[Federal Register Volume 62, Number 58 (Wednesday, March 26, 1997)]
[Notices]
[Pages 14452-14456]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7638]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-327 and 50-32; License Nos. DPR-77 and DPR-79; EA 96-
269]


Tennessee Valley Authority, Sequoyah Nuclear Plant Units 1 and 
2); Order Imposing Civil Monetary Penalty

I

    Tennessee Valley Authority (Licensee) is the holder of Operating 
License Nos. DPR-77 and DPR-79 issued by the Nuclear Regulatory 
Commission (NRC or Commission) on September 17, 1980, and September 15, 
1981, respectively. The licenses authorize the Licensee to operate the 
Sequoyah Nuclear Plant, Units 1 and 2 in accordance with the conditions 
specified therein.

II

    An inspection of the Licensee's activities at the Sequoyah Nuclear 
Plant was conducted during the period of July 8 through August 22, 
1996. The results of this inspection indicated that the Licensee had 
not conducted its

[[Page 14453]]

activities in full compliance with NRC requirements. A written Notice 
of Violation and Proposed Imposition of Civil Penalty (Notice) was 
served upon the Licensee by letter dated November 19, 1996. The Notice 
stated the nature of the violations, the provisions of the NRC's 
requirements that the Licensee had violated, and the amount of the 
civil penalty proposed for the violations.
    The Licensee responded to the Notice in a letter dated December 19, 
1996. In its response, the Licensee agreed that the violations occurred 
but contested NRC's application of the Enforcement Policy and requested 
the NRC to reconsider its decision to categorize the violations as a 
Severity Level III problem and mitigate the proposed civil penalty in 
its entirety. The Licensee based its requests on the history of 
extensive activities it has undertaken to upgrade the Sequoyah fire 
protection program, the minimal safety and regulatory significance of 
the individual violations, and the corrective actions taken following 
identification.

III

    After consideration of the Licensee's response and the statements 
of fact, explanation, and argument for mitigation contained therein, 
the NRC staff has determined, as set forth in the Appendix to this 
Order, that the violations occurred as stated and that the penalty 
proposed for the violations designated in the Notice should be imposed.

IV

    In view of the foregoing and pursuant to Section 234 of the Atomic 
Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205, 
it is hereby ordered that:

The Licensee pay a civil penalty in the amount of $50,000 within 30 
days of the date of this Order, by check, draft, money order, or 
electronic transfer, payable to the Treasurer of the United States 
and mailed to James Lieberman, Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission, One White Flint North, 11555 
Rockville Pike, Rockville, MD 20852-2738.

V

    The Licensee may request a hearing within 30 days of the date of 
this Order. Where good cause is shown, consideration will be given to 
extending the time to request a hearing. A request for extension of 
time must be made in writing to the Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, Washington, D.C. 20555, and include 
a statement of good cause for the extension. A request for a hearing 
should be clearly marked as a ``Request for an Enforcement Hearing'' 
and shall be addressed to the Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission, Washington, D.C. 20555, with a copy to 
the Commission's Document Control Desk, Washington, D.C. 20555. Copies 
also shall be sent to the Assistant General Counsel for Hearings and 
Enforcement at the same address and to the Regional Administrator, NRC 
Region II, 101 Marietta Street N.W., Suite 2900, Atlanta, Georgia 
30323.
    If a hearing is requested, the Commission will issue an Order 
designating the time and place of the hearing. If the Licensee fails to 
request a hearing within 30 days of the date of this Order (or if 
written approval of an extension of time in which to request a hearing 
has not been granted), the provisions of this Order shall be effective 
without further proceedings. If payment has not been made by that time, 
the matter may be referred to the Attorney General for collection.
    In the event the Licensee requests a hearing as provided above, the 
issue to be considered at such hearing shall be: Whether on the basis 
of the violations admitted by the Licensee, this Order should be 
sustained.

    Dated at Rockville, Maryland this 17th day of March 1997.

    For the Nuclear Regulatory Commission.
Edward L. Jordan,
Deputy Executive Director for Regulatory Effectiveness, Program 
Oversight, Investigations and Enforcement.

