EA-96-131 - Palisades (Consumers Power Company)

August 13, 1996

EA 96-131

Mr. T. Palmisano
General Manager
Palisades Nuclear Generating Plant
Consumers Power Company
27780 Blue Star Memorial Highway
Covert, Michigan 49043-9530

SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY - $50,000 (NRC Inspection Report No. 50-255/96004(DRS))

Dear Mr. Palmisano:

This refers to the special inspection conducted on March 18 through April 29, 1996, at the Palisades Nuclear Generating Plant. The purpose of the inspection was to review several 10 CFR Part 50, Appendix R, fire protection deficiencies identified by your staff as being outside the design basis of the facility and your immediate and long-term corrective actions for those deficiencies. The report documenting the inspection was sent by letter dated May 20, 1996, and a pre-decisional enforcement conference was conducted on June 21, 1996. The reportable deficiencies were described in seven Licensee Event Reports submitted to the NRC between August 14, 1995, and April 22, 1996.

Based on the information developed during the inspection and the information that your staff provided during the conference, the NRC has determined that a violation of NRC requirements occurred. The violation, which involves your failure to implement prompt and effective corrective action for these deficiencies, is cited in the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice) and the circumstances surrounding the violation are described in detail in the subject inspection report.

Specifically, since the first NRC Appendix R inspection was completed at Palisades in September 1986, both NRC inspection activities and your staff's self-assessments have repeatedly identified deficiencies in Palisades' compliance with the requirements of Appendix R. Your staff's corrective actions for identified Appendix R deficiencies were not always timely or effective.

In mid-1994, you initiated the Appendix R Enhancement Program to place an increased emphasis on the identification and resolution of long-standing Appendix R deficiencies at Palisades. On December 13, 1994, your engineering staff met with Region III staff to describe the breadth and depth of your engineering self-assessments, including the Appendix R Enhancement Program. In recognition of the extent of your commitment to identify engineering issues, in a letter dated February 23, 1995, documenting the December 1994 meeting, we indicated that our inspections would primarily concentrate on a review of the thoroughness of corrective actions to assure resolution of issues.

As a result of the Appendix R Enhancement Program, your staff identified seven safety significant deficiencies that were the focus of our inspection. Our review has indicated that your staff's corrective actions for those issues were not effective and were not implemented within a time-frame consistent with the potential safety significance of the deficiencies. While you implemented short term corrective action consisting of an hourly fire watch, your staff did not implement immediate and comprehensive corrective actions which were necessary to ensure the ability to cope with the worst case fire scenario while long-term corrective actions were being planned and implemented.

Your failure to implement prompt and comprehensive corrective actions was most evident with the lack of circuit fuse coordination in the Emergency Diesel Generator 1-1 potential transformer circuit. Loss of this circuit could have caused a loss of automatic and manual voltage control and rendered the diesel generator inoperable. Once this issue was identified on November 3, 1995, your staff failed to provide adequate guidance to the operators to enable them to promptly identify this condition and take action to recover the diesel generator and mitigate the consequences of this event. Your staff did not implement corrective actions commensurate with the potential safety significance of this issue until after the NRC inspection exit meeting conducted on April 29, 1996.

For five of the seven deficiencies, immediate corrective action consisted of relying on a roving one-hour fire patrol as a compensatory measure for design deficiencies, pending implementation of long-term corrective actions. In each of these cases, your staff either relied or planned to rely solely on this compensatory measure for a significant period of time while your staff completed the Appendix R Enhancement Program. This reliance on roving one-hour fire patrols as interim compensatory measures for several safety significant design deficiencies indicated a lack of sensitivity to implementing immediate corrective actions commensurate with the safety significance of the deficiencies.

Our inspection also revealed that in instances where all corrective actions had been completed, the corrective actions were not sufficiently rigorous to adequately resolve the issues. In the case of the lack of procedural guidance to conduct cold shutdown repairs for the low pressure safety injection pump, the corrective actions were not adequate to isolate a fire induced fault and allow local manual operation of the pump to permit cold shutdown of the facility. In the case of the lack of circuit separation with the emergency diesel generators, the evaluation of the non-rated fire barrier between the Diesel Generator 1-1 room and the air intake plenum was not technically sufficient to demonstrate that the barrier had a fire rating equivalent to the fire loading of the room. The ineffective resolution of these two issues, combined with the poor technical evaluations associated with the potential spurious operation and damage of alternate shutdown motor-operated valves and the potential improper setting of the low voltage cut-off for the alternate shutdown panel inverter, indicate a lack of technical discipline in applying the corrective action process associated with Appendix R deficiencies.

