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Materials and Metallurgy - December 1, 1999

                       UNITED STATES OF AMERICA
                     NUCLEAR REGULATORY COMMISSION
               ADVISORY COMMITTEE ON REACTOR SAFEGUARDS
                                  ***
                  MEETING:  MATERIALS AND METALLURGY
     
     
                        U.S. NRC
                        Two White Flint North, Room T2-B3
                        11545 Rockville Pike
                        Rockville, MD
                        Wednesday, December 1, 1999
     
         The subcommittee met, pursuant to notice, at 8:05 a.m.
     
     MEMBERS PRESENT:
         WILLIAM SHACK, Chairman, ACRS
         JACK SIEBER, Member, ACRS
         THOMAS KRESS, Member, ACRS
         ROBERT UHRIG, Member, ACRS
         JOHN BARTON, Member, ACRS
         MARIO BONACA, Member, ACRS
         DANA POWERS, Member, ACRS
         ROBERT SEALE, Member, ACRS.                         P R O C E E D I N G S
                                                      [8:05 a.m.]
         CHAIRMAN SHACK:  The meeting will now come to order.  This
     is a meeting of the ACRS Subcommittee on Materials and Metallurgy.  I am
     Dr. William Shack, Chairman of the Subcommittee meeting.
         ACRS members in attendance are -- well, I see Jack Sieber,
     Tom Kress, Bob Uhrig, and John Barton --
         DR. KRESS:  Bob Mario's here.
         CHAIRMAN SHACK:  Mario Bonaca, and Dana Powers are coming.
         DR. KRESS:  Dana's here.  Rob Seale's probably coming later
     too.
         CHAIRMAN SHACK:  Okay.
         The purpose of this meeting is to review the Staff's
     proposed revision to 10 C.F.R. 50.55a, Codes and Standards.  It
     eliminates the requirement to update in-service inspection and
     in-service testing programs to the latest American Society for
     Mechanical Engineers code edition every 120 months.  The Subcommittee
     will gather information, analyze relevant issues and facts, and
     formulate pr4oposed positions and actions, as appropriate for
     deliberation by the full Committee.  Mr. El-Zeftawy is the cognizant
     ACRS staff engineer for this meeting.
         The rules for participation in today's meeting have been
     announced as part of the notice of this meeting previously published in
     the Federal Register on November 16, 1999.
         A transcript of this meeting is being kept, and will be made
     available as stated in the Federal Register notice.  It is requested
     that speakers first identify themselves and speak with sufficient
     clarity and volume so that they can be readily heard.
         We have received no written comments or requests for time to
     make oral statements from members of the public.
         I believe Dick Wessman wants to start with a few
     introductory remarks before Tom Scarbrough from the Staff begins.
         MR. WESSMANN:  Good morning.  Thank you, Dr. Shack.  My name
     is Dick Wessman.  I'm the Deputy Director of the Division of
     Engineering.  With me here at the table is Gene Imbro, who's Chief of
     the Mechanical Engineering Branch.
         I feel kind of bad -- I'm speaking to the backs of all three
     of you.  I should probably have snuck around to the other table.  I just
     wanted to say just a few words before turning it over to Tom Scarbrough,
     who has had the lead for the work on our rule making activity, just to
     kind of set the framework for our discussion and point the direction in
     which we think we're headed.
         As you know, there's been the long-standing requirement for
     licensees to update their ISI and IST programs every ten years, to the
     latest version of the ASME code that's been endorsed by the Staff by
     Part 55 of the 10 C.F.R.  Recently, after a number of years, we
     completed rule making that updated that staff endorsement to the '95
     code and '96 addenda with certain limitations.  And this was all done in
     September.
         Last spring we were with you and, and I think it was in
     April where we discussed the concept of eliminating or replacing the
     requirement of the 120-month update with a baseline code edition and
     allowing the concept of voluntary updates to later approved versions of
     the code.  At that time -- this was before the completion of the rule
     making -- we had proposed the idea of the 1989 version of the code,
     which was currently in the rules as a proposed baseline, and pointed out
     that a lot of licensees and utilities were on that particular version of
     the code, just by virtue of the passage of time.
         Later, the ACRS expressed their reservations on that to us
     and, and suggested that the '89 baseline did not represent the most
     mature version of the code.  And I think the ACRS also indicated that if
     we did eventually establish a baseline, whatever it was, that the
     concept of voluntary updates seemed reasonable if licensees took whole
     versions of the code and not parts and pieces.
         This has been a complex activities and there's been a lot of
     concerns and issues raised on this over the course of the last year or
     so, and some of it has a history even before that.  And you'll hear some
     of those views regarding this particular process from the Staff and from
     NEI and ASME in the court of the morning.
         On balance, after we had completed our work over the last
     few months, we believe the right approach is to replace the required
     120-month update with a baseline representing what's currently on the
     books -- the '95 code and the '96 addenda -- and include the provision
     for voluntary updates to later endorsed versions of the code as the
     years move forward.  And this is the concept that we'll go into with a
     little more detial with you, as Tom takes you through it.  But we think
     this represents the best compromise and balance of consideration of
     regulatory burden for licensees and maintaining plant safety.
         The Staff presentation represents a consensus of NRR and
     research and regional folks that have been involved in this.  And we
     spent some time with our repsective management in the vairous offices,
     and so I think we are presenting to you a product that has been, that
     had fairly rigorous staff and management involvement arleady before we
     come to you.  But we want your views, we want our discussion and look
     forward to the dialog that we can work together on today.
         With that, Dr. Shack, let me turn it to Tom and let him take
     you through the view-graphs, and he'll touch a little more on the
     history and some of the public comments that went on last spring as we
     worked down toward this. Go ahead, Tom.
         MR. SCARBROUGH:  Thank you.  Good morning.  My name is Tom
     Scarbrough.  I'm in the Division of Engineering of NRR.  As Dick sort of
     laid out the groundwork for you, we want to walk you through what we've
     learned since we've last met, in terms of the public comments we've
     received and the further Staff review and the consultations among the
     Staff, and give an overview of what we're recommending and what the
     options that we derived were.
         As an overview, we were back here in April of this year to
     discuss our proposed rule to replace the 120-month ISI/IST update
     requirement with a process of voluntary updating.  And in April of this
     year -- April 27th -- we did issue that proposed rule for public
     comment.  And in that rule we included the 1989 edition as the proposed
     baseline.
         On May 27th, we had a public workshop here in Rockville to
     discuss the proposed rule and we had participants, about 60 participants
     from the Nuclear Energy Institute, ASME, several utilities and private
     citizens.  On June 24th, the Commission directed the Staff to complete
     the incorporation by reference of the '95 edition with the '96 addenda
     into the regulations, and to require licensees approaching their
     120-month update to apply that code editions.  And they directed us to
     further consideration of the ISI/IST update issue until the next
     rule-making.
         On June 28th, the public comment period closed.  We received
     about forty letters; some of them were --
         CHAIRMAN SHACK:  Tom --
         MR. SCARBROUGH:  Yes sir?
         CHAIRMAN SHACK:  They would update when they reached their
     120-month period?  I mean, when do they have to update to the '95
     edition with the '96 addenda?
         MR. SCARBROUGH:  Currently, on the books, the next time they
     come up to their 120-month update --
         CHAIRMAN SHACK:  120-month update.
         MR. SCARBROUGH:  -- that's when they would update.  That's,
     that is the current  -- on the books right now.  And that's what we
     envision would happen.
         On September 22nd, we did finish that, that rule to
     incorporate by reference the '95 edition and '96 addenda, and that
     basically established as the baseline currently, in the regulations. 
     And so where we are is, right now today, is we're preparing a commission
     paper to summarize public comments, describe the options that we've,
     that we've derived, and present some recommendations to the Commission
     for their consideration.  And based on their response in an SRM, we'll
     take the next step, whatever they direct us to do.
         There we go.  Right there.
         In terms of the public comment sources, we received letters
     from ASME, the Illinois Department of Nuclear Safety, NEI, and several
     utilities -- and they're listed there -- I won't repeat them, but
     they're listed -- and several individuals associated with ASME code
     and/or ISI and IST programs, and then a legal firm, Winston & Strawn. 
     So we received quite a wide spread of different sources of comments and
     views, and we considered all the comments to be credible in terms of
     their presentation of their views.
         In the Federal Register notice for the proposed rule, we
     asked commentors to focus on several areas to try to make sure we
     capture all the possible ramifications of this change.  And this is a
     list of them:  potential effect on safety; what's the proper baseline;
     the benefits and hardships; effect on the number of submittals;
     consistency in the range of code editions that might be applied; the
     potential effect on the risk-informed initiatives, because that's a high
     priority for the Staff and the industry -- we didn't want to adversely
     affect that; the potential effect on states and other organizations; and
     the application of the portions of ASME codes, this sort of a
     cherry-picking concept that we talked about.  And then we also received
     miscellaneous comments, which were actually very helpful, that I'll
     mention briefly of some of the more important ones.
         What I'll do now, I'll go through a little bit of some of
     the examples of the public comments.  We received quite a few more than
     what I'll, what I'll kind of touch on.  But I wanted to give you a
     flavor of the dichotomy of the types of comments we received.
         In terms of the potential effect on safety, NEI, several
     nuclear utilities, the legal firm, did not believe that the periodic
     revisions of the code resulted in safety and significant improvements.
         DR. KRESS:  Was this just a statement of belief, or did they
     have anything to back it up?  Like a risk analysis, or a --
         MR. SCARBROUGH:  This was just their views.  Their views.
         DR. KRESS:  Just their views.
         MR. SCARBROUGH:  Right.  Their views.  Now there were -- in
     some of the areas that we asked about, for example, the cost effects,
     there were actual numbers that were provided, things of that nature. 
     But in terms of safety, most of it was the fact that the plants are
     running safely now and so why do we need to update to another edition? 
     That was sort of the gist of their comment.
         ASME and the Illinois Department of Nuclear Safety (IDNS)
     and several individuals pointed to recent editions to the code and the
     positive effect of small cumulative changes as evidence of improvements
     over time.  And they also noted that the actual process of updating had
     a potential benefit of identifying weaknesses in the ISI and IST
     programs, that they pointed out to us.
         There also was some concern among some commentors,
     principally ASME and some of the individuals, that there might be
     reductions in the licensee participation on the code.  And they were
     worried about the unforeseen impacts on -- the adverse effect from a
     successful code process that has served us well for many years.  NEI and
     utilities believe that the code participation will continue because of
     common interest, such as code cases and the efficiency process of making
     the code provisions more effective.
         DR. KRESS:  Did the utilities share that view?  I see you
     had just one utility on that last view.
         MR. SCARBROUGH:  Oh, many times utilities would just, like
     say, we agree with the NEI comments and things of that nature, and so I
     didn't -- but in the case where our utility would actually provide
     additional views beyond NEI, I added them and identified them.
         DR. KRESS:  I see.
         MR. SCARBROUGH:  But for the most part, many of the
     utilities had beginning, introductory language which says they agreed
     with NEI comments.
         In terms of the baseline, the NEI and several utilities
     believe that the 1989 edition of the code provided an appropriate level
     of safety, and that would be an appropriate baseline.  And then, the
     more recent code editions would be available for voluntary use.
         DR. KRESS:  Did they, did they -- you know, words like
     "appropriate level of safety," did they say what that was and how they
     determined that a particular edition gave that appropriate level?  Or,
     were these once again just statements of belief?
         MR. SCARBROUGH:  Well, it was a statement of belief in the
     fact that, that more of the utilities are currently using the '89 code
     edition and there's no current concern with the safety of the plants in
     terms of their operation.  So therefore, extrapolating that, then that
     should be a reasonable baseline.
         DR. KRESS:  It's an extrapolation of experience?
         MR. SCARBROUGH:  Right.  Right.
         DR. KRESS:  And the experience is that they haven't --
     in-service testing and inspection haven't turned up any risk-significant
     things to worry about.
         MR. SCARBROUGH:  Well, in terms of the current process, I
     would assume that what they're indicating is that the current ISI and
     IST programs are working effectively as they are and wouldn't
     necessarily need to be updated to a later edition, like between '89 and
     '95, what were their significant changes that would mandate a need to
     update to the more recent version to change procedures and such to come
     to the more recent version .  And they felt that the '89 edition, the
     programs based on the '89 edition were working effectively and there
     wasn't a need to do that.
         DR. KRESS:  Isn't that in essence saying that the changes in
     the codes themselves were not worthwhile?
         MR. SCARBROUGH:  Between '89 and '95, yes.  They basically
     were saying that the changes were not that safety-significant that it
     would, it would be necessary to mandate their implementation at the
     plants.
         MR. WESSMANN:  Dr. Kress, it I may -- excuse me.  Dick
     Wessmann again.  If I may butt in on Tom briefly, first of all let me
     suggest that when NEI makes their presentation, I think we can explore
     that a little further with them.
         There are quite a number of incremental improvements to the
     code over the years, between '89 and the various addenda.  And as you
     get up to '95, it's very difficult to quantify a lot of little bits and
     pieces, and yet in the aggregate I think we've recognized that there are
     improvements.  And I think some of the, some of the things that we could
     illustrate to you in the way of changes that came about are things such
     as different guidance concerning welding techniques.
         In the IST area, a change to the pump testing provisions for
     a more comprehensive pump test.  They make some changes to some of the
     methods for evaluating flaws in thin-wall piping.  As we get up through
     the '95 version of the code, the O&M Code is now in existence and the
     Staff has endorsed it for the first time in that September rule-making. 
     There's changes to the check-valve testing requirements.
         But each of these -- you might say these are tiny bits and
     pieces, but these are in fact incremental improvements, recognizing the
     change in technology and the change in experience. And that helped get
     us from '89 to '95.  It is true that when we first looked at this, we
     looked in terms of '89, and in this concept of recognition it would be
     very difficult to quantify those incremental improvements.  And that's
     why when we first were with you last April, we thought in terms of '89.
         But I think we recognized, over the course of the last six
     months, a little more clearly some of the incremental improvements and
     here's where we are now with '95 on the regulations.  And this, I think,
     makes good sense.  It represents relatively recent technology and
     thinking.
         Okay, go ahead, Tom.
         MR. SCARBROUGH:  Sure --
         DR. SEALE:  Could I ask one question?
         MR. SCARBROUGH:  Sure.
         DR. SEALE:  In one of the bullets there, you refer to not
     justifying the backfit of Appendix VIII.  In the past where a
     requirement has existed to comply with the latest edition of the ASME
     codes or with an updated -- has the backfit criterion been applied to
     that change?
         MR. SCARBROUGH:  In the sense that where we incorporate by
     reference the next edition of the code --
         DR. SEALE:  Yes.
         MR. SCARBROUGH:  -- like '95, as itself, the application of
     that, that incorporation by reference, has always been considered to be
     exempt from 51.09 backfit.
         DR. SEALE:  I wanted to make sure I understood that.  Thank
     you.
         MR. SCARBROUGH:  Right.  Right.
         CHAIRMAN SHACK:  But this was an accelerated implementation,
     right?  That was the backfit argument with Appendix VIII?
         MR. SCARBROUGH:  Appendix VIII was accelerated, yes.
         CHAIRMAN SHACK:  Right, and so it's the acceleration that
     they wanted justified by the backfit argument?
         MR. SCARBROUGH:  Right.  They felt that the, that Appendix
     VIII justification for accelerated backfit was not appropriate.
         CHAIRMAN SHACK:  And the compliance argument here was
     basically saying that there was always an implicit requirement that you
     inspect effectively, and this was essentially intended to assure that
     you were meeting that requirement?
         MR. SCARBROUGH:  Right, in terms of the effectiveness of the
     testing examinations that were ongoing --
         CHAIRMAN SHACK:  Yes.
         MR. SCARBROUGH:  -- based on actual experience of some
     examinations that were, that were performed in terms of the quality of
     the ability to perform those examinations, it was felt that there was
     such a weakness it, this was not appropriate to let it ride until the
     next ten-year update.  It needed to be done much more promptly.
         My next bullet there goes into the point that Dick was just
     talking about, in terms of -- ASME and several individuals pointed to
     the evolutionary process and specific improvements, and didn't feel that
     a baseline was appropriate to be established at all.  And I won't repeat
     those improvements, but I had a similar list that I was going to share
     with you, that Dick just gave, so I'll move on.
         But there were two utilities that recommended the selection
     of the 1998 edition as a baseline, so it wasn't all one side or the
     other.
         There wasn't concerns, as we'd talked about, in terms of the
     backfit of Appendix VIII, accelerated backfit of Appendix VIII.  The
     Illinois Department of Nuclear Safety raised an interesting point in
     terms of the multiple-code editions and addenda that were presented in
     the baseline of the proposed rule, where they pointed out by their state
     inspectors, they were concerned that multiple levels of editions might
     cause confusion in terms of, you know, having '89, and '92, and '95,
     were all sort of part of that baseline.  So they pointed out something
     that we had not really noticed at first.
         Uh, and there, there was a concern among NEI and one utility
     that if there was a selection of a baseline other than the '89 that was
     presented in the proposed rule, that that would prevent public comments
     on that new baseline, and we don't agree with that because we felt there
     was quite a bit of comment on what the proper baseline was.
         DR. UHRIG:  Is there any significant difference between the
     '95 and the '98 editions?  Just --
         MR. SCARBROUGH:  Well we're currently reviewing the '98
     edition, so I can't say where we are so far in terms of what we've seen. 
     In terms of IST, I don't believe there's significant differences between
     '95 and '98.  I don't know if anyone has, wants to add or venture any
     additional --
         MR. TERAU:  This is David Terau with the Staff.  There was
     one significant change in the '98 edition of the boiler and pressure
     vessel code, Section XI, which dealt with the inspection of
     containments, in-service inspection of containments.  So Subsections IWE
     and IWL have been changed significantly to represent, I'd say, more
     current views on how containment in-service inspection should be
     performed.  But we're still, the Staff is still reviewing those changes.
         DR. UHRIG:  Thank you.
         MR. SCARBROUGH:  Also in terms of the public comments, we
     received comments regarding potential burden implications regarding the
     NRC staff.  NEI believed that a constant baseline would increase our
     stability in the regulatory space and lead to higher quality inspections
     and more efficient use of resources.
         DR. KRESS:  Explain to me what you mean by "constant
     baseline."  That means, you choose one of these years like '95 and say,
     all right, that's it, and if you want to update, it's voluntary from now
     on?
         MR. SCARBROUGH:  Well --
         DR. KRESS:  Is that what you mean?
         MR. SCARBROUGH:  That's how they, how they termed it, that
     if a baseline, if you set the baseline and kept it there for long, long,
     very periods of time, that would lead to an understanding of, that is
     the rule and everyone gets to know the rule and they have an
     understanding other than changes over time, then you kind of have to
     relearn it a little bit.
         I think that's what they're assessing there.  We didn't feel
     that that was a, a very significant burden reduction on our part because
     the changes are not that, are every ten years anyway and we do have
     relief requests coming in, so we have plants that have different
     programs.  So there's an ongoing flux in terms of the programs anyway. 
     So this was just a comment that came in from NEI that it might be, there
     might be a beneficial aspect of, of a more stable baseline than we
     certainly have right now.
         CHAIRMAN SHACK:  Would it at least -- when you get a relief
     request, is that essentially to have to be renewed every time there's a
     120-month update so that, in fact, you get -- you know, if you've got a
     relief request from one edition, as soon as you go through the 120-month
     updates you then have to re-request the relief?
         MR. SCARBROUGH:  Yeah, as you come up to your next program
     review for a ten-year update, you look back and see if you're able to
     meet that new verison, and if you're not, then you would submit relief
     requests for that.
         CHAIRMAN SHACK:  So there is a continuing generation of
     relief requests associated with the update?
         MR. SCARBROUGH:  Right.  Right.
         There was one utility that believed that elimination of the
     ISI/IST update would allow us to review and endorse code editions more
     timely.  And that was one point that they made, where we hoped to move
     these endorsements on more promptly as it is, that's one of our goals.
         There was a concern by ASME that the reduced emphasis on the
     code process might delay endorsement of the code editions.  And our
     feeling is, we're not going to reduce our emphasis on the code process. 
     We're continuing to review all the ongoing editions, addenda that come
     out.  We're going to continue to endorse them by reference in the
     regulations.  So our emphasis on the code is going to continue; it's
     just a different process that we're gonna have.
