepared statement...........................................    72
    GAO Highlights, October 3, 2007..............................    79
    Responses to additional questions from:
        Senator Boxer............................................    80
        Senator Inhofe...........................................    82


                    NRC'S REACTOR OVERSIGHT PROCESS

                              ----------                              


                       WEDNESDAY, OCTOBER 3, 2007

                               U.S. Senate,
         Committee on Environment and Public Works,
              Subcommittee on Clean Air and Nuclear Safety,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m. in room 
406, Dirksen Senate Office Building, Hon. Thomas R. Carper 
(chairman of the committee) presiding.
    Present: Senators Carper, Voinovich, Sanders, Isakson, and 
Alexander.
    Also present: Senators Cardin, Inhofe, and Craig.
    Senator Carper. The hearing will come to order.
    Welcome to our witnesses, our commissioners, and to our 
other guests, to my colleagues.
    We are going to delay opening statements and are inviting 
our witnesses on the first panel to testify, in really sort of 
an extraordinary opening to our hearing today. What we have 
discussed, Senator Voinovich and myself and Senator Inhofe have 
discussed, we would like to take a few minutes at the beginning 
of this hearing to acknowledge the service of your former 
colleague, Commissioner Ed McGaffigan, and really to celebrate 
his life and his service to our Country, which spanned 
something like three decades.
    I remember many months ago, Commissioner McGaffigan came by 
my office to meet with me. I had met with him any number of 
times, but not often for him just to stop by and to visit. But 
he came to tell me that his cancer was progressing and that his 
time with us was, he thought, growing short. He then proceeded 
to spend the rest of the meeting, though, discussing the issues 
facing the Nuclear Regulatory Commission and offering his 
heartfelt advice on what the subcommittee that Senator 
Voinovich and I are privileged to lead should focus on as the 
year unfolded.
    That meeting was indicative of the kind of public servant 
that Ed McGaffigan was. When he was faced with really the most 
sobering personal issue any of us will probably ever have to 
face, and that is our own mortality, Ed was concerned with 
making sure that the Commission carried on its mission in 
serving our Country. Ed's motivation was not to secure his 
legacy. His desire was simply to see that we did what was in 
the best interests of our Nation.
    Ed literally dedicated his life to serving this Country of 
ours. He did it with humility, he did it with selflessness, and 
he was if nothing else, a man of great principle. To his 
mother, Margaret, to his children, Edward, Frances and Margaret 
Ruth, I don't know if they go by those names, I just want to 
offer our deepest condolences on behalf of myself, our 
colleagues, members of our staffs and all who knew Ed and who 
admired him greatly. Ed's memory and his legacy of devotion and 
hard work, along with his refusal to give up, he was a guy who 
just never gave up, will inspire me and I suspect many of us 
for years to come.
    To Ed's family, on behalf of all of us, let me simply say, 
thank you for sharing with us a very good and decent man for 
these last 30 years. We are in your debt.
    With that having been said, Senator Voinovich, if you would 
like to add your comments, then we will just go down the line 
to Senator Inhofe and Senator Craig. We will follow all that up 
with a moment of silence.
    Senator Voinovich. I had an opportunity to go out to Ed's 
wake and to express my sympathy to his children and express my 
appreciation for the sacrifice that they made so that Ed could 
serve our Country. I think Ed's conspicuous absence among the 
NRC commissioners here today underscores how he is going to be 
missed by the Commission.
    I think everyone here would agree that Ed's integrity and 
leadership had a profound impact on the NRC and the industry. 
His testimony was always refreshing because it came straight 
out, there was no ifs, ands or buts. He threw the ball right 
down the middle.
    As a result, I think today we are better prepared to face 
the many challenges that lie ahead. We shall cherish Ed's 
legacy of selfless devotion to duty and dedication as a model 
for everyone in Government service. I want to publicly 
acknowledge a promise that I made to Ed. He came to me on a 
couple of occasions and he said, Senator, I really appreciate 
the time and effort that you put into the Nuclear Regulatory 
Commission. He said, I want you to promise me that you will 
continue to pay attention in terms of reform and in terms of 
improving the NRC, so that we can have a renaissance in nuclear 
energy in the United States of America. I want to publicly 
state that I am going to keep that promise.
    Senator Inhofe.
    Senator Inhofe. I cannot really build too much on what has 
already been said. I agree with Ed, I think the sad thing is 
about his legacy is that Ed is not here to see the new reactor 
licenses get filed and observe the impact of his efforts. It 
was 10 years ago that I became the chairman of this 
subcommittee, and at that time, the NRC had gone something like 
12 years without any oversight. You just can't do that in 
Government. So we started having oversight.
    The only one who was there at that time who is currently 
serving was Ed. Ed welcomed, I always remember, sitting at that 
table, he said, we need the oversight. He said, you can't do it 
without the oversight. So he was one of them who was 
instrumental in getting the oversight necessary to really start 
progressing and getting into the nuclear field, which we all 
understand is going to be an essential part of resolving the 
energy crisis we have in this Country.
    So I just join my colleagues in saying that he was a 
wonderful guy to be with and to work with, but essentially, he 
was the one in on the beginning of this resurgence of activity 
in nuclear energy. We will miss him.
    Senator Carper. Thank you, Senator Inhofe.
    Senator Craig, would you like to make a comment?
    Senator Craig. Mr. Chairman, thank you very much for taking 
this time to recognize Ed. I don't think any of us think about 
how our epitaphs out to be written or how our gravestones ought 
to be carved. But my guess is that a phrase that might be 
fitting for the commissioner would be, ``He served until he 
could serve no more.'' And he did that. He did that for the 
greater public interest in a way that all of us ought to 
recognize and to praise him for, as my colleagues have done. 
Not only did he bring integrity to the name of service, but he 
literally served until he could serve no more. In doing that, 
it is important that this committee recognize it, that we have 
the responsibility, Mr. Chairman, to have a full complement of 
commissioners so that Ed's dream of a renaissance in the 
nuclear industry can be fulfilled in a responsible way that the 
public is confident that the work done at the Commission is 
done with the integrity that Ed set forth with his years of 
service there.
    So it is phenomonally fitting this morning before the right 
committee, the committee of responsibility, recognizing the 
need to fulfill our charges, that we deal with the 
commissioners that are before us now as it relates to 
confirmation, there will be another one coming as a result of 
Ed's death, and that we do so in a way that the Commission can 
serve the public in a way that it has historically served, and 
sustaining the kind of confidence that has always been the 
hallmark of the Nuclear Regulatory Commission.
    So thank you very much, Mr. Chairman, for doing this. I 
think a moment of silence for Ed at this moment is so fitting 
and appropriate. Thank you.
    Senator Carper. Before we have that moment of silence, let 
me call on the commissioners to add any brief comments that 
they would wish to add at this time. Chairman Klein.
    Mr. Klein. Thank you, Mr. Chairman, members of the 
committee. We held a memorial for Commissioner McGaffigan 
yesterday at the NRC for those members of the staff that could 
not attend his funeral and pay their respects. But not only to 
pay their respects for his life, but also for his 
accomplishments. His family was there, his daughter, his 
brother and sister. His mother could not make it, and 
unfortunately, his son Eddie was unable to attend due to health 
reasons.
    It was really, I think, a moving moment for all of us, both 
the staff and my fellow commissioners and I, and several former 
commissioners also attended as well as former chairmen of the 
Commission. I think we all had our own stories to tell, and I 
was proud to say, from my standpoint, that while we were 
colleagues, we also became friends. I think that is very 
important for a collegial body to work on common good to 
protect the public environment and public safety.
    In terms of Ed's situation, he left this life the way he 
wanted to, intellectually strong and fighting until the last 
minute. There were issues he was dealing with until the very 
end, and as indicated, his epitaph would say that he served 
until he could no longer serve.
    It was a comment that all of us, I think, had commented on, 
as Senator Voinovich made, Ed called it like he saw it. He 
didn't play games, he told it like he saw it, just up front and 
factual and based on facts. Honesty, integrity, hard work. I 
think all of us will miss his leadership, his long service and 
his dedication to public service. I think the best thing that 
the NRC can do and the commissioners is to follow his example, 
work hard, do the right things, base our decisions on facts. 
The Commission lost a hard worker and a good man.
    Thank you.
    Mr. Jaczko. I think that was very eloquently spoken by the 
Chairman. I would only add, I think, that I certainly want to 
associate myself with his remarks, that Commissioner 
McGaffigan, while, as Senator Craig said, he worked until he 
worked no more, I think his work will continue at the agency, 
and I think that is something that we all know and recognize, 
that he has established principles that will guide us, and he 
has established programs and regulations in a wide variety of 
programs that will continue to be a part of this agency. He has 
a dedicated core of alumni staff who will continue to make 
contributions to this agency that were guided by his dedication 
and his influence.
    So I think we will have the pleasure of his memory with us 
for a long time at this Commission.
    Senator Carper. Thank you, Commissioner.
    Mr. Lyons.
    Mr. Lyons. I counted Ed as a friend and a colleague for 
about 25 years. Ed's focus on excellence at the NRC truly 
inspired his colleagues to re-examine their own commitment to 
excellence of that organization. He consistently took on the 
most difficult challenges that we had at the NRC. He took every 
opportunity to improve the accuracy of impressions about the 
agency and at the same time, he worked tirelessly to improve 
the quality and timeliness of our products. He certainly never 
hesitated to tell us internally where we needed to improve. 
That was true of staff and commissioners.
    As long as I knew Ed, he truly exemplified the ideal for a 
public servant. He frequently referenced words of President 
Kennedy as being a particular inspiration to him in his public 
service. I think it remains for those of us remaining at the 
Commission and at the agency to strive toward the high 
standards that he set for all of us.
    Senator Carper. Thank you all for those comments. I will 
call on Senator Isakson at this time.
    Senator Isakson. For just a minute, I want to share my 
condolences on the passing of Ed McGaffigan, and associate 
myself in particular with what Mr. Lyons just said regarding 
the epitome of a public servant. I think we have all benefitted 
as a Nation from his time and talents given to the Commission. 
I think as was said by Mr. Jaczko that his legacy will go on 
and live for a long time because of his great work. I 
appreciate very much the tribute each of the commissioners have 
made today.
    Senator Carper. Thank you very much.
    I am going to ask each of you to join us in a moment of 
silence as we remember Ed in our own way and give thanks for 
his remarkable service to this Country.
    [Moment of silence observed.]

STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM THE STATE 
                          OF DELAWARE

    Senator Carper. Thank you.
    Today's hearing is on the NRC's Reactor Oversight Process, 
and whether it adequately ensures the health and safety of the 
American Public. Our Senators are going to have 5 minutes or so 
for their opening statements, then we will recognize the 
Chairman and commissioners to offer their statements to the 
committee. Chairman Klein will be given 5 minutes and the other 
commissioners roughly 2 minutes to offer any additional 
thoughts that you might for us.
    Following the commissioners' statements, we will have two 
rounds of questions and then we will invite our second panel of 
witnesses to come forward. I think we are going to be 
interrupted by a vote around 11 o'clock, but maybe we can get 
through your testimony and at least one round of questions, and 
we will see how far we can go beyond that.
    Last week, along with several of my colleagues that are 
here today, we celebrated the submission of the first license 
application for I guess over 30 years to build and to operate a 
new nuclear reactor in the United States. For us, I think that 
is a big deal. What is even more exciting is that the 
application is the first of several that are expected to be 
submitted by the end of this year and possibly dozens more are 
expected to follow in the next 18 months.
    Senator Voinovich and I have been working over the past 
years, as our predecessor, Senator Inhofe and others have, to 
make sure that the Nuclear Regulatory Commission is ready for 
this nuclear renaissance. We will be watching very closely as 
these applications begin to wind their way through the review 
process at the agency. If all goes well, we will have the first 
of possibly 30 new reactors built within the next 7 or 8 years.
    While that one reactor 7 years down the road is important, 
the 104 reactors currently operating in the United States must 
remain the agency's top priority. If any one of our current 
reactors fails to operate safely, it will undermine the nuclear 
resurgence and renaissance that we are currently seeing and 
celebrating. The reactor oversight process is a cornerstone of 
the NRC's reactor safety program. Today we are going to discuss 
its effectiveness.
    The reactor oversight process was developed to provide a 
more predictable and consistent regulatory framework for the 
nuclear industry. At the same time, it is intended to give the 
public a more understandable and accessible assessment of plant 
performance. I believe the reactor oversight process has 
fulfilled those two objectives.
    Having said that, I want to discuss a third aspect of the 
NRC's mission, and that is prevention as well as correction of 
problems. NRC's action matrix categorizes individual reactors 
according to their performance. If a plant's performance 
degrades or deteriorates, the NRC increases its inspections. 
The NRC has identified seven key processes or cornerstones, I 
think you called them, that are necessary for safe operations 
of a plant. There are currently 10 reactors in NRC's column 
three, and that is the degraded cornerstone column. There is 
also, I think, one reactor in column four, and that is the 
repetitive degraded cornerstone column. This means that 11 
reactors across our Country are having significant problems in 
the areas of their plant that are deemed to be necessary for 
safe operations.
    For my questions today, I want to hear what the NRC is 
doing to address these issues at those 11 plants. More 
importantly, I want us to find out if the reactor oversight 
process provides the proper tools to ensure that the plans in 
column three improve in a timely fashion instead of continuing 
to degrade.
    There are also plants that continue to have relatively 
minor problems which do not seem to go away. I remember in 2004 
and 2005, when the nuclear reactors nearest to my State, right 
across the Delaware River in New Jersey, Salem and Hope Creek, 
had an outage or some sort of leak or problem it seemed like 
almost every day. It wasn't, but it seemed like almost every 
day. They have cleaned up their act considerably since then, in 
no small part because of your oversight.
    Those plants have greatly improved over the past few years. 
But now, the same sort of situation seems to be occurring in 
New York's Indian Point Nuclear Plant. It is important that the 
NRC continue to monitor and work to quickly resolve these 
problems to ensure all plants are functioning safely and 
reliably. With that having been said, let me recognize Senator 
Voinovich for his comments, and the others as they have 
arrived.
    Senator Voinovich.

 STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR FROM THE 
                         STATE OF OHIO

    Senator Voinovich. Thank you, Senator Carper. Today's 
hearing does continue the strong oversight of the Nuclear 
Regulatory Commission that began in 1998 when Senator Inhofe 
was Chairman of the subcommittee. I think you were Chairman of 
the subcommittee in 1999 and 2000, too.
    Senator Inhofe. I was.
    Senator Voinovich. Then I took over as chairman and worked 
with Senator Carper all those years, now I have the privilege 
of being a ranking member and Senator Carper is the Chairman of 
this subcommittee.
    We have focused a great deal of time on this, overseeing 
safety and security in the 104 currently-licensed powerplants. 
We have also worked hard to make sure the NRC has what it needs 
in terms of regulatory reforms, human capital and other 
resources to gear up for the nuclear renaissance.
    The first milestone toward the nuclear renaissance was 
achieved last week with NRG's submittal of a COL to build two 
new nuclear reactor plants in southern Texas. For the first 
time in almost 30 years, NRC will be faced with the challenges 
of approving applications for new powerplants. Four more 
applications by the end of this year, we understand, followed 
by 14 more next year, for a total of, I think, 30 new reactors. 
Unbelievable. That is why we held three NRC oversight hearings 
last year, to ensure NRC is aggressively preparing for this 
daunting challenge. Senator Carper and I have agreed to 
schedule another oversight hearing early next year to focus on 
the GAO's recently-released report on NRC's licensing process 
and its readiness.
    As I mentioned, at the last NRC hearing in April, 
Developing Domestic Nuclear Supply Chain Infrastructure, human 
capital remains a significant challenge to making the nuclear 
renaissance a reality. So in addition to holding these 
oversight hearings, Senator Carper and I are planning a 
roundtable meeting with the leaders of the Federal, State and 
local governments and other stakeholders, such as industry, 
academia and labor unions, to address these other challenges, 
particularly the human capital challenges.
    More than ever, the NRC must provide regulatory certainty 
and predictability in both its reactor oversight and new 
reactor licensing processes. Ensuring the safety and security 
of our existing nuclear powerplants is absolutely essential if 
we intend to increase our Nation's use of nuclear energy. I can 
say that I have been working 7 years, but I remember Davis-
Besse, I am from Ohio, and going through that, that was not an 
easy period, but I think a period that we learned.
    So we are going to place emphasis today on NRC's reactor 
oversight process, because we know how important that is. Thank 
you, Mr. Chairman.
    Senator Carper. Thank you.
    Senator Inhofe, and then we will turn to Senator Sanders.

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE 
                          OF OKLAHOMA

    Senator Inhofe. Thank you, Mr. Chairman. I am glad we are 
having this, we always say that, but I really mean it. The time 
is right, and we are making a breakthrough, as referred to as a 
transformation or as Senator Craig and Senator Voinovich said, 
a renaissance.
    Truly, that is what is happening right now. One key element 
of that transformation was the reform of the NRC's reactor 
oversight process. The old process was subjective, it was 
inconsistent, it was bureaucratic. The reforms put into place 
in 2000 have established a more safety-focused process that is 
actually measurable. Even the GAO found the proceeds to be 
logical and well-structured, in that the process causes the 
industry to constantly improve.
    The GAO also found it to be a very open process, which 
provided the public and other stakeholders considerable 
information on its activities. The very nature of requests for 
the so-called independent safety assessments implies that the 
NRC's oversight is inadequate to ensure safety and is somehow 
biased. The NRC was established by law as an independent 
agency. If the integrity of the agency is in question, then I 
am eager to hear that evidence. But if the reactor oversight 
process is deficient in some way, then I would also like to 
know that, so it can be remedied.
    As I understand it, the NRC is moving to address a few 
weaknesses highlighted by the GAO. I have to say, Mr. Chairman, 
that the GAO was pretty good in this report. It wasn't highly 
critical. There were some positive suggestions. I don't think 
there was a member of this committee or the Commission that 
doesn't agree that we need to constantly look for improvements.
    I am also interested in their conclusions about the NRC's 
readiness to review new plant applications. In fact, I am going 
to have, since I have a conflict today with the Senate Armed 
Services Committee, I probably will be submitting some 
questions for the record, just to be sure that the capability 
is there to meet a rather aggressive schedule. Because I can't 
think of anything that is going on in any of the committees 
that is more significant than this renaissance that we are 
addressing today. So I applaud you for having this hearing and 
I am looking forward to having the information that comes from 
it.
    [The prepared statement of Senator Inhofe follows:]
   Statement of Hon. James M. Inhofe, U.S. Senator from the State of 
                                Oklahoma
                 remembering commissioner ed mcgaffigan
    I am very disappointed that Commissioner McGaffigan is not here 
with us today. For more than 10 years, I have appreciated his frank and 
insightful testimony before this Committee. Ed and I shared a common 
goal to transform the Commission into a more effective and disciplined 
agency and I have had the greatest respect for his tenacious efforts. 
The results are a remarkable and an admirable legacy. The sad thing 
about this legacy is that Ed is not here to see new reactor licenses 
get filed and observe the impact of his efforts as the NRC meets this 
new challenge. He will be sorely missed.
    Thank you, Senator Carper and Senator Voinovich, for holding this 
hearing today. I am a firm believer that constant oversight is critical 
to ensuring that federal agencies are productive and efficient. The NRC 
is a solid example of how oversight by this Committee over the last 10 
years transformed the agency from a subjective and unpredictable 
regulator to a more safety-focused, efficient one.
    One key element in that transformation was the reform of the NRC's 
Reactor Oversight Process. The old process was subjective, inconsistent 
and bureaucratic. The reforms put in place in 2000 have established a 
more safety-focused process that is measurable. Even the GAO found the 
process to be logical and well-structured, and that the process causes 
the industry to constantly improve. The GAO also found it to be a very 
open process which provided the public and other stakeholders 
considerable information on its activities.
    The very nature of requests for the so-called ``Independent Safety 
Assessments'' implies that the NRC's oversight is inadequate to ensure 
safety and is somehow biased. The NRC was established, by law, as an 
independent agency. If the integrity of the agency is in question, then 
I'm eager to hear the evidence. If the Reactor Oversight Process is 
deficient in some way, then I'd also like to know that so it can be 
remedied. As I understand it, the NRC is moving to address the few 
weaknesses highlighted by the GAO. I look forward to the testimony 
today on these issues.
    I'm also interested in the GAO's conclusions about the NRC's 
readiness to review new plant applications. Last week, NRC filed a 
license application for 2 new plants in Texas. I hope this is the first 
of many to come. However, this surge of applications presents a 
significant challenge to the NRC's ability to manage its workload. In 
the effort to balance existing responsibilities with new plant 
licensing reviews, I am concerned that the NRC may not have all the 
tools in place that it will need.
    During its review of Early Site Permits, the NRC was caught flat-
footed because it underestimated the number of public comments and was 
unprepared to manage volume of work. Similarly, as the agency begins to 
review license applications, I'm concerned that some important 
management processes are not in place. Without clear processes for 
prioritizing resources and tracking Requests for Additional Information 
(RAI's), I am concerned that the agency will soon find itself fully 
engaged in reviewing multiple applications without having all the 
necessary tools in place. I look forward to hearing Chairman Klein's 
testimony on how the NRC is addressing these and other issues reported 
by the GAO.

    Senator Carper. Thanks, Senator Inhofe.
    Welcome, Senator Sanders. You are recognized.

STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR FROM THE STATE 
                           OF VERMONT

    Senator Sanders. Thank you very much, Mr. Chairman.
    It seems to me that at a time when public confidence in the 
Government is not terribly high, we have to do everything that 
we can, we have to go the extra mile to make sure that the 
public is assured that when it comes to nuclear power, we have 
done everything, everything that we can to assure that these 
plants are as safe as they can be. This is especially true when 
it comes to the fact that we have a number of aging plants, 
including the plant in Vernon, Vermont, which are now coming up 
and where there are now requests to extend the life of those 
plants.
    According to the September 2006 GAO report on nuclear 
oversight, from 2001 to 2005, NRC issued five red findings, 
that is the worst kind, and seven yellow findings, which are 
just below red in terms of seriousness in violation. The red 
findings involve Steam Generator 2 failure, auxiliary feed 
water pump problems, and the well-known Davis-Besse football-
sized hole in the reactor vessel head caused by acid corrosion, 
which is, needless to say, a very frightening occurrence.
    Problems happen when nuclear powerplants get old. When 
plants try to increase their power, that obviously puts more 
stress on already aging nuclear plants. Some nuclear plants may 
be seeking a 20-year license extension and some may be seeking 
both a power up-rate and a license extension. People who live 
in areas where these plants are extending, want to extend their 
lives and their up-rate, have reason to be concerned. Our job 
is to do everything we possibly can to assure those people that 
we are safely inspecting those plants.
    That is why I have introduced S. 1008, legislation which 
becomes more relevant in my own State of Vermont with the 
recent problems that we have seen at Vermont Yankee, including 
a cooling tower collapse. I think we have a poster over here, 
this is what happened within the last couple of months at 
Vermont Yankee, as well as other problems. S. 1008 allows a 
State's governor or public utility commission to request an 
independent safety assessment if they have a nuclear plant in 
their State. If a State is in the emergency planning zone for 
nuclear plant in the State nearby, they certainly have an 
interest in these issues as well.
    That is why my legislation would allow them to make the 
same request. In other words, God forbid there is a nuclear 
problem. It is not only going to impact one State, other States 
should be allowed to have input into the inspection process. In 
my situation in Vermont, that includes New Hampshire and 
Massachusetts as well.
    Mr. Chairman, critical times at nuclear plants call for 
special inspections, both to ensure the public safety but also 
to boost public confidence. When a facility is seeking a power 
up-rate, which is an increase in the power it is allowed to 
generate, as was recently approved for Vermont Yankee, that is 
a critical time. I have to tell you that in the State of 
Vermont, there is concern. Forty-year-old plant, they want 
another 20 years. They want a 20 percent increase in their 
output. People are concerned, not only in Vermont, all over 
this Country. We have to go the extra mile to make sure that 
there is public input and the most thorough inspection process 
possible.
    I think, and again, I certainly do not mean to be critical 
of the people up here or the NRC, but people are concerned 
about the degree to which the NRC is pro-industry, is not 
listening to legitimate concerns that ordinary citizens have. 
Essentially what our legislation does is, it goes beyond the 
NRC, brings independent inspections. It really is. There is 
nobody up here who wants anything less than the most safe 
nuclear powerplants that we can have. There is no disagreement.
    I would hope that we can support that legislation which 
does that.
    Mr. Chairman, I ask that a copy of the Monday, October 1, 
2007 Keene, New Hampshire Sentinel editorial be made a part of 
the record.
    Senator Carper. Without objection, so ordered.
    Senator Sanders. Thank you.
    This details the lack of public confidence in Vermont 
Yankee from our neighbors in New Hampshire, including the 2004 
vote of the New Hampshire Senate, which I believe at that point 
was Republican, if I am not mistaken, I might want to mention, 
calling for an independent evaluation of the Yankee Nuclear 
powerplant and the two New Hampshire Congressmen have also co-
sponsored this legislation.
    So Mr. Chairman, that is my request. When you have plants 
that are old that want to expand, that want to increase input, 
we have to go the extra mile. We have to assure the public that 
these are safe plants, and I would hope that we would support 
that legislation.
    [The referenced material follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Carper. Senator Sanders, thank you for that 
statement.
    We are going to turn to Senator Craig, Senator Isakson and 
Senator Alexander, in that order, please.
    Senator Craig.

 STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR FROM THE STATE 
                            OF IDAHO

    Senator Craig. Mr. Chairman, thank you very much.
    Commissioners, welcome before the committee today. I have 
spent a lot of time on nuclear energy over the years, but not 
on this committee, on the authorizing committee, as we have 
done so, and the renaissance we are now engaged in that is 
clearly at your doorstep is a product of the 2005 National 
Energy Policy Act that all of us, I think, are very proud of.
    For just a moment, let me relate a little history and why 
there is an intensity of my interests, and I am thinking when 
Senator Sanders had his picture up, what is the picture I would 
want to put up? Maybe it would be Chairman Boxer's picture of 
melting icebergs and a reality that we have to have a reliable, 
clean source of energy for this great Nation, and that clean 
source as we know it today is nuclear, it is a renaissance we 
speak of. It is something that clearly you, gentlemen, and 
those who work with you, are going to have a phenomenal 
responsibility for.
    In my service here in the Senate, it wasn't long ago where 
a utility that had an aging nuclear reactor and a generating 
facility thought they had an albatross on their hands. Thanks 
to you, thanks to the Commission, thanks to relicensing and 
retrofitting and modernization, those plants have a new life, 
and most utilities are finding that to be the most profitable 
generating facility they have today. Of course, it does comply 
with the politically correct concern we all have about clean 
energy.
    So what happened? Well, in 1946, we created the Atomic 
Energy Commission. In 1949, out in the deserts of Idaho, EBR-1 
began to be assembled, the first experimental breeder reactor. 
In 1951, the first light bulb was lit from that reactor's 
generating capability. Fifty-two experimental reactors later, 
at the Idaho National Laboratory, we have played a critical 
role, along with the Atomic Energy Commission, soon, well, not 
so soon, 1974, I believe, to transform itself into the Nuclear 
Regulatory Commission.
    But there was a symbiotic relationship of cooperation and 
understanding and working together. We are all intent on that.
    So to you, Mr. Chairman, and to Senator Voinovich and 
Senator Inhofe, and your insistence on a cooperative oversight 
kind of thing, citizens of Idaho want that also. We are 
potentially the recipient of the new design, the next 
generation nuclear plant could well be built experimentally in 
Idaho, and done so in a way that is going to be hand in glove 
with all of the work that you do in making sure that what we 
get done is right.
    Now, that first license, Mr. Chairman, that we celebrate 
here today that occurred last week is the beginning of not 
hundreds of millions, but hundreds of billions of dollars of 
investment in the energy flow for this Country if what happens 
downstream, as Senator Voinovich has talked about, 30-plus 
reactors later, that becomes reality. We must get right from 
day one the concerns that Senator Sanders speaks of that we are 
all critically concerned of that you are responsible for. There 
is no just no question about it.
    To build the confidence in 1 and 2 and 5 and 10 and 30 
reactors, and there is no reason to think we can't do that, 
because we have done it very, very well in the past, is what 
will breed not just the renaissance of energy in this Country, 
but it could potentially be as important to this economy as was 
the new high-tech renaissance that we began to experience a 
couple of decades ago.
    So if I speak in those terms, I mean to. Because the 
responsibility of the NRC and the importance of this committee 
and the oversight and the hand in glove relationship that has 
to come from now and into the future, to get it right, to 
sustain the confidence of the American people as it relates to 
nuclear energy generation capability is going to be critical to 
hundreds of billions of dollars of investment and new jobs and 
new thinking, great creative talent that will be released upon 
this economy and this Country by these actions.
    Thank you, gentlemen, we are glad you are here.
    Senator Carper. Senator Craig, thank you.
    Now Senator Isakson, Senator Alexander, then Senator 
Cardin.

 STATEMENT OF HON. JOHNNY ISAKSON, U.S. SENATOR FROM THE STATE 
                           OF GEORGIA

    Senator Isakson. Thank you very much, Mr. Chairman. I want 
to initially echo your remark about the importance of this 
hearing and the importance of the responsibility of the 
Commission at the beginning of this new renaissance in terms of 
nuclear energy.
    In the 1970s and 1980s, when we were beginning to have a 
real growth in nuclear energy capacity and nuclear energy 
production in terms of the electricity market, Chernobyl and 
then Three Mile Island caused a huge setback, which set us back 
for the better part of three decades. We talk today, many 
talks, everybody talks about the carbon issue, the warming 
issue, and everybody talks about ways to reduce fossil-based 
carbon emissions into the atmosphere. There is no question, 
especially from those of us in the south, that the only way and 
the best way to be able to meet the standards we would all like 
to have is to be able to have safe, reliable nuclear energy and 
capacity.
    As Senator Alexander so eloquently spoke, we debated the 
Energy Bill on the renewable portfolio standards. There were 
many in Congress who wanted us to reduce our emissions by 15 
percent using wind or solar. Well, that works fine in some 
parts of the United States, but in the south, we don't have the 
wind to turn the turbines, and you can't put enough solar 
capacity to reduce by 15 percent.
    But we also happen to be a part of the Country that has 
successful, long-time, safe and reliable nuclear energy 
production. I cannot tell you, I don't think there is a 
commission of the United States Government on any subject that 
has a more important responsibility than you do in this 
century. Because if we are going to meet the challenges of our 
environment, meet the challenges of our economy, continue to 
compete in the world we are in today, we must do it with 
reliable, safe and effective energy. Nuclear is an important 
component part of that generation.
    So I am delighted that we are having this hearing today. I 
am delighted that you are here today. I am delighted, quite 
frankly, on the job the Commission has done from the outset. I 
find no fault, personally, because we have nuclear generators 
in Georgia, every appearance I see you are very diligent, to 
the most minute detail, when it comes to safety. Call people 
quick and get responses quickly. The public needs to know that.
    As this renaissance takes place, if your attention to 
safety continues as it has, then the generators and those that 
generate electricity in this Country continue their commitment 
to safety, we will solve many of the problems that today people 
think are either not solvable or not possible to reach. I 
commend you on what you do, for your work, and thank you for 
being here today to testify.
    Senator Carper. Thank you, Senator Isakson.
    Senator Alexander, good morning.

STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR FROM THE STATE 
                          OF TENNESSEE

    Senator Alexander. Thank you, Mr. Chairman. Thank you for a 
few moments.
    I have wondered, almost half facetiously over the last few 
years whether if what we should do as a Nation is simply build 
about 100 stripped-down aircraft carriers that are nuclear 
powered and just park them all around the Country and plug them 
into the grid. We have never had a single nuclear accident 
since the 1950s, and that might be the fastest, easiest, 
simplest way to have long-term, reliable, low-cost clean 
energy.
    I am delighted with this hearing. I am looking forward to 
some comments about safety. I applaud the Nuclear Regulatory 
Commission for changing its official use policy, at least 
insofar as it affects nuclear fuel services in Tennessee. There 
was a spill there. The official policy of the Government was 
that information about that spill was limited in the ability to 
disseminate that to the community. You have now changed that 
policy, a few weeks after a visit I made there. I think that is 
right for our Country and it is the right balance and I 
appreciate your doing that.
    Second, I hope to hear more about the disposal of low-level 
radioactive nuclear materials. We have, for example, St. Jude's 
Hospital in Memphis. Children come there from all over the 
Country every year with cancer. There are 5,500 radiological 
treatments every year. Our State, when Barnwell, SC closes, 
won't have a place to send its low-level radioactive waste. I 
would like to hear your comments about other options for that 
and whether we can encourage ways of compressing and 
reprocessing that kind of waste so it can be stored.
    In the remaining few minutes, I wanted to just make this 
observation about nuclear power. When we drafted the Energy 
Bill in 2005, there were nearly 200 amendments, and not a 
single one was an anti-nuclear amendment. We all remarked on 
that, about what a change in attitude that was in our Country.
    To put it in practical terms, if I were chairman of the 
Tennessee Valley Authority, which I am not, which is the 
largest utility in the Country, and I were looking at the 
future, I would have been told by my staff that we need 700 new 
megawatts of energy a year. That is more than a gas plant, less 
than a new nuclear plant, a lot of electricity. I would have 
spent August buying 6,000 extra megawatts a day because of the 
heat wave, most of that coming from gas.
    If I were looking at my options, I would see the natural 
gas prices are $7, maybe going up, not such a good option. I 
would look up here at Congress, and we are stiffening the laws 
on clean air, so that means coal plants, which are 62 percent 
of my electricity, are under some pressure. If Congress caps 
carbon, as I think it should, in some reasonable way over time, 
then according to the Energy Information Administration, there 
will be 100 new nuclear plants before 2030. Even according to 
the natural gas industry, there will be 26. According to the 
Nuclear Power Institute, there will be 46.
    So there is going to be an explosion of nuclear plants over 
the next 30 years in terms of growth and in terms of capacity. 
We want to make sure that safety is paramount in that.
    As I am chairman of the TVA board, or if I were, in looking 
at my options, I would see that carbon recapture is not quite 
ready for coal. I would see that wind and solar are not really 
alternative energies in our region. There is only one wind farm 
in the southeast, and on a hot day in August, only one turbine 
was turning on a day when we were buying 6,000 extra megawatts 
of power.
    So TVA did the only thing it could do. It opened the Browns 
Ferry Nuclear Reactor in May. That is 1,110 megawatts. It 
approved Watts Bar 2 for building in 5 years. That is another 
1,100. It has an application in for Bellefonte. That is another 
large nuclear plant.
    Seventy percent of our clean energy in America is nuclear, 
even thought it is only 20 percent of the production. It looks 
to me like if we are really serious about clean air, if we are 
really serious about climate change, if we are really serious 
about having large amounts of low-cost, reliable power, so our 
jobs can be competitive here, then our only real options in the 
near term are conservation, about which we should be much more 
aggressive, and nuclear power.
    It is absolutely critical that we do our job in oversight 
with you as you do your job in oversight, to assure the people 
in our region that this growth of nuclear power can be as safe 
as it has been in the United States Navy since the 1950s when 
there have been, I guess, a classified number of ships and a 
classified number of reactors. But we know for sure that there 
has never been a nuclear accident since that Navy was put on 
the water.
    So thank you, Mr. Chairman, for this opportunity.
    Senator Carper. Senator Alexander is a 23-year veteran of 
the U.S. Navy. I want to thank you for that opening statement.
    Senator Cardin, we are glad you are here. Welcome.

  STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR FROM THE 
                       STATE OF MARYLAND

    Senator Cardin. Mr. Chairman, first, thank you for your 
courtesy to allow me to sit in on the subcommittee today. This 
is an extremely important subject, and I thank you very much 
for holding this hearing.
    I want to agree with my colleagues, our energy policy in 
this Country, which we are struggling with right now, some 
legislation that is moving through the Congress, is aimed at 
trying to make this Country energy-independent. That is our 
goal. It is important to be energy-independent for national 
security. We don't want to have to deal with countries halfway 
around the world where we disagree with their policies because 
we need their oil affecting our foreign policy. So we need it 
for national security.
    We also need it for economic reasons. We need to have a 
reliable source of energy, so that those economic aspects of 
our economy are not again dependent upon what happens because 
of our dependency on oil.
    Then our energy policy must be sensitive to the 
environment. We need to rely less on fossil fuels and those 
energy sources that emit greenhouse gases. I think this 
committee is particularly sensitive to that aspect.
    So for all those reasons, nuclear energy is a critical part 
of our energy discussions. In my own State of Maryland, we rely 
upon nuclear power sources for 28 percent of our electricity. 
We fully anticipate that number may well go up. So it is a very 
important issue and one that I am very much committed to 
working on with the members of this committee and the Senate, 
so that we have a responsible energy policy in this Country.
    Having said that, I am very concerned about safety. What 
happened at Peach Bottom Nuclear Plant is unacceptable, it is 
outrageous, where the security people literally fell asleep on 
the job. That plant is located in Pennsylvania, just a few 
miles from the State of Maryland and affects the safety of our 
entire region. So I hope, Mr. Chairman, that our witnesses 
today will talk about that and talk about steps that are being 
taken to make sure that that never happens at a nuclear 
powerplant in our Country, that we have security to protect us 
from potential harm.
    So I appreciate this hearing, because I do think it is 
critically important that we have the right energy policies in 
this Country, including nuclear, and that we assure the people 
of our Nation that will take steps to make them as safe as we 
possibly can in regards to any of our energy production.
    With that, Mr. Chairman, I will look forward to listening 
to the witnesses.
    Senator Carper. Thank you, Senator Cardin. We are glad that 
you could sit in with us.
    In welcoming our first panel of commissioners, let me just, 
I am moved to just say one more thing before I recognize them. 
Senator Inhofe said roughly a year or so ago he began holding 
oversight hearings. I think he said it had been some time, many 
years before, during which hearings were not held. If you think 
about it, going back a decade or so, and looking at today, 
today, I don't know if a decade ago we would have thought oil 
would be $80 a barrel. It is. A decade ago I don't know that we 
would have anticipated the Nation's trade deficit being three 
quarters of a trillion dollars. It is. A decade ago I don't 
think we would have thought much about the prospects of finding 
a new Northwest Passage. But apparently this summer, one has 
opened up.
    A decade ago, we thought a lot about cars, trucks and vans. 
I don't know that any of us were thinking much about the future 
of plug-in hybrids, and the folks at Chevrolet are hoping to 
have the Volt on the roads in about 2 or 3 years. It is going 
to be running on electricity. My hope is that there will be 
across this Country a lot of cars, truck and vans that are 
running on electricity. We have to find it from some place.
    The stakes are high for our Country in getting it right 
with respect to this nuclear renaissance. The stakes are very 
high. There is little room for error. I think each time that 
you have come before us, I have always said, if it isn't 
perfect, make it better. Everything that I do, everything that 
we do, we know we can do better. That has to be true in this 
case as well.
    If we get this right, the application process, bringing on 
the new capacity, making sure that the folks that are out there 
running these 100 plus reactors today are minding their Ps and 
Qs every single day, if we get this right, it bodes well for 
our Country. If we don't get it right, we have a severe price 
to pay. We have to get it right.
    With that having been said, Chairman Klein, we welcome you 
and you are recognized for 5 minutes. Your full statement will 
be made part of the record. Thank you.

    STATEMENT OF HON. DALE E. KLEIN, CHAIRMAN, U.S. NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Klein. Thank you, Mr. Chairman, members of the 
committee.
    It is a pleasure to appear before you today with my 
colleagues, Commissioners Jaczko and Lyons. On behalf of the 
Commission, I thank you for your continued support of the NRC's 
important work.
    I would like to focus on a few specific developments that 
have occurred since the Commission last appeared before you in 
April. But first, let me just again comment briefly, this is 
the first time that we have appeared before you without 
Commissioner McGaffigan for some time. He will certainly be 
missed.
    As you know, we are entering a period of greatly increased 
activity at the NRC. Last week, we received the first of five 
full applications that we believe will arrive within this 
calendar year. Over the next 18 months, we expect to receive 
about 20 applications for about 30 reactors. We believe that as 
a result of our planning efforts, the NRC has the skilled 
workforce to complete thorough reviews in a timely and 
effective manner.
    Our readiness is broadly confirmed by the Government 
Accountability Office draft report on the reactors that was 
released in August. The report accurately identifies both the 
accomplishments and the challenges that the agency faces in new 
reactor licensing reviews.
    Mr. Chairman, let me turn for a moment to the NRC's 
inspection program currently with our licensed reactors. At the 
April hearing, some members of the committee asked for more 
information comparing the independent safety assessment 
inspection conducted at Maine Yankee in the mid-1990s to the 
current risk-informed, performance-based reactor oversight 
program. My written testimony discusses this in some detail, 
but let me just say a few comments about the independent safety 
assessment in the 1990s.
    While that was an important tool at the time, the 
Commission believes that today's reactor oversight process is 
far more superior and effectively incorporates the elements of 
the Maine Yankee independent safety analysis while providing 
more rigorous and thorough continued evaluation. The reactor 
oversight program is an independent safety assessment.
    Mr. Chairman, my written testimony also addresses the NRC's 
response to two matters of concern that have arisen in recent 
months. The first is the GAO investigation into materials 
licensing in which the GAO created a fake business in order to 
obtain a radioactive materials license from the NRC, and then 
altered that license in order to purchase larger quantities of 
radioactive sources than were authorized.
    The second issue is the March 6, 2006 incident at Nuclear 
Fuel Services that Senator Alexander had mentioned, in which a 
highly-enriched uranium material leaked in a glove box. While 
the Commission summarized the incident in its May 2007 report 
to Congress on abnormal occurrences in 2006. We recognize that 
there were numerous opportunities in which the NRC could have 
and should have promptly informed Congressional oversight 
committees.
    The NRC takes both incidents very seriously and we are 
implementing a series of concrete steps to fix the problems. 
These are discussed in greater detail in my written testimony.
    Mr. Chairman and members of the committee, as our agency 
prepares for the new reactor applications that are expected, we 
continue to face significant challenges. But we are confident 
that the plan we have in place will allow us to fulfill our 
added responsibilities while also remaining focused on the 
safety and security of the existing fleet of reactors, fuel 
cycle facilities, and nuclear materials. I want to assure you 
that we are doing everything we can to continue protecting the 
American people and the environment.
    Mr. Chairman, this concludes my opening statement, and I 
ask that my written testimony be entered into the record. We 
look forward to your questions.
    [The prepared statement of Mr. Klein follows:]
     Statement of Dale E. Klein, Chairman, U.S. Nuclear Regulatory 
                               Commission
    Mr. Chairman and Members of the Committee, it is a pleasure to 
appear before you today along with my colleagues, Commissioners Jaczko 
and Lyons. On behalf of the Commission, I thank you for your continued 
support of the NRC's work to protect public health and safety and the 
common defense and security.
    I would like to take this opportunity to focus on a few specific 
developments that have occurred since the Commission last appeared 
before you in April. Before I turn to these agency activities, however, 
I want to highlight one particular event that affected all of us very 
deeply. This is the first hearing at which the Commission has appeared 
without our long time colleague and friend Ed McGaffigan. His passing 
has left a void in the agency and at this table this morning. I want to 
thank all of you for your kind words of comfort to Ed's family.
                 gao report on new license applications
    In August, the Government Accounting Office released a draft 
report, ``Nuclear Energy: NRC's Workforce and Processes for New Reactor 
Licensing are Generally in Place, but Uncertainties Remain as Industry 
Begins to Submit Applications'' (GAO-07-1129). The report discusses the 
NRC's ability to manage its workload in light of the anticipated 
receipt of 20 new reactor license applications in the next 18 months. 
The Commission appreciates the time and effort taken by GAO to address 
this important topic, and we consider the draft report to be 
comprehensive, fair, and balanced. The report accurately identifies the 
accomplishments as well as the challenges that the agency faces in 
preparing its workforce for new reactor licensing reviews.
    As the Members of the Committee are aware, the NRC, with the 
support of Congress, has been addressing this issue as a high priority 
for several years. The agency is continuing to take aggressive steps to 
prepare for the challenges outlined in the report. Our Office of New 
Reactors (NRO), in particular, is hiring staff with the appropriate 
skill sets and is providing essential training to staff members. In 
addition, NRO is taking steps to ensure that combined license 
application reviews are consistent, coordinated, and efficient.
    Last week, the NRC received the first of five applications (for a 
total of 9 new reactors) we believe will arrive this calendar year. As 
you know, the NRC has licensed over 104 nuclear powerplants in the 
U.S., and I want to assure you that although the NRC has not licensed 
any new plants recently, the agency is prepared to address this 
important activity. The Commission believes that as a result of our 
efforts in recruitment, training, retention, and knowledge management, 
the NRC has the skilled work force to complete thorough reviews in a 
timely and effective manner.
      reactor oversight process vs. independent safety assessment
    Another issue that I would like to discuss with you this morning is 
NRC's inspection program for currently licensed reactors. At the April 
hearing and in subsequent interactions, Members of the Committee 
expressed a desire for more information comparing the Independent 
Safety Assessment inspection conducted at Maine Yankee in the mid-1990s 
and the current, risk-informed, performance-based Reactor Oversight 
Process.
    The NRC conducted an Independent Safety Assessment at Maine Yankee 
in 1996. It is important to note that the Maine Yankee Independent 
Safety Assessment occurred prior to the development of the Reactor 
Oversight Process and in response to a unique set of concerns connected 
with the facility's power uprate application and allegations of 
misconduct.
    While the Independent Safety Assessment was the proper tool to use 
in 1996, the Commission believes that today's Reactor Oversight Process 
is far superior to the Independent Safety Assessment process. In 
developing the Reactor Oversight Process, the NRC took the lessons 
learned from the Maine Yankee Independent Safety Assessment and 
incorporated its best features into the new Reactor Oversight Process, 
which is designed to be objective and predictable, meaning that given 
comparable performance, different licensees will receive the same level 
of regulatory oversight. Unlike the Maine Yankee Independent Safety 
Assessment, which occurred after performance deficiencies were 
detected, the Reactor Oversight Process directly couples performance 
deficiencies at any plant with increased inspection, focuses increased 
inspection resources to address declining plant performance, and 
provides insight into the overall root and contributing causes of 
performance deficiencies. The inspections gather additional information 
to be used in deciding whether continued operation of the facility is 
acceptable and whether additional regulatory actions are necessary to 
address declining plant performance. The Reactor Oversight Process 
inspection modules utilize on-site inspectors as well as personnel from 
the regional offices, NRC headquarters, and outside experts to provide 
a diversity of technical expertise which enhances the degree of 
independence of the inspection effort. The regulatory tools available 
to the inspectors, regional and headquarters management, and to the 
Executive Director for Operations are extensive.
    When a plant experiences an isolated operational event or a 
degraded plant condition that merits immediate enhanced oversight, a 
prompt, reactive inspection will take place. Similar to the Maine 
Yankee Independent Safety Assessment, the highest level of reactive 
inspection requires that the inspection team include members who are 
independent from significant involvement in the licensing and 
inspection of the facility.
    Although the Commission is confident that the Reactor Oversight 
Process is superior to the Maine Yankee Independent Safety Assessment, 
we continue to improve the process. For example, in 2006, the NRC 
staff, at the direction of the Commission, significantly enhanced the 
way the NRC reviews design issues. The resulting Component Design Basis 
Inspection procedure, which is an important element of the Reactor 
Oversight Process, is a comprehensive team inspection to verify that 
design bases have been correctly implemented for selected risk 
significant components and that operating procedures and operator 
actions are consistent with design and licensing bases. This inspection 
procedure ensures that selected components are capable of performing 
their intended safety functions. The NRC's enhanced Component Design 
Basis Inspection has been performed at Indian Point Unit 2 and resulted 
in only minor findings. An equivalent inspection is scheduled to be 
performed at Indian Point Unit 3 this month.
    Recently, NRC staff performed a comparison of the Maine Yankee 
Independent Safety Assessment and the current Reactor Oversight Process 
to determine if there are any gaps in the Reactor Oversight Process. 
After review of the results of the staff's efforts, the Commission 
remains convinced that the Reactor Oversight Process effectively 
incorporates the elements of the Maine Yankee Independent Safety 
Assessment and provides better oversight than an Independent Safety 
Assessment, since the Independent Safety Assessment was a one-time, 
``snapshot'' inspection and the Reactor Oversight Process provides 
continual evaluation.
    While circumstances that led to the Maine Yankee Independent Safety 
Assessment do not exist at Indian Point, performance issues at Indian 
Point have resulted in an increased level of oversight. NRC believes 
that the current increased level of oversight at Indian Point is 
appropriate and that the performance of the current Reactor Oversight 
Process inspection regimen for Indian Point will effectively assess the 
same elements of plant operation that would have been addressed by the 
Independent Safety Assessment, albeit over a longer period of time.
                gao investigation of materials licensing
    A third issue is the GAO investigation of Materials Licensing. 
Earlier this year, GAO created a fake business in order to obtain a 
valid radioactive materials license from NRC. After NRC approved the 
license, GAO investigators altered the license so it appeared that this 
company was authorized to purchase larger quantities of radioactive 
sealed sources than the maximum listed on the approved license. GAO 
then sought to purchase, from two U.S. suppliers, gauges containing 
sealed radioactive material. The gauges GAO sought to purchase were 
Category 4 sources under the International Atomic Energy Agency's Code 
of Conduct which contains 5 categories of sources. GAO also attempted 
to obtain a license from the State of Maryland, an Agreement State, but 
withdrew the application after Maryland license reviewers indicated 
they would visit this company before granting the license.
    The NRC has a risk-informed approach to regulating sources, with 
greater controls imposed on the most significant sources. The 
Commission recognizes that GAO identified a gap in our program for 
protecting lower risk sources. As soon as GAO informed us of the 
problem, we took immediate action to address the weaknesses in our 
licensing process. Within days, NRC suspended the review of all new 
applications for materials licenses until it could determine what 
interim corrective actions were necessary to resolve the weaknesses. 
NRC discussed the issues with the Agreement States. On June 12, 2007, 
NRC issued supplemental guidance with additional screening criteria 
intended to help the NRC license reviewers determine whether a site 
visit or face-to-face meeting with a new license applicant is required. 
Such visits are now required by NRC prior to approval of a broader 
range of applications if the applicant for the new license is not an 
existing Agreement State or NRC licensee. NRC has also established a 
pre-licensing working group to develop improved guidance addressing the 
weaknesses found by GAO.
    In addition, the NRC staff has developed an action plan detailing 
other steps NRC plans to take, and the resources needed, which the 
Commission approved last month. In approving the plan, the Commission 
emphasized the importance of developing practical common sense 
approaches to verify the validity of license applicants.
    The action plan consists of three distinct but integrated 
components. The first component is the previously mentioned Pre-
Licensing Working Group, which is being chaired by both a NRC Regional 
representative and an Agreement State Program Director. The Pre-
Licensing Working Group is focusing on relatively short-term fixes that 
can be implemented quickly while longer term solutions can be 
considered and implemented as appropriate. The second component is an 
independent, external review panel consisting of three knowledgeable 
but independent individuals. This second panel will look at the overall 
materials security program concerning these lower risk sources and make 
recommendations, if appropriate, for fundamental program changes. The 
third component is a Materials Working Group that will be led by NRC 
Headquarters and have representatives from both the NRC Regions as well 
as the Agreement States. This third group will review the efforts of 
the other two components as well as solicit additional thoughts and 
make recommendations for long term improvements in the regulatory 
process. Since an overwhelming majority of these lower risk sources are 
located in Agreement States, it is vital to have Agreement State 
participation in this action plan.
                         nuclear fuel services
    Finally, I want to discuss with you the March 6, 2006 incident at 
Nuclear Fuel Services in Erwin, Tennessee. During the transfer of a 
solution containing highly enriched uranium (HEU) through a transfer 
line, approximately 35 liters of highly enriched uranium solution 
leaked into a glove box and passed through drains to the floor. Upon 
discovery, the operator promptly stopped all processing of highly 
enriched uranium in the facility. The Commission summarized the 
incident in its May 2007 report to Congress on Abnormal Occurrences in 
2006.
    The Commission recognizes that there were numerous opportunities 
prior to the abnormal occurrence report in which the NRC could have and 
should have promptly informed Congressional Oversight Committees of the 
highly enriched uranium spill event at NFS. We are instituting actions 
to ensure that Congress is informed in a timely fashion of future 
events involving our regulated activities. Regardless of the 
sensitivity or classification of information, we will promptly inform 
Congress of significant events and agency actions in response to those 
events.
    We also recognize that the NRC could have shared more information 
about the event with other agencies and the public. As a result, the 
Commission directed the staff to work with the Department of Energy's 
Office of Naval Reactors to revise existing guidelines and procedures 
to ensure that information on licensed activities involving the 
Category I fuel facilities is publicly available. The Commission's goal 
is to strike an appropriate balance between a regulatory process that 
is open to the public and the protection from disclosure of sensitive 
information which could be helpful to potential adversaries. The 
revised guidelines have been approved by the Commission. In September, 
we provided public access to hundreds of previously withheld documents 
related to NFS-Erwin, BWX Technologies, and other fuel cycle 
facilities.
                               conclusion
    Mr. Chairman and Members of the Committee, as our agency prepares 
for the numerous new reactor applications that are expected, we 
continue to remain focused on the safety and security of the existing 
fleet of reactors, fuel cycle facilities, and nuclear materials. I want 
to assure you that we are doing everything we can to continue 
protecting the American people and the environment.
                                 ______
                                 
 Responses by Dale E. Klein to Additional Questions from Senator Boxer
    Question 1. In your written testimony you note that the Reactor 
Oversight Process requires use of independent inspectors, similar to 
those used during the Maine Yankee Independent Safety Assessment, who 
have not had significant involvement at the facility when a reactive 
inspection takes place due to degraded plant conditions or an 
operational event. If independence is important during reactive 
inspections, it should also be important during baseline inspections 
conducted by Nuclear Regulatory Commission (NRC) inspectors throughout 
the year. Can you explain how NRC's on-site inspectors maintain their 
independence?
    Response. The concept of independence is institutionalized in NRC's 
routine procedures and practices. NRC code of conduct standards provide 
that employees must take appropriate steps to avoid even an appearance 
of a 'loss of impartiality' in the performance of their official 
duties. Inspectors are not allowed to own securities, such as company 
stock, that could cause a conflict of interest during an inspection. 
NRC employees who have previously worked for a licensee (including the 
parent companies) are not assigned to inspect those facilities for at 
least a 1-year period and this time frame may be extended if warranted.
    In addition to inspections conducted by inspectors located at the 
regional office, at least two resident inspectors are assigned full-
time to each site. To maintain independence, the maximum time a 
resident inspector can be assigned to a site is 7 years, unless a 
longer period is specifically approved by the Executive Director for 
Operations.
    Both headquarters and regional office management visit the sites on 
a routine basis to assess the adequacy of the inspection effort and the 
independence of the resident inspectors.
    Overall, we believe the necessary level of inspector independence 
is maintained by the processes and procedures described above.

    Question 2. There has been a lot of attention placed on getting the 
NRC ready to handle new reactor licenses. As the NRC works to 
streamline the license application process, how will you ensure that 
the NRC isn't pressured into cutting corners to speed the review 
process?
    Response. Safety, security, and environmental protection are the 
paramount concerns of the NRC's review process. The NRC's first 
priority, regardless of schedules, will be to ensure safety, and 
therefore, the NRC will not cut corners to speed the review process.
    The NRC expects high quality license applications. The timeliness 
of an application review can be increased without compromising safety 
and security provided that industry submits complete high quality 
applications. Specific review schedules for individual applications 
will be determined when applications are docketed, and will consider 
factors such as degree of standardization, technical acceptability, and 
completeness of the application. With the unprecedented increase in our 
workload, including approximately 19 combined construction and 
operating license applications, the NRC will need to hire qualified 
staff and develop strategies for contract support in key technical 
areas to ensure that resources are available when needed to adequately 
perform the expected licensing reviews. In addition, the NRC staff has 
developed a review process titled, ``design-centered review approach,'' 
to review the expected combined license applications. A standardized, 
uniform, design-centered approach to both COL application development 
and NRC review is expected to significantly enhance effectiveness. The 
NRC staff has updated the regulatory infrastructure necessary to review 
and approve new reactor applications for light water reactor designs 
(including contents of a COL application) and has promulgated revisions 
to 10 CFR Part 52, along with conforming changes to other NRC 
regulations. In addition, since the review process involves multiple 
layers of reviewers, which include the key technical leads, project 
managers, and management, this system of checks and balances will be 
maintained to address technical or regulatory concerns within the 
framework of the license application process. Most importantly, the 
Commission has made it very clear to the staff that safety is the 
utmost concern going forward. These activities will enhance the NRC's 
regulatory effectiveness and efficiency in implementing its new reactor 
licensing and approval processes, and allow applicants to provide 
focused and complete applications that will minimize the need for 
supplemental information, and still serve standardized reviews of high 
quality.

    Question 3. In April of 2007, the NRC approved a rule that changed 
the definition of ``construction'' to allow some construction 
activities at nuclear plants to commence prior to the issuance of a 
construction permit or combined operating license (COL) application. 
The NRC's actions could limit public input and will allow construction 
activities to begin which could prejudice NRC's decision on a 
subsequent construction permit or COL application. Please provide an 
explanation for changing the definition of ``construction'' in NRC 
regulations, as well as the time frame by which you expect this change 
to go into effect. In addition, please provide the legal analysis of 
the NRC that determined that this action is consistent with current 
statutory and case law.
    Response. Prior to approving a final rule, the NRC follows a 
process required by the Administrative Procedure Act (APA) (5 U.S.C. 
553) and issues a proposed rule in the Federal Register to disclose its 
contemplated rule language and provide the public with an opportunity 
to comment on the proposed rule language. The NRC's proposed rule on 
Limited Work Authorizations (LWA) for nuclear powerplants was published 
for comment in the Federal Register on October 17, 2006. Thirteen 
comments on the proposed rule from various stakeholders, including 
those that represented public interest groups as well as industry, were 
received and were considered in the development of the final rule.
    The final rule was published in the Federal Register on October 9, 
2007 (72 FR 57415) and became effective on November 8, 2007. The NRC's 
legal analysis that determined that this action is consistent with 
current statutory and case law is set forth in the statements of 
consideration for the final LWA rule, 72 FR 57425-57430. As discussed 
in the final rule, the NRC determined that the former definition of 
construction exceeded the agency's authority, inasmuch as those 
activities formerly defined as construction--which are now excluded 
from construction under the final LWA rule--do not have a reasonable 
nexus to radiological health and safety or common defense and security 
for which NRC regulatory oversight is necessary and/or the most 
effective approach for ensuring reasonable protection to public health 
and safety and common defense and security. See 72 FR 57426.
    The NRC does not agree that the changes to the LWA rule could limit 
public input. The NRC's regulatory regime already included the LWA 
process, and the rule does not modify or change the public's ability to 
participate in the licensing process. The NRC believes that the LWA 
rule may have the effect of enhancing the ability of external 
stakeholders to participate in a hearing to resolve their issues with 
respect to a particular nuclear powerplant. Because of resource 
limitations, many public stakeholders have expressed their concern that 
the broad range of issues, addressed by the NRC, at each stage of 
licensing make it difficult for stakeholders to seek resolution in an 
NRC hearing for the full range of issues that they are interested in. 
For these stakeholders, the LWA process--by separating out a defined 
set of issues to be resolved in advance of the underlying combined 
license or construction permit proceeding--allows public stakeholders 
to focus their resources on the relevant issues in a LWA hearing. The 
process provides an orderly sequencing of the overall set of issues 
that must be resolved, without introducing unlawful segmentation. The 
NRC believes that if one considers the revised process in this light, 
the conclusion is that the LWA process enhances, rather than detracts 
from, participation in the licensing process by interested members of 
the public who are resource limited.
    The NRC also does not agree that allowing certain activities 
formerly identified as construction to begin prior to NRC involvement 
could prejudice NRC's decision on a subsequent construction permit or 
COL application. The final LWA Rule includes conforming provisions in 
the NRC's regulations governing the agency's compliance with NEPA, that 
are intended to ensure that the environmental impacts of pre-
construction activities are considered as ``cumulative impacts,'' in 
the NRC's determination of environmental impacts attributed to the 
issuance of a construction permit or COL application. Thus, regardless 
of the ``baseline'' for determining the environmental impacts of the 
activities approved by the NRC, the full scope of environmental impacts 
associated with the nuclear powerplant will be disclosed as part of the 
NRC's NEPA process.
    Response by Gregory B. Jaczko. As I have previously indicated, I do 
not believe this rule is necessary or supportive of the NRC's mission. 
My prior votes have expressed my concern with some of the changes to 
the National Environmental Policy Act (NEPA) process envisioned in this 
final Limited Work Authorization (LWA) rule. One of the most 
problematic, and the one I believe places this agency in the most 
jeopardy, is the issue of what the appropriate baseline is for the 
environmental reviews necessary once the increased activities allowed 
pursuant to these changes occur at a potential site. I believe this 
final rule regarding LWAs also increases the burdens placed upon the 
Atomic Safety and Licensing Board Panel (ASLBP) at a time when the 
agency does not have sufficient experience to determine the impacts on 
the ASLBP of the current anticipated wave of new reactor applications. 
I am concerned with the potential loss of public confidence in our 
environmental review process if we proceed in this manner.

    Question 4. Your written testimony mentions a recent GAO 
investigation of NRC materials licensing through which GAO 
investigators were able to obtain and alter a radioactive materials 
license. The NRC does not require an on-site inspection of the license 
applicant prior to issuing a license for a Category 3 radioactive 
sealed source. Some states, such as Maryland, have determined that pre-
licensing inspections are necessary. Do you think that the NRC and 
agreement states should have the same requirements? In addition, do you 
expect the NRC to change its requirement for pre-license inspections as 
a result of this investigation? If not, why not?
    Response. In response to the GAO's findings, the NRC immediately 
began conducting on-site inspections or in-office meetings for all new 
radioactive materials license applicants. Exceptions may be made for 
applicants who already possess, or are listed on, a valid NRC or 
Agreement State license. The NRC and the Agreement States are working 
together to revise the pre-licensing guidance, which prescribes when a 
pre-licensing inspection should be performed. Agreement States pre-
inspection requirements will have to be at least as stringent as those 
contained in the revised pre-licensing guidance. Implementation of the 
pre-licensing guidance will be verified through the NRC's Integrated 
Materials Performance Evaluation Program, which is used to evaluate NRC 
and Agreement State radioactive materials programs.

                                 ______
                                 
 Responses by Dale E. Klein to Additional Questions from Senator Inhofe
    Question 1. Those who argue that there is a need for an Independent 
Safety Assessment suggest that the NRC is not independent enough. 
Please summarize the procedures and processes that the NRC has in place 
to ensure it remains independent and objective.
    Response. The Energy Reorganization Act (ERA) of 1974 established 
the NRC as an independent regulatory agency without responsibilities 
for promoting nuclear development. The NRC's status as an independent 
regulatory agency means that its regulatory decisions ordinarily cannot 
be dictated by the President or by other Executive Branch Agencies. No 
more than three of the five Commissioners may be members of the same 
political party. Commissioners may be removed from office only for 
inefficiency, neglect of duty, or malfeasance in office.
    As part of the Reactor Oversight Process (ROP), the NRC performs 
inspections of operating reactors. The NRC is committed to independent, 
thorough, and objective inspections at all NRC-regulated facilities. 
NRC inspectors undergo a comprehensive qualification and training 
program and have the primary responsibility for ensuring that licensees 
operate plants safely and in accordance with their license and NRC 
regulations and that their inspection findings are accurately reported, 
and referenced material is correctly characterized.
    The concept of independence is institutionalized in NRC routine 
procedures and practices, with standards and procedures set forth in 
its Inspection Manual. For example, Chapter 0102 of the Inspection 
Manual, ``Oversight and Objectivity of Inspectors and Examiners at 
Reactor Facilities,'' provides requirements and guidance for ensuring 
objectivity and that inspectors implement the NRC's programs in an 
unbiased manner, free from partiality and antagonism toward a licensee 
or vendor. These requirements are used by NRC managers as a guide for 
employee conduct and as part of inspector performance reviews. Both 
headquarters and regional offices visit the sites on a routine basis to 
assess the adequacy and objectivity of the inspection effort. 
Inspection Manual Chapter 1201, ``Conduct of Employees,'' provides 
standards to prevent the loss of impartiality. This chapter provides a 
standard of conduct that must be followed by NRC employees and contains 
NRC policy based on government-wide rules, such as prohibiting the 
acceptance of gifts from licensees and business relationships with 
employees of the licensee and requiring inspectors to report to their 
supervisors close friendships with licensee employees. It also 
incorporates general governmental ethics rules, which serve to promote 
the NRC's objectivity and independence. NRC regulations preclude 
inspectors and other employees from owning securities issued by 
utilities and other major entities regulated by the NRC. Criminal 
conflict of interest laws prohibit NRC employees from participating 
personally and substantially in any matter that could directly and 
predictably affect the employee's financial interest or of family 
members or an organization with which the employee is negotiating for 
prospective employment.
    NRC employees who have previously worked for a licensee (including 
their parent companies) are not assigned to inspect those facilities 
for at least a 1-year period, and this time frame is generally extended 
beyond 1 year. To maintain independence, the maximum time a resident 
inspector can normally be assigned to a site is 7 years. As part of the 
ROP, inspections conducted as a result of an incident or poor 
performance require that the inspection team include members without 
significant involvement in the licensing and inspection of the 
facility. Finally, inspectors from headquarters or the regions are at 
times assigned to inspect plants in other regions.
    The NRC also strives to promote openness in its inspection process. 
State nuclear officials are typically allowed to accompany NRC 
inspectors and observe inspection activities. These State officials 
have the opportunity to air any concerns with the NRC inspectors. 
Following inspections, the NRC holds exit meetings with the licensees 
to discuss the inspection findings. These meetings are generally open 
to the State officials.
    Plant employees and members of the public also have an opportunity 
to bring safety concerns directly to the NRC's allegations program. 
They may also petition the NRC to take enforcement action against a 
licensee under 10 C.F.R. 2.206. If plant employees or members of the 
public wish to make complaints about the conduct of an NRC inspector or 
employee, they may also raise the issue with the employee's supervisor 
or with the NRC Office of the Inspector General.
    The NRC Office of the Inspector General (OIG) continually monitors 
specific issue areas, including the NRC's regulation of nuclear 
reactors. The OIG performed an independent audit on the ROP (Audit 
Report OIG-05-A-06, ``Audit of NRC's Baseline Inspection Program,'' 
dated December 22, 2004). The results of the audit were positive, 
identifying only minor opportunities for enhancement. More recently, 
the OIG has performed an audit of the NRC's reactor license renewal 
process. (Audit Report OIG-07-A-15, ``Audit of NRC's License Renewal 
Program,'' dated September 6, 2007). The Government Accountability 
Office also routinely conducts audit and program reviews of NRC 
activities.
    The Advisory Committee on Reactor Safeguards (ACRS) provides 
additional independent review of safety issues. An ACRS report is 
required prior to granting a license renewal or power uprate as well as 
for combined license applications for new reactors. ACRS meetings are 
open to the public as required by the Federal Advisory Committee Act.
    The NRC is confident that its policies and procedures ensure the 
independence and integrity of NRC inspection efforts.

    Question 2. Please describe all opportunities within the Reactor 
Oversight Process for State officials and other stakeholders to 
participate.
    Response. As a matter of management philosophy, the NRC maintains 
an ``open door'' policy with regard to access by the public or State 
and local officials to the NRC staff, or to publicly available 
electronic documentation concerning a licensee's performance.
    The NRC staff conducts monthly Reactor Oversight Process (ROP) 
meetings which are open to the public. The dates and times of these 
meetings are posted on the NRC Web site and are published in the 
Federal Register Notice. The NRC also solicits feedback, during a 
biennial survey, on the ROP from the licensees and other external 
stakeholders.
    The NRC has a long-standing policy of permitting State 
representatives to observe NRC inspections. This policy sets out the 
general framework for NRC's cooperation with States, including keeping 
the States informed in a timely manner and establishing the process for 
States to either observe or participate in NRC inspections. In fact, it 
is not uncommon that some State representatives accompany NRC 
inspectors during their inspections.
    In addition, the NRC conducts an annual public meeting with the 
licensee to discuss the results of the NRC's annual assessment of the 
licensee's performance. The location of the meeting is held in the 
vicinity of the licensee's plant so that local stakeholders can attend. 
Often, the NRC holds a town hall type meeting with local stakeholders 
to discuss the ROP process.
    Detailed information about the ROP is also available to the public 
on the NRC Web site. This includes inspection reports, findings 
summary, and the ROP action matrix for each plant.

