[Federal Register Volume 63, Number 152 (Friday, August 7, 1998)]
[Notices]
[Pages 42439-42459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21168]


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NUCLEAR REGULATORY COMMISSION


Public Comment on the Integrated Review of the Assessment Process 
for Commercial Nuclear Power Plants

AGENCY: Nuclear Regulatory Commission.

ACTION: Request for public comment.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is performing an 
integrated review of the assessment process (IRAP) to develop a new 
method for assessing licensee performance at

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commercial nuclear power plants. In parallel with this effort, the 
staff is developing several new assessment tools that can be used in an 
integrated process. These additional assessment tools include risk-
informed assessment guidance, trending methodology, and financial 
indicators. Public comments are requested on the development of a new 
assessment process and these associated assessment tools. The NRC is 
soliciting comments from interested public interest groups, the 
regulated industry, States, and concerned citizens. The NRC staff will 
consider comments received in developing a final proposal for a new 
assessment process.

DATES: The comment period expires October 6, 1998. Comments received 
after this date will be considered if it is practical to do so, but the 
Commission is able to ensure consideration only for comments received 
on or before this date.

ADDRESSES: Submit written comments to: Chief, Rules and Directives 
Branch, Division of Administrative Services, Office of Administration, 
Mail Stop: T-6D-59, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001. Hand deliver comments to: 11545 Rockville Pike, Rockville, 
Maryland, between 7:45 a.m. and 4:15 p.m. on Federal workdays. Copies 
of comments received may be examined at the NRC Public Document Room, 
2120 L Street, NW. (Lower Level), Washington, DC.

FOR FURTHER INFORMATION CONTACT: Timothy J. Frye, Mail Stop: O-5H-4, 
Inspection Program Branch, Office of Nuclear Reactor Regulation, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, Telephone 
301-415-1287.

SUPPLEMENTARY INFORMATION:

Background

    Over the years, the NRC has developed and implemented different 
licensee performance assessment processes to address the specific 
assessment needs of the agency at the time. The systematic assessment 
of licensee performance (SALP) process was implemented in 1980 
following the accident at Three Mile Island to allow for the 
systematic, long-term, integrated evaluation of overall licensee 
performance. The senior management meeting (SMM) process was 
implemented in 1986 following the loss-of-feedwater event at Davis-
Besse to allow those plants whose performance was of most concern to be 
brought to the attention of the highest levels of NRC management in 
order to plan a coordinated agency course of action. The plant 
performance review (PPR) process was implemented in 1990 to allow for 
periodic adjustments in NRC inspection focus in response to changes in 
licensee performance and emerging plant issues.
    Each of these assessment processes serves a useful purpose and has 
evolved individually over time through separate reviews and 
improvements. However, overlaps between these processes now exist such 
that they (1) have multiple structures for data analysis and different 
assessment criteria, (2) have different outputs which can send mixed 
messages on licensee performance, and (3) place significant 
administrative burdens on the NRC staff. Although each of the current 
assessment processes has been individually successful at meeting its 
particular purpose, an integrated review of these processes has not 
been performed.

Integrated Review of the Assessment Process

    In September 1997, the NRC began an integrated review of the 
assessment processes used for commercial nuclear power plant licensees. 
A cross-disciplinary team of NRC staff members was assembled to 
identify and evaluate potential improvements to how licensee 
performance is assessed by the NRC. A process re-engineering approach 
was taken by the team to identify the desired objectives of a new 
assessment process, the attributes it should possess, and criteria to 
measure improvement over the existing assessment processes.
    The team developed a conceptual design for a new integrated 
assessment process and presented it to the NRC Commissioners in 
Commission paper SECY-98-045, dated March 9, 1998. This Commission 
paper requested the Commission's approval to solicit public input on 
the proposed concepts. On April 2, 1998, the staff briefed the 
Commission on the concepts for a new assessment process as discussed in 
the paper.
    On June 30, 1998, the Commission issued a staff requirements 
memorandum (SRM) in response to SECY-98-045 that approved the staff's 
request to solicit public comment on the concepts presented in the 
Commission paper. The SRM, the Commission voting record, and the 
comments of the Commissioners regarding SECY-98-045 are attached. Upon 
completion of the public comment period, the NRC will develop a final 
recommendation to the Commission for changes to the assessment process.

