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Cost Beneficial Licensing Actions
UNITED STATED NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR REACTOR REGULATION WASHINGTON, D.C. 20555-0001 February 23, 1995 NRC ADMINISTRATIVE LETTER 95-02: COST BENEFICIAL LICENSING ACTIONS Addressees All holders of operating licenses or construction permits for nuclear power reactors. Purpose The U.S. Nuclear Regulatory Commission (NRC) is issuing this administrative letter to inform addressees about the cost beneficial licensing action (CBLA) program. The CBLA program provides a more expeditious review and increased NRC management attention for licensee requests that seek to modify or delete requirements that have a small effect on safety and are costly to implement. Participation in the CBLA program is voluntary. This administrative letter does not transmit or imply any new or changed requirements or staff positions. No specific action or written response is required. Background In April 1993, a CBLA Task Force was formed to study how CBLAs are handled and what changes should be made to the Office of Nuclear Reactor Regulation (NRR) review process to improve the timeliness and efficiency of reviews of licensing issues. Placing additional emphasis on processing CBLAs has the potential to improve safety by allowing licensees to shift resources from activities that have a small effect on safety to those that more significantly enhance safety. In December 1993, the task force issued its report, which included many recommendations for both the industry and the staff. Implementation of staff recommendations is ongoing. The task force found that CBLAs are not new and that over the years many licensee requests seek to modify or delete requirements that have a small effect on safety and are costly to implement. However, before June 1993 the NRR priority ranking system assigned the lowest priority (priority 4) to many licensing submittals addressing items that affected safety an incrementally small amount without consideration of the licensee cost of implementation or restriction of operational flexibility. Although the CBLA task force determined that some priority 4 actions were being completed, licensees may have been discouraged from submitting these types of requests because of the low review priority they would receive. CBLAs in the revised priority ranking system described in the referenced June 6, 1993, memorandum from Dr. Thomas E. Murley, then Director, NRR were to be ranked priority 3 to ensure they were reviewed before priority 4 work items. Dr. Murley gave the NRR staff initial guidance on CBLAs and acknowledged that although the direct 9502160349. AL 95-02 February 23, 1995 Page 2 of 5 safety significance of CBLA issues was low, the staff should review the technical merits of any licensee proposal. As discussed in this administrative letter, the priority ranking of CBLAs will be further increased within the current priority 3 ranking, so that a CBLA will normally be worked before other priority 3 licensing actions. Discussion Even though many of the actions licensees request may be CBLAs in the broad sense, requested actions that affect safety by an incrementally small amount and are costly to implement or restrict operational flexibility should nevertheless receive a timely review. The staff has expanded the guidance in Reference 1 and is training both headquarters and regional staff on the definition and treatment of CBLAs. Attachment 1 is a list of questions raised during public meetings and staff training sessions, the answers to which contain further guidance. The staff will consider a licensing action to be a CBLA if it meets all of the following: 1. The licensee requests in writing that the licensing action be considered a CBLA. If a licensee chooses not to identify an action as a CBLA, the request will be ranked based solely on its safety significance and may be ranked priority 4. 2. The submittal is of high quality and establishes a sufficient basis to support an initial determination that the licensing action has a small effect on safety and will not require the staff to request additional information to make a safety judgement. Therefore, CBLAs will normally not require an extensive NRC technical review. Licensing actions for which CBLA consideration is requested that are not high quality submittals will be ranked as priority 4 until supplemented by the licensee. 3. The action normally would not be ranked priority 1 or 2. 4. The requested action is expected to save the licensee at least $100,000 in operating and maintenance (O&M) costs or capital expenses over the remaining life of the plant, not including replacement power costs. The submittal should include an estimate of the expected cost savings over the remaining plant life. As discussed in item 1 above, if a licensee chooses not to include cost information, the staff may consider the request priority 4 and will not consider it a CBLA. Most licensees routinely prepare this type of cost information as part of their internal cost/benefit analysis. The request to include a summary of this information in the submittal should not place any additional burden on licensees. No recordkeeping requirements are associated with this request. 5. The requested action should be plant-specific. However, a topical report will be treated as a CBLA if it meets the criteria contained herein and if two or more licensees submit documentation with the . AL 95-02 February 23, 1995 Page 3 of 5 topical report stating that they will reference the topical report and provide cost data demonstrating that the cost saving to each licensee is consistent with the guidelines in Item 4, above. Further guidance regarding the submittal of topical reports is contained in NUREG-0390, "Topical Report Review Status." 