    Question 3a. Does the NRC believe that an Independent Safety 
Assessment would add value in terms of safety or improving public 
confidence in the NRC? Why/why not?
    Response. No. The NRC believes that the Reactor Oversight Process 
(ROP) effectively incorporates the elements of the Independent Safety 
Assessment (ISA) and provides better oversight than an ISA, since the 
ISA was a one-time, ``snapshot'' inspection and the ROP provides 
continual evaluation of each plant. The NRC believes that the ROP adds 
value in terms of safety and public confidence because the inspections 
provide an objective, predictable, understandable, and risk-informed 
approach to support increased NRC oversight, over a longer period of 
time.
    In developing the ROP, the NRC used the lessons learned from the 
Maine Yankee ISA, and incorporated its best features into the ROP, 
which is designed to be objective and predictable. Unlike the Maine 
Yankee ISA, which occurred after performance deficiencies were 
detected, the ROP directly couples performance deficiencies at any 
plant with increased inspections, focuses increased inspection 
resources on declining plant performance, and provides insight into the 
overall root and contributing causes of performance deficiencies. The 
ROP inspections gather additional information to be used in deciding 
whether continued operation of the facility is acceptable, and whether 
additional regulatory actions are necessary to address declining plant 
performance.

    Question 3b. Please provide the NRC's comparison of the Maine 
Yankee Independent Safety Assessment with the Reactor Oversight 
Process.
    Response. Recently, the NRC staff performed a comparison of the 
Maine Yankee (MY) Independent Safety Assessment (ISA) and the current 
Reactor Oversight Process (ROP) to determine if there were any gaps in 
the ROP. After review of the results of the staffs efforts, the NRC 
remains convinced that the ROP effectively incorporates the elements of 
the MY ISA and provides better oversight than the ISA, since the ISA 
was a one-time ``snapshot'' inspection and the ROP provides continual 
evaluation.
    The ISA was started in July 1996 and completed in October 1996. It 
focused on conformance of the facility to its design and licensing 
bases, operational safety performance, licensee self assessments, 
corrective actions and improvement plans, and determination of the 
causes of safety-significant findings.
    Description of the ROP.--The ROP is anchored in the NRC's mission 
to ensure public health and safety in the operation of commercial 
nuclear powerplants. To measure plant performance, the oversight 
process focuses on seven specific ``cornerstones'' that support the 
safety of plant operations: initiating events, mitigating systems, 
barrier integrity, emergency preparedness, occupational radiation 
safety, public radiation safety, and physical protection. These 
cornerstones are evaluated using both performance indicators (Pls) and 
direct inspections. The NRC assessment program collects information 
from inspections and performance indicators in each cornerstone to 
enable the NRC to arrive at objective conclusions about the licensee's 
safety performance. Inspection findings are evaluated for safety 
significance using a generally objective significance determination 
process. Performance indicator data is compared against prescribed risk 
informed thresholds.
    Based on this assessment information, the NRC determines the 
appropriate level of agency response, including supplemental 
inspections focusing on areas of declining performance and pertinent 
regulatory actions ranging from management meetings to orders for plant 
shutdown. The process uses four levels of regulatory response, with NRC 
regulatory review increasing as plant performance declines. The first 
two levels of heightened regulatory review are managed by the 
appropriate NRC regional office. The next two levels call for an agency 
response and involve senior management attention from both headquarters 
and regional offices. The scope of inspections are driven by plant 
performance. A poor performing plant having multiple or long-standing 
significant issues will be inspected using a procedure that 
incorporates processes and techniques originally used in the previous 
Diagnostic Evaluation Team (DET) process that was applied at Maine 
Yankee. For example, in 2006 there were three plants receiving 
increased regulatory attention. In each case, the plant warranted this 
major increase in NRC oversight because plant performance had met 
specific pre-defined criteria.
    Even if there are no earlier signs of declining plant performance, 
if a plant experiences operational problems or events that the NRC 
believes require greater scrutiny, there will be additional reactive 
inspections. The criteria for initiating these reactive inspections are 
described in the publicly available NRC Management Directive (MD) 8.3, 
``NRC Incident Investigation Program,'' and are typically used about a 
dozen times per year. In some instances the regulatory actions dictated 
by the ROP framework may not be appropriate. In these instances, the 
NRC may deviate from the prescribed inspection program to allow 
modified regulatory oversight for a facility based on specific 
circumstances. Historically there have been 1-3 deviations each year. 
Use of the deviation process requires senior NRC management approval.
    It should be noted that the Reactor Oversight Process (ROP), is 
implemented through the use of voluntary initiatives by industry in the 
regulatory process. The ROP uses a Significance Determination Process 
(SDP) to determine the safety significance of most inspection findings 
identified at commercial nuclear powerplants. If violations that are 
more than minor are associated with these inspection findings, they 
will be documented and may or may not be cited depending on the safety 
significance. These violations are not normally subject to civil 
penalties. Violations associated with inspection findings that are not 
evaluated through the SDP are subject to enforcement and civil 
penalties.
    Violations associated with findings that the SDP evaluates as 
having very low safety significance (i.e., green) are normally issued 
as Non-Cite Violations (NCV). While licensees must correct these minor 
violations, they do not normally warrant documentation in inspection 
reports and do not warrant enforcement action.
    Violations associated with findings that the SDP evaluates as 
having low to moderate safety significance (i.e., white), substantial 
safety significance (yellow), or high safety significance (red) are 
cited in a Notice of Violation (NOV) requiring a written response. 
These types of violations may result in enforcement action and the 
issuing of a civil penalty. The Commission reserves the use of 
discretion for particularly significant violations to assess civil 
penalties in accordance with Section 234 of the Atomic Energy Act of 
1954.
    Overall, the current ROP inspection procedures and NRC review 
standards provide essentially full coverage of all key aspects of the 
Maine Yankee ISA, with greater attention to safety culture and better 
focus on potentially risk-significant problems.

    Question 4. Several issues have been raised with the Reactor 
Oversight Process' Significance Determination Process: the timeliness, 
the extent to which inordinate resources are focused on de minimus risk 
evaluations, and the degree to which significance determinations 
accurately reflect safety significance of inspection findings. Since 
these issues affect the NRC's oversight of a licensee and the public's 
perception of that licensee, please describe the NRC's actions to 
resolve these issues.
    Response. The NRC has taken specific steps to improve the 
significance determination process (SDP). These steps include 
identifying internal best practices to improve SDP timeliness, 
monitoring and holding the Office Directors accountable to meeting the 
metrics, and training NRC staff and improving the evaluation tools 
available. The SDP timeliness goal has improved dramatically; however, 
it is important to note that a large amount of the time it takes to 
determine the significance of an event is the result of technical 
discussions between NRC staff and the licensee. In addition, since its 
implementation in April 2000, the SDP has undergone several significant 
enhancements based on feedback from internal and external stakeholders 
and the recommendations of two independent audits.

    Question 5. Over 99 percent of the Reactor Oversight Process 
Performance Indicators are green. Do the performance indicators serve 
the purpose of identifying declining plant performance?
    Response. The NRC staff is confident that the Reactor Oversight 
Process (ROP) identifies early issues of declining plant performance, 
but recognizes the need to continually improve the PI program to better 
identify outliers and to provide more meaningful indications of 
declining plant performance. The NRC staff and industry have made a 
number of changes to the PI program in recent years as discussed below, 
which improve the ability to identify problems in plant performance.
    The NRC staff and many stakeholders remain concerned that the 
current set of performance indicators (PIs) and thresholds could do 
more to identify outliers and detect declining plant performance. As a 
result of internal and external survey responses, the following two PI 
self assessment metrics were not met in CY 2006: whether the PI program 
provides useful insights to help ensure plant safety, and whether the 
PI program identifies performance outliers in an objective and 
predictable manner.
    The Mitigating Systems Performance Index is a risk-informed PI that 
monitors important safety systems. It replaced the Safety System 
Unavailability PIs in April 2006. The NRC staff continues to monitor 
its implementation and to address implementation issues through the 
monthly ROP public meetings and through the ROP PI frequently asked 
question process. In the 1\1/2\ years of its existence, this PI has 
identified performance issues at 21 plants.
    The NRC staff also implemented the Unplanned Scrams with 
Complications PI in the third quarter of CY 2007. It replaced the 
Unplanned Scrams with Loss of Normal Heat Removal PI, a controversial 
PI that caused a large number of issues for the staff and industry. 
Although the NRC staff has received only one report on this PI from 
licensees, it too shows promise of being more effective than the PI it 
replaced.
    The NRC staff plans to continue to improve the ROP and search for 
more effective PIs to replace existing indicators where necessary.

    Question 6a. Please provide a thorough explanation of the bases for 
the NRC's current efforts on Safety Conscious Work Environment; it's 
interactions with licensees and stakeholders and the current process 
for evaluation [of] work environments.
    Response. The NRC's expectations for licensee's establishing and 
maintaining a Safety Conscious Work Environment (SCWE) are outlined in 
a May 14, 1996, policy statement entitled, ``Freedom of Employees in 
the Nuclear Industry to Raise Safety Concerns Without Fear of 
Retaliation.'' A SCWE is defined as an environment in which employees 
are encouraged to raise safety concerns, both to their management and 
to the NRC, without fear of retaliation and where such concerns are 
promptly reviewed, given the proper priority based on their potential 
safety significance, and appropriately resolved with timely feedback by 
licensee management to employees. SCWE is an important attribute of 
safety culture. In general, management commitment to safety will 
promote a SCWE. Possible indications of an ``unhealthy'' safety culture 
include a high number of allegations, or a reticence of licensee 
employees to use internal processes to raise safety concerns.
    All NRC licensees and contractors are expected, although not 
required by regulation, to establish and maintain a SCWE. Such a work 
environment contributes to safe operation of NRC-regulated facilities. 
The NRC issued a Regulatory Issue Summary (RIS), 2005-18, ``Guidance 
for Establishing and Maintaining a Safety Conscious Work Environment'' 
on August 25, 2005, to provide supplementary guidance on fulfilling 
this expectation, originally communicated in the NRC 1996 policy 
statement. The RIS provided guidance on (1) encouraging employees to 
raise safety concerns, including recognition initiatives and 
communication tools, (2) SCWE training content, (3) Employee Concerns 
Program and ombudsman programs, (4) tools to assess the SCWE, including 
performance indicators, behavioral observations, and surveys, (5) 
contractor awareness of SCWE principles and expectations, and (6) 
processes to help detect and prevent discrimination and avoid the 
appearance of discrimination.
    The NRC staff has sought input from external stakeholders during 
the development of the safety culture initiative. Examples of these 
interactions include frequent public meetings, briefings of 
Congressional staff, presentations at advisory committee meetings, 
monthly ROP public meetings with industry representatives and other 
interested members of the public, and industry employee concern program 
forums.
    With regards to the current process for evaluating the SCWE at 
nuclear powerplants, within the ROP baseline inspection procedure (IP) 
71152, ``Identification and Resolution of Problems'', a number of SCWE 
related interview questions are provided for the inspector(s) to use to 
gather insights regarding whether there are impediments to address the 
NRC's expectations for establishing and maintaining a SCWE at the site. 
The questions address: employee willingness to raise concerns, 
management behaviors to encourage raising concerns, the effectiveness 
of the Corrective Action Program and Employee Concerns Program, and the 
effectiveness of management in detecting and preventing retaliation and 
a chilled SCWE. This inspection procedure is typically implemented on a 
biennial basis at each site.
    In addition, allegation trends in general are also reviewed on a 
periodic basis to assess a licensee's SCWE. If a specific allegation of 
an unhealthy, chilled work environment is substantiated, or if the 
trend analysis indicates a concern in this area, the NRC considers 
issuing a Chilling Effect Letter to the licensee. The purpose of the 
Chilling Effect Letter is to publicly notify the licensee of the NRC's 
concern that the SCWE is not healthy and to request information on what 
corrective actions will be taken to address those concerns.

    Question 6b. Please include any lessons learned and potential 
future improvements to the program.
    Response. A weak safety culture was identified as the root cause of 
the Davis-Besse nuclear powerplant reactor vessel head degradation. The 
NRC's Davis-Besse Lessons Learned Task Force recommended that the staff 
review the Reactor Oversight Process (ROP) inspection and assessment 
elements to determine their ability to identify and disposition the 
types of problems that arose at Davis-Besse. In August 2004, the NRC 
initiated efforts to enhance the ROP which resulted in enhancements to 
the ROP consistent with the regulatory principles that guided the 
development of the ROP.

    Question 7a. Please provide a thorough explanation of the bases for 
the NRC's safety culture initiative, the characteristics of an ideal 
safety culture, and how the initiative has been integrated into the 
Reactor Oversight Process.
    Response. A weak safety culture was identified as the root cause of 
the Davis-Besse nuclear powerplant reactor vessel head degradation. The 
NRC's Davis-Besse Lessons Learned Task Force recommended that the staff 
review the Reactor Oversight Process (ROP) inspection and assessment 
elements to determine their ability to identify and disposition the 
types of problems that arose at Davis-Besse. In August 2004, the NRC 
initiated efforts to enhance the ROP which resulted in enhancements to 
the ROP consistent with the regulatory principles that guided the 
development of the ROP.
    The ROP enhancements are intended to: (1) provide better 
opportunities for the NRC staff to consider safety culture weaknesses 
and to encourage licensees to take appropriate actions before 
significant performance degradation occurs at the site, and (2) provide 
the staff with a process to determine the need to specifically evaluate 
a licensee's safety culture after performance problems have resulted in 
the placement of a licensee in the degraded cornerstone column of the 
action matrix.
    Regarding the characteristics of an ideal safety culture, the NRC 
staff developed a set of safety culture components (that collectively 
describe the characteristics of a safety culture for a nuclear 
powerplant licensee) based on its research of industry, international 
documents, and the collective experience of the staff. The NRC staff 
ensured that the safety culture component descriptions fell within the 
NRC's regulatory purview and were applicable to power reactor 
licensees. The safety culture components were compared to both industry 
(including safety culture attributes developed by the Institute of 
Nuclear Power Operations) and international safety culture attributes 
to ensure that appropriate concepts were captured. The safety culture 
components include: decisionmaking; resources; work control; work 
practices; corrective action program; operating experience; self- and 
independent assessments; environment for raising concerns; preventing, 
detecting, and mitigating perceptions of retaliation; accountability; 
continuous learning environment; organizational change management; and 
safety policies. These are elaborated on in Inspection Manual Chapter 
(IMC) 0305, ``Operating Reactor Assessment Program.'' As experience is 
gained with the implementation of the enhanced ROP, the NRC staff will 
re-evaluate the adequacy of its safety culture components.
    The ROP safety culture enhancements for the baseline inspection 
program became effective on July 1, 2006. The revised ROP guidance has 
been in place for an initial implementation period of 18 months 
(through the end of calendar year 2007). The final supplemental IP 
(95003) that was enhanced as part of the safety culture initiative was 
issued on October 26, 2006. A self assessment of ROP safety culture 
effectiveness is being performed in FY 2008, and any identified 
enhancements will be incorporated.

    Question 7b. Please include any lessons learned and potential 
future improvements to the program.
    Response. Several activities are underway which will provide 
valuable insights to the effectiveness of the ROP safety culture 
enhancement. These include: (1) a NRC staff audit of a sample of 
inspection reports and inspection findings to evaluate the 
appropriateness of the assigned (or not assigned) cross-cutting 
aspects, (2) a review to evaluate implementation practices across the 
four regions with regard to how inspection findings are identified, how 
cross-cutting aspects are assigned, and how substantive cross-cutting 
issues are identified, (3) the generation of a lessons learned input 
from the first-time implementation of IP95003 at Palo Verde, (4) input 
from periodic meetings with industry representatives where feedback is 
provided from the licensees' perspectives on how the Reactor Oversight 
Process (ROP) safety culture enhancements are being implemented, and 
(5) input from the CY2007 ROP self-assessment external survey on the 
safety culture topic.
    The NRC staff will continue to compile lessons learned and identify 
opportunities for further ROP safety culture improvements.

    Question 8. Under what conditions should a performance indicator 
and an inspection finding, resulting from the same failure/event both, 
count against the licensee in the Reactor Oversight Process' Action 
Matrix?
    Response. In most cases, PIs and inspection findings are included 
in the NRC staff's consideration of the appropriate agency response 
(column of the ROP Action Matrix) for any particular licensee. In the 
case that performance indicator information, such as an equipment 
failure or a scram, is also concurrent with an inspection finding that 
uses this same information, IMC 0305 requires the NRC staff to assess 
whether these inputs have the same ``underlying causes,'' and if so, 
they should not both be used in the ROP assessment process.

    Question 9. Is the NRC ready to complete thorough reviews of 
combined license applications in a timely and efficient manner?
    Response. Yes. The NRC has recruited and restructured the NRC staff 
organization to attract and maintain high caliber staff. We have also 
worked on infrastructure (i.e. review guidance) for staff reviewers. As 
a result of our planning, the NRC is on time, and on target, for the 
first two reviews of combined license applications. There are, however, 
several regulatory initiatives the NRC must complete. Specifically, the 
NRC must complete a security rule, and an aircraft impact rule. These 
rulemakings are scheduled to be completed by the end of next year. 
Ensuring that the appropriate amount of resources (i.e., budget) are 
provided to the NRC will continue to sustain our efforts.

    Question 10. By the end of 2008, the NRC is expected to receive 
applications for 22 new reactors. I am concerned that the demand on NRC 
resources will be significant, but the agency doesn't yet have a 
process for prioritizing resources among competing licenses. How do you 
plan to manage that situation?
    Response. The Agency has been focused on these issues for several 
years. On November, 16, 2006, the Commission provided staff with a set 
of factors to consider when making resource allocations and schedule 
decisions if and when licensing work exceeds budgeted funds for new 
reactors. The criteria were designed to encourage applicants for new 
nuclear powerplants to develop high quality comprehensive applications; 
complete as much coordination with other Federal, State, and local 
agencies as possible; and demonstrate a commitment to build a plant in 
the near term. By giving priority to such applications, the NRC will 
maximize the value and efficiency of its license review activities. 
Having these factors on the record and publicly documented for over a 
year provides the Agency with a transparent foundation for making 
resource allocation decisions if the Agency's appropriations requests 
are reduced in the upcoming fiscal years.

    Question 11a. In the expanded technical sufficiency and 
completeness of new plant license applications, what is the standard 
for technical sufficiency?
    Response. While a determination on the ``completeness'' of the 
application is based on the scope of the application addressing the 
regulations, ``technical sufficiency'' as used during the acceptance 
review is based on the depth of information consistent with the 
implementing guidance documents (e.g., Regulatory Guide 1.206 and the 
Standard Review Plan). The standard for ``technical sufficiency'' is 
primarily such that the NRC staff can not only begin its detailed 
technical review but complete it within a predictable timeframe. Even 
though an application is technically sufficient, that does not preclude 
requests for additional information. As an example, an insufficient 
section of an application would be the introduction of a new safety 
feature without supporting analysis. In this case, the technical staff 
might be able to initiate the detailed technical review on the 
functionality of the safety feature, but could not provide a 
predictable schedule for obtaining a reasonable assurance finding on 
the new safety feature until after receipt of the supporting analysis.

    Question 11b. How will the NRC ensure that the technical 
sufficiency review doesn't become a de facto RAI process?
    Response. During the ``technical sufficiency'' review, the NRC 
staff will compare the application against the expected content in 
Regulatory Guide 1.206 and the acceptance criteria in the standard 
review plan. It should be noted that technical sufficiency review, as 
described in the acceptance review process, will involve the 
identification of areas where it is not readily apparent that the 
engineering has been completed for a particular area, rather than a 
request for additional information,which is to serve to clarify 
engineering assumptions, calculations, and methodologies. This will 
result in a compilation of issues. Through internal discussions, the 
NRC staff will determine which of these will become ``acceptance 
review'' issues and which will likely result in requests for additional 
information during the detailed technical review. The standard for 
technical sufficiency, as discussed in Question 11a., really depends on 
the NRC staff's determination whether the identified issue could be 
addressed within a predictable timeframe such that the staff could 
begin its detailed review and complete its review within the developed 
schedule.

    Question 11c. The Combined License Review Task Force concluded that 
the expanded technical sufficiency and completeness review should 
result in a net schedule savings of approximately 2-4 months. What 
assumptions form the basis for this conclusion?
    Response. The assumptions that form the basis of a net future 
schedule savings of approximately 2-4 months in conducting an expanded 
acceptance review include: improving the basis for accepting the 
application or deferring the start of the review, providing the 
potential for early interactions with the applicant to discuss the 
review results and make timely requests for supplemental technical 
information, reducing the need for requests for additional information 
based on submissions of high quality applications, developing an 
application-specific review plan and schedule, and having early 
interactions with the NRC's Advisory Committee on Reactor Safeguards to 
discuss the application-specific review plan and the key technical 
areas the NRC staff intends to focus on during the review (e.g., new 
technologies, new analysis methods, unique site-specific conditions. 
need for staff confirmatory analyses, etc.)

    Question 12a. Chairman Klein's testimony indicated that ``the NRC 
has the skilled workforce to complete thorough reviews in a timely and 
efficient manner.'' Yet, the first application was filed on September 
24 but the technical sufficiency and completeness review did not 
officially begin until October 1.
    Was the staff unprepared to begin its review of the first and only 
application received to date?
    Response. The NRC staff was prepared for the review. In order to 
facilitate the actual review, however, it takes several days to 
establish the schedule and logistics for the review, after the receipt 
of the application. For example, the application must be loaded 
electronically into our Agencywide Documents Access and Management 
System (ADAMS) and made available to the NRC staff and the public. In 
this instance, the NRC staff needed to work with the applicant to 
correct aspects of the application that did not satisfy federal 
requirements for electronic records and found ways to minimize the 
impact of this activity on the overall schedule.

    Question 12b. Chairman Klein's testimony indicated that ``the NRC 
has the skilled workforce to complete thorough reviews in a timely and 
efficient manner.'' Yet, the first application was filed on September 
24 but the technical sufficiency and completeness review did not 
officially begin until October 1.
    Does the staff anticipate being unable to complete the technical 
sufficiency review within 60 days, thereby requiring an extra week?
    Response. As noted in the answer to Question 12a., the time between 
September 24 and October 1, 2007, was for the logistics of making the 
application available to NRC staff. The acceptance review for this 
application was completed on November 29, 2007.

    Question 12c. Chairman Klein's testimony indicated that ``the NRC 
has the skilled workforce to complete thorough reviews in a timely and 
efficient manner.'' Yet, the first application was filed on September 
24 but the technical sufficiency and completeness review did not 
officially begin until October 1.
    What steps is the Commission taking to ensure that staff is ready 
to receive future applications and perform the technical sufficiency 
review within 60 days?
    Response. The NRC staff has been trained and been provided guidance 
on the acceptance review process and the 60 day acceptance review goal. 
The NRC has taken other key steps to ensure that that staff are ready. 
For example, the NRC has moved and/or hired a significant number of 
staff and placed them in the optimum organization to accomplish this 
workload. We have planned and provided all of the guidance necessary to 
accomplish the reviews. We have even pre-planned the schedules for 
anticipated applications over the next few years. The Commission has 
encouraged the staff to not accept applications that are insufficient. 
The ability to do so is an important tool for ensuring the 60 day 
review goal is met.

    Question 12d. Chairman Klein's testimony indicated that ``the NRC 
has the skilled workforce to complete thorough reviews in a timely and 
efficient manner.'' Yet, the first application was filed on September 
24 but the technical sufficiency and completeness review did not 
officially begin until October 1.
    If the NRC's goal is completion of the technical sufficiency and 
completeness review in 60 days, why does the Commission plan to measure 
employee performance against a 75 day goal?
    Response. The 75-day goal allows time for NRC staff interaction 
with the applicant. The extra time allows applicants to potentially 
supplement their application to make it complete and technically 
sufficient so that the staff is not compelled to return the 
application.

    Question 13a. The NRC is renowned for its ability to generate 
numerous Requests for Additional information (RAIs) which, without 
proper management, can be a cumbersome process that leads to 
unnecessary delays.
    How will you ensure disciplined management of this process?
    Response. The review processes for design certifications, combined 
licenses, or other major licensing actions usually involve the need for 
the NRC staff to seek additional information from applicants to support 
our finding that the proposed actions pose no undue risk to the public 
health and safety. The NRC uses various administrative tools to ensure 
that the review process works efficiently and that requests for 
additional information do not unreasonably delay the completion of the 
NRC review. The NRC staff expects that the principal determinant of the 
number and extent of RAIs will be the quality and completeness of the 
application. Regarding the preparation of applications, the NRC staff 
has issued various guidance documents for use by applicants to help 
ensure that the applications contain the necessary information in a 
consistent format. The NRC staff has also had and continues to have 
routine meetings with the industry to discuss issues of content and 
format of applications. Upon receipt of an application, the NRC staff 
performs an initial review to ensure the application includes 
sufficient information to commence its review with confidence that the 
review can be completed in a predictable manner. To ensure that 
questions posed during the review have a nexus to the ultimate agency 
decision regarding an application, the NRC has structured a format for 
requests for additional information and each question is reviewed and 
approved by management before a formal request is sent to an applicant.

    Question 13b. The NRC is renowned for its ability to generate 
numerous Requests for Additional information (RAIs) which, without 
proper management, can be a cumbersome process that leads to 
unnecessary delays.
    Without the computer-based tacking system in place, how will you 
ensure that each issue will only need to be resolved once, without 
requiring a redundant answer from each subsequent applicant?
    Response. The NRC has implemented tracking systems for ongoing 
design certification reviews and has developed an improved electronic 
system for creating, approving, and tracking of questions to 
applicants. The electronic system will be deployed for use during the 
NRC review of the first combined license applications and will include 
the ability to identify questions and responses from design 
certification and combined license reviews.

    Question 14. According to the GAO, the estimates of staff-time 
required for each review does not reflect any efficiencies gained 
through applying the design-centered approach. If the NRC doesn't 
anticipate gaining efficiencies, then the staff will have no incentive 
under the internal budget process to achieve those efficiencies. How 
will your FY09 budget reflect anticipated increases in efficiency?
    Response. The NRC's estimated cost to review a combined license 
(COL) application depends on whether the application is a Reference or 
Subsequent COL. In the formulation of the FY 2009 budget for new 
reactors, the NRC assumed that applicants would utilize the Design 
Centered Review Approach, such that for Subsequent COL applications, a 
substantial reduction in the level of review effort will be realized. 
The estimated direct total cost to review a Reference COL is 
approximately $18.2 M (37 FTE and $7.2 M for contractors) and each 
Subsequent COL is approximated at $10.6M (20 FTE and $4.6M for 
contractors). The NRC will gain efficiency by having the subsequent 
applications take advantage of the review of common information from 
the reference application. Utilizing common information from the 
reference COL allows for a reduction in the level of resources required 
in subsequent COL reviews. Construction and vendor inspection resources 
associated with a COL are not included in the above estimate of 
resources.

    Question 15a. In the Dominion/North Anna Early Site Permit 
proceeding, the Atomic Safety and Licensing Board resolved all issues 
in favor of Dominion but raised generic policy issues for the 
Commission's consideration.
    What is the rationale for delaying the issuance of the Dominion 
ESP?
    Response. Under the provisions of 10 CFR 2.340, in effect at the 
time the Dominion ESP application was filed and processed, there was an 
automatic stay of the effectiveness of a licensing board decision on an 
early site permit (ESP) until the Commission acts. Thus, the NRC staff 
was unable to issue the permit until the Commission issued an order 
authorizing the NRC staff to issue the permit. This automatic stay 
provision was removed for future applications as of September 27, 2007, 
as part of the Commission's recent revisions to 10 CFR Part 52. On 
November 20, 2007, the Commission authorized its Office of New Reactors 
to issue an ESP to Dominion Nuclear North Anna, LLC for the North Anna 
ESP site near Louisa, Va. The NRC staff has 10 business days to carry 
out the Commission's directions and issue the permit, the third ESP the 
NRC has approved.

    Question 15b. In the Dominion/North Anna Early Site Permit 
proceeding, the Atomic Safety and Licensing Board resolved all issues 
in favor of Dominion but raised generic policy issues for the 
Commission's consideration. Is that rationale consistent with the 
Commission's decision against providing guidance on generic issues in 
individual proceedings, based on the Combined License Review Task Force 
report?
    Response. The Combined License Review Task Force recommended that 
the Commission consider rulemaking to resolve issues that are generic 
to combined license applicants, to allow resolution in a public 
rulemaking process, rather than in individual contested proceedings. 
The Commission directed the Staff to identify appropriate subjects for 
generic rulemaking.

    Question 16. Please identify all anticipated rulemakings, the 
schedule for completing the rulemakings, and the process by which the 
resulting decisions will be applied to the potential new license 
applications without incurring increased litigation or creating delays 
in the review process.
    Response. The NRC has recently issued several major rulemakings 
dealing with the licensing of new nuclear powerplants. These include 
major changes to Part 52 of Title 10 of the Code of Federal Regulations 
(and related changes to Parts 1, 2, 10, 19, 20, 21, 25, 26, 50, 51, 54, 
55, 72, 73, 75, 95, 140, 170 and 171) to clarify and improve our 
regulatory processes, changes to enhance the efficiency of the process 
for limited work authorizations, and codification of a revised design 
basis threat. A complete description of ongoing and planned NRC 
rulemaking activities is included in NUREG-0936, ``NRC Regulatory 
Agenda,'' which is issued semi-annually. Ongoing rulemakings that will 
apply to applications for design certifications and combined licenses 
for new nuclear powerplants include:
    A proposed rulemaking to require designers of new nuclear 
powerplants to assess the impact of a large commercial aircraft and 
evaluate design features that could provide additional inherent 
protection to avoid or mitigate, to the extent practicable, the effects 
of the aircraft impact, with reduced reliance on operator actions. The 
proposed rule was issued for public comment in October 2007. The final 
rulemaking is expected in mid-2008.
    A proposed rulemaking to revise security requirements for operating 
and future nuclear powerplants to codify requirements included in 
Orders issued following the events of September 11, 2001; fulfill 
certain provisions of the Energy Policy Act of 2005; and address other 
insights and issues related to security at nuclear facilities. The 
proposed rule was issued for public comment in October 2006. Due to the 
large number of public comments received and the need to prepare 
related regulatory guidance documents, the final rulemaking is expected 
in late 2008.
    A proposed rulemaking to revise requirements for fitness for duty 
programs for operating and new nuclear power reactors, including 
activities during construction. The proposed rule was issued in August 
2005. The final rulemaking is expected in early 2008.
    The NRC has evaluated the potential implications of these 
rulemakings on the licensing or design certification processes and 
discussed issues with applicants and potential applicants. The NRC will 
ensure that applicants have the necessary information to prepare for 
implementation of these new rules during the NRC's review of their 
applications. The NRC does not believe that these or other rulemaking 
activities will introduce delays or significant risks of additional 
litigation to the review process. These activities may reduce 
litigation in the long term by improving clarity in areas of evolving 
regulatory and public interest.

    Senator Carper. It will be. Thank you.
    Commissioner Lyons, my guess is that your name is not often 
mispronounced. Commissioner Jaczko, my guess is your name is 
mispronounced about once an hour.
    [Laughter.]
    Senator Carper. I will just say to my colleagues, the way I 
learned how to pronounce Commissioner Jaczko's name is that I 
think of a yacht, that he lives on, sails on, probably every 
day. Not really.
    [Laughter.]
    Senator Carper. But I think of a yacht, and then I add 
``sko'' to the end of that, and usually I am able to get it 
right. Commissioner Jaczko, you are recognized for 3 minutes, 
and you will be succeeded by Commissioner Lyons.

  STATEMENT OF HON. GREGORY B. JACZKO, COMMISSIONER, NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Jaczko. Thank you, Mr. Chairman. I would note that my 
name is rarely mispronounced at this Committee, and I 
appreciate that.
    I appreciate the opportunity to testify today with my 
fellow commissioners and the chairman to talk about operating 
reactor safety. As many of you have mentioned, we are on the 
verge of an era of new reactor licensing. While we are in that 
era, the most important issue continues to be the focus on the 
104 operating nuclear powerplants that we have today and 
ensuring their safety.
    We have a very extensive program to do that, involving a 
large number of inspectors, including resident inspectors at 
every plant that we have. But the agency relies tremendously on 
licensees to identify and report issues. One of the things that 
continues to trouble me is situations in which licensees do not 
report issues to the Commission. The incident with Peach Bottom 
was raised. That was a situation in which an individual did not 
feel comfortable bringing that to the management at the 
facility, nor to bringing the evidence to the NRC. Those 
continue to be issues that trouble me.
    We still continue to deal with complicated safety issues, 
such as the potential for the emergency core cooling systems to 
fail during certain accident scenarios. That is a longstanding 
issue that this Commission has been working on to address, and 
I think we are finally close to resolving that. We still have 
areas, such as fire protection, where we have challenges to 
implementing an effective and efficient regulatory program.
    These are very difficult subjects to resolve. Nuclear 
powerplants are complicated machines. But I am confident that 
we do have a dedicated staff that is working diligently to 
address those issues in a timely manner.
    The most important element really of our oversight process 
is the reactor oversight process, which is the subject of 
today's hearing. In my view, it is a good structure that 
objectively and transparently allows us to regulate the 
Nation's nuclear powerplants. One of the challenges, however, 
with the ROP, is that many safety issues can be traced to 
issues that involve management at the facilities. The ROP does 
not address management issues in and of itself.
    But I am encouraged that we are beginning to look at some 
areas where we can appropriately regulate in this area, such as 
the inclusion of safety culture initiatives into the reactor 
oversight process.
    I think my biggest frustration continues to be that the 
reactor oversight process's performance indicators. In too many 
cases, it takes the agency too long to determine the safety 
significance of inspection findings that we have. Our 
experienced inspectors and regional staff recognize poor 
performance, but at times, they must wait for inevitable 
findings to move a licensee into the proper column in the 
reactor oversight process. In other words, we have to wait in 
many cases for the ROP to tell us what we already know. I think 
this is an area where we can really work to make significant 
improvements.
    Now I will just briefly touch, in the few remaining seconds 
that I have, on the importance of openness and transparency. As 
Senator Alexander and Senator Sanders mentioned, these are 
extremely important issues for this Commission. We have to 
continue to maintain the confidence of the public on whose 
behalf we regulate. As the Chairman indicated, I look forward 
to answering your questions as we move forward on this 
important subject. Thank you.
    Senator Carper. Commissioner Jaczko, thank you.
    Commissioner Lyons, you are recognized.