         One utility did point out that it might be scheduling
     difficulties in terms of, if you had relief requests coming in sort of
     randomly -- licensees updating, as they voluntarily updated and they
     would have different relief requests coming.  And that may be true, and
     that's part of our thought process in terms of the baseline and when we
     would consider updating the baseline and what the schedule for
     implementing that new baseline would be, and that would be part of the
     consideration of that.
         DR. KRESS:  Are there -- excuse me.
         MR. SCARBROUGH:  okay.
         DR. KRESS:  Are there conflicts between the proposed ISI/IST
     risk-informed regulations and the endorsement of the codes and
     standards, or what is spelled out in the codes and standards themselves?
         MR. SCARBROUGH:  I don't, I don't -- I wouldn't say it's a
     conflict.  It's a different approach.  The risk-informed process changes
     a number of the different provisions that would be required by the ASME
     code because they implement a sort of a risk-informed process, where
     certain higher-risk components are tested more frequently than
     lower-risk components.  So it's a change; I wouldn't say a conflict.
         But there is, there's a different there that, you know, has
     to be taken into account as we review the risk-informed programs. And
     we've done that for a couple of utilities already that are implementing
     that.
         DR. KRESS:  The risk-informed programs don't really address
     an update period, do they?
         MR. SCARBROUGH:  That, that's a good question.  I'm note
     sure how the risk-informed programs deal with the longer-term aspect of
     that.
         MR. WESSMANN:  Dick Wessmann again.  I think they -- first
     of all, the provisions in the regulation allow the utilities to
     implement an approved alternative to that which is endorsed in the
     regulation.  And that's the basic process by which, at this point in
     time, they come in the door with the risk-informed alternative.  And of
     course we've put the regulatory guides out there, the 1.174, 175, etc.
     that give guidance regarding an acceptable risk-informed program.  They
     will then reference that risk-informed program and its relationship to
     the existing code of record, because that's what they have as the code
     of record.  And for many of them it's '89.
         In the area of IST, many of the provisions in the '95
     versions of the code are slightly more attractive from a risk-informed
     standpoint, and so the one major risk-informed initiative that we had
     approved for Comanche Peak is based upon mostly the provisions of the
     '95 version of the code -- with certain exceptions, but that was the
     concept that was there.
         Now, when -- if the law and the regulations stayed the way
     they are right now, when the 120 months time comes up, the licensee
     would have to look at, what is the current version of the code that's on
     the books, and how does that approved risk-informed program comport with
     it, and then as they do that program update, have to do either relief
     requests or, you know, supplement that old submittal.  You know, we're
     trying to look into the future to indicate how they all comport.
         If we have a baseline, regardless of the baseline that it
     is, this concept of a little more stability in a program that's there,
     then they are not faced with that as this 120-month interval comes up,
     the "next time around" type of thing.  And so, in that sense I think
     there's a little less burden for the utility and a little less burden
     for the Staff.
         DR. KRESS:  Is there an expectation that the code and
     standards -- this particular one on ISI/IST -- is becoming very mature
     and that it's sort of a diminish in returns on the changes to it the
     future, that you've already reached the stage where you're not going to
     improve it very much?
         MR. WESSMANN:  I think, I think that's a subjective call,
     and it's hard to know.  And then we're trying to speculate, you know,
     new technology or something that's in the future.  From the --
     certainly, as we've talked, the incremental improvements have come along
     over the years.  And yet, if we say is there a maturity now compared to
     the early '80s or something like that, I think we would, we would like
     to think, yes, that's the case.
         And yet we're in an industry with evolving technology and,
     you know, a new test method or a new gizmo will come along, or a new way
     of evaluating a flaw, or something like that, and come into the code. 
     This is one reason why, as Tom continues here, he'll talk about, we will
     continue to review later versions of the code as they come and would
     endorse them for voluntary implementation.
         And then somewhere along you say, the cumulative approach. 
     All right, and now I'm saying I'm in 2010, the cumulative activities
     over a ten- or fifteen-year period represent enough of a cumulative
     change that we think a new baseline should be put in place.  To say that
     '95 as the baseline from now until 2030 is a little hard to say and
     speculate on, so to have the provision for making a change, we believe
     it's the right way to work forward in this area.  Let me turn it back to
     Tom.
         CHAIRMAN SHACK:  Oh yes.  Oh yet, come up.  Come up, Gil.
         MR. MILLMAN:  Gilbert Millman with the Office of Research. 
     We talk about the cumulative improvements that go on from edition to
     edition.  In many cases these improvements are improvements in practice. 
     And as a result of there being a change to the code in one edition, from
     relative to another, the relief requests that would frequently be needed
     in the next 120-month update are eliminated because the relief requests
     are often due to a hardship.  And as a result of a revision to a code in
     the next edition, those reliefs are no longer required.
     MR. SCARBROUGH:  Okay.  Let me go on and talk a little bit about the
     public comments we received regarding burden implications for licensees
     and vendors.  NEI and several utilities reported that the savings from
     the elimination of a mandatory program updating with the fewer relief
     requests that would be involved was greater than what was predicted in
     the proposed rule.  And they suggested that it could be up to $1-1/2
     million for every ten years, to update the programs.
         ASME and some individuals considered the benefits to be, to
     be minimal in terms of cost per year and actually might result in
     additional relief requests for licensees to use portions of those later
     code editions and code cases.  ASME also pointed to the burden reduction
     regarding economic benefits and reduction in radiation exposure from the
     improvements, code improvements.
         DR. KRESS:  $500,000 every ten years doesn't sound like much
     of a burden to me.
         MR. SCARBROUGH:  Yeah, we didn't consider the burden issue
     to be significant.
         One individual was concerned about --
         DR. POWERS:  Wait a minute -- you didn't, but apparently
     NEI, from everything I read, does think it's a significant burden.
         MR. SCARBROUGH:  Yes.
         DR. POWERS:  Why the dichotomy?  It's not your million
     dollars, I guess.  That's why you don't think it's a burden, right?
         [Laughter.]
         DR. POWERS:  I mean, it's easy to be generous with other
     people's money.
         [Laughter.]
         MR. SCARBROUGH:  I think, in terms of the cost to review
     relief requests and the cost per year, that might, that would be
     involved in terms of additional relief request submittals that might
     come in, that's, that was what we were thinking about in terms of
     whether or not --
         DR. POWERS:  I mean, I see these qualitative words all the
     time and I see assurances that this or that is going to reduce burdens
     on the NRC Staff.  But I never see any numbers.  At least with NEI, I
     get some numbers from what the costs are.  But I always see these words
     that says, this option or the other option.  And it just depends on
     whose document I'm looking at, is going to relieve burden on the NRC
     staff.  But I never see anything quantitative.  Have the other members
     seen anything quantitative on that?
         DR. BARTON:  No.
         DR. KRESS:  There was one thing, where we saw a reduction of
     three FTEs per year.
         DR. POWERS:  Oh, okay -- I mean, that's a useful thing. 
     That's a lot of money there.  I'm not sure what an FTE runs for the NRC,
     but I assume it's around $180,000.
         DR. KRESS:  I mean, I guess it would be something like that.
         DR. POWERS:  Okay, so --
         DR. KRESS:  That wasn't for this.
         MR. SCARBROUGH:  But we don't actually see any change,
     significant change in burden one way or another on the staff regarding
     any of the options.
         DR. POWERS:  But it says in various documents that, in your
     case by having this, that this will relieve and avoid licensees'
     applications.  And NEI, on their behalf, say they're generously trying
     to protect you from overwork as well.  According to their -- I mean,
     both of them say, I've never seen anybody come up and prove one way or
     the other.
         MR. SCARBROUGH:  Much of it is qualitative in terms of their
     views of what --
         DR. POWERS:  We'll give you 180 degrees apart and say this
     is qualitatively correct.  I mean, NEI in their document -- I can
     probably find the word that says, by following their proposed course of
     action, it'll save work on the part of the Staff.  And you say, by
     following your course of action, it'll save work on the part of the
     Staff.
         MR. SCARBROUGH:  No, we think that any, any path is going to
     have a significant effect on the work of the Staff.  We still have to
     review the code editions that come up.  We still have to compare them. 
     The only, actually in terms of the burden for eliminating the ten-year
     update and replacing it with a voluntary process, we actually increase
     our burden slightly because now we have to look at the valuation of the
     new code editions in terms of 50.109.  So there's a small increase there
     in terms of what we haven't done before.  It's sort of a learning
     process for us.
         But in terms of, we're still going to be reviewing the new
     codes, the new codes that come out.  We're still gonna be repairing
     rule-making to endorse them.  The process is going to basically be the
     same.
         DR. POWERS:  Okay, not significant.  Okay.
         MR. SCARBROUGH:  Now there was some suggestion that there
     might be some hardships on vendors that supply non-destructive
     examination services to various plants between nuclear and non-nuclear
     because there might be differences in the requirements from the various
     jurisdictions in terms of what might be applied for that.
         DR. KRESS:  Did you take comment seriously?  It looked kinda
     like the kind of comment you can deal with.
         MR. SCARBROUGH:  Yeah, that's a, that's a hard one to deal
     with.  I think there -- you know, because now there's a potential for us
     to be out of sync somewhat because there is a ten-year process, a
     ten-year anniversary where you do update every ten years.  So there's
     always that potential for them to be out of sync somewhat over time.
         In terms of potential effects on states, the Illinois
     Department of Nuclear Safety provided some good comments in terms of how
     they synchronize their rules to the code editions as accepted by the
     NRC.  And they did raise a concern that there might be a possibility
     that we could be out of sync with the state requirements, if the State
     of Illinois decided to update to a more recent code edition.  So that
     was something that we thought about carefully, to see how that would
     work.
         There was also some concern that there might be an impact on
     states and vendors and nuclear insurers and other organizations from a
     perception of a reduced emphasis on safety.  And we tried, we tried to
     make clear, we're trying to make clear in the Commission paper and in
     any proposed rule-making, further rule-making, that we're not reducing
     our emphasis on the code; we're raising the process for making changes
     to the baseline.  We're changing the bar, so to speak, in terms of what
     would be the process for updating to a more recent version of the code.
         A couple utilities indicated they didn't see a significant
     impact.  And one individual believed that some insurance companies or
     inspection agencies might be adversely affected by the reduction, a
     reduction in research of approved techniques.
         In terms of the application of portions of the ASME code,
     NEI and one individual recommended that licensees be allowed to use
     portions of future codes.  And one commentor suggested that that be
     handled by the 50.109 process -- I'm sorry, excuse me, 50.59 process.
         In terms of -- one individual also suggested that the need
     for prior NRC approval might preclude incentives from the ASME code
     committees to prepare code sections that might be identified portions,
     that can be identified without conflict.  And we have tried, in the
     current rule-making that we just issued in September, we did identify
     certain aspects or code cases, or certain aspects of the ASME code that
     could be implemented without prior approval.  So we recognize that there
     are portions that, that can be implemented in advance and we've tried to
     indicate those in the rule-making.
         There was a suggestion that we prepare generic relief
     requests to allow broad uses of that, and that's something that we'd
     have to explore with, with OGC and such.  And then there was an
     individual that suggested that in addition to some of the other areas
     that we pointed out at individual without prior approval would be the
     IWA repair sections on repair, replacement and modification.
         DR. KRESS:  But when the ASME codes or standards committee
     are considering making some sort of change to the code or standard, do
     they do a cost-benefit analysis to that proposed change to see whether
     it's worthwhile making it?
         MR. SCARBROUGH:  Not explicitly, but it's always been
     assumed implicitly that because of the wide spectrum of participants on
     the code -- you have utilities and consultants and regulators and such
     -- that there is an implicit consideration of the cost of doing this
     change.  But it hasn't been set out and presented in an explicit manner.
         In terms of the miscellaneous comments -- I'm sorry. Go
     ahead.
         DR. SEALE:  I'm impressed by what appears to be a suggestion
     of really cherry-picking in selecting the sections of various code
     cases, depending upon what a particular utility might want or desire. 
     And the question of consistency bothers me when you get a whole diverse
     set of requirements for different utilities, and perhaps even individual
     plants.  Have you discussed this at all with the inspection people as to
     what the implications would be if you balk at the regulations in this
     manner?
         MR. SCARBROUGH:  In terms of the, the -- we have sent this
     out to the regions for the inspectors to evaluate, and we have received
     comments back that, that we've addressed.  And they're supportive of the
     proposed options that they've talked about.
         One of the things that we tried to do is, we're -- our
     recommendation is that future editions of the code that we incorporate
     by reference, if a licensee picks it up and wants to make that the code
     of record, they would pick up the entire code.  And that would make sure
     that the inter-related aspects of the code are pulled together, so we
     don't have the cherry-picking.
         Now in certain cases in the rulemaking, we might select
     areas that we see are, are very significant that might be helpful for,
     and endorse those as a separate, so they don't have to go through the
     whole next version.  For example, in the September rulemaking on
     appendix 2 on check-valve condition monitoring, that's a separate area
     that's such an improvement over what was done in the past for
     check-valve testing that we endorse that, so the licensee could pick
     that up and use that portion.
         But yeah, we look at that very carefully because you have to
     look at all the ramifications of, when you pull out a piece and endorse
     it separately that you don't end up having a --
         DR. SEALE:  When you say an improvement in this particular
     instance, in what sense?
         MR. SCARBROUGH:  In terms of the quality of the information
     that you gather on the checkvalves, in terms of the examination process. 
     You monitor it more closely rather than --
         DR. SEALE:  Is there a focus in this that might in fact
     reduce the burden on the utility?
         MR. SCARBROUGH:  I think there is because there is a way to
     extend these intervals of examination out farther, so you're not sort of
     a, a stroke of the check-valve every quarter or so.
         DR. SEALE:  So clearly, some of these changes in the code
     requirements cut both ways?
         MR. SCARBROUGH:  Absolutely, yes.
         MR. WEINMANN:  If I may supplement Tom very briefly on the
     aspect of the inspectors and different versions out there in the field,
     that's a reality of life out there, and it's there now and to some
     degree it will always be, because you have, of course right now, a
     majority of plants on '89, some plants on earlier versions, and as the
     clock counts out, that clock, the plant will update now to '95 and some
     other will still be on '89 until that partiuclar click counts out.
         You have -- under the provisions of the regulation,
     licensees have come in and request a particular alternative, or they can
     come in and request the use of a code case, and the Staff evaluates.  So
     then, a particular licensee on that unit may be using the provisions of
     a specific code case.  This is a challenge for the inspection staff, and
     yet the, the inspection in the ISI and IST area are a very mature group
     of individuals that have been involved in it a number of years and
     recognize, you know, the differences of the programs for the different
     units at the different facilities.  And we've always had to deal with
     this, and I believe our experience base will allow us to continue to
     deal with this.
         I think, as we get to a baseline concept, it might get a
     little simpler, but there will always be different code cases and
     alternatives that are out there or built upon a relief request.  So this
     diversity is a fact of life out there.
         MR. SCARBROUGH:  Okay, just a last couple miscellaneous
     comments that I wanted to point out was, no matter which side of the
     argument you were, just about every commentor emphasized the importance
     of a more prompt NRC review and endorsement of the revised code editions
     and addenda, and the code cases.  And we've taken that to heart and
     we're trying to improve that process.  Also, ASME believed that there
     might be a concern regarding the National Technology Transfer and
     Advancement Act of 1995, if we did replace ISI/IST update requirements,
     and based upon the option that we're recommending, we don't believe that
     that's going to be adversely affected by our process.
         Okay, that's a summary of the public comments. And let me
     outline for you the options that we derived based on the review of those
     comments.
         Option 1 was to replace the ISI/IST update requirement with
     a baseline and allow voluntary updating to later NRC-approved code
     editions and addenda, unless that baseline is revised based on 50.109. 
     And within that option, we have three sort of sub-options that we would
     consider in terms of what would be the initial baseline.
         DR. KRESS:  Would that revision under 10 C.F.R. 50.109
     require a backfit analysis?
         MR. SCARBROUGH:  It would be a backfit analysis, but it
     could be qualitative and quantitative.  It doesn't have to be only
     quantitative.  So that was something, yes.  It would be under 50.109.
         Option 1.A is basically the proposed rule baseline.  The
     1989 edition for ISI and IST; '92 edition for the IWE/IWL subections for
     containments; and then the '95 edition to pick up the Appendix VIII for
     ultrasonic qualification of personnel.
         Option 1.B would be the '95 edition and '96 addenda, with
     the limitations and modifications are spelled out in the regulations
     currently.  That was issued on September 22nd of this year.
         And then Option 1.C would be a later version, and currently
     the latest version is '98.  I think the '99 addenda is coming out.  But
     that would have an option of going to something even more recent.
         Option 2 was to retain the current 120-month update
     requirement and there'd be no change in the current approach that we
     have.
         Option 3 is sort of a slight difference from Option 2 in the
     sense that we retain the regulatory requirement for the update but we
     develop guidance for plant-specific alternatives to that requirement and
     make that a more organized outline approach in terms of how you might
     request an alternative to that update requirement.
         Okay, in terms of the options, under Option 1, we'd continue
     the review of the future code editions and incorporate them by reference
     in 50.55a for voluntary use, and then evaluate the code improvements
     under 50.109 for backfit implementation.  We would evaluate the ongoing
     changes, both quantitative and qualitative improvements to the code, and
     determine whether or not it's sufficient to revise the baseline under
     the 50.109 criteria.
         Licensees would be allowed to voluntarily implement an
     entire edition or addenda without prior NRC approval, if it was
     incorporated by reference in the regulations.  Once a licensee selected
     a particular code edition or addenda, that would be their code of
     record.  That would be what would be applied in their regulatory
     requirement.  Prior approval would be required for portions, and that
     would make sure the inter-related requirements were imposed without
     reducing the effectiveness of the code.
         And we continue to participate in the code process the way
     we do without any changes in that regard.  And what we did was we tried
     to outline the advantages and disadvantages of each of these options. 
     And under Option 1, the burden on licensees might be reduced, but there
     is a potential for an increase in relief requests as they voluntarily
     want to use portions of later code editions.  And that might reduce
     their savings.  We would apply safety significant improvements to the
     code through the 50.109 process, which would be consistent with NUREG
     requirements.  So we'd make it a level playing field regarding the
     ISI/IST requirements and all the other requirements that we impose these
     days.
         We would continue to emphasize the importance of the code to
     our participation in the code committees and also the revision of the
     baseline and specific backfits.  And where there wasn't a baseline
     established, we would have that update review that has been shown to
     help identify program weaknesses.
         Under the sub-options there, Option 1.A might provide more
     burden reduction because most plants are currently apply the '89
     edition.  Option 1.B would apply to the current requirements that are in
     the regulations that were issued on September, in September of '99.  And
     Option 1.C would allow the most recent version to be used as a baseline.
         DR. UHRIG:  The most recent being '95 or '98?
         MR. SCARBROUGH:  It would be '98.
         DR. UHRIG:  '98.
         DR. BONACA:  Have you identified any of the advantages with
     Option 1 or yes?
         MR. SCARBROUGH:  Yes.  Yes.  In terms of the disadvantages,
     we are removing historical exclusion of 50.109 from ISI and IST
     updating.  And that's a significant change.  Before, we didn't have the
     burden of reviewing each of the changes in editions for the 50.109
     criteria.  In terms of the additional resources, we estimated that the
     total now for, of FTE, about one FTE would be required to review future
     code editions, the changes that have been made due to do the rulemaking
     process, and then also included in that now would be looking at what
     significant changes were made from the previous edition to see if the
     baseline needed to be revised.  So there's additional work aspect in
     this new process for Option 1 that wasn't --
         DR. POWERS:  Can I go back to the first one?
         MR. SCARBROUGH:  Sure.
         DR. POWERS:  Say that option removes their historical
     exclusion, at least the updates from the 109 backfit rule.  Have you
     looked at your history and said, if we'd had, if we'd pursued Option 1
     ten years ago, how would it affect things you did in the past?
         MR. SCARBROUGH:  No.  One of the things we have tried to do
     is go back and look back to the '89 and see what were significant
     changes, not to the level of maybe a 50.109 type task, but what would
     be, what were some of the significant improvements or changes that have
     been made since '89.