6. Submittals should be items which require NRC review and approval (not a 10 CFR 50.59 review or a change to a commitment that does not require NRC review and approval), and should have a current application not contingent on future circumstances. A request that a licensing action be considered a CBLA is strictly voluntary. Once a licensee submittal is designated a CBLA, the staff will evaluate it as it would any other licensee submittal. The submittal will be evaluated on its technical merits, and safety will continue to be the overriding concern in any staff determinations. CBLAs will not receive automatic staff approval. However, CBLAs will be categorized as priority 3 and will be normally acted on by the staff before other priority 3 licensing actions. To assist in developing the CBLA policy and tracking CBLAs, members of the staff have been dedicated to serve on a CBLA group for a limited time. The Regulatory Review Group (RRG)/CBLA group, led by Eugene V. Imbro, does not replace the normal process for reviewing and approving licensee requests. The RRG/CBLA group will give general CBLA policy guidance to NRC and licensee staffs, will track and trend CBLA submittal and approval data, and will work with the staff and industry to identify CBLAs for possible inclusion in the Standard Technical Specifications or for consideration as line item improvements to technical specifications. The RRG/CBLA group will also focus management attention on implementing the CBLA process within the staff. The NRC licensing project manager will remain the primary point of contact for all licensing actions including CBLAs. However, licensees should contact Mr. Imbro if they have questions on staff implementation of the CBLA program. The CBLA task force developed early estimates of submittals of CBLAs and found that 300 to 400 more requests could be expected each year. However, the staff has not yet found a significant increase in the number of licensing actions received that have been designated by licensees as CBLAs, although the number has increased slightly. The RRG/CBLA group will monitor the CBLA submittal and approval trends and, if backlogs warrant, will review the program and make adjustments as necessary. The Technical Specification Improvement program is similar to the CBLA program in that both can substantially reduce unnecessary regulatory burden. The conversion to the improved Standard Technical Specifications can save licensee financial and staff resources by relocating 30 to 40 percent of existing license requirements to licensee controlled documents. Licensees should note that conversion to the improved Standard Technical Specifications will receive higher priority than CBLAs and that such conversions may encompass a considerable number of potential CBLAs. While the benefits of converting to the new technical specifications are hard to quantify, licensee owners groups. AL 95-02 February 23, 1995 Page 4 of 5 project annual savings of between $150,000 and $1.13 million per site from the program. In total, licensees for about 40 units are currently pursuing conversion to the new technical specifications. Like the CBLA program, participation in the Technical Specification Improvement program is voluntary. The staff plans to hold a public workshop in the spring, 1995, to discuss the CBLA program with the industry. Details of the meeting will be forthcoming. Voluntary Response Requested The NRC requests that addressees include the following information with the licensing action submittal if they want the action requested in the submittal to be considered a CBLA: 1. A written request that the licensing action be considered a CBLA 2. Cost savings information--the amount saved (exclusive of the cost of replacement power) through the reduction in regulatory burden over the remaining plant life that would result from implementing the requested licensing action Paperwork Reduction Act Statement The requests herein for voluntary submittal of information are covered by the Office of Management and Budget, clearance number 3150-0011, which expires July 31, 1995. The public reporting burden for this voluntary collection of information is estimated to average 5 hours for each response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this voluntary collection of information, including suggestions for reducing this burden, to the Information and Records Management Branch T6 F33, U.S. Nuclear Regulatory Commission, Washington, D.C. 20555-0001 and to the Desk Officer, Office of Information and Regulatory Affairs, NEOB-3019, (3150-0011), Office of Management and Budget, Washington, D.C. 20503. . AL 95-02 February 23, 1995 Page 5 of 5 This administrative letter requires no specific action or written response. If you have any questions about this letter, please contact the person listed below or the appropriate Office of Nuclear Reactor Regulation (NRR) project manager. /S/'D BY E.V. IMBRO Eugene V. Imbro, Director Regulatory Review Group/ Cost Beneficial Licensing Actions Programs Office of Nuclear Reactor Regulation Contact: Eric J. Leeds, NRR (301) 415-1133 Reference: 1. Memorandum from Dr. Thomas E. Murley, Director, Office of Nuclear Reactor Regulation, to NRR Staff, "Priority Determination for NRR Review Efforts," June 6, 1993 Attachments: 1. Questions and Answers 2. List of Recently Issued NRC