[Federal Register Volume 72, Number 161 (Tuesday, August 21, 2007)]
[Notices]
[Pages 46668-46670]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16463]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-346, 50-440, 50-334, and 50-412; License Nos. NPF-3, 
NPF-58, DPR-66 and NPF-73; EA 07-199]


In the Matter of FirstEnergy Nuclear Operating Company; Davis-
Besse Nuclear Power Station, Unit 1; Beaver Valley Power Station, Units 
1 and 2; Confirmatory Order (Effective Immediately)

I

    FirstEnergy Nuclear Operating Company (FENOC or licensee) is the 
holder of four NRC Facility Operating Licenses issued by the U.S. 
Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 CFR 
Part 50, which authorizes the operation of the specifically-named 
facilities in accordance with the conditions specified in each license. 
License No. NPF-3 was issued on April 22, 1977, to operate the Davis-
Besse Nuclear Power Station, Unit No. 1. License No. NPF-58 was issued 
on November 13, 1986, to operate the Perry Nuclear Power Plant, Unit 
No. 1. License Nos. DPR-66 and NPF-73 to operate the Beaver Valley 
Power Station, Units 1 and 2, were issued on July 2, 1976, and August 
14, 1987, respectively. Davis-Besse is located near Toledo, Ohio; Perry 
is located near Painesville, Ohio; and Beaver Valley is located near 
McCandless, Pennsylvania.

II

    The events leading up to this Confirmatory Order date back several 
years. In 2005, the NRC took enforcement action against FENOC, imposing 
a $5,450,000 civil penalty for regulatory violations associated with 
the 2002 reactor pressure vessel head degradation event at the Davis-
Besse Plant. In response to that event, FENOC performed root cause 
evaluations. Among other things, FENOC's root cause reports determined 
that the reactor pressure vessel head degradation was the result of 
ongoing and undetected Control Rod Drive Mechanism nozzle leakage that 
had lasted more than four years.
    In February 2007, the licensee informed the NRC that Davis-Besse 
was initiating a condition report based on information contained in a 
letter received from Nuclear Electric Insurance Limited (NEIL). The 
NEIL letter referenced a new analysis that FENOC had commissioned of 
the Davis-Besse reactor pressure vessel head degradation event. The new 
analysis, submitted to NEIL as expert testimony in an insurance 
arbitration on December 18, 2006, was performed by Exponent Failure 
Analysis Associates and Altran Solutions Corporation (Exponent) and 
concluded that the time period between the beginning of substantial 
leakage from the reactor pressure vessel head nozzle and the 
development of the large cavity next to the nozzle may have been as 
short as four months.
    On April 2, 2007, after several conference calls with the licensee 
and Exponent to assess whether the Exponent Report raised any immediate 
safety concerns (it did not), the NRC requested FENOC to respond in 
writing to four questions regarding information and conclusions 
presented in the Exponent Report. Among other things, the NRC's request 
for information asked FENOC to ``discuss any differences between the 
Exponent Report information and conclusions drawn therein, and 
information previously provided in the Root Cause Analysis Report and 
Licensee Event Report for the Davis-Besse reactor pressure vessel head 
wastage event.''
    In its May 2, 2007, response to the NRC's request for information, 
FENOC stated that it ``ha[d] not specifically evaluated all of the 
assumptions used by Exponent'' but nevertheless concluded that the 
Exponent Report ``more accurately characterizes the time line of the 
reactor head degradation event based on [Exponent's] use of more 
recently available test data in conjunction with detailed analytical 
modeling.'' FENOC's response did not include a detailed discussion of 
the differences between the operational experience data and the 
Exponent Report assumptions.
    Consequently, on May 14, 2007, the NRC issued FENOC a Demand for 
Information (DFI) pursuant to 10 CFR 2.204 to determine whether further 
enforcement action was necessary to provide reasonable assurance that 
FENOC would continue to operate its licensed facilities in accordance 
with the terms of its licenses and the Commission's regulations. The 
DFI required FENOC to provide a detailed discussion of the process used 
to determine if the Exponent Report assumptions, analyses, conclusions, 
or other related information should have been reported to the NRC in a 
more prompt manner; a detailed discussion of the differences in 
assumptions, analyses, conclusions, and other related information of 
the Exponent Report and technical and programmatic root cause reports 
developed in 2002; and a position on whether FENOC endorsed the 
conclusions of a second contractor report prepared in connection with 
the NEIL insurance arbitration.
    FENOC responded to the DFI in writing on June 13, 2007. In that 
response, FENOC stated that its May 2, 2007, response ``was primarily 
focused on the detailed analytical studies that form the basis for the 
Exponent Report's time line for the crack growth and wastage phenomenon 
* * * and was not a comprehensive review of the differences between our 
root cause reports and the Exponent Report.'' According to the June 13 
response, FENOC ``continues to believe'' that its earlier root cause 
reports ``provide a comprehensive explanation of the progression and 
causal factors of the Davis-Besse reactor pressure vessel head 
degradation event and, hence, contain the most appropriate information 
to have used in development and implementation of corrective actions to 
prevent recurrence.'' FENOC's June 13, 2007, response further 
acknowledged that it ``should have communicated more effectively 
internally and more promptly with the NRC'' about the Exponent Report, 
and included commitments to implement corrective actions in those 
areas.
    On June 27, 2007, the NRC held a public meeting with FENOC to 
discuss the DFI response. During the meeting, the NRC questioned the 
corporate safety culture at FirstEnergy and whether FENOC had changed 
its position