         DR. POWERS:  And so you --
         MR. SCARBROUGH:  And that's, and that's where some of those,
     you know, would not have been implemented in that sense.  They may not
     have been raised up to the level --
         CHAIRMAN:  -- most of them have been implemented.
         MR. SCARBROUGH:  Right.  Right, but we haven't done it
     quantitatively --
         CHAIRMAN:  We've been through this for the ISI, of the
     piping, in some detail associated with the risk-informed inspection. 
     And in fact, GSI-190.  I mean, GSI-190, the whole analysis is based on
     no inspection, and you still end up with CDF increments of 10(-6),
     therefore, you conclude that you can't impose any new requirements.  So
     even without inspection, at least in terms of the piping, you're, you
     can't really justify this on a CDF kind of basis.
         DR. KRESS:  So does this mean that there never would be a
     revision to the baseline, because it would never pass the backfit rule?
         CHAIRMAN SHACK:  Well it would seem as if you had to impose
     an ISI program, you'd have a hard time doing it.  But --
         DR. KRESS:  As opposed to ISI --
         CHAIRMAN SHACK:  -- as well as updating the ISI --
         DR. KRESS:  As opposed to IST, which is even harder to --
         CHAIRMAN SHACK:  Well, IST, you know, I haven't seen the
     form -- you know, with the ISI, at least you, you have the analyses that
     have been done for the risk-informed inspections in GSI-190 in front of
     you, and so the numbers are --
         DR. KRESS:  I would guess if ISI doesn't pass, IST won't
     either.
         [Laughter.]
         CHAIRMAN:  I would guess that's the case.
         MR. SCARBROUGH:  Yeah, we recognize the difficulty of trying
     to do a quantitative analysis in terms of a backfit or revision of the
     baseline.  And one of the things we've discussed is the process for, for
     updating that baseline.  In many cases, it would be more qualitative in
     terms of what are the changes and identifying those changes, and then
     deciding if those, if there's a sufficient amount of changes that have
     been made, that would give us good confidence that we should go to CRGR
     Committee and suggest that we change the baseline.  It wouldn't only be
     the quantitative aspect, but I agree that that would be a difficult task
     if we only used that task.
         In terms of the, the ongoing activities, we do have a number
     of activities ongoing, and you all have mentioned some of them this
     morning.  There's a significant effort in terms of the risk-informing
     Part 50 that may change a lot of how we do business in terms of applying
     regulations.  And that might fold into 50.55A as well.  The ISI/IST
     risk-informed programs are ongoing and that has a different aspect in
     terms of how we apply the IST requirements.
         CHAIRMAN SHACK:  Just coming back to that, and in light of
     Dick's early comments, I thought most of the, at least the in-service
     inspection ones that we looked at, really replace the Section XI
     requirements for an inspection, so it was a wholesale change.  And the
     updating was essentially built into the program in the sense that it was
     a performance monitoring requirement rather than a formal calendar
     requirement -- you would be required to demonstrate the fact that your
     leak rates weren't going up, your failure rates weren't going up.  But
     as long as you were meeting those performance requirements, the program
     could proceed.  And you indicated that in fact there was still an update
     requirement on that.
         MR. WEINMANN:  I guess I'm not sure quite how to respond.  I
     think we're both a little bit right, that these performance requirements
     in the replacement for the ISI, like you're describing, that's correct. 
     It is basically a replacement of the Section XI program.  I think that
     the utilities at the hundred, you know, at the ten-year interval has to
     at least look at what's on the books and see whether there's an
     applicability or not.  And I'm just not sure what the level of scrutiny
     is required there at that ten-year interval.
         MR. SCARBROUGH:  We'll look into that and get back to you
     tomorrow when we talk to you again, and you let you know, because our
     risk-informed IC export isn't here, but he's back in the office and I'll
     talk to him and get back to you on that.
         In terms of licensees, one disadvantage might be that a
     licensee might incorrectly, in our opinion, assume that we've reduced
     the importance of a code.  There might be additional burden regarding
     additional updating if we want Option 1.B to '95 or 1.C to the '98
     edition.  We would not have the ongoing established time interval for
     periodic review of the ISI and IST programs which has identified
     weaknesses in the past.
         There is a potential for inconsistencies between state and
     NRC requirements, if the states happen to update to a more recent code
     than we have.  There was a concerned, as we mentioned, about the
     multiple code editions in Option 1.A, and there was a concern that the
     specific public comments would not have been obtained on the '98
     editions or something other than the '89 edition as a possible baseline. 
     But we think we do have, received a number of comments in that area that
     we're able to screen those and discuss those.
         DR. POWERS:  You have listed on there your, an issue -- you
     say licensees might assume less significance or less importance to the
     ASME code.  Now that -- your conclusion on that was based on some
     psychological review of various members of the licensing community?
         MR. SCARBROUGH:  No, that was their comment.
         DR. POWERS:  How can you seriously come up and say what
     somebody might think?
         MR. SCARBROUGH:  That's what they commented.  That's what
     their comment.
         DR. POWERS:  No, they said that comment.  I mean, they said
     participation would be reduced.  They were concerned about that, and
     that's why we're relating what their comment was.  And our view is, we
     don't intend to reduce our importance on the code.
         In terms of Option 2, which is the current process we have,
     some of the advantages are that there have been licensee event reports
     which reveal numerous program weaknesses that have been found during the
     program update reviews.  And part of that's caused by the divergence
     over time of the programs as a result of procedural changes or
     modifications from different influences of, of different requirements or
     provisions that might cause them to diverge from where they originally
     were -- the priority isn't as high as it used to be on things of that
     nature.
         So the program updates do help safety by incorporating
     experience and new techniques in identifying weaknesses.  It does retain
     the public confidence if the code revisions are seen to be
     safety-significant in terms of the improvements to the programs over
     time.  And it does allow the NRC to respond through the ASME code
     process to emerging issues without the burden of having to go through a
     50.109 review.
         DR. SEALE:  Could you give us some help on assessing the
     severity or the seriousness of these numerous IST/ISI program
     deficiencies that have been discovered in the past.  Were they category
     5 or category 4 or what?
         MR. SCARBROUGH:  We summarized them in our attachment, which
     went into more detail on, for option 2.  But in terms of the, the
     identifying components that had been, had been, failed to be included in
     the program, they'd somehow dropped out of their program somehow. So
     they hadn't really been tested over time.  So that's the type of thing
     they found, where there were mistakes that were made, until they went
     back and re-reviewed it.  But I can't give you a report.  Maybe I can
     look into that and talk to you tomorrow about that in terms of, I'll
     talk to the folks who did that review and see if they had looked at what
     sort of result was that after, that they were finding?  Was it a high
     level of concern that was raised?
         But there were weaknesses in terms of components that were
     missed form the program.
         MR. WESSMANN:  Wally, can you add any dimension?  Excuse us
     for a minute -- we're putting Wally Norris on the spot a little bit, but
     he did some of the work on the LER review, and if he can shed any light
     on the perception of significance of some of these deficiencies or the
     quantity of them or something, that might help.  Wally?
         DR. SEALE:  He probably has been on the spot before.
         MR. WEINMANN:  Yes, sir.
         MR. NORRIS:  Wally Norris, Office of Research.  We're still
     looking into that, as you alluded in trying to determine what the real
     risk for many of these is the difficult process.  We had determined that
     there were arund 140 LERs total in, relative to ISI and IST programs in
     the 1990s.  It turns out that somewhere, 20 to 25 percent of them are
     related to the update.  It's a little difficult to tell because there's
     no standardization with regard to the wording of the LERs and right now
     we're looking at about 20 of those.  It appears that they will be
     something that is safety significant.
         And as Tom mentioned, there are sometimes entire classes of
     components or either not putting the program through plant mod or other
     outside influences.  The programs get changed and even they're still in
     the program, the procedures get changed.  The tests are not completed. 
     Examinations don't take place.  So, we hope to have that within the next
     week or two.
         SPEAKER:  You've got a hand in the air behind you, sir.
         MR. WEST:  My name's Ray West from ASME, today.  And I
     looked at these LERs and a lot of them were very difficult to determine
     if they are related to the ten-year update.  But the percentage I got
     was probably fifty percent for the related ISI ones were for the
     ten-year update when you read into them.  But I didn't see a lot of them
     that were safety-significant.  However, the way that the update is done
     at the utilities is that it's usually done in the third period of the
     ten-year interval.  And it's done before the last refueling outage.  And
     as a result of that update, if there are mistakes, they usually can be
     corrected in the inspections performed in that last period.  But if you
     do away with the update, that does not get looked at.  That focus goes
     away.  And I'm not sure how many would be listed, and you could identify
     LERs if that was the case.  Thank you.
         DR. SEALE:  Thank you.
         MR. SCARBROUGH:  One of the disadvantages of Option 2 is it
     could be considered to be not to reflect the current effort to improve
     our justification for new requirements using the 50.109 process where
     imposed on licensees.
         Option 3 is a slight change to that aspect of Option 2,
     where we would retain the regulatory requirement in 50.55a, but we would
     authorize plant-specific alternatives, pursuant to 50.55a(a)(3)(i),
     which, to provide acceptable level of quality and safety.  We would need
     to develop guidance for evaluating those alternatives, and we might
     include such aspects as operating life and the safety-significance of
     the changes from the previous version of the code.
         The advantage of option 3 is that it uses a current process. 
     It does have -- the potential for reduced code participation is
     minimized because on the books it's still the 120-month update
     requirement.  And the potential inconsistency for state and Federal
     requirements is reduced because it's really reduced to a more
     plant-specific issue.
         The disadvantages would be that the licensees have the
     burden of justifying that alternative, and as a result it could have
     less burden reduction than Option 1 because licensees would have to
     address all the sections of the code in terms of their justification. 
     And another aspect of concern would be that it might not involve public
     participation, where it was all done internally within the staff, and we
     would need to have resources develop that guidance for this process to
     make it clear as to what would be the success path for this option.
         CHAIRMAN SHACK:  So this is basically a global relief
     request?  Is that what you envision?  I mean, you can now come in and
     request relief from specific provisions.  You're saying here they can
     request relief from the whole --
         
     MR. SCARBROUGH:  Yes.  Yeah, they would come in and ask for relief and
     justify that, under 53(a)(i).  Yeah.
         
     CHAIRMAN SHACK:  They already have this alternative, right?
         MR. SCARBROUGH:  Right.  They can do that.  And we've and
     had -- they came in and did that once before.  But now we've taken a
     more organizaed approach in terms of the guidance, guidelines for
     following that pathway, rather than just kind of reviewing it
     haphazardly.
         In terms of evaluation of the options, we did apply the
     strategic goals from the commission and, of the maintianing safety,
     increasing public confidence, and reducing regulatory, and making NRC
     activities more effective, efficiant and realistic -- I don't have much
     time.  I don't want to go into all these, but we did, we do feel that
     each option would maintain safety.  The process for updating is just
     different for each of these options.
         Option 1, you have the 50.109 test; option 2, you have the
     process where it's automatically updated; and option 3 would be n a
     plant-specific basis.  So we feel that safety would be maintained for
     all three options.  We think that public options.  We think that public
     confidence, you know, would be reflected by how it's perceived in terms
     of what option.  We think all of them have the potential to increase
     public confidence by the manner in which we intend to make sure that
     safety-significant changes are continued to be mandated.
         In terms of reducing unnecessary burden, we think that
     option 1 provides the greatest flexibility for licensees, in terms of --
     if they want to voluntarily update to a new version, they can, or they
     can wait until the baseline was changed.  So that gives them the
     greatest flexibility.
         In terms of activities, we're gonna need Staff resources to
     review relief requests regardless of the updating requirements.  They're
     gonna continue to come in.  Option 1 does remove the historical
     exclusion of 50.109 from updating, but it does make it consistent with
     all our other requirements that we have.  So we think overall that
     process would work out to our advantage.
         So all that said and done, we developed a recommendation
     that we plan to present to the Commission, that no particular option has
     an overwhelming advantage over the other options in terms of the
     strategic goals.  We've gone through all those in detail and there's not
     an overwhelming process or argument that can be made for any of the
     options.
         We think Option 1.B reasonably combines the strategic goals
     and it would be recommended to replace the 120-month update requirement
     with a voluntary updating provision unless the baseline were, was
     revised using the 50.109 criteria.
         We selected the 1995 with the '96 addenda as the initial
     baseline on two points.  One is, it's already incorporated by reference
     in the regulations with the requirement that the licensees update at
     their next 120-month interval.  And second is the improvements that have
     been pointed, from the public comments and from our review, since 1989,
     to the code, which provides a number of improvements to the code
     provisions themselves.
         DR. POWERS:  Would this supersede the accelerated
     implementation of Appendix VIII, or that goes on --
         MR. SCARBROUGH:  That would continue.  That would continue
     just the was it is as of today.  Basically what would happen was, under
     Option 1.B what's currently in the regulations would be the baseline,
     and licensees approaching their next 120-monrh interval would update to
     that process.
         DR. POWERS:  But they have to do Appendix VIII sooner than
     that?
         MR. SCARBROUGH:  Yes.  That was a backfit.  That was an
     accelerated backfit.  So that schedule would continue.  And we've talked
     about, we've considered how to implement the process for updating the
     baseline and such, and we've considered -- if, as we've reviewed future
     code editions, if we found specific provisions that, I mean backfit over
     time as we collected a number of different backfit provisions, that
     might be an indication that it's time to update the baseline.  So we've
     started thinking about how that process would work.  But it would be a
     learning process because it's something we hadn't done before.
         MR. WESSMANN:  I would point out that if something like
     Appendix VIII shows up in the future, and let's say it's in the 2004
     edition of the code, there is something that is such a compelling
     improvement like the Appendix VIII and it passes the specific backfit
     test, that we would then go down the path, through the public comment
     process and all, to impose that on some sort of accelerated schedule,
     but that would have to be tested on its merits and, we're speculating,
     on some invention in the future.
         But the concept we applied for Appendix VIII would certainly
     stand, no matter how we move forward from this particular activity.
         MR. SCARBROUGH:  That's all I had.  Thank you.
         CHAIRMAN SHACK:  Yeah.  Let's take a break until 9:35.
         [Recess.]
         CHAIRMAN SHACK:  I'd like to come back into session.  We
     have a presentation from the ASME and Jerry Eisenberg and James Perry
     start.  And I see some other gentlemen -- I'm sure they'll introduce
     them.
         MR. EISENBERG:  Thank you very much.  I'd like to thank the
     Committee for this opportunity to express our views on this important
     subject.  I'm Jerry Eisenberg, Director of Nuclear Codes and Standards
     at ASME.  With me is John Furgeson, the current Vice President of
     Nuclear Codes and Standards.  James Perry, former Vice President of
     Nuclear Codes and Standards.  Owen Hedden from ABBCCE, current Chairman
     of Subcommittee on Nuclear In-Service Inspection.  And in the audience,
     Ray West who's a, from Northeast Utilities and a member of Subcommittee
     11.
         This morning, we'd like to summarize -- in the handouts in
     front of you, you'll see, we have ASME letters to the NRC and to the
     Chairman regarding this rulemaking.  We intend to provide a summary of
     that.  Also, to outline the important code changes over the last ten
     years and to provide a basis for supporting the retention of the
     120-month update.
         And with that, I'd like to turn it over to Mr. Perry.
         MR. PERRY:  Thank you very much.  It's certainly an honor
     and a pleasure to present our views before this august body.  As Jerry
     mentioned, there are three different handouts.  The letters that were
     sent in, both dated June 16th, reflect the views of the Board on Nuclear
     Codes and Standards, based on the committee members' or the board
     members' feeling, and the consensus of the majority of the people, as
     well as input from the effective subcommittees.  That also was discussed
     at the next higher level within the organization, at the Council of
     Codes and Standards, and was voted on unanimously, endorsing the content
     of the information in this letter.
         What was sort of unique and different in this instance is
     that the Council felt so strongly about this, they in turn made a
     presentation to the highest body of ASME -- that is the Board of
     Governors.  And the Board of Governors also endorsed it, and that was
     reflected in the letter signed by the, our president, Bob Nickell.  So
     that's a little bit unique, I think.  We don't normally get that kind of
     audience and support all the way up on every detail.
         The other point I'd like to make is that in the one handout
     that is titled "Important Section XI Subgroup NDE, Code Changes and Code
     Cases" -- that package sums 17 pages -- is additional material beyond
     what was presented in our letters, and I will try to walk you through at
     least some of that to give you a much better feel from a technical point
     of view. What are these changes that were made?  How relevant are they? 
     What's the impact of those?  What's the benefits?  And I think that I'll
     leave you with a little bit more ammunition than what was in our letter
     on specifics.  I think it would be helpful.
         Okay, the content -- next chart -- really parallels the
     information that's in our letter.  And I'll try to summarize that
     briefly.  Next please -- also the update.
         The staff in their proposal indicated that the costs run
     around $200,000.  NEI has much higher numbers.  And I'm not gonna
     dispute who's right or who's wrong.  Those are big numbers.  But a point
     that we want to make -- I guess there was an informal survey done by he
     Section XI Committee, with input from 7 people from different utilities. 
     The estimated average was around $200,000.  But it doesn't matter --
     whether it's $200,000, $300,00, $400,000, or what have you, that's a big
     number.  But I think the point we want to make is, that's a number that
     is spread out over a ten-year period.  In other words, if you make the
     update, it's a one-shot deal over a ten-year period before you do it
     again.  So if you annualize that, then the cost per year looks a little
     more reasonable.  But it's still a big number.
         Now the one-time cost adds significantly to the total and
     the point I want to make here is that if you look at what the Staff has
     required already, beyond '89 code, namely mandatory implemention of IWE
     and IWL on containment, which is in addition to what used to be in the
     ISI programs that utilities had to make.  That's a significant new
     increase.  So a large percentage of the dollars associated with this
     update are associated with what's being mandated by the NRC anyway,
     whether you update it or not.
         Secondly, Appendix VIII is a significant increase in the ISI
     program.  So all the changes necessary to make that happen, including
     procedures, I think represent a lion's share of the cost, whatever it is
     -- $200,000, $400,000 or so.  The other point I think that's significant
     is if you do not require future updates -- in other words, if you
     baseline it to the '89 or the '98 or whatever not in the future -- then
     you need to also factor into account the additional costs incurred that
     are associated with review fees necessary and costs on the part the
     utility and the staff in reviewing exemptions and relief requests to go
     with that baseline.  In other words, if I take the 1989 -- and I'll show
     you many of the changes and code cases that I think are very attractive
     for utilities to want to get approved, they would have to go in with all
     these exemptions and release requests, and those are not insignificant
     costs.  I think the Staff charges so much per hour for each one of
     those.  You multiply that by all of the licensees, you're talking big
     numbers and additional staff burden.
         If you were to impose the latest code, like what's in the
     regulation now, then I think you reduce -- because many of the changes
     they're talking about have already been incorporated in the code.  Many
     of the previous code cases are incorporated.  I think the numbers of
     exemptions and relief requests are considerably less, and it has a net
     savings on the utilities and the NRC.
         Next, we say the code is a living document.  You know,
     there's discussions as to whether it's mature or not. Certainly, you
     know, you can't argue that what we had in place in the past was not
     safe.  But I think we're talking about what knowledge we've gained, what
     experience we had, what improvements we've made, and it makes sense that
     you don't want to just sort of ignore those.  And I'll talk about
     changes that have big impacts on reducing radiation exposure. And I
     submit, those have impact on safety as well that and we can't ignore.  I
     mean, you know, ALARA is the lowest impact on safety, on changes.
         Changes result from new and improved inspection tests,
     materials and design methodology.  So I think we were going through an
     evolution here over a period of time.  Next, the changes also reflect
     lessons learned from over 30 years of experience and also respond to
     user feedback.  I'll just use one code case, as an example, in Section
     XI.  B. J. Welds code case.  That one, we admitted that we'd spent
     billions of dollars in the past to do inspections on these, and we find
     out that we're not getting a pay-back on it. So the change in that,
     based on the history and what's important and where to look and what to
     look for, including improved methodologies, we can reduce the number of
     inspections, reduce the costs considerably on B. J. Welds, and also have
     a much greater confidence that its safety-significant aspects were
     really improving the health and safety from that.
         Also the code moved from the prescriptive, repetitive type
     inspection we had in the past to tests that are more risk-informed and
     performance-based.  And I think we talked about that.  And there's pilot
     plants going on, a lot of action on that.  And we think that's the right
     way, right way to go.