Risk-Informed Assessment Guidance

    The NRC issued a policy statement on the use of probabilistic risk 
assessment (PRA) methods in nuclear regulatory activities in SECY-95-
126, dated May 18, 1995. The statement presents the policy that the use 
of PRA technology in NRC regulatory activities should be increased to 
the extent supported by the state of the art in PRA methods and data 
and in a manner that complements the NRC's deterministic approach. 
Consistent with that policy, the staff has developed guidance, based on 
risk insights, for assessing the findings and issues contained in the 
Plant Issues Matrix. This guidance is entitled ``Guidance for Assessing 
the Risk Inherent in Plant Performance'' and is available as Appendix B 
to the report ``Concepts Developed by the Integrated Review of 
Assessment Process for Commercial Nuclear Power Plants,'' dated July 
29, 1998. The guidance is intended to help NRC staff develop a risk-
informed perspective on plant performance so that that perspective will 
be part of the NRC's process for reviewing licensee performance.

Indicators

    In an SRM dated June 28, 1996, the Commission directed the staff to 
assess the SMM process and evaluate the development of indicators that 
can provide a basis for judging whether a plant should be placed on or 
deleted from the NRC Watch List. In response to this request, the staff 
developed several new assessment tools, such as trending methodologies 
and economic indicators.
    Studies were undertaken to develop trending methodologies that 
provide more objective and scrutable information on plant performance. 
The trend model is recommended as a tool for quantitatively identifying 
candidate plants for further discussion by senior NRC managers during 
the licensee performance review process. The trend methodology is based 
on the trend model suggested by the Arthur Andersen Company in its 
original review of the SMM process (Arthur Andersen, ``Recommendations 
to Improve the Senior Management Meeting Process,'' December 30, 1996.) 
The regression model is recommended as a quality control measure for 
the trend model, as well as possibly identifying additional plants that 
warrant further discussion. The regression model estimates the 
probability that a plant's current performance should be further 
discussed during the SMM, based on the experience with plants that were 
discussed during previous SMMs.
    A set of site-related financial variables was developed for use in 
the licensee performance review process. Comparison of the trends of 
these

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financial variables to earlier single-unit and multi-unit median trends 
in the nuclear industry pointed to financial trends and patterns that 
had often preceded decisions to discuss a plant at past SMMs. However, 
no financial model is recommended for use alone in determining those 
plants that warrant further discussion during the SMM.
    These methodologies were originally developed for use by the SMM 
process, but are equally applicable in an integrated assessment 
process. The use of the trending methodologies can be one part of a 
larger integrated assessment process that may consider both 
quantitative and qualitative information during the licensee 
performance review process. The trending methodologies and financial 
indicators are not intended to be the precise definitive identifying 
elements. Rather, they are designed to help identify candidate plants 
for further discussion by senior NRC managers and rely on the remaining 
elements of an integrated assessment process to complete the 
identification process.
    Details of the development efforts for the various trending 
methodologies and financial indicators are described in three draft 
reports that are contained in Appendices A and E of the report 
``Concepts Developed by the Integrated Review of Assessment Process for 
Commercial Nuclear Power Plants,'' dated July 29, 1998. Specifically, 
details of a trend model are contained in ``Draft Report--Development 
and Findings of the Performance Trending Methodology,'' dated February 
27, 1998. Details of a regression model are contained in ``A Modeling 
Approach for Identifying Plants for Senior Management Discussion Using 
Performance Indicator Data,'' dated March 1998. Details of a set of 
financial trend variables are contained in ``Draft Special Study--
Methodology for Identifying Financial Variables for Trend Analysis,'' 
dated May 1998.

Industry Proposal

    In parallel with staff work on the IRAP and the development of 
other assessment tools, the industry has independently developed a 
proposal for a new assessment and regulatory oversight process. This 
proposal would take a risk-informed and performance-based approach to 
the inspection, assessment, and enforcement of licensee activities 
based on the results of a set of performance indicators. This proposal 
is being developed by the Nuclear Energy Institute and is further 
described in ``Minutes of the July 28, 1998 Meeting With the Nuclear 
Energy Institute to Discuss Performance Indicators and Performance 
Assessment,'' dated July 30, 1998.

