Modified Enforcement Policy Relating to 10 CFR 50.49, "Environmental Qualification of Electrical Equipment Important to Safety for Nuclear Power Plants" (Generic Letter No. 88-07)
NUCLEAR REGULATORY COMMISSION
WASHINGTON, D.C. 20555
April 7, 1988
TO ALL POWER REACTOR LICENSEES AND APPLICANTS
SUBJECT: MODIFIED ENFORCEMENT POLICY RELATING TO 10 CFR 50.49,
"ENVIRONMENTAL QUALIFICATION OF ELECTRICAL EQUIPMENT IMPORTANT TO
SAFETY FOR NUCLEAR POWER PLANTS" (GENERIC LETTER 88-07)
Generic Letters, Bulletins, and Information Notices have been issued to
provide guidance regarding the application and enforcement 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, and
Generic Letter 86-15, issued September 22, 1986, provided information
related to the deadlines for compliance with 10 CFR 50.49 and possible civil
penalties applicable to licensees who were not in compliance with the rule
as of the November 30, 1985 deadline. Upon review, the Commission found that
the EQ Enforcement Policy promulgated in Generic Letter 86-15, could result
in imposition of civil penalties that did not properly reflect the safety
significance of EQ violations with respect to civil penalties imposed in the
past. In the interest of continuing a tough but fair enforcement policy, the
Commission determined that the EQ Enforcement Policy should be revised. The
purpose of this letter is to provide a modification to the NRC's enforcement
policy, as approved by the Commission, for environmental qualification (EQ),
violations. This letter replaces the guidance provided in Generic Letters
85-15 and 86-15.
Modified EQ Enforcement Policy
The details of the modified EQ enforcement policy are provided in the
enclosure. Generally, the changes made to the policy are to: (l) aggregate
significant EQ violations together, rather than consider each separate item
of unqualified electrical equipment, for assessment of a civil penalty, (2)
assess a base civil penalty according to the number of systems or components
which are affected by the unqualified equipment in a graded approach by
assignment of the aggregate EQ problem into one of three categories, (3)
establish a maximum EQ civil penalty of $750,000 for most cases, (4)
maintain a minimum civil penalty of $50,000 for a significant EQ violation
in most cases, and (5) consider mitigation or escalation of the base civil
penalty based on the factors of identification and reporting, best efforts
to complete EQ within the deadline, corrective actions, and duration of the
This modified policy should not be interpreted as a lessening of the NRC's
intention to assure that all plans comply with EQ requirements. The modified
policy is intended to give a significant civil penalty to those licensees
with significant EQ violations. The NRC's view is that the modified policy
more closely reflects the relative safety importance of EQ violations with
other enforcement issues.
When a potential deficiency has been identified by the NRC or licensee in
the environmental qualification of equipment (i.e., a licensee does not have
Generic Letter 88-07 -2- April 7, 1988
adequate basis to establish qualification, the licensee is expected to make
a prompt determination of operability (i.e., the system or component is
capable of performing its intended design function), take immediate steps to
establish a plan with a reasonable schedule to correct the deficiency, and
have written justification for continued operation, which will be available
for NRC review.
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. In this connection, it must
also be shown that subsequent failure of the equipment, if likely under
accident conditions, will not result in significant degradation of any
safety function or provide misleading information to the operator.
The following actions are to be taken if a licensee is unable to demonstrate
a. For inoperable equipment which is in a system covered by plant
technical specifications, the licensee shall follow the
appropriate action statements. This could require the plant to
shut down 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.
The licensee must also evaluate whether the findings are reportable under 10
CFR 50.72 and 50.73, 10 CFR Part 21, the Technical Specifications or any
other pertinent reporting requirement, including 10 CFR 50.9(b),
particularly if equipment is determined to be inoperable.
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, DC 20503.
Should you have questions on this letter, the staff contact is Howard Wong,
Office of Enforcement. He can be reach on (301) 492-3281.
Frank J. Miraglia
Associate Director for Projects
Office of Nuclear Reactor Regulation
Enclosure: As stated
MODIFIED ENFORCEMENT POLICY FOR EQ REQUIREMENTS
This enclosure provides the details of the modified enforcement policy for
EQ requirements for those licensees who were not in compliance with 10 CFR
50.49 as of the November 30, 1985 deadline.