         Also, numerous changes have occurred since the 1989 edition
     that really improve safety -- not only the ones that NRC singled out on
     the IWI, IWL and Appendix VIII, but we'll talk about a couple more
     besides.  In addition, there are many changes that have been made that
     really improve the industry standards and also reduce burden, reduce
     burden in terms of cost; reduce burden in terms of radiation exposure. 
     And respond to inquiries.  I think someone made the comment earlier that
     some of the routine changes that are made really pick up people who
     interpreted something wrong or misapplied it or really didn't get the
     right point, as we learn and get experience.
         The code is kind of complicated and you almost need to go
     through a maze to figure it out.  And so I think it's not uncommon for
     someone to err in terms of interpreting.  And these things are picked up
     as we get feedback.
         Now to support our contention here, we have some -- the next
     viewgraphs really go into some specifics.  And that's really, will be
     backed up by the handout that I have there.  But in summary, for exmaple
     in Section XI, just the changes to the code which are summarized on this
     chart that go from the 1989 version of the code to the 1990 addenda, and
     pick them up in terms of categories of changes, where IS is improved
     safety, IIS is improved industry standards, RRE is reduced radiation
     exposure to personnel, RR is reduced requirements, M is maintenance. 
     And as we get to the O&M code, they have another one -- IR, increased
     requirements.  So we had some where we increased.
         So what we've identified here is a breakout by each of the
     subgroups under Section XI.  The first has to do with the subgroup on
     nondestructive examination.  The next group is a subgroup on
     water-cooled systems.  Followed by the subgroup on repairs,
     replacements, and modifications.  And then of course last, dealing with
     FFTF and overseas plants, the subgroup on liquid metal cooling systems. 
     So you can see from this table that for important safety changes --
     there's a total of ten.  I might point out that all ten, the tables that
     are in this handout only address what the Committee and Subcommittee
     consider as the more important changes; roughly about 50 percent of them
     are saying they're more important.  All of those of course are included
     in the more important category.
         Second, on improved industry standards, you'll notice
     there's 124.  Of those, 55 are included in here as important changes. 
     On reduced radiation exposure, we show only one, and that's a hundred
     percent and that's covered in "more important."  Reduced requirements --
     there's 29, and 13 of those are identified as "important."  On
     maintenance, there's a total of 91; one of those maintenance items shows
     up as important.
         Now, the other thing that I'd like to bring to your
     attention is that if you take, for example, on page 1, in item number 1,
     this is part of the imposition of the ultrasonic requirements on
     performance demonstration tied in with Appendix VIII.  Off on, in the
     center we described the purpose and the benefits derived by this change. 
     Off on the right, you'll see we have a last column that says
     "classification."  The first indication code is, it's predominantly, the
     reason for this is related to improved safety.  But you'll also note a
     secondary purpose, which you can't ignore, and it has it taken credit on
     this chart, is that it also has improved industry standards, impact, and
     has a significant impact with respect to reduced radiation exposure.
         So I think the Committee did an excellent job of trying to
     summarize and categorize these, other than, you know, safety significant
     versus errata sheets and routine changes.  If we can take a look at page
     2 for a second, and if you look at item 14, that change involved
     improved safety and also improved industry standards as well.  If you
     look at item 21 on page 2, here we're talking about a change that
     relates to going to leakage test in lieu of hydrostatic tests, and that
     one has significant saving man-REM exposure, because it allows ten-year
     pressure tests to be conducted at nominal operating, and this recognizes
     the difficulty of hydrostatic testing with no value-added benefit over
     system leakage.  Plus, it also minimized the cycling of the plant, which
     is important from a safety point of view.  So that one has merit with
     respect to reduced radiation exposure, which in my view relates to the
     health and safety of the public, as well as improved industry standards.
         I could go on and on, but at any rate I don't want to do
     that.  Let me just go to page 6 --
         DR. POWERS:  What you've presented here of course is very
     interesting because we've seen another breakdown for a different period
     of time, prepared by NEI, which claims differently -- they claim lots of
     changes in punctuation and grammar and things like that.
         MR. PERRY:  Right.
         DR. POWERS:  Of course I'm tempted to ask you, does this
     square -- how does this square because it's a different period of time
     with them that all these changes occur between --
         MR. PERRY:  No, the ones that NEI had, and I'm familiar with
     that, addressed part of this period, not the total period.  They didn't
     look at the whole ten years.  We looked at the whole ten years.  I don't
     argue with what NEI had, but I think that they tended to make a grosser
     analysis of the changes, and what I'm talking about is a more detailed
     analysis by the people involved in the code.  I think it's more precise.
         DR. POWERS:  Sure.
         MR. PERRY:  And so when you break it down in not only what's
     safety -- and I think part of the confusion is that Section XI is gone
     to the point where trying to handle all these things during a meeting,
     they can't always get to the agenda so they have come up with a system
     that was suggested by Gil Millman of the NRC to classify these.  Is it
     predominantly, is the change predominantly based on safety?  Is it
     predominantly based on economics?  Or is it a maintenance item?
         DR. POWERS:  Let me ask you a different question.  And that
     is, people come out with an update to the code itself every three years,
     I believe.
         MR. PERRY:  A new edition, a new edition and a new edition.
         DR. POWERS:  So why aren't you in there lobbying the NRC to
     go to a 36-month updating?
         MR. PERRY:  If I had my way, I would --
         SPEAKER:  That's the question.
         [Laughter.]
         MR. PERRY:  We've had a lot of discussions with the Staff. 
     Part of the difficulty is what it takes them to go through the public
     review, CRGR, and so forth.  And so if you make it too frequent, they're
     caught in this maze here and can't get through it.  And so three years,
     I think, is one you can almost breathe, you know, and do it.
         DR. POWERS:  Yeah, I'm sure the three areas could be done,
     but I just --
         MR. PERRY:  But that's, that's one of my own.  That's one of
     my own personal feelings.  I think it'd be nice if utilities were
     allowed -- you know, and there are certain ones that are very active in
     the code, and see what's going on.  And I think it would be nice if
     they're allowed to update their program every three years.
         DR. POWERS:  Well, they're allowed to upgrade any time they
     want to, I suspect.
         MR. WESSMANN:  If I may -- this is Dick Wessman from the
     Staff, and if I may butt in on you for a minute, Jim, we recognize that
     from the '89 version all the way up to September of '99, it was an
     inordinate long time, and there's a long story and lots of difficulties
     along the way.  I don't expect that we'll ever walk into all those
     potholes again.
         When you look at the general scenario of what you have to do
     to prepare a rulemaking and go through CRGR and go out for initial
     public comment and disposition it and come back with a final, it should
     be able to be done in a 14- to 18-month period.
         And I think we've recognized we stubbed our toe badly in the
     past, and I want to represent to you, we're going to try to make that
     happen in the future and we started working on that 1998 version.  And,
     you know, regardless of how the path comes out on this, we'll have an
     opinion on the '98 version, either for voluntary use or for required
     use, depending on how this particular activity on 120-month update
     finally comes out.
         DR. POWERS:  The pay's of course a different issue here. 
     Really, the issue that I really wanted to get to the heart of was why
     you guys aren't in here just pounding the table and saying, by God, we
     come out every 36 months and every 36 months you up -- and I think
     you've given me your answer.
         MR. PERRY:  I think we'll discuss some of the impact in
     terms of, if you don't continue the update process, greater disparity
     and more confusion between what the regulators in Washington say, versus
     what the states mandate.  So the user just gets totally confused.  One
     says update every year, and the other says maybe you don't have to
     update at all.
         Okay.  I was --
         DR. SIEBER:  Maybe I could ask just one question that's sort
     of mechanical in nature.  Uh, the number, total 255 on this chart, that
     actually is the result of some double-counting?
         MR. PERRY:  No, no.  No, no, no, no.  We only count once. 
     What we show here are a hundred, or 80 of those 255, which the Committee
     said are important.  So you see, the heading says "important".  The ones
     that they don't consider as important are not included.  In other words,
     it was a big effort on the part of Owen's group to put this analysis
     together and present it to you now.  And so --
         DR. SIEBER:  Well --
         MR. PERRY:  -- we said, let's concentrate on the ones that
     you consider important.
         DR. SIEBER:  Just for the item number 1 on this document --
         MR. PERRY:  Yes.
         DR. SIEBER:  -- the classification has IS, IIS and RRE.
         MR. PERRY:  Yes.  Right, it only shows up on this table
     under IS.  In other words, whatever the first classification was, that's
     it.
         DR. SIEBER:  Okay.  All right.  Thank you.
         MR. PERRY:  Now, on page 6, at the end of each of these one
     of these subgroup write-ups, there's a summary.  And the summary in note
     1 shows on the left-hand column how many code changes there were -- and
     I think that kind of repeats what I have already shown you.  But on the
     right, which I haven't discussed at all, is the code cases and case
     revisions.  So these are ones that are not yet in the code, but these
     are options.
         Now the reason I didn't include them and didn't discuss them
     yet is that when we talk about going to the latest code, these are
     options that are not mandatory.  But they have a big impact on the part
     of utilities saying, hey, I think this is the latest thing, greatest
     since sliced bread and I need to implement that.  So now they come in to
     the Commission, if they haven't endorsed it by Reg. Guide, and have to
     get an exemption.  And now you're incurring additional staff effort on a
     --
         DR. BONACA:  I have question for --
         MR. PERRY:  Furthermore -- excuse me.  Furthermore, on note
     2, I think we do a better job of defining just what we mean by important
     safety, just what we mean by improved industry standards, and so forth. 
     Yes sir?
         DR. BONACA:  The question I had was to do with the
     involvement in fact.  I mean, clearly, looking at this table in general
     --
         MR. PERRY:  Yes sir.
         DR. BONACA:  -- shows to me that the utility has to have
     significant involvement with the ASME coding standards because of the
     update requirements, in part.
         MR. PERRY:  Yes.
         DR. BONACA:  Would you expect that involvement in this kind
     of, you know, information exchange would still take place if these, the
     requirements for the update is eliminated?
         MR. PERRY:  No.  I think the level of support and interest
     is going to less, and let me tell you why.  The pressure is on utilities
     to become more competitive in, in an environment, and I think they're
     looking at how can they reduce costs.  And if you look at short-term, if
     you're short-term oriented and say, how can I reduce costs -- if this
     not going to be mandated, I'm not going to spend the dollars to have
     people go to these meetings and pay for travel and wages.  So I think
     there may be a reduction there.  I think the emphasis will be probably
     more on code cases and not code changes.
         And a lot of the research that goes on in back of all this,
     supported by the Welding Research Council eventually get in changes.  I
     think a lot of that's going to go away.
         DR. BONACA:  I see --
         MR. PERRY:  So all this is built around 120 months update,
     but I think 120 months also makes sense from the point of view that the
     whole program is laid out so that you're looking at a ten-year interval
     to complete the entire cycle of all the inspections or all of the tests. 
     And further, when you get to the end of that period, you need to assess
     what's happened.  What have we found?  And what shortcoming and what
     things have we missed?  If you don't have the update, I don't think it's
     going to be done by all of the utilities.
         DR. BONACA:  Thank you.
         MR. PERRY:  Okay.  With respect to code cases that I don't
     show on this table, under the NDE group, there's 94 of those.  And under
     the water-cooled systems, 41.  Under the repair and replacement, 28. 
     And then under the metal, liquid metal.  So there's 163 code cases in
     addition to the code changes.
         I might point out that on page 7 through 9 is where you find
     the information on a water-cooled systems, 10 through 14 covers the
     repair and replacement, and the liquid metal-cooled systems are on page
     15 and 16.  So that gives you kind of a thumbnail sketch there.
         Now if I can just shift very quickly over to the next chart. 
     And here we're talking about an analysis of the operations and
     maintenance code.  And here, we're talking about what's changed from
     1990 edition to the present code.  This one kind of categorizes it along
     the same lines as the NDE did, except you'll notice that there's a new
     category near the bottom -- IR.  And that one says, the essence here is
     to increase requirements, so we added new things.
         To put this one in perspective, the first three -- improved
     safety, improved standards, and reduction in radiation exposure -- all
     of those are listed on your handout, on the last page, 17.  So this one
     was more abbreviated.  I didn't get the same degree of detail from O&M
     that I did from Section XI with respect to a more crisp description of
     the change and a summary of the benefits.  But let me just highlight --
         CHAIRMAN SHACK:  What's the difference between something
     that increases requirements and improves safety?
         MR. PERRY:  Beg your pardon?
         CHAIRMAN SHACK:  What is the difference between something
     that increases requirements and something that improves safety?  Why
     would I increase requirements without improving safety?
         MR. PERRY:  I have a breakdown on that --
         CHAIRMAN SHACK:  You just have a category, a new category --
         MR. PERRY:  Right.
         CHAIRMAN SHACK:  -- improved safety and increased
     requirements.
         MR. PERRY:  Right.
         CHAIRMAN SHACK:  And I assume that they're mutually
     exclusive, as they were on the original table.
         MR. PERRY:  Well I think that -- again, I think that what
     they're saying is that the primary basis of that change relates to
     either improved safety or increasing requirements or something.  And as
     we showed before on Section XI, many of the changes affect more than one
     class, but we only, we only showed it on what the primary classification
     was.  So I can, I can have a change -- for example, Appendix VIII of
     Section XI, improves safety, but it also increases requirements,
     guaranteed.  You know -- and improves industry standards, too.
         CHAIRMAN SHACK:  Yeah.  I can, I can understand improving
     safety while increasing requirements.  I can't understand increasing
     requirements without, say, reducing exposure or improving safety, you
     know --
         MR. PERRY:  I think you're right.  I think you're right
     there.  And if we look at examples, on page 17, for example, the
     comprehensive pump test is one that is classified as improving safety,
     but it also has to do with, in some instances, increasing requirements
     and so forth.  But I think it has to do with where you put the emphasis,
     how you perform the test, what the net benefits are.
         DR. SEALE:  But according to your ground rules, it only
     shows up the first time.
         MR. PERRY:  Whatever the Committee determined --
         DR. SEALE:  -- so you'll look under --
         MR. PERRY:  -- was the primary reason, that's right.
         DR. SEALE:  So you'd want to look under "valves" if you
     wanted to find out, a case --
         MR. PERRY:  right.
         DR. SEALE:  -- where you increased requirements without
     increasing safety, or industry standards
         MR. PERRY:  Well, the first thing is -- okay.
         So, so also, when you look at the valves, for example, Item
     2 on page 17 there, we're looking at condition monitoring and Appendix E
     for in-service exercising of check-valves.  So that's the basis for that
     and, yes, it's predominantly driven by improved safety.
         Under "snubbers," Item 3, there we're looking at service
     monitoring of dynamic restraints.  And that's a big improvement.  Now,
     so when you get all done, there's 51 changes in the O&M code over the
     last period, 9 years, that fall into these categories.
         In addition to the code changes, there were 11 code cases.
     And let me just highlight a couple of the code cases, which I think the
     Committee feels are rather significant, most important.  One of them has
     to do with the OM-1 code case dealing with motor-operated valves.  That
     has been endorsed by the NRC Reg. Guide, 96-05.  So we've had a lot of
     action with respect to MOVs and how do you make them work, how do you
     test better to make sure that they're gonna continue to perform
     satisfactorily when called upon?
         Three other code cases that are significant that were
     mentioned deal with the risk-informed in-service testing.  So that's OMN
     3 and 4 and 7.  So I'd just point out those 4 for your benefit, as well. 
     Okay, so that takes care of this handout package.  Back to the
     viewgraphs.
         The ASME process and system, in our view, provides what I
     call a multiplier effect, that is in direct support of the 120-month
     update.  Now what I mean by "the multiplier effect" is that ASME
     provides us with a real unique opportunity here in that it involves a
     collaborative effort of hundreds of volunteers working together toward a
     common objective of improving safety standards to protect the health and
     safety of the public.
         And with that forum, we're able to accomplish a lot over a
     period of time -- granted, you can argue it takes a little long, but
     it's been very effective.  And when you remove this, I think you lose
     that collaborative effort and collection of all this activity.  If you
     try to do it individually, either by utility groups or by specific areas
     or individual utilities, you don't have the same effect.
         Changes reflect operational experience to assure
     implementation of safety and ALARA considerations.  The broad-based
     balance group of experts that are on the committees that produce these
     code changes and code cases use the consensus process.  And the
     distribution of the membership in the ISI and IST really involve -- 30
     percent, roughly, are from utilites; 30 percent, consultants; and then
     the other user groups, like enforcement regulatory agencies,
     manufacturers, insurance companies, you know, inspectors, account for 40
     percent of the committee.
         CHAIRMAN SHACK:  Just, on this process, we know that there's
     no formal cost-benefit analysis.  Is there, in fact though, an explicit
     requirement to qualitatively discuss cost-benefit impacts?
         MR. HEDDEN:  You know -- this is, I'm Owen Hedden.  In fact,
     we have done explicit cost-benefit analyses on a number of items.  And
     over a period of time, the utility will come in proposing a change and
     they'll give us a basis for that.  And we'll check that with other
     utilities and get numbers on that.  The Appendix J code case that Jim
     mentioned is one that, in our suppoting material on that we had quite a
     bit of cost-benefit information in that.  But we do do that explicitly
     and have done that in a number of cases.
         CHAIRMAN SHACK:  Just how many of the, of the changes are
     brought to you by -- who suggests the changes to begin with?
         MR. HEDDEN:  Most come from the utilities, from our utility
     members.
         CHAIRMAN SHACK:  Thank you.
         MR. PERRY:  Okay.  User feedback on operating experience
     also results in changes to the code.
         DR. POWERS:  Let me come back to asking just a little bit
     about this broad-based balanced group of experts.
         MR. PERRY:  yes, sir.
         DR. POWERS:  -- that slide you have up there.  I'm getting
     more of an understanding of this, not in the, because of this particular
     code, but because of the efforts on PRAs.  As I understand it, what you
     try to do is keep, so that no group constitutes more than 30 percent of
     members, so you're gonna get some prejudice in the process, as I
     understand.  What I've never understood is, you have 30 percent
     utilities and 30 percent that are consultants.  I mean, why are those
     treated as the same?
         MR. HEDDEN:  Jim, could I answer that?
         MR. PERRY:  Sure.
         MR. HEDDEN:  Owen Hedden again.  They're not all consultants
     to the utilities.  We also have a number of consultants to the NRC that
     are on our committee.
         DR. BONACA:  Okay, so there are consultants -- consultants
     could be National Laboratory people that the
     Staff uses.
         MR. HEDDEN:  Yeah.  Yeah, we have a lot of National Lab
     people that represent us, for instance.
         DR. POWERS:  okay.
         DR. SEALE:  Do they fall in that category?
         MR. HEDDEN:  Yes.
         MR. PERRY:  Yeah, the rule is, whoever your sponsor is
     that's paying your way for attending these meeting as salary, what's
     their primary business --
         DR. SEALE:  Interest.
         MR. PERRY:  -- interest.  And that's what determines what
     classification you fall into.
         DR. SEALE:  And as Dr. Powers says, we can't have anymore
     than one-third from any one of these different sectors on the
     committees.  And the same thing is being applied, at least in Section XI
     where they, they try to maintain a balance as well.
         MR. PERRY:  I think that's healthy, because then you can't
     have any one group dominating.
         MR. HEDDEN:  In Section XI, we have about, more than 200
     engineers participating in our committees as members.  I think we have
     20 from the NRC, for instance, that are participating in one committee
     or another.  About a third, as we said there, are utilities
     representatives.
         So we have a lot of people involved and roughly 80 from the
     utilities, 70 or 80, plus other people who do comes to the meetings
     regularly, from utilities, from the manufacturers, and the consultants. 
     All these groups send people to the committee meetings and become
     familiar with their actions, propose actions, participate in the
     discussions that are not amongst those that are committee members.
         MR. PERRY:  Okay.  Also, you know, I think it was mentioned
     earlier by the NRC individual, that when you look at these changes
     individually, they may not be real significant, but when you kind of
     look at all of them cumulatively over a 10-year period and look at what
     the impact is, they do have a cumulative, significant, I think,
     beneficial effect that cannot be ignored.  And I think the proposed
     recommendation on the part of the Staff recognizes that by saying, well,
     instead of baselining in '89, we really ought to baseline what's in the
     regulation now, which is the more recent one.  So I think that speaks
     for that.
