Fiscal Year 2000 Authorization and Legislative Proposals
Mr. Chairman and members of the Subcommittee, the Commission is pleased to appear before you to discuss the agency's authorization for Fiscal Year (FY) 2000 as well as the NRC's legislative proposals. I am pleased to be accompanied today by my colleagues, Commissioner Edward McGaffigan, Jr., and Commissioner Jeffrey Merrifield. Commissioner Nils Diaz regretfully was unable to attend today due to prior engagements. I will begin by providing the Subcommittee with a summary of ongoing NRC efforts designed to increase our efficiency and effectiveness in nuclear safety regulation.
The highest NRC priority is to fulfill our fundamental mission of ensuring the adequate protection of public health and safety and the environment. Our main focus in FY 2000 will be to achieve the following performance goals for our regulatory program: maintaining safety; reducing unnecessary regulatory burden; enhancing public confidence; and increasing our operational effectiveness, efficiency, and realism. Congressional and stakeholder interest has served to reinforce, accelerate, and expand our efforts to review and improve our regulatory programs, and to pursue further change to achieve these four performance goals.
The NRC is improving its internal efficiency and effectiveness, streamlining its operations, and consolidating its functions. We are changing our regulations to be more risk-informed. We are making improvements in the areas of power reactor license renewal, license transfers, spent fuel dry cask storage, decommissioning, uranium recovery, fuel cycle facility licensing, and medical use. We have streamlined our hearing process for reactor license renewals and license transfers, and are considering broader changes. We are consolidating and streamlining NRC organizations and operations. We also have integrated our Performance Plan and our budget, in a manner that links agency performance goals, strategies, performance measures, and resources, consistent with the Government Performance and Results Act (GPRA).
In testimony last year, the Commission described a broad range of proposed improvements to our regulatory programs. Examples of the substantial progress we have made since that time include the following:
- Developing a comprehensive revision to the NRC reactor assessment, inspection, and enforcement programs;
- Establishing and adhering to an aggressive schedule for processing license renewal and license transfer applications;
- Issuing guidance for streamlining NRC adjudicatory proceedings;
- Providing expanded opportunities for stakeholder participation in NRC rulemakings, policy development, and program changes;
- Approving the issuance of proposed risk-informed, performance-based regulations for medical use, fuel cycle facilities, and high-level waste disposal, and taking initial steps toward risk-informing our reactor regulations;
- Completing research to support the revision of an industry standard on reactor pressure and temperature limits, which would reduce licensee burden by expanding the operational window for plant startups and shutdowns.
- Reducing unnecessary NRC and licensee burdens associated with low-level enforcement issues;
- Determining, in a timely fashion, that the proposed privatization of the U.S. Enrichment Corporation met regulatory requirements;
- Completing the review of several dual-purpose spent fuel cask designs;
- Realigning the three major NRC program offices, achieving an overall 8:1 staff-to-manager ratio, and reducing our overall staffing and resource requirements; and
- Achieving Year 2000 readiness in NRC information systems, 54 days ahead of schedule, and overseeing the successful industry efforts to ensure Y2K readiness for all nuclear power plant systems that support safe plant operations.
Planning, Budgeting, and Performance Management Implementation
As part of our efforts to ensure the effectiveness and efficiency of agency operations, as well as our implementation of GRPA, the NRC has implemented the Planning, Budgeting, and Performance Management (PBPM) process. The result has been (1) the establishment of a sensible, reliable process for defining agency goals and establishing strategic direction; (2) cost-effective strategies for achieving those goals; (3) effective resource allocations linked directly to implementing our strategic direction; and (4) the ability to measure and assess our progress and overall performance. This system both fosters the flexibility needed to respond to emerging changes and ensures the durability of current regulatory reforms.
The NRC has continued to make significant progress in implementing the PBPM process. Revisions to the NRC Strategic Plan and the development of the integrated FY 2000 Budget/Performance Plan were the initial PBPM efforts. The integrated FY 2001 Budget Request/FY 2001 Performance Plan will reflect the continued evolution of this process. An evaluation of the NRC's PBPM process conducted by an external consultant found that the process is sound and that it has improved our integrated planning process.
We are continuing to refine the implementation of the PBPM process in order to strengthen the linkage between our performance goals, strategies, and resource requirements in developing our FY 2001 budget request. A review of the initial NRC Strategic Plan (FY 1997-FY 2002) was conducted during the Fall of 1998. As a result of that review, the agency is further refining the Strategic Plan to reflect our regulatory reform efforts. The Office of Nuclear Reactor Regulation, aided by an external consultant, initiated a systematic review of the desired outcomes and specific measurements for success. The same disciplined review has since been completed in the Office of Nuclear Regulatory Research and in the Office of Nuclear Material Safety and Safeguards (high-level waste program). These efforts have identified performance goals and strategies, and those key activities that contribute most to meeting our goals.
Progress on Streamlining the Organization
As part of our effort to be more effective and efficient and to reduce supervisory overhead, the Commission has realigned its major program offices. As an examples, the Office of Nuclear Reactor Regulation (NRR) has reduced from seven divisions to five, resulting in a net reduction of 15 supervisory positions. The other major program offices have achieved similar reductions, and we have reduced overhead even further by eliminating the Office for Analysis and Evaluation of Operational Data (AEOD) and transferring its functions to other offices. In total, these and other NRC office realignments will result in the elimination of 88 managerial and supervisory positions.
The Commission has made notable progress in improving the NRC staff-to-manager ratio. When this effort was initiated in September 1993, the NRC had slightly over 700 managers and supervisors. That number has steadily declined, and the realignments described above will reduce it to about 330 by the end of FY 1999, thereby achieving our stated goal of an 8:1 staff-to-manager ratio.
We also have continued to reduce at a controlled pace the overall number of NRC employees, expressed in terms of full-time equivalent (FTE) staff years, using buyouts, early retirements, and attrition. By the end of this fiscal year, actual NRC staffing levels are projected to be approximately 2835 FTE, the lowest level in more than 20 years, down 600 FTE since 1993. The NRC FY 2000 budget request of $471.4 million and 2810 FTE, as submitted to Congress, will allow us to continue the important regulatory changes discussed in this testimony, while continuing to ensure the fulfillment of our public health and safety mission. We will continue to look for ways to increase operational and regulatory efficiency; however, further reductions may not be possible without compromising our fundamental mission.