Appendix--Evaluations and Conclusion

    On November 19, 1996, the NRC issued to Tennessee Valley Authority 
(Licensee or TVA) a Notice of Violation and Proposed Imposition of 
Civil Penalty (Notice) for four violations identified during an NRC 
inspection conducted during the period July 8 through August 22, 1996, 
at the Sequoyah Nuclear Plant. In its response dated December 19, 1996, 
the Licensee agreed that the violations occurred but stated that the 
NRC's categorization of the four individual violations as a Severity 
Level III problem, and proposed imposition of a $50,000 civil penalty, 
was inconsistent with the NRC Enforcement Policy as it was applied. The 
Licensee requested the NRC to reconsider its decision regarding the 
severity level of the violations and mitigate the proposed civil 
penalty in its entirety. The NRC's evaluation and conclusion regarding 
the Licensee's requests are as follows.

Summary of Licensee's Request for Reduction in Severity Level

    In its request for reconsideration of the severity level of the 
four violations comprising the Severity Level III problem, the Licensee 
maintained that (1) extensive activities have been taken to upgrade the 
Sequoyah fire protection program, (2) the actual and potential safety 
significance of the violations are minimal, (3) the regulatory 
significance of the violations should be assessed in the context of 
TVA's actions to improve its performance in this area, and (4) the use 
of fire watches at Sequoyah is consistent with NRC policy and 
regulatory requirements.
    Regarding TVA's history of activities to upgrade the Sequoyah fire 
protection program, the Licensee maintained that beginning in 1991, it 
implemented a four-phase Fire Protection Improvement Plan (FPIP) to 
address important engineering items such as evaluating the hydraulic 
performance of the fire protection water system, updating the fire 
hazards analysis, and completing the fire protection report. Of the 63 
items in the initial plan, 61 items had been completed. The two 
remaining items involved (1) replacing the fire pumps and upgrading the 
existing raw water fire protection system to a potable water system and 
(2) completing the evaluation of approximately 1,500 fire barrier 
penetration seals. These two items were scheduled to be completed in 
1997. The Licensee stated that the NRC's Notice did not acknowledge the 
considerable resources expended on the upgrades to the fire protection 
program since 1991 which demonstrated both management's attention and 
that the overall fire protection program was being treated as a high 
priority item.
    Second, the Licensee contended that the four violations had only 
minimal potential safety significance, and when considered either 
individually or in the aggregate, were not significant enough to 
constitute a Severity Level III problem. The Licensee's position on 
each of the violations is as follows:
    Violation A: This violation involved quality assurance (QA) 
findings for which the Licensee had delayed implementing corrective 
action. The Licensee addressed the actions taken on the QA findings 
related to 1,500 degraded fire barrier penetration seals (of the 24,500 
penetrations inspected), 326 degraded fire dampers, and deviations from 
procedures for controlling transient fire loads. The Licensee 
considered that these violations were of minimal safety significance 
and of low regulatory significance due to the management

[[Page 14454]]

attention that had been applied to the site's fire protection program 
since 1991. In particular, the Licensee stated that an evaluation of 
the 326 fire dampers found that only eight of the dampers required 
additional work. The Licensee concluded that the actions taken do not 
indicate a lack of management attention.
    Violation B: This violation involved an inoperable carbon dioxide 
system in the computer room which was scheduled to be repaired as part 
of the upgrade of the computer room. The Licensee stated that the 
minimal safety significance associated with this situation did not 
warrant rearranging priorities to perform part of the computer room 
upgrades out of sequence.
    Violation C: This violation involved the failure to perform a 
surveillance of fire barrier penetrations in high radiation areas. The 
Licensee stated that a subsequent review found these penetrations 
acceptable.
    Violation D: This violation involved the failure to hydrostatically 
test nine of 119 fire hoses. The Licensee stated that subsequent 
testing found these hoses to be capable of performing their intended 
function. The Licensee concluded that this violation involved limited 
procedural non-adherence which has traditionally not been the subject 
of escalated enforcement.
    The Licensee concluded that the regulatory significance of the 
violations should be determined by considering the safety significance 
of the violations in context with the actions initiated by the Licensee 
to assure regulatory compliance and enhance performance in the fire 
protection area. The Licensee stated that the NRC has traditionally 
taken a much broader view in exercising discretion to tailor an 
enforcement action to the particular situation, and such an approach 
would be appropriate in this case given the minimal actual safety 
significance of the violations.
    Lastly, the Licensee took exception to the NRC's letter of November 
19, 1996, which stated that the use of fire watch patrols was intended 
for interim, short-term compensatory measures until degraded fire 
protection features can be repaired or replaced. The Licensee argued 
that the use of fire watch patrols for degraded fire protection 
features: (1) Provides an acceptable level of safety; (2) is permitted 
by Technical Specifications without time limitations; (3) does not 
challenge the fire protection defense-in-depth concept; (4) restores 
the margin of safety that is lost with degraded conditions; (5) 
provides an acceptable substitute as opposed to an additional level of 
protection; (6) does not increase the vulnerability of equipment to 
potential fire exposure or fire damage, and (7) does not violate NRC 
requirements. In summary, the Licensee stated that enforcement action 
should not be taken unless the reliance on fire watch patrols for 
degraded conditions could be shown to result in a violation of 
regulatory requirements.