    STATEMENT OF HON. PETER B. LYONS, COMMISSIONER, NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Lyons. Thank you, Mr. Chairman, and thank you, members 
of the Committee. It is indeed a privilege to appear before you 
today with my fellow commissioners to discuss the NRC's 
programs with a special focus on the reactor oversight program.
    I fully concur with Chairman Klein's previous remarks and 
with his more detailed written testimony. I appreciate this 
opportunity to share a few additional thoughts.
    As he noted, and as several Senators have noted, the NRC's 
primary strategic goal has been and should always remain 
safety. In addition, our improved effectiveness and regulatory 
stability and predictability have helped to create an 
environment in which operators are prepared to make significant 
investments. Examples include TVA's restart of Browns Ferry 
Unit 1, the plans at Watts Bar Unit 2, renewal of licenses for 
48 reactors and approval at the NRC over the last 10 years of 
about 3,000 megawatts of power up-rates.
    We are aggressively preparing for a new wave of reactor 
licensing applications, as my colleagues have said. We have 
been hiring and training hundreds of engineers and scientists 
and enhancing our infrastructure. We were very gratified last 
week to see that first COL coming in to test those processes.
    There are many challenges remaining and the most serious 
one, I think, remains space to house our growing staff. 
Certainly the subcommittee's support on space issues has been 
greatly appreciated. But I think we are going to need more 
help. I believe the agency is well-positioned, looking into the 
future, with the exception and the continued concern on space 
issues.
    My colleagues have discussed the Reactor Oversight Process 
or ROP. But I would like to focus on the significant 
enhancements that were made to more fully and objectively 
address safety culture. The NRC has made significant revisions, 
some prompted by your subcommittee, toward inspection and 
assessment guidance. We have conducted detailed training of 
inspectors and improved regional management. We have created a 
multi-office team to promote consistent and effective 
implementation.
    Lessons learned from these safety culture enhancements to 
the ROP are certainly going to be a benefit throughout the 
fleet. Future changes and enhancements to the ROP and our 
annual assessments can also be expected to further improve this 
program.
    Mr. Chairman, in my opinion, the Commission remains 
committed to fulfilling its statutory role. We appreciate the 
past guidance and support that we have received from this 
subcommittee and from the full committee. We look forward to 
working with you in the future, and I look forward to 
contributing to questions.
    Senator Carper. Commissioner, thank you very much for your 
statement.
    Let's just jump right into questions, 5 minutes per member. 
We will have opportunity for two rounds. I think our vote has 
been moved to 11:35, so maybe we can get through this first 
round.
    Gentlemen, as I mentioned in my opening statement, what I 
would like to do today is focus on the NRC's action to improve 
poor performing facilities. Early this week, the NRC announced 
it was going to begin what I think you called a comprehensive 
inspection at the Palo Verde Nuclear Plant.
    I just want to ask you to briefly explain, if you will, 
what this comprehensive inspection is and why do you think it 
is needed at that particular facility?
    Mr. Klein. Mr. Chairman, as has been stated, we have a 
rigorous process by which we continuously evaluate reactor 
performances. When we look at indicators such as those at Palo 
Verde, and we see declining performance, then we change the 
amount of time that the utility gets to see us. So our 
inspection teams are much more rigorously involved, they look 
at a lot more details. In the case of Palo Verde, we noticed 
that they had operated for a number of years at the top level. 
Then they started declining in performance.
    So therefore, we moved them into column four, which means 
they will see us about twice as much as they normally would 
have if they were a good-performing plant. So we will send----
    Senator Carper. Let me just ask you, any idea what 
happened, what may have triggered this decline in performance?
    Mr. Klein. I went out to Palo Verde when we moved them into 
column four and asked them those questions, what was it that 
caused it. They believe that fundamentally it was complacency. 
They were a top performer and they essentially----
    Senator Carper. Was there a change in management, a change 
in ownership?
    Mr. Klein. No, it really was not. It was basically a long-
term staff that I think reached a comfort zone. They did not 
have a questioning attitude, they didn't have the ability to 
follow up to identify problems and then to fix them and to 
sustain that. If you look at typical reactors that operate 
well, they will go possibly into a declining mode and they may 
not realize it. So then there is sort of a denial phase until 
they bottom out and then they start turning the corner.
    So I think Palo Verde was like we have seen in other 
plants. As indicated, it gets back to people: how to people 
perform, how do they operate. I think our biggest issue that we 
have as a regulator is to strive every day, both internally and 
externally, for ourselves and to the plants, not to become 
complacent.
    Senator Carper. Just talk to us briefly about their culture 
of safety. Is it part of what they do every day? I think 
Commissioner Lyons referred to that. I think one of your 
enhancements of the ROP process is to start to account for that 
as well.
    Mr. Klein. They really do need to watch what they do, every 
day. When they see issues of concern, they need to bring those 
forward to management and they need to fix those. When they 
move into column four, they get a lot of assistance from the 
NRC. We have increased our number of inspectors, so we will 
have a lot more people out there. In addition, the Institute of 
Nuclear Power Operations also has some people out there to help 
them change the culture.
    So we will be watching that, we will be monitoring it. Any 
time we see declining performance, we increase our activities.
    Senator Carper. If I were running one of these plants, I 
wouldn't want to end up in either that column, column four or 
column five. How do they feel about it? I would wear it as a 
badge of shame and something I would want to get rid of as 
quickly as I could. Is that the attitude of the management?
    Mr. Klein. It absolutely is right now. Again----
    Senator Carper. I would hope so.
    Mr. Klein [continuing]. When plants start, sometimes they 
don't recognize it, but from my observations, we had Palo Verde 
come in and appear before the Commission. They know they had 
problems, they are embarrassed by it, they are committed to 
fixing it. What we will look at, as a regulatory body, is 
sustained performance. So they don't just move out of column 
four because they want to. They have to prove to us that they 
have moved out, they have to demonstrate it. We will be 
monitoring that, and we will have an augmented inspection team 
to watch that.
    Senator Carper. Okay, we will stay on them.
    Commissioner Jaczko.
    Mr. Jaczko. I would just add, I know the committee has been 
very interested in safety culture and the work that we are 
doing to modify the reactor oversight process for safety 
culture. This is the first time we will be using that new 
safety culture process at a nuclear powerplant. So as part of 
the process, Palo Verde will be required to undergo an 
independent safety culture review that we will monitor and 
oversee the results of.
    Senator Carper. Good.
    Mr. Jaczko. So it will be a new, the first test of that new 
program.
    Senator Carper. Good. One last question and then I will 
turn to Senator Voinovich.
    GAO's written testimony today suggests that the NRC needs 
to improve its ability to identify and address early 
indications of declining safety performance. Let me just ask, 
do you all agree with this assessment? Have you begun to look 
at ways to address this particular concern of GAO?
    Mr. Klein. Mr. Chairman, we have been looking at those way 
before I arrived at the Commission. When I was at the National 
Academy of Training years ago, we were trying to look at what 
predictors, what can we look at that will tell us a plant is 
going into declining performance. We are continuously looking 
at it at the NRC. We will continue to look at it. We ask 
ourselves every day, what can we do better. Then once we find 
the problems, we back up and say, what should we have asked 
that would have given us indicators.
    So we haven't found that magic bullet, but we are still 
looking and we will continue to look.
    Senator Carper. Commissioner Lyons.
    Mr. Lyons. If I may add, from a standpoint of safety 
culture, which is relatively new in the reactor oversight 
process, we have also set up an assessment, to be 18 months 
from the start of this process, so that we are constantly 
monitoring and assessing how well we are performing from the 
standpoint of safety culture.
    Senator Carper. Thank you very much.
    Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    I would just to reiterate some of the comments made by my 
colleagues here today, so that people fully appreciate the 
importance of nuclear energy. According to NEI, in terms of 
sources of emission-free electricity in this Country, nuclear 
provides 73 percent of emission-free energy, wind is 1.4, hydro 
24.1, solar \1/10\ of 1 percent, geothermal, 1.4 percent. So it 
is significant in terms of the issue of greenhouse gases and 
climate change.
    In terms of reducing voluntary reductions, nuclear 
generation is responsible for 36 percent of that. The other 
that comes close to it is natural gas. But we all know, because 
we have shifted to natural gas, that we have driven up the cost 
of natural gas about 300 percent, and it has had a dramatic 
negative impact on the economy of this Country, particularly in 
my State of Ohio, where at one time we were one of the number 
one States in terms of plastic.
    You all are familiar with Davis-Besse. I am going to ask 
this question, because it is so near and dear to my 
constituents. We were very unhappy with Davis-Besse. The 
question I have is, what lessons were learned there? How have 
you really changed things at Davis-Besse in terms of what 
management is doing and in terms of what the Nuclear Regulatory 
Commission is doing? The other question is, we had a debate, I 
remember Nils Diaz, the Chairman, about instituting the safety 
culture in your review of the operations of the various 
facilities around the Country. There was some reluctance to 
inculcate that or to include it in your oversight. We want to 
set some goals, but we don't want to institutionalize it.
    I would like to know, where are we, the answer to No. 1, of 
course, and No. 2, where are we in terms of institutionalized 
security culture?
    Mr. Klein. Senator, I think there were a lot of lessons 
learned from Davis-Besse, both in terms of complacency with the 
industry and with the NRC as a regulatory body.
    We have done a lot of things since Davis-Besse to ensure 
that that does not happen again. A lot of the talks that I 
give, I always tell the industry and our staff that our job is 
to always ask ourselves, what is the next Davis-Besse, and what 
actions do we need to take to make sure it never happens again. 
So we continually remind ourselves, internally and externally, 
to be alert. We expect issues to be brought forward.
    I think there were a lot of issues on Davis-Besse that 
occurred that will not occur again. We have a much more 
rigorous inspection process for reactor heads, for boric acid 
leaks, for reactors we inspect. The safety culture that you 
talked about is now a part of the ROP. So we have done a lot of 
changes that are locked into our processes.
    Senator Voinovich. How about the people that are assigned 
by the NRC to Davis-Besse and other facilities? How have you 
changed in terms of those individuals?
    Mr. Klein. We did training and more training, so that they 
ask the right questions, and so they look for different things. 
We did a lot to refocus the inspection, not just at Davis-
Besse, but at all plants, to have a more questioning attitude.
    Senator Voinovich. Have you changed the tenure of the 
amount of time? Because one of the things that many of us were 
concerned about if somebody is on the job for 4 or 5 years and 
after a while you kind of get to know everybody, and before you 
know it, you don't get the kind of oversight that you would 
like to have.
    Mr. Klein. We do limit the time that resident inspectors 
can stay at plants. That is one of our policies. People's time 
can be extended, but they have to make a big justification. 
Typically it might involve family reasons. If someone is about 
ready to graduate, we might let them stay, their family member 
is graduating, we might let them stay another year.
    Senator Voinovich. How much time is that?
    Mr. Klein. A maximum of 7 years, but typically it is about 
5.
    Senator Carper. Mr. Lyons.
    Mr. Lyons. Another very important lesson learned that I 
might add, from Davis-Besse, was the importance of operating 
experience. That led to our revitalizing our entire operating 
experience program. I was surprised when I came onto the NRC 
and began to do a fair bit of reading that there were previous 
events, not only for Davis-Besse, but also for TMI, that had we 
had a robust operational experience program, we and the 
operators should have been aware, we should have anticipated 
that possible issue and been looking toward it. Operational 
experience is a very important component today.
    Senator Voinovich. I have run out of time. Maybe in answer 
to some other questions here, I really am interested in where 
are we with this whole issue of security culture.
    Senator Carper. Good. That is a good one to focus on some 
more.
    Senator Sanders, you are next, and you are recognized at 
this time. Five minutes, please.
    Senator Sanders. Thank you, Mr. Chairman.
    Before I ask my question, I have heard a whole lot about a 
renaissance in energy, and I believe in a renaissance, too, not 
quite the same renaissance as some of my colleagues. I think 
the renaissance has to take us from being behind the rest of 
the industrialized world in energy efficiency to be first in 
the world. There are unbelievable gains that we can make in 
that area.
    I think a renaissance means that we begin to invest a 
fraction of the money we put into nuclear energy into solar, 
into wind, into geothermal, into biofuels. I believe that in 
moving in that direction we can create millions of good-paying 
jobs as we create safe and sustainable energy. That is my 
vision of a renaissance.
    But to be more specific, Mr. Klein, on August 21, 2007, 
very recently, one of the cells of the cooling tower collapsed 
at the Vermont Yankee Nuclear Powerplant. You know this. On 
August 30, just a week later, there was an emergency shutdown 
involving stuck valves. Fortunately, no one was hurt in either 
of these accidents. If you were living in southern Vermont or 
New Hampshire or Massachusetts, would you have confidence in 
the NRC after this series of events?
    Mr. Klein. Senator, sitting at this side of the table, I 
would hope the people of Vermont have confidence in the NRC.
    Senator Sanders. They don't.
    Mr. Klein. The issue on the collapsed cooling tower, there 
are about seven cells on that cooling tower. I would agree with 
you that the public confidence, when you see that visible 
collapse, is a concern. I think it would question the 
maintenance, the safety and so forth. I believe as a regulator 
we need to talk to the public, let them understand what those 
issues are.
    It is important to note that that cell that collapsed was 
not part of the safety system. So in terms of the public being 
at risk from a safety standpoint, they were not at risk.
    Senator Sanders. That is true.
    Mr. Klein. But it does, I will agree that it does, I think, 
cause people to have concern about the confidence of the other 
things. That is one of the things the NRC looks at. When we see 
an event like that, we ask ourselves, are there other factors 
that we should be looking at.
    Senator Sanders. Let me pick up on that. Given the fact 
that Yankee is now anticipating a 20-year extension, is now 
anticipating, is in the process of an up-rate, will the NRC 
commit to reinspect Vermont Yankee with new procedures, a new 
examination? Will you commit now to do that?
    Mr. Klein. Because of this particular licensing phase and 
the role the Commission plays, an adjudicatory role, I have to 
be careful what I say in terms of the license extension. My 
general counsel will have comments on that. But I can assure 
you that we will have a rigorous inspection both by the staff 
and by the Commission.
    Senator Sanders. When will that be done?
    Mr. Klein. It is in the review process now. So as the staff 
gives its recommendations, the Commission will be looking at 
those issues.
    Senator Sanders. Will the NRC use your new procedures as a 
look back at Vermont Yankee or a side by side comparison of the 
two procedures since the Vermont Yankee plant was granted an 
up-rate in March 2006?
    Mr. Klein. The new reactor oversight program issues that we 
have at all the plants include Vermont Yankee.
    Senator Sanders. Mr. Chairman, you indicate in your 
statement that the new procedures are superior to the 
independent review that was used at Maine Yankee? Right?
    Mr. Klein. Correct.
    Senator Sanders. Yet I don't know how you can say that, 
because in one very important way it is far inferior, and that 
is, you do not involve independent inspectors, you do not 
involve governors. You continue to control the process strictly 
here from the NRC in Washington at a time when a lot of people 
do not have particularly great faith in what goes on here in 
Washington.
    Will you agree, and this is a request similar to what 
Senator Clinton made for nuclear powerplants in New York State, 
will you agree, will you work with us to develop an independent 
inspection which involves State Government in Vermont, New 
Hampshire, which involves independent engineers who are outside 
of the jurisdiction of the NRC?
    Mr. Klein. Maine Yankee's independent safety analysis was 
also run by the NRC and involved----
    Senator Sanders. But involved outside engineers as 
well?
    Mr. Klein. Outside engineers, for example, from the State, 
can also participate in that process. They probably, I believe 
for Vermont Yankee, that they are already involved.
    Senator Sanders. Well, key word here is the word 
involvement, how much power the State has and how much power 
independent engineers have. Would you agree to allow Vermont 
Yankee to receive a similar type inspection as to what Maine 
Yankee received?
    Mr. Klein. I believe that Vermont Yankee has that same 
activity and it is more rigorous than Maine Yankee had.
    Senator Sanders. Well, you haven't answered my question. 
Would you agree to allow a process similar to Maine Yankee to 
take place?
    Mr. Klein. We have a process that basically involves the 
State. As a regulatory body, we hold that decision in terms of, 
we have the responsibility and the accountability for that 
plant.
    Senator Sanders. Okay. Let me just say this. In Vermont, 
and I think in many areas of this Country, there is concern 
about Washington's ability to do the right thing for people, 
especially in an issue as important as nuclear power. I would 
hope that you would reconsider, and we are going to work on 
this issue.
    Last point that I want to make, maybe there is somebody 
that could answer it. Our friends here talk about the 
renaissance and the explosion of nuclear energy, more and more 
powerplants. I am not sure where this nuclear waste is going. I 
would just mention to my friends, we are looking at Senator 
Ensign of Nevada's Web site, who says that he continues to 
vigorously oppose efforts to move high level waste to Nevada. I 
would tell you obviously that the Majority Leader from Nevada 
is also opposed to dumping nuclear waste, as other people of 
Nevada.
    So before we think about building dozens of more nuclear 
powerplants, somebody might want to ask the simple question, 
what are you going to do with that waste? Thank you, Mr. 
Chairman.
    Senator Carper. Thanks, Senator Sanders.
    Let's go over to Senator Craig next.
    Senator Craig. Mr. Chairman, thank you very much.
    Chairman Klein, a matter of terminology. Twenty-seven years 
ago, I began to work with our lab in Idaho, and I had to go 
through a whole educational process that remains ongoing. But 
one thing I found very difficult to do was to get a nuclear 
engineer, a nuclear physicist to speak in plain and simple 
language, so that the world could understand them without being 
alarmed.
    You used a phrase a moment ago that the average person 
reading it would say, what was nuclear material leaking into a 
glove box for. A glove box is a compartment in a vehicle by 
which one stores ones gloves. In a nuclear plant, what is a 
glove box?
    Mr. Klein. The particular issue that we were describing was 
nuclear fuel services.
    Senator Craig. All right.
    Mr. Klein. It is an enclosed facility whereby nuclear 
materials are handled. So those that are operating with the 
material do not get exposed.
    Senator Craig. It is a very thick-walled, cumbersome----
    Mr. Klein. Very thick, very cumbersome.
    Senator Craig. So it is not in a vehicle driving away from 
a facility.
    Mr. Klein. It is not. You have several at the Idaho 
National Laboratory.
    Senator Craig. We do that. I understood what you were 
saying, but my guess is the average person or maybe the average 
person reporting this hearing, except for the industry itself, 
might not quite understand what a glove box is. Anyway, having 
said that----
    Mr. Jaczko. Senator, if I could correct the situation. The 
material actually spilled out of the glove box, so it was 
actually spilling out onto the floor. While the glove box is 
generally a protected enclosure, the material was not intended 
to be in that glove box. In fact, it spilled out of the glove 
box onto the floor, just to clarify that.
    Senator Craig. Okay, but not a vehicle.
    Mr. Jaczko. No, it was not a vehicle.
    Senator Craig. Thank you very much.
    I am interested in your capacity to do what you do well in 
a period of growth. I think Commissioner Lyons, you began to 
talk about space. Anticipating what you are now anticipating, 
and that is more and more application coming and the ability to 
review them properly with the kind of talent that must be there 
to do so, talk to me about, if you would, your experience in 
finding the right people and the staffing responsibilities that 
you now have or sense, and what that will mean for the 
Commission. It is obvious you are thinking space, Commissioner 
Lyons, and that space will be filled by people and equipment or 
computer and facility. If you would for us, visit us on that 
issue.
    Mr. Lyons. Senator Craig, we are working very aggressively 
to increase the staff levels at the NRC. We are doing that 
based on the anticipated number of applications and reviewing 
the staffing that we require to efficiently process those 
applications. Our goal has been a net hiring of about 200 per 
year, but of course, we also have to account for significant 
attrition of the staff, typically of the order of 6 percent. 
But we anticipate that as more people at the agency, such as 
me, have more gray hair, that the attrition number may continue 
to go up.
    In any case, the hiring is a challenge. We have brought in 
on the order of 400 or 450 people in the last year in order to 
achieve the goal of increase of a net 200. That hiring is a 
challenge. We are competing, of course, with many other 
entities that are also hiring. To the extent that there is a 
nuclear renaissance, those utilities are going to be hiring, 
adding to still further pressure.
    So far we have been extraordinarily successful in that 
hiring. However, we are not so successful in where to put those 
people. We are bursting at the seams in our facilities in 
Rockville. We now have people in two additional rented 
facilities. We were about to have people in a third rented 
facility. There are discussions that have been ongoing with the 
subcommittee for assistance in working with GSA on another 
facility.
    I might note that spreading our personnel among a number of 
different locations, to me is absolutely the worst thing that 
we could be doing. In the aftermath of TMI, one of the findings 
was that the NRC at that time was spread among 11 buildings, I 
believe. It was far before my time. That is not the way to run 
a regulatory agency. With, we hope, continued assistance from 
the subcommittee, hopefully, and working with GSA, we can 
obtain the needed facilities and avoid this piecemeal placement 
of people around the Maryland area.
    Senator Craig. Okay, well, we will watch that very closely 
with you, because it is key and important for us. One last 
question--I guess I am out of time.
    Senator Carper. You will have another chance.
    Senator Cardin.
    Senator Cardin. Mr. Chairman, thank you very much.
    Commissioner Lyons, let me just follow up on the facility 
issue, because this committee has approved a prospectus for the 
consolidation of facilities in Rockville. So I would just urge 
you to please feel comfortable to keep this Senator informed as 
to how that is proceeding. Because I am interested in making 
sure you have adequate space and that the facilities are 
consolidated.
    Mr. Lyons. Senator, to be sure that I was clear on that 
point, we very much appreciate the approval of the prospectus. 
The issue with the GSA now, and for which we may need 
assistance from the subcommittee, is the details of that 
prospectus, which, as it is now approved and written, 
prescribes a 2\1/2\-mile radius around the existing facility 
and a per square foot cost that we do not believe is likely to 
attract any bids anywhere close to our present facility. This 
is a concern that we will be continuing to discuss with the 
committee. But the prospectus, as you say, was approved. It is 
the parameters of the prospectus that are of concern.
    Senator Cardin. We will watch that very closely. The 
information we had is that it would be adequate. If it is not, 
we certainly want to know that. We will be very closely 
watching this to make sure that you have adequate facilities. 
So please feel comfortable to at least keep this Senator 
informed as to how that is progressing.
    Let me respond, if I might, to my good friend, Senator 
Sanders. I am on his bill on global warming, which is the right 
way to proceed. I support what he says as far as wind and solar 
and other alternative energy sources. But the renaissance in 
energy has to include all of the above. It has to include wind 
and solar and alternative fuels. But nuclear is part of it. We 
are on nuclear, we have nuclear. So let's make sure we get it 
right. I think that is the main purpose of this hearing, to 
make sure that we do this in the right way.
    I want to go back to the procedures you have in place in 
regard to inspecting the security at our nuclear powerplants. I 
mentioned Peach Bottom in my opening comments, where a worker 
felt uncomfortable to bring to the regulators a circumstance in 
which one of the fellow employees was found asleep who had 
major responsibility for the security of that plant. Now, that 
wasn't the first time that Peach Bottom has been cited. In the 
1980s, they were cited. Of course, the operator of Peach Bottom 
also operates Three Mile Island, which has a real history. The 
security firm, I believe, is the same security firm that was 
operating at Three Mile Island.
    So my question to you is, first of all, what procedures do 
you have in place to make sure that there are inspections as to 
the security at the nuclear powerplants, and if you can comment 
on Peach Bottom, I would certainly appreciate it.
    Mr. Klein. Let me make it very clear, sleeping guards are 
unacceptable, both for the regulator and for the operator. It 
turns out that we had received an anonymous complaint about the 
sleeping guard issue several months ago. We investigated it. 
The unfortunate aspect was that it was an anonymous complaint 
and we couldn't talk to the individual to find out exactly what 
it was. The sleeping guards in question were in the ready room 
as opposed to being on station. Clearly, they should not have 
been sleeping, no matter whether they are on station or in a 
ready room.
    The investigation that we conducted did not verify the 
sleeping activities. We had no evidence, and as you might 
expect, it is hard to walk in at that right time and catch 
someone doing that. What we have done since then, once it was 
identified, we sent an alert to all the utilities, all of our 
resident inspectors, to be alert, to be attentive, watch for 
those signs. We sent an augmentation team to look specifically 
at Peach Bottom. That report has not yet been briefed to the 
Commission. But we will be holding a public hearing on that 
aspect on October 9th in Peach Bottom. Clearly it is 
unacceptable, we don't expect that to happen again, and we will 
be watching it.
    Senator Cardin. I believe there is video. So there is 
documentation of the circumstance.
    Mr. Klein. The initial one was not. The initial complaint 
was just a verbal. But the individual did have pictures, videos 
that were provided later.
    Senator Cardin. Maybe I should ask that, if you would for 
the record, supply what requirements you have, what procedures 
you have in place to inspect the security arrangements at the 
nuclear powerplants. I would hope that you do some form of 
random inspection, some sort of independent review, including 
interviewing employees, to see whether there is a laxity toward 
security at our nuclear powerplants. I think all of us 
understand we won't tolerate sleeping guards. The question is, 
what procedures do we have in place to make sure that that 
doesn't happen?
    Mr. Klein. We do have a rigorous inspection program for a 
lot of aspects of security, including physical barriers, 
procedures, practices, the guard stations. We do have resident 
inspectors that go out and talk to people. We have inspection 
teams that go out and talk to people. In this case, it appears 
preliminarily that there was an agreement among one shift where 
they looked out for each other, and it was a behavior that was 
difficult to find. We are going to reexamine our processes to 
see if there is something that we could have and should have 
done that would have caught that. But we are looking at that.
    Senator Cardin. I would ask that the results of your 
investigation and hearings, that our office be kept informed. 
Thank you, Mr. Chairman.
    Senator Carper. Senator Alexander, I don't believe you have 
had a chance to ask questions yet, is that correct?
    Senator Alexander. That is correct.
    Senator Carper. Well, have at it.
    Senator Alexander. Thanks, Mr. Chairman. I was thinking 
about my friend from Vermont and his call for efficiency. I 
agree with that, and I hope that as we work together, we can, I 
would like to turn his definition of efficiency more to 
buildings and appliances where there is a lot of room for gain. 
I would hope he would agree that it wouldn't make efficient 
sense to spend a lot of money building powerplants that don't 
work most of the time.
    For example, it wouldn't make much sense to spend a lot of 
money building giant wind turbines all over your beautiful 
mountains that only work a third of the time. If they are in 
Tennessee, at the only wind farm in the entire southeastern 
United States, they don't work 80 percent of the time. During 
August, when we are all sweating and our air conditioners are 
up, the average amount of time they don't work is 93 percent of 
the time, when nuclear power is producing electricity, on the 
average in TVA's region, is producing clean electricity, 
emission-free electricity, more than 90 percent of the time. So 
I think nuclear power is likely to be the most efficient 
supplier of large power. Although I am hopeful that maybe we 
will have solar, thermal power some day that will be more 
efficient.
    I want to ask you a question, if I may, about low-level 
radioactive waste and the disposal of it. I know that is a 
State responsibility. But let me try to put it in human terms. 
We have St. Jude's Hospital in Memphis. They help children who 
are sick with cancer at St. Jude's, 2,500 children a year 
inpatients, 58,000 outpatients. It is a celebrated place. They 
give 5,500 radiological treatments a year. They produce low-
level radioactive waste in many different ways, which has to be 
disposed of somewhere.
    Our State, this is not your fault, our State is not part of 
a compact that has a place to dispose of that. The Barnwell, SC 
place where it now goes is closing next year. So that means, so 
my question is, what are the options and what responsibility 
does the Nuclear Regulatory Commission have with this? This 
doesn't just affect St. Jude's Hospital in our State. Sequoia, 
TVA's nuclear plants have low-level radioactive waste. Private 
companies that reduce the volume of low-level radioactive waste 
have to then send it somewhere.
    Our research universities and hospitals at Vanderbilt and 
at the University of Tennessee have all this. If we can't send 
it somewhere, which apparently we can't after the middle of 
next year, we have to store it on site. There are some 
potential problems with that. As I understand it, that is 
primarily a State regulatory responsibility. But I believe you 
have some oversight.
    So my question is, what can you tell me about the future of 
the disposal properly and safely of low-level radioactive waste 
in a State like Tennessee from St. Jude's Hospital, research 
universities, from our nuclear plants. What can we do with it? 
Or if it is kept on site, what should the State be doing or 
what should you be doing to make sure that it is properly 
secure?
    Mr. Klein. Senator, you have touched on an issue that has 
serious consequences for the entire Nation. As you indicated, 
the process that the Senate and Congress had looked at a number 
of years ago for the compacts were States would get together 
and dispose of low-level radioactive waste has not exactly been 
a successful program. It has been a very contentious one, very 
difficult.
    For the nuclear powerplants that we regulate, they have the 
advantage that the hospital that you mentioned does not, and 
that is, space. They can compact, they can store it on site if 
they need to. Currently the site that is most likely to be used 
will be the one in Utah, the Clive facility. That facility will 
accept waste from other States, so that is an option.
    But I can tell you, in my previous position at the 
University of Texas system, we built a building in West Texas 
to consolidate the radioactive waste, to store it while we were 
waiting for the low-level waste site to get licensed in the 
State of Texas.
    Senator Alexander. Who regulated you? Did you regulate 
yourself? Was there a State agency that did that?
    Mr. Klein. We were regulated by the State. The State of 
Texas is an agreement State, so we were regulated by the State.
    Senator Alexander. Does the NRC have a division that 
oversees what States are doing to regulate low-level 
radioactive waste?
    Mr. Klein. Most States follow our characterization of the 
waste, like Class A, Class B, Class C. So we have designations. 
They follow our guidelines.
    Senator Alexander. But on B and C, do you oversee what a 
State like Tennessee would be doing about onsite inspection of 
low-level radioactive waste?
    Mr. Klein. In general, that is a responsibility of the 
State.
    Senator Alexander. Thank you, Mr. Chairman.
    Senator Carper. Thank you, Senator Alexander.
    We will start a second round of questions, and I think we 
are going to have a vote about 11:55, and it would be great if 
we could complete our questioning of this panel before we may 
have to take a short break to run off and vote.
    Gentlemen, the GAO testimony that we will hear in a couple 
of minutes mentions that the NRC intends to contract commercial 
companies to assist the NRC in reviewing the safety and 
environmental portions of a number of these applications we are 
looking forward to. What exactly would these commercial 
companies be doing? Are any of these companies doing any work 
for any current licensees?
    Mr. Klein. Senator, as you might expect, the NRC as most 
areas, oftentimes at the encouragement of OMB because of full-
time equivalent limitations, contracts technical work. So we do 
have some companies, national labs included, that provide us 
technical assistance. But the NRC makes the decisions.
    Senator Carper. All right. Can you give us some better 
idea, my question is, what exactly would these commercial 
companies be doing? Are any of those companies currently doing 
work, to your knowledge, for current licensees?
    Mr. Klein. We have a fairly rigorous program, so that there 
is no conflict of interest. Before we award contracts, our 
legal team looks at contracts to make sure that there is no 
conflict of interest.
    Senator Carper. Would any of the commissioners like to 
explain for us the nature of the work that these commercial 
companies would be doing?
    Mr. Jaczko. In general, Mr. Chairman, if I could, generally 
for the new reactor work, we are anticipating about a third of 
the contract, a third of the work on reviewing reactor 
application be done by contract, or by a variety of 
contractors. Generally what the process involves, it is a 
process that we currently follow when we do environmental 
reviews. The contractor will provide generally a first draft, 
of certain aspects of the document in question, if it is an 
environmental document or if it is a safety document.
    Then what will happen is, after they have done that first 
draft, they will get together with the agency staff. The agency 
staff will then review it and take responsibility for the 
document and for the work.
    With the new reactor work, they will also be involved in 
developing some of the questions that we will ask for 
applicants. But again, it is a very rigorous and controlled 
process that is presented to the staff. The staff then makes 
the final determinations about what questions to ask and the 
answers and whether or not they are acceptable.
    So it is a process where initially, for some of the 
technical document development, the contractors will provide 
work to the staff and then ultimately the staff takes 
responsibility for that and produces the final document.
    Senator Carper. That is good to hear, thank you.
    We have already talked, several of our colleagues have 
already raised the issue of space. I am not going to get into 
it here, but Senator Voinovich, Senator Cardin and myself are 
very much interested in making sure that you have what you need 
to maximize your efficiency, to enable you to do your jobs as 
best you can. To the extent that we can be helpful in that 
process, we want to. I will just leave it at that, let's 
continue to have a good dialogue.
    Mr. Klein. We appreciate your past support and we look 
forward to your future assistance.
    Senator Carper. Thank you.
    Mr. Jaczko. Senator, if I could add real quickly to that. 
The practical reality, however, is that we will not be 
consolidated while we do the bulk of this new reactor work. The 
help that the committee has provided to us in particular has 
been on acquiring a new building or new construction. That will 
take at least, probably 3 years until we can move into that 
space. So over the next 3 years, we are going to be in a 
variety of locations. That will not be an optimal situation for 
us.
    Senator Carper. OK. I believe there are currently 10 
reactors in column three of the NRC's action matrix. Could you 
all just briefly describe what exactly does it mean to be in 
column three? If you believe these plants are improving, or 
they may require even further oversight?
    Mr. Klein. When a reactor moves into column three, they get 
a lot more guidance from the NRC, both from headquarters, from 
the region and from resident inspectors. It is a trend that we 
have been watching. One of the concerns that we have as a 
regulator is that we don't lose focus on that existing fleet 
while we look at these new reactors coming at us.
    So we divided up the Agency into offices having operating 
nuclear reactor oversight separate from the new reactor 
organization, in order to maintain focus on that existing 
fleet. So we watch those reactors, I think our resident 
inspectors and the regional offices are doing a very good job. 
We are finding things where the utilities are not being as 
rigorous as we would like. When that happens, they move into 
higher oversight, which the reactor oversight program does. 
That means that when we see declining performance, we spend 
more time at that facility to ensure public health and safety.
    Senator Carper. Commissioner Lyons?
    Mr. Lyons. Just a comment that any licensee whose plant is 
in column three certainly has a very strong motivation for 
movement back into No. 1 or No. 2.
    Senator Carper. How would you describe that motivation?
    Mr. Lyons. From any number of standpoints. The increased 
assistance, as the Chairman referred to it, the regulatory 
oversight that we are providing, could be viewed as a burden to 
the licensee. I am sure it is a burden to the licensee. But it 
is also something that we regard as absolutely essential in 
trying to reverse declining performance.
    But a plant in column three has two directions to go. We 
are doing our level best to move them back in the correct 
direction. I believe licensees are, too. But we are carefully 
assessing their progress as they are in column three.
    Mr. Klein. One specific incentive that they have is because 
we are 90 percent fee recoverable. They get to pay for the 
assistance we provide them.
    Senator Carper. Well, that ought to be a pretty good 
incentive.
    My time is expired. Senator Voinovich?
    Senator Voinovich. Senator Sanders mentioned efficiency, 
energy efficiency. I might mention that a lot of our facilities 
could be a lot more efficient if we didn't have the controversy 
over new source review, which is still in the courts, and 
people are uncertain about what they can or cannot do. I am not 
sure that affects your operations, new source review. But you 
have improved the efficiency of the nuclear powerplants 
throughout the United States. My understanding is that they 
have made them more efficient, they are generating a lot more 
megawatts than they originally had anticipated and they 
continue to move up and you take that into consideration in 
your relicensing. Is that right?
    Mr. Klein. That is correct, Senator. If you look at the 
efficiencies in the 1980s, it was in the 60 percent efficiency 
factor. Most of these plants are running now in the 90s. A good 
part of that is the practices of the utility themselves, but 
also the oversight.
    Senator Voinovich. So they are generating more megawatts 
than the did originally when they were built?
    Mr. Klein. A lot better.
    Senator Voinovich. We have benefitted from that during this 
interim when we haven't built any new facilities?
    Mr. Klein. That is correct.
    Senator Voinovich. We were talking about Peach Bottom and 
what happened there. Then we talked about Davis-Besse and the 
issue of institutionalizing the security culture. How do you 
measure, I mean, would I, at the time of Peach Bottom, if I 
looked, what are the indicators that you would look at, versus 
Davis-Besse, as to whether or not they had institutionalized 
security culture? I would hope that because of Davis-Besse that 
you would see a marked difference between Peach Bottom and 
Davis-Besse. How can you determine who is doing the job and who 
is not doing the job?
    Mr. Klein. On the safety culture----
    Senator Voinovich. Yes, safety culture, not security 
culture.
    Mr. Klein. On the safety culture that we look at, again we 
have different training, we look at different characteristics, 
we certainly look now at vessel head maintenance and 
inspections. So we do a lot more inspections regarding a Davis-
Besse now than had been done in the past.
    Another thing that we are doing that is fairly simple to 
remind us as a regulator that we must not become complacent is 
building a small model of the corroded Davis-Besse vessel head 
to put in our building lobby.
    Senator Voinovich. OK, but I want to get at what is the, 
Greg, you might mention this, how do you determine whether you 
go into a facility and you look at it and you say, wow, they 
have a real safety culture here. Under this culture you are not 
going to find somebody sleeping on the job, or people are 
paying attention. How do you determine whether that exists or 
doesn't exist?
    Mr. Jaczko. We have, as part of the new reactor oversight 
process, we have implemented a new safety culture program. The 
heart of that----
    Senator Carper. Let me just interject for a second. We just 
started a vote at 11:47. Would it be all right for me to run 
and vote? I know you have to vote, and then have----
    Senator Voinovich. Go ahead.
    Senator Carper. Let me just do that, and I will be back 
within 2 minutes. Thanks very much.
    Mr. Jaczko. The heart of that program is that whenever we 
find we get a finding from one of our inspectors, if that 
finding is what we call a green finding, one of the lowest of 
the significance of the findings, when we get a series of 
those, we review all of those findings for what we call cross-
cutting issues. So those are----
    Senator Voinovich. [Presiding.] What do you mean by 
findings?
    Mr. Jaczko. So if we identify that a plant has violated 
some aspect of our regulation, and that is done through an 
inspection, through our normal inspection process. When we do 
that, we look at that, and particularly those large numbers of 
findings we get, or inspection problems that we identify. We 
look at those and we look and see if they fall into a series of 
bins. Those bins are really geared toward identifying the 
elements of safety culture, things like, do you properly 
identify problems.
    When you identify problems, do you properly disposition 
them through the corrective action program. If we see trends in 
that area, then we can initiate a kind of process involving the 
safety culture review, which can involve things like having 
surveys done of the employees to see what the safety culture is 
like. We usually have the licensees do that through a 
contractor, and these contractors do this throughout the 
industry. So they can often then compare the safety culture 
performance at a licensee with safety culture throughout the 
industry.
    So that is one of the main areas. The more comprehensive 
approach then involves somebody----
    Senator Voinovich. You are in management, and you have 
various management throughout the Country. Don't you have some 
kind of objective that says, if you are going to have a place 
that is going to have safety culture, then there is a series, a 
training program that should be adopted. They pretty well agree 
that that training program is an outstanding program and that 
this outfit, this facility has taken on that training program. 
Everybody has been in it. They periodically review it to make 
sure that it is up to snuff, they renew the lessons learned, 
they have an orientation program for new people that come into 
that.
    Don't you have some kind of standard thing you look at?
    Mr. Jaczko. The simple answer, Senator, in my view, is that 
we don't. Safety culture is not a regulatory requirement for 
the NRC. It is something that we have tried to incorporate into 
the oversight process. But fundamentally, it is not a 
regulatory requirement. It is certainly an area that I believe 
we need to look at more definitively to establish some kind of 
more standard program as you have described.
    But it is very controversial, quite frankly, because we are 
getting very close then into management issues. As I indicated 
in my initial remarks, we don't regulate management.
    Senator Voinovich. Well, that is a lay-up shot. I mean, if 
you have a program that everyone agrees is a good program and 
they are required to have it, and they are required to have 
periodic reviews of it, orientation for new people, I don't see 
how anybody can object to that kind of oversight.
    Mr. Jaczko. I really agree. I think it is something that we 
should take a look at and we need perhaps a more involved 
program than we have right now.
    But certainly the program we have right now is in a pilot 
phase, we are looking within 18 months, as Commissioner Lyons 
said, we will go back and reevaluate that and see, did it 
provide us with enough information to properly evaluate safety 
culture. If it doesn't, then we will have to look at some of 
these other areas, I believe.
    Mr. Klein. Let me clarify. There is a----
    Senator Voinovich. I want to get Senator Sanders in.
    Senator Sanders. I didn't mean to interrupt. We have a vote 
in a minute, I just wanted to ask a question. Thanks. I 
apologize.
    Mr. Klein, a moment ago, you mentioned an independent 
safety culture review would be conducted at the Palo Verde 
Nuclear Plant in Arizona. Now, what interests me is the word 
independent, because the legislation that I have introduced 
calls for an independent safety assessment. Does that review in 
Arizona involve independent contractors and representatives 
appointed by the Governor of Arizona?
    Mr. Klein. It does not. It is an independent look at the 
safety culture.
    Senator Sanders. What do we mean by the word 
``independent''? To my mind, it is that we have some 
independence from just the NRC. So I am not quite sure that the 
word independent is totally correct in this context.
    Mr. Klein. It may not mean the same independence as you are 
referring to. This is a look by people who are trying to give 
us guidance on a safety culture, as Commissioner Jaczko 
indicated. We are trying to learn what characteristics do we 
look for that demonstrates a good safety culture.
    Senator Sanders. Fair enough. I would hope that you will be 
more open to a truly independent process which involves State 
officials and engineers not appointed by the NRC. I think that 
would give a lot of confidence to the people of the given 
communities.
    I wanted to just jump to another question before we leave 
and vote. Nobody up here, or in the NRC, knows what is going to 
happen with Yucca Mountain. It is a political debate, it is in 
the courts, there are environmental concerns, et cetera. When I 
hear people talking about dozens of new nuclear powerplants, 
has it occurred to people that we may not have a place to put 
all these lethal nuclear waste? What happens if Yucca isn't 
approved? Mr. Klein or anybody else, what do you do then?
    Mr. Klein. As the regulator, we will review an application, 
once we receive it, from the Department of Energy. So as a 
regulator, we would evaluate the impact of termination of the 
Yucca Mountain program.
    Senator Sanders. You didn't answer my question. It is a 
very simple question. People here are talking about the 
construction of many, many new nuclear powerplants. I am not 
convinced that you know what to do with this highly lethal, 
high-level waste that is going to be produced if Yucca does not 
turn out to be the repository that we are talking about.
    Mr. Klein. Currently, we license at-reactor storage in dry 
cask containers that is safe. The Department of Energy is also 
looking----
    Senator Sanders. That is safe, is that what you just said?
    Mr. Klein. It is safe.
    Senator Sanders. But do you know that there are many people 
who are concerned about having high-level waste in dozens of 
locations around America?
    Mr. Klein. A lot of sites, most sites now have run out of 
space in their spent fuel pool and have dry cask storage. That 
can be done safely up to 100 years. DOE is looking at other 
options, including recycling.
    Senator Sanders. Safely is a big word when we have Osama 
bin Ladin and other people running around as well. I hope you 
will recognize that.
    Mr. Jaczko. Senator, if I could add.
    Senator Sanders. Yes.
    Mr. Jaczko. The NRC has looked, in particular, at the issue 
of dry cask storage and storage at reactor sites. When we say 
safe, it is very, very safe. This is something that we have 
done extensive studies on, looking at the safety as well as the 
security aspects of the dry cask storage fuel. It is something 
that from a risk perspective, the risk is very close to zero, 
really, for any kind of public health consequences from the 
storage of this fuel.
    Senator Sanders. You are aware that there are people, who 
are quite knowledgeable, who have very serious concerns about 
the safety aspects of having dozens and dozens of locations in 
this Country which contain high-level nuclear waste, at a time 
when we are under terrorist attacks. In some cases, this waste 
is located near rivers and so forth. You are aware that, your 
opinion, which I respect, is not held unanimously, is that 
true?
    Mr. Jaczko. I certainly can't comment on other people's 
opinion, but I would say, we have looked extensively at these 
issues, and we do believe that this is an area that, in my view 
personally, it is certainly not the most significant issue that 
we would look at in a nuclear powerplant. We have security 
regulations and we are currently reviewing those security 
regulations right now for those dry cask storage facilities. We 
have looked at these issues.
    Senator Sanders. Mr. Lyons, and then I am going to have to 
run.
    Mr. Lyons. Senator Sanders, if I could, to me there is a 
clear distinction between the responsibility of the NRC for 
safe storage, and I fully agree with my colleagues that we are 
assuring safe storage. But there is a big difference between 
our assurance of the safety and I believe the public policy 
issues that Congress has to deal with from the standpoint of an 
overall national spent fuel policy. At the moment, we have a 
Waste Policy Act which says the DOE must work towards Yucca 
Mountain.
    But there certainly are other technical options for 
management of spent fuel, and it will be up to Congress to 
evaluate those other possibilities.
    Senator Sanders. All that I am suggesting, Mr. Lyons, is 
that in the real world, I don't think anybody up here can 
guarantee you with absolute certainty that Yucca Mountain is 
going to be the repository. What I am hearing from Mr. Jaczko 
is that we may be looking at dozens and dozens of repositories 
all over this Country, which I can assure you some very smart 
people have safety concerns about.
    I have to run to vote. Thank you.
    Senator Voinovich. We are going to recess for the vote, and 
allow the next panel to get ready. We thank you for being here. 
There are lots of questions that still haven't been answered. 
The record is going to remain open so that members of this 
committee can submit them to you in writing. We really 
appreciate your devotion to making sure that the renaissance 
takes place.
    We are recessed.
    [Recess.]
    Senator Carper [Presiding]. The subcommittee will come to 
order.
    I am going to invite our second panel to come forward and 
to join us at this time. The good news is I don't think we are 
going to have any other votes immediately. If we are lucky, we 
will be able to proceed through this panel and ask you 
questions and conclude for the day.
    On this panel we have three folks. Mark Gaffigan is the 
Acting Director of the Natural Resources and Environment of the 
Government Accountability Office. David Lochbaum, Director, 
Nuclear Safety Project, Union of Concerned Scientists, welcome. 
Thank you for joining us today. Marvin Fertel, Senior Vice 
President and Chief Nuclear Officer of the Nuclear Energy 
Institute. We are delighted that you are here. Your entire 
statements will be made part of the record. I will ask you to 
summarize in about 5 minutes, and then we will ask some 
questions of you.
    Mr. Lochbaum, I am going to ask you to lead off for us, 
then we will turn to Mr. Fertel and then Mr. Gaffigan.