The Commission has submitted a number of legislative proposals for the consideration of the 106th Congress. We are pleased to acknowledge that the Chairman of this Subcommittee, Mr. Barton, has by NRC request introduced both our reauthorization bill and our legislative proposals. We urge the approval of several amendments that could help to deter terrorist activity related to nuclear facilities and special nuclear material: (1) to authorize guards at Commission-designated facilities to carry and use firearms where needed to prevent radiological sabotage of the facility or to prevent theft of materials that could be used for nuclear explosives; (2) to make it a Federal crime to bring unauthorized dangerous weapons or explosives into NRC-licensed facilities; and (3) to clearly extend our prohibitions on sabotage to cover the construction phase of production, utilization, and waste storage facilities. We also propose a number of amendments designed to increase Commission efficiency and flexibility: (1) allow continuation of a Commissioner's service past term expiration, under certain circumstances, to maintain a Commission quorum and to offset delays in the confirmation process; (2) provide flexibility on hearings associated with Commission licensing of uranium enrichment facilities; (3) make explicit that the duration of a combined construction and operating license would allow up to 40 years of operation; and (4) eliminate the requirement for the NRC to maintain an office in the District of Columbia. Two proposed amendments are designed to eliminate duplicative regulatory roles: (1) eliminating NRC antitrust reviews; and (2) establishing NRC and Agreement State jurisdiction over radiological cleanup criteria for facilities licensed by them. The last two amendments would relax unnecessary or outdated provisions: (1) eliminating prohibitions on foreign ownership of power and research reactors; and (2) providing general gift acceptance authority commensurate with the provisions of other agencies.
FY 2000 Authorization Request Highlights
On May 4, 1999, the NRC submitted proposed legislation which would authorize appropriations for FY 2000. The proposed legislation would authorize an FY 2000 NRC budget of $471,400,000, including $465,400,000 for Salaries and Expenses Appropriation, and $6,000,000 for the Inspector General Appropriation. The NRC continues to recognize the high priority on reducing Federal spending emphasized by the Administration and the Congress. This budget, when adjusted for inflation, represents the lowest budget in the history of the NRC-a 25 percent reduction over the past seven years. In spite of the constrained fiscal environment, this budget fully supports the NRC ability to fulfill our fundamental health and safety mission, while continuing the most comprehensive reform effort in the history of the agency. Again, however, we urge caution in contemplating further reductions. A budget summary is located in Appendix (1).
The resources for the Nuclear Reactor Safety Arena support a comprehensive oversight program, including reactor inspection and reactor licensing activities for 103 operating reactors and a safety research program. The reactor oversight program will continue to bear a strong relationship to facility performance. However, we expect that these programs will change as a result of our on-going reevaluation of the reactor regulatory program. In anticipation of these changes, a reduction in event assessment/incident response activities has been included in the budget estimates. In addition, the budget estimates reflect anticipated reductions in reactor inspection activities due to continued improved plant safety performance and expected efficiencies to be gained from improvements in the inspection process. The budget includes funding for the review of two new reactor license renewal applications in FY 2000.
The Nuclear Materials Safety Arena supports an increase primarily from costs associated with making our materials, fuel cycle, and waste regulations more risk-informed and, where appropriate, performance-based; development and implementation of the new NRC registration program for certain industrial devices; initiation of research into the development and demonstration of risk assessment methods for dry cask storage; and enhanced efforts to develop the technical basis for performance criteria of dry storage casks under seismic loading conditions. The increase is partially offset by reductions associated with Ohio becoming an Agreement State.
The Nuclear Waste Safety Arena supports an increase primarily in the NRC high-level waste repository program activities, and ongoing decommissioning activities to work off the licensing backlog, to complete the Standard Review Plan for decommissioning, and to support an increased level of rulemaking activity. The increase is partially offset by a reduction in the number of inspections needed at uranium recovery facilities.
The International Nuclear Safety Support Arena reflects a change in how program funding is obtained. For FY 1999, the NRC renegotiated its reimbursable agreements with the Agency for International Development (AID) to recover NRC FTE costs for providing nuclear safety assistance to the countries of the Former Soviet Union (FSU). In FY 2000, the NRC will include the AID-related FTE costs for support of FSU and Central and Eastern European countries within the general fund portion of the requested appropriation.
The Management and Support Arena supports a decrease primarily based on agency-wide program reductions and efficiencies. Funding also decreases in information technology and management, as investments in the design and start-up of the Agency-Wide Document Access and Management System (ADAMS) are completed and the agency moves to a new integrated financial and resource management system (STARFIRE).
The Omnibus Budget Reconciliation Act of 1990 currently requires the NRC to collect approximately 100 percent of its budget (less the appropriations from the Nuclear Waste Fund) from user fees. This requirement expires at the end of FY 1999 and reverts to 33 percent. The NRC's authorization bill, which is consistent with the President's budget, includes a legislative proposal to extend the requirement for 100 percent fee recovery through FY 2004. The Commission continues to be sensitive to the fairness and equity concerns that 100 percent fee recovery entails for our licensees. Our authorization bill also will permit the NRC to charge other Federal agencies Part 170 inspection and licensing fees, thereby helping to mitigate, to a very small degree, some of the fairness and equity concerns expressed by the NRC, the Congress, and NRC licensees.
The discussions that follow provide the Subcommittee with further details of NRC's program activities and a description of our legislative recommendations.
Summary of Program Activities by Arena
Nuclear Reactor Safety
In the nuclear reactor arena, maintaining the safety of 103 operating nuclear power reactors remains our highest priority. In this context, the Commission intends to reinforce, accelerate, and expand efforts to improve NRC efficiency and effectiveness, to streamline our operations, and to consolidate our functions where appropriate. We are committed to making these improvements without compromising our mission of protecting public health and safety and the environment. We also are committed to the goal of using risk information and risk analysis as part of a policy framework that applies to all phases of our nuclear regulatory oversight, including licensing, inspection, assessment, enforcement, and rulemaking.
