Nuclear Energy: NRC Has Made Progress in Implementing Its Reactor
Oversight and Licensing Processes but Continues to Face 	 
Challenges (03-OCT-07, GAO-08-114T).				 
                                                                 
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. 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-114T					        
    ACCNO:   A77028						        
  TITLE:     Nuclear Energy: NRC Has Made Progress in Implementing Its
Reactor Oversight and Licensing Processes but Continues to Face  
Challenges							 
     DATE:   10/03/2007 
  SUBJECT:   Independent regulatory commissions 		 
	     Inspection 					 
	     Licenses						 
	     Nuclear facilities 				 
	     Nuclear facility safety				 
	     Nuclear reactors					 
	     Occupational safety				 
	     Performance measures				 
	     Physical security					 
	     Safety regulation					 
	     Safety standards					 
	     Government agency oversight			 
	     NRC Reactor Oversight Process			 

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GAO-08-114T

   

     * [1]Background
     * [2]NRC Uses Various Tools and Takes a Risk-Informed and Graded
     * [3]The ROP Has Identified Numerous Problems at Nuclear Power Fa
     * [4]NRC Continues to Make Improvements to Its ROP in Key Areas
     * [5]NRC Has Implemented Many Actions to Prepare Its Workforce fo
     * [6]NRC Has Significantly Revised Its Overall Regulatory Framewo
     * [7]Contact and Acknowledgments

          * [8]Order by Mail or Phone

Testimony

Before the Subcommittee on Clean Air and Nuclear Safety, Committee on
Environment and Public Works, U.S. Senate

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EDT

Wednesday, October 3, 2007

NUCLEAR ENERGY

NRC Has Made Progress in Implementing Its Reactor Oversight and Licensing
Processes but Continues to Face Challenges

Statement of Mark Gaffigan, Acting Director
Natural Resources and Environment

GAO-08-114T

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

^1GAO, Nuclear Regulatory Commission: Oversight of Nuclear Power Plant
Safety Has Improved, but Refinements Are Needed, [9]GAO-06-1029
(Washington, D.C.: Sept. 27, 2006).

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.

^2GAO, Nuclear Energy: NRC's Workforce and Processes for New Reactor
Licensing Are Generally in Place, but Uncertainties Remain as Industry
Begins to Submit Applications, [10]GAO-07-1129 (Washington, D.C.: Sept.
21, 2007).

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.

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.

^3GAO, Nuclear Regulation: NRC Needs to More Aggressively and
Comprehensively Resolve Issues Related to the Davis-Besse Nuclear Power
Plant's Shutdown, [11]GAO-04-415 (Washington, D.C.: May 17, 2004).

^4While 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.

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.

^5NRC 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.

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           When NRC inspectors identify a finding they         
determination process  consider to be more than minor,^a 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           When NRC issues one or more greater-than-green      
inspections            inspection findings for a reactor unit or facility, 
                          it conducts supplemental inspections.^b 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: 
                                                                              
                             o 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.       
                             o 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.                    
                             o 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  As part of its inspection process, NRC evaluates    
or issues              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.^c 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 At the end of each 6-month period, NRC issues an    
public meetings        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.

aNRC 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.

bSupplemental inspections are also conducted for greater-than-green
performance indicators.

cThere 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:

           o 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.

           o 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.

           o 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.

           o 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:

           o 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.

           o 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.

           o 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.
			  
			  Contact and Acknowledgments

           For further information about this testimony, please contact Mark
           Gaffigan, at (202) 512-3841 or by e-mail at [email protected].
           Richard Cheston, Assistant Director; Sarah J. Lynch; Alyssa M.
           Hundrup; and David Stikkers made key contributions to this
           testimony.
			  
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For more information, contact Mark Gaffigan at (202) 512-3841 or
[email protected].

Highlights of [19]GAO-08-114T , a testimony before the Subcommittee on
Clean Air and Nuclear Safety, Committee on Environment and Public Works,
U.S. Senate

October 3, 2007

NUCLEAR ENERGY

NRC Has Made Progress in Implementing Its Reactor Oversight and Licensing
Processes but Continues to Face Challenges

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.

[20]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.

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.

References

Visible links
9. ://www.gao.gov/cgi-bin/getrpt?GAO-06-1029
  10. http://www.gao.gov/cgi-bin/getrpt?GAO-07-1129
  11. http://www.gao.gov/cgi-bin/getrpt?GAO-04-415
  12. http://www.gao.gov/
  13. http://www.gao.gov/
  14. http://www.gao.gov/fraudnet/fraudnet.htm
  15. mailto:[email protected]
  16. mailto:[email protected]
  17. mailto:[email protected]
  18. http://www.gao.gov/cgi-bin/getrpt?GAO-08-114T
  19. http://www.gao.gov/cgi-bin/getrpt?GAO-08-114T
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