[Federal Register Volume 74, Number 170 (Thursday, September 3, 2009)]
[Pages 45657-45660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21278]




Notice of Availability of Revised Fuel Cycle Oversight Process

AGENCY: Nuclear Regulatory Commission.

ACTION: Request for public comment on revision of the NRC's fuel cycle 
oversight program.


    The Nuclear Regulatory Commission (NRC) is proposing significant 
revisions to its processes for overseeing the safety and security of 
fuel cycle facilities. The NRC plans to develop a revised oversight 
process for fuel cycle facilities that is more risk-informed, and 
performance-based, resulting in more objective, predictable, and 
transparent results of licensee or certificate holder assessments. 
(This notice will use ``licensees'' throughout, but in doing so the 
intent is also to include ``certificate holders.'') Current oversight 
consists mainly of inspections, enforcement and periodic assessments 
based on inspection findings. NRC staff intends that any revised 
oversight would not establish any new regulatory requirements. Rather, 
revised oversight would improve inspection and assessment so that NRC 
conclusions would be more closely based on risk and more understandable 
to members of the public. Revised oversight could potentially add 
objective measures of performance, called performance indicators, with 
criteria for measuring acceptable performance. However, development of 
performance indicators may not be part of the initial revision to the 
oversight process. Inspections would focus in areas of highest risk 
that are not well-measured by performance indicators and on validating 
performance indicator information. Assessments would be based on more 
objective criteria. Supplemental inspections (those above and beyond 
the number and type of inspections normal for a well-performing plant) 
of licensees whose performance shows indications of decline, would also 
be based on objective criteria. These principles are currently applied 
by the NRC in the oversight of power reactor safety and security and is 
outlined in ``Reactor Oversight Process,'' NUREG-1649, (Agencywide 
Documents Access and Management System [ADAMS] Accession No. 
    Since 1999, the NRC has undertaken several initiatives to examine 
and improve the NRC's oversight process for fuel cycle facilities, 
including those licensed or certified under Title 10 of the Code of 
Federal Regulations (10 CFR) Part 40 (Domestic Licensing of Source 
Material), Part 70 (Domestic Licensing of Special Nuclear Material), 
and Part 76 (Certification of Gaseous Diffusion Plants). Although 
previous efforts resulted in some revisions to inspection and 
assessment procedures, current NRC oversight could be improved by more 
fully incorporating into inspection and assessment the risk insights of 
licensees' integrated safety analyses, where applicable (the 
requirement to perform an integrated safety analysis apply only to 10 
CFR Part 70 licensees). Integrated safety analyses establish safety 
controls based on analyses of potential hazards at a facility.

[[Page 45658]]

    To meet the objective of developing an oversight process with an 
improved degree of transparency, predictability, objectivity and 
consistency, using risk-informed and performance-based tools, the staff 
is undertaking a comprehensive effort to develop a Revised Fuel Cycle 
Oversight Process (RFCOP). The staff's efforts will be consistent with 
the recent guidance in this area, notably the guidance provided in the 
Staff Requirements Memoranda dated April 3, 2008, and February 17, 2009 
(Agencywide Documents Access and Management System [ADAMS] Accession 
Nos. ML080940439 and ML090490032), and will be responsive to 
recommendations in the Office of Inspector General report OIG 07-A-06 
(ADAMS ML070100282).