Risk-Informed, Performance-Based Regulation
The Commission is making substantial modifications to the NRC regulatory approach to become more risk-informed and, where appropriate, performance-based; to enhance our safety focus; to eliminate unnecessary regulatory burden; to improve the effectiveness, efficiency, predictability, and transparency of our processes; and to maintain public confidence in what we do. Recent accomplishments include increasing stakeholder involvement, refining NRC internal practices, completing NRC pilot programs, and laying the foundation for risk-informing NRC reactor regulations over the longer term.
Reactor Performance Assessment, Inspection, and Enforcement (The Oversight
As previously stated, the Commission is taking a more risk-informed and, where appropriate, performance-based approach in the oversight of nuclear reactors. We have made considerable progress in identifying necessary changes to the assessment, inspection, and enforcement processes to improve their objectivity; to make them more understandable, predictable, and risk-informed; and to focus on aspects of performance that have the greatest impact on safe plant operation. These efforts have been guided, in part, by four performance goals, as previously stated, used as "filters" to evaluate, prioritize, and sunset activities. Each activity is examined to see how it: (1) maintains public safety; (2) eliminates unnecessary NRC and licensee burden; (3) enhances public confidence; and (4) makes NRC activities more effective, efficient, and realistic.
The NRC staff has proposed to the Commission a new power reactor assessment framework, which builds upon the cornerstones of licensee performance that must be monitored to ensure that nuclear power reactor operations do not pose unacceptable risks to the public. The cornerstones support the NRC mission by ensuring that: (1) initiating events are reduced; (2) mitigation systems are available, reliable, and capable of performing their intended functions; (3) barriers are sufficient to limit the release of radioactivity; (4) adequate emergency preparedness functions are maintained; (5) licensees have implemented adequate programs to protect the public and workers from radiation; and (6) security measures are in place to protect against radiological sabotage. As part of the assessment framework, the NRC staff has identified performance indicators, performance indicator thresholds, and risk-informed inspections that would supplement and verify the validity of the performance indicator data.
This assessment framework provides a natural basis for a risk-informed baseline inspection program, one that identifies the minimum level of inspection required, regardless of licensee performance, to ensure adequate NRC oversight and independent assessment of licensee performance. Developed using a risk-informed approach, the proposed baseline inspection program includes a comprehensive list of inspectable areas within each cornerstone of the assessment framework. The Commission also has developed an interim Enforcement Policy that is integrated with the risk-informed inspection and assessment processes.
The new reactor oversight process will integrate assessment of the performance indicators with the results of the risk-informed baseline inspections. This integration will allow the NRC to make objective, predictable, and timely conclusions regarding licensee safety performance, and to communicate these results effectively to the licensees and to the public. The process includes specific thresholds-tied to the cornerstones of safety-that will trigger commensurate licensee and/or NRC action if they are exceeded.
We have made considerable progress in reshaping these NRC regulatory programs. Pilot inspections were begun in June 1999. Our intent is to make major process changes incrementally, to allow testing and adjustment during piloting and implementation. Much of the work that remains in FY 1999 and FY 2000 relates to bench-marking, conducting pilots, developing procedures, and training the NRC staff in the new processes.
Enforcement Program Changes
In parallel with these long-term improvements to the oversight process, the NRC has made several short-term changes to its enforcement program to reduce unnecessary NRC and licensee burden. On July 27, 1998, we issued enforcement guidance to clarify our existing Enforcement Policy. The changes ensure that: (1) licensees are given appropriate credit for identifying and correcting violations; (2) NRC and licensee resources are not expended on violations that do not warrant formal citations; (3) written responses to Notices of Violation are not required when necessary information already is docketed elsewhere; and (4) cases involving multiple examples of the same violation are treated consistently. The agency-wide implementation of this guidance has resulted in a significant reduction in the number of low-level (Severity Level IV) violations, which otherwise would absorb NRC and licensee resources in amounts disproportionate to the safety significance of the violations.
On January 22, 1999, the Commission approved a change to the Enforcement Policy that will expand the use of non-cited violations. The change was published in the Federal Register February 9, 1999, and became effective March 11, 1999. Except in limited circumstances, individual Severity Level IV violations now will not be cited, so long as they have been entered into the licensee corrective action program. Accordingly, the NRC inspection program will place more emphasis on assessing the effectiveness of licensee corrective action programs. This is consistent with the thrust of the risk-informed inspection process described earlier. In addition, in June 1999, the Commission approved changes to the Enforcement Policy that will address the use of risk considerations in enforcement decisions and eliminate the use of "regulatory significance," which was not well-defined as an escalating factor for certain enforcement actions.
By better focusing resources and improving internal procedures, the NRC has greatly reduced its licensing action backlog in FY 1999, and expects to eliminate this backlog completely in FY 2000. We are working with our stakeholders to improve the license amendment review process and shorten the review time. We have also initiated improvements to our 10 CFR 2.206 process for allowing the public to petition the NRC to take certain actions at licensed facilities.
As part of our commitment to risk-informed regulation, we have changed internal NRC operating practices. This has included providing additional guidance, training, and management attention to ensure that risk-informed licensing actions are given the appropriate priority. The completion of numerous plant-specific risk-informed licensing reviews in FY 1999 has helped to sharpen the focus on safety while reducing unnecessary regulatory burden. We also have worked to improve and clarify our requirements and guidance for facility changes, as well as our guidance for maintaining updates to plant final safety analysis reports (FSARs), which are used as reference documents for safety analyses. The Commission considers the progress made to date in these areas a significant regulatory success, because the NRC and many of its stakeholders worked closely in developing processes that both maintain safety and eliminate unnecessary NRC and licensee burden.
The NRC has improved the timeliness of reviews for converting power reactor licenses to improved standard technical specifications. This conversion improves consistency in interpreting and applying these requirements. In total, licensees for approximately 89 reactors have decided to convert to the new technical specifications, which licensees have projected will save from $150,000 to over $1,000,000 annually per site. To date, applications to convert have been received from 58 units, of which 49 units have been given approval, 23 since July 1998, which has eliminated the large backlog of applications under review over the last two years. We expect to issue approvals for an additional 4 units during the remainder of FY 1999. Work on applications will continue through FY 2000.