While the probability of a fire occurring as described in Appendix R is relatively low, the consequences of such an event occurring at Palisades could have been high since the ability to maintain the plant in hot standby, as required by Appendix R, could only have been achieved by significant operator actions, troubleshooting, and repair activities to compensate for the design deficiencies. While you informed us at the enforcement conference that short-term corrective actions have now been initiated, the failure to implement prompt and effective corrective actions for deficiencies in the Appendix R fire protection program is a significant regulatory concern. Therefore, this violation has been categorized in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600, at Severity Level III.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $50,000 is considered for a Severity Level III violation. Because your facility has been the subject of escalated enforcement actions within the last two years ¹, the NRC considered whether credit was warranted for Identification and Corrective Action in accordance with the civil penalty assessment process in Section VI.B.2 of the Enforcement Policy. Credit was not warranted for identification because the NRC identified the corrective action violation.

However, credit was warranted for Palisades' planned and completed corrective actions initiated following NRC identification of the corrective action weaknesses. These included, but were not limited to: 1) reviewing the corrective action process, including all open condition reports and all corrective actions, for appropriateness of compensatory measures; 2) providing "Group Think" training to managers; 3) scheduling lessons learned training to be completed prior to November 1996; 4) revising the plant modification process to strengthen fire protection and Appendix R review criteria; 5) modifying the Emergency Diesel Generator 1-1 potential transformer circuit; 6) providing the operators with augmented procedural guidance and spare parts for cold shutdown repair of the low pressure safety injection pumps; and 7) establishing a periodic surveillance procedure to test the alternate shutdown panel inverter low voltage cut-off setpoint. Further, Palisades staff finalized schedules for modifications to coordinate the main power fuses with the branch circuit breakers for the 125 volt DC panels, to improve emergency lighting in certain areas of the plant, and to eliminate the potential for fire induced control circuit damage on alternate shutdown motor-operated valves.

Therefore, to emphasize the need to initiate prompt and effective corrective action for significant deficiencies, I have been authorized, after consultation with the Director, Office of Enforcement, to issue the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice) in the base amount of $50,000 for the Severity Level III violation.

You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. In your response, you should document the specific actions taken and any additional actions you plan to prevent recurrence. After reviewing your response to this Notice, including your proposed corrective actions and the results of future inspections, the NRC will determine whether further NRC enforcement action is necessary to ensure compliance with NRC regulatory requirements.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response will be placed in the NRC Public Document Room (PDR). To the extent possible, your response should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction.

Sincerely, /s/ A. B. Beach A. Bill Beach Regional Administrator

Docket No. 50-255
License No. DPR-20

Enclosure: Notice of Violation and
Proposed Imposition of Civil Penalty

cc w/encl:
R. A. Fenech, Vice President,
Nuclear Operations

W. Smedley, Manager,
Licensing Department

James R. Padgett, Michigan Public
Service Commission

Michigan Department of Public Health

Department of Attorney General (MI)

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NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTY

Consumers Power Company Docket No. 50-255 Palisades Nuclear Generating Plant License No. DPR-20 EA 96-131

During an NRC inspection conducted from March 18 through April 29, 1996, a violation of NRC requirements was identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the Nuclear Regulatory Commission proposes to impose a civil penalty pursuant to Section 234 of the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205. The particular violation and associated civil penalty are set forth below:

Palisades Nuclear Generating Plant Operating License, DPR-20, Amendment No. 171, Section 2.2.C.(3), requires in part, that the licensee shall implement and maintain in effect all provisions of the approved fire protection program as described in the Final Safety Analysis Report for the facility and as approved in the SERs dated September 1, 1978, March 19, 1980, February 10, 1981, May 26, 1983, July 12, 1985, January 29, 1986, December 3, 1987, and May 19, 1989.

Administrative Procedure 9.48, "Fire Protection Plan," Section 6.0, which is contained in the Fire Protection Program Report as described in the Final Safety Analysis Report, Section 9.6.1.2, requires in part, that the Quality Assurance Program described in CPC-2A, "Quality Program Description for Operational Nuclear Power Plants," will be applied to fire protection activities associated with Q-listed structures, systems, and components for corrective action.

Consumers Power Company Quality Assurance Topical Report CPC-2A, "Quality Program Description for Operational Nuclear Power Plants," Revision 15, requires in part, that conditions adverse to quality of structures, systems, components, or activities are identified promptly and corrected as soon as practical. For significant conditions adverse to quality, the cause of the condition is to be determined and corrective action taken to preclude repetition.

10 CFR Part 50, Appendix R, Section III.G.2, requires in part, that for cables or equipment of redundant trains of systems necessary to achieve and maintain hot shutdown conditions which are located within the same fire area outside of primary containment, one of the following means of ensuring that one of the redundant trains is free of fire damage shall be provided: (a) separation of cables and equipment and associated non-safety circuits of redundant trains by a fire barrier having a three hour rating; (b) separation of cables and equipment and associated non-safety circuits of redundant trains by a horizontal distance of more than 20 feet with no intervening combustible or fire hazards; and, fire detectors and an automatic fire suppression system shall be installed in the fire area; or (c) enclosure of cables and equipment and associated non-safety circuits of one redundant train in a fire barrier having a one-hour fire rating; and fire detectors and an automatic fire suppression system shall be installed in the fire area.