   STATEMENT OF DAVID A. LOCHBAUM, DIRECTOR, NUCLEAR SAFETY 
             PROJECT, UNION OF CONCERNED SCIENTISTS

    Mr. Lochbaum. Mr. Chairman, on behalf of the Union of 
Concerned Scientists, I want to thank you for this opportunity 
to present our views. We evaluated the Nuclear Regulatory 
Commission against four attributes established by an 
international organization in 2001. The bad news is that the 
NRC got failing grades on two of those attributes. The good 
news is that the NRC easily passed one attribute. The best news 
is that the necessary reforms are ready to be applied to the 
Nuclear Regulatory Commission.
    The first attribute was, ensure that an acceptable level of 
safety is being maintained. For the past 30 years, UCS has 
seldom contended that the NRC's regulations were too lax. Our 
positions consistently matched by the regulations made by the 
GAO, the NRC's Inspector General and other public interest 
groups that implicitly concede that these regulations are 
adequate. The NRC's probe into Davis-Besse recommended 49 
things the agency should do to fix that problem. Only 6 percent 
of those recommendations involved changes to existing 
regulations. So the NRC got a passing grade for establishing an 
acceptable level of safety.
    The second attribute was, take appropriate actions to 
prevent degradation of safety. Whereas the first attribute sets 
the safety bar at the proper level, this attribute protects 
against any nuclear reactor doing the limbo beneath that safety 
bar. The NRC gets a failing grade in this area. Among many 
examples that we could cite are, since 1966, there have been 51 
reactor outages lasting 1 year or longer to return to the 
proper side of that safety bar. An effective regulator would 
not let safety levels repeatedly drop so low as to require more 
than a year to fix.
    Beginning in 2002, the NRC has conducted more than a dozen 
inspections at reactors seeking power up-rates, and has never 
identified a single problem at any one of those reactors, 
despite many power up-rate related problems that late forced 
these reactors to shut down or reduce power. Eighteen months 
ago, the Nuclear Regulatory Commission ordered that emergency 
sirens for the Indian Point Nuclear Plant in New York be 
provided with backup power. In April of this year, the NRC 
proposed a fine when that deadline passed. The company paid the 
fine and committed to comply with the order by August of this 
year, which has now also passed without compliance.
    The NRC's regulations permit a $130,000 fine per day to be 
levied. The NRC could have fined Indian Point over $22 million 
for the 171 violations of the days to date, but instead applied 
a one-time fine of $130,000. Instead of aggressive enforcement 
regulations, the NRC is a meek and mild enabler of non-
conforming behavior. The NRC gets a failing grade in this 
attribute.
    The third attribute is performing regulatory functions in a 
manner that ensures that operating organizations, the general 
public and the Government have confidence in that performance. 
There is considerable talk today and elsewhere about 
independent safety assessments reflecting lack of confidence in 
the NRC. After all, if the NRC were trusted, there would be 
little interest by governors, public service commissions and 
the public in extraordinary inspections.
    There are plenty of other indicators showing the NRC 
deserves a failing grade for this attribute. The States of 
Massachusetts, New Jersey and Vermont are currently legally 
intervening to oppose changes at nuclear reactors in their 
States supported by the Nuclear Regulatory Commission. Because 
this lack of confidence is real, UCS supports S. 1008, 
introduced by Senator Sanders, as a means of restoring 
confidence in the NRC.
    The fourth attribute is striving for continuous 
improvements in performance. This criterion is merely striving 
for continuous improvements. The NRC has self-assessment 
processes for and solicits external stakeholders about its 
regulatory programs, attesting to striving. But chronic 
inability to benefit from these efforts is hardly basis for a 
passing grade. Thus, the NRC gets neither a passing nor a 
failing grade in this area.
    The good news is that the NRC is very much like Davis-
Besse, Palo Verde, Millstone, Salem and the other poorly-
performing plants before their reforms. The reforms these sites 
took involved two common threads. One was bringing in senior 
managers from the outside to drive the necessary reforms, and 
two was improving the safety culture so the entire organization 
was properly focused on safety.
    The NRC suffers from these same chronic performance 
impairment but has never received the same treatment. Thus, the 
NRC remains marred at the same level while these other plants 
are operating much better today. The NRC can't get any better 
until senior managers are brought in from the outside who can 
be agents of change instead of agents of status quo.
    On behalf of the Union of Concerned Scientists, I thank you 
for conducting this hearing and for including our perspective. 
We look forward to the steps you take to bring about the needed 
reforms at the NRC. Thank you.
    [The prepared statement of Mr. Lochbaum follows:]
Statement of David A. Lochbaum, Director, Nuclear Safety Project, Union 
                          Concerned Scientists
    Mr. Chairman and members of the subcommittee, on behalf of the 
Union of Concerned Scientists (UCS), I thank you for this opportunity 
to present our views on the Nuclear Regulatory Commission's (NRC's) 
reactor oversight process.
    My name is David Lochbaum. After obtaining a degree in nuclear 
engineering from The University of Tennessee in 1979, I worked more 
than 17 years in the nuclear power industry, mostly at operating 
reactors in Georgia, Alabama, Mississippi, Kansas, New Jersey, 
Pennsylvania, New York, Ohio and Connecticut. I joined UCS in October 
1996 and am the Director of the Nuclear Safety Project. Since nearly 
its inception in May 1969, UCS has maintained an interest in nuclear 
powerplant safety. UCS is neither an opponent nor a supporter of 
nuclear power--our perspective is that of a nuclear safety advocate.
    In 2001, the Nuclear Energy Agency, formed in February 1958 as part 
of the Organization for Economic Co-operation and Development (OECD), 
released a report titled ``Improving Nuclear Regulatory 
Effectiveness.'' A task group consisting of representatives of 
regulatory bodies from around the world, including the NRC, developed 
this report. A nuclear regulator was defined to be effective when it:
     Ensures that an acceptable level of safety is being 
maintained by the regulated operating organizations.
     Takes appropriate actions to prevent degradation of safety 
and to promote safety improvements.
     Performs its regulatory functions in a timely and cost-
effective manner as well as in a manner that ensures the confidence of 
the operating organizations, the general public, and the government.
     Strives for continuous improvements in its performance.
    As discussed below, we evaluated the NRC against these four 
attributes. The bad news is that the NRC does not warrant a passing 
grade in all of these areas. The good news is that the NRC does score 
well in some of the areas, providing hope that reforms can be 
successfully implemented to make the NRC into the effective regulator 
Americans deserve. The best news is that the needed reforms have 
already been identified and road-tested and merely need to be applied 
to the NRC.
 ensures that an acceptable level of safety is being maintained by the 
                   regulated operating organizations
    To distinguish this criterion from the second one (``takes 
appropriate actions to prevent degradation of safety''), UCS considered 
this first criterion to involve establishing appropriate regulations 
such that the safety bar is set at the proper level.
    From the inception of our nuclear safety project in the early 
1970s, we have seldom contended that the NRC's regulations were too lax 
and the safety bar needed to be raised. Thus, we firmly believe the NRC 
deserves a passing grade, perhaps with honors, for establishing 
regulations that provide an acceptable level of safety.
    Our conclusion is confirmed by assessments made by other 
evaluators, including the NRC itself. The recommendations by the U.S. 
Government Accountability Office, the NRC's Inspector General, and 
other public interest groups rarely involve revising or supplementing 
existing regulations, implicit concessions that these regulations 
adequately protect public health (if only they were followed). The 
quintessential example comes from the NRC's own lessons learned task 
force probe into the recent debacle at Davis-Besse. This effort 
produced 49 recommendations on things the NRC should do to prevent 
another debacle. Only 3 of these 49 recommendations entailed revisions 
to or additions to the regulations. The overwhelming majority of the 
recommendations involved more effective enforcement of the existing 
regulations.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    UCS, without reservations or qualifiers, concludes that NRC has 
earned a passing grade with respect to establishing regulations that 
set the safety bar at the proper level.
   takes appropriate actions to prevent degradation of safety and to 
                      promote safety improvements
    UCS considered this second criterion to entail consistent, 
effective, and timely enforcement of regulations. Whereas the first 
criterion sets the safety bar at the proper level, this criterion 
protects the public from any nuclear reactor doing the limbo beneath 
the bar.
    By any reasonable measure, the NRC deserves a failing grade in this 
area. Among an abundant stockpile of ineffective regulation examples 
are:
     Since 1966, there have been fifty-one (51) outages lasting 
1 year or longer at U.S. nuclear power reactors to restore safety 
levels to the proper side of the safety bar. An effective regulator 
would not be so unaware or unconcerned about nuclear reactor safety 
levels to let them repeatedly drop as low as to require more than a 
year to restore them to acceptable levels. These 51 outages--with an 
estimated price tag of over $82 billion--are described in our September 
2006 report, ``Walking a Nuclear Tightrope: Unlearned Lessons of Year-
plus Reactor Outages,'' available online at http://www.ucsusa.org/
clean--energy/nuclear--safety/unlearned-lessons-from.html
     From 1986 to 2006, the emergency backup power system at 
the Fermi Unit 2 reactor in Michigan was tested dozens--perhaps 
hundreds--of times using the wrong answer key. Workers and NRC 
inspectors had literally thousands of opportunities over these two 
decades to catch this error, but all failed to do so. This fiasco is 
documented in our February 2007 report, ``Futility at the Utility: How 
use of the wrong answer key for safety tests went undetected for 20 
years at Fermi Unit 2,'' available online at http://www.ucsusa.org/
clean--energy/nuclear--safety/two-decades-of-missed.html
     From 1996 until 2005, repeated leaks from the discharge 
line at the Braidwood nuclear plant in Illinois dumped more than 6 
million gallons of radioactively contaminated water into the ground, 
some of which migrated offsite and into the drinking wells of nearby 
homeowners. Although federal regulations prohibit the unmonitored and 
uncontrolled release of radioactive air or liquid to the environment, 
the NRC intentionally opted to ignore those regulations and instead 
apply regulations governing monitored and controlled releases. In doing 
so, the NRC verified that Braidwood met the regulation that did not 
apply to the situation. That's nice, but irrelevant.
     From around 1999 to 2002, borated water leaked through a 
cracked nozzle at the Davis-Besse reactor in Ohio causing extensive 
damage to its reactor vessel lid. Although regulations require a 
reactor to shut down within 6 hours when such leakage occurs and both 
the owner and the NRC agreed in early October 2001 that one or more 
nozzles was leaking, the reactor was allowed to continue operating for 
roughly 500 times longer than permitted by the safety regulations.
     Beginning in 2002, the NRC conducted more than a dozen 
targeted inspections at reactors seeking approval for extended power 
uprates (i.e., more than a 7\1/2\ percent increase in the maximum 
licensed power level). The NRC inspectors never identified a single 
problem at any reactor. Since 2002, reactors for which the NRC has 
approved extended power uprates have experienced many uprate-related 
problems that forced the reactors to shut down or operate at reduced 
power levels. We do not expect the NRC to have found and prevented all 
these problems, but they certainly can be faulted for not finding even 
one among so many serious problems.
     On January 31, 2006, the NRC ordered that emergency sirens 
for the Indian Point nuclear plant in New York be provided with back-up 
power supplies by January 30, 2007. On January 23, 2007, the NRC 
relaxed the order to give the owner until April 15, 2007, to provide 
the back-up power supplies for the sirens. On April 23, 2007, the NRC 
proposed a civil penalty of $130,000 because the April 15th deadline 
had passed without compliance to the order. The company paid the fine 
and committed to comply with the order by August 24, 2007. The company 
did not meet the August 24th date, either. The NRC's regulations permit 
a civil penalty of $130,000 to be levied for each day of a continuing 
violation. Indian Point has been in violation of the NRC's order, as 
revised, since April 15, 2007, yet the NRC opted to ignore its own 
regulations and instead apply a one-time fine of merely $130,000. The 
NRC is not an aggressive enforcer of regulations, it is a meek and mild 
enabler of non-conforming behavior.
     During FY 2006, the owners of operating nuclear reactors 
provided the NRC with the results on 1,854 performance indicators. 
These performance indicators constitute a large part of the NRC's 
reactor oversight process for monitoring safety levels. The performance 
indicators parse safety levels into four color-coded bins: green, 
white, yellow, and red in order of increasing significance. During FY 
2006, 99.4 percent of the performance indicators were green. But the 
actual safety levels at the reactors did not warrant such green-
washing. In the 4th quarter 2006 Action Matrix, 30 of the 103 reactors 
were identified as requiring heightened NRC attention due to 
performance problems. The performance indicators have morphed into 
entirely useless measures that allow genuine safety problems to be 
undetected until they surface via other means.
     In the current license renewal proceeding involving the 
Oyster Creek reactor in New Jersey, the intervener's expert witness 
calculated that the thickness of the containment's steel liner was less 
than that allowed by the American Society of Mechanical Engineers 
(ASME) code, which the NRC formally adopted within its regulations. The 
NRC reacted to this finding by claiming that complying with the ASME 
code did not matter because the NRC thought--without providing any 
supporting documentation--that the thickness was good enough. In doing 
so, the NRC essentially established a safety bar and finds above the 
bar and below the bar to be acceptable.
    Any one of the above regulatory breakdowns warrants a failing grade 
on this criterion. The presence of them all, along with many additional 
examples, explains why the NRC received a failing grade on the next 
criterion, public confidence.
performs its regulatory functions in a timely and cost-effective manner 
  as well as in a manner that ensures the confidence of the operating 
         organizations, the general public, and the government
    There is considerable talk on Capitol Hill and around the country 
about Independent Safety Assessments (ISAs). UCS considers this talk to 
reflect lack of confidence in the NRC. After all, if the NRC had the 
trust and confidence of the public and the government, there would be 
little interest on the part of the Governors, Public Service 
Commissions, and public in a special, extraordinary safety inspection 
at their nuclear reactor.
    In addition to this ISA barometer of confidence in NRC, there are 
plenty of other indicators showing the NRC deserves a failing grade for 
this criterion. The States of Massachusetts, New Jersey, New York, and 
Vermont have legally intervened opposing changes at the nuclear 
reactors in their states that the NRC supports. Again, if these states 
had confidence that the NRC was an effective regulator adequately 
protecting the health of their residents, such interventions would not 
occur. Because this lack of confidence is real, UCS supports bill 
S.1008 introduced by Senator Bernie Sanders as a means to restore 
confidence in the NRC as a reliable guardian of public health and 
safety.
    Senator James M. Inhofe, Ranking Member of the committee, spoke 
directly to the public confidence issue in his July 13, 2007, letter to 
NRC Chairman Dale E. Klein:
    ``Unfortunately, there has been a considerable lack of 
communication on the part of the Commission. In particular, I am 
referring to the leak of high-enriched uranium at the Nuclear Fuel 
Services plant in Erwin, Tennessee. This event happened prior to your 
chairmanship, but the communication failure continued well after you 
assumed the helm. I am both surprised and sorely disappointed.
    The foundation of the Commission's credibility is the public's 
trust. That foundation is shaken when events like these are obscured by 
the Commission's lack of disclosure. While there may be aspects of 
Nuclear Fuel Services' activities that should rightly be withheld from 
the public domain, clearly the secrecy over the event's mere occurrence 
is beyond any reasonable definition of openness.''
    Like Senator Inhofe, we were disappointed by the NRC's behavior in 
this matter. But there is a silver lining. In a letter dated one week 
prior to Senator Inhofe's letter (attachment 1 to this testimony), UCS 
commended Commissioner Gregory B. Jaczko for his role in causing the 
Nuclear Fuel Services event to be publicized, albeit belatedly. His 
efforts reminded us that while the NRC's document vetting process has 
to be non-public, it is encouraging that there are dedicated 
individuals at the NRC guarding against and correcting wrong calls.
         strive for continuous improvements in its performance
    If this criterion were ``Attains continuous improvements in its 
performance,'' the NRC would get a failing grade. The regulatory 
shortfalls cited above happen year-in and year-out with little evidence 
of abatement that would result from continuous improvements in 
performance.
    But this criterion is merely striving for continuous improvements. 
The NRC has many self-assessment processes and some formal 
solicitations of external stakeholder comments about its regulatory 
programs, suggestive of an agency striving for improvement.
    But chronic inability to consider these self-assessments and 
external comments is hardly basis for a passing grade, even when the 
criterion is merely striving for continuous improvements. Thus, UCS 
believes the NRC should get a non-passing, non-failing grade.
                       the reforms needed at nrc
    The NRC today is very much like FirstEnergy was when the depths of 
the problems at Davis-Besse were discovered in 2002, or like Arizona 
Public Supply System was when the extent of problems at Palo Verde were 
discovered in 2005, or like Northeast Utilities was when problems at 
Millstone surfaced in 1996, or like Indiana Michigan Power Company was 
when problems at D C Cook arose in 1999, or like PSEG was when problems 
at Salem and Hope Creek were identified in 2004, or like the Tennessee 
Valley Authority was when problems at Sequoyah and Browns Ferry cropped 
up in the mid-1980s, or like any one of a dozen other companies were 
when their shortcomings were detected. The solutions at FirstEnergy, 
Arizona Public Supply System, Northeast Utilities et al involved two 
common threads: (1) bringing in senior managers from outside the 
organization to become the catalysts needed to drive the necessary 
reforms, and (2) improving the safety culture so the entire work 
force--management and labor--share the proper focus on safety.
    But while the NRC suffers from the same chronic performance 
malaise, it has never received the same treatment. Thus, while Davis-
Besse, Millstone, and others are operating today at higher performance 
levels than in their problem years, NRC remains at the same level it 
has been at for the past decades. No better, no worse, no excuse.
    For the same reasons it happened at FirstEnergy and elsewhere, the 
NRC cannot reform until senior managers are brought in from the 
outside. These new senior managers are not necessarily smarter than 
those they replace, but they are free of the baggage that in-house 
managers carry with them. In-house managers are shackled by the inertia 
of always having done it a certain way. In addition, it is hard for in-
house managers to be agents of change because every reform they 
undertake carries an implicit concession of their past sins. Outside 
managers are free from these impairments and can more readily implement 
the necessary reforms. It worked at Davis-Besse, Palo Verde, Millstone, 
D C Cook, et al. The NRC will never get out of its performance rut 
without senior managers brought in from the outside to blaze a 
different path and herd folks along it.
    The second remedy involves safety culture improvements. With a good 
safety culture, workers can identify problems without fear of 
retaliation and with confidence the problems will be properly fixed in 
a timely manner. This subcommittee compelled the NRC to do a better job 
of evaluating safety culture at reactor sites and responding 
appropriately when problems were indicated. It is now time for the NRC 
to hold this safety culture mirror up to itself and undertake the same 
corrective measures. The NRC's safety culture appears worse than that 
ever measured at Davis-Besse or other plagued sites. In fact, although 
the Davis-Besse plant was physically ready to restart in the fall of 
2003, the NRC determined that its safety culture had not yet 
sufficiently improved. The NRC did not approve restart of Davis-Besse 
until March 2004. Ironically, the safety culture at Davis-Besse in the 
fall of 2003 was substantially better than ever measured at NRC. 
Likewise, the safety culture measured at Salem and Hope Creek that 
compelled the NRC to write to the PSEG Chief Executive Officer in 
January 2004 to compel reforms was better than that measured at NRC. If 
it's vital that the owner of a single reactor have a good safety 
culture before restarting that reactor, it's equally vital that the 
regulator of 104 reactors have a good safety culture.


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                               conclusion
    The Nuclear Energy Agency defined four attributes of an effective 
nuclear regulator. The NRC clearly possesses one of those attributes in 
having established regulations that set the safety bar at the proper 
height. The NRC just clearly lacks two attributes in failing to 
effectively enforce its safety regulations which results in a lack of 
confidence in the agency. The NRC neither passes nor fails the fourth 
attribute because it has processes seeking continuous improvement in 
its performance but never realizes any of those sought after gains.
    In many ways, the NRC resembles the organizations responsible for 
serious safety problems at Davis-Besse, Millstone, Salem, Palo Verde, 
and elsewhere. Those organizational problems were remedied when outside 
senior managers were brought in to take the necessary reform steps and 
instill a good safety culture. By not taking these same remedies, the 
NRC is unable to cure itself of the same disease.
    The NRC helped these organizations on the road to reform. The 
Congress must help the NRC embark upon its own road to reform. Just as 
true performance turnarounds resulted from the reforms undertaken at 
Davis-Besse et al, the NRC can be reformed into an effective regulator. 
In doing so, Americans will not receive nuclear power at higher cost 
and lower safety as they have in the past.
    On behalf of the Union of Concerned Scientists, I thank you for 
conducting this hearing and for including our perspective. We look 
forward to the steps you take to bring about the reforms needed at NRC.
                               afterword
    Although not directly related to the subject of today's hearing--
the NRC's reactor oversight process for existing reactors--we want to 
bring to the Subcommittee's attention two concerns related to the NRC's 
current plans for new reactors.
    First, we are concerned about the NRC's plans to train its staff 
who will be conducting the safety and environmental reviews for new 
reactors. UCS attended the April 17, 2007, briefing on new reactors 
conducted by the NRC Commissioners. We asked about plans for training 
for all the new staff who would be performing tasks they had never done 
before or not done in decades. We anticipated the answer would include 
a role played by the NRC's technical training center outside 
Chattanooga, Tennessee. We were both surprised and disappointed to 
receive an answer that was exclusively confined to on-the-job training. 
We see an important role for on-the-job training. We see it as mortar 
to fill in the gaps between formal training bricks. The NRC plans a 
wall of mortar. We hope the Subcommittee will help the NRC abandon this 
notion and significantly ramp up the formal training provided to staff 
that will be working on new reactor issues.
    Second, we are concerned about the NRC's plans to out-source safety 
and environmental reviews of new reactor applications to private 
companies. This would be an outrageous error of judgment on the NRC's 
part. As Congressman Edward J. Markey stated in his September 24, 2007, 
letter to NRC Chairman Dale Klein:
    ``If Congress has intended to allow private companies to regulate 
private companies in the extraordinarily sensitive nuclear sector, we 
would not have established the NRC.''
    During the aforementioned April 17, 2007, Commission briefing on 
new reactors, the NRC staff informed the Commissioners that they would 
be out-sourcing the reviews to contractors. But the discussion and very 
clear implication throughout that briefing (transcript available online 
at http://www.nrc.gov/reading-rm/doc-collections/commission/tr/2007/
20070417a.pdf) was that the talented and capable staffs at our national 
laboratories, like Argonne, Brookhaven, Sandia, and Pacific Northwest 
Nuclear, would provide the NRC with this supplemental work force. 
Instead, the NRC wants to farm out safety and environmental reviews for 
new reactors to private companies. We hope the Subcommitte will get the 
NRC to halt this unwise step before it is taken.
                                 ______
                                 
        Responses by David A. Lochbaum to Additional Questions 
                           from Senator Boxer
    Question 1. In your testimony, you stated that 99.4 percent of 
nuclear powerplant performance indicators (PIs) were labeled green in 
Fiscal Year 2006, but that this large percentage of green indicators 
was not an accurate reflection of plant performance since 30 reactors 
were identified as requiring additional NRC attention during fourth 
quarter of 2006. How do you explain this discrepancy? How can the NRC 
make PIs more accurate or useful?
    Response. When the performance indicators (PIs) were developed 
prior to the roll-out of the reactor oversight process in April 2000, 
the threshold for crossing from green to white (e.g., transitioning 
from expected/desired performance to the first downgraded performance 
level) was established based on past industry operating experience such 
that 95 percent of that track record was green and five percent was 
not. Since the PIs were launched, the NRC has allowed the industry to 
``game'' the PIs such that the PIs are now green almost all of the 
time, regardless of underlying performance. For example, one of the PIs 
tracks unplanned power changes. An ``unplanned power change'' is 
defined as a power reduction of 20 percent or more that was not planned 
more than 72 hours in advance. Companies are ``gaming'' both halves of 
this equation. The owner of the Salem nuclear plant in New Jersey 
repeatedly made power reductions of just under 20 percent to apply 
band-aids rather than real fixes to a recurring equipment problem--the 
precise behavior pattern this particular PI was intended to flag. The 
owner of another plant recently sought and obtained permission from NRC 
not to count a power reduction of greater than 20 percent planned less 
than 72 hours in advance. The NRC must not allow its licensees to scoff 
at PIs or play games with the counting so as to be able to always turn 
in green PIs. Nearly five million Americans live within 10 miles of 
operating nuclear powerplants. They deserve more than this green card 
system.