Reactor License Renewal
Establishing a stable, predictable, and timely license renewal process is a top NRC priority. The Commission has issued a policy statement laying out its expectations for a focused review of license renewal applications, built upon our license renewal regulations. To date, all milestones for the license renewal reviews have been met. Using case-specific orders, the Commission has established an aggressive but reasonable adjudicatory schedule for reviewing the Calvert Cliffs and Oconee applications. Revised goals are to complete the license renewal process in 30 months. We also have prepared procedures to control the reviews and to resolve generic renewal issues. NRC management meets monthly with the applicants to monitor progress and the resources expended, and to resolve renewal issues.
We also understand that we will receive the next license renewal application in December 1999 from Entergy for their Arkansas Nuclear One plant. Other applications from the Hatch and Turkey Point plants are expected in 2000, and we have asked for sufficient resources in our FY 2000 budget to handle the anticipated new applications. Lessons learned from the initial reviews may help to streamline later reviews even further.
License Transfers and Adjudicatory Processes
The Commission has issued a final rule to establish an informal streamlined hearing process for license transfers. Under this newly-adopted rule (Subpart M to 10 CFR Part 2), the Commission expects to complete informal hearings and issue final decisions on most license transfer applications within about 6-8 months of when the application is filed.
The NRC has completed final Standard Review Plans (SRPs) for antitrust and financial qualifications reviews, and a draft SRP for foreign ownership issues. A final SRP for foreign ownership issues is currently being considered by the Commission. SRPs document the process and criteria to be used by the NRC staff in performing its reviews, which improves the focus, effectiveness, predictability, timeliness, and efficiency of the process. In April 1999, the NRC completed its review and approval of the license transfer requests for Three Mile Island Unit 1 and the Pilgrim station.
The Commission currently is developing a proposed rule that would provide a more comprehensive streamlining of its adjudicatory processes. Concurrently, the Commission has been monitoring closely its adjudicatory tribunals to ensure appropriate adherence to the substantive and schedular provisions of the Commission Rules of Practice.
Reactor Safety Research
The NRC research program continues to contribute in a significant way to our success in achieving performance goals in the reactor arena. Research efforts are underway to resolve important safety issues such as the operation of air-operated valves, which could result in a safety problem if key valves failed when called upon to perform a safety function. The program also facilitates NRC support for industry initiatives and contributes to the reduction of unnecessary burden. For example, working cooperatively with the American Society of Mechanical Engineers (ASME), NRC-sponsored research established the technical bases for changing the basic fracture toughness curves for determining nuclear plant pressure and temperature limits. This provided a significant burden reduction for the majority of operating plants.
In addition, current research is re-evaluating pressurized thermal shock for reactor pressure vessels (RPVs). Work in this area has shown significant potential for reduction of unnecessary burden through technical advancements in materials assessment, fracture mechanics, and non-destructive evaluation. The research program also is enhancing our understanding of new nuclear technologies, such as proposals to increase fuel burn-up without increasing the risk to the public health and safety. We are working to consolidate the several computer programs now used for thermal-hydraulic and severe accident analysis. Our research also is supporting the framework for moving to a more risk-informed and, where appropriate, performance-based regulatory approach through pioneering work in probabilistic risk assessment. Building on a long history of advancing PRA technology and recent successes such as risk-informing reactor piping inspection processes, we are focusing our research efforts on providing the technical bases for risk-informing NRC's reactor regulations.
Other Significant Reactor Rulemakings
The Commission also has underway other significant rulemakings affecting reactor licensees. The first is a revision to Appendix K of 10 CFR Part 50, which recognizes the ability of new flowmeter technologies to more accurately measure water flow rates. We have informed OMB that this rule will likely constitute a major rule because it will provide more than $100 million in annual benefits to our licensees, by allowing them to increase their electrical generating capacity by one percent. This is an example of NRC recognizing the advantage of updated technology.
The second rulemaking is a revision to Part 50 to allow reactor licensees to use revised source terms in design basis accident radiological analyses. This rule is also expected to reduce unnecessary regulatory burden, reduce worker radiation exposure, and improve overall safety. It is the result of extensive NRC research and analysis over the past twenty years, which has led to a much better understanding of accident source terms.
Nuclear Materials Safety
In a manner similar to initiatives evolving in the reactor safety arena, we are enhancing our regulatory programs for nuclear materials safety. The NRC and Agreement States regulate more than 23,000 specific users of radioactive materials in medical, academic, industrial, and commercial applications, in addition to more than 100,000 general licensees. Thirty States currently are Agreement States. Ohio is likely to become an Agreement State later this year, with Oklahoma and Pennsylvania expected to become Agreement States in FY 2000, Minnesota in FY 2002, and Wisconsin in FY 2003. Our testimony highlights some of the many and diverse program improvements underway in the nuclear materials arena.
The NRC staff is reviewing public comments on our proposed revisions to the medical use regulations in 10 CFR Part 35. The revision of Part 35 will achieve several specific improvements in the medical use regulatory program. These improvements would make the rule more performance-based and would focus the regulations on medical procedures that pose the highest risk, from a radiation safety aspect, with a corresponding decrease in the oversight and regulatory burden for lower risk activities. The proposed revision of the Medical Policy Statement and a proposed revision to Part 35 were published in the Federal Register for public comment on August 13, 1998, and we have had the benefit of many stakeholder interactions since that time. The Commission will be reviewing a final draft rule this summer, and we expect to complete this rulemaking in early 2000.
The revisions to Part 35 are being developed using an enhanced participatory process, which is intended to develop a final rule that will be accepted broadly, and includes participation by several medical professional organizations, the Organization of Agreement States, the Conference of Radiation Control Program Directors, the NRC Advisory Committee on the Medical Use of Isotopes, and other stakeholders. We have solicited early public input through Federal Register notices, public meetings with medical professional societies and boards, open meetings of the groups developing the revised policy statement and rule language, public workshops, and Internet postings of relevant background documents.
Spent Fuel Storage
The NRC has made significant progress in its review of dual-purpose cask systems for spent fuel storage and transportation. By December 2000, we anticipate that all six of the dual purpose cask system reviews in process and two of the transportation reviews should be completed.