Administrative Letters . Attachment 1 AL 95-02 February 23, 1995 Page 1 of 7 QUESTIONS AND ANSWERS 1. Question: How long are the CBLA program and the RRG/CBLA Group going to be in existence? Should licensees submit CBLAs now before the program is withdrawn? Answer: For many years, licensees have submitted licensing actions for NRC approval that were primarily cost beneficial. The licensees sought relief from regulatory requirements and commitments that benefit safety an incrementally small amount but are costly to implement. The term CBLA is new and refers to NRC's recent increased emphasis on reviewing such requests by (1) assigning a higher review priority for CBLAs and (2) training the staff to be more receptive to CBLAs. Although NRC has not stated an end date for the CBLA program, the RRG/CBLA group, which monitors the program for effectiveness and modification as necessary, will likely disband by the fall of 1996. The actual date will depend on when the questions related to CBLAs (such as those in this enclosure) have been adequately addressed, and when NRC responsiveness to CBLAs no longer necessitates special oversight. The staff will institutionalize the CBLA program so that it is fully integrated into the NRR review and prioritization process for licensing actions. 2. Question: What types of actions are included in the CBLA program? Answer: The staff will assign CBLA status to requests for licensing actions such as license amendments, exemptions to regulations, or relief from provisions of the ASME Code pursuant to 10 CFR 50.55a, that are considered priority 3 or 4, meet the CBLA criteria, and have been requested by the licensee to be considered as CBLAs. Licensing actions are those requests that require NRC review and approval before implementation. Licensing actions do not include changes to commitments which the licensee can make without prior NRC approval as specified by 10 CFR 50.54 and 10 CFR 50.59. An item assigned priority 1 or 2 will not be considered for inclusion in the CBLA program. 3. Question: What are the advantages of requesting the staff to consider a licensing action a CBLA? Answer: The NRC staff and managers will give increased attention to licensing actions that are requested to be CBLAs and that meet the CBLA criteria. The RRG/CBLA group will oversee the progress and staff resolution of CBLAs and will ensure that CBLAs are reviewed before other priority 3 or priority 4 licensing action work. A licensing action that would normally be ranked as priority 4 ("Items That Can Be Deferred") by the staff would be acted on before other priority 3 licensing actions, if it meets the CBLA criteria. . Attachment 1 AL 95-02 February 23, 1995 Page 2 of 7 4. Question: Are there any disadvantages to participating in the CBLA program? Answer: The staff is not aware of any disadvantages to participating in the CBLA program. The NRC created the CBLA program to respond to requests by licensees to act expeditiously on licensing actions that have incrementally small effects on safety and whose primary purpose is to reduce unnecessary regulatory burden. Licensees participating in the CBLA program will benefit by obtaining staff review for licensing actions that would normally have been deferred. NRC managers will direct increased attention to all CBLAs to ensure a review in a shorter time than other priority 3 licensing actions. 5. Question: Why have more licensees not taken advantage of the CBLA program? Answer: About one-half of the licensees have submitted CBLAs. Some licensees have stated that the staff has adequately responded to their requests for licensing actions and therefore do not see a need to designate licensing actions as CBLAs. Others expressed concern that licensing actions will get quicker turnaround in the "normal" review process if many CBLAs are submitted and overload the CBLA process. However, this concern is not valid because CBLAs will be acted on before other priority 3 licensing actions. It was also suggested that since the CBLA program is new, some licensees are still developing CBLA programs. 6. Question: Will topical reports be considered part of the CBLA program? Answer: Topical reports will be treated as CBLAs if the issue addressed has an incrementally small effect on safety and two or more licensees submit documentation with the topical report indicating that they will reference the topical report and if they submit cost data demonstrating that the cost saving to each licensee is consistent with CBLA guidelines of $100,000 over the remaining plant life. Further guidance regarding the submittal of topical reports is contained in NUREG-0390, "Topical Report Review Status." 7. Question: What are the functions of the CBLA group? Answer: The CBLA group will (1) give general CBLA policy guidance to NRC and licensee staffs, (2) track and trend CBLA submittal and approval data, (3) work with the staff and industry to identify CBLAs that have generic implications, and (4) facilitate technical resolution of CBLAs as requested by the staff or industry. . Attachment 1 AL 95-02 February 23, 1995 Page 3 of 7 8. Question: Will the status of CBLAs be made available to the public? Answer: The RRG/CBLA staff oversee the CBLA process and semi-annually report the status of the CBLA program to the Executive Director for Operations. This information is available in the public document room. The date of the most recent "Semi-Annual Cost Beneficial Licensing Action Status Report" to the Executive Director for Operations, was December 29, 1994. The status of the CBLA program will also be made available through industry meetings such as owners groups meetings and the Regulatory Information Conference. 