I. Scope of the Enforcement Policy for EQ Requirements
If violations of the EQ rule identified at plants operating after
November 30, 1985 existed before the deadline and the licensee "clearly
knew or should have known" of the lack of proper environmental
qualification, then enforcement action may be taken as described in
Sections III and IV. If the licensee does not meet the "clearly knew or
should have known" test, no enforcement action will be taken.
This enforcement policy applies to violations of the EQ rule identified
after November 30, 1985 which relate back to action or lack of action
before the deadline. Violations which occurred after November 30, 1985
(either as a result of plant modifications or because the plant was
licensed after November 30, 1985) will be considered for enforcement
action under the normal Enforcement Policy of 10 CFR Part 2, Appendix
C. In addition, EQ violations which are identified after the NRC's last
first-round Inspection, 1/ approximately mid-1988, will also be
considered under the normal Enforcement Policy.
II. Application of the "Clearly Knew, or Should Have Known" Test
Licensees who "clearly knew" they had equipment for which qualification
could not be established may have committed a deliberate violation of
NRC requirements. This situation will be evaluated on a case-by-case
The NRC will examine the circumstances in each case to determine
whether the licensee "clearly should have known" that its equipment was
not qualified. The factors the NRC 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 that equipment qualification
deficiencies might exist?
4. Did other licensees identify similar problems and correct them
before the deadline?
1/ First-round inspections are special team inspections to review
licensees' compliance with 10 CFR 50.49.
Enclosure - 2 -
In assessing whether the licensee clearly should have known of a
deficiency, the information provided to the licensees by the NRC and
the industry on specific deficiencies will be taken into consideration.
This information, and the timeliness of it being provided to licensees
prior to the EQ deadline are relevant factors. If one licensee
determined that a specific EQ deficiency existed, it would not be
assumed that all licensees should have also come to the same conclusion
unless information about the specific deficiency had been widely
disseminated within the industry or by the NRC. The staff will
carefully consider these criteria when evaluating whether a licensee
clearly should have known of a deficiency prior to the deadline.
III. EQ Violations not Sufficiently Significant to Merit a Civil Penalty
Under the Modified Policy
Any failure to adequately list and demonstrate qualification of
equipment required by 10 CFR 50.49 may constitute a violation of the
rule. This does not require, however, that all violations of the rule
be considered for escalated enforcement or be assessed a civil penalty.
For example, if the qualification file presented to the inspector
during an inspection did not demonstrate or support qualification of
equipment, the equipment would be considered unqualified 2/ and 10 CFR
50.49 requirements would be violated. However, although not in the
qualification file, if sufficient data exists or is developed during
the inspection to demonstrate qualification of the equipment or based
on other information available to the inspector, the specific equipment
is qualifiable for the application in question, the qualification
deficiency is not considered sufficiently significant for assessment of
civil penalties. These violations would be considered to be Severity
Level IV or Severity Level V violations based on a violation of 10 CFR
50.49 requirements at the time of the inspection.
Programmatic violations or problems that are identified as a result of
the EQ inspections that involve several EQ violations which themselves
would not be considered sufficiently significant to merit a civil
penalty under the modified EQ enforcement policy nonetheless may be
aggregated and evaluated for escalated enforcement action (generally
Severity Level III) for the failure to satisfy applicable requirements
of 10 CFR 50.49 and/or 10 CFR Part 509 Appendix B. The civil penalties
for these violations would be assessed under the normal Enforcement
Policy of 10 CFR Part 2, Appendix C (Supplement I).
IV. Basis for Determining Civil Penalties
A. Base Civil Penalty
Significant EQ violations, for which the licensee clearly should have
known that they had equipment for which qualification had not been
2/ For purposes of enforcement, unqualified equipment" means equipment for
which there is not adequate documentation to establish that this
equipment will perform its intended functions in the relevant
Enclosure - 3 -
are to be considered together, in the aggregate, and the base civil
penalty assessed in a graded approach based on the number of systems or
components affected. 3/
The base civil penalty would be determined as described below.
EQ Violation Category Base Civil Penalty
A. Extensive; EQ violations affecting many $300,000
systems and many components.
B. Moderate; EQ violations affecting some $150,000
systems and some components.