The NRC issued a license to the DOE for the TMI-2 fuel debris storage facility at the DOE Idaho Operations Office (DOE-ID) in March 1999. That same month, we issued a license to Portland General Electric (Trojan) for an independent spent fuel storage facility, and we expect to issue another to Rancho Seco prior to the end of 1999. We transferred the Fort St. Vrain independent spent fuel storage installation license to the DOE-ID in June 1999. We will continue to maintain an aggressive licensing review schedule for the proposed Private Fuel Storage facility located on the Skull Valley Band of Goshute Indian Reservation in Utah. We also are continuing to work with the DOE on projects involving spent fuel storage and management.
As in other arenas, we have worked to make our spent fuel storage oversight more effective and timely while ensuring safety. We have initiated process changes to enhance and focus technical reviews, to develop guidance for those reviews, to reduce the time-frame for storage cask certification rulemakings, to enhance our reviews based on lessons learned, to ensure consistency in licensee change processes, and to improve communication with internal and external stakeholders.
Mixed Oxide Fuel (MOX)
In accordance with the regulatory oversight responsibility for mixed oxide (MOX) fuel assigned to the NRC in the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-261), the Commission has initiated preparatory activities for the licensing of a MOX fuel fabrication facility and subsequent irradiation of the fuel in commercial reactors.
The Commission notes that the NRC FY 2000 budget request did not include resources to conduct work related to the DOE MOX fuel program because, at that time, the NRC had planned to continue to carry out such work through its reimbursable agreement with the DOE. However, because Public Law 105-261 subsequently gave NRC the authority to license a MOX facility, this work is now a part of the NRC mission. As a result, the NRC must use its appropriated funds to carry out this effort, and will not continue its reimbursable agreement with the DOE. We are making changes to our budget to accommodate this new responsibility.
These appropriated resources will be used to meet with the MOX applicant and to review topical programs related to the license application for the fuel fabrication facility, such as safeguards, criticality safety, radiation protection, and quality assurance, as well as early issues related to environmental review and the use of MOX fuel in commercial power reactors. A license application is anticipated in November 2000, and, given current projections for the licensing review (including the completion of an environmental impact analysis), we would expect final licensing to occur in FY 2003. We also have determined those aspects of MOX fuel irradiation that necessitate beginning research in FY 2000 to support the licensing action.
External Regulation of the Department of Energy (DOE)
The Commission recognizes the position of the Secretary of Energy in his recent letter to Congress, withdrawing support for external regulation of DOE facilities by the NRC. However, based on the preliminary results of the pilot projects and our observations to date, the Commission continues to believe that the NRC could regulate substantial portions of DOE in a manner that would be cost-effective and relatively straightforward, and that would accomplish the objectives of external regulation. The cost to the DOE could be minimized-and could even result in a net savings-by reducing the level of DOE oversight to a level consistent with a corporate oversight model. The NRC had substantial technical and policy differences with the views presented by the DOE in its March 31, 1999 report to Congress on the results of the pilot program. Consequently, we did not concur in this report, and instead have recently issued an independent report to Congress and other stakeholders.
Research is contributing significantly to performance goals in the nuclear material safety arena. For example, research provides the technical basis to address licensing questions related to the structural integrity of dry cask storage systems. Research also is being conducted to provide the technical basis to grant credit for fuel burn-up in the licensing of spent fuel transportation casks.
Hanford Tank Waste Remediation System Program
The NRC continues to assist the DOE in its River Protection Project - Privatization (formerly known as the Hanford Tank Waste Remediation System (TWRS) program). In conjunction with this effort, we have recruited highly competent staff with waste solidification and vitrification expertise and experience; gained extensive understanding of the DOE plans for removal and vitrification of the radioactive and highly toxic wastes from the underground storage tanks; and developed a licensing Standard Review Plan and regulatory basis for the possible future NRC licensing of the DOE Hanford vitrification facility. However, the Department of Energy has made significant changes in its approach to this project in the past year, which in turn have significant implications for the timing of any NRC licensing of any phase of this project. The Commission recently directed the staff to consult with the appropriate Congressional committees, including of course this committee, on how and whether to continue NRC's involvement in light of the DOE changes.
Nuclear Waste Safety
The NRC has launched similar initiatives to improve the effectiveness and efficiency of our regulatory programs in the nuclear waste safety arena. The NRC continues to progress in its reviews and pre-licensing consultation under existing law related to the DOE program to develop a high-level radioactive waste repository. The Commission firmly believes that a permanent geologic repository is the appropriate mechanism for the nation ultimately to manage spent fuel and other high-level radioactive waste (HLW). In accordance with the statutory direction in the Nuclear Waste Policy Act and the Energy Policy Act of 1992, the NRC, before licensing a repository, must consult extensively with the DOE to develop a regulatory framework. Further, if the DOE recommends a site for a repository, the NRC must evaluate the adequacy of the DOE site characterization and waste form proposal. Ultimately, if the DOE submits a license application for a repository, the NRC must determine whether it can authorize repository construction, receipt of waste, and final repository closure. The NRC is also making significant progress in its programs for nuclear facility decommissioning, uranium recovery, and low-level waste management.
High-Level Waste - Yucca Mountain Status and Key Issues
In FY 2000, the NRC expects to finalize a performance-based regulatory framework by issuing 10 CFR Part 63. As called for by the Energy Policy Act of 1992, Part 63 would implement health-based standards that would apply solely to the proposed Yucca Mountain repository. The proposed Part 63, which we published for public comment on February 22, 1999, establishes licensing criteria to evaluate the performance of the repository system at Yucca Mountain, Nevada. Over the course of the public comment period (which was extended in response to stakeholder requests), we have conducted five public meetings in Nevada on the proposed technical criteria.
In parallel with the development of Part 63, the NRC continues to develop a Yucca Mountain review plan and to resolve key technical issues to prepare for reviewing the DOE license application expected in 2002. These activities aid in the ongoing review of the DOE draft license application and provide guidance to the DOE on what is needed for a complete and high quality application. To that end, we will continue to evaluate the implementation of the DOE quality assurance program. We expect to complete our review of the DOE draft Environmental Impact Statement (EIS) for the Yucca Mountain site in FY 2000. The NRC staff has prepared a plan for EIS review that will include the consideration of public concerns in the preparation of NRC comments.