[[Page 46669]]

regarding the root causes of the Davis-Besse reactor pressure vessel 
head degradation event. The NRC further questioned why FENOC had not 
immediately shared the Exponent Report with the NRC, given the 
importance of its subject matter and potential safety significance. The 
NRC also sought clarification regarding the licensee's proposed 
corrective actions and FENOC agreed to provide clarification in a 
supplemental DFI response.
    On July 16, 2007, FENOC provided the NRC its supplemental response 
to the DFI, which elaborated on the commitments and corrective actions 
discussed at the public meeting. In general, FENOC's commitments and 
corrective actions are designed to prevent recurrence of the events 
that culminated in the issuance of the NRC's Demand for Information. 
Specifically, FENOC's commitments are designed to ensure that 
information of potential regulatory significance is recognized by FENOC 
and FirstEnergy employees and communicated to the NRC in a timely and 
effective manner.
    In the short term, FENOC has implemented interim corrective actions 
to prevent recurrence of the events that culminated in the issuance of 
the NRC's Demand for Information. Specifically, FENOC has developed 
criteria to be used in determining whether documents developed in 
support of commercial matters, including the pending insurance 
arbitration with NEIL, contain information of potential regulatory 
interest to the NRC. FENOC's interim actions will remain in place until 
the procedural changes required by this Confirmatory Order are 
implemented.

III

    On August 14, 2007, the Licensee consented to the issuance of this 
Order to confirm the commitments described in section IV below. The 
Licensee further agreed that this Order is effective upon issuance and 
has waived its right to a hearing.
    I find that the commitments set forth in Section IV are acceptable 
and necessary and conclude that with these commitments the public 
health and safety are reasonably assured. In view of the foregoing, I 
have determined that public health, safety, and interest require that 
the Licensee's commitments be confirmed by this Order. Based on the 
above and the Licensee's consent, this Order is immediately effective 
upon issuance.