         Also, many changes relate to reducing examinations and tests
     and new methods for repair and flow analysis.  And the point I want to
     make here is that if you look at short-term gain, you could say, all
     right, the administrative costs are probably prohibitive; you don't want
     to make the update.  But if you were to make all these changes in your
     update to the latest code, the benefits gained by implementing these
     changes over the 10-year period where now it's less costly to do the
     examinations or less frequent some of these are done, or more improved
     methods, all of those savings, in our judgment, exceed the
     administrative costs of making change.
         It's almost like, if you're going to do a capital project,
     what's it cost and what's the return on investment?  And if it isn't
     reasonable, you don't do it.  I think the same thing is true here.  If
     you were to add up the reductions in implementation costs over the
     ten-year period, in our view, it exceeds the administrative costs of
     updating it.
         DR. POWERS:  If that's the case, why do we have to require
     it?  Why wouldn't the utilities just do as a good business practice?
         CHAIRMAN SHACK:  -- beat 'em off.  You'd have to beat 'em
     off from making these changes.
         [Laughter.]
         DR. POWERS:  That's right.  They would be sitting here
     saying, no you can't upgrade because we can't keep up with you.  And
     things like that, and why not?  I mean, we're getting in an era where
     people are looking at these costs --
         MR. PERRY:  I think it's the difference between short-term
     and long-term.  If I were in senior management and someone says, do we
     need to spend $200,000, $300,000 to upgrade the ISI if it's not
     required?  Hell no! I'm not going to incur that cost; I've gotta be
     competitive.
         DR. POWERS:  Yeah, but what if you were --
         MR. PERRY:  If you were to ask, here's what the benefits are
     and here's what you gain and here's a reduction of costs of the ten-year
     period and here's how it's offsetting the administrative costs, I think
     you might get a different answer.  Short-term gain versus long-term
     benefit.  I think we need to put it in proper perspective, all of those
     collectively, not just administrative costs.
         DR. POWERS:  I mean, people are fairly clever.  We've got
     lots of people coming out of MBA school that can do these analyses and
     say, here's, here's what the return on an investment of $200,000 is. 
     Help us here.
         MR. LEWIS:  My name is Steve Lewis, and I'd just like to
     comment on the point made by ASME.  And that is exactly the point of
     this whole issue is, is it ought to be that utility's choice to make
     that update, and that choice is driven by cost and return. And it's not
     how it's -- and if it is a cost over a ten-year period, then that has to
     be factored into the up-front cost.
         And several points that we've talked about that this cost is
     spread out over ten years, but the cost hits the budget in a single
     year.  And it has to be evaluated on a net-present value for the return
     gain.  If it's not, it's gonna cost me a half a million dollars, so
     that's $50,000 a year.  That's a half-million dollars for O&M that year. 
     That means a half-million dollars of other O&M activities are not going
     to take place in order to fund that mandatory update.
         But the point you made is, if there is return, then the
     utility would probably make the right decision to go forward with the
     update.
         DR. POWERS:  Right.
         MR. LEWIS:  Now this is separate of the safety issues.  This
     is just, do I do an update in order to gain the benefits gained by new
     code rules.
         DR. POWERS:  Right.
         MR. LEWIS:  So I agree, I think you've made a very valid
     point.
         DR. BARTON:  I think people are looking at ten years, and I
     think they're looking at payback over the next year or two.  And if they
     can't get it the next year, year or two, forget it.
         MR. LEWIS:  But see, all the inspections are spread over a
     ten-year period, so your payback is never in one year.  Your payback is
     always spread over ten years.  I made this very presentation --
         DR. POWERS:  The fact is that I know a lot of things where
     you can get paybacks -- where calculations are done on paybacks longer
     than ten years, just because of the tax law.
         MR. LEWIS:  That's right.
         DR. POWERS:  So people can do the analyses.
         MR. LEWIS:  Right.
         DR. POWERS:  You know, which I may be right, that if the
     management psyche is such that if somebody comes forward with something
     they only ask about the two-year payback, which I agree with them is
     very common now in capital projects, to ask what the two-year payout is. 
     And if they don't want to hear about the ten-year, then we're not gonna
     do the cost-benefit analysis.
         MR. LEWIS:  But these aren't capital activities; these are
     O&M activities.  This comes directly out of maintenance budget.
         MR. PERRY:  But I submit that the driver for this
     supplemental proposed change in the rule was only identified as a burden
     reduction, so that's why we're trying to emphasize the cost aspects of
     it.  But I think that ASME's views -- and I know the NRC's views -- are
     that the responsibility that we have is broader than just cost
     considerations.  In other words, we shouldn't be driven by somebody that
     says, I'm only going to look at the economic impact.  We certainly ought
     to be looking at it from the point of view of protection of the health
     and safety of the public and what really makes sense.
         
     DR. SEALE:  I would agree with you, but going back to this question of
     longer-term costs and so on.  The nature of the cost-related activities,
     beyond the implementation of the up-front costs that we've already
     talked about, you use the words up there "individual" and "subtle".
         MR. PERRY:  Yes.
         DR. SEALE:  And it would seem to me there's a large issue of
     the copycat syndrome here in terms of identifying ways where you can
     reduce costs.  And it's only after someone has gone through and done the
     detailed analysis and come up with the concept and implementation of a
     specific way to apply these changes, that you really can determine then
     what the consequences are in reducing costs. So it's a lot -- the
     potential reductions are iffy on the front end.  You have to, you really
     have to have examples before you --
         MR. PERRY:  They're not precise.  They're not precise.
         DR. SEALE:  That's right.  And they may not be the same for
     every plant type, you know.
         MR. PERRY:  That's true.
         DR. SEALE:  BWRs may be different from PWRs in respect -- we
     know that.
         MR. PERRY:  And that's the decision the utility makes as to
     whether it --
         DR. SEALE:  But it's usually buried down the road, and it's
     only if the enabling decision up front is made that you even have the
     opportunity to examine those changes.
         MR. PERRY:  Okay.  Next chart.  Okay, we made a statement
     that deleting the updating requirements, in our view, appears to be
     contrary to the spirit of the public law 104-113 in OMB Bulletin A119.
     And what we mean by that is that the current process that we've been
     using for, I don't know, 30 years or so, which is a ten-year cycle and
     ten-year update of the programs, really is proven and it's successful.
         And I can tell you a personal experience at one utility I
     worked at where we had a real awakening at the end of the ten-year
     interval on in-service inspection because we really found -- this was an
     old plant, built to the P31.1 -- that what happened is that we lacked
     proper checks and balances; we had left it to the ISI manager at the
     plant and he had consultants doing the inspections.  And they found that
     many of the wells, for example, were supposed to have been UT'd.  The
     note was written, "Can't do it because the well condition doesn't allow
     for it."  It wasn't ground; it never was intended.  And it got thrown in
     the filed; it never was done.  When we got to the end of the ten-year
     period, we had hundreds of those.  The more we dug, the more problems. 
     That's just one example how all of these things tie in, where you do an
     assessment, an evaluation, a critical one, look at these.  I think when
     you have to update, it causes you to revisit these things, and there's
     really benefits there.  Now, many utilities are gonna do that
     automatically.  But I submit, many won't.  It depends on the pressures
     of management.
         Next, I think that the evaluation and reports, as stated by
     the Staff in their notice, public comment on this proposal, said that
     they recognized that by doing away with the ten-year update, they will
     probably have to do evaluations and submit reports to OMB according to
     this, so that's an increased burden on Staff that you wouldn't have to
     go through if you continue the process of updating every ten years.
         By the NRC applying only selected parts of different code
     editions and licensees -- when you talk about what was in the proposal,
     the 1989 baseline plus the changes for the IWE/IWL, changes for Appendix
     VIII to different ones, now you're causing all kinds of perturbations
     that make it difficult.  And I maintain, the code is rather complex in
     itself, and when we come out with revisions, we're not saying you ought
     to be just taking this out of context and not seeing how it impacts that
     part.  So it becomes more complex.
         Last, I think that the rulemaking creates greater
     inconsistencies -- and I think this was addressed in the Staff comments
     -- between the Federal requirements for what's the current version that
     you use versus what the states require.  Many states require updating
     requirements each year, you know, whatever the latest code is.
         DR. POWERS:  I'm intrigued by the title of your slide.  It
     says that "contrary to the spirit of the public law."
         MR. PERRYY:  Yeah.
         DR> POWERS:  My impression, operating a little bit from
     memory, that the spirit of the public law was for government agencies to
     use consensus standards rather than creating their own, wherever it as
     possible and fit their needs.  That was the spirit.  And I guess I don't
     understand why any of the options that the Staff has presented to us
     would be contrary to that spirit.
         MR. PERRY:  When we talk about the spirit, Dr. Powers, we're
     saying, you know, if there is a consensus standard out there that is a
     right thing to do, then the government agencies ought to endorse that as
     opposed to writing their own.  Now I submit that the requirements up to
     now ahve been to update that to the later requirements as a matter of
     routine, 50.55a.  So in terms of the practices, that was a given. 
     That's been done.  Now we're gonna change it.  And according to the
     Staff's own analysis, if they change -- according to their
     interpretation, not mine -- they're gonna have to now do an evaluation
     and they're gonna have to submit reports to OMB on this change, based on
     that public law.  That's my understanding.
         MR. WESSMANN:  I guess, Dr. Powers and Tim, if I can butt in
     again on you, let me at least comment on that a little bit.  John Craig
     and I, we talked on that on the break a little bit -- and John Craig is
     the agency standards executive, and I think our local expert on the OMB
     119.  But our perception is, we are not at odds with the spirit and the
     intent of the public law.  If -- and I take a more extreme example to
     try to illustrate this -- if we decided that we wanted to impose a new
     requirement on how to test a pump or a valve, and we wrote that into the
     regulations, as opposed to searching the ASME codes and determining,
     gee, is that requirement already there for working with the ASME
     committees and going through the ASME process and, and marketing that
     proposed new way of testing the pumper valve?  And to some degree, the
     whole evolution of the MOV testing was some stimulus from the staff
     driven back towards the original static tests of valves that we felt was
     not good enough.
         We worked through that spirit and the process of the OMB
     law.  The idea of replacing the required 120-month update with a
     baseline, and then continuing to endorse for voluntary use with whatever
     limitations that we might see that, for the regulatory purpose, might be
     appropriate as a limitation.  I think -- we think it's still consistent
     with the spirit of the law.
         DR. POWERS:  It seems to me that all the options, every
     single one of them, seems to be inconsistent with the spirit --
         MR. PERRY:  Yes, sir.  That's our --
         DR. POWERS:  I actually understand the spirit now.
         MR. PERRY:  Now, we may have confused ourselves a little bit
     in the public comment period or something.  I can't recall.  But that's
     our perception at this point.
         DR. POWERS:  If in fact there's any deviation from the
     spirit of the law, then I would say it is not mandating the 36-month
     update.  And I think that's what gets you in that trouble is -- if what
     you have now is against the spirit of the law, then not requiring the
     36-month is against the spirit of the law.
         MR. PERRY:  Yes.
         CHAIRMAN SHACK:  But it's less against the spirit to update
     every 10-months, right?
         [Laughter.]
         MR. PERRY:  I think all we're saying is, in our view it
     appears, when we talk about the spirit, we think not the letter, but the
     spirit.  So it's a judgment call.  But I think it's not the total issue,
     but it is a consideration.
         DR. POWERS:  And I think you for reminding us of this public
     law, because it is an important consideration that we --
         MR. PERRY:  Right.
         DR. POWERS:  But I think we're on safe grounds here.
         MR. PERRY:  Yeah, and I think -- I'll have to admit, by
     comparison, when I look at all the government agencies, NRC is out front
     and has been in terms of endorsing codes and standards.  And so I don't
     want to say they're not doing it.
         DR. POWERS:  Here and everywhere.
         [Laughter.]
         MR. PERRY:  Okay.  The benefits outweigh the costs in our
     judgement, because we feel update cost, we think, is not significantly
     different from the costs associated with release requests that are
     utilized without the update.  So I think there's some compensating
     factors here.  And I think that one number that I think Ray West has in
     his submittal, a letter he wrote on code cases -- if you were to ask the
     Staff to consider adoption of a code case, depending on whether you're
     doing it individually or a group of utilities collectively, that cost
     for that one code case could be somewhere between $15,000 and -- how
     much did you say?
         MR. WEST:  Provided it was done as a rule --
         MR. PERRY:  Right.
         MR. WEST:  -- develop the code cases through ASME to request
     relief, it's about $15,000.
         Ray West, ASME.  If you have a code case that went through
     ASME, as a, an industry effort-type code case and it's recognized as
     such, then normally about $15,000 to process that through and get it
     approved by the NRC.  If as a utility you come in with a relief request
     and you want to request a relief from a code requirement, that could
     range anywhere from $15- to $500,000, depending on how much effort you
     have to put in and the Staff has to put in to justify that.  Those were
     the numbers.
         MR. PERRY:  So I think these are significant numbers, not
     only a burden on utility but a significant burden on Staff.  And I think
     when you look at the proposed rule change, we talk about allowing, not,
     you know, voluntary implementation and allowing to cherry-pick, then
     that has to go back to Staff.  I don't think they really assess what the
     impact on the Staff is, and I'm not sure all the Staff is that familiar
     with the ins and outs of the code. And so that creates another question
     as to the validity of the sanctions.
         I believe when you talk about the people in the regional
     offices and inspectors at the plant, they're gonna pull their hair out
     with all of these things.  We already have had problems under the
     current rules, where somebody's misinterpreting what the code says, and
     misapplying it in some cases.
         Okay.  Also, revisions and code cases since 1989 are
     collectively in our judgment safety-significant and also replace, reduce
     personnel exposure.  And I think we talked about that.  Updating --
     maintain some more current, consistent, and uniform standard for the
     industry.  And I think -- you know, I've been in this business for forty
     years and I've heard the NRC for forty year.  And it seems to me that
     the theme up to now, excluding this one, is that we want
     standardization, we want uniformity, we want consistency.  And this one
     flies in the face of that.  You're gonna have greater variations between
     utilities on this, and greater variations for the Staff to evaluate, if
     it's selectively applied.  Updating minimized separate submittals and
     evaluations on a case-by-case basis between utilities and NRC, and I
     think that talked about the costs associated with that.
         I think one of the benefits of NRC doing their analysis and
     endorsing a later code is, it's a big effort but you do it once, it's
     done, and it applies across the board.  Either it's acceptable or it's
     not.  It's acceptable with these additions.  That's it. When you do it
     on a case-by-case basis, it's much more costly.
         Without updating, future changes become voluntary and
     licensees' programs are going to vary greatly.  And we think the
     regulatory oversight is gonna be much more difficult, and lack of
     standardization consensus --
         DR. BARTON:  Does that comment still pertain when you figure
     down the road you're gonna have maybe ten operating companies operate in
     a hundred plants instead of 90 or 70 companies operating in a hundred
     plants?
         MR. PERRY:  I think that supports our position in terms of
     administrative costs, because I think that what you'll find is that
     they're going to say, let's standardize.  If I've got ten plants, I want
     to have one ISI program and try to fit it.  Maybe just -- mine are
     unique differences peculiar to that plant.  So that's gonna reduce the
     cost per ISI program update or IST program per plant.  That'll help. 
     That'll help the NRC.  But you're still gonna have variations if you
     say, we want to make this non-mandatory, and they're gonna voluntarily
     pick these between those ten or twelve utilities.  And the Staff's gonna
     still have to evaluate those on a case-by-case basis.
         As I understand the proposal, as it came out, said if the
     Staff endorses a later edition and you elect to pick it up, then you can
     do it without getting Staff approval.  That's fine.  But if I want to
     cherry-pick, since the Staff's gonna be the experts and decide whether
     or not you did it right, whether you've misapplied it or whatever.  So
     that's a big burden on Staff that could be avoided if you continue the
     120-month update.
         Updating also focuses on evaluation of the entire program
     and identifies deficiencies and forms the basis for making corrections
     and enhancements.  I can't emphasize this too strongly.  I think you've
     got two kinds of utilities out there.  You have one that's proactive and
     interacts with the code and is involved in it day-to-day and knows what
     it's all about -- what's happening, what's changing, and why.  And I'm
     not worried about those.
         The ones I am worried about, frankly, and I think the NRC
     should be and probably is too, are those that don't participate, that
     choose not to participate.  They come to the meetings every ten years
     just before the update and try to play catch-up.  They're not that
     familiar with it.  And whether they do the same degree of scrutinizing
     and analyzing and determining how effective the ten-year inspections and
     tests are and what changes we need to make is where I have the real
     concern.
         And as you go through organization changes and changes at
     transfer of responsibility, I think there's a degradation that could
     take place over the years that I would be fearful of, and NRC Staff is
     faced with reductions in budget as well.  And so, they've backed off in
     terms of the overview at the utilities with respect to ISI teams going
     in there and doing in-service inspections.  They don't do that like they
     used to, to the extent that they did.  So they're more reliant on
     utilities.  So I think there's other considerations here beyond just,
     you know, the update.  What takes place during that update?
         In summary, I think keeping the 120-month update maintains a
     stable system which works and is proven as an integrated approach to
     safety improvement and burden reduction.  I would maintain that I
     welcome the Staff's position about going to the later code.  I think
     that's good.  But the analysis that I wanted to, that I showed you with
     respect to all of these changes I think applies whether I'm looking at
     the changes from '89 to '99, or whether it's '99 to '109, or whatever. 
     We're gonna have a similar thing.  If it makes sense that collectively
     over a ten-year period these, these should be done, then I don't know
     why we would even need to go to doing away with the update period.
         I heard the Staff, well, if we use the 1998 as the update,
     we make, we don't know what's gonna happen in the next thirty years.  We
     might decide we want to change the baseline in 2010.  So why change the
     rules if you think you might do that?
         Updating of IST and ISI programs for a plant, we believe, is
     necessary.  Whether it's mandatory or non-mandatory, we think it just
     makes sense.  And I think the comment was made very well, the better job
     we can articulate in ASME on what the benefits are, the utilities will
     beat down the door wanting to make those changes.  And I think we're
     getting a little smarter and doing a little better job on that.
         The cost of the 120-month update we think is relatively
     small, and that the implementation benefits over a ten-year period, in
     our view, outweigh the administrative costs of the update.  The proposed
     rulemaking, we think, creates greater inconsistencies between Federal
     and state agencies that we think adversely impact on the users and
     insurance companies that try to enforce this as well.
         Maintaining the 120-month update, we think, facilitates the
     regulatory oversight, better serves the common objectives of public
     safety.  In conclusion, we're saying, maintaining the update process is
     the right thing to do.  It works and we think it ought to be continued. 
     Thank you very much.
         DR. POWERS:  you indicated a substantial number of years of
     experience in this area.
         MR. PERRY:  In the nuclear field, not necessarily in the ISI
     and IST --
         DR. POWERS:  Let me -- I'll still ask my question.
         MR. PERRY:  Sure.
         DR. POWERS:  And that really relates to technical innovation
     in this field.  Your perception of whether we're going to see rapid
     technical innovation in this field as far as the technologies that are
     available for doing inspections, or is it going to be a relatively
     static field?  I'm thinking over the next 20 years.
         MR. PERRY:  I would say, Dr. Powers, that in my view, the
     one that the NRC is in 100 percent agreement and we've been working hard
     with them on it has to do with the risk-based in-service inspection and
     tests.  And there we're talking about the use of the probabilistic risk
     assessment tool as a way to really focus more sharply on what is really
     risk-significant.  And to put more emphasis on that with respect to
     better types of inspections or methods of testing and techniques and so
     forth, and even reconsideration in terms of frequencies.  And
     conversely, diverting more resources toward that and less on those that
     are less safety-significant.  I think that's the right way to go. So
     there's one example.
         And I think that many of the changes that we've looked at
     dealing with condition monitoring and that sort of thing really have a
     good impact.  So in terms of the future, I don't know, but I can tell
     you that what's happened in the last ten years, if it's any indication
     over the next ten years, if we continue the 120-month update; I think if
     we don't, I think then that the body that's out there now isn't going to
     do the same job.
