Morning Report for August 31, 2001

                       Headquarters Daily Report

                         AUGUST 31, 2001

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                    REPORT             NEGATIVE            NO INPUT
                    ATTACHED           INPUT RECEIVED      RECEIVED

HEADQUARTERS
REGION I
REGION II                              X
REGION III                             X
REGION IV
PRIORITY ATTENTION REQUIRED  MORNING REPORT - REGION II  AUGUST 31, 2001

Licensee/Facility:                     Notification:

Virginia Power Co.                     MR Number: 2-01-0016
Surry 1 2                              Date: 08/31/01
Surry,Virginia
Dockets: 50-280,50-281
PWR/W-3-LP,PWR/W-3-LP

Tennessee Valley Authority
Sequoyah 1 2
Soddy-Daisy,Tennessee
Dockets: 50-327,50-328
PWR/W-4-LP,PWR/W-4-LP

Subject: DEGRADED BEARING SURFACES IN GM/EMD EMERGENCY DIESEL GENERATORS

Discussion:

Degradation was found in the piston bearing inserts and piston pin
surfaces of the #3 and #1 emergency diesel generators (EDGs) at the Surry
Nuclear Power Station and the 2B-B EDG at the Sequoyah Nuclear Power
Station during April, July, and August 2001, respectively. Both plants
employ General Motors/Electromotive Division (GM/EMD) diesels and both
licensees identified the degraded surfaces after inspections to followup
on elevated concentrations of silver (Ag) in the lubricating oil.

The piston bearing inserts on EMD diesels are plated with Ag, so an
increasing concentration of Ag in the lube oil is an indicator of
excessive wear. The damaged components were found on two diesel engines
even though the Ag concentrations were not above the vendor recommended
action level. At lube oil Ag concentrations above 2.0 parts per million
(ppm), the vendor (EMD) recommends additional analysis of the lube oil,
and internal component inspections to identify and correct the degraded
conditions. The action level is based upon expected even wear patterns in
all cylinders. These findings indicate the potential that the action
level for elevated Ag concentration in the lube oil may not be
appropriate.

In April, after lube oil sample results showed Ag concentrations above
the action level, Surry found that 7 of 20 piston bearings exhibited
significant damage such that the engine would not have been capable of
performing its intended function if called upon. The licensee found the
damage by physically inspecting the piston pins for signs of distress.
Also, they identified heavy debris in the strainers and at the bottom of
the oil pan. (LER 50-280, 281/2001-01)

Inspections were also conducted of the #1 EDG at Surry in July, and of
the # 2B-B EDG at Sequoyah in August, due to increasing Ag concentrations
in the lube oil. The Ag concentration at Surry was approximately 1.2 ppm
and at Sequoyah approximately 1.5 ppm. One piston bearing in each of
these diesels exhibited damage which could have challenged the ability of
the EDGs to run for a prolonged period of time. Sequoyah has also
observed that the 1A-A EDG had 0 ppm Ag until 8/01/2001, when the Ag
concentration increased to a reported value of 1.0 ppm. The 1A-A EDG was
placed out of service for inspection.

The degraded components have been replaced and the EDGs returned to

REGION II  MORNING REPORT     PAGE  2          AUGUST 31, 2001
MR Number: 2-01-0016 (cont.)

operable status at both Surry and Sequoyah, with the exception of 1A-A
EDG at Sequoyah which remains out of service for inspection. The other
EMD diesels at Region II nuclear power plants have been verified to have
Ag concentrations less than 1.0 ppm with no observed upward trend.

Regional Action:

Follow licensee actions and obtain sufficient information to support
development of generic commmunication.

For information only.

Contact:  Kerry Landis               (404)562-4530
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REGION III  MORNING REPORT     PAGE  2          AUGUST 31, 2001

Licensee/Facility:                     Notification:

United States Enrichment Corporation   MR Number: 3-01-0028
Paducah Gaseous Diffusion Plant        Date: 08/30/01
Paducah,Kentucky                       Resident Inspectors Office
Dockets: 07007001

Subject: PAPER, ALLIED-INDUSTRIAL, CHEMICAL AND ENERGY UNION LOCAL 5-550
         AND USEC AGREE TO TEMPORARY CONTRACT EXTENSION


Discussion:

On July 31, 2001 the union contract between the Paper, Allied-Industrial,
Chemical and Energy (PACE) Union Local 5-550 and the United States
Enrichment Corporation (USEC) expired. The PACE Union represents about
700 union workers at the Paducah Gaseous Diffusion Plant. Since
expiration of the contract, union workers have continued to work based on
a day-to-day contract extension agreement.

On the evening of August 29, 2001, the PACE Union and USEC reached a
seven-point pact agreement to extend the original contract until November
15, 2001. In the contract extension agreement, the PACE Union committed
not to strike through November 15, 2001, and USEC committed not to lay
off any hourly employees through November 15, 2001.

Since the original contract was extended, subject to some specific
caveats, for a finite period of time, the union members were not required
to ratify the extension agreement. However, when a new contract
settlement agreement is reached between USEC and the PACE Union, the
contract settlement agreement is required to be ratified by the union
members.

Regional Action:

None

Contact:  Robert G. Krsek            (270)442-7118
          Patrick L. Hiland          (630)829-9603
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