10 CFR Part 50, Appendix R, Section III.G.3, requires in part, that alternative or dedicated shutdown capability be provided where the protection of systems whose function is required for hot shutdown does not satisfy the requirements of Section III.G.2.

10 CFR Part 50, Appendix R, Section III.J, requires emergency lighting units with at least an eight-hour battery power supply shall be provided in all areas needed for operation of safe shutdown equipment and in access and egress routes thereto.

10 CFR Part 50, Appendix R, Section III.L.1, requires in part, that alternative or dedicated shutdown capability provided for a specific fire area shall be able to (a) achieve and maintain subcritical reactivity conditions in the reactor; (b) maintain reactor coolant inventory; (c) achieve and maintain hot standby conditions; (d) achieve cold shutdown conditions within 72 hours; and (e) maintain cold shutdown conditions thereafter.

10 CFR Part 50, Appendix R, Section III.L.5, requires in part, that equipment and systems comprising the means to achieve and maintain cold shutdown conditions shall not be damaged by fire; or the fire damage to such equipment and systems shall be limited so that the systems can be made operable and cold shutdown can be achieved within 72 hours. Materials for such repairs shall be readily available on site and procedures shall be in effect to implement such repairs.

10 CFR Part 50, Appendix R, Section III.L.7, requires in part, that safe shutdown equipment and systems for each fire area shall be known to be isolated from associated non-safety circuits in the fire area so that hot shorts, open circuits, or shorts to ground in the associated circuits will not prevent operation of the safe shutdown equipment.

Contrary to the above, the licensee failed to promptly correct significant conditions adverse to quality for Q-listed fire protection systems and equipment, as evidenced by the following examples:

A. From November 3, 1995, through April 29, 1996, the licensee failed to implement timely and effective corrective actions for previous NRC and licensee-identified noncompliances with the requirements of 10 CFR Part 50, Appendix R, in that, the facility's alternate shutdown emergency AC power source, Diesel Generator 1-1, was not properly isolated from associated circuits. Specifically, the Diesel Generator 1-1 potential transformer circuit primary and secondary fuses were not properly coordinated which could have caused the loss of automatic and manual voltage control and rendered Diesel Generator 1-1 inoperable. Although this deficiency was identified on November 3, 1995, the licensee failed to provide adequate guidance to the operators which would have enabled them to promptly identify this condition and to take the necessary actions to recover the diesel generator and mitigate the consequences of this event.

B. From July 28, 1995, through March 27, 1996, the licensee failed to implement timely and effective corrective actions for previous NRC and licensee identified noncompliances with the requirements of 10 CFR Part 50, Appendix R. Specifically, procedures did not exist to conduct cold shutdown repairs to restore a low pressure safety injection pump following a fire in the east engineered safeguards room, Fire Area 10, or in the 590' corridor auxiliary building, Fire Area 13. The licensee's corrective actions, which were completed on December 1, 1995, consisting of proceduralizing the necessary repairs to allow local manual operation of the breaker were not adequate to isolate a fire induced fault and to allow local manual operation of a low pressure safety injection pump to permit cold shutdown of the facility.

C. From February 28, 1992, through April 29, 1996, the licensee failed to implement timely and effective corrective actions for safe shutdown motor-operated valve circuits, which could have been affected by fire induced hot shorts as described in NRC Information Notice (IN) 92-18, "Potential for Loss of Remote Shutdown Capability During a Control Room Fire." Specifically, in response to this IN, the licensee had performed three different safety evaluations which were not adequate to identify which motor-operated valves were susceptible to damage by this failure mechanism. In addition, since the most recent evaluation completed on December 19, 1995, no specific guidance was provided to the operators to enable them to quickly identify this condition and take appropriate actions to mitigate the consequences of this event.

D. From July 14, 1995, through April 29, 1996, the licensee failed to implement timely and effective corrective actions for previous NRC and licensee identified noncompliances with the requirements of 10 CFR Part 50, Appendix R. Specifically, on July 14, 1995, the licensee determined that Emergency Diesel Generator 1-2 power and control circuits were not adequately separated. The licensee's corrective action for this condition, an analysis to determine an effective rating for the barrier between the redundant trains, EA-FPP-95-047, "Analysis of the Effects of a Fire on the Barriers Between Diesel Generator Room 1-1 and the East Air Plenum Room," dated November 14, 1995, which concluded the configuration was acceptable, was not adequate, in that: (1) the analysis did not consider all possible failure modes for an operating diesel or operating modes of the diesel room ventilation system; (2) the analysis did not evaluate the potential impact of degraded or inoperable suppression systems; and (3) the methodology utilized to evaluate the fire severity was not conservative.