         Also, from ASME's point of view, we really are looking at
     this as an international code.  And Jerry Eisenberg and I, for example,
     spent some time this year in Japan and in China.  And I can tell you
     that there's two examples where whatever the NRC says, that's the way
     their government mandates.  So there's lots of plants being built in
     Asia and elsewhere that are based on code requirements, are based on
     what the NRC mandates, that really helps protect the health and safety
     of the public beyond just the boundaries of this country that we ought
     not to stop and forget about.
         Secondly, you know, even though we don't have a resurgence
     in nuclear today, we don't have any new plants, there's advanced
     reactors being built overseas and I think one of these days -- hopefully
     in my lifetime -- we may see a resurgence of nuclear in this country and
     I think it behooves us to have the best available codes and standards
     that can be applied from the get-go on those new plants.
         DR. BONACA:  I have a question to do with, clearly an
     important criteria to decide which way to go, it's the rate of
     significant changes that you expect to see in the standards.
         MR. PERRY:  Yes.
         DR. BONACA:  And the question I have is, do you expect to
     see any significant changes coming from, you know, license extensions,
     plants aging beyond 40 years and going to 60 years, and -- or are you
     foreseeing pretty much the current ISI/IST problems to be --
         MR. PERRY:  I would say that the Section XI and O&M
     Committees are cognizant of the question of plant life extension and the
     importance of that, and so they take that into account. So
     incrementally, as they go through, this is part of the consideration. 
     And I think if you were to ask, are there things that we don't have in
     the code now that we know of that really should be tied to plant life
     extension, we would say nothing beyond what we know now, but we're still
     getting more data based on input.
         MR. HEDDEN:  I had, I had a couple of things, one of which
     does respond to Dr. Powers, as to new things that are coming.  And one
     of them applies to what you're asking too.  Two things that I can see
     that are coming along that may affect, have a large affect on the code.
     One is real-time monitoring of the plant with instrumentation to see
     what's, if we have deterioration, if we have cracking occurring.  That's
     something that acoustic emission may finally be able to do.  They've
     been promising they were going to do it for the last thirty years.  The
     other one is the environmental effects of fatigue, which some of you
     people are involved in.
         DR. POWERS:  Those technical innovations I think are, look
     promising, and I have no idea what that's going to do to it.  But I know
     that the Department of Energy, for instance, is funding a study to do
     this, some of this acoustic emission and detecting not -- changing from
     having maintenance on a prescribed schedule to when you need it.  And I
     can see the same thing happening here, that instead of doing inspections
     of piping based on some formula of time and some formula of, fraction of
     the piping that you look at, to do it in a needed basis, in a needed
     area.  It would certainly be something that would be in the bounds of
     thinking for the next twenty year -- not ten, but twenty years.  I could
     imagine that happening.  Maybe not on existing plants, but maybe in new
     plants.
         And those kinds of things -- any time people start
     forecasting end-of signs, I know that they, that that's usually
     indicating that there's gonna be some great leap.  What had happened at
     the turn of the century when people were predicting the end of science,
     relativity and quantum mechanics came along and survived.  And it seems
     to happen fairly regularly.  Biology was proposed recombinant DNA
     research.  So I think maybe we do have the same situation here, because
     of these very advanced thoughts on going away from a prescribed interval
     to as-needed.
         DR. SEALE:  I think there are other points too.  I'm in a
     much more mundane area.  I would wager that no one in this room really
     expected the explosion in the capability to do steam generator tube
     inspections that's taken place in the last ten years.  And there may be
     all kinds of changes in other things having to do with other hot-button
     issues like reactor internals, things like that that we, that are just
     percolating now underneath the surface. And they may very well emerge as
     --
         DR. POWERS:  Yeah, what's advanced today becomes the code
     standard technology tomorrow.
         DR. SEALE:  Um hmm.
         DR. POWERS:  And what you see is this, innovation breeds
     innovation.
         DR. SEALE:  that's right.
         DR. POWERS:  That, once something starts on the pathway down
     to improvement, you get a lot before the momentum runs out.
         DR. SEALE:  Yeah.
         DR. POWERS:  And certainly your example of the steam
     generator is a case in point that I still think has not played out.
         DR. SEALE:  Yeah.
         DR. POWERS:  Because I certainly have seen DOE proposals on,
     on some marvelous technology for steam generators tube inspection about
     the time all the effective steam generators tubes are gonna be plugged
     or replaced.
         CHAIRMAN SHACK:  Are there any more questions?
         [No Response.]
         CHAIRMAN SHACK:  If not, I think we have two more
     presenters. Mr. Lewis from Entergy.  Thank you very much.
         MR. EISENBERG:  Thank you.
         CHAIRMAN SHACK:  This compilation, which I realize must have
     been an enormous piece of work is actually very helpful.
         MR. PERRY:  You can thank Owen for that.
         DR. POWERS:  That's definitely a keeper.
         CHAIRMAN SHACK:  Mr. Lewis.
         MR. LEWIS:  Good morning.  My name is Steve Lewis.  I am
     with Entergy and I appreciate the opportunity to come and address such a
     distinguished panel as this.  I am on your agenda to provide a utilities
     perspective on the issue of elimination of the 120-month update.  And
     actually, I hope to provide something more than that.  In addition to be
     an employee of a utility, I have been in the nuclear business for 22
     years, and that entire 22 years has been dedicated toward the
     implementation of ASME rules in both construction and operational
     phases.
         Additionally, I'm a voting member of ASME Section XI, and
     have been for about 13 years.  And I am also the technical Chairman of
     the BWRVIP assessment committee, so I have an array of industry
     initiatives.  And I have to admit, when Entergy initiated this action
     several years ago to eliminate the 120-month update, I personally was
     adamantly opposed, and that was due to my personal attachment to Section
     XI and all the good things that Section XI does.  It wasn't until I had
     time to look at this closer and to become more exposed to industry,
     industry initiatives that I have come to understand the significance of
     this issue and the right thing to do.
         The early publication of Section XI established initial
     goal.  In fact, it as a philosophy section provided in the early
     publications of Section XI.  And the philosophy of Section XI in the
     early '70s was to provide an assessment of the general overall condition
     of safety-related pressure boundaries by sampling, with emphasis on high
     service factor areas.
         The early editions of Section XI established a ten-year
     interval.  And that ten-year interval was established at the time in
     trying to complete these examinations and to control even distribution
     of these examinations over a given time.  In the early editions of
     Section XI, it was specifically stated that once the edition and addenda
     of the code was assigned to the operating facility, that that was the
     stated edition and addenda for utility life.  It was not a requirement
     of the code to update to every ten years.
         Section XI, not unlike any other industry standard, required
     time to evolve to reach its optimum effectiveness on its initial goals. 
     As such, it has gone from 22 pages in the early '70s to almost 800 pages
     in the 1998 edition.  It has gone through significant scope changes to
     expand itself to all safety-related pressure boundaries.  It has added
     repair/replacement rules to where it used to depend totally on the
     construction codes.  It has worked real hard to eliminate dependency on
     the construction codes in the area of flaw evaluations and acceptance of
     conditions.
         Luckily, in this timeframe the NRC had the foresight to
     require ten-year updates because if it had been followed the way Section
     XI started, we would have stuck with thsoe 22 pages, or 40 pages, or
     something that size.  However, we have gone through this timeframe for
     almost 30 years now, and it's time to determine, is it time to change? 
     Do we need to do business a little bit differently.  And that's what I
     think the issue is here now.
         CHAIRMAN SHACK:  But we -- well, maybe you should go through
     -- let me make my pitch now.  We went through all the good things that
     might happen that would require updates, but isn't this also a
     self-limiting process?  I mean, you know, people don't go to Section XI
     because there are wild and wonderful meetings held in luxurious resort
     areas.  I mean, you know, they're work.  These are not frivolous
     suggestions, so that if there are changes made, there are changes
     because a consensus of a wide body of people believe that they're
     significant changes.  So --
         MR. LEWIS:  Right, and I'm gonna address that in a few
     minutes.
         Section XI today, which is at the '98 edition with the new
     addenda coming out still provides an assessment of the general overall
     condition by a sampling process with an emphasis on high service areas. 
     It still uses a ten-year interval to establish a timeframe for
     conducting the exams and for even distribution of the exams.  However,
     it now refers to 50.55a for determining the effective edition and
     addenda.  Section XI itself has not yet established a position, at least
     within his code body on how often it should be updated.  It still relies
     on Federal law to specify the update period.
         Probably one of the most fundamental questions that has to
     be addressed by both the licensees and the NRC staff in addressing this
     issue is the effect on safety.  That is probably the utmost concern on
     what happens if we eliminate the mandatory 120-month update.
         As with Entergy, we elected to go to the '92 code for all
     five of our units, instead of the '89 code.  In that process, we were
     asked by the Staff to do an evaluation between the '89 code and the '92
     code and identify all changes.  Excluding IWE/IWL and Appendix VIII,
     between the '89 code and '92 code there were 184 changes -- 77 were
     editorial, 8 were errata, 22 were reduced requirements, 52 changes were
     no change in requirements, and 25 were increased requirements with no
     measurable or identified needed change to safety.
         DR. POWERS:  We've seen a breakdown that went the next seven
     years, so I take it between '92 and '99, a whole bunch of safety things
     came in.
         MR. LEWIS:  I think ASME identified a total of ten safety
     changes total, for the whole ten-year period, in their presentation.
         DR. SEALE:  Are you suggesting that none of those were in
     this '89 to '92 period?
         MR. LEWIS:  Well, there may be a difference in definition on
     what's a safety change.  If you look at ASME's definition, it doesn't
     meet the typical definition that's used by the regulators and the
     licensee for identifying improvement to safety.
         Any change in requirement can somehow be construed as an
     improvement in safety.  But that's not necessarily the appropriate
     approach, as we all know.  First identified, need has to be identified
     to, that there are changes needed before we impose an increased
     requirement.
         DR. SEALE:  And using that definition, none of these, in
     that period of time, satisfies it.
         MR. LEWIS:  That's correct.  A lot of the increased
     requirements or increased requirements for the administrative process,
     the documentation requirements, methods of administering eye exams,
     those type of things.  They are increased in requirements.  They may
     even be some improvements.  But are they a measurable change in safety,
     and was there a needed change in safety identified?  The qeustion has to
     be asked before you evaluate the changes to safety.
         CHAIRMAN SHACK:  You would agree, Appendix VIII though, in
     some sense, is important to safety?
         MR. LEWIS:  As stipulated by regulation, absolutely.
         [Laughter.]
         CHAIRMAN SHACK:  That's --
         MR. LEWIS:  What I'm getting ready to talk about now is in
     now way a reflection on Section XI's performance.  Section XI has done
     an absolutely wonderful job.  I work very closely with Section XI and
     they have the right goal in mind.  They provide a fundamental base
     program for ensuring structural integrity of safety-related piping
     systems and their supports.  However, Section XI is not the go-to place
     for all safety issues.
         Just looking since 1979 -- and I only looked at generic
     letters; I did not look at notices, bulletins, other regulatory formats
     -- I identified real quickly 25 generic letters addressing safety issues
     that either met directly with the Section XI scope or very close to it. 
     And I found that most of them still have not been addressed by Section
     XI.  I identified just a couple to, that I thought everybody'd be
     familiar with.
         Generic Letter 81-03, IGSCC in BWR piping -- as old as that
     is, that still has not been -- Section XI has taken no actions to change
     its rules to address IGSCC in BWR primary piping.
         CHAIRMAN SHACK:  Well, you could argue that Appendix VIII is
     largely a reaction to the fact that you couldn't find IGSCC by the old
     methods.
         MR. LEWIS:  Not really.  There's nothing in Appendix VIII
     that specifically addresses itself toward IGSCC.  There has been an
     agreement between the NRC and the industry that we will allow the
     three-party agreement that was between EPRI, the regulators and the
     licensees to be built upon the PDI process.  So you can go read Appendix
     VIII and there's nothing there that would take you to the issues
     associated with the IGSCC.  One issue.
         Secondly, in addition to the detection problem, there's also
     increased scope, increased inspection populations and inspection
     frequencies.  Those have never been addressed either.  So there's more
     than just a personnel side.  There is what I look at and how often I
     look at it.  Section XI still says I do 25 percent of my Class-I
     population once every 10 years, which we supplement that with regulatory
     guidance.
         Other issues, Generic Letter 81-11, feedwater nozzle
     cracking.  Generic Letter 83-15, Reg. Guide 1.150.  And probably the
     majority of that reg. guide has been picked up by Appendix VIII.  89-08,
     erosion and corrosion-induced pipe wall thinning.  92-01, RPV integrity;
     94-03, IGSCC core shrouds.
         The message I want to leave here is that Section 11 is not
     the only place we go to for addressing safety issues.  The format and
     process that section has built in is a very protective process, as
     described by the ASME representatives, is made up of a large industry
     body that requires a consensus process, there is a very torturous path
     that a proposed action goes through before it becomes ASME rule. 
     Unfortunately, that does not lend itself conducively to addressing
     emerging safety issues.  So it takes the ASME-based program combined
     with industry initiatives and regulatory licensee interaction to address
     emerging issues.  And with those two efforts, we end up with a safe
     piping system.
         CHAIRMAN SHACK:  These tend to be reactive efforts that the,
     you know, I would look at the base program as kind of a defense in
     depth, where in fact, you know, you really don't have an identified
     issue, but you're doing inspections without really, as a defense in
     depth measure to assure yourself that in fact that high-quality piping
     system remains high-quality.  Here you've identified specific problems
     and you're addressing those.  The industry programs identify specific
     programs.  It's this notion that there is a defense in-depth element
     here, that you're trying to look for problems that might be arising.
         MR. LEWIS:  Absolutely.  Absolutely.  In fact, if you look
     at most utilities' ISI programs, you will find the base Section XI
     requirements, then you will typically find a -- fuzzy word, we call it
     augmented requirements.  And those augmented requirements come from all
     these extra programs that we do to combine a total effort to address
     these issues.  And they are reactive programs, but they do become a
     normal way of business for the licensee.  They do evolve and build
     themselves into the licensee program for the remainder of the plant
     life.  So they end up becoming part of the base program itself.
         BWR VIP is probably a very good example of what's happening
     there.  When that program reaches technical completion, you will
     probably see -- you will have to see substantial submittals requesting
     the use of that in lieu of Section XI for those portion of the rack
     controls that are under Section XI jurisdiction.  Compliance with the
     Section XI rules, as we know in rack controls, may not result in the
     safety level that we're looking for right now as being identified within
     the BWR VIP.  So, there's the base program and then there's all those
     things that we have to do to maintain that top level that we're all
     looking for.
         Fortunately, for several years I was given the opportunity
     to be the Secretary to the Subgroup Repair/Replacement modifications. 
     And in that process, as was indicated, we were all tasked with coming up
     with a way to prioritize our workload.  The Section XI agenda is an
     enormous agenda.  Utilities, consultants, manufacturers are always
     coming forward with new ideas, new technology that we're pursuing code
     endorsement of.
         For four years now within the Subgroup RM, we started
     tracking all the agenda in the computer database and we established a
     method of assigning priority to those actions.  And the actions that
     were determined to be safety significant or actions to address safety
     issues were given the highest priority.  At the last time I checked, a
     few months ago when I prepared this, there was 174 both open and closed
     items on the Subgroup RM's agenda, and none had been identified as a
     priority addressing safety issues.
         I spoke with the Chairman of the Subgroup on Water-Cooled
     Systems, and to his recollection he had a similar story.  For about the
     past four years, there have not been any issues addressing
     safety-significant issues.  What this has pointed to is that Section XI
     is reaching its maturity on building its base program.  Its base program
     for maintaining in general overall integrity of the plant is about
     reached.
         The majority of the actions that we're seeing within Section
     XI now are burden-reduction items where we're going back and looking at
     the old rules that were established in the early '70s and early '80s,
     and we're fine-tuning those to address what we're finding in the
     facilities these days, and they typically are burden-reduction type
     items.  Optimum safety depends on the Section XI base program with
     industry initiatives and regulatory actions for emerging issues.
         I guess the point that needs to be made and I think has been
     said several times is, the elimination of the 120-month update does not
     exclude the ability to recognize the continued improvement Section XI
     has to offer in addressing the need to improve safety.  The Staff still
     maintains the ability to mandate those changes that are deemed necessary
     to maintain or enhance safety where safety enhancement is needed. 
     Examples of that is through 50.55a, we've seen expedited examination of
     requirements for RPV welds.  We've seen the expedited implementation of
     IWI/IWL.  We've seen expedited implementation of Appendix VIII.  I don't
     anticipate that would go away.
         Section XI does good work, and will continue doing good
     work.  Section XI through its members will address safety issues as
     appropriate.  And when those safety issues are identified by the Staff,
     they would be mandated appropriately.
         What does it mean to the industry?  Well, effective use of
     resources.  The entire industry boasts -- the licensees, consultant
     supports to the licensees, and the regulator are being driven to operate
     more efficiently.  One of the new initiatives we have now is better use
     and better understanding of industry initiatives.  I think Section
     99-063 has been written and is even being expanded upon now to talk
     about how the licensee and industry can work with the regulators on
     industry initiatives to address these emerging issues.  And that's
     what's going forward is industry initiatives.
         The resources that are spent on updates can cost equal to or
     exceed the cost of supporting these voluntary initiatives.  I'm not
     advocating and I don't have the authority to speak on behalf of Entergy
     to even imply that we would follow our limited resources to regulatory
     requirements spinning away from these voluntary issues.  But when O&M
     funding comes up on an annual basis, if we have the funding that is
     required to comply with the regulation versus funding that is necessary
     to support a voluntary program, we can all imagine what pot's gonna get
     hit first.
         We have talked about, in several presentations today, the
     cost aspect of the updates.  While we try to look at this cost as being
     incurred over a large period of time, in reality, it hits one physical
     year budget.  And whether that's $250,000, a half-million or a million
     and a half, that comes out of one physical year. And that means that
     much maintenance is not going to be done that year to go do that update.
         DR. POWERS:  What you're saying -- I think -- is that if we
     follow what you were suggesting, that money would never again be
     available for updating to the code on a voluntary basis?  That'd never
     happen, is what you're saying?
         MR. LEWIS:  it would happen if there was sufficient cost
     return to update on a voluntary basis.
         DR. POWERS:  But you're saying there that essentially that's
     never gonna happen.
         MR. LEWIS:  I wouldn't say that.  For instance --
         DR. POWERS:  I think you said that you had to have a
     two-year return, if I remember your words.
         MR. LEWIS:  No.  No, no.  No.  If we look at a ten-year
     return.  We have to forecast a net present value, but that dollar value
     has to be amortized over ten years.  What is the $250,000 today worth
     ten years from now, if I have to amortize my return over ten years.
         DR. POWERS:  Well, I don't know that you have to.  Isn't
     that up to the, to the management, directly, of the utility.
         MR. LEWIS:  But that's the way all utilities operate.
         DR. POWERS:  They work on a ten-year cycle?  Not to my
     knowledge.  I haven't seen one yet.
         MR. LEWIS:  No -- I'm sorry.  I understand the question now. 
     They would evaluate the return based on when the forecasted return would
     be seen, which -- that is project by project.  But in the area of the
     code, since the decreased burden would have to be spread over ten years
     because it's a ten-year inspection cycle, we would have to look at the
     return over ten years.  In other words, if going to the newer code gave
     the licensees reduced inspections, they wouldn't see that total
     reduction until ten years.  So they would have to look at the one-year
     cost for developing the new program, then they wouldn't see the total
     return for ten years.
         DR. POWERS:  But I thought you were telling me that -- this
     money that right now is spent for updating to the new code now becomes a
     voluntary thing, and that's the budget that always gets hit in favor of
     other things that'll come along, like improved PRA capabilities or
     something like that.
         MR. LEWIS:  It's the budget that would have to be justified
     based on returns, like any other voluntary project.
         DR. POWERS:  Right.
         MR. LEWIS:  When regulations stipulated '89 code, Entergy
     elected to go to the '92, and that was quite an excruciating process. 
     We did that because it resulted in a better product and had a better
     return to it.  So I think licensees will elect to go to the newer codes
     when there is reason to go to the newer codes.  And most of that reason
     is technology.  There is new technology being provided in the newer
     codes.