Scope of the Public Comment Period

    The NRC staff has developed a concept for an integrated assessment 
process as presented in SECY-98-045. Additional information on the 
integrated assessment process is described in the report ``Concepts 
Developed by the Integrated Review of Assessment Process for Commercial 
Nuclear Power Plants,'' dated July 29, 1998. This report provides 
additional draft details of an integrated assessment process and 
describes how new assessment tools such as the trending methodology and 
risk-informed assessment guidance could be factored into the process.
    The Commission has provided its views on this concept, along with 
its general views on licensee performance assessment in the attached 
SRM, the Commission voting record, and the comments of the 
Commissioners. This public comment period will focus on obtaining 
industry and public comments on how the NRC should assess licensee 
performance and other potential changes to the regulatory oversight 
process.
    As part of the public comment period, two public workshops are 
tentatively scheduled to be held in September 1998. One is currently 
planned to be held at the NRC Headquarters office with the other one 
held in the vicinity of the Region III office. Additional details on 
the dates, locations, and scope of these workshops will be provided at 
a later date, as they become available.
    The NRC seeks specific public comment and feedback on the topics 
highlighted in the questions below. Commenters are not limited to, or 
obligated to address every issue discussed in the questions. In 
providing comments, please key your response to the number of the 
applicable question (e.g., ``Response to A.1.a.''). Comments should be 
as specific as possible. The use of examples is encouraged.
    Comments are requested on the following issues:

A. Regulatory Oversight Approach

    1. The NRC currently has a low threshold for initiating increased 
interaction with licensees above the core inspection program. For 
example, procedure adherence errors or program implementation 
weaknesses with low actual safety consequence may result in increased 
inspection activity in these areas. Alternatively, if these regulatory 
oversight thresholds were raised, the NRC would wait until actual 
safety significant events occurred (such as those measured by 
performance indicators) before increasing interaction with licensees.
    a. At what threshold should the NRC take action to assure the 
adequate protection of public health and safety?
    b. What is the basis for this threshold?
    2. What range and specific types of NRC actions should be taken if 
licensees exceed the regulatory thresholds discussed in Question A.1?
    3. The current regulatory oversight process focuses discretionary 
inspection resources on a selective sample of all aspects of licensee 
performance, such as human performance, procedure quality, and program 
implementation.
    a. Could an enhanced use of high level performance indicators (e.g. 
operational transients and safety system availability) reduce the need 
for discretionary inspection if particular levels of licensee 
performance are achieved?
    b. Would this approach result in a regulatory oversight process 
which is timely and comprehensive enough to assure the adequate 
protection of the public health and safety?
    4. What should the role of licensee audits, inspections, and self-
assessments be in the regulatory oversight process?
    5. Would an enhanced use by the NRC of licensee audits, 
inspections, and self-assessments (and a corresponding reduction in NRC 
discretionary inspection) result in a regulatory oversight process that 
was sufficiently independent?

B. Integrated Assessment Process

1. Objectives and Attributes
    a. The objectives developed by the staff for an integrated 
assessment process include the following: (1) Provide early warning of 
declining licensee performance and promote prompt, timely corrective 
action; (2) provide checks and balances with other processes; (3) allow 
for the integration of inspection findings and other relevant 
information; (4) focus NRC's attention on those plants with declining 
or poor performance; (5) effectively communicate assessment results to 
the licensees and the public; and (6) allow for effective resource 
allocation. What changes could be made to these objectives and why?
    b. The new integrated assessment process would not formally 
recognize superior licensee performance, nor would it include a Watch 
List. Should the NRC recognize superior licensee performance?
    c. The integrated assessment process would not provide a measure of 
how

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good licensee performance was. This was due in part to the significant 
resources involved and the lack of clear guidance against which good 
performance can be measured. Therefore, performance issues involving 
solely good or neutral licensee performance would not be included in 
the evaluation. To what extent and how should positive inspection 
findings be factored into an assessment process?
    d. The integrated assessment process would include an assessment 
report for each licensee and a public meeting with the licensee to 
review this assessment. How should the NRC's assessment results be 
communicated to the licensees and to the public?
    e. The integrated assessment process would provide several 
opportunities for the licensee and the public to be made aware of the 
issues being considered and to provide feedback and input on these 
issues and assessment results. What are the most desirable ways to 
include licensee and public input and feedback during the 
implementation of the assessment process?
2. Assessment Criteria
    a. In the integrated assessment process, a plant performance matrix 
is used to categorize performance findings into assessment areas in 
order to provide better structure for the information and to better 
communicate assessment results. What additional or alternate 
information should be used and how should it be integrated?
    b. Under the integrated assessment process, individual performance 
issues were numerically graded on the basis of safety and regulatory 
significance. As stated in the SRM for SECY-98-045 dated June 30, 1998, 
the Commission did not approve of this approach. Are there alternate 
methods by which the NRC could provide a quantitative input into the 
assessment process so that the significance of issues can be assigned 
in a scrutable way?
    c. In developing a new assessment process, it was essential that 
the results of the assessment could be clearly communicated to the 
licensees and the public. The staff chose color category ratings for 
each assessment area for the integrated assessment process. As stated 
in the SRM for SECY-98-045 dated June 30, 1998, the Commission did not 
approve of this approach. What alternate presentations could be used to 
clearly convey the results of licensee performance assessments?
3. Decision Model
    The staff developed a decision model to provide for a structured 
and predictable application of NRC actions in response to assessment 
results. Are there additional or better ways to optimize the 
scrutability and predictability of the NRC outcomes of the assessment 
process?
4. Assessment Periodicity
    The staff recommended that an annual performance assessment be 
performed for each plant to allow for a periodic assessment report and 
a public meeting to discuss the assessment results. Is there a more 
appropriate periodicity for accurately assessing changes in licensee 
performance?
5. Success Criteria
    a. The integrated assessment process was designed to produce NRC 
assessments that are more scrutable and predictable. For comparison, 
how scrutable, predictable, and objective are the current assessment 
processes?
    b. The integrated assessment process was intended to be less 
resource intensive for both the NRC and the licensee. How do the 
estimated licensee costs compare with the costs of the existing 
assessment processes?