DATES: The comment period expires November 2, 2009. 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: You may submit comments by any one of the following methods. 
Please include Docket ID NRC-2009-0386 in the subject line of your 
comments. Comments submitted in writing or electronic format will be 
posted on the NRC Web site and on the Federal rulemaking Web site 
Regulations.gov. Because your comments will not be edited to remove any 
identifying information, the NRC cautions you against including any 
information in your submission that you do not want to be publically 
    The NRC requests that any party soliciting or aggregating comments 
received from other persons for submission to the NRC inform those 
persons that the NRC will not edit their comments to remove any 
identifying or contact information, and therefore they should not 
include any information in their comments that they do not want 
publically disclosed.
    Federal Rulemaking Web site: Go to http://www.regulations.gov and 
search for documents filed under Docket ID NRC-2009-0386. Address 
questions about NRC dockets to Carol Gallagher 301-492-3668; e-mail 
[email protected].
    Mail comments to: Michael T. Lesar, Chief, Rules and Directives 
Branch (RDB), Division of Administrative Services, Office of 
Administration, Mail Stop: TWB-05-B10M, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, or by fax to RBD at (301) 492-
    You can access publically available documents related to this 
notice using the following methods:
    NRC's Public Document Room (PDR): The public may examine and have 
copied for a fee publically available documents at the NRC's PDR, 
Public File Area 01 F21, One White Flint North, 11555 Rockville Pike, 
Rockville, Maryland.
    NRC's Agencywide Documents Access and Management System (ADAMS): 
Publically available documents created or received at the NRC are 
available electronically at the NRC's Electronic Reading Room at http://www.nrc.gov/reading room-rm/adams.html. From this page, the public can 
gain entry into ADAMS, which provides text and image files of NRC's 
public documents. If you do not have access to ADAMS or if there are 
problems in accessing the documents in ADAMS, contact the NRC's PDR 
reference staff at 1-800-397-4209, 301-415-4737, or by e-mail to 
[email protected].
    Members of the public interested in obtaining additional 
information in regard to the NRC's Revised Fuel Cycle Oversight Process 
will be able to do so by periodically visiting http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=NRC-2009-0386. The NRC expects to continue publishing documents about the 
Revised Fuel Cycle Oversight Process using the regulations.gov Web 
site, in addition to making them available electronically in the Public 
Document Room (PDR), and the Electronic Document Room using the 
Agencywide Document Access and Management System (ADAMS), http://www.nrc.gov/reading room-rm/adams.html.

FOR FURTHER INFORMATION CONTACT: Russell Gibbs, Team Leader, Division 
of Fuel Facility Inspection, Region II, U.S. Nuclear Regulatory 
Commission, Washington, DC 20005-0001. Telephone: (404) 562-4806 or 
(301) 492-3120; Fax (404) 562-4955 or (301) 492-3363; E-mail: 
[email protected].
    The NRC's mission is to license and regulate the civilian use of 
byproduct, source, and special nuclear materials to ensure adequate 
protection of public health and safety, promote the common defense and 
security, and protect the environment.
    NRC's current fuel cycle facility oversight program relies 
primarily on inspections at each fuel cycle facility. Inspections 
review licensee activities in the areas of nuclear criticality, 
chemical process, fire, and radiation safety, emergency preparedness, 
physical security, information security, and material control and 
accounting. NRC's inspection results are documented in inspection 
    Over the years, NRC staff has periodically changed the fuel cycle 
oversight process to make improvements. The NRC plans to build on these 
previous actions by revising the oversight program to better use the 
risk insights from integrated safety analyses and to develop more 
objective assessment and decision tools. Integrated safety analyses are 
required by NRC regulations to be done by Part 70 licensees and 
applicants for a Part 70 license. The analyses evaluate what could go 
wrong at a facility and establish the basis for safety controls called 
items relied on for safety (IROFS).
    In 1999, the success in the initial implementation of the Reactor 
Oversight Process (ROP) prompted the NRC staff to evaluate whether the 
fuel cycle facility oversight process could be improved using elements 
similar to those in the ROP. Stakeholders (licensees, public interest 
groups, NRC staff, interested members of the general public, etc.) were 
actively involved in the development of a revised oversight process. 
After approximately 2 years, the NRC decided to defer further work on 
the revised oversight process until after licensees completed the 
integrated safety analyses and the NRC reviewed them. The NRC staff 
also evaluated the feasibility of performance indicators for fuel cycle 
facilities, but subsequently ended that work in 2006 at the direction 
of the Commission. In 2007, the Office of Inspector General (OIG) 
issued an audit report recommending that the NRC develop a fuel cycle 
oversight process that is consistent with a structured process, similar 
to the ROP. In April 2008, the Commission directed the staff to make 
the fuel cycle performance review process more transparent and risk-
informed and to consider performance indicators or metrics leveraging 
the risk insights of ISAs.
    In March 2009, a Steering Committee was established to provide 
overall leadership to revise the fuel cycle oversight process. The 
Steering Committee then established a team of NRC staff members with a 
broad range of experiences to develop a revised oversight process while 
working closely with both internal and external stakeholders.
    The revised oversight process would use the NRC's Strategic Goals 
as its foundation. The NRC's Strategic Goals are to: (1) Ensure 
adequate protection of public health and safety and the