    Question 2. According to your testimony, the NRC has not inspired 
public confidence in its oversight of nuclear powerplants. Do you have 
any suggestions on how the NRC can gain public confidence?
    Response. The key to gaining public confidence is simple--the NRC 
need only enforce its safety regulations. When the North Carolina Waste 
Awareness and Reduction Network and UCS petitioned the NRC last year to 
take enforcement action against the Shearon Harris nuclear plant 
because that facility had been in violation of fire protection 
regulations since 1992, the NRC first pointed out that the plant had 
been in violation since 1989 and then denied our petition. The Harris 
plant remains in violation today. When the U.S. Congress created a law 
that required back-up power be provided for the emergency sirens around 
the Indian Point nuclear plant in New York, the NRC meekly watched as 
Indian Point missed deadline after deadline. The Indian Point nuclear 
plant remains in violation today. When the NRC received detailed 
information in March 2007 about security guards sleeping on duty at the 
Peach Bottom nuclear plant in Pennsylvania, the NRC did little until 
they saw videotapes of the sleeping security guards broadcast on WCBS-
TV in September 2007. The American public needs to see NRC enforcing 
regulations rather than tolerating violations and turning a blind eye 
towards reports of violations.
                                 ______
                                 
        Responses by David A. Lochbaum to Additional Questions 
                          from Senator Inhofe
    Question 1a. In your testimony, you states that the NRC can not 
reform until senior managers are replaced, that senior managers ``from 
the outside'' are ``free of the baggage that in-house managers carry,'' 
and are ``. . . shackled by the inertia of always having done it the 
same way.''
    Since the Reactor Oversight Process established in 2000 
fundamentally changed the way oversight is conducted, please explain 
how senior managers failed to adapt to that change and remain shackled 
to the old ways.
    Response. In a word, Davis-Besse. In March 2002, NRC's performance 
indicators and inspection findings for Davis-Besse were all good. In 
March 2002, workers at Davis-Besse uncovered the worst reactor safety 
problem since the 1979 Three Mile Island partial meltdown. That 
humongous gap between NRC perception and reality resulted largely 
because the NRC did not apply its new-fangled reactor oversight process 
(ROP) to Davis-Besse but instead did oversight its old-fashioned way.

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    The ROP called for Davis-Besse to have at least two full-time NRC 
resident inspectors. NRC senior managers assigned only one full-time 
resident inspector for many months and did not compensate with more 
part-time inspectors from the regional or headquarters offices. The ROP 
called for Davis-Besse to receive periodic visits from the NRC project 
manager. Those visits did not happen. The ROP called for Davis-Besse to 
receive at least a baseline level of NRC inspection hours. The NRC's 
effort fell far short of that minimum level. Rather than conducting the 
ROP and letting that effort determine what grade or rating Davis-Besse 
warranted, the NRC senior managers had some pre-conceived notion as to 
Davis-Besse's stellar performance and used that false impression to 
dictate the scope and focus of the effort. That's the subjective, 
unreliable behavior that ROP was specifically designed to prevent. But 
ROP can only achieve that objective when NRC's senior managers abide by 
it. Thus, Davis-Besse is not a poor reflection on the ROP because the 
NRC wasn't using the ROP at Davis-Besse. They were using their former 
oversight regime disguised in the new ROP trappings. It hadn't worked 
before and Davis-Besse demonstrated, again, that it's unworkable.

    Question 1b. Please explain how you suggest distinguishing between 
what you consider ``baggage'' and others consider ``experience.''
    Response. Three case studies illustrate the difference. In 1996 and 
into 1997, the owner of the Maine Yankee nuclear plant appeared before 
the NRC Commissioners repeatedly due to recurring safety problems at 
their facility. David Flanagan, Chairman of the Board, and his senior 
managers explained to the Commissioners that management at Maine Yankee 
stayed the course while the rest of the industry set increasingly 
higher standards and expectations. Over time, this isolation resulted 
in Maine Yankee's performance falling farther behind industry norms. 
The solution was to bring in outside managers through Entergy to 
provide the fixes. A decade later, the owners of the Point Beach 
nuclear plant in Wisconsin and the owners of the Palo Verde nuclear 
plant in Arizona replicated both the performance deficiency and the 
senior management change solution that Maine Yankee experienced. The 
senior managers at Maine Yankee, Point Beach, and Palo Verde were all 
accumulating experience, but that experience was similar to the movie 
``Groundhog Day'' in that they were re-living the same thing over and 
over. The new senior managers brought in to these plants had experience 
with higher standards and expectations that had been commonly adopted 
within the industry.

    Question 1c. In your opinion, how long of a tenure is too long for 
a senior manager?
    Response. UCS is not advocating purging existing senior managers at 
NRC or capping the tenures of NRC senior managers. These individuals 
have provided many years of dedicated service and do not deserve to be 
discarded. Instead, UCS advocates that when senior management positions 
open up at NRC due to retirements, promotions, and departures from the 
agency, these opportunities should result in the positions being filled 
by the best available candidates. Sometimes, the best available 
candidate will be an NRC employee. But there will also be times when 
that person exists outside the agency.

    Question 1d. How long have you been with the Union of Concerned 
Scientists?
    Response. I have been with UCS for over 11 years, since October 
1996. However, my tenure is irrelevant to the issue whether it was 1 
day or 1 quarter century for the simply reason that I am not a senior, 
or even junior, manager at UCS. No one reports to me. I have three 
layers of management between me and the President of UCS. When I came 
to UCS, Howard Ris was UCS's Executive Director (title later 
reclassified to President). When Mr. Ris left UCS in 2003, he was 
replaced as President by Kevin Knobloch. Mr. Knobloch came to UCS in 
2000. While a UCS manager with 3 years' in-house tenure might not be 
considered an ``outsider,'' we can claim full credit for Mr. Knobloch's 
replacement, Kathy Rest. Ms. Rest came to UCS in 2003 from the outside 
as our new Executive Director. UCS indeed practices what we preach.

    Question 2. In advocating the need to replace the NRC's senior 
managers, you cite examples of plant operators who brought in senior 
managers from outside the organization, but from other operating 
companies. Where do you suggest the NRC find qualified, experienced 
replacements for its senior managers?
    Response. Senior managers are primarily leaders who establish 
appropriate standards and policies and manage resources as needed to 
ensure these objectives are met. They are not the subject experts 
performing the technical evaluations and computer analyses. Candidates 
to replace these NRC senior mangers could come from other government 
agencies with strong histories in nuclear technology, such as the 
Department of Energy; from national laboratories with extensive nuclear 
technology experience, such as the Oak Ridge National Laboratory, the 
Idaho National Energy and Environmental Laboratory, from the Argonne 
National Laboratory; from the many universities who have long 
maintained nuclear engineering and research programs, such as The 
University of Tennessee, Oregon State University, and the Massachusetts 
Institute of Technology; and from private industry. It might be argued 
that tenure and pension arrangements pose barriers for such candidates, 
but similar issues have not prevented senior managers from nuclear 
plant X from departing for more senior management positions at nuclear 
plant Y. The NRC rightfully boasts of being ``a great place to work.'' 
If so, it should have little difficulty recruiting top-notch 
individuals from outside the agency to fill senior manager positions.

    Senator Carper. Mr. Lochbaum, thank you for those comments. 
We look forward to asking some questions of you.
    Mr. Fertel, you are recognized, and then we will recognize 
Mr. Gaffigan.

STATEMENT OF MARVIN S. FERTEL, SENIOR VICE PRESIDENT AND CHIEF 
           NUCLEAR OFFICER, NUCLEAR ENERGY INSTITUTE

    Mr. Fertel. Thank you, Mr. Chairman. On behalf of the 
nuclear industry, I thank you for the opportunity to testify 
today.
    The NRC Reactor Oversight Program, or the ROP, began in 
April of 2000. Today the ROP has matured, but it is still 
evolving, due to a culture of continuous improvement. With the 
exception of safeguards information that deals with nuclear 
security matters, every inspection report, every piece of data 
that supports the performance indicators and every assessment 
of reactor licensee performance by the NRC is made available on 
the NRC's public Web site.
    Beyond openness and transparency, the other principle that 
underlies the ROP is objectivity. Risk-informed performance-
based approaches are used to ensure that meaningful thresholds 
of performance are established while maintaining a constant 
focus on safety. It is the nuclear industry's view that the ROP 
has been a successful program. Since the ROP was initiated, the 
safety performance of U.S. nuclear powerplants has improved by 
every objective indicator of safety performance, while the 
average capacity factor for the fleet has remained at 
approximately 90 percent and overall production costs have 
decreased.
    The 2006 GAO report noted three areas for improvement. The 
industry agrees with the GAO finding that improvements can be 
made to performance indicators. Since the GAO report, such 
improvements have already been incorporated into the ROP and 
other enhancements are currently being pursued.
    Consistent with the GAO comments on timeliness, a main 
concern the industry has with the significance determination 
process, or the SDP, in the reactor safety area is with the 
evaluation of findings at the very low to moderate levels or 
around a 1 in 1 million increase in probability threshold. 
Routinely, both licensees and the NRC spend inordinate 
resources assessing these findings. As noted by the GAO report, 
the NRC has worked on this issue without achieving the same 
progress as has been achieved in our minds in the area of 
performance indicators. We hope that at the next oversight 
hearing, we will be able to report that the issue has been 
successfully addressed.
    The industry believes improvements to the SDP can also be 
made in the emergency preparedness and public radiation safety 
cornerstones of the ROP. The SDP for these cornerstones do not 
rely on the results of probabalistic risk assessments. Rather, 
the SDPs for each cornerstone is rule-based, meaning that the 
process assesses compliance against existing standards to 
determine the safety significance of the inspection findings.
    As a result, the SDP for these areas can result in 
determinations inconsistent with the actual safety significance 
of the finding. These determinations can inadvertently 
overstate the safety, or incorrectly overstate the safety 
significance of a finding and inadvertently mislead the public. 
We intend to work with the NRC and other stakeholders to 
improve the SDP in these cornerstones.
    Turning now to the GAO recommendation related to safety 
culture, as a result of the Davis-Besse reactor vessel head 
corrosion event, the industry has initiated, through the 
Institute of Nuclear Power Operations, a major effort to 
address the issue of safety culture on our side. This effort 
has included development of a clear set of behaviors expected 
of a strong safety culture, which are codified in a principles 
document prepared by INPO. All of the plants conduct critical 
self-assessments against the expectations. INPO has 
incorporated safety culture as an explicit area for assessment 
in its biannual evaluations at every plant site, and the 
importance of safety culture is reinforced at workshops and 
training sessions on a regular basis.
    In addition, as you heard earlier, the NRC has explicitly 
incorporated safety culture assessments as part of its review 
of cross-cutting findings in the ROP process. Because of the 
potential subjectivity associated with assessing safety culture 
based on inspection findings, the industry continues to review 
the process and its outcomes. While the NRC safety culture 
process is still in its early implementation stage, it appears 
to be functioning consistently across NRC regions. It appears 
to have significant NRC management oversight and attention and 
it appears to be consistent, responsible implementation at this 
point.
    The industry fully agrees with the NRC's conclusion that 
the current ROP inspection procedure and review standards 
provide essentially full coverage of key aspects of the Maine 
Yankee ISA and greater attention to safety culture and 
potentially risk-significant problems. In addition to the 
extensive NRC inspection and oversight process, each plant has 
processes for identifying potential safety and quality issues, 
determining root causes and assuring accountability through a 
corrective action program. Also, all plants receive evaluations 
by INPO at least every 2 years. The extensive industry programs 
and the new and robust ROP provide significant assessment, 
transparency and, we believe, timely oversight of NRC 
licensees.
    Turning briefly to new plants, both the NRC and the 
industry have been working diligently to put in place the 
regulatory requirements and associated industry guidance 
documents for licensing them. With a projected 40 percent 
increase in electricity demand by 2030, clear need for new 
baseload generation with concerns about climate change, new 
nuclear plants in the United States are essential to meet our 
electricity needs and our environmental goals.
    Currently there are 17 companies planning on submitting 22 
COLs for 31 potential new plants. The industry is committed to 
standardization within each reactor family and to the submittal 
of high quality license applications. Companies are 
accomplishing these objectives through the use of design 
centered working groups preparing standardized sections for 
each license application.
    We expect that between 65 to 75 percent of the license 
application can be standardized, with the remainder including 
site-specific information. The industry would expect 
significant reductions in the NRC resources required for 
subsequent reviews beyond a reference submittal, resulting in 
decreased licensing fees and significant decreased review 
schedules.
    In this regard, following the completion of the reference 
plant submittal, the industry expects that the NRC review 
schedule should be able to be reduced form 42 months to 27 
months. We look forward to updating thes subcommittee on the 
progress we are making toward new plant deployment to satisfy 
our Nation's energy demand and environmental goals.
    I appreciate the opportunity to present this and look 
forward to your questions. Thank you.
    [The prepared statement of Mr. Fertel follows:]
Statement of Marvin S. Fertel, Senior Vice President and Chief Nuclear 
                   Officer, Nuclear Energy Institute
    The Nuclear Energy Institute (NEI) is the organization responsible 
for establishing unified nuclear industry policy on matters affecting 
the nuclear energy industry, including the regulatory aspects of 
generic operational and technical issues. NEI's members include all 
utilities licensed to operate commercial nuclear powerplants in the 
United States, nuclear plants designers, major architect/engineering 
firms, fuel fabrication facilities, materials licensees, and other 
organizations and individuals involved in the nuclear energy industry.
    NEI, on behalf of the nuclear energy industry, appreciates the 
opportunity to provide this testimony for the record in support of 
congressional oversight of the Nuclear Regulatory Commission.
    This testimony will focus on:
     the effectiveness of the NRC's Reactor Oversight Process 
(ROP) and a few areas where the agency can improve this process
     our agreement with the NRC that the ROP is superior to the 
one-time experience of conducting an Independent Safety Assessment 
(ISA)
     the current status of NRC readiness for review of new-
plant license applications and industry activities and expectations 
related to those applications.
                    industry perspective on the rop
    The NRC's Reactor Oversight Process (ROP) began in April 2000 and 
replaced the NRC's Systematic Assessment of Licensee Performance (SALP) 
program. The NRC developed the ROP with substantial input from the 
agency's stakeholders, including the nuclear industry and public 
interest groups. The development effort took over 2 years and resulted 
in a comprehensive, structured program with recognition that 
improvements would be made based on implementation experience and 
stakeholder feedback.
    Today, the ROP has matured but is still evolving due to the culture 
of continuous improvement in the program that has existed at the agency 
since the ROP's creation. The industry has maintained a ROP Working 
Group that meets publicly with the NRC on a monthly basis. This effort 
includes continual review of every aspect of the ROP, including 
guidance for reporting data to support the performance indicator 
program, review of methodologies used to support the significance 
determination process, and comment on inspection procedures that 
comprise the baseline and supplemental inspection program. The NRC also 
seeks public comment annually on the ROP and uses this feedback to make 
improvements to the process.
    This continuous dialogue on the implementation of the ROP has 
resulted in an effective tool for the NRC to oversee its reactor 
licensees. At the heart of this effectiveness is communication at every 
level among licensees, the NRC and the public. The ROP is the most open 
and transparent regulatory process of any regulated industry. With the 
exception of safeguards information that deals with nuclear security 
matters, every inspection report, every piece of data that supports the 
performance indicators, and every assessment of reactor licensee 
performance by the NRC is made available on the NRC's public Web site.
    Beyond openness and transparency, the other principle that 
underlies the ROP is objectivity. Risk-informed, performance-based 
approaches are used to ensure that meaningful thresholds of performance 
are established while maintaining a constant focus on safety. These 
thresholds direct a graded approach to the allocation of inspection 
resources, with every plant site receiving baseline inspection of over 
2000 hours by NRC personnel each year, and supplemental inspection if 
licensee performance falls below established thresholds.
    In its 2006 report, the GAO concluded that the ``NRC's oversight 
process is finding safety problems and is getting the industry to 
constantly improve.''
    It is the nuclear industry's view that the ROP has been a 
successful program as well as a significant improvement over the 
previous SALP program. Since the ROP was initiated, the safety 
performance of U.S. nuclear powerplants has improved by every objective 
indicator of safety performance, while the average capacity factor for 
the fleet has remained at approximately 90 percent and overall 
production costs have decreased. This has been a ``win-win-win'' for 
safety, productivity and efficiency.
                         areas for improvement
    The industry has worked with the NRC to institute a number of 
improvements to the ROP since its inception. These include significant 
enhancements to some of the performance indicators as well as the 
incorporation of the safety culture initiative into the inspection 
process.
    The 2006 GAO report also noted three areas for improvement: the 
first two related to ``. . .  the timeliness of the process used to 
determine the risk significance of inspection findings and the ability 
of performance indicators to contribute to the early identification of 
poorly performing plants.'' The third area identified by GAO related to 
the assessment of safety culture as part of the ROP.
    The industry agrees with the GAO finding that improvements can be 
made to performance indicators, and since the GAO report such 
improvements have already been incorporated into the ROP, (e.g., 
mitigating system performance indicator) and other enhancements are 
currently being assessed by the NRC and external stakeholders. More 
progress is needed to improve the significance determination process 
(SDP), the process used to determine the risk significance of 
inspection findings. The SDP evaluates inspections findings for their 
safety significance and assigns a corresponding color: green for a 
finding of very low significance, white for low to moderate 
significance, yellow for substantial significance, and red for high 
safety significance.
    In the reactor safety area of the ROP, quantitative analysis using 
probabilistic risk assessment tools is used to assign safety 
significance to an inspection finding. In numerical terms, the green/
white threshold is a one-in-one-million increase in the probability of 
a core damage event from a particular finding, the white/yellow 
threshold is a factor of ten higher at one-in-one-hundred-thousand 
increase, and the yellow/red threshold at one-in-ten-thousand increase 
in the probability of a core damage event.
    Consistent with the GAO comment on timeliness, the main concern the 
industry has with the SDP in the reactor safety area is with the 
evaluation of findings at the very low to moderate levels, or around 
the green/white threshold (one-in-one million increase in probability). 
This level is so low that it is within the uncertainty bands of the 
probabilistic risk assessment tools used by licensees and the NRC. 
Routinely, both licensees and the NRC spend inordinate resources on 
these de minimus risk evaluations because the outcome of the evaluation 
can change the NRC's oversight of a licensee within the ROP as well as 
the perception of the licensee's performance to other stakeholders. As 
noted by the GAO report, the NRC has worked on this issue without 
achieving the same progress as has been achieved in the area of 
performance indicators. We hope that at the next oversight hearing we 
will be able to report that the issue has been successfully addressed.
    Before addressing the GAO concern about safety culture, another 
area where industry believes improvements to the SDP can be made are in 
the emergency preparedness and public radiation safety cornerstones of 
the ROP. The SDP for these cornerstones do not rely on the results of 
probabilistic risk assessment. Rather, the SDP for each cornerstone is 
rule-based, meaning that the process assesses compliance against 
existing standards to determine the safety significance of the 
inspection finding. The industry's concern is that the SDP for these 
areas can result in determinations inconsistent with the actual safety 
significance of the finding. These determinations can incorrectly 
overstate the safety significance of a finding and inadvertently 
mislead the public.
    Two examples illustrate this concern. The first is in the radiation 
protection area. The industry agrees with the NRC and other 
stakeholders that it is unacceptable to have inadvertent spills or 
releases of tritium from our plants, and we have taken affirmative 
actions across the entire industry to assure appropriate monitoring for 
such situations and the prompt reporting of them if they occur. While 
these actions are both necessary and appropriate to ensure credibility 
and maintain public confidence, rarely do such events constitute an 
actual increase in risk to the public.
    Using the SDP for the public radiation protection area, the NRC 
issued a white finding to a licensee for failure to assess an 
inadvertent release when it occurred. Subsequent assessment 
demonstrated that this release was of very low significance. Thus, the 
white finding incorrectly communicated to the public the safety 
significance of this release. While it may be appropriate for NRC to 
take some form of regulatory action for this type of occurrence, 
labeling this finding as having low to moderate safety significance in 
ROP space is misleading. We intend to work with the NRC and other 
stakeholders to improve the SDP in this cornerstone.
    The second example deals with the emergency planning area. In this 
case, during a drill, the licensee must classify an event within 15 
minutes with the information available at the time. The licensee, per 
procedures and training, conservatively classified the event for the 
scenario being exercised. The NRC issued a finding for the subsequent 
licensee critique of the drill, stating that a less conservative 
classification was more appropriate for this scenario, and that the 
licensee's critique should have identified this shortcoming. Using the 
SDP as the emergency planning cornerstone of the ROP, the NRC concluded 
this was a white finding. Again, the industry believes that a white 
finding in this case incorrectly communicated to the public the safety 
significance of a finding related to a ``critique'' following a drill.
    In summary, to maintain the credibility of the ROP with all 
stakeholders, the SDP must be objective, risk-informed, and accurately 
communicate the significance of inspection findings to the public, and 
we hope to report progress in this area to this Committee at your next 
oversight hearing.
    With regard to the GAO recommendations related to safety culture, 
as a result of the Davis-Besse reactor vessel head corrosion event, the 
industry has initiated through the Institute of Nuclear Power 
Operations (INPO) a major effort to address the issue of safety 
culture.
    This effort has included the development of a clear set of 
behaviors expected of a strong safety culture which are codified in a 
principles document prepared by INPO. All of the plants have conducted 
critical self-assessments against the expectations.
    INPO has incorporated safety culture as an explicit area for 
assessment in its biannual evaluations at every plant site and the 
importance of safety culture is reinforced at workshops and training 
sessions on a regular basis. In addition, the NRC has explicitly 
incorporated safety culture assessments as part of its review of cross-
cutting findings in the ROP process. Because of the potential 
subjectivity associated with assessing safety culture based upon 
inspection findings, the industry continues to review the process and 
its outcomes.
    While the NRC safety culture process is still in its early 
implementation stage, it appears to be functioning consistently across 
NRC regions. It appears to have significant NRC management oversight to 
ensure consistent and responsible implementation. The GAO recommended 
that NRC consider looking at specific performance indicators to 
identify safety culture issues. We have not found any specific 
performance indicator that provides such insights.
               the rop and independent safety assessments
    We note that two senators have introduced legislation calling for 
independent safety assessments (ISA) of nuclear powerplants. We also 
note that the NRC has on its Web page a comprehensive comparative 
review of the ROP against the ISA that was conducted at Maine Yankee in 
1996. The industry fully agrees with the NRC's conclusion that the 
current ROP inspection procedures and NRC review standards provide 
essentially full coverage of key aspects of the Maine Yankee ISA, and 
greater attention to safety culture and potentially risk-significant 
problems.
    A great deal of mythology has been created around the Maine Yankee 
ISA and the owners' decision to decommission the plant. The ISA was not 
the cause of this decision as few significant issues were uncovered, 
and the cost to address those issues was in the tens of millions of 
dollars. There were many other factors that contributed to the decision 
including the need for steam generator replacement (hundreds of 
millions of dollars), the uncertainty regarding license renewal (no 
plant had yet received a renewed license at that time) and the lack of 
strong public support for the continued operation of the plant (several 
public referendums in Maine in the 1990s on continued operation 
narrowly passed). All of these items contributed more to the decision 
to shut the plant down than the ISA.
    In addition to the extensive NRC inspection and oversight 
processes, each plant has processes for identifying potential safety or 
quality issues, determining root-causes and ensuring accountability 
through corrective action programs. Also, all plants receive 
evaluations by INPO at least every 2 years. INPO was formed in 1980 by 
the nuclear industry to promote excellence in all aspects of nuclear 
safety in plant operations. INPO evaluations utilize peers from other 
operating companies as well as INPO subject matter experts. These 
evaluations are discussed with the senior management personnel of each 
operating company and each company holds each other accountable for 
performance through the INPO process. The extensive industry programs 
and the new and robust ROP provide significant assessment, transparency 
and timely oversight of NRC licensees.
                        new nuclear powerplants
    Both the NRC and the industry have been working diligently to put 
in place the regulatory requirements and associated industry guidance 
documents for licensing new plants. With a projected 40 percent 
increase in electricity demand by 2030, a clear need for new baseload 
generation and with concerns about climate change, new nuclear plants 
in the United States are essential to meet our electricity needs and 
environmental goals. In this regard, just last week the first full 
combined operating license (COL) was filed with the NRC. Currently, 
there are 17 companies planning on submitting 22 COLs for 31 potential 
new nuclear plants.
    The final NRC rule (10 CFR Part 52) on new nuclear plant licensing 
was issued last month and more than 250 regulatory guides and standard 
review plans have been issued for public comment. The NRC has also 
established a New Reactor Organization (NRO) and has placed experienced 
management personnel in this group and has been aggressively hiring 
staff to support the new organization. Also, NRC has installed a new 
project controls system for managing activities related to new plant 
licensing. All of these actions by NRC should contribute positively to 
the review of the license applications they receive.
    The GAO has just completed a review of the NRC's preparedness to 
receive and review new plant license applications and in general is 
complimentary of the NRC's actions.
    The industry is committed to standardization within each reactor 
family and to the submittal of high-quality license applications. 
Companies are accomplishing these objectives through the use of design-
centered working groups preparing standardized sections for each 
license application. We expect that between 65-75 percent of a license 
application can be standardized, with the remainder including site 
specific information. Given the degree of standardization, the industry 
would expect significant reductions in NRC resources required for 
subsequent reviews, beyond the reference submittal, resulting in 
decreased licensing fees, and significantly decreased review schedules. 
In this regard, following the completion of the reference plant 
submittals, the industry expects that the NRC review schedule should be 
able to be reduced from 42 months to 27 months. The industry recognizes 
that for the first wave of submittals, if filed almost concurrently, 
the schedule savings would be less. We are committed to working with 
the NRC on achieving the maximum efficiencies possible, without 
decreasing either the quality of the review, or its transparency. We 
look forward to updating the subcommittee on the progress we are making 
towards new plant deployment to satisfy our nation's energy demand and 
environmental goals.
    Finally, we note that this subcommittee's oversight of the NRC has 
led to several changes at the agency, including the advent of the ROP 
itself and incorporation of the safety culture initiative into the ROP. 
Public confidence is a key factor in the resurgence of nuclear power as 
a means to address this country's energy and environmental goals. The 
NRC's role as a strong, credible and independent federal regulator is a 
fundamental component of this public confidence. The industry urges the 
subcommittee to exercise its oversight responsibility rigorously to 
ensure the agency is effective in carrying out its mission, and, when 
required, to pass authorizing legislation necessary for that to occur.
    NEI appreciates the opportunity to address the subcommittee.
                                 ______
                                 
 Responses by Marvin Fertel to Additional Questions from Senator Boxer
    Question 1. In your written testimony you indicated that more work 
is needed to improve the process that the NRC uses to determine the 
significance or risk of each inspection finding. Approximately ninety-
seven percent of inspection findings between 2001 and 2005 were labeled 
green (very low significance), and less than one percent were yellow 
(substantial significance) or red (high significance). Given that only 
one percent of the findings were labeled as being of substantial or 
high significance, what problem could the industry have with the NRC's 
labeling of inspection findings?
    Response. The three guiding objectives used to develop the revised 
Reactor Oversight Process are as applicable today as they were in 1999.
     Risk-inform the processes so that NRC and licensee 
resources are focused on those aspects of performance having the 
greatest impact on safe plant operation.
     Improve the objectivity of the oversight processes so that 
subjective decisions and judgment [are] not central process features.
     Improve the scrutability of these processes so that NRC 
actions have a clear tie to licensee performance.
    We have no problem when the labeling, be it green, white, yellow or 
red, is appropriate for the facts. Any mislabeling of a finding 
undermines these ROP objectives. As noted in my testimony, there are 
areas of the ROP (e.g., significance determinations) where a large 
amount of subjectivity remains. This results in both licensees and NRC 
spending inordinate resources on de minimus risk evaluations. The 
outcomes of these evaluations are important as they impact the NRC's 
oversight of a licensee within the ROP as well as the perception of the 
licensee's performance by other stakeholders. While full elimination of 
subjective judgment is probably impossible to achieve, it remains an 
important objective and is a crucial part of the guiding objective to 
clearly tie NRC actions to licensee performance.

    Question 2. Performance indicators (PIs) were 99.4 percent green in 
Fiscal Year 2006, despite problems which required additional oversight 
at 30 plants that year. Given the disparity between PIs ratings and the 
need for additional oversight, how can the industry believe that PIs 
provide an accurate reflection of plant performance? Would PIs be more 
accurate if reporting them was mandatory?
    Response. The value of 30 cited in the question is incorrect. 
During Fiscal Year 2006 (October 2005 through September 2006) there 
were 17 plants that received additional oversight due to non-green 
performance indicators.
    Each of the 103 plants operating in Fiscal Year 2006 reported the 
status of 19 performance indicators on a quarterly basis. Any non-green 
performance indicator for a plant results in additional oversight 
activity. This occurs even though 18 of the 19 performance indicators 
are green (i.e., 95 percent green).
    While reporting of performance indicators is a voluntary industry 
action, the NRC inspects each plant's performance indicator data on an 
annual basis to determine its accuracy and completeness.

    Question 3. In your written testimony you state that inadvertent 
spills or releases of tritium from nuclear plants rarely pose a public 
safety concern. How can you determine that tritium releases are rarely 
a public hazard if the information on these releases is not required to 
be reported? At what level would you consider a tritium release to be 
hazardous? Should all releases of tritium at nuclear powerplants be 
made public?
    Response. NRC regulations require each nuclear powerplant operator 
to submit to NRC an annual report detailing the amount of radioactive 
material released to the environment during the past year. This report 
estimates the public health impact of the releases. Nuclear powerplant 
operators also monitor the environment in the vicinity of their plants, 
per regulation, to assess the cumulative impact of the radioactive 
material that has been released. The results of the environmental 
monitoring program are submitted to the NRC on an annual basis. Both of 
these reports for all commercial nuclear powerplants are available to 
the public via the NRC Web site.
    The U.S. EPA has established a maximum contaminant level for 
Tritium of 20,000 pCi/L. This standard is conservatively set based on 
EPAs public discussions related to the standard.
    Additionally NEI has established the Groundwater Protection 
Initiative during 2006 and supplemented the initiative with a Final 
Guidance Document issued on August 31, 2007. The initiative is not a 
regulatory required program but is binding on the utility members of 
the Nuclear Energy Institute which includes all power reactor 
licensees. Leaks and spills that exceed 100 gallons that reach soil and 
have detectable radioactivity are to be disclosed to State and local 
government as well as disclosure to the NRC. Monitoring results 
supporting the Groundwater Protection Initiative are to be included in 
the Annual Radiological Environmental Operating Report or the Annual 
Radioactive Effluent Release Report.

    Question 4. Your written testimony called on the Subcommittee on 
Clean Air and Nuclear Safety to conduct active oversight of the NRC in 
an effort to maintain and improve public confidence in the NRC. Are 
there any specific areas in which you believe the Subcommittee should 
conduct additional oversight?
    Response. The Reactor Oversight Process is not, nor should it be, a 
static process. It is important that NRC, industry and other 
stakeholders continue their efforts to improve the overall 
effectiveness, predictability, consistency, transparency and 
objectivity of the ROP. These efforts should continue to be focused on 
areas where needed improvements are identified and to ensure that the 
ROP continues to adhere to the principles upon which it was founded. 
The subcommittee's efforts to promote these improvement efforts both in 
the past and continuing in the future are appreciated.
                                 ______
                                 
 Responses by Marvin Fertel to Additional Questions from Senator Inhofe
    Question 1. In his testimony, Mr. Lochbaum refers to 51 outages 
that lasted longer than 1 year. How many of those outages have occurred 
since the ROP was put in place?
    Response. There has been only one extended outage since 
implementation of the revised ROP in 2000. An extended outage at the 
Davis-Besse plant began in February 2002.

    Question 2. Over 99 percent of the Reactor Oversight Process 
Performance Indicators are green. Do the performance indicators serve 
the purpose of identifying declining plant performance?
    Response. The Reactor Oversight Process performance indicators 
continue to serve as important indicators of plant performance. The 
industry has continued a noted trend of improved performance in the 
years prior to and since ROP inception. The high percentage of green 
performance indicators reflects this industry-wide performance trend. 
The effectiveness of performance indicators as a means to identify 
decreases in performance by individual plants is independent of the 
overall performance of the industry. More so than the previous 
oversight process (NRC's Systematic Assessment of Licensee 
Performance), the ROP does provide close to real time transparency on 
individual plant performance, and as evident by the few examples of 
declining plant performance, it does serve as a good input to NRC 
decision-making.

    Question 3. In your testimony, you indicate that the review 
schedule for new plant licenses could be decreased from 42 months to 27 
months, because of standardized applications. What is the basis for 
this estimate?
    Response. This reduction in schedule is predicated on the design 
centered approach to both the development and review of combined 
license (COL) applications. The NRC has just started the reviews of the 
first COL applications and is in the process of preparing detailed 
review schedules. The NTC has planned on a schedule of 30 months for 
its review and 12 months for a hearing, yielding a 42 month schedule. 
However, we also expect that for the next COL referencing the same 
certified design, the NRC review schedule should decrease since up to 
75 percent of that COL will be identical to the first. Only site 
specific differences in the design, along with the environmental review 
for the particular site, will be different. In these cases, we believe 
the NRC review schedule should be about 15 months rather than 30 
months, which if coupled with a 12 month hearing schedule yields 27 
months. If the applications are not standardized to the extent 
practical as described above, we do not expect to see decreases in the 
schedule review time.

    Senator Carper. Mr. Fertel, thank you. Right on the money, 
5 minutes.
    Mr. Gaffigan, welcome. We are delighted that you are here.