NRC Evaluation of Licensee's Request for Reduction in Severity 
Level

    In reviewing the Licensee's response, no additional information was 
provided that was not previously considered by the NRC in its 
deliberations regarding this matter.
    Contrary to the Licensee's response, the NRC did consider the 
Licensee's past efforts to improve the Sequoyah fire protection program 
through the four-phase FPIP. Specifically, Section F1.3 of NRC 
Inspection Report No. 50-327, 328/96-10 acknowledged that the actions 
associated with the FPIP had enhanced the fire protection program. 
However, prior to issuance of the Notice that is the subject of this 
action, the NRC had also expressed various concerns with the adequacy 
of the fire protection program and corrective action on fire protection 
issues. These instances include: (1) The Systematic Assessment of 
Licensee Performance report dated February 21, 1995, which stated that 
``Correction of long-standing deficiencies in the material condition of 
the fire protection system was slow and management exhibited a 
tolerance for poor conditions;'' (2) the July/August 1996 inspection 
documented in Inspection Report No. 50-327, 328/96-10, describing new 
problems and discrepancies identified as not receiving appropriate 
management attention for resolution; and (3) a February 1996 
inspection, documented in Inspection Report No. 50-327, 328/96-02, 
which identified problems with the untimely implementation of portions 
of the FPIP, such as deferment of the construction of the upgrades to 
the fire protection water supply system until 1997, and also identified 
a violation involving the lack of adequate protective or preventive 
measures for the construction portions of the system.
    As evidenced by the violations cited in the Notice and the specific 
circumstances surrounding them, as described in the inspection report, 
the NRC concluded that the Licensee's corrective actions associated 
with the fire protection program have not been fully effective in 
assuring timely resolution of long-standing issues as described below:
    Violation A: The violations included nine examples of inadequate or 
untimely corrective action for previously identified deficiencies. 
These included quality assurance (QA) findings, issues from the FPIP, 
and concerns identified following establishment of the FPIP. QA 
findings were identified as early as 1992, yet corrective action had 
not been completed at the time of the inspection. At the time of the 
July/August 1996 inspection, completion dates had not been established 
for several of the items and some items had completion dates extending 
into 1997. Other issues, such as the control of combustibles, evidenced 
the Licensee's inability to achieve compliance. The control of 
transient combustibles was identified as an area of concern in QA 
audits, but ineffective corrective action resulted in repeated 
violations in 1996. In some instances, corrective actions for items 
identified since the 1991 FPIP had been developed, but were not being 
completed in a timely manner. For example, in September 1993, the 
Licensee initially identified 326 fire dampers which were not installed 
in accordance with the vendor's installation requirements. Further 
engineering evaluation and review reduced this number to eight, which 
the Licensee considered needing replacement. Although the evaluation 
which found 318 of these dampers to be satisfactory was completed in 
December 1994, the eight dampers identified for replacement were not 
scheduled to be replaced until 1997, even though the dampers are 
readily accessible for replacement during any mode of plant operation. 
The scheduled replacement of these dampers, in excess of two years 
after identification of the need for replacement, was considered a 
failure of the Licensee's management to place adequate emphasis on 
correcting deficiencies.
    Violation B: The inoperability of the carbon dioxide system in the 
computer room was identified by the Licensee in December 1995. This 
system had been inoperable since completion of a heating ventilation 
and air conditioning system modification in May 1990. Although 
surveillance tests were performed on this system in April 1991, August 
1992, June 1994, and December 1995, they failed to identify this 
deficiency. Although the violation in itself has low safety 
significance, the combination of design oversight and an inadequate 
surveillance inspection and test program for this system, which should 
have identified this deficiency, is of concern and is another example 
of weak management oversight of the fire protection program.