9. Question: How is the cost data in a CBLA submittal going to be used by the staff? Answer: The project manager will use the cost data to qualitatively determine whether the estimated cost savings meets the criteria in the CBLA definition. The technical acceptance criteria used by the staff in performing the safety evaluation will be completely independent, and not influenced by the possible cost savings. The cost data will not be used in accepting or rejecting the request, only in making the CBLA determination. If the staff has a question regarding licensee cost data, it will discuss this with the licensee to determine the basis for this data. If new information is identified during those discussions which is relevant to making the decision to treat a licensing action as a CBLA, the licensee should supplement the original submittal on the docket. The CBLA group will use the cost data to track overall industry cost savings as one input to measuring program success. 10. Question: Should licensees include engineering cost savings in the CBLA cost savings criteria? Answer: Yes, licensees should include the cost of all capital expenditures and operating and maintenance costs, except for replacement power. Engineering can be treated as an operating cost for the purpose of the CBLA program. 11. Question: If eliminating or modifying an action would save time in a refueling outage, would the NRC consider the submittal as a CBLA if it met all the CBLA criteria? Answer: NRC would consider the submittal as a CBLA only if the cost savings criteria were met without including the cost of replacement power. . Attachment 1 AL 95-02 February 23, 1995 Page 4 of 7 12. Question: What was the basis for setting the cost savings threshold for CBLAs at $100,000 over the remaining plant life? Answer: After listening to the views of industry, the staff set the cost saving threshold for CBLAs at $100,000 to permit all licensees to meaningfully participate in the program. The staff believes there are a sufficient number of license actions that meet the CBLA criteria and could save licensees significant resources. The staff will reevaluate the criteria if it observes a significant increase or decrease in the number of CBLAs. 13. Question: Can a utility request five unrelated $20,000 items together in one licensee amendment submittal and have it treated as a CBLA (if it meets the other CBLA criteria)? Can a licensee submit five related $20,000 issues and have it treated as a CBLA (if it meets the other CBLA criteria)? Can five licensees submit requests for the same $20,000 licensing action and have it treated as a CBLA? Answer: Unrelated items submitted together are not considered a CBLA. Related items submitted on behalf of one plant, totaling $100,000, can be considered a CBLA if they are instances of the same licensing action requested and can reasonably be addressed in a single safety evaluation report. Requests submitted by five licensees for the same $20,000 licensing action would not be treated as a CBLA because a point of demarcation is needed to distinguish between a CBLA and other priority 3 and priority 4 licensing actions of economic benefit. Otherwise, the number of CBLAs may substantially increase, defeating the purpose of the initiative. (See Question 12 above.) However, carefully chosen generic approaches by licensees can make the review process more efficient. 14. Question: Is there going to be a separate prioritization within CBLAs based on cost? Answer: The staff will not rank the CBLAs based on cost savings (i.e., a $1 million CBLA will not be reviewed before a $100,000 CBLA based only on cost savings). NRC will determine when to review a CBLA in relation to other CBLAs after considering factors including whether the PM or technical staff is doing the review, whether the submittal is in response to a line item improvement (generic letter), and the workload of the technical branch or PM doing the review. If the staff finds a significant backlog of CBLAs, it will reexamine the CBLA criteria and modify them as necessary. Licensees can assist in the process by maintaining a list of the top 10 licensing action submittals and informing the PM of their desired order for review. . Attachment 1 AL 95-02 February 23, 1995 Page 5 of 7 15. Question: What if a licensing action submittal contains the necessary CBLA attributes, but the licensing action is not identified in writing as a CBLA by the licensee? Answer: Identifying a licensing action as a CBLA is strictly voluntary. Some licensees may choose not to identify licensing actions as CBLAs in their submittals. If the licensee does not request the CBLA designation in their submittal, the licensing action will not be prioritized as such. 16. Question: What if a licensee requests the CBLA designation for a submittal that does not meet all the CBLA criteria? Answer: If the submittal does not meet all the CBLA criteria or if the criteria are not addressed in the submittal, it will not be considered a CBLA unless it is adequately supplemented. 17. Question: How will the technical specification line item improvement process interface with the CBLA effort? What is the role of the Technical Specification (TS) Screening Panel? Answer: The NRR TS Screening Panel has been proactively screening requested licensing actions (including CBLAs) for candidates for the Line Item Improvement Program. After identification by the TS Screening Panel as CBLAs that could have generic implications, NRR management will decide which CBLAs to pursue as line item improvements. These items may be discussed with a spectrum of licensees and owners groups to determine industry interest. The staff may choose not to process a CBLA as a line item improvement if industry expresses no interest or if most of the eligible licensees have already submitted or have been granted the action. 