Decommissioning involves removing radioactive contamination in buildings, equipment, groundwater, and soils to such levels that a facility can be released for either unrestricted or restricted use. The NRC is continuing to encourage timely cleanup of approximately 40 material and fuel cycle facility sites through the implementation of its Site Decommissioning Management Plan (SDMP). The NRC expects to remove at least three sites from the SDMP list in FY 1999 and FY 2000. The NRC also will continue to oversee the decommissioning of 19 commercial power reactors and hundreds of other licensed facilities. The NRC monitors licensee actions to store or dismantle and decontaminate the facilities in a safe manner while maintaining the licensed configuration of the facility and managing the use of decommissioning funds as described in the regulations. The NRC will continue to enhance the decommissioning program to add stability, predictability, and efficiency to the process by incorporating additional experience into rules and guidance documents.
In FY 1999, the NRC initiated the consideration of a rulemaking to establish criteria for release of solid materials with low levels of radioactive contamination, in order to establish a regulatory framework more consistent with existing requirements for air and liquid releases. The process will include facilitated public meetings to obtain early stakeholder input on major issues associated with such a rulemaking, including conducting a scoping process related to the scope of environmental impacts. In addition, last month we published an issues paper in the Federal Register for public review, to provide background information in preparation for public workshops in the Fall of 1999 and analysis of stakeholder views in FY 2000. In parallel with these activities, we will continue to develop the technical basis, draft environmental impact statement, draft regulatory analysis, and draft regulatory guidance needed to accompany any proposed action.
In FY 2000, the NRC will finalize decommissioning guidance to provide an overall framework for dose assessment and decision-making at sites undergoing decommissioning. We will continue development of a Standard Review Plan for decommissioning materials sites and power reactor license termination plans, to facilitate the NRC staff review of licensee submittals in a manner that is timely, efficient, consistent, and ensures the protection of public health and safety. In addition, we will continue a pilot study during FY 2000 involving five materials sites. Based on this experience, recommendations will be made to streamline the decommissioning submittal and review process for materials sites.
International Nuclear Safety Support
The NRC carries out a low-cost but high-impact program of international nuclear safety activities that supports United States domestic and foreign policy interests in the safe, secure, and environmentally acceptable use of nuclear materials, energy, and in nuclear non-proliferation. This program ensures, through active participation in mutually beneficial bilateral and other international efforts, that the NRC supports the U.S. policy of strengthening nuclear regulatory regimes abroad and fostering a global nuclear safety culture, as well as ensuring the security of strategic special nuclear material.
The public and NRC licensees derive tangible and intangible benefits from these international activities. Public confidence in nuclear energy as a technology is strongly impacted by the public perception of how safely nuclear operations are conducted-whether domestically or abroad. In addition, as a major supplier of nuclear fuel, equipment, and technical services, the United States depends on an orderly and predictable export licensing regime to maintain marketability. NRC assistance also helps in the prevention or mitigation of problems in countries with weak or embryonic nuclear safety and nuclear regulatory cultures. NRC participation in international safeguards and non-proliferation activities directly supports the assessment of potential threats against the U.S.
Cooperation with foreign countries in the area of nuclear safety provides a considerably larger operational experience base than exists in the United States alone. As one aspect of this cooperation, the NRC maintains extensive research agreements with organizations in many foreign countries. This cooperative approach helps to leverage our research resources, and recognizes the inherently international character of the nuclear business. The resultant resolution of safety issues leads to benefits for the U.S. nuclear power industry and, more importantly, aids considerably in the prevention of nuclear accidents in countries with weak or embryonic nuclear safety cultures.
Export Licensing and Non-Proliferation Activities
The NRC reviews and takes action on approximately 75 to 100 import and export license applications per year. In addition, the NRC actively participates in international export control through groups such as the Nuclear Suppliers Group and the Zangger Committee, to ensure that export policies are consistent among nuclear supplier states. The NRC also helps the U.S. to meet its obligations under Article IV of the Nuclear Non-Proliferation Treaty, including support for bilateral and International Atomic Energy Agency (IAEA) sponsored exchanges of equipment, materials, and scientific and technological information on the peaceful uses of nuclear energy. Within the limits of available resources, the NRC also provides technical assistance to U.S. policy makers in connection with (1) the U.S.-Russia agreement to make permanent the cessation of plutonium production for nuclear weapons; (2) the U.S.-Russia-IAEA Trilateral Verification Initiative on excess weapons material; (3) the process of making decisions on how to dispose of excess plutonium; and (4) the Fissile Material Cut-Off Treaty. Finally, the NRC is working closely with the Executive Branch to facilitate the effective implementation of the Strengthened Safeguards System of the IAEA.
Bilateral and Multilateral Activities
Since the demise of the Soviet Union, particular emphasis has been placed by the United States and the international community on addressing both nuclear safety and nuclear materials safeguards concerns in the countries of the former Soviet Union (FSU) and in central and eastern European countries (CEE). The NRC strongly supports these efforts, and has focused its role primarily on strengthening the nuclear regulatory authorities of these countries. We conduct programs (funded primarily through the U.S. Agency for International Development (AID), DOD, and DOE) to train regulators from FSU and CEE countries on the creation and/or strengthening of their regulatory capabilities. We continue to see positive results from our assistance efforts with the Russian, Ukrainian, Kazakh, Armenian, Czech, Slovak, Lithuanian, Bulgarian, and Hungarian regulators. Much of this success can be attributed to their own willingness and desire to enhance their nuclear safety and regulatory infrastructure, and their growing expertise in the application of Western safety and safeguards review tools.
Two examples of high-level Commission opportunities to focus on nuclear safety with top U.S. and foreign government officials are the U.S.-Russian Joint Commission on Economic and Technological Cooperation, chaired by the U.S. Vice President and the Russian Prime Minister, and the U.S.-South African Binational Commission (BNC), chaired by the Vice President and the South African Deputy President. Both commissions have achieved measurable results in enhancing nuclear safety, and we look forward to continued cooperative efforts in this area.