[[Page 14455]]

    Violation C: The violation involving the failure to inspect the 
fire barrier penetrations in the high radiation areas was identified by 
the Licensee. The fact that subsequent inspections did not identify any 
problems with these penetrations is fortuitous. The root cause of this 
problem was considered to be an error on the part of personnel 
performing the procedure in conjunction with inadequate management 
oversight. Additionally, resolution of this issue had not been timely.
    Violation D: This violation, involving the failure to inspect the 
fire hose installed on the fire hose stations within the reactor 
buildings, was identified by the Licensee. The fact that subsequent 
inspections found the hydrostatic tests on only nine of the 119 fire 
hose sections to be out of date and that testing found the hoses to be 
capable of performing their intended function is fortuitous. The cause 
of this problem was improper procedure revision, inadequate procedure 
review, and inadequate management oversight.
    The NRC acknowledges the Licensee's position that individually 
these violations are of low safety significance. However, as stated in 
the Section IV.A of the Enforcement Policy (NUREG-1600), a group of 
Severity Level IV violations may be evaluated in the aggregate and 
assigned a single, increased severity level, thereby resulting in a 
Severity Level III problem, if the violations have the same underlying 
cause or programmatic deficiencies. The purpose of aggregating 
violations is to focus the Licensee's attention on the fundamental 
underlying causes for which enforcement action appears warranted and to 
reflect the fact that several violations with a common cause may be 
more significant collectively than individually, and may therefore 
warrant a more substantial enforcement action. In this case, the NRC 
determined that the violations have the same underlying cause, namely 
the lack of attention and priority given to the fire protection 
program.
    The Licensee's characterization of the root cause as ``insufficient 
management involvement in the oversight of the fire protection 
program,'' is consistent with the NRC's conclusion, except in one 
important respect: it fails to recognize management acceptance of 
unresolved issues and the failure to assign the necessary priority to 
the fire protection program issues to assure their timely resolution. 
In addition, although the Licensee appeared to focus resources on the 
resolution of many of the 1991 FPIP issues, not all items have yet been 
resolved and newly identified items were not resolved in a timely 
manner. The NRC considers this failure to be significant because 
program ownership and ineffective management performance were 
identified as underlying causes of performance weaknesses in the 
Sequoyah Nuclear Plant Restart Plan of May 20, 1993. Ineffective 
oversight is also indicated by the fact that there has not been 
consistent management of the fire protection program. Specifically, 
since 1990, there have been a number of personnel changes in the 
position of Fire Protection Manager. In that inadequate oversight of 
the fire protection program continues to persist, escalation of the 
violations is consistent with Supplement I.C.7 of the NRC Enforcement 
Policy.
    The Licensee's position that the NRC should exercise discretion due 
to the improvements and enhancements being made in the fire protection 
program cannot be supported due to multiple problems identified by both 
the Licensee and the NRC which were outside the scope of the 1991 Fire 
Protection Improvement Plan. These problems indicate a continued lack 
of management oversight and control of the fire protection program.
    The Licensee's position that fire watch patrols for degraded fire 
protection features were equivalent to fully functioning features is 
not correct. It is the NRC's opinion that fire watch patrols, in 
combination with the fire protection defense in depth features, provide 
an adequate level of fire protection safety on an interim basis until 
permanent corrective actions are implemented. Therefore, a fire watch 
patrol can only supplement a degraded fire protection feature and is an 
approved compensatory measure for the identification of fire and 
notification of a fire to the appropriate response personnel. However, 
a fire watch is not equivalent to the fire protection feature in 
question.
    The Licensee indicated that there was no time limitation on how 
long a fire watch patrol can be used in lieu of restoring a degraded 
system to service. To the contrary, there is, in fact, a recognized 
regulatory impact that can result from the use of long-term fire 
watches. If the protection features are described in the Final Safety 
Analysis Report, long-term or permanent fire watches could be 
considered a modification which would require a 10 CFR 50.59 safety 
analysis, which could result in limiting the fire watches use. Second, 
although not specifically limiting the use of fire watches, the 
Sequoyah Technical Specifications clearly indicate the need to restore 
degraded features as soon as possible. The Sequoyah Technical 
Specifications require that a Special Report be issued to the NRC if a 
degraded fire protection feature cannot be repaired within a designated 
time. In general, the Sequoyah Technical Specifications require 
degraded fire protection suppression systems to be restored to 
operability within 14 days and fire barrier penetration seals restored 
to operability within 7 days, or alternatively, within the next 30 days 
a Special Report is required to be submitted to the NRC outlining the 
cause of the system inoperability and the plans or schedule for 
restoring the system to operable status. The Technical Specifications 
requirements clearly indicate that the NRC does not sanction the long 
term use of fire watch patrols for degraded fire protection features 
and that restoration to full fire protection capability is required. 
Regardless of the NRC's stated position regarding Sequoyah's use of 
fire watch patrols, none of the violations were based on their 
utilization.

