EA-97-218 - Power Resources, Inc.

July 29, 1997

EA 97-218

Crew Schmitt, President
Power Resources, Inc.
1560 Broadway, Suite 1470
Denver, Colorado 80202

(NRC Inspection Report No. 40-8857/97-01)

Dear Mr. Schmitt:

This refers to the July 22, 1997, predecisional enforcement conference that was held at the NRC's Region IV office in Arlington, Texas. The conference was held to discuss several apparent violations which were identified during a routine inspection conducted on March 10-13 at your Highland Uranium Project site in Converse County, Wyoming, and during the subsequent in-office inspection activities which followed. The results of the inspection were discussed with your staff during a telephonic exit briefing on June 17, 1997, and were documented in the subject inspection report on July 3, 1997.

Based on the information developed during the inspection and the information that you provided during the conference, the NRC has determined that violations of NRC requirements occurred. These violations are cited in the enclosed Notice of Violation (Notice), and the circumstances surrounding them are described in detail in the subject inspection report. The violations included: (1) a failure to adequately monitor occupational exposure to radon progeny; (2) the failure to post areas as airborne radioactivity areas; (3) the failure to establish any environmental monitoring procedures as required by the license; (4) the failure to report the results of two water samples to the NRC in the semiannual effluent reports for 1996; (5) the failure to provide the NRC with accurate and complete semiannual environmental and effluent monitoring reports; and (6) the failure to submit an annual update to your surety amount within the designated time frame as specified by License Condition 9.5.

The circumstances surrounding several of the violations indicate a lack of management oversight and attention to detail in both your radiation protection and environmental programs. This is of particular concern because your performance-based license delegated to you substantial regulatory authority and was issued to you with the expectation that you would conduct your activities with sufficient management oversight and effective internal audits to identify and correct potential NRC violations. Indications of a lack of management oversight included: (1) the fact that these violations were identified by NRC inspectors and should have been identified by PRI or its audit program; (2) the violation involving the failure to establish environmental monitoring procedures should have been prevented by your corrective actions for a previous similar violation identified during our inspection in May 1996 (refer to PRI's response to Violation A in the letter dated July 10, 1996); (3) numerous mistakes in semiannual effluent reports; and (4) a failure to comply with a requirement in the license related to updating the surety. Therefore, these violations are classified in the aggregate in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600, as a Severity Level III problem.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $5,500 is considered for a Severity Level III problem. Because your facility has not been the subject of escalated enforcement actions within the last 2 years, the NRC considered whether credit was warranted for Corrective Action in accordance with the civil penalty assessment process in Section VI.B.2 of the Enforcement Policy. In evaluating your overall corrective actions, we concluded that Power Resources, Inc. (PRI), is deserving of credit. Although there was some concern with your staff's delays in determining the worker doses from the high radon levels after NRC identified the issue, our decision was based on the significant management changes brought about by the purchase of PRI. Specifically, a new president/CEO had been named, and the board of directors had authorized new positions for a vice president of operations, a director of environment who would report to the new president/CEO, and environmental scientists. Further, additional internal audits were committed to be performed by the new parent corporation, Cameco.

Therefore, to encourage comprehensive correction of violations, and in recognition of the absence of previous escalated enforcement action, I have been authorized not to propose a civil penalty in this case. However, significant violations in the future could result in a civil penalty.

During the conference, we also discussed one additional apparent violation involving the use of process or engineering controls to control the concentrations of radioactive material in air. However, at the conference you presented new information that showed engineering controls were used to the extent practical. This information is documented in your letter dated July 24, 1997. As a result of the new information, the NRC has determined that a violation did not exist, and this issue is not cited in the attached Notice.

You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with 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).

Sincerely, Ellis W. Merschoff
Regional Administrator

Docket No. 040-8857
License No. SUA-1511

Enclosure: Notice of Violation

cc w/Enclosure:
Wyoming Radiation Control Program Director

Mr. Paul R. Hildenbrand, Manager
Environmental and Regulatory Affairs
Power Resources, Inc.
800 Werner Court, Suite 230
Casper, Wyoming 82601

Mr. William F. Kearney
Environmental Superintendent
Power Resources, Inc.
P.O. Box 1210
Glenrock, Wyoming 82637

Mr. David Finley, Operations Chief
Solid and Hazardous Waste Division
Department of Environmental Quality
122 W. 25th Street
Cheyenne, Wyoming 82002

Land Quality Division
Wyoming Department of Environmental Quality
122 W. 25th Street
Cheyenne, Wyoming 82002

Mr. Pat Mackin, Assistant Director
Systems Engineering & Integration
Center for Nuclear Waste Regulatory Analyses
6220 Culebra Road
San Antonio, Texas 78238-5166


Power Resources, Inc.
Denver, Colorado
Docket No. 40-8857
License No. SUA-1511
EA 97-218

During an NRC inspection conducted on March 10 through June 17, 1997, violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the violations are listed below:

A. 10 CFR 20.1501 requires that each licensee make or cause to be made surveys that may be necessary for the licensee to comply with the regulations in 10 CFR Part 20 and that are reasonable under the circumstances to evaluate the extent of radiation levels, concentrations or quantities of radioactive materials, and the potential radiological hazards that could be present.

Pursuant to 10 CFR 20.1003, survey means an evaluation of the radiological conditions and potential hazards incident to the production, use, transfer, release, disposal, or presence of radioactive material or other sources of radiation.