International Safety Conventions
The NRC has worked extensively in the development of the Convention on Nuclear Safety (CNS)-the first instrument to address directly the safety of nuclear power plants worldwide. This Convention obliges contracting parties to establish and maintain proper legislative and regulatory frameworks to govern safety. On April 11, 1999, the United States became a party to the Convention, and participated in the final plenary of the first Review Meeting in April 1999. The U.S. also deposited its National Report, which had been prepared by the NRC. We anticipate fully participating in all aspects of the Convention's preparatory, organizational and review meetings in the future.
International conventions on waste management and liability also have been negotiated, as integral parts of U.S. efforts to enhance global nuclear safety . These conventions are undergoing Executive Branch review and likely will be forwarded by the President to the Senate for its advice and consent to ratification in calendar year 1999.
Management and Support Arena
As stated earlier, our FY 2000 budget request supports a decrease in the area of management and support, primarily based on agency-wide program reductions and efficiencies, with additional decreases due to the completion of milestones in information technology and management. A particular area of emphasis, which I will cover in more detail, is our effort to resolve Year 2000 computer issues.
Year 2000 Implementation
All 88 of our internal mission-critical, business-essential and non-critical systems have been examined and, as needed, fixed with regard to the Year 2000 (Y2K) problem. This work was accomplished almost two months ahead of the OMB-established milestone, and well under budget.
The one NRC mission-critical system that is directly linked to operating nuclear power plants is our Emergency Response Data System (ERDS). This application performs the communication and data transmission functions that provide near real-time data to NRC incident response personnel during declared emergencies. We have verified that this system has been made Y2K compliant and that the interface of the system with licensed facilities is functional.
Externally, the NRC is working with nuclear power plants and our other licensees to ensure Y2K readiness for those systems needed to operate and shut down plants safely, recognizing the importance of ensuring electrical grid reliability and the safety and security of radioactive materials. Based on the results of our audits, we have concluded that licensee management oversight of the Y2K readiness programs generally has been aggressive and is contributing to the success of nuclear facility Y2K readiness efforts. Nonetheless, NRC inspectors assigned to power reactor sites have reviewed licensees Y2K programs to ensure that all facilities are taking appropriate actions. Based on our reviews, we believe that our licensees are devoting the necessary resources to their programs to meet their readiness schedules.
In July 1999, the NRC received reports from all 103 operating nuclear power plants indicating that there are no Y2K-related problems that directly affect the performance of safety systems. Sixty-eight of these plants indicated that all of their computer systems are "Y2K ready." The remaining 35 plants reported that they have additional work to complete on a few non-safety computer systems or devices to be fully Y2K ready, and provided their schedules for completing this work. Of the 35 plants, about one-third have remaining work involving systems needed for power generation. Other plants have work that deals with plant monitoring and administrative systems. I would emphasize that none of the remaining work affects the ability of the plants to shut down safely, if needed. Typically, the remaining Y2K work to be completed after July 1 of this year is dependent on a scheduled plant outage this fall, or the delivery of a replacement component.
The NRC will continue to monitor the progress at those plants that have remaining items of work, and will independently verify completion of these items, including Y2K contingency plans-procedures for dealing with unexpected events. All licensees are expected to be Y2K ready and to have contingency plans in place before December 31. If, by the end of September, we believe that any needed Y2K readiness activities will not be completed in advance of the December 31 to January 1 transition, we will take appropriate action, including the issuance of shutdown orders, if necessary.
Legislative Proposals to the 106th Congress
The Commission has submitted a number of legislative proposals for the consideration of the 106th Congress. We are pleased to acknowledge that the Chairman of this Subcommittee, Mr. Barton, has by NRC request introduced both our reauthorization bill and our legislative proposals. These proposals are designed to improve our safeguards provisions, to increase our efficiency and flexibility, to eliminate duplicative regulatory roles, and to relax unnecessary or outdated provisions. Each of the individual proposals is discussed below.
Improvements to NRC Safeguards Provisions
Carrying of Firearms by Licensee Employees: This amendment would authorize guards to carry firearms at Commission-designated facilities owned or operated by a Commission licensee or certificate holder, at any NRC-licensed or certified facility where there are special nuclear materials present, and while engaged in transporting special nuclear materials. The guards would be authorized to use the weapons, in circumstances defined by Commission regulations and guidelines, where necessary to prevent sabotage of a facility designated by the Commission or to prevent theft of materials capable of being used for nuclear explosives. The purpose of the amendment is to help mitigate licensee guards' reluctance to use their weapons in defending such facilities and transports against attack because of fear of prosecution under State laws that provide that weapons may be used only to protect the user's own life or the life of another. The amendment could provide the possibility of shielding the guards against prosecution by state authorities for discharge of firearms in the performance of official duties. The authority that would be provided by this amendment already exists with respect to guards at Department of Energy facilities and DOE guards transporting special nuclear materials.
Unauthorized Introduction of Dangerous Weapons: This amendment would allow the Commission to issue regulations that would, in effect, make it a Federal crime for an individual who has not received prior authorization to bring any dangerous weapon, explosive, or other dangerous instrument likely to produce substantial injury or damage into facilities subject to NRC licensing authority. Currently, the NRC may impose sanctions against the licensee, but no Federal law permits imposing criminal sanctions against the individual responsible for bringing the weapon or other dangerous instrument on site. Enactment of this amendment would assist NRC licensees in their efforts to safeguard licensed nuclear facilities and materials against nuclear theft or radiological sabotage.
Sabotage of Production, Utilization, Uranium Enrichment, Fuel Fabrication, or Waste Facilities: Section 236 of the Atomic Energy Act currently addresses sabotage or attempted sabotage of production, utilization, and waste storage facilities. However, it can be argued that this provision is not applicable during the construction phase of such facilities. Past events have indicated that sabotage can occur during the construction phase that is not discovered until the operational phase, and thereby has the potential to impact public health and safety. This amendment would make it a Federal crime to sabotage such facilities during the construction phase, if the sabotaging action could jeopardize public health and safety. In addition, this amendment would extend these sabotage provisions - for all phases - to other types of facilities, including (1) waste treatment facilities, (2) waste disposal facilities, and (3) uranium enrichment and nuclear fuel fabrication facilities licensed or certified by the NRC. Enacting criminal sanctions to help deter sabotage and increasing the range of facilities covered will provide further protection of the public health and safety.