[[Page 45659]]

environment; (2) and ensure adequate protection in the secure use and 
management of radioactive materials.
    The staff intends to use risk-informed methods to assess facility 
performance. In a ``risk-informed'' approach to regulatory decision 
making, risk insights are considered together with other factors to 
establish a process that better focuses both licensee and regulatory 
attention on design and operational issues commensurate with their 
importance to safety and security. The NRC plans to produce a 
predictable, graded process that will help to focus NRC oversight based 
on both the most risk significant aspects of plant design and operation 
as well as licensee performance. NRC staff intends that the revised 
oversight process more fully use the risk insights from licensees' 
integrated safety analyses, where applicable. The NRC intends that the 
revised oversight will use objective measures and metrics for NRC 
assessments of licensee performance and allow the NRC to make timely 
decisions on what kind of inspections will be conducted beyond a basic 
set of inspections. The revised program would include a baseline level 
of oversight that would be carried out for all licensees. The 
inspection program may be supplemented by performance indicator 
information provided by licensees voluntarily.
    This program, when fully implemented, would apply to uranium 
enrichment plants, high- and low-enriched uranium and plutonium 
processing plants, and uranium hexafluoride processing facilities. 
Uranium mill facilities have a separate inspection program.
    The NRC staff is considering an oversight framework that would 
include strategic performance areas (safety and security) supported by 
cornerstones. In this framework, licensee performance in each 
cornerstone may be assessed using a combination of performance 
indicators and the results of a baseline inspection program as 
determined by a defined significance determination process. Both 
performance indicators and the results of the inspection program would 
have risk-informed thresholds, and crossing either a performance 
indicator or an inspection threshold would have the same meaning in the 
assessment of each cornerstone. Licensee and NRC action for a given 
level of performance would be prescribed by an Action Matrix. The 
entire process would be supported by a robust licensee corrective 
action program at each licensee facility.
    Although the NRC believes that enhancements to fuel cycle oversight 
are needed, the NRC is confident that its current oversight program is 
adequate for the NRC to conclude whether or not licensees are operating 
safely and securely.

Scope of Public Comment Period

    The NRC seeks public comment and feedback on the specific topics 
highlighted in the questions below. Commenters are not limited to and 
are not obligated to address every issue discussed in the questions. In 
providing comments, each commenter's response should reference the 
number of the applicable question (e.g., ``Response to A.1.''). 
Comments should be as specific as possible and should indicate why a 
commenter supports or does not support an aspect of this plan. The use 
of examples is encouraged.
    At this time comments are requested on the following issues:

A. The Regulatory Oversight Framework, Cornerstones, Significance 
Determination, Action Matrix, Performance Indicators, and Their 

1. Graphic descriptions of an Oversight Framework and a Fuel Cycle 
Facility Oversight Process are available in ADAMS (ML091970084)
    These graphically describe how the RFCOP would: (1) Facilitate 
greater regulatory attention to facilities with performance problems 
while maintaining a baseline level of oversight on facilities that 
perform well; (2) give industry and public timely and understandable 
assessments of facility performance; (3) allow all stakeholders to 
understand what the regulatory response to issues and indicators will 
be; and (4) focus NRC and licensee resources on those aspects of 
performance having the greatest impact on safety and security.
    Are there any other significant areas that need to be addressed for 
the NRC to meet its mission of ensuring that fuel cycle facilities are 
operated in a manner that provides adequate protection of public health 
and safety and the environment, and protects against radiological 
sabotage and the theft or diversion of special nuclear materials?
2. Cornerstones
    The cornerstones being considered for these facilities include 
nuclear criticality, radiological, and chemical safety, emergency 
preparedness, physical security, information security and material 
control and accounting. Information Security will not be incorporated 
into the revised oversight at this time. Fire safety would be addressed 
through its impacts on other safety cornerstones such as criticality, 
radiological and chemical safety. These cornerstones are being 
considered because staff believes that they best represent the 
requirements that are necessary to meet the Agency's mission.
    Are there other important aspects of fuel cycle facility 
performance that would not otherwise be captured by these cornerstones?
3. Significance Determination Process
    When a licensee performance deficiency is identified, it would be 
assessed using a defined significance determination process which would 
use risk insights to evaluate the significance of the performance 
deficiency against defined thresholds. The risk-significance of the 
performance deficiency would be determined before any NRC action, 
beyond baseline inspection and oversight, would be taken. If it is 
determined that the performance deficiency is not risk-significant, 
each facility would be expected to disposition the issue using its own 
corrective action program without additional oversight by the NRC. If 
it is determined to be risk-significant, the NRC's response would be 
prescribed using an Action Matrix.
    Are there other important aspects of significance determination 
that should be considered by NRC?
4. Performance Indicators and Associated Thresholds
    Performance indicators may not be developed in the initial revision 
to the fuel cycle oversight process. However, the NRC staff plans to 
interact with industry and other stakeholders to assess development of 
indicators to measure important attributes that will help the NRC 
ensure that the facility is operating in a manner that protects public 
health and safety and ensures security. The performance indicators, 
which would be submitted voluntarily by licensees on a periodic basis, 
would provide a sample of objective data on which to assess licensee 
performance. The performance indicators are intended to directly relate 
to the cornerstones and be significant, high level indicators of 
facility performance that, when thresholds are crossed, reveal adverse 
trends that warrant increased regulatory oversight.
    Would performance indicators, along with inspection findings, be 
effective in determining levels of licensee performance? What should be 
considered in determining performance indicators and their thresholds? 
How should the performance indicators be used?

