United States Nuclear Regulatory Commission - Protecting People and the Environment

Information Relating to Compliance with 10 CFR 50.49, "Environmental Qualification of Electric Equipment Important to Safety for Nuclear Power Plants" (Generic Letter No. 86-15)

                               UNITED STATES  
                           WASHINGTON, D. C. 20555

                             September 22, 1986 




Generic Letters, Bulletins, and Information Notices have been issued to 
provide guidance and clarify the intention of 10 CFR 50.49, "Environmental 
Qualification of Electric Equipment Important to Safety for Nuclear Power 
Plants". Generic Letter 85-15, issued August 6, 1985, provided information 
related to the deadlines for compliance with 10 CFR 50.49 and possible civil
penalties should licensees operate in non-compliance with the rule. The 
purpose of this letter is to provide additional guidelines on appropriate 
licensee actions in situations where environmental qualification of 
equipment is suspect and on current NRC policy with regard to enforcement of 
10 CFR 50.49. 

When a licensee discovers a potential deficiency in the environmental 
qualification of equipment (i.e., a licensee does not have an adequate basis
to establish qualification), the licensee shall make a prompt determination 
of operability, shall take immediate steps to establish a plan with a 
reasonable schedule to correct the deficiency, and shall have written 
justification for continued operation. This justification does not require 
NRC review and approval. 

The licensee may be able to make a finding of operability using analysis and
partial test data to provide reasonable assurance that the equipment will 
perform its safety function when called upon to mitigate the accidents for 
which it is needed. In this connection, it must also be shown that 
subsequent failure of the equipment under accident conditions will not 
result in significant degradation of any safety function or provide 
misleading information to the operator. 

If the licensee is unable to demonstrate operability: 

     A.   For inoperable equipment included in systems covered by plant 
          technical specifications, the licensee shall follow the 
          appropriate action statements. This could require the plant to 
          shut down within a limited period of time (or remain shut down). 

     B.   For inoperable equipment not covered by the plant technical 
          specifications, the licensee may continue reactor operation: 

          1.   If the safety function can be accomplished by other 
               designated equipment that is qualified, or 

          2.   If limited administrative controls can be used to ensure the 
               safety function is performed. 


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The licensee should also evaluate whether the findings are reportable under 
50.72, 50.73, Part 21, the Technical Specifications or any other pertinent 
reporting requirements, particularly if equipment is determined to be 

Enclosed is a copy of enforcement guidance related to Generic Letter 85-15. 

This letter does not require any response and therefore does not need 
approval of the Office of Management and Budget. Comments on burden and 
duplication may be directed to the Office of Management and Budget, Reports 
Management Room 3208, New Executive Office Building, Washington, D.C. 20503.
Should you have any questions, the staff contacts are Gary Holahan for 
technical questions and Jane Axelrad for enforcement questions. Mr. Holahan 
can be reached on (301)492-4410 and Ms. Axelrad can be reached on 


                              Harold R. Denton, Director 
                              Office of Nuclear Reactor Regulation 

As stated 


Application of the "Clearly knew, or should have known" test 

The staff believes it is unlikely that licensees will be identified that 
"clearly knew"" they had equipment for which qualification cannot be 
established. The staff believes from discussions with licensees that all 
licensees who were aware before November 30 that they had equipment for 
which qualification could not be established elected to shut down rather 
than operate in noncompliance under the daily penalty provision. Thus, the 
issue in most cases will be for the staff to determine whether the licensee 
"clearly should have known" that its equipment was not qualified. The staff 
will examine the circumstances in each case to make the determination. The 
factors the staff will examine include: 

     1.   Did the licensee have vendor-supplied documentation that 
          demonstrated that the equipment was qualified? 

     2.   Did the licensee perform adequate receiving and/or field 
          verification inspection to determine that the configuration of the
          installed equipment matched the configuration of the equipment 
          that was qualified by the vendor? 

     3.   Did the licensee have prior notice from any source that, equipment
          qualification deficiencies might exist? 

     4.   Did some licensees identify similar problems and correct them 
          before the deadline? 

To illustrate how these factors would be applied in specific cases, the 
staff will use as an example in the discussion which follows deficiencies in 
the qualification of the internal wiring of certain valve operators recently
identified at several plants. Vendor EQ test reports provided to licensees 
were ambiguous regarding whether the internal wiring of the operators was 
qualified by the reports. It has now been determined that vendor EQ test 
reports did not include qualification of the internal wiring of the 
operators and that the wiring used in the test operators could be different 
than the wiring installed in production units. Subsequent wiring 
modifications by the valve manufacturer or by the installer have introduced 
additional wiring which was not covered by the operator qualification 
reports. Physical inspection has shown instances of unidentified or not 
qualified wiring installed in several valve operators. 