Contrary to the above, the licensee did not make surveys to assure compliance with 10 CFR 20.1502, which states, in part, that each licensee shall monitor exposures to radioactive material at levels sufficient to demonstrate compliance with the occupational dose limits of 10 CFR Part 20. Specifically, the licensee did not monitor for occupational exposure to radioactive material on several occasions in the satellite buildings, even though air samples obtained between October 1996 and February 1997, indicated airborne radioactivity concentrations were in excess of the radon-222 progeny derived air concentration (DAC) specified in 10 CFR Part 20, Appendix B.

B. 10 CFR 20.1902(d) requires that the licensee post each airborne radioactivity area with a conspicuous sign or signs bearing the radiation symbol and the words "CAUTION, AIRBORNE RADIOACTIVITY AREA" or "DANGER, AIRBORNE RADIOACTIVITY AREA." Airborne radioactivity area is defined as a room, enclosure, or area in which airborne radioactive materials, composed wholly or partly of licensed materials exist in concentrations (1) in excess of the derived air concentrations specified in 10 CFR Part 20, Appendix B, or (2) to such a degree that an individual present in the area without respiratory protective equipment could exceed, during the hours an individual is present in a week, an intake of 0.6 percent of the annual limit on intake (ALI) or 12 DAC-hours.

Contrary to the above, during the period November 5-13, 1996, the Satellite 2 building was not posted with a conspicuous sign or signs bearing the radiation symbol and the words "CAUTION, AIRBORNE RADIOACTIVITY AREA" or "DANGER, AIRBORNE RADIOACTIVITY AREA." During that interval airborne radon progeny existed in concentrations where individuals present without respiratory protective equipment could have or did exceed, during the hours the individuals were present in that week, an intake of 12 DAC-hours. Specifically, licensee estimates of exposures for individuals working in the Satellite 2 building for the period of November 5-13, 1996, ranged from 12 to 152 DAC-hours. Additionally, radon progeny concentrations were measured by the licensee and found to be above the DAC on numerous occasions between October 1996 and February 1997.

C. License Condition 9.8 states that written standard operating procedures shall be established for non-operational activities described in the Operations Plan and Reclamation Plan of the approved license application dated July 28, 1995, including in-plant and environmental monitoring, bioassay analysis, and instrument calibration.

Contrary to the above, at the time of the inspection the licensee had not established any written standard operating procedures for the environmental monitoring activities.

D. 10 CFR 40.9 requires, in part, that information provided to the Commission by a licensee be complete and accurate in all material respects.

Contrary to the above, the licensee did not provide to the Commission information that was complete and accurate in all material respects. Specifically, the two semi-annual environmental and effluent monitoring reports for 1996, submitted to the NRC on August 29, 1996, and February 26, 1997, were determined to contain an excessive amount of inaccurate information. For example, the lower limit of detection (LLD) values listed in the reports for radon-222 was not consistent with the LLD used and reported by the laboratory performing the sampling. Also, an environmental monitoring water sample for a pond that was frozen during the monitoring period was reported, although it was actually the sample result from a previous report. Additionally, an error was found in the licensee's determination of the annual dose to the members of the public that was enclosed as Table 12 to the semi-annual report for the second half of 1996.

E. License Condition 12.2 states that the results of effluent and environmental monitoring shall be reported to the NRC in accordance with 10 CFR 40.65.

Contrary to the above, the licensee obtained two samples from Shallow Well No. 2 during 1996 as required by the license but failed to include these sample results in either of the two semi-annual effluent reports submitted to the NRC for 1996.

F. License Condition No. 9.5 requires, in part, that annual updates to the surety amount be provided to the NRC at least three months prior to June 30 of each year. Along with each annual update, License Condition No. 9.5 also requires the submittal of supporting documentation showing a breakdown of the costs and the basis for the cost estimates with adjustments for inflation, maintenance of a minimum 15 percent contingency, changes in engineering plans, activities performed, and any other conditions affecting estimated costs for site closure.

Contrary to the above, the licensee failed to submit an annual update to the surety amount for 1997-1998 at least three months prior to June 30, 1997, and failed to submit any supporting documentation. Specifically, as of the July 1997, the NRC has not received the annual update to the surety amount for 1997-1998, which was due by March 1997.

This is a Severity Level III problem (Supplement VI).

Pursuant to the provisions of 10 CFR 2.201, Power Resources, Inc., is hereby required to submit a written statement or explanation to the U.S. Nuclear Regulatory Commission, ATTN: Document Control Desk, Washington, D.C. 20555, with a copy to the Regional Administrator, Region IV, within 30 days of the date of the letter transmitting this Notice of Violation (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each violation: (1) the reason for the violation, or, if contested, the basis for disputing the violation, (2) the corrective steps that have been taken and the results achieved, (3) the corrective steps that will be taken to avoid further violations, and (4) the date when full compliance will be achieved. Your response may reference or include previous docketed correspondence, if the correspondence adequately addresses the required response. 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. Where good cause is shown, consideration will be given to extending the response time.

Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.

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. If personal privacy or proprietary information is necessary to provide an acceptable response, then please provide a bracketed copy of your response that identifies the information that should be protected and a redacted copy of your response that deletes such information. If you request withholding of such material, you must specifically identify the portions of your response that you seek to have withheld and provide in detail the bases for your claim of withholding (e.g., explain why the disclosure of information will create an unwarranted invasion of personal privacy or provide the information required by 10 CFR 2.790(b) to support a request for withholding confidential commercial or financial information). If safeguards information is necessary to provide an acceptable response, please provide the level of protection described in 10 CFR 73.21.

Dated at Arlington, Texas,
this 29th day of July 1997

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