C. Isolated; EQ violations affecting a $ 75,000
limited number of systems and components.
The three EQ violation categories reflect the overall pervasiveness and the
general safety significance of significant EQ violations. The NRC considers
violations of EQ requirements to be safety significant because the
electrical equipment required to be qualified were those which have
importance to safety. The violation categories do not include those EQ
violations which have been determined to be not sufficiently significant
standing alone to be considered for escalated enforcement and which will be
normally considered as Severity Level IV or V violations, as described in
Section III. As stated in Section III, however, programmatic problems may be
the subject of escalated enforcement action under the NRC's normal
The significance of the EQ violations is considered when the NRC evaluates
the number of systems affected by the EQ violations and determines the EQ
violation category. The NRC will assume, for escalated enforcement cases,
that the unqualified equipment could affect operability of the associated
system. The NRC will not consider refinements on the operability arguments
such as the actual time. The equipment is required to be operable,
administrative measures or controls available to ensure the safety function
is accomplished, the degree to which the operability of a system is
affected, or, that through additional analyses or testing, the equipment may
be demonstrated to be qualified or qualifiable. This assumption is made for
enforcement purposes in order to reduce the resources anticipated to be
spent by licensees and the NRC to evaluate in detail whether system
operability was in question.
3/ The EQ violation categories (A-C) will be used rather than the severity
levels in the normal Enforcement Policy of 10 CFR Part 2, Appendix C.
The base civil penalty for the violations will be applied consistent
with the statutory limits on civil penalties under Section 234 of the
Atomic Energy Act.
Because the NRC is considering enforcement action rather than a
justification for continued operation and the EQ deficiencies have been
corrected in most instances, the NRC will make a conservative judgment
as to the overall safety significance of the EQ violations based on the
number of safety systems affected. This approach has the benefits of a
relatively quick, though conservative, view on the safety consequences
of unqualified equipment and will focus on the underlying cause of the
Cases involving deliberate violations or very serious EQ violations
(More safety significant than considered in this modified enforcement
policy such as widespread breakdowns or clearly inoperable systems)
will be evaluated on a case-by-case basis and may be subject to more
severe sanctions than those described in this policy.
B. Mitigation/Escalation Factors
Mitigation and escalation of the base civil penalty determined in
Section IV.A will be considered in the determination of the civil
penalty amount. The NRC will consider the EQ violations in aggregate,
not based on individual violations. Adjustment of the base civil
penalty will be considered as described below:
Mitigation/Escalation Factors Maximum Mitigation/
Escalation Amount (from
base civil penalty)
1. Identification and prompt reporting, +/- 50%
If required, of the EQ violations
(including opportunities to identify
and correct the deficiencies).
2. Best efforts to complete EQ within the +/- 50%
3. Corrective actions to result in full +/- 50%
compliance (including the time taken
to make an operability or qualification
determination, the quality of any support-
ing analysis, and the nature and extent
of the licensee's efforts to come into
4. Duration of violation which is +/- 50%
significantly below 100 days.
In order to be fair and equitable to those licensees who took appropriate
actions prior to November 30, 1985 or shut down prior to this date to be in
compliance, civil penalties generally should not be less than $50,000 to
emphasize that a significant environmental qualification failure is
The NRC will, however, consider full mitigation (no civil penalty) for those
EQ violations which satisfy all of the five following criteria: (1)
violations which are isolated and affect a limited number of systems and
components, (2) violations which are identified by the licensee, (3)
violations which are promptly reported to the NRC, if required, (4)
violations which are corrected and actions taken will result in full
compliance within a reasonable time, and (5) violations for which the
licensee has demonstrated best efforts to complete EQ within the deadline.
Enclosure - 5 -
The intent of full mitigation of the civil penalty for EQ violations which
meet all five criteria is to increase the incentive for self-identification
of EQ deficiencies which might not otherwise be found by NRC. The NRC will
generally issue on a Notice of Violation for violations which meet all these
If the licensee is able to convincingly demonstrate at the time of the
inspection, or shortly thereafter, that an item is not required to be on the
EQ list, then the item would not be considered for enforcement action. The
NRC does not intend to consider for enforcement purpose the results of a
licensee's after-the-fact testing for mitigation where the licensee clearly
should have known that its documentation was not sufficient.
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