These operators are used on a wide variety of valves at the plants and in 
many cases were used on valves which were part of systems covered by 
technical specifications (TS) such as containment isolation valves. The 
wiring in the operators should have been qualified by November 30, 1985. 
Thus, plants at which such significant deficiencies are identified after the
deadline for which further testing or analysis is required to establish 
qualification and which operated in noncompliance are subject to a possible 
penalty of $5,000 per item per day if such licensees clearly knew or clearly
should have known of the deficiencies. In some plants, this could amount to 
a substantial penalty. 

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With regard to the first two factors, reliance on vendor-supplied 
information on testing of equipment and performance of receiving and/or 
field verification inspections, the licensees took the position that the EQ 
test reports provided by the vendor covered the wiring and did not perform 
adequate receiving or field verification inspections to positively identify 
the internal wiring.We and the licensees now know that the vendor test 
reports did not cover the wiring in the operators. 

In addressing qualification by test, paragraph (f) of 10 CFR 50.49 requires 
that each item of electrical equipment important to safety must be qualified
by testing an identical item or testing a similar item with supporting 
analysis that the equipment to be qualified is acceptable. It may not be 
reasonable to rely entirely on vendor-supplied information in establishing 
similarity since changes to complex equipment are likely to occur during the
manufacturing process and/or installation. A comprehensive receiving and/or 
field verification inspection of the equipment by the licensees should be 
conducted to identify significant discrepancies between the as installed vs.
qualified configurations. 

With regard to the third factor, prior notice of similar problems, the 
results of one field verification inspection of equipment prompted IE to 
issue an Information Notice in 1983 to alert licensees to several 
deficiencies affecting equipment qualification. This Notice discussed a 
construction deficiency report related to inspection of valve operators at a 
plant under construction. Among several specific qualification-related 
concerns, this Notice stated that "No identification was evident on certain 
materials internal to the valve operators (e.g., wiring, insulation, etc.)" 
and stated that "It is not presently known whether these types are qualified
for the service conditions." This Information Notice also highlighted the 
fact that "Information obtained from purchase order files and qualification 
files does not agree with the installed components." Based on the above, the
staff concluded this document provided prior notice of the potential 
problems with certain valve operators. Given this information, it was 
unreasonable for licensees to rely entirely on the vendor reports without 
doing additional work to ensure that the wiring was qualified. 

With regard to the fourth factor, some licensees did identify and correct 
this problem before the November 30, 1985 deadline. The unqualified wiring 
was identified by these licensees as a result of walkdown verification of 
the installed equipment or comprehensive review of qualification files. 

After consideration of all of these factors, the staff has concluded that in
the case of the wiring, licensees "clearly should have known" that the 
vendor documentation was not adequate to support qualification. 

Time Period to be Considered for Daily Civil Penalty 

Once the staff concludes that the "clearly knew or should have known" test 
is applicable, the staff must determine the appropriate period over which to
assess a daily civil penalty. The staff has concluded that the appropriate 
period is from November 30, 1985 to the time the licensee completes its 
evaluation and schedules corrective action. This approach should encourage 
timely identification and evaluations by licensees of the qualification of 
the equipment. A licensee should not be penalized for each day after the 

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is identified and appropriate corrective action is scheduled that it elects 
to operate until the problem is fixed assuming a reasonable determination 
was made that it was safe to allow continued operation. Imposing daily civil
penalties until the violation is corrected would provide strong incentives 
for shutdown even though the licensee had determined that continued 
operation for some reasonable period of time is not unsafe. However, if the 
licensee's determination that it was safe to operate is later found to be in 
error, shutdown may be required and the licensee may be subject to daily 
civil penalties. Since such penalties are likely to quickly become 
abnormally high, particularly as the length of time between the November 30 
deadline and the date of inspection increases, the staff has determined that 
some cap on the possible amount of the civil penalty should be imposed. The 
staff has determined that this is appropriate especially for those cases in 
which the "clearly should have known" test is applied as opposed to cases in 
which the licensee "clearly knew" that they were not in compliance. The 
staff has selected a cap of $500,000 per item or approximately the amount 
that would be imposed for one item that was deficient for 100 days after the 
deadline. The mitigation factors would then be applied to mitigate from 
$500,000 per item down if appropriate. Similarly. since the reasonableness 
of the schedule for corrective action is a factor to be considered for 
mitigation of the daily civil penalty, if the licensee fails to meet its 
schedule, additional civil penalties will be considered. 