E. From September 27, 1995, through April 29, 1996, the licensee failed to implement timely and effective corrective action for the improper setting of the Alternate Shutdown Panel Inverter low voltage cut-off setpoint. Specifically, the safety significance of this setpoint was not recognized; the condition report initiated due to the inverter failure was not comprehensive which resulted in a cursory evaluation of the condition and a failure to recognize the safety significance and reportability of the deficiency; and the adjustment of this setpoint was performed without an engineering evaluation or the use of any setpoint methodology.

F. From February 2, 1996, through April 29, 1996, the licensee failed to implement timely and effective corrective actions for previous NRC and licensee identified noncompliances with the requirements of 10 CFR 50, Appendix R. Specifically, the main supply fuses for the 125 Volt D.C. panels, ED-11-1 and ED-21-1, were not properly coordinated with the branch circuit breakers. This condition was identified on February 2, 1996, but effective corrective action had not been taken to correct this deficiency as of April 29, 1996.

G. From November 14, 1986, through April 29, 1996, the licensee failed to implement timely and effective corrective actions for emergency lighting deficiencies identified by the NRC during an Appendix R inspection completed in September 1986, and during a follow-up inspection completed in June 1988. Specifically, as of April 29, 1996, adequate emergency lighting had not been provided for the necessary illumination of: (1) Panel ED-21-2 in the cable spreading room and (2) the condenser air ejection pump in the west mezzanine of the turbine building. (01013)

This is a Severity Level III violation (Supplement I).
Civil Penalty - $50,000.

Pursuant to the provisions of 10 CFR 2.201, Consumers Power Company (Licensee) is hereby required to submit a written statement or explanation to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, within 30 days of the date of this Notice of Violation and Proposed Imposition of Civil Penalty (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each alleged violation: (1) admission or denial of the alleged violation, (2) the reasons for the violation if admitted, and if denied, the reasons why, (3) the corrective steps that have been taken and the results achieved, (4) the corrective steps that will be taken to avoid further violations, and (5) the date when full compliance will be achieved.

If an adequate reply is not received within the time specified in this Notice, an order or a Demand for Information may be issued as to why the license should not be modified, suspended, or revoked or why such other action as may be proper should not be taken. Consideration may be given to extending the response time for good cause shown. Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.

Within the same time as provided for the response required above under 10 CFR 2.201, the Licensee may pay the civil penalty by letter addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, with a check, draft, money order, or electronic transfer payable to the Treasurer of the United States in the amount of the civil penalty proposed above, or may protest imposition of the civil penalty in whole or in part, by a written answer addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission. Should the Licensee fail to answer within the time specified, an order imposing the civil penalty will be issued. Should the Licensee elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalty, in whole or in part, such answer should be clearly marked as an "Answer to a Notice of Violation" and may: (1) deny the violation listed in this Notice, in whole or in part, (2) demonstrate extenuating circumstances, (3) show error in this Notice, or (4) show other reasons why the penalty should not be imposed. In addition to protesting the civil penalty in whole or in part, such answer may request remission or mitigation of the penalty.

In requesting mitigation of the proposed penalty, the factors addressed in Section VI.B.2 of the Enforcement Policy should be addressed. Any written answer in accordance with 10 CFR 2.205 should be set forth separately from the statement or explanation in reply pursuant to 10 CFR 2.201, but may incorporate parts of the 10 CFR 2.201 reply by specific reference (e.g., citing page and paragraph numbers) to avoid repetition. The attention of the Licensee is directed to the other provisions of 10 CFR 2.205, regarding the procedure for imposing a civil penalty.

Upon failure to pay any civil penalty due which subsequently has been determined in accordance with the applicable provisions of 10 CFR 2.205, this matter may be referred to the Attorney General, and the penalty, unless compromised, remitted, or mitigated, may be collected by civil action pursuant to Section 234c of the Act, 42 U.S.C. 2282c.

The response noted above (Reply to Notice of Violation, letter with payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: James Lieberman, Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738, with a copy to the Regional Administrator, U.S. Nuclear Regulatory Commission, Region III, and a copy to the NRC Resident Inspector at the facility that is the subject of this Notice.

Because your response will be placed in the NRC Public Document Room (PDR), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction. However, if you find it necessary to include such information, you should clearly indicate the specific information that you desire not to be placed in the PDR, and provide the legal basis to support your request for withholding the information from the public.

Dated at Lisle, Illinois,
this 13th day of August 1996

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¹ A Severity Level III problem (identified in October 1994) and $25,000 civil penalty was issued on December 13, 1994 (EA 94-222); and a Severity Level III problem (identified in August 1995) was issued on September 29, 1995 (EA 95-169).