STATEMENT OF MARK GAFFIGAN, ACTING DIRECTOR, NATURAL RESOURCES 
     AND ENVIRONMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Gaffigan. Thank you, Mr. Chairman, and good afternoon.
    I am pleased to be here to discuss NRC's reactor oversight 
process, or the ROP. Through the ROP, NRC oversees the 
operation of the Nation's 104 commercial nuclear power reactors 
to ensure their safe operation. The safety of these reactors is 
important, not only to public health and the environment, but 
to maintaining public confidence in nuclear power, the source 
of about 20 percent of the Nation's electricity.
    In September 2006, GAO issued a report on the ROP that 
reviewed three issues: No. 1, how does NRC implement the ROP? 
No. 2, what have been the results of the ROP? and No. 3, what 
efforts has NRC undertaken to improve the ROP? My opening 
remarks address these three issues.
    First, in implementing the ROP, NRC uses a variety of tools 
and takes a risk-informed and graded approach to ensuring 
safety. What does this mean? This means that the level of 
oversight is designed to be commensurate with the performance 
of the plant and the safety significance of plant equipment and 
operations. Key ROP tools include physical inspections of plant 
equipment and operations, as well as performance indicators 
such as the reliability of alert and notification systems.
    NRC's graded approach involves using these tools to 
determine the appropriate levels of oversight. For example, 
when inspections identify a problem, NRC assesses the finding's 
safety significance and assigns it one of four colors to 
represent increasing levels of risk, from green, that equates 
to very low risk, to white, yellow and red, to reflect 
increasing levels of risk. All plants are subject to a baseline 
level of inspection. But plants with greater than green 
findings face increasing levels of supplemental inspections.
    Second, regarding the results of the ROP, between 2001 and 
June of this year, the ROP has identified more than 5,200 
inspection findings. The vast majority of these findings, about 
98 percent, were designated green, very low risk, to safe 
facility operations but important to correct. Of the remaining 
findings, 113 were white, reflecting low to moderate risk, and 
13 findings were of the highest levels of risk significance, 8 
yellow and 5 red.
    Based on these inspection findings and other tools, NRC has 
conducted oversight beyond baseline inspections at more than 75 
percent of reactor units. While most reactors received the 
lowest level of increased oversight, five operating reactors 
received NRC's highest level of oversight at some time between 
2001 and 2005. This would be the column four that was referred 
to earlier.
    Currently, 1 reactor is receiving NRC's highest level of 
oversight, and 10 reactors at 6 facilities are receiving the 
second highest level of oversight.
    Finally, regarding ROP improvement efforts, NRC has made 
improvements to its oversight process. But more refinements are 
needed. Key improvements include reducing the time it takes to 
determine the significance of inspection findings. Further 
refinements that we recommended included that NRC increase its 
efforts to assess safety culture, the organizational 
characteristics that ensure that safety issues receive proper 
attention.
    We also recommended that NRC develop performance indicators 
to measure aspects of safety culture. NRC has taken some 
actions to implement these recommendations and plans to 
consider further refinements. We believe NRC needs to continue 
to give this issue attention so it could continue to improve 
the ROP.
    In summary, while we last reported on NRC's reactor 
oversight process in 2006, I am hopeful that any current or 
future review would find that NRC has improved its oversight. I 
am also confident that any such review would identify further 
room for improvement. This is because effective nuclear reactor 
oversight is an ongoing and dynamic process that calls for 
constant vigilance and continuous improvement. This is 
especially true as our nuclear infrastructure continues to age 
and more is learned with our experience.
    In the future, NRC will face added demands in meeting its 
oversight mission as it begins to oversee the licensing, 
construction and operation of 31 new reactor units currently 
planned. GAO has just issued a September 2007 report to you on 
the challenges NRC faces in its new reactor activities.
    I have submitted a written statement to you on both NRC's 
reactor oversight process and its new reactor activities. This 
concludes my opening remarks and I welcome any questions you 
might have. Thank you.
    [The prepared statement of Mr. Gaffigan follows:]
   Statement of Mark Gaffigan, Acting Director Natural Resources and 
           Environment, U.S. Government Accountablity Office
    Mr. Chairman and Members of the Subcommittee:
    I am pleased to be here today to discuss the adequacy of the 
Nuclear Regulatory Commission's (NRC) Reactor Oversight Process (ROP) 
to ensure public health and safety. Through the ROP, NRC oversees the 
operation of the nation's 104 commercial nuclear power reactors, which 
provide about 20 percent of the nation's electricity. The safety of 
these reactors, which are located at 65 facilities in 31 states, has 
always been important because an accident could result in the release 
of radioactive material with potentially serious adverse effects on 
public health and the environment. NRC is responsible for inspecting 
operating nuclear power facilities, while facility operators are 
responsible for safely operating their facilities. NRC has the 
authority to take actions, up to and including shutting down a reactor, 
if conditions are not being met and the reactor poses an undue risk to 
public health and safety.
    NRC is also responsible for licensing the construction and 
operation of new reactors. Since 1989, NRC has worked to develop a 
regulatory framework and review process for licensing new reactors that 
allow an electric power company to obtain a construction permit and an 
operating license through a single combined license (COL) based on one 
of a number of standard reactor designs. The COL is NRC's response to 
the nuclear industry's concerns about the length and complexity of 
NRC's former two-step process of issuing a construction permit followed 
by an operating license. NRC has been working to complete this process 
because electric power companies have announced plans to submit 20 
applications in the next 18 months for licenses to build and operate 31 
new reactor units--nearly three decades after the last order was placed 
for a new civilian nuclear power reactor unit in the United States.
    As requested, my remarks today will focus on our September 2006 
report, which examined how NRC implements the ROP to oversee reactor 
operations safety, the results of the ROP over the past several years, 
and the status of NRC's efforts to improve the ROP from 2001 through 
2005.\1\ In addition, on September 21, 2007, we issued a report to you 
on the steps NRC has taken to prepare its workforce and manage its 
workload for new reactor licensing and to develop its regulatory 
framework and key review processes for new reactor activities.\2\
---------------------------------------------------------------------------
    \1\ GAO, Nuclear Regulatory Commission: Oversight of Nuclear 
Powerplant Safety Has Improved, but Refinements Are Needed, GAO-06-1029 
(Washington, D.C.: Sept. 27, 2006).
    \2\ GAO, Nuclear Energy: NRC's Workforce and Processes for New 
Reactor Licensing Are Generally in Place, but Uncertainties Remain as 
Industry Begins to Submit Applications, GAO-07-1129 (Washington, D.C.: 
Sept. 21, 2007).
---------------------------------------------------------------------------
    To examine NRC's oversight of operating reactors through the ROP, 
we assessed NRC's policies and guidance documents, examined inspection 
manuals and findings reports, and reviewed the level of oversight it 
provided as a result of its findings. We analyzed NRC data on nuclear 
reactor safety for 2001 through 2005, including an assessment of their 
reliability, which we determined were sufficiently reliable for the 
purposes of our report. We also analyzed NRC's annual self-assessment 
reports and relevant inspection documents, reviewed external 
evaluations of the ROP, and interviewed several NRC managers and 
external stakeholders. Physical security, which is also covered by the 
ROP, was not included in this review. In addition, to examine NRC's 
readiness to evaluate new reactor license applications, we reviewed NRC 
documents for new reactor workforce staffing and training, examined 
NRC's regulations and guidance, and interviewed managers in NRC's 
Office of New Reactors and several other offices with responsibilities 
related to new reactor efforts. Furthermore, we interviewed nearly all 
of the announced applicants to obtain their views on the efficiency and 
usefulness of NRC's application review process and observed several of 
NRC's public meetings on the new reactor licensing process. Our ROP 
work was conducted from July 2005 through July 2006, and our new 
reactor licensing work from January 2007 through September 2007, in 
accordance with generally accepted government auditing standards.
                               background
    NRC's Office of Nuclear Reactor Regulation provides overall 
direction for the oversight process and the Office of Enforcement is 
responsible for ensuring that appropriate enforcement actions are taken 
when performance issues are identified. NRC's regional offices are 
responsible for implementing the ROP, along with the inspectors who 
work directly at each of the nuclear power facilities. NRC relies on 
on-site resident inspectors to assess conditions and the licensees' 
quality assurance programs, such as those required for maintenance and 
problem identification and resolution. With its current resources, NRC 
can inspect only a relatively small sample of the numerous activities 
going on during complex operations. NRC noted that nuclear power 
facilities' improved operating experience over more than 25 years 
allows it to focus its inspections more on safety significant 
activities.
    One key ROP goal is to make safety performance assessments more 
objective, predictable, and understandable. The unexpected discovery, 
in March 2002, of extensive corrosion and a pineapple-size hole in the 
reactor vessel head--a vital barrier preventing a radioactive release--
at the Davis-Besse nuclear power facility in Ohio led NRC to re-examine 
its safety oversight and other regulatory processes to determine how 
such corrosion could be missed.\3\ Based on the lessons learned from 
that event, NRC made several changes to the ROP. NRC continues to 
annually assess the ROP by obtaining feedback from the industry and 
other stakeholders such as public interest groups, and incorporates 
this feedback and other information into specific performance metrics 
to assess its effectiveness.
---------------------------------------------------------------------------
    \3\ GAO, Nuclear Regulation: NRC Needs to More Aggressively and 
Comprehensively Resolve Issues Related to the Davis-Besse Nuclear 
Powerplant's Shutdown, GAO-04-415 (Washington, D.C.: May 17, 2004).
---------------------------------------------------------------------------
    In anticipation of licensing new reactors, NRC has accelerated its 
efforts to build up its new reactor workforce. NRC's workforce has 
grown from about 3,100 employees in 2004 to about 3,500 employees as of 
August 2007, and NRC projects that its total workforce size needs will 
grow to about 4,000 employees by 2010.
    NRC estimates that the first few COL applications will require 
about 100,000 hours of staff review and identified around 2,500 
associated review activities related to each application's detailed 
safety, environmental, operational, security, and financial 
information, which may total several thousand pages. NRC anticipates 
that for each application, the review process will take 42 months--
including 30 months for its staff review, followed by approximately 12 
months for a public hearing.\4\ In addition to the COL, NRC has 
established (1) the design certification, which standardizes the design 
of a given reactor for all power companies using it, with modifications 
limited to site-specific needs, and (2) an early site permit, which 
allows a potential applicant to resolve many preliminary siting issues 
before filing a COL application.\5\ Electric power companies plan to 
use five different reactor designs in their COL applications.
---------------------------------------------------------------------------
    \4\ While the evidentiary hearing occurs after NRC staff complete 
their review of an application, such prehearing activities as decisions 
on standing, contention admissibility, and procedural motions begin 
when the application is docketed.
    \5\ NRC also plans to issue new regulations providing limited work 
authorizations that would address the construction activities companies 
can conduct with NRC authorization and oversight. Such activities as 
site clearing, excavation, road building, transmission line routing, 
and erecting construction-related support buildings or service 
facilities do not require NRC authorization.
---------------------------------------------------------------------------
nrc uses various tools and takes a risk-informed and graded approach to 
            ensuring the safety of nuclear power facilities
    In implementing its ROP, NRC oversees the safe operation of nuclear 
power facilities through physical inspections of the various complex 
plant equipment and operations, reviews of reactor operator records, 
and quantitative measures or indicators of each reactor's performance. 
(See table 1 for a more expansive treatment of these tools.) These 
tools are risk-informed in that they focus on the aspects of operations 
considered most important to safety. NRC bases its oversight process on 
the principle and requirement that licensees have programs in place to 
routinely identify and address performance issues without NRC's direct 
involvement. Thus, an important aspect of NRC's inspection process is 
ensuring the effectiveness of licensee programs designed to identify 
and correct problems. On the basis of the number and risk significance 
of inspection findings and performance indicators, NRC places each 
reactor unit into one of five performance categories on its action 
matrix, which corresponds to graded, or increasing, levels of 
oversight. NRC assesses overall facility performance and communicates 
the results to licensees and the public on a semiannual basis.


          Table 1: The ROP's Multiple Tools and Graded Approach
------------------------------------------------------------------------
                 ROP Tool                            Description
------------------------------------------------------------------------
Baseline inspections......................  NRC collects information
                                             about reactor units'
                                             performance from baseline
                                             inspections by NRC
                                             inspectors and quantitative
                                             measures reported by the
                                             licensees. These physical
                                             inspections are the main
                                             tool NRC uses to oversee
                                             safety performance of
                                             facilities. NRC defined
                                             specific inspection areas
                                             by developing a list of
                                             those elements most
                                             critical to meeting the
                                             overall agency mission of
                                             ensuring safety at nuclear
                                             power facilities.
Significance determination process........  When NRC inspectors identify
                                             a finding they consider to
                                             be more than minor,1 they
                                             use a significance
                                             determination process to
                                             assign one of four colors--
                                             green, white, yellow, or
                                             red--to reflect the
                                             finding's risk
                                             significance, which is set
                                             on the basis of measures
                                             that reflect the potential
                                             health effects that could
                                             occur from radiological
                                             exposure. The significance
                                             determination process
                                             assesses how an identified
                                             inspection finding
                                             increases the risk that a
                                             nuclear accident could
                                             occur, or how the finding
                                             affects the ability of the
                                             facility's safety systems
                                             or personnel to prevent
                                             such an accident. For some
                                             findings, this process is
                                             more deterministic in
                                             nature rather than being
                                             tied to risk, such as for
                                             emergency preparedness or
                                             radiation protection. In
                                             these areas, NRC defines a
                                             response appropriate for
                                             the given performance
                                             problem.
Supplemental inspections..................  When NRC issues one or more
                                             greater-than-green
                                             inspection findings for a
                                             reactor unit or facility,
                                             it conducts supplemental
                                             inspections.2 There are
                                             three levels of
                                             supplemental inspections
                                             performed by regional
                                             inspectors that expand the
                                             scope beyond baseline
                                             inspection procedures and
                                             focus on diagnosing the
                                             cause of the performance
                                             deficiency:
                                                 the lowest
                                             level assesses the
                                             licensee's corrective
                                             actions to ensure they were
                                             sufficient in both
                                             correcting the problem and
                                             identifying and addressing
                                             the root and contributing
                                             causes to prevent
                                             recurrence.
                                                 the second
                                             level has an increased
                                             scope that includes
                                             independently assessing the
                                             extent of the condition for
                                             both the specific and any
                                             broader performance
                                             problems.
                                                 the highest
                                             level is yet more
                                             comprehensive and includes
                                             determining whether the
                                             reactor unit or facility
                                             can continue to operate and
                                             whether additional
                                             regulatory actions are
                                             needed. This level is
                                             usually conducted by a
                                             multidisciplinary team of
                                             NRC inspectors and may take
                                             place over several months.
Cross-cutting aspects or issues...........  As part of its inspection
                                             process, NRC evaluates all
                                             of its findings to
                                             determine if certain
                                             elements of reactor
                                             facility performance,
                                             referred to as cross-
                                             cutting aspects, were a
                                             contributing cause to the
                                             performance problem. There
                                             are three cross-cutting
                                             aspect areas: (1) problem
                                             identification and
                                             resolution, (2) human
                                             performance, and (3) a
                                             safety-conscious work
                                             environment. If more than
                                             three findings have similar
                                             causes within the same
                                             cross-cutting area and if
                                             NRC is concerned about the
                                             licensee's progress in
                                             addressing these issues, it
                                             determines that the
                                             licensee has a
                                             ``substantive'' cross-
                                             cutting issue. NRC notifies
                                             the licensee that it has
                                             opened a substantive cross-
                                             cutting issue, and it may
                                             ask the licensee to respond
                                             with the corrective actions
                                             it plans to take.
Special inspections.......................  NRC conducts special
                                             inspections of reactors
                                             when specific events occur
                                             that are of particular
                                             interest to NRC because of
                                             their potential safety
                                             significance or potential
                                             generic safety concerns
                                             important to all reactor
                                             units or facilities.
                                             Special inspections
                                             determine the cause of the
                                             event and assess the
                                             licensee's response to the
                                             event. For special
                                             inspections, a team of
                                             experts is often formed and
                                             an inspection charter
                                             issued that describes the
                                             scope of the inspection
                                             efforts.
Performance indicators....................  In addition to its various
                                             inspections, NRC also
                                             collects information
                                             through its performance
                                             indicator program, which it
                                             maintains in cooperation
                                             with the nuclear power
                                             industry. On a quarterly
                                             basis, each facility
                                             voluntarily self-reports
                                             data for 16 separate
                                             performance indicators--
                                             quantitative measures of
                                             performance related to
                                             safety in the different
                                             aspects of operations.3 NRC
                                             inspectors review and
                                             verify the data submitted
                                             for each performance
                                             indicator annually through
                                             their baseline inspections.
                                             Similar to its process for
                                             conducting supplemental
                                             inspections, when colors
                                             indicating the risk level
                                             are assigned and when
                                             greater-than-green
                                             indicators are identified,
                                             NRC conducts supplemental
                                             inspections in response. A
                                             green performance indicator
                                             reflects performance within
                                             the acceptable range,
                                             unlike inspection findings
                                             for which green indicates a
                                             performance deficiency.
Action matrix.............................  NRC uses its action matrix
                                             to categorize reactor unit
                                             or facility performance and
                                             apply increased oversight
                                             in a graded fashion. On a
                                             quarterly basis, NRC places
                                             each nuclear power reactor
                                             unit into one of five
                                             performance categories on
                                             its action matrix, which
                                             corresponds to graded, or
                                             increasing, levels of
                                             oversight. The action
                                             matrix is NRC's formal
                                             method of determining how
                                             much additional oversight--
                                             mostly in the form of
                                             supplemental inspections
                                             and NRC senior management
                                             attention--is required on
                                             the basis of the number and
                                             risk significance of
                                             inspection findings and
                                             performance indicators.
Assessment letters and public meetings....  At the end of each 6-month
                                             period, NRC issues an
                                             assessment letter to each
                                             nuclear power facility.
                                             This letter describes what
                                             level of oversight the
                                             facility will receive
                                             according to its placement
                                             in the action matrix
                                             performance categories,
                                             what actions NRC is
                                             expecting the licensee to
                                             take as a result of the
                                             performance issues
                                             identified, the inspection
                                             schedule for the next 15
                                             months, and any documented
                                             substantive cross-cutting
                                             issues. NRC also holds an
                                             annual public meeting at or
                                             near each facility's site
                                             to review performance and
                                             address questions about the
                                             facility's performance from
                                             members of the public and
                                             other interested
                                             stakeholders.
Industry trends...........................  Annually, NRC assesses the
                                             results of its oversight
                                             process on an industry-
                                             level basis by analyzing
                                             the overall results of its
                                             inspection and performance
                                             indicator programs and
                                             comparing them with other
                                             industry-collected and
                                             reported performance data.
------------------------------------------------------------------------
Source: GAO analysis of NRC documents.
Note: NRC conducts an annual self-assessment of the ROP, which includes
  soliciting input from internal and external stakeholders on its
  effectives.
1NRC defines ``minor issues'' as those that have little actual safety
  consequences, little or no potential to impact safety, little impact
  on the regulatory process, and no willfulness.
2Supplemental inspections are also conducted for greater-than-green
  performance indicators.
3There also are three physical security performance indicators that were
  outside the scope of this review.

 the rop has identified numerous problems at nuclear power facilities, 
    but few have been considered significant to their safe operation
    From 2001 through 2005, the ROP identified performance deficiencies 
through more than 4,000 inspection findings at nuclear power 
facilities. Ninety-seven percent of these findings were designated 
green--very low risk to safe facility operations, but important to 
correct. Two percent (86) were white findings that were considered to 
be of low to moderate risk significance. Twelve findings were of the 
highest levels of risk significance--7 yellow and 5 red. More recently, 
from January 2006 through June 2007, NRC identified an additional 1,174 
green findings, 27 white findings, 1 yellow finding, and no red 
findings.
    NRC also reviews performance indicators data--used to monitor 
different aspects of operational safety--that facility operators report 
to categorize the level of reactor unit performance for each indicator. 
From 2001 through June 2007, NRC reported that less than 1 percent of 
over 39,000 indicator reports exceeded acceptable performance 
thresholds and nearly half of all reactor units have never had a 
performance indicator fall outside of the acceptable level. Through 
June 2007, 3 of the 16 performance indicators have always been reported 
to be within acceptable performance levels--measuring the amount of 
time that the residual heat removal safety system is unavailable, 
monitoring the integrity of a radiation barrier, and monitoring 
radiological releases. Since 2001, three reactor units have reported a 
yellow indicator for one performance indicator. No red indicators have 
ever been reported.
    For varying periods from 2001 through 2005, on the combined basis 
of inspection findings and performance indicators, NRC has subjected 
more than 75 percent of the reactor units to oversight beyond the 
baseline inspections. While most reactors received the lowest level of 
increased oversight through a supplemental inspection, five reactors 
were subjected to NRC's highest level of oversight. Reactor units in 
this category were generally subjected to this higher oversight for 
long periods due to the more systemic nature of their performance 
problems. Currently, 1 unit is receiving the highest level of oversight 
by NRC, and 10 units at 6 facilities are receiving the second level of 
oversight.
    NRC inspectors at the facilities we reviewed indicated that when a 
reactor unit's performance declines it is often the result of 
deficiencies or ineffectiveness in one or more of the three cross-
cutting areas--problem identification and resolution, human 
performance, and a safety-conscious work environment. NRC inspectors 
cited examples of possible cross-cutting issues: (1) a facility does 
not have an effective corrective action program that appropriately 
identified and resolved problems early; (2) a facility employee has not 
followed correct maintenance procedures, and NRC made a finding 
associated with the human performance area; and (3) facility management 
is complacent by not paying attention to detail or adhering to 
procedures. Our examination of ROP data found that all reactor units 
that NRC subjected to its highest level of oversight had findings 
related to one or more of these substantive cross-cutting issues. In 
addition, recent NRC inspections have found more problems associated 
with these cross-cutting issues, in part because of new guidance for 
identifying and documenting them.
       nrc continues to make improvements to its rop in key areas
    Our 2006 report found that NRC has generally taken a proactive 
approach to continuously improving its oversight process, in response 
to recommendations that grew out of the Davis-Besse incident; 
independent reviews; and feedback that is usually obtained during NRC's 
annual self-assessment of its oversight process from stakeholders, 
including its regional and on-site inspectors. Continued efforts will 
be needed to address other shortcomings or opportunities for 
improvement, however, particularly in improving its ability to identify 
and address early indications of declining safety performance at 
nuclear power facilities. For the most part, NRC considers these 
efforts to be refinements to its oversight process, rather than 
significant changes.
    Specific areas that NRC is addressing include the following:
      To better focus efforts on the areas most important to 
safety, NRC has formalized its process for periodically revising its 
inspection procedures. In particular, NRC completed substantive changes 
to its inspection and assessment program documents--including those 
currently guiding the highest level of NRC inspections--to more fully 
incorporate safety culture.
      To address concerns about the amount of time, level of 
effort, and knowledge and resources required to determine the risk 
significance of some inspection findings, NRC has modified its 
significance determination process, which, according to NRC's 2006 
self-assessment, has significantly improved timeliness.
      To address concerns that performance indicators did not 
facilitate the early identification of poor performance, NRC has 
modified several indicators to make them more risk-informed for 
identifying the risks associated with changes in the availability and 
reliability of important safety systems. In addition, NRC revised an 
indicator to more accurately reflect the frequency of events that upset 
reactor unit stability and challenge critical safety functions. NRC is 
considering options for revising indicators for emergency preparedness 
and reactor cooling systems. Both NRC's 2006 self-assessment and 
internal staff survey cited the need to further improve the performance 
indicators and their associated guidance.
      Although NRC and others have long recognized the effects 
of a facility's safety culture on performance, NRC did not undertake 
efforts to better incorporate safety culture into the ROP until 2005, 
when it formed a working group to lead the agency's efforts. To date, 
the group has completed guidance for identifying, addressing, and 
evaluating cross-cutting issues specific to safety culture.
    Our 2006 report concluded that NRC's efforts to incorporate safety 
culture into the ROP may be its most critical future change to the ROP 
and recommended that NRC aggressively monitor; evaluate; and, if 
needed, implement additional measures to increase the effectiveness of 
its initial safety culture changes. We also recommended that NRC 
consider developing specific indicators to measure important aspects of 
safety culture through its performance indicator program. While NRC has 
largely implemented initial safety culture enhancements to the ROP that 
primarily address cross-cutting issues, it does not plan to take any 
additional actions to further implement either recommendation before it 
completes its assessment of an 18-month implementation phase at the end 
of this year. This assessment will include lessons learned that NRC 
managers have compiled since July 2006, including insights from 
internal and external stakeholders about the effectiveness of ROP 
enhancements.
    In addition, we recommended that NRC, in line with its desire to 
make the ROP an open process, make available additional information on 
the safety culture at nuclear power facilities to the public and its 
other stakeholders to provide a more comprehensive picture of 
performance. NRC has implemented this recommendation by modifying its 
ROP Web site to fully explain the review process regarding cross-
cutting issues and safety culture, and now provides data and 
correspondence on the reactor units or facilities that have substantive 
open cross-cutting issues.
   nrc has implemented many actions to prepare its workforce for new 
  reactor licensing reviews and manage its workload, but several key 
                      elements are still under way
    NRC has prepared its workforce for new reactor licensing reviews by 
increasing funding for new reactor activities, reorganizing several 
offices, creating and partly staffing the Office of New Reactors (NRO), 
and hiring a significant number of entry-level and midlevel 
professionals. As of August 2007, NRC had assigned about 350 staff to 
NRO, about 10 percent of the total NRC workforce; however, some 
critical positions are vacant, and the office plans to grow to about 
500 employees in 2008. To assist its staff in reviewing the safety and 
environmental portions of the applications, NRC plans to contract out 
about $60 million in fiscal year 2008 through support agreements with 
several Department of Energy national laboratories and contracts with 
commercial companies. NRC also has rolled out several new training 
courses, but it is still developing content for in-depth training on 
reactor designs.
    NRC is using a project management approach to better schedule, 
manage, and coordinate COL application and design certification 
reviews. While NRC has made progress, several elements of NRC's 
activities to prepare its workforce are still under way, as the 
following illustrates:
      NRC has developed plans for allocating resources for a 
design certification application and an early site permit it is 
currently reviewing, 20 COL applications, 2 additional design 
certification applications, and a design certification amendment 
application. However, NRC has not yet developed specific criteria to 
set priorities for reviewing these applications if it needs to decide 
which applications take precedence. Without criteria, NRC managers are 
likely to find it more difficult to decide how to allocate resources 
across several high-priority areas. Accordingly, we recommended that 
NRC fully develop and implement criteria for setting priorities to 
allocate resources across applications by January 2008, which NRC has 
agreed to do.
      NRC is developing computer-based project management and 
reviewer tools to assist staff in scheduling and reviewing multiple 
applications at the same time. For example, Safety Evaluation Report 
templates are designed to assist COL reviewers by providing 
standardized content that will enable them to leverage work completed 
during the design certification review process. However, the 
implementation of this and other tools has been delayed. We recommended 
that NRC provide the resources for implementing reviewer and management 
tools needed to ensure that the most important tools will be available 
as soon as is practicable, but no later than March 2008, which NRC has 
agreed to do.
      NRO established a cross-divisional resource management 
board early in 2007 for resolving resource allocation issues if major 
review milestones are at risk of not being met. However, it has not 
clearly defined the board's role, if any, in setting priorities or 
directing resource allocation. Because NRO expects to review at least 
20 COL applications and 6 design certification, early site permit, and 
limited work authorization applications associated with its new reactor 
program over the next 18 months, it may not be able to efficiently 
manage thousands of activities simultaneously that are associated with 
these reviews. NRC managers we spoke with recognize this problem and 
plan to address it. We recommended that NRC clarify the 
responsibilities of NRO's Resource Management Board in facilitating the 
coordination and communication of resource allocation decisions, which 
NRC has agreed to do.
  nrc has significantly revised its overall regulatory framework and 
      review process, but several activities are still in progress
    NRC has significantly revised most of its primary regulatory 
framework and review process to prepare for licensing new reactors. 
Specifically, NRC has revised and augmented its rules, guidance, and 
oversight criteria for licensing and constructing new reactors 
primarily to provide for early resolution of issues, standardization, 
and predictability in the licensing process. In making these changes, 
NRC has regularly interacted with nuclear industry stakeholders to 
determine which parts of an application's technical and operational 
content could be standardized and to clarify guidance on certain 
technical matters. In addition, NRC just completed modifications to its 
acceptance review process to include an evaluation of the application's 
technical sufficiency as well as its completeness and made internal 
acceptance review guidance available last week. While NRC has made 
progress in these areas, it has not yet completed some ancillary rules 
and regulatory guidance, or actions to implement certain review process 
components. For example, because NRC only recently solicited public 
comments to further update its environmental guidance, applicants may 
have more difficulty developing specific COL content for unresolved 
issues. In addition, while NRC proposed a rule to update physical 
protection requirements in September 2006, officials told us that it 
will not be made final until 2008. Furthermore, NRC's limited work 
authorization rule, while substantially complete, will not be available 
in final form before October 2007. Lastly, NRC is revising its policy 
for conducting hearings on both the contested and uncontested portions 
of applications.
    In addition, NRC is refining its processes to track its requests 
for additional information to each applicant. In some instances, 
applicants using the same reference reactor design may be asked the 
same question, and one applicant may have already provided a 
satisfactory answer. With a completed tracking process, the second 
reviewer could access the previously submitted information to avoid 
duplication. We recommended that NRC enhance the process for requesting 
additional information by (1) providing more specific guidance to staff 
on the development and resolution of requests for additional 
information within and across design centers and (2) explaining 
forthcoming workflow and electronic process revisions to COL applicants 
in a timely manner. NRC has agreed to do so.
    In conclusion, the safe operation of the nation's nuclear power 
facilities has always been of fundamental importance and has received 
even more emphasis recently as the nation faces an expected resurgence 
in the licensing and construction of new nuclear reactors to help meet 
our growing electricity needs. Our assessment of the ROP has found that 
NRC has made considerable effort to continuously improve its oversight 
activities and to prompt industry to make constant management 
improvements. However, while the current oversight process appears 
logical and well-structured, NRC recognizes the need to make further 
improvements in such areas as the timeliness of its significant 
determination process and the redefinition of some performance 
indicators. Regulating the often complex and intangible aspects of 
safety culture is clearly challenging. While NRC had taken some 
concrete actions to incorporate safety culture into the ROP and now has 
a structured process in place through its inspection program, we 
recommended that NRC continue to act to improve its safety culture 
efforts. NRC plans to evaluate the effectiveness of its current actions 
at the end of this year before considering any further implementation 
of our recommendations. We continue to believe that NRC needs to give 
this issue attention in further revising the ROP so that it can better 
identify and address early indications of declining safety performance 
at nuclear power facilities.
    NRC has made important strides in revising its regulatory framework 
and review process for licensing new nuclear reactors to improve 
timeliness and provide more predictability and consistency during 
reviews. Nevertheless, NRC's workforce will face a daunting task in 
completing certain regulatory actions currently under way and 
implementing this new process as it faces a surge in applications over 
the next 18 months--the first of which has just been submitted. We 
identified four actions that NRC could take to better ensure its 
workforce is prepared to review new reactor applications and that its 
review processes more efficiently and effectively facilitate reviews, 
and NRC agreed to implement them.
    Mr. Chairman, this completes my prepared statement. I would be 
happy to respond to any questions you or the other Members of the 
Subcommittee may have at this time.
                                 ______
                                 
                    GAO Highlights, October 3, 2007
                         why gao did this study
    The Nuclear Regulatory Commission (NRC) is responsible for 
overseeing the nation's 104 commercial nuclear power reactors to ensure 
they are operated safely. Since 2000, NRC has used a formal Reactor 
Oversight Process (ROP) to oversee safety. NRC is also responsible for 
licensing the construction and operation of new reactors. Electric 
power companies have announced plans to submit 20 applications in the 
next 18 months.
    This testimony is based on GAO reports that reviewed (1) how NRC 
implements the ROP, (2) the results of the ROP over several years, (3) 
the status of NRC's efforts to improve the ROP, (4) NRC's efforts to 
prepare its workforce and manage its workload for new reactor 
licensing, and (5) NRC's efforts to develop its regulatory framework 
and review processes for new reactor activities. In conducting this 
work, GAO analyzed programwide information and interviewed cognizant 
NRC managers and industry representatives.
                          what gao recommends
    GAO made recommendations to NRC to improve the effectiveness of (1) 
the ROP in identifying declining safety performance at nuclear power 
facilities before significant safety problems develop and (2) NRC's 
workforce and processes in facilitating the review of new reactor 
license applications. NRC generally agreed with the recommendations.
                             nuclear energy
NRC Has Made Progress in Implementing Its Reactor Oversight and 
        Licensing Processes but Continues to Face Challenges
            What GAO Found
    In implementing its ROP, NRC uses various tools and takes a risk-
informed and graded approach to ensure the safety of nuclear power 
facilities. The ROP primarily relies on physical inspections of 
equipment and operations and quantitative measures or indicators of 
performance at each facility to assess the status of safety and 
determine appropriate levels of oversight.
    Since 2001, NRC has made more than 4,000 inspection findings that 
reactor unit operators had not fully complied with safety procedures. 
Almost all of these findings were for actions NRC considered important 
to correct but of low significance to safe operations. As a result of 
NRC inspections, more than 75 percent of the nation's reactor units 
received some level of increased oversight while five units were 
subjected to NRC's highest level of oversight for long periods because 
their performance problems were more systemic.
    In 2006, GAO reported that NRC has generally taken a proactive 
approach to improving its ROP. However, concerted efforts will be 
needed to address shortcomings, particularly in identifying and 
addressing early indications of declining reactor safety performance. 
For example, NRC is implementing several enhancements to the ROP to 
better assess a facility's safety culture--organizational 
characteristics that ensure safety issues receive the attention their 
significance warrants. GAO made recommendations to further improve this 
effort, and NRC has taken initial steps to implement them.
    NRC has taken important steps to prepare its workforce for new 
licensing reviews, but several key activities are still underway and 
uncertainties remain about its management of the expected surge of 
applications. For example, NRC has increased funding, hired hundreds of 
new employees, and created and partly staffed a new office. However, 
NRC has not completed its development of some computer-based tools for 
enhancing the consistency and coordination of application reviews and 
has not fully developed criteria for setting priorities if the workload 
exceeds available resources. Also, while NRC's Office of New Reactors 
established a resource management board for coordinating certain office 
review activities, it has not clearly defined the extent of the board's 
responsibilities. NRC agreed with recommendations GAO made to further 
improve its workload management.
    NRC has revised most of its primary regulatory framework and review 
processes, including its rules, guidance, and oversight criteria to 
provide for early resolution of issues, standardization, and enhanced 
predictability. However, NRC has not yet completed some associated 
rules, guidance, and review process components, including revisions to 
its environmental guidance, its hearing process, and its process for 
requesting additional information from applicants. Without these 
components, expected efficiencies and predictability may be limited 
regarding the total time an applicant needs to obtain a license. NRC 
agreed with a recommendation GAO made to further improve its 
application review process.
                                 ______
                                 
 Responses by Mark Gaffigan to Additional Questions from Senator Boxer
    Question 1. In your 2006 report on NRC's oversight of nuclear power 
safety, you cited instances of unmonitored releases of tritium into 
groundwater at nuclear plants as an area in which the NRC was 
conducting further assessments and may develop additional inspection 
procedures. Can you comment on what steps the NRC has taken to improve 
oversight in this area and prevent the release of tritium?
    Response. At the same time our reactor oversight process (ROP) 
report was issued in September 2006,\1\ NRC's Liquid Radioactive 
Release Lessons Learned Task Force issued a report that made 26 
recommendations applicable to NRC and nuclear power facility operators. 
The task force was formed because radioactive liquid--typically water 
contaminated with tritium or other radioactive materials--had been 
released to the environment in an unplanned and unmonitored fashion on 
or near at least 15 nuclear facilities, primarily from 1996 to 2006. 
Based on the data available to NRC, the task force did not identify any 
instances where the health of the public had been adversely affected. 
However, the task force found that the potential exists for unplanned 
and unmonitored releases of radioactive liquids to migrate offsite into 
the public domain undetected under NRC's regulatory requirements. 
Because of this possibility, the task force recommended that NRC 
enhance both its regulations and regulatory guidance to address 
unplanned, unmonitored releases; conduct additional reviews in the 
areas of decommissioning funding and license renewal; and improve 
public communications. In September 2007, the NRC Commissioners 
approved revisions to the ROP regarding the significance determination 
process for the effluent release program that would (1) include spills 
or leaks, (2) make clarifying changes to the text and logic diagram for 
the significance determination process, and (3) reflect the 
significance of monitoring to public radiation safety in the 
radioactive environmental monitoring program branch. The NRC 
Commissioners also directed that NRC's public Web page include a 
summary of the actions being taken to close out the task force 
recommendations and regular updates on the status of any tritium 
groundwater contamination incidents. As of late October 2007, NRC's Web 
page did not yet provide the implementation status of the 26 
recommendations.
---------------------------------------------------------------------------
    \1\ See GAO, Nuclear Regulatory Commission: Oversight of Nuclear 
Powerplant Safety Has Improved, but Refinements Are Needed, GAO-06-1029 
(Washington, D.C.: Sept. 27, 2006).
---------------------------------------------------------------------------
    Our September 2006 report noted that the nuclear power industry had 
undertaken a Ground Water Protection Initiative to identify actions to 
improve nuclear power facilities' management and response to instances 
of inadvertent releases that fall outside current NRC requirements and 
are below NRC's limits for routine, planned, monitored, and documented 
releases. In August 2007, the industry issued final guidance for ground 
water protection that describes the initiative's purpose, prescribes 
necessary elements and actions for a timely and effective protection 
program, and identifies communication and oversight steps for the 
licensee to conduct.