[[Page 45660]]

5. Action Matrix
    An Action Matrix would be developed to provide guidance to ensure 
consistent regulatory response for a given level of licensee 
performance. The matrix would be categorized into four areas (meeting 
between NRC and Licensee Senior Management, licensee action, NRC 
inspection, and regulatory action) and would be graded across a range 
of licensee performance. The NRC's decision to take an action beyond 
baseline inspection and oversight would be a direct result of 
performance indicators, if available, or inspection findings that 
crossed defined thresholds. If licensee performance declines, more 
significant actions would be considered.
    What should the NRC consider in the development of an Action 
Matrix? Would the use of the Action Matrix and underlying decision 
logic be an appropriate approach to NRC and licensee action?
6. Other Comments
    Are there any other comments related to the oversight framework, 
cornerstones, performance indicators, or thresholds?

B. Risk-Informed Baseline Inspections

    The baseline inspection program would be based on a set of 
inspectable areas that, in conjunction with the performance indicators, 
if available, would provide enough information for the NRC to determine 
whether the objectives of each cornerstone of safety or security are 
being met. This baseline inspection program would be the minimum 
inspection at each facility. The baseline inspection could be different 
for different types of facilities that have different potential risks 
(for example low enriched uranium processing versus high enriched 
uranium processing).
    Are there any other factors that should be considered in defining 
the baseline inspection program? Are there any other comments related 
to the baseline inspection program?

C. Assessment Process

1. Frequency of Assessments
    The revised oversight process would provide for continuous, semi-
annual, annual, and biennial reviews of licensee performance. The 
resulting assessment would be based on licensee performance, as 
measured by performance indicators, if available, and inspection 
program results, as compared against an Action Matrix. The semiannual 
and annual assessments would also include inspection planning.
    Would this frequency of conducting assessments be appropriate to 
maintain a current assessment of licensee performance?
2. Communicating Assessment Results
    The revised oversight would include several methods for 
communicating information to licensees and the public. First, the 
information being assessed (performance indicator and inspection 
results) would be made public as the information becomes available. 
Second, the NRC would send each licensee a letter at a defined 
frequency (e.g., every six months) that provides the NRC's assessment 
of licensee performance and describes the NRC's oversight of the 
facility. In addition, the letter would outline any changes to the 
NRC's planned inspections for the upcoming 18 months. Third, the NRC 
would hold an annual public meeting with each licensee to discuss its 
    Would these methods of communication provide sufficient opportunity 
for licensees and the public to gain an understanding of performance 
and interact with the NRC?
3. Other Comments
    Are there any other comments related to the proposed assessment 

D. Implementation

1. Transition Plan
    A transition plan that identifies important activities needed to 
complete and implement the potential processes would have to be 
    Are there major activities that if not accomplished could prevent 
successful implementation of the potential processes?
2. Other Comments
    Are there any other comments related to implementing the new 

E. Additional Comments

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

    Dated at Rockville, Maryland this 21st day of August 2009.

    For the Nuclear Regulatory Commission.

Marissa G. Bailey,
Director, Special Projects and Technical Support Directorate, Division 
of Fuel Cycle Safety and Safeguards, Office of Nuclear Material Safety 
and Safeguards.
[FR Doc. E9-21278 Filed 9-2-09; 8:45 am]