IV

    Accordingly, pursuant to sections 103, 104b, 161b, 161i, 161o, 182 
and 186 of the Atomic Energy Act of 1954, as amended, and the 
Commission's regulations in 10 CFR 2.202, it is hereby ordered, 
effective immediately, that the licensee shall implement the following:
    1. The Licensee shall conduct regulatory sensitivity training for 
selected FENOC and non-FENOC FirstEnergy employees to ensure those 
employees identify and communicate information that has the potential 
for regulatory impact either at FENOC sites or within the nuclear 
industry to the NRC. At least 30 days prior to conducting the training, 
the Licensee shall submit by letter to the Director, NRC Office of 
Enforcement, a description of (1) the population to be trained, (2) the 
planned training methodology and materials, and (3) the training 
objectives. The Licensee shall complete its regulatory sensitivity 
training no later than November 30, 2007, and within 60 days following 
completion shall inform the Director, NRC Office of Enforcement, by 
letter.
    2. The Licensee shall conduct effectiveness reviews to determine if 
an appropriate level of regulatory sensitivity is evident among 
FirstEnergy employees including those who received regulatory 
sensitivity training. The first effectiveness review shall be conducted 
in January 2008 by an external consultant. A follow-up effectiveness 
review shall be conducted in January 2009. At least 45 days prior to 
starting each external effectiveness review, the Licensee shall inform, 
by letter, the Director, NRC Office of Enforcement, of the identity of 
its external consultant, the qualifications of its external consultant, 
and the scope and depth of its plan for assessing effectiveness. Within 
60 days following completion of each external effectiveness review, the 
Licensee shall inform, by letter, the Director, NRC Office of 
Enforcement, of a summary of the results of the review and a 
description of any actions taken or planned in response to those 
results.
    3. The Licensee shall develop a formal process to review technical 
reports prepared as part of a commercial matter. The process shall 
provide criteria for the Licensee to use in determining whether a 
report has the potential for regulatory implications, or impact on 
nuclear safety either at FENOC sites or within the nuclear industry. 
The Licensee shall implement the process no later than December 14, 
2007, and within 30 days following implementation shall submit a 
description of the process by letter to the Director, NRC Office of 
Enforcement.
    4. The Licensee shall assess its Regulatory Communications policy 
and make process changes to its NRC Correspondence procedure to ensure 
specific questions are asked during the process relative to the 
experience gained from efforts to respond to the NRC's May 14, 2007, 
Demand for Information. The Licensee shall complete any revisions to 
its NRC Correspondence procedure or Regulatory Communications policy no 
later than December 14, 2007, and within 30 days following completion 
shall submit a description of the policy and procedure changes, if any, 
or the basis for the determination that such revisions were not 
necessary, by letter to the Director, NRC Office of Enforcement.
    5. The Licensee shall provide an Operating Experience (OE) document 
to the nuclear industry through the industry's established OE process. 
The document shall discuss the issues surrounding the NRC's May 14, 
2007, Demand for Information, including the review of technical reports 
prepared as part of a commercial matter. The OE document shall be 
provided to the nuclear industry, and to the Director, NRC Office of 
Enforcement, within 30 days of the date of this Order.
    6. The Licensee shall complete a root cause evaluation of the 
events that culminated in the issuance of the NRC's May 14, 2007, 
Demand for Information. The licensee shall make the root cause 
evaluation available for review by NRC inspectors and summarize the 
results of the evaluation in a letter to the Director, NRC Office of 
Enforcement, no later than December 14, 2007. The Licensee's letter to 
the NRC shall document the results of an assessment as to whether the 
results of the root cause evaluation reflect a need for any corrective 
actions different from or in addition to the requirements of this 
Confirmatory Order.
    7. The Licensee shall maintain the interim corrective actions, 
discussed, in part, in Section II of this Order and implemented as a 
result of the events leading up to the issuance of the NRC's May 14, 
2007, DFI, until the procedural changes described in paragraphs 3 and 4 
of Section IV of this Confirmatory Order are implemented.
    The Director, Office of Enforcement, may, in writing, relax or 
rescind any of the above conditions upon demonstration by the Licensee 
of good cause.

V

    Any person adversely affected by this Confirmatory Order, other 
than the Licensee, may request a hearing within 20 days of its 
issuance. Where good cause is shown, consideration will be given to 
extending the time to request a

[[Page 46670]]

hearing. A request for extension of time in which to request a hearing 
must be made in writing to the Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555, and must include a 
statement of good cause for the extension. Any request for a hearing 
shall be submitted to the Secretary, U.S. Nuclear Regulatory 
commission, ATTN: Chief, Rulemakings and Adjudications Staff, 
Washington, DC 20555. Copies of the hearing request shall also be sent 
to the Director, Office of Enforcement, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555, to the Assistant General Counsel for 
Materials Litigation and Enforcement at the same address, to the 
Regional Administrator for NRC Region III, 801 Warrenville Road, Lisle, 
IL 60532-4351, to the Regional Administrator for NRC Region I, 475 
Allendale Road, King of Prussia, PA 19406-1415, and to the Licensee. It 
is requested that requests for hearing be transmitted to the Secretary 
of the Commission either by means of facsimile transmission to 301-415-
1101 or by e-mail to [email protected] and also to the Office of 
the General Counsel either by means of facsimile transmission to 301-
415-3725 or by e-mail to [email protected]. If a person other than 
the licensee requests a hearing, that person shall set forth with 
particularity the manner in which his interest is adversely affected by 
this Order and shall address the criteria set forth in 10 CFR 2.309(d) 
and (f).
    If a hearing is requested by a person whose interest is adversely 
affected, the Commission will issue an Order designating the time and 
place of any hearing. If a hearing is held, the issue to be considered 
at such hearing shall be whether this Confirmatory Order should be 
sustained. In the absence of any request for hearing, or written 
approval of an extension of time in which to request a hearing, the 
provisions specified in section IV above shall be final 20 days from 
the date of this Order without further order or proceedings. If an 
extension of time for requesting a hearing has been approved, the 
provisions specified in section IV shall be final when the extension 
expires if a hearing request has not been received. A request for 
hearing shall not stay the immediate effectiveness of this order.

    Dated this 15th day of August 2007.

    For the Nuclear Regulatory Commission.
Cynthia A. Carpenter,
Director, Office of Enforcement.
[FR Doc. E7-16463 Filed 8-20-07; 8:45 am]
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