    Question 2. Your written testimony notes that there are several 
rules and additional regulatory guidance related to new reactor license 
applications that have not yet been completed by the NRC. For example, 
you stated that the NRC only recently solicited public comment on 
updated environmental guidance for new applications. How concerned are 
you that rules and regulations that are not yet finalized will impact 
the application process? Can the NRC make a decision on new license 
applications without finalizing the pending rules and regulations?
    Response. Our September 2007 report found that while NRC had made 
progress in completing several major actions to revise its regulatory 
framework and processes for licensing new reactors, it had not yet 
completed several rules, guidance documents, and processes related to 
new reactor licensing.\2\ Furthermore, we stated that uncertainty about 
these remaining components may limit expected efficiencies and 
predictability of the regulatory process because they were not 
complete. Our concern about the implementation of the review process 
primarily stems from the sheer volume of the workload that NRC's staff 
and contractors face in reviewing so many applications simultaneously, 
the newness of the new reactor licensing process, and the first 
implementation of many new rules and guidance. This may be especially 
problematic in that NRC plans to use contractors to perform at least 
one-third of the review.
---------------------------------------------------------------------------
    \2\ See GAO, Nuclear Energy: NRC's Workforce and Processes for New 
Reactor Licensing Are Generally in Place, but Uncertainties Remain as 
Industry Begins to Submit Applications, GAO-07-1129 (Washington, D.C.: 
Sept. 21, 2007).
---------------------------------------------------------------------------
    Since our report was issued, NRC has made progress in completing 
some of these components:
     On September 26, 2007, NRC published its revised 
acceptance review guidance.
     On October 3, 2007, NRC's Notice of Proposed Rulemaking on 
assessment requirements of aircraft impacts for new reactor designs was 
published in the Federal Register. NRC's target is to complete the rule 
by September 2008.
     On October 9, 2007, NRC's final rule on Limited Work 
Authorization was published in the Federal Register. This regulation 
will become effective on November 8, 2007. NRC expects to complete its 
limited work authorization guidance by January 2008.
    However, NRC has delayed issuance of its final Part 73 security 
rulemaking--completion is now set for September 2008--in part because 
of the volume of comments received. NRC is currently assessing how this 
delay might affect the review of applications and is using existing 
forums to discuss and clarify necessary application content to 
applicants, including those areas where the existing and proposed 
regulation differ. NRC currently expects these rules to be completed in 
advance of when licensing decisions would be made. Should they 
experience further delays, NRC plans to license the new reactors to 
existing regulations and would subsequently issue orders with new 
requirements, as is the process with regulations affecting the 104 
operating reactors.
    Regarding NRC's environmental review framework, our September 2007 
report noted that NRC made the draft Environmental Standard Review Plan 
(ESRP), which provides guidance for NRC staff, publicly available 
earlier this year. In response to some industry stakeholders, NRC 
extended the comment period for the draft guidance to October 14, 2007, 
and NRC is currently reviewing the comments. NRC has directed 
applicants to use the draft Environmental Standard Review Plan's 
content in application development, rather than NRC's environmental 
regulatory guide, which it plans to update in 2008 because, for 
example, it does not address environmental justice or severe accidents. 
NRC has also directed applicants to review license renewal guidance 
related to specific technical areas.
    NRC has dedicated considerable effort to putting its regulatory 
framework and review process for licensing new reactors in place. 
However, some important elements of its framework--associated with 
completing guidance, resolving certain technical issues, and 
implementing the review process--will not be completed for at least 
several more months. Accordingly, we are concerned that the regulatory 
framework needs to be completed to enable NRC staff reviewers to 
efficiently and effectively perform their reviews and to improve the 
review process's predictability and transparency for applicants and 
third party stakeholders.

    Question 3. Your latest report notes that the NRC has made progress 
in preparing for new reactor licensing, but that there is still work to 
be done. With all the focus on the NRC streamlining the license 
application process and ensuring timely review, is GAO concerned that 
the NRC could be pressured into cutting corners to speed the review 
process?
    Response. It is too early to tell whether NRC's efforts to 
streamline the license application review process might result in 
corners being cut in the staff's review in such areas as safety and 
environmental protection. In general, we found that NRC intends for its 
revised process to be predictable, consistent, and effective. Perhaps 
most notably, the NRC commissioners did not accept some 2007 internal 
task force recommendations that encouraged adopting shorter review time 
estimates for each application than appeared feasible in light of its 
resource and workload estimations of what it will take to conduct 
reviews properly. In addition, NRC managers told us that the overall 
combined license review time estimates would be adjusted in NRC's 
schedule to reflect each application's sufficiency and completeness and 
whether it referenced, for example, a certified design or an early site 
permit.

    Question 4. The written testimony of David Lochbaum of the Union of 
Concerned Scientists states that the NRC has made efforts to improve 
safety culture at reactor sites, but that the culture at the NRC itself 
also needs to be improved. Mr. Lochbaum says that senior managers at 
the NRC need to be replaced with new blood. Does the GAO agree with Mr. 
Lochbaum? Has the GAO encountered any problems with the safety culture 
at the NRC or problems with its senior management during any of your 
reviews?
    Response. While our September 2006 report made two recommendations 
for improving NRC's ability to identify declining safety performance at 
nuclear power facilities before significant safety problems develop, we 
did not identify any concerns with either NRC's safety culture or its 
senior management during this review or our subsequent reviews of NRC's 
human capital \3\ or new reactor licensing. Specifically, our September 
2006 report found the ROP appears logical and well-structured, NRC 
modified the ROP to add safety culture considerations in response to 
the Davis-Besse incident, and NRC recognizes the need to make further 
improvements. In addition, we would note that NRC has benefited from 
the continuity and experience of senior NRC managers as it has 
reorganized to create a new office to review new reactor license 
applications. We would also note that many senior managers are, or will 
soon be, eligible to retire.
---------------------------------------------------------------------------
    \3\ GAO, Human Capital: Retirements and Anticipated New Reactor 
Applications Will Challenge NRC's Workforce, GAO-07-105 (Washington, 
D.C.: Jan. 17, 2007).
---------------------------------------------------------------------------
    We agree with Mr. Lochbaum that NRC needs to encourage new 
approaches and open-mindedness. Furthermore, we continue to believe 
that NRC needs to give the issue of safety culture attention so that it 
can better identify and address early indications of declining safety 
performance at nuclear power facilities.
                                 ______
                                 
Response by Mark Gaffigan to an Additional Question from Senator Inhofe
    Question. The GAO's two recent reports, one on the ROP and one on 
the NRC's readiness to receive new plant applications, included 
recommendations for improvement. Do you believe the NRC is acting 
responsibly to implement those recommendations?
    Response. NRC generally agreed with the recommendations in both of 
our reports and has initiated steps to implement them. We believe NRC 
has acted responsibly to this point. However, it is too early to tell 
whether NRC's actions will adequately address our concerns and 
effectively implement our recommendations.

    Senator Carper. Thank you, Mr. Gaffigan.
    Thank you for your testimony. Tom Loller, a member of my 
staff, just handed me a note which says, ``Mr. Gaffigan and his 
team at GAO have been invaluable to this subcommittee and their 
work is greatly appreciated.''
    Mr. Gaffigan. Thank you. I appreciate that.
    Senator Carper. Praise like this from guys like that rarely 
comes.
    [Laughter.]
    Mr. Gaffigan. Hopefully, Tom got the check.
    [Laughter.]
    Senator Carper. In the interest of full disclosure, I think 
that is probably against our new ethics laws.
    Mr. Gaffigan. So much for independence.
    Senator Carper. There you go.
    Let me start off with a question for you, Mr. Gaffigan. 
Then we will turn to Senator Sanders and back to Senator 
Voinovich. No, I have to go to Senator Voinovich, then Senator 
Sanders.
    First of all, Mr. Gaffigan, in your testimony you say that 
concerted efforts by the Nuclear Regulatory Commission will be 
needed to address shortcomings in the reactor oversight 
program, particularly in identifying and addressing early 
indications of declining reactor safety performance. Can you 
just, I know you have touched on this already, but can you just 
go back and discuss these shortcomings a bit more and provide 
any recommendations on how the NRC could address them?
    Mr. Gaffigan. Sure. We primarily focused in our report on 
this issue of safety culture. It kept coming up and up again. 
In fact, in our report, as early as 1989, the discussion of 
safety culture was out there with NRC. We felt it was very 
important that in terms of developing some early indications of 
performance problems, that this issue of safety culture needed 
to be addressed.
    Also that the performance indicators themselves, as was 
mentioned by one of the commissioners, tended to be lagging 
indicators. So the combination of those two things, a focus on 
the safety culture and some aspects of trying to develop 
performance indicators of this, is what we recommended.
    Senator Carper. All right. Mr. Lochbaum sort of gave an NRC 
report card, and a passing grade in a couple of areas and 
failing grades in a couple of areas. Just mention again just 
real briefly, Mr. Lochbaum, the areas where you felt that NRC 
earned failing grades. Then I am going to ask our other two 
witnesses just to comment briefly as well.
    Mr. Lochbaum. We felt that the NRC didn't earn a passing 
grade in the areas of consistently enforcing the regulations 
they develop. They just don't do a good job there. The second 
area is in instilling confidence in the regulated, the 
licensees, the Government and the public, that they are an 
effective regulator and these plants are being operated safely. 
Those are the two areas we felt they fell down.
    Senator Carper. OK,thank you.
    Mr. Gaffigan and then Mr. Fertel, if you would, your 
comments.
    Mr. Gaffigan. Sure. I would just add that NRC is doing a 
lot of great things. In the survey, they are the number one 
place to work, according to their employees. But they cannot be 
complacent. They mentioned the problem with Palo Verde was 
complacency. NRC's job is never going to be done. They are 
never going to be able to say, we are done, we have declared 
victory. They need to be constantly vigilant. If they do that, 
I think they will have great success.
    Senator Carper. All right. Mr. Fertel?
    Mr. Fertel. I certainly agree----
    Senator Carper. Go back to the two specific points of Mr. 
Lochbaum, if you will.
    Mr. Fertel. I certainly agree on neither NRC and certainly 
nobody in the industry should ever be complacent. So I would 
start with that.
    I think going to what David said on failing grades and on 
enforcement, I think you have to look at results. If you look 
at results, since the ROP has been put in place, which is 2000, 
we have only had one plant in any extended shutdown, and that 
was Davis-Besse, unfortunately, in Senator Voinovich's State, 
not 51, but just one.
    If you look at results during that period, on almost every 
indication from safety performance that the World Association 
of Nuclear Operators looks at, there have been steady 
improvements. From production, which is not a safety indicator, 
but it is a performance indicator, you have seen continued 
improvements.
    So you are seeing the plants operating better, because the 
process is forcing people to look at things correctly, both 
from a safety standpoint and a reliability standpoint. So I 
think you look at that. Now, that doesn't mean that NRC 
shouldn't enforce certain things. David gave an example of 
Indian Point and the sirens. I am appalled that they have not 
been able to do what they should have done there, with the 
legislation that came out of this particular committee. On the 
other hand, they have a siren system that works. They got a 
$130,000 fine for missing the date they should have met. They 
should be punished for missing the date they should have met.
    There was no threat to health and safety when they missed 
that date. They missed a regulatory order. They didn't satisfy 
the law that was passed there. But the public was still 
protected around that site.
    So the appropriate enforcement may have been a $130,000 
fine and NRC all over them, as opposed to a $22 million 
cumulative fine when there was no real threat to safety at that 
point. So I am not condoning the behavior, I am saying you need 
to look at it correctly.
    Senator Carper. All right, thanks. One last quick question, 
then I am going to yield to Senator Voinovich.
    Again, Mr. Gaffigan, NRC bases its oversight process on the 
principle that licensees have programs in place to routinely 
identify and to address performance issues without the NRC's 
direct involvement. Given your concern over NRC's inability to 
identify early indications of declining plant performance, do 
you believe that NRC is overly reliant on the licensees to 
identify performance issues?
    Mr. Gaffigan. As it relates to the performance indicators, 
that is a self-reported, voluntary system. So I think to some 
extent, NRC is trying. For example, in the aspects of 
developing a performance indicator for a safety culture, they 
are really struggling with that they will have to work with 
industry to develop the performance indicator.
    But I think NRC in and of itself has a lot of folks who 
work on these issues and as a baseline have to start with the 
industry and what the industry has. But I wouldn't characterize 
them as overly reliant.
    Senator Carper. My time has expired. Just very briefly, Mr. 
Fertel.
    Mr. Fertel. Just very briefly, you have 32 white findings 
right now in ROP. Twenty-two of the thirty-two are a brand-new 
performance indicator that was put in place about a year ago, 
which is driving the white findings. It is a performance 
indicator that the industry advocated, because we think it is a 
much better indicator of performance at the sites from a safety 
standpoint.
    There is no silver bullet on performance indicators for 
safety, culture or other things. But performance indicators 
serve a very important purpose in changing behavior at the 
plants, as well as providing insights to NRC.
    Senator Carper. Thank you.
    Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    I would like to follow up, Marvin, you were here during the 
hearing. It is this whole issue of the safety culture that is 
out there. It appears that the same controversy still lingers. 
I would like your comment and the comment of Mr. Gaffigan and 
Mr. Lochbaum about that issue. Because I don't see why someone 
would object, they are probably worried about, they want the 
commission micromanaging the operations. But in terms of some 
objective standard as to courses that people are taking and 
that kind of thing. What is the problem?
    Mr. Fertel. Senator, I was here for the hearing where this 
came up last time. On the industry side, and think both you and 
Senator Carper can brief somewhat on that. We have gone that 
far. We have a principles document that came out from INPO. We 
do self-assessments against that principles document. The 
expectations are very high at the plants that people are 
behaving consistent with the principles document. INPO 
evaluates safety culture in every evaluation that they do at 
the sites.
    From an industry standpoint, I am sensitive to having a 
regulator trying to get into management. Safety culture is even 
softer than management in some places. That doesn't mean that 
they shouldn't continue to look at how they are implementing 
their cross-cutting program, which has the potential, I think, 
to do what you are looking for once it matures a bit. It is 
truly kind of in its infancy, in its first year or so of 
implementation.
    So I think you may want to give them the opportunity to 
come back in maybe a year and tell you where they think they 
are on that.
    Senator Voinovich. Mr. Chairman, I would like to get it in 
writing about what they are doing.
    Does NEI have anybody from your organization that goes out 
and visits with these people and kind of tries to identify 
where something may not be the way it is supposed to be, 
understanding that if you have something like Davis-Besse or 
some of these other things that they really do great harm to 
the entire industry?
    Mr. Fertel. INPO does that 100 percent of the time for the 
industry. I think if I looked at what NEI and INPO do for it, 
we probably spend, and it is less going out to the plants, but 
it is dealing on issues that we know will have high visibility 
for this industry. Security, for instance, we reacted very 
firmly and initially to the Peach Bottom situation.
    So we do in certain areas, but INPO does it day in and day 
out. Safety culture was taken very seriously. Because the 
failure at Davis-Besse was not only a failure of the management 
there and the NRC, it was a failure of our INPO process, too, 
to have found that. So it was taken very seriously, and there 
have been significant changes on our side.
    Senator Voinovich. Mr. Lochbaum?
    Mr. Lochbaum. I would agree with what Marvin said. The NRC, 
I attended several meetings between the NRC and the industry 
about safety culture, where the NRC doesn't legislate how many 
hours of training somebody receives, but they try to bring 
together the best practices amongst the industry, and also the 
IAEA. So it is not just NRC and INPO, it is worldwide, what are 
the best practices people do to address this.
    Where the rubber hits the road, if you look at how the NRC 
has dealt with the problems of Palo Verde, the NRC has done an 
excellent job of taking an issue and pulling the string to see 
how broad it extended, which is not what they did a good job of 
at Davis-Besse prior to 2002. So I think we are seeing the best 
of what it can be, we just need to broaden that so it is 
consistently what the agency does.
    Mr. Gaffigan. Senator, I would just add, if management 
issues are starting to impact safety, then it is something we 
need to look at. When Davis-Besse was talked about, the safety 
culture issue came up. When we asked the question about Palo 
Verde, the issue of complacency came up. So I would say that 
NRC needs to pay attention to those things that impact safety. 
If it is a management issue, I understand the sensitivities. 
But NRC needs to be involved. I think they have done a better 
job with Palo Verde versus Davis-Besse.
    Senator Voinovich. Thank you.
    Senator Carper. All right. Senator Sanders, you are 
recognized for 5 minutes.
    Senator Sanders. Thank you very much.
    Mr. Lochbaum, in your testimony you mentioned that the 
Union of Concerned Scientists supports S. 1008, as it would 
help to restore confidence in the NRC. I thank you very much 
for that, because that is my legislation. But could you 
describe why the States of Massachusetts, New Jersey, New York 
and Vermont have lost confidence in the Nuclear Regulatory 
Commission and what has driven these States to take the step 
legally to intervene to oppose these reactors in their State?
    Mr. Lochbaum. Probably the largest common denominator 
between those three States is that the reactor oversight 
process was implemented in April of 2000, prior to 9/11 and 
what that meant for this Country. Those States are concerned 
that the activities that the NRC is doing, like power up-rates 
and license renewals, are being done as if 9/11 didn't happen. 
I don't think those States, from the interactions I have had, 
think that the NRC has done enough to ensure that the security 
threat, the terrorist threat, is being incorporated into the 
decision-making about whether license renewal is a good thing 
or a bad thing, or all the things necessary to make sure that 
it continues to be a safe and secure thing 20 years down the 
road are being undertaken down the road.
    Senator Sanders. In general, how do you feel about States 
being more involved in the process?
    Mr. Lochbaum. I think it benefits. From the observations I 
have had from 11 years at UCS, the more people who participate, 
whether it is States or the public or NRC or the regions, even 
the regions of the NRC, everybody has knowledge, everybody has 
input into the process. The agency can make a better decision 
for everybody when they equally, where they take advantage of 
all that input, rather than try to exclude it or discount it.
    Senator Sanders. It seems to me that that process enhances 
public confidence in the process.
    Mr. Lochbaum. Exactly. The times that I have gone to a 
meeting with a preconceived notion about what was right or 
wrong and heard what the licensee said or what GAO said or what 
the States said, I have often changed my mind based on the 
knowledge I gained through that process.
    Senator Sanders. On this issue, I don't think there is 
anybody who is on a different side. There is nobody, no matter 
what one's view on nuclear power, who does not want nuclear 
power to be absolutely as humanly safe as possible. The problem 
here is, given the lethality of the waste, you can't be 99.9 
percent safe. If that is the case, you could have a disaster. I 
would hope that we could work together on that.
    Mr. Lochbaum, you mentioned in your testimony that the 
Indian Point Plant, which has had numerous safety violations, 
got a simple slap on the wrist, a mere one day fine for 
violations that have been ongoing since January 2006. You 
called NRC ``not an aggressive enforcer'' but ``a meek and mild 
enabler of non-conforming behavior.'' Is this unusual for the 
NRC or is this the way NRC approaches enforcement at most of 
the U.S. nuclear facility?
    Mr. Lochbaum. It is very consistent with their pattern of 
being meek and mild. We did a study a few years ago comparing 2 
years worth of enforcement by the agency against individuals 
and against corporations. The NRC, through people, individuals, 
either the industry, took other kind of sanctions against 
individuals. Corporations who did much more serious things and 
put Americans in much greater harm, it was a letter of 
reprimand. I don't even know if their parents had to sign it or 
not.
    [Laughter.]
    Mr. Lochbaum. Other sanctions that really amounted to 
nothing. So the NRC doesn't really have a risk-informed 
enforcement policy. They enforce against those who are least 
able to defend themselves. That is not the way it should be.
    Senator Sanders. Mr. Gaffigan, would you like to comment on 
that?
    Mr. Gaffigan. I would only add that our work didn't look 
particularly at what they do once they find the inspections. 
But they are in a position where they have to look at what is 
in front of them and what is provided to them. In terms of 
taking enforcement actions, we didn't particularly look at that 
particular issue in our work.
    Senator Sanders. Mr. Fertel, did you want to comment on 
that?
    Mr. Fertel. I think you can always find specific examples 
where you could argue they should have done more, and some 
industry people would argue they should have done less. I think 
Chairman Carper asked the question about, if you make column 
four, isn't it a badge of shame. The answer to that is, yes, 
sir, it is. The enforcement sometimes doesn't have to be a 
civil penalty that can be effective. But the enforcement can be 
the image of your company, the performance of your people and 
what it does to basically how you look across the industry.
    There is tremendous peer pressure in the industry, Senator 
Sanders, to perform well. Any plant that is not performing well 
and any company that isn't performing well knows about it not 
only from the NRC, which is where your focus is right now, but 
from their peers. So I think you can look at enforcement, and I 
won't defend NRC's enforcement program one way or the other, 
but it is a much bigger picture. You made a very correct 
statement when you said there is no difference among anybody 
where you stand on nuclear energy from the standpoint of 
wanting to operate safety.
    Senator Sanders. Of course not.
    Mr. Lochbaum. There is no light between anybody.
    Senator Sanders. Let me just ask--am I over time?
    Senator Carper. A little.
    Senator Sanders. Just a very brief response. Does anybody 
here have any concerns with the possibility of dozens of new 
nuclear plants being created and we don't quite know how to get 
rid of a very lethal waste? Mr. Lochbaum, is that a concern?
    Mr. Lochbaum. I agree and slightly disagree with 
Commissioner Jaczko's issue to that. Spent fuel storage today 
isn't as safe and secure as it can be. If we had a number one 
change to make, we would accelerate the movement of irradiated 
fuel from spent fuels into dry casks. It is most vulnerable and 
it is least secure when it is in the spent fuel pools. If we 
could move that irradiated fuel into dry casks, even though it 
is still stored onsite, the threat profile and the safety 
levels, the safety risk drops tremendously, even though you 
have more casks on site. So that is what we do.
    Senator Sanders. With a half life of what, tens of 
thousands of years?
    Mr. Lochbaum. That is correct.
    Senator Sanders. Are we comfortable that 500 years from now 
this stuff will be safe?
    Mr. Lochbaum. I won't be around to confirm it one way or 
the other.
    [Laughter.]
    Mr. Lochbaum. But I think even with that time horizon, I 
think that is the right thing to do now to set the----
    Senator Sanders. You are saying that is the best option?
    Mr. Lochbaum. That is correct.
    Senator Sanders. I don't know, I am not a nuclear engineer, 
but God knows what happens, it makes me a little bit nervous 
about such toxic and lethal stuff hanging around for thousands 
of years.
    Mr. Chairman, thank you very much.
    Senator Carper. You bet. One of the subjects for a 
committee hearing that we are considering for maybe the first 
part of next year is what to do with nuclear waste beyond Yucca 
Mountain.
    Senator Sanders. Delaware I think was----
    [Laughter.]
    Senator Carper. I think a little farther north. Delaware is 
too small, we need a big State like Vermont.
    [Laughter.]
    Senator Carper. Mr. Lochbaum, in your testimony, you 
asserted that the NRC needs a change in management. As it turns 
out, they are about to have a large turnover in their 
workforce. That could certainly open up some management slots, 
I suspect.
    What are some of the management problems that you believe 
exist at the NRC and how do you suggest that they be addressed?
    Mr. Lochbaum. The problem the NRC has is that they never 
really think outside the box when a challenge comes up, whether 
it is Davis-Besse or any other challenge they have, whether it 
is trying to meet the new reactor licensing process. They look 
at what they have done for the past 30 years and make minor 
tweaks here and there. Because people have been around for 30 
years, so it is what they have been trained in, it is the way 
they have always done business.
    I am not suggesting that anybody forces people out the 
door. But as people leave, we are suggesting that you look for 
the best candidate, whether that is persons inside or outside, 
so that outside new blood can look at things, figure out new 
ways, bring new ways of doing things from wherever they came 
from, whether it is DOE or elsewhere, and become agents of 
change. I think that would also benefit the NRC's own safety 
culture. There has been a lot of talk about safety culture at 
reactor plants. The NRC's own internal safety culture is also a 
problem that needs to be fixed.
    I get more calls from NRC workers with safety concerns, 
whistleblowers, than from all nuclear powerplants combined. It 
has been that way for years running. That problem where people 
working at the agency are afraid to raise safety issues needs 
to be addressed.
    Mr. Gaffigan pointed out that the NRC is the number one 
place to work for. I can attest it is the number one place to 
work against as well. The NRC can learn it, they are very good 
people, very good staff. They just need some management help, 
better generals, if you will, to put that workforce into play.
    Senator Carper. All right, thanks.
    Mr. Fertel, we keep coming back, I am going to take one 
more run at it. In my view, what could the NRC do differently 
do identify and address early indications of declining reactor 
safety performance?
    Mr. Fertel. Again, Senator, I get asked the same question 
on Wall Street about what they could use to rate utilities. The 
reality is there is no silver bullet. There is no single 
performance indicator. It is the cumulative weight, the one 
thing the ROP does significantly better than the old systematic 
assessment of licensee performance is it does it almost in real 
time. Not ahead of it, necessarily, but it is almost in real 
time.
    So what you are seeing, whether it is Palo Verde or the 
other 10 plants, you are seeing the NRC increase inspection 
activity pretty early, much earlier than ever before in their 
process. That is due----
    Senator Carper. Just repeat that again. It bears repeating. 
Say that again.
    Mr. Fertel. What you are seeing them do with the new ROP is 
increase their inspection activity, because they are seeing 
declining performance much earlier than they ever did before 
the ROP went into place.
    What you don't have, and if we had it we would honestly 
share it, because we would want to use it, is a leading 
indicator that tell us today that years from now this plant or 
a year from now this plant is going to get into the ditch. You 
are getting that, but you don't get it before you start to see 
the trend. But you are catching it now much better. It is a 
much better process for catching it. But there is no silver 
bullet, at least that we can find yet. Believe us, we are 
looking, too.
    Senator Carper. All right, thank you.
    Let me ask you, if I could, one last question, then I will 
yield to Senator Voinovich. Again, Mr. Fertel, and the other 
may want to comment on this as well, just list for us if you 
will the most important ways the NRC can impact either 
positively or negatively the trend toward new nuclear 
construction.
    Mr. Fertel. On the positive side, I think, and I don't know 
if David has looked at it, they have brought some pretty good, 
new creative blood in to run the new reactor organization at a 
management level. They are bringing in staff below that that 
actually is relatively new. From a standpoint of new people 
that are going to be there for a while, I think that is good.
    On the negative, one of the things that has happened post-
9/11 at NRC is they have been out of process a lot, for good 
reason early on, because of what happened on 9/11 and the need 
to take immediate actions. But they have been out of process 
from a transparency standpoint, from a rulemaking standpoint. 
One of the fears we see is, as you bring in new people to be 
regulators, and there isn't a regulatory process that is well-
defined and being used, you can have individuals making their 
own decisions. That could be a good decision for safety or 
timing or it could be a bad decision. So one of the things we 
need to have them do is get more disciplined in their process. 
That may even help in some of what David is referring to on the 
management side.
    Senator Carper. My time is expired, but Mr. Lochbaum, if 
you could respond very briefly.
    Mr. Lochbaum. Just very briefly, I agree with what several 
Senators had said during the opening remarks about the existing 
reactors need to be maintained safely. I think a mis-step at an 
existing reactor is probably the biggest thing that could set 
back anybody's construction programs. I am focused on existing 
reactors less than new reactors, because that is where I think 
things could go wrong and hurt the most.
    Senator Carper. Good point.
    Senator Voinovich.
    Senator Voinovich. Yes, it gets back to human capital. They 
are going to net up 200 as a result of hiring. I remember Ed 
McGaffigan saying on several occasions, we are getting all 
these new people in and what really is a concern to me is, can 
we train them up fast enough to do the job they are supposed to 
do.
    Would any of you want to comment on your observations in 
terms of the training program for the new people that are 
coming in? If you are not familiar with it, then----
    Mr. Lochbaum. In our written remarks, we had some concerns 
about the training program for the new reactor organization. At 
an April meeting, I asked what the training program was. The 
answer was that it is largely dependent on the job training.
    We felt that on the job training is good, but it is not 
enough. The NRC has a very good training center down in 
Tennessee, and also in Rockville. That should be their primary 
thing, with on the job training filling in the gaps between the 
formal training program. So we think that training effort needs 
to be expanded.
    We were encouraged when the NRC went back and looked at new 
reg 1055 that was done largely at the request of the Congress 
in the 1980s, and some of the lessons learned from the original 
construction program. So they are looking back to try to 
capture those lessons and impart them on the new staff.
    Mr. Fertel. Just to follow up for a moment on David's 
comment on existing plants, the training of new people coming 
in, they are not all going to new reactors. They are also going 
to existing reactors. One of the concerns we do have is they 
need a formal training program, not just from the technical 
side, but from the regulatory side, on what a regulator does 
and how a regulator does business.
    Mr. Gaffigan. Senator, I would just add that in our report, 
we looked at the two groups, the nuclear reactor regulation 
group and NRO, the New Reactors Office. Half those people there 
have been there less than 5 years. That is true, this issue is 
true throughout Government.
    Senator Voinovich. Yes. Well, one of the things we have to 
look at is that there are impediments, they obviously are doing 
very well at bringing on new people, much better than a lot of 
the other agencies that are around.
    Would any of you want to comment upon the Department of 
Energy's talking about locating these storage facilities for 
nuclear waste, where you would be able to move stuff out of dry 
storage? I think they are talking about four of them around the 
Country, four or five of them. Also to comment that the public 
doesn't understand that we have been taking billions of dollars 
out of them over the years to take care of properly storing 
nuclear waste. At this stage of the game, I think some 
companies are suing the Department of Energy because of the 
fact that they haven't fulfilled their responsibility in 
dealing with this problem. Do any of you want to comment on 
this?
    Mr. Fertel. Every company has actually sued the Department 
of Energy on the waste situation and the contracts, and some 
have had settlements and others have had court decisions and 
others are still in process.
    We actually believe that with the advent of new plants in 
this Country and looking out at some of the stuff that is going 
on around the world, looking at closing the fuel cycle, and if 
you are going to close the fuel cycle and you are going to 
build recycling facilities and potentially even fast reactors 
at some point, centralizing storage at those facilities makes a 
lot of sense. Going to Senator Sanders' statement, moving 
places to more centralized locations where you have facilities 
to treat it would actually make some sense, in this Country or 
actually any country.
    Mr. Lochbaum. One thing we have looked at is that the 
plants that have permanently shut down, like Maine Yankee and 
Big Rock Point and elsewhere, the only hazard left is the spent 
fuel. So for those sites, moving the spent fuel and eliminating 
the hazard to some place like a Federal lab or somewhere, would 
make sense. For the operating plants, they continue to generate 
the waste. So it is not as imperative to move that spent fuel 
from those locations as it is for the plants that have been 
permanently shut down.
    Senator Voinovich. The observation is that where they have 
wet storage that they do have a capacity onsite to move it to 
dry storage?
    Mr. Lochbaum. Yes, that is our understanding.
    Mr. Fertel. Certainly at every existing plant that is true. 
But we would agree with David's statement that you ought to 
move it off the shut-down plants first and consolidate it at 
either a Federal facility or a centralized location. That makes 
just good sense from every perspective.
    Senator Voinovich. Right. I think the other thing that the 
public needs to understand is how long it is going to take for 
that first plant to become operation. I think it was 2014?
    Mr. Fertel. Closer to 2015, probably. But 2014 is their 
optimistic goal.
    Senator Voinovich. So I think a lot of energy is going to 
be put into this whole issue of waste storage during that 
period of time. I think most of us, even though we are pushing 
forward on Yucca Mountain, pretty well understand that as long 
as Senator Reid is around and Senator Ensign, probably any 
Senators from Nevada, they are going to do everything they can 
to make sure it doesn't happen. So I think we have to get real 
about the issue.
    Senator Carper. Thank you.
    I think that is a wrap. I want to say to each of our 
panelists on our second panel, thank you very much for 
preparing for this hearing, for your presentations and your 
participation and responding to our questions. We may have some 
follow-up questions we would like to send you. If you could 
respond to those promptly so we can finalize the hearing 
record, that would be much appreciated.
    Thank you for helping us to think outside the box and maybe 
to encourage the NRC to do the same. With that, this committee 
is adjourned.
    [Whereupon, at 12:45 p.m., the committee was adjourned.]
  

                                  
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