18. Question: What is meant by "generic CBLA"? Answer: CBLAs, with the exception of topical reports, are submitted as plant-specific licensing actions. However, a plant-specific CBLA that results in or is submitted in response to a line item improvement (generic letter) is commonly referred to as a "generic CBLA." Topical reports meeting the CBLA criteria may be considered "generic CBLAs" because they are generally applicable to a broad spectrum of plants. . Attachment 1 AL 95-02 February 23, 1995 Page 6 of 7 19. Question: Will the priority of a CBLA change if it applies to a number of plants (generic)? Answer: No, the priority of all CBLAs is 3, with expedited processing, regardless of the number of plants affected by the submittal. 20. Question: Is there a quantitative value, as would be determined through a probabilistic safety assessment, to define "incrementally small safety benefit?" Answer: The staff has not established a quantitative value for determining the threshold for "incrementally small safety benefit" during the review of a CBLA. The staff uses a deterministic basis to conclude that a requested licensing action has a minimal impact on safety, will not require significant NRC technical review, and thus is a CBLA. 21. Question: Does guidance exist on what the staff would consider a "high quality" submittal? Answer: The requirements for written correspondence and license amendments outlined in 10 CFR 50.4 and 50.90 respectively, are the only legal requirements for the contents of a licensee's request to amend their license. The standard review plan gives guidance on staff acceptance criteria. A submittal is of high quality if it establishes a sufficient basis to support an initial determination that the licensing action has a small effect on safety and will not require the staff to request additional information to make a safety judgement. Therefore, CBLAs will normally not require an extensive NRC technical review. Licensing actions for which CBLA consideration is requested that are not high quality submittals will be ranked as priority 4 until supplemented by the licensee. 22. Question: Will requests for relief from specific provisions of the ASME Code be considered as CBLAs if CBLA criteria are met? For example, the Code may require a pump with minor safety significance to be tested monthly, and it may never have failed a test in ten years. If a licensee proposes to change the testing frequency to quarterly, would the NRC consider this request as a CBLA? Answer: Code relief requests affecting continued operation or restart would not be considered CBLAs since these requests are already considered priority 2 for review. However, other relief requests for inservice inspection (ISI) and inservice testing (IST) would be . Attachment 1 AL 95-02 February 23, 1995 Page 7 of 7 considered as CBLAs if the CBLA criteria are met. Topic Area 33 of the NRC Regulatory Review Group Implementation Plan (SECY-94-003) addresses efforts of the Code committees, industry, and NRC to revise ISI and IST requirements based on risk significance. The NRC supports industry efforts to develop and implement risk-based Code requirements. 23. Question: Are 10 CFR 50.54 plan changes considered CBLAs? Answer: Changes to the quality assurance plan under 10 CFR 50.54(a) would not be considered CBLAs. They already have a set priority because 10 CFR 50.54(a)(iv) requires that changes are accepted upon receipt of a letter to this effect or 60 days after submittal to the Commission, whichever occurs first. Changes to the security and emergency plans under 10 CFR 50.54(p) and (q) respectively, do not have this stipulation and could be CBLAs. Many changes to the security and emergency plans are reviewed by the regions. Although the regions do not use the NRR prioritization guidance, the changes to safeguards contingency plan procedures and emergency plan which are designated as CBLAs and are reviewed and approved by the regions would receive increased management and staff attention. Those plan changes reviewed by NRR would already be considered as priority 3 but would, if designated as CBLAs, also receive increased attention by management and the staff, and would be acted on before other priority 3 licensing actions. 24. Question: Should a licensee that already has made submittals to the NRC supplement them if they want them to be considered CBLAs? Answer: The licensee should supplement a submittal if it meets the CBLA criteria and the licensee wishes to accelerate the review schedule. 25. Question: Are requests for a reduction in scope of NRC reviews or inspections considered CBLAs? Answer: The staff established the CBLA program to increase the priority of licensing actions that have an incrementally small effect on safety and are costly to implement. Licensing actions are amendments or modifications a licensee requests to the facility licensing bases that require NRC approval before implementation. Examples of licensing actions include requests for license amendments, exemptions, and ASME Code relief. Requests to reduce the scope of NRC reviews or inspections are not licensing actions and thus are not CBLAs.
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