         DR. BONACA:  I have a question.  Your plants probably have
     what I would call a life-cycle management program, where you're looking
     at life-cycle issues, inspections, and for example the BWR VIP funds and
     MRP, and I imagine Section XI updates right now is part of the problem,
     so that you do not incur the costs for the same year, for all these
     problems in one year for all the plants, but you spread it out in
     different ways.
         So the way I see it, I mean that, the cost of the update
     would be eliminated from a year, but in reality, I mean, isn't it part
     of the commitment that you have and you spread it out to a number of
     years, and if a year you don't do the Section XI update, you're doing
     something else which you're putting there in support of the maintenance
     problem.
         I understand it's coming, your expense is coming in a year,
     but it's one expense as part of the life-cycle management activities and
     inspections that you spread out over a number of years and across the
     plants.
         MR. LEWIS:  I think it's always used in forecast management
     and looking at forecast expenditures, but the way the budgeting process
     works is that money is still being carried for a fiscal year.  So even
     though it was looked at, that at the next ten years we're going to have
     to spend these dollars, there's an O&M budget approved plant to plant,
     and that would be a hit against that O&M budget.
         DR. BONACA:  I understand that.  Yes.
         CHAIRMAN SHACK:  What's the meaning of your statement on
     page 5, that the '89 edition is optimum since you just sort of suggested
     the '92 is better and is worth the effort?
         MR. LEWIS:  The '89 edition appears to be optimum with
     regards to when Section XI reached its peak and when establishing
     requirements since the '89, most of the actions have been going through
     burden reduction; they've been coming down as far as reducing
     requirements.  If you wanted to, to plot a peak on establishing more and
     more and more requirements, '89 -- it's '86, '89, really.  Somewhere in
     there.
         CHAIRMAN SHACK:  Well, I'd hardly call that an optimum, but
     that's, I guess --
         DR. POWERS:  And it's a strange thing.  I mean, there's
     nothing wrong with reducing requirements if it's giving us better focus
     on safety.
         DR. SEALE:  Well, maybe the irksome index would be a better
     way to --
         [Laughter.]
         CHAIRMAN SHACK:  Exactly.
         [Laughter.]
         CHAIRMAN SHACK:  in fact, that might be the last code I'd
     want to freeze in place.
         DR. POWERS:  That sounds like it.
         [Laughter.]
         MR. LEWIS:  But the point that I think is made is, is from a
     safety perspective, '89 reached that optimum point and there may be
     things that we're doing in '89 that are unnecessary.
         DR. POWERS:  I can't, I cannot agree at all with the idea
     that, that an unnecessary requirement improves safety.
         MR. LEWIS:  Now, the ability to go to the '92 code or the
     '95 code should be a choice unless portions of those codes are
     identified as necessary to address a needed safety issue.  So when I say
     optimum, I'm saying that the '89 code reaches Section XI's initial goal,
     which is to provide a general overall condition to the safety-related
     piping system through monitoring and selecting samples.  From there,
     that goal was still maintained.  Prior to that, that goal may not have
     been reached.  We -- the '89, we've added IWE, we've added IWL, we've
     added Appendix VIII.  So there were a lot of things that were occurring
     in the late '80s, I think, that got Section XI to their optimum point on
     reaching their initial goal.  '89, their goal was reached.  '89, from
     when what we were starting to fine-tune that.  We're starting to go back
     and levelize some of those requirements, reduce some of the requirements
     that have been determined not to be appropriate.  That's why the term
     "optimum" is there.  Optimum, from a financial standpoint, that's not
     the intent there.
         In discussions prior to this meeting and also during this
     presentation, there has been several concerns expressed regarding the
     effect of this on the future of Section XI.  I'd advocate that it would
     have no negative effect on Section XI.  Section XI agendas are full and
     participation is strong.  And I don't think participation is there
     because attendees are coming to protect their interest on what may be
     regulated on them ten years from now.  I think participation is there
     because most of the code actions that we see today are code actions that
     introduce the new technology.
         We're providing mechanisms for underwater welding, we're
     providing new mechansisms for repairing steam generator tubes, we're
     providing new methods of doing flaw evaluations.  And these are desired
     technologies that the industry wants.  We're seeing process improvements
     in the code.  We're seeing a lot of burden reduction within the code
     itself by reducing some of the requirements that were established in the
     early '70s and '80s.
         And we're still seeing some scope expansion.  The question
     is, is Section XI gonna have to change with it?  I don't know; that's
     the question we're gonna have to asked Section XI.  We have been
     predominantly using this process with some administrative changes for
     almost 30 years now.  Could this rule change, encourage some changes to
     Section XI?  Possibly, but that's the decision Section XI would have to
     make.
         And I think, before I do conclusions, if you'd bear with me
     just a second, there were some statements, or some items presented I'd
     like to comment on just a little bit.  There's been a lot of discussion
     on the use of code cases.  They've become a way of life, would become a
     norm rather than a non-norm process if we eliminate the 120-month
     update.
         Typically, when an owner goes to get a code case, it's
     because the code case provides a better way of doing business than he's
     doing now.  And they, and when, and they make these decisions when they
     go to use code cases now.  They look at the cost of getting the code
     case approved versus the benefits of adopting a code case. Well that
     wouldn't change then.  I heard a dollar value of $500,000 to get a code
     case approved.  For example, the risk-based code cases -- three of our
     Entergy sites had determined if risk, I mean, cost-beneficial to use the
     risk-based code cases.  Two of our Entergy sites have determined it not
     to be cost beneficial to do the risk-based code cases. Whether we
     maintain the 120-month update or not, that process won't change.
         The concern about the code becoming a confusing document by
     allowing us to, to, to enter a niche, later editions and addenda in
     whole or in part was expressed. Section XI already permits that. Section
     XI specifically states right now that later editions and addenda can be
     used in whole or in part.  50.55a currently permits that with Staff
     approval.  Most utility programs are at base edition with bits and
     pieces of later addenda mixed into it, and code cases incorporated. 
     We've lived with that for the past 30 years.  That's not changing and it
     won't change.
         In fact, it could get better because I think the programs
     will stabilize.  Right now, we're forced with having a program that
     looks this way; ten years later, it completely changes.  That means the
     utility personnel we've got to get accustomed to the new program and the
     new requirements.  Regulatory inspectors have to get accustomed to the
     new codes and new requirements.  Now you're original inspectors, they
     have to know --
         DR. POWERS:  I guess I'm a little confused.  I thought,
     thought your contention earlier was that it's not a big change, that all
     big changes have occurred and now it's just typographical changes and
     editorial changes.  And reduction of requirements.
         MR. LEWIS:  They are.  Those were the changes that were --
         CHAIRMAN SHACK:  '89 to '92.
         DR. POWERS:  Yeah, if I went to '89, '92, I wouldn't -- I
     mean, I'd learn how to spell some things differently and I'd learn a few
     things I'd done in the past that I just wouldn't do now, but otherwise
     there wouldn't be much change.  It's not a C change.
         CHAIRMAN SHACK:  It's not like going to risk-informed
     inspection, which is a very --
         MR. LEWIS:  Oh, yeah.  Right.  The format of the reporting
     requirements -- all these changes, although they're editorial or they're
     administrative in nature, or there are no changes in requirements but
     they, they change report forms or report time frames, they still require
     licensees to go change all the procedures, retrain the personnel, and --
     as you're very familiar, once a document, a Section XI is implemented,
     it affects numerous, numerous plant procedures.  So it is a massive
     effort to go back and do that.
         DR. SEALE:  Could I ask you a question.
         MR. LEWIS:  sure.
         DR. SEALE:  Earlier you raised an interesting issue.  And
     that was with respect to the determination of whether or not a paticular
     site within your company would opt to go for risk-based or risk-informed
     changes, or whether they would not.
         MR. LEWIS:  Yes, sir.
         DR. SEALE:  Have you examined to see whether or not that is
     in some way related to the plant type?  Or does that reflect a
     difference in culture at the different plants?
         MR. LEWIS:  For us, it turned out to be plant type and plant
     vintage.  The two BWRs turned out to be non-cost beneficial because we
     had a large population of no break zone welds, a large population of
     welds covered by 88-01, which you're not allowed currently to apply the
     risk-based program to.  So the cost of implementing the program, which
     was an up-front cost, looked at what the return was over ten years
     again, because it's a ten-year process --
         DR. SEALE:  Yeah.
         MR. LEWIS:  -- the net present value wasn't there.
         DR. SEALE:  It was related to plant type?
         MR. LEWIS:  Yes, sir.
         DR. SEALE:  Okay, it was.
         MR. LEWIS:  The three PWRs found it very cost-beneficial to
     go forward with it.  We've already talked a little bit about how the
     cost is assumed in a year versus spread over ten years.  I won't talk
     about that anymore.
         One of the benefits that's been discussed that's achieved
     through the updates is it gives the licensees a chance to recalibrate
     themselves against the code and identify these areas of weaknesses that
     they've lived with for the past ten years.
         I find it just a little bit discomforting that we would, we
     would depending on updating process to achieve compliance with rules and
     laws that are already there.  The code was already there; it was already
     mandated by law.  A licensee's program has fallen weak and out of touch
     with those rules, the updating process to bring it back into compliance
     is not really the vehicle, the tool to go use that with.
         DR. POWERS:  Well, it may not be, but the fact of life is
     that that's what happens.  I mean, we see it with Appendix R, which is
     part of the regulations.  That's part of the laws of the land.  And so
     we go out and do a functional fire inspection, and it costs the industry
     a huge amount because they have to get their program up to snuff prior
     to the inspection.  I mean, that's just the way these things are.
         MR. LEWIS:  Right.
         DR. POWERS:  It usually takes something to move you, or we
     spend a lot of time inspecting --
         MR. LEWIS:  And I agree.  You're right.  Programs like
     Section XI had the ability to become stagnant.  Agreed.  But using the
     updating process to bring it back on queue, it may not be the right
     process.  There are many things that can --
         DR. POWERS:  There would be other ways we could do it, yes.
         MR. LEWIS:  Agreed.  And that's the point I want to make. 
     Something as simple as maybe, once a year a licensee has to reassess
     their program and send in an affirmation to the staff that the program's
     been reassessed.  That would accomplish the same thing.  But there are
     other vehicles to gather or eliminate stagnancy in a program like that,
     other than updating to a brand new code.
         DR. POWERS:  I think that's a, that is a very important
     point.
         MR. LEWIS:  In the event we elect -- and this is a personal
     opinion of myself.  In the event that we elect to do away with the
     120-month update and we choose the '95 edition as the base code, I would
     anticipate substantial submittals from licensees under the
     50.53a(a)(3)(i) to use either the '89 or the '92, with the demonstration
     that it provides an equal level of safety as the '95, and that the cost
     for updating it is not commensurate with any safety improvements they've
     seen, or supplemented with some portions of the '95 to address areas
     where safety improvement was needed.  That's just a thought.  I would go
     back within Entergy and explore that real closely, if this were to go
     forward the way it's written now.
         I guess I'd like to point out that ASME's presentation
     probably did a little bit better job than mine in recognizing that, that
     a lot of the ASME activity now is in the area of burden reduction.  And
     the ability of the licensee to take advantage of that burden reduction
     should be a choice of the licensee and not a mandated process through
     50.55a.  With that, I'll go back to my conclusions now.
         Section XI does a very good job of providing a fundamental
     program for ensuring the general overall conditions of safety-related
     pressure boundaries.  No question; no doubt.  If you compare recent code
     changes with industry initiatives and regulatory actions, Section XI has
     reached its optimum format for addressing safety issues as a big a whole
     document, as a basic program.
         Elimination of the 120-month update will not have an adverse
     impact on safety.  Safety issues will still be addressed as in the past
     -- with aggressive industry and regulatory actions commensurate with the
     safety-significance and industry initiatives.
         Routine updating of other industry standards -- IEEEs and
     ASTMs, and there are many others -- has not been determined necessary to
     maintain safety.
         There was a question of spirit of the law a little while ago
     on how this would satisfy spirit of the law.  If that was determined to
     be an issue, then the bigger issue would be, how do we meet spirit of
     the law by not requiring mandatory updates of all the other industry
     standards that are also developed in a consensus process with an
     industry mix to always be.  We think it should be.
         Of course, the NRC always has provisions to mandate changes
     that are offered by Section XI that are deemed necessary to address
     safety-issues.
         DR. POWERS:  I guess the part of that that bothers me on
     this is part of a mindset.  I believe that when we can find ways to
     eliminate requirements so we have the resources to focus on the things
     that should be required -- but that's a net safety benefit.  I can
     believe that the Staff would indeed go through an update of the code and
     find new requirements and do a 50.109 assessment on it and find out,
     sure enough, that this was cost-effective to impose, and they would
     impose it.  And we'd all go along with that.
         But I'm not sure that the Staff would go through and say,
     hey, there's a whole bunch of savings to be gotten by eliminating a
     requirement or modifying a requirement, and go through the exercise. 
     They might.  They might honestly do it.  But I don't have that guarantee
     that I had.  Nor do I have the guarantee that everyone of your utilities
     would go through it because it might be, they don't have the manpower or
     they don't have the interest -- they're too busy with other things -- to
     go through and find these things that allow us to focus on safety by
     eliminating unnecessary requirements.
         CHAIRMAN SHACK:  Especially if you can do this once in a
     code versus, you know, utility by utility, it makes an enormous
     difference.
         DR. POWERS:  You see my point.  It is that I'm -- if by your
     characterization, and I think in fairness the previous speakers made the
     same point, that an awful lot of the changes are a learning experience,
     where you're finding that the requirements that you placed in the past
     out of the spirit of conservatism or something or you just didn't know
     now are disappearing in favor of exacting requirements of the things
     that experience and science has suggested deserve more attention.  We're
     getting more focused on safety, and I'm not sure that we have mechanisms
     that assure that to happen.
         MR. LEWIS:  Typically what happens, whenever the code as,
     and I ask any of you gentlemen to elaborate on this if you would please,
     whenever has been identified as being possibly over-conservative, an
     action will be taken to generate a code case.  So it becomes rapidly
     available for the industry to get access to.  So that item would track
     by itself as a code case, and the organization that initiated that,
     which will typically be a licensee that's looking to reduce a current
     requirement.
         As soon as that code case gets published by ASME, assuming
     that it does, then there will be communication between the licensee and
     the Staff trying to get immediate approval to use that code case, rather
     than waiting for regulatory guide endorsement.  I think those evolutions
     will take care of themselves, just by the process of how it works.  And
     it still requires that licensee-NRC interaction over that proposed
     reduced requirement.  And in that, the rules of 50.55(a)(3)(i), it has
     to demonstrate that there's not a reduction in safety.
         DR. POWERS:  I mean, that's a good point.  A good way to
     look at it.
         MR. LEWIS:  If I, if I think about most of the actions in
     the code that have, that have been taken to reduced requirements, most
     of those have been initiated by licensees.  Most of the changes that we
     see with new technology typically come in from vendors -- vendors who
     have services that are all daily trying to better serve the industry,
     the company welding processes, new analytical tools.  And they come in
     with the new technology.  As you know, licensees are not in the R&D
     world.  They make electricity.
         DR. POWERS:  That's right.  I mean, but licensees have
     access to people that are in the new technology business.
         MR. LEWIS:  Absolutely.
         DR. POWERS:  And this is not a small area, those
     utility-supported organizations.
         MR. LEWIS:  Absolutely.  I hope in no way anything that I
     said here is considered condescending toward ASME, ASME members or the
     ASME process.  It's, I've been a part of it for 13 years and I wish to
     consider being a fundamental part of it.  And I don't see any effort
     with Entergy to change its support, and I think that -- I can't
     anticipate any utilities reducing their support of ASME, because it is
     the foreground of technology coming forward to service the industry.  As
     these plants age, we're wrestling with new problems every day. /p I
     guess I can believe that the people that are involved now in the ASME
     efforts sent there by their employers, it probably won't change very
     much.
         I guess the thing I worry about is the next generation.  A
     young engineer that is not now a part of the process but would
     eventually become a part of the process for the normal road -- that may
     not be a good passage, so maybe it's not a sudden drop in work, but an
     atrophying of support.
         MR. LEWIS:  I understand.
         DR. POWERS:  Oh, I'm sure you can't forecast on that, but I
     guess that's my concern.
         MR. LEWIS:  Well, I wish I had close enough contact with all
     the utilities to speak on behalf of the industry, but I don't.  I can
     tell you what's happening within Entergy.  We have worked very hard in
     the last couple of years in centralizing all of our code activities into
     a central office and bringing all of our plants to the same additional
     addenda of Section XI so we can have common programs, common
     implementation.
         And we do recognize that the ASME process is a career path. 
     It is a job description in itself.  And we do go out and look for new
     graduate engineers to come and work just in these code programs areas. 
     And it is a career in itself.  So at least some utilities, I think,
     recognize that that's got to continue.
         DR. POWERS:  That helps.
         MR. LEWIS:  Comment in the back.
         MR. PERRY:  Jim Perry, ASME.  I'd like to make a comment
     with respect to utility participation.  I think if you were to ask
     utility representatives who are actively involved in the code and
     intimately knowledgeable of what's happening, what the benefits are not
     only in the changes but in the interaction amongst the members that
     helped solving some of the problems common to utilities, their sense
     would be, they think it's worth it; we ought to continue it; we think
     there's benefits to be gained and the utilities should continue to
     support it.
         Where I'm coming from is, I think if you look at it from a
     utility executive, chief nuclear officer, who's really pressured in
     terms of bottom line, and you were to send him a sheet that says for
     Entergy, there's 15 people participating in the code.  And he'd
     translate that, how many meetings, how much money, how much time?  He's
     being pressured to reduce costs.  He's gonna say, do we need all of
     those?
         And I could tell you from experience at a utility that when
     you start talking about cuts, the first place you talk about cutting is
     getting rid of consultants; the second place you talk about cutting is
     travel.  And so, if the rules change from mandatory updates to
     voluntary, I think the mindset on many chief exeuctive officers in terms
     of short-term is, I'm not sure we need to do this.  I'm not convinced of
     the benefits.  Delete it.  See if we can do without it.  So I think it
     will have an impact.
         What you said is true with respect to the next generation of
     engineers.  I could tell you that -- the utility where I am.  Once I
     retired, they didn't replace me.  They didn't put another one on there. 
     They don't have participation from the utility in this area.
         CHAIRMAN SHACK:  Curt, do you have --
         MR. COZENS:  Yeah, I have a -- can you hear me on the
     microphone.  I'm Curt Cozens with the Nuclear Energy Institute.  I'm
     responsible for this issue and managing it on behalf of the industry, to
     come up with a resolution that we believe is well-founded and sound
     regulatory practices.
         Steve's a rough act to follow.  He brings a lot of practical
     experience and an understanding of the real world of how the code is
     indeed worked.  And I'm not gonna repeat what Steve has said, but I do
     definitely support what Steve has said.
         I'd like to now turn to the regulatory issues at hand.  I'm
     not going to talk about technical; I'm gonna talk more about the
     regulatory, why are we here?  We're dealing with an anomaly.  Out of the
     thousands of standards and codes that are available that are referneced
     in NRC documents, whether they be reg. guides or rules, there's three or
     four that are mandated by regulation.  ASME code happens to be one of
     those.  It is the only code, to my understanding, that has a mandated
     update.
         Steve highlighted quite well that in 1970 -- maybe this made
     very good sense -- we were on our learning curve of what it took to
     operate these plants.  But since 1970, we've gained a lot of years of
     operating experience, a lot of practical knowledge.  Technology in
     general has advanced.  And the code has grown accordingly.  And with the
     best effort, it has brought great value to industry.  I believe that the
     code has brought great value, and I believe it will continue to bring
     value.  But as Steve has said, it is one part of the entire mix of
     managing these plants and regulating these plants.
         DR. POWERS:  But there's the primary pressure boundary.  So
     I mean, the fact that it's special -- yeah.  It's special.  And
     deservedly so, it's special.  And we would maintain that one needs to
     assure that the pressure boundary is able to perform its intended
     function.
         DR. SEALE:  You're monkeying with defense in-depth when you
     play with that.
         MR. COZENS:  Where we are looking at it is coming back to
     the main focus and purpose, the mission, literally, of the NRC Staff is
     to protect public health and safety.  I don't think anybody around the
     table will disagree with that.  And the question that's on the table is,
     why the proposed change to the rule of eliminating the 120-month update? 