In the case of the valve operators described above, in one hypothetical 
situation, suppose that a Resident Inspector notified one licensee two weeks
after the deadline that the qualification of the valve operators was 

That licensee evaluated the situation and concluded that the qualification 
of the wiring could not be verified. The licensee performed a final 
evaluation two weeks later justifying continued operation with the 
unqualified equipment and planned to replace the equipment at the next 
scheduled refueling outage in two months. The staff would conclude that this
licensee would be subject to a daily civil penalty of $5,000/item/day for 28

Application of the Mitigation Factors 

Once it has been determined that a licensee may be subject to a daily civil 
penalty under this test, Generic Letter 85-15 specifies that the staff 
should apply certain mitigation factors to determine the amount of the 
proposed penalty. The factors specified in the letter were: 

     1.   Did the licensee identify and promptly report the noncompliance 
          with 10 CFR 50.49? 

     2.   Did the licensee apply best efforts to complete environmental 
          qualification within the deadline? 

     3.   Has the licensee proposed actions which can be expected to result 
          in full compliance within a reasonable time? 

These factors are self-explanatory. In addition, the staff would consider 
the circumstances of each particular case including the significance of the 
deficiencies identified, the opportunities available to identify and correct

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them, the time taken by the licensee to make a determination, the quality of
the supporting analysis, and the length of time the deficiencies existed 
before identification. The following discussion illustrates how these 
mitigation factors would be applied in the hypothetical case of a licensee 
which identified the valve operator problem. 

We assume that the licensee identified the potential problem with 
qualification of the internal wiring of valve operators after conversations 
with the NRC Resident Inspector. We assume that it immediately initiated a 
timely investigation, determined that qualification of its valve operators 
was not fully supported due to problems with the internal wiring, and 
notified the NRC of this determination via telephone and continued to 
evaluate the problem. Within two weeks of becoming aware of the problem, the
licensee submitted a 10 CFR Part 21 report to the NRC. Included in this 
submittal was the licensee's justification for continued operation of the 
plant and a plan for corrective action. 

Further we assume that the licensee actively worked to achieve its 10 CFR 
50.49 deadline of the second refueling outage after March 31, 1982 and was 
able to meet it except for some items of equipment for which justifications 
for continued operation (JCOs) had been approved. Later, NRC was notified by
telephone that all work on equipment scheduled for replacement and/or 
relocation and covered by the previously approved JCOs had been 
accomplished. Therefore, all equipment within the scope of 10 CFR 50.49 was 
believed to be qualified well before.the November 30, 1986 deadline. 

Finally, we assume that this licensee's 10 CFR Part 21 report submitted to 
the NRC included a schedule for corrective actions to establish 
qualification of the wiring of all valve operators within the scope of 10 
CFR 50.49 and that this schedule called for the replacement of existing 
wiring with qualified wiring on all affected operators within two months. 

The staff has concluded that this licensee would be entitled to complete 
mitigation under these factors. However, to be fair and equitable to those 
licensees who either took appropriate actions prior to November 30 or shut 
down on November 30 in order to be in compliance, some civil penalty should 
be imposed. Thus, the staff has concluded that the daily civil penalty 
should be adjusted in accordance with the factors but the civil penalty 
levied should not be lower than $50,000, the base civil penalty for an 
ordinary Severity Level III violation, in any case in which significant 
deficiencies remained at the close of the inspection for which further 
testing or analysis was required to establish qualification and which the 
licensee "clearly knew or should have known" existed before the November 30 

Other Enforcement Regarding Violations of EQ Requirements Identified at 
Plants Operating After November 30  

If violations of the EQ rule identified during first-round1/ inspections at 
plants operating after November 30, 1985 apparently existed before the 
deadline, then the "clearly knew or should have known" test should be 
applied. If the 

1/ First-round inspections are special team inspections to review licensees'
compliance with 10 CFR 50.49. 

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licensee meets the test, enforcement should be taken as described above. If 
the licensee does not meet this test, no enforcement action should be taken.
If the licensee could not have reasonably been expected to discover the 
problem before the November 30 deadline, presumably the noncompliance could 
not have been avoided and enforcement action to deter future noncompliance 
would serve no purpose. 

If the violations of the EQ rule identified after November 30, 1985 do not 
relate back to action or lack of action before the deadline; e.g., a 
modification was made in January 1986 that created the violation, or are 
identified after first-round inspections are completed, enforcement should 
be taken under the current Enforcement Policy. The present policy states as 
an example of Severity Level III: "2. A system designed to prevent or 
mitigate a serious safety event not being able to perform its intended 
function under certain conditions (e.g., safety system not operable unless 
offsite power is available; materials or components not environmentally 
qualified)." Thus, no changes to the Enforcement Policy are necessary to 
take into account EQ violations. Consistent with the interpretations of the 
Enforcement Policy in other areas, less significant violations that indicate
a programmatic breakdown can also be grouped and categorized as Severity 
Level III violations. 

For licensees that were not in compliance with the rule before the November 
30, 1985 deadline and did not submit timely requests for extension, but 
which did not operate in noncompliance after the deadline, consistent with 
the Commission's direction in response to SECY 85-220, (Memorandum from S. 
J. Chilk to W. J. Dircks, August 27, 1985) the staff will exercise 
enforcement discretion after considering whether adequate JCO's were 
provided and whether an extension would have been granted if timely filed. 

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