C. Risk-Informed Assessment Guidance

    1. Effective risk management is necessary to ensure the safe 
operation of nuclear power plants. How should indications of risk-
management performance be considered in the assessment of plant safety?
    2. One aspect of a risk-informed regulatory process is that plant 
performance measures are considered commensurate with their impact on 
plant safety and risk. Are the questions presented in ``Guidance for 
Assessing the Risk Inherent in Plant Performance'' sufficient to ensure 
that inspection findings are interpreted in a risk-informed manner?
    3. Regulatory Guide 1.174, ``An Approach for Using Probabilistic 
Risk Assessment in Risk-Informed Decisions on Plant-Specific Changes to 
the Current Licensing Basis,'' presents a framework, principles, and 
staff expectations relative to regulatory decisionmaking.
    a. What role, if any, should such guidance play in risk-informed 
assessments of plant performance?
    b. What role should PRA techniques and risk metrics play in the 
assessment of plant performance?
    4. How should patterns of degrading human performance, equipment 
performance, and risk management at a nuclear power plant be factored 
into the plant performance assessment process?
    5. Are the questions raised in ``Guidance for Assessing the Risk 
Inherent in Plant Performance'' sufficient to provide a risk-informed 
assessment of plant safety that addresses the influence of human 
performance and equipment performance on plant safety?

D. Indicators

1. General
    The trending methodologies can be used as part of an integrated 
assessment process that uses both quantitative and qualitative 
information. The trending methodologies are not intended to be used in 
isolation as the only definitive identifying element in plant 
performance assessment.
    a. How should the NRC use quantitative measures of performance?
    b. What methodologies and/or performance measures would be useful 
to quantitatively monitor plant performance trends?
2. Trending Methodology
    a. The staff considered more than 20 variables during the 
development of both the trend and the regression models.
    1. Are there other variables that should be considered?
    2. Are the data for the suggested variables publicly available?
    3. Are the data for the suggested variables reported to the NRC?
    4. How frequently are the data for the suggested variables 
available (e.g., daily, weekly, quarterly, annually, etc.)?
    b. The staff considered a variety of time periods for monitoring 
plant performance during the development of the trend model. The 
proposed trend model uses a four-quarter moving average. Should a 
different time period be used?
    c. The proposed trend model uses a ``hit'' threshold that is based 
on a fixed 2-year average of one standard deviation beyond the 
quarterly industry mean for the period from July 1995 through June 
1997. Should a different threshold be used?
    d. The proposed trend model uses a discussion candidate threshold 
value of two hits. Should a different threshold be used?
3. Financial Indicators
    a. Financial indicators can be used to gain insight into licensee 
performance in conjunction with other assessment measures. They would 
not be relied upon solely to draw conclusions on licensee performance 
in an integrated assessment process. How should financial indicators be 
used in the assessment of licensee performance?
    b. Are there other financial methodology processes that will 
provide a more useful set of financial variables?

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    c. The financial variables are based on publicly available data. 
Are there other financial data that could be made available that would 
be more useful?

E. Additional Comments

    In addition to the previously mentioned issues, commenters are 
invited to provide any other views on the NRC assessment process that 
could assist the NRC in improving its effectiveness.

    Dated at Rockville, MD, this 3rd day of August 1998.

    For the Nuclear Regulatory Commission.
Michael R. Johnson,
Acting Chief, Inspection Program Branch, Division of Inspection & 
Support Programs, Office of Nuclear Reactor Regulation.

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[FR Doc. 98-21168 Filed 8-6-98; 8:45 am]
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