     Do we believe that we will be challenging the ability to protect the
     public health and safety?
         A little sanity check, looking at what are we really talking
     about in terms of practical implementation.  I just did a recent survey
     of industry -- and I won't say that I got a hundred percent return.  I
     probably got, oh, about thirty percent return.  And I asked them, where
     are you right now on your update to the 50.55a, specifically Section XI,
     IWE -- excuse me -- ISI and IST?  And it was interesting to note that
     four or five of these plants, of these bodies that did respond to me
     have an update that's going to occur before November 22nd, 2000.  Now
     that's a very significant date.  That's the date that, one, a plant must
     implement the current referenced code that's listed in 50.55a.  That
     would be, in this case, the '95-'96 addenda for ISI and IST.
         These plants, by regulatory responsibility, can update to
     the previous edition, the 1989.  Now that's four or five plants.  What
     about the other plants that are scheduled to update in the next ten
     years?  So we've got, picked up here four or five here that definitely,
     by regulatory compliance could indeed update to the '89.
         You're gonna have a large population that in anywhere from
     one to ten years will come upon their time to update these things. 
     Here's the question:  are these plants unsafe now?  I think the Staff
     has answered that question.  And I quote from their SECY 99-017, which
     implemented this rule.  And this is a quote:  "The Staff believes that
     the use of the 1989 edition of the ASME code by all licensee will
     provide an adequate baseline."  That is a statement.
         I believe when the Staff wrote that believed it was true,
     otherwise I'd question why they would put it in here.  I believe they
     probably believe it's true today, because they're going to be permitting
     a large number of plants to operate to the '89 edition, for basically
     the next ten years, progressively lesser and lesser of course, the way
     the current regulation is written, but the fact is that as the ten-year
     interval cycle over, these plants will update to whatever the
     requirement is in the regulation.  So I have to conclude that Staff
     believes that the '89 edition provides an adequate level of public
     health and safety.
         I was not knowing what I was going to hear today.  I have
     not seen the Staff's write-up on the proposed rule.  I was indeed
     pleased to see the recommendation that they're passing in to eliminate
     the 120-month update, and I'll presume that will indeed occur unless
     something drastically causes them to believe that that's the wrong thing
     to do.
         I believe that the decision has been made on sound
     regulatory practices of what is the mission of the NRC.  And if they
     deem necessary to assure that people update to later editions of the
     code to maintain public health and safety, not only does the Staff have
     provisions to make it possible to mandate the licensees live to new
     requirements, it's a requirement that the Staff would do that.  No, it's
     part of your basic mission.  So it's not like we're removing anything
     from the standards by doing this.
         The real question is, have we demonstrated that we are
     adequate, for right now, and that we have a justification for imposing
     new requirements on licensees?  And that's been the whole debate that's
     gone on with this particular issue.  I believe the Staff has come up
     with the right conclusion and we indeed support that.
         However, I am disturbed by one aspect of it.  The Staff is
     proposing as part of its recommendation as presented today the
     baselining to the '95 edition, '96 addenda.  And I ask myself why?  What
     is the safety-significance that now invalidates the quote that I read to
     you that the '89 edition is indeed an adequate basis for baselining, to
     assure that an a level of safety is adequate to protect public health
     and safety.  I was unable to, in my own mind, extract out from the
     presentation and Staff data that while some things have changed, the
     ASME code is a tremendous place to locate new technology, and that they
     should indeed continue to evaluate the new technology, and it's a great
     place to have a common ability to manage this new technology.
         But that is not the same thing as replacing the regulatory
     decision, whether or not it's essential to mandate it on licensees to
     assure that we have an adequate level of public health and safety.
         DR. KRESS:  What is your measure of that -- adequate level
     of public health and safety?
         MR. COZENS:  At this point, I will rely upon the technical
     expertise of.  They've done the job properly.  But I would also maintain
     that the ASME code, when they wrote that, believed that it was adequate
     for it.  And I haven't seen anything that would say that they have
     concluded that it was incorrect to do it.  There may be enhancements out
     there.
         I hope that there always will be technical enhancement,
     going over that.  We are developing the science of engineering,
     inspection, and all the functions that operating these plants.
         DR. POWERS:  I'm pretty sure that if I look hard enough, I
     could probably find a document in which the Staff said by compliance
     with the 1981 version of the code, that it would be adequately safe.
         MR. COZENS:  Sure.
         DR. POWERS:  I'm pretty sure it must exist.  And I'll bet I
     can find another one that says the 1984 version.  And yet, you, by your
     own admission, say that from those times to the 1989 version, there were
     substantial changes that affected safety.
         I mean, why are the statements of the Staff that a
     particular version at one time is adequate safety -- do you want to be
     stagnant there?
         MR. COZENS:  I don't believe we will be stagnant.  I believe
     that if there is really a safety issue that is identified that comes out
     through the ASME code, that if licensees are not voluntarily
     implementing, the Staff will need to impose it upon us.  There are
     provisions in the regulations to mandate that.
         Now the approach that the industry and the Staff are taking
     nowadays about waiting for Staff to mandate things on us has been
     radically changed.  We are taking many more industry initiatives and
     proposing solutions that, one, are acceptable to Staff, but are also
     acceptable to industry.  And I would maintain that that will indeed
     continue.
         That's part of the mix that Steve talked about, that
     presently the ASME code does not typically address emerging safety
     issues.  They may at some point capture the solution for them at a later
     date, but they are usually not at the forefront of addressing safety
     issues.
         DR. POWERS:  Nor would we expect them to be.
         MR. COZENS:  That's right.
         DR. POWERS:  Because it's a consensus -- I mean, it's a very
     conservative process.
         MR. COZENS:  It's a consensus, slow process that, it does
     indeed take time.  It's not to say that there's a tremendous expertise
     that isn't consulted along the way, that participates with the ASME
     code.  But we would maintain that, you know, the burden of demonstrating
     whether or not a new requirement should be imposed on licensees should
     not be taken lightly, and it should be to address a needed safety issue.
         In the same breath, we would contend that there's many
     things that are in the ASME code, even by the ASME code's own
     admissions, by the document that Steve had submitted to the NRC, that
     they proved there were many more editorial, other activities that the
     licensees were required to implement as part of their update, because it
     was part of the overall ASME code.  And to automatically assume that
     these should be imposed mandatorily on a licensee doesn't meet the
     burden of good regulations, but they are necessary for public health and
     safety.
         But if there are some, they ought to be imposed upon
     industry and more importantly, we probably ought to be adopting them
     ourselves.  The vast majority of the things we're seeing now are a
     better understanding of a requirement that might have been in the ASME
     code and the appropriateness of that requirement.  And sometimes they
     are indeed adjusted, sharpened a little bit more to make more rational
     sense as to what the appropriate criteria is.
         And as those things occur -- and there is a benefit to doing
     those because that's why the initial code activity was started.  I would
     expect that licensees, seeing the benefit of them, will incorporate them
     into their process.
         And coming back to the '95, you know, again, we believe that
     elimination of the 120-month update is the appropriate move, the
     appropriate decision for the Staff to recommend to the Commission.  But
     we find it a little arbitrary to impose the '95 edition and the '96
     addenda.
         DR. POWERS:  Is that any more or less arbitrary if they'd
     picked the 1989 or '88 version?
         MR. COZENS:  No, both --
         DR. POWERS:  They're both gonna be arbitrary.
         MR. COZENS:  Both -- I would contend that both would provide
     an adequate level of public health and safety.
         DR. POWERS:  All right.  Following your rationale on that,
     yes.  And it's gonna be arbitrary no matter which one you pick.
         MR. COZENS:  So our position is the letter that we wrote to
     NRR about this, is this will require one more ten-year update of
     licensees.  Oh, but I think three or four licensees are presently to the
     '89.  If we are providing an adequate level of public health and safety
     through the '89, and we do want to standardize to some level on a given
     code edition as adequate for public health and safety, why not choose
     the '89 edition, which the Staff had indeed concluded does satisfy that
     need?  So it's a matter of practicality, not a matter of safety.  Both
     would provide an adequate level of public health and safety.
         So, we remain concerned with that part of the
     recommendation, although we think that the Staff indeed has made the
     proper general recommendation to eliminate the 120-month update
     requirement.
         I -- you know, I ask the Staff if I could borrow their
     slide.  This came out of the Staff presentation.  But if the strategic
     goals of the NRC -- maintaining safety is first; increasing public
     confidence, second; reducing unnecessary regulatory burden -- I presume
     that means both on Staff and licensees; and making NRC activities and
     decisions more efficient, effective, efficient and realistic.
         DR. POWERS:  And wouldn't they use that just to say, here's
     the, here is the bases on which I have chosen the '95 edition.  I don't
     want to put words in the Staff's mouth, but I'm going to --
         [Laughter.]
         DR. POWERS:  -- and say, gee, if I'm gonna increase public
     confidence, I want to use the most modern standard I've got.  If I'm
     gonna reduce unnecessary regulatory burden, I know that between '89 and
     '95, a lot of things were changed to reduce requirements that were
     unnecessary.  And to make NRC activities and decision more effective,
     efficient and realistic, is, this is a more up-to-date version.  My
     Staff is much more knowledgeable about it; things are passed out of
     their memory.  They'll be able to operate in a more effective and
     efficient manner by going with '95 as opposed to '89.
         MR. COZENS:  One might draw that conclusion, but in the same
     vein, I believe it is possible to draw the same conclusion that I am
     indeed maintaining safety by using the '89 edition.
         DR. POWERS:  That's what we're --
         MR. COZENS:  Staff is going to permit '95 or '96 plants for
     some extended period of time permission to use it, so therefore they've
     concluded that it indeed does maintain adequate public health and
     safety.
         Public confidence -- that's a little more difficult.  One
     might conclude that newer is better.  Well, some of the IWE/IWL criteria
     that when it was published in the '92 edition, I believe, it was -- you
     might say it increased public health and confidence because it was new
     and better, yet when it went to actually be used, I think there were
     eight generic relief requests that were proposed to the Staff because
     there was difficulty in using that newer requirement.  It wasn't all
     that we had hoped it might be, and as with increased knowledge and
     learning, we came back to that basis.
         So I mean, the sword cuts two ways on public confidence.  I
     think that the NRC needs to assure that technically whatever we're doing
     is being proposed as the right thing, and we want to do the best we can
     on public confidence.  Steve?
         MR. LEWIS:  I think you just brought up a good point, and I
     thnk ASME representatives can also comment on this.  Typically when a
     brand new requirement comes out in the code, an extensive requirement
     like Appendix VIII or IWE/IWL, it takes a time period for that to adjust
     to be a workable requirement.
         IWE/IWL's been published now since '86; Appendix VIII's been
     published since, what, '89?  You know, we're seeing major rewrites to
     both of those to make them usable and workable.  So for a, for the whole
     industry to come up to a '95 code that hasn't had time to be worked a
     little bit, it could frustrate a lot of submittals in ferreting out
     those, some of those brand new issues.  '89 -- we've got --
         CHAIRMAN SHACK:  On the other hand, it's fixed a lot of
     things that were wrong with that crappy '89 edition.
         MR. LEWIS:  Well, but I would be willing to bet that the
     majority of those fixes were also in code cases an those utilities have
     already adopted those code cases.  Probably 95 percent of everything
     that the '95 fixed were previously fixed for the published code cases.
         DR. POWERS:  So it's really no problem for them at all to go
     from the, from '89 to the '95 edition because they've already done it.
         MR. LEWIS:  For the reduction --
         DR. POWERS:  I mean, I can't have it both ways.
         MR. LEWIS:  No.
         DR. POWERS:  I can't have it -- yes, this is a horrible
     burden, but no, they've already done it.
         MR. LEWIS:  For the reduction in requirements and those
     things, but not the increases in requirements and not those things that
     they did pursue the change --
         DR. POWERS:  I think that we've already agreed that there
     were relatively few of those.  I think you and the, uh, presenters from
     the ASME agreed that the increase in requirements was relatively small.
         MR. LEWIS:  Well --
         CHAIRMAN SHACK:  Dana, do you need to pursue this?  We're
     running pretty late here.
         DR. POWERS:  No.
         CHAIRMAN SHACK:  I thinks it's probably time to wrap up.
         MR. COZENS:  We need to let Jim speak.  He's --
         MR. PERRY:  I just wanted to make one comment on this
     business of increasing public safety.  I think that the point that I'd
     like to make is piggybacking our IWE/IWL -- I think even the Staff
     mentioned.  Until it was mandated by the NRC, it wasn't looked at quite
     as rigorously.  There were things that were impractical.  And the latest
     edition now fixed those problems.  Okay.  And it's not yet endorsed.
         Secondly, with respect to IWE -- with respect to Appendix
     VIII, very significant.  The performance demonstration that's been going
     on at EPRI in working with ASME has found problems with it that need to
     be resolved to make it practical.  And so there's another good example
     that the latest edition of the code resolves many of those difficulties
     and problems and makes it more practical.  So if you don't use the
     latest ones -- I don't think the increase in public confidence here if
     you aren't picking up the benefits of what you learn by running the
     pilots.
         MR. COZENS:  There are sometimes benefits and sometimes
     drawbacks.  But we believe -- and this has been validated through
     documentation that I've had with the industry -- that licensees are not
     necessarily wanting to automatically adopt all the burdens associated
     with the new edition because so many of them have nothing to do with
     public health and safety.
         We're looking at the third strategic goal of reducing
     unnecessary regulatory burden.  And the focus here was not elimination
     of the 120-month update, but which baseline edition is appropriate. 
     This seems -- the adoption of the '95 edition versus the '98 will both
     provide an adequate level of public health and safety.  It seems to fly
     in the face of reducing unnecessary regulatory burdens.
         For those plants that are just coming up within the next
     twelve months to update their programs, they will have to probably
     update, once or twice at least.  For everybody else, at least once will
     they have to update it.  Is that necessary to assure public health and
     safety?  If the overall scope and purpose of this rulemaking was to
     eliminate unnecessary regulatory burden, I'm not quite certain we've
     achieved that, at least for the next ten years.  And I believe that this
     is an admirable goal.   It is part of the strategic goals of the NRC
     that the adoption of the '95 -- I'm not certain has measured up to that
     criteria.
         We believe that the adoption of the 120-month update will
     indeed make the -- excuse me, the adoption of the elimination of the
     120-month update will make NRC activities and decisions more efficient,
     effective and realistic.  This leaves in the hands the assurances for
     the Staff that public health and safety is maintained. But it gives the
     licensee the option of deciding when and where things are beneficial for
     the operation of their plant.  But it still leaves in the hands of the
     Staff if it is necessary for public health and safety, the ability to
     mandate those things that it deems appropriate.
         And if we look over -- Steve had a slide in his presentation
     that identified three significant actions recently that the Staff had
     mandated on industry.  One of the three -- I'm gonna talk about two of
     them at least, because I'm not positive of the third one.  Appendix VIII
     -- it was not, as I understand, adopted via the ten-year update.  It was
     a new section.
         As I understand, there's, I believe it's the 1986 OGC memo
     to Staff that says when new sections of the code are imposed -- these
     are sections that did not exist before, such as Appendix VIII -- they
     need to go through the backfit consideration.  What are the three
     criteria for backfit?  Compliance with existing regulations; public
     health and safety is essential; or the cost benefit.  I believe that the
     Staff concluded that it was a compliance question of backfit and, when
     they adopted Appendix VIII.  And if I'm wrong, you can correct me on
     that.
         And that was the basis for saying that Appendix VIII would
     be mandated on licensees, whereas the schedule of mandating it on
     licensees is the, initially I think it was six months and now I think
     it's spread over a three-year period.  That was a backfit evaluation
     that was again deemed necessary, I believe on -- was it compliance?
         Am I incorrect in my understanding?
         NORRIS:  Wally Norris, Staff.  The compliance argument had
     nothing to do with implementing Appendix VIII.  Appendix VIII passed the
     backfit on its own merit.  The compliance argument had to do with
     whether it would be six months to a three-year implementation, or
     whether it would be in the normal 120-month cycle.
         MR. COZENS:  But the backfit 50.109 rule was part of the
     consideration of whether it would be used at all, was that correct?
         Mr. NORRIS:  No.
         MR. COZENS:  Okay.  I -- was it not also, but in IWE and
     IWL, the new sections?  Was that used, the backfit?
         MR. NORRIS:  Yes.
         MR. COZENS:  Okay.  The point is that the backfit rule is a
     provision that when the Staff has deemed that there is a sufficient
     public health and safety issue that it can be imposed upon licensees, or
     if it's a compliance issue I think might have been the basis on that.
         But the point is, the means to impose things that are
     necessary to assure public health and safety are present in the current
     regulations.  The Staff has guidance on how to do that.  And we really
     are dealing with the things that are not essential to public health and
     safety.  And that's why we support the Staff's conclusions and
     recommendations that the 120-month update is appropriate.  We would
     propose using the 1989 edition.  And I guess that concludes my -- oh no,
     I would like to make one more statement.
         There is one area that we have violent agreement with the
     ASME code, and I think a lot of support on Staff too.  And I just want
     to drive home again the, our support for this.  Regardless of the
     outcome of this rulemaking, the need to expedite the adoption of new
     editions of the ASME code is essential.  I know the Staff is working on
     it.  I have not personally seen the path on how they will achieve that.
         I know they've done some concurrence, changes now that
     concurrences are done.  But I'm not certain that alone is enough to
     assure that the expedited adoptions, whether mandated or voluntary, will
     happen in a timely fashion, so I want to encourage the continued work in
     that area and say that we think that's a very important feature of what
     the Staff is presently.  With that, that concludes my remarks.
         CHAIRMAN SHACK:  Thank you very much.
         Uh, we have a presentation tomorrow at the full Committee,
     and I guess we'll have the Staff, ASME, and NEI back.  Obviously their
     presentations will have to be considerably condensed to fit the --
     there's a slot from 8:45 to 10:15.  I'm not sure I have any particular
     guidance or suggestions as to exactly what can be eliminated, but they
     definitely will have to be condensed.
         DR. KRESS:  Well, I'd certainly say the Staff ought to
     present the options and then present their recommendation and why they
     chose that, and the advantages and disadvantages.  That's the main
     concern.
         MR. WESSMANN:  If -- yeah, if I may make a couple of
     comments and offer a suggestion on that, because I know I think we're
     all getting hungry.  As far as some specifics for tomorrow, we owe you
     an answer on the risk-informed ISI/IST and its relationship and we'll
     bring that to you.
         I would like to suggest that perhaps we focus a little bit
     more on the pros and cons of those four strategic goals.  We did not
     treat that quite so thoroughly.  But at the price of having to defer
     some of the detailed discussion on those public comments, you know --
     we've got more than half the ACRS right here; I think we've covered that
     well.  And that information is certainly available on the viewgraphs for
     your other members.  But I think if we adjust our presentation slightly
     in that direction, that would be constructive.
         To wrap up, and just bring us back around the full circle
     very briefly is, I think what we've all seen here today a little bit is
     a microcosm of the public meeting we that we had in April.  There
     clearly are some challenging views and there are some differing views,
     and we've put them in front of us and we've had a very healthy dialog in
     the last couple hours on that.
         I think we need to remind ourselves that, regardless of the
     baseline, the idea of a baseline in the, in the replacement of the
     120-month update is obviously the area that the Staff is proposing.  And
     of course we have proposed on the '95.  I think it's important to
     remember to remember that we continue to participate in the code process
     and continue to have that vehicle to where utilities, as the years go
     forward, can voluntarily incorporate later versions of the code, so that
     value will always remain there.
         The other fundamental value of is the issue of safety.  If
     the code provisions bring about something that passes the genuine safety
     test, the Staff's going to do the work and it's going to be imposed on
     the proper basis and proper schedule, you know, commensurate with what
     the timing is.
         The timeliness is something we all recognize.  We didn't do
     well in the last ten years.  Right now all I can do is promise, but
     certainly expect to do far better as we go forward.  On balance, not an
     overwhelming story in one direction or another -- and I think we've seen
     that a little.  But on balance, the recommendation of Option 1.b is the
     direction that we're encouraging you all to consider.
         I think that covers it for the Staff.
         CHAIRMAN SHACK:  I think we'd better adjourn since at least
     some of our members have another meeting to go to.
         [Whereupon, at 11:53 a.m., the meeting was concluded.] 
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