Summary of Licensee's Request for Mitigation of Civil Penalty

    The Licensee believes the civil penalty should be mitigated in its 
entirety because the problems were identified by the Licensee and 
corrective actions were taken prior to NRC enforcement action. These 
actions included:

--Implementation of the 1991 Fire Protection Improvement Plan.
--Improved management responsiveness to identified problems by 
centralization of fire protection program ownership and responsibility 
into one department, establishment of fire protection program 
priorities and performance expectations, and appointment of a new fire 
protection manager.
--Establishment in June 1996 of an integrated schedule designed to 
track fire protection issues to closure.
--Performance of a self-assessment of the fire protection program which 
evaluated and found the correction actions and improvements implemented 
to have been effective.
--Direction provided for the QA organization to escalate its concerns 
to management in order to assist management in collectively analyzing 
individual problems to facilitate corrective action.

    The Licensee stated that the lack of timeliness associated with the 
individual fire protection issues was identified and corrective action 
was

[[Page 14456]]

initiated prior to NRC enforcement action. Therefore, these factors 
should be taken into consideration prior to the NRC pursuing escalated 
enforcement and imposition of a civil penalty. The Licensee believes 
that to issue a civil penalty after action was taken to reorganize the 
fire protection program and provide enhanced management oversight would 
be contrary to the NRC Enforcement Policy. Furthermore, the imposition 
of a civil penalty under these circumstances would serve no purpose 
other than to punish the Licensee and would be contrary to the NRC 
Enforcement Policy to focus on current performance.

NRC Evaluation of Licensee's Request for Mitigation of Civil 
Penalty

    The NRC does not agree with the Licensee's position that the fire 
protection program problems were identified by the Licensee and 
corrective action was taken prior to NRC involvement. Program oversight 
weaknesses were highlighted by the NRC in the February 1995 SALP 
Report, as discussed previously. In addition, concerns with the 
timeliness and adequacy of fire protection program corrective actions 
were also identified by the NRC in February 1996. Although a QA audit 
completed in May 1996 elevated the significance of the programmatic 
issues to upper TVA management, a follow-up NRC inspection in July 1996 
found that these issues had not been resolved. Once the NRC focused on 
the multiple fire protection deficiencies in an inspection conducted in 
July and August 1996, the Licensee placed additional emphasis on this 
area, made organizational and personnel changes, and implemented plans 
to correct the deficiencies. The actions were initiated by the Licensee 
after the February 1996 identification by the NRC of: (1) A related 
violation and (2) inadequate responses to QA findings; but these 
actions were limited and did not ensure lasting corrective actions.
    Section VI.B.2.c of the Enforcement Policy discusses the 
application of the factor of Corrective Action in the civil penalty 
assessment process. The purpose of this factor is to encourage 
licensees to (1) take the immediate actions necessary upon discovery of 
a violation that will restore safety and compliance with the license, 
regulations, or other requirements; and (2) develop and implement (in a 
timely manner) the lasting corrective actions that will not only 
prevent recurrence of the violation at issue, but will be appropriately 
comprehensive, given the significance and complexity of the violations, 
to prevent recurrence of violations with similar root causes. In 
assessing Corrective Action, consideration is given to the timeliness 
of the action (including the promptness in developing the schedule for 
long term corrective action), the adequacy of the licensee's root cause 
analysis, and the comprehensiveness of the corrective action. Clearly, 
in this case, the program deficiencies at issue in the Notice were 
discovered by TVA as early as 1991, but corrective actions were not 
promptly taken, and since the issues were primarily licensee-
identified, the time of reference used in assessing this factor is 
discovery, not when the issues were identified as apparent violations 
by the NRC. Further, although in most cases, schedules for long-term 
corrective actions were developed, management had not placed the 
appropriate priority on meeting schedules, which resulted in 
substantial deferments. Continued unjustifiable deferral of known 
deficiencies is unacceptable to the NRC.

NRC Conclusion

    The NRC concludes that the violations occurred as stated and that 
collectively they represent a Severity Level III problem. Since the 
July/August 1996 NRC inspection, it appears that the licensee has 
implemented appropriate corrective actions to address these problems 
and is now appropriately focused on this program area. However, no 
adequate basis for either a reduction of the severity level or for 
mitigation of the civil penalty was provided by the licensee. 
Consequently, the proposed civil penalty in the amount of $50,000 
should be imposed.

[FR Doc. 97-7638 Filed 3-25-97; 8:45 am]
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