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
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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 .
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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.
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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.
.
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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
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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. .
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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
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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.
.
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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.
.
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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.
.
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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
.
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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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