Increased Efficiency and Flexibility
Continuation of Commissioner Service: This amendment would allow a Commissioner whose term has expired to continue in office (subject to the removal power of the President) until whichever of the following occurs first: (1) his or her successor is sworn in, or (2) the expiration of the next session in Congress after the expiration of the Commissioner's fixed term of office. Enactment of this amendment would, in most circumstances, allow the Commission to maintain a quorum of at least three individuals, even when the terms of several successive Commissioners have expired without their reappointment, thus avoiding the potential disruption of agency business due to the loss of a quorum. It would also be helpful for cases in which a Commissioner is renominated, but with insufficient time for the Senate to act before the expiration of the prior term. Such a holdover provision would enable the Commission to operate in accordance with the intent expressed by the Congress in the Energy Reorganization Act of 1974, that the NRC should have a 5-member Commission. Holdover provisions are found in the organizational statutes of the majority of independent regulatory agencies.
Hearings on Licensing Uranium Enrichment Facilities: This amendment would improve the hearing process associated with NRC licensing of uranium enrichment facilities by eliminating the requirement for such a hearing to be "on the record." Hearings that are required to be "on the record" must conform to the more elaborate formalities prescribed by the Administrative Procedure Act. Such hearings, if not appropriately disciplined, can be inefficient, protracted, and costly. This amendment would not eliminate the possibility that the Commission might determine that a formal hearing is appropriate for the licensing of uranium enrichment facilities, but it would give the Commission the flexibility to determine which type of hearing is most suitable.
Duration of Combined Construction and Operating Licenses: The Commission is seeking a technical correction that would make the duration of a combined construction and operating license consistent with the duration of a license for an initial operating license under the circumstances where the construction and operating phases are licensed separately. The Atomic Energy Act authorizes the NRC to specify a duration of up to 40 years for any commercial license it issues, including an initial operating license for a nuclear power plant. The Energy Policy Act of 1992 amended the Atomic Energy Act to make explicit that the NRC can issue a combined license for construction and operation of a nuclear power plant. However, the Energy Policy Act did not make explicit that the duration of a combined license should allow for up to 40 years of operation. In the absence of such an explicit provision, it might be argued that the period of operation under a combined license is limited to 40 years from the time authorization is given to construct the plant. There is no safety reason for such a limit.
Office Location: This amendment would change the requirement that the NRC maintain an office for the services of process and papers with the District of Columbia (DC). The Atomic Energy Act requirement that the NRC maintain such an office was enacted before the Commission consolidated the agency in Rockville, Maryland, and there is no longer a sound reason for maintaining the DC office. The elimination of the requirement could result in a monetary savings for the agency because it would eliminate the need to maintain a DC address for hand or mail delivery of documents. Commission efficiency could be enhanced if this statutory requirement were eliminated.
Elimination of Duplicative Regulatory Roles
Elimination of NRC Antitrust Reviews: This amendment would eliminate the Commission's antitrust review authority with respect to pending or future applications for a license to construct or operate a utilization or production facility. At the time of enactment of the Atomic Energy Act provisions requiring NRC antitrust reviews in connection with application for a Commission license to construct or operate a commercial utilization or production facility, the NRC appeared to be in a unique position to ensure that the licensed activities of nuclear utilities would not create a situation inconsistent with the nation's antitrust laws. Today, however, the NRC's antitrust reviews unnecessarily duplicate other agencies' efforts, particularly those of the Department of Justice and the Federal Energy Regulatory Commission. The amendment would preserve the Commission's authority to enforce antitrust conditions in licenses issued before the amendment became effective, and it would not affect the Commission's legal authority with respect to those conditions.
Actions Relating to Source, Byproduct and Special Nuclear Material: The Commission has issued regulations that establish radiological criteria for the termination of licenses that fall under its regulatory authority and are protective of public health and safety. Creation of an additional cleanup standard by Federal statute or regulation may make it extremely difficult for the cleanup of a site to reach finality. This amendment of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) would make clear that the standards issued by the Commission and its Agreement States would govern cleanup of Atomic Energy Act material at facilities licensed by them. There would, however, be an exception that will allow the Commission or an Agreement State to invoke the application of CERCLA in the rare circumstance where that is necessary to effect adequate cleanup.
This amendment would also include in the CERCLA definition of "Federally permitted release" Atomic Energy Act material that is released in accordance with NRC regulations following termination of a license issued by the Commission or by an Agreement State. This would make the treatment of such releases consistent with the treatment of releases under a current NRC license.
Relaxation of Unnecessary or Outdated Provisions
Elimination of Foreign Ownership Prohibitions: These amendments would eliminate the current restrictions on foreign ownership of utilization facilities (power and research reactors). These restrictions were originally enacted at a time when commercial development of nuclear power was in its very early stages, but the situation has changed significantly since then. Today, commercial use of nuclear power is common in many countries, and the underlying technology is widely known. The Commission would continue to scrutinize applicants for licenses to ensure that issuance of a license to a new owner would not be inimical to the common defense and security or to the health and safety of the public.
Gift Acceptance Authority: This amendment would provide the NRC with general gift acceptance authority. To implement this new authority, the Commission would be required to establish criteria to ensure that the acceptance of a gift would not compromise the integrity of the work of the agency. The issue of NRC gift acceptance authority has arisen a number of times in recent years, primarily with respect to acceptance of library and training materials from outside sources. Many other government agencies currently have such authority.
Over the past few years, we have made substantial progress in improving our regulatory programs, and we have accelerated that progress in the past year. Our interactions with this Subcommittee have contributed to this success, and we welcome your continued constructive oversight. With sufficient resources, strong leadership, and broad support, we plan to continue our efforts to enhance the effectiveness and efficiency of the NRC by pursuing the paths that already have been charted. The Commission fully expects that new areas will continue to arise, requiring attention and additional effort. As with current areas of reform, we will continue to ensure stakeholder involvement in the change process. We believe that we have laid the groundwork not only for significant short-term adjustments, but for enduring improvements to the NRC regulatory paradigm, institutionalized and stabilized through incorporation into our performance-based planning process.